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Friday, Jan 27, 2023
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Some Public Firms Make Good Use of Year

Not surprisingly, the past year has been a rough one for revenue generation at the 50 largest publicly traded companies in the greater San Fernando Valley area. Thirty-one companies experienced decreased revenues for the trailing 12 months (TTM) of Sept. 2009, compared to the TTM of Sept. 2008; only 14 experienced an increase in net income; and 25 were operating at a net income loss. Seven companies return on equity (ROE) surpassed the single-digit category for the TTM of Sept. 2009, while 25 experienced negative ROE. But the news hasn’t been all bad. Some of the Valley’s public companies have outpaced their peers’ financial performance and taken the economic downturn as an opportunity to restructure and rev-up operations. Van Nuys-based Cherokee, Inc. (Ticker: CHKE) and Thousand Oaks-based Amgen (AMGN), were the front-runners for ROE during the TTM of Sept. 2009. Cherokee, which markets and licenses brand names and trademarks for apparel and accessories, reported an ROE of 50.95 percent. Its three-year average was 75.59 percent. The company has experienced decreased revenues and profitability. But its stock traded for $11.09 per share on Mar. 3, climbed to $23.41 on Sept. 29, and traded for $16.87 on Dec. 16. In December, Cherokee announced an exclusive footwear licensing agreement in the U.S. with ACI International for Sideout and Sideout Sport brands. In November it signed an exclusive licensing agreement in the People’s Republic of China for its Cherokee brand. Amgen reported an ROE of 22.45 percent for the period, and boasted a three-year average ROE of 18.69 percent. Its revenues decreased compared to the TTM of Sept. 2008, but the company’s net income increased from $3.9 billion to $4.4 billion. The company’s stock hit a 2009 low of $45.11 per share on April 22, climbed to $64.41 on Aug. 4, and is currently trading for about $55. One of the big issues for Amgen is that it’s close to commercializing what some say is its next blockbuster drug, denosumab. The company got a thumbs-up for the bone loss drug -with conditions- from an FDA advisory committee. But it did not gain full approval as hoped for in the fall and is currently submitting additional safety information to the FDA. North Hollywood-based IPC The Hospitalist Company (IPCM) experienced all positive growth. Its ROE was 14.38 percent for the TTM of Sept. 2009; revenues were $282 million compared to $235 million for the TTM of Sept. 2008; and net income was $16.4 million, up from $11.7 million for the same period. The company went public in January 2008, raising $94 million and a follow-on round of $74 million in July of the same year. Its stock traded for a low of $14.64 per share on Nov. 20, 2008. But the price increased throughout 2009 and it’s currently trading for approx. $30 per share. IPC is aggressively expanding. A few recent examples include: acquiring a physician practice in Tampa, Fla. in August; acquiring a physician group in New Jersey in October; and picking-up another two medical practices in New England in November. On the surface, the financial performance of video game maker THQ, Inc. (THQI) looks pretty dismal. The company experienced -75.65 percent ROE for the TTM of Sept. 2009; revenues decreased from $999 million for the same period in 2008 to $935.9 million; and net income was $-397.5 million. But the Agoura Hills-based firm’s financials have been bolstered by the release of hit titles such as UFC 2009 Undisputed, WWE SmackDown vs. Raw 2010 and the latest version of its multi-million unit franchise MX vs. ATV Reflex. It also settled on-going arbitration with JAKKS Pacific. THQ gained market share for the first nine months of calendar year 2009, ranking as the #3 independent publisher in the U.S, with a 5.4 percent share and the #4 independent publisher in Europe with a 4.5 percent share. UFC 2009 Undisputed was a top-five best selling Xbox 360 and PlayStation3 game for the first nine months of calendar 2009. The company’s stock traded for a 2009 low of $2.24 per share on Feb. 25, increased to $8.93 on June 10, and traded for $4.45 per share on Dec. 16. In December, the company announced it is opening a new video game development studio in Montreal, Quebec that will employ upwards of 400. And it recently signed an exclusive licensing agreement to develop and publish video games based on DreamWorks Animation’s upcoming animated feature films, Kung Fu Panda: The Kaboom of Doom and Puss In Boots, as well as the popular CG animated television show, The Penguins of Madagascar.

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