Executive Profile: Tried, True And New

DigitalTV: Your appointment to president and CEO of Leitch shouldn't come as a shock, given your background in the industry. Where were you before Leitch?

Craig: I actually spent most of my career at Tektronix. At the end of that period I was at Lightworks [the editing group]. I started as a design engineer at the Tektronix Television division in 1983. Then I went to Snell & Wilcox where I became COO, and then to Leitch.

DigitalTV: Did you leave Tektronix at the time it decided to divest Lightworks?

Craig: No, it was actually before that. When I moved to England for Tektronix, it was in the early days of that [Lightworks] acquisition. When that 18-month period wrapped up I was done with that role. It was some time later that the divestiture happened.

DigitalTV: At least in general terms, have you formulated some plans for Leitch now that you are in charge?

Craig: Yes. There is sort of a long-term, short-term thing there as far as planning goes. In the short term it really is a back to basics time for all of us. So, we are focusing on the core customers, making sure thatÑif you look at our activities at NAB for exampleÑa lot of it is products that we know would serve the needs that our customers have today. So, in the short term we are focused on making sure that our portfolio is rejuvenated and that it is really targeted at their [customers '] requirements. In the longer term, although I can't talk about specifics, we have some very interesting new technologies to introduce. But, for now, we are trying to strike a balance between the two.

DigitalTV: You are taking the helm at a time when many companies have experienced reduced revenues, workforce cutbacks, and diminished expectations. By when do you see the market turning around and becoming as healthy as 2000?

Craig: I'm afraid that is the billion-dollar question. It's when the economies are going to turn around. We are starting to see some signs of life. Having said that, I don't think that such a turnaround will be immediate. The general perception, both from my own sales team and from the markets, is that as we go through this summer and fall we will see things coming back.

DigitalTV: Have you noticed any up ticks in the form of increased ad revenues at stations, particularly in the U. S. or anything else that might signal a turnaround?

Craig: That is one of the leading indicators, at least in the States. The ad revenue side of things. But, that is not what has been going on in the rest of the world. But, in general terms, there are some signs of vitality in the area of ad revenues.

DigitalTV: Leitch has been on the acquisition trail for some time now. The latest announcement was Tony Gargano's AgileVision. What is your view of how AgileVision fits in at Leitch and how it will enhance the company's range of products? And, what role will Gargano play, if any, in the integration of the new firm into Leitch?

Craig: AgileVision is actually a very good fit for us. As you probably know they have a product that is ready for the market today [the AGV-1000 digital television solution, which allows for manipulation of MPEG-2 and HDTV signals within the compressed domain]. So, we are now taking over the sales of that product and targeting it at the U.S. PBS station segment, where it helps them as they go on the air with DTV. It is a very targeted product where we expect to see positive revenues. Part of why we are optimistic about assuming control of AgileVision is that our role assures customers who are nervous about buying new technology from small companies. With Leitch behind the line we expect it to do very well. But in addition to the product, we also get a team of engineers with advanced compression expertise and that fits in with a number of things we need to do, in particular with our server product line.

DigitalTV: Will Tony Gargano be a consultant to the new operation?

Craig: Tony will not be staying with us long-term, because we will be integrating this group; just a few months to help with the transition. DigitalTV: The acquisition area is certainly interesting and active these days. And, a lot of your competitors have been busy in it as well. How long, however, can you keep active in this way without it starting to hurt financially? Are you expecting to slow your acquisitions?

Craig: We don't have any new acquisitions that we are actively pursuing right now. Having said that we are always opportunistic about such possibilities. If the right thing comes along, given the bargains in market valuation, we might just find ourselves taking advantage of that.

DigitalTV: Leitch's stock has taken a bit of a beating in the past year. And, that is true of a lot of the competitors in this sector, so you are in good company. What are your expectations for the share values in 2002? If you see that as a trend indicative of improvement, by when do you see that happening?

Craig: For a stock like ours we need to see the revenues come back to the level of 2000 and certainly we need to do some things at Leitch in terms of clarifying our story to the investor community. But, it really comes down to being able to show that those revenues are coming back. We are fortunate to have a very strong business model so even in these rough times we are generating cash and running at slightly above break-even. But, long-term, that doesn't make the shareholders happy.

DigitalTV: The technology landscape of digital TV broadcasting is changing, drifting away from VTRs and other older type products and toward servers, encoders, and other new gear. In that sense, Leitch could be a contender for the role that was previously locked up by Sony, Panasonic, and other tape-centric manufacturers. How do you see Leitch maximizing its advantages within that shift?

Craig: In terms of how we can move into the space that VTRs are occupying right now, the critical thing is that a company like Leitch has both server offerings and routers today. As you look into the next generation architectures you see that these things start to meld together. It is becoming more of an IT framework. So, having the expertise and experience of doing those things, it can be a positive shift for us. Furthermore, if you look at where the innovations in servers have come from it has been mainly from North America. We are emerging as one of the remaining North American suppliers in this category. It is also an advantage for us that we are not trying to protect a position in VTRs. So, we want this change to happen fast.

DigitalTV: Why should broadcasters buy from Leitch?

Craig: The big thing we have to offer is our size and that we are entirely focused on this customer base. Sony, Panasonic, and Thomson have a lot of financial might, but they also have a number of distractions. This is our business and the whole company serves these customers.

Douglas I. Sheer is a contributing writer for DigitalTV.

Margaret Craig, whose tenure in the broadcast industry spans almost two decades, is at the top of her game. Earlier this year, she was appointed president and CEO of Leitch Technology, succeeding John MacDonald. This should come as no surprise: she already has stints as president and chief operating officer of the U.S. subsidiary of Snell & Wilcox and managing director of Lightworks Editing Systems under her belt. She started her career at Tektronix, where she worked her way up from design engineer in television waveforms to become the general manager, at different times, of both the RF/Cable and TV Displays areas and the transmission test product line. Craig sat down with DigitalTV just before NAB2002 to discuss her rise to the top as well as her plans for Leitch. She says that while, for the time being, the company plans to focus its marketing efforts on its core products, certain factors point to a slew of innovations rolling down the pipeline in the near future. These include the potential for an economic turnaround in the coming year and the recent acquisition of compression company AgileVision. In addition, there are plans in the works for further collaboration with PBS stations looking to make the digital transition.