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The Times 100: The Best Performing Companies in California

Head of the Class : Led by technology firms, The Times' report card on California's top performers illustrates powerful business ideas driving the state's economy.

May 07, 1996|TOM PETRUNO | TIMES STAFF WRITER

Success in business can be measured in many ways. And by some of the most important measures, this special section chronicles California's leading companies of 1995.

Now in its ninth year, the annual Times 100 listing is a series of snapshots of the Golden State's most prominent, and promising, businesses--a report card, of sorts, useful to investors, employees, entrepreneurs, competitors and anyone even marginally interested in the companies that are poised to lead California into the 21st century.

By almost any yardstick the state's major companies are an increasingly formidable force in the American and global economies.

The 100 largest California-based companies ranked by sales in 1995 had total sales of $458 billion, up 11% from 1994's 100-largest list.

In contrast, the blue-chip Fortune 500 companies' total sales rose 9.9% in 1995.

The 100 California companies whose stock market capitalization--that is, stock price times number of shares outstanding--was highest in 1995 had a total market capitalization of $624 billion as of April 19, up a stunning 35% from a year earlier.

That $624 billion represents about 10% of the capitalization of the U.S. stock market as a whole.

As has long been the case, many of the lists in this section are dominated by technology companies, an industry naturally synonymous with the very word California around the world.

Last year was, in fact, the biggest ever for Silicon Valley, as personal computer sales boomed, American industry invested heavily in all manner of productivity-enhancing electronic equipment, and the Internet became almost as ingrained a word in American culture as McDonald's or Coca-Cola.

But while technology titans such as computer networker Cisco Systems, software giant Oracle Corp. and semiconductor king Intel Corp. are among the largest and most visible California corporate success stories, The Times 100 listings provide a record of the diversity of business ideas that continue to blossom in the state:

* Los Angeles-based Viking Office Products, for example, has zoomed from $100 million to $1 billion in annual sales just since 1989 by selling office products via catalog, mainly to small businesses. The company makes more than half its sales outside the United States, and its success has often been attributed to a "fanatical" devotion to customer service.

* SunAmerica Inc., another L.A. firm, is aiming to be to investment annuities what Intel is to computer chips: the 800-pound gorilla. Through internal growth and acquisitions, SunAmerica has quadrupled its earnings since 1991, to $194 million last year, finding a ready market for its mutual-fund-like annuity products in baby boomers eager to begin seriously saving for retirement years.

* In Menlo Park, Robert Half International has grown in the 1990s into the world's largest personnel-placement firm in the fields of accounting and finance, for both temporary and permanent employees. The company, with revenue of $629 million last year, has essentially cashed in on the boom in financial services by supplying the talent that that industry needs.

The Times 100 lists also include plenty of household names, of course. Among them: Walt Disney Co., toy giant Mattel Inc., retailer Gap Inc. and the quintessential California banker, Wells Fargo & Co., which just acquired longtime rival First Interstate Bancorp.

*

At the top of the official Times 100 list, however, the state's major technology companies rule the roost.

This year, for the first time, The Times used a proprietary system to create a list of the 100 most successful California public companies of 1995.

Rather than measure success by a single variable--total sales, for example, or return on equity--the official Times 100 list that accompanies this story ranks companies using five variables, equally weighted.

Data for all of the companies were supplied by Market Guide Inc., a 13-year-old Lake Success, N.Y.-based financial information services firm.

The five variables used to determine the official Times 100 rankings:

* Market capitalization as of April 19, meaning the total value of a company's stock. The capitalization figure tells what investors collectively think a company is worth at a given moment, however inflated or deflated that judgment might appear.

* Total sales in 1995. We included sales because that figure provides the most basic indication of a company's success.

* 1995 percentage change in sales. Fast-growing companies ranked higher on our list, regardless of whether that growth was internal or by acquisition.

* 1995 percentage change in stock price. From investors' point of view, this is perhaps the most important measure of a company's success.

* Two-year average percentage return on equity. Return on equity tells how well shareholders' invested capital is being put to work by a company's management. We use a two-year figure to avoid giving too much weight to a single year's return, which can be skewed by write-offs or one-time earnings gains.

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