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Coffee Talk
+ Construction company
continues to cut costs
Kesselring Holding Corp., one of the few Sarasota-based, publicly traded construction firms, continues to lose money - including $1.6 million in the first quarter of 2008.
But Charles Rockwood, the company's chief operating officer and chief financial officer, isn't panicking. Rockwood, hired for the dual role in February, says the losses reflect the importance of the cost cutting and restructuring the company is going through. "We are very optimistic that over a period of 12 months we will be where need to be," Rockwood tells Coffee Talk.
According to Rockwood that includes growing the restoration side of the business as it exits traditional homebuilding construction.
The company says restoration, which includes painting and outside work to apartment and condo buildings, is more profitable than pure construction. The slumping market has also pushed the company in that direction.
The $1.6 million first quarter loss, which the company announced May 16, equated to 4 cents a share. It reported revenues of $2.4 million in the quarter.
Kesselring, which trades over the counter under the symbol KSSH.OB, posted a $3.1 million loss on $12.2 million in revenues in 2007. Those figures, in addition to a management power struggle, led the company to fire its chief executive and embark on its cost-cutting mission.
Rockwood says the cost-cutting numbers leave more room for optimism than the loss figures. For example, the company's overall monthly expenses were $60,000 a month in the first quarter, after being as high as $225,000 a month last year.
The company also made some more management changes during the quarter, which Rockwood says will be a boost for the company when it gets past its restructuring phase.
Says Rockwood: "We are positioning ourselves to be much more smaller and much more nimble."
+ Broken home then,
executive homecoming now
Jayme Harris grew up in a broken, dysfunctional home in Plant City. She finished high school, enlisted in the Air Force and the rest is history.
Using her contacts and experiences in the military, when Harris left the service, she formed two businesses in Dubai, UAE: Unity Logistics and Security Services, a construction and transportation defense contracting company; and Elite International Investments, a real estate investment firm.
She runs them as its general manager and managing partner. Both do work for the military in Iraq. The companies compiled $1 million in revenue in 2006, $11 million in 2007 and Harris expects $30 million to $50 million in revenue this year.
"It was a rough upbringing, in a single-parent family," Harris told Coffee Talk. "The Air Force was a perfect opportunity for me, a stepping stone. It led to bigger and better things."
Harris, 36, single and a Dubai resident, wrote a book about her experience, "Dare, Dream, Discovery," and is coming to the United States next month, including New York, California, Chicago and Florida, to talk about it. She'll be in Tampa and Plant City June 14-16.
Unity does a lot of prefab office containers, shower and toilet units and gravel deliveries in Iraq. It also sets up security and monitoring equipment. Harris started the company after working for KBR, a subsidiary of Halliburton.
"In Iraq we went in, taking a bite of the elephant," Harris says. "We stepped into it. It was an opportunity for me.
Unity has 50 full-time employees as well as 300 contract drivers and 200 temporary workers.
The company is negotiating a couple of contracts in Afghanistan, although it is difficult finding trusted suppliers.
Harris believes General David Petraeus' vision in Iraq, building the prison camps and a judicial system and stabilizing the country by creating jobs, is working. "We see progress," Harris says.
+ Say what?
Toll gives Naples an "A"
Robert Toll, the chairman and chief executive officer of the luxury homebuilding company that bears his name, is well known for dishing out grades for various areas where he builds luxury homes.
Lately, Toll has given Southwest Florida nothing but a failing grade in new-home sales.
But on a recent Toll Bros. earnings call, the CEO singled out Naples as one of the state's lone bright spots, driving real estate agents down here positively giddy.
Here are Toll's grades for Florida and the Gulf Coast, according to a transcript of the call posted on SeekingAlpha.com: "Florida Central: F-plus; Florida East: F-minus; Florida North: F. So you have to understand the F soup in order to judge how we're doing. Florida, Tampa, is an F minus-minus. Florida West Coast, the Naples area: A-minus, which was a shock for us and a lovely one."
In an answer to an analyst's request to elaborate, Toll said of Naples: "It's just one market, it's not a huge market. But it gave us some happy times especially considering that Naples was one of the worst markets that we had," Toll said. "A year ago you couldn't give a house away in Naples, it seemed. And so we practically did give some homes away I guess in order to get rid of our specs."
In Collier County, Toll builds (and no longer gives away) homes in the Aviano, Firano and Quail Creek communities.
+ Fundraiser prospers
despite gloomy economy
The weak economic climate on the Gulf Coast, no surprise, has led to a slowdown in donations for all sorts of charities and nonprofit organizations.
Still, one of Manatee County's most prominent charity events reported a better 2008. The 12th annual Phil Galvano Golf Classic, named for the longtime Bradenton resident and nationally known golf insructor and author, raised about $110,000, a 15% growth over the $95,000 it raised last year. The money goes toward funding for the Manatee Education Foundation, which pays for grants, honors programs and teacher recognition initiatives not covered by school taxes.
As he has done the past 11 years, Phil Galvano's son, State Rep. Bill Galvano, R-Bradenton, helped organize the golf tournament, which was held May 16 with a dinner that preceded it the previous night. The younger Galvano coaxed Lt. Gov. Jeff Kottkamp into attending the dinner, and the second-in-command was impressed with the turnout, both in people and in dollars.
"If every community in the state did this," Kottkamp said, "I can't tell you what a boost it would be for education."
+ Economic scorecard
drops Tampa to last
The impact of the soft housing market pulled down the 2008 numbers on the Tampa Bay area's economic scorecard compiled by the Tampa Bay Partnership.
Since the first quarter of 2007, the Bay area has lost 27,000 jobs, much of that connected to the housing market. That suppressed income and dropped the Tampa Bay area to last place out of the six markets ranked in the scorecard. The other markets are Jacksonville, Charlotte, Atlanta, Dallas and Raleigh.
The scorecard measures employment, income and productivity, housing, innovation and education.
+ Madden dishes out
sizzle and steak
The next time you're in Denver, give John Madden a call. He might treat you to a nice steak dinner.
That's what happened to a group of young Lee County executives who were in Denver for a leadership conference. The group of 33 executives toured the developer's signature Greenwood Plaza project, a hugely successful project that pioneered a new area of development in Denver.
Madden (no relation to the football announcer), is a resident of Captiva island and is developing the Madden Research Loop near Southwest Florida International Airport in Fort Myers.
The first phase includes 275,000 square feet of offices for medical and research companies.
When Madden found out the group from the Gulf Coast had no dinner plans, he invited them all to a steak dinner at the swanky Del Frisco's Double Eagle Steak House in Denver. Diners who glimpsed at the check said the tab came close to $5,000.
+ Gulf Coast legislators
receive recognition
The Associated Industries of Florida's annual list of pro-business legislators includes a trio from the Gulf Coast: State Sens. Mike Bennett, R-Bradenton, and Mike Fasano, R-New Port Richey and State Rep. Peter Nehr, R-Tarpon Springs.
This is the fifth annual Champions for Business list announced by the AIF, one of the most powerful pro-business groups in the state. The lobbying group says the legislators it selects not only vote for pro-business bills, they also take risks "for their belief in the free enterprise system."
Two other Gulf Coast legislators were recognized by AIF: Rep. Paige Kreegel, R-Punta Gorda, was named Legislator of the Year by the AIF Florida Energy Council and Rep. Kevin Ambler, R-Tampa, was named Legislator of the Year by the AIF Florida Maritime Council.
+ Junk wars wage
in Tampa Bay
Coffee Talk introduced you in March to a junk hauling company that relocated from Washington to Tampa, run by a couple of young college graduates, called College Hunks Hauling Junk.
College Hunks is about to get some more competition.
Just Junk, a Toronto company, has set up an international franchising office in Tampa and is selling franchises. It plans to go national.
Just Junk is looking at selling territories in Orlando, Jacksonville, Tampa, Sarasota, Fort Myers, Naples and South Florida.
The company will set up a training center and a call center in Tampa, says Rick Dixon, international director of franchise development for Just Junk in Tampa.
The company already has 10 franchisees in Canada. It has also gotten interest from investors in Boston, Portland, Texas and other markets. Franchises are $16,000 for 100,000 people, then $8,000 for each additional 100,000.
Why the interest in junk hauling? Changing demographics and lifestyles. There are residential customers whose kids are grown, so they are downsizing, getting ready to clean out and move. There are Baby Boomers in charge of their parents' homes, which they have to clean out and sell.
On the commercial side, businesses that are moving often need to clean up and go quickly, so they need junk haulers, Dixon says.
Just Junk's rates vary by weight, but generally half a truck costs $250 and a full truck $400. It hopes its differentiator will be superior service, clean-cut drivers and employees who arrive on time, with shirts tucked in, no gum, no cigarettes and treat customers with respect.
Chico's Edmonds
takes promised pay cut
True to his word, Chico's FAS President, Chief Executive Officer and Chairman Scott Edmonds took a pay cut as the women's retailer faced economic headwinds last year.
According to a recent proxy filing, the 50-year-old Edmonds' total compensation in 2007 was $3.77 million, a 24% pay cut from his total pay in the previous year. Chico's stock price fell 57% in 2007 as the retailer faced a tougher economy and reported some fashion missteps.
Edmonds' compensation included a $1.1 million base salary, stock awards valued at $965,730 and option awards valued at $1.7 million. He received no bonus in 2007. Earlier this year, Edmonds told the Review he did not expect an increase in compensation this year.
GULF COAST UNEMPLOYMENT
What the data shows: The unemployment rate increased substantially in all areas of the Gulf Coast and every region from Tampa to Naples registered a higher unemployment rate than the state as a whole.
What it means: The decline in the construction industry continued to add to the unemployment rate despite a fairly robust tourism season. In addition, softness in retail sales could not help overcome job losses in the real estate sector.
Forecast: Observers are concerned that the unemployment rate could rise above 7% in some areas of the Gulf Coast this summer as seasonal hiring trends slow, particularly in tourism and retail. For companies that are growing, however, higher unemployment rates mean they'll have more people to choose from when they need to hire new employees. The rise in the jobless ranks may also keep salary increases in check for the first time in years.
APRIL UNEMPLOYMENT RATES
Area April 2007 April 2008 Pt change
Sarasota-Bradenton 3.5% 5.3% 1.8
Fort Myers-Cape Coral 3.7% 6.4% 2.7
Naples-Marco 3.1% 4.9% 1.8
Punta Gorda 4.3% 6.8% 2.5
Tampa Bay 3.6% 4.9% 1.3
Florida 3.5% 4.7% 1.2
U.S. 4.3% 4.8% 0.5
Source: Florida Agency for Workforce Innovation
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