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) 716-8200
FOR IMMEDIATE RELEASE
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AMREP REPORTS RECORD FIRST QUARTER RESULTS
Princeton, New Jersey, September 13, 2006 - AMREP Corporation (NYSE:AXR) today
reported net income of $15,804,000, or $2.38 per share, for its fiscal 2007
first quarter ended July 31, 2006 compared to net income of $5,364,000, or $0.81
per share, in the first quarter of the prior fiscal year. Results for the first
quarter of 2007, which set a record for any quarter in the Company's history,
were entirely from continuing operations, while last year's results consisted of
net income from continuing operations of $1,802,000, or $0.27 per share, and net
income from discontinued operations of $3,562,000, or $0.54 per share. Revenues
were $58,269,000 in the first quarter this year versus $30,014,000 in the first
quarter of fiscal 2006.
Net income from discontinued operations in the first quarter of 2006 reflected
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.
Revenues of the Company's AMREP Southwest real estate subsidiary were
$37,092,000 in the first quarter of 2007 compared to $7,689,000 in the same
quarter last year. This substantial revenue increase was primarily due to
increased sales of both developed and undeveloped lots in AMREP Southwest's
principal market of Rio Rancho, New Mexico, where interest in the Company's
landholdings did not appear to be impacted by the slowdown in housing that has
been reported in many parts of the country. Revenues from the sale of developed
and undeveloped lots increased from $6,150,000 and $1,259,000 in the first
quarter of 2006 to $14,503,000 and $14,694,000 in the same period of 2007. In
addition, revenues from the sale of commercial and industrial properties were
$3,293,000 in the first three months of 2007 versus no sales of such properties
in the first quarter of 2006. The average gross profit percentage on land sales
increased from 36% in the first quarter of 2006 to 65% in the same period this
year, primarily reflecting a greater proportion of sales of undeveloped lots in
the first quarter of 2007. 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.
First quarter 2007 revenues at AMREP Southwest also included $4,602,000 of
interest and other income compared to $280,000 of such revenues in the same
period of 2006. This increase was primarily due to $4,107,000 of gain on the
sale of certain non-inventory real estate assets, including the Company's office
2
building in Rio Rancho. When the results of these transactions are added to
those from land sales, the pretax income contribution from AMREP Southwest
increased from $1,729,000 in the first quarter of 2006 to $24,243,000 in the
first quarter of 2007.
Revenues of the Company's Kable Media Services subsidiary were $20,827,000 in
the first quarter of 2007 compared to $22,155,000 in the same quarter last year.
This 6% decrease was the combined result of a $972,000 revenue decline (5%) in
Kable's Fulfillment Services segment and a $356,000 revenue decline (10%) in its
Newsstand Distribution Services segment. The revenue decline in the Fulfillment
Services segment was primarily due to previously-reported customer losses at
Kable's Colorado fulfillment operation that occurred in earlier periods but that
still affected the comparison with last year's first quarter, while the revenue
decrease in the Newsstand Distribution Services segment reflected a modest
decrease in the distribution sales volume from existing customers and a decrease
in the average commission rate earned by Kable, partly offset by commissions
earned under a distribution arrangement with a new publisher client that
commenced in the fourth quarter of 2006. Media Services operating expenses
decreased by $343,000 (2%) in the first quarter of 2007 compared to the same
period of 2006, primarily due to decreased expenses in the Fulfillment Services
segment relating in part to reductions in variable expenses, including payroll
and benefits. As a result of these factors, the pretax income contribution from
Media Services decreased from $1,099,000 in the first quarter of 2006 to
$596,000 in the first quarter of 2007.
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.
*****
AMREP Corporation
and Subsidiaries
Financial Highlights
(Unaudited)
Three Months Ended July 31,
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2006 2005
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Revenues $ 58,269,000 $ 30,014,000
Net income:
Continuing operations $ 15,804,000 $ 1,802,000
Discontinued operations - 3,562,000
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$ 15,804,000 $ 5,364,000
Earnings per share - Basic and
Diluted:
Continuing operations $ 2.38 $ 0.27
Discontinued operations - 0.54
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$ 2.38 $ 0.81
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Weighted average number of common
shares outstanding 6,644,000 6,626,000
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