Exhibit 99.1
Wellsford Real Properties, Inc.
535 Madison Avenue, 26th Floor, New York, NY 10022
212-383-3400 Fax 212-4217244
FOR IMMEDIATE RELEASE:
WELLSFORD REAL PROPERTIES, INC.
SECOND QUARTER 2003 RESULTS
NEW YORK, August 6, 2003--Wellsford Real Properties, Inc. (AMEX: "WRP") reported
second quarter 2003 revenues of $7,307,634 and a net loss of $(1,438,302), or
$(0.22) per basic and diluted share. For the corresponding quarter in 2002, WRP
reported comparable revenues of $7,097,635 and a net loss of $(893,386), or
$(0.14) per basic and diluted share.
For the six months ended June 30, 2003, WRP reported revenues of $13,941,184 and
a net loss of $(605,763) or $(0.09) per basic and diluted share. For the
corresponding 2002 period, WRP reported comparable revenues of $13,779,483 and a
net loss of $(1,969,800), or $(0.31) per basic and diluted share.
Second Quarter 2003 and Subsequent Activities
Wellsford/Whitehall
At June 30, 2003, WRP had a 32.59% ownership interest in Wellsford/Whitehall, a
private joint venture that owns and operates 25 properties (including 17 office
properties, five retail properties and three land parcels) aggregating
approximately 2,752,000 square feet of improvements.
Wellsford/Whitehall sold three properties during the three months ended June 30,
2003 for gross proceeds of approximately $33,785,000. For the six months ended
June 30, 2003, Wellsford/Whitehall sold 11 properties for gross proceeds of
approximately $174,290,000. The net effect of these sales to WRP's results was a
pre-tax (loss) income of approximately $(700,000) and $1,400,000 and an
after-tax (loss) income of $(600,000) and $1,100,000 for the three and six
months ended June 30, 2003, respectively.
Wellsford/Whitehall had total assets of $390,685,000 and debt of $202,293,000 at
June 30, 2003. At December 31, 2002, total assets and debt were $557,319,000 and
$368,359,000, respectively.
The stabilized portfolio occupancy was 73% at June 30, 2003 based upon 2,206,000
gross leasable square feet (approximately 546,000 square feet is under
renovation).
Wellsford Development
During the second quarter of 2003, WRP sold 11 condominium units at the Silver
Mesa phase of Palomino Park for gross proceeds of $2,461,000. WRP sold 11 units
for gross proceeds of $2,245,000 in the comparable 2002 period. For the six
months ended June 30, 2003, and 2002, WRP sold 16 and 20 units respectively for
gross proceeds of $3,657,000 and $4,324,000, respectively. Through June 30,
2003, 169 units have been sold and 95 units remain to be sold.
The Blue Ridge, Red Canyon and Green River phases of Palomino Park were 87%
occupied at June 30, 2003. In order to maintain occupancy at this level, WRP
continued to offer concessions on all new and renewal leases.
During the second quarter of 2003, WRP repaid the remaining principal balance of
the Silver Mesa Conversion Loan of $3,327,000 with proceeds from Silver Mesa
unit sales and available cash. Since that time, all of the net sales proceeds
from Silver Mesa units are available for WRP working capital purposes.
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 $30,000,000 of investments in real estate and
other asset-backed securities during 2003 for a total investment balance of
$1,817,000,000 at June 30, 2003. At June 30, 2003, approximately 91% of the
investments were rated AAA or AA by Standard & Poor's and no investments were
rated lower than A-.
On July 2, 2003, WRP sold the Salem, New Hampshire property, one of the two
remaining real estate assets from WRP's 1998 merger with Value Property Trust.
The net sales price for this asset was approximately $4,100,000. As a result of
this sale and the expectation that WRP will sell the Philadelphia, Pennsylvania
property, WRP classified these assets as a discontinued operation and changed
the prior period statements of operations and balance sheet to conform the
presentations.
Corporate
Commenting on the activities of the second quarter, Jeffrey H. Lynford, Chairman
of the Board, stated, "Since 1999, we have sold over $500 million in assets,
including $182 million during 2003. Cash remains in excess of $40 million and
the nearest debt maturity on our balance sheet is May 2005.
Wellsford/Whitehall has been working with its lender to modify and extend the
terms of its credit facility. Leasing activity during the year has been weak
except for one renewal lease of 112,000 square feet to a credit tenant at one of
the New Jersey properties through June 2010. Unrestricted and restricted cash on
hand was approximately $28.7 million at June 30, 2003.
We continue to earn a return of approximately 9% on our investment in Second
Holding, which is a combination of allocated income from that venture and fees.
The Denver apartment market has further softened as a result of continuing
weakness in the local job market coupled with new product being placed in
service. Concessions across that market remain significant. One bright spot is
that the condo sales pace has picked up during the second and third quarters."
Wellsford Real Properties, Inc. is a real estate merchant banking firm organized
in 1997 and headquartered in New York City which acquires, develops, finances
and operates real estate properties and organizes and invests in private and
public real estate companies.
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
Wellsford Real Properties, Inc.
Financial Highlights
<table>
For the Three Months Ended For the Six Months Ended
Consolidated Statements of Operations June 30, June 30,
- ------------------------------------------------------ -------------------------------- -------------------------------
2003 2002* 2003 2002*
------------ -------------- -------------- -------------
<s> <c> <c> <c> <c>
REVENUES
Rental revenue........................................... $ 3,592,216 $ 3,664,692 $ 7,506,325 $ 7,082,808
Revenue from sales of residential units.................. 2,461,139 2,245,269 3,657,139 4,323,854
Interest revenue......................................... 941,107 1,042,645 1,899,150 2,110,812
Fee revenue.............................................. 313,172 145,029 878,570 262,009
------------- ------------- ------------- -------------
Total revenues......................................... 7,307,634 7,097,635 13,941,184 13,779,483
------------- ------------- ------------- -------------
COSTS AND EXPENSES
Cost of sales of residential units....................... 2,125,977 2,033,158 3,180,731 3,938,718
Property operating and maintenance....................... 1,311,937 1,165,445 2,282,987 2,321,035
Real estate taxes........................................ 374,971 337,712 705,966 661,156
Depreciation and amortization............................ 1,208,605 1,250,434 3,434,821 2,458,311
Property management...................................... 73,364 112,769 151,287 217,286
Interest................................................. 1,668,659 1,455,074 3,253,746 2,948,810
General and administrative............................... 1,414,875 1,658,177 2,925,078 3,331,840
------------- ------------- ------------- -------------
Total costs and expenses............................... 8,178,388 8,012,769 15,934,616 15,877,156
------------- ------------- ------------- -------------
(Loss) income from joint ventures......................... (790,177) 329,582 2,335,295 749,785
------------- ------------- ------------- -------------
(Loss) income before minority interest, income taxes,
accrued distributions and amortization of costs on
Convertible Trust Preferred Securities and
discontinued operations.................................. (1,660,931) (585,552) 341,863 (1,347,888)
Minority interest benefit ................................ 47,124 25,977 41,349 71,447
------------- ------------- ------------- -------------
(Loss) income before income taxes, accrued
distributions and amortization of costs on
Convertible Trust Preferred Securities and
discontinued operations.................................. (1,613,807) (559,575) 383,212 (1,276,441)
Income tax (benefit) expense.............................. (676,000) (4,000) 189,000 (38,000)
------------- ------------ ------------- -------------
(Loss) income before accrued distributions and
amortization of costs on Convertible Trust Preferred
Securities and discontinued operations................... (937,807) (555,575) 194,212 (1,238,441)
Accrued distributions and amortization of costs on
Convertible Trust Preferred Securities, net of
income tax benefit of $30,000, $105,000, $210,000
and $210,000, respectively............................... 494,953 419,953 839,907 839,907
------------- ------------- ------------- --------------
(Loss) from continuing operations......................... (1,432,760) (975,528) (645,695) (2,078,348)
(Loss) income from discontinued operations, net of
income tax (benefit) expense of $(13,000), $20,000,
$10,000, and $27,000, respectively....................... (5,542) 82,142 39,932 108,548
------------ ------------- ------------- --------------
Net (loss)................................................ $ (1,438,302) $ (893,386) $ (605,763) $ (1,969,800)
============ ============= ============ =============
Per share amounts, basic and diluted:
(Loss) from continuing operations....................... $ (0.22) $ (0.15) $ (0.10) $ (0.32)
(Loss) income from discontinued operations.............. -- 0.01 0.01 0.01
------------- -------------- ------------- --------------
Net (loss) ............................................. $ (0.22) $ (0.14) $ (0.09) $ (0.31)
============ ============= ============ =============
Weighted average number of common shares
outstanding, basic and diluted.......................... 6,453,730 6,437,390 6,452,916 6,423,397
============ ============= ============ =============
</table>
Wellsford Real Properties, Inc.
Financial Highlights
(continued)
Summary of Consolidated Balance Sheet Data June 30, December 31,
2003 2002*
-------------- -------------
(unaudited) (audited)
Real estate, net............................ $ 138,926,214 $ 143,842,012
Notes receivable............................ $ 28,096,000 $ 28,612,000
Assets held for sale........................ $ 6,277,699 $ 6,255,666
Investment in joint ventures................ $ 94,408,974 $ 94,180,991
Cash and cash equivalents................... $ 40,801,059 $ 38,581,841
Total assets................................ $ 328,998,529 $ 332,775,043
Mortgage notes payable...................... $ 110,203,140 $ 112,232,830
Convertible Trust Preferred Securities...... $ 25,000,000 $ 25,000,000
Total shareholders' equity.................. $ 176,313,476 $ 176,567,297
Other information:
Common shares outstanding.................. 6,453,730 6,450,586
Book value per share (unaudited)........... $ 27.32 $ 27.37
Enterprise assets (unaudited).............. $2,642,634,000 $2,646,437,000
- ------------------------------------------
*2002 information reclassified for discounted operations accounting treatment.