Orange County’s top fast-growing private companies saw sales rise 34% in the past two years to $19.7 billion, according to this week’s Business Journal list.
The list, our third annual of fast-growing private companies, ranks 100 businesses by revenue growth for the 12 months through June from the same period in 2007.
The growth rate is impressive, particularly given the dramatic economic slowdown of the past year or so.
Some companies on the list have posted eye-catching growth by targeting niches that do well in slower times, including refurbished electronics, investing in foreclosed homes and providing debt reduction services.
Still, the companies as a whole saw an inevitable slowdown in growth from our prior lists.
Last year at this time, the 100 companies on our list grew at a 40% two-year clip. That was down from the 50% growth rate posted by the companies on our debut list in 2007.
Some companies on this year’s list actually saw sales for the most recent 12 months go flat or decline from the prior 12-month period.
They still qualified as their most recent 12-month sales stayed above where they were two years ago.
The weak economy crimped growth for many. Others saw a natural slowdown as they got bigger, making it harder to produce three- or four-digit percentage growth.
As in years past, smaller companies more apt to post big revenue gains stand out on the list. They include technology companies, marketing firms, medical device makers and Internet service companies.
But the list goes beyond that to represent a cross section of the county’s economy, with several big and midsize companies familiar to many readers.
Yet what makes the fast-growing private company list unique is that it is something of a spectacle, with several quirky, offbeat companies.
Among them are a provider of healthcare to California prisoners and a maker of a wall hanging hook that advertises a monkey using the product.
The colorful companies make the list what it is—a fun look at fast-growing, entrepreneurial companies that have found sometimes unconventional niches.
Heavy Turnover
Nearly half of the companies on this year’s list are newcomers, a high rate of fluctuation that’s unheard of on our other lists but isn’t unusual here.
It’s a reflection of the dynamic nature of fast-growing private companies, where there’s always a new crop waiting to spring up and displace anyone whose growth hasn’t kept pace.
This year’s top 10 is almost entirely new with nine companies debuting and only one, No. 2 Mission Viejo-based Stone Equity Group LLC, repeating.
Stone Equity, which works with investors to buy foreclosed homes, actually moved up from No. 5 on last year’s list with a nearly 3,000% growth rate.
Topping the list this year is Mission Viejo-based Pacific Pharmacy Group with growth of nearly 7,000% and yearly sales of $29 million.
The company has grown by buying independent pharmacies and consolidating them under centralized operations.
Pacific owns nine pharmacies in Southern California, including one in Garden Grove, Orange and its latest location, the Newport Lido Pharmacy in Newport Beach near Hoag Memorial Hospital Presbyterian.
The company’s growth rate is more than twice that of No. 2 Stone Equity.
No. 3 Debtmerica LLC of Santa Ana was the only other company to post a four-digit percentage increase, rising 1,500% on yearly sales of $17 million.
Sign of the Times
Like Stone Equity and its focus on foreclosed homes, Debtmerica is a sign of the times. It helps borrowers work with creditors to reduce balances on credit cards and other debt.
“The important thing about our program is that it’s not a get out of jail free card—it’s for people who are in tough shape who say, ‘I’m never going to get out of this hole,’” cofounder and Chief Executive Jesse E. Torres said.
Rounding out the top five are No. 4 Most Brand Development + Advertising, an Aliso Viejo advertising agency with two-year growth of 790%, and No. 5 Networks in Motion Inc., an Aliso Viejo wireless software maker with growth of 717%.
Last year’s No. 1, Newport Beach-based video game store franchisor Play N Trade Franchise Inc., dropped to No. 83 this year.
The company posted an impressive 19% growth rate on yearly sales of $7 million. But that was a far cry from its nearly 2,000% growth at this time a year ago.
Except for Stone Equity, all of the companies from last year’s top 10 appear elsewhere on this year’s list.
Orange-based American Correctional Solutions, last year’s No. 2, now ranks No. 12 with growth of 273%.
Irvine’s Earthbound Media Group, a marketing company that ranked No. 3 in 2008, now comes in at No. 16 with growth of nearly 250%.
Flat-screen TV seller Vizio Inc. of Irvine, last year’s No. 4, now ranks No. 49 with growth of 52%—an impressive feat given it is one of the biggest companies on the list with yearly sales of $2 billion.
Costa Mesa-based Pacific Building Care Inc. was last year’s No. 6 and now is No. 38.
Costa Mesa’s Lead Tracking Solutions now is No. 13 from No. 7.
BandCon, also of Costa Mesa, now is No. 63 from No. 8.
Irvine-based Neudesic LLC now is No. 41 down from No. 9.
And Blytheco LLC, last year’s No. 10, now is No. 21.
About the List
Our list includes OC-based companies owned by an individual, a group of people, families, venture capitalists, private equity firms or other investors. Companies had to have sales of at least $300,000 for the 12 months through June 2007 to be considered.
Publicly traded companies and subsidiaries weren’t considered. Neither were locally owned and run offices of national service firms.
The list’s terminology can be a little confusing. We technically measure companies based on two years of growth—revenue for the 12 months through June versus the same period through June 2007. But that actually means we look at three years’ worth of revenue: for the 12 months through June 2007, June 2008 and June of this year.
To come up with the list, the Business Journal solicited entries through our paper and on our Web site. More than half of the companies on the list submitted revenue numbers for consideration.
The rest we culled from our other relevant lists—private companies, minority-owned businesses, women-owned businesses and others—to get names we knew should be on there.
Figures for some companies are Business Journal estimates in cases where we have good reason to believe they’ve seen growth.
Like all our lists, fast-growing private companies is a work in progress. We’ve surely missed some undiscovered companies that would make our list.
We look forward to broadening our ranking with new companies next year.
