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 2. Management's Discussion and Analysis of Financial Condition and Results of Operations (Concluded):
Item 3. Quantative and Quallitative Disclosures About Market Risk
Item 4. Controls and Procedures
EX-31 e31-1.htm
EX-31 e31-2.htm
EX-32 e32-1.htm

First Hartford Earnings 2013-07-31

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 esfhq5-7.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, 2013.

[  ]   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        No X 

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 X

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.

2,412,611 as of April 25, 2014

1

 

 

 


 

 

 

 

FIRST HARTFORD CORPORATION AND SUBSIDIARIES

INDEX

PART I.

FINANCIAL INFORMATION

PAGE

     

Item 1.

Financial Statements (Unaudited)

               

     

 

Condensed Consolidated Balance Sheets –
                July 31, 2013 and April 30, 2013

3 - 4

     

 

Condensed Consolidated Statements of Operations for the
                Three Months Ended July 31, 2013 and 2012

5

     

 

Condensed Consolidated Statements of Comprehensive Income (Loss) for the Three Months Ended July 31, 2013 and 2012

6

     

 

Condensed Consolidated Statements of Cash Flows for the
                Three Months Ended July 31, 2013 and 2012

7 - 8

     

 

Notes to Condensed Consolidated Financial Statements

9 - 13    

     

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

13 - 15

     

Item 3.

Quantitative and Qualitative Disclosures about Market Risk

15

     

Item 4.

Controls and Procedures

16

     

PART II.

OTHER INFORMATION

 

     

Item 1.

Legal Proceedings

16

     

Item 1A.

Risk Factors

16

     

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

16

     

Item 3.

Defaults Upon Senior Securities

16

     

Item 4.

Mine Safety Disclosures

16

     

Item 5.

Other Information

17

     

Item 6.

Exhibits

17

     

 

Signatures

18

     

 

Exhibits

19 - 22

 

2

 

 

 


 

 

 

 

 

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

 

July 31, 2013

 

April 30, 2013

 

     

Real estate and equipment:

 

 

 

  Developed properties (including $70,916,224 in July and $70,735,840 in April for VIEs)

$201,144,545

 

$202,050,054

Equipment and tenant improvements (including $2,168,750 in July and $2,084,461 in April for VIEs)  

3,567,196

 

3,458,587

 

204,711,741

 

205,508,641

 

 

 

 

Less accumulated depreciation and amortization (including $8,275,328 in July and $7,781,281 in April for VIEs)

32,935,168

 

31,695,129

 

171,776,573

 

173,813,512

 

     

Property under construction (including $391,905 in July and April for VIEs)

616,490

 

613,200

 

172,393,063

 

174,426,712

 

 

 

 

Cash and cash equivalents (including $760,512 in July and $2,052,427 in April for VIEs)

6,660,115

 

8,346,956

 

 

 

 

Cash and cash equivalents – restricted (including $425,574 in July and $412,518 in April for VIEs)

826,525

 

1,272,924

 

 

 

 

Marketable securities (including $2,491,205 in July and $1,424,072 in April for VIEs)

5,431,945

 

4,846,778

 

 

 

 

Accounts and notes receivable, less allowance for doubtful accounts of

$451,900 as of July 31, 2013 and $508,700 as of April 30, 2013 (including $75,960 in July and $126,408 in April for VIEs)

3,856,413

 

3,684,774

 

 

 

 

Other receivables

8,174,938

 

8,744,470

 

 

 

 

Deposits and escrows (including $2,710,095 in July and $2,824,785 in April for VIEs)

5,371,831

 

5,222,827

 

 

 

 

Prepaid expenses (including $306,570 in July and $178,762 in April for VIEs)

848,660

 

571,775

 

 

 

 

Deferred expenses (including $1,082,186 in July and $1,091,734 in April for  VIEs)

3,233,011

 

2,983,819

 

 

 

 

 

 

 

 

Investments in affiliates

100

 

100

 

 

 

 

Due from related parties and affiliates

165,106

 

165,188

 

     

Total Assets

$206,961,707

 

$210,266,323

 

See accompanying notes.

3

 

 

 


 

 

 

 

 

 

 

FIRST HARTFORD CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS (continued)
LIABILITIES AND EQUITY (DEFICIENCY)
(Unaudited)

 

 

July 31, 2013

 

April 30, 2013

Liabilities:

     

Mortgages and notes payable:

     

   Construction loans payable

$52,285,394

 

$52,847,132

   Mortgages payable (including $54,112,980 in July and $54,335,209 in April for VIEs)

145,664,093

 

146,327,723

   Notes payable (including $1,704,697 in July and in April for VIEs)

3,285,195

 

3,534,301

 

201,234,682

 

202,709,156

 

 

 

 

Accounts payable (including $617,635 in July and $434,309 in April for VIEs)

1,766,604

 

1,853,976

Other payables

6,315,198

 

6,832,367

Accrued liabilities (including $2,684,387 in July and $2,648,075 in April for VIEs)

4,730,018

 

4,866,430

Accrued cost of derivatives

2,931,591

 

3,656,380

Deferred income (including $247,856 in July and in April for VIEs)

478,722

 

455,475

Other liabilities

2,078,094

 

2,198,045

Due to related parties and affiliates (including $383,544 in July and $377,775 in April for VIEs)

455,444

 

449,757

 

219,990,353

 

223,021,586

 

 

 

 

Equity (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; outstanding 2,414,925 shares as of  July 2013 and 2,416,825 as of April 2013

3,298,609

 

3,298,609

Capital in excess of par

5,198,928

 

5,198,928

Accumulated deficit

(22,008,917)

 

(22,553,780)

Accumulated other comprehensive income (loss)

(27,886)

 

146,666

Treasury stock, at cost, 883,684 and 881,784 shares as of July 31, 2013 and
    April 30, 2013, respectively

 (4,957,859)

 

(4,952,574)

Total First Hartford Corporation

(18,497,125)

 

(18,862,151)

Noncontrolling interests

5,468,479

 

6,106,888

 

 

 

 

Total Shareholders' Equity (Deficiency)

(13,028,646)

 

(12,755,263)

 

 

 

 

Total Liabilities and Shareholders' Equity (Deficiency)

$206,961,707

 

$210,266,323

 

 

 

See accompanying notes.

4

 

 

 


 

 

 

 

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

 

Three Months Ended

 

July  31, 2013

 

July  31, 2012

Operating revenues:

 

 

(Restated)

       

  Rental income

$6,906,652

 

$6,944,501

  Service income

995,514

 

2,086,471

  Sales of real estate

1,812,596

 

-0-

  Other income

325,160

 

243,471

 

10,039,922

 

9,274,443

 

 

 

 

Operating costs and expenses:

 

 

 

  Rental expenses

4,556,621

 

4,407,640

  Service expenses

730,744

 

1,440,058

  Cost of real estate sales

1,199,901

 

-0-

  Selling, general and administrative expenses

1,163,187

 

1,009,073

 

7,650,453

 

6,856,771

 

 

 

 

Income from operations

2,389,469

 

2,417,672

 

 

 

 

Non-operating income (expense):

 

 

 

  Interest expense

(2,705,143)

 

(2,733,315)

  Other income

80,000

 

79,780

  Gain (loss) on derivatives

724,789

 

(445,441)

  Equity in earnings (losses) of unconsolidated subsidiaries

164,951

 

108,634

 

(1,735,403)

 

(2,990,342)

 

     

Income (loss) before income taxes

654,066

 

(572,670)

 

 

 

 

Income taxes

23,422

 

8,517

 

 

 

 

Consolidated net income (loss)

630,644

 

(581,187)

 

 

 

 

Net (income) loss attributable to noncontrolling interests

(85,781)

 

201,809

 

 

 

 

Net income (loss) attributable to First Hartford Corporation

$544,863

 

$(379,378)

 

 

 

 

Net income (loss) per share – basic

$0.23

 

$(0.16)

 

 

 

 

Net income (loss) per share – diluted

$0.21

 

$(0.16)

 

 

 

 

Shares used in basic per share computation

2,414,925

 

2,419,802

 

 

 

 

Shares used in diluted per share computation

2,572,333

 

2,419,802

 

See accompanying notes.

5

 

 


 

 

 

 

 

 

 

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

 

 

 

Three Months Ended

 

July  31, 2013

 

July 31, 2012

 

   

(Restated)

       

Consolidated net income (loss)

$630,644

 

$(581,187)

 

 

 

 

Other comprehensive income (loss), net of income taxes:

 

 

 

    Unrealized gain (loss) on marketable securities

(448,390)

 

82,062

 

 

 

 

    Other comprehensive income (loss)

182,254

 

(499,125)

 

 

 

 

Amounts attributable to noncontrolling interests:

 

 

 

    Net (loss) income

(85,781)

 

178,989

    Unrealized gain on marketable securities

273,839

 

27,137

 

     

 

188,058

 

206,126

 

 

 

 

Comprehensive income (loss)  attributable to First Hartford Corporation

$370,312

 

$(292,999)

 

 

 

 

 

See accompanying notes.

6

 

 


 

 

 

 

 

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

 

Three Months Ended

 

July 31, 2013

 

July 31, 2012

 

   

(Restated)

Operating activities:

     

 

 

 

 

  Consolidated net income (loss)

$630,644

 

$(581,187)

 

 

 

 

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

 

 

 

       Equity in earnings of unconsolidated subsidiaries, net of distributions of

           $45,000 in 2013 and $43,500 in 2012

(119,951)

 

(65,135)

       Gain on sale of property

(612,695)

 

-0-

       Depreciation

1,276,773

 

1,305,730

       Amortization

111,692

 

132,543

 

 

 

 

  Changes in operating assets and liabilities:

 

 

 

       Accounts, notes and other receivables

397,893

 

1,783,385

       Deposits and escrows

(149,004)

 

(295,049)

       Prepaid expenses

(276,885)

 

(201,446)

       Deferred expenses

(360,884)

 

(237,964)

       Cash and cash equivalents – restricted

446,399

 

112,475

       Accrued liabilities

(136,412)

 

(362,634)

       Accrued cost of derivatives

(724,789)

 

445,441

       Deferred income

           23,247

 

174,305

       Accounts and other payables

(604,539)

 

(2,979,063)

 

 

 

 

Net cash provided by operating activities

(98,511)

 

(768,599)

 

     

Investing activities:

     

  Investments in marketable securities

(1,033,557)

 

(666,734)

  Purchase of equipment and tenant improvements

(108,609)

 

(300,790)

  Proceeds from sale of real estate

1,812,596

 

-0-

  Consolidation of formerly nonconsolidated entity

-0-

 

(11,409)

  Additions to developed properties and properties under construction

(334,416)

 

(1,441,767)

 

 

 

 

  Net cash used by investing activities

336,014

 

(2,420,700)

 

 

See accompanying notes.

7

 

 

 


 

 

 

 

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

(Unaudited)

 

Three Months Ended

 

July 31, 2013

 

July 31, 2012

 

   

(Restated)

Financing activities:

 

 

 

  Distributions to noncontrolling interests

$(450,354)

 

$(198,569)

  Purchase of treasury stock

(5,285)

 

(4,692)

 

 

 

 

  Proceeds from:

 

 

 

    Construction loans payable

-0-

 

2,414,880

 Principal payments on:

 

 

 

    Construction loans payable

(561,738)

 

(32,298)

    Mortgage loans payable

(663,630)

 

(593,459)

    Notes payable

(249,106)

 

(117,597)

Advances to related parties and affiliates, net

5,769

 

5,044

 

     

Net cash provided by financing activities

(1,924,344)

 

1,473,309

 

 

 

 

Net change in cash and cash equivalents

(1,686,841)

 

(1,715,990)

 

 

 

 

Cash and cash equivalents, beginning of period

8,346,956

 

6,599,325

 

 

 

 

Cash and cash equivalents, end of period

$6,660,115

 

$4,883,335

 

 

 

 

Cash paid during the period for interest

$2,696,086

 

$2,329,781

 

 

 

 

Cash paid during the period for income taxes

$183,329

 

$12,895

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

See accompanying notes.

8

 

 

 


 

 

 

 

FIRST HARTFORD CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1.   Business and Significant Accounting Policies:

 

Business

 

First Hartford Corporation was incorporated in Maine in 1909 and is engaged in the purchase, development, ownership, management and sale of real estate, all of which is considered a single segment.  The Company has a second segment “Fee for Service” in which the Company is engaged as a preferred developer for CVS. (see Service Income to follow).

 

Principles of Consolidation

 

The accompanying unaudited 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 financial 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 unaudited 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 8.03 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 accrued 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, 2013 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, 2013.

 

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.

 

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

9

 

 


 

 

 

 

 

 

 

 

FIRST HARTFORD CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1.   Business and Significant Accounting Policies (concluded):

 

Net Income (Loss) Per Common Share

Basic 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 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).

       

      In the three month period ended July 31, 2013, 102,941 dilutive shares were added to the weighted number of shares outstanding to calculate the diluted net income per share. Common stock options of 46,297 for the period ended July 31, 2012, were anti-dilutive and not utilized in the calculation.

 

Financial Instruments and Fair Value

 

The Company’s financial instruments include 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).  Net unrealized loss of $(27,886) as of July 31, 2013 (gains of $146,666 as of April 30, 2013) are included in accumulated other comprehensive (loss) income.

 

2.   Restatement

 

The Company has restated its July 31, 2012 consolidated financial statements by adding three joint ventures into its consolidated results.  Upon reanalyzing its agreements, it was determined that the Company was the controlling partner of the ventures which triggers a requirement to consolidate.  The ventures are:

 

(1) Cranston Parkade, LLC which owns a retail shopping center 259,600 sq. ft.

(2) CP Associates, LLC which owns two 60,000 sq. ft commercial buildings plus land leased to a third party.

(3) Hartford Lubbock Limited Partnership which owns a retail shopping center 160,555 sq. ft.

(4) Trolley Barn Associates which owns approximately 7 acres of vacant land.

 

The Company owns 50% of (1), (2) & (4) and 2% of (3) and formerly accounted for them on the equity method. Previously, the investment in Trolley Barn Associates, which is 50% supported by the Company, was not considered material and was not consolidated.  The advances were considered loans.  The Company has determined that Trolley Barn qualifies as a Variable Interest Entity (VIE) and is consolidated as required.

 

 

 

 

10

 

 


 

 

 

 

 

 

 

 

FIRST HARTFORD CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

2.   Restatement

 

The effects on the Company’s previously issued financial statements are summarized as follows:

Balance Sheet July 31, 2012

 

 

Previously
Reported

 

Increase
(Decrease)

 

Restatement

 

 

 

 

 

 

Real Estate and Equipment Net

$133,853,206

 

$42,061,785

 

$175,914,991

Cash

2,205,525

 

3,415,226

 

5,620,751

Investment in Marketable Securities

978,642

 

1,777,117

 

2,755,759

Accounts and notes receivable

2,281,215

 

2,087,651

 

4,368,866

Other receivable

                    6,386,053

 

-0-

 

6,386,053

Deposits, escrows & prepaid & deferred expenses net

10,115,867

 

2,568,475

 

12,684,342

Investment in affiliate

9,665

 

(9,665)

 

-0-

Due from related parties and affiliates

524,513

 

(357,254)

 

167,259

Total Assets

$156,354,686

 

$51,543,335

 

$207,898,021

 

 

 

 

 

 

Mortgage & notes payables

$144,534,385

 

$62,955,131

 

$207,489,516

Payables and accrued liabilities

9,550,780

 

1,261,146

 

10,811,926

Accrued cost of derivatives

-0-

 

4,458,483

 

4,458,483

Deferred income

665,328

 

(10,345)

 

654,983

Other liabilities

3,873,516

 

(1,484,733)

 

2,388,783

Due  to related parties

104,552

 

329,536

 

434,088

Total liabilities

158,728,561

 

67,509,218

 

226,237,779

Stockholders Deficit

(2,373,875)

 

(15,965,883)

 

(18,339,758) 

Total Liabilities and Shareholder Deficit

$156,354,686

 

$51,543,335

 

$207,898,021

 

Statement of Operations – Three Months Ended July 31, 2012

 

         

 

Previously
Reported

 

Increase
 (Decrease)

 

Restatement

 

 

 

 

 

 

Revenues

$6,969,687

 

$2,304,756

 

$9,274,443

Operating cost

5,891,838

 

964,933

 

6,856,771

Income from operations

1,077,849

 

1,339,823

 

2,417,672

Interest expenses

(1,776,099)

 

(957,216)

 

(2,733,315)

Other Income

79,780

 

-0-

 

79,780

Gain (Loss) on Derivatives

-0-

 

(445,441)

 

(445,441)

Equity in earnings of unconsolidated subsidiaries

365,720

 

(257,086)

 

108,634

Loss before income tax

(252,750)

 

(319,920)

 

(572,670)

Income Taxes

8,017

 

500

 

8517

Consolidated Net Loss

(260,767)

 

(320,420)

 

(581,187)

Net (income) loss attributable to non-controlling interest

235,445

 

(33,636)

 

201,809

Net Loss attributable to First Hartford

$(25,322)

 

$(354,056)

 

$(379,378)

 

11


 

 

 

 

FIRST HARTFORD CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

2.   Restatement  (concluded):

 

The increased loss attributable to the Company for the three months ended July 31, 2012 was mainly due to differences in accounting between equity method and consolidation.

 

3.   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 that 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, 2013

 

April 30, 2013

 

 

 

 

Real estate and equipment, net

$67,826,837

 

$68,084,169

Other assets

7,826,572

 

8,096,778

Total assets

75,653,409

 

76,180,947

Intercompany profit elimination

(3,017,192)

 

(3,045,149)

Total assets

$72,636,217

 

$73,135,798

 

 

 

 

Mortgages and other notes payable

$55,817,677

 

$56,039,906

Other liabilities

3,529,234

 

3,330,240

Total liabilities

$59,346,911

 

$59,370,146

 

The Company accounts for its 50% ownership interest in Dover Parkade, LLC under the equity method of accounting.  A summary of the operating results for this entity follows:

 

 

Three Months Months Ended

 

July 31

 

2013

 

2012

 

     

Dover Parkade, LLC

     

     Revenue

$768,582

 

$640,603

     Expenses

528,678

 

510,335

Net income

$239,904

 

$130,268

 

 

4.   Income Taxes:

As of July 31, 2013 the Company has Federal net operating loss carryforwards totaling approximately $15,400,000 that are available to offset future Federal taxable income through various periods expiring between 2016 and 2028. The Company has concluded that it is more likely than not that it will not realize any deferred income tax assets in the near term.

12

 


 

 

 

 

 

 FIRST HARTFORD CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

5.   Litigation:

 

There has been no change in Litigation since April 30, 2013.

 

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, results of operations and cash flows.  This 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 constitute “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 tenants 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, 2013 under the subheading “Critical Accounting Policies and Estimates”. 

Rental Income:

Rental Income by type of tenant follows:

 

Three Months Ended

 

July 31

 

2013

 

2012

       

Residential

$2,734,445

 

$2,739,144

Commercial

4,172,207

 

  4,205,357

 

$6,906,652

 

$6,944,501

Service Income

 

Three Months Ended

 

July 31

 

2013

 

2012

Construction services

-0-

 

$1,199,558

Management fees

117,166

 

151,697

Preferred developer fees

878,348

 

735,216

 

995,514

 

2,086,471

13

 

 


 

 

 

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

Results of Operations (continued):

Sales of Real Estate

In the three month period ended July 31, 2013, the Company sold two parcels of real estate. A parcel in Houston, Texas was sold to Aldi Supermarkets for $1,220,000. The other sale was for an outparcel in the Edinburg shopping center in Edinburg, Texas for approximately $592,000.

Other Income

Revenue from the movie theater in North Adams, Massachusetts, was approximately $254,000 and $190,000 for the three month periods ended July 31, 2013 and 2012, respectively.

Operating Cost and Expenses

Rental Expenses

 

Three Months Ended

 

July 31

 

2013

 

2012

Residential

$2,330,421

 

$2,276,072

Commercial

2,225,200

 

  2,131,568

 

$4,555,621

 

$4,407,640

Service Expenses

Included in service expense in the period ended July 31, 2012, is approximately $821,000 of construction costs. In the period ended July 31, 2013, there were no construction costs.  All remaining service expense, other than the construction cost, is cost of the preferred development program.

Selling, General and Administrative

Selling, general and administrative expenses increased approximately $154,000 on a period over period basis. The increase was mainly due to salary and medical insurance increases.

Non-operating Income (Expense)

Interest Expense

Interest expense breaks out as follows:

 

Three Months Ended

 

July 31

 

2013

 

2012

Commercial

$1,993,489

 

$1,978,205

Residential

      687,467

 

     716,942

Other

       24,187

 

        38,168

 

$2,705,143

 

$2,733,315

14

 

 

 


 

 

 

 

 

 

 

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

Results of Operations (concluded):

Equity in Earnings of Unconsolidated Subsidiary

Equity in earnings of the unconsolidated subsidiary increased approximately $56,000 on a period over period basis for the three months ended July 31, 2013.  During the same periods the amounts distributed from a 50% owned investee were higher than the prior periods by approximately $12,500. Such distributions are in excess of net assets of the 50% owned investee since its accumulated net losses (including significant amounts for depreciation, amortization and gain or losses from derivatives which are noncash) have exceeded capital contributions.

While the Company has a policy of recording distributions in excess of basis as income, it does not control the rate of distributions of the investee partnership. Cash flow in excess of distribution is held at the partnership level.  Please refer to the financial statements of the Company’s investee partnerships which are included in the Company’s Form 10-K for the year ended April 30, 2013.

Income Taxes

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

Capital Resource and Liquidity

At July 31, 2013, the Company had approximately $12,092,000 of unrestricted cash, cash equivalents and marketable securities. This includes approximately $9,242,000 belonging to partnership entities in which the Company’s financial interests range from .01% (VIEs) to 50%.  Funds received from CVS , which are to be paid out in connection with CVS developments, amounted to approximately $401,000 and tenant security deposits held by VIEs of approximately $425,000 are included in restricted cash and cash equivalents.

The Company believes it has sufficient cash and cash resources to fund operations and debt maturities in the next fiscal year without any new bank borrowings through July 31, 2014. Borrowings for new construction loans or property purchases are unclear at this time.

Item 3QUANTATIVE AND QUALLITATIVE DISCLOSURES ABOUT MARKET RISK

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

 

 

 

 

 

15

 

 

 


 

 

 

 

 

 

 

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 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 the 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, 2013, 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, 2013.

   
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

 

 

 

16

 

 

 


 

 

 

 

 

 

 

 

 

Item 5.

 OTHER INFORMATION

   
 

None

 

SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

   
 

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 and Chief Financial Officer, pursuant to 18 U.S.C. Section 1350.

 

17

 


 

 

 


 

 

 

 

 

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

                May 5, 2014               

                                                               

                      Date

Neil H. Ellis President and

 

Chief Executive Officer

 

 

 

/s/ Stuart I. Greenwald

                May 5, 2014             

                                                                 

                      Date

Stuart I. Greenwald Treasurer

 

and Chief Financial Officer          

18