-----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, ebncfjQwtUzTAvU8PK+dSlULKOwQ21ukAe7xHJc5529XxyrOlMEnFoPKMbcpOKmr xqgc5W2JUirM8vk9APndbg== 0000040934-95-000011.txt : 19950616 0000040934-95-000011.hdr.sgml : 19950616 ACCESSION NUMBER: 0000040934-95-000011 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950128 FILED AS OF DATE: 19950309 DATE AS OF CHANGE: 19950321 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: GENESEE CORP CENTRAL INDEX KEY: 0000040934 STANDARD INDUSTRIAL CLASSIFICATION: 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: 95519526 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 1/28/95 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 JANUARY 28, 1995 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 incorporation or organization) (I.R.S. Employer 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), 1,392,136 par value $.50 per share 1
GENESEE CORPORATION AND CONSOLIDATED SUBSIDIARIES CONSOLIDATED BALANCE SHEETS January 28, 1995 and April 30, 1994 UNAUDITED AUDITED (Dollars in Thousands) January 28, 1995 April 30, 1994 ASSETS Current assets: Cash and cash equivalents $13,514 7,159 Marketable securities available for sale, at market 32,590 30,800 Trade accounts receivable, less allowance for doubtful accounts of $660 at January 28, 1995; $677 at April 30, 1994 9,226 11,479 Inventories, at lower of cost (FIFO) or market; Finished goods 4,005 3,479 In process 1,382 1,056 Raw materials 8,433 6,178 Total Inventories 13,820 10,713 Deferred income tax assets - current 1,816 2,073 Real estate mortgage receivable - current 5,807 0 Other current assets 1,956 809 Total current assets 78,729 63,033 Property, plant and equipment, at cost 120,052 127,502 Less accumulated depreciation 91,405 88,410 Net property, plant and equipment 28,647 39,092 Investment in and notes receivable from unconsolidated real estate partnership 4,358 4,514 Real estate mortgage receivable 0 6,000 Investment in: Direct financing leases 2,580 2,967 Leveraged leases 21,064 19,350 Total investments in leases 23,644 22,317 Deferred income tax assets - long term 12,902 13,679 Other non current assets 1,842 2,077 Total assets $150,122 150,712 LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Current installments of long term debt of consolidated real estate partnerships $258 258 Accounts payable 11,634 11,982 Accrued compensation and other expenses 4,334 3,204 Federal and state income and excise taxes payable 1,223 414 Federal and state beer taxes 1,460 2,147 Deferred income taxes - current 961 912 Accrued postretirement benefits - current 566 566 Total current liabilities 20,436 19,483 Deferred income taxes - long term 18,924 18,718 Accrued postretirement benefits - long term 15,876 15,273 Mortgage notes payable on real estate investments 3,840 9,611 Other liabilities 308 70 Total liabilities 59,384 63,155 Minority interests in consolidated subsidiaries 1,461 1,454 Shareholders' equity: Common stock Class A 105 105 Common stock Class B 753 753 Additional paid-in capital 5,882 5,882 Retained earnings 87,921 83,385 Less unrealized loss on marketable securities, net of income taxes 1,376 0 93,285 90,125 Less treasury stock 4,008 4,022 Total shareholders' equity 89,277 86,103 Total liabilities and shareholders' equity $150,122 150,712 See accompanying notes to consolidated financial statements.
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GENESEE CORPORATION AND CONSOLIDATED SUBSIDIARIES CONSOLIDATED STATEMENTS OF EARNINGS AND RETAINED EARNINGS Thirteen Weeks Ended January 28, 1995 and January 29, 1994 (Dollars in Thousands, Except Per Share Data) UNAUDITED 1995 1994 Revenues $41,464 41,992 Less: Federal and state beer taxes 8,867 9,458 Sales returns and allowances 813 741 9,680 10,199 Net revenues 31,784 31,793 Cost of sales 22,947 23,335 Gross profit 8,837 8,458 Selling, general and administrative expenses 7,092 8,357 Operating income 1,745 101 Investment income 837 1,966 Other income / (expense), net (34) (44) Interest of minority partners in earnings of consolidated subsidiaries (162) (97) Earnings before income taxes 2,386 1,926 Income taxes 942 748 Net earnings - $.90 per share in 1995, $.74 in 1994 1,444 1,178 Retained earnings at beginning of period 86,477 82,416 Retained earnings at end of period $87,921 $83,594 See accompanying notes to consolidated financial statements.
3
GENESEE CORPORATION AND CONSOLIDATED SUBSIDIARIES CONSOLIDATED STATEMENTS OF EARNINGS AND RETAINED EARNINGS Thirty Nine Weeks Ended January 28, 1995 and January 29, 1994 (Dollars in Thousands, Except Per Share Data) UNAUDITED 1995 1994 Revenues $131,148 139,711 Less: Federal and state beer taxes 29,196 32,294 Sales returns and allowances 2,419 2,127 31,615 34,421 Net revenues 99,533 105,290 Cost of sales 71,460 77,180 Gross profit 28,073 28,110 Selling, general and administrative expenses 22,850 26,410 Operating income 5,223 1,700 Investment income 2,420 4,142 Other income / (expense), net (194) (307) Gain on sale of interest in real estate partnership 1,670 0 Interest of minority partners in earnings of consolidated subsidiaries (483) (315) Earnings before income taxes and cumulative effect of change in accounting principle 8,636 5,220 Income taxes 3,418 2,052 Net earnings before cumulative effect of change in accounting principle 5,218 3,168 Cumulative effect to May 1, 1994 of change in accounting for investments in debt and equity securities 760 0 Net earnings - $3.73 per share in 1995, $1.98 in 1994 5,978 3,168 Retained earnings at beginning of period 83,385 81,867 Less: Dividends - $.90 per share in 1995 and $.90 per share in 1994 1,442 1,441 Retained earnings at end of period $87,921 $83,594 See accompanying notes to consolidated financial statements.
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GENESEE CORPORATION AND CONSOLIDATED SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS Thirty Nine Weeks Ended January 28, 1995 and January 29, 1994 UNAUDTIED (Dollars in Thousands) 1995 1994 Cash flows from operating activities: Net Income $5,978 3,168 Adjustment to reconcile net income to net cash provided by operating activities: Cumulative effect of change in accounting principle (760) 0 Depreciation 3,835 4,711 Provision for unrealized losses on short-term investments 0 270 Interest of minority partners in earnings of consolidated subsidiaries 483 315 Gain on investment in real estate partnership (1,670) 0 Changes in non-cash assets and liabilities: (Increase) decrease in : Trade accounts receivable 2,253 858 Inventories (3,107) 120 Deferred income tax assets 1,444 (1,001) Other assets (912) 676 (Decrease) increase in : Accounts payable (348) (3,313) Accrued compensation and other expenses 1,130 1,416 Income taxes payable 809 763 Federal and state beer taxes (687) 441 Deferred income tax liabilities 255 1,333 Accrued postretirement benefits 603 900 Other liabilities 238 (668) Net cash provided by operating activities 9,544 9,989 Cash flows from investing activities: Capital expenditures (2,667) (4,978) Sale of marketable securities 9,434 29,522 Purchases of marketable securities (12,250) (25,198) Investments in and advances to unconsolidated real estate partnerships 156 (1,801) Principal payments on real estate mortgage receivable 193 (183) Proceeds from sale of property, plant, and equipment 10,947 0 Net investment in direct financing and leveraged leases (1,327) (1,416) Contributions (withdrawals) by minority interest (476) (142) Net cash provided (used) by investing activities 4,010 (4,196) Cash flows from financing activities: Principal payments on long term debt of consolidated real estate partnerships (5,771) 0 Net proceeds from treasury stock transactions 14 0 Payment of dividends (1,442) (1,441) Net cash used by financing activities (7,199) (1,441) Net increase in cash and cash equivalents 6,355 4,352 Cash and cash equivalents at beginning of period 7,159 3,227 Cash and cash equivalents at end of period $13,514 7,579 Supplemental disclosure of cash flow information: Cash paid during the year for: Income taxes $856 704 Interest paid on consolidated real estate investment mortgage debt $498 551 See accompanying notes to consolidated financial statements.
5 GENESEE CORPORATION Notes to Consolidated Financial Statements NOTE (A) The weighted average number of Class A and Class B shares outstanding used in the computation of net earnings per share is 1,602,021 for the thirteen week period ended January 28, 1995 and 1,601,322 for the thirteen week period ended January 29, 1994. The weighted average number of Class A and Class B shares outstanding used in the computation of net earnings per share is 1,601,782 for the thirty nine weeks ended January 28, 1995 and 1,601,322 for the thirty nine weeks ended January 29, 1994. NOTE (B) The Corporation's consolidated financial statements enclosed herein are unaudited with the exception of the Consolidated Balance Sheet at April 30, 1994 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. NOTE (C) In the opinion of management, the interim financial statements reflect all adjustments, consisting of only normal recurring items (with the exception of the accounting changes on May 1, 1994 to adopt Statement of Financial Accounting Standards No. 115, Accounting for Certain Investments in Debt and Equity Securities) which are necessary for a fair presentation of the results for the periods presented. NOTE (D) The Corporation's net earnings reported for the thirty-nine weeks of fiscal 1995 include $760,000 (net of income taxes) relating to the cumulative effect to May 1, 1994 of a change in the accounting treatment for investments in debt and equity securities. Effective at the beginning of fiscal 1995, the Corporation was required to adopt Statement of Financial Accounting Standards No. 115, Accounting for Certain Investments in Debt and Equity Securities (SFAS 115). The Corporation has classified all of its marketable debt and equity securities as available for sale. The Available for Sale classification means that such securities are shown on the Corporation's balance sheet at market value and that any change in the market value of these securities is reflected as a separate component of stockholders' equity on the balance sheet until such time that a security is sold. At that time, the Corporation will record a realized gain or loss on its statement of earnings. The cumulative effect to May 1, 1994 of this accounting change relates to the fact that prior to and through April 30, 1994, the Corporation had recorded $1.3 million in unrealized pre-tax losses on its investment portfolio. 6 GENESEE CORPORATION Item 2. Management's Discussion and Analysis of Financial Condition & Results of Operations Comparison of 13 weeks ended January 28, 1995 to 13 weeks ended January 29, 1994 Consolidated net revenues for the 13 weeks ended January 28, 1995 were $31.8 million, which is roughly equal to consolidated net revenues reported for the same period last year. Consolidated net earnings were $1.4 million, or $.90 per share in the 13 weeks this year, compared to net earnings of $1.2 million, or $.74 per share, for the same period last year. Genesee Brewing Company's net sales in the third quarter were $26.8 million, an increase of $1.0 million or 3.9% from last year's net sales of $25.8 million. Barrelage increased 1% to 445,000 barrels in the third quarter this year. The increase in net revenues and barrel sales for Genesee Brewing Company was primarily the result of rapid growth in the sales of JW Dundee's Honey Brown Lager, a higher priced specialty brew that was introduced in January 1994. Over the past few years, consumer trends in the malt beverage industry have favored innovative new brands and packages. Genesee Brewing Company has addressed this trend by continuing to introduce new brands and package configurations. During the third quarter this year, Genesee Brewing Company introduced Koch's Ice Beer, extending its line of popularly priced Kochs products. In addition, Genesee Brewing Company introduced 30 and 36 can package configurations in several major markets in an effort to capitalize on the continued popularity of can packages. Sales of these new products and packages have helped to offset declining sales in Genesee Brewing Company's established brands. The increase in Genesee Brewing Company's third quarter net sales was also the result of increased export sales. Export sales more than doubled in the third quarter this year to 22,359 barrels as compared to 10,573 barrels for the same period last year. The growth in export sales was the direct result of renewed sales efforts and greater focus on the export market segment. Genesee Brewing Company's net sales per barrel were up 3.7% for the third quarter this year, compared to the third quarter last year primarily as a result of a general price increase that went into effect late in fiscal 1994. A shift in product mix to Genesee Brewing Company's higher-priced specialty products and a $660,000 federal excise tax credit that was taken in the quarter also contributed to the increase in net sales per barrel. Net sales for Ontario Foods were $4.5 million in the third quarter, compared to $5.1 million for the third quarter of fiscal 1994. The decline in sales was attributable to the restructuring program initiated in August 1993 whereby several low profit product lines were eliminated. Ontario Foods experienced higher sales during the third quarter last year than this year as customers built inventories pending transition to other suppliers. 7 GENESEE CORPORATION Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations (continued) Although overall sales were down in the third quarter of fiscal 1995, Ontario Foods' private label business continued to grow. Private label sales for the third quarter were approximately $394,000 higher than last year due in part to continued growth in Ontario Foods' side dish business. Sales of these items were up $183,000 in the third quarter this year compared to the third quarter last year. In addition, late in the second quarter of this fiscal year, Ontario Foods completed the acquisition of several private label product lines from a New Jersey food processing company. Sales of these products amounted to $612,000 in the third quarter. Consolidated gross profit was $8.8 million or 27.8% of net sales for the third quarter this year compared to $8.5 million or 26.6% of net sales for the same period last year. The improved gross profit was primarily attributable to Genesee Brewing Company. Genesee Brewing Company's gross profit increased from $7.0 million or 27.2% of net sales in the third quarter fiscal 1994, to $7.9 million or 29.3% of net sales in the third quarter fiscal 1995. This increase resulted from the general price increase that went into effect late in fiscal 1994, a better brand and package mix, and continued efforts to contain or reduce production costs. However, commencing January 1, 1995, the price of aluminum cans increased approximately 40% in response to the recent increases and volatility in worldwide aluminum prices. Since the price increase went into effect late in the Corporation's third quarter, it did not significantly affect third quarter profitability. However, if current prices for aluminum cans hold, this will have a significant adverse effect on Genesee Brewing Company's cost of sales in the future. Selling, general and administrative expenses for the Corporation decreased by $1.3 million or 15.1%, over the third quarter last year. The majority of this decrease was attributable the Corporation's on-going cost containment efforts and to a $1.1 million reduction in Genesee Brewing Company's marketing and media expenditures this year compared to last. In addition, Ontario Foods' restructuring program resulted in non-recurring restructuring costs of $158,000 incurred in the third quarter last year. Consolidated operating income for the third quarter was $1.7 million compared to operating income of $100,000 for the same period last year. This improvement was primarily the result of improved performance by Genesee Brewing Company. Genesee Brewing Company's third quarter operating income of $1.4 million represented a $1.5 million improvement over last year's third quarter operating loss of $108,000. As already mentioned, improved volume and product mix, a general price increase, and lower selling, general and administrative spending all contributed to Genesee Brewing Company's operating performance. Ontario Foods' third quarter operating income was $12,000 this year, compared to a $181,000 operating loss last year. The improvement was primarily due to continued growth in private label sales and to lower selling, general and administrative expenses. 8 GENESEE CORPORATION Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations (continued) Genesee Ventures, Inc. the Corporation's equipment leasing and real estate investment subsidiary, reported operating income of $487,000 for the third quarter of fiscal 1995, compared to $544,000 for the third quarter of fiscal 1994. The lower operating income was the result of the sale in August 1994 of Genesee Venture's interest in a Columbus, Ohio apartment project. Genesee Ventures' equity interest in the project had generated operating income of $175,000 in the third quarter last year. Consolidated investment income for the third quarter of fiscal 1995 was down $1.1 million to $837,000. Fiscal 1994 investment income included approximately $1.1 million of realized gains on marketable securities sold in the third quarter last year when the Corporation restructured its portfolio. During the third quarter of fiscal 1995, the Corporation recorded $123,000 of realized losses on the sale of marketable securities. In sum, the Corporation's consolidated earnings before income taxes totaled $2.4 million for the third quarter of fiscal 1995, compared to $1.9 million last year primarily as a result of improved performance by Genesee Brewing Company. Comparison of 39 weeks ended January 28, 1995 to 39 weeks ended January 29,1994 The Corporation's consolidated net revenues for the 39 weeks ended January 28, 1995 were $99.5 million, down $5.8 million from consolidated net revenues reported for the same period last year. Consolidated net earnings were $6.0 million, or $3.73 per share, this year compared to $3.2 million, or $1.98 per share, for the same period last year. Genesee Brewing Company's net sales in the first three quarters were $84.5 million, down $1.8 million from net sales of $86.3 million reported for the same period last year. The lower net sales resulted from a 6.9% decline in barrel volume which, in turn was attributable to continued competitive pressures in Genesee Brewing Company's key markets. Genesee Brewing Company's established brands have experienced the greatest decline as consumer preference continues to favor new brands and product categories at the expense of established brands. Genesee Brewing Company has responded by increasing the pace of new product and package introductions over the past few years. These new product introductions include Koch's Ice Beer, which was introduced in fiscal 1995, and Michael Shea's Black & Tan, Genny Ice Beer, and JW Dundee's Honey Brown Lager, all introduced in fiscal 1994. Sales of new products partially offset lower sales of Genesee Brewing Company's established brands. In addition to new brands and line extensions, Genesee Brewing Company introduced new 30 and 36 can package configurations in fiscal 1995 to capitalize on the continued popularity of can packages. Total sales of these new packages was approximately 50,000 barrels through the first three quarters of fiscal 1995. 9 GENESEE CORPORATION Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations (continued) Despite overall lower barrel volume this year compared to last year, Genesee Brewing Company's net sales per barrel were up 5.1%, primarily as a result of a general price increase that went into effect late in fiscal 1994. A shift in product mix to Genesee Brewing Company's higher-priced specialty products and a $660,000 federal excise tax credit also contributed to the increase in net sales per barrel. Net sales for Ontario Foods were $12.7 million in the first three quarters of fiscal 1995, compared to $15.9 million for the first three quarters of fiscal 1994. The decline in sales was the result of the restructuring program mentioned above. Although overall sales were down in the first three quarters of fiscal 1995, Ontario Foods' private label business showed continued growth. Private label sales for the first three quarters of fiscal 1995 were approximately $1.4 million higher than last year as a result of increased sales of Ontario Foods' side dish lines and the acquisition of several new product lines from a New Jersey food processor. The Corporation's consolidated gross profit margin was 28.2% of net sales for the first three quarters this year compared to 26.7% of net sales for the same period last year. The improved gross profit margin was primarily attributable to Genesee Brewing Company. Genesee Brewing Company's gross profit increased from $23.3 million or 27.0% of net sales in the first three quarters of fiscal 1994, to $24.9 million or 29.5% of net sales in the first three quarters of fiscal 1995. This increase was attributable to the general price increase that went into effect late in fiscal 1994, a better brand and package mix, and continued efforts to contain or reduce production costs. However, commencing January 1, 1995, the price of aluminum cans increased substantially in response to the recent increases and volatility in worldwide aluminum prices. Since the price increase went into effect late in the Corporation's third quarter, it did not significantly affect profitability through the first three quarters. However, if the current prices of aluminum cans hold, this will have a significant adverse effect on Genesee Brewing Company's cost of sales in the future. Selling, general and administrative expenses for the Corporation decreased by $3.6 million, or 13.6%, over the first three quarters of last year. A portion of this decrease was attributable to Ontario Foods' restructuring program which resulted in staff reductions and other administrative cost savings. In addition, Genesee Brewing Company's selling, general and administrative expenses were down approximately $1.9 million from last year's levels due to lower selling marketing and advertising expenditures and to a cost reduction program initiated in response to lower barrel volume. Consolidated operating income for the first three quarters was $5.2 million, compared to $1.7 million for the same period last year. The increase was primarily attributable to improved profit performance by Genesee Brewing Company and Ontario Foods. Genesee Brewing Company's operating income for the first three quarters of fiscal 1995 was $4.1 million, an increase of approximately $3.5 million over operating profit of $617,000 reported for 10 GENESEE CORPORATION Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations (continued) the same period last year. A general price increase, improved product mix, and lower selling, general and administrative spending all contributed to Genesee Brewing Company's strong profit performance. Operating income reported by Ontario Foods increased for the first three quarters this year to $108,000 from a loss of approximately $234,000 for the same period last year. This improvement was the result of the continued cost containment measures, improved production efficiencies and lower overhead derived from last fall's restructuring program. In addition, $158,000 of non-recurring restructuring costs contributed for last year's operating loss. Genesee Ventures Inc., reported operating income unchanged at $1.7 million for the first three quarters of fiscal 1995 compared to the first three quarters of fiscal 1994 despite the sale of Genesee Ventures' interest in a Columbus, Ohio apartment project. Consolidated investment income for the first three quarters of fiscal 1995 totaled $2.4 million, compared to $4.1 million from the same period last year. Fiscal 1994 investment income included approximately $1.5 million of net gains on marketable securities sold in November and December 1993 as part of the Corporation's plan to restructure its portfolio. For the first three quarters of fiscal 1995, the Corporation recorded $106,000 of net realized losses on the sale of marketable securities. The Corporation's consolidated statement of earnings for the first three quarters ended January 28, 1995 includes a $1.7 million gain on the sale of Genesee Ventures' 89% equity interest in the partnership that owned a Columbus, Ohio apartment project. The sale took place in August 1994. Net earnings before cumulative effect of change in accounting principle was $5.2 million in the first three quarters of fiscal 1995, compared to $3.2 million last year. LIQUIDITY AND CAPITAL RESOURCES Cash, cash equivalents, and marketable securities totaled $46.1 million on January 28, 1995, compared to $38.0 million at April 30, 1994. The higher balances were the result of proceeds received from the sale of Genesee Ventures' interest in a Columbus, Ohio apartment project as well as improved cash flow at Ontario Foods and Genesee Brewing Company during the first three quarters of fiscal 1995. 11 GENESEE CORPORATION Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations (continued) Prior to May 1, 1994, marketable securities were stated at the lower of cost or market. The adoption of SFAS 115 effective May 1, 1994 (as more fully described in Note D to the financial statements) required that debt and equity securities be valued at market. Inventories at January 28, 1995 were approximately $3.1 million higher than the balances reported at April 30, 1994. Inventories at Genesee Brewing Company increased due to the addition of new products. Ontario Foods' inventory also contributed to the increase with the continuing expansion of existing products lines and the acquisition of several new product lines from a New Jersey food processor. The Corporation holds a mortgage receivable in the amount of $5,807,000 due in full on June 1, 1995. As of January 28, 1995 this receivable was a current asset whereas at April 30, 1994 it was reported a non-current asset. Current liabilities at January 28, 1995 were up $900,000 from fiscal year end. This increase was primarily attributable to increased federal and state income tax liability as a result of higher earnings by Genesee Brewing Company. Mortgage notes payable on real estate investments totaled $3.8 million as of January 28, 1995, compared to $9.6 million at April 30, 1994. The reduction is a result of the sale of the interest in the Columbus, Ohio apartment complex mentioned above. This sale also reduced the net property, plant, and equipment amount shown on the Corporation's January 28, 1995 consolidated balance sheet. During the third quarter of fiscal 1995, Genesee Brewing Company initiated a plan to make major modifications to one of it's bottling lines. These modifications will include installation of rotary labelers which will enhance Genesee Brewing Company's ability to offer upscale packaging as part of it's efforts to capitalize on the trend towards specialty brews. The capital project is expected to be completed by the second quarter of fiscal 1996 and to cost in excess of $3 million. The Corporation expects to fund all future capital needs internally as it has in the past. With respect to real estate and equipment leasing, such investments may also include a debt component, generally obtained on a non-recourse basis. To enhance the Corporation's opportunities for future growth and to capitalize on its strong financial condition, the Corporation's long term strategy includes plans to seek investment opportunities outside its core brewing business. The Corporation will continue to search for and develop such opportunities. 12 GENESEE CORPORATION 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. 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: 3/9/95 /s/ Robert N. Latella Robert N. Latella Executive Vice President and Chief Operating Officer Date: 3/9/95 /s/ Edward J. Rompala Edward J. Rompala Vice President and Treasurer 13 EX-27 2 ART. 5 FDS FOR 3RD QUARTER 10-Q
5 1,000 9-MOS APR-29-1995 JAN-28-1995 13,514 32,590 9,886 660 13,820 78,729 120,052 91,405 150,122 20,436 0 858 0 0 88,419 150,122 131,148 131,148 71,460 31,615 22,850 0 0 8,636 3,418 5,218 0 0 760 5,978 3.73 0 -----END PRIVACY-ENHANCED MESSAGE-----