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Business today

Compiled from Times wires

© St. Petersburg Times, published May 16, 2001


RICHARDSON LEAVES AIRVATA: Former Florida Power president Joe Richardson is back on the job market, having resigned as president and chief executive of Airvata Networks Inc. after less than two months. Richardson said he left the Tampa technology start-up at the end of March along with several other top executives. Airvata had no product, but held a proprietary network design for telecommunication companies, Richardson said. When several of those potential telecom customers began having financial problems, Richardson decided to leave. "I concluded it was not a good time to pursue the business plan," he said. Richardson currently volunteers as chairman of a Florida Chamber of Commerce study group on the state's economy.

ZANY BRAINY DECLARES BANKRUPTCY: Specialty toys retailer Zany Brainy Inc. has filed for protection from its creditors under Chapter 11 of the federal bankruptcy laws. Tom Vellios, president and chief executive, blamed the company's rapid expansion, including acquisition of 60 stores and opening of 27 new ones, and a difficult retail climate for the retailer's financial problems. He said each store will be evaluated separately, and some may be closed, but he declined to predict whether the overall number of stores would change. The company currently has 187 stores in 34 states, including the Plaza at Citrus Park. Trading in its shares was suspended on the Nasdaq Stock Market, where it last traded at 33 cents a share.

GATEWAY SETTLES CHARGES: Gateway Inc. has agreed to settle charges it misled consumers with promises of free Internet service. The Federal Trade Commission said Gateway agreed not to misrepresent the cost or price of Internet service it provides with the personal computers it sells and to refund certain charges to consumers who registered for its Gateway.net service between January and April of 1999. Gateway was accused of failing to disclose prominently that consumers who bought a computer would incur telephone charges for Internet connections. Juno Online Services Inc. reached a similar agreement with the FTC. The Internet service provider settled charges that it wrongly told consumers who participated in a free trial offer for premium Internet service they would be able to cancel at any time without a charge.

LOOMIS FARGO SHARES ACQUIRED: Securities services group Securitas has agreed to buy the remaining 51 percent of Texas cash handling company Loomis Fargo & Co. for $102-million. The transaction will double the sales of the company's cash handling services business to $835-million. The deal gives Securitas an 18 percent market share in the United States and a 16 percent market share in Europe.

DOLLAR GENERAL NAMES PRESIDENT: Dollar General Corp. named former Sears Roebuck executive Donald S. Shaffer as president and chief operating officer, effective June 1. Shaffer replaces Bob Carpenter, whose retirement from Dollar General has been planned for nearly two years. Chief executive Cal Turner Jr. said Shaffer's hiring allows him to shift his focus to other areas, including an internal investigation into accounting irregularities and possible fraud that caused the discount retailer to delay the filing of its 2000 annual report with the Securities and Exchange Commission. Dollar General shares rose 29 cents to close at $17.59.

NEWSPAPER CUTS: The San Jose Mercury News and USA Today each announced staff reductions, the latest to hit the newspaper industry. The Mercury News said it planned to cut 120 jobs, or 8 percent of its work force of 1,560, through voluntary buyouts and early retirement. Cost cuts at the newspaper have become a flashpoint in the industry since Jay Harris resigned as publisher in March to protest owner Knight Ridder's financial goals. USA Today laid off six newsroom employees and seven people from its online division, the first for the paper since it was founded in 1982. The newspaper industry is struggling with a sudden decline in advertising revenues and higher newsprint prices.

Earnings

Intermedia Communications

The Tampa telecommunications company, which is being acquired by WorldCom Inc., posted continued losses in the first quarter ended March 31. The company blamed lower long-distance rates in part, and noted a drop in revenue from its Digex Web hosting unit compared with the fourth quarter.

Separately, Intermedia scheduled a shareholder vote on the WorldCom merger for June 19. It expects to close the deal by July 1.

* * *

Insurance Management Solutions Group Inc.

The St. Petersburg insurance outsourcing company cited cost-cutting efforts for its improved results for the quarter ended March 31. IMSG also named Anthony R. Marando, 44, as its new chief financial officer, replacing Christopher P. Breakiron, who resigned effective April 17. Marando was chief operating officer for the e-Insurance division of software developer Selectica Inc.

* * *

Davel Communications Inc.

The Tampa pay phone company reported a first-quarter loss. Revenues fell as it cut the number of unprofitable phone locations it operates from an average of 76,000 a year ago to 66,000 for the quarter ended March 31.

* * *

800 Travel Systems Inc.

The Tampa company complained of increased softness in the economy and travel industry during the quarter, adding it is reviewing ways to lower costs.

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