Back to GetFilings.com



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549

FORM 10-Q

{X} QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2004

OR

{  } TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _______________________________ to ______________________________

Commission file number 001-12917

Wellsford Real Properties, Inc.

(Exact Name of Registrant as Specified in Its Charter)

Maryland
(State of Other Jurisdiction of Incorporation or Organization) 		  13-3926898
(IRS Employer Identification No.)

535 Madison Avenue, New York, NY 10022

(Address of Principal Executive Offices) (Zip Code)

(212) 838-3400

(Registrant's Telephone Number, Including Area Code)

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

  Yes X
 No
 
Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).

  Yes X
 No
 
The number of the registrant’s shares of common stock outstanding was 6,459,738 as of May 4, 2004 (including 169,903 shares of class A-1 common stock).





TABLE OF CONTENTS
        Page
Number
PART I. FINANCIAL INFORMATION:
 
Item 1.		   Financial Statements  
     
Consolidated Balance Sheets as of March 31, 2004 (unaudited)
     and December 31, 2003		 3
     
Consolidated Statements of Operations (unaudited) for the Three
    Months Ended March 31, 2004 and 2003		 4
     
Consolidated Statements of Cash Flows (unaudited) for the
    Three Months Ended March 31, 2004 and 2003		 5
     
Notes to Consolidated Financial Statements (unaudited)		 6
 
Item 2.		  
Management's Discussion and Analysis of Financial Condition
    and Results of Operations		 19
 
Item 3.		   Quantitative and Qualitative Disclosures about Market Risk 31
 
Item 4.		   Controls and Procedures 32

PART II.		 OTHER INFORMATION:
 
Item 1.		   Legal Proceedings 32
 
Item 6.		   Exhibits and Reports on Form 8-K 33
 
Signatures		     35
 
Exhibits		     36




- 2 -

WELLSFORD REAL PROPERTIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS

  March 31,
2004
 December 31,
2003
  (Unaudited)  
ASSETS              
Real estate assets, at cost:            
   Land   $18,735,969   $18,735,969  
   Buildings and improvements    113,556,952    113,556,952  
 
     132,292,921    132,292,921  
   Less:            
      Accumulated depreciation    (17,838,646 )  (16,774,867 )
 
     114,454,275    115,518,054  
   Residential units available for sale    7,573,424    9,235,970  
   Land held for development    5,901,891    5,828,453  
 
     127,929,590    130,582,477  
Note receivable    2,064,000    3,096,000  
Asset held for sale    2,353,889    2,334,535  
Investment in joint ventures    48,903,368    53,759,723  
 
Total real estate and investments    181,250,847    189,772,735  
             
Cash and cash equivalents    53,333,545    55,377,515  
Restricted cash and investments    10,592,045    10,210,405  
Investments in U.S. Government securities    29,920,017    27,516,211  
Prepaid and other assets    2,702,768    2,950,260  
 
             
Total assets   $277,799,222   $285,827,126  
 
             
LIABILITIES AND SHAREHOLDERS' EQUITY            
Liabilities:            
  Mortgage notes payable   $109,140,825   $109,504,562  
  Junior subordinated debentures    25,775,000    --  
  Accrued expenses and other liabilities, including the liability for            
    deferred compensation of $10,167,267 and $9,748,487    15,356,115    16,283,419  
  Liabilities attributable to assets held for sale    280,836    317,486  
 
Total liabilities    150,552,776    126,105,467  
 
             
Company-obligated, mandatorily redeemable convertible preferred            
    securities of WRP Convertible Trust I, holding solely 8.25%            
    junior subordinated debentures of Wellsford Real Properties, Inc.            
    ("Convertible Trust Preferred Securities")    --    25,000,000  
             
Minority interests    3,408,130    3,447,615  
             
Commitments and contingencies            
             
Shareholders' equity:
    Series A 8% convertible redeemable preferred stock, $.01 par value
    per share, 2,000,000 shares authorized, no shares issued and
    outstanding 		    --    --  
Common stock, 98,825,000 shares authorized, $.02 par value per
    share - 6,288,947 and 6,286,091 shares issued and outstanding 		    125,779    125,722  
Class A-1 common stock, 175,000 shares authorized, $.02 par value
    per share - 169,903 shares issued and outstanding 		    3,398    3,398  
Paid in capital in excess of par value     162,788,306    162,736,723  
Retained earnings (deficit)     (32,761,129 )  (25,242,236 )
Accumulated other comprehensive loss; share of unrealized loss on
    interest rate protection contract purchased by joint venture
    investment, net of income tax benefit 		    (18,904 )  (50,429 )
Treasury stock, 305,249 and 305,249 shares     (6,299,134 )  (6,299,134 )
 
Total shareholders' equity     123,838,316    131,274,044  
 
Total liabilities and shareholders' equity    $277,799,222   $285,827,126  
 

See notes to Consolidated Financial Statements

- 3 -

WELLSFORD REAL PROPERTIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)

  For the Three Months Ended
March 31,
  2004
 2003
REVENUES               
   Rental revenue   $ 3,360,264   $ 3,914,109 
   Revenue from sales of residential units    2,286,216    1,196,000 
   Interest revenue    249,651    958,043 
   Fee revenue    270,603    565,398 
 
    Total revenues    6,166,734    6,633,550 
 
            
COSTS AND EXPENSES           
   Cost of sales of residential units    1,914,525    1,054,754 
   Property operating and maintenance    1,073,955    971,050 
   Real estate taxes    355,766    330,995 
   Depreciation and amortization    1,137,621    2,226,216 
   Property management    83,115    77,923 
   Interest:           
    Mortgage notes payable    1,661,320    1,585,087 
    Junior subordinated debentures    540,938    -- 
   General and administrative    1,813,132    1,510,203 
 
    Total costs and expenses    8,580,372    7,756,228 
 
            
(Loss) income from joint ventures    (5,091,593 )  2,585,215 
 
            
(Loss) income before minority interest, income taxes, accrued           
  distributions and amortization of costs on Convertible Trust           
  Preferred Securities and discontinued operations    (7,505,231 )  1,462,537 
            
Minority interest benefit (expense)    39,485    (5,775)
 
            
(Loss) income before income taxes, accrued distributions and           
  amortization of costs on Convertible Trust Preferred Securities           
  and discontinued operations    (7,465,746 )  1,456,762 
            
Income tax expense    40,000    681,000 
 
            
(Loss) income before accrued distributions and amortization of costs           
  on Convertible Trust Preferred Securities and discontinued           
  operations    (7,505,746 )  775,762 
            
Accrued distributions and amortization of costs on Convertible Trust
   Preferred Securities, net of income tax benefit of $180,000 		    --    344,954 
 
            
(Loss) income from continuing operations    (7,505,746 )  430,808 
            
(Loss) income from discontinued operations, net of income tax
    expense of $0 and $23,000, respectively		    (13,147 )  45,474 
 
            
Net (loss) income   $ (7,518,893 ) $ 476,282 
 
            
Per share amounts, basic and diluted:           
   (Loss) income from continuing operations   $ (1.16 ) $ 0.06 
   (Loss) income from discontinued operations    --     0.01 
 
   Net (loss) income   $ (1.16 ) $ 0.07 
 
            
Weighted average number of common shares outstanding:           
   Basic    6,457,531    6,452,092 
 
   Diluted    6,457,531    6,452,691 
 

See notes to Consolidated Financial Statements

- 4 -

WELLSFORD REAL PROPERTIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)

  For the Three Months Ended
March 31,
  2004
 2003
CASH FLOWS FROM OPERATING ACTIVITIES:              
  Net (loss) income   $ (7,518,893 ) $ 476,282  
  Adjustments to reconcile net (loss) income to net cash (used in) provided            
     by operating activities:            
      Share of impairment charge from investment in joint venture     6,759,007    --  
      Depreciation and amortization    1,146,950    2,292,720  
      Amortization of deferred compensation    --    88,166  
      Net amortization of premiums/discounts on U.S. Government            
        securities    5,569    --  
      Distributions (less than) joint venture income    (1,493,658 )  (1,757,891 )
      Undistributed minority interest (benefit) expense    (39,485 )  5,775  
      Shares issued for director compensation    16,000    24,000  
      Value of option grants for director compensation    32,814    --  
      Changes in assets and liabilities:            
        Restricted cash and investments    (381,640 )