Author: Press Room

IPO Investing Declines

10 August 2023
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Companies in the United States that had hoped to become publicly traded have been forced to postpone their plans in part due to the worsening economic climate. This has translated to the U.S. recording one of the biggest historical slumps with initial public offerings (IPO).

In particular, according to data acquired and calculated by Finbold on February 16, the U.S. recorded 181 IPOs in 2022, representing a slump of a whopping 82% from 2021’s 1,035. Notably, the number of IPOs in 2021 represents a surge of about 115% from 2020’s 480. Between 2002 and 2005, the lowest number of IPOs was registered in 2008, at 62, amid the financial crisis.

A breakdown of the 2022 IPO quarterly distribution indicates that the number of companies going public steadily declined as the economy’s fortunes continued to dim. For Q1 2022, there were 80 IPOs, dropping to 18 in the last three months of the year.

Analysis: New Home Builders Shift Focus

10 August 2023
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By Victor Skinner,  The Center Square

Rising interest rates and construction costs, along with demand for more affordable options, pushed new home builders to shift focus in 2022, according to recent analysis.

Microdata from the Survey of Construction 2022 analyzed by Zillow illustrates a shift from primarily single-family home construction before and during the pandemic to more smaller, taller, modular buildings that cost less to produce.

“They’re responding to the higher interest rate environment … by basically building smaller, less expensive, taller units and they’re leaning into higher density,” Orphe Divounguy, senior economist at Zillow, told The Center Square.

Following double-digit increases for construction of single-family homes in 2020 and 2021, new construction of those homes fell by more than 10% in 2022, the first year of decline since 2011. Detached home construction declined by 12%, while attached single-family homes were up 2.9%.

Builders also focused on homes with less than three bedrooms, with new construction up 9.3% from 2021 to 2022. New starts for those with three bedrooms or more dropped 13.1%, according to the analysis.

Other trends included a 4.9% increase in single-family homes of more than two stories, compared to a 10.8% decline in starts of homes with two stories or fewer, and a median new single-family home size that was 100 square feet smaller than in 2021.

New homes that are constructed off site also increased by 23.9% between 2021 and 2022, while on-site single-family home construction declined by 11.2%. Zillow reports the uptick in off-site activity was likely in response to tight, unpredictable supply chains and rising costs for builders.

“Manufactured homes (are) more efficiently built – less waste, more climate friendly, and they’re essentially cheaper to build,” Divounguy said. “That’s a good thing for homebuyers.”

Baby boomers looking to downsize, first-time homebuyers, and others searching for more affordable options will benefit from the shift, he said.

“They’re basically responding to a demand for more affordable units,” Divounguy said.

Improving affordability in the market more broadly, however, means “builders have to be able to continue building at a rapid pace,” he said, and challenges remain.

Montana Highlights August 1, 2023

10 August 2023
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The Milwaukee Bridge west of Terry has been ordered closed immediately by the Montana Department of Transportation as the deteriorating deck conditions have been deemed a significant hazard for public safety. The sudden closure has left a lot of questions both for people who use the bridge to reach the other side of the Yellowstone River. The Prairie County commissioners declared the main concern is finding a way to get the bridge reopened. Several people who operate agriculture land on the other side of the river, reminded the Commissioners that the use of the bridge will increase greatly when harvest and cattle roundup arrive.

Montana Fish, Wildlife & Parks is advising anglers that portions of the Beaverhead River, Bitterroot River and the entire Jefferson River are closed to fishing daily from 2 p.m. to midnight. The hoot-owl restrictions are issued for: Jefferson River – from the Missouri River to the confluence of the Big Hole River and Beaverhead River, Beaverhead River –from the confluence of the Big Hole River to Anderson Lane. Bitterroot River – from Veterans Bridge at Hamilton to the confluence of the East and West Forks Bitterroot River

The Break Room, a beer and wine bar on West College Street near 11th Avenue, in Bozeman, opened recently. The menu features 10 draft beers, four draft wines, an old-school soda fountain, and bar comfort food including pasties, nachos and beer brats. The lounge was opened by Seth Cooper and Cassie Colombo, who owns Colombo’s Pizza.

The Richland County Sports Complex has a new home in Sidney. It was relocated from the cattle barn at the Richland County Fairgrounds to the Cenex-Western Choice. The official opening date is August 7. The sports complex is used for baseball and softball practices year round.

A group of business organizations in Kalispell are raising funds to pay for private security guards to patrol the downtown area of the City in an effort to deter vagrancy, plus customer and employee safety. The guards would protect business interests and connect people in the midst of mental health or addiction issues with social service providers. A notice being circulated describes the business groups are exploring ways to redirect funds that might be given to panhandlers to fund the community patrol efforts and additional homeless outreach.

Paddle Board Outfitters in Somers has grown from a modest start renting out paddle boards to a into a full-service paddle board, kayak, wave runner, and boat rental business. N Owner, Chris Hogan, began the company seven years ago.

Yellowstone National Park hosted 847,864 recreation visits in June 2023. This is a 61% increase from June 2022, the month of the historic flood (525,363 recreational visits), and an 8% increase from June 2019 (781,853 recreation visits). Thus far in 2023, the park has hosted 1,493,510 recreation visits, up 19% from 2022 (1,258,834 recreation visits), and up 10% from 2019 (1,358,629 recreation visits).

406 Cakes and Cravings, of Polson, opened recently and is owned by Aurora Doll.

The Big Hole River is experiencing a large algal bloom. The Montana Department of Environmental Quality has taken water quality samples and expects to have results back by the end of August. A visual assessment of algae growth reports moderate to high growth from Melrose to Glen.

Butte Central Catholic Schools has introduced Denise Chrest as its new high school principal. A Butte native, Chrest has been the superintendent and K-12 principal in Moore for the last 13 years. Chrest replaces J.P. Williams, who was principal of the high school from 2018-2022. 

New federal oil and gas leasing rules proposed by BLM would have a negative effect on Montana’s marginal oil plays. The long-anticipated rules changes announced recently include a cleanup bond of $150,000 per well, up from $10,000 per well. Conservationists and the petroleum lobby say the higher bonding amount would hamper leasing in low-probability areas, which is make up most of Montana oil opportunities.

Montana native Jared Swarthout, is the current owner of Ping-A-T Lures, a company originally started in the late 1960s by his late grandfather, Gerry Swarthout, in Pinckney, Michigan, a city west of Detroit. Grandfather Gerry received a patent for the unique, self-righting lures in 1971 after perfecting its design. The lure is designed to flip upside down the faster an angler reels a line in order to better prevent snags under the water. The company is now located in Fallon

The Gallatin Association of Realtors recently named Cindi Siggs as its new Chief Executive Officer following a nationwide search. Siggs previously worked with the Realtors of South Central Kansas (RSCK) and the Kansas Auctioneers Association.

The Museums Association of Montana (MAM) announced the retirement of Executive Director Deb Mitchell after 16 years of service. Coinciding with her retirement, Mitchell has accepted a new position as the Executive Director of WorldMontana. Mitchell also retired from the Montana Historical Society eafter 23 years of service.

Montana Gov. Greg Gianforte wants the federal government to declare natural disaster areas in 11 counties due to drought. With unusually low snowpack and hot, dry conditions in northwest Montana. The 11 counties are Flathead, Lincoln, Glacier, Toole, Sanders, Lake, Pondera, Mineral, Missoula, Ravalli and Sheridan counties.

In North Dakota, Vertipads Inc. is constructing the ground infrastructure needed for unmanned aircraft systems (UAS) to drop off and deliver packages beyond visual line of sight (BVLOS). The company is designing two vertiports to service drones used for package deliveries. Vertipads will utilize Vantis, North Dakota’s statewide UAS network, to fly BVLOS. Vantis provides the ground infrastructure for UAS, such as radar, air traffic control, and operations centers.

The North Dakota Petroleum Council (NDPC) is bringing its annual meeting back to Watford City September 19-21.

Manufacturers Push Against ESG

10 August 2023
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The National Association of Manufacturers has gained some traction in pushing back against ESG regulations. The House Financial Services Committee, which spent the last month holding hearings about environmental, social and governance policies that impact American businesses — passed proposed legislation that included measures to protect manufacturers and investors.

NAM President and CEO Jay Timmons reported that NAM has been fighting for manufacturers “every step of the way.”

The issue: Manufacturers in the U.S. are at the forefront of climate stewardship and innovation even as they power the U.S. economy, yet politically motivated activists and proxy advisory firms are making it difficult for manufacturers to succeed.

Recent actions from the U.S. Securities and Exchange Commission have empowered these groups. From unworkable ESG disclosure mandates to new standards encouraging shareholder activism to a lack of oversight of proxy firms, manufacturers are getting squeezed.

NAM has pressed Congress to curb the impact of activists, proxy firms and the SEC on public company governance.

 “Congress must step in to depoliticize the business decisions that impact the lives and life savings of millions of Americans,” said Timmons. “Manufacturers are determined to create jobs, lead the economy and improve the quality of life for all Americans. We are counting on [Congress’] leadership to counter the SEC’s regulatory overreach and help us achieve these goals.”

The House committee has embraced NAM’s proposed reforms, a huge victory for manufacturers across the United States. The legislation approved by the committee would:

* Prevent activists from hijacking the proxy ballot in pursuit of agendas unrelated to long-term business growth and shareholder value creation;

* Rein in proxy advisory firms and limit their outsized influence on corporate governance;

* Reinforce asset managers’ fiduciary duty to Main Street investors and retirees; and

* Ease ESG disclosure mandates by requiring that public companies only report information that is material to their shareholders.

IPO Investing Declines

9 August 2023
Press Room
No comments

Companies in the United States that had hoped to become publicly traded have been forced to postpone their plans in part due to the worsening economic climate. This has translated to the U.S. recording one of the biggest historical slumps with initial public offerings (IPO).

In particular, according to data acquired and calculated by Finbold on February 16, the U.S. recorded 181 IPOs in 2022, representing a slump of a whopping 82% from 2021’s 1,035. Notably, the number of IPOs in 2021 represents a surge of about 115% from 2020’s 480. Between 2002 and 2005, the lowest number of IPOs was registered in 2008, at 62, amid the financial crisis.

A breakdown of the 2022 IPO quarterly distribution indicates that the number of companies going public steadily declined as the economy’s fortunes continued to dim. For Q1 2022, there were 80 IPOs, dropping to 18 in the last three months of the year.

Current Economic Conditions Have Small Business Owners Pessimistic about Future Business Conditions

9 August 2023
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According to National Federation of Independent (NFIB) Business’ Small Business Economic Trends report, small business owners continue to face challenging economic conditions. The Small Business Optimism Index increased slightly by 1.6 points in June but remains below the 49-year average of 98 for the 18th consecutive month. Labor market concerns and inflation are at the forefront of small business owners’ worries, with 24% of owners reporting inflation and another 24% citing labor quality as their top business concern.

“Halfway through the year, small business owners remain very pessimistic about future business conditions and their sales prospects,” said NFIB Chief Economist Bill Dunkelberg. “Inflation and labor shortages continue to be great challenges for small businesses. Owners are still raising selling prices at an inflationary level to try to pass on higher inventory, labor, and energy costs.”

According to NFIB’s monthly jobs report, 59% reported hiring or trying to hire in June, down 4 points from May. A seasonally adjusted 42% of owners reported job openings they could not fill in June. This trend is especially pronounced in the manufacturing, construction, and transportation sectors. Of the 59% of owners who reported hiring or trying to hire in June, 92% had few or no qualified applicants for the positions they were trying to fill. Thirty-three percent of owners reported few qualified applicants for their open positions, and 21% reported none.

Despite labor-related issues, small business owners continue to look for ways to grow their companies. An elevated net 15% of owners plan to create new jobs in the next few months, down four points from May. Attracting and retaining applicants is a priority for small business owners, with a net 22% of owners planning to raise compensation in the next three months, unchanged from May.

Over the next six months, a net negative 40% of owners expect better business conditions, which is a 10-point increase. A net negative 10% of owners reported higher nominal sales in the past three months, down two points from May. A seasonally adjusted net 29% of owners reported raising average selling prices in June. Although this is three points lower than in May and the lowest since March 2021, this number is still at an inflationary level. Forty-three percent of owners reported higher average prices in June with price hikes most frequent in the retail, construction, and wholesale sectors.

The NFIB Research Center has collected Small Business Economic Trends data with quarterly surveys since the fourth quarter of 1973 and monthly surveys since 1986. Survey respondents are randomly drawn from NFIB’s membership. The report is released on the second Tuesday of each month. This survey was conducted in June 2023.

Crucial Business Legislation Re-introduced in Both Chambers

9 August 2023
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On July 18, the Main Street Tax Certainty Act was re-introduced in the U.S. House of Representatives. Representatives Lloyd Smucker (R-PA) and Henry Cuellar (D-TX) introduced the legislation in the House and Senator Steve Daines (R-MT) previously introduced it in the U.S. Senate. The legislation would make the crucial Small Business Deduction permanent, which is currently set to expire at the end of 2025, reports the National Federation of Independent Business (NFIB).

“Passing the Main Street Tax Certainty Act would stop an enormous tax increase currently scheduled to strike small businesses at the end of 2025,” said Brad Close, NFIB President. “The 20% Small Business Deduction is set to expire in 2025, and without it, small businesses will have to limit their plans to grow, invest, and hire. By making the deduction permanent, small business owners will have the tax certainty they need to make business decisions about their future. We are encouraged that this important legislation has been introduced in both the House and the Senate and urge Congress to consider it.”

The 20% Small Business Deduction (Section 199A) allows pass-through small businesses the ability to deduct up to 20% of qualified business income and is scheduled to expire at the end of 2025. The Main Street Tax Certainty Act would make this critical tax deduction permanent for small business owners across the country.

“Pennsylvania small business owners thank Rep. Smucker for re-introducing this critical legislation,” said Greg Moreland, NFIB Pennsylvania State Director. “The Small Business Deduction has been a crucial tax deduction for small business owners in the Commonwealth as it has allowed owners to reinvest in their business and employees. We ask Congress to pass the Main Street Tax Certainty Act and make the Small Business Deduction permanent.”

In a recent NFIB member ballot, 91% said they support permanently extending the expiring provisions of the Tax Cuts and Jobs Act such as the 20% Small Business Deduction. Advocacy by NFIB members was instrumental in securing the 20% Small Business Deduction, and NFIB will continue advocating to have the deduction made permanent. NFIB Pennsylvania member David Cranston testified before the U.S. Senate Finance Committee in 2018 to explain to lawmakers how the Small Business Deduction has benefited his small business. In NFIB’s 2019 tax survey, 81% of small business owners believe the Small Business Deduction is important.

According to NFIB’s 2021 tax survey, nearly half of small business owners (48%) reported the uncertainty of these expiring tax provisions is impacting their current or future business plans. Earlier this year, NFIB Pennsylvania member Warren Hudak and Georgia member Alison Couch testified before Congressional committees sharing their small business tax stories. NFIB Vice President of Federal Government Relations Kevin Kuhlman also recently testified before the U.S. House Budget Committee on how Congress can mitigate economic challenges on small businesses by making the Small Business Deduction permanent. This month, NFIB joined a coalition letter with over 160 other associations to encourage Congress to pass the Main Street Tax Certainty Act.

Credit Cards Need Competition

9 August 2023
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The National Federation of Independent Business (NFIB), the nation’s leading small business advocacy organization, released a new video featuring small business owners explaining the impact the Credit Card Competition Act would have on their Main Street businesses if passed into law.

The Credit Card Competition Act seeks to ensure competition in the credit card processing market by allowing small businesses the freedom to choose between multiple credit card networks. Without this legislation, businesses everywhere are subjected to ever-rising interchange fees set by large credit card companies in a closed market free from competition. According to a recent NFIB member ballot, 92% of NFIB member small business owners believe that businesses should have the right to choose between multiple credit card processing networks. This legislation would help preserve their freedom of choice by injecting much-needed competition into the credit card processing market, allowing small business owners to choose the option that is best for their business.

Excerpts include:

“I think one thing people forget about all these costs and fees that they think businesses pay is that it’s the consumers who end up paying these fees. At the end of the day, if we can reduce those fees, we can stabilize costs,” said David Henrich, a small business owner from Minnesota.

“The Credit Card Competition Act, I think, would be very beneficial to our business. We just recently started accepting credit cards, and we have noticed that that ‘swipe fee’ has been very expensive for us,” said Renea Jones, a small business owner from Tennessee.

“I don’t have that free choice to go out and choose who I give my money to. It’s already taken away from me on the third of every month before I have the choice to come back and say, ‘Wait a minute, let’s look at this and negotiate a better rate,’” said Jeff Hastings, a small business owner from North Carolina.

Camping World Opens in Lockwood

9 August 2023
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By Michael J. Marino, Yellowstone County News

Camping World just off Interstate 90 near Lockwood has opened for business, marking the RV dealer’s first store in Montana and its 199th store in the world.

Founded in 1966 and headquartered in Lincolnshire, Illinois, Camping World provides a variety of RV products and services. Devin Card, General Manager of the new Billings store, said that in addition to selling Recreational Vehicles and related items, they have 14 service bays.

With three other RV dealers just a stone’s throw away, one might wonder what strategy Camping World executives could have been employing when they decided to locate in Billings.

Card said he is not aware of all the details behind the company’s decision, but, “Billings draws in a large area of people that are traveling here on the weekends. People come to Billings for its shopping, [and] the hospitals ….I think that’s why you see so many RV places [in Billings],” he continued.

“As we enter Montana, the Billings community is a great place to begin,” said Camping World Chairman and CEO Marcus Lemonis. “It’s our goal to increase our store count by 50% over the next five years, through a combination of acquisitions, new store openings, and manufacturer exclusive locations.”

BLM Releases Oil/Gas Leasing Regulations

9 August 2023
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The Bureau of Land Management (BLM) has released a proposed oil and gas rule that would affect how fossil fuels are leased and produced on national public lands. The rule would implement the Inflation Reduction Act’s reforms of the oil and gas leasing system.

BLM claims the proposed rule will cut down on speculative leasing in the onshore program so that rather than producing fuels, those lands can instead be managed for other uses like conservation and recreation. Finally, the rule would reform the bonding rates that oil and gas companies must post in order to ensure public lands are cleaned up when companies abandon wells.

The Center for Western Priorities released the following statement from Policy Director Rachael Hamby:

“Congress overhauled the oil and gas leasing system last year. Now it’s up to the Interior Department to make those reforms stick and prevent them from being undermined by future administrations. Today’s draft rule is a major step in that direction. The recent oil and gas lease sale in Wyoming shows that the industry already has more public land under lease than they know what to do with. The least they can do is give taxpayers a fair return when they lock up more acres and profit off publicly-owned resources.”

“It’s imperative that strong bonding reforms make it through the rulemaking process intact. The Interior Department just announced it will spend hundreds of millions of taxpayer dollars cleaning up oil and gas wells abandoned by irresponsible companies. This can never happen again. Drillers must post bonds sufficient to clean up after themselves the next time an oil boom inevitably goes bust.”