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, 2000
[ ]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, 2000
ASSETS
Cash and cash equivalents ........................ $ 1,800,174
Short-term investments ........................... 2,671,900
Receivables:
Real estate contracts ......................... $ 68,820
Note receivable - related party ............... 103,708
Other receivables ............................. 106,450 278,978
------------
Land and improvements held for
future development ............................ 6,637,360
Income producing properties, net ................. 8,249,553
Property and equipment, net of accumulated
depreciation of $529,230 ...................... 387,581
Investment in Partnerships and joint ventures .... 238,187
Other ............................................ 242,007
------------
$ 20,505,740
============
LIABILITIES AND STOCKHOLDER'S EQUITY
Accounts payable, accrued expenses
and other liabilities ......................... $ 1,038,397
Deferred income taxes ............................ 5,312,000
Notes, bonds, mortgages and assessments payable .. 6,198,170
------------
Total liabilities ............... 12,548,567
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 ............................. 7,281,046 7,957,173
------------ ------------
$ 20,505,740
============
WESTLAND DEVELOPMENT CO., INC.
STATEMENTS OF OPERATIONS
(unaudited)
For the three months ended
March 31,
2000 1999
---------- ----------
Revenues
Land ...................................... $1,480,079 $ 803,614
Deferred profit recognized
on installment sales .................... -- 322
Rentals ................................... 240,175 171,985
---------- ----------
1,720,254 975,921
Costs and expenses
Cost of land revenues ..................... 368,436 108,038
Cost of rentals ........................... 45,637 36,684
Other general and administrative .......... 417,162 453,633
---------- ----------
831,235 598,355
---------- ----------
Income from operations ................. 889,019 377,566
Other (income) expense
Interest income ........................... (65,718) (38,752)
Gain on sale of property and
equipment ............................ (30) --
Other (income) loss ....................... (4,014) 7,040
Interest expense .......................... 138,516 103,962
---------- ----------
68,754 72,250
---------- ----------
Earnings before income taxes............ 820,265 305,316
Income tax expense ........................... 328,000 123,000
---------- ----------
NET EARNINGS ........................... $ 492,265 $ 182,316
========== ==========
Weighted average common and
common equivalent shares
outstanding, basic and diluted ............ 802,708 802,708
========== ==========
Basic and diluted earnings
per common share .......................... $ 0.61 $ 0.23
========== ==========
WESTLAND DEVELOPMENT CO., INC.
STATEMENTS OF OPERATIONS
(unaudited)
For the nine months ended
March 31,
2000 1999
---------- ----------
Revenues
Land ...................................... $5,813,280 $4,210,847
Deferred profit recognized
on installment sales .................... -- 30,306
Rentals ................................... 644,948 530,280
---------- ----------
6,458,228 4,771,433
Costs and expenses
Cost of land revenues ..................... 1,200,183 429,981
Cost of rentals ........................... 208,807 130,315
Other general and administrative .......... 1,321,085 1,440,603
---------- ----------
2,730,075 2,000,899
---------- ----------
Income from operations ................. 3,728,153 2,770,534
Other (income) expense
Interest income ........................... (173,142) (93,271)
Gain on sale of property and
equipment ............................ (80) --
Other, net ................................ (11,701) 478
Interest expense .......................... 467,295 404,517
---------- ----------
282,372 311,724
---------- ----------
Earnings before income taxes............ 3,445,781 2,458,810
Income tax expense ........................... 1,378,000 984,000
---------- ----------
NET EARNINGS ........................... $2,067,781 $1,474,810
========== ==========
Weighted average common and
common equivalent shares
outstanding, basic and diluted ............ 802,708 802,708
========== ==========
Basic and diluted earnings
(loss) per common share .................. $ 2.58 $ 1.84
========== ==========
WESTLAND DEVELOPMENT CO., INC.
STATEMENTS OF CASH FLOWS
(unaudited)
For the nine months ended
March 31,
2000 1999
------------ ------------
Cash flows from operating activities
Cash received from land sales
and collections on real
estate contracts receivable ................. $ 5,113,226 $ 4,225,670
Development and closing costs paid
on land sales ............................... (918,589) (1,068,656)
Cash received from rental operations .......... 648,028 536,197
Cash paid for rental operations ............... (67,876) (208)
Cash paid for property taxes .................. (82,271) (75,472)
Interest received ............................. 173,605 93,498
Interest paid ................................. (469,309) (386,980)
Income taxes paid ............................. (740,000) (171,245)
Legal and other general and
administrative costs paid ................... (1,421,581) (1,253,743)
Other ......................................... 456,997 (171)
------------ ------------
Net cash provided by
operating activities ........................ 2,692,230 1,898,890
------------ ------------
Cash flows from investing activities
Capital expenditures for income
producing and other properties .............. (125,188) (52,881)
Change in short-term investments .............. (93,881) --
Proceeds from sale of assets .................. 80 --
Proceeds from note receivable-related party ... 2,525 --
Cash distributions from
partnerships, net ........................... 5,415 6,313
------------ ------------
Net cash used by investing activities ........ (211,049) (46,568)
------------ ------------
Cash flows from financing activities
Borrowing on notes, mortgages and
assessments payable ......................... 693,975 1,506,041
Repayments of bonds, mortgages,
notes and assessments payable ............... (1,872,456) (1,833,250)
Payment of dividends .......................... (802,708) (802,708)
------------ ------------
Net cash used in
financing activities ....................... (1,981,189) (1,129,917)
------------ ------------
NET INCREASE IN CASH
AND CASH EQUIVALENTS ......................... 499,992 722,405
Cash and cash equivalents at
beginning of period .......................... 1,300,182 3,209,893
------------ ------------
Cash and cash equivalents at
end of period ................................ $ 1,800,174 $ 3,932,298
============ ============
Reconciliation of net earnings
to net cash provided by
operating activities
Net earnings ................................... $ 2,067,781 $ 1,474,810
Adjustments to reconcile net
earnings to net cash provided
by operating activities
Depreciation .............................. 194,763 170,819
Profit recognized on prior
years' installment sales ................ -- (30,306)
Gain on sale of assets..................... (80) --
Change in assets and liabilities
Income taxes recoverable/payable .......... 638,000 812,755
Rents receivable, accrued interest,
property tax and other assets ........... 3,750 12,605
Real estate contracts ..................... (44,529) 34,441
Land and improvements held for
future development ...................... 94,702 (602,583)
Other assets .............................. (101,661) (79,230)
Accounts and retainages payable,
accrued interest and other
liabilities ............................. (160,496) 105,579
------------ ------------
Net cash provided by
operating activities ......................... $ 2,692,230 $ 1,898,890
============ ============
WESTLAND DEVELOPMENT CO., INC.
NOTES TO THE FINANCIAL STATEMENTS
(unaudited)
March 31, 2000
1. The balance sheet at March 31, 2000, statements of cash flows for the
nine month periods ended March 31, 2000 and March 31, 1999 and statements of
operations for the three and nine month periods ended March 31, 2000 and March
31, 1999 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, 1999. The results of operations for the nine months ended
March 31, 2000 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, 2000 and March 31, 1999 was
802,708.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
During the nine months ended March 31, 2000, the Company's cash and cash
equivalents increased by $ 499,992. During this period, operations provided
$2,692,230, the Company invested $211,049, net, in fixed and other assets,
retired $1,872,456 of debt, borrowed $693,975 and paid dividends in the amount
of $802,708.
During the third quarter of the current fiscal year, the Company had
revenues of $1,720,254 compared to $975,921 during the same period in the prior
fiscal year. Operating costs and expenses during the three months ended March
31, 2000, were $831,235 compared to $598,355 during the comparable period in
1999. Although revenues increased appreciably in 2000, costs were higher and
operating income increased by approximately $511,000. Revenue for the current
year to date is $6,458,228 compared to $4,771,433 in 1999. The difference in
revenue this year is due primarily to increased sales of large single parcels
over 1999. Operating costs and expenses for the current fiscal year to date are
also higher at $2,730,075 compared to $2,000,899 in 1999.
Prior to June 30, 2000, 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: May 5, 2000 By: Barbara Page
---------------------------
Barbara Page, President,
Chief Executive Officer and
Chief Accounting Officer
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