SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
F O R M 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended October 31, 1997 Commission File No. 0-8862
-------------------------------------------------------
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 Road,Manchester, Connecticut 06045-1270
- ----------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
(860) 646-6555
- --------------------------------------------------------------------------------
(Registrant's telephone number, including area code)
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 November 8, 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 -
Oct. 31, 1997 and April 30, 1997 1 & 2
Consolidated Statements of Income (Loss)
Six Months Ended Oct. 31, 1997 and
Six Months Ended Oct. 31, 1996 3
Consolidated Statements of Cash Flows
Six Months Ended Oct. 31, 1997 and
Six Months Ended Oct. 31, 1996 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 Oct. 31, April 30,
------ 1997 1997
----------- -----------
Real Estate and equipment:
Developed properties (Notes) $14,744,096 $14,740,768
(Net of $6,390,802 write down
to Estimated Market Values)
Equipment and leasehold improvements 375,221 339,570
----------- -----------
$15,119,317 $15,080,338
Less accumulated depreciation and
amortization 4,186,728 3,906,929
----------- -----------
$10,932,589 $11,173,409
Properties under construction and
investment in undeveloped properties -- 1,104,498
----------- -----------
$10,932,589 $12,277,907
Cash 642,613 216,148
Accounts receivable, less allowance
for doubtful accounts 122,624 154,786
Deposits, escrows, and prepaid and
deferred expenses 788,269 813,265
Due from related parties and affiliates, and
investment in affiliated partnership 1,042,777 953,412
----------- -----------
$13,528,872 $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)
Oct. 31, April 30,
1997 1997
----------- -----------
Liabilities:
Mortgages, notes payable
and capital lease obligations:
Mortgages payable (Notes) $ 16,399,647 $ 16,466,162
Notes Payable:
Other 2,988,979 3,625,000
------------ ------------
$ 19,388,626 $ 20,091,162
Accounts payable 1,982,840 2,552,066
Accrued Liabilities (Notes) 8,356,799 8,280,019
Due to Related Parties and affiliated
partnerships 2,145,120 1,853,204
------------ ------------
$ 31,873,385 $ 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 (24,456,247) (24,472,667)
------------ ------------
$(16,276,389) $(16,292,809)
Less 232,228 shares of common stock
held in treasury, at cost 2,068,124 2,068,124
------------ ------------
$(18,344,513) $(18,360,933)
------------ ------------
$ 13,528,872 $ 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>
Six Months Ended Three Months Ended
---------------- ------------------
October 31, 1997 October 31, 1996 October 31, 1997 October 31, 1996
---------------- ---------------- ---------------- ----------------
<S> <C> <C> <C> <C>
REVENUES, INCLUDING RELATED
PARTY RESPECTIVELY:
Sale of Real Estate $ 1,509,700 $ -- $ -- $ --
Construction 120,741 169,264 68,734 52,197
Rental 1,291,860 1,262,776 589,488 641,947
Other 237,109 425,048 221,963 300,060
Non-Recurring Gain
Sale of Partnership Interest -- 475,929 -- 283,645
Other 430,000 -- -- --
----------- ----------- ----------- -----------
$ 3,589,410 $ 2,333,017 $ 880,185 $ 1,277,849
COSTS AND EXPENSES:
Cost of Sale
of Real Estate $ 1,571,804 $ -- $ 83,791 $ --
Construction 72,867 80,059 37,923 10,429
Operating, selling general
and administrative 754,421 1,467,960 367,107 670,843
Interest 736,989 864,975 361,449 456,455
Depreciation and amortization 282,036 271,891 141,827 138,793
Real Estate Taxes 154,873 151,498 76,386 76,537
----------- ----------- ----------- -----------
$ 3,572,990 $ 2,836,383 $ 1,068,483 $ 1,353,057
NET INCOME (LOSS) BEFORE
INC. TAX $ 16,420 $ (503,366) $ (188,298) $ (75,208)
Federal Income Tax -- -- -- --
----------- ----------- ----------- -----------
NET INCOME (LOSS) AFTER
INC. TAX $ 16,420 $ (503,366) $ (188,298) $ (75,208)
=========== =========== =========== ===========
INCOME (LOSS) PER SHARE $ .01 $ (0.16) $ (0.06) $ (0.02)
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
OCTOBER 31, 1997
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
<TABLE>
<CAPTION>
Cash flows from operating 6 months ended 3 months ended
activities: 10/31/97 10/31/96 10/31/97 10/31/96
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Net Profit (Loss) $ 16,420 $ (503,366) $ (188,298) $ (75,208)
Adjustments to reconcile net loss
to net cash used in
operating activities:
Depreciation 279,800 269,655 140,709 137,716
Amortization 2,236 2,236 1,118 1,118
Changes in assets and liabilities:
Increase (Decrease) in:
Accounts & Notes Receivable 32,162 69,372 74,121 34,038
Deposits, escrows, prepaid and
deferred expenses 22,760 157,567 77,476 254,080
Accrued liabilities 76,780 89,505 115,755 (196,218)
Decrease in:
Acct's payable & cash overdrafts (569,226) 152,017 (37,803) 101,545
----------- ----------- ----------- -----------
Net cash used in oper. activities $ (139,068) $ 236,986 $ 183,078 $ 257,071
----------- ----------- ----------- -----------
Cash flow from investing activities:
Purchases of Investments (35,651) (58,269) (19,342) (29,811)
Purchase of equip & leasehold imp 1,415,852 (114,716) 000,000 (70,336)
Payments for:
Additions to properties
under construction (314,683) (1,648,538) (3,329) (1,022,478)
----------- ----------- ----------- -----------
Net Cash used in investing
activities: 1,065,518 $(1,821,523) (22,671) $(1,122,625)
----------- ----------- ----------- -----------
</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
OCTOBER 31, 1997
INCREASE (DECREASE) IN CASH EQUIVALENTS
<TABLE>
<CAPTION>
Cash flows from operating 6 months ended 3 months ended
activities: 10/31/97 10/31/96 10/31/97 10/31/96
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Cash flows from operating
activities:
Proceeds from:
Construction Loan $ 1,700,260 $ 1,259,727
Mortgage Payable 129,046
Notes Payable 129,046 423,600 285,100
Principal payments on:
Mortgage Payable (66,515) (70,290) (22,251) (35,368)
Notes Payable (765,067) (321,500) (22,500) (321,500)
Adv. from Related Parties and
affiliated Parties 202,551 81,728 23,805 2,221
----------- ----------- ----------- -----------
Net Cash Provided by Financing
Activities (499,985) 1,813,798 108,100 1,190,180
----------- ----------- ----------- -----------
Net Increase (Decrease) in cash
& Cash Equivalents 426,465 229,261 268,507 324,626
Cash & Cash Equivalents
Beginning of Year 216,148 102,773 374,106 7,408
----------- ----------- ----------- -----------
Cash & Cash Equivalents
End of Year $ 642,613 $ 332,034 $ 642,613 $ 332,034
=========== =========== =========== ===========
</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 quarter ended January 31, 1998, 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 will
report a gain of approximately $14,400,000 from that transaction. Net property
assets will be reduced $6,300,000 while mortgages and accrued interest will be
reduced $18,700,800.
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 is provided in the current Financial Statement. 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 will have no further pension liabilities.
Although the Registrant believes it has fully complied with the settlement
documents, they are, as of this date, unsigned by the PBGC.
6
<PAGE>
Item 2.
FIRST HARTFORD CORPORATION AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITIONS AND RESULTS OF OPERATIONS.
In an effort to continue in business until the PBGC was satisfied and
their liens removed from the Registrant's assets, a new business entity was
created. This entity has carried the Company through this trying period.
Operating losses for this entity are $239,000 and $238,000 for the quarters
ended July 31, 1997 and October 31, 1997, respectively. These losses are not
reflected in the current statements but will be included in subsequent periods.
(See Notes to Financials Statements.)
7
<PAGE>
PART II - OTHER INFORMATION
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: June 16, 1998
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> 6-MOS
<FISCAL-YEAR-END> APR-30-1998
<PERIOD-START> MAY-01-1997
<PERIOD-END> OCT-31-1997
<CASH> 642,613
<SECURITIES> 0
<RECEIVABLES> 196,117
<ALLOWANCES> 73,493
<INVENTORY> 0
<CURRENT-ASSETS> 765,237
<PP&E> 15,119,317
<DEPRECIATION> 4,186,728
<TOTAL-ASSETS> 13,528,872
<CURRENT-LIABILITIES> 10,339,639
<BONDS> 19,388,626
0
0
<COMMON> 1,254,089
<OTHER-SE> (19,598,602)
<TOTAL-LIABILITY-AND-EQUITY> 13,528,872
<SALES> 1,509,700
<TOTAL-REVENUES> 3,589,410
<CGS> 1,571,804
<TOTAL-COSTS> 290,345
<OTHER-EXPENSES> 1,710,821
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 736,989
<INCOME-PRETAX> 16,420
<INCOME-TAX> 0
<INCOME-CONTINUING> 16,420
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 16,420
<EPS-PRIMARY> .01
<EPS-DILUTED> .01
</TABLE>
