Profiles - Biggest Public Companies
LED lighting company Lighting Science Group had quite the first half of the year. In January, a new CEO, Jeremy Cage, came in. In April, it figured prominently in an article in the New York Times on the future of lighting. That same month, it showed off new products at the Lightfair International Show in Philadelphia.
Now if only it could unleash profits. Lighting Science makes LED bulbs that can be put in light fixtures designed for incandescent bulbs, selling 6 million in 2012, which it says makes it one of the largest in the world. It also does fixtures and custom work. But Lighting Science has never generated positive cash flow and has lived off issuing stock and borrowing. In March, it voluntarily recalled LED bulbs sold in Canada that posed a fire hazard. Its stock has traded at less than $1 a share all year. One stockholder has a suit pending to rescind a $25-million investment.
Lighting Science relies heavily on sales of its bulbs to Home Depot (48% of net sales) and Osram Sylvania (21%), but Sylvania cut purchases way back, and the company doesn’t expect it to be a significant customer this year. While revenue was up 17% in 2012, the cost of goods — not including sales and marketing, research and overhead — was more than revenue.
— Mike Vogel
In 2007, before the economy went off the cliff, Jeffrey H. Fisher, CEO of Innkeepers USA, sold the 74-hotel real estate investment trust he had founded to an institutional investor for $1.5 billion. Three years later, as the economy clawed its way back, Fisher returned to the industry, taking public Chatham Lodging Trust. It now owns 75 hotels acquired for approximately $1.5 billion and has a 10% stake in a joint venture that bought 64 hotels from his former business — Innkeepers — out of bankruptcy for $1.02 billion.
Chatham has been posting industry-beating numbers thanks in part to properties booked up with emergency personnel and displaced residents from Tropical Storm Sandy. Its properties are concentrated on the coasts and the New York, D.C. and southern California metros. It has just five properties in Florida from Fort Walton Beach to Fort Lauderdale.
Fisher has said a key for Chatham is aggressive asset management. As a REIT, Chatham can’t operate its own hotels, but it can “proactively manage our third-party hotel managers.” Fisher owns 90% of one of those managers, Island Hospitality Management, which as of April ran 18 of the REIT’s hotels and 54 of the joint venture’s hotels. It got $2.3 million in management fees last year from Chatham.
With an expanding economy and a low supply of new hotels coming on the market, Fisher says, “We are very bullish on the lodging industry in 2012 and beyond.”
— Mike Vogel
Looking Ahead to 2014 ...
Hertz’s recent decision to relocate its headquarters from Park Ridge, N.J., to southwest Florida will shake up next year’s roster of top public companies. With nearly $8.3 billion
in revenue in 2012, the car rental giant becomes Florida’s 17th Fortune 500 company and would have displaced Orlando-based Darden Restaurants as the state’s ninth-biggest public company had it been on this year’s list.
Southwest Florida’s workforce, prospects for growth, the state’s dominant tourism industry and quality of life all factored heavily into Hertz’s decision to move to Estero, just south of Fort Myers in Lee County. The company is in expansion mode after buying Tulsa, Okla.-based Dollar Thrifty Automotive Group last year, and plans to move 700 jobs here over two years.
Hertz plans to build a $50.5-million, 300,000-sq.-ft. headquarters.
— Amy Keller