An area Wal-Mart is most hammered on by media and unions is the reduction in employees per store – especially when the retailer’s customer ratings are mixed and sales are sluggish.

Wal-Mart appears to have taken steps to add employees to stores in the recent quarter to the tune of $200 million in added wages and salaries from the year-ago period.

“During the quarter, we allocated additional associate hours to specific areas of the store, such as front end, deli, bakery, and overnight stocking to improve overall customer service. We also sustained incremental labor expenses related to major department re-lays in entertainment and sporting goods. In total, salaries and wages were up more than $200 million compared to last year,” according to Randy Hargrove, Walmart spokesman.

Hargrove said Wal-Mart will continue to invest in wages for the rest of this year, mostly adding hours to existing workers schedules.

In March, Bill Simon, then CEO of Walmart U.S., acknowledged the retailer was losing $3 billion annually from lost sales because shelves were not always being replenished in a timely manner. Wal-Mart said then it would adjust store labor levels and give employees opportunities to work more hours.

In June, Cleveland Research noted that “labor investments had been very selective to almost non-existent,” adding that was the ”biggest problem by far” with respect to the retailer’s continued on-shelf availability shortfalls.

John Marshall, senior capital market analyst for the United Food and Commercial Workers Union, said his group welcomes the announcement that more labor will be put back into stores.

“I want to be clear we are hopeful that the new CEO Greg Foran will work to help this continue, because we haven’t really seen it yet,” Marshall told The City Wire.

Wal-Mart confirmed that store managers have the most say as to how many workers it employs. But Marshall said after many discussions with store managers he was told a computer model predicts the number of workers needed and that often is more than a store budget can handle.

Sherry Curtis-Swenson, a store manager of the new supercenter in Springdale, recently said the new store employed a few more than 300, and skewed heavier than normal for managers, which she said was important for effective operations given it was a new store with more new hires than transfers.

Marshall said Arkansas is one state where store employee counts have remained higher than most states. He said Wal-Mart workers are optimistic in Foran’s leadership given his vast experience in operations. 

“We take him at his word that he is serious about making sure stores are in-stock, clean and running efficiently,” Marshall said.

Foran noted in the pre-recorded earnings call that he will be in stores hearing directly from customers and associates and tracking performance. He said during the retailer’s manufacturing summit in Denver on Aug.14 that Wal-Mart must perform better because consumers today have a long list of shopping options.

He said a consumer decision is based on many factors, including distance to the store, how clean it was during the last visit, lines at the cash register, adequately stock shelves and price. Foran said they quickly review those factors and that’s what dictates where they will shop. Foran said it is he and his army of 1.1 million workers to make sure the choice is Wal-Mart.

Houston-based Kinder Morgan’s $70 billion tax-friendly deal to bring all of its energy assets under one corporate umbrella and stock symbol will not have an impact on the pipeline giant’s Arkansas operations, company officials said.

Kinder Morgan spokeswoman Melissa Ruiz said the company’s blockbuster announcement earlier last week to acquire all of the outstanding stock of its former master limited partnerships — Kinder Morgan Energy Partners, L.P. (KMP), Kinder Morgan Management, LLC (KMR) and El Paso Pipeline Partners, L.P. (EPB) — will not impact the company’s day-to-day operations “at all.”

“It is still business as usual,” Ruiz told Talk Business and Politics.

Once the deal is completed, Kinder Morgan-owned subsidiaries will have a stake in or operate nearly 80,000 miles of pipelines and 180 terminals across the U.S. Kinder Morgan’s pipelines transport natural gas, gasoline, crude oil and other products. Its terminals store petroleum products and chemicals, including ethanol, coal, petroleum coke and steel.

Kinder Morgan now owns or has an interest in two major natural gas pipelines that originate or transport product through Arkansas. Ruiz said the company also operates two product terminal facilities in Pine Bluff and Blytheville that employ 327 active local workers.

The Fayetteville Express Pipeline (FEP) is a 185-mile natural gas pipeline system that originates in Conway County, continues eastward through White County and terminates at the Trunkline Gas Co. in Panola County, Miss. The pipeline has a capacity of nearly 2 billion cubic feet per day and brings natural gas from the Fayetteville Shale to other pipelines serving Midwest and Northeast markets. (Link here for a Kinder Morgan asset map.)

Kinder Morgan’s Natural Gas Pipeline Co. of America (NGPL) is the largest transporter of natural gas into the high-demand Chicago market, and one of largest interstate pipeline systems in the U.S. The 9,200-mile pipeline enters Arkansas from Northwest Texas and crosses the state into Southeast Missouri transporting natural gas into the nation’s third largest metropolitan area. Kinder Morgan operates NGPL and owns a 20% interest in the pipeline company. Myria Holdings Inc. owns the remaining 80% stake.

Besides the massive breadth and size of the combined company, the deal will also bring huge benefits to Kinder Morgan shareholders when the Houston-based pipeline giant begins trading as a single, publicly-traded stock, under the symbol “KMI.”

“This transaction dramatically simplifies the Kinder Morgan story, by transitioning from four separately traded equity securities today to one security going forward, and by eliminating the incentive distribution rights and structural subordination of debt,” said Richard Kinder, company president and CEO.

Shares in the new Kinder Morgan will have a projected dividend of $2 in 2015, a 16% premium over the anticipated 2014 dividend of $1.72. Kinder said the company expects to grow the dividend by nearly 10% each year from 2015 through 2020, with excess coverage anticipated to be greater than $2 billion over that same period.

Additionally, the combined company will be the largest energy infrastructure company in North America and the third largest energy company overall with an estimated enterprise value of approximately $140 billion, behind only ExxonMobil and Chevron. Analysts also estimate the deal will generate about $20 billion in income-tax savings for the Houston pipeline giant over the next 14 years.

And although Ruiz said the company’s operations will not be impacted immediately, Kinder told Wall Street analysts during a conference call that by lowering the cost of equity and debt capital – the deal would open the door for “growth and acquisition opportunities” in the midstream energy market.

“We believe that KMI will be a valuable acquisition currency and have a significantly lower hurdle for accretive investments in new energy infrastructure,” Kinder said. “In the opportunity-rich environment of today’s energy infrastructure sector, we believe this transaction gives us the ability to grow KMI for years to come.”

Kinder Morgan said the deal is expected to close by the end of the year.

Dollar General CEO Rick Dreiling and Board of Directors have entered a bidding war for rival Family Dollar with a $9.7 billion offer announced Monday (Aug. 18.). The bid to pay $78.50 per share for Family Dollar comes on the heels of Dollar Tree’s $8.5 billion, or $74.50 per share deal.

Dreiling said during the company’s conference call on Monday that several offers were made privately over the last year long before the Dollar Tree was announced. The letter sent to Family Dollar Directors spell out a compelling opportunity to own the dollar store channel creating nearly 20,000 stores in 46 states with combined sales exceeding $28 billion.

Wall Street analysts said the Dollar General deal makes more sense given the two stores are much more alike that their competitor Dollar Tree. A Dollar General/Family Dollar merger would create more competitive pressures for big box giants like Wal-Mart Stores Inc., which s just now expanding into smaller formats to try and win more convenience shopping dollars. 

Carol Spieckerman, president of Bentonville-based newmarketbuilders, said Family Dollar offers advantages to Dollar General and Dollar Tree.

“On the surface, Dollar General’s business model would seem to be more compatible with Family Dollar yet that presents challenges as well. Hundreds if not thousands of locations may be found to be duplicative given that both retailers pursue similar demographic profiles,” Spieckerman explained. “On the other hand, since Dollar Tree is a multi-format retailer, buying Family Dollar would be equivalent to it adding a new format to its portfolio. That could make a Dollar Tree purchase easier in the end, particularly in terms of mitigating antitrust concerns.”

Dreiling said the strategic benefits of a Dollar Store/Family Dollar deal include operational synergies of $550 million to $600 million on an annual run-rate three years post-closing. 

“For Family Dollar shareholders, our proposal is financially superior to the current transaction agreement with Dollar Tree and would provide Family Dollar shareholders with a substantial premium and immediate liquidity for their shares,” Dreiling said in a statement.

Dreiling, who was set to retire in 2015, said he would stay on as CEO and chairman until May 2016 if Family Dollar approves their offer. During the call, Dreiling said no one was more surprised to hear about the Dollar Tree deal than he was, given that Dollar General had approached Family Dollar multiple times over the past year about a merger. The lack of interest is one reason Dreiling opted to retire next year.

“We have the utmost respect for Family Dollar, its leadership and its employees. We look forward to expeditiously entering into constructive discussions with Family Dollar in order to sign a definitive merger agreement that provides enhanced value to Family Dollar shareholders and enables Dollar General to realize the benefits of this combination,” Dreiling said.

Dollar General has lined up the financing with Goldman Sachs which includes estimated fees and expenses and the $305 million termination fee payable to Dollar Tree in the event Family Dollar terminates the existing merger agreement and takes the Dollar General deal.

Dreiling said Dollar General has conducted economic and antitrust analysis with respect to the transaction and is confident it can address any potential antitrust issues. Dollar General is prepared to sell up 700 retail stores to achieve the regulatory approvals, which is approximately the same percentage of the total combined stores represented by the 500 U.S. store divestiture commitment in the Dollar Tree merger agreement.

Family Dollar and Dollar Tree has yet to respond to the Dollar General offer and there is also the opportunity Dollar Tree will raise the stakes which is pushing Family Dollar shares higher. Family Dollar shares jumped nearly 5% to $79.64 on Monday with the Dollar Store bid. 

Dollar General shares rallied 10.35% on Monday’s announcement trading at $63.37, up $5.91 on heavy volume. Dollar Tree shares dipped 2% to $54.47 on the news.

Northwest Health Systems and Willow Creek Women’ facility in Northwest Arkansas are among dozens of health providers within Community Health System’s operations to recently have their computers hacked. Records from Sparks Health System and Summit Medical Center were not part of the data breach.

Franklin, Tenn.-based Community Health Systems portfolio of Arkansas hospitals include Northwest Medical Center-Bentonville, Northwest Medical Center-Springdale, Siloam Springs Regional Hospital, Willow Creek Women’s Hospital in Johnson, Sparks Health System in Fort Smith and Summit Medical Center in Van Buren.

The health care provider confirmed that limited personal identification data belonging to some patients who were seen at clinics affiliated with Northwest Health System over the past five years was transferred out of its organization in a criminal cyber-attack by a foreign-based intruder.

“The transferred information did not include any medical information or credit card information, but it did include names, addresses, birth dates, telephone numbers and social security numbers,” according to Patricia Driscoll, spokeswoman for Northwest Health Systems.

“We take very seriously the security and confidentiality of private patient information and we sincerely regret any concern or inconvenience to patients. Though we have no reason to believe that this data would ever be used, all affected patients are being notified by letter and offered free identity theft protection.”

Community Health Systems, which operates 206 hospitals across the U.S., said it believes the intruder was a foreign-based group out of China that was likely looking for intellectual property. Some 4.5 million patients at Community Health Systems facilities are victims of this data breach. The intruder used highly sophisticated methods to bypass security systems. The intruder has been eradicated and applications have been deployed to protect against future attacks, according to the release.

“We are working with federal law enforcement authorities in their investigation and will support prosecution of those responsible for this attack,” Driscoll noted.

The company issued this statement with the federal Securities and Exchange Commission:
“In July 2014, Community Health Systems, Inc. (the “Company”) confirmed that its computer network was the target of an external, criminal cyber attack that the Company believes occurred in April and June, 2014. The Company and its forensic expert, Mandiant (a FireEye Company), believe the attacker was an “Advanced Persistent Threat” group originating from China who used highly sophisticated malware and technology to attack the Company’s systems.

“The attacker was able to bypass the Company’s security measures and successfully copy and transfer certain data outside the Company. Since first learning of this attack, the Company has worked closely with federal law enforcement authorities in connection with their investigation and possible prosecution of those determined to be responsible for this attack. The Company also engaged Mandiant, who has conducted a thorough investigation of this incident and is advising the Company regarding remediation efforts.

“Immediately prior to the filing of this Report, the Company completed eradication of the malware from its systems and finalized the implementation of other remediation efforts that are designed to protect against future intrusions of this type. The Company has been informed by federal authorities and Mandiant that this intruder has typically sought valuable intellectual property, such as medical device and equipment development data.

“However, in this instance the data transferred was non-medical patient identification data related to the Company’s physician practice operations and affected approximately 4.5 million individuals who, in the last five years, were referred for or received services from physicians affiliated with the Company. The Company has confirmed that this data did not include patient credit card, medical or clinical information; the data is, however, considered protected under the Health Insurance Portability and Accountability Act (“HIPAA”) because it includes patient names, addresses, birthdates, telephone numbers and social security numbers. The Company is providing appropriate notification to affected patients and regulatory agencies as required by federal and state law.

“The Company will also be offering identity theft protection services to individuals affected by this attack. The Company carries cyber/privacy liability insurance to protect it against certain losses related to matters of this nature. While this matter may result in remediation expenses, regulatory inquiries, litigation and other liabilities, at this time, the Company does not believe this incident will have a material adverse effect on its business or financial results.”

Arkansas’ July jobless rate of 6.2% is well below the 7.7% of July 2013, but the decline of more than 26,000 in the state’s labor force and an employment decline of almost 6,000 in the year-over-year period indicates a struggling economy.

The July rate of 6.2% was below the June rate of 6.3% and below the July 2013 rate of 7.7%, according to the report issued Monday (Aug. 18) by the U.S. Bureau of Labor Statistics. The July figures are subject to revision. The June rate was revised from 6.2% up to 6.3%.

Arkansas’ labor force was an estimated 1.298 million in July, below the 1.306 million in June, and down 2.01% compared to 1.324 million in July 2013. The year-over-year comparison shows an estimated 26,682 fewer Arkansans in the labor force. There are 69,228 fewer Arkansans in the labor force compared to the peak (1.367 million) in May 2008, a decline of almost 5.06%.

The number of employed in Arkansas during July was 1.217 million, below June employment of 1.224 million, and down an estimated 5,938 jobs compared to July 2013. The number of unemployed was an estimated 81,031 during July, down from the 81,857 in June, and well below the 101,775 in July 2013.

Arkansas’ annual average jobless rate fell from 7.9% during 2011 to a revised 7.5% during 2012. The initial annual average jobless rate for Arkansas during 2013 is 7.5%.

'LEAVE THE STATE'
Jeff Collins, an economist with The City Wire, said the July jobs report “certainly says something about the job opportunities in the state.” He said the decline in the workforce doesn’t mean that more than 26,000 are out of jobs, but “what you likely have are people who leave the state and go to another state to seek employment.”

Collins also said Arkansas’ economy has not transitioned to new economic realities at the same speed as other states.

“The workforce in the state of Arkansas, and this is a very generalized comment, does not compete well for certain types of employment. Unfortunately, the type of jobs we do compete for are dwindling and highly mobile. So if you look at what sectors have been growing in Arkansas, you have a lot of growth in the service sector, ... and you see that manufacturing has just been bleeding over several decades,” Collins said.

He said the growth in service sector jobs typically results in lower paying jobs than the jobs lost in the past decade. Solutions to improve Arkansas’ job numbers, according to Collins, includes “giving Arkansans more tools to grow their own businesses” and to “radically transform” the state’s workforce training programs.

Kathy Deck, director for the University of Arkansas’ Walton College Center for Business and Economic Research, said that while the falling unemployment rate will garner headlines, the declining labor force should be of top concern.

“What’s more is that that Arkansas labor force has been shrinking, while the U.S. labor force has been growing slightly,” Deck added. “And, finally, an interesting component is that the labor force is shrinking in every single metro area of the state, not just the rural areas.”

ARKANSAS SECTOR NUMBERS
In the Trade, Transportation and Utilities sector — Arkansas’ largest job sector — employment during July was an estimated 242,300, up from 242,200 in June and ahead of the 241,100 during July 2013. Employment in the sector hit a high of 251,800 in March 2007.

Manufacturing jobs in Arkansas during July totaled 154,400, down compared to 154,800 in June and above the 151,900 in July 2013. Employment in the manufacturing sector fell in 2013 to levels not seen since early 1968. Peak employment in the sector was 247,300 in February 1995.

Government job employment during July was 215,900, up from 214,600 in June and above the 215,600 during July 2013.

The state’s Education and Health Services sector during July had 174,300 jobs, down from the revised 174,400 during June and up from 171,800 during July 2013. Employment in the sector is up 22.3% compared to July 2004.

Arkansas’ tourism sector (leisure & hospitality) employed 108,500 during July, up from 108,200 during June, and above the 105,400 during July 2013. Employment in this sector reached a high of 109,100 in March.

The construction sector employed an estimated 47,400 in July, up from 47,100 in June and above the 44,700 in July 2013. The sector is off the employment high of 57,600 reached in March 2007.

NATIONAL, REGIONAL DATA
The BLS report also noted that 49 states had unemployment rate decreases from a year earlier, and one state (Alabama, 7% in July compared to 6.5% in July 2013) had and increase. The national jobless rate during July was 6.2%, and was down from the 7.3% in July 2013.

Mississippi had the highest unemployment rate among the states in July at 8%. North Dakota again had the lowest jobless rate at 2.8%.

The July jobless rate in Oklahoma was 4.6%, up from 4.5% in June and down from 5.6% in July 2013.

Missouri’s jobless rate during July was 6.5%, unchanged compared to June and down from 6.8% in July 2013.

An unseasonably pleasant summer in Northwest Arkansas, expanding job base and growing population have helped keep home sales stable against last year’s stellar results.

Agents sold 722 homes in July across Benton and Washington counties, which was five less sales than a year ago. Total sales volume in the region topped $141 million in July, up from $140.5 million in the year ago period, according to Paul Bynum of MountData.com.

Supply and demand in the local market reached an equilibrium in 2013 with rising property values and fewer foreclosures.

“This summer has been flat. It really has not been extraordinary in terms of new home and existing home sales. But, this pace appears to be sustainable and that’s not bad given the record year in 2013,” said Phillip Taldo, broker with Weichert Realtors, the Griffin Company in Northwest Arkansas.

Taldo is also a new home builder who said that sales market slowed in the summer, but starts have been steady. Aside from a healthy relocation business, Taldo said the uptick in home prices and the low interest rates are giving more people an opportunity to sell their home and move up.

FORECLOSURES, INVENTORY SHIFTS
“The number of foreclosures continue to thin out creating more pricing power for homeowners. We are seeing prices rise at a pretty nice clip. My estimate is 5% or so for this year as a whole,” Taldo said.

Irvine, Calif.,-based RealtyTrac.com recently reported 35 new foreclosure filings in July for properties in Benton County, down 74% from the year-ago period. In Washington County there were 16 new foreclosure filings in July, down 71% from a year ago.

The local region is trending with the nation as July marked the 46th consecutive moth where foreclosure activity is down on a year-over-year basis, according to Daren Blomquist, vice president at RealtyTrac.

There were 3,672 homes listed for sale in the two-county region in July, 65 less than the prior month and flat with the year-ago, according to MountData.com. 

New homes accounted for 462 of the property listings, or about 14% of the total inventory. The new home inventory levels are up over the past year by 35% as more builders have become active in the market. A year ago, new home listings totaled 341, or about 10% of the total market.

YEAR-TO-DATE
Agents sold 4,476 homes in the first seven months of this year. Those sales totaled $837.82 million, according to MountData.com. Unit sales are up 6.4% and total volume rose 9.3% over the same period in 2013.

The gains are related to higher prices across the region and continued growth in Benton County. Benton County agents have sold 2,967 homes this year, with the combined sales value hitting $564.068 million, a median sales price of $151,823, and an average price of $190,114.

Taldo said Benton County is about twice the size of Washington County and that’s been part of an ongoing trend for several years given the larger population.

Nicky Dou, a broker with Keller William in Bentonville, said she’s having a great year despite two slow weeks to start August.

“I got four offers over the weekend. It was slow for about two weeks in August and is already picking back up,” Dou added. “I honestly don’t know if this is just how things are going for me or all agents, but I am very happy with the market this year leading into the fall and winter months.”

Dou said two homes she listed in the past week were previously listed with another agent for the previous six months.

“Both of them went under contract within the first week at the same asking price. The buyers are out there and I really believe it is all about how you get those listings out to those buyers. In my case that’s through strong Internet marketing,” Dou said.

Bynum reports it took an average of 53 days for buyers to go under contract and the sales-to-list price ratio is 97.9%, which is a sign prices are trending higher.

Agents in Washington County have sold 1,509 homes this year, compared to 1,572 in the year-ago period. Total sales volume dipped 0.5% to $273.744 million, from $275.180 million a year ago, according to MountData.com.

RISING PRICES
Bynum said in the combined the two counties the median price per square foot this year is $86, up from $82 a year ago. The median sales price of $152,000 is consistent with a year ago, with average prices skewing higher at $188,000.

Taldo expects home prices to increase in the coming months led by higher new home prices that will happen sometime in the next two years as builders are forced to develop more lots amid already very slim supplies.

“Lot prices at $40,000 won’t be the case in new developments. I can see $10,000 to $15,000 more added on the land costs of new homes, which is going to raise the price per square foot by some $10. It is going to happen, it’s just a matter of when,” Taldo said.

Home sales in the Fort Smith area continue to show growth year to date, with Crawford County's sales volume up 40.25% and Sebastian County sales volume up 7.29%.

For the first seven months of 2014, Crawford County has posted $40.314 million in sales versus $28.745 million during the same period in 2013. Sebastian County saw sales of $103.748 million so far this year versus $96.702 this time last year.

July, the most recent month sales figures were available, showed a 13.62% increase in sales for Crawford County to $6.25 million, while Sebastian County's total was down by 1.02% to $18.616 million.

Mont Sagely, the principal broker and owner of Sagely & Edwards Realtors in Fort Smith, said the sales figures for the year are a welcome change.

"That pleases me that Crawford County has started to come back because Greenwood, Alma, and Van Buren (have) been sluggish for the longest time," he said.

The rise in home values, Sagely said, also show that the economy locally is starting to pick up pace with the rest of the nation in terms of jobs and economic development.

"In the River Valley area, it's always been a lagger in keeping pace with the (national) economy," he said. "So I think what we're seeing is finally what the rest of the nation has been seeing. Like when we saw the downfall, we didn't see it as fast as the rest of the nation did. But we're finally reaping the benefits of the strong sales across the country. I think that is probably the reason why, because these two counties have always been slow to respond to the national economic trends."

Even with the improvements, he said it is still a buyers market as evidenced by median sales prices.

In Crawford County, the median sale price for a home this year is $105,000, which only represents a $1,000 increase from the same period last year. In Sebastian County, the figure has held at $115,000 since this time last year.

"There are some signs that the market is catching in certain price ranges, but overall it hasn't turned over to a seller's market by any means," he said.

What could eventually start to impact the local market is the loss of Van Buren's Rural Development Loan eligibility starting Sept. 30. Sagely said he does not necessarily think the loss is going to produce dramatic shifts in sales volume, but it would be felt in Van Buren.

Steve Echols, a mortgage lender with Benefit Bank in Fort Smith, said buyers seeking to stay in Van Buren will just need to work harder to get into a home and look at other loan options. He said the most likely alternative to the Rural Development loan would be an FHA loan.

"Probably the next friendliest is the FHA loan, which is 3.5% down versus the zero down the RD offers," he said. "Then there are also 3% down conventional loans. The main difference is the credit qualifying (for a conventional loan) is a little more restrictive."

He said cost-wise, there was not much difference in the two when factoring the lower interest on FHA coupled with its higher mortgage insurance costs relative to a conventional loan with 3% down. But for buyers in Van Buren still looking to lock in the Rural Development loan with zero down, he said there is a limited amount of time.

"The way we understand it, the submission to the Rural Development office should be made by September 30. So that would be a complete application package to Rural Development which would include an appraisal. Those take 10 days to two weeks (to complete). So I would say as September comes and as you get closer tot he 10th of the month or so, that's when you're going to have a difficult time getting the appraisal back to get it all in order for the submission. But as long as the submission is made by Sept. 30, then you are potentially in advance of the cutoff."

As for whether the loss of the Rural Development loan would hurt Van Buren and Crawford County sales, Echols said it likely would not make a huge difference.

"I think ultimately the people that need and desire an RD loan, they'll go find it. If that means going to Alma or Cedarville, they'll do that. But those that want to be in Van Buren or like communities, then they'll use an alternate loan program. I'm sure it may impact the numbers some, but ultimately where there is a will, there is a way and people will conform."

Home Sales Data (January - July)
• Crawford County
Unit Sales
2014: 352
2013: 268

Total Sales Volume
2014: $40.314 million
2013: $28.745 million

Median Sales Price
2014: $105,000
2013: $104,000

• Sebastian County
Unit Sales
2014: 781
2013: 696

Total Sales Volume
2014: $103.748 million
2013: $96.702 million

Median Sales Price
2014: $115,000
2013: $115,000

It was just four years ago that Trane laid off more than 200 at its Fort Smith facility, but production has returned and with it, so have many of the jobs lost in 2010.

According to plant manager Chris Farnsworth, the Fort Smith air conditioning factory secured a new labor contract in March of 2013 and with it, restored many of the positions lost in 2010, which at the time broke down to 197 hourly production workers and 15 salaried positions.

Trane previously employed as many as 500 as of late 2009.

"Things have really started rolling," he said. "Leading up to 2013, production was increasing. But with the new labor contract, that allowed us to bring a new line from Trenton, New Jersey, and increase the size of the labor line."

Farnsworth said Trane has also invested more than $800,000 in the Fort Smith facility while rearranging the facility to improve productivity.

"A portion of the big rearrangement efforts that we've been doing the last six or nine months has been actively clearing floor space. Right now with one clear exception, we have 65,000 square feet of clear space that was once full. That wasn't due to outsourcing (of production), that was due to taking the areas that were consuming space and using lean tools, compressing those areas, rearranging them, getting rid of waste and relocating them to other areas of the plant ..."

The open space will allow Fort Smith to possibly receive additional production lines, he said.

Regardless of whether Trane locates another production line to Fort Smith, Farnsworth said the company was looking to do additional hiring beyond the recalled employees who have returned to work.

"So currently, we've recalled everybody off the recall list. All the people we've laid off, we've attempted to return to work. Quite a few have accepted. Quite a few declined and have moved on to other jobs. But we're in a position where we're bringing on brand new hires," he said, adding that the company has brought on 29 new hires in the last month.

"Since March 2013, we've returned 100 people to work — either layoffs or new hires," Farnsworth added.

And even more positions are available for hire at Trane's Fort Smith manufacturing facility.

"We're actively looking for skilled trade people, maintenance and electricians. One is due to retirement, but a couple more are due to the new growth we've seen," he said. "We need more trade skills to keep up with the higher production volume."

The new labor contracts are structured to provide raises for individuals hired at the facility, Farnsworth said, with the senior-level employees who survived the layoffs making $18.90 per hour, while those recalled are starting somewhere between $12 and $13.80.

"The brand new hires start around $11.50 on a three year progression up to the mid-$13s. But with general wage increases along the way, they should be somewhere north of that. That would get them to $13.50 over three years and then be eligible for annual general wage increases, as negotiated (in the labor contract)."

Within the next couple of weeks following the latest round of hiring, Farnsworth said the facility should employ 230 hourly workers and 30 salaried, for a total of 260. The figure is just more than half the 2009 level of employment.

Asked to look at the future and how many more hourly workers Trane could add, Farnsworth said it was too difficult to pinpoint.

"I won't take a stab at a number, but I do believe with the productivity this facility has generate and the positive financial impact of the business, we'll continue to grow and be a presence in Fort Smith," he said, adding that any time a manufacturer is adding jobs it is a positive sign for future growth.

"This is great news for us and great news for the community."

The Fort Smith area manufacturing sector employed an estimated 18,400 in June, up from 18,200 in May, and unchanged compared to June 2013. The July metro numbers are scheduled to publish on Aug. 27.

Manufacturing employment is down almost 36% from a decade ago when June 2004 manufacturing employment in the metro area stood at 28,500. Also, the annual average monthly employment in manufacturing has fallen from 28,900 in 2005, 19,200 in 2012, and to 18,300 in 2013.

Amazon recently removed the pre-ordering option for several DVD releases of Walt Disney Co. over a pricing dispute. But competitor Wal-Mart wasted no time in promoting pre-orders for the same films shunned by Amazon.

“Muppets Most Wanted” that was released Aug. 12 became available on Walmart.com at a 50% discount on Friday, Aug. 15. Pre-orders for new releases of “Captain America: The Winter Soldier”, “Million Dollar Arm” and “Maleficent” are all available at Wal-Mart.

Wal-Mart told Bloomberg its pre-orders are up 90% for “Capital America” and 40% higher on other titles in recent days.

Consumers shopping Amazon’s site for the pre-orders get the following message: Sign up to be notified when this item becomes available.

This dispute with Disney comes on the heels of Amazon’s distribution disagreement with book publisher Hachette that has been brewing since June. Amazon disallowed pre-orders for Hachette titles trying to get the publisher to accept lower pricing for e-books.

Wal-Mart Stores, a self-proclaimed low cost retailer, is investing in a new private label brand aimed at wooing bottom-dollar customers from ALDI and Dollar General.

Price First is a new opening price point product line that the retail giant has tested in selected markets since the fall of 2013. Products include pasta, peanut butter, baking mixes, mustard and other condiments totaling about 50 items including paper and other consumables. Wal-Mart is nationally debuting the new private-label product line in more than 2,500 stores over the next few months, according to Danit Marquardt, Wal-Mart corporate spokeswoman.

A sample of Price First products include a 40-count package of foam dinner plates for 97 cents, or 150 dinner napkins for 97 cents and a four pack of toilet paper is priced at 68 cents – all of which beat opening price points of other competitors.

This effort by Wal-Mart comes as no surprise given the retailer’s focus on having the lowest prices, a core mission of new CEO Doug McMillon.

“In an environment where customers have so many choices about where to shop and how to buy, and many of them are feeling pressure on their budgets, we have to be at our best,” McMillon said in the recent quarterly earnings call. “That’s why it’s so important for us to deliver a compelling customer proposition of low prices and quality service for every transaction.”

“Our Walmart U.S. business added approximately $1.9 billion in net sales and delivered a flat comp. I’m encouraged that we’re gaining traction on our goal to have a positive comp by year end, but I’m not satisfied,” McMillon added.

Wal-Mart continues to note a negative impact from the reduced SNAP (food stamp) benefits – estimated 0.7% reduction to comparable store sales – which has also meant less money in the wallets of core customers struggling to make ends meet.

Retail expert Jason Long, CEO of Shift Marketing Group, said Wal-Mart’s new lower tier price point looks to be part of its plan to win customers on tight budgets.

“It will be interesting to see how Wal-Mart promotes this brand and if it puts further price pressures on suppliers of Great Value and branded products,” Long said.

Long said the private label line should resonate with consumers seeking rock-bottom prices for things they need. For instance when a shopper just has $25 to spend on food and consumables for the week, they need the lowest opening price point, not necessarily the best value. That is often a a smaller size name brand item sold at Dollar General or a trusted private label at ALDI. The new Price List brand at Wal-Mart now provides another option.

Kantar Retail reported that in late 2013 that Dollar General beat Wal-Mart in a head-to-head basket challenge on opening price points. Kantar’s report found among the seven retailers surveyed that Dollar General had the least expensive basket thanks to lower opening price points in its edible and non-edible baskets. 

At a total cost of $23.81 the basket savings were 18% more at Dollar General than their closest competitor, Wal-Mart, with a $28.12 basket total. Shortly after, Wal-Mart began testing its Price First private label items. In that study, Aldi’s basket was $34.70.
A separate study by Market Force recently recognized Aldi as the nation’s low-price grocery leader for the fourth consecutive year.

Wal-Mart’s new private label launch also comes on the heels of Savings Catcher, the new lowest price ad matching app, rolled out nationally, which compares branded products, produce and limited general merchandise against the prices competitors in the immediate area. The retailer said the Savings Catcher is being widely used by its shopper base, but industry experts warn that this all-out attempt to match sales prices could lead to margin erosion. 

Kantar Retail released last week its 12th iteration of a pricing study between Wal-Mart and Target. The study assessed a basket of national brand items: 15 edible grocery, 11 non-edible grocery, and 13 health & beauty aids (HBA) items. Kantar reported that Wal-Mart’s overall branded basket was 1.2% less expensive than Target’s. The price gap between the retailers narrowed from 4% in January.

Target’s edible basket was 10.5% more expensive than Wal-Mart’s when temporary price cuts and rollbacks were factored in. For the HBA sub-basket Target’s price was 4.7% less expensive than Wal-Mart’s, which was the only sub-category in Target’s favor. HBA is one area where Target discounts more than Wal-Mart. 

However, Target’s Redcard holders would have paid 3.9% less than Wal-Mart shoppers for the total basket as Target continues to reward it most loyal shoppers.

The Kantar study took place in June prior to the national rollout of Savings Catcher. 
The narrowing price gap between Wal-Mart and Target is the lowest recorded since June 2012. 

“This slightly lessened stronghold on price leadership shows the difficulty in creating basket separation based on price, emphasizing the need for alternative methods to drive impression and value perception by shoppers. The smaller difference would also seem to reflect Wal-Mart’s general shift toward a more nuanced and customized approach to Everyday Low Price,” Kantar noted in the study.

Long said Target is testing many things to recover sales and the shrinking price gap against Wal-Mart is perhaps evidence that some of them may be working.

Don Foster has joined Arvest Bank in Berryville as a community lender.

Foster joins Arvest Bank after 25 years with Tyson Foods and is the owner and operator of a broiler and cattle farm in Green Forest.

“We are so excited that Don is bringing his lifetime’s worth of experience and knowledge of Carroll County to work with us here,” said John Gregson, Arvest Community Bank President in Berryville. “He knows and understands the needs of the local customers and will be a valuable asset to our Arvest team. ”


He has an extensive list of service to his community having served as the president of the Carroll County Fair Board, the Carroll County 4H Foundation Board, Agri Day Committee, Books and Bloom Volunteer, was Carroll County Farm Family of the Year and a member of many other civic organizations.

Foster and his wife Barbara have two grown daughters.

Three broad reports note year-over-year tonnage and expenditure increases during July and the second quarter of 2014 in the U.S. freight industry, and suggest continued modest growth in the overall economy for the remainder of the year.

The American Trucking Associations’ Truck Tonnage Index was up 1.3% in July after a 0.8% decline in June, and was off just 0.6% from an all-time high in November 2013. For the first seven months of 2014, tonnage is up 2.9% compared to the same period in 2013, according to the ATA index.

The not-seasonally adjusted index, which represents the real change in tonnage hauled by the fleets, was up 0.8% compared to June.

Trucking serves as a barometer of the U.S. economy, representing 68.5% of tonnage carried by all modes of domestic freight transportation, including manufactured and retail goods, according to the ATA. Trucks hauled 9.4 billion tons of freight in 2012. Motor carriers collected $642.1 billion, or 80.7% of total revenue earned by all transport modes.

“After a surprising decrease in June, tonnage really snapped back in July. This gain fits more with the anecdotal reports we are hearing from motor carriers that freight volumes are good,” ATA Chief Economist Bob Costello said in the report.
 
Costello said tonnage is up 4.9% since hitting a recent low in January.
 
“The solid tonnage number in July fits with the strong factory output reading and a jump in housing starts for the same month. I continue to expect moderate, but good, tonnage growth for the rest of the year,” Costello wrote.

THE CASS REPORT
The Cass Freight Index for July showed shipments down 3.9% and freight spending down 3.9%. The declines were “consistent” with declines in previous summers, according to Cass report author Rosalyn Wilson, a supply chain expert and senior business analyst with Vienna, Va.-based Delcan Corp.

However, the July shipment volume was up 4.2% compared to July 2013.

Cass uses data from $22 billion in annual freight transactions processed by its information processing division to create the index. The data comes from a Cass client base of 350 large shippers.

“The softness in the freight transportation market in July should not be seen as part of a longer-term trend downward. Even prior to the recession, the summer months were slower before the season rise for the holidays,” Wilson noted in the report.

She also blamed part of the slowdown on retailers with high inventories “being cautious about the orders they are placing for new stock.”

Wilson is positive about the back half of 2014, saying a turnaround in China’s purchasing managers index for export orders and growth in the U.S. manufacturing sector will be good for the freight industry. Improving GDP numbers and household wealth are also good signs.

“The first estimate of second quarter GDP was a growth rate of 4.0 percent, a significant turnaround from the 2.1 percent contraction in the first quarter. Corporate profits are strong, while consumer sentiment and household wealth are rising, putting both groups in a position to spend more this year,” Wilson wrote.

TRUCKLOAD OUTLOOK, WALL STREET
The second quarter 2014 Stephens TL (truckload) Index was up 3.6% compared to the 2013 quarter. Brad Delco, a transportation industry analyst with Little Rock-based Stephens Inc. and author of the report, said the gain was the 17th consecutive quarterly year-over-year increase.

“The 2Q14 increase was the highest year-over-year increase in the index since 1Q12 driven by a number of factors, in our opinion, including driver shortages, slightly improving demand and regulatory driven supply constraints,” Delco and associate Ben Hearnsberger noted in the report.

The quarterly increase was also up 2.1% on a sequential basis, better than the historical average second quarter increase of 1.3%. Delco estimated a third quarter sequential increase of 0.8%.

Among the nine truckload operators included in the Stephens TL Index, the average weekly revenue per tractor during the second quarter was $3,344, up from $3,189 in the first quarter and well above the 2013 average of $3,170. The nine carriers include Lowell-based J.B. Hunt, Tontitown-based P.A.M. Transport, and Van Buren-based USA Truck Inc.

Wall Street is also bullish on the transportation sector. The Dow Jones Transportation Average closed Tuesday at 8,414.89, up more than 0.11%, but trading near the peak of the 52-week range. During the past 52 weeks, the index high was 8,577.16 and the low was 6,212.54. Tuesday’s close was up 35% over the 52-week low.

Wal-Mart Stores management has expressed no public interest in acquiring Family Dollar, which has takeover offers from Dollar Tree and Dollar General. The lack of interest by Wal-Mart doesn’t mean the retail giant will go unscathed by the results, according to retail experts.

The pending consolidation in the dollar store segment will leave one of the bidders out in the cold and their largest competitor — Wal-Mart Stores — watching from the sidelines.

“The imminent acquisition of Family Dollar by either Dollar Tree or Dollar General is by no means a non-event for Wal-Mart. Although these stores are called dollar stores, in many communities they have come to serve as convenient general stores for shoppers who don’t want to make a trip to town or would prefer not to traverse a supercenter for a couple of items,” said Carol Spieckerman, CEO of Newmarketbuilders.

She said Wal-Mart is laser focused on cementing its reputation for value but it has perhaps been even more obsessed with grabbing shoppers’ shorter fill-in trips — a market valued at $415 billion. Last fall, Wal-Mart reported that it had roughly 10% of this fill-in market  which accounts for 40% of the nation’s grocery spend.

The obsession by Wal-Mart is warranted. Spieckerman said a “mega dollar store could really spoil the fun in markets where Wal-Mart has not opened small format stores.”

Fierce Retail executive editor Laura Heller told The City Wire that Wal-Mart’s biggest competition isn’t from Amazon, but rather the dollar stores who are nipping away at Wal-Mart’s core customer.

Heller said at every turn Wal-Mart’s moves have been to woo shoppers from dollar stores, hence the opening of more smaller formats and the guaranteed low prices via Savings Catcher and other ad matches.

She said with 55% of Walmart U.S. sales being grocery items, dollar stores could hurt Wal-Mart more than Amazon or Target. She said Wal-Mart execs are closely watching the dollar store consolidation given their core customers greatly overlap. 

Spieckerman likes Wal-Mart’s game plan of building their own network of smaller stores, and said Dollar Tree, even it’s left out, is a bigger problem for Wal-Mart. Speickerman said Dollar Tree is a digitally-aware, multi-format chain with international presence. Those three attributes set it apart from Dollar General and make it the bigger threat.

“If the combined (dollar store) entity nailed localized price competitiveness in the markets where Wal-Mart has Express and/or Neighborhood Market locations, price will become the determiner. This is why Savings Catcher really is Wal-Mart’s ‘killer app’ at the end of the day,” Spieckerman said. “Dollar General’s digital coupon program is slick but I don’t see it as a match for Savings Catcher.”

She said Wal-Mart’s second line of defense is its site-to-store capabilities which are already making its small format locations more productive than several dollar stores and one reason why Walmart wasn’t tempted to join the bidding party for Family Dollar.

Wal-Mart said its Neighborhood Markets have the ability to generate up to 10 times the sales of a dollar store. The smaller Express stores generate 5 to 6 times the revenue per unit because of their site-to-store, pharmacy and fuel offerings.

Highland Pellets LLC, an Arkansas company, will build a $130 million, 500,000 metric ton wood pellet facility in Pine Bluff creating 35 jobs.

Highland Pellets is a privately held company with industry veterans from the wood pellet, finance, and energy markets.

“While this plant is the first built under the Highland brand, our colleagues Mike Ferguson and Scott Jacobs bring decades of industry leading experience in the engineering and operating of industrial wood pellet plants,” Highland Pellets Chairman Tom Reilley said. “Together with Highland’s leadership team who are veterans of Cargill, Black River, JP Morgan and EnerNOC, we are excited to complete our Pine Bluff facility and expand our footprint.”

Last month, Houston-based Zilkha Biomass Energy said it will build a biomass wood pellet factory in Monticello investing $90 million in the plant and creating 52 jobs.

Wood pellets can be made from a variety of low-grade wood, feedstock, and residual matter from sawmills. The pellets can be integrated into coal-fired plants to create cleaner emissions, allowing plants to more easily comply with clean air regulations, and energy companies to build fewer new power plants, in theory.

The pellets are also water resistant, which allows them to be transported and stored outside like coal.

“This is another great example of matching Arkansas’s workforce and resources with a company that sees the potential for success here,” Gov. Mike Beebe said. “It speaks highly of southeast Arkansas that the business-savvy leaders of Highland Pellets chose Pine Bluff for this investment and this plant.”

Groundbreaking is expected to begin in October and deliveries from the plant to begin March 2016.

More visitor traffic in Northwest Arkansas’ four largest cities helped push hospitality tax collections up 7% in the second quarter, compared to year-ago period.

From Bentonville down to Fayetteville the combined cities collected $1.523 million in hotel taxes and prepared food tax during April, May and June. Collections increased from $1.423 million in the same period last year, marking the best second quarter on record for the local sector.

Springdale, Rogers, Fayetteville and Bentonville each collect a 2% room tax on hotels and meeting space. Bentonville and Fayetteville collect a 1% tax and 2% tax, respectively, on prepared food.

Through the first half of this year collections among these cities totaled $2.764 million, up 6% from $2.606 million in 2013.

BENTONVILLE GAINS
Bentonville set the upward pace with an increase of 9.28% in the quarter fueled by a 10.20% growth in food taxes behind continued restaurant expansion in the city. Bentonville collected $329,791 from the prepared food tax, a gain of $30,663 in added revenue.

Kalene Griffith, CEO of the Bentonville Convention and Visitors Bureau, said Bentonville’s food scene is growing in popularity with the unveiling of the “high South cuisine” concept, which is unique to this region.

“Our tourism draw also continues to be a major factor for Bentonville and the region this summer. I think as more consumers are opting for stay-cations, visitors from around the state have found plenty do in Northwest Arkansas even as day-trips,” Griffith explained.

She said Crystal Bridges Museum of American Art continues to be a big draw and their promotional “State of the Art” campaign is having some positive impact on travel to Bentonville.

“We are also fortunate to have Wal-Mart and all the normal business traffic in and out on a weekly basis. This summer has been especially strong as May and June were our largest months ever,” Griffith said.

Bentonville collected a total of $505,905 in hospitality taxes for the second quarter, up 9.28% from $462,932 rung up in the year-ago period. Griffith expects a solid third quarter as bus tours pick up and the normal seasonal traffic is spurred on by Razorback football, Bikes, Blues & BBQ and the craft fairs.

FAYETTEVILLE PROFITS
The Fayetteville Advertising and Promotion Commission reports hospitality tax collections of $710,807 for the second quarter, a gain of 5.15% from the year-ago period. 

Marilyn Heifner, director of the Fayetteville A&P, reports that collections in May and June also were a record months. In May, collections jumped 3.43% to $236,098 as six groups convening in Fayetteville rented 1,280 rooms with an economic impact of $3.45 million. June was also a record month with revenue collections of $243,770, up 11.39% from the same month last year.

Food taxes collected in Fayetteville comprise the bulk of the revenue at $565, 675. The top grossing restaurants in the city for the first half of the year include: $28,399, University of Arkansas dining hall managed by Chartwell Compass; $26,182, Chick-fil-A on Joyce Avenue by the Northwest Arkansas Mall; $22,351, Chick-fil-A on Razorback Road; and $21,436, Olive Garden.

Hotel taxes totaled $145,122 for the first half of the year, lead by stronger revenues at The Chancellor Hotel in May and June. The Chancellor is the top grossing hotel in the city so far this year.

Heifner said future events booked as of June will be attended by approximately 10,121 people, 750 rooms with an estimated economic impact of $2.485 million.

SPRINGDALE GROWTH CONCERN
The Springdale Advertising and Promotions group reported total hotel tax collections of $96,794 in the second quarter, growing 7.98% from the year-ago period. The city’s collections have continued to show strength each month of this year.  

June was a good month with taxes totaling $30,338, helped by several groups visiting the area for sports recreation, which is one area Springdale continues to recruit heavily.

Roger Davis, general manager for the Holiday Inn and Convention Center in Springdale, also expects a strong fall season and said July was a record month to start the third quarter. He has expressed some concern for the extra rooms expected to come online in next year given that there is already an excess supply of rooms in Northwest Arkansas for much of the year.

STR reports that occupancy levels across the region rose to 72.1% in June, considerably higher than the 67% reported in June 2013. For the first half this year occupancy levels across the region averaged 56.3%, up from 53.5% from the same period last year.

The average daily room rate for the first half of this year was $81.86, and for the recent quarter the rate averaged $83. This is compared to $78.93 in the first half of 2013, and quarterly average rose 3% from $79.44, according to STR.

The new $12 million Hilton Garden Inn in Fayetteville will bring 115 more rooms into the local market by the end of this year. The Sheraton Four Points Hotel in Bentonville opening has been pushed to 2015. That facility is expected to have 105 rooms with a meeting space.

The STR report tracks 98 properties in the region, with a combined 8,150 rooms, this is down 119 rooms from a year ago, as the Days Inn in Fayetteville on College Avenue was sold to CVS Caremark for construction of a new retail pharmacy store.

ROGERS RECORD 
Hotels in Rogers had their best quarter on record with total tax collections of $210,410, up nearly 8% from the year-ago period. 

Allison Dyer, executive director of Visit Rogers, said each month in the quarter topped all previous periods as business and leisure travel returned after a sluggish and cold first quarter.

“June is always huge for us. It starts with Wal-Mart’s annual meeting and then we host the state’s poultry convention, followed by the Daisy Gun competition and the LPGA. It’s always a tough comparison month for us, but this year we managed to set a record,” Dyer said.

Visit Rogers reported $75,073 in collections in June, a gain of 7.75% from the same month last year.

David Lang, general manager at the Embassy Suites in Rogers, said the hotel had its best second quarter on record because of robust business travel and an uptick in weekend conventions and meeting group. He said the hotel has actively recruited weekend business.

“The AMP is also helping to drive traffic to the hotel. We are finding some people would rather get a room and walk over to the concert venue than hassle with parking and traffic, especially if they want to enjoy cocktails,” Lang said.

Dyer expects another strong fall, weather permitting. 

“In September the city will host 125 Arkansas Women Bloggers for their annual conference at the Embassy Suites. It’s great to have these social/tech savvy visitors in Rogers, sharing their experiences via social media all weekend long,” Dyer said.

Rogers also is hosting a Poultry Nutrition Symposium for 250 people from around the region during September. Dyer said 600 teachers will be in Rogers in October for an English as a Second Language conference. Their group affiliation is TESOL.
http://www.arktesol.org/

Hospitality Tax Collections (January through June)
Bentonville
2014: $908,150
2013: $823,550
2012: $749,631

Fayetteville
2014: $1.329 million
2013: $1.288 million
2012: $1.229 million

Springdale
2014: $158,724
2013: $147,552
2012: $133,759

Rogers 
2014: $368,803
2013: $347,586
2012: $328,459

Arvest Bank filed suit against its former bank president, H. Dennis Smiley Jr., his wife Cynthia and their business interest, Design for the Home LLC. The complaint filed Monday (Aug. 18) in Benton County Circuit Court spells out two loans made to Smiley in 2012, which are now delinquent.

Arvest’s complaint notes Smiley’s delinquencies on both loans, owing $31,103.97 and $50,614.70 for a combined $81,718 with interest accruing at nearly $12 per day.

The bank asked the court for judgments against the defendants, jointly and severally.

The loans made to Smiley on Sept. 27, 2012 totaled $90,000 and were secured with 682 shares of First State Bancshares owned by Henry Dennis Smiley, trustee of the Henry Dennis Smiley Revocable Trust dated Sept. 29, 1994.  

The restricted shares were signed over as collateral on the loans via a power of attorney signed by H. Dennis Smiley as owner, guaranteed by Patti Park of Arvest Bank Holdings.

It is not known if the shares put up as collateral belong to Smiley or his father, H. Dennis Smiley Sr. The senior Smiley has told the court in multiple filings that he never authorized his name or assets as collateral for any of the loans made to his son, despite his name being used and signed on several occasions. 

Smiley Sr., a director at First State Bank of DeQueen, has claimed in multiple filings that he was a victim of fraud.

The Arvest suit comes less than three weeks after it settled claims with 18 of 20 banks seeking some $3 million from Smiley for unpaid loans against his Arvest retirement shares. The terms of those settlements were not released and will likely never be known.

The two banks which were not approached by Arvest for settlement will have their cases heard next month. Signature Bank and First State Bank of DeQueen said they will have counsel present at the upcoming pretrial conference.

Benton County Circuit Judge John Scott has ordered a pretrial and status conference for Sept. 18. Scott recently told The City Wire he wanted to conduct status hearings in all of the Smiley cases on Sept. 18. At that hearing Scott said he will decide all pending motions and set all other matters for trial if needed.

Cases that remain open for hearing on Sept. 18 include:
• Arvest interpleader versus H.Dennis Smiley, Signature Bank and First State Bank of DeQueen;
• Delta Trust Bank versus HDH Holdings, a business entity of Smiley;
• First Security Bank foreclosure on Smiley’s home at 56 Champions Boulevard in Rogers Pinnacle Country Club;
• Simmons First National versus Henry Dennis Smiley, Design for the Home;
• First Federal Bank versus HDH Holdings, H. Dennis Smiley Jr.; and
• First State Bank versus Henry D. Smiley Jr.

America’s Car-Mart management says its work to stem the onslaught on competition is paying off as the buy here, pay here used car company posted quarterly revenue of $127.376 million, up 3.94% from the same period last year.

Car-Mart’s fiscal 2015 first quarter net profits totaled $7.25 million, down slightly from the $7.51 million earned a year earlier. On a per-share basis earnings totaled 79 cents, even with a year ago, and 19 cents better than Wall Street’s consensus estimate of 60 cents.

Same-store sales, a key metric for the Bentonville-based company, fell 1.5% in the quarter, but overall unit sales rose to 11,482 automobiles, up 7.9% from the prior-year period.

"We are pleased with our results for the quarter, especially the sequential improvement in per store productivity,” said CEO Hank Henderson.

The company reported 28.4 sales per lot per month, flat with the year-ago results. Car-Mart had 136 stores at the end of the quarter which was 10 more than a year ago.

“We continue to get better with our lot level execution on the sales side and will push hard with our 33-plus year effort to attract good, hard-working customers looking for quality vehicles, affordable payment terms and excellent service,” Henderson said.

"As we have mentioned previously, we are proud of the fact that our average retail sales price has decreased making our offering more affordable for our customers. While other finance companies are seeing significant increases in average contract balances and term lengths, we continue to swim upstream by taking the longer term view from our customers' perspective,” he added.

The average retail price in the quarter was $9,464, down 3.8% from a year ago. At the same time the average down payment rose to 6.9% of the sales price, up from 6.6% a year ago. Henderson said the company’s average contract balance and average new term are down from this time last year. 

Part of the Car-Mart’s recent lackluster earnings have stemmed from higher charge-offs from heightened competition in the subprime auto lending market.

"While the operating environment remains very challenging, we are happy to see the leveling off of our net charge-offs, the improvement in collections and the reduction in our accounts over 30 days past due,” said Jeff Williams, chief financial officer.

The company has finance receivables of $396.32 million, up 4.3% from a year ago. Net charge-offs in the recent quarter were 6.3% of receivables. A year earlier receivables totaled $379.92 million, with charge-offs at 6.2% of that amount. The 30-day past due accounts declined to 4.7% from 5.4% a year ago.

A report released this week by Experian noted that subprime auto loans surged in the second quarter accounting for 19.6% of all auto loans. Also rising in the period were auto repo rates among subprime lenders as well as higher 30-to-60-day delinquencies reported. The average repo charge-off among subprime lenders in the quarter was $8,149, according to the Experian report.

Phil LeBlanc, transportation analyst with CNBC, said while subprime lending levels at 19.6% look high, it has not yet reached the 2009 recession levels of 23.9%.

“This report shows that more Americans are beginning to struggle with their auto loans,” LeBlanc said.

Williams said Car-Mart faces more competitors and macro-economic factors that may negatively impact Car-Mart’s customer base.

“With each passing month we are gaining more clarity on how the business model performs in a perfect storm stress test. We are encouraged,” Williams said. "While charge-offs remain above historical levels, we feel confident we can effectively manage our losses and produce very attractive cash-on-cash returns on the capital we employ in growing the business.”

He notes that the downward pressure on average retail prices are a double-edged sword in that they help with customer success, but they also put short-term pressure on operating margins.

“We would love to see a better operating environment as that would translate into higher customer success rates, but we will remain focused on the things we can control. ... The lower average sales price, which results from a lower purchase cost, helps keep the cash cost of running the business down allowing us to continue to expand without incurring significant additional debt. We do expect some operating leverage in the future as we grow the top line but the exact timing is hard to pinpoint," Williams said.

The company reported strong cash flows with a $17 million increase in finance receivables, $1 million in net capital expenditures and the $2.8 million in common stock repurchases (74,683 shares) with a $2.8 million decrease in total debt.

Car-Mart said it remains committed to growth and plans to open eight new dealerships for this fiscal year and then return to a more historical store opening rate for 2016 and beyond.

The company’s earnings release came after the market closed Wednesday (Aug. 20). Shares of America’s Car-Mart closed at $37.19, down 28 cents on Wednesday. Last month shares hit $40 before losing steam. Car-Mart shares are down 10% since the beginning of 2014, but have rebounded 5% in the last six months.

Tyson Foods has again extended the period for its tender offer to buy Hillshire Brands at $63 per share.

The new deadline is Aug. 26, and was extended as the food companies work through antitrust issues with the U.S. Department of Justice.

Tyson expects the deal to close on or before Sept. 27. Roughly 73% of the Hillshire Brands shares have already been tendered according to the depositary firm handing the transaction.

Analysts do not expect any major hang-ups with this merger given that both companies plan to continue selling their own branded products.

Horses for Healing (HFH) seeks volunteers across Northwest Arkansas to help make a positive difference in the lives of children with special needs across the region. HFH’s next session begins Sept. 16. Children will attend therapeutic riding lessons Tuesdays through Fridays for 12 weeks.
 
HFH provides therapeutic riding lessons to children with special needs which helps them grow physically, mentally, and emotionally. Often children achieve breakthroughs in the saddle that traditional therapies have not been able to accomplish.

Volunteer duties include helping the children make horse-related crafts in a classroom setting and walking alongside the child as they ride. But the volunteer’s greatest impact is the positive influence they build with the children.
 
“Volunteering at Horses for Healing is a unique and rewarding experience,” said executive director Linda Brown. “Our volunteers see so many positive life changes. We have children who say their first word while riding a horse and some take their first steps because of the physical strength, balance, and coordination they gain from riding. Anyone who loves children will be deeply gratified by the difference they can make by spending as little as three hours a week at Horses for Healing.”
 
Volunteer orientation classes will be held from 9 a.m until noon on Sept. 2, 3, and 4, as well as from 4:30 to 7:30 p.m on Thursday, Sept. 4. New volunteers must attend only one of these classes. Make up days are available. No horse experience is needed.
 
Horses for Healing is located at 14673 Daniels Road in Bentonville. For more information contact Lexie Kerr at lexie@horsesforhealingnwa.org or visit the organization online.
 

Dollar General has been jilted by Family Dollar as the discounter has opted to hold firm with Dollar Tree’s $8.5 billion deal.

Family Dollar’s board cites “significant antitrust issues” related to the Dollar General offer given that two chains greatly overlap geographically. Early indications of the Dollar General / Family Dollar marriage would have forced the closing of at least 700 stores.

Dollar General management said Family Dollar CEO Howard Levine was being driven his own interest in his support of the Dollar Tree offer, not what is necessarily the best deal for shareholders.

The Dollar General offer of $8.95 billion was also favored by Wall Street and outspoken investors like Carl Icahn, citing the loss of a $300 million break up fee offered by Dollar General.

Dollar General and Family Dollar execs acknowledged the two retailers discussed a possible merger for the past 18 months but Family Dollar executives said Thursday (Aug. 21) that advisers in the matter did not believe such a deal would pass regulatory muster.

Family Dollar then signed a nondisclosure agreement with Dollar Tree that prevented any mention of their deal talks shortly after. The merger of Family Dollar and Dollar Tree was then announced in July.

Shares of Family Dollar were trading at $79.70, down 10 cents on the news. Dollar General shares were down 30 cents, trading at $63.46 in the morning session. Dollar Tree shares slid 72 cents to $54.27 on lower earnings related to its planned acquisition costs of Family Dollar.

Dollar Tree earned $121.5 million or 59 cents a share in the quarter ending Aug. 2, and reported Thursday. This compared to $124.7 million or 56 cents per share a year ago. Excluding the buyout costs of Family Dollar, the company said it earned 61 cents per share still short of the 64-cent Wall Street consensus.

Dollar Tree revenue rose 9.5% to $2.03 billion, higher than Wall Street expectations of $2.01 billion.