SALES UP, PROFITS SOAR; 5 NEW FIRMS MUSCLE INTO TOP 50
OK, the volatile stock market has public companies walking on eggshells right now, but a look back over the past year certainly gives Orange County’s biggest corporations reason to strut.
The entries on this week’s list of the county’s 50 largest public companies posted their highest-ever worldwide sales and profits last year.
The Business Journal list, which ranks the companies based on their 1999 revenue, reflects the dramatic effect that the high-tech industry is having on the local economy. Of the 11 newcomers to this year’s list, five are in high tech. (Another five are related in one way or another to the healthcare industry.)
Moreover, the five fastest-growing companies percentage-wise in sales are all from the high-tech sector. In terms of market cap, five of the six largest companies are high tech.
(The Business Journal will follow this list with two more in subsequent weeks, capturing all of the more than 200 public companies that are based in Orange County.)
Three of the five largest companies growing the fastest percentage-wise in assets are high-tech firms. Four of the five fastest-growing in company-wide employment are in high tech, as are three of the five fastest-growing in OC employment. Four of the five companies posting the biggest gains in rankings on the list are high tech.
Revenue Up
Overall, when compared with last year’s 50 largest firms, this year’s list of companies saw revenue grow 8% to $105.4 billion, the highest in the 10-year history of the Business Journal list. But last year’s list included Rockwell International, which moved to Milwaukee with its $6.7 billion in revenue. If the total 1999 revenue of this year’s 50 largest companies is compared to their own 1998 total, the growth was an even more impressive 14%.
More importantly, the bottom line, list-to-list, grew 339% to $2 billion, also a Business Journal list record. When the current companies are compared with their own year-ago numbers, the net income growth is 263%.
HQs Heading South
The trend of corporate power shifting from the older, northern cities of the county to the newer, southern communities was evident on this year’s list.
Irvine solidified its standing as Orange County’s favorite corporate city. It is home to 17 of the companies on the list of 50, up from 14 in 1999. But here comes Aliso Viejo: It was home of only one company on last year’s list. This year it’s home to five. Newport Beach again ranked second, with nine headquarters, the same as last year. Costa Mesa dropped from seven HQs to four. Santa Ana also has four this year, followed by Orange with three, Anaheim, Fullerton and Foothill Ranch with two each, and Tustin and Huntington Beach with one each.
Beleaguered computer product distributor Ingram Micro Inc. of Santa Ana repeated as the county’s biggest corporation in sales, registering $28.1 billion, a 27% increase over 1998.
Also maintaining their rankings were No. 2 Bergen Brunswig Corp. of Orange, (up 21% to $22.2 billion); No. 3 Fluor Corp. of Aliso Viejo (down 11% to $12 billion); and No. 4 PacifiCare Health Systems of Santa Ana (up 5% to $10 billion).
But Irvine-based Fidelity National Financial Inc. climbed from No. 11 to No. 5 on the strength of its acquisition of Chicago Title Corp., for which pro forma 1999 joint revenues of $3.4 billion are counted here.
After the No. 13 spot, sales drop below the billion-dollar mark. The difference in sales between the largest and smallest companies is dramatic. For example, No. 50 Nationwide Health Properties Inc. reported $163 million in sales, just 0.6% of Ingram Micro’s total sales.
Three companies that went public this year debuted among the 20 largest firms: No. 16 Edwards Lifesciences Corp. of Irvine, No. 17 eMachines Inc. of Irvine and No. 19 buy.com Inc. of Aliso Viejo.
Also new on the list are No. 22 Prandium Inc., which was formerly known as Koo Koo Roo Enterprises and which moved its headquarters from Los Angeles to Irvine; and No. 37 Water Pik Technologies Inc., which was spun off in November from Allegheny Technologies.
Getting Ahead
Firms that posted sharp climbs up the list include: Powerwave Technologies Inc. of Irvine, up 39 spots to No. 33; Epicor Software Corp. of Irvine, up 28 spots to No. 35; QLogic Corp. of Aliso Viejo, up 22 spots to No. 48; WFS Financial Inc. of Irvine, up 16 spaces to No. 32; and Broadcom Corp. of Irvine, up 12 notches to No. 25.
Those falling the most included: PairGain Technologies of Tustin, down 13 spots to No. 41; MTI Technology Corp. of Anaheim, down five spots to No. 43; and Orange-based Wynn’s International Inc., down five spots to No. 29.
Amplicon, a company that leases computer equipment, was ranked No. 31 last year but dropped to No. 76 this year because it decided to restate its revenue in a different manner.
Ten companies dropped off the list because they moved, went private or were acquired: Rockwell, Furon Co., St. John Knits Inc., White Cap Industries Inc., Data Processing Resources Corp., Irvine Apartment Communities, Alliance Imaging Inc., Kaynar, Centris Group Inc., and Western Bancorp.
PC retailer eMachines reported the most dramatic increase in sales, up 1,297% to $814 million.
Other companies with sharp increases in sales included: buy.com Inc., up 375% to $597 million; Powerwave Technologies, up 192% to $293 million; Broadcom Corp., up 139% to $518 million; and Epicor Software, up 111% to $258 million;
The biggest percentage decline in revenue occurred at telecommunications equipment manufacturer PairGain Technologies, down 21% to $225 million.
Other companies posting declines included: Varco International Inc. of Orange, down 20% to $590 million; Western Digital Corp. of Irvine, down 18% to $2.3 billion; and ICN Pharmaceuticals of Costa Mesa, down 11% to $747 million.
Fluor posted the biggest dollar decline, as sales dropped $1.5 billion. The company said it was focusing on higher-margin projects.
The record amount of profits came after several of the large companies posted losses in 1998 because of one-time charges. Many of these companies came back to post nice gains in 1999, including: Conexant Systems of Newport Beach, from a $340 million loss in 1998 to a $122 million profit in 1999; Allergan Inc. of Irvine, from a $90 million loss to a $188 million profit in 1999; Apria Healthcare Group of Costa Mesa, from a $208 million loss to a $204 million gain; and ICN Pharmaceuticals, from a $352 million loss to a $118 million profit.
Other companies reporting large percentage increases included: Costa Mesa-based FileNet Corp., which saw profits increase 1,958%, from less than $1 million in 1998 to $19.7 million in 1999.
Bergen Brunswig’s earnings were up 494% to $57 million; Broadcom’s were up 239% to $83 million; Fullerton-based Beckman Coulter Inc. increased earnings 216% to $106 million; and Aliso Viejo-based QLogic Corp. was up 130% to $49 million.
Local Employment Up
The 50 largest firms grew their combined OC workforce 4% to 40,530 countywide in the past year. But compared with last year’s 50 largest, the employment figure declined 3%, reflecting that 10 companies that dropped off the list because they went private or moved their headquarters elsewhere. These 10 companies have 6,500 employees that are no longer counted on the list, the biggest of which was St. John Knits with 2,851 employees.
The companies on hiring sprees in Orange County included: Powerwave Technologies, up 211% to 1,400 employees; eMachines, up 168% to 67 employees; buy.com, up 125% to 253 employees; Pacific Sunwear California Inc. of Anaheim, up 71% to 270; Sicor Inc. of Irvine, up 49% to 385 employees; and CKE Restaurants Inc. of Anaheim, up 45% to 1,213 employees.
While the 50 largest firms are relatively large in terms of their worldwide sales when compared to other companies in Orange County, the 50 largest firms employ a relatively small 3% of the county’s workforce of 1.364 million (as of February).
The companies declining in OC employees included: Prandium, down 34% to 1,207; Fidelity National Financial, down 17% to 570 employees; Fluor, down 14% to 2,150 employees; and Western Digital, down 13% to 700.
This year’s 50 largest firms increased their worldwide employee count 3% to 224,000. But compared with last year’s list, the total fell 9%.
The companies growing the most company-wide include: eMachines, up 480% to 145 employees; Powerwave Technologies, up 200% to 1,500; buy.com, up 150% to 245 employees; Broadcom, up 140% to 1,117; Bergen Brunswig, up 108% to 13,000; Wynn’s International, up 108% to 4,380; and CKE Restaurants, up 65% to 14,829.
Among those cutting back company-wide were: Prandium, down 34% to 12,333; Varco International, down 32% to 1,800; Western Digital, down 25% to 9,000; Pacific Sunwear California, down 21% to 2,498 employees; and Fidelity National Financial, down 19% to 6,000.
This year’s companies grew their assets 21% to $68.5 billion. Compared with last year’s list, total assets increased 4%, with the smaller gain attributable to several large-asset firms like Rockwell dropping from the list.
The companies on a buying spree included: eMachines, up 452% to $332 million in assets; buy.com, up 346% to $120 million in assets; Broadcom, up 147% to $585 million in assets; Health Care Property Investors Inc. of Newport Beach, up 82% to $2.5 billion; Conexant Systems, up 59% to $2 billion in assets; and Bergen Brunswig, up 57% to $5.7 billion in assets. n
