Posted on May - 28 - 2010
After bleak period, Sensata rebounds
The situation looked bleak early last year at Sensata Technologies Inc.
The Attleboro company saw first-quarter sales plunge 38 percent as the financial crisis crushed demand for the sensors and controls it makes for machines ranging from cars to thermostats. Sensata was forced to slash costs by halting production, laying off one-third of its employees and cutting research-and-development spending.
What a difference a year can make.
In March, Sensata netted $569 million by selling 31.6 million shares for $18 each in its initial public offering – this year’s largest IPO so far. A month later, the company beat Wall Street analysts’ forecasts with a robust first-quarter profit of $27.3 million, versus a loss of $10.2 million a year earlier. Sales jumped 58 percent to $377 million.
“We’re really excited,” Sensata Chairman and CEO Tom Wroe said in a mid-May interview. “We feel we’ve got the ability to create a great future. We’re in the right places, and this is a good time for Sensata and its products.”
Those products are components of larger machines. Sensata designs and manufactures sensors, which turn physical stimuli into electronic signals, and controls, which protect devices from dangerous levels of heat or current. The company makes 20,000 different custom products and sells more than 800 million individual items per year.
Shockwaves had rippled through the Attleboro area back in 2006 when Texas Instruments Inc. announced it was selling off its locally based sensors and controls division for $3 billion to Boston private equity firm Bain Capital LLC. The newly independent firm was named Sensata, Latin for “those gifted with sense.”
Wroe said breaking away from TI has helped the company by giving it more “strategic focus.” Management is free to pursue its own strategy without worrying about how it fits as part of a much larger semiconductor group, he said.
The IPO was the culmination of Sensata’s first four years as an independent company, but TI had been in Attleboro since 1959, and Sensata’s roots stretch back even further. Its earliest predecessor was founded in 1916 by Rathbun Willard, an industrialist whose name still graces the road to the city’s high school, to serve Rhode Island jewelry makers.
At its height, TI employed about 5,000 people locally at more than two dozen buildings in Attleboro and Mansfield, making it one of the region’s largest employers. But the company’s local presence shrank significantly in the years before Bain’s leveraged buyout.
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