SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report
Pursuant to Section 13 or 15 (d) of the
Securities Exchange Act of 1934
January 26, 2001
GRIFFIN LAND & NURSERIES, INC.
(Exact name of registrant as specified in charter)
DELAWARE 0-29288 06-0868496
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
ONE ROCKEFELLER PLAZA, NEW YORK, NEW YORK 10020
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(Address of principal executive offices) (Zip Code)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE (212) 218-7910
GRIFFIN LAND & NURSERIES, INC.
FORM 8-K
INDEX
Item 2 Disposition of Assets 3
Item 7 Financial Statements and Exhibits 3-8
Signature 8
Notes: Items 1, 3, 4, 5, 6, 8 and 9 are not applicable
ITEM 2 DISPOSITION OF ASSETS
On January 26, 2001, Griffin Land & Nurseries, Inc.'s ("Griffin")
wholly owned subsidiary in the landscape nursery business, Imperial
Nurseries, Inc. ("Imperial"), completed the sale of all of the assets of its
seven wholesale horticultural sales and service centers (the "SSCs") to
Shemin Nurseries, Inc. ("Shemin"). Shemin also assumed certain liabilities
related to the SSCs. The SSCs sell a wide variety of plant material and
horticultural tools and products to the landscape trade, and are located in
Windsor, Connecticut; Aston and Pittsburgh, Pennsylvania; Columbus and
Cincinnati, Ohio; White Marsh, Maryland; and Manassas, Virginia. A portion of
products sold by the SSCs are grown by Imperial's farming operations. The
agreement to sell the SSCs includes a three year supply agreement whereby
Shemin will purchase Imperial grown product for the SSCs. The SSCs have been
the principal contributor to the operating profit of Imperial over the past
three years.
The consideration received by Imperial on the sale of the SSCs included
cash of approximately $19 million after estimated expenses, subject to
adjustment based on actual working capital at the time of closing. Cash of
$11.2 million from the sale was used to repay all of the amount outstanding
under Griffin's Revolving Credit Agreement. The remaining cash will be held for
general corporate purposes. In addition to the cash payment, Griffin received
20,570 shares of common stock (representing approximately 13.8% of the
outstanding common stock) of Shemin Acquisition Corporation ("Acquisition"),
the parent company of Shemin. Imperial will continue in the landscape nursery
business with its container growing operations in Connecticut and northern
Florida, which Imperial is expanding.
ITEM 7 FINANCIAL STATEMENTS AND EXHIBITS
(a) Not applicable
(b) Pro forma financial information
The following unaudited pro forma condensed consolidated financial
statements are included in this report:
o Pro Forma Condensed Consolidated Statement of Operations for the
Fiscal Year Ended November 27, 1999.
o Pro Forma Condensed Consolidated Statement of Operations for the
Thirty-nine Weeks Ended August 26, 2000.
o Pro Forma Condensed Consolidated Balance Sheet as of August 26,
2000.
The unaudited Pro Forma Condensed Consolidated Statements of Operations
for the fiscal year ended November 27, 1999 and for the thirty-nine weeks ended
August 26, 2000 include pro forma adjustments to reflect the sale of the SSCs as
if it had taken place at the beginning of the respective periods. Such
adjustments reflect the elimination of sales and expenses of the SSCs, the
effect of the net cash proceeds on Griffin's interest expense (income), and
related adjustments to Griffin's income tax provisions. The unaudited Pro Forma
Condensed Consolidated Balance Sheet includes pro forma adjustments to reflect
the sale of the SSCs as if it had taken place on the balance sheet date. Such
adjustments reflect the elimination of the assets that were sold and the
liabilities that were assumed by Shemin, the repayment of debt under
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Griffin's Revolving Credit Agreement, an increase in cash from the remaining
proceeds from the sale after the debt repayment and Griffin's investment in
Acquisition.
In the opinion of management, all adjustments necessary to fairly present
this pro forma information have been made. The pro forma information does not
purport to be indicative of the results that would have been reported had this
transaction actually occurred on the dates specified, nor is it indicative of
Griffin's future results.
Griffin Land & Nurseries, Inc.
Pro Forma Condensed Consolidated Statement of Operations
For the Fiscal Year Ended November 27, 1999
(dollars in thousands, except per share data)
(unaudited)
Pro Forma
Historical Adjustments Pro Forma
---------- ----------- ---------
Net sales and other revenue $ 62,944 $(40,025)(1) $ 22,919
Costs and expenses:
Cost of goods sold 43,321 (26,794)(1) 16,527
Selling, general and administrative expenses 16,493 (8,616)(1) 7,877
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Operating profit (loss) 3,130 (4,615) (1,485)
Interest expense (income), net 545 (829)(2) (284)
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Income (loss) before income tax
provision (benefit) 2,585 (3,786) (1,201)
Income tax provision (benefit) 962 (1,432)(3) (470)
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Income (loss) before equity investments 1,623 (2,354) (731)
Income from equity investments 553 -- 553
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Net income (loss) $ 2,176 $ (2,354) $ (178)
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Basic net income (loss) per share(4) $ 0.45 $ (0.04)
======== ========
Diluted net income (loss) per share(4) $ 0.42 $ (0.06)
======== ========
See Notes to Unaudited Pro Forma Condensed Consolidated Financial Statements.
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Griffin Land & Nurseries, Inc.
Pro Forma Condensed Consolidated Statement of Operations
For the 39 Weeks Ended August 26, 2000
(dollars in thousands, except per share data)
(unaudited)
Pro Forma
Historical Adjustments Pro Forma
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Net sales and other revenue $ 54,106 $(32,206)(1) $ 21,900
Costs and expenses:
Cost of goods sold 37,679 (21,402)(1) 16,277
Selling, general and administrative expenses 13,668 (7,086)(1) 6,582
-------- -------- --------
Operating profit (loss) 2,759 (3,718) (959)
Interest expense (income), net 869 (674)(2) 195
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Income (loss) before income tax
provision (benefit) 1,890 (3,044) (1,154)
Income tax provision (benefit) 756 (1,209)(3) (453)
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Income (loss) before equity investment 1,134 (1,835) (701)
Income from equity investment 907 -- 907
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Net income (loss) $ 2,041 $ (1,835) $ 206
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Basic net income per share(4) $ 0.42 $ 0.04
======== ========
Diluted net income per share(4) $ 0.40 $ 0.02
======== ========
See Notes to Unaudited Pro Forma Condensed Consolidated Financial Statements.
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Griffin Land & Nurseries, Inc.
Pro Forma Condensed Consolidated Balance Sheet
As of August 26, 2000
(amounts in thousands)
(unaudited)
Pro Forma
Historical Adjustments Pro Forma
---------- ----------- ---------
Cash and equivalents $ 1,308 $ 17,381 (5) $ 18,689
Inventories 30,610 (5,684)(6) 24,926
Other current assets 12,045 (4,513)(6) 7,532
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Total current assets 43,963 7,184 51,147
Real estate held for sale or lease, net 35,809 -- 35,809
Investment in Centaur Communications, Ltd. 17,625 -- 17,625
Property and equipment, net 16,221 (7,638)(6) 8,583
Other assets 6,297 4,308 (7) 10,605
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Total assets $119,915 $ 3,854 $123,769
======== ======== ========
Current liabilities $ 9,021 $ (1,138)(8) $ 7,883
Long-term debt 9,080 (207)(9) 8,873
Other noncurrent liabilities 6,317 (338)(10) 5,979
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Total liabilities 24,418 (1,683) 22,735
Commitments and contingencies -- -- --
Stockholders' equity 95,497 5,537 (11) 101,034
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Total liabilities and stockholders' equity $119,915 $ 3,854 $123,769
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See Notes to Unaudited Pro Forma Condensed Consolidated Financial Statements.
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Griffin Land & Nurseries, Inc.
Notes to Unaudited Pro Forma Condensed Consolidated Financial Statements
(dollars in thousands, except per share amounts)
(1) Reflects the elimination of net sales, cost of sales, direct operating
expenses of the SSCs, the elimination of salaries and benefits of employees
terminated as a result of the sale of the SSCs, and inclusion of sales from
Imperial's growing operations to the SSCs acquired by Shemin for the fiscal
year ended November 27, 1999 and for the 39 weeks ended August 26, 2000.
(2) Reflects the reduction of interest expense previously paid under the
Imperial Nurseries Credit Agreement and interest income on the additional
cash in the fiscal year ended November 27, 1999 and reflects the reduction of
interest expense previously paid under the Griffin Revolving Credit Agreement
and interest income on the additional cash in the 39 weeks ended August 26,
2000. The Griffin Revolving Credit Agreement replaced the Imperial Credit
Agreement upon expiration of the Imperial Credit Agreement in the 1999 third
quarter. There were no borrowings under the Griffin Revolving Credit
Agreement until the first quarter in fiscal 2000. The interest income
reflects investment of cash on hand in temporary investments with maturities
of less than three months generating a return of approximately 5% per annum.
(3) Reflects adjustment of the income tax provision as a result of the sale
of the SSCs based on Federal income tax (34%) and state income tax of
approximately 5%, which is net of Federal tax benefits.
(4) Per share results were based on the following:
For the Fiscal Year Ended For the 39 Weeks Ended
November 27, 1999 August 26, 2000
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Historical Pro Forma Historical Pro Forma
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Net income (loss) as reported for
basic per share results $ 2,176 $ (178) $ 2,041 $ 206
Adjustment to net income (loss) for
assumed exercise of options
of equity investee (Centaur) (104) (104) (86) (86)
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Adjusted net income (loss) for
computation of diluted per share
results $ 2,072 $ (282) $ 1,955 $ 120
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For the Fiscal Year Ended For the 39 Weeks Ended
November 27, 1999 August 26, 2000
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Historical Pro Forma Historical Pro Forma
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Weighted average shares outstanding
for computation of basic per
share results 4,847,000 4,847,000 4,863,000 4,863,000
Incremental shares from assumed
exercise of Griffin stock options 77,000 -- 63,000 63,000
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Adjusted weighted average shares
for computation of diluted per
share results 4,924,000 4,847,000 4,926,000 4,926,000
=========== =========== =========== ===========
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(5) Reflects increase in cash from net proceeds of the sale of the SSCs
after repayment of the entire amount then outstanding (approximately $3.6
million) under the Griffin Revolving Credit Agreement.
(6) Reflects the reduction of inventories, other current assets, and fixed
assets as a result of the sale of the SSCs to Shemin.
(7) Reflects the reduction of other assets as a result of the sale of the
SSCs and the 20,570 shares of common stock of Acquisition received by
Imperial in connection with the sale of the SSCs, which were valued based on
current equity transactions by Acquisition as discounted for the lack of
liquidity and Imperial's minority interest position.
(8) Reflects (i) reduction of current liabilities of approximately $1.3
million for the liabilities assumed by Shemin in connection with the sale of
the SSCs, (ii) repayment of the entire amount outstanding under the Griffin
Revolving Credit Agreement (approximately $3.6 million) from proceeds
received from Shemin as a result of the sale of the SSCs, and (iii) increase
in current liabilities for income tax payable (approximately $3.8 million) in
connection with the sale of the SSCs. The Griffin Revolving Credit Agreement
is classified as a current liability because it will terminate on May 31,
2001.
(9) Reflects reduction of long-term debt as a result of Shemin assuming
certain capital leases.
(10) Reflects adjustment of deferred tax liabilities in connection with the
sale of the SSCs to Shemin.
(11) Reflects increase in stockholders' equity from the gain on the sale of
the SSCs to Shemin.
(c) Exhibits
Exhibit 2 Asset Purchase Agreement among Shemin Nurseries, Inc., Shemin
Acquisition Corporation and Imperial Nurseries, Inc. dated January 5, 2001.
Exhibit 99 Press release dated January 26, 2001 announcing the completion
of the sale of the SSCs.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
GRIFFIN LAND & NURSERIES, INC.
DATE: February 12, 2001 /s/ Anthony J. Galici
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Anthony J. Galici
Vice President, Chief Financial Officer
and Secretary
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