Home sales in Arkansas’ four largest markets during the first half of 2013 were up almost 10%, with only the Fort Smith metro area seeing a decline in the number and value of homes sold in the six-month stretch, according to The City Wire’s Arkansas Home Sales Report.

For the first six months of the year, Pulaski County had a narrow hold on the top Arkansas county for home sales. The county, with a population of around 390,000, had 2,144 home sales between January and June. Benton County, with a population of around 230,000, posted 2,125 home sales in the same six month period.

The City Wire’s Arkansas Home Sales Report captures home sales data in the state’s 14 most populated counties within the state’s four largest metro areas — Central Arkansas, Fort Smith area, Jonesboro/Northeast Arkansas and Northwest Arkansas. The report, which records closed sales, accounts for between 70% and 75% of total Arkansas home sales. This report counts the number of sales closed between January and June.

In the four markets, the number of homes sold totaled 9,671, up 9.57% compared to the first six months of 2012. The value of homes sold in the four markets between January and June totaled $1.614 billion, up 12.65% compared to the same period in 2012.

For the first six months of 2013, the number of homes sold in central Arkansas are up 8.9%, up 10.74% in the Jonesboro area and up 14.09% in Northwest Arkansas. Sales during the same period are down 2.49% in the Fort Smith area, and the values are down 7.12% compared to the first six months of 2011.

The average sales price of a home sold in the four markets during the first six months of 2013 was $166,908, up 4.65% compared to the 2012 period, and up 13.05% compared to the 2011 period.

JUNE ACTIVITY
Home sales activity was up for three of the four markets during June. There were 899 homes sold in central Arkansas, up 4.9% compared to June 2012, and up 6.26% compared to May 2011.

June home sales totaled 643 in Northwest Arkansas, up 3.7% compared to June 2012, but down 0.46% compared to June 2011.

Jonesboro area home sales totaled 166, up 5.06% compared to June 2012 and up 7.1% compared to June 2011.

In the Fort Smith area, home sales totaled 153, down 13.07% compared to June 2012, and down 18.18% compared to June 2011.

Total sales during June were up 12.79% in central Arkansas, up 8.49% in Northwest Arkansas, up 4.87% in the Jonesboro area, and down 15.04% in the Fort Smith region.

THE REGIONAL PICTURE
Central Arkansas — Home sales
Jan.-June 2013: 4,599
Jan.-June 2012: 4,240
Jan.-June 2011: 4,005

Fort Smith area — Home sales
Jan.-June 2013: 783
Jan.-June 2012: 803
Jan.-June 2011: 843

Jonesboro area — Home sales
Jan.-June 2013: 897
Jan.-June 2012: 810
Jan.-June 2011: 859

Northwest Arkansas — Home sales
Jan.-June 2013: 3,392
Jan.-June 2012: 2,973
Jan.-June 2011: 2,878

The top five counties in terms of Jan.-June 2013 home sales:
Pulaski — 2,144, up compared to 2,031 in 2012
Benton — 2,125, up compared to 1,850 in 2012
Washington — 1,267, up compared to 1,123 in 2012
Faulkner — 718, up compared to 583 in 2012
Saline — 711, up compared to 637 in 2012

Link here for a PDF document of the June 2013 data.

BEHIND THE NUMBERS
Kathy Deck, director of the Center for Business and Economic Research at the Sam Walton College of Business at the University of Arkansas, said better housing markets are largely the result of economic improvement around the nation. She said prices generally rise after a period of decline. She added that existing home owners are in a better position these days – the market for new homes pretty all but collapsed after 2007 and has been recovering since.

In general, Deck said labor markets have improved and that has led to increased demand for homes. Higher average sales prices, she said, are a natural consequence of increased demand.

Chuck Warford a Realtor with iRealty Arkansas, believes rising interest rates have contributed to increases in sales. According to the national Mortgage Bankers Association, the average interest rate on a 30-year, fixed mortgage was 4.58% on July 19 – a far cry from rates below 4% just a few months ago.

“The days of the 3 percent mortgage are probably gone,” Warford said.

Those rising rates have caused potential buyers to stop waiting for further drops and start buying before additional increases hit mortgage markets. Still, he said current rates are historically low. Warford saw interest rates as high as 15.5% in the early 1980s, so today’s buyers are still in great shape by comparison.

Jeff Collins, the economist for The City Wire, said interest rates are a tricky thing to predict and he’s not convinced they will rise much more in the near future. Collins said the unemployment rate has improved, but not enough to cause dramatic upward pressure on mortgage rates.

Arkansas’ unemployment rate in June was 7.3%. Collins said it needs to drop below 6% before demand for homes increases to a point where there will be upward pressure on interest rates.

The more than 250 mortgage bankers surveyed by Mortgage-X in its weekly Mortgage Rate Trend Survey tend to agree that interest rates will rise slowly – but not substantially – in the months to come. According to the July 22 survey, 48% of the bankers polled believe rates will rise slightly over the next 90 days.
mortgage-x.com/general/rate_trend.asp

MIXED FORT SMITH MARKET
Declines in the region are primarily seen in Crawford County.

Realtor Jason Kilbreath of Ron Calhoun & Associates said many factors are playing into the decline in home sales north of the Arkansas River.

"There's several factors. One can be the I-540 road work," he said, adding that the construction is causing many people to evaluate commute times when searching for a home.

Other factors Kilbreath mentioned include high gas prices and the possibility of the rural development loan going away. The loans are part of the farm bill, which has become a contentious issue as Congress has been debating renewal of the bill.

"I think the loss of the rural development loan is definitely going to continue to hurt sales. That's what a lot of people, especially first time buyers, that's what they use."

The beneficiary of Crawford County's woes appears to be Sebastian County, according to Kilbreath.

For the first half of the year, Sebastian County had an increase of 7.78% in home sales, with 564 homes sold with a value of $76.824 million from January to June. The same period last year saw 532 homes sold with a value of $71.277 million.

In Crawford County, only 219 homes were sold during the first half of this year at a value of $23.127 million, a 26.76% drop from the same period last year, when 271 homes were sold at a value of $31.578 million.

HOT MARKET IN NWA
Through the first half of 2013, Benton County has been hot with 2,125 sales valued in excess of $392.685 million. Agents sold 275 more homes this year than last and total sales volume is up by more the $72 million through the first half of the year in Benton County.

Through the first half of this year, agents sold 1,267 homes in Washington County, units rose 12.8%. Total volume was more than $218.598 million, up 22% from the same period last year.

The local Coldwell Banker franchise reports its sales volume rose 13% in June and is up 25% through the first half the year, compared to the same periods in 2012, according to CEO George Faucette.

“Our new written business continues to keep pace with the closed business,” Faucette said.

Vickie Briolat, agent with Crye-Leike Real Estate, said location is important to seller’s getting the prices they want.

“While prices are better in many areas, there is still a gap in the outlying areas such as Pea Ridge,” Briolat said. “I have a beautiful listing in Pea Ridge, 1,700 square-feet, granite countertops, pristine condition home built in 2006. We have gotten three offers, but no where near the $144,000 listing price. Two were so low, we couldn’t even counter.”

She has another listing in Pea Ridge at $108,000 and the top offer received has been $90,000.

P.A.M. Transportation Services Inc. returned to paydirt in the second quarter, posting net income of $2.682 million, or 31 cents a share. Net profits rose 186% from $934,791 earned in the second quarter of last year.

The earnings report was issued after the market closed on Friday (July 26).

The Tontitown-based carrier’s total revenues surpassed $104.4 million in the quarter, up 10% from the same period in 2012 and blowing past analysts’ predictions of $103 million.

"Second quarter operating income of $5.0 million was very satisfying and represents the highest quarterly operating income that we have reported since the fourth quarter of 2006,” said Daniel Cushman, president of the company.

He attributed the revenue growth to several factors, including fleet growth of 3.1%, improved utilization with a reduction in empty miles, and a 2.3% increase in the rate charged per mile. He said demand for P.A.M. services was relatively strong and steady through the second quarter with the exception of a couple of valuable “project lanes” that transitioned back to intermodal suppliers and away from trucks.

“However, our success in securing new business was strong enough in the quarter to replace these lost lanes and achieve year over year revenue growth,” he added.

P.A.M., like a number of other truckload carriers, benefited from a freight volume increase as the quarter progressed. After a sluggish April, overall freight trends were significantly better in June amid the truckload sector, according to analysts with Stephens Inc.

Stephens Inc. analyst Brad Delco noted that freight pricing in the quarter was fairly lackluster as shippers have been reluctant to increase rates ahead of hours-of-service regulations and sluggish freight demand in the early part half of the quarter. He said going forward carrier rates will need rates to cover 2% to 2.5% cost inflation headwinds on top of 1% to 3% utilization headwinds due to hours of service regulations

The improved earnings report came with a cautious tone from company management.

"As with most other carriers, our random freight division presents one of our greatest challenges. Due to the non-repetitive nature of the customers, routes, pickup and transit times, among other factors, we incur considerably more cost and driver dissatisfaction with this category of freight,” Cushion, noted in the release.

He said the company continues to transition away from random freight services, which lowered the impact it has on total operations.

“The percentage of freight serviced by our random freight division decreased from 45.2% of our total freight in the second quarter 2012 to 38.7% of our total freight in the second quarter 2013,” Cushman said. “We continuously seek to improve profitability through more disciplined choices, better planning, and more efficient execution.”

P.A.M. also benefited from better fuel efficiency in its newer fleet and an overall decreased in the cost of fuel in the quarter. The efficiency gains contributed to a reduction in fuel costs of approximately $700,000 for the second quarter 2013 as compared to the second quarter of 2012, the company said.

Cushman said the company continues to invest in updating its fleet because newer fleets provide for higher driver satisfaction, lower repair costs and greater fuel savings. The firm’s average age of its truck was 1.5 years at the end of the second quarter.

“Our current capital expenditures program is designed to maintain the 1.5 year average truck age and includes fleet growth of approximately 100 trucks. In addition, our program includes the replacement of 60 trailers each month for the remainder of 2013,” Cushion said.

He said the driver recruitment remains a challenge and continues to hinder the firm’s planned internal growth. Increased competition for professional drivers is coming from construction and manufacturing sectors which have picked up steam in the past year.

P.A.M. ended the quarter with 127 more drivers and 203 more owner operators than those at the end of the second quarter of 2012. However, Cushion said sustained intense competition for a dwindling pool of qualified drivers coupled with more stringent governmental regulations could make it difficult to recruit and retain qualified professional drivers.

Shares of P.A.M. Transportation Services Inc. rose 5.3% on the strong earnings announcement Friday (July 26). Shares closed at $11.30, up 57 cents in heavy volume for what is typically a thinly traded stock. More than 91,830 shares changes hands on Friday, the average daily volume is roughly 2,400 shares, according to Yahoo! Finance.

FINANCIALS (Quarter ending June 30, 2013)
Total Revenue
2013: $104.407 million
2012: $94.155 million

Operating Income
2013: $5 million
2012: $1.27 million

Net Income
2013: $4.415 million
2012: $1.561 million

Earnings Per Share
2013: 31 cents
2012: 11 cents

Daily Revenue Per Truck
2013: $651
2012: $607

Company-owned Trucks
2013: 1,471
2012: 1,617

Owner-Operator Trucks
2013: 321
2012: 122

Mercy Fort Smith has received a $150,000 contribution to assist with purchasing critical care equipment for the neonatal intensive care unit (NICU).

The grant – which was given to the non-profit organization through the Walmart Foundation’s State Giving Program – will launch the hospital’s “Making Babies Healthy” program designed to reduce the number of days infants spend in the NICU.

Mercy Fort Smith operates the only Level III equivalent NICU in the Fort Smith area. Last year, the 25-bed unit provided care to nearly 800 premature and critically ill newborns. In the last three years, 11% of infants admitted to the NICU at Mercy have had either a primary or secondary diagnosis of neonatal abstinence syndrome (NAS) a term for the problems a baby experiences when withdrawing from exposure to narcotics. It’s a significantly higher percentage than the national average of 3-5%.

“Infants with NAS require intensive medical care and an extended stay in the NICU,” said Ryan Gehrig, president of Mercy Hospital Fort Smith, said in a statement. “This grant will allow us to purchase new technology, improve infant nutrition by using donor breast milk and offer educational programs for parents to help us decrease the time babies spend in the NICU and give them better long-term outcomes.”

The grant was presented to Mercy during a check presentation ceremony held today (July 29) in Mercy’s NICU department. During the ceremony, Walmart Store Manager Kelly Clark presented the check to Ryan Gehrig, CEO of Mercy Hospital in Fort Smith.

The hospital will use the grant money towards several pieces of technology including:
• Additional Giraffe Omnibeds to provide infants a totally safe and quiet environment with integrated equipment to monitor vitals;
• I-Stat blood analyzers to allow clinicians to access key results on the spot rather than waiting for results from the lab; and,
• Vapotherm high flow nasal canals to reduce the need for infants to be put on a ventilator.

“The Walmart Foundation is very pleased to be supporting Mercy, and are committed to helping those in need in the communities where we serve,” said Kelly Clark, local Walmart Store Manager. “Through this grant, we are hopeful that residents in the state of Arkansas will find easier access to important technology for newborn children.”

The contribution to Mercy was made possible through the Walmart Foundation’s Arkansas State Giving Program. Through this program, the Walmart Foundation supports organizations that create opportunities so people can live better. The Walmart Foundation State Giving Program strives to award grants that have a long-lasting, positive impact on communities across the U.S.
 
Last year in Arkansas, Walmart, Sam’s Club locations and the Walmart Foundation awarded more than $72 million to local organizations.

Mercy Fort Smith includes a 365-bed hospital, three critical access hospitals in Paris, Waldron and Ozark as well as Mercy Clinic with more than 100 providers across the region. Mercy employs more than 2,100 co-workers. It is part of St. Louis based Mercy, the nation’s sixth largest Catholic health care organization.

With half of 2013 in the books, home builders and lenders give the local residential construction market a solid “B” grade, citing modest improvements in demand at a pace that is keeping construction crews busy.

New residential building permits issued by the region’s four largest cities in June totaled $26.767 million, rising 8.73% from the same month in 2012.

Bentonville, Fayetteville, Springdale and Rogers issued 118 permits for new single family homes during the month of June, versus 106 permits issued a year ago from the respective cities.

Don Gibson, CEO of Legacy Bank, said the new construction pace appears to be sustainable as individual contractors are building three or four at a time and then selling those.

“We see a fair amount of building by the lot, not entire subdivisions like we had going on in the housing boom several years ago. The new inventory erected today is being absorbed as it is built, allowing for a more healthy market,” Gibson said.

Legacy, like other banks in the area, is working with a few home builders, to move empty lots out of their bank holdings.

“We have been working with some builders in the Hampton subdivision in Fayetteville,” he said.

Gary Head, CEO of Signature Bank, agreed the local residential market is showing signs of improvement and said his bank helps finance deals for several homebuilders who are busier these days.

“There are pockets where lots and homes are in more demand, like East Fayetteville and parts of Bentonville, at least that’s what we continue to hear from agents and builders. I know the Waterford Subdivision in Fayetteville has been quite active these days,” he said.

He and Gibson agreed that a recent tick up in interest rates has not yet dampened enthusiasm among builders. It remains to be seen how homebuyers will react if rates continue to rise. At 4.5% mortgage is still quite low in the historic scale, but consumers tend to have short memories. Rates have risen from 4% over the past six weeks, according to Bankrate.com

Jake Newell, a co-owner of Jacobs Newell Construction, said his firm has been busy in Fayetteville this year with single-family detached projects and a small town-home project in South Fayetteville.


“We are negotiating for properties near downtown Bentonville with plans to build six or seven new homes within walking distance to the square. We hope to close on the property soon and start construction this fall if all goes as planned,” Newell said.

Newell focuses on infill projects near downtown for professionals who prefer an urban living environment. Their construction also features sustainable building practices that provide the homeowners with a greener footprint.

“We think Bentonville will be a good market for our homes because of the similarities it has to Fayetteville. The cities’ downtown areas both feature multiple trail systems, farmer’s markets, lots of restaurants, entertainment options and a growing number of professionals who want to live downtown,” Newell said.

He anticipates the Jacobs Newell homes in Bentonville will be priced between $260,000 and $300,000.

Bentonville issued 33 new home permits in June with a total value of $10.34 million, that’s an average valuation of $313,000, according to city records. A year ago the city issued 35 permits for a total value of $8.94 million.

Rogers issued 42 permits in June worth an estimated $7.3 million. The city permits rose from 19 permits valued at $4.1 million in the same month of 2012.

Fayetteville’s homebuilding permits were down 3.2% in June compared to the year-ago period. The city issued 30 permits with a value of $6.1 million last month, versus 40 permits worth $8.311 million a year ago.

In Springdale, builders started 13 new homes in June. These projects had a cumulative value of $3.02 million. A year ago there were 12 projects valued at $3.26 million.

COMMERCIAL SECTOR
Head said the commercial construction sector has not yet caught up with the improvements seen in the residential marketplace. He expects it will take another year or so with continued improvements in job numbers and population growth before the needle moves much in the commercial arena.

There were a handful of new commercial permits issued in June among the four cities cited. In Bentonville, a new Kum & Go along “J” Street and the Kaleidoscope Dance Studio valued at $1.27 million will be located at 900 SE Village Loop.

Fayetteville issued permits for a new Walgreen’s at 1415 W. Wedington Drive, Andy’s Frozen Custard at 1523 W. Martin Luther King Blvd., and a Canine Connection Dog Kennel at 4942 W. Wedington Drive. The city also pushed through another multifamily home project for 150 units at the West Center Apartments located at 831 W. Center St.

In Rogers the city pushed through two new permits. One is for a large warehouse facility for HBA Holdings and U Pull-It Auto Parts also got a permit for a new facility at 600 W. Price Lane.

In Springdale, First Security Bank got a new commercial permit valued at $231,846. The 2,000 square-foot building is to be located at 5208 S. Thompson St., according to the permit.

June Residential Permits
Springdale
2012: $3.027 million
2012:  $3.266 million

Fayetteville
2013: $6.1 million
2012: $8.3 million

Rogers
2013: $7.3 million
2012: $4.1 million

Bentonville
2013: $10.34 million
2012: $8.94 million

June Commercial Permits (including multifamily)
Springdale
2013: $231,846
2012: $0

Fayetteville
2013: $39.03 million
2012: $27.05 million

Rogers
2013: $3.0 million
2012: $650,000

Bentonville
2013: $1.7 million
2012: $7.32 million

America’s Car-Mart stretched its footprint a little further east opening a dealership in Rome, Ga., this week. It’s the second location in the Peach State and No. 126 for the Bentonville-based buy here, pay here, used car dealer.

Car-Mart has set a 10% annual growth rate this year, which means the company should open around 10 more dealerships this year. The Rome dealership is the second new site opened this fiscal year.

Shares of America’s Car-Mart closed Monday at $42.92, down 15 cents.
 

Cranford Johnson Robinson Woods, the Little Rock-based advertising, marketing, and public relations firm has named Richard McKeown senior vice president and chief public relations officer, effective immediately.



McKeown was previously associated with CJRW from 1985 through 1999, before establishing his own communications consulting firm.

“We are extremely pleased to announce that Richard is rejoining CJRW,” said Wayne Woods, CEO and agency chairman. “He has a wealth of communications experience not only here in Arkansas, but with clients throughout the United States and internationally. Having him as part of our leadership team will even further strengthen the agency and expand our range of client services."

Since 1999, McKeown has been providing communications strategy and analysis, executive development coaching, and communications training to a broad range of clients. He has been active in the energy, education, construction, and worked with many Fortune 500 corporations and their executive leadership teams.



“There’s no question that the Cranford Johnson Robinson Woods brand and reputation is among the most respected in Arkansas and throughout the industry, and for good reason,” said McKeown. “It has always been a source of pride for me to have been associated with the agency. To be able to rejoin CJRW is extremely humbling and gratifying for me, professionally and personally.”



McKeown will lead CJRW’s public relations division and serve as a member of the agency’s leadership group. He will be actively involved in client service, new business development, and staff development. He will also continue to provide executive communications coaching and training to clients including media training, crisis communications counsel and leadership coaching.  
   
McKeown has a bachelor’s degree from Arkansas State University. He and his wife Tracye (Dicus) have four children and live in Bryant.

Other personnel announcements include: Stacy Sells as the senior vice president of strategic planning; Jordan Johnson and Denver Peacock will lead the agency’s public affairs division; Pam Jones has been promoted to vice president and will remain assistant director of public relations; and Carrie McKnight has been promoted to vice president of public relations.  

As the economy shows signs of improving, one sign is that more people in Northwest Arkansas are willing to spend money on renovations and additions to their home.

City planning statistics are proof that there has been a noticeable uptick in the amount of homes being renovated or added on to throughout the region and anecdotal evidence from local construction experts agree. 


Information from the four biggest cities in Northwest Arkansas — Bentonville, Fayetteville, Rogers and Springdale —are all reported slightly differently, but the trends demonstrate the same upward motion. 


“We have seen a modest uptick in permits this year across the spectrum and feel cautiously optimistic that it will continue to grow as recovery happens and confidence returns,” said Mike Chamlee, chief buildings official for the City of Springdale. 


According to information from the City of Springdale, there were 20 permits for renovations or home additions in June 2013 for a total valuation of $380,623. In June 2012, there were 13 permits in that category for a total valuation of $376,291. 


According to the records for the City of Rogers, there were 10 permits listed under remodel, addition or garage for June 2013 compared to seven in June 2012. 


Dan Pauley, building inspector with the city, he’s seeing a “lot of room additions” and homeowners taking previously unused space and finding a use for it. For example, converting an empty attic space to a living area, he said. Pauley added that there have been a lot of back porches, decks and sunrooms being built.



“The economy is getting better, that could have something to do with it,” he said. “The projects that people wanted to do five years ago they are finally able to start doing now.”

Pauley said that the number of new homes has seen an even larger increase in Rogers, something he attributes largely to the quality of life available in the city.


Quality of life is also attributed for an increase in remodels and additions evident in Bentonville. 

City officials provided a quarterly view of the numbers which indicate a decrease in the first part of 2013 from 2012 but an increase in the number of permits during the second quarter of 2013 compared to the same timeframe in 2012. 


Here is a comment from Troy Galloway, Community Development Director:
 “As you know, it is pretty normal for our permit activity in general to pick up during the spring months of the year as we enter the prime building months of the spring, summer, and fall,” said Troy Galloway, community development director. “As for the increase in remodel permits in general, I think it speaks to the continued interest in Bentonville as place to live because of its proximity to jobs and our increasing cultural and entertainment offerings — not to mention that many of these remodel are downtown properties — which happens to be one of the hottest real estate markets in NWA at present.”

The City of Bentonville reports that from January 2013 to March 2013 there were 33 permits issues, valued at $817,923. During the same time in 2012 there were 53 permits issues but the value was only $525,592.


In April to June 2012, there were 61 permits issues at a valuation of $974,975. Both numbers increased during the same timeframe in 2013 to 64 permits valued at $1.335 million.

According to a report from the City of Fayetteville, there was no change in permits issued between June 2012 and June 2013. Both months there were 16 permits. Representatives from the city could not be reached for an interview in time for publication. 


Local contractors agree that the number of renovation/addition jobs is climbing, although they are leery of sharing actual profit numbers. 


Steve Abshier of Abshier Construction said that it’s about even between the number of renovations and additions that his company has been hired to do recently. He estimated that the number of inquiries has doubled.


“There’s definitely been less tire kicking this year and people are more serious about it,” he said.


Many of the jobs include kitchen remodels and adding on porches. In one case, he’s been hired to renovate the entire home interior. Abshier said that typically kitchen and bathroom remodels are known to add the most value to a home. 


“Most people just want their home more comfortable for themselves (as they live in the house),” he said. 


Jack Hales of Jack Hales Construction Company and also president of the Northwest Arkansas Home Builders Association, said that there is not only an increase in renovations and additions, but overall new residential construction. This is both good and potentially problematic because the uptick in all construction means that subcontractors are now very busy. 


“We’re teetering on a shortage of labor here,” he said. 


The uptick is also already causing an increase in prices both for labor and materials, he said.


“All materials are going up. If it hasn’t gone up, it will go up,” he said. “If someone is planning on doing a remodel, the sooner the better.” 

Tulsa-based Syntroleum Corp. recently retained Piper Jaffray & Co. to assess the potential strategies to raise shareholder value. On the table is Syntroleum’s 50% interest in the Dynamic Fuels joint venture it has with Tyson Foods Inc.

Syntroleum noted in a recent filing with the Securities & Exchange Commission that the timing is ripe for cashing in its interest in the Dynamic Fuels plant in Geismer, La., that has sat idle since the last fall burning cash at rate of $1 million per month each for Syntroleum and Tyson.

The cash burn rate is based on fixed costs of $2.5 million — roughly $2.1 million of that are cash expenses and $400,000 in depreciation.

Piper Jaffray is assisting the company with evaluating all of its alternatives and the firm said there can be no assurances that any particular strategy will be recommended by the board of directors or undertaken or, if so, upon what terms and conditions.

Syntroleum said the margins in renewable fuels gas-to-liquids production are near historical highs levels.

The Dynamic Fuels plant joint venture with Tyson Foods has been a disappointment to both parties in terms of payback as the plant was idled more than nine months ago. Though the plant is the first and only one of its kind there have ongoing difficulties since coming online in November 2010. The plant uses chicken fat to make renewable fuel, which can be used in aircraft and trucks.

Each of the partners committed $75 million toward the $150 million renewable fuels plant venture. They secured $100 million in low interest — 1.3% —  government bonds provided to ventures that created jobs in Louisiana. At the plant peak it was to employ 75 workers. The balance of the $150 million was contributed equally between the two partners.

There have been glimmers of hope since 2010, at one time providing test fuel for the U.S. military and a deal in February 2012 to provide renewable diesel to Norfolk Southern Corp.

During September and October of 2012, the plant produced 8.8 million gallons of renewable fuel — running at roughly 71% capacity levels.

But that came to a halt when the plant was idled in November for deteriorating margins. The parties also invested $7.3  million for a new catalyst which was delivered and installed at the plant by June 28.

Syntroleum said in May that it will cost about $20 million in working capital to restart the plant, most of which is the investment in feedstock.

Yellow grease, the main feedstock is about 45 cents a pound, tallow is slightly higher and chicken fat is about 42 cents a pound. The plant uses about 1.6 million pounds of animal fat per day. A 30-day supply of feedstock runs around $20 million at these prices.

At those feedcosts the cash margins were just under $1 a pound.

Syntroleum said in May the plant would likely be restarted in mid-to-late July following the new catalyst installation. The recently filing with the SEC indicated no set date for restart.

Analysts have said Syntroleum has gambled big on the success of the Dynamic Fuels venture and every day it’s idle is a concern because of the cash drain.

Both companies are expected to report earnings next week, Tyson Foods on Monday, Aug. 5 and Syntroleum on Wednesday, Aug. 7.  The media will ask executives next week for more details on the future of Dynamic Fuels, as both companies refrained from comment during their quiet periods.

Health Management Associates, the parent company of Sparks Health System in Fort Smith and Summit Medical Center in Van Buren, is being acquired by Community Health Systems, according to a statement issued early Tuesday (July 30).

Franklin, Tenn.-based Community Health Systems is almost double the size of HMA, and its hospital portfolio includes eight facilities in Arkansas. Those include four in Northwest Arkansas – Northwest Medical Center-Bentonville, Northwest Medical Center-Springdale, Siloam Springs Regional Hospital and Willow Creek Women’s Hospital.

Initial reports place the buyout value at $7.6 billion, with almost $4 billion from cash and stock. CHS will also assume about $3.7 in debt held by HMA.

The deal is expected to close in the first quarter of 2014, and requires approval from 70% of HMA stockholders. The deal also includes federal antitrust clearance and other regulatory approvals. However, Community Health has already received financing agreements from Bank of America Merrill Lynch and Credit Suisse.

When the deal is complete, CHS will own or operate 206 hospitals in 29 states and have more than 31,000 licensed beds. CHS now owns or operates 135 hospitals in 29 states with about 20,000 licensed beds. Through its QHR subsidiary, the company also manages about 150 independent community hospitals in the U.S.

HMA owns or operates 71 hospitals in 15 states with 11,000 licensed beds.

It remains uncertain what the CHS-HMA deal means for the 500-job regional service center HMA has planned for Fort Smith. HMA officials announced on April 4 that the center would be housed in what is now the Phoenix Expo Center in what was once a portion of Phoenix Village Mall. HMA estimated the annual payroll will be $21.5 million, with the center at full employment within 12 months. The facility is scheduled to begin operations in early September.

"This compelling transaction provides a strategic opportunity to form a larger company with a diverse portfolio of hospitals that is well positioned to realize the benefits of health care reform and to address the changing dynamics of our industry," Wayne Smith, Chairman, president and CEO of Community Health Systems, said in the statement. "Our complementary markets and the ability to form networks in key states, along with the synergies that will be available to us, can create value for the shareholders of our companies, the communities we serve, our employees and medical staffs. We look forward to working with the physicians and employees of HMA to advance the commitment shared across both organizations to pursue clinical excellence and to deliver quality care for patients."

William Schoen, chairman of the HMA Board of Directors, said the board evaluated several alternatives before agreeing to the sale to CHS.

“Shareholders will receive immediate value in cash, as well as CHS stock that will allow them to participate in the future growth of a true industry leader. We are pleased that this combination will create an even stronger organization for the benefit of our patients, physicians, associates and the communities we serve,” Schoen noted in the statement.

Prior to the deal with CHS, HMA was involved in a proxy fight with New York City-based Glenview Capital Management. Glenview, which owns 14.6% of HMA shares, had initiated a “consent” vote to remove the existing board of directors at HMA. Officials with Glenview alleged that HMA board and management actions in running the company were “substandard.”

Officials with Glenview say the problems at HMA are so deep that they believe all new Board members are required who have the experience to make changes.

HMA officials refuted the allegations, but in late June noted that the company “recently engaged Morgan Stanley to assist with its ongoing consideration of strategic alternatives and opportunities available to HMA.”

The City Wire will have more on this story later today.

As the school bells are set to ring within a month, families on the move strongly consider school district boundaries when choosing their new homes.


A recent study by Realtor.com and Move Inc. found that 3 out of 5 homebuyers surveyed earlier this month said schools play a large part in their purchase decisions.


Some 44% said they would go over budget by up to 10% to get in their preferred school district. Another 9% said they would go as high as 20% over budget for their desired location. 


"Our survey demonstrates the large impact school boundaries have on those looking to purchase a home. In April, realtor.com® launched its new mobile school search functionality which allows buyers to search for listings in specific school and district boundaries," said Barbara O'Connor, chief marketing officer at Move Inc. 


For those homebuyers who said school boundaries will have an impact on their decision, the majority indicated school boundaries will be an important consideration:

• 90.53% said school boundaries are  "important" and "somewhat important";
• 2.04% were "neutral" around importance of school boundaries; and
• 7.43%  said school boundaries are "unimportant" and "very unimportant."

Homebuyers who said school boundaries will have an impact on their decision also indicated that they would give up several amenities to live within school boundaries of choice:

• 62.39% would do without a pool or spa;
• 50.60% would give up accessibility to shopping;
• 43.96% would pass on a bonus room; and
• 41.99% would offer up nearby parks and trails.


Proximity to the school is also important for families. The survey found 17.20% wanted to live within walking distance of the school and 45% wanted to be a short drive away.

The Northwest Arkansas metro jobless rate rose in June, with the continued rise in the number of employed not enough to counter the record growth in the workforce size.

The June jobless rate in the region was 5.7%, up slightly from 5.6% in May but better than the 5.9% in June 2012.

Six of the eight metro areas in or connected to Arkansas had jobless rate increases in June compared to May, and four areas had jobless rate increases compared to June 2012.

During June, the lowest metro jobless rate in the state was in Northwest Arkansas with 5.7% and the highest rate was 10.1% in the Pine Bluff area.

NWA METRO NUMBERS
According to figures released Wednesday (July 30) by the U.S. Bureau of Labor Statistics, the size of the Northwest Arkansas regional workforce during June was 240,971, up from the 239,978 during May, and ahead of the 233,667 during June 2012. June is the first month the region’s workforce has topped 240,000.

Northwest Arkansas continues to trend upward in that category. The average annual monthly labor size was 231,461 during 2012, 227,938 during 2010 and 225,177 during 2009.

The number of employed during June rose to 227,172 from 226,454 in May. The June employment was also 1.6% higher than the 223,587 in June 2012.

Mike Harvey, chief operating officer of the Northwest Arkansas Council, said the June report also indicates growth in a majority of job sectors.

“For me, the real positive aspect of this report is that not only are we having growth, but we’re having growth across the board,” Harvey said. “The thing I look at is, ‘Is an economy producing jobs that will create jobs for everybody?’ ... from the starter jobs on up the scale.”

He said officials in Northwest Arkansas don’t get comfortable with the growth, but “are working hard to ensure that the economic diversity continues.”

Following are other key figures from the BLS metro report.
• Unemployed persons in the region totaled 13,799 during June, above the 13,524 during May and below the 14,080 during June 2012.

• The Northwest Arkansas manufacturing sector employed an estimated 26,900 in June, up compared to 26,500 in May, and above the 26,700 during June 2012. Sector employment is down more than 20% from more than a decade ago when June 2002 manufacturing employment in the metro area stood at 34,000.

• Jobs in the Trade, Transportation and Utilities sector — the region’s largest job sector —  totaled 50,200 in June, up from 50,000 during May, and up from the 47,600 during June 2012. Employment in the sector is slightly off from the high of 50,500 posted in December 2006.

• Employment in the region’s tourism industry was 22,100 during June, up from 21,800 in May and up from 21,200 during June 2012. The June employment is a new record for the sector, although the figure could be revised in subsequent reports. The June report is also the third consecutive month the sector has posted record employment.

• In Education & Health Services, employment was 24,800 during June, down from 25,000 during May and up from 23,300 during June 2012.

• In the Government sector, employment was 28,900 during June, down from 30,700 in May and up compared to 28,500 during June 2012.

NATIONAL NUMBERS
Unemployment rates were lower in June than a year earlier in 272 of the 372 metropolitan areas, higher in 73 areas, and unchanged in 27 areas, noted the broad BLS report.

The U.S. unemployment rate in June was 7.6%, down from 8.2% from a year earlier. Arkansas’ jobless rate was 7.3% in June, unchanged from 7.3% in May and unchanged compared to in June 2012.

Oklahoma’s jobless rate during June was 5.2%, up from 5.1% in June, and unchanged compared to June 2012. The Missouri jobless rate during June was 6.9%, compared to 6.8% in May and down from 7% during June 2012.

ARKANSAS METRO AREAS
Fayetteville-Springdale-Rogers
June 2013: 5.7%
May 2013: 5.6%
June 2012: 5.9%

Fort Smith
June 2013: 7.7%
May 2013: 7.7%
June 2012: 7.6%

Hot Springs
June 2013: 7.7%
May 2013: 7.7%
June 2012: 7.7%

Jonesboro
June 2013: 7.2%
May 2013: 6.9%
June 2012: 7.2%

Little Rock-North Little Rock-Conway
June 2013: 6.7%
May 2013: 6.6%
June 2012: 6.8%

Memphis-West Memphis
June 2013: 10%
May 2013: 9.6%
June 2012: 9.5%

Pine Bluff
June 2013: 10.1%
May 2013: 9.6%
June 2012: 9.5%

Texarkana
June 2013: 7.3%
May 2013: 7.1%
June 2012: 7.1%

NORTHWEST ARKANSAS METRO AREA HISTORY
Past annual average unemployment rates
2012: 5.6%
2012: 6.2%
2010: 6.5%
2009: 6.1%
2008: 4.1%
2007: 3.8%
2006: 3.6%
2005: 3.3%
2004: 3.8%
2003: 3.7%
2002: 3.3%
2001: 3%
2000: 2.9%

There was a percentage gain in the number of employed during June in the Fort Smith region, but the percentage gain for the unemployed was higher.

The jobless rate in the metro area during June was 7.7%, unchanged from May, but up from 7.6% in June 2012, according to figures released Wednesday (July 30) by the U.S. Bureau of Labor Statistics. June was the 54th consecutive month the Fort Smith metro jobless rate has been at or above 7%.

Six of the eight metro areas in or connected to Arkansas had jobless rate increases in June compared to May, and four areas had jobless rate increases compared to June 2012.

During June, the lowest metro jobless rate in the state was in Northwest Arkansas with 5.7% and the highest rate was 10.1% in the Pine Bluff area.

FORT SMITH METRO NUMBERS
The size of the Fort Smith regional workforce during June was 135,960, up 1.33% from the 133,837 during May, and above the 134,169 during June 2012. The regional labor force consistently remained above 130,000 beginning in May 2004, but fell below 130,000 in June. The labor force reached a high of 139,544 in June 2008.

The number of employed during June rose to 125,482, an improvement over the 123,567 in May, and better than the 123,939 in June 2012.

Following are other key figures from the BLS metro report.
• Unemployed persons in the region totaled an estimated 10,478 during June, more than the 10,270 during May, and more than the 10,230 during June 2012.

• The Fort Smith area manufacturing sector employed an estimated 18,500 in June, down from the 18,600 in May, and below the 19,300 during June 2012. Employment in the sector is down more than 34% from a decade ago when June 2003 manufacturing employment in the metro area stood at 28,100. Also, the annual average monthly employment in manufacturing has fallen from 28,900 in 2005 to 19,200 in 2012 – the first year the average has dropped below 20,000 since surpassing that level.

• Jobs in the Trade, Transportation and Utilities sector — the region’s largest job sector —  totaled 25,800 in June, up from 25,400 in May, and above the 24,000 during June 2012. Employment in the sector is off from a high of 25,700 posted in December 2007.

• Employment in the region’s tourism industry was 9,600 during June, up from 9,400 in May and above the 9,200 in June 2012. The sector reached an employment high of 9,800 in August 2008.

• In Education & Health Services, employment was 18,000 during June, up from 17,700 in May and above the 17,000 during June 2012. The June estimate is a record for sector employment in the Fort Smith area. The annual average monthly employment in the sector has steadily grown since 2005 when it reached 14,000. In 2012 the average was 17,100.

• In the Government sector, employment was 18,900 during June, down from 19,900 in May and unchanged compared to June 2012.

NATIONAL NUMBERS
Unemployment rates were lower in June than a year earlier in 272 of the 372 metropolitan areas, higher in 73 areas, and unchanged in 27 areas, noted the broad BLS report.

The U.S. unemployment rate in June was 7.6%, down from 8.2% from a year earlier. Arkansas’ jobless rate was 7.3% in June, unchanged from 7.3% in May and unchanged compared to in June 2012.

Oklahoma’s jobless rate during June was 5.2%, up from 5.1% in June, and unchanged compared to June 2012. The Missouri jobless rate during June was 6.9%, compared to 6.8% in May and down from 7% during June 2012.

ARKANSAS METRO AREAS
Fayetteville-Springdale-Rogers
June 2013: 5.7%
May 2013: 5.6%
June 2012: 5.9%

Fort Smith
June 2013: 7.7%
May 2013: 7.7%
June 2012: 7.6%

Hot Springs
June 2013: 7.7%
May 2013: 7.7%
June 2012: 7.7%

Jonesboro
June 2013: 7.2%
May 2013: 6.9%
June 2012: 7.2%

Little Rock-North Little Rock-Conway
June 2013: 6.7%
May 2013: 6.6%
June 2012: 6.8%

Memphis-West Memphis
June 2013: 10%
May 2013: 9.6%
June 2012: 9.5%

Pine Bluff
June 2013: 10.1%
May 2013: 9.6%
June 2012: 9.5%

Texarkana
June 2013: 7.3%
May 2013: 7.1%
June 2012: 7.1%

FORT SMITH METRO AREA HISTORY
Past annual average unemployment rates
2012: 7.7%
2011: 8.6%
2010: 8.2%
2009: 7.9%
2008: 4.8%
2007: 5.3%
2006: 4.9%
2005: 4.5%
2004: 5.2%
2003: 5.5%
2002: 5%
2001: 4.2%
2000: 3.7%

So what happens to the planned Health Management Associates (HMA) regional service center and its 500-plus jobs now that the company is being acquired by a much larger hospital operator? It’s obviously too early to tell, but one thing is certain: The specter of even a hint of uncertainty is not pleasant in a metro area that has lost almost 7,000 jobs in the past five years.

It was announced early Tuesday (July 30) that HMA, the parent company of Sparks Health System in Fort Smith and Summit Medical Center in Van Buren, agreed to be acquired by Community Health Systems. Initial reports place the buyout value at $7.6 billion. The deal, if it meets shareholder and regulatory approvals, is expected to close in early 2014.

Franklin, Tenn.-based Community Health is almost double the size of Naples, Fla.-based HMA, and its hospital portfolio includes eight facilities in Arkansas. Those include four in Northwest Arkansas – Northwest Medical Center-Bentonville, Northwest Medical Center-Springdale, Siloam Springs Regional Hospital and Willow Creek Women’s Hospital.

The acquisition created a big stir in the national business media. But in the Fort Smith area, the deal not only impacts the thousands employed by Sparks and Summit, but raises valid questions about the future of the service center.

Officials HMA announced April 4 that the center would be housed in what is now the Phoenix Expo Center in what was once a portion of Phoenix Village Mall. The property is owned by FSM Redevelopment Partners. HMA estimates the annual payroll will be $21.5 million, with the center at full employment within 12 months. The facility is scheduled to begin operations in early- to mid-September.

The center is one of several recent positive jobs and investment announcements that regional civic and economic development leaders hope will help reverse the problem of persistent high unemployment in the region.

June’s jobless rate of 7.7% marked the 54th consecutive month that the rate has been at or above 7%. In June 2008, there were 132,392 employed in the Fort Smith metro area. June 2013 employment was 125,482.

Lance Beaty, an owner of FSM Redevelopment Partners who is managing the build out for HMA’s Fort Smith center, said he has not received any indication that the project will be halted.

“All of our communications have been to push forward. We are still on an expedited time schedule,” Beaty said Tuesday, adding that it’s “too premature to make definitive comments” about what the CHS-HMA deal will mean for Fort Smith.

The following statement, credited to Eric Waller with HMA, was sent Tuesday afternoon by HMA to The City Wire:
“The details of the integration of Health Management and CHS will take many months to unfold. We look forward to a thoughtful planning process. As one company, Health Management will have an even stronger financial and operation profile and enhanced means to compete, grow and thrive in a rapidly evolving healthcare landscape.”

In a “425” filing with the U.S. Securities and Exchange Commission, HMA President and CEO Gary Newsome said it will be “business as usual” for both companies until the deal is closed.

“It is important for you to know that this combination will not impact the hospital operations of either company. Culturally and organizationally, our companies are ideal partners, with highly complementary businesses, very little geographic overlap and a similar strategic focus on suburban and rural hospitals,” Newsome said in the filing.

Tim Allen, president of the Fort Smith Regional Chamber of Commerce, said his conversations with local HMA officials indicate they are still moving to open the center.

“It appears that it’s business as usual, so we’re still very optimistic (about) the hiring, the building out of the facility here in Fort Smith. ... We’re going to march forward until further notified, so we’re still pretty excited about the project,” Allen said.

Allen also believes the new owners will like what they see in the area “if and when” the deal is closed.

“I am sure they will be as pleased with the workforce in Fort Smith as HMA has been,” he said.

Beaty also turned the potential to a positive, saying the HMA deal with Phoenix included an option to expand the service center.

“I might add that they (HMA) also have an option to expand the center. ... Also think about this: We might be lower-cost market for them (new owners). They might decide this is the place to be and keep this here or move something here. You never know,” Beaty said.

Tyson Foods’ subsidiary Cobb-Vantress said it signed a joint venture agreement with China-based Hubei Tong Xing Agriculture Co., an integrated chicken company. The Siloam Springs-based poultry breeder will produce and sell parent stock for the venture.

Under the agreement signed by Jerry Moye, president of Cobb-Vantress and Yang Shenghong, chairman of Tong Xing, a total of $35 million will be invested in establishing grandparent farm and hatchery facilities in the city of Suizhou in Hubei province, west of Shanghai, to start producing parent stock early in 2015.

The joint venture company, officially known as Hubei Tong Xing Cobb Breeding Company, will be 85% owned by Cobb and 15% by Tong Xing with an initial production target of five million parents a year.



“Tong Xing has been one of our customers for the past four years and we’re excited at this opportunity to work closer together in this joint venture,” Moye said in a statement. “They are located in an area of China with a low chicken population, yet it’s very accessible with good transport links.


He said this deal represents a significant step forward for Cobb to get a foot on the ground in China.



“The time is right to enter China. We believe that in conjunction with our existing partner BPBC located in the north near Beijing, Cobb will be in a great position to build up volume across the country,” Moye said.


Cobb’s parent company, Tyson Food,s has invested heavily to fully integrate its production and processing in China because the demand for protein continues to rise and food safety issues have never been more relevant throughout mainland China.


“The investment by Cobb in Suizhou Hubei is warmly welcomed and supported by Suizhou Municipal Government and Hubei Provincial Agriculture Department. It will be the first and biggest grandparent operation in South and Middle China,” said Shenghong.
 “We believe Cobb will bring the latest technology to the poultry industry and provide clean and healthy breeders. It will be an excellent opportunity and valuable experience for Tong Xing to work together with Cobb to further improve the efficiency of integrated poultry production including breeder, hatchery, broiler, processing and biosecurity.”

The tourism industry was relatively consistent with respect to access, options and overall consumer behavior.

And then the Internet happened.

“The way people plan a trip is radically different. The way they research ... and how they book the room or the whole trip is all different, completely different, than what it was. It changed all aspects of the tourism industry,” said Maryl Koeth, executive director of the Van Buren Advertising and Promotion Commission.

And that’s not a bad thing, she said. It has forced owners of tourism and travel related companies to evolve and keep evolving. It has forced tourism officials to pay more attention to tourism and travel trends. And the Internet, the system that forced the changes, also helps tourism officials quickly adapt to ever-changing consumer preferences, Koeth said.

She’s seen the industry cycle for a few seasons. After working for a freight brokerage firm, Koeth began with the Van Buren A&P in 1990 shortly after Van Buren voters approved a 1% lodging tax and a 1% restaurant tax to launch the city’s tourism promotion and recruitment efforts. She’s been the A&P director more than 13 years.

Koeth is also active in statewide tourism efforts. She’s a board member with the Arkansas River Connection, is the incoming president of the Travel Council for the Arkansas Hospitality Association, and is active with the Arkansas Association of Convention and Visitors Bureaus.

VACATION SPENDING SHIFT
There is one thing about the industry that has emerged as a constant.

“The American worker is a unique creature. We tend to work harder, and we tend to work more hours ... but we will take a vacation. And when we do take a vacation the American worker is going to figure out how to do that no matter what the economy is doing. ... They figure out how to do that even if they have to do it cheaper than they did last year,” Koeth said.

Cheaper, unfortunately, has been the more common modus operandi in recent years, according to Koeth. She is hearing from those in the industry that travelers are eating fewer meals or are skipping the appetizers. Instead of a three-night stay, the traveler may cut back to just two nights.

“We’re going to go on that vacation, but we may buy fewer souvenirs, or we may stay a day or two shorter,” she said.

Koeth cites this shift in consumer behavior – shorter vacation times, and less spending – as a reason for declines in area hospitality tax collections.

Hospitality tax collections in Fort Smith and Van Buren are down for the first five months of 2013. Collections in Van Buren during the first five months of 2013 total $174,969, a slight decline of 0.77% from the $176,327 in the first quarter of 2012.

May collections were $36,898, down 1.2% from the $37,344 in May 2012. The city collects a 1% tax on lodging and a 1% prepared food tax.

“We’re happy, obviously, that they are still taking a vacation, but the downside to how tourists are spending is that it’s really been hard on our shops on Main Street,” Koeth explained.

‘NEVER STAYS THE SAME’
Dwelling on present difficulties is not something Koeth can afford. With data provided by Internet sources and more sophisticated tools now used in the industry, Koeth says she spends more of her time researching “where the tourism industry needs to be” in the next season.

“Tourism never stays the same. Ever. In any community. Never the same. It’s always evolving. It’s always changing,” Koeth said in a measured staccato rhythm to emphasize her point.

She said it’s still important to have a five-year plan or other forms of long-term strategies, but the plan better be flexible. For example, tourism research in the past few years suggests that travelers are more attracted to riverfront and open greenspace areas.

“What we are seeing is that more people are wanting to do more outdoor things,” Koeth said.

That traveler is also open to spending time and money visiting historic areas that may be off the beaten path. To reach that traveler, Koeth said she hopes to work with the University of Arkansas at Fort Smith and other partners to “keep developing our heritage tourism assets.” UAFS took the lead in restoring the historic Drennen-Scott house in Van Buren.

An aspect of the industry Koeth also watches is business travel. So far, she is hearing from hotel owners that business travel in the Van Buren area is good. But with an uncertain economy, the definition of “good” is also subject to change. Koeth says she closely watches the national trucking industry to gauge future economic health.

“Yes, it looks like our business travel is holding steady, but with any ripple in the economy, that’s where businesses will often cut back,” Koeth said.

Another industry dynamic is that tourism benefits don’t necessarily come from nearby facilities or events. Koeth said Crystal Bridges Museum of American Art in Bentonville has helped the Van Buren tourism economy. The anecdotes are many, Koeth says, of those who stop in Van Buren going to or coming from Crystal Bridges.

“It may be sitting in Bentonville, but it’s having an impact on our part of the state. It’s a world-class art museum just 70 miles away.”

Consumers continue to reach into their pockets and spend more for transportation, food, alcoholic beverages and their homes. But according to a new report from Mintel they aren’t spending as much as they believe.

The report studied spending habits from 2007 through 2012 and compared those with consumer attitudes about those purchases. Fiona O’Donnell, analyst with Mintel, said that while consumer expenditures are up, Americans retain a cautious approach toward purchasing and avoid conspicuous consumption.

“While conservative spending may be a result of lingering concerns over the health of the economy and a fear of debt — which affects consumers’ shopping behaviors and perception of how they make spending decisions -—  it is also likely that consumers’ attitudes have shifted,” she said. 

O’Donnell said consumers have been conditioned to seek bargains and now take pride in their ability to shave to cut costs and pay lower prices than retail.|

The study found that consumers think they are cutting back the most on alcoholic drinks away from home, followed by entertainment, and dining out. The study found that actual spending increased in each of these categories where consumers said they are spending less.

Consumer spending rose year-on-year to 2012 in the following categories:
Transportation 7%


Dining out 6%
Alcoholic beverages consumed at home 6%
Alcoholic away from home 6%


Home and garden 5%
Food at home 3%
Personal finance 1.3%

O’Donnell said consumers have come to expect a nearly never-ending cycle of sales, coupon offers, members-only discounts, and lower-priced product alternatives.

“Meanwhile, technological advancements of the past five years and mobile technology’s increasing penetration have made price comparisons and strategic shopping more accessible,” she said. “For these reasons, marketers should not expect a swing back to pre-recession impulse buying habits and spending on credit.”

Scott Street is leaving his position as president of Mercy Hospital Northwest Arkansas to accept a new role with Mercy Health. 


In announcing the news to hospital co-workers and physicians, Street said, “As I reflect on our progress over the past several years and the strong leadership team that is in place, I am so proud of the work that we have accomplished together in Northwest Arkansas. With all of this in mind, I have decided that it is an appropriate time for me to take a new direction in my career path.” 

For the immediate future, Street will focus on several special projects, including the implementation of the Affordable Care Act.



“This is such an important part of the changes that are taking place in health care today and as many of you know, it has been a passion of mine,” he said. “Expanding access and transforming how we deliver health care is the vision of Mercy, and I am so pleased to be able to serve in support of this vision.”  

Eric Pianalto will serve as interim president of Mercy Hospital Northwest Arkansas while the search process for new leadership takes place. Pianalto serves as chief operating officer of Mercy Clinic in Arkansas and Oklahoma. 

He joined Mercy in 1994 and has served in leadership roles in Fort Smith, Northwest Arkansas and Oklahoma, as well as in support of Mercy’s four-state health ministry. Pianalto, his wife Dawn and three children reside in Tontitown. 

“We wish to thank Scott Street for his many contributions to Mercy and the Northwest Arkansas community since joining Mercy in 2010,” said Jon Swope, Mercy regional president. 

“With the support of Eric and the rest of our outstanding local leadership team, as well as our co-workers and physicians, Mercy is well positioned to continue our strong progress in Northwest Arkansas in serving the needs of the community with compassionate care and exceptional service.”

Former Northwest Arkansas real estate developer Brandon Barber plead guilty to three counts associated with his previous indictments on charges relating to fraud and his bankruptcy filing.

The charges Barber plead guilty to included the following felonies - conspiracy to commit bankruptcy fraud, conspiracy to commit bank fraud and money laundering. The maximum sentence for all charges is 45 years, with fines possibly maxing out at $1.5 million.

Barber, wearing an orange and white striped prison jumpsuit, appeared in federal court in Fort Smith with his attorneys, Asa Hutchinson and Asa Hutchinson III, to enter his pleas.

U.S. District Court Judge P.K. Holmes said sentencing would be determined in coming months, though the guidelines allow him to use his own discretion in determining an appropriate sentence and applicable fines.

"I'm not bound by them as long as they are reasonable," he told Barber.

As part of the plea deal, Barber will also be forced to pay restitution, though the victims have yet to be identified. He was also told by Holmes that he would have to forfeit certain assets and finances as a part of the agreement. Those terms have not yet been determined. The remaining 24 counts were dismissed, though Holmes said

By pleading guilty, Barber avoided what was sure to be a lengthy trial that involved five other co-defendants who with Barber were accused of a variety of charges.

When he was arrested in New York on March 20, Barber was charged with:
• Providing false and fraudulent financial information and statements to Legacy National Bank of Springdale in connection with loans to finance the Legacy Condominium building and project in Fayetteville;

• Providing false and fraudulent financial information and statements to Metropolitan National Bank of Little Rock and Enterprise Bank of St. Louis, in connection with loans to finance the Bellafont project in Fayetteville;

• Concealing assets and income from creditors and the bankruptcy court by transferring funds to Van Doren and Knight or accounts controlled by them and using those funds for Barber’s personal benefit and expenses; and

• Falsely and fraudulently representing purchase prices for real estate to First Federal Bank of Harrison, Ark., to obtain loan amounts exceeding the actual purchase prices and thereby generating excess cash without the Bank’s knowledge or approval.

The charges spanned allegations that occurred from 2005 to 2009.

The charges Barber plead guilty to today were an admission from Barber that he participated in the following illegal activities, according to the United States Department of Justice:
• Conspiracy to Commit Bankruptcy Fraud: Beginning in April 2008 and continuing through Nov. 9, 2010, Barber reached an agreement with K. Vaughn Knight and James Van Doren to conceal and disguise income and funds belonging to Barber in order to hide those funds from creditors;

• Conspiracy to Commit Bank Fraud: From around Aug. 2008 to around Dec. 2008, barber conspired with Jeff Whorton, Brandon Rains, David Fisher and others to defraud First Federal Bank. The parties falsely and fraudulently represented the purchase prices of certain lots known as "Executive Plaza" to be higher than the actual sales prices in order to obtain higher loans from First Federal Bank; and

• Money Laundering: Barber engaged in money laundering when he conducted monetary transaction of criminally derived property through a financial institution. …Barber had agreed with Van Doren and Knight to conceal certain income and transactions from the bankruptcy court.

The damages resulting from the charges Barber plead guilty to have not yet been accurately determined, said U.S. Attorney for the Western District of Arkansas Connor Eldridge, though he said today's hearing was a first step in concluding a large-scale case of white collar crime.

"This is a significant step in bringing several individuals involved in committing fraud, including fraud on the federal bankruptcy court, to justice. This case indicates that we are serious about identifying, investigating, and prosecuting those who perpetuate fraud, swindle others out of money and engage in financial crimes."

FBI Special Agent in Charge Randall Coleman alluded to the assumed millions of dollars in damages that resulted from the charges Barber plead guilty to today.

"The number of creditors whom Mr. Barber defrauded through his illegal activities - as well as the number of banks who were threatened by his actions - is just staggering," he said. "In the end, Mr. Barber could not escape the mess he made by moving to New York. He ultimately had to come back to Northwest Arkansas and be held accountable for his actions. I commend the special agents and prosecutors for their important roles in this investigation."

Murphy Oil Corp., which is poised to spin off its retail and refinery operations, posted higher second quarter net income compared to one year ago.

The El Dorado-based oil and gas company recorded earnings of $402.6 million, or $2.12 per diluted share, compared to $295.4 million, or $1.52 per diluted share, one year ago.

Revenues climbed to $7.21 billion for the quarter, up from $7.15 billion in the previous year’s second quarter. A contributing factor to the boost in income was an after-tax gain of $71.9 million from the sale of the Mungo and Monan fields in the United Kingdom during the just completed quarter.

In spinning off its retail and refinery groups, Murphy Oil Corp. is preparing to split into two publicly traded companies. The current company will remain a pure-play oil and gas exploration and production firm. Murphy USA will become a standalone company holding retail assets across the south and midwest.

In the last quarter, the new board of directors for Murphy USA was announced.

“Murphy USA is in the process of finalizing its capital structure,” said Murphy Oil CEO Steve Cosse, who will be transitioning corporate leadership to CEO-elect Roger Jenkins. “We expect that the Murphy Oil Corporation Board of Directors will consider this progress at its meeting next Wednesday and we would expect to announce the board’s conclusion shortly thereafter.”

Andrew Clyde will lead Murphy USA.

Cosse also said Murphy Oil and Murphy USA will freeze providing earnings guidance due to the split in the company structure.

“Due to the transformation of Murphy Oil to a pure play E&P company with the anticipated spin-off of the U.S. retail business, we will no longer provide future quarterly earnings guidance in our earnings press release. Murphy Oil and Murphy USA are each considering the type of future quarterly guidance that will be provided going forward,” he said.

Shares of Murphy Oil (NYSE: MUR) closed trading Wednesday at $67.72. The company’s stock has traded between $50.03 and $68.76 during the past year.

ACXIOM 'BAD NEWS'
Acxiom Corp. saw revenues slide and earnings hold close to unchanged, as company leaders disclosed a string of lost business and efforts to turn around its “bad luck.”

The Little Rock-based data marketer and management company reported first quarter earnings of $13.18 million, or 17 cents per diluted share, compared to $13.33 million, or 17 cents per diluted share, one year ago.

Revenues dipped from $271.66 million in last year’s first quarter to $266.19 million in the most recent period.

Acxiom CEO Scott Howe started the company’s investor conference call with an ominous disclosure.

“I’m going to start today’s call with some bad news,” Howe said. “I want to talk about a setback we have had in the IT Infrastructure business. Over the past few months, we have experienced some significant customer losses. In our 10-K, we talked about termination notices and the associated customer revenues. Unfortunately, since our filing, we have been notified of an additional termination. The reasons for the overall losses differ. Two were basically bad luck, where customers decided to take their IT infrastructure in-house as part of being acquired by a third party.”

“The other 4 situations where we lost the competitive bids in our services were just not renewed. This is obviously not the result we worked for, nor is it acceptable,” Howe added.

He said the company would “redouble” its efforts to serve its ITO (Information Technology Outsourcer) customers.

Acxiom has three primary revenue streams: IT infrastructure management, marketing and data services, and other services.

The company’s IT segment posted quarterly revenue of $69.39 million, down from $70.29 million one year ago.

Marketing and data provided $187.79 million, down from $192.48 million last year.
Other services accounted for $9.02 million, up from $8.88 million a year ago.

Acxiom did score some new clients in its marketing and data services division during the quarter, and it said in September it was launching a new technology for data marketing and insights called Acxiom Audience Operating System.

“We believe our technology is groundbreaking and will re-define marketing,” said Howe. “For the first time marketers, agencies and publishers will have one to one marketing capabilities at scale across all channels and devices.”

Acxiom shares (NASDAQ: ACXM) closed trading at $25.77 on Wednesday. The company’s stock has traded between $15.72 and $26.47 per share during the past 52 weeks.

One back-to-school ritual designed to boost consumption will occur this weekend starting Saturday (Aug. 3) and ending Sunday (Aug. 4), as consumers may take advantage of a statewide tax-free holiday.

Despite a growing number of states offering the break from sales taxes, there is data that suggests the holidays do not promote overall economic growth.

The National Retail Federal estimates families will spend an average $635 this year for clothing, shoes, supplies and equipment. In Rogers, state and local sales tax on a $635 purchase is roughly $60.32. In Fayetteville and Fort Smith the tax savings would be nearly $62, as those tax rates total 9.75%.

Those savings could go into a tank of gas, groceries or dinner out for the family. However, economists continue to ask if these holidays actually prompt shoppers to spend more or simply shift the timing of the purchases that would otherwise take place, to the detriment of pubic coffers.

A study conducted by the New York State Department of Taxation found the holiday prompted shoppers to delay purchases timed with the tax-free dates and did not foster impulse buying as once believed. Another study from the University of Michigan examined nine different sales tax holidays and found that the timed-purchases accounted for almost 90% of the sales recorded during the holiday period.

A 2010 study from the Federal Reserve in Chicago looked at how households responded to temporary tax manipulation. The study found that increased consumption was limited to children’s apparel, with spending on clothing and shoes rising 49% and 45%, respectively, and relative to what they normally buy.

The wealthier households (incomes over $70,000) increased their spending on children’s clothing purchased by 136%. Families with young children increased their spending on children’s clothing by 295%, according to the 2010 study.

POLITICAL GAME
Critics of the holiday have said tax manipulation allows the government to pick winners and losers.

Christopher Koopman, program manager at the Mercatus Center at George Mason University, recently noted in U.S. News & World Report that granting temporary tax-free status to particular items, provides favors to some firms and industries over others. He said these political efforts distort the market and influence consumers and retailers to make decisions for tax reasons, not economic ones.

Some states have expanded the scope of items allowed during the tax-free holiday. According to Pew Charitable Trusts, Louisiana has broadened the scope to $2,500 of exemptions for personal property per person, which includes guns, ammunition and other hunting supplies.

Lawmakers in Arkansas have kept the exemptions limited to clothing and footwear priced less than $100 per item, apparel accessories and equipment costing under $50 per item and school supplies and instructional materials. The holiday is limited to two days.

Two states bordering — Oklahoma and Missouri — allow the tax holiday to start on Aug. 2, a day sooner than Arkansas. Also in Missouri, the tax free savings is extended to computer software costing $350 or less and up to $3,500 spent on a computer system.

This year 17 states and Puerto Rico have declared a tax-hiatus for back-to-school. The issue is still being debated in the state of Massachusetts.

Pew reports the two-day tax holiday cost Massachusetts $20 million last year and a supplemental budget allocation was used to cover the loss. The state has held a tax-free weekend every year since 2004, with the exception of 2009 when it was halted because of the recession.

Matt Gardner, executive director of the Institute on Taxation and Economic Policy, a Washington, D.C., think tank, noted in the Pew report that the holidays don’t make economic sense. He said there is no clear evidence that sales tax holidays have a big impact on sales, and lawmakers are less inclined to highlight the loss of revenue to state treasuries. If the revenue is light, he said other charges will be raised or services reduced, so who really wins.


Sylvester Smith, state director of National Federation of Independent Business in Arkansas, takes a different stance.
 He said this weekend's sales-tax holiday will be a big help to small businesses struggling amid a soft economy.


“The sales-tax holiday is good for stores in general, but it really could make a big difference for small businesses,” Smith said. “The sales-tax holiday puts people in the mood to shop, and we’re hoping they buy at least some of their school clothes and supplies at small, locally-owned businesses, because when you support small business, you’re supporting your community.”

BACK TO COLLEGE

While economist and policy makers debate the potential impact from tax holidays, the National Retail Federation expects families will dole out $72.5 million for back-to-school and back-to-college items this year.


More than two-thirds of the spending is in the back-to-college category. The NRF said much like families with children in grades K-12, college students and their parents will trim their budgets this year as well, looking for ways to reuse what they have and spend only on what they need. 
They expect college students and their families will spend an average $837 on apparel, electronics, dorm furnishings and more, down from $907 last year. Total spending for back-to-college is expected to reach $45.8 billion.


“While spending on college is down from last year, it is still higher than what we saw in 2011, indicating that parents this year are simply purchasing only what their college-age children need,” said NRF President and CEO Matthew Shay.

“The back-to-college market continues to grow, with specialty, discount, department, office supply and even drug stores luring students and their parents with attractive deals on everything from microwavable food products to personal care items and of course, home furnishings. In such a competitive space, we expect the deals over the next few weeks to really turn some heads,” he said.

College Spending Breakdown 2013
$104.76, bedding, small refrigerators and microwaves
$104.44, food items
$203.28, electronics
$122.70, clothing
$65.60, shoes
$65.12, gift cards
$65.08, personal care items
$62.92, school supplies
$42.92, collegiate gear

Shopping Timeline 2013
29.8% began shopping at least two months before school.
34.5% begin three weeks to one month before school.
19.9% will begin one to two weeks before school.