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
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NEW YORK, December 8, 2004 - AMREP Corporation (NYSE:AXR) today reported net
income of $4,195,000, or $0.63 per share, for its fiscal 2005 second quarter
ended October 31, 2004, compared to net income of $2,716,000, or $0.41 per
share, in the same period of fiscal 2004. Revenues were $33,743,000 in the
second quarter of fiscal 2005 versus $32,702,000 in the same period last year.
For the first six months of fiscal 2005, the Company reported revenues of
$67,976,000 and net income of $8,221,000, or $1.24 per share. For the comparable
period last year, the Company had revenues of $66,319,000 and net income of
$6,247,000, or $0.95 per share.
Revenues from the Fulfillment Services business of the Company's Kable News
Company subsidiary were $21,967,000 in the second quarter of 2005 compared to
$22,232,000 in the corresponding period of 2004, and for the six month period
revenues were $42,436,000 in the current year versus $44,976,000 last year.
These decreases were principally the result of customer losses at Kable's
Colorado fulfillment business which had been identified and known prior to the
acquisition of that business in 2003. The decline in Fulfillment Services'
revenues was offset in part by additional revenues from Kable's Newsstand
Distribution Services business, which increased from $2,968,000 and $6,217,000
in the second quarter and first six months of 2004, respectively, to $3,132,000
and $6,313,000 in the comparable periods of the current year. As a result of
cost reductions in 2005, both business segments reported increased pretax profit
contributions in the second quarter and first six months of 2005 versus the same
periods last year. Fulfillment Services' pretax income contribution increased
from $1,478,000 and $3,408,000 in last year's second quarter and first six
months, respectively, to $1,911,000 and $3,716,000 in the corresponding periods
this year, and Newsstand Distribution Services increased its pretax profit
contribution from $252,000 and $596,000 in these same periods of 2004 to
$628,000 and $1,142,000 in the current year.
Revenues from land sales at the Company's AMREP Southwest subsidiary rose from
$6,744,000 and $13,138,000 in the second quarter and first six months of 2004,
respectively, to $7,804,000 and $17,486,000 in the corresponding periods of the
current year. This improvement was the result of increased sales of both
commercial properties and undeveloped residential lots in the Company's
principal market of Rio Rancho, New Mexico in 2005. The gross profit on land
sales increased from 50% and 54% in the second quarter and first six months of
2004, respectively, to 64% and 58% for these same periods of 2005 because a
higher proportion of undeveloped lots, which generally have higher gross profit
margins than developed lots, were sold in the current year. As a result of the
additional revenues and increased gross profit percentages, the pretax profit
contribution from land sale operations improved from $2,442,000 and $5,689,000
in the second quarter and first six months of 2004, respectively, to $3,959,000
and $7,897,000 in the same periods this 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, so that prior results are not necessarily a good indication of
what may occur in future periods.
The Company's effective tax rate decreased to 29% and 33% in the second quarter
and first six months of 2005, respectively, from 37% in the same periods last
year due to the effect of a tax benefit associated with a charitable
contribution of land made by the real estate business in the second quarter of
2005.
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.
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(Financial Data Follows)
AMREP Corporation
and Subsidiaries
Financial Highlights
(Unaudited)
Three Months Ended October 31,
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2004 2003
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Revenues $ 33,743,000 $ 32,702,000
Net income $ 4,195,000 $ 2,716,000
Earnings per share - Basic and
Diluted $ 0.63 $ 0.41
Weighted average number of
common shares outstanding 6,615,000 6,594,000
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Six Months Ended October 31,
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2004 2003
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Revenues $ 67,976,000 $ 66,319,000
Net income $ 8,221,000 $ 6,247,000
Earnings per share - Basic and
Diluted $ 1.24 $ 0.95
Weighted average number of
common shares outstanding 6,611,000 6,591,000
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