Corporate Report

Corporate Report

by Sean Roth | Real Estate Editor

WellCare postpones latest 10-Q filing

Don't expect financial reports for the first quarter soon, WellCare Health Plans Inc. told shareholders and observers in a recent filing with the Securities and Exchange Commission.

The company says that until the independent investigation being conducted by a special committee is completed or nearly completed, the company will not be in a position to file its 10-Q for the quarter that ended March 31. WellCare Health Plans is already two quarters behind; it also still hasn't filed its financials for the previous two quarters that ended Sept. 30 and Dec. 31, or its annual report.

In its filing, the company says it expects "to be subject to the New York Stock Exchange's late filing procedures" but does not go into details as to the most likely regulatory repercussions.

The company also emphasized in the filing that it expects it will report significantly higher revenue and substantially lower net income at least for the first quarter of 2008 compared to the same period last year.

"The increase in medical benefits expenses is anticipated to outpace the increase in revenue in the first quarter of 2008 compared to the prior year period due to a widening of the CMS-sponsored Medicare Part D risk corridors in 2008," the company wrote in the SEC filing.

The investigation is also expected to cost the company $32 million in the first quarter.

The company did release total membership as of March 31, 2008, that was higher than last year. Those larger numbers are expected to translate into higher premium revenues, as well as medical and other expenses.

On October 24, several government agencies, under the supervision of the U.S. Attorney's Office for the Middle District of Florida, executed a search warrant and served subpoenas on the company and various related entities.

WELLCARE BY THE NUMBERS

TOTAL MEMBERSHIPS

03-31-07 03-31-08 % change

Medicaid

TANF 864,000 947,000 9.6%

S-CHIP 206,000 187,000 -9.2%

SSI 70,000 71,000 1.4%

FHP 31,000 28,000 -9.7%

Medicaid total 1,171,000 1,233,000 5.3%

Medicare

MA 131,000 204,000 55.7%

PDP 970,000 1,009,000 4.0%

Medicare total 1,101,000 1,213,000 10.2%

Total memberships 2,272,000 2,446,000 7.7%

+ NetWolves Corp.

close to Chapter 11 exit

Tampa-based NetWolves Corp. appears to be close to emerging from bankruptcy. The U.S. Bankruptcy Court for the Middle District of Florida, Tampa Division, has approved the disclosure statement for the company's second amended joint plan of reorganization and has set a date for its confirmation.

Judge Paul M. Glenn entered an order approving NetWolves' disclosure statement based on a finding that it contained adequate information for the purpose of soliciting votes on its Chapter 11 plan of reorganization. NetWolves expects to send out the approved solicitation packages to creditors this week. A hearing for the court to consider confirmation of NetWolves' bankruptcy plan has been scheduled for June 24 at 9:30 a.m.

The second amended joint plan of reorganization and other relevant information is available under the "Case Documents" link on the Web site of the company's bankruptcy counsel Jennis & Bowen P.L., at www.jennisbowen.com.

NetWolves is a telecommunications network and Internet-managed services provider.

+TheHomeMag adds regions,

lowers fees for smaller areas

Cape Coral publishing franchise business TheHomeMag is expanding to cover 58 new markets in the United States. Many of the smaller new sites are being offered at a reduced cost.

TheHomeMag started franchising in late 2006 and currently has 29 magazines with a total monthly circulation of more than five million homeowners in 12 states.

"We are looking for franchisees with great sales expertise who have vast knowledge about these cities," President Chris Goebel, said in a press release. "We are aware that not all great operators have the capital to invest in their own business. Our plan is to capture the best business and sales people by offering an affordable option for franchise ownership. We are opening locations that can be purchased for almost one-third of our normal franchise fee. These locations have smaller populations, but franchisees can still be very successful."

TheHomeMag expects that more than 26 million single-family homeowners will receive its magazine from more than 180 publishing locations by the end of 2012.

+ Max Muscle franchise

flexing into Tampa Bay

Max Muscle, a store franchise focused on sports nutrition, weight loss and fitness, is targeting Tampa, St. Petersburg and Clearwater for future expansion. The company plans to add 20 locations in the next five years. Furthermore, the company expects to add 40 to 45 stores in central Florida over that same period.

"We're the only sports nutrition company in the marketplace to offer franchises and territories," Marc Kiekenapp, director of franchise development for Max Muscle, said in a press release. "There has never been a better time for entrepreneurs to join the Max Muscle team. In the next five years, Max Muscle will be the dominant force in all the major U.S. markets."

Launched in 2003, Max Muscle currently has more than 100 franchise locations in the United States; another 500 new franchises are slated to open in the next five years. The majority of Max Muscle locations are in California, but the chain recently signed additional regional development agreements in western Pennsylvania, Missouri, Kansas, Arizona, San Diego and South Florida.

+ Chico's FAS reports

downturn in store sales

Fort Myers-based specialty clothing retailer Chico's FAS Inc. reported that its April sales results for the four-week period that ended May 3, 2008, decreased 4.5% to $142 million from $148.7 million for the four-week period that ended May 5, 2007. Comparable store sales decreased 15.5% for the same period this year compared to the same period last year. The company said that the shift in the Easter holiday helped boost comparable store sales in April by 2% to 2.5%.

For the thirteen-week period that ended May 3, total sales decreased 9.6% to $409.6 million from $453.1 million reported for the thirteen-week period that ended May 5, 2007. In comparing store sales during the same period this year with last year, there was a decline of 17.5%.

Chico's operates 1,057 women's specialty stores under the Chico's, White House | Black Market and Soma Intimates names. The company has 611 Chico's front-line stores, 38 Chico's outlet stores, 318 White House | Black Market front-line stores, 19 White House | Black Market outlet stores, 70 Soma Intimates front-line stores and 1 Soma Intimates outlet store.

+ GunnAllen Financial

settles with FINRA

Tampa-based financial services firm GunnAllen Financial plans to pay a fine of $750,000 to settle regulatory issues brought against it by the Financial Industry Regulatory Authority. FINRA says it discovered in an investigation a trade allocation scheme by the firm's former head trader Alexis J. Rivera.

FINRA found that in 2002 and 2003, the firm, acting through Rivera, engaged in a "cherry picking" scheme in which Rivera allocated profitable stock trades to his wife's personal account instead of to the accounts of firm customers. Rivera allegedly managed to steal profits of more than $270,000.

Kelley McMahon, the former head trader's supervisor, was suspended for six months from associating with any FINRA-registered firm in any principal capacity and fined $25,000.

Further, FINRA found that, prior to March 2005, GunnAllen never put stock of any company it was doing investment banking with on a restricted or watch list.

FINRA issued sanctions on GunnAllen for failing to report to FINRA that its parent firm had entered into a consulting contract with an individual who had been previously barred by FINRA.

GunnAllen was also sanctioned for not keeping e-mails and instant messages, for failing to implement an adequate AML compliance program and for other reporting deficiencies.

GunnAllen and McMahon settled without admitting or denying the allegations, but consented to the entry of FINRA's findings.

"With this settlement, GunnAllen achieves closure for past regulatory issues," Richard A. Frueh, CEO of GunnAllen Financial, said in a press release. "For several years now, and long since 2005, GunnAllen has added management talent and invested heavily in compliance and supervisory systems to improve our firm.

We are also pleased with the outcome of our 2006 and 2007 annual exams, which did not result in any further enforcement actions. By entering into this settlement with FINRA, GunnAllen has resolved historical issues, reaffirmed its commitment to supervision and compliance, and now looks forward to continuing to help our affiliates assist their clients achieve financial success."

+ Odyssey Marine outlines response to Spain

Accusations from the Spanish government concerning the ownership of a recently discovered shipwreck led Tampa-based Odyssey Marine Exploration Inc. to issue a statement responding to those charges.

Odyssey says that although it has identified the Nuestra Senora de las Mercedes y las Animas (the "Mercedes") as a working hypothesis for the "Black Swan" site, the company says it does not believe there is sufficient evidence to conclusively prove that the site is related to the Mercedes or any other ship. Further, it says that shipwreck site is more accurately described as cargo and does not actually include a ship hull to help in the identification.

Asked if the Spanish government should have a claim to the shipwreck treasure, Odyssey responded "the company is confident in its legal position."

The company says that if Spain is determined to have a claim or cultural interest in any shipwreck, Odyssey would propose forming a relationship.

Odyssey Marine Exploration engages in the exploration and recovery of deep-water shipwrecks.

In May of 2007, the company announced the largest historic deep-ocean treasure recovery of more than 500,000 silver and gold coins, weighing 17 tons, from a Colonial-era site code-named "Black Swan." Odyssey also has several other shipwreck projects in various stages of development around the world.

+ Aerosonic gets contract for helicopter indicators

Aerosonic Corp., a Clearwater-based supplier of products for commercial, business and military aircraft, has been awarded a new contract to supply indicators to the U.S. military through the Defense Supply Center Richmond, which serves as the lead center for aviation weapon systems for the U.S. Armed Forces. The indicators are standard equipment for the UH-60 Blackhawk helicopter.

Under the terms of the agreement, the government has the option to extend the one-year contract for an additional four years.

The potential value of the contract is $4.1 million over the five-year period should all renewal options be fully exercised. Initial deliveries of the indicators with a contract value of $600,000 will begin later this year.

+ John Heagney

creates B&L campaign

Holiday-based John Heagney Public Relations has created and will implement a nationwide public relations campaign for international eye-care company Bausch & Lomb.

Called Changing 100 Lives in 100 Minutes, the program was developed by the local advertising/public relations firm to help Bausch & Lomb mark the implantation of the 100,000th crystalens intraocular lens for the treatment of cataracts. Bausch & Lomb Surgical manufactures the crystalens.

During the national effort, Bausch & Lomb Surgical donated 100 pairs of crystalens lenses an FDA-approved lens designed to allow clear vision at near, far and intermediate distances ― to 100 low-income people across the country. In turn, 100 ophthalmologists from coast to coast donated their surgical skills to implant the lenses.