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s p e c i a l s u m m e r e d i t i o n : t h e m o n e y i s s u e

INSIDE

Foreclosures: Potential profits for risk-savvy investors

Education: Universities have stimulus money to spend

M&A: Tax fears, retirements drive urge to sell companies

$ense

Dollarsand

PAGE 9

PAGE 15

PAGE 16

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Aug. 10 - Aug. 30, 20092 www.gsabusiness.com special edition: the money issue

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by Molly Parkermparker@scbiznews.com

South Carolina officials are likely to roll out as much red carpet as they can afford to secure Boe-ing Co.’s second assembly line for the 787 Dream-

liner, if early enthusiasm is any indication. After Boeing announced its planned acquisition of

Vought’s North Charleston facility, politicians across this state rushed to blast out press releases singing praise for a deal that, at its core, is a break-even economic develop-ment announcement. Boeing plans to transfer Vought’s roughly 600 employees under its umbrella, and continue to manufacturer the plane’s rear fuselage section here.

What’s generating all the excitement is the possibility

— it’s no where near a concrete deal — that the com-pany could expand its massive Dreamliner production operation in South Carolina.

“If I were a policymaker, if there was a company I would really want to pull out all the stops for, it would be a Boeing,” said Bill Youngblood, managing shareholder and CEO with McNair Law Firm in Charleston, which assists companies in negotiating economic development incentives. “It’s not just because it’s Boeing and the jobs and the ultimate tax base, but it’s this incredible supplier network that would service Boeing. One of the huge ben-efits of BMW is the supplier base of BMW.”

Scott Fancher, Boeing’s vice president and general manager of the 787 program, said that the company had

inside

States grease knuckles in fight for Boeing business

Federal grant for tissue research opens new door for S.C., backers sayby Mike Fittsmfitts@scbiznews.com

A record federal grant will give South Car-olina an opportuni-

ty to be a national leader in the emerging field of tissue research — and organizers say it will be a challenge to the state and the 10 institu-tions involved.

Clemson University, Fur-man University and Green-ville Technical College are participants in the project.

Christian Przirembel, Clemson vice president for research and economic development, said this project fits its biomaterials program perfectly. Clemson has been working on a biodegradable “scaffolding” around which new tissues and or-gans can be created, Przirembel said.

The $20 million grant announced July 23 is to launch a collaborative program across South Caroli-na to fabricate working human tissue for transplants. The five-year project is the largest competitive Na-tional Science Foundation grant ever received in the state. If successful, the project would open the door to creation of donor tissues, or even internal organs, that are matched to the recipient.

The grant is the culmination of a three-year ef-fort, said Scott Little, state manager for the S.C. Experimental Program to Stimulate Competitive Research and Institutional Development Awards, a panel that works to increase research awards in the state. Although South Carolina can’t be a national

(Photo/Provided)

executive summary

Ten S.C. colleges will be asked to cooperate in an effort to lead the nation in human tissue research.

see GRANT, page 23 see BOEING, page 7

Taps for Chad?Verizon Wireless takes over Alltel

Page 4

Upstate InnovationMilliken tops patent list Page 17

Moore School HomeFederal, private funds make possible new building

Page 6

ToP UPSTATE PATENT HolDErS

Milliken & Co., Spartanburg 39Cryovac Inc., Duncan 11Jackson & Perkins Wholesale Inc., Hodges 10Clemson University, Clemson 8Poly-Med Inc., Anderson 7Kemet Electronics Corp. Greenville 4

the money issue

A q U I C k R E A D O N L O C A L B U S I N E S S

leaDing offthe money issue

Vacancy rates for industrial real estate in the Greenville-Spartanburg market continue to rise rapidly and likely will top 13% by the end of this year, Grubb & Ellis|The Furman Co. pre-dicts in its second-quarter report.

The forecast also states:• It’s a great time to lock in long-term leases, but tenants

are likely to remain more interested in short-term deals due to market conditions.

• Continuing uncertain credit markets will make property owners wary of making costly improvements for tenants.

On the bright side, Grubb & Ellis expects the additional manufacturing capacity being added to BMW Manufacturing near Greer to position the auto sector to rebound early in the next recovery. Consequently, the research firm says, auto suppli-ers in the region could soak up surplus industrial space.

“If the availability of high quality buildings, the completion

of BMW’s expansion and the turn-around of the national econ-omy are all perfectly timed, the later half of 2010 could feature very robust growth,” Grubb & Ellis said.

The report notes that Adidas finished the last of its east coast distribution center and BMW opened it paint shop expansion.

“The two completions accounted for 1.1 million square feet of positive absorption in the Spartanburg West submar-ket,” the report states. “A new 900,000 square foot assembly facility is still under construction by BMW. Upon comple-tion, industrial market activity among suppliers is expected to climb significantly.”

Also, Grubb & Ellis said industrial properties being vacated during this recession are of higher quality than properties the market has historically had to offer.

“When market growth returns, these newly vacated proper-ties will allow tenants to secure high quality buildings at very competitive rates,” Grubb & Ellis stated.

Chad, the ubiquitous pitchman for the Alltel wire-less system, has not gone quietly into the night since his company was purchased by Verizon Wireless. He con-tinues to pop up in a transitional advertising campaign that focuses on his new corporate master.

It remains unclear how much life Chad has left in him.“Efforts are currently under way to rebrand former

Alltel markets and will be completed in the near future,” said karen M. Schulz, public relations manager for the Carolinas-Tennessee region of Verizon. “Verizon Wire-less will transition the Alltel brand including phasing out Chad so that we are focused on the Verizon Wire-less brand. The transition will take place over the next couple of months.”

And there’s a sticky problem of several pockets of Alltel service across South Carolina that the Federal Communications Commission did not allow Verizon to purchase, saying the combination would eliminate com-

petition in those mostly rural areas.In South Carolina, those Alltel properties are

in the counties of Anderson, Oconee, Abbeville, Edgefield, Greenwood, Laurens, McCormick, Newberry, Saluda, Cherokee, Chester, Fair-field, Union, Allendale, Bamberg, Barn-well, Calhoun, and Orangeburg.

The Alltel remnants in South Caro-lina are held by a trust until a sale to Atlantic Tele-Network Inc. of Salem, MA is concluded. That sale, which involved about 800,000 wireless sub-scribers nationwide, awaits federal reg-ulatory approval, said Wesley Brown, an Alltel spokesman in Little Rock, AR.

Atlantic Tele-Network hopes to con-clude the transaction by the end of the year, officials said.

“Until then, we are going to compete aggressively in those markets,” said Brown.

That could include the familiar advertisements with Chad humiliating his competitors, including Ve-

rizon. In a media market such as Greenville, that might result in viewers seeing both the Veri-zon transitional ads, and the bare-knuckles ads from Alltel.

“As we move toward this transition, we will share more information as it becomes available. In the interim period, our cus-tomers will continue to receive the same great service they have come to expect from

Alltel,” Brown said. “Also, Chad and Alltel’s My Circle are still very much present in our divested markets, and we will continue to roll out great products and services in the markets where we operate.”

Industrial vacancy rate continues risein Greenville-Spartanburg real estate

Alltel’s Chad lingers as Verizon Wireless takes over territory

U.S. News rates Greenville Memorial among top U.S. hospitalsGreenville Memorial Hospital has been ranked among the nation’s top 50 hospitals in five specialties in U.S. News’ 2009-10 publication of America’s Best Hospitals.Greenville Memorial, the flagship of the Greenville Hospital System University Medical Center, is ranked:

• #25 – Diabetes & Endocrine Disorders• #30 – Digestive Disorders• #43 – Heart & Heart Surgery• #44 – Neurology and Neurosurgery• #49 – Orthopedics

The report is accessible online at www.usnews.com/besthospitals and appears in the July 21 edition of the magazine.

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www.gsabusiness.com 5Aug. 10 - Aug. 30, 2009 special edition: the money issue

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CorP. TAx INCrEASED To 5%

SAlES TAx INCrEASED To 4%

CorP. TAx INCrEASED To 6%

CASUAl ExCISE TAx ENACTED @ 4%

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GrADUAlly To 5%

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Source: Board of Economic Advisors *FY 2009 & FY 2010 Projected

864.908.3062info@ATLOCKE.com

What’s missing from youraccounting?

Aug. 10 - Aug. 30, 20096 www.gsabusiness.com special edition: the money issue

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The University of South Carolina took an entrepreneurial ap-proach to paying for a new, $90 million home for the Moore School of Business in Columbia’s Innovista.

The university will pay for the new building in part with revenue generated by a new agreement to lease the Close-Hipp Building to the U.S. Depart-ment of Justice for 20 years. The Close-Hipp Building is the current home of the Moore School. When the new business school is finished in 2013, and the Close-Hipp Build-ing receives a $25 million upfit for the Justice Department, the federal agency will pay USC $5.3 million a year under a 20-year lease agree-ment. That will produce $106 mil-lion in lease revenue over 20 years.

USC also closed the deal with benefactor Darla Moore to match a gift she proposed five years ago with strings attached. She would give USC $45 million for the busi-ness school that carries her name if the university would match $30 million with other private gifts. Three days before the Aug. 3 dead-line on that matching gift, USC said it had raised $42.4 million in cash, pledges and in-kind gifts to qualify for Moore’s gift.

The new business school site is at Greene and Lincoln streets, on what the university refers to as Foundation Square. Moving the business school out of the University Hill neighborhood and into the evolving Inno-vista campus would dramatically change the focus of the university in Columbia. USC controls considerable land be-

tween Assembly Street and the Congaree River, providing space for continued growth.

The estimated $90 million cost of the new business school will comprise $65 million in bonds to be repaid by lease rev-enue; $15 million pledged to the Moore School as a match to

Moore’s gifts; and $10 million in other private gifts already held by USC. Another $25 million in uni-versity funds will be used to reno-vate the Close-Hipp Building for the Justice Department, said USC Chief Financial Officer Ted Moore.

Design work has not begun, but previous concept drawings of a new business school have shown two buildings — one for the un-dergraduate program and a sec-ond for the graduate school, which includes the No. 1-ranked interna-tional business graduate program.

John Parks, who heads Inno-vista development for USC, said it has become clear that the engi-neering and scientific research in Innovista needs to be linked with the new emphasis in the Moore School on entrepreneurship. USC President Harris Pastides made clear that companies con-sidering locations in Innovista want that proximity to the busi-ness school’s resources.

U.S. Sen. Lindsey Graham said the relocation of 250 employees from Washington, D.C., is part of the ongoing decentralization of the federal govern-ment since 9/11, an effort to make federal agencies less vul-nerable to attack in the nation’s capital.

Moore School to get new Innovista home

Greenville is among the five best places in the country to live “the simple life,” according to the current issue of AARP magazine.

The magazine cites the city’s low cost of living, short commute times, sunny weather, proximity to mountains and family-friendly fun, among other amenities.

“Back in the late 1960s downtown Greenville was withering away, suffering the same fate that wiped out thousands of Main Streets. Now, thanks to 30 years of redevelopment — including a pedestrian-friendly Main Street, a performing arts center, con-dos and the stunning Liberty Bridge — what was once a desolate stretch of offices is now a vibrant town center,” the magazine states.

Other cities on the list were Tucson, Ariz.; Mont-pelier, Vt.; Logan, Utah; and Ames, Iowa.

AArP: Greenville enjoys ‘simple life’

The Peace Center for the Performing Arts adds to Greenville’s quality of life, the AARP says in the current issue of its magazine. (Photo/James T. Hammond)

www.gsabusiness.com 7Aug. 10 - Aug. 30, 2009 special edition: the money issue

looked to the Charleston region during the 2003 site selection process that land-ed the assembly line in Everett, Wash., and will eye opportunities here again.

McCallum Sweeney Consulting, a site selection firm in Greenville, helped Boe-ing select the Everett site from a host of options in 38 states, said Jeannette Gold-smith, a principal with the company who served on that team. North Charleston was on the short list, she said.

“South Carolina did extremely well as a state,” Goldsmith said. “There were issues that arose over the course of that year that just made the Everett plan make more sense.”

Goldsmith said she’s bound by a con-fidentiality agreement from discussing those issues.

Scott Hamilton, with Seattle-based Leeham Co. LLC, a consulting firm that provides news and analysis on aviation matters, said it makes sense that the company would look to South Carolina for its second line.

Doing business in Washington, he said, can be expensive, and the union has been a consistent thorn in the company’s side. Hamilton said it is his understanding that North Charleston is on a short list of potential sites that also includes Everett, Wash., and San Antonio, Texas, where Boeing currently operates a small 787 fin-ishing facility.

These same places reportedly topped the list six years ago. Long Beach, Calif., also is rumored to be on that list, Hamil-ton said. Boeing currently produces the Air Force’s C-17 Globemaster III there, though it’s unclear whether Congress will continue to fund production beyond next year.

Other analysts also seemed bullish on the chance that Boeing would build its second assembly plant in the Charleston area for the so-called “dash-9” model, which would carry between 250 to 290 passengers.

J.P. Morgan’s Joseph Nadol, who cov-ers the aviation sector, recently wrote that the Vought buyout allows Boeing to “kill three birds with one stone.”

It reduces the company’s supply chain risks, gives it a head start on investment required for the second 787 line, and pro-vides Boeing the opportunity to “reduce its dependence upon union labor that has been both expensive and disruptive,” Nadol wrote in his July 6 report.

But the conversation has spawned

some odd revelations. Several Washington politicians, including the governor, have reportedly said that Washington’s chances of securing the second line hinges on Boe-ing’s ability to convince the Machinists union there to stop walking out on the job over contract squabbles. Boeing has a his-tory of uneasy relationships with its union-ized work force, and in the fall, workers went on strike for two months.

“The whole thing comes down to, can they get a long-term agreement with the union, with a no-strike clause,” U.S. Rep. Norm Dicks, D-Bremerton, told The Se-attle Times. “I think if they get this agree-ment, they would stay.”

Meanwhile, Washington business leaders have set about a full-court press to ensure Boeing doesn’t stray from the ranch, calling the Vought deal a “wake-up call.” But Richard Aboulafia, vice president of Fairfax, Va.-based Teal Group, said Boeing may just be skillfully playing its upper hand.

The company pushed back its sched-uled June test flight after a stress test in-dicated weaknesses in the plane where the wings attach to the fuselage.

Boeing’s Fancher said the company’s decisions are based on the “package deal,” though he hinted that union issues may come into play.

“I think any large company with a large production system wants to diver-sify its risk and its exposure to opportu-nities for disruption and that often leads companies to looking at different geo-graphic areas to do work,” Fancher said. “So certainly that’s a factor here as well.”

Complicating the labor discussion is the fact that South Carolina’s Vought plant is represented by the same Machin-ists union as the workers in Washington. Paul Nisbet, an analyst with Sarasota, Fla.,-based JSA Research, an aerospace investment research company, said the Machinists union here would prob-ably be less aggressive because of South Carolina’s right-to-work laws that forbid unions from forcing membership.

But Jim Gray, a human resources con-sultant in Mount Pleasant, said that may be underestimating the union’s local power.

In a widely controversial move, about a dozen Vought employees voted in No-vember to unionize the work force in North Charleston. The decision surprised Vought, and came just before the com-pany publicly announced that it would be slowing down production and fur-loughing employees for several months because of strikes against Boeing.

Fancher said Boeing will not chal-lenge the validity of the union. But an employee at Boeing’s newly acquired North Charleston operation has filed a request with the National Labor Relations Board seeking a decertification election that could disband the local Machinists union. The petition was filed July 30, the same day Boeing completed its purchase of the plant from Vought Aircraft Indus-tries for $580 million.

BOEING, continued from page 3

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Aug. 10 - Aug. 30, 20098 www.gsabusiness.com special edition: the money issue

The president and CEO of Spar-tanburg-based Advance Amer-ica is the subject of an ongoing

investigation by the U.S. Securities and Exchange Commission.

In a regulatory filing last month, Ad-vance America said it received an SEC Wells Notice that the commission may file a civil injunction action charging President and CEO kenneth Compton with insider trading of company stock in 2007.

According to the filing, SEC staff

connects Compton to “alleged insider trading involving ap-proximately $20,000 in losses avoided by third parties selling company stock dur-ing 2007.”

The SEC had not filed charges at the time GSA Business went to press.

In the company’s filing, Compton denies “making any improper trades or

engaging in any wrongdoing or other im-proper activity” and says he has “merito-rious legal and factual defenses.”

Compton had no further statement, said company spokesman Jamie Fulmer.

Advance America, meanwhile, is not being investigated, Fulmer said.

“From what we know, it appears to in-volve a small number of trades in 2007. It does not affect current business opera-tions,” Fulmer said. “We understand that the company is not a part of the investiga-tion, based on the Wells Notice.”

Advance America’s Board of Directors formed a special committee of non-man-agement directors to review the allega-tions and related facts and circumstances.

“The special committee and the other disinterested members of the Board of Directors have determined unanimous-ly to continue their strong support of Mr. Compton in his roles as president, chief executive officer and director and remain confident in his leadership,” the SEC filing stated. “The Special Commit-tee will continue to monitor this matter as it progresses.”

Compton has served as the company’s president and CEO since August 2005. He also serves on Advance America’s Board of Directors. Compton previously served as president of Milliken & Company’s global automotive group, also based in Spartanburg.

Advance America reports earningsAdvance America, Cash Advance Cen-

ters Inc. reported net income dropped 28.4% in the second quarter of 2009.

The Spartanburg-based lender post-ed a profit of $6.6 million, or 11 cents a share, compared to $9.3 million, or 14 cents a share, a year ago.

Total revenues for the quarter de-creased 7.4% to $150.1 million, compared to $162.1 million for same period in 2008. These comparisons include the results of operations in Arkansas and New Mexico, states Advance America exited in 2008.

In a conference call, President and CEO kenneth Compton said the com-pany continues to monitor pending state legislation across the country that could negatively affect lending activity in many states.

This year, Advance America has moni-tored 173 bills in state legislatures across the country that address consumer lend-ing, Compton said.

While profits are down, Compton said the company’s financial results “validate our products and services in a competi-tive marketplace and underscore the im-portance to consumers of having viable, cost-competitive alternatives to choose from when they encounter short-term financial challenges.”

In the second quarter, Advance America increased its provision for loan losses. The company said its provision for doubtful accounts as a percentage of total revenues was 22%, compared to 18.6% in 2008.

In addition, Advance America sold $2.2 million of written-off receivables during the quarter, compared to $0.5 mil-lion during the same period in 2008.

So far this year, the company has closed 165 centers in 26 different states. As of June 30, Advance America had an operating network of 2,635 centers and 78 limited licensees in 33 states, the Unit-ed kingdom, and Canada.

Advance America’s CEO investigated by SEC

Compton

Dollars

$ense

Dollarsand

by James T. Hammondjhammond@scbiznews.com

That’s a question many business leaders have been asking about their industries and the economy at large for a year now. Commerce slowed to a trickle

last winter. In the spring, optimism seemed to bloom, as Congress passed a $750 billion stimulus, and threw lifelines worth hundreds of billions more to banks and auto makers. But it quickly became apparent there was no silver bullet, and the recession likely will be long and deep, perhaps stretching beyond 2010.

Despite the bitter evidence of economic decline, there are signs of life in the business and financial world. The stock market has been rising recently. Deals are being made, for real estate, service companies, and manufacturing. Some banks are reporting prof-its again, albeit on one-time factors. In any crisis, there is money to be made. Foreclosed homes mean bargains to be bought by someone. Distressed banks shed valuable assets that other banks often can buy cheaply.

Robert Bach, chief economist for Grubb & Ellis, pointed out re-

cently that the Conference Board’s index of leading indicators increased 0.7% in June, its third consecutive monthly gain and the sharpest three-month rise since 2003. The index is a weighted average of 10 key variables designed to forecast eco-nomic conditions six to nine months in advance.

“The latest reading is a clear sign that the recession is drawing to a close,” Bach predicted.

Other signs that the financial panic has subsided include banks re-paying TARP funds to the federal government, and home sales in the local market showing steady increases for five consecutive months.

No doubt there is more economic pain ahead. Office and indus-trial vacancies are high and rising. And state economists fear the already high unemployment rate – the third-highest in the nation – could resume its climb after a recent two-month plateau.

But money will be made, even in these troubled times. And slowly but surely, profits and jobs will return.

This special issue of GSA Business will show you examples of companies and individuals that are finding gold amid the carnage of the current economic downturn.

Where’s the money in today’s flat economy?

Aug. 10 - Aug. 30, 200910 www.gsabusiness.com special edition: the money issue

Venture capital still up for grabs

fuji bets there’s gold in imageson coffee cups, in scrapbooks

Two years ago, printing personalized images on items such as coffee cups, Christmas tree ornaments and scrapbooks was a $300 million industry.

Today, it’s worth $1 billion and growing, and Fujifilm USA Inc. is creating 185 jobs in Greenwood to capture a large portion of that market. The market-ing subsidiary of Fujifilm Corp. of Tokyo is re-outfitting a plant that once made x-ray film. That market has gone digital, as has amateur photography.

With the demand for its traditional photo film down 80% from its peak, the company had to be nimble to transition to the digital age.

“In response to the rapid growth of the personal photo products mar-ket, we’re designing the new Fujifilm Greenwood lab from the outset with digital fulfillment as its primary purpose,” said John Prendergast, vice president of the P r i n t i n g Services Group at Fujifilm U.S.A. Inc. “We will begin operations in the fall of 2009 initially producing personal photo gifts for both retail delivery and di-rect mail to consumers.”

Fujifilm Printing Services supports many retail stores including Wal-Mart, and online photo Web sites, and serves consumers directly through its Fujifilm SeeHere.com photo Web site.

Fujifilm’s Greenwood complex is the largest Fujifilm manu-facturing operation in the country and the largest Fu-jifilm distribution center in the world.

Capturing the specialty photo imaging market

2007 – $300 millionToday – $1 billion and growing

John prendergast

by Scott Millersmiller@scbiznews.com

four venture capital firms still have millions in state-sponsored money to invest in

South Carolina companies. Plus, these firms often bring outside

investors with them to complete deals, meaning even more dollars coming to South Carolina, said Harry Huntley, ex-ecutive director of Invest SC Inc., the quasi-state agency created to help South Carolina startup companies gain access to capital.

Invest SC stemmed from the S.C. Ven-ture Capital Investment Act of 2004. The act allowed Invest SC to take out a $50 million line of credit, secured by state tax credits, from Deutsche Bank. The corpo-ration, which manages the money for the S.C. Venture Capital Authority, committed investments to four private equity firms:

• Nexus Medical Partners of Boston, $20 million;

• Noro-Moseley Partners of Atlanta, $10 million;

• Azalea Capital of Greenville, $10 million;

• Frontier Capital of Charlotte, N.C., $8 million.

Since then, Invest SC has committed an additional $8.5 million to Azalea.

Noro-Moseley and Frontier haven’t used any of their combined $18 million yet. Both have made offers to South Carolina compa-nies but for whatever reason, partnerships never materialized, Huntley said.

“They’re responsible to all of their investors,” Huntley said. “Even though South Carolina is an investor in their funds, we may be less than 10% of their funds so they have a lot of investors that they have a fiduciary duty to.”

Neither firm returned calls to comment. “There’s still plenty of time left,” Hunt-

ley said. “You’re usually looking at about a five-year period to put the money to work in venture capital, and we’re only two years into it.”

It’s unclear exactly how much Azalea and Nexus have left to invest.

Azalea recently helped a management group finance the purchase of Milliken & Co.’s auto body cloth division, which includes facilities in Abbeville and Spar-tanburg. Azalea also has supported Spar-tanburg-based Spartan Foods of America Inc. since 2005.

Nexus has been the most active of the four firms and has been successful in pair-ing its state-sponsored investments with dollars from other venture capital firms.

Nexus invested $2 million – along with an additional $2 million from its affiliate, Medicis Capital Partners of Germany – in a British medical device company called Deltex Medical, which in turn established its U.S. operations in Greenville.

“So they’re already coming with prov-en products,” Huntley said.

Nexus also recruited Sabal Medical to Charleston by leading a $2.6 million in-vestment and was part of a $7.7 million

The following firms received state-sponsored dollars from the S.C. Venture Capital Authority, and they still have millions to invest in South Carolina companies:

Nexus Medical PartnersBackground: Headquartered in Boston, Nexus funds medical and pharmaceutical companies. The firm typically works as the lead investor among a group of investors in a particular company. commitment from S.c. venture capital investment authority: ......................$20 millioncontact: Greg Zaic (617) 472-2805

Noro-Moseley PartnersBackground: The Atlanta-based firm invests primary in companies located in the Southeast with focuses in technology, health care and business services. commitment from S.c. venture capital investment authority: ......................$10 millioncontact: Kathy Harris (404) 233-1966

Azalea fundBackground: Based in Greenville, Azalea invests in Southeastern firms with established revenues and cash flows, as opposed to startup companies. commitment from S.c. venture capital investment authority: ...................$18.5 millioncontact: Pat Duncan (864) 235-0201

frontier CapitalBackground: Frontier, headquartered in Charlotte, N.C., provides expansion capital to established companies in information technology, software, marketing, health care, outsourcing and communications. commitment from S.c. venture capital investment authority: ........................$8 millioncontact: Richard Maclean (704) 414-2880

see VENTURE, page 11

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www.gsabusiness.com 11Aug. 10 - Aug. 30, 2009 special edition: the money issue

Steadman Hawkins Clinic at GHS expects to become major medical destination

The Steadman Hawkins Clinic in Vail, Colorado puts 100 orthopedic patients in beds every night, and half are from outside the Vail region. Family or friends often accompany

patients who come there for the clinic’s surgical skills, spending money in the region’s hospitality industry.

Already, the Steadman Hawkins Clinic of the Carolinas, at Greenville Hospital System’s Patewood campus, is attracting 10% to 15% of its pa-tients from outside the hospital’s traditional service area.

“I believe that could grow to 50%,” said Jim Silliman, president of Stead-man Hawkins of the Carolinas. “That’s the future we would like to have.”

Silliman compares the growing practice to big names in medicine.

“Is it going to be like the Cleveland Clinic, or the Mayo Clinic?” Silliman asks rhetorically.

“I don’t know, but the medical care here is second to none. This hospital is rated in the top 1% in the country in customer sat-isfaction.”

One of the clinic’s founders, Dr. Richard Hawkins, now lives and conducts research in the Upstate. And the University of South Carolina recently announced the creation

of an endowed chair in orthopedic research to be based at the Patewood campus.

half of employers say the economy has affected the benefits they offer employ-

ees, a survey of employers conducted by Colonial Life & Accident Insurance Co. of Columbia shows.

Colonial Life surveyed more than 750 human resource managers and benefits administrators at the Society for Human Resource Management An-nual Conference in New Orleans in July. Employers reported making the following changes to benefits plans be-cause of the recession:

• 26% increased contributions from employees

• 12% eliminated benefits• 12% offered employee-paid volun-

tary options

• 10% added benefits• 9% increased employer contributions“Today’s economy is forcing employ-

ers to make tough decisions regarding their benefits plans,” says Tom Gilligan, senior vice president for Colonial Life. “They’re trying to strike a delicate bal-ance between meeting employee needs and controlling costs.”

“These findings reinforce what em-ployers have been telling us for a while and validate last year’s survey findings,” says Gilligan. “Employers recognize that employee benefits have a pro-found impact on morale and job satisfaction. However, they don’t have the resources or time to ef-fectively educate employees about their benefits. Making benefits communication a strategic busi-ness priority is a real challenge.”

Other findings:• Nearly 42% of employers are consid-

ering changing their benefits packages in the next 12 months.

• Nearly 90% of employers think having one-to-one meetings between a benefits counselor and each employee would significantly improve their em-ployees’ understanding of their ben-efits.

• More than 60% of employers say they would consider adding employ-ee-paid voluntary benefits to enhance their benefits plans.

Economy affecting employee benefits, Colonial Life survey finds

investment that brought Myconostica Ltd., a medical company based in the United kingdom, to Charleston.

Still, the recession has stalled a lot of venture capital in-vesting.

In the second half of 2009, venture capital-ists invested $3.7 bil-lion nationally in 612 deals, according to the most recent Mon-eyTree Report from the National Venture Capital Association and Pricewa-terhouseCoopers, a global advisory firm. That’s a 15% increase from the first quarter but still as low as investing has been since the mid 1990s, the report said.

“Two years ago when (Invest SC) started, I don’t think anybody antici-pated the depth of this recession and

the way it has slowed this down,” Hunt-ley said. “Most of your venture funds have had to really drop back and really analyze the companies they’d already invested in and make sure they’re in

good shape. I think that might have taken their eyes off the road

for a little while. Right now, there’s not a lot of appetite in the market for risk.”

That doesn’t mean money isn’t available, from Invest SC or elsewhere. The MoneyTree report said life sciences, which

includes biotech and medi-cal device companies, remain

popular with venture capital-ists.

“Right now one of the hot buttons is anything that’s green (green energy, green technology) and management of health care records,” Huntly said. “Those are the two areas gaining a lot of attention from venture capital.”

the money issue

VENTURE, continued from page 10

Aug. 10 - Aug. 30, 200912 www.gsabusiness.com special edition: the money issue

Affordability could drive uptick in home sales

owning a home in the Upstate is within reach of more residents than ever, data show.

Michael Dey, Executive Vice President of the Home Builders Asso-ciation of Greenville, said the affordability index — median household income com-pared with median home prices — is very favorable in the Greenville market.

“In our market, 81% of houses that are on the market can be bought with the median income,” Dey said.

Joseph C. Von Nessen of the Division of Research at the Moore School of Business, states in the S.C. Housing Market Report that housing affordability is the highest it has ever been in South Carolina.

“Since July 2006, housing affordability has increased by 34%,” Von Nes-sen writes in the quarterly report. “South Carolina’s housing market is in a strong position relative to the rest of the nation.”

Von Nessen cites Federal Housing Fi-nance Agency figures that show the Spar-tanburg MSA ranks sixth in the nation in housing appreciation, and South Carolina ranks 20th overall.

“Although builders will have to make significant adjustments, there will still be demand for over one thousand housing starts a month in South Carolina for the remainder of 2009,” Von Nessen states. “The builders who successfully adjust to the new market conditions will be the ones who capture shares in this market.”

$52,913Median household income in S.C., 2007

$139,000 Median price of homes

sold, June 2009

by Scott Millersmiller@scbiznews.com

Devalued commercial real estate loans could push bank losses even higher in

coming quarters. That’s the expectation of The Palmetto

Bank of Greenville. The bank lost $17.9 million in the second quarter, a $22 mil-lion swing from the same period a year ago and the first loss the bank has suf-fered in this recession.

Anticipating defaults on commercial real estate loans, Palmetto Bank increased its loan loss provisions and asked share-holders to authorize 2.5 million preferred shares in an effort to boost capital.

The bank even applied for govern-ment funds, after advertising last year that it would not do so.

“Conditions have worsened since then,” said President and CEO Sam Erwin.

The South Financial Group, also of Greenville, expects its losses to contin-ue through the end of the year and into 2010, though it said losses should begin to lessen in the fourth quarter.

The parent company of Carolina First bank and Mercantile Bank in Florida re-ported a $111.5 million loss for the sec-ond quarter, or $1.23 a share, compared with a $16.8 million loss, or 23 cents a share, during the same period last year.

President and CEO Lynn Harton said losses on real estate in the Carolina coast-al and mountain regions should worsen in coming quarters, but the Florida real estate market may have hit a bottom, or is getting close.

That could lead to a decline in credit losses in the fourth quarter, Harton said, also warning that similar predictions could have been made last year.

“The question mark in my mind is what happens in the broader economy. It kind of feels to me like it did at the same time last year. We had taken the brunt of losses in Florida … And then of course the whole world changed in September and October,” he said. “We’re starting to see stabilization. We’re starting to see li-quidity in the market. We’re starting to see more (consumer) confidence. But I’m not going to say it’s not still fragile.”

Profitable banks are proceeding with caution too.

Rising loan lossesBB&T Corp., the third-largest bank by

deposits in South Carolina, and Bank of America Corp., the second-largest, both have increased their provisions for loan losses and repaid millions to the federal government.

“Difficult challenges lie ahead from continued weakness in the global econ-omy, rising unemployment and deterio-rating credit quality that will affect our performance for the rest of the year and into 2010,” said kenneth D. Lewis, Bank of America president and CEO.

Bank of America, based in Charlotte, N.C., reported net income of $3.2 billion in the second quarter. It posted credit-loss provisions of $13.38 billion in the quarter, about double year-ago levels.

Meanwhile, Winston Salem, N.C.-based BB&T reported that second quar-ter net income was $208 million. The

Commercial propertylooms in bank losses

The Palmetto Bank of Greenville opened their downtown headquarters earlier this year. (Photo/S. Kevin Greene)

see LOSSES, page 13

www.gsabusiness.com 13Aug. 10 - Aug. 30, 2009 special edition: the money issue

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by Scott Millersmiller@scbiznews.com

Bank failures are depleting the Federal Deposit Insur-ance Corp.’s coffers, and

South Carolina banks and others across the country are paying $5.6 billion to replenish them.

The South Financial Group of Greenville, for example, paid a $5.7 million special assessment to the FDIC in the second quarter.

Columbia-based SCBT Financial Corp. paid $1.3 million.

Southern First Bancshares, the parent company of Greenville First bank, paid $300,000 and said the assessment was a key reason that sec-ond-quarter income dropped from $862,000 a year ago to $355,000.

These funds are in addi-tion to the FDIC premiums that banks pay each quarter.

“Basically, they’d already raised the base fee to the point that it was costing us about $100,000 a quarter over what is was a year ago,” said Jim Aus-tin, executive vice president and CFO of Southern First. “Then on top of that they hit us with the special assessment.”

The Board of Directors of the Fed-eral Deposit Insurance Corporation voted in May to levy a special assess-ment on insured institutions as part of the agency’s efforts to rebuild the De-posit Insurance Fund and help main-

tain public confidence in the banking system.

The final rule establishes a special assessment of five basis points on each FDIC-insured depository institution’s assets, minus its Tier 1 capital, as of June 30, 2009.

The levy will collect $5.6 billion. Right now, the fund has about $13.1 billion in it, said FDIC spokesman Da-vid Barr. At the end of 2008, the FDIC set aside $22 billion from the fund to cover the anticipated cost of bank fail-ures in 2009. So far, it has spent about $13.5 billion, Barr said.

With the special assessment, the FDIC projects that the fund

will remain low but positive through 2009 and then be-gin to rise in 2010.

However, FDIC Chair-man Sheila Bair also cau-tioned that given the in-herent uncertainty in these projections and the impor-

tance of maintaining a posi-tive fund balance and reserve

ratio, “it is probable that an ad-ditional special assessment will

be necessary in the fourth quarter, although the amount of such a special assessment is uncertain.”

“Assessments are a significant expense, particularly during a financial crisis and recession when bank earnings are under pressure,” Bair said. “We recognize that assessments reduce the funds that banks can lend in their communities to help re-vitalize the economy. On the other hand, deposit insurance provides a benefit for which banks have always paid.”

Banks pay special fees to supplement FDIC

bank reported a $701 million provision for credit losses in the second quarter, which resulted in an increase in the al-lowance for loan and lease losses as a percentage of loans and leases held for investment to 2.19% at June 30, com-pared to 1.94% at March 31 and 1.62% at Dec. 31, 2008.

SCBT Financial Corp. of Columbia re-ported net income of $1.5 million for the second quarter, down from $6.1 million during the same period last year.

During the second quarter, SCBT raised nearly $30 million through a stock offering during the second quarter and repaid the $64.8 million it received from the government’s Troubled Asset Relief Program.

Still, the provision for loan losses nearly doubled to $4.5 million, and non-

performing assets as a percentage of loans and repossessed assets increased to 1.74%, compared to 0.39% a year ago and 1.34% for the first quarter of 2009, reflecting ongoing pressure in the real es-tate market.

Southern First Bancshares Inc., the holding company of Greenville First Bank, announced net income of $355,000 for the second quarter compared with $862,000 for the same quarter in 2008.

It boosted its provision for loans loss-es by $275,000 to $1.7 million, though its percentage of nonperforming assets dropped slightly to 1.77%. Nonperform-ing assets as of June 30 consisted of $8.7 million of nonperforming loans and $4.5 million of other real estate owned.

“The economic recession and difficult banking environment continue to nega-tively impact our company’s earnings,” said CEO Art Seaver.

the money issue

LOSSES, continued from page 12

Aug. 10 - Aug. 30, 200914 www.gsabusiness.com special edition: the money issue

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Amid keen competition for jobs, Pickens prepares to build 6 new schoolsby James T. Hammondjhammond@scbiznews.com

Construction is a buyer’s market these days.

Pickens County’s school district has $365 million of new construction and renovations under way or on the drawing boards, including four replacement high schools and two elementary schools.

The school district already authorized renovations and expansions at six elemen-tary schools. The work had been estimat-ed to cost $14.21 million. When all those bids were in, the total was $12.25 million, almost $2 million, or 14%, less than had been expected. That experience bodes well for the district to save some money on its new schools as contractors aim their bids to win work in a recession economy.

The Pickens district has not yet sought bids for the high school projects, but Joe Tommie, director of construction pro-curement, acknowledged, “It’s a good time to build. We hope to see some build-ings started by Christmas.”

Officials at the district’s neighbor, An-derson District One, felt like it had struck gold when preliminary bids for the new Powdersville High School, estimated to cost $38 million to build, came in almost $10 million below that figure on July 1.

The bids again illustrated the deep dis-counts construction companies are will-ing to give to win contracts in the current deep recession.

The combined $450 million construc-tion programs in the two school districts amount to a mini-stimulus program that

has attracted bidders that might not have looked at the projects in fatter times. Other districts also have construction under way, including projects in Green-wood County and Oconee County.

Thirteen contractors bid on the site preparation for Powdersville High School, a piece of the project already awarded, said Bill Myers, vice president of the construc-tion management division at M.B. kahn Construction Co., and project manager for the Anderson One program. In better eco-nomic times, Myers would have expected four to six bidders. The low bid was $1.4 million, a jaw-dropping 39% compared with previous estimates of $2.3 million, Myers said. Ten of the bids were below the earlier $2.3 million estimate, he said.

Myers said he has mixed emotions about the savings being realized by the district.

“As the owner’s agent, we’re really pleased for the owner,” Myers said. “But we’re also a general contractor, and I feel the pain.”

Myers said he does not believe any of the winning contractors set out to lose money on a project. But he said they are bidding at or near their cost just to keep their employ-ees and subcontractors working.

“It trickles down to the people who sell the blackboards, or the bricks. Right now everyone is willing to lower their mar-gins,” Myers said. “It’s a mystery to me how prices have fallen so low.”

For public institutions with money to spend, construction appears to be buyer’s market

school ConstructionPickens School District sees construction costs fallElementary school renovations and additions School Cost Estimate Actual Cost Savings Ambler $2,792,000 $2,213,278 $578,722Central $2,888,000 $2,285,000 $603,000Crosswell $735,000 $780,943 -$45,943East End $700,000 $512,406 $187,594Forest Acres $975,000 $533,651 $441,349Hagood $1,660,000 $1,338,000 $322,000Holly Springs $2,022,000 $2,447,929 $425,929A.R. Lewis. $2,436,000 $2,137,792 $298,208 Total $14,208,000 $12,248,999 $1,959,001

General building contract for Anderson District one’sPowdersville High SchoolBidders Base Bid Edcon, Inc. ...........................................................................................$11,674,000 EMJ Corporation ................................................................................$11,790,000 Matrix Construction Co. .................................................................... $11,813,084 Martin Engineering ............................................................................$11,820,596 Melloul-Blamey Construction SC Ltd. .............................................$12,193,000 China Construction America of SC Inc. ..........................................$12,480,000 LeChase Construction Services LLC ................................................$12,630,000 The Harper Corp. ................................................................................ $12,650,000 Beam Construction Co. ..................................................................... $12,658,450 Contract Construction Inc. ...............................................................$12,697,000 Yeargin Potter Shackelford Construction ........................................$12,943,000

Powdersville High School (Photo/Provided)

MB Kahn Construction executive Bill Myers sorts the bids for Powdersville High School. (Photo/James T. Hammond)

www.gsabusiness.com 15Aug. 10 - Aug. 30, 2009 special edition: the money issue

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lucas Glover wasn’t the only winner when he survived a late advance from Phil Mickelson to claim a rain-soaked

U.S. Open championship. His win reaffirmed the Upstate’s status as a great

place to play a round, and that could lead to tourism dollars flowing into local restaurants, hotels and re-tailers and new memberships at local golf clubs.

Memberships at the Thornblade Club – Glover’s home course – have spiked in the last few weeks,

said kevin Schreel, head golf professional. “I don’t know if that’s directly related to

Glover,” Schreel noted. “But considering the economic situation, we’ve done pretty well with new memberships.”

Even Glover’s unlikely championship hasn’t attracted more tourists or increased member-ships at Upstate golf clubs, “it has definitely in-spired people to get back out and play,” Schreel said.

Glover’s U.S. open victory shines light on Upstate’s golf assets

by Scott Millersmiller@scbiznews.com

“ REO” could spell “bargain” for investors, if they have the cash, the time and the stom-

ach to take the risk.As foreclosures increase, so does the

“OREO,” or other real estate owned, that banks are trying to unload from their portfolios.

The Greenville County Court re-ports around 100 foreclosure sales ev-ery month. Greenville, Anderson and Spartanburg counties had a combined 1,549 homes in foreclosure in the first quarter and 1,239 in the second, ac-cording to data from the national real estate tracking firm RealtyTrac. Six month totals show that South Carolina had a 33.32% increase in foreclosures in the first half of 2009 compared to the first half of 2008.

“There are a lot of properties out there that are selling for a big discounted price compared to the appraisal,” said Nick Sabatine, CEO of the Greater Greenville Association of Realtors. “They’re buying them and probably flipping them, though to tell you the truth, this is not a good

time to flip a house either. Some of them may be sit-ting on them awhile.”

Upstate banks report that local buyers – either investors or sometimes end users – are the majority of those placing bids on OREO, which includes commercial and residential prop-erty. By contrast, in-vestors from all over the region and coun-try have been buying bank notes, they said.

In some cases, banks are now “bundling” properties together to attract investors, said Jim Blair, a real estate attorney at Nexsen Pruet’s Greenville office

Real estate investing has slowed to a crawl, he said, because investors with money can’t stomach any more risk.

“There are lots of deals to be had, but there’s not a lot of appetite,” he said. “There’s no question that there are some very nice pieces of real proper-ty both commercial and residential that could be bought right now at what most

people would con-sider a sale price. So the question re-mains, why is it not being sold?”Because the real

estate market is risky, par-ticularly now, he said.

While the firm already did some foreclosure work, Nexsen

Pruet formalized a distressed property group to handle

the increase in business last October.

“We’ve seen a lot of things over the last

24 months that you don’t normally

see. We’ve seen groups of

people pool money to-gether in

investment funds. People have

actually created securi-ties that they would be able

to deploy as these (real estate) op-portunities became available,” Blair said.

“That seems like it slowed down a lot,” Blair added. “There was a lot

more activity in 2008, than there is in 2009. We have not had a new fund, I don’t think in this quarter. The prob-lem that we’ve seen in the last bit of the cycle is the buyers who were doing deals, they have about all the nonper-forming assets in their portfolio that they want right now. The problem is, once you get two or three or 20 or however many you can afford, then those aren’t selling.”

Many of those speculators have tak-en all the risk they can stand, he said.

Among many problems stalling real estate sales, foreclosed properties weigh down the values, or appraisals, of all other properties for sale. That puts everyone in a tough spot: the sell-er wants to recoup as much of the loss as possible, but the buyer can’t afford a larger down payment and banks don’t want to increase the loan amount be-yond the appraisal price.

And some times, foreclosed prop-erties require a lot more work than an investor would want.

“I’ve seen houses where the ceiling fans are removed, light fixtures, chan-deliers, anything that a homeowner can remove before the bank takes the title,” Sabatine said.

o

Investors see reward, risk in foreclosures

Aug. 10 - Aug. 30, 200916 www.gsabusiness.com special edition: the money issue

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Despite budget restraints, higher education institu-tions have some money to

spend on capital projects. Clemson University, for example, will

receive $14.7 million in federal stimulus funds, part of which will fund renovation of Lee Hall. The university also has applied for a stimulus grant that would provide half the funding needed to construct the new $50 million life sciences building, said Clemson CFO Brett Dalton.

Clemson already has hired the Pazdan-Smith Group and Thomas Phifer and Partners to handle the architecture and design work for the Lee Hall renovation, Dalton said. Construction will be put to competitive bid, he said.

Collectively, state universities will re-ceive some $84 million, which only in-cludes the dollars that the state Supreme Court ruled that Gov. Mark Sanford couldn’t reject. Other money is available for universities through applications with local, state and federal agencies that re-ceived stimulus funding.

The universities do not view stimulus funding as way to stop the bleeding from state budget cuts that have forced layoffs and program downsizing.

“These funds are one time,” Dalton said. “What we lost from the state is re-curring funding. In no way can that one-time funding replace the loss of $40 mil-lion from the state annually.”

Other recipients agree. That means much of the money will

be used to renovate space, build new labs or purchase equipment, said Robert Con-nelly, vice chancellor for business affairs at USC Upstate.

USC Upstate expects to receive $2 mil-lion each of the next two years, he said.

The University of South Carolina will receive about $24 million, including $4 million for the school of medicine.

“Because stimulus funding will be for only two years, generally, the university will not use those funds for recurring ex-penditures. A good example of how we will use it is for laboratory equipment and instructional technology along with the hiring of post-doctoral associates and graduate assistants that broaden our reach in research and instruction,” said USC spokeswoman Margaret Lamb. “The key is that in all of our funding decisions, we will select the uses that have the greatest impact on our mission and stimulate the S.C. economy through local spending.”

Clemson will spend about $10 million

to renovate Lee hall and the rest will be used for operations, Dalton said.

“Instead of putting faculty salaries on those dollars, it’s our hope that ultimately those funds will be use to purchase equip-ment,” he said.

In addition to those funds, Clemson’s Public Services Activities division will re-ceive $2.5 million.

In addition, researchers are busy sub-mitting grant applications to federal agencies that have stimulus funding to spend, Dalton said.

“I would say hundreds of grants,” he said. “Some of them support physical in-frastructure for research.”

A prime example, Dalton said, is a grant for science research that Clemson could use to construct a new life sciences building, which has been put on hold.

“We have submitted a proposal that would provide about half the funding needed to resume construction,” Dalton said. “That would be a really important move for Clemson University as well as the local economy. We won’t know about that proposal until October.”

Higher education getsboost for capital plans

federal Stimulus fundsfor colleges, universitiesUniversity of South Carolina (Columbia) ..................... $23,945,887Clemson University ........ $14,691,917Medical University of South Carolina ........... $12,671,177University of Charleston ... $4,692,447South Carolina State University ............... $3,253,587Winthrop University .......... $3,092,270Francis Marion University ...$2,588,272Clemson Public Services Activities ............ $2,500,000Coastal Carolina University......................... $2,270,097The Citadel ...................... $2,161,240USC Upstate .................... $1,959,567USC Aiken ....................... $1,469,806Lander University ............. $1,440,348USC Sumter ........................ $575,463South Carolina State University PSA .................... $500,000USC Beaufort ...................... $481,777University Center of Greenville ...................... $364,440USC Lancaster .................... $356,295USC Salkehatchie ............... $310,271USC Union .......................... $138,095

TOTAL $84,154,873Source: U.S. Department of Education

www.gsabusiness.com 17Aug. 10 - Aug. 30, 2009 special edition: the money issue

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Most Recent Patent 2008CompanyAddressPhone/Fax/Web Site

U.S. Patents:2008/

2005-2007 DescriptionPatent No./

Date Assigned Top Local Official Products/Services

YearEstablished

LocallyMilliken & Co.PO Box 1926, Spartanburg, SC 29304864-503-2020/864-503-2100/www.milliken.com

39170

Wash-durable, liquid repellent, and stainreleasing polyester fabric substrates

7,468,333December 23, 2008

Roger Milliken,Dr. Joe Salley,Jim McNulty

Manufacturer of textiles, chemicals,carpets 1900B

Sealed Air Corp.PO Box 464, Duncan, SC 29334864-433-2000/INP/www.sealedair.com

11C47C

UV- or heat triggered low oxygen packagingsystem employing an oxidizable polymer

resin and a peroxide7,468,144

December 23, 2008Karl Deily, president CryovacFood Packaging, Sealed Air

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Manufacturer of materials and systemsfor protective presentation and fresh

food packaging1955

Jackson & Perkins Wholesale Inc.PO Box 5002, Hodges, SC 29653800-545-3444/800-826-5700/www.jproses.com

9INP Hybrid tea rose plant named `JACormag` PP19,556

December 9, 2008 Charles (Chas) Fox, president Roses, wholesale and mail order 1872

Clemson University201 Sikes Hall, Clemson, SC 29634864-656-4233/INP/www.clemson.edu

733

Surface plasmon induction in multiwalledcarbon nanotube arrays

7,456,972November 25, 2008 James F. Barker, president Higher education 1889

Poly-Med Inc.6309 Highway 187, Anderson, SC 29625864-646-8544/864-646-8547/www.poly-med.com

713

Inorganic-organic melted-extruded hybridfilaments and medical applications thereof

7,465,489December 16, 2008

Dr. S. W. Shalaby, presidentand director of R&D

Proprietary polymers and biomaterialstechnology 1995

Jacobs Chuck Manufacturing Co.PO Box 592, Clemson, SC 29633800-688-8949/864-654-5001/www.jacobschuck.com

417 Chuck with spindle lock 7,455,302

November 25, 2008 Tom Warner, plant manager Manufacturer of industrial chucks 1902

Kemet Corp.PO Box 5928, Greenville, SC 29606864-963-6300/864-963-6322/www.kemet.com

427

Electrode compositions containing carbonnanotubes for solid electrolyte capacitors

7,348,194March 25, 2008 Per-Olof Loof, CEO

Manufacturer of solid tantalum, multi-layer ceramic and aluminum organic

capacitors1963

GHC Research Development Corp.701 Grove Road, 3rd Floor, Greenville, SC 29605INP/INP

31 Lytic peptide prodrugs 7,456,146

November 25, 2008Susan J. Bichel, registered

agent Tax exempt research institute INP

Para-Chem Southern Inc.PO Box 127, Simpsonville, SC 29681864-967-7691/864-963-1241/www.parachem.com

3INP Trowel blade D577,971

October 7, 2008John W. Jordan, chairman/

CEOManufacture, sales, service of customspecialty coatings, emulsion polymers

and adhesives1959

Sassy Tails LLCD1140 Woodruff Road, #106-129, Greenville, SC 29607864-286-8103/INP/www.sassytails.tv

3INP Elastic ornamental hair band D561,939

February 12, 2008 Kim Madden, president Manufactures and sells hairaccessories INP

INP = Information not provided. NR = Not ranked. N/A = Not applicable. Source: U.S. Patent and Trademark Office. Although every attempt ismade to ensure the accuracy and thoroughness of GSA Business lists, omissions sometimes occur. Please make additions atwww.gsabusiness.com by clicking on the Resources tab. Go to Lists & Leads and then click on Add Data.11900s2Assignee listed as Cryovac Inc. (Duncan, SC)3Filed a voluntary petition for liquidation under Chapter 7 in the U.S. Bankruptcy Court for the District of South Carolina, Spartanburg onDecember 8, 2008

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Aug. 10 - Aug. 30, 200918 www.gsabusiness.com special edition: the money issue

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Most Recent Patent 2008CompanyAddressPhone/Fax/Web Site

U.S. Patents:2008/

2005-2007 DescriptionPatent No./

Date Assigned Top Local Official Products/Services

YearEstablished

LocallyAdd-On Timer LLC409 Magnolia St., Spartanburg, SC 29303INP/INP/www.aotrx.com

2INP Add-on timer for medicine container 7,382,692

June 3, 2008 William K. Hildebrandt Add-on timer for medicine container 2006

Contec Inc.PO Box 530, Spartanburg, SC 29304864-503-8333/864-503-8444/www.contecinc.com

21

Mop head including contouredtubular fluid retaining strand

elements7,389,559

June 24, 2008 Jack McBride, CEOClean room wipes, chemically treatedwipes for automotive and industrial

surface preparation, distribution1988

Hartness International Inc.PO Box 26509, Greenville, SC 29616864-297-1200/864-297-4486/www.hartness.com

219

Apparatus for diverting a stream ofarticles

7,413,072August 19, 2008 Sean Hartness, COO/VP Packaging solutions 1940

Head Ornamentals Inc.2375 Blue Ridge Blvd., Seneca, SC 29672864-882-5060/INP/www.gardendebut.com

21 Leucothoe plant named `HOWW` PP18,396

January 1, 2008 Bob Head Breed, develop and patent new plantmaterials under the Garden Debut name 1999

J. Kirk Leaphart, Jr. and C. Mark LeaphartB201 E. Curtis St., Simpsonville, SC 29681864-228-3888/864-228-3886

23 Compressed air drain opening device 7,340,783

March 11, 2008 INP INP INP

Marjen Inc.2131 Woodruff Road, Suite 2100-115, Greenville, SC 29607864-281-1011/INP/www.marjeninc.com

23

Vehicle identification card withremovable key tag

7,373,749May 20, 2008 INP Vehicle key tags INP

Professional Tool Products LLCPO Box 3664, Greenville, SC 29608864-834-6662/864-834-6653

214 Housing for a rotary tool D568,131

May 6, 2008 Martin Huguet, president Wholesale industrial equipment andhardware 2000

Prym Consumer USA Inc.PO Box 5028, Spartanburg, SC 29304864-576-5050/864-587-3353/www.dritz.com

24 Handle D566,515

April 15, 2008Johan A. Starrenburg,

president/CEOLargest manufacturer and distributor of

sewing, quilting and craft-related notionsin North America

1959

Reliance Electric Technologies LLC6040 Ponders Court, Greenville, SC 29615864-297-4800/864-281-2487/www.reliance.com

21 Electric motor D576,941

September 16, 2008Joseph D. Swann,

president Manufactures small electric motors 1904

Span-America Medical Systems Inc.PO Box 5231, Greenville, SC 29606864-288-8877/864-288-8692/www.spanamerica.com

23 Shear reducing chair cushion 7,444,707

November 4, 2008James D. Ferguson,

president/CEOSpecialty solutions for pressure

management and patient positioning 1975

Super Duper PublicationsPO Box 24997, Greenville, SC 29616864-288-3536/864-288-3380/www.superduperinc.com

22 Acoustic feedback headset D573,131

July 15, 2008Thomas and

Sharon Webber, founders Educational and therapy materials 1986

Woven Electronics LLC, a TSI CompanyPO Box 189, Mauldin, SC 29662864-963-5131/864-963-1761/www.wovenelectronics.com

22

Fiber optic security system forsensing the intrusion of secured

locations7,402,790

July 22, 2008Scott Chandler, VP of

business development;E.J. Mondor, president

Analog and digital custom-engineered,patented interconnect solutions INP

INP = Information not provided. NR = Not ranked. N/A = Not applicable. Source: U.S. Patent and Trademark Office. Although every attempt ismade to ensure the accuracy and thoroughness of GSA Business lists, omissions sometimes occur. Please make additions atwww.gsabusiness.com by clicking on the Resources tab. Go to Lists & Leads and then click on Add Data.1DBA 2L Products Inc.

Researched by Elizabeth Feather

www.gsabusiness.com 19Aug. 10 - Aug. 30, 2009 special edition: the money issue

Part I: Deposit growth and lending practices

by Francis B. Allgoodfallgood@gsabusiness.com

in one of the worst economies in one of the most competitive banking markets in America,

five banks founded in 2005-2007 face heightened demand for credit quality and deposit acquisition.

With 45 banks in the Upstate, seven control about 68% of the market. The start-up bank class of 2005-2007 com-bined represents only about 2.4%. But they represent the ongoing evolution of the region’s banking sector, which has traditionally been fertile soil for new bank formation.

Now more so than ever, capital is king. While Congress is encouraging banks to loan more, regulators are urging caution.

“I understand both positions, but the bottom line we, as bankers, have to make that decision on where in that whole continuum do we need to be,” said John Poole, president of two-year-old Carolina Alliance Bank in Spartanburg. “We’ve grown our loan portfolio every month and have been a little more conserva-tive, and any prudent businessman would say that it makes sense to do that.”

All banks have been hurt by land, commercial real estate, and acquisi-tion and development loans as real estate prices suffer. Some were more heavily invested.

CommunitySouth Bank and Trust has raised more than $384.7 million in assets since 2005, but in the first quar-ter the bank attributed $1.3 million in loan loss provisions.

“We think it’s prudent to go ahead and put money in the loan provi-sion,” said Allan Ducker, CEO. “Yes,

I would say our real estate (portfolio) is pretty heavy, but at the end of the day you have collateral. I would rath-er have to liquidate real estate than receivables or inventory even in this environment.”

Pinnacle Bank is having its best year, said David Barnett. The bank is currently expanding its head-quarters in Greenville, adding 4,500 square feet.

“We’re making money,” said the bank’s president and CEO. “Our prof-itability is ahead of our projects and I think that’s because we’ve taken a real conservative approach.”

Barnett admits it would be tough to raise $18.5 million in assets on a $12.5 million goal like the bank did in 2006. Pinnacle Bank has more than $112 million in assets today.

“The biggest benefit for us is we did not have a huge investment in residential real estate,” he said. “We didn’t do a lot of A & D (acquisi-tion and development) lending. All of those things have helped us to be healthy right now.”

About nine months ago, Indepen-dence National Bank changed its strat-egy and deleveraged its balance sheet, according to Larry Miller, president and CEO.

“Lending is down,” he said. “Banks aren’t loaning as much money due to regulators and the general state of the economy.”

On an 80% loan-to-value, for exam-ple, banks may have offered in the past up to 85% to a qualified or preferred client, Miller said. While the client is the same, regulators may frown upon that transaction today.

“If that’s going to be the case, that’s going to be detrimental to the organi-zation, so I have to hold (the borrow-er) to a higher standard,” Miller said. “If something unthinkable happens, that 5% shortage on the down pay-ment may turn out to be a 10% or 15% shortage given the real estate values.”

A steady, conservative growth model has worked well for Bank-Greenville.

“That’s good for the economy we’re in,” said Paula king, chief financial of-ficer. “Having said that, we don’t have the luxury of a bank that’s maybe 10 years old with $500 million (in as-sets) sitting back during this period and saying, ‘We’re going to stop the growth.’ ”

The start-up banks have seen suc-cess in raising capital and growing deposits. From March 2008 to March 2009, Carolina Alliance and Pinnacle Bank had deposit growth of more than 35%. CommunitySouth raised $4.3 million at the end of 2008 through a supportive debt offering.

“The fact that our client can walk in, kick the tires and talk to the manage-ment team, there’s a sense of knowing who you are working with that offers some reassurance in this sort of diffi-cult environment we have,” said Russel Williams, BankGreenville’s president and CEO.

In the first four and a half months since Independence opened its Simp-sonville location, the branch has col-lected $4.5 million in deposits.

BankGreenville and Carolina Al-liance have only their headquarters, Greenville-based Pinnacle Bank has a second branch in the Powdersville area, Independence National has three locations in Greenville County, and Easley-based CommunitySouth has additional branches in Anderson, Greenville, Greer, Mauldin and Spar-tanburg.

CommunitySouth and Pinnacle Bank locations are leased, not owned. CommunitySouth has put its seventh branch on hold to be located in West Spartanburg. The bank still plans to eventually build at that location.

Read more in this two-part series about the bank class of 2005-07 in the Aug. 31 edition.

The bank class of 2005-07 bankGreenville {Established 2006} 2008 2009 ChangeAssets $65.5 $89.5 26.8%Deposits $47.3 $64.2 16.9%Capital + $10.1 $11.3 10.6%

troubled asset ratio: .............................. 10.9%

Carolina Alliance bank{Established 2007} 2008 2009 ChangeAssets $116.6 $172.5 32.4%Deposits $91.2 $141.2 35.4%Capital + $24 $23.5 -2.1%

troubled asset ratio: .................................. 0%

CommunitySouth bank and Trust {Established 2005} 2008 2009 ChangeAssets $382.2 $384.7 0.6%Deposits $310.5 $322.8 3.8%Capital + $35.8 $40.3 11.2%

troubled asset ratio: ............................. 45.5%

Independence National bank {Established 2005} 2008 2009 ChangeAssets $122.9 $140.4 12.5%Deposits $93 $105 11.4%Capital $16.9 $16.1 -4.78%

troubled asset ratio: ............................. 14.9%

Pinnacle bank of South Carolina {Established 2006} 2008 2009 ChangeAssets $75.5 $110.5 31.7%Deposits $53.3 $86 38%Capital $16.5 $17.1 3.5%

troubled asset ratio: ............................... 7.8%

Information is in millions. Data is from March 31 in 2008 and 2009, and is provided by American University’s Investigative Reporting Workshop and MSNBC. The “troubled asset ratio” listed is from March 31, 2009, and is not an FDIC statistic. The percentage is derived by adding the amounts of loans past due 90 days or more, loans in non-accrual status and other real estate owned (primarily properties obtained through foreclosure) and dividing that amount by the bank’s capital and loan loss reserves. The national median is 11.7%.

Aug. 10 - Aug. 30, 200920 www.gsabusiness.com special edition: the money issue

by James T. Hammondjhammond@scbiznews.com

Baby boomers eager to retire, a looming tax increase, and scarce operating capital

could drive a wave of mergers and acquisitions in the months ahead, local investment bankers predict.

For example, there are a hundred or more small businesses in the Upstate that specialize in outsourced staffing, says Reg Greiner of The Capital Corpora-tion. He thinks that number will shrink by 20% to 30% when the recession’s credit crunch is fully felt.

Meanwhile, many small business own-ers are nearing retire-ment, and seeing the value of their retire-ment nest egg shrink-ing, says Devin Green, The Capital Corporation’s director of operations. They want to sell their busi-nesses and recoup as much value as pos-

sible from the sweat equity that went in to those businesses.

In addition, many of the small busi-nesses have seen their access to operating capital shrivel as banks adopt more con-servative guidelines. Starved of access to borrowed funds, these small companies may see sale or merger as the only alter-native to closing the doors.

“The ground is shifting under our feet every day,” Green said. The momentum in such deals is shifting toward buyers, but sellers can still get full value for their properties, he said. They just may have to wait a while to be paid for it.

In a different environment, an owner selling a business might expect a 100% cash payment when the transaction closes. In today’s environment, when buyers are more anxious about the on-going value of a business, payments are more likely to be structured with a partial payment at closing, and the rest paid out over time.

That’s the experience of Ranger Aero-space LLC, a Greenville-based owner and operator of aviation and aerospace companies. Ranger buys a company, operates it and grows it for four to five years, and then sells the company to a new owner who aims to operate it over the long term.

“We don’t do bail-outs,” said Steve Townes, president, CEO and Founder of Ranger Aerospace. He said companies that Ranger buys have owners near re-tirement and seeking to cash out, or who want to remain an equity partner and need cash to grow the business.

Ranger recently bought of CAV Inter-national Inc., a government-outsourcing contractor specialized in airfield services and logistics. Today, Ranger has about $30 million in annual revenue and an an-nual growth rate of 50%. It operates the largest air base logistics operation in the world in kuwait for the U.S. Air Force.

Another, similar, investment is pend-ing, Townes said, which, if completed, would triple the size of the company by Labor Day.

Since Ranger’s start-up in 1997, it has completed $340 million in transactions, chalked up a 51% return on investment on its best deal, and has created more than 2,000 jobs in the process.

Townes and his partners say there are plenty of middle market companies in-terested in selling, but they all probably must downsize their expectations for a buyout. A seller today most likely must participate in the deal, by carrying a note for part of the sale; by structuring a pay-out over time that is pegged to the perfor-mance of the company; or by hold some stock in the new company.

“A seller will have the same stake as I do,” Townes said. “But he’ll get a big bang at the back end of the deal.”

Townes, Chief Operating Officer Bill McLendon, and Chief Financial Officer Jeffrey Hartman participate financially in the deals along with private equity part-ners, some of whom have invested in pre-vious purchases and sales of companies with Ranger. Townes said he is personally invested in the company “in the seven figures range.”

The current economic downturn has affected their business, they say. There’s a recession-induced discount on the current value of companies. That’s the downside for sellers. But there’s also tremendous upside potential for the sellers who agree to main-tain a long-term invest-ment in the new company.

The Ranger team re-mains fundamentally opti-mistic about future econom-ic growth. “We’ll surge back,” Townes asserts.

“Sellers realize the market is down and they know they can realize some value now, and more gains later,” said Hartman. “It’s a very attractive the-sis.”

And active management of the com-panies they buy is key to future growth and profits.

“We’re going to work with them to grow the company,” McLendon said. “We’re a services company. Operations add value to the company.”

Ranger plans additional growth in-vestments and acquisitions in the air base logistic field. CAV has experienced more than 50% compound annual growth rates from 2005-08.

The Capital Corporation’s Green and

Greiner agreed the window of opportu-nity for both buyers and sellers to benefit from deals remains open.

One motivating force for well-in-formed sellers is the real possibility that the Democratic majority Congress will increase the capital gains tax by 10-20 percentage points by the end of next year. Deals that close before such an increase would leave more money in the pockets of the seller.

The sale of a business typically takes six to nine months,

Green said, estimating that 90% of the potential sell-ers he talks to don’t know that the tax on capital gains will likely rise in the next 18 months.

Asked to suggest how they’d approach invest-

ing $200 million in merg-ers and acquisitions, Greiner

and Green had different ap-proaches:

Greiner would look at business service companies versus asset-heavy businesses, such as manufacturers. He’d prefer service businesses that can be scaled up and down quickly with labor. And he likes businesses that handle pay-ments and transactions.

Green said he would not care about the business sector so long as the poten-tial acquisition has a good management team. He wants companies with a diverse client mix, leaders with a proven track re-cord of success, and an advantage in the marketplace, such as technology that is protect by a patent.

“We know buyers with deep pockets who share that opinion,” Green said.

Recession is crucible for restructuring economy

Ranger Aerospace executives Steve Townes (sitting), the CEO; CFO Jeffrey Hartman (standing, left), and operations chief Bill McLendon. (Photo/James T. Hammond)

Greiner

Green

the money issue

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by Francis B. Allgoodfallgood@gsabusiness.com

In January 2006, David Benner opened Mainstay Industrial LLC in Duncan. A lot has happened in three years for

the distributor of industrial valves, fit-tings, pumps and mixers, including one of the worst economies in the nation’s history. Benner discusses being an entre-preneur, the financial market and the upcoming Industrial Facility Mainte-

nance Show along with the Association for Facility Engineering’s Annual Meet-ing to be held in Greenville in October.

GSA: As an entrepreneur, what have you learned in your first three years in business? You said business has been down 20%, but activity and orders are picking back up.

David Benner: Sometimes I think I should have been scared back then, and what I learned is I didn’t know everything about running a business. I’ve learned through reading various books and asso-ciating with other business owners.

One particular group I work with is called C-12 Group. There are about 10 or 12 of us and we meet once a month and we go over key elements of our business.

GSA: What are some of the things you are doing now to ensure you are making money?

Benner: Our business model is be-coming daily. What are our expenses we can trim? It’s learning what margin you can mark up that is a fair market value but you are maintaining so you’ll be here to-morrow. We’re also working with custom-ers who are paying us slower because of their own difficulties and we are manag-ing that cash flow.

GSA: Your customers are manufac-turers, and if they are not manufacturing

Benner says adoptsustainable alternatives

people in the news

news Briefs

David BennerFamily: Allison, wife; Kirby, Judy, Lucy, daughters

education: Civil engineering degree from Greenville Technical College

hobbies: Attending live sporting events, fishing, yard work

Favorite restaurant: Fuddruckers

Favorite movie: Sound of Music

Favorite book: “Good to Great” – Jim Collins

greatest business challenge: Business partnering leaving and having to continue on

due to lower demand, do you look at dif-ferent products to sell them?

Benner: Yes. It helps us to increase our volume on the shelves with the same cus-tomer base. We have also teamed up with HM Craig in Greenville. Mike Clark may have a few products that overlap, but the majority we don’t.

GSA: If you are looking to gain new customers, do you expand your circle?

Benner: Yes. We’ve gone down along the coast of Georgia, parts of Charleston, Flor-ence and other areas of South Carolina.

GSA: In gearing up for the mainte-nance show in Greenville, I’m sure many of the folks you’ve talked to express to you about the difficulty of getting loans. What are you hearing?

Benner: One particular retailer, who has multiple locations, had a commercial rental property as a security. The bank called in a line of credit and forced him to refinance because they said the market value around that area had changed so drastically.

When they took him through that pro-cess, he had to pay all the closing costs, it took him away form doing his business, and in the process of that he discovered that an unlimited credit line with American Ex-press was brought down to a limit, and that a Master Card and a Visa were declined.

Their reason was because of the credit score due to the refinancing. Then the bank said because your available credit has dropped, affecting your score, we can no longer do the loan or we’ll have to change the terms.

The stories we are hearing is there is pressure to drive existing lines of credit down.

GSA: Tell me about the conference.Benner: This is a conference for man-

ufacturers, but really anyone who runs a facility, from a hospital to big commercial buildings. I’m the AFE chapter president as well as the regional manger for the southeast. Our theme this year is “Sus-tainably Green, Financially Lean: Engi-neering Existing Buildings.”

For example, as of March 1, our state regulatory commission on energy changed the rates. Up until that day the more you used in blocks of power the less you pay in kilowatts. It not only went away, it reversed. Your February sales and expenses could be the same and you go into March and you would see a drastic increase in your bottom line for doing nothing.

BMW Manufacturing Co. has given $250,000 to the George Dean Johnson Jr. College of Business and Economics at the University of South Carolina Upstate. USC Upstate set a goal to raise $14 million in private donations to fund construction of the $30 million business school. So far, the university has raised $13 million. Pictured, from left, are Dr. Darrell Parker, dean of the business school, Bobby Hitt of BMW and USC Upstate Chancellor John Stockwell.

see NEWS BRIEFS, page 25

see PEOPLE, page 24

bMW donates to USC Upstate

Phot

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W H O T O k N O W A N D W H E R E T O G O A R O U N D T H E U P S T A T E

aT workthe money issue

Banking & Finance

Jon Adam, assis-tant vice president and internal audit man-ager for First National Bank of the South, completed the Certi-fied Community Bank Compliance Officer program, sponsored by the Independent Community Bankers of America. Adam has more than eight years of internal au-dit experience, and he has been with First National since July 2007.

belton plant to make parts for florida solar energy facility

A company based in Norway said it will make aluminum components for a Florida hybrid solar/fossil fuel energy plant at Extrusion Americas in Belton. A new Indiantown, Fla. unit of Florida Power & Light will use concentrated solar power technology to produce electricity. This process uses parabolic mirrors to capture solar heat, which produces steam that turns a generating turbine. The Belton facility performs ex-trusion, fabrication and finishing work on aluminum products.

Adam

Aug. 10 - Aug. 30, 200922 www.gsabusiness.com special edition: the money issue

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leader across the board in science when matched with heavyweights such as Cali-fornia, Little said it can and should find niches in which it can excel — and tissue biofabrication offers one such niche.

Such a project could have business spin-off applications in the same fashion as the Apollo moon program, Little said.

“This holds the promise of raising South Carolina to national prominence in the field of human tissue biofabrication.” Jerry Odom, principal investigator for the award and executive director of USC Founda-tions, said at the grant’s announcement.

W. Lance Haworth, director of the of-fice of integrative activities at the Nation-al Science Foundation, highlighted the economic potential of the field, if a break-through can be made. “This research pro-gram has the potential to create a new in-dustry, creating jobs and businesses based on computer-aided, layer-by-layer tissue and biomaterials, with the intention of

making functional tissues and organs for transplants that help cure the sick and to help heal the injured,” he said.

The lead scientist for the project, Rog-er Markwald of the Medical University of South Carolina in Charleston, empha-sized the medical challenges being ad-dressed. Now, efforts to construct tissue or organs for transplantation is limited by an inability to create bloodflow, he said. The goal is to build large organs, such as kidneys, livers or hearts, that include the genetic material of the patient. That can’t happen until a working network of veins can be constructed in tissue.

“We are trying to build tissue and or-gans from the inside out, which is a dif-ferent approach than anyone has taken,” Markwald said. “First, we want to create a three-dimensional vascular tree, and then the organ. This will allow us to de-velop the applications to build many dif-ferent types of organs.”

Unlike a donated organ, such a cre-ated piece of tissue would be a perfect ge-

netic match with the recipient and would not carry the possibility of transmission of a disease from the donor.

The grant will establish an alliance among the state’s three research universi-ties, three historically black colleges and four other educational institutions. The award should facilitate the hiring of 22 new faculty members statewide with needed expertise, the construction of a state tissue biofabrication center and community out-reach to share the skills being perfected.

The other colleges and universities in-volved are:

• University of South Carolina in Columbia.

• University of South Carolina-Beaufort.• Claflin University in Orangeburg.• S.C. State University in Orangeburg.• Voorhees College in Denmark.• Denmark Technical College.Haworth noted the broad collabora-

tion inherent in the proposal. Students from many levels and backgrounds will benefit from the project, he said.

MUSC President Ray Greenberg said key infrastructure and cooperation helped bring this project to South Caro-lina. The level of cooperation among the state’s three research universities helped allow this grant to go forward, because it brings engineering and computing exper-tise from Clemson and USC to MUSC’s work on creation of new tissues.

“The network has been laid, and now the opportunity is to leverage that for competitive advantage,” Greenberg said.

The state’s endowed chairs program, funded with lottery proceeds, also has been vital, Greenberg said. One of the first endowed chairs works in this field, which he said showed the science foundation that the level of talent necessary to do such work was ready in South Carolina.

“The recruits that come in have made us competitive for grants,” Greenberg said.

Some of the researchers working on the grant projects, including Markwald, will work in a new bioengineering facility already planned at MUSC, Greenberg said.

GRANT, continued from page 3

World Acceptance prospers as other credit sources dry upThe weakened economy seems

to be boosting the demand for short-term small loans.

World Acceptance Corp., for ex-ample, reported that net income rose 29% for its first quarter ended on June 30, one of the few finance companies to post an increase in profits.

The Greenville company offers short-term small loans, medium-term larger loans, related credit insurance products, ancillary products and services to indi-viduals who have limited access to other sources of consumer credit.

The company states on its Web site that a substantial portion of its business is repeat business from the renewal of loans to existing customers and the origination of new loans to former customers.

In the last full fiscal year, World Ac-ceptance loaned $1.9 billion in 1.9 mil-lion transactions. At March 31, the com-pany had about 732,000 customers. The company’s loans generally are under $3,000 and have maturities of less than 24

months. World’s average gross loan made in fiscal 2009 was $1,011, and the average contractual maturity was approximately eleven months.

In the most recent quarter, World Acceptance posted net income of $14.6 million, or 90 cents a share, up from the $11.3 million, or 68 cents a share, for the same time period last year.

“World Acceptance’s record first quar-ter benefited from increased loan demand, continued focus on expense control, con-tinued close management of credit risks during the weakened economy, and a non-recurring gain from the extinguishment of debt,” said CEO Sandy McLean. “Loan vol-ume increased 20.1% compared with the first quarter of last year as more traditional financing sources became more difficult to obtain for some borrowers.”

Total revenues increased to $100.2 mil-lion in the first quarter, a 13.4% increase from the $88.4 million reported last year.

Gross loans outstanding increased 14.8% to $726.1 million at June 30, 2009,

up from $632.7 million at June 30, 2008.“We also have managed our credit

risks during this recession by closely monitoring our loan portfolio,” McLean said, “which resulted in net charge-offs decreasing to 13.8% of average net loans on an annualized basis during the quarter

from 14.5% in the first quarter of last year.World Acceptance is a small-loan con-

sumer finance company with 949 offices in 11 states and Mexico. It is also the parent company of ParaData Financial Systems, a provider of computer software solutions for the consumer finance industry.

World Acceptance Corporation’s Greenville headquarters. (Photo/James T. Hammond)

Aug. 10 - Aug. 30, 200924 www.gsabusiness.com special edition: the money issue

accounting

Dixon Hughes PLLC announced Lance Windley and Mike Trammell have assumed co-leadership of the firm’s construction and real estate practice. Trammell, a member in Dixon Hughes’ Spartanburg office, merged Trammell & Co. into Dixon Hughes in June 2006.

advertising & pr

B2B Media added Michael Martin to the company’s sales team. Martin, who served as an accounts intern for B2B over the summer of 2008, graduated from Clemson University in May 2009 with a degree in business management. In his new role as account executive Martin will focus on the development of architectural graphics projects.

architecture

Adam Roberts has achieved the Lead-ership in Energy and Environmental Design accredited designation present-ed by the U.S. Green Council. Roberts is a 2005 graduate of Clemson University with a degree in architecture.

Michael Allen, architecture project manager with Good-wyn, Mills & Cawood Inc., has been chosen for the 2010 class of Leadership South Carolina. Leadership South Carolina pro-vides South Carolin-ians an opportunity to advance their leadership qualities while broadening their understanding of issues facing the state. It is affiliated with Clemson University’s Institute for Economic and Community Development.

Banking & Finance

Gail Hodgden joined BankGreenville

as loan officer assistant. Hodgden has more than 38 years of banking experi-ence, having previously been employed as an assistant in the loan and wealth management areas of American Fed-eral, CCB and SunTrust. Beth Mitch-eltree has been promoted to loan op-erations nanager. Mitcheltree has been employed with BankGreenville since 2006.

Cheryl Hayes and Katrina Mor-ris of Ballentine Capital Management have completion the Series 66 exami-nation from the Financial Industry Regulatory Authority Inc. Ballentine Capital is a wealth management firm in Greenville.

economic development

Greenville Chamber’s vice presi-dent of work force development and education Michele Brinn, and Lock-heed Martin community relations manager Rob Gross, were selected by the U.S. Chamber of Commerce’s In-stitute for a Competitive Workforce to attend the Business Leads Institute. Selected for their leadership in the community, Brinn and Gross will join 36 other business leaders from around the nation to learn how the business community can utilize its assets to drive positive transformation in com-munities across America in education and work force training.

education

Pam Batson, Stacey Lemmond and Sheryl McAlister have been selected to attend the Women’s Campaign School at Yale University, July 14-18. Batson is a vice president, portfolio manager and wealth advisor with Morgan Stanley Smith Barney. Lemmond founded Ask & Receive Inc. in 1999. McAlister, who most recently served as the executive di-rector of The Alliance for Women, retired in 2007 from Bank of America.

engineering

SynTerra Corp. announced Martin Bowen received his professional en-gineers license in South Carolina. Bo-wen has four years of experience while working with SynTerra after graduating with a masters degree in civil engineer-ing from Clemson University.

health care

Southern Eye As-sociates PA added Dr. Jake Bostrom to its practice. He recently completed his oph-thalmology residency at the Dean McGee Eye Institute.

insurance

Ross Turner III, president of The Turner Agency Inc. of Greenville, was recently recognized for professional leadership and advanced knowledge by the Society of Certified Insurance Coun-selors. Turner received an award mark-ing more than 15 years of as a designated CIC, which requires annual completion of advanced education and training.

legal proFession

Roe Cassidy Coates & Price PA an-nounced Fred Suggs III recently began his term as president of the Young Law-yer’s Division of the South Carolina Bar. Suggs, a partner with in the law firm, fo-cuses his practice on medical malpractice defense, commercial litigation and per-sonal injury litigation.

manuFacturing

Richard Morris has been named as-sembly vice president at BMW Manu-facturing Co., succeeding Barbara Berg-meier. Morris began his career with BMW Manufacturing in 1993 following almost

10 years in quality engineering positions with various automotive manufacturers in the United States.

military

James Jonathan Leenman, a native of Greer, was recently named distinguished graduate of the 158th Detachment of the U.S. Air Force ROTC, headquartered in Tampa, Fla. Leenman was commissioned a Second Lieutenant in the Air Force on May 9, and was one of three graduates.

nonproFit

Christina Miller joined as a major gift officer with American Leprosy Missions. She will work with foundations, church-es and major donors to provide the neces-sary information to increase giving.

real estate

Terry Howe & Associates added Josh Capps as closing coordinator and Paula Powers as marketing and public relations coordinator. Capps joined the company in January as an intern. Powers, with 15 years writing, marketing and public relations ex-perience, has been serving the architecture, construction and residential manufactur-ing industries for nearly 10 years.

sales

Ray Barry, president of Total Training Services and vice president of sales at To-tal Product Destruction in Spartanburg, has been invited to speak at the upcom-ing Professional Records & Information Services Management International and National Association of Information De-struction-Europe Joint European Confer-ence. The three-day conference will take place in Rome, Italy starting Sept. 14.

Submit People in the News items by e-mail to news@gsabusiness.com. GSA Business reserves the right to edit for length, clarity and libel. Publication is subject to editorial discretion.

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Bostrom

Miller

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www.gsabusiness.com 25Aug. 10 - Aug. 30, 2009 special edition: the money issue

news Briefs Submit Business News items by e-mail to news@gsabusiness.com. GSA Business reserves the right to edit for length, clarity and libel. Publication is subject to editorial discretion.

southeastern Paper Group acquires Fulton Paper

Southeastern Paper Group, headquar-tered in Spartanburg, acquired certain as-sets of Fulton Paper Co. in Atlanta. Fulton Paper is a distribution and supply chain solutions provider for the janitorial/sanita-tion, food service and industrial packaging markets. The company has locations in At-lanta, Albany, Ga., and Jacksonville, Fla.

Ranger Aerospace re-enters airfield services arena with buyout

Greenville-based Ranger Aerospace LLC, a private equity consolidator that spe-cializes in the aviation industry, has re-en-

tered the airfield services industry with the majority buyout of CAV International Inc. CAV is a government-outsourcing contrac-tor specialized in airfield services and logis-tics. Ranger’s newest investment platform is called Ranger International Services Group Inc., which acquired a majority stake in CAV International in the first quarter of 2009.

AudIT3 LLc acquires IsO registration business

AudIT3 LLC has acquired the regis-tration services division from IT3 Engi-neering Inc. in Raleigh, N.C. As part of the transition, Greenville-based AudIT3 has also successfully gained accredita-tion through the ANSI-ASq National Accreditation Board to offer certification services to the ISO 9001 standard.

Proforma acquires Nebraska-based business

Greenville-based Proforma AdMark So-lutions Group acquired Ballyhoo Bands of Omaha, Neb. Ballyhoo Bands provides sili-cone awareness bracelets. Made popular by The Lance Armstrong Foundation in 2004, awareness bracelets are used primarily to promote knowledge and education of prod-ucts, services or causes around the world. Since January 2008, Proforma has acquired Golflocker.net, a provider of golf products, two promotional products distributorships and one print brokerage firm.

Menin sells parcel to Rooms to GoMenin Development Inc. completed the

sale of a parcel to Rooms To Go Inc. within its Magnolia Park mixed-use project located in Greenville. Rooms To Go will be relocat-ing its current store near Haywood Mall and constructing a brand new 35,000-square-foot superstore, which will be a combination of Rooms To Go and Rooms To Go kids.

carbon Motors passes on south carolina

Carbon Motors Corp. chose Indiana over South Carolina and Georgia as the location for a $350 million auto plant that will employ up to 1,550 people. The At-lanta-based startup company, which has developed a concept car specifically for law enforcement, visited the Clemson Univer-sity International Center for Automotive Research last fall and was considering lo-cations in the Upstate for its car plant.

Denny’s sued for unsafe sodium levels

Nick DeBenedetto, 48, of Tinton Falls, N.J., filed a class action lawsuit against Denny’s Corp. claiming the Spartanburg-based restaurant chain is serving meals with unsafe sodium levels. The lawsuit claims at least 75% of Denny’s meals con-tain more than the maximum amount of

sodium most American adults should con-sume in an entire day. DeBenedetto is be-ing supported by the Center for Science in the Public Interest, a nonprofit consumer advocacy group. Dennys says the lawsuit is devoid of substance or meaning.

Duke requests 12.1% rate increaseDuke Energy Carolinas asked state reg-

ulators to raise its general rate for residen-tial customers in South Carolina by 12.1%, though the rate industrial customers pay through September 2010 would actually be 0.6% lower. The general rate increases would be partially reduced, Duke added, by a refund of money collected from cus-tomers for past energy efficiency and de-mand side management programs. Duke also set a goal of cutting expenses by $100 million by freezing salaries and reducing capital expenditures.

cazbah opens in Greer stationThe Cazbah has opened at 308 Trade

St. in downtown Greer Station. The restaurant has a staff of 35 employees and offers 1,600 square feet of rooftop dining. The menu changes quarterly and includes lobster cigars, beef Wel-lington, sesame-seared tuna, and tuna served with chopsticks.

Competition open for fastest-growing firms

Nominations are being accepted until Aug. 17 for the fastest-growing companies in South Carolina.

The program, in its eighth year, recognizes achievements of top-per-forming private and publicly held companies based in South Carolina. The Capital Corp. is working with the S.C. Chamber of Commerce on the 2009 South Carolina’s Fastest-Grow-ing Companies program.

The top 25 highest-ranking com-panies will be honored at the S.C. Chamber of Commerce’s annual summit Nov. 12 at the Wild Dunes Resort on the Isle of Palms.

To enter, companies must meet several criteria:

• Be headquartered in South Carolina.

• Have been in operation for at least two full fiscal years.

• Have reported revenues of at least $3 million or have $50 million in assets for financial institutions in the most recently completed fiscal year.

Companies that have experienced any growth are encouraged to sub-mit nomination forms, said Cristina Schleifer, marketing and communica-tions director for The Capital Corp.

“We want to tell business owners that if they had any growth at all in this economic environment, that is great and deserves to be recognized,” she said. “We want to highlight those companies that have weathered this economic storm and, despite the challenges, continue to prosper.”

Companies can enter online at www.thecapitalcorp.com or down-load an entry form and submit it by mail or fax: S.C. Fastest-Growing Companies, c/o The Capital Corp., 84 Villa Road, Greenville, SC 29615. Fax: 864-542-1661

Clemson receives human body-modeling software

A gift from California-based Ozen Engineering Inc. is enabling Clemson University researchers to create detailed computer models of the human body that could help make car seats more comfortable or hip replacements last longer. Ozen donated a package of software, training and support to research-ers in Clemson’s mechanical engi-neering department. The AnyBody Modeling System allows researchers to create computer models of the human musculoskeletal system that measures internal body forces dur-ing daily activities, such as walking, running, standing and sitting.

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by Bill Settlemyerbsettlemyer@scbiznews.com

After all the pot shots that have been taken at Goldman Sachs by national columnists recent-ly, it might seem hard to “bat clean up” to their

excoriation of what is arguably the nation’s (or perhaps the world’s) most power financial giant.

But I’m willing to take on the challenge, because the story of Goldman Sachs is symbolic of some decades-long trends that are unraveling the long-held contract between the Ameri-can middle class and what I’ll call, for purposes of this discus-sion, “Big Business.”

My underlying premise is that many of the key players in American Big Business have lost any semblance of moral authority or responsibility in their relationship with ordinary citizens, either as customers, taxpayers or as fellow Americans. In essence, business has become a game whereby deception, political clout, and disregard for fundamental fairness and decency in the realm of commerce have essentially turned ordinary Americans into walking ATM machine for Big Business.

What’s the drill? It’s pretty simple – grab the Ameri-can consumer by the ankles, hold him upside down till all the cash and change falls out of his pockets, put him down and tell him to go make some more and then “come back to see us when you’ve got more to spend.”

The particulars are far more complex. President Obama’s proposal to create a Consumer Financial Pro-tection Agency is an obviously sensible response to the carnage of the last few years that has laid waste to tril-lions of dollars of consumers’ assets invested in homes and 401(k) plans. And as anyone who’s used a credit card knows, the issuers seem bent on confusing consumers and setting up traps and tricks that trigger rapid increas-es in interest rates and card balances, not to mention a host of hefty late fees and related charges.

The idea of a separate agency that exists only to protect “the little guy,” (i.e., most of us) appears to have struck terror in the hearts of Big Business and an abundance of caution among their allies in Con-gress who fear the power of Big Business’s lobbying clout and political contributions more than the vot-ers’ wrath at the ballot box.

In the financial sector, Big Business has created a vast array of confusing and virtually incomprehen-sible financial products, including insurance policies, credit cards, mortgages, and exotic securities that find their way into the investment mix of ordinary Ameri-cans as well as corporate pension funds. We have seen

the consequences, and they are painful and ugly.But let us return, for the moment, to the saga of Gold-

man Sachs. Acknowledgment is due to Nobel prize win-ning economist and writer Paul krugman for explaining the company’s conduct in his recent column titled, “The Joy of Sachs.”

Most of us understand by now that Sachs and other financial giants made billions of dollars by helping to de-velop, package and resell toxic assets, such as subprime mortgages that no local bank or mortgage broker would have issued without being able to pass the risk of foreclo-sure on to some distant sucker in a market mediated by the likes of Sachs.

But as krugman points out, Sachs played both sides. With one hand they were generating huge fees selling toxic assets, while with the other they were placing fi-nancial bets that the assets were bad, so that when the house of cards collapsed, Sachs made a ton of money on those bets, too.

Others columnists have spent time writing about the additional sins of the ultra-rich and their financial pow-erhouses. There’s a revolving door between Congress and the White House and these powerful firms that all but guarantees that federal officials will talk tough but ultimately soften or drop efforts to keep a tighter rein on financial markets.

There’s no question that President Obama has a tiger by the tail in his effort to pass some form of credible health care reform. But when Republican Sen. Jim DeMint was quoted as saying that “If we’re able to stop Obama on this, it will be his Waterloo. It will break him,” that just proved that for Republicans, it’s still not about the public interest, it’s about winning or losing in the political arena.

The President quickly, and too calmly for my money, pointed out that the issue was not about him, but about the American people, millions of whom are being “bro-ken” every day by lack of access to affordable health cov-erage and decent health care.

But aside from differences in political philosophy on this issue, there lurks the formidable political power of Big Business to call the shots and prevent reforms that would threaten their financial hegemony.

Case in point: The big pharmaceutical firms (“Big Pharma”) have managed once again to have provisions included in health care reform legislation that prohibits the importation of cheaper drugs from Canada and pre-vents the federal government from negotiating Medicare drug prices directly with the pharmaceutical companies.

God forbid that the government program providing healthcare to millions of seniors funded by taxpayer dol-lars should be allowed to use its bargaining power against the drug companies. What a travesty that would be!

And in other news, The Wall Street Journal reports that, “The nation’s wealth gap is widening amid an up-roar about lofty pay packages in the financial world. Ex-ecutive and other highly compensated employees now receive more than one third of all pay in the U.S. accord-

ing to a Wall Street Journal analysis of Social Security Administration data—without counting billions of dol-lars more in pay that remains off federal radar screens that measure wages and salaries.”

And yet, at the same time, news articles in the Journal and elsewhere report increasing nervousness among Dem-ocrats about proposals to finance health care for all through higher taxes on “the rich.” Yes, if you’re living in L.A. or New York on “only” $250,000 a year, I’m sure you don’t feel rich and may have trouble making ends meet. Just remember that many of the people you pass on the street are trying to raise families, cover health care, education, clothing, food and rent on less than $50,000 a year.

Bill Settlemyer is the founder of the Charleston Re-gional Business Journal.

V I E W S , P E R S P E C T I V E S A N D R E A D E R S ’ L E T T E R S

viewpoinTthe money issue

Don’t cry for us, Goldman Sachs

Collaborate on health care for small business

There’s no doubting the crippling disparity re-ported by the Council of Economic Advisers be-tween what small businesses pay for health insurance compared to larger employers.

When a small business starts with 18% higher costs for health benefits, it prevents the companies that drive our economy from expanding and from competing on an even playing field for talent and other resources.

Republicans and Democrats would do well to take a deep breath and make sure the right health care re-form plan is in place so we know what we’re buying for future generations of Americans.

The impact of those higher costs is stark: Fewer than 50% of employers with three to nine employ-ees offer health insurance to workers. For companies with 10 to 24 workers, that number jumps to 78% that offer insurance, and that increases to 99% for companies with more than 200 employees.

These numbers make the recent partisan infight-ing launched by U.S. Sen. Jim DeMint all the more disheartening because affordable insurance options directly affect small businesses. DeMint’s declaration in a conference call with GOP supporters that health care reform will be President Obama’s Waterloo and that “It will break him” shows the tainting effect of tribal politics whose motivation is blood sport and whose legacy is gridlock.

We’re coming to the economic development table carrying some heavy baggage in South Carolina. Government numbers show that more than 15% of South Carolina’s population is uninsured and more than 12% of its work force is unemployed.

So let’s stop the partisan bickering and craft the nation a good piece of legislation.

www.gsabusiness.com 27Aug. 10 - Aug. 30, 2009 special edition: the money issue

THE 2009 SERIES

DON’T MISS OUR NEXT EVENT: understanding the recessionOne tool to help survive the worst economic downturn since World War II is to have the best-possible information. Four Upstate men who have witnessed causes and impacts in the current crisis, from different professional backgrounds, will share their observations and expectations for the months ahead.

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Daniel t. Cooper has witnessed prosperity in his 18 years as a member of the S.C. House of Representatives. Now, as chairman of the budget-writing Ways and Means Committee, he’s charged with coping with the worst downturn in state revenues in a lifetime. As state representative from District 10 in Anderson County, Cooper presides over the tough choices being made in state government today. Cooper is vice president of Capstone Insurance Services LLC and lives in Piedmont. He has chaired the budget committee since 2005. He will have attended the Southern Legislative Conference just before his appearance at the Power Breakfast Series.

John M. Jennings, an attorney and partner with Nelson Mullins Riley & Scarborough in Greenville, sees what busi-nesses are doing to survive the worst recession in a generation. He practices in mergers and acquisitions, securities of-ferings and strategic transactions. He represented Coors in its $4 billion merger with Molson. He earned his law degree from Northwestern University School of Law, and an MBA from Northwestern’s Kellogg School of Management.

Claude Lilly has spent a lifetime studying risk. He is dean of the College of Business and Behavioral Science at Clemson University, and a professor of finance. Previously, he was dean of the Belk College of Business at the Uni-versity of North Carolina-Charlotte. His taught risk management and insurance at Florida State University, and was director of the Center for Insurance Research at the University of Southern California. Lilly earned his PhD at Geor-gia State University, where he majored in risk management and insurance. He is chairman of the board of directors of the Charlotte Branch of the Federal Reserve Bank of Richmond.

Darrell F. Parker has a long involvement in economic development in the region. Currently dean of the George Dean Johnson Jr. College of Business and Economics at USC Upstate, he previously held the William Freeman Distinguished Chair of Free Enterprise and served as Director of the School of Economic Development at Georgia Southern University. He also previously was professor of economics at Winthrop University, where he was director of the Winthrop Economic Development Center, which he established. He received a Ph.D. in economics from Purdue University.

Cooper

Jennings

Lilly

Parker

Aug. 10 - Aug. 30, 200928 www.gsabusiness.com special edition: the money issue

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