Exhibit 99.1
FOR: AMREP Corporation
212 Carnegie Center, Suite 302
Princeton, New Jersey 08540
CONTACT: Peter M. Pizza
Vice President and
Chief Financial Officer
(609) 716-8210
FOR IMMEDIATE RELEASE
---------------------
AMREP REPORTS THIRD QUARTER AND NINE MONTH RESULTS
Princeton, New Jersey -- March 9, 2006 - AMREP Corporation (NYSE:AXR) today
reported net income of $5,241,000, or $0.79 per share, for its fiscal 2006 third
quarter ended January 31, 2006, compared to net income of $2,561,000, or $0.39
per share, in the third quarter of the prior fiscal year. Results for the third
quarter of 2006 were entirely from continuing operations, while the prior year's
results included net income from discontinued operations of $50,000, or $0.01
per share. Revenues were $35,589,000 in the third quarter this year versus
$31,486,000 in the third quarter of fiscal 2005.
For the first nine months of fiscal 2006, the Company reported net income of
$15,661,000, or $2.36 per share, compared to net income of $10,782,000, or $1.63
per share, in the same period last year. This consisted of net income from
continuing operations of $12,105,000, or $1.83 per share, and net income from
discontinued operations of $3,556,000, or $0.53 per share, in 2006 versus net
income from continuing operations of $10,822,000, or $1.64 per share, and a loss
from discontinued operations of $40,000, or $0.01 per share, in the same period
last year. Revenues were $100,450,000 in the first nine months this year versus
$98,354,000 in the same period of fiscal 2005.
Net income from discontinued operations in the first nine months of fiscal 2006
reflects the gain from the disposition of the primary assets of the Company's El
Dorado, New Mexico water utility subsidiary, which were taken through
condemnation proceedings. Financial information for operations of this
subsidiary for periods prior to the disposal has been reclassified to conform to
this presentation.
Revenues from land sales at the Company's AMREP Southwest subsidiary increased
from $6,996,000 and $24,482,000 in the three and nine month periods ended
January 31, 2005 to $12,621,000 and $31,680,000 in the same periods of the
current year. This improvement was the result of increased sales of both
developed and undeveloped residential lots and commercial properties in the
Company's principal market of Rio Rancho, New Mexico in fiscal 2006, due in part
to increased available developed lot inventory in residential areas as well as
the continuing strength of the Rio Rancho real estate market. The gross profit
on land sales was 48% for each of the three month periods ended January 31, 2006
and 2005, but decreased from 55% for the nine month period ended January 31,
2005 to 47% for the nine month period ended January 31, 2006 because a higher
proportion of developed lots, which generally have lower gross profit margins
than undeveloped lots, were sold in the current year. As a result of the
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increased land sales and gross profit contributions in the current year, the
pretax profit contribution from real estate operations improved significantly in
the three and nine month periods ended January 31, 2006 compared to the prior
year. 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.
Revenues from the Company's Kable Media Services, Inc. subsidiary decreased from
$24,126,000 and $72,875,000 in the three and nine month periods ended January
31, 2005 to $22,449,000 and $67,299,000 in the same periods of the current year.
These revenue declines were principally caused by the continuing effect of
customer losses at Kable's Colorado fulfillment services business that occurred
in earlier periods resulting in 9% and 10% revenue decreases in the Fulfillment
Services segment in these periods. These decreases were partly offset by 5% and
7% revenue increases in Newsstand Distribution Services in these periods,
primarily resulting from the acquisition of distribution contracts in the third
quarter of fiscal 2005. Kable's net revenue decline was offset in part by
operating cost reductions, mostly associated with decreased variable payroll and
benefit costs within the Fulfillment Services segment, of 7% and 6% for the
third quarter and first nine months 2006 compared to the same periods of 2005.
As a result of all of these factors, the pretax profit contribution from
Fulfillment Services decreased in both the third quarter and first nine months
of 2006 compared to 2005, while the pretax profit contribution from Newsstand
Distribution Services increased in both these periods.
The Company's effective tax rate from continuing operations was 17% for the
third quarter of 2006 compared to 37% for the same period last year. The lower
effective tax rate in this year's third quarter is primarily attributable to an
increase in the estimated benefit of a second quarter charitable contribution of
land by the real estate business based upon an appraisal of the land that was
concluded during the third quarter. The effective tax rate from continuing
operations for the nine month periods ended January 31 was 26% in 2006 and 34%
in 2005.
AMREP Corporation's AMREP Southwest Inc. subsidiary is a major landholder and
leading developer of real estate in New Mexico, and its Kable Media Services,
Inc. subsidiary distributes magazines to wholesalers and provides subscription
fulfillment and related services to publishers and others.
*****
(Financial Data Follows)
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AMREP Corporation
and Subsidiaries
Financial Highlights
(Unaudited)
Three Months Ended January 31,
------------------------------
2006 2005
---- ----
Revenues $ 35,589,000 $ 31,486,000
Net income:
Continuing operations $ 5,241,000 $ 2,511,000
Discontinued operations - 50,000
------------------ ------------------
$ 5,241,000 $ 2,561,000
================== ==================
Earnings per share - Basic and Diluted:
Continuing operations $ 0.79 $ 0.38
Discontinued operations 0.00 0.01
------------------ ------------------
$ 0.79 $ 0.39
================== ==================
Weighted average number of common shares
outstanding 6,635,000 6,619,000
================== ==================
Nine Months Ended January 31,
-----------------------------
2006 2005
---- ----
Revenues $ 100,450,000 $ 98,354,000
Net income (loss):
Continuing operations $ 12,105,000 $ 10,822,000
Discontinued operations 3,556,000 (40,000)
------------------ ------------------
$ 15,661,000 $ 10,782,000
================== ==================
Earnings (loss) per share - Basic and
Diluted:
Continuing operations $ 1.83 $ 1.64
Discontinued operations 0.53 (0.01)
------------------ ------------------
$ 2.36 $ 1.63
================== ==================
Weighted average number of common shares
outstanding 6,631,000 6,613,000
================== ==================