From Coins to Car Loans, Small Public Cos. Run Gamut
Orange County’s third tier of public companies is a wild and woolly bunch.
This week’s Business Journal list of OC-based public companies ranks Nos. 101 to 150 by sales and includes a subprime lender, a rare coin and art dealer and an online stock quote service that recently filed for bankruptcy protection.
The companies range from $3.5 million to $38 million in sales for the past four quarters, most ended Dec. 31. Nasdaq is home for most of the companies, though several trade on the low-profile over-the-counter exchange. One trades on the American Stock Exchange.
The list, despite its offbeat flavor, also includes some notable smaller public companies. There’s Lake Forest medical device maker I-Flow Corp. at No. 104, Santa Ana software maker StarBase Corp. at No. 105 and No. 117 Nexell Therapeutics Inc., an Irvine biotechnology company.
In all, revenue growth for the 50 companies stagnated last year. Aggregate sales rose 1% to $789 million vs. the third tier of public companies on last year’s list. Comparing the companies to their own year-ago results, sales growth was 15%. The rise of several new fast-growing companies to make the list this year accounts for the difference.
The companies did manage to improve their bottom lines compared with last year’s bottom 50 companies. This year’s group posted a collective loss of $239.9 million, vs. a loss of $319 million for last year’s group. Compared to themselves, this year’s firms posted a higher loss this year than the $222.9 million they logged in 1999.
Lake Forest-based Aviation Distributors Inc. heads the list at No. 101 and, in some ways, typifies the group.
The airplane parts distributor posted a heady 60% gain in sales to $37.4 million on a widened loss of $2.5 million vs. $1.8 million a year ago. The company also posted a 49% gain in assets to $26.7 million.
But Aviation Distributors has seen its share of trouble. Former chief executive Osamah S. Bakhit was indicted in the fall on 21 federal counts alleging he falsified records and statements to obtain a loan and sell stock. He pleaded not guilty, but the company itself pleaded guilty to similar charges and was fined $750,000. Nevertheless, Aviation Distributors’ stock price has been on a steady rise since summer.
Almost 70% of the bottom-rung companies are old-line businesses, including medical device and drug makers. Ten companies generated revenue from Internet-linked businesses or by developing software.
Some of the companies that saw slower or falling sales include Lake Forest-based L.L. Knickerbocker Inc., a maker of collectable toys and other consumer products. The company ranked No. 84 on last year’s list and fell to No. 106 this year as sales plunged 28% to $30.3 million.
Santa Ana-based SRS Labs Inc., a marketer of enhanced stereo technology, also dropped, from No. 96 last year to No. 108. Its sales were down 22% to $28 million. Revenue at Santa Ana-based NQL Inc. was down 59% to $14.2 million and the Internet software company’s ranking dropped 28 notches to No. 125. A total of 17 of the firms on the list, or a third, had declining sales in 2000.
The companies also curtailed expansion last year, probably a result of slower buying by corporate customers and a tighter credit market. Assets of the 50 companies in the list grew a marginal 3% to $1.9 billion vs. those on last year’s list, meaning that some companies sold non-productive equipment, business units or other holdings.
Struggling Irvine-based subprime auto lender No. 102 Consumer Portfolio Services Inc. saw a 20% reduction in assets to $175.7 million. Still, the company is among the fastest growing by sales with a 143% growth in revenue to $36 million.
No. 110 Newport Beach-based Tangible Asset Galleries Inc., a coin and art dealer, had a 24% fall in assets to $6.8 million but a 27% growth in sales to $25.5 million.
With flat revenue and a lower asset base, the 50 companies reduced their local employment compared with their peers last year. The companies had 3,988 employees in 2000, compared with 4,108 at the companies on last year’s list, a drop of 3%. No. 109 Santa Ana-based Collectors Universe Inc. slashed 20% of its workforce, or 44 jobs, while No. 111 California Coastal Communities Inc. had a 40% fall in the number of employees, or 20 jobs.
The companies, on an average, lost 30 cents for every dollar in sales, compared with 41 cents for the companies on last year’s list. A total of 14 companies had lower rankings this year, while three maintained their positions. Seven of the firms on the list this year are newcomers.
Irvine continues to be the magnet that attracts companies large, medium and small. Sixteen companies on this week’s list are based in Irvine, four in Lake Forest, five in Santa Ana and five in Newport Beach. n
