THE TIMES 100 / THE BEST PERFORMING COMPANIES IN AMERICA : THE REGIONS : L.A.’s Mixed Crop
LOS ANGELES COUNTY, still lagging the state as it enters a long-awaited economic recovery, once again is underrepresented on this year’s list of California’s most profitable companies.
Only 27 firms based in Los Angeles County are listed on The Times 100, which ranks companies based on average two-year return on equity. That compares to 26 Los Angeles County firms that made the list in 1992 and 33 in 1991. The low figures are due in part to the fact that the list tends to highlight newer companies in younger industries, and Southern California is still struggling to emerge from a punishing four-year recession.
The good news is that a number of Los Angeles County firms premiered on or returned to The Times 100 last year, several of them representing economic sectors considered crucial to the region’s future well-being: health care (Herbalife and Maxicare Health Plans Inc.), entertainment and leisure (Samuel Goldwyn Co., United Television and Leslie’s Poolmart), business services (Mercury General) and environmental services (Tetra Tech).
But for every Los Angeles County company that moved up in rank on this year’s Times 100, three saw their positions slip--including well-established firms such as Walt Disney Co., Mattel Inc. and Countrywide Credit Industries Inc.
Herbalife International Inc., an Inglewood-based maker of dietary and nutritional supplements that has been dogged by controversy, vaulted to the No. 1 spot on the list, with a whopping 142.2% average two-year return on equity.
Herbalife also continues to grow strongly, ranking No. 3 in the county among companies with the fastest sales growth: up 70% to $364.7 million, with $41.2 million in profit.
Investors apparently have taken note: Herbalife’s stock price has soared over the past year, rising from about $10 a share a year ago to $19.875 on Friday.
The company’s products are marketed through a network of independent distributors who in turn sell directly to consumers--a so-called multilevel marketing plan that has raised regulatory eyebrows in the past.
Maxicare Health Plans, a Los Angeles-based health maintenance organization, is again in the pink, occupying the No. 6 position on The Times 100--following a disastrous acquisition binge in the 1980s and a resulting bankruptcy reorganization.
Rapid growth financed by junk bonds took Maxicare to a peak of 2.2 million members in 42 health plans in 26 states, rivaling industry leader Kaiser Permanente in size.
But inability to manage the resulting debt led to management upheavals and Chapter 11 bankruptcy, from which the company emerged in December, 1990, with 270,000 members and seven plans in its core operating states of California, Indiana, Illinois, Louisiana, North Carolina, South Carolina and Wisconsin.
Income has been up and down since then. In 1993, the company reported net earnings of $5.6 million on revenue of $440.1 million.
But membership has grown to more than 300,000. And by focusing more on acting as a middleman manager for health care plans, the company is poised for future expansion, said investment banker Chriss W. Street in Corona del Mar. “They are growing faster than the average HMO, around 20% to 25% annually,” he said.
Samuel Goldwyn Co., which distributes art and specialty films and also produces more general features, had a 35.2% average two-year return on equity, placing it No. 18 on The Times 100. It is a modest firm by Hollywood standards, with $124.4 million in sales and $4.4 million in profit. But that represents earnings growth of 389% over 1992, and Goldwyn has managed to beat the odds for independent film companies.
Its 1993 releases included the art house hits “Much Ado About Nothing” and “The Wedding Banquet.” In stark contrast, the company also produces the popular television program “American Gladiators.”
The firm was established in 1979 by Samuel Goldwyn Jr., son of the legendary mogul, and it owns the rights to films the senior Goldwyn produced, including “Wuthering Heights,” “The Best Years of Our Lives” and “Guys and Dolls.”
Mercury General Corp. is in the prosaic business of insurance. Its two subsidiaries, Mercury Casualty Co. and Mercury Insurance Co., write automobile policies primarily in California.
The company had a 26.2% return on shareholder equity, ranking it No. 40 on The Times 100. It posted earnings of $96.2 million on revenue of $398.5 million.
Among other firms on the list, some of Los Angeles County’s most notable corporations saw their rankings slip in 1993.
Walt Disney Co., the Burbank-based entertainment conglomerate, slipped from No. 54 to No. 97 as profit fell last year, largely due to the poor performance of the Euro Disney theme park near Paris. Even so, the company remained the county’s profit leader in 1993, with income of $764.8 million.
Similarly, toy maker Mattel Inc. dropped to No. 31 on The Times 100, down from No. 14 last year, as earnings dipped partly due to costs from the takeover of rival Fisher-Price Inc., in a deal valued at more than $1 billion.
Last month, the El Segundo-based creator of the Barbie doll extended its buying spree by swallowing up Kransco, maker of Wham-O toys such as the Hula Hoop and Frisbee, consolidating its position as the world’s largest toy company.
Countrywide Credit Industries Inc., the Pasadena-based parent of the nation’s largest residential mortgage lender, saw its position drop to 47th from 27th simply because its equity capital grew faster than its revenue or earnings, said analyst E. Gareth Plank at Mabon Securities Inc. in San Francisco.
Indeed, Countrywide loaned at record levels in 1993 due to falling interest rates and the boom in home mortgage refinancings, giving the firm the county’s fifth-fastest revenue growth (63%) in 1993 and making it the county’s No. 8 profit leader, with $171.4 million in income.
Los Angeles County Profit Leaders
Companies ranked by profit from continuing operations.
1993 Change Income in Income Rank Company ($ millions) ($ millions) 1 Walt Disney Co. 764.8 -118.9 2 SCE Corp. 679.8 -101.2 3 First Interstate Bancorp 561.4 279.1 4 Lockheed Corp. 422.0 74.0 5 Unocal Corp. 343.0 147.0 6 Atlantic Richfield Co. 269.0 -924.0 7 Pacific Enterprises 191.0 48.0 8 Countrywide Credit Indus. 171.4 48.4 9 National Medical Enterprises 170.9 51.8 10 Times Mirror Co. 164.1 128.8 11 Litton Industries 143.5 53.7 12 Sunamerica Inc. 138.6 48.2 13 Mattel Inc. 135.9 -8.0 14 20th Century Industries 108.6 -8.9 15 Hilton Hotels Corp. 102.7 -1.2
Source: STAR Services.
Los Angeles County Revenue Leaders
Companies ranked by overall revenue.
1993 Revenue % Change Rank Company ($ Millions) From 1992 1 Atlantic Richfield Co. 17,189.0 -2 2 Lockheed Corp. 13,071.0 29 3 Walt Disney Co. 8,865.1 11 4 Occidental Petroleum 8,116.0 -4 5 SCE Corp. 7,821.1 -2 6 Unocal Corp. 7,261.0 -18 7 Vons Cos. 5,074.5 -9 8 Northrop Corp. 5,063.0 -9 9 Litton Industries 4,898.8 19 10 Times Mirror Co. 3,714.2 3 11 First Interstate Bancorp 3,628.2 -6 12 National Medical Enterprises 3,434.9 -3 13 Merisel Inc. 3,085.9 38 14 Great Western Financial 2,978.3 -11 15 Pacific Enterprises 2,899.0 0
Source: STAR Services.
Los Angeles County Revenue Growth Leaders
Companies ranked by 1993 sales growth.
1993 1993 Annual Sales Revenue Rank Company Growth % ($ millions) 1 IDB Communications 100 310.7 2 Insurance Auto Auctions 72 104.1 3 Herbalife International Inc. 70 364.7 4 GranCare Inc. 68 508.0 5 Countrywide Credit Indus. 63 937.1 6 Trimark Holdings 49 79.9 7 Mattel Inc. 46 2,704.4 8 Xircom Inc. 45 91.4 9 Kushner-Locke Co. 45 44.0 10 Special Devices 42 43.1 11 Dick Clark Productions 40 55.1 12 Merisel Inc. 38 3,085.9 13 Information International 35 41.6 14 Jefferies Group Inc. 35 318.1 15 Sunrise Medical 35 384.1
1993 Profit/Loss Rank ($ millions) 1 20.1 2 6.6 3 41.2 4 12.2 5 171.4 6 4.5 7 135.9 8 11.3 9 -2.2 10 1.7 11 2.4 12 30.4 13 -3.6 14 27.6 15 21.7
Source: STAR Services.
Los Angeles County Market Value Leaders
Companies ranked by stock market valuation.
4/8/94 Market Value Book Value Market as Rank Company ($ millions) ($ millions) % of Book 1 Walt Disney Co. 22,552.8 5,407.6 417 2 Atlantic Richfield Co. 15,167.3 6,694.0 227 3 SCE Corp. 7,387.7 5,978.5 124 4 Unocal Corp. 6,090.1 2,625.0 232 5 First Interstate Bancorp 5,700.2 3,137.7 182 6 Occidental Petroleum 4,902.1 3,418.0 143 7 Mattel Inc. 4,210.7 629.2 669 8 Lockheed Corp. 4,030.0 2,304.0 175 9 Times Mirror Co. 4,001.9 1,751.7 228 10 Wellpoint Health Networks 3,121.3 1,142.0 273 11 Hilton Hotels Corp. 2,725.6 1,038.1 263 12 National Medical Enterprises 2,673.5 1,475.7 181 13 Great Western Financial 2,127.0 2,441.9 87 14 Northrop Corp. 1,958.9 1,370.0 143 15 Computer Sciences Corp. 1,841.6 765.9 240
Source: STAR Services.
Los Angeles County Stock Leaders
Companies ranked by percent gain in stock price.
% Change 4/8/94 3/31/93 Stock Stock Stock Rank Company Price Price Price 1 Westwood One 236 8.62 2.56 2 Xircom Inc. 202 23.75 7.88 3 Rexhall Industries Inc. 186 7.87 2.75 4 Herbalife International Inc. 151 24.50 9.75 5 Aura Systems Inc. 138 8.62 3.63 6 IDB Communications 106 17.50 8.49 7 Glendale Federal Bank 100 5.75 2.88 8 Players Int’l. Inc. 80 20.50 11.37 9 National Medical Enterprises 75 16.00 9.13 10 Mercury Air Group Inc. 73 4.75 2.75 11 Viking Office Products 65 49.37 30.00 12 Summit Care 64 20.50 12.50 13 Earth Technology 63 12.00 7.38 14 Merisel Inc. 62 18.62 11.50 15 Foothill Group 58 14.25 9.00
Source: STAR Services.
