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Golden State, Vizio Prop Up Private Companies

Download the 2010 OC’s LARGEST PRIVATE COs LIST (pdf)

The 75 largest private companies in the county saw 2009 revenue hold steady, thanks to gains at some of the largest companies here.

In all, the largest private companies here had $51.2 billion in 2009 revenue, up 0.3% from the sales they had in 2008, according to this week’s Business Journal list.

The recession that bottomed out in early 2009 took its toll with many companies seeing lower revenue or being estimated down by the Business Journal.

But a handful of companies at the top of the list added $1.2 billion in revenue in the past year, more than offsetting the list’s otherwise downward trend.

The big gainers were No. 2 Irvine-based Golden State Foods Corp., a food products distributor, and No. 5 Vizio Inc., a seller of flat TVs.

Both were up by about $500 million in revenue from a year earlier.

Revenue at Golden State Foods rose 14% to $4.2 billion.

The gain moved Golden State up from No. 4 on last year’s list.

Vizio saw a 25% gain to $2.5 billion in sales and moved up from No. 8 last year.

The other big gainers: No. 1 Newport Beach-based Pacific Mutual Holding Co., parent of life insurer Pacific Life Insurance Co., up 2%, or by $100 million, to $5.4 billion; and No. 3 Fountain Valley-based Kingston Technology Co., up 2%, or $100 million, to $4.1 billion.

Without the four gainers at the top of the list—some of which benefited from countercyclical economic trends—the other private companies performed more as expected.

The remaining 71 companies saw sales last year decline 3% to $35.1 billion. The decline actually could be steeper as our list includes 41 estimates—typical for a list of private companies where many are unwilling to disclose revenue.

The largest private companies here took a bigger hit in 2008, when sales at the companies on our list fell 5%, reversing five years of gains in revenue.

Golden State Foods, a supplier of meat, sauces, buns and others products to McDonald’s Corp. and other restaurant chains, grew with a surge in fast food during the recession.

In December, the company opened a North Carolina warehouse to serve McDonald’s in the region.

“The better McDonald’s does, the better we’re going to do,” Chief Executive Mark Wetterau said at the time.

McDonald’s, which makes up the bulk of Golden State’s revenue, has fared well in the downturn as diners turned to less expensive food.

Vizio also grew on a move to value by shoppers. The company sells flat TVs at Costcos, Wal-Marts and others for less than those of big rivals.

Last year, Vizio expanded into DVD players, speakers and cables and started selling in Canada and Mexico.

Vizio was the top U.S. seller of the liquid-crystal display TVs in the fourth quarter, beating out household names such as Samsung Group, Royal Philips Electronics NV and Sony Corp., according to data from El Segundo-based market tracker iSuppli Corp.

The list included other gainers.

No. 13 Brea-based Fresh Start Bakeries Inc., another supplier to McDonald’s and other restaurants, saw sales rise 11% to $790 million.

No. 15 Newport Beach-based KBS Realty Advisors saw an 11% gain to $649 million in revenue as the commercial real estate investor and owner bought up buildings, adding to the rent it realizes as revenue.

Toward the bottom of the list, No. 71 Stearns Lending of Santa Ana saw the biggest percentage increase in sales, a 97% gain to $154 million in revenue.

The mortgage lender, which saw a dramatic fall in business during the industry’s collapse of 2007, has emerged as one of the few independent survivors in the business. Like others, Stearns is seeing a wave of mortgages and refinancing spurred by low interest rates.

Others were more reflective of the economy last year.

The biggest decline by dollar amount occurred at No. 10 Orange-based David Wilson Automotive Group, owner of Toyota of Orange, Newport Lexus and other dealerships.

Wilson’s sales were down 21%, or by nearly $300 million, to $1.1 billion in a year in which auto sales fell about 25% nationally. 2009 was the worst year for the industry since the 1970s.

No. 32 Irvine-based Sares-Regis Group, a developer and owner of apartments, offices and industrial parks, saw its revenue fall 19% to $339.8 million amid the commercial real estate slump.

The biggest decline by percentage came at No. 36 Newport Beach-based homebuilder William Lyon Homes Inc., which fell 41% to $309 million as the company dealt with the housing downturn and restructuring last year.

The list, always a work in progress, saw a handful of new entries. Based on size, some of the newcomers should have been on prior lists but were discoveries this year. The nature of private companies means we’re constantly finding companies to add to our list.

The highest ranking debut is No. 12 Irvine-based LA Fitness International LLC, which operates gyms across the country. LA Fitness is estimated at $800 million in yearly sales.

At No. 14 is newcomer Southern Counties Oil Co. of Orange with an estimated $700 million in yearly sales. The oil products distributor last year combined with once publicly traded United Fuel & Energy Corp., which was run from Southern Counties’ Orange headquarters.

Frank Greinke, who runs Southern Counties, had owned a majority of United Fuel.

No. 49 Santa Ana-based MSC.Software Corp. debuted on the list after the once public company was taken private in a $390 million buyout by Palo Alto-based private equity firm Symphony Technology Group LLC.

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