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 March 31, 1998
[ ]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 May 13, 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)
March 31, 1998
ASSETS
Cash and cash equivalents ........................ $ 2,813,448
Receivables:
Real estate contracts ......................... $ 68,986
Less related deferred profit ............. 36,585
------------
32,401
Income taxes recoverable....................... 155,001
Note receivable - related party ............... 66,225
Other receivables ............................. 217,157 470,784
------------
Land and improvements held for
future development ............................ 6,467,688
Income producing properties, net ................. 6,978,965
Property and equipment, net of accumulated
depreciation of $435,674 ...................... 373,095
Investment in Partnerships and joint ventures .... 352,154
Other ............................................ 126,563
------------
$ 17,582,697
============
LIABILITIES AND STOCKHOLDER'S EQUITY
Accounts payable, accrued expenses
and other liabilities ......................... $ 325,325
Deferred income taxes ............................ 4,612,000
Notes, bonds, mortgages and assessments payable .. 6,574,842
------------
Total liabilities ............... 11,512,167
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 ............................. 5,394,403 6,070,530
------------ ------------
$ 17,582,697
============
WESTLAND DEVELOPMENT CO., INC.
STATEMENTS OF OPERATIONS
(unaudited)
For the three months ended
March 31,
1998 1997
---------- ----------
Revenues
Land ...................................... $2,286,529 $ 34,793
Deferred profit recognized
on installment sales .................... 7,211 4,493
Rentals ................................... 174,096 173,120
---------- ----------
2,467,836 212,406
Costs and expenses
Cost of land revenues ..................... 192,230 (19,321)
Cost of rentals ........................... 54,084 47,817
Other general and administrative .......... 490,126 445,648
Legal ..................................... 415 3,125
---------- ----------
736,855 477,269
---------- ----------
Income (loss) from operations .......... 1,730,981 (264,863)
Other (income) expense
Interest income ........................... (11,555) (10,234)
Loss on sale of property and
equipment ............................ 371 --
Other (income) loss ....................... (4,090) 1,650
Interest expense .......................... 158,869 153,154
---------- ----------
143,595 144,570
---------- ----------
Earnings (loss) before income taxes..... 1,587,386 (409,433)
Income tax expense (benefit) ................. 635,000 (163,280)
---------- ----------
NET EARNINGS (LOSS) .................... $ 952,386 $ (246,153)
========== ==========
Weighted average common and
common equivalent shares
outstanding, basic and diluted ............ 802,708 802,708
========== ==========
Basic and diluted earnings
(loss) per common share ................... $ 1.19 $ (.31)
========== ==========
WESTLAND DEVELOPMENT CO., INC.
STATEMENTS OF OPERATIONS
(unaudited)
For the nine months ended
March 31,
1998 1997
---------- ----------
Revenues
Land ...................................... $3,943,021 $1,373,279
Deferred profit recognized
on installment sales .................... 14,422 26,616
Rentals ................................... 522,689 442,551
---------- ----------
4,480,132 1,842,446
Costs and expenses
Cost of land revenues ..................... 369,778 286,146
Cost of rentals ........................... 163,559 97,968
Other general and administrative .......... 1,649,976 1,416,350
Legal ..................................... 2,655 6,258
---------- ----------
2,185,968 1,806,722
---------- ----------
Income from operations ................. 2,294,164 35,724
Other (income) expense
Interest income ........................... (63,581) (61,376)
Gain on sale of property and
equipment ............................ (629) (1,752)
Other (income) loss ....................... 13,165 38,564
Interest expense .......................... 480,759 444,010
---------- ----------
429,714 419,446
---------- ----------
Earnings (loss) before income taxes..... 1,864,450 (383,722)
Income tax expense (benefit) ................. 746,000 (153,000)
---------- ----------
NET EARNINGS (LOSS) .................... $1,118,450 $ (230,722)
========== ==========
Weighted average common and
common equivalent shares
outstanding, basic and diluted ............ 802,708 802,024
========== ==========
Basic and diluted earnings
(loss) per common share .................. $ 1.39 $ (.29)
========== ==========
WESTLAND DEVELOPMENT CO., INC.
STATEMENTS OF CASH FLOWS
(unaudited)
For the nine months ended
March 31,
1998 1997
------------ ------------
Cash flows from operating activities
Cash received from land sales
and collections on real
estate contracts receivable ................. $ 3,803,977 $ 1,588,331
Development and closing costs paid
on land sales ............................... (714,673) (824,545)
Cash received from rental operations .......... 525,019 441,420
Cash paid for rental operations ............... (4,554) (3,975)
Cash received (paid) for property taxes ....... 2,347 (57,828)
Interest received ............................. 64,473 81,021
Interest paid ................................. (515,950) (434,096)
Income taxes paid ............................. (150,000) (262,000)
Legal and other general and
administrative costs paid ................... (1,405,965) (1,295,883)
Other ......................................... (18,585) 6,600
------------ ------------
Net cash provided (used) by
operating activities ........................ 1,586,089 (760,955)
------------ ------------
Cash flows from investing activities
Capital expenditures for income
producing and other properties .............. (40,714) (893,790)
Proceeds from sale of assets .................. 3,000 1,873
Cash distributions from
(investment in) partnerships, net ............. 13,000 (110,445)
------------ ------------
Net cash used by investing activities ........ (24,714) (1,002,362)
------------ ------------
Cash flows from financing activities
Borrowing on notes, mortgages and
assessments payable ......................... 692,064 1,811,148
Proceeds from sale of stock ................... -- 41,325
Repayments of bonds, mortgages,
notes and assessments payable ............... (1,169,110) (1,079,619)
Payment of dividends .......................... (602,031) (480,125)
------------ ------------
Net cash provided by (used in)
financing activities ....................... (1,079,077) 292,729
------------ ------------
NET INCREASE (DECREASE) IN
CASH AND CASH EQUIVALENTS .................... 482,298 (1,470,588)
Cash and cash equivalents at
beginning of period .......................... 2,331,150 2,167,741
------------ ------------
Cash and cash equivalents at
end of period ................................ $ 2,813,448 $ 697,153
============ ============
Reconciliation of net earnings
(loss) to net cash provided
(used) by operating activities
Net earnings (loss) ............................ $ 1,118,450 $ (230,722)
Adjustments to reconcile net
earnings (loss) to net cash provided
(used) by operating activities
Depreciation .............................. 201,730 132,808
Profit recognized on prior
years' installment sales ................ (14,422) (26,617)
Gain on sale of assets..................... (629) (1,752)
Change in assets and liabilities
Income taxes recoverable/payable .......... 596,000 --
Rents receivable, accrued interest,
property tax and other assets ........... (73,335) (43,323)
Real estate contracts ..................... 47 272,664
Land and improvements held for
future development ...................... (435,058) (539,208)
Other assets .............................. 86,414 68,958
Accounts and retainages payable,
accrued interest and other
liabilities ............................. 106,892 (393,763)
------------ ------------
Net cash provided (used) by
operating activities ......................... $ 1,586,089 $ (760,955)
============ ============
WESTLAND DEVELOPMENT CO., INC.
NOTES TO THE FINANCIAL STATEMENTS
(unaudited)
March 31, 1998
1. The balance sheet at March 31, 1998, statements of cash flows for the
nine month periods ended March 31, 1998 and March 31, 1997 and statements of
operations for the three and nine month periods ended March 31, 1998 and March
31, 1997 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 nine months ended
March 31, 1998 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 nine and
three month periods ended March 31, 1998 and three month period ended March 31,
1997 were 802,708 and for the nine month period ended March 31, 1997 were
802,024.
3. The Company adopted Statement of Financial 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 nine months ended March 31, 1998, the Company's cash and cash
equivalents increased by $ 482,298. During this period, operations provided
$1,586,089, the Company invested $24,714, net, in fixed and other assets,
retired $1,169,110 of debt, borrowed $692,064 and paid dividends in the amount
of $602,031.
During the third quarter of the current fiscal year, the Company had
revenues of $2,467,836 compared to $212,406 during the same period in the prior
fiscal year. Operating costs and expenses during the three months ended March
31, 1998, were $736,855 compared to $477,269 during the comparable period in
1997. For the year to date, the Company earned revenues of $4,480,132 compared
to $1,842,446 in 1997. The primary reason for the increase is the sale to the
National Park Service of a single tract for $1,507,600. Operating costs and
expenses for the current fiscal year to date are $2,185,968 compared to
$1,806,722 in 1997. The difference arises from increased non recurring expenses
in the 1st quarter of this fiscal year.
The Company may expend approximately $2,300,000 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: May 13, 1998 By: Barbara Page
---------------------------
Barbara Page, President,
Chief Executive Officer and
Chief Accounting Officer
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