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
AMREP REPORTS THIRD QUARTER AND NINE MONTH RESULTS
NEW YORK, February 26, 2004 - AMREP Corporation (NYSE: AXR) today reported net
income of $3,383,000, or $0.51 per share, for its fiscal 2004 third quarter
ended January 31, 2004, compared to net income of $2,677,000, or $0.41 per
share, in the same period of fiscal 2003. Revenues were $33,360,000 in the third
quarter of fiscal 2004 versus $20,858,000 in the same period last year. For the
first nine months of fiscal 2004, the Company reported revenues of $99,679,000
and net income of $9,630,000, or $1.46 per share. For the comparable period last
year, the Company had revenues of $53,204,000 and net income of $4,721,000, or
$0.72 per share.
Results for the third quarter of 2004 included a pretax gain of approximately
$1,700,000 (equivalent to $0.16 per share) resulting from the accelerated
recognition of a deferred actuarial gain due to the curtailment of future
service benefits under the Company's pension plan. Partly offsetting this amount
was a charge of approximately $700,000 (equivalent to $0.07 per share) for the
estimated costs of relocating and centralizing certain fulfillment operations.
Revenues from the Company's Kable News Company subsidiary rose significantly,
from $13,316,000 and $38,657,000 in the third quarter and first nine months of
2003, respectively, to $24,914,000 and $76,107,000 in the corresponding periods
of the current 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. The pretax profit of Kable News Company also improved in both the three
and nine month periods ended January 31, 2004 as compared to the same periods
last year, with an increase in the pretax profit of the Fulfillment Services
business being partly offset by a reduction in the pretax profit of Newsstand
Distribution Services due primarily to lower revenues.
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 through the fourth quarter of fiscal 2004, it is
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anticipated that the revenues and pretax income of the acquired subscription
fulfillment business in the fourth quarter of 2004 will be lower than what was
reported in each of the first three quarters. Accordingly, results for Kable's
Fulfillment Services business for the first nine months of fiscal 2004 are not
necessarily a good indication of what may occur in future periods.
Revenues from land sales at the Company's AMREP Southwest subsidiary also
increased in fiscal 2004, from $6,899,000 in the third quarter of 2003 to
$7,738,000 in the same quarter of the current year, and for the nine month
period, revenues increased from $11,483,000 last year to $20,876,000 this year.
This improvement was the result of greater sales of both developed and
undeveloped lots in the Company's principal market of Rio Rancho, New Mexico in
2004. The gross profit on land sales declined from 60% in the third quarter of
2003 to 50% for the same period of 2004 because a higher proportion of
undeveloped lots, which generally have higher gross profit margins than
developed lots, were sold in last year's third quarter. For the first nine
months of 2003 and 2004, the gross profit percentage on land sales was 55% and
53%, respectively, as the mix of developed and undeveloped lots was generally
comparable for these periods. Pretax profit from real estate operations also
improved significantly in both the third quarter and first nine months of 2004
versus the same periods last year. 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 a good indication of what
may occur in future periods.
AMREP Corporation's Kable News Company, Inc. subsidiary 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)
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AMREP Corporation
and Subsidiaries
Financial Highlights
(Unaudited)
Three Months Ended January 31,
------------------------------
2004 2003
---- ----
Revenues $ 33,360,000 $ 20,858,000
Net income $ 3,383,000 $ 2,677,000
Earnings per share - Basic and Diluted $ 0.51 $ 0.41
Weighted average number of common shares
outstanding 6,598,000 6,581,000
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Nine Months Ended January 31,
-----------------------------
2004 2003
---- ----
Revenues $ 99,679,000 $ 53,204,000
Net income $ 9,630,000 $ 4,721,000
Earnings per share - Basic and Diluted $ 1.46 $ 0.72
Weighted average number of common shares
outstanding 6,594,000 6,579,000
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