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 July 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 _____________________
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 (IRS 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
---------------
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 subject to such filing requirements
for the past 90 days.
Yes X No
--- ---
Number of Shares of Common Stock, par value $.10 per share, outstanding at
September 12, 1996 - 7,368,650.
<PAGE>
FORM 10-Q
AMREP CORPORATION AND SUBSIDIARIES
INDEX
PART I PAGE NO.
Consolidated Financial Statements:
Balance Sheets
July 31, 1996 (Unaudited) and
April 30, 1996 (Audited) 1
Statements of Operations and Retained Earnings (Unaudited)
Three Months Ended July 31, 1996 and 1995 2
Statements of Cash Flows (Unaudited)
Three Months Ended July 31, 1996 and 1995 3
Note to Consolidated Financial Statements 4
Management's Discussion and Analysis 5-6
PART II
Other Information 7
Signatures 8
Exhibit Index 9
<PAGE>
FORM 10-Q
AMREP CORPORATION AND SUBSIDIARIES
Consolidated Balance Sheets
July 31, 1996 and April 30, 1996
(Thousands, except par value and number of shares)
July 31, 1996 April 30, 1996
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(Unaudited) (Audited)
ASSETS
- ------
Cash and cash equivalents $ 7,828 $ 7,607
Receivables, net:
Real estate operations 8,541 11,371
Magazine circulation operations 44,300 38,234
Real estate inventory 75,129 71,916
Rental and other real estate investments 7,203 8,211
Investment property 7,580 8,042
Property, plant and equipment, at cost,
net of accumulated depreciation and
amortization of $12,205 at July 31, 1996
and $11,796 at April 30, 1996 16,932 16,995
Other assets 14,693 14,215
Excess of cost of subsidiary over net
assets acquired 5,205 5,205
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$ 187,411 $ 181,796
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LIABILITIES AND SHAREHOLDERS' EQUITY
Account payable, deposits and accrued $ 31,596 $ 33,013
expenses
Notes payable:
Amounts due within one year 16,348 17,146
Amounts subsequently due 44,137 35,036
Collateralized mortgage obligations 535 2,209
Deferred income taxes 25,840 25,840
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118,456 113,244
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Shareholders' equity
Common stock, $.10 par value;
shares authorized -- 20,000; shares
issued and outstanding -- 7,398,650
at July 31, 1996 and April 30, 1996 740 740
Capital contributed in excess of par value 44,928 44,928
Retained earnings 23,467 23,064
Treasury stock, at cost; 30,000 shares (180) (180)
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68,955 68,552
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$ 187,411 $ 181,796
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See note to consolidated financial statements.
<PAGE>
FORM 10-Q
AMREP CORPORATION AND SUBSIDIARIES
Consolidated Statements of Operations and Retained Earnings (Unaudited)
Three Months Ended July 31, 1996 and 1995
(Thousands, except per share amounts)
July 31, 1996 July 31, 1995
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REVENUES
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Real estate operations:
Home and condominium sales $ 17,053 $ 23,505
Land sales 3,075 1,987
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20,128 25,492
Magazine circulation operations 12,359 13,917
Interest and other operations 1,921 1,513
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34,408 40,922
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COST AND EXPENSES
- -----------------
Real estate cost of sales 15,631 20,377
Operating expenses:
Magazine circulation operations 10,722 11,251
Real estate commissions and selling 1,398 1,582
Other operations 1,809 1,655
General and administrative:
Real estate operations and corporate 1,767 2,054
Magazine circulation operations 1,599 1,692
Interest, net 810 1,010
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33,736 39,621
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Income before income taxes 672 1,301
PROVISION FOR INCOME TAXES 269 520
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NET INCOME 403 781
RETAINED EARNINGS, beginning of period 23,064 20,279
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RETAINED EARNINGS, end of period $ 23,467 $ 21,060
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NET INCOME PER SHARE $ 0.05 $ 0.11
====== ======
WEIGHTED AVERAGE NUMBER OF COMMON SHARES
OUTSTANDING 7,369 7,395
====== ======
See note to consolidated financial statements.
<PAGE>
FORM 10-Q
AMREP CORPORATION AND SUBSIDIARIES
Consolidated Statements of Cash Flows (Unaudited)
Three Months Ended July 31, 1996 and 1995
(Thousands)
1996 1995
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CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income $ 403 $ 781
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Adjustments to reconcile net income to net
cash provided by operating activities -
Depreciation and amortization 572 513
Changes in assets and liabilities -
Receivables (3,236) (3,198)
Real estate inventory (3,107) (297)
Rental and other real estate projects 1,008 895
Investment property 462 202
Other assets (627) 454
Accounts payable, deposits and (1,417) 946
accrued expenses
Deferred income taxes - 495
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Total adjustments (6,345) 10
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Net cash provided (used) by
operating activities (5,942) 791
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CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (466) (1,117)
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Net cash used by investing
activities (466) (1,117)
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CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from debt financing 15,735 7,467
Principal debt payments (9,106) (6,562)
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Net cash provided by financing
activities 6,629 905
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Increase in cash and cash equivalents 221 579
CASH AND CASH EQUIVALENTS,
beginning of period 7,607 9,266
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CASH AND CASH EQUIVALENTS,
end of period $ 7,828 $ 9,845
======= =======
SUPPLEMENTAL CASH FLOW INFORMATION
Interest paid - net of amounts
capitalized $ 961 $ 1,177
======= =======
Income taxes paid $ 1,264 $ 25
======= =======
See note to consolidated financial statements.
<PAGE>
FORM 10-Q
AMREP CORPORATION AND SUBSIDIARIES
Note to Consolidated Financial Statements (Unaudited)
Three Months Ended July 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.
<PAGE>
FORM 10-Q
AMREP CORPORATION AND SUBSIDIARIES
Management's Discussion and Analysis of
Financial Condition and Results of Operations (Page 1 of 2)
FINANCIAL CONDITION
- -------------------
Notes payable, which are collateralized by real estate inventory and magazine
circulation accounts receivable, increased by approximately $8.3 million from
April 30, 1996 to July 31, 1996, resulting from increases in both real estate
and magazine circulation operations.
RESULTS OF OPERATIONS
- ---------------------
Total revenues for the quarter ended July 31, 1996 decreased 16% from the
similar period last year, reflecting lower revenues from both housing sales and
magazine circulation operations, partially offset by higher revenues from land
sales. Revenues from housing sales decreased approximately 27%, resulting from a
decrease in housing unit deliveries from 215 to 143, which was caused primarily
by the timing of new project openings, and which was partially offset by an
increase in the average selling price of homes closed from $109,300 to $119,300.
The increase in the average selling prices on homes closed resulted both from
price increases and because a proportionately greater share of the houses sold
in New Mexico this quarter were larger, more expensive homes than those sold in
the corresponding prior year period. The gross margin on housing sales decreased
by approximately $1.4 million in the first quarter this year as compared to the
similar period last year, resulting primarily from the decreased unit deliveries
and lower revenues. Revenues and related gross profit from land sales increased,
primarily due to an increase in the level of commercial and industrial lot
sales. Land sale revenues and related gross profits can vary from year to year
as a result of the nature and timing of specific transactions, and thus prior
results are not an indication of amounts that may be expected to occur in future
periods. As a result of these factors, gross profit from combined housing and
land sales decreased by approximately $600,000 in the first quarter this year as
compared to the similar period last year.
Revenues from magazine circulation operations decreased approximately 11% in the
first quarter this year as compared to the similar period last year, due to
decreases in both the Fulfillment Services and Newsstand Distribution Services.
Revenues from Fulfillment Services decreased approximately 9% in the first
quarter this year, due primarily to client losses. Revenues from the Newsstand
Distribution Services decreased approximately 15% in the first quarter this year
due to decreased magazine sales. This sales decrease
<PAGE>
FORM 10-Q
AMREP CORPORATION AND SUBSIDIARIES
Management's Discussion and Analysis of
Financial Condition and Results of Operations (Page 2 of 2)
resulted in part from continuing consumer resistance to the increased price of
magazines caused by an increase in the cost of paper earlier this calendar year.
In addition, a major realignment of industry relationships in the distribution
of magazines developed rapidly during 1996, which led to a substantial reduction
in the number of wholesalers.
These changes have adversely impacted Kable's sales and
profits. The decrease in magazine circulation operating expenses resulted from
and partially offset the revenue decreases discussed above. As a result of these
factors, operating income from magazine circulation operations decreased by
approximately $900,000 in the first quarter this year as compared to last year.
The decrease in real estate commissions and selling expenses was primarily the
result of the decrease in revenue from housing sales. Real estate and corporate
general and administrative expenses decreased by approximately 14% from the
first quarter last year, primarily as a result of the vacant Chief Executive
Officer's position and staff reductions.
Interest expense decreased in the first quarter this year due primarily to lower
average borrowings and interest rates, since a large portion of the Company's
borrowings are related to the prime rate. Revenues less costs and expenses from
interest and other operations increased by approximately $250,000, due in part
to a gain from the early redemption of four collateralized mortgage bond series
in the first quarter this year.
<PAGE>
FORM 10-Q
AMREP CORPORATION AND SUBSIDIARIES
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:
No reports on Form 8-K were filed by the Registrant
during the quarter ended July 31, 1996.
<PAGE>
FORM 10-Q
AMREP CORPORATION AND SUBSIDIARIES
SIGNATURES
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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: September 13, 1996 By: /s/ Mohan Vachani
-----------------
Mohan Vachani
Senior Vice President,
Chief Financial Officer
Dated: September 13,1996 By: /s/ Peter M. Pizza
------------------
Peter M. Pizza
Controller
<PAGE>
FORM 10-Q
AMREP CORPORATION AND SUBSIDIARIES
EXHIBIT INDEX
-------------
27 Financial Data Schedule
<PAGE>
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<NAME> AMREP CORPORATION
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<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> APR-30-1996
<PERIOD-START> MAY-01-1996
<PERIOD-END> JUL-31-1996
<EXCHANGE-RATE> 1
<CASH> 7,828
<SECURITIES> 0
<RECEIVABLES> 52,841
<ALLOWANCES> 0
<INVENTORY> 88,782
<CURRENT-ASSETS> 0
<PP&E> 29,137
<DEPRECIATION> (12,205)
<TOTAL-ASSETS> 186,894
<CURRENT-LIABILITIES> 0
<BONDS> 60,518
0
0
<COMMON> 740
<OTHER-SE> 68,215
<TOTAL-LIABILITY-AND-EQUITY> 186,894
<SALES> 20,128
<TOTAL-REVENUES> 34,408
<CGS> 15,631
<TOTAL-COSTS> 28,162
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<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 810
<INCOME-PRETAX> 672
<INCOME-TAX> 269
<INCOME-CONTINUING> 403
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<NET-INCOME> 403
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