The Birmingham, Ala.-based construction materials company named J. Thomas Hill as president and CEO, succeeding Don James.
Hill most recently was Vulcan’s executive vice president and chief operating officer but before that he was in Jacksonville, beginning in 2010 as president of the company’s Florida Rock division.
When Vulcan reorganized its operations into four regions at the end of 2011, Hill became senior vice president of the South region, which is headquartered in Jacksonville.
Hill, 55, was promoted to the COO position in December 2013 as part of a “succession planning process,” James said at the time.
James, 65, is remaining with Vulcan as executive chairman.
“Having successfully navigated the worst downturn in our industry’s history, now is the right time to put in place our new leadership team, led by Tom, to guide the company and expand our market leadership in the industry,” James said in a news release last week.
“Tom is a proven leader with vast operational and industry experience and superlative management skills. He is the right person at the right time to lead our company forward in its next phase of growth,” he said.
Vulcan reported a 7 percent increase in first-quarter revenue to $574.4 million, but it had an adjusted net loss from continuing operations of 28 cents per share.
Vulcan established its Jacksonville office in 2007 when it acquired Florida Rock Industries Inc. for $4.2 billion.
After the acquisition, Tom Baker, grandson of Florida Rock’s founder, became president of the Florida Rock division. When he left Vulcan in 2010 to become CEO of Patriot Transportation Holding Inc. – a company that was spun off from Florida Rock years earlier -- Hill was brought in to replace him as head of the Florida Rock division.
Hill, who was president of Vulcan’s Southwest division before coming to Jacksonville, has been with the company for more than 24 years.
ParkerVision optimistic about lawsuit
Most companies don’t bring their lawyers to make presentations at investor meetings but then, ParkerVision Inc. isn’t like most companies.
Jacksonville-based ParkerVision isn’t selling any of its wireless radio technology, so most of the investor attention has been on its ongoing legal squabbles, particularly its patent infringement lawsuit against Qualcomm Inc.
So ParkerVision brought their lawyers along last week to an analyst and investor presentation in New York. The invitation-only presentation was made available on the company’s website.
CEO Jeff Parker admitted that he was surprised last month when a federal judge overturned a jury’s $173 damage award in the Qualcomm lawsuit.
“Candidly, of all the results that we expected, the overturning of the jury verdict was not on our radar screen. But that’s what occurred,” Parker said.
ParkerVision’s lead attorney in the Qualcomm case, Doug Cawley of McKool Smith, said the judge’s decision to overturn the verdict was “unusual,” but “we have to deal with it and we have to proceed accordingly to appeal.”
Cawley is confident that ParkerVision’s appeal will ultimately succeed.
“While this grant of the JMOL (judgment as a matter of law) is very disappointing, I believe that sometime in the future when we finally know how this litigation is going to come out, this won’t be the turning point in the case,” Cawley said.
Cawley believes the “seminal” moment in the case will be when the U.S. Court of Appeals for the Federal Circuit rules on ParkerVision’s appeal, which he anticipates will happen about a year from now.
It’s possible that the appellate court could order a new trial, which could drag on the case for several more years, but Cawley doesn’t anticipate that result.
“I don’t happen to believe that’s likely, but it could happen,” he said.
Analysts concerned about CSX expenses
CSX Corp. improved its operating ratio in the second quarter, but analysts remain concerned about the Jacksonville-based railroad company’s operating expenses.
CSX’s operating ratio – operating expenses divided by revenue – dropped from 75.5 percent in the first quarter to 69.3 percent in the second quarter. However, the first-quarter spike in the ratio was due to weather-related disruptions, and analysts said there is still room for improvement.
“CSX is confident that better EPS growth and margin improvement should be more apparent ahead. However, cost and service issues are lingering, so cost headwinds seem likely to continue the next few quarters,” Wolfe Research analyst Scott Group said in a research note.
Stifel, Nicolaus & Co. analyst John Larkin said the problem is increased traffic on CSX’s rail network, which has created congestion.
“Congestion has been driven by a 20 percent year-over-year surge in traffic on the northern portions of the company’s network. The traffic ramped so rapidly that the company was unable to marshal sufficient incremental resources quickly enough to avoid a costly deterioration in operating metrics and service levels,” Larkin said in his research note.
“All in, the company estimates that expenses directly tied to network congestion and reduced fluidity, and unrelated to the volume surge, totaled $32 million for the quarter,” he said.
Because of the higher costs, Larkin reduced his earnings estimate for the full year by 5 cents a share to $1.85, and Group lowered his estimate by 3 cents to $1.86.
CSX did say last week that it is increasing its capital expenditure budget by $100 million this year to handle the increased traffic.
“With demand strengthening in most markets (excluding export coal), we view CSX’s decision to increase capex favorably as we believe it positions the company to handle higher volumes with greater efficiency over the long-term,” RBC Capital Markets analyst Walter Spracklin said in a research note.
Vistakon sales drop in second quarter
Johnson & Johnson last week reported that sales at its Jacksonville-based contact lens division, Vistakon, fell by 3.2 percent in the second quarter to $707 million.
The New Jersey-based medical products giant had anticipated a drop in sales in the vision care business after first-quarter sales benefited from an inventory buildup by its customers.
“Reversal of the noted customer inventory build from the first quarter and competitive pricing dynamics impacted growth for vision care,” said Louise Mehrotra, vice president of investor relations, in Johnson & Johnson’s conference call with analysts.
The sales decline was impacted by currency fluctuations but excluding the foreign exchange impact on international sales, Vistakon’s sales still fell by 2.7 percent on an operational basis, Johnson & Johnson said.
Overall, Johnson & Johnson reported adjusted second-quarter earnings increased by 12 percent to $1.66 a share, helped by sales of new drugs. That was 11 cents higher than the average forecast of analysts surveyed by Thomson Financial.
The company also increased its earnings forecast for the full year to $5.85 to $5.92 a share, compared with its previous forecast of $5.80 to $5.90.
decision by end of July
AmREIT Inc. last week said it expects its board of directors to complete its evaluation of a takeover offer from Jacksonville-based Regency Centers Corp. by the end of July.
After Houston-based AmREIT rebuffed attempts by Regency to negotiate a deal, Regency made an unsolicited offer to buy the company for $22 a share in cash and stock, a total of more than $400 million.
Investors have been expecting Regency, or perhaps a competitor, to come in with a higher offer, as AmREIT’s stock has been trading above $22 since Regency made the offer public on July 10. The stock reached as high as $23.49 last week.
AmREIT last week said it has retained investment banking firm Jefferies LLC as a financial advisor to assist its board of directors.
AmREIT owns 32 retail properties, including 19 neighborhood shopping centers in high-growth markets in Texas and Atlanta. Regency operates 332 shopping centers around the country.
Tax legislation could
derail Medtronic merger
Medtronic Inc.’s $43 billion merger agreement with Covidien plc could be in jeopardy as federal officials seek to expedite legislation that would discourage Medtronic from relocating its headquarters overseas.
Analysts said when the deal was announced last month that it does make strategic sense for the two medical device companies to merge, but a key part of the deal is Minneapolis-based Medtronic’s plan to relocate its corporate headquarters to Covidien’s home in Dublin, Ireland.
Medtronic, which also has the headquarters of its surgical technologies division in Jacksonville, said it would keep its “operational headquarters” in Minneapolis after the merger.
This so-called corporate inversion, or tax inversion, strategy is designed to take advantage of lower corporate tax rates in a foreign country.
However, the Obama administration is seeking legislation to prevent U.S. companies from using this strategy and it has the support of several members of Congress, according to news reports last week.
U.S. Treasury Secretary Jacob Lew sent a letter last week to two U.S. senators and two U.S. representatives urging them to pass the legislation that would “ensure that companies could not change their corporate tax domicile without a change in control of the company itself.”
Lew’s letter said the legislation would be retroactive to May and that businesses have been put on notice “that any transaction that takes place after early May 2014 will not have the desired effect of lowering future U.S. tax liabilities.”
So, Medtronic and several other large U.S. companies that have inversion deals pending would not be able to take advantage, even if they complete the deals before the proposal becomes law.
Lew’s letter called for overall business tax reform. “But, even as we work to do that, we should prevent companies from effectively renouncing their citizenship to get out of paying taxes,” he said.
Medtronic spokesman Fernando Vivanco said by email that the company was declining to comment on Lew’s proposals.
on earnings miss
AutoNation Inc.’s stock dropped sharply Thursday after the auto dealership company reported second-quarter earnings below analysts’ expectations.
Earnings from continuing operations of 83 cents a share were 10 cents higher than the second quarter of 2013, but the average forecast of analysts was 87 cents, according to Thomson.
AutoNation’s stock fell $5.01 to $55.82 Thursday after the earnings report.
Fort Lauderdale-based AutoNation operates 273 new vehicle franchises in 15 states, including four in the Jacksonville area. The Jacksonville dealerships formerly operated under the Mike Shad brand, but the company rebranded all of its dealerships under the AutoNation name last year.
Vulcan Materials Co. last week promoted its former top executive in Jacksonville to chief executive officer.