SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended January 31, 1998 Commission File No. 0-8862
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First Hartford Corporation
--------------------------
(Exact name of registrant as
specified in its charter)
Maine 01-0185800
- - ------------------------ -------------------
(State of Incorporation) (I.R.S. Employer
Identification No.)
149 Colonial Rd., P.O. Box 1270, Manchester, CT 06045-1270
- - ----------------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
(860) 646-6555
- - --------------------------------------------------------------------------------
(Registrant's telephone number, including area code)
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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, and (2) has been subject to such filing
requirements for the past 90 days.
YES |_| NO |X|
As of September 19, 1997, 3,089,985 shares of common stock of the
Registrant were outstanding.
<PAGE>
FIRST HARTFORD CORPORATION
INDEX
PART I. FINANCIAL INFORMATION PAGE
----
Item 1. Financial Statements
Consolidated Balance Sheets -
Jan. 31, 1998 and April 30, 1997 1 & 2
Consolidated Statements of Income (Loss)
Nine Months and Three Months
Ended January 31, 1998, 1997 3
Consolidated Statements of Cash Flows
Nine Months and Three Months
Ended January 31, 1998, 1997 4 & 5
Notes to Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis
of Financial Condition and Results
of Operations 7
PART II. OTHER INFORMATION
Signatures 8
<PAGE>
PART I - FINANCIAL INFORMATION
FIRST HARTFORD CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
Assets Jan. 31, April 30,
1998 1997
----------- -----------
Real Estate and equipment:
Developed properties $ 5,269,443 $14,740,768
(Net of $499,802; 1998, $6,390,802;
1997 write down to Estimated Market Values)
Equipment and leasehold improvements 171,228 339,570
----------- -----------
$ 5,440,671 $15,080,338
Less accumulated depreciation and
amortization 905,283 3,906,929
----------- -----------
$ 4,535,388 $11,173,409
Properties under construction and
investment in undeveloped properties 673,371 1,104,498
----------- -----------
$ 5,208,759 $12,277,907
Cash 156,225 216,148
Accounts receivable, less allowance
for doubtful accounts 194,769 154,786
Deposits, escrows, and prepaid and
deferred expenses 684,674 813,265
Due from related parties and affiliates, and
investment in affiliated partnership 908,238 953,412
----------- -----------
$ 7,152,665 $14,415,518
=========== ===========
The accompanying notes are an integral part
of these financial statements.
1
<PAGE>
PART I - FINANCIAL INFORMATION
FIRST HARTFORD CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
Jan. 31, April 30,
1998 1997
------------ ------------
Liabilities:
Mortgages, notes payable
and capital lease obligations:
Mortgages payable 4,241,218 16,466,162
Notes Payable:
Other 4,178,979 3,625,000
------------ ------------
$ 8,420,197 $ 20,091,162
Accounts payable 1,804,413 2,552,066
Accrued Liabilities 1,613,833 8,280,019
Due to Related Parties and affiliated
partnerships 980,856 1,853,204
------------ ------------
$ 12,819,299 $ 32,776,451
Shareholders' equity (deficiency):
Common stock, $1 par; authorized
6,000,000 shares; issued 3,322,213
shares 3,322,213 3,322,213
Capital in excess of par 4,857,645 4,857,645
Deficit (11,778,368) (24,472,667)
------------ ------------
($ 3,598,510) ($16,292,809)
Less 232,228 shares of common stock
held in treasury, at cost 2,068,124 2,068,124
------------ ------------
($ 5,666,634) ($18,360,933)
------------ ------------
$ 7,152,665 $ 14,415,518
============ ============
The accompanying notes are an integral part
of these financial statements.
2
<PAGE>
FIRST HARTFORD CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME (LOSS)
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Ended Three Months Ended
----------------- ------------------
January 31, 1998 January 31, 1997 January 31, 1998 January 31, 1997
---------------- ---------------- ---------------- ----------------
<S> <C> <C> <C> <C>
REVENUES, INCLUDING RELATED
PARTY RESPECTIVELY:
Sale of Real Estate $ 12,696,700 $ -- $ 11,187,000 $ --
Construction 165,795 216,371 45,054 47,107
Rental 2,006,681 1,917,770 714,821 654,994
Other 283,091 1,217,235 45,982 792,187
Partnership Distribution
Sale of Partnership Interest -- 861,429 -- 385,500
Non Recurring Gain 10,073,398 -- 9,643,398 --
---------------- ---------------- ---------------- ----------------
$ 25,225,665 $ 4,212,805 $ 21,636,255 $ 1,879,788
COSTS AND EXPENSES:
Cost of Sales R/E $ 7,910,234 $ -- $ 6,338,430 $ --
Construction 104,435 88,963 31,568 8,904
Operating, selling general
and administrative 2,901,294 2,089,839 2,146,873 621,879
Interest 1,075,109 1,313,025 338,120 448,050
Depreciation and amortization 389,982 412,153 107,946 140,262
Real Estate Taxes 50,312 226,782 (104,561) 75,284
---------------- ---------------- ---------------- ----------------
$ 12,431,366 $ 4,130,762 $ 8,858,376 $ 1,294,379
NET INCOME (LOSS) BEFORE
INC. TAX $ 12,794,299 $ 82,043 $ 12,777,879 $ 585,409
Federal Income Tax 100,000 -- 100,000 --
NET INCOME (LOSS) AFTER
INC. TAX $ 12,694,299 $ 82,043 $ 12,677,879 $ 585,409
================ ================ ================ ================
INCOME (LOSS) PER SHARE $ 4.11 $ 0.03 $ 4.10 $ 0.19
Weighted Average Number of
Common Shares Outstanding 3,089,985 3,089,985 3,089,985 3,089,985
================ ================ ================ ================
</TABLE>
The accompanying notes are an integral part
of these financial statements.
3
<PAGE>
FIRST HARTFORD CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
JANUARY 31, 1998
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
<TABLE>
<CAPTION>
Cash flows from operating 9 months ended 3 months ended
activities: 01/31/98 01/31/97 01/31/98 01/31/97
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Net Profit (Loss) $ 12,694,299 $ 82,043 $ 12,677,879 $ 585,409
Adjustments to reconcile net loss
to net cash used in operating activities:
Depreciation 386,627 408,799 106,827 139,144
Amortization 3,354 3,354 1,118 1,118
Changes in assets and liabilities:
Increase (Decrease) in:
Accounts & Notes Receivable (39,983) 58,730 (72,145) (10,642)
Deposits, escrows, prepaid and
deferred expenses 125,237 (11,727) 102,477 (169,294)
Accrued liabilities (6,668,187) 537,978 (6,744,967) 448,473
Decrease in:
Acct's payable & cash overdrafts (747,653) (42,064) (178,427) (194,081)
------------ ------------ ------------ ------------
Net cash used in oper. activities 5,753,694 1,037,113 5,892,762 800,127
------------ ------------ ------------ ------------
Cash flow from investing activities:
Proceeds from Sale of Real Estate 7,562,594 -- 6,146,742 --
Purchases of Investments (88,485) (30,216)
Purchase of equip & leasehold imp (60,316) (138,185) (24,665) (23,469)
Payments for:
Additions to properties
under construction (819,757) (2,176,665) (505,074) (528,127)
------------ ------------ ------------ ------------
Net Cash used in investing
activities: $ 6,682,521 ($ 2,403,335) $ 5,617,003 ($ 581,812)
------------ ------------ ------------ ------------
</TABLE>
The accompanying notes are an integral part
of these financial statements.
4
<PAGE>
FIRST HARTFORD CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS, CONTINUED
JANUARY 31, 1998
INCREASE (DECREASE) IN CASH EQUIVALENTS
<TABLE>
<CAPTION>
Cash flows from operating 9 months ended 3 months ended
activities: 01/31/98 01/31/97 01/31/98 01/31/97
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Cash flows from operating activities:
Proceeds from:
Construction Loan $ -- $ 2,129,177 -- $ 428,917
Mortgage Payable
Notes Payable 819,046 573,600 690,000 150,000
Principal payments on:
Mortgage Payable (11,724,943) (103,613) (11,658,428) (33,323)
Notes Payable (765,067) (323,698) -- (2,198)
Advances from Related Parties and
affiliated Parties (825,174) (672,609) (1,027,725) (754,337)
------------ ------------ ------------ ------------
Net Cash Provided by Financing
Activities (12,496,138) 1,602,857 (11,996,153) (210,941)
------------ ------------ ------------ ------------
Net Increase (Decrease) in cash
& Cash Equivalents (59,923) 236,635 (486,388) 7,374
Cash & Cash Equivalents
Beginning of Year 216,148 102,773 642,613 332,034
------------ ------------ ------------ ------------
Cash & Cash Equivalents
End of Year $ 156,225 $ 339,408 $ 156,225 $ 339,408
============ ============ ============ ============
</TABLE>
The accompanying notes are an integral part of these
financial statements.
5
<PAGE>
FIRST HARTFORD CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
In the current quarter, the Registrant was successful in selling apartment
properties which were about to go into foreclosure. These properties were
previously written down by $5,891,000. The Registrant is reporting a gain of
approximately $14,400,000 from that transaction.
At the same time, the Registrant has come to settlement terms with the
Pension Benefit Guaranty Corporation (PBGC) and the Department of Labor (DOL).
Under the settlement, the Company has paid approximately $500,000 in excess of
what was provided in prior Financial Statements. Additionally, the President of
the Registrant (Neil Ellis) has waived his benefits (valued between $550,000 -
$600,000) which made up the difference in funding shortfall.
The Company does not have any further pension liabilities.
Federal Income tax for the period is estimated at $100,000 based on the
Alternative Minimum Tax triggered by use of carry forward losses. The tax loss
carryover available for future periods is approximately $13.5 million.
6
<PAGE>
Item 2.
FIRST HARTFORD CORPORATION AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITIONS AND RESULTS OF OPERATIONS.
The Registrant is hopeful that legal battles are a thing of the past and
new focus can be put on Real Estate development. We are happy to report that May
17, 1998 marked the Grand Opening of T.J. Maxx in our Putnam Shopping Center and
that another 27,000 square feet of stores are under construction.
On May 15, 1998 we closed the financing on a 100,000 square foot center
anchored by an A & P supermarket.
7
<PAGE>
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.
FIRST HARTFORD CORPORATION
/s/ Stuart Greenwald
---------------------------
Stuart Greenwald
Treasurer
Chief Financial Officer
(Duly Authorized Officer,
Principal Financial and
Accounting Officer)
Date: 6/17/98
8
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from First
Hartford Corp., 10-Q and is qualified in its entirety by reference to such
financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> APR-30-1998
<PERIOD-START> MAY-01-1997
<PERIOD-END> JAN-31-1998
<CASH> 156,225
<SECURITIES> 0
<RECEIVABLES> 268,262
<ALLOWANCES> 73,493
<INVENTORY> 673,371
<CURRENT-ASSETS> 350,994
<PP&E> 5,440,671
<DEPRECIATION> 905,283
<TOTAL-ASSETS> 7,152,665
<CURRENT-LIABILITIES> 3,418,256
<BONDS> 8,420,197
0
0
<COMMON> 1,254,089
<OTHER-SE> (6,920,723)
<TOTAL-LIABILITY-AND-EQUITY> 7,152,665
<SALES> 12,696,700
<TOTAL-REVENUES> 25,225,665
<CGS> 7,910,234
<TOTAL-COSTS> 439,646
<OTHER-EXPENSES> 3,006,377
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,075,109
<INCOME-PRETAX> 12,794,299
<INCOME-TAX> 100,000
<INCOME-CONTINUING> 12,694,299
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 12,694,299
<EPS-PRIMARY> 4.11
<EPS-DILUTED> 4.11
</TABLE>
