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 October 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 December 13, 1995 - 7,365,650.
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
October 31, 1995 (Unaudited) and
April 30, 1995 (Audited) 1
Statements of Operations and Retained Earnings (Unaudited)
Six Months Ended October 31, 1995 and 1994 2
Statements of Operations and Retained Earnings (Unaudited)
Three Months Ended October 31, 1995 and 1994 3
Statements of Cash Flows (Unaudited)
Six Months Ended October 31, 1995 and 1994 4-5
Notes to Consolidated Financial Statements 6
Management's Discussion and Analysis 7-8
PART II
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Other Information 9
Signatures 10
Exhibit Index 11
FORM 10-Q
AMREP CORPORATION AND SUBSIDIARIES
Consolidated Balance Sheets
October 31, 1995 and April 30, 1995
(Thousands, except par value and number of shares)
October 31, April 30,
1995 1995
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(Unaudited) (Audited)
ASSETS
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Cash and cash equivalents $ 8,349 $ 9,266
Receivables, net:
Real estate operations 9,804 10,644
Magazine circulation operations 42,906 39,391
Real estate inventory 72,021 72,464
Rental and other real estate projects 9,808 11,622
Investment property 8,389 8,751
Property, plant and equipment-at cost-
net of accumulated depreciation and
amortization of $11,404 at October 31, 1995
and $10,706 at April 30, 1995 16,521 14,128
Other assets 15,919 14,671
Excess of cost of subsidiary over net
assets acquired 5,205 5,205
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$188,922 $186,142
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LIABILITIES AND SHAREHOLDERS' EQUITY
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Accounts payable, deposits and
accrued expenses $ 30,771 $ 32,048
Notes payable:
Amounts due within one year 13,822 9,105
Amounts subsequently due 46,049 50,015
Collateralized mortgage obligations 2,430 2,533
Deferred income taxes 27,857 26,520
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120,929 120,221
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Shareholders' equity:
Common stock, $.10 par value;
shares authorized--20,000,000;
shares issued and outstanding--
7,395,650 at October 31, 1995 and
7,393,650 at April 30, 1995 740 739
Capital contributed in excess of par value 44,914 44,903
Retained earnings 22,339 20,279
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67,993 65,921
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$188,922 $186,142
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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)
Six Months Ended October 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 $ 47,551 $ 42,811
Land sales 3,456 4,965
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51,007 47,776
Magazine circulation operations 29,065 20,268
Interest and other operations 3,260 3,622
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83,332 71,666
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COSTS AND EXPENSES
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Real estate cost of sales 40,714 39,512
Operating expenses:
Magazine circulation operations 23,066 15,251
Rental projects - 340
Real estate commissions and selling 3,236 2,964
Other 3,180 3,173
General and administrative:
Real estate operations and corporate 4,299 3,678
Magazine circulation operations 3,352 2,332
Interest, net 2,053 1,551
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79,900 68,801
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Income before provision
for income taxes 3,432 2,865
PROVISION FOR INCOME TAXES 1,372 1,140
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Net income 2,060 1,725
RETAINED EARNINGS, beginning of period 20,279 16,264
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RETAINED EARNINGS, end of period $ 22,339 $ 17,989
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NET INCOME PER SHARE $ 0.28 $ 0.24
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Weighted average number of common
shares outstanding 7,395,020 7,310,326
============ ============
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 October 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 $ 24,046 $ 21,313
Land sales 1,469 2,180
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25,515 23,493
Magazine circulation operations 15,148 10,664
Interest and other operations 1,747 1,754
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42,410 35,911
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COSTS AND EXPENSES
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Real estate cost of sales 20,337 19,587
Operating expenses:
Magazine circulation operations 11,815 8,128
Rental projects - 307
Real estate commissions and selling 1,654 1,629
Other 1,525 1,508
General and administrative:
Real estate operations and corporate 2,245 1,776
Magazine circulation operations 1,660 1,046
Interest, net 1,043 742
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40,279 34,723
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Income before provision
for income taxes 2,131 1,188
PROVISION FOR INCOME TAXES 852 473
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Net income 1,279 715
RETAINED EARNINGS, beginning of period 21,060 17,274
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RETAINED EARNINGS, end of period $ 22,339 $ 17,989
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NET INCOME PER SHARE $ 0.17 $ 0.10
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Weighted average number of common
shares outstanding 7,395,650 7,316,831
============ ============
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)
Six Months Ended October 31, 1995 and 1994
(Thousands)
1995 1994
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CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 2,060 $ 1,725
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Adjustments to reconcile net income to
net cash provided by operating activities -
Depreciation and amortization 3,945 3,008
Changes in assets and liabilities -
Receivables (2,675) 4,961
Real estate inventory 443 2,361
Rental and other real estate projects 1,814 1,652
Investment property 362 (166)
Other assets (4,636) (2,557)
Accounts payable, deposits and
accrued expenses (1,223) (4,667)
Deferred income taxes 1,337 1,093
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Total adjustments (633) 5,685
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Net cash provided by
operating activities 1,427 7,410
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CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (3,004) (1,120)
Other, net - 600
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Net cash used by investing activities (3,004) (520)
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CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from debt financing 15,452 10,451
Principal debt payments (14,804) (17,026)
Proceeds from exercise of stock options 12 254
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Net cash provided (used) by financing
activities 660 (6,321)
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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)
Six Months Ended October 31, 1995 and 1994
(Thousands)
1995 1994
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Increase (decrease) in cash and cash
equivalents (917) 569
CASH AND CASH EQUIVALENTS, beginning
of period 9,266 6,623
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CASH AND CASH EQUIVALENTS, end
of period $ 8,349 $ 7,192
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SUPPLEMENTAL CASH FLOW INFORMATION:
Interest paid - net of amounts capitalized $ 2,256 $ 2,222
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Income taxes paid $ 35 $ 58
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See notes to consolidated financial statements.
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FORM 10-Q
AMREP CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Unaudited)
Six Months Ended October 31, 1995 and 1994
Note 1:
------- 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.
Note 2:
------- Certain amounts in the October 31, 1994 Statement of
Operations have been reclassified to conform to the
presentation used at October 31, 1995.
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FORM 10-Q
AMREP CORPORATION AND SUBSIDIARIES
Management's Discussion and Analysis of
Financial Condition and Results of Operations
October 31, 1995
FINANCIAL CONDITION
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During the quarter ended October 31, 1995, the Company
finalized an agreement to increase its line-of-credit which
is generally available for its magazine circulation
operations from $27.5 million to $32.5 million. This
agreement has extended the arrangement to August 31, 1998.
RESULTS OF OPERATIONS
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Total revenues for the six months and second quarter ended
October 31, 1995 increased approximately 16% and 18%,
respectively, over the similar periods last year, reflecting
higher revenues from both home and condominium sales and
magazine circulation operations. Revenues from home and
condominium sales increased approximately 11% and 13%,
respectively, resulting from an increase in the average
revenues per housing unit closed. 426 housing units were
delivered in the first six months periods of both years and
211 housing units were delivered in the second quarter of
both years. The average revenue per unit closed increased to
$111,600 and $114,000 in the six months and second quarter
this year, respectively, from $100,500 and $101,000 in the
similar periods last year, resulting primarily from price
increases and a shift to the building of larger, more
expensive houses in Rio Rancho. The gross margin on housing
sales increased by approximately $3.0 million and $1.8
million in the six months and second quarter, respectively,
this year as compared to the similar periods last year,
resulting from price increases as well as the favorable
effect of production strategies and efficiencies introduced
last fiscal year. Revenues and gross profit from land sales
decreased primarily due to a decrease in the level of
commercial and industrial lot sales. Land sale revenues and
related gross profits can vary from period to period as a
result of the nature and timing of specific transactions, and
is not an indication of amounts that may be expected to
occur in future periods. As a result of these factors, gross
profit from housing and land sales increased by
approximately $2.0 million and $1.3 million in the six months
and second quarter, respectively, this year as compared to
the similar periods last year.
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FORM 10-Q
AMREP CORPORATION AND SUBSIDIARIES
Management's Discussion and Analysis of
Financial Condition and Results of Operations
October 31, 1995
The increase in real estate commissions and selling expenses
in the six months and second quarter this year was primarily
the result of increased revenues from home and condominium
sales partially offset by a decrease in land sales. Real
estate and corporate general and administrative expenses
increased from $3.7 million in the six months last year to
$4.3 million in the similar period this year and increased
from $1.8 million in the second quarter last year to $2.2
million in the similar period this year due primarily to
increases in payroll and various other general expenses.
Revenues from magazine circulation operations increased
approximately 43% and 42% in the six months and second
quarter, respectively, this year as compared to the similar
periods last year. The increase is due primarily to the
acquisition in January 1995 of the business of Fulfillment
Corporation of America (FCA) and growth in fulfillment
subscription services. At the same time operating expenses
increased approximately the same amount as revenues in the
six months and increased a lesser amount than revenues in the
second quarter. One of the reasons for the increase in
operating expenses is problems related to the integration of
FCA's activities with Kable's. It is expected that the
profit margin of the Fulfillment Division will improve upon
completion of the transition period. Operating income from
the magazine circulation operations increased by
approximately $200,000 in the second quarter this year from
the similar period last year and remained approximately the
same in the six months.
Interest expense increased in the six months and second
quarter this year due primarily to higher average borrowings
for the magazine circulation operations and higher interest
rates, since a large portion of the Company's borrowings are
related to the prime rate. Interest and other operations'
revenues decreased in the six months this year because the
prior year included various nonrecurring matters.
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PART II
Other Information
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Item 4. Submission of Matters to Vote of Security Holders
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(a) The Annual Meeting of Shareholders was held on November 1,
1995.
(b) At the meeting, Daniel Friedman, Samuel N. Seidman and
Mohan Vachani were elected as directors. The terms
of office as directors of Jerome Belson, Edward B.
Cloues, II, David N. Dinkins, Harvey I. Freeman,
Anthony B. Gliedman, Nick G. Karabots, and James Wall
continued after the meeting.
(c) Shareholders cast votes for the election of directors
as follows:
Nominee "For" "Withheld"
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Daniel Friedman 6,845,874 58,749
Samuel N. Seidman 6,845,944 58,679
Mohan Vachani 6,845,944 58,679
Item 6. Exhibits and Reports on Form 8-K
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(a) Exhibits:
4. Amended and Restated Loan Agreement between
American National Bank and Trust Company of
Chicago and Kable News Company, Inc. dated
October 6, 1995.
27. Financial Data Schedule.
(b) Reports on Form 8-K:
During the quarter ended October 31, 1995, Registrant
filed a Current Report dated September 29, 1995,
reporting under Item 5. Other Events related to a
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dispute with the Internal Revenue Service.
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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: December 13, 1995 By: /s/ Mohan Vachani
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Senior Vice President,
Chief Financial Officer
Dated: December 13, 1995 By: /s/ Peter M. Pizza
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Controller
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EXHIBIT INDEX
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4 Amended and Restated Loan Agreement between American
National Bank and Trust Company of Chicago and Kable
News Company, Inc. dated October 6, 1995.
27 Financial Data Schedule
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