PRINCETON, N.J., Dec. 10 /PRNewswire-FirstCall/ -- AMREP
Corporation (NYSE:AXR) today reported a net loss of $985,000, or
$0.16 per share, for its fiscal 2010 second quarter ended October
31, 2009 compared to net income of $2,895,000, or $0.48 per share,
for its fiscal 2009 second quarter ended October 31, 2008. For the
first six months of fiscal 2010, the Company had a net loss of
$2,041,000, or $0.34 per share, compared to net income of
$2,966,000, or $0.49 per share, for the same period of fiscal 2009.
Revenues were $32,333,000 and $64,790,000 in the second quarter and
first six months of 2010 versus $40,290,000 and $75,860,000 for the
same periods last year. Revenues from land sales at the Company's
AMREP Southwest subsidiary were $1,670,000 and $3,155,000 for the
three and six month periods ended October 31, 2009 compared to
$4,810,000 and $6,073,000 for the same periods of the prior year,
with the results of all periods reflecting a continued softness in
the real estate market in the greater Albuquerque-metro and Rio
Rancho areas that is consistent with the well-publicized problems
of the national homebuilding industry and credit markets. These
decreases in revenues in 2010 primarily reflected the second
quarter 2009 sale of approximately 50 acres of undeveloped land for
$3,849,000 to one purchaser with no similar sale in the first six
months of 2010. The average gross profit percentage on land sales
decreased from 97% and 91% for the second quarter and first six
months of 2009 to 40% and 48% for the same periods in 2010. This
decrease was primarily attributable to a gross profit of $3,825,000
(99%) on the previously mentioned second quarter 2009 sale of
approximately 50 acres of undeveloped land. Revenues, gross profits
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, including both Fulfillment Services and Newsstand
Distribution Services, decreased from $35,254,000 and $69,277,000
for the second quarter and first six months of 2009 to $30,625,000
and $61,393,000 for the same periods in 2010. Magazine publishers,
who are the principal customers of the Company's Media Services
operations, have continued to suffer from reduced advertising
revenues and lower subscription and newsstand sales during 2010,
which has caused certain publishers to close magazine titles or
seek more favorable terms from Kable or its competitors, all of
which has led to reduced business for the Company's Media Services
operations. Revenues from Kable's Subscription Fulfillment Services
operations decreased from $31,334,000 and $61,176,000 for the
second quarter and first six months of 2009 to $24,230,000 and
$49,357,000 for the same periods of 2010 primarily due to the
industry factors noted above, partly offset by revenue gains from
new and some existing clients. Revenues from Kable's Newsstand
Distribution Services operations increased from $3,096,000 and
$6,451,000 for the second quarter and first six months of 2009 to
$3,595,000 and $6,800,000 for the same periods of 2010 as a result
of changes in product mix and magazine cover price increases. The
net decrease in the combined revenues from Subscription Fulfillment
Services and Newsstand Distribution Services was partly offset by
increased revenues from Kable's Product Fulfillment Services and
Other business segment, which increased from $824,000 and
$1,650,000 for the second quarter and first six months of 2009 to
$2,799,000 and $5,235,000 for the same periods in 2010, reflecting
the inclusion of the revenues of a product repackaging and
fulfillment business and a temporary staffing business that were
acquired in the third quarter of 2009. Kable's operating expenses
decreased by $3,962,000 and $6,177,000 for the second quarter and
first six months of 2010 compared to the same periods in 2009,
primarily attributable to lower payroll and benefits costs and, to
a lesser extent, efficiencies related to the ongoing project to
consolidate the Subscription Fulfillment Services business from
three locations in Colorado, Florida and Illinois into one existing
location at Palm Coast, Florida. AMREP Southwest has a loan
agreement with a bank that matures on December 17, 2009. The lender
has issued a commitment letter that would replace the existing
facility. The replacement facility would mature in 364 days and,
among other provisions, would reduce the amount that may be
borrowed under the facility from the current balance outstanding of
$24,000,000 to $22,500,000. AMREP Southwest is considering the
terms of the replacement facility proposed in the lender's
commitment letter and no replacement loan agreement has as yet been
entered into. The lender has not extended the maturity date of the
existing facility and if it does not do so, but demands repayment
of amounts due under that facility, AMREP Southwest would not have
sufficient funds to satisfy such demand. 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. The quarterly results should be considered
in conjunction with the Company's audited financial statements for
fiscal 2009, which are included in the Company's 2009 Annual Report
on Form 10-K filed with the Securities and Exchange Commission.
Attachment 1 AMREP Corporation and Subsidiaries Financial
Highlights (Unaudited) Three Months Ended October 31,
------------------------------ 2009 2008 ---- ---- Revenues
$32,333,000 $40,290,000 Net income (loss) $(985,000) $2,895,000
Earnings (loss) per share - Basic and Diluted $(0.16) $0.48
Weighted average number of common shares outstanding 5,996,000
5,996,000 Six Months Ended October 31, ----------------------------
2009 2008 ---- ---- Revenues $64,790,000 $75,860,000 Net income
(loss) $(2,041,000) $2,966,000 Earnings (loss) per share - Basic
and Diluted $(0.34) $0.49 Weighted average number of common shares
outstanding 5,996,000 5,996,000 Attachment 2 The Company's land
sales in Rio Rancho, New Mexico were as follows (dollar amounts in
thousands): 2009 2008 -------------------------
------------------------- Revenues Revenues Acres Revenues Per Acre
Acres Revenues Per Acre Sold (in 000s) (in 000s) Sold (in 000s) (in
000s) ------ -------- -------- ----- -------- -------- Three months
ended October 31: Developed Residential 2.4 $775 $323 0.4 $86 $244
Commercial 1.7 895 526 - - - --- --- --- --- --- --- Total
Developed 4.1 1,670 407 0.4 86 244 Undeveloped - - - 87.1 4,724 54
--- --- --- ---- ----- --- Total 4.1 $1,670 $407 87.5 $4,810 $55
--- ------ ---- ---- ------ --- Six months ended October 31:
Developed Residential 5.2 $1,445 $278 1.8 $428 $238 Commercial 1.7
895 526 1.0 126 126 --- --- --- --- --- --- Total Developed 6.9
2,340 339 2.8 554 198 Undeveloped 26.0 815 31 131.9 5,519 42 ----
--- --- ----- ----- --- Total 32.9 $3,155 $96 134.7 $6,073 $45 ----
------ --- ----- ------ --- 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. DATASOURCE: AMREP Corporation CONTACT: Peter M.
Pizza, Vice President and Chief Financial Officer, AMREP
Corporation, +1-609-716-8210 Web Site: http://www.amrepcorp.com/
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