Digital Theater Systems Sees Growth After Successful IPO CORPORATE FOCUS By SLAV KANDYBA Staff Reporter Executives at Digital Theater Systems Inc. of Agoura Hills saw an improving IPO market last summer and decided it was time to take their digital audio business public. The IPO was timed well, as it turned out, and the company so far has flourished, seeing its opening stock price rise by about 40 percent since the initial public offering went out in July. “As far as the earnings, the company has exceeded expectations” said Steven B. Frankel, an analyst in the Boston office of Adams, Harkness & Hill, Inc., one of the brokerages that underwrote the DTS offering. “I look for continued growth for 2004. “The company is well-managed and in a good business,” he said. DTS provides surround sound technology products for movie theaters, consumer electronics manufacturers and other makers of audio equipment. Most recently, the company has moved into the PC and automobile markets. DTS CFO Mel Flanigan describes the company as a multi-legged stool and says it is clearly standing strong due to one of those legs, namely licensing the digital audio technology it produces to companies including Sony and Philips for home theater systems. Although demand has been increasing for all of the markets it serves, it is the home entertainment market where DTS has seen its greatest growth because prices for those types of systems have come down considerably, reaching a far larger market of consumers than ever before. Home theater systems using the technology, for instance, now sell for as little as $200 at big-box retailers such as Best Buy and Circuit City, and more than 30 percent of U.S. homes had them last year, according to industry figures. The figure is expected to double in the next three to four years. DTS is already reaping some of the rewards of that growth. For the fourth quarter ending Dec. 31, 2003 net income dipped to $3.3 million or $0.20 per diluted share on revenues of $14.9 million. That compares with earnings of $3.6 million or $0.31 per share on $13.8 million in revenues for the same period in 2002. But for the full year, DTS earned $9.9 million, or $0.80 per diluted share on revenues of $51.7 million, compared with $6.3 million, or $0.47 per share on revenues of $41.1 million for the 2002 year. “The force behind that growth is the amazing buildup of the DVD and home theater market,” Flanigan said. Founded in 1990, DTS initially launched its technology in about 900 movie theaters nationally by 1993. Today the company’s equipment is found in 23,000 movie theaters both domestically and overseas. Targeting consumers The company then set its sights on the consumer business, and it hasn’t looked back. DTS has reported profitable quarters consecutively since Sept., 2001. In July, DTS issued its IPO, raising $65.3 million to pay down debt and raise capital for expansion. The stock, which was priced at $17 per share when trading began, rose immediately to the mid-$20 range, and after trading as high as $34 per share, on March 11, closed at $24.93. Flanigan said the company is now debt-free. Consumer electronics manufacturers install DTS’s technology into DVD players, televisions, and new markets are on the horizon. “Europe has tremendous growth potential,” Flanigan said. In 2004, all Acura TL sedans come with DTS technology as standard equipment. At the same time, PC makers are incorporating DVD players into computers offering another outlet for the company’s products. Last year for the first time, DTS technology was used in a PC product. Yet another division within DTS is called DTS Entertainment. It is a “boutique shop” music label, Flanigan said. It sells DVDs of feature film releases, such as last year’s “Monster” with Oscar winner Charlize Theron. While applying its technology in new ways, DTS is also sticking with its original business: providing movie theaters with audio equipment that creates better-quality sound. DTS competes with Dolby Laboratories, but technologies provided by the two companies often co-exist, and Hollywood studios and DVD makers often choose to use both DTS and Dolby in their offerings, Flanigan said.

Dole to Put Focus on Health at Hotel, Spa Near Headquarters By JEFF WEISS Contributing Reporter Dole Food Company Inc. held a groundbreaking celebration for the beginning of construction of the Dole Wellness Center, Spa and Hotel on Friday, March 12, adjoining its headquarters in Westlake Village. The complex will feature a health center, a deluxe 267-room five-star hotel, full-service spa and fitness center, as well as a conference center and state of the art television production facility. Dole plans to use the center to focus on the promotion of healthful eating, nutrition and exercise, its officials said. “It’s long been my belief that Dole and its affiliated companies can play a crucial role in helping consumers eat healthier and thus lead longer healthier and more vital lives,” Dole President and Chief Executive Officer David H. Murdock said. “This new complex will be a major step forward in helping to accomplish this goal.” The new complex will be surrounded by more than nine acres of lush gardens including walking/jogging paths, a waterfall and a unique outdoor function area. The components of the complex have each been designed to work together to enhance and promote the overall wellbeing experience, company officials said. “We plan on offering the center to the general public and to executives who want to learn to eat better and healthier,” Dole Director of Corporate Communications Freya Maneki said. “Nutrition education is a big focus for Dole. It will be a resort with an emphasis on learning how to live a healthier lifestyle.” Scheduled for completion in December of 2005, the facility plans to offer interactive information systems to benefit quality of life through a variety of programs designed to promote health and longevity. Physicians will provide diagnostic and preventative services at on-site medical facilities. The Dole hotel will join the Westlake Village Inn and the Hyatt Westlake Plaza as major hotels in the local area. According to PKF Consulting, which tracks the hotel industry, hotel occupancy within the greater San Fernando Valley area was only 67.1% for the month of January, 2004, up from 60.8 percent in January, 2003. Room rates as of January 2004 averaged $105.79, compared to an average rate of $99.95 in the same month last year. Founded in Hawaii in 1851, Dole Food Company, Inc., with 2002 revenues of $4.4 billion, is the world’s largest producer and marketer of high-quality fresh fruit, fresh vegetables and fresh-cut flowers and markets a growing line of packaged foods. The Company does business in more than 90 countries and employs, on average, 33,000 full-time permanent employees and 24,000 full-time seasonal or temporary employees, worldwide.

Firms, Schools In Partnership By SLAV KANDYBA Staff Reporter Two of the largest companies in the local area have partnered with some of the region’s schools to provide job training for employees and assist in educating the future workforce. Amgen Inc. is providing internships to eight Cal State Channel Islands students, and U.S. Borax is offering College of the Canyons students the opportunity to work in its Valencia laboratory. The partnership gives companies an additional resource for trained workers and it gives the schools greater clout because they can place their students in desirable jobs. “It’s opened a big door for our students,” said Dr. Ching-Hua Wang, a professor of immunology and microbiology at Channel Islands. “Some of the interns that we have at Amgen will probably be hired there.” Nationwide, a renewed focus is emerging on preparing a better workforce, an idea that has taken on life after President Bush spoke of it in his State of the Union speech last month. Locally, these private-public partnerships are especially timely because they come as budget cuts have weakened public higher education. The programs are still relatively new, and the companies and the schools are still working out many of the details. Last month, Channel Islands began offering two classes taught by Amgen scientists. One is called “Drug Discovery and Development” and another is “Biology of Cancer.” Both are available only to upper division students, or juniors and seniors. Simultaneously, eight of the school’s undergraduate science majors have begun interning at the Thousand Oaks biotech company. The internship program lasts a semester and sometimes longer, depending on a particular student, and the interns help scientists with research and development of new drugs. Amgen declined to speak to the Business Journal about the partnership. Hiring from the area? Channel Islands administrators said they did not know whether the internships would lead to permanent positions as entry-level research associates. But the school officials reason that it would be to Amgen’s advantage to hire current residents rather than recruit from outside the area. The university itself is having difficulty attracting professors from other states because of the area’s ever-increasing living cost, said Peggy Hinz, a Channel Islands spokeswoman. So, for Amgen “it makes sense to produce students who can stay in this area,” she said. Amgen and Channel Islands began discussions in 2001 but the school was just opening and it took time to build the required infrastructure. Channel Islands is also laying groundwork for partnerships that Wang and others hope will lead to student internships at BioSource International and Medical Packaging Corp., also companies along the tech corridor. Wang said the Amgen program is the largest established thus far. Channel Islands also provides instructors for about 30 entry-level research associates at Amgen. The classes are taught on the Amgen premises, paid for by Amgen. At the same time, several Amgen scientists are teaching classes for Channel Islands’ science students, said Wang, who oversees all of the university’s science area. Seventeen Amgen scientists have sent resumes hoping to teach classes, Wang said. Their interest is not in the minimal salaries that Channel Islands can offer, she added, but the opportunity to share their expertise. With access to some of the nation’s top notch scientists vis- & #341;-vis Amgen, Channel Islands is also readying a graduate program in biotechnology, Wang said. The program is expected to be offered this fall for the first time. But there is another benefit to the program for Channel Islands. Namely, the ability to tout its relationship with Amgen as a tool to recruit additional students to the school. “Being where we are, it makes sense to keep an eye on the Amgens, Baxters and the Wellpoints,” said Hinz. “We’re providing their future workforce, they provide us with their knowledge and expertise in their industry.” And Channel Islands is hoping to build similar relationships with other companies. “There is nothing standing in our way,” Hinz said. “We see this as a beginning there’s nothing but greatness ahead.” Borax program At Valencia-based U.S. Borax, an internship program with Santa Clarita’s College of the Canyons has been in place for a year. Three students are working alongside Borax researchers at their lab. “They do a lot of analytical testing looking at various applications of borates, and students do basic research,” said Rick Clark, a professor at COC who founded the engineering department there four years ago after moving to Santa Clarita from Blacksburg, Va. Clark, who taught at Virginia Tech while working full-time for an engineering company, said internships have proved invaluable for some COC students. He said one went on to study engineering at UC Berkeley a highly regarded program while another two went to Cal Poly San Luis Obispo and Cal State Northridge, which have solid programs in their own right, he said. The number of students that intern at the Borax lab varies on research opportunities, Clark said. In addition to Borax, local companies including Canyon Engineering Products and Vista Controls have placed COC students in internships recently, Clark said. The partnerships also extend to financial and other donations a traditional method of academic-business interaction. U.S. Borax is giving College of the Canyons $100,000 in five annual installments to pay for construction of a building called the University Center. A fundraising campaign in progress should raise the remaining money needed for construction, Fernandez said. Amgen is also donating more than its human capital. It gave Channel Islands $360,000 worth of equipment, including an advanced X-ray machine, and recently followed that up with another gift worth $200,000 to Channel Islands, a fledgling CSU campus that became independent from Cal State Northridge several years ago.

Owners of Westside’s Drago Open Restaurant at Posto Site By JEFF WEISS Contributing Reporter The Drago brothers, Tanino, Calogero, and Giacomino, owners of several restaurants including Santa Monica’s Drago, have opened Panzanella, a Sherman Oaks Italian restaurant in the space that was formerly Posto. Rather than mimic the upscale and expensive style of the former tenant, the Drago brothers plan to appeal to a broader audience with a lower priced menu in a more casual setting. “Panzanella is a little less formal then Posto. We want people to be very comfortable. We’d rather it be more like a family atmosphere. We want to make them feel like they are in their own house. Our prices are very fair, with pastas and salads ranging from $9 to $15 and entrees from $18 to $28,” co-owner Tanino Drago maintained. Posto operated in its Ventura Boulevard location for 12 years, but struggled for much of the period before Piero Selvaggio sold his restaurant and turned over the lease to the Drago brothers. “If I had to do it again, I would’ve made it a more casual, paper tablecloth, value oriented place,” said Selvaggio, who initially opened Posto as a Valley version of his highly successful Valentino, a top-rated restaurant in Santa Monica known for its extensive and expensive wine list. “The bottom line is that when there is a celebration and a time to entertain, most people go over the hill.” With entrees ranging anywhere from $25 to $34 and pastas from $12 to $18, prices were one factor in the demise of Posto. Selvaggio had adjusted the pricing and the wine list, both initially modeled after Valentino, in the years since Posto opened, but the elegant restaurant, with white table linens, nevertheless proved to be a difficult sell, he said. “Opening Posto in the Valley was definitely a very positive experience,” said Selvaggio. “We got to meet some wonderful people and a great deal of residents appreciated what we did But certainly Posto’s position as a high-end restaurant in a market that doesn’t regularly frequent such places was one reason for our closure. If you look at the most popular restaurants in the Valley, they are Cheesecake Factory and Caf & #233; Bizou and I think Caf & #233; Bizou hit it bigger than most. You have to cater to your target audience.” Leon Gottlieb, USA international restaurant hotel and franchise consultant, disagrees with Selvaggio’s logic that it is difficult for upscale restaurants to succeed in the Valley. “I think people in the Valley are sophisticated consumers. There is no lack of people in the industry looking to capitalize on the Valley’s population. It’s a thing of the past to stereotype the Valley’s residents as not patronizing fine dining establishments.” Still, the Drago brothers are directing their newest venture along the lines of their more casual restaurants. Tanino Drago thinks there is certainly a market for a more moderately priced establishment in that same commercial space where Posto operated. “We own seven restaurants now of varying styles and prices. Panzanella compares more to (our other restaurants) Il Pastaio in Beverly Hills and Tanino in Westwood (co-owned by Franco Semplicio). The concept we believe in is great food. It’s all about the food. The service has to be great but it doesn’t have to be formal .It’s a nice opportunity to open up our restaurant. We believe we can do it,” Drago said. Gottlieb agrees that casual dining presents the best chance to succeed in today’s restaurant climate. “A casual branch suggests a move into the mainstream. Certainly such places are a cut above quick service restaurants and a cut below fine dining. Casual service restaurants are probably in the greatest growth place, conforming more to a local face in the Valley,” Gottlieb said.

Jafra’s Fortunes, Solid Here, Falter in Mexico By SHELLY GARCIA Senior Reporter Another Hispanic marketer, Jafra S.A., has filed plans to go public, but the international company, with a large presence in Mexico, may be facing a much different environment. Jafra is seeing strong sales in the U.S. Hispanic market, but the company’s growth has been stymied by its South American operations. Jafra, a direct marketer of cosmetics and other personal care products, has seen sales decline in its Mexican markets, and the company has recently pulled out of a number of other Central and South American operations. Its plans to go public, announced late last month, follow an unsuccessful search for a buyer. Terms and timing for the IPO have not yet been determined, but Jafra has engaged Merrill Lynch, Credit Suisse First Boston and Banc of America Securities LLC as underwriters for the deal. Jafra, with corporate headquarters in Luxembourg and U.S. headquarters in Westlake Village, in 1998 was acquired by a New York-based buyout firm for $226.5 million. Clayton, Dubilier & Rice Inc. bought the company from The Gillette Co., presumably intending to turn it around and sell it. But a search for a potential buyer, which took up most of 2002, never materialized. Last year CD & R; completed a $290 million recapitalization plan intended to retire some debt and provide proceeds to CD & R.; The mergers and acquisitions market at the time was depressed, but Jafra’s Mexican operation has also been troubled. In the most recent nine-month period, revenues in Mexico decreased almost 10 percent to $172 million. Meanwhile, U.S. sales saw an 11.4 percent increase to $74.5 million for the same period, largely based on a reorganization focusing on the U.S. Latino market. The result? Sales in the U.S. Hispanic division increased 13.6 percent for the first nine months of 2003. For the nine months ended Sept. 30, Jafra’s net loss was $8.1 million on sales of $276.7 million, compared with earnings of $14.8 million on sales of $285.3 million for the nine-month period of 2002.

Valley Briefs Judge Hill Recognized Judge Alice C. Hill of the North Valley District of the Los Angeles Superior Court received the San Fernando Valley Bar Association’s (SFVBA) Judge of the Year Award at the SFVBA Annual Judges’ Night last week at the Woodland Hills Hilton. Hill was appointed to the Los Angeles Municipal Court by Gov. Pete Wilson in November 1995. She served as Supervising Judge of the San Fernando Branch from 1998 until the court’s unification with the Superior Court in 2000. Hill helped oversee the opening of the Chatsworth Courthouse in 2002, and a year later, the transfer of caseloads between San Fernando and Chatsworth. She is a member of the Los Angeles Superior Court Rules, Community Outreach, Domestic Violence, and Legislative Outreach Committees. Hill received her B.A. from Stanford University and her J.D. from the University of Virginia School of Law. Training Grant Received The Valley Economic Development Center has received a $557,000 grant from the U.S. Department of Health and Human Services to assist low-income residents of the Northeast San Fernando Valley with business start-up, expansion and financing. Assistance for the business owners will come in the form of a five-week Micro-enterprise Training Program. After completing the training and creating a business plan, participants will be eligible for loans in the amount of $700 to $5,000. Classes will be held in both Spanish and English. PerfectData Losses Mount Losses at PerfectData Corp. mounted in the most recent period as a result of the company’s failed acquisition attempt. PerfectData, a Simi Valley-based marketer of office care products, posted a loss of $211,000 or $0.03 per share for the third quarter ended Dec. 31, compared to a loss of $127,000 or $0.02 per share for the comparable period in 2002. Revenues increased 27 percent to $636,000 from $500,000 in the prior year period. PerfectData, which has been actively seeking a merger partner or acquisition in order to boost its revenues and stem a string of losses, had agreed to merge with SuperCom Ltd., an Israeli technology company, but the agreement was terminated earlier this year. The company attributed its loss for the period to expenses associated with that decision. PerfectData is now seeking approval to sell its operating assets to Spray Products Corp. For the nine month period, PerfectData posted a net loss of $471,000 or $0.08 per share, compared with a loss of $494,000 or $0.08 per share during the nine months in 2002. Semtech Forecast Bright Semiconductor manufacturer Semtech Corp. reported earnings of $12.5 million or $0.16 per diluted share, on sales of $55.4 million for the company’s fourth fiscal quarter ended Jan. 25, 2004. That compares with earnings of $62,000 or $0.00 per diluted share, on revenues of $44.5 million for the comparable period last year. Camarillo-based Semtech, said it anticipates a sales increase in the range of 7 percent to 10 percent for the first quarter of its fiscal 2005 year, compared to the fourth quarter results, and earnings in the neighborhood of $0.17 to $0.18 per diluted share. “New product development and design win data suggests continued strength in cellular phones, notebook computers, communications equipment and other portable devices in the coming year,” the company said in its earnings release. WellPoint Recognized Thousand Oaks-based WellPoint Health Network, Inc. came in second in a recently released survey ranking California’s top companies by gender diversity. Forty four percent of the directors on the board of WellPoint are women, said Leonard D. Schaeffer, the chairman and CEO of the nation’s second largest health insurer. The company also previously ranked as one of the top four employers for executive women. The gender survey was collected by Corporate Women Directors International, an advocacy group. Runaway Business More than 40 percent of California companies surveyed by the California Business Roundtable said they have plans to move jobs out of state, according to a new study. The researchers, Bain & Co., a global business consulting firm that conducted the survey, California Competitiveness Project, for the Business Roundtable, canvassed 50 companies, from small businesses with about $1.5 million in revenue to large corporations that had $90 billion in revenues, who noted that California’s business climate was bad. The companies surveyed were from various industries. “This research reveals that business as usual is not working in California,” said Dick Kovacevich, chairman and CEO of Wells Fargo and Co. and the Roundtable chairman. “The tech bubble merely masked the erosion (and) California has lost its edge.” The Roundtable membership is comprised of CEOs of the state’s top corporations. “Looking forward, if nothing changes, things are likely to get worse,” Kovacevich added. UCC Endorsements United Chambers of Commerce, an umbrella organization for the Valley’s chambers, has thrown its support behind Propositions 57 and 58 and voiced its opposition to Proposition 56 and Measure R in this week’s primary election. “Propositions 57 and 58 are necessary to protect California’s credit rating and put controls on the state legislature’s spending,” said Joel Simon, UCC chair. “At the same time, we can’t afford to give more money to the Los Angeles Unified School District (via Measure R) when we don’t have a good accountability of where all the previous bond money went.” If approved, Measure R would provide a $3.87 billion bond for the school district, one of the nation’s largest. UCC represents 24 member chambers in the Greater San Fernando Valley.

LETTER Read your Feb. 16 commentary “Time for Seizing the Moment in L.A.’s Business Tax Reform” regarding the Los Angeles business tax situation. I believe the conclusion you reached regarding the lack of receiving comments and questions you requested from readers in this matter is flawed. The debate of the business tax has been going on for years, and there have been reports upon reports submitted after earlier reports and committees have previously been charged with the same task. The business community, in my view, is just fed up and resigned to the current condition. Take the current state of affairs. A telephone call for information on recent correspondence businesses receive relating to the state/city matching takes an inordinate amount of time to resolve, and generally requires a second or third call or letter and even then is not finalized. Their Web is, in my opinion, not user friendly and requires tough negotiation to find what you are looking for. My clients have just given up and are either resigned to paying the tax or relocating out of Los Angeles. Many have been waiting for years and years for a common sense business tax, and conclude that the license revenue is a cash cow for the city and will not be changed regardless of what any commission suggests. A real corker, however, is something that I have not seen mentioned anywhere. The city has a 3-year statute for collecting back taxes in an audit or submission of an amended form. However, it has a one-year limitation for overpayments and will only issue refunds checks for a one-year statute. Fair I think not and this issue is not addressed in anything I have read. I submit that this issue alone is worth comment from the finance director. Why keep running up a hill of ice when there are so many other issues that may be changed or resolved without having to wait an eternity? Donald Lucove, CPA Calabasas

Capitol Punishment: Legislation Worsens Hospital Crisis Guest Column By Gregory N. Lippe Over the past several years we have experienced numerous examples of the detrimental effects to our state’s future resulting from a common cause. I’m referring to long-term commitments made by our elected officials to deal with immediate and usually short-term conditions. We have experienced the effects of high-cost long-term energy contracts signed by Gov. Davis to solve an immediate crisis. We have seen our state’s financial condition change from a surplus to a monstrous deficit due substantially to increased long-term spending programs implemented during a short-term revenue bubble attributable to the dot-com era. Now we are experiencing a major shortage of hospital bed space and qualified nursing personnel. This condition is being severely aggravated by the current and future effects of legislation passed in prior years. On September 21, 1994, in the aftermath of the Northridge earthquake and the repeat of significant damage to Olive View Hospital, SB 1953, authored by State Sen. Alquist was signed into law. This bill requires seismic retrofit to be accomplished at all acute care facilities by 2008 unless extended to 2013 by qualifying exemption. Tenet Healthcare Corporation estimates that the costs to retrofit its California hospitals will exceed $1.6 billion. Tenet is presently attempting to sell 19 of these hospitals, including the two campuses of Encino Tarzana Regional Medical Center. According to Encino attorney Lee Kanon Alpert, chairman of Encino Tarzana Regional Medical Center, the sale of the 19 hospitals will save Tenet approximately $1 billion in retrofit costs. Additionally, Alpert stated, “the retrofit requirements placed on the hospitals far exceed the safety standards placed on school buildings, and many of the hospitals that are facing significant retrofit costs survived the previous quakes without significant damage.” Could it be that our legislators did not mandate the same rigorous requirements for school buildings because they would have needed to provide the funds to cover the costs? Mandating the expenditures without providing some form of government cost reimbursement or tax incentives to all hospital owners is placing a significant burden on these owner companies. When will legislators stop using one standard for business and another for government? The threat of the impending burden on hospital owners is causing facility closures, halting expansion plans and reducing capital expenditures for upgrading equipment and services. All of this is occurring at a time when there is a serious shortage of hospital facilities and beds available to meet the current demands. One evening last week the 10-year-old physically and developmentally disabled son of a friend of mine fell victim to the effects of the critical shortage that exists. My friend and his wife brought their son to their local hospital to be treated for pneumonia. The hospital provided preliminary treatment in the emergency room and then informed the concerned parents that the hospital no longer had a pediatric ward and that their son should be admitted to a hospital that did. Eight hospitals were contacted from Thousand Oaks throughout the San Fernando Valley to Los Angeles Children’s Hospital. None of these hospitals had beds available. After keeping the child in the emergency room throughout the night, due to the lack of a facility for admission, the decision was made to provide antibiotics and breathing aids and to send him home to be treated by his parents. Flirting with disaster What would happen if our cities were to suffer a catastrophic event requiring significant hospital resources? As if SB 1953 was not enough, our hospitals must deal with yet another costly and restrictive bill. On October 10, 1999 AB 394, authored by then Assemblymember, now Senator Sheila Kuehl was signed into law. Final regulations were released last summer and implementation began on Jan. 1. This bill mandates minimum nurse-to-patient ratios for acute care facilities ranging from 1:1 for trauma and triage to 1:6 for general medical and surgical. The California Department of Health Services (DHS) interprets the regulations as requiring these ratios to be maintained “at all times.” This interpretation means that hospitals must keep qualified, surplus nursing staff standing by to provide fill-in coverage anytime an assigned nurse is temporarily away from his or her patients, including lunch and restroom breaks etc. Non-compliance can result in a hospital administrator being charged with a criminal misdemeanor. This bill also does not provide for any form of government reimbursement for additional costs or tax incentives to lighten the burden on hospital owners. Additionally, the ratios do not distinguish between hospitals that have state-of-the-art monitoring equipment that would logically need less nursing personnel and those that have less sophisticated equipment requiring more personnel. Finally, exemptions have not been provided for the inability of many hospitals to meet the mandated ratios due to the current shortage of nurses in California. Victim of regulation As indicated above, implementation of the minimum nurse-to-patient ratio regulations began on Jan. 1. On Jan. 8, Santa Teresita Hospital in Duarte became the first hospital in Los Angeles County to announce its cessation of operations as an acute care hospital due to inability to meet the new mandated staffing requirements. Once again, the potential long-term effects of what appears to be well-intended legislation were not carefully considered. The sad result poses a serious threat to the wellbeing of all residents of California. Voting information for SB 1953 and AB 394 is provided below. None of the legislators that voted on SB 1953 still represent the Valley and some of the legislators that voted on AB 394 who were assemblymembers in 1999 are now senators. The information provided below presents the legislators in the offices they held at the time of the vote: -Valley legislators voting for SB 1953: Assembly, Boland, Katz, B. Friedman, T. Friedman, Takasugi; Senate, Roberti, Rogers, Rosenthal, Wright. -Valley legislators voting against SB 1953: None -Valley legislators absent, abstaining or not voting on SB 1953: Assembly, Margolin. -Valley legislators voting for AB 394: Assembly, Cardenas, Kuehl; Senate, Alarcon. -Valley legislators voting against AB 394: Assembly, Margett, McClintock, Strickland; Senate, Knight. Gregory N. Lippe, CPA, is managing partner of the Woodland Hills-based CPA firm of Lever, Lippe, Hellie & Russell LLP (LLHR) and a director of the Valley Industry and Commerce Association (VICA).