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
(609) 716-8255 (fax)
AMREP REPORTS RECORD FOURTH QUARTER AND YEAR 2006 RESULTS
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Princeton, New Jersey, June 27, 2006 - AMREP Corporation (NYSE: AXR) today
reported net income of $10,389,000, or $1.56 per share, for its fiscal year 2006
fourth quarter ended April 30, 2006 compared to net income of $4,743,000, or
$0.72 per share, in the same period of fiscal 2005. Results for the fourth
quarter of 2006 were entirely from continuing operations, while the prior year's
results included a net loss from discontinued operations of $23,000. Fourth
quarter 2006 revenues were $47,846,000 versus $36,152,000 in the fourth quarter
of fiscal 2005.
For all of fiscal 2006, the Company reported net income of $26,050,000, or $3.93
per share, compared to net income of $15,525,000, or $2.35 per share, in fiscal
2005. The 2006 results consisted of net income from continuing operations of
$22,494,000, or $3.39 per share, and net income from discontinued operations of
$3,556,000, or $0.54 per share, versus net income from continuing operations of
$15,588,000, or $2.36 per share, and a net loss from discontinued operations of
$63,000, or $0.01 per share, in the prior year. Fiscal 2006 revenues were
$148,296,000 compared to $134,506,000 in fiscal 2005.
The Company's fourth quarter and full year 2006 net income and earnings per
share were all records for any quarterly or annual period. Net income from
discontinued operations in 2006 reflected the first quarter 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.
Revenues at the Company's AMREP Southwest real estate subsidiary increased from
$12,013,000 and $37,385,000 in the fourth quarter and full year of fiscal 2005
to $26,562,000 and $59,169,000 in the corresponding periods of fiscal 2006,
resulting in significantly higher gross profits in both 2006 periods versus the
comparable periods of the prior year. These substantial revenue increases were
due to increased sales in 2006 of both developed and undeveloped lots in the
Company's principal market of Rio Rancho, New Mexico. The average gross profit
percentage on land sales increased to 62% in the fourth quarter of 2006 from 56%
in the same period of 2005 because of the sale of a substantially greater number
of undeveloped lots, which generally have significantly higher gross profit
margins than developed lots. For all of fiscal 2006, the average gross profit
percentage on land sales decreased to 54% from 55% in fiscal 2005, reflecting
the relative mix of lots sold in each year. As a result of the increased
revenues from land sales in 2006 and the higher gross profit contribution, the
pretax profit contribution from real estate operations improved significantly in
both reported periods of 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
$24,038,000 and $96,913,000 in the fourth quarter and full year of fiscal 2005
to $21,164,000 and $88,463,000 in the same periods of fiscal 2006. These revenue
declines were principally caused by customer losses that occurred in earlier
periods at Kable's Colorado fulfillment services business that was acquired from
Electronic Data Systems Corporation in fiscal 2003, resulting in 12% and 10%
revenue decreases in the Fulfillment Services segment in the fourth quarter and
full year of fiscal 2006 compared to the same periods of fiscal 2005. The
Fulfillment Services segment is nearly ready to implement a new information
systems platform for its business, which it believes will provide customers with
a product that will be state-of-the-art. This system has been under development
for more than three years and reflects Kable's desire to expand and broaden its
fulfillment business. As for Newsstand Distribution Services, revenues in that
segment decreased by 14% in the fourth quarter of 2006 compared to the same
period in the prior year due to lower gross billings of magazines reflecting
reduced distribution volumes for several publisher clients and the effect of a
customer loss that occurred in an earlier period, while for the full year 2006
such revenues increased by 1% primarily because decreases in gross billings to
existing customers were offset by additional revenues generated by new business.
Kable's net revenue declines in the fourth quarter and full year of 2006 were
offset in part by reductions in operating costs, mostly associated with
decreased variable payroll and benefit costs within the Fulfillment Services
segment. As a result of all of these factors, the pretax profit contribution
from Media Services decreased in both the fourth quarter and full year 2006
compared to 2005.
AMREP Corporation's AMREP Southwest Inc. subsidiary is a major landholder and
leading developer of real estate in Rio Rancho, New Mexico, and its Kable Media
Services, Inc. subsidiary distributes magazines to wholesalers and provides
subscription fulfillment and related services to publishers and others.
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(Financial Data Follows)
AMREP CORPORATION AND SUBSIDIARIES
FINANCIAL HIGHLIGHTS (UNAUDITED)
Three Months Ended April 30,
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2006 2005
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Revenues $ 47,846,000 $ 36,152,000
Net income (loss):
Continuing operations $ 10,389,000 $ 4,766,000
Discontinued operations - (23,000)
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$ 10,389,000 $ 4,743,000
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Earnings per share - Basic and Diluted:
Continuing operations $ 1.56 $ 0.72
Discontinued operations 0.00 0.00
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$ 1.56 $ 0.72
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Weighted average number of common shares
outstanding 6,640,000 6,622,000
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Twelve Months Ended April 30,
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2006 2005
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Revenues $ 148,296,000 $ 134,506,000
Net income (loss):
Continuing operations $ 22,494,000 $ 15,588,000
Discontinued operations 3,556,000 (63,000)
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$ 26,050,000 $ 15,525,000
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Earnings (loss) per share - Basic and
Diluted:
Continuing operations $ 3.39 $ 2.36
Discontinued operations 0.54 (0.01)
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$ 3.93 $ 2.35
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Weighted average number of common shares
outstanding 6,633,000 6,616,000
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