THE TIMES 100 : The Best Performing Companies in California : REGIONAL PROFILES : San Diego Muscles 4 More Onto Big List : Four newcomers on The Times 100 are from varied industries, but all weathered profound changes to make the cut.
The number of San Diego County companies on The Times 100 list jumped to six in 1990, up from only two in the previous two years.
Two of the leaders on the two-year average return on equity list, which was developed by MZ Group of San Francisco, are old standbys: WD-40, the manufacturer of the familiar all-purpose lubricant that comes in the blue and yellow can, and Price Co., the inventor of the membership warehouse concept, which now has 67 locations nationwide and in Canada.
But four are newcomers to the list, and if there is a common trait among them, it is that each has adjusted well to profound changes within their industries:
* Magma Power, a geothermal energy producer with four Imperial Valley plants that generate an aggregate 138 megawatts of power, has capitalized on state-legislated incentives introduced in the mid-1980s to stimulate alternative energy development. Magma Power used the incentives to lock up what are now highly lucrative contracts with Southern California Edison.
* Medical Imaging Centers of America, a provider of imaging and X-ray services to hospitals and doctors, has exploited opportunities arising as the government and private medical insurers cut expense reimbursement.
* First National Bank, a home-grown, eight-branch financial institution with $584 million in assets, has boosted its profits in part through timely purchases of $1.4 billion in mortgage loans that were taken over by the Resolution Trust Corp. from failed thrifts. The bank’s merger in 1987 with National Bank of La Jolla and National Bank of Fairbanks of Ranch of San Diego is beginning to bear fruit, its officers say.
* Cubic Corp., a company that is perhaps best known for its “Top Gun” computerized pilot training system, is one defense contractor that isn’t wringing its hands over budget cutbacks. The company diversified into elevators and automatic fare-collection devices. Chairman Walter Zable says each business segment is “showing excellent performance.”
Some sad songs were heard in San Diego, however, and the city continued to lose headquarters offices. Those of Cipher Data Products and Oak Industries, two of San Diego’s top revenue producers, left town, the former via merger and the other by relocation. Triton Group of La Jolla merged with Intermark, also of La Jolla.
The savings and loan debacle came home to roost, as three San Diego-based S&Ls; struggled through varying degrees of crisis. Faring worst was Imperial Corp. of America, whose insolvent Imperial Savings unit was taken over by regulators early last year. The thrift was dismembered this month when its 78 branches were divided and sold by regulators to Bank of the West and Household Bank.
Great American Bank, whose net worth was obliterated by losses stemming from bad loans in Arizona and California, avoided a government seizure--at least temporarily-- when it announced a deal last July to sell 130 California branches to Wells Fargo Bank. The S&L;’s outside auditor, however, expressed doubts this month about its ability to survive.
HomeFed Bank, once thought to be strong enough to survive the S&L; shakeout, was also rocked by growing loan problems and a $248-million loss last year. The problems pushed its nonperforming asset level to an alarming 6.4% of total assets. As a result, HomeFed stock took an 84% plunge during the year, earning it the No. 2 rank on the statewide Falling Behind list. Statewide, only the shares of First Executive Corp. fared worse on a percentage basis in 1990.
Intermark, a La Jolla-based holding company with more than $1 billion in revenue during calendar 1990, also saw its stock take a nose dive as a result of losses and debt problems. To meet its obligations, Intermark announced this month that it will sell most of the common stock it holds in Pier 1 Imports, a Ft. Worth retail chain that is 52% owned by Intermark.
But for companies such as Magma Power and WD-40, last year was positive indeed. Besides placing among the statewide leaders in terms of two-year average return on equity, the companies made The Times’ top 25 most profitable list in operations profit figured as a percentage of gross revenue.
Geothermal power producer Magma Power has risen to prominence by virtue of having solved the sticky problem of how to efficiently treat Imperial Valley geothermal brine, a superheated liquid from which energy-giving steam is extracted. The process was complicated by the brine’s high amount of dissolved solids.
Having mastered the technical problems with the help of engineers at Dow Chemical, which owns a 42% stake in the company, Magma Power embarked on an aggressive expansion program, building three new plants in two years, the last of which opened early last year. The added power capacity was directly responsible for Magma Power’s revenue and profit growth.
Over the years, WD-40 has made shareholders happy not only by being profitable, but by returning a hefty percentage of the profits back to shareholders as dividends. A special dividend last year combined with WD-40’s regular payout meant shareholders pocketed 98% of profits, President Jack Barry said.
WD-40, whose average return on equity of 41.4% during the past two years earned it fourth place on this year’s Times 100 list, remains a one-product company, selling only the lubricant of the same name. Now available in more than 140 countries, WD-40 is used to fix or enhance a variety of things, from rusty hinges to fish bait. And scores of faithful consumers swear that a little dab of WD-40 relieves arthritis, although the company disclaims the chemical’s therapeutic use.
In an interview, Barry cautioned that worldwide sales of the product invented in 1955 has begun to level off and that his company would like to acquire a second product. “We’ve got our eyes out, but there’s nothing waiting in the wings, I’m sorry to say,” Barry said.
After several years of following a relatively conservative approach to growth, Price Co. announced this year that it will step up expansion. The most profitable operator of discount warehouses, Price will add up to a dozen new Price Clubs annually during the next several years. The consistently top-performing company placed 44th on this year’s Times 100, up slightly from No. 47 last year.
SAN DIEGO COUNTY PROFIT LEADERS
Companies ranked by profit from continuing operations.
1990 Change income in income Rank Company ($ millions) ($ millions) 1 San Diego Gas & Electric 207.8 20.7 2 Price Co.* 125.4 8.3 3 National Health Laboratories 82.6 17.9 4 Magma Power Co. 30.2 7.9 5 Cubic Corp.* 23.0 5.4 6 WD-40 Co.* 15.5 (0.3) 7 First National Corp. 6.5 1.2 8 Chart House Enterprises Inc. 6.5 1.9 9 Medical Imaging Ctrs. of Amer. 6.2 2.2 10 DH Technology Inc. 6.0 0.1 11 Maxwell Laboratories Inc. 3.9 0.3 12 BSD Bancorp Inc. 3.4 (0.0) 13 Cohu Inc. 2.7 .3 14 Mission West Properties 2.4 2.2 15 GTI Corp. 2.3 0.4
* See exceptions, page 55.
SAN DIEGO COUNTY REVENUE LEADERS
Companies ranked by overall revenue.
1990 revenue % change Rank Company ($ millions) from 1989 1 Price Co.* 5,412.3 8 2 Homefed Corp. 1,875.0 -1 3 San Diego Gas & Electric 1,771.9 -15 4 Great Amer. Bank San Diego 1,543.8 -3 5 Intermark Inc.* ** 1,229.8 32 6 Rohr Industries* 1,078.7 3 7 National Health Laboratories 501.9 25 8 Cubic Corp.* 352.8 1 9 PS Group Inc. 272.3 16 10 Advanced Marketing Services 180.0 -13 11 Beeba’s Creations Inc.* 158.0 23 12 Chart House Enterprises Inc. 154.0 10 13 Titan Corp. 124.0 27 14 WD-40 Co.* 91.0 8 15 Wavetek Corp. 90.6 6
* See exceptions, page 55.
** See company notes, page 55.
Source: MZ Group. Certain historical data is from Standard & Poor’s Compustat Inc.
SAN DIEGO COUNTY REVENUE GROWTH LEADERS
Companies ranked by two-year average annual sales growth rate.
2-year avg. 1990 annual sales revenue Rank Company growth % ($ millions) 1 Intermark Inc.* ** 32.5 1,229.8 2 GTI Corp. 29.0 54.3 3 Psicor Inc.* 28.1 61.8 4 Beeba’s Creations Inc.* 24.2 158.0 5 First National Corp. 21.3 65.0 6 Cohu Inc. 14.4 43.9 7 Price Co.* 14.3 5,412.3 8 Maxwell Laboratories Inc. 12.7 84.0 9 PS Group Inc. 12.3 272.3 10 BSD Bancorp Inc. 12.0 58.3 11 Rohr Industries* 9.1 1,078.7 12 Homefed Corp. 9.0 1,875.0 13 Titan Corp. 8.7 124.0 14 Advanced Marketing Serv. 7.6 180.0 15 WD-40 Co.* 6.6 91.0
1990 income (loss) Rank ($ millions) 1 (67.556) 2 2.332 3 1.655 4 (3.399) 5 6.535 6 2.728 7 125.383 8 3.856 9 (10.030) 10 3.382 11 0.039 12 (247.518) 13 2.249 14 (0.980) 15 15.490
* See exceptions, page 55.
** See company notes, page 55.
Source: MZ Group. Certain historical data is from Standard & Poor’s Compustat Inc.
SAN DIEGO COUNTY MARKET VALUE LEADERS
Companies ranked by stock market valuation.
4/12/91 market value Book value Rank Company ($ millions) ($ millions) 1 Price Co.* 2,571.1 616.3 2 San Diego Gas & Electric 2,482.7 1,445.8 3 National Health Laboratories 1,733.7 256.7 4 Magma Power Co. 721.5 192.6 5 Rohr Industries* 347.7 413.7 6 PS Group Inc. 346.2 217.9 7 Molecular Biosystems Inc. 218.8 33.6 8 WD-40 Co.* 211.6 39.0 9 Cubic Corp.* 152.4 143.5 10 Medical Imaging Ctrs. of Amer. 144.6 55.2 11 Mail Boxes Etc. 118.9 26.2 12 Homefed Corp. 94.0 973.3 13 Burnham Pacific Ppty. Inc. 93.8 71.0 14 Chart House Enterprises Inc. 67.0 60.5 15 Psicor Inc.* 52.5 18.6
Market as Rank % of book 1 417 2 172 3 675 4 375 5 84 6 159 7 651 8 543 9 106 10 262 11 454 12 10 13 132 14 111 15 283
*See exceptions, page 55.
SAN DIEGO COUNTY STOCK LEADERS
Companies ranked by percent gain in stock price.
% change 4/12/91 4/12/90 stock stock stock Rank Company price price price 1 PS Group Inc. 92.8 63.38 32.88 2 GTI Corp. 62.8 4.38 2.69 3 National Health Laboratories 59.1 17.50 11.00 4 Price Co.* 45.9 53.25 36.50 5 Psicor Inc.* 39.5 13.25 9.50 6 Medical Imaging Ctrs. of Amer. 18.7 13.50 11.38 7 Cubic Corp.* 17.6 23.38 19.88 8 San Diego Gas & Electric 6.6 44.38 41.63 9 Rohr Industries* 3.2 19.88 19.25 10 Maxwell Laboratories Inc. 0.0 13.75 13.75 11 WD-40 Co.* -11.8 28.00 31.75 12 Magma Power Co. -13.7 31.50 36.50 13 BSD Bancorp Inc. -22.9 6.75 8.75 14 First National Corp. -25.5 13.88 18.63 15 Beeba’s Creations Inc.* -32.9 7.13 10.63
*See exceptions, page 55.
