Business Notes
By Staff -- TWICE, 9/2/2002
Gemstar-TV Guide Acts Against Nasdaq Delisting
Pasadena, Calif. — Television-program guides provider Gemstar-TV Guide International has requested a hearing in response to a proposed delisting notice from Nasdaq. The stock exchange took action because it said Gemstar had not complied with exchange rules by failing to file on time its Form 10-Q for the second quarter ending June 30, 2002. Gemstar requested the hearing on August 23, which will be held not less than 10 days, nor more than 30 days after the date of the request. In mid-August, Gemstar said it would delay quarterly reporting while it worked on restating financial results for the year ended 2001, checked accounting practices and considered a management restructuring proposal.
Office Depot Reports N.A. Comp-Store Sales Hurt
Delray Beach, Fla. — Hard hit by sluggish consumer spending, office products retailer Office Depot anticipates its third-quarter North American retail comp-store sales will be in the low single-digit negative range. The company reported slightly negative comp back-to-school sales halfway through the selling period, which is below original expectations. Total company-wide sales are expected to grow in the low- to mid-single-digit range for the third quarter. The retailer said that while sales remain soft, its gross margin improvement and cost control programs allow it to remain comfortable with its earnings outlook for the third quarter.
Rayovac, Europe's Varta To Combine Battery Businesses
Madison, Wis. — Rayovac has signed an agreement to combine its battery business with the global battery business of Hannover, Germany-based Varta AG. The all-cash deal, valued at $262 million, is expected to close this fall. Rayovac will acquire all of the Varta consumer subsidiaries located outside of Germany and will become the majority owner in the new joint venture entity that will conduct all consumer battery operations within Germany. Varta's consumer battery division had sales of $398 million in fiscal 2001, with 86 percent derived in Europe and 14 percent in Latin America. The combined $1 billion company would derive 45 percent of its sales from North America, 37 percent from Europe and 18 percent from Latin America.
SEC: CarMax, Circuit City Separation Registration Effective
Richmond, Va. — The Securities and Exchange Commission has declared effective the registration statement from CarMax, relating to the separation of the auto superstore business from CE retailer Circuit City. CarMax, presently a wholly owned subsidiary of Circuit City Stores, would become an independent, separately traded public company. Shareholders will vote on the proposal Sept. 10. If approved, separation is expected to become effective Oct. 1.
Court Orders Reparations For 'Crazy Eddie' Father
Philadelphia — Sam Antar, father of Crazy Eddie consumer electronics retail chain namesake Eddie Antar, has been ordered by the U.S. Third Circuit Court of Appeals to repay Crazy Eddie shareholders $15 million in illegal profit and $42.4 million in prejudgment interest. Sam Antar, along with Eddie, had created Crazy Eddie in the late 1960s, with the chain going public in 1984. Eddie Antar owned two thirds of the business and his father owned the rest. They were found guilty of artificially inflating company stock by a U.S. District Court, and it was ruled they would have to make good on unlawful profit and accrued interest. Eddie was sentenced to seven years in prison for insider trading, and since has returned about $63 million to shareholders.
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