Form 10-QSB
U.S. Securities and Exchange Commission
Washington, D.C. 20549
(Mark One)
[XX]QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended December 31, 1997
[ ]TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
EXCHANGE ACT
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
- -------------------------------------------------------------------------------
(Address of principal executive offices)
(505)831-9600
- -------------------------------------------------------------------------------
(Issuer's telephone number)
N/A
- -------------------------------------------------------------------------------
(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 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 [ ]
State the number of shares outstanding of each of the issuer's classes of
common equity as of February 10, 1998:
No Par Value Common: 716,608
Class A $1.00 Par Value Common: NONE
Class B $1.00 Par Value Common: 86,100
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, 1997
ASSETS
Cash and cash equivalents ........................ $ 2,379,698
Receivables:
Real estate contracts ......................... $ 79,528
Less related deferred profit ............. 43,795
------------
35,733
Income taxes recoverable....................... 155,001
Note receivable - related party ............... 66,832
Other receivables ............................. 56,714 314,280
------------
Land and improvements held for
future development ............................ 6,093,454
Income producing properties, net ................. 7,032,959
Property and equipment, net of accumulated
depreciation of $423,896 ...................... 387,597
Investment in Partnerships and joint ventures .... 353,387
Other ............................................ 134,366
------------
$ 16,695,741
============
LIABILITIES AND STOCKHOLDER'S EQUITY
Accounts payable, accrued expenses
and other liabilities ......................... $ 313,076
Deferred income taxes ............................ 4,010,000
Notes, bonds, mortgages and assessments payable .. 7,254,521
------------
Total liabilities ............... 11,577,597
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,
86,100 shares .............................. 86,100
Additional paid-in capital .................... 581,527
Retained earnings ............................. 4,442,017 5,118,144
------------ ------------
$ 16,695,741
============
WESTLAND DEVELOPMENT CO., INC.
STATEMENTS OF OPERATIONS
(unaudited)
For the three months ended
December 31,
1997 1996
---------- ----------
Revenues
Land ...................................... $ 855,939 $1,120,253
Deferred profit recognized
on installment sales .................... 3,341 15,212
Rentals ................................... 172,896 175,676
---------- ----------
1,032,176 1,311,141
Costs and expenses
Cost of land revenues ..................... 148,376 202,774
Cost of rentals ........................... 54,356 30,675
Other general and administrative .......... 495,362 454,121
Legal ..................................... 299 2,315
---------- ----------
698,393 689,885
---------- ----------
Income(loss)from operations ............ 333,783 621,256
Other (income) expense
Interest income ........................... (24,274) (23,013)
Gain on sale of property and
equipment ............................ (1,000) (140)
Other (income) loss ....................... 18,821 209
Interest expense .......................... 156,564 180,411
---------- ----------
150,111 157,467
---------- ----------
Earnings before income taxes............ 183,672 463,789
Income tax expense ........................... 74,200 185,511
---------- ----------
NET EARNINGS ........................... $ 109,472 $ 278,278
========== ==========
Weighted average common and
common equivalent shares
outstanding ............................... 802,708 802,708
========== ==========
Net earnings per common share ................ $ .14 $ .35
========== ==========
WESTLAND DEVELOPMENT CO., INC.
STATEMENTS OF OPERATIONS
(unaudited)
For the six months ended
December 31,
1997 1996
---------- ----------
Revenues
Land ...................................... $1,656,490 $1,338,486
Deferred profit recognized
on installment sales .................... 7,212 22,123
Rentals ................................... 348,593 269,431
---------- ----------
2,012,295 1,630,040
Costs and expenses
Cost of land revenues ..................... 177,548 305,467
Cost of rentals ........................... 109,475 50,151
Other general and administrative .......... 1,159,685 970,702
Legal ..................................... 2,240 3,133
---------- ----------
1,448,948 1,329,453
---------- ----------
Income from operations ................. 563,347 300,587
Other (income) expense
Interest income ........................... (52,027) (51,142)
Gain on sale of property and
equipment ............................ (1,000) (1,752)
Other (income) loss ....................... 17,255 36,914
Interest expense .......................... 322,055 290,856
---------- ----------
286,283 274,876
---------- ----------
Earnings before income taxes............ 277,064 25,711
Income tax expense ........................... 111,000 10,280
---------- ----------
NET EARNINGS ........................... $ 166,064 $ 15,431
========== ==========
Weighted average common and
common equivalent shares
outstanding ............................... 802,708 801,689
========== ==========
Net earnings per common share ................ $ .21 $ .02
========== ==========
WESTLAND DEVELOPMENT CO., INC.
STATEMENTS OF CASH FLOWS
(unaudited)
For the six months ended
December 31,
1997 1996
------------ ------------
Cash flows from operating activities
Cash received from land sales
and collections on real
estate contracts receivable ................. $ 1,757,427 $ 1,395,050
Development and closing costs paid
on land sales ............................... (231,834) (515,845)
Cash received from rental operations .......... 353,831 265,250
Cash paid for rental operations ............... (3,267) (3,918)
Cash (paid) received for property taxes ....... (20,614) (55,603)
Interest received ............................. 51,579 75,208
Interest paid ................................. (358,259) (305,307)
Income taxes paid ............................. (80,000) (262,000)
Legal and other general and
administrative costs paid ................... (969,688) (865,792)
Other ......................................... (19,427) 985
------------ ------------
Net cash provided (used) by
operating activities ........................ 479,748 (271,972)
------------ ------------
Cash flows from investing activities
Capital expenditures for income
producing and other properties .............. (40,714) (994,178)
Proceeds from sale of assets .................. 1,000 1,873
Cash distributions from partnerships, net ..... 7,911 --
------------ ------------
Net cash used by investing activities ........ (31,803) (992,305)
------------ ------------
Cash flows from financing activities
Borrowing on notes, mortgages and
assessments payable ......................... 692,064 1,473,785
Proceeds from sale of stock ................... 41,325
Repayments of bonds, mortgages,
notes and assessments payable ............... (489,430) (1,021,607)
Payment of dividends .......................... (602,031) (480,125)
------------ ------------
Net cash provided by (used in)
financing activities ....................... (399,397) 13,378
------------ ------------
NET INCREASE (DECREASE) IN
CASH AND CASH EQUIVALENTS .................... 48,548 (1,250,899)
Cash and cash equivalents at
beginning of period .......................... 2,331,150 2,167,741
------------ ------------
Cash and cash equivalents at
end of period ................................ $ 2,379,698 $ 916,842
============ ============
Reconciliation of net earnings
to net cash provided (used)
by operating activities
Net earnings ................................... $ 166,064 $ 15,431
Adjustments to reconcile net
earnings to net cash provided
(used) by operating activities
Depreciation .............................. 135,605 71,905
Profit recognized on prior
years' installment sales ................ (7,212) (22,123)
Gain on sale of assets..................... (1,000) (1,752)
Change in
Income taxes recoverable/payable .......... 31,000 --
Rents receivable, accrued interest,
property tax and other assets ........... 93,700 (209,625)
Real estate contracts ..................... (10,495) 264,154
Land and improvements held for
future development ...................... (60,824) (211,180)
Other assets .............................. 75,268 92,849
Accounts and retainages payable,
accrued interest and other
liabilities ............................ 57,642 (271,631)
------------ ------------
Net cash provided (used) by
operating activities ......................... $ 479,748 $ (271,972)
============ ============
WESTLAND DEVELOPMENT CO., INC.
NOTES TO THE FINANCIAL STATEMENTS
(unaudited)
December 31, 1997
1. The balance sheet at December 31, 1997, statements of cash flows and
statements of operations for the three months ended December 31, 1997 and
December 31, 1996 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, 1997. The results of operations for the
six months ended December 31, 1997 are not necessarily indicative of operating
results for the full year.
2. The computation of net earnings (loss) per common share has been based
upon the weighted average number of shares of outstanding common stock and
common stock issuable without further consideration , which for the six and
three month periods ended December 31, 1997 were 802,708 and for the six and
three month periods ended December 31, 1996 were 801,689 and 802,708,
respectively.
3. The Company adopted Statement of Accounting Standards number 128,
Earnings Per Share, during the quarter ended December 31, 1997. Since the
Company has only common stock outstanding, the adoption had no effect on the
Company's financial statements.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
During the six months ended December 31, 1997, the Company's cash and cash
equivalents increased by $ 48,548. During this period, operations provided
$479,748, the Company invested $31,803, net, in fixed and other assets, retired
$489,430 of debt, borrowed $692,064 and paid dividends in the amount of
$602,031.
During the second quarter of the current fiscal year, the Company had
revenues of $1,032,176 compared to $1,311,141 during the same period in the
prior fiscal year. Operating costs and expenses during the three months ended
December 31, 1997, were $698,393 compared to $689,885 during the comparable
period in 1996. For the year to date, the Company earned revenues of $2,012,295
compared to $1,630,040 in 1996. The primary reason for the increase is large
single tract sales in 1997 exceeded those in 1996 by $575,000. Operating costs
and expenses for the current fiscal year to date are $1,448,948 compared to
$1,329,453 in 1997. The difference arises from increased non recurring expenses
in the 1st quarter of this fiscal year.
The Company may expend approximately $900,000 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
Other than the ordinary routine litigation incidental to the Company's
business, neither the Company nor any member of management is the subject of any
pending or threatened legal proceeding.
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
NONE
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) There are no exhibits required by Item 601 of Regulation S-B.
(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 10, 1998 By: Barbara Page
---------------------------
Barbara Page, President,
Chief Executive Officer and
Chief Accounting Officer
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