PRINCETON, N.J., July 14 /PRNewswire-FirstCall/ -- AMREP
Corporation (NYSE:AXR) today announced that it recorded a pre-tax,
non-cash impairment charge in the fourth quarter of its fiscal year
2009 ended April 30, 2009 of $50,246,000 ($41,557,000 after tax, or
$6.93 per share). This impairment charge reflected the write-off of
all of the goodwill of the Company's Subscription Fulfillment
Services segment. After giving effect to this impairment charge,
the Company reported a net loss of $43,466,000, or $7.25 per share,
for fiscal 2009 compared to net income of $13,705,000, or $2.19 per
share, in fiscal 2008. Revenues were $145,901,000 compared to
$172,061,000 in the prior year. For the fourth quarter of 2009, the
net loss after the impairment charge was $46,332,000, or $7.73 per
share, compared to net income of $529,000, or $0.09 per share, in
the same period of 2008. Fourth quarter 2009 revenues were
$34,321,000 versus fourth quarter 2008 revenues of $35,177,000.
Results for 2009 were entirely from continuing operations,
including the impairment charge, while 2008's results included a
net loss from discontinued operations of $57,000, or $0.01 per
share, that reflected costs incurred in connection with the
settlement of all litigation related to the Company's El Dorado,
New Mexico water utility subsidiary that were in addition to costs
that had been accrued for this matter in fiscal year 2007.
Excluding the impairment charge, the net loss from continuing
operations was $4,775,000, or $0.80 per share, in the fourth
quarter of 2009, and $1,909,000, or $0.32 per share, for the full
year of 2009. This included in both periods the write-off of a
$6,500,000 receivable from a major magazine wholesaler which
recently closed its business ($4,095,000 after tax, or $0.68 per
share). The primary reason for the fourth quarter 2009 non-cash
goodwill impairment charge was the lower than expected fiscal 2009
revenues and operating results of the Company's Subscription
Fulfillment Services segment and a change in the Company's
internally projected future cash flows from that segment based on
current industry trends. These reduced results and expectations
reflected the well-publicized decline in the magazine publishing
industry during fiscal 2009, which represents the Subscription
Fulfillment Services segment's principal customer base, as well as
the deep recession which has impacted the U.S. economy and
consumers and the uncertainty about when this recession will end.
The goodwill impairment charge is a non-cash item which is not
expected to affect the day-to-day operations of either the Company
or its Subscription Fulfillment Services segment. Revenues from
land sales at the Company's AMREP Southwest subsidiary were
$2,320,000 and $8,914,000 in the fourth quarter and full year of
2009 compared to $289,000 and $27,902,000 for the comparable
periods of 2008. AMREP Southwest continues to experience
substantially lower land sales in its principal market of Rio
Rancho, New Mexico due to the continuing severe decline in the real
estate market in the greater Albuquerque-metro and Rio Rancho
areas. Total acres sold were 148 in 2009 and 406 in 2008. The trend
of declining permits for new home construction in the Rio Rancho
area also continues, with 27% fewer single-family residential
building permits issued during fiscal 2009 than in fiscal 2008. 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. In Rio Rancho, the Company offers for sale both
developed and undeveloped lots to national, regional and local home
builders, commercial and industrial property developers and others.
The average selling price of land sold by the Company in Rio Rancho
was $60,200 per acre in fiscal 2009 and $68,700 per acre in fiscal
2008, reflecting differences in the mix of properties sold in each
period. As a result of these and other factors, including the
nature and timing of specific transactions, revenues and related
gross profits from real estate land sales can vary significantly
from period to period and prior results are not necessarily a good
indication of what may occur in future periods. Revenues from the
Company's Media Services operations decreased 2% from $138,696,000
for fiscal 2008 to $136,206,000 for fiscal 2009, while fourth
quarter revenues declined 7%, from $34,379,000 in 2008 to
$31,878,000 in 2009. Magazine publishers, who are the principal
customers of the Company's Media Services operations, suffered
generally from lower advertising revenues and lower subscription
and newsstand sales during both periods, which led to reduced
business for the Company's Media Services operations. Revenues from
Subscription Fulfillment Services decreased from $122,521,000 and
$30,410,000 for the full year and fourth quarter of 2008 to
$115,964,000 and $25,789,000 in the same periods of 2009, primarily
reflecting the net effect of reduced and lost business that
resulted from lower publisher customer volumes and higher attrition
of magazine titles than has been previously experienced, offset in
part by revenue gains from new and some existing clients. Revenues
from Newsstand Distribution Services decreased from $12,916,000 and
$3,105,000 for the full year and fourth quarter of 2008 to
$12,400,000 and $3,026,000 in the same periods of 2009, with the
decline being due in part to the effects of a disruption in the
wholesale distribution industry during the fourth quarter of 2009
caused by the closing of a major newsstand distribution wholesaler.
Revenues from other operations within Media Services increased from
$3,259,000 and $810,000 for the full year and fourth quarter of
2008 to $7,842,000 and $3,063,000 in the same periods of 2009,
primarily from the inclusion of a product repackaging and
fulfillment business and a temporary staffing company from the date
of their asset purchases in November 2008. For more detail
regarding the non-cash goodwill impairment charge and additional
information regarding the Company's financial results for fiscal
2009, please refer to the Annual Report on Form 10-K that the
Company filed today with the Securities and Exchange Commission.
AMREP Corporation's AMREP Southwest Inc. subsidiary is a major
landholder and leading developer of real estate in Rio Rancho, 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 statements in this
news release regarding the future operations of the Company and its
Subscription Fulfillment Services segment are forward-looking
statements within the meaning of the federal securities laws. These
statements are subject to numerous risks and uncertainties, many of
which are beyond the control of AMREP Corporation and that could
cause actual results to differ materially from such statements,
including, without limitation, the Company's ability to accurately
estimate future cash flows and predict when the economy will
recover. Further information about these and other relevant risks
and uncertainties may be found in the Company's Form 10-K and its
other filings with the Securities and Exchange Commission, all of
which are available from the Commission as well as from other
sources. Recipients of this news release are cautioned to consider
these risks and uncertainties and to not place undue reliance on
the forward-looking statements contained therein. AMREP Corporation
disclaims any intention or obligation to update or revise any
forward-looking statements, whether as a result of new information,
future events or otherwise. (Two Schedules Follow) Schedule 1 AMREP
CORPORATION AND SUBSIDIARIES FINANCIAL HIGHLIGHTS Three Months
Ended April 30, 2009 (a) 2008 Revenues $34,321,000 $35,177,000 Net
income (loss) $(46,332,000) $529,000 Earnings (loss) per share -
Basic and Diluted: $(7.73) $0.09 Weighted average number of common
shares outstanding 5,996,000 5,995,000 Twelve Months Ended April
30, 2009 (a) 2008 Revenues $145,901,000 $172,061,000 Net income
(loss): Continuing operations $(43,466,000) $13,762,000
Discontinued operations - (57,000) $(43,466,000) $13,705,000
Earnings (loss) per share - Basic and Diluted: Continuing
operations $(7.25) $2.20 Discontinued operations - (0.01) $(7.25)
$2.19 Weighted average number of common shares outstanding
5,996,000 6,248,000 (a) Includes after tax, non-cash impairment
charge of $41,557,000 ($6.93 per share) in 2009 Schedule 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 April 30: Developed Residential 10 $2,320 $232 (a) $74 $296
Commercial - - - - - - Total Developed 10 2,320 232 - 74 296
Undeveloped - - - 11 215 20 Total 10 $2,320 $232 11 $289 $26 Twelve
months ended April 30: Developed Residential 13 $3,109 $239 30
$9,542 $318 Commercial 1 126 126 39 8,651 222 Total Developed 14
3,235 231 69 18,193 264 Undeveloped 134 5,679 42 337 9,709 29 Total
148 $8,914 $60 406 $27,902 $69 (a) less than 0.5 acres. DATASOURCE:
AMREP Corporation CONTACT: Peter M. Pizza, Vice President and Chief
Financial Officer, +1-609-716-8210, +1-609-716-8255 (fax)
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