THE TIMES 100 : The Best Performing Companies in California : The Bottom Line : United Television Runs to Top Profit Margin List : The TV station owner’s operating income almost doubled during 1990.

The fortunes of United Television during the past few years have glittered as brightly as a klieg light, although the recession has thrown the dimmer switch in recent months.

The Beverly Hills-based television station operator climbed into the No. 2 position on the 1990 Times 100 list. On the previous year’s roster, a ranking by average two-year return on equity, United Television ranked fifth.

United Television also had the best profit margin in 1990 of the firms ranked; its profit from continuing operations was 40.8% of 1990 sales.

United Television’s operating income nearly doubled in 1990, jumping to $6.7 million from $3.54 million the year before. Revenue rose to $119 million from $107 million.

However, 1990 net income declined to $48.5 million from $62.6 million. Both years included income from the sale of stock in Time Warner, which the company acquired because it and its affiliates held an interest in Warner Communications when it agreed to merge with Time in 1989.

Income from the stock sale was $109.3 million in 1989 and $63.4 million in 1990. Excluding those gains 1990 net income amounted to $12.6 million, up from $3.5 million the previous year.

The recession and Persian Gulf War slowed television advertising sales in the first quarter, when United Television reported a net loss of $1.7 million on revenue of $24.7 million. In the same quarter in 1990, the company posted net income of $36.1 million (including a $35.9 million gain from the stock holdings) on $25.8 million revenue.

In a letter to shareholders, Chairman and Chief Executive Herbert J. Siegel and President Evan C. Thompson said the weak economy should continue to hurt television revenue in 1991.

“In view of this expected environment, we will continue to aggressively monitor station overhead and seek ways to enhance operating efficiencies,” the two said in the letter. “Fortunately, with a virtually debt-free balance sheet, significant cash flow and substantial cash reserves, UTV is positioned not only to weather this period, but also to take advantage of attractive opportunities these difficult times may generate.”

United Television owns an ABC affiliate in Salt Lake City, an NBC affiliate in San Antonio, an independent VHF television station in Minneapolis/St. Paul and UHF stations in San Francisco and Phoenix.

In addition, companies that control more than half of United Television’s stock own two other television stations, including KCOP-TV in Los Angeles.

Those companies are BHC Communications and Chris-Craft Industries. Chris-Craft Industries owns 64.6% of BHC Communications and BHC owns 51.6% of United Television. United Television owns a small amount, less than 5%, of BHC Communications stock and still holds Time Warner stock worth more than $70 million.

All three companies are headed by New York financier Siegel, a colorful figure who was once considered a corporate raider. As a major shareholder of Warner Communications after he came in as a white knight in 1984, Siegel proved a vocal and persistent thorn in the side of his former friend Steven J. Ross, then head of Warner and now chairman and chief executive of Time Warner.

United Television is sitting on a cash hoard of more than $4 million, but the company has said it has no current expansion plans, although it will continue “to review various opportunities in television broadcasting, entertainment, communications and related industries,” Siegel and Thompson said.

PROFIT MARGINS

Ranked by profit from contin. operations as percent of sales.

% ’90 Rank Company Return 1 United Television Inc. 40.8 2 Magma Power Co. 38.8 3 Berry Petroleum 32.9 4 Franklin Resources Inc.* 31.1 5 Autodesk Inc.* 24.9 6 Alza Corp. 24.8 7 Adobe Systems Inc.* 23.7 8 Diagnostic Products Corp. 23.2 9 Syntex Corp.* 22.5 10 Community Psychiatric* 22.2 11 Novellus Systems Inc. 20.9 12 Wesco Financial Corp. 20.7 13 MacNeal-Schwendler* 20.6 14 Cisco Systems Inc. 19.9 15 Vitalink Communications* 19.9 16 Calmat Co. 19.2 17 McGrath Rent Corp. 18.2 18 Union Exploration Corp. 17.8 19 California Energy Co.** 17.2 20 Altera Corp. 17.1 21 WD-40 Co.* 17.0 22 Acuson Corp. 16.9 23 Intel Corp. 16.6 24 Natl. Health Labs 16.5 25 Silicon Vly. Banc. 16.5

* See exceptions, page 55.

** See company notes, page 55.