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Who Makes Us Tick

Our annual list of the state's top-performing companies isn't the last word in rankings, but it does help tell the fascinating story of what gives California its legendary dynamism.

May 06, 1997|TOM PETRUNO | Times Market Beat columnist

To the rest of the world, California still is as much conceptual as real, still largely viewed as a "Baywatch"-like land of perpetual sun and fun, glorious natural beauty and occasional violent shaking.

It must seem implausible to many outsiders that anybody actually works here.


We all know better, of course, and the section you are holding--The Times' 10th annual listing of the most prominent, and promising, businesses that call the Golden State home--is designed to tell that story, to chronicle some of the fascinating ways that California works.

If the rest of the world knows us as inherently creative and resourceful--but perhaps only insofar as those qualities are channeled into movies, theme parks and computers--this special section should open a few minds.

As a state, we're all that--and a lot more, as the lists and company profiles in this section show:

* Up in Redwood City, far from the major East Coast medical centers, Heartport Inc. is developing its Port-Access system, a very un-Hollywood-like way to perform major heart surgery.

Instead of splitting open a patient's chest cavity--the preferred method for medical TV dramas--Port-Access allows surgeons to operate through relatively small incisions in the chest, saving patients terrible trauma and potentially saving the health-care system vast sums of money.

* While mutual fund kingpin Fidelity Investments struggles in Boston with management problems, San Mateo-based Franklin Resources Inc. has rapidly built itself into one of the premier names in the booming fund business and now manages $135 billion in customer assets, making it the fifth-largest U.S. fund company overall.

Franklin's most recent big move: acquiring the New Jersey-based Mutual Series funds last year, which brought star stock picker Michael Price under the Franklin roof.

* In Pasadena, Avery Dennison Corp. racked up $3.2 billion in revenue last year by continuing to expand its sales of self-adhesive labels and postage stamps, office products and specialty chemicals to the global market.

Mundane businesses? Maybe. But they've been terrifically profitable for Avery, which earned $176 million last year, double its 1993 profit.

* In San Diego, Remec Inc.'s modules used in microwave transmission systems are finding a new market in commercial wireless telecommunications applications, where once the defense establishment had been the only buyer. The company's total sales last year were $86 million, up from $46 million two years earlier.


Oh yes--Californians make a few computers and related parts too.

Silicon Valley companies continue to dominate many of the lists in this section, as they have for 10 years, because California continues to define and power the global technology juggernaut.

Of the 100 publicly held California companies with the highest total sales in 1996, 40% were directly involved in the technology field.

And the grand total of sales for that top 100 list was $507 billion in 1996, up 10% from 1995--a growth rate that, adjusted for inflation, was more than twice as fast as that of the U.S. economy as a whole.

Within California's technology fraternity, there is no better-known name than Intel Corp. The company whose microprocessors are the brains of more than 80% of the world's personal computers saw its sales surge 31% to $22.7 billion over the most recent four quarters, and its market capitalization reach $112 billion--making it by far the state's most valuable enterprise in Wall Street's eyes.

Yet Intel is but one manifestation of California's technological prowess.

In Irvine, Western Digital Corp. is thriving in the extraordinarily competitive business of hard disk drives, the storage device in a computer. The company's shares have more than tripled from their 1996 low as sales have boomed.

Pleasanton-based PeopleSoft Inc. has boosted sales sevenfold since 1993, to $450 million last year, thanks to its innovative software used to manage corporate data networks.

And across the state, an army of companies have rocketed to prominence in recent years by solving the problem of getting different computers to talk to one another. Networking firms such as 3Com Corp., Cisco Systems Inc., Xylan Corp. and Ascend Communications Inc. form a huge industry that barely existed 10 years ago.

Even more fascinating are the California companies at the forefront of what may be the next century's major technology-based industries.

In Santa Clara, for example, Affymetrix Inc. is developing the "GeneChip" system, by which doctors can tailor therapy to the specific genetic makeup of a patient and the disease afflicting the person.

In Thousand Oaks, Amgen Inc. remains by far the most successful U.S. biotechnology company, with $2.2 billion in sales last year. It now has plans to add 1,000 employees, the vast majority of whom will work in research and development, seeking tomorrow's wonder drugs.


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