Palm Coast Data Revenue Now Half Its 2008 Level, When It Signed Job-Creation Deals
FlaglerLive | April 10, 2012
The question at Palm Coast Data is not how many of the 700 new jobs it promised in November 2008 have materialized. The question is how many of the 1,000 jobs it had at the time are still in existence.
Palm Coast Data isn’t saying. Repeatedly asked about the company’s number of jobs in Palm Coast in person, by phone and by email, going back to last year and as recently as last week, Michael Duloc, Palm Coast Data’s vice president, hasn’t provided the number. The newly created Flagler County Economic Opportunity Council is spending a lot of time talking about preserving jobs and creating new jobs, and visiting the area’s principal economic engines. Palm Coast Data, ostensibly Flagler County’s largest private-sector employer (that title may now have been claimed by Florida Hospital Flagler), is hardly ever mentioned. Barbara Revels, who chairs the council, says she doesn’t know how many jobs there are at Palm Coast Data. Same story at the Palm Coast City Council, where, several years ago, Palm Coast Data was a proud topic of discussion. The city has been mum about it and the company’s payroll numbers since.
The question is pertinent on several grounds. According to the company’s latest financial results, revenue at Palm Coast Data is now less than half what it was in the fall of 2008, when the company signed an agreement rich in tax incentives with the state of Florida, with the city of Palm Coast and with Flagler County, in exchange for the promise of creating new jobs.
In the quarter ending in January 2012, the company’s revenue decreased to $15.6 million, down from $18.35 million in the comparable quarter a year ago—a 15 percent decline. In the quarter ending in October 2008, the company’s revenue was $32.2 million. At the time, Palm Coast Data was one of three magazine fulfillment plants in the country, operating under the Kable Media Services subsidiary, under parent company Amrep Corp. Those plants were consolidated in Palm Coast beginning in the fall of 2008, with the city and Enterprise Flagler, the county’s public-private economic development partnership, claiming a big victory in “saving” jobs and seeding new ones.
Palm Coast was willing to provide the company $450,000 in job-creation incentives, though unlike the state of Florida, the city did not put up the money up front. The money was contingent on actual job creation. The state, on the other hand, floated the company a $3 million cash incentive, which was to be repaid in three years absent actual job creation.
Palm Coast Data is a magazine fulfillment and membership service: it’s where your subscription forms go to be entered and managed. The magazine industry has been in the tank for several years. Titles are shutting down, or reducing publication frequency, or moving to the web. As Amrep’s quarterly financial reports now routinely explain: “Magazine publishers, which are the principal customers of these operations, have continued to be negatively impacted by increased competition from new media sources and also by the effects of the recent recession. The result has been a continuing trend of reduced subscription and newsstand sales, which has caused some publishers to close magazine titles and seek more favorable terms from Palm Coast and Kable and their competitors.”
It hasn’t all been bad: Last year Palm Coast Data landed the contract for Tennis Magazine and Newsweek, and won an extension of its contract with New York magazine and Source Interlink Media, the latter a publisher of 70 titles. The financial trend, however, has been relentlessly downward, with Palm Coast Data parent Amrep recording a loss in earnings in 10 of the last 15 quarters.
Amrep has three subsidiaries: a Amrep Southwest, a real estate company in New Mexico that has suffered greatly from the housing bust; its revenue was zero in the last quarter, compared to $257,000 in the same period last year. Kable Media Services’s newsstand distribuition and product services, which had revenues of $2.5 million the last quarter (compared to $2.2 million a year ago); and Palm Coast Data’s fulfillment operation, now by far the driving force behind Amrep’s overall operations: Palm Coast Data revenue accounted for 73 percent of Amrep’s total revenue in the last quarter.
Amrep is publicly traded. For the first nine months of fiscal 2012, it had a net profit of $488,000, down from $1.5 million for the first nine months of the previous year.