Wednesday's Small-Cap Winners & Losers

Ballard Power Systems ( BLDP) was one of Wednesday's small-cap winners, as the Canadian company signed an agreement valued at $22 million with General Hydrogen. Ballard will supply 2,900 Mark 9 SSL fuel cells. With the deal, Ballard said it has exceeded its goal of shipping or booking 300 Mark 9 SSL units in 2006. Shares were trading up 68 cents, or 12.1%, to $6.29.

Bell Microproducts ( BELM) gained after the San Jose, Calif., network-storage products company was upgraded by Robert W. Baird to outperform from neutral. Shares were trading up 41 cents, or 7.5%, to $5.85.

Barnwell Industries ( BRN) surged 12.9% after the Honolulu-based oil and natural gas company's largest shareholder, Mercury Real Estate Advisors, called upon Barnwell to evaluate strategic alternatives, including the sale of its energy division, and implement a share-buyback program immediately. In a letter to Barnwell, Mercury Real Estate executives praised the energy company for its preliminary success unlocking the value of its real estate holdings in Hawaii and its oil and gas business in Canada.

"Although there remains substantial unrealized value in these assets," the letter states, "we believe the company's current corporate structure, egregious executive compensation and disparate business divisions are fundamentally flawed." Mercury Real Estate Advisors is an affiliate of Mercury Partners LLC, a real estate investment management company based in Greenwich, Conn. Shares of Barnwell Industries were trading up $2.46, to $21.45.

Lithia Motors ( LAD) stumbled after the Medford, Ore.-based automotive franchiser warned its third-quarter results would miss Wall Street's expectations and lowered its full-year guidance. The company said it was expecting third-quarter income of 58 cents to 60 cents a share due to weaker sales, higher inventory levels and higher costs. Analysts polled by Thomson First Call were looking for earnings of 72 cents a share.

Lithia Motors also lowered its full-year 2006 guidance, calling for earnings of $1.95 to $1.99 a share. The company had earlier called for profit of $2.20 to $2.28 a share, while Wall Street was looking earnings of $2.25 a share. The company said it will release third-quarter earnings on Oct. 31. Shares were trading down $1.96, or 8%, to $22.48.

Audiovox ( VOXX) narrowed its loss in the second quarter, but the Hauppauge, N.Y.-based consumer-electronics company still saw its shares tumble. The company posted a loss of $2 million, or 9 cents a share, compared with a loss of $3.7 million, or 17 cents a share, a year ago. Sales fell 21% from a year ago to $97.4 million. Mobile-electronics sales, which represented 69.2% of net sales, dropped 14.2% to $67.4 million, while consumer-electronics sales, which represented 30.8% of sales, were $30 million, a decrease of 32.3%. Shares were trading down $2.27, or 15.2%, to $12.63.

Bath and spa products maker Jacuzzi Brands ( JJZ) agreed to be bought out by private equity firm Apollo Management for $990 million, sending its shares soaring.

Apollo will pay $12.50 a share for the West Palm Beach, Fla., company, representing a 21% premium over the stock's closing price Tuesday. Including the assumption of debt, the deal is valued at $1.25 billion. Jacuzzi Brands operates under two segments: Zurn, a plumbing business, and Jacuzzi, a seller of bath, spa and shower products. After the deal's completion, Apollo plans to sell the Zurn business to one of its portfolio companies, power-transmission products maker Rexnord, which will operate it as a separate entity. George Sherman, chairman of Rexnord, is a co-investor in the deal and will become chairman of Jacuzzi Bath. The deal is expected to close in the first quarter of 2007. Shares were climbing $1.71, or 16.5%, to $12.06.

Midland Company ( MLAN) gained after the Amelia, Ohio-based insurance company said it expects third-quarter results to beat Wall Street's expectations. The company said it anticipates profit of 83 cents to 89 cents a share, or 80 cents to 86 cents a share before realized capital gains. This is up from the year-ago earnings of 20 cents a share, which included 11 cents of realized capital gains. Analysts are looking for earnings of 56 cents a share. The company cited solid noncatastrophe underwriting and weather patterns that have been much less volatile than the prior year's third quarter as reasons for the expected increase. Midland also reaffirmed its full-year guidance of $2.90 to $3.20 a share, excluding capital gains or losses. Shares were trading up $2.62, or 6.6%, to $42.62.

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