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 September 30, 1999
[ ]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 November 11, 1999:
No Par Value Common: 716,608
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)
September 30, 1999
ASSETS
Cash and cash equivalents ........................ $ 177,025
Short-term investments ........................... 5,487,842
Receivables:
Real estate contracts ......................... $ 72,857
Note receivable - related party ............... 59,023
Other receivables ............................. 182,199 314,079
------------
Land and improvements held for
future development ............................ 6,436,122
Income producing properties, net ................. 8,173,671
Property and equipment, net of accumulated
depreciation of $494,429 ...................... 374,322
Investment in Partnerships and joint ventures .... 243,117
Other ............................................ 197,857
------------
$ 21,404,035
============
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable, accrued expenses
and other liabilities ......................... $ 414,597
Current income taxes ............................. 1,166,000
Deferred income taxes ............................ 5,312,000
Notes, bonds, mortgages and assessments payable .. 6,889,969
------------
Total liabilities ............... 13,782,566
Stockholders' equity
Common stock - no par value;
authorized, 736,668 shares;
issued and outstanding,
716,608 shares ............................. 8,500
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 ............................. 6,945,342 7,621,469
------------ ------------
$ 21,404,035
============
WESTLAND DEVELOPMENT CO., INC.
STATEMENTS OF OPERATIONS
(unaudited)
For the 3 months ended
September 30,
1999 1998
----------- ----------
Revenues
Land ...................................... $ 3,955,257 $ 303,405
Deferred profit recognized
on installment sales .................... -- 1,218
Rentals ................................... 205,597 183,310
----------- ----------
4,160,854 487,933
Costs and expenses
Cost of land revenues ..................... 715,452 171,928
Cost of rentals ........................... 51,339 45,976
General and administrative ................ 430,990 524,676
----------- ----------
1,197,781 742,580
----------- ----------
(Loss)income from operations ........... 2,963,073 (254,647)
Other (income) expense
Interest income ........................... (45,119) (28,779)
Other income .............................. (70,694) (2,156)
Interest expense .......................... 175,808 165,366
----------- ----------
59,995 134,431
----------- ----------
(Loss)earnings before income taxes...... 2,903,078 (389,078)
Income tax expense (benefit).................. 1,171,000 (156,000)
----------- ----------
NET EARNINGS (LOSS) .................... $ 1,732,078 $(233,078)
=========== ==========
Weighted average common shares
outstanding ............................... 802,708 802,708
=========== ==========
Earnings (loss) per common share ............. $ 2.16 $ (.29)
=========== ==========
WESTLAND DEVELOPMENT CO., INC.
STATEMENTS OF CASH FLOWS
(unaudited)
For the three months ended
September 30,
1999 1998
------------- -------------
Cash flows from operating activities
Cash received from land sales
and collections on real
estate contracts receivable ................. $ 3,922,889 $ 247,680
Development and closing costs paid
on land sales ............................... (162,097) (105,075)
Cash received from rental operations .......... 211,149 216,125
Cash paid for rental operations ............... (4,050) (1,785)
Cash (paid) received for property taxes ....... (8,507) (31,384)
Interest received ............................. 44,439 28,255
Interest paid ................................. (173,794) (165,023)
Income taxes paid ............................. -- (146,999)
General and administrative costs paid ......... (664,339) (437,536)
Other ......................................... 1,474 35
------------ ------------
Net cash (used) provided by
operating activities ........................ 3,167,164 (395,707)
------------ ------------
Cash flows from investing activities
Capital expenditures for income
producing and other properties .............. (84,309) (16,245)
Investment in partnerships and joint ventures . (7,584) --
Change in short-term investments .............. (2,909,823) --
Proceeds from note receivable-related party ... 785 1,241
------------ ------------
Net cash used in investing activities ........ (3,000,931) (15,004)
------------ ------------
Cash flows from financing activities
Borrowing on notes, mortgages and
assessments payable ......................... 281,476 --
Repayments of bonds, mortgages,
notes and assessments payable ............... (768,158) (289,243)
Payment of dividends .......................... (802,708) (802,708)
------------ ------------
Net cash used in
financing activities ....................... (1,289,390) (1,091,951)
------------ ------------
NET DECREASE IN CASH
AND CASH EQUIVALENTS ......................... (1,123,157) (1,502,662)
Cash and cash equivalents at
beginning of period .......................... 1,300,182 3,209,893
------------ ------------
Cash and cash equivalents at
end of period ................................ $ 177,025 $ 1,707,231
============ ============
Reconciliation of net earnings
(loss) to net cash used in
operating activities
Net (loss) earnings ............................ $ 1,732,078 $ (233,078)
Adjustments to reconcile net
earnings (loss) to net cash provided
(used) in operating activities
Depreciation .............................. 64,378 56,484
Profit recognized on prior
years' installment sales ................ -- (1,218)
Change in
Rents receivable, accrued interest,
property tax and other assets ........... (142,868) (23,685)
Real estate contracts ..................... (48,566) 2,228
Land and improvements held for
future development and income
producing properties .................... 545,456 128,631
Other assets .............................. (49,442) (35,320)
Accounts and retainages payable,
accrued interest and other
liabilities ............................ (104,872) (289,749)
Income taxes payable ...................... 1,171,000 --
------------ ------------
Net cash (used in) provided by
operating activities ......................... $ 3,167,164 $ (395,707)
============ ============
WESTLAND DEVELOPMENT CO., INC.
NOTES TO THE FINANCIAL STATEMENTS
(unaudited)
September 30, 1999
1. The balance sheet at September 30, 1999, statements of cash flows and
statements of operations for the three months ended September 30, 1999 and
September 30, 1998 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 principles 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, 1999. The results of operations for the
three months ended September 30, 1999 are not necessarily indicative of
operating results for the full year.
2. The computation of 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 three month periods
ended September 30, 1999 and September 30, 1998 were 802,708.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
During the three months ended September 30, 1999, the Company's cash and
cash equivalents decreased by $1,123,157. During this period, operations
provided $3,167,164, the Company invested $3,000,931 in fixed and other assets,
primarily in short-term investments, retired $486,682 of debt and paid dividends
in the amount of $802,708.
During the first quarter of the current fiscal year, the Company had
revenues of $4,160,854 compared to $487,933 during the same period in the prior
fiscal year. Land revenues increased significantly primarily due to the sale in
1999 of a two parcels for approximately $3,063,000. Operating expenses during
the three months ended September 30, 1999, were $1,197,781 compared to $742,580
during the comparable period in 1998. The increase was due principally to an
increase in cost of land revenues of $543,524, partially offset by a decrease in
general and administrative expense of $93,686.
The Company may expend approximately $1,500,000 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.
Management has assessed the Year 2000 issues and determined that their
consequences would not have a material effect on the Company's business, results
of operations or financial condition. The total cost of compliance in both
information and non-information technology systems has been approximately
$30,000. Since a substantial portion of this cost is third party hardware and
software, the effect on net earnings has been be immaterial. Changes in internal
systems are substantially complete and any remaining costs will be
insignificant. Determination of level of risk in the Company's material
relationships with third parties is incomplete, but is expected to be finished
by year end, and is considered negligible. Therefore, contingency plans have not
been formulated at this time.
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: November 11, 1999 By: Barbara Page
---------------------------
Barbara Page, President,
Chief Executive Officer and
Chief Accounting Officer
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