THE TIMES 100 : The Best Performing Companies in California : The Bottom Line : Recession Leaves Its Mark as Many Firms Finish Lower : More than a third of the companies on last year’s Times 100 profitability list didn’t make it this time.

Fresh-scrubbed Neutrogena Corp., calorie-meister Dreyer’s Grand Ice Cream and the less-than-prescient Oracle Systems Corp. have something in common: The soap company, ice cream maker and computer software firm all lost ground on The Times 100 list of the state’s most profitable companies.

Indeed, the recession left its fingerprints all over The Times 100, which ranks California’s publicly held companies based on a two-year return on equity. Twenty-five firms were pushed down the roster, and an additional 39 companies fell off altogether.

The Times 100 measurement is a key indicator of how effectively a company is using its shareholders’ money. The two-year ROE is calculated by subtracting dividends from net income and then dividing that number by net worth.

The median two-year return on equity for 1990 edged lower to 20.8% from 21.8% on the previous year’s list. The top ROE, belonging both years to Adobe Systems, was 56.7% in 1990 compared to 63.8% in 1989. The lowest ROE slipped to 14.8% from 15.6% in 1989.

(However, 1989 boasted a greater number of sliders, at 40. A total of 37 companies fell off from the previous year’s tally.)

Some of the state’s biggest and best-known companies slipped on The Times 100 or failed to appear this year. Represented among those that fell to earth were aerospace firms, computer companies and financial institutions. Some of the big names were: Rockwell International (fell to 74 from 54), L.A. Gear (dropped to 11 from 2), Hewlett-Packard (sank to 105 from 85), Sizzler Restaurants International (tumbled to what would be 113 from 98) and Carl’s Jr. operator Carl Karcher Enterprises (plunged to what would be 204 from 34).

Computer companies, discount retailers and insurance companies on the 1989 list were particularly hard hit.

And they fell down or off the list for a variety of reasons.

Neutrogena and Oracle Systems, for example, had earnings slumps of 36% and 51% respectively, from 1989 to 1990. Those declines in income were reflected in the two-year ROE. Los Angeles-based Neutrogena dropped 10 spots to No. 19, and Redwood City-based Oracle rested at No. 24, down 17 notches.

Dreyer’s Grand Ice Cream was blessed with a 39% jump in 1990 income, and yet it fell to No. 48 from No. 32.

The Oakland company’s two-year ROE on the 1990 list dropped to 20.8% from 26.8% the previous year. That’s because Dreyer’s benefited from a strong ROE of 24% for 1988, a year the company did not even make the list.

Live Entertainment is a similar case. Its income rose 32% in 1990--and the company plunged 36 spots to No. 59. Like Dreyer’s, Live Entertainment had a better ROE in 1988 than in the following two years, which pulled down the two-year ROE for 1990.

The biggest slider to actually remain on The Times 100 was CMS Enhancements, which lost 75 places. The Tustin-based maker of computer storage devices stopped its free fall at No. 99. It reported that income skidded 92% from the year before.

The worst case of multi-year vertigo appears to belong to Spelling Entertainment, once known for such shows as “Charlie’s Angels” and “The Love Boat.” Producer Aaron Spelling’s company, which weighed in at No. 7 on the 1988 list and then sank to 57 on the 1989 roster, plummeted to what would be No. 209 on the 1990 list, well below the ROE cutoff to qualify for the top 100.

Spelling Entertainment has been plagued by problems selling its shows.

Times Mirror Co., owner of the Los Angeles Times, also has had its difficulties brought about by a slump in advertising. Ranked at 66 on the 1989 list, Times Mirror would have ended up at No. 124 for 1990. The company was No. 46 in 1988 and No. 13 on the 1987 list.

Lewis Galoob Toys was No. 4 on the 1989 list but was bumped off the 1990 list because it reported a loss for the year. Other 1990 money losers included such names as Covington Development Group (No. 16 in 1989), Foothill Group, Businessland and Atari.

Caesars New Jersey Inc. disappeared from the list because it merged with Caesars World last year, and Eldon Industries faded because it was acquired by Rubbermaid.

Some companies fell off the list because their debt-to-equity ratio exceeded 2-to-1. They included Kaufman & Broad Home Corp., Amplicon Inc. and Firstfed Financial.

Sigma Designs, a Fremont-based computer peripheral equipment maker that was No. 36 in 1989, did not qualify for the list because its revenue was below the $50-million cutoff.

NOSE DIVES

Ranks companies by absolute dollar change from profit to loss in one year.

1990 1989 Change loss income in income Rank Company ($ millions) ($ millions) ($ millions) Occidental Petroleum Corp. (1,688.0) 256.0 (1,944.0) 2 Homefed Corp. (247.5) 115.7 (363.2) 3 Calfed Inc. (221.9) 82.4 (304.3) 4 Pacific Enterprises (43.0) 211.0 (254.0) 5 Raychem Corp.* (111.4) 36.3 (147.7) 6 Genentech Inc. (98.0) 44.0 (142.0) 7 Advanced Micro Devices (53.6) 46.1 (99.6) 8 American President Cos. (59.6) 11.3 (70.9) 9 Businessland Inc.* (24.1) 32.9 (57.0) 10 MGM Grand Inc. (23.6) 25.6 (49.2)

* See exceptions, page 55.

Source: MZ Group. Certain historical data is from Standard & Poor’s Compustat Inc.

BORN AGAIN

Ranks companies by absolute change from loss to profit in one year.

Change 1990 income 1989 loss in income Rank Company ($ millions) ($ millions) ($ millions) 1 First Interstate Bancorp 438.7 (151.9) 590.6 2 Northrop Corp. 210.4 (80.5) 290.9 3 Vons Cos. 49.7 (25.1) 74.8 4 Micropolis Corp. 7.9 (49.8) 57.7 5 AST Research Inc.* 35.1 (7.5) 42.5 6 Diasonics Inc. 16.4 (21.5) 37.9 7 Tandon Corp. 25.6 (4.3) 29.9 8 Chiron Corp. 4.0 (21.6) 25.7 9 Komag Inc. 13.4 (6.1) 19.4 10 Intl. Rectifier Corp. 2.2 (12.7) 14.8

* See exceptions, page 55.

Source: MZ Group. Certain historical data is from Standard & Poor’s Compustat Inc.