The Lane Report -- Fast Lane November 1999


	FAST LANE - November 1999 NORTHERN KENTUCKY Delta Air Lines Acquires Kentucky-based Comair THOUGH it has functioned as a "Delta Connection" carrier for the past 15 years, Comair will now officially be part of Delta Air Lines with an agreement that involves Delta acquiring the Kentucky-based regional airline for $1.8 million or $23.50 per common share. Delta already owned approximately 22 percent of Comair's outstanding shares. After Delta closes on the deal to acquire the remaining shares, Comair will be operated as a separate subsidiary of Delta. Comair's headquarters will remain at the Cincinnati/Northern Kentucky International Airport, which is also Delta's second-largest hub. Company officials have said no job cuts are expected as a result of the transition. David A. Siebenburgen, president and CEO of Comair, will lead the national Delta Connection network, with direct responsibility for Comair and Atlantic Southeast Airlines (ASA), a wholly-owned subsidiary of Delta that primarily serves cities in the Southeast and Texas. David Mueller, chairman of the board and CEO of Comair Holdings, the parent company of Comair, will remain with Comair Holdings through the transition period, after which time he will serve as an advisor to Delta and as chairman of the Delta Connection Carrier Advisory Committee. Comair was recently named as the best-managed regional airline for 1999 by Aviation Week & Space Technology magazine. Delta was named by the magazine as the year's best-managed major airline. NEWPORT Star-Kist Moving Headquarters Operations to Pittsburg NEWPORT-based Star-Kist Foods Inc. has announced that it is moving its Newport plant and headquarters operations to Pittsburgh as part of a company restructuring effort to improve efficiency, competitiveness and profits. Pittsburgh is home of H.J. Heinz Co., the parent company of Star-Kist. Heinz officials say the consolidation, which is expected to be complete by July, will streamline operations and result in around $25 million per year in savings over the next several years. The Newport plant currently employs 425 people. The company has said that all salaried personnel will be offered job opportunities in Pittsburgh, but officials are expecting only around 30 percent to make the move. Employees who elect to not move will be offered severance pay and assistance in obtaining new jobs. The loss of Star-Kist headquarters also comes as a blow to the city of Newport, which will lose more than $500,000 in tax revenue and leaves the city looking for a new tenant to fill the company's 110,000-square-foot headquarters space at One Riverfront Place. LOUISVILLE Humana Sued Over Claims Review Process A potential class-action lawsuit has been filed in federal court against Humana, Inc., claiming the company's insurance and healthcare decisions were primarily driven by economic motives. The suit, seeking unspecified damages, may be the first of several against the Louisville-based insurer and health maintenance organization. In addition to damages, the suite seeks to compel Humana to reveal to its insurers and potential customers how it makes its healthcare decisions. The plaintiffs claim Humana pays bonuses to claims reviewers based upon costs saved, allegedly by withholding proper care -, and by paying "capitation" fees for every approved plan physician, an arrangement that also could encourage the withholding of care. Humana hasn't responded to the suite except to deny the plaintiff's allegation. The American Association of Health Plans, a trade group of HMOs, has said that the claim that its members would withhold care for economic reasons "doesn't make sense." COVINGTON Gibson Greetings Increases Investment in Internet GIBSON Greetings Inc. has announced a 10 percent investment in Honkworm International, a Seattle company that produces Internet animation featured on numerous Web sites such as Fox Sports and MTV. As part of the transaction, Gibson has purchased a minority interest in the company with a warrant to purchase another 10 percent within 18 months. Gibson also agreed to purchase a significant volume of online properties and content developed by Honkworm over the next 18 months. George White, who heads Gibson's Internet content development efforts, will serve as a member of Honkworm's Board of Directors as part of the Gibson investment. "It is clear that content will drive the growth on the Internet in the next few years," noted White. "This investment will enable Gibson to gain access to entertainment properties and develop capabilities for our own properties." Faced with declining sales and uneasy shareholders, Gibson's investment also reflects an effort to generate new revenue and further increase its role in Internet greetings. Two years ago, Gibson invested approximately $10 million in E-Greetings Network, where it has since become a leading content provider. "Our modest investment in Egreetings two years ago, which initiated our Internet strategy, has proven to be timely," said Frank O. Connell, Gibson chairman, president and chief executive officer. "Today, E-greetings is one of the top 20 Websites ...[and] convinced us that our future growth lies with harnessing the power of the Internet through effective use of our content development expertise." LOUISVILLE Company Expansions to Bring Hundreds of New Jobs to Area AIDED by state incentives totaling nearly $10 million, five companies have announced expansion plans in Jefferson County that could add more than 400 high-paying jobs, averaging $31,000 to $40,000 per year. The largest expansion will involve Nationwide Credit Inc., a collection company that plans to add 200 jobs and expand its facility on Hurstbourne Parkway. Darwin Networks, a spin-off of High Speed Access Company, will add almost 100 jobs in a new headquarters operation in the National City Bank building located in downtown Louisville. Clarke-American Checks Inc. will build a 50,000-square-foot center at an undisclosed location and add 65 employees to its current 50-person workforce. Planet Telecom will move its 25 employees from New Albany, Indiana to downtown Louisville, while Syltone LLC, parent company of Drum Industries, will build a new 22,000-square-foot facility at Blankenbaker Crossing. Syltone expects to add 30 new jobs to its existing 50-member staff. NORTHERN KENTUCKY Kentucky Companies Top Listing of Greater Cincinnati's Private Firms KENTUCKY companies held three of the top 10 positions in the latest Greater Cincinnati 100 roster, a listing of the area's top private companies. Ris Paper Co. Inc., a Florence firm that distributes paper, packaging and communications products, was ranked first in the region for the third consecutive year. The company was established Cincinnati in 1938, but moved to Florence five years ago. Ris currently owns distribution warehouses in 26 cities throughout the Northeast, Mid-Atlantic, Midwest and Southwest. The company employs a staff of 700 and produced annual revenues of approximately $600 million last year. Following Ris on the list is Columbia Sussex Corp. and Affiliates, a hotel developer and operator based in Fort Mitchell. The company's revenues increased from $350 million in 1997 to $397.4 million last year. The Drees Co., a Fort Mitchell construction company came in fourth on the list. Drees employs 400 and reported 1998 revenues of $346.2 million. The company was also named "America's Best Builder" for 1998 by Builder magazine. The annual Greater Cincinnati 100 listing, compiled by Arthur Andersen, requires that the companies be based in the 14-county Greater Cincinnati area and must employ at least 80 people. ROWAN COUNTY New Family Dollar Distribution Center Expected to Employ 500 FAMILY Dollar Stores, Inc. plans to hire approximately 500 people at a new distribution center to be located on 93.5 acres in the MMRC Regional Industrial Park in Rowan County. The industrial park is a cooperative effort of Menifee, Morgan, Rowan and Carter counties and is one of seven regional parks around the state being developed with funds from the Local Government Economic Development Program. The program, administered by the Kentucky Economic Development Cabinet, provides grants of coal severance tax revenues to coal-producing counties to assist those counties in diversifying local economies. "Family Dollar is the type of company we envisioned would locate in one of the regional parks," said Governor Paul Patton. "This company has a tradition of providing good solid jobs in many communities in 1959." In announcing plans for the new 907,000-square-foot distribution center, Family Dollar Senior Vice President-Distribution and Logistics David Alexander noted that the facility will be located in the center of a region where the company has a heavy concentration of stores and is continuing to add new stores. The North Carolina company operates more than 3,300 stores in 39 states and plans to open 400-425 new stores during the current fiscal year. Construction of the Rowan County facility is expected to be complete by next summer. STATE Kentucky Agricultural Commissioner to Head Regional Association KENTUCKY Agriculture Commissioner Billy Ray Smith has been elected to serve as president of the Southern Association of State Departments of Agriculture. The association is made up of 14 states as well as Puerto Rico and the Virgin Islands. Smith says he plans to emphasize the need for farm safety throughout the region, as he has within Kentucky. Last year, Smith hired a field representative to give lectures and demonstrations on farm safety across the state and established a grant system funded by the legislature enabling each Kentucky county to receive up to $1,000 over a two-year period to develop a farm and home safety program. As a result, says Smith, farming-related deaths have declined significantly over the past several years. EASTERN KENTUCKY Arch Retracts Plans to Sell Mining Operations in Harlan and Letcher ST. Louis-based Arch Coal Inc. has decided against selling its mining operations in Harlan and Letcher counties as previously announced. The two mines had been considered for sale largely because of their small size relative to Arch's other eastern mines and due to the company's aggressive debt reduction goals. Company officials have stated that though the Lone Mountain and Pardee mines generated "strong interest," none of the offers put forth were high enough to create "substantial value for our shareholders." The company is still reviewing the potential sale of its Coal-Mac operation, located in Pike County. Arch Coal is the country's second largest coal producer, providing fuel for approximately six percent of the electricity generated in the United States. Kentucky-based Ashland, Inc. currently owns 58 percent of the St. Louis company's outstanding shares of stock, but has recently informed Arch that it is contemplating a tax-free spin-off of its interest in the company. STATE New Web Site Devoted to Latest UK Basketball Info THE UK Basketball Museum is now taking the latest in Wildcat basketball info straight to the fans with the launching of its new Web site, wildcatfaithful.com. The site will serve as a centralized news source for daily information on the UK basketball program in addition to featuring spotlights on players and the coaches, the latest recruiting information. Fans will also have the opportunity to purchase UK merchandise and chat with other Big Blue Fans. HARRODSBURG Corning Inc. to Shift Focus of Harrodsburg Facility CORNING Inc. has announced plans to expand its advanced display products (ADP) division, a move that will result in increasing its Harrodsburg staffing by 10 to 20 percent over the next two years. ADP refers to the liquid crystal display technology used for computer monitors and flat television technology. The Harrodsburg plant is currently the only facility in the U.S. devoted to such production. With its intensified focus on ADP, however, Corning will close its ophthalmic glass production, due to decreased demand as more eyeglass manufacturers turn to plastics. The ophthalmic glass division has been downsizing since 1994 and will close the final phase of production by the middle of next year. The closure will result in the elimination of 30 jobs. Corning officials have said that those employees affected will be offered jobs elsewhere in the plant or given an option for early retirement. LEXINGTON Long John Silver's to Move Back to Former Headquarters LONG John Silver's has reached a long-term lease agreement with Ashland Inc. that will enable the company to move back to its former headquarters facility. Long John Silver's moved to an office tower in downtown Lexington in 1996 following the sale of its headquarters to Ashland. Ashland's SuperAmerica subsidiary occupied the Richmond Road building prior to its being combined with the convenience store operations of Marathon Oil Company. SuperAmerica's operations were moved to Ohio in 1998. The move gives Long John Silver's significantly more space, which the company hopes to fill now that it has emerged from bankruptcy after being purchased by A&W Restaurants Inc. Company officials say the move is expected to take place in the spring. LOUISVILLE Decreased Cigarette Sales Lead to Earlier Closing of Philip Morris Plant PHILIP Morris USA has announced that it will be closing its Louisville cigarette manufacturing plant about six months earlier than previously announced. The change in strategy, based upon operating capacity, means that approximately 350 employees will be permanently laid off by December 31, with the entire workforce of 1,400 terminated by mid-summer 2000. When the company shocked community and business leaders in February with the announcement that it would be closing the plant, it was then reported that the probable date of final closing would be December 2000. But due to decreased cigarette sales, plant capacity has since fallen from 50 percent to 35 percent. Fast Lane Business Briefs BARDSTOWN Bird Vinyl Products Ltd., which produces vinyl siding, has reached an agreement with its labor group, enabling the 200-employee plant to remain open. Bird officials have watched the company lose money for the past several years and had earlier stated that if no labor agreement could be reached, the factory would be shut down. BOWLING GREEN Hays Watkins, former CEO and chairman of CSX Corp., has donated more than $300,000 to Western Kentucky University. Income from the endowment will go to support the Hays Watkins Visiting CEO Professor in the Department of Management and Information Services. BENTON Contrary to a July announcement, Paducah-based Silk Tree Factory (now operating as Trees and Trends) has decided against building a distribution center in Benton's industrial park and will instead move forward with plans to locate the facility in Memphis. Company officials say the decision was based on transportation costs and the fact that Memphis could provide a ready-made building. CLAY Alliance Resources Partners L.P. has acquired coal reserves adjacent to its Dotiki Mine in Webster County, where it now employs 285 people and produces 3.5 million tons of coal per year. The acquisition could produce up to 21 million tons of coal, said company officials. ELIZABETHTOWN First Federal Financial Corporation of Kentucky has initiated an 18-month stock repurchase program that will involve acquiring up to 10 percent of the corporation's outstanding shares of common stock. Since 1995, the company (NASDAQ: FFKY] has repurchased a total of 605,545 shares through previous repurchase programs. ERLANGER Children's Hospital Medical Center of Cincinnati is hoping open a $7 million treatment center in Erlanger, offering outpatient surgery, pediatric specialty care, diagnostic services and follow-up therapy for its patients in Northern Kentucky. In its application to the state, which still has to approve the plan, the hospital stated that 19,000 residents of Boone, Kenton and Campbell counties utilized the hospital or one of its satellite offices in 1998. If the plan is approved, the hospital hopes to have the center open by the spring of 2001. FRANKFORT Kentucky Investors Inc. has announced that it will acquire the remaining shares of common stock in Investors Heritage Life Insurance Co. Kentucky Investors currently owns 74 percent of Investors Heritage, which it has controlled since 1963. The acquisition will be completed through an exchange of shares and is expected to be finalized by the end of the year. Both companies are based in Frankfort. Frankfort First Bancorp, Inc. has authorized a new stock repurchase program that allows for the repurchase of up to five percent of the outstanding shares remaining. The company has completed the repurchase program announced in March of this year, resulting in the repurchase of 76,337 shares at an average price of $14.96 per share. GEORGETOWN WRVG-89.9 FM, Georgetown College's radio station that began with the lofty goal of competing with the National Public Radio network, has announced that it is having to decrease its syndicated programming and cut five jobs in order to maintain a balanced budget. The station's management has said that programming changes are being planned and that the primary focus of the station will now be on strengthening its status as a single station rather than building a network system. HEBRON More than 16,000 applications have been submitted to Toyota Motor Manufacturing North America for 300 positions at its new North American parts distribution center, where the annual salaries will average approximately $42,000. The 843,000-square-foot facility is scheduled to be operational by the middle of 2001. LAWRENCE COUNTY Dynegy Corp., a Houston energy company, has selected 18 acres along the Big Sandy River for a new $100 million power plant. The 500-megawatt plant will feature three turbines powered by natural gas and will supply power to American Electric Power's Big Sandy generating station near Louisa during peak periods as well as other communities in the region. LEXINGTON EnviroData Group LLC has successfully completed a senior management buy-out of the laboratory assets of Commonwealth Technology, Inc.'s Lexington Lab Division. With two women, Ann Gladwell and Barbara Wagner, serving as principals, the firm now qualifies for contracting agreements requiring the utilization of women-owned and/or small business enterprises. Due to the corporate holdings of Commonwealth Technology, Inc., the lab was previously barred from bidding on contracts that required those subcontracting arrangements. The University of Kentucky has received a $5 million grant from the National Institute of Health that will be utilized for research related to Parkinson's disease. The center will open in January, with a research team lead by Dr. Greg Gerhardt. 222 West Vine LLC, a Lexington development company, is hoping to build an 11-story building in downtown Lexington that would feature 120,000 square feet of office space. If plans for the $15 million project move forward, the structure would represent the first new office building to open in the downtown banking district since 1986. LONDON In an effort to rejuvenate downtown business, the London City Council has approved the removal of all downtown parking meters. Instead, a two-hour time limit will be imposed and fines will be increased for those violating the new time limits. LOUISVILLE The City of Louisville has submitted a bid for the site once planned for Vencor, Inc.'s signature corporate headquarters. The bid package includes a two-acre site and four adjoining buildings, as well as the plans for the 29-story headquarters tower designed by noted architect I.M. Pei. City officials say the city's bid would prevent another buyer from allowing the key site to remain undeveloped for years while its resale value escalates. Tricon Global Restaurants Inc. has announced that it plans to buy back up to $350 million of its stock. Upon the announcement, shares of the Louisville-based company, which operates Pizza Hut, KFC and Taco Bell, rose 13 percent to $43.75. With a need for 1,500 temporary package handlers to help with the seasonal crush at its airport facility, United Parcel Service has offered signing bonuses to workers willing to commit to the midnight to 4 a.m. shift. Workers who committed to the shift before October 31 received a $200 bonus, plus $40 a week for every week worked in October and $100 a week for November and December. The law firms of Stites & Harbison and Wheat, Smith & Beres, PLC have formed a strategic alliance that gives each firm's clients preferred access to the other's lawyers. Wheat, Smith & Beres, PLC is the state's largest intellectual property law firm. Stites & Harbison is one of Kentucky's leading business law and litigation firms. ThermoView Industries, Inc. has filed an S-1 registration statement with the Securities and Exchange Commission to sell approximately 3.5 million shares of newly-issued common stock in an initial public offering (IPO). Shareholders of the company, which designs, manufactures, markets and installs custom vinyl replacement windows, approved a one-for-three reverse stock split, which was effective October 6. The reverse stock split was implemented to comply with the listing requirements for the NASDAQ National Market upon completion of the IPO. The company's common stock is now traded on the OTC Bulletin Board under the symbol "TVII". D.D. Williamson, the world's largest manufacturer of caramel color, is constructing a new plant in Manaus, Brazil. The new plant represents the seventh manufacturing facility for the company, which currently has operations in the U.S., Caribbean, Europe, Asia and Africa. Vencor, Inc., reorganizing under federal bankruptcy protection, has warned its employees that they may face lay-offs, particularly in its former Vencare division. Vencare has been merged into the company's new nursing home division in response to anticipated reductions in Medicare reimbursements for its respiratory and rehabilitation services. Vencare President Frank Anastasio has already resigned. Vencor has 42,000 full-time employees, including 700 in its Louisville headquarters. MADISONVILLE Alliance Laundry Systems, which manufactures commercial laundry equipment, shocked both its employees and the community when it recently announced that it will close its Madisonville plant next year, resulting in the loss of 250-300 jobs. The closing comes as a result of the loss of the company's home laundry supply contract, said company officials. OWENSBORO Area Bancshares Corporation has signed a definitive agreement to purchase The Eifler Group of Prudential Securities, a Louisville investment business. Under the agreement, The Eifler Group will become associated with Area Services, Inc., a wholly-owned subsidiary of Area Bancshares Corporation, and will manage the company's non-deposit investment product line under the name Area Investment Services. The Owensboro-Daviess County Regional Airport has received a federal grant for $1.2 million to initiate the study and engineering of a 1,500-foot extension of its main runway. Once the study is finished, which is expected to take six to nine months, the airport will then seek federal funds to begin the $15 million construction process. Extending the runway to 8,000 feet will take approximately three years to complete, say airport officials. Coca-Cola Bottling Company has reportedly paid $100,000 for seven acres across from Owensboro's new East Industrial Park with plans to build a new distribution center. The center will feature a 24,000-square-foot warehouse and a 4,000-square-foot service building. The company currently employs 29 full- and part-time employees in at its existing Owensboro facility, and is expected to grow further according to local company officials. PADUCAH The Paducah Area Community Reuse Organization (PACRO), a group that consists of representatives from McCracken, Marshall, Ballard, Graves and Massac counties, has received nearly $800,000 in federal funding to boost the area's economy and assist those who may be unemployed if the Paducah Gaseous Diffusion Plant closes or lays off staff. Community officials say the monies will be used to develop infrastructure in a new industrial park. PIKE COUNTY The Pike County Airport has been approved to receive $1 million from the Federal Aviation Administration for the installation of an instrument landing system. The monies will also go towards a 500-foot extension of the airport's primary runway. PIKEVILLE Pikeville Methodist Hospital in the process of adding a 10-story tower as part of $75 million project that will triple the size of the hospital. The expansion, which will also involve the opening of cardiovascular and neurological surgery departments, is expected to result in the addition of 50 new physicians and will create an estimated 315 new jobs. The project is slated to be complete this winter. RENFRO VALLEY A combination of private and public funds has been pledged to establish the Kentucky Country Music Hall of Fame, to be located just north of the Renfro Valley music complex. The museum is expected to be open in 2001 and will honor musicians who were either born in Kentucky, lived here or have spent a significant amount of time performing within the state. Private pledges total approximately $250,000, while the state has committed $2 million from its budget surplus. SIMPSONVILLE Work has begun on The Cardinal Club, a members-only golf course for University of Louisville alumni and supporters that will include an 18-hole championship golf course, tennis and swimming facilities and a university-themed clubhouse. A residential development is also planned along the eastern perimeter of the property that will feature single-family homes on individual lots ranging from one-third to three-quarters of an acre. Back to November Issue Back to Fast Lane Index

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