EXHIBIT 99.1
FIRST UNION REAL ESTATE EQUITY AND MORTGAGE INVESTMENTS
- --------------------------------------------------------------------------------
AT THE COMPANY
Neil H. Koenig
Interim Chief Financial Officer
(212) 949-1373
FOR IMMEDIATE RELEASE
FIRST UNION REAL ESTATE EQUITY AND MORTGAGE INVESTMENTS
ANNOUNCES FIRST QUARTER RESULTS
NEW YORK, NEW YORK MAY 15, 2003
- - FIRST UNION REAL ESTATE EQUITY AND MORTGAGE INVESTMENTS (NYSE:FUR) announced
its financial results for the first quarter ended March 31, 2003.
Financial results for the three months ended March 31, 2003 and 2002 are as
follows:
THREE MONTHS ENDED
------------------
(IN THOUSANDS) MARCH 31, MARCH 31,
2003 2002
---- ----
Revenues ....................... $ 4,430 $ 4,703
======= =======
Net loss ....................... $(1,032) $(1,490)
======= =======
Net loss applicable to shares of
beneficial interest ........... $(1,548) $(2,007)
======= =======
For the three months ended March 31, 2003, the Company's net loss
applicable to shares of beneficial interest was $1.5 million compared to net
loss applicable to shares of beneficial interest of $2.0 million for the same
period in 2002. Property net operating income, which is defined as rents less
property operating expenses and real estate taxes, increased for the three
months ended March 31, 2003 to $2.0 million from $1.8 million for the same
period in 2002. The increase was attributable to an increase in revenues of $0.1
million and a decrease in operating expenses of $0.1 million. The increase in
revenues of $0.1 million was primarily due to a lease termination fee received
at Park Plaza Mall. The Company's manufacturing business, VenTek, incurred a net
loss of $0.4 million for the quarter ended March 31, 2003, as compared to a net
loss of $0.5 million for the quarter ended March 31, 2002. Sales decreased for
the three months ended March 31, 2003 to $0.7 million from $0.9 million in 2002
and cost of goods sold decreased to $1.1 million from $1.4 million for the same
period. The decrease in both sales and cost of goods sold is due to the winding
down of current contracts and having nominal new business.
Interest income decreased during the three months ended March 31, 2003, as
compared to the same period in 2002, due primarily to lower amounts invested and
lower interest rates between the comparable three month periods.
The Company declared a dividend of $0.5 million ($0.525 per share) on its
Series A Cumulative Convertible Redeemable Preferred Shares in the first quarter
of 2003. The dividend was paid April 30, 2003 to shareholders of record at the
close of business on March 31, 2003.
PROPOSED TRANSACTION
The proposed merger transaction between First Union and Gotham Golf Corp.
currently is enjoined by an order of the New York State Supreme Court for New
York County that has been appealed by both First Union and Gotham Partners, L.
P. Oral argument with respect to the appeal was held before a judicial panel of
the Appellate Division - First Department of the New York State Supreme Court on
March 11, 2003. There is no specific timetable for the appellate court to render
its decision. No assurance can be given that the injunction will be lifted, that
all required third party consents will be obtained and that the transaction will
be consummated.
In the proposed merger transaction, holders of First Union common shares
would receive for each common share held (i) $1.98 in cash, (ii) a choice of an
additional $0.35 in cash or approximately 1/174th of a debt instrument to be
issued by a First Union subsidiary with a face value of $100 and which is
indirectly secured by First Union's principal real estate assets and (iii)
rights to purchase common shares of Gotham Golf Corp. Holders of First Union
preferred shares would receive preferred shares of Gotham Golf Corp., as
provided for under the terms of the First Union preferred shares.
In the event that, for any reason, the Gotham Golf Corp. merger were not
consummated, it is the current intention of the Board of Trustees of First Union
to continue to operate First Union as an ongoing enterprise and to examine other
alternatives as and when it may deem appropriate.
FORWARD-LOOKING STATEMENTS
Certain statements contained in this news release that are forward-looking
are based on current expectations that are subject to a number of uncertainties
and risks, and actual results may differ materially. The uncertainties and risks
include, but are not limited to, changes in market activity, changes in local
real estate conditions and markets, actions by competitors, interest rate
movements and general economic conditions. Further information about these
matters can be found in the information included in the Annual Report on Form
10-K filed by the Company with the Securities and Exchange Commission for its
fiscal year ended December 31, 2002.
First Union Real Estate Equity and Mortgage Investments is a NYSE-listed,
stapled-stock real estate investment trust (REIT) headquartered in New York, New
York.
FIRST UNION REAL ESTATE EQUITY and MORTGAGE INVESTMENTS
Combined Statements of Operations
Unaudited (In thousands, except per share data) Three Months Ended
March 31,
---------
2003 2002
---- ----
Revenues
Rents ................................................. $ 3,445 $ 3,297
Sales ................................................. 726 945
Interest .............................................. 259 461
-------- --------
4,430 4,703
-------- --------
Expenses
Property operating .................................... 1,181 1,270
Cost of goods sold .................................... 1,087 1,373
Real estate taxes ..................................... 225 220
Depreciation and amortization ......................... 535 509
Interest .............................................. 1,272 1,203
General and administrative ............................ 1,162 1,618
-------- --------
5,462 6,193
-------- --------
Net loss .................................................. (1,032) (1,490)
Preferred dividend .................................... (516) (517)
-------- --------
Net loss applicable to shares of beneficial interest ...... $ (1,548) $ (2,007)
======== ========
Per share data
Basic:
Net loss applicable to shares of beneficial interest . $ (0.04) $ (0.06)
======== ========
Diluted:
Net loss applicable to shares of beneficial interest . $ (0.04) $ (0.06)
======== ========
Basic weighted average shares ........................ 34,814 34,806
======== ========
Diluted weighted average shares ...................... 34,814 34,806
======== ========