SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------------
FORM 10-QSB
[X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the quarterly period ended September 30, 1998
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Exchange
Act
For the transition period from _______ to ________
Commission File Number 0-6877
SANTA FE FINANCIAL CORPORATION
(Exact Name of Registrant as Specified in its Charter)
Nevada 95-2452529
(State or Other Jurisdiction of (IRS Employer
Incorporation or Organization) Identification No.)
Mailing Address: P.O. Box 270828
San Diego, CA 92198-2828
Street Address: 11315 Rancho Bernardo Road, Suite 129
San Diego, CA 92127
(619) 298-7201
(Registrant's Telephone Number, Including Area Code)
Check whether the issuer (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act during the preceding 12
months, and (2) has been subject to such filing requirements for the past 90
days. Yes X No
State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date: 1,258,538 shares of
issuer's $.10 Par Value Common Stock were outstanding as of November 10,
1998.
Transitional Small Business Disclosure Format (check one): Yes No X
<PAGE> 2
INDEX
SANTA FE FINANCIAL CORPORATION
AND SUBSIDIARIES
PART I FINANCIAL INFORMATION PAGE
Item 1. Financial Statements
Consolidated Balance Sheet-September 30, 1998 (Unaudited) 3
Consolidated Statements of Income (Unaudited)--Three Months
ended September 30, 1998 and 1997 and for the Nine Months ended
September 30, 1998 and 1997 4
Consolidated Statement of Cash Flows (Unaudited)--
Nine Months ended September 30, 1998 and 1997 5
Notes to Consolidated Financial Statements--September 30, 1998 6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 10
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 13
Item 5. Other Information 13
Item 6. Exhibits and Reports on Form 8-K 14
SIGNATURES 14
<PAGE> 3
PART I
FINANCIAL INFORMATION
Item 1. Financial Statements
Santa Fe Financial Corporation and Subsidiaries
Consolidated Balance Sheet
(Unaudited)
<TABLE>
<CAPTION>
September 30,
1998
----------------
<S> <C>
Assets
Cash and cash equivalents $ 2,438,037
Restricted cash 60,861
Investment in marketable securities:
Held for sale 4,537,409
Trading 712,836
Investment in Justice Investors 6,728,532
Investment in rental property 1,737,100
Other investments 702,432
Note receivable 101,591
Other assets 960,747
-----------
Total assets $ 17,979,545
===========
Liabilities and Shareholders' Equity
Liabilities
Due securities broker $ -
Mortgage payable 1,232,470
Accounts payable and accrued expenses 366,140
Obligation for securities sold 1,085,982
-----------
Total liabilities 2,684,592
-----------
Minority interest 3,244,382
-----------
Commitments and contingencies
Shareholders' equity:
6% Cumulative, convertible, voting preferred
stock par value $.10 per share
Authorized shares - 1,000,000
Issued and outstanding - 63,600
Liquidation preference of $858,600 6,360
Common stock - par value $.10 per share
Authorized - 2,000,000
Issued - 1,276,038, outstanding - 1,271,538 127,604
Additional paid-in capital 8,807,941
Retained earnings 3,184,298
Unrealized loss on investment securities,
net of deferred tax benefit ( 26,734)
Treasury stock, at cost, 4,500 shares ( 48,898)
-----------
Total shareholders' equity 12,050,571
-----------
Total liabilities & shareholders' equity $17,979,545
===========
</TABLE>
See Notes to Consolidated Financial Statements
<PAGE> 4
Santa Fe Financial Corporation and Subsidiaries
Consolidated Statement of Income
(Unaudited)
<TABLE>
<CAPTION>
Three Months ended Nine Months ended
September 30 September 30
1998 1997 1998 1997
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Revenues:
Equity in net income of Justice
Investors $ 781,297 $ 755,033 $2,235,406 $1,866,018
Dividend and interest income 28,419 193,328 371,640 649,344
Net investment gain (loss) (651,841) ( 357,400) (1,693,896) ( 588,233)
Rental income 144,218 - 459,906 -
Other income 24,722 43,393 87,074 99,745
-------- -------- --------- ---------
326,815 634,354 1,460,130 2,026,874
Costs and expenses:
Litigation-GPG 1,285 42,297 43,065 248,506
General and administrative 130,407 161,706 500,263 475,133
Professional and outside
services 50,854 27,897 170,243 141,766
Property operating expenses 116,482 - 387,650 -
Margin interest and trading
Expenses 30,211 - 261,438 -
Mortgage interest expense 29,478 - 91,729 -
Depreciation 41,275 972 134,305 2,914
-------- -------- --------- ---------
399,992 232,872 1,588,693 868,319
-------- -------- --------- ---------
Income (loss) before income taxes
and minority interest (73,177) 401,482 (128,563) 1,158,555
Income tax benefit (expense) 115,200 (141,000) 51,400 (429,000)
--------- --------- --------- ---------
Income (loss) before minority interest 42,023 260,482 ( 77,163) 729,555
Minority interest (109,908) (134,869) (292,655) (318,769)
--------- --------- --------- ---------
Net income (loss) $( 67,885) $ 125,613 $ (369,818) $ 410,786
========= ========= ========= =========
Basic earnings (loss) per share $ (.05) $ .10 $ (.29) $ .32
========= ========= ========= =========
Weighted average shares
Outstanding 1,274,924 1,276,038 1,275,663 1,276,038
========= ========= ========= =========
Diluted earnings (loss) per share $ (.05) $ .10 $ (.28) $ .32
========= ========= ========= =========
Diluted weighted shares
outstanding 1,338,524 1,276,038 1,339,263 1,276,038
========= ========= ========= =========
Dividends per Share $ - $ - $ - $ -
========= ========= ========= =========
Comprehensive income (loss):
Net income (loss) $ ( 67,885) $ 125,613 $ (369,818) $ 410,786
Unrealized (losses) gains on
securities arising during
period, net of taxes (732,255) 773,436 ( 214,003) 872,988
--------- --------- --------- ---------
Comprehensive income (loss) $ (800,140) $ 899,049 $ (583,821) $1,283,774
========= ========= ========= =========
</TABLE>
See Notes to Consolidated Financial Statements
<PAGE> 5
Santa Fe Financial Corporation & Subsidiaries
Consolidated Statement of Cash Flows
(Unaudited)
<TABLE>
<CAPTION>
Nine Months ended
September 30
1998 1997
----------- -----------
<S> <C> <C>
Operating activities
Net (loss) income $( 369,818) $ 410,786
Adjustments to reconcile net income to
net cash provided by (used in) operating
activities:
Equity in net income of Justice Investors ( 2,235,406) ( 1,866,018)
Minority interest 292,655 318,769
Amortization of excess of market value
over carrying value of investment ( 66,527) ( 66,528)
Depreciation 134,305 2,914
Changes in operating assets and liabilities:
Other assets ( 681,598) 90,474
Accounts payable and accrued expenses ( 81,838) ( 31,419)
Income taxes payable 128,566 ( 171,942)
---------- ---------
Net cash provided by (used in) operating
activities ( 2,879,661) ( 1,312,964)
---------- ---------
Investing activities
Cash distributions from Justice Investors 1,254,960 1,224,601
Changes in restricted cash 68,403 -
Purchase of Portsmouth Square stock ( 225,862) ( 187,938)
Purchase of investment securities (22,227,357) (17,530,351)
Proceeds from sale of investment securities 32,909,429 15,212,627
Purchase of other investments ( 300,000) ( 490,203)
Purchase of property, furniture and fixtures ( 121,337) -
---------- ----------
Net cash provided by (used in) investing
activities 11,358,236 ( 1,771,264)
---------- ----------
Financing activities
Increase (decrease) in due securities broker ( 5,666,507) 4,445,660
Decrease in notes receivable 174,297 12,039
Decrease in mortgage payable ( 14,143) -
Dividends paid to minority shareholders
of Portsmouth Square, Inc. ( 126,714) ( 133,295)
Increase (decrease)in securities sold ( 740,594) 1,425,175
Purchase of treasury stock ( 48,898) -
---------- ----------
Net cash provided by (used in)
financing activities ( 6,422,559) 5,749,579
---------- ----------
Net increase in cash and
cash equivalents 2,056,016 2,665,351
Cash and cash equivalents at beginning of year 382,021 127,351
---------- ----------
Cash and cash equivalents at end of period $ 2,438,037 $ 2,792,702
=========== ==========
</TABLE>
See Notes to Consolidated Financial Statements
<PAGE> 6
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. Basis of Presentation and Significant Accounting Policies
---------------------------------------------------------
The consolidated financial statements included herein have been prepared by
Santa Fe Financial Corporation (the "Company"), without audit, according to
the rules and regulations of the Securities and Exchange Commission. Certain
information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted pursuant to such rules and
regulations, although the Company believes the disclosures that are made are
adequate to make the information presented not misleading. Further, the
consolidated financial statements reflect, in the opinion of management, all
adjustments (which included only normal recurring adjustments) necessary to
state fairly the financial position and results of operations as of and for
the periods indicated.
It is suggested that these financial statements be read in conjunction with
the audited financial statements and the notes therein included in the
Company's Form 10-KSB for the year ended December 31, 1997.
The results of operations for the nine months ended September 30, 1998 are
not necessarily indicative of results to be expected for the full fiscal year
ending December 31, 1998.
On June 15, 1998, the Company issued to its shareholders a two-for-one
forward stock split in the form of a 100% stock dividend. The result of that
stock dividend was to increase the number of outstanding shares of the
Company's $.10 par value common stock from 638,019 to 1,276,038 and the
outstanding number of convertible voting preferred shares from 31,800 to
63,600. These financial statements are presented to reflect that stock
dividend.
2. Investment in Justice Investors
-------------------------------
The Company's principal sources of revenue continue to be derived from the
investment of its 66.9%-owned subsidiary, Portsmouth Square, Inc.
("Portsmouth") in the Justice Investors limited partnership. Portsmouth has
a 49.8% interest in the limited partnership which owns and leases a Holiday
Inn in San Francisco, California. Portsmouth also serves as one of the two
general partners of Justice Investors. Portsmouth records its investment on
the equity basis.
<PAGE> 7
Condensed financial statements for Justice Investors are as follows:
JUSTICE INVESTORS
CONDENSED BALANCE SHEET
September 30, 1998
------------------
Assets
Total current assets $1,403,611
Property, plant and equipment, net of
accumulated depreciation of $10,901,403 5,674,279
Loan fees and deferred lease costs,
net of accumulated amortization of $109,023 201,390
---------
$7,279,280
=========
Liabilities and partners' capital
Total current liabilities $ 100,219
Long-term debt 1,434,054
Partners' capital 5,745,007
Total liabilities and ---------
Partners' capital $7,279,280
=========
JUSTICE INVESTORS
CONDENSED STATEMENTS OF OPERATIONS
Nine Months ended
September 30,
1998 1997
---------- ----------
Revenues $5,231,500 $4,543,178
Costs and expenses 742,733 805,192
--------- ---------
Net income $4,488,767 $3,737,986
========= =========
3. Marketable Securities
---------------------
Marketable securities are stated at market value as determined by the most
recently traded price of each security at the balance sheet date. All
marketable securities are defined as trading or available-for-sale
securities. The Company determines the appropriate classification of
marketable securities at the time of purchase and reevaluates such
designation at each balance sheet date.
Securities classified as available-for-sale are carried at fair market value,
with the unrealized holding gains and losses reported as a separate component
of shareholders' equity. Certain securities are classified as trading
<PAGE> 8
securities when they are transferred to cover corresponding obligations of
the same security sold short. Those securities and the related obligations
are marked to market with unrealized holding gains and losses included in
earnings. The cost of investments sold is determined on the specific
identification or the first-in, first-out method.
4. Rental Property
On December 31, 1997, the Company acquired a 55.4% controlling interest in
InterGroup Woodland Village, Inc. ("Woodland"). Woodland's major asset is a
100-unit apartment complex named Woodland Village Apartments located in
Cincinnati, Ohio. The rental property is accounted for at cost and includes
the following:
September 30, 1998
--------------
Investment in real estate:
Land $ 266,700
Buildings, improvements and equipment 2,882,166
Accumulated depreciation on buildings,
improvements and equipment (1,411,766)
---------
$ 1,737,100
=========
5. Commitments and Contingencies
-----------------------------
During 1997, the Company and the director defendants prevailed in their
defense of a shareholders' derivative suit related to the private placement
of 90,000 shares of common stock and warrants for the purchase of an
additional 90,000 shares to The InterGroup Corporation ("InterGroup"). As
prevailing parties, the Company and the director defendants made application
to the Superior Court for recovery of the attorney's fees and costs expended
in the successful defense of this litigation. On March 23, 1998, the trial
court entered a judgment in favor of the Company and the director defendants
and granted their applications for attorneys' fees and costs in the total
amount of approximately $936,000. On April 17, 1998, the plaintiffs filed an
appeal from that award and filed their opening brief on October 23, 1998. It
may be one to two years before that appeal is ultimately resolved.
5. Related Party Transactions
--------------------------
As of June 30, 1998, InterGroup owned approximately 44% of the Company's
outstanding common stock and 100% of the Company's preferred stock for a
total of 46.6% of all outstanding voting stock. In addition, the Chairman
and Chief Executive Officer of InterGroup, who is also the Company's Chairman
and Chief Executive Officer, owned 3.9% of the Company's outstanding common
stock as of June 30, 1998. Effective June 30, 1998, the Company's Chairman
and Chief Executive Officer entered into a voting trust agreement with
InterGroup, giving InterGroup the power to vote the shares that he owns in
the Company. As a result of that agreement, InterGroup now has the power to
vote in excess of 50% of the voting shares of the Company.
<PAGE> 9
Certain costs and expenses, primarily salaries, rent and insurance, are
allocated between the Company and its subsidiary, Portsmouth based on
management's estimate of the utilization of resources. Effective June 30,
1998, certain accounting and administrative functions of the Company and its
subsidiaries, were transferred to the Los Angeles, California offices of
InterGroup. During the nine months ended September 30, 1998, the Company and
Portsmouth made payments to InterGroup in the amount of $69,505 for
administrative costs and reimbursement of direct and indirect costs
associated with the management of the Companies and their investments,
including the partnership asset. Effective October 31, 1998, the Company and
Portsmouth also terminated their office lease. The Company continues to
maintain a corporate presence in San Diego, California, but on a reduced
basis.
During 1997, the Company purchased a controlling 55.4% interest in Woodland
from InterGroup (See Note 4). In exchange for that interest in Woodland, the
Company issued to InterGroup 31,800 shares (63,600 shares post stock split)of
6% cumulative, convertible, voting preferred stock. InterGroup has notified
the Company that it has elected to forego any dividend payments on the
preferred stock for the first nine months of 1998.
The Company's President and Chief Executive Officer, John V. Winfield,
directs the investment activity of the Company in public and private markets
pursuant to authority granted by the Board of Directors. Mr. Winfield also
serves as Chief Executive Officer of Portsmouth and InterGroup and directs
the investment activity of those companies. Effective April 1, 1998, an
employee of InterGroup was assigned to manage the portfolios of the Company
and Portsmouth in consultation with Mr. Winfield. The Company and Portsmouth
reimburse InterGroup for an allocated portion of the compensation and
benefits of such employee. Depending on certain market conditions and
various risk factors, the Chief Executive Officer, his family, Portsmouth and
InterGroup may, at times, invest in the same companies in which the Company
invests. The Company encourages such investments because it places personal
resources of the Chief Executive Officer and his family members, and the
resources of Portsmouth and InterGroup, at risk in connection with investment
decisions made on behalf of the Company. All of the Company's Directors
serve as directors of InterGroup and all three of the Company's Directors
serve on the Board of Portsmouth.
<PAGE> 10
Item 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
FORWARD-LOOKING STATEMENTS AND PROJECTIONS
The Company may from time to time make forward-looking statements and
projections concerning future expectations. When used in this discussion,
the words "estimate," "project," "anticipate" and similar expressions, are
intended to identify forward-looking statements. Such statements are subject
to certain risks and uncertainties, including partnership distributions,
general economic conditions of the hotel industry in the San Francisco area,
securities markets, litigation and other factors, including natural disasters
and those discussed below and in the Company's Form 10-KSB for the year ended
December 31, 1997, that could cause actual results to differ materially from
those projected. Readers are cautioned not to place undue reliance on these
forward-looking statements, which speak only as to the date hereof. The
Company undertakes no obligation to publicly release the results of any
revisions to those forward-looking statements which may be made to reflect
events or circumstances after the date hereof or to reflect the occurrence of
unanticipated events.
RESULTS OF OPERATIONS
The Company's principal sources of revenue are derived from the investment of
its 66.9%-owned subsidiary, Portsmouth, in the Justice Investors limited
partnership, income received from investment of its cash and securities
assets and from rental income derived from its multifamily real property
investment. The partnership derives most of its income from a lease with
Holiday Inns, Inc., which was assumed by Bristol Hotel Company ("Bristol").
Effective July 31, 1998, Bristol merged into Felcor Suite Hotels, Inc.
("Felcor") with Bristol Hotel Management Company continuing as the manager of
the hotel.
Three Months Ended September 30, 1998 Compared to Three Months
Ended September 30, 1997
Comparison of operating results for the three months ended September 30, 1998
to the three months ended September 30, 1997, shows a net loss of $67,885 as
compared to net income of $125,613. That result is primarily attributable to
net investment losses of $651,841 which were incurred during the third
quarter of 1998. The net investment loss reflects a write-down on one of the
Company's investments and management's continuing efforts to reposition the
Company's investment portfolio by selling certain of its underperforming
securities. The Company was successful in eliminating its margin positions
by the end of the quarter and management believes that this more conservative
approach should reduce the Company's overall investment risk in what has
become a very challenging and difficult global economic environment.
Realized investment gains and losses may fluctuate significantly from period
to period in the future and could have a meaningful effect on the Company's
net earnings. However, the amount of realized investment gain or loss for
any given period may have no predictive value, and variations in amount from
period to period may have no practical analytical value.
<PAGE> 11
The Company did show a 3.5% increase in partnership income from $755,033 to
$781,297. The increase in partnership income is primarily attributable to a
7.4% increase in garage rental income, while hotel rental income remained
relatively flat when compared to the very favorable third quarter of 1997.
The increase in costs and expenses from $232,872 to $399,992 is primarily
attributable to operating expenses, mortgage interest and depreciation
associated with the Company's multifamily real property in the amount of
$187,235 which were not incurred by the Company during the first quarter of
1997. The increase in professional, and outside service fees from $27,897 to
$50,854 reflects the accrual of annual audit and other professional fees for
the current fiscal year. The decrease in general and administrative expenses
from $161,706 to $130,407 reflects cost savings resulting from the
consolidation of certain accounting and administrative functions of the
Company and its subsidiary, Portsmouth, with the Los Angeles, California
offices of InterGroup beginning July 1, 1998. Effective October 31, 1998,
the Company and Santa Fe also terminated their office lease and moved to a
much smaller space, which should result in additional cost savings.
The decrease in litigation costs reflects reduced activity in the GPG
litigation during the third quarter of 1998 as that case is waiting to be
briefed on appeal.
On August 14, 1998 the Company authorized a limited buy-back program of its
Common Stock. The Company may from time to time, in the discretion of
management, buy back up to a total of 50,000 shares of its Common Stock,
depending on market conditions and other factors consistent with corporate
policy and as limited by state and federal law. As of September 30, 1998,
the Company had repurchased 4,500 of its shares in open market transactions.
Nine Months Ended September 30, 1998 Compared to Nine Months
Ended September 30, 1997
Comparison of operating results for the nine months ended September 30, 1998
to the nine months ended September 30, 1997, shows a net loss of $369,818 as
compared to net income of $410,786. That result is primarily attributable to
a net investment loss of $1,693,896 incurred during the first nine months of
1998. The net investment loss reflects a write-down on one of the Company's
investments and management's continuing efforts to reposition the Company's
investment portfolio by selling certain of its underperforming securities.
The Company was successful in eliminating its margin positions by the end of
the quarter and management believes that this more conservative approach
should reduce the Company's overall investment risk in what has become a very
challenging and difficult global economic environment.
Realized investment gains and losses may fluctuate significantly from period
to period in the future and could have a meaningful effect on the Company's
net earnings. However, the amount of realized investment gain or loss for
any given period may have no predictive value, and variations in amount from
period to period may have no practical analytical value.
The Company did show a 19.8% increase in partnership income from $1,866,018
to $2,235,406. The increase in partnership income is primarily attributable
to a 16.4% increase in hotel rental income as a result of an increase in the
average daily room rate without a significant reduction in occupancy rates
and a 9% increase in garage rental income.
<PAGE> 12
The increase in costs and expenses from $868,319 to $1,558,693 is primarily
attributable to operating expenses, mortgage interest and depreciation
associated with the Company's multifamily real property in the amount of
$610,950 and margin interest and trading expenses in the amount of $261,438
which were not incurred by the Company during the first quarter of 1997. The
increase in professional, and outside service fees from $141,766 to $170,243
reflects the accrual of annual audit and other professional fees for the
current fiscal year. The modest increase in general and administrative
expenses from $313,427 to $369,856 primarily reflects severance pay to
certain staff employees in the second quarter of 1998. Effective October 31,
1998, the Company and Santa Fe also terminated their office lease and moved
to a much smaller space, which should result in additional cost savings.
The decrease in litigation costs reflects reduced activity in the GPG
litigation during the second and third quarters of 1998 as that case is
waiting to be briefed on appeal.
FINANCIAL CONDITION AND LIQUIDITY
The Company's cash flows are primarily generated by its subsidiary's
investment in the Justice Investors limited partnership, which derives the
majority of its income from its lease with Felcor and a lease with Evon
Garage Corporation. The Company also derives revenue from the investment of
its cash and securities assets and from its investment in multifamily real
property.
As a result of increases in the amount of rental income from the hotel lease,
the general partners of Justice Investors decided that there would be a
special one-third increase in the monthly distribution to limited partners
effective with the February 1997 distribution. As a result, Portsmouth's
monthly distribution increased to $139,440 from $109,580. In February 1998,
the general partners decided to continue monthly distributions at the higher
monthly rate for another year. The increases in monthly distributions were
clearly identified as special distributions and, at any time, unforeseen
circumstances could dictate a change in the amount distributed. The general
partners will continue to conduct an annual review and analysis to determine
an appropriate monthly distribution for the ensuing year. At that time, the
monthly distribution could be increased or decreased, especially if the
partnership was to participate financially in the future upgrading of the
public areas of the hotel.
As of September 30, 1998, the Company was successful in eliminating its
margin positions in its securities portfolio. As a result the Company's
current liabilities were reduced to $1,452,122 as of September 30, 1998 with
current assets of $9,412,322. The Company remains liquid with a current
ratio of approximately 6.5 to 1 at the end of the third quarter of 1998.
Management believes that its capital resources are currently adequate to meet
its short- and long-term obligations.
<PAGE> 13
YEAR 2000 ISSUES
The Company has been aware of the potential implications that the "Year 2000"
issue could have on its business and, as a result, has started the process of
determining what, if any, steps the Company must take to cure any computer
software or hardware problems associated with the year 2000. Based on
preliminary discussions with the Company's outside service providers and the
software and hardware vendors, the Company has determined that it should not
incur any material liability to upgrade computer software and hardware to
accommodate the year 2000. The Company expects to be fully year 2000
compliant by June of 1999.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
As previously reported, Guinness Peat Group plc and its subsidiary, Allied
Mutual Insurance Services Limited ("plaintiffs") had filed a shareholders
derivative suit against certain directors of the Company, InterGroup and the
Company as a nominal defendant in the Superior Court of the State of
California, County of San Diego, Case No. 685760. On March 23, 1998, the
trial court entered a judgment in favor of the Company and the director
defendants and granted their applications for attorneys' fees and costs in
the total amount of $936,026. On April 17, 1998, the plaintiffs filed an
appeal of that award, with their opening brief having been filed on October
23, 1998. The parties have participated in a Court of Appeal settlement
program, but no progress has been made to date respecting settlement. If the
case does not settle, a final determination on appeal may not be obtained
until one to two years.
Item 5. Other Information
On August 14, 1998 the Company authorized a limited buy-back program of its
Common Stock. The Company may from time to time, in the discretion of
management, buy back up to a total of 50,000 shares of its Common Stock,
depending on market conditions and other factors consistent with corporate
policy and as limited by state and federal law. As of September 30, 1998 the
Company had repurchased 4,500 shares of its common stock in open market
transactions.
<PAGE> 14
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibit 27 - the Financial Data Schedule is filed
as an exhibit to this report.
(b) Registrant did not file any reports on Form 8-K during the
period covered by this report.
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.
SANTA FE FINANCIAL CORPORATION
(Registrant)
Date: November 13, 1998
by /s/ John V. Winfield
- -------------------------------------
John V. Winfield, President,
Chairman of the Board and
Chief Executive Officer
Date: November 13, 1998
by /s/ L. Scott Shields
- -------------------------------------
L. Scott Shields, Treasurer
and Chief Financial Officer
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED
FROM THE BALANCE SHEET AND INCOME STATEMENT OF SANTA FE FINANCIAL
CORPORATION AND SUBSIDIARIES SET FORTH IN ITS FORM 10-QSB REPORT
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1998 AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH 10-QSB REPORT.
<CIK> 0000086759
<NAME> SANTA FE FINANCIAL CORPORATION
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> SEP-30-1998
<CASH> 2498898
<SECURITIES> 5250245
<RECEIVABLES> 101591
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 9412322
<PP&E> 3148866
<DEPRECIATION> 1411766
<TOTAL-ASSETS> 17979545
<CURRENT-LIABILITIES> 1452122
<BONDS> 0
0
6360
<COMMON> 127604
<OTHER-SE> 11916607
<TOTAL-LIABILITY-AND-EQUITY> 17979545
<SALES> 2235406
<TOTAL-REVENUES> 1133315
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