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Beebe calls special session on severance tax Sunday, Mar 23, 2008 By Roby Brock At a Friday morning press conference, Gov. Mike Beebe announced plans to call a special session to raise Arkansas' severance tax on natural gas. Beebe said that he wants to start the session on March 31 and he expects the session to last 3 days. Beebe told reporters that he has 30 commitments in the Senate and 80 in the House, far more than the 75 percent super-majority threshold needed to pass the tax. Beebe has proposed a 5 percent severance tax rate tied to the market value of natural gas with limited exemptions for certain types of drilling. Industry representatives have signed on to the agreement. The estimated tens of millions in new tax revenues would be largely dedicated to road improvements at the state and local level. Dillard's reports earnings, receives shareholder challenge During its fourth quarter, Dillard's posted a $47.3 million profit, down 69 percent from the previous year's fourth quarter net income of $155 million. A $64 million net income tax benefit aided quarterly profits. Without the tax gain, Dillard's would have reported its second straight quarterly loss. Fourth quarter sales for the department store chain were down 5 percent to $2.2 billion. For the full year, Dillard's reported earnings of $53.8 million compared to $245.6 million for the previous year. Total annual sales topped $7.3 billion. Also, activist investor group Barington Capital, which has publicly challenged Dillard's management and board of directors, announced plans to nominate four people for election to the mall retailer's board. Dillard's annual stockholders' meeting is scheduled for May 17. Alltel posts quarterly loss on one-time merger charge Alltel Corp. posted a $525 million fourth quarter loss due to a one-time charge of $619 million associated with its $24.7 billion private equity buyout. Excluding the one-time charge, Alltel would have recorded a $94 million quarterly profit. One year ago, Alltel showed a fourth quarter profit of $215.9 million. Total revenues for Alltel for the quarter topped $2.3 billion, a 9 percent increase over the previous year. Annual revenues for the Little Rock-based wireless carrier were $8.8 billion, a 12 percent increase from 2006 and a new record for Alltel. Net income for the full fiscal year was $183 million, which includes the impact of $653 million of pre-tax merger-related costs. State's truckers call for congressional inquiry The Arkansas Trucking Association, which represents FedEx Freight, J.B. Hunt, Wal-Mart Stores Inc., and Tyson Foods, says it will petition Congress to investigate record high diesel fuel prices that "threaten the cost-effective flow of goods in the United States and the general economy." The organization's board of directors voted unanimously on March 19 to seek congressional oversight hearings into the causes of record high diesel prices that have swelled in recent weeks to almost $4.00 per gallon. Diesel prices are $1.29 higher than a year ago. "Congress should examine why supplies of diesel are plentiful, consumption is flat, yet the price keeps rising," noted ATA President Lane Kidd. "Neither the trucking industry nor the economy it serves can absorb these prices for long." Attorney general orders payday lenders to leave Attorney General Dustin McDaniel announced that he is sending letters to payday lending businesses operating under a license in Arkansas asking them to stop the practice immediately. Citing two recent Arkansas Supreme Court opinions, McDaniel advised payday lenders that charging exorbitant interest rates on loans violated both the constitution's usury limit and the Arkansas Deceptive Trade Practices Act, a law enforced by the Attorney General. McDaniel called on the businesses to cease their lending practices immediately, void any and all current and past-due obligations of their borrowers, and refrain from any collection activities related to the loans. A failure to do so would likely result in the filing of a lawsuit by the Attorney General, he said. The Arkansas Financial Services Association, which represents the businesses referred to as payday lenders, said that efforts to prohibit or limit the supply of financial products in the Arkansas market would penalize consumers. "Singling out one source of consumer credit, when other choices are actually more expensive, does not resolve the need or demand for the product in the marketplace," said a spokesperson for the industry. $75 million plant coming to Paragould Axis LLC, a joint venture between American Railcar Industries (ARI) and Amsted Industries, announced plans to locate a new 135,000 square-foot axle manufacturing facility in Paragould. The company will invest $75 million in the facility, which will employ 40 people. The axles produced will be used in railcars and Axis expects production to begin by the third quarter of 2008. American Railcar Industries has existing manufacturing facilities in Paragould and Marmaduke. Hopper and tank railcars are produced at these two locations. ARI is headquartered in St. Charles, Mo. Amsted Industries is headquartered in Chicago. Wal-Mart to buy remaining stake in Japanese retailer Wal-Mart will take full ownership of Seiyu Ltd. after a vote by shareholders of the Japanese retail chain. The company says that Seiyu shareholders approved the move at a meeting earlier this week. Wal-Mart said in December it had boosted its stake to 95.1 percent after offering to pay as much as $1.02 billion for the half of Seiyu it did not already own. This week's vote allows Wal-Mart to absorb the remaining 4.9 percent of Seiyu stock. The offer comes after Wal-Mart's five-year, $2.2 billion investment failed to return the Tokyo-based retailer to profit. Packaging plant sale touches Fort Smith, Russellville Weyerhaeuser Co. announced the sale of its containerboard packaging and recycling business to International Paper for $6 billion in cash. The move will affect nine containerboard mills, 72 packaging locations, 14 specialty-packaging plants and 19 recycling facilities, including two Weyerhaeuser packaging plants in Fort Smith and Russellville. The total transaction could impact approximately 14,300 employees worldwide. The deal is subject to customary closing conditions including regulatory review and receipt of financing by International Paper. The sale is expected to close in the second half of 2008. Tech firm, bank will open downtown Little Rock center Mainstream Technologies and Bank of the Ozarks have purchased the historic Federal Reserve Bank building in downtown Little Rock, the two companies announced. Mainstream will move its corporate headquarters and 31 employees from west Little Rock to the new building, which will also be home to a new state-of-the art data center. The data center will feature dual fiber connections, dual power grids and a backup generator that will allow Mainstream to host 120 terabytes of data compared to its current capacity of 12 terabytes. Bank of the Ozarks will add office space for approximately 15 professional and executive staff members in the building, as well as a full-service retail banking operation in the space. The 77,860 sq. ft. building is located at 325 W. Capitol in Little Rock. Brent & Sam's Cookies sells Lance, Inc., the snack food distributor, has bought North Little Rock-based Brent & Sam's Cookies. Terms of the cash deal were not disclosed and Lance said the acquisition was funded with a draw under its existing credit facility. Brent & Sam's, Inc. was founded in 1985 by Brent Bumpers, son of former U.S. Sen. Dale Bumpers, and childhood friend Sam DeWitt. The cookie company makes a wide variety of gourmet style cookies sold under the Brent & Sam's brand as well as under private label brands controlled by retail customers. ------- Roby Brock, a freelance journalist based in Little Rock, writes weekly for the Arkansas News Bureau. His weekly television program airs at 10 p.m. Sundays in Central and Northwest Arkansas. His e-mail address is roby@talkbusiness.net; his Web site address is www.talkbusiness.net. |
