SBRC STATE OF THE COMPANY ADDRESS By Dr. Fletcher R. Phillips President, SBRC  on February 21, 1990

1989 was a challenging year which saw many personnel changes at all organizational levels and strong market forces pressing us to become more cost-competitive. Our 17% employee reduction brought SBRC’s employee population to just over 1900. Along with these reductions, significant restructuring was accomplished (a reduction of the indirect workforce to 20% and a supervisory ratio of 9 to 1) which improves our productivity and our competitive posture and prepares us for the challenges we face in our future.

In the area of technology, 1989 brought many significant achievements. Second-generation FLIR (Forward-Looking Infrared) technology came of age and earned SBRC recognition as Contractor of the Year for the Headstart Program. Dr. Phillips proudly announced that “SBRC’s success in developing this technology will keep Hughes at the forefront of infrared technology for military and space applications; benefiting future Hughes’ programs.

Another success in 1989 was SBRC’s performance on the Boost Surveillance Tracking System (BSTS) program which “received results in the development program that have never been achieved before.” Mary Hewitt, SBRC’s Technical Director and Assistant Program Manager for BSTS, was named Technical Contributor of the Year from among all the BSTS contractor personnel.

SBRC continued its long history as a premier supplier of electro-optical instrumentation for remote sensing applications with its Visible Spin-Scan Radiometer (VISSR) which rode into space in September on Japan’s GMS-IV satellite to provide weather data for Japan and the world.

One of the most exciting space programs to get underway in 1989 was the Galileo probe to Jupiter with SBRC’s photopolarimeter radiometer (PPR) onboard. After delivery in 1983, the PPR sat through five years of shuttle delays awaiting its chance to perform. When Galileo was refurbished for launch in 1988 and 1989, the PPR was found to be in perfect shape for launch. The October launch from the space shuttle Atlantis marks the first time an SBRC instrument has been launched from the space shuttle. Upon reaching Jupiter in 1995, after 2.4 billion mile journey, the PPR will begin to provide atmospheric temperature profiles of Jupiter and its moons and a study of Jupiter’s cloud and haze properties.

SBRC State of the Company Address
Dr. Fletcher R. Phillips
Page 2. Concerning declining DoD budgets, Dr. Phillips is optimistic in that. SBRC is well-positioned to succeed in the coming business environment. “We are diversified,” he said, “in both the age of our programs (between research, development, and production) and from the standpoint of having a significant civil space line. But there is no question that SBRC’s current 80-20 mix between defense and non-defense programs will challenge significantly as we look at logical extensions of business to capitalize on the quality of our investments in terms of our facilities and our people.”

One non-traditional source of business diversity shared with the audience was the G.M. (Indium Antimonide) Magneto Resistive anti-breaking device, which requires the production of many items at a very low price. Such production represents a significant change for SBRC. In more traditional areas SBRC will look to broaden international visibility and partnerships with Hughes. In addition, SBRC is well-positioned to participate in the renaissance of civil space exploration and remote observation of the earth, including NASA’s “Mission to Planet Earth” which builds upon a solid foundation of SBRC participation in past Geostationary Observational Environmental Satellite (GOES) missions and the company’s central role in instrumentation and systems management of the LANDSAT program through the EOSAT company (a joint venture of Hughes and R.C.A.).

Dr. Phillips concluded his remarks on diversification by talking about SBRC’s InSb focal plane array in the infrared telescope on top of Mauna Kea in Hawaii. This telescope “looks light years away at the formation and death of galaxies,” Dr. Phillips said, “when you think of that, our position is unique. We are sitting here working on devices representing a transition from microns to light years.”

In 1990 and beyond, Dr. Phillips saw opportunity for many advances in both Detector and sensor technology. Central to SBRC’s strategy will be improved productivity of infrared detectors and focal plane arrays. Major advances in yields and performance on such programs as MANTECH promise continued success. “We have amazed people in what we have been able to accomplish in producing high quality, low cost Focal Plane Arrays and detectors” Dr. Phillips said. “At this point we are the best-positioned company in the world to be successful in these production efforts.”

Dr. Phillips finished by saying he was looking forward to an “important entry into the next generation of earth imaging instruments” with an award this year on the next
phase of development on MODIS-N. With MODIS-N, SBRC will be capable of providing information on earth landmass, vegetation and the lower atmosphere in 36 spectral bands.
Looking at the Strategic Plan currently being developed at SBRC, Dr. Phillips said it “calls for us to be a technology and innovation driven company and a world leader
in electro-optical devices, sensors and specialized semiconductor components. In achieving this, we have the responsibility to manage our business to produce superior
value to our customers while not losing sight of the values we have held in terms of the individual – their integrity, and their value to this company.” To achieve this SBRC
management is formulating a set of objectives (which will be communicated to all employees) to promote management administrative systems to facilitate productivity, encourage employee authority and responsibility. Among SBRC’s key objectives for 1990 is continuation and expansion of CMI throughout the Company. Through individual and team efforts, CMI took hold in 1989 and yielded significant results, including $5. million in savings and improvements in product operations, improved engineering systems and
streamlined administrative procedures. Dr. Phillips concluded by saying that we are living in challenging times that “will require agility, innovation and a lot of effort. The force behind our continued success and the basis for my optimism for the future is the quality
of our people. My confidence, my optimism, is based on the fact that I have such confidence in your abilities.”