FORM 10-QSB - QUARTERLY OR TRANSITIONAL REPORT UNDER SECTION 13 OR 15(d)OF
THE SECURITIES EXCHANGE ACT OF 1934
Quarterly or Transitional Report
U.S. Securities and Exchange Commission
Washington, D.C. 20549
Form 10-QSB
(Mark One)
[XX]QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended March 31, 1996
[ ]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: 0-7775
WESTLAND DEVELOPMENT CO., INC.
- ------------------------------------------------------------------------------
(Exact name of small business issuer as 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
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(Address of principal executive offices)
(505)831-9600
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(Issuer's telephone number)
N/A
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(Former name, former address and former fiscal year, 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 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 outstanding of each of the issuer's classes of common
equity as of May 7, 1996, was:
No Par Value Common: 716,608
Class B $1.00 Par Value Common: 78,600
Transitional Small Business Format (check one) Yes [ ] No [ X ]
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
WESTLAND DEVELOPMENT CO., INC.
BALANCE SHEET
(unaudited)
March 31, 1996
ASSETS
Cash and cash equivalents ........................ $ 1,718,904
Receivables:
Real estate contracts ......................... $ 150,792
Less related deferred profit ............. 106,272
-----------
44,520
Other receivables ............................. 55,183
Accrued interest .............................. 1,705 101,408
-----------
Land and improvements held for
future development ............................ 5,428,792
Income producing properties, net ................. 3,702,047
Property and equipment, net of accumulated
depreciation of $338,873 ...................... 407,373
Investment in partnerships and joint ventures .... 497,745
Other ............................................ 608,791
-----------
$12,465,060
===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable, accrued expenses
and other liabilities ......................... $ 810,892
Accrued interest payable ......................... 46,513
Deferred income taxes ............................ 3,265,000
Notes, bonds, mortgages and assessments payable .. 3,970,171
-----------
Total liabilities ............... 8,092,576
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,
78,600 shares .............................. 78,600
Additional paid-in capital .................... 502,702
Retained earnings ............................. 3,782,682
-----------
4,372,484
-----------
$12,465,060
===========
WESTLAND DEVELOPMENT CO., INC.
STATEMENTS OF OPERATIONS
(unaudited)
For the 3 months ended
March 31,
1996 1995
--------- ---------
Revenues
Land ...................................... $ 465,617 $ 101,027
Deferred profit recognized
on installment sales .................... 9,049 34,002
Rentals ................................... 117,978 35,411
--------- ---------
592,644 170,440
Costs and expenses
Cost of land revenues ..................... 158,144 2,330
Cost of rentals ........................... 35,771 5,006
Other general and administrative .......... 416,857 469,879
Legal ..................................... 16,869 16,858
--------- ---------
627,641 494,073
--------- ---------
Loss from operations ................... (34,997) (323,633)
Other (income) expense
Interest income ........................... (13,966) (155)
Gain on sale of property and
equipment ............................ (50) (1,248)
Other income .............................. (17,468) (30,361)
Interest expense .......................... 83,949 27,054
Loss on partnership operations ............ 4,919 --
--------- ---------
57,384 (4,710)
--------- ---------
Loss before income taxes ............... (92,381) (318,923)
Income tax expense ........................... -- --
--------- ---------
NET LOSS ............................... $ (92,381) $(318,923)
========= =========
Weighted average common and
common equivalent shares
outstanding ............................... 795,208 767,708
========= =========
Net loss per common and
common equivalent share ................... $ (.12) $ (.42)
========= =========
WESTLAND DEVELOPMENT CO., INC.
STATEMENTS OF OPERATIONS
(unaudited)
For the 9 months ended
March 31,
1996 1995
----------- -----------
Revenues
Land .................................... $ 1,763,517 $ 709,633
Deferred profit recognized
on installment sales .................. 27,909 50,720
Rentals ................................. 300,234 55,630
----------- -----------
2,091,660 815,983
Costs and expenses
Cost of land revenues ................... 648,342 14,976
Cost of rentals ......................... 102,290 21,218
Other general and administrative ........ 1,355,105 1,239,267
Legal ................................... 64,063 84,821
----------- -----------
2,169,800 1,360,282
----------- -----------
Loss from operations ................. (78,140) (544,299)
Other (income) expense
Interest income ......................... (82,186) (98,784)
Gain on sale of property and
equipment .......................... (200) (1,488)
Other income ............................ (50,793) (110,638)
Interest expense ........................ 264,598 77,601
Loss on partnership operations .......... 6,567 --
----------- -----------
137,986 (133,309)
----------- -----------
Loss before income taxes ............. (216,126) (410,990)
Income tax expense ......................... -- --
----------- -----------
NET LOSS ............................. $ (216,126) $ (410,990)
=========== ===========
Weighted average common and
common equivalent shares
outstanding ............................. 792,153 767,708
=========== ===========
Net loss per common and
common equivalent share ................. $ (.27) $ (.54)
=========== ===========
WESTLAND DEVELOPMENT CO., INC.
STATEMENTS OF CASH FLOWS
(unaudited)
For the nine months ended
March 31,
1996 1995
------------ ------------
Cash flows from operating activities
Cash received from land sales
and collections on real
estate contracts receivable ................. $ 2,411,213 $ 678,288
Cash paid to develop real estate .............. (522,298) (1,120,099)
Cash received from rental operations .......... 292,510 202,328
Cash paid for rental operations ............... (3,336) (11,194)
Cash paid for property taxes
and maintenance ............................ (97,440) (54,140)
Purchase of investments ....................... -- (14,682,908)
Proceeds on sale and maturity of investments .. -- 15,709,794
Interest received ............................. 70,192 79,516
Interest paid ................................. (264,598) (31,632)
Income taxes(paid)received .................... (214,113) 6,603
Legal and other general and
administrative costs paid ................... (1,579,080) (1,248,572)
Other income .................................. 49,226 12,932
------------ ------------
Net cash provided by
(used in) operating activities ......... 216,406 (459,084)
------------ ------------
Cash flows from investing activities
Capital expenditures for income
producing and other properties .............. (53,483) (258,370)
Proceeds from sale of assets .................. 200 --
Sinking fund deposit .......................... -- (248,760)
Investment in partnerships .................... (486,166) (27,470)
Net cash used in investing ................... -- --
activities .................................. (539,649) (534,600)
------------ ------------
Cash flows from financing activities
Borrowing on notes, mortgages and
assessments payable ........................ 646,200 112,207
Proceeds from sale of stock ................... 96,425 --
Repayments of bonds, mortgages,
notes and assessments payable ............... (142,656) (126,556)
Payment of dividends .......................... (475,625) (767,708)
------------ ------------
Net cash provided by (used in)
financing activities ........................ 124,344 (782,057)
------------ ------------
NET DECREASE IN CASH
AND CASH EQUIVALENTS ......................... (198,899) (1,775,741)
Cash and cash equivalents at
beginning of period .......................... 1,917,803 2,791,233
------------ ------------
Cash and cash equivalents at
end of period ................................ $ 1,718,904 $ 1,015,492
============ ============
WESTLAND DEVELOPMENT CO., INC.
STATEMENTS OF CASH FLOWS (CONTINUED)
(unaudited)
For the nine months ended
March 31,
1996 1995
----------- -----------
Reconciliation of net
loss to net cash provided by
(used in) operating activities
Net loss ..................................... $ (216,126) $ (410,990)
Adjustments to reconcile net
earnings(loss)to net cash used in
operating activities
Depreciation ............................ 127,971 26,532
Collection on real estate
contracts receivable .................. 471,983 85,946
Profit recognized on prior
years' installment sales .............. (27,909) (50,720)
Gain on sale of assets .................. (200) (1,488)
Change in
Investments ............................. -- 1,027,289
Deferred income taxes ................... -- 6,000
Rents receivable, accrued interest
and other receivables ................. 174,456 (54,270)
Land and improvements held for
future development, income
producing properties and
investment in partnerships ............ 203,110 (1,123,840)
Other assets ............................ (143,967) 10,522
Accounts and retainages payable,
accrued interest and other
liabilities .......................... (372,912) 25,935
----------- -----------
Net cash provided by
(used in) operating activities ............. $ 216,406 $ (459,084)
=========== ===========
WESTLAND DEVELOPMENT CO., INC.
NOTES TO THE FINANCIAL STATEMENTS
(unaudited)
March 31, 1996
1. The balance sheet at March 31, 1996, statements of cash flows and
statements of operations for the three month and nine month periods ended March
31, 1996 and March 31, 1995 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, 1995. The results of
operations for the nine months ended March 31, 1996 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 the nine and three month periods ended March 31, 1996
were 792,153 and 795,208, respectively and for the nine and three month periods
ended March 31, 1995 was 767,708.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.
During the nine months ended March 31, 1996, the Company's cash and cash
equivalents decreased by $198,899. During this period, the Company received
$216,406 from operations, $646,200 from borrowing activities and $96,425 from
the sale of stock, invested $539,649 in fixed and other assets and partnerships,
retired $142,656 of debt and paid dividends in the amount of $475,625.
During the third quarter of the current fiscal year, the Company had
revenue of $592,644 compared to $170,440 during the same period in the prior
fiscal year. Operating expenses during the three months ended March 31, 1996,
were $627,641 compared to $894,073 during the comparable period in 1995. For the
year to date, the Company has $2,091,660 in revenue and $2,169,800 in operating
expense compared to revenues of $815,983 and expense of $1,360,282 last year.
This significant increase in both the revenue and expense is due to changes
in the Company's operations. In April 1995, the Company began selling small
improved residential lots in addition to the large tracts it had sold in the
past. These sales amounted to $965,000 in this fiscal year and added $595,000 to
the cost of sales for the period. In addition, the Company has acquired two
commercial properties which have increased rental revenues and related interest
and other rental costs substantially over the prior year.
The Company may expend approximately $2,000,000 or more to acquire
replacement lands and property for the land sold to the National Park Service
under threat of condemnation. 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.
PART II. OTHER INFORMATION
ITEM 1: LEGAL PROCEEDINGS
CITY OF ALBUQUERQUE V. WESTLAND DEVELOPMENT CO., INC.
As previously reported, this case was appealed to the New Mexico Court of
Appeals which rendered its opinion on October 23, 1995 affirming the trial
court's decision awarding $75,000 in damages to Westland. Management believed
the District Court erroneously applied New Mexico and federal law and that the
Company was entitled to substantially greater damages. Thereafter, the Company
filed its Petition for Writ of Certiorari with the New Mexico Supreme Court,
which was denied. The Company filed a Petition for Writ of Certiorari with the
United States Supreme Court in April 1996.
There is no other material pending litigation involving the Company.
ITEM 2. CHANGES IN SECURITIES
NONE
ITEM 3. DEFAULTS IN SENIOR SECURITIES
NONE
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
NONE
ITEM 5. OTHER INFORMATION
During the third quarter Class A Director Raymundo Mares passed away. The
vacancy on the Board created by Mr. Mares' passing was filled by the Board by
the election of Charles V. Pena to fill Mr. Mares' remaining term.
Mr. Charles V. Pena has for the last 3 years been the owner of C J's New
Mexican Food Restaurant in Albuquerque, N. M. Prior to that for more than 20
years Mr. Pena was employed by Safeway Stores, Inc. in various capacities in
Albuquerque, N. M.
Mr. Pena served from 1993 - 1995 on the Board of St. Anthony's Brother
Foundation, a non - profit corporation providing clothing and housing to low
income persons.
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
In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
WESTLAND DEVELOPMENT CO., INC.
- ----------------------------------
May 7, 1996 Barbara Page
- ---------------------------------- ----------------------------------
Barbara Page, President,
Chief Executive Officer and
Chief Accounting Officer
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