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VOL. 6 | NO. 23 | Saturday, June 1, 2013

Daily Digest

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Fred’s Net Income Rises 9 Percent

Discount retailer Fred’s Inc. said Thursday its first-quarter net income rose 9 percent, helped by a modest rise in sales and lower costs.

The results topped Wall Street predictions, and shares rose in morning trading.

For the three months ended May 4, Fred’s earned $11.4 million, or 31 cents per share, up from $10.5 million, or 28 cents per share, in the 2012 first quarter.

Revenue totaled $501.5 million compared with $500.5 million a year ago.

Analysts, on average, expected a profit of 27 cents per share on $499.5 million in revenue, according to FactSet.

The Memphis-based company said its revenue at stores open at least a year fell 1.3 percent. The metric is a key measure of a retailer’s health, because it excludes sales at stores that recently opened or closed.

Fred’s said it remains “guardedly optimistic” about the second quarter. It projected a profit of between 6 cents and 9 cents per share on sales growth of between 2 percent and 4 percent. Based on the company’s prior-year results, the guidance implies revenue of between $480.2 million and $489.6 million for the current quarter.

Analysts expect earnings of 10 cents per share on $481.6 million in revenue.

The company also backed its full-year profit prediction for earnings of 77 cents to 88 cents per share, while analysts expect earnings of 82 cents per share.

Shares of Fred’s rose 84 cents, or 5.5 percent, to $16.04 in morning trading. The stock has changed hands between $12.30 and $16.08 in the past 52 weeks, and is up about 20 percent since the start of the year.

Jones Awarded Honor At Riverside Military Academy

John Paul “Jack” Jones, former publisher of The Daily News, is the recipient of the President’s Philanthropy Award from Riverside Military Academy.

Jones, a 1938 graduate of the Gainesville, Ga., institution, was honored this month for donations and contributions to numerous cultural, religious and educational organizations in Memphis and elsewhere in the country.

Jones attended the academy in the foothills of the Blue Ridge Mountains for two years before attending and graduating from Vanderbilt University in Nashville followed by service in the U.S. Navy during World War II.

After his war service, Jones earned his law degree from the University of Virginia.

At Riverside he is best remembered for a senior year trip he and his classmates made to Cuba with a group of dignitaries from Georgia.

Guardian Relocation Moving Into Memphis

Guardian Relocation Inc. is moving into a new regional market in the Mid-South: Memphis.

The Memphis branch is the first office in Tennessee for Guardian, which already operates from three locations in Indianapolis, Ft. Wayne, Ind., and Columbus, Ohio.

An agent of one of the nation’s leading movers like Atlas Van Lines, Guardian will focus on all aspects of the moving and storage industry, including residential interstate moving, storage, commercial relocation, specialized transportation, distribution and logistics. Guardian plans on capitalizing on Memphis’ location and strong industrial and logistics infrastructure.

Jay Fuson, owner of Guardian Relocation Inc., said he believes the company adds value to “Atlas, the Atlas family of agents and to the Memphis community.”

FedEx Building Center In Indiana

FedEx is set to start building a package distribution center in suburban Indianapolis.

The company says it will build the 300,000-square-foot facility in Zionsville a couple miles north of Interstate 465. The Indianapolis Star reports the new facility will cost $40 million.

The company plans to open the center in August 2014 with about 200 workers, although most will be transferring from an existing Indianapolis FedEx facility.

FedEx says that Indianapolis center will remain open and both sites are expected to add employees over time.

International Paper Subsidiary Fined $3.3 Million

A federal judge has ordered Temple Inland, a subsidiary of Memphis-based International Paper, to pay $3.3 million and serve two years of probation for polluting the Pearl River in 2011 with illegal discharges from its Bogalusa paper mill that killed thousands of fish.

Equipment malfunctioned at the mill, which makes containerboard, allowing an untreated plume of a substance known as black liquor to flow into the Pearl River. Black liquor isn’t toxic, but it sucked up all the oxygen in the river as it decayed, suffocating more than 160,000 fish and more than 430,000 freshwater mussels.

An International Paper spokesman said Thursday the company has made major improvements at the Bogalusa plant since acquiring Temple Inland 2012.

“We have invested considerable financial and human resources into improving the mill and correcting the issues that affected it prior to the purchase,” Thomas J. Ryan said in an email.

Those included infrastructure improvements and the hiring of new personnel, including an environmental scientist to lead the renovation of the wastewater treatment system, Ryan said.

U.S. Attorney Dana Boente’s office, in a news release, said U.S. District Judge Ivan L.R. Lemelle ordered the company Wednesday to pay $1.2 million in restitution and a criminal fine of $1.5 million “for the harm caused by the negligent discharge to the Pearl River and its tributaries,” including the loss of the protected species Gulf sturgeon and other aquatic life, Boente’s office said. The company pleaded guilty in February to a two-count bill of information charging it with misdemeanor counts of negligent violation of the Clean Water Act and the Refuge Act.

Kyle Files Bill to Create Grizzlies License Plates

Tennessee state Sen. Jim Kyle has filed a bill that would create a Memphis Grizzlies specialty license plate.

If approved, the plate would support the Memphis Grizzlies Charitable Foundation, which supports youth sports and mentoring programs in Shelby County.

To get it done, Kyle’s office needs to hear from fans and anyone who’d want a plate. Creating a specialty plate requires legislative approval, as well as 1,000 pre-orders. Anyone interested in pre-ordering a plate can email Kyle’s legislative office at sen.jim.kyle@capitol.tn.gov.

The Tennessee Titans and Nashville Predators already have similar plates.

Lawsuit Seeks Restoration Of Confederate Park Names

A group of nine Memphians called “Citizens To Save Our Parks” is taking the city of Memphis and the Memphis City Council to court over the council’s February decision to temporarily rename three Confederate-themed parks.

The Shelby County Chancery Court lawsuit filed Wednesday, May 29, contends the mayor’s office through the parks services director has the authority to rename parks, not the council. And the lawsuit, assigned to Chancellor Kenny Armstrong, also says the council resolution violates a state law signed into law after the council acted.

The lawsuit filed by Nashville attorney Douglas E. Jones seeks a declaratory judgment from Armstrong that would make the council’s actions “null, void and invalid” and restore any signage taken down in the parks by the administration.

The administration of Memphis Mayor A C Wharton Jr. took down the signage before the council passed the resolution and earlier it removed a stone marker paid for and placed in Forrest Park by the group Sons of Confederate Veterans.

The group claims it had permission from the city for the marker bearing the name of the park near the curb of Union Avenue in front of the statue of Confederate General, Ku Klux Klan leader and slave trader Nathan Bedford Forrest.

The lawsuit claims that in a 2005 legal opinion, City Council attorney Allan Wade told council members only the mayor could change the name of a park since the city abolished the park commission that was at one time the regulatory authority for parks.

But the council resolution passed in February to rename Forrest, Confederate and Jefferson Davis parks was backed by Wharton.

Orion CEO Elected To National Credit Union Association

Daniel Weickenand, CEO of Orion Federal Credit Union, has joined the board of the National Association of Federal Credit Unions.

He’s been elected to a one-year term and will be eligible to run for a full three-year term next year. Weickenand is the first elected official from Tennessee since 1990 and will begin his term following the close of the NAFCU annual business meeting in July in Boston.

St. Jude Associate Named Health-System Pharmacists

James Hoffman, an associate member in the St. Jude Children’s Research Hospital Pharmaceutical Sciences Department, has been named a fellow by the American Society of Health-System Pharmacists for excellence in pharmacy practices.

Hoffman is an expert in national drug shortages and also focuses on medication safety. He led a national survey of oncology pharmacists published in March that found drug shortages are taking a heavy toll on cancer patients, including higher costs and treatment delays.

The 2013 fellows will be honored in June during the ASHP Summer Meeting and Exhibition in Minneapolis.

American Athletic Conference Unveils New Logo

The new athletic conference for the University of Memphis, American Athletic Conference, has a new look to go with its new name. The former Big East conference released its logo on Thursday.

“It’s a very important step in the rebranding of our conference and the reinvention of the American Athletic Conference,” Commissioner Mike Aresco said during a conference call.

The big block blue A with a red star at its center is part of the rebranding of the new conference, which will begin competition this fall.

“It’s a bold symbol and an elegant design,” Aresco said.

The American will consist of Rutgers, Louisville, South Florida, Connecticut, Cincinnati, Temple, Central Florida, Memphis, Houston and SMU next year.

Rutgers and Louisville will leave after the 2013 season and Tulane, Tulsa and East Carolina will join in 2014. Navy is set to become the 12th member in 2015.

Methodist Healthcare Launches Diabetes Program

Methodist Le Bonheur Germantown Hospital and Methodist University Hospital are launching a free diabetes prevention program that can help high risk individuals avoid or delay on the onset of type 2 diabetes.

One in three adults has prediabetes, a condition where blood glucose levels are higher than normal, but not yet high enough to be diagnosed as diabetes. Many people with prediabetes develop type 2 diabetes, a condition that often can be preventable with lifestyle changes.

Led by the Centers for Disease Control and Prevention, the curriculum is based on research that found people can cut their risk of developing type 2 diabetes in half by losing 5 percent to 7 percent of their body weight, improving food choices and increasing physical activity by 150 minutes per week.

Participants meet with a trained lifestyle coach and learn how to make changes like losing weight, being more physically active and managing stress.

TennCare Reports 1,700 Arrests for Fraud

The TennCare Office of Inspector General says there have been more than 1,700 arrests for fraud against the state health care system since 2005.

The inspector general’s office, which is separate from TennCare, began full operation in February 2005 and has investigated cases leading to more than $3.5 million paid in restitution to TennCare.

The latest arrest reported was announced Tuesday, May 28, and was that of a Gibson County woman, charged with using TennCare benefits to pay for pain medication and then selling pills. She is 45-year-old Gina Darlene Willis of Bradford.

Citizens can report suspected TennCare fraud toll-free at (800) 433-3982 or online at http://www.tn.gov/tnoig and follow the “Report TennCare Fraud” prompts.

Sallie Mae to Split Into Two Companies

Sallie Mae plans to split into two separate, publicly traded companies. The student loan giant also named John Remondi as its CEO.

Sallie Mae, formally named SLM Corp., said Wednesday that the two separate companies – an education loan management business and a consumer banking business – would help unlock value and boost its long-term growth potential.

The education loan management business would include the company’s portfolios of federally guaranteed and private education loans, as well as most related servicing and collection activities. Remondi will continue as its CEO.

The principal assets of the business are likely to include approximately $118.1 billion in federally guaranteed loans, $31.6 billion in private education loans, $7.9 billion of other interest-earning assets; and a loan servicing business with about 10 million student loan customers.

This includes 4.8 million customer accounts serviced under Sallie Mae’s contract with the U.S. Department of Education.

Sallie Mae’s private education loan origination and servicing businesses, including Sallie Mae Bank and the private education loans it currently holds, will operate separately under the Sallie Mae brand.

Joseph DePaulo, executive vice president of banking and finance will serve as the consumer education lending franchise’s CEO.

The consumer banking business’ assets are likely to include about $9.9 billion of assets made up mostly of private education loans and related origination and servicing platforms; cash and other investments and the Sallie Mae Upromise Rewards program.

The two separate companies will initially be owned by Sallie Mae stockholders, but the separation of the businesses does not require a shareholder vote.

Newark, Del.-based Sallie Mae anticipates the split, if given final approval by its board, could be completed within 12 months.

Tennessee Homeowners Win Relief in Mortgage Settlement

Tennessee homeowners have received more than $170 million in relief so far as part of the national mortgage settlement with the nation’s five largest mortgage servicers that was announced in February 2012.

That’s according to the most recent progress report from the settlement monitor. The settlement arose out of an investigation into mortgage servicing and foreclosure practices.

Tennessee homeowners are continuing to receive substantial benefits under the settlement more than one year after it was first announced. Eligible Tennessee homeowners have received $173 million in relief from March 1, 2012, through March 31, 2013. That relief includes loan modifications, refinances, short sales and deficiency waivers.

The monitor’s report also shows that servicers are offering an additional $49 million in loan modification savings to eligible Tennessee homeowners.

Mississippi Casino Revenues Fall 6 Percent in April

Mississippi casino revenue kept falling in April, with gamblers losing less than in any other April since 1998.

Mississippi Department of Revenue figures show statewide casino revenue fell 6 percent to $176.3 million.

Year-over-year casino revenue has fallen in every month since July 2012. The state’s casinos, over the last 12 months, have collected only about 75 percent of the money they collected in 2007, the peak year for gambling revenues.

The numbers exclude Choctaw Indian casinos, which aren’t required to report winnings to the state.

The 18 river casinos from Tunica to Natchez won $90.6 million, down 3 percent from the $93.7 million they won in April 2012. The 12 coastal casinos won $85.7 million from gamblers, down 8 percent from the $93.4 million they won in January 2012.

The declines have been steeper, in general, along the river. The parent companies of several casinos in Vicksburg and Tunica have faced financial distress. Part of the recent weakness at Tunica and Lula casinos has been competition from expanded gambling venues in Arkansas.

The continued downdraft is hurting not only state and local tax receipts but employment.

In January, for example, Boyd Gaming Corp. laid off 100 people from its Sam’s Town casino in Tunica, according to figures from the Mississippi Department of Employment Security.

King Documentary Wins Prestigious Peabody Award

A documentary about the assassination of Dr. Martin Luther King Jr. has won the prestigious Peabody Award, with the help from the University of Memphis Libraries.

“MLK: The Assassination Tapes,” directed by Tom Jennings, follows the 1968 Sanitation Workers Strike in Memphis and other events leading up to King’s murder.

The film makes use of various formats of material from the Sanitation Workers Strike Collection in the Libraries’ Special Collections Department.

Under the direction of professor David Yellin of the Department of Speech and Drama, a group of concerned citizens, including many U of M faculty and staff, began collecting documents and other materials related to the dispute between the striking sanitation workers and city officials.

After King’s murder, they branched out and began soliciting outtake and broadcast footage of the events of early 1968 from TV networks and local affiliates. They also conducted oral interviews with participants and well-placed observers, including a few strikers, most of the local and AFSCME union leaders, community leaders, Memphis Mayor Henry Loeb and his assistants, and members of the Memphis City Council. About 150 individuals were interviewed.

State Archivists to Appear In Somerville in June

Archivists from the Tennessee State Library and Archives and the Tennessee State Museum will be in Somerville June 6 to record and archive Civil War memorabilia.

The archivists are collecting the digital records and photos for a new exhibit and are visiting other parts of the state and region as well. The group plans to visit all 95 Tennessee counties.

Area residents can meet with the archivists at the Somerville-Fayette County Public Library, 216 W. Market St., from 3 p.m. to 7 p.m. on June 6.

The archivists will scan or take digital photos of the items and return them to their owners at the library after doing so. They will also give those bringing items a copy of the photos they take and offer tips on how to better preserve the items.

To make a reservation with the archivists call 615-741-1883 or email civilwar.tsla@tn.gov.

Reservation forms and a list of available appointment times are on the Secretary of State’s website at http://tn.gov/tsla/cwtn/cwtn_events.htm.

Scenic Tennessee Launches Anti-Litter Campaign

The nonprofit group Scenic Tennessee is promoting an anti-litter campaign that combines music, scenic photography and community cleanups with online videos and social networking.

The effort begins Saturday, June 1, with a month-long Pickin’ Up Tennessee tour designed to drive home the campaign’s message: Love the land. Lose the litter.

Pickin’ Up Tennessee has enlisted musicians in 20 tour locations to provide a soundtrack for the campaign. Organizers are now seeking volunteers for the cleanups.

According to the Tennessee Department of Transportation, last fiscal year more than 23 million pounds of litter were collected from Tennessee’s county, state route and interstate roadsides.

The schedule of events is at www.PickinUpTN.org.

Employment Program Provides Job Training

Memphis’ Workforce Investment Network has selected Porter-Leath to coordinate and manage the 2013 Summer Youth Employment Program.

Employers in Shelby and Fayette counties will provide career experience and training for 400 young people from age 16 to 21.

Porter-Leath is working to secure job placements and employer worksites by June 10.

There is no expense for employers, but they must agree to provide meaningful work, training and supervision for program participants.

“Preparing our youth and providing them with job training and readiness is critical to their success as an adult,” said Sean Lee, president at Porter-Leath.

Hungry TennCare Eating More of State Budget

State Treasurer David Lillard says expanding health care costs could absorb funding the state used to spend on other needs.

The Jackson Sun reported Lillard talked about the potential impact of the Affordable Care Act on Tennessee finances as he spoke to the West Tennessee Association of Health Underwriters on Thursday.

Lillard noted the state budget that goes into effect July 1 contains $391 million in new revenue and more than $300 million of that will be consumed by TennCare.

“You’re dealing with a situation where you can have a shift in priorities going forward,” he said.

Lillard said the federal act puts a mandatory $1.2 billion financial load on Tennessee.

“That’s from (fiscal year) 2013 to (fiscal year) 2019,” Lillard said. “That’s about $200 million a year.”

Lillard said support for higher education could further erode as a result. In 1990, state revenue funded more than half the cost of state universities. That percentage has already declined to about 38 percent and could be further reduced.

Lillard said with TennCare using up most of the money, programs such as higher education and K-12 schooling will have to compete for funding.

US Durable Goods Orders Rise 3.3 Percent in April

U.S. orders for long-lasting manufactured goods rebounded in April, buoyed by more demand for aircraft and stronger business investment. The gains suggest economic growth may be holding steady this spring.

Orders for durable goods, items expected to last at least three years, rose 3.3 percent last month from March, the Commerce Department said Friday. That followed a 5.9 decline in March.

A measure of business investment plans increased 1.2 percent. And the government revised the March figure to show a 0.9 percent gain, instead of a slight decrease.

Companies ordered more machinery and electronic products last month, typically signs of confidence. More spending by businesses could ease fears that manufacturing could drag on the economy later this year.

Factories had been seeing fewer orders at the start of the year, in part because slower global growth had reduced demand for U.S. exports. Economists had also worried that across-the-board federal spending cuts and higher taxes might prompt businesses to cut back on orders.

Paul Ashworth, an economist with Capital Economics, said the April report suggests economic growth is holding up. He predicts growth in the April-June quarter will be at a rate of 2 percent to 2.5 percent. That’s not much lower than the 2.5 percent rate reported for the January-March quarter.

Still, the payoff from the pickup in business investment may not come until the end of the quarter. That’s because the government looks at shipments when it measures the gross domestic product, not orders. And shipments of goods that signal investment plans fell in April.

PROPERTY SALES 67 67 16,128
MORTGAGES 81 81 18,637
BUILDING PERMITS 213 213 33,603
BANKRUPTCIES 52 52 10,366