<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q/A
AMENDMENT NO. 1
/XX/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended: ______________ MARCH 31, 1995 ______________
or
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from___________________ to_____________________
Commission File Number: 1-6064
ALEXANDER'S, INC.
------------------------------------------------------
(Exact name of registrant as specified in its charter)
DELAWARE 51-01-00517
- --------------------------------------------- ----------------------
(State or other jurisdiction of incorporation (I.R.S. Employer
or organization) Identification Number)
31 WEST 34TH STREET, NEW YORK, NEW YORK 10001
---------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
(212)760-9500
----------------------------------------------------
(Registrant's telephone number, including area code)
N/A
----------------------------------------------------
(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 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.
/X/ Yes / / No
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Sections 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court.
/ / Yes / / No
As of May 4, 1995 there were 5,000,850 common shares outstanding.
Page 1 of 13
<PAGE> 2
THIS FORM 10-QA AMENDS THE FOLLOWING ITEMS OF THE COMPANY'S QUARTERLY REPORT ON
FORM 10-Q PREVIOUSLY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY
12, 1995.
ALEXANDER'S, INC.
INDEX
<TABLE>
<CAPTION>
Page Number
-----------
<S> <C>
PART I. FINANCIAL INFORMATION:
Item 1. Financial Statements:
Consolidated Balance Sheets as of March 31, 1995
and December 31, 1994 . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Consolidated Statements of Operations for the Three Months
Ended March 31, 1995 and March 31, 1994 . . . . . . . . . . . . . . . . . . 4
Consolidated Statements of Cash Flows for the Three Months
Ended March 31, 1995 and March 31, 1994 . . . . . . . . . . . . . . . . . . 5
Notes to Consolidated Financial Statements . . . . . . . . . . . . . . . . 6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations . . . . . . . . . . . . . . . . . . . . 11
Signatures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
</TABLE>
Page 2 of 13
<PAGE> 3
PART I. FINANCIAL INFORMATION
ALEXANDER'S, INC.
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(AMOUNTS IN THOUSANDS EXCEPT SHARE AMOUNTS)
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
1995 1994
--------- ------------
<S> <C> <C>
ASSETS:
Real estate, at cost:
Land $ 46,007 $ 26,460
Buildings leaseholds, and leasehold
improvements 61,242 59,851
Capitalized expenses and predevelopment costs 32,133 27,213
--------- ---------
Total 139,382 113,524
Less accumulated depreciation and
amortization (36,631) (36,365)
--------- ---------
102,751 77,159
Investment in unconsolidated joint
venture 8,285 7,499
--------- ---------
Real estate, net 111,036 84,658
Cash and cash equivalents 30,196 2,363
Restricted cash 21,014 --
Deferred lease expense 12,082 11,561
Deferred finance and debt expense 6,688 2,642
Other assets 4,067 3,645
Note receivable -- 4,550
--------- ---------
TOTAL ASSETS $ 185,083 $ 109,419
========= =========
LIABILITIES AND DEFICIENCY IN NET ASSETS:
Continuing Operations:
Secured debt $ 157,019 $ 51,654
Amounts due to Vornado Realty Trust 12,967 12,342
Liability for postretirement
healthcare benefits 15,971 15,882
Taxes payable and accrued liabilities 8,971 9,067
Minority interest 600 1,574
Unsecured debt -- 1,188
--------- ---------
Total continuing operations 195,528 91,707
--------- ---------
Discontinued Retail Operations:
Taxes payable and accrued liabilities 2,349 2,613
Liabilities subject to settlement under
reorganization proceedings 10,223 36,672
--------- ---------
Total discontinued retail operations 12,572 39,285
--------- ---------
TOTAL LIABILITIES 208,100 130,992
--------- ---------
Commitments and contingencies
Deficiency in Net Assets:
Common stock; $1.00 par value per share;
authorized, 10,000,000 shares;
issued 5,173,450 5,174 5,174
Additional capital 24,843 24,843
Deficit (52,074) (50,630)
--------- ---------
(22,057) (20,613)
Less treasury shares, 172,600 shares at
cost (960) (960)
--------- ---------
Total deficiency in net assets (23,017) (21,573)
TOTAL LIABILITIES AND DEFICIENCY
IN NET ASSETS $ 185,083 $ 109,419
========= =========
</TABLE>
See notes to consolidated financial statements.
Page 3 of 13
<PAGE> 4
ALEXANDER'S, INC.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(amounts in thousands except share amounts)
<TABLE>
<CAPTION>
FOR THE THREE MONTHS ENDED
------------------------------
MARCH 31, MARCH 31,
1995 1994
----------- -----------
<S> <C> <C>
Revenues:
Property rentals $ 2,189 $ 2,189
Expense reimbursements 285 285
Equity in income of unconsolidated
joint venture 773 462
Parking lot income 176 245
----------- -----------
Total revenues 3,423 3,181
----------- -----------
Expenses:
Operating, general and administrative (including
management fee of $225 to Vornado in 1995) 1,551 1,094
Depreciation and amortization 464 457
Reorganization costs 1,616 646
----------- -----------
Total expenses 3,631 2,197
----------- -----------
Operating (loss)/income (208) 984
Interest and debt expense (including
$392 on loan from Vornado in 1995) (2,739) (596)
Gain on sale of real estate -- 161
Interest and other income 97 101
----------- -----------
(Loss)/income before reversal of deferred taxes (2,850) 650
Reversal of deferred taxes 1,406 --
----------- -----------
NET (LOSS)/INCOME $ (1,444) $ 650
=========== ===========
Net (Loss)/Income Per Share $ (.29) $ .13
=========== ===========
Weighted average number of common
shares outstanding during period 5,000,850 5,000,850
</TABLE>
See notes to consolidated financial statements.
Page 4 of 13
<PAGE> 5
ALEXANDER'S, INC.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(amounts in thousands)
<TABLE>
<CAPTION>
FOR THE THREE MONTHS ENDED
------------------------------
MARCH 31, 1995 MARCH 31, 1994
-------------- --------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss)/income $ (1,444) $ 650
Adjustments to reconcile net (loss)/income to net
cash used in operations:
Depreciation and amortization
(including debt issuance costs) 1,660 574
Gain on sale of real estate -- (161)
Equity in real estate operations (net of
contributions of $1,007 at March 31, 1994) (773) (1,491)
Change in assets and liabilities:
Note receivable 4,550 --
Amounts due to Vornado Realty Trust 60 71
Liability for postretirement
healthcare benefits 89 --
Taxes payable and accrued liabilities (1,593) (991)
Other (136) 628
--------- ---------
Net cash provided by/(used in) operating activities of
continuing operations 2,413 (720)
--------- ---------
Net cash used in discontinued operations (26,713) (613)
--------- ---------
Net cash used in operating activities (24,300) (1,333)
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to real estate (3,691) (2,040)
Cash restricted for construction financing (6,000) --
Cash restricted for operating liabilites (15,014) 775
Proceeds from sale of real estate, net -- 193
--------- ---------
Net cash used in investing activities (24,705) (1,072)
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of secured debt 121,631 --
Debt repayments (39,552) (775)
Deferred finance and debt expense (5,241) (512)
--------- ---------
Net cash provided by (used in) financing activities 76,838 (1,287)
--------- ---------
Net increase(decrease) in cash and cash equivalents 27,833 (3,692)
Cash and cash equivalents at beginning of period 2,363 7,053
--------- ---------
Cash and cash equivalents at end of period $ 30,196 $ 3,361
========= =========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash payments for interest $ 4,276 $ 810
========= =========
</TABLE>
See notes to consolidated financial statements.
Page 5 of 13
<PAGE> 6
ALEXANDER'S, INC.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. CONSOLIDATED FINANCIAL STATEMENTS
The consolidated balance sheets, the consolidated statements of
operations for the three months ended March 31, 1995 and March 31, 1994,
and the consolidated statements of cash flows for the three months ended
March 31, 1995 and March 31, 1994 are unaudited. In the opinion of
management, all adjustments (which include only normal recurring
adjustments) necessary to present fairly the financial position, results
of operations and changes in cash flows at March 31, 1995 and March 31,
1994 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. These Consolidated
Financial Statements should be read in conjunction with the financial
statements and notes thereto included in the Company's 1994 Annual Report
to Shareholders. The results of operations for the period ended March 31,
1995 are not necessarily indicative of the operating results for the full
year.
Effective in the first quarter of 1995, to be consistent with the
prevalent real estate industry practice, the Company changed the
presentation of its consolidated statements of operations to show tenant
reimbursements of expenses, previously offset against operating expenses,
as part of revenues. Prior period's amounts have been reclassified to
conform with the current year's presentation.
2. EMERGENCE FROM CHAPTER 11
On March 15, 1995, the Company paid holders of allowed general unsecured
claims in full, together with accrued interest in respect of their claims.
Such payments aggregated $24,005,000. The Official Committee of Unsecured
Creditors has been dissolved and all secured and unsecured creditors
having allowed claims in the Bankruptcy Court cases have received the cash
payments or debt instruments contemplated to be delivered to them under
the Plan. A number of claims are being disputed by the Company and
therefore are not allowed claims. An escrow account has been established
for the resolution of these claims (see Note 4). The Bankruptcy Court has
retained jurisdiction to resolve these disputed claims and for other
limited purposes.
Because the Company is in the development stage, its current operating
properties (four of its eight properties) do not generate sufficient cash
flow to pay all of its expenses. The Company's four non-operating
properties (Rego Park, Lexington Avenue, Paramus and the Kings Plaza
Store) are in various stages of development. Rents under the Rego Park
project are scheduled to commence in March 1996. As rents commence from a
portion of the remaining development properties, the Company expects that
cash flow will become positive.
The Company estimates that the fair market values of its assets are
substantially in excess of their historical cost and that there is
additional borrowing capacity. Therefore, Alexander's may raise capital
through (a) property specific or corporate borrowing, (b) the sale of
securities and (c) asset sales. In addition, the Company may receive the
proceeds from certain tax certiorari or condemnation proceedings--see Note
6 "Paramus Property" and "Tax Certiorari Proceedings." Although there can
be no assurance, the Company believes that these cash sources will be
adequate to fund cash requirements until its operations generate adequate
cash flow.
Page 6 of 13
<PAGE> 7
ALEXANDER'S, INC.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
3. RELATED PARTY TRANSACTIONS
Steven Roth is Chief Executive Officer and a Director of the Company,
the Managing General Partner of Interstate Properties ("Interstate") and
Chairman of the Board and Chief Executive Officer of Vornado Realty Trust
("Vornado"). Interstate owns 27.1% of the outstanding common stock of the
Company and owns 27.7% of the outstanding common shares of beneficial
interest of Vornado. In addition, Mr. Roth owns 3.7% of the outstanding
common shares of beneficial interest of Vornado. Mr. Roth, Interstate and
the other two general partners of Interstate own, in the aggregate, 32.8%
of the outstanding common shares of beneficial interest of Vornado.
Vornado owns 29.3% of the outstanding common stock of the Company,
including 27.1% purchased on March 2, 1995.
On March 2, 1995, the Company and Vornado entered into a three-year
management and development agreement (the "Management Agreement"). The
annual fee to Vornado (payable in monthly installments) is $3,000,000,
plus 6% of development costs with a minimum guaranteed fee for the
development portion of $1,650,000 in the first year and $750,000 in each
of the second and third years.
The fee pursuant to the Management Agreement is in addition to the
leasing fee the Company pays to Vornado under the leasing agreement (the
"Leasing Agreement") which has been in effect since 1992. Subject to the
payment of rents by tenants, Vornado is due $12,255,000, payable annually
in an amount not to exceed $2,500,000, until the present value of such
installments (calculated at a discount rate of 9% per annum) equals the
amount that would have been paid had it been paid on September 21, 1993,
or at the time the transactions which gave rise to the commissions
occurred, if later. The term of the Leasing Agreement has been extended to
be coterminous with the term of the Management Agreement.
On March 15, 1995, the Company borrowed $45,000,000 from Vornado, the
subordinated tranche of a $75,000,000 secured financing (see Note 4 (2)).
Effective March 2, 1995, for a three-year period, Vornado and Interstate
agreed not to own in excess of two-thirds of the Company's common stock or
to enter into certain other transactions with the Company, other than the
transactions described above, without the consent of the Company's
independent directors.
4. DEBT AND RESTRICTED CASH
During the quarter ended March 31, 1995, the Company borrowed
$121,631,000. The proceeds of these borrowings were used (i) to repay
$39,552,000 of outstanding funded debt, and $24,005,000 of allowed general
unsecured claims and (ii) to fund (a) interest-bearing escrow accounts for
unpaid real estate taxes ($7,000,000) and the remaining disputed claims in
the Bankruptcy Court cases as they become allowed ($8,000,000), and (b)
collateral accounts for the Rego Park construction ($6,000,000).
Substantially all of the assets of the Company and its subsidiaries have
been pledged and/or mortgaged to secure such indebtedness. The borrowings
consist of:
(1) A $25,000,000 five year loan maturing February 24, 2000, secured
principally by, a mortgage on the Company's Fordham Road property and
guaranteed by the parent. The loan bears annual interest at 30 day LIBOR
+4.25% (10.38% at March 31, 1995), capped at LIBOR 9.75% (all-in rate,
14%) and requires amortization based on a 20 year term with an assumed
interest rate of 9 1/2%. Beginning in year four, all cash flow of the
property, after debt service, will further amortize the loan. The loan is
not prepayable for the first six months of its term and is only prepayable
with yield maintenance during the next twelve months in the event of
certain types of refinancings. For the
Page 7 of 13
<PAGE> 8
ALEXANDER'S, INC.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
remainder of the term, it is prepayable without penalty. The loan contains
customary mortgage covenants, including, among others, a default by the
existing tenant. Further, in the event debt service coverage falls below
certain levels or the existing tenant's financial condition, as defined,
deteriorates, then during the first three years of the loan term, all cash
flow of the property, after debt service, will be escrowed with the
lender.
(2) A $75,000,000 three-year loan secured by mortgages on all of the
Company's assets and/or pledges of the stock of subsidiaries owning the
assets and/or guarantees of such subsidiaries and the parent. The loan
bears interest at a blended rate of 13.8% per annum for the first two
years and is comprised of two separate notes of $45,000,000 to Vornado and
$30,000,000 to a bank. Each note is separately secured by the collateral
described above. The Vornado loan is subordinate to that of the bank and
bears interest at 16.43% per annum (effective rate 17.54%) for the first
two years and at a fixed rate for the third year of 992 basis points over
the one-year Treasury bill rate. The bank's loan bears interest at 9.86%
for the first two years and at a fixed rate for the third year of 325
basis points over the one-year Treasury bill rate. The Company paid a loan
origination fee to Vornado and the bank of $1,500,000 and $375,000,
respectively. The loans are prepayable at the end of the second year of
their term without penalty. The loans contain customary covenants
including, among others, lease approval rights, limitations on additional
debt, dividends, acquisitions, mergers, property sales and restrict the
Company from developing property without signed leases for more than 50%
of such property's leasable space. At March 31, 1995, no dividends can be
paid unless required to maintain Real Estate Investment Trust ("REIT")
status.
(3) A two year $60,000,000 construction loan and a two year $25,000,000
bridge loan from a bank, each secured by a mortgage on the Rego Park
property. As of March 31, 1995, approximately $21,600,000 was funded under
such loans. The loans mature on April 1, 1997 (but may be extended at the
Company's option, subject to certain conditions, for an additional year)
and bear annual interest at (i) LIBOR plus 1.625% or (ii) the greater of
(a) Federal Funds Rate plus 1.125% or (b) prime plus 0.625%, at the option
of the Company (8.19% at March 31, 1995). The ability of the Company to
borrow the $25,000,000 under the bridge loan is based on conditions that
cannot be met today and may not be met during the term of this loan. The
Company has not relied on this amount in its determination of its ability
to fund its current cash needs but believes that it will be able to
refinance the Rego Park property at a level exceeding $60,000,000 upon the
completion of construction and commencement of tenants paying rent.
In addition to the above, in January 1995, the Seven Thirty One Limited
Partnership ("the Partnership"), redeemed the first portion of the outside
731 Limited Partners' interest by giving such limited partners a
promissory note due in August 1998 in the amount of $21,812,000 (the
"Note"). The Note bears annual interest at Prime plus 1% and is secured by
a third mortgage on the Lexington Avenue property. The outside 731 Limited
Partners have the right to put their remaining 7.64% interest to the
Partnership until October 1998, in exchange for a five year secured note
in the principal amount of $15,000,000, bearing annual interest at Prime
plus 1%.
After giving effect to the additional borrowings and debt repayments noted
above, a summary of maturities of long-term debt is as follows (amounts in
thousands):
<TABLE>
<CAPTION>
Year ended December 31,
<S> <C>
1995 $ 326
1996 473
1997 519
1998 132,590
1999 628
Thereafter 22,483
--------
$157,019
========
</TABLE>
Page 8 of 13
<PAGE> 9
ALEXANDER'S, INC.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
5. INCOME TAXES
The Company intends to file, with its Federal income tax return for
1995, an election to be treated as a REIT for Federal income tax purposes.
As a result of the Company's intention to elect to be taxed as a REIT, the
deferred tax balance of $1,406,000 at December 31, 1994 was reversed,
resulting in an income tax benefit in the quarter ended March 31, 1995. At
March 31, 1995, net operating loss carryovers of approximately
$115,000,000 are available to offset both future taxable income and the
amount of the Company's REIT taxable income that otherwise would be
required to be distributed to stockholders.
6. CONTINGENCIES
Paramus Property
The State of New Jersey has notified the Company of its intention to
condemn a portion of the Paramus property. The New Jersey Department of
Transportation ("DOT") has recently made an offer to purchase the land
which is the subject of the condemnation proceeding for $15,400,000 based
on an appraisal performed on their behalf. The Company and the DOT expect
to commence negotiations to attempt to reach agreement on the value. In
the event that the Company and the DOT do not reach agreement on the
value, a formal process will be initiated by the DOT, pursuant to which,
among other things, a group of independent commissioners will be appointed
by a court to determine fair market value. If the condemnation occurs, the
Company will be required to change its development plans, Home Depot and
B.J.'s Wholesale Clubs will not be obligated under their current leases,
and the time and cost to develop the Paramus property may materially
increase.
Lexington Avenue Property
The Company believes that, along with a number of other locations, a
portion of the Lexington Avenue property is being considered by the Port
Authority of New York and New Jersey (the "Port Authority") for the site
of the terminus for a rail link from midtown Manhattan to LaGuardia and
Kennedy Airports. In June 1994, the Federal Aviation Administration
("FAA") and the New York State Department of Transportation ("NYDOT")
released a draft environmental impact statement ("DEIS") and Section 4(f)
Evaluation (the "DEIS and Section 4(f) Evaluation") of the Port
Authority's proposed rail link. On December 15, 1994, the Company
submitted a letter of comment and a report to the U.S. Department of
Transportation, the FAA and the NYDOT on the DEIS and Section 4(f)
Evaluation pursuant to the period of public comment. The Company expressed
its opposition to the consideration of a portion of the Lexington Avenue
property for the site of the terminus. Approval of numerous Federal, New
York State and New York City agencies are required before construction
could begin. The Company does not know whether the rail link terminus
project will be undertaken or, if undertaken, the timing of the project
and whether the Lexington Avenue property will be chosen as the site of
the terminus.
If the project proceeds and the Port Authority selects a portion of the
Lexington Avenue property for such use and can establish that it is needed
to serve a public use, benefit or purpose, the Port Authority, after
conducting the requisite public hearings, may acquire such portion of the
Lexington Avenue property pursuant to its powers of eminent domain. The
Company has the right to appeal any such action by the Port Authority. If
the Port Authority prevails, the Company would be entitled to compensation
for its loss. Since the nature and scope of any plans being considered by
the Port Authority, and whether any such plans would ultimately affect the
Lexington Avenue property, cannot be fully assessed by the Company at this
time, it is impossible to determine the ultimate effect that a taking, or
any uncertainty with respect thereto, would have on the Company's use or
development of the Lexington Avenue property.
Page 9 of 13
<PAGE> 10
ALEXANDER'S, INC.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Tax Certiorari Proceedings
Alexander's Department Stores of Valley Stream, Inc. ("ADS of Valley
Stream") is a party to a tax certiorari proceeding against The Board of
Assessors and The Board of Assessment Review of the County of Nassau (the
"Board") for overpayment of taxes on its former Valley Stream store
property during the assessment rolls for May 1, 1986 through May 1, 1992.
On January 12, 1995, the Supreme Court of Nassau County, New York ruled
that ADS of Valley Stream is entitled to an assessment reduction which
would result in a refund of approximately $6,600,000, plus interest
(currently, $3,100,000). Both the Board and the Company have appealed the
Court's decision.
Environmental Matters
The results of a 1993 Phase I environmental assessment at the Kings
Plaza Shopping Center's ("Center") property show that certain adjacent
properties owned by third parties have experienced petroleum hydrocarbon
contamination. Based on this assessment and preliminary investigation of
the Center's property and its history there is potential for contamination
on the property. If contamination is found on the property, the Center may
be required to engage in remediation activities; management is unable to
estimate the financial impact of potential contamination if any is
discovered in the future. If further investigations reveal that there is
contamination on its site, since the Center believes such contamination
would have resulted from activities of third parties, the Center intends
to pursue all available remedies against any of these third parties.
Page 10 of 13
<PAGE> 11
ALEXANDER'S, INC.
AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
The Company's revenues were $3,423,000 in the quarter ended March 31, 1995,
compared to $3,181,000 in the prior year's quarter, an increase of $242,000 or
7.6%. This increase resulted primarily from an increase in the income derived
from the operation of the Kings Plaza Shopping Center and Marina.
Operating, general and administrative expenses were $1,551,000 in the
quarter ended March 31, 1995, compared to $1,094,000 in the prior year's
quarter, an increase of $457,000. This increase resulted primarily from
commencement of salary to the Chairman of the Board of Directors and fees under
the Management Agreement.
Depreciation and amortization expense for the three months ended March 31,
1995, did not change significantly from such expense for the prior year's
period.
Reorganization costs were $1,616,000 in the quarter ended March 31, 1995,
compared to $646,000 in the prior year's quarter, an increase of $970,000. The
increase was due primarily to higher professional fees incurred in connection
with investigating financing alternatives, becoming a REIT and bankruptcy
expenses.
Interest and debt expense was $2,739,000 in the quarter ended March 31,
1995, as compared to $596,000 in the prior year's quarter, an increase of
$2,143,000. Of this increase, $1,808,000 resulted from increased borrowings and
$556,000 resulted from the write-off of unamortized debt issuance costs on debt
repaid.
The Company recorded a pre-tax gain of $161,000 in the first quarter of 1994
from the sale of an approximately 20,000 square foot warehouse in the Bronx, New
York.
Interest and other income for the three months ended March 31, 1995, did not
change significantly from such amount for the prior year's period.
As a result of the Company's intention to elect to be taxed as a REIT for
the year ended December 31, 1995, the deferred tax balance of $1,406,000 at
December 31, 1994 was reversed, resulting in an income tax benefit in the
quarter ended March 31, 1995.
LIQUIDITY AND CAPITAL RESOURCES
Cash used in operating activities of $24,300,000 for the three months ended
March 31, 1995, was comprised of: (i) a net loss of 1,444,000 less adjustments
for non-cash items of $887,000, and (ii) the payment of liabilities of
discontinued operations of $26,713,000, offset by (iii) the net change in
operating assets and liabilities of $2,970,000.
Cash used in operating activities of $1,333,000 for the three months ended
March 31, 1994 was comprised of (i) the payment of liabilities of discontinued
operations of $613,000, and (ii) the net change in operating assets and
liabilities of $292,000, and (iii) net income of $650,000, less adjustments for
non-cash items of $1,078,000.
Page 11 of 13
<PAGE> 12
ALEXANDER'S, INC.
AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Net cash used in investing activities of $24,705,000 for the three months
ended March 31, 1995 was comprised of capital expenditures of $3,691,000, cash
restricted for construction financing of $6,000,000 and cash restricted for
operating liabilities of $15,014,000. Net cash used in investing activities of
$1,072,000 for the three months ended March, 31, 1994 was comprised primarily of
capital expenditures.
Net cash provided by financing activities of $76,838,000 for the three
months ended March 31, 1995 was comprised of proceeds from the issuance of
secured debt of $116,390,000 (net of deferred debt expense), offset by
repayments of debt of $39,552,000. Net cash used in financing activities of
$1,072,000 for the three months ended March 31, 1994 was comprised primarily of
the payment of deferred debt expense and debt repayments.
In connection with the redevelopment of its Rego Park property (new parking
structure and other improvements), the Company has expended approximately
$2,600,000 during the three months ended March 31, 1995, and expects to expend
through the first quarter of 1996 up to an additional $34,000,000 to complete
the project. At March 31, 1995, there was $38,400,000 available under a
$60,000,000 construction loan to fund these expenditures. The Company estimates
that its capital expenditure requirements for other projects will include (i)
the asbestos removal, building demolition and other improvements at the Paramus
property which are expected to cost between $15,000,000 and $17,000,000, and
(ii) the subdivision of the existing space and other improvements at the Kings
Plaza Store property estimated to cost $10,000,000. While the Company
anticipates that financing will be available after tenants have been obtained
for these redevelopment projects, there can be no assurance that such financing
will be obtained or if obtained, that such financings will be on terms that are
acceptable to the Company. In addition, it is uncertain as to when these
projects will commence.
Because the Company is in the development stage, its current operating
properties (four of its eight properties) do not generate sufficient cash flow
to pay all of its expenses. The Company's four non-operating properties (Rego
Park, Lexington Avenue, Paramus and the Kings Plaza Store) are in various stages
of development. Rents under the Rego Park project are scheduled to commence in
March 1996. As rents commence from a portion of the remaining development
properties, the Company expects that cash flow will become positive.
The Company estimates that the fair market values of its assets are
substantially in excess of their historical cost, and that there is additional
borrowing capacity. Therefore, Alexander's may raise capital through (a)
property specific or corporate borrowing, (b) the sale of securities, and (c)
asset sales. In addition, the Company may receive the proceeds from certain tax
certiorari or condemnation proceedings-- see Note 6 "Paramus Property" and "Tax
Certiorari Proceedings". Although there can be no assurance, the Company
believes that these cash sources will be adequate to fund cash requirements
until its operations generate adequate cash flow.
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<PAGE> 13
ALEXANDER'S, INC.
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.
ALEXANDER'S, INC.
-----------------------------------------
(Registrant)
Date: December 20, 1995 /s/ Joseph Macnow
-----------------------------------------
JOSEPH MACNOW
Vice President - Chief Financial
Officer and Chief Accounting Officer
Page 13 of 13
