SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended January 31, 1995
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OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
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Commission File Number 1-4702
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AMREP Corporation
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(Exact name of registrant as specified in its charter)
Oklahoma 59-0936128
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
641 Lexington Avenue, Sixth Floor, New York, New York 10022
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (212) 705-4700
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Indicate by check mark whether the Registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the Registrant was required to file
such reports), and (2) has been subject to such filing requirements
for the past 90 days.
Yes X No
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Number of Shares of Common Stock, par value $.10 per share,
outstanding at March 15, 1995 - 7,393,775.
FORM 10-Q
AMREP CORPORATION AND SUBSIDIARIES
INDEX
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PART I PAGE NO.
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Consolidated Financial Statements:
Balance Sheets
January 31, 1995 (Unaudited) and
April 30, 1994 (Audited) 1
Statements of Operations and Retained Earnings (Unaudited)
Nine Months Ended January 31, 1995 and 1994 2
Three Months Ended January 31, 1995 and 1994 3
Statements of Cash Flows (Unaudited)
Nine Months Ended January 31, 1995 and 1994 4-5
Notes to Consolidated Financial Statements 6-7
Management's Discussion and Analysis 8-9
PART II
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Other Information 10
Signatures 11
Exhibit Index 12
FORM 10-Q
AMREP CORPORATION AND SUBSIDIARIES
Consolidated Balance Sheets
January 31, 1995 and April 30, 1994
(Thousands, except par value and number of shares)
January 31, April 30,
1995 1994
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(Unaudited) (Audited)
ASSETS
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Cash and temporary cash investments $ 7,979 $ 6,623
Receivables, net:
Real estate operations 10,570 13,122
Magazine circulation operations 39,786 34,281
Real estate inventory 71,263 71,102
Rental and other real estate projects 11,591 14,174
Investment property 8,798 8,604
Property, plant and equipment-at cost-
net of accumulated depreciation and
amortization: January - $10,757
April - $10,774 13,589 12,103
Other assets 13,920 13,643
Excess of cost of subsidiary over net
assets acquired 5,205 5,205
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$182,701 $178,857
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LIABILITIES AND SHAREHOLDERS' EQUITY
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Accounts payable, deposits and
accrued expenses $ 34,370 $ 31,915
Notes payable:
Amounts due within one year 14,114 12,725
Amounts subsequently due 37,435 38,013
Project financing 3,404 6,205
Collateralized mortgage obligations 2,577 4,406
Deferred income taxes 26,024 24,164
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117,924 117,428
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Shareholders' equity:
Common stock - $.10 par value
authorized: 20,000,000 shares
issued: January - 7,387,525 shares
April - 7,297,625 shares 739 730
Capital contributed in excess of par value 44,874 44,435
Retained earnings 19,164 16,264
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64,777 61,429
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$182,701 $178,857
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See notes to consolidated financial statements.
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FORM 10-Q
AMREP CORPORATION AND SUBSIDIARIES
Consolidated Statements of Operations and Retained Earnings (Unaudited)
Nine Months Ended January 31, 1995 and 1994
(Thousands, except shares and per share amounts)
1995 1994
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REVENUES
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Real estate operations:
Home and condominium sales $ 64,081 $ 49,014
Land sales 8,703 9,574
Rental projects - 3,328
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72,784 61,916
Magazine circulation operations 31,945 25,241
Interest and other operations 4,897 4,329
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109,626 91,486
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COSTS AND EXPENSES
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Real estate cost of sales 59,490 46,237
Operating expenses:
Magazine circulation operations 23,731 18,233
Rental projects 607 5,091
Real estate commissions and selling 4,558 3,598
Other 4,600 3,907
General and administrative:
Real estate operations and corporate 5,560 6,143
Magazine circulation operations 3,825 3,795
Interest, net 2,437 2,124
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104,808 89,128
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Income before provision
for income taxes 4,818 2,358
PROVISION FOR INCOME TAXES 1,918 896
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Net income 2,900 1,462
RETAINED EARNINGS, beginning of period 16,264 13,892
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RETAINED EARNINGS, end of period $ 19,164 $ 15,354
============ ============
NET INCOME PER SHARE $ 0.40 $ 0.21
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Weighted average number of common
shares outstanding 7,329,818 7,024,223
============ ============
See notes to consolidated financial statements.
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FORM 10-Q
AMREP CORPORATION AND SUBSIDIARIES
Consolidated Statements of Operations and Retained Earnings (Unaudited)
Three Months Ended January 31, 1995 and 1994
(Thousands, except shares and per share amounts)
1995 1994
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REVENUES
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Real estate operations:
Home and condominium sales $ 21,270 $ 17,190
Land sales 3,738 3,277
Rental projects - 413
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25,008 20,880
Magazine circulation operations 11,677 9,108
Interest and other operations 1,275 1,394
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37,960 31,382
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COSTS AND EXPENSES
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Real estate cost of sales 19,978 16,305
Operating expenses:
Magazine circulation operations 8,626 6,633
Rental projects 267 577
Real estate commissions and selling 1,594 1,187
Other 1,427 1,194
General and administrative:
Real estate operations and corporate 1,882 2,377
Magazine circulation operations 1,347 1,278
Interest, net 886 760
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36,007 30,311
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Income before provision
for income taxes 1,953 1,071
PROVISION FOR INCOME TAXES 778 407
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Net income 1,175 664
RETAINED EARNINGS, beginning of period 17,989 14,690
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RETAINED EARNINGS, end of period $ 19,164 $ 15,354
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NET INCOME PER SHARE $ 0.16 $ 0.09
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Weighted average number of common
shares outstanding 7,367,552 7,276,052
============ ============
See notes to consolidated financial statements.
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FORM 10-Q
AMREP CORPORATION AND SUBSIDIARIES
Statements of Cash Flows (Unaudited) (Page 1 of 2)
Nine Months Ended January 31, 1995 and 1994
(Thousands)
1995 1994
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CASH FLOWS FROM OPERATING ACTIVITIES:
Cash received from real estate operations
and other $ 79,753 $ 64,195
Cash received from magazine circulation
operations, net of publisher payments 27,848 19,756
Interest received 812 813
Cash paid to suppliers and employees (97,284) (79,764)
Cash paid to acquire land (67) (1,473)
Interest paid (3,015) (2,909)
Income taxes paid (58) (27)
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Net cash provided by operating activities 7,989 591
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CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (2,007) (1,580)
Proceeds from restructuring of general
partnership interest of The Classic
at West Palm Beach - 400
Payment for purchase of Fulfillment
Corporation of America, net of cash acquired (1,744) -
Other, net 600 (249)
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Net cash used by investing activities (3,151) (1,429)
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CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from debt financing 24,411 15,274
Principal debt payments (28,341) (16,735)
Proceeds from exercise of stock options 448 100
Proceeds from sale of stock - 161
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Net cash used by financing activities (3,482) (1,200)
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Increase (decrease) in cash and temporary cash
investments 1,356 (2,038)
CASH AND TEMPORARY CASH INVESTMENTS, beginning
of period 6,623 6,856
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CASH AND TEMPORARY CASH INVESTMENTS, end
of period $ 7,979 $ 4,818
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See notes to consolidated financial statements.
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FORM 10-Q
AMREP CORPORATION AND SUBSIDIARIES
Statements of Cash Flows (Unaudited) (Page 2 of 2)
Nine Months Ended January 31, 1995 and 1994
(Thousands)
1995 1994
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RECONCILIATION OF NET INCOME TO
NET CASH PROVIDED BY OPERATING ACTIVITIES:
Net income $ 2,900 $ 1,462
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Adjustments to reconcile net income to
net cash provided by operating activities -
Depreciation and amortization 4,699 4,064
Changes in assets and liabilities -
Receivables (190) (6,586)
Real estate inventory (161) (7,790)
Rental and other real estate projects 2,583 5,184
Investment property (194) 547
Other assets (3,634) (3,337)
Accounts payable, deposits and
accrued expenses 126 6,268
Deferred income taxes 1,860 779
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Total adjustments 5,089 (871)
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Net cash provided by
operating activities $ 7,989 $ 591
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Supplemental schedule of noncash investing activities (dollars in thousands):
Stock issuance in connection with purchase
of magazine circulation operations assets: $ - $ 4,101
Restructuring of general partnership interest
in The Classic at West Palm, resulting in
decreases in the following:
Rental project inventory $ - $ 23,550
Accounts payable, deposits payable, and
accrued expenses - 679
Project financing - 22,471
See notes to consolidated financial statements.
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FORM 10-Q
AMREP CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Unaudited) (Page 1 of 2)
Nine Months Ended January 31, 1995 and 1994
Note 1:
------- The January 31, 1994, financial statements have been
reclassified to conform to the presentation used at January
31, 1995, and such reclassifications were not material.
Note 2:
------- FULFILLMENT SERVICE ACQUISITION
In January 1995, Kable Fulfillment Services of Ohio, Inc. (a
wholly-owned subsidiary of the Company) acquired assets and
liabilities of Fulfillment Corporation of America (FCA), an
Ohio based subscription service operation. The purchase price
of FCA was $2,070,000, and the Company accounted for the
acquisition using the purchase method of accounting. The
allocation of the purchase price is preliminary and will be
finalized upon the completion of the Company's evaluation of
certain obligations of FCA prior to the merger and
acquisition related costs. Accordingly, further adjustments
may result.
The following unaudited condensed consolidated pro forma
income statements reflect the combined results of operations
for the nine months ended January 31, 1995, and 1994, as if
the acquisition had been consummated on May 1, 1993. In
addition, they include purchase accounting adjustments
reducing depreciation and amortization, and increasing
interest expense associated with additional borrowings to
finance the acquisition.
(Thousands, except
per share amounts)
1995 1994
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Total revenues $117,854 $101,799
Total costs and expenses 113,329 100,297
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Income before income taxes 4,525 1,502
Provision for income taxes -
(39.8% for 1995 and 38% for 1994) 1,801 571
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Net income $ 2,724 $ 931
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Net income per share $ 0.37 $ 0.13
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FORM 10-Q
AMREP CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Unaudited) (Page 2 of 2)
Nine Months Ended January 31, 1995 and 1994
Note 3:
------- The consolidated financial statements included herein have
been prepared by the Company, without audit, pursuant to the
rules and regulations of the Securities and Exchange
Commission. The consolidated financial statements reflect
all adjustments which are, in the opinion of management,
necessary to reflect a fair presentation of the results for
the interim periods presented. Certain information and
footnote disclosures normally included in financial
statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted pursuant
to such rules and regulations, although the Company believes
that the disclosures are adequate to make the information
presented not misleading. It is suggested that these
consolidated financial statements be read in conjunction with
the consolidated financial statements and the notes thereto
included in the Company's latest annual report on Form 10-K.
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FORM 10-Q
AMREP CORPORATION AND SUBSIDIARIES
Management's Discussion and Analysis of
Financial Condition and Results of Operations (Page 1 of 2)
January 31, 1995
FINANCIAL CONDITIONS
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The acquisition of the assets and liabilities of Fulfillment
Corporation of America (FCA) by Kable Fulfillment Services of
Ohio, Inc. (See Note 2) for the purchase price of $2,070,000 was
financed by additional borrowings.
RESULTS OF OPERATIONS
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The improvement in the results for the nine months and third
quarter as compared to the similar periods last year reflects an
increase in gross profit from housing sales of approximately
$1,970,000 and $570,000, respectively, and an increase in the
pretax income from Kable News operations of approximately $850,000
and $330,000, respectively. In addition, general and
administrative expenses related to real estate and corporate
decreased approximately $580,000 and $500,000, respectively,
primarily due to lower legal costs and consulting fees. The third
quarter this year reflects an increase in gross profit from land
sales of approximately $300,000, as compared to the third quarter
last year. Also, the nine months of fiscal 1994 results include a
loss of $1,763,000 from rental projects, principally The Classic
at West Palm Beach, compared to $607,000 in the nine months this
year.
These operating improvements were offset by a decrease in gross
profit from land sales of approximately $1,020,000 in the nine
months this year as compared to the similar period last year. In
addition, increased real estate commissions and selling expenses
increased in the nine months and third quarter this year by
$960,000 and $400,000, respectively, as compared to the similar
periods last year. These increases were in proportion to the
increased revenues at the Brandywine and Country Meadows housing
projects (which were in their start-up phase last year) and to the
increase in revenue at Rio Rancho.
The increase in gross profit from housing sales was primarily due
to increased volume and increases in housing prices. The number
of housing units closed increased by 73 units, from 558 to 631, in
the nine months fiscal 1995, and by 13 units, from 192 to 205, in
the third quarter fiscal 1995, as compared to the similar periods
last year.
-8-
FORM 10-Q
AMREP CORPORATION AND SUBSIDIARIES
Management's Discussion and Analysis of
Financial Condition and Results of Operations (Page 2 of 2)
January 31, 1995
The increase in pretax income from Kable News operations in the
nine months and third quarter fiscal 1995, as compared to the
similar periods last year, (from approximately $2,760,000 last
year to $3,610,000 this year in the nine months and from
$1,050,000 last year to $1,380,000 this year in the third quarter)
primarily reflects substantially improved results from newsstand
operations.
The increase in interest expense in the nine months and third
quarter of fiscal 1995, as compared to the similar periods last
year, is due to increased borrowings related to real estate
operations and Kable News operations, and an increase in the prime
interest rate. This increase was partially offset by
capitalization of interest on construction projects this year.
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PART II
Other Information
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Item 6. Exhibits and Reports on Form 8-K
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(a) Exhibits:
4. Third Amendment to Loan Agreement between
American National Bank and Trust Company of
Chicago, and Kable News Company, Inc. dated
January 3, 1995.
27. Financial Data Schedule.
(b) Reports on Form 8-K:
During the quarter ended January 31, 1995,
Registrant filed a Current Report on Form 8-K
(Date of earliest event reported: January 12,
1995) reporting under Item 2. Acquisition or
Disposition of Assets and Item 7. Financial
Statements and Exhibits. Registrant will file
any required Financial Statements and pro forma
financial information not later than March 28,
1995 (the date which is 60 days after the date
the Current Report on Form 8-K must be filed).
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SIGNATURES
Pursuant to the requirements of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be
signed on its behalf by the undersigned thereunto duly
authorized.
AMREP CORPORATION
(Registrant)
Dated: March 15, 1995 By: /s/ Anthony B. Gliedman
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Chairman of the Board,
Chief Executive Officer
and President
Dated: March 15, 1995 By: /s/ Rudolph J. Skalka
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Vice President, Finance
and Principal Accounting
Officer
-11-
EXHIBIT INDEX
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4. Third Amendment to Loan Agreement between
American National Bank and Trust Company of
Chicago, and Kable News Company, Inc., dated
January 3, 1995.
27. Financial Data Schedule
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