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, March 9, 2005 - AMREP Corporation (NYSE:AXR) today reported net income
from continuing operations of $2,511,000, or $0.38 per share, for its fiscal
2005 third quarter ended January 31, 2005, compared to net income from
continuing operations of $3,341,000, or $0.50 per share, in the same period of
fiscal 2004. Revenues were $31,486,000 in the third quarter this year versus
$32,969,000 in the same period last year. For the first nine months of fiscal
2005, the Company reported revenues of $98,354,000 and net income from
continuing operations of $10,822,000, or $1.64 per share. For the comparable
period last year, the Company had revenues of $98,203,000 and net income from
continuing operations of $9,280,000, or $1.41 per share. Net income from
discontinued operations was $50,000 in the third quarter of fiscal 2005 and
$42,000 in the same quarter last year, or $0.01 per share in each period. For
the nine month period, there was a net loss from discontinued operations of
$40,000 in 2005, or $0.01 per share, compared to net income of $350,000, or
$0.05 per share, in the first nine months of 2004.
The Company began accounting for its water utility subsidiary as a "discontinued
operation" in the quarter ended January 31, 2005 as a result of previously
reported developments in condemnation proceedings involving the primary assets
of this subsidiary and a local governmental district in New Mexico. Accordingly,
financial information from prior periods has been reclassified to conform to
this presentation.
Revenues from the Company's Kable News Company subsidiary were $24,126,000 in
the third quarter of 2005 compared to $24,914,000 in the same quarter last year.
This decrease of 3.2% was the result of a 4.2% revenue decline in Kable's
Fulfillment Services segment offset in part by a 4.8% revenue increase in its
Newsstand Distribution Services business. For the nine month period ended
January 31, Kable's revenues decreased from $76,107,000 last year to $72,875,000
this year, primarily due to a 5.2% decline in revenues from the Fulfillment
Services segment which was offset in part by a 2.6% increase in Newsstand
Distribution Services revenues. The decline in Fulfillment Services revenues in
both the three and nine month periods was principally the result of customer
losses at Kable's Colorado fulfillment business which had been identified and
known prior to Kable's acquisition of that business in 2003, while the increase
in revenues of Newsstand Distribution Services in both periods resulted from
additional business obtained in connection with the purchase of certain
distribution contracts in the third quarter of 2005. Kable's total operating
expenses decreased 6.7% and 6.1% in the third quarter and first nine months of
2005 compared to the same periods last year, with the operating expenses of
Fulfillment Services decreasing 10.3% and 7.4% in the third quarter and first
nine months of 2005 compared to the same periods of the prior year. This was due
in part to decreases in payroll and other variable expenses resulting from the
revenue decrease, reduced third-party charges for outsourced computer processing
and the inclusion in the prior year of approximately $700,000 of costs of
relocating and centralizing certain fulfillment operations. Fulfillment
operating expenses amounted to 84.7% of related revenues in the third quarter
and 84.1% for the first nine months of 2005 compared to 90.4% and 86.1% for
these periods in 2004. Operating costs for Newsstand Distribution Services
increased 27.4% and 6.5% in the third quarter and first nine months 2005
compared to the same periods last year, due to additional market study costs
incurred in the third quarter of 2005. These higher market study costs are also
expected to continue through the fourth quarter.
Revenues from land sales at the Company's AMREP Southwest subsidiary decreased
from $7,738,000 in the third quarter of 2004 to $6,996,000 in the same quarter
this year, primarily because the prior year quarter included the sale of a
relatively large tract of undeveloped residential lots to a homebuilder, whereas
the current year's sales activity consisted of a higher proportion of recurring
sales of developed residential lots to various homebuilders. Since these
recurring sales of residential lots generally contribute lower gross profit
percentages than large bulk sales, the gross profit on land sales decreased from
50% in last year's third quarter to 48% in the same quarter this year. For the
nine month period, land sale revenues increased from $20,876,000 last year to
$24,482,000 this year, primarily because this year's sales included more
developed residential lots. The overall gross profit percentage improved from
53% in the first nine months last year to 55% for the same period this year due
to better margins this year on both developed and undeveloped residential lots.
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.
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.
*****
(Financial Data Follows)
AMREP Corporation
and Subsidiaries
Financial Highlights
(Unaudited)
Three Months Ended January 31,
------------------------------
2005 2004
---- ----
Revenues $ 31,486,000 $ 32,969,000
Net income:
Continuing operations $ 2,511,000 $ 3,341,000
Discontinued operations-net of tax 50,000 42,000
------------- -------------
$ 2,561,000 $ 3,383,000
Earnings per share - Basic and Diluted:
Continuing Operations $ 0.38 $ 0.50
Discontinued Operations 0.01 0.01
------------- -------------
$ 0.39 $ 0.51
------------- -------------
Weighted average number of common
shares outstanding 6,619,000 6,598,000
------------- -------------
Nine Months Ended January 31,
-----------------------------
2005 2004
---- ----
Revenues $ 98,354,000 $ 98,203,000
Net income:
Continuing operations $ 10,822,000 $ 9,280,000
Discontinued operations-net of tax (40,000) 350,000
-------------- -------------
$ 10,782,000 $ 9,630,000
Earnings per share - Basic and Diluted:
Continuing Operations $ 1.64 $ 1.41
Discontinued Operations (0.01) 0.05
-------------- -------------
$ 1.63 $ 1.46
-------------- -------------
Weighted average number of common
shares outstanding 6,613,000 6,594,000
-------------- -------------