Wellsford Real Properties, Inc. Reports First Quarter 2002 Results: Year Over Year Cash Flow Per Share Holds Constant.Business Editors NEW YORK--(BUSINESS WIRE)--May 8, 2002 Wellsford Real Properties, Inc. (AMEX AMEX See: American Stock Exchange : "WRP WRP Wetland Reserve Program WRP Workforce Recruitment Program WRP Workers Revolutionary Party WRP Windows Resource Protection (Microsoft Windows Vista) WRP Wetlands Restoration Program WRP Work Restriction Protection ") reported first quarter 2002 revenues of $6,990,948, a net loss of $(1,076,414) or $(0.17) per basic and diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share and net cash flow of $1,417,003 or $0.22 per basic and diluted share. For the comparable quarter in 2001, WRP reported revenues of $11,900,234, net income of $1,663,482 or $0.20 per basic and diluted share and net cash flow of $1,738,093 or $0.21 per basic and diluted share. First Quarter 2002 and Subsequent Activities Wellsford/Whitehall At March 31, 2001, WRP had a 32.58% ownership interest in Wellsford/Whitehall, a private joint venture that owns and operates 35 properties totaling 3,905,000 square feet. During the first quarter of 2002, Wellsford/Whitehall leased 67,000 square feet at a weighted average base rate of approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $26.00 per square foot. The portfolio occupancy Gaining or having physical possession of real property subject to, or in the absence of, legal right or title. In a fire insurance policy, for example, the term occupancy was 70% at March 31, 2002. Wellsford Development During the first quarter of 2002, WRP sold nine condominium condominium In modern property law, individual ownership of one dwelling unit within a multidwelling building. Unit owners have undivided ownership interest in the land and those portions of the building shared in common. units at the Silver Mesa phase of Palomino Palomino Colour type of horse distinguished by its cream, yellow, or gold coat and a white or silver mane. It is popular in pleasure and parade classes. Palominos may conform to the breed types of several light breeds, including the Arabian horse and the American Quarter Horse. Park. Gross proceeds from these sales were $2,079,000, of which $1,741,000 was applied to principal repayments on the related loan. WRP sold 32 units for gross proceeds of $6,448,000 in the comparable 2001 period. Through March 31, 2002, 114 units have been sold and 150 units remain to be sold. The Blue Ridge Blue Ridge, eastern range of the Appalachian Mts., extending south from S Pa. to N Ga.; highest mountains in the E United States. Mt. Mitchell, 6,684 ft (2,037 m) high, is the tallest peak. Beginning with a narrow ridge in the north, c. and Red Canyon canyon Very narrow, deep valley cut by a river through resistant rock and having steep, almost vertical sides. Canyons occur most often in arid or semiarid regions. Some canyons (e.g., the Grand Canyon) are spectacular natural features. See also submarine canyon. phases of Palomino Park were 83% occupied oc·cu·py tr.v. oc·cu·pied, oc·cu·py·ing, oc·cu·pies 1. To fill up (time or space): a lecture that occupied three hours. 2. To dwell or reside in. 3. and the recently completed Green River phase, which is in its initial lease-up, was 67% occupied at March 31, 2002. Wellsford Capital Second Holding, a special purpose finance company in which WRP has a 51% equity interest, purchased $131,000,000 of investments in real estate and other asset-backed securities Asset-backed security A security that is collateralized by loans, leases, receivables, or installment contracts on personal property, not real estate. asset-backed security A debt security collateralized by specific assets. for a total investment balance of $1,057,000,000 at March 31, 2002. Corporate As a result of the 2001 restructuring charge restructuring charge The expense of reorganizing a company's operations. A restructuring charge is an infrequent expense that generally results from asset writedowns or facility closings. and cost cutting measures, WRP's general and administrative expenses decreased 13% from the first quarter 2001. Commenting on the activities of the first quarter, Jeffrey H. Lynford, Chairman of the Board, stated, "Leasing and sales activities during the first quarter were very slow. Our profitability this year is dependent upon sales of office properties and condominiums. While marketing programs are in place, any office transactions to be consummated con·sum·mate tr.v. con·sum·mat·ed, con·sum·mat·ing, con·sum·mates 1. a. To bring to completion or fruition; conclude: consummate a business transaction. b. will not occur before the third quarter. Meanwhile, we maintain $33 million of cash for liquidity and have no debt maturing this year." This press release may contain certain forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. within the meaning of Section 27A of the Securities Act of 1933, as amended a·mend v. a·mend·ed, a·mend·ing, a·mends v.tr. 1. To change for the better; improve: amended the earlier proposal so as to make it more comprehensive. 2. , 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 Inferred from circumstances; known indirectly. In its legal application, the term implied is used in contrast with express, where the intention regarding the subject matter is explicitly and directly indicated. 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 December: see month. 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 wor·thy adj. wor·thi·er, wor·thi·est 1. Having worth, merit, or value; useful or valuable. 2. Honorable; admirable: a worthy fellow. 3. 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 Noun 1. cost overrun - excess of cost over budget; "the cost overrun necessitated an additional allocation of funds in the budget" cost - the total spent for goods or services including money and time and labor ; ability to comply with zoning and other laws; vacancies at commercial and multifamily properties; dependence on rental income Noun 1. rental income - income received from rental properties income - the financial gain (earned or unearned) accruing over a given period of time from real property; adverse consequences of debt financing Debt Financing When a firm raises money for working capital or capital expenditures by selling bonds, bills, or notes to individual and/or institutional investors. In return for lending the money, the individuals or institutions become creditors and receive a promise to repay including, without limitation, the necessity of future financings to repay debt obligations; inability to meet financial and valuation covenants; inability to repay financings; risks of investments in debt instruments, including possible payment defaults and reductions in the value of collateral collateral (kəlăt`ərəl), something of value given or pledged as security for payment of a loan. Collateral consists usually of financial instruments, such as stocks, bonds, and negotiable paper, rather than physical goods, although ; uncertainty pertaining per·tain intr.v. per·tained, per·tain·ing, per·tains 1. To have reference; relate: evidence that pertains to the accident. 2. to the WTC WTC World Trade Center, see there Certificates, including scheduled interest payments, the ultimate repayment Repayment The act of paying back a debt. Notes: Everyone has to repay their debts eventually. See also: Debt, Defeasance, Loan of principal, adequate insurance coverages, the ability of insurers to pay claims and effects of changes in ratings from Standard & Poor's and Fitch fitch: see polecat. ; 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.
Wellsford Real Properties, Inc.
Financial Highlights
For the Three Months Ended
Consolidated Statements of Operations March 31,
2002 2001
----- ----
(unaudited)
REVENUES
Rental revenue $ 3,727,216 $ 3,833,514
Revenue from sales of
residential units 2,078,585 6,447,600
Interest revenue 1,068,167 1,543,904
Fee revenue 116,980 75,216
Total revenues 6,990,948 11,900,234
COSTS AND EXPENSES
Cost of sales of residential
units 1,905,560 5,650,801
Property operating and
maintenance 1,310,278 988,527
Real estate taxes 364,330 364,822
Depreciation and
amortization 1,260,805 1,050,143
Property management 131,709 165,086
Interest 1,493,736 1,125,184
General and administrative 1,673,663 1,931,654
Total costs and expenses 8,140,081 11,276,217
Income from joint ventures 420,203 1,946,058
(Loss) income before minority
interest, income taxes and
accrued distributions and
amortization of costs on
Convertible Trust Preferred
Securities (728,930) 2,570,075
Minority interest 45,470 (91,639)
(Loss) income before income
taxes and accrued
distributions and
amortization of costs on
Convertible Trust Preferred
Securities (683,460) 2,478,436
Income tax (benefit) expense (27,000) 465,000
(Loss) income before accrued
distributions and amortization
of costs on Convertible Trust
Preferred Securities (656,460) 2,013,436
Accrued distributions and
amortization of costs on
Convertible Trust Preferred
Securities, net of income
tax benefit of $105,000 and
$175,000 419,954 349,954
Net (loss) income $ (1,076,414)$ 1,663,482
Net (loss) income per common
share, basic $ (0.17)$ 0.20
Net (loss) income per common
share, diluted $ (0.17)$ 0.20
Weighted average number of
common shares outstanding,
basic 6,409,248 8,351,623
Weighted average number of
common shares outstanding,
diluted 6,409,248 8,356,001
Wellsford Real Properties, Inc.
Financial Highlights
(continued)
For the Three Months Ended
Calculation of Net Cash Flow(a) March 31,
2002 2001
----- ----
(unaudited)
Net (loss) income $ (1,076,414)$ 1,663,482
Add/(deduct):
Depreciation and
amortization 1,242,282 1,023,008
Accumulated depreciation and
recovery of impairment
provision on assets sold -- (2,052,119)
Share of joint venture
depreciation and
amortization, net 1,251,135 1,103,722
Net cash flow $ 1,417,003 $ 1,738,093
Net cash flow per common share,
basic $ 0.22 $ 0.21
Net cash flow per common share,
diluted $ 0.22 $ 0.21
Weighted average number of
common shares outstanding for
net cash flow, basic 6,409,248 8,351,623
Weighted average number of
common shares outstanding for
net cash flow, diluted 6,422,131 8,356,001
Summary of Consolidated Balance March 31, December 31,
Sheet Data 2002 2001
(unaudited) (audited)
Real estate, net $ 158,636,071 $ 161,090,132
Notes receivable $ 33,568,363 $ 34,784,727
Investment in joint ventures $ 95,952,177 $ 95,806,509
Cash and cash equivalents $ 33,268,912 $ 36,148,529
Total assets $ 339,800,104 $ 345,838,157
Mortgage notes payable $ 120,122,276 $ 121,730,604
Convertible Trust Preferred
Securities $ 25,000,000 $ 25,000,000
Total shareholders' equity $ 177,342,644 $ 178,078,702
Other information:
Common shares outstanding 6,409,281 6,405,241
Book value per share $ 27.67 $ 27.80
Enterprise assets (unaudited) $1,932,864,000 $1,855,244,000
(a) The Company considers Net Cash Flow to be an important measure of
its performance, to be considered in addition to Net Income,
predicated on Generally Accepted Accounting Principles. Net Cash
Flow, for the Company's purposes, represents Net Income as
prescribed by Generally Accepted Accounting Principles, plus
depreciation and amortization on real estate assets, share of
depreciation and amortization from unconsolidated partnerships and
joint ventures, offset by accumulated depreciation and recovery of
impairment provisions on assets sold. Included in such cash flow
is the Company's share of undistributed cash retained by the
unconsolidated partnerships and joint ventures for continuing
investment in lieu of future fundings as well as cash obtained
from gains on sales of properties. Net Cash Flow should not be
considered a replacement for Net Income as an indicator of the
Company's operating performance and is not necessarily indicative
of cash available to fund cash needs.
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