X
|
QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934 FOR THE QUARTERLY PERIOD ENDED August 29, 2009
|
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
|
¨
|
Smaller
reporting company
|
¨
|
Yes ¨
|
No ¨
|
Yes ¨
|
No x
|
PART
I -
|
FINANCIAL
INFORMATION
|
||
ITEM
1
|
Financial
Statements
|
||
Consolidated
Statements of Operations (unaudited)
|
|||
13
and 39 Weeks Ended August 29, 2009 and August 30, 2008
|
3
|
||
Consolidated
Balance Sheets (unaudited)
|
|||
August
29, 2009 and November 29, 2008
|
4
|
||
Consolidated
Statements of Changes in Stockholders’ Equity (unaudited)
|
|||
39
Weeks Ended August 29, 2009 and August 30, 2008
|
5
|
||
Consolidated
Statements of Cash Flows (unaudited)
|
|||
39
Weeks Ended August 29, 2009 and August 30, 2008
|
6
|
||
Notes
to Consolidated Financial Statements (unaudited)
|
7-23
|
||
ITEM
2
|
Management’s
Discussion and Analysis of
|
||
Financial
Condition and Results of Operations
|
24-36
|
||
ITEM
3
|
Quantitative
and Qualitative Disclosures About Market Risk
|
36
|
|
ITEM
4
|
Controls
and Procedures
|
36-37
|
|
PART
II -
|
OTHER
INFORMATION
|
||
ITEM
1
|
Not
Applicable
|
||
ITEM
1A
|
Risk
Factors
|
38
|
|
ITEMS
2-5
|
Not
Applicable
|
||
ITEM
6
|
Exhibits
|
38-40
|
|
SIGNATURES
|
41
|
PART
I
|
FINANCIAL
INFORMATION
|
ITEM
1.
|
FINANCIAL
STATEMENTS
|
For
the 13 Weeks Ended,
|
For
the 39 Weeks Ended,
|
|||||||||||||||
August
29, 2009
|
August
30, 2008
|
August
29, 2009
|
August
30, 2008
|
|||||||||||||
Landscape
nursery net sales and other revenue
|
$ | 3,528 | $ | 3,824 | $ | 19,545 | $ | 21,301 | ||||||||
Rental
revenue and property sales
|
4,246 | 4,040 | 12,570 | 12,108 | ||||||||||||
Total
revenue
|
7,774 | 7,864 | 32,115 | 33,409 | ||||||||||||
Costs
of landscape nursery sales and other revenue
|
3,715 | 3,797 | 18,429 | 18,716 | ||||||||||||
Costs
related to rental revenue and property sales
|
3,021 | 2,625 | 9,350 | 8,926 | ||||||||||||
Total
costs of goods sold and costs related to rental revenue and property
sales
|
6,736 | 6,422 | 27,779 | 27,642 | ||||||||||||
Gross
profit
|
1,038 | 1,442 | 4,336 | 5,767 | ||||||||||||
Selling,
general and administrative expenses
|
2,596 | 2,924 | 8,725 | 9,345 | ||||||||||||
Operating
loss
|
(1,558 | ) | (1,482 | ) | (4,389 | ) | (3,578 | ) | ||||||||
Interest
expense
|
(880 | ) | (762 | ) | (2,506 | ) | (2,423 | ) | ||||||||
Investment
income
|
28 | 106 | 152 | 675 | ||||||||||||
Loss
before income tax benefit
|
(2,410 | ) | (2,138 | ) | (6,743 | ) | (5,326 | ) | ||||||||
Income
tax benefit
|
974 | 869 | 2,512 | 2,071 | ||||||||||||
Net
loss
|
$ | (1,436 | ) | $ | (1,269 | ) | $ | (4,231 | ) | $ | (3,255 | ) | ||||
Basic
net loss per common share
|
$ | (0.28 | ) | $ | (0.25 | ) | $ | (0.83 | ) | $ | (0.64 | ) | ||||
Diluted
net loss per common share
|
$ | (0.28 | ) | $ | (0.25 | ) | $ | (0.83 | ) | $ | (0.64 | ) | ||||
August
29, 2009
|
November
29, 2008
|
|||||||
ASSETS
|
||||||||
Current
Assets:
|
||||||||
Cash
and cash equivalents
|
$ | 9,372 | $ | 4,773 | ||||
Short-term
investments, net
|
453 | 8,624 | ||||||
Accounts
receivable, less allowance for doubtful accounts
|
||||||||
and
returns and allowances of $320 and $148
|
3,005 | 2,071 | ||||||
Inventories,
net
|
20,341 | 24,347 | ||||||
Deferred
income taxes
|
679 | 3,447 | ||||||
Other
current assets
|
6,010 | 5,537 | ||||||
Total
current assets
|
39,860 | 48,799 | ||||||
Real
estate held for sale or lease, net
|
129,393 | 113,948 | ||||||
Deferred
income taxes
|
4,053 | - | ||||||
Investment
in Centaur Media plc
|
3,305 | 3,374 | ||||||
Property
and equipment, net
|
2,815 | 6,437 | ||||||
Other
assets
|
10,064 | 9,117 | ||||||
Total
assets
|
$ | 189,490 | $ | 181,675 | ||||
LIABILITIES
AND STOCKHOLDERS' EQUITY
|
||||||||
Current
Liabilities:
|
||||||||
Current
portion of long-term debt
|
$ | 1,359 | $ | 8,661 | ||||
Accounts
payable and accrued liabilities
|
5,719 | 5,240 | ||||||
Deferred
revenue
|
1,697 | 1,175 | ||||||
Total
current liabilities
|
8,775 | 15,076 | ||||||
Long-term
debt
|
60,430 | 39,855 | ||||||
Deferred
income taxes
|
- | 1,257 | ||||||
Other
noncurrent liabilities
|
4,430 | 4,327 | ||||||
Total
liabilities
|
73,635 | 60,515 | ||||||
Commitments
and contingencies (Note 10)
|
||||||||
Stockholders'
Equity:
|
||||||||
Common
stock, par value $0.01 per share, 10,000,000 shares
|
||||||||
authorized,
5,469,402 and 5,455,382 shares issued,
|
||||||||
respectively,
and 5,082,436 and 5,068,416 shares outstanding,
|
||||||||
respectively
|
55 | 55 | ||||||
Additional
paid-in capital
|
104,503 | 103,997 | ||||||
Retained
earnings
|
24,133 | 29,888 | ||||||
Accumulated
other comprehensive income, net of tax
|
590 | 646 | ||||||
Treasury
stock, at cost, 386,966 shares
|
(13,426 | ) | (13,426 | ) | ||||
Total
stockholders' equity
|
115,855 | 121,160 | ||||||
Total
liabilities and stockholders' equity
|
$ | 189,490 | $ | 181,675 | ||||
Shares
of Common Stock Issued
|
Common
Stock
|
Additional
Paid-in
Capital
|
Retained
Earnings
|
Accumulated
Other
Comprehensive
Income
|
Treasury
Stock
|
Total
|
Total
Comprehensive
Loss
|
|||||||||||||||||||||||||
Balance
at December 1, 2007
|
5,321,232 | $ | 53 | $ | 101,703 | $ | 40,199 | $ | 5,002 | $ | (8,054 | ) | $ | 138,903 | ||||||||||||||||||
Exercise
of stock options,
|
||||||||||||||||||||||||||||||||
including shares tendered
|
||||||||||||||||||||||||||||||||
related to stock options
|
||||||||||||||||||||||||||||||||
exercised
|
115,930 | 1 | 1,556 | - | - | (2,193 | ) | (636 | ) | |||||||||||||||||||||||
Stock-based
compensation
|
||||||||||||||||||||||||||||||||
expense
|
- | - | 133 | - | - | - | 133 | |||||||||||||||||||||||||
Repurchase
of common stock
|
- | - | - | - | - | (2,880 | ) | (2,880 | ) | |||||||||||||||||||||||
Dividends
declared, $0.30 per
|
||||||||||||||||||||||||||||||||
share
|
- | - | - | (1,519 | ) | - | - | (1,519 | ) | |||||||||||||||||||||||
Net
loss
|
- | - | - | (3,255 | ) | - | - | (3,255 | ) | $ | (3,255 | ) | ||||||||||||||||||||
Other
comprehensive loss,
|
||||||||||||||||||||||||||||||||
from
Centaur Media plc,
|
||||||||||||||||||||||||||||||||
net
of tax
|
- | - | - | - | (2,208 | ) | - | (2,208 | ) | (2,208 | ) | |||||||||||||||||||||
Balance
at August 30, 2008
|
5,437,162 | $ | 54 | $ | 103,392 | $ | 35,425 | $ | 2,794 | $ | (13,127 | ) | $ | 128,538 | $ | (5,463 | ) | |||||||||||||||
Balance
at November 29, 2008
|
5,455,382 | $ | 55 | $ | 103,997 | $ | 29,888 | $ | 646 | $ | (13,426 | ) | $ | 121,160 | ||||||||||||||||||
Exercise
of stock options
|
14,020 | - | 232 | - | - | - | 232 | |||||||||||||||||||||||||
Stock-based
compensation
|
||||||||||||||||||||||||||||||||
expense
|
- | - | 274 | - | - | - | 274 | |||||||||||||||||||||||||
Dividends
declared, $0.30 per
|
||||||||||||||||||||||||||||||||
share
|
- | - | - | (1,524 | ) | - | - | (1,524 | ) | |||||||||||||||||||||||
Net
loss
|
- | - | - | (4,231 | ) | - | - | (4,231 | ) | $ | (4,231 | ) | ||||||||||||||||||||
Other
comprehensive loss,
|
||||||||||||||||||||||||||||||||
from
cash flow hedging
|
||||||||||||||||||||||||||||||||
transactions,
net of tax
|
- | - | - | - | (11 | ) | - | (11 | ) | (11 | ) | |||||||||||||||||||||
Other
comprehensive loss,
|
||||||||||||||||||||||||||||||||
from
Centaur Media plc,
|
||||||||||||||||||||||||||||||||
net
of tax
|
- | - | - | - | (45 | ) | - | (45 | ) | (45 | ) | |||||||||||||||||||||
Balance
at August 29, 2009
|
5,469,402 | $ | 55 | $ | 104,503 | $ | 24,133 | $ | 590 | $ | (13,426 | ) | $ | 115,855 | $ | (4,287 | ) | |||||||||||||||
See Notes to Consolidated Financial Statements. |
For
the 39 Weeks Ended,
|
||||||||
August
29, 2009
|
August
30, 2008
|
|||||||
Operating
activities:
|
||||||||
Net
loss
|
$ | (4,231 | ) | $ | (3,255 | ) | ||
Adjustments
to reconcile net loss to net cash
|
||||||||
provided
by operating activities:
|
||||||||
Depreciation
and amortization
|
4,839 | 4,695 | ||||||
Deferred
income tax benefit
|
(2,512 | ) | (299 | ) | ||||
Provision
for inventory losses
|
1,129 | 550 | ||||||
Stock-based
compensation expense
|
274 | 133 | ||||||
Amortization
of debt issuance costs
|
143 | 75 | ||||||
Provision
for bad debts
|
104 | 35 | ||||||
Change
in unrealized gains on trading securities
|
78 | 14 | ||||||
Equity
income from equity investment
|
(7 | ) | (6 | ) | ||||
Gain
on sales of properties
|
- | (903 | ) | |||||
Payment
of employee withholding taxes on stock options exercised
|
- | (769 | ) | |||||
Changes
in assets and liabilities:
|
||||||||
Short-term
investments
|
8,093 | 12,238 | ||||||
Accounts
receivable
|
(1,038 | ) | (1,648 | ) | ||||
Inventories
|
2,877 | (1,029 | ) | |||||
Other
current assets
|
(473 | ) | (2,128 | ) | ||||
Accounts
payable and accrued liabilities
|
(199 | ) | 178 | |||||
Deferred
revenue
|
238 | 718 | ||||||
Other
noncurrent assets and noncurrent liabilities, net
|
(330 | ) | (290 | ) | ||||
Net
cash provided by operating activities
|
8,985 | 8,309 | ||||||
Investing
activities:
|
||||||||
Additions
to real estate held for sale or lease
|
(15,487 | ) | (8,664 | ) | ||||
Additions
to property and equipment
|
(40 | ) | (407 | ) | ||||
Net
cash used in investing activities
|
(15,527 | ) | (9,071 | ) | ||||
Financing
activities:
|
||||||||
Proceeds
from borrowings
|
21,636 | - | ||||||
Payments
of debt
|
(8,363 | ) | (936 | ) | ||||
Dividends
paid to stockholders
|
(1,523 | ) | (1,522 | ) | ||||
Debt
issuance costs
|
(841 | ) | - | |||||
Exercise
of stock options
|
232 | 133 | ||||||
Repurchase
of common stock
|
- | (2,880 | ) | |||||
Net
cash provided by (used in) financing activities
|
11,141 | (5,205 | ) | |||||
Net
increase (decrease) in cash and cash equivalents
|
4,599 | (5,967 | ) | |||||
Cash
and cash equivalents at beginning of period
|
4,773 | 11,120 | ||||||
Cash
and cash equivalents at end of period
|
$ | 9,372 | $ | 5,153 | ||||
For
the 13 Weeks Ended,
|
For
the 39 Weeks Ended,
|
||||||||||||||||
August
29, 2009
|
August
30, 2008
|
August
29, 2009
|
August
30, 2008
|
||||||||||||||
Total
revenue:
|
|||||||||||||||||
Landscape
nursery net sales and other revenue
|
$ | 3,528 | $ | 3,824 | $ | 19,545 | $ | 21,301 | |||||||||
Rental
revenue and property sales
|
4,246 | 4,040 | 12,570 | 12,108 | |||||||||||||
$ | 7,774 | $ | 7,864 | $ | 32,115 | $ | 33,409 | ||||||||||
Operating
(loss) profit:
|
|||||||||||||||||
Landscape
nursery
|
$ | (1,175 | ) | $ | (1,096 | ) | $ | (2,223 | ) | $ | (1,250 | ) | |||||
Real
estate
|
618 | 606 | 1,196 | 992 | |||||||||||||
Industry
segment totals
|
(557 | ) | (490 | ) | (1,027 | ) | (258 | ) | |||||||||
General
corporate expense
|
(1,001 | ) | (992 | ) | (3,362 | ) | (3,320 | ) | |||||||||
Operating
loss
|
(1,558 | ) | (1,482 | ) | (4,389 | ) | (3,578 | ) | |||||||||
Interest
expense
|
(880 | ) | (762 | ) | (2,506 | ) | (2,423 | ) | |||||||||
Investment
income
|
28 | 106 | 152 | 675 | |||||||||||||
Loss
before income tax benefit
|
$ | (2,410 | ) | $ | (2,138 | ) | $ | (6,743 | ) | $ | (5,326 | ) | |||||
Identifiable
assets:
|
August
29, 2009
|
November
29, 2008
|
||||||
Landscape
nursery
|
$ | 29,151 | $ | 32,984 | ||||
Real
estate
|
139,921 | 125,611 | ||||||
Industry
segment totals
|
169,072 | 158,595 | ||||||
General
corporate
|
20,418 | 23,080 | ||||||
Total
assets
|
$ | 189,490 | $ | 181,675 | ||||
Balance
at beginning of period
|
$ | 7,311 | |||
Reductions
to the reserve related to disposal of inventories
|
(7,106 | ) | |||
Reductions
to the reserve due to the difference between estimated and actual amounts
recovered
|
(205 | ) | |||
Balance
at end of period
|
$ | - | |||
Balance
of fiscal 2009
|
$50
|
||
Fiscal
2010
|
$216
|
||
Fiscal
2011
|
$267
|
||
Fiscal
2012
|
$400
|
||
Fiscal
2013
|
$600
|
||
Later
years
|
$1,000
|
August
29, 2009
|
November
29, 2008
|
|||||||
Nursery
stock
|
$ | 20,304 | $ | 30,051 | ||||
Materials
and supplies
|
1,029 | 2,017 | ||||||
21,333 | 32,068 | |||||||
Reserves
|
(992 | ) | (7,721 | ) | ||||
$ | 20,341 | $ | 24,347 | |||||
August
29, 2009
|
||||||||||||
Estimated Useful
Lives
|
Held
for Sale
|
Held
for Lease
|
Total
|
|||||||||
Land
|
$ | 1,634 | $ | 8,048 | $ | 9,682 | ||||||
Land
improvements
|
10
to 30 years
|
691 | 12,920 | 13,611 | ||||||||
Buildings
and improvements
|
10
to 40 years
|
- | 124,560 | 124,560 | ||||||||
Tenant
improvements
|
Shorter
of useful life or terms of related lease
|
- | 12,522 | 12,522 | ||||||||
Development
costs
|
6,542 | 4,203 | 10,745 | |||||||||
8,867 | 162,253 | 171,120 | ||||||||||
Accumulated
depreciation
|
- | (41,727 | ) | (41,727 | ) | |||||||
$ | 8,867 | $ | 120,526 | $ | 129,393 | |||||||
November
29, 2008
|
||||||||||||
Estimated Useful
Lives
|
Held
for Sale
|
Held
for Lease
|
Total
|
|||||||||
Land
|
$ | 1,634 | $ | 7,770 | $ | 9,404 | ||||||
Land
improvements
|
10
to 30 years
|
691 | 7,729 | 8,420 | ||||||||
Buildings
and improvements
|
10
to 40 years
|
- | 103,651 | 103,651 | ||||||||
Tenant
improvements
|
Shorter
of useful life or terms of related lease
|
- | 11,464 | 11,464 | ||||||||
Development
costs
|
6,151 | 5,314 | 11,465 | |||||||||
8,476 | 135,928 | 144,404 | ||||||||||
Accumulated
depreciation
|
- | (30,456 | ) | (30,456 | ) | |||||||
$ | 8,476 | $ | 105,472 | $ | 113,948 | |||||||
August
29, 2009
|
November
29, 2008
|
|||||||||||||
Cost
|
Fair
Value
|
Cost
|
Fair
Value
|
|||||||||||
U.S.
Treasury securities
|
$ | 454 | $ | 453 | $ | 8,433 | $ | 8,510 | ||||||
Certificates
of deposit
|
- | - | 114 | 114 | ||||||||||
Total
short-term investments
|
$ | 454 | $ | 453 | $ | 8,547 | $ | 8,624 | ||||||
For
the 13 Weeks Ended,
|
For
the 39 Weeks Ended,
|
|||||||||||||
August
29, 2009
|
August
30, 2008
|
August
29, 2009
|
August
30, 2008
|
|||||||||||
Interest
and dividend income
|
$ | 28 | $ | 32 | $ | 115 | $ | 222 | ||||||
Net
realized gains on the sales of short-term investments
|
- | 41 | 108 | 461 | ||||||||||
Change
in unrealized gains on short-term investments
|
- | 33 | (78 | ) | (14 | ) | ||||||||
Other
investment income
|
- | - | 7 | 6 | ||||||||||
$ | 28 | $ | 106 | $ | 152 | $ | 675 | |||||||
August
29, 2009
|
November
29, 2008
|
||||||||
Nonrecourse
mortgages:
|
|||||||||
8.54%,
due July 1, 2009 (prepaid April 1, 2009)
|
$ | - | $ | 7,482 | |||||
6.08%,
due January 1, 2013
|
7,473 | 7,634 | |||||||
6.30%,
due May 1, 2014
|
830 | 939 | |||||||
5.73%,
due July 1, 2015
|
20,179 | 20,418 | |||||||
8.13%,
due April 1, 2016
|
4,877 | 5,060 | |||||||
7.0%,
due October 1, 2017
|
6,682 | 6,816 | |||||||
Variable
rate mortgage, due July 1, 2019
|
8,500 | - | |||||||
Total
nonrecourse mortgages
|
48,541 | 48,349 | |||||||
Variable
rate construction to permanent mortgage loan
|
10,636 | - | |||||||
Revolving
line of credit
|
2,500 | - | |||||||
Capital
leases
|
112 | 167 | |||||||
Total
|
61,789 | 48,516 | |||||||
Less:
current portion
|
(1,359 | ) | (8,661 | ) | |||||
Total
long-term debt
|
$ | 60,430 | $ | 39,855 | |||||
For
the 13 Weeks Ended,
|
For
the 39 Weeks Ended,
|
||||||||||||||
August
29, 2009
|
August
30, 2008
|
August
29, 2009
|
August
30, 2008
|
||||||||||||
Net
loss as reported for computation
|
|||||||||||||||
of
basic and diluted per share results
|
$ | (1,436 | ) | $ | (1,269 | ) | $ | (4,231 | ) | $ | (3,255 | ) | |||
Weighted
average shares outstanding for
|
|||||||||||||||
computation
of basic per share results
|
5,082,000 | 5,044,000 | 5,077,000 | 5,060,000 | |||||||||||
Incremental
shares from assumed exercise
|
|||||||||||||||
of
Griffin stock options (a)
|
- | - | - | - | |||||||||||
Weighted
average shares outstanding for
|
|||||||||||||||
computation
of diluted per share results
|
5,082,000 | 5,044,000 | 5,077,000 | 5,060,000 | |||||||||||
(a)
|
Incremental
shares from the assumed exercise of Griffin stock options are not included
in periods where the inclusion of such shares would be
anti-dilutive. The incremental shares from the assumed exercise
of stock options in the thirteen and thirty-nine weeks ended August 29,
2009 would have been 33,000 and 36,000, respectively. The
incremental shares from the assumed exercise of stock options in the
thirteen and thirty-nine weeks ended August 30, 2008 would have been
72,000 and 87,000, respectively.
|
For the 39 Weeks Ended, | ||||||||||
August 29, 2009 |
August
30, 2008
|
|||||||||
Number
of Options
|
Fair
Value per Option
|
Number
of Options
|
Fair
Value per Option
|
|||||||
22,500 | $ | 14.88 | 25,000 | $ | 14.82 | |||||
22,500 | $ | 14.40 | 4,704 | $ | 14.95 | |||||
15,000 | $ | 10.54 | ||||||||
8,514 | $ | 13.02 | ||||||||
1,749 | $ | 15.53 | ||||||||
For
the 39 Weeks Ended,
|
|||||
August 29, 2009 |
August
30, 2008
|
||||
Expected
volatility
|
37.7%
to 43.5%
|
38.6%
to 41.1%
|
|||
Risk
free interest rate
|
1.6%
to 2.7%
|
3.5%
|
|||
Expected
option term
|
5
to 8.5 years
|
7
to 8 years
|
|||
Annual
dividend yield
|
$0.40
|
$0.40
|
|||
For
the 39 Weeks Ended,
|
|||||||||||||||||
August
29, 2009
|
August
30, 2008
|
||||||||||||||||
Vested
Options
|
Number
of Shares
|
Weighted
Avg. Exercise Price
|
Number
of Shares
|
Weighted
Avg. Exercise Price
|
|||||||||||||
Outstanding
at beginning of period
|
89,368 | $ | 15.56 | 218,378 | $ | 14.13 | |||||||||||
Exercised
|
(14,020 | ) | $ | 16.59 | (115,930 | ) | $ | 13.43 | |||||||||
Vested
|
6,154 | $ | 34.57 | 5,140 | $ | 31.13 | |||||||||||
Granted
and vested
|
1,749 | $ | 34.30 | - | - | ||||||||||||
Forfeited
|
(2,118 | ) | $ | 31.06 | - | - | |||||||||||
Outstanding
at end of period
|
81,133 | $ | 16.82 | 107,588 | $ | 15.70 | |||||||||||
Range
of Exercise Prices for Vested Options
|
Outstanding
at
August
29, 2009
|
Weighted
Avg. Exercise Price
|
Weighted
Avg. Remaining Contractual Life
(in
years)
|
Total Intrinsic Value
|
Total Fair Value
|
||||||||||||||||||
$ | 11.00-$14.00 | 48,544 | $ | 11.95 | 1.2 | $ | 903 | $ | 239 | ||||||||||||||
$ | 15.00-$18.00 | 15,322 | $ | 16.80 | 2.1 | 210 | 98 | ||||||||||||||||
$ | 24.00-$39.00 | 17,267 | $ | 30.52 | 6.7 | 34 | 275 | ||||||||||||||||
81,133 | $ | 16.82 | 2.5 | $ | 1,147 | $ | 612 | ||||||||||||||||
For
the 39 Weeks Ended,
|
|||||||||||||||||
August
29, 2009
|
August
30, 2008
|
||||||||||||||||
Nonvested
Options
|
Number
of Shares
|
Weighted
Avg. Exercise Price
|
Number
of Shares
|
Weighted
Avg. Exercise Price
|
|||||||||||||
Nonvested
at beginning of period
|
40,684 | $ | 33.66 | 18,348 | $ | 32.62 | |||||||||||
Granted
|
68,514 | $ | 32.46 | 29,704 | $ | 34.03 | |||||||||||
Vested
|
(6,154 | ) | $ | 34.57 | (5,140 | ) | $ | 31.13 | |||||||||
Forfeited
|
(1,667 | ) | $ | 30.95 | (2,228 | ) | $ | 35.89 | |||||||||
Nonvested
at end of period
|
101,377 | $ | 32.84 | 40,684 | $ | 33.66 | |||||||||||
Range
of Exercise Prices for Nonvested Options
|
Outstanding
at
August
29, 2009
|
Weighted
Avg. Exercise Price
|
Weighted
Avg. Remaining Contractual Life
(in
years)
|
Total Intrinsic Value
|
Total Fair Value
|
||||||||||||||||||
$ | 28.00-$31.00 | 12,849 | $ | 29.12 | 8.8 | $ | 20 | $ | 183 | ||||||||||||||
$ | 33.00-$35.00 | 88,528 | $ | 33.38 | 9.1 | - | 1,240 | ||||||||||||||||
101,377 | $ | 32.84 | 9.0 | $ | 20 | $ | 1,423 | ||||||||||||||||
Number
of option holders at August 29, 2009
|
21 | |||
Balance
of Fiscal 2009
|
$92
|
||
Fiscal
2010
|
$349
|
||
Fiscal
2011
|
$263
|
||
Fiscal
2012
|
$141
|
||
Fiscal
2013
|
$56
|
||
Fiscal
2014
|
$7
|
For
the 39 Weeks Ended,
|
|||||||||
Aug.
29, 2009
|
Aug.
30, 2008
|
||||||||
Balance
at beginning of period
|
$ | 646 | $ | 5,002 | |||||
Decrease
in fair value of Centaur Media, net of taxes of ($85)
|
|||||||||
and
($874), respectively
|
(159 | ) | (1,622 | ) | |||||
Increase
(decrease) in fair value of Centaur Media, due to exchange
|
|||||||||
gain
(loss), net of taxes of $61 and ($315), respectively
|
114 | (586 | ) | ||||||
Decrease
in value of cash flow hedges, net of tax of ($6)
|
(11 | ) | - | ||||||
Balance
at end of period
|
$ | 590 | $ | 2,794 | |||||
Accumulated
other comprehensive income is comprised of the following:
|
|||||||||
Aug.
29, 2009
|
Nov.
29, 2008
|
||||||||
Change
in the value of Centaur Media plc
|
$ | 417 | $ | 462 | |||||
Actuarial
gain on postretirement benefit plan
|
184 | 184 | |||||||
Change
in value of cash flow hedges
|
(11 | ) | - | ||||||
$ | 590 | $ | 646 | ||||||
Quoted
Prices in Active Markets for Identical Assets
(Level
1)
|
Significant
Observable
Inputs
(Level
2)
|
Significant
Unobservable Inputs
(Level
3)
|
|||||||||||
Trading
securities
|
$ | 453 | $ | - | $ | - | |||||||
Available
for sale securities
|
$ | 3,305 | $ | - | $ | - | |||||||
Interest
rate swaps
|
$ | - | $ | (17 | ) | $ | - | ||||||
Estimated Useful
Lives
|
August
29, 2009
|
November
29, 2008
|
|||||||||
Land
|
$ | 436 | $ | 715 | |||||||
Land
improvements
|
10
to 20 years
|
1,561 | 5,650 | ||||||||
Buildings
and improvements
|
10
to 40 years
|
1,852 | 3,060 | ||||||||
Machinery
and equipment
|
3
to 20 years
|
11,827 | 17,529 | ||||||||
15,676 | 26,954 | ||||||||||
Accumulated
depreciation
|
(12,861 | ) | (20,517 | ) | |||||||
$ | 2,815 | $ | 6,437 | ||||||||
ITEM
2.
|
MANAGEMENT’S
DISCUSSION AND ANALYSIS OF FINANCIAL
|
CONDITION
AND RESULTS OF OPERATIONS
|
Total
Square
Footage
|
Square
Footage
Leased
|
Percentage
Leased
|
|||||
As
of August 29, 2009
|
2,420,000
|
1,893,000
|
78%
|
||||
As
of November 29, 2008
|
2,116,000
|
1,684,000
|
80%
|
||||
As
of August 30, 2008
|
2,016,000
|
1,342,000
|
67%
|
2009
|
2008
|
||||||||
Third
Qtr.
|
Third
Qtr.
|
||||||||
(dollars
in thousands)
|
|||||||||
Rental
revenue
|
$ | 4,246 | $ | 3,785 | |||||
Costs
related to rental revenue excluding
|
|||||||||
depreciation
and amortization expense (a)
|
(1,659 | ) | (1,399 | ) | |||||
Profit
from leasing activities before general and
|
|||||||||
administrative
expenses and before depreciation
|
|||||||||
and
amortization expense (a)
|
2,587 | 2,386 | |||||||
Revenue
from property sales
|
- | 255 | |||||||
Costs
related to property sales
|
- | 1 | |||||||
Gain
from property sales
|
- | 256 | |||||||
Profit
from leasing activities and gain from property sales
|
|||||||||
before
general and administrative expenses and before
|
|||||||||
depreciation
and amortization expense (a)
|
2,587 | 2,642 | |||||||
General
and administrative expenses excluding depreciation
|
|||||||||
and amortization expense (a)
|
(599 | ) | (800 | ) | |||||
Profit
before depreciation and amortization expense (a)
|
1,988 | 1,842 | |||||||
Depreciation
and amortization expense related to costs of
|
|||||||||
rental revenue
|
(1,362 | ) | (1,227 | ) | |||||
Depreciation
and amortization expense - other
|
(8 | ) | (9 | ) | |||||
Operating
profit
|
$ | 618 | $ | 606 | |||||
|
(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 of
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. The aggregate of: (i)
costs related to rental revenue excluding depreciation and amortization
expense; (ii) costs related to property sales; and (iii) depreciation and
amortization expense related to costs of rental revenue, equals the costs
related to rental revenue and property sales as reported on Griffin’s
consolidated statement of operations.
|
2009
|
2008
|
||||||||
Third
Qtr.
|
Third
Qtr.
|
||||||||
(dollars
in thousands)
|
|||||||||
Net
sales and other revenue
|
$ | 3,528 | $ | 3,824 | |||||
Cost
of goods sold
|
3,715 | 3,797 | |||||||
Gross
(loss) profit
|
(187 | ) | 27 | ||||||
Selling,
general and administrative expenses
|
(988 | ) | (1,123 | ) | |||||
Operating
loss
|
$ | (1,175 | ) | $ | (1,096 | ) | |||
2009
|
2008
|
||||||||
Nine
Month Period
|
Nine
Month Period
|
||||||||
(dollars
in thousands)
|
|||||||||
Rental
revenue
|
$ | 12,570 | $ | 11,027 | |||||
Costs
related to rental revenue excluding
|
|||||||||
depreciation
and amortization expense (a)
|
(5,260 | ) | (5,044 | ) | |||||
Profit
from leasing activities before general and
|
|||||||||
administrative
expenses and before depreciation
|
|||||||||
and
amortization expense (a)
|
7,310 | 5,983 | |||||||
Revenue
from property sales
|
- | 1,081 | |||||||
Costs
related to property sales
|
- | (178 | ) | ||||||
Gain
from property sales
|
- | 903 | |||||||
Profit
from leasing activities and gain from property sales
|
|||||||||
before general and administrative expenses and before
|
|||||||||
depreciation and amortization expense (a)
|
7,310 | 6,886 | |||||||
General
and administrative expenses excluding depreciation
|
|||||||||
and amortization expense (a)
|
(2,000 | ) | (2,164 | ) | |||||
Profit
before depreciation and amortization expense (a)
|
5,310 | 4,722 | |||||||
Depreciation
and amortization expense related to costs of
|
|||||||||
rental revenue
|
(4,090 | ) | (3,704 | ) | |||||
Depreciation
and amortization expense - other
|
(24 | ) | (26 | ) | |||||
Operating
profit
|
$ | 1,196 | $ | 992 | |||||
(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 of
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. The aggregate of: (i) costs related
to rental revenue excluding depreciation and amortization expense; (ii)
costs related to property sales; and (iii) depreciation and amortization
expense related to costs of rental revenue, equals the costs related to
rental revenue and property sales as reported on Griffin’s consolidated
statement of operations.
|
2009
|
2008
|
||||||||
Nine
Month Period
|
Nine
Month Period
|
||||||||
(dollars
in thousands)
|
|||||||||
Net
sales and other revenue
|
$ | 19,545 | $ | 21,301 | |||||
Cost
of goods sold
|
18,429 | 18,716 | |||||||
Gross
profit
|
1,116 | 2,585 | |||||||
Selling,
general and administrative expenses
|
(3,339 | ) | (3,835 | ) | |||||
Operating
loss
|
$ | (2,223 | ) | $ | (1,250 | ) | |||
Total
|
Due
Within
One
Year
|
Due
From
1-3
Years
|
Due
From
3-5
Years
|
Due
in More Than 5 Years
|
||||||||||||||||
(in
millions)
|
||||||||||||||||||||
Mortgages
|
$ | 69.8 | $ | 4.3 | $ | 9.0 | $ | 14.5 | $ | 42.0 | ||||||||||
Revolving
Line of Credit
|
2.5 | - | 2.5 | - | - | |||||||||||||||
Capital
Lease Obligations
|
0.1 | 0.1 | - | - | - | |||||||||||||||
Operating
Lease Obligations
|
1.0 | 0.2 | 0.5 | 0.3 | - | |||||||||||||||
Purchase
Obligations (1)
|
0.4 | 0.4 | - | - | - | |||||||||||||||
Other
(2)
|
2.0 | - | - | - | 2.0 | |||||||||||||||
$ | 75.8 | $ | 5.0 | $ | 12.0 | $ | 14.8 | $ | 44.0 | |||||||||||
|
(1)
|
Includes
obligations for infrastructure and project planning costs by Griffin Land
and for the purchase of plants and 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
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)
|
|
10.4
|
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)
|
|
10.22
|
Letter
of Agreement between Griffin Land & Nurseries, Inc. and USAA Real
Estate Company (incorporated by reference to Form 10-Q dated August 31,
2002, filed October 11, 2002)
|
|
10.23
|
Agreement
of Purchase and Sale of Partnership Interest between Griffin Land &
Nurseries, Inc. and USAA Real Estate Company dated December 3, 2002
(incorporated by reference to Form 10-K dated November 30, 2002, filed
February 28, 2003)
|
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)
|
|
10.35
|
Employment
Agreement by and between Imperial Nurseries, Inc. and Gregory Schaan dated
January 1, 2001, as amended April 9, 2008 (incorporated by reference to
Form 10-Q dated March 1, 2008, filed April 10, 2008)
|
|
10.36
|
Construction
Loan and Security Agreement dated February 6, 2009 by and between
Tradeport Development III, LLC, Griffin Land & Nurseries, Inc., and
Berkshire Bank (incorporated by reference to Form 10-Q dated February 28,
2009, filed April 9, 2009)
|
10.37
|
$12,000,000
Construction Note dated February 6, 2009 (incorporated by reference to
Form 10-Q dated February 28, 2009, filed April 9, 2009)
|
|
10.38
|
Revolving
Line of Credit Loan Agreement dated February 27, 2009 between Griffin Land
& Nurseries, Inc. and Doral Bank, FSB (incorporated by reference to
Form 10-Q dated February 28, 2009, filed April 9, 2009)
|
|
10.39
|
$10,000,000
Promissory Note (Revolving Line of Credit) dated February 27, 2009
(incorporated by reference to Form 10-Q dated February 28, 2009, filed
April 9, 2009)
|
|
10.40
*
|
Loan
and Security Agreement dated July 9, 2009 between Griffin Land &
Nurseries, Inc. and People’s United Bank
|
|
10.41
*
|
$10,500,000
Promissory Note dated July 9, 2009
|
|
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.
|
|||
BY: /s/ FREDERICK M.
DANZIGER
|
|||
Date: October
8, 2009
|
Frederick
M. Danziger
|
||
President
and Chief Executive Officer
|
|||
BY: /s/ ANTHONY J.
GALICI
|
|||
Date: October
8, 2009
|
Anthony
J. Galici
|
||
Vice
President, Chief Financial Officer
and
Secretary
|
|||
Chief
Accounting Officer
|