PRINCETON, N.J., July 21, 2011 /PRNewswire/ -- AMREP Corporation
(NYSE: AXR) today reported a net loss of $7,561,000, or $1.26 per share, for its 2011 fiscal year ended
April 30, 2011 compared to a 2010 net
loss of $9,480,000, or $1.58 per share. The results for 2011 included
fourth quarter pre-tax, non-cash impairment charges of $10,720,000 ($8,194,000 after tax, or $1.37 per share), reflecting the write-down of
certain real estate assets ($6,827,000 before tax and $4,301,000, or $0.72 per share, after tax) and of all of the
goodwill of the Company's Newsstand Distribution Services business
($3,893,000 with no tax benefit, or
$0.65 per share). The results
for 2010 included a fourth quarter pre-tax, non-cash impairment
charge of $2,075,000 ($1,307,000 after tax, or $0.22 per share), reflecting the write-down of
certain real estate assets. Revenues for 2011 were
$96,837,000 compared to $120,498,000 in the prior year.
For the fourth quarter of 2011, the net loss after the
impairment charges was $9,075,000, or
$1.51 per share, compared to a net
loss after the impairment charge of $6,718,000, or $1.12 per share, in the same period of 2010.
Fourth quarter 2011 revenues were $22,088,000 versus fourth quarter 2010 revenues
of $26,792,000.
Excluding the impairment charges in both years, the net loss for
the fourth quarter of 2011 was $882,000, or $0.15
per share, and for the full year of 2011 the Company had net income
of $632,000, or $0.11 per share, compared to net losses of
$5,411,000, or $0.90 per share, in the fourth quarter of 2010,
and $8,173,000, or $1.36 per share, for the full year of 2010.
Revenues from land sales at the Company's AMREP Southwest
subsidiary decreased from $1,551,000
and $5,185,000 in the fourth quarter
and full year of 2010 to $210,000 and
$1,780,000 for the comparable periods
of 2011. Results for all periods were substantially lower
than the Company has historically experienced in its principal
market of Rio Rancho, New Mexico,
due to a severe decline in the real estate market in the greater
Albuquerque-metro and Rio Rancho areas that began late in fiscal
2008. The trend of declining permits for new home
construction in Rio Rancho also
continued, with 30% fewer single-family residential building
permits issued during fiscal 2011 than in fiscal 2010. Faced with
these adverse conditions, many builders have slowed the pace of
building on developed lots previously purchased from the Company in
Rio Rancho and delayed or
cancelled the purchase of additional developed lots. These
factors have also contributed to a steep decline in the Company's
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. The average selling price of
land sold by the Company in Rio
Rancho was $40,000 and
$81,000 per acre for the fourth
quarter and full year of 2011 compared to $83,000 and $92,000
per acre for the comparable periods of 2010. The average
gross profit percentage on land sales was approximately 64% and 37%
for the three and twelve month periods in 2011 compared to
approximately 40% for both the fourth quarter and full year of 2010
with all the above variances reflecting differences in the mix of
the types of properties sold relative to the total acreage in each
period. As a result of these and other factors, including the
nature and timing of specific transactions, revenues, average
selling prices and related gross profits from land sales can vary
significantly from period to period and prior results are not
necessarily a good indication of what may occur in future periods.
In addition, as noted above, AMREP Southwest recorded
impairment charges in 2011 and 2010 due to current appraisals of a
portion of its real estate that in each year showed a significant
deterioration in fair market value from the prior year.
Revenues from Media Services operations, which principally
include Subscription Fulfillment Services operations conducted by
the Company's Palm Coast Data subsidiary and Newsstand Distribution
and Product Services operations conducted by its Kable Media
Services subsidiary, decreased from $25,211,000 and $115,016,000 for the fourth quarter and full year
of 2010 to $21,864,000 and
$94,963,000 for the same periods in
2011. Magazine publishers are the principal customers of
these operations, and they have continued to be impacted by the
effects of the recent recession and also from increased competition
from new media sources. This has resulted in reduced subscription
and newsstand sales, which in turn has caused certain publishers to
close magazine titles or seek more favorable contract terms from
Palm Coast and Kable and their
competitors. As a consequence of these and other factors and
customer losses, revenues from Subscription Fulfillment Services
operations decreased from $19,551,000
and $92,022,000 for the fourth
quarter and full year of 2010 to $16,844,000 and $73,618,000 for the same periods of 2011, while
revenues from Newsstand Distribution Services operations decreased
from $3,006,000 and $12,947,000 for the fourth quarter and full year
of 2010 to $2,542,000 and
$11,030,000 for the same periods of
2011. Revenues from Kable's Product Services and Other businesses
segment were $2,654,000 and
$10,047,000 in the fourth quarter and
full year of 2010 versus $2,478,000
and $10,315,000 in the same periods
of 2011, with changes being primarily due to increases in temporary
staffing revenues offset by decreases in revenues from the
Company's specialty packaging business. The revenue decreases
in the Media Services operations were more than offset by decreases
in Media Services operating and general and administrative expenses
due to a combination of lower payroll and benefits and other
variable costs resulting from lower revenue volume as well as from
efficiencies achieved in the Company's consolidation of its
Subscription Fulfillment Services business from three locations in
Colorado, Florida and Illinois into one existing location at
Palm Coast, Florida, that was
completed during 2011. Operating expenses of Media Services
decreased from $25,624,000 (101.6% of
related revenues) and $104,662,000
(91.0% of related revenues) in the fourth quarter and full year of
2010 to $18,516,000 (84.7% of related
revenues) and $77,972,000 (82.1% of
related revenues) for the same periods of 2011. In addition, Media
Services general and administrative expenses decreased from
$2,883,000 (11.4% of related
revenues) and $11,613,000 (10.1% of
related revenues) in the fourth quarter and full year of 2010 to
$2,496,000 (11.4% of related
revenues) and $9,385,000 (9.9% of
related revenues) for the same periods of 2011.
Media Services results included restructuring charges
principally for severance costs incurred in connection with the
consolidation of its subscription fulfillment operations of
$177,000 and $484,000, net of certain governmental incentives,
for the fourth quarter and full year of 2011 compared to net
restructuring charges of $2,583,000
and $5,763,000 in the same periods of
2010. In addition, as noted above, the Company recognized a
non-cash and non-tax deductible impairment charge in the fourth
quarter of 2011 reflecting the write-off of all of the goodwill of
its Newsstand Distribution Services business segment. The goodwill
impairment charge will have no effect on the day-to-day operations
of the Newsstand Distribution Services business.
The effective rate of the Company's tax benefit was 24.0% and
29.8% for the fourth quarter and full year 2011 compared to 29.5%
and 38.3% for the same periods in 2010. The difference
between the statutory tax rate and the effective rate of the tax
benefit in the fourth quarter and full year periods was primarily
due to (i) permanent items, the most significant being the fourth
quarter 2011 impairment charge of $3,893,000 associated with non-tax deductible
goodwill, and (ii) a reduction of liabilities of $764,000 and $1,148,000 in the third quarters of 2011 and 2010
related to unrecognized tax benefits due to the expiration of the
statute of limitations on certain prior year tax benefits
For more detail regarding the impairment charges taken by the
Company in 2011 and 2010 and for additional information regarding
the Company's financial results, please refer to the Annual Report
on Form 10-K filed today with the Securities and Exchange
Commission.
AMREP Corporation's AMREP Southwest Inc. subsidiary is a major
landholder and leading developer of real estate in New Mexico, and its Media Services operations,
conducted by its Kable Media Services, Inc. and Palm Coast Data LLC
subsidiaries, distribute magazines to wholesalers and provide
subscription fulfillment and product fulfillment and related
services to publishers and others.
Any statements in this news release regarding trends or the
future operations of the Company are forward-looking statements
within the meaning of the federal securities laws. These
statements are subject to numerous risks and uncertainties, many of
which are beyond the control of AMREP Corporation and that could
cause actual results to differ materially from such statements.
Further information about these and other relevant risks and
uncertainties may be found in the Company's Form 10-K and its other
filings with the Securities and Exchange Commission, all of which
are available from the Commission as well as from other sources.
Recipients of this news release are cautioned to consider
these risks and uncertainties and to not place undue reliance on
the forward-looking statements contained therein. AMREP
Corporation disclaims any intention or obligation to update or
revise any forward-looking statements, whether as a result of new
information, future events or otherwise.
Schedule 1
AMREP
CORPORATION AND SUBSIDIARIES
FINANCIAL
HIGHLIGHTS
|
|
|
|
Three Months
Ended April 30,
|
|
|
|
2011
|
|
2010
|
|
Revenues
|
|
$ 22,088,000
|
|
$ 26,792,000
|
|
|
|
|
|
|
|
Net income (loss)
|
|
$ (9,075,000)
|
|
$ (6,718,000)
|
|
|
|
|
|
|
|
Earnings (loss) per share –
Basic and Diluted
|
|
$ (1.51)
|
|
$ (1.12)
|
|
|
|
|
|
|
|
Weighted average number of
common shares outstanding
|
|
5,996,000
|
|
5,996,000
|
|
|
|
|
|
|
|
|
|
Twelve
Months Ended April 30,
|
|
|
|
2011
|
|
2010
|
|
Revenues
|
|
$ 96,837,000
|
|
$ 120,498,000
|
|
|
|
|
|
|
|
Net income (loss)
|
|
$ (7,561,000)
|
|
$ (9,480,000)
|
|
|
|
|
|
|
|
Earnings (loss) per share –
Basic and Diluted
|
|
$ (1.26)
|
|
$ (1.58)
|
|
|
|
|
|
|
|
Weighted average number of
common shares outstanding
|
|
5,996,000
|
|
5,996,000
|
|
|
|
|
|
|
|
Results include fourth quarter
after tax, non-cash impairment charges of $8,194,000 (equivalent to
$1.37 per share) in 2011 and $1,307,000 (equivalent to $0.22 per
share) in 2010.
|
|
|
|
|
|
|
Schedule 2
The Company's land sales
in Rio Rancho, New Mexico were as follows (dollar amounts in
thousands):
|
|
|
2011
|
|
2010
|
|
|
Acres Sold
|
|
Revenues
|
|
Revenues per
Acre
|
|
Acres Sold
|
|
Revenues
|
|
Revenues per
Acre
|
|
Three months ended April
30:
|
|
|
|
|
|
|
|
|
|
|
|
|
Developed
|
|
|
|
|
|
|
|
|
|
|
|
|
Residential
|
-
|
|
$
-
|
|
$
-
|
|
0.9
|
|
$
346
|
|
$ 385
|
|
Commercial
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
Total
Developed
|
-
|
|
-
|
|
-
|
|
0.9
|
|
346
|
|
385
|
|
Undeveloped
|
5.3
|
|
210
|
|
40
|
|
17.8
|
|
1,205
|
|
68
|
|
Total
|
5.3
|
|
$
210
|
|
$
40
|
|
18.7
|
|
$ 1,551
|
|
$
83
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Twelve months ended April
30:
|
|
|
|
|
|
|
|
|
|
|
|
|
Developed
|
|
|
|
|
|
|
|
|
|
|
|
|
Residential
|
3.1
|
|
$ 1,031
|
|
$ 344
|
|
6.5
|
|
$ 1,891
|
|
$ 293
|
|
Commercial
|
-
|
|
35
|
|
-
|
|
1.7
|
|
894
|
|
523
|
|
Total
Developed
|
3.1
|
|
1,066
|
|
344
|
|
8.2
|
|
2,785
|
|
341
|
|
Undeveloped
|
18.5
|
|
714
|
|
38
|
|
48.2
|
|
2,400
|
|
50
|
|
Total
|
21.6
|
|
$ 1,780
|
|
$
81
|
|
56.4
|
|
$ 5,185
|
|
$
92
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SOURCE AMREP Corporation