<PAGE>
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM 10-K/A
<TABLE>
<C> <S>
/X/ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
</TABLE>
FOR THE FISCAL YEAR ENDED NOVEMBER 27, 1999
OR
<TABLE>
<C> <S>
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
</TABLE>
Commission file number 0-29288
------------------------
GRIFFIN LAND & NURSERIES, INC.
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
DELAWARE 06-0868496
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation of organization)
ONE ROCKEFELLER PLAZA 10020
NEW YORK, NEW YORK (Zip Code)
(Address of principal executive
offices)
</TABLE>
(212) 218-7910
(Registrant's telephone number, including area code)
SECURITIES REGISTERED PURSUANT TO SECTION 12 (b) OF THE ACT: NONE
SECURITIES REGISTERED PURSUANT TO SECTION 12 (g) OF THE ACT:
<TABLE>
<CAPTION>
TITLE OF EACH CLASS NAME OF EACH EXCHANGE ON WHICH REGISTERED
------------------- -----------------------------------------
<S> <C>
Common Stock $0.01 par value Nasdaq National Market
</TABLE>
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/
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in part III of this Form 10-K or any amendment to this
Form 10-K. / /
State the aggregate market value of the voting stock held by
non-affiliates of the registrant. The aggregate market value shall be
computed by reference to the price at which the stock was sold, or the
average bid and asked prices of such stock, as of a specified date within 60
days prior to the date of filing: $12,363,000 approximately, based on the
closing sales price on the Nasdaq National Market on September 15, 2000.
Shares of Common Stock held by each executive officer, director, holders of
greater than 10% of the outstanding Common Stock of the Registrant and
persons or entities known to the Registrant to be affiliates of the foregoing
have been excluded in that such persons may be deemed to be affiliates. This
assumption regarding affiliate status is not necessarily a conclusive
determination for other purposes.
Indicate the number of shares outstanding of each of the registrant's
classes of common stock, as of the latest practicable date: Common Stock:
4,862,704 shares as of September 15, 2000.
--------------------------------------------------------------------------------
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<PAGE>
Explanatory Note
In its Report on Form 10-Q for the thirteen weeks ended May 27, 2000,
Griffin Land & Nurseries, Inc. ("Griffin") stated that it would restate its
consolidated financial statements for the fiscal year ended November 28,
1998, the fiscal year ended November 27, 1999 and the thirteen weeks ended
February 26, 2000. This amendment includes in Item 8 such restated
consolidated financial statements for the fiscal year ended November 27, 1999
and other information relating to such restated consolidated financial
statements, including Selected Financial Data (Item 6) and Management's
Discussion and Analysis of Financial Condition and Results of Operations
(Item 7). Information regarding the effect of the restatement on Griffin's
financial condition at November 27, 1999 and its results of operations for
the fiscal year then ended is provided in Note 13 to the consolidated
financial statements included in Item 8 of this amendment. Except for Items
6, 7 and 8, no other information included in Griffin's Annual Report on Form
10-K for the fiscal year ended November 27, 1999 is amended by this amendment.
PART II
ITEM 6. SELECTED FINANCIAL DATA
The following table sets forth selected statement of operations data for
fiscal years 1995 through 1999 and balance sheet data as of the end of each
fiscal year.
<TABLE>
<CAPTION>
1999 1998
(As Restated)(a) (As Restated)(a) 1997 1996 1995
---------------- ---------------- -------- -------- --------
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Net sales & other revenue................. $ 62,944 $ 51,231 $ 46,288 $ 46,531 $ 41,756
Operating profit (loss)................... 3,130 74 (3,236) (1,245) 810
Income (loss) from continuing
operations.............................. 2,176 (65) (2,136) (4,063) (4,265)
Net income (loss) (b)..................... 2,176 (65) (2,136) (4,606) (580)
Basic net income (loss) per share (c)..... 0.45 (0.01) (0.45)
Diluted net income (loss) per share (c)... 0.42 (0.03) (0.45)
BALANCE SHEET DATA:
Total assets.............................. 112,885 104,730 103,736 101,775 165,655
Working capital........................... 36,337 33,304 41,130 36,698 23,069
Long-term debt (d)........................ 8,860 2,666 2,830 38,846 72,737
Stockholders' equity/Culbro Investment
(e)..................................... 93,270 91,000 90,523 47,449 61,299
</TABLE>
(a) The financial data for fiscal 1999 and fiscal 1998 has been restated as
described in Item 7 and Note 13 to the consolidated financial statements
included in Item 8.
(b) The Selected Financial Data presented above reflects CMS Gilbreth
Packaging Systems, Inc., as a discontinued operation in 1995 and 1996. This
business was sold in 1996.
(c) Griffin was a consolidated subsidiary of Culbro Corporation ("Culbro")
through July 3, 1997. Accordingly, the per share results for 1997 presented
above are on a pro forma basis because the Griffin common stock was not
outstanding the entire period.
(d) Culbro's general long-term debt was included on Griffin's historical
balance sheet through February 27, 1997, when such debt was assumed by Griffin's
former affiliate, General Cigar Holdings, Inc., in connection with the
distribution of Griffin's common stock to Culbro's shareholders.
(e) Prior to July 3, 1997, Griffin was a wholly-owned subsidiary of Culbro.
Accordingly, the retained earnings and intercompany balances with its former
parent are reflected in Culbro Investment prior to July 3, 1997.
2
<PAGE>
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
RESTATEMENT
The consolidated financial statements of Griffin for the fiscal years
ended November 27, 1999 and November 28, 1998 have been restated to adjust
the amounts previously reported for equity income from Griffin's 35%
investment in Centaur Communications, Ltd. ("Centaur"), a privately owned
publisher based in the United Kingdom. Restatement was required to adjust the
timing of the recognition of subscription revenue of Centaur to comply with
generally accepted accounting principles in the United States. See Note 13 to
Griffin's consolidated financial statements in Item 8.
OVERVIEW
The consolidated financial statements of Griffin include the accounts of
Griffin's subsidiary in the landscape nursery business, Imperial, and Griffin's
Connecticut and Massachusetts based real estate business ("Griffin Land").
Griffin also has an equity investment in Centaur, a magazine publishing
business, based in the United Kingdom. On February 27, 1997, Culbro, Griffin,
then a wholly-owned subsidiary of Culbro, and General Cigar Holdings, Inc. ("GC
Holdings"), also a wholly-owned subsidiary of Culbro at that time, entered into
a Distribution Agreement (the "Distribution Agreement") which provided for a
tax-free distribution (the "Distribution") of Griffin's common stock to the
existing shareholders of Culbro. The Distribution of the Griffin common stock to
Culbro shareholders was completed on July 3, 1997. Subsequent to the
Distribution, Griffin has operated as an independent stand-alone entity. Prior
to March 18, 1997, Griffin was known as Culbro Land Resources, Inc.
The financial statements of Griffin reflect the results of the operations of
Griffin's businesses and investments. Griffin's 1997 results include an
allocation to Griffin from Culbro for corporate overhead of $1.0 million prior
to the Distribution in July of that year. This allocation, which may not
necessarily reflect the additional expenses Griffin would have incurred had it
operated as a separate stand-alone entity prior to the Distribution, is deemed
reasonable by Griffin management. Griffin's results of operations in 1997 also
include interest expense of $0.7 million on Culbro general corporate debt. The
Culbro debt was included in Griffin's financial statements through the 1997
first quarter, when that debt was assumed by GC Holdings pursuant to the
Distribution Agreement. Such interest expense has not been part of Griffin's
results of operations subsequent to the Distribution. Accordingly, there is no
allocation of expenses from Culbro to Griffin reflected in Griffin's results
subsequent to fiscal 1997.
RESULTS OF OPERATIONS
FISCAL 1999 COMPARED TO FISCAL 1998
In fiscal 1999, Griffin's net sales increased $11.7 million, or 23%, to
$62.9 million from $51.2 million in fiscal 1998. Net sales increased at both
Imperial and Griffin Land. Imperial's net sales increased $9.4 million, or 19%,
to $57.6 million in fiscal 1999 from $48.2 million in fiscal 1998. The increased
sales at Imperial reflect higher volume at its wholesale sales and service
centers, which benefitted from favorable weather conditions in their markets
throughout most of the year. Sales of containerized plants from Imperial's farm
operations increased in fiscal 1999 as compared to fiscal 1998, more than
offsetting the lower sales of field-grown product in fiscal 1999 as compared to
fiscal 1998. The decrease in net sales of field-grown product in fiscal 1999
reflects the decision to discontinue a field-grown program. Net sales and other
revenue at Griffin Land increased to $5.4 million in fiscal 1999 from
$3.1 million in fiscal 1998. The revenue increase at Griffin Land principally
reflected a land sale of $1.0 million in fiscal 1999 (there were no land sales
in fiscal 1998) and an increase in rental revenue from its commercial
properties, including the approximately 98,000 square foot warehouse built and
partially leased in fiscal 1998 that became fully leased at the beginning of
fiscal 1999. Rental revenue from Griffin Land's commercial properties increased
to $3.6 million in fiscal 1999 from $2.6 million in fiscal 1998. Occupancy at
Griffin Land's properties (excluding an approximately 100,000 square foot
warehouse facility completed in fiscal 1999 and currently not occupied) was 96%
as of the
3
<PAGE>
end of fiscal 1999 (including full occupancy in its Griffin Center South
commercial development) as compared to 91% at the end of fiscal 1998.
Griffin's consolidated operating profit (before interest) increased to
$3.1 million in fiscal 1999 from $0.1 million in fiscal 1998. Operating profit
at Imperial increased to $3.9 million in fiscal 1999 from $2.3 million in fiscal
1998. The increased operating profit at Imperial principally reflects the sales
volume increase, which generated gross profit in 1999 of $17.0 million versus
$13.9 million in fiscal 1998. Imperial's overall gross margins on sales
increased to 29.5% in fiscal 1999 from 28.8% in fiscal 1998. Imperial's
operating expenses increased to $13.1 million in fiscal 1999 from $11.6 million
in fiscal 1998. The increased operating expenses were incurred principally to
service the additional volume at its wholesale sales and service centers.
Imperial's operating expenses were 22.7% of net sales in fiscal 1999 as compared
to 24.1% of net sales in fiscal 1998.
Total operating profit at Griffin Land was $0.8 million in fiscal 1999 as
compared to a total operating loss of $0.3 million incurred in fiscal 1998. The
improved operating results principally reflect the profit on the land sale in
fiscal 1999 and higher rental revenue, partially offset by higher operating
expenses. Griffin Land's rental properties generated an operating profit, before
depreciation, of $2.9 million in fiscal 1999 as compared to $2.1 million in
fiscal 1998. The increase reflects the higher occupancy rate in fiscal 1999 and
an increase in the amount of space being leased.
Interest expense at Griffin increased to $0.6 million in fiscal 1999 from
$0.2 million in fiscal 1998. The higher interest expense reflects the increased
debt in fiscal 1999, including an $8.2 million nonrecourse mortgage entered into
by Griffin Land. Interest income was $0.1 million in fiscal 1999 as compared to
$0.3 million in fiscal 1998. The lower interest income in the current year
reflects the lower cash on hand throughout fiscal 1999 as compared to the prior
year.
Equity income from Griffin's investee, Centaur, was $0.6 million in fiscal
1999 as compared to $0.9 million in fiscal 1998. The lower results from Centaur
reflect higher interest expense in fiscal 1999 due to having outstanding loans
for the entire year as compared to a partial year in fiscal 1998, and lower
operating profit. As a result of transactions in the third quarter of fiscal
1998, Griffin's equity ownership of Centaur was 35% throughout the entire fiscal
1999 as compared to only part of fiscal 1998. In early fiscal 1999, Griffin's
ownership interest in Linguaphone Group plc ("Linguaphone") was reduced and is
now accounted for under the cost method of accounting for investments.
Accordingly, Griffin did not recognize equity results of Linguaphone throughout
most of fiscal 1999. Griffin's results in fiscal 1998 included an equity loss of
$1.1 million from Linguaphone.
FISCAL 1998 COMPARED TO FISCAL 1997
In fiscal 1998, Griffin's net sales increased $4.9 million, or 11%, to
$51.2 million from $46.3 million in fiscal 1997. The net sales increase was due
to net sales at Imperial, which were $48.2 million in fiscal 1998 as compared to
$42.6 million in fiscal 1997. The $5.6 million (13%) net sales increase at
Imperial principally reflected increased volume and higher prices at the
wholesale sales and service centers, which accounted for substantially all of
Imperial's net sales increase.
Net sales in Griffin's real estate business, Griffin Land, decreased from
$3.7 million in fiscal 1997 to $3.1 million in fiscal 1998. Net sales in fiscal
1997 included $0.7 million from sales of remaining residential lots from
developments started in earlier years. There were no land sales in fiscal 1998.
Excluding the residential lot sales, net sales at Griffin Land increased
slightly in fiscal 1998 as compared to fiscal 1997. Rental revenue from Griffin
Land's buildings increased to $2.6 million in fiscal 1998 from $2.1 million in
fiscal 1997. The higher rental revenue principally reflected increased occupancy
as the result of new leases. Occupancy in Griffin Land's properties, excluding
the new warehouse constructed in 1998, increased from 80% at the end of fiscal
1997 to 91% at the end of fiscal 1998. Including new leases that became
effective subsequent to the end of fiscal 1998, Griffin
4
<PAGE>
Land's occupancy rate in its properties was approximately 95%, including full
occupancy in its Griffin Center South development.
Griffin's consolidated operating profit (before interest) was $0.1 million
in fiscal 1998 as compared to an operating loss of $3.2 million in fiscal 1997.
The increased operating results principally reflected the effect of the
$3.3 million charge incurred in fiscal 1997 by Imperial to reserve for certain
plant inventories. Operating profit at Imperial increased to $2.3 million in
fiscal 1998 as compared to $1.9 million (excluding the effect of the inventory
charge) in fiscal 1997. Imperial's overall gross profit margins decreased
slightly to 28.8% in fiscal 1998 from 29.4% in fiscal 1997, again excluding the
effect of the inventory charge in 1997. The operating profit increase at
Imperial reflects the effect of higher net sales in fiscal 1998, partially
offset by higher operating expenses. As a percentage of net sales, operating
expenses were 24.1% in fiscal 1998 as compared to 25.0% in fiscal 1997. The
operating expense increase principally reflected higher selling expenses related
to the increased volume at Imperial's wholesale sales and service centers.
Griffin Land incurred a total operating loss of $0.3 million in fiscal 1998
versus a total operating loss of $0.2 million in fiscal 1997. Operating results
in fiscal 1998 include the settlement of a litigation initiated by Griffin Land
for reimbursement of certain costs to repair two commercial buildings owned by
Griffin Land. Proceeds from the settlement in excess of repair costs were
approximately $0.2 million and are reflected as a reduction of Griffin Land's
operating expenses. Excluding the effect of the benefit from the litigation
settlement in fiscal 1998, operating results at Griffin Land decreased by
$0.3 million, principally reflecting the effect of the residential land sales in
fiscal 1997. Griffin Land's rental properties generated an operating profit,
before depreciation, of $2.1 million in fiscal 1998 versus $1.8 million in
fiscal 1997, reflecting the higher occupancy noted above and corresponding
increase in rental revenue.
The decrease in Griffin's interest expense principally reflects the
inclusion in the 1997 first quarter of interest expense of $0.7 million related
to Culbro's general corporate debt that was assumed by GC Holdings at the end of
the 1997 first quarter. The higher income tax rate principally reflects the
effect of state and local taxes.
Griffin incurred a loss from equity investments in 1998 as compared to
equity income in 1997 as a result of losses at Linguaphone which more than
offset increased profit at Centaur. Centaur's 1998 results included one-time
expenses aggregating approximately $0.9 million before taxes (approximately
$0.3 million allocable to Griffin's interest) relating to the restructuring
of Centaur's ownership. Additionally, increased operating profit of Centaur's
magazine publishing operations was partially offset by operating losses
incurred by Centaur's subsidiary, Perfect Information, Ltd., which operates a
database service that provides financial information to its customers. During
1998, Griffin's common equity ownership of Centaur increased to approximately
35% (33% fully diluted) as a result of Griffin's purchase of Centaur common
stock and Centaur's repurchase of common stock from other Centaur
stockholders. See Note 9 of the consolidated financial statements included in
Item 8. The equity loss for Linguaphone includes foreign currency exchange
losses incurred by Linguaphone for which Griffin's allocable share was
approximately $0.5 million in fiscal 1998.
LIQUIDITY AND CAPITAL RESOURCES
Net cash provided by operating activities was $0.9 million in fiscal 1999 as
compared to $0.6 million in fiscal 1998. The increase in cash provided reflects
Griffin's higher net income and an income tax refund of $0.9 million received in
the current year, partially offset by higher inventories at Imperial and an
increase in Imperial's accounts receivable in the current year. Net cash used in
investing activities declined to $6.6 million in fiscal 1999 from $9.8 million
in fiscal 1998. The decrease reflects the effect of the $3.0 million additional
investment in Centaur in fiscal 1998. In fiscal 1999, lower spending on real
estate investments principally offset increased capital expenditures for
property
5
<PAGE>
and equipment at Imperial. The additional capital spending at Imperial in
fiscal 1999 principally reflects the acquisition of land adjacent to
Imperial's Cincinnati wholesale sales and service center to expand that
operation and the start of several capital projects to expand and improve
Imperial's containerized plant production facilities in Florida and
Connecticut.
Net cash provided by financing activities was $5.6 million in fiscal 1999 as
compared to net cash used in financing activities of $0.2 million in fiscal
1998. In fiscal 1999, Griffin entered into an $8.2 million nonrecourse mortgage
on several of its buildings in the New England Tradeport. Proceeds were used to
reduce the amount then outstanding under the Imperial Credit Agreement and to
repay an existing mortgage on certain of those properties. The new warehouse
completed in 1999 is not mortgaged. Also in fiscal 1999, Griffin entered into a
$20 million revolving credit line (the "Griffin Credit Agreement") to replace
the $10 million revolving credit facility with Imperial. The Griffin Credit
Agreement is an unsecured facility that terminates in May 2001 and will provide
financing for working capital requirements of Griffin's landscape nursery and
real estate businesses.
In the 1999 third quarter, Imperial started several capital projects to
improve and expand its containerized plant production facilities in Florida
and Connecticut. This current phase of expansion projects at Imperial is
expected to be completed over the next six to twelve months at an estimated
cost of approximately $4.0 million. Additionally, Imperial entered into an
agreement to purchase land in central New Jersey for a new wholesale sales
and service center. Completion of the land purchase is contingent upon
receiving all required regulatory approvals to operate a wholesale sales and
service center on that site. If such approval is received, expenditures for
the land acquisition and required site work are projected to be approximately
$3.9 million to be expended in fiscal 2000 and fiscal 2001. Based on the
future space requirements of certain of its tenants, Griffin Land has started
construction of new buildings in fiscal 2000 to provide additional space for
lease. A portion of the new construction is being built on speculation.
Additional construction being considered is dependent on the leasing status
of the recently constructed 100,000 square foot warehouse in the New England
Tradeport, which is being actively marketed but is not yet leased.
Management believes that in the near term, based on the current level of
operations and anticipated growth, its cash on hand, cash flow from operations
and borrowings under the Griffin Credit Agreement will be sufficient to finance
the working capital requirements and expected capital expenditures of its
landscape nursery business and fund development of its real estate assets. Over
the intermediate and long term, selective mortgage placements or additional bank
credit facilities may also be required to fund capital projects.
6
<PAGE>
FORWARD-LOOKING INFORMATION
The above information in Management's Discussion and Analysis of Financial
Condition and Results of Operations includes "forward-looking statements" within
the meaning of Section 27A of the Securities Act and Section 21E of the Exchange
Act. Although Griffin believes that its plans, intentions and expectations
reflected in such forward-looking statements are reasonable, it can give no
assurance that such plans, intentions or expectations will be achieved,
particularly with respect to the opening of an additional sales and service
center, the leasing of its warehouse constructed in 1999 and possible
construction of additional facilities in the real estate business. The
forward-looking information disclosed herein is based on assumptions and
estimates that, while considered reasonable by Griffin as of the date hereof,
are inherently subject to significant business, economic, competitive and
regulatory uncertainties and contingencies, many of which are beyond the control
of Griffin.
7
<PAGE>
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
GRIFFIN LAND & NURSERIES, INC.
CONSOLIDATED STATEMENT OF OPERATIONS
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
FOR THE FISCAL YEARS ENDED,
---------------------------------------
NOV. 27, NOV. 28,
1999 1998
(AS RESTATED) (AS RESTATED) NOV. 29,
(NOTE 13) (NOTE 13) 1997
--------- --------- ---------
<S> <C> <C> <C>
Net sales and other revenue................................. $62,944 $51,231 $46,288
Costs and expenses:
Cost of goods sold.......................................... 43,321 36,218 35,767
Selling, general and administrative expenses................ 16,493 14,939 13,757
------- ------- -------
Operating profit (loss)..................................... 3,130 74 (3,236)
Interest expense............................................ 626 185 1,002
Interest income............................................. 81 298 266
------- ------- -------
Income (loss) before income tax provision (benefit)......... 2,585 187 (3,972)
Income tax provision (benefit).............................. 962 101 (1,470)
------- ------- -------
Income (loss) before equity investments..................... 1,623 86 (2,502)
------- ------- -------
Income (loss) from equity investments:
Investment in Centaur Communications, Ltd................. 565 902 426
Investment in Linguaphone Group plc....................... (12) (1,053) (60)
------- ------- -------
Income (loss) from equity investments....................... 553 (151) 366
------- ------- -------
Net income (loss)........................................... $ 2,176 $ (65) $(2,136)
======= ======= =======
Basic net income (loss) per common share.................... $ 0.45 $ (0.01) $ (0.45)(a)
======= ======= =======
Diluted net income (loss) per common share.................. $ 0.42 $ (0.03) $ (0.45)(a)
======= ======= =======
</TABLE>
(a) 1997 per share results are pro forma. See Note 7.
See Notes to Consolidated Financial Statements.
8
<PAGE>
GRIFFIN LAND & NURSERIES, INC.
CONSOLIDATED BALANCE SHEET
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
NOV. 27, NOV. 28,
1999 1998
(AS RESTATED) (AS RESTATED
(NOTE 13) (NOTE 13)
--------- ---------
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash and cash equivalents................................... $ 2,003 $ 2,059
Accounts receivable, less allowance of $564 and $490........ 5,966 4,654
Inventories................................................. 29,196 26,746
Deferred income taxes....................................... 2,566 3,220
Other current assets........................................ 2,338 2,625
-------- --------
TOTAL CURRENT ASSETS........................................ 42,069 39,304
Real estate held for sale or lease, net..................... 33,766 31,519
Investment in Centaur Communications, Ltd................... 16,532 15,967
Property and equipment, net................................. 14,359 12,635
Other assets................................................ 6,159 5,305
-------- --------
TOTAL ASSETS................................................ $112,885 $104,730
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable and accrued liabilities.................... $ 5,412 $ 5,586
Long-term debt due within one year.......................... 320 322
Income tax payable.......................................... -- 92
-------- --------
TOTAL CURRENT LIABILITIES................................... 5,732 6,000
Long-term debt.............................................. 8,860 2,666
Deferred income taxes....................................... 1,401 1,097
Other noncurrent liabilities................................ 3,622 3,967
-------- --------
TOTAL LIABILITIES........................................... 19,615 13,730
-------- --------
COMMITMENTS AND CONTINGENCIES (SEE NOTE 12)................. -- --
Common stock, par value $0.01 per share, 10,000,000 shares
authorized, 4,862,704 shares issued and outstanding....... 49 48
Additional paid in capital.................................. 93,584 93,491
Accumulated deficit......................................... (363) (2,539)
-------- --------
TOTAL STOCKHOLDERS' EQUITY.................................. 93,270 91,000
-------- --------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY.................. $112,885 $104,730
======== ========
</TABLE>
See Notes to Consolidated Financial Statements.
9
<PAGE>
GRIFFIN LAND & NURSERIES, INC.
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION> ACCUMULATED
SHARES OF ADDITIONAL DEFICIT TOTAL
COMMON COMMON PAID-IN (AS RESTATED) (AS RESTATED)
STOCK STOCK CAPITAL (NOTE 13) (NOTE 13)
--------- -------- ---------- --------- --------
<S> <C> <C> <C> <C> <C>
Reclassification of Culbro Investment account
on July 3, 1997.................................. 4,559,109 $ 46 $91,722 $ -- $91,768
Exercise of stock options, including $821 income
tax benefit...................................... 184,481 1 1,228 -- 1,229
Net loss subsequent to Distribution................ -- -- (2,474) (2,474)
--------- ---- ------- ------- -------
Balance at November 27, 1997....................... 4,743,590 47 92,950 (2,474) 90,523
Exercise of stock options, including $451 income
tax benefit...................................... 99,114 1 541 -- 542
Net loss........................................... -- -- (65) (65)
--------- ---- ------- ------- -------
Balance at November 28, 1998....................... 4,842,704 48 93,491 (2,539) 91,000
Exercise of stock options, including $85 income tax
benefit.......................................... 20,000 1 93 -- 94
Net income......................................... -- -- 2,176 2,176
--------- ---- ------- ------- -------
Balance at November 27, 1999....................... 4,862,704 $ 49 $93,584 $ (363) $93,270
========= ==== ======= ======= =======
</TABLE>
See Notes to Consolidated Financial Statements.
10
<PAGE>
GRIFFIN LAND & NURSERIES, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
FOR THE FISCAL YEARS ENDED,
-------------------------------------
NOV. 27, NOV. 28,
1999 1998
(AS RESTATED) (AS RESTATED) NOV. 29,
(NOTE 13) (NOTE 13) 1997
--------- --------- --------
<S> <C> <C> <C>
OPERATING ACTIVITIES:
Net income (loss)........................................... $ 2,176 $ (65) $(2,136)
Adjustments to reconcile net income (loss) to net cash
provided by (used in) operating activities:
Depreciation and amortization............................. 2,204 2,004 1,921
(Income) loss from equity investments..................... (553) 151 (366)
Deferred income taxes..................................... 895 186 (1,085)
Changes in assets and liabilities which increased
(decreased) cash:
Accounts receivable....................................... (1,386) (147) (829)
Inventories............................................... (2,450) (1,403) 2,187
Income tax refund received................................ 926 -- --
Increase in inventory deposits............................ (225) (188) (108)
Accounts payable and accrued liabilities.................. (174) 606 (579)
Other, net................................................ (483) (557) 33
------- ------- -------
Net cash provided by (used in) operating activities......... 930 587 (962)
------- ------- -------
INVESTING ACTIVITIES:
Additions to real estate held for sale or lease............. (3,416) (6,182) (953)
Additions to property and equipment......................... (2,822) (1,164) (936)
Additional investment in Centaur Communications, Ltd........ -- (2,968) --
Other, net.................................................. (377) 500 --
------- ------- -------
Net cash used in investing activities....................... (6,615) (9,814) (1,889)
------- ------- -------
FINANCING ACTIVITIES:
Increase in debt............................................ 8,173 -- 7,422
Payments of debt............................................ (2,220) (324) (271)
Other, net.................................................. (324) 91 (152)
------- ------- -------
Net cash provided by (used in) financing activities......... 5,629 (233) 6,999
------- ------- -------
Net (decrease) increase in cash and cash equivalents........ (56) (9,460) 4,148
Cash and cash equivalents at beginning of year.............. 2,059 11,519 7,371
------- ------- -------
Cash and cash equivalents at end of year.................... $ 2,003 $ 2,059 $11,519
======= ======= =======
</TABLE>
See Notes to Consolidated Financial Statements.
11
<PAGE>
GRIFFIN LAND & NURSERIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATION
The accompanying consolidated financial statements of Griffin Land &
Nurseries, Inc. ("Griffin") include the accounts of Griffin's real estate
division ("Griffin Land") and Griffin's wholly-owned subsidiary, Imperial
Nurseries, Inc. ("Imperial"). On February 27, 1997, Culbro Corporation
("Culbro"), Griffin, then a wholly-owned subsidiary of Culbro, and General Cigar
Holdings, Inc. ("GC Holdings"), also a wholly-owned subsidiary of Culbro at that
time, entered into a Distribution Agreement (the "Distribution Agreement") which
provided for a tax-free distribution (the "Distribution") of Griffin's common
stock to the existing shareholders of Culbro. The Distribution of the Griffin
common stock to Culbro shareholders was completed on July 3, 1997. Griffin has
operated as an independent stand-alone entity subsequent to the Distribution.
All intercompany transactions have been eliminated. Prior to March 18, 1997,
Griffin was known as Culbro Land Resources, Inc.
Griffin accounts for its investments in Centaur Communications, Ltd.
("Centaur") and real estate joint ventures under the equity method. Results of
real estate joint ventures are included in operating profit. As a result of the
recapitalization in fiscal 1999 of Linguaphone Group plc ("Linguaphone"),
Griffin's common equity ownership was reduced and Griffin now accounts for its
investment in Linguaphone under the cost method of accounting for investments.
The consolidated financial statements of Griffin for fiscal 1999 and
fiscal 1998 have been restated to adjust the amounts previously reported for
income from equity investment (see Note 13).
BUSINESS SEGMENTS
Griffin is engaged in the landscape nursery and real estate businesses.
Imperial, Griffin's subsidiary in the landscape nursery segment, is engaged in
growing plants which are sold principally to garden centers, wholesalers and
merchandisers, and operating sales and service centers which sell principally to
landscapers. Griffin's real estate segment, Griffin Land, builds and manages
commercial and industrial properties and develops residential subdivisions on
its land in Connecticut and Massachusetts.
FISCAL YEAR
Griffin's fiscal year ends on the Saturday nearest November 30. Fiscal years
1999, 1998, and 1997 each contained 52 weeks and ended November 27, 1999,
November 28, 1998 and November 29, 1997, respectively.
INVENTORIES
Griffin's inventories are stated at the lower of cost (using the average
cost method) or market. Nursery stock includes certain inventories which will
not be sold or used within one year. It is industry practice to include such
inventories in current assets.
PROPERTY AND EQUIPMENT
Property and equipment are carried at cost. Depreciation is determined on a
straight-line basis over the estimated useful asset lives for financial
reporting purposes and principally on accelerated methods for tax purposes.
12
<PAGE>
GRIFFIN LAND & NURSERIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
REAL ESTATE HELD FOR SALE OR LEASE
Real estate held for sale or lease is carried at depreciated cost, net of
impairment write-downs, if any. Interest is capitalized during the construction
period of major facilities. The capitalized interest is recorded as part of the
asset to which it relates and is amortized over the asset's useful life.
Depreciation is determined on a straight-line basis over the estimated useful
asset lives for financial reporting purposes and principally on accelerated
methods for tax purposes.
REVENUE AND GAIN RECOGNITION
In the landscape nursery business, sales and the related cost of sales are
recognized upon shipment of products. Sales returns are not material. In the
real estate business, gains on real estate sales are recognized in accordance
with SFAS No. 66, "Accounting for Sales of Real Estate", based upon the specific
terms of the sale.
FAIR VALUE OF FINANCIAL INSTRUMENTS
The amounts included in the financial statements for accounts receivable,
accounts payable and accrued liabilities reflect their fair values because of
the short-term maturity of these instruments. The fair values of Griffin's other
financial instruments are discussed in Note 5.
STOCK OPTIONS
Griffin accounts for stock-based compensation under Accounting Principles
Board Opinion No. 25, "Accounting for Stock Issued to Employees". The pro forma
effect on earnings and earnings per share using the fair value method of
accounting for stock-based compensation is disclosed in Note 7.
EARNINGS PER SHARE
In the 1998 first quarter, Griffin adopted SFAS No. 128, "Earnings Per
Share". The new standard requires direct presentation of net income per common
share and net income per common share assuming dilution on the face of the
statement of operations.
Prior to July 3, 1997, Griffin was a wholly-owned subsidiary of Culbro.
Accordingly, per share results for 1997 are presented on a pro forma basis.
RECLASSIFICATIONS
Certain prior year balances have been reclassified to conform with the
current year presentation.
USE OF ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amount of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and revenue and expenses during the period reported. Actual results
could differ from those estimates.
13
<PAGE>
GRIFFIN LAND & NURSERIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
2. INDUSTRY SEGMENT INFORMATION
Griffin's reportable segments are defined by their products and services,
and are comprised of the landscape nursery and real estate segments (see
Note 1). Griffin has no operations outside the United States. Griffin's export
sales and transactions between segments are not material.
<TABLE>
<CAPTION>
FOR THE FISCAL YEARS ENDED,
------------------------------
NOV. 27, NOV. 28, NOV. 29,
1999 1998 1997
NET SALES AND OTHER REVENUE -------- -------- --------
<S> <C> <C> <C>
Landscape nursery........................................... $ 57,570 $ 48,180 $ 42,618
Real estate................................................. 5,374 3,051 3,670
-------- -------- --------
$ 62,944 $ 51,231 $ 46,288
======== ======== ========
OPERATING PROFIT (LOSS)
Landscape nursery(a)........................................ $ 3,938 $ 2,277 $ (1,433)
Real estate................................................. 798 (320) (202)
-------- -------- --------
Industry segment totals..................................... 4,736 1,957 (1,635)
General corporate expense................................... 1,606 1,883 1,601
Interest expense (income), net.............................. 545 (113) 736
-------- -------- --------
Income (loss) before income tax provision (benefit)......... $ 2,585 $ 187 $ (3,972)
======== ======== ========
<CAPTION>
NOV. 27, NOV. 28, NOV. 29,
1999 1998 1997
IDENTIFIABLE ASSETS -------- -------- --------
<S> <C> <C> <C>
Landscape nursery........................................... $ 52,564 $ 46,881 $ 46,558
Real estate................................................. 38,248 35,480 31,320
-------- -------- --------
Industry segment totals..................................... 90,812 82,361 77,878
General corporate........................................... 22,073 22,369 25,858
-------- -------- --------
$112,885 $104,730 $103,736
======== ======== ========
</TABLE>
(A) RESULTS IN THE LANDSCAPE NURSERY SEGMENT IN 1997 INCLUDE A CHARGE OF
$3.3 MILLION RELATING TO CERTAIN PLANT INVENTORIES. APPROXIMATELY 75% OF THE
CHARGE RELATES TO FIELD-GROWN PLANT INVENTORIES IN WHICH IT WAS ESTIMATED AT
THAT TIME THAT THE CARRYING COST WOULD NOT BE RECOVERED AS A RESULT OF
HORTICULTURAL PROBLEMS AND MARKET CONDITIONS. AS OF NOVEMBER 27, 1999,
IMPERIAL HAS SUBSTANTIALLY COMPLETED THE PHASEOUT OF ITS FIELD-GROWN
PROGRAM. THE REMAINING PORTION OF THE CHARGE RELATES PRINCIPALLY TO CERTAIN
CONTAINER GROWN PLANT INVENTORIES WHICH DID NOT MATURE PROPERLY.
<TABLE>
<CAPTION>
DEPRECIATION AND
CAPITAL EXPENDITURES AMORTIZATION
------------------------------ ------------------------------
FOR THE FISCAL YEARS ENDED, FOR THE FISCAL YEARS ENDED,
------------------------------ ------------------------------
NOV. 27, NOV. 28, NOV. 29, NOV. 27, NOV. 28, NOV. 29,
1999 1998 1997 1999 1998 1997
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Landscape nursery........................... $2,795 $1,144 $ 861 $1,268 $1,212 $1,145
Real estate................................. 3,443 6,188 957 920 775 772
------ ------ ------ ------ ------ ------
Industry segment totals..................... 6,238 7,332 1,818 2,188 1,987 1,917
General corporate........................... -- 14 71 16 17 4
------ ------ ------ ------ ------ ------
$6,238 $7,346 $1,889 $2,204 $2,004 $1,921
====== ====== ====== ====== ====== ======
</TABLE>
See Note 9 for information on Griffin's equity investment in Centaur.
14
<PAGE>
GRIFFIN LAND & NURSERIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
3. RELATED PARTY TRANSACTIONS
Prior to the Distribution in 1997 (see Note 1), Griffin, as lessor, and
General Cigar Co., Inc. ("General Cigar"), as lessee, entered into a lease for
certain agricultural land in Connecticut and Massachusetts (the "Agricultural
Lease"). At the time the Agricultural Lease was consummated, both Griffin and
General Cigar were wholly-owned subsidiaries of Culbro. The Agricultural Lease
is for approximately 500 acres of arable land held by Griffin for possible
development in the long term, but which is being used by General Cigar for
growing Connecticut Shade wrapper tobacco. General Cigar's use of the land is
limited to the cultivation of cigar wrapper tobacco. The Agricultural Lease has
an initial term of ten years and provides for the extension of the lease for
additional periods thereafter. In addition, at Griffin's option, the
Agricultural Lease may be terminated with respect to 100 acres of such land
annually upon one year's prior notice. The annual rent payable by General Cigar
under the Agricultural Lease is approximately equal to the annual aggregate
amount of all taxes and other assessments payable by Griffin attributable to the
land leased. In fiscal 1999 and fiscal 1998, General Cigar made rental payments
of $108 and $80, respectively, to Griffin with respect to the Agricultural
Lease.
Also prior to the Distribution in 1997, Griffin entered into a Services
Agreement (the "Services Agreement") with Culbro. Pursuant to the Services
Agreement, Culbro, and its successor GC Holdings, provided Griffin, for a period
of one year after the Distribution, with certain administrative services,
including internal audit, tax preparation, legal and transportation services.
The Services Agreement was terminated with respect to all services provided by
GC Holdings as of July 1998, except for certain transportation services, with
respect to which the Services Agreement was amended and extended through
June 1999. In fiscal 1999 and fiscal 1998, Griffin incurred expenses of $150 and
$400, respectively, under the Services Agreement. As of November 27, 1999 and
November 28, 1998 amounts due GC Holdings from Griffin with respect to the
Services Agreement were $171 and $59, respectively.
In late 1997, subsequent to the Distribution, Griffin, as lessor, and
General Cigar, as lessee, entered into a lease for approximately 40,000 square
feet of office space in the Griffin Center South office complex in Bloomfield,
Connecticut (the "Commercial Lease"). The Commercial Lease has an initial term
of ten years and provides for the extension of the lease for additional annual
periods thereafter. Griffin's rental revenue from the Commercial Lease in fiscal
1999 and fiscal 1998 was $464 and $437, respectively. Management believes the
rent payable by General Cigar to Griffin under the Commercial Lease is at market
rates.
4. INCOME TAXES
Griffin's income tax provisions and deferred tax assets and liabilities in
the accompanying financial statements have been calculated in accordance with
SFAS No. 109 "Accounting for Income Taxes". For all periods prior to the
Distribution (see Note 1), Griffin's results of operations were included in
Culbro's consolidated U.S. federal income tax returns, and all tax liabilities
were paid by Culbro.
15
<PAGE>
GRIFFIN LAND & NURSERIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
4. INCOME TAXES (CONTINUED)
Subsequent to the Distribution, Griffin has filed separate tax returns from its
former parent company. The income tax provision (benefit) for fiscal 1999,
fiscal 1998 and fiscal 1997 is summarized as follows:
<TABLE>
<CAPTION>
FOR THE FISCAL YEARS ENDED,
------------------------------
NOV. 27, NOV. 28, NOV. 29,
1999 1998 1997
-------- -------- --------
<S> <C> <C> <C>
Current federal.................................... $ 76 $(246) $ (680)
Current state and local............................ 76 170 (208)
Deferred, principally federal...................... 810 177 (582)
---- ----- -------
Total income tax provision (benefit)............... $962 $ 101 $(1,470)
==== ===== =======
</TABLE>
The reasons for the difference between the United States statutory income
tax rate and the effective rates are shown in the following table:
<TABLE>
<CAPTION>
FOR THE FISCAL YEARS ENDED,
------------------------------
NOV. 27, NOV. 28, NOV. 29,
1999 1998 1997
-------- -------- --------
<S> <C> <C> <C>
Tax provision (benefit) at statutory rates......... $879 $ 64 $(1,350)
State and local taxes.............................. 141 111 (137)
Other.............................................. (58) (74) 17
---- ---- -------
Total income tax provision (benefit)............... $962 $101 $(1,470)
==== ==== =======
</TABLE>
The significant components of Griffin's deferred tax asset-current and net
deferred tax liability-long term are as follows:
<TABLE>
<CAPTION>
NOV. 27, NOV. 28,
1999 1998
-------- --------
<S> <C> <C>
Inventory................................... $1,905 $2,532
Other....................................... 661 688
------ ------
Deferred tax asset.......................... $2,566 $3,220
====== ======
</TABLE>
<TABLE>
<CAPTION>
NOV. 27, NOV. 28,
1999 1998
-------- --------
<S> <C> <C>
Depreciation.............................. $ 2,332 $ 2,256
NOL carryover............................. (1,286) (1,568)
Other..................................... 355 409
------- -------
Net deferred tax liability................ $ 1,401 $ 1,097
======= =======
</TABLE>
As of November 27, 1999, Griffin has available for income tax purposes
approximately $2.9 million in federal net operating loss carryforwards which may
be used to offset future taxable income. These loss carryforwards begin to
expire in fiscal year 2012.
16
<PAGE>
GRIFFIN LAND & NURSERIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
4. INCOME TAXES (CONTINUED)
In connection with the Distribution, Culbro and Griffin entered into a Tax
Sharing Agreement which provided, among other things, for the allocation between
Culbro and Griffin of federal, state, local and foreign tax liabilities for all
periods through the Distribution. With respect to the consolidated tax returns
filed by Culbro, the Tax Sharing Agreement provides that Griffin will be liable
for any amounts that it would have been required to pay with respect to
deficiencies assessed, if any, generally as if it had filed separate tax
returns.
5. LONG-TERM DEBT
Long-term debt includes:
<TABLE>
<CAPTION>
NOV. 27, NOV. 28,
1999 1998
-------- --------
<S> <C> <C>
Mortgages................................... $8,704 $2,495
Capital leases.............................. 476 493
Credit Agreement............................ -- --
------ ------
Total....................................... 9,180 2,988
Less: due within one year................... 320 322
------ ------
Total long-term debt........................ $8,860 $2,666
====== ======
</TABLE>
The annual principal payment requirements under the terms of the mortgages
for the years 2000 through 2004 are $112, $123, $136, $149 and $162,
respectively.
On June 24, 1999, Griffin entered into a nonrecourse mortgage of
$8.2 million on several of its buildings in the New England Tradeport. The
mortgage has an interest rate of 8.54% and a ten year term, with payments based
on a thirty year amortization schedule. Proceeds were used to reduce amounts
then outstanding under the Imperial Nurseries, Inc., Credit Agreement (the
"Imperial Credit Agreement") and to repay an existing mortgage on certain of
those buildings. The existing mortgage had a balance of $1.9 million at the time
of repayment and an interest rate of 8.63%. The book value of buildings under
mortgage was $7.5 million at November 27, 1999.
On August 3, 1999, Griffin completed a new $20 million revolving Credit
Agreement (the "Griffin Credit Agreement") to replace the $10 million Imperial
Credit Agreement. The Griffin Credit Agreement is an unsecured facility with the
same lender as the Imperial Credit Agreement and terminates in May 2001.
Borrowings under the Griffin Credit Agreement may be, at Griffin's option, on an
overnight basis or for periods of one, two, three or six months. Overnight
borrowings bear interest at the lender's prime rate plus 1/4% per annum.
Borrowings of one month and longer bear interest at the London Interbank
Offered Rate ("LIBOR") plus 1 3/4% per annum. There are no compensating balance
agreements, and Griffin will pay a commitment fee of 1/4 of 1% per annum on
unused borrowing capacity. Borrowings under the Griffin Credit Agreement will be
used principally to finance working capital requirements at Griffin's landscape
nursery and real estate businesses. The Griffin Credit Agreement includes
financial covenants with respect to Griffin's debt service coverage (as
defined), net worth, operating profit and capital expenditures. There were no
borrowings under the Griffin Credit Agreement in 1999.
17
<PAGE>
GRIFFIN LAND & NURSERIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
5. LONG-TERM DEBT (CONTINUED)
Management believes that the amounts reflected on the balance sheet for its
mortgages reflect their current fair values based on market interest rates for
comparable risks, maturities and collateral.
Future minimum lease payments under capital leases for transportation
equipment and the present value of such payments as of November 27, 1999 were:
<TABLE>
<S> <C>
2000........................................................ $232
2001........................................................ 157
2002........................................................ 100
2003........................................................ 35
2004........................................................ 5
----
Total minimum lease payments................................ 529
Less: amounts representing interest......................... 53
----
Present value of minimum lease payments (a)................. $476
====
</TABLE>
(A) INCLUDES CURRENT PORTION OF $208 AT NOVEMBER 27, 1999.
At November 27, 1999 and November 28, 1998, machinery and equipment included
capital leases amounting to $476 and $493, respectively, which is net of
accumulated amortization of $1,797 and $1,634, respectively, at November 27,
1999 and November 28, 1998. Amortization expense relating to capital leases in
fiscal 1999, fiscal 1998 and fiscal 1997 was $250, $228, and $202, respectively.
6. RETIREMENT BENEFITS
SAVINGS PLAN
Griffin maintains the Griffin Land & Nurseries, Inc. 401(k) Savings Plan
(the "Griffin Savings Plan") for its employees, a defined contribution plan
whereby Griffin matches 60% of each employee's contribution, up to a maximum of
5% of base salary. Griffin's contributions to the Griffin Savings Plan and,
prior to the Distribution, to the Culbro Corporation 401(k) Savings Plan (the
"Culbro Savings Plan") in fiscal 1999, fiscal 1998 and fiscal 1997 were $236,
$230 and $116, respectively. The matching percentage by Griffin of each
employee's contribution is greater under the Griffin Savings Plan as compared to
the Culbro Savings Plan.
DEFERRED COMPENSATION PLAN
In fiscal 1999, Griffin adopted a non-qualified deferred compensation plan
(the "Deferred Compensation Plan") for selected employees who, due to Internal
Revenue Service guidelines, cannot take full advantage of the Griffin Savings
Plan. Contributions to the Deferred Compensation Plan started in fiscal 2000.
Accordingly, there was no liability under the Deferred Compensation Plan at
November 27, 1999. It is anticipated that the Deferred Compensation Plan will be
unfunded, with benefits to be paid from Griffin's general assets.
18
<PAGE>
GRIFFIN LAND & NURSERIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
6. RETIREMENT BENEFITS (CONTINUED)
POSTRETIREMENT BENEFITS
Griffin maintains a postretirement benefits program which provides
principally health and life insurance benefits to certain of its retired
employees. In accordance with the Distribution Agreement (see Note 1), the
liabilities for Griffin employees who had retired prior to the Distribution and
the liabilities for employees related to businesses no longer a part of Griffin
were assumed in fiscal 1997 by GC Holdings. The liability for postretirement
benefits for certain of Griffin's active employees at the time of the
Distribution remains with Griffin and is included in other noncurrent
liabilities on the consolidated balance sheet.
The components for Griffin's postretirement benefits expense is as follows:
<TABLE>
<CAPTION>
FOR THE FISCAL YEARS ENDED,
------------------------------
NOV. 27, NOV. 28, NOV. 29,
1999 1998 1997
-------- -------- --------
<S> <C> <C> <C>
Service cost-benefits earned during the year........ $23 $18 $26
Interest on accumulated postretirement benefit
obligation........................................ 28 22 16
--- --- ---
Total expense....................................... $51 $40 $42
=== === ===
</TABLE>
Griffin's liability for postretirement benefits, as determined by the Plan's
actuaries, is shown below. None of these liabilities were funded at
November 27, 1999 and November 28, 1998.
<TABLE>
<CAPTION>
NOV. 27, NOV. 28,
1999 1998
-------- --------
<S> <C> <C>
Retirees.................................... $ -- $ --
Fully eligible active participants.......... 105 98
Other active participants................... 288 272
Unrecognized net gain from experience
differences and assumption changes........ (28) (56)
---- ----
Liability for postretirement benefits....... $365 $314
==== ====
</TABLE>
Discount rates of 8.00% and 7.15% were used to compute the accumulated
postretirement benefit obligations at November 27, 1999 and November 28, 1998,
respectively. Because Griffin's obligation for retiree medical benefits is
fixed, any increase in the medical cost trend would have no effect on the
accumulated postretirement benefit obligation, service cost or interest cost.
19
<PAGE>
GRIFFIN LAND & NURSERIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
7. STOCKHOLDERS' EQUITY
PER SHARE RESULTS
Basic and diluted per share results were based on the information below. Per
share results for 1997 are pro forma because Griffin was a wholly-owned
subsidiary of Culbro during a portion of that year.
<TABLE>
<CAPTION>
FOR THE FISCAL YEARS ENDED,
------------------------------------
NOV. 27, NOV. 28,
1999 1998
(AS RESTATED) (AS RESTATED) NOV. 29,
(NOTE 13) (NOTE 13) 1997
------------- ------------- --------
<S> <C> <C> <C>
Net income (loss) as reported for computation of basic per
share results............................................. $2,176 $(65) $(2,136)
Adjustment to net income (loss) for assumed exercise of
options of equity investee (Centaur)...................... (104) (91) (12)
------ ---- -------
Adjusted net income (loss) for computation of diluted per
share results............................................. $2,072 $(156) $(2,148)
====== ===== =======
</TABLE>
<TABLE>
<CAPTION>
FOR THE FISCAL YEARS ENDED,
-----------------------------------
NOV. 27, NOV. 28, NOV. 29,
1999 1998 1997
--------- --------- -----------
(PRO FORMA)
<S> <C> <C> <C>
Weighted average shares outstanding for computation of basic
per share results......................................... 4,847,000 4,776,000 4,730,000
Incremental shares from assumed exercise of Griffin stock
options................................................... 77,000 -- --
--------- --------- ---------
Adjusted weighted average shares for computation of diluted
per share results......................................... 4,924,000 4,776,000 4,730,000
========= ========= =========
</TABLE>
GRIFFIN STOCK OPTION PLAN
The Griffin Land & Nurseries, Inc., 1997 Stock Option Plan (the "Griffin
Stock Option Plan"), adopted in 1997 and subsequently amended in 1999, makes
available a total of 1,000,000 options to purchase shares of Griffin common
stock. Options granted under the Griffin Stock Option Plan may be either
incentive stock options or non-qualified stock options. Incentive stock options
issued under the Griffin Stock Option Plan will satisfy certain Internal Revenue
Code requirements applicable thereto. At the time of the Distribution (see
Note 1), there were 438,202 Culbro stock options outstanding under various
Culbro stock option plans and an employment agreement with an officer of Culbro.
Upon completion of the Distribution in 1997, Culbro converted all employee stock
options then outstanding under Culbro's stock option plans into options to
purchase shares of common stock of Griffin, par value $0.01 per share, and
options to purchase shares of common stock of Culbro. The number of outstanding
options and exercise prices were adjusted to preserve the value of the Culbro
options. A portion of the options outstanding under the Culbro plans were able
to be exercised as incentive stock options, which under current tax laws will
not provide any tax deductions to Griffin. All Culbro options held by Culbro
employees who did not become employees of Griffin were vested as of the
Distribution date. None of the options outstanding at November 27, 1999 may be
exercised as stock appreciation rights.
20
<PAGE>
GRIFFIN LAND & NURSERIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
7. STOCKHOLDERS' EQUITY (CONTINUED)
The Griffin Stock Option Plan is administered by the Compensation Committee
of the Board of Directors of Griffin. A summary of the activity under the
Griffin Stock Option Plan is as follows:
<TABLE>
<CAPTION>
NUMBER OF WEIGHTED AVG.
OPTIONS EXERCISE PRICE
--------- --------------
<S> <C> <C>
Culbro options converted to Griffin options at time
of Distribution.................................... 438,202 $ 3.01
Granted in 1997...................................... 231,000 14.68
Exercised in 1997.................................... (184,481) 2.21
-------- ------
Outstanding at November 29, 1997..................... 484,721 8.86
Granted in 1998...................................... 4,000 17.00
Exercised in 1998.................................... (99,114) 0.92
Cancelled in 1998.................................... (20,000) 14.68
-------- ------
Outstanding at November 28, 1998..................... 369,607 10.66
Granted in 1999...................................... 252,100 13.25
Exercised in 1999.................................... (20,000) 0.92
-------- ------
Outstanding at November 27, 1999..................... 601,707 $12.16
======== ======
Number of option holders at November 27, 1999........ 39
========
</TABLE>
<TABLE>
<CAPTION>
WEIGHTED AVG.
REMAINING
OUTSTANDING AT WEIGHTED AVG. CONTRACTUAL LIFE
RANGE OF EXERCISE PRICES NOV. 27, 1999 EXERCISE PRICE (IN YEARS)
------------------------ -------------- -------------- ----------------
<S> <C> <C> <C>
Under $3.00......................... 34,435 $ 1.75 4.4
$3.00-$9.00 100,172 7.52 6.3
Over $13.00......................... 467,100 13.92 8.4
-------
601,707
=======
</TABLE>
Options granted by Griffin in 1997, 1998 and 1999 vest in equal installments
on the third, fourth and fifth anniversaries from the date of grant. At
November 27, 1999, 140,607 options outstanding under the Griffin Stock Option
Plan were vested with a weighted average price of $6.39 per share.
STOCK-BASED COMPENSATION
Griffin accounts for stock options under Accounting Principles Board Opinion
No. 25, "Accounting for Stock Issued to Employees," and has adopted the
disclosure provisions of SFAS No. 123 which require disclosing the pro forma
effect on earnings and earnings per share of the fair value method of
21
<PAGE>
GRIFFIN LAND & NURSERIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
7. STOCKHOLDERS' EQUITY (CONTINUED)
accounting for stock-based compensation. Griffin's results would have been the
following pro forma amounts under the method prescribed by SFAS No. 123.
<TABLE>
<CAPTION>
FOR THE FISCAL YEARS ENDED,
---------------------------------------
NOV. 27, NOV. 28,
1999 1998
(AS RESTATED) (AS RESTATED) NOV. 29,
(NOTE 13) (NOTE 13) 1997
------------- ------------- --------
<S> <C> <C> <C>
Net income (loss), as reported.............................. $2,176 $ (65) $(2,136)
Net income (loss), pro forma................................ $1,831 $ (245) $(2,228)
Basic net income (loss) per common share, as reported....... $ 0.45 $(0.01) $ (0.45)
Basic net income (loss) per common share, pro forma......... $ 0.38 $(0.05) $ (0.47)
Diluted net income (loss) per common share, as reported..... $ 0.42 $(0.03) $ (0.45)
Diluted net income (loss) per common share, pro forma....... $ 0.35 $(0.07) $ (0.47)
</TABLE>
The weighted average fair value of each option granted during fiscal 1999,
fiscal 1998 and fiscal 1997 was $5.17, $5.57 and $6.10, respectively, estimated
as of the date of grant using the Black-Scholes option-pricing model. The
following weighted average assumptions were used in the model to calculate the
fair value of each option: expected volatility of approximately 35% in all
years; risk free interest rates in fiscal 1999, fiscal 1998 and fiscal 1997 of
4.91%, 5.45% and 6.15%, respectively; expected option term of 5 years; and no
dividend yield for all options issued.
8. OPERATING LEASES
Future minimum rental payments for the next five years under noncancelable
leases as of November 27, 1999 were:
<TABLE>
<S> <C>
2000........................................................ $ 422
2001........................................................ 304
2002........................................................ 229
2003........................................................ 145
2004........................................................ 77
------
Total minimum lease payments................................ $1,177
======
</TABLE>
Total rental expense for all operating leases in fiscal 1999, fiscal 1998
and fiscal 1997 was $518, $484 and $366, respectively.
22
<PAGE>
GRIFFIN LAND & NURSERIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
8. OPERATING LEASES (CONTINUED)
As lessor, Griffin Land's real estate activities include the leasing of
office and industrial space in Connecticut. Future minimum rentals to be
received under noncancelable leases as of November 27, 1999 were:
<TABLE>
<S> <C>
2000........................................................ $ 3,414
2001........................................................ 3,348
2002........................................................ 2,850
2003........................................................ 2,505
2004........................................................ 1,843
Later years................................................. 2,401
-------
Total minimum rental revenue................................ $16,361
=======
</TABLE>
Total rental revenue from all leases in fiscal 1999, fiscal 1998 and fiscal
1997 was $3,247, $2,287 and $1,851, respectively.
9. EQUITY INVESTMENTS
INVESTMENT IN CENTAUR
On August 4, 1998, Griffin purchased 500,000 shares of Centaur common stock
from another stockholder of Centaur for approximately $2.9 million. Griffin's
purchase was in connection with transactions whereby the stockholder who sold
the Centaur common stock to Griffin also sold its remaining Centaur common stock
to a third party, and Centaur purchased approximately 4.8 million shares of its
common stock from certain of its other stockholders at the same per share price
paid by Griffin. As a result of these transactions, Griffin now holds
approximately 5.4 million shares of the 15.2 million shares of Centaur common
stock outstanding after these transactions.
Substantially all of the book value of Griffin's investment in Centaur
represents the excess of the cost of Griffin's investment over the book value of
its equity in Centaur (representing the value of publishing rights and goodwill)
and is being amortized on a straight-line basis over 30 to 40 years, which
commenced in 1985.
Centaur reports on a June 30 fiscal year. The unaudited summarized
financial data presented below was derived from Centaur's audited
consolidated financial statements, adjusted to report on a fiscal year
consistent with Griffin. Centaur's consolidated financial statements are
prepared in accordance with generally accepted accounting principles in the
United Kingdom. Griffin's equity income from Centaur, including the
restatement referred to in Note 13, reflects adjustments necessary to
present Centaur's results in accordance with generally
23
<PAGE>
GRIFFIN LAND & NURSERIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
9. EQUITY INVESTMENTS (CONTINUED)
accepted accounting principles in the United States. Such adjustments include an
expense in fiscal 1997 for stock option compensation of which Griffin's
allocable share was $0.6 million.
<TABLE>
<CAPTION>
TWELVE MONTHS ENDED,
---------------------------------------
NOV. 27, NOV. 28,
1999 1998
(AS RESTATED) (AS RESTATED) NOV. 29,
(NOTE 13) (NOTE 13) 1997
------------- ------------- --------
<S> <C> <C> <C>
Net sales................................................... $95,911 $72,315 $85,713
Costs and expenses.......................................... 87,925 63,068 79,981
------- ------- -------
Operating profit............................................ 7,986 9,247 5,732
Nonoperating expense (income), principally interest......... 2,638 1,322 (33)
------- ------- -------
Pretax income............................................... 5,348 7,925 5,765
Income taxes................................................ 2,141 3,322 3,217
------- ------- -------
Net income.................................................. $ 3,207 $ 4,603 $ 2,548
======= ======= =======
</TABLE>
<TABLE>
<CAPTION>
NOV. 27, NOV. 28,
1999 1998
(AS RESTATED) (AS RESTATED)
(NOTE 13) (NOTE 13)
------------- -------------
<S> <C> <C>
Current assets.............................................. $35,957 $20,637
Intangible assets........................................... 25,002 8,752
Other noncurrent assets..................................... 11,018 8,074
------- -------
Total assets................................................ $71,977 $37,463
======= =======
Current liabilities......................................... $31,273 $23,186
Debt........................................................ 42,859 19,800
Noncurrent liabilities...................................... 3,530 3,493
------- -------
Total liabilities........................................... 77,662 46,479
Accumulated deficit......................................... (5,685) (9,016)
------- -------
Total liabilities and accumulated deficit................... $71,977 $37,463
======= =======
</TABLE>
REAL ESTATE JOINT VENTURES
Included in other assets at November 27, 1999, and November 28, 1998, is
$3,110 and $3,128, respectively, for Griffin's 30% interest in a real estate
joint venture that owns commercial properties in Connecticut. Results of this
investment in fiscal 1999, fiscal 1998 and fiscal 1997 were $116, $106 and $27,
respectively, and are included in operating profit.
24
<PAGE>
GRIFFIN LAND & NURSERIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
10. SUPPLEMENTAL FINANCIAL STATEMENT INFORMATION
INVENTORIES
Inventories consist of:
<TABLE>
<CAPTION>
NOV. 27, NOV. 28,
1999 1998
-------- --------
<S> <C> <C>
Nursery stock............................................. $26,728 $24,329
Finished goods............................................ 1,481 1,420
Materials and supplies.................................... 987 997
------- -------
$29,196 $26,746
======= =======
</TABLE>
PROPERTY AND EQUIPMENT
Property and equipment consist of:
<TABLE>
<CAPTION>
ESTIMATED USEFUL NOV. 27, NOV. 28,
LIVES 1999 1998
---------------- -------- --------
<S> <C> <C> <C>
Land and improvements..................... $ 7,402 $ 6,336
Buildings................................. 10 to 40 years 4,198 3,871
Machinery and equipment................... 3 to 20 years 14,560 13,297
-------- --------
26,160 23,504
Accumulated depreciation.................. (11,801) (10,869)
-------- --------
$ 14,359 $ 12,635
======== ========
</TABLE>
Total depreciation expense related to property and equipment in fiscal 1999,
fiscal 1998 and fiscal 1997 was $1,323, $1,265 and $1,210, respectively.
REAL ESTATE HELD FOR SALE OR LEASE
Real estate held for sale or lease consists of:
<TABLE>
<CAPTION>
ESTIMATED USEFUL NOV. 27, NOV. 28,
LIVES 1999 1998
---------------- -------- --------
<S> <C> <C> <C>
Land....................................... $ 4,723 $ 4,761
Land improvements.......................... 15 years 13,488 12,716
Buildings.................................. 40 years 23,836 21,498
------- -------
42,047 38,975
Accumulated depreciation................... (8,281) (7,456)
------- -------
$33,766 $31,519
======= =======
</TABLE>
Griffin capitalized interest in fiscal 1999 and fiscal 1998 of $103 and
$111, respectively. There was no interest capitalized in fiscal 1997. Total
depreciation expense related to real estate held for sale or lease in fiscal
1999, fiscal 1998 and fiscal 1997 was $869, $739 and $711, respectively.
25
<PAGE>
GRIFFIN LAND & NURSERIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
10. SUPPLEMENTAL FINANCIAL STATEMENT INFORMATION (CONTINUED)
ACCOUNTS PAYABLE AND ACCRUED EXPENSES
Accounts payable and accrued expenses consist of:
<TABLE>
<CAPTION>
NOV. 27, NOV. 28,
1999 1998
-------- --------
<S> <C> <C>
Trade payables.............................................. $2,741 $3,685
Accrued salaries, wages and other compensation.............. 1,381 781
Other accrued liabilities................................... 1,290 1,120
------ ------
$5,412 $5,586
====== ======
</TABLE>
SUPPLEMENTAL CASH FLOW INFORMATION
Griffin incurred capital lease obligations in fiscal 1999, fiscal 1998 and
fiscal 1997 of $239, $238 and $202, respectively.
In fiscal 1999 Griffin received a tax refund, net of income tax payments, of
$654. In fiscal 1998 tax payments were $132. Interest payments, net of
capitalized interest, were $626, $152 and $1,007 in fiscal 1999, fiscal 1998 and
fiscal 1997, respectively, including interest payments of $730 in fiscal 1997
under Culbro's general corporate debt facilities that were transferred to GC
Holdings pursuant to the Distribution Agreement (see Note 1). Prior to the
Distribution in 1997, interest and tax payments were made by Culbro on behalf of
Griffin. Griffin was included in Culbro's consolidated federal income tax
returns through the Distribution (see Note 4). Accordingly, tax and interest
payments made by Culbro through the Distribution are included in other financing
activities on the consolidated statement of cash flows for fiscal 1997.
11. QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)
The summarized quarterly financial data for fiscal 1999 and fiscal 1998
presented below have been restated from amounts previously filed in Reports
on Form 10-Q as a result of changes to amounts reported as equity income from
Centaur. See Note 13.
<TABLE>
<CAPTION>
1999 QUARTERS 1ST 2ND 3RD 4TH TOTAL
------------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Net sales and other revenue.................... $ 5,165 $27,293 $14,409 $16,077 $62,944
Gross profit................................... 1,597 8,316 5,171 4,539 19,623
Net income (loss).............................. (1,548) 2,879 229 616 2,176
Basic net income (loss) per share.............. (0.32) 0.59 0.05 0.13 0.45
Diluted net income (loss) per share............ (0.32) 0.58 0.05 0.11 0.42
</TABLE>
<TABLE>
<CAPTION>
1998 QUARTERS 1ST 2ND 3RD 4TH TOTAL
------------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Net sales and other revenue.................... $ 3,514 $23,707 $11,019 $12,991 $51,231
Gross profit................................... 1,019 6,907 3,595 3,492 15,013
Net income (loss).............................. (1,482) 2,387 (749) (221) (65)
Pro forma basic net income (loss) per share.... (0.31) 0.50 (0.16) (0.05) (0.01)
Pro forma diluted net income (loss) per
share........................................ (0.31) 0.47 (0.16) (0.05) (0.03)
</TABLE>
26
<PAGE>
GRIFFIN LAND & NURSERIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
12. COMMITMENTS AND CONTINGENCIES
Imperial has entered into contract growing agreements with suppliers of
field-grown plants. In accordance with these agreements, Imperial has agreed to
purchase inventory as it becomes available with an aggregate purchase price of
approximately $3.6 million over the next four years.
In 1999, Imperial entered into an agreement to purchase land for a new
wholesale sales and service center. Completion of the land purchase is
contingent upon receiving all required regulatory approvals to operate a sales
and service center on that site. If such approval is received, expenditures for
the land acquisition and required site work are expected to be approximately
$3.9 million in fiscal 2000.
The Company is involved, as a defendant, in various litigation matters
arising in the ordinary course of business. In the opinion of management, based
on the advice of legal counsel, the ultimate liability, if any, with respect to
these matters will not be material.
13. RESTATEMENT
The consolidated financial statements of Griffin for the fiscal years
ended November 27, 1999 and November 28, 1998 have been restated to adjust
the amounts reported for equity income from Centaur. The restatement was
required to adjust the timing of subscription revenue of Centaur to comply
with generally accepted accounting principles in the United States. The
following summarizes the changes to the previously reported financial
statements:
<TABLE>
<CAPTION>
FOR THE FISCAL YEARS ENDED,
--------------------------------------
NOVEMBER 27, 1999 NOVEMBER 28, 1998
----------------- -----------------
AS AS AS AS
REPORTED RESTATED REPORTED RESTATED
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Income before equity investments $ 1,623 $ 1,623 $ 86 $ 86
Income (loss) from equity investments 853 553 35 (151)
-------- -------- -------- ---------
Net income (loss) $ 2,476 $ 2,176 $ 121 $ (65)
======== ======== ======== =========
Basic net income (loss) per share $ 0.51 $ 0.45 $ 0.03 $ ($0.01)
======== ======== ======== =========
Diluted net income (loss) per share $ 0.48 $ 0.42 $ 0.01 $ ($0.03)
======== ======== ======== =========
NOVEMBER 27, 1999 NOVEMBER 28, 1998
----------------- -----------------
AS AS AS AS
REPORTED RESTATED REPORTED RESTATED
-------- -------- -------- --------
Total assets $113,371 $112,885 $104,916 $104,730
======== ======== ======== =========
Stockholders' equity $ 93,756 $ 93,270 $ 91,186 $ 91,000
======== ======== ======== =========
</TABLE>
27
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Stockholders and Directors of
Griffin Land & Nurseries, Inc.
In our opinion, based on our audits and the report of other auditors, the
accompanying consolidated balance sheets and the related consolidated
statements of operations, stockholders' equity and of cash flows present
fairly, after the restatement referred to in Note 13, in all material
respects, the financial position of Griffin Land & Nurseries, Inc. and its
subsidiaries at November 27, 1999 and November 28, 1998, and the results of
their operations and their cash flows for the fiscal years ended November 27,
1999, November 28, 1998 and November 29, 1997, in conformity with accounting
principles generally accepted in the United States. These financial
statements are the responsibility of the management of Griffin Land &
Nurseries, Inc.; our responsibility is to express an opinion on these
financial statements based on our audits. We did not audit the fiscal 1999
and fiscal 1998 financial statements of Centaur Communications, Ltd., after
the restatement referred to in Note 13, an investment which is carried at
equity in the consolidated financial statements (see Notes 7, 9 and 13) and
represents approximately 14.6% and 15.2%, respectively, of consolidated
assets. Those statements were audited by other auditors whose report has been
furnished to us, and our opinion, insofar as it relates to the amounts
included for Centaur Communications, Ltd. in the consolidated financial
statements for the years ended November 27, 1999, November 28, 1998 and
November 29, 1997, is based on the report of the other auditors. We conducted
our audits of these consolidated financial statements in accordance with
auditing standards generally accepted in the United States, which require
that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits and the report
of other auditors provide a reasonable basis for the opinion expressed above.
/s/ PricewaterhouseCoopers LLP
February 9, 2000 except Notes 7, 9, 11 and 13
for which the date is August 3, 2000
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Registration
Statement on Form S-8 (No. 333-30639) of Griffin Land & Nurseries, Inc. of
our report dated February 9, 2000, except Notes 7, 9, 11 and 13 for which the
date is August 3, 2000, which appears above in this Form 10-K/A of Griffin
Land & Nurseries, Inc. for the fiscal year ended November 27, 1999. We also
consent to the incorporation by reference of our report on the financial
statement schedules, which also appears in this Form 10-K/A of Griffin Land &
Nurseries, Inc. for the fiscal year ended November 27, 1999.
/s/ PricewaterhouseCoopers LLP
August 3, 2000
28
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Corporation has duly caused this annual report to be
signed on its behalf by the undersigned, thereunto duly authorized.
<TABLE>
<CAPTION>
<S> <C>
GRIFFIN LAND & NURSERIES, INC.
By: /s/ FREDERICK M. DANZIGER
-----------------------------------------
Frederick M. Danziger
CHIEF EXECUTIVE OFFICER
By: /s/ ANTHONY J. GALICI
-----------------------------------------
Anthony J. Galici
VICE PRESIDENT, CHIEF FINANCIAL
OFFICER AND SECRETARY
</TABLE>
Pursuant to the requirements of the Securities Exchange Act of 1934, this
annual report has been signed by the following persons on behalf of the
Corporation and in the capacities indicated as of September 15, 2000.
<TABLE>
<CAPTION>
NAME TITLE
---- -----
<C> <S>
/s/ WINSTON J. CHURCHILL, JR.
-------------------------------------------- Director
Winston J. Churchill, Jr.
/s/ EDGAR M. CULLMAN
-------------------------------------------- Chairman of the Board and Director
Edgar M. Cullman
/s/ FREDERICK M. DANZIGER
-------------------------------------------- President, Director and Chief Executive
Frederick M. Danziger Officer
/s/ JOHN L. ERNST
-------------------------------------------- Director
John L. Ernst
/s/ ANTHONY J. GALICI
-------------------------------------------- Vice President, Chief Financial Officer and
Anthony J. Galici Secretary
/s/ THOMAS C. ISRAEL
-------------------------------------------- Director
Thomas C. Israel
/s/ DAVID F. STEIN
-------------------------------------------- Director
David F. Stein
</TABLE>
29
