FORM 10-QSB
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
[XX]QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended March 31, 1995
[ ]TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES ACT OF 1934
For the transition period from to
Commission File Number: 0-7775
WESTLAND DEVELOPMENT CO., INC.
(Exact name of registrants specified in its charter)
NEW MEXICO 85-0165021
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
401 Coors Blvd., N.W.,
Albuquerque, New Mexico 87121
(Address of principal executive offices)
(Zip Code)
N/A
(Former name, former address and former three-months, if changed
since last report)
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act during the past 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 the registrant's common stock outstanding as of
May 10, 1995, was:
No Par Value Common: 716,608
Class B $1.00 Par Value Common: 51,100
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements.
WESTLAND DEVELOPMENT CO., INC.
BALANCE SHEET
March 31, 1995
ASSETS
(unaudited)
Cash and cash equivalents .......................... $ 1,015,492
Investments ........................................ 891,752
-----------
$ 1,907,244
Receivables:
Real estate contracts ........................... $ 207,389
less related deferred profit .................. 141,402
-----------
65,987
Other receivables ............................. 92,729
Accrued interest .............................. 2,298
-----------
161,014
Land and improvements held for
future development .............................. 5,520,064
Income producing properties, net of accumulated
depreciation of $81,913 ......................... 269,858
Property and equipment, net of accumulated
depreciation of $350,642 ........................ 392,693
Investment in Limited Partnerships ................. 50,379
Other .............................................. 474,231
-----------
$ 8,775,483
===========
2
<PAGE>
WESTLAND DEVELOPMENT CO., INC.
March 31, 1995
LIABILITIES AND STOCKHOLDERS' EQUITY
(unaudited)
Liabilities
Accounts payable, accrued expenses
and other liabilities .................. $ 303,205
Accrued interest payable .................. 35,694
Deferred income taxes ..................... 3,024,000
Notes, bonds, mortgages and
assessments payable .................... 1,299,213
-----------
$ 4,662,112
Stockholders' equity
Common stock - no par value;
authorized, 736,668 shares;
issued and outstanding,
716,608 shares ......................... 8,500
Class A common stock - $1.00 par
value; authorized, 736,668
shares; issued, none ................... -
Class B common stock - $1.00 par
value; authorized, 491,112
shares; issued and outstanding,
51,100 shares .......................... 51,100
Additional paid-in capital ................ 378,677
Retained earnings ......................... 3,675,094
-----------
4,113,371
-----------
$ 8,775,483
===========
3
<PAGE>
WESTLAND DEVELOPMENT CO., INC.
STATEMENTS OF OPERATIONS
(unaudited)
For the 3 months ended
March 31,
1995 1994
------------- -------------
Revenues
Land ....................................... $ 101,027 $ 685,560
Deferred profit recognized on
installment sales ...................... 34,002 3,524
Rentals ................................... 35,411 10,160
------------- -------------
170,440 699,244
Costs and expenses
Cost of land revenues ................... 2,330 14,890
Cost of rentals ......................... 5,006 8,136
Other general and administrative ........ 469,879 348,991
Loss on investments ..................... - 212,246
Legal ................................... 16,858 39,107
------------- -------------
494,073 623,370
------------- -------------
(Loss)Income from operations .......... (323,633) 75,874
Other (income) expense
Interest income ......................... (155) (16,345)
Gain on sale of property and
equipment ......................... (1,248) --
Other income ............................ (30,361) (16,631)
Interest expense ........................ 27,054 26,312
------------- -------------
(4,710) (6,664)
------------- -------------
(Loss) Earnings before income
taxes ......................... (318,923) 82,538
Income taxes ............................... - 35,492
------------- -------------
NET (LOSS) EARNINGS ................... $ (318,923) $ 47,046
------------ ------------
eighted average common and
common equivalent shares
outstanding ............................. 767,708 767,708
============ ============
Net (Loss) earnings per common and
common equivalent share ................. $ (.42) $ .06
============ ============
4
<PAGE>
WESTLAND DEVELOPMENT CO., INC.
STATEMENTS OF OPERATIONS
(unaudited)
For the 9 months ended
March 31,
1995 1994
------------- -------------
Revenues
Land ....................................... $ 709,633 $ 1,039,494
Deferred profit recognized on
installment sales ...................... 50,720 13,252
Rentals .................................... 55,630 47,906
------------- -------------
815,983 1,100,652
Costs and expenses
Cost of land revenues ................... 14,976 18,752
Cost of rentals ......................... 21,218 70,167
Other general and administrative ........ 1,239,267 1,017,341
Loss on investments ..................... - 212,246
Legal ................................... 84,821 91,571
------------- -------------
1,360,282 1,410,077
------------- -------------
Operating Loss ........................ (544,299) (309,425)
Other (income) expense
Interest income ......................... (98,784) (77,058)
Gain on sale of property and
equipment ......................... (1,488) (423,525)
Other income ............................ (110,638) (20,274)
Interest expense ........................ 77,601 78,028
------------- -------------
(133,309) (442,829)
------------- -------------
(Loss) earnings before income
taxes .......................... (410,990) 133,404
Income taxes ............................... - 57,364
------------- -------------
NET (LOSS) EARNINGS ................... $ (410,990) $ 76,040
============= =============
Weighted average common and
common equivalent shares
outstanding ............................. 767,708 767,708
============= =============
Net (loss) earnings per common and
common equivalent share ................. $ (.54) $ .10
============= =============
5
<PAGE>
WESTLAND DEVELOPMENT CO., INC.
STATEMENTS OF CASH FLOWS
(unaudited)
For the 9 months ended
March 31,
1995 1994
------------- -------------
Cash flows from operating activities
Cash received from land sales
and collections on real
estate contracts receivable ............. $ 678,288 $ 1,045,789
Cash paid to develop real
estate .................................. (1,120,099) (20,920)
Cash received from rental
operations .............................. 202,328 47,906
Cash paid for rental operations ........... (11,194) (43,906)
Cash paid for property
taxes and maintenance ................... (54,140) (37,259)
Purchase of investments ................... (14,682,908) (965,637)
Proceeds on sale and maturity of
investments ............................. 15,709,794 176,000
Interest received ......................... 79,516 74,732
Interest paid (net of amount
capitalized) ............................ (31,632) (63,728)
Income taxes received ..................... 6,603 --
Legal and other general and
administrative costs paid ............... (1,248,572) (1,249,129)
Other income .............................. 12,932 2,052
------------- -------------
Net cash used in operating
activities ................................ $ (459,084) $ (1,034,100)
============= =============
6
<PAGE>
WESTLAND DEVELOPMENT CO., INC.
STATEMENT OF CASH FLOWS (CONTINUED)
(unaudited)
For the 9 months ended
March 31,
1995 1994
------------ ------------
Cash flows from investing activities
Capital expenditures for income
producing and other properties ........ $ (258,370) $ (12,984)
Proceeds from sale of assets ............ 560,594
Sinking fund deposit .................... (248,760) -
Investment in other assets .............. - (560,594)
Investment in limited partnerships ...... (27,470) (174,900)
-------------- --------------
Net cash used in investing
activities ............................ (534,600) (187,884)
Cash flows from financing activities
Issuance of bonds ....................... - 252,900
Borrowing on notes, mortgages and
assessments payable .................. 112,207 -
Repayments of bonds, mortgages,
notes and assessments payable ......... (126,556) (202,659)
Payment of dividends .................... (767,708) (383,854)
-------------- --------------
Net cash used in financing
activities ............................. $ (782,057) (333,613)
-------------- --------------
NET DECREASE IN CASH
AND CASH EQUIVALENTS ................... (1,775,741) (1,555,597)
Cash and cash equivalents at
beginning of period .................... 2,791,233 2,051,650
-------------- --------------
Cash and cash equivalents at
end of period .......................... $ 1,015,492 $ 496,053
============== ==============
7
<PAGE>
WESTLAND DEVELOPMENT CO., INC.
STATEMENTS OF CASH FLOWS (CONTINUED)
(unaudited)
For the 9 months ended
March 31,
1995 1994
------------- -------------
Reconciliation of net earnings
(loss) to net cash used in
operating activities
Net (loss) earnings ........................ $ (410,990) $ 76,040
Adjustments to reconcile net
(loss) earnings to net cash used
in operating activities
Depreciation .......................... $ 26,532 18,540
Collection on real estate
contracts receivable ................ 85,946 64,395
Profit recognized on prior
years' installment sales ............ (50,720) 6,248
Gain on sale of assets ................ (1,488) (423,525)
Change in
Investments ........................... 1,027,289 (577,391)
Deferred income taxes ................. 6,000 57,364
Rents receivable, accrued interest
property tax and other .............. (54,270) 3,332
Land and improvements held for
future development and income
producing properties ................ (1,123,840) (67,601)
Other assets .......................... 10,522 (150,878)
Accounts and retainages payable,
accrued interest and other
liabilities ........................ 25,935 (40,624)
------------- -------------
Net cash used in
operating activities ..................... $ (459,084) $ (1,034,100)
============= =============
There were no material noncash investing or financing activities in
either nine month period.
8
<PAGE>
WESTLAND DEVELOPMENT CO., INC.
NOTES TO THE FINANCIAL STATEMENTS
(unaudited)
March 31, 1995
1. The balance sheet at March 31, 1995, statements of cash flows for
the nine months then ended and statements of operations for the three and nine
months then ended have been prepared by the Company, without audit. In the
opinion of management, all adjustments, including normal recurring adjustments
necessary to present fairly the financial position, results of operations and
cash flows, have been made. Certain information and footnote disclosures
normally included in financial statements prepared in accordance with generally
accepted accounting principals have been condensed or omitted. It is suggested
that these financial statements be read in conjunction with the Company's
audited financial statements at June 30, 1994. The results of operations for the
nine months ended March 31, 1995 are not necessarily indicative of operating
results for the full year.
2. The computation of net earnings per common and common equivalent
share has been based upon the weighted average number of shares of outstanding
common stock and common stock issuable without further consideration (referred
to as equivalents), which for all periods presented was 767,708.
9
<PAGE>
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of operations.
During the nine months ended March 31, 1995, the Company's cash and
cash equivalents decreased by $1,775,741 as a result of several factors, most
notably maturing investments in government securities which provided $1,027,289,
net, in excess of reinvestment and such uses as payment of dividends in the
amount of $767,708, capital expenditures of $258,370, land development costs of
$1,120,099 and bond retirement sinking fund payments of $248,760.
During the third quarter of the current fiscal year, the Company had
revenue of $170,440 compared to $699,244 during the same period in the prior
fiscal year. Operating expenses during the three months ended March 31, 1995,
were $494,073 compared to $623,370 during the comparable period in 1994, which
included a loss on investments of $212,246.
For the current year to date, the Company had total revenues of
$815,983 compared to $1,100,652 in the prior year, and expenses of $1,360,282 in
1995 compared to $1,410,077 in 1994. For the nine months ended March 31, 1995,
other income amounted to $133,309 while in the same period in 1994 it was
$442,829, including gain on sale of assets of $423,525.
During the current fiscal year, management has changed the Company's
sales emphasis from raw acreage to improved lots, which is expected to increase
profitability. To this end, land development costs have been approximately
$1,120,000 through March 31, 1995.
10
<PAGE>
At the time of this report, cash provided from sales of these lots has exceeded
$200,000.
The Company has committed to the acquisition of a retail facility
which will require total cash outlays of approximately $690,000. Other than
that, management is not aware of any event or uncertainties that have or are
reasonably likely to have a material impact on the Company's short-term or
long-term liquidity except as follows:
The Company may expend approximately $2,000,000 or more to acquire
replacement property, including the retail center, above, for land sold to the
National Park Service under threat of condemnation in prior years. In the event
the Company does not replace the property sold to the National Park Service, it
may need to utilize a substantial portion of its liquid investments for federal
and state income taxes.
11
<PAGE>
PART II. OTHER INFORMATION
ITEM 1: LEGAL PROCEEDINGS
Other than ordinary routine litigation incidental to the Company's
business, the Company and/or members of its management are currently parties in
the following legal proceeding:
WESTLAND, et al v. KENNY ROMERO, et al.
Following the filings of various legal actions during 1987 against the
Company's officers and directors alleging violations of Federal and State
securities laws, the Company learned that certain members of El Nuevo Comienzo
had agreed to underwrite the costs and expenses of the litigation for certain of
the Plaintiffs in those cases (previously reported by the Company under the
heading "Anaya, et al v. Westland"). The Company concluded that the action by
those members of El Nuevo Comienzo who so agreed was an abuse of legal process
and brought action in the New Mexico District Court for Bernalillo County
seeking compensatory damages from the Defendants. In July 1989, the Defendants
filed a motion for permission to file a counter claim against the Company, which
was granted by the Court. On November 5, 1991, the Court rendered its decision
to dismiss defendants' counter claim, which order the defendants appealed. In
February 3, 1994, the New Mexico Court of Appeals denied the defendant's appeal
of the District Court's order granting the Company's motion for summary
judgment. The Company's complaint has been set for trial in August, 1995.
12
<PAGE>
ITEM 2. CHANGES IN SECURITIES
NONE
ITEM 3. DEFAULTS IN SENIOR SECURITIES
NONE
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
(a) Election of Directors
On November 1, 1994, at the Registrant's Annual Meeting
of the Shareholders, the shareholders elected three Class
A directors to its Board of Directors. The persons so
elected are Barbara Page, Polecarpio "Lee" Anaya and
Raymundo Mares.
(b) Continuing Directors
The Registrant's Class B and Class C directors continued
after the meeting. The Registrant's Class B and Class
C directors are as follows: Class B: David C. Armijo,
Josie Castillo and Carmel Chavez. Class C: Sosimo
Sanchez Padilla, Carlos Saavedra and Abelino Herrera.
ITEM 5. OTHER INFORMATION
NONE
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) There are no exhibits required by Item 601 of Regulation
S-K.
(b) Reports on Form 8-K. State whether any reports on Form 8-K have
been filed during the quarter for which this report is filed, listing
the items reported, any financial statements filed, and the dates of
any such reports.
NONE
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.
WESTLAND DEVELOPMENT CO., INC.
DATE: March 12, 1995 By:___________________________________
Barbara Page, President,Chief
Executive Officer and Chief
Accounting Officer
13
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JUN-30-1995
<PERIOD-END> MAR-31-1995
<CASH> 1,015,492
<SECURITIES> 891,752
<RECEIVABLES> 161,014
<ALLOWANCES> 0
<INVENTORY> 5,520,064
<CURRENT-ASSETS> 0
<PP&E> 1,095,106
<DEPRECIATION> 432,555
<TOTAL-ASSETS> 8,775,483
<CURRENT-LIABILITIES> 0
<BONDS> 628,900
<COMMON> 59,600
0
0
<OTHER-SE> 4,053,771
<TOTAL-LIABILITY-AND-EQUITY> 8,775,483
<SALES> 815,983
<TOTAL-REVENUES> 815,983
<CGS> 36,194
<TOTAL-COSTS> 1,360,282
<OTHER-EXPENSES> (133,309)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 77,601
<INCOME-PRETAX> (410,990)
<INCOME-TAX> 0
<INCOME-CONTINUING> (544,299)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (410,990)
<EPS-PRIMARY> (.54)
<EPS-DILUTED> (.54)
</TABLE>
