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VOL. 123 | NO. 148 | Wednesday, July 30, 2008

Daily Digest

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KIK Sells South Third Property for $2.3M

KIK Custom Products Inc. has sold its Memphis manufacturing plant at 1725 S. Third St. to AGNL KIK LLC, the local operating entity of a New York-based company. The $2.3 million transaction closed July 16.

KIK Custom Products – formerly known as CCL Custom Manufacturing Inc. – sold its 23.61-acre property and 316,830-square-foot facility as part of a company-wide plan to raise capital. KIK, based in Concord, Ontario, outside Toronto, now will lease the property from AGNL, something the company has been doing throughout its North America footprint.

“Some plants we own outright – the building, the grounds and everything else – and some plants we basically lease,” said Sam Hamrick, general manager for the Memphis plant. “We made a decision in order to raise some funds that we would sell some plants and lease them back at low interest rates and long-term leases. We sold this plant and leased it back for 20 years.

“We’ll take that money and plow it right back into improving the operations within the plant.”

KIK has 21 manufacturing plants in North America. The Memphis plant manufactures liquids – such as body washes, shampoos, lotions and sun care products – and fills bottles with those products for such companies as Proctor and Gamble, Johnson & Johnson and L’Oreal.

The Memphis facility employs 350 people, Hamrick said, and that number is expected to remain steady in the coming months and years. While improvements could reduce the number of people needed to operate the plant, those upgrades also will increase volume, meaning employees simply will move to other jobs in the facility.

The Shelby County Assessor of Property’s 2008 appraisal of the South Third facility is $2.6 million.

Source: The Daily News Online & Chandler Reports

First Horizon Names New IT Leadership

First Horizon National Corp. on Tuesday announced a new information technology leadership team to advance the company’s nationally recognized IT program.

Bruce Livesay was named chief information officer. Auzzie Kennedy Brown and Randall Carrier were named deputy chief information officers.

Livesay is a 20-year bank technology veteran and was senior vice president of application delivery at Regions Bank in Birmingham, Ala. He replaces retired First Horizon CIO Patrick Ruckh.

Brown, a 20-year military officer, advised the U.S. Department of Defense on information technology at the Pentagon. He provided leadership

for key military technology initiatives including the implementation of a global IT network to support U.S. national security goals.

Carrier has been with First Horizon since 1995 and was director of customer knowledge and digital strategy. He was instrumental in developing and implementing the company’s digital strategy and use of Service Oriented Architecture, designed to improve customer experience.

Wright Medical Exceeds Q2 Initial Outlook

Wright Medical Group Inc. has exceeded its initial outlook and reported net sales of $118.5 million, a 21 percent increase over last year, during the second quarter.

The company reported a net loss of $2.4 million, up from $2.1 million a year ago, which is attributed to the closing of its facilities in Toulon, France, an unfavorable appellate court decision, stock-based compensation and an ongoing inquiry by the U.S. Department of Justice.

Excluding those items, net income rose to $7.2 million from $6 million last year.

Domestic sales totaled $69.1 million, an increase of 18 percent, and international sales totaled $49.3 million, an increase of 25 percent.

Globally, the company saw growth in all of its major product lines including 49 percent in extremities products, 21 percent in knee products, 20 percent in hip products and 4 percent in biologics.

Wright Medical Group now expects sales for 2008 to be between $465 million and $470 million.

Valero’s Q2 Profit Down 67 Percent

Valero Energy Corp. reported Tuesday its second-quarter profit fell 67 percent as refining margins for products such as gasoline shrank.

The San Antonio-based company announced net income for the April to June period fell to $734 million, or $1.37 a share, from $2.25 billion, or $3.89 per share, a year ago.

Revenue rose to $36.6 billion from $24.2 billion in the prior year period.

Chairman and Chief Executive Bill Klesse said Valero sees no immediate improvement in margins on gasoline, though he predicted margin recovery for some secondary products if crude prices stabilize or fall – as they have in recent weeks.

He said the company continues to review its capital spending and now expects to reduce 2008 expenditures by $700 million from its original estimate of about $4.5 billion.

In an ongoing effort to focus on core refineries, Valero officials said it’s still pursuing the sale of its Aruba refinery. Two others – its Memphis and Ardmore, Okla., facility – have garnered some interest but remain under “strategic review,” the company reported. For now, Valero operates 16 refineries and 5,800 retail and wholesale outlets in the United States, Canada and the Caribbean.

Bridges in Good Shape, TDOT Commissioner Says

As a national highway group reported that one in four bridges in the U.S. needs to be modernized or repaired, Tennessee’s transportation chief said the state has the sixth lowest percentage of structurally deficient bridges in the nation.

State Transportation Department Commissioner Gerald Nicely said at a news conference in Nashville on Monday that 2.4 percent of Tennessee’s interstate bridges are deficient, and 4.7 percent of all the state’s 19,519 bridges are classified as structurally deficient.

“Our bridge inspection program is constantly cited as one of the best in the nation and was one of only three in the U.S. to complete all inspections on time in 2007, but we know there is room for improvement,” TDOT chief engineer Paul Degges said.

Almost a year after 13 people died in the Interstate 35W bridge collapse in Minneapolis, the American Association of State Highway and Transportation Officials issued a report highlighting problems with the nation’s bridges.

Degges said the state department requested a study of its bridge program after the Minneapolis collapse on Aug. 1 and now is implementing suggestions from that review. That includes additional training for bridge inspectors and the use of sonar scans to improve underwater inspections.

TDOT also is implementing a new program to save some of Tennessee’s historic bridges, for cars, pedestrians or other uses.

TDOT dedicated more than $130 million to replace and repair bridges during the fiscal year that ended June 30, according to a statement from the department. Another $116.6 million will go to bridge repair and replacement this fiscal year.

Fed Auctions $75B To Ease Credit Stresses

The Federal Reserve has auctioned another $75 billion in loans to squeezed banks to help them overcome credit problems.

The central bank on Tuesday released the results of its most recent auction. It’s part of an ongoing program started in December that seeks to ease financial turmoil and credit stresses. Those problems – along with the deep housing slump – have badly pounded the economy, forcing companies and people to hunker down.

In the latest auction, commercial banks paid an interest rate of 2.350 percent for the 28-day loans. There were 70 bidders. The Fed received bids for $90.56 billion worth of the loans. The auction was conducted Monday with the results made public Tuesday.

In mid-December the Fed announced it was creating an auction program that would give banks a new way to get short-term loans from the central bank and to help them over the credit hump. A global credit crunch has made banks reluctant to lend to each other, which has crimped lending to individuals and businesses.

The smooth flow of credit is the economy’s oxygen. It permits people to finance big-ticket purchases, such as homes and cars, and help businesses expand operations and hire workers.

Wanting to avert a broader panic that could endanger the entire U.S. financial system, the Fed has taken a number of extraordinary actions to provide relief. In its broadest extension of lending authority since the 1930s, the central bank agreed in March to temporarily let investment firms obtain emergency, overnight loans directly from the Fed, a privilege that only commercial banks had been granted.

More recently, the Fed said it would allow troubled mortgage giants Fannie Mae and Freddie Mac to tap its emergency borrowing program — if they needed cash to stay afloat. The companies haven’t done so.

PROPERTY SALES 0 133 1,342
MORTGAGES 0 131 1,047