Briefcase – November 2016

CLOSINGS

Another Fort Collins restaurant space is getting a makeover, with Hot Corner Concepts deciding its Enzio’s Italian Kitchen concept has run its course. Enzio’s, 126 W. Mountain Ave., closed in late October, with HCC planning a new restaurant at the site that will be different from the pasta and pizza concept Enzio’s used for 12 years.

California-based Wahoo’s Fish Taco has closed its Fort Collins location at 2310 E. Harmony Road in Fort Collins. Locations in Boulder and Longmont remain open, along with seven others elsewhere in Colorado.

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CONTRACTS

I2B Capital, a Fort Collins-based investment firm, completed an agreement with New York-based Arena Investors LP that will enable i2B Capital to make larger investments in young companies. I2B Capital, founded in 2015 by Larry Curran II, has been making investments in the $5 million to $15 million range; this agreement will allow i2B to invest up to $20 million.

MAPR/LINKS WorldGroup, a Boulder-based technology public relations and digital marketing agency, added Krimston, DAVINCI, Phunware, FlowMotion, CryptoTestament and Lumyer to its client portfolio.

Greenwood Village-based Xanterra Parks and Resorts Inc. was awarded a 10-year contract from the National Park Service to provide concessions at Rocky Mountain National Park. The contract begins in January and allows Xanterra to provide retail, food and beverage services at Trail Ridge Store, located next to the Alpine Visitor Center on Trail Ridge Road.

The Bohemian Foundation, a nonprofit based in Fort Collins, and Colorado Creative Industries announced a public-private partnership to advance music in Colorado through the Colorado Music Strategy, a plan to support music as a key creative industry in the state. The strategy provides resources and leadership for music projects, grants to nonprofits to present music, and opportunities for networking and thought-sharing at an annual music conference. The foundation, founded in 2001 by philanthropist Pat Stryker, has committed $75,000 in matching funds to support the first year of the strategy. Colorado’s music industry currently contributes 16,300 music-based jobs to the state’s economy and generates $1.8 billion in annual revenue.

Boulder-based Core Learning Exchange and NuSkool teamed up to bring academically rich and culturally relevant digital lessons to all bored students looking for courses to which they can relate. NuSkool will distribute its standards-aligned educational materials via the Core Learning Exchange Mastery Learning Platform. Teachers can build these lessons into personal learning plans, group activities and digital badges documenting academic achievement.

Louisville-based environmental and industrial-measurement company Vaisala was awarded a three-year contract by American Airlines to supply lightning alerts using its Vaisala AviCast Lightning Alert System. The technology will be deployed at 26 maintenance locations and 25 regional airport locations at which American Airlines conducts flight operations.

McGuckin Hardware, a 61-year-old iconic independent hardware store in Boulder known for its eclectic and massive inventory, will discontinue its membership with the True Value co-op at the end of the year and start buying from the Ace Hardware co-op, Jan. 1. Co-ops are vendors that provide independent stores with the opportunity to pool their buying power to purchase bulk merchandise, saving money in order to compete with larger-scale big-box retailers. McGuckin’s was a member of the Ace co-op in the mid-1960s. It joined True Value in 1986, and was part of that co-op for 30 years.

EARNINGS

Advanced Energy Industries Inc. (Nasdaq: AEIS) reported a profit of $29 million for its third quarter that ended Sept. 30. The profit, which equated to 73 cents per share, improved on a profit of $23.3 million, or 57 cents per share, for the same quarter a year ago. The Fort Collins-based maker of power and control products used in semiconductors, flat-panel displays and other electronics, reported sales of $126.6 million for the quarter, up from $109.8 million for the same quarter a year ago. The company is expecting to generate revenue between $124 million and $134 million for its fourth quarter that will end Dec. 31.

Array BioPharma Inc. (Nasdaq: ARRY), a Boulder-based biopharmaceutical company, reported a loss of $28.6 million, or 20 cents per share, for the first quarter of its 2017 fiscal year that ended Sept. 30, an increase compared with a loss of $21 million, or 15 cents per share, for the same period a year ago. Array generated revenue of $39.3 million during the quarter, down from the $43.2 million it generated in the prior quarter, driven mainly by reduced reimbursements from Novartis, which is partnering on two cancer drugs — binimetinib and encorafenib — intended to treat melanoma. Research and development expense increased $25.6 million, compared with the first quarter of fiscal 2016. The increase was due to binimetinib and encorafenib expenses as Array transitioned activity from the Novartis agreements. During the quarter, Array completed an underwritten public offering of 21,160,000 shares of its common stock at a price of $6.25 per share, generating proceeds of $132.25 million, before underwriting discounts and commissions and offering expenses.

Ball Corp. (NYSE: BLL) announced, along with its third-quarter earnings, that the company will close a regional support center in Charlotte, N.C., in 2017. The facility was acquired in the Broomfield-based metal-can maker’s acquisition of rival Rexam. Ball officials said the merger figures to deliver $150 million of cost savings next year, with the planned $300 million in annual savings expected by 2019. Filing its first earnings report reflecting results of the combined company, Ball posted breakeven earnings for the third quarter, compared with a profit of $45 million, or 32 cents per share, one year earlier. Revenue came in at $2.8 billion, up from $2.1 billion a year earlier. The company’s Boulder-based aerospace segment contributed $204 million in revenue, the same as one year earlier, but the segment’s contracted backlog grew to more than $1.4 billion, indicating more jobs and more revenue for the segment going forward.

Bill Barrett Corp. (NYSE: BBG) shrunk its third-quarter net loss from $410.3 million a year ago to $26.3 million this year. The Denver-based company, a major oil and gas producer in Northern Colorado, posted its quarterly earnings report this week. The company’s net loss amounted to 44 cents per share versus $8.49 per share last year. Revenue for the quarter was $50.5 million, up from $49.7 million. The company reported an 8 percent decrease year-over-year in production volumes due primarily to the sale of some assets in Colorado and Utah. Capital expenditures were $8.1 million for the quarter, with company officials noting that bill Barrett did not operate a drilling rig for much of the quarter.

Biopharmaceutical company Clovis Oncology Inc. reported a loss of $65.6 million, or $1.70 per share for its third quarter that ended Sept. 30, and a loss of $278.4 million, or $7.24 per share, for the first nine months of the year. Boulder-based Clovis (Nasdaq: CLVS) continues to work on is main drug candidate – rucaparib for the treatment of ovarian cancer. Research and development expenses totaled $54.3 million for the third quarter and $196.7 million for the first nine months of 2016, compared with $76.1 million and $193.3 million, respectively, for the comparable periods in 2015. Clovis had $318.8 million in cash, cash equivalents and available-for-sale securities as of Sept. 30, and expects that amount to continue to fund operations into 2018.

Dynamic Materials Corp. (Nasdaq: BOOM) trimmed its third-quarter losses by roughly one-fourth versus the same period a year earlier, although sales declined 7 percent over the same period. The Boulder-based company posted a third-quarter net loss of $3.1 million, or 22 cents per diluted share, compared with a net loss of $4.2 million, or 30 cents per share last year.

Encision Inc., a medical-device company based in Boulder, reported a loss of $240,000, or 2 cents per share, for the second quarter of its fiscal 2017 that ended Sept. 30. Encision (OTC: ECIA) designs and markets surgical instruments that prevent stray energy burns in minimally invasive surgery. The company posted quarterly revenue of $2.15 million, compared with revenue of $2.3 million and a loss of $184,000 for the same period a year ago. For the first six months of its fiscal year, Encision posted revenue of $4.43 million and a loss of $338,000, or 3 cents per share.

FirstBank reported a net income of $139.8 million in its third quarter that ended Sept. 30.

The $139.8 million was a 7 percent increase compared with the same period a year ago. Total assets grew to $16.6 billion, an increase of 10.4 percent, and total deposits increased to $14.9 billion, up 10.3 percent. Net loans totaled $9.3 billion, an increase of 9.1 percent compared with the same period last year. FirstBank operates more than 120 locations in Colorado, Arizona and California, including branches in Boulder, Fort Collins, Greeley, Broomfield, Longmont, Louisville, Loveland and Windsor.

Gaia Inc. (Nasdaq: GAIA), a video streaming service and online community geared toward lifestyle content, saw revenue climb 27 percent in the third quarter thanks to a huge boost in paid subscribers. Louisville-based Gaia in its third-quarter earnings report posted third-quarter revenue of $4.5 million, up from $3.5 million for the quarter a year earlier. That was due largely to 35 percent growth in streaming revenue and a 46 percent uptick in paid subscriptions. Gaia posted GAAP net income of $100.4 million, but that figure included income from discontinued operations. Gaia during the third quarter completed the sale of its branded consumer-products business. The company posted a net loss from continuing operations of $151,000, or 1 cent per share, compared with a loss from continuing operations of $660,000, or 3 cents per share, in last year’s third quarter.

Heska Corp. (Nasdaq: HSKA) reported a profit of $13.7 million, or 45 cents per share, for its third quarter that ended Sept. 30, an 18 percent increase compared with $11.6 million during the same period a year ago. The Loveland-based seller of veterinary diagnostic and specialty products, mainly for dogs and cats, posted revenue of $33.4 million for the quarter, a 19 percent increase compared with $28 million in the third quarter of 2015. For the first nine months of 2016, revenue was $90.5 million, up 21 percent compared with $74.8 million for the first nine months of 2015, and profit is at $37.8 million. As of Sept. 30, Heska had $9.2 million in cash and $30.6 million of working capital. Stockholders’ equity increased to $79.8 million, up from $63.5 million as of Dec. 31, 2015.

Nivalis Therapeutics Inc., a clinical-stage pharmaceutical company based in Boulder, reported a loss of $7.4 million, or 48 cents per share, for its third quarter that ended Sept. 30. Nivalis (Nasdaq: NVLS) has yet to generate revenue as its drug, cavosonstat, intended to treat people with cystic fibrosis, continues its way through clinical trials. The quarterly loss compared to a loss of $6.1 million, or 39 cents per share, during the same quarter a year ago. Cash used for operations was $7.5 million during the third quarter and $21.1 million for the nine months year-to-date. As of Sept. 30, Nivalis had $66.2 million in cash and marketable securities. Nivalis has no outstanding debt, and there are 15.5 million shares of common stock issued and outstanding.

Noodles & Co., a fast-casual restaurant chain based in Broomfield, reported a loss of $9.8 million, or 35 cents per share, for its third quarter that ended Sept. 27, the same amount lost during the third quarter of last year. Noodles (Nasdaq: NDLS) posted a 4.6 percent increase in revenue of $122.7 million for the quarter, up from $117.3 million for the same quarter a year ago. For the first three quarters, revenue increased $19.8 million, or 5.8 percent, to $358.1 million, compared with $338.3 million in the first three quarters of 2015. The company reported a loss of $26.3 million in the first three quarters, compared with a loss of $9.5 million in the first three quarters of 2015.

PDC Energy Inc. (Nasdaq: PDCE) trimmed its third-quarter net loss from $41.5 million a year ago to $23.3 million this year. Net loss for the Denver-based company, which produces oil and natural gas mostly in Northern Colorado, came out to 48 cents per diluted share, down from a loss of $1.04 per share last year. But while production was up 39 percent versus a year earlier, third-quarter revenue was only $163.9 million, down from $231.1 million for the same period last year. Capital expenditures in the third quarter were $118 million, down from $130.9 million last year. Production hit 6 million barrels of oil equivalent, or 65,263 barrels per day.

Chicken processing giant Pilgrim’s Pride Corp. (Nasdaq: PPC) saw third-quarter earnings per share slide 26.4 percent versus the same period a year ago. Greeley-based Pilgrim’s Pride reported third-quarter net income of $98.7 million, or 39 cents per diluted share, but that was down from $137.1 million, or 53 cents per share for the third quarter of last year. Revenue, meanwhile, dipped 3.8 percent, from $2.11 billion last year to $2.03 billion this year.

Oil and natural gas producer Synergy Resources Corp. (NYSE: SYRG) reported a decrease in revenue but also a narrowed net loss for the third quarter ending Sept. 30. Denver-based Synergy, which focuses its drilling efforts on the Wattenberg Field in Northern Colorado, posted a net loss of $19.2 million, or 10 cents per diluted share. That’s down from a loss of $77.9 million, or 74 cents per share, for the same period a year earlier. Revenue came in at $26.2 million for the quarter, down from $33.4 million a year ago. The decrease in sales, company officials said, was due to decreased production volumes and lower crude oil prices.

KUDOS

Military Times ranked Colorado State University sixth nationally among four-year colleges and universities on its “Best for Vets: Colleges 2017” rankings. The ranking is seven spots higher than CSU landed last year, and CSU is the only school in Colorado to make the top 50.

Mike DePriest, president and owner of Longs Peak Landscape in Longmont, and Jason Hevelone, owner of CopperMuse Distillery in Fort Collins, are among 19 small-business executives in Colorado who recently graduated from the Small Business Administration’s Emerging Leaders Program. Graduates spent seven months and more than 100 hours of work and evening class time in the MBA-style boot camp run by the SBA’s Colorado District Office.

FCI Constructors Inc. in Frederick and Greeley-based construction firms Roche Constructors and Hensel Phelps received 2016 Excellence in Construction Awards from the Rocky Mountain Chapter of Associated Builders and Contractors Inc. FCI received first place in the $10 million to $20 million commercial category for the TIC Training Center and Offices project. Roche Constructors Inc. took first place in the $5 million to $10 million institutional category for its work on the Emily Griffith Technical College Shops. Hensel Phelps took second place in the $10 million to $25 million health-care category with the Federico F. Peña Southwest Family Health Center and Urgent Care project. In all, 24 awards were presented Oct. 21 in Denver.

Western Disposal Services, a Boulder-based company offering residential and commercial trash, recycling and composting services, received two safety achievement awards by insurer The Hartford Financial Services: a Distinguished Fleet Safety Award and a Safety Milestone Award.

Lightning Hybrids, a designer and manufacturer of the hydraulic hybrid Energy Recovery System for medium- and heavy-duty fleet vehicles, was named 2016 Cleantech Breakout Company by the Colorado Cleantech Industries Association. The Loveland-based company was recognized for expanding adoption of clean-vehicle technologies. Lightning Hybrids also was honored for its leadership in advancing cleantech job creation, successful fundraising efforts, company growth, innovation, and ability to scale technology. Agribotix was named Company of the Year, Xcel Energy was named High-Impact Cleantech Company of the Year, Adrian Tuck was named Cleantech Innovator of the Year, and state Sen. Owen Hill, R-Colorado Springs, was named Legislator of the Year.

Dr. Robin Downing received the Dr. Erwin Small Distinguished Alumni Award from the Veterinary Medical Alumni Association and the College of Veterinary Medicine of the University of Illinois at Urbana-Champaign. Downing has been owner and medical director of Windsor Veterinary Clinic for 25 years, founded The Downing Center for Animal Pain Management and has served as the center director/veterinarian for 10 years.

High Country Beverage, a family-owned and community-focused beer distributor based in Loveland, was honored by Heineken USA with the 1864 Award for Responsibility and Sustainability on Oct. 20 at the HUSA annual National Distributor Conference in Chicago.

Boulder’s sandstone “totems” or columns demarcating intersections along West Pearl Street are receiving national recognition, including a “Best in Show” and a first-place award from the 2016 World Sign Association Design Competition at the national conference in Memphis in October. They also received an award from the Art Directors Club of Denver Annual Show in the 3-D environmental category. Designed by Boulder-based Vermilion and fabricated by Windsor-based DaVinci Sign Systems, the six illuminated columns are part of the city’s recent streetscape renovation by Mundus Bishop along West Pearl, including wider sidewalks, new landscaping and stone street furniture.

The Home Builders Association of Northern Colorado on Oct. 13 announced the winners of this year’s NOCO HBA Parade of Homes, which was held over two weekends in September, covering homes from Platteville to Wellington. PJL Schuman won for best overall home, best floor plan and best green home, and also received the Xfinity Smart Home award. Custom On-Site won for best architectural exterior and best craftsmanship, HighCraft Builders won for best kitchen, WestMark Homes was honored for best master suite, Toll Brothers was honored for best landscaping, and DR Horton Glendive took the prize for best outdoor space.

MERGERS AND ACQUISITIONS

CenturyLink (NYSE: CTL) plans to acquire Broomfield-based Level 3 Communications Inc. (NYSE: LVLT) for roughly $25 billion in cash and stock, a move that means the loss of a major corporate headquarters for Colorado as well as the possibility of significant job cuts. While they said the merged firm will maintain a significant presence in Colorado, the combined headquarters will be in CenturyLink’s home of Monroe, La. CenturyLink plans to pay Level 3 shareholders $26.50 per share in cash, plus 1.4286 shares of CenturyLink stock for each share of Level 3 they own. CenturyLink shareholders will own 51 percent of the combined company, while Level 3 shareholders will wind up owning 49 percent.

Mountainside Medical, a Boulder-based medical-device company, was acquired by Tecomet Inc., based in Wilmington, Mass. Terms of the transaction were not disclosed. Mountainside, which develops precision machined components for the minimally invasive market, employs more than 100 people in Boulder.

Boulder-based biopharmaceutical company Miragen Therapeutics Inc. plans to become a publicly traded company through a sort of reverse merger with California-based Signal Genetics Inc. (Nasdaq: SGNL). The deal includes a $40 million concurrent financing from existing and new Miragen investors that will help the company advance clinical trials for a pair of drug candidates. Signal is a molecular diagnostics company that sells a test for multiple myeloma. Under terms of the deal with Miragen, Signal plans to sell its technology. Signal will then, through the issuance of new shares of common stock, acquire Miragen in an all-stock transaction that results in Miragen shareholders becoming holders of 96 percent of Signal stock. But the merged company will subsequently change its name to Miragen  Therapeutics Inc. and its ticker symbol on the Nasdaq exchange to MGEN. Signal directors and executives will resign from the merged company, which will move forward under Miragen’s current management team, with William Marshall serving as president and chief executive. All eight members of the board of directors will be appointed by Miragen, and the company will operate out of Miragen’s Boulder headquarters. The deal, which has been approved by both companies’ boards, is expected to close during the first quarter of next year.

Overland Park, Kan.-based Midwest Trust Co. acquired Investors Independent Trust Co., a wealth-management firm based in Boulder. Financial terms of the deal were not disclosed. Investors Independent Trust Co., a subsidiary of Independent Investment Services Corp., is a private wealth-management firm led by president and chief executive Herb McPherson. The company will continue to operate with the same name and team members at 507 Canyon Blvd.

Golden-based Centerline Solutions LLC acquired Boulder Technology LLC, a software design and development firm based in Boulder. Financial terms of the deal were not disclosed, but all of Boulder Technology’s intellectual property for internal systems and emerging SaaS products has been transferred to Centerline Solutions.

Melody Health Insurance Inc. in Denver plans to acquire Colorado Choice Health Plans, a 45-year-old nonprofit based in Alamosa that has 2,500 customers in Larimer and Weld counties. The deal is pending regulatory approval from the Colorado Division of Insurance and the Colorado Attorney General. Colorado Choice will become a wholly owned for-profit subsidiary of Melody. Terms of the deal were not disclosed, but Melody Health will provide capital for Colorado Choice to serve its membership while expanding into new markets.

Amadeus Consulting, a Boulder-based provider of custom software development services founded by Lisa Calkins and John Basso in 1994, was acquired by Walnut Creek, Calif.-based software-engineering firm Exadel. Terms of the deal were not disclosed.

Amadeus will become part of Exadel, and Calkins said her company will switch over to the Exadel branding over the next six months. The Amadeus office in east Boulder, as well as the local staff and leadership, will remain, although some finance functions will be shifted to California. Calkins is staying onboard as chief strategy officer of Exadel, and will continue to run the Boulder office. She expects to hire at least 10 more employees for the Boulder office over the next 12 months.

Flatirons Solutions, which employs 70 people in Boulder, acquired Niwot-based competitor TechPubs Inc. for an undisclosed sum. Founded in 2008, TechPubs makes software to help airlines store, share, distribute and update technical documentation and helps make sure it maintains regulatory compliance. TechPubs’ local operations will be moved into Flatirons’ east Boulder office, while the two companies’ operations in Shanghai also will be combined.

MOVES

Scion Aviation LLC, which is rapidly outgrowing its Loveland facility, will this fall move its final assembly, painting and delivery operations to a 43,000-square-foot building at the Cheyenne Regional Airport in Wyoming. Scion, a contract manufacturer of parts and airframes for companies that make both unmanned and full-scale aircraft, currently operates out of a 23,000-square-foot building at 3693 County Road 30 in Loveland and employs 20 people. The company plans to keep its research and development and tooling operations at its current site, but also is also seeking a location where it can build a 50,000-square-foot clean room — with room to grow to 400,000 square feet or more — that would be used as the main production facility for the carbon-fiber parts.

Retail Control Systems moved its Fort Collins office to 324 E. Oak St. Restorations and renovations to convert the late-Victorian style home on the property — known as the Mosman House or Andrews House and built around 1892 — to RCS’ offices were completed in October.

Olsson Associates, a full-service engineering design firm, moved its Loveland office Oct. 31 to a new, larger space at 1880 Fall River Drive, Suite 200. The new office is near the old location.

OPENINGS

The owners of Happy Lucky’s Teahouse and Treasures will celebrate the opening of a second location in Fort Collins on Nov. 18-20. George and Kari Grossman opened their first location in 2009 at 236 Walnut St. in Old Town. The second location is at 166 Council Tree Ave. in the Front Range Village on Harmony Road.

A former Sports Authority store in Boulder got new life Oct. 27 when New York-based retailer West Elm opened an 11,000-square-foot store at the Twenty Ninth Street shopping district. West Elm sells a mix of furniture, home décor and kitchen items. The new store is slated to employ 30 people. Through the company’s LOCAL program, 10 Colorado-based makers and designers will be able to sell their products with the store’s holiday assortment.

Aficionados of craft beer, distilled spirits, wine, mead and cider now have another venue at which to sample their favorite beverages, including many from Colorado producers. The Barrel, a bar concept using shipping containers, opened on the upper-level of the Central Plaza at Twenty Ninth Street in Boulder. Loveland couple Ingrid and Lou Bush, who also own a similar setup in Estes Park, launched the project after being approached by Twenty Ninth Street officials. The Boulder version includes 64 taps, including two dedicated lines each for mead, cider and wine, including about 70 percent Colorado brands.

Jamie and Marie Fox, founders of Gunbarrel Brewing Co., signed a lease on a 20,000-square-foot facility in the Gunbarrel area of Boulder for their self-funded brewery. They plan to have Gunbarrel Brewing up and running during the first quarter of 2017 at 7088 Winchester Circle, north of Lookout Road and west of North 71st Street. It will have a 10-barrel brewhouse built by JV Northwest of Canby, Ore., and a one-barrel pilot system for experimentation, research and development. The facility will include a large taproom and a beer garden. The brewery will host food trucks, live performances and beer-centric educational events.

A Minneapolis-based data-security company has opened an office in Broomfield and is looking to fill jobs in cloud operations, product management and engineering. Code42’s office in Broomfield is at 11800 Ridge Parkway.

London-based software company TestPlant, which has had its developers based in Boulder since the company was formed in 2008, established a new Americas headquarters locally. TestPlant, which most recently had both sales and development offices in Boulder in different locations, moved over the summer into a 7,800-square-foot space at 2995 Wilderness Place. The new office will host a range of functions, including sales, human resources, presales, support, development and marketing.

PRODUCT UPDATE

Boulder-based lifestyle technology startup Silvernest is rolling out a new version of its online roommate-matching service for aging adults. New features has been added that make it easier for homeowners to navigate the system, view unlimited matches and find compatible, long-term housemates.