Executive Business Briefing

Aug. 2, 2002 at 12:37 PM
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Here is a look at more of Friday's top business stories:

Stanley Works withdraws re-incorporation plans

NEW BRITAIN, Conn., Aug. 2 (UPI) -- Toolmaker Stanley Works said it has dropped its plan to re-incorporate in Bermuda.

Stanley said it withdrew the proposal, announced in February, saying pending Congressional reforms would eliminate the need to move to the offshore tax haven.

The Stanley plan drew fire from lawmakers, shareholders, labor groups and officials in Connecticut, where it has been headquartered for 159 years.

State Attorney General Richard Blumenthal had filed suit against Stanley to block the move, alleging irregularities in May's shareholder vote on the matter.

Stanley, headquartered since 1843 in New Britain, planned to join a growing number of U.S. firms that have registered their corporate names in Bermuda to lower taxes.

When it proposed the change, the tool producer said the move would save $30 million a year in taxes.

Other U.S. companies that have re-based to Bermuda include Ingersoll-Rand Co. Ltd., Cooper Industries Inc., Tyco International Ltd. and driller Nabors Industries Inc.

John Trani, chairman and chief executive officer said: "Our ability to compete is being undermined by the U.S. tax code, which is archaic in today's global market, putting U.S. companies that compete globally in an untenable position.

"Not only are we disadvantaged against our foreign competitors, but two of our major U.S. competitors, Cooper Industries and Ingersoll-Rand Company, have a significant advantage over Stanley Works because they have already reincorporated," he said.

"We have been asked by the Congressional leadership on both sides of the aisle to support their efforts toward rectifying this situation by enacting legislation that will create a level playing field for companies incorporated in the U.S.

"We have honored their request, and the ball is now in their court. We sincerely hope that Congress will agree to a solution. Ignoring this problem will not make it go away but can only accelerate the trend of fewer U.S. headquartered companies," Trani said.

Stanley also said the decision not to re-incorporate would have no effect on previous earnings guidance.

The company said it still expects third-quarter earnings of 71 to 73 cents a share, an improvement of 15 percent to 18 percent over the 62 cents earned in the third quarter of last year.

Wachovia buys Cameron M. Harris & Co.

CHARLOTTE, N.C., Aug. 2 (UPI) -- Wachovia Corp. said it has reached a definitive agreement to acquire Cameron M. Harris & Co., a Charlotte-based insurance broker that specializes in commercial and personal risk management and employee benefits.

Terms of the deal were not disclosed.

With $27 million in revenues, Cameron M. Harris & Co. is the largest privately held insurance broker headquartered in the Carolinas and ranks in the top 50 brokers in the U.S.

The company has offices in Charlotte and Raleigh in North Carolina and in Columbia, South Carolina.

Ken Thompson, president and chief executive officer of Wachovia, said: "Insurance is a key component to the financial services industry. It is imperative that Wachovia have a strong insurance presence in the Carolinas, and the acquisition of Cameron M. Harris & Co. will complement our growth in this dynamic industry."

GE Industrial buys a unit of TRW

PLAINVILLE, Conn., Aug. 2 (UPI) -- GE Industrial Systems, a division of General Electric Co., said it has signed an agreement to acquire a subsidiary of defense contractor TRW Inc. that specializes in pressure-sensing technology.

The GE division, which provides industrial equipment, systems and services, did not disclose terms of the deal, which is expected to close in the third quarter.

The TRW unit, NovaSensor, develops technologies for microstructure design and production for the automotive, medical and consumer industries. It will become part of the GE Measurement & Sensing Technologies business.

GE Industrial Systems President and Chief Executive Lloyd Trotter said NovaSensor, which specializes in pressure sensing, complements recent acquisitions, including the sensing business of Spirent Plc and Druck Holdings Plc.

Dan River posts profit

DANVILLE, Va., Aug. 2 (UPI) -- Dan River Inc., a maker of apparel fabrics and home linens, said it posted a second- quarter profit compared with a loss last year.

The company said it posted a net income of $3.7 million, or 17 cents a share, compared with a loss of $6.1 million, or 28 cents a share during the same period last year.

Sales fell to $153.9 million from $161.9 million a year. Costs declined to $123.9 million from $144.5 million.

J.L. Lanier, Jr., chairman and chief executive officer, said: "We are pleased to report better than expected net income and earnings per share for a second consecutive quarter.

"Our profit improvement came as a result of better manufacturing performance from increased capacity utilization, lower raw material costs, and an improved product mix compared to the second quarter of last year. The sales volume decline in the second quarter of 2002, compared to the same quarter a year ago, was mostly due to lower sales in our home fashions segment," he said.

"The decline in home fashions sales was due primarily to the fact that the second quarter of 2001 included the rollout of a large juvenile program, whereas the second quarter of 2002 had no such introduction. Additionally, sluggish consumer demand and the absence of aggressive inventory reduction efforts contributed to the lower sales in this year's second quarter," Lanier added.

Dan River also said it expects earnings per share in the second half of 30 cents to 40 cents a share.

Sales rise at Walgreen

DEERFIELD, Ill., Aug. 2 (UPI) -- Walgreen Co., the nation's largest drugstore chain, said sales at its stores open at least a year, or same-store sales, rose 11.0 percent in July.

Total sales jumped 16.6 percent to $2.41 billion from $2.07 million a year earlier. Pharmacy sales increased 22.2 percent, while same-store pharmacy sales rose 17.5 percent.

General merchandise, or front-end, same-store sales increased 1.8 percent during the month, the company added.

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