Metropolitan Washington's federal government employment base may be about to shrink some more, as Rep. Michael Barnes (D-Md.) said last week in outlining the potential loss of about 4,500 jobs on nonmilitary payrolls, because of the Reagan administration's budget cuts.
But these layoffs, if they occur in the numbers projected by Barnes or in the much larger volume predicted by others, are not likely to have a significant impact on the local economy because of growth in military payrolls not covered by such surveys and by expansion of the area's private sector.
For example, a recent study by Regional Data Associates, in New Brunswick, N.J., showed that Virginia is one of five states that would receive about 45 percent of increased Defense Department spending under the administration's budget plans. Military installments in the region will benefit, as will defense contractors -- thousands of which, mostly small companies, are located here.
More important to the local economy is the private sector, and nowhere is expansion more evident than in technology and research businesses, some of which rely on government contracts.
Three prime but diverse examples of this trend are Micros Systems Inc., of Beltsville; Biotech Research Laboratories Inc., of Rockville, and Software AG International Inc., of Reston. In addition to being Washington-area enterprises, these companies have one other factor in common: All have recently sold or are planning to sell initial offerings of stock to public investors. Thus, for the first time, detailed information about their businesses have gone on the public record. Some details follow:
Micros Systems, the first of the three to sell stock, went to market with 2 million common shares at $2.50 apiece; after trading as high as $4 a share, Micros has settled down to about $3.50 in the over-the-counter market.
The Beltsville firm, incorporated in 1977, designs, manufacturers and sells electronic terminals that perform cash register and data-processing functions primarily for use in hotels, restaurants and other general retail operations. By offering various packages of programs for users of this equipment, Micros is able to adapt its terminals to numerous applications.
Starting from revenues of $1.4 million in its first full year, Micros expanded to $6.7 million in sales for the year ended late June 28 when an initial profit of $142,000 (7 cents a share) was reported. Micros markets and services its products through a network of some 200 independent dealers and has several retail outlets of its own. As of last October, Micros was delivering terminals at a rate of 220 per month.
Most of the Micros competitors are large national corporations such as NCR Corp. and Sharp Electronics, but the Beltsville company has developed a growing business in three years that now employs about 125 persons. Jeffrey Rice has been president and chief executive of Micros since it began.
Biotech Research, which recently went public by selling 575,000 common shares at $6.25 each, is in an entirely different business but is part of a sector that is growing here -- biological and medical research.
Founded in 1973, Biotech has been engaged principally in research under government contract. Proceeds of the public offering were designed to permit commercially saleable products in the health care and food industries, mainly by using recombinant-DNA and hybridoma technologies in which the firm has been a pioneer.
Recombinant-DNA is a method of recombining genes to create new genes, while hybridoma is a new method of producing antibodies by fusing an antibody-producing cell with a tumor cell for production of an antibody with fewer impurities.
Revenues of Biotech have increased to $1.2 million last year from $799,000 on 1979 and $611,000 in 1978. Profits rose to $47,000 (3 cents a share) last year from $33,000 (2 cents) in 1979. The firm has 30 full-time employes and faces competition from six major businesses in the Washington area alone.
The most recent addition to the list of public-company candidates is Software AG International, which has filed a preliminary prospectus with the Securities and Exchange Commission for a proposed offering of 1.6 million shares. The stock is expected to go to market the week of June 8 at approximately $14 to $16 a share.
Software AG is the largest of the three companies, with revenues in the year ended May 31, 1980, of $10.9 million and profits of $368,000 (8 cents a share). In the most recent nine-month period for which figures are available, ended Feb. 28, sales were up substantially to $13.5 million from $8.1 million a year ago, and profits increased to $1.8 million (40 cents) from $99,000 (2 cents).
Since it was founded in 1973, Software AG has been engaged in the volatile business of developing, marketing and providing support services (such as training activities) for a computer system programs. A primary product is Adabas, a data-based management system. Software AG has become one of the largest suppliers of date-based management systems in the independent programming industry, and more than 750 products have been installed for a broad range of U.S. and overseas organizations.
The Adabas program originally was developed by Software AG of West Germany, an affiliated company. John Maguire, who founded the Reston firm, has been president and chief executive since that time. Software AG currently has about 140 employes and the company is planning a major exapansion of its Northern Virginia facilities by 1983.