Guitar Center, the Westlake Village-based purveyor of electric guitars, keyboards and drum sticks, is amp-ed up about by the new California state budget. That’s because it earmarks $105 million annually for music and arts education, along with $500 million for music supplies, namely instruments, during the first year. For Guitar Center, which operates more than two dozen stores in the Golden State, the budget boost could mean thousands of students going to stores for guitars, amps, strings, picks, snare drums and drum sticks come this time next year. In a call to investors, Guitar Center Chairman and CEO Marty Albertson said he’s hopeful more states will take California’s lead. “We believe this action in California may be the beginning of a trend that will move across the country, as there is solid support for this type of investment in music and arts education broadly in communities as well as politically,” he said. While that may be wishful thinking, overall the second quarter ended June 30 was a solid one for Guitar Center, which has 187 big-box-style stores across the nation. Sales growth topped nearly 14 percent year-over-year, continuing a longstanding trend for the company, (it’s increased 18 percent since 2001). The company earned $13.4 million, or $0.47 per diluted share, a gain from the previous year in which profit was $12.9 million, or $0.46 a share. Revenue topped $458 million from $402.3 million a year ago, meeting analyst expectations of profit of $0.47 on revenue of $458.5 million, according to a Thomson Financial poll. The average ticket price what a typical customer pays on an average store visit is also increasing despite increased traffic on the company’s website. It topped $164 for the second quarter, the company said, up from $156 a year ago. Net income growth, however, was just 4 percent. That may be a product of a choppy or at least cooling retail market. The company also scaled back third quarter expectations for net sales to a range from $489 million to $501 million. A Healthy Quarter Health Net Inc. is continuing on a recovery track as evidenced by strong second-quarter returns influenced by gains in commercial plans and higher margins on commercial businesses. The Woodland Hills health plan company reported an 8.2 percent jump in revenue for the second quarter ended June 30, to $3.3 billion from $3 billion one year ago. Overall net income tallied $77 million, or $0.65 per diluted share, compared with $53.6 million, or $0.47 a share, a year prior. One dark spot was cash flow, which continues to be negative to the tune of $6.9 million for the quarter. (In the same period last year, operating cash flow was $10.7 million.) The negative flow was a result of a build-up of Medicare Part D and some $16 million paid to settle provider disputes. Overall, though, health plan enrollment jumped by 22,000 members for the first quarter to more than 3.4 million. In an Aug. 3 conference call to investors, Health Net President and CEO Jay Gellert said the additional members are an indication that the company’s fiscal health is on the mend. “Gross new sales in the quarter across all of our plans were much higher than last year in the second quarter, a clear sign that we’re very much back in the game,” he said. Health Net has been in recovery mode since 2005 after profits plummeted by $234 million in 2004 to $42.6 million. Gellert said the company wants to continue to invest in California, mainly on the lower end of the mid-market, the small group market and the specialty market. “We’re working on strengthening our position in the California market,” he said. The company spent about $4 million in a new advertising campaign in the second quarter “to reintroduce some of our products,” he said. Yet things are far from rosy and in a note to investors Doug Simpson, an analyst with Merrill Lynch, said there is a consensus that Health Net will likely be acquired. “But there is still considerable debate about (the) price and timing of an offer, especially given jittery sentiment toward potential acquirers,” he said. “The challenge ahead for Health Net is to grow the platform while maintaining pricing discipline in its very competitive major markets in California and the Northeast,” he wrote. Piece of Cake? The Securities and Exchange Commission is looking into the previous stock options granting practices by Calabasas-based Cheesecake Factory Inc. The chain known for outrageous portions, fantastical interiors and 200-plus item menus also said that two shareholders are suing alleging breach of fiduciary duty and unjust enrichment related to its option granting. This follows reports of possible backdating of stock option grants by a variety of companies, which prompted Cheesecake last month to voluntarily review its stock option granting practice. (It also delayed releasing second quarter results until the review wrapped up.) The news came on the heels of an announcement by videogame maker THQ Inc. that it is also turning over documents to the feds on its stock option practices. Local companies Semtech In and Vitesse Semiconductor Corp. are also the subject of SEC inquiries. Staff Reporter Chris Coates can be reached at (818) 316-3124 or at [email protected] .