Datasets:

todenthal
/

merged_financial_dataset

Dataset card Viewer Files Files and versions Community

Split (1)

train · 4.64M rows

text stringlengths 1.03k 343k
AMREP CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (Amounts in thousands) Year Ended April 30, ---------------------------------------------------------------- 2007 2006 2005 ------------------ ------------------- ------------------- CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 45,106 $ 26,050 $ 15,525 Adjustments to reconcile net income to net cash provided by operating activities- Depreciation and amortization 7,319 5,568 5,343 Non-cash credits and charges: Gain on disposition of assets (4,115) (5,345) - Provision for doubtful accounts (227) (104) (172) Pension accrual 26 627 303 Stock based compensation - Directors' Plan 339 441 330 Changes in assets and liabilities, excluding the effect of acquisitions: Receivables (10,901) 4,202 (8,388) Real estate inventory 1,064 6,942 (1,258) Other assets (1,852) (4,027) (2,876) Accounts payable and accrued expenses, and deferred revenue 33,156 3,400 1,499 Taxes payable (4,493) 2,328 353 Deferred income taxes 3,267 1,764 1,333 ------------------ ------------------- ------------------- Net cash provided by operating activities 68,689 41,846 11,992 ------------------ ------------------- ------------------- CASH FLOWS FROM INVESTING ACTIVITIES: Capital expenditures - property, plant, and equipment (1,797) (3,683) (3,060) Capital expenditures - investment assets (2,870) (213) (1,885) Deposit from condemnation of Utility Company - - 7,000 Proceeds from disposition of assets 6,173 4,057 190 Acquisitions, net of cash acquired (95,636) - (100) ------------------ ------------------- ------------------- Net cash provided by (used in) investing activities (94,130) 161 2,145 ------------------ ------------------- ------------------- CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from debt financing 81,255 29,162 25,596 Principal debt payments (54,973) (35,200) (26,185) Exercise of stock options 27 40 35 Cash dividends (5,648) (26,870) (2,645) ------------------ ------------------- ------------------- Net cash provided by (used in) financing activities 20,661 (32,868) (3,199) ------------------ ------------------- ------------------- INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (4,780) 9,139 10,938 CASH AND CASH EQUIVALENTS, beginning of year 46,882 37,743 26,805 ------------------ ------------------- ------------------- CASH AND CASH EQUIVALENTS, end of year $ 42,102 $ 46,882 $ 37,743 ================== =================== =================== SUPPLEMENTAL CASH FLOW INFORMATION: Interest paid - net of amounts capitalized $ 735 $ 377 $ 568 ================== =================== =================== Income taxes paid - net of refunds $ 24,261 $ 8,230 $ 6,817 ================== =================== =================== Non-cash transactions: Note payable for acquisition of distribution contracts $ - $ - $ 1,170 Foreclosure on land sale contract $ - $ 1,795 $ - Transfer of development costs from inventory to investment assets $ - $ 262 $ - ================== =================== =================== The accompanying notes to consolidated financial statements are an integral part of these consolidated financial statements.
Net periodic pension cost for 2007, 2006 and 2005 was comprised of the following components: Year Ended April 30, ----------------------------------------------------------------------- 2007 2006 2005 -------------------- --------------------- -------------------- (Thousands) Interest cost on projected benefit obligation $ 1,789 $ 1,780 $ 1,817 Expected return on assets (2,224) (1,994) (2,064) Plan expenses 180 212 124 Recognized net actuarial loss 325 629 426 -------------------- --------------------- -------------------- Total cost recognized in pretax income 70 627 303 Cost (benefit) recognized in pretax other comprehensive income (2,017) (3,173) 2,271 -------------------- --------------------- -------------------- $ (1,947) $ (2,546) $ 2,574 ==================== ===================== ==================== The estimated net loss, transition obligation and prior service cost for the plan that will be amortized from accumulated other comprehensive income into net periodic benefit cost over the next fiscal year are $149,000, $0 and $0, respectively.
Assumptions used in determining net periodic pension cost and the benefit obligations were: Year Ended April 30, ------------------------------------------------------------------------ 2007 2006 2005 -------------------- --------------------- --------------------- Discount rate 5.75% 5.75% 5.75% Expected long-term rate of return on assets 8.0% 8.0% 8.0% The following table sets forth changes in the plan's benefit obligations and assets, and summarizes components of amounts recognized in the Company's consolidated balance sheets: April 30, ------------------------------------------------------------------------ 2007 2006 2005 -------------------- --------------------- --------------------- (Thousands) Change in benefit obligation: Benefit obligation at beginning of year $ 32,159 $ 31,808 $ 30,048 Interest cost 1,789 1,780 1,817 Actuarial (gain) loss (757) 418 1,821 Benefits paid (1,908) (1,847) (1,878) -------------------- --------------------- --------------------- Benefit obligation at end of year $ 31,283 $ 32,159 $ 31,808 -------------------- --------------------- --------------------- Change in plan assets: Fair value of plan assets at beginning of year $ 28,925 $ 26,028 $ 26,842 Contributions 44 - - Actual return on plan assets 3,125 4,924 1,276 Benefits paid (1,908) (1,847) (1,878) Plan expenses (146) (180) (212) -------------------- --------------------- --------------------- Fair value of plan assets at end of year $ 30,040 $ 28,925 $ 26,028 -------------------- --------------------- --------------------- Funded status: Benefit obligation in excess of plan assets $ (1,243) $ (3,234) $ (5,780) Unrecognized net actuarial loss 4,771 6,788 9,961 -------------------- --------------------- --------------------- Net asset (liability) recognized in the balance sheets $ (3,528) $ 3,554 $ 4,181 ==================== ===================== ===================== Amounts recognized on the balance sheets: Accrued pension costs $ (1,243) $ (3,234) $ (5,780) Pre-tax accumulated comprehensive loss 4,771 6,788 9,961 -------------------- --------------------- --------------------- $ (3,528) $ 3,554 $ 4,181 ==================== ===================== ===================== Due to the adoption of SFAS No.
A summary of activity in the Company's stock option plan is as follows: Year Ended April 30, ----------------------------------------------------------------------- 2007 2006 2005 -------------------- ----------------------- ---------------------- Weighted Weighted Weighted Number Average Number Average Number Average of Exercise of Exercise of Exercise Shares Price Shares Price Shares Price ------ ----- ------ ----- ------ ----- Options outstanding at beginning of year 7,000 $ 18.56 7,000 $ 14.92 9,500 $ 9.12 Granted - - 3,000 24.88 3,000 17.55 Exercised (2,500) 15.47 (2,500) 16.13 (5,500) 6.34 Expired or canceled - - (500) 17.56 - - ----------------- ----------------- --------------- Options outstanding at end of year 4,500 $ 20.28 7,000 $ 18.56 7,000 $ 14.92 ================= ================= =============== Available for grant at end of year - - 12,000 ================= ================= =============== Options exercisable at end of year 4,500 4,000 4,000 ================= ================= =============== Range of exercise prices for options exercisable at end of year $15.19 to $24.88 $3.95 to $24.88 $3.95 to $17.55 ================= ================= =============== Options outstanding at April 30, 2007 were exercisable over a four-year period beginning one year from date of grant.
(11) INCOME TAXES: ------------- The provision for income taxes consists of the following: Year Ended April 30, ------------------------------------------------------------------------ 2007 2006 2005 -------------------- --------------------- --------------------- (Thousands) Current: Federal $ 18,228 $ 9,735 $ 5,770 State and local 1,540 823 488 -------------------- --------------------- --------------------- 19,768 10,558 6,258 -------------------- --------------------- --------------------- Deferred: Federal 2,940 1,587 928 State and local 328 176 103 -------------------- --------------------- --------------------- 3,268 1,763 1,031 -------------------- --------------------- --------------------- Total provision for income taxes $ 23,036 $ 12,321 $ 7,289 ==================== ===================== ===================== The provision for income taxes has been allocated as follows: Year Ended April 30, ------------------------------------------------------------------------ 2007 2006 2005 -------------------- --------------------- --------------------- (Thousands) Continuing operations $ 23,971 $ 10,233 $ 7,326 Discontinued operations (935) 2,088 (37) -------------------- --------------------- --------------------- Total provision for income taxes $ 23,036 $ 12,321 $ 7,289 ==================== ===================== ===================== The components of the net deferred income tax liability are as follows: April 30, ------------------------------------------ 2007 2006 ------------------ ------------------- (Thousands) Deferred income tax assets: State tax loss carryforwards $ 3,359 $ 3,844 Accrued pension costs 450 1,302 Federal NOL carryforward 2,895 - Vacation accrual 1,236 859 Other 1,097 996 ------------------ ------------------- Total deferred income tax assets 9,037 7,001 ------------------ ------------------- Deferred income tax liabilities: Real estate basis differences (2,181) (2,097) Reserve for periodical returns (1,888) (1,434) Depreciable assets (4,680) (3,485) Deferred gains on investment assets (5,150) (1,450) Capitalized costs for financial reporting purposes, expensed for tax (3,624) (4,060) ------------------ ------------------- Total deferred income tax liabilities (17,523) (12,526) ------------------ ------------------- Valuation allowance for realization of state tax loss carry forwards (2,663) (3,625) ------------------ ------------------- Net deferred income tax liability $ (11,149) $ (9,150) ================== =================== The following table reconciles taxes computed at the U.S. federal statutory income tax rate from continuing operations to the Company's actual tax provision: Year Ended April 30, ------------------------------------------------------------------------ 2007 2006 2005 -------------------- --------------------- --------------------- (Thousands) Computed tax provision at statutory rate $ 24,734 $ 11,455 $ 8,020 Increase (reduction) in tax resulting from: State income taxes, net of federal income tax effect 1,296 552 395 Real estate charitable land contribution (1,419) (1,543) (1,093) Other (640) (231) 4 -------------------- --------------------- --------------------- Actual tax provision $ 23,971 $ 10,233 $ 7,326 ==================== ===================== ===================== The Company has a federal net operating loss carryforward of approximately $8,300,000 resulting from the purchase price allocation of Palm Coast, which will begin to expire in the fiscal year ending April 30, 2024.
Summarized data relative to the industry segments in which the Company has continuing operations is as follows (amounts in thousands): Newsstand Real Estate Fulfillment Distribution Operations Services Services Corporate Consolidated ------------- ------------ ------------ ------------ ------------- Year ended April 30, 2007 (a): Revenues $ 102,848 $ 86,121 $ 14,384 $ 1,486 $ 204,839 Income from continuing operations 43,190 154 2,009 1,344 46,697 Provision (benefit) for income taxes from continuing operations 22,688 138 1,226 (81) 23,971 Interest expense (income), net (b) - 2,202 (716) (784) 702 Depreciation and amortization 201 6,160 953 5 7,319 ------------- ------------ ------------ ------------ ------------- EBITDA (c) $ 66,079 $ 8,654 $ 3,472 $ 484 $ 78,689 ------------- ------------ ------------ ------------ ------------- Goodwill $ - $ 50,441 $ 3,893 $ - $ 54,334 Total assets $ 88,756 $ 142,563 $ 39,214 $ 22,126 $ 292,659 Capital expenditures $ 2,871 $ 1,779 $ - $ 17 $ 4,667 ---------------------------------------------------------------------------------------------------------------------------- Year ended April 30, 2006 (a): Revenues $ 59,169 $ 75,332 $ 13,131 $ 664 $ 148,296 Income from continuing operations 18,856 2,289 1,113 236 22,494 Provision (benefit) for income taxes from continuing operations 8,412 1,388 692 (259) 10,233 Interest expense (income), net (b) - 452 (108) - 344 Depreciation and amortization 235 4,552 749 32 5,568 ------------- ------------ ------------ ------------ ------------- EBITDA (c) $ 27,503 $ 8,681 $ 2,446 $ 9 $ 38,639 ------------- ------------ ------------ ------------ ------------- Goodwill $ - $ 1,298 $ 3,893 $ - $ 5,191 Total assets $ 80,456 $ 44,359 $ 32,631 $ 31,595 $ 189,041 Capital expenditures $ 252 $ 3,500 $ 140 $ 4 $ 3,896 ---------------------------------------------------------------------------------------------------------------------------- Year ended April 30, 2005 (a): Revenues $ 37,385 $ 83,896 $ 13,017 $ 208 $ 134,506 Income from continuing operations 10,933 3,957 769 (71) 15,588 Provision (benefit) for income taxes from continuing operations 4,552 2,372 482 (80) 7,326 Interest expense, net (b) 5 555 47 53 660 Depreciation and amortization 188 4,403 575 177 5,343 ------------- ------------ ------------ ----------- ------------- EBITDA (c) $ 15,678 $ 11,287 $ 1,873 $ 79 $ 28,917 ------------- ------------ ------------ ----------- ------------- Goodwill $ - $ 1,298 $ 3,893 $ - $ 5,191 Total assets $ 75,571 $ 43,216 $ 42,574 $ 32,948 $ 194,309 Capital expenditures $ 1,913 $ 3,018 $ - $ 14 $ 4,945 (a) Segment information reported above does not include net income (loss) from discontinued operations of ($1,591,000) in 2007, $3,556,000 in 2006 and ($63,000) in 2005.
(18) SELECTED QUARTERLY FINANCIAL DATA (Unaudited): ----------------------------------------------- (In thousands of dollars, except per share amounts) Quarter Ended --------------------------------------------------------------- Year ended April 30, 2007: July 31, October 31, January 31, April 30, 2006 2006 2007 2007 -------------- --------------- -------------- -------------- Revenues $ 58,269 $ 56,055 $ 42,189 $ 48,326 Gross Profit 28,313 29,150 14,948 14,636 Income from continuing operations 15,804 16,062 6,930 7,901 -------------- --------------- -------------- -------------- Loss from operations of discontinued business, net of taxes - - - (1,591) -------------- --------------- -------------- -------------- Net income $ 15,804 $ 16,062 $ 6,930 $ 6,310 ============== =============== ============== ============== Earnings per share - Basic and Diluted: (a) Continuing operations $ 2.38 $ 2.42 $ 1.04 $ 1.19 Discontinued operations - - - (0.24) -------------- --------------- -------------- -------------- Total $ 2.38 $ 2.42 $ 1.04 $ 0.95 ============== =============== ============== ============== Year ended April 30, 2006: July 31, October 31, January 31, April 30, 2005 2005 2006 2006 -------------- --------------- -------------- -------------- Revenues $ 30,014 $ 34,847 $ 35,589 $ 47,846 Gross Profit 6,437 10,698 9,671 19,688 Income from continuing operations 1,802 5,062 5,241 10,389 -------------- --------------- -------------- -------------- Income (loss) from operations of discontinued business, net of taxes 3,562 (6) - - -------------- --------------- -------------- -------------- Net income $ 5,364 $ 5,056 $ 5,241 $ 10,389 ============== =============== ============== ============== Earnings per share - Basic and Diluted: (a) Continuing operations $ 0.27 $ 0.76 $ 0.79 $ 1.56 Discontinued operations 0.54 - - - -------------- --------------- -------------- -------------- Total $ 0.81 $ 0.76 $ 0.79 $ 1.56 ============== =============== ============== ============== (a) The sum of the quarters does not equal the full year earnings per share due to rounding.
/s/ Peter M. Pizza /s/ Albert V. Russo ------------------------- -------------------------- Peter M. Pizza Albert V. Russo Vice President and Chief Financial Director Officer Principal Financial Dated: July 16, 2007 Officer and Principal Accounting Officer* Dated: July 16, 2007 /s/ Edward B. Cloues II /s/ Samuel N. Seidman ------------------------ -------------------------- Edward B. Cloues II Samuel N. Seidman Director Director Dated: July 16, 2007 Dated: July 16, 2007 /s/ Lonnie A. Coombs /s/ James Wall ------------------------ -------------------------- Lonnie A. Coombs James Wall Director Director* Dated: July 16, 2007 Dated: July 16, 2007 /s/ Nicholas G. Karabots /s/ Jonathan B, Weller ------------------------ -------------------------- Nicholas G. Karabots Jonathan B, Weller Director Director Dated: July 16, 2007 Dated: July 16, 2007 /s/ Michael P. Duloc -------------------------- Michael P. Duloc President, Kable Media Services, Inc.* Dated: July 16, 2007 ----------------- *The Registrant is a holding company that does substantially all of its business through two indirect wholly-owned subsidiaries (and their subsidiaries).
AMREP CORPORATION AND SUBSIDIARIES ---------------------------------- SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS ----------------------------------------------- (Thousands) Additions Charges Charged Balance at (Credits) to (Credited) to Beginning Costs and Other Balance at End Description of Period Expenses Accounts Deductions of Period ----------- --------------- --------------- ---------------- -------------- -------------- FOR THE YEAR ENDED APRIL 30, 2007: Allowance for doubtful accounts (included in receivables - real estate operations on the consolidated balance sheet) $ 96 $ - $ - $ 48 $ 48 --------------- --------------- ---------------- -------------- -------------- Allowance for estimated returns and doubtful accounts (included in receivables - magazine circulation operations on the consolidated balance sheet) $ 55,606 $ (1,447) $ - $ 553 $ 53,606 --------------- --------------- ---------------- -------------- -------------- FOR THE YEAR ENDED APRIL 30, 2006: Allowance for doubtful accounts (included in receivables - real estate operations on the consolidated balance sheet) $ 96 $ - $ - $ - $ 96 --------------- --------------- ---------------- -------------- -------------- Allowance for estimated returns and doubtful accounts (included in receivables - magazine circulation operations on the consolidated balance sheet) $ 59,165 $ (3,483) $ - $ 76 $ 55,606 --------------- --------------- ---------------- -------------- -------------- FOR THE YEAR ENDED APRIL 30, 2005: Allowance for doubtful accounts (included in receivables - real estate operations on the consolidated balance sheet) $ 192 $ - $ - $ 96 $ 96 --------------- --------------- ---------------- -------------- -------------- Allowance for estimated returns and doubtful accounts (included in receivables - magazine circulation operations on the consolidated balance sheet) $ 55,620 $ 3,825 $ - $ 280 $ 59,165 --------------- --------------- ---------------- -------------- -------------- Note: Charges (credits) recorded in magazine circulation operations include a reserve for the estimate of magazine returns from wholesalers, which are substantially offset by offsetting credits related to the return of these magazines to publishers.
The effect of an increase or decrease in the Company's estimated rate of returns of 1% during any period would be dependent upon the mix of magazines involved and the related selling prices and commission rates, but would generally result in a change in that period's net commission revenues of approximately $125,000; (ii) management determines the allowance for doubtful accounts by attempting to identify troubled accounts by analyzing the credit risk of specific customers and by using historical experience applied to the aging of accounts and, where appropriate within the real estate business, by reviewing any collateral which may secure a receivable; (iii) real estate development costs are incurred throughout the life of a project, and the costs of initial sales from a project frequently must include a portion of costs that have been budgeted based on engineering estimates or other studies, but not yet incurred; (iv) percentage-of-completion revenue recognition for certain construction contracts is based on the percentage of total costs incurred to date in proportion to total estimated costs to complete the contract.
(11) INCOME TAXES: ------------- The provision for income taxes consists of the following: The provision for income taxes has been allocated as follows: The components of the net deferred income tax liability are as follows: April 30, -------------------------------- 2006 2005 ------------ ------------- (Thousands) Deferred income tax assets- State tax loss carryforwards $ 3,844 $ 4,902 Accrued pension costs 1,302 2,316 Other 1,855 1,562 ------------- ------------- Total deferred income tax assets 7,001 8,780 ------------- ------------- Deferred income tax liabilities- Real estate basis differences (2,097) (2,022) Reserve for periodical returns (1,434) (1,470) Depreciable assets (3,485) (3,369) Deferred condemnation gain (1,450) - Capitalized costs for financial reporting purposes, expensed for tax (4,060) (3,281) -------------- ------------- Total deferred income tax liabilities (12,526) (10,142) -------------- ------------- Valuation allowance for realization of state tax loss carry forwards (3,625) (4,755) -------------- ------------- Net deferred income tax liability $ (9,150) $ (6,117) ============== ============= The following table reconciles taxes computed at the U.S. federal statutory income tax rate from continuing operations to the Company's actual tax provision (benefit): (12) SHAREHOLDERS' EQUITY: --------------------- The Company recorded other comprehensive income (loss) of $1,904,000 in 2006, ($1,362,000) in 2005 and $1,420,000 in 2004 to account for the net effect of changes to the unfunded pension liability (see note 10).
/s/ Peter M. Pizza /s/ Nicholas G. Karabots - ------------------------- -------------------------- Peter M. Pizza Nicholas G. Karabots Vice President and Chief Financial Director Officer Principal Financial Dated: July 27, 2006 Officer and Principal Accounting Officer* Dated: July 27, 2006 /s/ Edward B. Cloues II /s/ Albert V. Russo - ------------------------ -------------------------- Edward B. Cloues II Albert V. Russo Director Director Dated: July 27, 2006 Dated: July 27, 2006 /s/ Lonnie A. Coombs /s/ Samuel N. Seidman - ------------------------ -------------------------- Lonnie A. Coombs Samuel N. Seidman Director Director Dated: July 27, 2006 Dated: July 27, 2006 /s/ Elmer F. Hansen, Jr /s/ James Wall - ------------------------ -------------------------- Elmer F. Hansen, Jr. James Wall Director Director* Dated: July 27, 2006 Dated: July 27, 2006 /s/ Michael P. Duloc -------------------------- Michael P. Duloc President, Kable Media Services, Inc.* Dated: July 27, 2006 - ----------------- *The Registrant is a holding company which does substantially all of its business through two wholly-owned subsidiaries (and their subsidiaries).
Certain of the most critical assumptions made in arriving at these accounting estimates are based on the following considerations: (i) distribution revenues represent commissions earned from the distribution of publications for client publishers which are recorded at the time the publications go on sale; however, since such publications are generally sold on a fully returnable basis, management also provides for estimated returns by charges to income which are determined on an issue by issue basis utilizing sales information and other relevant data, including publisher and like-title history; (ii) management determines the allowance for doubtful accounts by attempting to identify troubled accounts by analyzing the credit risk of specific customers and by using historical experience applied to the aging of accounts and, where appropriate within the real estate business, by reviewing any collateral which may secure a receivable; (iii) real estate development costs are incurred throughout the life of a project, and the costs of initial sales from a project frequently must include a portion of costs that have been budgeted based on engineering estimates or other studies, but not yet incurred; (iv) asset impairment determinations (including that of goodwill) are based upon the intended use of assets and expected future cash flows; (v) pension plan accounting and disclosure is based upon numerous assumptions and estimates, including the expected rate of investment return on retirement plan assets, the interest rate used to determine the present value of liabilities (the discount rate), and certain employee-related factors such as turnover, retirement age and mortality; and (vi) the Company is currently involved in one significant legal proceeding, which is described in Item 3 of this annual report on Form 10-K and which could have a material adverse effect if decided against the Company, and several routine matters.
A wide range of factors could materially affect the Company's future performance and financial and competitive position, including the following: (i) the level of demand for land in Rio Rancho, New Mexico, the principal market in which the Company's real estate subsidiary sells land; (ii) the possibility of further adverse changes in the magazine distribution system for magazines that the Company's Kable distribution subsidiary distributes, including the financial failure of a major wholesaler; (iii) the existing United Magazine lawsuit described in Item 3 of this Form 10-K and possible future litigation and governmental proceedings; (iv) the availability of financing and financial resources in the amounts, at the times and on the terms required to support the Company's future business, including possible acquisitions; (v) changes in U.S. financial markets, including significant interest rate fluctuations; (vi) the failure to carry out marketing and sales plans; (vii) the effect of or the failure to successfully complete various internal computer system enhancements in process and intended to integrate the systems of the subscription fulfillment business acquired in April 2003 and described in note 12 to the consolidated financial statements, or other acquired businesses, if any, into the Company without substantial costs, delays or other operational or financial problems; (viii) the ability to renew customer contracts within the magazine service operations business segments on favorable terms and conditions; and (ix) changes in economic or business conditions, including general economic and business conditions that are less favorable than expected.
/s/Peter M. Pizza /s/Nicholas G. Karabots - ----------------- ----------------------- Peter M. Pizza Nicholas G. Karabots Vice President and Chief Financial Officer Director Principal Financial Officer Dated: July 28, 2005 and Principal Accounting Officer* Dated: July 28, 2005 /s/Jerome Belson /s/Albert V. Russo - ---------------- ------------------- Jerome Belson Albert V. Russo Director Director Dated: July 28, 2005 Dated: July 28, 2005 /s/Edward B. Cloues II /s/Samuel N. Seidman - ---------------------- -------------------- Edward B. Cloues II Samuel N. Seidman Director Director Dated: July 28, 2005 Dated: July 28, 2005 /s/Lonnie A. Coombs /s/James Wall - ------------------- ------------- Lonnie A. Coombs James Wall Director Director* Dated: July 28, 2005 Dated: July 28, 2005 /s/Michael P. Duloc ------------------- Michael P. Duloc President, Kable Media Sevices, Inc.* Dated: July 28, 2005 - ----------------- *The Registrant is a holding company which does substantially all of its business through two wholly-owned subsidiaries (and their subsidiaries).
Accordingly, management provides for estimated returns by charges to income which are determined on an issue by issue basis utilizing sales information and other relevant data, including publisher and like-title history; (ii) management determines the allowance for doubtful accounts by attempting to identify troubled accounts by analyzing the credit risk of specific customers and by using historical experience applied to the aging of accounts and, where appropriate within the real estate business, by reviewing any collateral which may secure a receivable; (iii) real estate development costs are incurred throughout the life of a project, and the costs of initial sales from a project frequently must include a portion of costs that have been budgeted based on engineering estimates or other studies, but not yet incurred; (iv) asset impairment determinations (including that of goodwill) are based upon the intended use of assets and expected future cash flows; (v) pension plan accounting and disclosure is based upon numerous assumptions and estimates, including the expected rate of investment return on retirement plan assets, the interest rate used to determine the present value of liabilities (the discount rate), and certain employee-related factors such as turnover, retirement age and mortality; and (vi) the Company is currently involved in one significant legal proceeding which is described in Item 3 of this annual report on Form 10-K which could have a material adverse effect if decided against the Company, and several routine matters.
A wide range of factors could materially affect the Company's future performance and financial and competitive position, including the following: (i) the level of demand for land in Rio Rancho, New Mexico, the principal market in which the Company's real estate subsidiary sells land; (ii) the possibility of further adverse changes in the magazine distribution system for magazines which the Company's Kable distribution subsidiary distributes, including the financial failure of a major wholesaler; (iii) the existing United Magazine lawsuit described in Item 3 of this Form 10-K and possible future litigation and governmental proceedings; (iv) the availability of financing and financial resources in the amounts, at the times and on the terms required to support the Company's future business, including possible acquisitions; (v) changes in U.S. financial markets, including significant interest rate fluctuations; (vi) the failure to carry out marketing and sales plans; (vii) the effect of or the failure to successfully integrate the acquisition of the subscription fulfillment business completed in April 2003 and described in note 2 to the consolidated financial statements, or other acquired businesses, if any, into the Company without substantial costs, delays or other operational or financial problems; (viii) the ability to renew customer contracts within the magazine operations business segments on favorable terms and conditions; and (ix) changes in economic or business conditions, including general economic and business conditions that are less favorable than expected.
/s/McGladrey & Pullen, LLP - -------------------------- Davenport, Iowa June 9, 2004 AMREP CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS APRIL 30, 2004 AND 2003 (Dollar amounts in thousands) ASSETS 2004 2003 ------ ---------------- ----------------- CASH AND CASH EQUIVALENTS $ 26,805 $ 16,443 RECEIVABLES, net: Magazine operations 42,768 36,464 Real estate operations 6,297 5,970 ---------------- ----------------- 49,065 42,434 REAL ESTATE INVENTORY 58,221 63,084 PROPERTY, PLANT AND EQUIPMENT, net 21,299 22,487 OTHER ASSETS, net of accumulated amortization 10,584 9,911 GOODWILL 5,191 5,191 ---------------- ----------------- TOTAL ASSETS $ 171,165 $ 159,550 ================ ================= LIABILITIES AND SHAREHOLDERS' EQUITY ------------------------------------ ACCOUNTS PAYABLE AND ACCRUED EXPENSES $ 41,931 $ 38,101 NOTES PAYABLE: Amounts due within one year 1,830 4,124 Amounts subsequently due 10,813 14,303 ---------------- ----------------- 12,643 18,427 TAXES PAYABLE 1,867 605 DEFERRED INCOME TAXES 5,996 1,506 ACCRUED PENSION COST 3,206 7,083 ---------------- ----------------- TOTAL LIABILITIES 65,643 65,722 ---------------- ----------------- SHAREHOLDERS' EQUITY: Common stock, $.10 par value; shares authorized - 20,000,000; shares issued - 7,409,204 at April 30, 2004 and 7,406,704 at April 30, 2003 741 741 Capital contributed in excess of par value 45,133 44,992 Retained earnings 69,815 59,786 Accumulated other comprehensive loss, net ( 4,614) ( 6,034) Treasury stock, at cost ( 5,553) ( 5,657) ---------------- ----------------- TOTAL SHAREHOLDERS' EQUITY 105,522 93,828 ---------------- ----------------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 171,165 $ 159,550 ================ ================= The accompanying notes to consolidated financial statements are an integral part of these consolidated balance sheets.
AMREP CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (Amounts in thousands, except per share amounts) Year Ended April 30, ------------------------------------------------------- 2004 2003 2002 --------------- --------------- ---------------- REVENUES: Magazine operations $ 99,791 $ 54,058 $ 49,248 Real estate operations- Land sales 28,012 15,965 30,228 Home sales - - 635 --------------- --------------- ---------------- 28,012 15,965 30,863 Interest and other operations 3,304 3,768 3,294 --------------- --------------- ---------------- 131,107 73,791 83,405 --------------- --------------- ---------------- COSTS AND EXPENSES: Operating expenses- Magazine operations 83,020 42,527 38,643 Real estate commissions and selling 923 836 978 Other operations 2,361 2,548 2,635 Real estate cost of sales- Land sales 13,634 7,365 22,894 Home sales - - 704 General and administrative- Magazine operations 8,801 6,962 6,914 Real estate operations and corporate 2,894 3,114 3,209 Interest, net 944 582 1,265 --------------- --------------- ---------------- 112,577 63,934 77,242 --------------- --------------- ---------------- INCOME BEFORE INCOME TAXES 18,530 9,857 6,163 PROVISION FOR INCOME TAXES 6,853 3,584 2,465 --------------- --------------- ---------------- NET INCOME $ 11,677 $ 6,273 $ 3,698 =============== =============== ================ EARNINGS PER SHARE - BASIC AND DILUTED $ 1.77 $ 0.95 $ 0.56 =============== =============== ================ WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING 6,595 6,580 6,574 =============== =============== ================ The accompanying notes to consolidated financial statements are an integral part of these consolidated statements.
(9) INCOME TAXES: ------------- The provision (benefit) for income taxes consists of the following: Year Ended April 30, ----------------------------------------- 2004 2003 2002 ----------- ------------ ------------ (Thousands) Current: Federal $ 2,961 $ 2,335 $ (76) State and local 350 316 (173) ----------- ------------ ------------ 3,311 2,651 (249) ----------- ------------ ------------ Deferred: Federal 3,011 793 2,317 State and local 531 140 397 ----------- ------------ ------------ 3,542 933 2,714 ----------- ------------ ------------ Total provision for income taxes $ 6,853 $ 3,584 $ 2,465 =========== ============ ============ The components of the net deferred income tax liability are as follows: The following table reconciles taxes computed at the U.S. federal statutory income tax rate to the Company's actual tax provision (benefit): Year Ended April 30, ---------------------------------- 2004 2003 2002 ---------- ---------- ---------- (Thousands) Computed tax provision at statutory rate $ 6,300 $ 3,351 $ 2,095 Increase (reduction) in tax resulting from: State income taxes, net of federal income tax effect 741 394 308 Other, primarily permanent differences (188) (161) 62 ---------- ---------- ---------- Actual tax provision $ 6,853 $ 3,584 $ 2,465 ========== ========== ========== (10) SHAREHOLDERS' EQUITY: --------------------- The Company recorded other comprehensive income (loss) of $1.4 million and ($6.0) million 2004 and 2003, respectively, to account for the net effect of the unfunded minimum pension liability (see note 8).
/s/Peter M. Pizza /s/Nicholas G. Karabots - ----------------- ----------------------- Peter M. Pizza Nicholas G. Karabots Vice President and Chief Financial Officer Director Principal Financial Officer Dated: July 23, 2004 and Principal Accounting Officer* Dated: July 23, 2004 /s/Jerome Belson /s/Albert V. Russo - ---------------- ------------------- Jerome Belson Albert V. Russo Director Director Dated: July 23, 2004 Dated: July 23, 2004 /s/Edward B. Cloues II /s/Samuel N. Seidman - ---------------------- -------------------- Edward B. Cloues II Samuel N. Seidman Director Director Dated: July 23, 2004 Dated: July 23, 2004 /s/Lonnie A. Coombs /s/James Wall - ------------------- ------------- Lonnie A. Coombs James Wall Director Director* Dated: July 23, 2004 Dated: July 23, 2004 /s/Michael P. Duloc ------------------- Michael P. Duloc President, Kable News Company, Inc.* Dated: July 23, 2004 - ----------------- *The Registrant is a holding company which does substantially all of its business through two wholly-owned subsidiaries (and their subsidiaries).
A wide range of factors could materially affect the Company's future performance and financial and competitive position, including the following: (i) the level of demand for land in Rio Rancho, the principal market in which the Company's real estate subsidiary sells land; (ii) the possibility of further adverse changes in the magazine distribution system for magazines which the Company's Kable distribution subsidiary distributes, including the financial failure of a major wholesaler; (iii) the existing United Magazine lawsuit described in Item 3 of this Form 10-K and possible future litigation and governmental proceedings; (iv) the availability of financing and financial resources in the amounts, at the times and on the terms required to support the Company's future business, including possible acquisitions; (v) changes in U.S. financial markets, including significant interest rate fluctuations; (vi) the failure to carry out marketing and sales plans; (vii) the effect of or the failure to successfully integrate the acquisition of the subscription fulfillment business completed in April 2003 and described in Note 2 to the financial statements, or other acquired businesses, if any, into the Company without substantial costs, delays or other operational or financial problems; (viii) the ability to renew customer contracts within the magazine operations business segments on favorable terms and conditions; and (ix) changes in economic or business conditions, including general economic and business conditions that are less favorable than expected.
Accordingly, management provides for estimated returns by charges to income which are determined on an issue by issue basis utilizing sales information and other relevant data, including publisher and like-title history; (ii) management determines the allowance for doubtful accounts by attempting to identify troubled accounts by analyzing the credit risk of specific customers and by using historical experience applied to the aging of accounts and, where appropriate within the real estate business, by reviewing any collateral which may secure a receivable; (iii) real estate development costs are incurred throughout the life of a project, and the costs of initial sales from a project frequently must include a portion of costs that have been budgeted based on engineering estimates or other studies, but not yet incurred: (iv) asset impairment determinations (including that of goodwill) are based upon the intended use of assets and expected future cash flows; (v) pension plan accounting and disclosure is based upon numerous assumptions and estimates, including the expected rate of investment return on retirement plan assets, the interest rate used to determine the present value of liabilities (the discount rate), the rate of salary increases for employees and certain employee-related factors, such as turnover, retirement age and mortality; and (vi) the Company is currently involved in one legal proceeding which is described in Item 3 of the Form 10-K, and several other routine matters.
ARTHUR ANDERSEN LLP Albuquerque, New Mexico August 13, 2001 AMREP CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS APRIL 30, 2003 AND 2002 (Dollar amounts in thousands) ASSETS 2003 2002 ------ ----------- ----------- CASH AND CASH EQUIVALENTS $ 16,443 $ 15,744 RECEIVABLES, net: Magazine operations 36,464 34,849 Real estate operations 5,830 6,630 ----------- ----------- 42,294 41,479 REAL ESTATE INVENTORY 63,084 62,296 PROPERTY, PLANT AND EQUIPMENT, net 16,614 9,890 ASSETS HELD FOR SALE- NET 5,819 5,853 OTHER ASSETS, net of accumulated amortization 9,901 9,235 GOODWILL 5,191 5,191 ------------ ----------- TOTAL ASSETS $ 159,346 $ 149,688 ============ =========== LIABILITIES AND SHAREHOLDERS' EQUITY ------------------------------------ ACCOUNTS PAYABLE AND ACCRUED EXPENSES $ 37,897 $ 33,867 NOTES PAYABLE: Amounts due within one year 4,124 3,383 Amounts subsequently due 14,303 13,236 ------------ ------------ 18,427 16,619 TAXES PAYABLE 605 1,127 DEFERRED INCOME TAXES 1,506 4,596 ACCRUED PENSION COST 7,083 - ------------ ------------ TOTAL LIABILITIES 65,518 56,209 ------------ ------------ SHAREHOLDERS' EQUITY: Common stock, $.10 par value; shares authorized--20,000,000; shares issued - 7,406,704 at April 30, 2003 and 7,399,704 at April 30, 2002 741 740 Capital contributed in excess of par value 44,992 44,935 Retained earnings 59,786 53,513 Accumulated other comprehensive loss, net ( 6,034) - Treasury stock, at cost ( 5,657) ( 5,709) ------------ ------------ TOTAL SHAREHOLDERS' EQUITY 93,828 93,479 ------------ ------------ TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 159,346 $ 149,688 ============ ============ The accompanying notes to consolidated financial statements are an integral part of these consolidated balance sheets.
(9) INCOME TAXES: ------------ The provision (benefit) for income taxes consists of the following: Year Ended April 30, ----------------------------------------- 2003 2002 2001 ----------- ------------ ------------ (Thousands) Current: Federal $ 2,335 $ (76) $ (3,290) State and local 316 (173) 8 ----------- ------------ ------------ 2,651 (249) (3,282) ----------- ------------ ------------ Deferred: Federal 793 2,317 (847) State and local 140 397 102 ----------- ------------ ------------ 933 2,714 (745) ----------- ------------ ------------ Total provision (benefit) for income taxes $ 3,584 $ 2,465 $ (4,027) =========== ============ ============ The components of the net deferred income tax liability are as follows: The following table reconciles taxes computed at the U.S. federal statutory income tax rate to the Company's actual tax provision (benefit): Year Ended April 30, ---------------------------------- 2003 2002 2001 ---------- ---------- ---------- (Thousands) Computed tax provision at statutory rate $ 3,351 $ 2,095 $ (500) Increase (reduction) in tax resulting from: State income taxes, net of federal income tax effect 394 308 73 Net reduction in tax liability as a result of IRS settlement - - (3,500) Other, primarily permanent differences (161) 62 (100) ---------- ---------- ---------- Actual tax provision (benefit) $ 3,584 $ 2,465 $ (4,027) ========== ========== ========== The benefit for income taxes in 2001 includes a component of $3.5 million resulting from the settlement of Internal Revenue Service examinations for the years 1993 and 1994 at an amount less than that which the Company had previously accrued on account thereof.
/s/Peter M. Pizza /s/Nicholas G. Karabots - ----------------- ----------------------- Peter M. Pizza Nicholas G. Karabots Vice President, Director Principal Financial Officer Dated: July 24, 2003 and Principal Accounting Officer* Dated: July 24, 2003 /s/Jerome Belson /s/Albert V. Russo - ---------------- ------------------- Jerome Belson Albert V. Russo Director Director Dated: July 24, 2003 Dated: July 24, 2003 /s/Edward B. Cloues II /s/Samuel N. Seidman - ---------------------- -------------------- Edward B. Cloues II Samuel N. Seidman Director Director Dated: July 24, 2003 Dated: July 24, 2003 /s/Lonnie A. Coombs /s/James Wall - ------------------- ------------- Lonnie A. Coombs James Wall Director Director* Dated: July 24, 2003 Dated: July 24, 2003 /s/Michael P. Duloc ------------------- Michael P. Duloc President, Kable News Company, Inc.* Dated: July 24, 2003 _________________ *The Registrant is a holding company which does substantially all of its business through two wholly-owned subsidiaries (and their subsidiaries).
A wide range of factors could materially affect the Company's future performance and financial and competitive position, including the following: (i) the level of demand for land in Rio Rancho and the other markets in which the Company sells land; (ii) the possibility of further adverse changes in the magazine distribution system for magazines which the Company distributes, including the financial failure of a major wholesaler; (iii) the existing United Magazine and Northeast Sort lawsuits described in Item 3 of this Form 10-K and possible future litigation and governmental proceedings; (iv) the availability of financing and financial resources in the amounts, at the times and on the terms required to support the Company's future business, including possible acquisitions; (v) changes in U.S. financial markets, including significant interest rate fluctuations; (vi) the failure to carry out marketing and sales plans; (vii) the failure to successfully integrate acquired business, if any, into the Company without substantial costs, delays or other operational or financial problems; and (viii) changes in economic or business conditions, including general economic and business conditions that are less favorable than expected.
/s/ARTHUR ANDERSEN LLP Albuquerque, New Mexico August 13, 2001 AMREP CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS APRIL 30, 2002 AND 2001 (Dollar amounts in thousands) ASSETS 2002 2001 ------ ---------- ---------- CASH AND CASH EQUIVALENTS $ 15,744 $ 15,941 RECEIVABLES, net: Real estate operations 6,630 7,070 Magazine circulation operations 34,849 37,533 ---------- ---------- 41,479 44,603 REAL ESTATE INVENTORY 62,296 73,347 PROPERTY, PLANT AND EQUIPMENT, at historical cost, net of accumulated depreciation and amortization 9,890 14,314 ASSETS HELD FOR SALE- NET 5,853 - OTHER ASSETS, net of accumulated amortization 9,235 11,448 EXCESS OF COST OF SUBSIDIARY OVER NET ASSETS ACQUIRED 5,191 5,191 ---------- ---------- TOTAL ASSETS $ 149,688 $ 164,844 ========== ========== LIABILITIES AND SHAREHOLDERS' EQUITY ------------------------------------ ACCOUNTS PAYABLE AND ACCRUED EXPENSES $ 33,867 $ 27,326 NOTES PAYABLE: Amounts due within one year 3,383 9,490 Amounts subsequently due 13,236 34,770 ---------- ---------- 16,619 44,260 TAXES PAYABLE 1,127 1,595 DEFERRED INCOME TAXES 4,596 1,882 ---------- ---------- TOTAL LIABILITIES 56,209 75,063 ---------- ---------- COMMITMENTS AND CONTINGENCIES (Notes 10 and 11) SHAREHOLDERS' EQUITY: Common stock, $.10 par value; shares authorized--20,000,000; shares issued - 7,399,704 740 740 Capital contributed in excess of par value 44,935 44,935 Retained earnings 53,513 49,815 Treasury stock, at cost; 826,092 share (5,709) (5,709) ---------- ---------- TOTAL SHAREHOLDERS' EQUITY 93,479 89,781 ---------- ---------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 149,688 $ 164,844 ========== ========== The accompanying notes to consolidated financial statements are an integral part of these consolidated balance sheets.
Net periodic pension cost (income) for 2002, 2001 and 2000 was comprised of the following components: The following table sets forth changes in the plan's benefit obligations and assets, and summarizes components of amounts recognized in the Company's consolidated balance sheets: April 30, ------------------------------- 2002 2001 ------------- -------------- (Thousands) Change in benefit obligations: Benefit obligation at beginning of year $ 24,621 $ 21,437 Service cost (excluding expense component) 433 441 Interest cost 1,766 1,738 Actuarial (gain) loss 651 2,749 Benefits paid (1,638) (1,744) ------------- -------------- Benefit obligation at end of year $ 25,833 $ 24,621 ============= ============== Change in plan assets: Fair value of plan assets at beginning of year $ 28,411 $ 29,240 Actual return on plan assets (98) 1,052 Employer contribution - - Benefits paid (1,638) (1,744) Expenses (117) (137) ------------- -------------- Fair value of plan assets at end of year $ 26,558 $ 28,411 ============= ============== Funded status $ 725 $ 3,790 Unrecognized net actuarial (gain) loss 4,740 1,516 Unrecognized prior service cost (2,331) (2,683) ------------- -------------- Prepaid pension cost $ 3,134 $ 2,623 ============= ============== Savings plan ------------ The Company has a savings plan to which the Company makes contributions.
(8) INCOME TAXES: ------------- The provision (benefit) for income taxes consists of the following: Year Ended April 30, ----------------------------------------- 2002 2001 2000 ----------- ------------ ------------ (Thousands) Current: Federal $ (76) $ (3,290) $ (833) State and local (173) 8 - ----------- ------------ ------------ (249) (3,282) (833) ----------- ------------ ------------ Deferred: Federal 2,317 (847) 1,341 State and local 397 102 271 ----------- ------------ ------------ 2,714 (745) 1,612 ----------- ------------ ------------ Total provision (benefit) for income taxes $ 2,465 $ (4,027) $ 779 =========== ============ ============ The components of the net deferred income tax liability are as follows: April 30, ----------------------- 2002 2001 --------- --------- (Thousands) Deferred income tax assets- State tax loss carryforwards $ 4,500 $ 4,732 Real estate inventory valuation 602 623 Interest payable on tax settlements - 622 Other 585 1,323 --------- --------- Total deferred income tax assets 5,687 7,300 --------- --------- Deferred income tax liabilities- Real estate basis differences (1,238) (683) Reserve for periodicals and paperbacks (862) (709) Depreciable assets (2,413) (1,675) Differences related to timing of partnership income - (142) Capitalized costs for financial reporting purposes, expensed for tax (1,388) (1,358) --------- --------- Total deferred income tax liabilities (5,901) (4,567) --------- --------- Valuation allowance for realization of state tax loss carryforwards (4,382) (4,615) --------- --------- Net deferred income tax liability $(4,596) $(1,882) ========= ========= The following table reconciles taxes computed at the U.S. federal statutory income tax rate to the Company's actual tax provision (benefit): Year Ended April 30, ---------------------------------- 2002 2001 2000 ---------- ---------- ---------- (Thousands) Computed tax provision at statutory rate $ 2,095 $ (500) $ 662 Increase (reduction) in tax resulting from: State income taxes, net of federal income tax effect 308 73 126 Net reduction in tax liability as a result of IRS settlement - (3,500) - Nondeductible meals and entertainment 44 57 71 Other 18 (157) (80) ---------- ---------- ---------- Actual tax provision (benefit) $ 2,465 $ (4,027) $ 779 ========== ========== ========== The benefit for income taxes in 2001 includes a component of $3.5 million resulting from the settlement of Internal Revenue Service examinations for the years 1993 and 1994 at an amount less than that which the Company had previously accrued on account thereof.
A wide range of factors could materially affect future developments and performance of the Company, including the following: (i) the level of demand for land in the markets in which the Company sells land; (ii) the possibility of further adverse changes in the magazine distribution system for magazines which the Company distributes; (iii) possible future litigation and governmental proceedings; (iv) the availability of financing and financial resources in the amounts, at the times and on the terms required to support the Company's future business, including possible acquisitions; (v) changes in U.S. financial markets, including significant interest rate fluctuations; (vi) the failure to carry out marketing and sales plans; (vii) the failure to successfully integrate acquired business, if any, into the Company without substantial costs, delays or other operational or financial problems; and (viii) changes in economic or business conditions, including general economic and business conditions that are less favorable than expected.
AMREP CORPORATION AND SUBSIDIARIES ---------------------------------- CONSOLIDATED BALANCE SHEETS (Page 2 of 2) ----------------------------------------- APRIL 30, 2000 AND 1999 ----------------------- (Dollar amounts in thousands, except par value) LIABILITIES AND SHAREHOLDERS' EQUITY 2000 1999 ---------- ---------- ACCOUNTS PAYABLE, DEPOSITS AND ACCRUED EXPENSES $ 25,920 $ 36,182 NOTES PAYABLE: Amounts due within one year 15,599 26,769 Amounts subsequently due 31,312 47,896 ---------- ---------- 46,911 74,665 TAXES PAYABLE: Amounts due (receivable) within one year (1,002) 2,513 Amounts subsequently due (including interest) 5,999 11,825 ---------- ---------- 4,997 14,338 DEFERRED INCOME TAXES 2,627 1,015 ---------- ---------- TOTAL LIABILITIES 80,455 126,200 ---------- ---------- COMMITMENTS AND CONTINGENCIES (Notes 12 and 13) SHAREHOLDERS' EQUITY: Common stock, $.10 par value; shares authorized--20,000,000; shares issued - 7,398,677 in 2000 and 1999 740 740 Capital contributed in excess of par value 44,930 44,928 Retained earnings 47,258 46,089 Treasury stock, at cost; 158,327 shares at April 30, 2000, and 30,027 shares at April 30, 1999 (947) (180) ---------- ---------- TOTAL SHAREHOLDERS' EQUITY 91,981 91,577 ---------- ---------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 172,436 $ 217,777 ========== ========== The accompanying notes to consolidated financial statements are an integral part of these consolidated balance sheets.
Net periodic pension cost for 2000, 1999 and 1998 was comprised of the following components: The following table sets forth changes in the plans' benefit obligations and assets, and summarizes components of amounts recognized in the Company's consolidated balance sheets: April 30, ------------------------------- 2000 1999 ------------- -------------- (Thousands) Change in benefit obligations: Benefit obligation at beginning of year $ 23,641 $ 22,471 Service cost (excluding expense component) 485 495 Interest cost 1,611 1,617 Actuarial (gain) loss (2,891) 310 Benefits paid (1,409) (1,252) ------------- -------------- Benefit obligation at end of year $ 21,437 $ 23,641 ============= ============== Change in plan assets: Fair value of plan assets at beginning of year $ 28,068 $ 27,133 Actual return on plan assets 2,691 2,416 Employer contribution 12 Benefits paid (1,409) (1,252) Expenses (110) (241) ------------- -------------- Fair value of plan assets at end of year $ 29,240 $ 28,068 ============= ============== Funded status $ 7,803 $ 4,427 Unrecognized net actuarial (gain) loss (2,748) 407 Unrecognized prior service cost (3,035) (3,375) ------------- -------------- Prepaid pension cost $ 2,020 $ 1,459 ============= ============== (9) INCOME TAXES: ------------- The provision for income taxes consists of the following: Year Ended April 30, ----------------------------------------- 2000 1999 1998 ----------- ------------ ------------ (Thousands) Current: Federal $ (833) $ 1,946 $ 6,925 State and local - 286 1,094 ----------- ------------ ------------ (833) 2,232 8,019 ----------- ------------ ------------ Deferred: Federal 1,341 (1,397) (2,177) State and local 271 (176) (371) ----------- ------------ ------------ 1,612 (1,573) (2,548) ----------- ------------ ------------ Total provision for income taxes 779 659 5,471 =========== ============ ============ The components of the net deferred income tax liability are as follows: April 30, ----------------------- 2000 1999 --------- --------- (Thousands) Deferred income tax assets- State tax loss carryforwards $ 5,022 $ 4,433 Real estate inventory valuation 1,037 964 Interest payable on tax settlements 1,614 2,229 Real estate basis differences 448 1,528 Differences related to timing of partnership income 1,176 1,120 --------- --------- Total deferred income tax assets 9,297 10,274 --------- --------- Deferred income tax liabilities- Reserve for periodicals and paperbacks (964) (1,329) Gain on partnership restructuring (473) (473) Depreciable assets (2,791) (2,684) Expenses capitalized for financial reporting purposes, expensed for tax (2,003) (2,399) Other (1,034) (519) --------- --------- Total deferred income tax liabilities (7,265) (7,404) --------- --------- Valuation allowance for realization of state tax loss carryforwards (4,659) (3,885) --------- --------- Net deferred income tax liability $(2,627) $(1,015) ========= ========= The following table reconciles taxes computed at the U.S. federal statutory income tax rate to the Company's actual tax provision: Year Ended April 30, ---------------------------------- 2000 1999 1998 ---------- ---------- ---------- (Thousands) Computed tax provision at statutory $ 662 $ 2,787 $ 4,787 Increase (reduction) in tax resulting from: State income taxes, net of federal income tax effect 126 491 809 Net reduction in tax liability as a result of IRS settlement - (2,401) - Nondeductible meals and entertainment 71 90 96 Other (80) (308) (221) ---------- ---------- ---------- Actual tax provision $ 779 $ 659 $ 5,471 ========== ========== ========== For many years, the Company has been involved in an ongoing process of audits of its federal tax returns by the Internal Revenue Service ("IRS") for fiscal years 1984 through 1996.
AMREP CORPORATION AND SUBSIDIARIES ---------------------------------- CONSOLIDATED BALANCE SHEETS (Page 2 of 2) ----------------------------------------- APRIL 30, 1999 AND 1998 ----------------------- (Dollar amounts in thousands, except par value) LIABILITIES AND SHAREHOLDERS' EQUITY 1999 1998 ------------------------------------ ---------- ---------- ACCOUNTS PAYABLE, DEPOSITS AND ACCRUED EXPENSES $ 36,182 $ 39,201 NOTES PAYABLE: Amounts due within one year 26,769 28,511 Amounts subsequently due 47,896 55,737 TAXES PAYABLE: Amounts due within one year 2,513 4,616 Amounts subsequently due (including interest) 11,825 15,074 DEFERRED INCOME TAXES 1,015 2,589 ---------- ---------- TOTAL LIABILITIES 126,200 145,728 ---------- ---------- COMMITMENTS AND CONTINGENCIES (Notes 11 and 12) SHAREHOLDERS' EQUITY: Common stock, $.10 par value; shares authorized--20,000,000; shares issued -- 7,398,677 in 1999 and 1998 740 740 Capital contributed in excess of par value 44,928 44,928 Retained earnings 46,089 38,552 Treasury stock, at cost; 30,027 shares (180) (180) ---------- ---------- TOTAL SHAREHOLDERS' EQUITY 91,577 84,040 ---------- ---------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 217,777 $ 229,768 ========== ========== The accompanying notes to consolidated financial statements are an integral part of these consolidated balance sheets.
AMREP CORPORATION AND SUBSIDIARIES ---------------------------------- CONSOLIDATED STATEMENTS OF INCOME --------------------------------- (Amounts in thousands, except per share amounts) Year Ended April 30, ------------------------------------- 1999 1998 1997 ----------- ----------- ---------- REVENUES: Real estate operations- Home and condominium sales $ 90,947 $ 79,730 $ 68,647 Land sales 36,033 25,102 16,891 --------- --------- --------- 126,980 104,832 85,538 Magazine circulation operations 57,354 56,939 54,152 Interest and other operations 5,957 9,597 6,699 --------- --------- --------- 190,291 171,368 146,389 --------- --------- --------- COSTS AND EXPENSES: Real estate cost of sales- Home and condominium sales 79,494 70,167 59,620 Land sales 21,869 12,493 9,798 Operating expenses- Magazine circulation operations 48,181 43,835 43,966 Real estate commissions and selling 7,689 7,424 6,850 Other operations 3,412 4,680 6,635 General and administrative- Real estate operations and corporate 8,191 8,031 7,322 Magazine circulation operations 6,408 6,657 6,428 Interest, net 4,743 4,404 4,050 Restructuring costs 2,108 - - --------- --------- --------- 182,095 157,691 144,669 --------- --------- --------- INCOME BEFORE INCOME TAXES 8,196 13,677 1,720 PROVISION (BENEFIT) FOR INCOME TAXES 659 5,471 (5,562) --------- --------- --------- NET INCOME $ 7,537 $ 8,206 $ 7,282 ========= ========= ========= EARNINGS PER SHARE - BASIC AND DILUTED $ 1.02 $ 1.11 $ 0.99 ========= ========= ========= WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING 7,369 7,369 7,369 ========= ========= ========= The accompanying notes to consolidated financial statements are an integral part of these consolidated statements.
AMREP CORPORATION AND SUBSIDIARIES ---------------------------------- CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY ----------------------------------------------- (Amounts in thousands) Capital Contributed Common Stock In Excess Treasury ------------ of Retained Stock at Shares Amount Par Value Earnings Cost Total ------ -------- ------------ -------- --------- -------- BALANCE, April 30, 1996 7,399 $ 740 $ 44,928 $ 23,064 $ (180) $ 68,552 Net income - - - 7,282 - 7,282 ----- --------- --------- --------- -------- -------- BALANCE, April 30, 1997 7,399 740 44,928 30,346 (180) 75,834 Net income - - - 8,206 - 8,206 ----- --------- --------- --------- --------- -------- BALANCE, April 30, 1998 7,399 740 44,928 38,552 (180) 84,040 Net income - - - 7,537 - 7,537 ----- --------- --------- --------- -------- -------- BALANCE, April 30, 1999 7,399 $ 740 $ 44,928 $ 46,089 $ (180) $ 91,577 ===== ========= ========= ========= ======== ======== The accompanying notes to consolidated financial statements are an integral part of these consolidated statements.
AMREP CORPORATION AND SUBSIDIARIES ---------------------------------- CONSOLIDATED STATEMENTS OF CASH FLOWS ------------------------------------- (Amounts in thousands) Year Ended April 30, -------------------------------- 1999 1998 1997 --------- --------- -------- CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 7,537 $ 8,206 $ 7,282 Adjustments to reconcile net income to net cash provided (used) by operating activities- Depreciation and amortization 4,830 3,259 2,743 Loss (gain) on disposition of property, 218 (1,298) - plant and equipment Gain from exchange of real estate inventory - - (579) for accounts payable Changes in assets and liabilities, excluding the effect of acquisition- Receivables - net 3,847 (14,753) (3,896) Real estate inventory 10,181 (7,389) (12,673) Other real estate investments (150) 3,396 3,318 Other assets (871) (1,777) (757) Accounts payable, deposits and accrued expenses (3,019) 10,224 168 Taxes payable (5,352) 4,104 12,135 Deferred income taxes (1,574) (2,548) (20,703) --------- --------- -------- Net cash provided (used) by operating activities 15,647 1,424 (12,962) --------- --------- -------- CASH FLOWS FROM INVESTING ACTIVITIES: Capital expenditures (3,305) (1,998) (3,900) Proceeds from disposition of property, plant and equipment 277 2,691 - Amount paid for acquisition - (2,202) - --------- --------- -------- Net cash used by investing activities (3,028) (1,509) (3,900) --------- --------- -------- CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from debt financing 61,647 55,212 66,225 Principal debt payments (71,230) (50,788) (40,792) Net cash provided (used) by financing activities (9,583) 4,424 25,433 --------- --------- -------- INCREASE IN CASH AND CASH EQUIVALENTS 3,036 4,339 8,571 CASH AND CASH EQUIVALENTS, beginning of year 20,517 16,178 7,607 --------- --------- -------- CASH AND CASH EQUIVALENTS, end of year $ 23,553 $ 20,517 $ 16,178 ========= ========= ======== SUPPLEMENTAL CASH FLOW INFORMATION: Interest paid - net of amounts capitalized $ 4,802 $ 4,093 $ 3,903 ========= ========= ======== Income taxes paid $ 7,656 $ 3,952 $ 2,673 ========= ========= ======== Acquisition of real estate assets: Identifiable assets acquired $ - $ 1,168 $ - Excess of cost over net assets acquired - 1,081 - Liabilities assumed - (47) - --------- --------- -------- Amount paid for acquisition $ - $ 2,202 $ - ========= ========= ======== The accompanying notes to consolidated financial statements are an integral part of these consolidated statements.
A summary of activity in the Company's stock option plans is as follows: Year Ended April 30, --------------------------------------------------------- 1999 1998 1997 --------------------------------------------------------- Weighted Weighted Weighted Number Average Number Average Number Average of Exercise of Exercise of Exercise Shares Price Shares Price Shares Price ------- -------- -------- ------ ------- ------- Options outstanding at beginning of year 50,500 $ 6.18 85,500 $ 7.40 121,000 $ 7.13 Granted 2,500 $ 7.75 42,500 $ 6.09 3,500 $ 5.19 Expired or canceled (9,500) $ 6.50 (77,500) $ 7.48 (39,000) $ 6.38 ------- ------- ------- Options outstanding at end of year 43,500 $ 6.20 50,500 $ 6.18 85,500 $7.40 ======= ======= ======= Available for grant at end of year 308,750 303,250 272,250 ======= ======= ======= Options exercisable at end of year 18,417 8,000 80,500 ======= ======= ======= Range of exercise prices for options exercisable at end of year $5.19 to $7.50 $5.19 to $8.88 $5.12 to $8.88 ============== ============== =============== Options outstanding at April 30, 1999 are exercisable over a three to four year period beginning one year from date of grant.
Net periodic pension cost for 1999, 1998 and 1997 was comprised of the following components: Year Ended April 30, ------------------------------------ 1999 1998 1997 --------- --------- --------- (Thousands) Service cost - benefits earned during the period $ 645 $ 994 $ 1,156 Interest cost on projected benefit obligation 1,617 1,717 1,722 Expected return on assets (2,385) (2,006) (1,885) Amortization of prior service cost (352) (121) (121) Recognized net actuarial gain (loss) (12) - - --------- --------- --------- Net periodic pension cost (income) $ (487) $ 584 $ 872 ========= ========= ========= Assumptions used in determining net periodic pension cost were: Year Ended April 30, ------------------------------------------ 1999 1998 1997 ------------- ------------ ------------- Discount rates 7.25% 7.25% 8.00% Rates of increase in compensation levels N/A N/A 4.50-5.00% Expected long-term rate of return on assets 8.00-9.00% 8.00-9.00% 8.00-9.00% The following table sets forth changes in the plans' benefit obligations and assets, and summarizes components of amounts recognized in the Company's consolidated balance sheets: April 30, -------------------- 1999 1998 ------- -------- (Thousands) Change in benefit obligations: Benefit obligation at beginning of year $ 22,471 $ 23,729 Service cost 495 887 Interest cost 1,617 1,716 Amendments - (3,852) Actuarial gain 310 1,147 Benefits paid (1,252) (1,156) -------- -------- Benefit obligation at end of year $ 23,641 $ 22,471 ======== ======== Change in plan assets: Fair value of plan assets at beginning of year $ 27,133 $ 23,283 Actual return on plan assets 2,416 5,094 Employer contribution 12 231 Benefits paid (1,252) (1,156) Expenses (241) (319) -------- -------- Fair value of plan assets at end of year $ 28,068 $ 27,133 ======== ======== Funded status $ 4,427 $ 4,662 Unrecognized net actuarial loss 407 14 Unrecognized prior service cost (3,375) (3,727) -------- -------- Prepaid pension cost $ 1,459 $ 949 ======== ======== (10) INCOME TAXES: The provision (benefit) for income taxes consists of the following: Year Ended April 30, ----------------------------------- 1999 1998 1997 -------- --------- --------- (Thousands) Current: Federal $ 1,946 $ 6,925 $ 13,187 State and local 286 1,094 1,954 --------- --------- --------- 2,232 8,019 15,141 --------- --------- --------- Deferred: Federal (1,397) (2,177) (18,753) State and local (176) (371) (1,950) --------- --------- --------- (1,573) (2,548) (20,703) --------- --------- --------- Total provision (benefit) for income taxes $ 659 $ 5,471 $ (5,562) ========= ========= ========= The components of the net deferred income tax liability are as follows: April 30, ------------------------ 1999 1998 --------- --------- (Thousands) Deferred income tax assets- State tax loss carryforwards $ 4,433 $ 4,716 Real estate inventory valuation 964 1,127 Interest payable on tax settlements 2,229 2,229 Real estate basis differences 1,528 508 Reserve for periodicals and paperbacks - 596 Differences related to timing of 1,120 871 partnership income --------- --------- Total deferred income tax assets 10,274 10,047 --------- --------- Deferred income tax liabilities- Reserve for periodicals and paperbacks (1,329) - Gain on partnership restructuring (473) (473) Depreciable assets (2,684) (2,563) Expenses capitalized for financial reporting purposes, expensed for tax (2,399) (2,518) Other (519) (2,976) --------- --------- Total deferred income tax liabilities (7,404) (8,530) --------- --------- Valuation allowance for realization of state tax loss carryforwards (3,885) (4,106) --------- --------- Net deferred income tax liability $ (1,015) $ (2,589) ========= ========= The following table reconciles taxes computed at the U.S. federal statutory income tax rate to the Company's actual tax provision (benefit): Year Ended April 30, ------------------------------------ 1999 1998 1997 --------- --------- --------- (Thousands) Computed tax provision at statutory rate $ 2,787 $ 4,787 $ 585 Increase (reduction) in tax resulting from: State income taxes, net of federal income tax effect 491 809 117 Net reduction in tax liability as a result of IRS settlement (2,401) - (6,250) Other (218) (125) (14) --------- --------- --------- Actual tax provision (benefit) $ 659 $ 5,471 $ (5,562) ========= ========= ========= During 1997, the Company reached an agreement with the Internal Revenue Service ("IRS") to resolve all outstanding issues related to the IRS's examination of the Company's tax returns for the years 1984 through 1989.
The following schedules set forth summarized data relative to the industry segments: Selected Quarterly Financial Data (Unaudited) (In thousands of dollars, except per share amounts) Quarter Ended ------------------------------------------------- July 31, October 31, January 31, April 30, 1998 1998 1999 1999 ------------------------------------------------- Revenues $ 46,223 $ 35,930 $ 41,787 $ 66,351 Gross Profit 11,374 7,508 6,374 12,079 Net Income (a) $ 2,882 $ 341 $ 693 $ 3,621 ========= ========= ========= ========= Earnings Per Share - Basic and Diluted (a) $ 0.39 $ 0.05 $ 0.09 $ 0.49 ========= ========= ========= ========= Quarter Ended -------------------------------------------------- July 31, October 31, January 31, April 30, 1997 1997 1998 1998 -------------------------------------------------- Revenues $ 37,795 $ 43,540 $ 46,849 $ 43,184 Gross Profit 7,086 10,845 13,591 8,671 Net Income $ 505 $ 2,539 $ 4,142 $ 1,020 ========= ========= ========= ========= Earnings Per Share - Basic and Diluted $ 0.07 $ 0.34 $ 0.56 $ 0.14 ========= ========= ========= ========= a) The quarters ended January 31, 1999 and April 30, 1999 reflect an adjustment to Taxes Payable - amounts subsequently due of $900,000 and $1,500,000 respectively, for the settlement of the 1990 through 1992 tax examinations (see Note 10).
AMREP CORPORATION AND SUBSIDIARIES ---------------------------------- SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS (Page 1 of 2) ------------------------------------------------------------- (Thousands) Additions ----------------------- Charges (Credits) Charged Balance at to Costs (Credited) Balance Beginning and to Other at End of Period Expenses Accounts Deductions of Period --------- --------- --------- ---------- --------- FOR THE YEAR ENDED APRIL 30, 1999: Allowance for doubtful accounts (included in receivables - real estate operations on the consolidated balance sheet) $ 291 $ 74 $ - $ 110(A) $ 255 -------- -------- -------- ---------- -------- Allowance for estimated returns and doubtful accounts (included in receivables - magazine circulation operations on the consolidated balance sheet) $ 51,895 $ (3,528) $ - $ 4,010(A) $ 44,357 -------- -------- -------- ---------- -------- FOR THE YEAR ENDED APRIL 30, 1998: Allowance for doubtful accounts (included in receivables - real estate operations on the consolidated balance sheet) $ 690 $ 143 $ - $ 542(A) $ 291 -------- -------- -------- ---------- -------- Allowance for estimated returns and doubtful accounts (included in receivables - magazine circulation operations on the consolidated balance sheet) $ 48,976 $ 3,044 $ - $ 125(A) $ 51,895 -------- -------- -------- ---------- -------- Real estate valuation allowance $ 2,459 $ - $ (1,880) $ 579(B) $ - -------- -------- -------- ---------- -------- AMREP CORPORATION AND SUBSIDIARIES ---------------------------------- SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS (Page 2 of 2) ------------------------------------------------------------- (Thousands) Additions ----------------------- Charges (Credits) Charged Balance at to Costs (Credited) Balance Beginning and to Other at End of Period Expenses Accounts Deductions of Period --------- --------- --------- ---------- --------- FOR THE YEAR ENDED APRIL 30, 1997: Allowance for doubtful accounts (included in receivables - real estate operations on the consolidated balance sheet) $ 598 $ 135 $ - $ 43(A) $ 690 -------- -------- -------- ---------- -------- Allowance for estimated returns and doubtful accounts (included in receivables - magazine circulation operations on the consolidated balance sheet) $ 49,394 $ 706 $ - $ 1,124(A) $ 48,976 -------- -------- -------- ---------- -------- Real estate valuation allowance $ 2,580 $ - $ - $ 121(B) $ 2,459 -------- -------- -------- ---------- -------- NOTE:(A) Uncollectible accounts written off.
AMREP CORPORATION AND SUBSIDIARIES ---------------------------------- CONSOLIDATED BALANCE SHEETS (Page 2 of 2) ----------------------------------------- APRIL 30, 1998 AND 1997 ----------------------- (Dollar amounts in thousands, except par value) LIABILITIES AND SHAREHOLDERS' EQUITY 1998 1997 ------------------------------------ ----------- ---------- ACCOUNTS PAYABLE, DEPOSITS AND ACCRUED EXPENSES $ 40,352 $ 30,081 NOTES PAYABLE: Amounts due within one year 28,511 24,833 Amounts subsequently due 55,737 54,991 TAXES PAYABLE: Amounts due within one year 4,616 512 Amounts subsequently due (including interest) 13,923 13,923 DEFERRED INCOME TAXES 2,589 5,137 TOTAL LIABILITIES 145,728 129,477 COMMITMENTS AND CONTINGENCIES (Notes 10 and 11) SHAREHOLDERS' EQUITY: Common stock, $.10 par value; shares authorized--20,000,000; shares issued --7,398,677 in 1998 and 1997 740 740 Capital contributed in excess of par value 44,928 44,928 Retained earnings 38,552 30,346 Treasury stock, at cost; 30,027 shares (180) (180) ---------- ---------- TOTAL SHAREHOLDERS' EQUITY 84,040 75,834 ---------- ---------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 229,768 $ 205,311 ========== ========== The accompanying notes to consolidated financial statements are an integral part of these consolidated balance sheets.
AMREP CORPORATION AND SUBSIDIARIES ---------------------------------- CONSOLIDATED STATEMENTS OF INCOME --------------------------------- (Amounts in thousands, except per share amounts) Year Ended April 30, ------------------------------------ 1998 1997 1996 --------- --------- --------- REVENUES: Real estate operations- Home and condominium sales $ 79,730 $ 68,647 $ 89,697 Land sales 25,102 16,891 8,901 --------- --------- --------- 104,832 85,538 98,598 Magazine circulation operations 56,939 54,152 57,149 Interest and other operations 9,597 6,699 6,055 --------- --------- -------- 171,368 146,389 161,802 --------- --------- -------- COSTS AND EXPENSES: Real estate cost of sales 82,660 69,418 78,401 Operating expenses- Magazine circulation operations 43,835 43,966 45,785 Real estate commissions and selling 7,424 6,850 6,373 Other operations 4,680 6,635 6,376 General and administrative- Real estate operations and corporate 8,031 7,322 9,573 Magazine circulation operations 6,657 6,428 6,728 Interest, net 4,404 4,050 3,925 --------- -------- -------- 157,691 144,669 157,161 --------- -------- -------- INCOME BEFORE INCOME TAXES 13,677 1,720 4,641 PROVISION (BENEFIT) FOR INCOME TAXES 5,471 (5,562) 1,856 --------- --------- --------- NET INCOME $ 8,206 $ 7,282 $ 2,785 ========= ========= ========= EARNINGS PER SHARE - BASIC AND DILUTED $ 1.11 $ 0.99 $ 0.38 ========= ========= ========= WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING 7,369 7,369 7,384 ========= ========= ========= The accompanying notes to consolidated financial statements are an integral part of these consolidated statements.
AMREP CORPORATION AND SUBSIDIARIES ----------------------------------- CONSOLIDATED STATEMENTS OF CASH FLOWS ------------------------------------- (Amounts in thousands) Year Ended April 30, -------------------------------- 1998 1997 1996 --------- ---------- -------- CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 8,206 $ 7,282 $ 2,785 Adjustments to reconcile net income to net cash (used) provided by operating activities- Depreciation and amortization 3,259 2,743 2,309 Gain from exchange of real estate inventory - (579) - for accounts payable Changes in assets and liabilities, excluding the effect of acquisition- Receivables - net (14,753) (3,896) 250 Real estate inventory (7,389) (12,673) 1,257 Other real estate investments 3,396 3,318 3,411 Other assets (1,777) (757) (223) Accounts payable, deposits and accrued expenses 10,224 168 (978) Taxes payable 4,104 12,135 1,943 Deferred income taxes (2,548) (20,703) (680) --------- -------- -------- Net cash (used) provided by operating activities 2,722 (12,962) 10,074 --------- -------- -------- CASH FLOWS FROM INVESTING ACTIVITIES: Capital expenditures (1,998) (3,900) (5,358) Book value of property, plant and equipment sold 1,393 - 861 Amount paid for acquisition (2,202) - - --------- -------- -------- Net cash used by investing activities (2,807) (3,900) (4,497) --------- -------- -------- CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from debt financing 55,212 66,225 28,226 Principal debt payments (50,788) (40,792) (35,488) Proceeds from the sale of stock and exercise of stock options - - 26 --------- -------- -------- Net cash provided (used) by financing activities 4,424 25,433 (7,236) --------- -------- -------- INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 4,339 8,571 (1,659) CASH AND CASH EQUIVALENTS, beginning of year 16,178 7,607 9,266 --------- -------- -------- CASH AND CASH EQUIVALENTS, end of year $ 20,517 $ 16,178 $ 7,607 ========= ======== ======== SUPPLEMENTAL CASH FLOW INFORMATION: Interest paid - net of amounts capitalized $ 4,093 $ 3,903 $ 3,634 ========= ======== ======== Income taxes paid $ 3,952 $ 2,673 $ 553 ========= ======== ======== Acquisition of real estate assets: Identifiable assets acquired $ 1,168 $ - $ - Excess of cost over net assets acquired 1,081 - - Liabilities assumed (47) - - --------- -------- -------- Amount paid for acquisition $ 2,202 $ - $ - ========= ======== ======== The accompanying notes to consolidated financial statements are an integral part of these consolidated statements.
Net periodic pension cost for 1998, 1997 and 1996 was comprised of the following components: Year Ended April 30, ------------------------------------ 1998 1997 1996 --------- --------- --------- (Thousands) Service cost - benefits earned during the period $ 994 $ 1,156 $ 1,045 Interest cost on projected benefit obligation 1,716 1,720 1,593 Actual return on assets (4,820) (1,817) (2,792) Net amortization and deferral 2,694 (187) 1,134 --------- --------- --------- Net periodic pension cost $ 584 $ 872 $ 980 ========= ========= ========= Assumptions used in the accounting were: Year Ended April 30, ------------------------------------------ 1998 1997 1996 ------------- ------------ ------------- Discount rates 7.25% 8.00% 8.00% Rates of increase in compensation levels N/A 4.50-5.00% 4.50-5.00% Expected long-term rate of return on assets 8.00-9.00% 8.00-9.00% 8.00-9.00% The following table sets forth the plans' funded status and amounts recognized in the Company's consolidated balance sheets: April 30, -------------------- 1998 1997 -------- -------- (Thousands) Actuarial present value of benefit obligations: Vested benefit obligation $ 21,688 $ 18,312 ======== ======== Accumulated benefit obligation $ 22,471 $ 19,504 ======== ======== Projected benefit obligation $ 22,471 $ 23,729 Assets at fair value 27,133 23,283 -------- -------- Excess of projected benefit obligation over assets 4,662 (446) Unrecognized net loss 14 1,744 Unrecognized prior service cost benefit (3,779) (48) Unrecognized net transition liability 52 52 -------- -------- Prepaid pension cost $ 949 $ 1,302 ======== ======== (9) INCOME TAXES: ------------- The provision (benefit) for income taxes consists of the following: Year Ended April 30, ----------------------------------- 1998 1997 1996 --------- --------- --------- (Thousands) Current: Federal $ 6,925 $ 13,187 $ 2,414 State and local 1,094 1,954 123 --------- --------- --------- 8,019 15,141 2,537 --------- --------- --------- Deferred: Federal (2,177) (18,753) (582) State and local (371) (1,950) (99) --------- --------- --------- (2,548) (20,703) (681) --------- --------- --------- Total provision (benefit) for income taxes $ 5,471 $ (5,562) $ 1,856 ========= ========= ========= The components of the net deferred income tax liability are as follows: April 30, ------------------------ 1998 1997 --------- --------- (Thousands) Deferred income tax assets- State tax loss carryforwards $ 4,716 $ 4,061 Real estate inventory valuation 1,127 1,426 Interest payable on tax settlements 2,229 2,233 Real estate basis differences 508 531 Reserve for periodicals and paperbacks 596 (228) Differences related to timing of partnership income 871 (1,819) --------- --------- Total deferred income tax assets 10,047 6,204 --------- --------- Deferred income tax liabilities- Gain on partnership restructuring (473) (473) Depreciable assets (2,563) (1,513) Expenses capitalized for financial reporting purposes, expensed for tax (2,518) (2,234) Other (2,976) (3,998) --------- --------- Total deferred income tax liability (8,530) (8,218) --------- --------- Valuation allowance for realization of state tax loss carryforwards (4,106) (3,123) --------- --------- Net deferred income tax liability $ (2,589) $ (5,137) ========= ========= The following table reconciles taxes computed at the U.S. federal statutory income tax rate to the Company's actual tax provision (benefit): Year Ended April 30, ------------------------------------ 1998 1997 1996 --------- --------- --------- (Thousands) Computed tax provision at statutory rate $ 4,787 $ 585 $ 1,578 Increase (reduction) in tax resulting from: State income taxes, net of federal income tax effect 809 117 269 Net reduction in deferred tax liability as a result of IRS settlement - (6,250) - Other (125) (14) 9 --------- --------- --------- Actual tax provision (benefit) $ 5,471 $ (5,562) $ 1,856 ========= ========= ========= During 1997, the Company reached an agreement with the Internal Revenue Service ("IRS") which resolved all outstanding issues resulting from the IRS's audit of the years 1984 through 1989.
The following schedules set forth summarized data relative to the industry segments: Selected Quarterly Financial Data (Unaudited) (In thousands of dollars, except per share amounts) Quarter Ended --------------------------------------------------- July 31, October 31, January 31, April 30, 1997 1997 1998 1998 --------- ----------- ----------- --------- Revenues $ 37,795 $ 43,540 $ 46,849 $ 43,184 Gross Profit 7,086 10,845 13,591 8,671 Net Income $ 505 $ 2,539 $ 4,142 $ 1,020 ========= ========= ========= ========= Earnings Per Share - Basic and Diluted $ 0.07 $ 0.34 $ 0.56 $ 0.14 ========= ========= ========= ========= Quarter Ended --------------------------------------------------- July 31, October 31, January 31, April 30, 1996 1996 1997 1997 --------- ----------- ----------- --------- Revenues $ 34,408 $ 33,230 $ 36,761 $ 41,990 Gross Profit (A) 6,388 6,468 6,880 6,634 Net Income (B) $ 403 $ 262 $ 267 $ 6,350 ========= ========= ========= ========= Earnings Per Share - Basic and Diluted $ 0.05 $ 0.04 $ 0.04 $ 0.86 ========= ========= ========= ========= (A) As discussed in Note 1 of Notes to Consolidated Financial Statements, certain amounts have been reclassified to conform with the 1998 presentation.
/s/Mohan Vachani /s/Nicholas G. Karabots - --------------------------------- ------------------------------ Mohan Vachani Nicholas G. Karabots Director, Senior Vice President, Director Principal Financial Officer and Dated: July 27, 1998 Principal Accounting Officer * Dated: July 27, 1998 /s/Jerome Belson /s/Albert V. Russo - ---------------------------------- ------------------------------- Jerome Belson Albert V. Russo Director Director Dated: July 27, 1998 Dated: July 27, 1998 /s/Edward B. Cloues, II /s/Samuel N. Seidman - ---------------------------------- ------------------------------- Edward B. Cloues, II Samuel N. Seidman Director Director Dated: July 27, 1998 Dated: July 27, 1998 /s/Daniel Friedman /s/James Wall - ---------------------------------- ------------------------------- Daniel Friedman James Wall Director Director Dated: July 27, 1998 Dated: July 27, 1998 *Also acting as Principal Executive Officer in the absence of a Chief Executive Officer, solely for the purpose of signing this Annual Report.
AMREP CORPORATION AND SUBSIDIARIES ---------------------------------- SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS (Page 1 of 2) ------------------------------------------------------------- (Thousands) Additions ----------------------- Charges (Credits) Charged Balance at to Costs (Credited) Balance Beginning and to Other at End of Period Expenses Accounts Deductions of Period --------- -------- -------- ---------- --------- FOR THE YEAR ENDED APRIL 30, 1998: Allowance for doubtful accounts (included in receivables - real estate operations on the consolidated balance sheet) $ 690 $ 143 $ - $ 542(A) $ 291 -------- --------- ------ ----------- -------- Allowance for estimated returns and doubtful accounts (included in receivables - magazine circulation operations on the consolidated balance sheet) $ 53,322 $ 3,044 $ - $ 125(A) $ 56,241 -------- --------- ------ ----------- -------- Real estate valuation allowance $ 2,459 $ - $ - $ 579(B) $ 1,880 -------- --------- ------ ----------- -------- FOR THE YEAR ENDED APRIL 30, 1997: Allowance for doubtful accounts (included in receivables - real estate operations on the consolidated balance sheet) $ 598 $ 135 $ - $ 43(A) $ 690 -------- --------- ------ ----------- -------- Allowance for estimated returns and doubtful accounts (included in receivables - magazine circulation operations on the consolidated balance sheet) $ 53,740 $ 706 $ - $ 1,124(A) $ 53,322 -------- --------- ------ ----------- -------- Real estate valuation allowance $ 2,580 $ - $ - $ 121(B) $ 2,459 -------- --------- ------ ----------- -------- AMREP CORPORATION AND SUBSIDIARIES ---------------------------------- SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS (Page 2 of 2) ------------------------------------------------------------- (Thousands) Additions ----------------------- Charges (Credits) Charged Balance at to Costs (Credited) Balance Beginning and to Other at End of Period Expenses Accounts Deductions of Period --------- -------- -------- ---------- --------- FOR THE YEAR ENDED APRIL 30, 1996: Allowance for doubtful accounts (included in receivables - real estate operations on the consolidated balance sheet) $ 608 $ 24 $ - $ 34(A) $ 598 -------- --------- ------ ----------- -------- Allowance for estimated returns and doubtful accounts (included in receivables - magazine circulation operations on the consolidated balance sheet) $ 53,947 $ 189 $ - $ 396(A) $ 53,740 -------- --------- ------ ----------- -------- Real estate valuation allowance $ 2,580 $ - $ - $ - $ 2,580 -------- --------- ------ ----------- -------- NOTE: (A) Uncollectible accounts written off.
AMREP CORPORATION AND SUBSIDIARIES ---------------------------------- CONSOLIDATED BALANCE SHEETS (Page 2 of 2) ----------------------------------------- APRIL 30, 1997 AND 1996 ----------------------- (Dollar amounts in thousands, except par value) LIABILITIES AND SHAREHOLDERS' EQUITY 1997 1996 ------------------------------------ ------------ ---------- ACCOUNTS PAYABLE, DEPOSITS AND ACCRUED EXPENSES $ 30,081 $ 30,713 NOTES PAYABLE: Amounts due within one year 24,833 16,923 Amounts subsequently due 54,462 35,036 TAXES PAYABLE: Amounts due within one year 512 2,300 Amounts subsequently due (including interest) 13,923 - COLLATERALIZED MORTGAGE OBLIGATIONS AND OTHER 529 2,432 DEFERRED INCOME TAXES 5,137 25,840 ---------- ---------- TOTAL LIABILITIES 129,477 113,244 ---------- ---------- COMMITMENTS AND CONTINGENCIES (Note 10) SHAREHOLDERS' EQUITY: Common stock, $.10 par value; shares authorized--20,000,000; shares issued --7,398,677 in 1997 and 1996 740 740 Capital contributed in excess of par value 44,928 44,928 Retained earnings 30,346 23,064 Treasury stock, at cost; 30,027 shares (180) (180) ---------- ---------- TOTAL SHAREHOLDERS' EQUITY 75,834 68,552 ---------- ---------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 205,311 $ 181,796 ========== ========== The accompanying notes to consolidated financial statements are an integral part of these consolidated balance sheets.
AMREP CORPORATION AND SUBSIDIARIES ---------------------------------- CONSOLIDATED STATEMENTS OF INCOME --------------------------------- (Amounts in thousands, except per share amounts) Year ended April 30, -------------------------------------- 1997 1996 1995 ---------- ----------- ------------ REVENUES: Real estate operations- Home and condominium sales $ 68,647 $ 89,697 $ 88,084 Land sales 16,891 8,901 11,734 --------- --------- --------- 85,538 98,598 99,818 Magazine circulation operations 53,827 56,693 46,186 Interest and other operations 7,024 6,511 6,521 --------- --------- --------- 146,389 161,802 152,525 --------- --------- --------- COSTS AND EXPENSES: Real estate cost of sales 70,057 78,891 81,939 Operating expenses- Magazine circulation operations 43,966 45,785 34,257 Real estate commissions and selling 6,850 6,373 6,492 Other operations 6,635 6,376 7,014 General and administrative- Real estate operations and corporate 6,683 9,083 7,621 Magazine circulation operations 6,428 6,728 5,388 Interest, net 4,050 3,925 3,086 --------- --------- --------- 144,669 157,161 145,797 --------- --------- --------- INCOME BEFORE INCOME TAXES 1,720 4,641 6,728 BENEFIT (PROVISION) FOR INCOME TAXES 5,562 (1,856) (2,713) --------- --------- --------- NET INCOME $ 7,282 $ 2,785 $ 4,015 ========= ========= ========= NET INCOME PER SHARE $ 0.99 $ 0.38 $ 0.55 ========= ========= ========= WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING 7,369 7,384 7,345 ========= ========= ========= The accompanying notes to consolidated financial statements are an integral part of these consolidated statements.
AMREP CORPORATION AND SUBSIDIARIES ---------------------------------- CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY ----------------------------------------------- (Amounts in thousands) Capital Contributed Treasury Common Stock In Excess Retained Stock Shares Amount of Par Value Earnings at Cost Total ------ ------ ------------ -------- ------- -------- BALANCE, April 30, 1994 7,298 $ 730 $ 44,435 $ 16,264 $ - $ 61,429 Net income - - - 4,015 - 4,015 Exercise of stock options 96 9 468 - - 477 ----- ----- -------- -------- ------ -------- BALANCE, April 30, 1995 7,394 739 $ 44,903 20,279 - 65,921 Net income - - - 2,785 - 2,785 Exercise of stock options 5 1 25 - - 26 Treasury stock purchased - - - - (180) (180) ----- ----- -------- -------- ------ -------- BALANCE, April 30, 1996 7,399 740 44,928 23,064 (180) 68,552 Net income - - - 7,282 - 7,282 ----- ----- -------- -------- ------ -------- BALANCE, April 30, 1997 7,399 $ 740 $ 44,928 $ 30,346 $ (180) $ 75,834 ===== ===== ======== ======== ====== ======== The accompanying notes to consolidated financial statements are an integral part of these consolidated sheets.
AMREP CORPORATION AND SUBSIDIARIES ---------------------------------- CONSOLIDATED STATEMENTS OF CASH FLOWS ------------------------------------- (Amounts in thousands) Year ended April 30, ----------------------------------- 1997 1996 1995 --------- --------- --------- CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 7,282 $ 2,785 $ 4,015 Adjustments to reconcile net income to net cash (used) provided by operating activities- Depreciation and amortization 2,743 2,309 1,956 Changes in assets and liabilities- Receivables - net (3,896) 250 (188) Real estate inventory (14,302) 745 (1,362) Investment property 1,629 512 (147) Other real estate investments 3,318 3,411 2,552 Other assets (757) (223) (1,069) Accounts payable, deposits and accrued 168 (978) (2,199) expenses Taxes payable 12,135 1,943 357 Deferred income taxes (20,703) (680) 2,356 Gain from exchange of real estate inventory for accounts payable (579) - - -------- --------- -------- Net cash (used) provided by operating activities (12,962) 10,074 6,233 -------- --------- -------- CASH FLOWS FROM INVESTING ACTIVITIES: Capital expenditures (3,900) (5,358) (3,116) Proceeds from sale of property, plant and - 861 - equipment Payment for Fulfillment Corporation of - - (1,744) America - net Other - net - - 600 -------- --------- -------- Net cash used by investing activities (3,900) (4,497) (4,260) -------- --------- -------- CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from debt financing 66,225 28,226 35,996 Principal debt payments (40,792) (35,488) (35,803) Proceeds from the sale of stock and exercise of stock options - 26 477 -------- --------- -------- Net cash provided (used) by financing activities 25,433 (7,236) 670 -------- --------- -------- INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 8,571 (1,659) 2,643 CASH AND CASH EQUIVALENTS, beginning of year 7,607 9,266 6,623 --------- --------- --------- CASH AND CASH EQUIVALENTS, end of year $ 16,178 $ 7,607 $ 9,266 ========= ========= ========= SUPPLEMENTAL CASH FLOW INFORMATION: Interest paid - net of amounts capitalized $ 3,903 $ 3,634 $ 3,356 ========= ========= ========= Income taxes paid $ 2,673 $ 553 $ 233 ========= ========= ========= Purchase of treasury stock resulting in a decrease of receivable due from seller $ - $ 180 $ - ========= ========= ========= Transfer from property, plant and equipment to real estate inventor $ 105 $ - $ - ========= ========= ========= Exchange of real estate inventory for accounts payable: Real estate inventory $ 221 $ - $ - ========= ========= ========= Accounts payable $ 800 $ - $ - ========= ========= ========= The accompanying notes to consolidated financial statements are an integral part of these consolidated sheets.
Net periodic pension cost for fiscal 1997, 1996 and 1995 was comprised of the following components: Year Ended April 30, -------------------------------------- 1997 1996 1995 ------------ ----------- ---------- (Thousands) Service cost - benefits earned during the period $ 1,156 $ 1,045 $ 854 Interest cost on projected benefit obligation 1,720 1,593 1,283 Actual return on assets (1,817) (2,792) (962) Net amortization and deferral (187) 1,134 (449) ------------ ----------- ----------- Net periodic pension cost $ 872 $ 980 $ 726 ============ =========== =========== Assumptions used in the accounting were: Year Ended April 30, ------------------------------------------ 1997 1996 1995 ------------- ------------ ------------- Discount rates 8.00% 8.00% 8.00% Rates of increase in compensation 4.50-5.00% 4.50-5.00% 4.50-5.00% levels Expected long-term rate of return 8.00-9.00% 8.00-9.00% 8.00-9.00% on assets The following table sets forth the plans' funded status and amounts recognized in the Company's consolidated balance sheets: April 30, ---------------------- 1997 1996 ---------- ---------- (Thousands) Actuarial present value of benefit obligations: Vested benefit obligation $ 18,312 $ 17,043 ========== ========== Accumulated benefit obligation $ 19,504 $ 18,087 ========== ========== Projected benefit obligation $ 23,729 $ 21,955 Assets at fair value 23,283 21,505 ---------- ---------- Excess of projected benefit obligation over (446) (450) assets Unrecognized net loss 1,744 1,623 Unrecognized prior service cost benefit (48) (50) Unrecognized net transition liability (asset) 52 (139) ---------- ---------- Prepaid pension cost $ 1,302 $ 984 ========== ========== (9) INCOME TAXES: The Company adopted SFAS No.
The benefit (provision) for income taxes consists of the following: Year Ended April 30, ------------------------------------- 1997 1996 1995 ---------- ----------- ----------- (Thousands) Current: Federal $ (13,187) $ (2,414) $ (232) State and local (1,954) (123) (125) ---------- ----------- ----------- (15,141) (2,537) (357) ---------- ----------- ----------- Deferred: Federal 18,753 582 (2,105) State and local 1,950 99 (363) Net change in valuation allowance - - 112 ---------- ----------- ----------- 20,703 681 (2,356) ---------- ----------- ----------- Total benefit (provision) for income taxes $ 5,562 $ (1,856) $ (2,713) ========== =========== =========== Components of net deferred income tax liability are as follows: April 30, -------------------------- 1997 1996 ----------- ----------- (Thousands) Deferred income tax assets- Tax loss carryforwards (federal and state) $ 4,061 $ 7,264 Real estate inventory valuation 1,426 1,446 Interest payable on tax settlements 2,233 - Real estate basis differences 531 (1,680) ----------- ----------- Total deferred income tax assets 8,251 7,030 ----------- ----------- Deferred income tax liabilities- Reserve for periodicals and paperbacks (228) (19,295) Gain on partnership restructuring (473) (473) Depreciable assets (1,513) (1,010) Expenses capitalized for financial reporting (2,234) (2,345) purposes, expensed for tax Differences related to timing of (1,819) (1,494) partnership income Other (3,998) (5,130) ----------- ----------- Total deferred income tax liability (10,265) (29,747) ----------- ----------- Valuation allowance for realization of state tax loss carryforwards (3,123) (3,123) ----------- ----------- Net deferred income tax liability $ (5,137) $ (25,840) =========== =========== The following table reconciles taxes computed at the U.S. federal statutory income tax rate to the Company's actual tax benefit (provision): Year ended April 30, --------------------------------------- 1997 1996 1995 ------------ ----------- ----------- (Thousands) Computed tax provision at statutory rate $ (585) $ (1,578) $ (2,288) Increase (reduction) in tax resulting from: State income taxes, net of federal (117) (269) (442) income tax effect Net reduction in deferred tax liability as a result of IRS settlement 6,250 - - Reduction in valuation allowance - - 112 Other 14 (9) (95) ------------ ----------- ---------- Actual tax benefit (provision) $ 5,562 $ (1,856) $ (2,713) ============ =========== ========== As discussed in Note 10, the Company has determined the amount of additional taxes that would be due pursuant to IRS examinations for the years 1990 through 1995 in order to achieve a tax treatment consistent with the 1997 agreement with the IRS with respect to the years 1984 through 1989.
The following schedules set forth summarized data relative to the industry segments: Selected Quarterly Financial Data (Unaudited) (In thousands of dollars, except per share amounts) Quarter Ended --------------------------------------------- July 31, October 31, January 31, April 30, 1996 1996 1997 1997 --------- ----------- --------- ---------- Revenues $ 34,408 $ 33,230 $ 36,761 $ 41,990 Gross Profit 6,246 6,305 6,703 6,477 Net Income (A) $ 403 $ 262 $ 267 $ 6,350 ========= ========= ========= ========= Net Income Per Share (A) $ 0.05 $ 0.04 $ 0.04 $ 0.86 ========= ========= ========= ========= Quarter Ended --------------------------------------------- July 31, October 31, January 31, April 30, 1996 1996 1997 1997 --------- ----------- --------- ---------- Revenues $ 40,922 $ 42,410 $ 37,944 $ 40,526 Gross Profit 7,639 8,733 7,382 6,996 Net Income $ 781 $ 1,279 $ 494 $ 231 ========= ========= ========= ========= Net Income Per Share $ 0.11 $ 0.17 $ 0.07 $ 0.03 ========= ========= ========= ========= (A) The quarter ended April 30, 1997 reflects an adjustment to Deferred Income Taxes for settlement of 1984 through 1989 tax examinations (see Note 9).
/s/Mohan Vachani /s/Daniel Friedman - ---------------- ------------------ Mohan Vachani DanielFriedman Director, Senior Vice President, Director Principal Financial Officer and Dated: July 25, 1997 Principal Accounting Officer * Dated: July 25, 1997 /s/Jerome Belson /s/Nicholas G. Karabots - ---------------- ----------------------- Jerome Belson Nicholas G.Karabots Director Director Dated: July 25, 1997 Dated: July 25, 1997 /s/Edward B. Cloues, II /s/Albert V. Russo - ----------------------- ------------------- Edward B. Cloues, II Albert V. Russo Director Director Dated: July 25, 1997 Dated: July 25, 1997 /s/Samuel N. Seidman - -------------------- -------------------- David N. Dinkins Samuel N.Seidman Director Director Dated: Dated: July 25, 1997 /s/Harvey I. Freeman /s/James Wall - -------------------- ------------- Harvey I. Freeman James Wall Director Director Dated: July 25, 1997 Dated: July 25, 1997 *Also acting as Principal Executive Officer in the absence of a Chief Executive Officer, solely for the purpose of signing this Annual Report.
AMREP CORPORATION AND SUBSIDIARIES ---------------------------------- SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS (Page 1 of 2) ------------------------------------------------------------- (Thousands) Additions --------------------- Charges Balance at (Credits)to Charged Balance at Beginning Costs and to Other End of Period Expenses Accounts Deductions of Period ---------- --------- -------- ---------- --------- Description ----------- FOR THE YEAR ENDED APRIL 30, 1997: Allowance for doubtful accounts (included in receivables - real estate operations on the consolidated balance sheet)$ 598 $ 135 $ - $ 43 $ 690 ----------- --------- --------- ---------- ---------- Allowance for estimated returns and doubtful accounts (included in receivables - magazine circulation operations on the consolidated balance sheet)$ 57,940 $ (1,252) $ - $ 1,124 $ 55,564 ----------- --------- --------- ----------- ---------- Real estate valuation allowance $ 2,580 $ - $ - $ 121 $ 2,459 ----------- --------- --------- ---------- ---------- FOR THE YEAR ENDED APRIL 30, 1996: Allowance for doubtful accounts (included in receivables - real estate operations on the consolidated balance sheet)$ 608 $ 24 $ - $ 34(A) $ 598 ----------- --------- --------- -------- ---------- Allowance for estimated returns and doubtful accounts (included in receivables - magazine circulation operations on the consolidated balance sheet)$ 56,971 $ 1,365 $ - $ 396(A) $ 57,940 ----------- --------- --------- -------- ---------- Real estate valuation allowance $ 2,580 $ - $ - $ - $ 2,580 ----------- --------- --------- -------- ---------- AMREP CORPORATION AND SUBSIDIARIES ---------------------------------- SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS (Page 2 of 2) ------------------------------------------------------------- (Thousands) Additions Charges Balance at (Credits)to Charged Balance at Beginning Costs and to Other End of Period Expenses Accounts Deductions of Period ---------- --------- -------- ---------- --------- FOR THE YEAR ENDED APRIL 30, 1995: Allowance for doubtful accounts (included in receivables - real estate operations on the consolidated balance sheet) $ 693 $ 2 $ - $ 87(A) $ 608 ----------- --------- --------- -------- ---------- Allowance for estimated returns and doubtful accounts (included in receivables - magazine circulation operations on the consolidated balance sheet) $ 54,355 $ 2,984 $ - $ 368(A) $ 56,971 ----------- --------- --------- -------- ---------- Real estate valuation allowance $ 2,580 $ - $ - $ - $ 2,580 ----------- --------- --------- -------- ---------- NOTE: (A) Uncollectible accounts written off.
AMREP CORPORATION AND SUBSIDIARIES ---------------------------------- CONSOLIDATED BALANCE SHEETS (Page 2 of 2) ----------------------------------------- APRIL 30, 1996 AND 1995 ----------------------- (Dollar amounts in thousands except par value) LIABILITIES AND SHAREHOLDERS' EQUITY 1996 1995 ------------------------------------ ------------ ----------- ACCOUNTS PAYABLE, DEPOSITS AND ACCRUED EXPENSES $ 33,013 $ 32,048 NOTES PAYABLE: Amounts due within one year 16,923 6,214 Amounts subsequently due 35,036 50,015 RENTAL AND OTHER REAL ESTATE INVESTMENT FINANCING 223 2,891 COLLATERALIZED MORTGAGE OBLIGATIONS 2,209 2,533 DEFERRED INCOME TAXES 25,840 26,520 ---------- ----------- TOTAL LIABILITIES 113,244 120,221 ---------- ----------- COMMITMENTS AND CONTINGENCIES SHAREHOLDERS' EQUITY: Common stock, $.10 par value; shares authorized--20,000,000; shares issued and outstanding-- 7,398,650 in 1996, and 7,393,650 in 1995 740 739 Capital contributed in excess of par value 44,928 44,903 Retained earnings 23,064 20,279 Treasury stock, at cost; 30,000 shares in 1996 (180) - ---------- ---------- TOTAL SHAREHOLDERS' EQUITY 68,552 65,921 ---------- ---------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 181,796 $ 186,142 ========== ========== The accompanying notes to consolidated financial statements are an integral part of these consolidated balance sheets.
AMREP CORPORATION AND SUBSIDIARIES ---------------------------------- CONSOLIDATED STATEMENTS OF OPERATIONS ------------------------------------- (Amounts in thousands, except per share amounts) Year ended April 30, -------------------------------------- 1996 1995 1994 ----------- ----------- ----------- REVENUES: Real estate operations- Home and condominium sales $ 89,697 $ 88,084 $ 67,501 Land sales 8,901 11,734 13,126 Rental projects - - 3,741 Gain on partnership restructuring - - 1,245 --------- --------- --------- 98,598 99,818 85,613 Magazine circulation operations 56,693 46,186 35,029 Interest and other operations 6,511 6,521 5,446 --------- --------- --------- 161,802 152,525 126,088 --------- --------- --------- COSTS AND EXPENSES: Real estate cost of sales 78,891 81,939 64,439 Operating expenses- Magazine circulation operations 45,785 34,257 25,535 Rental operations - 980 5,525 Real estate commissions and selling 6,373 6,492 5,060 Other operations 6,376 6,034 5,319 General and administrative- Real estate operations and 9,083 7,621 8,146 corporate Magazine circulation operations 6,728 5,388 4,503 Interest, net 3,925 3,086 2,635 Real estate valuation provision - - 1,100 --------- --------- --------- 157,161 145,797 122,262 --------- --------- --------- Income before income taxes 4,641 6,728 3,826 PROVISION FOR INCOME TAXES 1,856 2,713 1,454 --------- --------- --------- NET INCOME $ 2,785 $ 4,015 $ 2,372 ========= ========= ========= NET INCOME PER SHARE $ 0.38 $ 0.55 $ 0.33 ========= ========= ========= WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING 7,384 7,345 7,091 ========= ========= ========= The accompanying notes to consolidated financial statements are an integral part of these consolidated statements.
AMREP CORPORATION AND SUBSIDIARIES ---------------------------------- CONSOLIDATED STATEMENTS OF CASH FLOWS (Page 1 of 2) --------------------------------------------------- (Amounts in thousands) Year ended April 30, ---------------------------------- 1996 1995 1994 --------- --------- --------- CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 2,785 $ 4,015 $ 2,372 Adjustments to reconcile net income to net cash provided (used) by operating activities- Depreciation and amortization 2,309 1,956 2,228 Changes in assets and liabilities- Receivables - net 250 131 (11,709) Real estate inventory 745 (1,362) (20,107) Rental and other real estate investments 3,411 2,552 2,710 Investment property 512 (147) 2,592 Other assets (223) (1,069) (1,887) Accounts payable, deposits and accrued expenses 965 (2,199) 8,785 Deferred income taxes (680) 2,356 1,773 Real estate valuation provision - - 1,100 Gain on restructuring of general partnership interest - - (1,245) Net cash provided (used) by --------- --------- --------- operating activities 10,074 6,233 (13,388) --------- --------- --------- CASH FLOWS FROM INVESTING ACTIVITIES: Capital expenditures (5,358) (3,116) (1,852) Proceeds from sale of property, plant and equipment 861 - - Payment for Fulfillment Corporation of America - net - (1,744) - Other - net - 600 400 --------- --------- --------- Net cash used by investing activities (4,497) (4,260) (1,452) --------- --------- --------- CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from debt financing 28,226 35,996 33,551 Principal debt payments (35,488) (35,803) (19,798) Proceeds from the sale of stock and exercise of stock options 26 477 854 Net cash provided (used) by --------- --------- --------- financing activities (7,236) 670 14,607 --------- --------- --------- Increase (decrease) in cash and cash equivalents (1,659) 2,643 (233) CASH AND CASH EQUIVALENTS, beginning of year 9,266 6,623 6,856 --------- --------- --------- CASH AND CASH EQUIVALENTS, end of year $ 7,607 $ 9,266 $ 6,623 ========= ========= ========= The accompanying notes to consolidated financial statements are an integral part of these consolidated statements.
AMREP CORPORATION AND SUBSIDIARIES ---------------------------------- CONSOLIDATED STATEMENTS OF CASH FLOWS (Page 2 of 2) --------------------------------------------------- (Amounts in thousands) Year ended April 30, ---------------------------------- 1996 1995 1994 --------- --------- --------- SUPPLEMENTAL CASH FLOW INFORMATION: Interest paid - net of amounts capitalized $ 3,634 $ 3,356 $ 3,736 ========= ========= ========= Income taxes paid $ 553 $ 233 $ 29 ========= ========= ========= SUPPLEMENTAL INFORMATION REGARDING NON-CASH INVESTING AND FINANCING ACTIVITIES: Stock issuance in connection with purchase of magazine circulation operations assets $ - $ - $ 4,101 ========= ========= ========= Restructuring of general partnership interests in The Classic and Colonial Pointe resulting in decreases in the following: Rental and other real estate investments $ - $ - $ 31,880 Accounts payable, deposits and accrued expenses - - 721 Project financing - - 32,004 ========= ========= ========= Purchase of treasury stock resulting in a decrease of receivable due from seller $ 180 $ - $ - ========= ========= ========= The accompanying notes to consolidated financial statements are an integral part of these consolidated statements.
(8) DEBT FINANCING: --------------- Debt financing consists of: April 30, -------------------------- 1996 1995 ------------ ------------ (Thousands) Notes payable - Line-of-credit borrowings - Real estate operations and other $ 13,846 $ 13,485 Magazine circulation operations 23,591 25,200 Mortgages and other notes payable 11,130 12,838 Fixed rate long-term note 2,257 3,386 Utility note payable 1,135 1,320 ------------ ------------ 51,959 56,229 PERMA Project financing (see Note 5) 223 2,891 Collateralized mortgage obligations (see Note 3) 2,209 2,533 ------------ ------------ $ 54,391 $ 61,653 ============ ============ The aggregate amount of debt maturities (after giving effect to extensions and renewals finalized subsequent to April 30, 1996) is as follows: PERMA and Collateralized Mortgage Year Ending April 30, Notes Payable Obligations Total - --------------------- -------------- ------------- ------------- (Thousands) 1997 $ 16,923 $ 223 $ 17,146 1998 6,902 - 6,902 1999 25,895 - 25,895 2000 1,594 - 1,594 2001 400 - 400 Thereafter 245 2,209 2,454 -------------- ------------- ------------- $ 51,959 $ 2,432 $ 54,391 ============== ============= ============= Line-of-credit borrowings ------------------------- The Company has several line-of-credit arrangements with various financial institutions to support general corporate and real estate operations.
(9) BENEFIT PLANS: -------------- Stock option plans ------------------ A summary of activity in the Company's 1992 Stock Option Plan, the Non-Employee Directors Option Plan and the 1982 Incentive Stock Option Plan is presented below: Year Ended April 30, ---------------------------------------- 1996 1995 1994 ------------ ------------ ------------ Common stock options outstanding at beginning of year 225,600 249,325 248,000 Granted at $5.13 to $8.88 per share 3,000 96,500 43,000 Options exercised at $4.06 to $7.44 per share (5,000) (96,025) (16,547) Expired or cancelled (102,600) (24,200) (25,128) ------------ ------------ ------------ Common stock options outstanding at end of year 121,000 225,600 249,325 ============ ============ ============ Available for future grant at year end 201,750 186,750 282,000 ============ ============ ============ During fiscal 1993, the shareholders approved the 1992 Stock Option Plan as well as the Non-Employee Directors Option Plan for which 315,000 and 15,000 shares, respectively, were reserved.
Net periodic pension cost for fiscal 1996, 1995 and 1994 was comprised of the following components: Year Ended April 30, ---------------------------------------- 1996 1995 1994 ------------ ------------- ----------- (Thousands) Service cost - benefits earned during the period $ 1,045 $ 854 $ 762 Interest cost on projected benefit obligation 1,593 1,283 1,122 Actual return on assets (2,792) (962) (673) Net amortization and deferral 1,134 (449) (599) ------------ ------------ ------------ Net periodic pension cost $ 980 $ 726 $ 612 ============ ============ ============ Assumptions used in the accounting were: Year Ended April 30, ---------------------------------------- 1996 1995 1994 ------------ ------------ ------------ Discount rates 8.00% 8.00% 8.00% Rates of increase in compensation levels 4.50-5.00% 4.50-5.00% 5.00% Expected long-term rate of return on assets 8.00-9.00% 8.00-9.00% 9.00% The following table sets forth the plans' funded status and amounts recognized in the Company's consolidated balance sheets: April 30, -------------------------- 1996 1995 ------------ ------------ (Thousands) Actuarial present value of benefit obligations: Vested benefit obligation $ 17,043 $ 15,741 ============ ============ Accumulated benefit obligation $ 18,087 $ 16,712 ============ ============ Projected benefit obligation $ 21,955 $ 20,188 Assets at fair value 21,505 18,693 ------------ ------------ Excess of projected benefit obligation over assets (450) (1,495) Unrecognized net loss 1,623 2,658 Unrecognized prior service cost (benefit) (50) (51) Unrecognized net transition asset (139) (278) ------------ ------------ Prepaid pension cost $ 984 $ 834 ============ ============ (10) INCOME TAXES: ------------- The Company adopted Statement of Financial Accounting Standards (SFAS) No.
The provision for income taxes consists of the following: Year Ended April 30, ---------------------------------------- 1996 1995 1994 ------------ ------------ ------------ (Thousands) Current: Federal $ 2,414 $ 232 $ (405) State and local 123 125 86 ------------ ------------ ------------ 2,537 357 (319) ------------ ------------ ------------ Deferred: Federal (582) 2,105 3,980 State and local (99) 363 384 Benefit for operating loss carryforwards - - (5,826) Net change in valuation allowance - (112) 3,235 ------------ ------------ ------------ (681) 2,356 1,773 ------------ ------------ ------------ Total provision for income taxes $ 1,856 $ 2,713 $ 1,454 ============ ============ ============ Components of net deferred income tax liability are as follows: April 30, --------------------------- 1996 1995 ------------ ------------ (Thousands) Deferred income tax assets- Tax loss carryforwards (Federal and state) $ 7,264 $ 5,953 Real estate inventory valuation 1,446 1,454 Other 1,061 1,090 ------------ ------------ Total deferred income tax assets 9,771 8,497 ------------ ------------ Deferred income tax liabilities- Installment sales (3,071) (1,998) Reserve for periodicals and paperbacks (19,295) (20,032) Gain on partnership restructuring (473) (473) Depreciable assets (1,010) (956) Expenses capitalized for financial reporting purposes, expensed for tax (2,345) (2,127) Differences related to timing of partnership income (1,494) (1,545) Other (4,800) (4,763) ------------ ------------ Total deferred income tax liability (32,488) (31,894) ------------ ------------ Valuation allowance for realization of state taxloss carryforwards (3,123) (3,123) ------------ ------------ Net deferred income tax liability $ (25,840) $ (26,520) ============ ============ The following table reconciles taxes computed at the U.S. Federal statutory income tax rate to the Company's actual tax provision: Year ended April 30, ---------------------------------------- 1996 1995 1994 ------------ ------------- ----------- (Thousands) Computed tax provision at statutory rate $ 1,578 $ 2,288 $ 1,301 Increase (reduction) in tax resulting from: State income taxes, net of 269 442 153 Federal income tax effect Reduction in valuation allowance - (112) - Other 9 95 - ------------ ------------ ------------ Actual tax provision $ 1,856 $ 2,713 $ 1,454 ============ ============ ============ The tax provision for fiscal 1996 has been calculated in accordance with Internal Revenue Service (IRS) regulations for Section 458 related to an adjustment to taxable income for the return of magazines following the close of a tax year, and differs from the procedure used in prior periods.
/s/Mohan Vachani /s/Peter M. Pizza ---------------- ----------------- Mohan Vachani Peter M. Pizza Senior Vice President - Chief Controller Financial Officer and Director, Dated: July 26, 1996 Principal Financial Officer* Dated: July 26, 1996 /s/Jerome Belson /s/Daniel Friedman ---------------- ------------------ Jerome Belson Daniel Friedman Director Director Dated: July 26, 1996 Dated: July 26, 1996 /s/Edward B. Cloues, II /s/Nicholas G. Karabots ----------------------- ----------------------- Edward B. Cloues, II Nicholas G.Karabots Director Director Dated: July 26, 1996 Dated: July 26, 1996 /s/David N. Dinkins /s/Samuel N. Seidman ------------------- -------------------- David N. Dinkins Samuel N. Seidman Director Director Dated: July 26, 1996 Dated: July 26, 1996 /s/Harvey I. Freeman /s/James Wall -------------------- ------------- Harvey I. Freeman James Wall Director Director Dated: July 26, 1996 Dated: July 26, 1996 *Also acting as Principal Executive Officer in the absence of a Chief Executive Officer, solely for the purpose of signing this Annual Report.
AMREP CORPORATION AND SUBSIDIARIES ---------------------------------- SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS (Page 1 of 2) ------------------------------------------------------------- (Thousands) Additions ------------------- Charges (Credits) Balance at to Costs Charged Balance at Beginning and to Other End of Period Expenses Accounts Deductions of Period --------- -------- -------- ---------- ---------- Description ----------- FOR THE YEAR ENDED APRIL 30, 1996: Allowance for doubtful accounts (included in receivables - real estate operations on the consolidated balance sheet $ 608 $ 24 $ - $ 34(A) $ 598 ----------- --------- --------- ----------- ---------- Allowance for estimated returns and doubtful accounts (included in receivables - magazine circulation operations on the consolidated balance sheet) $ 56,971 $ 1,365 $ - $ 396(A) $ 57,940 ----------- --------- --------- ----------- ---------- Real estate valuation reserve $ 2,580 $ - $ - $ - $ 2,580 ----------- --------- --------- ----------- ---------- FOR THE YEAR ENDED APRIL 30, 1995: Allowance for doubtful accounts (included in receivables - real estate operations on the consolidated balance sheet) $ 693 $ 2 $ - $ 87(A) $ 608 ----------- --------- --------- ---------- ---------- Allowance for estimated returns and doubtful accounts (included in receivables - magazine circulation operations on the consolidated balance sheet) $ 54,355 $ 2,984 $ - $ 368(A) $ 56,971 ----------- --------- --------- ---------- ---------- Real estate valuation reserve $ 2,580 $ - $ - $ - $ 2,580 ----------- --------- --------- --------- ---------- AMREP CORPORATION AND SUBSIDIARIES ---------------------------------- SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS (Page 2 of 2) ------------------------------------------------------------- (Thousands) Additions ------------------- Charges (Credits) Balance at to Costs Charged Balance at Beginning and to Other End of Period Expenses Accounts Deductions of Period --------- -------- -------- ---------- ---------- FOR THE YEAR ENDED APRIL 30, 1994: Allowance for doubtful accounts (included in receivables - real estate operations on the consolidated balance sheet) $ 1,000 $ 116 $ - $ 423(A) $ 693 --------- -------- --------- ---------- --------- Allowance for estimated returns and doubtful accounts (included in receivables - magazine circulation operations on the consolidated balance sheet) $ 45,440 $ 9,230 $ - $ 315(A) $ 54,355 ----------- --------- --------- ---------- --------- Real estate valuation reserve $ 3,180 $ 1,100 $ - $ 1,700(B) $ 2,580 ----------- --------- --------- ---------- ---------- NOTE: (A) Uncollectible accounts written off.
- ------- ------------------------ (In thousands of dollars except per share amounts) Year Ended April 30, ------------------------------------------------------ 1995 1994 1993 1992 1991 ---------- ---------- ---------- ---------- ---------- Revenues $ 152,525 $ 126,088 $ 93,660 $ 73,365 $ 69,567 Income (Loss) Continuing operations $ 4,015 $ 2,372 $ 41 $ (6,826) $ (6,161) Gain on sale of discontinued operations - - - - 1,873 ---------- ---------- ---------- ---------- ---------- Net Income (Loss) $ 4,015 $ 2,372 $ 41 $ (6,826) $ (4,288) ========== ========== ========== ========== ========== Income (Loss) Per Share Continuing operations $ 0.55 $ 0.33 $ 0.01 $ (1.03) $ (0.93) Gain on sale of discontinued operations - - - - 0.28 ---------- ---------- ---------- ---------- ---------- Net Income (Loss) Per Share $ 0.55 $ 0.33 $ 0.01 $ (1.03) $ (0.65) ========== ========== ========== ========== ========== Total Assets $ 186,142 $ 178,857 $ 179,944 $ 168,390 $ 181,361 Notes Payable 56,229 50,738 31,899 34,462 37,914 Project Financing 2,891 6,205 41,228 32,164 32,251 Collateralized Mortgage Obligations 2,533 4,406 6,473 7,390 8,407 Shareholders' Equity 65,921 61,429 54,102 54,055 60,881 Cash Dividends - - - - - Item 7.
AMREP CORPORATION AND SUBSIDIARIES ---------------------------------- CONSOLIDATED BALANCE SHEETS (Page 2 of 2) ------------------------------------------ APRIL 30, 1995 AND 1994 ----------------------- (Dollar amounts in thousands except par value) LIABILITIES AND SHAREHOLDERS' EQUITY 1995 1994 ------------------------------------ ---------- --------- ACCOUNTS PAYABLE, DEPOSITS AND ACCRUED EXPENSES $ 32,048 $ 31,915 NOTES PAYABLE: Amounts due within one year 6,214 12,725 Amounts subsequently due 50,015 38,013 RENTAL AND OTHER REAL ESTATE PROJECT FINANCING 2,891 6,205 COLLATERALIZED MORTGAGE OBLIGATIONS 2,533 4,406 DEFERRED INCOME TAXES 26,520 24,164 ---------- --------- TOTAL LIABILITIES 120,221 117,428 ---------- --------- COMMITMENTS AND CONTINGENCIES SHAREHOLDERS' EQUITY: Common stock, $.10 par value; shares authorized--20,000,000; shares issued and outstanding-- 7,393,650 in 1995, and 7,297,625 in 1994 739 730 Capital contributed in excess of par value 44,903 44,435 Retained earnings 20,279 16,264 ---------- --------- TOTAL SHAREHOLDERS' EQUITY 65,921 61,429 ---------- --------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 186,142 $ 178,857 ========== ========= The accompanying notes to consolidated financial statements are an integral part of these consolidated balance sheets.
AMREP CORPORATION AND SUBSIDIARIES ---------------------------------- CONSOLIDATED STATEMENTS OF OPERATIONS ------------------------------------- (Amounts in thousands, except per share amounts) Year ended April 30, -------------------------------- 1995 1994 1993 ---------- ---------- ---------- REVENUES: Real estate operations- Home and condominium sales $ 88,084 $ 67,501 $ 43,944 Land sales 11,734 13,126 8,004 Rental projects - 3,741 5,845 Gain on partnership restructuring - 1,245 - ---------- ---------- ---------- 99,818 85,613 57,793 Magazine circulation operations 46,186 35,029 29,529 Interest and other operations 6,521 5,446 6,338 ---------- ---------- ---------- 152,525 126,088 93,660 ---------- ---------- ---------- COSTS AND EXPENSES: Real estate cost of sales 81,939 64,439 39,800 Operating expenses- Magazine circulation operations 34,257 25,535 21,592 Rental operations 980 5,525 7,682 Real estate commissions and selling 6,492 5,060 4,623 Other operations 6,034 5,319 4,637 General and administrative- Real estate operations and corporate 7,621 8,146 7,164 Magazine circulation operations 5,388 4,503 5,068 Interest, net 3,086 2,635 3,028 Real estate valuation provision - 1,100 - ---------- ---------- ---------- 145,797 122,262 93,594 ---------- ---------- ---------- Income before income taxes 6,728 3,826 66 PROVISION FOR INCOME TAXES 2,713 1,454 25 ---------- ---------- ---------- NET INCOME $ 4,015 $ 2,372 $ 41 ========== ========== ========== NET INCOME PER SHARE $ 0.55 $ 0.33 $ 0.01 ========== ========== ========== WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING 7,345 7,091 6,618 ========== ========== ========== The accompanying notes to consolidated financial statements are an integral part of these consolidated statements.
AMREP CORPORATION AND SUBSIDIARIES ---------------------------------- CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY ----------------------------------------------- (Amounts in thousands) Capital Contributed In Excess Common Stock of ------------ Par Retained Shares Amount Value Earnings Total ------ ------ ----- -------- ----- BALANCE, April 30, 1992 6,618 $ 662 $ 39,542 $13,851 $54,055 Net income - - - 41 41 Stock issuance 1 - 6 - 6 -------- -------- -------- -------- ------- BALANCE, April 30, 1993 6,619 662 39,548 13,892 54,102 Net income - - - 2,372 2,372 Stock issuance in connection with purchase of magazine circulation operations assets 576 58 4,043 - 4,101 Stock issuance in connection with restructuring of general partnership interest in The Classic 66 7 589 - 596 Exercise of stock options and other stock issuance 37 3 255 - 258 -------- -------- -------- -------- ------- BALANCE, April 30, 1994 7,298 730 44,435 16,264 61,429 Net income - - - 4,015 4,015 Exercise of stock options 96 9 468 - 477 -------- -------- -------- -------- ------- BALANCE, April 30, 1995 7,394 $ 739 $ 44,903 $20,279 $65,921 ======== ======== ======== ======== ======= The accompanying notes to consolidated financial statements are an integral part of these consolidated statements.
(8) DEBT FINANCING: --------------- Debt financing consists of: April 30, ------------------------ 1995 1994 ---------- ---------- (Thousands) Notes payable - Line-of-credit borrowings - Real estate operations and other $ 11,462 $ 8,557 Magazine circulation operations 25,200 22,530 Denver real estate operations 8,804 7,745 Mortgages and other notes payable 6,057 5,895 Fixed rate long-term note 3,386 4,515 Utility note payable 1,320 1,496 ---------- ---------- 56,229 50,738 PERMA Project financing (see Note 5) 2,891 6,205 Collateralized mortgage obligations (see Note 3) 2,533 4,406 ---------- ---------- $ 61,653 $ 61,349 ========== ========== The aggregate amount of debt maturities (after giving effect to extensions and renewals finalized subsequent to April 30, 1995) is as follows: PERMA and Collateralized Mortgage Year Ending April 30, Notes Payable Obligations Total ----------------------- --------------- -------------- ------------ (Thousands) 1996 $ 6,214 $ 2,891 $ 9,105 1997 41,493 - 41,493 1998 4,446 - 4,446 1999 1,836 - 1,836 2000 1,595 - 1,595 Thereafter 645 2,533 3,178 --------------- -------------- ------------ $ 56,229 $ 5,424 $ 61,653 =============== ============== ============ Line-of-credit borrowings- ------------------------- The Company has several line-of-credit arrangements with various financial institutions to support general corporate and real estate operations.
Net periodic pension cost for fiscal 1995, 1994 and 1993 was comprised of the following components: Year ended April 30, ----------------------------------- 1995 1994 1993 ---------- ---------- ----------- (Thousands) Service cost - benefits earned during the period $ 854 $ 762 $ 709 Interest cost on projected benefit obligation 1,283 1,122 1,012 Actual return on assets (962) (673) (1,022) Net amortization and deferral (449) (599) (132) ---------- ---------- ----------- Net periodic pension cost $ 726 $ 612 $ 567 ========== ========== =========== Assumptions used in the accounting were: Year ended April 30, ----------------------------------- 1995 1994 1993 ---------- ---------- ----------- Discount rates 8.00% 8.00% 8.25% Rates of increase in compensation levels 4.50-5.00% 5.00% 5.25% Expected long-term rate of return on assets 8.00-9.00% 9.00% 9.00% The following table sets forth the plans' funded status and amounts recognized in the Company's consolidated balance sheets: April 30, ------------------------ 1995 1994 ---------- ---------- (Thousands) Actuarial present value of benefit obligations: Vested benefit obligation $ 15,741 $ 11,377 ========== ========== Accumulated benefit obligation $ 16,712 $ 12,153 ========== ========== Projected benefit obligation $ 20,188 $ 15,468 Assets at fair value 18,693 13,736 ---------- ---------- Excess of projected benefit obligation over assets (1,495) (1,732) Unrecognized net loss 2,658 2,472 Unrecognized prior service cost (benefit) (51) 99 Unrecognized net transition asset (278) (417) ---------- ---------- Prepaid pension cost $ 834 $ 422 ========== ========== (10) INCOME TAXES: ------------- Effective May 1, 1993, the Company adopted Statement of Financial Accounting Standards (SFAS) No.
The provision for income taxes consists of the following: Year ended April 30, ----------------------------------- 1995 1994 1993 ---------- ---------- ----------- (Thousands) Current: Federal $ 232 $ (405) $ (960) State and local 125 86 11 ---------- ---------- ----------- 357 (319) (949) ---------- ---------- ----------- Deferred: Federal 2,105 3,980 982 State and local 363 384 (8) Benefit for operating loss carryforwards - (5,826) - Net change in valuation allowance (112) 3,235 - ---------- ---------- ----------- 2,356 1,773 974 ---------- ---------- ----------- Total provision for income taxes $ 2,713 $ 1,454 $ 25 ========== ========== =========== Components of net deferred income tax liability are as follows: April 30, ------------------------ 1995 1994 ---------- ---------- (Thousands) Deferred income tax assets- Tax loss carryforwards (Federal and state) $ 5,953 $ 5,826 Real estate inventory valuation 1,454 1,607 Other 1,090 708 ---------- ---------- Total deferred income tax assets 8,497 8,141 ---------- ---------- Deferred income tax liabilities- Installment sales (1,998) (2,843) Reserve for periodicals and paperbacks (20,032) (16,853) Gain on partnership restructuring (473) (473) Depreciable assets (956) (1,138) Expenses capitalized for financial reporting purposes, expensed for tax (2,127) (1,967) Differences related to timing of partnership income (1,545) (1,033) Other (4,763) (4,763) ---------- ---------- Total deferred income tax liability (31,894) (29,070) ---------- ---------- Valuation allowance for realization of of state tax loss carryforwards (3,123) (3,235) ---------- ---------- Net deferred income tax liability $ (26,520) $ (24,164) ========== ========== The following table reconciles taxes computed at the U.S. Federal statutory income tax rate to the Company's actual tax provision: Year ended April 30, ----------------------------------- 1995 1994 1993 ---------- ---------- ----------- (Thousands) Computed tax provision at statutory rate $ 2,288 $ 1,301 $ 23 Increase (reduction) in tax resulting from: State income taxes, net of Federal income tax effect 442 153 2 Reduction in valuation alowance (112) - - Other 95 - - ---------- ---------- ----------- Actual tax provision $ 2,713 $ 1,454 $ 25 ========== ========== =========== At April 30, 1995, the Company had Federal net operating loss carryforwards totaling $6,396,000, all of which expire in fiscal 2009.
The following schedules set forth summarized data relative to the industry segments: [CAPTION] Selected Quarterly Financial Data (Unaudited) (In thousands of dollars except per share amounts) Quarter Ended --------------------------------------------------- July 31, October 31, January 31, April 30, 1994 1994 1995 1995 ------------ ------------ ------------ ------------ Revenues $ 35,755 $ 35,911 $ 37,960 $ 42,899 Real estate cost of sales 19,925 19,587 19,978 22,448 Operating expenses 10,156 11,572 11,949 14,086 Net Income $ 1,010 $ 715 $ 1,175 $ 1,115 ============ ============ ============ ============ Net Income Per Share $ 0.14 $ 0.10 $ 0.16 $ 0.15 ============ ============ ============ ============ Quarter Ended --------------------------------------------------- July 31, October 31, January 31, April 30, 1993 1993 1994 1994 ------------ ------------ ------------ ------------ Revenues $ 31,012 $ 29,092 $ 31,382 $ 34,602 Real estate cost of sales 15,782 14,150 16,305 18,202 Operating expenses (A) 10,553 10,911 9,804 10,171 Net Income (B) $ 634 $ 164 $ 664 $ 910 ============ ============ ============ ============ Net Income Per Share (B) $ 0.10 $ 0.02 $ 0.09 $ 0.12 ============ ============ ============ ============ (A) As discussed in Note 1 of Notes to Consolidated Financial Statements certain amounts have been reclassified to conform with fiscal year 1995 presentation.
/s/ Mohan Vachani ----------------- Anthony B. Gliedman Mohan Vachani Chairman of the Board, Senior Vice President - Chief President and Director Financial Officer and Director Principal Executive Officer Principal Financial Officer* Dated: July 28, 1995 /s/ Peter M. Pizza /s/ Harvey I. Freeman ------------------ --------------------- Peter M. Pizza Harvey I. Freeman Controller Director Dated: July 28, 1995 Dated: July 28, 1995 /s/ Jerome Belson /s/ Daniel Friedman ----------------- ------------------- Jerome Belson Daniel Friedman Director Director Dated: July 28, 1995 Dated: July 28, 1995 /s/ Edward B. Cloues, II ------------------------ ------------------------ Edward B. Cloues, II Nicholas G. Karabots Director Director Dated: July 28, 1995 Dated: /s/ Joseph Cohen /s/ Samuel N. Seidman ---------------- --------------------- Joseph Cohen Samuel N. Seidman Director Director Dated: July 28, 1995 Dated: July 28, 1995 /s/ James Wall -------------------- -------------- David N. Dinkins James Wall Director Director Dated: Dated: July 28, 1995 * Also acting as Principal Executive Officer in the absence of the Chief Executive Officer, solely for the purpose of signing this Annual Report.
AMREP CORPORATION AND SUBSIDIARIES ---------------------------------- CONSOLIDATED BALANCE SHEETS (Page 2 of 2) ------------------------------------------ APRIL 30, 1994 AND 1993 ----------------------- (Dollar amounts in thousands except par value) ---------------------------------------------- LIABILITIES AND SHAREHOLDERS' EQUITY 1994 1993 ------------------------------------ ----------- ----------- ACCOUNTS PAYABLE, DEPOSITS AND ACCRUED EXPENSES $ 31,915 $ 23,851 NOTES PAYABLE: Amounts due within one year 12,725 8,044 Amounts subsequently due 38,013 23,855 RENTAL AND OTHER REAL ESTATE PROJECT FINANCING 6,205 41,228 COLLATERALIZED MORTGAGE OBLIGATIONS 4,406 6,473 DEFERRED INCOME TAXES 24,164 22,391 ---------- ---------- TOTAL LIABILITIES 117,428 125,842 ---------- ---------- COMMITMENTS AND CONTINGENCIES SHAREHOLDERS' EQUITY: Common stock, $.10 par value; shares authorized--20,000,000; shares issued and outstanding-- 7,297,625 in 1994 and 6,619,292 in 1993 730 662 Capital contributed in excess of par value 44,435 39,548 Retained earnings 16,264 13,892 ---------- ---------- TOTAL SHAREHOLDERS' EQUITY 61,429 54,102 ---------- ---------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 178,857 $ 179,944 ========== ========== The accompaning notes to consolidated financial statements are an integral part of these consolidated statements.
AMREP CORPORATION AND SUBSIDIARIES ---------------------------------- CONSOLIDATED STATEMENTS OF OPERATIONS ------------------------------------- (Amounts in thousands, except per share amounts) Year ended April 30, -------------------------------- 1994 1993 1992 ---------- ---------- ---------- REVENUES: Real estate operations- Home and condominium sales $ 67,501 $ 43,944 $ 30,347 Land sales 13,126 8,004 5,843 Rental projects 3,741 5,845 4,569 Gain on partnership restructuring 1,245 - - --------- --------- --------- 85,613 57,793 40,759 Magazine circulation operations 35,029 29,529 27,034 Interest and other operations 5,446 6,338 5,572 --------- --------- --------- 126,088 93,660 73,365 --------- --------- --------- COSTS AND EXPENSES: Real estate cost of sales 64,439 39,800 26,756 Operating expenses- Magazine circulation operations 24,859 21,532 20,049 Rental projects 5,525 7,682 7,566 Real estate commissions and selling 5,475 5,008 4,672 Other operations 4,340 3,880 3,228 General and administrative- Real estate operations and corporate 8,710 7,536 8,989 Magazine circulation operations 5,179 5,128 4,847 Interest, net 2,635 3,028 3,843 Real estate valuation provision 1,100 - 4,425 --------- --------- --------- 122,262 93,594 84,375 --------- --------- --------- Income (loss) before income taxes 3,826 66 (11,010) PROVISION (BENEFIT) FOR INCOME TAXES 1,454 25 (4,184) --------- --------- --------- NET INCOME (LOSS) $ 2,372 $ 41 $ (6,826) ========= ========= ========= NET INCOME (LOSS) PER SHARE $ 0.33 $ 0.01 $ (1.03) ========= ========= ========= WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING 7,091 6,618 6,618 ========= ========= ========= The accompaning notes to consolidated financial statements are an integral part of these consolidated statements.
AMREP CORPORATION AND SUBSIDIARIES ---------------------------------- CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY ----------------------------------------------- (Amounts in thousands) AMREP CORPORATION AND SUBSIDIARIES ---------------------------------- CONSOLIDATED STATEMENTS OF CASH FLOWS (Page 1 of 2) --------------------------------------------------- (Amounts in thousands) AMREP CORPORATION AND SUBSIDIARIES ---------------------------------- CONSOLIDATED STATEMENTS OF CASH FLOWS (Page 2 of 2) --------------------------------------------------- (Amounts in thousands) AMREP CORPORATION AND SUBSIDIARIES ---------------------------------- NOTES TO CONSOLIDATED FINANCIAL STATEMENTS ------------------------------------------ (1) SUMMARY OF SIGNIFICANT ACCOUNTING AND FINANCIAL ----------------------------------------------- REPORTING POLICIES: ------------------- Principles of consolidation- --------------------------- The consolidated financial statements include the accounts of AMREP Corporation (Company) an Oklahoma corporation, and its subsidiaries.
(7) DEBT FINANCING: --------------- Debt financing consists of: April 30, ------------------------- 1994 1993 ---------- ----------- (Thousands) Notes payable - Fixed rate long-term note $ 4,515 $ 6,000 Line-of-credit borrowings - Real estate operations and other 8,557 3,825 Magazine circulation operations 22,530 14,623 Denver real estate operations 7,745 - Utility note payable 1,496 1,686 Mortgages and other notes payable 5,895 5,765 --------- ---------- 50,738 31,899 PERMA Project financing (see Note 4) 6,205 9,159 Rental project financing (see Note 4) - 32,069 Collateralized mortgage obligations (see Note 2) 4,406 6,473 --------- ---------- $ 61,349 $ 79,600 ========== ========== The aggregate amounts of debt maturities (after giving effect to extensions and renewals subsequent to April 30, 1994) are as follows: PERMA Project Financing and Collateralized Year Ending Notes Mortgage April 30, Payable Obligations Total -------------- ----------- ----------- ---------- (Thousands) 1995 $ 12,725 $ - $ 12,725 1996 26,811 6,205 33,016 1997 4,310 - 4,310 1998 3,972 - 3,972 1999 1,437 - 1,437 Thereafter 1,483 4,406 5,889 ----------- ---------- --------- $ 50,738 $ 10,611 $ 61,349 =========== ========== ========= Fixed Rate Long Term Note- ------------------------- During fiscal 1993, the Company exercised its option to exchange a $5,644,000 variable rate note maturing August 1, 1992 for a five-year, 8.464% fixed rate note with quarterly interest payments beginning November 1, 1992 and annual principal payments beginning August 1, 1993.
Net periodic pension cost for fiscal 1994, 1993 and 1992 was comprised of the following components: Year Ended April 30, --------------------------------- 1994 1993 1992 ---------- ---------- --------- (Thousands) Service cost - benefits earned during the period $ 762 $ 709 $ 582 Interest cost on projected benefit obligation 1,122 1,012 892 Actual return on assets (673) (1,022) (1,160) Net amortization and deferral (599) (132) 71 -------- -------- -------- Net periodic pension cost $ 612 $ 567 $ 385 ======== ======== ======== Assumptions used in the accounting were: Year Ended April 30, -------------------------------- 1994 1993 1992 -------- -------- --------- Discount rates 8.00% 8.25% 8.25% Rates of increase in compensation levels 5.00% 5.25% 5.25% Expected long-term rate of return on assets 9.00% 9.00% 9.00% The following table sets forth the plan's funded status and amounts recognized in the Company's consolidated balance sheets: April 30, ------------------------- 1994 1993 ----------- ----------- (Thousands) Actuarial present value of benefit obligations: Vested benefit obligation $ 11,377 $ 10,093 =========== =========== Accumulated benefit obligation $ 12,153 $ 10,732 =========== =========== Projected benefit obligation $ 15,468 $ 13,671 Plan assets at fair value 13,736 13,042 ----------- ----------- Excess of projected benefit obligation over plan assets (1,732) (629) Unrecognized net loss 2,472 1,416 Unrecognized prior service cost 99 110 Unrecognized net transition asset (417) (556) ----------- ----------- Prepaid pension cost $ 422 $ 341 =========== =========== (9) INCOME TAXES: ------------ Effective May 1, 1993, the Company adopted Statement of Financial Accounting Standards (SFAS) No.
The provision (benefit) for income taxes consists of the following: Year Ended April 30, ---------------------------------- 1994 1993 1992 ---------- ---------- ---------- (Thousands) Current: Federal $ (405) $ (960) $ (647) State 86 11 23 ---------- ---------- ---------- (319) (949) (624) ---------- ---------- ---------- Deferred: Federal 3,980 982 (2,773) State 384 (8) (787) Benefit for operating loss carry forwards (5,826) - - Net change in valuation allowance 3,235 - - ---------- ---------- ---------- 1,773 974 (3,560) ---------- ---------- ---------- Total provision (benefit) for income taxes $ 1,454 $ 25 $ (4,184) ========== ========== ========== Components of net deferred income tax liability are as follows: Year ended April 30, -------------------------------- 1994 1993 ------------- ------------- (Thousands) Deferred income tax assets- Tax loss carryforwards (Federal and state) $ 5,826 $ - Real estate inventory valuation 1,607 1,004 Other 708 - ------------ ------------ Total deferred income tax assets 8,141 1,004 ------------ ------------ Deferred income tax liabilities- Installment sales (2,843) (3,268) Reserve for periodicals and paperbacks (16,853) (10,653) Gain on partnership restructuring (473) - Depreciable assets (1,138) (2,104) Expenses capitalized for financial reporting purposes, expensed for tax (1,967) (1,144) Differences related to timing of partnership income (1,033) (132) Other (4,763) (6,094) ------------ ------------ Total deferred income tax liability (29,070) (23,395) ------------ ------------ Valuation allowance for realization of state tax loss carryforwards (3,235) - ------------ ------------ Net deferred income tax liability $ (24,164) $ (22,391) ============ ============ The following table reconciles taxes at the U.S. Federal statutory income tax rate to the Company's actual tax provision (benefit): Year ended April 30, ---------------------------------- 1994 1993 1992 ---------- ---------- ---------- (Thousands) Computed tax provision (benefit) at statutory rate $ 1,301 $ 23 $ (3,743) Increase (reduction) in tax resulting from: State income taxes, net of Federal income tax effect 153 2 (504) Other - - 63 ---------- ---------- ---------- Actual tax provision (benefit) $ 1,454 $ 25 $ (4,184) ========== ========== ========== At April 30, 1994, the Company had Federal net operating loss carryforwards totaling $5,347,189, of which $1,000,944 expire in fiscal year 2007 and $4,346,245 in fiscal year 2009.
The following schedules set forth summarized data relative to the industry segments: Selected Quarterly Financial Data (Unaudited) - - --------------------------------------------- (In thousands of dollars except per share amounts) Quarter Ended -------------------------------------------------- July 31, October 31, January 31, April 30, 1993 1993 1994 1994 ------------- ---------- ---------- ----------- Revenues $ 31,012 $ 29,092 $ 31,382 $ 34,602 Real estate cost of sales 15,782 14,150 16,305 18,202 Operating expenses 10,360 9,514 10,746 9,579 Net Income (A) $ 634 $ 164 $ 664 $ 910 ========== ========== ========== =========== Net Income Per Share (A) $ 0.10 $ 0.02 $ 0.09 $ 0.12 ========== ========== ========== =========== Quarter Ended -------------------------------------------------- July 31, October 31, January 31, April 30, 1992 1992 1993 1993 ------------- ---------- ---------- ----------- Revenues $ 21,979 $ 23,529 $ 22,431 $ 25,721 Real estate cost of sales 8,879 10,175 9,360 11,386 Operating expenses (B) 8,972 9,292 9,632 10,206 Net Income (Loss) $ 237 $ 61 $ (393) $ 136 ========== ========== ========== =========== Net Income (Loss) Per Share $ 0.04 $ 0.01 $ (0.06) $ 0.02 ========== ========== ========== =========== (A) As discussed in Note 3 of Notes to Consolidated Financial Statements, during the fourth quarter of fiscal year 1994, the Company reduced the carrying value of real estate inventory by $1,100,000.
/s/ Anthony B. Gliedman /s/ Mohan Vachani ----------------------- ----------------- Anthony B. Gliedman Mohan Vachani Chairman of the Board, Senior Vice President - Chief President and Director Financial Officer and Director Principal Executive Officer Principal Financial Officer Dated: July 28, 1994 Dated: July 28, 1994 /s/ Rudolph J. Skalka --------------------- ------------------- Rudolph J. Skalka Mitchell Roberts Vice President-Finance Director Principal Accounting Officer Dated: July 28, 1994 Dated: July , 1994 /s/ Jerome Belson /s/ Samuel N. Seidman ----------------- --------------------- Jerome Belson Samuel N. Seidman Director Director Dated: July 28, 1994 Dated: July 28, 1994 /s/ Joseph Cohen ---------------- ------------------ Joseph Cohen S. Fred Singer Director Director Dated: July 28, 1994 Dated: July , 1994 /s/ Daniel Friedman /s/ James Wall ------------------- -------------- Daniel Friedman James Wall Director Director Dated: July 28, 1994 Dated: July 28, 1994 ---------------- Nick G. Karabots Director Dated: July , 1994 AMREP CORPORATION AND SUBSIDIARIES ---------------------------------- SCHEDULE II - AMOUNTS RECEIVABLE FROM RELATED PARTIES ----------------------------------------------------- AND UNDERWRITERS, PROMOTERS, AND EMPLOYEES ------------------------------------------ OTHER THAN RELATED PARTIES -------------------------- Balance at beginning Balance at end Name of debtor of period Additions Deductions of period - - ---------------------- ---------- ----------- ------------ -------------- Anthony Gliedman, CEO, loan to acquire AMREP Corporation stock, due 12/17/98, interest payments due annually at 6.896% $ - $ 150,500 $ - $ 150,500 AMREP CORPORATION AND SUBSIDIARIES ---------------------------------- SCHEDULE VIII - VALUATION AND QUALIFYING ACCOUNTS (Page 1 of 2) - - --------------------------------------------------------------- (Thousands) AMREP CORPORATION AND SUBSIDIARIES ---------------------------------- SCHEDULE VIII - VALUATION AND QUALIFYING ACCOUNTS (Page 2 of 2) - - --------------------------------------------------------------- (Thousands) AMREP CORPORATION AND SUBSIDIARIES ---------------------------------- SCHEDULE X - SUPPLEMENTARY INCOME STATEMENT ------------------------------------------- INFORMATION ----------- Amount Charged To Costs and Expenses (Thousands) Description --------------- ----------- FOR THE YEAR ENDED APRIL 30, 1994: Amortization of deferred costs $ 3,709 FOR THE YEAR ENDED APRIL 30, 1993: Maintenance and repairs $ 1,020 Amortization of deferred costs $ 2,617 Taxes, other than payroll and income taxes $ 916 FOR THE YEAR ENDED APRIL 30, 1992: Maintenance and repairs $ 949 Amortization of deferred costs $ 2,962 Taxes, other than payroll and income taxes $ 758 Note: The above schedule includes only those costs for each fiscal year which exceeds one percent of total sales and revenues as required by Regulation S-X Rule 12-11.
As a result of the company’s international sales and locations, its operations are subject to a variety of risks that are specific to international operations, including the following: •import and export regulations that could erode profit margins or restrict exports; •the burden and cost of compliance with international laws, treaties, and technical standards and changes in those regulations; •potential restrictions on transfers of funds; •import and export tariffs, duties and value-added taxes; •transportation delays and interruptions; •the burden and cost of compliance with complex multi-national tax laws and regulations; •uncertainties arising from local business practices and cultural considerations; •foreign laws that potentially discriminate against companies which are headquartered outside that jurisdiction; •stringent antitrust regulations in local jurisdictions; •volatility associated with sovereign debt of certain international economies; •the uncertainty surrounding the implementation and effects of Brexit; •potential military conflicts and political risks; and •currency fluctuations, which the company attempts to minimize through traditional hedging instruments.
The following items impacted the comparability of the company's results for the years ended December 31, 2020 and 2019 (all amounts are before tax except for amounts related to the effects of tax changes): •restructuring, integration, and other charges of $13.3 million in 2020 and $78.4 million in 2019; •identifiable intangible asset amortization of $38.4 million in 2020 and $42.4 million in 2019; •impairments of long-lived assets of $7.2 million in 2020 and impairments of goodwill and other long-lived assets of $623.8 million in 2019; •income from wind down of business of $14.7 million in 2020 and losses from wind down of business of $162.4 million, inclusive of $74.9 million of impairments of long-lived assets in 2019; •Arrow Financing Solutions ("AFS") notes receivable recoveries of $1.8 million in 2020 and AFS notes receivable reserves and inventory write-downs of $18.0 million in 2019; •net gain on investments of $5.3 million in 2020 and $11.8 million in 2019; •tax benefit of $1.3 million in 2020 and tax expense of $1.7 million in 2019 related to legislation changes and other non-recurring tax adjustments; •pension settlement gain of $1.8 million in 2020 and pension settlement loss of $20.1 million in 2019; •Digital inventory write-downs, net of $22.3 million in 2019; •loss on disposition of businesses, net of $1.9 million in 2019; •income tax expense of $20.0 million in 2019 related to the wind down of business; and •interest expense of $0.7 million in 2019 related to an uncertain tax position related to legislation changes.
Certain Non-GAAP Financial Information In addition to disclosing financial results that are determined in accordance with accounting principles generally accepted in the United States (“GAAP”), the company also discloses certain non-GAAP financial information, including: •Non-GAAP sales for the consolidated company, global components, and global ECS, non-GAAP gross profit, and non-GAAP operating expenses exclude the impact of changes in foreign currencies (referred to as "changes in foreign currencies") by re-translating prior period results at current period foreign exchange rates, the impact of dispositions by adjusting the company's operating results for businesses disposed, as if the dispositions had occurred at the beginning of the earliest period presented (referred to as "dispositions"), the impact of the company's personal computer and mobility asset disposition business (referred to as "wind down"), the impact of inventory write-downs and recoveries related to the digital business (referred to as “digital inventory write-downs, net”), and the impact of notes receivable reserves and recoveries and inventory write-downs related to the AFS business (referred to as “AFS notes receivable reserves and recoveries” and “AFS inventory write-downs”, respectively).
Examples of such events and circumstances that the company would consider include the following: •macroeconomic conditions such as deterioration in general economic conditions, limitations on accessing capital, fluctuations in foreign exchange rates, or other developments in equity and credit markets; •industry and market considerations such as a deterioration in the environment in which the company operates, an increased competitive environment, a decline in market-dependent multiples or metrics (considered in both absolute terms and relative to peers), a change in the market for the company's products or services, or a regulatory or political development; •cost factors such as increases in inventory, labor, or other costs that have a negative effect on earnings and cash flows; •overall financial performance such as negative or declining cash flows or a decline in actual or planned revenue or earnings compared with actual and projected results of relevant prior periods; •other relevant entity-specific events such as changes in management, key personnel, strategy, or customers, contemplation of bankruptcy, or litigation; •events affecting a reporting unit such as a change in the composition or carrying amount of its net assets, a more likely than not expectation of selling or disposing all, or a portion, of a reporting unit, the testing for recoverability of a significant asset group within a reporting unit, or recognition of a goodwill impairment loss in the financial statements of a subsidiary that is a component of a reporting unit; and •a sustained decrease in share price (considered in both absolute terms and relative to peers).
Examples of such events and circumstances that the company would consider include the following: •macroeconomic conditions such as deterioration in general economic conditions, limitations on accessing capital, fluctuations in foreign exchange rates, or other developments in equity and credit markets; •industry and market considerations such as a deterioration in the environment in which the company operates, an increased competitive environment, a decline in market-dependent multiples or metrics (considered in both absolute terms and relative to peers), a change in the market for the company's products or services, or a regulatory or political development; •cost factors such as increases in inventory, labor, or other costs that have a negative effect on earnings and cash flows; •overall financial performance such as negative or declining cash flows or a decline in actual or planned revenue or earnings compared with actual and projected results of relevant prior periods; •other relevant entity-specific events such as changes in management, key personnel, strategy, or customers, contemplation of bankruptcy, or litigation; •events affecting a reporting unit such as a change in the composition or carrying amount of its net assets, a more likely than not expectation of selling or disposing all, or a portion, of a reporting unit, the testing for recoverability of a significant asset group within a reporting unit, or recognition of a goodwill impairment loss in the financial statements of a subsidiary that is a component of a reporting unit; and •a sustained decrease in share price (considered in both absolute terms and relative to peers).
As a result of the company's international sales and locations, its operations are subject to a variety of risks that are specific to international operations, including the following: • import and export regulations that could erode profit margins or restrict exports; • the burden and cost of compliance with international laws, treaties, and technical standards and changes in those regulations; • potential restrictions on transfers of funds; • import and export tariffs, duties and value-added taxes; • transportation delays and interruptions; • the burden and cost of compliance with complex multi-national tax laws and regulations; • uncertainties arising from local business practices and cultural considerations; • foreign laws that potentially discriminate against companies which are headquartered outside that jurisdiction; • stringent antitrust regulations in local jurisdictions; • volatility associated with sovereign debt of certain international economies; • the uncertainty surrounding the implementation and effects of Brexit; • potential military conflicts and political risks; and • currency fluctuations, which the company attempts to minimize through traditional hedging instruments.
The following items impacted the comparability of the company's results for the years ended December 31, 2019 and 2018, all amounts are before tax except for amounts related to the effects of tax changes: • goodwill and other impairments of $623.8 million in 2019; • Digital inventory write-downs, net of $22.3 million in 2019; • AFS notes receivables reserves and inventory write-downs, net of $18.0 million in 2019; • losses from wind down of business of $162.4 million in 2019 and $19.7 million in 2018; • restructuring, integration, and other charges (excluding the impact of wind down) of $78.4 million in 2019 and $49.3 million in 2018; • identifiable intangible asset amortization (excluding the impact of wind down) of $42.4 million in 2019 and $38.2 million million in 2018; • net gain on investments of $11.8 million in 2019 and net loss on investments of $14.2 million in 2018; • loss on disposition of businesses, net, of $1.9 million in 2019 and $3.6 million in 2018; • pension settlement of $20.1 million in 2019 and $1.7 million in 2018; • income tax expense of $1.7 million in 2019 related to repatriation of foreign earnings and the Tax Act, and income tax benefit of $28.3 million in 2018 related to the Tax Act; • income tax expense of $20.0 million related to the wind down of business; and • interest expense of $0.7 million for 2019 related to an uncertain tax position related to the impact of the Tax Act.
Certain Non-GAAP Financial Information In addition to disclosing financial results that are determined in accordance with accounting principles generally accepted in the United States (“GAAP”), the company also discloses certain non-GAAP financial information, including: • Sales, gross profit, and operating expenses as adjusted for the impact of changes in foreign currencies (referred to as changes in foreign currencies) by re-translating prior period results at current period foreign exchange rates, the impact of dispositions by adjusting the company's operating results for businesses disposed, as if the dispositions had occurred at the beginning of the earliest period presented (referred to as dispositions), the impact of the company's personal computer and mobility asset disposition business (referred to as wind down), the impact of inventory write-downs related to the digital business (referred to as “digital inventory write-downs and recoveries”), and the impact of the notes receivable reserves and inventory write-downs related to the AFS business (referred to as “AFS notes receivable reserves and credits” and “AFS inventory write-downs and recoveries,” respectively).
Examples of such events and circumstances that the company would consider include the following: • macroeconomic conditions such as deterioration in general economic conditions, limitations on accessing capital, fluctuations in foreign exchange rates, or other developments in equity and credit markets; • industry and market considerations such as a deterioration in the environment in which the company operates, an increased competitive environment, a decline in market-dependent multiples or metrics (considered in both absolute terms and relative to peers), a change in the market for the company's products or services, or a regulatory or political development; • cost factors such as increases in raw materials, labor, or other costs that have a negative effect on earnings and cash flows; • overall financial performance such as negative or declining cash flows or a decline in actual or planned revenue or earnings compared with actual and projected results of relevant prior periods; • other relevant entity-specific events such as changes in management, key personnel, strategy, or customers, contemplation of bankruptcy, or litigation; • events affecting a reporting unit such as a change in the composition or carrying amount of its net assets, a more likely than not expectation of selling or disposing all, or a portion, of a reporting unit, the testing for recoverability of a significant asset group within a reporting unit, or recognition of a goodwill impairment loss in the financial statements of a subsidiary that is a component of a reporting unit; and • a sustained decrease in share price (considered in both absolute terms and relative to peers).
Examples of such events and circumstances that the company would consider include the following: • macroeconomic conditions such as deterioration in general economic conditions, limitations on accessing capital, fluctuations in foreign exchange rates, or other developments in equity and credit markets; • industry and market considerations such as a deterioration in the environment in which the company operates, an increased competitive environment, a decline in market-dependent multiples or metrics (considered in both absolute terms and relative to peers), a change in the market for the company's products or services, or a regulatory or political development; • cost factors such as increases in inventory, labor, or other costs that have a negative effect on earnings and cash flows; • overall financial performance such as negative or declining cash flows or a decline in actual or planned revenue or earnings compared with actual and projected results of relevant prior periods; • other relevant entity-specific events such as changes in management, key personnel, strategy, or customers, contemplation of bankruptcy, or litigation; • events affecting a reporting unit such as a change in the composition or carrying amount of its net assets, a more likely than not expectation of selling or disposing all, or a portion, of a reporting unit, the testing for recoverability of a significant asset group within a reporting unit, or recognition of a goodwill impairment loss in the financial statements of a subsidiary that is a component of a reporting unit; and • a sustained decrease in share price (considered in both absolute terms and relative to peers).
As a result of the company's international sales and locations, its operations are subject to a variety of risks that are specific to international operations, including the following: • import and export regulations that could erode profit margins or restrict exports; • the burden and cost of compliance with international laws, treaties, and technical standards and changes in those regulations; • potential restrictions on transfers of funds; • import and export duties and value-added taxes; • transportation delays and interruptions; • the burden and cost of compliance with complex multi-national tax laws and regulations; • uncertainties arising from local business practices and cultural considerations; • enforcement of the Foreign Corrupt Practices Act, or similar laws of other jurisdictions; • foreign laws that potentially discriminate against companies which are headquartered outside that jurisdiction; • volatility associated with sovereign debt of certain international economies; • the uncertainty surrounding the implementation and effects of Brexit; • potential military conflicts and political risks; and • currency fluctuations, which the company attempts to minimize through traditional hedging instruments.
Certain Non-GAAP Financial Information In addition to disclosing financial results that are determined in accordance with accounting principles generally accepted in the United States ("GAAP"), the company also discloses certain non-GAAP financial information, including: • Sales, income, or expense items as adjusted for the impact of changes in foreign currencies (referred to as "impact of changes in foreign currencies"), by re-translating prior period results at current period foreign exchange rates, and the impact of acquisitions by adjusting the company's prior periods to include the operating results of businesses acquired, including the amortization expense related to acquired intangible assets, as if the acquisitions had occurred at the beginning of the earliest period presented (referred to as "impact of acquisitions") and the impact of dispositions by adjusting the company's operating results for businesses disposed, as if the dispositions had occurred at the beginning of the earliest period presented (referred to as "impact of dispositions"); • Operating income as adjusted to exclude identifiable intangible asset amortization, restructuring, integration, and other charges, and loss on disposition of businesses, net; and • Net income attributable to shareholders as adjusted to exclude identifiable intangible asset amortization, restructuring, integration, and other charges, loss on disposition of businesses, net, gain (loss) on investments, net, loss on extinguishment of debt, pension settlements, and impact of the Tax Act.
Examples of such events and circumstances that the company would consider include the following: • macroeconomic conditions such as deterioration in general economic conditions, limitations on accessing capital, fluctuations in foreign exchange rates, or other developments in equity and credit markets; • industry and market considerations such as a deterioration in the environment in which the company operates, an increased competitive environment, a decline in market-dependent multiples or metrics (considered in both absolute terms and relative to peers), a change in the market for the company's products or services, or a regulatory or political development; • cost factors such as increases in raw materials, labor, or other costs that have a negative effect on earnings and cash flows; • overall financial performance such as negative or declining cash flows or a decline in actual or planned revenue or earnings compared with actual and projected results of relevant prior periods; • other relevant entity-specific events such as changes in management, key personnel, strategy, or customers; contemplation of bankruptcy; or litigation; • events affecting a reporting unit such as a change in the composition or carrying amount of its net assets, a more-likely-than-not expectation of selling or disposing all, or a portion, of a reporting unit, the testing for recoverability of a significant asset group within a reporting unit, or recognition of a goodwill impairment loss in the financial statements of a subsidiary that is a component of a reporting unit; and • a sustained decrease in share price (considered in both absolute terms and relative to peers).
Examples of such events and circumstances that the company would consider include the following: • macroeconomic conditions such as deterioration in general economic conditions, limitations on accessing capital, fluctuations in foreign exchange rates, or other developments in equity and credit markets; • industry and market considerations such as a deterioration in the environment in which the company operates, an increased competitive environment, a decline in market-dependent multiples or metrics (considered in both absolute terms and relative to peers), a change in the market for the company's products or services, or a regulatory or political development; • cost factors such as increases in raw materials, labor, or other costs that have a negative effect on earnings and cash flows; • overall financial performance such as negative or declining cash flows or a decline in actual or planned revenue or earnings compared with actual and projected results of relevant prior periods; • other relevant entity-specific events such as changes in management, key personnel, strategy, or customers; contemplation of bankruptcy; or litigation; • events affecting a reporting unit such as a change in the composition or carrying amount of its net assets, a more-likely-than-not expectation of selling or disposing all, or a portion, of a reporting unit, the testing for recoverability of a significant asset group within a reporting unit, or recognition of a goodwill impairment loss in the financial statements of a subsidiary that is a component of a reporting unit; and • a sustained decrease in share price (considered in both absolute terms and relative to peers).
As a result of the company's international sales and locations, its operations are subject to a variety of risks that are specific to international operations, including the following: • import and export regulations that could erode profit margins or restrict exports; • the burden and cost of compliance with international laws, treaties, and technical standards and changes in those regulations; • potential restrictions on transfers of funds; • import and export duties and value-added taxes; • transportation delays and interruptions; • the burden and cost of compliance with complex multi-national tax laws and regulations; • uncertainties arising from local business practices and cultural considerations; • enforcement of the Foreign Corrupt Practices Act, or similar laws of other jurisdictions; • foreign laws that potentially discriminate against companies which are headquartered outside that jurisdiction; • volatility associated with sovereign debt of certain international economies; • the uncertainty surrounding the implementation and effects of Brexit; • potential military conflicts and political risks; and • currency fluctuations, which the company attempts to minimize through traditional hedging instruments.
Certain Non-GAAP Financial Information In addition to disclosing financial results that are determined in accordance with accounting principles generally accepted in the United States ("GAAP"), the company also discloses certain non-GAAP financial information, including: • Sales, income, or expense items as adjusted for the impact of changes in foreign currencies (referred to as "impact of changes in foreign currencies") and the impact of acquisitions by adjusting the company's prior periods to include the operating results of businesses acquired, including the amortization expense related to acquired intangible assets, as if the acquisitions had occurred at the beginning of the earliest period presented (referred to as "impact of acquisitions"); • Operating income as adjusted to exclude identifiable intangible asset amortization, restructuring, integration, and other charges, and impairment of assets held for sale; and • Net income attributable to shareholders as adjusted to exclude identifiable intangible asset amortization, restructuring, integration, and other charges, impairment of assets held for sale, loss on investment, loss on extinguishment of debt, and impact of the Tax Act.