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 December 31, 1995
[ ]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 February 9, 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)
December 31, 1995
ASSETS
Cash and cash equivalents ........................ $ 1,799,702
Receivables:
Real estate contracts ......................... $ 164,793
Less related deferred profit ............. 115,321
-----------
49,472
Other receivables ............................. 66,234
Accrued interest .............................. 1,283 116,989
-----------
Land and improvements held for
future development ............................ 5,490,551
Income producing properties, net ................. 3,733,402
Property and equipment, net of accumulated
depreciation of $328,138 ...................... 416,426
Investment in partnerships and joint ventures .... 400,631
Other ............................................ 557,687
-----------
$12,515,388
===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable, accrued expenses
and other liabilities ........................ $ 715,952
Accrued interest payable ........................ 35,240
Deferred income taxes ........................... 3,265,000
Notes, bonds, mortgages and assessments payable . 4,034,331
-----------
Total liabilities .............. 8,050,523
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 ............................ 3,875,063
-----------
4,464,865
-----------
$12,515,388
===========
WESTLAND DEVELOPMENT CO., INC.
STATEMENTS OF OPERATIONS
(unaudited)
For the 3 months ended
1995 1994
Revenues ----------- -----------
Land ...................................... $ 509,578 $ 404,955
Deferred profit recognized
on installment sales .................... 11,809 6,440
Rentals ................................... 111,195 9,481
--------- ---------
632,582 420,876
Costs and expenses
Cost of land revenues ..................... 195,138 10,106
Cost of rentals ........................... 32,986 11,876
Other general and administrative .......... 524,357 425,176
Legal ..................................... 9,921 42,739
--------- ---------
762,402 489,897
--------- ---------
Loss from operations ................... (129,820) (69,021)
Other (income) expense
Interest income ........................... (24,211) (68,750)
Gain on sale of property and
equipment ............................ (50) (128)
Other income .............................. (18,713) (71,495)
Interest expense .......................... 105,992 24,583
Loss on partnership operations ............ 1,648 --
--------- ---------
64,666 (115,790)
Earnings (loss) before income .......... -- --
taxes ............................... (194,486) 46,769
Income taxes expense ......................... (28,700) --
--------- ---------
NET EARNINGS(LOSS) ..................... $(165,786) $ 46,769
========= =========
Weighted average common and
common equivalent shares
outstanding ............................... 794,393 767,708
========= =========
Net earnings (loss) per common and
common equivalent share ................... $ (.21) $ .06
========= =========
WESTLAND DEVELOPMENT CO., INC.
STATEMENTS OF OPERATIONS
(unaudited)
For the 6 months ended
December 31,
1995 1994
Revenues ----------- -----------
Land .................................... $ 1,297,900 $ 608,606
Deferred profit recognized
on installment sales .................. 18,860 16,718
Rentals ................................. 182,256 20,219
----------- -----------
1,499,016 645,543
Costs and expenses
Cost of land revenues ................... 490,198 11,376
Cost of rentals ......................... 66,519 22,886
Other general and administrative ........ 938,248 763,984
Legal ................................... 47,194 67,963
----------- -----------
1,542,159 866,209
----------- -----------
Loss from operations ................. (43,143) (220,666)
Other (income) expense
Interest income ......................... (68,220) (98,630)
Gain on sale of property and
equipment .......................... (150) (240)
Other income ............................ (33,325) (80,276)
Interest expense ........................ 180,649 50,547
Loss on partnership operations .......... 1,648 --
----------- -----------
80,602 (128,599)
----------- -----------
Loss before income taxes ............. (123,745) (92,067)
Income taxes expense ....................... -- --
----------- -----------
NET EARNINGS(LOSS) ................... $ (123,745) $ (92,067)
=========== ===========
Weighted average common and
common equivalent shares
outstanding ............................. 790,643 767,708
=========== ===========
Net loss per common and
common equivalent share ................. $ (.16) $ (.12)
=========== ===========
WESTLAND DEVELOPMENT CO., INC.
STATEMENTS OF CASH FLOWS
(unaudited)
For the six months ended
December 31,
1995 1994
------------ ------------
Cash flows from operating activities
Cash received from land sales
and collections on real
estate contracts receivable ................. $ 1,931,595 $ 562,626
Cash paid to develop real estate .............. (433,976) (336,386)
Cash received from rental operations .......... 213,850 160,744
Cash paid for rental operations ............... (5,099) (6,192)
Cash paid for property taxes
and maintenance ............................ (92,115) (51,190)
Purchase of investments ....................... -- (13,647,908)
Proceeds on sale and maturity of investments .. -- 13,912,470
Interest received ............................. 57,246 84,215
Interest paid ................................. (188,128) (23,492)
Income taxes(paid)received .................... (200,050) 6,603
Legal and other general and
administrative costs paid ................... (1,186,458) (745,737)
Other income .................................. 36,677 2,536
------------ ------------
Net cash provided by
(used in) operating activities ......... 133,542 (81,711)
------------ ------------
Cash flows from investing activities
Capital expenditures for income
producing and other properties .............. (440,297) (226,720)
Proceeds from sale of assets .................. 150 532
Sinking fund deposit .......................... -- (248,760)
Net cash used in investing ..................... -- --
activities .................................. (440,147) (474,948)
------------ ------------
Cash flows from financing activities
Borrowing on notes, mortgages and
assessments payable ........................ 646,200 67,445
Proceeds from sale of stock .................... 96,425 --
Repayments of bonds, mortgages,
notes and assessments payable ............... (78,496) (70,819)
Payment of dividends .......................... (475,625) (767,708)
------------ ------------
Net cash provided by (used in)
financing activities ......................... 188,504 (771,082)
------------ ------------
NET DECREASE IN CASH
AND CASH EQUIVALENTS ......................... (118,101) (1,327,741)
Cash and cash equivalents at
beginning of period .......................... 1,917,803 2,791,233
------------ ------------
Cash and cash equivalents at
end of period ................................ $ 1,799,702 $ 1,463,492
============ ============
WESTLAND DEVELOPMENT CO., INC.
STATEMENTS OF CASH FLOWS (CONTINUED)
(unaudited)
For the six months ended
December 31,
1995 1994
Reconciliation of net ----------- -----------
loss to net cash provided by
(used in) operating activities
Net loss ....................................... $(123,745) $ (92,067)
Adjustments to reconcile net
earnings(loss)to net cash used in
operating activities
Depreciation .............................. 85,125 15,873
Collection on real estate
contracts receivable .................... 457,982 46,670
Profit recognized on prior
years' installment sales ................ (18,860) (16,718)
Gain on sale of assets .................... (150) (240)
Change in
Investments ............................... -- 264,965
Deferred income taxes ..................... -- 6,000
Rents receivable, accrued interest
and other receivables ................... 163,827 (42,695)
Land and improvements held for
future development, income
producing properties and
investment in partnerships .............. 141,351 (340,433)
Other assets .............................. (92,863) 62,046
Accounts and retainages payable,
accrued interest and other
liabilities ............................ (479,125) 14,888
--------- ---------
Net cash provided by
(used in) operating activities ............... $ 133,542 $ (81,711)
========= =========
WESTLAND DEVELOPMENT CO., INC.
NOTES TO THE FINANCIAL STATEMENTS
(unaudited)
December 31, 1995
1. The balance sheet at December 31, 1995, statements of cash flows and
statements of operations for the three month and six month periods ended
December 31, 1995 and December 31, 1994 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 six months ended December 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 the six and three month periods ended December 31, 1995
were 790,643 and 794,393, respectively and for the six and three month periods
ended December 31, 1994 was 767,708.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.
During the six months ended December 31, 1995, the Company's cash and cash
equivalents decreased by $118,101. During this period, the Company received
$133,692 from operations, $646,200 from borrowing activities and $96,425 from
the sale of stock, invested $440,297 in fixed and other assets, retired $78,496
of debt and paid dividends in the amount of $475,625.
During the second quarter of the current fiscal year, the Company had
revenue of $632,582 compared to $420,876 during the same period in the prior
fiscal year. Operating expenses during the three months ended December 31, 1995,
were $762,402 compared to $489,897 during the comparable period in 1994. For the
year to date, the Company has $1,499,016 in revenue and $1,542,159 in operating
expense compared to revenues of $645,543 and expense of $866,209 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 $747,000 in this fiscal year and added $444,000 to
the cost of sales for the period. In addition, the Company has acquired two
commercial properties which have increased rental revenues by $162,000 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 issued its opinion on October 23, 1995 affirming the trial court's
decision awarding $75,000 in damages to Westland. Management believes the
District Court erroneously applied New Mexico law and that the Company is
entitled to substantially greater damages and therefore first filed its Petition
for Writ of Certiorari with the New Mexico Supreme Court, which was denied.
Management now intends to file a Petition for Writ of Certiorari with the United
States Supreme Court. There is no other threatened or 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
(a) Election of Directors
On November 15, 1995, at the Issuer's Annual Meeting of the Shareholders,
the shareholders elected three Class B Directors to its Board of Directors. The
persons so elected were Sosimo Sanchez Padilla, Carlos Saavedra and Joe Chavez.
(b) Continuing Directors
Directors continuing after the meeting were Class A Directors Barbara Page,
Polecarpio (Lee) Anaya and Raymundo Mares and Class C Directors David Armijo,
Josie Castillo and Carmel Chavez.
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: February 9, 1996 BY: Barbara Page
------------------- --------------------------
Barbara Page, President,
Chief Executive Officer and
Chief Accounting Officer
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