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News Archive - Bowmar Instruments Corp. Files Bankruptcy

Bowmar Instruments Corp. Files for Bankruptcy
Radio Electronics, May, 1975

Bowmar Instruments Corp., formerly Bowmar/Ali, Inc., became famous for its blowing away the electronic calculator marketplace in the fall of 1971 by manufacturing and selling high-quality, efficiently mass-produced, and market-breaking priced rechargeable battery-powered handheld electronic calculators.

Initially, Bowmar/ALI, Inc. formed as a part of Bowmar Instruments when it acquired Acton Laboratories, Inc. in 1965. that manufactured LED display modules for calculators with the intention of selling them to Japanese calculator companies. As it turned out, that plan backfired when there were issues with Japanese government protectionist import policies that made selling the display in Japan impractical, and the company had to come up with another business plan.

In the fall of 1971, Bowmar introduced a nicely made hand-held, eight-digit LED display (using Bowmar's own "Optostic" LED display module), rechargeable battery-powered electronic calculator. The Bowmar 901B was a basic four-function calculator using a Texas Instruments(TI) TMS-0103 calculator-on-a-chip, as well as a high-quality TI-made Klixon™ keyboard. The 901B initially sold at a very attractive retail price of $239.99, making it the least-expensive hand-held eight-digit battery-powered electronic calculator on the market at the time by a fair margin. Along with selling the calculator through mail order and retail outlets under the Bowmar brand, the company also served as an OEM manufacturer for Radio Shack, Commodore, Craig, Sears, and many more retail outlets, branding the calculators with the retailers' trade-name, as well as providing customizations such as cabinet coloring, keyboard key colors and layout, and trim and keyboard bezel material and color. The 901B and its OEM customer calculators sold like hotcakes, arriving on the market just in time for the beginning of a new school year, with mostly college students buying them up in a near frenzy. In just under two years, Bowmar Instruments became the largest(volume) manufacturer of electronic calculators in the world, as well as becoming a rather cash-rich company on the profits.

As the mid-70's came about, the rest of the electronic calculator manufacturers began to catch up. The ubiquitous availability of Large-Scale Integration calculator chips, including the introduction of inexpensive chip sets manufactured by Hitachi and NEC in Japan, made it possible for just about anyone to start up an electronic calculator manufacturing business with a modest startup investment. These factors led to a slew of small US-based companies coming into the market making inexpensive (and sometimes very shoddily-built) calculators that undercut the price of Bowmar's calculators. These competitors would use inexpensive US-made calculator chip sets or single-chip devices, and later, Japanese-made calculator ICs, cheap circuit board material, crews of minimum-wage laborers placing parts on circuit boards and assembling the calculators, poorly-made clones (but of different enough design to avoid patent issues) of the Texas Instruments Klixon(™) keyboards, as well as low-quality thin-wall plastic cast cabinets for the calculators. These machines might have looked good enough in a small ad in the back of a magazine for mail-order, or perhaps even on the store shelf, but in practice, they certainly didn't hold up nearly as well as Bowmar's quality-made calculators. Sadly for Bowmar, price is king in the consumer market, and the characteristics of these cheap calculators generally weren't realized by the average consumer until well after the sale, and the "limited warranty" had expired.

To add to the situation, the Japanese had very quickly tooled up their own extremely efficient and semi-automated manufacturing lines to create high-quality yet inexpensive handheld calculators in vast quantities, and proceeded to flood the world market with competition for Bowmar's US-made calculators at a Bowmar-beating price-points.

An interesting side note is that many of these Japanese-made competitors to Bowmar's LED-display calculators used vacuum-fluorescent(VF) display tubes or in some cases, small gas-discharge display modules instead of LED displays. Primarily this was because the Japanese semiconductor companies took some time before they were allowed to license LED technology, and then more time to perfect the ability to mass produce reliable LEDs. Initially, there were also the import restrictions mentioned above that made it difficult for the Japanese calculator companies to buy LEDs from US semiconductor companies (at least legitimately). The VF and gas-discharge displays required more complex circuitry to drive and required higher operating voltages, which meant that much of the Japanese competition's calculators were a bit larger(to accommodate the extra circuitry and generally larger batteries to get the most run-time possible within the limits of the packaging), and did not have the on-battery run-time than Bowmar's LED display calculators

The rapid drop in the price of a basic handheld battery-powered calculator during the latter part of 1974 and into 1975 was devastating. In mid-1974, a typical price for such a calculator was around $179. By the end of the year, prices had dropped to the point where some of the really cheaply-made calculators with limited features (perhaps fewer digits in the display, lack of a battery charge-saving automatic display shutoff feature, smaller-capacity batteries, or non-rechargeable batteries) were marketed for as low as $15.

This break-neck rate of changed proved to be too much for Bowmar to adapt to in such a short time, and by the late part of 1974, the company was deep in financial trouble, with losses and debt accumulating at a horrific rate. The company had an after-tax loss of $20-million for fiscal year '74 (ended Sept. 31st), and had been unable to obtain waivers from lenders on defaulted payments on existing loans totalling some $35-million.

Hastening the situation, on Friday, February 7, 1975, New York Life Insurance Co. filed a $16-Million suit against Bowmar for defaulting on a loan they had with the organization. With this action on top of the severe losses, on Monday, February 10, 1975, Bowmar Instruments Corp. formally filed for Chapter XI bankruptcy protection to allow the company to continue to operate while it worked with creditors to try to renegotiate the terms of existing debt. At the same time, the company announced the resignation of its founder, CEO, and president, Edward White, and its CFO, William Meazell, with both gentlemen serving as consultants to the company.

The news clip above, while a bit out of date due to magazine publication schedules, outlines the situation.