Survey of Area Firms Finds 1990 Ended Well for Many : Earnings: Defense and computer companies are among the fourth quarter’s most profitable. Some big losses are posted in banking and real estate.
Despite war fears and the start of a recession, many San Fernando Valley and Ventura County companies managed to stay profitable during the fourth quarter of 1990, and some saw sizable increases in net income from a year earlier.
Thirty-five of 46 regional companies in a Times survey--76%--were profitable during their fiscal quarters that ended in October, November or December. Of those companies reporting profits, 27--or 77%--said profits increased over the same period in 1989.
Of the 11 companies that lost money during their latest quarters, three reported losses greater than those suffered during the same period a year earlier.
The companies surveyed included those with headquarters from Ventura to Glendale.
Some of the most profitable regional companies were in the computer and defense industries.
Tandon Corp., for example, posted a 68% jump in net income for the quarter ended Dec. 31, from $5.32 million a year ago to $8.95 million. The personal computer company, based in Moorpark, also reported record sales of $127.24 million for the quarter, up 23% from year-earlier sales of $103.67 million.
Tandon attributed the improved results in part to marked sales gains in several high-end lines of Tandon computers, which together accounted for 55% of Tandon sales during the quarter. The company has rebounded due to strong personal computer sales in Europe, which accounted for 94% of Tandon’s sales last year.
Lockheed Corp., the Calabasas-based aerospace concern, staged a comeback last year and reported a $99-million profit for the quarter that ended Dec. 31, contrasted with a $109-million loss a year earlier. Lockheed said consolidations and cost reductions last year helped boost profit margins and competitiveness. The company said that this year it hopes to win a defense contract to build the Air Force’s advanced tactical fighter, or ATF. The contract is expected to be awarded by May 1, the company said.
Companies that suffered big losses in the quarter included several in banking and real estate, reflecting overall problems in those industries.
Glenfed, parent of Glendale Federal Bank, the country’s fourth-largest savings and loan, reported a loss of $140.8 million in its quarter that ended Dec. 31. It was the company’s first quarterly loss since 1981; much of that loss resulted because Glenfed pumped $153 million into its reserves to cushion the thrift against commercial real estate loan troubles.
Smaller banks with fewer problem loans managed to do well despite the uncertain climate. OneCentral Bank, a single-branch bank based in Glendale, said its net income for the fourth quarter that ended Dec. 31 climbed 16% to $211,000 from $182,000 a year earlier. Camarillo Community Bank, with branches in Camarillo and Westlake Village, posted $220,637 in fourth-quarter profit, up 15% from the year before.
Amgen, a Thousand Oaks biotechnology firm that has seen its stock soar in recent months because it has a monopoly on an anti-anemia drug for patients with kidney disease, posted one of the biggest quarterly losses. The company lost $28 million, contrasted with net income of $7.98 million a year earlier, in its quarter that ended Dec. 31.
However, Amgen said the loss stems from a $50-million payment to Memorial Sloan-Kettering Cancer Center in New York in exchange for a substantial reduction in royalties that Amgen would have to pay the center on U. S. sales of a forthcoming drug, which helps fight infection in cancer patients undergoing chemotherapy. Analysts said that Amgen’s chemotherapy drug is expected to be approved for sale by the government shortly, and that the drug should become Amgen’s second big product. Memorial Sloan-Kettering helped with the drug’s initial research.
Without the payment, Amgen said it would have earned $19.7 million in the quarter.
Another company posting a sizable quarterly loss was Nu-Med, an Encino operator of hospitals and other health-care facilities. Reflecting tough times in the hospital industry overall, the company reported a $3.32-million loss for its fiscal second quarter; it had a $2.89-million loss a year earlier.
Nu-Med attributed the loss in part to lower occupancy rates at its hospitals.
Stiff competition in the health industry also hit ATI Medical, a Glendale company that rents medical equipment to hospitals. It reported a $290,800 loss for its quarter that ended Oct. 31, contrasted with a $792,364 profit a year earlier. The company blamed the loss on rivals’ price-cutting in certain markets and reduced orders during September in response to threatened health-care cutbacks in the federal budget.
TransTechnology Corp., a Sherman Oaks-based maker of electronic components and other equipment for the military and industrial markets, blamed the recession for a $536,000 loss for its quarter that ended Dec. 31. During the same period in 1989, the company posted a $348,000 profit.
But the recession apparently did not hurt House of Fabrics, which opened several large stores and posted a 5% increase in earnings during the three months that ended Oct. 31. The company earned $4.52 million, compared to $4.3 million in the same quarter a year earlier.
The Sherman Oaks-based home fabric retail chain, which operates 613 stores, was also profitable enough to launch a $44-million takeover bid for Fabricland, a fabric retailer based in Portland, Ore. Fabricland has rejected House of Fabrics’ offer as inadequate and is fighting the takeover bid.
Another profitable company was Tekelec, a Calabasas maker of test equipment for the telecommunications industry, which said its fourth-quarter earnings jumped 49% from a year earlier on a 46% increase in revenue.
The company reported net income of $1.39 million for the quarter, compared to $933,000 a year earlier. It said continued strong orders for its equipment accounted for the gains. Tekelec derives 51% of its business from foreign customers.
Burbank-based Walt Disney Co. was by far the most profitable company in the region, but it nevertheless saw earnings slip 2% because of fewer tourists and a dip in theme-park attendance caused by the recession and war fears. The entertainment concern earned $170.4 million in its fiscal first quarter that ended Dec. 31, compared to $174.4 million a year earlier. Revenue in the quarter increased 16% to $1.49 billion from $1.29 billion.
QUARTERLY REPORTS For publicly-held companies with headquarters from Ventura to Glendale. Figures are for fiscal quarters ending from October to December, 1990.
Five Biggest Local Profits
Profit in Year-ago Company Industry Latest Qtr. Results Walt Disney Co. Entertainment $170.4 million $174.4 million Lockheed Corp. Aerospace $99 million ($109 million) Tandon Corp. Computers $8.95 million $5.32 million House of Fabrics Fabrics $4.52 million $4.30 million Micropolis Corp. Disk Drives $3.75 million ($2.19 million)
Five Biggest Local Losses
Loss In Yeasr-Ago Company Industry Latest Quarter Results Glenfed Inc. Banking ($140.8 million) $27.6 million Amgen Inc. Biotechnology ($28 million) $7.98 million Nu-Med Inc. Hospitals ($3.32 million) ($2.89 million) 3-D Systems Inc. Plastics ($2 million)* $476,104 Terminal Data Corp. Imaging Equip. ($737,000) ($627,000)
* Company estimate
