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, 2005 |
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 6,467,639 as of May 3, 2005 (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, 2005 (unaudited) | |||
| and December 31, 2004 |
3 | ||
| Consolidated Statements of Operations (unaudited) for the Three Months | |||
| Ended March 31, 2005 and 2004 |
4 | ||
| Consolidated Statements of Cash Flows (unaudited) for the | |||
| Three Months Ended March 31, 2005 and 2004 |
5 | ||
| Notes to Consolidated Financial Statements (unaudited) |
6 | ||
| Item 2. | Management's Discussion and Analysis of Financial Condition | ||
| and Results of Operations |
16 | ||
| Item 3. | Quantitative and Qualitative Disclosures about Market Risk |
24 | |
| Item 4. | Controls and Procedures |
25 | |
| PART II. |
OTHER INFORMATION: |
||
| Item 1. | Legal Proceedings |
25 | |
| Item 6. | Exhibits |
25 | |
| Signatures |
27 | ||
| Exhibits |
28 | ||
- 2 -
|
WELLSFORD REAL PROPERTIES, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS |
| March 31, 2005 |
December 31, 2004 | |||||||
|---|---|---|---|---|---|---|---|---|
| (unaudited) | ||||||||
| ASSETS | ||||||||
| Real estate assets, at cost: | ||||||||
| Land | $ | 18,735,969 | $ | 18,735,969 | ||||
| Buildings and improvements | 113,591,221 | 113,575,359 | ||||||
| 132,327,190 | 132,311,328 | |||||||
| Less: | ||||||||
| Accumulated depreciation | (22,095,719 | ) | (21,030,744 | ) | ||||
| 110,231,471 | 111,280,584 | |||||||
| Residential units available for sale | 152,968 | 353,702 | ||||||
| Construction in process | 22,362,300 | 18,609,685 | ||||||
| 132,746,739 | 130,243,971 | |||||||
| Notes receivable | 1,189,500 | 1,189,500 | ||||||
| Investment in joint ventures | 13,250,942 | 13,984,968 | ||||||
| Total real estate and investments | 147,187,181 | 145,418,439 | ||||||
| Cash and cash equivalents | 67,856,759 | 65,863,790 | ||||||
| Restricted cash and investments | 14,100,898 | 13,534,175 | ||||||
| Investments in U.S. Government securities | 20,049,867 | 27,551,254 | ||||||
| Prepaid and other assets | 2,274,983 | 2,269,652 | ||||||
| Total assets | $ | 251,469,688 | $ | 254,637,310 | ||||
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||
| Liabilities: | ||||||||
| Mortgage notes payable | $ | 109,152,470 | $ | 108,852,625 | ||||
| Convertible junior subordinated debentures ("Debentures") | 25,775,000 | 25,775,000 | ||||||
| Accrued expenses and other liabilities | 5,182,505 | 6,646,117 | ||||||
| Deferred compensation liability | 10,958,811 | 10,156,667 | ||||||
| Total liabilities | 151,068,786 | 151,430,409 | ||||||
| Minority interests | 4,392,595 | 4,423,632 | ||||||
| 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 | ||||||||
| - 6,297,736 and 6,296,620 shares issued and outstanding | 125,955 | 125,933 | ||||||
| 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 | 162,814,736 | 162,848,758 | ||||||
| Retained earnings (deficit) | (60,736,648 | ) | (57,945,686 | ) | ||||
| Treasury stock, 298,875 and 302,062 shares | (6,199,134 | ) | (6,249,134 | ) | ||||
| Total shareholders' equity | 96,008,307 | 98,783,269 | ||||||
| Total liabilities and shareholders' equity | $ | 251,469,688 | $ | 254,637,310 | ||||
| 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, | ||||||||
|---|---|---|---|---|---|---|---|---|
| 2005 |
2004 | |||||||
| REVENUES | ||||||||
| Rental revenue | $ | 3,392,722 | $ | 3,360,264 | ||||
| Revenue from sales of residential units | 278,175 | 2,286,216 | ||||||
| Interest revenue | 447,708 | 249,651 | ||||||
| Fee revenue | 182,900 | 270,603 | ||||||
| Total revenues | 4,301,505 | 6,166,734 | ||||||
| COSTS AND EXPENSES | ||||||||
| Cost of sales of residential units | 219,118 | 1,914,525 | ||||||
| Property operating and maintenance | 1,182,664 | 1,073,955 | ||||||
| Real estate taxes | 283,789 | 355,766 | ||||||
| Depreciation and amortization | 1,104,042 | 1,137,621 | ||||||
| Property management | 90,971 | 83,115 | ||||||
| Interest: | ||||||||
| Mortgage notes payable | 1,334,543 | 1,661,320 | ||||||
| Debentures | 524,954 | 540,938 | ||||||
| General and administrative | 1,833,070 | 1,813,132 | ||||||
| Total costs and expenses | 6,573,151 | 8,580,372 | ||||||
| (Loss) from joint ventures | (490,353 | ) | (5,091,593 | ) | ||||
| (Loss) before minority interest, income taxes and | ||||||||
| discontinued operations | (2,761,999 | ) | (7,505,231 | ) | ||||
| Minority interest benefit | 31,037 | 39,485 | ||||||
| (Loss) before income taxes and discontinued operations | (2,730,962 | ) | (7,465,746 | ) | ||||
| Income tax expense | 60,000 | 40,000 | ||||||
| (Loss) from continuing operations | (2,790,962 | ) | (7,505,746 | ) | ||||
| (Loss) from discontinued operations, net of income tax | ||||||||
| expense of $0 | -- | (13,147 | ) | |||||
| Net (loss) | $ | (2,790,962 | ) | $ | (7,518,893 | ) | ||
| Per share amounts, basic and diluted: | ||||||||
| (Loss) from continuing operations | $ | (0.43 | ) | $ | (1.16 | ) | ||
| (Loss) from discontinued operations | -- | -- | ||||||
| Net (loss) | $ | (0.43 | ) | $ | (1.16 | ) | ||
| Weighted average number of common shares outstanding: | ||||||||
| Basic | 6,467,639 | 6,457,531 | ||||||
| Diluted | 6,467,639 | 6,457,531 | ||||||
| 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, | ||||||||
|---|---|---|---|---|---|---|---|---|
| 2005 |
2004 | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
| Net (loss) | $ | (2,790,962 | ) | $ | (7,518,893 | ) | ||
| Adjustments to reconcile net (loss) to net cash (used in) operating activities: | ||||||||
| Impairment charges and transaction losses from investments in joint ventures | -- | 6,759,007 | ||||||
| Depreciation and amortization | 1,113,371 | 1,146,950 | ||||||
| Net amortization of premiums/discounts on U.S. Government securities | 1,387 | 5,569 | ||||||
| Distributions in excess of (less than) joint venture income (loss) | 509,810 | (1,493,658 | ) | |||||
| Undistributed minority interest (benefit) | (31,037 | ) | (39,485 | ) | ||||
| Stock issued for director compensation | 16,000 | 16,000 | ||||||
| Value of option grants for director compensation | -- | 32,814 | ||||||
| Changes in assets and liabilities: | ||||||||
| Restricted cash and investments | (566,723 | ) | (381,640 | ) | ||||
| Residential units available for sale | 200,734 | 1,662,546 | ||||||
| Assets held for sale | -- | (19,354 | ) | |||||
| Construction in process | (3,752,615 | ) | -- | |||||
| Prepaid and other assets | (53,727 | ) | 207,414 | |||||
| Accrued expenses and other liabilities | (661,468 | ) | (960,118 | ) | ||||
| Liabilities attributable to assets held for sale | -- | (36,650 | ) | |||||
| Net cash (used in) operating activities | (6,015,230 | ) | (619,498 | ) | ||||
| CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||
| Investments in real estate assets | (15,862 | ) | (73,438 | ) | ||||
| Return of capital from investments in joint ventures | 224,216 | 354,438 | ||||||
| Purchase of U.S. Government securities | -- | (2,409,375 | ) | |||||
| Redemption of U.S. Government securities | 7,500,000 | -- | ||||||
| Repayments of notes receivable | -- | 1,032,000 | ||||||
| Net cash provided by (used in) investing activities | 7,708,354 | (1,096,375 | ) | |||||
| CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
| Borrowing from mortgage notes payable and construction loans | 2,986,959 | -- | ||||||
| Repayments of mortgage notes payable | (2,687,114 | ) | (363,737 | ) | ||||
| Proceeds from option exercises | -- | 35,640 | ||||||
| Net cash provided by (used in) financing activities | 299,845 | (328,097 | ) | |||||
| Net increase (decrease) in cash and cash equivalents | 1,992,969 | (2,043,970 | ) | |||||
| Cash and cash equivalents, beginning of period | 65,863,790 | 55,377,515 | ||||||
| Cash and cash equivalents, end of period | $ | 67,856,759 | $ | 53,333,545 | ||||
| SUPPLEMENTAL INFORMATION: | ||||||||
| Cash paid during the period for interest, including amounts capitalized | ||||||||