14: ALLEGHENY BEVERAGE CORP. Macke Circle Cheverly, Md. 20781
REVENUE: $660.7 million PROFITS: $6.5 million EARNINGS PER SHARE: NA DIVIDEND: 40 cents ASSETS: $340.3 million STOCKHOLDERS' EQUITY: $64.2 million RETURN ON EQUITY: 10.4 percent (est.) EXCHANGE: OTC EMPLOYES: 19,000 TOP EXECUTIVE: Morton M. Lapides, president and chairman FOUNDED: 1960
DESCRIPTION: Declaring that he went into business to make money, not Pepsi-Cola, Lapides is changing directions at the company he launched 25 years ago with the purchase of the Central Pennsylvania Pepsi franchise. The company has since grown into a diversified services conglomerate with operations in food service and vending, coin-operated laundries, building maintenance and office furniture. But Allegheny Beverage recently announced plans to sell its Pepsi-Cola bottling plant and concentrate on food service and vending machines.
DEVELOPMENTS: Allegheny Beverage is a company in flux. Already, it has moved its headquarters from Baltimore to Cheverly, Md., aligning itself with its Washington-based subsidiary, Macke Building Services Inc., which provides commercial and industrial janitorial services in the East and the Midwest. The numerous changes, including several acquisitions, pushed down profits by 40 percent for the year ended in March, despite flat revenue.
Allegheny has set a course that it believes will yield revenue of $1.25 billion in fiscal 1986. As part of that plan, it has agreed to purchase Servomation Corp., a food service and vending machine company based in Stamford, Conn., from City Investing Co. for $225 million in cash. The purchase, which Allegheny hopes to finance by the sale of the bottling plant, is expected to increase Allegheny's business in convention centers, stadiums and arenas. Servomation operates in 43 states, the District and Canada.
Meanwhile, Allegheny is continuing its aggressive expansion program. In January it acquired A&B Universal Services Inc., a janitorial services company serving San Francisco, for more than $3 million. It was the company's sixth building services acquisition in the past 12 months. 17: COMMUNICATIONS SATELLITE CORP. 950 L'Enfant Plaza SW Washington, D.C. 20024
REVENUE: $442.3 million PROFITS: $51.2 million EARNINGS PER SHARE: $2.52 DIVIDEND: $1.20 ASSETS: $1.17 billion STOCKHOLDERS' EQUITY: $599.2 million RETURN ON EQUITY: 8.8 percent EXCHANGE: NYSE EMPLOYES: 3,084 TOP EXECUTIVES: Joseph V. Charyk, chairman; Irving Goldstein, president FOUNDED: 1963
DESCRIPTION: Communications Satellite Corp. (Comsat) is the U.S. signatory to the International Telecommunications Satellite Organization (Intelsat), a 109-nation consortium that carries most of the globe's international satellite traffic. In addition to marketing Intelsat services to U.S. companies, Comsat provides competitive business telecommunications services, such as private networks, and is offering a new international business telecommunications service directly to customers.
DEVELOPMENTS: Once again, the bulk of Comsat's revenue and profits came from its regulated international telecommunications business services. Revenue increased marginally for the year ended Dec. 31, up $1.9 million over 1983, while profits edged up just 2 percent, or $1.1 million.
1984 was a year of serious redirection for the company. In July, Comsat sold its one-third share in Satellite Business Systems, a business telecommunications company, to its partners -- Aetna Life & Casualty Co. and International Business Machines Corp. -- after sustaining a $100 million loss. The company also courted various equity partners for its direct satellite-to-home television venture, Satellite Television Corp. After negotiations with Prudential Insurance Co. and United Press International co-owner Dougles Ruhe as well as a rumored merger attempt with competitor United Satellite Communications Inc., Comsat drastically cut back the venture. Industry sources say STC cost Comsat about $100 million in losses, not including the $113 million still owed for two satellites.
Comsat officers now say the company will concentrate on its domestic businesses and will seek more contracts like the recent deal with Holiday Inns to provide 1,500 hotels with a private satellite-based telecommunications network for video entertainment. The contract is expected to bring in about $400 million in revenue over 10 years. Comsat also has finished installing a programming distribution network for NBC-TV under a 10-year, $220 million contract.
In the coming year Comsat plans to bolster its line of telecommunications equipment products. It also will concentrate on marketing to long-distance phone companies and on manufacturing backyard satellite dishes. Finally, it plans to offer new international business telecommunciations services directly to customers such as banks and major corporations. 18: HECHINGER CO. 3500 Pennsy Dr. Landover, Md. 20785
REVENUE: $405.1 million PROFITS: $20.9 million EARNINGS PER SHARE: $1.15 DIVIDEND: 15 1/2 cents (Class A) 10 cents (Class B) ASSETS: $289.3 million STOCKHOLDERS' EQUITY: $121 million RETURN ON EQUITY: 18.9 percent EXCHANGE: OTC EMPLOYES: 5,900 TOP EXECUTIVES: John W. Hechinger, president; Richard England, chairman FOUNDED: 1911
DESCRIPTION: Hechinger operates 46 do-it-yourself home-center stores in the District, Maryland, Virginia, North Carolina and eastern Pennsylvania. DEVELOPMENTS: Pleased with the results of its aggressive two-year expansion drive -- in which at least seven new stores were opened each year -- Hechinger announced last fall that it planned to step up growth, spending $75 million to open 20 new outlets over the next two years.
The announcement came six months after Hechinger and K mart Corp. abandoned their plans to launch a nationwide chain of discount do-it-yourself stores. The venture fell through because the retailers had radically different operating philosophies and could not agree on how to establish the chain.
Most of Hechinger's new stores will be in new markets, as the company tries to establish itself in Ohio, New York, South Carolina, Delaware, western Pennsylvania and, possibly, Massachusetts. Hechinger also plans several additional outlets in North Carolina, a relatively new but key sales area for the chain. Many will be do-it-yourself, warehouse-style stores with a large stock in a no-frills setting, similar to a very successful prototype that opened in Raleigh, N.C., in October.
The warehouse concept has meant a change of operating philosophy for Hechinger, which until last year limited its geographic area so that its stores could be supplied efficiently and rapidly through its distribution center in Landover. Under the warehouse concept, the new, out-of-town stores will receive many of their supplies directly from manufacturers.
To finance this expansion -- and to continue growth in the Washington area -- Hechinger sold $82 million in convertible subordinated debentures last fall. "This is a market we know and love; we won't neglect it," said Clark McClelland, Hechinger's treasurer and controller. The company plans to open two area stores a year.
Locally, the company has faced increased competition from newcomers, including Channel Home Centers, a subsidiary of W. R. Grace & Co., the nation's biggest home-center operator. Hechinger officials, however, say the competition hasn't hurt business, and that sales at stores opened longer than a year have increased by 18 percent. Overall, the chain's sales increased by 31 percent last year to $405 million; profits rose by 29 percent to $20.9 million. 19: THE RYLAND GROUP INC. 10221 Wincopin Circle Columbia, Md. 21044
REVENUE: $404.2 million PROFITS: $9.4 million EARNINGS PER SHARE: $1.52 DIVIDEND: 60 cents ASSETS: $135.2 million STOCKHOLDERS' EQUITY: $66.9 million RETURN ON EQUITY: 14.8 percent EXCHANGE: NYSE EMPLOYES: 929 TOP EXECUTIVE: Charles E. Peck, chairman, president and chief executive officer FOUNDED: 1967
DESCRIPTION: The Ryland Group builds and sells single-family houses, town houses and modular homes in the $50,000-to-$170,000 range throughout the mid-Atlantic region, the Southwest and the Midwest. Ryland also owns a mortgage company that provided financing for approximately 70 percent of the homes it sold during the past two years.
DEVELOPMENTS: Fiscal 1984 was a challenging year for Ryland, whose profits plunged 40 percent despite a 2 percent rise in revenue. Earnings for the year ended Dec. 31 were penalized by the company's expansion into new areas, including further development of Ryland Modular Homes and plans for a Ryland Building Systems plant near Orlando, Fla. Sales contracts for the year were up 3 percent over 1983, with new contracts signed on 5,545 units. Growth was strong, too, at Ryland Mortgage Co., which sold $250 million worth of mortgage-backed bonds last year and now services more than 4,500 loans.
Ryland also reported a 40 percent drop in earnings per share, down from $2.52 per share in 1983. Although the severely depressed Houston housing market dragged down Ryland's sales and profits for the entire Southwest, the company said its financial position remains strong and it has no short-term borrowings. 20: MANOR CARE INC. 10750 Columbia Pike Silver Spring, Md. 20901
REVENUE: $364 million PROFITS: $22.9 million EARNINGS PER SHARE: 87 cents DIVIDEND: 14 cents ASSETS: $561.3 million STOCKHOLDERS' EQUITY: $112.3 million RETURN ON EQUITY: 22.3 percent EXCHANGE: NYSE EMPLOYES: 17,000 TOP EXECUTIVE: Stewart Bainum Sr., chairman FOUNDED: 1968
DESCRIPTION: Manor Care is a diversified owner and operator of nursing homes and hotels. It owns, leases or manages 153 health care facilities containing about 19,500 beds, making it the nation's fourth-largest nursing home chain. It also owns or franchises 589 Quality Inn hotels with about 68,500 rooms.
DEVELOPMENTS: Profits and earnings have continued to climb at Manor Care in recent quarters, and revenue in the fiscal year ended May 31, 1984, rose 5.3 percent while net income jumped 33.4 percent. For the first half of fiscal 1985, profits increased 31 percent, to $15.4 million (58 cents a share) from $11.8 million (48 cents) in the first six months of 1984. Revenue for the six months ended Nov. 30 grew to $175 million from $132.4 million.
In November, for the sixth time in less than five years, Manor Care declared a split of its common stock to encourage wider distribution of its shares by making its stock price more attractive to investors. The financial data above has been adjusted to reflect the latest stock split.
In April 1984, the company completed its purchase of Oklahoma City-based Anta Corp.'s Four Seasons Nursing Centers, acquiring 44 additional facilities with more than 5,600 beds. Manor Care is still integrating the Four Seasons operations into its other businesses.
Manor Care has two seemingly conflicting goals: to grow through acquisitions and to reduce its debt. Thus, it is trying to sell most of the 19 Quality Inn hotels it owns so it can concentrate on the Quality Inn franchise operation; it would use the cash from the sale to reduce its debt. Manor Care says Quality Inn is the nation's fastest-growing hotel franchise.