Exhibit 99
FIRST UNION REAL ESTATE EQUITY AND MORTGAGE INVESTMENTS
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AT THE COMPANY
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Carolyn Tiffany
Chief Operating Officer
(617) 570-4614
NEW YORK, NEW YORK MAY 13, 2004 - FIRST UNION REAL ESTATE EQUITY AND MORTGAGE
INVESTMENTS (NYSE:FUR) announced its financial results for the first quarter
ended March 31, 2004. Financial results for the three months ended March 31,
2004 and 2003 are as follows:
Unaudited (In thousands) Three Months Ended
March 31,
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2004 2003
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Revenues $ 4,854 $ 4,430
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Net loss $ (205) $ (1,032)
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Net loss applicable to shares
of beneficial interest $ (721) $ (1,548)
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Net loss applicable to shares of
beneficial interest (per share) $ (0.02) $ (0.04)
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During the first quarter of 2004, First Union acquired 7.5% of the outstanding
shares of Atlantic Realty Trust (NASDAQ:ATLRS) and made a proposal to Atlantic
Realty Trust to merge Atlantic Realty with and into First Union. First Union's
proposal, which was subsequently modified, has been rejected by Atlantic Realty.
Also during the first quarter of 2004, First Union acquired a loan receivable of
NorthStar Partnership, L.P., a real estate investment company. The loan
receivable is secured by substantially all of the assets of NorthStar
Partnership, matures on May 28, 2005, subject to two six-month extensions, and
provides for an initial interest rate of a minimum of 12% per annum, with a
yield to maturity of 12.86%, increasing by two percentage points for each six
month renewal term.
Net loss applicable to common shares of beneficial interest for the three months
ended March 31, 2004 was $0.7 million as compared to net loss of $1.5 million
for the three months ended March 31, 2003.
Property net operating income, which is rent less property operating expenses
and real estate taxes, decreased for the three months ended March 31, 2004 to
$1.9 million from $2.0 million in
2003. The decrease was attributable to a decrease in rental revenues of $154,000
due to vacancy during 2003 by the movie theater operator at the Park Plaza Mall.
The management company for Park Plaza Mall is actively seeking one or more
replacement tenants for this space. The decrease in revenue was partially offset
by a decrease in operating expenses and real estate taxes of $27,000 and $6,000
respectively.
First Union's manufacturing business, VenTek International, Inc. ("VenTek"),
generated net income of $0.4 million for the quarter ended March 31, 2004, as
compared to a net loss of $0.4 million for the quarter ended March 31, 2003.
Revenue increased for the three months ended March 31, 2004 to $1.3 million from
$0.7 million in 2003 and cost of goods sold decreased to $0.9 million from $1.1
million for the same period. There was no backlog for VenTek at March 31, 2004
besides the one contract and change order. Backlog represents products or
services that VenTek's customers have committed by contract to purchase. VenTek
is not actively seeking new contracts.
Interest income decreased by $5,000 during the three months ended March 31,
2004, as compared to 2003. The decrease is primarily the result of lower yields
available on the cash invested.
General and administrative expenses for the first quarter 2004 increased by
approximately $0.1 million when compared to the same period in 2003. During the
first three months of 2003, the largest components of First Union's general and
administrative expenses were legal fees relating to the preferred shareholder
litigation ($0.2 million), legal fees related to the Gotham transaction ($0.2
million), other legal and accounting professional fees ($0.4 million), and
directors and officers insurance ($0.1 million). The balance of the first
quarter 2003 general and administrative costs ($0.3 million) related to
management fees, costs associated with shareholder relations and communications,
trustee fees, and other administrative costs incurred in connection with the
operation and management of the trust. During the first quarter of 2004 the
largest components of First Union's general and administrative expenses were
legal and accounting fees ($0.4 million), directors and officers insurance ($0.2
million), a termination fee paid to First Union's former asset management
provider, Radiant Partners LLC ($0.1 million), the asset management fee that is
charged by FUR Advisors LLC ($0.4 million) which is based upon a percentage of
First Union's Gross Asset Value (as defined in the agreement). Also included in
the first quarter 2004 general and administrative expenses were federal and
state tax expenses incurred by First Union's taxable REIT subsidiary ($.04
million) for its share of the income earned. The balance of the general and
administrative expenses ($0.25 million) was for costs associated with
shareholder relations and communications, trustee fees, and other miscellaneous
costs associated with the operations of the trust.
Depreciation and amortization declined slightly to $0.5 million for the first
quarter 2004 from $0.54 million from the same period in 2003.
Interest expense declined from $1.3 million during the three months ended March
31, 2003 to $0.9 million for the same period in 2004 due to the full
satisfaction of the senior notes on October 1, 2003.
The Combined Statements of Operations for the Trust for the three month periods
ended March 31, 2004 and 2003 accompanies this release.
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, 2003. These forward-looking statements reflect
management's judgment as of this date, and First Union assumes no obligation to
revise or update them to reflect future events or circumstances.
First Union Real Estate Equity and Mortgage Investments is a NYSE-listed real
estate investment trust (REIT) headquartered in Boston, Massachusetts.
FIRST UNION REAL ESTATE EQUITY AND MORTGAGE INVESTMENTS
COMBINED STATEMENTS OF OPERATIONS
(Unaudited)
Unaudited (In thousands, THREE MONTHS ENDED
except per share data) MARCH 31,
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2004 2003
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REVENUES
Rents $ 3,291 $ 3,445
Sales 1,309 726
Interest and dividends 254 259
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4,854 4,430
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EXPENSES
Property operating 1,154 2,268
Cost of Goods Sold 934
Real estate taxes 219 225
Depreciation and amortization 499 535
Interest 943 1,272
General and administrative 1,310 1,162
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5,059 5,462
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NET LOSS BEFORE PREFERRED DIVIDEND (205) (1,032)
Preferred dividend (516) (516)
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NET LOSS $ (721) $ (1,548)
OTHER COMPREHENSIVE INCOME
Unrealized gain on securities 396 --
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Comprehensive loss $ (325) $ (1,548)
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PER SHARE DATA
BASIC AND DILUTED:
Net loss applicable to common
shares of beneficial interest $ (0.02) $ (0.04)
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BASIC AND DILUTED WEIGHTED
AVERAGE COMMON SHARES 31,059 34,814
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