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Interview With The Chairman, President And CEO: Phazar Corp. (ANTP) - Garland Asher

May 16, 2011 - The Wall Street Transcript has just published Wireless Communications & Telecom Report offering a timely review of the Wireless sector. This Special Report contains expert industry commentary through in-depth interviews with public company CEOs, Equity Analysts and Money Managers. Please find an excerpt below.

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Garland Asher was appointed Chairman, President and CEO of Phazar Corp. on September 2008. Mr. Asher served as Director and Chairman of the audit committee of Universal Power Group, Inc., a power equipment and battery distributor, from December 2006 to August 2008. He has served as a Member of the City of Fort Worth Audit Committee from 2006 to 2008. Mr. Asher served as President and COO of Integration Concepts Inc., a health care software company, from September 1999 through June 2004.

TWST: Please give us an overview of Phazar.

Mr. Asher: Phazar (ANTP) is a company that's 60-plus years old. It has been public for 28 years. There's one principal operating subsidiary, and that's Antenna Products Corporation, which accounts for 99.9% of the business. Phazar is a Delaware holding company, but the actual business is under the auspices of Antenna Products Corporation. That's why we have the stock symbol ANTP on Nasdaq. If you can believe it, 60 years ago we started out manufacturing farm and ranch gates, but we've been building antennas for about 42 years. We have built everything from small whip antennas to the largest antenna in the world, which we built in 2005 in Alaska. It's called the HAARP project, and it is a single antenna that covers 31 acres.

It has 182 elements in it, it has 3.6 million watts of power going through it, and it was built for the Department of Defense. It's jointly run by the Navy and the Air Force.Traditionally, we have been predominantly a government supplier, but the commercial business has become a more important business for us, and it is the fastest-growing part of our business. Our commercial business has gone from less than 5% of our revenues four years ago to close to 25% of our revenues this year. Within the commercial markets, the fastest-growing areas are the cellular, the wireless market and the intelligent traffic market. That is the antennas that read your toll tag when you go through a toll gate. That's a good growing business for us as well.

TWST: Your primary product is antennas, and you mentioned you service both the commercial and government markets. Are the products the same for both end markets?

Mr. Asher: No, they're not. They are variations on a theme, of course, but they are different. Our biggest customer over the years has been the FAA. Over 90% of all the airports in America have some of our antennas on them, predominantly what is referred to as ILS systems, instrument landing systems. If you've ever noticed these orange-looking things that are at the end of an airport runway, those are localizer antennas. That's what a pilot uses to make an instrument landing, and that's a business that we're by far the largest factor in, and it's a business that we've been a supplier to for the FAA for more than 30 years.

TWST: How is each of the end markets doing now? How is the commercial versus the government market at this time?

Mr. Asher: There is a huge contrast between the two markets. We have certainly seen a softening in the government market because of what's going on with the budget issues in Congress. That problem has become exacerbated in the last several months, with Congress doing a series of continuing budget resolutions. While those resolutions may keep the doors open, the individual agencies don't have new approved budgets to procure items. Even if they have some type of a budget, they don't know what they can spend, what they can't spend, when they can spend, etc. So we've clearly seen the impact on the government side of our business.In the commercial business, there is tremendous demand there; however, even that business is subject to project approval delays.

They tend to be projects by local cities or even local neighborhoods, and you've got planning boards and zoning boards and all those kind of approval processes that you have to navigate through before you can finalize a project. So those get stretched out as well.Also, one of the factors in some of those projects has been weather. We certainly saw an impact this past winter, particularly on the East Coast in January and February, with the pace of some of the projects where we were supplying equipment were delayed. When they couldn't dig the trucks out of New York City streets, you better believe they were not mounting antennas on light poles either.

TWST: Do you operate domestically and abroad?

Mr. Asher: Yes, it's hard to give you an exact number, but on average 25% to 30% of our revenues is international every year. The reason I can't give you an exact number is that sometimes it is an international order, but it's coming through a U.S. company. For example, we shipped some antennas to a company in Utah last month, but I happened to know the ultimate destination is Malaysia. But yes, we have customers all over the world, particularly because of our dominating position in instrument landing systems. We are in airports around the world.Additionally, our defense-related business is also worldwide. So some of the equipment that we sell here actually ends up at a NATO customer, for example. I can't give you an exact number in terms of the amount of international business we conduct, but somewhere between a quarter and a third of our revenues come from international, and we're starting to get some direct orders from some countries for DAS antennas. Right now, there is DAS in Uganda, believe it or not.

The remainder of this 42 page Wireless Communications & Telecom Report can be immediately viewed by purchasing online.


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