-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, IY1F04HmNzsyBD4mE2klO87pKLCS9agYkIXMzPrCkRwsaQVxn+RWYsRCtJG2IsUH 6af5siO5oX63+JriE9RCoQ== 0000006207-98-000001.txt : 19980317 0000006207-98-000001.hdr.sgml : 19980317 ACCESSION NUMBER: 0000006207-98-000001 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19980131 FILED AS OF DATE: 19980316 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: AMREP CORP CENTRAL INDEX KEY: 0000006207 STANDARD INDUSTRIAL CLASSIFICATION: OPERATIVE BUILDERS [1531] IRS NUMBER: 590936128 STATE OF INCORPORATION: OK FISCAL YEAR END: 0430 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-04702 FILM NUMBER: 98566117 BUSINESS ADDRESS: STREET 1: 641 LEXINGTON AVENUE STREET 2: 6TH FLOOR CITY: NEW YORK STATE: NY ZIP: 10022 BUSINESS PHONE: 2127054700 MAIL ADDRESS: STREET 1: 641 LEXINGTON AVE STREET 2: 6TH FLOOR CITY: NEW YORK STATE: NY ZIP: 10022 FORMER COMPANY: FORMER CONFORMED NAME: AMERICAN REALTY & PETROLEUM CORP DATE OF NAME CHANGE: 19671019 10-Q 1 3RD QUARTER FILING 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, 1998 ------------------------------------------------ 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 ----------- AMREP Corporation - ------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) Oklahoma 59-0936128 - ------------------------------------------------------------------------------- (State or other jurisdiction of (IRS Employer incorporation or organization) Identification No.) 641 Lexington Avenue, Sixth Floor, New York, New York 10022 - ------------------------------------------------------------------------------- (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 March 10, 1998 - 7,368,650. FORM 10-Q AMREP CORPORATION AND SUBSIDIARIES INDEX ----- PART I PAGE NO. - ------ -------- Consolidated Financial Statements: Balance Sheets January 31, 1998 (Unaudited) and April 30, 1997 (Audited) 1 Statements of Income and Retained Earnings (Unaudited) Three Months Ended January 31, 1998 and 1997 2 Statements of Income and Retained Earnings (Unaudited) Nine Months Ended January 31, 1998 and 1997 3 Statements of Cash Flows (Unaudited) Nine Months Ended January 31, 1998 and 1997 4 Notes to Consolidated Financial Statements 5 Management's Discussion and Analysis 6 - 7 PART II - ------- Other Information 8 Signatures 9 Exhibit Index 10 FORM 10-Q AMREP CORPORATION AND SUBSIDIARIES Consolidated Balance Sheets January 31, 1998 and April 30, 1997 (Dollar amounts in thousands, except par value) January 31, 1998 April 30, 1997 ---------------- -------------- (Unaudited) (Audited) ASSETS - ------ Cash and cash equivalents $ 4,731 $ 16,178 Receivables, net: Real estate operations 11,084 10,486 Magazine circulation operations 58,665 43,015 Real estate inventory 93,162 86,102 Investment property 5,132 6,413 Other real estate investments 1,525 4,893 Property, plant and equipment, at cost, net of accumulated depreciation and amortization of $12,992 at January 31, 17,639 18,974 1998 and $13,532 at April 30, 1997 Other assets 15,658 14,059 Excess of cost of subsidiaries over net assets acquired 6,238 5,191 --------------- ------------- $ 213,834 $ 205,311 =============== ============= LIABILITIES AND SHAREHOLDERS' EQUITY - ------------------------------------ Accounts payable, deposits and accrued expenses $ 34,192 $ 30,081 Notes payable: Amounts due within one year 29,786 24,833 Amounts subsequently due 46,232 54,991 Taxes payable: Amounts due within one year 1,799 512 Amounts subsequently due 13,923 13,923 Deferred income taxes 4,882 5,137 --------------- ------------- 130,814 129,477 --------------- ------------- Shareholders' equity: Common stock, $.10 par value; shares authorized -- 20,000,000; shares issued --7,398,677 at January 31, 1998 and April 30, 1997 740 740 Capital contributed in excess of par value 44,928 44,928 Retained earnings 37,532 30,346 Treasury stock, at cost; 30,027 shares (180) (180) --------------- ------------- 83,020 75,834 --------------- ------------- $ 213,834 $ 205,311 =============== ============= See notes to consolidated financial statements. 1 FORM 10-Q AMREP CORPORATION AND SUBSIDIARIES Consolidated Statements of Income and Retained Earnings (Unaudited) Three Months Ended January 31, 1998 and 1997 (Amounts in thousands, except per share amounts) 1998 1997 ------------ ----------- REVENUES - -------- Real estate operations: Home and condominium sales $ 19,964 $ 17,652 Land sales 6,946 3,935 ------------ ----------- 26,910 21,587 Magazine circulation operations 14,516 13,831 Interest and other operations 5,423 1,343 ------------ ----------- 46,849 36,761 ------------ ----------- COSTS AND EXPENSES - ------------------ Real estate cost of sales 21,325 17,090 Operating expenses: Magazine circulation operations 11,049 11,334 Real estate commissions and selling 1,771 1,769 Other operations 884 1,457 General and administrative: Real estate operations and corporate 2,140 1,857 Magazine circulation operations 1,680 1,631 Interest, net 1,096 1,178 ------------ ----------- 39,945 36,316 ------------ ----------- INCOME BEFORE INCOME TAXES 6,904 445 PROVISION FOR INCOME TAXES 2,762 178 ------------ ----------- NET INCOME 4,142 267 RETAINED EARNINGS, beginning of period 33,390 23,729 ------------ ----------- RETAINED EARNINGS, end of period $ 37,532 $ 23,996 ============ =========== NET INCOME PER SHARE - BASIC AND DILUTED $ 0.56 $ 0.04 ============ =========== WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING - BASIC AND DILUTED 7,369 7,369 ============ =========== See notes to consolidated financial statements. 2 FORM 10-Q AMREP CORPORATION AND SUBSIDIARIES Consolidated Statements of Income and Retained Earnings (Unaudited) Nine Months Ended January 31, 1998 and 1997 (Amounts in thousands, except per share amounts) 1998 1997 ----------- ---------- REVENUES - -------- Real estate operations: Home and condominium sales $ 58,332 $ 47,977 Land sales 18,375 10,848 ----------- ---------- 76,707 58,825 Magazine circulation operations 42,710 40,919 Interest and other operations 8,767 4,655 ----------- ---------- 128,184 104,399 ----------- ---------- COSTS AND EXPENSES - ------------------ Real estate cost of sales 59,738 46,362 Operating expenses: Magazine circulation operations 32,945 33,393 Real estate commissions and selling 5,370 4,840 Other operations 3,979 4,908 General and administrative: Real estate operations and corporate 5,895 5,627 Magazine circulation operations 4,871 4,711 Interest, net 3,409 3,005 ----------- ---------- 116,207 102,846 ----------- ---------- INCOME BEFORE INCOME TAXES 11,977 1,553 PROVISION FOR INCOME TAXES 4,791 621 ----------- ---------- NET INCOME 7,186 932 RETAINED EARNINGS, beginning of period 30,346 23,064 ----------- ---------- RETAINED EARNINGS, end of period $ 37,532 $ 23,996 =========== ========== NET INCOME PER SHARE - BASIC AND DILUTED $ 0.98 $ 0.13 =========== ========== WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING - BASIC AND DILUTED 7,369 7,369 =========== ========== See notes to consolidated financial statements. 3 FORM 10-Q AMREP CORPORATION AND SUBSIDIARIES Consolidated Statements of Cash Flows (Unaudited) Nine Months Ended January 31, 1998 and 1997 (Amounts in thousands) 1998 1997 --------- -------- CASH FLOWS FROM OPERATING ACTIVITIES: Net Income $ 7,186 $ 932 --------- -------- Adjustments to reconcile net income to net cash used by operating activities - Depreciation and amortization 2,505 1,966 Changes in assets and liabilities, net of effects from purchase of assets of business: Receivables, net (15,987) (4,560) Real estate inventory (7,060) (16,758) Other real estate investments 3,368 2,399 Investment property 1,281 754 Other assets (1,347) (976) Accounts payable, deposits and accrued expenses 4,061 (4,663) Taxes payable 1,287 - Deferred income taxes (255) - Gain from sale of real estate inventory related to reduction in accounts payable - (579) --------- -------- Total adjustments (12,147) (22,417) --------- -------- Net cash used by operating activities (4,961) (21,485) --------- -------- CASH FLOWS FROM INVESTING ACTIVITIES: Capital expenditures (1,783) (2,617) Purchase of assets of business, net of cash acquired (2,202) - Book value of fixed assets sold 1,305 - --------- -------- Net cash used by investing activities (2,680) (2,617) --------- -------- CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from debt financing 30,242 54,622 Principal debt payments (34,048) (31,175) --------- -------- Net cash provided (used) by financing activities (3,806) 23,447 --------- -------- DECREASE IN CASH AND CASH EQUIVALENTS (11,447) (655) CASH AND CASH EQUIVALENTS, beginning of period 16,178 7,607 ---------- -------- CASH AND CASH EQUIVALENTS, end of period $ 4,731 $ 6,952 ========== ======== SUPPLEMENTAL CASH FLOW INFORMATION: Interest paid - net of amounts capitalized $ 3,016 $ 4,142 ========= ======== Income taxes paid $ 3,759 $ 2,430 ========= ======== SUPPLEMENTAL INFORMATION REGARDING NON-CASH OPERATING ACTIVITIES: Reduction in accounts payable related to sale of real estate inventory $ - $ 800 ========= ======== See notes to consolidated financial statements. 4 FORM 10-Q AMREP CORPORATION AND SUBSIDIARIES Notes to Consolidated Financial Statements (Unaudited) Nine Months Ended January 31, 1998 and 1997 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 as previously reported in the April 30, 1997 Consolidated Balance Sheet and January 31, 1997 Consolidated Statement of Income and Statement of Cash Flows have been reclassified to conform to the presentation used at January 31, 1998. 5 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, 1998 RESULTS OF OPERATIONS - --------------------- Total revenues for the three and nine month periods ended January 31, 1998 increased 27% and 23%, respectively, from the same periods last year, reflecting higher revenues from both real estate and magazine circulation operations. Revenues from real estate operations increased 25% and 30% during the three and nine month periods ended January 31, 1998, respectively, compared to the prior year, resulting from increases in both home and condominium and land sales. Revenues from home and condominium sales increased 13% and 22% in the three and nine month periods, respectively, which generally reflect an increase in total unit deliveries from 154 to 165 in the third quarter and from 403 to 497 in the nine month period as compared to the same periods last year. This increase was due in part to increased home deliveries in Colorado resulting from additional projects from which homes are being sold and delivered, as well as from deliveries contributed from the Company's northern California operations, which were acquired by the Company in September 1997. Although housing revenues increased, there was a slight decrease in the gross profit percentage for housing, which resulted from a number of factors, including a change in the mix of homes delivered and higher lot development costs. In addition, the Company closed an increased number of large commercial land sales in New Mexico throughout this fiscal year compared to the prior year, which resulted in increased revenues of 77% from land sales for the quarter and 69% for the nine month period. 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 increased by approximately $1.1 million in the third quarter and by approximately $4.5 million in the nine months this year, respectively, as compared to the similar periods last year. Revenues from magazine circulation operations increased approximately 5% and 4% in the three and nine months periods ended January 31, 1998, as compared to the same periods last year, due to increases in both Fulfillment Services and Newsstand Distribution Services. Revenues from Fulfillment Services increased approximately 5% in both the three and nine month periods this year, respectively, due primarily to increased volumes resulting from a new contract with a major publisher, which was partially offset by decreased volumes in other areas of the business. Revenues from Newsstand Distribution Services increased approximately 4% and 2% in the three and nine month periods this year, respectively, compared to the prior year, due to a modest increase in the volume of magazine sales. 6 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, 1998 The major realignment and consolidation of relationships in the distribution chain for magazines which developed during 1996 continues to affect the industry, and the Company continues to address the situation. Magazine circulation operating expenses have decreased from approximately 81% of related revenues last year to approximately 77% of related revenues in the current year, reflecting the completed integration of the acquisition of Kable's Ohio operations and the favorable impact of cost reduction initiatives. As a result of these factors, operating income from magazine circulation operations increased by approximately $970,000 and $2,240,000 in the third quarter and nine months this year, respectively, as compared to last year. During the third quarter of fiscal 1998, the Company sold the Rio Rancho Golf and Country Club, and its 50% limited partnership interest in The Classic at West Palm Beach, a congregate care facility in Florida, and recognized an aggregate non-recurring gain of approximately $4.2 million, which amount is included in "Interest and other operations". Real estate commissions and selling expenses increased approximately $530,000 in the nine months, primarily as a result of the increased volume, as well as from an increase in the number of projects open for sale. Real estate and corporate general and administrative expenses increased $283,000 in the three month period and $268, 000 in the nine months, principally as a result of the Company's expansion into northern California in September 1997. General and administrative costs of the magazine circulation operations increased by approximately 3% in both the three and nine month periods, respectively, commensurate with the revenue increase. Interest expense increased in both real estate and magazine operations in both the third quarter and nine months period this year primarily due to higher average borrowings partially offset by an increase in the amount of capitalized real estate interest. FINANCIAL CONDITION - ------------------- Receivables from magazine circulation operations increased from $43.0 million at April 30, 1997, to $58.7 million at January 31, 1998, resulting partially from the timing of monthly billings as well as from delays in payments experienced by Kable from wholesalers which Kable believes is partially a result of the industry consolidation issue as referred to above. As a result, cash decreased by $11.4 million and accounts payable, deposits and accrued expenses increased by approximately $4.1 million at January 31, 1998 compared to April 30, 1997. 7 FORM 10-Q AMREP CORPORATION AND SUBSIDIARIES PART II Other Information ----------------- Item 6. Exhibits and Reports on Form 8-K - ------- -------------------------------- (a) Exhibits: --------- 27 Financial Data Schedule. (b) Reports on Form 8-K. -------------------- No reports on Form 8-K were filed by Registrant during the quarter ended January 31, 1998. 8 FORM 10-Q AMREP CORPORATION AND SUBSIDIARIES 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, 1998 By: /s/ Mohan Vachani ----------------- Mohan Vachani Senior Vice President, Chief Financial Officer Dated: March 13, 1998 By: /s/ Peter M. Pizza ------------------ Peter M. Pizza Vice President, Controller 9 FORM 10-Q AMREP CORPORATION AND SUBSIDIARIES EXHIBIT INDEX ------------- 27 Financial Data Schedule. 10 EX-27 2 FDS -- FOR THE THIRD QUARTER ENDED 01/31/98
5 FDS - 3RD QUARTER 0000006207 AMREP CORPORATION 1,000 U.S.DOLLARS 9-MOS APR-30-1998 MAY-01-1997 JAN-31-1998 1 4,731 0 69,749 0 99,819 0 30,631 12,992 213,834 0 46,232 0 0 740 82,280 213,834 76,707 128,184 59,738 96,662 0 0 3,409 11,977 4,791 7,186 0 0 0 7,186 0.98 0
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