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THE TIMES 100 : THE REGIONS : L.A.'s Latest Bloomers

April 27, 1993|DANIEL AKST | TIMES STAFF WRITER

What a year it was for Southern California business. Major firms hemorrhaged jobs, aerospace shrank at a frightening rate and riots shook the city.

In 1991, 33 of the 100 most profitable California companies (based on two- year return on equity) were headquartered in Los Angeles County. By contrast, the 1992 list has 26 Los Angeles County companies.

While Los Angeles County remains mired in recession, Northern California recovered much faster, which is one reason that so many Northern California companies are among the 100 most profitable in the state this year.

Another reason is sharply higher demand for computer products arising from plummeting prices of personal computers. Semiconductor companies and related firms concentrated in Silicon Valley were big winners from the price war.

That 1992 was a bad year in Southern California comes as a surprise to no one. But a look at the fastest-growing companies in Los Angeles County last year offers some insight into what might lie ahead for the local--and even national--economy.

The biggest category of winners was in the health care field, but the emphasis was on home health care, long-term care and other goods and services that should thrive in a nation at once aging and highly conscious of controlling medical costs.

Consider Torrance-based Total Pharmaceutical Care, which also happened to be the single most profitable company in the state. Both sales and earnings more than doubled during 1992.

Total Pharmaceutical isn't a pharmaceutical maker. Instead, it is in the business of providing intravenous therapy of nutrients or drugs to people at home, which is cheaper--and more comfortable for the patient--than a hospital.

Similarly, Sunrise Medical, based in Torrance, makes wheelchairs, therapeutic mattresses and other products aimed at patients on the mend. It ranked 11th. Salick Health Care, based in Los Angeles, ranked 12th by providing kidney dialysis and cancer treatments on an outpatient basis.

And Culver City-based GranCare Inc., fifth on the fastest-growing list in Los Angeles County, is in the health care business, but the long-term health care business, operating a chain of facilities providing medical and rehabilitative care. The graying American population is expected to result in substantial growth for this industry.

Another health-care winner was Syncor International, based in Chatsworth. Syncor is a nationwide dispenser of radiopharmaceuticals, which are used by doctors in nuclear imaging. The company also has a chain of home health-care pharmacies providing sophisticated drugs that require special preparation. Syncor ranked 14th among fast-growing Los Angeles County companies.

Inglewood-based Herbalife, second on the list, appeals to health consciousness, although the company has run afoul of government regulators in the past. Nevertheless, sales have bounced back. Herbalife sells weight-control, nutritional and cosmetic products through a network of independent distributors.

Its huge sales increase last year--109%-- was due to its expanding distributor base, especially in France, Germany and Spain. Indeed, international sales accounted for about 80% of revenue.

A trio of computer-related companies are in the top 15 as well. Merisel Inc., based in El Segundo, is a leading wholesale distributor of personal computer products. As personal computer prices drop and the machines become easier to use, companies such as Merisel benefit. Merisel ranked 10th.

Computer Sciences, also in El Segundo, helps the federal government and businesses figure out how to put computers to work, another strong business in an era of soaring computer power and falling costs. It ranked 13th in revenue growth.

And T-HQ Inc., based in Calabasas, makes recreational software for Nintendo video game systems. It is also moving into the market for Sega Genesis software. It ranked sixth.

A particular strength of T-HQ has been exploiting popular entertainment concepts; in 1991, for example, nearly half its sales came from products arising from the hit film "Home Alone."

A show business company topped the list of fast-growing firms in Los Angeles County last year: Los Angeles-based Spelling Entertainment Group, a producer of television programming, including "Beverly Hills 90210" and "Melrose Place." When Blockbuster Video recently bought a 48% stake in Spelling, it cited the need for programming it predicted will arise from the proliferation of cable channels and direct-broadcast satellites.

Indeed, the seventh-ranking growth company in the county was IDB Communications Group, based in Culver City, which supplies satellite transmission services for broadcasting.

IDB was also one of the county's hottest stock market performers. Its shares rose 81% for the 12 months ended April 20.

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