Corporate News

Odyssey Marine Exploration, Inc. (Nasdaq: OMEX) has acquired a minority interest in SMM Project LLC, a company funded by a group of investors to bring together the exclusive licenses and skills of world renowned deep-ocean geologist Dr. Timothy McConachy of Bluewater Metals, the deep-ocean survey and exploration expertise of Odyssey, and the offshore coring and mining expertise of Robert Goodden.

SMM Project LLC recently purchased a majority interest in Bluewater Metals Pty Ltd, an Australian company with licenses for mineral exploration of approximately 150,000 square kilometers of ocean floor in four different countries in the South Pacific. The group will focus on the exploration and monetization of gold and copper-rich Seafloor Massive Sulfide (SMS) deposits through a new business entity which will acquire the remaining interest in Bluewater, in accordance with a memorandum of understanding concluded between the parties.

It is anticipated that Odyssey will dedicate certain marine assets, including a ship and related marine exploration technology to the endeavor, and will own approximately 40% of the new entity. In addition, Odyssey is expected to provide proprietary expertise and personnel management to the entity under contract, and will supervise operations to explore for deep-ocean gold, copper and silver deposits in areas covered by exploration permits currently held by Bluewater Metals.

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Comstock Homebuilding Companies, Inc. (NASDAQ: CHCI) received notice that the NASDAQ Listing Qualifications Panel has granted the Company's request to transfer the listing of its common stock from The NASDAQ Global Market to The NASDAQ Capital Market, effective with the open of business on Wednesday, November 18, 2009.

As previously announced, on August 24, 2009, the Company received notice that it no longer satisfied the $10 million stockholders' equity requirement for continued listing on The NASDAQ Global Market. At a hearing before the Listing Qualifications Panel on September 23, 2009, the Company requested the transfer of its listing to The NASDAQ Capital Market pursuant to an exception. The NASDAQ Capital Market stockholders' equity requirement is $2.5 million. On November 13, 2009, the Company filed its Quarterly Report on Form 10-Q for the period ended September 30, 2009 evidencing stockholders' equity in excess of the minimum $2.5 million threshold. Pursuant to the Panel's recent decision, the Company's continued listing on the Capital Market is subject to, among other things, the Company evidencing continued compliance with the $2.5 million stockholders' equity requirement. The Company is awaiting acknowledgement from NASDAQ that it has satisfied the $2.5 million stockholders' equity requirement for continued listing on The NASDAQ Capital Market.

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Agilysys, Inc. (Nasdaq: AGYS) will hold a special meeting of shareholders on January 5, 2010 for the purpose of considering and voting on whether to authorize MAK Capital, its largest shareholder, to increase its ownership above 20% but not to exceed one-third, of the company's outstanding shares. The Acquiring Person Statement indicates that MAK Capital does not intend, either alone or in concert with any other person, to exercise control of the Company. The Agilysys Board of Directors has determined that it will make no recommendation either in favor of or against the proposed control share acquisition.

As announced earlier today, Agilysys received, under Section 1701.831 of the Ohio Revised Code, Ohio's "control share acquisition statute," an Acquiring Person Statement from MAK Capital Fund, LP and Paloma International L.P., notifying the company of their intent to increase their direct or indirect ownership of Agilysys' common shares above 20%, but not to exceed one-third.

MAK Capital One LLC is the investment manager of both MAK Capital Fund and Paloma International L.P., and is a private investment fund and the largest current shareholder of Agilysys. It currently owns 19.18% of the issued and outstanding shares of Agilysys common stock. R. Andrew Cueva, managing director of MAK Capital, has served on the Agilysys Board of Directors since June 2008.

Approval of the proposed control share acquisition requires both the affirmative vote of the holders of a majority of shares entitled to vote at the special meeting, and the affirmative vote of a majority of shares that are not "Interested Shares" as defined under Ohio law. "Interested Shares" include shares controlled by MAK Capital, shares owned by officers of Agilysys elected or appointed by the Board of Directors, and shares acquired during the period from November 20, 2009 to the record date.

After careful consideration, including a thorough review of the Ohio Control Share Acquisition Statute with Agilysys' independent financial and legal advisors and consultation with the company's management, and consistent with the recommendation of the Board's Nominating and Governance Committee, the Board of Directors has determined, as permitted under Ohio law, that it will take no position and make no recommendation either in favor of or against the proposed control share acquisition. Accordingly, the Board urges shareholders to carefully review the company's proxy materials that will be distributed in connection with the special meeting for a detailed explanation of the potential advantages and disadvantages of the proposed control share acquisition.

In connection with the proposed control share acquisition, Agilysys intends to file a proxy statement.

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J. M. Smucker Company (NYSE: SJM) reports Q2 EPS of $1.18, 14 cents better than the analyst estimate of $1.04. Revenue for the quarter was $1.28 billion, which compares to the estimate of $1.24 billion. Shares are currently up over 5%.

Highlights From SJM's Q2 Conference Call:

• Sees FY10 sales of $4.5 billion and EPS of $3.95 - $4.05 ex-items. Consensus sees $4.55 billion and $3.83, respectively.
  
• (Chairman and Co-Chief Executive Officer) We delivered the highest quarterly sales and earnings results in our history.
  
• Sales are up 52%, mainly due to the addition of Folgers. Profits were up in each business segment. Non-GAAP earnings per share were up 21%. And cash from operations exceeded 210 million.
  
• As we celebrate the one-year anniversary of completing the Folgers merger, the Coffee business performance continues to exceed our expectations. We experienced another strong quarter in Coffee in both sales and profit.
  
• Operating margin continued to expand significantly, driven by the profitability of the Coffee business. In addition, many of our core businesses also realized margin gains due to the lower commodity cost and synergy benefits.
  
• We continued to invest in our brands, as evidenced by an increase in marketing expenses of over 70% for the quarter, partly in support of the fall bake and holiday period.
  
• In the consumer segment volume was essentially flat with gains and peanut butter, pancake mixes and syrups, offsetting declines in fruit spreads.
  
• Sales in consumer were unfavorably impacted by the mix of products sold.
  
• In line with eating at home and back to baking trends, our Oils and Baking segment delivered good volume growth with both Crisco and Pillsbury brands increasing. Sales for this segment were down as expected primarily on price decreases taken in various categories.
  
• Based on category data for the 12-week period, our Pillsbury frostings are now the number one brand in volume sales.
  
• Sales in the Special market segment increased 15% due to the addition of Folgers. Volume gains were realized in Canada primarily in the baking and pickles category.
  
• (CFO)Sales for the quarter increased 436 million or 52% excluding coffee sales were down 6% for the quarter. Volume was 1% and was more than offset by a 7% decline due to price and mix with price the key driver.
  
• If you also exclude amortization in both years, earnings per were a $32 this quarter and a $3 last year and increase of 28%.
  
• Operating income increased a $146 million for the quarter excluding charges and increase as a percent of sales from 11% to 18.7%. Higher amortization expense in the current quarter negatively impacted margin by approximately a 130 basis points.
  
• Gross profit increased $249 million over the second quarter of last year and was a primary driver of the industries in operating income. Gross margin improve from 28.9% last year to 38.5% this quarter.
  
• Coffee contributed approximately 90% of the increase and continue to be impacted by favorable green coffee cost, volume-related plant efficiencies and product mix.
  
• SG&A expenses increased approximately $83 million, mainly reflecting the addition of Folgers, an increase as a percent of net sales from 17.8% to 18.2%
  
• Marketing and selling expenses totaled 10.1% of net sales compared to 9.6% last year.
  
• As scheduled earlier this month, we paid off $350 million Folgers bank debt and $200 million of senior notes assumed in a multi suites deal in 2004. This was completed using a combination of cash and borrowings against our existing $180 million credit revolver. Following the pay down outstanding borrowings on the revolver were approximately $100 million.
  
• We continue to anticipate a full-year tax rate of 34 to 34.5%.
  
• The U.S. Retail Coffee segment contributed $445 million to net sales for the second quarter of 2010 compared to the same three month period last year prior to the transaction volume was up 5%.
  
• Folgers contributed three-quarters of the growth with Dunkin' Donuts coffee accounting for the remainder. The coffee segmented $149 million to profit and achieved a 33.4% margin.
  
• We continue to believe that current margins in U.S Retail Coffee segment are in excess of longer term expectations. However, now that we've own the business for 12 months, we believe certain factors have changed since our original estimate of 28%.
  
• Sales in our U.S retail consumer segment were down 4% primarily due to mix as volume was flat for the quarter.
  
• Volume and sales gains were realized in peanut butter, pancake mixes and syrups.
  
• Volume and sales were down in fruit spreads due to mix, while potatoes, Uncrustables sandwiches and specialty foods also declined.
  
• Segment profit increased 4%, mainly due to lower distribution and operating cost. Segment margin improved by 190 basis points compared to last year's second quarter.
  
• In the U.S. Retail Oils and Baking segment, sales declined 9% compared to last year, primarily reflecting impact of price increases taken earlier this calendar year and higher promotional spending Crisco oils.
  
• Segment volume was up 3% with Pillsbury and Crisco brands up 14 and 12%, respectively. These gains were primarily offset by declines in canned milk. Segment profit increased 55%.
  
• Total sales in the Special Markets segment increased 15%, as the addition of Folgers and a 6% volume gain in Canada more than offset the impact of volume declines in the foodservice and natural foods business areas.
  
• Excluding coffee, Special Markets' net sales would have been approximately 5% less than last year's second quarter. Profit in the Special Markets segment was again strong, increasing 56% for the quarter, mainly due to the addition of Folgers and lower costs.
  
• (CEO) We are comfortable raising our outlook for the year. We continue to expect net sales of approximately 4.5 billion. We anticipate income per diluted share excluding merger and integration cost in the range of $3.95 to $4.05, an increase from the high-end of our $3.65 to $3.80 range that we have
  previously had.
  
• Amortization of approximately $0.40 per share is included in our forecast. Excluding amortization, our new forecast is $4.35 to $4.45 per share.
  
• (Q&A) My first question has to do with the comments Mark that you made about some creep up in some of the commodities of lead. And I just wanted to get a sense from you as to given your willingness to move pricing around more aggressive than some of your peers how do you think it plays out, if you have to go back to the trade and talk about price increases? (A) I think what I'll do is frankly - better is I have, first of all Paul started off on the oil because most of the impact we're talking is in his area.(A)Hey Eric, this Wagstaff. And again regarding oils we have seen about 10% increase in the cost of oil going since last time we've talked to second quarter or first quarter. As you know, we are covered through our fall bake time period and that would be with all of our key commodities. As we've looked at pricing, we are looking as pricing as they come first the calendar year and that's typical what we would do. Again, I think we've been relatively transparent in all of our key commodities and how we price it with our customers. So I think we'd be comfortable if the commodities are at a rate that you need to make an increase or decrease that we would do that.
  
• And then, I guess, maybe just as my follow-up, within coffee you had gone to a EDLP type strategy. My sense is with 5% year-over-year volume growth that you continue to take share unless the category is growing a lot more rapidly than I thought. Can you just kind of talk about the competitive landscape in coffee. Has Maxwell House followed your strategy? And was there any impact to your business during the quarter because of that approach?(A)Yeah, let me again, clarify for everyone on the phone, what we did is basically took a very significant portion of our trade spend and put it into everyday price. So if an account was actually already an EDLP account, there was most likely no effect, but if you're a high or low account, your everyday price was reduced and then your promotional price may not be as deep as it had been historically. So that's the first point. Secondly, as you know, we announced that and then started to implement that back in the first quarter, and our major competitor did not follow. Until about two weeks ago that we received confirmation that for the most part, they have followed that strategy almost penny for penny and that will be implemented as we understand some time in our third quarter or after the beginning of the new calendar year. Did that contribute to our growth? I would say that, yes, it probably did. Folgers grew over 4% during the second quarter, as it did in the first quarter. But I wouldn't contribute it all to that. I think there are a number f factors from our sales team, our marketing efforts, multi-branding promotional activities, etcetera, that probably contributed to that growth.

Pfizer (NYSEL PFE) today announced that the U.S. Food and Drug Administration (FDA) has approved Geodon (ziprasidone HCI) Capsules for maintenance treatment of bipolar I disorder as an adjunct to lithium or valproate in adults. The approval is based on clinical data demonstrating that Geodon is an effective and generally well-tolerated adjunctive treatment for long-term symptom control in patients with bipolar disorder.

Geodon is also FDA-approved for the treatment of acute manic and mixed episodes associated with bipolar disorder, with or without psychotic features, and for the treatment of schizophrenia. Since the FDA approval of Geodon in February 2001, nearly 2 million adult patients have been treated with this important therapy.

Bipolar disorder, which affects approximately 5.7 million adults in the United States, is a debilitating, chronic condition that requires lifelong treatment and management. More than 90 percent of patients with bipolar disorder have recurring mood episodes, making it important to establish a long-term treatment plan to help prevent recurrence and stabilize mood. The recurrence of mood episodes associated with bipolar disorder can have a devastating impact on patients' lives, and the disease is associated with high rates of disability.