VOL. 8 | NO. 23 | Saturday, May 30, 2015
EMPHASIS Public Companies
Snapshot: Memphis-Based Public Companies
Here's a look at what's going on at the dozen public companies headquartered in Memphis:
AutoZone Inc. is one of the largest auto parts retailers and distributors in the U.S., with a store count of 5,476 as of Feb. 14. Since 1998, the company has repurchased $15.7 billion worth of its own shares. At the end of March, AutoZone continued its share buyback program with the authorization to buy back another $750 million in company stock. The company followed that news with plans to pursue a $650 million debt offering to be used for “general corporate purposes.” – Andy Meek
EdR, formerly known as Education Realty Trust, is making some significant changes in its finance department. The student housing real estate investment trust announced May 26 that J. Drew Koester was appointed to senior vice president of capital markets and investor relations, a newly created role, and that Lindsey Mackie would move to Koester’s position of senior vice president and chief accounting officer. Bill Brewer, EdR’s chief financial officer, said the demands of shareholders, analysts and others in the banking and finance community had “grown to the point that we need to dedicate internal expertise to this vital segment of our business.” – Amos Maki
FedEx Corp. and TNT Express are making “timely” progress on the Memphis-based company’s plan to acquire the Dutch firm for $4.8 billion. When FedEx and TNT announced the acquisition plan April 7, analysts predicted the companies could face scrutiny from European regulators – the proposed deal came two years after United Parcel Service dropped a takeover bid of TNT over regulatory concerns – but the companies expressed confidence the deal would be approved. FedEx expects to submit a request for review and approval of its offer document with the Netherlands Authority for the Financial Markets by June 30. – Amos Maki
First Horizon National Corp.
First Horizon National Corp. is the bank holding company for First Tennessee Bank. Services it offers include general banking, investments, asset management, trusts, fixed income sales and mutual fund sales, among other things. The company reported a first-quarter loss of $76.7 million driven by a mortgage-related legal settlement, but excluding that litigation charge, the company’s first-quarter profit would have been $41.8 million. That’s still down slightly from the $45 million profit reported at this time in 2014. The company has been working to beef up its technology capabilities, in addition to focusing on Tennessee and a few markets beyond – a slimmer bank from the days of the real estate boom. – Andy Meek
Discount merchandiser Fred's focuses on general goods as well as pharmacy offerings. In March, the company reached a $66 million deal to acquire Reeves-Sain Drug Store Inc., a private specialty and retail pharmacy company based in the Nashville area. The move makes good on the Fred’s corporate strategy shift last year that emphasized its pharmacies as well as pharmacy acquisitions. The company also has a relatively new leadership team, with Jerry Shore tapped as CEO toward the end of 2014 and several new executives added since then. – Andy Meek
GTx is a biopharmaceutical company focused on treating cancer and other serious medical conditions. The company’s lead product candidate is enobosarm, and in March, GTx entered into an exclusive license agreement with the University of Tennessee Research Foundation to develop the foundation’s proprietary selective androgen receptor degrader technology. According to a recent regulatory filing, GTx estimates that its current cash, cash equivalents and short-term investments “will be sufficient to meet its projected operating requirements through the end of 2016.” – Andy Meek
International Paper Co.
International Paper Co., a 117-year-old paper and packaging company with a global reach, has had a transition in leadership in the last year. Mark Sutton succeeded John Faraci as CEO and chairman in October, following a decade-long restructuring effort.
“Part of my role is to solidify what we have built. Not everything has worked,” Sutton said just before Memorial Day at a Goldman Sachs conference. International Paper, which is in the process of moving into the newest tower at its East Memphis headquarters, reported first-quarter net earnings of $313 million on April 29. The next day, it finalized the sale of its Carolina brand printing paper business to MeadWestvaco Corp. for an undisclosed amount. – Bill Dries
MAA, the real estate investment trust formerly known as Mid-America Apartment Communities Inc., reported $1.32 earnings per share when it released quarterly earnings on April 29, beating estimates of $1.29 earnings per share. Gary Shorb, who has served as director of MAA since 2012, invested in 1,000 shares of the REIT on May 5. That move got stock watchers wondering if MAA should be considered a “buy.” On May 6, financial news and analysis website Octafinance looked at MAA’s price per share over the previous 200 days and found it had increased 4.6 percent and showed a “steady and strong uptrend.” – Amos Maki
Mueller Industries Inc.
Mueller is a bellwether of the housing market as a manufacturer of copper tubing and brass fittings used in construction. At the end of first quarter 2015, Mueller executives in Memphis announced they had acquired the stock of Turbotec Products Inc., a company that works in heat transfer technologies, for $14.2 million. Mueller executives told analysts and investors that the Turbotec acquisition is part of a growth strategy in the heating, ventilation and air conditioning sector. – Bill Dries
ServiceMaster Global Holdings Inc.
ServiceMaster Global Holdings, a portfolio of residential- and commercial-service companies, has seen several changes in recent years. The Terminix pest control division is seeing lower demand for termite services but is broadening its reach to include wildlife removal, mosquito control and crawl space inspections. Merry Maids, which is being converted to franchises from branches, saw an expected sales dip in the most recent quarter, while the American Home Shield home warranty business got a boost with last year’s acquisition of Home Security of America Inc. Former subsidiary TruGreen, which spun off in 2013, continues to share office space with ServiceMaster but plans to move by the end of 2015. – Bill Dries
Verso Paper Corp.
Verso Paper Corp., a pulp maker and producer of printing and specialty papers, began the calendar year by completing its acquisition of competitor NewPage Holding Inc. and saw a $507 million, or 170 percent, net sales increase for first quarter 2015 compared to a year ago that it attributed to the NewPage deal. Also at the top of the calendar year, Verso followed through on the $60 million sale of a Bucksport, Maine, paper mill to scrap metal recycler American Iron and Metal. NewPage and Bucksport have both showed up in Verso’s financials as one-time charges the company has taken for the transition costs. – Bill Dries
Wright Medical Group Inc.
Wright Medical Group is a specialty orthopedics company that offers products used in foot and ankle repair, as well as upper extremity and biologics products. In the first quarter, the company’s earnings were something of a mixed bag. Wright reported a first-quarter net loss of $49.7 million compared with a net loss of $30.4 million in first quarter 2014. Net sales for the quarter ended March 31 totaled $77.9 million, 10 percent higher than the same time a year ago. Wright is waiting on word from the Federal Trade Commission on the company’s proposed merger with Netherlands-based Tornier N.V., which Wright announced in October. – Andy Meek