Executive Business Briefing

Here is a look at more of Wednesday's top business stories:

Earnings rise at Krispy Kreme

WINSTON-SALEM, N.C., May 28 (UPI) -- Krispy Kreme Doughnuts Inc. said its fiscal first-quarter net income surged 48 percent, thanks to strong sales, and the company predicted solid growth for the full year.

The doughnut maker said its first-quarter net income for the period ended May 4 jumped to $13.1 million, or 22 cents a share, from $8.9 million, or 15 cents a share during the same period a year earlier.

The company noted its latest results included reversal of a $500,000 accrual related to an arbitration award against the company. Excluding that item, the company earned $12.8 million, or 21 cents a share.

In March, Krispy Kreme said it expected to earn 20 cents a share in the first quarter.

Revenue, including sales from company stores, franchise operations, and the company's manufacturing and distribution operations, climbed 34 percent to $148.7 million from $111.1 million a year ago.

System-wide sales, which include sales of company and franchise stores, jumped 24 percent to $227.8 million. System-wide sales for stores open more than a year grew 11 percent.

Despite a challenging environment for most retail businesses, Krispy Kreme said its business momentum continues.

Looking ahead, the doughnut maker said it expects to earn 90 cents a share for fiscal 2004. That would be 2 cents above Wall Street's estimate, according to Thomson First Call.

Krispy Kreme also projected earnings of 20 cents a share in the second quarter, 22 cents a share in the third quarter and 26 cents a share in the fourth quarter.

For fiscal 2003, the company recorded net income of $33.5 million, or 56 cents a share. Excluding a $5.7 million charge related to the arbitration award against it, Krispy Kreme earned $39.1 million, or 66 cents a share.

During the first quarter, Krispy Kreme opened six stores, and added six more after the quarter ended, bringing its total to 288 stores in 38 states and Canada.

Jacobs Engineering receives new contracts

PASADENA, Calif., May 28 (UPI) -- Jacobs Engineering Group Inc. said it has received contracts to provide construction management services for the U.S. General Services Administration and the St. Louis Cardinals.

Jacobs said it agreed to perform design and construction reviews, as well as value engineering services during the pre-construction phases of the $150 million federal courthouse project in San Diego. The company agreed to manage the development of the design-build solicitation document for the GSA.

Jacobs also received a GSA contract to provide construction management services for new federal courthouses in Florida. The company said the design and construction cost of these projects is between $34 million and $170 million.

In addition, Jacobs agreed to set up and manage the overall project control system for the St. Louis Cardinals ballpark, which is to open at the start of the 2006 baseball season.

Jacobs, which had $4.56 billion in revenue for the year ended Sept. 30, provides technical, professional, and construction services.

Conmed expects bond refinancing to add to earnings

UTICA, N.Y., May 28 (UPI) -- Conmed Corp. said it plans to refinance its 9 percent senior subordinated bonds due in 2008 and expects the action will add 10 cents a share to its annual earnings.

Analysts on Wall Street expect the company to post a 2003 net income of $1.48 a share, according to Thomson First Call. Conmed earned $1.23 a year ago.

Conmed said the bonds are callable at premium over par of 4.5 percent and expects to incur a pretax charge of about $5 million for the call premium.

The medical technology company also said it intends to refinance the bonds with the proceeds from a planned senior term loan expansion of up to $165 million. Conmed expects the debt to carry an interest cost of 2.75 percent over London interbank offered rate for a current expected all-in-rate of 4.05 percent.

The rate compares favorably with the bonds' 9 percent interest cost. Conmed estimates it can save $5 million a year in interest expenses if the 90-day Libor rate remains at its current level of about 1.3 percent.

Conmed said it expects to complete the term loan expansion early in the third quarter and plans to use proceeds to payoff the $112.7 million of 9 percent bonds outstanding and fund the $5 million call premium.

The company will also use proceeds to pay off $47.3 million in debt from the acquisition of Bionx Implants Inc. in March and the $15 million bonds refunding earlier this month.

Additionally, Conmed plans to write-off about $2 million in pretax unamortized deferred financing fees associated with bonds.

Upon payment of the bonds, the company expects its debt will consist of $100 million in revolving credit facility, $264.5 million in term loan and about $22 million in other loans.