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 ex31-1.htm
EX-31 ex31-2.htm
EX-32 ex32.htm

First Hartford Earnings 2013-10-31

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 esfhoctober.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 October 31, 2013.

[  ]   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:    

                          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
                October 31, 2013 and April 30, 2013

 

3 - 4

 

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

 

5

 

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

 

6

 

Condensed Consolidated Statements of Cash Flows for the
                Three and Six Months Ended October  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

 

14 - 17

Item 3.

Quantitative and Qualitative Disclosures about Market Risk

 

17

Item 4.

Controls and Procedures

 

17

PART II.

OTHER INFORMATION

 

 

Item 1.

Legal Proceedings

 

18

Item 1A.

Risk Factors

 

18

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

 

18

Item 3.

Defaults Upon Senior Securities

 

18

Item 4.

Mine Safety Disclosures

 

18

Item 5.

Other Information

 

18

Item 6.

Exhibits

18

 

 

Signatures

19

 

 

Exhibits

20 - 22

 

2

 


 

 

 

 

 

 

 

 

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

ASSETS

 

October  31, 2013

 

April 30, 2013

 

     

Real estate and equipment:

 

 

 

Developed properties (including $71,019,095 in October and $70,735,840 in April for VIEs)

$200,480,139

 

$202,050,054

Equipment and tenant improvements (including $2,217,558 in October and $2,084,461 in April for VIEs) 

3,586,296

 

3,458,587

 

204,066,435

 

205,508,641

Less accumulated depreciation and amortization (including $8,772,935 in October and $7,781,281 in April for VIEs)

34,203,340

 

31,695,129

 

169,863,095

 

173,813,512

 

 

 

 

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

613,037

 

613,200

 

170,476,132

 

174,426,712

 

 

 

 

Cash and cash equivalents (including $709,964 in October and $2,052,427 in April for VIEs)

6,236,211

 

8,346,956

 

 

 

 

Cash and cash equivalents – restricted (including $420,861 in October and $412,518 in April for VIEs)

551,135

 

1,272,924

 

 

 

 

Marketable securities (including $2,465,312 in October and $1,424,072 in April for VIEs)

5,058,952

 

4,846,778

 

 

 

 

Accounts and notes receivable, less allowance for doubtful accounts of

$212,900 as of October 31, 2013 and $508,700 as of April 30, 2013
(including $150,527 in October and $126,408 in April for VIEs)

4,405,443

 

3,684,774

 

 

 

 

Other receivables

13,056,354

 

8,744,470

 

 

 

 

Deposits and escrows (including $2,363,348 in October and $2,824,785 in April for VIEs)

5,363,896

 

5,222,827

 

 

 

 

Prepaid expenses (including $374,210 in October and $178,762 in April for VIEs)

1,100,235

 

571,775

 

 

 

 

Deferred expenses (including $1,072,667 in October and $1,091,734 in April for  VIEs)

3,374,952

 

2,983,819

 

 

 

 

Investments in affiliates

100

 

100

 

 

 

 

Due from related parties and affiliates

165,106

 

165,188

 

     

Total Assets

$209,788,516

 

$210,266,323

See accompanying notes.

3

 

 

 


 

 

 

 

 

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

LIABILITIES AND EQUITY (DEFICIENCY)

 

 

October 31, 2013

 

April 30, 2013

Liabilities:

     

Mortgages and notes payable:

     

   Construction loans payable

$51,231,893

 

$52,847,132

   Mortgages payable (including $53,888,286 in October and $54,335,209 in April
for VIEs)

146,938,755

 

146,327,723

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

1,704,697

 

3,534,301

 

199,875,345

 

202,709,156

 

 

 

 

Accounts payable (including $766,488 in October and $434,309 in April for VIEs)

1,862,592

 

1,853,976

Other payables

10,782,793

 

6,832,367

Accrued liabilities (including $2,772,058 in October and $2,648,075 in April for VIEs)

5,240,681

 

4,866,430

Accrued cost of derivatives

2,722,363

 

3,656,380

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

566,232

 

455,475

Other liabilities

2,022,408

 

2,198,045

Due to related parties and affiliates (including $937,384 in October and $377,775
in April for VIEs)

463,111

 

449,757

 

223,535,525

 

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 October 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

(22,282,449)

 

(22,553,780)

Accumulated other comprehensive income (loss)

22,147

 

146,666

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

 (4,957,859)

 

(4,952,574)

Total First Hartford Corporation

(18,720,624)

 

(18,862,151)

Noncontrolling interests

4,973,615

 

6,106,888

 

 

 

 

Total Shareholders’ Equity (Deficiency)

(13,747,009)

 

(12,755,263)

 

 

 

 

Total Liabilities and Shareholders’ Equity (Deficiency)

$209,788,516

 

$210,266,323

 

                                                                                                                                               

See accompanying notes.

4

 

 

 


 

 

 

 

 

 

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

 

Three Months Ended

 

Six Months Ended

 

 

Oct. 31, 2013

 

Oct. 31, 2012

 

Oct. 31, 2013

 

Oct. 31, 2012

 

 

 

 

(Restated)

 

 

 

(Restated)

 

Operating revenues:

 

 

 

 

 

 

 

 

  Rental income

$7,629,233

 

$7,072,851

 

$14,535,885

 

$14,017,352

 

  Service income

1,573,780

 

1,939,596

 

2,569,294

 

4,026,067

 

  Sales of real estate

1,090,000

 

-0-

 

2,902,596

 

-0-

 

  Other income

328,680

 

189,925

 

653,840

 

433,396

 

 

10,621,693

 

9,202,372

 

20,661,615

 

18,476,815

 

 

 

 

 

 

 

 

 

 

Operating costs and expenses:

 

 

 

 

 

 

 

 

  Rental expenses

5,009,589

 

4,851,918

 

9,566,210

 

9,259,558

 

  Service expenses

958,026

 

1,221,500

 

1,688,770

 

2,661,558

 

  Cost of real estate sales

1,070,399

 

-0-

 

2,270,300

 

-0-

 

  Selling, general and administrative expenses

1,317,297

 

1,075,953

 

2,480,484

 

2,085,026

 

 

8,355,311

 

7,149,371

 

16,005,764

 

14,006,142

 

 

 

 

 

 

 

 

 

 

Income from operations

2,266,382

 

2,053,001

 

4,655,851

 

4,470,673

 

 

 

 

 

 

 

 

 

 

Non-operating income (expense):

 

 

 

 

 

 

 

 

  Interest expense

(2,782,186)

 

(2,740,728)

 

(5,487,329)

 

(5,474,043)

 

  Other income

121,447

 

93,245

 

201,447

 

173,025

 

  Loss on defeasance

(243,602)

 

-0-

 

(243,602)

 

-0-

 

  Gain (loss) on derivatives

209,228

 

158,605

 

934,017

 

(286,836)

 

  Equity in earnings of unconsolidated subsidiaries

110,687

 

117,630

 

275,638

 

226,264

 

 

(2,584,426)

 

(2,371,248)

 

(4,319,829)

 

(5,361,590)

 

 

             

 

(Loss) income before income taxes

(318,044)

 

(318,247)

 

336,022

 

(890,917)

 

 

 

 

 

 

 

 

 

 

Income taxes

500

 

8,975

 

23,922

 

17,492

 

 

 

 

 

 

 

 

 

 

Consolidated net (loss) income

(318,544)

 

(327,222)

 

312,100

 

(908,409)

 

 

 

 

 

 

 

 

 

 

Net loss attributable to noncontrolling interests

45,012

 

98,333

 

(40,769)

 

300,142

 

 

 

 

 

 

 

 

 

 

Net income (loss)  attributable to First Hartford Corporation

$(273,532)

 

$(228,889)

 

$271,331

 

$(608,267)

 

 

 

 

 

 

 

 

 

 

Net (loss) income per share – basic

$(0.11)

 

$(0.09)

 

$0.11

 

$(0.25)

 

 

 

 

 

 

 

 

 

 

Net (loss) income per share – diluted

$(0.11)

 

$(0.09)

 

$0.11

 

$(0.25)

 

 

 

 

 

 

 

 

 

 

Shares used in basic per share computation

2,418,863

 

2,418,863

 

2,419,333

 

2,419,333

 

 

 

 

 

 

 

 

 

 

Shares used in diluted per share computation

2,418,863

 

2,418,863

 

2,576,584

 

2,419,333

 

See accompanying notes.

5

 


 

 

 

 

 

 

 

 

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

 

Three Months Ended

 

Six Months Ended

 

Oct. 31, 2013

 

Oct. 31, 2012

 

Oct. 31, 2013

 

Oct. 31, 2012

 

   

(Restated)

     

(Restated)

 

             

Consolidated net (loss) income

$(318,544)

 

$(327,222)

 

$312,100

 

$(908,409)

 

 

 

 

 

 

 

 

Other comprehensive income, net of income taxes:

 

 

 

 

 

 

 

    Unrealized (losses) gains on marketable securities

(1,545)

 

135,100

 

(449,935)

 

217,162

 

 

 

 

 

 

 

 

    Other comprehensive loss

(320,089)

 

(192,122)

 

(137,835)

 

(691,247)

 

 

 

 

 

 

 

 

Amounts attributable to noncontrolling interests:

 

 

 

 

 

 

 

  Net loss (income)

45,012

 

98,333

 

(40,769)

 

300,142

  Unrealized gain on marketable securities

51,577

 

41,626

 

325,416

 

68,763

 

 

 

 

 

 

 

 

 

96,589

 

139,959

 

284,647

 

368,905

               

Comprehensive Income (loss) attributable to First Hartford Corporation

$(223,500)

 

$(52,163)

 

$146,812

 

$(322,342)

 

 

 

 

 

See accompanying notes.

 

6

 

 


 

 

 

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

 

 

Six Months Ended

 

October 31, 2013

 

October 31, 2012

 

   

(Restated)

Operating activities:

     

  Consolidated net income (loss)

$312,100

 

$(908,409)

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

 

 

 

       Equity in earnings of unconsolidated subsidiaries, net of distributions of

           $100,000 in 2013 and $132,000 in 2012

(175,637)

 

(137,765)

       Gain on sale of property

(632,296)

 

-0-

       Depreciation

2,571,556

 

2,609,548

       Amortization

221,426

 

312,505

  Changes in operating assets and liabilities:

 

 

 

       Accounts, notes and other receivables

(5,032,553)

 

(341,619)

       Deposits and escrows

(141,069)

 

2,975,764

       Prepaid expenses

(528,460)

 

(281,031)

       Deferred expenses

(612,559)

 

(388,764)

       Cash and cash equivalents – restricted

721,789

 

8,484

       Accrued liabilities

374,251

 

(197,478)

       Accrued cost of derivatives

(934,017)

 

286,836

       Deferred income

          110,757

 

180,457

       Accounts and other payables

3,959,042

 

(1,752,364)

 

 

 

 

Net cash provided by operating activities

214,330

 

2,366,164

 

     

Investing activities:

     

  Distributions form affiliates

-0-

 

200,000

  Investments in marketable securities

(665,466)

 

(925,672)

  Purchase of equipment and tenant improvements

(127,709)

 

(491,193)

  Proceeds from sale of real estate

2,902,596

 

-0-

  Consolidation of formerly nonconsolidated entity

-0-

 

(11,409)

  Additions to developed properties and properties under construction

(763,567)

 

(2,245,004)

 

 

 

 

  Net cash provided by (used in) investing activities

1,345,854

 

(3,473,278)

 

 

See accompanying notes.

7

 


 

 

 

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

(Unaudited)

 

 

Six Months Ended

 

October 31, 2013

 

October 31, 2012

 

   

(Restated)

Financing activities:

 

 

 

  Contributions from noncontrolling interests – limited partners

$-0-

 

$5,066,943

  Distributions to noncontrolling interests

(845,269)

 

(649,466)

  Purchase of treasury stock

(5,285)

 

(8,312)

 

 

 

 

  Proceeds from:

 

 

 

    Construction loans payable

-0-

 

3,510,210

    Mortgage loans payable

59,630

 

-0-

 Principal payments on:

 

 

 

    Construction loans payable

(1,615,239)

 

(2,965,085)

    Mortgage loans payable

(1,278,202)

 

(1,197,464)

    Notes payable

-0-

 

(509,619)

Advances to related parties and affiliates, net

13,436

 

9,211

 

     

Net cash provided by financing activities

(3,670,929)

 

3,256,418

 

 

 

 

Net change in cash and cash equivalents

(2,110,745)

 

2,149,304

 

 

 

 

Cash and cash equivalents, beginning of period

8,346,956

 

6,599,325

 

 

 

 

Cash and cash equivalents, end of period

$6,236,211

 

$8,748,629

 

 

 

 

Cash paid during the period for interest

$5,393,468

 

$5,211,369

 

 

 

 

Cash paid during the period for income taxes

$133,829

 

$18,938

 

 

 

 

 

 

 

 

Debt refinancing:

 

 

 

    New mortgage loan

$6,200,000

 

 

    Debt reduced

(6,140,370)

 

 

    Net cash from refinancing

$59,630

 

 

 

 

 

 

 

 

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.

 

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. Diluted earnings (loss) per share amounts include the weighted average outstanding common shares as well as dilutive common stock options of 157,408 and 157,251 shares for the three and six month periods ended October 31, 2013. Common stock options of 104,193 and 75,236 for three and six month periods ended October 31, 2012 were anti-dilutive.

 

 

9

 


 

 

 

 

 

 

 

 

 

FIRST HARTFORD CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1.   Business and Significant Accounting Policies (concluded):

 

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 gains of $50,033 and $124,519 for the three and six month periods ended October 31, 2013 are included in accumulated other comprehensive income.

 

Segment Information

 

The factors used by the Company to identify reportable segments include differences in products and services and segregated operations within the Company. The first segment, “Real Estate Operations” participates in the purchase, development, management, ownership and the sale of real estate. Within its second segment, “Fee for Service”, the Company provides preferred developer services to CVS and Cumberland Farms Inc. in certain geographic areas. Summary financial information for the two reportable segments are approximately as follows:

 

 

Three Months Ended

 

Six Months Ended

 

October 31,

 

October 31,

 

2013

 

2012

 

2013

 

2012

 

 

 

 

 

 

 

 

Real Estate Operations

$9,172,000

 

$8,132,000

 

$18,334,000

 

$16,671,000

Fee for Service

1,450,000

 

1,070,000

 

2,328,000

 

1,806,000

Total

$10,622,000

 

$9,202,000

 

$20,662,000

 

$18,477,000

 

 

 

 

 

 

 

 

Operating Cost and Expense:

 

 

 

 

 

 

 

Real Estate Operations

$6,080,000

 

$5,289,000

 

$11,837,000

 

$10,517,000

Fee for Service

958,000

 

785,000

 

1,689,000

 

1,404,000

SGA

1,317,000

 

1,075,000

 

2,480,000

 

2,085,000

Total

$8,355,000

 

$7,149,000

 

$16,006,000

 

$14,006,000

 

 

All cost after operating expenses are cost of the real estate operation.

 

The only assets in the balance sheet belonging to the Fee for Service segment is restricted cash of approximately $139,000 on October 31, 2013 and $860,000 on April 30, 2013 and receivables of approximately  $8,124,000 on October 31, 2013 and $6,533,000 on April 30, 2013.

 

 

 

 

 

 

10

 


 

 

 

 

 

FIRST HARTFORD CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

2.   Restatement

 

The Company has restated its October 31, 2012 consolidated financial statements by adding four 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.

 

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

Balance Sheet October 31, 2012

 

 

  Previously
Reported
 

Increase
 (Decrease)

  Restatement

 

 

 

 

 

 

Real Estate and Equipment Net $133,901,099   $41,703,715   $175,604,814
Cash 6,378,412   3,211,623   9,590,035
Investment in Marketable Securities 1,092,735   2,057,062   3,149,797
Accounts and notes receivable 2,660,631   2,086,687   4,747,318
Other receivable  8,132,605   -0-   8,132,605
Deposits, escrows & prepaid & deferred expenses net 6,895,119   2,568,833   9,463,952
Investment in affiliate 9,665   (9,665)   -0-
Due from related parties and affiliates 529,729   (362,470)   167,259
Total Assets $159,599,995   $51,255,785   $210,855,780

 

 

 

 

 

 

Mortgage & notes payables $142,019,440   $62,636,589   $204,656,029
Payables and accrued liabilities 10,971,632   1,232,149   12,203,781
Accrued cost of derivatives -0-   4,299,878   4,299,878
Deferred income 743,460     (82,325)   661,135
Other liabilities 3,708,375   (1,392,222)   2,316,153
Due  to related parties 102,752   335,503   438,255
Total liabilities 157,545,659   67,029,572   224,575,231
Stockholders Deficit 2,054,336   (15,773,787)   (13,719,451) 
Total Liabilities and Shareholder Deficit $159,599,995   $51,255,785   $210,855,780

 

 

11


 

 

 

 

FIRST HARTFORD CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

2.       Restatement  (concluded):

 Statement of Operations – Three Months Ended October 31, 2012

 

           
  Previously Reported   Increase (Decrease)   Restatement

 

 

 

 

 

 

Revenues

$6,782,274   $2,420,098   $9,202,372

Operating cost

5,994,543   1,154,828   7,149,371

Income from operations

787,731   1,265,270   2,053,001

Interest expenses

(1,792,357)   (948,371)   (2,740,728)

Other Income

93,245   -0-   93,245

Gain (Loss) on Derivatives

-0-   158,605   158,605

Equity in earnings of unconsolidated subsidiaries

224,539   (106,909)   117,630

Loss before income tax

(686,842)   368,595   (318,247)

Income Taxes

117   8,858   8,975

Consolidated Net Loss

(686,959)   359,737   (327,222)

Net (income) loss attributable to non-controlling interest

358,608   (260,275)   98,333

Net Loss attributable to First Hartford

$(328,351)   $99,462   $(228,889)


Statement of Operations – Six Months Ended October 31, 2012

 

         

 

Previously Reported  

Increase (Decrease)

 

Restatement

 

 

 

 

 

 

Revenues

$13,751,961   $4,724,854   $18,476,815

Operating cost

11,886,381   2,119,761   14,006,142

Income from operations

1,865,580   2,605,093   4,470,673

Interest expenses

(3,568,456)   (1,905,587)   (5,474,043)

Other Income

173,025   -0-   173,025

Gain (Loss) on Derivatives

-0-   (286,836)   (286,836)

Equity in earnings of unconsolidated subsidiaries

590,259   (363,995)   226,264

Loss before income tax

(939,592)   48,675   (890,917)

Income Taxes

8,134   9,358   17,492

Consolidated Net Loss

(947,726)   39,317   (908,409)

Net (income) loss attributable to non-controlling interest

594,053   (293,911)   300,142

Net Loss attributable to First Hartford

$(353,673)   $(254,594)   $(608,267)

 

 

The increased profit or (loss) attributable to the Company for the three and six months ended October 31, 2012 was mainly due to differences in accounting between equity method and consolidation.

 

 

 

12

 


 

 

 

 

 

 

 

 

FIRST HARTFORD CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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:

 

October 31, 2013

 

April 30, 2013

 

 

 

 

Real estate and equipment, net

$67,452,952

 

$68,084,169

Other assets

7,552,395

 

8,096,778

Total assets

75,005,347

 

76,180,947

Intercompany profit elimination

(3,004,411)

 

(3,045,149)

Total assets

$72,000,936

 

$73,135,798

 

 

 

 

Mortgages and other notes payable

$55,592,983

 

$56,039,906

Other liabilities

3,774,539

 

3,330,240

Total liabilities

$59,367,522

 

$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 Ended

 

Six Months Ended

 

October 31, 2013

 

October 31, 2012

 

October 31, 2013

 

October 31, 2012

Dover Parkade, LLC

 

 

 

 

 

 

 

     Revenue

$646,891

 

$640,373

 

$1,415,473

 

$1,280,976

     Expenses

535,520

 

495,112

 

1,064,198

 

1,005,447

     Net income

$111,371

 

$145,261

 

$351,275

 

$275,529

 

 

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 ($2,022,408) as of October 31, 2013 and ($2,198,045) as of April 30, 2013 is included in other liabilities.

 

4.   Income Taxes:

As of October 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.

5.   Litigation:

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

13


 

 

 

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.

Results of Operations

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

 

Six Months Ended

 

October 31, 2013

 

October 31, 2012

 

October 31, 2013

 

October 31, 2012

 

 

 

 

 

 

 

 

     Residential

$2,790,893

 

$2,805,940

 

$5,525,338

 

$5,545,084

     Commercial

4,838,340

 

4,266,911

 

9,010,547

 

8,472,268

 

$7,629,233

 

$7,072,851

 

$14,535,885

 

$14,017,352

 

Service Income

 

 

Three Months Ended

 

Six Months Ended

 

October 31, 2013

 

October 31, 2012

 

October 31, 2013

 

October 31, 2012

 

 

 

 

 

 

 

 

Construction Services

-0-

 

$766,580

 

-0-

 

$1,966,138

Management Fees

124,052

 

102,554

 

241,218

 

254,251

Preferred developer Fees

1,449,728

 

1,070,472

 

2,328,076

 

1,805,688

 

$1,573,780

 

$1,939,606

 

$2,569,294

 

$4,026,077

 

           

 

 

 

 

 

 

 

 

14


 

 

 

 

 

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 October 31, 2013, the Company sold two outparcels from our shopping center in Edinburg, Texas for $1,090,000.  In the six months ended October 31, 2013, the Company sold a total of three outparcels in our Edinburg shopping center for a total of $1,682,000 as well as a parcel in Houston, Texas to Aldi Supermarkets for $1,220,000.

Other Income

Included in other income are the sales of a store in our North Adams shopping center selling beer and wine.  A small restaurant will be opened as part of the same facility.  The Company hopes to get a full liquor license in 2014.  The beer and wine portion opened in mid-September, 2013 and has sales revenue of approximately $119,000 to October 31, 2013.

Revenue from the movie theater in North Adams, Massachusetts, was approximately $144,000 and $398,000 for the three and six month periods ended October 31, 2013 and $134,000 and $324,000 for the three and six months of 2012 respectively.

Operating Cost and Expenses

Rental Expenses

 

Three Months Ended

 

Six Months Ended

 

October 31, 2013

 

October 31, 2012

 

October 31, 2013

 

October 31, 2012

 

 

 

 

 

 

 

 

     Residential

$2,585,320

 

$2,442,528

 

$4,915,741

 

$4,718,600

     Commercial

2,424,269

 

2,409,390

 

4,650,469

 

4,540,958

 

$5,009,589

 

$4,851,918

 

$9,566,210

 

$9,259,558

Service Expenses

Included in service expense in the three and six month period ended October 31, 2012, is approximately $786,000 and $1,404,000 of construction costs. In the period ended October 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

For the three and six month periods ended October 31, 2013 SG&A expenses increased approximately $241,000 and $395,000 respectively over the three and six month periods ended October 31, 2012.  Of that increase approximately $158,000 and $176,000 was due to operations (including certain startup cost) and cost of goods sold for the wine and beer store described above.  A major part of the balance was due to salary and medical insurance cost.

 

15


 

 

 

 

 

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

Results of Operations (concluded):

Non-operating Income (Expense)

Interest Expense

Interest expense breaks out as follows:

 

Three Months Ended

 

Six Months Ended

 

October 31, 2013

 

October 31, 2012

 

October 31, 2013

 

October 31, 2012

 

 

 

 

 

 

 

 

     Residential

$2,132,840

 

$2,012,538

 

$4,126,329

 

$3,990,743

     Commercial

637,840

 

698,376

 

1,325,307

 

1,415,318

     Other

11,506

 

29,814

 

35,693

 

67,982

 

$2,782,186

 

$2,740,728

 

$5,487,329

 

$5,474,043

Loss on Defeasance

Loss on Defeasance was caused by an early refinancing and repayment of the mortgage on the Plainfield Parkade.  Details of the refinances were included in a form 8-K filed on October 8, 2013.

Gain (Loss) on Derivatives

For the three and six month periods ended October 31, 2013 the Company recorded gains of $209,228 and $934,017 respectively.  Of that amount, 50% was reduced through the non-controlling interest.

Equity in Earnings of Unconsolidated Subsidiary

Equity in earnings of the unconsolidated subsidiary increased approximately $53,000 on a period over period basis for the six months ended October 31, 2013.  During the same periods the amounts distributed from a 50% owned investee were lower than the prior periods by approximately $125,000. 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.

 

16


 

 

 

 

 

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

Capital Resources and Liquidity

The Company ended the six month period of October 31, 2013 with approximately $11,295,000 of unrestricted cash, cash equivalents and marketable securities. This includes approximately $8,843,000 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 $130,000 and tenant security deposits held by VIEs of approximately $421,000 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 April 30, 2014. Borrowings for new construction loans or property purchases are unclear at this time.

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 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 October 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.

 

 

 

 

17


 

 

 

 

 

 

 

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

   
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.

 

18

 


 

 

 

 

 

 

 

 

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

                June 4, 2014                     

                                                               

                     Date  

Neil H. Ellis President and

   

Chief Executive Officer

   

 

   

/s/ Stuart I. Greenwald

                June 4, 2014               

                                                                 

                     Date   

Stuart I. Greenwald Treasurer

   

and Chief Financial Officer          

19