Monday Business Briefing: Local stock performance varies wildly; new hotel planned near Oxmoor; Taxi 7 fleet doubled; and more
Welcome to the Aug. 1 Monday Business Briefing, your private business intelligence digest from Insider Louisville.
July stock review: Food companies do well, insurers not so much
Stocks posted solid gains in July, with the S&P 500 rising 3.6 percent — but the performance of stocks with local importance varied widely.
Food companies fared especially well in July: Papa John’s International shares rose nearly 9 percent in a month that saw the pizza chain expand into a new market (Amsterdam). And analysts with KeyBanc Capital Markets upgraded the company’s shares because it projects that political and civil unrest will prompt more people to stay home this year — and order more pizza. Yum! Brands gained nearly 8 percent for the month, thanks in part to a strong earnings report on July 13 in which the company said it expected its operating profit to grow more this year than previously expected.
Health care related companies PharMerica and Kindred also easily outperformed the S&P 500 — but shares of health insurers Humana and Aetna fell on worries about federal antitrust regulators’ interference in their proposed merger.
The two companies want to join forces, but the U.S. Department of Justice last month filed a lawsuit to stop the deal because they believe it would reduce competition and harm consumers.
Humana’s shares fell more than 4 percent for the month, while Aetna’s declined more nearly 6 percent.
UPS and Ford posted gains of less than 1 percent. Until last week, Ford had recorded a gain of about 10 percent in July thanks in part to strong sales of its Louisville-made SUVs and pickup trucks. But the automaker’s shares fell 8 percent on Wednesday, when it announced in its second-quarter earnings report that it planned to cut production because sales in North America were flattening and demand in China and other markets was weakening. —Boris Ladwig
Copper & Kings increases brandy and absinthe distribution to six more states
The Mid-Atlantic states are about to be clued in on one of Louisville’s best-kept secrets, and it has nothing to do with bourbon. The Butchertown distillery Copper & Kings is increasing its brandy and absinthe distribution and adding six new states — Virginia, West Virginia, Maryland, Delaware, Connecticut and North Carolina — making it a total of 27 now.
Founder Joe Heron says in a press release the time for growing the distillery’s presence is now.
“We’ve spent the last six months very focused on our existing partners and markets,” says Heron. “We continue to hone our craft; we continue to develop exceptional spirits. We are building a team that has intimate knowledge of the brand, their craft and their community constituents. We are ready for the next phase of expansion.”
Residence Inn planned near Oxmoor Center
Another hotel is planned for Louisville, this one in the heart of a busy East End commercial corridor.
Metro Planning and Design Services issued a notice on Friday indicating developers seek to build a new Residence Inn by Marriott adjacent to Oxmoor Center, just behind Kohl’s.
Louisville-based Musselman Hotels submitted an application to build a five-story, 110-room hotel on Bullitt Lane, located off Oxmoor Lane near Shelbyville Road. The 2.3-acre site — owned by the estate of Alice Boden — is vacant and zoned for commercial use.
Musselman Hotels operates several hotels in and around the region, including the Hilton Garden Inn near the airport, Embassy Suites East, and Marriott Louisville East, among others.
According to documents the applicant submitted to Metro Planning and Design Services, the proposed Residence Inn “will be compatible with existing and projected development in the area” and the building “will be an attractive facility to the high standards of the Marriott brand.” The application mentions there will be ample landscaping, as well as an outdoor playground and barbecue area for guests.
We’ll let you know more as the proposal winds its way through the planning and zoning process.
Taxi 7 celebrating one year of business in Louisville by giving one lucky passenger free rides
Taxi 7, those lime green, hybrid vehicles, have been on Louisville’s streets for a year now, and business has been gangbusters. The company started with a fleet of 50 vehicles but ramped up to 100 vehicles in under a year.
To celebrate, one passenger will win free cab rides for a year: Drivers will carry “selfie-frames” celebrating the anniversary in their cars; riders can take a picture with the frame, post it to social media and the “most creative” rider will win, Michael P. Cregan, general manager of Taxi 7 in Louisville, told IL.
Cregan touted the excellent revenue opportunities the company offers drivers. All of the drivers are sub-contractors and the cars are their “traveling offices.” Gas is a major expense for most taxi drivers, and the hybrid car helps keep some of that money in the drivers’ pockets.
Except for a few passenger vans and handicap-accessible vans, all the hybrids are made by Ford because, Cregan said, “Louisville is a Ford city.”
Logistics equipment maker to invest $16 million
A Louisville-area logistics equipment manufacturer is planning a $16 million expansion that would create 60 jobs.
Documents filed with the state indicate that Santa Rosa Systems, which makes conveyors and sorting equipment, wants to make the investments to expand capacity to meet current and projected demand.
According to filings with the Kentucky Economic Development Finance Authority, SRS plans to add 60 jobs with an average hourly wage of $25, including benefits. SRS already employs 190 in Jefferson and Bullitt counties.
The company received preliminary approval from the state for tax incentives of $850,000. The incentives will be applied to investment costs the company incurs at its Mt. Washington facility.
The company could not be reached Friday to provide more details about its expansion. According to its website, SRS provides custom solutions for automotive, food/beverage, warehousing and other industries, and works with companies including FedEx, Amazon and DHL. The company’s products include high-capacity sorting systems that can handle 150 cartons per minute.
The KEDFA filings also show that:
- Meredith Machinery plans to invest $2 million to expand its Jefferson County operations. The company, which has a location at 2640 Technology Drive, distributes machine tools such as saws, lathes and grinders. The company was “founded in 2000 by two brothers in a basement.” It plans to expand “to meet the growing needs of its customers.” The expansion would include the hiring of 10 employees who would earn $24 per hour including benefits. The company currently employs 21. The state provided preliminary approval for tax incentives of $240,000.
- Superb IPC, a powder-coating company based in Shelbyville, wants to invest $790,000 to diversify its business. The expansion would add 30 employees who will make $15 per hour including benefits. In its 55,000-square-foot facility, the company has — for more than two decades — provided powder coating services for the appliance, automotive, metals and other industries, in more than six states. Its process involves electrostatically applying dry powder to an object and curing it in an oven at about 400 degrees. The process increases the products’ durability, color consistency and corrosion resistance. The company’s expansion would include the construction of a 20,000-square-foot building to receive raw materials. The building would accommodate Superb’s plan to also supply complete fabricated, coated and assembled products. —Boris Ladwig
A local organ transplant center is moving to a larger location.
The Trager Transplant Center will move into 18,000 square feet of the newly renovated third floor in the Frazier Rehab Institute building. The new location will feature 16 exam rooms, 10 more than the current center at Jewish Hospital.
KentuckyOne Health said in a press release that the move will “allow for better patient flow … and will alleviate congestion.” Construction began in January.
The center performed the state’s first adult heart, pancreas, heart-lung and liver transplants, according to the release.
More details emerge about free college proposal
Louisville’s possible participation in a $100 million scholarship fund that IL told you about last week would offer tuition-free college options to graduates of public high schools — though the community could raise additional funds to help graduates of private high schools, too.
Say Yes to Education, a New York City-based foundation, has requested that Louisville prepare a proposal to participate in its scholarship program. The foundation would provide $15 million, staff and consultants to provide expertise to launch and sustain the effort.
Louisville government and education leaders said the effort could transform the education system and address the shortage of qualified workers that has been raised by prominent local employers including Ford Motor Co. and GE Appliances.
Say Yes spokesman Jacques Steinberg said the organization has partnered with other communities including Syracuse, N.Y., and Guilford, N.C., and hopes to announce its next partner community within the next year.
Steinberg told IL via email that in each community “the local scholarship funds are raised entirely by local donors.”
Guilford, N.C.’s fund exceeds $41 million, while Syracuse has raised and received commitments of about $37 million, including $20 million from the Central New York Community Foundation.
The office of Louisville Mayor Greg Fischer told IL via email that in other cities that have partnered with Say Yes, “the endowments are being funded by a combination of philanthropic foundations, individual contributions, and public money, though a majority comes from private sources.
“As we learn more about the excitement of Louisvillians for the vision of Say Yes and assess funding feasibility, a fundraising plan will be developed,” the mayor’s office said.
Say Yes came about in 1987 to help students at a public elementary school in Philadelphia. While the organization has remained focused on public schools, Steinberg said the foundation “defers to its partner communities … to determine whether they wish to expand the pool of eligible recipients.”
Papa John’s increases dividend
Papa John’s International on Thursday announced that its shareholders are going to get more money.
The board of the Louisville-based company’s pizza chain has approved raising the quarterly dividend by 14 percent.
People who own shares as of Aug. 8 will receive a quarterly dividend of 20 cents per share on Aug. 19. —Boris Ladwig