SLI, Inc. History
Canton, Massachusetts 02021-2040
Telephone: (781) 828-2948
Fax: (781) 828-2012
Sales: $874 million (2002)
Stock Exchanges: New York
Ticker Symbol: SLI
NAIC: 335110 Electric Lamp Bulb and Part Manufacturing; 442299 Other Home Furnishings Stores; 541690 All Other Scientific and Technical Consulting Services; 334515 Instrument Manufacturing for Measuring and Testing Electricity and Electrical Signals; 335931 Current-Carrying Wiring Device Manufacturing; 421610 Electrical Apparatus and Equipment, Wiring Supplies, and Construction Material Wholesalers; 335121 Residential Electric Lighting Fixture Manufacturing; 336321 Vehicular Lighting Equipment Manufacturing
SLI, Inc. has an established, strong tradition of leadership in the art of making light, and we continue to build on this reputation. Our business is solely focused in lighting applications, so we can dedicate all of our resources to that mission. At SLI, innovation means achieving worthwhile results through the development of practical solutions that deliver increasing customer value. Whether the need is for functional lighting systems for commercial and industrial applications, or decorative and architectural systems for domestic and interior design lighting, customers throughout the world know that SLI has the capabilities, competencies, and solutions to deliver precisely the lighting results required.
- Xenell Corporation is formed.
- Frank Ward buys Xenell Corporation
- Chicago Miniature Lamp is purchased; Xenell becomes Chicago Miniature Lamp, Inc. (CML).
- Strategic acquisitions begin; Glolite is purchased.
- CML acquires Industrial Devices Inc.
- Initial public offering is successfully completed; the company acquires Plastomer Inc.
- CML adopts the name SLI, Inc. after acquiring Sylvania Lighting International B.V. (SLI B.V.).
- SLI opens North America's first LED manufacturing plant.
For the past 29 years, SLI, Inc. has expanded through a series of acquisitions, changing from a small, specialized manufacturer and distributor of neon light bulbs to one of the six largest vertically integrated manufacturers, suppliers, and designers of lighting systems worldwide. Its products include incandescent, fluorescent, compact fluorescent, high intensity discharge, halogen, miniature incandescent, neon, light-emitting diodes (LED), and special lamp lighting systems. The company also sells a full line of lamps for decorative and residential usage, as well as industrial and commercial fixtures, advanced fiber optic lighting systems, and specialty products, which are sold under a variety of brand names. Its flagship brand is Sylvania. Others brand names include Concord, Lumiance, Linolite, and Le Dauphin. Miniature lighting assemblies are sold under the Chicago Miniature Lamp and SLI Miniature Lighting brand. With a wide variety of markets, SLI serves a diverse international customer base. As a result, about 70 percent of the company's sales come from outside the United States. SLI has major plants in 15 countries and operates worldwide.
1980s: From Specialized Firm to Industry Leader
The founder and CEO of SLI, Inc., Frank Ward, grew up in a poor Boston neighborhood and graduated with an electrical engineering degree from Northeastern University. After graduation, he began working as a field engineer. Arriving in Canton, Massachusetts, several years later, he got a job at Instron Corporation, where he was laid off after three years. At this point, he decided he wanted to control his own destiny, so he started his own manufacturer's representative agency in Canton, specializing in selling products for lighting companies. During this time, Ward became involved with a small firm, Xenell Marketing Corporation, which focused on distributing neon light bulbs manufactured by Xenell Corporation for use as "power on" indicators in the appliance industry. A few years later, Ward bought Xenell Marketing Corporation, and the company began to grow, hitting it big financially. However, Ward knew that only a manufacturer could control its own margins, so he bought Xenell Corporation in 1985. When he purchased Xenell, annual sales were $6 million dollars.
For seven years, Ward continued to develop the business, increasing his company's sales four-fold, with significant cash flows. Then, in 1992, he made a strategic decision to branch out into the highly fragmented miniature lighting industry through buyouts. He purchased Chicago Miniature Lamp from an investment firm based in Great Britain--VCH International Ltd. Established in 1910 and located in Buffalo Grove, Illinois, Chicago Miniature was another fast-growing maker of tiny light bulbs used in household appliances. The company also made fiber-optic products, lamp-making equipment, and miniature bulb sockets, and served the automotive, aviation, and marine markets. That year, Ward merged Xenell with Chicago Miniature Lamp, renaming the company Chicago Miniature Lamp, Inc (CML). The combined companies supplied a wide variety of miniature lighting products to diverse markets. Besides supplying appliance lights, CML also sold night-lights to Johnson & Johnson, warning beacon lights put out by the U.S. Coast Guard in coastal areas, lights for aircraft wingtips, and indicator lights in airplane cockpits. Sales increased significantly, and Ward formed his intention of becoming a big player in the lighting industry.
In 1993, CML continued to expand, acquiring its only major rival in the neon business, Glowlite Corporation, a manufacturer of neon lamps with approximately $3 million in sales. Then, continuing on an aggressive path, Ward purchased Industrial Devices Inc. in 1994. Based in Hackensack, New Jersey, Industrial Devices was a fabricator of plastic indicators and light-emitting diodes (LED) arrays with significant expertise in design, tooling, and molding. It specialized in encapsulating lighting components into assemblies used in automotive displays. With annual sales of roughly $23 million when acquired, Industrial Devices operated as a subsidiary and transformed CML into one of the nation's largest makers of miniature lighting components.
Mid-1990s: From Expansion to Vertical Integration
At this point, Ward continued to plan his company's expansion in the U.S. and European markets, eyeing further acquisitions that would emphasize CML's U.S. manufacturing thrust. To further this goal, in June 1995, CML made its initial public offering of 2.2 million shares at $12.50 each. With the additional capital, CML acquired Plastomer Inc., an Ontario, Canada-based company, for $3.56 million. Plastomer was a manufacturer of incandescent and LED socket assemblies and predominantly serviced the automotive industry. A fully automated company that used process efficiencies such as injection molding, with capacities ranging from 30 to 1,000 tons and extensive use of robotics, Plastomer was already vertically integrated and offered CML a great opportunity in the original equipment manufacturer (OEM) marketplace, allowing it to use other companies' product components to build its own branded products. CML's business began to accelerate at an incredible rate. Going public helped to propel the company's growth, while the acquisition of Plastomer's 70,000-square-foot facility gave CML an entry into the Canadian market. CML had now grown into a $60 million dollar company and had a customer list that included AT&T, General Motors, Ford, Chrysler, Honda, and Siemens.
The Plastomer acquisition proved a step toward CML's vision of complete self-sufficiency. In a June 1995 article in Electronic Buyers News, executive vice-president Paul Flynn said: "Plastomer gives an added dimension, which falls in line with CML's corporate strategy to be self-reliant and not depend on outside suppliers. We want to control it all." CML continued on its path towards this goal in September of that year when its subsidiary, Industrial Devices, acquired Fredon Development Industries Inc.--a tool and dye maker that designed, tested, and fabricated injection and plastic insert molds. Industrial Devices had been using these molds to produce sockets and could now manufacture these pieces on its own.
Then, in a strategic move to enable CML to expand beyond its core miniature lighting business, the company purchased STT Badalax, Ltd., designer of automatic bulb manufacturing machinery in 1995. This acquisition provided CML with the equipment to manufacture a range of bulbs. By December, CML had acquired a second European company, Phoenix Lighting (UK) Limited of Leicestershire, England. This acquisition, in conjunction with the Baladex purchase, accelerated another of CML's strategic plans: to expand its sales and manufacturing presence in the European market. Phoenix's assets and business were transferred and began to operate as Chicago Miniature Lamp, Europe, Ltd., a wholly-owned subsidiary of CML, Inc. Manufacturing high technology halogen, metal halide, and high-end specialty lamps in a wide variety of industrial, commercial, and retail applications, its most innovative product was the MR 16 lamp--a half-inch in diameter halogen bulb typically used in ceilings to emit bright light.
These buyouts enabled the company to develop its position as a global leader in the vertically integrated miniature lighting market and to improve its management and operational efficiencies. CML also acquired new and larger customers along the way, such as Cabletron, U.S. Robotics, Sunbeam, and Mr. Coffee.
Late 1990s: Diversification into New Markets
However, these new purchases were not the end of CML's acquisition spree. Before the Phoenix purchase was even complete, CML announced yet another acquisition in December 1995--Electro Fiberoptics Corporation in Marlborough, Massachusetts. Viewing the fiber-optic firm as its entry into the next generation of the lighting industry, CML renamed its new acquisition CML Fiberoptics. Manufacturing custom designing and marketing fiber-based products used to transmit light or images--products that are widely used in the medical, dental, science, industrial, military, and transportation fields--the company enabled CML to branch out into new, unexplored markets.
The aggressive diversification and acquisition strategy was paying off. More and more equipment manufacturers were relying on outside companies to make their customized miniature lighting assemblies, and CML was poised to become a prime beneficiary of this trend. In addition, CML had created for itself an unusually high level of vertical integration, producing quality products at a very low cost.
The following year, 1996, looking to help clinch its place as a key supplier to carmakers and consumer goods manufacturers, CML purchased an electronic and magnetic ballast manufacturing operation for $25 million--Valmont Industries of Valley, Nebraska. CML also acquired a firm that made machines for molding tiny lamps, Gustave Bruckner Gmbh, to secure additional equipment to expand its German capacity.
In 1997, CML bought Sylvania Lighting International B.V. (SLI, B.V.), the third largest lighting company in Europe, for about $165 million cash from Siemens A.G. of Germany. Specializing in a full line of lamps, industrial and commercial fixtures, and specialty products, and based in Geneva, Sylvania had generated revenue of about $600 million in 1996 in 30 countries outside of North America. With such a monumental acquisition and its own revenue reaching $94.2 million, CML became one of the world's top lighting companies. To signify its new status, in May 1998, CML changed its name to SLI, Inc.
To further enhance its position in the European market and increase its miniature lamp manufacturing capacity, that same month SLI acquired 71 percent of the outstanding shares of VCH International Ltd., which, over the years, had been both a supplier and one of its strongest miniature lamp competitors in Europe and the United States. By August 1998, SLI acquired SOCOP SA and its subsidiaries. Located in Besacon, France, SOCOP was both a customer and a competitor of SLI's miniature lighting division in Europe, and a highly regarded manufacturer and supplier of miniature lighting products and systems, with sales of approximately $40 million. The combination of SOCOP with the recently acquired VCH operation, along with other new acquisitions provided a strong vertically and horizontally integrated European miniature lighting presence with a broad product range that became known as SLI Miniature Lighting. With SOCOP, SLI also obtained quality customers, including Renault, VW, and Magneti Marelli. By the end of 1997, SLI was operating in 30 countries and had 13 manufacturing plants in nine.
In 1999, SLI further augmented its position in the European lighting fixture market and strengthened its European lighting presence with the purchase of Lighting Partner B.V. of the Netherlands, a rapidly growing presence in the European retail market. A year later, it purchased assets from a British light maker, Emess Plc, a deal that the company projected would put its revenue over the $1 billion dollar threshold.
2000 and Beyond: Continued Expansion, Consolidation, and Restructuring
In 1998, SLI was also gaining momentum at home with the purchase of IllumElex Corporation, enabling the company to branch out into the lightning maintenance, lighting retrofit, and installation services, as well as lamps, fixtures, ballasts, and lighting components. The following year, SLI made several additional domestic acquisitions that dramatically strengthened its general lighting presence at home, such as Supreme Lighting Corporation and Strategic Resource Solutions Corporation's Parke Industries. Supreme was the largest independent general lighting, bulb manufacturer in the United States with sales of approximately $60 million; Parke was one of the largest lighting-management companies in the nation. At this point, more than 80 percent of SLI's sales came from Latin America, Europe, and Australia, and SLI wanted this figure to change.
In addition to using acquisitions for this purpose, SLI reached an agreement in 1999 with Stanley Electric Co., Ltd., a major Japanese LED manufacturer, for a joint venture to establish the first-of-its-kind manufacturing plant for the production of LED's in North America.
By 1999, SLI's efforts toward innovations in lighting technology, along with programs to increase product offerings, helped the company earn 75 percent of its net sales from lamps and fixtures. It proceeded with a second public offering that has been on hold since 1998. Yet, with all its growth, the company had also acquired a large amount of debt; pricing issues in Europe and the decline of the Euro, along with an economic slow-down in the United States, began to take their toll. Fiscal year 2000 was challenging for SLI with sales only reaching $913.3 million, falling below earning expectations. By the end of 2000, with falling profits, the company decided to direct its focus on its core miniature lighting business, emphasizing the optoelectronics market, which represented the highest-margin side of its lighting business, and the fixture market, which was less price sensitive than other lighting segments. With this reorganization, SLI hoped to return the company to profitability. SLI began selling some assets and service contracts. In November, it cut 313 jobs in Europe and the United States and in February 2001, laid off two-thirds of the workers in its ballast plant in Juarez, Mexico.
However, 2001 was also a year of new beginnings for SLI when it opened North America's first, full-line surface mount LED manufacturing plant in Barrie, Ontario Canada. Fully automated with minimal labor costs, the plant allowed SLI to compete in a highly competitive marketplace. This plant had been only a dream for Ward in 1994, who had come a long way from his company's small beginnings.
Principal Subsidiaries: CML Air; Power Lighting Products; SLI Lighting Products; SLI Lighting Solutions; Concord Lighting; Lumiance B.V.; SLI Lighting Solutions; SLI Lichtsysteme; SLI France; SLI Sylvania S.A.; Sylvania D.O.; Iluminacao.
Principal Competitors: General Electric Company; Philips Electronics North America Corporation; Philips Electronics N.V.; Siemens AG.
- Chandler, Douglas, "SLI Lighting to Buy Parke Industries," Electrical Wholesaling, June 1999, p. 32.
- Gatlin, Greg, "Canton's SLI Buys British Light Firm," Boston Herald, May 31, 2000, p. 33.
- Gresock, Sam, "Canton-Mass.-Based Light Bulb Maker to Close Mullins, S.C. Factory," State, November 10, 2000, p. 45.
- Hara, Yoshiko, "SLI, Stanley Team Up for LED Venture," Electronic Engineering Times, July 3, 2000, p. 30.
- Lamb, Robin, "SLI to Open North America's First LED Plant," Electronic Buyers News, June 25, 2001, p. 24.
- Taylor, Robyn Parets, "Brightening," Investor's Business Daily, November 27, 1995, p. A4.
- ------, "Chicago Miniature Lamp's Ward," Investor's Daily, October 20, 1996, p. A1.
Source: International Directory of Company Histories, Vol. 48. St. James Press, 2003.comments powered by Disqus