The Morning Call from Allentown, Pennsylvania • 27

THE MORNING CALL THURSDAY, APRIL 17, 1997 in) B7 (r, ii 90 of (WJl business news, AP Business Barometer on Call Info-tel 610-821-8300, Category 8697. STOCK QUOTES 610-821-8300, Category 7800 Update AuBeuDtowGD weds IN IKE RESIGN mm i 1 4 to "Sain) DirDto it Sun X7 r-fs A crew films the audience as First Generation Productions co-owner William Carmody talks at podium during news conference. The company is completing a $2.2 million project to buy, renovate and equip the former Starz Nightclub in East Allentown. By ELLIOT GROSSMAN Of The Morning Call With its move to the former Starz Nightclub in East Allen-town, a video production company is hoping to attract out-of-town business using one of the largest independent video studios on the East Coast. First Generation Productions, formerly of South Allen-town, is nearing the end of a $2.2 million project to buy, renovate and equip the building in the Allentown Industrial Park.

On Wednesday, co-owners William Carmody and Michael Skilton showed off their facility with a studio large enough to park and photograph two Mack Trucks in it. Mack Trucks, Rodale Press and Binney Smith are among First Generation's major clients. Mi 'v if" it- -5 ROB UPTON Special to The Morning Call Please See STUDIO Page B9 Quigley Corp. of Doylestown said Wednesday that it had first-quarter sales of more than $20 million for its COLD-EEZE lozenge, compared with sales of $4.1 million for the fourth quarter of 1 996. Net income wasn't released.

Bie ihU Capstar Broadcasting Partners said in a written statement Wednesday it intends to buy Patterson Broadcasting in a transaction valued at about $21 5 million. The Dyson Kissner Moran a private investment company headquartered in New York, is the "majority shareholder in Patterson Broadcasting. Completion of the transaction, subject to Federal Communications Commission approval, is expected to occur next year. Capstar, which owns WAEB AM, WZZO and B-104, will buy 36 middle-market stations, one in Allen-town and the others in Harrisburg; Honolulu; Savannah, Battle Creek and Grand Rapids, Pensacola, Springfield, Fresno, Reno, Nev. The company's public relations person did not return calls yesterday.

COMPANIES Pegasus Communications Corp. said Wednesday it plans to buy 10 independent DirecTv providers collectively serving about 25,000 subscribers for $47.6 million in cash and $700,000 in stock. Pegasus, of Randor, Delaware County, said the acquired territories comprise in excess of 300,000 television households in 1 7 states. The acquisitions, one of which has been completed, will increase Pegasus' exclusive DirecTv territory to 1.7 million TV households serving about 80,000 satellite subscribers in 24 states. DirecTv of El Segundo, provides programming for satellite-delivered television.

It is a unit of General Motors Corp. Apple Computer Inc. reported surprisingly steep losses Wednesday after sales plunged 27 percent in the January-March quarter and the company set aside money to pay for a sweeping revamp. Rather than focus on the dismal losses, Apple said the high points of the quarter were steps it took to cut its costs and buy Next Software Inc. to turn its fortunes around.

Apple's latest results included a previously announced charge of $1 55 million mostly to cover the elimination of 4,100 full-time and part-time positions 30 percent of its work force as part of its attempt to survive as a smaller, more focused company. Coleman the camping gear maker, announced it will eliminate 700 jobs to cut costs and boost competitiveness. The company also said it would return its largest unit to Wichita, where the company began in 1 900. It had moved to Golden, in 1995. In an announcement Tuesday, Coleman said it would eliminate about 1 0 percent of its work force of 7,000 as part of a strategy to reduce costs and improve competitiveness.

The company also will close three domestic factories and a factory in Geneva, Switzerland, and revamp its product lines. It will announce who will be laid off and what domestic companies will be closed later, said James Conroy, a spokesman for principal owner Ronald Perelman's holding company, Mc Andrews Forbes in New York. Ford Motor first-quarter earnings more than doubled to well above expectations as the automaker 011 IF" 4 il If l-L 7 I repoirts earnings increas Operating income for first quarter increased 16 percent over same period of 1996. Sovereign Bancorp parent company of Sovereign Bank, announced on Wednesday that operating income for the first quarter reached $19.9 million, an increase of 16 percent from first quarter 1996 earnings of $17.2 million. Operating income per share was 25 cents per share, up 14 percent over the 22 cents per share earnings reported for the first quarter of 1996.

In February, Sovereign acquired First State, a $603 million savings bank with 14 branch offices throughout New Jersey. The one-time, merger-related charge of $10.7 million related to Sovereign's acquisition of First State resulted in a net income slide to $9.2 million. Earnings per share dropped to 12 cents. Net interest income which repre- Please See SOVEREIGN Page B8 SOVEREIGN BANCORP, INC. CATHERINE MEREDITH The Morning Call Henry F.

Kramer, Quakertown plant manager, holds masking tape samples in company's finishing room. Acquisitions key to FiBxsrMa7k Stock smbo SVRN )triangeASDAQ 1 qtr. 1 qtr. ended ended 33197 33196 Change Net interest income (millions) 61 .7 $56.8 9 Net income (millions) 9.2 S17.2 -47 Earningsshare $0.12 $0.22 -45 President Alex Kwader hopes to boost revenue to $500 million by year 2000. subsidiary of CPG Investors and Arcon Coating Mills.

Through those and other acquisitions, the company's sales have jumped to about $240 million a year from $89 million in 1993, Kwader said. Locally, FiberMark owns the former Endura Products Plant at 45 N. 4th St. in Quakertown. The company purchased Endura under its old name, Specialty Paperboard from W.R.

Grace in 1994. The Quakertown plant manufactures office products like notebook and report covers, and durable specialties like masking tapes and blue jeans labels. Corporate Communications Manager Janice Warren said Fiber-Mark's purchase of Endura began the company's push to increase revenues through acquisitions. "The acquisition of Endura was an example of that," Warren said. "That was really the first one." The company is looking to buy paper mills and businesses that convert paper into other products in the $20 million to $100 million annual sales range, he said.

FiberMark has 10 facilities, a combination of paper mills and other plants that make file folders, report covers, industrial filters and electrical transformer insulation. FiberMark is expected to earn $2.63 a share in 1997, based on the average estimate of four analysts polled by IBES International Inc. "Both of the acquisitions we closed in October are going to help earnings significantly," Kwader said. "The range for the year is about $2.50 to $2.75 a share, and we're comfortable with those ranges." Summit Bancorp profits reach $83.2 million The 85-cent-a-share mark is just shy of what Wall Street analysts had expected. Summit Bancorp report NEW YORK (Bloomberg) Fi-berMark Inc.

President and Chief Executive Alex Kwader said acquisitions will be the key to boosting the company's revenue to $500 million by the end of this decade. Last year, the Brattleboro, maker of specialty fiber-based materials earned $7.2 million, or $1.79 a share, on sales of $124.8 million. "We have our eye on reaching a target of $500 million on the top line and a commensurate increase in growth on the bottom line," Kwader told the Bloomberg Forum. FiberMark acquired two closely held companies in October that will add about $115 million in annual revenue Custom Papers Group, a reaped the benefits of lower costs and strong demand for new products such as its Expedition sport utility vehicle. Ford earned $1 .5 billion, or $1 .20 a fully diluted share, up from $653 million, or 532 cents, in the year-earlier quarter.

Analysts had expected earnings of 87 cents a share, the average estimate in a survey by First Call Corp. Industrial output surged 0.9 percent in March, straining the capacity of the nation's factories, mines and utilities to maintain production without inflationary bottlenecks developing. The increase, nearly double what economists anticipated, brought the industrial operating rate to 84.1 percent up from 83.6 percent in February and the highest level in two years, the Federal Reserve said today. As a rule of thumb, economists believe an operating rate of around 85 percent is a sign of inflationary strains in the production pipeline. From staff and wire reports Dow rallies third day; broad market struggles The Dow Jones industrial average wiped out another chunk of its recent slide Wednesday, but investors remained too fretful about inflation and interest rates to bet on anything but big companies.

The Nasdaq market sagged again as the battered technology and small-company sectors continued to struggle. The Dow, which had slid nearly 700 points in one month before this week's rally, rose 92.71 to 6,679.87, bringing its three-session rebound to 288 points. I "This appears to be a very narrow, but very powerful buying frenzy in the biggest of the bigs and the blue-est of the blues. If you're not in that exclusive Jclub, you're probably not doing so well today," said Robert Streed, senior investment adviser at Northern Trust in Chicago, calling the rally unconvincing. The rebound "may just turn out to be a bounce off the lows.

The lack of volume and the lack of breadth makes me wonder if this rally is sustainable," Streed said. "What you want to see is evidence people are saying, 'Here's some bargains and I want in big The Dow's advance was led by Philip Morris, which jumped 4 to 43 on news that the cigarette maker is holding preliminary talks over a settlement that would absolve the tobacco industry of liability for smoking-related health problems. RJR Nabisco's shares rose 3V4 to 33 in active trading the New York Stock Exchange. Stocks were initially pulled lower by a weak start in the bond market, which fell on news that industrial output surged 0.9 percent in March, straining the capacity of the nation's factories, mines and utilities to maintain production without inflationary bottlenecks developing. The Federal Reserve, which recently raised one of its key lending rates to slow borrowing and spending, has been concerned that companies will need to raise prices so they can pay higher wages and hire more workers as they scramble to keep up with demand.

While most investors expect the central bank to raise its rates at least once more, many are afraid the Fed will tighten credit repeatedly, hurting company profits. As bond prices fell, the yield on the 30-year Treasury bond a key detenninant of borrowing costs rose from late Tuesday's 7.09 percent to as high as 7.15 percent, before pulling back to 7.09 percent. On Monday, the long-bond yield rose to a nine-month nigh of 7.17 percent. Advancing issues outnumbered decliners by a 4-to-3 margin on the NYSE, where volume totaled 498.82 million shares as of 4 p.m., almost even with Tuesday's pace. ed on Wednesday that first quarter earnings increased 22 percent.

The bank reported that profits from operations reached $83.2 million or 85 cents a share, up from $67.7 million, or 72 cents per share, a year earlier. Summit's profit was 2 cents shy of the 87 cents Wall Street expected, according to an IBES International Inc. poll of eight analysts. SSJiff OLT fBcillsic QtrticSilTiS A charge of $16.7 million for Sum record. profits in first qosrter mit's March 1 purchase of BMJ Financial another New Jersey bank holding company, made net income $66.5 million.

A year earlier. Summit's $69.98 mil- lion in charges from three other acquisi South Whitehall-based bank last month showed assets of $224.6 million. The rise is 41 percent over the same period of 1 996. tions caused a $2.24 million loss. Net income interest the money a bank makes on loans and investments less the money it pays on deposits jumped 6.2 percent to $240.1 million for the first quarter compared to 522b.u mu-lion for the same period last year.

Ambassador Bank of the Commonwealth on Wednesday reported record first-quarter profits of $427,000. an increase of 41 percent over earnings of S304.000 for the SUMMIT BANCORP AMBASSADOR BANK OF THE COMMONWEALTH 1 qtr. 1 qtr. ended ended 33197 33196 Change Net interest income (thousands) 1,953 1.463 3 Net income (thousands) $427 304 40 Earnings share S025 S018 39 loans and investments less the money it pays on deposits was $1.95 million, up 34 percent for the same quarter last year. On March 31, the South WTiitehall-based bank showed total assets of $224.6 million, a 29 percent increase over $174.4 million reported in March 1996.

Deposits showed the same percentage increase, jumping to $194.2 million from $150.8 million during the same quarter last year. Net loans were $143.5 million, up 38 percent from $103.7 million reported in March 1996. President Timothy J. McDonald said the results reflect an expanded customer base. "We continue to be satisfied with our earnings trend and are particularly so when considering the continued rate of growth," McDonald said.

Ambassador has six Lehigh Valley offices. The state Department of Banking is reviewing the bank's application for a merger conversion, which would make the 82-year-old Wilbur Savings and Loan Association in downtown Bethlehem part of Ambassador. 1 Strv-fc svmho' SUB ExrhanQg NYSE 1 qtr. 1 qtr. ended ended 33197 3 31 96 Change Net interest income (millions) $2401 $226 0 6 2 Net income (miihoos) $66 5 MM.

Earnings share $0 68 $-0 04 NM same quarter 1996. Earnings per share bounced to 25 cents per share from 18 cents per share. Net interest income the monev a bank earns on i Not meaningful. Please See STOCKS Page 1 2.