#31. CROWN BOOKS CORP.
3300 75th Ave. Landover, Md. 20785 REVENUE: $137.2 million PROFITS: $6.7 million EARNINGS PER SHARE: 83 cents DIVIDEND: None ASSETS: $113.2 million STOCKHOLDERS' EQUITY: $80.4 million RETURN ON EQUITY: 9 percent EXCHANGE: OTC EMPLOYES: 1,368 TOP EXECUTIVE: Robert Haft, president. FOUNDED: 1977
DESCRIPTION: Crown is a specialty retail chain that sells discounted books, magazines and some computer software in 190 stores in the Washington area, California, Houston, Chicago and Seattle. A third of its stock is owned by Dart Group Corp., which founded the chain.
DEVELOPMENTS: The originator of the modern-day discount-bookstore chain, Crown is facing increased competition from newer discount bookstores, leading the chain to report a drop in earnings for its fourth quarter that ended Jan. 31. For the quarter -- typically the best for retailers -- Crown posted $3.5 million in profits (44 cents a share), down from the $4 million (50 cents) earned for the same quarter a year before.
Company officials attributed the drop to increased competition from other discount bookstores, which, in turn, forced Crown to reduce its prices more and thus its margins. At the same time, to meet the increased competition, the company increased its advertising costs.
For the year, Crown's profits increased by 3 percent to $6.7 million (83 cents) from $6.5 million (81 cents). #32. TRAK AUTO CORP.
3300 75th Ave. Landover, Md. 20785 REVENUE: $120.9 million PROFITS: $797,000 EARNINGS PER SHARE: 13 cents DIVIDEND: None ASSETS: $98.8 million STOCKHOLDERS' EQUITY: $54 million RETURN ON EQUITY: 1.5 percent EXCHANGE: OTC EMPLOYES: 1,260 TOP EXECUTIVES: Herbert H. Haft, chairman; Robert M. Haft, president. FOUNDED: 1979
DESCRIPTION: Trak Auto sells auto parts at a discount in 116 stores in the Washington area, Richmond and Chicago. Dart Group Corp. owns 66 percent of Trak Auto stock. Trak West Corp., a related company, is owned half by Trak Auto and half by the Los Angeles drugstore chain Thrifty Corp.
DEVELOPMENTS: Low sales and high startup costs -- particularly in Trak West -- continue to hurt Trak Auto's earnings. For its fourth quarter, the company posted a loss of $520,000 (9 cents a share), compared with the profit of $255,000 (4 cents) it recorded for the same period the previous year. For the year, Trak Auto earned $797,000 (13 cents), down 75 percent from the previous year when earnings were $3.2 million (54 cents).
Trak officials say much of the decline is due to continued troubles at Trak West, where losses for the year totaled $3.4 million -- an improvement from the previous year when the loss was even greater: $4.3 million.
But even in the eastern division, sales were sluggish, due to a warm winter and attractive financial incentives for new cars -- two factors that reduced demand for replacement parts for cars. That, coupled with high startup costs in Chicago, ate into profits. #33. DART GROUP CORP.
3300 75th Ave. Landover, Md. 20785 REVENUE: $119.3 million PROFITS: $9.9 million EARNINGS PER SHARE: $5.28 DIVIDEND: 13 cents ASSETS: $535.4 million STOCKHOLDERS' EQUITY: $197.6 million RETURN ON EQUITY: 5.3 percent EXCHANGE: OTC EMPLOYES: 3,280 TOP EXECUTIVES: Herbert H. Haft, chairman; Robert M. Haft, president. FOUNDED: 1954
DESCRIPTION: Dart Group Corp. is a holding company for two discount retailing subsidiaries: Crown Books, of which it owns 34 percent, and Trak Auto, of which it owns 67 percent. Also a part of Dart is the one-year-old subsidiary Dart Financial, which invests the company's capital.
DEVELOPMENTS: The investment community has been keeping close tabs on Dart for the past year, waiting eagerly as it prepares to make a major acquisition. Armed with $250 million from a recent offering of debentures as well as a net gain of $75 million from the $160 million sale of its drugstore chain two years ago, Dart has made three bids -- each unsuccessful -- to take over major U.S. corporations.
In early 1985, Dart and other companies controlled by the Haft family considered a possible takeover of The May Department Stores Co. After May resisted the Hafts' moves by arranging a real estate deal that would have made an unfriendly takeover difficult, the Hafts sold their stock for a $1.4 million profit. Then, last summer, Dart tried to acquire Jack Eckerd Corp., the nation's second-largest drugstore chain. To ward off Dart, Eckerd agreed to buy back all of Dart's shares, giving Dart a $9 million profit.
Last November, Dart made a last-minute bid for the $12.6 billion Beatrice Cos. Inc. But Beatrice turned down Dart's bid, accepting the offer of its initial suitor, Kohlberg Kravis Roberts & Co.
"We really want to replace our drugstore business with a large business," Herbert Haft said in a rare public speech two months ago. Company documents note that Dart "intends to seek to acquire all of or a majority interest in one or more retailing, real estate, financial or other businesses." #34. SYSCON CORP.
1000 Thomas Jefferson St. NW Washington, D.C. 20007 REVENUE: $117.3 million PROFITS: $4.4 million EARNINGS PER SHARE: 95 cents DIVIDEND: 19 cents ASSETS: $73.5 million STOCKHOLDERS' EQUITY: $34.9 million RETURN ON EQUITY: 13.4 percent EXCHANGE: OTC EMPLOYES: 1,633 TOP EXECUTIVES: J. J. Yglesias, chairman and chief executive officer; E. E. Tritch, president and chief operating officer. FOUNDED: 1966
DESCRIPTION: Syscon is a high-technology company that evaluates, develops and manages computer software systems and hardware/software products. The company began as a computer systems engineering firm serving the Pentagon, but in recent years has diversified its client base to include state and municipal governments as well as commercial enterprises.
DEVELOPMENTS: Syscon's revenue and net income in the fiscal year ended Nov. 30 continued on the upward slope that has characterized the company's financial performance for more than 10 years. Revenue for the year increased 13 percent, and net income was up 9 percent over the previous year.
The company started the current fiscal year with a funded backlog of $38 million in contracts and in February was awarded a seven-year $13.6 million contract to provide support and computer-maintenance services for 18 sites of the Navy's Aviation Training Support Systems. At the start of the year, the company embarked on a strategy to seek more contracts in the range of $25 million to $100 million.
Syscon has a contract to deliver up to 240 Naval Tactical Game Training Systems over the next five years and recently secured a contract to install three comprehensive computer systems for the Naval Military Personnel Command, the first of which was delivered last year. The Naval Tactical Game Training Systems provide realistic computerized war games to train Navy personnel in sensor and weapons systems.
In commercial markets, the company recently provided computerized interactive training programs for the Wang Training Division in Washington, Black & Decker Manufacturing Co. in Towson, Md., and Marriott Corp., based in Bethesda. #35. AMERICAN MANAGEMENT SYSTEMS INC.
1777 North Kent St. Arlington, Va. 22209 REVENUE: $112.2 million PROFITS: $3.7 million EARNINGS PER SHARE: $1.48 DIVIDEND: None ASSETS: $49.6 million STOCKHOLDERS' EQUITY: $22.7 million RETURN ON EQUITY: 19 percent EXCHANGE: OTC EMPLOYES: 1,400 TOP EXECUTIVE: Charles Rossotti, president and chief executive officer. FOUNDED: 1970
DESCRIPTION: AMS develops, installs and operates computer-software systems for business and government.
DEVELOPMENTS: Sales increased 16 percent and profits went up 31 percent last year as the company posted record profits and its 16th straight year of growth. It continued to focus on five basic markets: financial institutions, federal agencies, state and local governments and universities, energy companies and telecommunications firms. In the financial area, AMS expanded its business of helping institutions to manage consumer credit by adding new ways to process credit applications and signing up 20 new licensees for AMS collection systems. In the federal government field, it won several multiyear contracts, including the renewal of a service contract with the General Services Administration that is expected to produce $30 million in revenue during the next three years. AMS signed up 34 new clients for local and state government and university services and is building on its base in telecommunications. Only the energy market, once the second-largest segment for AMS, suffered reduced revenue.