During the high-flying days of the scientific glamour stocks, few soared farther or faster than Itek Corp., a secretive Massachusetts maker of aerial photo gear. Its shares came out at $2 in 1957, shot up to $255 in 15 months, then split 5 for 1. The company attempted to pyramid itself with acquisitions, as Litton Industries has successfully done (TIME cover, Oct. 4). But it turned into what General Dynamics once was—a gangling collection of independent divisions sadly lacking central control. Itek lost $2,500,000 in 1961, and its stock began to drop, scraped a low of 9½ after Blue Monday.
This week a much-subdued Itek under New President Franklin A. Lindsay, 47, served notice that it is climbing back. Despite a 7% sales decline, to $38 million, Itek's earnings tripled to $904,000 in fiscal 1963.
Power Struggle. Though primarily a defense contractor, Itek is not bothered by talk of disarmament. Two-thirds of its sales come from aerial reconnaissance cameras and systems that are useful in gathering military intelligence and would be valuable for policing disarmament. A fortnight ago, during the Operation Shoal underground nuclear blast in Nevada, an Itek nine-lens aerial camera went through its first test to see if it could detect the explosion by noting distortions on the ground below. Early results of the test, says Lindsay, are promising.
Itek's civilian sales are also looking up. Recently it introduced an office copying machine that, using Eastman Kodak patents, can make four offset printing plates a minute from almost any kind of original copy. Some 500 of the machines have been sold at prices up to $5,000.
The idea to found Itek—short for "information technology"—came in 1957 from two longtime friends who saw a future in air reconnaissance for arms control. The two: Richard Leghorn, then head of Kodak's European division; and Theodore Walkowicz, then and now an associate of Venture Capitalist Laurance Rockefeller. Walkowicz got the Rockefeller interests to put up $600,000 and became a director. Leghorn was chosen president.
Itek prospered, so long as it held to its original purpose. But when it expansively acquired Hermes Electronics Co. and Photostat Corp., it suffered a bad case of technological indigestion. Concerned by the loose management and by the 1961 loss, Walkowicz, with the 20% Rockefeller interest to protect, called for reinforcements. He prevailed on Frank Lindsay, a member of the management consultant firm of McKinsey & Co., to become executive vice president and help Leghorn revamp the company. Lindsay was a longtime friend of both Walkowicz and Leghorn, and as a former member of the Central Intelligence Agency was closely familiar with aerial reconnaissance and the idea behind Itek. A bitter power struggle broke out; Leghorn lost, quit the company, and Lindsay took charge.