The results of the coronavirus on Orange County’s biggest private companies are in: while many certainly did not thrive, most did not fall apart in 2020.
Collectively, the 35 companies on the Business Journal’s annual list reported a slight 1% gain in revenue to $77.8 billion for 2020. That compares to a 3.1% increase in 2019. The Business Journal’s latest list includes those with at least $500 million in annual sales.
Retaining the top spot this year was Fountain Valley’s Kingston Technology Corp., which had an estimated $13 billion in sales. The maker of memory chips received a boost last year when gamers, work-from-home employees and other users of its products were cooped up indoors during the pandemic.
“I think we are in the right marketplace, especially the cloud computing and work-from-home,” Chief Operating Officer David Sun told the Business Journal in a December interview. “Before, we relied on distribution B2B. Now we’ve started to implement part of the business to become B2C.”
Sun and Chief Executive John Tu, who both co-founded Kingston, were named the Business Journal’s Businesspeople of the Year in the technology sector in January (see separate story, page 22).
Kingston most likely won’t retain the top spot on next year’s list after No. 3 Allied Universal of Santa Ana bought a London-based firm G4S for $5.1 billion. Allied’s $8.5 billion in 2020 sales is expected to more than double to $18 billion because of the acquisition.
“We’re not slowing down,” CEO Steve Jones told the Business Journal last month. “The plan is to grow to $25 billion in annual sales by 2026.”
Allied Universal is now the world’s largest private security firm with 800,000 employees.
The list indicates that OC’s largest private companies dropped their local employee count by 1.3% to 31,614 as of May. Companywide, that number more than doubled to 975,241. The biggest reason was Allied Universal’s headcount rose to 800,000 from 235,000 a year ago.
Mortgage Explosion
Pacific Life Insurance Co. retained its No. 2 position even though revenue fell 7% to $11.5 billion.
The Newport Beach-based company, known for its advertisements of whales jumping out of the ocean, in late 2019 sold its airplane leasing unit, Aviation Capital Group, to minority stockholder Tokyo Century Corp. for an estimated $3 billion.
No. 17 Aviation Capital, one of the world’s biggest lessors of commercial aircraft, saw its revenue fall 15% to $1 billion as the travel industry was heavily hit last year.
The biggest revenue gainer percentage wise was 112% to $1.3 billion for New American Funding, a Tustin-based mortgage originator that jumped to No. 13 from No. 32 a year ago.
The Federal Reserve dropping interest rates to near zero caused an explosion in mortgages, particularly refinancings.
“When interest rates dropped, it was like the floodgates opened up,” CEO Rick Arvielo told the Business Journal last September.
He said the industry’s capacity is at $3 trillion a year in mortgages while about $11 trillion could be turned over.
“You’ve got three to four years of people that will need service. I don’t see this slowing,” said Arvielo, who owns the company along with his wife, Patty Arvielo.
Larger rival loanDepot Inc. (Nasdaq: LDI) of Foothill Ranch saw its revenue triple in 2020 to $4.3 billion. It’s not on this year’s list because it went public a few months ago.
Three other companies on last year’s list are no longer on it because they also went public: Advantage Solutions Inc. (Nasdaq: ADV), Vizio Holding Corp. (NYSE: VZIO) and Alignment Healthcare Inc. (Nasdaq: ALHC).
Industry Outliers
Certain industries took bigger hits than others during the pandemic; the Business Journal estimated the parent company of fitness chain LA Fitness took a 25% cut in revenue last year due to closed gyms.
The dental industry was also hit hard due to office closures, through some fought their way back to post a far better year than expected.
Pacific Dental Services, which supplies back-office services to dental practices, began last year with a goal of boosting sales 25% to $2 billion. Then the coronavirus shut down 95% of dental practices.
Founder and Chief Executive Stephen Thorne a year ago told the Business Journal that he would be “happy” if his company reached a billion dollars in sales.
It met that goal; the company reported only a 1% decline in revenue to $1.6 billion.
