-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, bH3eRWyB4UjGLDliKa2XRbsN50GAadrHjR0W78bHDM2Vg+PLuXMpxdtiIhwbkHtF EUAacuc2F0PuzZefb66jjw== 0000026093-95-000006.txt : 19950419 0000026093-95-000006.hdr.sgml : 19950419 ACCESSION NUMBER: 0000026093-95-000006 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950304 FILED AS OF DATE: 19950418 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: CULBRO CORP CENTRAL INDEX KEY: 0000026093 STANDARD INDUSTRIAL CLASSIFICATION: TOBACCO PRODUCTS [2100] IRS NUMBER: 130762310 STATE OF INCORPORATION: NY FISCAL YEAR END: 1128 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-01210 FILM NUMBER: 95529311 BUSINESS ADDRESS: STREET 1: 387 PARK AVE S CITY: NEW YORK STATE: NY ZIP: 10016 BUSINESS PHONE: 2125618700 FORMER COMPANY: FORMER CONFORMED NAME: GENERAL CIGAR CO INC DATE OF NAME CHANGE: 19760726 10-Q 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10Q QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the 13 weeks ended March 4, 1995 Commission File No. 1-1210 CULBRO CORPORATION (Exact name of registrant as specified in its charter) NEW YORK 13-0762310 (state or other jurisdiction of incorporation or (IRS Employer organization) Identification Number) 387 Park Avenue South, New York, New York 10016-8899 (Address of principal executive offices) (Zip code) Registrant's Telephone Number including Area Code (212) 561-8700 Former name, former address and former fiscal year, Not Applicable if changed since last report Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 of 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes No X Number of shares of Common Stock outstanding at March 31, 1995 - 4,308,513 CULBRO CORPORATION INDEX PART I - FINANCIAL INFORMATION PAGE Consolidated Statement of Operations and Retained Earnings - thirteen weeks ended March 4, 1995 and February 26, 1994 . . . . . .. . . . . . . . 3 Consolidated Balance Sheet March 4, 1995 and December 3, 1994. . . . . . . . . . . . . . . 4 Consolidated Statement of Cash Flows - thirteen weeks ended March 4, 1995 and February 26,1994. . . . . . . . . .. . . . . . . . . . . . 5 Notes to Consolidated Financial Statements. . .. . . . . . . . 6-7 Management's Discussion and Analysis of Financial Condition and Results of Operations . . .. . . . . 8-9 SIGNATURES. . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . .10
CULBRO CORPORATION CONSOLIDATED STATEMENT OF OPERATIONS AND RETAINED EARNINGS (dollars in thousands except per share data) (unaudited) 13 Weeks Ended ------------------------------ March 4, February 26, 1995 1994 ------------ -------------- Net sales and other revenue $ 41,991 $ 33,360 Costs and expenses Cost of goods sold 25,892 20,350 Selling, general and administrative expenses 13,569 12,453 ----------- ----------- Operating profit 2,530 557 Income (loss) from equity investments, net 112 (646) Other nonoperating income 587 - Interest expense, net 2,314 1,884 ----------- ------------ Income (loss) before tax provision (benefit) 915 (1,973) Income tax provision (benefit) 365 (924) ----------- ------------ Net income (loss) $ 550 $ (1,049) =========== ============ Net income (loss) per common share $ 0.13 (0.24) =========== ============ Weighted average common shares outstanding 4,308,000 4,308,000 ============ ============
See Notes to Consolidated Financial Statements.
CULBRO CORPORATION CONSOLIDATED BALANCE SHEET (dollars in thousands except per share data) March 4, 1995 December 3, (unaudited) 1994 -------------- ------------ ASSETS Current Assets Cash and cash equivalents $ 240 $ 6,682 Receivables, less allowance of $1,463 (1994 - $1,426) 22,275 25,084 Inventories 71,545 68,189 Other current assets 5,696 5,759 ------------ ------------ Total current assets 99,756 105,714 Property and equipment, net 76,023 76,873 Real estate held for sale or lease, net 31,113 31,373 Investment in Series B preferred stock of The Eli Witt Company 13,360 12,773 Investment in real estate joint ventures 7,711 7,864 Other, including investment in Centaur Communications Limited of $14,657 (1994- $14,545) 19,632 19,643 Intangible assets, net 18,836 18,997 ------------ ----------- Total assets $266,431 $273,237 ============== =========== LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities Accounts payable and accrued liabilities $ 18,434 $ 22,885 Long-term debt due within one year 4,248 4,158 Income taxes 100 299 ----------- ---------- Total current liabilities 22,782 27,342 ------------ ----------- Long-term debt 96,226 98,976 Accrued retirement benefits 15,470 15,227 Deferred income taxes 4,539 4,765 Other noncurrent liabilities and deferred credits 14,824 14,890 ------------- ---------- Total liabilities 153,841 161,200 ------------- ---------- Shareholders' Equity Common stock, par value $1 Authorized - 10,000,000 shares Issued - 4,549,190 shares 4,549 4,549 Capital in excess of par value 13,296 13,296 Retained earnings 100,047 99,497 ------------- ---------- 117,892 117,342 Less - Common stock in Treasury, at cost, 240,677 shares (1994 - 240,902) (5,302) (5,305) -------------- ----------- Total shareholders' equity 112,590 112,037 -------------- ----------- Total liabilities and shareholders' equity $266,431 $273,237 ============== ==========
See Notes to Consolidated Financial Statements.
CULBRO CORPORATION CONSOLIDATED STATEMENT OF CASH FLOWS (dollars in thousands) (unaudited) 13 Weeks Ended ---------------------------------- March 4, February 26, 1995 1994 ------------ ------------ OPERATING ACTIVITIES: - -------------------- Net income (loss) $ 550 $(1,049) Adjustments to reconcile net income (loss) to net cash used in operating activities: Depreciation and amortization 1,889 1,783 (Income) loss from equity investments (112) 646 Discount and interest on subordinated note 587 - Other nonoperating income (587) - Provision for bad debts 127 238 Changes in assets and liabilities: Decrease in real estate held for sale or lease, net 260 262 Increase in inventories (3,356) (3,385) Decrease in accounts receivable 2,682 7,028 Decrease in accounts payable and accrued liabilities (4,451) (5,222) Other, net (314) (1,397) -------- ---------- Net cash used in operating activities (2,725) (1,096) -------- ---------- INVESTING ACTIVITIES: - ---------------------- Additions to property and equipment (845) (785) --------- ---------- Net cash used in investing activities (845) (785) ---------- ----------- FINANCING ACTIVITIES: - --------------------- Payments of debt (2,872) (3,309) Increase in debt - 5,000 ---------- ------------ Net cash (used in) provided by financing activities (2,872) 1,691 ---------- ----------- Net decrease in cash and cash equivalents (6,442) (190) Cash and cash equivalents at beginning of period 6,682 875 --------- ------------ Cash and cash equivalents at end of period $ 240 $ 685 ========== ==============
See Notes to Consolidated Financial Statements. CULBRO CORPORATION Notes to Consolidated Financial Statements (dollars in thousands) (unaudited) A. The unaudited financial statements included in this report have been prepared in conformity with the standards of accounting measurement set forth in Accounting Principles Board Opinion No. 28 and any amendments thereto adopted by the Financial Accounting Standards Board. Also, the financial statements have been prepared in accordance with the accounting policies stated in the Corporation's 1994 Annual Report to Shareholders included in Form 10K, and should be read in conjunction with the Notes to Consolidated Financial Statements appearing in that report. All adjustments which are, in the opinion of management, necessary for a fair presentation of results for the interim period have been reflected. The results of operations for the thirteen weeks ended March 4, 1995 are not necessarily indicative of the results to be expected for the full year. B. At March 4, 1995, The Eli Witt Company ("Eli Witt") had a common deficit position of approximately $29,000. The Corporation accounts for its ownership of 50.1% of Eli Witt's outstanding common stock under the equity method of accounting. Accordingly, the Corporation did not recognize its share of Eli Witt's results in the 1995 first quarter, and will not recognize future results of Eli Witt until Eli Witt's common deficit is recouped. Eli Witt is currently operating under a temporary waiver of the covenants under its Credit Agreement, pending the satisfactory negotiations of new covenants and terms with its creditor banks. The Corporation is considering an additional investment of up to $5 million in Eli Witt. C. Supplemental Financial Statement Information INVENTORIES Inventories consist of: March 4, December 3, 1995 1994 ----------- ------------ Raw materials and supplies $ 33,877 $ 32,645 Work-in-process 18,396 18,490 Finished goods 19,272 17,054 ---------- ------------- $ 71,545 $ 68,189 ========== ============== PROPERTY AND EQUIPMENT Property and equipment consist of: March 4, December 3, 1995 1994 ----------- ------------- Land $ 11,281 $ 11,303 Buildings 62,535 62,366 Machinery and equipment 58,747 58,592 Accumulated Depreciation (56,540) (55,388) ------------ ------------- $ 76,023 $ 76,873 ============ ============= CASH FLOW Cash paid during the period for: 13 Weeks Ended ---------------------------------- March 4, February 26, 1995 1994 -------------- -------------- Interest, net of amounts capitalized $1,846 $2,292 ============= ============ Income taxes, net $ 284 $ 437 ============ ============ OTHER NONOPERATING INCOME Other nonoperating income reflects dividends of $375 and accretion of $212 on the Series B preferred stock of Eli Witt held by the Corporation. These amounts equal the accrued interest and amortization of the discount on the subordinated note that are included in consolidated interest expense. The Corporation has the unilateral right to exchange the Series B preferred stock for the subordinated note and all accrued interest upon the note's maturity in August 1998. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS LIQUIDITY AND CAPITAL RESOURCES In the 1995 first quarter, the Corporation's cash balance decreased due to cash used in operations, capital expenditures and a reduction of the amount outstanding under the Corporation's Credit Agreement. The cash used in operations was greater than the 1994 first quarter, as increased sales of General Cigar Co., Inc. partially offset cash generated from collections. The Corporation is currently negotiating with its creditor banks and Senior noteholders regarding an additional investment by the Corporation of up to $5 million in The Eli Witt Company ("Eli Witt"), a wholesale distribution company, of which the Corporation holds a 50.1% equity interest. Other than this investment in Eli Witt, no significant increases over 1994 levels of capital expenditures or other capital outlays are anticipated in the remainder of 1995. The Corporation's liquidity was substantially unchanged in the 1995 first quarter, as the amount available under its Credit Agreement increased to $24 million at the end of the first quarter from $21 million at year end. Management believes that cash flow from operations and the Corporation's existing liquidity will be sufficient to meet its maturing near-term obligations and normal capital expenditures. Over the long-term, management will seek to maintain a level of indebtedness which is commensurate with the Corporation's earnings and cash flow and will continue to pursue opportunities to supplement cash flow from operations by proceeds generated from other transactions. RESULTS OF OPERATIONS Net income of $550,000 in the 1995 first quarter, as compared to a net loss of $(1,049,000) in the 1994 first quarter, reflects the Corporation's higher operating profit of $2,530,000 as compared to $557,000 in 1994 and the exclusion of equity losses from Eli Witt as a result of the deconsolidation of Eli Witt last year and accounting for the Corporation's remaining investment in Eli Witt under the equity method. Under equity accounting, the Corporation is precluded from recognizing its share of Eli Witt's results until Eli Witt's common deficit is recouped. The Corporation's higher operating profit reflects principally improved results of General Cigar Co., Inc. ("General Cigar") and CMS Gilbreth Packaging Systems, Inc. ("CMS Gilbreth"). Higher operating profit at General Cigar is due principally to higher sales. The sales increase in premium cigars experienced in 1994 continued into the 1995 first quarter, as premium sales volume increased 50% as compared to the 1994 first quarter. Sales volume of other categories also increased in the 1995 first quarter. CMS Gilbreth reported a record high sales and operating profit for the quarter due principally to higher sales of packaging machinery and lower costs. Increased sales volume of packaging machinery more than offset a sales volume decline in packaging materials, partially attributed to timing of shipments. The closing of a facility in 1994 led to the lower costs in 1995 as compared to the 1994 first quarter. The previously reported change in label technology by CMS Gilbreth's largest customer is expected to reduce the quantity of labels purchased from CMS Gilbreth beginning in the second quarter. Operating results in the Corporation's Connecticut real estate business, Culbro Land Resources ("CLR"), and in the nursery products business, Imperial Nurseries, Inc. ("Imperial Nurseries"), were substantially unchanged from the prior year. At CLR, increased profit from commercial land sales and lower expenses were substantially offset by lower sales of residential lots. First quarter operating losses at Imperial Nurseries reflect the normal low sales activity of the winter months in this seasonal business. Higher interest expense in the 1995 first quarter reflected the higher interest rate of the subordinated note as compared to the rate on debt repaid with the proceeds from the subordinated note last year, partially offset by the Corporation's lower overall debt level in the 1995 first quarter versus the comparable period last year. The accrued interest and discount on the subordinated note of $587,000 included in first quarter interest expense is offset by an equal amount of accretion income and accrued dividends on the mandatorily redeemable Series B preferred stock of Eli Witt held by the Corporation. These items are reflected as other nonoperating income in the Corporation's consolidated statement of operations. The Corporation has the unilateral right to exchange the Series B preferred stock for the subordinated note in 1998, and therefore may satisfy the note without the use of cash. SIGNATURES 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 thereunto duly authorized. CULBRO CORPORATION (Registrant) Date: April 17, 1994 (Jay M. Green) Jay M. Green Executive Vice President - Chief Financial Officer and Treasurer Date: April 17, 1994 (Joseph Aird) Joseph Aird Vice President - Controller EX-27 2
5 3-MOS DEC-02-1995 MAR-04-1995 240 0 23,738 (1,463) 71,545 99,756 132,563 (56,540) 266,431 22,782 0 4,549 0 0 108,041 266,431 41,838 41,991 25,892 39,461 0 0 2,314 915 365 550 0 0 0 550 0.13 0
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