THE TIMES 100 : The Best Performing Companies in California : THE GIANTS : A Tough Year in California’s Big Leagues

What a difference a year makes, especially when it’s a year spent slogging through the mire of an unexpectedly harsh downturn.

The recession that came late to California in 1990 settled in for a yearlong stay in 1991, plaguing the economy, industry by industry. California’s vaunted diversity, which has long made it the envy of other regions, offered little protection.

In a rare display of weakness, the state’s biggest publicly held companies saw sales tumble 4% to just under $371 billion in 1991. Held up beside the Fortune 500’s overall revenue decline of 1.8%, that provided another brutal piece of evidence that the recession tarnished the Golden State more than it did much of the rest of the country.

Among the corporations on The Times Sales 100 list--a roster of the largest publicly held companies in California in terms of 1991 revenue--34 had lower sales, and 18 had flat revenue or showed paltry gains.

Although a handful of companies managed stellar revenue increases--notably Amgen Inc., the Thousand Oaks pharmaceutical stand-out (up 79%), and disk drive concern Quantum Corp. (up 50%)--most banks, savings and loans, energy companies and aerospace and defense concerns stumbled in the sour economy. The overall sales total also suffered from the loss of two big insurance holding companies that came to signify the debacle in junk bonds. Both filed for Chapter 11 bankruptcy protection.

“It’s all recession,” said Robert K. Arnold, senior economist at the Center for Continuing Study of the California Economy in Palo Alto. “It’s all over the place.”

During 1991, the state lost an estimated 333,000 non-farm jobs. Real estate, retailing and banking--previously among the state’s robust industries--experienced dramatic downturns.

With consumer confidence, investment and government spending on the slide, Arnold said, the drop in sales should come as no surprise.

Shifting fortunes and economic vagaries were perhaps most marked in the energy sector. Sales at Chevron Corp., the San Francisco behemoth that is traditionally tops in revenue, showed a 6% drop in 1991, to $36.5 billion. The year before, sales had grown a whopping 41% over 1989 levels, partly on the strength of rising oil and gas prices as the nation geared up for the war with Iraq.

John S. Watson, Chevron’s manager of investor relations, noted that cutthroat price wars on the West Coast and dropping oil and gas prices combined to make it a tough year.

“The recession and the general decline in demand for gasoline made it a buyer’s market,” Watson said. “Margins were squeezed, and our earnings reflected that.” Profit dived 40% in 1991, to $1.3 billion.

Revenue also slipped at Arco and Unocal Corp. and plunged at Occidental Petroleum Corp., which has been unloading assets in a long-awaited overhaul since the death of its chairman, Armand Hammer.

Nine newcomers made the 1991 sales list, some of them by bucking trends.

AST Research Inc., a maker of desktop and portable notebook computers based in Irvine, vaulted into the 82nd spot as sales rose 41%. Amgen, propelled by sales of its anemia-fighting drug Epogen, made its debut at No. 89. Silicon Graphics, which has a fast-growing business in sophisticated computers with state-of-the-art graphics, came aboard in the 93rd slot.

Thanks to a strong backlog of orders that came in before the construction industry collapsed, Granite Construction in Watsonville managed to boost revenue enough to make the list.

Other joiners included Zenith National Insurance Corp. of Woodland Hills and Fremont General Corp. of Santa Monica, which sell workers’ compensation insurance; Smart & Final Inc., a Santa Barbara-based retailer (see Page 18); National Health Laboratories, a fast-growing provider of clinical diagnostic laboratory services in La Jolla, and Applied Materials, a Santa Clara producer of equipment to make semiconductors, which has an impressive sales base in Japan.

Three companies were swept off the list because they filed for Chapter 11. They were Los Angeles-based retailer Carter Hawley Hale Stores, owner of the Broadway, and First Executive Corp. and First Capital Holdings Corp. The insurance subsidiaries of the two Los Angeles holding companies, built largely on the strength of junk bond investments, were seized by regulators.

Argonaut Group, a workers’ compensation insurance company based in Los Angeles, dropped off the list primarily because of lower premium volume. The company said in its current annual report that premium volume was reduced by more selective underwriting and significantly lower payrolls for many of its insured customers, reflecting the recession.

Great American Bank of San Diego, which had sold the bulk of its branches to Wells Fargo in 1990, was seized by federal regulators in 1991. Live Entertainment, a Van Nuys video distributor and retailer mostly owned by troubled Carolco Pictures Inc., suffered from shrinking sales.

Other companies that fell off the list include Businessland, a troubled computer retailer bought by JWP Inc., an engineering and construction firm.

The Sales 100

Companies ranked by overall revenue.

1991 Pct. ’90 sales change Rank Rank Company ($ millions) from ’90 1 1 Chevron Corp. * 36,461.0 -6 2 3 Atlantic Richfield Co. 17,037.0 -9 3 4 Safeway Inc. 15,119.2 2 4 5 Hewlett-Packard Co. * 14,949.0 10 5 7 BankAmerica Corp. 12,133.0 -2 6 6 Rockwell Intl. Corp. * 11,549.4 -7 7 2 Occidental Petroleum Corp. 10,096.0 -53 8 11 Pacific Telesis Group 9,895.0 2 9 8 Unocal Corp. 9,845.0 -8 10 10 Lockheed Corp. 9,809.0 -1 11 12 Pacific Gas & Electric 9,778.1 3 12 13 McKesson Corp. 9,710.7 16 13 9 Security Pacific Corp. 8,921.6 -14 14 15 SCE Corp. 7,502.5 4 15 23 Price Co. * 7,056.2 22 16 17 Transamerica Corp. 6,815.3 2 17 14 Fluor Corp. 6,741.7 -9 18 20 Walt Disney Co. * 6,626.6 10 19 16 Pacific Enterprises 6,599.0 -5 20 21 Apple Computer Inc. * 6,496.0 13 21 19 Wells Fargo & Co. 5,861.0 -2 22 22 Northrop Corp. 5,694.2 4 23 25 Litton Industries Inc. * 5,350.8 3 24 24 Vons Cos. 5,350.2 0 25 18 First Interstate Bancorp. 5,119.7 -15 26 27 Bergen Brunswig Corp. * 4,960.5 9 27 30 Intel Corp. 4,778.6 22 28 26 H. F. Ahmanson & Co. 4,592.1 -4 29 29 Consolidated Freightways 4,082.3 -3 30 31 National Medical Enterprises 3,972.7 6 31 28 Great Western Financial 3,952.7 -6 32 32 Times Mirror Co. 3,624.1 0 33 38 Sun Microsystems Inc. * 3,454.7 25 34 34 Dole Food Co. 3,216.0 7 35 33 Teledyne Inc. 3,206.8 -7 36 39 Seagate Technology * 2,668.7 0 37 36 Avery Dennison Corp. 2,545.1 -2 38 47 Gap Inc. 2,518.9 30 39 40 American President Cos. 2,448.7 8 40 41 Longs Drug Stores Inc. * 2,398.3 6 41 44 Golden West Financial Corp. 2,241.5 5 42 51 Computer Sciences Corp. 1,944.7 16 43 46 Tandem Computers Inc. * 1,932.9 3 44 37 Glenfed Inc. * 1,910.7 -18 45 53 Syntex Corp. * 1,870.7 18 46 48 San Diego Gas & Electric 1,789.0 1 47 42 CalFed Inc. 1,751.1 -19 48 43 Amdahl Corp. 1,702.5 -21 49 55 Clorox Co. * 1,678.7 8 50 49 National Semiconductor * 1,655.9 -4 51 50 Union Bank 1,632.7 -3 52 56 Mattel Inc. 1,621.7 10 53 60 Conner Peripherals 1,599.0 20 54 65 Merisel Inc. 1,585.4 33 55 45 HomeFed Corp. 1,528.0 -19 56 54 Fleetwood Enterprises 1,514.2 4 57 57 Rykoff-Sexton Inc. * 1,471.2 2 58 75 FHP International Corp. * 1,430.1 24 59 68 Rohr Inc. * 1,395.0 13 60 62 Varian Associates Inc. * 1,366.0 8 61 76 Pacificare Health Systems * 1,312.9 26 62 66 Raychem Corp. * 1,272.6 6 63 63 Potlatch Corp. 1,237.0 -1 64 58 Kaufman & Broad Home Co. 1,221.0 -11 65 73 MagneTek Inc. * 1,171.1 6 66 71 Advanced Micro Devices 1,126.6 6 67 72 Oracle Systems Corp. * 1,085.2 2 68 67 Hilton Hotels Corp. 1,082.4 -0 69 91 Quantum Corp. * 1,073.6 50 70 79 Foundation Health Corp. * 1,032.9 7 71 81 Jacobs Engineering Group * 1,025.8 10 72 87 Maxtor Corp. * 961.0 22 73 82 Caesars World * 951.3 7 74 77 Unocal Exploration Corp. * 923.7 1 75 89 Pathe Communication Corp. 921.7 75 76 70 Western Digital Corp. * 915.9 -14 77 86 20th Century Industries 906.8 13 78 69 Coast Savings Financial Inc. 899.0 -17 79 88 Ross Stores Inc. * 896.9 15 80 85 Beckman Instruments Inc. 857.9 5 81 80 Allergan Inc. 839.3 -5 82 AST Research Inc. * 827.3 41 83 84 Broad Inc. * 814.3 -7 84 96 Charles Schwab Corp. 795.2 27 85 92 First American Financial 756.8 7 86 93 American Building Maint. 745.7 10 87 95 LSI Logic Corp. 697.8 6 88 83 Guy F. Atkinson Co. 684.0 -23 89 Amgen Inc. 682.0 128 90 Smart & Final Inc. 663.1 17 91 Applied Material * 661.0 15 92 94 Adia Services Inc. 643.7 -3 93 Silicon Graphics Inc. * 637.9 32 94 99 Pinkerton’s Inc. 637.8 9 95 78 L.A. Gear Inc. 618.1 -31 96 National Health Laboratories 603.9 20 97 Fremont General Corp. 581.2 1 98 Granite Construction Inc. 564.1 1 99 100 Marshall Industries * 563.0 -3 100 Zenith National Insurance 546.3 17

* See exceptions, Page 54.

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