-----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, RYRMeOrAl9OdqjKEkzO93aB1isPzjHfGWBw0h+Ax0S2ymBn8aLBAOFt0SuX1Z+xO QAAJcPiXN37X/ozfcTk/Pg== 0000006207-98-000007.txt : 19980915 0000006207-98-000007.hdr.sgml : 19980915 ACCESSION NUMBER: 0000006207-98-000007 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19980731 FILED AS OF DATE: 19980914 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: 98708979 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 1ST 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 July 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 September 11, 1998 - 7,368,650. FORM 10-Q AMREP CORPORATION AND SUBSIDIARIES INDEX ----- PART I PAGE NO. - ------ Consolidated Financial Statements: Balance Sheets July 31, 1998 (Unaudited) and April 30, 1998 (Audited) 1 Statements of Operations and Retained Earnings (Unaudited) Three Months Ended July 31, 1998 and 1997 2 Statements of Cash Flows (Unaudited) Three Months Ended July 31, 1998 and 1997 3 Notes to Consolidated Financial Statements 4 Management's Discussion and Analysis 5-6 PART II - ------- Other Information 7 Signatures 8 Exhibit Index 9 FORM 10-Q AMREP CORPORATION AND SUBSIDIARIES Consolidated Balance Sheets July 31, 1998 and April 30, 1998 (Thousands, except par value and number of shares) July 31, 1998 April 30, 1998 ---------------- ----------------- (Unaudited) (Audited) ASSETS - ------ Cash and cash equivalents $ 15,189 $ 20,517 Receivables, net: Real estate operations 12,620 11,107 Magazine circulation operations 61,290 57,408 Real estate inventory 106,380 99,904 Other real estate investments 766 1,497 Property, plant and equipment, at cost, net of accumulated depreciation and amortization of $13,708 at July 31, 1998 and $13,260 at April 30, 1998 17,658 17,658 Other assets 14,619 15,473 Excess of cost of subsidiary over net assets acquired net of accumulated amortization of $95 at July 31, 1998 and $68 at April 30, 1998. 6,177 6,204 ------------- ----------------- $ 234,699 $ 229,768 ============= ================= LIABILITIES AND SHAREHOLDERS' EQUITY - ------------------------------------ Accounts payable, deposits and accrued expenses $ 38,420 $ 40,352 Notes payable: Amounts due within one year 29,700 28,511 Amounts subsequently due 60,505 55,737 Taxes payable: Amounts due within one year 2,720 4,616 Amounts subsequently due 13,923 13,923 Deferred income taxes 2,509 2,589 ------------- ---------------- 147,777 145,728 ------------- ---------------- Shareholders' equity: Common stock, $.10 par value; shares authorized -- 20,000,000 shares issued and outstanding -- 7,398,677 at July 31, 1998 and April 30, 1998 740 740 Capital contributed in excess of par value 44,928 44,928 Retained earnings 41,434 38,552 Treasury stock, at cost; 30,027 shares (180) (180) ------------- ---------------- 86,922 84,040 ------------- ---------------- $ 234,699 $ 229,768 ============= ================ See notes to consolidated financial statements. 1 FORM 10-Q AMREP CORPORATION AND SUBSIDIARIES Consolidated Statements of Operations and Retained Earnings (Unaudited) Three Months Ended July 31, 1998 and 1997 (Thousands, except per share amounts) 1998 1997 ------------- ---------------- REVENUES - -------- Real estate operations: Home and condominium sales $ 20,848 $ 18,869 Land sales 9,673 4,306 ------------- ---------------- 30,521 23,175 Magazine circulation operations 14,250 13,006 Interest and other operations 1,452 1,614 ------------- ---------------- 46,223 37,795 ------------- ---------------- COST AND EXPENSES - ----------------- Real estate cost of sales: Home and condominium sales 18,147 16,221 Land sales 5,089 2,342 Operating expenses: Magazine circulation operations 10,903 10,587 Real estate commissions and selling 1,776 1,728 Other operations 710 1,559 General and administrative: Real estate operations and corporate 1,985 1,792 Magazine circulation operations 1,682 1,569 Interest, net 1,128 1,156 ------------- ---------------- 41,420 36,954 ------------- ---------------- Income before income taxes 4,803 841 PROVISION FOR INCOME TAXES 1,921 336 ------------- ---------------- NET INCOME 2,882 505 RETAINED EARNINGS, beginning of period 38,552 30,346 ------------- ---------------- RETAINED EARNINGS, end of period $ 41,434 $ 30,851 ============= ================ EARNINGS PER SHARE - BASIC AND DILUTED $ 0.39 $ 0.07 ============= ================ WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING 7,369 7,369 ============ =========== See notes to consolidated financial statements. 2 FORM 10-Q AMREP CORPORATION AND SUBSIDIARIES Consolidated Statements of Cash Flows (Unaudited) Three Months Ended July 31, 1998 and 1997 (Thousands) 1998 1997 ------------- ---------------- CASH FLOWS FROM OPERATING ACTIVITIES: Net Income $ 2,882 $ 505 ------------- ---------------- Adjustments to reconcile net income to net cash provided by operating activities - Depreciation and amortization 775 825 Changes in assets and liabilities - Receivables (5,395) (10,799) Real estate inventory (6,476) 935 Other real estate projects 731 874 Other assets 570 (738) Accounts payable, deposits and accrued expenses (1,932) 4,208 Taxes payable (1,896) (326) Deferred income tax (80) - ------------- ---------------- Total adjustments (13,703) (5,021) ------------- ---------------- Net cash used by operating activities (10,821) (4,516) ------------- ---------------- CASH FLOWS FROM INVESTING ACTIVITIES: Capital expenditures (464) (575) ------------- ---------------- Net cash used by investing activities (464) (575) ------------- ---------------- CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from debt financing 21,930 13,390 Principal debt payments (15,973) (15,195) ------------- ---------------- Net cash (used) provided by financing activities 5,957 (1,805) ------------- ---------------- Increase (decrease) in cash and cash equivalents (5,328) (6,896) CASH AND CASH EQUIVALENTS, beginning of period 20,517 16,178 ------------- ---------------- CASH AND CASH EQUIVALENTS, end of period $ 15,189 $ 9,282 ============= ================ SUPPLEMENTAL CASH FLOW INFORMATION: Interest paid - net of amounts capitalized $ 1,096 $ 1,118 ============= ================ Income taxes paid $ 3,969 $ 654 ============= ================ See notes to consolidated financial statements. 3 FORM 10-Q AMREP CORPORATION AND SUBSIDIARIES Notes to Consolidated Financial Statements (Unaudited) Three Months Ended July 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 in the July 31, 1997 Statement of Cash Flows have been - ------- reclassified to conform to the presentation used at July 31, 1998. 4 FORM 10-Q AMREP CORPORATION AND SUBSIDIARIES Management's Discussion and Analysis of Financial Condition and Results of Operations (Page 1 of 2) July 31, 1998 RESULTS OF OPERATIONS - --------------------- Total revenues for the first quarter of fiscal 1999 increased 22% from the same period last year, reflecting higher revenues from both real estate operations and magazine circulation operations. Revenues from real estate operations increased 32% during the three months ended July 31, 1998 compared to the prior year, resulting from increases in both housing and land sales. Revenues from housing sales increased 10% principally due to revenues from deliveries contributed by the Company's northern California operations, which were acquired in September 1997. Total unit deliveries remained at 163 in both periods while the average selling price of homes closed increased 10% from $115,800 to $127,900, reflecting the additional deliveries from California, where average selling prices are higher than those in New Mexico and Colorado. In addition, the average gross profit percentage on housing sales declined slightly from 14% to 13% which was primarily the result of a lower gross profit percentage from the northern California operations than those from the New Mexico and Colorado operations. Revenues and related gross profit from land sales increased by approximately $5.4 million and $2.6 million, respectively, in the first quarter of fiscal 1999 as compared to the similar period last year, primarily due to an increase in the level of commercial and industrial lot sales in New Mexico as well as a large land sale at the Company's northern California operation. The gross profit percentage on land sales was 47% in fiscal year 1999 and 46% in fiscal year 1998. 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 are not an indication of amounts that may be expected to occur in future periods. As a result of these factors, gross profit from real estate operations increased by approximately $2.7 million in the first quarter of fiscal 1999 as compared to the similar period last year, predominately from the increased land sales. Revenues from magazine circulation operations increased by approximately 10% in the first quarter of fiscal 1999, principally due to increases in Newsstand Distribution Services. Revenues from Distribution Services increased approximately 29% due to an increase in the volume of magazine sales and new business. Revenues in Fulfillment Services remained comparable from year to year. 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 in the first quarter last year to approximately 77% of related revenues in the current year, reflecting the favorable impact of cost reduction and efficiency initiatives. As a result of these factors, operating income from magazine circulation operations increased by approximately $900,000 in the first quarter this year as compared to the similar period last year. 5 AMREP CORPORATION AND SUBSIDIARIES Management's Discussion and Analysis of Financial Condition and Results of Operations (Page 2 of 2) July 31, 1998 Interest and other operations revenue decreased by approximately $162,000 in the first quarter this year as compared to the similar period last year primarily due to the absence of revenues from the Rio Rancho Golf and Country Club which was sold during the third quarter of fiscal 1998, partially offset by management fees and equity income in partnerships from the northern California operations which were acquired in the second quarter of fiscal year 1998. The decrease in other operations expenses of $849,000 is primarily due to the sale discussed above. Real estate commissions and selling expenses remained approximately the same in the first quarter of fiscal 1999 as compared to the similar period last year. Selling cost related to housing sales increased in proportion to the increase in revenues, and was offset by reductions in fixed costs related to commercial and industrial land sales. Real estate and corporate general and administrative expenses increased 11%, principally as a result of the Company's expansion into northern California commencing in September 1997. General and administrative costs of the magazine circulation operations increased by approximately 7%, moderately lower than the revenue increase. Interest expense decreased by approximately 2% in the first quarter of fiscal 1999, primarily due to an increase in the amount of capitalized real estate interest related to the higher inventory levels in northern California and Colorado, partially offset by higher average borrowings related to increased levels of receivables and inventories. FINANCIAL CONDITION - ------------------- Receivables from magazine circulation operations increased from $57.4 million at April 30, 1998 to $61.3 million at July 31, 1998, resulting from the revenue increase in magazine circulation operations and 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 referenced to above. In addition, real estate inventory and notes payable increased by approximately $6.5 million and $6.0 million, respectively, at July 31, 1998, compared to April 30, 1998, primarily due to land acquisitions, increases in construction inventory and related financing at the northern California operations. Also, accounts payable, deposits and accrued expenses decreased by approximately $1.9 million at July 31, 1998, compared to April 30, 1998. As a result, cash decreased by $5.3 million. YEAR 2000 - --------- The Company utilizes a number of software systems in conjunction with its real estate and magazine circulation operations. The Company has and will continue to make certain investments in its software systems and applications to ensure the Company is Year 2000 compliant. The Company is also in the process of ascertaining the impact of Year 2000 compliance in its relationship with vendors and suppliers. The financial impact of becoming Year 2000 compliant has not been and is not expected to be material to the Company's financial position or results of operations in a given year. 6 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 the Registrant during the quarter ended July 31, 1998. 7 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: September 11, 1998 By: /s/ Mohan Vachani ----------------- Mohan Vachani Senior Vice President, Chief Financial Officer Dated: September 11, 1998 By: /s/ Peter M. Pizza ------------------ Peter M. Pizza Controller 8 FORM 10-Q AMREP CORPORATION AND SUBSIDIARIES EXHIBIT INDEX ------------- 27 Financial Data Schedule EX-27 2 FDS -- FOR THE FIRST QUARTER ENDED JULY 31, 1998
5 FDS - 1ST QUARTER 0000006207 AMREP CORPORATION 1,000 U.S. DOLLARS 3-MOS APR-30-1999 MAY-01-1998 JUL-31-1998 1 15,189 0 73,910 0 106,380 0 31,366 13,708 234,699 0 60,505 0 0 740 86,182 234,699 30,521 46,223 23,236 23,946 0 0 1,128 4,803 1,921 2,882 0 0 0 2,882 0.39 0.39
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