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11 posts from April 2014


Energy Future Holdings files 2013 earnings

Energy Future Holdings, which on Tuesday filed for Chapter 11 bankruptcy, lost $2.3 billion in 2013, the Dallas-based energy giant said in a government filing. The company had delayed the filing as it conducted restructuring negotiations with creditors.

For the first time since the buyout of the former TXU Corp. in 2007, EFH saw its revenues increase, to $5.9 billion from $5.6 billion in 2012. But a $1 billion charge and, higher fuel and purchased power costs and $2.7 billion in interest and related charges produced the net loss, which compared to a loss of $3.4 billion in 2012.

EFH’s earnings included $335 million from its 80 percent ownership stake in Oncor Electric Delivery, a regulated utility that operates most of the power lines in North Texas. In a separate filing in March, Oncor had reported $432 million in net income on revenues of $3.6 billion.

-- Jim Fuquay


Del Frisco's serves up higher profits for investors

Shares of Southlake-based Del Frisco's Restaurant Group jumped nearly 7 percent today after the company reported higher sales and profits for its first quarter ended March 25.

Net income was $4.5 million, or 19 cents a share, compared to $3.6 million, or 15 cents, in the first quarter of 2013. Consolidated revenues increased 11.4 percent to $66.6 million as the company added six Del Frisco grille restaurants. On a comparable-store basis, revenues increased by 5.5 percent.

CEO Mark Mednansky said the higher comparable restaurant sales were due to the strength of its flagship Double Eagle steakhouses. But he also had positive things to say about the new Del Frisco Grille concept, which opened in Fort Worth and Southlake last year.

"As shared previously, we engaged an outside consulting firm, Tango Analytics, to conduct research on the Del Frisco's Grille domestic market potential. Their findings point to the possibility of developing in excess of 170 Del Frisco's Grilles over time across a diversity of settings based upon minimum average unit volumes of approximately $5.2 million. With 11 successful openings thus far, our dominant expansion vehicle clearly has a long runway of opportunity ahead of it and we intend to bring this 'next generation' dining experience to markets across the country while upholding our strict development criteria. This year, we will be opening a total of five Grilles on both coasts, including one whose lease was recently signed for Pasadena, CA. We are also excited to be building a Del Frisco's Double Eagle in our nation's capital, a market that should prove very receptive to our premier steakhouse concept."

The company offered the following guidance for 2014: comp-restaurant sales gains of 1.5-2.5%; earnings per diluted share of 94 to 98 cents; one new Del Frisco's Double Eagle Steak House and five new Del Frisco grilles.

-- Steve Kaskovich

Whole Foods to open store at Waterside development in Fort Worth

Whole Foods will open its first store in Fort Worth at the Waterside development being developed by Trademark Property on the site of the former Lockheed Martin Recreation Association.

According to the developer, the 45,000-square-foot store will include the company's large selection of natural and organic products and will include a large outdoor seating area.

Said Trademark's CEO Terry Montesi: “We are thrilled to bring Whole Foods Market to Fort Worth. There is no retailer more in demand in our hometown than Whole Foods Market and it’s the perfect fit for our development."

Waterside, being developed along the Trinity River, will include 185,000 square feet of retail space and riverside restaurants, 20-30 acres of multi-family and townhomes, 100,000-200,000 square feet of office space, and a hotel site. The first phase is scheduled to open in the fall of 2015.

Austin-based Whole Foods operates a store in Arlington and will open a store along Texas 26 in Colleyville later this summer.

-- Steve Kaskovich


Energy Future Holdings bankruptcy filing expected soon, reports say

Dallas-based Energy Future Holdings is near a deal that would give it $9.7 billion in financing to use during a bankruptcy proceeding, Reuters reported Monday. The news service said the state's biggest electricity company is expected to file a Chapter 11 bankruptcy petition on Tuesday, a move Reuters said it would make  whether or not all its creditors are on board with a restructuring plan.

Also Monday, The Wall Street Journal said EFH was finalizing a reorganization pact with its largest creditors that would shorten its bankruptcy proceeding. It said a Chapter 11 filing was expected within 48 hours. The Journal also said the company is expected to go ahead with its petition this week even without an agreement with creditors.

The company faces a May 1 expiration of the grace period on a debt payment EFH skipped a month earlier. It has been burdened with close to $40 billion in debt from the 2007 buyout of the former TXU Corp. The investors that led the buyout -- KKR, TPG Capital and Goldman Sachs -- have written off nearly all the $8.4 billion that they and their clients put into the deal, and lenders who financed the buyout have also taken big losses. EFH has said it does not expect a bankruptcy filing to affect its day-to-day operations. The company includes Luminant Generation, TXU Energy, a big electricity retailer, and Oncor Electric Delivery, which operates most of the  power lines serving North Texas.

-- Jim Fuquay  


Lawsuit accuses Texas electricity company of market manipulation

GDF Suez, a Houston-based power generator with facilities around the state including in Wise and Ellis counties, has been accused of market manipulation by two electricity trading firms who say Suez's actions have cost them millions. The suit was filed Tuesday in Houston federal court by Aspire Commodities LP and Raiden Commodities LP. It follows reports last year by Platts, a specialty news publisher, that said GDF Suez's activities have become a concern to participants in the state's largest power market, the Electricity Reliability Council of Texas. GDF Suez said Thursday it had no comment on the suit as a pending legal matter.

According to the lawsuit, available here: Download GDF Suez suit, GDF Suez North America "intentionally withholds electricity generation during times of tight supply, for reasons not explained by rational notions of supply and demand, but to use its power in times of such tight supply to drive prices in the ERCOT Real Time market higher. GDF Suez then dumps its electricity at the artificially high price it created to make excessive, artificial profits not supported by genuine supply and demand." The suit also claims Suez has taken actions that have on occasion cost it millions in the ERCOT market "because it can make more elsewhere –- namely, by trading with inside, superior knowledge on commodities markets" through its own electricity trading operations. Barry Hammond, a Houston attorney representing Aspire and Raiden, said he expects during the discovery phase to "lay bare the trading strategies" by Suez companies.

Besides ERCOT's own rules, electricity traders are overseen by the Public Utility Commission of Texas. The agency has a provision, called the "small fish" rule, that exempts from market manipulation charges any generator with less than 5 percent of the state's power market. The lawsuit says Suez has just under 5 percent, and Aspire and Raiden also filed a petition with the PUC asking it to rescind the small fish rule. PUC spokesman Terry Hadley said the agency has 60 days to act on such a petition and has begun taking comments on the petition. He said it was the first such request he was aware of, adding that the small fish rule was last amended in 2006.

-- Jim Fuquay


First Cash earnings up 12 percent in first quarter

Arlington-based First Cash Financial Services earned $22.7 million, or 77 cents a share, in the year's first quarter, up 12 percent from a year earlier, on $170 million in revenue. The operator of 830 pawn shops in the U.S. and Mexico said those results included a one-time tax benefit of 12 cents a share. Wall Street analysts' consensus estimate for the quarter, which typically excludes unusual items, was 66 cents a share. First Cash's shares (ticker: FCFS) were virtually unchanged in mid-morning trading.

The company said it closed 37 of its Cash & Go locations that make short-term loans, also called payday loans, during the quarter and will continue to reduce its payday lending activity. In the first quarter payday lending accounted for 6 percent of revenue and is expected to account for less than 5 percent by year's end, said CEO Rick Wessel. The company said payday loan revenue was down 17 percent in the quarter compared to a year earlier and "represents a continuation of regulatory and competitive pressures facing store-based payday lenders, especially in Texas." Profit from the sale of scrap jewelry fell 46 percent as the price of gold fell 21 percent and First Cash' scrap jewelry volume was down 28 percent.

The number of outstanding pawn loans was up 30 percent in the U.S. and up 11 percent in Mexico. Overall, the dollar amount of outstanding pawn loans rose 12 percent, reflecting a smaller average loan value and lower loan values on jewelry-secured pawns.

-- Jim Fuquay







Oncor could be attractive asset under EFH restructuring, analysts say

Oncor Electric Delivery, which operates the wires that distribute electricity to much of North Texas, is worth billions to other utilities that might be interested in acquiring it in an expected bankruptcy restructuring by its corporate parent, Dallas-based Energy Future Holdings, analysts say. Bloomberg News reports that several utilities as well as outside investors would be attracted by Oncor's steady, regulated earnings and presence in a growing market if the unit is split off from EFH. A link to the story is here.

-- Jim Fuquay


Six Flags partnering on deal to build a theme park in Dubai

Grand Prairie-based Six Flags Entertainment Corp. is broadening its international reach beyond North American to the Middle East.

The regional theme park owner and operator said it is partnering with Meraas Leisure and Entertainment, a Dubai-based real estate development company, to open a Six Flags-branded park in Dubai.

The project will open in 2017 and will be located in the multi-themed park project in Jebel Ali started by Meraas, Six Flags said.

Terms of the arrangement were not disclosed.

 "The cornerstone of our international expansion strategy has always been finding the right partner in the right location and, with Meraas in Dubai, we have done exactly that," saidJim Reid-Anderson, Six Flags Entertainment president and chief executive, said in a news release. “We are honored to be working with this world-class organization as the first significant strategic step taking the Six Flags brand to growing and successful markets outsideNorth America." 

Raed Al Nuaimi, Chief Leisure and Entertainment Officer, Meraas L&E, said: "We are delighted to have a world-leading theme park company and a brand like Six Flags on board. We are confident their presence will perfectly complement our project and further enhance our overall offerings in the leisure and entertainment space."

"As part of our commitment towards creating one-of-a-kind experiences and contributing towards the Dubai Tourism Vision 2020, our association with Six Flags will help us develop a world-class destination that redefines the industry and positively impacts the regional tourism sector."

Six Flags has revenues of $1.1 billion annually. It has 18 parks in the U.S., Mexico and Canada.

Meraas L&E is the leisure and entertainment arm of Meraas Holding, which develops master-planned communities. It is tasked with developing a portfolio of innovative landmark projects that redefine Dubai's tourism and entertainment landscape, Six Flags said. 

_ Sandra Baker  


Cash America's shares jump on improved earnings outlook

Shares of Fort Worth-based Cash America International (ticker: CSH) were up nearly 10 percent this morning after the pawn shop operator said first-quarter earnings should top its previous estimates. The company now expects to earn $1.50 to $1.55 a share, up from the $1.25 that was the top of its earlier outlook. Cash America said the improvement is based on lower losses on online consumer loans, better margins on retail sales and operating efficiencies. It expects to discuss its first-quarter earnings with financial analysts the morning of April 24.

Cash America also said its board authorized management to review a spin-off and other strategic alternatives for its online lending unit, Enova International. The company in 2012 withdrew plans for an initial public offering for the unit that had been announced the previous year, when it estimated an IPO could raise up to $500 million. In Thursday's announcement it said a tax-free spin-off of at least 80 percent of Enova's shares, if it takes place, would likely occur in late 2014 or early 2015. It said Enova had revenues last year of $766 million.

"We now think that pursuing a separation of the businesses and management teams into two discrete companies is potentially very beneficial for the operating activities and ongoing strategy of each business," Cash America CEO Dan Feehan said in a prepared release. "As independent companies, both Cash America and Enova would be better positioned to focus on their industry-specific business strategies and the regulatory environments related to the specific products each company offers and to recruit and hire talent oriented to each specialized business discipline."

-- Jim Fuquay



PGA TOUR Superstore plans a Southlake location this year

PGA TOUR Superstore, the Atlanta-based golf retailer, plans a store in Southlake this year. 

The store will be located at the southwest corner of Southlake  Boulevard and Kimball Avenue. It will be its third Texas store, joining two Plano locations. 

PGA TOUR is also opening stores in Orlando and North Scottsdale this year. 

“Despite a flat retail landscape in the golf industry, we have growth plans that prove experiential retail is alive and well,” said Dick Sullivan, PGA TOUR Superstore president and CEO, in a statement. “We currently have plans to grow PGA TOUR Superstore’s presence by up to 25 percent per year over the next five years in locations across the U.S.” 

PGA TOUR Superstore currently has 19 locations ranging from 40,000 to 50,000 square feet. Each store has up to 14 custom fitting simulators and practice bays.  

“What’s different about PGA TOUR Superstore is we purposely design our stores with what the golfers want from an experience and product assortment point of view,” Sullivan said.

PGA TOUR Superstores feature certified golf pros, personalized golf lessons and the best in golf technology, equipment, apparel, custom fitting and repairs. 

The stores are owned and operated by Golf & Tennis Pro Shop, Inc., whose controlling owner and chairman is Arthur M. Blank, retired Home Depot Co-Founder and owner of the Atlanta Falcons. 

_ Sandra Baker



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