Business Digest

BUSINESS DIGEST

July 29, 2004

In The Region

Two former officials of U.S. Foodservice plead not guilty

Two former executives pleaded not guilty yesterday to devising a scheme to inflate the earnings of U.S. Foodservice Inc., the Columbia subsidiary of supermarket giant Royal Ahold NV.

Former Chief Financial Officer Michael J. Resnick and former chief marketing officer Mark P. Kaiser entered their pleas in Manhattan federal court a day after prosecutors announced fraud and conspiracy charges against them.

The government contends they worked together to boost the company's earnings by $800 million from 2000 to 2003 by reporting fake rebates from suppliers - and sweetened their own bonuses in the process.

Celera Genomics narrows loss to $5.8 million

Losses for the fourth fiscal quarter at Celera Genomics shrank as the sale of its stake in a California drug development firm helped offset a drop in revenue, the Rockville company said yesterday.

Celera, best known for mapping the human genome, reported a loss of $5.8 million, or 8 cents per share, for the quarter that ended June 30. Celera posted a loss of $19.4 million, or 27 cents per share, in the fourth fiscal quarter last year.

The fourth-quarter results included a $24.8 million gain from Celera's sale of 7.2 million shares in Discovery Partners International of San Diego. It also included a charge of $18.1 million from Celera's expected sale of its headquarters. Without the one-time gain and charge, Celera's fourth-quarter loss was 14 cents per share.

Annapolis Bancorp earns $457,000, or 15 cents per share

Annapolis Bancorp Inc., parent of BankAnnapolis, reported net income of $457,000, or 15 cents per basic and fully diluted share, for the second quarter, which ended June 30. That's up from net income of $402,000, or 13 cents per basic and fully diluted share, for the second quarter last year.

The bank said that strong growth in loans and investments, as well as increases in deposit-based transaction fee income, helped to offset a decline in mortgage-banking fees.

Total assets were $267.3 million as of June 30, the company said.

Md. pulls 751,000 gallons of substandard gasoline

Field enforcement agents pulled about 751,000 gallons of substandard gasoline off the market last fiscal year, the Maryland comptroller's office said yesterday.

That was a fuel failure rate of 0.1 percent, much better than the 0.5 percent failure rate the previous fiscal year, when 4.7 million gallons did not meet the standard, Comptroller William Donald Schaefer said. In the mid-1970s, failure rates were as high as 9.6 percent.

Substandard fuel is generally the wrong octane, usually caused by accidental contamination as it's brought to gas stations.

Elsewhere

Northwest pilots offer to accept lower pay to fly smaller planes

Union pilots at Northwest Airlines said yesterday they are willing to accept lower pay in exchange for flying 70-seat regional jets that the carrier wants to add to its fleet.

The Air Line Pilots Association said its proposal would preserve jobs while helping Northwest stay competitive. Northwest declined to comment on the union proposal yesterday and has not offered a counterproposal.

Northwest has long desired to add the aircraft, figuring the smaller planes are ideal for certain routes, the pilots union said. But Northwest has not added the planes because its current contract would require the airline to pay pilots more than other carriers pay pilots of like-size planes.

Tenet's vice chairman to resign at end of year

Tenet Healthcare Corp. said yesterday that Vice Chairman Barry P. Schochet will resign at the end of the year, after more than 25 years with the company, to "pursue new opportunities in health care investments."

Schochet, 53, joined Tenet's predecessor company, National Medical Enterprises, in 1979, and has been president and chief operating officer of its hospital unit. The troubled hospital operator didn't immediately name a replacement.

The government is investigating Tenet for possible fraud, after the company admitted in late 2002 that it had pumped up profits in recent years by exploiting a technical flaw in the Medicare system, which enabled it to collect outsize payments for its sickest patients.

Schwab to shut 53 offices, lay off 245 more workers

Charles Schwab Corp. plans to close 53 more branches and has laid off another 245 workers, beginning an upheaval that the brokerage telegraphed last week when it abruptly changed chief executives.

The office closures, disclosed yesterday, represent 16 percent of Schwab's 339 branches scattered across the country. The retreat will leave Schwab with fewer than 290 branches, down from about 400 offices three years ago.

The company fired about 65 workers in its technology division earlier this week and jettisoned 180 other employees in preparation for the branch closures, a spokesman said. With the latest cuts, the company has about 16,200 employees.

4 firms fined $18 million for overcharging on bonds

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