EXECUTIVE SUMMARY
Compiled by Andrew Simons
TOP STORY
Western Digital Corp., the Lake Forest-based disk drive maker, expects its recently completed, $180 million buy of bankrupt Read Rite Corp. of Fremont to add to earnings by next September. Read Rite makes heads that read and write data on drives and operated a plant in Fremont and factories in Thailand. Western Digital gained 6,600 workers in the deal. Western Digital’s stock climbed 21% on the news. The drive maker also settled a two-year-old lawsuit with Austin, Texas-based Cirrus Logic Inc. that centered on chips Cirrus supplied to Western Digital but was phasing out. Western Digital stopped payment on delivered chips and cancelled pending orders. The case was set for trial in December. Western Digital took an $18.5 million earnings charge as part of the $45 million settlement in the quarter ended June 27. For the company’s fiscal fourth quarter, profit fell to $31 million, from $49 million a year earlier. The company’s full-year profits fell to $182 million, from $200 million
TECHNOLOGY
Costa Mesa’s Irvine Sensors Corp. said it built a computer about the size of a wristwatch. It’s about one square inch and a half of an inch high and runs on a chip from Intel Corp. The computer was developed for an undisclosed government agency Irvine industrial printer maker Printronix Inc. laid off marketing and sales vice president Andrei S. Hall in what it called a restructuring. No other layoffs are expected Powerwave Technologies Inc., a Santa Ana maker of wireless phone gear, laid off 77 workers. The small round of cuts comes after the company fired more than 600 of its 1,200 workers after moving production to Asia Irvine-based Procom Technology Inc. asked the Securities and Exchange Commission for permission not to file public financial reports. The money-losing maker of data storage systems hasn’t filed results for its quarter ending in April. Procom shares were delisted from the Nasdaq SmallCap Market two weeks ago.
HEALTHCARE
Irvine medical device maker Endocare Inc. said it would file long delayed audited financial results for 2002 and half of 2003 in October. The results should come a few weeks after Endocare files reaudited results for 2000 and 2001. The Securities and Exchange Commission and the Justice Department are looking at Endocare’s 2001 and 2002 numbers. Endocare’s problems began last year in the third quarter when longtime auditor KPMG told investors Endocare’s results for 2001 and the first half of 2002 may be incorrect because some of the company’s management hadn’t been truthful San Clemente-based Biolase Technology Inc., a maker of dentistry and dermatology lasers, said it asked the Securities and Exchange Commission for advice on handling its buying order forms and its effect on recognizing revenue. The company discovered that the language on the forms could affect exactly when revenue is booked, which could alter earlier results Yorba Linda’s Cash for Check, a chain of check cashing stores, says it will order cheaper Canadian prescription drugs for customers, which the Food and Drug Administration says is illegal. The company says it believes the practice is legal and hasn’t been contacted by regulators.
REAL ESTATE
Newport Beach’s Health Care Property Investors Inc. said it would redeem 5.3 million preferred shares at $25 a share. The price includes accrued and unpaid dividends Santa Ana-based title insurer First American Corp. said it will up its quarterly dividend by 50%,from 10 cents to 15 cents per share,thanks to record earnings in the first half. The increase follows a 25% dividend hike in the fourth quarter.
FINANCE
Investors pulled $803 million from Newport Beach-based Pacific Investment Manage-ment Co.’s $71.7 billion Total Return Fund last month. Holdings in the bond fund, the world’s largest, dropped 4% from July as investors moved money to stocks Irvine-based Westcorp, parent Western Financial Bank, said it sold $1.7 billion worth of bonds to investors. The bonds are backed by WFS Finance Inc., the bank’s auto finance arm.
WHAT ELSE IS NEWS
Ralph Whitworth, chairman of Lake Forest healthcare company Apria Healthcare Group Inc., bought a $54.5 million stake in J.C. Penny Co., raising the prospect the company could be forced to sell its Eckerd drugstore chain Anaheim’s Bridgford Foods Corp. returned to profitability thanks to cost-cutting. The maker of snack and convenience foods said it earned $412,000 in the third quarter compared with a loss of $430,000 during the same quarter a year ago. Sales declined 6.4% to $30 million during the period Orange County hotels bumped their June occupancy rate to 74% from 73.2% a year earlier, according to numbers from PKF Consulting. The average daily room rate was $106.7, down 3.8% from a year ago. Hotels in South County, at 77.5%, and Anaheim, 76%, posted the best showings Jay Rasulo, president of Walt Disney Parks and Resorts, will serve as chairman of the U.S. Travel and Tourism Promotion Advisory Board Santa Ana-based Corinthian Colleges Inc., which operates a string of private colleges and vocational schools, said profits climbed 50% in the June quarter. Corinthian said the jump in profits came because it has added new courses, expanded older schools, acquired new ones and bumped student fees. June-quarter income climbed to $18 million from $12 million a year earlier as sales rose to $139 million from $95 million.
Rutan & Tucker Forms Construction Law Unit
Costa Mesa law firm Rutan & Tucker has formed a construction law practice group made up of lawyers from its Orange County headquarters and a recently opened Silicon Valley office.
Rutan is bringing together lawyers from its trial, real estate and government practices to work in the construction law group.
Steven Nichols, a litigator with experience in construction-related disputes, and Thomas Salinger, who also heads the firm’s trial section, are co-chairing the new group.
Including Nichols and Salinger, the new practice includes eight OC attorneys and three lawyers at Rutan’s San Jose office.
Clients include Lake Forest-based ARB Inc., Sylmar-based Tutor-Saliba Corp. and Watsonville-based Granite Construction Co.
Rutan opened its San Jose office,its first outside OC,in August. The Silicon Valley office was spurred in part by William Eliopoulos, a partner at the new office who worked at Rutan as an associate in OC before moving to Northern California in 1985.
,Chris Cziborr
Samsung Orders $3.5M in Powerwave Products
Santa Ana-based Powerwave Technologies Inc. received $3.5 million in power amplifier orders from Samsung Electronics Co.
The amplifiers are set to be used in third generation, or “3G,” wireless network in South Korea. Powerwave expects to ship the amplifiers this quarter.
The sale is a small step in Powerwave’s diversification bid. In the first half of the year, Canada’s Nortel Networks Corp. made up 57% of Powerwave’s sales, up from 42% a year earlier.
Last month, Powerwave said it’s cutting 600 workers in Santa Ana and plans to contract out for production of its products in Asia.
