FIRST HARTFORD CORP - 10-Q Quarterly Report

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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
F O R M 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

For Quarter Ended October 31, 2003 Commission File No. 0-8862

First Hartford Corporation
(Exact name of registrant as specified in its charter)

Maine		01-0185800
(State of Incorporation)		(I.R.S. Employer
		Identification No.)

149 Colonial Road, Manchester, Connecticut		06040
(Address of principal executive offices)		(Zip Code)

(860) 646-6555
(Registrant's telephone number, including area code)

Indicate by check mark whether the Company (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months, and (2) has been subject to such filing requirements for the past 90 days.

YES ________ NO X

As of November 8, 1997, 3,089,985 shares of common stock of the Company were outstanding.

	FIRST HARTFORD CORPORATION


	INDEX



PART I. FINANCIAL INFORMATION		PAGE


Item 1.	Financial Statements

	Independent Auditor’s Review Letter	1

	Consolidated Balance Sheets -
	October 31, 2003 and April 30, 2003	2 & 3

	Consolidated Statements of Operations
	For the Six Months and Three Months
	Ended October 31, 2003 and 2002.	4

	Consolidated Statements of Cash Flows
	For the Six Months and Three Months
	Ended October 31, 2003 and 2002.	5 & 6

	Notes to Consolidated Financial Statements	7

Item 2.	Management's Discussion and Analysis
	of Financial Condition and Results
	of Operations	8 & 9

PART II. OTHER INFORMATION

Item 6.	Exhibits and Reports on Form 8-K	10

	Signatures	10

Kostin, Ruffkess & Company, LLC
Business Advisors and Certified Public Accountants
Pond View Corporate Center
76 Batterson Park Road
Farmington, CT 06032

Main Line:   (860) 678-6000
Toll Free:    (800) 286-KRCO
Fax:           (860) 678-6110
Web:           www.kostin.com

INDEPENDENT ACCOUNTANTS' REPORT

We have reviewed the accompanying consolidated balance sheet of First Hartford Corporation and Subsidiaries as of October 31, 2003 and October 31, 2002, and the related consolidated statements of operations, and cash flows for the three months and six months then ended. These consolidated financial statements are the responsibility of the Company's management.

We conducted our review in accordance with Statements on Standards for accounting and Review Services issued by the American Institute of Certified Public Accountants. A review of interim financial information consists principally of applying analytical procedures to financial data and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with auditing standards generally accepted in the United States of America, the objective of which is the expression of an opinion regarding the consolidated financial statements taken as a whole. Accordingly, we do not express such an opinion.

Based on our review, we are not aware of any material modifications that should be made to the accompanying consolidated financial statements in order for them to be in conformity with accounting principles generally accepted in the United States of America.

/s/ Kostin, Ruffkess & Company, LLC

Farmington, Connecticut
December 12, 2003

PART I - FINANCIAL INFORMATION
Item 1. Financial Statements:

FIRST HARTFORD CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
Assets	October 31,			April 30,
		2003		2003


Real Estate and equipment:

Developed properties	$	21,060,577	$	21,017,365

Equipment and leasehold improvements		113,099		113,719

		21,173,676		21,131,084

Less accumulated depreciation and
amortization		2,864,629		2,632,870

		18,309,047		18,498,214
Properties under construction and
investment in undeveloped properties.		107,066		107,907

		18,416,113		18,606,121

Cash		4,635		29,051

Accounts receivable, less allowance
for doubtful accounts of $70,600
		1,162,615		1,187,296

Deposits, escrows, and prepaid and
deferred expenses		1,699,152		1,340,464

Investment in affiliates		308,507		1,132,908

Due from related parties and affiliates		361,951		192,505

Deferred Tax Assets		1,700,000		1,700,000

	$	23,652,973	$	24,188,345

PART I - FINANCIAL INFORMATION
FIRST HARTFORD CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)

		October 31,		April 30,
		2003		2003


Liabilities:

Mortgages, notes payable;
Construction Loans	$	919,761		474,627

Mortgages payable	$	22,778,788		23,349,955

Notes Payable:
Other		2,038,324		2,368,789

		25,736,873		26,193,371

Accounts payable		2,548,071		2,097,292
Accrued Liabilities		310,955		494,512
Other Liabilities		809,048		772,984
Deferred Income		320,054		265,467
Due to Related Parties and affiliated
partnerships		115,665		248,359

		29,840,666		30,071,985

Shareholders' equity (deficiency):

Common stock, $1 par; authorized
6,000,000 shares; issued 3,322,213
shares		3,322,213		3,322,213
Capital in excess of par		4,857,645		4,857,645
Deficit	(12,299,427)		(11,995,374)

	( 4,119,569)			(3,815,516)

Less 232,228 shares of common stock
held in treasury, at cost		2,068,124		2,068,124

	( 6,187,693)		( 5,883,640)

	$	23,652,973	$	24,188,345

FIRST HARTFORD CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME (LOSS)
FOR THE SIX MONTHS AND THREE MONTHS ENDED OCTOBER 31, 2003 AND 2002
(Unaudited)

	Six Months Ended				Three Months Ended
	October 31, 2003	October 31, 2002			October 31, 2003	October 31, 2002
Revenues, Including Related
Party Respectively:
Sale of Real Estate	$ 73,096	$ - 0 -			$ 73,096	$ -0-
Construction	104,947	274,762			17,655	81,080
Rental	1,908,020	1,712,098			976,752	826,191
Other	138,223	315,362			40,588	39,846
Non-Recurring Items	200,367	183,456			200,367	183,456
Equity in Earnings of
Joint Ventures	165,000	- 0 -			85,000	- 0 -

	2,589,653	2,485,678			1,393,458	1,130,573
Costs and Expenses:
Cost of Sales Real Estate	15,771			- 0 -	15,771			- 0
Construction	21,376			242,545	15,332			108,685
Operating, selling, general
and administrative	1,297,818	1,037,037			617,000			491,481
Interest	988,013	1,008,625			489,564	504,625
Depreciation and amortization	260,595	253,514			131,668	126,626
Real estate taxes	305,432	291,953			154,178	151,631

	2,889,005	2,833,674			1,423,513	1,383,048

Net Income Gain (Loss)	($ 299,352)	($ 347,996)			($ 30,055)	($252,475)
Income Tax Provisions	4,701	- 0 -			- 0 -	- 0 -

	($304,053)	( $347,996)			($ 30,055)	($252,475)

Income Per Share	($0.10)		($0.11)		($ 0.01)		($ 0.08)

Weighted Average Number of Common Shares Outstanding	3,089,985		3,089,985		3,089,985		3,089,985

FIRST HARTFORD CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE SIX MONTHS AND THREE MONTHS ENDED OCTOBER 31, 2003 AND 2002

Cash flows from operating		6 months ended				3 months ended
activities:	10/31/03		10/31/02		10/31/03		10/31/02

Net Loss		$(304,053)		$(347,996)		$(30,055)		$(252,475)

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

Depreciation		236,401		232,504		119,446		116,240
Amortization		24,194		21,010		12,222		10,386
Gain on sale of real estate		(57,325)		-0-		(57,325)		-0-
Changes in assets and liabilities:
Increase (Decrease) in:

Accounts and notes receivable		24,681		178,718		416,005		61,296

Deposits, escrows, prepaid and
deferred expenses	(398,653)			342,293	(225,978)			149,701
Accrued liabilities and
deferred income	(128,970)			500,789		(45,726)		672,740
Other liabilities		36,064		41,904		(18,176)		41,904

(Increase) Decrease in:

Acct's payable		450,779	( 544,750)			(7,487)		(281,294)


Net cash provided by (used in)
operating activities	(116,882)			424,472	162,926			518,498

Cash flow from investing activities:

Return of Invested Capital		824,401		-0-		69,500		-0-
Purchase of equipment & leasehold
improvements		(4,022)		(16,007)		(1,559)		(12,731)

Payments for:
Additions to properties
under construction	( 42,371)		( 297,211)			6,726	(102,107)

Net Cash provided by (used in)
investing activities:		778,008		(313,218)		74,667	(114,838)

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

FIRST HARTFORD CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS, CONTINUED
FOR THE SIX MONTHS AND THREE MONTHS ENDED OCTOBER 31, 2003 AND 2002

			6 months ended				3 months ended
		10/31/03		10/31/02		10/31/03		10/31/02

Cash flows from operating activities:

Proceeds from:
Construction Loans		$ 445,134				261,596
Mortgage Payable	$ -0-				313,034		-0-		31,517
Notes Payable			-0-		840,000		-0-		440,000

Principal payments on:
Mortgage Payable	( 571,167)				(268,110)	(240,577)		(139,251)
Notes Payable			( 330,465)		(1,654,298)		(239,022)		(1,604,298)
Gross Proceeds Sale of Real
Estate			73,096		-0-		73,096		-0-

Advances from Related Parties and
affiliated Parties		(302,140)			718,629	(106,924)			800,372


Net Cash Used in Financing
Activities		(685,542)			(50,745)	( 251,831)		(471,660)

Net Increase (Decrease) in cash
& Cash Equivalents		(24,416)			60,509	( 14,238)			(68,000)

Cash & Cash Equivalents
Beginning of Period			29,051		67,748		18,873		196,257


Cash & Cash Equivalents
End of Period		$	4,635	$	128,257	$	4,635	$	128,257

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

Summary of Significant Account Policies:

Description of business:

First Hartford Corporation (the Company) was incorporated in Maine in 1909, and is engaged in the purchase, development, ownership, management and sale of real estate. The Company extends credit to companies/tenants throughout the United States.

Principles of consolidation:

The accompanying financial statements include the accounts of the Company and its wholly-owned subsidiaries, including partnerships in which the Company is a majority owner or has substantial control. All significant intercompany transactions and accounts have been eliminated in the consolidated financial statements, including construction revenues and costs of development for the Company's own use (rental/future sale). The Company records its investment in partnerships in which it is not a majority owner on the equity method. Construction revenue and cost for minority interests are also eliminated.

Financial Statement Presentation:

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

Revenue recognition:

Since the Company is primarily involved in development for its own use (rental/future sale), construction revenue is recorded only upon sale of the property built for sale to third parties. Revenues from projects built for third parties are recognized on the percentage-of-completion method of accounting based on costs incurred to date in relation to total actual costs and estimated costs to complete. Revisions in costs and profit estimates are reflected in operations during the accounting period in which the facts become known. The Company provides for estimated losses on contracts in the year such losses become known. There are no properties built for sale to third parties during the reporting period.

Rental revenues are recognized as income under the operating method as the rentals become due. Other income includes management and service fees and interest income which is recognized over the period in which the service is provided or the interest is earned.

Interim Financial Information (Unaudited)

The interim financial statements of the Company for the six months ended October 31, 2003 and 2002 included herein, have been prepared by the Company, without audit, pursuant to the rules and regulations of the SEC. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principals generally accepted in the United States of America have been condensed or omitted pursuant to the rules and regulations relating to interim financial statements.

Item 2.      FIRST HARTFORD CORPORATION AND SUBSIDIARIES
                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 consolidated financial position and results of operations. This financial and business analysis should be read in conjunction with the 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 risks and uncertainties that are difficult to predict and may cause the Company’s actual results to differ materially from the results discussed in such forward-looking statements. Readers should consider that various factors including changes in general economic conditions, interest rates and availability of funds, nature of competition and relationships with key customers may affect the Company’s performance. The Company undertakes no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or other.

Result of Operations

The quarter ended Oct. 31, 2003 resulted in a loss of $30,055 or ($.01) per share compared to a loss of $252,475 or ($.08) per share.

This quarter has a $85,000 gain from earnings of unconsolidated subsidiaries. This gain was only picked up in prior years at year end. Sale of Real Estate this quarter netted $57,000. These two items resulted in .05 of the .07 improvement in performance this quarter.

Capital Resource and Liquidity

Highlighting cash flow and liquidity; (1) Received cash distributions this quarter of $139,500 from the Cranston and Dover Shopping Centers, (2) Borrowed in Construction Loan related to expanding the Plainfield Shopping Center, $253,000 against prior period cost. Received a $102,000 refund from the Sewer Authority in Mt. Olive for a participation of cost from another developer for utilizing our sewer line. This item reduced our cost basis.

On the outflow side, we had $750,000 invested in new properties at October 31, 2003. Upon the initial draw of the West Springfield Project (see subsequent events) approximately $225,000 was recovered. The balance which is for projects in New York State, New Hampshire and Maine, which may keep going forward or terminate. Management cannot make a determination at this time.

Subsequent Events

In November the Company purchased a shopping center in West Springfield, Mass. for $3,650,000. It contained a closed Kmart of approximately 83,000 square feet and 50,000 square feet of other retail (39,000 of which is occupied and paying rent). At the same time, we closed a Construction Loan of $7,235,000 with a take out for permanent financing. The loan provides 100% financing of the project. The permanent lender is charging 5.5% fixed interest for a 25 year loan callable after 3 years and gets 50% of the profits as additional interest.

The Company presently has three signed Leases for approximately 62,000 square feet of the Kmart building. Construction is presently under way on the new space which will also include a new facade on the other shop space.

On January 1, 2004 the Lease for the Katharine Gibbs School will be in effect. The Company will be entitled to 50% of the cash flow from that project.

PART II - OTHER INFORMATION

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

a) Exhibits:

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

Exhibit 31.1 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 32.1 Certification of Chief Financial, pursuant to 18 U.S.C. Section 1350

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

/s/ Stuart Greenwald

Stuart Greenwald
Treasurer
Chief Financial Officer
(Duly Authorized Officer,
Principal Financial and
Accounting Officer)

Date: December 12, 2003