Hadson Corp. Agrees to Sell Irvine-Based Ultrasystems

Hadson Corp., an Oklahoma City-based energy firm, said Wednesday it has agreed to sell its money-losing Ultrasystems Defense Inc. subsidiary here to Logicon Inc. in Los Angeles for an undisclosed price.

J. Michael Adcock, president of Hadson, said the company is selling the unit to get out of the defense business, reduce its debt and focus on its core energy businesses.

Ultrasystems Defense employs 280 people at locations in Irvine, El Segundo, Sunnyvale, Sierra Vista, Ariz., and Colorado Springs, Colo. About 100 people are employed at the Irvine headquarters.

Ultrasystems is a professional services company that specializes in systems engineering and development in support of military products for command, control, communication and intelligence applications, known as C3I.

Ralph Webster, vice president and chief financial officer of Logicon, said his company sees opportunities with Ultrasystems in part because its C3I businesses are considered a safer haven than big-ticket weapons systems contracts in an era of defense spending cuts.

“We will expect to continue the business the way it’s being operated,” Webster said. He declined to comment on whether layoffs are planned.

Logicon is also a professional services company that makes electronics for both commercial and defense applications. Its work includes software systems for the MX and Minuteman missiles, high-energy lasers and the B-2 bomber. It has 3,000 employees, including 1,000 in Southern California, Webster said.

Logicon reported a net income of $1.8 million on revenue of $63.4 million for its quarter ended June 30, compared with net income of $2.6 million on revenue of $59.1 million a year earlier.

Ultrasystems Defense had annual revenue of $27 million last year but Adcock said the subsidiary was not profitable. Adcock said Hadson had not yet found a buyer for its other defense subsidiary, HRB Systems in State College, Pa.

In the six months ended June 30, Hadson reported losses of $146.3 million on revenue of $314.6 million, compared to a loss of $1.6 million on revenue of $245 million a year earlier. The losses were due to a $10-million loss in a fixed-price contract to create a computer-driven training program for the Army as well as a charge against earnings related to the discontinuation of the defense operations.

Hadson acquired the Ultrasystems Defense unit with the acquisition of Ultrasystems Inc. in April, 1988.