Griffin Land & Nurseries Inc. (GRIF, Financial) filed Quarterly Report for the period ended 2009-05-30.
Griffin Land & Nurseries Inc. based in New York New York through its subsidiaries engages in real estate and landscape nursery operations in the United States. The company also has investments in Centaur Media plc a public company based in the United Kingdom and listed on the London Stock Exchange and Shemin Nurseries Holdings Corp. a private company that operates a landscape nursery distribution business through its subsidiary Shemin Nurseries Inc. Griffin Land & Nurseries Inc. has a market cap of $143.7 million; its shares were traded at around $27.8 with and P/S ratio of 3.3. The dividend yield of Griffin Land & Nurseries Inc. stocks is 1.5%.
Total revenue at Griffin Land increased from $4.0 million in the 2008 second quarter to $4.1 million in the 2009 second quarter. The net increase of $0.1 million reflects an increase of $0.5 million of rental revenue from leasing operations offset by a $0.4 million decrease in revenue from property sales. The increase in rental revenue principally reflects $0.6 million of rental revenue from leases that became effective in the second half of last year, including $0.5 million of rental revenue from previously vacant space and $0.1 million of rental revenue from a new 100,000 square foot building that was completed and placed in service in the 2008 third quarter. Partially offsetting these increases was a decrease of $0.1 million of rental revenue from leases that expired and were not renewed. The decrease in revenue from property sales reflects there being no property sales revenue in the 2009 second quarter whereas the 2008 second quarter included $0.4 million of property sales revenue recognized on the sale of undeveloped land to Walgreen in New England Tradeport (“Tradeport”), Griffin Land s industrial park in Windsor and East Granby, Connecticut, that closed in 2006 and was accounted for under the percentage of completion method. All of the previously deferred revenue related to the 2006 land sale to Walgreen was recognized as of the end of fiscal 2008. Property sales occur periodically and changes in revenue from year to year from these transactions may not be indicative of any trends in the real estate business.
Net sales and other revenue at Imperial decreased from $17.1 million in the 2008 second quarter to $15.6 million in the 2009 second quarter despite a 10% increase in unit sales volume. Imperial s landscape nursery business is highly seasonal, with second quarter sales comprising a majority of its annual sales. Imperial previously announced that it will shut down its Quincy, Florida farm by the end of fiscal 2009. As a result, all of the Florida inventory will be liquidated in fiscal 2009. The overall increase in unit sales volume in the 2009 second quarter reflects a 31% increase in unit sales volume of Florida sales whereas unit sales volume of Connecticut sales decreased 6% in the 2009 second quarter as compared to the 2008 second quarter. Despite the increase in unit sales volume of Florida sales, net sales from the Florida farm decreased from $7.1 million in the 2008 second quarter to $6.3 million in the 2009 second quarter due to significant price reductions to stimulate sales of Florida product. The significantly lower pricing on Florida product also reflects selling certain plants prior to their reaching normal salable size. Net sales from Imperial s Granby, Connecticut farm, which Imperial expects to continue to operate, decreased from $10.0 million in the 2008 second quarter to $9.3 million in the 2009 second quarter. The decrease in net sales of the Connecticut farm reflects the lower unit sales volume and lower pricing. Imperial s sales have been negatively impacted by the weak economy and the reduction in new home and commercial construction. Market conditions for growers of landscape nursery plants appear to be worsening, as the oversupply of product available for sale may deter customers from placing advance orders for spring 2010 deliveries.
Imperial s operating loss of $0.2 million in the 2009 second quarter as compared to an operating profit of $0.8 million in the 2008 second quarter, principally reflects a $1.3 million decrease in gross profit partially offset by a $0.3 million decrease in selling, general and administrative expenses. The $1.3 million decrease in gross profit principally reflects $0.6 million due to lower pricing on sales from Imperial s Connecticut farm and a $0.5 million increase in the charge for unsaleable inventories. The increase in the charge for unsaleable inventories in the 2009 second quarter reflects growing issues on certain plants, changes in production planning whereby certain units in the propagation stage of development will be disposed instead of being potted into saleable size units and excess inventories of certain plant varieties that are not expected to be sold before they become unsaleable. The production plan changes reflect management s decision to reduce future inventory levels given the current difficult market conditions that management believes have resulted in an oversupply of product in the marketplace.
Griffin s consolidated total revenue decreased from $25.5 million in the 2008 six month period to $24.3 million in the 2009 six month period. The decrease in revenue of approximately $1.2 million reflects a decrease in revenue of approximately $1.5 million at Imperial partially offset by an increase in revenue of approximately $0.3 million at Griffin Land.
Total revenue at Griffin Land increased from $8.1 million in the 2008 six month period to $8.3 million in the 2009 six month period, reflecting an increase of approximately $1.1 million of rental revenue from its leasing operations partially offset by a decrease of approximately $0.8 million in revenue from property sales. The increase in Griffin Land's rental revenue in the 2009 six month period, as compared to the 2008 six month period, principally reflects $1.3 million from new leases that became effective in the second half of last year, including $1.0 million of rental revenue from leasing previously vacant space and $0.3 million of rental revenue from a new 100,000 square foot building that was completed and placed in service in the 2008 third quarter. Partially offsetting these increases was a decrease of approximately $0.2 million of rental revenue from leases that expired and were not renewed. There were no property sales in the 2009 six month period. The 2008 six month period included $0.8 million of revenue recognized on the sale of undeveloped Tradeport land to Walgreen that closed in 2006 and was accounted for under the percentage of completion method. All of the previously deferred revenue related to the 2006 land sale to Walgreen was recognized as of the end of fiscal 2008. Property sales occur periodically and changes in revenue from year to year from these transactions may not be indicative of any trends in the real estate business.
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Griffin Land & Nurseries Inc. based in New York New York through its subsidiaries engages in real estate and landscape nursery operations in the United States. The company also has investments in Centaur Media plc a public company based in the United Kingdom and listed on the London Stock Exchange and Shemin Nurseries Holdings Corp. a private company that operates a landscape nursery distribution business through its subsidiary Shemin Nurseries Inc. Griffin Land & Nurseries Inc. has a market cap of $143.7 million; its shares were traded at around $27.8 with and P/S ratio of 3.3. The dividend yield of Griffin Land & Nurseries Inc. stocks is 1.5%.
Highlight of Business Operations:
Griffin incurred a net loss for the thirteen weeks ended May 30, 2009 (the “2009 second quarter”) of $1.0 million as compared to a net loss of $0.4 million for the thirteen weeks ended May 31, 2008 (the “2008 second quarter”). The higher net loss in the 2009 second quarter principally reflects lower operating results at Imperial, which incurred an operating loss of $0.2 million in the 2009 second quarter as compared to an operating profit of $0.8 million in the 2008 second quarter. Operating profit at Griffin Land increased from $0.5 million in the 2008 second quarter to $0.6 million in the 2009 second quarter and general corporate expense decreased from $1.2 million in the 2008 second quarter to $1.1 million in the 2009 second quarter. The lower operating results at Imperial principally reflect lower gross profit due to both lower margins on sales and higher charges for unsaleable inventories incurred in the current quarter. The increase in operating profit at Griffin Land reflects increased results from its leasing operations substantially offset by not having any property sales in the 2009 second quarter. Griffin Land reported profit of $0.3 million from property sales in the 2008 second quarter.Total revenue at Griffin Land increased from $4.0 million in the 2008 second quarter to $4.1 million in the 2009 second quarter. The net increase of $0.1 million reflects an increase of $0.5 million of rental revenue from leasing operations offset by a $0.4 million decrease in revenue from property sales. The increase in rental revenue principally reflects $0.6 million of rental revenue from leases that became effective in the second half of last year, including $0.5 million of rental revenue from previously vacant space and $0.1 million of rental revenue from a new 100,000 square foot building that was completed and placed in service in the 2008 third quarter. Partially offsetting these increases was a decrease of $0.1 million of rental revenue from leases that expired and were not renewed. The decrease in revenue from property sales reflects there being no property sales revenue in the 2009 second quarter whereas the 2008 second quarter included $0.4 million of property sales revenue recognized on the sale of undeveloped land to Walgreen in New England Tradeport (“Tradeport”), Griffin Land s industrial park in Windsor and East Granby, Connecticut, that closed in 2006 and was accounted for under the percentage of completion method. All of the previously deferred revenue related to the 2006 land sale to Walgreen was recognized as of the end of fiscal 2008. Property sales occur periodically and changes in revenue from year to year from these transactions may not be indicative of any trends in the real estate business.
Net sales and other revenue at Imperial decreased from $17.1 million in the 2008 second quarter to $15.6 million in the 2009 second quarter despite a 10% increase in unit sales volume. Imperial s landscape nursery business is highly seasonal, with second quarter sales comprising a majority of its annual sales. Imperial previously announced that it will shut down its Quincy, Florida farm by the end of fiscal 2009. As a result, all of the Florida inventory will be liquidated in fiscal 2009. The overall increase in unit sales volume in the 2009 second quarter reflects a 31% increase in unit sales volume of Florida sales whereas unit sales volume of Connecticut sales decreased 6% in the 2009 second quarter as compared to the 2008 second quarter. Despite the increase in unit sales volume of Florida sales, net sales from the Florida farm decreased from $7.1 million in the 2008 second quarter to $6.3 million in the 2009 second quarter due to significant price reductions to stimulate sales of Florida product. The significantly lower pricing on Florida product also reflects selling certain plants prior to their reaching normal salable size. Net sales from Imperial s Granby, Connecticut farm, which Imperial expects to continue to operate, decreased from $10.0 million in the 2008 second quarter to $9.3 million in the 2009 second quarter. The decrease in net sales of the Connecticut farm reflects the lower unit sales volume and lower pricing. Imperial s sales have been negatively impacted by the weak economy and the reduction in new home and commercial construction. Market conditions for growers of landscape nursery plants appear to be worsening, as the oversupply of product available for sale may deter customers from placing advance orders for spring 2010 deliveries.
Imperial s operating loss of $0.2 million in the 2009 second quarter as compared to an operating profit of $0.8 million in the 2008 second quarter, principally reflects a $1.3 million decrease in gross profit partially offset by a $0.3 million decrease in selling, general and administrative expenses. The $1.3 million decrease in gross profit principally reflects $0.6 million due to lower pricing on sales from Imperial s Connecticut farm and a $0.5 million increase in the charge for unsaleable inventories. The increase in the charge for unsaleable inventories in the 2009 second quarter reflects growing issues on certain plants, changes in production planning whereby certain units in the propagation stage of development will be disposed instead of being potted into saleable size units and excess inventories of certain plant varieties that are not expected to be sold before they become unsaleable. The production plan changes reflect management s decision to reduce future inventory levels given the current difficult market conditions that management believes have resulted in an oversupply of product in the marketplace.
Griffin s consolidated total revenue decreased from $25.5 million in the 2008 six month period to $24.3 million in the 2009 six month period. The decrease in revenue of approximately $1.2 million reflects a decrease in revenue of approximately $1.5 million at Imperial partially offset by an increase in revenue of approximately $0.3 million at Griffin Land.
Total revenue at Griffin Land increased from $8.1 million in the 2008 six month period to $8.3 million in the 2009 six month period, reflecting an increase of approximately $1.1 million of rental revenue from its leasing operations partially offset by a decrease of approximately $0.8 million in revenue from property sales. The increase in Griffin Land's rental revenue in the 2009 six month period, as compared to the 2008 six month period, principally reflects $1.3 million from new leases that became effective in the second half of last year, including $1.0 million of rental revenue from leasing previously vacant space and $0.3 million of rental revenue from a new 100,000 square foot building that was completed and placed in service in the 2008 third quarter. Partially offsetting these increases was a decrease of approximately $0.2 million of rental revenue from leases that expired and were not renewed. There were no property sales in the 2009 six month period. The 2008 six month period included $0.8 million of revenue recognized on the sale of undeveloped Tradeport land to Walgreen that closed in 2006 and was accounted for under the percentage of completion method. All of the previously deferred revenue related to the 2006 land sale to Walgreen was recognized as of the end of fiscal 2008. Property sales occur periodically and changes in revenue from year to year from these transactions may not be indicative of any trends in the real estate business.
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