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, 1996
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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 13, 1996 - 7,368,650, net of Treasury shares.
<PAGE>
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, 1996 (Unaudited) and
April 30, 1995 (Audited) 1
Statements of Operations and Retained Earnings (Unaudited)
Nine Months Ended January 31, 1996 and 1995 2
Statements of Operations and Retained Earnings (Unaudited)
Three Months Ended January 31, 1996 and 1995 3
Statements of Cash Flows (Unaudited)
Nine Months Ended January 31, 1996 and 1995 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
<PAGE>
FORM 10-Q
AMREP CORPORATION AND SUBSIDIARIES
Consolidated Balance Sheets
January 31, 1996 and April 30, 1995
(Thousands, except par value and number of shares)
January 31, April 30,
1996 1995
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(Unaudited) (Audited)
ASSETS
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Cash and cash equivalents $ 7,840 $ 9,266
Receivables, net:
Real estate operations 9,265 10,644
Magazine circulation operations 39,303 39,391
Real estate inventory 73,309 72,464
Rental and other real estate projects 9,162 11,622
Investment property 8,205 8,751
Property, plant and equipment-at cost-
net of accumulated depreciation and
amortization of $11,385 at January 31, 1996
and $10,706 at April 30, 1995 16,867 14,128
Other assets 15,951 14,671
Excess of cost of subsidiary over net
assets acquired 5,205 5,205
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$185,107 $186,142
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
------------------------------------
Accounts payable, deposits and
accrued expenses $ 29,617 $ 32,048
Notes payable:
Amounts due within one year 19,400 9,105
Amounts subsequently due 37,277 50,015
Collateralized mortgage obligations 2,292 2,533
Deferred income taxes 28,200 26,520
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116,786 120,221
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Shareholders' equity:
Common stock, $.10 par value; shares
authorized--20,000,000; shares issued
and outstanding--7,398,650 at January 31,
1996 and 7,393,650 at April 30,1995 740 739
Capital contributed in excess of par value 44,928 44,903
Retained earnings 22,833 20,279
Treasury stock, at cost; 30,000 shares (180) -
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68,321 65,921
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$185,107 $186,142
======== ========
See notes to consolidated financial statements.
-1-
FORM 10-Q
AMREP CORPORATION AND SUBSIDIARIES
Consolidated Statements of Operations and Retained Earnings (Unaudited)
Nine Months Ended January 31, 1996 and 1995
(Thousands, except shares and per share amounts)
1996 1995
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REVENUES
- --------
Real estate operations:
Home and condominium sales $ 68,365 $ 64,081
Land sales 4,840 8,703
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73,205 72,784
Magazine circulation operations 43,210 31,945
Interest and other operations 4,861 4,897
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121,276 109,626
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COSTS AND EXPENSES
- ------------------
Real estate cost of sales 58,434 59,490
Operating expenses:
Magazine circulation operations 34,331 23,912
Rental projects - 607
Real estate commissions and selling 4,701 4,558
Other 4,757 4,600
General and administrative:
Real estate operations and corporate 6,585 5,560
Magazine circulation operations 5,140 3,644
Interest, net 3,072 2,437
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117,020 104,808
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Income before provision
for income taxes 4,256 4,818
PROVISION FOR INCOME TAXES 1,702 1,918
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Net income 2,554 2,900
RETAINED EARNINGS, beginning of period 20,279 16,264
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RETAINED EARNINGS, end of period $ 22,833 $ 19,164
============ ============
NET INCOME PER SHARE $ 0.35 $ 0.40
============ ============
Weighted average number of common
shares outstanding 7,389,599 7,329,818
============ ============
See notes to consolidated financial statements.
-2-
<PAGE>
FORM 10-Q
AMREP CORPORATION AND SUBSIDIARIES
Consolidated Statements of Operations and Retained Earnings (Unaudited)
Three Months Ended January 31, 1996 and 1995
(Thousands, except shares and per share amounts)
1996 1995
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REVENUES
- --------
Real estate operations:
Home and condominium sales $ 20,814 $ 21,270
Land sales 1,384 3,738
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22,198 25,008
Magazine circulation operations 14,145 11,677
Interest and other operations 1,601 1,275
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37,944 37,960
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COSTS AND EXPENSES
- ------------------
Real estate cost of sales 17,720 19,978
Operating expenses:
Magazine circulation operations 11,265 8,661
Rental projects - 267
Real estate commissions and selling 1,465 1,594
Other 1,577 1,427
General and administrative:
Real estate operations and corporate 2,286 1,882
Magazine circulation operations 1,788 1,312
Interest, net 1,019 886
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37,120 36,007
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Income before provision
for income taxes 824 1,953
PROVISION FOR INCOME TAXES 330 778
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Net income 494 1,175
RETAINED EARNINGS, beginning of period 22,339 17,989
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RETAINED EARNINGS, end of period $ 22,833 $ 19,164
============ ============
NET INCOME PER SHARE $ 0.07 $ 0.16
============ ============
Weighted average number of common
shares outstanding 7,378,759 7,367,552
============ ============
See notes to consolidated financial statements.
-3-
<PAGE>
FORM 10-Q
AMREP CORPORATION AND SUBSIDIARIES
Statements of Cash Flows (Unaudited) (Page 1 of 2)
Nine Months Ended January 31, 1996 and 1995
(Thousands)
1996 1995
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CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 2,554 $ 2,900
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Adjustments to reconcile net income to
net cash provided by operating activities -
Depreciation and amortization 6,579 4,699
Changes in assets and liabilities -
Receivables 1,287 (190)
Real estate inventory (581) (161)
Rental and other real estate projects 2,460 2,583
Investment property 282 (194)
Other assets (6,271) (3,634)
Accounts payable, deposits and
accrued expenses (2,431) 126
Deferred income taxes 1,680 1,860
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Total adjustments 3,005 5,089
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Net cash provided by
operating activities 5,559 7,989
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CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (4,328) (2,007)
Payment for purchase of Fulfillment
Corporation of America - (1,744)
Other, net - 600
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Net cash used by investing activities (4,328) (3,151)
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CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from debt financing 21,247 24,411
Principal debt payments (23,931) (28,341)
Proceeds from exercise of stock options 27 448
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Net cash used by financing
activities (2,657) (3,482)
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See notes to consolidated financial statements.
-4-
FORM 10-Q
AMREP CORPORATION AND SUBSIDIARIES
Statements of Cash Flows (Unaudited) (Page 2 of 2)
Nine Months Ended January 31, 1996 and 1995
(Thousands)
1996 1995
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Increase (decrease) in cash and cash
equivalents (1,426) 1,356
CASH AND CASH EQUIVALENTS, beginning
of period 9,266 6,623
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CASH AND CASH EQUIVALENTS, end
of period $ 7,840 $ 7,979
========== ==========
SUPPLEMENTAL CASH FLOW INFORMATION:
Interest paid - net of amounts capitalized $ 3,014 $ 3,015
========== ==========
Income taxes paid $ 22 $ 58
========== ==========
See notes to consolidated financial statements.
-5-
<PAGE>
FORM 10-Q
AMREP CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Unaudited)
Nine Months Ended January 31, 1996 and 1995
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 January 31, 1995 Statement of
Operations have been reclassified to conform to the
presentation used at January 31, 1996.
-6-
<PAGE>
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, 1996
FINANCIAL CONDITION
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Subsequent to January 31, 1996, the Company finalized an
agreement with one of its lenders for a development and
construction loan in the aggregate amount of $9.8 million on
a project in Colorado. Portions of the loan mature in 1997
and 1998, but may be extended for up to one year if certain
provisions are met.
RESULTS OF OPERATIONS
---------------------
Total revenues increased approximately 11% for the nine
months ended January 31, 1996, and remained approximately
the same for the third quarter, as compared to the similar
periods last year. Results for the nine months reflect higher
revenues from both housing sales and magazine circulation
operations, partially offset by lower revenues from land
sales, while the third quarter reflects higher revenues from
magazine circulation operations, offset by lower revenues
from housing and land sales. Revenues from housing sales
increased approximately 7% in the nine months this year,
resulting from an increase in the average selling price of
homes closed from $101,600 to $113,800, which offset a
decrease in housing unit deliveries from 631 to 601. These
revenues decreased approximately 2% in the third quarter this
year, due to a decrease in housing unit deliveries from 205
to 175 which was partially offset by an increase in the
average selling price of homes closed from $103,800 to
$118,900. The increases in the average selling prices on
homes closed from 1995 to 1996 results both 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 $3.8 million and $.8 million
in the nine months and third 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 related gross profit from land sales decreased
in the three and nine month periods in 1996 from 1995,
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
-7-
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, 1996
periods. As a result of these factors, gross profit from
housing and land sales increased by approximately $1.5
million in the nine months and decreased by approximately $.6
million in the third quarter this year as compared to the
similar periods last year.
The increase in real estate commissions and selling expenses
in the nine months this year was primarily the result of
increased revenues from housing sales, and the decrease in
the third quarter this year was primarily the result of the
decrease in revenues from land sales. Real estate and
corporate general and administrative expenses increased by
approximately 18% and 21% in the nine and three months
periods in 1996 compared to 1995; increases in both periods
result from severance payments to several employees,
increased pension plan expense resulting from lower than
assumed investment performance in 1994 and additional
employees, legal and other professional fees related to the
Company's ongoing dispute with the Internal Revenue Service
and other general expenses.
Revenues from magazine circulation operations increased
approximately 35% and 21% in the nine months and third
quarter, respectively, this year as compared to the similar
periods last year primarily due to the acquisition in January
1995 of the business of Fulfillment Corporation of America
(FCA). Revenues from the newsstand distribution services are
generally comparable for the nine month periods, however,
they decreased approximately 11% in the third quarter 1996
compared to the prior year due to decreased billings and
magazine sales percentages. At the same time operating
expenses have increased by a greater amount than revenues in
the nine months and third quarter, due to costs associated
with 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 integration
period.
Interest expense increased in the nine months and third
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 less related cost and expenses increased in the
third quarter this year primarily due to the gain on the sale
of an industrial building.
-8-
<PAGE>
PART II
Other Information
-----------------
Item 6. Exhibits and Reports on Form 8-K
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(a) Exhibits:
27. Financial Data Schedule.
(b) Reports on Form 8-K:
During the quarter ended January 31, 1996, Registrant
filed a Current Report on Form 8-K (Date of earliest
event reported: January 18, 1996) reporting under Item
5. Other Events and Item 7. Financial Statements and
Exhibits.
-9-
<PAGE>
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 13, 1996 By: /s/ Mohan Vachani
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Senior Vice President,
Chief Financial Officer
Dated: March 13, 1996 By: /s/ Peter M. Pizza
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Controller
-10-
<PAGE>
EXHIBIT INDEX
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27 Financial Data Schedule
-11-
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> APR-30-1996
<PERIOD-END> JAN-31-1996
<CASH> 7,840
<SECURITIES> 0
<RECEIVABLES> 48,568
<ALLOWANCES> 0
<INVENTORY> 90,676
<CURRENT-ASSETS> 0
<PP&E> 28,252
<DEPRECIATION> 11,385
<TOTAL-ASSETS> 185,107
<CURRENT-LIABILITIES> 0
<BONDS> 58,969
<COMMON> 740
0
0
<OTHER-SE> 67,581
<TOTAL-LIABILITY-AND-EQUITY> 185,107
<SALES> 73,205
<TOTAL-REVENUES> 121,276
<CGS> 58,434
<TOTAL-COSTS> 97,522
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 3,072
<INCOME-PRETAX> 4,256
<INCOME-TAX> 1,702
<INCOME-CONTINUING> 2,554
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,554
<EPS-PRIMARY> 0.35
<EPS-DILUTED> 0
</TABLE>
