-----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, KaEs6+Si7v2wDhsMym/VlTJImQLEVS7Y+z7RPPgJdztIWGTwdilA3PWh1KDEId1r ONlm67gYO9QKFRqnIWbpMw== 0000040934-00-000019.txt : 20001219 0000040934-00-000019.hdr.sgml : 20001219 ACCESSION NUMBER: 0000040934-00-000019 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20001028 FILED AS OF DATE: 20001218 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: 0503 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-01653 FILM NUMBER: 791225 BUSINESS ADDRESS: STREET 1: 445 ST PAUL ST CITY: ROCHESTER STATE: NY ZIP: 14605 BUSINESS PHONE: 7162639440 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 0001.txt FORM 10-Q FOR PERIOD ENDING 10/28/00 Index to Exhibits at page 16 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 October 28, 2000 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), par value $.50 per share 209,885 Class B Common Stock (non-voting), par value $.50 per share 1,411,453 1 GENESEE CORPORATION AND SUBSIDIARIES Consolidated Balance Sheets October 28, 2000 and April 29, 2000 (Dollars in thousands, except per share data) UNAUDITED AUDITED October 28, 2000 April 29, 2000 Assets Current assets: Cash and cash equivalents $ 3,903 $ 7,649 Marketable securities available for sale 8,480 8,029 Trade accounts receivable, less allowance for doubtful receivables of $262 at October 28, 2000 and April 29, 2000 3,941 2,776 Inventories, at lower of cost (first-in, first-out) or market 11,200 9,197 Deferred income tax assets, current portion 83 113 Other current assets 117 61 - ------------------------------------------------------------------------------------------------------------------------------------ Total current assets 27,724 27,825 Net property, plant and equipment 12,709 12,629 Goodwill and other intangibles net of accumulated amortization of $3,741 at October 28, 2000 and $3,107 at April 29, 2000 26,028 26,662 Other assets 1,427 1,446 Net assets held for disposal - noncurrent 24,601 27,209 - ------------------------------------------------------------------------------------------------------------------------------------ Total assets $ 92,489 $ 95,771 - ----------------------------------------------------------------------------------=================-================ - --------------------------------------------------------------------------------- =================-================ Liabilities and Shareholders' Equity Current liabilities: Notes payable, current portion $ 300 $ 300 Accounts payable 1,688 1,454 Income taxes payable 198 64 Accrued compensation 397 235 Accrued expenses and other 1,173 1,384 Net liabilities held for disposal - current 685 2,127 - ------------------------------------------------------------------------------------------------------------------------------------ Total current liabilities 4,441 5,564 Notes payable, noncurrent portion 5,823 5,973 Deferred income tax liabilities, noncurrent portion 418 381 Other liabilities 21 646 - ------------------------------------------------------------------------------------------------------------------------------------ Total liabilities 10,703 12,564 - ------------------------------------------------------------------------------------------------------------------------------------ Shareholders' equity: Common stock: Class A common stock, voting, $.50 par value. Authorized 450,000 shares; 105 105 209,885 shares issued and outstanding Class B common stock, non-voting, $.50 par value. Authorized 3,850,000 shares; 753 753 1,506,876 shares issued Additional paid-in capital 5,831 5,847 Retained earnings 78,464 80,023 Accumulated other comprehensive loss 0 (120) Less: Class B treasury stock, at cost; 95,597 shares in October 2000 and (3,367) (3,401) 96,564 shares in April 2000 - ------------------------------------------------------------------------------------------------------------------------------------ Total shareholders' equity 81,786 83,207 - ------------------------------------------------------------------------------------------------------------------------------------ Total liabilities and shareholders' equity $ 92,489 $ 95,771 - ---------------------------------------------------------------------------------=============- ================ - -------------------------------------------------------------------------------- =============- ================
See accompanying notes to consolidated financial statements. 2 GENESEE CORPORATION AND SUBSIDIARIES Consolidated Statements of Earnings and Comprehensive Loss Thirteen Weeks Ended October 28, 2000 and October 30, 1999 (Dollars in thousands, except per share data) UNAUDITED UNAUDITED 2000 1999 Revenues $ 12,869 $ 12,517 Cost of goods sold 10,861 10,757 - --------------------------------------------------------------------------------------------------------------------------- Gross profit 2,008 1,760 Selling, general and administrative expenses 1,473 1,656 - --------------------------------------------------------------------------------------------------------------------------- Operating income 535 104 Investment income 146 115 Other income 81 19 Interest expense (108) (150) - --------------------------------------------------------------------------------------------------------------------------- Earnings from continuing operations before income taxes 654 88 Income tax expense 499 73 - --------------------------------------------------------------------------------------------------------------------------- Earnings from continuing operations 155 15 Discontinued operations: Loss from operations of the discontinued segments (less applicable income tax benefit of $831and $1,327,respectively) (1,303) (1,487) Adjustment to the loss on disposal of Genesee Ventures, Inc. (less applicable net income tax expense of $89 in fiscal 2001) 139 0 - --------------------------------------------------------------------------------------------------------------------------- Net loss (1,009) (1,472) Other comprehensive income / (loss), net of income taxes: Unrealized holding gains / (losses) arising during the period 51 (31) - --------------------------------------------------------------------------------------------------------------------------- Comprehensive loss $ (958) $ (1,503) - ------------------------------------------------------------------------------ =============--==============--------------- - ------------------------------------------------------------------------------ =============--==============--------------- Basic earnings per share from continuing operations $ 0.10 $ 0.01 Basic loss per share from discontinued operations $ (0.80) $ (0.92) Basic gain per share from disposal of Genesee Ventures, Inc. $ 0.09 $ - - --------------------------------------------------------------------------------------------------------------------------- Basic loss per share $ (0.61) $ (0.91) - --------------------------------------------------------------------------------------------------------------------------- - --------------------------------------------------------------------------------------------------------------------------- Diluted earnings per share from continuing operations $ 0.10 $ 0.01 Diluted loss per share from discontinued operations $ (0.80) $ (0.92) Diluted gain per share from disposal of Genesee Ventures, Inc. $ 0.09 $ - - --------------------------------------------------------------------------------------------------------------------------- Diluted loss per share $ (0.61) $ (0.91) - --------------------------------------------------------------------------------------------------------------------------- - --------------------------------------------------------------------------------------------------------------------------- Weighted average common shares outstanding 1,621,164 1,620,197 Weighted average and common equivalent shares 1,621,164 1,620,197
See accompanying notes to consolidated financial statements. 3 GENESEE CORPORATION AND SUBSIDIARIES Consolidated Statements of Earnings and Comprehensive Loss Twenty Six Weeks Ended October 28, 2000 and October 30, 1999 (Dollars in thousands, except per share data) UNAUDITED UNAUDITED 2000 1999 Revenues $ 23,943 $ 23,002 Cost of goods sold 21,525 20,400 - ---------------------------------------------------------------------------------------------------------------------------- Gross profit 2,418 2,602 Selling, general and administrative expenses 2,878 3,273 - ---------------------------------------------------------------------------------------------------------------------------- Operating loss (460) (671) Investment income 298 276 Other income 326 48 Interest expense (216) (292) - ---------------------------------------------------------------------------------------------------------------------------- Loss from continuing operations before income taxes (52) (639) Income tax expense (benefit) 323 (210) - ---------------------------------------------------------------------------------------------------------------------------- Loss from continuing operations (375) (429) - - Discontinued operations: Loss from operations of the discontinued segments (less applicable income tax benefit of $563 and $595, respectively) (881) (517) Adjustment to the loss on disposal of Genesee Ventures, Inc. (less applicable net income tax expense of $168 in fiscal 2001) 264 0 - ---------------------------------------------------------------------------------------------------------------------------- Net loss (992) (946) Other comprehensive income / (loss), net of income taxes: Unrealized holding gains / (losses) arising during the period 120 (161) - ---------------------------------------------------------------------------------------------------------------------------- Comprehensive loss $ (872) $ (1,107) - -------------------------------------------------------------------------------==============-===============--------------- - -------------------------------------------------------------------------------==============-===============--------------- Basic loss per share from continuing operations $ (0.23) $ (0.26) Basic loss per share from discontinued operations $ (0.54) $ (0.32) Basic gain per share from disposal of Genesee Ventures, Inc. $ 0.16 $ - - ---------------------------------------------------------------------------------------------------------------------------- Basic loss per share $ (0.61) $ (0.58) - ---------------------------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------------------------- Diluted earnings (loss) per share from continuing operations $ (0.23) $ (0.26) Diluted loss per share from discontinued operations $ (0.54) $ (0.32) Diluted gain per share from disposal of the Foods Division $ 0.16 $ - - ---------------------------------------------------------------------------------------------------------------------------- Diluted loss per share $ (0.61) $ (0.58) - ---------------------------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------------------------- Weighted average common shares outstanding 1,620,904 1,618,909 Weighted average and common equivalent shares 1,620,904 1,618,909
See accompanying notes to consolidated financial statements. 4 GENESEE CORPORATION AND SUBSIDIARIES Consolidated Statements of Cash Flows Twenty Six Weeks Ended October 28, 2000 and October 30, 1999 (Dollars in thousands) UNAUDITED UNAUDITED 2000 1999 Cash flows from operating activities: Net loss from continuing operations $ (375) $ (429) Adjustments to reconcile net loss to net cash (used in) provided by operating activities: Net loss on sale of marketable securities 10 23 Depreciation and amortization 1,520 1,325 Other 35 36 Changes in non-cash assets and liabilities: Trade accounts receivable (1,165) (1,383) Inventories (2,003) 1,798 Other assets 599 (43) Accounts payable 234 1,438 Accrued expenses and other (142) (879) Income taxes payable 134 (1,696) Other liabilities (625) 0 - ------------------------------------------------------------------------------------------------------------------------------------ Net cash (used in) provided by continuing operating activities (1,778) 190 Net cash (used in) provided by discontinued operations (1,347) 375 - ------------------------------------------------------------------------------------------------------------------------------------ Net cash (used in) provided by operating activities (3,125) 565 - ------------------------------------------------------------------------------------------------------------------------------------ Cash flows from investing activities: Capital expenditures, net (560) (2,626) Proceeds from sale of marketable securities 408 2,413 Purchases of marketable securities and other investments (654) (2,262) - ------------------------------------------------------------------------------------------------------------------------------------ Net cash used in continuing investing activities (806) (2,475) Net cash provided by discontinued operations 902 1,068 - ------------------------------------------------------------------------------------------------------------------------------------ Net cash provided by (used in) investing activities 96 (1,407) - ------------------------------------------------------------------------------------------------------------------------------------ Cash flows from financing activities: Proceeds from acquisition of debt 0 1,700 Principal payments on debt (150) (40) Payment of dividends (567) (1,134) - ------------------------------------------------------------------------------------------------------------------------------------ Net cash (used in) provided by financing activities (717) 526 - ------------------------------------------------------------------------------------------------------------------------------------ Net decrease in cash and cash equivalents (3,746) (316) Cash and cash equivalents at beginning of the period 7,649 5,836 - ------------------------------------------------------------------------------------------------------------------------------------ Cash and cash equivalents at end of the period $ 3,903 $ 5,520 - -----------=================================================================================-================-------------------- - -----------=================================================================================-================--------------------
See accompanying notes to consolidated financial statements. 5 GENESEE CORPORATION Notes to Consolidated Financial Statements NOTE (A) Planned Divestiture of the Corporation's Operating Businesses The Corporation's Board of Directors has authorized the sale of all the Corporation's assets and on October 19, 2000, the Corporation's shareholders approved a plan to dissolve and liquidate the Corporation. The Corporation will be liquidated by selling or otherwise disposing of all the Corporation's assets and winding up all of the Corporation's affairs. The proceeds from this liquidation will then be distributed, after paying or providing for all its claims, obligations and expenses, to the Corporation's shareholders in a series of liquidating distributions, after which the Corporation will be dissolved. On December 15, 2000, the Corporation sold substantially all the assets of the brewing business for $25.8 million to a management group led by the Corporation's former President and Chief Executive Officer. In August 2000 the Corporation entered into a letter of intent to sell all of the outstanding stock of Ontario Foods, Inc., which represents the Corporation's Foods Division, to Ralcorp Holdings, Inc. The letter of intent has now expired, but the Corporation is continuing to have discussions with Ralcorp. The Corporation's equipment leasing subsidiary has signed a Portfolio Purchase Agreement to sell a significant portion of its lease portfolio for $15.3 million, generating net proceeds to the Corporation of approximately $13 million. This transaction is expected to result in an estimated net loss of approximately $3.1 million, which was recorded in the fourth quarter of fiscal 2000. The Corporation adjusted this loss by $264,000, net of tax expense for fiscal 2001, year to date, which reflects better than expected leasing operating results. The Corporation is evaluating strategies to sell or otherwise divest the Corporation's remaining assets. In accordance with generally accepted accounting principles, the results of operations of the Corporation's brewing, equipment leasing and real estate businesses have been segregated from the Corporation's continuing operations and accounted for as discontinued operations in the accompanying consolidated statements of earnings and comprehensive income and in the consolidated statements of cash flows. Continuing operations consist of the Corporate segment, which operates primarily as the Corporation's treasury, and the Foods Division. The results of operations for the discontinued brewing, equipment leasing and real estate investment businesses were as follows: Thirteen weeks ended Twenty six weeks ended (Dollars in thousands) October 28, 2000 October 30, 1999 October 28, 2000 October 30, 1999 Revenue $ 25,737 $ 29,938 $ 55,624 $ 66,961 Less Beer Taxes (4,751) (5,820) (10,742) (13,653) Net Revenue 20,986 24,118 44,882 53,308 Cost of Goods Sold (16,346) (18,424) (33,879) (39,253) Selling, General, and Admin. ( 6,557) (8,308) (12,035) (15,074) Other Income (Expense) 11 (200) 20 (93) Loss from operations of the discontinued segments, net of tax benefit (1,303) ( 1,487) (881) (517) Adjustment to the Loss on Disposal of Genesee Ventures, Inc., net of tax $ 139 $ 0 $ 264 $ 0 expense
6 GENESEE CORPORATION Notes to Consolidated Financial Statements NOTE(A)Planned Divestiture of the Corporation's Operating Businesses (continued) The net assets of the brewing, equipment leasing and real estate investment businesses have been excluded from their respective captions and reported as net (liabilities) assets held for disposal in the accompanying consolidated balance sheet at October 28, 2000. The net assets of the brewing, equipment leasing and real estate investment businesses at October 28, 2000 were as follows: (Dollars in thousands) Accounts receivable, net $ 4,764 Inventory 5,774 Net deferred income tax asset, current portion 1,008 Other current assets 1,278 Accounts payable (5,448) Federal and state beer taxes payable (1,065) Accrued compensation (2,642) Accrued postretirement benefits, current portion (600) Accrued expenses and other (3,754) ----------------- Net liabilities held for disposal - current ($685) ----------------- ----------------- Net property, plant and equipment $ 22,021 Investment in and notes receivable from unconsolidated real estate partnerships 5,218 Investment in direct financing and leveraged leases 20,047 Other assets 966 Net deferred income tax liability, noncurrent portion (6,372) Accrued postretirement benefits, noncurrent portion (14,476) Other liabilities (65) Minority interest (2,738) ----------------- Net assets held for disposal - noncurrent $ 24,601 ----------------- ----------------- 7 GENESEE CORPORATION Notes to Consolidated Financial Statements NOTE (B) The Corporation's consolidated financial statements presented herein are unaudited with the exception of the Consolidated Balance Sheet at April 29, 2000 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 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 on Form 10-K for the year ended April 29, 2000. It is the Corporation's policy to reclassify certain amounts in the prior year consolidated financial statements to conform with the current year presentation. Certain reclassifications of the October 30, 1999 financial statements have been made to reflect the Company's fiscal 2001 discontinued operations (as discussed in Note A above.) NOTE (C) Inventories of continuing operations are summarized as follows: Dollars in thousands October 30, 2000 April 29,2000 Finished goods $ 4,606 $ 4,867 Raw materials, containers and packaging supplies 6,594 4,330 ----------- --------- Total inventories $ 11,200 $ 9,197 ----------- --------- ----------- --------- 8 GENESEE CORPORATION Notes to Consolidated Financial Statements NOTE (D) Segment Reporting The Corporation has two reportable segments included in continuing operations: food processing and corporate. The food processing segment produces dry side dish, bouillon, artificial sweeteners, soup, drink mix and instant iced tea products under private label for many of the country's largest supermarket chains. The corporate segment retains the Corporation's investments in marketable securities, generating investment income as well as supporting corporate costs. The Corporation has two business segments included in discontinued operations: brewing and equipment leasing and real estate. The brewing segment, which was sold on December 15, 2000 (see Note A), produced beers and ales for wholesale and retail distribution throughout the United States, primarily in the northeast region of the country. The equipment leasing and real estate segment leases construction, transportation and other high-value equipment and machinery, and partners with experienced real estate developers to invest in certain properties. The Corporation evaluates performance based on operating income or loss and earnings before income taxes. Intersegment sales and transfers are not material and are eliminated in consolidation. No single customer accounted for more than 10% of revenues, and the Corporation's international revenues are not significant. The Corporation's segments, other than corporate, are strategic business units that offer different products and services. They are managed separately because each business requires different technology and marketing strategies. Financial information for the Corporation's reportable segments is as follows: - ---------------------------------------------------------------------------------------------------------- Food Discontinued For the thirteen week period ended: Processing Corporate Operations Consolidated - -------------------------------------------- ----------------------------------------------- - ---------------------------------------------------------------------------------------------------------- October 28, 2000 - ---------------------------------------------------------------------------------------------------------- Net revenues from external customers $ 12,869 $ - $ - $ 12,869 Depreciation and amortization 758 - - 758 Operating income (loss) 685 (150) - 535 Investment income - 146 - 146 Earnings (loss) from continuing Operations before income taxes 658 (4) - 654 Identifiable assets 55,464 12,424 24,601 92,489 Capital expenditures 141 - - 141 - ---------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------- October 30, 1999 - ---------------------------------------------------------------------------------------------------------- Net revenues from external customers $ 12,517 $ - $ - $ 12,517 Depreciation and amortization 626 - - 626 Operating income (loss) 279 (175) - 104 Investment income - 115 - 115 Income (loss) from continuing Operations before income taxes 194 (106) - 88 Identifiable assets 54,729 2,474 81,589 138,792 Capital expenditures 564 - - 564 - ----------------------------------------------------------------------------------------------------------
9 GENESEE CORPORATION Notes to Consolidated Financial Statements NOTE (D) Segment Reporting (continued) Financial information for the Corporation's reportable segments is as follows: - ---------------------------------------------------------------------------------------------------------- Food Discontinued For the twenty six week period ended: Processing Corporate Operations Consolidated - -------------------------------------------- ----------------------------------------------- - ---------------------------------------------------------------------------------------------------------- October 28, 2000 - ---------------------------------------------------------------------------------------------------------- Net revenues from external customers $ 23,943 $ - $ - $ 23,943 Depreciation and amortization 1,520 - - 1,520 Operating loss (210) (250) - (460) Investment income - 298 - 298 (Loss)/earnings from continuing Operations before income taxes (100) 48 - (52) Identifiable assets 55,464 12,424 24,601 92,489 Capital expenditures 560 - - 560 - ---------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------- October 30, 1999 - ---------------------------------------------------------------------------------------------------------- Net revenues from external customers $ 23,002 $ - $ - $ 23,002 Depreciation and amortization 1,325 - - 1,325 Operating loss (288) (383) - (671) Investment income - 276 - 276 Loss from continuing Operations before income taxes (436) (203) - (639) Identifiable assets 54,729 2,474 81,589 138,792 Capital expenditures 2,626 - - 2,626 - ----------------------------------------------------------------------------------------------------------
NOTE (E) Supplemental Cash Flow Information Cash paid for taxes was $ 67,000 and $ 1,034,000 for the thirteen week period ended October 28, 2000 and October 30, 1999, respectively; cash paid for interest was $ 108,000 and $ 150,000 for the thirteen week period ended October 28, 2000 and October 30, 1999, respectively. Cash paid for taxes was $ 133,000 and $ 1,485,000 for the twenty six week period ended October 28, 2000 and October 30, 1999, respectively; cash paid for interest was $ 216,000 and $ 292,000 for the twenty six week period ended October 28, 2000 and October 30, 1999, respectively. 10 GENESEE CORPORATION Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations This financial review should be read in conjunction with the accompanying consolidated financial statements. The discussion of operating results and liquidity and capital resources for fiscal 2001 and fiscal 2000 excludes the discontinued brewing and equipment leasing and real estate investment businesses discussed in Note (A) to the accompanying consolidated financial statements. SUMMARY OF CONTINUING AND DISCONTINUED OPERATIONS Comparison of 13 weeks ended October 28, 2000 to 13 weeks ended October 30, 1999 On a consolidated basis, the Corporation reported operating income from continuing operations of $535,000, which was an increase of $431,000 as compared to the same period last year. On a consolidated basis, the Corporation reported earnings from continuing operations of $155,000, or $.10 basic and diluted earnings per share, in the second quarter this year, compared to earnings from continuing operations of $15,000, or $.01 basic and diluted earnings per share, for the same period last year. The Corporation reported a net loss from discontinued operations of $1.2 million, net of tax benefit of $742,000, or $.71 basic and diluted loss per share for the second quarter of fiscal 2001, compared to a net loss from discontinued operations of $1.5 million, net of tax benefit of $1.3 million, or $.92 basic and diluted loss per share for the same period last year. Comparison of 26 weeks ended October 28, 2000 to 26 weeks ended October 30, 1999 On a consolidated basis, the Corporation reported an operating loss from continuing operations of $460,000, which was an improvement of $211,000 as compared to the same period last year. On a consolidated basis, the Corporation reported a loss from continuing operations of $375,000, or $.23 basic and diluted loss per share, in the first half of this year, compared to a loss from continuing operations of $429,000, or $.26 basic and diluted loss per share, for the same period last year. The Corporation reported a net loss from discontinued operations of $617,000, net of tax benefit of $395,000, or $.38 basic and diluted loss per share for the first half of fiscal 2001, compared to a net loss from discontinued operations of $517,000, net of tax benefit of $595,000, or $.32 basic and diluted loss per share for the same period last year. 11 GENESEE CORPORATION Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations (continued) RESULTS OF CONTINUING OPERATIONS Comparison of 13 weeks ended October 28, 2000 to 13 weeks ended October 30, 1999 Foods Division Net sales for the Corporation's Foods Division increased $352,000 to $12.9 million in the second quarter this year as compared to $12.5 million for the same period last year. The increase in net sales was primarily attributable to increased sales of a new drink mix product. Gross profit for the Foods Division increased by $ 249,000 to $2.0 million in the second quarter this year as compared to $1.8 million for the same period last year. Selling, general and administrative expenses decreased $158,000 to $1.3 million in the second quarter of fiscal 2001 compared to $1.5 million for the same period last year. This decrease is the result of a variety of reductions in SG&A costs realized in the second quarter of fiscal 2001. The Foods Division had operating income of $685,000 in fiscal 2001, which was $406,000 greater than the $279,000 operating income reported in fiscal 2000. Foods Division profitability in fiscal 2001 was positively impacted by the reasons identified above. Comparison of 26 weeks ended October 28, 2000 to 26 weeks ended October 30, 1999 Foods Division Net sales for the Corporation's Foods Division increased $941,000 to $23.9 million in the first half of fiscal 2001 as compared to $23.0 million for the same period last year. The increase in net sales was primarily attributable to increased sales of a new drink mix product. Gross profit for the Foods Division decreased by $185,000 when comparing the first half of fiscal 2001 and fiscal 2000. Gross profit for the first half of fiscal 2001 includes a $900,000 pre-tax charge for estimated costs associated with a product quality problem involving a new drink mix product while the prior year gross profit reflects $1.1 million of costs associated with transitioning production to the Medina, New York facility. Selling, general and administrative expenses decreased $261,000 to $2.6 million in the first half of fiscal 2001 compared to $2.9 million for the same period last year. This decrease is the result of a variety of reductions in SG&A costs realized in the first half of fiscal 2001. The Foods Division had an operating loss of $210,000 in fiscal 2001, which was $78,000 less than the $288,000 operating loss reported in fiscal 2000. 12 GENESEE CORPORATION Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations (continued) LIQUIDITY AND CAPITAL RESOURCES (from continuing operations) Cash and cash equivalents and marketable securities in the aggregate decreased $3.3 million from April 29, 2000 to October 28, 2000. Cash and cash equivalents decreased $3.7 million from April 29, 2000 to October 28, 2000. Marketable securities increased $451,000 from April 29, 2000 to October 28, 2000. Net trade accounts receivable increased by $1.2 million. This increase from the April 29, 2000 balance is primarily attributable to timing and increased sales volume at the Foods Division. Inventories increased by $2.0 million. This increase from April 29, 2000 is related to additional purchases of sugar by the Foods Division. Net property, plant and equipment increased an immaterial amount as a result of routine capital expenditures by the Foods division exceeding normal depreciation expense for the first quarter of fiscal 2001. Other liabilities decreased by $625,000. This decrease from April 29, 2000 is due to payment of a deferred compensation arrangement to the estate of the former Chairman of the Board and Chief Executive Officer of the Corporation during the first half of fiscal 2001. Notes payable decreased $150,000. This decrease from April 29, 2000 is a result of normal debt payments and expected amortization of notes payable. In connection with the decision to sell or dispose of all the Corporation's assets and dissolve and liquidate the Corporation, the Corporation's Board of Directors has decided to suspend the payment of quarterly dividends and to instead make liquidating distributions as and when feasible under the Corporation's plan of liquidation and dissolution. Forward-Looking Statements This report contains forward-looking statements within the meaning of the federal securities laws. These forward-looking statements may include statements about the operations and prospects for the Corporation and its subsidiary businesses. These forward-looking statements include statements regarding the timing and results of the sale of the Corporation's equipment leasing business, the estimated loss from the sale of the equipment leasing businesses, and the dissolution and liquidation of the Corporation. These forward-looking statements involve significant risks and uncertainties and there can be no assurance that the expectations or results reflected in these statements will be realized or achieved. Risks and uncertainties relating to the proposed sale of the Corporation's equipment leasing business include, without limitation, the failure of the transaction to close for whatever reasons, further negotiation of terms and conditions, purchase price adjustments, post-closing indemnification obligations, the failure to satisfy other conditions necessary to consummate the transaction such as failure to obtain necessary regulatory approvals and third party consents, and the possibility that a delay in resolving such conditions could jeopardize the transaction. Risks and uncertainties relating to the disposition of the Corporation's food business include, without limitation, failure to reach agreement with Ralcorp on the sale of the business, failure to find another suitable buyer if a sale to Ralcorp is not completed, and risks associated with continuing to operate the business while seeking other buyers. Risks and uncertainties relating to the dissolution and liquidation of the Corporation include, without limitation, the actual amount of proceeds from the sale of the Corporation's assets, the ultimate settlement amounts of the Corporation's liabilities and obligations, actual costs incurred in connection with carrying out the plan of dissolution and liquidation, including administrative costs during the liquidation period, the amount of income earned on the Corporation" cash and cash equivalents and short-term investments during the liquidation period, and the actual timing of distributions. 13 GENESEE CORPORATION PART II. OTHER INFORMATION Item 4. Submission of Matters to a Vote of Security Holders The Corporation's annual meeting of Class A shareholders was held on October 19, 2000. At the annual meeting, shareholders elected Gary C. Geminn (by a vote of 187,696 shares For and 6,042 withheld) and Charles S. Wehle (by a vote of 187,999 shares For and 5,739 withheld) to serve as directors until the annual meeting of shareholders in 2003. The terms of office of Stephen B. Ashley, William A. Buckingham, and Samuel T. Hubbard, Jr. continued after the annual meeting of shareholders. At the annual meeting, Class A shareholders also approved (a) by a vote of 168,293 shares For and 1,213 shares against, a proposal to approve a plan of Liquidation and Dissolution and (b) by a vote of 165,970 shares For and 3,484 shares against, a proposal to amend the Corporation's Certificate of Incorporation. Item 5. Other Information Following the completion of the management buyout of the Corporation's brewing business, the following officers of the Corporation (who are investors in the management buyout entity) resigned as officers of the Corporation: Samuel T. Hubbard, Jr., President and Chief Executive Officer; John B. Henderson, Senior Vice President and Chief Financial Officer; William A. Neilson, Vice President - Human Resources; and Michael C. Atseff, Vice President and Controller. Mr. Hubbard will continue as a director of the Corporation. The Board of Directors has elected Stephen B. Ashley President of the Corporation, Mark W. Leunig Senior Vice President and Chief Administrative Officer, and Steven M. Morse Vice President and Treasurer. Item 6. Exhibits and Reports on Form 8-K (a) Exhibits. The following exhibits are attached to this report: Exhibit 2-1 Plan of Liquidation and Dissolution (b) Reports on Form 8-K. The Corporation filed reports on Form 8-K on August 16, 2000, August 30, 2000, September 27, 2000, and October 19, 2000 to report information under Item 5 (Other Events.) 14 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: 12/18/00 /s / Mark W. Leunig Mark W. Leunig Sr. Vice President and Chief Administrative Officer Date: 12/18/00 /s / Steven M. Morse Steven M. Morse Vice President and Treasurer 15 GENESEE CORPORATION EXHIBIT INDEX Exhibit Number Exhibit Page No. 2-1 Plan of Liquidation and Dissolution 17 16 Exhibit 2-1 PLAN OF LIQUIDATION AND DISSOLUTION OF GENESEE CORPORATION This Plan of Liquidation and Dissolution (the "Plan") is intended to affect the complete, voluntary liquidation and dissolution of Genesee Corporation, a New York corporation (the "Corporation"), in accordance with Section 331 of the Internal Revenue Code and Article 10 of the New York Business Corporation Law ("BCL") in substantially the following manner: 1. This Plan shall be effective on the date (the "Effective Date") on which it is approved by the shareholders of the Corporation in accordance with the BCL. After the Effective Date, the following actions shall be taken: (a) The Corporation shall sell, exchange, lease or otherwise dispose of its assets, upon such terms and conditions and for such consideration as may be fixed from time to time by the Corporation's Board of Directors. (b) The Corporation shall collect or make provision for the collection of accounts receivable, debts and claims owing it. (c) The Corporation shall (i) pay and discharge or make adequate provision for the payment and discharge of all debts, expenses, taxes and liabilities of the Corporation, (ii) withdraw from all jurisdictions in which the Corporation is qualified to do business, (iii) wind up its business and affairs, and (iv) complete the formal dissolution of the Corporation under the New York Business Corporation Law. (d) Subject to the payment of or the making of other provision for the debts, expenses, taxes and other liabilities of the Corporation, including contingent liabilities, all of the assets of the Corporation shall be distributed to or on behalf of its shareholders in accordance with their respective rights in one or a series of distributions, at any time or from time to time, before or after the formal dissolution of the Corporation, in cash or in kind, in any manner that the Board of Directors, in its discretion, may determine. 2. Implementation of this Plan shall be under the direction of the Board of Directors of the Corporation, which shall have full authority and discretion to carry out the provisions of this Plan or such other actions it deems appropriate, including without limitation amendment or abandonment of this Plan, whether prior or subsequent to the formal dissolution of the Corporation, without further shareholder action. 3. Subject to the direction of the Corporation's Board of Directors, the appropriate officers of the Corporation are hereby authorized to take any and all actions and to execute, deliver and file any and all agreements, documents or other instruments which are necessary or convenient to carry out this Plan, including without limitation the execution and filing with the New York Department of State of a certificate of dissolution. 17 EX-27 2 0002.txt ART. 5 FDS FOR 2ND QUARTER 10-Q
5 1,000 6-MOS APR-28-2001 OCT-28-2000 3,903 8,480 4,203 262 11,200 27,724 17,851 5,142 92,489 4,441 0 858 0 0 80,928 92,489 23,943 23,943 21,525 21,525 2,878 0 216 (52) 323 (375) (617) 0 0 (992) (.61) (.61)
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