High-Technology Firms Have Found Success, Relief in Diversification

ENTER the "animation editing suite" at Sonalysts Inc. here and you find yourself in a darkened room where computer screens display colorful graphics and fantasy-like images.

Trained animators are busy working the keyboards as they create whimsical logos and pictures for video and television. Their designs will be used in shows such as "Guinness Book of World Sports Records" on Entertainment and Sports Programming Network (ESPN) and in the broadcasts of Boston Red Sox games on New England Sports Network.

Sonalysts Inc., founded in 1973 for submarine sonar analysis, is one state defense contractor that has been successfully diversifying. The company also produces software and submarine-related training programs for the United States Navy, but has now expanded into commercial markets.

"We're still trying to do things that are natural extensions of what we have today as core services and capabilities," company president John Markowicz says. "We got into the animation business not because we knew anything about animation, but because we're used to computers."

Inside the Media Center building at the expanding office park here are state-of-the-art audio and video broadcast equipment. The facilities were sophisticated enough for Paramount Pictures to hire Sonalysts to help produce and record submarine sound effects for the 1990 movie "The Hunt for Red October," starring Sean Connery. The picture won an Academy Award for sound-effects editing.

The company plans to build a new film and video studio that will be similar to one at Universal Studios in Orlando, Fla. Sonalysts, begun solely as a defense contractor, now does 60 percent to 70 percent defense-related work. And the firm is growing. For fiscal year 1992, Sonalysts made some $36.5 million, up from about $32 million the year before.

Other high-tech firms have also done well diversifying. Analysis & Technology Inc. (A&T), in Mystic, designs interactive computer systems and information technologies. Since 1969, most work was for Navy ships and submarines. But today, A&T is creating training and simulation packages to help teach pilots how to operate electronic flight systems. The company also designs a computer-based game for a pharmaceutical firm's salesmen to help teach them about new products. Last year, 14 percent of the company's

revenues were from nondefense markets.

Recently, the company helped develop a touch-screen video-display terminal for a marina. The interactive computer kiosk, or "electronic concierge service," guides visitors to area attractions and provides them with marine information. The company also helps produce kiosks for banks and stores.

A FEW Connecticut defense contractors began diversifying early. Kaman Corporation, of Bloomfield, started looking for alternatives to its helicopter-manufacturing business for the US military almost 30 years ago. Company executives decided to undertake a bold strategy when the corporation lost a contract to build 250 gun-platform troop-transfer helicopters after Lyndon Johnson became president.

"That [lost contract] could have destroyed our company," says J. Kenneth Nasshan, Kaman's assistant vice president. "It was a turning point ... when Charles Kaman, our founder and chairman of the board of directors, said we will never be in this position again and we will very aggressively seek to diversify our company."

Now, Kaman makes a wide range of products, from musical instruments to commercial-aircraft parts to heavy-duty lifting helicopters called "aerial trucks." The firm has expanded to comprise some 20 companies throughout North America.

Kaman made its debut in the music industry in 1966 with its round-back Ovation guitar, a product partly based on the company's expertise in vibration and aerospace technology. The firm has since acquired several music-distribution businesses. Today, Kaman's output breaks down to approximately 40 percent defense, 40 percent industrial, and 20 percent commercial.