<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 March 31, 1997.
[ ] 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 3,012,886
Class Outstanding at April 30, 1997
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NEW MEXICO AND ARIZONA LAND COMPANY AND SUBSIDIARIES FORM 10-Q
For the Quarter Ended March 31, 1997
Page
Number
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PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Statements of Income for the
three months ended March 31, 1997 and 1996 3
Consolidated Balance Sheets as of
March 31, 1997 and December 31, 1996 4
Consolidated Statements of Cash Flows for the
three months ended March 31,1997 and 1996 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
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
Three months ended March 31,
(in thousands, except per share data) 1997 1996
- --------------------------------------------------------------------------------
<S> <C> <C>
Revenue:
Property sales $ 1,973 $ 3,446
Property rentals 778 749
Investment income 293 341
Other 80 72
- --------------------------------------------------------------------------------
3,124 4,608
- --------------------------------------------------------------------------------
Expenses:
Cost of property sales 1,110 2,029
Rental property 304 249
General and administrative 400 322
Interest 254 255
Depreciation, depletion and amortization 119 118
- --------------------------------------------------------------------------------
2,187 2,973
Income Before Joint Ventures, Minority
Interests and Income Taxes 937 1,635
Gain from joint ventures 16 7
Minority interests (143) (246)
- --------------------------------------------------------------------------------
Income Before Income Taxes 810 1,396
Income taxes 326 559
- --------------------------------------------------------------------------------
Net Income $ 484 $ 837
================================================================================
Earnings per Share of Common Stock $ 0.16 $ 0.28
================================================================================
Weighted Average Number of Common Shares 3,013 3,008
================================================================================
</TABLE>
See accompanying Notes to Consolidated Financial Statements.
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NEW MEXICO AND ARIZONA LAND COMPANY AND SUBSIDIARIES FORM 10-Q
<TABLE>
<CAPTION>
CONSOLIDATED BALANCE SHEETS
UNAUDITED
MARCH 31, December 31,
(in thousands) 1997 1996
- --------------------------------------------------------------------------------
<S> <C> <C>
Assets
Properties, net $48,020 $47,478
Receivables, net 9,661 9,848
Cash and cash equivalents 6,762 7,142
Other 1,892 1,860
- --------------------------------------------------------------------------------
Total assets $66,335 $66,328
================================================================================
Liabilities and Shareholders' Equity
Notes payable and lines of credit $15,414 $16,036
Accounts payable and accrued liabilities 1,933 1,542
Deferred revenue 4,751 5,002
Deferred income taxes 5,547 5,685
- --------------------------------------------------------------------------------
Total liabilities 27,645 28,265
- --------------------------------------------------------------------------------
Minority interests 2,578 2,435
- --------------------------------------------------------------------------------
Shareholders' equity:
Preferred stock, no par value; 10,000,000
Shares authorized; none issued
Common stock, no par value; 30,000,000
shares authorized; 3,012,886 and
3,007,636 shares issued and outstanding
at March 31, 1997 and 1996, respectively 13,738 13,738
Additional paid-in capital 967 967
Retained earnings 21,407 20,923
- --------------------------------------------------------------------------------
Total shareholders' equity 36,112 35,628
- --------------------------------------------------------------------------------
Total liabilities and shareholders' equity $66,335 $66,328
================================================================================
</TABLE>
See accompanying Notes to Consolidated Financial Statements.
4
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NEW MEXICO AND ARIZONA LAND COMPANY AND SUBSIDIARIES FORM 10-Q
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF CASH FLOWS
Three Months Ended March 31,
(in thousands) 1997 1996
- --------------------------------------------------------------------------------
<S> <C> <C>
CASH FLOW FROM OPERATING ACTIVITIES:
Net income $ 484 $ 837
Deduct: Gain from sale of investment properties (345) (651)
Non-cash items included above:
Depreciation, depletion and amortization 119 118
Deferred revenue (375) (157)
Deferred income taxes (138) 127
Gain from joint ventures (16) (7)
Minority interests 143 246
Net change in:
Receivables (96) (32)
Properties under development (222) (504)
Other assets (16) 53
Accounts payable and accrued liabilities 391 357
- --------------------------------------------------------------------------------
Net cash flow from operating activities (71) 387
- --------------------------------------------------------------------------------
CASH FLOW FROM INVESTING ACTIVITIES:
Additions to properties (437) (224)
Proceeds from sale of properties 343 651
Proceeds from notes receivable 407 231
Addition to notes receivable -- (448)
Distribution to minority interests partners -- (496)
- --------------------------------------------------------------------------------
Net cash flow from investing activities 313 (286)
- --------------------------------------------------------------------------------
CASH FLOW FROM FINANCING ACTIVITIES:
Proceeds from debt 181 1,637
Payment of debt (803) (481)
- --------------------------------------------------------------------------------
Net cash flow from financing activities (622) 1,156
- --------------------------------------------------------------------------------
Net increase (decrease)-cash & cash equivalents (380) 1,257
- --------------------------------------------------------------------------------
Cash & cash equivalents at beginning of period 7,142 5,301
- --------------------------------------------------------------------------------
Cash and cash equivalents at end of period $ 6,762 $ 6,558
================================================================================
</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
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
1996 annual report on Form 10-K
2. The results of operations for the three months ended March 31, 1997 and
1996, 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 three months ended March 31, 1997 and 1996, the Company sold
land in exchange for notes receivable in the amount of $124,000 and
$646,000, respectively, of which $124,000 and $198,000, respectively,
was deferred.
4. The Company's consolidated financial statements include those of its
wholly-owned subsidiaries, NZ Properties, Inc., NZ Development
Corporation, NZU Inc. and Great Vacations International 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 3,012,886 and 3,007,636 in 1997 and 1996
respectively.
6
<PAGE> 7
NEW MEXICO AND ARIZONA LAND COMPANY AND SUBSIDIARIES FORM 10-Q
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES
Cash flow from sales of land, single-family and recreational lots, distributions
from its joint ventures and other ongoing operations, along with unused
borrowing capacity, should be adequate for continuing operations and investments
during the 1997 fiscal year. When construction and marketing begins on the
Sedona and/or Elm Fork projects, financing from outside sources will be required
to fund these projects. (See Developments in Item 7 of the Company's 1996 Annual
Report on Form 10-K.)
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 March 31, 1997, there was
$1,695,000 borrowed against a $3,850,500 development line of credit. The Company
has a $1,000,000 working capital line of credit, which matures April 24, 1998
and is secured by certain real estate holdings. There are no funds borrowed on
this line.
RESULTS OF OPERATIONS
For the three months ended March 31, 1997, net income was $484,000 ($0.16 per
share) compared to $837,000 ($0.28 per share) for the same period of 1996.
Earnings from sales of single-family and recreational lots were down by
approximately $550,000 for the three month period ended March 31, 1997 as
compared to the same period of 1996. Investment income is also less in 1997 as
compared to the same time frame in 1996 due to the amount of cash available for
short term investment. General and administrative expenses are slightly higher
primarily due to increased personnel costs.
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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 three month period ended March 31, 1997, requiring a response to
Items 1 through 5.
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits
Exhibit 27, Financial Data Schedule
(b) No reports of Form 8-K were filed during the reporting quarter.
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: May 14, 1997
8
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> MAR-31-1997
<CASH> 6,308
<SECURITIES> 0
<RECEIVABLES> 9,661
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 48,006
<DEPRECIATION> 5,410
<TOTAL-ASSETS> 66,335
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 13,738
<OTHER-SE> 22,374
<TOTAL-LIABILITY-AND-EQUITY> 66,335
<SALES> 1,973
<TOTAL-REVENUES> 3,124
<CGS> 1,110
<TOTAL-COSTS> 1,414
<OTHER-EXPENSES> 519
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 254
<INCOME-PRETAX> 810
<INCOME-TAX> 326
<INCOME-CONTINUING> 484
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 484
<EPS-PRIMARY> .16
<EPS-DILUTED> .16
</TABLE>
