Exhibit 99.1
FOR: AMREP Corporation
641 Lexington Avenue
New York, NY 10022
CONTACT: Peter M. Pizza
Vice President and
Chief Financial Officer
(212) 705-4705
FOR IMMEDIATE RELEASE
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AMREP REPORTS SECOND QUARTER AND SIX MONTH RESULTS
NEW YORK, December 13, 2005 - AMREP Corporation (NYSE:AXR) today reported net
income of $5,056,000, or $0.76 per share, for its fiscal 2006 second quarter
ended October 31, 2005, compared to net income of $4,195,000, or $0.63 per
share, in the second quarter of the prior fiscal year. This consisted of 2006
second quarter net income from continuing operations of $5,062,000, or $0.76 per
share, and a net loss from discontinued operations of $6,000, which had no
effect on earnings per share, versus net income from continuing operations of
$4,370,000, or $0.66 per share, and a net loss from discontinued operations of
$175,000, or $0.03 per share, in the same period last year. Revenues were
$34,847,000 in the second quarter this year versus $33,230,000 in the second
quarter of fiscal 2005.
For the first six months of fiscal 2006, the Company reported net income of
$10,420,000, or $1.57 per share, compared to net income of $8,221,000, or $1.24
per share, in the same period of the prior fiscal year. This consisted of 2006
net income from continuing operations of $6,864,000, or $1.04 per share, and net
income from discontinued operations of $3,556,000, or $0.53 per share, versus
net income from continuing operations of $8,311,000, or $1.26 per share, and a
net loss from discontinued operations of $90,000, or $0.02 per share, in the
same period last year. Revenues were $64,861,000 in the first six months this
year versus $66,868,000 in the same period of fiscal 2005.
Net income from discontinued operations in the first six months of fiscal 2006
reflects the gain from the sale of the primary assets of the Company's El
Dorado, New Mexico water utility subsidiary, which was disposed through
condemnation proceedings in the first quarter of fiscal 2006. Financial
information for operations of this subsidiary for periods prior to the disposal
has been reclassified to conform to this presentation.
Revenues from Kable's magazine service operations were $22,695,000 in the second
quarter of 2006 compared to $25,099,000 in the same quarter last year, and for
the six-month period ended October 31, decreased from $48,749,000 last year to
$44,850,000 this year. The revenue declines in both the second quarter and first
six months of 2006 were primarily due to a decrease in revenues from the
Fulfillment Services segment that was principally the result of customer losses
at Kable's Colorado fulfillment services business. Magazine service operating
expenses decreased by $1,856,000 (9%) and $2,268,000 (6%) for the second quarter
and first six months of 2006 compared to the same periods last year, mainly due
to decreased expense in the Fulfillment Services business resulting, in part,
from reductions in variable expenses, primarily payroll, as well as the effect
of certain non-recurring consulting charges incurred in the second quarter of
the prior year. Operating costs for Newsstand Distribution Services increased in
the second quarter and first six months of 2005 compared to the same periods
last year as a result of several factors, including increased benefit expenses
caused by adverse health claims experience, additional marketing expenses and
the amortization of acquisition costs of certain distribution contracts
purchased in the third quarter of fiscal 2005.
Revenues at the Company's AMREP Southwest real estate subsidiary increased from
$8,101,000 in the second quarter of 2005 to $11,975,000 in the same quarter of
the current year. For the six month period, these revenues increased from
$18,066,000 last year to $19,664,000 this year. These improvements were the
result of increased sales of both commercial properties and developed
residential lots in the Company's principal market of Rio Rancho, New Mexico.
The gross profit percentage on land sales decreased from 64% and 58% in the
second quarter and first six months of 2005 to 54% and 47% for the same periods
of 2006 because a higher proportion of developed lots, which generally have
lower gross profit margins than undeveloped lots, were sold in the current year.
The gross profit contribution from real estate operations improved significantly
in the second quarter of 2006 compared to the prior year period due to higher
revenues in this year's period, but for the first six months this year the gross
profit contribution decreased from the same period last year, primarily because
the prior year included the revenues and gross profit contribution from
condemnation proceedings on the Company's last parcel of land in Florida.
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.
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AMREP Corporation's Kable Media Services, Inc. subsidiary distributes magazines
to wholesalers and provides subscription fulfillment and related services to
publishers and others, and its AMREP Southwest Inc. subsidiary is a major
landholder and leading developer of real estate in New Mexico.
*****
(Financial Data Follows)
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AMREP Corporation
and Subsidiaries
Financial Highlights
(Unaudited)
Three Months Ended October 31,
2005 2004
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Revenues ...................................... $ 34,847,000 $ 33,230,000
Net income (loss):
Continuing operations ....................... $ 5,062,000 $ 4,370,000
Discontinued operations ..................... (6,000) (175,000)
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$ 5,056,000 $ 4,195,000
Earnings (loss) per share - Basic and Diluted:
Continuing operations ....................... $ 0.76 $ 0.66
Discontinued operations ..................... 0.00 (0.03)
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$ 0.76 $ 0.63
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Weighted average number of common shares
outstanding ................................. 6,630,000 6,615,000
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Six Months Ended October 31,
2005 2004
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Revenues ...................................... $ 64,861,000 $ 66,868,000
Net income (loss):
Continuing operations ....................... $ 6,864,000 $ 8,311,000
Discontinued operations ..................... 3,556,000 (90,000)
----------------------------
$ 10,420,000 $ 8,221,000
Earnings (loss) per share - Basic and Diluted:
Continuing operations ....................... $ 1.04 $ 1.26
Discontinued operations...................... 0.53 (0.02)
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$ 1.57 $ 1.24
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Weighted average number of common shares
outstanding ................................. 6,628,000 6,611,000
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