-----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, CvRVSfffP9abAZKcXgBU4/pKgGXADinVpqBmLGbqHQqyV1In0/wdjoq6zJJLm+Va Ip4v89UBVWLTAb9/qdeVGg== 0000006207-08-000017.txt : 20080908 0000006207-08-000017.hdr.sgml : 20080908 20080908164135 ACCESSION NUMBER: 0000006207-08-000017 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20080731 FILED AS OF DATE: 20080908 DATE AS OF CHANGE: 20080908 FILER: COMPANY DATA: COMPANY CONFORMED NAME: AMREP CORP. CENTRAL INDEX KEY: 0000006207 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE [6500] IRS NUMBER: 590936128 STATE OF INCORPORATION: OK FISCAL YEAR END: 0430 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-04702 FILM NUMBER: 081061257 BUSINESS ADDRESS: STREET 1: 300 ALEXANDER PARK STREET 2: SUITE 204 CITY: PRINCETON STATE: NJ ZIP: 08540 BUSINESS PHONE: (609) 716-8200 MAIL ADDRESS: STREET 1: 300 ALEXANDER PARK STREET 2: SUITE 204 CITY: PRINCETON STATE: NJ ZIP: 08540 FORMER COMPANY: FORMER CONFORMED NAME: AMREP CORP DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: AMERICAN REALTY & PETROLEUM CORP DATE OF NAME CHANGE: 19671019 10-Q 1 axrq0109.txt UNITED STATES 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, 2008 ------------------------------------------------- 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.) 300 Alexander Park , Suite 204, Princeton, New Jersey 08540 - -------------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (609) 716-8200 ----------------------------- Not Applicable - -------------------------------------------------------------------------------- (Former name,former address and former fiscal year,if changed since last report) 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 (the "Exchange Act") 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 ------ ------ Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act. Large accelerated filer Accelerated filer X --- --- Non-accelerated filer Smaller reporting company --- --- (Do not check if a smaller reporting company) Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No X ------ ------ Number of Shares of Common Stock, par value $.10 per share, outstanding at August 31, 2008 - 5,995,712. AMREP CORPORATION AND SUBSIDIARIES INDEX ----- PART I. FINANCIAL INFORMATION PAGE NO. -------- Item 1. Financial Statements Consolidated Balance Sheets (Unaudited) July 31, 2008 and April 30, 2008 1 Consolidated Statements of Income and Retained Earnings (Unaudited) Three Months Ended July 31, 2008 and 2007 2 Consolidated Statements of Cash Flows (Unaudited) Three Months Ended July 31, 2008 and 2007 3 Notes to Consolidated Financial Statements 4 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 9 Item 3. Quantitative and Qualitative Disclosures About Market Risk 14 Item 4. Controls and Procedures 14 PART II. OTHER INFORMATION Item 6. Exhibits 14 SIGNATURE 15 EXHIBIT INDEX 16 PART I. FINANCIAL INFORMATION Item 1. Financial Statements - ------- -------------------- AMREP CORPORATION AND SUBSIDIARIES Consolidated Balance Sheets (Unaudited) (Thousands, except par value and number of shares) July 31, April 30, 2008 2008 ------------------ ------------------- ASSETS: Cash and cash equivalents $ 23,909 $ 32,608 Receivables, net: Real estate operations 12,084 13,124 Media services operations 49,533 45,701 ------------------ ------------------- 61,617 58,825 Taxes receivable 544 - Real estate inventory 72,832 70,252 Investment assets, net 10,295 10,300 Property, plant and equipment, net 27,616 28,914 Intangible and other assets, net 29,594 29,913 Goodwill 54,139 54,139 ------------------ ------------------- TOTAL ASSETS $ 280,546 $ 284,951 ================== =================== LIABILITIES AND SHAREHOLDERS' EQUITY: LIABILITIES: Accounts payable, net and accrued expenses $ 89,989 $ 98,532 Notes payable: Amounts due within one year 2,879 4,816 Amounts subsequently due 27,682 21,164 ------------------ ------------------- 30,561 25,980 Taxes payable - 980 Deferred income taxes and other long-term liabilities 12,756 12,358 Accrued pension cost 2,113 2,045 ------------------ ------------------- TOTAL LIABILITIES 135,419 139,895 ------------------ ------------------- SHAREHOLDERS' EQUITY: Common stock, $.10 par value; Shares authorized - 20,000,000; 7,419,704 shares issued 742 742 Capital contributed in excess of par value 46,085 46,085 Retained earnings 128,479 128,408 Accumulated other comprehensive loss, net (3,522) (3,522) Treasury stock, at cost; 1,424,492 shares (26,657) (26,657) ------------------ ------------------- TOTAL SHAREHOLDERS' EQUITY 145,127 145,056 ------------------ ------------------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 280,546 $ 284,951 ================== ===================
See notes to consolidated financial statements. 1 AMREP CORPORATION AND SUBSIDIARIES Consolidated Statements of Income and Retained Earnings (Unaudited) Three Months Ended July 31, 2008 and 2007 (Thousands, except per share amounts) 2008 2007 ------------------ ------------------- REVENUES: Real estate land sales $ 1,263 $ 18,150 Media services operations 34,023 32,299 Interest and other 284 910 ------------------ ------------------- 35,570 51,359 ------------------ ------------------- COSTS AND EXPENSES: Real estate land sales 366 5,762 Operating expenses: Media services operations 30,161 29,780 Real estate commissions and selling 78 253 Restructuring and fire recovery costs 587 303 Other 255 467 General and administrative: Media services operations 2,809 3,368 Real estate operations and corporate 1,090 1,107 Interest expense, net of capitalized amounts 112 288 ------------------ ------------------- 35,458 41,328 ------------------ ------------------- INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES 112 10,031 PROVISION FOR INCOME TAXES FROM CONTINUING OPERATIONS 41 3,711 ------------------ ------------------- INCOME FROM CONTINUING OPERATIONS 71 6,320 LOSS FROM OPERATIONS OF DISCONTINUED BUSINESS (NET OF INCOME TAXES) - (57) ------------------ ------------------- NET INCOME 71 6,263 RETAINED EARNINGS, beginning of period 128,408 121,333 DIVIDEND PAYABLE - (6,630) ------------------ ------------------- RETAINED EARNINGS, end of period $ 128,479 $ 120,966 ================== =================== EARNINGS (LOSS) PER SHARE - BASIC AND DILUTED CONTINUING OPERATIONS $ 0.01 $ 0.95 DISCONTINUED OPERATIONS - (0.01) ------------------ ------------------- EARNINGS PER SHARE - BASIC AND DILUTED $ 0.01 $ 0.94 ================== =================== WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING 5,995 6,653 ================== ===================
See notes to consolidated financial statements. 2 AMREP CORPORATION AND SUBSIDIARIES Consolidated Statements of Cash Flows (Unaudited) Three Months Ended July 31, 2008 and 2007 (Thousands) 2008 2007 ------------------ ------------------- CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 71 $ 6,263 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 2,403 2,632 Non-cash credits and charges: Pension accrual 68 42 Provision for doubtful accounts 74 (207) Gain on disposition of assets, net (3) - Changes in assets and liabilities: Receivables (2,866) (5,637) Real estate inventory (2,580) (5,912) Intangible and other assets (593) (230) Accounts payable and accrued expenses, and deferred revenue (8,543) 455 Taxes payable (1,524) 1,458 Deferred income taxes and other long-term liabilities 398 1,042 ----------------- ------------------ Total adjustments (13,166) (6,357) ----------------- ------------------ Net cash used by operating activities (13,095) (94) ----------------- ------------------ CASH FLOWS FROM INVESTING ACTIVITIES: Capital expenditures - property, plant and equipment (185) (993) Capital expenditures - investment assets - (663) ----------------- ------------------ Net cash used by investing activities (185) (1,656) ----------------- ------------------ CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from debt financing 10,356 23,861 Principal debt payments (5,775) (25,872) ----------------- ------------------ Net cash provided (used) by financing activities 4,581 (2,011) ----------------- ------------------ DECREASE IN CASH AND CASH EQUIVALENTS (8,699) (3,761) CASH AND CASH EQUIVALENTS, beginning of period 32,608 42,102 ----------------- ------------------ CASH AND CASH EQUIVALENTS, end of period $ 23,909 $ 38,341 ================= ================== SUPPLEMENTAL CASH FLOW INFORMATION: Interest paid - net of amounts capitalized $ 93 $ 509 ================= ================== Income taxes paid - net of refunds $ 1,167 $ 1,177 ================= ================== Non-cash transaction - Dividend payable $ - $ 6,630 ================= ==================
See notes to consolidated financial statements. 3 AMREP CORPORATION AND SUBSIDIARIES Notes to Consolidated Financial Statements (Unaudited) Three Months Ended July 31, 2008 and 2007 (1) Basis of Presentation --------------------- The accompanying unaudited consolidated financial statements have been prepared by AMREP Corporation (the "Registrant" or the "Company") pursuant to the rules and regulations of the Securities and Exchange Commission for interim financial information, and do not include all the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. In the opinion of management, these unaudited consolidated financial statements include all adjustments, which are of a normal recurring nature, necessary to reflect a fair presentation of the results for the interim periods presented. The results of operations for such interim periods are not necessarily indicative of what may occur in future periods. The unaudited consolidated financial statements herein should be read in conjunction with the Company's annual report on Form 10-K for the year ended April 30, 2008, which was previously filed with the Securities and Exchange Commission. All references to the first quarter or first three months of 2009 and 2008 mean the fiscal three-month periods ended July 31, 2008 and 2007. Certain 2008 financial statement amounts have been reclassified to conform to the current year presentation. (2) Receivables, Net ---------------- Media services operations accounts receivable, net consist of the following (in thousands): July 31, April 30, 2008 2008 ----------------- ---------------- Fulfillment Services $ 29,227 $ 28,348 Newsstand Distribution Services, net of estimated returns 21,035 18,008 ----------------- ---------------- 50,262 46,356 Less allowance for doubtful accounts (729) (655) ----------------- ---------------- $ 49,533 $ 45,701 ================= ================ Newsstand Distribution Services accounts receivable are net of estimated magazine returns of $53,013,000 at July 31, 2008 and $55,930,000 at April 30, 2008. In addition, pursuant to an arrangement with one publisher customer of the Newsstand Distribution Services business, the publisher bears the ultimate credit risk of non-collection of amounts due from the customers to which the Company distributed the publisher's magazines under this arrangement. Accounts receivable subject to this arrangement were netted ($25,188,000 was netted at July 31, 2008 and $22,703,000 at April 30, 2008) against the related accounts payable due the publisher on the accompanying consolidated balance sheets. 4 (3) Investment Assets, Net ---------------------- Investment assets, net consist of the following (in thousands): July 31, April 30, 2008 2008 --------------- ----------------- Land held for long-term investment $ 9,771 $ 9,771 --------------- ----------------- Commercial rental properties: Land, buildings and improvements 754 754 Furniture and fixtures 40 40 --------------- ----------------- 794 794 Less accumulated depreciation (270) (265) --------------- ----------------- 524 529 --------------- ----------------- $ 10,295 $ 10,300 =============== ================= (4) Property, Plant and Equipment, Net ---------------------------------- Property, plant and equipment, net consist of the following (in thousands): July 31, April 30, 2008 2008 --------------- ----------------- Land, buildings and improvements $ 17,875 $ 17,875 Furniture and equipment and other 45,453 45,300 --------------- ----------------- 63,328 63,175 Less accumulated depreciation (35,712) (34,261) --------------- ----------------- $ 27,616 $ 28,914 =============== ================= (5) Intangible and Other Assets, Net -------------------------------- Intangible and other assets, net consist of the following (in thousands): July 31, 2008 April 30, 2008 ------------------------------------ ----------------------------------- (Thousands) Accumulated Accumulated Cost Amortization Cost Amortization -------------- ---------------- ------------- ---------------- Software development costs $ 10,090 $ 4,318 $ 10,017 $ 3,780 Deferred order entry costs 5,243 - 5,681 - Prepaid expenses 3,694 - 3,047 - Customer contracts and relationships 15,000 1,925 15,000 1,613 Other 2,777 967 2,430 869 -------------- ---------------- ------------- ---------------- $ 36,804 $ 7,210 $ 36,175 $ 6,262 ============== ================ ============= ================
Software development costs include internal and external costs of the development of new or enhanced software programs and are generally amortized over five years. Deferred order entry costs represent costs incurred in connection with the data entry of customer subscription information to database files and are charged directly to operations over a 12-month period. Customer contracts and relationships are amortized over 12 years. 5 (6) Accounts Payable, Net and Accrued Expenses ------------------------------------------ Accounts payable, net and accrued expenses consist of the following (in thousands): July 31, April 30, 2008 2008 ----------------- ---------------- Publisher payables, net $ 69,577 $ 77,003 Accrued expenses 4,564 5,000 Trade payables 5,708 5,753 Other 10,140 10,776 ----------------- ---------------- $ 89,989 $ 98,532 ================= ================ Pursuant to an arrangement with a publisher customer of the Newsstand Distribution Services business, the Company has netted $25,188,000 and $22,703,000 of accounts receivable against the related accounts payable at July 31, 2008 and April 30, 2008 (see Note 2). (7) Notes Payable ------------- Notes payable consist of the following (in thousands): July 31, April 30, 2008 2008 ----------------- ---------------- Notes payable: Line-of-credit borrowings: Real estate operations and other $ 20,600 $ 18,000 Media services operations 8,561 4,582 Real estate operations term loan 855 2,774 Other notes payable 545 624 ----------------- ---------------- $ 30,561 $ 25,980 ================= ================ (8) Taxes ----- The unrecognized tax benefits pursuant to the Financial Accounting Standards Board ("FASB") Interpretation No. 48 ("FIN 48"), "Accounting for Uncertainty in Income Taxes", were $2,076,000 at July 31, 2008 and April 30, 2008. As a result of either the expiration of statutes of limitations or the recognition and measurement considerations under FIN 48, the Company believes that it is reasonably possible that the amount of unrecognized tax benefits will decrease within the next twelve months. (9) Fair Value Measurements ----------------------- In September 2006, the FASB issued SFAS No. 157, "Fair Value Measurements" ("SFAS No. 157"). SFAS No. 157 establishes a common definition for fair value to be applied to U.S. GAAP requiring use of fair value, establishes a framework for measuring fair value, and expands disclosure about such fair value measurements. SFAS No. 157 is effective for financial assets and financial liabilities for fiscal years beginning after November 15, 2007. The adoption of SFAS No. 157 for financial assets and financial liabilities, effective May 1, 2008, did not have an impact on the Company's consolidated financial position or results of operations. In February 2007, the FASB issued SFAS No. 159, "The Fair Value Option for Financial Assets and Financial Liabilities - Including an Amendment of FASB Statement No. 115, Accounting for Certain Investments in Debt and Equity Securities, ("SFAS No. 159"). The Statement permits entities to choose, at specified election dates, to measure many financial instruments and certain 6 other items at fair value that are not currently measured at fair value. Unrealized gains and losses on items for which the fair value option has been elected would be reported in earnings at each subsequent reporting date. SFAS No. 159 also establishes presentation and disclosure requirements in order to facilitate comparisons between entities choosing different measurement attributes for similar types of assets and liabilities. SFAS No. 159 does not affect existing accounting requirements for certain assets and liabilities to be carried at fair value. This statement became effective for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years. The Company adopted SFAS No. 159 effective May 1, 2008, but it has elected not to designate any financial instruments to be subject to the fair value option. (10) Discontinued Operations ----------------------- Loss from operations of discontinued business (net of income taxes) in the three-month period ended July 31, 2007 reflected costs associated 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 prior years. (11) Restructuring and Fire Recovery Costs ------------------------------------- During fiscal 2008, the Company announced a project to integrate certain aspects of the Kable's Fulfillment Services operations in order to improve operating efficiencies and customer service and also to reduce costs. To date, this project has resulted in (i) one significant workforce reduction that occurred in the first quarter of 2008, (ii) the substantial completion of a plan announced in the second quarter of 2008 to redistribute the work performed at the Marion, Ohio facility of its Fulfillment Services business and the scheduled closing of that facility, and (iii) the consolidation of a fulfillment operations customer call center. The Company incurred costs directly related to the integration project of $498,000 and $303,000 for the quarters ending July 31, 2008 and 2007, principally for severance and other consulting costs related to the integration, and these costs are included in the Restructuring and fire recovery costs in the Company's consolidated statements of income. On December 5, 2007 a warehouse of approximately 38,000 square feet leased by the Company in Oregon, Illinois was totally destroyed by fire. The warehouse was used principally to store back issues of magazines published by certain customers for whom the Company fills back-issue orders as part of its services. The Company has filed a preliminary claim with its insurance provider for its property loss and has been advanced $500,000 for replacement of such property. In addition, the Company was required to provide insurance for certain of those customers whose property was destroyed in the warehouse fire. Through August 31, 2008, the Company's insurance provider had paid approximately $65,000 to customers for lost materials. The Company believes that the net effect of the outcome of other claims pending or unasserted related to materials of certain publishers for whom it was required to provide insurance, together with proceeds from its property claims, will not have a material effect on its financial position, results of operations or cash flows. During the quarter ended July 31, 2008, the Company recorded other income of $173,000 for a business interruption claim resulting from the fire that was approved by its insurer. The Company also recorded charges to operations of $89,000 related to fire recovery costs, principally for legal and other advisory costs that were not covered by insurance. These costs are included in the Restructuring and fire recovery costs in the Company's consolidated statements of income. 7 (12) Information About the Company's Operations in Different Industry Segments ------------------------------------------------------------------------- The following tables set forth summarized data relative to the industry segments for continuing operations in which the Company operated for the three month periods ended July 31, 2008 and 2007 (in thousands): Newsstand Real Estate Fulfillment Distribution Operations Services Services Corporate Consolidated - ------------------------------------------------------------------------------------------------------------------------------- Three months ended July 31, 2008: Revenues $ 1,529 $ 30,667 $ 3,355 $ 19 $ 35,570 Income (loss) from continuing operations 99 (700) 370 302 71 Provision (benefit) for income taxes from continuing operations 58 (412) 218 177 41 ----------------------------------------------------------------------------------- Income (loss) from continuing operations before income taxes 157 (1,112) 588 479 112 Interest expense (income), net (b) - 832 (305) (415) 112 Depreciation and amortization 8 2,254 140 1 2,403 ----------------------------------------------------------------------------------- EBITDA (c) $ 165 $ 1,974 $ 423 $ 65 $ 2,627 ----------------------------------------------------------------------------------- Capital expenditures $ 1 $ 178 $ 5 $ 1 $ 185 - -------------------------------------------------------------------------------------------------------------------------------- Three months ended July 31, 2007 (a): Revenues $ 18,863 $ 28,988 $ 3,311 $ 197 $ 51,359 Income (loss) from continuing operations 7,380 (1,859) 248 551 6,320 Provision (benefit) for income taxes from continuing operations 4,334 (1,090) 143 324 3,711 ----------------------------------------------------------------------------------- Income (loss) from continuing operations before income taxes 11,714 (2,949) 391 875 10,031 Interest expense (income), net (b) - 1,467 (486) (693) 288 Depreciation and amortization 55 2,331 244 2 2,632 ----------------------------------------------------------------------------------- EBITDA (c) $ 11,769 $ 849 $ 149 $ 184 $ 12,951 ----------------------------------------------------------------------------------- Capital expenditures $ 691 $ 949 $ 16 $ - $ 1,656 - --------------------------------------------------------------------------------------------------------------------------------
(a) Segment information does not include net loss from discontinued operations of $57,000 in the three months ended July 31, 2007. (b) Interest expense, net includes inter-segment interest income and expense that is eliminated in consolidation. (c) The Company uses EBITDA (which the Company defines as income from continuing operations before interest expense, net, income taxes and depreciation and amortization) in addition to income from continuing operations as a key measure of profit or loss for segment performance and evaluation purposes. 8 Item 2. Management's Discussion and Analysis of Financial Condition ----------------------------------------------------------- and Results of Operations ------------------------- INTRODUCTION - ------------ The Company, through its subsidiaries, is primarily engaged in three business segments: the Real Estate business operated by AMREP Southwest Inc. and its subsidiaries (collectively, "AMREP Southwest") and the Fulfillment Services and Newsstand Distribution Services businesses operated by Kable Media Services, Inc. and its subsidiaries (collectively, "Kable" or "Media Services"). The Company's foreign sales and activities are not significant. The following provides information that management believes is relevant to an assessment and understanding of the Company's consolidated results of operations and financial condition. The discussion should be read in conjunction with the April 30, 2008 consolidated financial statements and accompanying notes. All references in this Item 2 to the first quarter or first three months of 2009 and 2008 mean the fiscal three-month periods ended July 31, 2008 and 2007. CRITICAL ACCOUNTING POLICIES AND ESTIMATES - ------------------------------------------ Management's discussion and analysis of financial condition and results of operations is based on the accounting policies used and disclosed in the 2008 consolidated financial statements and accompanying notes that were prepared in accordance with accounting principles generally accepted in the United States of America and included as part of the Company's annual report on Form 10-K for the year ended April 30, 2008 (the "2008 Form 10-K"). The preparation of those consolidated financial statements required management to make estimates and assumptions that affected the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual amounts or results could differ from those estimates. The significant accounting policies of the Company are described in Note 1 to the 2008 consolidated financial statements, and the critical accounting policies and estimates are described in Management's Discussion and Analysis included in Item 7 of the 2008 Form 10-K. There have been no changes in the critical accounting policies. Information concerning the implementation and the impact of new accounting standards issued by the Financial Accounting Standards Board ("FASB") is included in the notes to the April 30, 2008 consolidated financial statements. The Company adopted SFAS No. 157, "Fair Value Measurements" ("SFAS No. 157") effective May 1, 2008. The adoption of SFAS No. 157 did not have an impact on the Company's consolidated financial position or results of operations. The Company also adopted SFAS No. 159, "The Fair Value Option for Financial Assets and Financial Liabilities - Including an Amendment of FASB Statement No. 115" ("SFAS No. 159") effective May 1, 2008. The adoption of SFAS No. 159 did not have an impact on the Company's consolidated financial position or results of operations. The Company did not adopt any other new accounting policies during the quarter ended July 31, 2008. 9 RESULTS OF OPERATIONS - --------------------- For the first quarter of 2009, net income was $71,000, or $0.01 per share, compared to net income of $6,263,000, or $0.94 per share, in the first quarter of 2008. Results for the first quarter of 2009 were entirely from continuing operations. Results for the first quarter of 2008 included net income from continuing operations of $6,320,000, or $0.95 per share, and a loss on discontinued operations, net of tax, 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 estimated and accrued for this matter in the fourth quarter of 2007. Revenues were $35,570,000 in the first quarter of fiscal 2009 compared to $51,359,000 for the same period last year. First quarter 2009 revenues from land sales at AMREP Southwest were $1,263,000 compared to $18,150,000 for the same period of fiscal 2008. This significant year-over-year revenue decrease reflected substantially lower land sales in the Company's principal market of Rio Rancho, New Mexico due to the severe decline in the real estate market in the greater Albuquerque-metro and Rio Rancho areas that began in earlier periods. First quarter land sales revenues and gross profits in fiscal 2009 were primarily from the sale of scattered residential lots, while in the same period of fiscal 2008 they were from sales of developed lots to homebuilders and commercial developers as well as from sales of undeveloped land. The trend of the declining number of permits for new home construction, as previously reported, continues with 20% fewer building permits issued during the first six calendar months of 2008 compared to the same period in 2007. The Company believes that this decline has been generally consistent with the well-publicized problems of the national home building industry, 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 continued to slow the pace of building on developed lots previously purchased from the Company in Rio Rancho and, in some cases, 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. For the first quarter of 2009 and 2008, the Company's land sales in Rio Rancho have been as follows: 2009 2008 --------------------------------------- ----------------------------------------- Revenues Revenues Acres Revenues Per Acre Acres Revenues Per Acre Sold (in 000s) (in 000s) Sold (in 000s) (in 000s) --------- ----------- ----------- -------- ------------ ----------- Developed Residential 1.4 $ 342 $ 244 19.5 $ 6,729 $ 345 Commercial 1.0 126 126 13.7 2,920 213 --------- ----------- ----------- -------- ------------ ----------- Total Developed 2.4 468 195 33.2 9,649 291 Undeveloped 44.8 795 18 290.8 8,501 29 --------- ----------- ----------- -------- ------------ ----------- Total 47.2 $ 1,263 $ 27 324.0 $ 18,150 $ 56 --------- ----------- ----------- -------- ------------ -----------
The average selling price of land sold by the Company in Rio Rancho in recent years has fluctuated, as 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. The price per acre of developed land in the first quarter of 2009 was lower compared to the same period in the prior year due to a change in the mix and the stage of development of specific projects from which the land was sold. The decrease in the average selling price of undeveloped land in the first quarter of 2009 was primarily attributable to a higher proportion of undeveloped land sold in the current year from locations in 10 Rio Rancho that are further removed from developed areas and thus generally have lower average selling prices. The average gross profit percentage on land sales increased from 68% for the first quarter of 2008 to 71% for the first quarter of 2009. This increase was attributable to the mix of lots sold, with 2009 sales including a higher percentage of revenues from sales of commercial and undeveloped lots, which generally have higher gross profit percentages than sales of developed residential lots. Revenues and gross profits, average sales prices of land 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 Media Services, including both Fulfillment Services and Newsstand Distribution Services, increased from $32,299,000 for the first quarter of 2008 to $34,023,000 for the same period in 2009. This increase was primarily attributable to the Company's Fulfillment Services operations, where revenues increased from $28,988,000 for the first quarter of 2008 to $30,667,000 for the same period of 2009. Revenues from Kable's Newsstand Distribution Services operations were generally unchanged, $3,311,000 for the first quarter 2008 compared to $3,355,000 for the same period of 2009. Kable's operating expenses increased by $381,000 for the first quarter of 2009 compared to the same period in 2008, primarily attributable to computer systems integration costs and consulting costs. During fiscal 2008, the Company announced a project to integrate certain aspects of the Kable's Fulfillment Services operations in order to improve operating efficiencies and customer service and also to reduce costs. To date, this project has resulted in (i) one significant workforce reduction that occurred in the first quarter of 2008, (ii) the substantial completion of a plan announced in the second quarter of 2008 to redistribute the work performed at the Marion, Ohio facility of its Fulfillment Services business and the scheduled closing of that facility, and (iii) the consolidation of a fulfillment operations customer call center. The Company incurred costs directly related to the integration project of $498,000 and $303,000 for the quarters ending July 31, 2008 and 2007, principally for severance and other consulting costs related to the integration, and these costs are included in the Restructuring and fire recovery costs in the Company's consolidated statements of income. On December 5, 2007 a warehouse of approximately 38,000 square feet leased by the Company in Oregon, Illinois was totally destroyed by fire. The warehouse was used principally to store back issues of magazines published by certain customers for whom the Company fills back-issue orders as part of its services. The Company has filed a preliminary claim with its insurance provider for its property loss and has been advanced $500,000 for replacement of such property. In addition, the Company was required to provide insurance for certain of those customers whose property was destroyed in the warehouse fire. Through August 31, 2008, the Company's insurance provider had paid approximately $65,000 to customers for lost materials. The Company believes that the net effect of the outcome of other claims pending or unasserted related to materials of certain publishers for whom it was required to provide insurance, together with proceeds from its property claims, will not have a material effect on its financial position, results of operations or cash flows. During the quarter ended July 31, 2008, the Company recorded other income of $173,000 for a business interruption claim resulting from the fire that was approved by its insurer. The Company also recorded charges to operations of $89,000 related to fire recovery costs, principally for legal and other advisory costs that were not covered by insurance. These costs are included in the Restructuring and fire recovery costs in the Company's consolidated statements of income. 11 Interest and other revenues were $284,000 for the three-month period ended July 31, 2008 compared to $910,000 for the same period in the prior year. The decrease in the 2009 first quarter was the result of reduced interest income due to lower cash balances to invest. Real estate commissions and selling expenses decreased $175,000 in the first quarter of 2009 compared to the same period in 2008, principally due to the reduced volume of land sales. Other operating expenses decreased $212,000 for the three-month period ended July 31, 2008 compared to the same period in 2007 primarily due to the sale of certain AMREP Southwest non-inventory real estate assets in the second quarter of 2008, which eliminated related operating expenses. General and administrative costs of Media Services operations decreased $559,000 in the first quarter of 2009 compared to the same period in 2008 primarily due to realized savings from the Fulfillment Services operations integration project. Real estate and corporate general and administrative expense was comparable on a year-to-year basis. LIQUIDITY AND CAPITAL RESOURCES - ------------------------------- During the past several years, the Company has financed its operations from internally generated funds from real estate sales and Media Services operations, and from borrowings under its various lines-of-credit and development loan agreements. Cash Flows From Operating Activities - ------------------------------------ Real Estate receivables decreased from $13,124,000 at April 30, 2008 to $12,084,000 at July 31, 2008 reflecting the net effect of payments received on mortgage notes held by AMREP Southwest offset in part by mortgages notes received by AMREP Southwest in connection with real estate sales that closed during the first three months of 2009. Receivables from Media Services operations increased from $45,701,000 at April 30, 2008 to $49,533,000 at July 31, 2008, primarily due to the effect of higher quarter-end billings at July 31, 2008 compared to April 30, 2008. Real Estate inventory was $72,832,000 at July 31, 2008 compared to $70,252,000 at April 30, 2008. Inventory in the Company's core real estate market of Rio Rancho increased from $63,215,000 at April 30, 2008 to $65,689,000 at July 31, 2008, primarily reflecting the net effect of development spending and land sales. The balance of real estate inventory consisted of properties in Colorado. Accounts payable and accrued expenses decreased from $98,532,000 at April 30, 2008 to $89,989,000 at July 31, 2008, primarily as a result of the timing of payments due to publishers and vendors. In addition, under a distribution arrangement with one publisher customer of the Newsstand Distribution Services business, that publisher bears the ultimate credit risk of non-collection of related amounts due from the customers to which the Company distributes the publisher's magazines. Accounts receivable subject to this arrangement were netted ($25,188,000 was netted at July 31, 2008 and $22,703,000 was netted at April 30, 2008) against the related accounts payable due the publisher on the accompanying consolidated balance sheets. Cash Flows From Investing Activities - ------------------------------------ Capital expenditures totaled $185,000 and $1,656,000 in the first three months of 2009 and 2008, primarily for computer hardware and software development expenditures related to the Fulfillment Services business and, in 2008, $663,000 for certain real estate investments assets. The Company believes that it has adequate cash and financing capability to provide for its anticipated future capital expenditures. 12 Cash Flows From Financing Activities - ------------------------------------ AMREP Southwest has a revolving credit facility with a bank that matures in September 2009. Media Services has bank financing facilities that mature at various dates through May 2010. Each of the facilities requires the borrowers to meet certain covenants. The borrowers were in compliance with these covenants at July 31, 2008. Future Payments Under Contractual Obligations - --------------------------------------------- The Company is obligated to make future payments under various contracts, including its debt agreements and lease agreements, and is subject to certain other commitments and contingencies. The table below summarizes significant contractual obligations as of July 31, 2008 for the items indicated (in thousands): Less than 1 - 3 3 - 5 More than Contractual Obligations Total 1 year years years 5 years - ----------------------- ----- --------- ----- ----- --------- Notes payable $30,561 $ 2,879 $27,267 $ 415 $ - Operating leases and other 27,376 5,567 10,517 7,220 4,072 ----------- -------------- ------------- ------------- -------------- Total $57,937 $ 8,446 $37,784 $ 7,635 $ 4,072 =========== ============== ============= ============= ==============
The increase in notes payable from April 30, 2008 was due to increased borrowings by AMREP Southwest and Kable. Operating leases and other includes liabilities of $2,793,000 related to unrecognized tax benefits and related interest accrued in accordance with FIN 48. Refer to Notes 9, 14 and 16 to the consolidated financial statements included in the 2008 Form 10-K for additional information on long-term debt and commitments and contingencies. Risk Factors - ------------ In addition to the other information set forth in this report, the factors discussed in Part I, "Item 1A. Risk Factors" in the 2008 Form 10-K, which could materially affect the Company's business, financial condition or future results, should be carefully considered. The risks described in the 2008 Form 10-K are not the only risks facing the Company. Additional risks and uncertainties not currently known to the Company or that currently are deemed to be immaterial also may materially adversely affect the Company's business, financial condition or operating results. Statement of Forward-Looking Information - ---------------------------------------- The Private Securities Litigation Reform Act of 1995 (the "Act") provides a safe harbor for forward-looking statements made by or on behalf of the Company. The Company and its representatives may from time to time make written or oral statements that are "forward-looking", including statements contained in this report and other filings with the Securities and Exchange Commission, reports to the Company's shareholders and news releases. All statements that express expectations, estimates, forecasts or projections are forward-looking statements within the meaning of the Act. In addition, other written or oral statements, which constitute forward-looking statements, may be made by or on behalf of the Company. Words such as "expects", "anticipates", "intends", "plans", "believes", "seeks", "estimates", "projects", "forecasts", "may", "should", variations of such words and similar expressions are intended to identify such forward-looking statements. These statements are not guarantees of future performance and involve certain risks, uncertainties and contingencies that are difficult to predict. These risks and uncertainties include, but are not limited to, the risks described above under the heading "Risk Factors". Many of the factors that will determine the Company's future results are beyond the ability of management 13 to control or predict. Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in or suggested by such forward-looking statements. The Company undertakes no obligation to revise or update any forward-looking statements, or to make any other forward-looking statements, whether as a result of new information, future events or otherwise. Item 3. Quantitative and Qualitative Disclosures About Market Risk - ------- ---------------------------------------------------------- The Company has several credit facilities that require the Company to pay interest at a rate that may change periodically. These variable rate obligations expose the Company to the risk of increased interest expense in the event of increases in short-term interest rates. At July 31, 2008, borrowings of $25,880,000 were subject to variable interest rates. Refer to Item 7(A) of the 2008 Form 10-K for additional information regarding quantitative and qualitative disclosures about market risk. Item 4. Controls and Procedures - ------- ----------------------- Evaluation of Disclosure Controls and Procedures The Company's management, with the participation of the Company's chief financial officer and the other executive officers whose certifications accompany this quarterly report, has evaluated the effectiveness of the Company's disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934) as of the end of the period covered by this report. As a result of such evaluation, the chief financial officer and such other executive officers have concluded that such disclosure controls and procedures are effective to provide reasonable assurance that the information required to be disclosed in the reports the Company files or submits under the Securities Exchange Act of 1934 is (i) recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms, and (ii) accumulated and communicated to the Company's management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate, to allow timely decisions regarding disclosure. The Company believes that a control system, no matter how well designed and operated, cannot provide absolute assurance that the objectives of the control system are met, and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company have been detected. Changes in Internal Control over Financial Reporting No change in the Company's system of internal control over financial reporting occurred during the most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, internal control over financial reporting. PART II. OTHER INFORMATION Item 6. Exhibits - ------- -------- Exhibit No. Description ----------- ----------- 31.1 Certification required by Rule 13a-14(a) under the Securities Exchange Act of 1934. 31.2 Certification required by Rule 13a-14(a) under the Securities Exchange Act of 1934. 31.3 Certification required by Rule 13a-14(a) under the Securities Exchange Act of 1934. 32 Certification required pursuant to 18 U.S.C. Section 1350. 14 SIGNATURE --------- 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. Date: September 8, 2008 AMREP CORPORATION (Registrant) By: /s/ Peter M. Pizza ------------------- Peter M. Pizza Vice President and Chief Financial Officer (Principal Financial and Accounting Officer) 15 EXHIBIT INDEX ------------- Exhibit No. Description - ----------- ----------- 31.1 Certification required by Rule 13a-14(a) under the Securities Exchange Act of 1934 - Filed herewith. 31.2 Certification required by Rule 13a-14(a) under the Securities Exchange Act of 1934 - Filed herewith. 31.3 Certification required by Rule 13a-14(a) under the Securities Exchange Act of 1934 - Filed herewith. 32 Certification required pursuant to 18 U.S.C. Section 1350 - Filed herewith. 16 EX-31 2 exh31_0109.txt Exhibit 31.1 ------------ CERTIFICATION* - -------------- I, Peter M. Pizza, certify that: 1. I have reviewed this Quarterly Report on Form 10-Q for the period ended July 31, 2008 of AMREP Corporation; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report; 4. The Registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have: a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; c) evaluated the effectiveness of the Registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and d) disclosed in this report any change in the Registrant's internal control over financial reporting that occurred during the Registrant's most recent fiscal quarter (the Registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant's internal control over financial reporting; and 5. The Registrant's other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant's auditors and the audit committee of the Registrant's board of directors (or persons performing the equivalent functions): a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant's ability to record, process, summarize and report financial information; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant's internal control over financial reporting. Dated: September 8, 2008 /s/ Peter M. Pizza - ------------------------------------------ Peter M. Pizza Vice President and Chief Financial Officer - ---------------------- *The Registrant is a holding company that does substantially all of its business through two indirect wholly-owned subsidiaries (and their subsidiaries). Those indirect wholly-owned subsidiaries are AMREP Southwest Inc. ("ASW") and Kable Media Services, Inc. ("Kable"). James Wall is the principal executive officer of ASW, and Michael P. Duloc is the principal executive officer of Kable. The Registrant has no chief executive officer. Its executive officers include James Wall, Senior Vice President and Peter M. Pizza, Vice President and Chief Financial Officer, and Michael P. Duloc, who may be deemed an executive officer by reason of his position with Kable. Exhibit 31.2 ------------ CERTIFICATION* - -------------- I, James Wall, certify that: 1. I have reviewed this Quarterly Report on Form 10-Q for the period ended July 31, 2008 of AMREP Corporation; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report; 4. The Registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have: a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; c) evaluated the effectiveness of the Registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and d) disclosed in this report any change in the Registrant's internal control over financial reporting that occurred during the Registrant's most recent fiscal quarter (the Registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant's internal control over financial reporting; and 5. The Registrant's other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant's auditors and the audit committee of the Registrant's board of directors (or persons performing the equivalent functions): a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant's ability to record, process, summarize and report financial information; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant's internal control over financial reporting. Dated: September 8, 2008 /s/ James Wall - -------------- James Wall - ---------------------- *The Registrant is a holding company that does substantially all of its business through two indirect wholly-owned subsidiaries (and their subsidiaries). Those indirect wholly-owned subsidiaries are AMREP Southwest Inc. ("ASW") and Kable Media Services, Inc. ("Kable"). James Wall is the principal executive officer of ASW, and Michael P. Duloc is the principal executive officer of Kable. The Registrant has no chief executive officer. Its executive officers include James Wall, Senior Vice President and Peter M. Pizza, Vice President and Chief Financial Officer, and Michael P. Duloc, who may be deemed an executive officer by reason of his position with Kable. Exhibit 31.3 ------------ CERTIFICATION* - -------------- I, Michael P. Duloc, certify that: 1. I have reviewed this Quarterly Report on Form 10-Q for the period ended July 31, 2008 of AMREP Corporation; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report; 4. The Registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have: a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; c) evaluated the effectiveness of the Registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and d) disclosed in this report any change in the Registrant's internal control over financial reporting that occurred during the Registrant's most recent fiscal quarter (the Registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant's internal control over financial reporting; and 5. The Registrant's other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant's auditors and the audit committee of the Registrant's board of directors (or persons performing the equivalent functions): a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant's ability to record, process, summarize and report financial information; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant's internal control over financial reporting. Dated: September 8, 2008 /s/ Michael P. Duloc - -------------------- Michael P. Duloc - ---------------------- *The Registrant is a holding company that does substantially all of its business through two indirect wholly-owned subsidiaries (and their subsidiaries). Those indirect wholly-owned subsidiaries are AMREP Southwest Inc. ("ASW") and Kable Media Services, Inc. ("Kable"). James Wall is the principal executive officer of ASW, and Michael P. Duloc is the principal executive officer of Kable. The Registrant has no chief executive officer. Its executive officers include James Wall, Senior Vice President and Peter M. Pizza, Vice President and Chief Financial Officer, and Michael P. Duloc, who may be deemed an executive officer by reason of his position with Kable. EX-32 3 exh32_0109.txt EXHIBIT 32 ---------- CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350 AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 In connection with the Quarterly Report of AMREP Corporation (the "Company") on Form 10-Q for the period ended July 31, 2008 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), each of the undersigned does hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to his knowledge: (1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and (2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. Dated: September 8, 2008 /s/ Peter M. Pizza - -------------------------- Peter M. Pizza* Vice President and Chief Financial Officer /s/ James Wall - -------------------------- James Wall* /s/ Michael P. Duloc - -------------------------- Michael P. Duloc* - -------------- *The Registrant is a holding company which does substantially all of its business through two indirect wholly-owned subsidiaries (and their subsidiaries). Those indirect wholly-owned subsidiaries are AMREP Southwest Inc. ("ASW") and Kable Media Services, Inc. ("Kable"). James Wall is the principal executive officer of ASW, and Michael P. Duloc is the principal executive officer of Kable. The Registrant has no chief executive officer. Its executive officers include James Wall, Senior Vice President and Peter M. Pizza, Vice President and Chief Financial Officer, and Michael P. Duloc, who may be deemed an executive officer by reason of his position with Kable. -----END PRIVACY-ENHANCED MESSAGE-----