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, 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 May 12, 1999:
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, 1999
ASSETS
Cash and cash equivalents ........................ $ 3,932,298
Receivables:
Real estate contracts ......................... $ 25,333
Note receivable - related party ............... 61,166
Other receivables ............................. 35,910 122,409
------------
Land and improvements held for
future development ............................ 7,060,056
Income producing properties, net ................. 6,932,281
Property and equipment, net of accumulated
depreciation of $487,395 ...................... 386,035
Investment in Partnerships and joint ventures .... 234,789
Other ............................................ 152,452
------------
$ 18,820,320
============
LIABILITIES AND STOCKHOLDER'S EQUITY
Accounts payable, accrued expenses
and other liabilities ......................... $ 511,608
Deferred income taxes ............................ 5,561,000
Notes, bonds, mortgages and assessments payable .. 5,869,370
------------
Total liabilities ............... 11,941,978
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 ............................. 6,202,215 6,878,342
------------ ------------
$ 18,820,320
============
WESTLAND DEVELOPMENT CO., INC.
STATEMENTS OF OPERATIONS
(unaudited)
For the three months ended
March 31,
1999 1998
---------- ----------
Revenues
Land ...................................... $ 803,614 $2,286,529
Deferred profit recognized
on installment sales .................... 322 7,211
Rentals ................................... 171,985 174,096
---------- ----------
975,921 2,467,836
Costs and expenses
Cost of land revenues ..................... 108,038 192,230
Cost of rentals ........................... 36,684 54,084
Other general and administrative .......... 453,633 490,541
---------- ----------
598,355 736,855
---------- ----------
Income from operations ................. 377,566 1,730,981
Other (income) expense
Interest income ........................... (38,752) (11,555)
Loss on sale of property and
equipment ............................ -- 371
Other (income) loss ....................... 7,040 (4,090)
Interest expense .......................... 103,962 158,869
---------- ----------
72,250 143,595
---------- ----------
Earnings before income taxes............ 305,316 1,587,386
Income tax expense ........................... 123,000 635,000
---------- ----------
NET EARNINGS ........................... $ 182,316 $ 952,386
========== ==========
Weighted average common and
common equivalent shares
outstanding, basic and diluted ............ 802,708 802,708
========== ==========
Basic and diluted earnings
per common share .......................... $ 0.23 $ 1.19
========== ==========
WESTLAND DEVELOPMENT CO., INC.
STATEMENTS OF OPERATIONS
(unaudited)
For the nine months ended
March 31,
1999 1998
---------- ----------
Revenues
Land ...................................... $4,210,847 $3,943,021
Deferred profit recognized
on installment sales .................... 30,306 14,422
Rentals ................................... 530,280 522,689
---------- ----------
4,771,433 4,480,132
Costs and expenses
Cost of land revenues ..................... 429,981 369,778
Cost of rentals ........................... 130,315 163,559
Other general and administrative .......... 1,440,603 1,652,631
---------- ----------
2,000,899 2,185,968
---------- ----------
Income from operations ................. 2,770,534 2,294,164
Other (income) expense
Interest income ........................... (93,271) (63,581)
Gain on sale of property and
equipment ............................ -- (629)
Other loss ................................ 478 13,165
Interest expense .......................... 404,517 480,759
---------- ----------
311,724 429,714
---------- ----------
Earnings before income taxes............ 2,458,810 1,864,450
Income tax expense ........................... 984,000 746,000
---------- ----------
NET EARNINGS ........................... $1,474,810 $1,118,450
========== ==========
Weighted average common and
common equivalent shares
outstanding, basic and diluted ............ 802,708 802,708
========== ==========
Basic and diluted earnings
(loss) per common share .................. $ 1.84 $ 1.39
========== ==========
WESTLAND DEVELOPMENT CO., INC.
STATEMENTS OF CASH FLOWS
(unaudited)
For the nine months ended
March 31,
1999 1998
------------ ------------
Cash flows from operating activities
Cash received from land sales
and collections on real
estate contracts receivable ................. $ 4,225,670 $ 3,803,977
Development and closing costs paid
on land sales ............................... (1,068,656) (714,673)
Cash received from rental operations .......... 536,197 525,019
Cash paid for rental operations ............... (208) (4,554)
Cash received (paid) for property taxes ....... (75,472) 2,347
Interest received ............................. 93,498 64,473
Interest paid ................................. (386,980) (515,950)
Income taxes paid ............................. (171,245) (150,000)
Legal and other general and
administrative costs paid ................... (1,253,743) (1,405,965)
Other ......................................... (171) (18,585)
------------ ------------
Net cash provided by
operating activities ........................ 1,898,890 1,586,089
------------ ------------
Cash flows from investing activities
Capital expenditures for income
producing and other properties .............. (52,881) (40,714)
Proceeds from sale of assets .................. -- 3,000
Cash distributions from
partnerships, net ........................... 6,313 13,000
------------ ------------
Net cash used by investing activities ........ (46,568) (24,714)
------------ ------------
Cash flows from financing activities
Borrowing on notes, mortgages and
assessments payable ......................... 1,506,041 692,064
Repayments of bonds, mortgages,
notes and assessments payable ............... (1,833,250) (1,169,110)
Payment of dividends .......................... (802,708) (602,031)
------------ ------------
Net cash used in
financing activities ....................... (1,129,917) (1,079,077)
------------ ------------
NET INCREASE IN CASH
AND CASH EQUIVALENTS ......................... 722,405 482,298
Cash and cash equivalents at
beginning of period .......................... 3,209,893 2,331,150
------------ ------------
Cash and cash equivalents at
end of period ................................ $ 3,932,298 $ 2,813,448
============ ============
Reconciliation of net earnings
to net cash provided by
operating activities
Net earnings ................................... $ 1,474,810 $ 1,118,450
Adjustments to reconcile net
earnings to net cash provided
by operating activities
Depreciation .............................. 170,819 201,730
Profit recognized on prior
years' installment sales ................ (30,306) (14,422)
Gain on sale of assets..................... -- (629)
Change in assets and liabilities
Income taxes recoverable/payable .......... 812,755 596,000
Rents receivable, accrued interest,
property tax and other assets ........... 12,605 (73,335)
Real estate contracts ..................... 34,441 47
Land and improvements held for
future development ...................... (602,583) (435,058)
Other assets .............................. (79,230) 86,414
Accounts and retainages payable,
accrued interest and other
liabilities ............................. 105,579 106,892
------------ ------------
Net cash provided by
operating activities ......................... $ 1,898,890 $ 1,586,089
============ ============
WESTLAND DEVELOPMENT CO., INC.
NOTES TO THE FINANCIAL STATEMENTS
(unaudited)
March 31, 1999
1. The balance sheet at March 31, 1999, statements of cash flows for the
nine month periods ended March 31, 1999 and March 31, 1998 and statements of
operations for the three and nine month periods ended March 31, 1999 and March
31, 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 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, 1998. The results of operations for the nine months ended
March 31, 1999 are not necessarily indicative of operating results for the full
year.
2. The computation of net earnings per common 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, 1999 and March 31, 1998 was
802,708.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
During the nine months ended March 31, 1999, the Company's cash and cash
equivalents increased by $ 722,405. During this period, operations provided
$1,898,890, the Company invested $46,568, net, in fixed and other assets,
retired $1,833,250 of debt, borrowed $1,506,041 and paid dividends in the amount
of $802,708.
During the third quarter of the current fiscal year, the Company had
revenues of $975,921 compared to $2,467,836 during the same period in the prior
fiscal year. Operating costs and expenses during the three months ended March
31, 1999, were $598,355 compared to $736,855 during the comparable period in
1998. Although there was a material decrease in revenue for the quarter from
fiscal 1998 to 1999, total revenue for the current year to date is $4,771,433
compared to $4,480,132 in 1998. The difference in quarterly revenue is due to
timing differences of large, single parcel sales to the National Park Service.
Operating costs and expenses for the current fiscal year to date are $2,000,899
compared to $2,185,968 in 1998.
Prior to June 30, 1999, the Company may expend approximately $800,000 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.
Presently, management has not completed its assessment of Year 2000 issues.
The total cost of compliance in both information and non-information technology
systems is expected to be less than $30,000. Since a substantial portion of this
cost is third party hardware and software, the effect on net earnings will be
less than the total. Changes in internal systems are taking place in the second
quarter of calendar 1999. Determination of level of risk in the Company's
material relationships with third parties is incomplete, but is expected to be
finished by fiscal 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: May 12, 1999 By: Barbara Page
---------------------------
Barbara Page, President,
Chief Executive Officer and
Chief Accounting Officer
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