DATE: Saturday, April 5, 1997               TAG: 9704050211

SECTION: BUSINESS                PAGE: D2   EDITION: FINAL 

                                            LENGTH:   64 lines

LOCAL SCENE

NORFOLK

FARM FRESH/COCA-COLA PATCH UP RELATIONSHIP: Norfolk grocer Farm Fresh Inc. has resolved a contract dispute with a distributor that had resulted in higher prices on Coca-Cola soft drinks, Farm Fresh Chief Executive Officer Ronald Johnson said. Distributor Coca-Cola Enterprises Northeast and Farm Fresh haven't publicly discussed the reasons behind the spat. But industry observers say the fight probably involved funds that Coca-Cola gives to grocers in exchange for exposure in ads, displays or promotions. Supermarkets, in turn, pass that savings on to customers. In a tug-of-war, Coca-Cola might have pulled its funds, forcing Farm Fresh to raise prices on the company's products. The dispute was resolved last month.

NEWPORT NEWS

MANUFACTURING FACILITY BREAKS GROUND: Muhlbauer Inc. broke ground Friday on a $20 million manufacturing facility in Newport News. The 20,000-square-foot facility will invest $3 million initially and employ 50 people during the first phase of construction. Muhlbauer plans to hire an additional 100 people over the next five years and increase its investment to $20 million. The Newport News facility will serve as the company's U.S. headquarters. Muhlbauer is a subsidiary of Muhlbauer High Tech International. The firm supplies high-volume robotics production systems for the semiconductor industry as well as high-speed machinery to manufacture and process smart cards, small plastic cards with a computer chip that stores information.

VIRGINIA

VPSA BONDS SERIES 1997A RATED AA BY FITCH: Virginia Public School Authority's $92,150,000 school financing bonds (1991 Resolution), series 1997A, are rated `AA' by Fitch Investors Service. The bonds, to be offered for bids April 10, will be due Aug. 1, 1998-2018 and optionally callable beginning Aug. 1, 2007 at 102 percent. Bidders may designate two or more term bonds with mandatory sinking fund redemption and the authority may alter each maturity by $250,000 ($500,000 for the 2018 maturity), up to a total of $1,500,000. Bond proceeds will be used to purchase $83.3 million general obligation local school bonds from nine localities, eight of which are prior participants in the 1991 Resolution program. There have been no local defaults in the program's more than 30 years' operating history.

CIRCUIT CITY PROFITS DOWN IN FOURTH QUARTER: Circuit City Stores Inc. said fiscal fourth-quarter profit fell 17 percent because of weakening electronics sales and tough competition. The company, which owns the Circuit City electronics chain and a controlling stake in the CarMax Group chain of used-car dealers, said net income fell to $68.3 million, or 68 cents a share, from $82.1 million, or 83 cents, in the year-earlier quarter. The Richmond-based company was expected to earn 67 cents a share, based on the average estimate of 18 analysts surveyed by IBES International Inc. Sales for the quarter ended Feb. 28 rose 7.3 percent to $2.42 billion from $2.25 billion. During the quarter, same-store sales at its electronics stores fell 10 percent.

Clarification

Metro Machine of Pennsylvania Inc., a business affiliate of Norfolk-based Metro Machine Corp., asked the state of Pennsylvania for permission to delay payments on a $15.5 million debt until the end of 1998, not Metro Machine Corp. as reported March 3. Metro Machine Corp. established Metro Machine of Pennsylvania to buy part of a Chester, Pa., shipyard. Metro Machine of Pennsylvania borrowed the $15.5 million from the state's Department of Community and Economic Development to get the Chester yard started. MEMO: To submit an item for the Local Scene, please fax it to 446-2531.

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