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THURSDAY, DECEMBER 4, 1997 r- e The Palm Beach Post M SECTION D T H U.RS D AY FROM THE MOTLEY FOOL Not So Marvelous : v " When investors see a brand-name company in what appears to be the bargain bin, they are often tempted to buy. 1 3: Consider Marvel Entertainment Group, . ... ""'- . "f 7 i . currently in Chapter 11 bankruptcy pro- I tection. At $1 and change per share, I Although stock, or "equity," represents a good part of a company's value, long-term debt also is an important piece. In Marvel's case, the company owes $500 million to lenders more than $5 a share. Every dollar of this debt has to be repaid before those who hold equity collect a dime. Given that Marvel lost $30.6 million this past quarter, savvy investors realize there's a good chance the equity has no value, despite the apparent "bargain" share price. Yes, occasionally 4., I" roughly the cost of a comic book, can't the numlf rf C"ll"Vi ft-""i4"in-iMi"1rr net C-Ir1ri J. mf mm oei up a personal portfolio man and the X-Men turn itself around? from Won't a little chump change up front be Motley Fool rewarded by an inevitable victory after see Page 10D the company rights itself? Although the VV Check local stocks and read the Mr atest financial npw; at Managed-care morass One woman gets sidetracked (often) in her trip through the managed-care system. Jane Bryant Quinn, 9D www.GoPBI.comYourMoney heroes do come along and save the day. But even with terrific assets, the odds are poor that shareholders will do well. price may entice, investors who don't look under the cover may find that the supervillain lurking there packs a nasty punch. R -WW'S p"? f'wwT' f i A (AW) Indian River Plantation owner changing again Atlantic Ocean y r Indian Sewall's River Point Chairman and Chief Executive Officer James Carreker said. "I think that Marriott (International) has very strong feelings about the opportunities with that property." However, executives of Patriot, Interstate and Marriott declined to say whether Marriott will assume management of the resort from Interstate. The changes will happen within three years after Patriot finalizes the Interstate By Kris Hudson Palm Beach Post Staff Writer , , STUART Just eight months after Interstate Hotels Co. bought the Indian River Plantation, Martin County's primary tourism draw is changing hands again. ; Dallas-based real estate investment trust Patriot American Hospitality announced this week that it will buy Pittsburgh-based Interstate in an intricate, $2.1 billion deal involving four companies. Marriott International will be allowed to take over management at 10 separate Interstate hotels. Though Patriot and Marriott reportedly have not yet decided which hotels will change flags, an executive involved in the deal said Wednesday that the Indian River Plantation will not be among them. "I'm almost positive that will remain a Marriott, based on conversations that have occurred to date," Wyndham Hotel Corp. Patriot hopes to finalize the deal by March. Among the provisions are two that could affect Indian River Plantation, a 297-room resort owned and managed by Interstate under a Marriott franchise. First, 10 unspecified Interstate hotels will change their franchises from Marriott to the more-exclusive Wyndham brand, which Patriot also is buying. In exchange for relinquishing those franchises, "First things first We need to actually complete the transaction," Patriot spokeswoman Suzanne Cottraux said. Interstate (NYSE: IHC: $35.88) purchased Indian River Plantation from its original developer, Radnor Corp., in April for $47 million. Patriot (NYSE: PAH: $31.50) is buying Wyndham in a $1.1 billion deal announced earlier. sallflsh 1 MUe t i, Point St. Lucie .,. Inlet Port Salerno MARK HEMPHILLStaff Artist; Takeover targets Able Telcom i ' sly- ' -' ' t ) " I ' , ; 1 ' 1 , ' . '' !" ';s; ,.. t-;i,;t ' ' , 1 rkP ' ..... ... , A A V ;' - ?- f ., : t d V - ' ' j ' dfciwiiiiiiiniriiii iiiwm niiiiii mini 'in li i iim ii immii imiii hi mi iiiiinliiiiiiiii iiiiii'iiiimihiwwihihiiiwumiiiihimiii mill iiniM i mumm .....v. Shut-down power plant may reopen By Michael Utley Palm Beach Post Staff Writer , i , WEST PALM BEACH - The owners of two shuttered power plants in western Palm Beach County are planning to reopen at least one of the plants, according to , a tentative agreement reached with creditors Wednesday in U.S. Bankruptcy Court. , The deal, which also gives secured creditors access to a $14 million reserve account, would allow the Okeelanta Co-generation Plant to resume operations as early as next month. "We are working very hard to make that happen," said Jorge Dominicis, a vice president with Palm Beach-based Flo-Sun Inc., one of the state's largest sugar cane growers and a member of two partnerships that own the power plants. i ; ;:The agreement, however, would not cure a default on $288 -million of tax-exempt bonds that were issued through the county in 1993 to finance construction of the power plants. The partnership's failure to make interest payments last summer triggered the largest municipal bond default in Florida history. Even though bondholders would get the $14 million, the bonds still are in default, said Bill Smith, an attorney representing the investors. The partnerships' May bankruptcy protection filing is considered an act of default, Smith said, and so is dipping into the reserve fund to pay bondholders. In addition, under Wednesday's agreement, about $3 million of the reserve will be loaned back to the partnerships at 8 percent interest, Smith said. That money will be added to a $2 million loan from Flo-Sun and U.S. Generating Co., which had been operating the plants, to cover certain maintenance, labor, disposal, and capital improvement costs. "Basically, we are putting money back in to protect the asset," said Smith, noting that the bondholders have the most money tied up in the power plants. The terms of the creditor agreement were submitted to U.S. Bankruptcy Court Judge Paul Hyman Wednesday, and a hearing date was set for Dec. 12. The terms cannot be carried out unless Hy- Please see PLANTS6Y) E.A. KENNEDY IllStaff Photographer Adlai and Patti Jourdin pay no rent for their apartment, but spend $2,000 a month they cannot account for. Couple must plug $2,000 hole A Missouri software developer offers $ 1 2 a share for the West Palm Beach communications firm. By John Murawski Palm Beach Post Staff Writer - WEST PALM BEACH - A Missouri-based technology conglomerate in the midst of an international acquisition spree: announced a surprise takeover bid Wednesday for Able Telcom Holding Corp. Applied Cellular Technology of Nixa,; Mo., is offering to buy all Able Telcom outstanding stock some 8.6 million shares at $12 a share. Able Telcom (Nasdaq: ABTE) stock closed at $9.69 Wednesday, up $1.31. Able Telcom, a. 1,150-employee West Palm Beach company, specializes in telecommunications-network installation and maintenance. Applied Cellular (Nasdaq: ACTC: $6),! with some 900 employees, previously; announced its intention to move its head-; quarters in February to Palm Beach,-transferring 50 to 100 people. The compa-I ny still plans to move if the Able Telcom deal falls through, a spokesman said. ; The acquisition is intended to further; diversify Applied Cellular's ever-widen- -ing interests, which have grown to in-' elude computer brokerage and engineer-! ing, vacuum and semiconductor manufac-; turing, wireless communications and computer leasing. Able Telcom chief financial officer Billy Ray did not return calls Wednesday. The company said in a statement that the takeover bid was made with no advance notice. It will be reviewed by its board of directors and financial advisers, who will act "in the best interest of all sharehold-ers." Applied Cellular's chairman and CEO, Richard Sullivan, is out of the country Please see ABLE TELC0MSZ) FINANCIAL MAKEOVEl By Tom Peeling Palm Beach Post Staff Writer What if your landlord or mortgage holder suddenly told you you could live scot-free? No more payments. Where would the money go? For Adlai and Patti Jourdin of Boynton Beach, that scenario is reality. Patti's job as a business manager for a real estate management company allows her and Adlai, her husband of one year, to live rent-free in their apartment off Lawrence Road. For the free rent, Patti handles leasing, rent collection, capital improvements and "takes the 2 a.m. phone calls" for 280 apartments. The Jourdins have put the money to good use the past two years by paying off $13,000 in credit card bills. They also bought a 1984 Mercedes in February with only an 18-month loan. With no housing payment, they can afford the $715-per-month car loan. Because they were paying off the credit cards, the couple has very little money saved. "It didn't make sense putting it in a savings account when we had the credit card debt," Patti said. Still, Adlai admits the lack of a safety net "does make me nervous." In addition to the free rent, Patti's job pays her $26,600 per year. Adlai's job as a marine construction superintendent for Marine Tech Services pays him $47,400 annually including a $1,000 bonus. But the future may be dramatically different. By 1999, Adlai says, the couple hopes to buy a home "in the $140,000 range." They also hope to start a family. On top of all this, Patti would like to quit her job to raise a child, and the couple would like to start investing some money for retirement. Is all this possible? Financial planner Gregory Ringdahl of Boynton Beach thinks it is. But some changes are in order. Ringdahl says the Jourdins have more than $2,000 per month of spending that's not accounted for. In order to meet their goals, the two need to evaluate more closely where the money is going. And cut back some. The three-nights-or-more-per-week restaurant visits will have to stop. And the Jourdins may have to scale back on the size of the home they want. But Ringdahl says paying off the credit cards is evidence they can accomplish goals they set. The key, Ringdahl says, is "can they stick to that discipline?" Today's family Adlai, 36, and Patti, 27, Jourdin of Boynton Beach. Married, no children Their goals To pay off auto loan, buy a home, have a child within one to two years and save for retirement. Patti also would like to quit work to take care of their child. Recommendations for the Jourdins, 6D Market closed at 8,032.01, up 13.18 Minute by minute NuCo2 execs tell its shareholders there's a plan for profits in 1998 8080 1 " i I1 1 i i l I - I 8060 7"Vj 8040 J 8020 B000 VV- J 7980 j'N-r . u f"s." ." .j. '3 ... -j.-.. . .. f s-it.'& f'Sv ..... ,.-.-"-' "5 " " v MA W ;, 7960 '""T"r"" r ri v""- 'I" i"" 'i 10 11 12 1 2 3 4 a.m. p.m. Dow; week by week 8200! M ,., . PAUL J. MILETTEStaff Photographer , (From left) NuCo2 Chief Financial Officer Joann Sabatino, President Joseph ' Criscuolo and CEO Edward Sellian tell investors that the key is acquisition. By Kris Hudson Palm Beach Post Staff Writer STUART Executives of NuCo2 told shareholders Wednesday that the carbon dioxide supplier would complete the first stage of its national expansion and begin recording profits by late 1998. But for that to happen, NuCo2 President Joseph Criscuolo said, the company must continue buying rival suppliers in new markets. In turn, those acquisitions will allow NuCo2 to boost its current total of 52 service depots and add more-profitable "backfill" accounts in the areas the depots serve. Stuart-based NuCo2 supplies bulk carbon dioxide systems and liquid carbon dioxide for use in dispensing fountain drinks. ,. "The goal here is to expand, to have service in as many states as we tan quickly," Criscuolo told an audience of about 30 at the company's annual meeting at Indian River Plantation Marriott Resort in Stuart. "What we're looking at is our ability to get to the count of 70 to 75 depots. At that point, we will have service in every major metropolitan area in the country." Criscuolo's comment came in response to questions from a handful of shareholders who noted that the 7-year-old company's stock (Nasdaq: NUCO: $11.75) dipped to $11.25 on Monday, just 25 cents above its 52-week low. The stock has progressively fallen from the 52-week high of $19.25 it recorded in July. Jeff Musser, a research vice president with Raymond James & Associates in St. Petersburg, said NuCo2's stock woes have more to do with volatile domestic and global investment markets than the company's progress. In unstable" times, institutional investors usually neglect the 7400- V ,.. -. ' I 7200- f . ' 7000 1 i r t i 1 1 'I' T "" I"' stocks of small companies with no immediate dividend potential, he said. Meanwhile, NuCo2 has signed 11,172 new customers through acquisitions or recruitment in its financial year ending June 30. The additions swelled the company's total to 26,934 accounts. The cost of those acquisitions topped $18.1 million in the 1997 financial year, and the company intends to spend $20 million to $30 million buying competi-; tors this year, securities filings show. Despite the costs, the company posted' net earnings of $527,000 on sales of $18.9 ; million last year. In the first quarter of NuCo2's 1998 : financial year, the company recorded a net loss of $310,909 on sales of $7.1 million, : spent almost $12.8 million on acquisitions ' and added 4,900 accounts. ' I 9-4 9-18 10-2 10-16 10-30 11-13 11-27 ' Breaks Indicate market holidays. Opening price does not have to match the tlosing price from the day before. Opening price . can reflect trading and news that occurs after ' the market closes. Hontever, market change is measured from close to close.