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Companies to watch in 2008(Record, The (Hackensack, NJ) (KRT) Via Thomson Dialog NewsEdge) Dec. 30--Scores of businesses made big news in 2007, growing through mergers and acquisitions, shrinking to become more efficient, struggling to survive. Up-and-coming local companies also began to flex their muscles, gaining market share through good timing, new products and innovation. Looking to the year ahead, The Record's business staff offers just a sampling of companies to watch in 2008. COMPANIES ON THE RISE: --Akadema Hawthorne Baseball glove/bat maker Akadema, a manufacturer of gloves and bats, looks to continue building its brand in the sports world in 2008. The company already has hundreds of professional softball and baseball players using its leather mitts, which include the Reptilian fielding glove and Praying Mantis catcher's mitt. With a new headquarters in Hawthorne and growing presence on the Web, brothers Lawrence and Joe Gilligan are confident they have the space needed to increase market share. --AnythingIT Fort Lee Recycles/remarkets high-tech equipment AnythingIT, one of the pioneers in high-tech recycling and remarketing, plans to open a 20,000-square-foot headquarters and technology center in Fair Lawn in early February. The company just received industry certification for its recycling processes, giving it a leg up as it expands its contract work with the state of New Jersey. Company founders David Bernstein and Vlad Stelmak also plan to add more consumer recycling locations, particularly in Bergen County, and hire more salespeople. In the new year, they're expecting revenue to nearly double to as much as $10 million. --DMR Architects Hasbrouck Heights Architecture/development company DMR Architects stands poised to emerge as North Jersey's leader in green building in 2008. Thus far, two of North Jersey's three buildings certified with the U.S. Green Building Council -- the Carlstadt Public School and St. Joseph's School for the Blind in Jersey City -- have been designed by DMR. In late 2007, DMR President Lloyd Rosenberg created a new firm, Green Economics, to help guide companies through the process of constructing green buildings. --Eisai Co. Woodcliff Lake Pharmaceutical company This Tokyo-based company makes the Alzheimer's drug Aricept and is pushing into the oncology drug market with the acquisition of three oncology drug makers in 2007. The company built a North American headquarters last February for 400 employees. The facility can hold up to 700, and Eisai is planning to expand. The company also is building an oncology facility in North Carolina. --Great Atlantic & Pacific Tea Co. Montvale Supermarket chain The company known as A&P celebrates its 149th anniversary in 2008, so it may seem a stretch to call it "emerging." But after buying Pathmark, one of its major regional competitors, and shedding stores in the Midwest and the New Orleans area last year, the Montvale-based supermarket chain is attempting to redefine itself as a 450-store regional business in 2008. The purchase of Pathmark -- known for its large stores and strong presence in urban areas -- gives A&P its fifth major brand, joining Food Emporium, Food Basics, Waldbaum's and A&P. The question is how well A&P is able to integrate Pathmark into its existing network. --Medco Health Solutions Inc. Franklin Lakes Prescription drug benefits manager Publicly traded Medco Health Solutions Inc. is the nation's largest manager of prescription benefits and operates drug plans for employers, unions and governments. In 2007, the company filled a record number of prescriptions with high-margin generic drugs. Third-quarter earnings climbed 16 percent as sales of the high-margin generics increased. The company projects five years of growth as name-brand drugs lose patent protection and new generic drugs are introduced. Medco is expected to begin construction on a $140 million, 318,000-square-foot automated pharmacy in Indiana next year. In late November, the company announced a 2-for-1 stock split that reflected a fivefold increase in share value since the company went public in 2003. --Medical Nutrition USA Inc. Englewood Specialty food products for hospital patients Medical Nutrition USA Inc., which provides food products for hospital patients, plans to expand its sales force by 45 percent in 2008. The company has been boosting sales and marketing expenses as its sales force grows. In 2007, Medical Nutrition was chosen by food and facilities service provider Sodexho Operations LLC in Gaithersburg, Md., to sell its liquid supplements to Sodexho's national hospital and nursing-home customers. Its liquid protein supplement was selected by the Department of Veterans Affairs. --Russ Berrie and Co. Oakland Gift and juvenile products manufacturer Can high-powered private-equity firms and management consultants take a 44-year-old teddy bear manufacturer to new heights? Prentice Capital Management and D.E. Shaw Laminar Portfolios are betting they will get results at Russ Berrie. The two investment companies each acquired a 21 percent stake of the company in August 2006 when they purchased the 8.8 million shares held by the widow of founder Russ Berrie and the Russ Berrie Foundation. Prentice's Michael Zimmerman sits on the board of directors and has taken a lead role in guiding the company, most recently orchestrating the appointment of Bruce Crain as the new chief executive officer. --Russo Development Hackensack Commercial real estate The family-owned Russo Development company grabbed headlines in 2007 through its ability to take on risky brownfield redevelopment projects and turn them into highly desirable commercial real estate. The company has more than 2 million square feet of development under way in North Jersey. Projects include the Brookline Corporate Center, 316,000 square feet of flex and industrial space in Mahwah; Meadowlands Park, a 450,000-square-foot warehouse development in Carlstadt; and 50 Madison, a 126,000-square-foot flex building in Totowa. --Secure Symbology Inc. Wayne Anti-counterfeiting technology For the last four years, Secure Symbology has developed proprietary bar-code-based hardware and software for tracking pharmaceuticals and other merchandise from the production line to the checkout counter, a system it claims would greatly reduce counterfeiting. Now it's time to take the next step. The company's machines -- at a cost of $250,000 each -- imprint individual two-dimensional bar-code numbers on each package and shipping carton. That allows the manufacturer to follow the product on its journey along the distribution and sales trail. In an interview with The Record, Graham Sampson, the company's founder and chief executive officer, said that "2008 will be a big year for us." --United Retail Inc. Rochelle Park Plus-size women's clothing The operator of 486 Avenue plus-size women's clothing stores was acquired in November by the U.S. subsidiary of French catalog powerhouse Redcats Group. United Retail says Redcats USA will help it expand its catalog and Internet offerings, while Redcats says United Retail's store experience could help it add bricks-and-mortar stores for some of its catalog-only brands. Redcats USA's catalog and Internet brands include Brylane Home, Chadwick's and Jessica London. --Wide World of Bagels Wyckoff, Ridgewood Specialty bagels Partners Scott Handler and Elliot Cohen hope to get their bagels into the bellies of many more customers in 2008. They're working with a bakery equipment maker to automate their multicolored, multi-shaped bagels and looking at ways to ship them -- either frozen or fresh-baked -- around the world. Closer to home, they plan to add stores in Carlstadt and Paramus, with 25 percent revenue growth that they project will take them above $5 million. They're getting started right away: Their Wyckoff and Ridgewood stores will be open on New Year's Day. COMPANIES IN THE NEWS: --Cognizant Technology Solutions Corp. Teaneck Information technology outsourcing This company has consistently posted earnings and revenue growth year after year as it capitalizes on corporate need to cut IT expenses. Cognizant employs 40,000 people, with a majority working from company facilities in India, where low-cost labor has allowed Cognizant to remain profitable. The biggest challenge for Cognizant is keeping up its startling growth rates. The company continues to post profits -- its revenues are well north of $1 billion annually. Cognizant has been successful in part because it hasn't ignored the so-called front end of the business -- that is, employing top managers and employees who work in the U.S. at client locations, often managing projects using overseas workers. --Datascope Corp. Montvale Medical device maker The medical device maker has had a curious year marked by investigations and a move by a New York hedge fund to get new directors on its board. The hedge fund, Ramius Capital Group, was successful in December in getting at least one new director on the board. Apparently responding to investor unrest, the company made some additional changes, including getting rid of a poison pill that would have made it harder to ward off a hostile takeover, as well as separating the CEO and chairman positions that had been held by founder Lawrence Saper. Investors will be watching Datascope as the new director takes his seat on the board. --Toys "R" Us Inc. Wayne Toy retailer Toys "R" Us began 2007 with the good news that it had just experienced its best holiday sales in a decade. The company, which was taken private in 2005, looked as if it had successfully changed course and was moving full-speed-ahead to better days. Then, beginning in July, Toys, along with the rest of the toy industry, was hit by a series of toy recalls that slammed sales. Wal-Mart also turned up the competitive heat by discounting top-selling toys earlier than ever during the holiday season. CEO Jerry Storch said he expects strong holiday results; however, consumer surveys reported that parents were steering clear of toys this year. The verdict on the season is expected to arrive during the second week of January, the time Toys traditionally reports its holiday results. --Valley National Bancorp Wayne Commercial bank Valley National Bancorp, with about $12 billion in assets and more than 170 branches, will be the largest commercial bank based in New Jersey if Commerce Bancorp is acquired by Toronto-based TD Bank Financial Group as expected in early 2008. Valley, parent of Valley National Bank, is viewed on Wall Street as a possible takeover target because of the number of branches it has in high-income, densely populated areas. Its stock price was beaten down about 25 percent in 2007 amid tough competition and a generally bearish outlook for banks. That could make Valley more vulnerable to acquirers. Valley has avoided the subprime market, but analysts are concerned that the days of very low loan default rates at Valley, and industrywide, may be over with an economy expected to expand more slowly in 2008. --Verizon Communications Inc. Basking Ridge Telecommunications In many ways, Verizon has bet its business on the success of FiOS, its new fiber-optic network that's capable of delivering high-speed Internet, phone and TV service. The company is investing billions in this new technology, which eventually will replace the copper phone network. Although Verizon says that won't happen for many years, it will be interesting to see where its marketing and support dollars go. Its flagship broadband product -- DSL -- will take a back seat to FiOS at some point in the future. Verizon is a relative newcomer when its comes to providing TV service, so FiOS customer complaints will be one area to keep an eye on. COMPANIES AT THE CROSSROADS: --Hovnanian Enterprises Inc. Red Bank Home builder Hovnanian, the state's largest home builder, is expecting another challenging year in 2008, according to CEO Ara K. Hovnanian. With demand for new homes slumping in 2006 and 2007, Hovnanian has cut its workforce by 43 percent since June 2006, discounted prices and walked away from options to buy land. It recently reported a quarterly loss of $469 million, and its stock recently traded below $7 a share, down from about $32 at the beginning of 2007. Most analysts say 2008 will continue to be a tough year for home builders. Lending standards have tightened drastically from the free-for-all days of 2004 and 2005. No-down-payment and no-income-verification loans have nearly vanished. That means fewer would-be buyers can get mortgage money to purchase homes. --Linens 'n Things Clifton Housewares retailer When private-equity firms were awash with dollars and chasing retail investments, the Linens 'n Things acquisition by Apollo Management LLP was one of the last big retail leveraged buyouts. Now, analysts are predicting it could be one of the first retail deals to go sour. Apollo faced a tough turnaround play at Linens. Sales had been flagging in the face of stiff competition from chief rival Bed Bath & Beyond and expanded home departments at Wal-Mart and other discounters. But the challenge facing Apollo got tougher as the subprime mortgage crisis slowed home sales. Home furnishing sales are closely linked to the strength of the housing market. CEO Robert DiNicola took the reins in February and called for a nine-year turnaround plan, and in November asked investors for patience. The fourth-quarter results, due out in March, could trigger some tough decisions. --Marcal Paper Mills Inc. Elmwood Park Recycler and maker of paper products The fate of one of North Jersey's largest manufacturers likely will be decided in the first few weeks of 2008. An auction will be held Jan. 15 to find the highest bidder willing to buy the 75-year-old company, run by the fourth generation of the Marcalus family. The company, which filed for Chapter 11 bankruptcy on Nov. 30, 2006, appeared set to rebound in June when New York-based investor Apollo Capital Management LP agreed to invest $60 million in Marcal in return for a 49.5 percent stake in the company. But Apollo opted not to go through with the plan in October, after Marcal failed to meet sales targets. The company is now looking for a buyer. Such a move could mean the departure of the Marcalus family from ownership. The company has 900 employees, most of them in Bergen County, and a facility in Chicago. --The Children's Place Retail Stores Inc. Secaucus Children's clothing The last year was a turbulent one for The Children's Place: an ongoing internal investigation into stock options; the ouster of the chief executive; charges by that executive that he was the victim of a board "power play" and word that the board is exploring options that could include the sale of the company. Former CEO Ezra Dabah announced in mid-October that he and his wife -- the couple has a 17.9 percent stake in the company -- are contacting private investors for a possible buyout. The Children's Place board announced a week later that it, too, was exploring strategic options. Staff Writers Douglass Crouse, Kevin DeMarrais, Carol Fletcher, Kathleen Lynn, Martha McKay, Hugh Morley, Richard Newman, James Quirk and Joan Verdon contributed to this article. To see more of The Record, or to subscribe to the newspaper, go to http://www.NorthJersey.com. Copyright (c) 2007, The Record, Hackensack, N.J. Distributed by McClatchy-Tribune Information Services. For reprints, email [email protected], call 800-374-7985 or 847-635-6550, send a fax to 847-635-6968, or write to The Permissions Group Inc., 1247 Milwaukee Ave., Suite 303, Glenview, IL 60025, USA. |