Magazine’s Top 100 Include Financially Troubled Westworld : Three County Firms Listed Among Fastest Growing in U.S.
A trio of Orange County-based companies were ranked in the top half of Inc. magazine’s annual listing of the nation’s 100 fastest-growing small public companies, including one firm that has grown its way into near-bankruptcy.
The critical financial condition of Westworld Community Healthcare, which placed 18th on Inc.’s popular listing, is a clear sign that growth doesn’t always equate with success.
It is true that the rural health-care system operator had revenue of $187 million for the year, a hundred times more than the $1.8 million it reported in its first year of operation.
But it is also true that revenue was far outstripped by costs to Lake Forest-based Westworld of obtaining and operating what in early 1986 was a far-flung system of 38 hospitals and 133 clinics.
The year ended with a massive loss of $126.4 million, a frantic race by company officials to shed as many money-losing facilities as possible and a default on a $2.5-million interest payment due on part of its $65 million in so-called junk bonds used to finance its 15-state expansion binge.
And 1987 began with the company’s founder, chairman and chief executive, Michael Dunn, resigning to appease a lender who made his departure a condition of a $10-million loan to the critically ill company.
Sales Up by 42,520%
However, while growth and success aren’t always synonymous, they’re not strangers, either--just ask the guys at AST Research.
The Irvine-based computer equipment company, founded in 1980 by Safi Qureshey, Thomas Yuen and Albert Wong, placed sixth on Inc.’s list this year with a sales growth from 1982 to 1986 of 42,520%, from $395,000 to $172.3 million.
Profits didn’t rocket quite as much--they never seem to--but were a healthy $27.1 million for 1986, contrasted with a 1982 loss of $37,000.
Along the way, AST (A for Albert, S for Safi and T for Thomas) has had some rocky times, including a spate of layoffs just last year after IBM entered the computer peripherals market and cut off a major source of AST sales.
But the company hasn’t suffered at the hands of management: When IBM became a competitor, AST already was involved in developing both a line of peripheral equipment for Apple’s newest Macintosh models and, perhaps most important for the company’s future, its own line of IBM-compatible personal computers.
And earlier this year, declaring that AST was no longer a brash young upstart and that it needed some service-industry executives on its board of directors and some seasoned consumer products, two venture capitalists who had helped guide the company since its beginning voluntarily stepped down to make room for new board members with the industrial experience and expertise AST needs to continue growing.
The third Orange County company on Inc.’s list--in 44th place--is American Businessphones in Irvine--a distributor and servicer of business telephone systems.
The company, founded in 1980, had sales of $23.9 million in 1986, up 3,187% from $727,000 in 1982, according to Inc. Profits last year totaled $603,000, up from $2,000 in 1982.
In all, 28 companies from California made Inc.’s 1987 list. The Silicon Valley accounted for 13 of them, followed by Los Angeles County with 7 and Orange County with 3.
New York state contributed 11 companies to the list, Massachusetts 9 and Texas 8.
And, for the first time in the nine years that the magazine has prepared the top 100 list, fewer than half the companies on it actually made something--the rest, 55 firms, either sold a service or sold someone else’s goods.
The Orange County trio was quite reflective of the growing trend toward a service-based economy. Only one of the companies--AST--makes a product. The other two sell services and distribute goods for other manufacturers.
ORANGE COUNTY’S ENTRIES IN INC. MAGAZINE RANKINGS AST Research, Irvine. Enhancement products for personal computers. Rank 6 1986 Sales $172,299 1982 Sales 395 1986 Net Income $27,177 1982 Net Loss $(37) 1986 Employees 985 1982 Employees 34 Westworld Community HealthCare, Lake Forest. Rural health care services. Rank 18 1986 Sales 178,000 1982 Sales 1,797 1986 Net Loss $(100,000) 1982 Net Income 6 1986 Employees 3,500 1982 Employees 1 American Businessphones, Irvine Business telephone systems Rank 44 1986 Sales $28,897 1982 Sales $727 1986 Net Income $557 1982 Net Income $60 1986 Employees 240 1982 Employees 13 Note: Sales and income (loss) figures in thousand.
