Reflecting rising profits and an apparent desire to maintain and build investment interest, Fairchild Industries Inc. announced a two-for-one stock split today during its annual stockholders meeting here.
The stock split announcement came as the company announced a 27 percent profits increase for the first quarter and one day after Fairchild's chairman and another board member successfully landed two seats on the board of Bunker Ramo Corp., which Fairchild hopes to acquire.
At the same time, however, Fairchild officials said that a federal grand jury in Baltimore is continuing as investigation of the company's tax practices.
Nearly 15 months ago, a federal judge acquitted Fairchild officials said that a federal grand jury in Baltimore is continuing an investigation of the company's tax practices.
Nearly 15 months ago, a federal judge acquitted Fairchild and its current chairman, Edward G. Uhl on charges of filing false tax returns in connection with federal campaign contributions and other company funds.
One high-ranking company official today said he "does not call this a prosecution, I call this a persecution." The grand jury has jurisdiction in the case until the end of the year, Fairchild officials said. A spokesman for the U.S. Attorney's Office in Baltimore refused to comment.
Nevertheless, Uhl and President John Dealy told stockholders Fairchild is a booming company, now in the midst of broadening its position as a major defense contactor to include major communications and commercial aircraft subsidiaries.
The company announced that profits had risen to $10.3 million ($1.65 a share) for the first quarter from $7.6 million ($1.25) a year earlier.
In addition, the company stressed that it building its cash reserves. During the 1979 first quarter, Fairchild reported cash and short-term investments of $1.7 million. That figure has ballooned to $49 million one year later.
Those funds presumably are being accumulated in case the company is in a position to make a third effort to increase its interest in Bunker Ramo, which now is about 21 percent. Acquisition of Bunker Ramo, an electronics firm based in Oak Brook, Ill., is considered vital to Fairchild's diversification program, Uhl and others say.
But after the initial stock purchase last year, Bunker Ramo officials turned down the two Fairchild offers and went as far as to recommend that Uhl, a Bunker Ramo board member since 1973, not be reelected to their board. u
Nevertheless, Uhl and another Fairchild board member, Thomas Moorer, were re-elected as a result of Fairchild's control of the stock and its ability to vote all of it cumulatively for the two officials.
Fresh from that success, Dealy stressed the company's diversification and its new slogan, "Fairchild -- Where the Sky is not the Limit," in a lengthy presentation to a handful of stockholders, company executives and a lone Bunker Ramo official.