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 Condition and Results of Operations
Item 3. Quantative and Quallitative Disclosures About Market Risk
Item 4. Controls and Procedures
Item 4. Controls and Procedures (Concluded):
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. Mine Safety Disclosures
Item 5. Other Information
EX-31 ex31-1.htm
EX-31 ex31-2.htm
EX-32 ex32-1.htm
EX-32 ex32-2.htm

First Hartford Earnings 2012-07-31

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 esfhart10q.htm

 

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, 2012.

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

For the transition period from                                     to

 

Commission File Number:                  0-8862     

 

First Hartford Corporation

(Exact name of registrant as specified in its character)

 

Maine 

 01-0185800

(State or other jurisdiction of incorporation or organization)

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

149 Colonial Road, Manchester, CT     

 06042

(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 to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes X       No

Indicate 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 X       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          No X

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.

2,418,302 as of September 30, 2012

1

 


 


 

 

 

 

FIRST HARTFORD CORPORATION AND SUBSIDIARIES

The financial statements for the three months ended July 31, 2012 have not been reviewed by an independent registered public accounting firm.

INDEX

PART I.

FINANCIAL INFORMATION

PAGE

 

Item 1.

Financial Statements (Unaudited)

 

               

 

Condensed Consolidated Balance Sheets
                July 31, 2012 and April 30, 2012

 

3-4

 

Condensed Consolidated Statements of Operations for the
                Three Months Ended July 31, 2012 and 2011

 

5

 

Condensed Consolidated Statements of Comprehensive Income
for the Three Months Ended July 31, 2012 and 2011

 

6

 

Condensed Consolidated Statements of Cash Flows for the
                Three Months Ended July 31, 2012 and 2011

 

7-8

 

Notes to Condensed Consolidated Financial Statements

 

9-11 

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

 

13

Item 4.

Controls and Procedures

 

13-14

PART II.

OTHER INFORMATION

 

 

Item 1.

Legal Proceedings

 

14

Item 1A.

Risk Factors

 

14

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

 

14

Item 3.

Defaults Upon Senior Securities

 

14

Item 4.

Mine Safety Disclosures

 

14

Item 5.

Other Information

 

14

Item 6.

Exhibits

15

 

 

Signatures

16

 

 

Exhibits

17-20

 

2

 


 


FIRST HARTFORD CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)

ASSETS

 

July 31, 2012

 

April 30, 2012

 

 

 

 

Real estate and equipment:

 

 

 

 Developed properties (including $70,655,253 in July and $70,644,959 in April for VIEs)

$143,711,276

 

$139,096,722

Equipment and tenant improvements (including $2,026,630 in July and $2,004,014 in April for VIEs)                              

2,962,719

 

2,661,928

 

146,673,995

 

141,758,650

 

 

 

 

Less accumulated depreciation and amortization (including $6,250,437 in July and $5,722,182 in April for VIEs)

16,004,772

 

15,086,499

 

130,669,223

 

126,672,151

 

     

Property under construction (including $28,838 in July and April for VIEs)

3,183,983

 

6,381,722

 

133,853,206

 

133,053,873

 

 

 

 

Cash and cash equivalents (including $585,660 in July and $418,838 in April for VIEs)

1,873,180

 

3,057,736

 

 

 

 

Cash and cash equivalents – restricted

332,345

 

457,952

 

 

 

 

Marketable securities (including $161,048 in July and $155,799 in April for VIEs)

978,642

 

657,299

 

 

 

 

Accounts and notes receivable, less allowance for doubtful accounts of

$367,500 as of July 31, 2012 and April 30, 2012, respectively (including $124,178 in July and $172,899 in April for VIEs)

2,281,215

 

1,955,838

 

 

 

 

Other receivables

6,386,053

 

8,600,078

 

 

 

 

Deposits, escrows, prepaid and deferred expenses, net (including $7,323,126 in July and $7,375,023 in April for VIEs)

10,115,867

 

9,894,914

 

 

 

 

Investments in affiliates

9,665

 

9,665

 

 

 

 

Due from related parties and affiliates (including $0 in July and $65,345 in  April for VIEs)

524,513

 

517,713

 

     

Total Assets

$156,354,686

 

$158,205,068

 

 

 

See accompanying notes.

3

 


 


 

 

 

 

FIRST HARTFORD CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)

LIABILITIES AND DEFICIENCY

 

 

July 31, 2012

 

April 30, 2012

Liabilities:

     

Mortgages and notes payable:

     

   Construction loans payable (including $24,257,043 in July and $24,289,341 in April for VIEs)

$76,408,845

 

$74,026,262

   Mortgages payable (including $33,619,376 in July and $33,795,664 in April for VIEs)

63,959,483

 

64,241,626

   Notes payable (including $2,004,697 in July and April for VIEs)

4,166,057

 

4,283,654

 

144,534,385

 

142,551,542

 

 

 

 

Accounts payable (including $623,547 in July and $801,353 in April for VIEs)

1,787,185

 

2,673,293

Other payables

3,992,396

 

6,102,292

Accrued liabilities (including $2,516,706 in July and $2,367,143 in April for VIEs)

3,771,199

 

4,160,079

Deferred income (including $212,820 in July and $214,217 in April for VIEs)

665,328

 

657,215

Other liabilities

3,873,516

 

4,098,351

Due to related parties and affiliates (including $249 in July for VIEs)

104,552

 

102,752

 

158,728,561

 

160,345,524

 

 

 

 

Deficiency:

 

 

 

First Hartford Corporation:

 

 

 

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

5,198,928

 

5,198,928

Accumulated deficit

(18,444,732)

 

(18,419,410)

Accumulated other comprehensive (loss) income

19,482

 

(12,558)

Treasury stock, at cost, 878,807 and 875,407 shares as of July 31, 2012 and April 30, 2012, respectively

 (4,947,981)

 

(4,943,289)

Total First Hartford Corporation

(14,875,694)

 

(14,877,720)

Noncontrolling interests

12,501,819

 

12,737,264

 

 

 

 

Total Deficiency

(2,373,875)

 

(2,140,456)

 

 

 

 

Total Liabilities and Deficiency

$156,354,686

 

$158,205,068

 

 

 

 

See accompanying notes.

4

 


 


 

 

 

 

FIRST HARTFORD CORPORATION AND SUBSIDIARIES
 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)

 

 

Three Months Ended

 

July 31, 2012

 

July 31, 2011

Operating revenues:

 

 

 

  Rental income

$4,562,373

 

$4,420,707

  Service income

2,192,975

 

910,242

  Other income

214,339

 

1,165

 

6,969,687

 

5,332,114

 

 

 

 

Operating costs and expenses:

 

 

 

  Rental expenses

3,444,322

 

3,160,936

  Service expenses

1,440,058

 

632,391

  Selling, general and administrative

1,007,458

 

731,548

 

5,891,838

 

4,524,875

 

     

Income from operations

1,077,849

 

807,239

 

 

 

 

Non-operating income (expense):

 

 

 

  Interest expense

(1,776,099)

 

(1,912,767)

  Other income

79,780

 

74,769

  Equity in earnings of unconsolidated subsidiaries

365,720

 

791,757

 

(1,330,599)

 

(1,046,241)

 

     

Loss before income taxes

(252,750)

 

(239,002)

 

 

 

 

Provision for (benefit from) income taxes

8,017

 

(125)

 

 

 

 

Consolidated net loss

(260,767)

 

(238,877)

 

 

 

 

Net loss attributable to noncontrolling interests

235,445

 

265,826

 

 

 

 

Net (loss) income attributable to First Hartford Corporation

$(25,322)

 

$26,949

 

 

 

 

Net (loss) income per share – basic

$(0.01)

 

$0.01

 

 

 

 

Net (loss) income per share – diluted

$(0.01)

 

$0.01

 

 

 

 

Shares used in basic per share computation

2,419,802

 

2,436,711

 

 

 

 

Shares used in diluted per share computation

2,419,802

 

2,541,974

 

 

 

See accompanying notes.

5

 


 


 

 

 

 

FIRST HARTFORD CORPORATION AND SUBSIDIARIES
 CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)

 

 

Three Months Ended

 

July 31, 2012

 

July 31, 2011

 

 

 

 

Consolidated net loss

$(260,767)

 

$(238,877)

Other comprehensive income, net of tax:

     

     Unrealized gains on marketable securities

32,040

 

-0-

 

 

 

 

     Other comprehensive income

32,040

 

-0-

 

 

 

 

Comprehensive loss

(228,727)

 

  (238,877)

Comprehensive loss attributable to noncontrolling interests

235,445

 

265,826

 

 

 

 

Comprehensive gain attributable to First Hartford Corporation

$   6,718

 

$   26,949

 

     

 

 

 

 

 

 

 

 

 

 

 

 

 

 

See accompanying notes.

 

 

 

6

 


 


 

 

 

 

FIRST HARTFORD CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)

 

 

Three Months Ended

 

July 31, 2012

 

July 31, 2011

 

     

Operating activities:

     

 

     

  Consolidated net loss

$(260,767)

 

$(238,877)

 

 

 

 

  Adjustments to reconcile consolidated net loss to net cash provided (used) by
    operating activities:

 

 

 

  Equity in earnings of unconsolidated subsidiaries, net of distributions of
    $140,885 in 2012 and $365,519 in 2011

(224,835)

 

(426,238)

  Depreciation

944,466

 

860,863

  Amortization

94,417

 

89,563

 

 

 

 

Changes in operating assets and liabilities:

 

 

 

  Accounts, notes and other receivables

1,888,648

 

3,256,170

  Deposits, escrows, prepaid and deferred expenses

(315,370)

 

250,485

  Cash and cash equivalents – restricted

125,607

 

(389,644)

  Accrued liabilities

(388,880)

 

18,585

  Deferred income

8,113

 

(47,651)

  Accounts and other payables

(2,996,004)

 

(2,057,037)

 

 

 

 

Net cash provided (used) by operating activities

(1,124,605)

 

1,316,219

 

     

Investing activities:

     

  Distributions from affiliates

-0-

 

200,000

  Purchase of marketable securities

(289,303)

 

(151,136)

  Purchase of equipment and tenant improvements

(300,791)

 

(24,919)

  Additions to developed properties and properties under construction

(1,443,007)

 

(2,200,384)

 

 

 

 

  Net cash used by investing activities

(2,033,101)

 

(2,176,439)

 

 

 

 

 

See accompanying notes.

7

 


 


 

 

 

 

FIRST HARTFORD CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)
(Unaudited)

 

 

Three Months Ended

 

July 31, 2012

 

July 31, 2011

 

     

Financing activities:

 

 

 

  Purchase of treasury stock

$(4,692)

 

$-0-

 

 

 

 

  Proceeds from:

 

 

 

    Construction loans payable

2,414,880

 

1,445,817

    Mortgage loans payable

-0-

 

550,000

    Notes payable

-0-

 

-0-

 Principal payments on:

 

 

 

    Construction loans payable

(32,298)

 

(177,312)

    Mortgage loans payable

(282,143)

 

(816,866)

    Notes payable

(117,597)

 

(118,970)

Advances to related parties and affiliates, net

(5,000)

 

(14,750)

 

     

Net cash provided by financing activities

1,973,150

 

867,919

 

 

 

 

Net change in cash and cash equivalents

(1,184,556)

 

7,699

 

 

 

 

Cash and cash equivalents, beginning of period

3,057,736

 

858,175

 

 

 

 

Cash and cash equivalents, end of period

$1,873,180

 

$865,875

 

 

 

 

Cash paid during the period for interest

$1,780,702

 

$1,370,411

 

 

 

 

Cash paid during the period for income taxes

$209,681

 

$12,395

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

See accompanying notes.

8

 


 


 

 

 

 

FIRST HARTFORD CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1.    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 sales of real estate.

 

Principles of Consolidation

 

The accompanying condensed consolidated financial statements include the accounts of First Hartford Corporation (the “Company”), its wholly owned subsidiaries, and all other entities in which the Company has a controlling interest, including those where the Company has been determined to be a primary beneficiary of a variable interest entity or meets certain criteria as a sole general partner or managing member in accordance with the consolidation guidance of the Financial Accounting Standards Board Accounting Standards Codification.  As such, included in the condensed consolidated financial statements are the accounts of Rockland Place Apartments Limited Partnership and Clarendon Hill Somerville Limited Partnership.  The Company’s ownership percentage in these variable interest entity partnerships is nominal.  All significant intercompany balances and transactions have been eliminated.

 

Basis of Presentation

 

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. 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 U.S. 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 interim periods are not necessarily indicative of the results that may be expected for the entire year.  The condensed consolidated balance sheet as of April 30, 2012 was derived from the audited financial statements for the year then ended.  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, 2012.

 

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.

 

Change in Accounting Policy

 

The Company adopted, as required, Accounting Standards Update (“ASU”) 2009-17 Consolidations (Topic 810):  Improvements to Financial Reporting by Enterprises Involved with Variable Interest Entities effective May 1, 2010.  Under this ASU, the identification of a primary beneficiary of a variable interest entity (“VIE”) as 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.  Based on this updated guidance, the Company determined that it is no longer considered to be the primary beneficiary of CP Associates, LLC (“CP Associates”).  As a result of the initial application of this updated guidance, the Company 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.

 

9

 


 


 

 

 

 

FIRST HARTFORD CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1.     Business and Significant Accounting Policies (concluded):

 

Change in Accounting Policy (concluded)

 

The difference between the net amount derecognized 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 equity as of May 1, 2010.

 

Currently, there are no ASUs that the Company is required to adopt which are likely to have a material effect on its financial statements.

 

Net Loss Per Common Share

 

Basic net income (loss) per share amounts are determined using the weighted average number of shares of common stock outstanding during the reporting period.  Common stock options of 46,297 were anti-dilutive for the three month period ended July 31, 2012. Diluted earnings (loss) per share amounts include the weighted average outstanding common shares as well as dilutive common stock options of 105,263 for the three months ended July 31, 2011.

 

Financial Instruments and Fair Value

 

The Company’s financial instruments included cash and cash equivalents, accounts receivable, marketable securities, accounts payable, accrued expenses, and debt.  The fair values of accounts receivable, accounts payable and accrued expenses are estimated to approximate their carrying amounts because of their relative short-term nature.  In general, the carrying amount of variable rate debt approximates its fair value.  Further, the carrying amount of fixed rate debt approximates fair value since the interest rates on the debt approximates the Company’s current incremental borrowing rate.  Marketable securities consist of equity securities and are stated at fair value based on the last sale of the period obtained from recognized stock exchanges (i.e. Level 1).   There were no significant gross unrealized gains or temporary losses on such securities as of either July 31, 2012 or April 30, 2012.  Net unrealized gains of $32,040 are included in accumulated other comprehensive income.

 

2.    Consolidated Variable Interest Entities and Investments in Affiliated Partnerships:

The Company has consolidated both Rockland and Clarendon based on the express legal rights and obligations provided to it by the underlying partnership agreements and its control of their business activity.  The assets of these partnerships can only be used to settle their obligations and their liabilities for which creditors (or beneficial interest holders) do not have recourse to the general credit of the Company are shown parenthetically in the line items of the consolidated balance sheets.  A summary of the assets and liabilities of Rockland and Clarendon included in the Company’s condensed consolidated balance sheets follows:

 

       July 31, 2012

 

April 30, 2012

Real estate and equipment, net

$69,589,300

 

$70,112,601

Other assets

8,194,012

 

8,187,903

Total assets

77,783,312

 

78,300,504

Intercompany profit elimination

(3,129,016)

 

(3,156,971)

Total assets

$74,654,296

 

$75,143,533

 

 

 

 

Mortgages and other notes payable

$59,881,116

 

$60,089,702

Other liabilities

3,353,322

 

3,382,713

Total liabilities

$63,234,438

 

$63,472,415

 

 

10

 


 


FIRST HARTFORD CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

2.    Consolidated Variable Interest Entities and Investments in Affiliated Partnerships (concluded):

 

The Company accounts for its 50% ownership interest in CP Associates, LLC, Cranston Parkade, LLC and Dover Parkade, LLC under the equity method of accounting.  A summary of the operating results for these entities follows:

 

 

Three Months Ended

 

March 31, 2012

 

March 31, 2011

CP Associates, LLC

 

 

 

   Revenue

$778,243

 

$776,986

   Expenses

602,278

 

587,145

   Gain on derivatives

463,444

 

330,387

Net income

$639,409

 

$520,228

 

 

 

 

 

 

 

 

 

March 31, 2012

 

March 31, 2011

Cranston Parkade, LLC

 

 

 

    Revenue

$1,299,921

 

$1,224,115

    Expenses

980,519

 

1,000,181

Net income

$319,402

 

$223,934

 

 

 

 

 

July 31, 2012

 

July 31, 2011

Dover Parkade, LLC

 

 

 

    Revenue

$640,603

 

$598,760

    Expenses

510,335

 

484,711

Net income

$130,268

 

$114,049

 

For the years prior to May 1, 2009, the Company was committed to provide funding to CP Associates, LLC, Cranston Parkade LLC and Dover Parkade LLC. Although the Company no longer considers itself liable for their obligations 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 them.  The Company’s investment in them was recorded at cost and subsequently adjusted for their gains, losses and distributions.  The resulting carrying value of these investments is ($3,873,516) as of July 31, 2012 and ($4,098,351) as of April 30, 2012 is included in other liabilities.

 

3.     Income Taxes:

As of July 31, 2012 the Company has Federal net operating loss carryforwards totaling approximately $13,100,000 that are available to offset future Federal taxable income through various periods expiring between 2013 and 2027. The Company has concluded that it is more likely than not that it would realize any deferred tax asset,

4.     Litigation:

 

There has been no change in Litigation since April 30, 2012.

 

5.    Subsequent Events:

 

On September 5, 2012 a prepayment of $290,000 was made to Richard Kaplan that will apply to a final payment of approximate $754,000 due in 2015.

 

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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 risk 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 relationship 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

There have been no significant changes in the Company’s critical accounting policies from those included in Item 7 of its Annual Report on Form 10-K for the year ended April 30, 2012 under the subheading “Critical Accounting Policies and Estimates”. 

Results of Operations

Rental Income

Rental income increased approximately $142,000 for the three month period ended July 31, 2012 compared to the period ended July 31, 2011.  Approximately $105,000 was from housing and the balance from shopping centers. The increase in the shopping centers came from opening of stores in our Edinburg, Texas center.

Service Income

Service income for the three month periods ended July 31, 2012 and 2011 was approximately $2,192,000 and $910,000, respectively. Of the $1,282,000 increase, approximately $1,200,000 was from construction income. This construction activity was for a non-controlled entity which is not consolidated and thereby not eliminated. For the period ended July 31, 2011, the construction income was $972,000 but had to be eliminated in consolidation as it was for a controlled entity.

For the comparative periods there was a decrease in CVS Pharmacy fees of approximately $154,000. This is anticipated to be made up in future periods. Fees earned by Connolly and Partners (75% owned) amounted to $216,000.

Other Income

Included in other income is revenue of approximately $190,000 from the movie theater the company owns in North Adams, Massachusetts. This was not owned in the three months ended July 30, 2011.

Operating Cost and Expenses

Operating cost for the three months ended July 31, 2012 increased approximately $1,367,000 over the three months ended July 31, 2011. Of this increase, $872,000 was from construction cost and $196,000 was cost of running the movie theater.

 

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Item 2.  MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
              OPERATIONS (continued):

Results of Operation (concluded):

Interest Expense

Interest expense for the three months ended July 31, 2012 decreased approximately $136,000 which was a result of the interest rate reduction the Company received from the mortgage holder for the Edinburg, Texas shopping center.

Equity in Earnings of Unconsolidated Subsidiaries

Earnings for the three months ended July 31, 2012 decreased approximately $426,000. At April 30, 2012 the loss in CP Associates LLC was due to an unfavorable change in the fair value of derivative liability. However, the loss was reduced by $400,000 for the Company’s share of losses in excess of it’s commitment to provide additional funding.  No income will be recognized until such unrecognized losses are recovered. At July 31, 2012 approximately $320,000 of that loss was recognized.

Income Taxes

The Company has significant net operating loss carryforwards, so it will likely not be required to pay income taxes in the near term.

Capital Resource and Liquidity

The Company ended the period with approximately $2,852,000 of unrestricted cash, cash equivalents and marketable securities. The unrestricted cash and cash equivalents includes approximately $747,000 belonging to VIE’s (Rockland Place, LP and Clarendon Hill Somerville, LP).  Funds received from CVS Pharmacy, which are to be paid out in connection with CVS developments, amounted to approximately $332,000 and are included in restricted cash and cash equivalents.

In August and September 2012, the Company received the balance of the capital contributions due ($5,557,737) and paid off the $2,900,000 balance of the bridge loan.

The Company believes it has sufficient cash and cash resources to fund operations and debt maturities (approximately $2,000,000 (plus the $2,900,000 above)) in the next twelve months without any new bank borrowings.

Item 3 QUANTATIVE AND QUALLITATIVE DISCLOSURES ABOUT MARKET RISK

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

Item 4.  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 Chief Financial Officer, 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 Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls

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Item 4.  CONTROLS AND PROCEDURES (concluded):      

Evaluation of Disclosure Controls and Procedures (concluded);

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 effective as of the end of the period covered by this report.  Notwithstanding weaknesses in our control environment, as of July 31, 2012, 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.

PART II               OTHER INFORMATION

Item 1.                  LEGAL PROCEEDINGS

                                There has been no change in litigation since April 30, 2012.

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.                  MINE SAFETY DISCLOSURES

                                Not applicable

Item 5.                  OTHER INFORMATION

                                None

 

 

 

 

 

 

 

 

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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.

 

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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 5, 2012                 

                                                               

Date

Neil H. Ellis President and

 

Chief Executive Officer

 

 

 

/s/ Stuart I. Greenwald

                October 5, 2012               

                                                               

Date

Stuart I. Greenwald Treasurer

 

and Chief Financial Officer      

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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