Sales Off 6% at Small Pubcos
By ANDREW SIMONS
It was another year of musical chairs for Orange County’s third tier public companies.
A case study: Acacia Research Corp.
Last year the technology patent holding company moved to Newport Beach from Pasadena and wound up near the top of the Business Journal’s list of the smallest public companies, which ranks the No. 101 through No. 150 companies by revenue for their most recently reported 12-month period.
But by virtue of a 96% decline in 2002 revenue to $880,000 from its V-chip technology for TV sets, Acacia ranked No. 146 on this week’s list, down 44 spots from last year.
With Acacia aggressively going after new license fees from Web sites that use its digital media transmission patents, the company could easily be back on top next year.
Such is the lot for the third tier public companies, which often see big year-to-year swings in revenue and profits.
This week’s list is the last in a three-part series on public companies. Lists ranking the No. 1 through No. 50 public companies, and another for those ranked No. 51 to No. 100, ran in April.
Revenue at the No. 101 through No. 150 companies contracted last year.
Collectively, sales declined 6% to $525.7 million for the 50 companies on this year’s list. Revenue for the 2003 crop was down a smaller 4% when compared to the 50 companies on last year’s list.
Meanwhile, the net loss for the companies on this year’s list narrowed to $309.6 million, vs. a loss of $368 million a year ago.
Thirty of the 50 companies posted higher income or narrower losses, with year-ago data unavailable on one company. The others saw slimmer profits or bigger losses.
The bottom tier companies are a diverse lot.
There’s No. 148 San Clemente-based Petrominerals Corp., which explores and identifies oil reserves and is a newcomer to the list. Its sales declined by 11% to $570,000 and its loss grew six-fold to $1.1 million.
Then there’s No. 125 Irvine-based Prolong International Corp., a maker of car care lubricants, which saw a 26% decline in revenue to $10.1 million and a narrower loss of $400,000, vs. $1 million a year earlier.
The companies range from a low revenue of $400,000 at No. 150 Tustin-based AMDL Inc. to a high of $28.6 million for No. 101 Irvine-based Endocare Inc.
Twenty-two of the 50 companies trade on the Nasdaq exchange, four trade on Amex, 19 trade on the lower profile over-the-counter market and five,including Endocare,on the Pink Sheets.
Many third tier companies are dealing with issues.
Take Endocare. The Irvine medical device maker, which saw its stock price tank after it delayed releasing its third-quarter earnings report in the fall, is the subject of class action shareholder lawsuits and investigations by the Securities and Exchange Commission and the Department of Justice over its accounting practices.
While the list has some fleeting names, there are a number of solid companies represented.
Among them is No. 102 Costa Mesa-based Pacific Mercantile Bancorp, which moved up from the No. 122 position.
The bank grew revenue 55% to $24.4 million, vs. a year earlier, though net income fell 17% to $1.5 million. Pacific Mercantile is the largest commercial bank, by deposits, based in OC.
No. 108 Garden Grove-based Hycor Biomedical Inc. is another solid performer. The maker of medical and diagnostic devices moved three spots higher with a 7% sales gain to $18.6 million. Hycor posted a $1.3 million net profit, vs. a $4,000 profit a year ago.
Five companies swung to a profit in the most recent period.
They included No. 103 Aliso Viejo-based medical device maker Medstone International Inc., which posted a $300,000 profit, vs. a $660,000 loss a year earlier.
Also turning the corner was No. 107 Santa Ana-based SRS Labs Inc., an audio technology maker. The company posted an $800,000 profit in 2002, vs. a $3.9 million loss a year earlier. Sales at SRS rose 23% to $19 million. That was good enough to move the company up 10 spots on the list.
Some companies gained from higher spending on defense.
No. 109 Irvine Sensors Corp., which makes high-density microelectronics, has received an influx of government orders. The company saw sales grow 61% to $18 million last year, with a loss narrowing to $4.5 million, vs. $11.6 million in 2001.
Amid the slow economy, the companies on this week’s list lowered headcounts in OC and companywide. Collectively, the companies that reported worker counts cut OC employment by 6% to 2,445, with companywide staffs taking a 5% hit to 3,608.
Nineteen companies on the list were tech businesses,the single biggest grouping. Healthcare, including biomedical and device companies, was the second biggest group with 16.
As in years past, many of the companies call Irvine home,14 of them on this year’s list. Tustin and Newport Beach had four each, with Aliso Viejo and Costa Mesa each hosting three.
This year’s list saw some topsy-turvy action. Thirty-four companies gained in ranking or were newcomers to the list, 13 fell and three stayed the same.
List departures included: former No. 108 Newport Beach-based asbestos removal company Metaclad Corp., which moved to Minneapolis; last year’s No. 119 Santa Ana-based NQL Inc., which moved to Teterboro, N.J. in 2001 and subsequently declared bankruptcy; and No. 138 Irvine-based Accesspoint Corp., which is now based in Marina del Rey.
