This year’s crop of Orange County’s middle-tier public companies sure sold a lot more in 2004 than they did a year earlier. The downside: They lost more money.
Revenue at the 50 mid-tier companies grew 22% to $4.2 billion last year, according to this week’s Business Journal list. The companies posted a net loss of $143 million, compared to a profit of $181 million in 2003.
This week’s list covers publicly traded companies ranked 51 to 100 based on sales for the most recent four quarters. The Business Journal produced a list of the 50 biggest public companies in OC in the April 11 issue.
The big story is how much larger in terms of sales the mid-tier crop is this year. A year ago the mid-tier 50 posted sales of $3 billion, 29% less than this year’s group.
The same trend played out at the top 50 public companies here, which produced $97 billion in sales in the past year, versus $84 billion for the 2003 crop.
Several companies posted big losses that helped drive the overall net income decline.
The biggest income decliner: No. 67 Mindspeed Technologies Inc. with a $98 million loss. No. 52 DDi Corp. had a $50 million loss, versus a profit of $150 million a year earlier. No. 62 New Horizons Worldwide Inc. reported a $36 million loss, versus a slight profit a year ago. And No. 85 Acme Communications Inc. posted an $18 million loss compared to a $75 million profit last year.
Employment rose with sales. The mid-tier group reported 8,905 OC workers, up 12% from a year ago. The group employs 24,772 worldwide, up 14% from last year.
The mid-tier group includes a mix of businesses, including a telescope maker, homebuilder, software developers and a company that sells collectible memorabilia such as coins and sports trading cards.
No surprise, but the hot housing market helped boost revenue at the mid-tier companies.
Several check in near the top of the list: No. 54 Commercial Capital Bancorp, which has a big real estate lending operation and posted a 129% sales gain; No. 55 ECC Capital Corp., a subprime lender that had a 106% sales gain; and No. 71 California Coastal Communities Inc., a homebuilder with a 39% sales gain.
At the top of the list is No. 51 Ceradyne Inc., a Costa Mesa maker of ceramics-based products, including armor for the military. Ceradyne reported a 112% sales rise to $215 million for the 12 months ended Dec. 31. That increase moved the company up 15 spots.
The company grew net income from $11.2 million to $27.6 million.
Military action in Iraq and Afghanistan has fueled growth for Ceradyne’s bulletproof vests for soldiers.
Ceradyne’s ceramics also are found in military helicopters and in the seats of Special Forces vehicles. The public outcry over the lack of armor for vehicles helped Ceradyne in that market, company officials said.
The company grew employment 89% to 702 employees in OC, while growing its companywide workforce 186% to 1,509.
Late last year Ceradyne bought Germany’s ESK Ceramics to lessen its reliance on defense spending. ESK makes materials used by Ceradyne as well as other businesses that aren’t in the defense industry.
DDi had a mixed year. The Anaheim-based contract circuit board maker posted a loss of $50 million, compared to a profit of $150.4 million last year. That was in spite of an 18% revenue gain to $189 million.
The company earlier this year said it plans to shutter its European operation after failing to land a credit pact to its liking. Officials said they expect the closure will help earnings. But it could impact sales, since Europe makes up a third of the company’s revenue.
DDi filed for bankruptcy reorganization in 2003 and emerged from Chapter 11 later that year.
The company saw sales pick up in late 2003 and early 2004 as the market for technology products picked up. They slumped late last year.
Commercial Capital represents the class of hot OC growth companies.
Along with its doubling of revenue to $173 million, Commercial Capital grew profits 176% to $56.3 million. It now has one of OC’s bigger market values at more than $1 billion,the second-biggest to No. 53 Nationwide Health Properties Inc. on the list.
The bank grew OC employment 25% to 100 employees, while more than quadrupling its total employment from 110 to 440 workers.
Commercial Capital earlier this year wrapped up a $29 million buy of Los Angeles-based Timcor Exchange Corp. Timcor puts together tax-deferred real estate exchanges using Section 1031 of the tax code.
Last year Commercial Capital bought Hawthorne Financial Corp. for more than $400 million in one of the year’s biggest acquisitions here. And in the past year the bank has opened branches in Malibu, Beverly Hills and Newport Beach.
ECC Capital is a newcomer to the list after an initial public stock offering in February.
The mortgage lender’s 12-month sales were $163.3 million, with profits of $28.3 million. ECC Capital grew OC employment 62% to 580 employees. It has 1,265 workers in all.
The company is one of several subprime lenders based in OC. Others include privately held Ameriquest Capital Corp. of Orange and New Century Financial Corp., a publicly traded company in Irvine.
ECC Capital’s top executives hail from New Century. They started the company in 2002.
A little more than half of the companies on the list posted a bigger profit, swung to a gain or saw their loss narrow. That’s similar to a year ago. And, also like last year, nearly half of the companies on the list saw an improvement with sales.
San Clemente-based Biolase Technology Inc., a medical and dental laser company that ranked No. 78, posted strong sales and profit growth. The maker of what it bills as “no pain” dental lasers boosted its sales 37% to $57.5 million and grew net income from $6.1 million to $14.5 million.
No. 77 IntraLase Corp. was a list debut. Its lasers are used during eye surgery.
The Irvine-based company went public last year. IntraLase grew sales 136% to $60 million in the past year. It trimmed its loss from $11.9 million to $10.2 million.
One company that managed to grow profits despite decreasing sales was No. 93 Collectors Universe Inc., the Newport Beach seller and appraiser of collectibles.
The company saw its sales dip 40% to $30.8 million, but swung to a profit of $3.9 million versus a loss of $1.4 million in 2003.
Seventeen of the 50 mid-tier companies are tech-related. A handful were stellar performers in the past year.
A couple of smaller ones,No. 87 SI Technologies Inc., No. 95 CAM Commerce Solutions Inc. and No. 98 California Software Corp.,posted solid sales and profit gains.
No. 100 Interchange Corp. in Laguna Hills took the bottom spot on the list with a 117% sales jump to $19.1 million. It posted a profit of $1.5 million for the year.
Interchange, which runs a paid Internet search service, had a spectacular IPO last year. Shares jumped 340% in the weeks following the fall offering, but have subsequently sunk to about their IPO price.
Some notable OC names have disappeared from the list.
Veteran Irvine game maker Interplay Entertainment Corp., which ranked No. 91 last year, saw sales dwindle amid a staffing exodus and problems at its French parent, Titus Interactive SA.
Costa Mesa’s Tickets.com Inc., last year’s No. 80, was sold to baseball’s MLB Advanced Media LLC in February. Irvine medical device company Interpore International Inc., last year’s No. 74, was bought by Warsaw, Ind.-based Biomet Inc.
Garden Grove computer component maker Bridge Technology Inc., which ranked No. 71 last year, filed for bankruptcy. And Foothill Ranch consumer lender Onyx Acceptance Corp., last year’s No. 60, was acquired by Capital One Group.
Safeguard Health Enterprises Inc., the Aliso Viejo managed health care provider that was last year’s No. 63, went private in June.
