Form 10-QSB
U.S. Securities and Exchange Commission
Washington, D.C. 20549
(Mark One)
[XX]QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended September 30, 2001
[ ]TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
EXCHANGE ACT
For the transition period from to
Commission File Number: 0-7775
WESTLAND DEVELOPMENT CO., INC.
------------------------------
(Exact name of small business issuer as
specified in its charter)
NEW MEXICO 85-0165021
- ------------------------------- -------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
401 Coors Blvd., N.W.,
Albuquerque, New Mexico 87121
- -------------------------------------------------------------------------------
(Address of principal executive offices)
(505)831-9600
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(Issuer's telephone number)
N/A
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(Former name, former address and former fiscal year, if changed since last
report)
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act during the past 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 [ ]
State the number of shares outstanding of each of the issuer's classes of
common equity as of November 13, 2001:
No Par Value Common: 714,841
Class B $1.00 Par Value Common: 86,100
Transitional Small Business Format (check one) Yes [ ] No [ X ]
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
WESTLAND DEVELOPMENT CO., INC.
BALANCE SHEET
(unaudited)
September 30, 2001
ASSETS
Cash and cash equivalents ........................ $ 850,391
Short-term investments ........................... 300,512
Receivables:
Real estate contracts ......................... $ 473,820
Note receivable - related party ............... 98,819
Other receivables ............................. 66,713 639,352
------------
Land and improvements held for
future development ............................ 8,389,395
Income producing properties, net ................. 11,769,366
Property and equipment, net of accumulated
depreciation of $594,243 ...................... 327,569
Investment in Partnerships and joint ventures .... 226,659
Income taxes receivable .......................... 14,257
Other ............................................ 300,532
------------
$ 22,818,033
============
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable, accrued expenses
and other liabilities ......................... $ 492,480
Deferred income taxes ............................ 5,416,423
Notes, bonds, mortgages and assessments payable .. 10,070,322
------------
Total liabilities ............... 15,979,225
Stockholders' equity
Common stock - no par value;
authorized, 736,668 shares;
issued and outstanding,
714,841 shares ............................. 8,500
Class B common stock - $1.00 par
value; authorized, 491,112
shares; issued and outstanding,
86,100 shares .............................. 86,100
Additional paid-in capital .................... 591,811
Retained earnings ............................. 6,152,397 6,838,808
------------ ------------
$ 22,818,033
============
WESTLAND DEVELOPMENT CO., INC.
STATEMENTS OF OPERATIONS
(unaudited)
For the 3 months ended
September 30,
2001 2000
----------- -----------
Revenues
Land ...................................... $ 932,390 $ 331,537
Rentals ................................... 299,725 219,184
----------- -----------
1,232,115 550,721
Costs and expenses
Cost of land revenues ..................... 488,327 185,433
Cost of rentals ........................... 67,504 60,615
General and administrative ................ 416,384 664,196
----------- -----------
972,215 910,244
----------- -----------
(Loss) income from operations .......... 259,900 (359,523)
Other (income) expense
Interest income ........................... (21,744) (56,988)
Other income .............................. (8,957) (5,921)
Interest expense .......................... 191,909 146,287
----------- -----------
161,208 83,378
----------- -----------
(Loss) earnings before income taxes .... 98,692 (442,901)
Income tax (benefit) expense ................. 39,500 (177,000)
----------- -----------
NET (LOSS) EARNINGS .................... $ 59,192 $ (265,901)
=========== ===========
Weighted average common shares
outstanding ............................... 800,941 801,380
=========== ===========
(Loss) earnings per common share ............. $ .07 $ (.33)
=========== ===========
WESTLAND DEVELOPMENT CO., INC.
STATEMENTS OF CASH FLOWS
(unaudited)
For the three months ended
September 30,
2001 2000
------------ -------------
Cash flows from operating activities
Cash received from land sales
and collections on real
estate contracts receivable ................. $ 1,054,139 $ 329,807
Development and closing costs paid
on land sales ............................... (686,579) (154,948)
Cash received from rental operations .......... 312,084 217,987
Cash paid for rental operations ............... (5,307) (10,690)
Cash received for property taxes .............. 15,130 18,930
Interest received ............................. 9,554 56,419
Interest paid ................................. (245,478) (137,105)
Income taxes paid ............................. (9,200) (50,000)
General and administrative costs paid ......... (442,531) (652,457)
Other ......................................... -- 5,921
------------ ------------
Net cash provided (used) by
operating activities ........................ 1,812 (376,136)
------------ ------------
Cash flows from investing activities
Capital expenditures for income
producing and other properties .............. -- (3,952,194)
Investment in partnerships and joint ventures . 10,750 179
Change in short-term investments .............. 1,196,763 (1,476,667)
Proceeds from note receivable-related party ... 888 816
------------ ------------
Net cash provided (used) in
investing activities ........................ 1,208,401 (5,427,866)
------------ ------------
Cash flows from financing activities
Borrowing on notes, mortgages and
assessments payable ......................... 339,871 3,429,135
Repayments of bonds, mortgages,
notes and assessments payable ............... (1,463,694) (70,252)
Payment of dividends .......................... -- (1,003,623)
Purchase of common stock ...................... -- (5,850)
------------ ------------
Net cash (used) provided by
financing activities ....................... (1,123,823) 2,349,410
------------ ------------
NET INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS ......................... 86,390 (3,454,592)
Cash and cash equivalents at
beginning of period .......................... 764,001 3,882,560
------------ ------------
Cash and cash equivalents at
end of period ................................ $ 850,391 $ 427,968
============ ============
Reconciliation of net earnings (loss)
to net cash provided (used) in
operating activities
Net (loss) earnings ............................ $ 59,192 $ (265,901)
Adjustments to reconcile net (loss)
earnings to net cash used
provided by operating activities
Depreciation .............................. 84,842 66,416
Change in
Rents receivable, accrued interest,
property tax and other assets ........... 85,686 (9,647)
Real estate contracts ..................... 1,294 1,790
Land and improvements held for
future development and income
producing properties .................... (197,924) 25,557
Other assets .............................. (48,016) (5,824)
Accounts and retainages payable,
accrued interest and other
liabilities ............................. (13,562) 38,473
Income taxes payable ...................... 30,300 (227,000)
------------ ------------
Net cash (used in) provided by
operating activities ......................... $ 1,812 $ (376,136)
============ ============
WESTLAND DEVELOPMENT CO., INC.
NOTES TO THE FINANCIAL STATEMENTS
(unaudited)
September 30, 2001
1. The balance sheet at September 30, 2001, statements of cash flows and
statements of operations for the three months ended September 30, 2001 and
September 30, 2000 have been prepared by the Company without audit. In the
opinion of management, all adjustments, including normal recurring adjustments
necessary to present fairly the financial position, results of operations and
cash flows, have been made. Certain information and footnote disclosures
normally included in financial statements prepared in accordance with generally
accepted accounting principles have been condensed or omitted. It is suggested
that these financial statements be read in conjunction with the Company's
audited financial statements at June 30, 2001. The results of operations for the
three months ended September 30, 2001 are not necessarily indicative of
operating results for the full year.
2. The computation of earnings (loss) per common share has been based upon
the weighted average number of shares of outstanding common stock and common
stock issuable without further consideration, which for the three month periods
ended September 30, 2001 and September 30, 2000 were 800,941 and 801,380,
respectively.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
During the three months ended September 30, 2001, the Company's cash and
cash equivalents increased by $86,390. During this period, operations provided
$1,812 and investing activities provided $1,208,401, primarily from short-term
and joint venture investments. Also, the Company repaid debt of $1,123,823, net.
Except for short-term borrowing, the Company's primary source of cash is the
sale of land. Although rental operations generated $300,000 in the first fiscal
quarter, most of those receipts normally are used to service the mortgage debt
for those properties. Other than trade payables, the other significant debt is
$1,374,000 on a construction line of credit. This amount fluctuates, and is paid
from receipts from lot sales. The Company will continue to improve its land
projects to create saleable product, and management believes that receipts from
those sales will sustain the Company for the balance of the year.
During the first quarter of the current fiscal year, the Company had
revenues of $1,232,115 compared to $550,721 during the same period in the prior
fiscal year. Land revenues increased significantly primarily due to a greater
amount of improved lot sales, $910,000 compared to $315,000. Operating expenses
during the three months ended September 30, 2001, were $972,215 compared to
$910,244 during the comparable period in 2000. The increase was due principally
to higher cost of land revenues by $303,000, offset by a decrease in general and
administrative expenses of $248,000. As the Company sells the remaining lots in
its Tierra Oeste units this year, it will begin sales of lots in the Painted Sky
and Crossings divisions, which should continue into the next fiscal year.
For the past nine years, the National Park Service has been buying land
from Westland for its Petroglyph National Park pursuant to condemnation. The
Company is allowed to defer federal and state income tax on the gain from these
sales if it reinvests the proceeds within a specified time. The result has been
deferred tax liability of $5,416,423. Of the approximately $15,600,000 spent,
the Company has remaining approximately $3,585,000 of replacemant lands and
property to acquire by June 30, 2004. In the event the Company does not
replace the property sold to the National Park Service, it may need to utilize a
substantial portion of its liquid investments for the payment of these taxes.
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
Other than the ordinary routine litigation incidental to the Company's
business, neither the Company nor any member of management is the subject of any
pending or threatened legal proceeding.
ITEM 2. CHANGES IN SECURITIES
NONE
ITEM 3. DEFAULTS IN SENIOR SECURITIES
NONE
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
NONE
ITEM 5. OTHER INFORMATION
NONE
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) There are no exhibits required by Item 601 of Regulation S-B.
(b) Reports on Form 8-K. State whether any reports on Form 8-K have been
filed during the quarter for which this report is filed, listing the items
reported, any financial statements filed, and the dates of any such reports.
NONE
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.
WESTLAND DEVELOPMENT CO., INC.
DATE: November 13, 2001 By: Barbara Page
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Barbara Page, President,
Chief Executive Officer and
Chief Accounting Officer