Company Quick10K Filing
First Hartford
Price2.45 EPS3
Shares2 P/E1
MCap6 P/FCF-13
Net Debt-9 EBIT18
TEV-3 TEV/EBIT-0
TTM 2018-07-31, in MM, except price, ratios
10-Q 2018-07-31 Filed 2018-09-28
10-K 2018-04-30 Filed 2018-07-30
10-Q 2018-01-31 Filed 2018-03-29
10-Q 2017-10-31 Filed 2017-12-28
10-Q 2017-07-31 Filed 2017-10-10
10-K 2017-04-30 Filed 2017-07-31
10-Q 2017-01-31 Filed 2017-04-24
10-Q 2016-10-31 Filed 2017-01-17
10-Q 2016-07-31 Filed 2016-10-07
10-K 2016-04-30 Filed 2016-08-05
10-Q 2016-01-31 Filed 2016-04-05
10-Q 2015-10-31 Filed 2015-12-28
10-Q 2015-07-31 Filed 2015-09-29
10-K 2015-04-30 Filed 2015-08-05
10-Q 2015-01-31 Filed 2015-04-15
10-Q 2014-10-31 Filed 2015-02-04
10-Q 2014-07-31 Filed 2014-12-12
10-K 2014-04-30 Filed 2014-10-27
10-Q 2014-01-31 Filed 2014-08-07
10-Q 2013-10-31 Filed 2014-06-10
10-Q 2013-07-31 Filed 2014-05-09
10-K 2013-04-30 Filed 2014-03-25
10-Q 2013-01-31 Filed 2013-03-29
10-Q 2012-10-31 Filed 2012-12-19
10-Q 2012-07-31 Filed 2012-10-05
10-K 2012-04-30 Filed 2012-09-06
10-Q 2012-01-31 Filed 2012-04-20
10-Q 2011-10-31 Filed 2012-01-27
10-Q 2011-07-31 Filed 2011-12-14
10-K 2011-04-30 Filed 2011-11-02
10-Q 2011-01-31 Filed 2011-03-31
10-Q 2010-10-31 Filed 2011-01-11
10-Q 2010-07-31 Filed 2010-10-06
10-K 2010-04-30 Filed 2010-08-05
10-Q 2010-01-31 Filed 2010-03-26
10-Q 2009-10-31 Filed 2010-01-13
8-K 2018-10-19

FHRT 10Q Quarterly Report

Item 2. Management's Discussion and Analysis of Financial
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Item 4T. Controls and Procedures
Part II Other Information
Item 1. Legal Proceedings
Item 1A. Risk Factors
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Item 3. Defaults Upon Senior Securities
Item 4. (Removed and Reserved)
Item 5. Other Information
Item 6. Exhibits
EX-31 ex31-1.htm
EX-31 ex31-2.htm
EX-32 ex32-1.htm
EX-32 ex32-2.htm

First Hartford Earnings 2010-07-31

Balance SheetIncome StatementCash Flow
2501951408530-252013201520172019
Assets, Equity
352719113-42013201520172019
Rev, G Profit, Net Income
1593-3-9-152013201520172019
Ops, Inv, Fin

10-Q 1 esfirsthartford10q.htm First Hartford Form 10-Q

 

 

 

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

 

FORM 10-Q

(Mark One)

 

[x]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended July 31, 2010.

 

[  ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from _______________________________________ to ___________________________________

 

Commission File Number: _______________________________________________________________________________                  

 

First Hartford Corporation

(Exact name of registrant as specified in its charter)

 

Maine

01-0185800

 (State or other jurisdiction of incorporation or organization) 

(I.R.S. Employer Identification No.)

 

 

149 Colonial Road    Manchester, CT         

06045-1270

(Address of principal executive offices)  

 (Zip Code)

 

860-646-6555

 (Registrant's telephone number, including area code)

 

(Former name, former address and former fiscal year, if changed since last report)

 

Indicate by check mark whether the registrant (1) has filed all reports required 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.   X Yes    No   

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).   Yes    No

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.  See definition of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer    

Accelerated filer 

 

 

Non-accelerated filer    (Do not check if a smaller reporting company)     

Smaller reporting company X

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes   X No

 

APPLICABLE ONLY TO CORPORATE ISSUERS

 

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date.

 

3,027,965 as of October 1, 2010   

1


 


 


 

 

 

 

FIRST HARTFORD CORPORATION AND SUBSIDIARIES
 

INDEX

 

PART I.

FINANCIAL INFORMATION                                                                

PAGE

 

 

 

Item 1.

Financial Statements

 

 

 

 

 

Condensed Consolidated Balance Sheets -

 

 

July 31, 2010 (unaudited) and April 30, 2010 (audited)  

3 - 4

 

 

 

 

Condensed Consolidated Statements of Operations and Other

 

 

Comprehensive Income (Loss) for the Three Months

 

 

Ended July 31, 2010 and 2009 (unaudited)    

5

 

 

 

 

Condensed Consolidated Statements of Cash Flows for the

 

 

Three Months Ended July 31, 2010 and 2009 (unaudited)              

6 - 7

 

 

 

 

Notes to Condensed Consolidated Financial Statements     

8 - 12

 

 

 

Item 2.

Management’s Discussion and Analysis of Financial Condition    

 

 

and Results of Operations  

12 - 13

 

 

 

Item 3.

Quantitative and Qualitative Disclosures About Market Risk   

14

 

 

 

Item 4T.

Controls and Procedures   

14

 

 

 

PART II

OTHER INFORMATION

 

 

 

 

Item 1.

Legal Proceedings  

15

 

 

 

Item 1A.

Risk Factors   

15

 

 

 

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds    

15

 

 

 

Item 3.

Defaults Upon Senior Securities   

15

 

 

 

Item 4.

(Removed and Reserved)     

15

 

 

 

Item 5.

Other Information      

15

 

 

 

Item 6.

Exhibits   

15

 

 

 

 

Signatures  

16

 

 

 

 

Exhibits  

17 - 20

 

 

 

 

 

 

 

2


 


 


 

 

 

 

 

FIRST HARTFORD CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

 

ASSETS

 

 

 

 

 

 

July 31, 2010

 

 

April 30, 2010

 

 

 

 

 

(unaudited)

 

 

(audited)

Real estate and equipment:

 

 

 

 

 

 

 

   Developed properties

 

 

 

$110,459,740

 

 

$131,437,600

 

   Equipment and tenant improvements

 

 

1,449,946

 

1,408,206

 

 

111,909,686

 

132,845,806

 

 

 

 

 

   Less: accumulated depreciation and amortization

 

 

8,999,444

 

 

11,200,570

 

 

 

102,910,242

 

121,645,236

 

 

 

 

 

   Property under construction

 

11,473,810

 

5,525,858

 

 

114,384,052

 

127,171,094

 

 

 

 

 

 

Cash and cash equivalents  

 

 

2,686,136

 

5,179,164

 

 

 

 

 

 

Cash and cash equivalents - restricted

 

2,687,055

 

 

2,350,003

 

 

 

 

 

Marketable securities 

 

12,216

 

1,323,571

 

 

 

 

 

 

Accounts and notes receivable, less allowance for doubtful accounts

 

 

 

 

 

 

 

 

   of $500,000 and $214,000 as of July 31, 2010 and April 30, 2010, respectively

 

 

1,631,836

 

 

2,175,177

 

 

 

Other receivables

 

11,613,286

 

 

15,654,514

 

 

 

 

 

Deposits, escrows, prepaid and deferred expenses, net

 

10,382,702

 

 

10,316,964

 

 

 

 

 

Investments in affiliates

 

 

 

9,665

 

 

9,665

 

 

 

 

 

 

Due from related parties and affiliates

 

 

 

486,704

 

454,467

 

 

 

 

 

Deferred tax assets, net

 

 

1,238,000

 

1,238,000

 

 

 

 

 

 

Total Assets

 

 

 

 

$145,131,652

 

 

$165,872,619

 

 

 

 

 

 

 

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

 

3


 


 


 

 

FIRST HARTFORD CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS (continued)

 

 LIABILITIES AND SHAREHOLDERS’ DEFICIENCY

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

July 31, 2010

 

 

April 30, 2010

 

Liabilities:

 

 

 

(unaudited)

 

 

(audited)

 

   Mortgages and notes payable:

 

 

 

 

 

 

 

 

   Construction loans payable

 

 

 

$57,487,978

 

 

$52,683,189

 

   Mortgages payable

 

 

 

66,129,673

 

 

86,613,734

 

   Notes payable

 

 

 

1,683,792

 

 

2,165,321

 

 

125,301,443

 

141,462,244

 

 

 

 

 

 

Accounts payable

 

 

 

2,998,398

 

1,815,727

 

Other payables

 

 

6,594,583

 

10,133,280

 

Accrued liabilities

 

 

 

6,740,571

 

 

7,454,741

 

Deferred income

 

 

 

43,916

 

 

198,090

 

Derivative liabilities

 

 

 

-0-

 

 

2,677,363

 

Other liabilities

 

 

 

4,494,682

 

 

4,709,772

 

Due to related parties and affiliates

 

 

 

89,141

 

 

62,418

 

Total Liabilities

 

 

146,262,734

 

168,513,635

 

 

 

 

 

 

 

 

 

 

Shareholders’ Deficiency:

 

 

 

 

 

 

 

 

Preferred stock, $1 par value; $.50 cumulative and convertible;

 

 

  authorized 4,000,000 shares; no shares issued and outstanding

 

-0-

 

-0-

 

Common stock, $1 par value; authorized 6,000,000 shares;

 

 

 

 

 

 

  issued 3,298,609 shares

 

3,298,609

 

 

3,298,609

 

Capital in excess of par

 

 

 

2,176,704

 

 

2,176,704

 

Accumulated deficit

 

 

 

(14,163,082)

 

 

(15,118,235)

 

Accumulated other comprehensive loss

 

 

-0-

 

 

(85,414)

Treasury stock, at cost, 270,644 shares as of July 31, 2010 and April 30, 2010

 

 

 

(2,044,429)

 

(2,044,429)

 

Total Company Shareholders’ Deficiency

 

 

 

 

(10,732,198)

 

 

(11,772,765)

 

Noncontrolling interests

 

 

 

9,601,116

 

9,131,749

 

 

 

 

 

 

Total Shareholders’ Deficiency

 

 

 

(1,131,082)

 

 

(2,641,016)

 

 

 

 

 

 

Total Liabilities and Shareholders’ Deficiency

 

 

 

$145,131,652

 

 

$165,872,619

 

 

 

 

 

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

4


 


 


 

 

 

 

 

FIRST HARTFORD CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND

OTHER COMPREHENSIVE (LOSS) INCOME

(Unaudited)

 

 

Three Months Ended

 

July  31, 2010

July 31, 2009

 Operating revenues:

 

 

(As Restated)

         Rental income

$4,198,477

 

$3,106,372

         Service income

767,839

 

1,594,634

         Other Income

85,312

 

246,187

 

5,051,628

 

4,947,193

 

 

 

 

Operating costs and expenses:

 

 

 

        Rental expenses

3,148,451

 

1,906,504

        Service expenses

633,396

 

903,227

        Selling, general and administrative expenses

772,598

 

872,787

 

4,554,445

 

3,682,518

 

 

 

 

Income from operations

497,183

 

1,264,675

 

 

 

 

Non-operating income (expense):

 

 

 

        Interest expense

(1,690,195)

 

(1,527,295)

        Other income

-0-

 

37,510

        Gain on derivatives

-0-

 

824,565

        Equity in earnings of unconsolidated subsidiaries

215,437

 

142,975

 

(1,474,758)

 

(522,245)

 

 

 

 

(Loss) income before income taxes

(977,575)

 

742,430

 

 

 

 

Provision for income taxes

2,350

 

16,717

 

 

 

 

Net (loss) income

(979,925)

 

725,713

 

 

 

 

Net (income) loss attributable to noncontrolling interests

(30,922)

 

119,991

 

 

 

 

Net (loss) income attributable to Company

(1,010,917)

 

845,704

 

 

 

 

Other comprehensive income, net of tax:

 

 

 

Unrealized holding gains on securities during the period

-0-

 

293,732

 

 

 

 

Comprehensive (loss) income

$(1,010,917)

 

$1,139,436

 

 

 

 

Net ( loss) income per share - basic

$(0.33)

 

$0.28

 

 

 

 

Net (loss) income per share - diluted

$(0.33)

 

$0.28

 

 

 

 

Shares used in basic per share computation

3,027,998

 

3,028,065

 

 

 

 

Shares used in diluted per share computation

3,027,998

 

3,064,681

 

 

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

5


 


 


 

 

 

 

 

      

 

FIRST HARTFORD CORPORATION AND SUBSIDIARIES

 

 

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

 

July 31, 2010

 

 

July 31, 2009

 

 

 

 

 

(As Restated)

 

Cash flows from operating activities:

 

 

 

 

 

 

  Net (loss) income

  

 

$(979,925)

 

 

$725,713

 

Adjustments to reconcile net (loss) income  

 

 

 

 

 

 

 

  to net cash provided by operating activities:

 

 

 

 

 

 

 

  Equity in earnings of unconsolidated subsidiaries

 

(215,437)

 

 

 

(142,975)

 

  Gain on sales of marketable securities

 

-0-

 

 

(37,510)

  Depreciation

 

699,599

 

 

 

709,871

  Amortization

 

78,609

 

 

74,663

 

  Gain on derivatives

-0-

 

 

(824,565)

 

 

 

 

 

 

 

 

(Increase) decrease in:

 

 

 

 

 

 

 

  Accounts, notes and other receivables, net

 

4,222,887

 

 

2,853,857

 

  Deposits, escrows, prepaid and deferred expenses

 

(572,699)

 

 

 

(301,977)

 

  Cash and cash equivalents – restricted

 

(337,052)

 

 

(595,538)

 

 

 

 

 

Increase (decrease) in:

 

 

 

 

 

 

 

  Accrued liabilities

 

(521,916)

 

 

 

(255,018)

 

  Deferred income

 

(16,821)

 

 

141,670

 

  Accounts and other payables

(2,356,026)

 

 

(2,286,490)

 

     

 

Net cash provided by operating activities

 

1,219

 

 

 

61,701

 

 

 

 

 

 

Cash flows from investing activities:

 

 

 

 

 

 

 

  Distributions from affiliates, net

347

 

 

 

549

 

  Investment in marketable securities, net

 

-0-

 

 

(35,738)

 

  Purchase of equipment and tenant improvements

 

(41,740)

 

 

 

(13,974)

 

  Deconsolidation of CP Associates, LLC

 

(1,891,798)

 

 

-0-

  Additions to developed properties and properties under construction

(5,545,797)

 

(647,326)

Net cash used in investing activities

 

(7,478,988)

 

 

 

(696,489)

 

 

 

 

 

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

6


 


 


FIRST HARTFORD CORPORATION AND SUBSIDIARIES

 

(Unaudited)

 

 

 

 

 

 

Three Months Ended

 

 

July 31, 2010

 

July 31, 2009

 

 

 

 

 

(As Restated)

 

Cash flows from financing activities:

 

 

 

 

 

 

   Limited partners investment in consolidated joint ventures

936,401

 

374,664

   Purchase of treasury stock

-0-

 

(315)

  

 

 

 

Proceeds from:

 

 

 

 

 Construction loans payable

 

4,804,789

 

 

 

841,872

 

Principal payments on:

 

 

 

 

 

 

 

 Construction loans payable

 

-0-

 

 

(245,033)

 

  Mortgages payable

 

(252,118)

 

 

(244,666)

 

  Notes payable

 

(481,529)

 

 

 

(1,516)

 

  Advances to related parties and affiliates, net

 

(22,802)

 

 

 

(8,613)

 

 

 

 

 

 

 

 

Net cash provided by financing activities

 

4,984,741

 

 

 

716,393

 

 

 

 

 

 

 

 

Net (decrease) increase in cash and cash equivalents

 

(2,493,028)

 

 

81,605

 

 

 

 

 

 

 

 

 

Cash and cash equivalents, beginning of period

 

5,179,164

 

 

 

2,760,342

 

 

 

 

 

 

 

Cash and cash equivalents, end of period

$2,686,136

 

$2,841,947

 

 

 

 

$1,913,167

 

$1,434,726

 

Cash paid during the period for income taxes

$34,641

 

 

$28,417

       
       
       
       
       
       
       
       

 

 

                                                               

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

7


 


 


 

 

 

 

 

 

 

 

FIRST HARTFORD CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

1.         Nature of Business and Significant Accounting Policies:

 

Description of Business

 

First Hartford Corporation was incorporated in Maine in 1909 and is engaged in the purchase, development, ownership, management and sale of real estate.

 

Principles of Consolidation

 

The accompanying condensed consolidated financial statements include the accounts of First Hartford Corporation, its wholly owned subsidiaries and other controlled subsidiaries (collectively referred to as the “Company”).  The Company reflects noncontrolling interest for the non-owned portions of consolidated subsidiaries.  All significant intercompany transactions and accounts have been eliminated in the condensed consolidated financial statements, including construction revenues and costs of development for the Company’s own use (rental/future sale). 

 

Financial Statement Presentation

 

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X.  Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements.  In the opinion of management, all adjustments (consisting of normal recurring accruals and adjustments to previously established loss provisions) considered necessary for a fair presentation have been included.  Operating results for the three months ended July 31, 2010 are not necessarily indicative of the results that may be expected for the year ending April 30, 2011.  For further information, refer to the consolidated financial statements and footnotes thereto included in the Company’s annual report on Form 10-K for the fiscal year ended April 30, 2010.

           

Certain amounts in the statements of operations and cash flows for the three months ended July 31, 2009 have been restated to correct an error in the period as reported in Note 9 of the Company’s Form 10-Q for the quarterly period ended January 31, 2010. The error related to the capitalization of project costs associated with the acquisition and development of a low income multi-residential housing complex. Note 4 summarizes the impact of the error on our previously reported condensed consolidated financial statements for the quarterly period ended July 31, 2009.

 

Because the Company is engaged in the development and sale of real estate at various stages of construction, the operating cycle may extend beyond one year. Accordingly, following the usual practice of the real estate industry, the accompanying condensed consolidated balance sheets are unclassified.

 

Estimates

 

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amount of assets and liabilities, and the disclosure of contingent assets and liabilities as of the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period.  Actual results could differ from those estimates.

 

 

 

8


 


 


 

 

 

 

 

FIRST HARTFORD CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

1.         Nature of Business and Significant Accounting Policies (continued):

 

Significant Accounting Policies

 

There has been no change in the Company's significant accounting policies from those contained in our Annual Report on Form 10-K for the year ended April 30, 2010, except as discussed below.

 

In June 2009, the Financial Accounting Standards Board (“FASB”) issued consolidation guidance, which amended the previous consolidation guidance applicable to variable interest entities.  Under the updated guidance, the identification of a primary beneficiary of a variable interest entity (“VIE”) is defined as the enterprise that has both of the following characteristics: a) the power to direct the activities of a VIE that most significantly impacts the VIE’s economic performance, and b) the obligation to absorb losses of the VIE or the right to receive benefits from the VIE that could potentially be significant to the VIE.  The application of this updated guidance was effective for the Company as of May 1, 2010.  Based on this updated guidance, the Company determined that it is no longer considered to be the primary beneficiary of the Company’s joint venture, CP Associates, LLC (“CP Associates”).  As a result of the initial application of this updated guidance, the Company has deconsolidated CP Associates as of May 1, 2010 and has measured its 50% retained interest in CP Associates at the carrying amount of the Company’s retained interest had this updated guidance been effective when CP Associates was initially formed.  The difference between the net amount removed from the Company’s balance sheet and the amount of the Company’s 50% retained interest in CP associates has been recognized as a cumulative effect adjustment to the Company’s beginning equity as of May 1, 2010 (see Note 2).

 

Net Income (Loss) Per Common Share

 

Basic net income (loss) per share is computed by dividing the net income (loss) attributable to the common stockholders (the numerator) by the weighted average number of shares of common stock outstanding (the denominator) during the reporting periods. Diluted net income (loss) per share is computed by increasing the denominator by the weighted average number of additional shares that could have been outstanding from securities convertible into common stock, such as stock options and warrants (using the “treasury stock” method).

 

2.         Investments in Affiliated Partnerships

 

On May 1, 2010, the Company deconsolidated CP Associates based on updated consolidation guidance issued by the FASB.  The following is a summary of the carrying amount of CP Associates’ assets and liabilities and the resulting cumulative effect adjustment to the Company’s equity as of May 1, 2010.

 

Assets                   

$21,685,455

Liabilities                  

23,238,912

Equity: Cumulative effect adjustment     

($1,553,457)

   

 

At April 30, 2010, the Company reported approximately $1,892,000 of unrestricted cash and cash equivalents belonging to CP Associates, LLC.  Due to the deconsolidation, it is no longer included in the Company’s balance sheet as of July 31, 2010.

 

 

 

 

9


 


 


 

 

 

 

FIRST HARTFORD CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

2.         Investments in Affiliated Partnerships (continued):

 

The following is a summary of the effects of CP Associates included in the Company’s condensed consolidated statement of operations for the three month period ended July 31, 2009.

 

Operating revenue   

$780,943

Operating expenses     

691,956

Income from operations    

88,957

Gain on derivatives     

824,565

Net income   

$913,552

 

The Company has prospectively accounted for its retained interest in CP Associates under the equity method of accounting.  In addition, the Company also accounts for its 50% interest in Cranston Parkade, LLC and Dover Parkade, LLC under the equity method of accounting.  The following is a summary of the unconsolidated operating results of CP Associates for the three month period ended July 31, 2010 and of the unconsolidated operating results of Cranston Parkade, LLC and Dover Parkade, LLC for the three month periods ended July 31, 2010 and 2009.

 

 

Three Months Ended

July 31

 

2010

CP Associates, LLC

   

      Revenues

  $  780,555 

      Expenses

    627,297 

      Loss on derivatives

 
(1,086,004)

Net loss

 
$ (932,746)
   

 

 

Three Months Ended

July 31

 

 

2010

 

2009

Cranston Parkade, LLC

 

 

 

 

      Revenues

$

1,293,757

$

1,245,828

      Expenses

 

     993,834

 

  1,014,774

Net Profit

$

   299,923

$

   231,054

 

 

 

 

 

Dover Parkade, LLC

 

 

 

 

     Revenues

$

   672,673

$

   559,956

     Expenses

 

     547,079

 

     506,160

Net Profit

$

   125,594

$

     53,796

 

The Company’s investments in CP Associates, Cranston Parkade and Dover Parkade have been recorded at cost and have been subsequently adjusted for gains, losses and distributions such that the carrying value is less than zero. Although the Company no longer considers itself liable for the obligations of Cranston Parkade and Dover Parkade, it had not previously discontinued applying the equity method on these investments since the Company had previously considered itself to be committed to providing financial support to these partnerships. Other liabilities in the condensed consolidated balance sheets represents the negative carrying value of these investments.

 

10


 


 


 

 

 

 

 

FIRST HARTFORD CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

3.         Income Taxes

 

The Company files income tax returns in the U.S. federal jurisdiction and various state jurisdictions. The Company is no longer subject to U.S. federal tax examinations for years before May 1, 2007. State jurisdictions could remain subject to examination for longer periods.

 

Deferred tax assets or liabilities are computed based on the difference between the financial statement and income tax bases of assets and liabilities using the enacted marginal tax rate. Deferred income tax expenses or benefits are based on the changes in the deferred tax assets and liabilities from period to period.

 

In assessing the need for a valuation allowance, the Company estimates future taxable income, considering the feasibility of ongoing tax planning strategies and the realizability of tax loss carryforwards. Valuation allowances related to deferred tax assets can be impacted by changes to tax laws, changes to statutory tax rates and future taxable income levels. In the event the Company were to determine that it would not be able to realize all or a portion of its deferred tax assets in the future, it would reduce such amounts through a charge to income in the period in which that determination is made. Conversely, if the Company were to determine that it would be able to realize its deferred tax assets in the future in excess of the net carrying amounts, it would decrease the recorded valuation allowance through an increase to income in the period in which that determination is made.

 

As of July 31, 2010, the Company has concluded that it is more likely than not that the Company will realize $1,238,000 in deferred tax assets.

 

4.         Correction of Error

 

As described in Note 1, the Company identified an error in our condensed consolidated financial statements for the quarterly period ended July 31, 2009.  The error related to the capitalization of project costs associated with the acquisition and development of a low income multi-residential housing complex. The following table summarizes the impact of the error on the Company’s previously reported consolidated financial statements for the quarterly period ended July 31, 2009.

             

 

 

Three months ended July 31, 2009

 

 

Previously
Reported

 

 

Adjustment

 

 

Restated

Revenues

 

$4,947,193

 

$0

 

$4,947,193

Costs and

   expenses

 

3,860,518

 

(178,000)

 

3,682,518

Net income attributable to company

 

667,704

 

178,000

 

845,704

Net loss per

   common share:

 

 

 

 

 

 

     Basic

 

$0.22

 

$0.06

 

$0.28

     Diluted

 

$0.22

 

$0.06

 

$0.28

 

 

 

 

 

 

 

Assets

 

134,213,213

 

178,000

 

134,391,213

Liabilities

 

135,692,026

 

0

 

135,693,026

Equity

 

(1,478,813)

 

178,000

 

(1,300,813)

 

 

 

 

11


 


 


 

 

 

 

 

FIRST HARTFORD CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

5.         Commitments and Contingencies

           

The Company has been instructed by the Court to buy back the minority interest held by Richard Kaplan.  The Judge has set a value of approximately $2.9 million payable with a $500,000 initial payment and 20 quarterly installments of approximately $120,000 each with a balloon payment of approximately $725,000 for accrued interest from September 15, 2005.  The Company will pay the quarterly payment from a dedicated account which will retain the net cash flow of three shopping centers (Putnam, Plainfield, and Union Street, West Springfield). It is expected that the cash flow will adequately fund the buy back. A liability of approximately $3,675,000 is included in accrued liabilities in the consolidated balance sheet.

 

Item 2.             MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL

CONDITION AND RESULTS OF OPERATIONS

 

The financial and business analysis below provides information which the Company believes is relevant to an assessment and understanding of the Company’s financial position and results of operations.  This financial and business analysis should be read in conjunction with the condensed consolidated financial statements and related notes.

 

The following discussion and certain other sections of this Report on Form 10-Q contain statements reflecting the Company's views about its future performance and constitutes “forward-looking statements” under the Private Securities Litigation Reform Act of 1995.  These views may involve risks and uncertainties that are difficult to predict and may cause the Company's actual results to differ materially from the results discussed in such forward-looking statements.  Readers should consider how various factors including changes in general economic conditions, cost of materials, interest rates and availability of funds, and the nature of competition and relationships with key customers may affect the Company's performance.  The Company undertakes no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or other.

 

Critical Accounting Policies

 

The discussion and analysis of financial condition and results of operations is based upon the condensed consolidated financial statements contained in Item 1 in this Quarterly Report.  The condensed consolidated financial statements include the accounts of the Company and its controlled affiliates.  The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses for the reporting period.  Actual results could differ from those estimates.

 

The discussion included in Item 7 of our Annual Report on Form 10-K for the year ended April 30, 2010 under the subheading "Critical Accounting Policies and Estimates" is still considered current and applicable, and is hereby incorporated into this Quarterly Report on Form 10-Q.

 

Results of Operations:

 

Rental Income

 

Rental income increased approximately $1,092,000 for the three months ended July 31, 2010 compared to the period ended July 31, 2009. 

 

The increase was mainly due to the acquisition of Clarendon Towers during April 2010, resulting in additional rental income of approximately $1,873,000 offset by the deconsolidation of CP Associates (approximately $756,000).

 

12


 


 


 

CONDITION AND RESULTS OF OPERATIONS (continued):

 

Service Income

 

Service income decreased approximately $827,000 over the three months ended July 31, 2009.  Fees from CVS Pharmacy amounted to approximately $665,000 of the decrease, which we expect to make up in the 2nd half of our fiscal year. During the period ended July 31, 2009, the Company recognized $94,494 of management fees from Clarendon Towers.  In April 2010, we acquired an interest in Clarendon Towers resulting in consolidation of Clarendon Towers and elimination of management fees of $75,642 during the period ended July 31, 2010.

 

Rental Expense

 

Rental expense increased approximately $1,242,000 over the three months ended July 31, 2009.  Of that amount approximately $1,450,000 was from Clarendon.  Due to the deconsolidation at May 1, 2010, expenses for CP Associates are not reflected in rental expenses for the period ended July 31, 2010. During the period ended July 31, 2009, approximately $341,000 of rental expenses were from CP Associates.

 

Service Expense

 

Service expense decreased approximately $270,000 from the three month period ended July 31, 2009.  This reduction is mostly from a decline in activity related to our CVS Pharmacy business, which is consistent with the decline in our income generated from this business.

 

Gain (Loss) on Derivative

 

The gain (loss) on derivatives relates to the change in fair value of interest rate swaps held by CP Associates, which was deconsolidated as of May 1, 2010.

 

For the period ended July 31, 2009, the Company recognized a gain of approximately $825,000 on these swaps.

 

Capital Resource and Liquidity

 

The Company ended the period with approximately $2,686,000 of unrestricted cash and cash equivalents.  The unrestricted cash and cash equivalent including approximately $2,425,000 belonging to less than wholly owned consolidated partnerships (Rockland Place, LP, $1,577,000 and Clarendon Hill Somerville, LP, $848,000).  Funds received from CVS Pharmacy, which are to be paid out in connection with CVS developments amounted to approximately $2,687,000 and is included in restricted cash and cash equivalents.

 

At April 30, 2010, the Company reported approximately $1,892,000 of unrestricted cash and cash equivalents belonging to CP Associates, LLC.  Due to the deconsolidation, it is no longer included in the Company’s balance sheet.

 

The Company has been instructed by the Court to buy back the minority interest held by Richard Kaplan.  The Judge has set a value of approximately $2.9 million payable with a $500,000 initial payment and 20 quarterly installments of approximately $120,000 each with a balloon payment of approximately $725,000 for accrued interest from September 15, 2005.  The Company will pay the quarterly payment from a dedicated account which will retain the net cash flow of three shopping centers (Putnam, Plainfield, and Union Street, West Springfield). It is expected that the cash flow will adequately fund the buy back.

 

 

13


 


 


 

 

 

Item 2.             MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL

CONDITION AND RESULTS OF OPERATIONS (continued):

 

Capital Resource and Liquidity (continued): 

 

The following schedule outlines our long-term obligations.

 

 

Contractual Obligations

Total

Less Than

1 year

1-3 years

3-5 years

More Than

5 years

 

 

 

 

 

 

Long-Term Debt

$124,751,443

$1,273,307

$47,320,447

$15,162,636

$60,995,053

 

 

 

 

 

 

Short-Term Debt

550,000

550,000

 

 

 

 

 

 

 

 

 

Stock Repurchase

3,625,000

860,000

960,000

960,000

845,000

 

 

 

 

 

 

Purchase Obligations

4,107,000

4,107,000

 

 

 

 

 

 

 

 

 

Total

$133,033,443

$6,790,307

$48,280,447

$16,122,636

$61,840,053

 

Item 3.             QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

 

Smaller reporting companies are not required to provide the information required by this item.

 

Item 4T.                       CONTROLS AND PROCEDURES

 

Evaluation of Disclosure Controls and Procedures

 

We maintain “disclosure controls and procedures,” as such term is defined in Rule 13a-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”), that are designed to ensure that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission rules and forms, and that such information is accumulated and communicated to our management, including our President and Treasurer, as appropriate, to allow timely decisions regarding required disclosure. We conducted an evaluation (the “Evaluation”), under the supervision and with the participation of our President and Treasurer, of the effectiveness of the design and operation of our disclosure controls and procedures (“Disclosure Controls”) as of the end of the period covered by this report pursuant to Rule 13a-15b of the Exchange Act. Based on this Evaluation, our President and Treasurer concluded that because of weaknesses in our control environment, our Disclosure Controls were not fully effective as of the end of the period covered by this report. Notwithstanding weaknesses in our control environment, as of July 31, 2010, we believe that the condensed consolidated financial statements contained in this report present fairly the Company’s financial condition, results of operations and cash flows for the periods presented.

 

Changes in Internal Control Over Financial Reporting

 

As of the end of the period covered by this report, there have been no changes in internal control over financial reporting (as defined in Rule 13a-15(f) of the Exchange Act) during the period covered by this report, that materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

 

14


 


 


 

 

 

 

PART II           OTHER INFORMATION

 

Item 1.             LEGAL PROCEEDINGS

 

There have not been any material developments in the legal proceedings we described in our Annual Report on Form 10-K for the year ended April 30, 2010.

 

Item 1A.          RISK FACTORS

 

Smaller reporting companies are not required to provide the information required by this item.

 

Item 2.             UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

 

                        None

 

Item 3.             DEFAULTS UPON SENIOR SECURITIES

 

                        None

 

Item 4.             (REMOVED AND RESERVED)

 

Item 5.             OTHER INFORMATION

 

None

Item 6.             EXHIBITS

 

a)         Exhibits:

 

Exhibit 31.1       Certification of Chief Executive Officer, pursuant to Rule 13a-14(c) under the Securities Exchange Act of 1934.

 

Exhibit 31.2       Certification of Chief Financial Officer, pursuant to Rule 13a-14(c) under the Securities Exchange Act of 1934.

 

Exhibit 32.1       Certification of Chief Executive Officer, pursuant to 18 U.S.C. Section 1350.

 

Exhibit 32.2       Certification of Chief Financial Officer, pursuant to 18 U.S.C. Section 1350.

15


 


 


 

 

 

 

 

 

 

 

 

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.

 

 

First Hartford Corporation

 

(Registrant)

 

 

 

/s/ Neil H. Ellis

October 6, 2010

______________________________

Date

Neil H. Ellis B President and

 

Chief Executive Officer

 

 

 

/s/ Stuart I. Greenwald

October 6, 2010

______________________________

Date

Stuart I. Greenwald B Treasurer

 

and Chief Financial Officer