Kiger's Notebook

Owners of Roch. McD's buy two in Austin, 1 in Albert Lea

During my chat with Rick Lommen, the president of Courtesy Corp., he said the Austin McDonald's is not the only one that will be leveled and re-built (like the North Broadway one).

"We'd like to re-build more in Rochester. we are working on that," he told me.

Enough of Rochester, here's some of the story about what was served up in Austin Wednesday.

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Austin’s 40-year-old McDonald’s restaurant on Oakland Avenue is slated to be rebuilt from the floor to the top of the Golden Arches this spring.

That comes from Courtesy Corp. of Onalaska, Wis., the company that bought both the two McDonald’s in Austin as well as one in Albert Lea on Wednesday.

They were sold by Dave Scherer and his family. Scherer’s father opened the Oakland Avenue McDonald’s in 1969.

Courtesy now owns 11 restaurants in Minnesota, five of which it acquired in Rochester in 2001. It owns 42 McDonald’s over in Minnesota, Iowa and Wisconsin.

Why buy three new locations, one of which will be demolished and re-built, in southeastern Minnesota now?

“It seemed a natural extension to look beyond Rochester to Austin. This was close by and it is an attractive business,” says Rick Lommen, president of Courtesy Corp.

As for buying during now, Lommen says McDonald’s sales have stayed solid with their economical offerings.

Hormel's new deal south of the border

Here's a deal that Austin-based Hormel Foods kicked out a release about Monday evening. Unfortunately, a bad bug of some kind knocked me out of commission Tuesday, so this is the first time I have been conscious enough to post this.

Anyway, Hormel has struck a deal with Herdez Del Fuerte, a Mexico City-based food company, to form a joint venture to market food to U.S. customers. The resulting company is called MegaMex Foods, LLC and it is based in Chino, Calif.

I've posted on this deal before. The reason Hormel is touting this now is that the deal, which was first announced publically in June, has now officially closed.

Here's some from the release on this deal:

Hormel Foods and Herdez Del Fuerte announced the closing of a 50/50 joint venture agreement to create MegaMex Foods, LLC, which will market Mexican foods in the United States.

The venture significantly expands the existing agreement between the two
companies and produces a portfolio with initial revenue of about $200 million.
MegaMex Foods has a comprehensive portfolio that includes brands such as
CHI-CHI`S, HERDEZ, LA VICTORIA, EMBASA and DOÑA MARÍA, among others, which
resonate with Mexican-American and mainstream consumers of Mexican foods.
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MegaMex Foods is a free-standing entity with an independent management team
based in Chino, Calif. MegaMex Foods will optimize efficiencies by leveraging
core competencies of the parent companies, such as manufacturing, research and
development and the supply chain.

More federal money comes back to Minn. via biz contracts

Here's a few area companies that were awarded federal contracts. The contract with the University of Minnesota regents struck me as interesting, because the U.S. Space and Naval Warfare Systems Command, San Diego is the military entity that Mayo Clinic has a long relationship with and currently has a Special Purpose Processor Development Group lab in the Mayo Support Center at 4001 41st St. N.W. focusing on contracts with the military group.

Federal documents show that much of the Mayo work is electronic in nature, but I wonder if the U of M would work with Mayo on this nanopost array for DNA fingerprinting

$38,700 Federal Contract Awarded to Winona Heating & Ventilating

WASHINGTON, Sept. 26 -- Winona Heating & Ventilating Co. Inc., Winona, Minn., won a $38,700 federal contract from the U.S. Army Corps of Engineers, St. Paul, Minn., for the replacement of the roofing system on the Central Control Station at Lock and Dam 3 under the American Recovery and Reinvestment Act.

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$40,001 Federal Contract Awarded to Riverland Community College

WASHINGTON, Sept. 24 -- Riverland Community College, Austin, Minn., won a $40,000.80 federal contract from the U.S. Department of Justice's Bureau of Prisons, Waseca, Minn., for an advanced occupational education.

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$49,376 Federal Contract Awarded to Kemps LLC

WASHINGTON, Sept. 22 -- Kemps LLC, Rochester, Minn., won a $49,376 federal contract from the U.S. Department of Justice's Bureau of Prisons, Rochester, Minn., for milk and dairy products.

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MILITARY $123,831 Federal Contract Awarded to Regents of University of Minnesota

WASHINGTON, Sept. 24 -- Regents of University of Minnesota, Minneapolis, won a $123,831 federal contract from the U.S. Space and Naval Warfare Systems Command, San Diego, for research and development on nanopost array for DNA fingerprinting.

Tasting event in Austin tonight…tequilla tasting

Here's a note from Dave Olson, owner of Apollo Liquors & Superette at  903 Oakland Ave. N.W. in Austin:

Tequila Tasting tonight, Friday Sept. 18, at the Austin Elks Club.

We will be starting at 5 p.m. and tasting until 8 or 9 p.m. Chips and salsa provided. Cost $5 per person. We will be sampling the Reposado, Anejo and Blanco from 3 great producers including Herradura, El Jimador and Don Eduardo.

We will also have a few Mexican beers to sample tonight. This is an informal tasting, on a come-and-go basis.

Unemployment takes a dip locally

Here's a little from a piece by my colleague Mike Klein:

A boost in tourism jobs breathed life into southeastern Minnesota's labor market in July, with employment rising by 200 since June in Mower County alone, according to the Minnesota Department of Employment and Economic Development.

Mower County's jobless rate was 6.2 percent in June, down from 6.8 percent in June but still higher than last year's 4.6 percent. The number of jobless people totaled 1,325, down from 1,445 in June.

The jobless rate in the 11-county region was 7.2 percent in July, down from 7.8 percent in June, but up from 5 percent a year ago. It remains lower than the state rate of 7.8 percent and the national rate of 9.7 percent.

The job market was slowly improving in spring but suddenly worsened in June, so observers were watching July closely to see if the recovery resumed, said Jennifer Ridgeway, DEED labor market analyst.

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A particularly bright spot was the leisure and hospitality sector, she said. After steady job losses for 18 months, the sector gained jobs in June and July compared to the previous year, Ridgeway said. In July, it accounted for 9,508 jobs in the Rochester metropolitan area (Olmsted, Wabasha and Dodge counties), up 2.4 percent from a year ago, even as most sectors stayed steady or declined slightly.

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Ian Freeburg, president of the Rochester Lodging Association and general manager of the SpringHill Suites Hotel, said business at his hotel has picked up in recent months and his hotel has hired a few extra people.

The Jehovah's Witnesses convention, as well as other conventions brought in by the Convention and Visitors Bureau, provided a healthy boost this summer, Freeburg said.

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However, retail trade jobs were down 1.4 percent over the year in the Rochester metro area, so consumer spending is still slow.

Education and health jobs, a powerhouse in Rochester because of Mayo Clinic, continued to gain. The sector accounted for 43,072 jobs, up 1.9 percent from a year ago, in the Rochester metro area.

More on Hormel's earnings

Here's what I whipped together on Hormel this a.m. (after writing my column. You'd think I'd be better at deadlines after 17 or years in this business). One tidbit I found interesting is that Hormel ended its joint venture deal selling Carapelli Olive Oil. Not sure when that happened or why. 

The things you learn during the course of a day. Anyway, here's the print piece:

Despite difficult terrain and low sales numbers, Hormel Foods Corp. is staying on pace to deliver on its forecast of better-than-expected 2009 earnings.

The Austin-based Fortune 500 food giant’s third quarter earnings report this morning backed up its announcement last week that 2009 is going to exceed its earlier expectations.

Earnings for the quarter were up by 50 percent, to 57 cents a share from 38 cents share in the same quarter in 2008. The net earnings for the quarter is $77 million, a big jump from last year’s $51.9 million.

Analysts polled by Thomson Reuters had predicted 52 cents per share in profit.

Revenue fell 6 percent to $1.57 billion from $1.68 billion. Analysts had expected $1.7 billion.

Much of the gains came from positive results from two segments — refrigerated foods and Jennie-O Store — that previously have taken big hits in the rough economy.

“Our refrigerated foods segment rebounded to post higher earnings on an enhanced sales mix and lower costs, despite weak cutout margins during much of the quarter.

Our Jennie-O Turkey Store segment also showed continued improvement in the quarter,” wrote CEO and President Jeffrey M. Ettinger in today’s announcement.

Refrigerated foods’ operating profit climbed by 60 percent compared to 2008, while profit from Jennie-O’s birds soared 97 percent.

Counterbalancing those big numbers is the sobering fact that Jennie-O’s profit was down 61 percent in 2008’s third quarter because of a whopping $53 million increase in feed costs; refrigerated foods was down by 1 percent.

Despite the better profit numbers for this quarter, sales for the company overall were down by 6 percent, to $1.6 billion.

A major factor for this, Hormel officials say, is subtraction of sales of Carapelli olive oil following the end of that joint venture as well as reductions of turkey production for international sales.

A continuing trend of people eating more at home benefited the grocery products segment yet again, despite “soft sales” of its previously strong Home Compleats microwave meals products.

The segment reported an increase in operating profit by 11 percent, much of that built on strong sales of Spam, Hormel chili and Herdez food products.

Ettinger characterized all of this as meaning Hormel is on track to hit its recently increased annual 2009 earnings forecast to the range of $2.36 to $2.42 per share.

“Although we are faced with challenges including the weak economy, a continued excess supply of commodity turkey meat, and difficult export markets, our balanced business model, continued strength in our core franchise products … should allow us to deliver an excellent year,” he said.

Hormel seems on track after 3Q earnings report

Despite difficult terrain, Hormel Foods seems to be staying on pace to deliver on its forecast of better-than-expected 2009 earnings. 

 This morning's 3Q earnings report looks pretty solid at first glance, particularly in previously battered refrigerated foods and Jennie-O Turkey Store areas. Here's some directly from Hormel's earnings' report. After I take a closer look at this, I'll have more.

HIGHLIGHTS

• Diluted EPS of $.57, up 50 percent from $.38 per share in 2008

• Segment operating profit up 33 percent from last year

• Dollar sales of $1.57 billion, decreased 6 percent from 2008

• Volume down 4 percent from 2008

• Grocery Products operating profit up 11 percent; volume down 8 percent; dollar sales down 6 percent

• Refrigerated Foods operating profit up 60 percent; volume down 1 percent; dollar sales down 5 percent

• Jennie-O Turkey Store operating profit up 97 percent; volume down 2 percent; dollar sales down 5 percent

• Specialty Foods operating profit down 2 percent; volume down 13 percent (down 16 percent excluding acquisitions); dollar sales down 13 percent (down 15 percent excluding acquisitions)

• All Other operating profit down 19 percent; volume down 4 percent; dollar sales down 10 percent

• Net Interest and Investment Income improved significantly due to gains in the rabbi trust investments versus losses a year ago.

The company reported fiscal 2009 third quarter net earnings of $77.2 million, up 49 percent from earnings of $51.9 million a year earlier. Diluted earnings per share for the quarter were $.57 this year compared to $.38 per share last year. Sales totaled $1.6 billion, which were down 6 percent from fiscal 2008. For the nine months ending July 26, 2009, net earnings were $238.9 million, or $1.76 per diluted share, up from $1.58 a year earlier. Sales totaled $4.9 billion, which are even with last year.

Hormel's new "MegaMex" deal

Here's some from a press release this a.m. from Austin's favorite Fortune 500 company:

Hormel Foods and Herdez Del Fuerte today announced a definitive agreement to create MegaMex Foods, a 50/50 joint venture to market Mexican foods in the United States.:

The venture will significantly expand the existing agreement between the
two companies and produces a portfolio with initial revenue of about $200
million. The comprehensive portfolio includes brands and products, such as CHI-CHI’S®,  HERDEZ®, LA VICTORIA®, EMBASA® and DOÑA MARÍA®, among others, which resonate with Mexican-American and mainstream consumers of Mexican foods.

“This expanded, long-term agreement with Herdez Del Fuerte is an example of how we continue to look to diversify our product portfolio,” said
Jeffrey M. Ettinger, chairman of the board, president and chief executive
officer at Hormel Foods. “MegaMex Foods will have the scale and skill set
to establish leadership in Mexican foods and grow the category. The
collaboration should allow us to better serve both the growing U.S.
Hispanic population and the vast numbers of the general population who love Mexican food.”

“MegaMex Foods will combine the premier Mexican food products and brands of Herdez Del Fuerte with the strength in manufacturing and distribution of Hormel Foods,” said Juan Marco Gutiérrez Wanless, chairman at Herdez Del Fuerte. “This is an important step toward delivering on our ongoing growth and profitability strategy and making us stronger for the future, as we increase presence nationwide.”

In order to provide focus to the business, MegaMex Foods will be a
free-standing entity with an independent management team based in Chino, Calif. MegaMex Foods will optimize efficiencies by leveraging core
competencies of the parent companies, such as manufacturing, research and development and the supply chain.

Lawyer returns to Austin

Here's some from a piece this morning by colleague in Austin, Karen Colbenson:

Business savvy Paul Egtvedt has worked with some of Minnesota’s top attorneys from Fortune 500 companies and has his own office in the IDS Tower in Minneapolis, but when his entrepreneurial spirit and heart called him back to his hometown, he listened.

Born and raised in Austin, Egtvedt worked for various large law firms in Minneapolis before opening his own law firm there in 2003. He recently decided to leave the big city behind and return to his original home to open a firm on Main Street.

His office is located on the top floor of the 111 building.

The graduate of Cornell University said he chose to return to Austin so he could be closer to his family and to marry and settle down with his fiancee, Heather Wittstruck, who teaches at Southgate Elementary School. 

He also believes his experience working on complex issues for large businesses will be beneficial in a smaller community like Austin.

Egtvedt practices in several areas of law, including employment, labor law, business and corporate law, personal injury, criminal defense and land use. He said he most enjoys working on employment issues because he’s intrigued by human behavior.

Hormel reports record earnings

Here's some from the earnings report Austin stalwart Hormel Foods just kicked out. It looks like it recovered from the Swine Flu. I'll know more once I read this piggy in depth.

The company reported fiscal 2009 second quarter net earnings of $80.4 million, up 4 percent from earnings of $77.6 million a year earlier. Diluted earnings per share for the quarter were $.59 this year compared to $.56 per share last year and sales totaled $1.6 billion, even with fiscal 2008. For the six months ended April 26, 2009, net earnings were $161.8 million, or $1.20 per diluted share, the latter of which was even with last year. Sales totaled $3.3 billion, up 2 percent, from $3.2 billion in the same period last year.

COMMENTARY

"We are pleased to report record earnings for the quarter. Our Grocery Products segment again delivered increases in sales and segment profit, with strong sales of canned meats and Mexican products. Our Jennie-O Turkey Store segment continues to rebound, despite difficult market conditions, as they were faced with even lower commodity meat prices than in the first quarter," said Jeffrey M. Ettinger, chairman of the board, president and chief executive officer.

"Our Refrigerated Foods segment experienced another difficult quarter, as continued weak cut-out margins led to losses in our pork operations. The overall weakness in this segment masked a very strong performance by our Meat Products group, which achieved high single-digit sales increases of its branded portfolio of products. Our Specialty Foods segment was essentially flat, while our All Other segment had weaker results," remarked Ettinger.

"We have seen a continuation of some of the same trends we saw in the first quarter, as consumers seek value in retail channels while foodservice sales remain soft. Unlike the first quarter, however, we have seen improvement in sales of some of our convenience items, including our refrigerated entrees and our COMPLEATS microwave meals," commented Ettinger.