Seven Firms in Top Ranks for 10 Years
Surviving the past decade the wrenching early ’90s recession, the frenzied dot-com runup, the bubble burst and post-Sept. 11 downturn has been no small feat.
The maelstrom pulled under many once-powerful L.A. companies.
But seven of the region’s top 25 private companies of a decade ago still rank at that position today. And there are no glitzy flashes in the pan among them.
They are Parsons Corp., California Dairies Inc., PMC Global Inc., Topa Equities Ltd., Sunkist Growers Inc., Tutor Saliba Corp. and Wherehouse Entertainment Inc.
“You have to have a pulse on what’s happening in your industry and an excellent management team in place to survive in the long term and thrive,” said Gary Korsmeier, chief executive of California Dairies. “All these companies have that or they wouldn’t still be here.”
Despite their record, it hasn’t all been good news. Two of the six reported substantially lower revenues in 2000 than they did a decade earlier and all face significant challenges in their respective industries given the current economic downturn.
And while some other, faster-rising companies at the top of the list 10 years ago have merged, been bought out or gone public, it’s also true that many of those companies have either lost their dominant positions or, in some cases, gone bust.
“It’s generally true, even for public companies, that to remain in the top 10 or 20 percent, you can’t forget what your main business is. But at the same time you can’t ignore changes in the marketplace,” said Parsons Chief Executive Jim McNulty. “These companies have done that.” Tutor-Saliba President Ron Tutor added that, “there are a lot of companies that flash in the pan. The question is where are they in 10 years? Are they still generating revenues? Are they still hiring people? Real success is something you achieve over a long period of time.”
These six are testimony to long-term staying power. Here’s a look at the paths these companies have traveled over the past decade.
Parsons Corp.
For Pasadena-based Parsons, the name of the game over the past 10 years has been diversification. During that time the company more than doubled its annual revenues from $1 billion in 1990 to $2.4 billion in 2000.
Without abandoning its core engineering and construction business, Parsons has tapped its technological expertise to move into telecommunications, pharmaceuticals and vehicle inspections. After entering that business in 1996, the company’s diagnostic machines and data transmission services now handle vehicle inspections for California and several other states.
“Parsons is not the same company it was (10 years ago), not even close,” said McNulty. “We’ve evolved and changed as the world has changed. If you don’t do that, you can’t remain a top company.”
California Dairies Inc.
Of the seven survivors, California Dairies has undergone the most dramatic makeover. Changes have included a new name and a 1999 three-way merger that combined the resources of two Northern California dairy companies under the California Dairies name and management.
“We felt, strategically, we needed to have more representation throughout California. Now we represent about 42 percent of the milk sold in California,” said Chief Executive Gary Korsmeier, adding that California is the biggest dairy-producing state in the nation.
California Dairies operates as a cooperative owned by 700 California dairy farmers. Much of the milk produced on its farms is made into butter, cheese and powder.
Korsmeier said the company’s growth has been spurred by consolidation in the supermarket industry that has left just a handful of major chains in the state.
“We needed to consolidate to be in a position to service those larger accounts,” he said.
Although per-capita milk consumption is not increasing, California Dairies has benefited from growing demand caused by the state’s expanding population. California Dairies generated revenues of $1.8 billion in 2000, up from to $531.9 million in 1990
PMC Global Inc.
It’s also been an active decade for Sun Valley-based PMC Global, a highly diversified and closely held conglomerate with more than 20 distinct companies making products ranging from semiconductors for the B-1 Bomber to saccharin to children’s bubble bath.
Although it remains near the top of the Business Journal list, with $877 million in 2000 revenue, PMC Global has seen its fortunes fall somewhat in the past decade. Its 1990 revenues were more than $1 billion.
Philip Kamins, president of PMC, said the company has focused on buying small and mid-size companies with profitable niches in a number of industries, several of them defense-related.
“For some of these larger defense companies, divisions with contracts in the $100 million to $150 million range aren’t worth it,” Kamins said. “For us, they are.”
Kamins said that over the past decade PMC has sold off several of its assets that were lagging in their respective industries.
“As Jack Welch said, ‘Unless you are No.1 or No. 2 in your industry, it’s not worth it.’ I think those companies that (have remained at the top of the list) are No. 1 or No. 2 in their industries, and that’s why they’ve survived and done well.”
Topa Equities Ltd.
Headed by one of the biggest names in Los Angeles business, John Anderson, Topa Equities is another highly diversified company that has prospered during the past decade in large part because of its flexibility.
Chief Financial Officer Brenda Seuthe said Anderson’s business empire, which now counts upwards of 30 companies in businesses ranging from insurance and automobiles to agriculture and real estate, has acquired compatible businesses while trimming underperformers to improve liquidity.
After taking a bath on its banking holdings in the early 1990s, the company sold Topa Thrift and Loan and Topa Savings in 1996 while upping its Silver Star Automotive Group with the purchase of several new dealerships.
Topa’s revenues were $866 million in 2000, up from $553 million in 1990.
“The fact that we are so closely held gives us the mobility to act quickly. We don’t need a board resolution to make a move,” Seuthe said. “Mr. Anderson is very hands-on, and he doesn’t have to answer to anybody but himself.”
Sunkist Growers Inc.
Like California Dairies, Sunkist Growers is a cooperative owned by its farmers, a network of 6,500 citrus growers in California and Arizona.
Tracing its roots back to 1893, the Sunkist brand has become one of the most established names in the agriculture industry, drawing thousands of growers into its fold.
In the past decade, foreign competition and untimely freezes have eaten into Sunkist’s revenues. The company had revenues of $847 million in 2000, enough to place it No. 18 on the Business Journal list but down from $1.1 billion a decade earlier.
Tutor-Saliba Corp.
Perhaps no company has benefited more from increased spending on public works projects in California than Tutor-Saliba, which grew its revenues to $725 million in 2000 from $447.8 million a decade earlier.
But now the company is in danger of being cut off from public money.
In July, a jury ordered Tutor-Saliba to pay the Metropolitan Transportation Authority nearly $30 million for business misconduct on the Metro Red Line in Hollywood. Tutor-Saliba is appealing.
“We have no doubt that it will be reversed and we will be vindicated,” Tutor said.
In the meantime, Tutor said, he is committed to slow, steady growth that has made the company a top public works contractor in the state.
Wherehouse Entertainment Group
None of the businesses on both the 1991 and 2001 lists of the top private companies has faced more adversity in the past decade than Torrance-based Wherehouse Entertainment, which survived a bankruptcy four years ago to climb back to 20th on the list this year.
Wherehouse revenues climbed to $858 million in 1999 from $452 million in 1990, but they dropped down to $766 million in 2000.
In 1998, Wherehouse purchased Viacom Corp.’s 378 Blockbuster Music stores, but earlier this year in the midst of an industry downturn, the far-flung music retailer sold off 64 of its stores southeast United States. Wherehouse still operates 414 stores nationwide, including 70 in Los Angeles County.
