The Times 100 : The Best Performing Companies in California : REGIONAL PROFILES : A Year of Changes in San Diego County

For the second straight year, only two San Diego companies made The Times 100 list of most profitable companies, and they are the same two that qualified in 1988: WD-40, the manufacturer of the all-purpose lubricant in the familiar blue and yellow can, finished in the ninth spot, and Price Co., operator of 47 high-volume discount membership warehouses, placed 49th.

To retain their membership in the select group of California’s most profitable public companies, WD-40 and Price have had to defy a slew of competitors who have rushed into the market to copy their seemingly simple concepts.

WD-40 and Price also share a trait common to many of the most profitable companies in this year’s Times 100 survey of taking a cautious approach to growth. Cash-rich WD-40, for example, has for years resisted the suggestion that it acquire other companies or introduce other products. Instead, WD-40 simply redistributes most of its net income to shareholders as dividends.

Price has expanded its popular chain of discount warehouses at a slower rate than competitors such as Costco and Price Savers; still, its 1989 revenue increased 21% over 1988’s sales to $5 billion.

The deliberate expansion can be attributed in part to Price’s strategy of buying the real estate on which its warehouses are located. That policy reduces the chain’s operating expense--its cost of doing business is the lowest in the industry--but narrows the range of available locations. Price Clubs average more than $110 million in annual sales at each location, or double the average of its nearest competitor.

But the San Diego economic scene also saw radical changes in 1989: Six of the 15 largest publicly held companies headquartered here a year ago have either moved away, been merged or, in the case of failed Imperial Savings, the operating unit of Imperial Corp. of America, been taken over by federal regulators.

Also on the critical list are two other large, longstanding corporate citizens: Great American Bank and San Diego Gas & Electric.

Capital levels at Great American, the nation’s eighth-largest savings and loan with $15.9 billion in assets, have fallen so low that a government seizure or a forced merger with a stronger outside institution are distinct possibilities. Great American’s $263.4-million loss for 1989, stacked against its $50.3-million profit in 1988, created a $313.7-million flip-flop and earned it the dubious honor of placing third on the statewide “Nose Dives” list.

Great American’s problems caused it to be the area’s worst stock market performer for 1989, with its shares losing nearly two-thirds of their value from 1989.

A $174.9-million change from profit to loss also put Imperial Corp. of America on the statewide “Nose Dive” list. Its Imperial Savings unit was seized by regulators in February after the thrift reported huge losses, most of which resulted from the firm’s misguided investments in junk bonds and other business activities.

A proposed merger of San Diego Gas & Electric, San Diego’s energy and heating utility, with SCEcorp of Rosemead is being fiercely opposed by civic leaders. The loss of SDG&E; as a locally headquartered company would create a sizable void in the local corporate landscape: It was first countywide in 1989 in absolute profits ($187.1 million), second in revenue ($2.1 billion) and first in stock market value ($2.3 billion). With its shares gaining 12.8% in the year ended April 10 to $41.875, SDG&E; ranked as San Diego’s seventh-best stock market performer.

Another local energy company, Magma Power, has generated much less controversy but was among the top-performing companies by several standards of measurement, including stock price. Shares in Magma, a geothermal resources company, rose 118% in value over the year to close at $35.125, the largest percentage gain of any local stocks.

Magma Power’s stock price was driven by the company’s spectacular profits. Its profit margin--income from continuing operations figured as a percentage of sales--was 39.3%, or ninth best among all the California-based public companies in this year’s survey. Its 1989 profit of $22.3 million were also up 13% from 1988 net income.

San Diego’s second-best stock performer was La Jolla Bancorp, parent of La Jolla Bank & Trust, whose shares closed at $13.75 on April 10, up 57% since April 10, 1989.

Other San Diego County bank names that have vanished or are soon to vanish after agreeing to buyouts in 1989 were Torrey Pines Bank, to be formally acquired by Wells Fargo on Monday, and Southwest Bank of Vista.

Big sales increases did not necessarily yield big profits for San Diego companies. In fact, the county’s two biggest revenue percentage gainers during the past two years, Precision Aerotech and Advanced Marketing Services, each saw profits drop in 1989.

Precision Aerotech’s sales increased by an annual average of 41.7% over 1988 and 1989, but the aerospace component manufacturer posted a loss of $4 million last year as its Micronics subsidiary was investigated for allegedly supplying substandard parts to defense customers.

SAN DIEGO COUNTY PROFIT LEADERS

San Diego-based companies ranked by profit from continuing operations.

1989 Change income in income Rank Company ($ millions) ($ millions) 1 San Diego Gas & Electric 187.1 (2.2) 2 Price Co.* 117.0 22.3 3 Homefed 115.7 4.4 4 National Health Laboratories 64.7 15.6 5 Rohr Industries* 33.5 1.0 6 Magma Power 22.3 13.0 7 Cubic 17.6 5.4 8 WD-40* 15.8 0.2 9 Cipher Data Products 12.2 1.7 11 DH Technology 5.3 2.2 12 First National 5.3 2.0 13 La Jolla Bancorp 5.0 2.6 13 Molecular Biosystems 4.8 2.6 14 Chart House Enterprises 4.6 (0.8) 15 Beeba’s Creations 4.1 8.2

* See exceptions, page 46.

SAN DIEGO COUNTY REVENUE LEADERS

San Diego-based companies ranked by overall revenue.

1989 revenue % change Rank Company ($ millions) from 1988 1 Price Co.* 5,011.6 21 2 San Diego Gas & Electric 2,082.5 0 3 Homefed 1,805.4 18 4 Great American Bank 1,556.0 -3 5 Imperial Corp. of America* 1,059.4 -9 6 Rohr Industries* 1,044.7 15 7 Intermark* 750.0 7 8 National Health Laboratories 402.4 28 9 Cubic 349.4 -4 10 PS Group 248.6 15 11 Cipher Data Products 217.8 17 12 Advanced Marketing Services* 197.7 27 13 Oak Industries 160.2 -19 14 Triton Group* 146.5 7 15 Chart House Enterprises 139.6 -5

* See exceptions, page 46.

Source: MZ Group. Certain historical data is from Standard & Poor’s Compustat Inc.

SAN DIEGO COUNTY REVENUE GROWTH LEADERS

San Diego-based firms ranked by two-year average annual sales growth rate.

2-year avg. 1989 1989 annual sales revenu income (loss) Rank Company growth % ($ millions) ($ millions) 1 Precision Aerotech* 41.7 77.7 (3.986) 2 Adv. Marketing Services* 34.1 197.7 3.710 3 La Jolla Bancorp 33.6 60.5 5.015 4 Rohr Industries* 25.5 1,044.7 33.480 5 First National 24.1 57.8 5.305 6 Price Co.* 23.1 5,011.6 117.035 7 Homefed 19.5 1,805.4 115.663 8 Intermark* 14.4 750.0 (19.605) 9 Cipher Data Products 10.6 217.8 12.171 10 BSD Bancorp 9.3 52.3 3.955 11 Beeba’s Creations 9.3 128.6 4.072 12 WD-40 8.8 83.9 15.755 13 Maxwell Laboratories 6.8 71.8 3.557 14 Great American Bank 4.6 1,556.0 (263.402) 15 San Diego Gas & Electric 4.6 2,082.5 187.126

* See exceptions, page 46.

MZ Group: certain historical data is from Standard & Poor’s Compustat Inc.

SAN DIEGO COUNTY MARKET VALUE LEADERS

San Diego-based companies ranked by stock market valuation.

4/10/90 market value Book value Market as Rank Company ($ millions) ($ millions) % of book 1 San Diego Gas & Electric 2,341.7 1,403.1 167 2 Price Co.* 1,735.8 535.1 324 3 National Health Laboratories 1,150.9 330.0 349 4 Magma Power 774.2 150.1 516 5 Homefed 557.1 1,042.3 53 6 Rohr Industries* 346.7 412.4 84 7 WD-40* 236.1 37.8 624 8 PS Group 215.6 252.9 85 9 Cubic 132.0 129.1 102 10 Cipher Data Products 117.5 161.9 73 11 Triton Group* 110.3 203.4 54 12 Chart House Enterprises 107.5 53.9 199 13 Burnham Pacific Property 104.3 75.0 139 14 Great American Bank 101.7 373.5 27 15 La Jolla Bancorp 95.4 37.3 256

* See exceptions, page 46.

SAN DIEGO COUNTY STOCK LEADERS

San Diego-based companies ranked by percent gain in stock price.

% change 4/10/90 4/10/89 stock stock stock Rank Company price price price 1 Magma Power 117.8 35.13 16.13 2 La Jolla Bancorp 57.1 13.75 8.75 3 National Health Laboratories 50.0 11.63 7.75 4 First National 49.3 19.00 12.73 5 BSD Bancorp 42.0 8.88 6.25 6 Cubic 15.2 19.00 16.50 7 San Diego Gas & Electric 12.8 41.88 37.13 8 Beeba’s Creations 7.4 10.88 10.13 9 Maxwell Laboratories 6.0 13.25 12.50 10 WD-40 -5.3 31.25 33.00 11 Titan -5.6 2.13 2.25 12 Price Co. -6.1 34.75 37.00 13 PS Group -8.4 32.63 35.63 14 Cipher Data Products -13.5 8.00 9.25 15 Wavetek -22.7 4.25 5.50