EXHIBIT 99.1
FOR: AMREP Corporation
300 Alexander Park, Suite 204
Princeton, NJ 08540
CONTACT: Peter M. Pizza
Vice President and Chief Financial Officer
(609) 716-8210
AMREP REPORTS THIRD QUARTER AND NINE MONTH RESULTS
Princeton, New Jersey, March 12 - AMREP Corporation (NYSE:AXR) today reported a
net loss of $100,000, or $0.02 per share, for its fiscal 2009 third quarter
ended January 31, 2009 compared to net income of $3,446,000, or $0.57 per share,
for its fiscal 2008 third quarter ended January 31, 2008. For the first nine
months of fiscal 2009, net income was $2,866,000, or $0.48 per share, compared
to net income of $13,176,000, or $2.08 per share, in the same period of 2008.
Revenues were $35,720,000 and $111,580,000 in the third quarter and first nine
months of 2009 compared to $43,435,000 and $136,885,000 in the same periods last
year.
Results for the first nine months of 2008 included a loss from discontinued
operations of $57,000, net of tax, or $.01 per share, that reflected costs
incurred in the first quarter of fiscal 2008 in connection with the settlement
of all litigation related to the Company's former water utility subsidiary that
were in addition to costs estimated and accrued for this matter in the fourth
quarter of fiscal 2007.
Revenues from land sales at the Company's AMREP Southwest subsidiary were
$521,000 and $6,594,000 for the three and nine month periods ended January 31,
2009 compared to $6,302,000 and $27,613,000 for the same periods of the prior
year. AMREP Southwest continues to experience substantially lower land sales in
its principal market of Rio Rancho, New Mexico due to the severe decline in the
real estate market in the greater Albuquerque-metro and Rio Rancho areas that
began in earlier periods. Third quarter 2009 land sales revenues were from the
sale of 11 developed residential lots and 3 undeveloped residential lots to
homebuilders, while in the same period of fiscal 2008 there were land sales of
26 undeveloped residential lots to homebuilders and approximately 25 acres of
undeveloped land to commercial developers. The trend of declining permits
for new home construction in the Rio Rancho area, as previously reported, also
continues, with 32% fewer single-family residential building permits issued
during calendar year 2008 than in calendar year 2007. The Company believes that
this decline has been consistent with the well-publicized problems of the
national home building industry and credit markets, including fewer sales of
both new and existing homes, an increasing number of mortgage delinquencies and
foreclosures and a tightening of mortgage availability. Faced with these adverse
conditions, builders have slowed the pace of building on developed lots
previously purchased from the Company in Rio Rancho and delayed or cancelled the
purchase of additional developed lots. These factors have also contributed to a
steep decline in the sale of undeveloped land to both builders and investors.
The average selling price of land sold by the Company in Rio Rancho in recent
years has fluctuated, as the Company offers for sale developed and undeveloped
land from a number of different projects, and selling prices may vary from
project to project and within projects depending on location, the stage of
development and other factors. The average gross profit percentage on land sales
decreased from 63% in the third quarter of 2008 to 36% for the same period in
2
2009, reflecting the fact that the 2008 third quarter land sales included
approximately 25 acres of commercial property which carried a higher gross
profit margin than was produced by the sale of developed residential lots in the
third quarter of 2009. For the first nine months the average gross profit
percentage increased from 65% in 2008 to 87% in 2009. This increase was
attributable to the mix of land sold, and principally was the result of a second
quarter 2009 sale of 50 acres of undeveloped land to one purchaser for
$3,849,000, which contributed a gross profit of $3,825,000 (99%). As a result of
the revenue and gross profit factors noted, AMREP Southwest's pretax
contribution decreased from income of $3,873,000 and $19,312,000 in the third
quarter and first nine months of 2008 to a loss of $930,000 in the third quarter
and income of $3,122,000 for the first nine months of 2009. Revenues, gross
profits, average sales prices and related gross profit percentages 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 operations decreased from
$36,458,000 for the third quarter of 2008 to $35,051,000 for the same period in
2009, a decline of 4%. For the first nine months of 2009, Kable Media's revenues
of $104,328,000 were generally unchanged from $104,317,000 in the same period of
2008. The revenue decrease in the third quarter of 2009 reflected, in part, the
effect of an 11% revenue decrease from reduced and lost business from
Subscription Fulfillment Services. The well-publicized problems confronting the
magazine publishing industry, including declining advertising revenues, lower
subscription and newsstand sales and increasing costs, contributed to the
decline in the revenues of Kable Media since publishing is the principal
industry which Kable Media serves. In early November 2008, Kable Media acquired
certain assets of a product repackaging business and a staffing service business
and started operations in these new business areas. Revenues from these
operations partially offset the 2009 third quarter decline in Subscription
Fulfillment Services revenues. Kable Media's operating expenses increased by
$382,000 and $1,087,000 for the third quarter and first nine months of 2009
compared to the same periods in 2008, primarily attributable to higher
consulting and computer systems integration costs of the Subscription
Fulfillment Services business, which were partly offset by lower interest
expense principally due to lower interest rates in both periods of 2009. As a
result of these factors, Kable Media incurred pretax losses of $305,000 and
$460,000 for the three and nine month periods ended January 31, 2009 compared to
pretax income of $1,059,000 and a pretax loss of $398,000 in the same periods of
the prior year.
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.
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Attachment 1
AMREP Corporation
and Subsidiaries
Financial Highlights
(Unaudited)
Three Months Ended January 31,
------------------------------
2009 2008
---- ----
Revenues $ 35,720,000 $ 43,435,000
Net income (loss) $ (100,000) $ 3,446,000
Earnings (loss) per share - Basic and Diluted $ ( 0.02) $ 0.57
Weighted average number of common shares
outstanding 5,996,000 6,014,000
Nine Months Ended January 31,
-----------------------------
2009 2008
---- ----
Revenues $ 111,580,000 $ 136,885,000
Net income (loss):
Continuing operations $ 2,866,000 $ 13,233,000
Discontinued operations - (57,000)
-------------- ---------------
$ 2,866,000 $ 13,176,000
Earnings (loss) per share - Basic and Diluted:
Continuing operations $ 0.48 $ 2.09
Discontinued operations - (0.01)
-------------- ---------------
$ 0.48 $ 2.08
Weighted average number of common shares
outstanding 5,996,000 6,332,000
4
Attachment 2
The Company's land sales in Rio Rancho, New Mexico were as follows (dollar
amounts in thousands):
2009 2008
---------------------------------------- ------------------------------------------
Acres Revenues Acres Revenues
Sold Revenues per Acre Sold Revenues per Acre
---------- ----------- ----------- -------- ------------ ------------
Three months ended
January 31:
Developed
Residential 1.5 $ 361 $ 241 - $ - $ -
Commercial - - - 25.0 5,731 229
---------- ----------- ----------- -------- ------------ ------------
Total Developed 1.5 361 241 25.0 5,731 229
Undeveloped 2.5 160 64 24.3 571 24
---------- ----------- ----------- -------- ------------ ------------
Total 4.0 $ 521 $ 130 49.3 $ 6,302 $ 128
Nine months ended
January 31:
Developed
Residential 3.2 $ 789 $ 247 30.0 $ 9,468 $ 316
Commercial 1.0 126 126 38.8 8,651 223
---------- ----------- ----------- -------- ------------ ------------
Total Developed 4.2 915 218 68.8 18,119 263
Undeveloped 134.4 5,679 42 326.5 9,494 29
---------- ----------- ----------- -------- ------------ ------------
Total 138.6 $ 6,594 $ 48 395.3 $ 27,613 $ 70
The Company offers for sale developed and undeveloped land in Rio Rancho from a
number of different projects, and selling prices may vary from project to
project and within projects depending on location, the stage of development and
other factors.