FIRST HARTFORD CORP - 10-Q Quarterly Report

For the transition period from ___________to ______________________________________
Commission file number _____________________________________________________________

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

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

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

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 X No

Amendment
____________________________________________________________________________

Amended effective November 15, 2002; compliance and phase-in details in Release No. 33-8128 (¶ 86,724), 67 F.R. 58480 Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act): Yes ___ No X

End of Amendment
____________________________________________________________________

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12,13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes X No

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date. 3,089,985 shares of common stock as of January 31, 2004.

FIRST HARTFORD CORPORATION
	INDEX

PART I. FINANCIAL INFORMATION		PAGE

Item 1.	Financial Statements

	Independent Auditor’s Review Letter	1

	Consolidated Balance Sheets -
	January 31, 2004 and April 30, 2003	2 & 3

	Consolidated Statements of Operations
	For the Nine Months and Three Months
	Ended January 31, 2004 and 2003.	4 & 5

	Consolidated Statements of Cash Flows
	For the Nine Months and Three Months
	Ended January 31, 2004 and 2003.	6 & 7

	Notes to Consolidated Financial Statements	8 & 9

Item 2.	Management's Discussion and Analysis
	Of Financial Condition and Results
	Of Operations	9 - 11

Item 3.	Quantitative and Qualitative Disclosures
	About Market Risk	11

Item 4.	Controls and Procedures	11

PART II. OTHER INFORMATION

Item 1.	Legal Proceedings	12

Item 2.	Changes in Securities, use of Proceeds
	And Issuer Purchases of Equity Securities	12

Item 3.	Defaults Upon Senior Executives	12

Item 4.	Submission of Matters to a Vote
	Of Security Holders	12

Item 5.	Other Information	12

Item 6.	Exhibits and Reports on Form 8-K	13

	Signatures	14

We have reviewed the accompanying consolidated balance sheet of First Hartford Corporation and Subsidiaries as of January 31, 2004 and January 31, 2003, and the related consolidated statements of operations, and cash flows for the three months and nine 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.

Assets	January 31,			April 30,
		2004		2003

Real Estate and equipment:

Developed properties	$	11,520,582	$	7,920,657

Equipment and leasehold improvements		117,781		113,719
	11,638,363			8,034,376

Less accumulated depreciation and
amortization		1,776,503		1,633,526
		9,861,860		6,400,850
Properties under construction and
investment in undeveloped properties.		1,209,775		72,672
	11,071,635			6,473,522

Cash		3,520,251		29,051

Accounts receivable, less allowance
for doubtful accounts of $70,600
		758,199		1,187,296

Deposits, escrows, and prepaid and
deferred expenses		1,604,663		1,340,464

Investment in affiliates		125,976		1,132,908

Due from related parties and affiliates		230,334		192,505

Deferred Tax Assets		900,000		1,700,000

Discontinued Assets		-0-		12,132,599

	$	18,211,058	$	24,188,345

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

		January 31,	April 30,
		2004		2003

Liabilities:

Mortgages, notes payable;
Construction Loans	$	4,621,418		474,627

Mortgages payable	$	9,482,662		9,191,466

Notes Payable:
Other		1,780,083		2,368,789
		15,884,163		12,034,882

Accounts payable		1,765,585		2,097,292
Accrued Liabilities		685,492		494,512
Other Liabilities		946,728		772,984
Deferred Income		215,724		265,467
Due to Related Parties and affiliated
partnerships		118,965		248,359

Mortgage payable - discontinued		-0-		14,158,489
		19,616,657		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		( 7,517,333)		(11,995,374)
		662,525		(3,815,516)

Less 232,228 shares of common stock
held in treasury, at cost		2,068,124		2,068,124
		( 1,405,599)		( 5,883,640)
	$	18,211,058	$	24,188,345

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

		Nine Months Ended			Three Months Ended
		January 31, 2004		January 31, 2003	January 31, 2004	January 31, 2003
				(Restated)		(Restated)
State Income Tax		63,854		- 0 -	59,153	- 0 -
Deferred Federal Income Tax	800,000			- 0 -	800,000	- 0 -
Total Taxes On Income	863,854			- 0 -	859,153	- 0 -

Net Income (Loss)		4,478,041		(364,806)	4,782,094	(16,809)

Base Earning Per Share	$	1.45		($0.12)	1.55	(.01)

Weighted Average Number
Of Shares Outstanding	3,089,985		3,089,985		3,089,985	3,089,985

FIRST HARTFORD CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS

Cash flows from operating			9 months ended				3 months ended
activities:		01/31/2004		01/31/2003			01/31/2004	01/31/2003


Net Profit (Loss)		$	4,478,041	$	(364,806)	$	4,782,094	$ ( 16,809)

Adjustments to reconcile net loss
to net cash used in operating
activities:

Depreciation			356,733		349,211		120,332		116,707
Amortization			116,161		33,331		91,967		12,321
Deferred Tax Asset			800,000		-0-		800,000		-0-
Gain on Sale of Property			6,685,897		-0-	6,685,897			-0-

Changes in assets and liabilities:
Increase (Decrease) in:

Accounts and Notes
Receivable (Net)			429,097		201,196		404,416		22,478
Deposits, escrows, prepaid and
deferred expenses			(628,611)		508,985		(229,958)		166,692

(Increase) Decrease) in:

Accrued liabilities			190,980	(164,043)			319,950	(664,832)
Other Liabilities			124,001		441,419		87,937		399,515
Accounts payable			(331,707)	(315,307)			(782,486)		229,443

Net cash provided by (used in)
operating activities:		12,220,592			689,986	12,280,149			265,515

Cash Flow from investing activities:

Proceeds from Investments		1,006,932			2,908		182,531		2,908
Purchase of equipment			(9,004)		(13,101)		( 4,982)		2,906
Write Off Predevelopment Cost			98,251		-0-		98,251		-0-
Proceeds from Sale
of Property		5,530,060			-0-	5,530,060			-0-

Payments for:

Additions to New Property			(4,751,868)		( 356,896)		(4,709,497)		(59,685)
Additions to developed
Property			(127,332)		-0-		( 127,332)		-0-
Net Cash provided by (used in)
investing activities	$	1,747,039		$	(367,089)		969,031	$	(53,871)

FIRST HARTFORD CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS, CONTINUED

Cash flows from financing		3 months ended					3 months ended
activities:		01/31/2004	01/3/2003		01/31/2004			01/31/2003

Proceeds from:
Construction Loan
Payable	$	4,146,791		-0-		$ 3,701,657		-0-
Mortgage Payable		-0-		648,034		-0-		335,000
Notes Payable		-0-		840,000		-0-		-0-

Principal payments on:
Mortgages payable		(13,867,293)		( 362,999)			(13,296,126)	( 94,889)
Notes payable		(588,706)		(1,665,655)			(258,241)	( 11,357)
Advances from Related Parties and
affiliated Parties		( 167,223)		163,501			134,917	( 555,129)

Net Cash provided by (used in)
Financing Activities		(10,476,431)		(377,119)			(9,717,793)	( 326,375)

Net increase (Decrease) in cash
and Cash Equivalents		3,491,200		(54,222)		3,531,387		(114,731)

Cash and cash equivalents,
beginning of Period		29,051		67,748			( 11,136)	128,257

Cash and cash equivalents,
end of Period	$	3,520,251	$	13,526			$ 3,520,251	$13,526

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.

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.

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.

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. At April 30, 2004 and forward, the Company will recognize income on the straight-line basis in accordance with SFAS 13. 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.

The accompanying unaudited financial statements reflect all adjustments necessary to present fairly the Company’s financial position as of January 31, 2004 and the results of its operations and cash flows for the nine months ended January 31, 2004. The results of operations for the nine months ended January 31, 2004 are not necessarily indicative of the results to be expected for the full year. 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.

On November 26, 2003, the Company purchased a shopping center in West Springfield, MA for $3,650,000.

The Company sold its shopping center in Mount Olive, NJ for $19,433,415 resulting in a pre-tax gain of $6,685,897.

On January 22, 2004, the shareholders approved a stock-option plan. In February 2004, 250,000 options were granted to five employees, two of which are directors. The options have a two year vesting period which were granted at $1.10 per share, representing the highest current bid price. With the option, the employee was given the right to sell the shares back to the Company for $2.40 at the end of the vesting period.

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 how various factors including changes in general economic conditions, cost of materials, interest rates and availability of funds, and the nature of competition and relationships with key customers may affect the Company’s performance. The Company undertakes no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or other.

There has been a significant improvement to the liquidity of the Company as a result of the sale of our Mt. Olive New Jersey shopping center. Cash received was $4,300,000 of which $525,000 is reserved for federal tax (alternative minimum tax) and state tax.

In the past the Company has had large property sales but it was usually caused by an extreme need to repay debt. Such is currently not the case. Utilization of our Net Operating Loss Carry Forward and a business need to keep funding new projects to invest in, were the catalyst.

On November 26, 2003, 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 provided 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. At the initial draw $225,0000 invested in the project was recovered.

The Company has four signed leases for approximately 92,500 square feet for the Kmart building, which is requiring us to expand the building. The loan is currently in the process to increase by $765,000 to fund the expansion. The first tenant will open 25,000 square feet on March 28, 2004. We expect all four to be opened by mid-summer.

On January 1, 2004 the Katharine Gibbs School moved into a building constructed by the Company and leased to them by a joint venture in which the Company is a 50% participant. On the same property a completed pad (graded, compacted, paved, connected utilities, plus site lighting) was leased to a restaurant which is constructing their own building. The restaurant is expected to open by May 1, 2004.

Rent for the school is $121,000 monthly and the debt service is interest only on the $11,700,000 mortgage. It is anticipated that amortization of principle will begin in October, 2004. The interest rate is 2.0% over 30 days LIBOR (currently approximately 1%). An interest hedge was purchased limiting the interest rate to a maximum of 8%.

The pad improvements for the restaurant were paid for by the first two months of cash flow. Rent for the restaurant is $8,333 monthly.

Distributions received from the Cranston and Dover shopping centers amounted to $195,000 this quarter. Approximately $60,000 of which was from a payment of a Kmart chapter 11 claim.

During this quarter we decided not to go forward with a project in New York State and wrote off $98,000. In Maine, we expended an additional $200,000 and this project continues to move forward.

The highlight of the current quarter is the sale of the Mt. Olive, New Jersey shopping center. The sale of the center has caused a restatement of operations to reflect discontinued items in accordance with SFAS 144. The pre-tax gain on the sale of the center was approximately $6,886,000 or $2.28 per share. Taxes amounted to $.45 per share of that amount, $.26 was a result of utilization of our deferred tax asset (Net Operating Loss Carry forward).

In the current quarter, the Company has lost $557,000 or (.18 a share) from operations. Included in that loss is the following:

These items totaling $305,000 amount to $.10 of the $.18 loss per share from operations.

On January 22, 2004 at the meeting of the shareholders, two items were approved.

In the month of February, 250,000 of those options were granted to five employees, two of which are Directors. The options which have a two year vesting period were granted at $1.10 per share, representing the highest current bid price. With the option, the employee was given the right to sell the shares back to the Company for $2.40 at the end of the vesting period. At this writing, the last trade of the stock was $1.85 per share.

All phases of the real estate business are inherently speculative and intensely competitive with many enterprises, both large and small, engaged in businesses similar to the Company’s throughout the United States. The success of the Company, to a large extent, depends upon factors which may be beyond the control of management. Some of these factors are variable construction costs, the mortgage market, real estate taxes, income tax laws, government regulations, the commercial rental market and the economy. The ability of the Company to meet its debt service obligations and to operate profitably is also dependent on its ability to attract tenants and to compete successfully with the numerous other commercial properties available to prospective tenants. The ability to attract tenants is dependent upon the changing character of the areas in which the Company’s properties are located, the rate of new construction in those areas and the extent of present and future competition in those areas. The Company’s holdings are becoming less diversified both geographically and in use and types of occupancy.

The Company’s assets are concentrated mostly in the Northeast which creates a geographic diversification risk. The Company presently has interest from Southern New Jersey and options for property as far north as Maine.

The real estate business does not experience “backlogs” as that term is generally understood, nor is it seasonal.

To the Company’s knowledge, its real estate business is not dependent upon a single customer but there is a dependency on supermarkets for strip malls. The Company has Stop & Shop, Price Rite and Big Y as such tenants.

Our management, including our chief executive officer and chief financial officer carried out an evaluation of the effectiveness of our disclosure controls and procedures as of January 31, 2004, pursuant to Exchange Act Rules 13a-15(e) and 15(d)-15(e). Based upon that evaluation our chief executive officer and chief financial officer have concluded that as of such date, our disclosure controls and procedures in place are adequate to ensure material information and other information requiring disclosure is identified and communicated on a timely basis. There were no significant changes in the registrant’s internal controls or in other factors that could significantly affect these controls subsequent to the date of their evaluation.

On January 29, 2004, a shareholder filed a 13D with the Securities and Exchange Commission indicating that he controls over 19% of the Company shares. That shareholder was Richard E. Kaplan, purportedly a resident of the Commonwealth of Massachusetts. By Complaint dated February 27, 2004, Mr. Kaplan, filed suit against First Hartford Corporation (the “Company”) as case No. 04 10402 RCL in the United States District Court in the District of

Massachusetts. The Company was served with the complaint on March 2, 2004. The complaint alleges that the proxy solicitation materials issued by the Company as a prelude to its annual meeting on January 22,2004, were false and/or misleading in certain respects and also omitted certain material information. As a result thereof, the plaintiff seeks to void the shareholder votes taken at the January 22, 2004 shareholder meeting of the Company and have a new vote ordered based upon revised proxy material which would be required to be issued by the Company. The only shareholder votes taken at the annual meeting were to re-elect the same board of directors which had been serving the Company and to approve an Employee Stock Option Plan as previously described in Note 4 on page 8 hereof.

The Company believes strongly that information in its proxy materials was neither false or misleading and that the lawsuit is without merit.

The Company is not aware of any other material legal proceedings which would need to be cited herein.

Item 2.	CHANGES IN SECURITIES USE OF PROCEEDS AND ISSUER PURCHASES OF EQUITY
	SECURITIES

	(a) Not Applicable.

	(b) Not Applicable.

	(c) Not Applicable.

	(d) Not Applicable.

Item 3.	DEFAULTS UPON SENIOR SECURITIES

	(a) Not Applicable.

	(b) Not Applicable. The Company has not declared any dividends.

Item 4.	SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

	(a) January 22, 2004. Meeting was declared as an annual meeting.

	(b) The following directors were elected:

	Neil H. Ellis
	David B. Harding
	Stuart I. Greenwald

	(c) Board of Directors was approved by Vote of 2,601,991 in favor, zero (0)
	against with 2,262 abstaining.

	An “Employee Stock Option Plan” was approved by a vote of 1,631,870 in favor,
	19,346 against with 1,860 abstaining.

Item 5.	OTHER INFORMATION

	Not Applicable.

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.

Maine	01-0185800
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

FIRST HARTFORD CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME (LOSS)
(Unaudited)
		Nine Months Ended				Three Months Ended
		January 31, 2004		January 31, 2003		January 31, 2004	January 31, 2003
				(Restated)			(Restated)
Revenues, Including Related
Party Respectively:
Sale of Real Estate		$ 73,096	$ - 0 -		$ - 0 -		$ -0-
Construction		114,375		135,083		9,428	40,483
Rental		1,190,778		957,349		448,799	329,669
Management fees		62,034		252,909		62,034	19,375
Other		245,253		477,719		177,256	405,147
Non-Recurring		200,367		183,456		- 0 -	- 0 -
Equity In Earnings of
Joint Ventures		233,280		- 0 -		68,280	- 0 -
		2,119,183	2,006,516			765,797	794,674
Costs and Expenses:

Cost of Sales Real Estate		15,771		- 0 -		- 0 -	- 0 -
Construction		28,492		78,733		7,116	11,096
Operating, selling, general
and administrative		2,143,932	1,556,662			925,819	572,262
Interest		580,208		598,931		201,494	200,348
Depreciation and amortization		253,289		171,155		137,513	57,593
Real estate taxes		123,946		117,230		51,040	38,150
		3,145,638		2,522,711		1,322,982	879,449
Net Operating (Loss)
Before Discontinued
Items and Income Taxes		$(1,026,455)		$(516,195)		$(557,185)	(84,775)

Discontinued Items
Sale of Shopping Center	19,433,415			- 0 -	19,433,415		- 0 -
Cost of Shopping Center	12,747,518			- 0 -	12,747,518		- 0 -
Federal & State Tax		525,000		- 0 -		525,000	- 0 -
Gain on Sales (net of tax)		6,160,897		- 0 -	6,160,897		- 0 -
Operating Gain on Shopping
Center		207,453		151,389		37,535	67,966
Net Gain		6,368,350		151,389		6,198,432	67,966
Net Income (Loss) Before		5,341,895		(364,806)		5,641,247	(16,809)
Income Tax

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

(Mark One)	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended January 31, 2004 OR
X

1.	Loss from write off of predevelopment cost for abandoned project,$98,000.
2.	Amortization of deferred financing cost upon closing new loan for existing center,$80,000.
3.	Write off of billings in excess of contract regarding affiliated partnerships, $127,000.

1.	Re-election of the Board of Directors.
2.	Approval of the Employee stock Option Plan.