Company Description
TrueTime designs, develops, manufactures and markets precision time and
frequency products that are essential components used in telecommunications,
computer networking, e-commerce, aerospace and various other commercial markets.
Our products use a variety of external timing references, including most
importantly the Global Positioning System, or GPS, together with advanced timing
devices to provide high quality signals (frequencies) and precise time. We offer
a wide variety of products, which can be divided into the following broad
categories: (1) precise time and frequency products, (2) computer plug-in cards,
(3) computer network time servers, (4) time code products and (5) time displays.
Our products, incorporated as components in complex systems, allow
customers to
- improve clarity and quality of voice, video and data in wireline,
wireless and satellite communications,
- authenticate the time of stock market and other e-commerce transactions,
- monitor and control the frequency of electric utility power grids to
prevent power black-outs and quickly locate power line faults,
- transmit television signals at designated frequencies to meet regulatory
requirements,
- meet requirements for secure communications, particularly in national
defense and security contexts, and
- time high resolution data collected in military ranges and in space
launches with a high degree of accuracy.
Our customers are businesses and government agencies that have
sophisticated and demanding needs for timing with greater accuracy and
resolution than available from conventional time measuring devices. A
substantial portion of our sales is made to numerous, and usually repeat,
customers who purchase small quantities of multiple types of products and who
often have custom or semi-custom specifications. Representative of typical
customers are some of the best-known enterprises engaged in
- telecommunications -- Lucent Technologies, PanAmSat Corporation and
companies which were part of the old AT&T system,
- computer networking -- Novell, Inc., Lucent Technologies and Cisco
Systems, Inc.,
- e-commerce -- NYSE, Nasdaq Stock Market, Chicago Mercantile Exchange,
Chicago Board of Trade and Ameritrade Information Service,
- power utilities -- PG&E Corporation and Bonneville Power Administration,
- aerospace -- The Boeing Company, Northrup Grumman Corporation, FAA and
Allied Signal Aerospace,
- television -- CNN, Westwood One and WHDTV, the high-definition television
model station, and
- national defense -- separate purchasing arms of the Department of Defense
and Hughes Network Systems, Lockheed Martin Corporation, Motorola, Inc.,
Raytheon Systems Company, Litton Denro (a subsidiary of Litton
Industries, Inc.) and NASA.
In fiscal year 1999, we sold our products to more than 1,000 customers. We
believe that the size and diversity of our customer base reduces the business
risk inherent in dependence on a small number of large-volume customers.
In the fiscal year ended September 30, 1999, we achieved sales of $20.6
million, an increase of 26.7% over the prior fiscal year, resulting in net
income of $2.3 million, an increase of 40.0% over the same period.
OUR INDUSTRY AND MARKET
Our time and frequency products are integral to the expanding
communications infrastructure composed of wireline, wireless (including
satellite) and computer network technologies. The increase in demand for
precision timing is due in part to the growth in communications and computer
network systems worldwide. Growth in data, voice and video transmissions on
these networks is anticipated to lead to an increased demand for substantial
bandwidth compared to traditional voice traffic. We believe that the convergence
of wireline, wireless and computer network systems and the pervasive growth of
the Internet and e-commerce will lead to increased demand for precision time and
frequency devices.
Precision time and frequency devices normally require use of an external
timing reference to maintain required accuracy. Currently, the predominantly
used standard is the highly accurate time reference available from GPS operated
by the U.S. Department of Defense. The demand for precision time and frequency
referenced to GPS has grown with the increased use of digital wireless
communication and is now, in addition to more traditional uses in the aerospace,
utility and broadcast industries, being incorporated into wireless, computer and
high-speed wireline networks.
Two marketing research firms that follow the GPS industry are Frost &
Sullivan and Allied Business Intelligence. These firms provide forecasts for
industry growth by segments, including forecasts in the growth in timing
products using GPS as a timing reference. Their forecasts for future growth of
the timing product segment are consistent, but not identical. According to
forecast data from a Frost & Sullivan report we obtained
- the aggregate North American market for GPS related timing products is
projected to grow from $209 million to $368 million during the five-year
period from 2000 through 2004, reflecting a compound annual growth rate
of approximately 15% during such period.
According to forecast data from an Allied Business Intelligence report we
obtained covering the same five-year period
- the aggregate U.S. market for GPS related timing products is projected to
grow from $238 million to $383 million, reflecting a compound annual
growth rate of approximately 13% during such period.
OUR STRATEGY
We have already established name-recognition in the time and frequency
industry. Our investments in new technology have given us the capability to
enter new segments of the timing market and allow us to reduce the time needed
to market new products. Now, our goals are to
-- Introduce new products by
- targeting the growing telecommunications, e-commerce, computer
networking and digital wireless market segments,
- increasing our research and development budget and capabilities, and
- applying core technologies in new markets.
-- Form strategic relationships by
- developing alliances with companies that offer complementary products
and technologies, and
- exploring opportunities to acquire companies with technologies that
will enhance our product lines, add new related products or add
economies of scale to our existing operations.
-- Continue to gain market share by
- developing, manufacturing and marketing the highest quality precision
time and frequency products,
- applying new technology to current applications,
- increasing international sales through increased marketing activities
abroad, and
- improving distribution channels.
CORPORATE INFORMATION
In 1991, OYO U.S.A. acquired our business as part of its acquisition of
Kinemetrics, Inc., which manufactures and sells earthquake instrumentation.
Shortly after acquiring Kinemetrics, OYO established a new California
corporation named TrueTime, Inc., and transferred the ownership of the
Kinemetrics/ TrueTime business to the newly established corporation. In November
1999, we were reincorporated in Delaware.
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