There is no faster way to grow than buying another company--that's why you hear a lot about corporate takeovers. And in 1994, it seems, buying was the way to grow. Like last year's Times 100 growth chart-topper Mycogen Corp., a San Diego biotechnology concern, several of the leaders in the 1994 Times Growth 100 are firms that spent last year buying other companies.
Here's a look at how California companies grew last year. First, a few that took over other companies:
ThermoLase Corp., the leader on this year's growth list, provides the most dramatic example of that strategy. The San Diego-based spinoff of a high-tech optics and signal processing firm saw its sales explode from $625,000 in 1993 to $18.6 million in 1994 after it purchased CBI Laboratories, a Texas-based manufacturer of bath and skin care products.
ThermoLase was created in January, 1993, to develop a painless hair removal system based on laser technology and plans to open its first salon later this year. The ThermoLase process--which was granted market clearance by the FDA last week--requires that the skin be treated with a lotion prior to being scanned by a laser. ThermoLase bought CBI Laboratories to have an in-house manufacturer of that specialized lotion and ended up with a multimillion-dollar personal care products business.
CBI supplies retailers like Banana Republic, Lord & Taylor and Pier One with lotions that are sold under the stores' names. It also markets its own line of products under the brand name Body Language. CBI's sales account for nearly all of ThermoLase's revenue last year.
CareLine Inc. has built its business by buying ambulance companies and has acquired 21 to date. In 1994 alone, the Santa Ana-based company bought nine ambulance services and saw its annual revenue surge 357%.
CareLine has about 700 ambulances operating in 11 states, including 150 in Los Angeles, Orange, San Bernardino, Riverside and Ventura counties. By consolidating many ambulance services under one company, CareLine has created economies of scale and reinvested savings in state-of-the-art equipment, said Brad Langdale the firm's finance director.
The ambulance industry as a whole is expected to become a $5-billion to $6-billion business as the population ages and health maintenance organizations use ambulances more frequently to transport patients to their provider groups, Langdale said.
AmeriQuest Inc. is a global distributor of computer hardware and software that completed five strategic acquisitions in 1994 and saw its revenues climb 200% to more than $220 million in 1994.
The acquisitions, executed by a brand-new management team, expanded AmeriQuest's access to the laser printer and network server markets, Senior Vice President Peter Grubstein said.
Overall, the fastest-growing companies grew much faster in 1994 than they did in 1993. This year the threshold to make the Times Growth 100 was a 53% increase in sales, compared to 26% on last year's list and 20% for 1992. In 1994, 39 companies reported sales growth of at least 100%; last year there were only five.
Some companies on the new Times Growth 100 list cultivated their businesses and saw years of preparatory work pay off with explosive sales growth in 1994. Others attribute the new revenue to sudden popularity of their product. Some examples:
Cinergi Pictures Entertainment was founded in November, 1989, but didn't begin releasing a steady stream of films until the very end of 1993, when "Tombstone" opened to enthusiastic crowds. The film, a chronicle of the life of Wyatt Earp, grossed $56 million at American box offices and sold 400,000 copies on video, with the bulk of that revenue occurring in 1994.
Additional revenue came through foreign releases, video sales and pay-per-view proceeds. Altogether, Cinergi recorded 1994 revenue of $109 million--a 1,111% increase over 1993.
J.M. Peters Co., a Newport Beach-based home builder, gained momentum last year after new management took over the then-bankrupt company in 1992. The team began building moderately-priced single-family houses in addition to high-end homes and expanded. In 1994, J.M. Peters built more than 840 homes and took in $153 million, up 168% over 1993.
DNA Plant Technology Corp., an agribusiness/biotechnology company, experienced an 82% growth in sales after introducing a tasty tomato and sweet mini-pepper marketed under the brand name "FreshWorld Farms."
DNA Plant Technology bred its tomato to have a longer shelf life, better color and "more of a sweet-acid-tomato taste," said Ellen Martin, a spokeswoman for the Oakland-based company. Consumers literally ate them up, even at a price of $1.99 a pound.
This year the company plans to begin marketing the Endless Summer tomato, which is grown from a genetically engineered seed and ripens more slowly than the average tomato. That gives it a longer shelf life without getting too mushy, Martin said.