Orbital Sciences Corporation History
Dulles, Virginia 20166
Telephone: (703) 406-5000
Fax: (703) 406-3502
Sales: $461 million (1996)
Stock Exchanges: NASDAQ
SICs: 3761 Guided Missiles & Space Vehicles; 3829 Measuring & Controlling Devices, Not Elsewhere Classified; 4899 Communications Services, Not Elsewhere Classified; 3812 Search, Detection, Navigation, Guidance, Aeronautical & Nautical Systems & Instruments; 3663 Radio & Television Broadcasting & Communications Equipment; 3764 Guided Missile & Space Vehicle Propulsion Units & Propulsion Unit Parts
Orbital Sciences Corporation's fundamental goal is to make space more accessible and useful through highly affordable small space systems that incorporate innovative designs and advanced technologies to reduce the cost of using space.
Orbital Sciences Corporation, together with its subsidiaries, is an unrivaled, leading-edge space technology company that designs, manufactures, operates, and markets a broad range of space products and develops and provides services grouped into three categories: Launch Systems, Space Systems, and Communications and Information Systems. Launch Systems develops and markets space transportation systems, which include space and suborbital launch vehicles and orbit transfer vehicles. Space Systems includes spacecraft systems and payloads, which include satellites, spacecraft platforms, and space payloads and experiments. Communications and Information Systems are space support products, which include satellite tracking systems and atmospheric environmental monitoring products; and satellite services, which include satellite-based data communications services and remote sensing services for monitoring the Earth. The company's primary customers are the U.S. Government and other commercial, educational, and international markets.
The Early Years, 1980--89
The foundation for Orbital Sciences Corporation was laid in 1980, when David Thompson, Bruce Ferguson, and Scott Webster met at Harvard Business School and worked together on a NASA-sponsored study of commercial space applications. They submitted their study to NASA in 1981 and subsequently won the Space Foundation Prize for Space Business Research.
On April 2, 1982, Space Systems Corporation (SSC) was incorporated in Delaware to develop, manufacture, test, and market commercial space transportation systems. On September 30, 1983, a year after the initial start-up, Orbital Research Corporation (ORC) was incorporated as a wholly owned subsidiary of SSC to be the Managing General Partner of Orbital Research Partners L.P., which was formed on October 20, 1983 for the purpose of designing, developing and commercially marketing an orbit transfer vehicle, to become known as the Transfer Orbit Stage (TOS) Vehicle. The company signed an agreement with NASA for the company's first space product, the TOS Vehicle, and reached a production agreement with Martin Marietta Corporation. That same year, the company secured $2 million in venture capital and opened its first office in Vienna, Virginia, near Washington, D.C., with 12 employees and had opening year revenues of $100,000.
The next year the company's board of directors grew to include prominent figures in the space industry, academia, and finance. The company also raised $50 million from outside investors to finance development of the TOS Vehicle. The number of employees rose to 20 and revenues hit $2 million.
The year 1985 saw the company's design, development, and marketing efforts for the TOS Vehicle move into high gear, with 25 employees and $3 million in revenues. January saw the company entering into the Minuteman CFE Contract with the U.S. Air Force for the production of 20 Minuteman Rocket Consolidated Front End (or attitude control, telemetry, and flight termination) modules, for approximately $33.2 million. In June, the company's Space Data Division entered into the Phase I Starbird Contract with the U.S. Air Force to develop and launch the Starbird launch vehicle and related products and services for approximately $17.8 million.
In 1986, the company moved to a new headquarters in Fairfax, Virginia, and NASA signed a $35 million contract for the first TOS Vehicle and an option for a second. The company had 40 employees and $6 million in revenues.
In 1987, Antonio Elias conceived of a revolutionary, air-launched rocket, later named Pegasus in an employee contest, designed to place small satellites into low-Earth orbit. The company also began investigating a system for collecting data from remote locations using satellites in low-Earth orbit, which evolved into the company's Orbital Communications Corporation (ORBCOMM) commercial communications subsidiary. Additionally, in March, the company signed the NASA TOS Vehicle Contract for the Mars Observer and the Advanced Communications Technology Satellite (ACTS) mission for approximately $78.6 million and signed a Mars Observer and ACTS production subcontract with Martin Marietta. A TOS Vehicle flight activation contract was also signed with Martin Marietta for approximately $6.3 million. Continuing to grow, the company had 50 employees and revenues jumped to $25 million.
In 1988, the Defense Advanced Research Project Agency (DARPA) signed the DARPA Pegasus Contract, the first Pegasus contract for the purchase of one Pegasus launch vehicle with an option for an additional five launches for approximately $36.3 million. The company and Hercules Inc. agreed to jointly develop and produce Pegasus, with Hercules, the subcontractor, investing $32 million in Orbital Sciences. The company also broadened its rocket business and manufacturing capabilities in November by acquiring the stock of Arizona-based Space Data Corporation, one of the world's leading suppliers of suborbital rockets. The $17.5 million deal was achieved through a merger of Space Data into a wholly owned subsidiary of Orbital organized for that purpose. The company's revenues grew to $35 million as 300 new employees were added to the company with the acquisition, jumping the number up to 400 employees total.
The company began construction of a new facility in Chandler, Arizona, in 1989 in order to house the company's expanding rocket production line and support staff. In July, the company entered into a contract with DARPA to supply a ground-launched Taurus rocket and launch services for approximately $10 million, with an option for an additional four launches for another $58.4 million. That same month, the ERINT Contract was signed with the U.S. Army Strategic Defense Command, which provided for the design, development, fabrication, analysis, testing, and delivery of launch systems and services required for five launches of the ERINT target system for approximately $15.6 million, with an option for three additional launches for a total of approximately $5.4 million. In July, the company's Space Data Division entered into the Phase II Starbird Contract with the U.S. Air Force to develop and launch the Starbird launch vehicle and related products and services for approximately $12.6 million. The employee count that year was up to 475 and revenues reached $80 million. In addition, the company won numerous awards in 1989, including the DARPA Outstanding Technical Performance Award, the American Astronautical Society Space Commerce Award, and the Space Foundation Commercial Space Award.
Going Public, 1990--Date
In 1990, Orbital Sciences Corporation faced some of its largest and most significant challenges since the company was founded. That year, the company had a number of impressive space "firsts." In April, the company became the first commercial space company to open its financial future to public participation through the successful completion of an initial public offering of $32.5 million of its common stock, becoming a publicly traded company on the NASDAQ exchange.
Also in April, the company celebrated the initial launch of its Pegasus rocket. The highly successful maiden flight made the air-launched space booster the world's first privately developed Earth-to-space vehicle. Initial launches were conducted of several other of the company's major suborbital rocket systems, including the Minuteman Missile Consolidated Front End, Starbird suborbital vehicle, and High Performance Booster. In addition, three important space experiments were conducted by the company, including the Ultra-Violet Bow Shock flight, the Excede III scientific probe, and the Two-Axis Pointing System mission, the first two on suborbital vehicles and the latter on the Space Shuttle, for a total of eight successfully completed space missions for the year.
Also in 1990, the company filed the world's first license application with the Federal Communications Commission (FCC) for the operation of a network of small low-Earth orbit spacecraft to provide global satellite services of commercial messaging and data communications services via the company's ORBCOMM subsidiary.
The company also signed a contract with the Strategic Defense Initiative Organization (SDIO) in January to provide suborbital launch vehicles and related services in connection with the SDIO Flight Test Services Program (the FTSP Contract) for approximately $34.8 million, with options totaling another $14.9 million.
The Chandler, Arizona facility opened and the number of employees jumped to 725; Orbital achieved significant improvements in its financial position, with recorded revenues of $100 million, a 25 percent increase over 1989 sales; and awards received in 1990 included the National Air and Space Museum Trophy, the National Space Society Space Pioneer Award, the Space Business Roundtable Commercial Space Industry Award, and the Washington Technology and Popular Science New Product of the Year Awards.
In 1991, the company was established as the preeminent supplier of small launch vehicles by winning an $80 million NASA contract for Pegasus launches and another launch contract from the U.S. Air Force that included up to 40 Pegasus launches. The company was also selected by NASA to build SeaStar, the world's first privately owned environmental monitoring satellite with a commitment for $44 million in image purchases over five years.
The company's ORBCOMM mobile data communications network proposal achieved critical technical and regulatory progress with the FCC and the World Administrative Radio Conference's agreement to allocate the global radio spectrum necessary. ORBCOMM signed agreements with 12 potential user equipment suppliers and international service licensees.
Top management was strengthened with the addition of former NASA Deputy Administrator James R. Thompson and former McDonnell Douglas executive Donald W. Tutwiler. Orbital turned in its best-ever financial performance in 1991, with revenues of $135 million, exceeding by five percent the company's 30 percent target of increase over 1990 revenues. The company raised $65 million in a secondary public offering of stock. In addition, awards received in 1991 included the Virginia Outstanding Industrialist of the Year Award, the Via Satellite Executive of the Year Award, and the National Medal of Technology Citation, the last presented by President George Bush and U.S. Commerce Secretary Robert Mosbacher.
Orbital continued its rapid growth in 1992, with revenues of $175 million, representing a 29 percent increase over 1991 revenues. In September, the company's first TOS Vehicle successfully completed its first launch, boosting NASA's Mars Observer spacecraft into Mars intercept trajectory. The Observer would reach Mars in August 1993 and begin providing a wealth of scientific information on Earth's nearest planetary neighbor in order to assist the 1997 launches of several more Mars missions.
Of the company's ten space missions in 1992 (bringing the number of successfully completed missions to 27 in three years of launch operations), five involved new vehicles, a very high proportion for the industry.
Progress continued on the company's ORBCOMM low-Earth orbit mobile satellite communications project, with the signing of 17 companies in 19 countries prepared to offer ORBCOMM services upon receipt of regulatory approvals and deployment of the satellites in 1993 and 1994. The Capabilities Demonstration Satellite was successfully launched in February and began providing valuable information on the planned design and operation of ORBCOMM satellites.
The company also created two new subsidiaries in 1992. The first was Orbital Imaging Corporation (ORBIMAGE), to consolidate the company's Earth-viewing satellite remote sensing initiatives, including the SeaStar ocean color monitoring service, which began service in 1993. The second was Orbital Environmental Systems Group, to focus on meteorological products and satellite tracking systems.
An L-1011 carrier aircraft was purchased by the company to be used with its Pegasus launch vehicle program, the total contract for backlog exceeded $1 billion for the first time in the company's history and the number of employees climbed to 1,150.
In 1993, Orbital carried out 16 space missions, all successfully, including two flights of the Pegasus space vehicle, 11 flights of suborbital rockets, one mission of the TOS orbit transfer vehicle, and two missions of communications satellites and research payloads.
February saw the launch of the first prototype satellite in the ORBCOMM two-way messaging and mobile data communications system, beginning the final phase of space and ground technology development for the revolutionary global PCS network. The network operations simulation was run through end-to-end successfully. In June, Orbital created an equal partnership called ORBCOMM Development Partners L.P. with Teleglobe Mobile Partners, an affiliate of Teleglobe Inc., one of the world's largest intercontinental telecommunications carriers, for the design and development of the low-Earth orbit satellite system. Teleglobe Mobile invested $85 million in the project and provided not only financing, but international service distribution. Orbital agreed to construct and launch satellites for the ORBCOMM System and to construct the satellite control center, the network control center and four U.S. gateway Earth stations.
The ORBIMAGE subsidiary made more progress on the SeaStar project, as well as beginning new projects ranging from satellite-based atmospheric lightning detection to high-resolution imaging for mapping the land surfaces of the Earth.
In September, the company acquired the Pomona, California-based Applied Science Operation (ASO) business unit of The Perkin-Elmer Corporation for approximately $5.8 million in order to produce and market sophisticated space sensors and ground-based analytical instruments primarily for agencies of the U.S. Government and commercial aerospace companies. The 200 new employees based in Pomona brought the number of employees to 1,350.
The company achieved substantial financial improvements in 1993 as revenues climbed to $195 million, a nine percent increase over 1992. The company also moved its corporate headquarters to Dulles, Virginia.
Of the nine successful space missions conducted in 1994, one was the inaugural launch of the company's Taurus space launch vehicle, which took place from Vandenburg Air Force Base in California and another was the maiden voyage of the PegaStar small satellite platform. The APEX satellite, built for the U.S. Air Force by the company's satellite group, was successfully launched aboard a Pegasus rocket and operated flawlessly while in orbit. The only failure for the year was the first use of the new Pegasus XL enhanced-performance rocket, but the total number of successful missions jumped to 40 in 1994.
The ORBCOMM system also made progress that year, receiving a full construction and operating license from the FCC, the first ever granted to a commercial low-orbit satellite network, in October, culminating a four-year crusade the company led to "rezone" the desired radio frequencies needed, both in the United States and around the world. ORBCOMM received the only VHF/UHF license for a global satellite network, providing over 600 KHz of primary spectrum in the United States and extended its network of domestic resellers of ORBCOMM services for markets such as trucking, marine and energy facilities, and expanded its international distribution of services to nearly seventy countries.
In August, the company acquired Fairchild Space and Defense Corporation from Matra Aerospace Inc., part of the Matra Hachette Group for approximately $71 million. As a result, Orbital substantially expanded its spacecraft design and production capability and added advanced electronics and satellite-aided vehicle management networks to the product lines. The acquisition also brought 800 new employees to the company.
December saw the acquisition of Magellan Corporation in a merger, bringing personal satellite navigation and communications technologies to the company. The world's leader in the manufacture of consumer-level Global Positioning System (GPS) products, Magellan also produced $40 million per year of inexpensive, hand-held satellite navigators, with the potential to expand into ORBCOMM messaging devices and automotive positioning equipment. Orbital also gained over 150 employees with the acquisition, boosting the number to 2,100. Revenues climbed to $225 million, a 17 percent increase over 1993.
Major Goal Achieved in 1995
For Orbital, 1995 was the year the company achieved its longstanding goal of developing or acquiring all the core technologies and product lines necessary to position the company as the industry's only complete provider of space systems infrastructure.
Orbital became an international company with the acquisition of Vancouver-based MacDonald, Dettwiler and Associates Ltd. (MDA), the world leader in the design and integration of ground stations for remote sensing satellites. The addition of MDA's products enabled the company to offer full end-to-end space mission capabilities. Nearly 800 additional employees were added to the company's ranks with the acquisition. Magellan introduced the world's first hand-held personal GPS navigator to retail for under $200.
Orbital successfully completed 11 major rocket launches, including a Pegasus launch carrying the first two ORBCOMM satellites, the first ORBIMAGE satellite, called MicroLab, and the first successful launch of the Pegasus XL in March. The entire ORBCOMM global mobile data communications network was tested and Teleglobe Mobile invested an additional $75 million in the project. The company employee base grew to 2,700 and revenues were at $364 million, a jump of 21 percent over 1994.
In 1996, following a 1995 failure, the Pegasus program returned to flight with four consecutive, near-perfect Pegasus XL launches, including NASA's Total Ozone Mapping Sensor (TOMS) mission, for which Orbital's Pomona facility supplied the space sensor payload.
Orbital was selected by NASA for a $60 million contract to build the X-34 hypersonic vehicle. The project would test key technologies leading to reusable launch vehicles, the industry's next step to making space less costly and more easily accessible. Magellan sold a record 300,000 GPS navigation units through over 10,000 U.S. retail outlets and in 80 countries worldwide.
In February, ORBCOMM initiated the world's first commercial service for global mobile data communications provided by low-Earth orbit satellites. ORBCOMM also raised an additional $170 million. The satellite mobile telephones the company marketed quickly became one of the top-selling products used with the existing INMARSAT geosynchronous satellite system.
In 1996, the company completed 82 space missions spanning some seven years of operations. The management was strengthened with the addition of former U.S. Air President and COO Frank Salizzoni and Janice Obuchowski, a former Administrator of the National Telecommunications and Information Agency. For the first time, Orbital's total backlog of contract orders and options exceeded $2 billion and overall revenue increased to $461 million, a 27 percent increase from 1995.
As the company looked to the future, it planned to continue to strive for a 100 percent launch success rate on its Pegasus and Taurus missions, stay on schedule for the planned deployment of more ORBCOMM satellites and future ORBIMAGE spacecraft, broaden Magellan's market presence with new products, and continue to grow at 20--25 percent in revenues per year. As the world's only start-to-finish commercial space mission company, Orbital remained securely positioned to continue to dominate the market and experience incredible growth.
Principal Subsidiaries: Orbital Communications Corporation; ORBCOMM Development Partners L.P. (50%); Orbital Imaging Corporation.
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