Business Digest

BUSINESS DIGEST

January 30, 2004

In the Region

Mich. problems noted as Bon Secours gets negative debt rating

Lagging profits and questionable accounting practices at Bon Secours Health Systems' Michigan operations prompted Standard & Poor's to place a negative outlook yesterday on $857 million of debt issued for the Marriottsville-based health care provider.

S&P affirmed its rating on the debt, which was raised from BBB+ to A-minus in November 2002 based on improved profitability. But the bond rating agency said that could change in the next few years because Bon Secours faces "continuing financial pressure" at several key facilities and may be forced to restate earnings as a result of an investigation into accounting practices at its operations in Grosse Pointe, Mich.

Bon Secours told bond-rating agencies in November that it was investigating "misstatements" by its Michigan system that may have overstated receivables and improperly booked revenue and expenses. The problems were uncovered during an annual audit by the health care provider's outside accountants.

In maintaining the A-minus rating, Standard & Poor's analyst Kenneth Rogers said the health system has a broad geographic diversity, positive financial operating history and adequate debt service coverage.

Micros Systems revenue rose 21% in 2nd quarter

Micros Systems Inc. said yesterday that its second-quarter revenue in fiscal 2004 increased almost 21 percent, to $117.3 million from $97.1 million a year ago.

The Columbia company, which supplies information systems to the hospitality and retail industries, said its net income increased $3.6 million, or 73.8 percent, to $8.6 million for the quarter that ended Dec. 31.

Micros said it expects revenue of $110 million to $118 million, and net income of $6.7 million to $7.5 million for the third quarter, which ends March 31.

Retired Ford executive named Medifast executive

Medifast Inc. said yesterday that it had named Leo V. Williams III executive vice president, making him responsible for day-to-day operations.

In addition, Williams, 55, will serve as chief executive officer of two Medifast subsidiaries: Take Shape For Life and Consumer Choice Systems.

Williams had 25 years' service with Ford Motor Co., retiring as marketing manager for the Ford Division responsible for the sale of pickup trucks and sport utility vehicles, and had more than 25 years' service as an officer in the U.S. Marine Corps Reserves.

Elsewhere

Microsoft promises reward for author of fast-spreading virus

Microsoft Corp. promised yesterday to pay a $250,000 reward to anyone who helps authorities capture and prosecute the author of a fast-spreading computer virus. It said residents of any country are eligible for the $250,000 reward.

The reward is the third offered under a $5 million program Microsoft began in November to help U.S. authorities nab the authors of unusually damaging Internet infections aimed at consumers of the company's software products.

The "MyDoom.B" virus would cause victims to launch an electronic attack next month against Microsoft's own Web site. The company urged anyone with information about the author of the "MyDoom.B" virus to contact the FBI, Secret Service or Interpol.

Bush seeks $60 million for mad cow programs

President Bush will ask Congress for $60 million to finance a national cattle identification system and other programs related to mad cow disease in his budget proposal, Agriculture Sec. Ann Veneman said yesterday.

The request for the 2005 fiscal year will be $47 million more than the current year's funding, she said at the National Cattlemen's Beef Association convention in Phoenix.

More than half the money, $33 million, would be used to develop the identification system for the nation's 96 million cattle - a program congressional Democrats were pushing this week.

The remainder would be spent to collect 40,000 samples for mad cow tests at farms and rendering plants; for food and grain inspections; and to develop more tests for mad cow disease, or bovine spongiform encephalopathy.

Freddie Mac told to raise reserve capital cushion 30%

Federal regulators ordered Freddie Mac yesterday to increase by 30 percent its cushion of reserve capital against risk until its accounting problems are resolved and its financial statements up to date.

The move by the Office of Federal Housing Enterprise Oversight came several weeks after the agency fined the government-sponsored mortgage giant a record $125 million for alleged management misconduct and violation of its public trust in its $5 billion misstatement of earnings.

The accounting crisis at Freddie Mac has brought the ouster of four top executives since early June, and the company is under investigation by the Justice Department and the Securities and Exchange Commission.

Fidelity plans to reopen Value Strategies Fund

Fidelity Investments said yesterday that it is reopening its $2 billion Value Strategies Fund for the first time since 1986 to new investors who buy it directly.

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