X
|
QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF
1934 FOR THE QUARTERLY PERIOD ENDED September 1, 2007
|
TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF
1934 FOR THE TRANSITION PERIOD FROM ______ TO
_____
|
Delaware
|
06-0868496
|
(state
or other jurisdiction of incorporation or organization)
|
(IRS
Employer Identification Number)
|
One
Rockefeller Plaza, New York, New York
|
10020
|
(Address
of principal executive offices)
|
(Zip
Code)
|
Registrant’s
Telephone Number including Area Code
|
(212)
218-7910
|
Yes x
|
No
¨
|
Large
accelerated filer ¨
|
Accelerated
filer x
|
Non-accelerated
filer ¨
|
Yes ¨
|
No x
|
PART
I -
|
FINANCIAL
INFORMATION
|
||
ITEM
1
|
Financial
Statements
|
||
Consolidated
Statements of Operations (unaudited)
|
|||
13
and 39 Weeks Ended September 1, 2007 and September 2, 2006
|
3
|
||
Consolidated
Balance Sheets (unaudited)
|
|||
September
1, 2007 and December 2, 2006
|
4
|
||
Consolidated
Statements of Changes in Stockholders’ Equity (unaudited)
|
|||
39
Weeks Ended September 1, 2007 and September 2, 2006
|
5
|
||
Consolidated
Statements of Cash Flows (unaudited)
|
|||
39
Weeks Ended September 1, 2007 and September 2, 2006
|
6
|
||
Notes
to Consolidated Financial Statements (unaudited)
|
7-19
|
||
ITEM
2
|
Management’s
Discussion and Analysis of
|
||
Financial
Condition and Results of Operations
|
20-33
|
||
ITEM
3
|
Quantitative
and Qualitative Disclosures About Market Risk
|
33
|
|
ITEM
4
|
Controls
and Procedures
|
34
|
|
PART
II -
|
OTHER
INFORMATION
|
||
ITEM
1
|
Legal
Proceedings
|
34-35
|
|
ITEM
1A
|
Risk
Factors
|
35
|
|
ITEM
6
|
Exhibits
|
35-37
|
|
SIGNATURES
|
38
|
PART
I
|
FINANCIAL
INFORMATION
|
ITEM
1.
|
FINANCIAL
STATEMENTS
|
For
the 13 Weeks Ended,
|
For
the 39 Weeks Ended,
|
|||||||||||||||
Sept.
1, 2007
|
Sept.
2, 2006
|
Sept.
1, 2007
|
Sept.
2, 2006
|
|||||||||||||
Landscape
nursery net sales
|
$ |
4,861
|
$ |
5,104
|
$ |
24,294
|
$ |
27,466
|
||||||||
Rental
revenue and property sales
|
7,287
|
12,593
|
24,336
|
18,513
|
||||||||||||
Total
revenue
|
12,148
|
17,697
|
48,630
|
45,979
|
||||||||||||
Costs
of landscape nursery sales
|
4,387
|
5,527
|
21,174
|
25,547
|
||||||||||||
Costs
related to rental revenue and property sales
|
3,483
|
4,830
|
10,590
|
9,562
|
||||||||||||
Total
costs of goods sold
|
7,870
|
10,357
|
31,764
|
35,109
|
||||||||||||
Gross
profit
|
4,278
|
7,340
|
16,866
|
10,870
|
||||||||||||
Selling,
general and administrative expenses
|
2,592
|
3,405
|
9,457
|
9,320
|
||||||||||||
Operating
profit
|
1,686
|
3,935
|
7,409
|
1,550
|
||||||||||||
Gain
on sale of Centaur Media common stock
|
476
|
-
|
2,873
|
-
|
||||||||||||
Interest
expense
|
(793 | ) | (732 | ) | (2,339 | ) | (2,259 | ) | ||||||||
Investment
income
|
2,105
|
584
|
3,018
|
1,571
|
||||||||||||
Income
before income tax provision
|
3,474
|
3,787
|
10,961
|
862
|
||||||||||||
Income
tax provision
|
1,191
|
1,188
|
3,993
|
98
|
||||||||||||
Net
income
|
$ |
2,283
|
$ |
2,599
|
$ |
6,968
|
$ |
764
|
||||||||
Basic
net income per common share
|
$ |
0.44
|
$ |
0.51
|
$ |
1.35
|
$ |
0.15
|
||||||||
Diluted
net income per common share
|
$ |
0.43
|
$ |
0.49
|
$ |
1.32
|
$ |
0.15
|
Sept.
1, 2007
|
Dec.
2, 2006
|
|||||||
ASSETS
|
||||||||
Current
Assets:
|
||||||||
Cash
and cash equivalents
|
$ |
5,011
|
$ |
2,265
|
||||
Short-term
investments, net
|
26,842
|
35,973
|
||||||
Accounts
receivable, less allowance of $146 and $143
|
4,365
|
2,559
|
||||||
Inventories,
net
|
28,629
|
30,579
|
||||||
Deferred
income taxes
|
1,294
|
2,331
|
||||||
Other
current assets
|
6,567
|
7,226
|
||||||
Total
current assets
|
72,708
|
80,933
|
||||||
Real
estate held for sale or lease, net
|
105,237
|
101,544
|
||||||
Property
and equipment, net
|
8,540
|
9,144
|
||||||
Investment
in Centaur Media, plc
|
13,757
|
18,592
|
||||||
Other
assets
|
12,953
|
6,402
|
||||||
Total
assets
|
$ |
213,195
|
$ |
216,615
|
||||
LIABILITIES
AND STOCKHOLDERS' EQUITY
|
||||||||
Current
Liabilities:
|
||||||||
Current
portion of long-term debt
|
$ |
2,260
|
$ |
1,197
|
||||
Accounts
payable and accrued liabilities
|
5,568
|
7,813
|
||||||
Deferred
revenue
|
4,808
|
6,245
|
||||||
Total
current liabilities
|
12,636
|
15,255
|
||||||
Long-term
debt
|
48,739
|
50,631
|
||||||
Deferred
income taxes
|
4,860
|
6,990
|
||||||
Other
noncurrent liabilities
|
4,380
|
4,125
|
||||||
Total
liabilities
|
70,615
|
77,001
|
||||||
Commitments
and contingencies (Note 8)
|
||||||||
Stockholders'
Equity:
|
||||||||
Common
stock, par value $0.01 per share, 10,000,000 shares
|
||||||||
authorized,
5,309,232 and 5,177,709 shares issued,
|
||||||||
respectively,
5,151,549 and 5,132,663 shares
|
||||||||
outstanding,
respectively
|
53
|
52
|
||||||
Additional
paid-in capital
|
101,415
|
98,549
|
||||||
Retained
earnings
|
39,345
|
32,377
|
||||||
Accumulated
other comprehensive income, net of tax
|
7,196
|
9,942
|
||||||
Treasury
stock, at cost, 157,683 and 45,046 shares, respectively
|
(5,429 | ) | (1,306 | ) | ||||
Total
stockholders' equity
|
142,580
|
139,614
|
||||||
Total
liabilities and stockholders' equity
|
$ |
213,195
|
$ |
216,615
|
Shares
of Common Stock Issued
|
Common
Stock
|
Additional Paid-in Capital
|
Retained
Earnings
|
Accumulated
Other Comprehensive Income
|
Treasury
Stock
|
Total
|
Total Comprehensive
Income (Loss)
|
||||||||||||||||||
Balance
at Dec. 3, 2005
|
4,999,604
|
$ |
50
|
$ |
95,339
|
$ |
32,809
|
$ |
4,659
|
$ |
-
|
$ |
132,857
|
||||||||||||
Exercise
of stock options
|
|||||||||||||||||||||||||
including
tax benefit of $866
|
102,605
|
1
|
1,679
|
-
|
-
|
-
|
1,680
|
||||||||||||||||||
Stock-based
compensation
|
|||||||||||||||||||||||||
expense
|
-
|
-
|
87
|
-
|
-
|
-
|
87
|
||||||||||||||||||
Net
income
|
-
|
-
|
-
|
764
|
-
|
-
|
764
|
$ |
764
|
||||||||||||||||
Other
comprehensive income
|
-
|
-
|
-
|
-
|
2,682
|
-
|
2,682
|
2,682
|
|||||||||||||||||
Balance
at Sept. 2, 2006
|
5,102,209
|
$ |
51
|
$ |
97,105
|
$ |
33,573
|
$ |
7,341
|
$ |
-
|
$ |
138,070
|
$ |
3,446
|
||||||||||
Balance
at Dec. 2, 2006
|
5,177,709
|
$ |
52
|
$ |
98,549
|
$ |
32,377
|
$ |
9,942
|
$ | (1,306 | ) | $ |
139,614
|
|||||||||||
Exercise
of stock options,
|
|||||||||||||||||||||||||
including
tax benefit of $949,
|
|||||||||||||||||||||||||
and
shares tendered related to
|
|||||||||||||||||||||||||
stock
options exercised
|
131,523
|
1
|
2,771
|
-
|
-
|
(2,568 | ) |
204
|
|||||||||||||||||
Stock-based
compensation
|
|||||||||||||||||||||||||
expense
|
-
|
-
|
95
|
-
|
-
|
-
|
95
|
||||||||||||||||||
Repurchase
of common stock
|
-
|
-
|
-
|
-
|
-
|
(1,555 | ) | (1,555 | ) | ||||||||||||||||
Net
income
|
-
|
-
|
-
|
6,968
|
-
|
-
|
6,968
|
$ |
6,968
|
||||||||||||||||
Reclassification
for gains on
|
|||||||||||||||||||||||||
the sale of Centaur Media, plc
|
|||||||||||||||||||||||||
included in net income
|
-
|
-
|
-
|
-
|
(1,868 | ) |
-
|
(1,868 | ) | (1,868 | ) | ||||||||||||||
Other
comprehensive loss
|
-
|
-
|
-
|
-
|
(878 | ) |
-
|
(878 | ) | (878 | ) | ||||||||||||||
Balance
at Sept. 1, 2007
|
5,309,232
|
$ |
53
|
$ |
101,415
|
$ |
39,345
|
$ |
7,196
|
$ | (5,429 | ) | $ |
142,580
|
$ |
4,222
|
|||||||||
See
Notes to Consolidated Financial Statements.
|
For
the 39 Weeks Ended,
|
||||||||
Sept.
1, 2007
|
Sept.
2, 2006
|
|||||||
Operating
activities:
|
||||||||
Net
income
|
$ |
6,968
|
$ |
764
|
||||
Adjustments
to reconcile net income to net cash
|
||||||||
provided
by operating activities:
|
||||||||
Depreciation
and amortization
|
4,308
|
3,933
|
||||||
Gain
on sales of properties
|
(11,307 | ) | (6,960 | ) | ||||
Gain
on sale of common stock in Centaur Media, plc
|
(2,873 | ) |
-
|
|||||
Deferred
income taxes
|
(620 | ) |
27
|
|||||
Taxes
in other comprehensive income reclassified into net income
|
1,022
|
-
|
||||||
Provision
for inventory losses
|
655
|
727
|
||||||
Unrealized
loss (gain) on trading securities
|
393
|
(154 | ) | |||||
Stock
based compensation expense
|
95
|
87
|
||||||
Amortization
of debt issuance costs
|
75
|
62
|
||||||
Provision
for bad debts
|
14
|
83
|
||||||
Equity
income from investment in agricultural cooperative
|
(7 | ) | (151 | ) | ||||
Changes
in assets and liabilities:
|
||||||||
Short-term
investments
|
8,738
|
9,388
|
||||||
Accounts
receivable
|
(1,820 | ) | (1,843 | ) | ||||
Inventories
|
1,295
|
2,932
|
||||||
Other
current assets
|
653
|
(1,500 | ) | |||||
Accounts
payable and accrued liabilities
|
(1,625 | ) | (146 | ) | ||||
Payment
of employee withholding taxes on stock options exercised
|
(994 | ) |
-
|
|||||
Mortgage
escrow accounts
|
(677 | ) | (28 | ) | ||||
Deferred
revenue
|
608
|
1,002
|
||||||
Other,
net
|
(214 | ) | (92 | ) | ||||
Net
cash provided by operating activities
|
4,687
|
8,131
|
||||||
Investing
activities:
|
||||||||
Proceeds
from sales of properties, net of expenses
|
11,361
|
14,009
|
||||||
Increase
in cash held in escrow by a third party
|
(6,400 | ) |
-
|
|||||
Additions
to real estate held for sale or lease
|
(8,895 | ) | (21,114 | ) | ||||
Proceeds
from sale of common stock in Centaur Media, plc
|
3,467
|
-
|
||||||
Additions
to property and equipment
|
(398 | ) | (342 | ) | ||||
Proceeds
from distribution from Shemin Nurseries Holding Corp.
|
189
|
-
|
||||||
Net
cash used in investing activities
|
(676 | ) | (7,447 | ) | ||||
Financing
activities:
|
||||||||
Repurchase
of common stock
|
(1,555 | ) |
-
|
|||||
Tax
benefit of stock options exercised
|
949
|
866
|
||||||
Payments
of debt
|
(908 | ) | (736 | ) | ||||
Exercise
of stock options
|
249
|
814
|
||||||
Net
cash (used in) provided by financing activities
|
(1,265 | ) |
944
|
|||||
Net
increase in cash and cash equivalents
|
2,746
|
1,628
|
||||||
Cash
and cash equivalents at beginning of period
|
2,265
|
1,207
|
||||||
Cash
and cash equivalents at end of period
|
$ |
5,011
|
$ |
2,835
|
For
the 13 Weeks Ended,
|
For
the 39 Weeks Ended,
|
|||||||||||||||
Sept.
1, 2007
|
Sept.
2, 2006
|
Sept.
1, 2007
|
Sept.
2, 2006
|
|||||||||||||
Total
revenue:
|
||||||||||||||||
Landscape
nursery net sales
|
$ |
4,861
|
$ |
5,104
|
$ |
24,294
|
$ |
27,466
|
||||||||
Rental
revenue and property sales
|
7,287
|
12,593
|
24,336
|
18,513
|
||||||||||||
$ |
12,148
|
$ |
17,697
|
$ |
48,630
|
$ |
45,979
|
|||||||||
Operating
profit (loss):
|
||||||||||||||||
Landscape
nursery
|
$ | (679 | ) | $ | (1,572 | ) | $ | (884 | ) | $ | (1,986 | ) | ||||
Real
estate
|
3,192
|
6,776
|
11,701
|
6,612
|
||||||||||||
Industry
segment totals
|
2,513
|
5,204
|
10,817
|
4,626
|
||||||||||||
General
corporate expense
|
(827 | ) | (1,269 | ) | (3,408 | ) | (3,076 | ) | ||||||||
Operating
profit
|
1,686
|
3,935
|
7,409
|
1,550
|
||||||||||||
Gain
on sale of Centaur Media common stock
|
476
|
-
|
2,873
|
-
|
||||||||||||
Interest
expense
|
(793 | ) | (732 | ) | (2,339 | ) | (2,259 | ) | ||||||||
Investment
income
|
2,105
|
584
|
3,018
|
1,571
|
||||||||||||
Income
before income tax provision
|
$ |
3,474
|
$ |
3,787
|
$ |
10,961
|
$ |
862
|
Identifiable
assets:
|
Sept.
1, 2007
|
Dec.
2, 2006
|
||||||
Landscape
nursery
|
$ |
41,468
|
$ |
42,065
|
||||
Real
estate
|
121,507
|
110,384
|
||||||
Industry
segment totals
|
162,975
|
152,449
|
||||||
General
corporate (consists primarily of investments)
|
50,220
|
64,166
|
||||||
Total
assets
|
$ |
213,195
|
$ |
216,615
|
Sept.
1, 2007
|
Dec.
2, 2006
|
|||||||
Nonrecourse
mortgages:
|
||||||||
8.54%,
due July 1, 2009
|
$ |
7,608
|
$ |
7,681
|
||||
6.08%,
due January 1, 2013
|
8,882
|
9,042
|
||||||
6.30%,
due May 1, 2014
|
1,111
|
1,208
|
||||||
5.73%,
due July 1, 2015
|
20,794
|
20,983
|
||||||
8.13%,
due April 1, 2016
|
5,341
|
5,497
|
||||||
7.0%,
due October 1, 2017
|
7,023
|
7,139
|
||||||
Total
nonrecourse mortgages
|
50,759
|
51,550
|
||||||
Capital
leases
|
240
|
278
|
||||||
Total
|
50,999
|
51,828
|
||||||
Less:
current portion
|
(2,260 | ) | (1,197 | ) | ||||
Total
long-term debt
|
$ |
48,739
|
$ |
50,631
|
For
the 39 Weeks Ended,
|
|||
Sept.
1, 2007
|
Sept.
2, 2006
|
||
Expected
volatility
|
43.43%
|
40.83%
to 43.31%
|
|
Risk
free interest rate
|
4.65%
|
5.03%
to 5.10%
|
|
Option
term
|
8.8
years
|
7
to 8.8 years
|
|
Dividend
yield
|
none
|
none
|
For
the 39 Weeks Ended,
|
||||||||||||||||
September
1, 2007
|
September
2, 2006
|
|||||||||||||||
Vested
Options
|
Number
of Shares
|
Weighted
Avg. Exercise Price
|
Number
of Shares
|
Weighted
Avg. Exercise Price
|
||||||||||||
Outstanding
at beginning of period
|
347,300
|
$ |
13.84
|
503,857
|
$ |
12.65
|
||||||||||
Exercised
|
(131,523 | ) |
13.86
|
(102,605 | ) |
7.94
|
||||||||||
Vested
|
14,601
|
19.71
|
21,548
|
16.59
|
||||||||||||
Outstanding
at end of period
|
230,378
|
14.21
|
422,800
|
13.99
|
Range
of Exercise Prices for Vested Options
|
Outstanding
at Sept. 1, 2007
|
Weighted
Avg. Exercise Price
|
Weighted
Avg. Remaining Contractual Life
(in
years)
|
Total
Fair Value
(in
thousands)
|
||||||||||||
$11.00-$18.00 | 216,892 | $ | 13.52 | 2.4 | $ | 1,175 | ||||||||||
Over $24.00 | 13,486 | 25.21 | 7.2 | 154 | ||||||||||||
|
230,378
|
|
14.21
|
2.7
|
$
|
1,329
|
For
the 39 Weeks Ended,
|
||||||||||||||||
September
1, 2007
|
September
2, 2006
|
|||||||||||||||
Nonvested
Options
|
Number
of Shares
|
Weighted
Avg. Exercise Price
|
Number
of Shares
|
Weighted
Avg. Exercise Price
|
||||||||||||
Nonvested
at beginning of period
|
28,741
|
$ |
25.27
|
36,816
|
$ |
17.78
|
||||||||||
Granted
|
4,208
|
38.00
|
14,140
|
31.01
|
||||||||||||
Vested
|
(14,601 | ) |
19.71
|
(21,548 | ) |
16.59
|
||||||||||
Forfeited
|
-
|
-
|
(667 | ) |
14.35
|
|||||||||||
Nonvested
at end of period
|
18,348
|
32.62
|
28,741
|
25.27
|
Range
of Exercise Prices for Nonvested Options
|
Outstanding
at Sept. 1, 2007
|
Weighted
Avg. Exercise Price
|
Weighted
Avg. Remaining Contractual Life
(in
years)
|
Total
Fair Value
(in
thousands)
|
||||||||||||
Over
$24.00
|
18,348
|
$ |
32.62
|
9.0
|
$ |
332
|
Number
of option holders at September 1, 2007
|
19
|
For
the 13 Weeks Ended,
|
For
the 39 Weeks Ended,
|
|||||||||||||||
Sept.
1, 2007
|
Sept.
2, 2006
|
Sept.
1, 2007
|
Sept.
2, 2006
|
|||||||||||||
Net
income as reported for computation
|
||||||||||||||||
of basic and diluted per share results
|
$ |
2,283
|
$ |
2,599
|
$ |
6,968
|
$ |
764
|
||||||||
Weighted
average shares outstanding for
|
||||||||||||||||
computation
of basic per share results
|
5,151,000
|
5,099,000
|
5,145,000
|
5,072,000
|
||||||||||||
Incremental
shares from assumed exercise
|
||||||||||||||||
of
Griffin stock options
|
103,000
|
168,000
|
129,000
|
182,000
|
||||||||||||
Weighted
average shares outstanding for
|
||||||||||||||||
computation
of diluted per share results
|
5,254,000
|
5,267,000
|
5,274,000
|
5,254,000
|
September
1, 2007
|
December
2, 2006
|
|||||||||||||||
Cost
|
Fair
Value
|
Cost
|
Fair
Value
|
|||||||||||||
U.S.
Treasury securities
|
$ |
20,864
|
$ |
20,900
|
$ |
-
|
$ |
-
|
||||||||
Federal
agency securities
|
5,132
|
5,189
|
12,289
|
12,440
|
||||||||||||
Certificates
of deposit
|
753
|
753
|
9,069
|
9,342
|
||||||||||||
Commercial
paper
|
-
|
-
|
14,129
|
14,191
|
||||||||||||
Total
short-term investments
|
$ |
26,749
|
$ |
26,842
|
$ |
35,487
|
$ |
35,973
|
For
the 13 Weeks Ended,
|
For
the 39 Weeks Ended,
|
|||||||||||||||
Sept.
1, 2007
|
Sept.
2, 2006
|
Sept.
1, 2007
|
Sept.
2, 2006
|
|||||||||||||
Dividend
income from Shemin Nurseries Holding Corp.
|
$ |
1,628
|
$ |
-
|
$ |
1,628
|
$ |
-
|
||||||||
Interest
and dividend income from short-term investments
|
158
|
180
|
369
|
315
|
||||||||||||
Net
realized gains on the sales of short-term investments
|
411
|
397
|
1,407
|
951
|
||||||||||||
Net
unrealized (loss) gain on short-term investments
|
(92 | ) |
7
|
(393 | ) |
154
|
||||||||||
Other
investment income
|
-
|
-
|
7
|
151
|
||||||||||||
$ |
2,105
|
$ |
584
|
$ |
3,018
|
$ |
1,571
|
For
the 39 Weeks Ended,
|
||||||||
Sept.
1, 2007
|
Sept.
2, 2006
|
|||||||
Balance
at beginning of period
|
$ |
9,942
|
$ |
4,659
|
||||
Reclassification
to recognize sale of shares and related
|
||||||||
gains
on Centaur Media, plc included in net income,
|
||||||||
net
of tax provision of $1,022
|
(1,868 | ) |
-
|
|||||
(Decrease)
increase in fair value at end of period of Centaur Media
|
||||||||
plc,
net of tax benefit of $551 and tax provision of $982,
respectively
|
(1,024 | ) |
1,824
|
|||||
Increase
in value of Centaur Media, plc, due to foreign currency
|
||||||||
exchange
rate changes, net of tax provision of $78 and $461,
|
||||||||
respectively
|
146
|
858
|
||||||
Balance
at end of period
|
$ |
7,196
|
$ |
7,341
|
Sept.
1, 2007
|
Dec.
2, 2006
|
|||||||
Nursery
stock
|
$ |
27,704
|
$ |
29,415
|
||||
Materials
and supplies
|
1,907
|
2,372
|
||||||
29,611
|
31,787
|
|||||||
Reserves
|
(982 | ) | (1,208 | ) | ||||
$ |
28,629
|
$ |
30,579
|
Estimated Useful
Lives
|
Sept.
1, 2007
|
Dec.
2, 2006
|
|||||||
Land
|
$ |
674
|
$ |
674
|
|||||
Land
improvements
|
10
to 20 years
|
5,507
|
5,478
|
||||||
Buildings
and improvements
|
10
to 40 years
|
3,060
|
3,060
|
||||||
Machinery
and equipment
|
3
to 20 years
|
17,389
|
17,231
|
||||||
26,630
|
26,443
|
||||||||
Accumulated
depreciation
|
(18,090 | ) | (17,299 | ) | |||||
$ |
8,540
|
$ |
9,144
|
September
1, 2007
|
|||||||||||||
Estimated Useful
Lives
|
Held
for Sale
|
Held
for Lease
|
Total
|
||||||||||
Land
|
$ |
1,696
|
$ |
6,437
|
$ |
8,133
|
|||||||
Land
improvements
|
15
years
|
12
|
6,113
|
6,125
|
|||||||||
Buildings
and improvements
|
10
to 40 years
|
-
|
88,380
|
88,380
|
|||||||||
Tenant
improvements
|
Shorter
of useful life or terms of related lease
|
-
|
9,596
|
9,596
|
|||||||||
Development
costs
|
6,704
|
11,319
|
18,023
|
||||||||||
8,412
|
121,845
|
130,257
|
|||||||||||
Accumulated
depreciation
|
-
|
(25,020 | ) | (25,020 | ) | ||||||||
$ |
8,412
|
$ |
96,825
|
$ |
105,237
|
December
2, 2006
|
|||||||||||||
Estimated Useful
Lives
|
Held
for Sale
|
Held
for Lease
|
Total
|
||||||||||
Land
|
$ |
1,720
|
$ |
6,396
|
$ |
8,116
|
|||||||
Land
improvements
|
15
years
|
12
|
5,614
|
5,626
|
|||||||||
Buildings
and improvements
|
10
to 40 years
|
-
|
81,857
|
81,857
|
|||||||||
Tenant
improvements
|
Shorter
of useful life or terms of related lease
|
-
|
9,034
|
9,034
|
|||||||||
Development
costs
|
7,179
|
12,056
|
19,235
|
||||||||||
8,911
|
114,957
|
123,868
|
|||||||||||
Accumulated
depreciation
|
-
|
(22,324 | ) | (22,324 | ) | ||||||||
$ |
8,911
|
$ |
92,633
|
$ |
101,544
|
ITEM
2.
|
MANAGEMENT’S
DISCUSSION AND ANALYSIS OF FINANCIAL
|
CONDITION
AND RESULTS OF OPERATIONS
|
2007
|
2006
|
|||||||
Third
Qtr.
|
Third
Qtr.
|
|||||||
(amounts
in thousands)
|
||||||||
Rental
revenue
|
$ |
3,489
|
$ |
2,960
|
||||
Costs
related to rental revenue excluding
|
||||||||
depreciation
and amortization expense (a)
|
1,472
|
1,202
|
||||||
Profit
from leasing activities before general and
|
||||||||
administrative
expenses and before depreciation
|
||||||||
and
amortization expense (a)
|
2,017
|
1,758
|
||||||
Revenue
from property sales
|
3,798
|
9,633
|
||||||
Costs
related to property sales
|
900
|
2,673
|
||||||
Gain
from property sales
|
2,898
|
6,960
|
||||||
Profit
from leasing activities and gain from property sales
|
||||||||
before
general and administrative expenses and before
|
||||||||
depreciation
and and amortization expense (a)
|
4,915
|
8,718
|
||||||
General
and administrative expenses excluding depreciation
|
||||||||
and amortization expense (a)
|
(604 | ) | (981 | ) | ||||
Profit
before depreciation and amortization expense (a)
|
4,311
|
7,737
|
||||||
Depreciation
and amortization expense related to costs of
|
||||||||
rental revenue
|
(1,111 | ) | (955 | ) | ||||
Depreciation
and amortization expense - other
|
(8 | ) | (6 | ) | ||||
Operating
profit
|
$ |
3,192
|
$ |
6,776
|
(a)
|
The
costs related to rental revenue excluding depreciation and amortization
expense, profit from leasing activities before general and administrative
expenses and before depreciation and amortization expense, general
and
administrative expenses excluding depreciation and amortization
expense,
and profit before depreciation and amortization expense are disclosures
not in conformity with accounting principles generally accepted
in the
United States of America. They are presented because Griffin
believes they are useful financial indicators for measuring the
results in
its real estate business segment. However, they should not be
considered as an alternative to operating profit as a measure
of operating
results in accordance with accounting principles generally accepted
in the
United States of America.
|
2007
|
2006
|
|||||||
Third
Qtr.
|
Third
Qtr.
|
|||||||
(amounts
in thousands)
|
||||||||
Net
sales and other revenue
|
$ |
4,861
|
$ |
5,104
|
||||
Cost
of goods sold
|
4,387
|
5,527
|
||||||
Gross
profit (loss)
|
474
|
(423 | ) | |||||
Selling,
general and administrative expenses
|
1,153
|
1,149
|
||||||
Operating
loss
|
$ | (679 | ) | $ | (1,572 | ) |
2007
|
2006
|
|||||||
Nine
Month Period
|
Nine
Month Period
|
|||||||
(amounts
in thousands)
|
||||||||
Rental
revenue
|
$ |
10,441
|
$ |
8,880
|
||||
Costs
related to rental revenue excluding
|
||||||||
depreciation
and amortization expense (a)
|
4,715
|
3,809
|
||||||
Profit
from leasing activities before general and
|
||||||||
administrative
expenses and before depreciation
|
||||||||
and
amortization expense (a)
|
5,726
|
5,071
|
||||||
Revenue
from property sales
|
13,895
|
9,633
|
||||||
Costs
related to property sales
|
2,588
|
2,673
|
||||||
Gain
from property sales
|
11,307
|
6,960
|
||||||
Profit
from leasing activities and gain from property sales
|
||||||||
before general and administrative expenses and before
|
||||||||
depreciation and amortization expense (a)
|
17,033
|
12,031
|
||||||
General
and administrative expenses excluding depreciation
|
||||||||
and amortization expense (a)
|
(2,018 | ) | (2,320 | ) | ||||
Profit
before depreciation and amortization expense (a)
|
15,015
|
9,711
|
||||||
Depreciation
and amortization expense related to costs of
|
||||||||
rental revenue
|
(3,287 | ) | (3,080 | ) | ||||
Depreciation
and amortization expense - other
|
(27 | ) | (19 | ) | ||||
Operating
profit
|
$ |
11,701
|
$ |
6,612
|
(a)
|
The
costs related to rental revenue excluding depreciation and
amortization
expense, profit from leasing activities before general and
administrative
expenses and before depreciation and amortization expense,
general and
administrative expenses excluding depreciation and amortization
expense,
and profit before depreciation and amortization expense are
disclosures
not in conformity with accounting principles generally accepted
in the
United States of America. They are presented because Griffin
believes they are useful financial indicators for measuring
the results in
its real estate business segment. However, they should not be
considered as an alternative to operating profit as a measure
of operating
results in accordance with accounting principles generally
accepted in the
United States of America.
|
2007
|
2006
|
|||||||
Nine
Month Period
|
Nine
Month Period
|
|||||||
(amounts
in thousands)
|
||||||||
Net
sales and other revenue
|
$ |
24,294
|
$ |
27,466
|
||||
Cost
of goods sold
|
21,174
|
25,547
|
||||||
Gross
profit
|
3,120
|
1,919
|
||||||
Selling,
general and administrative expenses
|
4,004
|
3,905
|
||||||
Operating
loss
|
$ | (884 | ) | $ | (1,986 | ) |
Total
|
Due
Within One Year
|
Due
From 1-3 Years
|
Due
From 3-5 Years
|
Due
in More Than 5 Years
|
||||||||||||||||
(in
millions)
|
||||||||||||||||||||
Mortgages
|
$ |
70.7
|
$ |
5.4
|
$ |
15.4
|
$ |
7.3
|
$ |
42.6
|
||||||||||
Capital
Lease Obligations
|
0.3
|
0.2
|
0.1
|
-
|
-
|
|||||||||||||||
Operating
Lease Obligations
|
0.2
|
0.2
|
-
|
-
|
-
|
|||||||||||||||
Purchase
Obligations (1)
|
3.3
|
3.3
|
-
|
-
|
-
|
|||||||||||||||
Other
(2)
|
2.2
|
-
|
-
|
-
|
2.2
|
|||||||||||||||
$ |
76.7
|
$ |
9.1
|
$ |
15.5
|
$ |
7.3
|
$ |
44.8
|
(1)
|
Includes
obligations for the construction of the shell of a new industrial
building
by Griffin Land, completion of tenant improvements, infrastructure
improvements in Tradeport and for the purchase of raw materials
by
Imperial.
|
(2)
|
Includes
Griffin’s deferred compensation plan and other postretirement benefit
liabilities.
|
ITEM
3.
|
QUANTITATIVE
AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISK
|
ITEM
4.
|
CONTROLS
AND PROCEDURES
|
PART
II
|
OTHER
INFORMATION
|
ITEM
1.
|
LEGAL
PROCEEDINGS
|
ITEM
1A.
|
RISK
FACTORS
|
ITEM
6
|
EXHIBITS
|
||
Exhibit
No.
|
Description
|
||
3.1
|
Form
of Amended and Restated Certificate of Incorporation of Griffin
Land &
Nurseries, Inc. (incorporated by reference to the Form 10 of
Griffin Land
& Nurseries, Inc., filed April 8, 1997, as
amended)
|
3.2
|
Form
of Bylaws of Griffin Land & Nurseries, Inc. (incorporated by reference
to the Form 10 of Griffin Land & Nurseries, Inc., filed April 8,
1997, as amended)
|
|
10.1
|
Form
of Tax Sharing Agreement among Culbro Corporation, Griffin
Land &
Nurseries, Inc. and General Cigar Holdings, Inc. (incorporated
by
reference to the Registration Statement on Form S-1 of General
Cigar
Holdings, Inc., filed December 24, 1996, as amended)
|
|
10.4
|
Form
of Agricultural Lease between Griffin Land & Nurseries, Inc. and
General Cigar Holdings, Inc. (incorporated by reference to
the
Registration Statement on Form S-1 of General Cigar Holdings,
Inc., filed
December 24, 1996, as amended)
|
|
10.6
|
Form
of 1997 Stock Option Plan of Griffin Land & Nurseries, Inc.
(incorporated by reference to the Form 10 of Griffin Land
& Nurseries,
Inc., filed April 8, 1997, as amended)
|
|
10.7
|
Form
of 401(k) Plan of Griffin Land & Nurseries, Inc. (incorporated by
reference to the Form 10 of Griffin Land & Nurseries, Inc., filed
April 8, 1997, as amended)
|
|
10.17
|
Loan
Agreement dated June 24, 1999 (incorporated by reference
to Form 10-Q
dated August 28, 1999, filed October 8, 1999)
|
|
10.21
|
Mortgage
Deed, Security Agreement, Financing Statement and Fixture
Filing with
Absolute Assignment of Rents and Leases dated September 17,
2002 between
Tradeport Development I, LLC and Farm Bureau Life Insurance
Company
(incorporated by reference to Form 10-Q dated August 31,
2002, filed
October 11, 2002)
|
|
10.24
|
Mortgage
Deed and Security Agreement dated December 17, 2002 between
Griffin Center
Development IV, LLC and Webster Bank (incorporated by reference
to Form
10-K dated November 30, 2002, filed February 28, 2003)
|
|
10.28
|
Secured
Installment Note and First Amendment of Mortgage and Loan
Documents dated
April 16, 2004 among Tradeport Development I, LLC, and Griffin
Land &
Nurseries, Inc. and Farm Bureau Life Insurance Company (incorporated
by
reference to Form 10-Q dated May 29, 2004, filed July 13,
2004)
|
|
10.29
|
Mortgage
Deed Security Agreement, Fixture Filing, Financing Statement
and
Assignment of Leases and Rents dated July 6, 2005 by Tradeport
Development
II, LLC in favor of First Sunamerica Life Insurance Company
(incorporated
by reference to Form 10-Q dated May 28, 2005, filed on November
2,
2005)
|
|
10.30
|
Promissory
Note dated July 6, 2005 (incorporated by reference to Form
10-Q dated May
28, 2005, filed on November 2,
2005)
|
10.31
|
Guaranty
Agreement as of July 6, 2005 by Griffin Land & Nurseries, Inc. in
favor of Sunamerica Life Insurance Company (incorporated
by reference to
Form 10-Q dated May 28, 2005, filed on November 2,
2005)
|
|
10.32
|
Amended
and Restated Mortgage Deed Security Agreement, Fixture Filing,
Financing
Statement and Assignment of Leases and Rents dated November
16, 2006 by
Tradeport Development II, LLC in favor of First Sunamerica
Life Insurance
Company (incorporated by reference to Form 10-K dated December
2, 2006,
filed February 15, 2007)
|
|
10.33
|
Amended
and Restated Promissory Note dated November 16, 2006 (incorporated
by
reference to Form 10-K dated December 2, 2006, filed February
15,
2007)
|
|
10.34
|
Guaranty
Agreement as of November 16, 2006 by Griffin Land & Nurseries, Inc. in
favor of Sunamerica Life Insurance Company (incorporated
by reference to
Form 10-K dated December 2, 2006, filed February 15,
2007)
|
|
14
|
Griffin
Land & Nurseries, Inc. Code of Ethics (incorporated by reference
to
Form 10-K dated November 29, 2003, filed February 25,
2004)
|
|
21
|
Subsidiaries
of Griffin Land & Nurseries, Inc. (incorporated by reference to the
Form 10 of Griffin Land & Nurseries, Inc., filed April 8, 1997, as
amended)
|
|
31.1
|
Certifications
of Chief Executive Officer Pursuant to Rule 13a-14(a), as
Adopted Pursuant
to Section 302 of the Sarbanes-Oxley Act of 2002
|
|
31.2
|
Certifications
of Chief Financial Officer Pursuant to Rule 13a-14(a), as
Adopted Pursuant
to Section 302 of the Sarbanes Oxley Act of 2002
|
|
32.1
|
Certifications
of Chief Executive Officer Pursuant to 18 U.S.C
|
|
Section
1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley
Act of
2002
|
||
32.2
|
Certifications
of Chief Financial Officer Pursuant to 18 U.S.C
|
|
Section
1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley
Act of
2002
|
GRIFFIN
LAND & NURSERIES, INC.
|
||
/s/
FREDERICK M. DANZIGER
|
||
Date: October
11, 2007
|
Frederick
M. Danziger
|
|
President
and Chief Executive Officer
|
||
/s/ ANTHONY J. GALICI
|
||
Date: October
11, 2007
|
Anthony
J. Galici
|
|
Vice
President, Chief Financial Officer and
Secretary
|