<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q/A
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended November 5, 1995 Commission File Number 1-1066
---------------- ------
GENERAL HOST CORPORATION
------------------------------------------------------
(Exact name of Registrant as specified in its Charter)
NEW YORK STATE 13-0762080
- ---------------------------------- ------------------------
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification Number)
One Station Place, P.O. Box 10045, Stamford, Connecticut 06904
---------------------------------------------------------------------
(Address of principal executive office) (Zip Code)
Registrant's Telephone Number: (203) 357-9900
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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
------- -------
Indicate the number of shares outstanding of each of the issuer's classes of
common stock as of the latest practicable date: Common Stock, $1.00 par value,
22,140,284 shares outstanding as of December 18, 1995.
<PAGE> 2
The Registrant hereby files this Form 10-Q/A for the purpose of amending Items
1, 2 and 6 of the Form 10-Q for the quarter ended November 5, 1995.
GENERAL HOST CORPORATION
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
The accompanying consolidated financial statements have been
reviewed by Price Waterhouse LLP, independent accountants, whose
report thereon is included elsewhere in this Item 1. The review by
Price Waterhouse LLP was based on procedures adopted by the American
Institute of Certified Public Accountants and was not an audit.
In the opinion of the Company, the accompanying consolidated
financial statements reflect all adjustments necessary to a fair
statement of the results for the interim periods presented herein.
In the opinion of management such adjustments consisted of normal
recurring items. Financial results of the interim period are not
necessarily indicative of results that may be expected for any other
interim period or for the fiscal year.
2
<PAGE> 3
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
- -------------------------------------------------------------------------------
(In thousands, except per share amounts)
<TABLE>
<CAPTION>
Twelve Weeks Ended Forty Weeks Ended
------------------------- -----------------------
NOVEMBER 5, November 6, NOVEMBER 5, November 6,
1995 1994 1995 1994
----------- ------------ ---------- ----------
<S> <C> <C> <C> <C>
REVENUES:
Sales $ 95,976 $ 98,022 $ 424,715 $ 398,117
Other income 419 197 2,528 1,292
----------- ------------ ---------- ----------
96,395 98,219 427,243 399,409
----------- ------------ ---------- ----------
COSTS AND EXPENSES:
Cost of sales, including
buying and occupancy 75,695 76,217 309,562 287,391
Selling, general and
administrative 27,946 29,304 103,880 100,095
Interest and debt expense 5,536 5,226 18,287 17,524
----------- ------------ ---------- ----------
109,177 110,747 431,729 405,010
----------- ------------ ---------- ----------
LOSS FROM CONTINUING OPERATIONS
BEFORE INCOME TAXES AND NET
GAIN ON SALE OF INVESTMENT
IN AN UNCONSOLIDATED AFFILIATE (12,782) (12,528) (4,486) (5,601)
INCOME TAX BENEFIT (883) (1,869) (706) (1,000)
NET GAIN ON SALE OF INVESTMENT
IN AN UNCONSOLIDATED
AFFILIATE 3,612 3,612
----------- ------------ ---------- ----------
LOSS FROM CONTINUING OPERATIONS (11,899) (7,047) (3,780) (989)
LOSS FROM DISCONTINUED
OPERATIONS (2,793) (2,793)
----------- ------------ ---------- ----------
NET LOSS $ (14,692) $ (7,047) $ (6,573) $ (989)
=========== ============ ========== ==========
NET LOSS PER SHARE:
Loss from continuing
operations $ (.53) $ (.32) $ (.17) $ (.04)
Loss from discontinued
operations (.13) (.13)
----------- ------------ ---------- ----------
Net loss per share $ (.66) $ (.32) $ (.30) $ (.04)
=========== ============ ========== ==========
AVERAGE SHARES OUTSTANDING 22,143 22,151 22,143 22,134
=========== ============ ========== ==========
</TABLE>
See accompanying notes.
3
<PAGE> 4
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
- -------------------------------------------------------------------------------
(Dollars in thousands)
<TABLE>
<CAPTION>
NOVEMBER 5, November 6, January 29,
1995 1994 1995
----------- ----------- -----------
<S> <C> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 26,431 $ 39,297 $ 83,362
Accounts and notes receivable 3,251 3,698 3,682
Merchandise inventory 143,739 122,790 87,238
Prepaid expenses and other
current assets 12,932 9,676 8,589
--------- -------- ---------
Total current assets 186,353 175,461 182,871
--------- -------- ---------
PROPERTY, PLANT AND EQUIPMENT,
LESS ACCUMULATED DEPRECIATION
OF $157,087, $139,743 AND $142,621 241,665 257,730 253,311
INTANGIBLES, LESS ACCUMULATED
AMORTIZATION OF $9,537,
$8,602 AND $8,818 16,382 17,317 17,101
OTHER ASSETS AND DEFERRED CHARGES 9,609 11,794 11,575
--------- -------- ---------
$ 454,009 $462,302 $ 464,858
========= ======== =========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 65,894 $ 67,829 $ 56,726
Accrued expenses 29,628 34,499 40,623
Provision for store closings and
other costs 3,260 6,052 6,379
Current portion of long-term debt 57,511 5,718 5,694
--------- -------- ---------
Total current liabilities 156,293 114,098 109,422
--------- -------- ---------
LONG-TERM DEBT:
Senior debt 111,359 164,169 163,311
Subordinated debt 65,000 65,000 65,000
--------- -------- ---------
Total long-term debt 176,359 229,169 228,311
--------- -------- ---------
OTHER LIABILITIES AND DEFERRED CREDITS 10,331 11,110 9,475
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY:
Common stock $1.00 par value,
100,000,000 shares authorized,
31,752,450 shares issued 31,752 31,752 31,752
Capital in excess of par value 81,206 84,744 81,163
Retained earnings 91,184 94,554 97,802
--------- -------- ---------
204,142 211,050 210,717
Cost of 9,610,905, 10,659,278
and 9,611,497 shares of
common stock in treasury (91,100) (101,038) (91,106)
Unearned compensation (126)
Notes receivable from exercise of
stock options (2,016) (1,961) (1,961)
--------- -------- ---------
Total shareholders' equity 111,026 107,925 117,650
--------- -------- ---------
$ 454,009 $462,302 $ 464,858
========= ======== =========
</TABLE>
See accompanying notes.
4
<PAGE> 5
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
- -------------------------------------------------------------------------------
(Dollars in thousands)
<TABLE>
<CAPTION>
Forty Weeks Ended
NOVEMBER 5, November 6,
1995 1994
----------- -------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss from continuing operations $ (3,780) $ (989)
Noncash adjustments:
Depreciation and amortization 17,488 18,477
Amortization of compensation related
to stock grants 200
Net gain on the sale of investment in
an unconsolidated affiliate (3,612)
Other (1,139) 936
--------- --------
12,569 15,012
Changes in current assets and current liabilities:
Decrease in accounts and notes receivable 3,064 2,629
Increase in inventory (56,501) (34,983)
(Increase) decrease in prepaid expenses (4,343) 272
Increase in accounts payable 9,168 18,278
Decrease in accrued expenses (12,172) (2,004)
Decrease in provision for store closings and
other costs (3,119) (6,194)
--------- --------
Net cash used for continuing operations (51,334) (6,990)
Net cash used for discontinued operations (1,601) (161)
--------- --------
(52,935) (7,151)
--------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to property, plant and equipment (4,465) (4,479)
Net proceeds from the sale of an investment
in an unconsolidated affiliate 3,612
Other 604 3,117
--------- --------
Net cash provided by (used for)
investing activities (3,861) 2,250
--------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of long-term debt 20,717
Payment of long-term debt and capital lease
obligations (20,852) (18,657)
--------- --------
Net cash used for financing activities (135) (18,657)
--------- --------
Decrease in cash and cash equivalents (56,931) (23,558)
Cash and cash equivalents at beginning of year 83,362 62,855
--------- --------
Cash and cash equivalents at end of quarter $ 26,431 $ 39,297
========= ========
</TABLE>
See accompanying notes.
5
<PAGE> 6
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- -------------------------------------------------------------------------------
(Unaudited)
NOTE 1
The Company is the defendant in a lawsuit filed in 1991 in which farmers in Rice
County, Kansas alleged that saltwater pollution of the ground water by the
American Salt Company, a former subsidiary of the Company, rendered it unfit for
irrigation. In August 1995, a jury verdict awarded the plaintiffs $480,000
in compensatory damages for the period 1989 to 1995 and in October 1995 the
plaintiffs were awarded $550,000 in punitive damages and the judgment was
entered. The judgment, together with approximately $1,130,000 in legal defense
costs, $470,000 in related costs, principally for technical consulting and
expert witnesses, and $370,000 for future legal and related costs, totalled
$3,000,000. As a result of the court's entry of the judgment in October 1995,
the Company charged discontinued operations in the 1995 third quarter with an
after-tax loss of $2,793,000, or $.13 per share, which included $800,000 of
charges previously recorded in continuing operations. The Company plans to
appeal the case.
NOTE 2
The Company is arranging new mortgage financings which, together with cash
generated from operations, will be used to repay the maturing mortgage notes
due March 29, 1996. During the 1995 third quarter the Company concluded a part
of the new mortgage financing plan which amounted to $20,717,000. As a part of
securing the new financing in the 1995 third quarter, the Company repaid
$15,325,000 on the maturing mortgage notes. The Company's intent is to repay
the remaining balance of $55,925,000 prior to the maturity date.
NOTE 3
On March 1, 1995 the Company declared a 5% stock dividend for shareholders of
record on March 17, 1995. The stock dividend representing 1,056,065 shares was
paid on April 7, 1995. Share and per share data for 1994 have been restated to
reflect the 5% stock dividend.
NOTE 4
In October, 1994 the Company sold its approximately 49.4% interest in Sunbelt
Nursery Group, Inc. consisting of 4,200,000 common shares, which resulted in a
net gain of $3,612,000, or $.16 per share.
6
<PAGE> 7
NOTE 5
Income taxes for the forty week period of 1995 included the elimination of
income tax reserves of $396,000, which were no longer required. Income taxes
for the twelve and forty week periods of 1994 included the elimination of
income tax reserves of $1,000,000, which were no longer required. The income
tax provision for financial reporting purposes has been calculated using an
annual effective rate method. The difference between the statutory rate for
federal purposes and taxes provided for in 1995 and 1994 is due to the
utilization of previously unrecognized tax benefits.
NOTE 6
Noncash financing activities for 1994 included the issuance of restricted stock
grants and the unearned compensation value is shown as a reduction of
shareholders' equity in the consolidated balance sheets.
Interest payments amounted to $9,062,000 and $21,363,000 for the twelve and
forty weeks ended November 5, 1995, and $8,893,000 and $20,964,000 for the
twelve and forty weeks ended November 6, 1994. Tax payments amounted to
$27,000 and $449,000 for the twelve and forty weeks ended November 5, 1995, and
$189,000 and $364,000 for the twelve and forty weeks ended November 6, 1994.
7
<PAGE> 8
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Shareholders of
General Host Corporation
We have reviewed the accompanying consolidated balance sheets of General Host
Corporation and its subsidiaries as of November 5, 1995 and November 6, 1994,
and the related consolidated statements of income and of cash flows for the
twelve and forty week periods ended November 5, 1995 and November 6, 1994.
This financial information is the responsibility of the Company's management.
We conducted our review in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures to
financial data and making inquiries of persons responsible for financial and
accounting matters. It is substantially less in scope than an audit conducted
in accordance with generally accepted auditing standards, the objective of
which is the expression of an opinion regarding the financial statements taken
as a whole. Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that should
be made to the accompanying financial information for it to be in conformity
with generally accepted accounting principles.
We previously audited in accordance with generally accepted auditing standards,
the consolidated balance sheet as of January 29, 1995, and the related
consolidated statements of income, of changes in shareholders' equity, and of
cash flows for the year then ended (not presented herein), and in our report
dated March 1, 1995 we expressed an unqualified opinion on those consolidated
financial statements. In our opinion, the information set forth in the
accompanying consolidated balance sheet information as of January 29, 1995, is
fairly stated in all material respects in relation to the consolidated balance
sheet from which it has been derived.
Price Waterhouse LLP
Detroit, Michigan
December 5, 1995
8
<PAGE> 9
ITEM 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Third quarter of 1995 compared with third quarter 1994
Results of Operations
Sales
Sales for the Company's principal operating subsidiary, Frank's Nursery &
Crafts, Inc., decreased 2.1% to $95,976,000 for the twelve weeks ended November
5, 1995 compared with $98,022,000 in the 1994 third quarter which ended on
November 6, 1994. Same-store sales (stores open for a full year in both years)
decreased 1.7% for the 1995 third quarter. Decreased sales in the basic craft
area contributed to the decreased sales in the 1995 third quarter.
Earnings
The loss from continuing operations for the third quarter of 1995 was
$11,899,000 compared to $7,047,000 in the 1994 third quarter.
Cost of sales, including buying and occupancy, decreased $522,000 to
$75,695,000 in the third quarter of 1995 compared to $76,217,000 in 1994. As a
percentage of sales, cost of sales increased 1.1 percentage points due
primarily to a decrease in merchandise margins. The decrease in merchandise
margins was mainly attributed to the mix of goods sold.
Selling, general and administrative expenses decreased $1,358,000 to
$27,946,000 in the third quarter of 1995 compared to $29,304,000 in 1994. The
decrease in expense is primarily attributed to the Company's continued progress
in reducing expenses, primarily advertising, in the traditionally slow third
quarter. As a percentage of sales, selling, general and administrative
expenses decreased .8 of a percentage point to 29.1% of sales compared to 29.9%
in the 1994 quarter.
Other income, primarily interest income, increased $222,000 to $419,000 in
the third quarter of 1995 compared to $197,000 in 1994. The increase was due
primarily to increased levels of cash equivalents and higher rates of return
compared to 1994.
Interest and debt expense increased $310,000 to $5,536,000 in the third
quarter of 1995 compared to $5,226,000 in 1994 primarily due to increased
interest rates on the Adjustable Rate First Mortgage Notes.
9
<PAGE> 10
The after-tax loss from discontinued operations in the 1995 third quarter
of $2,793,000, or $.13 per share, is the result of the court's entry of a
judgment against the Company in a 1991 saltwater pollution lawsuit. The
lawsuit involves claims by farmers in Rice County, Kansas who alleged that
saltwater pollution of the ground water by the American Salt Company, a former
subsidiary of the Company, rendered it unfit for irrigation. In August 1995, a
jury verdict awarded the plaintiffs $480,000 in compensatory damages for the
period 1989 to 1995 and in October 1995 the plaintiffs were awarded $550,000 in
punitive damages and the judgment was entered. The judgment, together with
approximately $1,130,000 in legal defense costs, $470,000 in related costs,
principally for technical consulting and expert witnesses, and $370,000 for
future legal and related costs, totalled $3,000,000. The Company plans to
appeal the case.
First three quarters of 1995 compared with the first three quarters of 1994
Results of Operations
Sales
Sales were $424,715,000 for the forty weeks ended November 5, 1995 (the
"1995 three quarters") compared with $398,117,000 for the forty weeks ended
November 6, 1994 (the "1994 three quarters"). Same-store sales for the 1995
three quarters increased 6.9% compared to the 1994 three quarters. A strong
second quarter performance from the Company's lawn and garden business and
substantial increases in the pet food and supply lines during the first three
quarters contributed to the increased sales in the 1995 three quarters.
Earnings
The loss from continuing operations for the 1995 three quarters was
$3,780,000 compared to $989,000 in the 1994 three quarters.
Cost of sales, including buying and occupancy, increased $22,171,000 in
the 1995 three quarters to $309,562,000 compared to $287,391,000 in 1994. As a
percentage of sales, cost of sales increased .7 of a percentage point due
primarily to a decrease in merchandise margins resulting from increased
promotional activity and extremely hot, dry weather in the second quarter of
1995 as well as the mix of goods sold in the 1995 second and third quarters.
The percentage increase was offset in part by a decrease in buying and
occupancy cost as a percentage of sales.
Selling, general and administrative expenses increased $3,785,000 to
$103,880,000 in the 1995 three quarters compared to
10
<PAGE> 11
$100,095,000 in 1994. The increase in expense is primarily attributable to the
planned increases in store payroll, advertising and administrative costs that
occurred in the first half, offset by a reduction in advertising in the
traditionally slow third quarter. As a percentage of sales, selling, general
and administrative expenses decreased .6 of a percentage point to 24.5% of
sales in the 1995 three quarters compared to 25.1% in 1994.
Other income increased $1,236,000 to $2,528,000 in the 1995 three quarters
compared to $1,292,000 in the 1994 three quarters. The increase was due
primarily to increased levels of cash equivalents and higher rates of return
compared to 1994.
Interest and debt expense increased $763,000 to $18,287,000 in the 1995
three quarters compared to $17,524,000 in the 1994 three quarters due primarily
to increased interest rates on the Adjustable Rate First Mortgage Notes.
Income taxes for the 1995 three quarters included the elimination of
income tax reserves of $396,000, which were no longer required. Income taxes
for the 1994 third quarter and 1994 three quarters included the elimination of
income tax reserves of $1,000,000, which were no longer required. The
effective income tax rate used in the 1995 and 1994 three quarters represented
an estimated annual effective tax rate which reflected the utilization of
previously unrecognized tax benefits.
In October 1994 the Company sold its approximately 49.4% interest in
Sunbelt Nursery Group, Inc. consisting of 4,200,000 common shares which
resulted in a net gain of $3,612,000 in the 1994 three quarters.
The after-tax loss from discontinued operations in the 1995 third quarter
of $2,793,000, or $.13 per share, is the result of the court's entry of a
judgment against the Company in a 1991 saltwater pollution lawsuit. The
lawsuit involves claims by farmers in Rice County, Kansas who alleged that
saltwater pollution of the ground water by the American Salt Company, a former
subsidiary of the Company, rendered it unfit for irrigation. In August 1995, a
jury verdict awarded the plaintiffs $480,000 in compensatory damages for the
period 1989 to 1995 and in October 1995 the plaintiffs were awarded $550,000 in
punitive damages and the judgment was entered. The judgment, together with
approximately $1,130,000 in legal defense costs, $470,000 in related costs,
principally for technical consulting and expert witnesses, and $370,000 for
future legal and related costs, totalled $3,000,000. The Company plans to
appeal the case.
11
<PAGE> 12
Capital Resources and Liquidity
Net cash used for continuing operations was $51,334,000 in the 1995 three
quarters compared to $6,990,000 in the 1994 three quarters. Inventory increased
$56,501,000 for the 1995 three quarters compared to an increase of $34,983,000
in 1994 while accounts payable increased $9,168,000 in 1995 compared to
$18,278,000 in 1994. The increase in inventory for 1995 is due primarily to
planned earlier receipts of Christmas merchandise. The accounts payable change
for 1995 and 1994, described above, included amounts payable to brokers of
$14,998,000 at November 5, 1995 and at the end of fiscal 1994, and $14,998,000
at November 6, 1994 compared to $24,998,000 at the end of fiscal 1993.
The decrease in accrued expenses for 1995 of $12,172,000 compared to $2,004,000
for 1994 was due to timing of payments. At November 5, 1995 the remaining store
closing reserve of $5,260,000 primarily represents lease termination costs for
the remaining five store locations and estimated losses associated with the sale
and or sublease of real estate. The Company utilized net cash of $3,119,000 in
the 1995 three quarters to pay lease termination costs for leases terminated at
the end of fiscal 1994 and in 1995 and to pay brokers fees and legal costs.
Net cash used for discontinued operations in the 1995 three quarters was
$1,601,000 related primarily to 1995 payments for legal expenditures incurred
to defend the Company in a 1991 saltwater pollution lawsuit. Net cash used of
$161,000 in the 1994 three quarters related to payments for operations disposed
of in prior years.
Net cash used for investing activities was $3,861,000 in the 1995 three
quarters. This compares to net cash provided of $2,250,000 in 1994 that
included proceeds from the sale of property, plant and equipment of $2,997,000
and the sale of the Company's approximately 49.4% interest in Sunbelt Nursery
Group, Inc. consisting of 4,200,000 common shares which resulted in net
proceeds of $3,612,000.
Net cash used for financing activities was $135,000 in the 1995 three
quarters compared with $18,657,000 in the 1994 three quarters. In the
1995 third quarter the Company received gross proceeds of $20,717,000 from the
issuance of long-term debt. The debt constituted a part of the new mortgage
financing plan, the proceeds of which will be used to repay the Adjustable Rate
First Mortgage Notes ("maturing mortgage notes") due March 29, 1996. The 1995
three quarters included payments of $4,750,000 for the mortgage notes and
repayment of $15,325,000 of maturing mortgage notes as part of securing the new
financing. The 1994 three quarters included the repayment of $13,191,000 of 7%
Subordinated Debentures on February 1, 1994 and payments of $4,750,000 for the
mortgage notes. In April 1994 the Company issued restricted stock grants to
employees of the Company. The noncash transaction was
12
<PAGE> 13
completed by issuing 86,450 shares of treasury stock offset by a reduction of
shareholders' equity for unearned compensation which was recognized in fiscal
1994 in accordance with the restriction placed on the stock grants. At
November 5, 1995, 60,509 shares remain subject to restriction.
On March 1, 1995 the Company declared a 5% stock dividend for shareholders
of record on March 17, 1995. The stock dividend representing 1,056,065 shares
was paid on April 7, 1995. Share and per share data for 1994 have been
restated to reflect the 5% stock dividend.
Working capital at November 5, 1995 was $30,060,000 or $43,389,000 lower
than the $73,449,000 working capital level at January 29, 1995. The decrease
in working capital is due primarily to the reclassification of the maturing
mortgage notes due March 29, 1996 to the current portion of long-term debt.
The quarter-end included $26,431,000 of cash and cash equivalents.
The Company is arranging new mortgage financings which, together with cash
generated from operations, will be used to repay the maturing mortgage notes
due March 29, 1996. In the 1995 third quarter the Company concluded a part of
the new mortgage financing plan with two financial institutions for
$20,717,000. The new mortgage notes bear interest at varying rates from 8.31%
to 8.69%, are payable monthly, and mature with balloon payments on September 1,
2005 and October 1, 2005. These mortgage notes are secured by first mortgages
of 20 nursery and crafts retail stores. As part of securing the new financing,
the Company repaid $15,325,000 on the maturing mortgage notes. The Company's
intent is to repay the remaining balance of $55,925,000 prior to the maturity
date. As of November 5, 1995 the Company had incurred approximately $995,000
of expense related to securing the new financings.
The Company has a $25,000,000 unsecured credit agreement with
a bank which expires May 31, 1996. The Company plans to negotiate an expanded
credit facility with a group of banks which would increase the bank credit
facility to $50,000,000. The bank agreement requires the Company, among other
things, to maintain minimum levels of earnings, tangible net worth and certain
minimum financial ratios. The Company was in compliance with all of its
covenants under this agreement at November 5, 1995. On November 6, 1995 the
Company borrowed $10,000,000 under this agreement which was repaid on December
6, 1995. The Company was in compliance with restrictions under all other debt
agreements at November 5, 1995.
13
<PAGE> 14
The Company has sufficient cash and cash equivalents and expects to
generate sufficient cash flow from operations to meet its seasonal working
capital needs, pay approximately $5,400,000 of fixed interest charges and fund
capital expenditures of approximately $1,600,000 for the remainder of fiscal
1995. During the next eighteen months, the Company anticipates opening 10 to
12 full-line stores. These new stores would require minimal capital investment
as the stores would be under lease arrangements.
14
<PAGE> 15
PART II - OTHER INFORMATION
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
(11) Additional Earnings Per Share Information.
(15) Letter regarding unaudited interim financial
information.
(b) Reports on Form 8-K
During the quarter and through the date of this Report,
the Registrant filed no reports on Form 8-K.
15
<PAGE> 16
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.
GENERAL HOST CORPORATION
By: /s/ J. Theodore Everingham
-------------------------------
J. Theodore Everingham
Vice President, General Counsel
and Secretary
By: /s/ James R. Simpson
-------------------------------
James R. Simpson
Vice President and Controller
Dated: March 18, 1996
16
<PAGE> 17
EXHIBIT INDEX
Exhibit Number Description of Exhibit
(11) Additional Earnings Per Share Information.
(15) Letter regarding unaudited interim financial information.
(27) Financial Data Schedule.
<PAGE> 1
EXHIBIT 11
GENERAL HOST CORPORATION
ADDITIONAL EARNINGS PER SHARE INFORMATION (UNAUDITED)
(In thousands, except per share amounts)
<TABLE>
<CAPTION>
Twelve Weeks Ended Forty Weeks Ended
---------------------------- ----------------------------
November 5, November 6, November 5, November 6,
1995 1994 1995 1994
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Earnings (loss) for full dilution:
Loss from continuing operations $ (11,899) $ (7,047) $ (3,780) $ (989)
Add interest on 8% Convertible
Debentures, net of tax effect 1,116 1,200 3,720 4,000
--------- --------- --------- ---------
Income (loss) from continuing
operations, as adjusted (10,783) (5,847) (60) 3,011
Loss from discontinued operations (2,793) (2,793)
--------- --------- --------- ---------
Net income (loss), as adjusted $ (13,576) $ (5,847) $ (2,853) $ 3,011
========= ========= ========= =========
Shares used for calculating primary
earnings per share 22,143 22,151 22,143 22,134
Additional shares resulting from
assumed conversion of 8% Convertible
Debentures 6,908 6,908 6,908 6,908
Additional shares resulting from
assumed exercise of stock options 5 0 6 0
--------- --------- --------- ---------
29,056 29,059 29,057 29,042
========= ========= ========= =========
Fully diluted earnings (loss) per share:
Income (loss) from continuing
operations $ (.37) $ (.20) $ (.00) $ .10
Loss from discontinued operations (.10) (.10)
--------- --------- --------- ---------
Fully diluted income (loss) per share $ (.47)(1) $ (.20)(1) $ (.10)(1) $ .10(1)
========= ========= ========= =========
</TABLE>
(1) This calculation is submitted in accordance with Regulation S-K item 601
(b)(11) although it is contrary to paragraph 40 of APB Opinion 15 because it
produces an anti-dilutive result.
<PAGE> 1
EXHIBIT 15
March 18, 1996
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Dear Sirs:
We are aware that the November 5, 1995 Quarterly Report on Form 10-Q of
General Host Corporation which includes our report dated December 5, 1995
(issued pursuant to the provisions of Statements on Auditing Standards No. 71
and 42), is incorporated by reference in its Registration Statement No.
33-50020 on Form S-8 filed on July 27, 1992. We are also aware of our
responsibilities under the Securities Act of 1933.
Yours very truly,
Price Waterhouse LLP
Detroit, Michigan
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