18 in County in Top 100 Small Firms
Orange County’s best small businesses--the heart and soul of the area’s booming economy--are emerging high-technology and medical-related businesses.
That entrepreneurial snapshot emerges from California Business magazine’s annual tally of the state’s best 100 small businesses. Eighteen of the companies call Orange County home.
Orange County mirrored the state in general with a high percentage of high-tech firms on the list, appearing in California Business’ just-released September issue. Of the county’s top small businesses, six are involved in the design, sale or manufacture of high-tech products.
The medical profession and health sciences stand out, too. Four of the Orange County firms that made the cut produce drugs, medical or lab equipment, and one--American Hospital Management Corp.--owns and operates hospitals.
Two local companies on the top 100 list are involved in banking and finance.
California Business based its rankings on sales and income growth and return to shareholders over two years, 1987 and 1988. The data was gathered for the magazine by MZ Group, a San Francisco-based business analysis and database publishing firm.
To qualify for the list, companies must have been publicly traded since Dec. 31, 1986, and have 1988 sales of no more than $125 million and 1986 sales of at least $5 million. During each of the last three years, the firms also had to show a profit, with at least $250,000 in net income in 1986. And the debt-to-equity-ratio could be no more than 3 to 1.
Leading the list of the top 18 local firms--and ranked no. 17 statewide--is Gradco Systems Inc., an Irvine-based company that supplies sorters, sheet feeders and other paper-handling devices for the office automation market. In fiscal 1989, ended March 31, Gradco saw record net earnings of $5.6 million, a 39% jump over the prior year.
Gradco executives trace the impressive results to the firm’s dominant market position, its aggressive acquisitions over the past several years and its unique technology. “We’re one of the few companies that sells to the Japanese”--such as Ricoh, Toshiba and Konica--”rather than buying from them,” said Steven Naber, chief financial officer .
Unicare Financial Corp., a workers’ compensation insurance underwriter for larger accounts, made its name--and its No. 20 ranking on the list--by running a lean and mean operation, said President Russell Leatherby.
“We’re one of the most efficient companies in our market with one of the lowest ratios of expenses to premiums,” Leatherby said. In 1988, Unicare reported net income of $6.1 million, a 26% increase from a year earlier.
Archive Corp. of Costa Mesa, No. 3 among the Orange County listings and No. 23 overall, has built its clientele for computer storage devices with reliable products, good service and strong management, said Bob Maples, director of investor relations for the manufacturer of computer tape drives. For the fiscal year ended Sept. 30, Archive reported that earnings rose 72% to $10.5 million on a 38% increase in revenue.
Statewide, the top five small companies are Mountain View’s Software Publishing Corp., a computer software firm; Adobe Systems Inc., another Mountain View computer software maker; and Martin Lawrence Ltd. Editions, a fine art publisher in Van Nuys. Numbers four and five respectively were First National Corp., a San Diego banking firm, and Informix Corp., a Menlo Park computer software firm.
ORANGE COUNTY’S BEST SMALL COMPANIES An analysis of publicly traded companies with annual sales in 1988 of not more than $125 million ranked 18 Orange County firms in the nation’s top 100 small companies. The rankings were based on three factors measured during a two-year period ending in 1988: sales growth, given a weight of 60%; highest return on equity in the period, 20%, and profit growth, also 20%. The list was compiled by MZ Group, San Francisco.
% Return % Sales % Income Rank on Equity* Growth* Growth* Gradco Systems Inc., Irvine 17 15.6 43.7 75.1 Unicare Financial Corp., Irvine 20 19.7 20.1 133.8 Archive Corp., Costa Mesa 23 13.1 24.7 118.7 Belcor Inc., Irvine 26 11.1 52.0 26.7 Ropak Corp., Fullerton 27 12.1 36.6 70.9 Laser Precision Corp., Irvine 33 12.1 28.7 69.6 SPI Pharmaceuticals, Costa Mesa 40 17.3 37.4 23.0 Bridgford Foods Corp., Anaheim 41 25.1 5.5 105.6 Cimco Inc., Costa Mesa 51 15.3 26.1 27.6 Microsemi Corp., Santa Ana 52 11.1 47.0 -32.7 Eldorado Bancorp, Tustin 65 16.5 9.9 34.7 American Hospital Mgmt. Corp., 75 7.2 10.6 22.7 San Clemente Newport Corp., Fountain Valley 77 9.0 14.5 7.5 Datum Inc., Anaheim 81 6.2 14.9 -1.9 Newport Electronics Inc., Santa Ana 84 9.8 13.4 -4.0 PDA Engineering, Costa Mesa 85 6.0 15.9 -7.9 ICN Biomedicals Inc., Costa Mesa 87 10.9 10.7 -0.4 Gateway Communications Inc., Irvine 93 10.0 19.6 -40.2
* Percent over 2 years, 1987 and 1988.
Source: California Business magazine.
