<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-Q
[X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the quarterly period ended September 30, 1996.
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the transition period from N/A to N/A.
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.)
3033 N. 44TH STREET, SUITE 270, PHOENIX, ARIZONA 85018-7228
(Address of principal executive offices) (Zip Code)
602/952-8836
(Registrant's telephone number, including area code)
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 12 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 3,007,636
Class Outstanding at October 31, 1996
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NEW MEXICO AND ARIZONA LAND COMPANY AND SUBSIDIARIES FORM 10-Q
For the Quarter Ended September 30, 1996
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Page
Number
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PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Statements of Income for the three and nine months
ended September 30, 1996 and 1995 3
Consolidated Balance Sheets as of September 30, 1996 and December
31, 1995 4
Consolidated Statements of Cash Flows for the nine months ended
September 30, 1996 and 1995 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
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New Mexico and Arizona Land Company and Subsidiaries FORM 10-Q
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CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
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Three months ended Nine months ended
September 30, September 30,
(in thousands, except per share data) 1996 1995 1996 1995
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<S> <C> <C> <C> <C>
Revenue:
Property sales $3,438 $6,528 $ 8,889 $12,885
Property rentals 763 752 2,262 2,245
Investment income 316 331 964 1,313
Other 173 54 304 1,324
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4,690 7,665 12,419 17,767
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Expenses:
Cost of property sales 2,264 3,812 5,458 7,713
Rental property 252 291 771 814
General and administrative 318 383 964 1,045
Interest 226 222 693 695
Depreciation, depletion and amortization 106 123 340 365
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3,166 4,831 8,226 10,632
Income Before Joint Ventures, Minority
Interests and Income Taxes 1,524 2,834 4,193 7,135
Gain (loss) from joint ventures -- (8) 8 1,586
Minority interests (255) (497) (617) (1,003)
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Income Before Income Taxes 1,269 2,329 3,584 7,718
Income taxes 507 925 1,434 3,065
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NET INCOME $ 762 $ 1,404 $ 2,150 $ 4,653
===================================================================================================
EARNINGS PER SHARE OF COMMON STOCK(1) $ 0.25 $ 0.47 $ 0.71 $ 1.55
===================================================================================================
Weighted Average Number of Common Shares(1) 3,008 2,996 3,008 2,996
===================================================================================================
</TABLE>
See accompanying Notes to Consolidated Financial Statements.
(1) 1995 restated to reflect a 10% stock dividend paid July 18, 1996.
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New Mexico and Arizona Land Company and Subsidiaries FORM 10-Q
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CONSOLIDATED BALANCE SHEETS
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UNAUDITED
SEPTEMBER 30, December 31,
(in thousands) 1996 1995
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Assets
Properties, net $47,736 $41,327
Receivables, net 10,089 9,690
Cash and cash equivalents 5,091 5,301
Other 1,751 1,364
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Total assets $64,667 $57,682
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Liabilities and Shareholders' Equity
Notes payable and lines of credit $18,461 $14,080
Accounts payable and accrued liabilities 1,547 999
Deferred revenue 5,234 5,330
Deferred income taxes 4,303 4,188
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Total liabilities 29,545 24,597
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Minority interests 2,255 2,364
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Shareholders' equity:
Preferred stock, no par value; 10,000,000
shares authorized; none issued
Common stock, no par value; 30,000,000
shares authorized; 3,007,636 shares issued;
3,007,636 and 3,002,728 outstanding, respectively(1) 13,673 10,051
Additional paid-in capital 967 966
Retained earnings 18,227 19,736
Treasury stock, at cost, 4,908 shares at 12/31/95 -- (32)
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Total shareholders' equity 32,867 30,721
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Total liabilities and shareholders' equity $64,667 $57,682
===============================================================================================
</TABLE>
See accompanying Notes to Consolidated Financial Statements.
(1) 1995 shares restated to reflect a 10% stock dividend paid July 18, 1996.
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New Mexico and Arizona Land Company and Subsidiaries FORM 10-Q
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CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
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Nine months ended September 30,
(in thousands) 1996 1995
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CASH FLOW FROM OPERATING ACTIVITIES:
Net income $ 2,150 $4,653
Non-cash items included above:
Depreciation, depletion and amortization 340 365
Deferred revenue (467) (752)
Deferred income taxes 115 417
Gain from joint ventures (8) (1,586)
Minority interests 617 1,003
Employee restricted stock plan 1 11
Net change in:
Receivables (89) 1,396
Land held for sale (1,557) (119)
Other assets (382) 95
Accounts payable and accrued liabilities 543 (941)
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Net cash flow from operating activities 1,263 4,542
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CASH FLOW FROM INVESTING ACTIVITIES:
Additions to properties (5,192) (3,333)
Proceeds from sale of properties -- 4,566
Proceeds from notes receivable 1,169 682
Addition to notes receivable (1,108) (437)
Distribution to minority interest partners (766) (862)
Distributions from joint ventures 3 1,632
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Net cash flow from investing activities (5,894) 2,248
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CASH FLOW FROM FINANCING ACTIVITIES:
Proceeds from debt 6,132 3,027
Payment of debt (1,751) (3,886)
Capital contribution minority interest partner 40 489
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Net cash flow from financing activities 4,421 (370)
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Net increase (decrease) in cash and cash equivalents (210) 6,420
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Cash and cash equivalents at beginning of period 5,301 5,111
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Cash and cash equivalents at end of period $5,091 $11,531
==============================================================================================
</TABLE>
See accompanying Notes to Consolidated Financial Statements.
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New Mexico and Arizona Land Company and Subsidiaries FORM 10-Q
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
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1. In the opinion of the Company, the accompanying unaudited consolidated
financial statements contain all adjustments 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 consolidated
financial statements appearing in the Company's 1995 annual report on Form
10-K
2. The results of operations for the nine months ended September 30, 1996 and
1995, are not necessarily comparable and may not be indicative of the
results which may be expected for future quarters or future years.
3. During the nine months ended September 30, 1996 and 1995, the Company sold
land in exchange for notes receivable in the amount of $1,674,000 and
$1,357,000, respectively, of which $566,000 and $920,000, respectively, 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 five joint ventures in which the Company holds a
majority ownership.
5. Certain amounts have been reclassified for comparative purposes.
6. Earnings per share computations are based on the weighted average number of
shares outstanding of 3,007,656 and 2,995,728 in 1996 and 1995
respectively, which have been restated to reflect a 10% stock dividend paid
July 18, 1996.
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New Mexico and Arizona Land Company and Subsidiaries FORM 10-Q
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
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LIQUIDITY AND CAPITAL RESOURCES
Cash flow from sales of land and recreational lots, distributions from its joint
ventures and other ongoing operations, along with unused borrowing capacity,
should be adequate for continuing operations and considerable future
investments.
Financing, at the joint venture level, is being utilized to develop
single-family lots. These loans are secured by the property involved, along with
guarantees from the Company and its partner. At September 30, 1996, there was
$2,359,000 borrowed against a $3,850,000 development line of credit. The Company
has a $1,000,000 line of credit, which matures November 8, 1996, and is secured
by certain real estate holdings. At September 30, 1996, there were no funds
borrowed on this line.
RESULTS OF OPERATIONS
For the nine months ended September 30, 1996, net income was $2,150,000
($0.71 per share) compared to $4,653,000 ($1.55 per share, restated for the
1996 stock dividend) for the same period of 1995. In 1995 the Company recorded
two one-time payments that affected income by the following amounts: $1,600,000
from the sale of a joint venture property located in Tempe, Arizona and
$1,084,000 from the sale of a mortgage note secured by a Tucson hotel. Revenue
from investment income is less in 1996 due to the sale of this mortgage note.
Earnings from sales of single-family lots in 1996 were down by approximately
$1,700,000 from the same period in 1995. This downward trend was expected as the
absorption rate of single family lots is now more in line with supply. 1996
earnings include an increase of over $400,000 in the sale of 40-acre parcels
from our recreational lots sales program in southern Arizona, while 1995
earnings included income from the sale of two commercial parcels in Albuquerque.
SUBSEQUENT EVENTS
In October 1996, the Company sold a commercial corner located in Albuquerque,
which generated income (after taxes) of approximately $0.74 per share. Cash
from the sale of this property along with cash on hand is being utilized to
purchase additional properties. The Company recently purchased a 635 acre
parcel, zoned for residential development, located near the Town of Cottonwood,
in Yavapai County, Arizona.
In addition, the purchase of approximately 10,000 acres, which contains a major
uranium deposit, is expected to close escrow in November 1996. This property is
located in the Tallahassee Creek area of Colorado and was formerly known as the
Hansen Ore Body. Previous studies by independent consulting geologists have
indicated that the Hansen deposit contains up to 25 million pounds of uranium
oxide equivalent.
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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, 1996, requiring a response to
Items 1 through 6.
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/ William A. Pope
---------------------------------
William A. Pope,
President and Chief Executive Officer
Date: November 8, 1996
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<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> SEP-30-1996
<CASH> 5,091
<SECURITIES> 0
<RECEIVABLES> 10,089
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 52,921
<DEPRECIATION> 5,185
<TOTAL-ASSETS> 64,667
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 13,673
<OTHER-SE> 19,194
<TOTAL-LIABILITY-AND-EQUITY> 64,667
<SALES> 8,889
<TOTAL-REVENUES> 12,419
<CGS> 5,458
<TOTAL-COSTS> 6,229
<OTHER-EXPENSES> 1,304
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 693
<INCOME-PRETAX> 3,584
<INCOME-TAX> 1,434
<INCOME-CONTINUING> 2,150
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,150
<EPS-PRIMARY> 0.71
<EPS-DILUTED> 0.71
</TABLE>
