<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 December 31, 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 February 1, 1995 was 16,102,713.
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GROW GROUP, INC.
INDEX
PART I. FINANCIAL INFORMATION PAGE NUMBER
Item 1. Financial Statements
Consolidated Condensed Balance Sheet 3
(Unaudited) - December 31, 1994 and
June 30, 1994
Consolidated Condensed Statement of 4
Operations (Unaudited) - Six Months
and Three Months Ended December 31, 1994
and December 31, 1993
Consolidated Condensed Statement of 5
Cash Flows (Unaudited) - Six Months
Ended December 31, 1994 and
December 31, 1993
Notes to Consolidated Condensed 6
Financial Statements (Unaudited)
2
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PART I: FINANCIAL INFORMATION
GROW GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE
SHEET (UNAUDITED)
<TABLE>
<CAPTION>
December June
31, 30,
1994 1994
-------- --------
(In thousands)
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 6,955 $ 38,816
Accounts receivable less allowances
of $4,263 and $3,667 64,557 69,622
Inventories, at lower of cost or market:
Finished and in-process products 64,857 48,490
Materials, containers and supplies 17,160 14,413
-------- --------
82,017 62,903
Prepaid expenses and other current
assets 16,728 16,052
-------- --------
Total current assets 170,257 187,393
PROPERTY, PLANT AND EQUIPMENT, at cost 134,286 99,331
Less allowance for depreciation 51,605 48,524
-------- --------
82,681 50,807
OTHER ASSETS 24,829 9,721
-------- --------
TOTAL ASSETS $277,767 $247,921
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 33,186 $ 37,532
Accrued expenses 36,542 29,036
Income taxes 4,901 10,180
Dividend payable 1,127 1,128
Current installments on long-term debt 3,215 2,270
-------- --------
Total current liabilities 78,971 80,146
DEFERRED INCOME TAXES AND OTHER LIABILITIES 27,941 28,178
LONG-TERM DEBT 28,861 914
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) (1,344) (1,345)
Paid-in-capital 123,432 123,428
Equity adjustments (51) (49)
Deferred compensation (2,761) (2,907)
Retained earnings 21,091 17,929
-------- --------
141,994 138,683
-------- --------
TOTAL LIABILITIES AND $277,767 $247,921
STOCKHOLDERS' EQUITY ======== ========
</TABLE>
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GROW GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS (UNAUDITED)
(In thousands except per share data)
<TABLE>
<CAPTION>
Six Months Ended Three Months Ended
December 31 December 31
1994 1993 1994 1993
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Revenues $246,239 $197,386 $120,066 $93,458
Costs and expenses:
Cost of products sold 157,300 124,699 77,554 59,066
Research and development 2,986 2,313 1,522 1,148
Storage and delivery 8,705 7,837 4,343 3,960
Selling and administrative 66,893 52,202 33,736 25,964
Interest expense 1,164 448 700 222
Corporate interest income (208) (483) (57) (204)
Unusual Item 60 60
---------- ---------- ---------- ----------
Total costs and expenses 236,900 187,016 117,858 90,156
---------- ---------- ---------- ----------
Income before income taxes 9,339 10,370 2,208 3,302
Income taxes (3,922) (4,355) (927) (1,386)
---------- ---------- ---------- ----------
Net Income $ 5,417 $ 6,015 $ 1,281 $ 1,916
========== ========== ========== ==========
Net income per common and
common equivalent share $.34 $.37 $.08 $.12
========== ========== ========== ==========
Average number of shares 16,148,000 16,085,000 16,137,000 16,091,000
========== ========== ========== ==========
Cash dividends per share
(common) $.14 $.14 $.07 $.07
========== ========== ========== ==========
</TABLE>
4
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GROW GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENT OF CASH FLOWS (UNAUDITED)
<TABLE>
<CAPTION>
Six Months Ended
December 31
1994 1993
-------- --------
(In thousands)
<S> <C> <C>
Operating Activities
Net income $ 5,417 $ 6,015
Adjustments to reconcile net income
to net cash provided (used)
by operating activities:
Depreciation, amortization and
provision for doubtful accounts 4,615 4,575
Changes in operating assets and
liabilities-net (9,590) (10,839)
Other (339) 184
-------- --------
Net cash provided (used) by
operating activities 103 (65)
Investing Activities
Purchase of property, plant and
equipment - net of disposals (3,219) (2,480)
Acquisition of Sinclair (1994) and
Zynolyte (1993) (55,387) (16,300)
-------- --------
Net cash used by
investing activities (58,606) (18,780)
Financing Activities
Proceeds from borrowing/payments of
debt - net 28,892 (4,912)
Proceeds from issuance of common stock 5 623
Cash dividends (2,255) (2,293)
-------- --------
Net cash provided (used) by
financing activities 26,642 (6,582)
-------- --------
(Decrease) in cash and
cash equivalents (31,861) (25,427)
Cash and cash equivalents at beginning
of period 38,816 56,015
-------- --------
Cash and cash equivalents at end
of period $ 6,955 $ 30,588
======== ========
</TABLE>
5
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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 month and six month periods ended
December 31, 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, with Chemical Bank
as agent, was increased from $40 million to $60 million and $26 million was
borrowed thereunder. During the quarter ended December 31, 1994, the revolving
loan facility was increased to $75 million and Wells Fargo Bank became a
participant.
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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 Six Months For the Three
Ended December 31 Months Ended
1993 1994 December 31, 1993
-------- -------- -----------------
<S> <C> <C> <C>
Revenues $256,314 $247,448 $116,391
======== ======== ========
Net income 6,055 5,197 940
======== ======== ========
Net income per
common and common
equivalent share 0.37 0.32 0.06
======== ======== ========
</TABLE>
d. On November 16, 1994, the Company announced the execution of a letter of
intent to acquire Manhattan Products, Inc., a manufacturer of household products
with annual revenues of approximately $22 million. The Company has also executed
a letter of intent in connection with a small acquisition in Spain.
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
by the undersigned thereunto duly authorized.
GROW GROUP, INC.
Date: March 10, 1995 By: /s/ Frank V. Esser
--------------------------
Frank V. Esser, Treasurer
(Chief Financial and Chief
Accounting Officer)
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