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Public enterprise in 1992.

Stock Splits, Board Room Splits, Lawsuits, Settlements, Buyouts and Sell-Offs Abound

ARKANSAS PUBLIC COMpanies continued to draw favorable nods from the investment community as the state's lineup outperformed the Dow Jones industrial average.

An index of 25 Arkansas public companies grew 32 percent during 1991 compared to 17 percent for the Dow.

The gap was even wider through Dec. 2. The Arkansas index was up 25 percent while the Dow average increased more than 6.5 percent.

Meanwhile in the corporate board room ...

Longtime Rep. John Paul Hammerschmidt, R-Ark., quickly began assimilating into private sector life in the months following his announced exodus from Congress.

The Harrison millionaire was named to the board of directors for Southwestern Energy Co. of Fayetteville and Dillard Department Stores Inc. of Little Rock.

Advanced Environmental Recycling Technologies Inc. moved its headquarters from Rogers to Springdale. The short move south symbolized the company's fortunes for the year as well.

AERT's prospects were buoyed early in the year with news of a multimillion-dollar contract with Ford Motor Co. on top of deals to recycle materials for Dow Chemical Co. USA, Rubbermaid Inc. and Mobil Oil Corp.

That changed after Mobil sued AERT to challenge the boundaries of its patented reclamation process for plastic waste.

The legal battle ensued after Mobil bought Rivenite Corp., a bankrupt Florida firm that recycles plastic waste for use in producing wood substitute.

Back in January, analyst Joe Granville touted Arkla Inc. of Little Rock as a major recovery candidate for 1992.

The company attracted attention as it kept struggling to return to equilibrium by selling off more assets to reduce debt and improve its corporate balance sheet.

Seagull Energy of Houston bought Arkla Exploration Co. for $402 million. E.F. Johnson Co., a manufacturer of two-way mobile radios and electronic components, went for $40 million.

The expected sale of Louisiana Intrastate Gas Co., a 1,900-mile natural gas transmission pipeline, should bring in millions more.

Cutting the dividend by 20 cents was another move to lower corporate debt.

Arkla filed a $22.9 million rate increase for residential customers that was dropped to $17.4 million and finally $13.5 million on the state Public Service Commission battlefield.

On the executive front, Thomas "Mack" McLarty shed the title of president as Dan Dienstbier was brought aboard as president and chief operating officer. T. Milton Honea moved from executive vice president to vice chairman and finally to chairman and CEO after McLarty resigned to become White House chief of staff for boyhood friend and President-elect Bill Clinton.

Historically, seven of the warmest winters in the last 100 years have occurred in the past 10 years. A return to normal weather patterns is the best medicine for curing Arkla's quarterly ills.

The trio of companies that once made up Arkansas Best Corp. of Fort Smith all returned to the public arena with their first quarterly returns during 1992.

Arkansas Best Corp. jettisoned USA Truck Inc. and Treadco Inc. to focus on its core business as a less-than-truckload carrier and reverted to a private company in 1988.

This year, Arkansas Best converted to a public company again after buying back 4.44 million shares of its stock from Kelso & Co., the investment banking firm that assisted its leveraged buyout.

After the public move, Arkansas Best reduced its long-term debt from $210.9 million in 1991 to $80 million during the second quarter this year, which resulted in an $11.6 million loss for the quarter.

Treadco went public in November 1991 with a 15.7 million share offering and finished its first year as a public company during 1992 with a net income of $2 million.

USA Truck Inc., Arkansas Best's former truckload carrier subsidiary, went public in March and has experienced double-digit profit growth for its first two quarters.

In April, Environmental Systems Co. of Little Rock became a privately held company after Brambles U.S.A. Inc. finally consummated a $227 million tender offer for the 80 percent chunk of the company it didn't own.

The deal went through despite a last-ditch effort by six shareholders to stop the sale.

The fiery courtship ended with Brambles dumping the board of directors, but granting golden parachutes to outgoing executives and directors.

Many Ensco officers and staffers were retained. However, John Corcia resigned as COO and EVP to take a top position with the competing firm of Concord Resources Group Inc. in Pittsburgh.

Coming Out Party

Little Rock-based Fairfield Communities finally emerged from bankruptcy court on Aug. 14 after a lengthy battle with creditors over reorganizing $390 million of debt.

The tug of war between secured and unsecured creditors forced numerous revisions before an acceptable reorganization plan was put together.

Fairfield, a developer and manager of resort and retirement communities across the country, also owns First Federal Savings and Loan Association of Charlotte, N.C.

The company filed its Chapter 11 petition back in October 1990.

Arkansas Freightways Inc. of Harrison kept making hay in the wake of the liquidation of a nearby private-sector competitor -- the venerable Jones Truck Lines Inc. in Springdale.

The less-than-truckload carrier announced a $45 million capital investment program for new terminals in Illinois, Iowa, Mississippi, Tennessee and Texas. The Iowa operation will mark its first facility in that state.

Baldor Electric Co. of Fort Smith reported record earnings of $2.54 million for the second quarter of 1992 and a 3-for-2 stock split.

R.L. Qualls, president and COO, was elected to the CEO post effective Jan. 1, 1993. The outgoing CEO, R.S. Boreham Jr., will remain as chairman.

P.A.M. Transportation Services Inc. of Springdale reported its first profitable quarter in three years in 1992.

TCBY Enterprises of Little Rock brought on two new executives: Charles Cocatas as president and CEO of TCBY Systems Inc., in charge of franchise development and relations, and Thomas Tipps, president and CEO of Americana Foods, the company's manufacturing subsidiary.

Amid the meltdown of franchise operations, TCBY bought 33 franchise outlets from Royalty Yogurt of Fort Lauderdale, Fla., which acquired the stores in the bankruptcy of Mid-Florida Yogurt.

The company still is trying to get a firm handle on its bottom line after fighting through a 50 percent drop in earnings during fiscal year 1991.

Persistent legal battles aren't helping things, but TCBY did manage to reach a $2.8 million settlement in a long-running shareholder lawsuit.

Splits and Growths

The Little Rock operations of Alltel Corp. and its Systematics Information Services Inc. subsidiary are projected to bring more than 500 new jobs to town.

The multimillion dollar expansions at both company's headquarters reflect the fiscal course for Alltel's varied holdings.

Both Acxiom Corp. of Conway and Cannon Express Inc. of Springdale announced 2-for-1 stock splits to make their stocks more attractive to smaller investors and increase their stock pool.

Acxiom Corp. is on line to have its most profitable year ever and top the $100 million sales mark. Quite a turn-around from the restructuring of a year ago.

Cannon Express carried profits of $2 million for the fiscal year ending June 30, 1992, and announced a fleet expansion of 200 trucks.

Murphy Oil Co. of El Dorado announced a $340 million capital spending program, up 52 percent from last year. Two execs moved up the Murphy corporate ladder: R. Madison Murphy was promoted to EVP and CFO while Claiborne Deming was named EVP and COO.

J.B. Hunt Transport Services Inc. of Lowell cut another major intermodal deal. This one involves Union Pacific Railroad Co. and will give the company another entry into Mexico.

J.B. Hunt announced its third stock offering since 1983. The three million shares will raise about $60 million for intermodal operations.

Professional Dental Technologies, a Batesville-based penny stock company, began trading on the American Stock Exchange in March as part of a special feature for 22 tiny, growth stocks.

Improved operations and debt reduction added up to a 125.4 percent increase in net income for Beverly Enterprises of Fort Smith.

The company reached a $9.97 million securities fraud settlement in a long-running class action lawsuit and announced its intention to sell or close 33 low-performing nursing homes.

Beverly owns 402 nursing homes, leases 424 and manages 15, and owns 44 retirement living centers, 23 pharmacies and six home health centers.

The largest manufacturing employer in Arkansas completed two seafood acquisitions in 1992: the $240 million purchase of Arctic Alaska Fisheries and $21 million buyout of Louis Kemp Seafood Co.

Tyson Foods Inc. of Springdale also enlarged its joint-venture partnership with Trasgo Co. in Durango, Mexico, with an option to expand to majority position within two years.

Demand for Tyson Foods product was so great that the company had to buy processed chicken from a competitor to meet demand.

In contrast, Hudson Foods Inc. of Rogers reported a year-to-year earnings drop from $8.5 million to $2.2 million.

To staunch this almost 75 percent decline, Hudson moved to broaden its product base and reduce its reliance on fresh poultry as the prime source of income.
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Title Annotation:The Year 1992 in Review; public company developments in Arkansas
Author:Waldon, George
Publication:Arkansas Business
Date:Dec 28, 1992
Words:1512
Previous Article:Signs of success: surveys show consumers see Clinton's election as proof of economic recovery.
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