Good morning, MBA readers,
With the coronavirus continuing to inflict economic damage — a record 20.5 million U.S. job losses in April is the latest evidence — Missouri’s businesses are looking at long road back to “normal.” Reopened restaurants in the state are faring better than some expected, perhaps due to pent-up demand. But with social distancing measures in place, they are not expected to see their typical weekend haul anytime soon. It’s a similar story with big firms like telecom company T-Mobile, Sprint’s new parent, which expects flat growth in subscribers for the rest of the year. Grain trader Bunge also adjusted its outlook for the year due to “unprecedented volatility” in the biofuel market. But the pandemic has yet to slow at least one St. Louis company’s prolific M&A strategy: Reporting first-quarter revenue growth, IT consultancy Perficient hinted at another potential deal in the works.
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Speaking Startup: The downward trend in state entrepreneurship funding
As lawmakers have worked this week to finalize the state’s budget, entrepreneurial support organizations across Missouri have watched with interest. They are concerned about the downward trend in state funding for the Missouri Technology Corporation, a private-public partnership established to promote entrepreneurship and boost the growth of technology businesses in the state. On this week’s Speaking Startup podcast, we check in with innovation centers across Missouri to understand what that decreased funding has meant to them.
US unemployment hits 14.7%
The national unemployment rate reached 14.7% in April, its highest level since the Great Depression. Payrolls shed 20.5 million jobs during the month, the highest total ever, as the coronavirus shocked the economy. (Associated Press)
Despite recent spike in COVID-19 cases, St. Louis sees dip in hospitalizations
State officials on Thursday reported 239 new coronavirus cases, bringing the statewide total to 9,341 confirmed cases and 418 deaths. Still, the number of people treated in St. Louis-area hospitals for COVID-19 dropped to 596 on Thursday, the lowest since April 11. (St. Louis Post-Dispatch)
New bill would waive state tax on stimulus checks
The Missouri House on Thursday passed a bill amending current laws to exempt federal stimulus checks from state income tax. The bill returns to the Senate, where it originated as a measure dealing with property tax assessments. (St. Louis Post-Dispatch)
State expands child care aid with federal funds
Missouri plans to spend $66 million in federal money to subsidize child care for low-income families that did not previously qualify for benefits. The plan would extend access to benefits to families that earn up to 215% of the federal poverty level and have a “documented child care need.” (St. Louis Public Radio)
Springfield allows bars, theaters to reopen
City officials have amended reopening guidelines they issued last week, now including bars, movie theaters and museums among local businesses that are allowed to reopen. The rules now cap public gatherings to 25 people, up from 15. (Springfield Business Journal)
T-Mobile projects growth lag, tempers 2020 expectations
With over 80% of its stores shuttered due to the pandemic, T-Mobile, which finally absorbed Sprint last month, fears the crisis could hurt its subscriber growth this year. The wireless carrier said costs related to the pandemic were about $117 million. (Wall Street Journal)
‘Unprecedented volatility’: After first-quarter rout, Bunge cuts 2020 outlook
The agricultural commodities giant reported a net loss of $181 million, or $1.34 a share, for the first quarter, citing low demand for biofuel and edible oils, as well as volatile currency markets. Bunge forecast a particularly challenging year for its edible oils unit due to a downturn in the food industry. (Reuters)
Express Scripts offers discounted drugs for newly unemployed
The St. Louis County-based pharmacy benefits manager is offering thousands of generic prescription drugs at $25 and brand drugs at $75 for people who recently lost their health insurance due to the pandemic’s shocks on the economy. (Reuters)
Peabody’s restructuring insulates it from climate change lawsuits, judge rules
A federal circuit court judge has ruled that a trio of California municipalities may no longer sue St. Louis-based Peabody Energy, determining that all of the alleged environmental damage by the coal producer occurred before its 2016 bankruptcy. (Bloomberg Law, Reuters)
Charter to hire more than 735 in Missouri
The telecommunications giant, formerly based in St. Louis, said it is hiring more than 550 workers in the region, filling roles in customer care, IT, sales and more. Charter is also looking to fill 185 jobs at its mobile call center in Kansas City. (St. Louis Business Journal)
Health system furloughs thousands
Hospital Sisters Health System, which operates three hospitals in the St. Louis area, has furloughed nearly 5,000 employees — a third of its workforce — across 15 hospitals as the pandemic drives down revenue. (St. Louis Business Journal)
Industry group says reopened restaurants have seen ‘good results’ so far
Although they are running at about half their normal capacity, Missouri restaurants that reopened this week are seeing sales figures that are “comparable” to the same days last year, according to the CEO of the Missouri Restaurant Association. But he warns that weekend sales will not yet return to normal due to social distancing requirements. (St. Louis Business Journal)
KC officials approve incentives for $52 million luxury apartment project
The city’s Planned Industrial Expansion Authority voted Thursday to approve tax incentives valued at $8.4 million for Kansas City-based 3D Development, including a 75% tax abatement for 10 years. The developer plans to build a five-story, 150-unit luxury apartment complex in the city’s Freighthouse District. (Kansas City Business Journal)
Former East St. Louis casino workers sue company over 2012 sale
Two former Casino Queen employees have sued the former owners of the East St. Louis casino, who sold their stake to an employee stock ownership program. The suit alleges that the owners have obscured the true value of their business for years so they could sell the business at an inflated price. (St. Louis Public Radio)
Springfield utility scores $7.6 million federal transit grant
The Federal Transit Administration has awarded City Utilities of Springfield a $7.6 million grant earmarked to cover the cost of operating transit services during the pandemic. (Springfield Business Journal)
Feds warns KC-area firms to stop hyping unproven COVID-19 remedies
The Federal Trade Commission has ordered three local businesses to stop making unproven claims that supplements and other products can treat or cure the novel coronavirus. One of the businesses reportedly promoted intravenous vitamin C as a treatment. (Kansas City Star)
Fishing gear firm moves to Springfield
Anything Possible is leaving its old space in Ozark for a new 59,000 base of operations in Springfield, where it plans to expand from 11 to 16 employees and hire additional temporary workers. (Springfield Business Journal)
Say that again
“The current climate, by the way, is not dissuading us from continuing to look for ways to supplement our organic growth with M&A. In fact, we’re in late stages with an opportunity I’m very excited about and hopeful to close here during the second quarter.”
That’s what Perficient Chairman and CEO Jeffrey Davis told analysts Thursday when asked how COVID-19 would impact the company’s aggressive acquisition strategy, the St. Louis Business Journal reports. The St. Louis-based IT and consulting firm has closed more than 40 deals since its founding, two of which were made this year. Davis’ commitment to this strategy comes as Perficient posted a 9% bump in first-quarter revenue compared to a year earlier. He did, however, add that the company withdrew its full 2020 guidance because “there are simply too many uncertainties right now to forecast how the remainder of the year will devolve.”
That’s how much Missouri’s tax revenue fell in April due to the coronavirus outbreak, the St. Louis Post-Dispatch reports. While state lawmakers scramble to finalize a budget for the 2021 fiscal year, the state’s net general revenue collections crashed from $1.59 billion in April 2019 to $725 million this year. This dramatic gap is “highly concerning,” Missouri House Budget Committee Chairman Cody Smith said. Facing a massive budget shortfall, Gov. Mike Parson slashed about $227 million in state spending last month. Tax collection in general is down 6.1% for the current fiscal year, which ends June 30, and corporate income taxes are down 66%.
Hello, my name is
This former president at The Bank of Missouri has been hired as Regent Bank’s new president in the Springfield market, the Springfield Business Journal reports. Nitsch held his previous position for 14 years until he left the bank earlier this year. At Regent Bank, a Tulsa, Oklahoma-based operation, he replaces Craig Dunn, who departed in April to take a position with Guaranty Federal Bancshares.
It’s been a pleasure doing business with you this morning.