BUSINESSWEEK ONLINE : MAY 29, 2000 ISSUE
COVER STORY Meade Instruments: Back from a Black Hole Meade Instruments Inc., Irvine, Calif. PRODUCT Telescopes for amateur astronomers SALES $126.8 million WHAT'S HOT A new telescope with a computerized attachment automatically points at any of 14,000 celestial bodies It's not often an entrepreneur can create the same company twice. But that's what John C. Diebel has done with Meade Instruments Corp. (MEAD), the Irvine (Calif.) telescope maker whose stock has grown as bright as a nova. The 57-year-old Diebel, who was trained as an electrical engineer, launched Meade in 1972 after suffering the bureaucracy of the radar departments at electronics giants TRW Inc. and Hughes Aircraft Co. And after selling Meade in 1986 to a leveraged-buyout company that ran it into the ground, Diebel bought it back in 1991. ''I'm just not very good at taking orders from someone else,'' admits Diebel today. ''This is an entrepreneurial company, and I'm an entrepreneur.'' Today, Diebel, an amateur astronomer who built his own telescopes while growing up in Pasadena, Calif., runs a $127 million company that dominates in sales to amateur stargazers. Last year revenue grew by 65%, powered mostly by a new $595 model that can be outfitted with a computerized attachment. Would-be Galileos plug in coordinates on a keypad, then watch the telescope whirl around to face Saturn, the moon, or any of 14,000 other objects. That helped profits climb an average annual 101% over the past three years. Diebel came up with the notion of putting the cheaper computerized attachment on his $595 telescope while watching a TV show on Bill Gates back in 1996. ''I thought to myself, why can't we do something really revolutionary in this industry the way he did in his,'' mused Diebel. That meant taking the computerized features of Meade's $15,000 telescopes and making them affordable for the masses. It took Meade engineers the next two years to figure out how to do it. Today, the company controls more than half the $230 million U.S. market for sales to amateur astronomers. Expanding the market means making yet cheaper telescopes. A new $299 model that comes with a slimmed-down computer component will be available in June through a Meade distribution network of more than 2,000 outlets, including J.C. Penney and Wal-Mart. WIDE RANGE. But Diebel almost lost the chance to see his company take off. After he sold Meade in 1986 for $6.5 million to St. Louis LBO firm Harbor Group, Meade was headed toward bankruptcy in 1991's recession. It had stopped coming out with new telescopes, and rivals were catching up. Diebel stuck around for two years as president, then quit to sharpen his golf game and spend time in Hawaii. In 1991, he bought his company back for $1,000 and the assumption of Meade's $2 million debt load. Today, Diebel controls 16% of the company, which now makes more than 40 different models--from the $15,000 telescope to smaller telescopes for kids that go for less than $200. The company also markets binoculars and microscopes, although both lines are fairly small. What's getting Meade serious buzz on Wall Street is a deal to provide optical equipment to Seattle wireless company TeraBeam Corp. TeraBeam has been closely watched by the Street since announcing in April that it had secured $105 million to build, with Lucent Technologies Inc., high-speed data lines to travel the ''last mile'' to homes and businesses. Diebel is tight-lipped about the deal, other than to say it's a long-term agreement and could be significant for Meade. The mere mention of the deal back in March sent Meade's stock soaring by 77%, and it hasn't lost much altitude since. For a company that lets folks scan the skies, that's some pretty fair stargazing on its own. By RONALD GROVER _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ BACK TO TOP					RELATED ITEMS Hot Growth Companies TABLE: The Revenge of Brick and Mortar WWF: One Rock-'Em, Sock-'Em Company Direct Focus: Flexing Its Marketing Muscle Meade Instruments: Back from a Black Hole Diamond Technology: Attack of the Killer Apps Children's Place: Hey, Good-Looking Albany Molecular Research: All R&D, All the Time SERENA Software: Keeping All Systems Go U.S. Concrete: Breaking the Cement Mold What Happened to the Class of '98? TABLE: The 1998 Winners...and the Losers TABLE: Hot Growth Companies, 2000 (.pdf) ONLINE ORIGINAL: Somera: Top-Notch Profits from Old Tech Gear INTERACT E-Mail to Business Week Online

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