Profile: Leading the Transition from Small, Private to Big, Public

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  Space News Business

Profile: Leading the Transition from Small, Private to Big, Public

By BECKY IANNOTTA
Space News Staff Writer
posted: 26 August 2008
04:55 pm ET






Paul Lithgow��

President, ComtechAeroAstro��

When Paul Lithgow joined Radyne Corp. two years ago as director of advanced concepts, one of his missions was to look for potential acquisitions – a search that led him to the doors of AeroAstro Inc. of Ashburn, Va. By July 2007, Phoenix-based Radyne had completed the acquisition of the small-satellite manufacturer founded in 1988 by Rick Fleeter, a longtime champion of the benefits of small satellites and the technology that makes them possible.

That’s how AeroAstro ended up in the portfolio of Comtech Telecommunications Corp. of , this summer. Lithgow briefly served as AeroAstro’s chief operating officer during the acquisition process; he became president of ComtechAeroAstro when the deal was finalized Aug. 1. Fleeter is staying on as the company’s chief innovation officer. Like Radyne, Comtech plans to allow AeroAstro to continue operating independently, Lithgow said.

The transformation of AeroAstro from a small, private company to part of a large publicly held corporation brings more stringent financial management amid a growing interest in the smallest of new satellites as the�� Defense Department’s Operationally Responsive Space initiative gathers steam.

Lithgow is no stranger to space, having held senior positions with Spectrum Astro, Aegis Research Corp. and the U.S. Air Force. He did leave the industry briefly from 2004 to 2006 to pursue his dream of operating a ranch for at-risk boys in his home state of .

His return to the space industry has not meant giving up living altogether. He commutes to ComtechAeroAstro’s headquarters every Monday morning and returns home on weekends to keep his dream alive by helping Agape Youth Ministries open a facility for at-risk teens similar to his former Alan Ranch. During the Small Satellite Conference in , , Lithgow discussed the new ComtechAeroAstro with Space News staff writer Becky Iannotta.

What is your vision for ComtechAeroAstro?

We’ve set a goal to double in three years. We want to be a player in experimental and small operational satellites. We’re not ready or interested in building a T-Sat (Transformational Satellite communications system) or GPS 3, but we really see a niche for ourselves in the small, micro and nanosat markets. We’re trying to increase the number of opportunities per year that we can go after.

We’re adding people at the mission and systems engineering level so we can get more in on the front end of studies to help customers solve a problem as opposed to selling the spacecraft bus. It’s purely for business that we’re doing it to have more opportunities to build satellites. We’re also increasing the agility, stability and power of our standard spacecraft bus products. With those two things we think we’re going to have more opportunities to bid; more opportunities to bid hopefully translates into more business.

Will Comtech be willing to dedicate the resources you need to grow the AeroAstro part of the business?

So far. Public companies are shareholder- driven and you need to increase shareholder value, so there’s a lot of focus on the bottom line. But we need that rigor and discipline in the space business. That’s our challenge, to build the budget and the plan to be able to grow while we’re still making money. You do that with very aggressive marketing, target the right programs and perform on what you have. The first and most important thing is to do the job on the contracts you already have.

What are some of your major contracts?

Right now we’re in the integration stage for the Standard Interface Vehicle for the Air Force Space Development and Test Wing. We’re a subcontractor to Ball Aerospace on that. We are in electrical integration and we will deliver the integrated bus to Ball in November. That’s our big hardware focus right now and then we have a couple other programs that are coming behind it.

Where does the bulk of your revenue come from?

About 60 percent is what we call space systems, which are either the studies or spacecraft bus kind of programs. Our communications business is about 30 percent and about 10 percent is spacecraft components.

How do you view the market landscape?

Operationally Responsive Space (ORS) seems like it is coming on line and we just won a contract for the Multimission Space Vehicle. We’re one of four companies that won a contract. The market is here. We just have to be innovative and agile enough to be successful.

What near-term government competitions are in your target area?

Our biggest growth focus this year is ORS- related activities. The ORS award we just got will have a down select, so that’s a high priority. TacSat 5 is coming out of the Air Force Research Laboratory. That is an ORS support job as well, so we’re going to put a lot of emphasis on TacSat 5. There also are a couple of jobs in the classified area we’re going after.

How has becoming a large company changed opportunities and the capital available for AeroAstro?����

This year we have been putting in the infrastructure that is helping us change over from a small private company to more of a player in this industry. We capitalized a lot of equipment we had been renting. We established our operations and finance functions and as a public company now there are a lot of stringent reporting requirements. We’ve always been a government contractor so we’ve had defense contractor auditing requirements, but we’ve really strengthened that whole operations and finance function to enable us to better track finances, to better predict costs on programs and better measure how we’re doing on programs.

We were cash-driven before so you had to worry about making the payroll and things like that so it’s nice not having to do that. At the same time there’s a lot of pressure that you have to make the bottom line, you have to make money for the shareholders. So it’s different but it’s good. Morale is high, and people are really excited about where we’re going.

What about NASA business?

The place where we fit in a NASA context is with the Small Explorers (SMEX) missions. On the last go-round on SMEX we bid on a few, but weren’t successful so we’re basically setting ourselves up for the next round, which is a year away. We are working on a lot of front-end stuff with NASA Ames and also on our components. We are heavily involved with several NASA centers. At NASA Ames they are doing a cubesat program that is student-focused and we’re trying to figure out how we can best apply work there with our tight connections to several universities – because Rick Fleeter is an adjunct professor at . We’re also working an early study with NASA’s Jet Propulsion Laboratory on a Jupiter-style mission with microsats.

What are the possibilities on the international market?

We look at things on a case-by-case opportunity. Sometimes it’s expensive to do things on the international market. We are exploring several things right now, I can’t really give you details, but we are exploring some opportunities both in and

Are
the International Traffic in Arms Regulations (ITAR) a hindrance?

You have to pay attention, and you have to have your infrastructure there to deal with it. For a small company we do have a real strong ITAR program. We don’t have the program that a Lockheed Martin has but we are fortunate enough to have an expert who came from a large company. That’s not as much of an issue to us as just the cost of doing business overseas.

Can a small company produce satellites as quickly as the market demands?

We’re optimized for short schedules and that’s a big focus of ORS with the standard interfaces and standard software. That’s an area we’ve worked in for years. The whole idea is to get things done faster and integrate smoother with less problems. That’s right in our sweet spot. We have small focus teams that take spacecraft from the beginning through integration and on to support operations.