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 ROCHESTER, N.Y., Oct. 21 /PRNewswire/ -- The annual meeting of Class A shareholders of Genesee Corporation (NASDAQ: GENBB) was held today at the corporate offices.
 Shareholders elected Stephen B. Ashley, William A. Buckingham, Thomas E. Clement and John L. Wehle Jr. to serve three-year terms on the corporation's board of directors.
 Wehle, president and chief executive officer, reviewed the corporation's performance for the fiscal year ended April 30, 1993, and explained the impact of certain accounting changes and discontinued operations.
 The corporation adopted required changes in accounting for postretirement benefits and income taxes in fiscal 1993. The combined effect of these accounting changes was a one-time charge against 1993 net earnings of more than $6.8 million. The corporation showed earnings of $342,000 in fiscal 1993 before the effect of these accounting changes, but reported a loss of $6.5 million after the accounting changes.
 Wehle reported that 1993 earnings were also adversely affected by the requirement under the new accounting method for postretirement benefits to expense $1 million to reflect the cost of postretirement benefits accrued in fiscal 1993. In addition, the corporation recorded a one-time charge of $2.3 million against 1993 earnings as a result of the decision by Genesee Brewing Company to close its Buffalo, N.Y., malting facility and waste fuel incinerator. Wehle noted that closure of the malthouse and waste fuel incinerator would generate substantial savings in the years ahead.
 Wehle reported that extremely poor weather during the spring and summer of 1992 depressed sales and resulted in an operating loss for Genesee Brewing Company. With better weather during the past summer, Genesee Brewing Company's sales improved slightly in the first quarter of fiscal 1994. Wehle noted that the economy in the northeast remains sluggish and that consumer demand did not rebound to the levels that existed before the summer of 1992.
 Wehle told shareholders that Genesee Brewing Company was meeting the competitive challenge with a two-fold strategy. The first part of the strategy was to intensify the company's ongoing efforts to reduce costs and improve efficiencies. The decision to close the Buffalo malthouse and waste fuel incinerator were part of this process. Wehle noted that the company was conducting a systematic review of the budgets and operations of all departments within the brewery to identify opportunities for savings and improved efficiencies.
 The second part of the competitive strategy is product and market oriented. Wehle noted that Genesee Brewing Company launched a new advertising campaign in May and was supporting it with increased media spending. New packaging equipment is being installed that will allow Genesee Brewing Company to be one of the first brewers to offer the popular 12-ounce can in 15, 16, 18, 20, 30 or 36-count packs and to double-stack cans. Existing equipment limits packaging to single- stacked, 12- and 24-pack cans. "We think consumers will welcome the value and convenience of these p?ackages," said Wehle. The new package configurations will be available in December.
 Wehle also described two new products that will generate additional sales. These new products reflect Genesee Brewing Company's commitment to apply the knowledge and expertise of its brewing and marketing staffs to create new products to meet changing consumer preferences.
 Genny Ice Beer will be available in November and represents a major addition to the Genesee family of brands. Ice beers have already claimed more than 10 percent of Canadian beer sales since they were introduced earlier this year. Wehle said that Genny Ice should be the first domestic ice beer available in Genesee Brewing Company's marketing area. "We expect that the clean, refreshing taste and attractive packing of Genny Ice will attract a loyal following," said Wehle.
 Wehle also reported that Michael Shea's Black and Tan would be introduced in November. Michael Shea's Black and Tan is a unique blend of top fermented porter and lager-style beer. "Our Black and Tan offers the consumer exceptional flavor, body and balance and continues the standard of excellence established by Michael Shea's Irish Amber," said Wehle.
 Wehle also reported that the packaging and graphics for Genesee 12- Horse Ale had been totally redesigned and upgraded to highlight the unique heritage and outstanding quality of this fine ale.
 Robert N. Latella, executive vice president and chief operating officer, reported on the progress of the corporation's diversified businesses. Cheyenne Leasing, the corporation's equipment leasing business, had its sixth consecutive record year, generating $1.6 million in operating income in fiscal 1993. The corporation's real estate investments also performed well, generating $700,000 of operating income in fiscal 1993.
 Latella reported that fiscal 1993 was a difficult year for the corporation's Foods Division. Although sales increased 10 percent over the prior year, the operating loss ir?red by the Foods Division increased to $1.7 million. Latella noted that rapid growth in Foods Division sales over the past several years had resulted in an overly complicated business. The Foods Division's previous strategy to pursue three separate lines of business resulted in production inefficiencies and higher overhead costs that adversely impacted bottom line performance.
 To restore profitability, the Foods Division has revised its strategy to focus resources on its retail private label business and to de-emphasize the contract manufacturing and ingredients business.
 The retail private label segment of the food industry is experiencing rapid growth from the popularity of store-brand products. The Foods Division's retail private label business is its fastest growing and most profitable line of business. Latella reported that the Foods Division's line of noodles and rice side dishes, dry soups and beverage mixes have gained acceptance in most of the major supermarket chains in the United States. Although the initial results of this revised strategy are encouraging, Latella said that future plans for the Foods Division would depend in large part on the ability to achieve substantial improvement in the bottom line in fiscal 1994.
 -0- 10/21/93
 /CONTACT: Mark Leunig of Genesee, 716-546-1030, ext. 440/

CO: Genesee Corporation ST: New York IN: FOD SU:

AR-LC -- CL035 -- 5426 10/21/93 16:27 EDT
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Publication:PR Newswire
Date:Oct 21, 1993

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