-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, HMnJMVjUMl9EpZAQKNUCcFw1tuzt6WjL29/K1EjPZAMEV/W2yGRIhZXUyswvOlFX xNaNyAwk2t0c/+srTy/tPA== 0001008878-02-000010.txt : 20020509 0001008878-02-000010.hdr.sgml : 20020509 ACCESSION NUMBER: 0001008878-02-000010 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20020331 FILED AS OF DATE: 20020509 FILER: COMPANY DATA: COMPANY CONFORMED NAME: WESTLAND DEVELOPMENT CO INC CENTRAL INDEX KEY: 0000106423 STANDARD INDUSTRIAL CLASSIFICATION: LAND SUBDIVIDERS & DEVELOPERS (NO CEMETERIES) [6552] IRS NUMBER: 850165021 STATE OF INCORPORATION: NM FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 10QSB SEC ACT: 1934 Act SEC FILE NUMBER: 000-07775 FILM NUMBER: 02639477 BUSINESS ADDRESS: STREET 1: 401 COORS BOULEVARD S W CITY: ALBUQUERQUE STATE: NM ZIP: 87121 BUSINESS PHONE: 5058319600 MAIL ADDRESS: STREET 1: 401 COORS BLVD S W CITY: ALBUQUERQUE STATE: NM ZIP: 87121 10QSB 1 form10q3q02.txt 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 March 31, 2002 [ ]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 - ------------------------------------------------------------------------------- (Issuer's telephone number) N/A - ------------------------------------------------------------------------------- (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 May 9, 2002: No Par Value Common: 714,547 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) March 31, 2002 ASSETS Cash and cash equivalents ........................ $ 1,714,338 Short-term investments ........................... 761,460 Receivables: Real estate contracts ......................... $ 497,136 Note receivable - related party ............... 97,076 Other receivables ............................. 38,265 632,477 ------------ Land and improvements held for future development ............................ 8,121,994 Income producing properties, net ................. 11,623,231 Property and equipment, net of accumulated depreciation of $578,968 ...................... 336,394 Investment in Partnerships and joint ventures .... 193,432 Income taxes receivable .......................... 14,257 Other ............................................ 274,357 ------------ $ 23,671,940 ============ LIABILITIES AND STOCKHOLDERS' EQUITY Accounts payable, accrued expenses and other liabilities ......................... $ 399,894 Deferred income taxes ............................ 5,616,423 Notes, bonds, mortgages and assessments payable .. 8,877,869 ------------ Total liabilities ............... 14,894,186 Stockholders' equity Common stock - no par value; authorized, 736,668 shares; issued and outstanding, 714,547 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 ............................. 8,091,343 8,777,754 ------------ ------------ $ 23,671,940 ============ WESTLAND DEVELOPMENT CO., INC. STATEMENTS OF OPERATIONS (unaudited) For the three months ended March 31, 2002 2001 ----------- ----------- Revenues Land ...................................... $ 1,717,221 $ 24,377 Rentals ................................... 318,123 292,963 ----------- ----------- 2,035,344 317,340 Costs and expenses Cost of land revenues ..................... 783,999 -- Cost of rentals ........................... 75,330 79,145 General and administrative ................ 386,185 414,875 ----------- ----------- 1,245,514 494,020 ----------- ----------- Income (loss) from operations .......... 789,830 (176,680) Other (income) expense Interest income ........................... (52,599) (28,830) Other income .............................. 2,707 (9,121) Interest expense .......................... 195,051 219,070 ----------- ----------- 145,159 181,119 ----------- ----------- Earnings (loss) before income taxes .... 644,671 (357,799) Income tax expense (benefit) ................. 258,000 (141,000) ----------- ----------- NET EARNINGS (LOSS) .................... $ 386,671 $ (216,799) =========== =========== Weighted average common shares outstanding ............................... 800,892 800,994 =========== =========== Earnings (loss) per common share ............. $ .48 $ (.27) =========== =========== WESTLAND DEVELOPMENT CO., INC. STATEMENTS OF OPERATIONS (unaudited) For the nine months ended March 31, 2002 2001 ----------- ----------- Revenues Land ...................................... $ 6,986,645 $ 492,624 Rentals ................................... 917,072 810,210 ----------- ----------- 7,903,717 1,302,834 Costs and expenses Cost of land revenues ..................... 2,335,601 296,126 Cost of rentals ........................... 215,802 221,392 General and administrative ................ 1,533,195 1,544,143 ----------- ----------- 4,084,598 2,061,661 ----------- ----------- Income (loss) from operations .......... 3,819,119 (758,827) Other (income) expense Interest income ........................... (90,613) (116,901) Gain on sale of assets .................... -- (90) Other income .............................. (16,381) (20,689) Interest expense .......................... 595,975 558,208 ----------- ----------- 488,981 420,528 ----------- ----------- Earnings (loss) before income taxes .... 3,330,138 (1,179,355) Income tax expense (benefit) ................. 1,332,000 (470,000) ----------- ----------- NET EARNINGS (LOSS) .................... $ 1,998,138 $ (709,355) =========== =========== Weighted average common shares outstanding ............................... 800,925 801,165 =========== =========== Earnings (loss) per common share ............. $ 2.49 $ (.89) =========== =========== WESTLAND DEVELOPMENT CO., INC. STATEMENTS OF CASH FLOWS (unaudited) For the nine months ended March 31, 2002 2001 ------------ ------------- Cash flows from operating activities Cash received from land sales and collections on real estate contracts receivable ................. $ 7,114,605 $ 509,488 Development and closing costs paid on land sales ............................... (2,258,809) (1,468,587) Cash received from rental operations .......... 921,961 806,618 Cash paid for rental operations ............... -- (55,896) Cash paid for property taxes .................. (52,547) 48,129 Interest received ............................. 54,055 116,155 Interest paid ................................. (732,620) (540,178) Income taxes paid ............................. (1,183,513) (50,000) General and administrative costs paid ......... (1,449,238) (1,415,334) Other ......................................... 14,150 100 ------------ ------------ Net cash provided (used) by operating activities ........................ 2,428,044 (2,049,505) ------------ ------------ Cash flows from investing activities Capital expenditures for income producing and other properties .............. (29,033) (3,910,915) Distributions from partnerships and joint ventures ........................... 37,250 24,250 Change in short-term investments .............. 735,815 (1,371,036) Proceeds from note receivable-related party ... 2,631 2,499 Proceeds from sale of assets .................. -- 90 ------------ ------------ Net cash provided (used) in investing activities ........................ 746,663 (5,255,112) ------------ ------------ Cash flows from financing activities Borrowing on notes, mortgages and assessments payable ......................... 1,713,053 5,294,617 Repayments of bonds, mortgages, notes and assessments payable ............... (3,937,423) (499,496) Payment of dividends .......................... -- (1,003,623) Purchase/retirement of common stock, net ...... -- 4,434 ------------ ------------ Net cash (used) provided by financing activities ....................... (2,224,370) 3,795,932 ------------ ------------ NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS ......................... 950,337 (3,508,685) Cash and cash equivalents at beginning of period .......................... 764,001 3,882,560 ------------ ------------ Cash and cash equivalents at end of period ................................ $ 1,714,338 $ 373,875 ============ ============ Reconciliation of net earnings (loss) to net cash provided (used) in operating activities Net earnings (loss) ............................ $ 1,998,137 $ (709,355) Adjustments to reconcile net earnings (loss) to net cash provided (used in) by operating activities Depreciation .............................. 251,185 240,854 Gain on sale of assets .................... -- (90) Change in Rents receivable, accrued interest, property tax and other assets ........... 114,134 (20,758) Real estate contracts ..................... (22,022) 50,492 Land and improvements held for future development and income producing properties .................... 69,477 (1,169,491) Other assets .............................. (15,114) (28,540) Accounts and retainages payable, accrued interest and other liabilities ............................. (116,240) 107,383 Income taxes payable ...................... 148,487 (520,000) ------------ ------------ Net cash provided by (used in) operating activities ......................... $ 2,428,044 $ (2,049,505) ============ ============ WESTLAND DEVELOPMENT CO., INC. NOTES TO THE FINANCIAL STATEMENTS (unaudited) March 31, 2002 1. The balance sheet at March 31, 2002, statements of operations for the three and nine months ended March 31, 2002 and March 31, 2001 and statements of cash flows for the nine month periods ended March 31, 2002 and 2001 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 and nine months ended March 31, 2002 are not necessarily indicative of operating results for the full year. 2. The computation of earnings (loss) per common share has been based on the weighted average number of shares of outstanding common stock and common stock issuable without further consideration, which for the three month periods ended March 31, 2002 and 2001 were 800,892 and 800,994, respectively, and for the nine month periods ended March 31, 2002 and 2001 were 800,925 and 801,165, respectively. 3. Financial information for the two industry segments, land sales and rental operations, are as follows: General Land Rentals corporate Total ---- ------- --------- ----- Three months ended March 31, 2002: Revenues $1,717,221 $318,123 $ -- $2,035,344 Costs and expenses 783,999 75,330 386,185 1,245,514 ---------- -------- ----------- ---------- Income (loss) from operations 933,222 242,793 (386,185) 789,830 Interest income -- -- (52,599) (52,599) Other income -- -- 2,707 2,707 Interest expense 11,825 180,641 2,585 195,051 ---------- -------- ----------- ---------- Earnings (loss) before income taxes $ 921,397 $ 62,152 $ (338,878) $ 644,671 ========== ======== =========== ========== Three months ended March 31, 2001: Revenues $ 24,377 $292,963 $ -- $ 317,340 Costs and expenses -- 79,145 414,875 494,020 ---------- -------- ----------- ---------- Income (loss) from operations 24,377 213,818 (414,875) (176,680) Interest income -- -- (28,830) (28,830) Other income -- -- (9,121) (9,121) Interest expense 24,762 170,425 23,883 219,070 ---------- -------- ----------- ---------- Earnings (loss) before income taxes $ (385) $ 43,393 $ (400,807) $ (357,799) ========== ======== =========== ========== Nine months ended March 31, 2002: Revenues $6,986,645 $917,072 $ -- $7,903,717 Costs and expenses 2,335,601 215,802 1,533,195 4,084,598 ---------- -------- ----------- ---------- Income (loss) from operations 4,651,044 701,270 (1,533,195) 3,819,119 Interest income -- -- (90,613) (90,613) Other income -- -- (16,381) (16,381) Interest expense 44,975 546,364 4,636 595,975 ---------- -------- ----------- ---------- Earnings (loss) before income taxes $4,606,069 $154,906 $(1,430,837) $3,330,138 ========== ======== =========== ========== Nine months ended March 31, 2001: Revenues $ 492,624 $810,210 $ -- $ 1,302,834 Costs and expenses 296,126 221,392 1,544,143 2,061,661 ---------- -------- ----------- ----------- Income (loss) from operations 196,498 588,818 (1,544,143) (758,827) Interest income -- -- (116,901) (116,901) Other income -- -- (20,779) (20,779) Interest expense 50,646 483,679 23,883 558,208 ---------- -------- ----------- ----------- Earnings (loss) before income taxes $ 145,852 $105,139 $(1,430,346) $(1,179,355) ========== ======== =========== =========== ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS WHEN USED IN THIS FROM 10-QSB, THE WORDS "BELIEVES" "ANTICIPATES" "EXPECTS" AND SIMILAR EXPRESSIONS ARE INTENDED TO IDENTIFY FORWARD-LOOKING STATEMENTS. SUCH STATEMENTS ARE SUBJECT TO CERTAIN RISKS AND UNCERTAINTIES MORE PARTICULARLY DESCRIBED IN ITEM 1 OF THIS REPORT. THESE RISKS AND UNCERTAINTIES COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY. READERS ARE CAUTIONED NOT TO PLACE UNDUE RELIANCE ON THESE FORWARD-LOOKING STATEMENTS, WHICH SPEAK ONLY AS OF THE DATE HEREOF. WE UNDERTAKE NO OBLIGATION TO PUBLICLY RELEASE THE RESULTS OF ANY REVISIONS TO FORWARD-LOOKING STATEMENTS WHICH WE MAY MAKE TO REFLECT EVENTS OR CIRCUMSTANCES AFTER THE DATE OF THIS FORM 10-QSB OR TO REFLECT THE OCCURRENCE OF UNANTICIPATED EVENTS. Management's Discussion and Analysis should be read in conjunction with our Financial Statements and the notes to our Financial Statements. During the nine months ended March 31, 2002, the Company's cash and cash equivalents increased by $950,337. During this period, operations provided $2,428,044 and investing activities provided $746,663, primarily from short-term and joint venture investments. Also, the Company repaid debt of $2,224,370, net. Except for short-term borrowing, the Company's primary source of cash is the sale of land. Although rental operations generated approximately $900,000 in the first three quarters, most of those receipts were used to service the mortgage debt for those properties. Other than trade payables, the other significant debt is $260,966 on lines of credit used for operations. This amount fluctuates, and is paid from receipts from lot sales. The Company will continue to improve its land projects to create saleable products, and management believes that receipts from those sales will sustain the Company for the balance of the year. During the third quarter of the current fiscal year, the Company had revenues of $2,035,344 compared to $317,340 during the same period in the prior fiscal year. Land revenues increased significantly primarily due to a greater amount of improved lot sales, $3,845,000 compared to $435,000 and an increase in large parcel sales of $2,771,000. Operating expenses during the three months ended March 31, 2002, were $1,245,514 compared to $494,020 during the comparable period in 2001. The increase was due principally to higher cost of land revenues of $783,999. As the Company sells the remaining lots in its Tierra Oeste units this year, it has begun sales of lots in the Painted Sky divisions, which should continue into the next fiscal year. For the year to date, revenues in 2002 were $7,903,717 compared to $1,302,834 in 2001 for reasons stated above. Operating costs were $4,084,598 compared to $2,061,661 as cost of sales increased by $2,039,475. The cost of rental revenues and general and administrative expenses remained relatively constant from 2001 to 2002. Most of the improvement in revenue and income occurred in the second quarter, due to accelerated subdivision lot sales and one single sales transaction of $2,225,000. Management expects increased sales of land to continue. 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 a deferred tax liability of approximately $6,100,000 for these deferred gains. Of the approximately $15,600,000 spent, the Company has remaining approximately $4,585,000 of replacemant lands and property to acquire by June 30, 2005. In the event the Company does not replace the property sold to the National Park Service, it will need to utilize a substantial portion of its liquid investments for the payment of these taxes. 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: May 9, 2002 By: Barbara Page --------------------------- Barbara Page, President, Chief Executive Officer and Chief Accounting Officer -----END PRIVACY-ENHANCED MESSAGE-----