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Jax Daily Record Monday, Apr. 8, 201312:00 PM EST

Fortegra stock drops on disappointing earnings

by: Mark Basch Contributing Writer

Fortegra Financial Corp.'s stock posted the second-biggest drop on the New York Stock Exchange last Monday after the Jacksonville-based insurance services firm reported disappointing fourth-quarter earnings.

Late on the previous Thursday, before the markets took off for Good Friday, Fortegra reported fourth-quarter adjusted earnings of 21 cents a share, down from 26 cents the previous year and 7 cents lower than the average forecast of analysts surveyed by Thomson Financial.

Fortegra's stock fell 74 cents to $8.02 when trading resumed Monday, its lowest closing price since September. The 8.4 percent decline in the stock was topped on the NYSE only by an 8.8 percent drop by ITT Educational Services Inc.

This was another setback for stockholders who have seen Fortegra struggle to get back to its December 2010 initial public offering price of $11.

In the company's conference call with analysts Monday morning, CEO Richard Kahlbaugh said fourth-quarter results were impacted by Hurricane Sandy, which forced some of its clients to close for several weeks.

"If the tough economic and regulatory environment for our clients weren't challenging enough, Tropical Storm Sandy stepped in to make sure we were bringing our 'A' game to work every day," Kahlbaugh said.

"Despite Sandy presenting additional financial obstacles to overcome this quarter, I am pleased to report that our team was up to the challenge," he said. "We still delivered full year-over-year top line growth and solid double-digit net revenue growth after excluding realized gains."

Kahlbaugh expressed optimism about 2013. After reporting $118 million in net revenue in 2012, he said the company is expecting to increase revenue to $145 million to $150 million this year.

"As a result of strategic investments and market-driven planning over the past few years, we are a far stronger competitor today," he said.

The average analysts' forecast earnings forecast for 2013 dropped slightly from 1.05 a share to $1.03 after the fourth-quarter report, according to Thomson, but that still would be a big gain from adjusted 2012 full-year earnings of 82 cents.

William Blair & Co. analyst Adam Klauber said in a research note that he is maintaining a "market perform" rating on Fortegra's stock after the fourth-quarter earnings miss.

"While management guidance indicates strong potential for 2013, we would like a few quarters of solid results before we become more optimistic on the stock," he said.

Dick's Wings owner lowers expenses

American Restaurant Concepts Inc. last week reported a net loss of $353,832 in 2012 and a 4 percent increase in revenue to $450,949. But probably the most significant note in the year-end report was that the operator of the Dick's Wings & Grill restaurant chain slashed operating expenses by 62 percent during the year.

"I am very pleased with our financial results for 2012," CEO Michael Rosenberger said in a news release. "We implemented several operational improvements during the year that were designed to reduce our operating costs."

American Restaurant Concepts also outlined its growth plan for 2013, which includes converting underperforming locations for other restaurant chains into Dick's Wings restaurants and expanding into new markets. Dick's currently has 15 franchised locations in Florida and one in Georgia.

"We are taking a multi-faceted approach to growing American Restaurant Concepts," Rosenberger said.

"We first plan to complete the overhaul of our existing franchisees' operations, reduce our debt and increase our liquidity. These initial steps will put us in the best operational and financial position to achieve the remaining elements of our strategic plan, including the addition of new Dick's Wings restaurants and the acquisition of other branded restaurant franchises," he said.

Global Axcess reports 2012 loss

Global Axcess Corp. last week reported a 2012 net loss of $12.1 million, or 53 cents a share, according to its annual report filed with the Securities and Exchange Commission.

Revenue for the Jacksonville-based company, which operates automated teller machine and DVD kiosk networks, fell slightly from $31.9 million in 2011 to $31.2 million last year.

Global Axcess has previously taken a very proactive investor relations approach to its quarterly reports, including posting transcripts of its quarterly conference calls that made it very easy for investors to keep up with its progress. However, the company did not issue a news release or hold a conference call as it filed its yearend report with the SEC.

JBI moving ahead with Plastic2Oil plant

Speaking of unusual approaches to investor relations, JBI Inc. held a conference call last week to discuss its year-end results, more than two weeks after it filed its annual report with the SEC.

Instead of taking questions during the call, JBI asked investors to submit questions in advance. At least one investor did ask about JBI's plans to build a Plastic2Oil plant at the RockTenn containerboard mill in North Jacksonville.

"With regards to our partnership with RockTenn, there is a master agreement in place and there will be addendums for each site. We are currently negotiating the fine points relative to the Jacksonville site," CEO Kevin Rauber said.

Other than that, he did not discuss the Jacksonville facility in the call.

JBI says it has a process that converts waste plastic into liquid fuels. It currently operates Plastic2Oil plants at its headquarters in Niagara Falls, N.Y., and has been working to open the plant in Jacksonville.

"We believe our Plastic2Oil technology is world class. We believe there is no other company in the world doing what we are doing at the rate we are doing it," Rauber said in the conference call.

"The extent to which our P2O process has been validated on multiple levels is unprecedented. We look forward to remaining focused on translating that validation into profitability and building a long-term shareholder value," he said.

JBI reported a net loss of $13.3 million on revenue of $985,389 in 2012.

Shoe Carnival issues disappointing forecast

As it reported disappointing fourth-quarter earnings, Shoe Carnival Inc. last week also forecast first-quarter earnings will be lower than analysts' expectations.

The Indiana-based footwear chain reported earnings of 16 cents per share for the fourth quarter ended Feb. 2, even with the previous year's earnings. That was not a surprise because Shoe Carnival in March lowered its previous forecast of earnings of 20 cents to 22 cents for the quarter, saying athletic footwear sales were lower than expected.

With the final results in for the fourth quarter, Shoe Carnival projected earnings of 36 cents to 44 cents a share for the first quarter of fiscal 2013, well below the average forecast of 57 cents by analysts surveyed by Thomson Financial.

The company also forecast comparable-store sales to fall by 2 percent to 4 percent. Comparable-store sales, which are sales at stores open for more than one year, are considered a key indicator of a retailer's performance.

Shoe Carnival did have some good news for shareholders before the earnings report. After paying a special $1-a-share dividend in December, the company increased its regular quarterly dividend by a penny to 6 cents a share.

"We are pleased with the board's decision to increase our quarterly cash dividend and believe this reflects our expectations for continued generation of free cash-flow and aligns with our goal of enhancing total return to our shareholders," President and CEO Cliff Sifford said in a news release.

Former Jacksonville Jaguars owner Wayne Weaver is chairman of Shoe Carnival and its largest shareholder with 24.5 percent of the stock.

CEVA calls off IPO

CEVA Logistics Inc. last week filed a statement with the SEC withdrawing plans for an initial public offering.

The United Kingdom-based company had filed plans for the IPO in the U.S. last year, but hadn't filed any updates since August. Last week's filing said CEVA was withdrawing its IPO registration "as a result of unfavorable financial performance that would adversely affect the offering of the shares of ordinary stock."

CEVA was formed in 2006 when funds associated with Apollo Global Management LLC acquired the logistics business of TNT N.V.

TNT's North American logistics business was headquartered in Jacksonville, but the IPO filings show CEVA's U.S. headquarters is now located in Houston.

CEVA says it operates more than 1,000 locations in more than 170 counties.

FIS names Stallings to board

Fidelity National Information Services Inc. last week announced that former IBM executive James Stallings has joined its board of directors.

Stallings retired from IBM in January after serving in a number of high-ranking roles, including general manager of global markets and general manager of enterprise systems in IBM's systems and technology group.

He currently is managing partner of PS 27 Ventures, a private investment fund that focuses on technology companies in the healthy and sustainable living market.

Stallings' appointment increases the size of FIS's board to nine directors.

Simon's malls all nearly full

General Growth Properties Inc.'s quarterly reports recently show that its one regional shopping center in Jacksonville, Regency Square Mall, is struggling, with occupancy only at 60.2 percent at year-end.

However, Simon Property Group Inc., which owns all or part of several major regional malls in Northeast Florida, is doing quite well. Its annual report shows that all of its properties in the area are nearly filled to capacity.

Of the malls that are wholly owned by Simon, the Orange Park Mall was 97.7 percent occupied and the St. Augustine Premium Outlets were at 99.1 percent at the end of 2012.

The smaller Westland Park Plaza in Orange Park, with 163,254 square feet of space, was at 98.8 percent.

Simon also owns 50 percent of the St. Johns Town Center, which was 99.5 percent occupied, and it owns 25 percent of The Avenues mall, which was 96.4 percent full.

Indianapolis-based Simon owns or has an interest in 317 income producing properties in the U.S.

Stakool gone from Jacksonville

Stakool's short tenure as a Jacksonville-based public company appears to be over.

Stakool was a public company with no revenue-producing businesses until it merged with Anthus Life Corp. of Jacksonville in the fall of 2011. Anthus is a development-stage company that markets a line of natural and organic food products.

After the merger, Stakool listed its corporate headquarters in Jacksonville in its SEC filings.

However, the company's management was swept out a couple of weeks ago, with Joseph Canouse of Alpharetta, Ga., named the new CEO.

Stakool's latest filing with the SEC last week lists Alpharetta as its principal executive office.

That filing, by the way, says that Stakool's annual report scheduled to be filed last week with the SEC will be delayed.

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