<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ending September 30, 1997
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 33-88526
GRIFFITH CONSUMERS COMPANY
CARL KING, INC.
FREDERICK TERMINALS, INC.
(Exact name of registrants as specified in their charters)
Delaware 52-1887726
Delaware 04-2941998
Maryland 52-1863759
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
Griffith Consumers Company Carl King, Inc.
Frederick Terminals, Inc. 2336 Goddard Parkway
2510 Schuster Drive Salisbury, Maryland 21801
Cheverly, Maryland 20781 (410) 860-0400
(301) 322-3111
(Address, including zip code, and telephone number, including
area code, of registrants' principal executive offices)
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 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. X Yes No
--- ---
As of November 14, 1997, the Issuers had the following number of shares of
common stock outstanding:
Griffith Consumers Company : 1,000 shares
Carl King, Inc. : 1,000 shares
Frederick Terminals, Inc. : 500 shares
<PAGE>
Griffith Consumers Company and Subsidiaries
September 30, 1997
Index
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
A. Consolidated Balance Sheets
September 30, 1997 and June 30, 1997.......... 3 - 4
B. Consolidated Statements of Operations
Three months ended September 30, 1997
and 1996...................................... 5
C. Consolidated Statements of Changes in
Shareholder's Equity.......................... 6
D. Consolidated Statements of Cash Flows
Three months ended September 30, 1997
and 1996...................................... 7
E. Notes to Consolidated Financial
Statements.................................... 8 - 15
Item 2. Management's Discussion and Analysis.............16 - 21
PART II. OTHER INFORMATION
Item 1. Legal Proceedings....................................... 22
Item 2. Changes in Securities................................... 22
Item 3. Defaults upon Senior Securities......................... 22
Item 4. Submission of Matters to a Vote of
Security Holders........................................ 22
Item 5. Other Information....................................... 22
Item 6. Exhibits and Reports on Form 8-K........................ 22
Signatures................................................................ 23
2
<PAGE>
GRIFFITH CONSUMERS COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
SEPTEMBER 30, JUNE 30,
1997 1997
---------------- --------------
(Unaudited)
<S> <C> <C>
ASSETS:
CURRENT ASSETS
CASH................................................... $ 1,938,842 $ 3,212,107
ACCOUNTS AND NOTES RECEIVABLE,
LESS ALLOWANCE FOR BAD DEBTS.......................... 9,542,563 11,182,949
PETROLEUM PRODUCTS INVENTORY........................... 1,837,444 1,704,747
REPAIR PARTS AND SUNDRY INVENTORY...................... 3,341,268 3,294,711
PREPAID EXPENSES AND OTHER............................. 1,659,297 1,336,380
INCOME TAXES RECEIVABLE................................ 1,124,809 95,603
OTHER TAXES RECEIVABLE................................. 594,301 906,050
DEFERRED TAX ASSET..................................... 1,681,932 1,399,424
---------------- ---------------
TOTAL CURRENT ASSETS.................................... 21,720,456 23,131,971
PROPERTY, PLANT AND EQUIPMENT
LAND................................................... $ 5,622,871 $ 5,622,871
BUILDINGS.............................................. 3,979,731 3,979,731
MACHINERY AND EQUIPMENT................................ 25,869,248 25,032,748
---------------- ---------------
35,471,850 34,635,350
LESS: ACCUMULATED DEPRECIATION......................... 13,001,955 11,523,797
---------------- ---------------
22,469,895 23,111,553
INTANGIBLES--NOTE C.....................................
CUSTOMER AND SERVICE ACCOUNTS.......................... 39,867,186 39,867,186
COVENANTS NOT TO COMPETE............................... 3,286,824 3,286,824
GOODWILL............................................... 49,249,316 49,249,315
OTHER INTANGIBLES...................................... 435,224 423,045
---------------- ---------------
92,838,550 92,826,370
LESS: ACCUMULATED AMORTIZATION......................... 20,778,452 18,863,920
---------------- ---------------
72,060,098 73,962,450
LONG-TERM NOTES RECEIVABLE.............................. 1,318,975 990,694
DEFERRED DEBT COSTS & OTHER............................. 3,877,062 4,080,416
---------------- ---------------
TOTAL ASSETS............................................ $ 121,446,486 $ 125,277,084
---------------- ---------------
---------------- ---------------
</TABLE>
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
3
<PAGE>
GRIFFITH CONSUMERS COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
SEPTEMBER 30, JUNE 30,
1997 1997
---------------- --------------
(Unaudited)
<S> <C> <C>
LIABILITIES AND SHAREHOLDER'S EQUITY:
CURRENT LIABILITIES:
ACCOUNTS PAYABLE.............................................. $ 7,740,122 $ 8,708,702
ACCRUED EXPENSES.............................................. 4,189,764 3,400,181
DEFERRED REVENUE.............................................. 5,151,309 3,189,405
OTHER TAXES PAYABLE........................................... 2,349,029 1,536,084
CURRENT PORTION OF LONG-TERM DEBT-NOTE F...................... 2,009,573 5,448,956
---------------- --------------
TOTAL CURRENT LIABILITIES...................................... 21,439,797 22,283,328
LONG-TERM DEBT, LESS CURRENT PORTION-NOTE F.................... 85,765,623 85,107,114
DEFERRED REVENUE............................................... 969,414 1,089,414
DEFERRED INCOME TAXES.......................................... 5,614,314 5,882,534
POST-RETIREMENT EMPLOYEE BENEFITS AND OTHER.................... 1,803,830 1,803,830
---------------- --------------
TOTAL LIABILITIES.............................................. 115,592,978 116,166,220
SHAREHOLDER'S EQUITY
COMMON STOCK, par value $.01 per share,
1,000 shares, authorized, issued and
outstanding.................................................. 10 10
ADDITIONAL PAID-IN CAPITAL.................................... 20,691,314 20,691,314
RETAINED DEFICIT.............................................. (14,837,816) (11,580,460)
---------------- --------------
TOTAL SHAREHOLDER'S EQUITY..................................... 5,853,508 9,110,864
---------------- --------------
TOTAL LIABILITIES AND SHAREHOLDER'S EQUITY..................... $ 121,446,486 $ 125,277,084
---------------- --------------
---------------- --------------
</TABLE>
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
4
<PAGE>
GRIFFITH CONSUMERS COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
JUL 1, 1997 - JUL 1, 1996 -
SEP 30, 1997 SEP 30, 1996
(Unaudited) (Unaudited)
------------- -------------
<S> <C> <C>
SALES FROM PETROLEUM PRODUCTS............................ $ 51,590,950 $ 48,003,377
SERVICE, EQUIPMENT, AND OTHER SALES...................... 14,886,178 12,538,157
------------- -------------
TOTAL SALES............................................ 66,477,128 60,541,534
COST OF SALES............................................ 54,965,894 49,997,807
------------- -------------
GROSS PROFIT........................................... 11,511,234 10,543,727
SELLING, GENERAL, AND ADMINISTRATIVE
EXPENSES............................................... 10,730,740 9,368,457
DEPRECIATION EXPENSE..................................... 1,551,814 1,292,282
AMORTIZATION EXPENSE..................................... 2,061,584 1,942,484
------------- -------------
OPERATING LOSS......................................... (2,832,904) (2,059,496)
INTEREST EXPENSE...................................... 2,717,041 2,588,448
OTHER INCOME.......................................... 510,144 444,915
------------- -------------
LOSS BEFORE INCOME TAX................................. (5,039,801) (4,203,029)
INCOME TAX BENEFIT.................................... (1,782,445) (1,513,491)
------------- -------------
NET LOSS............................................... $ (3,257,356) $ (2,689,538)
------------- -------------
------------- -------------
</TABLE>
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
5
<PAGE>
GRIFFITH CONSUMERS COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDER'S EQUITY
(Unaudited)
<TABLE>
<CAPTION>
Additional Retained Total
Common Paid-in Earnings Shareholder's
Shares Stock Capital (Deficit) Equity
----------- ------------- ------------ ------------- ------------
<S> <C> <C> <C> <C> <C>
Balance June 30, 1996............................. 1,000 10 20,691,314 (5,132,900) 15,558,424
Net Loss.......................................... -- -- -- (6,447,560) (6,447,560)
----------- ------------- ------------ ------------- ------------
Balance June 30, 1997............................. 1,000 10 20,691,314 (11,580,460) 9,110,864
Net Loss.......................................... -- -- -- (3,257,356) (3,257,356)
----------- ------------- ------------ ------------- ------------
Balance September 30, 1997........................ 1,000 10 20,691,314 (14,837,816) 5,853,508
----------- ------------- ------------ ------------- ------------
----------- ------------- ------------ ------------- ------------
</TABLE>
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
6
<PAGE>
GRIFFITH CONSUMERS COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
July 1, 1997 July 1, 1996
through through
September 30, 1997 September 30, 1996
------------------ ------------------
<S> <C> <C>
Operating activities
Net loss................................................................ ($ 3,257,355) ($ 2,689,538)
Adjustments to reconcile net loss to net cash
provided by (used in) operating activities:
Depreciation......................................................... 1,551,814 1,292,282
Amortization......................................................... 2,061,584 1,942,484
Provision for bad debts.............................................. 88,500 63,514
Amortization of bond discount........................................ 45,527 45,527
Gain on sale of property, plant, equipment, and intangibles.......... (38,220) (77,577)
Changes in operating assets and liabilities
Accounts and notes receivable..................................... 1,223,605 1,989,253
Inventory......................................................... (179,254) (2,478,829)
Prepaid expenses and other........................................ (322,917) (303,243)
Refundable Income taxes, net...................................... (999,965) (1,275,705)
Other assets...................................................... 44,122 839,519
Accounts payable.................................................. (968,581) 1,653,015
Accrued expenses.................................................. 509,583 959,177
Deferred revenue.................................................. 2,931,318 1,407,571
Other liabilities................................................. (264,689) 542,988
------------------ ------------------
Net cash provided by operating activities............................... 2,425,072 3,910,438
Investing activities
Purchases of property, plant, and equipment............................ (951,322) (318,844)
Proceeds from sale of property, plant, and equipment,
and intangible assets................................................ 79,386 275,659
Acquisition of business................................................ -- (17,418,500)
Acquisition costs...................................................... -- (2,050,000)
------------------ ------------------
Net cash used in investing activities.................................. (871,936) (19,511,685)
Financing activities
Proceeds from (payment of) line of credit.............................. (2,600,000) (2,600,000)
Proceeds from term loans............................................... 250,000 21,850,000
Payments on long-term debt............................................. (476,401) (1,225,860)
------------------ ------------------
Net cash (used in)provided by financing activities..................... (2,826,401) 18,024,140
------------------ ------------------
(Decrease) Increase in cash............................................ (1,273,265) 2,422,893
Cash at beginning of period............................................... 3,212,107 1,687,443
------------------ ------------------
Cash at end of period..................................................... $ 1,938,842 $ 4,110,336
------------------ ------------------
------------------ ------------------
</TABLE>
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
7
<PAGE>
Griffith Consumers Company And Subsidiaries
September 30, 1997
Notes to Consolidated Financial Statements
Note A--Introduction
On December 15, 1994, the transaction contemplated by the merger agreement
("Merger Agreement") dated August 26, 1994 between Griffith Consumers Company
("Griffith", and together with its consolidated subsidiaries, the "Company")
and Griffith Holdings, Inc. ("GHI"), a corporation previously unrelated to
the Company, closed, whereby GHI acquired all of Griffith's 2,360,000
outstanding shares of common stock (the "Common Stock") for $23.00 cash per
share. Pursuant to the Merger Agreement, ABC Acquisition Corp. ("ABC"), a
wholly owned subsidiary of GHI, merged with and into Griffith, and each share
of Griffith's common stock was converted into the right to receive $23.00 in
cash (the "1994 Acquisition"). As a result of the 1994 Acquisition, Griffith
became a wholly owned subsidiary of GHI.
The 1994 Acquisition has been accounted for under the purchase method of
accounting as of December 16, 1994. Accordingly, GHI has allocated its total
purchase cost of approximately $54,280,000 to the assets and liabilities of
the Company based upon the fair value of these assets and liabilities. The
fair values assigned on the Company's December 16, 1994 balance sheet were
adjusted when valuation studies were completed.
On July 11, 1996, the Company acquired certain assets used in the operations
of a chain of convenience stores and retail gasoline stations within the
states of Maryland, Delaware, and Virginia under the "Shore Stop" trade name
and a dealer petroleum sales business at two facilities located in Virginia
and Maryland (the "Shore Stop Acquisition") from Regent Investments, Inc.,
Delaware Investments, Inc., and Mid-Atlantic Investments, Inc., each a
Virginia corporation (collectively, the "Sellers"). The Company paid the
Sellers $17,000,000 (plus the purchase price of certain inventory), subject
to certain adjustments, of which $1,500,000 was in the form of a promissory
note (the "Regent Note") secured by first priority mortgages or deeds of
trust on certain stores. In addition, the Company also assumed $350,000 of
debt. The acquisition was financed through an amendment and restatement of
the Company's prior credit agreement ("Prior Credit Agreement", and as
amended and restated, "Credit Agreement"). See Note F - Debt.
Note B--Basis of Presentation
The accompanying unaudited consolidated financial statements have been
prepared in accordance with generally accepted accounting
8
<PAGE>
principles ("GAAP") for interim financial information and with the
instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly,
they do not include all of the information and footnotes required by GAAP for
complete financial statements. In the opinion of management, all adjustments
considered necessary for the fair presentation of the consolidated financial
statements have been included and are of a normal and recurring nature.
Operating results for the three months ended September 30, 1997 do not
necessarily indicate the results that may be expected for the fiscal year ending
June 30, 1998. For further information with respect to the effect of
seasonality on the Company's financial results, please refer to the financial
statements and footnotes included in the Company's Form 10-K for the year ended
June 30, 1997.
Note C--Significant Accounting Policies
Intangible Assets: Customer and service accounts obtained through
acquisitions are amortized over their estimated useful lives of eight years.
Other identified intangibles are amortized over periods not exceeding ten
years. Covenants not to compete are amortized over the period stated in the
agreements. Goodwill is being amortized over a thirty year period except the
goodwill related to the Shore Stop Acquisition which is amortized over 15
years. All intangible assets are amortized using the straight-line method.
The Company adopted Statement of Financial Accounting Standards No. 121,
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets
to be Disposed of" (SFAS No. 121). This statement establishes accounting
standards for the impairment of long-lived assets, certain identifiable
intangibles, and goodwill related to those assets to be held and used for
long-lived assets and certain identifiable intangibles to be disposed of.
SFAS No. 121 requires these assets to be reviewed for possible impairment
whenever events or changes in circumstances indicate that the carrying amount
may not be recoverable. The Company evaluates the potential impairment of
intangibles and other long-lived assets by comparing the related undiscounted
cash flow from operations to the net book value of such assets. Any
impairment would be the excess of net book value over discounted future cash
flow from operations. For these purposes, the related cash flow is the
earnings before taxes, depreciation, amortization, and interest attributable
to the intangibles and other long-lived assets whose impairment is being
assessed.
Debt Issuance Costs: The costs associated with the issuance of term debt are
amortized utilizing the effective interest method over the term of the
underlying debt instrument. The terms of the Company's existing debt, incurred
in December 1994 and July 1996, range from six to ten years.
9
<PAGE>
Income Taxes: Deferred income taxes are provided for the temporary
differences between the financial statements and the tax basis of assets and
liabilities, except for goodwill which is not deductible for tax purposes.
Deferred income taxes relate to primarily goodwill related to the 1994
Acquisition, depreciation associated with property, plant, and equipment,
allowances for bad debts and various accruals of salaries and related
benefits.
Note D--Acquisitions--Allocation of Purchase Price
The Company made no material acquisitions during the first three months of
fiscal year 1998. During the first three months of fiscal year 1997, the Company
consummated the Shore Stop Acquisition and acquired the assets of a retail
heating oil company. These acquisitions were accounted for as purchase
transactions and, therefore, the financial statements include the results of
operations of each acquired company from its acquisition date. The cost of the
acquisitions for the three months ended September 30, 1996:
Property, plant, and equipment......................... $ 5,808,500
Customer and service
accounts............................................. 2,430,000
Covenants not to compete............................... 200,000
Other Intangibles,
primarily goodwill................................... 8,980,000
-----------
$17,418,500
-----------
-----------
Note E--Shore Stop Acquisition--Unaudited Pro Forma
The following condensed presentation of unaudited pro forma information was
prepared to illustrate the estimated effects of the Shore Stop Acquisition on
the Company with the assumption that the Shore Stop Acquisition occurred at July
1, 1996:
(000's)
Unaudited
Three Months Ended
September 30,
-------------------------
1997 1996
-------------------------
Total Sales.............................. $66,477 $63,411
Net Loss................................. (3,257) (2,686)
10
<PAGE>
Note F -- Debt
In connection with the 1994 Acquisition, the Company retired the predecessor's
existing operating line of credit and primary bank term loan and negotiated a
new term loan and operating line of credit with the Company's primary bank
lender (the "Prior Credit Agreement"). Mortgage notes of the predecessor(the
"Mortgage Notes") on several properties located in Delaware, Maryland and West
Virginia were assumed by the Company. As of July 8, 1996, in connection with
funding of the Shore Stop Acquisition, the Company amended and restated the
Prior Credit Agreement (as amended and restated, the "Credit Agreement") to
increase the amount of term loan borrowings outstanding thereunder from
$34,450,000 to $54,450,000 and the amount of revolving credit facility
borrowings (including the maximum drawing amount under outstanding letters of
credit) available from $12,000,000 to $13,000,000. Borrowings under the Credit
Agreement are secured by a first lien on substantially all the assets of the
Company, except those properties located in Delaware, Maryland and West Virginia
securing the Mortgage Notes and those properties located in Delaware, Maryland,
and Virginia securing the Regent Note. Borrowings under the Credit Agreement
are subordinated to the Mortgage Notes and Regent Note on these properties. As
of September 30, 1997, the amount of the revolving credit facility borrowings
outstanding was $3,800,000 and the maximum drawing amount under outstanding
letters of credit was $3,191,000. From July 1, 1997 to September 30, 1997, the
Company has paid $1,147,000 of interest and $403,000 of principal on the term
loan under the Credit Agreement.
The Credit Agreement contains various provisions regarding events of default and
restrictive covenants, including, among others, restrictions on new liens and
indebtedness, restrictions on the sale of assets, restrictions on mergers and
consolidations, and a prohibition on the payment of dividends. In addition, at
the end of each quarter and/or fiscal year-end, the Company is required to
maintain a certain cumulative cash flow coverage ratio, minimum tangible net
worth, minimum working capital, specified maximum ratio of funded debt to
earnings before interest, taxes, depreciation and amortization ("EBITDA") and
debt service coverage ratio.
In addition to borrowings under the Prior Credit Agreement, the Company
financed the 1994 Acquisition with $34 million of 14 1/2% Senior Subordinated
Notes due December 15, 2004 (the "Notes"). Interest on the Notes is payable
semiannually on June 15 and December 15 of each year. The Notes are
subordinated to all existing and future senior indebtedness of the Company.
The Indenture governing the Notes (the "Indenture") contains certain
restrictive covenants and financial covenants similar to the Credit Agreement.
The Company has amended the Prior Credit Agreement, (including its amendment
and restatement in connection with the Shore Stop Acquisition) the Credit
11
<PAGE>
Agreement and the Indenture on several occasions during the fiscal years
ended prior to June 30, 1997, which among other things, revised certain
financial covenants contained therein. On August 29, 1997 the Company amended
the Credit Agreement to increase the amount of term loan borrowings then
outstanding thereunder from $49,850,000 to $50,100,00. The amendment also
revised certain financial covenants contained therein and the term loan
repayment schedule. On September 26, 1997, the Company further amended the
Credit agreement to revise the definition of eligible petroleum inventory,
which term is used in calculating borrowing base. The Company is currently
in compliance with the Credit Agreement and the Indenture, as amended.
Note G--Related Party Transactions
A management and consulting fee and expense reimbursements are paid to entities
owned by certain of the current directors and controlling shareholders. The
Company paid $75,000 of management and consulting fees for the first three
months of fiscal years 1998 and 1997.
Note H--Seasonality of Revenue and Cost of Goods Sold
The Company's heating oil sales volume is highly seasonal. Sales volume of
motor fuels is also seasonal, although it varies less than heating oil on a
month to month basis. The seasonality affects both revenue and cost of goods
sold; therefore, interim results are not indicative of the estimated results
for a full year.
Note I--Environmental Regulations
Management believes that the environmental reserve is sufficient to cover all
known liabilities under which it is probable that the Company will be obligated
to undertake remediation. Management's assessment of the environmental
liability is based, in part, on two comprehensive environmental studies
conducted on different segments of the Company's business by independent
environmental consultants that were completed during fiscal year 1995 and fiscal
year 1996. Management is not aware of any additional significant environmental
exposures since the completion of these studies.
The Company maintains a program to routinely detect releases of gasoline or
other regulated substances from underground storage tanks it owns or
operates. The Company employs groundwater monitoring wells and/or
sophisticated in-tank monitoring devices at a majority of its Company
operated stations and this information is available on-line through the
computer at the Company's headquarters. Management believes that contingent
liabilities other than those recorded in the financial statements will not have
12
<PAGE>
a material adverse effect on the Company's financial position or results of
operations.
Note J--Subsidiaries, Condensed Financial Statement Data
Griffith's wholly owned subsidiaries, Carl King, Inc. ("King"), Frederick
Terminals, Inc. ("Frederick"), and Shore Stop Corporation ("Shore Stop" and,
collectively with King and Frederick, the "Subsidiaries") are full,
unconditional joint and several guarantors on the Notes. The only subsidiaries
of Griffith are King, Frederick, Shore Stop, and Regent Transport, Inc. This
footnote sets forth the combined condensed balance sheet of King, Frederick, and
Shore Stop as of September 30, 1997 and June 30, 1997, the combined condensed
statements of operations and cash flows for the periods July 1, 1997 through
September 30, 1997 and the statement of changes in shareholder's equity from
June 30, 1996 to September 30, 1997.
In accordance with Staff Accounting Bulletin No. 55, the separate financial
statement data reflects all of the expenses that the Company incurred on each
Subsidiary's behalf. Except for certain general and administrative expenses and
income taxes, expenses are separately identifiable and, therefore, charged
directly to the respective Subsidiary. Common general and administrative
expenses are allocated based on management's assessment of the actual costs
associated with the operations; and income tax expense is provided in the
financial data on a separate return basis. Management believes that the methods
used to allocate expenses to each Subsidiary are reasonable.
13
<PAGE>
CARL KING, INC., FREDERICK TERMINALS, INC., AND SHORE STOP CORPORATION
COMBINED CONDENSED BALANCE SHEETS
<TABLE>
<CAPTION>
SEP 30 JUNE 30
1997 1997
(Unaudited)
------------- -------------
<S> <C> <C>
ASSETS:
Current assets................................... $ 8,429,499 $ 8,420,729
Net property, plant and equipment................ 19,042,989 19,322,128
Net intangibles.................................. 22,904,953 23,416,596
Other............................................ 2,222,598 2,372,638
------------- -------------
$ 52,600,039 $ 53,532,091
------------- -------------
------------- -------------
Liabilities and Shareholder's Equity:
Current liabilities................................ $ 11,031,028 $ 12,303,935
Due to Parents..................................... 3,404,927 4,142,706
Long-term debt, less current portion............... 35,756,331 34,681,538
Other liabilities.................................. 1,324,355 1,117,377
Shareholder's equity............................... 1,083,398 1,286,535
------------- -------------
$ 52,600,039 $ 53,532,091
------------- -------------
------------- -------------
</TABLE>
CARL KING, INC., FREDERICK TERMINALS, INC., AND SHORE STOP CORPORATION
COMBINED CONDENSED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
JUL 1, 1997 - JUL 1, 1996 -
SEP 30, 1997 SEP 30, 1996
(Unaudited) (Unaudited)
------------- -------------
<S> <C> <C>
Total sales.......................................... $ 53,343,712 $ 46,945,085
Cost of sales........................................ 45,248,522 39,367,135
------------- -------------
Gross profit...................................... 8,095,190 7,577,950
Selling, general, and administrative expenses........ 6,062,123 4,980,487
Depreciation expense................................. 1,167,179 940,174
Amortization expense................................. 581,450 513,959
------------- -------------
Operating income.................................. 284,438 1,143,330
Interest expense.................................. 1,016,327 978,655
Other income...................................... 414,611 280,154
------------- -------------
(Loss) Income before income tax................... (317,278) 444,829
Income tax (benefit) expense...................... (114,141) 202,886
------------- -------------
Net (loss) income................................. $ (203,137) $ 241,943
------------- -------------
------------- -------------
</TABLE>
14
<PAGE>
CARL KING, INC., FREDERICK TERMINALS, INC., AND SHORE STOP CORPORATION
COMBINED STATEMENTS OF CHANGES IN SHAREHOLDER'S EQUITY
Unaudited
<TABLE>
<CAPTION>
Investment Retained Total
By Earnings Shareholder's
Parent (Deficit) Equity
------------ -------------- -------------
<S> <C> <C> <C>
Balance June 30, 1996..................... 5,792,610 ($ 1,989,160) 3,803,450
Net loss................................... -- (2,516,915) (2,516,915)
------------ -------------- -------------
Balance June 30, 1997..................... $ 5,792,610 ($ 4,506,075) $ 1,286,535
Net loss................................... -- (203,137) (203,137)
------------ -------------- -------------
September 30, 1997........................ $ 5,792,610 ($ 4,709,212) $ 1,083,398
------------ -------------- -------------
------------ -------------- -------------
</TABLE>
CARL KING, INC., FREDERICK TERMINALS, INC., AND SHORE STOP CORPORATION
COMBINED CONDENSED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Jul 1, 1997- Jul 1, 1996-
Sep 30, 1997 Sep 30, 1996
(Unaudited) (Unaudited)
----------- -------------
<S> <C> <C>
Operating activities..................................... $ 508,399 ($ 2,317,550)
Investment activities.................................... (849,819) (19,302,422)
Financing activities..................................... (88,900) 21,485,432
----------- -------------
Increase in cash....................................... (430,320) (134,540)
Cash at beginning of year................................ 941,748 $ 953,234
----------- -------------
Cash at end of year...................................... $ 511,428 $ 818,694
----------- -------------
----------- -------------
</TABLE>
15
<PAGE>
Griffith Consumers Company and Subsidiaries
September 30, 1997
Management's Discussion and Analysis of
Financial Condition and Results of Operations
The fiscal year of Griffith Consumers Company ("Griffith", and together with its
subsidiaries, the "Company" or "Successor") ends June 30.
Overview
Except for historical information, statements in this Management's Discussion
and Analysis of Financial Condition and Results of Operations are forward
looking. In analyzing the results of the Company's operations, consideration
should be given to the seasonal nature of the heating oil business and
prevailing weather conditions, growth by acquisition, world oil market
conditions and the ability to pass on variations in wholesale petroleum costs to
customers. Financial results may vary from year-to-year as a result of these
factors. The Company undertakes no obligation and does not intend to update,
revise or otherwise publicly release the result of any revisions to any forward
looking statement contained herein that may be made to reflect future events or
circumstances.
The Company's heating oil operations are highly seasonal with approximately 75%
of heating oil revenues generated in the quarters ending December and March.
Sales from the Company's motor fuel operations are more evenly spread throughout
the year with some seasonal increases in the summer months. The Company's
heating oil sales volume fluctuates depending upon weather conditions. Colder
winter temperatures increase consumer demand.
In December 1994, Griffith Holdings, Inc. ("GHI"), a corporation previously
unrelated to the Company, acquired all of the 2,360,000 outstanding shares of
common stock of Griffith Consumers Company, a Maryland corporation ("Griffith
Maryland" and together with its consolidated subsidiaries, "Predecessor"), the
predecessor to Griffith. Pursuant to a merger agreement, ABC Acquisition Corp.,
a Maryland corporation ("ABC") and a wholly-owned subsidiary of GHI, merged with
and into Griffith Maryland. As a result of the merger, Griffith Maryland became
a wholly-owned subsidiary of GHI (the "1994 Acquisition"). Immediately
thereafter, Griffith Maryland merged with and into Griffith with Griffith as the
surviving corporation.
On July 11, 1996, the Company, through its wholly-owned subsidiary, Shore Stop
Corporation ("Shore Stop"), acquired certain assets ("Shore Stop Acquisition")
used in the operations of a chain of 49 convenience stores and retail gasoline
stations within the states
16
<PAGE>
of Maryland, Delaware, and Virginia, under the "Shore Stop" trade name and a
dealer petroleum sales business supplying 31 dealers from two facilities
located in Virginia and Maryland (the "Shore Stop Operations") from Regent
Investments, Inc., Delaware Investments, Inc. and Mid-Atlantic Investments,
Inc., each a Virginia corporation (collectively, the "Sellers"). The Company
paid the Sellers $17,000,000 (plus the purchase price of certain inventory),
subject to certain adjustments, of which $1,500,000 was in the form of a
promissory note (the "Regent Note") secured by first priority mortgages or
deeds of trust on certain stores. In addition, the Company also assumed
$350,000 of debt.
As a result of the Shore Stop Acquisition, the financial statements for the
three months ended September 30, 1997 are not directly comparable to the
consolidated financial statements of the Company for the three month period
ended September 30, 1996. The following discussion should be read in
connection with the historical financial information included in the
consolidated financial statements of the Company.
Results of Operations for Three Months Ended September 30 of 1997 Versus 1996
References to particular years, unless otherwise indicated, are references to
the first quarter of the fiscal year for the year indicated.
The net loss for 1998 was $3,257,000, compared to a net loss of $2,690,000 for
the same period in 1997. The increase in net loss was due primarily to the
reasons outlined below.
Total sales increased by $5,935,000 or 10% to $66,477,000 for 1998, from
$60,542,000 during 1996. The increase was primarily due to a 8% increase in
motor fuels volume and a 20% increase in sundry sales. Sundry sales increased
from $10,841,000 to $13,054,000. The sundry sales increase of $2,213,000 was
due primarily to the fact that there were 10 less days of Shore Stop
Operations in fiscal year 1997 because the Shore Stop Acquisition occurred on
July 11, 1996. In addition, Shore Stop and Carl King, Inc.("King") acquired
five additional gasoline stations in separate transactions at different times
and closed one station for a net increase of four stations in the period
subsequent to September 30, 1996 which also accounted for increased sales.
Cost of sales for 1998 was $54,966,000, an increase of $4,968,000, or 10%,from
1997. The increase in cost of sales was primarily due to a 8% and 2% increase in
the sales volume and cost per gallon, respectively, of motor fuels. In addition,
sundry cost of goods sold increased due to increased sundry sales.
Gross profit for 1998 was $11,511,000, an increase of $968,000, or 9%, from
1997. The increase is primarily due to the increased gross
17
<PAGE>
profit derived from increased sundry sales.
Selling, general and administrative expenses ("SG&A") were $10,731,000, an
increase of $1,362,000, or 15%, compared to 1997. The increase was due
primarily to increased operating costs related to 10 additional days of Shore
Stop Operations and a net increase of four stations from fiscal year 1997 to
fiscal year 1998. In addition, the increase is attributable to higher operating
costs associated with the increase in motor fuels volume in 1998 from 1997.
Depreciation expense for 1998 was $1,552,000, an increase of $260,000, or
20%, from 1997. Amortization expense for 1998 increased by $119,000, or 6%,
to $2,062,000. The increases were primarily related to an additional 10 days
of depreciation and amortization of assets acquired in the Shore Stop
Acquisition during 1998. Additionally, depreciation increased as a result of
the depreciation on assets acquired through capital expenditures made in the
twelve months ended September 30, 1997.
Financial Condition
Accounts and notes receivable decreased $1,640,000, or 15%, to $9,543,000 from
June 30, 1997. The decrease was due primarily to the seasonal nature of the
business.
Prepaid expenses and other increased $323,000, or 24%, to $1,659,000. The
increase is due primarily to an increase in prepaid insurance related to the
timing of the payment of business insurance premiums.
Income taxes receivable increased $1,029,000 from a refund due of $96,000 to a
refund due of $1,125,000 resulting from an income tax benefit related to the
loss before income tax for the first three months of fiscal year 1998.
Other taxes receivable decreased $312,000 from a refund due of $906,000 at June
30, 1997 to $594,000 at September 30, 1997 due to the receipt of motor fuel tax
refunds during 1998.
Deferred tax asset increased from $1,399,000 to $1,682,000 at September 30, 1997
due to certain temporary tax differences for warranty accrual, deferred revenue,
and other balance sheet items.
Accounts payable decreased $969,000 to $7,740,000. The decrease was primarily
due to the timing of vendor payments at the end of the quarter.
Accrued expenses increased $790,000 from $3,400,000 to $4,190,000. The increase
is due primarily to the increase in accrued interest
18
<PAGE>
related to the senior subordinated debt.
Short term deferred revenue increased by $1,962,000, or 62%, primarily due to an
increase in the prepaid balances of the Company's residential heating oil
customers on the Company's budget plan. As a result of the budget plan, most
budget plan customers have a prepaid balance for the first quarter of the fiscal
year. In addition, deferred revenue increased as a result of payments received
from major oil companies in connection with branding certain company-operated
gasoline stations.
Other taxes payable increased $813,000, or 53%, to $2,349,000 due primarily to
an increase in excise taxes due to states.
In August of 1997, the Company amended the Credit Agreement (as defined) to
increase the amount of term loan borrowings outstanding thereunder from
$49,850,000 to $50,100,000 and to revise the term loan repayment schedule and
certain financial covenants contained therein (the "August 1997 Amendment").
Current portion of long-term debt decreased $3,439,000 to $2,010,000
primarily due to the revision of the term debt payment schedule pursuant to
the August 1997 Amendment. Long term debt, less current portion increased
due to the revision of the term debt payment schedule and increased term loan
borrowings pursuant to the August 1997 Amendment, offset by the payment of
scheduled Credit Agreement principal payments.
Deferred income taxes decreased $269,000, or 5%, from $5,883,000 to $5,614,000
related primarily to the amortization of intangible assets relating to the 1994
Acquisition.
Liquidity and Capital Resources
The Company's cash requirements consist principally of working capital, payments
of principal and interest on its outstanding indebtedness, capital expenditures
and expenditures for acquisitions.
Net cash provided by operating activities was $2,425,000 for the three months
ended September 30, 1997 compared to $3,910,000 of net cash provided by
operating activities for the three months ended September 30, 1996, a decrease
of $1,485,000. Such decrease was primarily the result of an increase in net
loss, after adjusting for non-cash expenses, plus a net increase in operating
assets and liabilities, in 1998 from 1997.
Net cash used in investing activities decreased by $18,640,000 from $19,512,000
for the three months ended September 30, 1996 to $872,000 for the three months
ended September 30, 1997. The decrease was primarily the result of the Shore
Stop Acquisition which occurred in July 1996 and increased capital expenditures
in the first three months of fiscal year 1998.
19
<PAGE>
Net cash used in financing activities was $2,826,000 for the three months ended
September 30, 1997. Net cash provided by financing activities was $18,024,000
for the three months ended September 30, 1996. The decrease in cash provided
by financing activities was primarily the result of the financing of the Shore
Stop Acquisition in fiscal year 1997.
The Company believes that cash flow provided from operations, supplemented by
the Credit Agreement's revolving credit facility, will provide sufficient
funds to meet the Company's anticipated liquidity needs for current
operations and internal growth.
As of July 8, 1996, in connection with the Shore Stop Acquisition, the
Company amended and restated its then existing credit agreement (the "Prior
Credit Agreement"; and as amended and restated, the "Credit Agreement") to,
among other things, increase the amount of revolving credit facility
borrowings (including the maximum drawing amount under outstanding Letters of
Credit (as defined) available thereunder) from $12,000,000 to $13,000,000 and
the term loan thereunder from $34,450,000 to $54,450,000. The Credit
Agreement was subsequently amended by an amendment dated as of December 31,
1996 to, among other things, increase the amount of the revolving credit
facility provided thereunder from $13,000,000 to $16,000,000 during the
period from February 12, 1997 through March 31, 1997 and to revise certain
financial covenants contained therein. The Company again amended the Credit
Agreement and amended the Indenture (the "Indenture") governing the Company's
14 1/2% Senior Subordinated Notes due December 15, 2004 as of March 15, 1997
to revise certain financial covenants contained therein. In addition, the
Credit Agreement was amended as of August 29, 1997 to increase the amount of
term borrowings then outstanding thereunder from $49,850,000 to $50,100,00.
The August 1997 Amendment also revised certain financial covenants contained
therein and the Credit Agreement's term loan repayment schedule. On September
26, 1997, the Company further amended the Credit Agreement to revise the
definition of eligible petroleum inventory, which term is used in calculating
borrowing base. The Company is currently in compliance with the covenants
contained in the Credit Agreement and the Indentures as amended.
Under the Credit Agreement, at the Company's request, the agent for the lenders
from time to time issues letters of credit (the "Letters of Credit"). During the
period from July 1, 1997 through the date hereof, the Company's peak total usage
of the revolving credit facility was approximately $5.4 million in outstanding
borrowings and $3.6 million in maximum drawing amount under Letters of Credit.
At October 31, 1997, there was $3.7 million in borrowings and $3.2 million in
Letters of Credit outstanding with respect to the revolving credit facility,
leaving subject to meeting certain borrowing base tests, $6,100,000 available
for use thereunder. The revolving portion of the Credit Agreement expires in
1999 and the Company may be required to replace the revolving portion at such
time.
20
<PAGE>
The Company purchases petroleum products as necessary to meet the
delivery demands of its customers on a short-term basis. Thus, the Company
carries relatively small amounts of petroleum in inventory.
Certain sections of this Form 10-Q, including "Notes to Consolidated Financial
Statements" and "Management's Discussion and Analysis of Financial Condition and
Results of Operations," contain forward looking statements within the meaning of
Section 21E of the Securities Exchange Act of 1934, as amended, with respect to
the Company's expectations or beliefs concerning future events. The Company
cautions that these statements are further qualified by important factors that
could cause actual results to differ materially from those in the forward
looking statements. The forward looking statements include, without limitation,
the effects of seasonality on revenue and cost of goods sold, the amount of
reserves, the effect of contingent liabilities and the ability to meet the
Company's future operating cash requirements.
21
<PAGE>
Griffith Consumers Company and Subsidiaries
September 30, 1997
PART II. OTHER INFORMATION
1. Legal Proceedings
None
2. Changes in Securities
None
3. Defaults upon Senior Securities
None
4. Submission of Matters to a Vote of Security Holders
None
5. Other Information
None
6. Exhibits and Reports on Form 8-K
(a) Exhibits
4.23 Fourth Amendment to Fourth Amended and
Restated Revolving Credit and Term Loan
Agreement, dated September 26, 1997
by and among Griffith Consumers Company, Carl
King, Inc.,Shore Stop Corporation, BankBoston,
N.A., The Travelers Insurance Company, The
Travelers Indemnity Company, Senior Debt
Portfolio, Riggs Bank N.A.,CypressTree
Investment Management, Inc., CypressTree
Investment Partners I, LTD, and Deeprock &
Company, and BankBoston, N.A. as Agent.
(b) Report on Form 8-K
None
22
<PAGE>
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 on the 14th day of November 1997.
GRIFFITH CONSUMERS COMPANY
Registrant
/S/ Raymond R. McKenzie, Jr.
- ----------------------------
Raymond R. McKenzie, Jr., Vice
President Finance (Authorized Officer and
Principal Financial Officer)
CARL KING, INC.
Registrant
/S/ Raymond R. McKenzie, Jr.
- ----------------------------
Raymond R. McKenzie, Jr., Vice
President (Authorized Officer and
Principal Financial Officer)
FREDERICK TERMINALS, INC.
Registrant
/S/ Raymond R. McKenzie, Jr.
- ----------------------------
Raymond R. McKenzie, Jr., Secretary
(Authorized Officer and Principal
Financial Officer)
23
<PAGE>
Exhibit 4.23
FOURTH AMENDMENT TO THE
FOURTH AMENDED AND RESTATED
REVOLVING CREDIT AND TERM LOAN AGREEMENT
This FOURTH AMENDMENT to the Fourth Amended and Restated Revolving Credit
and Term Loan Agreement, dated as of September 26, 1997 ("Fourth Amendment"),
by and among (a) Griffith Consumers Company, Carl King, Inc., and Shore Stop
Corporation, each a Delaware corporation, (collectively, the "Borrowers"),
(b) BankBoston, N.A. (formerly known as The First National Bank of Boston),
The Travelers Insurance Company, The Travelers Indemnity Company, Senior Debt
Portfolio, Riggs Bank N.A., CypressTree Investment Management Company, Inc.
("CypressTree"), CypressTree Investment Partners I, Ltd. ("CypressTree I"),
and Deeprock & Company (collectively, the "Banks"), and (c) BankBoston, N.A.
as agent for the Banks (the "Agent").
WHEREAS, the Borrowers, the Banks and the Agent are parties to that
certain Fourth Amended and Restated Revolving Credit and Term Loan Agreement
dated as of July 8, 1996 (as amended and in effect prior to giving effect to
this Amendment, the "Credit Agreement"); and
WHEREAS, the Borrowers have requested and the Banks have agreed, subject
to the terms and conditions set forth herein, to modify certain provisions of
the Credit Agreement;
NOW, THEREFORE, the Borrowers, the Banks and the Agent hereby covenant
and agree as follows:
SECTION 1. Defined Terms. Capitalized terms which are used herein
without definition and which are defined in the Credit Agreement shall have
the same meanings herein as in the Credit Agreement.
SECTION 2. Amendment to the Credit Agreement. Section 1.1 (Definitions)
of the Credit Agreement is hereby further amended by modifying the proviso at
the end of the term Eligible Petroleum Inventory to read as follows:
"provided that Petroleum Product Inventory held for sale at retail outlets
and which would otherwise qualify as Eligible Petroleum Inventory may not be
included as Eligible Petroleum Inventory except during the period from and
including September 26, 1997 through and including December 31, 1997."
SECTION 3. Conditions to Effectiveness to Amendment. This Amendment
shall become effective upon satisfaction of the following condition precedent
on the Amendment Closing Date: receipt by the Agent of this Amendment,
executed and delivered by each of the Borrowers, the Agent and the Banks.
<PAGE>
-2-
SECTION 4. Affirmation of the Borrowers. Each of the Borrowers hereby
affirms all of its obligations under the Credit Agreement, as amended hereby,
and the Notes and under each of the other Loan Documents to which it is a
party and hereby affirms its absolute and unconditional promise to pay to the
Banks the Loans and all other amounts due under the Credit Agreement, as
amended hereby. Each of the Borrowers hereby represents, warrants and
confirms that the Obligations, as amended hereby, are and remain secured
pursuant to the Security Documents.
SECTION 5. Representations and Warranties. Each of the Borrowers hereby
represents and warrants to the Banks and the Agent as follows:
(a) Representations and Warranties. The representations and
warranties contained in Section 8 of the Credit Agreement were true and
correct in all material respects when made. The representations and
warranties contained in Section 8 of the Credit Agreement, after giving
effect to this Amendment, are true and correct on the date hereof, except (i)
for those representations and warranties which relate specifically to a
particular date, which representations and warranties were ture and correct
as of such date and (ii) as otherwise disclosed in writing by the Borrowers
to each of the Banks and the Agent subsequent to the Closing Date.
(b) Authority. The execution and delivery by each Borrower of
this Amendment, and the performance by each Borrower of this Amendment and
the Credit Agreement, as amended hereby, (i) are within the corporate
authority of such Borrower, (ii) have been duly authorized by all necessary
corporate proceedings, (iii) do not conflict with or result in any breach or
contravention of any provision of law, statute, rule or regulation to which
such Borrower is subject or any judgment, order, writ, injunction, license or
permit applicable to such Borrower, and (iv) do not conflict with any
provision of the corporate charter or bylaws of such Borrower or any
agreement or other instrument binding upon such Borrower.
(c) Enforceability. This Amendment and the Credit Agreement, as
amended hereby, are valid and legally binding obligations of each Borrower,
enforceable against such Borrower in accordance with their respective terms and
provisions, except as enforceability is limited by bankruptcy, insolvency,
reorganization, moratorium or other laws relating to or affecting generally the
enforcement of creditor's rights and except to the extent that availability of
the remedy of specific performance or injunctive relief is subject to the
discretion of the court before which any proceeding therefor may be brought.
(d) No Default. No Default or Event of Default exists or will
exist after giving effect to the execution and delivery of this Amendment.
SECTION 6. No Other Amendments. Except as expressly provided in this
Amendment, all of the terms and conditions of the Credit Agreement and the other
<PAGE>
-3-
Loan Documents remain unchanged, and the terms and conditions of the Credit
Agreement as amended hereby and the other Loan Documents remain in full force
and effect.
SECTION 7. Execution in Counterparts. This Amendment may be executed in
any number of counterparts and by each party on a separate counterpart, each
of which when so executed and delivered shall be an original, but all of
which together shall constitute one instrument. In proving this Amendment, it
shall not be necessary to produce or account for more than one such
counterpart signed by the party against whom enforcement is sought.
SECTION 8. Miscellaneous. This Amendment shall be deemed to be a
contract under seal under the laws of The Commonwealth of Massachusetts and
shall for all purposes be construed in accordance with and governed by the
laws of The Commonwealth of Massachusetts. The captions in this Amendment are
for convenience of reference only and shall not define or limit the
provisions hereof. The Borrowers agree to pay to the Agent, on demand by the
Agent, all reasonable out-of-pocket costs and expenses incurred or sustained
by the Agent in connection with the preparation of this Amendment, including
reasonable legal fees.
<PAGE>
-4-
IN WITNESS WHEREOF, the parties have executed this Amendment as of the
date first above written.
GRIFFITH CONSUMERS COMPANY
By: /s/ Raymond R. McKenzie
-----------------------------
Title:
CARL KING, INC.
By: /s/ Raymond R. McKenzie
-----------------------------
Title:
SHORE STOP CORPORATION
By: /s/ Raymond R. McKenzie
-----------------------------
Title:
BANKBOSTON, N.A. (formerly known
as The First National Bank Of Boston),
individually and as Agent
By:
-----------------------------
Title:
THE TRAVELERS INSURANCE
COMPANY
By:
-----------------------------
Title:
THE TRAVELERS INDEMNITY
COMPANY
By:
-----------------------------
Title:
SENIOR DEBT PORTFOLIO
By: Boston Management and Research,
as Investment Adviser
By:
-----------------------------
Title:
<PAGE>
-4-
IN WITNESS WHEREOF, the parties have executed this Amendment as of the
date first above written.
GRIFFITH CONSUMERS COMPANY
By:
-----------------------------
Title:
CARL KING, INC.
By:
-----------------------------
Title:
SHORE STOP CORPORATION
By:
-----------------------------
Title:
BANKBOSTON, N.A. (formerly known
as The First National Bank Of Boston),
individually and as Agent
By: /s/ H. Thomas Barley
-----------------------------
Title:
THE TRAVELERS INSURANCE
COMPANY
By:
-----------------------------
Title:
THE TRAVELERS INDEMNITY
COMPANY
By:
-----------------------------
Title:
SENIOR DEBT PORTFOLIO
By: Boston Management and Research,
as Investment Adviser
By:
-----------------------------
Title:
<PAGE>
-4-
IN WITNESS WHEREOF, the parties have executed this Amendment as of the
date first above written.
GRIFFITH CONSUMERS COMPANY
By:
-----------------------------
Title:
CARL KING, INC.
By:
-----------------------------
Title:
SHORE STOP CORPORATION
By:
-----------------------------
Title:
BANKBOSTON, N.A. (formerly known
as The First National Bank Of Boston),
individually and as Agent
By:
-----------------------------
Title:
THE TRAVELERS INSURANCE
COMPANY
By: /s/ Allen R. Cantrell
-----------------------------
Title: Investment Officer
THE TRAVELERS INDEMNITY
COMPANY
By: /s/ Allen R. Cantrell
-----------------------------
Title: Investment Officer
SENIOR DEBT PORTFOLIO
By: Boston Management and Research,
as Investment Adviser
By:
-----------------------------
Title:
<PAGE>
-4-
IN WITNESS WHEREOF, the parties have executed this Amendment as of the
date first above written.
GRIFFITH CONSUMERS COMPANY
By:
-----------------------------
Title:
CARL KING, INC.
By:
-----------------------------
Title:
SHORE STOP CORPORATION
By:
-----------------------------
Title:
BANKBOSTON, N.A. (formerly known
as The First National Bank Of Boston),
individually and as Agent
By:
-----------------------------
Title:
THE TRAVELERS INSURANCE
COMPANY
By:
-----------------------------
Title:
THE TRAVELERS INDEMNITY
COMPANY
By:
-----------------------------
Title:
SENIOR DEBT PORTFOLIO
By: Boston Management and Research,
as Investment Adviser
By: /s/ Scott H. Page
-----------------------------
Title: Vice President
<PAGE>
-5-
RIGGS BANK N.A.
By: /s/ H. Tyblum
-----------------------------
Title: Vice President
CYPRESSTREE INVESTMENT
MANAGEMENT COMPANY, INC.
As: Attorney-in-Fact and on behalf of
First Allmerica Life Insurance Company
By:
-----------------------------
Title:
CYPRESSTREE INVESTMENT
PARTNERS I, LTD.
By: CypressTree Investment
Management Company, Inc., as
Portfolio Manager
By:
-----------------------------
Title:
DEEPROCK & COMPANY
By: Eaton Vance Management, as
Investment Advisor
By:
-----------------------------
Title:
<PAGE>
-5-
RIGGS BANK N.A.
By:
-----------------------------
Title:
CYPRESSTREE INVESTMENT
MANAGEMENT COMPANY, INC.
As: Attorney-in-Fact and on behalf of
First Allmerica Life Insurance Company
By: /s/ J. Jenkins
-----------------------------
Title: Assistant Vice President
CYPRESSTREE INVESTMENT
PARTNERS I, LTD.
By: /s/ CypressTree Investment
Management Company, Inc., as
Portfolio Manager
By: /s/ J. Jenkins
-----------------------------
Title: Assistant Vice President
DEEPROCK & COMPANY
By: Eaton Vance Management, as
Investment Advisor
By:
-----------------------------
Title:
<PAGE>
-5-
RIGGS BANK N.A.
By:
-----------------------------
Title:
CYPRESSTREE INVESTMENT
MANAGEMENT COMPANY, INC.
As Attorney-in-Fact and on behalf of
First Allmerica Life Insurance Company
By:
-----------------------------
Title:
CYPRESSTREE INVESTMENT
PARTNERS I, LTD.
By: CypressTree Investment
Management Company, Inc.,
as Portfolio Manager
By:
-----------------------------
Title:
DEEPROCK & COMPANY
By: Eaton Vance Management, as
Investment Advisor
By: /s/ Scott H. Page
-----------------------------
Title: Vice President
<PAGE>
-6-
Each of the undersigned hereby (i) acknowledges the provisions of the
foregoing Amendment and (ii) ratifies and confirms all of its obligations
under each of the Loan Documents to which it is a party.
GRIFFITH HOLDINGS, INC.
By: /s/ Mike Shein
-----------------------------
Title: Vice President
FREDERICK TERMINALS, INC.
By:
-----------------------------
Title:
REGENT TRANSPORT, INC.
By:
-----------------------------
Title:
<PAGE>
Each of the undersigned hereby (i) acknowledges the provisions of the
foregoing Amendment and (ii) ratifies and confirms all of its obligations
under each of the Loan Documents to which it is a party.
GRIFFITH HOLDINGS, INC.
By:
-----------------------------
Title:
FREDERICK TERMINALS, INC.
By: /s/ Raymond R. McKenzie
-----------------------------
Title:
REGENT TRANSPORT, INC.
By: /s/ Raymond R. McKenzie
-----------------------------
Title:
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
SEPTEMBER 30, 1997 10Q OF GRIFFITH CONSUMERS COMPANY AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENT.
</LEGEND>
<CIK> 0000935814
<NAME> GRIFFITH CONSUMERS COMPANY
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUN-30-1998
<PERIOD-START> JUL-01-1997
<PERIOD-END> SEP-30-1997
<CASH> 1,939
<SECURITIES> 0
<RECEIVABLES> 11,615
<ALLOWANCES> (753)
<INVENTORY> 5,179
<CURRENT-ASSETS> 21,720
<PP&E> 35,472
<DEPRECIATION> (13,002)
<TOTAL-ASSETS> 121,446
<CURRENT-LIABILITIES> 20,857
<BONDS> 31,679
0
0
<COMMON> 20,691
<OTHER-SE> (14,838)
<TOTAL-LIABILITY-AND-EQUITY> 121,446
<SALES> 65,538
<TOTAL-REVENUES> 66,477
<CGS> 54,839
<TOTAL-COSTS> 54,966
<OTHER-EXPENSES> 14,344
<LOSS-PROVISION> 89
<INTEREST-EXPENSE> 2,717
<INCOME-PRETAX> (5,040)
<INCOME-TAX> (1,782)
<INCOME-CONTINUING> (3,257)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
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<NET-INCOME> (3,257)
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</TABLE>
