The Palm Beach Post from West Palm Beach, Florida on March 26, 1998 · Page 43
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The Palm Beach Post from West Palm Beach, Florida · Page 43

West Palm Beach, Florida
Issue Date:
Thursday, March 26, 1998
Page 43
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THURSDAY, MARCH 26, 1998 The Palm Beach Post SECTION D V, a ,. I fl ; U . K & U A- The Fool Scoop An arch enemy? n vrff La U Last week, shares of McDonald's tional Dairy Queen Inc. Dairy Queen has nearly 6,000 ice cream and burger outlets worldwide, about a quarter the number Corp. slumped when it was revealed that insurance and holding company Berk of McDonald s stores. This makes Uairy Queen a not-so-insignificant competitor. It would arguably represent a conflict of interest for Berkshire to own the nearly 4.5 oercent of McDonald's it held as of last shire Hathaway Inc., run by super-investor Warren Buffett, had lowered its stake in the burger business by at least 16 million shares. The market's reaction was hasty, though, and media coverage More Foci, Page 8D A - Housing on the rise Is it too soon to dream that homes might be a good investment again? Jane Bryant Quinn, 7D Set up a personal portfolio Check local stocks and read the latest financial news at www.GoPBI.comYourMoney spring. This isn't a legally defined conflict, but it's likely that Buffett, a very principled busi-nessperson, would be bothered by it Berkshire's selling of golden-arched stock may well be no reflection on McDonald's investment merits. missed an important point There's a good reason Berkshire would not be committed to an investment in McDonald's, and it has nothing to do with the way McDonald's is doing things. Early this year, Berkshire acquired Interna- B Sensormatic execs pay $140,000 in fines Competition forcing Kmart to close store The chairman and two former executives manipulated the company's quarterly revenue in 1994 and 1995. None could be reached for comment Wednesday. ' "These are significant fines for individuals," said Antonia Chion, an SEC assistant director of enforcement. In a two-year scheme outlined by the agency, Assaf and the four former executives improperly booked revenue for products that, hadn't been shipped. The inflated numbers; were then made part of Sensormatic's quarterly financial reports to the SEC, which monitors the activities of shareholder-owned companies. Boca Raton-based Sensormatic makes re-: tail anti-theft and closed-circuit television; Please see SENSORMATICZD the SEC's complaints over the scheme a scheme that marred the company's image on the Street, drove its stock down, cost it most of its top management and resulted in a shareholders lawsuit that was settled for $53 million. In all, Assaf, four former executives and the company settled SEC complaints by agreeing not to violate financial reporting laws. But only Assaf, former Chief Operating Officer Michael Pardue and former Vice President of Finance Lawrence Simmons were fined. Assaf and Simmons were fined $50,000 each, and Pardue was fined $40,000. Simmons also was barred from practicing accounting before the SEC for at least five years. By Stephen Pounds Palm Beach Post Staff Writer BOCA RATON Sensormatic Electronics Corp. Chairman Ron Assaf and two former company executives have agreed to pay $140,000 in fines for illegally manipulating the company's quarterly revenue and earnings in 1994 and 1995 to meet Wall Street expectations, the U.S. Securities and Exchange Commission said Wednesday. Assaf, the two former executives and the company itself didn't admit guilt in settling The retailing winds are shifting around Delray Beach. Even as new restaurants and shops crowd the city's downtown along East Atlantic Avenue, to the west of the city a longtime retailer is closing. Kmart is shutting down its store at Atlantic Avenue and Military Trail next month, after 16 years in the location. "It's not performing as we'd hoped," spokesman Dan Jarvis said from Kmart headquarters in - ; 1ls' 3 ftrgg-maniii Assaf The first of its kind i . i W 'Ml JUL I. I I J 4, J Troy, Mich. He declined to elaborate. But Kurt Barnard, publisher of Barnard's Retail Trend Report, said demographics are a key reason when a longtime retailer closes. "A store may have been profitable and a fine performer years back, but neighborhoods change, demographics change and . Alexandra Clough Nelson goes undercover to catch auto insurer fraud A Tampa company accused of 'sliding' didn't notice that the. customer was the insurance -commissioner, he says. : Palm Beach Post Staff and Wire Reports TAMPA Wearing jeans, a work shirt and cowboy boots and using his own namek Florida Insurance Commissioner Bill Nel-; son went undercover to help expose auto insurance abuses and said he was ripped , i.M." household economics change. All of that can make a store's profitability dif V L , f , - 'Mai' S"' JXJ' ft ferent. And competition from rival retailers1 such as Wal-Mart and Target has figured into Kmart's decision to shut certain stores, said Michael Schroeder, a principal with money manager Wasmer, Schroeder & Co. in Naples. Wal-Mart is just south of Kmart on Military Trail. Target is to the east, inside the city limits. These days, Kmart has been taking a hard line on store profitability, moving to close some stores and beef up the rest. Its Big Kmart strategy strives for higher sales through store renovations and a wider selection of merchandise. The strategy seems to be working. For the 13 weeks ended Jan. 28, profits were $186 million, compared with a loss of $164 million during the same period in 1997. But that's cold comfort for the 82 workers who will lose their jobs at the Delray Beach store. Jarvis said some of them may find positions with nearby Kmarts. The company has six other stores in Palm Beach County and one in Martin County. Sometimes on a weeknight, when the trials are over and the clerks have gone home, one courtroom will be occupied by lawyers wearing wigs and pretending to be the cast of Seinfeld. Jon Gerber as crazy Kramer. His wife, Tracy Gerber, as shrill Elaine. And how did Judge Howard Berman get to be Jerry? But there he was, wearing bluejeans, loafers and a smirk for Please seeClOUGW6D THE ASSOCIATED PRESS RENTON, Wash. - The rear fuselage of the first feet-7-inches long and 124-feet-10-inches from Boeing 757-300 is lifted into place by Boeing wingtip to wingtip. It is scheduled to roll out of the workers. When completed the airplane will be 178- factory in May and be delivered in early 1999. off for $100. He used his proper name, C. William Nelson, and showed sales agents his real driver license, which is signed "Bill Nelson." But he wasn't recognized. He told the story Wednesday in announcing an investigation that led to the indictment of a Tampa-based insurance agency, its owner and 29 agents. Nelson said he was a victim of a deceptive practice called "sliding," when a policyholder is charged for coverage or items neither asked for nor wanted. Sales agents reportedly got to keep $20 of each $100 they collect. These add-on costs amounted to at least $100 a person and cost Florida consumers an estimated $4 million from 1995 through 1997, Nelson said. He spoke at a news conference to announce the first stage of a statewide 15-month sting called "Operation Cheap Tricks." An indictment by a statewide grand jury, unsealed Wednesday, charges 30 people and Amscot Insurance Agency, which has 18 offices on Central Florida's Gulf Coast, with organized fraud. "We think this is just rampant all over the state," Nelson said. "We have an ongoing investigation on other agents and agencies doing the very same thing." Investigators are looking at 48 insurance sales offices in South Florida, Orlando and Jacksonville, Nelson said. "If these agents are brazen enough to rip off the state treasurer and insurance commissioner, what are they doing to the rest of the consumers in the state?" Nelson Please see INSURANCE6) Embargo's end could harm Florida Experts predict a major economic blow to area farmers if Cuba is allowed to trade freely with the U.S. Palm Beach Post Staff and Wire Reports Florida agriculture could suffer a major blow if the United States lifted the trade embargo against Cuba, re searchers and Florida farmers say. "The time you ship (produce) out of Cuba is the winter, December through April. They'd take the winter vegetable market out of Florida completely," said Paul Di Mare, president of the Di Mare Co., one of South Florida's largest winter vegetable farms. "Sugar cane, they can eliminate it," Di Mare said Wednesday from his company's tomato packing plant in Florida City south of Miami. But the nation's largest sugar cane grower, Clewiston-based Unit- I1easeseeCVBA7D Sugar, citrus, winter vegetables, tropical fruit and fisheries would face Opening up trade with Cuba would have a more significant long-term impact on Florida agriculture than 1995's North American Free Trade Agreement, said Bill Messina, of the University of Florida's Institute of Food and Agricultural Sciences. NAFTA put Florida in direct competition with Mexican growers who produce crops with much cheaper labor and far less government regulation. The idea clearly worries growers. the most serious challenges from a free-trading Cuba, according to Uni versity of Florida researchers, who Market closed at 8,872.80, down 31.64 Minute by minute have studied the issue tor the past four years with their counterparts at 8960 1 8940 I the University of Havana. Sales of existing homes set record 8920 V-j 8900 8880 8860 y J 8840 V 7 8820 y 8800' ' r- 1 10 It 12 1 2 3 4 am- p.m. Existing home sales February sales of existing single family homes in Palm Beach County and the Treasure Coast Palm Beach County was up 30 percent and the jumped, compared with last year. Prices were Treasure Coast 43 percent over February 1997. also higher. Feb. 1998 Feb. 1997 Palm Beach Post Staff and Wire Reports Dow: week by week February resales of single 9000 nil 8800 rtujn n.:. so-- 520 8600 family homes broke records in Florida and posted huge gains in Palm Beach County and the COUNTY Median $135,400 $129,700 bwuraii pnce Treasure Coast thanks to a healthy economy, low interest 400 8200 8000 7800 7600 7400 A record 9,319 closings were recorded across the state last month a record and a 10 percent increase over February 1997, which itself was a record month. At the same time, the median sales price half the homes sold for more, half for less climbed 7 percent above the vear-ago level to $97.5X! Driving the market is growth combined with low interest rates to entice first -time buvers. said Keith White of ReinhoM P. Wolf F.conomics Research in Fort Lauderdale. Sliif writer Anpt FranraLmria and The AsstMiatcd Vrss contributed to tlits report. TREASURE COAST Units 248 174 4J:V rates, continuing population E existing single-family homes rose 30 percent over February 1997, and the median price climbed 4 percent to $135,400, according to the Florida Association of Realtors. The Treasure Coast sales increase was even more impressive up 43 percent in Martin and St. Lucie counties, with the median price up 13 percent to $83,200. "We have a lot of first-time buyers, so homes in the lower end of the market are becoming less available and more valuable," said Mickey Bradley, president of the St. Lucie Association of Realtors. growth, more snowbirds, and first-time buyers in the market. Median $83,200 $73,800 -4-13V pnee V 5-20 12-26 1-9 1-23 2-C 2-20 The sales story was much the FLORIDA units same across the country. Some Realtors sav signs point to an 9.319 8.493 "?iC s xfCA'e marK hottdavs Ooromf rxc nt ha to match tt CtOStng P"C from tr Oav tor Otn pnee can r?rt trading and newt thm occur ner the marte close Howr. market change measLwed from close to cKe. emerging sellers' market as the number of resale homes dtvrcas- Medan $97,500 $91,300 P"ce 7 es. Palm Beach County sales of 4 AAAft a. S.4

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