Daily Record from Morristown, New Jersey • 15

BUSINESS SECTION HOW TO REACH US BUSINESS EDITOR: Kathy Shwiff (973) 428-6650 businessdailyrecord.com Stocks B2-3 Mutual Funds B3 Comics B4 TUESDAY, APRIL 9, 2002 WWW.DAILYRECORD.COM DAILY RECORD, MORRIS COUNTY midlsirssini fin cr' 0 1 plbs Enron scandal has cost auditor many clients IN BRIEF Verizon Wireless sues over licenses WASHINGTON (Bloomberg) Verizon Wireless, based in Bed-minster, sued the federal government to cancel an $8.7 billion agreement to buy wireless licenses. The carrier, in a filing, asked the U.S. Court of Federal Claims to force the government to return the remaining $261 million of a $1.7 billion down payment for the licenses and compensate the company for lost interest while the Federal Communications Commission held the money. Global Crossing adds three directors LOS ANGELES (AP) Global Crossing named three outside directors to its board Monday, seeking to bring some independence to the troubled network operator under scrutiny by federal investigators, lawmakers and dozens of potential bidders. The company, which has its U.S.

headquarters in Madison, also said former Secretary of Defense William Cohen had quit the board. Wyeth opens two Singapore factories SINGAPORE (AP) U.S. pharmaceutical and health care products giant Wyeth opened two new factories in Singapore on Monday, boosting the country's campaign to develop its life sciences industry. The plants, which cost $300 million to build, represent Madison-based Wyeth's largest investment in Asia, a company executive said. The new factories make hormone replacements for women, baby formula and other children's nutritional products.

DAWN BENKO DAILY RECORD Foods president and chief executive David L. Wenner says the Parsippany-based company has to capitalize -on advertising by its rivals because lacks sufficient funds to promote its 15 different labels. Small food company grows by acquiring orphan brands BY DAVE CARPENTER ASSOCIATED PRESS CHICAGO Staggered by a rapid loss of clients because of ita role in the Enron scandal, Arthur Andersen announced Monday that it is laying off about 7,000 employees, or more than a quarter of its U.S. work force. The layoffs, which Andersen had warned last month were inevitable, come with the firm's reputation in tatters, its overseas network fast disintegrating and more U.S.

companies replacing it daily as their auditor. Andersen said the layoffs will take place during the next several months. Its audit practice and administrative services will bear the brunt of the personnel cuts from among its 26,000 U.S. employees. The 89-year-old firm employs about 5,300 people at its headquarters in downtown Chicago, where heavy layoffs are expected.

"No one can believe this is happening," said Mimosa Unno, 22, who works in the audit division in Chicago. The company said no breakout of planned cuts was available. Employees in Chicago were told in an e-mail to check their voice mail Monday night to learn if they should report to work today. Andersen said cutbacks were "one of the many consequences of the events of the last month" and come despite efforts to avoid them. "Of all the issues we have confronted recently, none compare to the actions we are now forced to take with our employees," said Larry Gorrell, managing partner of Andersen's U.S.

operations. "This decision is even more painful in light of the loyalty, commitment and the hard work that our employees have demonstrated during this difficult time." Other measures Other, unspecified measures also are being taken to reduce expenditures, Gorrell said. Since its audit client Enron Corp. went bankrupt in December, Andersen has been hit -by a barrage of lawsuits by Enron shareholders and creditors. It also has lost dozens of blue-chip corporations as clients and at least 10 overseas affiliates have bolted to rival firms the latest being its Norwegian partners, who announced Monday that they are merging with Ernst Young.

Auditor Trak, a unit of Atlanta-based Strafford Publications, said Monday that Andersen has lost 145 public audit clients this year. IN MORRIS Foods What company does: Packages food under 15 different labels, including baked beans, Polaner jellies and jams, Emeril's spices and pasta sauces, and Regina vinegars. Locations: Headquarters in Parsippany in a former Nabisco office; five manufacturing plants from Louisiana to Maine, including one In Roseland; and several other distribution centers. History: Several of Its product lines date to the 19th century, including Underwood meat spreads, believed to be the oldest existing food trademark at 132 years old. Product lines have been passed among numerous owners.

comes from Bloch Guggenheimer, a New York company founded in 1886. The company in Its current form was created by a leveraged buyout engineered in 1996 by the New York investment firm of Bruck-mann, Rosser, Sherrill Co. Bottom line: The company is not publicly held, but it files financial reports with the Securities and Exchange Commission because its bonds are traded on open markets. Revenues of $332.4 million in 2001 were down 5.4 percent from 2000, but there was a $6 million profit compared with a $1.3 million loss a year ago. Staff: About 650 employees, including 65 in the Parsippany head office who handle administrative, sales and marketing functions.

Web site: www.bgfoods.com. Foods, based in Parsippany, piggybacks on demand built by rivals BY TIM O'REILEY DAILY RECORD PARSIPPANY David L. Wenner voices an odd complaint about one of his major rivals: It is not rolling out enough new products. As president and chief executive of Foods, Wenner saw sales of his second-largest label, Polaner jams and jellies, fall 8.5 percent last year, partly because of internal marketing cutbacks. But he spreads some of the blame to Smucker's, by far the category leader, for becoming complacent.

"My frustration is that Smucker's isn't letting people know why they should eat these products as opposed to cream cheese," Wenner said. "They are the 800-pound gorilla, and they need to come up with something exciting." While reaching supermarket shelves after Polaner with the latest innovation fruit-only jams with higher fruit content and fewer calories than regular preserves Smucker's says it has renewed its product line to suit changing consumer tastes and has put marketing muscle behind it. "We feel it is very important to support not only our brands but the category in general," said Steven J. Ellcessor, chief financial officer of J.M. Smucker Co.

in Orrville, Ohio. The most visible proof of that, he added, is a 4 percent increase in Smucker's sales for the nine months ending Jan. 31. No matter who is right, the situation highlights the central paradox facing Parsippany-based as it tries to carve out a profitable niche as a boutique in the food processing industry It has more than doubled sales in the past five years by acquiring "orphan brands," which generate sales so small that they are neglected in larger companies, and lavishing attention on them. However, because the individual labels cast such low profiles none of 15 labels has more than a 7 percent nationwide market share in its category and some have less than 1 percent, according to the research firm Information Resources the company cannot afford the huge advertising campaigns so essential to industry heavyweights, such as Smucker's and Kraft Foods.

As a result, must try to piggyback on the demand created by competitors. Perhaps the most vivid example of what is known as guerrilla marketing came during the Super Bowl this year in New Orleans. Emeril Lagasse, the celebrity chef from Louisiana, was the centerpiece of a promotion by Coca-Cola and Kraft. Because Lagasse also is the public face of Emeril's seasonings, salad dressings and pasta sauce made by Wenner said, Levi Strauss ready to tighten its belt Company to shutter six plants, cut 3,600 jobs across country The IRS recommends reviewing your entire tax return to be sure it is accurate and complete. Even a simple mistake can cause problems with your tax return, which might lead to delays in processing your return and receiving your refund.

For information, go online to www.dailyrecord.com. $400 Markets Monday CLOSE 10,249 NYSE leave only two plants open in the United States for the 149-year-old company that has symbolized the pioneering American spirit since the Gold Rush days, when its blue denim jeans were worn by miners. In June, the company will close plants in San Francisco and Blue Ridge, in August, plants in Brownsville and San Benito, Texas; and in October, plants in Powell, and El Paso, Texas. The privately held company said it will continue to operate a sewing plant and a finishing center in San Antonio, though it will cut about 300 jobs there, too. Levi Strauss employs 16,600 people overall.

A poor sales start this year put Levi's on track for its sixth consecutive year of declining revenue. The privately held, San Francisco-based company's sales totaled $935.3 million for the three months ended Feb. 24, a 6 percent decline from a year earlier. 0.88 CLOSE 592 his marketing forces tried to "glom on to the Coke and Kraft campaign" by putting up displays next to official Super Bowl counterparts whereever possible. The other factor affecting strategy is its status as a leveraged buyout company.

With a leveraged buyout, the purchasers use a small amount of their cash and borrow the rest to come up with the purchase price rather than spending money in hand. Then, the loans are paid off from the cash flow from operations. The New York investment firm of Bruckmann, Rosser, Sherrill Co. created the company in late 19 by acquiring Bloch Guggenheimer, the source of the name and a New York institution for its pickles, relishes and peppers, and Burns Ricker for an undisclosed price. SAN FRANCISCO (AP) Levi Strauss whose jeans are an ail-American symbol, said Monday that it is closing six U.S.

plants and eliminating 3,600 jobs, or 22 percent of its work force, as it mqves away from the business of making the clothes it sells. The company, whose sales have been sagging, has said it wants to concentrate more on marketing its clothes. "There is no question that we must move away from owned-and-operated plants in the U.S. to remain competitive in our industry," chief executive Philip Marineau said. Since 1997, the company had closed 24 North American plants, shifting the work to cheaper overseas manufacturers and laying off about 13,000 employees.

The latest closings, also shifting work overseas. NASDAQ OA CLOSE 1.786 1 0411011 ui miuicmai. u. t. 1 3o0 -fjTTl -3cr 250 Lg332g $6 1 5 Net Income I nly 4v i (In millions) 2 $6.0 T- :2 I AM EX 5.84 CLOSE 904 2.56 CLOSE 1,125 1999 1998 2000 2001 NYSE Diary Advances: 1,836 Declines: 1,331 Unchanged: 173 Total issues: 3,340 Total volume: 1,338,494,660 1997 Source: Company reports BLAINE TURNER DAILY RECORD SEE COMPANY B3 Balanced funds can straighten up messy portfolios Some real smart I know regard balanced funds with the con years.

Dodge Cox Income has returned 7.93 percent a year. Taking 60 percent of the first and 40 percent of the second gives us 12.94 percent. During that time, Dodge Cox Balanced has returned 13.26 percent. Granted, these differences in returns are small. But at least you're not paying extra for the convenience of owning a single fund that might straighten out your portfolio.

tempt they reserve for people who keep all their money in CDs or passbook savings accounts. How common! How unsophisti Money rates Prime lending 4.75 Fed discount 1.25 Federal funds 175 Mortgages 3C-yearT5ied(NJ.) 7.20 15r fixed (NJ.) 6.64 1-year adjustable (N 5.38 1-year index 2.64 Auto loans (N.J.) Syearnewcar 7.73 4-year new car 7.75 3yBar used car 8.93 4-year used car 8.82 Money market funds Money mutual funds 137 Banks. 107 Treasury security rates 3nontr) T-bill discount 1.710 frmonth T-blll discount 1.975 lOyearnote 5.26 Exchange rates Dollar In yen $131.46 Gold (ounce) $300.50 Sources: HSH Associates, Moneyllne Telerate, IBCDonoghue's Money Fund Report. Bank Rate Monitor, Associated Press a separate stock fund and a separate bond fund. Often, when I examine the portfolios of various people I meet, I'm horrified.

I see so many messy portfolios; full of this, that and the other thing. Or I see undiversified portfolios. Adding just one balanced fund to either of these miserable portolios could be.a perfect antidote, like tossing a life preserver to someone drowning. Vanguard Balanced Index Fund keeps 60 percent in stocks and 40 percent in bonds. So, would you have been better off buying Vanguard Total Stock Index and Vanguard ON MONEY can readily name a good number of balanced funds where the managers seem equally adept at buying both stocks and bonds.

Now, for a balanced fund's virtues: The manager can decide whether stocks or bonds are the better buy at any point in time and move toward one or the other. Can, or would, the average investor do this? The manager of one balanced fund isn't forced to keep as much of his or her assets in cash (to pay shareholders who depart) as would the managers of The case against balanced funds: 1. If the stocks or bonds in such funds lose money, you may not be able to sell them for a loss because the other component may be showing a profit. 2. You're doubling up.

Instead of choosing a fine stock fund along with a fine bond fund, you're locked into just one fund, and the manager's stock-picking prowess may not be up to his or her bond-picking prowess (and vice versa). With regard to objection 1, let's hope that you can find a fund that doesn't lose money on its stocks or bonds. As for objection 2, 1 Total Bond Index or just Vanguard Balanced Index? During the past five years, Vanguard Total Stock Index has returned 7.89 percent a year. Vanguard Total Bond Index has returned 7.58 percent a year. Taking 60 percent of the first and 40 percent of the second, we get 4.734 percent and 3.032 percent, for a total of 7.766 percent.

Vanguard Balanced Index has returned 8.23 Another test: Dodge Cox Balanced is a roughly 60-40 split between Dodge Cox Stock and Dodge Cox Income. Dodge Cox Stock has returned 16.28 percent a year during 10 WARREN B0R0S0N cated! But balanced funds those that keep 50 percent to 60 percent of their assets in stocks and 40 percent to 50 percent in bonds have virtues that have long gone unsung. Boroson on Money appears Tuesdays. Fridays and Sundays. Warren Boroson can be reached at (973) 428-6647 or wboroson gannett.com.

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