12000 E. Skelly Drive
Tulsa, Oklahoma 74128-2486
Telephone: (918) 437-6881
Fax: (918) 234-1702
Sales: $94.58 million (1996)
Stock Exchanges: NASDAQ
SICs: 3812 Search Navigation & Aeronautical Systems
Since the late 1950s Lowrance Electronics, Inc. has been helping serious sports fishermen find fish. Lowrance, based in Tulsa, Oklahoma, designs, manufactures, and markets a range of sonar equipment, also known as depth finders, under the Lowrance, Eagle, and Sea brand names. Lowrance sonars provide visual readouts of underwater information, including geologic structure (bottom contour and consistency, depth of water, presence of underwater objects) and the presence, depth, amount, and even type of fish, improving not only the sports fisherman's catch, but also providing navigational assistance and enhanced safety for the recreational boater. Many of the company's sonar units also provide information on water temperature, traveling speed, and distance traveled. Lowrance sonar units house a transmitter, receiver, transducer, and a flasher, paper graph, or liquid crystal display; are waterproof or weatherproof and shock resistant; and are capable of providing accurate information in salt and fresh water, at speeds up to and beyond 70 miles per hour and at maximum depths up to 2,000 feet.
The company's high-end Lowrance brand sonars, which typically retail from $350 to $550, are marketed at more sophisticated users and are sold primarily through original equipment manufacturers (OEMs) and at boating showrooms. The Lowrance brand includes advanced features, such as Advanced Signal Processing (ASP) and Loran-C circuitry, as well as 18 interchangeable transducers. These transducers are selected and mounted according to the size and type of boat and are available in a range of frequencies and angles for the variety of sport fishing interests, from deep sea fishing to shallow water fishing.
At the lower end, the company's Eagle brand sonars are sold primarily through wholesalers, mail order, and mass merchandisers such as Wal-Mart stores, which account for about 14 percent of the company's annual sales. Eagle sonars offer fewer features than the Lowrance brand, and the prices of these units range between $99 and $300. Because the Eagle brand sonars generally are mounted by the consumer, they are usually outfitted with universal transducers suitable to a wider range of boat hulls and fishing areas. The company's Sea brand sonars, introduced in 1995, are distributed through coastal dealers and are targeted primarily at oceangoing sports fishermen and recreational boaters.
Lowrance also designs, manufactures, and markets Loran-C receivers and sonar accessories, such as mountings. Since 1991, the company has also produced Global Positioning Satellite (GPS) receivers, including the company's hand-held Global Map series, that provide highly accurate navigational assistance to boaters, hikers, hunters, recreational aviators, and others. GPS receivers represent the fastest growing portion of Lowrance's annual sales, accounting for 23 percent of the company's nearly $95 million in sales in 1996, compared with sonar products' 63 percent. The company operates manufacturing facilities in Tulsa and in Ensenada, Mexico. Darrell Lowrance, a co-founder of the company, remains president and CEO and holds 50.3 percent of the company's stock.
The "Little Green" Revolution of the 1950s
Fishing may be as old as humankind, but in the late 1950s the sport remained a largely hit-and-miss proposition. Advances in rod and reel technology, as well as in understanding such factors as thermoclines, or the temperature levels preferable to specific species of fish, had done much to improve a fisherman's chances. But "the one that got away" continued to be a popular fishing refrain, until, that is, Carl Lowrance and sons Darrell and Arlen introduced portable sonar to the sport.
Born in Cushing, Oklahoma, Carl Lowrance moved with his family to Claremore, Oklahoma in the 1930s, where the family operated a fruit and vegetable farm. In 1935, Lowrance, just out of high school, started up his own business with $123, hauling produce in an old pickup truck along a route stretching from the Gulf Coast to Oklahoma. After serving a stint as a flight instructor in the military during World War II, Lowrance and wife Thelma started up a banana ripening and distribution business, called the Banana House, that by the end of the 1950s grew to a 15-semitrailer operation. During these years, Lowrance also started up a side business raising quail for the Ralston Purina Co. Lowrance farm, which raised as many as 40,000 quail per year, was among the world's largest.
Lowrance had long been an avid fisherman, and sons Darrell and Arlen inherited their father's enthusiasm for the sport. It was during the 1950s, on a family fishing trip to Canada, that the Lowrance family hit upon the idea that would revolutionize sports fishing. Darrell and his father, apart from their enthusiasm for fishing, were also among the first inland skin divers in the country. Their experience under the surface of the water, particularly in Oklahoma's Great Lake, taught them several important facts about fish: That fish generally lived in schools; that species tended to inhabit specific areas in a body of water; and that, of great importance, one could not know from the surface where those areas were likely to be. The family sought a means for locating the fish.
As a flight instructor, Carl Lowrance had gained knowledge of sonar, an abbreviation of sound, navigation, and ranging, developed by the U.S. Navy during World War II as a means of tracking enemy submarine movements. After the war, fishermen attempted to adapt sonar to commercial use; these units were bulky and fairly primitive. The pulse length, that is, the ultrasonic signal sent and received by the transducer, for early sonar devices was four to eight feet long, making it suitable for locating large objects, such as a submarine or extremely large schools of fish. But these devices were not at all suited for the fishermen operating small craft and interested in individual fish.
Lowrance's idea was to adapt sonar for sports fishing, using the newly developed transistor technology. Transistors enabled Lowrance to reduce the size of a sonar unit so that not only could it be mounted even in a small skiff, it could also be operated on batteries. The next step was to reduce the unit's pulse length. Darrell Lowrance, then a freshman at the University of Arkansas studying math and physics, managed to reduce the pulse length to one foot, small enough to identify larger fish. By 1956, the Lowrances were ready with their first unit, dubbed the Fish Lo-K-Tor. In 1958, the family incorporated their business as Lowrance Electronics, Inc.
The company first contracted with a West Coast manufacturer to produce 2,000 units of their device. But the results were unsatisfactory. The family contracted with a second, larger West Coast manufacturer, but again the family was dissatisfied with the quality and quantity of what that company produced. Finally, in 1959, the Lowrances decided that the only way to control the quality and quantity of their invention, as well as ensuring its prompt delivery, was to go into manufacturing themselves. The family started up a factory and began producing the Lowrance Fish Lo-K-Tor. Their first step was to replace, free of charge, 700 of the earlier units that had already been sold.
Improvements and Competition, 1960s-80s
The "little green box," as the Fish Lo-K-Tor became known, soon revolutionized sports fishing. The first devices featured a small rotating neon light, or flasher, that lit up when the sonar pulse reached the waterbed, surface, or registered objects in between. The company worked to improve the product, reducing the pulse length to under one foot, while adding other features. The first of these was the technology to shoot the transducer's pulse through the hull of a boat. Next, the company developed a temperature-stable transducer that could also be used for ice-fishing. The unit's display was improved, adding a measurement dial to give accurate, visual readouts of the depth of the waterbed, and the depth and size of fish. The readout enabled the fisherman to determine the type of bottom as well: The neon flasher provided different readings for gravel, grass, or mud bottoms--important information for determining the type of fish likely to inhabit these environments. Another refinement, introduced in 1960, was a back-lighted faceplate, that allowed the Lo-K-Tor to be used in the pre-dawn darkness, a time of day favored by the serious fisherman.
The Lowrances began traveling across the country, giving demonstrations of their product. The company received a boost in 1964 when their product was featured in Field and Stream, the bible of the sports fisherman. Other improvements to the product followed rapidly. In the mid-1960s, the company developed interference suppression systems, improving the unit's accuracy; patented time-varying gain control circuits; and introduced the first transducers that could be used at speeds ranging from 15 to 65 miles an hour or more. At the end of the decade, the company unveiled other improvements, such as its patented system for variable pulse length suppression, ending electrical and acoustical interference, and a new patent for electronic speed control circuitry. Another important addition to the Fish Lo-K-Tor line was a paper printer, which provided printouts of the sonar findings. A fisherman could reuse the printout, enabling him to return to proven fishing locations during the same or subsequent fishing trips.
By the 1970s, the company faced intense competition in the recreational sonar market. At one point, more than 300 companies were marketing fish finders. Lowrance managed to survive by continuing to introduce innovative technology to their products. Among the company's important additions to its product line during the 1970s were the industry's first fully interchangeable selection of transducers, allowing their products to be used across a wide range of boat types and fishing interests. In 1979, Lowrance was the first to introduce microprocessors and keyboard entry into their sonar products. At the beginning of the 1980s, however, the industry at last underwent a shakeout, reducing the number of sonar manufacturers to less than 25. Lowrance maintained its industry lead, and by 1983 the company's sales neared $28.5 million, providing a net income of $1.4 million. By then, Carl Lowrance, who had retired from the company in 1975, was already making a mark in a new endeavor--raising salamanders, at first as bait, and then to supply the optical research community. (Salamander retinas were similar to human retinas, but larger, making them easier to use in research; Lowrance operated the only salamander farm in the country.)
Growth into the 1990s
In the early 1980s, Lowrance Electronics further refined its technology, introducing high resolution transmitters and receivers that now made it possible to identify an individual fish only an inch above or below another fish. Until the mid-1980s, Lowrance's dominance of the market was based principally on its paper graph displays, as well as on flashers. But in 1981, another company, Vexlar, introduced the first liquid crystal display (LCD) device. That product's poor resolution resulted in poor sales. Two years later, however, another company, Hummingbird, introduced the first true LCD sonar. With only 30 pixels, it came nowhere near the resolution of Lowrance's 1,000-line paper graph printers. But intense marketing and low prices, often subsidized, enabled the new LCD devices to challenge Lowrance's leadership position. Lowrance suffered a loss in 1985, of $2.2 million. Its revenues also dropped, to $33.7 million from $37.5 the year before.
Lowrance, which continued to hold the edge on shortness of pulse length, entered the LCD market, producing, in 1986, the industry's first true high resolution LCD displays. The company then followed that development with Super Twist LCD displays providing greater readout visibility. To fuel product development, which included the introduction of Loran-C navigational aids, the company went public in December 1986. By then, the company had regained its momentum, raising sales to $36 million and posting a net profit of $2 million.
Sales leaped to $45 million the following year, and the company again posted more than $2 million in net profits. After another bumpy year in 1988, which saw the company losing nearly $2.5 million on $42 million in sales, the company's sales, aided especially by increasing sales of its low-end products, climbed past $60 million by 1990. But by then the entire marine industry was in a slump. Boat sales were slipping and, with them, sales of Lowrance products. The company struggled to remain profitable, with net income hovering around $250,000 in 1989 and 1990. Then, in 1991, with the outbreak of the Persian Gulf War during the company's peak sales period, coupled with the ongoing recession and what was described as a nine-year "low" in the marine industry, Lowrance again stumbled, dropping revenues to $53.5 million and losing $2.4 million. Adding to the company's difficulties was rival Hummingbird's claims (accompanied by a massive advertising campaign) of having introduced a long-coveted three-dimensional fish finder. Lowrance responded by challenging that products actual 3D ability. The two companies filed lawsuits and eventually reached a settlement, with both sides claiming victory.
Lowrance's difficulties again proved temporary, however; by 1992, sales of Lowrance's newest addition to its product line--GPS receivers, first added in 1991--were beginning to have an impact on its bottom line. The GPS receivers, which used the military's network of 24 satellites locked in geosynchronous orbits, extended the appeal of Lowrance products beyond the sports fisherman, to hikers, hunters, and recreational aviators. Lowrance's Global Map products, which featured a built-in background map of the entire world, used a series of 64 cartridges providing detailed charts and maps, down to one-tenth of a mile, of every region in the United States, as well as much of the world. Among early users of the Global Map series were drivers in the grueling Baja 1000 off-road race. The next step in the Global Map series was the introduction of the Global Map 2000. Bundling GPS, sonar, and Loran-C receivers into one unit, the Global Map 2000 offered a powerful navigational tool. Its ability to record a history, enabling the user easily to retrace his path, set a new standard in the industry.
In 1993, to control costs, Lowrance started up a production facility in Ensenada, Mexico, moving parts of its transducer and cabling production there. The company continued to enhance its sonar line. Its BroadView sonars offered another feature long sought by sports fishermen, that is, the ability to provide readouts not only of depth but out to the sides. These readings could then be displayed in a truer 3D graphic. The company, however, was forced to settle a patent infringement suit brought against it by another company; under terms of the settlement, Lowrance paid $1 million and made a one-time payment of $100,000 to license the technology. The lawsuit, and a market crippled first by an extended winter and then by flooding throughout large regions of the country, took the company into the red again, for a loss of $700,000 despite a rise in revenues to $81.3 million in 1994. Carl Lowrance, retired from salamander farming in 1986, died in 1995.
In 1994, Lowrance had introduced another landmark product, the Eagle AccuNav Sport, a battery-powered, hand-held GPS receiver. The company quickly extended the Sports series, unveiling the Lowrance GlobalNav Sport in 1995 and the Lowrance GlobalMap Sport in 1996. This last, a hand-held version of the Global Map 2000, offered all of the larger unit's features, but in a size small enough to be easily carried by hikers, hunters, and others. Battery powered, the portable unit also featured a lithium ion backup battery capable of retaining large amounts of information in memory. In 1996, the company also introduced the AirMap GPS receiver, designed specifically for aviators.
GPS sales rose quickly, from 13 percent of the company's revenues to nearly one-fourth of sales by 1996, boosting total sales to nearly $95 million. In an effort to control costs and boost margins further, the company announced plans to expand its Mexico facility in 1997. This move appeared necessary as the company attempted to gain a larger share of the booming GPS market, 90 percent of which was already controlled by just two companies. Lowrance's strong record of technological innovation, its reputation for quality, and its history as a true fisherman's friend, made the company a strong challenger for future market share.
Principal Subsidiaries: LEI Extras, Inc.; Lowrance Avionics, Inc.
Gianturco, Michael, "Submarine Stocks To Buy," Forbes, April 27, 1992, p. 168.
Gibbs, Jerry, "Lowrance Global Map 2000: Marine Mapping Moves Inland," Outdoor Life, May 1996, p. 80.
"Inventor of Sonar Lo-K-Tor Dead at 82," Tulsa World, July 13, 1995, p. N12.
Karas, Nick, "Fishing for Savings But Losing Quality," Newsday, January 21, 1992, Sports Sec., p. 104.
Lowrance Electronics, Inc., "Company History," http://www.lowrance.com/lowrance/corp/corp3.htm.
------, "Decades of Innovation," http://www.lowrance.com/lowrance/corp/corp2.htm.
Maurer, Mitch, "Lowrance Slates Mexico Facility," Tulsa World, August 28, 1993, p. B8.
Powell, Sam, "Lowrance Leading Anglers into Space Age," Tulsa World, March 24, 1996, Sports Sec., p. B10.
Sasser, Ray, "Sonar Technology Still Takes Fishing to New Depths," Dallas Morning News, April 4, 1996, Sports Sec., p. 15B.
West, Gordon, "Small Is Better: A Look at Inland Maps on Lowrance Portable GPS Receivers," Trailer Boats, July 1996, p. 80.
Source: International Directory of Company Histories, Vol. 18. St. James Press, 1997.