Into the $1 Billion Club

Few U.S. companies have grown so big so fast as California's Litton Industries, which started in 1953 as a small maker of radar microwave tubes and has swelled into a 45-division giant focused on science and new technologies. In its 98 U.S. and 43 overseas plants, Litton today makes more than 5,000 products, from nuclear attack submarines to office furniture, employs 63,000 people. Last week it announced record sales of $914 million for fiscal 1965 (up 33% from last year), declared a 2-for-l split of its stock and a 21% stock dividend, the sixth in as many years. Even more impressive, Litton is currently running at an annual rate of just above $1 billion in sales, next year should go above that mark by a comfortable margin to take its place among the top 50 U.S. companies. Litton owes at least half its growth to its voracious appetite for acquisitions. Since it was founded by Chairman Charles B. "Tex" Thornton and President Roy L. Ash, the company has swallowed 50 other corporations--most recently Royal McBee (typewriters and office supplies), Hewitt-Robins (materials-handling equipment) and two small manufacturers of wooden office furniture. After a company joins Litton, it frequently does better than ever. Prodded into sharper performances by hard-driving Litton management, both McBee ($113 million a year in premerger sales) and Hewitt-Robins ($76 million) have boosted sales by 30%. Litton's overall sales, 54% of which go into the military market, have got a healthy nudge from the Viet Nam war. Skeptics have long argued that no company as big as Litton can keep its sales growing at such a dazzling rate as 30% to 50% a year. Tex Thornton disagrees. Though Litton will share its climb into the $1-billion-a-year rate with at least six other U.S. corporate mammoths, Thornton believes that Litton's exuberant expansion can continue to outstrip the field. "The only danger to the future success of the company," he says, "is men who think they know all the answers. That is the first kind of man we eliminate. He is too stupid to know what he doesn't know." Wall Street, at least, seems to side with Tex Thornton about Litton's future. Litton stock recovered more rapidly than most from the stock market's midJune drop; last week, on the news of Litton's performance, it jumped 41 points to a new high of 991.

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