2007 was a transition year for Orange County’s largest public companies as the expansion of the past few years met the slowed economy of today.
The county’s 75 largest public companies by sales saw a 10.6% rise in revenue last year to $97 billion, according to this week’s Business Journal list. Technology companies Ingram Micro Inc. and Western Digital Corp. drove the gain.
But big losses at real estate companies First American Corp., Standard Pacific Corp. and Impac Mortgage Holdings Inc. spurred a $981 million net loss for the group, versus a profit of $6 billion a year earlier.
The loss is the first for the county’s largest public companies since 2002, when the companies on our list posted $1.2 billion in red ink amid the recession and technology downturn.
Local employment at the 75 companies was down 2% to 37,493 people as mortgage investor Impac and others pared jobs faster than the county as a whole.
Last year, Orange County lost 6,600 jobs, a 0.4% decline from a year earlier, according to the state’s Employment Development Depart-ment.
The list ranks companies by sales, most for the 12 months through Dec. 31.
2007 was a good year for many of the companies, which represent a broad mix of technology, healthcare, real estate, apparel and other businesses.
Nearly 75% of them, or 56, posted higher sales. About two-thirds, or 48 companies, were profitable.
But those that lost money lost big.
No. 13 Irvine-based Impac drove this year’s collective loss with $1.5 billion in red ink for the 12 months through Sept. 30. Much of the loss came from the third quarter’s $1.2 billion loss, which included a $628 million rise in costs to account for losses on loans it owns.
Impac acquires mortgages as investments and for a time made loans itself.
No. 6 Irvine-based Standard Pacific posted a $767 million loss spurred by accounting for a big drop in the value of land and housing projects it owns.
Other losses extended beyond real estate to companies that are restructuring or dealing with their own downturns.
No. 22 Newport Beach-based Conexant Systems Inc. lost $412 million, the fourth most of any company on the list. The chipmaker’s losses mounted as sales fell amid a glut.
The company makes chips for set-top boxes and “all-in-one” printers that fax, scan and copy as well as for DSL high-speed Internet connections.
No. 21 Santa Ana-based Powerwave Technologies Inc. posted a $310 million loss. The maker of equipment for wireless networks saw much of the loss in the fourth quarter, when it posted a $188 million loss driven by write-downs on intangible assets and restructuring charges.
The company has seen losses for the past two years as it has struggled with manufacturing missteps and integration of acquisitions.
No. 8 Quiksilver Inc., a maker of clothes inspired by surfing and skateboarding, lost $146 million from its Rossignol unit, a maker of skis and related gear it bought for $560 million in 2005. Quiksilver is looking to sell the business.
Santa Ana’s Ingram Micro, a distributor of technology products, easily held the No. 1 spot on the list with $35 billion in 2007 sales, up 12% from 2006.
Ingram largely drove the revenue gain accounting for a third of the added sales.
No. 3 Lake Forest-based Western Digital, a maker of disk drives, also saw a big gain, rising 38% to $6.7 billion in revenue.
The company, which has enjoyed steady demand, pricing and supply of drives for the past year, was a standout on the list. Western Digital posted the largest profit of any company at $707 million, which was up 56% from a year earlier.
No. 4 Irvine-based Allergan Inc. saw a 29% rise to $3.9 billion in revenue on strong sales of its medical cosmetics and eye and skin drugs. 2007 was the company’s fist full year with Santa Barbara-based Inamed, a maker of breast implants and other products acquired in 2006 for $3.2 billion.
The list includes newcomers.
No. 32 Brea-based Fremont General Corp. moved its headquarters from Santa Monica in February. The onetime subprime mortgage lender is trying to regroup as a community bank under Chief Executive Stephen Gordon, who was recruited last year and sold Irvine’s Commercial Capital Bancorp to Washington Mutual Inc. for nearly $1 billion in 2006.
Fremont’s entry comes with a caveat: The company’s $462 million in interest income (its equivalent of revenue) is a nine-month figure through Sept. 30. So is Fremont’s $838 million net loss (which, even at nine months, is the second largest loss after Impac’s).
The struggling company hasn’t released fourth-quarter earnings yet and has restated past results, making a reliable 12-month figure hard to come by.
No. 50 Grubb & Ellis Co. debuted on the list after Santa Ana-based real estate investor NNN Realty Advisors Inc. last year bought Chicago-based brokerage Grubb & Ellis and adopted its name and ticker symbol.
No. 63 Seal Beach-based Clean Energy Fuels Corp., a natural gas supplier to taxis and other fleet vehicles that’s backed by T. Boone Pickens, made the list after raising $120 million in a public offering a year ago.
Five companies on last year’s list are gone.
Irvine-based computer maker Gateway Inc., last year’s No. 4, was bought by Taiwan’s Acer Inc. for $710 million in October.
Cooper Cos., a contact lens maker that had been based in Lake Forest and ranked No. 21 last year, shifted its headquarters to Pleasanton in the past year.
Foothill Ranch-based Oakley Inc., a maker of glasses and clothes that ranked No. 23 last year, was bought for $2.1 billion in November by Italy’s Luxottica Group SPA.
Tustin-based MTI Corp., a seller of computer products that ranked No. 58 last year, filed for bankruptcy protection in October and is out of business.
Irvine’s Printronix Inc., a printer maker that ranked No. 65 last year, was bought and taken private by San Francisco private equity firm Vector Capital late last year.
The departures of MTI and Printronix opened up spots for companies from last year’s list of the next 50 public companies ranked by revenue to move into the bottom tier of this year’s top 75.
Our list of the next 50 public companies for 2008 is set to appear in the April 21 issue.
