Arkansas Best Settles With IRS

Arkansas Best Corp. of Fort Smith, a less-than-truckload carrier, said on Aug. 13 that it had settled with the Internal Revenue Service over income tax issues between 1990 and 1994.

As a result of the settlement, Arkansas Best will reduce reserves for interest by about $5.2 million to reflect reductions in liability for future cash payments of interest.

The company said that would increase the company’s third-quarter per-share earnings by 12 cents.

Delta Systems Inc.

Delta Systems Inc. in Rogers wasted no time in rewarding Jake Bushey, its president and chief operating officer, for the company’s second quarter performance.

During its Aug. 6 earnings release, which detailed Delta’s 125 percent revenue growth compared with 2001’s second quarter, the automation and motion-control company announced that Bushey has been promoted to president and CEO.

Gerald S. Hurlow, former chairman and CEO, will now serve as executive chairman.

Bushey was also recently elected to Delta’s board of directors at the company’s annual meeting in June.

In a prepared statement, Hurlow credited Bushey with the firm’s success. Delta also predicted third quarter revenue to exceed $3 million and the year total to top $12 million.

The company grew revenue for the three months ended June 30 to $3.57 million. That’s up from $1.58 million for 2001’s comparable period, or about a 125 percent increase.

Delta, traded on the Canadian Venture Exchange, reports all of its financial information in United States dollars.

Delta’s march toward profitability also continued. Its net loss for the period was $70,000 compared with a $570,000 loss in last year’s second quarter. Gross profit grew to $1.47 million, up from $620,000 a year ago.

Earnings before interest, taxes, depreciation and amortization for the second quarter of 2002 was $13,954 versus a net loss of $519,100 in last year’s comparable frame.

Edgewater Technology Inc.

Edgewater Technology Inc. of Wakefield, Mass., formerly a division of Fayetteville-based StaffMark Inc., said revenue for the second quarter decreased by 28.7 percent from $6.7 million to $4.8 million when compared to the second quarter of 2001.

Net income for the quarter ended June 30 showed a net loss of $577,000, but that’s a considerable improvement over the second quarter of 2001 when Edgewater had a net loss of $1.28 million. In it’s balance sheet, Edgewater said its net loss “from continuing operations” in the second quarter of 2001 was $1.00 million.

In March 2001, Edgewater announced the sale of its ClinForce clinical trials division, as well as CFRC Inc., a similar business that was part of ClinForce, for $31 million in cash to Cross Country TravCorps Inc. That sale was apparently not completed until during or after the second quarter of 2001, so Edgewater continued to experience losses related to ClinForce during that quarter.

On Feb. 28, 2002, Edgewater laid off 38 workers, about 19 percent of its workforce, and had a restructuring charge of about $350,000 in the first quarter of 2002 because of severance pay and termination costs.

Earnings per share for the second quarter of 2002 were -5 cents, compared with -11 cents per share in the comparable quarter of 2001 (compared with a second-quarter 2001 loss of 9 cents per share for continuing operations).

The e-soulutions company has 11.6 million shares outstanding.

Tyson Foods Inc.

Tyson Foods Inc. of Springdale will sell its share of a feed milling and swine venture to a Philippine investment holding concern.

Pilmico Foods Corp. of Manila, a wholly owned unit of Aboitiz Equity Ventures Inc., has entered into a non-binding agreement with Tyson Foods and PM Nutrition Co. LLC, a wholly owned unit of Purina Mills LLC, to purchased their combined 50 percent stake in Fil-Am Foods Inc.

Fil-Am Foods has feed milling and swine productions at facilities in the Tarlac province north of Manila.

Aboitiz Equity said the deal will be closed by Oct. 30.

Wal-Mart Stores Inc.

Wal-Mart Stores Inc. of Bentonville said second-quarter profit rose 26 percent as consumers continued to favor discount chains over higher-priced stores.

On Aug. 13, Wal-Mart reported net income of $2.04 billion, or 46 cents a share, for the quarter ended July 31, compared with $1.62 billion, or 36 cents a share for the same quarter of 2001.

“For the first time in our history, we generated over $2 billion in net income in a non-holiday quarter,” Lee Scott, Wal-Mart’s president and CEO, said in a press release and during a prerecorded conference call.

A week earlier, Wal-Mart said it expected to meet or exceed its previous estimate for earnings of 44 cents to 45 cents per share. Analysts were looking for earnings of 45 cents a share, according to Thomson First Call.

Total sales for the quarter rose 13.1 percent from $52.8 billion to $59.69 billion.

Same-store sales, or sales in stores open at least a year, rose 6.4 percent, with a 7.1 percent increase at the Wal-Mart branded stores and a 3.4 percent rise at the company’s Sam’s Club stores.

In the conference call, Scott said the Sam’s Club same-store sales represented “disappointing growth.”

“This was an improvement over the first quarter results, which were flat,” he said of the Sam’s Club division, “but they’re still not acceptable.”

Total sales for the Wal-Mart stores division rose 14.1 percent to $38.6 billion. Total sales for the Sam’s Club division rose 9.2 percent to $7.9 billion.

The international division brought in $9.7 billion in sales, a 15.2 percent increase from $8.4 billion in the second quarter of 2001.

Operating profit for the company’s international division was $510 million, up 62 percent from $315 million in the comparable quarter of 2001.

Wal-Mart lowered its forecast for third-quarter sales growth, but the company backed earnings expectations for the year, and guided third-quarter forecast above Wall Street’s current expectations.

Citing a “modest slowing in sales trend” at the end of the second quarter, Wal-Mart said it now expects same-store sales to increase 4-6 percent in the third quarter. Its previous forecast for same-store sales growth was in the range of 5-7 percent, but that was up from a forecast of 3-5 percent growth earlier in the year.

In the conference call, Scott said that although sales slowed in late July, those weeks constituted a “transitional period” between summer clearances and fall sales. Although the slower sales are a concern, Wal-Mart doesn’t yet believe they represent a trend, Scott said.

In the face of slowing sales, Wal-Mart said it improved its profit gross margin without raising prices. The company said its merchandise strategy has resulted in fewer markdowns and increased sales of high-margin goods. Wal-Mart said the growth in profit margins will drive third-quarter earnings to between 40 and 41 cents a share — above Wall Street’s current forecast of 39 cents a share, according to Thomson First Call.

Wal-Mart also reiterated its recent earnings guidance of $1.76 to $1.78 a share for the full fiscal year.

In the conference call, Scott said return on assets had improved by “almost 50 basis points” on a 12-month basis and return on equity had also improved.

“While pleased with our results, we’re not satisfied,” Scott said. “This quarter, we again did not leverage expenses. Controllable expenses showed improvement, but higher insurance, benefits and legal costs resulted in a consolidated increase of 16 basis points. Although we are not pleased with these results, the increase is less than we experienced in the first quarter.”

Wal-Mart announced on Aug. 14 that its board of directors has decided that the company will expense stock options beginning with the upcoming fiscal year, which starts on Feb. 1.

Wal-Mart said the change will affect earnings per share on its accounting books by about one penny per share, which would amount to $44.51 million based on the 4.45 billion shares outstanding as of March 31.

If the change had been the same amount and affected the fiscal year that ended this past Jan. 31, it would have altered net income on the books by 0.7 percent, changing it from $6.671 billion to $6.627 billion.

Wal-Mart’s board also authorized a new $5 billion share repurchase program, replacing the previous $3 billion program. Under prior authorizations, the company repurchased $1.7 billion in common shares in the first six months of the current fiscal year. Purchases for the share repurchase program will be made from time to time in the open market and in privately negotiated transactions.

Wal-Mart said Lee Scott, president and CEO, and Thomas M. Schoewe, executive vice president and chief financial officer, have signed sworn statements guaranteeing that the company’s fiscal 2002 annual report, subsequent proxy materials, report on form 8-K, and the company’s fiscal 2003 first quarter report filed with the Securities and Exchange Commission contain no material omissions or misstatements. Those certifications were filed with the SEC on Aug. 14.

An SEC order in June required the nation’s 947 largest publicly traded companies — those with annual revenues exceeding $1.2 billion — to certify the accuracy of financial reports. Those companies with fiscal years ending Dec. 31, were required to certify their reports by August 14. Wal-Mart, which had a Sept. deadline because its fiscal year ends on Jan. 31, filed its certifications early.

The board also declared a quarterly cash dividend on the common stock of 7.5 cents per share, payable on October 7, to shareholders of record on September 20, 2002.