THE TIMES 100 : THE BEST PERFORMING COMPANIES IN CALIFORNIA : REGIONAL PROFILES : Energy and Aerospace Are the Powers in L.A. : Investors, Though, Favor Deal Makers or Merger Targets

In some quarters, Maxxam Inc. wouldn’t rate as anybody’s favorite corporation.

The Los Angeles-based real estate development company has a history of attracting negative publicity, including a loud chorus of condemnation over the accelerated cutting of redwood trees after its move into California’s lumber industry in 1986. But investors applauded last year when Maxxam bought KaiserTech, the parent of Oakland-based Kaiser Aluminum & Chemical. Maxxam’s shares rose 225% in the past year, showing the greatest stock price appreciation of all California companies surveyed by MZ Group of San Francisco.

“Aluminum companies have been experiencing record profitability,” said John C. Tumazos, an analyst with Donaldson Lufkin & Jenrette in New York.

Whether impressed with bold acquisitions or a steady, plodding record of performance, investors in the past year found quite a few Los Angeles County concerns to be attractive buys. Five of the top 10 gainers on the statewide “Charging Ahead” list of companies ranked by stock appreciation are based in the county.

However, none of last year’s top stock performers in the county are on the list this year. In fact, United Education & Software of Encino--No. 2 on the statewide stock appreciation list and No. 1 on county stock appreciation list last year--tops this year’s statewide list of those whose stock declined the most.

United Education & Software’s share price has been hurt by a continuing controversy over its performance in processing loans under the U. S. student loan program. The Encino-based firm is at the center of the most expensive foul-up in the history of the program.

Overall, Los Angeles County companies were disproportionately represented among the state’s top companies based upon total revenue, revenue growth, absolute profits and number of employees.

Los Angeles County-based companies showing the highest stock price gains include St. Ives Laboratories, the Chatsworth maker of cosmetics and skin creams; Vons Cos. of El Monte, a leading Southern California grocery retailer; Anthony Industries, the City of Commerce maker of recreational equipment, and New World Entertainment, the Los Angeles television and film production company.

Shares of St. Ives, which sells personal-care products under the “Swiss Formula” label, rose primarily because of buyout speculation. Rumors began in March, when Stephen Redding, vice president of Nexxus, a rival personal-care products maker in Santa Barbara, acquired a 5.3% stake. St. Ives’ top two executives control 53% of the shares, ruling out a hostile takeover. But Redding’s purchase still fueled rumors of a possible buyout of public holders. The company’s shares also benefited from 18% revenue growth and a 10% profit surge in 1988.

Vons strengthened its position in the huge Southern California food retailing market when it acquired Safeway’s Southern California stores, even though costs associated with the move contributed to a $23.9-million loss last year. The 162 Safeway stores make Vons the largest chain in the region--unless American Stores is finally allowed to combine its Lucky and Alpha Beta chains under the Lucky banner.

For years, Anthony Industries’ identity was a little fuzzy on Wall Street, although the company was known in Southern California as a maker of swimming pools. That was the major reason the company launched an extensive campaign last year to raise its profile among Wall Street analysts, Chief Executive Bernard I. Forester said in December. The campaign apparently helped. Anthony’s shares more than doubled in value in the past year. Net income also increased 37%.

Anthony’s Shakespeare Fishing Tackle Group is one of the leading makers and distributors of fishing rods, reels and boat motors in the United States. Its K2 Corp. is the largest U.S. maker of alpine skis in the United States. K2 also expanded in Europe last year by acquiring 70% of Scandinavia’s oldest and largest cross country ski maker.

Anthony’s task last spring, Forester said, was to convince Wall Street “that there are a lot of synergies in what we do.”

Only one of the county’s top stock performers--Vons--ranks among the county’s 15 largest companies as measured by annual revenue. The top stock performers list is composed largely of smaller service companies such as Frederick’s of Hollywood, which has reduced its offerings of racy lingerie in favor of more demure styles appealing to a broader market.

Los Angeles County is home to several of the state’s largest and fastest-growing concerns. Firms based in the county make up about 36% of the state’s public companies, but they account for over half of the combined revenue of the group and 49% of the combined profits, said Kevin Colosimo, vice president of MZ Group of San Francisco, which conducted The Times’ survey. The county also accounted for half of the combined work force of the companies, he said.

Energy and aerospace account for Los Angeles County’s largest concerns in terms of annual revenue. Occidental Petroleum and Atlantic Richfield, rank second and third in the state. A newcomer this year is Rockwell International--the third largest in the county and fourth largest in the state--which moved its headquarters to El Segundo from Pittsburgh. It is followed by Lockheed, the state’s fifth-largest concern.

Maxxam topped the state and county rankings of the fastest growing in terms of two-year average sales growth. Acquisitions account for Maxxam’s 158% average growth. But L.A. Gear, best known as a retailer of stylish athletic shoes for teen-age girls, has expanded its product line of apparel and jeans. The company, one of last year’s top-performing stocks, ranked second in revenue growth in the county.

Only three of last year’s fastest growing in revenue made the list of the 15 fastest growing in 1988--the Kaufman & Broad Home Corp. real estate concern, the Neutrogena consumer products company, and Rexon, a computer products company.

Among the missing is Maxicare Health Plans, which grew by acquisitions in 1986 but was forced to divest almost all of its acquisitions in 1988, when its financial plight worsened. The health maintenance organization filed for protection under Chapter 11 of the federal bankruptcy code in March.

While Los Angeles County dominates the state’s economy, it differs in some respects from statewide economic trends, Colosimo said. Overall, the county’s rate of growth last year was slower than the state as a whole--but only marginally so, he said. Statewide, he said, the economic strength was across the board. But “weakness in high technology held back the overall performance of Los Angeles County,” he said, noting that the high-technology companies in the greatest difficulty are in Southern California.

LOS ANGELES COUNTY REVENUE LEADERS

Los Angeles-based companies ranked by overall revenue.

1988 revenue % change Rank Company ($ millions) from 1987 1 Occidental Petroleum Corp. 19,417.0 14 2 Atlantic Richfield Co. 17,626.0 8 3 Rockwell Intl. Corp. 11,946.3 -1 4 Lockheed Corp. 10,590.0 -6 5 Unocal Corp. 8,853.0 5 6 Security Pacific Corp. 8,483.1 11 7 SCEcorp** 6,252.7 12 8 Pacific Enterprises 5,979.0 12 9 First Interstate Bancorp. 5,932.1 17 10 Northrop Corp. 5,797.1 -4 11 Litton Industries Inc. 4,863.9 10 12 Teledyne Inc. 4,522.7 41 13 Wickes Cos.* 3,984.6 15 14 Vons Cos.** 3,916.6 20 15 H.F. Ahmanson & Co.** 3,516.8 33

*See exceptions, page 38.

**See company notes, page 29.

LOS ANGELES COUNTY PROFIT LEADERS

Los Angeles-based firms ranked by profit from continuing operations.

1988 Change income in income Rank Company ($ millions) ($ millions) 1 Atlantic Richfield Co. 1,583.0 359.0 2 Rockwell International Corp. 811.9 176.8 3 SCEcorp** 808.5 87.9 4 Security Pacific Corp. 638.9 623.2 5 Lockheed Corp. 624.0 188.0 6 Walt Disney Co. 522.0 129.7 7 Teledyne Inc. 391.8 14.6 8 Times Mirror Co. 331.9 65.4 9 Occidental Petroleum Corp. 313.0 129.0 10 Great Western Financial 248.4 38.4 11 Pacific Enterprises 222.0 (9.8) 12 First Executive Corp. 204.5 26.7 13 H.F. Ahmanson & Co.** 202.8 2.7 14 National Medical Enterprises* 174.4 4.4 15 Litton Industries Inc. 167.0 28.9

*See exceptions, page 38.

**See company notes, page 29.

LOS ANGELES COUNTY MARKET VALUE LEADERS

Los Angeles-based companies ranked by stock market valuation.

4/3/89 market value Book value Rank Company ($ millions) ($ millions) 1 Atlantic Richfield Co. 15,412.5 6,247.0 2 Walt Disney Co. 10,752.8 2,359.3 3 Occidental Petroleum Corp. 7,215.6 6,224.0 4 SCEcorp** 6,935.9 5,662.6 5 Rockwell International Corp. 5,744.2 3,693.0 6 Unocal Corp. 5,018.3 2,161.0 7 Times Mirror Co. 4,709.9 1,686.9 8 Security Pacific Corp. 4,530.0 3,843.0 9 MCA Inc. 4,134.8 1,691.7 10 Teledyne Inc. 3,994.8 2,138.4 11 Lockheed Corp. 2,957.8 2,476.0 12 Hilton Hotels Corp. 2,726.2 814.1 13 Pacific Enterprises 2,521.0 1,924.0 14 First Interstate Bancorp 2,185.3 2,239.9 15 Natl. Medical Enterprises* 2,066.8 1,038.3

Market as Rank % of book 1 247 2 456 3 116 4 122 5 156 6 232 7 279 8 118 9 244 10 187 11 119 12 335 13 131 14 98 15 199

*See exceptions, page 38.

**See company notes, page 29.

LOS ANGELES COUNTY STOCK LEADERS

Los Angeles-based firms ranked by percent gain in stock price.

% change Stock Stock stock price price Rank Company price 4/3/89 4/4/88 1 Maxxam Inc. 225.0 27.63 8.50 2 St. Ives Laboratories 127.8 15.38 6.75 3 Vons Cos.** 124.1 16.25 7.25 4 Anthony Industries Inc. 122.6 17.25 7.75 5 New World Entertainment 117.4 6.25 2.88 6 Casablanca Inds. Inc. 112.2 10.88 5.13 7 Fredericks of Hollywood 104.8 16.13 7.88 8 Intl. Technology Corp. 100.0 6.50 3.25 9 P. Leiner Nutritional Prods.* 97.2 17.50 8.88 10 PhoneMate Inc. 95.0 7.31 3.75 11 Superior Industries Intl. 91.8 23.75 12.39 12 Dataproducts Corp. 88.9 17.00 9.00 13 Barry’s Jewelers Inc.* 85.3 15.75 8.50 14 Mattel Inc. 77.8 12.00 6.75 15 Republic Pictures 77.8 10.00 5.63

*See exceptions, page 38.

**See company notes, page 29.

LOS ANGELES COUNTY REVENUE GROWTH LEADERS

Los Angeles-based firms ranked by two-year average annual sales growth rate.

2-year avg. 1988 1988 annual sales revenue income(loss) Rank Company growth % ($ millions) ($ millions) 1 Maxxam Inc. 158.2 519.2 3.70 2 L.A. Gear Inc. 148.3 223.7 22.03 3 First Capital Holdings 95.9 735.5 52.72 4 Jacobs Engineering Group 91.0 757.4 6.55 5 Rexon Inc. 69.9 155.5 8.96 6 Erly Industries* 65.3 336.1 (2.00) 7 United Educ. & Software* 54.0 87.8 (8.00) 8 DEP Corp. 50.8 88.8 4.58 9 Natl. Sanitary Supply 49.6 179.2 3.91 10 Calprop Corp. 44.1 75.1 5.18 11 MGM/UA Communications 37.8 674.9 (48.74) 12 Neutrogena Corp. 36.5 178.9 23.03 13 Westwood One Inc. 36.2 110.0 1.59 14 Kaufman & Broad Home** 35.6 903.4 48.04 15 Price/Stern/Sloan Inc.* 35.0 58.1 1.03

*See exceptions, page 38.

**See company notes, page 29.