THE TIMES 100 : THE BEST PERFORMING COMPANIES IN CALIFORNIA : THE BOTTOM LINE : Best of the Best : High-Tech Firms Lead This Year’s Profitability List

High-technology companies established a firm grip on The Times 100 list for 1988, reflecting a year of torrid growth and spectacular performance--one that probably won’t be repeated given the uncertainties facing high tech this year.

Chips & Technologies, a small San Jose chip maker, shot to the top of the chart with a bullet in its first year of eligibility, with a two-year average return on shareholders’ equity of 66.5%. That means that for every dollar shareholders invested, the company earned 66.5 cents in profit.

It supplanted Franklin Resources, a San Mateo mutual fund manager that topped last year’s chart with a stellar 80% average two-year return on equity. This year, Franklin moved to second place, with a 63.4% ROE.

In third and fourth places were Adobe Systems, a small Silicon Valley company that created a niche for itself in desktop publishing software, and Brajdas, a Woodland Hills distributor of electronic parts.

The Times 100 is the result of a computer analysis of publicly traded companies with headquarters in California. Surveyed were 921 companies, ranging from the familiar to the obscure.

Average return on equity over a two-year period was the barometer used for financial performance. Expressed in percentage terms, return on equity measures net income minus preferred stock dividends divided by average common shareholders’ equity.

The figure measures profitability and how managers are doing with stockholders’ money. A return on equity of 20% means that the firm earned 20 cents in profit for every dollar the shareholders have invested.

To be eligible, companies also had to have at least $50 million in sales in 1988. They had to have been public for at least three years and profitable the past two. Companies with more than twice as much debt as equity were excluded because ROE is not regarded as an accurate measure of performance for highly leveraged concerns.

Of 45 companies new to the list, 22 had recent public stock offerings and became eligible for inclusion in 1988. Others just met the criterion of $50 million in sales, whereas companies such as Intel and Silicon Systems, both semiconductor makers, engineered recoveries in their bottom lines.

As a group, The Times 100 proved to be “a very profitable bunch” in 1988, said Kevin Colosimo, vice president at MZ Group, the San Francisco business analysis and database publishing firm that compiled the list.

The cutoff for two-year average ROE this time was 15.3%, up from 13% last year. That meant that some big companies with strong performances--including Pacific Telesis, Pacific Enterprises and Litton Industries--simply got beat out by fairly young companies with high profitability. In addition, five companies became ineligible because they were acquired.

Those moving up fast on the profitability chart were a varied lot, including a computer company named Amdahl, a casino firm known as Caesars New Jersey and Zenith National Insurance, no relation to Zenith Radio.

Then there were Atlantic Richfield, the oil company well-known to consumers as Arco, and Raychem Corp, a low-visibility manufacturer of plastic and polymer products for the aerospace, auto, construction, electronics and telecommunications industries. Arden Group, a company with an unlikely mix of supermarkets and telecommunications, also charged ahead.

The year was a downer for several financial service companies affected by rising interest rates, including First American Financial Corp., which writes title insurance; Countrywide Credit Industries, a mortgage banker, and Downey Savings & Loan. Rexon, a maker of tape drives for personal computers, plummeted from second place last year to 64th.

Moving up the most was Amdahl, which jumped 32 spots to No. 35. Its return on equity averaged more than 23% for 1987 and 1988.

Based in Sunnyvale, Amdahl makes computers compatible with IBM hardware and software. Operating income at Amdahl, of which Fujitsu owns 43%, soared to nearly $214 million in 1988 from $142 million in 1987.

Long regarded as a company that lived off the scraps of IBM, Amdahl jolted the computer industry last year with a new product line that forced Big Blue to react with new and better computers.

Arden Group, with offices in Compton and Beverly Hills, surged into the 23rd spot, up from 45 last year, with a 34% improvement in earnings to $10.2 million.

The holding company operates supermarkets under the names Mayfair and Gelson’s. But it also derives a good portion of revenue from a 100-year-old subsidiary that now distributes and services facsimile machines and has benefited from the growth in speedy interoffice communications.

Caesars New Jersey jumped 12 places on the list to No. 50 with an ROE of 20% and 1988 earnings of $32.5 million. The gambling company owns Caesars Atlantic City, a casino in the middle of the Atlantic City Boardwalk. The firm is 87% owned by Caesars World, which owns Caesars Palace in Las Vegas.

Once the site of a Howard Johnson’s hotel, Caesars Atlantic City opened in 1979 after the new owners invested about $125 million to convert the lodge into a behemoth gambling center. It now has more than 600 rooms, a 60,000-square-foot casino and 10 restaurants.

Raychem Corp., though it posted strong earnings during 1988 and had a two-year average ROE of nearly 17%, has not been getting much respect on Wall Street.

Investors, a demanding lot, knocked down the price of Raychem’s stock more than $20 a share from $54 last summer. The stock price fell four points one day in early January after the company announced that quarterly earnings would not live up to year-earlier levels.

Raychem’s success is based on the development of technology for commercial use, but that kind of research costs a lot of money. One reason that earnings are expected to be off in 1989 is that the company has invested heavily in research on the use of fiber optics to replace copper in local telephone cables.

For a company in the nuts-and-bolts business of insurance, Zenith National Insurance certainly has lots of well-connected people associated with it.

To begin with, the company was bought 12 years ago by a group of private investors led by Eugene V. (Gene) Klein, former owner of the San Diego Chargers, and Harvey L. Silbert, a Los Angeles attorney.

The present board includes Saul P. Steinberg, a corporate raider whose Reliance Insurance owns more than 30% of Zenith’s stock, and Max M. Kampelman, a former U.S. arms negotiator.

The lion’s share of Zenith National’s business is workers’ compensation insurance, but it also writes insurance policies for homeowners, drivers and farmers. The company insures about 135,000 vehicles through its CalFarm Insurance subsidiary.

When Klein, Silbert and the other private investors bought the company in 1977, it was making about $1 million, according to Chairman Stanley R. Zax, a former Washington lawyer. Operating income during 1988 exceeded $46 million, giving the Woodland Hills-based firm a two-year ROE of 17.1% and propelling it to No. 74 on this year’s Times 100 list from No. 94 last year.

On the minus side, Cherokee Group, a Sunland manufacturer of casual sportswear for women, fell 66 spots to 86. The company was affected by a nationwide slump in clothing sales as well as disputes among top executives and costs associated with a planned leveraged buyout. Earnings for 1988 were reduced by $4.3 million in costs related to the buyout.

Tape drive maker Rexon, which placed second on last year’s list, sank like a stone to 64th. The reduced ROE resulted because the company had a much larger and more typical equity base in 1988 than the year before. Colosimo, at MZ Group, noted that the company’s ranking last year was an aberration.

Countrywide Credit Industries, a Pasadena mortgage banking firm, had the dubious distinction of taking the steepest plunge, dropping 86 spots to No. 96 because of rising interest rates and competition from savings and loans.

“I’m a very large stockholder in the company, so I’m very sorry ROE has gone down,” said David S. Loeb, Countrywide’s chairman and president. “Our profit margins were . . . driven right down to the bone by” competition. But, he added, “the demise of a lot of our S&L; competition . . . will certainly help us going forward.”

THE TIMES 100 Companies ranked by income as a percentage of average common equity over two years. Rank: 1 ’87 Rank: Company: Chips & Technologies Inc. Industry: Semiconductors City: San Jose 2-year average return on equity: 66.5 1988 sales ($ millions): 141.5 1988 income ($ millions): 22.1 % change in income from 1987: 71 Rank: 2 ’87 Rank: 1 Company: Franklin Resources Inc. Industry: Investment Services City: San Mateo 2-year average return on equity: 63.4 1988 sales ($ millions): 202.7 1988 income ($ millions): 66.3 % change in income from 1987: 13 Rank: 3 ’87 Rank: Company: Adobe Systems Inc. Industry: Computer Software City: Mountain View 2-year average return on equity: 55.2 1988 sales ($ millions): 83.5 1988 income ($ millions): 21.1 % change in income from 1987: 135 Rank: 4 ’87 Rank: Company: Brajdas Corp.* Industry: Wholesale Electronics City: Woodland Hills 2-year average return on equity: 48.0 1988 sales ($ millions): 61.4 1988 income ($ millions): 2.3 % change in income from 1987: 25 Rank: 5 ’87 Rank: 3 Company: Neutrogena Corp. Industry: Soaps & Skin Products City: Los Angeles 2-year average return on equity: 46.8 1988 sales ($ millions): 178.9 1988 income ($ millions): 23.0 % change in income from 1987: 55 Rank: 6 ’87 Rank: Company: L.A. Gear Inc. Industry: Athletic & Leisure Footwear City: Los Angeles 2-year average return on equity: 45.7 1988 sales ($ millions): 223.7 1988 income ($ millions): 22.0 % change in income from 1987: 404 Rank: 7 ’87 Rank: Company: Aaron Spelling Productions Industry: Motion Picture Production City: Los Angeles 2-year average return on equity: 45.6 1988 sales ($ millions): 119.5 1988 income ($ millions): 19.3 % change in income from 1987: (10) Rank: 8 ’87 Rank: Company: Boole & Babbage Inc. Industry: Computer Software City: Sunnyvale 2-year average return on equity: 44.0 1988 sales ($ millions): 56.7 1988 income ($ millions): 6.7 % change in income from 1987: 240 Rank: 9 ’87 Rank: Company: Oracle Systems Corp.* Industry: Computer Software City: Belmont 2-year average return on equity: 41.9 1988 sales ($ millions): 471.9 1988 income ($ millions): 67.3 % change in income from 1987: 57 Rank: 10 ’87 Rank: 6 Company: Syntex Corp. Industry: Drugs City: Palo Alto 2-year average return on equity: 40.5 1988 sales ($ millions): 1,271.5 1988 income ($ millions): 296.6 % change in income from 1987: 19 Rank: 11 ’87 Rank: Company: FHP International Corp. Industry: Medical Offices & Clinics City: Fountain Valley 2-year average return on equity: 40.3 1988 sales ($ millions): 503.5 1988 income ($ millions): 16.5 % change in income from 1987: 138 Rank: 12 ’87 Rank: 4 Company: WD-40 Co. Industry: Specialty Lubricant City: San Diego 2-year average return on equity: 39.3 1988 sales ($ millions): 80.0 1988 income ($ millions): 15.5 % change in income from 1987: 41 Rank: 13 ’87 Rank: Company: Argonaut Group Industry: Property-Casualty Insurance City: Los Angeles 2-year average return on equity: 38.5 1988 sales ($ millions): 467.1 1988 income ($ millions): 101.8 % change in income from 1987: (40) Rank: 14 ’87 Rank: Company: CMS Enhancements Inc. Industry: Computer Storage Devices City: Tustin 2-year average return on equity: 37.9 1988 sales ($ millions): 151.5 1988 income ($ millions): 2.3 % change in income from 1987: 36 Rank: 15 ’87 Rank: Company: Sigma Designs Inc. Industry: Computer Peripherals City: Fremont 2-year average return on equity: 37.5 1988 sales ($ millions): 73.0 1988 income ($ millions): 8.8 % change in income from 1987: 56 Rank: 16 ’87 Rank: 16 Company: Apple Computer Inc. Industry: Computer Products City: Cupertino 2-year average return on equity: 36.0 1988 sales ($ millions): 4,071.4 1988 income ($ millions): 400.3 % change in income from 1987: 84 Rank: 17 ’87 Rank: 5 Company: Seagate Technology Industry: Computer Storage Devices City: Scotts Valley 2-year average return on equity: 34.6 1988 sales ($ millions): 1,266.0 1988 income ($ millions): 77.3 % change in income from 1987: (45) Rank: 18 ’87 Rank: Company: Atari Corp. Industry: Computer Products City: Sunnyvale 2-year average return on equity: 31.9 1988 sales ($ millions): 452.2 1988 income ($ millions): 39.4 % change in income from 1987: (11) Rank: 19 ’87 Rank: Company: Armor All Products Corp.* Industry: Consumer Products City: Irvine 2-year average return on equity: 31.8 1988 sales ($ millions): 147.8 1988 income ($ millions): 25.6 % change in income from 1987: 15 Rank: 20 ’87 Rank: Company: Acuson Corp. Industry: Medical Imaging Products City: Mountain View 2-year average return on equity: 29.6 1988 sales ($ millions): 168.5 1988 income ($ millions): 27.5 % change in income from 1987: 64 Rank: 21 ’87 Rank: Company: Inmac Corp. Industry: Computer Peripherals City: Santa Clara 2-year average return on equity: 28.2 1988 sales ($ millions): 222.8 1988 income ($ millions): 9.7 % change in income from 1987: 26 Rank: 22 ’87 Rank: 7 Company: Gap Inc. Industry: Clothing Stores City: San Bruno 2-year average return on equity: 27.9 1988 sales ($ millions): 1,252.1 1988 income ($ millions): 74.2 % change in income from 1987: 7 Rank: 23 ’87 Rank: 45 Company: Arden Group Inc. Industry: Grocery Stores City: Compton 2-year average return on equity: 27.7 1988 sales ($ millions): 350.2 1988 income ($ millions): 10.2 % change in income from 1987: 34 Rank: 24 ’87 Rank: Company: Software Publishing Corp. Industry: Computer Software City: Mountain View 2-year average return on equity: 26.7 1988 sales ($ millions): 73.1 1988 income ($ millions): 13.5 % change in income from 1987: 161 Rank: 25 ’87 Rank: Company: Carolco Pictures Inc. Industry: Motion Picture Production City: Los Angeles 2-year average return on equity: 26.5 1988 sales ($ millions): 141.5 1988 income ($ millions): 28.1 % change in income from 1987: 96 Rank: 26 ’87 Rank: Company: Autodesk Inc. Industry: Computer Software City: Sausalito 2-year average return on equity: 26.3 1988 sales ($ millions): 117.3 1988 income ($ millions): 32.7 % change in income from 1987: 59 Rank: 27 ’87 Rank: 12 Company: Pic ‘N Save Corp. Industry: Variety Stores City: Carson 2-year average return on equity: 26.0 1988 sales ($ millions): 401.7 1988 income ($ millions): 46.9 % change in income from 1987: (1) Rank: 28 ’87 Rank: 8 Company: Ashton-Tate Co. Industry: Computer Software City: Torrance 2-year average return on equity: 25.9 1988 sales ($ millions): 307.3 1988 income ($ millions): 47.8 % change in income from 1987: 11 Rank: 29 ’87 Rank: 59 Company: Bridgford Foods Corp. Industry: Food Products City: Anaheim 2-year average return on equity: 25.1 1988 sales ($ millions): 60.2 1988 income ($ millions): 2.7 % change in income from 1987: 65 Rank: 30 ’87 Rank: 23 Company: Lockheed Corp. Industry: Aerospace & Defense Products City: Calabasas 2-year average return on equity: 24.7 1988 sales ($ millions): 10,590.0 1988 income ($ millions): 624.0 % change in income from 1987: 43 Rank: 31 ’87 Rank: 26 Company: Walt Disney Co. Industry: Films & Theme Parks City: Burbank 2-year average return on equity: 24.4 1988 sales ($ millions): 3,438.2 1988 income ($ millions): 522.0 % change in income from 1987: 33 Rank: 32 ’87 Rank: 48 Company: Atlantic Richfield Co. Industry: Oil & Gas City: Los Angeles 2-year average return on equity: 24.0 1988 sales ($ millions): 17,626.0 1988 income ($ millions): 1,583.0 % change in income from 1987: 29 Rank: 33 ’87 Rank: Company: 20th Century Industries Industry: Property-Casualty Insurance City: Woodland Hills 2-year average return on equity: 23.9 1988 sales ($ millions): 622.1 1988 income ($ millions): 58.5 % change in income from 1987: 61 Rank: 34 ’87 Rank: 14 Company: Western Digital Corp. Industry: Computer Peripherals City: Irvine 2-year average return on equity: 23.9 1988 sales ($ millions): 768.3 1988 income ($ millions): 43.0 % change in income from 1987: 0 Rank: 35 ’87 Rank: 67 Company: Amdahl Corp. Industry: Computer Products City: Sunnyvale 2-year average return on equity: 23.2 1988 sales ($ millions): 1,801.8 1988 income ($ millions): 213.8 % change in income from 1987: 51 Rank: 36 ’87 Rank: 32 Company: City National Corp. Industry: Banking City: Beverly Hills 2-year average return on equity: 22.5 1988 sales ($ millions): 370.7 1988 income ($ millions): 49.3 % change in income from 1987: 21 Rank: 37 ’87 Rank: 21 Company: Diceon Electronics Inc. Industry: Semiconductors City: Irvine 2-year average return on equity: 22.3 1988 sales ($ millions): 140.7 1988 income ($ millions): 9.9 % change in income from 1987: 3 Rank: 38 ’87 Rank: Company: American Home Shield Industry: Home Warranties City: Santa Rosa 2-year average return on equity: 22.0 1988 sales ($ millions): 53.7 1988 income ($ millions): 4.8 % change in income from 1987: 31 Rank: 39 ’87 Rank: 22 Company: Price Co. Industry: Warehouse Stores City: San Diego 2-year average return on equity: 21.8 1988 sales ($ millions): 4,140.5 1988 income ($ millions): 94.8 % change in income from 1987: 29 Rank: 40 ’87 Rank: Company: Kaufman & Broad Home Corp. Industry: Real Estate Development City: Los Angeles 2-year average return on equity: 21.7 1988 sales ($ millions): 903.4 1988 income ($ millions): 48.0 % change in income from 1987: 35 Rank: 41 ’87 Rank: 44 Company: Products Research & Chemical Industry: Chemical Products City: Glendale 2-year average return on equity: 21.5 1988 sales ($ millions): 100.3 1988 income ($ millions): 8.0 % change in income from 1987: 2 Rank: 42 ’87 Rank: Company: Rockwell International Industry: Aerospace & Defense City: El Segundo 2-year average return on equity: 21.4 1988 sales ($ millions): 11,946.3 1988 income ($ millions): 811.9 % change in income from 1987: 28 Rank: 43 ’87 Rank: Company: Sun Microsystems Inc. Industry: Computer Products City: Mountain View 2-year average return on equity: 21.3 1988 sales ($ millions): 1,051.6 1988 income ($ millions): 66.4 % change in income from 1987: 83 Rank: 44 ’87 Rank: 33 Company: Superior Industries Intl. Industry: Motor Vehicle Parts City: Van Nuys 2-year average return on equity: 20.5 1988 sales ($ millions): 200.2 1988 income ($ millions): 13.1 % change in income from 1987: 39 Rank: 45 ’87 Rank: Company: Silicon Graphics Inc. Industry: Computer Products City: Mountain View 2-year average return on equity: 20.5 1988 sales ($ millions): 152.6 1988 income ($ millions): 12.2 % change in income from 1987: 117 Rank: 46 ’87 Rank: 13 Company: Times Mirror Co. Industry: Media City: Los Angeles 2-year average return on equity: 20.2 1988 sales ($ millions): 3,259.4 1988 income ($ millions): 331.9 % change in income from 1987: 25 Rank: 47 ’87 Rank: Company: Intel Corp. Industry: Semiconductors City: Santa Clara 2-year average return on equity: 20.2 1988 sales ($ millions): 2,874.8 1988 income ($ millions): 452.9 % change in income from 1987: 158 Rank: 48 ’87 Rank: Company: Barry’s Jewelers Inc.* Industry: Jewelry Stores City: Duarte 2-year average return on equity: 20.1 1988 sales ($ millions): 156.2 1988 income ($ millions): 5.2 % change in income from 1987: 9 Rank: 49 ’87 Rank: 30 Company: Community Psychiatric Centers Industry: Hospitals City: Laguna Hills 2-year average return on equity: 20.1 1988 sales ($ millions): 347.4 1988 income ($ millions): 70.8 % change in income from 1987: 18 Rank: 50 ’87 Rank: 62 Company: Caesars New Jersey Inc. Industry: Casinos & Hotels City: Los Angeles 2-year average return on equity: 20.0 1988 sales ($ millions): 329.8 1988 income ($ millions): 32.5 % change in income from 1987: 80 Rank: 51 ’87 Rank: 38 Company: Teledyne Inc. Industry: Aircraft Engines & Parts City: Los Angeles 2-year average return on equity: 20.0 1988 sales ($ millions): 4,522.7 1988 income ($ millions): 391.8 % change in income from 1987: 4 Rank: 52 ’87 Rank: Company: Mercury General Corp. Industry: Property-Casualty Insurance City: Los Angeles 2-year average return on equity: 19.8 1988 sales ($ millions): 454.6 1988 income ($ millions): 28.8 % change in income from 1987: 36 Rank: 53 ’87 Rank: Company: Marshall Industries** Industry: Wholesale Electronics City: El Monte 2-year average return on equity: 19.8 1988 sales ($ millions): 494.5 1988 income ($ millions): 21.7 % change in income from 1987: 23 Rank: 54 ’87 Rank: 28 Company: Telos Corp.** Industry: Computer Programming Service City: Santa Monica 2-year average return on equity: 19.4 1988 sales ($ millions): 112.3 1988 income ($ millions): 2.9 % change in income from 1987: (20) Rank: 55 ’87 Rank: Company: Unicare Financial Corp.** Industry: Property-Casualty Insurance City: Irvine 2-year average return on equity: 19.3 1988 sales ($ millions): 52.6 1988 income ($ millions): 5.7 % change in income from 1987: 37 Rank: 56 ’87 Rank: 42 Company: 3COM Corp.** Industry: Computer Peripherals City: Santa Clara 2-year average return on equity: 19.0 1988 sales ($ millions): 309.9 1988 income ($ millions): 29.3 % change in income from 1987: 30 Rank: 57 ’87 Rank: 36 Company: Clorox Co. Industry: Consumer Products City: Oakland 2-year average return on equity: 19.0 1988 sales ($ millions): 1,259.9 1988 income ($ millions): 132.6 % change in income from 1987: 26 Rank: 58 ’87 Rank: Company: TCI International Inc. Industry: Aerospace & Defense City: Fremont 2-year average return on equity: 18.9 1988 sales ($ millions): 62.3 1988 income ($ millions): 4.8 % change in income from 1987: 11 Rank: 59 ’87 Rank: Company: Data Design Laboratories Industry: Semiconductors City: Rancho Cucamonga 2-year average return on equity: 18.7 1988 sales ($ millions): 108.0 1988 income ($ millions): 6.4 % change in income from 1987: (11) Rank: 60 ’87 Rank: Company: Williams-Sonoma Inc. Industry: Specialty Home Products City: San Francisco 2-year average return on equity: 18.4 1988 sales ($ millions): 174.2 1988 income ($ millions): 5.2 % change in income from 1987: 60 Rank: 61 ’87 Rank: 58 Company: Measurex Corp. Industry: Measurement Instruments City: Cupertino 2-year average return on equity: 18.2 1988 sales ($ millions): 265.2 1988 income ($ millions): 37.1 % change in income from 1987: 38 Rank: 62 ’87 Rank: Company: National Education Corp. Industry: Educational Services City: Irvine 2-year average return on equity: 18.2 1988 sales ($ millions): 457.5 1988 income ($ millions): 46.1 % change in income from 1987: 1,191 Rank: 63 ’87 Rank: Company: First Capital Holdings Corp. Industry: Life Insurance City: Los Angeles 2-year average return on equity: 18.2 1988 sales ($ millions): 735.5 1988 income ($ millions): 52.7 % change in income from 1987: 67 Rank: 64 ’87 Rank: 2 Company: Rexon Inc. Industry: Computer Storage Devices City: Culver City 2-year average return on equity: 18.0 1988 sales ($ millions): 155.5 1988 income ($ millions): 9.0 % change in income from 1987: 45 Rank: 65 ’87 Rank: 40 Company: Dionex Corp. Industry: Measurement Instruments City: Sunnyvale 2-year average return on equity: 18.0 1988 sales ($ millions): 69.6 1988 income ($ millions): 11.6 % change in income from 1987: 30 Rank: 66 ’87 Rank: 65 Company: National Medical Enterprises** Industry: General Medical Hospitals City: Los Angeles 2-year average return on equity: 17.8 1988 sales ($ millions): 3,432.8 1988 income ($ millions): 174.4 % change in income from 1987: 3 Rank: 67 ’87 Rank: 78 Company: DEP Corp. Industry: Soaps & Cosmetics City: Rancho Dominguez 2-year average return on equity: 17.7 1988 sales ($ millions): 88.8 1988 income ($ millions): 4.6 % change in income from 1987: 149 Rank: 68 ’87 Rank: 47 Company: Hilton Hotels Corp. Industry: Hotels City: Beverly Hills 2-year average return on equity: 17.7 1988 sales ($ millions): 915.4 1988 income ($ millions): 130.9 % change in income from 1987: (6) Rank: 69 ’87 Rank: Company: Carl Karcher Enterprises** Industry: Fast Food Restaurants City: Anaheim 2-year average return on equity: 17.6 1988 sales ($ millions): 421.7 1988 income ($ millions): 18.9 % change in income from 1987: 60 Rank: 70 ’87 Rank: Company: Firemans Fund Corp. Industry: Property-Casualty Insurance City: Novato 2-year average return on equity: 17.5 1988 sales ($ millions): 3,703.7 1988 income ($ millions): 235.4 % change in income from 1987: (22) Rank: 71 ’87 Rank: 79 Company: Longs Drug Stores Inc.** Industry: Drug Stores City: Walnut Creek 2-year average return on equity: 17.4 1988 sales ($ millions): 1,872.6 1988 income ($ millions): 54.0 % change in income from 1987: 10 Rank: 72 ’87 Rank: 52 Company: Anthony Industries Inc. Industry: Sporting Goods City: City Of Commerce 2-year average return on equity: 17.3 1988 sales ($ millions): 308.4 1988 income ($ millions): 10.3 % change in income from 1987: 38 Rank: 73 ’87 Rank: 24 Company: SPI Pharmaceuticals Inc. Industry: Drugs City: Costa Mesa 2-year average return on equity: 17.3 1988 sales ($ millions): 115.9 1988 income ($ millions): 10.2 % change in income from 1987: 21 Rank: 74 ’87 Rank: 94 Company: Zenith National Insurance Industry: Property-Casualty Insurance City: Woodland Hills 2-year average return on equity: 17.1 1988 sales ($ millions): 508.7 1988 income ($ millions): 46.3 % change in income from 1987: (4) Rank: 75 ’87 Rank: Company: Integrated Device Tech.** Industry: Semiconductors City: Santa Clara 2-year average return on equity: 17.1 1988 sales ($ millions): 170.4 1988 income ($ millions): 18.0 % change in income from 1987: 56 Rank: 76 ’87 Rank: 31 Company: Kit Manufacturing Industry: Transportation Equipment City: Long Beach 2-year average return on equity: 17.1 1988 sales ($ millions): 73.8 1988 income ($ millions): 1.2 % change in income from 1987: (32) Rank: 77 ’87 Rank: 9 Company: Downey Savings & Loan Industry: Savings & Loan City: Costa Mesa 2-year average return on equity: 17.1 1988 sales ($ millions): 330.8 1988 income ($ millions): 29.0 % change in income from 1987: (13) Rank: 78 ’87 Rank: Company: Ross Stores Inc. Industry: Clothing Stores City: Newark 2-year average return on equity: 16.9 1988 sales ($ millions): 634.2 1988 income ($ millions): 26.3 % change in income from 1987: 127 Rank: 79 ’87 Rank: 53 Company: Bio-Rad Labs Industry: Instruments City: Hercules 2-year average return on equity: 16.9 1988 sales ($ millions): 198.9 1988 income ($ millions): 9.5 % change in income from 1987: 23 Rank: 80 ’87 Rank: 91 Company: Raychem Corp. Industry: Speciality Chemicals City: Menlo Park 2-year average return on equity: 16.9 1988 sales ($ millions): 1,094.7 1988 income ($ millions): 125.3 % change in income from 1987: 70 Rank: 81 ’87 Rank: 84 Company: Fleetwood Enterprises** Industry: Motor Homes City: Riverside 2-year average return on equity: 16.7 1988 sales ($ millions): 1,562.0 1988 income ($ millions): 67.7 % change in income from 1987: 40 Rank: 82 ’87 Rank: Company: Silicon Systems Inc. Industry: Semiconductors City: Tustin 2-year average return on equity: 16.7 1988 sales ($ millions): 120.8 1988 income ($ millions): 12.7 % change in income from 1987: 346 Rank: 83 ’87 Rank: 60 Company: Eldon Industries Inc. Industry: Plastic Products City: Inglewood 2-year average return on equity: 16.7 1988 sales ($ millions): 101.4 1988 income ($ millions): 7.6 % change in income from 1987: 22 Rank: 84 ’87 Rank: 19 Company: First Amer. Financial Corp. Industry: Title Insurance City: Santa Ana 2-year average return on equity: 16.5 1988 sales ($ millions): 631.4 1988 income ($ millions): 12.3 % change in income from 1987: (62) Rank: 85 ’87 Rank: 54 Company: Watkins-Johnson Industry: Aerospace & Defense Electronics City: Palo Alto 2-year average return on equity: 16.3 1988 sales ($ millions): 292.2 1988 income ($ millions): 20.6 % change in income from 1987: 16 Rank: 86 ’87 Rank: 20 Company: Cherokee Group Inc.** Industry: Women’s Clothing City: Sunland 2-year average return on equity: 16.2 1988 sales ($ millions): 158.4 1988 income ($ millions): 8.4 % change in income from 1987: (19) Rank: 87 ’87 Rank: 85 Company: Homestake Mining Industry: Gold & Silver Mining City: San Francisco 2-year average return on equity: 16.2 1988 sales ($ millions): 345.6 1988 income ($ millions): 66.4 % change in income from 1987: (55) Rank: 88 ’87 Rank: Company: Potlatch Corp. Industry: Paper & Forest Products City: San Francisco 2-year average return on equity: 16.2 1988 sales ($ millions): 1,084.1 1988 income ($ millions): 112.4 % change in income from 1987: 28 Rank: 89 ’87 Rank: Company: Columbia Savings Industry: Savings & Loan City: Beverly Hills 2-year average return on equity: 16.0 1988 sales ($ millions): 1,301.6 1988 income ($ millions): 65.0 % change in income from 1987: (46) Rank: 90 ’87 Rank: 76 Company: Sizzler Restaurants Intl.** Industry: Restaurants City: Los Angeles 2-year average return on equity: 15.9 1988 sales ($ millions): 307.3 1988 income ($ millions): 20.9 % change in income from 1987: 12 Rank: 91 ’87 Rank: 56 Company: Calmat Co. Industry: Building Materials City: Los Angeles 2-year average return on equity: 15.8 1988 sales ($ millions): 660.8 1988 income ($ millions): 56.4 % change in income from 1987: (28) Rank: 92 ’87 Rank: 99 Company: Gradco Systems Inc.** Industry: Office Equipment City: Irvine 2-year average return on equity: 15.8 1988 sales ($ millions): 113.9 1988 income ($ millions): 5.6 % change in income from 1987: 37 Rank: 93 ’87 Rank: Company: Jacobs Engineering Group Inc. Industry: Construction City: Pasadena 2-year average return on equity: 15.6 1988 sales ($ millions): 757.4 1988 income ($ millions): 6.6 % change in income from 1987: 87 Rank: 94 ’87 Rank: 68 Company: Zero Corp.** Industry: Specialty Metal Products City: Los Angeles 2-year average return on equity: 15.6 1988 sales ($ millions): 159.6 1988 income ($ millions): 15.4 % change in income from 1987: 16 Rank: 95 ’87 Rank: Company: Informix Corp.** Industry: Computer Software City: Menlo Park 2-year average return on equity: 15.4 1988 sales ($ millions): 98.3 1988 income ($ millions): 6.0 % change in income from 1987: 1 Rank: 96 ’87 Rank: 10 Company: Countrywide Credit** Industry: Mortgage Banking & Brokerage City: Pasadena 2-year average return on equity: 15.4 1988 sales ($ millions): 135.4 1988 income ($ millions): 12.0 % change in income from 1987: (13) Rank: 97 ’87 Rank: 97 Company: Hewlett-Packard Co. Industry: Computer Products City: Palo Alto 2-year average return on equity: 15.4 1988 sales ($ millions): 9,831.0 1988 income ($ millions): 816.0 % change in income from 1987: 27 Rank: 98 ’87 Rank: Company: Coast Distribution Systems Industry: Wholesale Autos & Parts City: San Jose 2-year average return on equity: 15.4 1988 sales ($ millions): 134.7 1988 income ($ millions): 3.5 % change in income from 1987: 37 Rank: 99 ’87 Rank: 61 Company: Castle & Cooke Inc. Industry: Food Products City: Los Angeles 2-year average return on equity: 15.3 1988 sales ($ millions): 2,469.2 1988 income ($ millions): 112.3 % change in income from 1987: 26 Rank: 100 ’87 Rank: Company: California Financial Holding Industry: Savings & Loan City: Stockton 2-year average return on equity: 15.3 1988 sales ($ millions): 81.7 1988 income ($ millions): 5.4 % change in income from 1987: (38)

* See company notes, page 29.

** See exceptions, page 38.