The Cincinnati Enquirer from Cincinnati, Ohio • Page 43

mm Frisch Says Roy Rogers Corrals Customers. Profits business pulse ARFINCKEL. BROOKS Brothers. Miller Rhoads the Washington. -based retailer fighting a takeover attempt by Gamhie-Skogmo Inc says it has filed suit in a federal court in an attempt to thwart the bid Garfinckel charged that Oamble-Skoemo's purchase of about 500,000 GarfinekeJ shares about 12 of the company's common stock violated anti-trust laws.

BY CAROL PUCCI Buvnss Report Hoy Rogers has plenty of reasons to smile The hot roast beef sandwiches named after him are going over well with the fast-food crowd On the other hand. Big Bo might want to close up that wide grin he's always flashing Frisch's Restaurants Inc chain of Roy Rogers Family Restaurants treated shareholders to healthy sales and profit gains last year. Big Boy didn't fare as well PROFITS FOR Frisch's flagship division declined in the fiscal year ended May 28, 1978, according to the Cincinnati company 's annual report. The report was released this week Revenues reached $88.9 million, the highest ever. They were 9.3'" more than last year's $81 3 million But Fnsch's overall profits dropped 1.5.

Only Its chain of Roy Rogers Family Restaurants showed improved earnings before taxes. informed shareholders tht the Interrwu Revenue Service VIRS has that the company be assessed $222,000 taxes and So XV in penalties for past deduction i vclving Frisch' Big Boy Farm The IRS audited Hbm party's tax returns between 1 973 an. concluded that Frisch's deducted farm expenses related to Maiers personal horse -breeding and boat i tng operation As a result ot the IKS examination. Maier has already paid the company $221,000 to cover the expenses in question The company is "vigorously defending'' itself against the proposed HWNM the proxy statement said. According to the proxy.

Frisch's gave Maier a salarv and benefits package worth $220,970 during Rata) 1978. The company provided cert.a officers with automobiles, tickets to sporting and other entertainment events and paid club dues The value of those benefits did no: exceed $18,304. the proxy statement said $1 per share i year age Maier. president, said in a message to shareholders. Fnsch's earned il cents on every compared to 2 4 cents last year FRISCH AS by no mesns given up on its prime dtvtsion Sales for Big Boy restaurants amounted $122 million for fiscal 1978.

Sales for company-owned restaurants averaged per restaurant compared to $514,000 ftM Hi franchises. A more stringent selection of restaurant management is being implemented to improve earnings of our Fnsch's Big Boy units in Or. Kentucky Indiana and Florida." Mater said But Roy Rogers, bolstered by a 32.4 increase in sales, that is Frisch for future expansion In light of the continuing success ai this, division, we have agreed to build or franchise 58 additional Roy Rogers Family Restaurants over the next 10 years. Maier said IN ITS proxy statement. Frisch's Frtscr.

has 21 company-owned Roy Rogers restaurants. It also operates two QuaI-ity Inn motels and two Prune Wine Restaurants. its biggest sMslsJuB Is Bag The company operated 103 and had another 114 under franchise at the end of the fiscal year. A management analysts of company operations included in thw report says Big Boy's problems boti down to: Cer.tir.ufd division's Kip's Big Boy restaurants in Oklahoma. Depressed operations Frisch Big Boys caused by wvnter weather To compound the problems, higher utility bills, insurance costs and wages added up to a HuM hike in the company's overall operating costs for the year Operating costs account for more than of Fnsch's total expenses.

For the year, net profits declined .5 to $1 94 million or $1 09 per share compared to $1.96 million or THE I NITEP States and Japan reported progress Thursday but no agreement negotiations for an expansion of agricultural exports to Japan The Carter administration's top trade negotiator. Robert Strauss, said that although "substantial progress" was made, "we did not achieve our basic negotiating objective." BIO BO ran fast bot lost groond. THE DOLLAR pushed higher on the world's foreign exchange markets Thursday as traders speculated the United States would take additional moves to aid its embattled currency The price of gold declined in quiet trading. Gold closed at $211.25 an ounce in London, against $212,128 Wednesday, and at $210,875 an ounce in Zurich, down from $212.75. Study Sees Less Growth In Expansion, New Jobs Money Supply Dip Eases Fears Of Tighter Credit the second quarter increased 4 following a 14! rise in the first quarter So the outlook for the second half of the year is for a slowdown in investment activity from the pace of the first six months.

This means that business will not be doing as much to strengthen the economy and create jobs as the administration had been expecting One possible explanation, some economists speculate, is that businesses are waiting to see what Congress approves in the way of invest -meiu incentives money ON THE TOKYO foreign exchange Thursday, the dollar gained slightly, closing at 190.825 yen in moderate trading. Wednesday's end-of-day figure in interbank trading was 189 625 yen. A foreign exchange dealer said the dollar was stable throughout the day. The dollar fluctuated a mere 0 7 yen against the Japanese currency Thursday, compared with a six yen drop last week. this year, after discounting for inflation, down from a 8.5-V gain last year Investment plans in the third quarter provide for a 2.9,J,o increase, while the gain is projected at 2.5-'? for the final three months of the year.

Actual investment spending in WASHINGTON (AP-The investment In plants and equipment that creates jobs in private enterprise is expected to decline this year from 1977 levels, the Commerce Department said Thursday. The agency said businesses plan to increase investments in new plant and equipment by only 5o Grain Future Prices Rise; Soybeans Mixed JONES LAl'GHLIN Steel the nation's seventh largest steelmaker, says it will raise prices on its tin mill products, effective October 1. gave no figures but said the hikes would be "generally the same as those previously announced by other tin plate producers." cents lower to 1 cents higher with September contracts quoted at $rV4t a bushel, wheat was 1- to 2 cents higher. September $3 corn was 1 to 2 cents higher, September and oats were 2-i to 4 i cents higher, September $1 29. and oats prices Light overnight country movement of corn and soybeans was supportive but continued highly favorable growing weather introduced some weakness Soybean prices ranged from 2 CHICAGO tAP)-Grain futures prices advanced on the Chicago Board of Trade Thursday.

Soybeans closed mixed. Some relatively heavy commercial and commission house buying added firmness to the wheat, corn NEW YORK (AP) The nation's basic money supply took a SI I billion drop in the week ended August SO, the ederal Reserve said ThUrS day. indicating new credit-tightening moves may net be in the offing The drop "was pretty good said William Gibson at Smith. B.inu Harris Upham Co Inc Gibson added the drop "puts us within" the red targets for money-supnU growth and may mean the Federal Reserve "is not compelled" to tight en credit further The Fed has been pushing interest rates higher as a method of curbing overly rapid expansion to the money supply, actually credit it tears that too-quick credit growth will fuel inflation by allowing consumers' demands to exceed (he na tion's ability to produce enough goods and provide enough ser ices RILE TO most recent drop in Ml- the total of cash In circulation and checking deposits coupled with the previous week's Ml decline of $400 million might presume easing of Fed policy, moves to the dollar might require yet another round of credit-tightening. Qlbson noted.

The Fed also has been aiming for higher domestic interest rates In order to attract foreign investors. r.i.se demand for dollars and thus bolster the ailing currency on lor-etgn exchange markets In tie weekly Fed report Ml fell to seasonally-adjusted iverage of I352J billion from ote tuition the week before M2, the total of Ml. savings deposits at banks and cert; nemos ot depot!) (CD) ot less than SIOOJXV. HOC million in the week to MB i -t bill ton For the four weeks ended August JO, Mi iveraged SAvt i billion, a 6.W rata ot growth over the quarter M2 averaged $8M .3 billion in the four weeks. 1 1 i rate of gam.

Other indicators released by the Fed for the week ended Wednesday included Mem bM bank borrowings from the Federal Reserve System iet aged billion, up Rom S1- billion Federal funds, the Intaraat mie on short-term loans of UltOMMtttd reserve funds among banks, avei aged 300. up from 8 2 the preVtOUl week The throe-month Treasury bill rate average, 90 up from 1 JfSjj fssss I)JBMMWWMMMM: H-k Wall Street Stock Rally Stalls ed because ot (he proximity of the Uow Jones average to the 900-polnt level, which is considered psycho logically For the secon day in a row. the lw pushed above the BOO-pOtnt aval only to full back again The Dow has closed above BOO only once since July .18, Much of Thursday1! heavy activity came from airline tttUft, which continued to benefit from vciy lavotuble traffic figures for August Fan Am, which reported a 30 V' i lse in August traffic from the 'lev lOUl ve.u touched a new high at 10 and closed ith a a halt point rise al gil as the most actively ti nted Issue. NEW YORK (AP) Walt St reel's post-Labor Oay rally stalled Thins day as the stock market rmisluvl mixed Traders awaited fresh economic news. "1 imagine the market, from a technical point of view, is regroup ulg," said Monte Oordon, an analyst at Dreyfus Corp The wholesale price index figures are due Friday The Dow Jones average of 30 Industrial Issues, which had risen iti points In the two previous sessions, slipped 2.08 to 893.71 But advancing Issues led rte dines, 3 to 2.

Analysts said the rally also stall AP Wireehcto PAN AMERICAN World Airways Boeing 747 on a runway: If Pan Am-National merger goes through, Pan Am would be the United States' second largest airline. Pan Am, National Merger Seeks Takeoff Clearance Federated Opens Texas Office purchases or new properties and other real estate and research duties, he said down there," Best italrt wising Interest rates on loani have put a damper on many bust nessrs' expansion pro grama, but hay have not slowed down Federated. Best said "We do nil our tl- nanclng through our a flow," lie said "So oui Indebtedness Is very small generate our own ui ids lor expansion IT WAS LEARNKD that directors of National and Pan Am, who met separately in New Yoik Tuesday and again Wednesday, approved the merger deal late Wednesday afternoon But announcement was delayed while attorneys and other negotiators worked out the fine points and terminology of a tiO-pnge agreement. "It was a typical lawyer-to-lawyer confrontation." said a source close to the negotiations "Two lawyers spent 22 minutes arguing whether to use the word 'to', 'of or 'the' in one sentence." The two chairmen finally signed the pact at 10:15 p.m. Wednesday.

Negotiations between Pan Am and National only began a week ago and one Pan Am lawyer said putting the thing together In such a short period of time was the toughest Job he ever tackled. However, it may be tougher to get the merger deal approved by the CAB. CAB CHAIRMAN Alfred Kahn, a free-market economist who has implemented a policy of deregulation in the airline Industry, has expressed concern about a recent rend to airline merger proposals. He has said Pan Am will have a "very heavy burden of proof" in its attempt to Justify a union with National. Last week, the Justice Department said It will intervene in CAB hearings on three airline merger proposals, two of which are the Pan Am and Texas International cases.

Justice said it hasn't determined whether a Pan Am merger would violate anti-trust standards, but said it is worried about possible anticompetitive aspects ol such a merger. AMONG THE Dallas executives Is Howard Kapp, regional manager of i research, ho has handled the same position from Federated'! corporate oftlce in Cincinnati "It Just makes life simpler having the in Federated Department Stores Inc. has opened a Dallas office to han-dle expansion programs of the Cincinnati-based re-tall chain's two Texas divisions. The two department store divisions, Sanger-Harris of lull. is and Foley's of Houston, "will spread through Texas and cover a lot of territory real soon," according to William Best l'ederated's director of media relations.

The new office Includes five executives, plus a clerical staff, who will coordinate WANTED: SALESPERSON WITH CLASS 133-year-old oroantxatioA ha opunin tot an individual with njccevitul dune valev bockqiound to i ontai tcimilies who am in tint nbovo awiraqo ocio -economic, bracket. Ihi4 i an unlimited career Opportunity tn an oirluuve tit-Id not real estate nor iniurOftOO, No travel Aqe open. Commission, bonus, employee benefits. Write Box 3 1 7, Enquirer, hi particulars. BY JAMES RUSSELL Knight Newspapers NEW YORK-The proposed merger of Pan American World Airways and National Airlines cleared its first major hurdle Thursday with an announcement of a "definitive agreement" approved by directors of both companies.

Working late into Wednesday night. National chairman L.B. Maytag and Pan American chairman William Seawell signed a $350-million corporate marriage pact that calls for keeping "certain managerial and operating offices" and "a major overhaul and maintenance base" in Miami for at least five years. Approval by both boards of directors of the $41 -per-share deal paves the way for National stockholders and the government to decide the ownership of the Miami-based carrier, which also is being sought by an unwelcome Texas International Airlines. Any airline merger must be approved by the Civil Aeronautics Board.

Because the Pan Am-National case involves international routes, it would also have to receive the consent of President Carter. A JOINT announcement by the two airlines said the merger would "integrate National's domestic and Pan American's international route systems," with National becoming a Pan American subsidiary called Pan American U.S.A. Inc. The National Airlines logo is likely to disappear. "Under the agreement," the announcement added, "Pan Am will use its best efforts to see to it that no current National employee, including management, will be deprived of employment as a result of the merger and will also use its best efforts to avoid involuntary relocation of National employees (other than officers) from Miami." Pan Am also said it intends that "no Pan Am employee, including management, will be deprived of employment as a result of the merger." National's pilots have expressed concern about the loss of seniority in a merger with old-line Pan Am.

PAN AM Thursday said its promise of keeping a major overhaul and maintenance base in Miami for at least five years does not mean it intends to dismantle the facility at the end of that period. Seawell said: "This merger will benefit the employees and stockholders of both National and Pan Am, will create a more efficient airline and will invigorate and not injure competition in air transportation, and in consequence, will provide better service to the public at lower fares and rates. "The Integration of the two systems will produce a soundly structured airline capable of offering more effective competition to major airline rivals, both foreign and domestic, tlnan would be possible for either carrier alone." Maytag said: "National's board carefully considered this proposal and the advice of Morgan Stanley and National's financial advisers, that the $41 Pan Am offer would be fair and equitable to National's shareholders." MAYTAG SAID National stockholders will meet within two or three months to vote on the deal. Wall Street securities analysts predicted that shareholders will agree to Pan Am's offer of $41 a share for National's 8.55 million shares of stock. Before the first disclosure on July 10 that Texas International was buying up National shares, National stock was selling for $19.75.

Even Texas International would show a big profit in a Pan Am merger. Now it has 18.2 of National stock, or 1,553,300 shares bought for an average price of $27.16. A National-Pan Am merger would give the Houston carrier a profit of about $21.5 million. The reaction from Texas International to the National-Pan Am agreement, however, was silence. "We have no immediate reaction," vice president Jim O'Donnell said.

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