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Coffee Talk
+ ASG on the
acquisition path
Is Naples-based ASG Software Solutions on the verge of another blockbuster software-company acquisition?
In June 2007, ASG made its biggest acquisition, the $211-million purchase of competitor Mobius Management Group. This gives ASG another leg up in the business of managing huge troves of data for companies such as Merrill Lynch and Toyota.
Now comes word of another acquisition from the blog of Jason Stamper, a writer for the British-based Computer Business Review. Arthur Allen, the firm's founder, president and chief executive officer, recently told Stamper that ASG is in negotiations to acquire an undisclosed company with sales of $250 million to $275 million.
An acquisition of that size would propel ASG on its way to its stated goal of $1 billion in revenues. Allen told Stamper he couldn't disclose the name of the company he's negotiating with because it's a publicly traded firm and listed on the Nasdaq market.
+ Tom James shares
a few pearls
It was akin to an E.F. Hutton moment.
When Tom James, longtime guiding light of St. Petersburg-based Raymond James Financial Inc., received a Lifetime Achievement Award at the 2008 Ernst & Young Florida Entrepreneur of the Year Award banquet June 5 in Orlando, all 480 attendees hushed to hear what they hoped would be valuable pearls of wisdom from one of Florida's most successful entrepreneurs.
In his 40-year career in the firm his father founded, James has steered Raymond James from $2 million a year in revenues (and early moments when the future looked almost hopeless) to more than $3 billion in revenues and $250 million in net income in 2007.
"I'd like to salute all of you for taking the risk and having the courage, for setting the values," James told his listeners. "Those values have to transcend just making money." Integrity, hard work and appreciating clients are essential ingredients.
"The yin is taking the risk," James said. "The yang is knowing how to control the risk ... and having the strength to recognize when you need professional management."
James recalled the moment in his company's growth, when he was serving as chief executive officer and still involved in the trenches of trading and deal-making. One of his Harvard classmates told him: It's time to give up investment banking.
As cliche as it may sound, James also told his listeners: "It's all about the people, selecting the right people."
Entrepreneurism is one thing, James suggested. But he urged the room's entrepreneurs to "create an organization that celebrates entrepreneurship and professional management. I implore you to have the professional management that enables you to achieve lifetime success."
+ Sunny days are here
to stay in Sarasota
The business axiom of thinking and selling global is in full rotation at Sun Hydraulics, the publicly traded Sarasota-based cartridge valve manufacturing firm.
The company has been on a long winning streak lately, including the recent news it had made BusinessWeek's Hot Growth Companies list for the third straight year. What's more, Sun was first in the magazine's ranking of how the companies on the 2006 Hot Growth list have fared in terms of shareholder returns over the past two years. The stories are in the June 9 issue.
Sun President and Chief Executive Allen Carlson uses baseball metaphors in explaining the company's recent run of success, including that 121.4% two-year return cited by BusinessWeek that beat out all the other highflying companies. "If you hit a lot of home runs," Carlson tells Coffee Talk, "you strike out a lot."
Instead, adds Carlson, for Sun, the winning formula has been "a whole bunch of singles, good fielding and bunting."
That and the company's flat corporate structure, which eschews titles and promotes a team-first, results based culture. Carlson says the 38-year-old company has been doing it that way, a Lean-business principles approach, since it was founded in 1970. "We were lean long before it was cool to be lean," says Carlson.
But from a business perspective, Carlson, in addition to the editors at BusinessWeek, attributes Sun's success to its global sales efforts. About 55% of the company's $167 million in 2007 sales were from countries other than the U.S.
Going global, in countries from Korea to Germany, has long been a key strategy for Sun and the weak American dollar has only helped its cause overseas. Its niche in the valve market for growing industries such as cranes and oil-well drills has been a plus as well, BusinessWeek writes.
Investors have responded well to the recent rush of good news. Shares of the company closed recently at $38.16, a few dollars off its 52-week high of $41.49, after spending most of April and May hovering in the late $20s and low $30s.
+ And the not so sunny
news awards go to...
While Sun Hydraulics basks in the glow of its Business Week Hot Growth companies rankings, two other Gulf Coast-based publicly traded companies are wilting from being included on a related list. Fort Myers based woman's retailer Chico's FAS and Lakewood Ranch-based human resources firm Gevity HR Inc. made the top 10 list of companies showing the worst two-year shareholder return of the ones that made BusinessWeek's 2006 Hot Growth list.
Chico's is sixth worst, with a -80.9% return, while Gevity's -72% return puts it ninth place on the bottom 10 list.
Chico's troubles are clearly economy- and industry-induced, as spending has been down in many retail sectors. Women's clothing competitor Coldwater Creek is tied for sixth place with Chico's on the BusinessWeek list. And the future promises more tough times for Chico's: Comparable stores decreased 16.9% in May, the company reported June 9, and total sales were down 8.8% year-over-year in the month, from $155 million in May 2007 to $141.4 million this year.
Meanwhile, Gevity is also a company mired in an industry slump, as its business focuses on human resources and worker's compensation services for small-and medium sized business - many of which are in the real estate and construction industries. But some of Gevity's problems have also been self-imposed, as the company has changed and altered strategies several times over the past two years, creating confusion with customers, employees and inventors.
What's more, bigger change could be on the way at Gevity: As of late last month, Greenwich, Conn.-based based private equity firm General Atlantic, which owns a human resources outsourcing company in San Francisco, became Gevity's second largest shareholder when it disclosed it was holding about 2.2 million shares of the company, or 9.5% of the stock. A Gevity spokesman declined to comment on Wall Street speculation that General Atlantic might look to merge its California business with Gevity.
+ Crashing through
transportation barriers
Florida Department of Transportation Secretary Stephanie Kopelousos recently visited Bonita Springs to discuss one crisis when she ran up on another.
Kopelousos is under fire from some in South Florida who are critical of her idea to lease Alligator Alley to a private firm. The tolled stretch of Interstate 75 links Lee and Collier counties on the Gulf Coast with Broward and Miami-Dade counties. Kopelousos told the gathering in Bonita Springs that the state would not enter into any deal that's not beneficial to the state. Alligator Alley won't be relinquished, there will be a limit on toll rates and excess revenues will be shared, she says.
But Kopelousos also took some good-natured ribbing from Stan Cann, the secretary of District One that stretches from Sarasota to Collier counties. He reported Kopelousos "crashed through the barriers" erected near the Ellenton overpass that was the scene of a fiery tanker truck crash. Florida Highway Patrol troopers say she lacked safety lights required to cross the barriers, but they allowed her into the area after finding out who she was. The interstate was shut down and no one expected Kopelousos to appear unannounced.
+ Region's women still strong
on Barron's rankings
A pair of Gulf Coast financial planners have made the cut on Barron's Top 100 Women Financial Advisors list - one for the third straight year, while the other finished third place for the second time in a row.
Ami Forte, with the Palm Harbor office of Morgan Stanley, took the third spot in the rankings, which are based on factors including revenue generated for the firm, total assets under management and recommendations from supervisors and peers. With a total score of 98.91, Forte finished slightly behind Saly Glassman of Merrill Lynch and Rebecca Rothstein of Smith Barney.
Glassman and Rothstein are even more significant to Forte, as they are the reason she has focused so diligently on the rankings and on reaching $1 billion in assets under management. Forte met and chatted with Glassman and Rothstein at a financial planner's conference in Palm Beach in 2006, where they encouraged her to drastically raise her goals.
Forte has done that. She debuted on Barron's list at number three in 2007, also behind Glassman and Rothstein, from suburban Philadelphia and Beverly Hills, respectively. And last year she passed the billion-dollar assets threshold, with a portfolio made up of small businesses and individuals with net worth's from $1 million to $10 million-plus.
Lisa Keverian-Press of the Sarasota office of Baird, a Milwaukee-based money management and investment firm, is also on the list, which was published in the June 9 Barron's. Keverian-Press was ranked 99th this year, with a score of 85.78; she finished 84th in 2006 and 100th in 2007.
Keverian-Press has been with Baird since 1999. In 2000, she was the first woman in the firm to make the Chairman's Club and in 2004 she was named a managing director.
Three Gulf-Coast-based financial advisors made Barron's ranking's last year, when Forte and Keverian-Press were joined by Kim Ciccarelli Kantor, with Naples-based Ciccarelli Advisory Services, a family-run firm. Kantor didn't make the list this year.
Happy days if you
manufacture and export
We all keep looking and hoping for a positive consensus from the economic prognosticators. Who needs yet another economist telling us what we already know?
Mark Vitner, Wachovia Corp. senior economist, tried last week to offer some optimism to Florida's newspaper editors and publishers at the Florida Press Association's annual gathering in Orlando. About the best he could do:
The results from the second quarter should show an improvement over the first quarter of this year, and we'll see still more improvement (albeit not much) in the third quarter of 2008. "The fourth quarter will be weak," Vitner said.
Here's another positive: If you're a manufacturer who exports overseas, things hardly could be better - Sarasota-based Sun Hydraulics would attest to that. The low value of the dollar has fueled U.S. exports.
In fact, Vitner told the editors and publishers, the primary reason the U.S. economy isn't technically in recession is because of exports. In spite of growing unemployment, soft domestic retail trade and depressed home-building and banking sectors, the U.S. economy continues to expand.
Huh?
Explains Vitner: The real estate crash and rising commodity inflation has caused U.S. consumers to pull back on durable-goods purchases. Which means U.S. consumers are not buying all those durable goods manufactured overseas. Therefore imports are falling.
But exports of U.S. manufactured goods are rising. For instance, Vitner says, while U.S. exports fell $3 billion in March, imports fell by $6 billion - thus, netting out as a gain in U.S. gross domestic product.
"The parts of the economy that are strong are very strong," Vitner said. "Manufacturing is stronger than the weakest parts of the economy are weak - if that makes sense. So technically we're not in a recession."
There you go. It's kind of good economic news.
VITNER FACTOIDS
Notes from Mark Vitner's presentation to Florida newspaper publishers and editors:
• "If you sell a domestic product in the United States, this is the weakest economy since the fourth quarter of 1991."
• "The Euro is incredibly overvalued to the dollar. It should approach parity in 2011."
• "We're likely to see a lot of business turnover" (small businesses shutting down), because many small business owners borrowed on credit lines personally and through their businesses to buy speculative real estate properties. They can't afford the payments, and bank regulators won't let the banks renegotiate the loans.
• Florida's 2007 population growth was the lowest since 1973. Population growth in Charlotte, Raleigh and Nashville combined was higher in 2007 than in all of Florida.
• Strongest job market in the United States: Houston.
• Home prices will drop as much as 40% from their peak.
GULF COAST AUTO SALES
What the data show: Taxable sales of autos and accessories include the sale of new and used cars, repair shops, auto-supply stores and taxable sales at gasoline stations.
What it means: Auto and related sales are substantially lower in all areas of the Gulf Coast as consumers become more careful about spending on big-ticket items. Sarasota suffered the worst percentage decline in March compared with the same month a year ago, while Punta Gorda was the only area on the Gulf Coast that posted a smaller percentage drop than the state.
Forecast: High oil prices, rising unemployment and lower property values are pushing some people to delay auto purchases. In addition, businesses are likely retrenching on new-vehicle purchases until economic conditions improve. When those three factors begin to ebb, look for auto sales to rebound.
January Taxable Sales
($ in millions)
Area March taxable sales %annual chg.
Fort Myers $165.6 ‑19.5%
Naples $70.9 ‑19.3%
Punta Gorda $27.9 ‑15.7%
Sarasota $151.6 ‑20.8%
Tampa $626.4 ‑18.5%
Florida $4,331 ‑17.1%
Source: Florida Legislature Office of Economic & Demographic Research
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