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For Some Firms, Temblor Means a Jolt to Profits : Disaster: Damage varies from structural to losses in sales. Mortgage lenders and insurers will be grappling with impact into the future.


Just as the physical force of the Northridge earthquake hopscotched around the Valley, picking and choosing the victims of its worst punishment, some local companies are taking a hit to their bottom lines because of lost business.

The problems cited include damage to facilities and merchandise, and lost sales in the days after the quake. Some insurance companies face big payouts for claims. Financial institutions could suffer if homeowners walk away from their mortgages.

Datametrics Corp., a Chatsworth maker of computer printers and communications products, was one of the first to announce that because of earthquake-related setbacks it will post a loss for its fiscal first quarter ended Jan. 31. A year earlier, Datametrics earned $300,000 on revenue of $5.3 million.

The company was shut down for four days after the quake because it had no electricity. Later, shipments of materials used in Datametrics products didn't arrive. The delays were particularly damaging because they came at the end of the quarter and because the recession has forced companies like Datametrics to time shipments very tightly.

"It's like the nail in the horse's shoe that makes you lose the war," said Datametrics Chief Executive Sidney E. Wing. "You can't ship because of a 50-cent component."

The company also suffered, Wing said, because workers needed time off to deal with personal problems. And every time an aftershock rattled, "they wanted to get out of the building," even though city building inspectors deemed the structure safe.

Beverly Hills Fan Co. in Woodland Hills estimated that as much as $200,000 of its $2-million inventory of ceiling fans was destroyed when it fell off shelves and was soaked by water. None of those products were earthquake-insured.

"There will be an impact on quarterly earnings," Controller Neil MacDonald said. Fortunately for Beverly Hills Fan, before the earthquake it had already rung up $1.6 million in sales, double the total sales for the first quarter a year earlier. The company said that if it posts a profit this quarter it will be a small one.

Art publisher and retailer Martin Lawrence Limited Editions Inc. in Van Nuys also said its first-quarter sales would probably be "significantly" lower because of the earthquake as well as the severe cold in the Midwest and East Coast. The firm hopes to recover at least some quake-related losses from its insurer.

Martin Lawrence said that quake damage has kept its galleries closed in the Northridge Fashion Center and Sherman Oaks Fashion Square shopping malls. Also, the company's headquarters was shut down for two weeks after the temblor.

In the quarter ended March 31 last year, Martin Lawrence lost $1.7 million on $4.7 million in revenue.

Computer software distributor Kenfil Inc. in Van Nuys said that $3 million to $4 million of uninsured inventory was destroyed in the quake, and its operations were halted for about two weeks afterward. That will hurt profits, said Chief Financial Officer Peter Grubstein, although he wouldn't say by how much.

Among those companies likely to feel an earnings bite from the earthquake are property-casualty insurers.

20th Century Industries, the Woodland Hills parent of 20th Century Insurance Co. and 21st Century Casualty Co., estimated its quake claims at $160 million. After taxes and reinsurance, that total will drop to $62.9 million.

"The vast majority of that will be in the first quarter," said Richard Dinon, senior vice president at 20th Century, the state's sixth-largest carrier of earthquake insurance. In the first quarter of 1993, the company earned $23.9 million on $263.1 million in revenue.

However, at Amwest Insurance Group Inc., the earthquake "is going to be immaterial" to earnings, said Steven R. Kay, chief financial officer. That's because the Woodland Hills company specializes in writing surety bonds guaranteeing construction and other projects. In fact, said Kay, Amwest might benefit if the earthquake spurs rebuilding. "That's what you need surety bonds for. It could be an opportunity for us."

Banks and savings and loans also stand to feel some pain from the earthquake. American Pacific State Bank in Sherman Oaks, one of the nation's largest Small Business Administration lenders, cited the Northridge earthquake as one reason it added to its loan-loss reserves for 1993. As a result, its earnings declined 54% in its fourth quarter ended Dec. 31, to $197,899 from $430,556 a year earlier.

Great Western Financial Corp. said it did not expect a "material loss" from the quake. Two buildings at its large Chatsworth complex were badly damaged, but rebuilding costs should be covered by the savings and loan company's insurance, said spokesman Steve L. Hawkins. "So there won't be a huge financial hit in the first quarter because of that."

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