Checking banks’ bottom lines

No industry sector will be more closely watched this earnings season than the financial firms, many of which are releasing their third-quarter financial statements this week and next.

Aside from their perch as keepers of the coffer in your territory, the health of your region’s banks is a good barometer of other economic pressures in the area. Sound loans and deposits make for sound banks; when business sours on either end it’s worth finding out who’s slumping, and why.

If you haven’t already, jot down a list of regional and national financial firms in your area and determine when the critical mass of earnings releases will be out. The dates of course are available on corporate Web sites, or use a handy calendar like this one from Bloomberg.

If you aren’t sure of the players in your area, use this handy tool from the Federal Deposit Insurance Corp. (FDIC), which allows you to run a report ranking banks by market share. You can sort by ZIP code, county or state, depending on the snapshot you seek. The ranking is based on deposits as of June 30, 2008 – a tad old but barring any major failures since then, a good read on financial institutions you should be watching.

One thing to keep in mind is that by the nature of their business, banks’ financial statements read somewhat differently than those of industries that sell tangible goods and services. Those companies report revenue (sales) and their net profit or loss after expenses.

Since banks don’t make “sales,” per se – they move money around between borrowers and depositors – their financial ratios are a bit different, and are roughly counted in terms of “assets” (deposits) and “liabilities” (loans.) Here’s a primer on reading bank financial statements from Investopedia.com.

While you have time to prepare, consider a large info graphic or spreadsheet-oriented story (if news hole is tight, refer to the Web) comparing and contrasting key financials at your market’s major financial institutions. A forensic accounting firm or finance/accounting experts at nearby business schools can help you decipher the balance sheets and point out red flags that you can take forward into interviews with the banks’ executives.

CNNMoney.com notes in this analysis that four of the nation’s six largest banks are expected to post profits, despite ongoing delinquencies by retail and commerical borrowers.

Marketwatch.com outlines more of what to look for in third-quarter results in this video. Specific line items include credit-card losses related to unemployment, other troubled assets including commercial real estate, which still looms as major liability for lenders.

If things seem really dire, you may wish to review this previous Tipsheet on how to cover bank failures.

Come back to Your Daily Tipsheet each morning for advice on where to find sources, background and creative ways to make financial news and trends relevant to your audience.

Update the holiday hiring scene

Note to elves: Don’t call us … we’ll call you.

That seems to be the unspoken national trend in seasonal hiring again this year. Consulting firm The Hay Group reported recently that retailers it surveyed plan to hire from 5 percent to 25 percent fewer temp workers this fall than last.

Chain Store Age cites the aptly named consultancy Challenger, ray & Christmas in predicting a possible uptick over 2008’s dismal holiday jobs market, which employed 384,000 extra workers, or little more than half of the temporary help hired in 2007.

Either way, as the fall and winter festivals loom, a good percentage of your audience likely is wondering: What holiday jobs are out there, and is it too late to snare one? Ever the eavesdropper, I’ve overheard such queries from customer to clerk in no fewer than three stores recently. So before the Halloween goblins fly, you can’t go wrong with a localized update on holiday hiring.

SnagAJob.com, the employment Web site for hourly positions, hosts a seasonal jobs Web page; its tips are aimed at workers but can help you generate story angles too. For example, the site notes, stores aren’t the only target for people seeking temporary work.

Restaurants, resorts, banquet halls and other catering facilities need extra helpers, too. Shippers such as UPS and FedEx may hire more people to process packages. Extra traffic at shopping and entertainment venues means more work for greeters, cleaners and other low-skill jobs.

Other angles:

How the hiring process is shifting. Many retailers have made online applications mandatory; thwarting talented self-promoters and people without reliable computer access. Talk with hiring managers and temp firm counselors to create a tips box for job seekers. How likely is it that a seasonal job will lead to a permanent post?

Perks and discounts. Which workers reap the best benefits – wages, markdowns, free meals and entertainment. Which jobs are most fun and which are the most thankless?

Day-in-the-life. While trite, these stories can be a scream, enhanced by audio, video and slide shows. I once was forced by my editor to work a 6 a.m. shift the day after Thanksgiving at a local Target, then rush to the newsroom and whip up a 40-inch feature about my one and only retail experience to date. I nearly got stampeded handing out the freebies at the start of the stint and later got so caught up in finding a “Doodlebug” stuffed animal for a frantic mom that I forgot I really didn’t work there.

A couple of years ago, a chagrinned young co-worker reluctantly donned the stylish yet practical brown uniform of a UPS driver – complete with watch cap and boots – to spend a day hefting packages aboard the open delivery trucks. It made for quite a read.

Any jobs story should have long-term context; for historical jobless data, refer to the Bureau of Labor Statistics employment situation report. For forecasts, check with your region’s Federal Reserve bank or check out this National Association for Business Economics study, released Monday, predicting national unemployment rates at or near 10 percent through the end of 2010.

Come back to Your Daily Tipsheet each morning for advice on where to find sources, background and creative ways to make financial news and trends relevant to your audience.

Eying pizza pies

Experts have released a report noting that if the number of original-crust pizzas consumed in the U.S. each year were stretched end to end, they would reach from Earth to Pluto and back. Actually, I just made that up. You know how it is – you’ve got a tasty story subject but no hot news peg.

Fortunately, earnings season is in full steam this week, and at least until the end of the month there’ll be no shortage of financial updates and other timely tidbits on which to hang colorful and informative stories. (If you haven’t already, check out Yahoo!’s excellent earnings calendar.)

Tomorrow, for example, Domino’s Inc. releases its third-quarter financial report, which is as good a time as any to pause for a look at the nation’s pizza industry.

There’s no shortage of angles: Local mom & pop shops, giant delivery chains, national eat-in chains, frozen grocery pizzas, take-and-bake chains, novelty pizza bites and upscale ready-to-use crusts. By some estimates, pizza is a $41 billion a year industry in the U.S. – with some 69,000 retail pizza purveyors nationwide.

If you don’t have a pizza empire in your territory, you might have a supplier. One real concern to the pizza industry is the volatile wholesale cost of cheese, as illustrated in this University of Wisconsin graph. In fact, DairyReporter.com says in this recent article that non-dairy, rather scary-sounding cheese substitutes are being developed to help pizza makers evade cheese-price fluctuations.

Aside from dairy products, the pizza biz kneads through who-knows-how-many bushels of wheat each year and its other toppings - from pineapple to anchovies to garlic - have to come from somewhere. Poke around and discover your regional link to the pizza supply chain.

So far, signs are mixed regarding the recession’s effect on pizza sales. One school of thought has it that people are turning to the comparatively inexpensive pies as an alternative to more costly dining-out options; other analysts indicate that consumers are eschewing prepared food in favor of cheaper home-cooked meals. Pizza Hut, a division of Yum! Brands, reported last week that its sales were off 13 percent in the third quarter, and California Pizza Kitchens said its sales were down 8 percent in the same period.

Perhaps that’s why you’ve noticed a flood of two-for-one pizzeria coupons and other promotions in your junk mail, which is one place to look for indications of how your local pizza scene is coping.

Other resources:

Pizza Magazine
Pizza Today
PizzaWare.com, a compilation of global industry statistics and recipes.
Food Industry News

Come back to Your Daily Tipsheet each morning for advice on where to find sources, background and creative ways to make financial news and trends relevant to your audience.

The Business of Boo!

Fire up those chain saws!

It’s that time of year again, when fodder for some of your most fun and picturesque business features is rising from the dead.

This season, forget the same-old Halloween costume-shop story and instead immerse yourself in the eerie world of professional haunters.

Part subculture, part business, part performance art, the U.S. fright industry has thousands of venues and an estimated annual revenue approaching half a billion dollars.

Haunters plot year-round for their brief fall seasons, lining up actors, special effects make-up artists, props and costumes, audio-visual aids and even specialty Web site creators. Tickets, flyers, food concessions, portable toilets – the haunts spawn all sorts of spin-off revenue.

If you’re near a major theme park, it’s no secret that they’re trying to stretch their seasons with spooky October nights. Give readers a behind-the-scenes transition, special supplies and other preparations that take a park from wholesome to hoary.

Other business angles: Sales of ads in specialty directories, fright-night tourism, suppliers and ancillary autumn attractions cider mills, corn mazes and hayrides. Scrutinize the haunts as you would any other business: What are the trends in ticket prices? Pay? Insurance – how do you figure the liability at a haunted house, anyway? Do zombies qualify for workers compensation?
If you’re thinking to yourself “But there are still three weeks until Halloween,” think again. Most haunts open in late September now and a few run “encore” weekends after All Hallows’ Eve itself. To make the most of behind-the-scenes video, audio and slide-shows, as well as give your graphics folks time to prepare interactive maps, etc., it’s none too soon to pay a call on these ghoulish entrepreneurs.

Here are a plethora of resources to get you started; keep in mind not all haunters pay for placement in directories so dig around (pun intended) for the ones that haven’t yet become your regions’ media darlings.

Attend rehearsals and take notes of the nitty-gritty reality behind the screams. What do they spend each season on make-up, hair spray, fake blood and circular-saw blades? What are the trends in haunt themes? Pirates? Harry Potter-esque wizardry? Slasher-flick gore? More live actors? More interactive vignettes? How are they working kid-friendly hours and toned-down tours for the younger set?

Are any going year-round? If not, what do the haunters do for day jobs? The living dead are just crawling with human interest stories.

Here are some industry resources to get you started:

HauntWorld, an online directory with interactive maps.
Haunted House Magazine
Haunted House Association
Haunted House.com
Haunting Industry Network
HauntersNetwork.com
HauntingIndustryDirectory.com
Hauntmax.com, a specialty Web site provider.

And if you really get hooked, mark your calendar for next year’s TransWorld Halloween trade show, Feb. 26-March 1 in Chicago. It features product exhibits, trade seminars and the famous costume fashion show.

Come back to Your Daily Tipsheet each morning for advice on where to find sources, background and creative ways to make financial news and trends relevant to your audience.

The clock ticks for new home buyers

Time is quickly slipping by for purchasers who hope to close on a home sale in time to claim the up-to $8,000 first-time home buyer credit that expires at the end of November.

That makes now an excellent time for a checkup on your local housing market. In particular, investigate the pipeline of pending sales – is it flowing freely or clogged? Is there a danger that willing buyers will be shut out of the credit due to any paperwork backlogs at lenders and title companies?

Here’s the latest IRS bulletin on the credit, which is up to 10 percent of the sale price. Eligible buyers must not have owned a principal residence within the past three years; the credit phases out for single filers earning more than $75,000 and married filers with income over $150,000. Be sure to note that it’s a fully refundable credit, meaning that filers will get the full amount even if their overall tax liability is lower than that.

Real estate and lending experts have warned that buyers making offers toward the end of October and beyond risk underwriting snags and other delays that could cause them to miss the deadline.

The National Association of Realtors has an extensive portal devoted to the credit, including factoids, an in-depth primer and legislative news.

That trade group, among other entities, is lobbying for an extension of the credit, which is part of the 2009 American Recovery and Reinvestment Act stimulus program. So far, the tax break is credited with boosting the nation’s moribund housing market by some one million sales.

To keep abreast of legislative changes, keep an eye on the Mortgage Bankers Association site; here’s a summary of the trade group’s Congressional testimony on Wednesday.

Bear in mind that many states also run assistance efforts aimed at making housing affordable to first-timers; check with your state’s housing authority for statistics and rules. The National Association of Home Builders operates a Web site on the federal tax credit; - note, you can follow developments via Twitter, Facebook and YouTube as well as through conventional means. The Facebook page in particular highlights the complementary state programs for new or low-income buyers.

Localize coverage by following families attempting to beat the deadline; tracking their red-tape triumphs and setbacks could make for a dramatic and appealing standing Web feature or blog. Another approach: Enlist local Realtors to help you create a graphic checklist for prospective buyers, with specialized tips for those with poor credit, job complications and other precarious scenarios.

Come back to Your Daily Tipsheet each morning for advice on where to find sources, background and creative ways to make financial news and trends relevant to your audience.

Greenbacks for green appliances

Readers whose car didn’t make the clunker cut might still be able to cash in on government stimulus money by junking those old refrigerators and other items.

The U.S. Department of Energy has given states until October 15 to outline how they will allocate $300 million in federal stimulus funds set aside for appliance rebate and recycling programs. Among the eligible items – which must be replaced with efficient Energy Star-rated models – are refrigerators, dishwashers and laundry machines as well as air conditioners, furnaces, freezers and others.

Here’s the DOE’s July release on the campaign, which says most funds should be released by Nov. 30.

This MSNBC article explains the pitfalls of the mission, which unlike the nationally standardized cash-for-clunkers auto incentive program, is going to operate differently in each of the 50 states.

This section of the DOE Web site, which provides a breakdown on how its share of the American Recovery and Reinvestment Act funds, includes an interactive map; you can click on your state for a breakdown of stimulus cash allocation. Note also the links to state budget requests to the DOE and other resources.

Then, check with your state’s energy or environment department to find out who’s in charge and what shape the local program will take.

Obviously retailers, manufacturers (what few appliance makers still reside in the U.S.), scrap handlers and other affiliates are key interview targets. As with all such programs, skeptics abound and you’ll want to include their viewpoints.

One interesting question: Will replacing these big ticket items in time for the rebate sap consumers’ cash away from the usual fourth-quarter big ticket items: personal electronics destined for holiday gifts? Talk with dealers about what they’re anticipating and how they may be shifting inventory or promotions. (Buy a freezer, get half off on a DVD player? Who knows?)

As always, keep an eye out for local dealers doing a riff on the clunker theme. My junk mail this week included a catchy “cash-for-clunkers” trade-in offer from Husqvarna, the maker of upscale sewing and embroidery machines. The offer isn’t chump change, either: It’s worth up to $3,000 on qualifying equipment.

No doubt more retailers will be trying similar copycat sales. Round them up under one Web link from your business pages as a handy reader service and a catchy complement to your substantive business story.

Come back to Your Daily Tipsheet each morning for advice on where to find sources, background and creative ways to make financial news and trends relevant to your audience.

Stay on top of corporate org charts

The brouhaha over the resignation of Kenneth Lewis as Bank of America’s chief executive brings up a fresh angle for covering the companies on your beats: Succession planning.

Even in the absence of BofA-level drama, asking company executives about future staffing strategy is a legitimate line of questioning as you pursue your watchdog function on behalf of employees, retirees, investors, suppliers and other stakeholders.

Do an in-depth look at one firm’s organization chart, or a succession-planning package featuring your area’s most prominent companies and the various dilemmas they’ll face over the next five years. Is the CEO aging out of the job soon? Has the treasurer been wooed away by a rival? Will a pending merger shuffle the pecking order? This could be a fun multimedia package, including an interactive graphic with timelines, bios, what-if scenarios and other elements.

To be sure, publicly traded companies are somewhat constrained from informal chit-chats about possible successors because such speculation on leadership changes could inadvertently move the market in the company’s shares. But raising the topic in executive interviews may reap an unexpected response or news you otherwise wouldn’t hear.

Also, keep in mind there are more circumstances besides performance and age that can prompt a senior executive to move on or need a hiatus. Here’s a January article from Business Week about Apple CEO Steve Jobs; discussing the grey areas of disclosure rules as they pertain to executive illness.

Note that the article refers to the Millstein Center for Corporate Governance and Performance at Yale University; the center and others like it can be conduits to analysts and third-party experts.

Another source of corporate governance expertise: The National Association of Corporate Directors, Its Web site is a decent primer on current issues in facing company boards and others concerned with corporate management. You should routinely be approaching the specific board members of companies you cover, as well.

Other potential sources include recruiting firms, human resources consultants and corporate compensation experts.

If there is a significant organized labor presence at the company, sometimes top union leaders are aware of succession plans and may be willing to share information or tips. It’s worth a try.

Don’t overlook the subject when covering private companies and small businesses.
Restaurants, retail chains and other local landmarks that currently flourish as family businesses may not survive – or may substantially change character -- as the older generation retires.

I can think of several examples in my neck of the woods where household-name establishments simply shut down because none of the heirs wanted to continue running them. In another instance, a nearby upscale grocer is trumpeting the fact that his son has joined the executive ranks, assuring customers and suppliers that the family touch is good for another generation or two.


Come back to Your Daily Tipsheet each morning for advice on where to find sources, background and creative ways to make financial news and trends relevant to your audience.

Catching on to cold and flu stories

Coughing. Aching. Stuffy head. Fever.

Those sniffles, sneezes and groans that cold and flu season elicit translate to “cha-ching!” for more than a few industries.

Over-the-counter remedies alone are a $4 billion a year business, according to statistics from the press room of the Consumer Healthcare Products Association (CHPA), a lobbying and trade group. They say 77 percent of Americans each year take an OTC medication for common respiratory ailments.

If you cover the pharmaceutical, health care or drug store industry, the CHPA Web site is a handy resource for factoids, industry and legislative trends, and more.
Another source: Drug Store News, which offers a daily news feed about the retail drugstore and pharmacy business, including sub-categories like OTC meds, consumables, health and beauty sales, and so on.

Did you know, for example, that CVS recently opened its 7,000th store? No wonder it seems like they’re everywhere – they are.

Another industry quirk: Did you know there actually is an official cold & flu remedy for the 2010 Olympic and Paralympic Winter Games? Sure is.

Other business trends that benefit when we get sick: The emerging business of walk-in clinics at drug and general merchandise stores. How are they competing with established medical centers, doctors’ offices and other low-cost clinics. The American Pharmacists Association offers a training program that – Certified Immunization Pharmacists – so that drug store personnel can deliver flu shots and other vaccines on the spot.

Then there is the plethora of offbeat remedies, like zinc-loaded gumballs and other cold-prevention products found at the checkout stands of convenience stores. Herbal remedies and preventatives are still popular, with many Web sites marketing immune-system strengtheners that purport to keep you healthy all year.

If your beat includes pharmaceutical makers, ask about their cold and flu segment and what’s in the pipeline. Don’t overlook generic and private label makers, who don’t get the same attention from Wall Street but nevertheless make fascinating business features.

To get you started, here is a list from Thomas Publishing Co. of some 80 private-label drug makers nationwide; not all necessarily manufacture cold or flu remedies but if one is in your region, give them a call to see what their big winter sellers are. Supplements? Analgesics? Cough drops?

Even makers of more pedestrian goods like tissues, sports drinks, hand sanitizer, thermometers and chicken soup can add color and amusing factoids to your winter illness story.

Or, take a work-life perspective: Talk with HR managers and others about how a severe cold and flu season contributes to absenteeism, productivity loss, etc. Do staffing firms benefit? Does a flu outbreak reduce traffic in malls and shopping districts? A number of industry groups are strategizing on how to cope with an unusually difficult flu year. The American Hotel and Lodging Association, for example, has prepared this page on H1NI management for hotels.

Come back to Your Daily Tipsheet each morning for advice on where to find sources, background and creative ways to make financial news and trends relevant to your audience.

Economy's toll on our tourist towns

Last week about this time I was lucky enough to be driving around the back roads of Texas Hill Country, enjoying the twists and turns and majestic scenery.

Late one afternoon, needing a break to stretch my legs and mine the AAA guide for a likely-looking motel, I buzzed down Highway 281 into Johnson City – hometown of the 36th President of the United States.

Vintage storefronts, antique shoppes, the LBJ boyhood home, eateries. Perfect. I rustled up my guidebook and headed for an eclectic-looking tavern next-door to an old mill. Its door was propped wide open – but not in welcome mode, unfortunately. The interior was dismantled and the fixtures were being lugged out to curb. “We closed down,” the owner told me apologetically.

Further investigation showed that most of village’s antique and gift emporiums were shuttered as well – some for the day, some permanently. I backtracked a ways and found a sort of breakfast diner that also boasted a four-table tavern area and a TV tuned to CNN. The sole employee apologized for being out of Lone Star beer; demand was so sparse that they only had stocked the ubiquitous national brand.

“It’s just been really slow around here since everything changed,” she said, gazing out at the deserted main drag. “Nothing going on.”

It stands to reason that Johnson City isn’t the only tourist town struggling after two years of recession. If you’ve got one of these quaint crossroads in your region – and most of us have – it might be time for a checkup. How was their summer, and how do they plan to weather the cooler months? This story screams for a narrative, building-by-building census, detailing the history and fate of each storefront and small business person. Online, an interactive pop-up map, slide show and behind-the-scenes video would complement your prose.

To augment your anecdotes and balance the tendency of business boosters to accentuate the positive, contact the state treasury department for sales, use and hotel occupancy tax revenue data, so you can analyze the trends. (Check with counties too; tax levy systems vary by jurisdiction.) Review bankruptcy filings and talk with local lenders and landlords about small-business struggles.

If you don’t have a town nearby with a critical mass of tourist trade, find some other local attraction – a ski or sports resort, theme park, museum. Readers love the inside scoop on local landmarks and the leisure industry is a natural for an entertaining and informative business feature.

Here are some links to get you started:

U.S. Chamber of Commerce and a related site with quick links to local chambers and visitors bureaus nationwide.
RoadsideAmerica.com, a guide to offbeat tourist attraction
Waterparks.com
Amusement Today, an online trade paper for theme and water parks, carnivals and other parts of the leisure sector; be sure to check out the helpful links to other industry groups.
American Hotel and Lodging Association with 11,000 hospitality-industry members nationwide.
American Independent Business Alliance and the National Federation of Independent Businesses
These lobbying groups tend to focus on anti-chain-store activities but may be a good conduit to local entrepreneurs groups.
ConventionBureaus.com, a rudimentary but helpful online directory of some 2,000 local groups.

Perhaps you’ll find more than doom and gloom. Here's how Jerome Weeks put together a multimedia package for North Texas's KERA public broadcasting of how an entrepreneur snapped up most of a moribund town and is trying to revive it as an arts center.


Come back to Your Daily Tipsheet each morning for advice on where to find sources, background and creative ways to make financial news and trends relevant to your audience.

Time to put IPOs on your radar

Photo by Yodel Anecdotal/Yahoo! Inc.


You know the financial markets must be on the mend when analysts start mentioning IPOs with a straight face.

IPOs – initial public offerings – mean that entrepreneurs and underwriters are confident that shares in a newly public company will get an appropriately lucrative reception from investors. They were all the buzz five or 10 years ago, when companies from every sector were slapping dot.com onto their corporate signatures and tossing their shares into the ring.

Some, like 1-800-Flowers.com, wilted. Others, like Google – which opened at $85 and today trades around $490 – made hundreds of instant millionaires.

As liquidity dried up, so did the flood of offerings. But this year, a few tentative IPO attempts are happening here and there, like the tiny green shoots of perennial flowers that brave the chill of early spring.

Brush up your IPO-watching skills now and you’ll be ready when the next crop ripens.

Here’s a very basic primer from About.com’s stock market channel; it explains the hows and whys of initial public offerings.

To keep tabs on IPO activity, you want to keep an eye out for registration statements, the prospectus documents required by the Securities and Exchange Commission when new securities are issued. You may hear the term “red herring” bandied about; it refers to the earliest version of the prospectus, which doesn’t reflect the projected initial share price and some other key data. Like false clues in a murder mystery, it keeps investors on their toes.

Here’s the SEC rundown on registration statements. They’re public and readily available through the EDGAR system.

Unfortunately, SEC media relations says there’s not yet a way to set up an RSS feed or e-mail alert solely for IPO documents, but if you’re serious about covering new offerings, it only takes a few clicks a day to keep abreast of developments. At the SEC home page www.sec.gov click on “filings & forms,” then “search for company filings” and finally “most recent filings.” In the Form Type field of the little grey menu box, enter “S-1.” That will bring up a list of registration statements submitted over the past day or so.

Yahoo! has a rudimentary IPO look-ahead at its economic calendar. A better source is Hoover’s Inc., the firm that tracks private companies – it offers great stats and news on its IPO Central channel.

Consulting firm Renaissance Capital LLC welcomes media inquiries and offers a plethora of year-to-date statistics, news and other helpful information at its Web press room.

Even if your territory is not yet fertile ground for IPOs, you’ll want to evaluate those companies that are ripe for the plucking. (Bioscience and for-profit education are my bets.) Talk with regional economists, economic development groups, industry analysts and venture capital firms about which sectors may start producing when underwriting cash loosens up.

Come back to Your Daily Tipsheet each morning for advice on where to find sources, background and creative ways to make financial news and trends relevant to your audience.