Cenveo Inc. did not respond to media inquiries last week about the planned closure of its Jacksonville envelope plant, but company officials did talk about the consolidation of the business during its quarterly conference call.
Stamford, Conn.-based Cenveo in September acquired the assets of National Envelope Corp. after that competitor filed for Chapter 11 bankruptcy reorganization.
The company says the merger with National Envelope turned Cenveo into the largest North American envelope manufacturer, but the two companies had “significant” geographic overlap, President Robert Burton Jr. said.
“Going into this integration we knew that we had to make the difficult decision to take significant capacity offline and minimize disruption to our customers,” he said.
Burton did not specifically address the Jacksonville plant or any other locations, but said the company already has closed five envelope facilities, “including two just this week.”
The closure of the Jacksonville plant at 5406 W. First St. was revealed in a Worker Adjustment and Retraining Notification filed with the state last week, which indicated 133 workers will lose their jobs when the plant closes in May.
Cenveo Chairman and CEO Robert Burton Sr. said the consolidation of envelope facilities will continue.
“This process is a process and we know it well. It will take most of the year to get that done,” he said.
Cenveo, which also has printing and packaging businesses, had 66 manufacturing facilities, according to its annual report.
It has a second Jacksonville plant at 136 Eastport Road, which it acquired when it bought Jacksonville packaging products company Rex Corp. in 2007.
That facility seems to be in no danger, as Burton Jr. mentioned that a new press was installed in the Jacksonville plant last year.
Cenveo reported fourth-quarter sales rose 16.5 percent to $509.9 million, helped by the National Envelope acquisition. However, the company recorded an adjusted loss from continuing operations of $9.3 million, or 11 cents a share, due in part to acquisition-related costs.
JPMorgan Chase planning more job cuts
As Chase continued to expand in the Jacksonville market with its seventh bank branch opening last week, parent company JPMorgan Chase & Co. told investors that the company will continue to shrink its employment base this year.
After cutting 16,500 jobs last year, JPMorgan Chase said at its investor day presentation that it plans to cut another 8,000 jobs this year. The global banking giant currently employs about 251,000 people, including 3,500 in the Jacksonville area, most of which work in the company’s mortgage banking operations.
Like last year, much of the this year’s cuts will come in the mortgage banking area, as reduced activity continues to prompt mortgage lenders to reduce their staffs.
JPMorgan Chase said 6,000 of this year’s 8,000 cuts will come from the mortgage business.
The company said in a Worker Adjustment and Retraining Notification in September that it was cutting 186 jobs in the Jacksonville market.
JPMorgan Chase spokeswoman Maribel Ferrer said by email last week that it is too early to know what the company’s overall 2014 plan will mean for the Jacksonville market, but any cuts in Northeast Florida are expected to be insignificant “relative to the number of employees we have in the area.”
Ferrer also said “we have had good success finding other jobs internally or externally for affected employees.”
JPMorgan Chase has been one of Jacksonville’s largest employers since it acquired the failed Washington Mutual Inc. in 2008 and merged the two companies’ mortgage banking operations together.
However, the only bank branch it had in the market was at its mortgage banking operations center at 7301 Baymeadows Way.
The company last year began a program to aggressively enter the consumer banking market in Jacksonville by opening branches. The latest branch opening last week was in Ponte Vedra Beach.
“Jacksonville is a market we’re committed to,” Ferrer said.
St. Joe addresses RiverTown deal
During The St. Joe Co.’s fourth-quarter conference call last week, CEO Park Brady briefly addressed the pending sale of the company’s last remaining Northeast Florida project.
St. Joe, which moved its headquarters from Jacksonville to WaterSound in the Florida Panhandle in 2010, agreed to sell the 4,057-acre RiverTown development in St. Johns County to Mattamy Homes.
“This project, as we’ve said before, is outside of our core area of Northwest Florida,” Brady said.
Actually, the company hasn’t said anything publicly about RiverTown in recent years. It only disclosed the sale agreement, without comment, in a Securities and Exchange Commission filing in January.
St. Joe also has an agreement in place to sell 382,834 acres of timberland in the Panhandle for $565 million, which the company expects to close next week.
“After this deal is closed, the board and management will work together to explore a full spectrum of options for the company’s capital. These options include but are not limited to dividends, stock buybacks, acquisitions, diversifications and other capital allocations. As we’ve said in the past, we are taking our time and we will keep you posted as we make progress,” Brady said.
St. Joe reported fourth-quarter earnings of $500,000 and earnings for the full year of $5 million, or 5 cents per share.
Coal outlook improving at CSX Corp.
You can’t talk about CSX Corp. without talking about coal. Most of the talk has been negative recently because of declining coal shipments by the Jacksonville-based railroad but for the first time in about three years, trends are looking up.
J.P. Morgan analysts issued a report stating that a stronger outlook for domestic coal demand should help railroad stocks this year.
“A combination of sharply higher natural gas prices, an unusually cold winter, and declining coal stockpiles support an improving outlook for domestic coal in 2014,” they said.
“Electricity generation is up sharply in the first quarter and coal stockpiles have fallen,” they said. “The greatest increase in generation has been in the service territories of CSX and Norfolk Southern Corp. where generation is up about 9.4 percent.”
Meanwhile, “natural gas prices have risen an astounding 46 percent in 2014” and coal stockpiles have dropped “significantly,” the analysts said.
This is particularly relevant to CSX, because coal shipments account for 24 percent of the company’s revenue, compared with 23 percent for Norfolk Southern and 18 percent for Union Pacific Corp., the analysts said.
They estimated that a 10 percent increase in utility coal shipments will increase CSX’s earnings by 2.2 percent.
However, they noted that CSX’s and Norfolk Southern’s stock prices “do not appear to reflect any good news on coal,” so there may be an opportunity for investors.
Wells Fargo analyst Anthony Gallo also sees opportunity for CSX stockholders from a coal rebound this year, but he also sees other reasons for optimism.
“Elsewhere, we find encouragement in the secular intermodal story and cyclical recovery in several merchandise markets,” Gallo said in a research note last week.
“After hosting CSX management for investor meetings we have increased confidence that the probability is improving that 10-15 percent annual EPS growth can be achieved over the 2013-2015 time frame, after giving effect to certain one-time items,” he said.
Stein Mart growing despite Fernandina Beach closure
Stein Mart Inc. last week announced it has closed its smaller store in Fernandina Beach but otherwise, the company is in an expansion mode.
With sales growing, the Jacksonville-based fashion retailer said it plans to open 10 new stores this year, which will mark its largest expansion since 2007.
The expansion includes stores in Miami and Washington, D.C., that will take over former Loeh-mann’s locations. Loehmann’s is going out of business after filing for Chapter 11 bankruptcy in December.
The company said in a news release that those two stores are “an example of Stein Mart’s aggressive real estate strategy focused on securing strategically important retail locations in targeted growth areas.”
In addition to the Fernandina Beach store, Stein Mart said it also closed a store in Brentwood, Tenn. Those are the only two planned closures this year.
Stein Mart currently operates 260 stores.
Interline Brands posts sales increase
Interline Brands Inc. last week announced that fourth-quarter sales rose 20.5 percent to $390.1 million and sales for all of 2013 rose 20.9 percent to almost $1.6 billion.
The Jacksonville-based distributor of maintenance, repair and operations products reported net income of $1.2 million for the fourth quarter.
“We closed out the year with strong momentum as we achieved our highest quarterly organic sales growth since the third quarter of 2006. I am particularly encouraged by the strength of the market fundamentals that underpinned our growth across all of our facilities maintenance end-markets,” Interline Chairman and CEO Michael Grebe said in a news release.
“Despite some limited weather impact to date in 2014, we enter the year with a great deal of excitement and confidence,” he said.
Embraer facility still on schedule
Brazilian aircraft manufacturer Embraer S.A. indicated last week in its year-end report that production is underway at its Jacksonville International Airport facility.
Embraer said it has “finished adapting the hangar” at JIA, where it is building the A-29 Super Tucano light attack aircraft for the U.S. Air Force. It also said materials for the aircraft “have started to arrive” to allow production to begin.
“The facility has the labor force necessary to start production in compliance with the original time schedule, with the first deliveries expected in mid-2014,” it said.