Public Cos. Grow Sales Despite Ingram Decline
By ANDREW SIMONS
Title insurers and a resurgent Western Digital Corp. helped drive a 3% sales gain at Orange County’s 50 largest public companies last year, offsetting a massive sales shortfall at No. 1 Ingram Micro Inc.
The largest public companies based here saw sales hit $81.2 billion in 2002, up from $78.8 billion a year earlier, according to this week’s Business Journal list. The sales gain came despite last year’s economic uncertainty and big corporate restructurings.
The biggest obstacle the group had to overcome was a $2.75 billion sales drop at Santa Ana-based technology products distributor Ingram Micro. The company, with sales larger than the No. 2 and No. 3 companies combined, saw revenue fall 11% to $22.5 billion last year as tech spending failed to rebound.
No. 2 Cypress-based PacifiCare Health Systems Inc. didn’t help. The health plan provider saw sales fall 6% to $11.2 billion last year as it shed less-profitable plan members.
Revenue gains at the next four companies made up the difference.
No. 3 Fluor Corp., the Aliso Viejo-based engineering and construction services company, saw sales rise 11%, or by nearly $1 billion, to $9.7 billion.
Title insurers No. 4 Irvine-based Fidelity National Financial Inc. and No. 5 Santa Ana-based First American Corp. rode the hot housing and refinancing markets to a $2 billion sales gain between them last year.
Add to that No. 6 Lake Forest-based Western Digital. The disk drive maker saw sales rise 24%, or by nearly $500 million, to $2.5 billion, thanks to new products and market share gains.
Without Ingram Micro in the mix, the 49 other companies posted a 10% sales gain to $58.7 billion.
“The diversity of the economy here helps,” said Mark Wilser, a principal at Global Capital Markets Inc., a private equity firm in Irvine.
The list ranks the largest publicly traded companies based here by sales for the most recent four quarters, most through Dec. 31.
The resilience of the companies was partly due to a strong residential real estate market. Nine of the 36 companies reporting sales gains were related to real estate,the largest of any industry.
Cost cutting and restructuring were common again last year, which led to a drop in jobs at the companies on the list. OC employment fell 4% to 35,443 last year, a loss of 1,287 jobs.
Restructuring by tech companies accounted for much of the losses. Ingram Micro cut 41% of its OC workers, or 950 jobs, when it shifted work to a new facility in Mira Loma.
No. 17 Newport Beach-based Conexant Systems Inc. shed 52% of its OC workforce, or 1,200 people, as it sold off three businesses. While most of the impacted Conexant workers went to the new companies, the chipmaker also laid off people.
No. 32 Santa Ana-based Powerwave Technologies Inc. cut its OC workforce by 28%, or by 330 people, by shifting more production to Asian contractors. The maker of amplifiers for wireless networks employs 870 people here.
“If you look back when things were expanding in the boom years, companies would build up,” said Jacques Perrone, a principal at Irvine-based investment bank Eureka Capital Markets LLC. “When the bottom fell out, we had way too much infrastructure. There’s more rationalizing of businesses.”
It wasn’t just tech companies doing the cutting.
Fluor laid off 791 in the past year as projects slowed. No. 7 Fullerton-based Beckman Coulter Inc. cut 5% of its workers, or 115 people, as parts of its business slowed. No. 10 Lake Forest-based Apria Healthcare Group Inc. cut OC jobs by 18%, or 117 people.
“Companies are looking at all their options,” Perrone said.
The cost cutting trimmed losses. The net loss for the 50 companies narrowed to $1.2 billion in 2002 from $2.5 billion a year earlier.
Big charges at PacifiCare and operating losses and charges at No. 12 Irvine-based Broadcom Corp. and Conexant made for most of the net loss.
Broadcom’s $2.2 billion, restructuring-driven net loss surpassed that of any other company. The next largest net loss, also due to restructuring, was at Conexant, $728 million.
Excluding Broadcom and Conexant, the 48 other companies posted a $1.8 billion profit, up 7% from the $1.7 billion a year earlier.
As in 2001, title insurers Fidelity National and First American posted the largest profits for 2002.
This year’s top 50 list had five newcomers:
n No. 23 Santa Ana-based Advanced Medical Optics Inc. spun off from No. 9 Irvine-based Allergan Inc. last year. As a result, Allergan saw its sales slip 18% to $1.4 billion last year.
n No. 39 Costa Mesa-based Ribapharm Inc. debuted last year as the result of a spinoff and moved up this year from No. 56. No. 16 Costa Mesa-based ICN Pharmaceuticals Inc. sold off a 20% stake in Ribapharm last year. ICN’s sales fell 14% to $737 million as a result.
n No. 46 Santa Ana-based Calavo Growers Inc. debuted after converting from an avocado growers cooperative to a publicly traded company.
n No. 47 Newport Beach-based Impact Mortgage Holdings Inc. moved up from No. 52 last year with a 45% jump in revenue to $226 million
n No. 48 Orange-based title insurer ANFI Inc. also joined the top 50 from No. 59 last year as it rode the real estate market. Fidelity acquired the 67% of ANFI it didn’t already own last month. We’ve included ANFI since it was publicly traded for the period covered by the list.
Intersil Corp., last year’s No. 22, fell off after moving its headquarters to Milpitas.
Other companies were bumped from the top 50 by sales declines, the addition of bigger companies or both. They are: Irvine-based Newport Corp., last year’s No. 34; Irvine-based Epicor Software Corp., last year’s No. 48; Newport Beach-based Nationwide Health Properties Inc., last year’s No. 49; and Santa Ana-based SimpleTech Inc., No. 50 a year ago.
Fewer of OC’s big public companies call Irvine home. Only 15 of the companies on the list are based in Irvine this year, down from 20 last year. Newport Beach again ranked second, with eight headquarters, even with a year ago. Santa Ana came in third with seven headquarters, up from five last year.
In coming weeks, the Business Journal is set to follow this week’s list with two more lists capturing the next 100 public companies based here.
