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 Jan. 31, 1999 Commission File No. 0-8862
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First Hartford Corporation
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(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 -
Jan. 31, 1999 and April 30, 1998 1 & 2
Consolidated Statements of Income (Loss)
Nine Months Ended Jan. 31, 1999 and
Nine Months Ended Jan. 31, 1998 3
Consolidated Statements of Cash Flows
Nine Months Ended Jan. 31, 1999 and
Nine Months Ended Jan. 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 Jan. 31, April 30,
1999 1998
----------- ----------
Real Estate and equipment:
Developed properties $ 7,367,322 $5,269,443
Equipment and leasehold improvements 159,092 168,726
----------- ----------
$ 7,526,414 $5,438,169
Less accumulated depreciation and
amortization 933,178 938,132
----------- ----------
$ 6,593,236 $4,500,037
Properties under construction and
investment in undeveloped properties $ 8,620,520 $2,148,678
----------- ----------
$15,213,756 $6,648,715
Cash 99,767 4,118
Accounts receivable, less allowance
for doubtful accounts 81,160 144,115
Deposits, escrows, and prepaid and
deferred expenses 1,011,243 757,939
Due from related parties and affiliates, and
investment in affiliated partnership 1,497,275 622,476
----------- ----------
$17,903,201 $8,177,363
=========== ==========
1
<PAGE>
PART I - FINANCIAL INFORMATION
FIRST HARTFORD CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
Jan. 31, April 30,
1999 1998
------------ ------------
Liabilities:
Mortgages and notes payable
and capital lease obligations:
Construction loan payable $ 7,910,571 $ 1,575,925
Mortgages payable $ 7,937,233 $ 4,717,963
Notes Payable:
Other 2,918,658 3,853,842
------------ ------------
$ 18,766,462 $ 10,147,730
Accounts payable 3,074,669 2,281,671
Accrued Liabilities 731,717 870,832
Due to Related Parties and affiliated
partnerships 2,114,915 1,045,502
------------ ------------
$ 24,687,763 $ 14,345,735
Shareholders' equity (deficiency):
Common stock, $1 par; authorized
6,000,000 shares; issued 3,322,213
shares 3,322,213 3,322,213
Capital in excess of par 4,857,645 4,857,645
Deficit (12,896,296) (12,280,106)
------------ ------------
($ 4,716,438) ($ 4,100,248)
Less 232,228 shares of common stock
held in treasury, at cost 2,068,124 2,068,124
------------ ------------
($ 6,784,562) ($ 6,168,372)
------------ ------------
$ 17,903,201 $ 8,177,363
============ ============
2
<PAGE>
FIRST HARTFORD CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME (LOSS)
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Ended Three Months Ended
----------------- ------------------
January 31, 1999 January 31, 1998 January 31, 1999 January 31, 1998
---------------- ---------------- ---------------- ----------------
<S> <C> <C> <C> <C>
REVENUES, INCLUDING RELATED
PARTY RESPECTIVELY:
Sale of Real Estate $ 472,000 $ 12,696,700 $ 95,500 $ 11,187,000
Construction 138,176 165,795 30,554 45,054
Rental 831,433 2,006,681 316,224 714,821
Other 549,700 283,091 87,022 45,982
Non-Recurring Gain -- 10,073,398 -- 9,643,398
------------ ------------ ------------ ------------
$ 1,991,309 $ 25,225,665 $ 529,300 $ 21,636,255
COSTS AND EXPENSES:
Cost of Sale of Real Estate $ 464,005 $ 7,910,234 $ 90,410 $ 6,338,430
Construction 108,184 104,435 25,036 31,568
Operating, selling general
and administrative 1,329,157 2,901,294 495,528 2,146,873
Interest 470,487 1,075,109 186,114 338,120
Depreciation and amortization 147,343 389,982 50,109 107,946
Real Estate Taxes 88,324 50,312 25,251 (104,561)
------------ ------------ ------------ ------------
$ 2,607,500 12,431,366 $ 872,448 $ 8,858,376
NET INCOME (LOSS) BEFORE
INC. TAX ($ 616,191) $ 12,794,299 ($ 343,148) $ 12,777,879
Federal Income Tax -- 100,000 -- 100,000
------------ ------------ ------------ ------------
NET INCOME (LOSS) AFTER
INC. TAX ($ 616,191) $ 12,694,299 ($ 343,148) $ 12,677,879
============ ============ ============ ============
INCOME (LOSS) PER SHARE ($ 0.20) $ 4.11 $ (0.11) $ 4.10
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, 1999
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
<TABLE>
<CAPTION>
Cash flows from operating 9 months ended 3 months ended
activities: 01/31/99 01/31/98 01/31/99 01/31/98
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Net Profit (Loss) ($ 616,190) $ 12,694,299 ($ 343,147) $ 12,677,879
Adjustments to reconcile net loss
to net cash used in operating activities:
Depreciation 141,106 386,627 47,254 106,827
Amortization 6,237 3,354 2,855 1,118
Changes in assets and liabilities:
Increase (Decrease) in:
Accounts & Notes Receivable 62,955 (39,983) 56,458 (72,145)
Deposits, escrows, prepaid and
deferred expenses (259,541) 125,237 (163,764) 102,477
Accrued liabilities (139,115) (6,668,187) (65,063) (6,744,967)
Decrease in:
Acct's payable 792,998 (747,653) 465,046 (178,427)
------------ ------------ ------------ ------------
Net cash used in oper. activities (11,550) 5,753,694 (361) 5,892,762
------------ ------------ ------------ ------------
Cash flow from investing activities:
Proceed from Sale of Real Estate 420,665 7,562,594 81,150 6,146,742
Purchase of equip & leasehold imp (13,635) (60,316) (623) (24,665)
Payments for:
Additions to properties
under construction (9,113,177) (819,757) (3,487,138) (505,074)
------------ ------------ ------------ ------------
Net Cash used in investing
activities: ($ 8,706,147) $ 6,682,521 (3,406,611) $ 5,617,003
------------ ------------ ------------ ------------
</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, 1999
INCREASE (DECREASE) IN CASH EQUIVALENTS
<TABLE>
<CAPTION>
Cash flows from operating 9 months ended 3 months ended
activities: 01/31/99 01/31/98 01/31/99 01/31/98
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Cash flows from operating activities:
Proceeds from:
Construction Loan 11,709,646 -- 3,725,579 --
Mortgage Payable 3,725,000 -- 3,725,000 690,000
Notes Payable -- 819,046 -- --
Principal payments on:
Construction Loan (5,375,000) -- (3,725,000) --
Mortgage Payable (505,731) (11,724,943) (117,776) (11,658,428)
Notes Payable (935,184) (765,067) (700,000) --
Adv. from Related Parties and
affiliated Parties 194,615 (825,174) 563,890 (1,027,725)
------------ ------------ ------------ ------------
Net Cash Provided by Financing
Activities 8,813,346 (12,496,138) 3,471,693 (11,996,153)
------------ ------------ ------------ ------------
Net Increase (Decrease) in cash
& Cash Equivalents 95,649 (59,923) 64,721 (486,388)
Cash & Cash Equivalents
Beginning of Year 4,118 216,148 35,046 642,613
------------ ------------ ------------ ------------
Cash & Cash Equivalents
End of Year $ 99,767 $ 156,225 $ 99,767 $ 156,225
============ ============ ============ ============
</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 January 31, 1999 produced a loss of $343,00 or (.11) per
share compared to a profit of approximately $25,000 or .01 per share for the
prior quarter. The October 31, 1998 quarter would have produced a loss of
approximately $275,000 except for a $300,000 management fee received from an
affiliated company which became collectable that quarter.
The quarter ended January 31, 1998 is not easily comparable to its current
periods because it contains large gains from the sale of Real Estate as well as
extraordinary gains totaling approximately 14.4 million. On the expense side
there were costs of the settlement with the Pension Benefit Guarantee Corp. and
related legal expenses, the total cost of which was approximately one million
dollars. There were also substantial rental income and expenses resulting in
operating losses.
In the fiscal year April 30, 1999, management does not foresee any
opportunities to sell any additional properties. With rental and management
income greatly reduced from previous year levels, the Registrant believes
operating losses will occur for the foreseeable future.
Capital Resources and Liquidity
The Registrant has used the following discussion in its 10K for the year
ended April 30, 1998. We believe the outlook to be the same.
In the past four (4) years, the Registrant has pursued an aggressive path
to end litigation and pay down its debt. Management believes both of those
objectives were met, as there is no material litigation currently on the horizon
and debt has been reduced by more than $35,000,000.00. To achieve this result,
virtually all of our partnership interests and most of our developed properties
had been sold. We are currently on a path to attempt to rebuild our asset base.
Shopping centers are under construction in Putnam, Connecticut and Mount Olive,
New Jersey. Other properties are held under option which hopefully will result
in additional developments.
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 we will continue to find capital resources at
reasonable rates. Liquidity is worked on a daily basis through tight cash
management and the Registrant believes that will be adequate through the end of
the year.
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: March 16, 1999
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> 9-MOS
<FISCAL-YEAR-END> APR-30-1999
<PERIOD-START> MAY-01-1998
<PERIOD-END> JAN-01-1999
<CASH> 99,767
<SECURITIES> 0
<RECEIVABLES> 133,360
<ALLOWANCES> 52,200
<INVENTORY> 8,620,520
<CURRENT-ASSETS> 180,927
<PP&E> 7,526,414
<DEPRECIATION> 933,178
<TOTAL-ASSETS> 17,903,201
<CURRENT-LIABILITIES> 3,806,386
<BONDS> 18,766,462
0
0
<COMMON> 1,254,089
<OTHER-SE> (8,038,615)
<TOTAL-LIABILITY-AND-EQUITY> 17,903,201
<SALES> 472,000
<TOTAL-REVENUES> 1,991,309
<CGS> 464,005
<TOTAL-COSTS> 198,724
<OTHER-EXPENSES> 1,944,771
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 470,487
<INCOME-PRETAX> (616,191)
<INCOME-TAX> 0
<INCOME-CONTINUING> (616,191)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (616,191)
<EPS-PRIMARY> (.20)
<EPS-DILUTED> (.20)
</TABLE>
