Several E.V. businesses made big news this year - East Valley Tribune: Business

Several E.V. businesses made big news this year

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Posted: Sunday, December 26, 2004 5:36 am | Updated: 4:47 pm, Thu Oct 6, 2011.

In January, we presented a list of 10 entities — nine companies and an American Indian community — in the East Valley to keep your eye on. Our 10 to Watch didn’t disappoint. All were major newsmakers in 2004.

From Taser, whose stock price continues to defy questions about the safety of its less-lethal weapons, to America West Airlines, which found itself back in the red, these companies were in the headlines.

It was a year for mergers, acquisitions and spinoffs. Motorola’s former semiconductor division became its own company — Freescale. Soap maker Dial gave up its independence in a merger with a German consumer-products company.

Atronic Americas, the world’s second largest gaming device manufacturer, sold 50 percent of its stake to a Rhode Island company. Cox Communications was acquired by its largest shareholder, Cox Enterprises.

General Dynamics C4 Systems division in Scottsdale acquired Gilbert-based Spectrum Astro.

Here is a look at how each of the 10 to Watch fared in 2004:


Headquarters: Tempe Business: Commercial airline Annual revenue: $2.32 billion

The hometown airline expected to be profitable in 2004. But high jet fuel prices, low fares and too many low-cost carriers led to a $47 million loss in the third quarter after five straight profitable quarters.

The carriers’s goal was to have its first year in the black without government assistance in three years. Now, it says it expects to report a significant loss in the fourth quarter and the full year. The company slowed its growth plans for next year to 3 percent to 5 percent, down from 8 percent to 10 percent.

Nonetheless, in an industry that is mired in debt and over capacity, America West has hung on and grown its point-to-point routes, particularly from the West Coast and its second hub in Las Vegas.

America West’s biggest news in 2004 may have been what it didn’t do. Earlier this month, the carrier decided not to bid for bankrupt low-cost flier ATA Airlines because it said the deal would have been too costly.

America West’s stock price dipped more than 40 percent in the last year.


Headquarters: Scottsdale

Business: Makes stun guns

Annual revenue: $61.5 million

Despite a year of battling bad publicity, Taser’s revenue and stock continued to rise at astonishing rates.

The company’s stock price rose more than 250 percent in 2004, and its annual revenue increased nearly 149 percent to more than $61 million.

This month Amnesty International said more study concerning the gun’s safety is needed after 74 people died in the United States and Canada the past four years after being shocked with Tasers. In July, The New York Times reported at least 50 people, including six in June, died since 2001 after being shocked. It also reported at least two medical examiners said Tasers were partly responsible for the deaths of two people in police custody.

The company has strongly rebutted the reports, saying its guns have never been listed as the primary cause of death. They also have supplied studies of their own saying the weapon is safe. The Department of Justice is reviewing the gun’s safety.


Headquarters: Scottsdale

Business: Electronic gaming machines

Annual revenue: An estimated $200 million

Atronic, the world’s second largest gaming device manufacturer, announced earlier this month Rhode Islandbased GTech Holdings Corp., the world’s largest provider of online lotteries, purchased a 50 percent controlling stake in Atronic in an all-cash transaction valued at about $100 million to $150 million, including assumed debt.

The remaining 50 percent of Atronic will be retained by the owners of the Gauselmann Group, a family-owned German company. The planned acquisition reflects the push by GTech’s government-lottery customers to add video-lottery products, which are very similar to casino slot machines, according to the Wall Street Journal.


Headquarters: Scottsdale

Business: Consumer products Annual revenue: $1.3 billion

In March, German-based Henkel KGaA purchased Dial Corp. for $2.9 billion.

Henkel agreed to leave the soap maker and its staff based in Scottsdale and keep Dial CEO Herb Baum, who staged the local company’s remarkable turnaround, at the helm.

Dial, which makes and markets Dial soaps, Purex laundry detergents, Renuzit air fresheners and Armour canned meats, has 2,900 employees worldwide, about 600 of them working from the company’s Scottsdale headquarters and research facilities. Henkel, which makes and sells personal care products, laundry detergents, cosmetics and adhesives in 126 countries, has annual sales of 9.44 billion euros — about $11.7 billion — with 50,000 employees worldwide.

The new parent said it will boost Dial’s future with bigbucks backing, technology and other synergies.


Headquarters: Scottsdale

Business: Pharmaceutical maker and marketer

Annual revenue: $304 million

Medicis, which has carved out its niche in dermatological, pediatric and podiatric prescription products, set its sights this year on the lucrative field of cosmetic dermatology, the fastest-growing segment of dermatology, driven by the aging babyboomer population.

In 2003, the company spent $160 million, nearly two-thirds of its then-annual revenue, for the exclusive North American rights to Restylane, a collagen alternative that had been popular in 60 countries, including Canada, for several years. Then Medicis invested millions more to hire and train a dedicated sales force of 40 and to develop the materials to accompany and promote the product. In January, Restylane hit the U.S. market. Medicis sales soared 31 percent in the quarter that ended March 31, and the company’s assets topped $1 billion for the first time. Earnings jumped 36 percent.


Population: More than 6,500

Business: Salt River Gaming Enterprises (two casinos) and other endeavors

This year brought the first signs of massive commercial development on Salt River Pima-Maricopa Indian Community land bordering Loop 101.

Developer Opus West is building Opus Calendar Stick, a multibuilding project on 25 acres at the southwest corner of Via de Ventura and the freeway in the community. Four buildings are planned for the site, including three that are under construction.

The first building will house Rural/Metro’s corporate headquarters, while the second will house Cold Stone Creamery’s corporate headquarters.

Across the street from Opus Calendar Stick, construction is gearing up at Pima Center, a 209-acre business park project. About a year ago, a partnership between Mainspring Capital Corp., a Phoenix-based developer, and more than 200 Salt River community landowners resulted in the massive project.

When completed, Pima Center is expected to have at least 4 million square feet of office, industrial, retail, hotel, and other commercial space.


Headquarters: San Francisco

Business: Financial services

Annual revenue: $6.2 billion in net income in 2003

Wells Fargo, the largest bank in Arizona, continued expanding its presence in the East Valley and added more workers this year to accommodate continued population growth and demand for its products.

The nation’s leading home equity lender completed its $75 million-plus, 400,000-square-foot Ocotillo Corporate Center at Price and Queen Creek roads in Chandler. The structure will house about 2,000 employees and is the first phase of a project that eventually could include more than 1 million square feet of office space for 7,000 employees.

Also this year, Wells Fargo announced its plans to buy the investment assets of Wisconsin-based Strong Financial Corp. in a transaction that could be worth as much as $700 million.

Wells Fargo has more than 9,000 employees and more than 230 offices statewide.


Headquarters: Falls Church, Va. Business: Aerospace and defense contractor

Annual revenue: $16.6 billion

At the beginning of 2004, the Tribune predicted this would be a big year for General Dynamics C4 Systems division in Scottsdale, and that has indeed been the case. Driven by the demands of national defense, the company won major contracts for its advanced communications systems, stepped up hiring and engineered the acquisition of Gilbert-based satellite maker Spectrum Astro Corp.

One of the highlights was the July merger with Spectrum Astro, a designer of small and medium satellites for military and scientific users. As part of the merger, General Dynamics secured Spectrum’s $37 million satellite manufacturing and testing plant in Gilbert, the most modern factory of its kind in the nation. The plant opened in early 2004 before the merger was announced.


Headquarters: Austin, Texas

Business: Semiconductor company

Annual revenue: $5 billion

At the beginning of 2004 Freescale didn’t even exist. It was just a proposal by Motorola Inc. to spin off its money losing semiconductor operations into an independent company.

By the end of the year the process of establishing the new company — the third largest U.S.-semiconductor firm with $5 billion in annual sales — had been completed as planned despite softness in the semiconductor business.

In February, Motorola gave the new company its name, and in April it officially established Freescale as a legal entity although it continued to operate as an wholly owned subsidiary.

In July, Freescale sold 121.6 million shares in an initial public offering, which raised $1.58 billion — far less than Motorola had originally planned due to weak market conditions. Following the IPO, Motorola remained Freescale’s largest stockholder, but the last ties were severed on Dec. 2 by the distribution of 0.11 Freescale shares for each Motorola share. By the end of the year Freescale shares were selling at about $18 a share, up from $13 at their July opening.

Freescale continues to employ about 3,500 in the East Valley at two major chip manufacturing plants in Chandler and Tempe.


Headquarters: Atlanta

Business: Telecommunications Annual revenue: $5.04 billion

Cox Communications. which provides most of the Valley with cable TV as well as phone service and highspeed Internet — was chosen for the list because of an expected showdown with ESPN over the prices cable operators were having to pay for popular sports channels.

It was a showdown that never really happened.

The two sides came to terms in February — and sports fans never had to miss a play.

If you’re keeping score at home, Cox was the winner. The trade press reported that Cox will have to pay ESPN an average 7 percent annual increase over the next nine years. ESPN had been receiving 20 percent annual hikes.

The real big news for Cox Communications came later when Cox Enterprises, which owned 63 percent of the company, bought out the rest. The deal was completed early this month.

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