Looks like Meade is expanding its astronomical empire. See the latest news. Is this good or bad?
Gordon
Meade Instruments to Acquire Coronado Technology Group: ``Leader in
Solar Observation Instrumentation''
IRVINE, Calif.--(BUSINESS WIRE)--Oct. 21, 2004--Meade Instruments
Corp. (NASDAQ:MEAD) has signed a definitive agreement to acquire all
the assets and substantially all the liabilities of privately held
Coronado Technology Group, LLC ("Coronado"), the world's leading
manufacturer and distributor of solar telescopes and filters, for
approximately $2.5 million in cash and an earnout tied to financial
performance. The transaction, which is subject to usual
contingencies, is expected to close not later than Nov. 30, 2004.
Since 1998 Coronado, then doing business as Coronado Instrument
Group, has been the world's leading supplier of high-quality
hydrogen-alpha filters and dedicated solar telescopes, as well as
various related accessories, designed to meet the needs of amateur
as well as professional solar observers. The business, to be
incorporated as Coronado, Inc. and operated as a wholly owned
subsidiary of Meade Instruments, will currently remain headquartered
in Tucson, Ariz.
"Not only does the acquisition of Coronado take us into a market
segment -- solar observation -- in which we do not participate,"
said Steven G. Murdock, president and CEO, "but it immediately
establishes us as the segment leader with a line of products of
unsurpassed quality and performance. With the purchase come a number
of very attractive assets, including some of the most valuable
intellectual property in the field, notably patents issued and
pending covering both the design and fabrication of Coronado's novel
etalon structure; a highly regarded brand that will, we believe,
appeal to many of Meade's existing customers; a wealth of expertise
in the design and manufacture of optical instruments and accessories
that meet the highest standards for reliability and safety; an
experienced and committed workforce; and distribution channels that
complement Meade's existing channels and offer numerous
opportunities for the cross marketing of products. All told, we view
the acquisition as extremely attractive in its own right, and as an
important step in Meade's program to become a more broadly based
consumer optics company founded on strong engineering and a
comprehensive intellectual property portfolio.
"Unlike the deep-space objects that amateur astronomers are
accustomed to viewing," said Murdock, "the sun presents a vibrant,
ever-changing spectacle of prominences, filaments, sunspots, and
flares. Coronado's recently introduced entry-level Personal Solar
Telescope(TM) retails for $499.00 and employs much of the technology
found in Coronado's more expensive MaxScopes(TM), which sell for as
much as $12,000; and although the PST(TM) addresses a market that is
smaller than the market for celestial telescopes, it has, we
believe, the potential to revolutionize solar observing in much the
way Meade's ETX-90EC revolutionized celestial astronomy several
years ago. Coronado does not have its own dedicated sales force, and
we anticipate the PST(TM) in particular will be an early beneficiary
of Meade's marketing efforts. Moreover, we expect Coronado will
realize cost savings by utilizing Meade's suppliers to source
materials, and also benefit from more timely and efficient
production runs via access, as needed, to Meade's manufacturing
facilities."
According to Murdock, demand for Coronado's products is strong, with
a significant backlog. In the twelve months ended Sept. 30, 2004,
Coronado, with roughly two dozen employees, had sales of
approximately $3 million. Additional information on Coronado's
products, which are sold through dealers in North America, Europe,
and Asia, is available at
www.coronadofilters.com
.
Coronado's business dates from 1965, when David Lunt began
developing ultra-narrowband filters and high-end optical instruments
for NASA and the professional market. In 1997 Lunt founded Coronado
Instrument Group, where he was joined in 2001 by Geraldine Hogan
when the two formed Coronado Technology Group, LLC for the purpose
of acquiring the assets of Coronado Instrument Group. During the
twelve-month earnout period, expected to commence Jan. 1, 2005, Lunt
and Hogan will serve as paid consultants to Meade Instruments; a
third owner, Jordan Frazier, will continue as Coronado's general
manager.
Meade Instruments is a leading designer and manufacturer of optical
products including telescopes and accessories for the beginning to
serious amateur astronomer. Meade offers a complete line of
binoculars that address the needs of everyone from the casual
observer to the serious sporting or birding observer. Meade also
offers a complete line of riflescopes under the Simmons(R), Weaver
(R) and Redfield(R) brand names. The Company distributes its
products worldwide through a network of specialty retailers, mass
merchandisers and domestic and foreign distributors. Additional
information on Meade is available at
www.meade.com
"Safe-Harbor" Statement under the Private Securities Litigation
Reform Act of 1995: This news release contains comments and forward-
looking statements based on current plans, expectations, events, and
financial and industry trends that may affect the Company's future
operating results and financial expectations, including the
successful integration of Coronado's business into Meade's business
and markets. Such statements involve risks and uncertainties which
cannot be predicted or quantified and which may cause future
activities and results of operations to differ materially from those
discussed above. Such risks and uncertainties include, without
limitation: any significant decline in general economic conditions
or uncertainties affecting consumer spending; any general decline in
demand for the Company's products; the Company's inability to
develop and bring to market new and innovative products; any loss
of, or failure to replace, any significant portion of the sales made
to any significant customer of the Company; the inherent risks and
liabilities related to the introduction of new products or product
lines associated with an acquisition, including lack of customer
acceptance, production and development delays, lower than
anticipated margins; the risks and uncertainties associated with
intellectual property litigation; the inherent risks associated with
international sales, as well as the other risks and uncertainties
previously set forth in the Company's filings with the Securities
and Exchange Commission. The historical results achieved are not
necessarily indicative of future prospects of the Company. For
additional information, refer to the Company's filings with the
Securities and Exchange Commission.
CONTACT: Meade Instruments Corp.
Brent W. Christensen, CFO, 949-451-1450
www.meade.com
or
Silverman Heller Associates
Philip Bourdillon/Gene Heller, 310-208-2550
SOURCE: Meade Instruments Corp.
  