Orange County’s 60 largest private companies posted a 15% revenue gain to $36 billion last year while holding local employment steady and adding people elsewhere, according to this week’s Business Journal list.
The trend echoes that of the county’s largest publicly traded companies, which also saw a 15% sales gain last year and didn’t do much local hiring.
The 50 largest public companies, which we listed April 11, counted combined 2004 sales of $97 billion.
This is the second straight year of growth for the county’s largest private companies. The group on last year’s list saw a 16% gain in 2003 from a year earlier. But this year’s group is notably larger than last year’s, which counted $31 million in sales.
The private companies, a diverse group of real estate businesses, auto dealers, hotel owners and others, saw widespread sales gains last year.
The most significant came at No. 2 Ameriquest Capital Corp., an Orange-based holding company for a handful of subprime mortgage units.
Like some others, Ameriquest declined to provide revenue figures. Based on industry reports and comparisons to rivals, the Business Journal conservatively pegs Ameriquest’s 2004 sales at $2.5 billion, up an estimated 67% from 2003.
Ameriquest’s billion-dollar gain was the largest single piece of the $5 billion more in sales this year versus last at the companies.
A sampling of the gains: No. 3 Kingston Technology Co., a Fountain Valley maker of computer memory products, saw 2004 sales rise 33% to $2.4 billion; No. 4 The Irvine Company, up an estimated 10% to $2.2 billion; and No. 6 GeoLogistics Corp., a Santa Ana transportation services company that’s filed to go public, up 14% to $1.6 billion.
One company, No. 10 Newport Beach-based WL Homes LLC, the parent of homebuilder John Laing Homes, passed the billion-dollar sales mark. Thanks to the still-simmering housing market, WL Homes saw a 40% gain to $1 billion in sales last year, up from $744 million in 2003.
Another homebuilder, No. 14 Costa Mesa-based Warmington Group, more than doubled revenue to $634 million last year.
Thirty-six of the companies, including the top 12, saw higher sales last year, including some gains estimated by the Business Journal. Eight had lower revenue. A percentage change estimate for the rest, 16 companies, couldn’t be made.
The list ranks the largest private companies based here by 2004 sales or for the nearest 12-month period. The list includes companies owned by individuals or investor groups and excludes subsidiaries.
Because the companies are privately held, the list includes several estimates based on numbers from industry sources and databases. (Taking out estimates, the group grew sales at a 14% clip last year.)
The list is as intriguing for who’s on it as it is for the trends it reveals. The private companies list is one of the more difficult to produce and includes several newcomers and revisions to those on last year’s list.
Newport Beach-based Pacific Life Insurance Co. again tops our list.
The life insurer had $4.1 million in revenue last year, about 60% more than our estimate for Ameriquest.
(Some speculate Ameriquest’s revenue could be much higher, even more than $4 billion. But in estimating a company’s size, the Business Journal opts for more conservative approximations.)
Pacific Life’s revenue grew by 9% from 2003, after a revision to account for the recent sale of its group health insurance business to Cypress-based PacifiCare Health Systems Inc.
The sale and another move impacted Pacific Life’s worker count.
Locally, the company is down 21% to 2,141 workers. Companywide, Pacific Life is off 22% to 3,125 people.
About 640 workers shifted to PacifiCare, including 360 locally.
Pacific Life also saw some people leave in the runup to the sale, a spokesman said.
Pacific Life said it also has shifted some jobs to a regional business center in Nebraska (see related story, this page).
In all, the 60 companies saw local employment grow by 2%, or 497 people, for a total of 31,807.
Employment grew at a quicker pace elsewhere, with total employment at the companies up 4% to 122,537.
The list includes a handful of newcomers, including some that have filed to go public but haven’t yet done so: No. 31 Aliso Viejo-based Buy.com Inc.; No. 42 Costa Mesa-based Anna’s Linen Co.; and No. 58 Costa Mesa-based Volcom Inc.
Other newcomers include Irvine’s Traveland USA, an operator of a recreational vehicle dealership and park, at No. 30 with $300 million in 2004 sales, and No. 36 Royalty Carpet Mills Inc., at an estimated $260 million in sales last year.
One of last year’s larger companies, San Clemente-based Sunstone Hotel Investors Inc., which ranked No. 13, is off this year’s list after doing OC’s largest public offering of 2004. The hotel owner raised $413 million.
Others dropping off from last year’s list include Costa Mesa-based White Cap Construction Supply Inc., which was bought by Home Depot Inc., and SWH Corp. of Tustin, operator of Mimi’s Cafe, which was bought by Bob Evans Farms Inc.
Pacific Life Policy
You may have noticed we still have Pacific Life Insurance Co. as the largest private company in Orange County,not Omaha, Neb.
The life insurer made news earlier this month when it applied with state regulators to move its head office to Omaha. The company is opening a regional business center there, with some work,about 60 jobs,moving from OC to Nebraska.
Pacific Life had been looking to set up a facility in the central part of the country, and Nebraska turned out to be “convenient,” a spokesman said.
But, beyond that, everything else stays here, he said. Chief Executive Tom Sutton and the rest of Pacific Life’s top brass are staying put in Newport Center.
The move amounts to little more than a company being incorporated in Delaware or Nevada while having its core operations somewhere else.
As such, the Business Journal decided to keep Pacific Life as our largest private company.
There is a reason for the move: premium taxes. California’s levy on premiums is higher than the national average. Nebraska’s is below the average.
But the real driver is what’s dubbed retaliatory taxes, which other states levy on Pacific Life. States can charge Pacific Life their prevailing rate or opt to tax the company at California’s higher rate.
California regulators are set to weigh in on whether the move is harmful to Pacific Life’s policyholders, an unlikely scenario.
From there, Pacific Life expects the change,largely on paper,to take place during the summer.
,Michael Lyster
