<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q/A NO. 1
/X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarter ended September 30, 1994
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from _______________ to _______________
Commission file number 1-4596
GROW GROUP, INC.
(Exact name of registrant as specified in its charter)
New York 11-1665588
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
200 Park Avenue, New York, New York 10166
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code: (212) 599-4400
Not Applicable
(Former name, former address and former fiscal year, if changed
since last report)
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
--- ---
The number of shares of Common Stock, $.10 par value per share,
outstanding as of November 8, 1994 was 16,105,838.
<PAGE> 2
GROW GROUP, INC.
INDEX
PART I. FINANCIAL INFORMATION PAGE NUMBER
Item 1. Financial Statements
Consolidated Condensed Balance Sheet 3
(Unaudited) - September 30, 1994 and
June 30, 1994
Consolidated Condensed Statement of 4
Operations (Unaudited) - Three Months
Ended September 30, 1994 and
September 30, 1993
Consolidated Condensed Statement of 5
Cash Flows (Unaudited) - Three Months
Ended September 30, 1994 and
September 30, 1993
Notes to Consolidated Condensed 6
Financial Statements (Unaudited)
2
<PAGE> 3
<TABLE>
<CAPTION>
PART I: FINANCIAL INFORMATION
GROW GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE
SHEET (UNAUDITED) Sept June
30, 30,
1994 1994
-------- --------
(In thousands)
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 14,922 $ 38,816
Accounts receivable less allowances
of $4,537 and $3,667 74,134 69,622
Inventories, at lower of cost or market:
Finished and in-process products 64,834 48,490
Materials, containers and supplies 17,379 14,413
-------- --------
82,213 62,903
Prepaid expenses and other current
assets 19,069 16,052
-------- --------
Total current assets 190,338 187,393
PROPERTY, PLANT AND EQUIPMENT, at cost 133,122 99,331
Less allowance for depreciation 50,025 48,524
-------- --------
83,097 50,807
OTHER ASSETS 25,049 9,721
-------- --------
TOTAL ASSETS $298,484 $247,921
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 45,658 $ 37,532
Accrued expenses 42,163 29,036
Income taxes 10,086 10,180
Dividend payable 1,127 1,128
Current installments on long-term debt 2,821 2,270
-------- --------
Total current liabilities 101,855 80,146
DEFERRED INCOME TAXES AND OTHER LIABILITIES 27,913 28,178
LONG-TERM DEBT 26,889 914
STOCKHOLDERS' EQUITY
Common stock, par value $.10 per share:
Authorized 50,000,000 shares;
issued 16,271,831 shares 1,627 1,627
Less treasury stock at cost
(165,993 and 168,493 shares) (1,325) (1,345)
Paid-in-capital 123,431 123,428
Equity adjustments (18) (49)
Deferred compensation (2,826) (2,907)
Retained earnings 20,938 17,929
-------- --------
141,827 138,683
-------- --------
TOTAL LIABILITIES AND $298,484 $247,921
STOCKHOLDERS' EQUITY ======== ========
</TABLE>
3
<PAGE> 4
GROW GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS (UNAUDITED)
(In thousands except per share data)
<TABLE>
<CAPTION>
Three Months Ended
September 30
1994 1993
---------- ----------
<S> <C> <C>
Revenues $126,173 $103,928
Costs and expenses:
Cost of products sold 79,746 65,633
Research and development 1,464 1,165
Storage and delivery 4,362 3,877
Selling and administrative 33,157 26,238
Interest expense 464 226
Corporate interest income (151) (279)
---------- ----------
Total costs and expenses 119,042 96,860
---------- ----------
Income before income taxes 7,131 7,068
Income taxes (2,995) (2,969)
---------- ----------
Net Income $ 4,136 $ 4,099
========== ==========
Net income per common and
common equivalent share $0.26 $0.25
========== ==========
Average number of shares 16,170,000 16,093,000
========== ==========
Cash dividends per share (common) $0.07 $0.07
========== ==========
</TABLE>
4
<PAGE> 5
GROW GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENT OF CASH FLOWS (UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended
September 30
1994 1993
-------- --------
(In thousands)
<S> <C> <C>
Operating Activities
Net income $ 4,136 $ 4,099
Adjustments to reconcile net income
to net cash provided (used)
by operating activities:
Depreciation, amortization and
provision for doubtful accounts 2,627 2,286
Changes in operating assets and
liabilities-net 1,585 (7,973)
Other (337) 199
-------- --------
Net cash provided by
operating activities 8,011 (1,389)
Investing Activities
Purchase of property, plant and
equipment - net of disposals (1,940) (1,398)
Acquisition of Sinclair (1994) and
Zynolyte (1993) (55,387) (16,300)
-------- --------
Net cash used by
investing activities (57,327) (17,698)
Financing Activities
Proceeds from borrowing/payments of
debt - net 26,526 (4,798)
Proceeds from issuance of common stock 23 0
Cash dividends (1,127) (1,121)
Net cash provided (used) by -------- --------
financing activities 25,422 (5,919)
-------- --------
(Decrease) in cash and
cash equivalents (23,894) (25,006)
Cash and cash equivalents at beginning
of period 38,816 56,015
-------- --------
Cash and cash equivalents at end
of period $ 14,922 $ 31,009
======== ========
</TABLE>
5
<PAGE> 6
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(UNAUDITED)
a. The accompanying unaudited consolidated condensed financial statements have
been prepared in accordance with generally accepted accounting principles for
interim financial information and with the instructions to Form 10-Q and
Regulation S-X. Accordingly, they do not include all the information and
footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments (consisting
of normal recurring accruals) considered necessary for a fair presentation have
been included. Operating results for the three months ended September 30, 1994
are not necessarily indicative of the results that may be expected for the year
ending June 30, 1995. For further information, refer to the consolidated
financial statements and footnotes thereto included in the Company's Annual
Report on Form 10-K for the year ended June 30, 1994.
b. Effective August 2, 1993, the Company purchased all of the outstanding
capital stock of Zynolyte Products Company ("Zynolyte") for $16,300,000 in cash.
Zynolyte is a producer of aerosol and specialty brush-applied paint products.
Its annual revenues were approximately $27 million for the year ended January
31, 1993.
c. Effective August 1, 1994, the Company acquired substantially all of the
assets and assumed certain liabilities of Sinclair Paint Company ("Sinclair"), a
division of Insilco Corporation, for approximately $55 million in cash.
Sinclair's revenues for calendar year 1993 amounted to approximately $95
million. The transaction resulted in approximately $15 million in cost in excess
of net assets acquired which is being amortized over 40 years. In connection
with the acquisition, the Company's revolving loan facility was increased from
$40 million to $60 million and $26 million was borrowed thereunder.
The following unaudited pro forma summary presents the consolidated
results of operations as if the acquisition of Sinclair had occurred at the
beginning of the periods presented and does not purport to be indicative of what
would have occurred had the acquisition been made as of those dates or of
results which may occur in the future.
<TABLE>
<CAPTION>
For the Three Months
Ended September 30
1994 1993
-------- --------
<S> <C> <C>
Revenues $136,428 $131,507
======== ========
Net income 4,714 4,287
======== ========
Net income per common
and common equivalent
share 0.29 0.29
======== ========
</TABLE>
6
<PAGE> 7
d. On October 24, 1994, the Company announced the execution of a letter of
intent to acquire the retail business and certain assets and to assume certain
liabilities of Martin Paint Company ("Martin"). Martin operates a chain of 42
paint and home decorating stores with revenues of approximately $40 million.
SIGNATURE
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.
GROW GROUP, INC.
Date: March 10, 1994
By: /s/ Frank V. Esser
--------------------------
Frank V. Esser, Treasurer
(Chief Financial and Chief
Accounting Officer)
7
