Exhibit 99.1
FOR IMMEDIATE RELEASE:
WELLSFORD REAL PROPERTIES, INC.
FIRST QUARTER 2003 RESULTS DRIVEN BY ASSET SALES
NEW YORK, May 7, 2003--Wellsford Real Properties, Inc. (AMEX: "WRP")
reported first quarter 2003 revenues of $6,954,748, and net income of $832,539
or $0.13 per basic and diluted share. For the comparable quarter in 2002, WRP
reported revenues of $6,990,948 and a net loss of $(1,076,414) or $(0.17) per
basic and diluted share.
First Quarter 2003 and Subsequent Activities
Wellsford/Whitehall
At March 31, 2003, WRP had a 32.59% ownership interest in
Wellsford/Whitehall, a private joint venture that owns and operates 28
properties (including 19 office properties, five retail properties and four land
parcels) aggregating approximately 2,892,000 square feet of improvements.
Wellsford/Whitehall sold eight properties during the three months ended
March 31, 2003 for gross proceeds of approximately $140,500,000 including a
portfolio of six office properties aggregating 956,000 square feet to a single
purchaser and, in separate transactions, one retail property of 10,000 square
feet and a 16,000 square foot office building. The net effect of these sales to
WRP's results was pre-tax income of approximately $2,100,000 and after-tax
income of $1,250,000.
Wellsford/Whitehall had total assets of $431,597,000 and debt of
$237,855,000 at March 31, 2003. At December 31, 2002, total assets and debt were
$557,319,000 and $368,359,000, respectively.
The portfolio occupancy was 73% at March 31, 2003 based upon 2,346,000
gross leasable square feet (approximately 546,000 square feet is under
renovation).
Wellsford Development
During the first quarter of 2003, WRP sold five condominium units at the
Silver Mesa phase of Palomino Park. Gross proceeds from these sales were
$1,196,000, of which $990,000 was applied to principal repayments on the related
loan. WRP sold nine units for gross proceeds of $2,079,000 in the comparable
2002 period. Through March 31, 2003, 158 units have been sold and 106 units
remain to be sold.
The Blue Ridge, Red Canyon and Green River phases of Palomino Park were 93%
occupied at March 31, 2003. In order to maintain occupancy at this level, WRP
continued to offer concessions on all new and renewal leases.
In February 2003, WRP obtained a $40,000,000 permanent loan secured by the
Green River phase of Palomino Park. The loan matures in March 2013 and bears
interest at a fixed rate of 5.45% per annum and amortizes based on a 30-year
schedule. Proceeds were used to repay maturing construction debt of
approximately $37,107,000, with excess proceeds available for working capital
purposes.
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Wellsford Capital
Second Holding, a special purpose finance company in which WRP has an
approximate 51% equity interest, purchased (net of repayments and releases of
escrow reserves) approximately $4,800,000 of investments in real estate and
other asset-backed securities for a total investment balance of $1,790,532,000
at March 31, 2003. At March 31, 2003, approximately 92% of the investments were
rated AAA or AA by Standard & Poor's and no investments were rated lower than
A-.
Corporate
During the quarter ended March 31, 2003, WRP's Board of Directors adopted
an amended charter for the Audit Committee and adopted initial charters for the
Compensation Committee, Nominating Committee and the Governance Committee.
Copies of these charters are available on WRP's website (www.wellsford.com).
Commenting on the activities of the first quarter, Jeffrey H. Lynford,
Chairman of the Board, stated, "Our cash position strengthened $3.4 million
during the quarter to $42 million or $6.51 per share (approximately one quarter
of our $27.53 book value per share), primarily from excess proceeds on the Green
River financing activity. Most of the proceeds from asset sales by
Wellsford/Whitehall were retained to reduce venture debt by approximately $130
million.
Although the first quarter of 2003 produced reportable income for the first
time in six quarters, this result was driven substantially by the sales of
office properties. Marketing of many of the properties sold commenced a year
ago. Given the time requirements to negotiate transactions and the state of the
sub-markets in which our properties are located, meaningful sales for the
remainder of 2003 are unlikely."
This press release may contain certain forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended. Such
forward-looking statements involve known and unknown risks, uncertainties and
other factors which may cause the actual results, performance or achievements of
the Company or industry results to be materially different from any future
results, performance or achievements expressed or implied by such
forward-looking statements. Such factors include, among others, the following,
which are discussed in greater detail in the "Risk Factors" section of the
Company's registration statement on Form S-3 (file No. 333-73874) filed with the
Securities and Exchange Commission ("SEC") on December 14, 2001, as may be
amended, which is incorporated herein by reference: general and local economic
and business conditions, which will, among other things, affect demand for
commercial and residential properties, availability and credit worthiness of
prospective tenants, lease rents and the availability and cost of financing;
ability to find suitable investments; competition; risks of real estate
acquisition, development, construction and renovation including construction
delays and cost overruns; ability to comply with zoning and other laws;
vacancies at commercial and multifamily properties; dependence on rental income
from real property; the risk of inflation in operating expenses, including, but
not limited to, energy, water and insurance; the availability of insurance
coverages; adverse consequences of debt financing including, without limitation,
the necessity of future financings to repay maturing debt obligations; inability
to meet financial and valuation covenants contained in loan agreements;
inability to repay financings; risks of investments in debt instruments,
including possible payment defaults and reductions in the value of collateral;
uncertainties pertaining to debt investments, including, but not limited to the
WTC Certificates, including scheduled interest payments, the ultimate repayment
of principal, adequate insurance coverages, the ability of insurers to pay
claims and effects of changes in ratings from rating agencies; risks of
subordinate loans; risks of leverage; risks associated with equity investments
in and with third parties; availability and cost of financing; interest rate
risks; demand by prospective buyers of condominium and commercial properties;
inability to realize gains from the real estate assets held for sale; lower than
anticipated sales prices; inability to close on sales of properties under
contract; illiquidity of real estate investments; environmental risks; and other
risks listed from time to time in the Company's reports filed with the SEC.
Therefore, actual results could differ materially from those projected in such
statements.
Press Contact: Mark P. Cantaluppi
Wellsford Real Properties, Inc.
Vice President, Chief Accounting Officer & Director of
Investor Relations
(212) 838-3400
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Wellsford Real Properties, Inc.
Financial Highlights
For the Three Months Ended
Consolidated Statements of Operations March 31,
- ------------------------------------- --------------------------
2003 2002
------------ ----------
(unaudited)
REVENUES
Rental revenue.............................$ 4,235,307 $ 3,727,216
Revenue from sales of residential units.... 1,196,000 2,078,585
Interest revenue........................... 958,043 1,068,167
Fee revenue................................ 565,398 116,980
----------- ------------
Total revenues.......................... 6,954,748 6,990,948
----------- ------------
COSTS AND EXPENSES
Cost of sales of residential units......... 1,054,754 1,905,560
Property operating and maintenance......... 1,111,092 1,310,278
Real estate taxes.......................... 378,156 364,330
Depreciation and amortization.............. 2,283,391 1,260,805
Property management........................ 86,269 131,709
Interest................................... 1,585,087 1,493,736
General and administrative................. 1,510,203 1,673,663
----------- ------------
Total costs and expenses................ 8,008,952 8,140,081
----------- ------------
Income from joint ventures................. 3,125,472 420,203
----------- ------------
Income (loss) before minority interest,
income taxes and accrued distributions
and amortization of costs on Convertible
Trust Preferred Securities................. 2,071,268 (728,930)
Minority interest (expense) benefit........ (5,775) 45,470
----------- ------------
Income (loss) before income taxes and
accrued distributions and amortization
of costs on Convertible Trust Preferred
Securities................................. 2,065,493 (683,460)
Income tax expense (benefit)............... 888,000 (27,000)
----------- ------------
Income (loss) before accrued distributions
and amortization of costs on Convertible
Trust Preferred Securities................. 1,177,493 (656,460)
Accrued distributions and amortization of
costs on Convertible Trust Preferred
Securities, net of income tax benefit
$180,000 and of $105,000................... 344,954 419,954
----------- ------------
Net income (loss)..........................$ 832,539 $ (1,076,414)
============ =============
Net income (loss) per common share,
basic......................................$ 0.13 $ (0.17)
============ =============
Net income (loss) per common share,
diluted....................................$ 0.13 $ (0.17)
============ =============
Weighted average number of common shares
outstanding, basic......................... 6,452,092 6,409,248
========= =========
Weighted average number of common shares
outstanding, diluted....................... 6,452,691 6,409,248
========= =========
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Wellsford Real Properties, Inc.
Financial Highlights
(continued)
Summary of Consolidated Balance Sheet Data March 31, December 31,
- ------------------------------------------ 2003 2002
----------- ------------
(unaudited) (audited)
Real estate, net........................... $ 147,822,868 $ 149,869,270
Notes receivable........................... $ 28,096,000 $ 28,612,000
Investment in joint ventures............... $ 95,512,638 $ 94,180,991
Cash and cash equivalents.................. $ 41,975,719 $ 38,644,315
Total assets............................... $ 334,267,046 $ 332,775,043
Mortgage notes payable..................... $ 113,877,645 $ 112,232,830
Convertible Trust Preferred Securities..... $ 25,000,000 $ 25,000,000
Total shareholders' equity................. $ 177,641,155 $ 176,567,297
Other information:
Common shares outstanding................ 6,452,092 6,450,586
Book value per share (unaudited)......... $ 27.53 $ 27.37
Enterprise assets (unaudited)............ $2,640,340,000 $2,646,437,000
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