Archive for May, 2011

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Yongye International Inc. (YONG) stock soars after major investment

Tuesday, May 31st, 2011

Yongye International Inc. (Nasdaq: YONG) U.S.-listed shares rose 51.7% to $5.69 after the Chinese reverse-merger company announced a $50-million investment from Morgan Stanley’s Asian private-equity unit. Volume for the stock totaled nearly 8.5 million shares, or about seven times its full-day average.

Yongye intends to use the proceeds from this investment for capacity expansion, repayment of commercial bank debt, working capital, and general corporate purposes.

Yongye Chief Executive Officer, Zishen Wu commented, “We are pleased that MSPE Asia, one of the leading private equity investors in the region, has decided to make a significant investment in our company. Yongye and MSPE Asia have structured a long-term cooperation based on our mutual belief in the strong prospects for our products and nationwide distribution network.”

Wu continued, “Specifically, we are providing multi-year profit commitments to MSPE Asia which, upon their achievement, results in up to a $15.00-per-share conversion price for the convertible preferred stock we are issuing. This investment will assist us in strengthening our balance sheet and positioning us to meet the growing demand for our Shengmingsu agricultural nutrient products.”

Yongye International is a leading agricultural nutrient company headquartered in Beijing, with its production facilities located in Hohhot, Inner Mongolia. Yongye produces and markets two lines of organic nutrient products: a liquid nutrient product which is sprayed on plants and a powder nutrient product which is added to animal feed.

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Central Vermont Public Service Corp. (CV) hikes on Fortis buyout

Tuesday, May 31st, 2011

Central Vermont Public Service Corp. (NYSE: CV) shares surged 40.1% to $34.06, a day after Canadian utility Fortis Inc. said it would acquire the electricity distributor for about $470 million. Volume for the stock neared 406,000 late Tuesday morning, more than 10 times its full-day average.

The all-cash transaction will provide CVPS shareholders $35.10 per share, a 44% premium over the CVPS common share closing price of $24.32 on Friday, May 27.

“CVPS is a well-run utility whose operations and operating philosophy are very similar to those of our Canadian regulated utilities,” said Fortis CEO Stan Marshall.

“The commitment of CVPS to customers, as evidenced by the company’s stellar customer service record, is very much aligned with the operating philosophy of Fortis — to provide our customers with safe, reliable service in the most cost-efficient and environmentally responsible manner possible,” he explained.

CVPS will remain headquartered in Rutland, Vermont with Larry Reilly as President and CEO, and Marshall added “There are no job losses anticipated with this transaction.”

“Fortis and CVPS share a deep commitment to the environment, our workers and the people and places that host our businesses,” Reilly said. “While the share offer price by Fortis was a critical consideration by the CVPS Board, the fact that CVPS would essentially be preserved as a stand-alone autonomous company within the Fortis Group was also an important consideration for the CVPS Board.

The Fortis Group of Companies has regulated utility companies operating in five provinces of Canada — British Columbia, Alberta, Ontario, Prince Edward Island and Newfoundland — and three Caribbean countries.

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Syms Corp. (SYMS) shares soar as Board seeks options

Thursday, May 26th, 2011

Syms Corp. (Nasdaq: SYMS) saw its shares surge by 25.9% Wednesday afternoon to $9.38, after the operator of Filene’s Basement stores and its own namesake chain said it has hired Rothschild Inc. to explore strategic options for the company. Volume for the stock topped 148,000 shares, or more than 12 times its full-day average.

The company, based out of Secaucus, New Jersey, said its Board of Directors has initiated a process to explore and evaluate various potential strategic alternatives, which may include a possible sale of the Company. The Company has retained Rothschild Inc. as its exclusive financial advisor to assist the Company in connection with the strategic review process.

There is no defined timeline for this strategic review and there can be no assurance that the review of strategic alternatives will result in any specific action or transaction. Syms does not intend to comment further regarding the evaluation of strategic alternatives, unless a specific transaction is approved or review process is concluded, or it otherwise deems further disclosure is appropriate or required by law.

Management was not available for comment.

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Guess Inc. (GES) Q1 numbers send shares skyward

Thursday, May 26th, 2011

Guess Inc. (NYSE: GES) shares rose 12.2% to $44.99 a day after the clothing retailer reported first-quarter earnings that beat analysts forecasts. Volume for the stock was 4.1 million shares or quadruple its full-day average.

Wednesday, the Company reported net earnings of $42.7 million, a 15.2% decrease compared to net earnings of $50.3 million for the first quarter of fiscal 2011. Diluted earnings per share decreased 14.8% to $0.46, compared to $0.54 for the prior-year quarter. The current quarter’s earnings per share include $0.09 in net unrealized mark-to-market charges related to foreign currency contracts and balances, while the prior-year quarter’s earnings per share included a $0.04 charge related to the acceleration of pension cost amortization.

Revenues jumped across all operating sectors, with Asian revenues increasing 24%, European revenues growing 12%, North American retail revenues surging 5%, and North American wholesale revenues spiking 7%. Total net revenue for the first quarter of fiscal 2012 increased 9.8% to $592.2 million from $539.3 million in the prior-year quarter. In constant dollars, total net revenue increased 7.9%.

Guess CEO Paul Marciano commented, “We are pleased with our first quarter performance, with all of our businesses delivering earnings within or beyond our previous expectations. We continued to expand the global presence of the Guess? brand, with each of our segments growing in the quarter.

“Europe and Asia continued to drive that expansion, individually delivering double digit revenue increases, which combined to represent almost two-thirds of the Company’s top line growth. Our team executed well, managing costs and inventories tightly, which produced an operating margin that was two full points stronger than our previous expectations.”

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Zale Corp. (ZLC) proves a jewel as shares hike

Wednesday, May 25th, 2011

Zale Corp. (NYSE: ZLC) shares jumped 21% to $5.35, after the diamond and jewelry retailer reported third-quarter revenue that beat analysts’ expectations. Volume for the stock was 4.3 million shares, or more than 10 times its daily average.

Zale announced that for the third fiscal quarter ended April 30, 2011, it had a net loss from continuing operations of $10 million, or $0.31 per share, compared to a net loss from continuing operations of $15 million, or $0.46 per share, in the comparable quarter last year.

Revenues for the quarter were $412 million, an increase of $52 million, or 14.5%, compared to $360 million in the same period last year. Comparable store sales during the quarter increased 15.2%, compared to a decrease of 2.2% during the same period last year. At constant exchange rates, which exclude the effect of translating Canadian currency denominated sales into U.S. dollars, comparable store sales increased 14.2% for the quarter.

Zale CEO Theo Killion commented, “We continue to make progress in our multi-year initiatives to return the Company to profitability. Our results validate that the work we’ve done to improve our marketing, our product and our guest experience is beginning to take hold.”

“This quarter marked the second consecutive quarter of positive same store sales,” concurred CAO/CFO Matt Appel. “We are pleased with the trend of improved financial performance resulting from our turnaround initiatives.”

Irving, Texas-based Zale Corporation is a leading specialty retailer of diamonds and other jewelry products in North America, operating approximately 1,845 retail locations throughout the United States, Canada and Puerto Rico, as well as online.

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