PBT Transcript (5/06/2008)

MIKE ARMSTRONG: Coming up, a local bank can’t find more than six million dollars it had on its books. How did it happen? We’ll tell you what it could mean for the bank’s future. The slow economy gets blamed for a lot of things: Less leisure travel, fewer shopping trips to the mall. How about using less water? One local company is seeing a dry spell. More bad news for the former owner of Atlantic City’s Tropicana. We have the update. Philadelphia Business Today starts now.

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MIKE ARMSTRONG: Willow Financial can’t find $6.2 million. It’s not for lack of trying. The Wayne Bank has spent five months and two million dollars looking for the money. Willow says it’s due to an accounting problem that began around the time of its acquisition of Chester Valley Bank Corp in 2005. This could mean trouble for the bank. Banks are heavily regulated, and even though six million dollars doesn’t sound like a lot, it’s enough to increase scrutiny on the company. Willow has taken a charge for the missing money and restated its 2006 and 2007 earnings downward.

We’re probably all a little tired of hearing company executives bemoan the slow economy. But here’s one that caught me off guard. Bryn Mawr based Aqua America said its first quarter revenues were flat because customers use less water. Aqua runs what sounds like the most recession-proof business of all: Municipal water systems. So what’s the story? It’s that economic slowdown again. The company explains the housing slump has meant fewer new homes have needed to connect to water service. The biggest drag on its revenue growth is the delay on getting rate hikes approved. Aqua says its seeking 17 rate increases that would produce $65 million in revenue.

The former owner of Atlantic City’s Tropicana Casino has filed for bankruptcy. Tropicana LLC lost its license to operate in New Jersey back in December. Some context: Casinos almost never lose their licenses. The review process happens every five years and failing to be renewed suggests a company in real trouble. Last fall, Tropicana workers and customers complained about filthy rooms and bad food at the Atlantic City casino. After losing its casino in New Jersey, Tropicana Entertainment had warned it might go bankrupt, and it did yesterday, seeking protection for its nine remaining casinos. But there’s hope for those of you who remember better days at the Atlantic City Tropicana. It’s still open for business under new management while the state considers new offers from potential buyers.

Never heard of K-Tron International? Don’t worry. It will never be seen as a hot company like a Starbuck’s or an Apple. Unless you look at its stock price. Over the last year, shares of K-Tron have risen 61%. What does it make? Material handling equipment. For its first quarter, the Pitman, New Jersey company reported that net income rose 16%. Sales were up 22%. Generally the company benefits during times of economic expansion, as companies boost their capital spending. And we may have a weak economy, but 36% of K-Tron’s sales come from overseas.

That’s it for today. At the Inquirer, I’m Mike Armstrong for Philadelphia Business Today.

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