News

3M Stock Hits All-Time High; Co. Posts Record Sales

Investors reacted positively to 3M's fourth-quarter and full-year 2012 financial results, sending its stock to a record $99.76 on Thursday.

Maplewood-based 3M Company’s stock reached an all-time high of $99.70 on Wednesday as investors awaited financial results—and then it broke that record Thursday after the company reported increased profits and record sales for both the fourth quarter of 2012 and the full year.

3M shares climbed to $99.76 following news of the results, which included a 3.9 percent increase in fourth-quarter net income to $991 million, or $1.41 per share.

The results mirrored expectations of analysts surveyed by Bloomberg. Revenue for the quarter rose 4.2 percent to reach $7.4 billion, setting a fourth-quarter record.

Strong sales for the quarter were driven mainly by 3M’s consumer and office business unit, which makes Post-it notes and Scotch tape and posted a 28.8 percent increase in profits. Its health care unit also contributed, with a 10.8 percent increase in quarterly profits. The company said it also saw strong fourth-quarter sales in Latin America, Canada, and the Asia Pacific region.

Meanwhile, profits for the full year totaled $6.5 billion, or $6.32 per share, up 4.9 percent from 2011. Sales for the year reached a record high of $29.9 billion, up 1 percent year-over-year.

“[The fourth quarter] was a good finish to a successful year for 3M,” CEO Inge Thulin said in a statement. “Our people executed well in the face of challenging macroeconomic conditions and we have built good momentum to innovate and move forward in 2013.”

3M in October consolidated six major business segments down to five. The company also announced at the time that it had shifted around some of its senior executives.

The changes came about seven months after Thulin took the helm as CEO, who described the restructuring as “a natural outcome of our strategy to increase relevance to our customers and to broaden our presence in the markets we serve.”

3M is Minnesota’s fifth-largest public company based on revenue. Shares of the company’s stock were trading at $99.59 mid-morning on Thursday, up 0.1 percent.

—Nataleeya Boss
([email protected])

Apogee to Invest $30M in MN or GA Plant

The company is comparing the cost and benefits of each location and pursuing state and local support for both locations.

Bloomington-based Apogee Enterprises, Inc., the parent company of glass manufacturer Viracon, announced Tuesday that it plans to invest $30 million in one of two Viracon plants—and its Owatonna plant is in the running.

The company is also considering Viracon’s plant in Statesboro, Georgia. The two plants are Viracon’s largest, Apogee said.

“Apogee is pursuing state and local support for both locations,” and is comparing the cost and benefits of each location, the company said.

The investment will result in an 18-month project that will “improve efficiencies and allow Viracon to offer the new products required to strengthen its competitive position,” Apogee said.

Apogee did not say when it will make a decision or whether the investment will create new jobs; calls to the company were not immediately returned.

Viracon employs about 2,000 people in the United States, and more than 1,000 work at the plant in Owatonna.

Viracon’s glass has been used in such buildings as the recently-rebuilt World Trade Center and the Petronas Towers in Kuala Lumpur, Malaysia, which is among the tallest buildings in the world. Local structures adorning Viracon-made glass include the Xcel Energy Center in St. Paul and the University of Minnesota’s TCF Bank Stadium in Minneapolis.

Apogee is among Minnesota’s 40-largest companies based on revenue. The company’s stock price more than doubled between November 2011 and November 2012, thanks to a steady increase in revenue, which totaled $662.5 million for the fiscal year that ended in March—up about 13 percent from $582.8 million during the previous year.

—Nataleeya Boss
([email protected])

St. Paul Coffee Shop: Pay $1K and Get Free Beer, Wine for Life


Groundswell-280

Groundswell Coffee owners Seth McCoy (left) and Tim Gilbert

Groundswell Coffee is looking to expand and offering a glass of free beer or wine each day for life to those who help pay for it.

Groundswell Coffee in St. Paul is turning to its customers to raise money for an expansion—and offering a unique incentive in return.

Owners Seth McCoy and Tim Gilbert are asking customers to buy $1,000 shares that will help nearly double the size of the 1,300-square-foot coffee shop. But instead of owning part of the business, investors will be entitled to a free glass of beer or wine each day for the rest of their lives, or until Groundswell is no longer in business, whichever comes first.

Groundswell is located at the corner of Thomas and Hamline avenues in St. Paul’s Midway neighborhood. The expansion is expected to cost between $125,000 and $150,000, and the owners hope to sell about 75 shares starting this week.

McCoy told Twin Cities Business on Wednesday that the plan is to expand into the adjacent vacant space that used to be a yarn shop; this will increase Groundswell’s seating capacity from 15 to about 55. The owners also want to expand their food and baked goods offerings and plan to start selling wine and local craft beer, including those made by Surly Brewing Company, Harriet Brewing, and Indeed Brewing Company. Additionally, the expanded location will contain space dedicated to selling arts and craft items from local artists.

McCoy said the coffee shop currently has a staff of four but plans to hire at least six more people after the expansion.

Groundswell has already taken over the lease of the former yarn shop and has hired a designer and contractor to renovate the new space. The owners hope to complete the expansion by March and start selling beer and wine by April, after Groundswell receives a liquor license.

McCoy and Gilbert got the idea to raise money from its customers from Northbound Smokehouse, a Minneapolis brewpub that also sold $1,000 shares in exchange for a free glass of beer each day for life. McCoy said that the fundraising effort will be a good way for the business to immerse itself in the community.

Groundswell’s coffee beans come from Minneapolis-based roaster Dogwood Coffee Company. It uses milk that comes from grass-fed cows at Autumnwood Farm in Forest Lake and honey provided by Bare Honey in St. Paul. Meanwhile, its chai is crafted by St. Paul-based Gray Duck Chai.

—Nataleeya Boss
(nboss@t[email protected])

Target Hires New E-Commerce, Mobile Head

Jason Goldberger, the company’s new senior vice president of target.com and mobile, has a history of working in online retail.

Target Corporation announced Tuesday that it has hired Jason Goldberger as senior vice president of target.com and mobile, effective February 11.

In his new position, Goldberger—who has a background in online retail—will oversee Target’s e-commerce operations, including sales through mobile channels.

Goldberger most recently served as executive vice president for New York-based online retailer Gilt Groupe, where he was responsible for its home, gourmet food, and kids businesses, as well as companywide business development. During his time at Gilt, he led the launch of a new website for the retailer’s home products business and grew that business by more than 40 percent, according to Target.

Prior to that, Goldberger was senior vice president of marketing and merchandising at Hayneedle, an Omaha, Nebraska-based online retailer that sells home decor and outdoor products. He has also worked at Seattle-based e-commerce giant Amazon.com, where he spent eight years.

“We are very excited that Jason has agreed to join the Target team,” Casey Carl, president of Target’s multichannel division, said in a statement. “Jason’s leadership, experience, and skills in merchandising, marketing, and online channels will help us on our journey towards providing guests a seamless and integrated Target experience.”

Goldberger joins Target at a time when the discount retailer is ramping up its e-commerce operations. The company last week unveiled a number of online-only brands, including one that was developed by Minneapolis-based furniture maker Blu Dot, in an effort to set itself apart from other online retailers.

The company also announced earlier this month that it will match prices with select online competitors year-round. The move extends its holiday season price-matching policy that ran from November 1 through December 16.

Target is Minnesota’s second-largest public company based on revenue, which totaled $68.5 billion in its fiscal year that ended in January 2012. The company plans to release financials for its new fiscal year in February.

—Nataleeya Boss
([email protected])

North Memorial Medical Center Cuts Jobs, Downsizes

The Robbinsdale hospital, which has been experiencing a decline in the number of patients it treats, shed an undisclosed number of employees on Monday.

North Memorial Health Care on Monday laid off an undisclosed number of staff members at the North Memorial Medical Center in Robbinsdale.

Spokeswoman Wendy Jerde confirmed in an e-mail Tuesday that the layoffs occurred, but declined to disclose the number of employees who were let go. She said that North Memorial Health Care is in the process of downsizing its namesake hospital and restructuring the system as a whole in order to position itself for “growth in an evolving health care environment.” Most of the staff positions that were cut did not involve direct patient care, she added.

“The changes that were made are part of a larger plan to ensure the entire North Memorial Health Care system is sustainable and successful as the organization continues to expand and strengthen its clinic and other outpatient services,” Jorde said.

Monday’s cuts represent North Memorial’s second round of layoffs within the past month.

In late December, North Memorial Health Care eliminated an unspecified number of leadership positions as part of its restructuring. In a memo sent at that time to North Memorial employees, CEO Larry Page warned that “non-leadership staffing reductions” would come in January. The health system also outlined a strategy that involved shifting resources away from the Robbinsdale hospital and focusing on outpatient clinics and diversifying into geriatric and end-of-life care.

In addition to operating its namesake hospital, North Memorial Health Care has a 75 percent stake in Maple Grove Hospital, runs about a dozen clinics, and operates one of the largest medical transport fleets of helicopters and ambulances in the country.

But its namesake hospital is the one feeling the brunt of the reorganization as it has been suffering from a decline in the number patients it treats, according to a Star Tribune report.

Admissions at the hospital were reportedly almost 9 percent below budget for the third quarter of 2011, while systemwide profits totaled $1.1 million in the quarter, below the budgeted $3.3 million.

North Memorial Health Care is the smallest health care system in the Twin Cities, with revenue of $670.4 million in 2011.

—Nataleeya Boss
([email protected])

3M HQ Gets 1st Major Makeover in 50 Years

The newly renovated common areas at 3M’s Maplewood headquarters feature wide-open spaces and glass-enclosed meeting areas to reflect a modern workspace.

Thanks to a sweeping renovation project, the public areas at 3M Company’s Maplewood headquarters reportedly have a new look for the first time since the buildings went up in the 1960s.

According to the Pioneer Press, the recently completed makeover transformed dark hallways and windowless conference rooms into wide-open spaces and glass-enclosed meeting areas to reflect a more modern work space. The newly designed areas also include an employee mall with shops and services, including a Starbucks coffee kiosk and a U.S. Bank branch, the newspaper reported.

In addition, one of the new hub areas reportedly houses a secure social networking system for employees, which includes a table-sized collection of flat-panel screens displaying short Facebook-style posts and employees’ pictures.

The company hired two well-known architects—Austria-based Peter Ebner and Los Angeles-based Hitoshi Abe—to design the spaces, the Pioneer Press reported. MS&R, a Minneapolis-based architecture firm that specializes in adaptive reuse of existing structures, meanwhile, made Ebner’s and Abe’s designs a reality.

3M materials were reportedly used everywhere in the new spaces, including light diffusers and flat-panel screens that use 3M optical film. To read the full Pioneer Press story and view pictures of the 3M headquarters’ newly redesigned areas, click here.

—Nataleeya Boss
([email protected])

Buffalo Wild Wings to Become NCAA Corporate Partner

The partnership will give the restaurant chain marketing and promotional rights to all 89 of the NCAA championships.

Golden Valley-based Buffalo Wild Wings will soon become a corporate partner for the National Collegiate Athletic Association (NCAA) in the casual dining category, according to a recent SportsBusiness Daily report.

NCAA corporate partners have exclusive marketing and promotional rights in their category to all 89 of the NCAA championships, including the NCAA Division 1 men’s basketball tournament often referred to as March Madness, according to the NCAA website. These rights include the use of all NCAA trademarks and logos.

The NCAA currently has 14 corporate partners, including Coca-Cola, UPS, LG, Buick, and AT&T. The corporate partners sublicense NCAA trademarks and marketing rights from CBS Sports and Turner Sports.

The NCAA partnership will represent Buffalo Wild Wings’ latest effort to strengthen its ties with sporting events and enhance its reputation as being a sports bar and restaurant. The company announced last summer that it would be the title sponsor of an annual college football game held in Tempe, Arizona, now dubbed the “Buffalo Wild Wings Bowl.”

Also last summer, the company redesigned its logo, replacing its old “Grill and Bar” tagline with the words “Wings,” “Beer,” and “Sports.” At the same time, the company revealed plans to alter the look and feel of its future restaurants to feature a more sports-centric design and “create an atmosphere that feels more like being in a stadium.” Most restaurants opening in 2013 will feature the new design, the company said.

Buffalo Wild Wings has about 900 locations in the United States and Canada and is one of Minnesota’s 35-largest public companies based on revenue, which totaled $784.4 million in 2011.

—Nataleeya Boss
([email protected])

German Co. to Buy MN-based Johnson Screens for $134M

New Brighton-based Johnson Screens, which makes water treatment equipment and employs 250 people in Minnesota, has agreed to be acquired by Germany-based Bilfinger.

Mannheim, Germany-based engineering and construction giant Bilfinger recently announced that it has agreed to buy Johnson Screens, a New Brighton-based water treatment equipment manufacturer.

Bilfinger said that the two companies have agreed not to disclose the financial terms of the deal, but its chief financial officer, Joachim Mueller, on late Friday told Reuters that Bilfinger will pay about $134 million.

Founded in St. Paul in 1904, Johnson Screens employs about 1,200 across the globe, including 250 in Minnesota, and had about $214 million in revenue last year. It is owned by Switzerland-based Weatherford International, which primarily offers oil and natural gas equipment and services.

A Johnson Screens spokesman declined to comment on whether the company will continue to be based in Minnesota, or whether the acquisition will result in any layoffs.

Johnson Screens’ water filtration products are used across a variety of industries, including food and beverage, construction, and oil and natural gas.

Bilfinger said that it wants to grow its water and wastewater-treatment business, and the acquisition will provide access to new markets and “increase the strong profitability” of the sector. The company expects to double its water technology business’ sales to more than $400 million annually as a result of the acquisition. Meanwhile, Johnson Screens’ current parent company, Weatherford, has decided to move away from the water treatment business, according to Bilfinger.

Bilfinger had about $11.3 billion in sales last year and employs more than 65,000.

—Nataleeya Boss
([email protected])

For 3rd Yr., Hennepin Cty. Officials Return Portion of Pay

Employees and commissioners have helped the county save approximately $4.4 million in the past two years through voluntary unpaid leaves and returned pay.

The Hennepin County Board of Commissioners has, for the third consecutive year, approved measures to allow the county’s elected officials to voluntarily return a portion of their salaries, the county announced Wednesday.

The county has saved nearly $4.4 million in the past two years, mainly due to employees taking voluntary unpaid absences.

Since 2009, the county has encouraged its employees to voluntarily take leave without pay—an average of 20 hours per year—in order to address tight budgets. In 2011, participating employees helped the county save approximately $1.9 million by taking unpaid leaves; in 2010, that amount totaled nearly $2.5 million, the county said.

However, a Minnesota statute doesn’t allow the county’s elected officials, which include its commissioners, to take unpaid leaves. As a result, elected officials have, for the last two years, had the option to return the equivalent of 20 hours of their pay to the county.

On July 24, all six members of the board voted unanimously in favor of returning that same portion of their 2011 salaries.

Mike Opat, chair of the Hennepin County Board of Commissioners, told Twin Cities Business on Thursday that the commissioners’ returns have amounted to roughly $2,000 per year and thus represent a small portion of the total amount that employees have helped save in recent years.

“We recognize the value of staff taking leave without pay,” Opat said in a statement. “We arrived at this strategy—basically in the form of a gift to the county, which is permitted by statute—so that we could give back a portion of our salaries as well to address the deficit.”

Meanwhile, no commissioner or employee has received a raise since 2008. Opat said that Hennepin County is one of few entities in the state that have adopted such cost-saving measures.

—Nataleeya Boss
([email protected])

3M Sues Law Firm for Switching Sides, Aiding MN AG

3M cited “betrayal” motivated by “greed” as a reason for Covington & Burling’s move to help the Minnesota attorney general in a lawsuit against the Maplewood-based company.

3M Company—which was sued by the state last year over alleged damage caused by the disposal of chemicals—is reportedly suing one of its former law firms for switching sides and aiding the Minnesota attorney general in the lawsuit against the company.

In its suit against national law firm Covington & Burling LLP, Maplewood-based 3M alleges that “betrayal” motivated by “greed” led the firm to aid the attorney general after having worked with 3M in the past, the Pioneer Press reported.

3M reportedly alleges that the firm’s switch was motivated by the possibility of huge legal fees. The state’s deal with Covington says the firm would be paid 25 percent of the first $75 million collected from 3M, 20 percent of the next $75 million, and 15 percent of anything over $150 million, according to the Pioneer Press.

3M said that Covington worked for the company on and off from the 1980s to 2010, and during those years “more than 165 Covington attorneys billed 3M millions of dollars,” the St. Paul newspaper reported. At one point, the firm reportedly worked for 3M on legal matters involving PFCs, or perfluorochemicals, which are at the center of the suit against 3M.

3M claims that Covington went from arguing that trace amounts of PFCs did not pose a risk to humans to arguing that exposure to those same chemicals is dangerous, according to the Pioneer Press. (Read the full Pioneer Press story here.)

Covington, meanwhile, said in an e-mailed statement to Twin Cities Business that the state has “been a client of the firm in environmental matters for more than 15 years” and it agreed to represent the state after confirming that it “had no active matters for 3M and that there was no conflict based on any prior representation of 3M.”

“The 3M complaint against our law firm has the situation completely backwards in suggesting that the firm dropped a long-time client to represent the State,” Covington said. “To the contrary, the State, a long-time client, asked Covington to handle an important lawsuit on which it needed assistance. We reviewed the situation and appropriately decided to proceed with the representation.”

The firm added that it “takes its ethical responsibilities seriously and has acted in accord with all applicable ethical rules in connection with its representation of the State of Minnesota in litigation against 3M.” It intends to “defend itself vigorously against 3M’s lawsuit, which is without merit.”

—Jake Anderson
([email protected])