<PAGE> 1
EXHIBIT INDEX ON PAGE 15
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
/X/ 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 16
<PAGE> 2
ALEXANDER'S, INC.
INDEX
<TABLE>
<CAPTION>
Page Number
-----------
<S> <C> <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
PART II. OTHER INFORMATION:
Item 6. Exhibits and Reports on Form 8-K . . . . . . . . . . . . . . . . . . . . . 13
Signatures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Exhibit Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Exhibit 27 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
</TABLE>
Page 2 of 16
<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
======= =======
<CAPTION>
MARCH 31, DECEMBER 31,
1995 1994
--------- ------------
LIABILITIES AND DEFICIENCY IN NET ASSETS:
Continuing Operations:
Secured debt $157,019 $ 51,654
Amounts due to Vornado Realty Trust 12,967 12,342
Taxes payable and accrued liabilities 8,971 9,067
Minority interest 600 1,574
Unsecured debt - 1,188
------- -------
Total continuing operations 179,557 75,825
------- -------
Discontinued Retail Operations:
Accrual for losses from discontinued operations 21,115 26,742
Taxes payable and accrued liabilities 2,349 2,613
Liabilities subject to settlement under
reorganization proceedings 5,079 25,812
------- -------
Total discontinued retail operations 28,543 55,167
------- -------
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 16
<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
Other income (including income from
unconsolidated joint venture of
$773 and $462) 949 707
------ ------
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 income tax (benefit) (2,850) 650
(Benefit) for income 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 16
<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 provided by 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:
Restricted cash (21,014) 775
Note receivable 4,550 -
Amounts due to Vornado Realty Trust 60 71
Taxes payable and accrued liabilities (1,593) (991)
Other (136) 628
------- -------
Net cash (used in) / provided by operating activities of
continuing operations (18,690) 55
------- -------
Net cash (used in) discontinued operations (26,624) (613)
------- -------
Net cash (used in) operating activities (45,314) (558)
------- -------
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to real estate (3,691) (2,040)
Proceeds from sale of real estate, net - 193
------- -------
Net cash (used in) investing activities (3,691) (1,847)
------- -------
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 16
<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.
The Company's ability to operate as a viable real estate company
depends on the successful development of certain of its properties and
on its ability to repay or refinance its debts when they become due. In
order to do this, the Company may need to raise additional capital.
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.
Page 6 of 16
<PAGE> 7
ALEXANDER'S, INC.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
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 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.
Page 7 of 16
<PAGE> 8
ALEXANDER'S, INC.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(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 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, 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%.
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.
Page 8 of 16
<PAGE> 9
ALEXANDER'S, INC.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
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 16
<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 property show that certain adjacent properties owned by third
parties have experienced petroleum hydrocarbon contamination. Based on
this assessment and additional investigation of the Kings Plaza property
and historical operations at the site, the Company believes there is a
potential for hydrocarbon contamination on the Kings Plaza property.
However, no contamination has been found on the property to date.
Page 10 of 16
<PAGE> 11
ALEXANDER'S, INC.
AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
The industry practice of REIT's is to consider funds from operations an
appropriate supplemental measure of operating performance. The Company's funds
from operations were a negative $1,163,000 in the quarter ended March 31, 1995,
as compared to a positive $1,149,000 in the prior year's quarter.
The following table reconciles funds from operations and pre-tax income:
<TABLE>
<CAPTION>
Three Months Ended
----------------------------------
March 31, March 31,
1995 1994
--------- ---------
<S> <C> <C>
(Loss)/income before income taxes $(2,850,000) $ 650,000
Gain on sale of real estate - (161,000)
Depreciation and amortization 464,000 457,000
Reorganization costs 1,616,000 646,000
Straight-lining of property rentals (393,000) (443,000)
----------- ----------
Funds (used in)/provided by operations $(1,163,000) $1,149,000
=========== ==========
</TABLE>
Funds from operations does not represent cash generated from operating
activities in accordance with generally accepted accounting principles and is
not necessarily indicative of cash available to fund cash needs. Funds from
operations should not be considered as an alternative to net income as an
indicator of the Company's operating performance or as an alternative to cash
flows as a measure of liquidity.
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.
Page 11 of 16
<PAGE> 12
ALEXANDER'S, INC.
AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
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
On March 31, 1995, the Company had cash (including short-term investments)
of $30,200,000 compared to $2,400,000 at December 31, 1994, an increase of
$27,800,000. The increase in cash resulted primarily from new borrowings of
$121,600,000, partially offset by (i) deferred finance and debt expense of
$5,200,000, (ii) debt repayments of $39,600,000, (iii) payments of general
unsecured claims (including principal and interest) of $24,000,000, (iv) cash
restricted of $21,000,000 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 required for the Rego Park construction ($6,000,000) and (v) capital
expenditures of $3,700,000. Substantially all of the assets of the Company and
its subsidiaries have been pledged and/or mortgaged to secure new borrowings.
In connection with the Company's redevelopment plans for its Rego Park
property, the Company expects to incur expenditures, during the balance of
1995, for a new parking structure and other improvements of $31,000,000 -
$33,000,000, which amount will be funded under a $60,000,000 construction loan
of which $21,600,000 is outstanding at March 31, 1995.
The Company estimates that its capital expenditure requirements for other
projects will include 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 an estimated $10,000,000 expenditure that will
be needed to subdivide the existing space and other improvements at the Kings
Plaza Store property. There is no assurance that the other projects will
commence in 1995.
The Company may seek to obtain additional short- or long-term financings to
develop these properties. However, there can be no assurance that any such
financing can be obtained or, if obtained, that such financing will be on terms
that are acceptable to the Company. In addition, in the event a portion of the
Paramus property is condemned, the Company's plan for development of this
property would be affected, and the cost and time required to develop the
property may materially increase.
The Company's properties do not generate sufficient cash flow to pay all of
its expenses. However, the Company estimates that the net proceeds from
financings consummated during the first quarter of 1995 will be adequate to
fund its business operations, debt service obligations and construction costs
of the projects referred to above.
Page 12 of 16
<PAGE> 13
ALEXANDER'S, INC.
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits: The following exhibits are filed with this
Quarterly Report on Form 10-Q.
27 Financial Data Schedule
(b) Reports on Form 8-K
During the quarter ended March 31, 1995, Alexander's,
Inc. filed the report on Form 8-K described below.
<TABLE>
<CAPTION>
Period Covered:
(Date of Earliest
Event Reported) Items Reported Date of Report
----------------- -------------- --------------
<S> <C> <C>
January 4, 1995 5. Other events - re: January 4, 1995
Seven Thirty One Limited
Partnership
February 6, 1995 5. Other events - re: February 6, 1995
Vornado Realty Trust
</TABLE>
Page 13 of 16
<PAGE> 14
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)
/s/ Brian Kurtz
Date: May 8, 1995 -------------------------------------------
BRIAN KURTZ
Chief Administrative Officer
Executive Vice President and Secretary
/s/ Steven Santora
Date: May 8, 1995 -------------------------------------------
STEVEN SANTORA
Vice President and Controller
Chief Accounting Officer
Page 14 of 16
<PAGE> 15
ALEXANDER'S, INC.
EXHIBIT INDEX
<TABLE>
<CAPTION>
PAGE NUMBER IN
SEQUENTIAL
EXHIBIT NO. NUMBERING
----------- ---------------
<S> <C> <C>
27 Financial Data Schedule 16
</TABLE>
Page 15 of 16
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Company's unaudited financial statements for the three months ended March 31,
1995 and is qualified in its entirety by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> MAR-31-1995
<CASH> 51,210
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 22,837
<PP&E> 147,667
<DEPRECIATION> (36,631)
<TOTAL-ASSETS> 185,083
<CURRENT-LIABILITIES> 51,081
<BONDS> 157,019
<COMMON> 5,174
0
0
<OTHER-SE> (28,191)
<TOTAL-LIABILITY-AND-EQUITY> 185,083
<SALES> 3,423
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 3,631
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2,739
<INCOME-PRETAX> (2,850)
<INCOME-TAX> (1,406)
<INCOME-CONTINUING> (1,444)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,444)
<EPS-PRIMARY> (.29)
<EPS-DILUTED> 0
</TABLE>
