NEW YORK, Oct. 11, 2012 (GLOBE NEWSWIRE) -- Griffin Land & Nurseries, Inc. (Nasdaq:GRIF) ("Griffin") today reported 2012 third quarter operating profit of $4,012,000 on total revenue of $12,547,000, as compared to 2011 third quarter operating profit of $86,000 on total revenue of $8,013,000. For the 2012 nine month period, Griffin reported operating profit of $2,682,000 on total revenue of $29,894,000, as compared to an operating loss of ($2,695,000) on total revenue of $26,302,000 for the 2011 nine month period. Net income for the 2012 nine month period, which includes the operating results and a gain on sale of Griffin's discontinued operation, was $1,992,000 as compared to a net loss, including the operating results of the discontinued operation, of ($3,186,000) for the 2011 nine month period. Griffin's discontinued operation reflects a fully-leased 308,000 square foot warehouse building in Manchester, Connecticut (the "Manchester Warehouse") that was sold in the 2012 first quarter (see below).
Griffin's 2012 third quarter and 2012 nine month period operating profit were higher than the operating results in the comparable 2011 periods due principally to significantly higher operating profit at Griffin Land, Griffin's real estate business, that was principally due to a land sale (see below), and improved operating results at Imperial Nurseries, Inc. ("Imperial"), Griffin's landscape nursery business, partially offset by higher general corporate expense.
The significantly higher operating profit at Griffin Land was principally due to the gain on the sale of approximately 93 acres of undeveloped land in New England Tradeport ("Tradeport"), Griffin Land's industrial park in Windsor and East Granby, Connecticut that was sold for cash of $7,000,000 on July 6, 2012. Because Griffin Land is required to construct a sewer line to service the property that was sold, this transaction is being accounted for using the percentage of completion method. Accordingly, in the 2012 third quarter and 2012 nine month period, Griffin Land recognized revenue of approximately $5,400,000 and a gain of approximately $4,600,000 on this transaction. The balance of the revenue and gain will be recognized as costs to complete the sewer line are incurred. The total gain on sale, after all revenue and costs are recognized, is expected to be approximately $6,000,000. At the closing of this transaction, the proceeds were placed in escrow for the potential purchase of a replacement property under a Section 1031 like-kind exchange for income tax purposes. If a replacement property is not acquired in accordance with the Section 1031 regulations, the proceeds would be returned to Griffin. As previously reported, on September 21, 2012, Griffin Land entered into a contract to acquire approximately 49 acres of undeveloped land in the Lehigh Valley of Pennsylvania which would be the replacement property for the Tradeport land that was sold. Completion of this acquisition is subject to the satisfactory completion of due diligence to be performed, and Griffin Land's satisfaction that it expects to obtain approvals for its planned development of this land. There is no guarantee that this potential acquisition will be completed under its current terms, or at all.