Holophane Corporation

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Holophane Corporation

250 East Broad Street, Suite 1400
Columbus, Ohio 43215
U.S.A.
(614) 224-3134
Fax: 614-341-2142

Public Company
Incorporated: 1989
Employees: 1,612
Sales: $190.9 million (1996)
Stock Exchanges: NASDAQ
SICs: 3646 Commercial Lighting Fixtures

Holophane Corporation is a leading global manufacturer of highly engineered lighting fixtures for industrial, commercial, and outdoor applications, and its products are used as new or retrofit fixtures in factories, offices, schools, stores, sports arenas, warehouses, power plants, highways, and correctional facilities around the world. In 1996 it was the sixth largest producer of commercial lighting fixtures in the United States. Holophane occupies the premium-quality, low-unit-sales niche of the commercial lighting fixture industry, where it operates in all but the residential and automotive segments. In the industrial lighting sector, Holophane makes light fixtures for large indoor spaces with high ceilings as well as facilities that contain large pieces of equipment or require lighting at different heights. It also manufactures fixtures for specialized environments, such as explosion- or hazard-resistant lighting. In the outdoor lighting segment it manufactures large-area lighting for highway interchanges, tunnels, and other outdoor areas such as advertising billboards, highway signs, and building facades. It also manufactures architectural specialty lighting for downtown renovations and housing developments. In the field of commercial/institutional lighting Holophane manufactures designer fixtures for restaurants and bars as well as so-called upright fixtures for offices in which the light is reflected up at the ceiling as well as downward. Holophane also manufactures specialty high-performance fluorescent fixtures, emergency lighting equipment, glass refractors for street lighting fixtures, and injection-molded plastic and glass lenses for use in fluorescent fixtures.

Holophane is a vertically integrated manufacturer: it operates in virtually all stages of the raw-materials-to-finished-product process and produces its own glass, processes its own aluminum, and fabricates its own electrical components. Its Mexican facility, for example, performs sand casting and aluminum foundry operations for making light poles; its Springfield, Ohio facility performs sand- and die-cast production; its Newark, Ohio facility makes molds, produces glass, and performs plastic injection molding and special engineering; its Pataskala plant produces ballasts (the voltage-producing or current-stabilizing device housed in the light) and assembles electronic components and emergency products; and its Utica, Ohio facility fabricates sheet metal parts and poles and performs assembly and product painting.

Holophane employs a 185-strong in-house sales staff to sharpen its marketing efforts, which are focused on the lighting project’s design stage. By marketing directly to architectural, engineering, and electrical contracting firms and distributors Holophane improves its chances of having its fixtures incorporated into the final building design. Among the many institutions that have installed Holophane products are the California school system, Sam Goody music stores, Office Depot, London’s Underground subway, Coors Brewery, San Francisco’s Embarcadero city center, the Chicago Park system, the Titleist golf products company, the Daily Mail newspaper of London, and Coca-Cola. Among its historical milestones are the original illumination for the crown of the Statue of Liberty and a new lighting system for both houses of Congress as well as London’s Westminster Abbey.

Bright Idea: 1895–1920

In the late 19th century, two Parisian factory workers, a Frenchman named Andre Blondell and a Turk named Mr. Psaroudaki, came upon the idea of enhancing the illuminating effects of gas lights by enclosing them in crystal glass globes. After refining their idea and detailing its design on paper in 1895 they were awarded France’s patent number 563836 and formed a new firm, Holophane Company of France (from the Greek words Holos and Phanein, meaning “to appear wholly or completely luminous”). With their invention of a method for intensifying the illumination of artificial light sources, the science of prismatic refraction was born and with it a new industry. In 1896, a British firm licensed Blondell and Psaroudaki’s patent and began manufacturing products incorporating the new technology under the name Holophane Ltd. Two years later, an American named Otis A. Mygatt purchased Blondell and Psaroudaki’s patent rights from Holophane Ltd. and founded the Holophane Company of the United States in New York City.

In search of an appropriate location to house his new plant, Mygatt turned to his associate August Heisey, who allowed him to use the Heisey Glasswork Company’s facility in Newark, Ohio, which by 1902 was up and running (and still used by Holophane in 1997). Mygatt’s timing could not have been better. U.S. industry was growing by leaps and bounds and the availability of strong and efficient factory lights made night shifts possible and enabled workers to fabricate precise parts requiring brightly lit conditions more easily. Gone were the days when factory roofs had to be installed with skylights to illuminate the manufacturing floor and night-shift workers had to squint through the light cast by bare incandescent lamps. Holophane’s prismatic glass reflectors not only solved the problem of poor illumination, they also did not wear out and required no maintenance.

In 1906 Mygatt’s Holophane sponsored a meeting of U.S. lighting industry leaders at Holophane’s New York office. In the course of the conference he established the Illuminating Engineering Society to promote the advancement of the field of scientific lighting, a role it continued to play in the 1990s. Over the next several years, Holophane invented the first method for measuring light intensity and light distribution. With this data the company began publishing the photometric performance of its products, enabling customers to determine precisely the amount of lighting they would need for every corner of their factories, offices, roadways, and outdoor areas. Lighting design had become a science.

Holophane’s technical breakthroughs in prismatic refractors, reflectors, and lenses or globes improved American business’s ability to control light. Light refractors were soon in use in gas street lights, and light reflectors were incorporated into many interior gas lights. When electric light began to replace gas light, Holophane’s products proved just as useful in enhancing the illumination of electric light, and the nation’s two largest producers of light bulbs—General Electric and Westing-house—were soon promoting the use of Holophane’s refractors and reflectors on the corrugated sleeves that contained their lamps. By 1910, Holophane also had introduced a method for measuring glare and had established optimal lighting patterns for roadways that were soon included in the Illuminating Engineering Society’s standard industry lighting code. As a result of its development of glare measuring methods, Holophane’s newest light refractors could disperse glare-free light over sharply defined areas. Holophane also began manufacturing refractor products to conform to its new road-lighting standards. Its early formulation of the principles of effective road lighting, including the appropriate positioning of lights at intervals along streets and highways, was still in use in the 1990s.

High Bays, NBC, and the Infrared Signal Lamp: 1920–1945

During the next several decades Holophane’s growth continued to parallel that of U.S. industry as a whole. Manufacturing technology grew in sophistication, and higher wattage incandescent lamps were continually introduced. Holophane responded by designing and marketing ever larger prismatic reflectors for factory light fixtures. In the 1920s it also introduced “high-bay” lighting, which enabled large factories to be effectively illuminated for the first time. Moreover, by overcoming the problem of heat buildup, which had stood in the way of the widespread adoption of recessed lighting, Holophane became a leading manufacturer of recessed lighting products for offices, stores, and schools, a niche that would eventually become its largest and most profitable segment.

In 1932 the company took a decisive step forward when it designed special lighting equipment for NBC’s Radio City studios in New York City. This was the first practical application of recessed incandescent “luminaires” (or light fixtures) using flat lenses. The result was the first truly recessed ceiling light system, in which no part of the lighting system protruded from the ceiling. Holophane was soon installing the lighting systems for other parts of the NBC network and, later, for CBS as well. Another major product breakthrough was the development of the first light reflector for use with mercury vapor lamps, which by the mid-1930s had become a practical light source for American industry.

America’s entrance in the Second World War once again required Holophane to apply its technological resourcefulness to a new social need. Holophane’s lights were used in countless airfields, hangars, and armaments factories throughout the war, and 50 years later some of the airfield runway lights it installed were still in use. Perhaps its most important contribution, however, was the infrared signaling lamp. German and Japanese submarines wreaked havoc among Allied fleets in part by honing in on the light of the signaling lamps used to exchange maneuvering information. To enable its fleets to slip through the seas undetected, the Allies needed a way for ships to signal each other without alerting enemy subs of their presence. Holophane answered by developing a signal lens that used invisible infrared radiation, or heat, rather than light. The innovation proved so successful that Holophane’s invention remained a closely held secret of the U.S. Navy for many years. For its war contributions, Holophane was awarded two Army-Navy “E” awards for excellence, a commendation enjoyed by fewer than one percent of U.S. defense companies during World War II.

Company Perspectives:

Holophane’s mission is to: “provide lighting products and solutions, giving our customers the greatest value through superior: visibility, energy, efficiency, reliability, quality, Service.”

The Postwar Years: 1946–1971

In the decades after World War II, Holophane unleashed a stream of new lighting technologies that helped to transform the American factory and workplace. Over the next four decades it would establish the Light and Vision Conference Center for professionals and students interested in scientific light control and would introduce a system of “high-mast” lighting for highway throughways and interchanges that would improve illumination while reducing the number of light poles needed to light a road. It also developed new luminaires for high-intensity discharge (HID) lamps that allowed these traditionally outdoor lights to be introduced inside factories. Later improvements softened the intensity of the HID lamp’s light, reduced the amount of sound it emitted, and minimized the heat it gave off, enabling Holophane eventually to introduce high-intensity discharge luminaires in offices and stores. Moreover, Holophane’s Refractive Grid lens represented a significant improvement over cone prism lenses in reducing glare while increasing the amount of useful light emitted.

In the 1950s fluorescent lamp technology continued to improve, and during the decade Holophane introduced such innovations as the first recessed fluorescent fixture lens (offering enhanced glare-control features); the so-called cone prism lens that proved so successful it was still in production in the 1990s; and the first surface-mounted fluorescent wraparound lumi-naire, which combined very wide light distribution with excellent glare control and superior “cutoff” (the fixture’s ability to keep light from shining above the fixture). With Holophane’s development of the first luminaire ballast with a built-in heat-dissipating heat sink, lighting fixtures could run cooler for longer periods of time.

Holophane also suffered setbacks. In November 1956 the U.S. Supreme Court ruled that Holophane had violated U.S. antitrust law by agreeing with Holophane Ltd. of the United Kingdom and La Societe Anonyme Francaise Holophane of France to divide up the world’s commercial lighting fixtures industries among themselves, each staying clear of the others’ territories. The Court also ruled that the three Holophanes had agreed to pass new product discoveries along to each other and had secretly promised not to attempt to get patent or trademark protection in the others’ territories. The U.S. Holophane countered that the anti-compete agreement had been inherited from the British firm Holophane Ltd. when the former had been purchased from the latter by its American owners at the turn of the century. It had not created the arrangement, it argued, so it should not be held accountable for it. The Supreme Court disagreed and ordered the U.S. Holophane to begin competing in its competitors’ foreign markets and, if necessary, to change some of its overseas trademarks. Meanwhile, the company’s net income, which had peaked at $1.7 million in 1957, began to slide, tripping to $1.3 million in 1958 and then lifting slightly to $1.5 million in 1959. Holophane’s president, Charles Franck, lay the blame at the feet of its Canadian subsidiary, which had suffered because of a general economic slump in that country. When a shareholder at the October 1958 stockholder’s meeting suggested that perhaps Holophane should split its stock price to make it cheaper, thereby encouraging public buying and media coverage, Franck snapped, “We don’t want any gambling. We don’t want people just buying and selling this stock; we like the privacy of our business. I can tell you the suggestion [to split the stock] is a waste of time. Management is against it.” In June 1961, Franck was replaced at Holophane’s helm by Clarence C. Keller, and Holophane’s fortunes began to improve. From a level of $1.8 million in 1961–1962, net income rose to $2.1 million in 1963, $2.3 million in 1964, and then $2.9 million in 1965. In September 1965, Holophane returned to its roots by acquiring, for $650,000, Holophane Ltd., the same company from which Holophane had sprung more than a half century before. It also drew on its heat-sinking technology to introduce the first integrally ballasted HID luminaire for indoor applications. HID represented a new source of light from fluorescent methods and Holophane quickly embraced it. The innovation meant significantly diminished installation costs for customers, and it shortly became standard equipment in almost all indoor and outdoor luminaires.

Holophane’s net income rose to a historical high of $3.3 million in 1966–1967, only to fade to about $3 million in 1967–1968. “July and August [1967] weren’t good months for us,” Keller explained, “But … we would expect that fiscal 1968 will be better than fiscal 1967.” It was, and Holophane’s net income rebounded to $3.1 million in 1968–1969. In October 1967, Keller disclosed his vision of Holophane’s future to the New York Society of Security Analysts: “We are continuously exploring possibilities for acquiring organizations which might enable us to enter lighting fields in which we aren’t heavily engaged,” such as, he elaborated, the lighting of stadiums, tennis courts, and other recreational facilities, and architectural lighting, as for residences and hotel lobbies. A just completed plant expansion program had also given Holophane room to grow its business by 50 percent. As a result, Keller continued, “Our concern for the foreseeable future will be to develop sales rather than production facilities.” By the end of September 1970, Holophane’s sales had grown from $8 million the year before to $9.5 million. Keller described the gain as only “modest,” however, because labor and materials costs and a general reduction in spending by government and industry were eating into Holophane’s profit margin.

Johns-Manville’s Lighting Division: 1971–1989

In April 1971 the building products giant Johns-Manville Corporation offered to buy Holophane in a stock swap that when approved by Holophane’s board of directors resulted in a transaction valued at more than $60 million. While Holophane’s board mulled the Manville offer, it snapped up the Strong Electric Corporation from Singer Co. in May. Within a week, the Manville deal was done, and after years as a publicly traded company Holophane officially became the Holophane Lighting Division of Johns-Manville.

Under Manville’s umbrella, Holophane continued to innovate in the lighting fixtures business and experienced virtually uninterrupted growth. In the early 1970s it developed its first practical “High Mast” roadway lighting system for large highway interchanges, a niche in which it would become the world leader. The technology used a combination of reflectors and refractors to allow the greatest possible spacing thus far between roadway light poles and featured a device for conveniently raising and lowering the fixture for easy street-level maintenance. High Mast products were soon appearing in parking lots, container yards, rail yards, sea ports, and truck stops. In the 1980s Holophane also began using HID luminaires with “upright” and “sidelight” components. This allowed the ceiling itself to be used as a lighting element, improving illumination and visibility. After several years of research and development, in 1986 Holophane introduced its GranVille series of decorative lighting fixtures for design-sensitive projects like the renovation of Fisherman’s Wharf in San Francisco. In November 1988 Manville, on the verge of bankruptcy because of asbestos-related lawsuits, announced that it was selling Holophane along with its sealing components business. In May 1989, Holophane’s management and a group of financial advisers formed the Holophane Corporation to acquire the assets and capital stock of Manville’s Holophane division for more than $100 million.

The DallePezze Years: 1989–1997

On July 1, 1989, Holophane became an independent company again for the first time in almost two decades, and by October John DallePezze, a former executive with N. L. Industries, was named Holophane’s new president and CEO. DallePezze led Holophane to some of its best years ever, with record sales driven by a continuing stream of new product introductions. For example, Holophane updated its HID luminaire product line by introducing fixtures with as much as 60 percent upright, reflecting the trend toward brighter ceilings in the office construction industry. Known as PrismGlo, this series of fixtures was used in retail, textile, industrial, and other applications, most notably the cavernous parking garage of the O’Hare International Airport in Chicago.

Holophane’s sales were given a big boost in 1992 when Congress passed the Federal Energy Act, which called for the abandonment of certain types of fluorescent lamps. In the long run the act improved sales of Holophane’s line of HID fixtures and by 1993 Holophane’s U.S. sales were up 13 percent over 1992. In 1993 Holophane also brought its new $4.5 million glass furnace on line, completed shipments of light fixtures for the retrofitting of the 182-mile London Underground subway, and introduced its Computer-Aided Lighting Analysis (CALA) software so sales reps could calculate accurate light levels for customers’ sites. By reinvesting three to 3.5 percent of sales annually into new product development, well above the industry average, Holophane introduced four to five new products or enhancements of existing lines each year, and by 1995 products introduced since 1990 represented 25 to 30 percent of net sales. The new lines ranged from Prismalume and Paradome store lighting fixtures to the Holophane decorative Classics series, Big Eye emergency lighting fixtures, and Predator floodlights. But the largest product introduction in company history occurred in January 1996 when Holophane unveiled PoleStar, a family of outdoor architectural lighting fixtures designed for everything from parking lots and roadways to public common areas and bike paths. Aided by the discontinuation of its Canadian operations and the acquisition of Antique Street Lamps of Texas, a producer of decorative and historically styled light poles and fixtures, Holophane’s net income rose to $151 million in 1994. In 1995, Holophane announced its plans to capitalize on the influx of highway funding made possible by the Intermo-dal Surface Transportation Efficiency Act. Throughout the year Holophane consolidated its Ohio operations and continued lowering its corporate debt. In the spring Holophane sent representatives on a China trade mission with the governor of Ohio and 14 other companies. Between 1996 and 1997 company officials made at least five more Asian sales trips, selling products from every corner of its product line. With Asian sales expected to exceed $1 million, Holophane planned new trade missions to Korea, Taiwan, and Australia. To solidify its international gains, Holophane also formed Holophane International Corporation, a foreign sales company; Holophane Lighting GmbH of Germany; and Holophane Australia Corporation Pty. Ltd. Holophane’s biggest coup was domestic, however, when it won a contract with the city of Atlanta to install the lighting for 26 miles of the roadway leading to the Olympic Games.

Despite the jolt of income and publicity bestowed by the Olympics project, bad winter weather slowed U.S. construction activity in the first quarter of 1996, and Holophane was forced to lay off workers and watch as its earnings dropped 48 percent. In September it nevertheless made its second purchase of a Texas-based lighting firm by acquiring MetalOptics Inc., a producer of high-efficiency fluorescent lights, for $6.1 million. Through 1996 Holophane had enjoyed growth for 25 of the past 27 years and was sustaining an industry-leading ten percent annual growth rate.

Principal Subsidiaries

Holophane Canada, Inc.; Luxfab Limited (United Kingdom); Holophane Lichttechnik (Germany); Holophane Europe Limited (United Kingdom); Antique Street Lamps, Inc.; Castlight (Mexico); Holophane International, Inc. (Barbados); Holophane Australia Corporation Pty. Limited; Unique Lighting Solutions Pty. Limited (Australia); The Austphane Trust (Australia).