C4 Business The Plain Dealer Breaking news: cleveland.com Tuesday, July 30, 2013 Lincoln Electric stock drops on slow 2Q sales report executive says quarterly profit margin rose by 9 percent during lenging year second quarter, comparison we sus 2012 $1.5 a billion decrease in of the 1.7 first percent. half of luster "We do growth not expect prospects. any meaningYet company JOHN FUNK Net income for the April- one-time gains and losses was were able to increase our quarterly Net income for the six months ful organic sales improvement in Plain Dealer Reporter through-June quarter was' $72.6 $75.7 million, or 91 cents per profit margin by 9 percent," John was $139.4 million, or $1.67 per the "due back of the year," he said, half million, or 87 cents per share up share for the second quarter, com- Stropki, executive chairman, told share, compared with $130.6 mil- to customer uncertainty and EUCLID Sales at Lincoln 9.5 percent from the $66.3 million, pared with adjusted net income of analysts in a morning teleconfer- lion, or $1.54 per share, in the first market trends and global indusElectric slipped during the second or 79 cents per share, earned in the $68.1 million, or 81 cents per ence that will be archived on the half of 2012. trial production rates. "We do exquarter but profits jumped and second quarter of 2012.
share, during the same three company's website. Adjusted net income for the first pect to see continued improvement investors who expected higher Investors and analysts had been months of 2012. "It is clear that the results dem- six months of this year was $152.9 in year-over-year margin and earnsales and profits immediately pun- expecting sales to approach $760 Adjustments included gains and onstrate our ability to drive mea- million, or $1.83 per share, com- ings performance as we anticipate ished the company's stock. million and net profits to increase. expenses from Lincoln's acquisi- surable improvements even in pared with adjusted net income of that the benefits of favorable mix, The global manufacturer of to about 89 cents per share.
tion of other companies and the ef- weaker market conditions and $132.4 million, or $1.57 per share, our internal initiatives and cost welding equipment and supplies Lincoln's stock price on the fect of the Venezuelan currency de- even as we are incurring additional in 2012 control measures will offset top said Monday that second quarter NASDAQ fell by $3.18, or more valuation. overhead expenses to integrate our Christopher L. Mapes, president line headwinds," he said. sales were $727.4 million, about than 5.2 percent, to $57.76. "We are pleased to report that new acquisitions," Stropki said.
and CEO, said the company's prof2.2 percent less than the $744 mil- 4 The company, said its adjusted despite the combination of uneven For the first six months of the itability should continue to graw To reach this Plain Dealer reporter: lion in the second quarter of 2012. net income taking into account end market conditions and chal- year, sales totaled $1.4 billion ver- despite the global economy's lack- 216-999-4138 DRIVE-IN FROM C1 Outdoor venues popular again Despite the resurgent popularity, drive-in theaters face a 21st-century problem that's been unreeling for some time: the end of film. Appearing this summer, at drive-ins across America, are the final days of 35mm. To stay in business, theaters will need to convert to digital technology an expensive prospect for these seasonal operators. "I have a quote of $139,817 to go digital," Kopp says.
"We need two projectors for our two screens. It's expensive." He walks into one of the theater's two projection booths. Here, a huge reel holding a 35mm celluloid ribbon on its side sits alongside a projector that looks like a prop from "War of the Worlds." This won't be the scene when the Family Drive-In goes hightech Aug. 5. Technicians from Christie Digital will come and replace the open metal parts and whirring shutters with two sleek and noiseless "black box" projection units.
This pricey upgrade may prove to be the final reel for other drive-ins. Kipp Sherer, who covers the industry at says as many as 20 percent of America's outdoor screens could go dark 1 next year because Hollywood studios will no longer make celluloid prints for their archaic monster 35mm projectors to run. "For a lot of the small momand-pop drive-ins, it's just too expensive to convert," Sherer says, adding that many owners nationwide are embarking on grassroots funding campaigns to make the switch. "The studios recently came out with some financing options so that they can continue. Originally, they were only helping indoor theaters to convert.
It's a lot less for an indoor theater, which is one reason they weren't doing it for the drive-ins." Projection units for outdoor theaters need to produce four times more light, so the equipment costs more. The studios thought that driveins would die, Kopp says. "They never thought they would go digital. How are you going to get 5.1 digital surround-sound in an outdoor environment?" In February, the studios agreed to a virtual print fee a sort of subsidy on ticket sales to help drive-ins convert. Kopp put his hand out to Hollywood along with other operators across the country, but he's not altogether happy about the terms.
"They gave us a short time to do it in. It was like, 'Hey, you gave the multiplexes five years to do this, and you are only giving us three or four months. That's not Learning new ways PHOTOGRAPHS BY LANCE ROSENFIELD I PRIMEviaTHEWASHINGTON POST Relaxing before the movie begins at the Family Drive-In Theatre are the Day, Hinchman, Glennon and Lukons families, from Warrenton, Va. Patrons are encouraged to give a donation to the theater if they bring food, because its business relies heavily on concession sales. Drive-ins may need the upgrade to compete.
Jimmy Pence, who helps park cars, mentions a new 12-screen theater, run by the Carmike Cinemas chain, over at the Apple Blossom Mall in Winchester. "I think people will feel more at ease here, though," he says. "I think we'll beOK." John Heidel, another true beliver in the drive-in, has already steered into the digital era. While others are putting up multiplexes, he built the Goochland, a park with a 40-by-80-foot screen in Hadensville, halfway between Richmond and Charlottesville. It's one of the most recent drive-in "new builds" in America, established in 2009.
"It's the curiosity that grabs them," he says, "and then they are surprised at the good time they have, so they keep coming back." The Goochland and the Family Drive-In are two of nine outdoor screens in Virginia. Of those, several are icons built during the classic 1950s era, including Hull's in Lexington, the nation's only community -owned nonprofit drive-in, and the Moonlite in Abingdon, which was built in 1949 and sits on the National Register of Historic Places. (In neighboring Maryland, the only drive-in is the vaunted Bengies in Middle River, made famous by Baltimore director John Waters in the film "Cecil B. Most of the regional drive-ins have gone high-tech or intend to. Hull's, the Family Drive-In's nearest competition, 120 miles away, has crossed the digital divide, as has the Starlite in Christiansburg and Bengies.
"The thing I didn't foresee are "I'm old-school. I like film," the people who will drive an projectionist Harold Jett says, to come," Heidel says. But standing outside the Family at his 350-car lot, which is Drive-In ticket booth, waiting for ing record summer turnout, it to get just a little darker. "But profit margin is low and we have to do it, no question. dent on weather and other The film companies ain't gonna tors.
"We've often gotten by make prints no more." wing and a prayer." DIVIDENDS company dividends announced Monday. INCREASED DIVIDENDS Company Rate Chg. MainSource .08 33.3% Res Connection .07 16.7% REGULAR DIVIDEND Company Rate ALLETE Inc .48 Am Realty Cap Prop .08 Celadon .02 CNA Financial .20 Convergys Corp .06 Corp Exec Board .23 DianaContainerships .15 EV Energy Partner .77 I studios take the majority of theater ticket sales. "And that's for indoor theaters, too. We could pay up to 70 percent of our box office, and then we've got film rental costs, so we're getting $2.40 out of $8.
To keep the theater alive, I've got to sell a lot of popcorn, soda, hot dogs and things like that." Since he began leasing the park four years ago, Kopp has hired more staff, instituted a food express lane, beefed up his social media (the Family Facebook page boasts 13,000 and made sure that credit cards were honored at the ticket booth and concession stand. "There was a time when the theater was cash only," he says. Pizza is popular, so Kopp struck a deal with Italian Touch Pizzeria, a local joint, to provide the pies. A cheese slice goes for $2.50 or a whole pie for $13.50. Heeding requests for healthful fare, the theater offers GO Picnic meals with black bean dip, hummus and peanut butter.
Admittedly, they aren't flying off the shelves. Kopp yells out to Sarah Finchan, who has been dispensing refreshments at the Family Drive-In for nine years. "What's our No. 1 seller, Sarah?" 1 "Fries," she yells back. Running a drive-in can be tough.
Kopp had to borrow $1,700 from a friend to start the season. "I don't make a salary," he says. "What money comes in goes straight to the drive-in." He says his staff payroll is about $72,000 annually. "By the time you add the Virginia sales taxes, 9 percent meals tax that is going to go up to 9.3 percent, it's a lot," he says. "People ask me how much did you gross last year, and I say $459,000.
But when you start adding up all the expenses I don't think the theater industry has a lot of profit in it." Closed in winter, the Family Drive-In runs weekends in the spring and fall months and is open seven nights a week from June to August. "They say that the most successful businesses have to be run with passion," he says, before breaking up in laughter. "But there are times when I think I need to have my head examined!" Grinning, he explains that he worked for 23 years at the Library of Congress, at one time doing three managers' jobs. "I was busting my butt. But I'm busting my butt more now," he says.
"I go to bed thinking about it. I wake up thinking about it, and I'm constantly doing something for it." Kopp introduces Nancy Pence, who is in the ticket booth, the crew's longest-standing employee, and Jimmy Pence's mom. She came to the drive-in in 1989 with her projectionist husband, Jay (who died in March). "I've been here as long as the second screen," she says. A man in a baseball cap pulls up in a pickup truck with a cab full of kids.
"How much for a 2-ycar old?" he asks. "Nothing," Pence replies. "If I want, I can get the movie online," the man says as he pays for his brood. "I came for the experience. I've never been to a drive-in before." The Self-professed' "drive-in nut" James Kopp is manager of the Family Drive-In Theatre.
Kopp, who fondly remembers his teenage years hanging out at the long-gone Super 29 (now a Costco) in Fairfax, is a selfprofessed "drive-in nut." He leases the 57-year-old movie park, the only two-screener in the region, from the son of its founder. A lifelong enthusiast, he was resurrecting a Henderson, N.C., theater when he got the offer to take over the Family DriveIn four years ago. "The Family was always my dream drive-in to run," he says, "and Tim Dalke, the owner, knew it." The Family, like many surviving drive-ins, now screens firstrun films, often the latest blockbusters. "Nowadays, if you don't capture all audience in the first four weeks of the film's release," Kopp says, "you've lost them." The theater used to show second-run movies because they were cheaper to rent, but now "second-run" means Netflix to CARDS FROM C1 Consumer Reports tests prepaid cards None of the cards from Cleveland-area banks made the best or worst lists. The ones rated at the top are safe to use and carry FDIC insurance.
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A fourwheel procession funnels past the ticket booth with patrons waiting to pay $8 each ($4 per child). Kopp says that teenagers rarely try to sneak in by hiding in the trunk to avoid paying admission to today's drive-ins. "Not like I did anyway. It's more family-oriented now," he says. "There's not so much of the teenage 'passion Screen one, which fits 240.
cars, offers a repeat of the double feature of "Fast and Furious 6" and "The Hangover 3." The second, smaller screen can hold 144 cars for the animated "Epic" and Owen Wilson's comedy "The Internship." Attracting an audience Knowing what will attract a drive-in audience is an art. It (Suze Orman) with direct deposit. Approved Prepaid MasterCard (Suze Orman) without direct deposit. The ones rated worst all have high fees that can't be avoided, such as activation fees and monthly maintenance fees. In addition, many of those fees are hidden and not easy to understand, the Consumer Reports study said.
The worst ones are: AccountNow Gold Visa Prepaid Card (MetaBank) ($9.95 monthly fee). Reach Visa Prepaid Card (Tom Joyner). (rated "poor: value because of $9.95 activation fee and isn't always what sells at the multiplex. Kopp, who sits on the board of the United Drive-in Theatre Owners Association, could tell that "Iron Man 3" and the latest "Star Trek" sequel would be big, but "Harry "Not so much," he says. "Those films are good the first weekend, and then they fall off." He works with a booking agent to get the best titles at the best rate, and he's open to ideas from customers.
"Last year, I had a bunch of them that wanted me to show an artsy movie, 'Moonrise he says, "and it did very well." The film is the loss leader, though. Ask any theater manager it's all about the popcorn. Kopp steps into the concession booth and introduces the "cast members" that work food service, including his daughter Melissa, who is on funnel cake detail. "This is where your profits are," he says, explaining that the hour even enjoythe depenfac- on a $8.95 monthly fee). Redpack Mi Promesa Prepaid MasterCard ($19.95 activation fee plus $4 monthly fce).
American Express for Target (rated "poor" for safety, unclear fees and no in-network ATMs). Chase's Liquid card ranked as eighth best, with no activation fee, a $4.95 monthly fee and no reloading fee. Fifth Third's Access 360 reloadable card ranked as 14th best, with no activation fee, a monthly fee of $4 to $7 and no reloading fee. PNC's SmartAccess Visa card ranked as 15th best, with no activation fee, a $5 monthly fee and reloading fees of $0 to $3.95. U.S.
Bank's Convenient Cash Card ranked near the bottom, at No. 22, with a $3 activation fee, $3 monthly fee, reloading fee of $0 to $3.95, and $2 charges for live customer service after the first two calls. It also has the most expensive card replacement fee of $15. Consumer Reports notes that prepaid cards represent the fastest-growing payment method as more people use them to pay bills, make purchases or withdraw cash from ATMs. Usage next year is expected to represent a jump of 42 percent from 2010.
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