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Friday, Feb 23, 2024

Life in the Fast Lane

It’s getting a bit harder to be one of Orange County’s fastest-growing public companies. But for those who make the cutoff, the payoff remains sweet.

The 31 fastest-growing companies based here grew sales by 36% to $22.5 billion in the 24 months ended June 30.

They added nearly 15% to local payrolls over the past year, ending the period with about 12,000 people here, a strong showing in a region now at or approaching full employment.

Those are two of the main takeaways from this week’s Business Journal Special Report, which details publicly held businesses with headquarters in OC, ranking them by two-year revenue growth.

The report starts on page 19, the list begins on page 25, and feature stories on a number of the fast growers are included throughout the issue.

The companies are divided into three categories separated by revenue and ranked by percentage gains.

Revenue data for the fast-growing list were compiled for the Business Journal by BNY Mellon Wealth Management.

A cross section of OC’s booming economy is represented on the list; technology companies, healthcare and medical device firms, homebuilders and banks are among the established industries here with multiple entries.

New additions to the local scene also make appearances.

Two companies that went public in the past two years now rank. One notable corporate relocation is represented—hello, Chipotle Mexican Grill Inc., ninth among large companies with 15% sales growth, just making the threshold. Two marijuana-focused upstarts also made the list (see story, page 4).

Fewer Entries

A few signs of a slowing local economy are seen in this year’s edition.

Last year’s fastest-growing list included 43 entries with about $52 billion in sales, a dozen more entries than the latest version. Two years ago, there were 47 companies meeting the 15% sales growth minimum.

Ten companies making the ranking—all either in the small- or midsize categories, and most of them technology- or medical-focused—posted net losses for the last 12-month period.

Twenty out of the 31 companies made both this week’s listing and last year’s edition. Repeat entries include OC’s largest public company by market value, Edwards Lifesciences Corp. (see page 1 story).

Two real estate-related companies that went public last year—Aliso Viejo-based developer Five Point Holdings LLC (NYSE:FPH) and Tustin-based Foundation Building Materials Inc. (NYSE:FBM), a building supply distributor, were omitted from the list.

While their sales growth over the past two years would appear to qualify them, specific sales totals in the 12-month period ending in June 2016 weren’t disclosed by either company in regulatory filings.

Real Estate Worries

For the three homebuilders in the large-company category, recent comments about the overall state of the housing industry suggest this year could be the last their sector is represented on the list for a while, absent any major acquisitions.

“I think as we reflect back, 2017 was probably the peak of the selling season,” said Doug Bauer, chief executive of Irvine-based TRI Pointe Group Inc., last week after his company’s quarterly earnings report.

TRI Pointe (NYSE: TPH) ranked seventh among large companies, posting sales of $3.2 billion for the period ended June 30, up 24% from 2016 levels.

Bauer said he isn’t fazed by the shifting housing market but that he’s planning for new challenges.

Now, “you’re grinding out sales. This is very normal to the homebuilding business,” he said.

“I’m not trying to sugarcoat it. That’s the market we’re in, but we’ve been doing this for 30 years,” said Bauer, who before starting TRI Pointe in 2009 was an executive at Newport Beach-based William Lyon Homes—second among large companies on the fastest-growing list with two-year growth of 62%.

“It’s back to blocking and tackling and the fundamentals of selling homes and building them,” said Bauer, whose firm announced a plan last week to ramp up sales by moving into North Carolina, a new market for it.

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Mark Mueller
Mark Mueller
Mark is the Editor-in-Chief of the Orange County Business Journal, one of the premier regional business newspapers in the country. He’s the fifth person to hold the editor’s position in the paper’s long history. He oversees a staff of about 15 people. The OCBJ is considered a must-read for area business executives. The print edition of the paper is the primary source of local news for most of the Business Journal’s subscribers, which includes most of OC’s major corporate and community players. Mark’s been with the paper since 2005, and long served as the real estate reporter for the paper, breaking hundreds of commercial and residential real estate stories. He took on the editor’s position in 2018.

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