EXHIBIT 99.1
FOR: AMREP Corporation
641 Lexington Avenue
New York, NY 10022
CONTACT: Peter M. Pizza
Vice President and
Chief Financial Officer
(212) 705-4700
FOR IMMEDIATE RELEASE
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AMREP REPORTS SECOND QUARTER AND SIX MONTH RESULTS
NEW YORK, December 8, 2003 - AMREP Corporation (NYSE:AXR) today reported net
income of $2,716,000, or $0.41 per share, for its fiscal 2004 second quarter
ended October 31, 2003, compared to net income of $1,249,000, or $0.19 per
share, in the same period of fiscal 2003. Revenues were $32,702,000 in the
second quarter of fiscal 2004 versus $16,336,000 in the same period last year.
For the first six months of fiscal 2004, the Company reported revenues of
$66,319,000 and net income of $6,247,000, or $0.95 per share. For the comparable
period last year, the Company had revenues of $32,346,000 and net income of
$2,044,000, or $0.31 per share.
Second quarter revenues from the Company's Kable News Company subsidiary
increased from $13,175,000 in 2003 to $25,200,000 in the current year, and in
the six month period, revenues increased from $25,341,000 last year to
$51,193,000 this year. This substantial revenue growth reflected the April 2003
acquisition by Kable of the subscription fulfillment business of Electronic Data
Systems Corporation ("EDS"), offset in part by a revenue decrease in the
Newsstand Distribution Services business due to a decline in magazine sales
rates. Total pretax profit contributions from Kable News Company also improved
in both the three and six month periods ended October 31, 2003, with an increase
in the pretax profits of the Fulfillment Services business being partly offset
by a reduction in the pretax profit of Newsstand Distribution Services.
As a result of customer losses that were identified and known prior to the
acquisition of the EDS subscription fulfillment business and which have occurred
and will continue to occur throughout fiscal 2004, it is anticipated that the
revenues and pretax income of the acquired subscription fulfillment business in
the second half of 2004, and in particular the fourth quarter, will be reduced
from historical levels, including results for the first six months. Accordingly,
results for Kable's Fulfillment Services business for the first six months of
fiscal 2004 are not necessarily an indication of what may occur in future
periods.
2
Revenues from land sales at the Company's AMREP Southwest subsidiary also rose
significantly, from $2,091,000 and $4,584,000 in the second quarter and first
six months of 2003, respectively, to $6,744,000 and $13,138,000 in the
corresponding periods of the current year. This was the result of increased
sales activity of both improved and unimproved lots in the Company's principal
market of Rio Rancho, New Mexico, including a bulk sale in the first quarter of
the current fiscal year of 265 unimproved lots to another builder for $1,900,000
where there was no comparable transaction in the prior year. The gross profit on
land sales was 56% in the second quarter of 2003 compared to 50% in the second
quarter of the current year, and increased for the six month period from 49% in
2003 to 54% in 2004 because of the higher proportion of unimproved lots sold in
the first quarter of 2004, including the bulk sale described above, which
generally have higher gross profit margins than developed lots. Pretax profit
from the real estate operations also improved significantly as a result of the
strong revenue growth. As previously reported, revenues and related gross
profits from land sales can vary significantly from period to period as a result
of many factors, including the nature and timing of specific transactions, and
prior results are not necessarily an indication of what may occur in future
periods.
AMREP Corporation's subsidiary, Kable News Company, Inc., distributes magazines
to wholesalers and provides subscription fulfillment and related services to
publishers and others, and its AMREP Southwest Inc. subsidiary is a major
landholder and leading developer of real estate in New Mexico.
*****
The statements in this news release that are not historical financial
statements, including statements regarding revenues and profitability of the
subscription fulfillment business acquired from EDS, are forward-looking
statements within the meaning of the federal securities laws. These statements
are subject to numerous risks and uncertainties, many of which are beyond the
control of AMREP and that could cause actual results to differ materially from
such statements. Further information about these and other relevant risks and
uncertainties may be found in the Company's filings with the Securities and
Exchange Commission, all of which are available from the Commission as well as
from other sources. Recipients of this news release are cautioned to consider
these risks and uncertainties and to not place undue reliance on the
forward-looking statements contained therein. AMREP disclaims any intention or
obligation to update or revise any forward-looking statements, whether as a
result of new information, future events or otherwise.
(Financial Data Follows)
3
AMREP Corporation
and Subsidiaries
Financial Highlights
(Unaudited)
Three Months Ended October 31,
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2003 2002
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Revenues $ 32,702,000 $ 16,336,000
Net income $ 2,716,000 $ 1,249,000
Earnings per share - Basic and Diluted $ 0.41 $ 0.19
Weighted average number of common
shares outstanding 6,594,000 6,579,000
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Six Months Ended October 31,
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2003 2002
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Revenues $ 66,319,000 $ 32,346,000
Net income $ 6,247,000 $ 2,044,000
Earnings per share - Basic and Diluted $ 0.95 $ 0.31
Weighted average number of common shares
outstanding 6,591,000 6,577,000
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