-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, BNtgrZRWhH5eEg/YhVzAVCMjY4wzA1k1cqwfncLtPR9/IV9QGsGGkCxmhvniBYSU SdZC/Sw6FyijjHUG1jlrGQ== 0000006207-06-000038.txt : 20061214 0000006207-06-000038.hdr.sgml : 20061214 20061214160845 ACCESSION NUMBER: 0000006207-06-000038 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 20061031 FILED AS OF DATE: 20061214 DATE AS OF CHANGE: 20061214 FILER: COMPANY DATA: COMPANY CONFORMED NAME: AMREP CORP. CENTRAL INDEX KEY: 0000006207 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-BUSINESS SERVICES, NEC [7389] IRS NUMBER: 590936128 STATE OF INCORPORATION: OK FISCAL YEAR END: 0430 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-04702 FILM NUMBER: 061277316 BUSINESS ADDRESS: STREET 1: 300 ALEXANDER PARK STREET 2: SUITE 204 CITY: PRINCETON STATE: NJ ZIP: 08540 BUSINESS PHONE: (609) 716-8200 MAIL ADDRESS: STREET 1: 300 ALEXANDER PARK STREET 2: SUITE 204 CITY: PRINCETON STATE: NJ ZIP: 08540 FORMER COMPANY: FORMER CONFORMED NAME: AMREP CORP DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: AMERICAN REALTY & PETROLEUM CORP DATE OF NAME CHANGE: 19671019 10-Q 1 axrq0207.txt UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q [ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended October 31, 2006 -------------------------- OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to --------------------- ---------------------- Commission File Number 1-4702 --------- AMREP Corporation - -------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) Oklahoma 59-0936128 - -------------------------------------------------------------------------------- (State or other jurisdiction of (IRS Employer incorporation or organization) Identification No.) 300 Alexander Park , Suite 204, Princeton, New Jersey 08540 - -------------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (609) 716-8200 --------------------- 212 Carnegie Center, Suite 302, Princeton, New Jersey 08540 - -------------------------------------------------------------------------------- (Former name, former address and former fiscal year, if changed since last report) Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 (the "Exchange Act") during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No ----- ----- Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer or a non-accelerated filer. See definition of "accelerated filer and large accelerated filer" in Rule 12b-2 of the Exchange Act. Large accelerated filer Accelerated filer Non-accelerated filer X ----- ----- ---- Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No X ----- ----- Number of Shares of Common Stock, par value $.10 per share, outstanding at October 31, 2006 - 6,652,612. AMREP CORPORATION AND SUBSIDIARIES INDEX ----- PART I. FINANCIAL INFORMATION PAGE NO. -------- Item 1. Financial Statements Consolidated Balance Sheets (Unaudited) October 31, 2006 and April 30, 2006 1 Consolidated Statements of Operations and Retained Earnings (Unaudited) Three Months Ended October 31, 2006 and 2005 2 Consolidated Statements of Operations and Retained Earnings (Unaudited) Six Months Ended October 31, 2006 and 2005 3 Consolidated Statements of Cash Flows (Unaudited) Six Months Ended October 31, 2006 and 2005 4 Notes to Consolidated Financial Statements 5 - 9 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 9 - 13 Item 3. Quantitative and Qualitative Disclosures About Market Risk 13 Item 4. Controls and Procedures 13 - 14 PART II. OTHER INFORMATION Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 14 Item 4. Submission of Matters to a Vote of Security Holders 14 Item 6. Exhibits 14 - 15 SIGNATURE 15 EXHIBIT INDEX 16 PART I. FINANCIAL INFORMATION Item 1. Financial Statements - ------- -------------------- AMREP CORPORATION AND SUBSIDIARIES Consolidated Balance Sheets (Unaudited) (Thousands, except par value and number of shares) October 31, April 30, 2006 2006 ------------------ ------------------- ASSETS: Cash and cash equivalents $ 110,167 $ 46,882 Restricted cash 4,232 - Receivables, net: Real estate operations 16,574 14,592 Media services operations 42,510 37,140 ------------------ ------------------- 59,084 51,732 Real estate inventory 40,583 47,533 Investment assets, net 11,992 11,586 Property, plant and equipment, net 9,790 10,879 Other assets, net 16,921 15,238 Goodwill 5,191 5,191 ------------------ ------------------- TOTAL ASSETS $ 257,960 $ 189,041 ================== =================== LIABILITIES AND SHAREHOLDERS' EQUITY: LIABILITIES: Accounts payable and accrued expenses $ 79,481 $ 39,382 Deferred revenue 6,547 7,741 Notes payable: Amounts due within one year 1,644 1,673 Amounts subsequently due 2,827 4,343 ------------------ ------------------- 4,471 6,016 Taxes payable 5,108 4,548 Deferred income taxes 13,490 9,150 Accrued pension cost 3,334 3,234 ------------------ ------------------- TOTAL LIABILITIES 112,431 70,071 ------------------ ------------------- SHAREHOLDERS' EQUITY: Common stock, $.10 par value; Shares authorized - 20,000,000; 7,418,704 shares issued at October 31, 2006 and 7,417,204 at April 30, 2006 741 741 Capital contributed in excess of par value 46,061 45,772 Retained earnings 108,093 81,875 Accumulated other comprehensive loss, net (4,072) (4,072) Treasury stock, at cost; 766,092 shares at October 31, 2006 and 773,592 shares at April 30, 2006 (5,294) (5,346) ------------------ ------------------- TOTAL SHAREHOLDERS' EQUITY 145,529 118,970 ------------------ ------------------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 257,960 $ 189,041 ================== ===================
See notes to consolidated financial statements. 1 AMREP CORPORATION AND SUBSIDIARIES Consolidated Statements of Operations and Retained Earnings (Unaudited) Three Months Ended October 31, 2006 and 2005 (Thousands, except per share amounts) 2006 2005 ----------------- ------------------- REVENUES: Real estate operations - land sales $ 31,707 $ 11,650 Media services operations 22,913 22,695 Interest and other 1,435 502 ----------------- ------------------- 56,055 34,847 ----------------- ------------------- COSTS AND EXPENSES: Real estate cost of sales - land sales 8,017 5,365 Operating expenses: Media services operating expenses 18,663 18,477 Real estate commissions and selling 490 312 Other operations 225 307 General and administrative: Media services operations 1,587 1,982 Real estate operations and corporate 1,495 1,120 Interest expense 83 69 ----------------- ------------------- 30,560 27,632 ----------------- ------------------- Income from continuing operations before income taxes 25,495 7,215 PROVISION FOR INCOME TAXES FROM CONTINUING OPERATIONS 9,433 2,153 ----------------- ------------------- INCOME FROM CONTINUING OPERATIONS 16,062 5,062 (LOSS) FROM OPERATIONS OF DISCONTINUED BUSINESS (NET OF INCOME TAXES) - (6) ----------------- ------------------- NET INCOME 16,062 5,056 RETAINED EARNINGS, beginning of period 92,031 84,415 ----------------- ------------------- RETAINED EARNINGS, end of period $ 108,093 $ 89,471 ================= =================== EARNINGS PER SHARE - BASIC AND DILUTED: CONTINUING OPERATIONS $ 2.42 $ 0.76 DISCONTINUED OPERATIONS - 0.00 ----------------- ------------------- EARNINGS PER SHARE - BASIC AND DILUTED $ 2.42 $ 0.76 ================= =================== WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING 6,649 6,630 ================= ===================
See notes to consolidated financial statements. 2 AMREP CORPORATION AND SUBSIDIARIES Consolidated Statements of Operations and Retained Earnings (Unaudited) Six Months Ended October 31, 2006 and 2005 (Thousands, except per share amounts) 2006 2005 ----------------- ------------------- REVENUES: Real estate operations - land sales $ 64,197 $ 19,059 Media services operations 43,740 44,850 Interest and other 6,387 952 ----------------- ------------------- 114,324 64,861 ----------------- ------------------- COSTS AND EXPENSES: Real estate cost of sales - land sales 19,484 10,128 Operating expenses: Media services operating expenses 36,825 36,982 Real estate commissions and selling 914 578 Other operations 552 616 General and administrative: Media services operations 3,317 4,144 Real estate operations and corporate 2,477 2,129 Interest expense 174 209 ----------------- ------------------- 63,743 54,786 ----------------- ------------------- Income from continuing operations before income taxes 50,581 10,075 PROVISION FOR INCOME TAXES FROM CONTINUING OPERATIONS 18,715 3,211 ----------------- ------------------- INCOME FROM CONTINUING OPERATIONS 31,866 6,864 INCOME FROM OPERATIONS OF DISCONTINUED BUSINESS (NET OF INCOME TAXES) - 3,556 ----------------- ------------------- NET INCOME 31,866 10,420 RETAINED EARNINGS, beginning of period 81,875 82,695 DIVIDEND PAID (5,648) (3,644) ----------------- ------------------- RETAINED EARNINGS, end of period $ 108,093 $ 89,471 ================= =================== EARNINGS PER SHARE - BASIC AND DILUTED: CONTINUING OPERATIONS $ 4.79 $ 1.04 DISCONTINUED OPERATIONS - 0.53 ----------------- ------------------- EARNINGS PER SHARE - BASIC AND DILUTED $ 4.79 $ 1.57 ================= =================== WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING 6,646 6,628 ================= ===================
See notes to consolidated financial statements. 3 AMREP CORPORATION AND SUBSIDIARIES Consolidated Statements of Cash Flows (Unaudited) Six Months Ended October 31, 2006 and 2005 (Thousands) 2006 2005 ----------------- ------------------ CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 31,866 $ 10,420 ----------------- ------------------ Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 2,937 2,618 Non-cash credits and charges: Pension expense accrual 107 102 Provision for doubtful accounts 80 (65) Stock based compensation - Directors' Plan 327 212 Gain on disposition of assets (4,112) (5,516) Changes in assets and liabilities: Receivables (7,432) 6,243 Real estate inventory 6,991 (280) Other assets (2,416) (1,670) Accounts payable and accrued expenses 40,092 (2,934) Deferred revenue (1,194) - Taxes payable 560 (340) Deferred income taxes 4,340 2,048 ----------------- ------------------ Total adjustments 40,280 418 ----------------- ------------------ Net cash provided by operating activities 72,146 10,838 ----------------- ------------------ CASH FLOWS FROM INVESTING ACTIVITIES: Capital expenditures: Property, plant, and equipment (1,098) (1,694) Investment assets (2,492) - Proceeds from disposition of assets 6,140 4,047 Restricted cash (4,232) - ----------------- ------------------ Net cash provided (used) by investing activities (1,682) 2,353 ----------------- ------------------ CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from debt financing 12,181 14,259 Principal debt payments (13,726) (12,332) Exercise of stock options 14 - Dividends paid (5,648) (3,644) ----------------- ------------------ Net cash (used) by financing activities (7,179) (1,717) ----------------- ------------------ Increase in cash and cash equivalents 63,285 11,474 CASH AND CASH EQUIVALENTS, beginning of period 46,882 37,743 ----------------- ------------------ CASH AND CASH EQUIVALENTS, end of period $ 110,167 $ 49,217 ================= ================== SUPPLEMENTAL CASH FLOW INFORMATION: Interest paid - net of amounts capitalized $ 169 $ 222 ================= ================== Income taxes paid - net of refunds $ 13,814 $ 3,592 ================= ==================
See notes to consolidated financial statements. 4 AMREP CORPORATION AND SUBSIDIARIES Notes to Consolidated Financial Statements (Unaudited) Six Months Ended October 31, 2006 and 2005 (1) Basis of Presentation --------------------- The accompanying unaudited consolidated financial statements included herein have been prepared by AMREP Corporation (the "Registrant" or the "Company") pursuant to the rules and regulations of the Securities and Exchange Commission for interim financial information, and do not include all the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. In the opinion of management, the accompanying unaudited consolidated financial statements include all adjustments, which are of a normal recurring nature, necessary to reflect a fair presentation of the results for the interim periods presented. The results of operations for such interim periods are not necessarily a good indication of what may occur in future periods. The unaudited consolidated financial statements herein should be read in conjunction with the Company's annual report on Form 10-K for the year ended April 30, 2006 that was previously filed with the Securities and Exchange Commission. (2) Restricted Cash --------------- Restricted cash consists of amounts held in escrow that were received in connection with (i) sales of non-inventory assets that are identified as "1031 Exchange assets" and which are restricted pending the purchase or identification of replacement assets ($3,916,000) and (ii) certain land sales accounted for under the "percentage of completion method" and which are restricted for the payment of land development work that the Company is required to complete ($316,000). (3) Receivables ----------- Media services operations accounts receivable, net consist of the following (in thousands): October 31, April 30, 2006 2006 --------------- ---------------- Fulfillment Services $ 22,858 $ 20,266 Newsstand Distribution Services, net of estimated returns 21,164 18,409 --------------- ---------------- 44,022 38,675 Allowance for doubtful accounts (1,512) (1,535) --------------- ---------------- $ 42,510 $ 37,140 =============== ================ Newsstand Distribution Services accounts receivable are net of estimated magazine returns of $55,584,000 and $54,071,000 at October 31, 2006 and April 30, 2006. In addition, pursuant to an arrangement with one publisher customer of the Newsstand Distribution Services segment that commenced in April 2006, the publisher bears the ultimate credit risk of non-collection of amounts due from the customers to which the Company distributed the publisher's magazines under this arrangement. Accounts receivable subject to this arrangement ($33,567,000 and $20,368,000 at October 31, 2006 and April 30, 2006) are netted against the related accounts payable due the publisher on the accompanying consolidated balance sheets. 5 (4) Property, plant and equipment ----------------------------- Property, plant and equipment, net consist of the following (in thousands): October 31, April 30, 2006 2006 ---------------- ---------------- Land, buildings and improvements $ 4,304 $ 4,397 Furniture and equipment 31,098 30,117 Other 77 96 ---------------- ---------------- 35,479 34,610 Less accumulated depreciation (25,689) (23,731) ---------------- ---------------- $ 9,790 $ 10,879 ================ ================ (5) Other Assets ------------ Other assets, net consist of the following (in thousands): October 31, April 30, 2006 2006 ---------------- ---------------- Software development costs $ 8,868 $ 7,787 Deferred order entry costs 4,029 3,872 Prepaid expenses 2,681 2,137 Other 4,523 3,841 ---------------- ---------------- 20,101 17,637 Less accumulated amortization (3,180) (2,399) ---------------- ---------------- $ 16,921 $ 15,238 ================ ================ Software development costs include internal and external costs of the development of new or enhanced software programs and are generally amortized over five years. Deferred order entry costs represent costs incurred in connection with the data entry of customer subscription information to data base files and are charged directly to operations over a 12-month period. Other includes the acquisition costs of certain customer contracts that are amortized over periods that generally range from three to five years. (6) Accounts Payable and Accrued Expenses ------------------------------------- Accounts payable and accrued expenses consist of the following (in thousands): October 31, April 30, 2006 2006 ---------------- ---------------- Publisher payables, net $ 66,531 $ 27,273 Accrued expenses 5,617 4,320 Trade payables 2,440 2,602 Other 4,893 5,187 ---------------- ---------------- $ 79,481 $ 39,382 ================ ================ Publisher payables increased from April 30, 2006 to October 31, 2006 as a result of additional magazine purchases by the Company under an arrangement with a publisher customer of the Newsstand Distribution Services business that commenced in April 2006. In addition, as discussed more fully in Note 3, pursuant to this arrangement the Company has netted $33,567,000 and $20,368,000 6 of accounts receivable against the related accounts payable at October 31, 2006 and April 30, 2006. (7) Discontinued operations ----------------------- Net income (loss) from discontinued operations in the three and six month periods ended October 31, 2005 reflects the gain from the disposition of the primary assets of the Company's El Dorado, New Mexico water utility subsidiary, which were taken through condemnation proceedings. (8) Information About the Company's Operations in Different Industry Segments ------------------------------------------------------------------------- The following tables set forth summarized data relative to the industry segments for continuing operations in which the Company operated for the three and six month periods ended October 31, 2006 and 2005. THREE MONTHS: Newsstand Real Estate Fulfillment Distribution Operations Services Services Corporate Consolidated -------------- ------------- ------------- ------------- ------------ October 2006 (Thousands): Revenues $ 32,430 $ 18,969 $ 4,187 $ 469 $ 56,055 Operating and G&A expenses 9,380 17,371 2,878 848 30,477 Management fee (income) 248 207 43 (498) - Interest expense - 167 (84) - 83 -------------- ------------- ------------- ------------- ------------ Pretax income contribution from continuing operations $ 22,802 $ 1,224 $ 1,350 $ 119 $ 25,495 ============== ============= ============= ============= ============ - -------------------------------------------------------------------------------------------------------------- October 2005 (Thousands): Revenues $ 11,975 $ 19,514 $ 3,181 $ 177 $ 34,847 Operating and G&A expenses 6,401 17,623 2,835 704 27,563 Management fee (income) 249 213 36 (498) - Interest expense - 117 (48) - 69 -------------- ------------- ------------- ------------- ------------ Pretax income contribution from continuing operations $ 5,325 $ 1,561 $ 358 $ (29) $ 7,215 ============== ============= ============= ============= ============
7 SIX MONTHS: Newsstand Real Estate Fulfillment Distribution Operations Services Services Corporate Consolidated -------------- ------------- ------------- ------------- ------------ October 2006 (Thousands): Revenues $ 69,522 $ 36,541 $ 7,442 $ 819 $ 114,324 Operating and G&A expenses 21,979 34,364 5,777 1,449 63,569 Management fee (income) 498 413 85 (996) - Interest expense - 292 (118) - 174 -------------- ------------- ------------- ------------- ------------ Pretax income contribution from continuing operations $ 47,045 $ 1,472 $ 1,698 $ 366 $ 50,581 ============== ============= ============= ============= ============ Identifiable assets $ 79,954 $ 46,067 $ 65,213 $ 61,535 $ 252,769 Intangible assets $ - $ 1,298 $ 3,893 $ - $ 5,191 - -------------------------------------------------------------------------------------------------------------- October 2005 (Thousands): Revenues $ 19,664 $ 38,058 $ 6,792 $ 347 $ 64,861 Operating and G&A expenses 12,112 35,468 5,657 1,340 54,577 Management fee (income) 498 426 72 (996) - Interest expense - 227 (18) - 209 -------------- ------------- ------------- ------------- ------------ Pretax income contribution from continuing operations $ 7,054 $ 1,937 $ 1,081 $ 3 $ 10,075 ============== ============= ============= ============= ============ Identifiable assets $ 75,039 $ 44,907 $ 35,244 $ 34,719 $ 189,909 Intangible assets $ - $ 1,298 $ 3,893 $ - $ 5,191 - --------------------------------------------------------------------------------------------------------------
(9) New and Emerging Accounting Standards ------------------------------------- In June 2006, the Financial Accounting Standards Board ("FASB") issued FASB Interpretation No. 48, "Accounting for Uncertainty in Income Taxes" ("FIN 48"). FIN 48 clarifies the accounting for uncertainty in income taxes recognized in the Company's financial statements in accordance with FASB Statement No. 109, Accounting for Income Taxes, and provides guidance for recognizing and measuring tax positions taken or that are expected to be taken in a tax return that directly or indirectly affect amounts reported in the financial statements. FIN 48 also provides accounting guidance for related income tax effects of tax positions that do not meet the recognition threshold specified in this interpretation. FIN 48 is effective for fiscal years beginning after December 15, 2006. The Company is currently evaluating the application of FIN 48 to determine the potential impact on its financial statements. In September 2006, the FASB issued Statement No. 158 ("SFAS No. 158"), "Employers' Accounting for Defined Benefit Pension and Other Postretirement Plans - an amendment of FASB Statement Nos. 87, 88, 106, and 132(R)". SFAS No. 158 requires a company that sponsors a postretirement benefit plan to fully recognize, as an asset or liability, the overfunded or underfunded status of its benefit plan in its balance sheet. The funded status is measured as the difference between the fair value of the plan's assets and its benefit obligation. This provision is effective for public companies for fiscal years ending after December 15, 2006. In addition, SFAS No. 158 also requires a company to measure its plan assets and benefit obligations as of its year-end balance sheet date. Currently, a company is permitted to choose a measurement date up to three months prior to its year-end to measure plan assets and obligations. This provision is effective for all companies for fiscal years ending after December 15, 2008. The Company does not expect the adoption of this Statement will have a material impact on its financial position, results of operations or cash flows. 8 (10) Pending Acquisition ------------------- On November 7, 2006, the Company's Kable Media Services, Inc. subsidiary entered into an agreement to acquire Palm Coast Data, LLC, a company in the fulfillment services industry. The total transaction value is approximately $92 million, subject to working capital and other adjustments. Kable plans to finance the acquisition using a combination of internal funds and borrowings. The closing of the transaction is subject to customary closing conditions and is expected to occur early in calendar 2007. Item 2. Management's Discussion and Analysis of Financial Condition - ------- ----------------------------------------------------------- and Results of Operations ------------------------- INTRODUCTION - ------------ The Company, through its subsidiaries, is primarily engaged in three business segments: the Real Estate business operated by AMREP Southwest Inc. and its subsidiaries (collectively, "AMREP Southwest") and the Fulfillment Services and Newsstand Distribution Services businesses operated by Kable Media Services, Inc. and its subsidiaries (collectively, "Kable"). The Company's foreign sales and activities are not significant. The following provides information that management believes is relevant to an assessment and understanding of the Company's consolidated results of operations and financial condition. The discussion should be read in conjunction with the consolidated financial statements and accompanying notes. All references in this Item 2 to the second quarter or first six months of 2007 and 2006 mean the fiscal three or six month periods ended October 31, 2006 and October 31, 2005, respectively. CRITICAL ACCOUNTING POLICIES AND ESTIMATES - ------------------------------------------ Management's discussion and analysis of financial condition and results of operations is based on the accounting policies used and disclosed in the 2006 consolidated financial statements and accompanying notes that were prepared in accordance with accounting principles generally accepted in the United States of America and included as part of the Company's annual report on Form 10-K for the year ended April 30, 2006 (the "2006 Form 10-K"). The preparation of those financial statements required management to make estimates and assumptions that affected the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual amounts or results could differ from those estimates. The significant accounting policies of the Company are described in Note 1 to the 2006 consolidated financial statements, and the critical accounting policies and estimates are described in Management's Discussion and Analysis included in Item 7 in the 2006 Form 10-K. There have been no changes in the critical accounting policies. Information concerning the implementation and the impact of new accounting standards issued by the Financial Accounting Standards Board is included in the notes to the 2006 consolidated financial statements. The Company did not adopt an accounting policy in the first six months of fiscal 2007 that had a material impact on its financial condition, liquidity or results of operations. RESULTS OF OPERATIONS - --------------------- For the second quarter of fiscal 2007, net income was $16,062,000, or $2.42 per share, compared to net income of $5,056,000, or $0.76 per share, in the second 9 quarter of the prior fiscal year. For the first six months of fiscal 2007, net income was $31,866,000, or $4.79 per share, compared to net income of $10,420,000, or $1.57 per share, in the same period of fiscal 2006. Results for the second quarter and first six months of 2007 were entirely from continuing operations, whereas the prior year's results included a net gain (loss) from discontinued operations of ($6,000) in the second quarter and $3,556,000, or $0.53 per share, for the six month period. Revenues were $56,055,000 and $114,324,000 in the current year's second quarter and first six months versus $34,847,000 and $64,861,000 in the same periods last year. Revenues from land sales at the Company's AMREP Southwest subsidiary increased from $11,650,000 in the second quarter of fiscal 2006 to $31,707,000 in fiscal 2007's second quarter. For the six months ended October 31, these revenues increased from $19,059,000 last year to $64,197,000 this year. The substantial revenue increases in both periods of 2007 were primarily due to increased sales of developed and undeveloped residential lots in the Company's principal market of Rio Rancho, New Mexico, as well as from increased sales of land for commercial use. The average gross profit percentage on land sales increased from 54% and 47% in the second quarter and first six months of 2006 to 75% and 70% for the same periods of 2007, primarily reflecting a greater proportion of sales of undeveloped lots in the first quarter and first six months of 2007 versus the same periods last year. Revenues and related gross profits from land sales can vary significantly from period to period as a result of many factors, including the nature and timing of specific transactions, and prior results are not necessarily a good indication of what may occur in future periods. Revenues from the Company's Kable Media Services subsidiary increased from $22,695,000 in the second quarter of 2006 to $22,913,000 in the same quarter of the current year. For the six months ended October 31, these revenues decreased from $44,850,000 last year to $43,740,000 this year. Revenues from Newsstand Distribution Services operations increased by $763,000 (24%) and $407,000 (6%) for the three and six month periods ended October 31, 2006 compared to the same periods last year, principally from increased distribution volumes of magazines and new business. Revenues from Fulfillment Services operations decreased by $545,000 (3%) and $1,517,000 (4%) in these same three and six month periods of 2007 compared to the similar periods of 2006 primarily due to previously-reported customer losses that occurred in earlier periods but that continue to affect the current year's results. Kable's operating expenses increased by $186,000 (1%) for the second quarter of 2007 and decreased by $157,000 (0.4%) for the first six months of 2007 compared to the same periods of the prior year as a result of the net effect of decreased expenses in the Fulfillment Services business resulting in part from reductions in variable expenses, including payroll and benefits, which were offset in part by an increase in Newsstand Distribution Services operating expenses because of additional costs, principally payroll, associated with the growth of that business. Interest and other revenues increased by $933,000 and $5,435,000 in the three and six months ended October 31, 2006 compared to the same periods of the prior year primarily as a result of increased interest income on invested cash balances in the current year as well as from the sale in the first quarter of fiscal 2007 of certain of AMREP Southwest's non-inventory real estate assets, including the Company's office building in Rio Rancho, which in the aggregate contributed a pretax gain of $4,107,000. Real Estate commissions and selling expenses increased by $178,000 and $336,000 in the second quarter and first six months of 2007 compared to the prior year, primarily due to costs incurred in relation to the higher revenues in real estate land sales. Such costs generally vary depending upon the terms of specific sale transactions. Real estate and corporate general and administrative expenses in the second quarter and first six months of 2007 increased by $375,000 and $348,000 over the same prior year periods as a result of an increase in the Company's stock price which is used to value a portion of directors' compensation paid in stock and also due to consulting expenses in the Real Estate segment. General and administrative costs of magazine operations decreased $395,000 and $827,000 in the second quarter and first six months of 2007 compared with the same prior year periods, primarily due to favorable variances in payroll and related benefit costs. 10 The Company's effective tax rate is estimated to be 37% for the second quarter and first six months of 2007 compared to 30% and 32% for the same periods last year. The lower effective tax rates in 2006 versus 2007 were primarily due to tax benefits associated with charitable contributions of land by the real estate business in 2006. LIQUIDITY AND CAPITAL RESOURCES - ------------------------------- During the past several years, the Company has financed its operations from internally generated funds from real estate sales and media services operations, and from borrowings under its various lines-of-credit and development loan agreements. Cash Flows From Financing Activities - ------------------------------------ In September 2006, AMREP Southwest entered into a new revolving credit agreement with a bank with a maximum borrowing capacity of $25,000,000 that matures in 2008 and is used to support real estate development in New Mexico. Borrowings bear interest at the borrower's option at (i) the prime rate less 1%, or (ii) LIBOR plus 1.50% if borrowings are $10 million or above, and plus 1.65% if borrowings are less than $10 million. There were no balances outstanding under this arrangement at October 31, 2006. This credit facility contains a number of restrictive covenants, including one that requires the borrower to maintain a minimum tangible net worth. The companies within the Media Services operations have a credit arrangement with a bank that matures in 2010 and allows separate revolving credit borrowings of up to $11,000,000 for Fulfillment Services and up to $9,000,000 for Newsstand Distribution Services, in each case based upon a prescribed percentage of the borrower's eligible accounts receivable. This agreement, as amended in May 2006, also provides an additional $10,000,000 revolving facility to a subsidiary of the Distribution Services business that may be used only to pay accounts payable under a magazine distribution agreement with one publisher customer. The individual credit lines are collateralized by substantially all of the respective borrower's assets (consisting principally of accounts receivable and machinery and equipment) and bear interest at the bank's prime rate (8.25% at October 31, 2006) or, at the borrower's option, a reserve adjusted overnight or 30-day LIBOR-based interest rate (5.34% at October 31, 2006) plus, in either case, a margin established quarterly of from 1.75% to 2.50% depending upon the borrower's funded debt-to-EBITDA ratio, as defined. At October 31, 2006, no balances were outstanding under this arrangement, and the full limits of the credit lines were available to be borrowed. The credit arrangement requires the maintenance or achievement of certain financial ratios and contains certain financial covenants, the most significant of which limit the amount of dividends and other payments that may be made by the borrowers to their parent or other affiliates, as well as capital expenditures and other borrowings. An additional $1,392,000 is available under this credit arrangement for capital expenditures. On July 14, 2006, the Board of Directors declared a special cash dividend of $0.85 per common share payable on August 16, 2006 to shareholders of record at the close of business on July 31, 2006. Previously, the Board had declared special dividends of $0.55, $0.40 and $0.25 per share following the close of AMREP's fiscal years ending April 30, 2005, 2004 and 2003, and had declared an additional special dividend of $3.50 per share in December 2005. The Board has stated it may consider special dividends from time-to-time in the future in light of conditions then existing, including earnings, financial condition, cash position, and capital requirements and other needs. Notwithstanding such statement and the status of such future conditions, no assurance is given that there will be any such future dividends declared or that future dividend declarations, if any, will be similar in amount or frequency with past dividends. 11 Cash Flows From Operating Activities - ------------------------------------ Real Estate inventory was $40,583,000 at October 31, 2006 compared to $47,533,000 at April 30, 2006. Inventory in the Company's core real estate market of Rio Rancho was $33,913,000 at October 31, 2006 and $40,981,000 at April 30, 2006. The balance of inventory consisted of properties in Colorado. Real Estate receivables increased from $14,592,000 at April 30, 2006 to $16,574,000 at October 31, 2006 resulting from the net effect of mortgages issued in connection with real estate sales that closed during the first six months of 2007 offset in part by payments received on previously issued mortgages. Receivables from Media Service operations increased from $37,140,000 at April 30, 2006 to $42,510,000 at October 31, 2006, primarily due to the timing of quarter-end billings and cash collections. Accounts payable and accrued expenses increased from $39,382,000 at April 30, 2006 to $79,481,000 at October 31, 2006 as a result of an increase in the amounts due publishers under the distribution arrangement referred to above with a new publisher customer of the Newsstand Distribution Services business that commenced in April 2006. This increase in accounts payable was offset by a corresponding increase in cash, since collections for the related magazine distribution to wholesalers under the arrangement had been received by the Company before payment to the publisher was due. In addition, pursuant to an arrangement with one publisher customer of the Newsstand Distribution Services segment that commenced in April 2006, the publisher bears the ultimate credit risk of non-collection of amounts due from the customers to which the Company distributed the publisher's magazines under this arrangement. Accounts receivable subject to this arrangement ($33,567,000 and $20,368,000 at October 31, 2006 and April 30, 2006) are netted against the related accounts payable due the publisher on the accompanying consolidated balance sheets. Deferred revenue relates to consideration received on certain real estate land sales which are accounted for under the percentage of completion method and which will be recognized as revenue as the Company completes land development work for which it remains obligated. Cash Flows From Investing Activities - ------------------------------------ On November 7, 2006, Kable entered into an agreement to acquire Palm Coast Data, LLC, a company in the fulfillment services industry. The total transaction value is approximately $92 million, subject to working capital and other adjustments. Kable plans to finance the acquisition using a combination of internal funds and borrowings. The closing of the transaction is subject to customary closing conditions and is expected to occur early in calendar 2007. Capital expenditures amounted to $3,590,000 and $1,694,000 in the first six months of 2007 and 2006 and were primarily for the acquisition of Real Estate investment property and computer hardware and software development expenditures related to Kable's Fulfillment Services business. The Company believes that it has adequate cash and financing capability to provide for its anticipated future capital expenditures. The Company is obligated to make future payments under various contracts, including its debt agreements and lease agreements, and it is subject to certain other commitments and contingencies. The table below summarizes significant contractual cash obligations as of October 31, 2006 for the items indicated (in thousands): 12 Contractual Less than 1 - 3 3 - 5 More than Obligations Total 1 year years years 5 years - -------------- ---------- ----------- ---------- ---------- ------------ Notes payable $ 4,471 $ 1,644 $ 2,388 $ 439 $ - Operating leases 23,482 5,515 6,293 4,712 6,962 ---------- ----------- ---------- ---------- ------------ Total $ 27,953 $ 7,159 $ 8,681 $ 5,151 $ 6,962 ========== =========== ========== ========== ============
Refer to Notes 9, 14 and 15 to the consolidated financial statements included in the 2006 Form 10-K for additional information on long-term debt and commitments and contingencies. Statement of Forward-Looking Information - ---------------------------------------- Certain information included herein and in other Company statements, reports and filings with the Securities and Exchange Commission is forward-looking within the meaning of the Private Securities Litigation Reform Act of 1995. Refer to Item 7 of the 2006 Form 10-K for a discussion of the assumptions and factors on which these statements are based. Any changes in the actual outcome of these assumptions and factors could produce significantly different results; accordingly, all forward-looking statements should be evaluated with the understanding of their inherent uncertainty. AMREP disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Item 3. Quantitative and Qualitative Disclosures About Market Risk - ------- ---------------------------------------------------------- The Company has several credit facilities that require the Company to pay interest at a rate that may change periodically. These variable rate obligations expose the Company to the risk of increased interest expense in the event of increases in short-term interest rates. At October 31, 2006, there were no outstanding borrowings under these variable rate arrangements so that, as a result, none of the Company's total debt of $4,471,000 was subject to variable interest rates. Refer to Item 7(A) of the Company's 2006 Form 10-K for additional information regarding quantitative and qualitative disclosures about market risk. Item 4. Controls and Procedures - ------- ----------------------- Evaluation of Disclosure Controls and Procedures The Company's management, with the participation of the Company's chief financial officer and the other executive officers whose certifications accompany this quarterly report, has evaluated the effectiveness of the Company's disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934) as of the end of the period covered by this report. As a result of such evaluation, the chief financial officer and such other executive officers have concluded that such disclosure controls and procedures are effective to provide reasonable assurance that the information required to be disclosed in the reports the Company files or submits under the Securities Exchange Act of 1934 is (i) recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms, and (ii) accumulated and communicated to the Company's management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate, to allow timely decisions regarding disclosure. The Company believes that a control system, no matter how well designed and operated, cannot provide absolute assurance that the objectives of the control system are met, and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company have been detected. 13 Changes in Internal Control over Financial Reporting No change in the Company's system of internal control over financial reporting occurred during the most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, internal control over financial reporting. PART II. OTHER INFORMATION Item 2. Unregistered Sales of Equity Securities and Use of Proceeds - ------- ----------------------------------------------------------- Pursuant to the Company's 2002 Non-Employee Directors' Stock Plan, the Company issued an aggregate of 7,500 shares of its Common Stock to its six non-employee directors on September 15, 2006, as partial payment for their services as directors for the six months preceding such issuance. These issuances were not registered under the Securities Act of 1933, as amended, by reason of the exemption provided in Section 4(2) of such Act for transactions by an issuer not involving any public offering. Item 4. Submission of Matters to a Vote of Security Holders - ------- --------------------------------------------------- The 2006 Annual Meeting of Shareholders of the Company (the "Meeting") was held on September 20, 2006. At the Meeting, Edward B. Cloues, II and James Wall were reelected directors of the Company by the following votes: For Withheld --- -------- Edward B. Cloues, II 5,858,422 388,657 James Wall 5,733,898 513,181 At the Meeting, the shareholders also voted in favor of the following two proposals by the indicated votes: Broker Proposal For Against Abstain Non-Votes -------- --- ------- ------- --------- Approval of an amendment to the Company's Certificate 5,005,723 547,892 3,712 688,752 of Incorporation to allow vacancies in the Board of Directors resulting from an increase in the number of directors to be filled by the Board. Approval of the adoption by the Board of Directors of 5,175,553 375,638 6,136 689,752 the Company's 2006 Equity Compensation Plan. Item 6. Exhibits - ------- -------- Exhibit No. Description ----------- ----------- 3(a)(i) Certificate of Incorporation, as amended - Incorporated by reference to Exhibit (3)(a)(i) to the Company's Annual Report on Form 10-K for the fiscal year ended April 30, 1998. 3(a)(ii) Certificate of Merger - Incorporated by reference to Exhibit (3)(a)(ii) to the Company's Annual Report on Form 10-K for the fiscal year ended April 30, 1998. 14 3(a)(iii) Amended Certificate of Incorporation of the Company filed in Oklahoma on September 20, 2006 - Filed herewith. 3(b) By-Laws of the Company, as amended to September 20, 2006 - Filed herewith. 31.1 Certification required by Rule 13a-14(a) under the Securities Exchange Act of 1934. 31.2 Certification required by Rule 13a-14(a) under the Securities Exchange Act of 1934. 31.3 Certification required by Rule 13a-14(a) under the Securities Exchange Act of 1934. 32 Certification required pursuant to 18 U.S.C. Section 1350.
SIGNATURE --------- Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. Date: December 14, 2006 AMREP CORPORATION (Registrant) By: /s/ Peter M. Pizza -------------------------------------------- Peter M. Pizza Vice President and Chief Financial Officer (Principal Financial and Accounting Officer) 15 EXHIBIT INDEX ------------- Exhibit No. Description ----------- ----------- 3(a)(i) Certificate of Incorporation, as amended - Incorporated by reference to Exhibit (3)(a)(i) to the Company's Annual Report on Form 10-K for the fiscal year ended April 30, 1998. 3(a)(ii) Certificate of Merger - Incorporated by reference to Exhibit (3)(a)(ii) to the Company's Annual Report on Form 10-K for the fiscal year ended April 30, 1998. 3(a)(iii) Amended Certificate of Incorporation of the Company filed in Oklahoma on September 20, 2006 - Filed herewith. 3(b) By-Laws of the Company, as amended to September 20, 2006 - Filed herewith. 31.1 Certification required by Rule 13a-14(a) under the Securities Exchange Act of 1934 - Filed herewith. 31.2 Certification required by Rule 13a-14(a) under the Securities Exchange Act of 1934 - Filed herewith. 31.3 Certification required by Rule 13a-14(a) under the Securities Exchange Act of 1934 - Filed herewith. 32 Certification required pursuant to 18 U.S.C. Section 1350.
16 EX-3 2 exh3a.txt Exhibit 3(a)(iii) AMENDED CERTIFICATE OF INCORPORATION OF AMREP CORPORATION We, the undersigned officers of AMREP Corporation, an Oklahoma corporation, do hereby file this Amended Certificate of Incorporation to reflect an amendment to the Certificate of Incorporation as set forth below: Paragraph (b) of Article SEVENTH of the Certificate of Incorporation shall be amended in its entirety to read as follows: (b) Newly created directorships resulting from any increase in the number of directors and vacancies on the Board of Directors occurring otherwise than by removal may be filled by the affirmative vote of a majority of the remaining directors then in office, even though less than a quorum of the Board of Directors, or by a sole remaining director, or by the shareholders. A vacancy caused by removal of a director shall be filled by the shareholders. Any director elected in accordance with the provisions of this Paragraph (b) shall hold office for the remainder of the full term of the class of directors in which the new directorship was created or the vacancy occurred and until such director's successor shall have been elected and qualified. If the number of directors is changed, any increase or decrease shall be apportioned among the classes by the Board of Directors so as to maintain the number of directors in each class as nearly equal as possible. No decrease in the number of directors constituting the Board of Directors shall shorten the term of any incumbent director. The foregoing amendment was adopted in accordance with the procedures set forth in Section 1077 of the Oklahoma General Corporation Act. AMREP CORPORATION By: /s/ Peter M. Pizza ------------------------------ Peter M. Pizza, Vice President ATTEST: /s/ Joseph S. Moran - -------------------------- Joseph S. Moran, Secretary EX-3 3 exh3b.txt Exhibit 3(b) As amended through 09/20/06 AMREP CORPORATION BY-LAWS Article I OFFICES Section 1. Location - --------- -------- The registered office of the Corporation in the State of Oklahoma shall be at 735 First National Building, Oklahoma City, Oklahoma. The Corporation may also have offices at such other places within and without the State of Oklahoma as the Board of Directors may from time to time appoint or the business of the Corporation may require. Article II SHAREHOLDERS Section 1. Annual Meeting - --------- -------------- An annual meeting of the shareholders for the election of directors and for the transaction of such other business as may properly come before the meeting shall be held on such date and at such time as the Board of Directors each year shall fix. Each annual meeting shall be held at such place, within or without the State of Oklahoma, as the Board of Directors shall determine. An annual meeting may be adjourned from time to time and place to place until its business is completed. The election of directors shall be by plurality vote. Section 2. Special Meetings - --------- ---------------- Special meetings of the shareholders may be called by the Board of Directors (by such vote as is required by the Certificate of Incorporation) or by the Chairman of the Board or the President. Special meetings shall be held at such place, on such date, at such time as the Board or person calling the meeting shall fix. Section 3. Notice of Meetings - --------- ------------------ Notice of every meeting of the shareholders shall be given in the manner provided by law. Section 4. Quorum - --------- ------ At any meeting of shareholders, except as otherwise required by law the holders of a majority of the shares of stock entitled to vote, present in person or represented by proxy, shall constitute a quorum for the transaction of business. If a quorum shall not be present or represented by proxy at any meeting, the chairman of the meeting or the shareholders entitled to vote thereat who are present in person or by proxy shall have power to adjourn the meeting to another place, date or time, without notice other than announcement at the meeting except as otherwise required by law. At such adjourned meeting at which the requisite amount of voting stock shall be present or represented, any business may be transacted which might have been transacted at the meeting as originally noticed. Section 5. Organization - --------- ------------ In the absence of the Chairman of the Board and the President at a meeting of shareholders, the highest ranking officer of the Corporation who is present shall call to order the meeting and act as chairman thereof. In the absence of the Secretary of the Corporation, the secretary of the meeting shall be such person as the chairman appoints. Section 6. Conduct of Business - --------- ------------------- The chairman of any meeting of shareholders shall determine the order of business and all other matters of procedure at the meeting, including such regulation of the manner of voting and the conduct of discussion as seems to him in order. The chairman may appoint one or more inspectors of Election at any meeting. Section 7. Qualification of Voters - --------- ----------------------- The Board of Directors may fix a date not more than sixty nor less than ten days before the date of any meeting of the shareholders as the record date for such meeting. Only those persons who were holders of record of voting stock at the record date shall be entitled to notice and to vote at such meeting. Section 8. Stock List - --------- ---------- A list of shareholders entitled to vote at each meeting of shareholders shall be prepared and made available for examination as required by law. Section 9. Proxy - --------- ----- Subject to the provisions of Article II, Section 7 of these By-Laws, at each meeting of the shareholders every shareholder having the right to vote shall be entitled to vote in person or by proxy appointed by an instrument in writing, provided such instrument is filed with the Office of the Secretary of the Corporation at or before the meeting. Section 10. Record date for Consents to - ---------- Corporate Actions in Writing ---------------------------- In order that the Corporation may determine the shareholders entitled to consent to corporate action in writing without a meeting, the Board of Directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board of Directors, and which date shall not be more than ten (l0) days after the date upon which the resolution fixing the record date is adopted by the Board of Directors. Any shareholder of record seeking to have the shareholders authorize or take corporate action by written consent shall, by written notice to the Secretary, request the Board of Directors to fix a record date. The Board of Directors shall promptly, but in all events within ten (l0) days after the date on which such a request is actually received, adopt a resolution fixing the record date, if no record date has been fixed by the Board of Directors within ten (l0) days of the date on which such a request is actually received, the record date for determining shareholders entitled to consent to corporate action in writing without a meeting, when no prior action by the Board of Directors is required by the Oklahoma General Corporation Act, shall be the first date on which a signed written consent setting forth the action taken or proposed to be taken is delivered to the Corporation by delivery to its registered office in the State of Oklahoma, its principal place of business, or any officer or agent of the Corporation having custody of the book in which proceedings of shareholders meetings are recorded. Delivery shall be by hand or by certified or registered mail, return receipt requested. If no record date has been fixed by the Board of Directors and prior action by the Board of Directors is required by the Oklahoma General Corporation Act, the record date for determining shareholders entitled to consent to corporate action in writing without a meeting shall be at the close of business on the day on which the Board of Directors adopts the resolution taking such prior action Article III DIRECTORS Section 1. Number, Election and Terms - --------- -------------------------- (a) The property and business of the Corporation shall be managed by the Board of Directors (the "Board"). The Board shall consist of seven directors (the "entire Board"). (b) The Directors shall be divided into three classes, as nearly equal in number as possible as determined by the Board, one class to hold office initially for a term expiring at the annual meeting of shareholders to be held in l988, another class to hold office initially for a term expiring at the annual meeting of shareholders to be held in l989, and another class to hold office initially for a term expiring at the annual meeting of shareholders to be held in l990, with the members of each class to hold office until their successors are elected and qualified. At each annual meeting of shareholders, the successors of the class of Directors whose term expires at that meeting shall be elected to hold office for a term expiring at the annual meeting of shareholders held in the third year following the year of their election and, in each case, until their respective successors are elected and qualified. Section 2. Vacancies - Change in Number of Directors - --------- ----------------------------------------- Newly created directorships resulting from any increase in the number of Directors and vacancies on the Board occurring otherwise than by removal may be filled by the majority of the remaining members of the Board, though less than a quorum, or by a sole remaining Director, or by the shareholders, and any person so elected shall hold office for the remainder of the term of the class of Directors in which the new directorship was created or the vacancy occurred and until such Director's successor shall have been elected and qualified. A vacancy caused by removal of a Director shall be filled by the shareholders. No decrease in the number of Directors constituting the Board shall shorten the term of any incumbent Director. Section 3. Organizational Meeting - --------- ---------------------- The Directors shall, if a quorum is present, hold an organizational meeting for the purpose of (a) electing from among themselves a Chairman of the Board, (b) electing officers and (c) the transaction of any other business. Such organizational meeting shall be held immediately after the annual meeting of shareholders, or as soon thereafter as practicable. Section 4. Regular Meetings - --------- ---------------- Regular meetings of the Board shall be held at such time and place as shall from time to time be determined by the Board. Section 5. Special Meetings - --------- ---------------- Special meetings of the Board may be called at any time by the Chairman of the Board or the President, and shall be called by the President or Secretary on the written request of two directors. Special meetings shall be held at the principal office of the Corporation in the City of New York, or such other place as may be set forth in the notice thereof. Section 6. Notice of Meetings - --------- ------------------ Notice of the organizational meeting need not be given if it is held immediately after the annual meeting of shareholders. Notice of regular meetings of the Board need not be given. Notice of the organizational meeting (if required) and of every special meeting of the Board shall be given to each Director at his usual place of business, or at such other address as shall have been furnished by him for the purpose. Such notice shall be given at least forty-eight hours before the meeting by telephone or by being personally delivered, mailed or telegraphed. Such notice need not include a statement of the business to be transacted at, or the purpose of, any such meeting. If a quorum shall not be present at any meeting of the Board, the directors present may adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum be present. Section 7. Quorum - --------- ------ Except as may be otherwise provided by law or in these By-Laws, the presence of one-half of the entire Board shall be necessary and sufficient to constitute a quorum for the transaction of business at any meeting of the Board and the act of a majority of the Directors present at a meeting at which a quorum is present shall be the act of the Board. Section 8. Participation in Meetings by Conference Telephone - --------- ------------------------------------------------- Members of the Board, or of any committee thereof, may participate in a meeting of such Board or committee by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and such participation shall constitute presence in person at such meeting. Section 9. Powers - --------- ------ The business, property and affairs of the Corporation shall be managed by or under the direction of its Board of Directors, which shall have and may exercise all the powers of the Corporation to do all such lawful acts and things as are not by law, or by the Certificate of Incorporation, or by these By-Laws, directed or required to be exercised or done by the shareholders. Section 10. Compensation of Directors - ---------- ------------------------- Directors shall receive such compensation for their services as shall be determined from time to time by a majority of the entire Board. Directors may receive compensation for services as director even though they are compensated for serving the Corporation in other capacities, as salaried officers or otherwise. Article IV OFFICERS - CHAIRMAN OF THE BOARD Section 1. Officers - --------- -------- The officers of the Corporation shall be elected by the Board of Directors. The officers shall be a President, one or more Vice-Presidents (one of whom may be designated Executive Vice-President), a Secretary and a Treasurer, and such other officers as the Board of Directors from time to time shall determine. The President shall be chosen from among the directors, but other officers need not be directors. The officers shall be elected annually by the Board of Directors at its first meeting following the annual meeting of shareholders, and each such officer shall hold office until the corresponding meeting in the next year and until his or her successor shall have been duly chosen and qualified, or until he or she shall have resigned or have been removed from office. Any vacancy in any of the above offices shall be filled for the unexpired portion of the term by the Board of Directors, at any regular or special meeting. A majority of the entire Board shall have power at any regular or special meeting to remove any officer, with or without cause. Section 2. Other Officers - --------- -------------- The Board of Directors may elect or appoint such other officers and agents as it shall deem appropriate. Such officers and agents shall hold office at the pleasure of the Board of Directors. Section 3. Chairman of the Board - Duties - --------- ------------------------------ The Chairman of the Board shall preside at all meetings of shareholders and of the Board of Directors at which he shall be present. He also shall have such other duties as may from time to time be assigned to him by the Board of Directors. Section 4. President - Duties - --------- ------------------ In the absence of the Chairman of the Board, the President shall preside at all meetings of shareholders and of the Board of Directors at which he shall be present. He shall be Chief Executive Officer of the Corporation and, subject to the direction of the Board of Directors, shall have direct charge and supervision of the business of the Corporation. He also shall have such other duties as from time to time may be assigned to him by the Board of Directors. Section 5. Other Officers - Duties - --------- ----------------------- The Vice-Presidents, the Secretary, the Treasurer and the other officers and agents each shall perform the duties and exercise the powers usually incident to such offices or positions and/or such other duties and powers as may be assigned to them by the Board of Directors or the Chief Executive Officer. Article V AMENDMENTS Section 1. Alterations - Amendments - Repeal - --------- --------------------------------- Subject to the Certificate of Incorporation, these By-Laws may be altered or repealed, and other By-Laws may be adopted, by a majority of the entire Board of Directors at any regular or special meeting. EX-31 4 exh31_0207.txt EXHIBIT 31.1 ------------ CERTIFICATION* - -------------- I, Peter M. Pizza, certify that: 1. I have reviewed this Quarterly Report on Form 10-Q for the period ended October 31, 2006 of AMREP Corporation; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have: (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; (b) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and (c) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors: (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: December 14, 2006 /s/ Peter M. Pizza - ----------------------- Peter M. Pizza, Vice President and Chief Financial Officer - -------------- *The registrant is a holding company which does substantially all of its business through two wholly-owned subsidiaries (and their subsidiaries). Those wholly-owned subsidiaries are AMREP Southwest Inc. ("ASW") and Kable Media Services, Inc. ("Kable"). James Wall is the principal executive officer of ASW, and Michael P. Duloc is the principal executive officer of Kable. The registrant has no chief executive officer. Its executive officers include James Wall, Senior Vice President and Peter M. Pizza, Vice President and Chief Financial Officer, and Michael P. Duloc, who may be deemed an executive officer by reason of his position with Kable. EXHIBIT 31.2 ------------ CERTIFICATION* - -------------- I, James Wall, certify that: 1. I have reviewed this Quarterly Report on Form 10-Q for the period ended October 31, 2006 of AMREP Corporation; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have: (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; (b) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and (c) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors: (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: December 14, 2006 /s/ James Wall - ------------------- James Wall* - -------------- *The registrant is a holding company which does substantially all of its business through two wholly-owned subsidiaries (and their subsidiaries). Those wholly-owned subsidiaries are AMREP Southwest Inc. ("ASW") and Kable Media Services, Inc. ("Kable"). James Wall is the principal executive officer of ASW, and Michael P. Duloc is the principal executive officer of Kable. The registrant has no chief executive officer. Its executive officers include James Wall, Senior Vice President and Peter M. Pizza, Vice President and Chief Financial Officer, and Michael P. Duloc, who may be deemed an executive officer by reason of his position with Kable. EXHIBIT 31.3 ------------ CERTIFICATION* - -------------- I, Michael P. Duloc, certify that: 1. I have reviewed this Quarterly Report on Form 10-Q for the period ended October 31, 2006 of AMREP Corporation; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have: (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; (b) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and (c) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: December 14, 2006 /s/ Michael P. Duloc - ------------------------- Michael P. Duloc* - -------------- *The registrant is a holding company which does substantially all of its business through two wholly-owned subsidiaries (and their subsidiaries). Those wholly-owned subsidiaries are AMREP Southwest Inc. ("ASW") and Kable Media Services, Inc. ("Kable"). James Wall is the principal executive officer of ASW, and Michael P. Duloc is the principal executive officer of Kable. The registrant has no chief executive officer. Its executive officers include James Wall, Senior Vice President and Peter M. Pizza, Vice President and Chief Financial Officer, and Michael P. Duloc, who may be deemed an executive officer by reason of his position with Kable. EX-32 5 exh32_0207.txt EXHIBIT 32 ---------- CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350 AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 In connection with the Quarterly Report of AMREP Corporation (the "Company") on Form 10-Q for the period ended October 31, 2006 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), each of the undersigned does hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to his knowledge: (1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and (2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. Dated: December 14, 2006 /s/ Peter M. Pizza ------------------------ Peter M. Pizza* Vice President and Chief Financial Officer /s/ James Wall ------------------------ James Wall* /s/ Michael P. Duloc ------------------------ Michael P. Duloc* - -------------- *The registrant is a holding company which does substantially all of its business through two wholly-owned subsidiaries (and their subsidiaries). Those wholly-owned subsidiaries are AMREP Southwest Inc. ("ASW") and Kable Media Services, Inc. ("Kable"). PersonNameJames Wall is the principal executive officer of ASW, and Michael P. Duloc is the principal executive officer of Kable. The registrant has no chief executive officer. Its executive officers include PersonNameJames Wall, Senior Vice President and Peter M. Pizza, Vice President and Chief Financial Officer, and Michael P. Duloc, who may be deemed an executive officer by reason of his position with Kable. -----END PRIVACY-ENHANCED MESSAGE-----