FNF continues tinkering with its businesses
Fidelity National Financial Inc. just can't seem to sit still.
The Jacksonville-based company last week reported a big increase in fourth-quarter earnings due to the strength of its main business, title insurance.
But let's face it. Title insurance, while profitable, is really kind of dull. What makes FNF interesting is its non-title businesses.
During its conference call with analysts to discuss the fourth-quarter results, officials of FNF indicated they are continuing to tinker with the company's other businesses.
FNF owns 55 percent of a restaurant company that, after a series of acquisitions, operates seven restaurant chains.
FNF Chief Executive George Scanlon said in the conference call that the company made a "strategic decision" to now split up the restaurant business into two separate companies.
One will be a "casual and family dining company" consisting of the O'Charley's, Ninety Nine Restaurant, Max & Erma's, Village Inn and Bakers Square chains.
The other will be an "upscale dining company" consisting of the J. Alexander's and Stoney River Legendary Steaks chains.
"We believe our restaurant operations can be optimally managed through a distinct upscale dining-focused company and a separate casual and family dining-focused company, allowing each to be better positioned to take advantage of opportunities in their different market segments. Additionally, we continue to expect to augment organic growth with potential future acquisitions," Scanlon said.
Later in the call, in response to an analyst's question about the long-term plan for the restaurant businesses, Scanlon said the company may consider an initial public offering later this year.
"At this point, the focus is really on getting the O'Charley's business, which represents about 40 percent of the total revenue, up to a better margin performance." Scanlon said.
"With regard to any IPO, I think maybe toward the end of the year, if we see the trends come along favorably, we might have the flexibility to do that and, of course, there can always be an opportunity for a transaction with another company to possibly do that. But those are opportunistic and I'd say the focus right now is on the blocking and tackling," he said.
You may recall last year, FNF took another non-title business public, auto-parts company Remy International Inc. FNF still owns 51 percent of Remy while that company trades separately on Nasdaq.
"Remy continues to perform well against the challenging global macroeconomic backdrop, but remains focused on improving productivity during the difficult economic environment," Scanlon said.
Of course, this kind of activity is nothing new for FNF. The company spun off its bank technology business into a separate company called Fidelity National Information Services Inc., or FIS, in 2006.
Two years after that, FIS spun off its mortgage loan processing business into a separate company called Lender Processing Services Inc.
You can never count on FNF to look the same from year to year.
Since FNF owns a majority stake in Remy and the restaurant business, results from those segments are consolidated into the company's overall results.
So in addition to the title insurance segment's fourth-quarter revenue of $1.59 billion, the company's final results included $357 million in revenue from the restaurant business and $275 million from Remy.
Revenue from the title business rose by 17 percent for all of 2012 but with the additions of the other two segments, FNF's total revenue for the year jumped from $4.8 billion in 2011 to $7.2 billion.
The title insurance division did help FNF increase profitability last year. Pre-tax title profits increased by 71 percent in the fourth quarter.
"Our employees have worked hard to position the company for this level of success in what remains an improving, but sluggish market," Scanlon said.
With the strong title business, FNF's earnings from continuing operations rose by 26 cents in the fourth quarter to 66 cents a share, 7 cents higher than the average forecast of analysts, according to Thomson Financial.
ParkerVision stock jumps on court ruling
ParkerVision Inc., which hasn't been selling any products recently, has put a lot of emphasis on a patent infringement lawsuit against Qualcomm Inc. Sometimes, it seems like ParkerVision may be putting too much emphasis on the lawsuit as part of its overall business strategy.
However, last week we learned that Wall Street also has a keen eye on the lawsuit.
Jacksonville-based ParkerVision's stock rose to its highest level in more than three years on huge trading volume Thursday after the company announced a favorable ruling in the case, which is scheduled to go to trial in the fall.
ParkerVision's suit filed in 2011 alleges that Qualcomm has been illegally selling products using wireless radio technology patented by ParkerVision. It's impossible to say what the final result will be but the one analyst who follows ParkerVision, Jon Hickman of Landenburg Thalmann, says ParkerVision could see a potential $1 billion windfall if it is successful.
While the proceedings still are a long way from concluding, the company said Thursday in a news release that the U.S. District Court for the Middle District of Florida "adopted ParkerVision's position as to the proper interpretation of most of the key terms in dispute in the litigation."
CEO Jeff Parker said in the release that the ruling "is another significant step towards the successful resolution of this litigation."
ParkerVision's stock rose $1.78 to $4.21 Thursday, its highest level since September 2009. More than 11 million ParkerVision shares were traded Thursday. On a normal trading day, you would see volume of a couple hundred thousand shares.
McKesson completes PSS buyout
After PSS World Medical Inc. shareholders approved the deal at a special meeting Tuesday, McKesson Corp. on Friday announced that it completed its $2.1 billion acquisition of the Jacksonville-based medical supply distributor.
PSS Chief Executive Gary Corless said after Tuesday's meeting that the two companies had not made decisions on how the merger would affect PSS' operations.
Corless said he was looking forward to meeting with officials of San Francisco-based McKesson once the deal was complete.
PSS employed about 780 people in Jacksonville and 4,000 across the country when the merger agreement was announced in October.
Jacksonville Bancorp shareholders approve investment plan
Shareholders of Jacksonville Bancorp Inc. last week approved a capital infusion plan that raised $50 million in new equity for the parent company of The Jacksonville Bank.
A group of investors including the company's largest shareholder, CapGen Capital Group IV LP, bought $50 million in preferred stock at the end of 2012, with the intention of converting the preferred shares into common stock.
The company needed shareholder approval for several measures that allowed the conversion to take place and held a special stockholders' meeting to vote on it.
Jacksonville Bancorp said in a Securities and Exchange Commission filing that the measures were approved, so the preferred shares were converted.
After the conversion, CapGen said in an SEC filing that it now owns 49.8 percent of Jacksonville Bancorp's stock, up from 45.6 percent before the capital infusion.
Stockholders also approved a plan that would allow the company to institute a reverse stock split if necessary to increase the trading price of the stock.
Jacksonville Bancorp had been in danger of losing its Nasdaq listing because its stock price fell below $1 last year, but the stock price moved above $1 in early January.
Bausch & Lomb reportedly seeking IPO
It looks like Johnson & Johnson won't be adding Bausch & Lomb Inc.'s business to its Jacksonville-based contact lens subsidiary, Vistakon.
Bausch & Lomb's owner, Warburg Pincus LLC, began exploring a sale of the vision products company late last year and Johnson & Johnson was rumored to be one of the bidders.
However, Bloomberg News reported last week that Warburg was disappointed in the bids it received for Bausch & Lomb, so it is instead working on an initial public offering for the company.
Vistakon is the dominant company in the contact lens business with an estimated 40 percent share of the worldwide market. Bausch & Lomb, which produces other vision care products, has about 10 percent of the contact lens market.
Flowers Foods names new CEO
Flowers Foods Inc. will find out this week if its bid to buy 20 bread bakeries from Hostess Brands Inc. will be allowed, when an auction for the Hostess assets is held in U.S. Bankruptcy Court.
While it looks to significantly expand its business, Flowers announced a new CEO.
Allen Shiver, a 33-year company veteran who currently is president, will become chief executive officer at Flowers' annual meeting May 22.
Shiver will succeed George Deese, who will become executive chairman. Deese has been with Flowers for 48 years and has been CEO since 2004.
The 20 Hostess bakeries include one in Jacksonville. Thomasville, Ga.-based Flowers already owns a bread-making facility in Jacksonville and has not said what it would do with a second local bakery.
Medtronic reports disappointing sales
Medtronic Inc. last week reported adjusted earnings of 93 cents a share for the third quarter ended Jan. 25, 9 cents higher than last year and 2 cents higher than the average analysts' forecast, according to Thomson.
However, its revenue of $4.027 billion was slightly below the average analysts' forecast of $4.034 billion. The Minneapolis-based medical device-maker's stock fell $1.04 to $44.76 Tuesday after the report.
Medtronic's surgical technologies division, which is headquartered in Jacksonville, increased revenue by 10 percent to $350 million in the quarter.
Vulcan ekes out profit
Vulcan Materials Co. reported a small fourth-quarter profit from continuing operations of 3 cents a share, but that was a reversal from a loss of 20 cents in the fourth quarter of 2011.
The Alabama-based construction materials company, which acquired Jacksonville-based Florida Rock Industries Inc. in 2007, said conditions seem to be improving in its markets.
"Leading indicators of private construction activity, specifically residential housing starts and contract awards for nonresidential buildings, continue to improve. Consequently, aggregates demand in private construction is growing," CEO
Don James said in a news release.
"We are seeing tangible evidence of this growth in several key states, including Florida, Texas, California, Georgia and Arizona. Growth in residential construction has historically been a leading indicator of other construction end uses," he said.
PHH earnings down
PHH Corp. reported fourth-quarter core earnings of 81 cents a share, down from 98 cents in the fourth quarter of 2011.
PHH is one of the largest mortgage banking firms in the U.S., operating out of its headquarters in New Jersey and a second service center in Jacksonville. It also has a fleet management services business.
The company's mortgage production business increased operating profits by 15 percent in the fourth quarter and its fleet management business also increased earnings. However, PHH's mortgage servicing segment produced a loss of $35 million in the fourth quarter.
The mortgage servicing business was affected by a $56 million net decrease in the book value of its mortgage servicing rights and by $37 million in repurchase and foreclosure-related charges.
Convergys improves earnings
Convergys Corp. reported fourth-quarter adjusted earnings from continuing operations of 25 cents a share, up from 21 cents the previous year.
Convergys said this was the seventh straight quarter of revenue and profit growth.
The company also projected adjusted 2013 earnings of more than $1 a share, up from 91 cents in 2012.
Cincinnati-based Convergys, which employs more than 1,000 people in Jacksonville, provides outsourced customer service functions for businesses.