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, 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 February 11, 2000:
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)
December 31, 1999
ASSETS
Cash and cash equivalents ........................ $ 503,282
Short-term investments ........................... 4,629,552
Receivables:
Real estate contracts ......................... $ 71,018
Note receivable - related party ............... 104,624
Other receivables ............................. 151,674 327,316
------------
Land and improvements held for
future development ............................ 6,359,429
Income producing properties, net ................. 8,212,817
Property and equipment, net of accumulated
depreciation of $510,197 ...................... 389,828
Investment in Partnerships and joint ventures .... 241,173
Other ............................................ 146,644
------------
$ 20,810,041
============
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable, accrued expenses
and other liabilities ......................... $ 410,516
Current income taxes ............................. 617,000
Deferred income taxes ............................ 5,312,000
Notes, bonds, mortgages and assessments payable .. 7,005,617
------------
Total liabilities ............... 13,345,133
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 ............................. 6,788,781 7,464,908
------------ ------------
$ 20,810,041
============
WESTLAND DEVELOPMENT CO., INC.
STATEMENTS OF OPERATIONS
(unaudited)
For the 3 months ended
December 31,
1999 1998
----------- -----------
Revenues
Land ...................................... $ 377,944 $ 3,103,827
Deferred profit recognized
on installment sales .................... -- 28,766
Rentals ................................... 199,176 174,985
----------- -----------
577,120 3,307,578
Costs and expenses
Cost of land revenues ..................... 116,295 150,015
Cost of rentals ........................... 111,831 47,654
General and administrative ................ 472,933 462,295
----------- -----------
701,059 659,964
----------- -----------
(Loss) income from operations .......... (123,939) 2,647,614
Other (income) expense
Interest income ........................... (62,305) (25,740)
Other income .............................. 62,956 (4,406)
Interest expense .......................... 152,971 135,189
----------- -----------
153,622 105,043`
----------- -----------
(Loss) earnings before income taxes..... (277,561) 2,542,571
Income tax (benefit) expense ................. (121,000) 1,017,000
----------- -----------
NET (LOSS) EARNINGS .................... $ (156,561) $ 1,525,571
=========== ===========
Weighted average common shares
outstanding ............................... 802,708 802,708
=========== ===========
(Loss) Earnings per common share ............. $ (.20) $ 1.90
=========== ===========
WESTLAND DEVELOPMENT CO., INC.
STATEMENTS OF OPERATIONS
(unaudited)
For the 6 months ended
December 31,
1999 1998
----------- -----------
Revenues
Land ...................................... $ 4,333,201 $ 3,407,232
Deferred profit recognized
on installment sales .................... -- 29,984
Rentals ................................... 404,773 358,295
----------- -----------
4,737,974 3,795,511
Costs and expenses
Cost of land revenues ..................... 831,747 321,943
Cost of rentals ........................... 163,170 93,630
General and administrative ................ 903,923 986,971
----------- -----------
1,898,840 1,402,544
----------- -----------
Income from operations ................. 2,839,134 2,392,967
Other (income) expense
Interest income ........................... (107,424) (54,520)
Other income .............................. (7,737) (6,561)
Interest expense .......................... 328,779 300,555
----------- -----------
213,618 239,474
----------- -----------
Earnings before income taxes ........... 2,625,516 2,153,493
Income tax expense ........................... 1,050,000 861,000
----------- -----------
NET EARNINGS ........................... $ 1,575,516 $ 1,292,493
=========== ===========
Weighted average common shares
outstanding ............................... 802,708 802,708
=========== ==========
Earnings per common share .................... $ 1.96 $ 1.61
=========== ==========
WESTLAND DEVELOPMENT CO., INC.
STATEMENTS OF CASH FLOWS
(unaudited)
For the six months ended
December 31,
1999 1998
------------- -------------
Cash flows from operating activities
Cash received from land sales
and collections on real
estate contracts receivable ................. $ 4,299,539 $ 3,462,469
Development and closing costs paid
on land sales ............................... (285,861) (507,964)
Cash received from rental operations .......... 409,050 365,434
Cash paid for rental operations ............... (69,064) (5,642)
Cash paid for property taxes .................. (43,286) (76,592)
Interest received ............................. 107,510 54,531
Interest paid ................................. (330,205) (294,283)
Income taxes paid ............................. (428,000) (147,000)
General and administrative costs paid ......... (1,102,797) (904,663)
Other ......................................... (9,260) 3,752
------------ ------------
Net cash provided by
operating activities ........................ 2,547,626 1,950,042
------------ ------------
Cash flows from investing activities
Capital expenditures for income
producing and other properties .............. (119,325) (43,789)
Investment in partnerships and joint ventures . (1,585) (187)
Change in short-term investments .............. (2,051,533) --
Proceeds from note receivable-related party ... 1,609 --
Proceeds from sale of assets .................. 50 --
------------ ------------
Net cash used in investing activities ........ (2,170,784) (43,976)
------------ ------------
Cash flows from financing activities
Borrowing on notes, mortgages and
assessments payable ......................... 581,475 800,000
Repayments of bonds, mortgages,
notes and assessments payable ............... (952,509) (1,029,546)
Payment of dividends .......................... (802,708) (802,708)
------------ ------------
Net cash used in
financing activities ....................... (1,173,742) (1,032,254)
------------ ------------
NET DECREASE IN CASH
AND CASH EQUIVALENTS ......................... (796,900) 873,812
Cash and cash equivalents at
beginning of period .......................... 1,300,182 3,209,893
------------ ------------
Cash and cash equivalents at
end of period ................................ $ 503,282 $ 4,083,705
============ ============
Reconciliation of net earnings
(loss) to net cash used in
operating activities
Net earnings ................................... $ 1,574,516 $ 1,292,493
Adjustments to reconcile net
earnings to net cash provided
(used) in operating activities
Depreciation .............................. 128,905 113,474
Profit recognized on prior
years' installment sales ................ -- (29,984)
Deferred income tax ....................... 1,034,000
Loss on retirement/gain on sale of assets . (50) 2,071
Change in
Rents receivable, accrued interest,
property tax and other assets ........... (112,343) 10,863
Real estate contracts ..................... (46,727) 33,466
Land and improvements held for
future development and income
producing properties .................... 538,987 (145,324)
Other assets .............................. (2,284) (48,936)
Accounts and retainages payable,
accrued interest and other
liabilities ............................ (155,378) 9,919
Income taxes payable/recoverable .......... 622,000 (320,000)
------------ ------------
Net cash (used in) provided by
operating activities ......................... $ 2,547,626 $ 1,950,042
============ ============
WESTLAND DEVELOPMENT CO., INC.
NOTES TO THE FINANCIAL STATEMENTS
(unaudited)
December 31, 1999
1. The balance sheet at December 31, 1999, statements of operations for the
three and six month periods ended December 31, 1999 and 1998 and statements of
cash flows for six month periods ended December 31, 1999 and 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 and six months ended
December 31, 1999 are not necessarily indicative of operating results for the
full year.
2. The computation of 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, which for the three and six month
periods ended December 31, 1999 and December 31, 1998 were 802,708.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
During the six months ended December 31, 1999, the Company's cash and cash
equivalents decreased by $796,900. During this period, operations provided
$2,547,626, the Company invested $2,170,784 in fixed and other assets, primarily
in short-term investments, retired $371,034 of debt, net and paid dividends in
the amount of $802,708.
During the second quarter of the current fiscal year, the Company had
revenues of $577,120 compared to $3,307,578 during the same period in the prior
fiscal year. Land revenues decreased significantly primarily due to the sale in
1998 of a parcel to the National Park Service for approximately $2,605,000.
Operating costs and expenses during the three months ended December 31, 1999,
were $701,059 compared to $659,964 during the comparable period in 1998. For the
year to date, revenues were $4,737,974 in 1999 and $3,795,511 in 1998. Operating
costs and expenses were $1,898,840 in 1999 and $1,402,544 in 1998. The
differences arise from significantly higher large parcel and small lot land
sales and related costs of sales in 1999 compared to 1998.
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.
To date, the Company has noted no adverse consequences related to year 2000
issues. Management will continue to monitor the Company's internal systems and
exchanges with third party vendors, suppliers, service providers and customers.
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
has been third party hardware and software, the effect on net earnings has been
immaterial. Changes in internal systems are complete and any remaining costs
will be insignificant. Determination of level of risk in the Company's material
relationships with third parties is considered negligible. Therefore,
contingency plans have not been made.
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 11, 2000 By: Barbara Page
---------------------------
Barbara Page, President,
Chief Executive Officer and
Chief Accounting Officer
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