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 Oct. 31, 1999 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 Road, Manchester, Connecticut 06040
- ------------------------------------------ ----------
(Address of principal executive offices) (Zip Code)
(860) 646-6555
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(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 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, 1999 and April 30, 1999 1 & 2
Consolidated Statements of Income (Loss)
Six Months Ended Oct. 31, 1999 and
Six Months Ended Oct. 31, 1998 3
Consolidated Statements of Cash Flows
Six Months Ended Oct. 31, 1999 and
Six Months Ended Oct. 31, 1998 4 & 5
Item 2. Management's Discussion and Analysis
of Financial Condition and Results
of Operations 6
PART II. OTHER INFORMATION
Signatures 7
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements:
FIRST HARTFORD CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
Assets Oct. 31, April 30,
1999 1999
----------- -----------
Real Estate and equipment:
Developed properties $20,200,771 $ 7,379,545
Equipment and leasehold improvements 123,052 117,311
----------- -----------
$20,323,823 $ 7,496,856
Less accumulated depreciation and
amortization 1,081,139 941,535
----------- -----------
$19,242,684 $ 6,555,321
Properties under construction and
investment in undeveloped properties $ -- $11,641,378
----------- -----------
$19,242,684 $18,196,699
Cash 43,819 106,017
Accounts receivable, less allowance
for doubtful accounts 166,003 69,953
Deposits, escrows, and prepaid and
deferred expenses 1,435,291 1,167,942
Due from related parties and affiliates, and
investment in affiliated partnership 2,373,388 1,729,140
Deferred Tax Assets 1,606,441 1,606,441
----------- -----------
$24,867,626 $22,876,192
=========== ===========
1
<PAGE>
PART I - FINANCIAL INFORMATION
FIRST HARTFORD CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
Oct. 31, April 30,
1999 1999
------------ ------------
Liabilities:
Mortgages and notes payable
Construction loan payable $ 12,402,452 $ 10,161,257
Mortgages payable $ 7,752,655 $ 7,849,778
Notes Payable:
Other 5,143,658 3,818,659
------------ ------------
$ 25,298,765 $ 21,829,694
Accounts payable 2,068,594 3,101,020
Accrued Liabilities 758,819 639,001
Due to Related Parties and affiliated
partnerships 1,754,013 1,834,624
------------ ------------
$ 29,880,191 $ 27,404,339
Shareholders' equity (deficiency):
Common stock, $1 par; authorized
6,000,000 shares; issued 3,322,213
shares 3,322,213 3,322,213
Capital in excess of par 4,857,645 4,857,645
Deficit (11,124,299) (10,639,881)
------------ ------------
($ 2,944,441) ($ 2,460,023)
Less 232,228 shares of common stock
held in treasury, at cost 2,068,124 2,068,124
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($ 5,012,565) ($ 4,528,147)
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$ 24,867,626 $ 22,876,192
============ ============
2
<PAGE>
FIRST HARTFORD CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME (LOSS)
(Unaudited)
<TABLE>
<CAPTION>
Six Months Ended Three Months Ended
---------------- ------------------
October 31, 1999 October 31, 1998 October 31, 1999 October 31, 1998
---------------- ---------------- ---------------- ----------------
<S> <C> <C> <C> <C>
REVENUES, INCLUDING RELATED
PARTY RESPECTIVELY:
Sale of Real Estate $ -- $ 376,500 $ -- $ 190,000
Construction 274,739 107,622 194,996 43,674
Rental 1,305,504 515,209 751,953 266,232
Other 215,605 462,678 183,848 401,989
$ 1,795,848 $ 1,462,009 $ 1,130,797 $ 901,895
COSTS AND EXPENSES:
Cost of Sale of Real Estate $- $ 373,595 $- $ 187,513
Construction 142,304 83,148 106,668 37,559
Operating, selling general
and administrative 926,521 833,629 515,202 435,386
Interest 888,198 284,373 474,627 140,185
Depreciation and amortization 147,235 97,234 74,021 52,270
Real Estate Taxes 176,009 63,073 148,089 23,993
----------- ----------- ----------- -----------
$ 2,280,267 $ 1,735,052 $ 1,318,607 $ 876,906
NET INCOME (LOSS) BEFORE
INC. TAX ($ 484,419) ($ 273,043) ($ 187,810) $ 24,989
Federal Income Tax -- -- -- --
----------- ----------- ----------- -----------
NET INCOME (LOSS) AFTER
INC. TAX ($ 484,419) ($ 273,043) ( $187,180) $ 24,989
=========== =========== =========== ===========
INCOME (LOSS) PER SHARE ($ 0.16) ($ 0.09) ($ .06) $ 0.01
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, 1999
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
<TABLE>
<CAPTION>
Cash flows from operating 6 months ended 3 months ended
activities: 10/31/99 10/31/98 10/31/99 10/31/98
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Net Profit (Loss) ($ 484,419) ($ 273,043) ($ 187,770) $ 24,988
Adjustments to reconcile net loss
to net cash used in operating activities:
Depreciation 140,426 93,852 69,976 50,006
Amortization 6,809 3,382 4,046 2,264
Changes in assets and liabilities:
Increase (Decrease) in:
Accounts & Notes Receivable (96,050) 6,497 (97,942) 70,775
Deposits, escrows, prepaid and
deferred expenses (274,158) (95,777) (18,402) (72,996)
Accrued liabilities 119,818 (74,052) 75,054 (25,059)
Decrease in:
Acct's payable (1,032,426) 327,952 (309,333) 525,230
----------- ----------- ----------- -----------
Net cash used in oper. activities ($1,620,000) ($ 11,189) ($ 464,371) $ 575,208
----------- ----------- ----------- -----------
Cash flow from investing activities:
Proceed from Sale of Real Estate -- 339,515 -- 168,546
Purchase of equip & leasehold imp (6,690) (13,012) (2,397) (323)
Payments for:
Additions to properties
under construction (1,179,721) (5,626,039) (303,585) (2,658,363)
----------- ----------- ----------- -----------
Net Cash used in investing
activities: (1,186,411) (5,299,536) (305,982) (2,490,140)
----------- ----------- ----------- -----------
</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, 1999
INCREASE (DECREASE) IN CASH EQUIVALENTS
<TABLE>
<CAPTION>
Cash flows from operating 6 months ended 3 months ended
activities: 10/31/99 10/31/98 10/31/99 10/31/98
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Cash flows from operating activities:
Proceeds from:
Construction Loan 2,241,195 7,984,067 376,594 2,613,428
Mortgage Payable -- -- -- --
Notes Payable 1,325,000 -- 975,000 --
Principal payments on:
Construction Loan -- (1,650,000) -- (194,480)
Mortgage Payable (97,121) (387,955) (47,532) (85,184)
Notes Payable -- (235,184) -- --
Adv. from Related Parties and
affiliated Parties (724,861) (369,275) (527,234) (418,600)
----------- ----------- ----------- -----------
Net Cash Provided by Financing
Activities 2,744,213 5,341,653 776,828 1,915,164
----------- ----------- ----------- -----------
Net Increase (Decrease) in cash
& Cash Equivalents (62,198) 30,928 6,475 232
Cash & Cash Equivalents
Beginning of Year 106,017 4,118 37,344 34,814
----------- ----------- ----------- -----------
Cash & Cash Equivalents
End of Year $ 43,819 $ 35,046 $ 43,819 $ 35,046
=========== =========== =========== ===========
</TABLE>
The accompanying notes are an integral part
of these financial statements.
5
<PAGE>
Item 2. FIRST HARTFORD CORPORATION AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Result of Operations
The quarter ended October 31, 1999 produced a loss of $188,000 or (.06)
per share compared to a gain of $25,000 or .01 per share for the quarter ended
October 31, 1998. For the six month period, a loss of $484,000 or (.16) per
share compares to a loss of $273,000 or (.09) per share for the period ending
October 31, 1998.
For the three and six months periods ending October 31, 1999, rental
income has increased to $752,000 and $1,306,000 from $266,000 and $515,000 from
the comparable period in 1998. New rentals have stabilized and should be up only
slightly between the second and third quarters.
The Registrant is presently building a shopping center in Dover Township,
New Jersey as a Joint Venture in which the Registrant has 50% ownership. The
construction loan was not closed until November, 1999. At October 31, 1999, the
Registrant had advanced in excess of $600,000 into the project.
There are two additional projects that the Registrant is attempting to
develop. The Registrant has advanced approximately $500,000 into these projects
to make option payments and to pay outside professionals. These advances are
included in the Balance Sheet as Due from related parties and affiliates and
investment in affiliated partnerships. Mainly, as a result of these
transactions, Notes Payable have increased $1.3 million over the six month
period.
Capital resource and liquidity have always been a major impediment of the
Registrant. Reputation, industry contacts and capital resources are the key
elements of the real estate development business. Management has continued to
explore new lenders and believes it will continue to find capital resources at
higher but reasonable rates. Liquidity is worked on a daily basis through tight
cash management and the Registrant believes that will be adequate. In the event
that it is not, the Registrant will seek to bring a partner into one of the
existing properties or an outright sale.
6
<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: 12/15/99
----------------------------
7
<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-30-2000
<PERIOD-START> MAY-01-1999
<PERIOD-END> OCT-31-1999
<CASH> 43,819
<SECURITIES> 0
<RECEIVABLES> 212,004
<ALLOWANCES> 46,000
<INVENTORY> 0
<CURRENT-ASSETS> 209,822
<PP&E> 20,323,823
<DEPRECIATION> 1,081,139
<TOTAL-ASSETS> 24,867,626
<CURRENT-LIABILITIES> 2,827,413
<BONDS> 25,298,765
0
0
<COMMON> 1,254,089
<OTHER-SE> 6,266,654
<TOTAL-LIABILITY-AND-EQUITY> 24,867,626
<SALES> 0
<TOTAL-REVENUES> 1,795,848
<CGS> 0
<TOTAL-COSTS> 227,556
<OTHER-EXPENSES> 2,052,711
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 888,194
<INCOME-PRETAX> (484,419)
<INCOME-TAX> 0
<INCOME-CONTINUING> (484,419)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (484,419)
<EPS-BASIC> (.06)
<EPS-DILUTED> (.06)
</TABLE>
