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Jax Daily Record Monday, Oct. 24, 201612:00 PM EST

Supervalu selling Save-A-Lot chain

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by: Mark Basch Contributing Writer

After previously considering plans to spin off Save-A-Lot with an initial public offering, Supervalu Inc. instead last week agreed to sell the supermarket chain to Toronto-based private equity firm Onex Corp. for $1.365 billion.

Save-A-Lot has 1,368 stores in 37 states, including 12 in the Jacksonville metropolitan area. About two-thirds of the stores are operated by licensees, with the rest owned by the company.

The sale, which the companies hope to complete in January, will likely have little impact on the discount grocer’s business. As part of the deal, Supervalu and Onex are signing a five-year agreement for Supervalu to continue providing operational services for Save-A-Lot.

Save-A-Lot’s sales have been struggling. Two days after announcing the agreement, Supervalu reported earnings for its second-quarter ended Sept. 12 and said Save-A-Lot’s total sales fell 2.8 percent to $1.06 billion, with identical store sales (sales at stores open for more than one year) dropping 5.2 percent.

In the company’s conference call, Save-A-Lot CEO Eric Claus said sales were impacted by deflation in food prices and a reduction of food stamp benefits in 22 states in which it operates.

Claus said the company’s level of sales under the Supplemental Nutrition Assistance Program, or SNAP, “is meaningfully higher than other retailers.”

As Save-A-Lot changes ownership, the chain expects to continue growing, with plans to open 70 new stores this fiscal year, Claus said.

“Overall, we are facing strong headwinds today. But with time, we believe they will subside and our long-term strategies will take stronger hold. When the tide will turn, I believe Save-A-Lot will ride the upside to that wave,” he said.

Besides operating Save-A-Lot, Minneapolis-based Supervalu provides wholesale services to 1,796 independent grocery stores and operates 200 other retail stores through several brands.

The company will use proceeds from the sale of Save-A-Lot to pay off debt.

Ameris suffers personal tragedy from Matthew

Like most major companies, Ameris Bancorp saw little financial impact from Hurricane Matthew, CEO Edwin Hortman said during the company’s quarterly conference call last week.

However, the bank suffered a much bigger loss, he said.

A top officer of Ameris’ Savannah operations died in an accident while evacuating before the storm, Hortman said.

“It was really, really emotional for our people. So while we don’t expect any financial impact from the storm and didn’t have any, from a human relations and personnel standpoint it was pretty difficult to handle,” he said.

Hortman was responding to an analyst’s question about Matthew’s impact on the company. He didn’t give any more details but according to an obituary in the Savannah Morning News, the officer was Pamela Parker, a senior vice president.

Ameris reported earnings for the third quarter of 61 cents a share, up from 49 cents in the third quarter of 2015 and a penny higher than the average analysts’ forecast, according to Thomson Financial.

“The growth in our core business and its profitability is really satisfying. It’s also rewarding to me, because the results are coming from initiatives we started some number of months ago,” Hortman said.

One of the initiatives was seeking new business lines to expand its lending activities.

“We should finish the year with one of the best growth stories ever in our company,” he said.

Ameris is officially headquartered in Moultrie, Ga., but its executive officers are in Jacksonville.

Landstar System beats forecasts

Landstar System Inc. last week reported third-quarter earnings higher than expectations and also predicted fourth-quarter earnings will be higher than many analysts predicted, sending its stock higher.

The Jacksonville-based trucking company’s third-quarter earnings of 86 cents a share were 4 cents lower than the third quarter of 2015, but above Landstar’s forecast range of 79 cents to 84 cents.

“Landstar continued to execute well in the 2016 third quarter considering the ongoing slow growth in the U.S. industrial sector,” CEO Jim Gattoni said in a conference call with analysts.

He said the soft conditions, along with lower fuel prices, are causing revenue per load hauled by Landstar’s trucks to be down this year. Total revenue in the quarter fell 6 percent to $788 million.

The company is projecting fourth-quarter earnings of 85 cents to 90 cents a share, higher than analysts’ forecasts, which ranged from 79 cents to 85 cents before the report, according to Thomson.

Landstar is forecasting revenue of $800 million to $850 million, above analysts’ forecast range of $776 million to $831 million.

“So far, our results have reflected a softening operating environment and low economic growth in the U.S. economy. With that said, however, the model performed well and we are encouraged by the improving sequential trends. We continue to add agent capacity to the network and are well-positioned for when the market improves,” Gattoni said.

Landstar’s stock jumped as much as $7.40 to a 52-week high of $73.15 Thursday after the earnings report before closing the day at $69.90, up $4.15.

J&J Vision Care’s third-quarter sales rise

Johnson & Johnson last week reported third-quarter sales at its Jacksonville-based Vision Care subsidiary rose 8.2 percent to $739 million, due in part to a positive impact from foreign exchange rates on international sales.

When the currency impact is excluded, sales for the contact lens maker still rose 5.5 percent.

“New products launched late last year continued on an upward trajectory across all regions,” said Joseph Wolk, vice president of investor relations, in the company’s conference call with analysts.

Johnson & Johnson last month announced a $4.3 billion agreement to buy Abbott Medical Optics, which will expand the eye care business beyond contact lenses.

“We are excited about Abbott Medical Optics’ strong and differentiated surgical ophthalmic portfolio, particularly in cataract surgery. That, coupled with our world-leading Acuvue contact lens business, will help us become a broad-based leader in vision care,” Johnson & Johnson Chief Financial Officer Dominic Caruso said in the conference call.

He said the company expects to complete the acquisition in the first quarter next year and it will immediately add to earnings per share. The Abbott business will add about $1.1 billion in annual sales to Johnson & Johnson Vision Care.

Overall, Johnson & Johnson reported global sales rose 4.2 percent to $17.8 billion, with adjusted earnings per share up 19 cents to $1.68 in the third quarter.

EverBank updates executive changes

EverBank Financial Corp. last week unveiled an organizational chart for top management after its pending merger with TIAA’s bank subsidiary.

The Jacksonville-based bank already announced CEO Rob Clements will retire and President Blake Wilson will become CEO of the merged bank, which will continue to be headquartered in Jacksonville.

In a letter to EverBank employees from Clements and Wilson posted in a Securities and Exchange Commission filing, the company said Senior Executive Vice President John Surface and Executive Vice President Claudia Saenz Amlie also will leave after the merger.

TIAA’s acquisition of EverBank is expected to be completed in the first half of 2017.

The letter said the companies are still working “to determine the best operating model for the combined bank.”

The companies have not announced the name for the merged bank.

“We understand that the lack of exact clarity about the future of the combined bank is stressful, and we want to thank each of you for remaining sharply focused on your job and serving our clients during this transition,” Clements and Wilson told employees in the letter.

Advanced Disposal expects profit

Newly public Advanced Disposal Services Inc., which has been losing money, said in an SEC filing last week it expects to report net income of $2 million to $6 million for the third quarter.

The waste management services company still will have a net loss of $8 million to $12 million for the first nine months of the year.

Third-quarter revenue is expected to be $359 million to $363 million, compared with $361.3 million in the third quarter of 2015.

Advanced Disposal also announced it was meeting with lenders to negotiate a possible refinancing of its debt.

The company received net proceeds of about $325 million in its Oct. 5 initial public offering, which it is using to pay off some of the debt.

Dick’s Wings adds Mayport site

ARC Group Inc., franchisor of the Dick’s Wings & Grill restaurant chain, last week announced it opened its newest restaurant at 2434 Mayport Road in Atlantic Beach.

The 3,200-square-foot restaurant seats 125 customers and employs 30 people, it said.

ARC Group also said it relocated its Mandarin restaurant to a Walmart shopping center on Old St. Augustine Road, near Interstate 295. That 4,000-square-foot restaurant seats 165 and employs 40 people.

Dick’s Wings has 18 restaurants in Florida and six in Georgia.

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