Richard E. Thomas, the boss at Radiation Systems Inc., is a man with a plan. In fact, he has two plans -- the usual five-year business plan and an unusual five-year plan to phase out his own job at the antenna manufacturing company.
Thomas is 64. He has spent 25 years with Radiation Systems and serves as chairman, president and chief executive of the Sterling, Va., company, which has grown into an operation with annual sales of $85 million.
As Thomas explains it, his plan to lighten his duties will begin with the naming of two group heads, one to run the military-related business, one to run the commercial business. After a year on the job, the two executives will switch positions.
Then, after another year or so, one of the two executives will be named president and chief operating officer. If things go well for the following two years, Thomas said, the president will be named chief executive and will begin running the company.
Following this four- to five-year transition, Thomas said, he will stay on as chairman and as a board member but it will be on a part-time basis. By then, he will be almost 70.
Letting go, Thomas knows, "won't be an easy thing to do." His main concern, he said, is leave the company in capable hands.
Thomas recalled the response he got from a business acquaintance who was asked why didn't slow down and take time to travel. The friend replied, "I have more fun making money than spending it." Thomas, too, says he would rather spend his time making money for his company.
A likely choice to manage the commercial side of the Radiation Systems business is Robert M. Thomas, 56, a vice president, who has been at the company for about five years. Robert Thomas is Richard Thomas's cousin, but a cousin who the chairman said he did not get to know until recent years. Robert Thomas was an executive at the Westinghouse Corp. in Pittsburgh before he came to Radiation Systems.
For the military side of the business, Richard Thomas said he has several candidates but he has yet to make a choice.
Clearly, Thomas is not about to let go of his company, his pride and joy, to just anyone. Not after 25 years of building it up, widening its horizons, and defending it against competitors, corporate raiders and even Pentagon officers who wanted to take over some of the technology that Radiation Systems had developed.
Thomas is tough and he can be impatient with poor performance. In one breath, he says he doesn't want to be thought of as a boss who kicks and screams a lot, but he acknowledges in the next breadth that he occasionally raises a fuss -- as he did recently when he told his staff the way they should treat customers.
Two signs posted over Dick Thomas's desk may reveal some of his feelings about corporate leadership. One says, "Example is not the main thing in influencing others. It is the only thing." The other says, "He who overlooks one fault invites another."
Board member John D. Sanders, who has known Thomas for years, agrees that Thomas is tough.
"People don't get that successful in that kind of job without having a strong personality," Sanders. But part of Thomas's personality, Sanders says, is a sincere concern for the welfare of his employees and a respect for their abilities.
Among Thomas's employees are three sons: Lawrence J. Thomas, 36, a marketing vice president; William A. Thomas, 34, a vice president in the technical products division; and Kevin J. Thomas, 32, a manufacturing manager in technical products.
Thomas's five-year plan for expanding the business of Radiation Systems will be even more challenging than installing new leadership at the 30-year-old company.
By 1995, Thomas wants to do the following:
Boost sales from the $85 million reported for fiscal 1990 to $211 million, up 148 percent; raise profits from $5.6 million to $18.9 million, up 237 percent; and increase earnings per share from $1.04 to $3.45, up 232 percent.
It's an ambitious plan for a company that was once the sweetheart of Wall Street in the early 1980s but lost its rapid-growth momentum. The federal government's movement away from sole-source contracts to competitive bidding and tight cost controls had a serious impact on Radiation Systems's profits.
After several years of zigzag performance, Radiation Systems finally is beginning to see a turnaround, with expanding sales and widening profits. The company seems once again to have the wind at its back.
For one thing, Radiation Systems has broadened its product line and makes more than 50 types of antennas and allied products. Secondly, as satellites proliferate, the need for antennas to communicate with those birds is increasing rapidly.
Third, Radiation Systems got a big boost when it captured a $43 million contract to install antenna systems in 5,800 schools throughout the country.
These are the schools that will receive the Whittle Communications's Channel One TV programs. Whittle provides news programs for the students along commercials -- an idea that has drawn protests from some educational groups.
Instead of just supplying the antennas, which cost $250 each, Radiation Systems is also installing the antennas, wiring the classrooms and doing the entire job at an average price of $7,200 a school. The contract could extend to 8,000 schools.
As a result of the Whittle endeavor, Thomas said, he foresees the development of a whole new line of business. If Whittle can make money by selling commercials on school TVs, why can't fast-food establishments, which also have captive audiences, install TVs to provide programs and commercials that will catch patrons' attention.
As Radiation Systems gets larger, the firm also is being considered for larger contracts, such as the $50 million radio telescope that will be built at the National Radio Astronomy Observatory at Green Bank, West Virginia. Radiation Systems is teaming up with Ford Aerospace to prepare a bid to build the 40-story-high outer space listening post. At least two other bidders are expected.
Along with many other U.S. companies, Radiation Systems also is actively pursuing business in Eastern Europe, where technology has a lot of catching up to do.
In the shorter range, if tensions in the Persian Guld erupt into a shooting war, Thomas can expect the Pentagon to start asking for more of the antennas and communications systems that the military uses in the field.
Even with all of these opportunities, Thomas acknowledges that achieving his five-year business goals will not be easy. Within a few years, he said, he expects to see his competition get into what he calls "bargain basement" pricing in an effort to gain market share.
"I look for the communications business to become extremely tight," he said.
While all of this is going on, Thomas is suffering from the usual frustration of seeing his profits growing but his stock standing still. Thomas, himself, owns a 2.9 percent of the stock, about 156,000 shares.
During the last year and a half, RADS has traded in Nasdaq over-the-counter market at between $8.50 and $13.75. With the markets currently in a tailspin, the stock is down to $10.375.
The stock is selling at book value, which is about $10 a share, and at about 10 times earnings.
Interestingly, Radiation Systems is an institutional favorite and 38 mutual funds, banks and investment houses own about half of the company's 5.4 million shares.
Among the bigger investors are Wellington Management Co., of Boston, which owns 11.9 percent of the stock, and Dimensional Fund Advisors of Santa Monica, Calif., which has a 5 percent position. First Chicago Corp. has a 6.9 percent position.
But Thomas is not satisfied and he plans to do more dog-and-pony shows for investment analysts in the future. He believes Radiation Systems has a good story to tell and he is determined to get out and tell it.