-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, LE8Hd17ExoFkVRfOVuZxELWudHfT9XxDZrpmP6XC7Pz4GpO/5jDNFBnhFVrfaoPU pfd9s21HvBKs50JD/8tZ/A== 0000040934-96-000008.txt : 19960911 0000040934-96-000008.hdr.sgml : 19960911 ACCESSION NUMBER: 0000040934-96-000008 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960727 FILED AS OF DATE: 19960910 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: GENESEE CORP CENTRAL INDEX KEY: 0000040934 STANDARD INDUSTRIAL CLASSIFICATION: MALT BEVERAGES [2082] IRS NUMBER: 160445920 STATE OF INCORPORATION: NY FISCAL YEAR END: 0430 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-01653 FILM NUMBER: 96627891 BUSINESS ADDRESS: STREET 1: 445 ST PAUL ST CITY: ROCHESTER STATE: NY ZIP: 14605 BUSINESS PHONE: 7165461030 MAIL ADDRESS: STREET 1: 445 ST PAUL STREET CITY: ROCHESTER STATE: NY ZIP: 14605 FORMER COMPANY: FORMER CONFORMED NAME: GENESEE BREWING CO INC DATE OF NAME CHANGE: 19880322 10-Q 1 FORM 10-Q FOR PERIOD ENDING 7/27/96 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. FORM 10-Q [x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended JULY 27, 1996 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ____ to _____ Commission File Number 0 - 1653 GENESEE CORPORATION (Exact name of registrant as specified in its charter) STATE OF NEW YORK 16-0445920 (State or other jurisdiction of (I.R.S. Employer incorporation or organization Identification No.) 445 St. Paul Street, Rochester, New York 14605 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (716)546-1030 Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 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 X No As of the date of this report, the Registrant had the following shares of common stock outstanding: Number of Shares Class Outstanding Class A Common Stock (voting), 209,885 par value $.50 per share Class B Common Stock (non-voting), 1,407,342 par value $.50 per share 1 GENESEE CORPORATION AND SUBSIDIARIES Consolidated Balance Sheets July 27, 1996 and April 30, 1996 (Dollars in thousands) Assets July 27, 1996 April 30, 1996 Current assets: Cash and cash equivalents $ 4,234 2,560 Marketable securities available for sale 33,261 34,896 Trade accounts receivable, less allowance for doubtful receivables of $390 at July 27, 1996; $433 at April 30, 1996 13,640 13,168 Inventories, at lower of cost (first-in, first-out) or market 13,062 11,959 Deferred income tax assets 899 898 Other current assets 1,701 1,376 Total current assets 66,797 64,857 Net property, plant and equipment 30,642 30,306 Investment in and notes receivable from unconsolidated real estate partnerships 8,469 8,466 Investment in direct financing and leveraged leases 28,024 28,092 Other assets 2,149 2,314 Total assets 136,081 134,035 Liabilities and Shareholders' Equity Current liabilities: Accounts payable 10,349 10,210 Income taxes payable 1,298 455 Federal and state beer taxes payable 1,956 2,246 Accrued expenses and other 6,592 5,827 Total current liabilities 20,195 18,738 Deferred income tax liabilities 7,321 7,482 Accrued postretirement benefits 15,593 15,526 Other liabilities 405 428 Total liabilities 43,514 42,174 Minority interests in consolidated subsidiaries 1,608 1,527 Shareholders' equity: Common stock: Class A 105 105 Class B 753 753 Additional paid-in capital 5,849 5,839 Retained earnings 88,112 87,285 Less unrealized loss on marketable securities, net of income taxes (355) (113) Less treasury stock, at cost 3,505 3,535 Total shareholders' equity 90,959 90,334 Total liabilities and shareholders' equity $ 136,081 134,035 See accompanying notes to consolidated financial statements
2 GENESEE CORPORATION AND SUBSIDIARIES Consolidated Statements of Earnings and Retained Earnings Thirteen Weeks Ended July 27, 1996 and July 29, 1995 (Dollars in thousands, except per share data) 1996 1995 Revenues $ 51,569 50,272 Federal and state beer taxes 11,225 11,909 Net revenues 40,344 38,363 Cost of sales 29,695 29,196 Gross profit 10,649 9,167 Selling, general and administrative expenses 8,950 8,358 Operating income 1,699 809 Investment income 604 822 Other income / (expense), net 60 (7) Interest of minority partners in earnings of consolidated subsidiaries (188) (122) Earnings before income taxes 2,175 1,502 Income taxes 783 601 Net earnings - $ .86 per share in 1996 and $ .56 in 1996 1,392 901 Retained earnings at beginning of period 87,285 86,870 Less: dividends - $ .35 per share in 1996 and $ .35 per share in 1995 565 562 Retained earnings at end of period 88,112 87,209 See accompanying notes to consolidated financial statements
3 GENESEE CORPORATION AND SUBSIDIARIES Consolidated Statements of Cash Flows Thrirteen Weeks Ended July 27, 1996 and July 29, 1995 (Dollars in thousands) 1996 1995 Cash flows from operating activities: Net earnings $ 1,392 901 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 1,244 1,247 Deferred tax provision (1) 0 Other 231 129 Changes in non-cash assets and liabilities: Trade accounts receivable (515) (2,385) Inventories (1,103) 752 Other assets (160) (567) Accounts payable 139 (642) Accrued expense and other 765 (160) Income taxes payable 843 317 Federal and state beer taxes (290) 316 Accrued postretirement benefits 67 0 Other liabilities (23) 136 Net cash provided by operating activities $ 2,589 44 Cash flows from investing activities: Capital expenditures $ (1,580) (1,767) Sales of marketable securities 4,220 1,470 Purchases of marketable securities (2,988) (2,976) Investments in and advances to unconsolidated real estate partnerships, net of distributions (3) (16) Net investment in direct financing and leveraged leases 68 (333) Withdrawals by minority interest (107) (181) Repayment of real estate mortgage receivable 0 5,805 Net cash (used in)provided by investing activities (390) 2,002 Cash flows from financing activities: Principal payments on long-term debt 0 (4,038) Payment of dividends (565) (561) Net proceeds from treasury stock transactions 40 34 Net cash (used in) financing activities (525) (4,565) Net increase / (decrease) in cash and cash equivalents 1,674 (2,519) Cash and cash equivalents at beginning of year 2,560 10,422 Cash and cash equivalents at end of period $ 4,234 7,903 See accoumpanying notes to conolidated financial statements
4 GENESEE CORPORATION Notes to Consolidated Financial Statements NOTE (A) The Corporation's consolidated financial statements enclosed herein are unaudited with the exception of the Consolidated Balance Sheet at April 30, 1996 and, because of the seasonal nature of the business and the varying schedule of its special sales efforts, these results are not necessarily indicative of the results to be expected for the entire year. In the opinion of management, the interim financial statements reflect all adjustments, consisting of only normal recurring items which are necessary for a fair presentation of the results for the periods presented. The accompanying financial statements have been prepared in accordance with GAAP and SEC guidelines applicable to interim financial information. These statements should be reviewed in conjunction with the annual report to shareholders for the year ended April 30, 1996. NOTE (B) The weighted average number of Class A and Class B shares outstanding used in the computation of net earnings per share is 1,616,709 for the thirteen week period ended July 27, 1996 and 1,602,897 for the thirteen week period ended July 29, 1995. NOTE (C) Inventories are summarized as follows: (Dollars in Thousands) July 27, 1996 April 30, 1996 Finished goods $ 3,506 $ 3,219 Goods in process 2,532 1,891 Raw materials, containers and packaging supplies 7,024 6,849 Total inventories $ 13,062 $ 11,959 5 GENESEE CORPORATION Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Comparison of 13 weeks ended July 27, 1996 to 13 weeks ended July 29, 1995 Consolidated net revenues for the thirteen weeks ended July 27, 1996 were $40.3 million, an increase of $1.9 million over the consolidated net revenues reported for the same period last year. The higher revenues were the result of higher private label sales at Ontario Foods and higher craft brand sales and increased revenues from the general price increase and contract brewing at Genesee Brewing Company. On a consolidated basis, the Corporation reported operating income of $1.7 million for the first quarter this year compared to operating income of $800,000 for the same period last year. Each of the Corporation's three subsidiaries, Genesee Brewing Company, Ontario Foods, and Genesee Ventures showed improved operating results in the first quarter this year compared to last year. The Corporation reported consolidated net earnings of $1.4 million, or $.86 per share, in the first quarter this year, compared to net earnings of $900,000, or $.56 per share, for the same period last year. The effective income tax rate for the first quarter of fiscal 1997 was 36%, down from 40% in the first quarter of fiscal 1996, due to lower expected income tax expense. Genesee Brewing Company Genesee Brewing Company's net sales in the first quarter were $34.8 million, an increase of $729,000 from last year's first quarter net sales. Barrel sales for the first quarter however were down 1.5% due to much lower sales volume in Genesee Brewing Company's core brands. Intense competition and poor weather early in the first quarter contributed to the lower than expected sales of core products. Overall barrelage trends benefitted from continued growth in the sales of the HighFalls craft brands and growth of contract brewing for Boston Beer Company. In addition, the higher sales revenues were due to a general industry price increase that went into effect late in fiscal 1996. Genesee Brewing Company's gross profit increased to $9.7 million, or 27.8% of net sales, in the first quarter of fiscal 1997, compared to $8.5 million, or 24.9% of net sales, in the first quarter of fiscal 1996. The increase in gross profit was primarily the result of the general price increase and lower aluminum can costs. Genesee Brewing Company's selling, general and administrative expenses were up $560,000 in the first quarter of fiscal 1997 compared to the same period last year. This increase is primarily the result of the timing of sales and marketing expenditures. The decrease in aluminum can costs, higher selling prices and contract brewing revenues all contributed to Genesee Brewing Company's improved operating performance. First quarter operating income for Genesee Brewing Company was $1.3 million, compared to operating income of $723,000 in the first quarter last year. 6 GENESEE CORPORATION Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations (continued) In July 1996, Genesee Brewing Company's HighFalls division entered into an agreement with Upper Canada Brewing Company Limited (a Toronto-based microbrewery, which is publicly traded on the Toronto Stock Exchange) to test market certain Upper Canada products in selected markets in the United States. Commencing in late August 1996, distribution and sales of Upper Canada Brewing Company's products began in selected eastern U.S. markets. If this test is successful, the High Falls division will expand distribution of the Upper Canada brands to additional markets in 1997. During the first quarter of fiscal 1997, Genesee Brewing Company continued to improve capacity utilization by strengthening its contract brewing relationship with Boston Beer Company. Genesee Brewing Company agreed to produce several seasonal products for Boston Beer Company with production on the first seasonal product commencing in July 1996. Production of other seasonal products was scheduled for the second and third quarters. Production on each of these seasonal products is expected to be concentrated in two to three month production periods. Genesee Brewing Company is working with Boston Beer Company to add other brands to the contract as demand dictates and capacity permits. Ontario Foods Net sales for Ontario Foods were $4.9 million in the first quarter of fiscal 1997, compared to $3.9 million for the first quarter last year. The sales increase was attributable to continued growth in side dish sales and higher sales of iced tea mix. Private label sales were up more than $1.5 million compared to the first quarter last year. Ontario Foods reported a first quarter operating loss of $145,000, compared to a $173,000 operating loss in the first quarter last year. The first quarter is typically Ontario Foods' least profitable due to higher sales of low margin sugar based drink mixes. In addition, the first quarter operating performance this year was adversely impacted by the loss of a major contract customer which moved production of an infant cereal product to its own production facility late in fiscal 1996. This is not unusual in the contract manufacturing business. Contract customers often move volume back into their own plants once a product has attained general market acceptance and sufficient volume. The first quarter last year included approximately $400,000 of sales from this discontinued business. Genesee Ventures Genesee Ventures, Inc., the Corporation's equipment leasing and real estate investment subsidiary, reported operating income of $641,000 for the first quarter of fiscal 1997, compared to $394,000 for the first quarter of fiscal 1996. The higher operating income was primarily due to gains realized from the sale of equipment that came off lease in the first quarter and to an increase in lease revenue resulting from the nearly $26 million (gross equipment cost) in leases that closed in fiscal 1996. 7 GENESEE CORPORATION Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations (continued) LIQUIDITY AND CAPITAL RESOURCES Cash, cash equivalents, and marketable securities totaled $37.5 million at July 27, 1996 and at April 30, 1996. Trade receivables at July 27, 1996 were approximately $470,000 higher than the balances reported at April 30, 1996 due to the price increase that went into effect late in the fourth quarter of fiscal 1996. Inventories at July 27, 1996 were approximately $1.1 million higher than the balances reported at April 30, 1996 due to first quarter sales volume being lower than anticipated. Other current assets increased $325,000 due to prepaid real estate taxes and insurance expenses. In May 1996, Genesee Brewing Company commenced work on a $2 million capital project to install a new keg filling system to replace one of its two keg filling lines. The new system will also require a substantial investment in new cooperage that Genesee Brewing Company expects to make over the next few years. These improvements will allow Genesee Brewing Company to package its draft products in both of the draft dispensing systems utilized by the retail trade. Current liabilities at July 27, 1996 increased approximately $1.5 million from fiscal year end primarily due to accrued income taxes payable. The increase in accrued income taxes payable reflects the timing of tax payments. The Corporation expects to fund future capital needs internally as it has in the past. With respect to real esate and equipment leasing, such investments may also include a debt component, generally obtained on a non-recourse basis. PART II. OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K (a) No exhibits are being filed with this report. (b) The Corporation did not file any reports on Form 8-K during the quarter for which this report is filed. 8 GENESEE CORPORATION 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. GENESEE CORPORATION Date: 9/10/96 / s / Mark W. Leunig Mark W. Leunig Vice President and Secretary Date: 9/10/96 / s / Edward J. Rompala Edward J. Rompala Vice President and Treasurer 9 EX-27 2 ART. 5 FDS FOR 1ST QUARTER 10-Q
5 1,000 3-MOS APR-30-1997 JUL-27-1996 4,234 33,261 14,030 390 13,062 66,797 127,398 96,756 136,081 20,195 0 858 0 0 90,101 136,081 51,569 51,569 29,695 11,225 8,950 0 0 2,175 783 1,392 0 0 0 1,392 .86 0 -----END PRIVACY-ENHANCED MESSAGE-----