Newsbriefs

Real Estate

Five area properties part of $516 million deal

Five Central Massachusetts industrial properties, with tenants including Kraft Foods and Tyco's SimplexGrinnell, have a new landlord. KBS Real Estate Investment Trust and Hackman Capital Partners, both headquartered in California, joined Hudson-based Calare Properties in a $516 million deal to acquire 26 industrial properties around the country. The joint venture purchased the portfolio from Needham-based Equity Industrial Partners Corp. on Wednesday. KBS REIT is an 80 percent joint venture partner in the deal, and the other two companies will have a 20 percent stake in the portfolio. The central Massachusetts properties included in the deal are two Devens warehouses, one of which provides space to Kraft Foods' Veryfine Beverage Division; a Woods Equipment Company light manufacturing facility in Gardner; two warehouses in Clinton and a SimplexGrinnell flex/warehouse facility in Westminster.


Health Care

Rising costs gouge FCHP

Despite increased revenue and more members compared to last year, Worcester's Fallon Community Health Plan reported a $1.2 million net loss for the second quarter. According to FCHP, the loss comes on operating income of $2 million, an operating loss of $3.2 million and revenue of $230 million for the quarter. At the end of the quarter, FCHP reported 189,655 members. For the second quarter of 2006, FCHP reported net income of $2.9 million on revenue of $211 million, and 171,400 members. FCHP said the loss comes as it enacts cost control measures to battle rising hospitalization and drug costs.

High Tech

IBM plans consolidation in state

IBM announced plans to open the largest software campus in Massachusetts in 2008. The software campus, comprised of sites in Littleton and Westford will consolidate 3,400 of IBM's employees. Two-thirds of IBM's nearly 5,000 employees in the state focus on the software part of IBM's business. IBM predicts that its highly profitable software unit will represent 50% of IBM's overall profit by 2010. Since 1995, IBM's software business has grown organically and through strategic acquisitions. IBM has acquired nine Massachusetts-based companies including Lotus Development Corp., Rational Software Corp., Ascential Software Corp., and most recently Watchfire Corp. based in Waltham. Currently, IBM employees are spread across eight sites throughout Massachusetts. Once the transition to a new campus is complete, IBM's Massachusetts presence will consist of four sites in Cambridge, Waltham and the new Littleton/Westford software campus.

Woburn co. disputes Caliper patent

A Woburn company says a patent granted to Hopkinton-based Caliper Life Sciences yesterday is invalid, and has filed a re-examination request asking the U.S. Patent and Trademark Office to revoke the patent. VisEn Medical Inc. of Woburn says the patent covers basic methods of in vivo imaging that were already "fundamentally understood in the industry," and were "well known and in use" before the patent was applied for. VisEn develops and commercializes fluorescence in vivo imaging technology, and was founded in 2000 by academic medical researchers. In vivo imaging allows non-invasive insight into living organisms, and helps to understand metabolic processes and diseases related to changes in the body.

Defense development dollars for Fitchburg cos.

Two Fitchburg companies, Headwall Photonics and mZeal Communications will share $3 million from the U.S. Department of Defense. The funding is part of the U.S. House of Representatives Department of Defense appropriations bill, which was passed earlier this month. Headwall will receive $2 million per the bill, and will use the money to develop miniature high performance imaging sensors for unmanned ground vehicles and aircraft. The sensors can be made to target nearly anything from chemicals, to enemy uniforms to specific species of trees. Defense contractor mZeal will use its $1 million to develop an automated communication system that could warn combat troops of impending ambushes and other dangers.


Making fuel from plants one step closer

A technology licensed from the University of Massachusetts has the potential to make the production of ethanol from plant matter economical. SunEthanol Inc., an Amherst-based biofuel technology company, said it has secured financing from four venture investors to develop plant-based ethanol around its Q Microbe technology. The Q Microbe was found in the Quabbin Reservoir. The Q Microbe technology is licensed to SunEthanol by UMass. SunEthanol said the venture funding would help the company get its cellulose-based ethanol to market faster. The company said it can make ethanol from switchgrass, corn, wheat straw, sugar cane and wood pulp.

Arrhythmia's 2Q earnings skip a beat

Fitchburg-based Arrhythmia Research Technology Inc. and its wholly-owned subsidiary Micron Products Inc. reported second quarter net income of $446,000 on revenue of $5.4 million. For the second quarter of 2006, the company reported $4.6 million in revenue and net income of $577,000. The company, which makes sensors and other components for medical devices, said that while net income for the quarter was down compared to last year, it was "up significantly" from the first quarter as the result of "cost control strategies."

AMSC losses deepen as orders, revenue soar

Westborough-based American Superconductor Corp. said it lost $9.7 million during the first quarter despite a 41 percent revenue increase. The company reported first quarter revenue of $19.8 million, up from $14 million for the first quarter of 2006. But "a number of unusual items" sent the company's net loss from $6.7 million during the first quarter of 2006 to the $9.7 million loss it reported today. The company said it had to pay $2.9 million in charges related to its stock price and market valuation and restructuring charges. AMSC also wrote off a product it had intended to ship to a customer, and spent $1.2 million paying down acquisition-related debt. By the close of the quarter, the company reported $75 million in backlog orders and contracts. Just after the quarter closed, AMSC received an order from Sinovel Wind in China, which pushed the backlog to $140 million.

IPG reports 33 percent net increase

Oxford-based fiber laser-maker IPG Photonics Corp. reported drastic gains for the second quarter, including 37 percent revenue growth compared to the same quarter a year ago. The company reported net income of $6.4 million for the quarter, a 33 percent increase over the second quarter of 2006. Revenue for the quarter came in at $44 million, according to the company. Operating income at IPG stood at $10.1 million at the end of the second quarter, a 35 percent increase over the $7.5 million in operating income the company reported last year. The company said the increases were due to strong sales of its fiber laser products, which are displacing traditional lasers used in materials processing. That segment of the company's business increased by 47 percent over the second quarter of last year, the company said. The company said it expects third-quarter revenue between $44 and $49 million.

New international face for Sepaton

Sepaton Inc. has hired a new vice president of marketing, Asim Zaheer. Zaheer takes over for Linda Mentzer, who the data storage company said would become a product strategy consultant. Zaheer will be responsible for Sepaton's global business development, marketing and communications. His hiring is part of the company's effort to make itself and its products more visible around the world. Zaheer comes to Sepaton from Hitachi Data Systems.

Biotech

Averion posts losses

Averion International Corp. of Southborough reported a second-quarter net loss of $577,253 on revenue of $9.8 million. For the second quarter of 2006, the company reported a net loss of $912,140. The company's net loss for the first half of 2007 was $2.5 million, compared to $1.9 million for the first half of 2006. The company, which does clinical research in oncology, medical devices, dermatology and nephrology, said it is growing on its way to profitability, and reported clinical operating income of $817,000 compared to a $46,000 loss for the second quarter of 2006. The company also said it did $27.5 million in new business during the first half of the year, and holds a backlog of $43.9 million.

RXi parent posts $6.2M 2Q loss

CytRx, the Los Angeles-based parent of Worcester's RXi Pharmaceuticals, reported a $10.8 million net loss for the first half of the year, $6.2 million of which was lost during the second quarter. The company's $6.3 million second quarter research and development spending was double that of the second quarter of 2006. The company said $2.3 million of that research and development spending was for the purchase of licensing rights from the University of Massachusetts Medical School by RXi. RXi also nearly doubled CytRx's general and administrative spending to $4.5 million for the quarter, and the company also spent $900,000 in "our efforts to comply with the Sarbanes-Oxley Act."

Quarterly loss triples at Caliper

Caliper Life Sciences Inc., a Hopkinton-based drug research services company, reported a second quarter net loss of $6.3 million compared to a loss of $2.1 million for the same period a year ago. The company said the losses were incurred as Caliper made $35.3 million in revenue, a 45 percent increase over the second quarter of 2006. Caliper said its revenue growth was the result of its Aug. 2006 acquisition of Xenogen, a Hopkinton-based biotechnology company, and Caliper's newfound ability to sell Xenogen's products. However, Caliper reported that the gains it made from the Xenogen acquisition were offset by a drop in license fees and contract revenue, which dropped by 20 percent compared to the second quarter of 2006. The company said a significant part of the drop in licensing fees was that it no longer has a licensing agreement with Canon U.S. Life Sciences Inc. The company said it expects revenue growth between 19 percent and 34 percent for the third quarter.

Tide of winged death stemmed by UMass vaccine

Using a vaccine created by the University of Massachusetts Medical School, New Mexico-based CytoDyn has developed a DNA vaccine for the dreaded Bird Flu. CytoDyn said it enhanced a UMass-created vaccine and found that it caused mice to develop antibodies against the bird flu. The company said that without the enhancements, the UMass vaccine was less effective against the bird flu. The company said its vaccine is enhanced with the Vietnam 1203 HA gene. CytoDyn said its vaccine could be used alongside traditional bird flu vaccines.

Professional services

Worcester firm focuses energy on revenue

Worcester-based World Energy Solutions Inc. says higher operating expenses brought its second-quarter net loss to $1.2 million from $179,000 last year. The net loss came as the company reported a 51 percent revenue increase to $1.9 million compared to $1.3 million during the second quarter of 2006. The company said its backlog had reached $6 million by the end of June. Also during the quarter, the company acquired EnergyGateway LLC, an online broker of commercial natural gas and electricity, expanded its list of clients, and agreed to help the state "green its energy portfolio."

Employees and teens beware, drug testing co. growing

Psychemedics Corp., an Acton-based company that tests hair for evidence of drug abuse, has been listed in Fortune Small Business Magazine's 2007 list of the 100 fastest growing small companies in the U.S. The Fortune list is based on companies that claim less than $200 million in revenue and a stock price greater than $1. The companies are ranked by growth in earnings, revenue and stock price over three years. Raymond C. Kubacki, Psychemedics president, said the company's growth is the result of increasing acceptance of its drug testing technology.

Banking & Finance

State funds training for bank employees

Clinton Savings Bank received a $99,238 work force training grant from the state Workforce Development department. According to the bank, the money will be used to train 106 bank employees in sales, customer service, management and leadership skills. Clinton Savings Bank claims more than $450 million in assets, and is one of the oldest mutual community banks in Massachusetts. The bank has branches in Berlin, Bolton, Boylston, Clinton, Sterling and West Boylston. The workforce training fund, which is administered by the state Department of Workforce Development, provides businesses and labor organizations with matching grants of up to $250,000 to finance worker training.

It's health insurance, not rocket science

A new survey by the Massachusetts League of Community Health Centers revealed that individuals with little or no experience with health insurance quickly grasp the basics once enrolled. Approaching an October 1 deadline that will end the state's free care pool, the most frequently asked questions by the newly insured include questions about the new state mandate, penalties for noncompliance, and cost concerns, the study found. There are also questions about when to go to an emergency room for care. "Even with an overall understanding of how health insurance works, people still need help to understand the differences between urgent care and emergency care," said James W. Hunt Jr., president and CEO of the Massachusetts League of Community Health Centers. The survey was conducted among outreach workers at 13 statewide community health centers.


Retail

TJX reports income dive, cost of breach

TJX Cos., the Framingham-based discount retailer, reported second-quarter net income of $59 million compared to $138 million for the same quarter a year ago. The company reported net sales of $4.3 billion, a 9 percent increase over the same period a year ago. The company said it expects to pay out $130 million related to the early 2007 "computer intrusion" that resulted in the widespread loss of customer personal credit card information. The company said the $130 million would include a $118 million after-tax cash charge and future non-cash charges of $21 million the company expects to pay in 2009. The company said the charges should cover losses, litigation, legal proceedings, investigations and other expenses.


Manufacturing

P&W shunts second-quarter gains into first half loss

The Providence and Worcester Railroad Co. reported second-quarter net income of $347,000 compared to $259,000 for the same period in 2006. Income increased as operating revenue for the quarter decreased from $7.2 million in 2006 to $6.9 million for the second quarter of this year. The company said the 3.7 percent revenue slide was mostly due to a decline in container traffic. For the six months ended June 30, the company reported a net loss of $1.2 million, compared to a net loss of $10,000 for the first half of 2006. The company pegged that decline on the dip in operating revenue during the first quarter of 2007.

AIM for moderate positivity

The Associated Industries of Massachusetts Business Confidence Index rose 3.4 points in July to 57.6, more than recouping June's decline, the association said. "The July survey results indicate that Massachusetts employers see conditions in the state as moderately positive, but not as good as those prevailing nationally," said Raymond G. Torto, co-chairman of AIM's board of economic advisors and principal at CB Richard Ellis Torto Wheaton. Since April, the index has followed an up-down-up pattern, with June's loss virtually canceling out May's gain, and July's rise returning to the higher level, beating July 2006, (55.4), and close to the reading of July 2005 (57.8). However, the July survey was conducted before the new wave of uncertainties, particularly around the mortgage situation, that produced sharp drops in the equity markets, the association said.

Saint-Gobain buys industrial mortar co.

Paris-based Saint-Gobain, which employs nearly 2,500 people in Central Massachusetts at its Saint-Gobain Abrasives Inc. unit, and 200,000 worldwide, said it would pay nearly $3 billion for HeidelbergCement AG's industrial mortar unit Maxit. Maxit employs 5,130, according to Saint-Gobain. Saint-Gobain said the deal would double its industrial mortars activities, which in 2006 accounted for $1 billion in sales through its Weber unit. In 2006, Maxit reported $1.7 billion in sales.

News briefs are compiled from staff and wire reports.