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                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                              --------------------

                                    FORM 10-K
                 ANNUAL REPORT PURSUANT TO SECTIONS 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

(Mark One)

[ x ] Annual  Report  pursuant  to  Section  13 or  15(d)  of the  Securities
      Exchange Act of 1934 For the fiscal year ended April 30, 2007
                                       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 Identification No.)
   incorporation or organization)

   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
                                                           --------------

           Securities registered pursuant to Section 12(b) of the Act:

     Title of Each Class               Name of Each Exchange on Which Registered
     -------------------               -----------------------------------------
  Common Stock $.10 par value                     New York Stock Exchange

        Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark whether the Registrant is a well-known  seasoned  issuer,
as defined in Rule 405 of the Securities Act.
                            Yes         No   X
                                -----      -----

Indicate  by  check  mark if the  Registrant  is not  required  to file  reports
pursuant  to Section  13 or 15(d) of the  Securities  Exchange  Act of 1934 (the
"Act").
                            Yes         No   X
                                -----      -----

Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the 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 if disclosure of delinquent  filers  pursuant to Item 405
of Regulation  S-K is not contained  herein,  and will not be contained,  to the
best  of  the  Registrant's   knowledge,  in  definitive  proxy  or  information
statements  incorporated  by  reference  in Part  III of this  Form  10-K or any
amendment to this Form 10-K. [ ]

Indicate by check mark whether the Registrant is a large  accelerated  filer, an
accelerated  filer or a  non-accelerated  filer.  See definition of "accelerated
filer and large accelerated filer" in Rule 12b-2 of the Act.
    Large accelerated filer     Accelerated filer  X   Non-accelerated filer
                            ---                   ---                        ---

Indicate by check mark whether the Registrant is a shell company (as defined in
Rule 12b-2 of the Act).
               Yes                           No   X
                    -----                       -----

As of October 31, 2006, which was the last business day of the Registrant's most
recently  completed  second fiscal  quarter,  the aggregate  market value of the
Common Stock held by  non-affiliates  of the Registrant was  $124,198,219.  Such
aggregate  market  value was  computed by reference to the closing sale price of
the  Registrant's  Common Stock as quoted on the New York Stock Exchange on such
date. For purposes of making this  calculation  only, the Registrant has defined
affiliates as including all directors and executive officers and certain persons
related to them.  In making such  calculation,  the  Registrant  is not making a
determination of the affiliate or non-affiliate  status of any holders of shares
of Common Stock.

As of July 13, 2007,  there were  6,653,612  shares of the  Registrant's  Common
Stock outstanding.

                       DOCUMENTS INCORPORATED BY REFERENCE

As  stated  in Part III of this  annual  report on Form  10-K,  portions  of the
Registrant's  definitive  proxy  statement to be filed within 120 days after the
end of the  fiscal  year  covered  by  this  annual  report  on  Form  10-K  are
incorporated herein by reference.

                                       2

                                     PART I
                                     ------

Item 1.          Business
-------          --------

                                     GENERAL

The Company* was organized in 1961 and, 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"). Data
concerning  industry  segments  is set  forth  in  Note 17 of the  notes  to the
consolidated  financial  statements.  The Company's foreign sales and activities
are not significant.

Recent Developments

On January 16, 2007, the Company,  through a newly created subsidiary  ("Newco")
of Kable Media Services,  Inc., completed the acquisition (the "Acquisition") of
100% of the stock of Palm Coast Data Holdco, Inc. ("Holdco"), which, through its
subsidiary,  Palm Coast Data LLC ("Palm Coast Data";  Holdco and Palm Coast Data
are  referred to herein  collectively  as "Palm  Coast") is a major  provider of
fulfillment  services for magazine  publishers and others.  The  Acquisition was
completed  pursuant to the terms of an Agreement  and Plan of Merger dated as of
November 7, 2006 that  provided  for the  Acquisition  to occur by the merger of
Newco with and into Holdco, with Holdco surviving the merger. As a result of the
merger,  Palm Coast Data is now an  indirect  wholly-owned  subsidiary  of Kable
Media Services,  Inc. The merger  consideration  was financed with existing cash
and  borrowings  and  totaled  approximately  $95,600,000.  As a result  of this
transaction,  the  Company has  solidified  its  position as the second  largest
provider of  subscription  fulfillment  services to magazine  publishers  in the
United States.

On April 3, 2007, the Company filed a Form S-3  Registration  Statement with the
Securities  and  Exchange  Commission  so that from time to time it may publicly
offer and sell,  together or separately,  (i) shares of common stock,  (ii) debt
securities,  (iii) warrants  to purchase  common  stock or debt  securities  and
(iv) units consisting of two or more classes of the securities  registered,  for
an aggregate public offering price not to exceed $150,000,000.  The Registration
Statement also registers the resale of 450,000 shares of common stock owned by a
shareholder. The Registration Statement became effective April 27, 2007.

                             REAL ESTATE OPERATIONS

The Company  conducts its Real Estate  business  through AMREP  Southwest,  with
these  activities  occurring  primarily  in the City of Rio Rancho  and  certain
adjoining areas of Sandoval County,  New Mexico.  References below to Rio Rancho
include the City and such adjoining  areas. As of July 1, 2007,  AMREP Southwest
employed 15 persons,  none of whom were represented by labor unions. The Company
considers its relations with these employees to be good.

Land Development Properties - Rio Rancho

Rio  Rancho  consists  of  91,049  contiguous  acres  in  Sandoval  County  near
Albuquerque,  of  which  approximately  73,725  acres  have  been  platted  into
approximately  114,500 home site and commercial lots, 16,450 acres are dedicated
to community facilities, roads and drainage and the remainder is unplatted land.
At April 30, 2007, approximately 90,200 of these residential and commercial lots
had been sold net of lot repurchases.  The Company currently owns  approximately
17,550 acres in Rio Rancho, of which approximately 4,600 acres are in contiguous
blocks  which  are  being  developed  or  are  suitable  for  development,   and
approximately  1,900 acres are in areas with a high  concentration of ownership,
where the  Company  owns more  than 50% of the lots in the  area,  suitable  for
special  assessment  districts  or city  redevelopment  areas that may allow for
future  development  under the auspices of local  government.  The balance is in
scattered  lots,  where the Company  owns less than 50% of the lots in the area,
that may require the purchase of a sufficient number of adjoining lots to create
tracts  suitable  for  development  or that  the  Company  may  attempt  to sell
individually or in small groups.

--------------------
*As used herein,  "Company" includes the Registrant and its subsidiaries  unless
the context requires or indicates otherwise.

                                       3

Development  activities  conducted  or  arranged  by  the  Company  include  the
obtaining of necessary governmental approvals ("entitlements"),  installation of
utilities and necessary storm drains, and building or improving of roads. At Rio
Rancho, the Company is developing both residential lots and sites for commercial
and industrial use as the demand warrants, and also is securing entitlements for
large development  tracts for sale to homebuilders.  The engineering work at Rio
Rancho is performed by both Company employees and outside firms, but development
work is performed by outside  contractors.  Company personnel market land at Rio
Rancho,  both  directly and through  brokers.  The Company  competes  with other
owners of land in the Albuquerque area who offer for sale developed  residential
lots and sites for commercial and industrial use.

The City of Rio Rancho is the third largest city in New Mexico with a population
of  approximately  76,000.  It was named as the 56th best place to live by Money
magazine in 2006 for those cities in the United  States with greater than 50,000
residents.  The  city's  population  growth  rate for the period  2000-2005  was
slightly  over  28%,  with  a  June  2007  unemployment  rate  of  3.5%.  It has
significant  construction  projects ongoing or announced,  including:  (i) a new
central  business  district with a 6,500 seat events center and a new city hall,
(ii) a planned second high school,  (iii) the planned  opening of the University
of New Mexico West Campus,  (iv) a 53 acre major motion picture studio and (v) a
new hospital. Major employers currently include Intel Corporation, US Cotton and
the customer care call centers of Bank of America, JC Penney,  Victoria's Secret
and Sprint PCS.

Since early 1977,  the Company has sold no individual  lots without homes at Rio
Rancho to consumers.  A substantial number of lots without homes were sold prior
to 1977,  and most of these  remain in areas where  utilities  have not yet been
installed.  However, under certain of the lot sale contracts,  if utilities have
not reached a lot when the  purchaser  is ready to build a home,  the Company is
obligated  to exchange a lot in an area then  serviced by water,  telephone  and
electric utilities for the lot of the purchaser,  without cost to the purchaser.
The Company has not incurred significant costs related to such exchanges.

In Rio  Rancho,  the  Company  sells  both  developed  and  undeveloped  lots to
national,  regional and local  homebuilders,  commercial and industrial property
developers and others.  In the last three fiscal years, land sales in Rio Rancho
have been as follows:

                      Acres                                     Revenues
                       Sold              Revenues               Per Acre
                   -------------     -----------------     ------------------
     2007:
      Developed         194            $  55,135,000           $   284,200
      Undeveloped       857               40,690,000                47,500
                   -------------     -----------------     ------------------
        Total         1,051            $  95,825,000           $    91,200
                   -------------     -----------------     ------------------

     2006:
      Developed         169            $  38,296,000           $   226,600
      Undeveloped       746               19,514,000                26,200
                   -------------     -----------------     ------------------
        Total           915            $  57,810,000           $    63,200
                   -------------     -----------------     ------------------

     2005:
      Developed         114            $  22,177,000           $   194,500
      Undeveloped       790               12,064,000                15,300
                    -------------     -----------------     ------------------
        Total           904            $  34,241,000           $    37,900
                   -------------     -----------------      ------------------

Other Real Estate Properties

The Company has various investment properties, principally consisting of vacant,
undeveloped  land in Rio Rancho not held for  development  or sale in the normal
course of business and a 29,000 square foot  commercial  rental property it owns
in Rio Rancho  that is  presently  leased.  The  Company  may acquire or develop
additional investment properties in the future.

The  Company  also  owns  two  tracts  of land in  Colorado,  consisting  of one
residential  property of approximately  160 acres planned for  approximately 350
homes  that is being  offered  for  sale  subject  to  obtaining  all  necessary
entitlements,  and one property of  approximately  10 acres zoned for commercial
use, which is also being offered for sale.

                                       4

       FULFILLMENT SERVICES AND MAGAZINE DISTRIBUTION SERVICES OPERATIONS

Through Kable,  the Company (i) performs  fulfillment  and related  services for
publishers and other customers and (ii) distributes  periodicals  nationally and
in Canada and, to a small  degree,  in other  foreign  countries.  As of July 1,
2007, Kable employed  approximately  2,100 persons,  of whom approximately 1,950
were involved in fulfillment activities and 150 in distribution activities.

Fulfillment Services

Kable's  Fulfillment  Services  business  performs a number of  fulfillment  and
fulfillment-related  activities,  principally magazine subscription  fulfillment
services,  list services and product fulfillment services,  and it accounted for
86% of Kable's total revenues in 2007.

In the magazine subscription fulfillment service operation,  Kable processes new
orders,  receives  and  accounts  for  payments,  prepares  and  sends  to  each
publisher's  printer  labels or tapes  containing  the names  and  addresses  of
subscribers for mailing each issue,  handles subscriber  telephone inquiries and
correspondence,  prepares  renewal  and  statement  notifications  for  mailing,
maintains  subscriber lists and databases,  generates  marketing and statistical
reports,  processes Internet orders and prints forms and promotional  materials.
Kable performs all of these services for many clients,  but some clients utilize
only certain of them.  Although by far the largest number of magazine titles for
which Kable performs fulfillment services are consumer publications,  Kable also
performs  services  for a number of trade  (business)  publications,  membership
organizations  and government  agencies that utilize the broad  capabilities  of
Kable's extensive database systems.

Kable's  lettershop  and graphics  departments  prepare and mail  statements and
renewal forms for its  publisher  clients to use in their  subscriber  mailings.
List services  clients are also primarily  publishers  for whom Kable  maintains
client  customer lists,  selects names for clients who rent their lists,  merges
rented  lists with a client's  lists to eliminate  duplication  for the client's
promotional mailings,  and sorts and sequences mailing labels to provide optimum
postal discounts.  Kable also provides membership services to both publisher and
non-publisher clients including donation processing and membership  fulfillment,
in addition to more standard magazine fulfillment services that are also used by
membership  clients.  Product  fulfillment  services  are  provided  for Kable's
publisher clients and other direct  marketers.  In this activity Kable receives,
warehouses, processes and ships merchandise.

Kable performs  fulfillment  services for approximately 1,050 different magazine
titles for approximately 300 clients and maintains  databases of over 72 million
active subscribers for its client publishers. In a typical month, Kable produces
approximately  87 million  mailing  labels for its  client  publishers  and also
processes over 27 million pieces of outgoing mail for these clients.

There are a number of companies that perform fulfillment services for publishers
and with which  Kable  competes,  including  one that is much larger than Kable.
Since  publishers  often  utilize  only  a  single  fulfillment  company  for  a
particular  publication,  there is  intense  competition  to obtain  fulfillment
contracts  with  publishers.  Competition  for  non-publisher  clients  is  also
intense.  Kable has a sales staff whose  primary task is to solicit  fulfillment
business.

Newsstand Distribution Services

In its Newsstand  Distribution  Services operation,  Kable distributes magazines
for  approximately  250 publishers.  Among the titles are many special  interest
magazines,  including various puzzle, automotive,  men's sophisticates,  comics,
romance and sports. In a typical month,  Kable distributes to wholesalers almost
59 million  copies of various  titles.  Kable  coordinates  the  movement of the
publications  from  its  publisher  clients  to  approximately  100  independent
wholesalers.  The  wholesalers  in turn sell the  publications  to major  retail
chains and independent  retail outlets.  All parties  generally have full return
rights for unsold copies. The newsstand  distribution business accounted for 14%
of Kable's revenues in 2007.

While Kable may not handle all publications of an individual  publisher  client,
it usually is the exclusive  distributor  into the consumer  marketplace for the
publications it distributes.  Kable has a distribution sales and marketing force
that works with  wholesalers and retailers to promote  magazine sales and assist
in determining the appropriate number of copies of an individual  magazine to be
delivered to each  wholesaler  and  ultimately  each  retailer  serviced by that
wholesaler.  Kable  generally  does not  physically  handle any  product.  Kable

                                       5

generates and delivers to each publisher's  printer shipping  instructions  with
the  addresses  of the  wholesalers  and the  number of copies of  product to be
shipped to each. All magazines  have a defined "off sale" date  following  which
the retailers  return unsold copies to the  wholesalers,  who destroy them after
accounting for returned merchandise in a manner satisfactory to and auditable by
Kable.

Kable generally  makes  substantial  cash advances to publishers  against future
sales that  publishers  may use to help pay for printing,  paper and  production
costs  prior  to the  product  going  on  sale.  Kable  is  usually  not paid by
wholesalers  for product until some time after the product has gone on sale, and
is  therefore  exposed  to  potential  credit  risks  with both  publishers  and
wholesalers.  Kable's  ability to limit its credit risk is  dependent in part on
its  skill in  estimating  the  number  of  copies  of an issue  that  should be
distributed  and  which  will be  sold,  and on  limiting  its  advances  to the
publisher accordingly.

Kable competes primarily with three other national  distributors.  Each of these
competitors is owned by or affiliated with a magazine publishing  company.  Such
companies publish a substantial portion of all magazines published in the United
States,  and  the  competition  for the  distribution  rights  to the  remaining
publications is intense.  In addition,  there has been a major consolidation and
reduction  in the  number of  wholesalers  to whom Kable  distributes  magazines
arising from changes within the magazine  distribution industry in recent years.
As a result,  three of these wholesalers  accounted for approximately 66% of the
fiscal 2007 gross billings of the Newsstand  Distribution  Services  operations,
which is common for the industry,  and approximately 43% of Kable's consolidated
accounts receivable were due from these wholesalers at April 30, 2007.

Item 1A.          Risk Factors
-------           ------------

The risks  described  below are among those that could  materially and adversely
affect the Company's  business,  financial  condition or results of  operations.
These risks could cause  actual  results to differ  materially  from  historical
experience and from results predicted by any forward-looking  statements related
to  conditions  or events that may occur in the future.  These risks are not the
only risks the Company  faces,  and other risks  include  factors not  presently
known as well as those that are currently considered to be less significant.

Real Estate Operations
----------------------

The Company's real estate assets are concentrated in one market, Rio Rancho, New
Mexico,  meaning the Company's  results of  operations  and future growth may be
limited or affected by economic changes in that market.

Substantially all of the Company's real estate assets are located in Rio Rancho,
which is adjacent to  Albuquerque,  New Mexico.  As a result of this  geographic
concentration,  the Company could be affected by changes in economic  conditions
in this region from time to time,  including economic  contraction due to, among
other  things,  the failure or downturn of key  industries  and  employers.  The
Company's results of operations, future growth or both may be adversely affected
if the demand for  residential  or  commercial  real estate  declines in the Rio
Rancho area as a result of changes in economic conditions.

A downturn in the  business of Rio Rancho's  largest  employer  could  adversely
affect the Company's real estate development business there.

Intel Corporation,  the largest employer in Rio Rancho with approximately  4,700
full-time   employees  at  April 30,   2007,   operates  a  large  semiconductor
manufacturing facility there and has announced its plan to retool this facility.
On May 3, 2007,  Intel  Corporation  announced  a  workforce  reduction  at that
facility starting in August 2007 of at least 1,000 jobs. If Intel  Corporation's
presence in Rio Rancho were to continue to diminish  for any reason,  such as in
response  to a downturn in its  semiconductor  manufacturing  business,  the Rio
Rancho  real estate  market and  consequently  the  Company's  land  development
business located there could be adversely affected.

As Rio Rancho's  population  continues to grow, the Company's  land  development
activities in that market may be subject to greater  limitations  than they have
been historically.

When the  Company  acquired  its core real estate  inventory  in Rio Rancho over
40 years ago, the area was not developed and had a low  population.  As of April
30,  2007,  Rio  Rancho  was the  third  largest  city in New  Mexico  and had a
population of  approximately  76,000.  As Rio Rancho's  population  continues to

                                       6

grow, the Company may be unable to engage in development  activities  comparable
to those the Company has engaged in  historically.  Local community or political
groups may oppose the Company's  development  plans or require  modification  of
those  plans,  which could cause  delays or increase  the cost of the  Company's
development  projects.  In addition,  zoning density limitations,  "slow growth"
provisions or other land use  regulations  implemented  by state,  city or local
governments could further restrict the Company's development activities or those
of its homebuilder customers, or could adversely affect financial returns from a
given project, which could adversely affect the Company's results of operations.

The Company's real estate assets are diminishing  over time,  meaning  long-term
growth in the real estate  business will require the  acquisition  of additional
real estate assets, possibly by expanding into new markets.

Substantially  all of the Company's real estate  revenues are derived from sales
of the Company's core  inventory in Rio Rancho.  This property was acquired more
than 40 years  ago, and each time the Company  develops and sells real estate to
customers in Rio Rancho, the Company's real estate assets diminish.  As of April
30, 2007, the Company owned  approximately  17,550 acres in Rio Rancho out of an
original  purchase of  approximately  91,000 acres.  The  continuity  and future
growth of the  Company's  real estate  business  will  require  that the Company
acquire  new  properties  in or near Rio  Rancho or expand to other  markets  to
provide  sufficient assets to maintain the Company's current level of operations
and revenues. While the Company holds two properties in Colorado, it has not for
many years made any  significant  attempt to identify a development  opportunity
similar to the one the Company has undertaken in Rio Rancho, and there can be no
assurance  that the Company  will be able to  identify  such an  opportunity  in
another market. If the Company does not acquire new real estate assets, its real
estate  holdings  will  continue to diminish,  which will  adversely  affect the
Company's ability to continue its real estate operations at their current level.

The Company's  remaining Rio Rancho real estate is not all in contiguous blocks,
which  may  adversely  affect  the  Company's  ability  to sell  lots at  levels
comparable with the recent past.

Of the  17,550  acres  in Rio  Rancho  the  Company  owned  at  April 30,  2007,
approximately  4,600 acres were in contiguous blocks that are being developed or
are suitable for development, and approximately 1,900 acres were in areas with a
high  concentration  of  ownership,  where the Company owns more than 50% of the
lots  in  the  area,   suitable  for  special   assessment   districts  or  city
redevelopment  areas that may allow for future development under the auspices of
local government.  The balance is in scattered lots, where the Company owns less
than 50% of the lots in the area,  that may require the purchase of a sufficient
number of adjoining lots to create tracts  suitable for  development or that the
Company may attempt to sell  individually  or in small groups.  As the Company's
land  sales  continue  and the  amount of the  Company's  contiguous  and highly
concentrated lots diminishes, the Company's ability to continue to sell lots and
generate  land sale  revenues at the levels of the recent past may be  adversely
affected,  which  would  have an  adverse  effect on the  Company's  results  of
operations.

The Company may not be able to acquire properties or develop them successfully.

If the Company is able to identify a development  opportunity similar to the one
it has  undertaken  in Rio  Rancho,  the  success of the  Company's  real estate
segment will still  depend in large part upon its ability to acquire  additional
properties  on  satisfactory  terms and to  develop  them  successfully.  If the
Company  is  unable to do so,  its  results  of  operations  could be  adversely
affected.

The  acquisition,  ownership and  development  of real estate is subject to many
risks that may adversely affect the Company's  results of operations,  including
the risks that:

 -   the  Company  may not be able to  acquire a  desired  property  because  of
     competition  from other real estate investors with greater capital than the
     Company has;

 -   the Company may not be able to obtain financing on acceptable  terms, or at
     all;

 -   an  adverse  change  in  market  conditions  during  the  interval  between
     acquisition  and sale of a property  may result in a lower than  originally
     anticipated profit;

 -   the Company may underestimate the cost of development  required to bring an
     acquired  property  up to  standards  established  for the market  position
     intended for that property;

                                       7

 -   acquired  properties  may be located in new  markets  where the Company may
     face risks  associated with a lack of market  knowledge or understanding of
     the  local  economy,  lack  of  business  relationships  in  the  area  and
     unfamiliarity with local governmental and permitting procedures; and

 -   the  Company  may be  unable  to  quickly  and  efficiently  integrate  new
     acquisitions,  particularly acquisitions of portfolios of properties,  into
     its  existing  operations,  and this could  have an  adverse  effect on its
     results of operations.

The Company's real estate development  activities have been primarily limited to
a single market, and it may face  substantially more experienced  competition in
acquiring and developing real estate in new markets.

Since the Company's real estate acquisition and development activities have been
primarily limited to the Rio Rancho market,  the Company does not have extensive
experience in acquiring  real estate in other markets or engaging in development
activities  in  multiple  markets  simultaneously.  Should the  Company  seek to
acquire additional real estate in new markets,  competition from other potential
purchasers of real estate could adversely affect the Company's operations.  Many
of these entities may have substantially greater experience than the Company has
in  identifying,  acquiring and developing  real estate  opportunities  in other
markets and in managing  real estate  developments  in multiple  markets.  These
entities may also have greater financial  resources than the Company has and may
be able to pay more than the Company can or accept more risk than the Company is
willing  to accept to  acquire  real  estate.  These  entities  also may be less
sensitive to risks with respect to the costs or the geographic  concentration of
their  investments.  This competition may prevent the Company from acquiring the
real estate assets the Company  seeks,  or increase the cost of properties  that
the Company  does  acquire.  Competition  may also reduce the number of suitable
investment opportunities available to the Company or may increase the bargaining
power of property owners seeking to sell.

The Company will likely compete for real estate investment  opportunities  with,
among others, insurance companies,  pension and investment funds,  partnerships,
real estate or housing developers,  investment companies, real estate investment
trusts (REITs), and owner/occupants.

Properties  that the Company  acquires  may have defects that are unknown to the
Company.

Although the Company generally performs due diligence on prospective  properties
before they are acquired, and on a periodic basis after acquisition,  any of the
properties  the Company may acquire  may have  characteristics  or  deficiencies
unknown to the  Company  that could  adversely  affect the  property's  value or
revenue  potential or, in the case of  environmental  or other  factors,  impose
liability on the Company, which could be significant.

The Company is subject to substantial  legal,  regulatory and other requirements
regarding the development of land and requires government  approvals,  which may
be  denied,  and  thus the  Company  may  encounter  difficulties  in  obtaining
entitlements  on a timely  basis,  which could limit its ability to sell land at
levels comparable with the recent past.

There  are  many  legal,   regulatory  and  other  requirements   regarding  the
development  of  land,  which  may  delay  the  start  of  planned   development
activities,  increase the Company's  expenses or limit the Company's  customers'
development activities. Development activities performed in connection with real
estate sales  include  obtaining  necessary  governmental  approvals,  acquiring
access to water  supplies,  installing  utilities and necessary storm drains and
building  or  improving  roads.  Numerous  local,  state and  federal  statutes,
ordinances  and  rules  and  regulations,  including  those  concerning  zoning,
resource   protection  and  environmental  laws,  regulate  these  tasks.  These
regulations often provide broad discretion to the governmental  authorities that
regulate  these  matters  and  from  whom  the  Company  must  obtain  necessary
approvals.  The  approval  process  can be lengthy and delays can  increase  the
Company's costs, as well as the costs for the primary customers of the Company's
real estate business (residential and commercial developers).  Failure to obtain
necessary  approvals  could  significantly  adversely  affect the Company's real
estate development activities and its results of operations.

                                       8

Increases in taxes or  governmental  fees would  increase the  Company's  costs.
Also,  adverse  changes in tax laws could  reduce  customer  demand for land for
commercial and residential development.

Increases in real estate taxes and other local  governmental  fees, such as fees
imposed on developers to fund schools,  open space and road  improvements  or to
provide low and moderate income housing,  would increase the Company's costs and
have an adverse effect on the Company's  operations.  In addition,  increases in
local real  estate  taxes or  changes  in income  tax laws that would  reduce or
eliminate tax  deductions or incentives  could  adversely  affect  homebuilders'
potential  customer demand and could  adversely  affect future land sales by the
Company to those homebuilders.

Unless the City of Rio Rancho supplements its current water supply,  development
of the Company's remaining Rio Rancho land may be adversely affected.

All of the  Company's  future Rio Rancho land  development  will  require  water
service from the City of Rio Rancho or from another  source.  While the city has
not denied any development in the past due to a shortage of water supply, it has
recently  expressed concerns that its current water supply cannot support growth
indefinitely.  Although  the  city is  currently  pursuing  various  methods  to
supplement its water supply, if it is unsuccessful, development of the Company's
remaining Rio Rancho land could be adversely affected.

The Company may be subject to environmental liability.

Various  laws and  regulations  impose  liability  on real  property  owners and
operators for the costs of investigating, cleaning up and removing contamination
caused by hazardous or toxic  substances at the property.  In the Company's role
as a property  owner or  developer,  the  Company  could be held liable for such
costs.  This  liability  may be imposed  without  regard to the  legality of the
original  actions  and without  regard to whether  the  Company  knew of, or was
responsible  for, the  presence of the  hazardous  or toxic  substances.  If the
Company  fails to disclose  environmental  issues,  it could also be liable to a
buyer or lessee of the property.  In addition,  some environmental laws create a
lien on the  contaminated  site in favor of the government for damages and costs
incurred in connection  with the  contamination.  If the Company incurs any such
liability  that is  material,  its  results  of  operations  would be  adversely
affected.

Real estate is a cyclical  industry,  and the  Company's  results of  operations
could be adversely affected during cyclical downturns in the industry.

During  periods  of  economic  expansion,  the real  estate  industry  typically
benefits from an increased  demand for  developable  land.  In contrast,  during
periods of economic contraction, the real estate industry is typically adversely
affected by a decline in demand. For example,  beginning in early 2007 increased
defaults under sub-prime  mortgages led to significant  losses for the companies
offering such mortgages and contributed to a downturn in the residential housing
market. Further, real estate development projects typically begin, and financial
and other resources are committed,  long before the real estate project comes to
market,  which could be during a time when the real estate  market is depressed.
There can be no  assurance  that an increase in demand or an economic  expansion
will be sustained in the Rio Rancho market, where the Company's core real estate
business  is based  and  operates,  or in any other new  market  into  which the
Company expands its real estate  operations.  Any of the following  (among other
factors,  including  those  mentioned  elsewhere in this  report)  could cause a
general  decline in the demand for  residential or commercial real estate which,
in turn, could contribute to a cyclical downturn in the real estate  development
industry  that  could  have  an  adverse  effect  on the  Company's  results  of
operations:

 -   changes in government regulation;

 -   periods of general economic slowdown or recession;

 -   rising  interest  rates  and a  decline  in  the  general  availability  or
     affordability of mortgage financing;

 -   adverse changes in local or regional economic conditions;

 -   shifts in population away from the markets that the Company serves;

 -   tax law changes,  including  potential  limits on, or  elimination  of, the
     deductibility of certain mortgage interest expense, real property taxes and
     employee relocation expenses; and

                                       9

 -   acts of God, including hurricanes, earthquakes and other natural disasters.

Changing  market  conditions may adversely  affect  companies in the real estate
industry who rely upon credit in order to finance  their  purchases of land from
the Company.

Changes in interest rates and other economic factors can dramatically affect the
availability of capital for the Company's developer  customers.  Residential and
commercial  developers to whom the Company  frequently sells land typically rely
upon  third  party  financing  to  provide  the  capital   necessary  for  their
acquisition of land.  Changes in economic and other external  market  conditions
may result in a developer's inability to obtain suitable financing,  which could
adversely  impact the  Company's  ability to sell land,  or force the Company to
sell  land at  lower  prices,  which  would  adversely  affect  its  results  of
operations.

Changes  in  general  economic,   real  estate  development  or  other  business
conditions  could  adversely  affect the  Company's  business and its  financial
results.

A significant  percentage of the Company's real estate revenues are derived from
customers  in the  residential  homebuilding  business,  which  is  particularly
sensitive  to changes in economic  conditions  and factors  such as the level of
employment,  consumer  confidence,  consumer  income,  availability  of mortgage
financing and interest rates.  Adverse changes in any of these  conditions could
decrease  demand for homes  generally and therefore  affect the pricing of homes
and in turn the price of land sold to developers,  which could adversely  affect
the Company's results of operations.

A number of contracts  for  individual  Rio Rancho home site sales made prior to
1977  require  the Company to exchange  land in areas  where  utilities  are not
installed for land in an area that is serviced by utilities.

In connection  with certain  individual Rio Rancho home site sales made prior to
1977, if water,  electric and telephone  utilities have not reached the lot site
when a purchaser is ready to build a home,  the Company is obligated to exchange
a lot in an area then serviced by such  utilities for the lot of the  purchaser,
without cost to the purchaser.  Although this has not been the case in the past,
if the Company were to experience a large number of requests for such  exchanges
in the future, the Company's results of operations could be adversely impacted.

If  subcontractors  are not available to assist in completing the Company's land
development projects,  the Company may not be able to complete those projects on
a timely basis.

The  development of land on a timely basis is critical to the Company's  ability
to complete  development  projects in accordance with the Company's  contractual
obligations.  The  availability  of  subcontractors  in the markets in which the
Company  operates  can be  affected  by factors  beyond the  Company's  control,
including the general demand for these  subcontractors by other  developers.  If
subcontractors  are not available when the Company requires their services,  the
Company may experience delays or be forced to seek alternative suppliers,  which
may increase costs or adversely  affect the Company's  ability to sell land on a
timely basis.

Land investments are generally illiquid, and the Company may not be able to sell
the Company's  properties when it is  economically or otherwise  important to do
so.

Land investments  generally cannot be sold quickly, and the Company's ability to
sell  properties  may be affected by market  conditions.  The Company may not be
able to  diversify  or vary  its  portfolio  promptly  in  accordance  with  its
strategies or in response to economic or other conditions. The Company's ability
to pay down debt, reduce interest costs and acquire properties is dependent upon
its ability to sell the properties it has selected for disposition at the prices
and within the deadlines the Company has established for each property.

Risks Related to the Company's Media Service Operations
-------------------------------------------------------

The Company's media services  operations could face increased costs and business
disruption from instability in the newsstand distribution channel.

The Company extends credit to various newsstand distribution services customers,

                                       10

whose credit  worthiness  and  financial  position may be affected by changes in
economic  or  other  external   conditions.   Financial   instruments  that  may
potentially subject the Company to a significant concentration of risk primarily
consist  of  trade  accounts   receivable  from   wholesalers  in  the  magazine
distribution industry. Due to industry consolidation, four wholesalers represent
approximately  75% of the  wholesale  magazine  distribution  business,  and the
insolvency of any of them could have a material  adverse impact on the Company's
results  of  operations  and  financial  condition.  In  addition,  due  to  the
significant  concentration,  should  there  be a  disruption  in  the  wholesale
channel,  it could impede the Company's  ability to distribute  magazines to the
retail marketplace.

Almost all of the  Company's  revenues in the Company's  newsstand  distribution
services  business are derived from sales made on a fully returnable  basis, and
an error in estimating  expected  returns could cause a misstatement of revenues
for the period affected.

As is  customary  in  the  magazine  distribution  industry,  almost  all of the
Company's revenues in its newsstand  distribution  services business segment are
derived from sales made on a fully returnable basis,  meaning that customers may
return unsold copies of magazines for credit.  During the Company's  fiscal year
ended April 30, 2007, customers ultimately returned for credit approximately 68%
of the magazines  initially  distributed by the Company.  The Company recognizes
revenues  from the  distribution  of  magazines  at the time of  delivery to the
wholesalers,  less a reserve for  estimated  returns that is based on historical
experience  and  recent  sales data on an  issue-by-issue  basis.  Although  the
Company has the  contractual  right to return  these  magazines  for  offsetting
credits from the publishers  from whom the magazines are purchased,  an error in
estimating  the  percentage of returns at the end of an accounting  period could
have the effect of understating or overstating  revenues in the period affected,
which  misstatement  would have to be adjusted in the subsequent period when the
actual return information became known.

The  introduction and increased  popularity of alternative  technologies for the
distribution  of news,  entertainment  and other  information  and the resulting
shift in consumer habits and advertising  expenditures from print to other media
could adversely affect the Company's media services business segments.

Revenues in the  Company's  media  services  business  segments are  principally
derived  from  services  the  Company   performs  for  traditional   publishers.
Historically, a reduction in the demand for the Company's newsstand distribution
services due to lower sales of magazines at  newsstands  has often been at least
partially offset by an increase in demand for the Company's fulfillment services
as consumers affected by the reduction in newsstand  distribution instead sought
publications   through   subscription.   However,   the  distribution  of  news,
entertainment  and other  information  via the Internet has become  increasingly
popular, and consumers increasingly rely on personal computers,  cellular phones
or  other  electronic  devices  for such  information.  The  resulting  shift of
advertising dollars from traditional print media to online media could adversely
affect the publishing industry in general and have a negative impact on both the
Company's  fulfillment and newsstand  distribution  segments due to the shift in
consumer  demand away from print media and toward digital  downloading and other
delivery methods.

The Company's  publisher  customers  face  increased  costs for paper and postal
rates. This could have a negative affect on their operating income,  and this in
turn could negatively affect the Company's media services operations.

The Company's publisher customers' principal raw material is paper. Paper prices
have  fluctuated  over the past several  years,  and  significant  unanticipated
increases  in  paper  prices  could  adversely  affect  a  publisher  customer's
operating income.  Postage for magazine  distribution and direct solicitation is
another  significant  operating  expense of the Company's  publisher  customers,
which  primarily use the U.S. Postal Service to distribute  their products.  The
U.S. Postal Service implemented a postal rate increase of 5.1% effective May 14,
2007,  and a further rate increase for magazines  effective  July 15,  2007. Any
significant  increases  in paper costs or postal rates that  publishers  are not
able to offset could have a negative affect on their operating income,  and this
in turn could negatively affect the Company's media services operations.

Competitive  pressures  may result in a decrease in the  Company's  revenues and
profitability.

The  fulfillment  and  newsstand  distribution  services  businesses  are highly
competitive, and some of the Company's competitors have financial resources that
are  substantially   greater  than  the  Company's.   The  Company   experiences

                                       11

significant price  competition in the markets in which it competes.  Competition
in the Company's media services  businesses may come not only from other service
providers,  but also from the  Company's  customers,  who may  choose to develop
their own internal  fulfillment or  distribution  operations,  thereby  reducing
demand  for the  Company's  services.  Competitive  pressures  could  cause  the
Company's  media  services   businesses  to  lose  market  share  or  result  in
significant  price  erosion that could have an adverse  effect on the  Company's
results of operations.

The  Company's  operating  results  depend  in  part  on  successful   research,
development  and  marketing  of new or  improved  services  and data  processing
capabilities  and  could  suffer  if the  Company  is not  able to  continue  to
successfully implement new technologies.

The Company  operates in highly  competitive  markets  that are subject to rapid
change, and must therefore continue to invest in developing  technologies and to
improve  various  existing  systems  in order to remain  competitive.  There are
substantial  uncertainties  associated with the Company's efforts to develop new
technologies and services for the magazine  fulfillment and distribution markets
the Company serves. The Company makes significant investments in new information
processing technologies and services that may or may not prove to be profitable.
Even if these developments are profitable,  the operating margins resulting from
their  application  would  not  necessarily  result in an  improvement  over the
Company's historical margins.

The Company may not be able to  successfully  introduce  new  services  and data
processing capabilities on a timely and cost-effective basis.

The success of new and improved  services depends on their initial and continued
acceptance by the publishers and other customers with whom the Company  conducts
business.  The Company's  media  services  businesses  are affected,  to varying
degrees,  by technological  change and shifts in customer demand.  These changes
result in the  transition  of services  provided and increase the  importance of
being  "first  to  market"  with  new   services  and   information   processing
innovations.  Difficulties or delays in the development, production or marketing
of new services and information processing capabilities may be experienced,  and
may adversely affect the Company's results of operations. These difficulties and
delays could also prevent the Company from realizing a reasonable  return on the
investment   required  to  bring  new   services  and   information   processing
capabilities to market on a timely and cost effective basis.

The Company's  operations  could be disrupted if its  information  systems fail,
causing increased expenses and loss of sales.

The Company's  business depends on the efficient and uninterrupted  operation of
its  systems and  communications  capabilities,  including  the  maintenance  of
customer databases for billing and label processing,  and the Company's magazine
distribution order regulation system. If a key system were to fail or experience
unscheduled  downtime  for any  reason,  even if only  for a short  period,  the
Company's  operations  and financial  results could be adversely  affected.  The
Company's  systems could be damaged or interrupted by a security  breach,  fire,
flood, power loss, telecommunications failure or similar events. The Company has
a formal disaster recovery plan in place, but this plan may not entirely prevent
delays or other  complications  that  could  arise from an  information  systems
failure.  The  Company's  business  interruption  insurance  may not  adequately
compensate the Company for losses that may occur.

The Company  depends on the Internet to deliver some services,  which may expose
the Company to various risks.

Many of the Company's operations and services,  including order taking on behalf
of customers and communications with customers and suppliers, involve the use of
the Internet.  The Company is therefore subject to factors that adversely affect
Internet usage,  including the reliability of Internet  service  providers that,
from time to time, have  operational  problems and experience  service  outages.
Additionally,  as the Company  continues  to increase  the  services it provides
using the Internet,  the Company is increasingly subject to risks related to the
secure transmission of confidential information over public networks. Failure to
prevent security  breaches of the Company's  networks or those of its customers,
or a security breach  affecting the Internet in general could  adversely  affect
the Company's results of operations.

The  Company  is subject  to  extensive  rules and  regulations  of credit  card
associations.

The Company  processes a large number of credit card  transactions  on behalf of
its  fulfillment  services  customers and is thus subject to the extensive rules

                                       12

and regulations of the leading credit card  associations.  The card associations
modify their rules and regulations from time to time and the Company's inability
to anticipate changes in rules, regulations or the interpretation or application
thereof may result in substantial disruption to its business.  In the event that
the card associations or the sponsoring banks determine that the manner in which
the Company  processes  certain  card  transactions  is not in  compliance  with
existing rules and regulations,  or if the card associations  adopt new rules or
regulations that prohibit or restrict the manner in which the Company  processes
card  transactions,  the  Company may be forced to modify the manner in which it
operates,  which  may  increase  costs,  or cease  processing  certain  types of
transactions  altogether,  either of which  could have a negative  impact on its
business.  As an example of the card  associations  amending their  regulations,
Kable is now  required  to comply  with the  Payment  Card  Industry  (PCI) Data
Security Standard.  The Company is currently  implementing detailed plans at its
fulfillment  services  locations where credit card transactions are processed in
order to achieve  compliance  with the PCI Data  Security  Standard,  but if the
Company is found to be in non-compliance  with this standard,  it may be subject
to substantial penalties and fines.

A  failure  to  successfully   migrate  customers  at  the  Company's   Colorado
fulfillment  services  location from an outsourced data processing  system to an
internal system may burden the Company with continued additional costs.

Since  the 2003  acquisition  of the  Company's  Colorado  fulfillment  services
business  from  Electronic  Data Systems  Corporation  ("EDS"),  the Company has
outsourced to an EDS-owned data processing  system a substantial  portion of the
data processing  required to service the Colorado business,  but has intended to
move that  activity  in-house when it had a suitable  internal  data  processing
system.  The Company has been  developing an expanded  internal data  processing
platform to service the Colorado business along with the Company's  pre-existing
fulfillment  services  business.  Palm Coast  Data,  which was  acquired  by the
Company in January 2007,  also maintains an internal  fulfillment  services data
processing  system.  The Company is currently  in the process of  migrating  its
Colorado  fulfillment  services  customers  away  from  the  EDS  system  to the
Company's internal systems. The migration process is technically complex and the
Company  is  encountering  unanticipated  problems  that have  delayed  its full
implementation.  Should the Company  continue to  encounter  such  problems  and
delays,  it may  continue to be burdened  with its  outsourcing  and  additional
development  costs,  and it may result in a devaluation of its investment in the
expanded data processing platform.

If the Company cannot efficiently  integrate the constituents of its fulfillment
business,  it may not realize the expected  benefits of the  acquisition of Palm
Coast, and the resources and attention  required for successful  integration may
interrupt the existing fulfillment business.

In January 2007,  the Company acquired Palm Coast, which is, like the Company, a
leading  United  States  provider  of  fulfillment   services  to  the  magazine
publishing  industry.  An important objective of the Company is to integrate the
Company's  existing  fulfillment  business  with that of Palm Coast and  thereby
reduce costly duplications. There is a significant degree of difficulty involved
in this process.  The  maintenance of ongoing  operations of each business while
integrating  the businesses  will depend on the Company's  ability to retain key
officers  and  personnel  while  it   simultaneously   proceeds  to  expand  its
operational and financial systems.  This increase in operating  complexities may
have a negative near and long-term effect on the Company's  anticipated benefits
resulting from the acquisition.

Other Business Risks
--------------------

The Company may be unable to obtain financing on acceptable  terms,  which could
preclude it from  continuing  operations at their current levels, or from making
future acquisitions.

The  Company's  operations  depend on its  ability to obtain  financing  for the
development  of land in the real estate  business  and for  working  capital and
capital expenditure  requirements in the media services business,  or for making
future  acquisitions.  If the Company is not able to obtain suitable  financing,
its costs could increase and its revenues could  decrease,  or the Company could
be precluded  from  continuing  its  operations at current levels or from making
future acquisitions.  Increases in interest rates can make it more difficult and
expensive to obtain the funds needed to operate the  Company's  businesses.  The
applicable  interest  rates on the  revolving  bank credit  facilities  that the
Company has in place  fluctuate  based on changes in short-term  interest rates.
Increases in interest  rates would increase the Company's  interest  expense and
adversely  affect the  Company's  results of  operations  or its ability to make
acquisitions.

                                       13

The Company may engage in future acquisitions and may encounter  difficulties in
integrating  the  acquired  businesses,  and,  therefore,  may not  realize  the
anticipated  benefits of the acquisitions in the time frames anticipated,  or at
all.

From time to time, the Company may seek to grow through  strategic  acquisitions
intended to complement or expand one or more of its business  segments,  such as
the acquisition of Palm Coast in January 2007, or to enable the Company to enter
a new  business.  The success of these  transactions  will depend in part on the
Company's  ability to  integrate  the  systems and  personnel  acquired in these
transactions into its existing  business without  substantial  costs,  delays or
other operational or financial problems.  The Company may encounter difficulties
in  integrating  acquisitions  with the  Company's  operations  or in separately
managing a new business.  Furthermore, the Company may not realize the degree of
benefits that the Company anticipates when first entering into a transaction, or
the Company may realize  benefits more slowly than it anticipates.  Any of these
problems or delays could adversely affect the Company's results of operations.

The Company's  current  management  and internal  systems may not be adequate to
handle the Company's growth.

To manage the Company's future growth, the Company's management must continue to
improve  operational  and  financial  systems and to expand,  train,  retain and
manage the Company's  employee  base. As the Company  continues to grow, it will
also  likely  need  to  recruit  and  retain  additional   qualified  management
personnel,  and its  ability  to do so will  depend  upon a number  of  factors,
including  the Company's  results of  operations  and prospects and the level of
competition then prevailing in the market for qualified  personnel.  At the same
time,  the Company  will likely be  required to manage an  increasing  number of
relationships  with  various  customers  and  other  parties.  If the  Company's
management personnel, systems, procedures and controls are inadequate to support
its operations,  expansion could be slowed or halted and the opportunity to gain
significant  additional market share could be impaired or lost. Any inability on
the part of the Company's  management to manage the Company's growth effectively
may adversely affect its results of operations.

The Company's  business  could be seriously  harmed if the Company's  accounting
controls and  procedures  are  circumvented  or otherwise  fail to achieve their
intended purposes.

Although the Company  evaluates its internal  controls over financial  reporting
and the Company's disclosure controls and procedures at the end of each quarter,
any system of controls,  however well designed and operated, is based in part on
certain  assumptions and can provide only reasonable,  not absolute,  assurances
that the objectives of the system are met. Any failure or  circumvention  of the
controls  and  procedures  or  failure  to comply  with  regulations  related to
controls and  procedures  could have a material  adverse effect on the Company's
results of operations.

In  addition,  there can be no assurance  that the  Company's  internal  control
systems and  procedures,  or the  integration  of Palm Coast or any other future
acquisitions and their respective internal control systems and procedures,  will
not result in or lead to a future  material  weakness in the Company's  internal
controls,  or that the Company or its independent  registered  public accounting
firm will not identify a material weakness in the Company's internal controls in
the future. If the Company's internal controls over financial  reporting are not
considered  adequate,  the Company may  experience a loss of public  confidence,
which could have an adverse  effect on the  Company's  business and the price of
the Company's common stock.

Further,  deficiencies  or weaknesses that are not yet identified by the Company
could emerge and the  identification  and  correction of those  deficiencies  or
weaknesses could have an adverse effect on the Company's results of operations.

The  Company's  pension  plan,  which the Company  froze in 2004,  is  currently
underfunded and may require additional cash contributions.

The Company's  pension plan was underfunded on a generally  accepted  accounting
principles  basis by  approximately  $1.2 million at April 30, 2007. The Company
froze the  pension  plan  effective  March 1, 2004 so that from that date  there
would be no new participants in the plan and the existing  participants'  future
compensation  would  not  affect  their  pension  benefits.   A  key  assumption
underlying the actuarial calculations upon which the Company's accounting and

                                       14

reporting  obligations  for the pension plan are based is an assumed  investment
rate of return of eight  percent.  If the pension plan assets do not realize the
expected  rate of  return,  or if any other  assumptions  are  incorrect  or are
modified,  the Company  could be required to make  contributions  to the pension
plan until the plan is fully funded,  which could limit the Company's  financial
flexibility.

The Company's quarterly operating results can fluctuate significantly.

The  Company  has  experienced,   and  is  likely  to  continue  to  experience,
significant fluctuations in its quarterly operating results, which may adversely
affect the Company's stock price.  Future  quarterly  operating  results may not
align with past trends as a result of numerous  factors,  including many factors
that  result from the  unpredictability  of the nature and timing of real estate
land sales, the variability in gross profit margins and competitive pressures.

Changes in the Company's income tax estimates could affect profitability.

In  preparing  the  Company's  consolidated  financial  statements,  significant
management  judgment is required to estimate the  Company's  income  taxes.  The
Company's  estimates  are based on its  interpretation  of federal and state tax
laws and regulations.  The Company estimates actual current tax due and assesses
temporary  differences  resulting from differing  treatment of items for tax and
accounting purposes. The temporary differences result in deferred tax assets and
liabilities,  which are included in the Company's  consolidated  balance  sheet.
Adjustments may be required by a change in assessment of the Company's  deferred
tax assets and  liabilities,  changes  due to audit  adjustments  by federal and
state tax  authorities,  and changes in tax laws. To the extent  adjustments are
required in any given period,  the Company will include the  adjustments  in the
tax  provision in its  financial  statements.  These  adjustments  could have an
adverse effect on the Company's  financial  position,  cash flows and results of
operations.

The price of the  Company's  common stock over the past year has been  volatile.
This  volatility  may make it difficult for  shareholders  to sell the Company's
common stock, and the sale of substantial  amounts of the Company's common stock
could adversely affect the price of the Company's common stock.

The market price for the Company's common stock varied between a high of $149.99
and a low of $34.55 per share in the twelve  months ended April 30,  2007.  This
volatility may make it difficult for a shareholder to sell the Company's  common
stock,  and the sale of substantial  amounts of the Company's common stock could
adversely  affect the price of the common stock.  The  Company's  stock price is
likely to continue to be volatile and subject to significant price  fluctuations
in response to market and other factors,  including the other factors  discussed
in "Risk Factors," and:

 -   variations in the Company's  quarterly  operating  results,  which could be
     significant;

 -   revisions in securities analysts' estimates;

 -   material announcements by the Company or the Company's competitors;

 -   sales of a substantial number of shares of the Company's common stock; and

 -   adverse changes in general market conditions or economic trends.

In  addition to the factors  discussed  above,  the  Company's  common  stock is
relatively thinly traded,  which means that large  transactions in the Company's
common  stock may be  difficult  to  conduct in a short time frame and may cause
significant fluctuations in the price of the Company's common stock. The average
daily  trading  volume  in the  Company's  common  stock on the New  York  Stock
Exchange  over  the  ten-day  trading  period  ending  on  April  30,  2007  was
approximately  130,000 shares per day.  Further,  there have been,  from time to
time, significant "short" positions in the Company's common stock, consisting of
borrowed  shares sold,  or shares sold for future  delivery,  which may not have
been  borrowed.  The Company does not know whether any of these short  positions
are covered by "long"  positions  owned by the short sellers.  For example,  the
short interest in the Company's  common stock, as reported by the New York Stock
Exchange on June 15, 2007, was 2,259,331 shares,  or approximately  30.5% of the
Company's  outstanding  shares.  Any attempt by the short  sellers to  liquidate
their positions over a short period of time could cause  significant  volatility
in the price of the Company's common stock.

In the past, following periods of volatility in the market price of their stock,
many companies have been the subject of securities class action  litigation.  If

                                       15

the Company  becomes  involved in  securities  class  action  litigation  in the
future,  it could result in  substantial  costs and  diversion of the  Company's
management's  attention and resources and could harm the Company's  stock price,
business, prospects, results of operations and financial condition. In addition,
the  broader  stock  market  has  experienced   significant   price  and  volume
fluctuations in recent years.  This volatility has affected the market prices of
securities  issued by many  companies for reasons  unrelated to their  operating
performance and may adversely affect the price of the Company's common stock.

The Company has a principal  shareholder whose interests may conflict with other
investors.

The Company has a principal  shareholder,  Nicholas G. Karabots,  who,  together
with  certain  of  his  affiliates,  currently  owns  approximately  55%  of the
Company's  outstanding  common stock.  As a result,  this principal  shareholder
exercises  significant  influence over the Company's major decisions,  including
through his ability to vote for the members of the Company's Board of Directors.
Because of this voting power,  the  principal  shareholder  could  influence the
Company to make  decisions that might run counter to the wishes of the Company's
other investors generally. In addition, publishing companies owned or controlled
by the Company's  principal  shareholder are also  significant  customers of the
Company's  distribution  business,  and, as a result,  the  shareholder may have
business interests with respect to the Company that differ from or conflict with
those of other holders of the Company's common stock.

Although the Company has paid  dividends in each of the last five fiscal  years,
the Company has no regular dividend policy and offers no assurance of any future
dividends.  Any short-term  return on an investment in the Company's  stock will
depend on its market price.

On July 16,  2007,  the Board of Directors  declared a special cash  dividend of
$1.00 per common share payable on August 24, 2007 to  shareholders  of record at
the close of business  on August 10,  2007.  The  Company has also paid  special
dividends on its common stock following the preceding four fiscal years starting
in 2003 of $0.25, $0.40, $0.55 and $0.85, with an additional special dividend of
$3.50 paid in January 2006. The Board has now approved special dividends payable
on its common  stock in the past five  fiscal  years and has stated  that it may
consider  special  dividends  from  time-to-time  in  the  future  in  light  of
conditions  then  existing,   including  earnings,   financial  condition,  cash
position,  and  capital  requirements  and  other  needs.  Notwithstanding  such
statement and the status of such future  conditions,  no assurance is given that
there  will be any  such  future  dividends  declared  or that  future  dividend
declarations,  if any,  will be  commensurate  in amount or frequency  with past
dividends.

The Company is currently a  "controlled  company"  within the meaning of the New
York Stock  Exchange  rules.  As a result,  the Company is exempt  from  certain
corporate  governance  requirements and will not need to fully comply with those
requirements  until  one year  after  the  Company  is no  longer a  "controlled
company."

Because  Nicholas G. Karabots and certain of his affiliates  together  currently
own more than 50% of the voting power of the Company's common stock, the Company
is  considered  a  "controlled  company"  for  the  purposes  of the  rules  and
regulations of the New York Stock  Exchange.  As such, the Company is permitted,
and has elected,  to opt out of the New York Stock  Exchange  requirements  that
would  otherwise  require its  compensation  and human  resources  committee  to
consist  entirely of  independent  directors.  The Company has also opted not to
have a  nominating/corporate  governance  committee  as required by the New York
Stock  Exchange  for  non-controlled  companies.  At such time,  if any,  as the
Company is no longer considered a "controlled company" for purposes of the rules
and  regulations  of the New York Stock  Exchange,  those rules and  regulations
provide for a twelve month  transition  period during which the Company will not
need to fully comply with the  otherwise  applicable  requirements.  The Company
will  not be  required  to have  entirely  independent  compensation  and  human
resources and  nominating/corporate  governance  committees  until twelve months
following the date on which it ceases to be a controlled  company,  although the
Company will need to phase in independent  members for each of these  committees
starting  on the date  that it  ceases  to be a  controlled  company.  While the
Company remains a controlled  company and during any transition period following
the Company's ceasing to be a controlled company,  shareholders may not have the
same  protections  afforded to shareholders of companies that are subject to all
of the New York Stock Exchange corporate governance requirements.

                                       16

Oklahoma law and the  Company's  charter  documents  may impede or  discourage a
takeover,  which could cause the market price of the  Company's  common stock to
decline.

The Company is an Oklahoma  corporation,  and the  anti-takeover  provisions  of
Oklahoma  law impose  various  impediments  to the  ability of a third  party to
acquire control of the Company,  even if a change in control would be beneficial
to the Company's existing shareholders. The Company's by-laws generally prohibit
the Company from engaging in business  combinations and other  transactions with
an  "interested  shareholder"  unless the holders of at least  two-thirds of the
Company's then outstanding common stock approve the transaction.

In addition to these  by-law  restrictions,  some  provisions  of the  Company's
amended  certificate of  incorporation  and by-laws may discourage  certain acts
involving a  fundamental  change of the  Company.  For  example,  the  Company's
amended  certificate of incorporation and its by-laws contain certain provisions
that:

 -   classify the Company's Board of Directors into three classes, each of which
     serves for a term of three years,  with one class being  elected each year;
     and

 -   prohibit shareholders from calling a special meeting of shareholders.

Because  the  Company's  Board of  Directors  is  classified  and the  Company's
certificate of incorporation and by-laws do not otherwise provide,  Section 1027
of the Oklahoma General Corporation Act permits the removal of any member of the
board of  directors  only for cause.  These  provisions  could  impede a merger,
takeover or other  business  combination  involving  the Company or discourage a
potential  acquirer from making a tender offer for the  Company's  common stock,
which,  under  certain  circumstances,  could  reduce  the  market  price of the
Company's common stock.

Item 1B. Unresolved Staff Comments
-------- -------------------------
Not applicable.

Item 2.           Properties
-------           ----------

The Company's  executive offices are located in approximately  2,000 square feet
of leased  space in an office  building in  Princeton,  New Jersey.  Real Estate
operations  are based in  approximately  5,400 square feet of leased space in an
office  building  in Rio  Rancho,  New Mexico.  In  addition,  other real estate
inventory and investment  properties are described in Item 1. Kable's  executive
offices  are  based  in New York  City,  and  these  offices  together  with the
production,  administration,  sales and  other  facilities  for its  Fulfillment
Services and Newsstand  Distribution  Services businesses are located in sixteen
owned or leased  facilities  which,  in the  aggregate,  comprise  approximately
800,000  square feet of space in Mt.  Morris,  Illinois,  Palm  Coast,  Florida,
Marion, Ohio, Louisville,  Colorado, New York City and Cerritos, California. The
Company  believes its  facilities  are adequate for its current and  anticipated
requirements.

Item 3.           Legal Proceedings
-------           -----------------

A. In May 2000, a civil action was commenced in the United States District Court
for the Southern District of New York entitled United Magazine  Company,  et al.
                                               ---------------------------------
v. Murdoch Magazines Distribution,  Inc., et al. The Complaint was filed by five
-----------------------------------------------
affiliated  magazine  wholesalers and a related  service  company  (collectively
referred to as "Unimag") against Murdoch,  a national  distributor of magazines,
and Chas. Levy Circulating Co., a magazine wholesaler.  An Amended Complaint was
filed in August 2000, in which the Company's Kable News Company, Inc. subsidiary
and three other national  distributors were added as defendants.  Motions by the
defendants  to dismiss the Amended  Complaint  were  granted,  with leave to the
plaintiffs to replead specified claims. In June 2001, a Second Amended Complaint
was filed which  included two claims  against  Kable News:  (i) violation of the
Robinson-Patman Act, which generally prohibits  discriminatory pricing, and (ii)
breach of fiduciary duty.

The defendants moved to dismiss the Second Amended  Complaint.  The court denied
the motions  with respect to the  Robinson-Patman  Act claim but  dismissed  the
claim for breach of fiduciary duty. Kable News then answered the Robinson-Patman
Act claim, denying the material allegations and asserting  affirmative defenses.
Kable News also  asserted  counterclaims  to recover  certain  unpaid debts from
Unimag.

                                       17

Pursuant to an order of a United States Magistrate Judge in October 2003, Unimag
presented  each of the  defendants  with an analysis of its damage claim against
such  defendant.  The damage claim against  Kable News amounts to  approximately
$15.2 million; any damages awarded would be trebled.

Pretrial discovery has been completed.  The action against Levy was settled, and
the remaining  defendants  moved for summary  judgment.  In September  2005, the
court granted the motion for summary judgment of the defendants, including Kable
News, and judgment in favor of the  defendants was entered late September  2005.
Unimag filed an appeal of the  judgment on July 5, 2006.  Briefs have been filed
on behalf of all of the parties.  The appellate court has not yet scheduled oral
argument.

In April 2006,  Unimag entered into a consent judgment in favor of Kable News on
the counterclaims of Kable News for $4,159,770,  plus interest at the rate of 6%
per annum from  September  30,  1999,  and Kable News  agreed not to enforce the
judgment  until the action has been  concluded.  Unimag is no longer in business
and does not appear to have the assets to pay that judgment.

B. The Company and its  subsidiaries  are  involved in various  other claims and
legal  actions  arising in the normal  course of  business.  While the  ultimate
results of these matters cannot be predicted with certainty, management believes
that they will not have a material adverse effect on the Company's  consolidated
financial position, liquidity or results of operations.

Item 4.           Submission of Matters to a Vote of Security Holders
-------           ---------------------------------------------------

There were no matters  submitted to a vote of security holders during the fourth
quarter of fiscal 2007.

Executive Officers of the Registrant

Set forth below is certain  information  concerning  persons who are the current
executive officers of the Company.

Name              Office Held / Principal Occupation for Past Five Years    Age
----              ------------------------------------------------------    ---
James Wall        Senior Vice President of the Company since 1991;          70
                  Chairman, President and Chief Executive Officer of
                  AMREP Southwest Inc. since 1991.

Peter M. Pizza    Vice President and Chief Financial Officer of the         56
                  Company since 2001; Vice President and Controller
                  of the Company from 1997 to 2001.

Irving Needleman  Vice President, General Counsel and Secretary of the      69
                  Company since November 2006; Of counsel to the law
                  firm of McElroy, Deutsch, Mulvaney & Carpenter, LLP
                  from September 2005 to October 2006.  Partner in the
                  law firm of Jacobs Persinger & Parker for more than
                  four years prior to September 2005.

Michael P. Duloc  President and Chief Executive Officer of the Kable        50
                  Media Services since June 1, 2007: President of
                  Kable's Newsstand Distribution Services business
                  since 1996 and Chief Operating Officer of that business
                  until June 2007; President and Chief Operating Officer
                  of Kable's Fulfillment Services business from 2000 until
                  January 2007.

John Meneough     Executive Vice President, Fulfillment Services of         59
                  Kable Media Services, Inc. and President and Chief
                  Operating Officer of the Company's Fulfillment Services
                  business since January 2007.  President and Chief
                  Executive Officer of Palm Coast Data Holdco, Inc. and
                  Palm Coast Data LLC since 2002.

                                       18

The executive officers are elected or appointed by the Board of Directors of the
Company or its appropriate subsidiary to serve until the appointment or election
and  qualification  of their  successors or their earlier death,  resignation or
removal.

                                     PART II
                                     -------

Item 5.           Market for Registrant's  Common Equity,  Related Stockholder
-------           ------------------------------------------------------------
                  Matters and Issuer Purchases of Equity
                  --------------------------------------

The Company's  common stock is traded on the New York Stock  Exchange  under the
symbol "AXR". On July 1, 2007, there were approximately  1,400 holders of record
of the  common  stock.  The range of high and low sales  prices for the last two
fiscal years by quarter is presented below:

               FIRST                SECOND                  THIRD                    FOURTH
        -------------------    ------------------     --------------------     -------------------
          HIGH        LOW        HIGH       LOW         HIGH         LOW         HIGH        LOW
        -------     -------    -------    -------     --------     -------     --------    -------

2007    $ 65.00     $ 34.55    $ 73.70    $ 35.84     $ 149.99     $ 57.14     $ 111.75    $ 59.00
2006    $ 30.40     $ 21.58    $ 33.00    $ 24.00     $  33.88     $ 23.22     $  46.75    $ 27.25

Dividend Policy

On July 16,  2007,  the Board of Directors  declared a special cash  dividend of
$1.00 per common share payable on August 24, 2007 to  shareholders  of record at
the close of business on August 10, 2007. The Company has also paid special cash
dividends on its common stock following the preceding four fiscal years starting
in 2003 of $0.25,  $0.40,  $0.55 and  $0.85,  with an  additional  special  cash
dividend  of $3.50  paid in January  2006.  The Board has now  approved  special
dividends  payable on its  common  stock in the past five  fiscal  years and has
stated that it may consider special dividends from time-to-time in the future in
light of conditions then existing, including earnings, financial condition, cash
position,  and  capital  requirements  and  other  needs.  Notwithstanding  such
statement and the status of such future  conditions,  no assurance is given that
there  will be any  such  future  dividends  declared  or that  future  dividend
declarations,  if any,  will be  commensurate  in amount or frequency  with past
dividends.

Performance Graph

The following  graph compares the  cumulative  total  shareholder  return on the
Company's Common Stock with the cumulative total return of the Standard & Poor's
500  Index  ("S&P 500  Index")  and with an index  comprised  of the stock of 27
companies with market  capitalizations  similar to that of the Company ("Similar
Cap Issuers"),  for the five years ended April 30, 2007 (assuming the investment
of $100 in the  stock of the  Company,  the S&P 500 Index  and the  Similar  Cap
Issuers at the close of trading on April 30,  2002 and the  reinvestment  of all
dividends).  The  Company  cannot  identify  an  index  of  issuers  engaged  in
operations  similar to those in which it is currently  engaged and therefore has
determined to use the Similar Cap Issuers for purposes of comparison.

                                       19
```