Mohawk Valley Chamber is energized for growth

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Kinetic energy: The energy possessed by a body because of its motion, equal to one-half the mass of the body times its speed — American Heritage Dictionary. UTICA — Pamela Germain Matt is the embodiment of kinetic energy. Matt, the executive director of the Mohawk Valley Chamber of Commerce, is a slight woman, thus […]

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Kinetic energy: The energy possessed by a body because of its motion, equal to one-half the mass of the body times its speed — American Heritage Dictionary.

UTICA — Pamela Germain Matt is the embodiment of kinetic energy. Matt, the executive director of the Mohawk Valley Chamber of Commerce, is a slight woman, thus requiring, according to the law of physics, high speed to achieve her dynamism. Because she also never slows down, one is reminded of the energizer bunny.

Matt, an attorney, brought her energy to the chamber position in March 2012, when she became the first woman in 115 years to head the nonprofit business group. “I’m passionate about everything,” Matt declares … “I came to the chamber to grow the membership and to make changes.” The chamber is comprised of business and business-oriented members dedicated to the development of a prosperous economic climate that enhances commercial growth and the quality of life in the Mohawk Valley, according to the chamber’s vision statement on its website.

In her short tenure, the Mohawk Valley Chamber has made a number of changes. “Last June, we joined with Centerstate CEO in Syracuse to form an alliance, which includes the Cayuga [County] Chamber [of Commerce]. Jane Amico, Andrew Fish, and I discuss [monthly] regional issues, work together to recruit businesses to the area, and coordinate our legislative agenda to provide a unified voice for the region’s business community … The Mohawk Valley Chamber partners with Benefits Specialists of New York, an arm of Centerstate CEO, to offer our members health-care benefits under a marketing/referral agreement,” says Matt. Amico is vice president of chamber services at CenterState CEO while Fish is executive director of the Cayuga County Chamber.

Matt is also energized by recognition of her chamber at the national level. “Because of our accreditation last year by the U.S. Chamber of Commerce, we have been chosen to sponsor the U.S. Chamber’s Center for Women in Business event on October 2 here in Utica. The program focuses on women in leadership roles. It’s a great honor both for the Chamber and for the community,” says Matt.

Change is also apparent in the increased number of women members. “Women are playing a greater role in the [Mohawk Valley] Chamber,” continues the executive director. “We see more [females] at our Business After Hours events, which always draw more than 100 people. They participate in our cash mobs, where our members show up at a local business with $20 to spend on a member-merchant.”

Change can be seen in the recent launch of “Catalyst, Watch US Grow.” The group is comprised of area young professionals who want to promote a positive image of the region, promote local pride, create events for their peers, and foster professional development. The new organization is headed by a 13-member steering committee.

“Helping business to prosper in a sluggish economy and growing regulatory oversight is a challenge,” says Matt. “But we must be doing something right. Our membership is growing; it’s now at 700 members. [On average], we have 10 new members join the chamber every month … What’s really exciting is that the new members are coming on their own [volition], not because we solicited their membership.

John F. Kenealy, the chairman of the Mohawk Valley Chamber board and a partner at the Utica law firm of Helmer Johnson Misiaszek & Kenealy, confirms Matt’s energy level. “Pam is engaged everywhere in the community, giving a [high profile] to the chamber. Her actions give relevance to our members,” he says.

Matt was raised in Pittsburgh and graduated from Trinity College in Hartford, Conn. She earned a law degree from Duquesne University School of Law in Pittsburgh and began her career as an employment lawyer for Alcoa. Following her move to Utica, Matt held development positions with area colleges and was the human-resources director at Mohawk, Ltd.

In 2012, the Mohawk Valley Chamber generated net revenues of $287,857 and expenses of $293,562. The staff includes five full-time employees. Its headquarters is located at 200 Genesee St. in downtown Utica.

Contact Poltenson at npoltenson@cnybj.com

Auburn’s Uniform Fashions gets new owner

Small Business, Subscriber Only

AUBURN — An Auburn business that has provided uniforms for doctors, nurses, emergency-medical technicians, and restaurant workers for more than four decades has a new owner. Auburn native Jenna Meyers acquired Uniform Fashions from previous owner Tammy Flaherty in a transaction that closed on May 17. Meyers declined to disclose the acquisition cost. Meyers is the

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AUBURN — An Auburn business that has provided uniforms for doctors, nurses, emergency-medical technicians, and restaurant workers for more than four decades has a new owner.

Auburn native Jenna Meyers acquired Uniform Fashions from previous owner Tammy Flaherty in a transaction that closed on May 17. Meyers declined to disclose the acquisition cost.

Meyers is the owner and sole proprietor of the business that operates in a 1,500-square-foot space at 145 State St. in Auburn, she says.

Flaherty had owned the business since 1998 after the death of her mother, Lucille Bronson, who had previously owned the business.

Flaherty sold the business because she was “looking for a change of pace,” says Meyers.

The former owner is also running for the position of town clerk in the town of Owasco, Meyers adds.

Acquiring the business

Prior to acquiring Uniform Fashions, Meyers operated Custard’s Last Stand, her parents’ ice-cream shop in Sennett, since 2009.

Before that, she had been living in Boston, working for El Segundo, Calif.–based NC4, a company that handles private-intelligence work for corporations, she says.

“I was unhappy, so I moved home,” she explains.

Meyers’ mother, Marianne, who has worked as a nurse, is a frequent customer of Uniform Fashions. During a visit in October 2012, Flaherty had mentioned to Meyers’ mother that she was hoping to sell the business.

Marianne shared the information with Jenna, who saw it as an opportunity.

“I had always wanted to run a retail store of my own, and it just kind of presented itself,” Meyers says.

After some discussion, Flaherty offered Meyers a chance to acquire the business in November 2012, and both sides formally signed the contracts in the middle of January, Meyers says.

In financing the acquisition, Meyers secured a loan from Cayuga Lake National Bank but declined to disclose the dollar figure.

The Cayuga Women’s Business Trust also provided Meyers $20,000 in collateral for her bank loan.

“I was short $20,000, so [Trust founder] Cynthia Aikman pledged to the bank that they would support that $20,000. It works just like a regular loan,” Meyers explains, noting it means she has two loans to pay for the acquisition.

Established in 2008, the Cayuga Women’s Business Trust aims to assist women in entrepreneurial ventures by making collateral available to secure small-business loans, according to the website for Women TIES (Together Inspiring Entrepreneurial Success), an organization that works to help women entrepreneurs expand their local, state, and regional marketplace in New York.

Meyers also contributed $10,000 of her own money to acquire the business, she notes.

Attorney Samuel Giacona of Auburn served as legal counsel for the Jenna Meyers, and attorney Dennis Sedor of Auburn provided a similar service for Flaherty in the transaction, according to Meyers.

Meyers began “shadowing” Flaherty on March 1 and has been working in the store since that time, she says.

The first few weeks were “overwhelming,” Meyers says, but has since become more acclimated to her new surroundings.

“I’ve settled in. I know what I have and know where I’m going, and I think I have a pretty good handle on it,” she says.

Uniform Fashions employs two part-time workers, and Meyers has no plans to add any new employees during 2013, she maintains.

The business leases the space from Thomas Hitchcock of Farmboy Graphics, which operates in the same structure. Hitchcock has owned the building since last summer when he purchased it from Flaherty, according to Meyers.

Meyers declined to disclose the store’s revenue information but indicated she eventually hopes to boost the store’s sales 15 percent.

“It’s a pretty lofty goal, but I think I can get there,” she says.

Meyers is hoping to create a website for the store to drive revenue through ecommerce, she notes.

“That’s something that we don’t have here now,” she says.

About the business

Founded in 1972, Uniform Fashions is a retail uniform store providing clothing items which include nursing scrubs, shoes, lab coats, chef coats, uniforms for EMT workers and firefighters.

“Basically, anything for medical [personnel], restaurant [workers], fire, EMS [emergency-medical services],” Meyers says. “We’re now trying to branch into security [and] police.”

She wants to add an embroidery service, as the store provides monogramming for lab coats. Currently, The Printery of Auburn, handles the embroidering duties for the store, she says.

“So, I hope to do that in house, create revenue there,” she says, adding she also wants to enhance the store’s shoe collection.

The store’s suppliers for medical uniforms include Cherokee Uniforms, a division of Chatsworth, Calif.–based Strategic Distribution, L.P.; Gardena, Calif.–based Barco Uniforms, Inc.; and Olive Branch, Miss.–based Landau Uniforms, Inc.

Corona, Calif.–based Tact Squad provides uniforms for firefighters and emergency-medical service workers. The suppliers also include Geneva, N.Y.–based Uncommon Threads, which is a maker of chef and server coats and other apparel for restaurant workers.

In addition, the store sells uniform shoes from suppliers that include Novato, Calif.–based Birkenstock USA, L.P.; Nurse Mates, which is among the brands of Sofft Shoe Company, a division of Greenwich, Conn.–based H.H. Brown Shoe Co., Inc.; and West Grove, Pa.–based Dansko, LLC.

The store has operated in its current State Street location since 2004. Lucille Bronson launched the business on Market Street in Auburn before her daughter, Tammy Flaherty, moved it to the Auburn Plaza in Grant Avenue during the 1990s, according to Meyers.

Uniform Fashions provides on-site displays at Auburn Community Hospital and Mercy Health & Rehabilitation Center in Auburn three times per year, Meyers says.

The employees at each can purchase their uniform through a payroll-deduction system, she adds.

The store also provides uniforms for the nursing program at Cayuga Community College and for the culinary and criminal-justice classes at Cayuga-Onondaga Board of Cooperative Education Services, according to Meyers.

Meyers is a 2002 graduate of Auburn High School. She graduated from Seton Hall University in New Jersey in 2006 with a bachelor’s degree in diplomacy and international relations.

Contact Reinhardt at ereinhardt@cnybj.com

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CONMED: Central New York’s export leader

Manufacturing & Engineering, Regional News, Subscriber Only

UTICA — It all began with a single product. The year was 1973. Eugene R. Corasanti, a 1952 accounting graduate of Niagara University, had assembled a group of investors in 1970 to enter the medical-equipment supply business. To expand the existing distribution business, he studied the potential of manufacturing medical products. In 1972, Corasanti re-named

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UTICA — It all began with a single product.

The year was 1973. Eugene R. Corasanti, a 1952 accounting graduate of Niagara University, had assembled a group of investors in 1970 to enter the medical-equipment supply business. To expand the existing distribution business, he studied the potential of manufacturing medical products. In 1972, Corasanti re-named the holding company he had originally created, Concor Enterprises, Inc., to Consolidated Medical Equipment, Inc. A year later, the corporation produced its first product — a disposable EKG electrode.

In 1973, the Consolidated Medical manufacturing arm posted less than $100,000 in revenue. But, 40 years later, the company, which was renamed CONMED (NYSE: CNMD) in 1985, recorded annual revenue of $767.14 million (according to its year-end 2012 financial statement).

“The manufacturing company that started with two employees in 800 square feet in downtown Utica now [boasts] 3,600 employees, of whom 800 are in Central New York,” says Robert D. Shallish, Jr., the company’s CFO and vice president of finance.

“The 800 square feet has grown to 1,513,376 square feet spread over North America, Europe, Asia, and Australia. CONMED currently has 30 locations worldwide for manufacturing, sales, and distribution. The company owns the majority of the property, and leases the balance.”

CONMED’s sales growth has never resembled an electrocardiogram print out with its peaks and valleys; rather, the sales curve has been straight up. Following its success in producing EKG electrodes in the 1970s, the company began in the 1980s to manufacture products used in electrosurgery, a method of channeling high-frequency current to cut tissues and stem bleeding.

“At the time of its initial public offering (IPO) in 1987, revenues equaled $12 million,” notes Shallish. “By 1990, revenues had jumped to more than $30 million, in 1996 they hit $125.6 million, and by the end of the decade [nudged] $400 million. Three years later, the company approached the half-billion dollar level. Nine years later, CONMED had posted another $270 million in annual revenues, a 54.3-percent increase in net sales.”

Exporting

Exporting has played a major role in CONMED’s growth.

“Much of our success in growing the company comes from an early commitment to exporting,” says Alan Fink, the company’s vice president for global physician products. Fink, who joined the company in October 1976, found himself two years later in charge of sales to Europe and the Middle East. “Gene Corasanti attended a trade show in 1977 in an effort to identify a distributor for our products. He met with G.D. Searle & Co. and contracted with them to distribute for us both in the U.S. and overseas. I learned on-the-job in the days when we handled everything by letter and telex. CONMED sent me to Paris in 1981, where I remained for 18 months, building our European business.

“Until 1997, we exported everything from our facilities in the states. When CONMED acquired Linvatec, we structured sales offices in the U.K., Canada, France, Germany, Spain, Australia, and Korea where we were now selling the new orthopedic lines. After 1997, the company continued to add direct-sales locations by opening overseas offices and by buying distributors.”

That has taken the company past the century mark in number of nations its products reach, with international customers producing more than half its revenue.

“Today, CONMED sells to more than 100 countries from 16 sales offices both through its own distribution channels and through independent distributors. Gene Corasanti was committed to international sales and set the culture for the company. [Currently], we have in excess of 300 people dedicated to exporting. Fifty percent of our revenue comes from customers outside the U.S. — that’s about $385 million, making CONMED an export leader in the Central New York region,” avers Fink.

Acquisitions

The plan for sustained growth depends in part on the company’s approach to strategic acquisitions, which today number 25. The ink was barely dry on the IPO (2.3 million shares offered at $2.07, adjusted for stock splits) when CONMED bought Medac for $126,000. “The first significant acquisition occurred two years later with the purchase for $5 million of Aspen Laboratories, Inc., a division of Bristol-Myers, which produced electrical-surgical generators,” says Shallish. Bristol-Myers merged with Squibb in 1989, creating Bristol-Myers Squibb Co.

Other significant acquisitions included Andover Medical from Medtronic in 1993, Birtcher Medical in 1995, and a competitor, NDM Corporation, in 1996.

“The most important [M&A] deal was completed in 1997 when we bet the farm on Linvatec Corporation, another unit of Bristol-Myers [Squibb] (the purchase price was $370 million in cash). Linvatec manufactured and distributed arthroscopy products and powered surgical instruments … We more than doubled our business overnight, because the Linvatec deal brought $190 million in annual sales. It also gave us an entry into the orthopedic field,” recalls Shallish.

CONMED bought a powered-instrument business from 3M in 2001; Bionix Medical in 2003, a company producing sports-arthroscopy products; and a product line for gastroenterologists from CR Bard in 2004. “We didn’t make any more acquisitions until last year,” notes Shallish, “when CONMED purchased Viking Medical Systems, a small public company that specialized in 3D surgical visualization, for $22.1 million.”

The company has also found other ways to grow besides acquisitions.

While CONMED’s growth is boosted by its mergers-and-acquisition strategy, “we also pursue strategic partnerships,” notes Shallish. “In January of last year, CONMED announced a partnership with the Musculoskeletal Transplant Foundation (MTF), the world’s largest tissue bank. This positions us to promote our surgical devices along with MTF [allograft] tissues for sports medicine and other arthroscopic procedures.”

CONMED is also the worldwide distributor of MTF’s “Platelet Rich Plasma” kits, which use the patient’s own blood components to aid in the healing process, according to the company’s 2012 annual report. “CONMED’s $147 million price tag to collaborate with MTF has already had a positive effect on earnings,” observes Shallish, “and has increased our brand visibility among surgeons.”

CONMED’s products are used today by surgeons and physicians in a variety of specialties including orthopedics, general surgery, gynecology, neurosurgery, and gastroenterology. In 2012, the different product lines produced the following percentages of consolidated revenues: orthopedics, 54 percent; general surgery, 37 percent; and surgical visualization, 9 percent. “Eighty percent of our sales are derived from disposable products,” Shallish points out. “It’s the razor-blade model where we have the opportunity to promote the hardware at modest or no cost to encourage consumption of the consumables.”

R&D

CONMED has also generated organic growth. Eugene Corasanti’s son, Joseph J. Corasanti, the current president and CEO of the company, says in the 2012 corporate annual report: “Our strategy … remains the same, continued focus on organic growth through the introduction of innovative products, coupled with complementary acquisitions.” In 2012, CONMED invested $28.2 million into research and development (R&D) to enhance its organic growth. “We typically budget 3.5 [percent] to 4 percent of our revenues in R&D,” says Shallish. “CONMED employs 140 people in research with a high percentage [holding] advanced degrees. Most of our research is conducted in Utica, Florida, Denver, and Westborough [Massachusetts], Shallish notes.” The company holds more than 700 patents.

The executive team steering the company’s growth includes both Corasantis, Shallish, and Fink. It also includes William W. Abraham, who joined CONMED in 1977 and currently holds the title of executive vice president, business development; Joseph G. Darling, executive vice president, commercial operations; Heather L. Cohen, executive vice president, human resources; Gregory R. Jones, executive vice president, quality assurance/regulatory affairs; Daniel S. Jonas, executive vice president, legal affairs and general counsel; Luke A. Pomilio, executive vice president, controller, and corporate general manager; and Mark Snyder, executive vice president, manufacturing operations and supply chain.

Challenges

“The company’s growth has not come without challenges,” says Shallish. “Physicians are demanding less invasive procedures, and the health-care community keeps applying pressure to contain costs. Add to this a growing burden of regulatory compliance in most countries, currency-exchange volatility, a sluggish economy, and assorted taxes, including the new 2.3 percent gross-receipts tax imposed on medical-device manufacturers. The impact alone of this new tax was a $7 million, pre-tax reduction in CONMED’s shareholder income and a $4 [million] to $5 million post-tax hit. This tax alone reduced our earnings-per-share by 18 cents and caused us to adjust our 2013 forecast.”

Fink highlighted the growing regulatory problems by citing the cost and time just involved in import registration. “Most countries require us to register. In China, it now takes one to three years just to get a license to do business. In Brazil, it’s more than a year, Mexico takes a year, and Argentina requires seven months to a year. All of Asia and South America (except Chile) require registration, and there is a high cost to register … [Further], the company’s license is for a short period, requiring us to constantly re-register and pay the licensing fee.”

“CONMED has had an ongoing commitment to education and training,” says Shallish. “To share the latest innovations in surgery, the company has long focused on surgeon training. We currently have three educational facilities located in Florida, New York City, and Gross Gerau (20 miles from Frankfort, Germany) and are discussing opening a fourth center to cover Asia. These advanced centers feature multiple, hands-on learning environments, state-of-the-art auditoriums, and a showcase for CONMED products. The facilities include surgeon-specific labs with a hands-on approach to teaching new skills and techniques.” In addition to the centers, CONMED also participates in more than 400 medical-association courses and workshops annually, reaching out to distributors and the company’s sales people, as well as to physicians.

To put CONMED’s growth in perspective, the amount of cash used to pay dividends declared in 2012 was greater than the company’s revenues were when it first went public 26 years ago. Despite continuing annual restructuring costs of $4 million to $13 million for the past three years to improve manufacturing efficiencies, CONMED has posted growth in net sales of $713.7 million in 2010 to $767.1 million in 2012 and at the same time an increase in net income from $30.346 million to $40.481 million.

The basic earnings-per-share during the same period have grown from $1.06 to $1.43. When adjusted for the restructurings and unusual items, the earnings-per-share in 2012 were $1.80. Over the last decade, the company’s retained earnings have jumped 94 percent, rising from $194.5 million in 2003 to $377.9 million in 2012. CONMED is also in the midst of a stock buy-back. The board of directors has authorized a stock repurchase — through March 31, CONMED has bought back $30 million. Shallish expects the company to spend another $25 million by year-end. The gamble on arthroscopy in 1997 is certainly paying off. While consolidated sales rose 5.8 percent in 2012, arthroscopic products surged 14 percent. CONMED’s share price closed at $32.06 on July 9, up nearly 15 percent year to date. The stock gained almost 9 percent in 2012.

“Our product lines are number two or three in every market,” says Shallish. “The company is known as an innovator, and we want to [enhance] our reputation going forward. We need to continue focusing on being more efficient through lean-manufacturing techniques, leveraging our technology, and pricing our products appropriately. Our financial performance is matched by our presence as a global company.”

Contact Poltenson at npoltenson@cnybj.com

St. Joseph’s to join second-largest Catholic health-care system

Health Care, Subscriber Only

SYRACUSE — St. Joseph’s Hospital Health Center has agreed to join the second-biggest Catholic health-care system in the nation, in a move to boost its standing in the changing health-care market as the national health-reform law is implemented. St. Joseph’s Hospital on July 10 announced its intention to join Livonia, Mich.–based Catholic Health East (CHE)

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St. Joseph’s Hospital on July 10 announced its intention to join Livonia, Mich.–based Catholic Health East (CHE) Trinity Health, which provides health-care services in 21 states via 82 hospitals and 89 other facilities and programs. The board of directors of both organizations signed a non-binding letter of intent the day before.

St. Joseph’s expects to finalize the agreement with CHE Trinity in about three to six months, Kathryn Ruscitto, president and CEO of St. Joseph’s Hospital Health Center, says in an interview.

The move will shift the sponsorship of St. Joseph’s Hospital from the Sisters of St. Francis of the Neumann Communities, which founded the hospital 144 years ago, to Catholic Health Ministries, the group that sponsors CHE Trinity Health.

St. Joseph’s looked for a partner that could help the hospital preserve its mission and that could provide “access to intellectual capital, access to capital,” Ruscitto says.

“This is not a sale. This is a change in sponsorship,” she stresses.

CHE Trinity Health will provide the sponsorship with “reserved powers” that include overseeing and ensuring the hospital’s mission by appointing the board of directors and hiring and firing the CEO. It will also approve “major capital expenditures,” she says.

“So the same power the Sisters [of St. Francis] have will now transfer to CHE Trinity,” Ruscitto adds.

The sisters who founded this Catholic health-care system developed a “system allocation that is very small compared to what the return on benefit is to the organization,” she says.

Ruscitto declined to disclose how much St. Joseph’s will pay in fees annually to be part of the CHE Trinity Health organization.

CHE Trinity Health was formed in May when Pennsylvania–based Catholic Health East merged with Michigan–based Trinity Health. The combined system generates annual operating revenue of about $13.3 billion and has assets of about $19.3 billion. It employs more than 87,000 people, including 4,100 employed physicians, according to a joint news release from St. Joseph’s and CHE Trinity Health.

The non-binding LOI is the first such agreement CHE Trinity Health has entered into since consolidating.

Catholic Health System of Buffalo and St. Peter’s Health Partners in Albany are also part of the CHE Trinity Health system, Ruscitto says.

The CHE Trinity system includes 85 hospitals that are able to achieve “both intellectual best practices, as well as capital,” Ruscitto says.

“For example, their bond rating at CHE Trinity across all their hospitals is a AA+,” Ruscitto says.

As a member of a system with that many hospitals, facilities can self insure for malpractice and can purchase materials “at a much different rate,” she says.

“They [CHE Trinity Health] have already identified substantial savings that they’re going to be able to help us achieve by scale,” Ruscitto says.

In addition, department directors at St. Joseph’s will be able to speak with the people of similar titles at any of the hospitals in the CHE Trinity Health system, she says.

Over the next three to six months of finalizing the agreement, both sides will perform “the necessary due diligence,” according to Ruscitto.

“I want our physicians to talk to physicians in the other systems in New York state. And all that’s to make sure that this is a durable partnership going forward,” she says.

St. Joseph’s has been examining this “strategic option” for about three years, Ruscitto says, and the hospital’s discussion with CHE Trinity Health started about a year ago.

The announcement will have no affect on the current employment level of more than 3,700 full-time workers at St. Joseph’s, she adds.

St. Joseph’s Hospital Health Center is a nonprofit, 431-bed hospital and health-care system providing services to patients in 16 counties in Central New York.

The hospital generated $586 million in revenue in 2012 with net income of $9 million.

CHE Trinity Health also offered its thoughts in the joint news release.

CHE Trinity Health is “committed” to strengthening Catholic health care in the U.S., and the system is “delighted” that St. Joseph’s Hospital Health Center shares its future vision, Judy Persichilli, interim president and CEO of CHE Trinity Health, said in the release.

“With our scale and scope, commitment to exceptional care, and a unified voice for serving vulnerable people, we believe that we can help St. Joseph’s Hospital Health Center meet the challenges of health care reform and continue to provide outstanding care for residents of Central New York,” Persichilli said.

Ruscitto also referenced the national health-care reform law as playing a factor in the combination. “This alignment will provide a strong financial foundation for the future of St. Joseph’s and help ensure our ability to meet the potential challenges of health care reform,” she said in the news release.

Contact Reinhardt at ereinhardt@cnybj.com

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