FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
Quarterly Report Under Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the Quarter Ended: SEPTEMBER 30, 1994
Commission File Number: 0-497
NEW MEXICO AND ARIZONA LAND COMPANY
Exact name of registrant as specified in its charter)
ARIZONA 43-0433090
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2810 NORTH THIRD STREET, SUITE 203, PHOENIX, ARIZONA 85004
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 602/266-5455
Indicate by check mark whether the registrant (1) has filed all
reports to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding twelve 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. Yes [X] No [ ]
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
COMMON STOCK, NO PAR VALUE 2,479,853
Class Outstanding at September 30, 1994
<PAGE> 2
New Mexico and Arizona Land Company and Subsidiaries FORM 10-Q
Page
Number
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated statements of operations for the three
and nine months ended September 30, 1994 and 1993 3
Consolidated balance sheets as of
September 30, 1994 and December 31, 1993 4
Consolidated statements of cash flows for the
nine months ended September 30,1994 and 1993 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 8
SIGNATURES 8
<PAGE> 3
<TABLE>
New Mexico and Arizona Land Company and Subsidiaries FORM 10-Q
PART 1 - FINANCIAL INFORMATION
ITEM 1: Financial Statements
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
<CAPTION>
Period ended September 30, Third Quarter Nine Months
(In thousands, except per share data) 1994 1993 1994 1993
- - -----------------------------------------------------------------
Revenues:
<S> <C> <C> <C> <C>
Property sales $2,330 $1,353 $7,461 $4,429
Property rentals 804 778 2,315 2,394
Investment income 243 225 960 654
Other 76 86 223 247
------ ------ ------ ------
3,453 2,442 10,959 7,724
Expenses:
Cost of property sales 1,350 948 4,144 2,732
Rental property 302 281 893 883
General and administrative 242 291 1,342 872
Interest 257 407 815 1,246
Depreciation, depletion
and amortization 135 150 404 451
Other 2 4 6 12
------ ------ ------ ------
2,288 2,081 7,604 6,196
Income Before Joint Ventures,
Minority Interests and
Income Taxes 1,165 361 3,355 1,528
Loss from joint ventures (11) (15) (199) (73)
Minority interests (139) (21) (455) (21)
Income Before Income Taxes 1,015 325 2,701 1,434
Provision for income taxes 390 131 1,087 571
------ ----- ------ -----
NET INCOME $ 625 $ 194 $1,614 $ 863
====== ===== ====== =====
Income Per Share of Common Stock $ 0.25 $0.08 $ 0.65 $0.35
====== ===== ====== =====
Average Number of Common Shares 2,480 2,481 2,480 2,481
====== ===== ====== =====
<FN>
See the accompanying Notes to Consolidated Financial Statements.
</FN>
</TABLE>
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<TABLE>
New Mexico and Arizona Land Company and Subsidiaries FORM 10-Q
ITEM 1: Financial Statements (continued)
CONSOLIDATED BALANCE SHEETS
<CAPTION>
Unaudited
September 30, December 31,
(Dollars in thousands) 1994 1993
- - ----------------------------------------------------------------
Assets
<S> <C> <C>
Properties, net $36,976 $35,899
Receivables, net 8,709 8,842
Investments in joint ventures 464 666
Cash and cash equivalents 2,498 534
Other 1,374 681
------- -------
Total Assets $50,021 $46,622
======= =======
Liabilities and Shareholders' Equity
Notes payable and lines of credit $16,010 $15,268
Accounts payable and accrued liabilities 1,864 1,306
Deferred revenue and commissions 5,679 5,566
Deferred income taxes 2,925 3,070
------- -------
Total liabilities 26,478 25,210
Minority Interests 747 259
Shareholders' Equity:
Common stock, no par value; 30,000,000
shares authorized; 2,490,679 shares
issued; 2,479,853 shares outstanding 7,812 7,812
Additional paid-in capital 920 891
Retained earnings 14,156 12,542
Treasury stock, at cost, 10,826 shares (92) (92)
------- -------
Total shareholders' equity 22,796 21,153
------- -------
Total Liabilities
and Shareholders' Equity $50,021 $46,622
======= =======
<FN>
See the accompanying Notes to Consolidated Financial Statements.
</FN>
</TABLE>
<PAGE> 5
<TABLE>
New Mexico and Arizona Land Company and Subsidiaries FORM 10-Q
ITEM 1: Financial Statements (continued)
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
<CAPTION>
Nine months ended September 30, 1994 1993
(Dollars in thousands)
- - -----------------------------------------------------------------
CASH FLOW FROM OPERATING ACTIVITIES:
<S> <C> <C>
Net income $1,614 $ 863
Non-cash items included above:
Depreciation, depletion and amortization 404 451
Deferred revenue (577) (611)
Deferred income taxes (145) (258)
Loss from joint ventures 198 73
Minority interests 455 21
Employee restricted stock plan 29 40
Net Change In:
Receivables 3 (14)
Land held for sale (1,091) (188)
Other assets (443) 154
Accounts payable and accrued liabilities 558 479
------ -----
Net cash flow from operating activities 1,005 1,010
CASH FLOW FROM INVESTING ACTIVITIES:
Additions to properties (660) (2,005)
Proceeds from sale of properties 270 55
Proceeds from notes receivable 820 884
Contribution to joint ventures 0 (19)
Distributions from joint ventures 4 43
------ ------
Net cash flow from investing activities 434 (1,042)
CASH FLOW FROM FINANCING ACTIVITIES:
Proceeds from debt 3,531 2,875
Payment of debt (3,039) (2,735)
Capital contribution from minority
interest partners 33 275
Purchase treasury shares 0 (51)
------ ------
Net cash flow from financing activities 525 364
------ ------
Net increase in cash and cash equivalents 1,964 332
------ ------
Cash and cash equivalents at
beginning of year 534 216
------ ------
Cash and cash equivalents at
end of period $2,498 $ 548
====== ======
<FN>
See the accompanying Notes to Consolidated Financial Statements
</FN>
</TABLE>
<PAGE> 6
New Mexico and Arizona Land Company and Subsidiaries FORM 10-Q
ITEM 1: Financial Statements (continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. In the opinion of the Company, the accompanying unaudited
consolidated financial statements contain all adjustments of only
a recurring nature necessary to present fairly the financial
position, the results of operations and cash flows for the
periods presented. The accompanying statements do not include
all disclosures considered necessary for a fair presentation in
conformity with generally accepted accounting principles.
Therefore, it is recommended that these accompanying statements
be read in conjunction with the notes to consolidated financial
statements appearing in the Company's 1993 annual report on Form
10-K.
2. The results of operations for the three and nine months
ended September 30, 1994 and 1993, are not necessarily indicative
of the results to be expected for the full year.
3. During the nine months ended September 30, 1994 and 1993,
the Company sold land in exchange for notes receivable in the
amount of $816,000 and $1,409,000 respectively, all of which was
deferred.
4. The Company s consolidated financial statements include
those of its wholly-owned subsidiaries, NZ Properties, Inc., NZ
Development Corporation and NZU Inc., along with three joint
ventures in which the Company holds a majority ownership.
5. Certain amounts have been reclassified for comparative
purposes.
6. Earnings per share are based on 2,479,853 and 2,480,906
shares in 1994 and 1993 respectively, which represent the
weighted average number of shares outstanding.
<PAGE> 7
New Mexico and Arizona Land Company and Subsidiaries FORM 10-Q
ITEM 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES
Cash flow from operations, along with unused borrowing capacity,
should be adequate for continuing operations and modest future
investments.
Financing, at the joint venture level, is being utilized to
develop single-family lots. These loans are secured by the
properties involved, along with guarantees from the Company and
its partner. On January 1, 1994 the Company s line of credit
converted to a reducing revolving term loan with a commitment
base of $3,750,000. On April 26,1994 the commitment base on this
line reduced to $2,500,000 and on January 1, 1995 the base will
further reduce to $1,250,000. The loan, which matures June 30,
1995, is secured by various real estate holdings and notes
receivable. At September 30, 1994 the Company had $150,000
borrowed on this line.
RESULTS OF OPERATIONS
For the nine months ended September 30, 1994, net income was
$1,614,000 ($.65 per share) compared to $863,000 ($.35 per share)
for the same period of 1993. During the nine month period of
1994, the Company recorded two major expense items, the liability
of $398,000 in connection with the resignation of its president
and additional depletion of $186,000 on certain of its oil and
gas interests. But, due to increased sales of single-family
lots, the sale of a 23-acre single-family site, the recognition
of interest income from a note receivable, and a decrease in
interest expense, earnings for the nine month period of 1994
outpaced those of the same period of 1993.
In October 1994, escrow closed on the sale of an
office/industrial building located in Phoenix and a multi-family
parcel in one of our Seven Bar projects in Albuquerque (NZ holds
a majority interest in the Seven Bar joint ventures). Proceeds
from these sales will result in a substantial gain in the fourth
quarter 1994. With the Seven Bar sale, the Company has recouped
its investment in one of the two Seven Bar joint ventures. Funds
from these and other sales are earmarked for reinvestment and the
Company is diligently pursuing redeployment of these assets.
<PAGE> 8
New Mexico and Arizona Land Company and Subsidiaries FORM 10-Q
PART II - OTHER INFORMATION
There were no proceedings, changes, occurrences or other matters
occurring during the nine month period ended September 30, 1994,
requiring a response to Items 1 through 5 of Regulation S-K.
6. Exhibits and Reports on Form 8-K
(A) Exhibits
Exhibit 27. Financial Data Schedule
(B) Form 8-K filed May 11, 1994
Item 1. Change in Control of Registrant
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.
New Mexico and Arizona Land Company
s/E.M.BEDEWI
E. M. Bedewi,
Sr. Vice President and Treasurer
s/W. M. KELLEY
W. M. Kelley
Vice President and
Corporate Secretary
Date: November 7, 1994
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> SEP-30-1994
<CASH> 2,498
<SECURITIES> 0
<RECEIVABLES> 8,709
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 41,540
<DEPRECIATION> 4,564
<TOTAL-ASSETS> 50,021
<CURRENT-LIABILITIES> 0
<BONDS> 0
<COMMON> 7,812
0
0
<OTHER-SE> 14,984
<TOTAL-LIABILITY-AND-EQUITY> 50,021
<SALES> 7,461
<TOTAL-REVENUES> 10,959
<CGS> 4,144
<TOTAL-COSTS> 6,385
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 815
<INCOME-PRETAX> 2,701
<INCOME-TAX> 1,087
<INCOME-CONTINUING> 1,614
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,614
<EPS-PRIMARY> .65
<EPS-DILUTED> .65
</TABLE>
