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AMREP CORP. - Annual Report: 2008 (Form 10-K)


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

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

(Mark One)

[ x ] Annual  Report  pursuant  to  Section  13 or  15(d)  of the  Securities
      Exchange Act of 1934 For the fiscal year ended April 30, 2008
                                       OR

[   ] Transition  Report  pursuant  to Section  13 or 15(d) of the  Securities
      Exchange Act of 1934 For the transition period from          to
                                                          --------    ---------

                          Commission File Number 1-4702
                                                -------

                                AMREP CORPORATION
                                -----------------
             (Exact name of registrant as specified in its Charter)

             Oklahoma                                    59-0936128
             --------                                    ----------
  (State or other jurisdiction of              (IRS Employer Identification No.)
   incorporation or organization)

   300 Alexander Park, Suite 204
       Princeton, New Jersey                               08540
       ---------------------                               -----
(Address of principal executive offices)                (Zip Code)

       Registrant's telephone number, including area code: (609) 716-8200
                                                           --------------

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

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

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

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

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

Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Act during the preceding 12 months (or
for such shorter  period that the Registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days.
                            Yes   X     No
                                -----      -----

Indicate by check mark if disclosure of delinquent  filers  pursuant to Item 405
of Regulation  S-K is not contained  herein,  and will not be contained,  to the
best  of  the  Registrant's   knowledge,  in  definitive  proxy  or  information
statements  incorporated  by  reference  in Part  III of this  Form  10-K or any
amendment to this Form 10-K. [X]



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

Large accelerated filer              Accelerated filer           X
                            ---                                 ---
Non-accelerated filer                Smaller reporting company
                            ---                                 ---
(Do not check if a smaller reporting company)

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

As of October 31, 2007, which was the last business day of the Registrant's most
recently  completed  second fiscal  quarter,  the aggregate  market value of the
Common Stock held by  non-affiliates  of the  Registrant was  $65,671,838.  Such
aggregate  market  value was  computed by reference to the closing sale price of
the  Registrant's  Common Stock as quoted on the New York Stock Exchange on such
date. For purposes of making this  calculation  only, the Registrant has defined
affiliates as including all directors and executive officers and certain persons
related to them.  In making such  calculation,  the  Registrant  is not making a
determination of the affiliate or non-affiliate  status of any holders of shares
of Common Stock.

As of July 11, 2008,  there were  5,995,212  shares of the  Registrant's  Common
Stock outstanding.

                       DOCUMENTS INCORPORATED BY REFERENCE

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






























                                       2




                                     PART I
                                     ------

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

The Company* was organized in 1961 and, through its  subsidiaries,  is primarily
engaged in three business  segments:  the Real Estate business operated by AMREP
Southwest Inc. and its subsidiaries (collectively,  "AMREP Southwest"),  and the
Fulfillment Services and Newsstand  Distribution Services businesses operated by
Kable Media Services,  Inc. and its subsidiaries  (collectively,  "Kable"). Data
concerning  industry  segments  is set  forth  in  Note 19 of the  notes  to the
consolidated  financial  statements.  The Company's foreign sales and activities
are not significant.

                             REAL ESTATE OPERATIONS

The Company  conducts its Real Estate  business  through AMREP  Southwest,  with
these  activities  occurring  primarily  in the City of Rio Rancho  and  certain
adjoining areas of Sandoval County,  New Mexico.  References below to Rio Rancho
include the City and such adjoining  areas. As of July 1, 2008,  AMREP Southwest
employed approximately 15 persons.

Properties - Rio Rancho

Rio  Rancho  consists  of  91,049  contiguous  acres  in  Sandoval  County  near
Albuquerque,  of  which  approximately  73,750  acres  have  been  platted  into
approximately  114,600 home site and commercial lots, 16,470 acres are dedicated
to community facilities, roads and drainage and the remainder is unplatted land.
At April 30, 2008, approximately 90,630 of these residential and commercial lots
had been sold net of lot repurchases.  The Company currently owns  approximately
17,240 acres in Rio Rancho, of which approximately 4,500 acres are in contiguous
blocks,  which  are  being  developed  or  are  suitable  for  development,  and
approximately  1,990 acres are in areas with a high  concentration of ownership,
where the  Company  owns more than 50% of the lots in the area.  These areas are
suitable for special assessment  districts or city redevelopment  areas that may
allow for future development under the auspices of local government. The balance
of acres owned is in scattered lots, where the Company owns less than 50% of the
lots in the area,  that may  require  the  purchase  of a  sufficient  number of
adjoining lots to create tracts suitable for development or that the Company may
attempt to sell individually or in small groups.

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

The City of Rio Rancho is the third largest city in New Mexico with a population
of  approximately  75,000.  It was named as the 56th best place to live by Money
magazine in 2006 for those cities in the United  States with greater than 50,000
residents.  The  city's  population  growth  rate for the period  2000-2006  was
approximately  40%, with a February 2008 unemployment rate of 3.7%. The city has
significant  construction  projects  recently  completed,  ongoing or announced,
including:  (i) a new central business  district with a 6,500 seat events center
and a new city  hall,  (ii) a planned  second  high  school,  (iii) the  planned
opening of the University of New Mexico West Campus, (iv) a 53 acre major motion
picture studio and (v) a new hospital.  Major non-government employers currently
include Intel  Corporation,  US Cotton and customer care call centers of Bank of
America, JC Penney, Victoria's Secret and Sprint PCS.
--------------------
*As used herein,  "Company" includes the Registrant and its subsidiaries  unless
the context requires or indicates  otherwise.


                                       3


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

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


                                           Acres                                Revenues
                                           Sold            Revenues             Per Acre
                                         ----------    -----------------     ---------------
                 2008:
                  Developed
                    Residential              30         $    9,542,000        $    318,100
                    Commercial               39              8,651,000             221,800
                                         ----------    -----------------     ---------------
                  Total Developed            69             18,193,000             263,700
                  Undeveloped               337              9,709,000              28,800
                                         ----------    -----------------     ---------------
                   Total                    406         $   27,902,000        $     68,700
                                         ----------    -----------------     ---------------

                 2007:
                  Developed
                    Residential             138         $   39,407,000        $    285,600
                    Commercial               56             15,728,000             280,900
                                         ----------    -----------------     ---------------
                  Total Developed           194             55,135,000             284,200
                  Undeveloped               857             40,690,000              47,500
                                         ----------    -----------------     ---------------
                   Total                  1,051         $   95,825,000        $     91,200
                                         ----------    -----------------     ---------------

                 2006:
                  Developed
                    Residential             147         $   31,920,000        $    217,100
                    Commercial               22              6,376,000             289,800
                                         ----------    -----------------     ---------------
                  Total Developed           169             38,296,000             226,600
                  Undeveloped               746             19,514,000              26,200
                                         ----------    -----------------     ---------------
                   Total                    915         $   57,810,000        $     63,200
                                         ----------    -----------------     ---------------


Other Properties

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

       FULFILLMENT SERVICES AND MAGAZINE DISTRIBUTION SERVICES OPERATIONS

The Company (i) through Kable and its Kable Fulfillment  Services and Palm Coast
Data Holdco, Inc. ("Palm Coast")  subsidiaries  performs fulfillment and related
services for publishers and other customers and (ii) through Kable and its Kable
Distribution  Services  subsidiary  distributes  periodicals  nationally  and in
Canada and, to a small degree, in other foreign  countries.  As of July 1, 2008,
Kable employed  approximately  2,000 persons,  of whom approximately  1,850 were
involved in fulfillment activities and 150 in distribution activities.

Fulfillment Services

Kable's  Fulfillment  Services  business  performs a number of  fulfillment  and
fulfillment-related  activities,  principally magazine subscription  fulfillment
services,  list services and product fulfillment services,  and it accounted for
91% of Kable's revenues in 2008.

In the magazine subscription fulfillment services operation, Kable processes new
orders,  receives  and  accounts  for  payments,  prepares  and  sends  to  each
publisher's  printer  labels or tapes  containing  the names  and  addresses  of


                                       4


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

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

Kable performs  fulfillment  services for approximately  920 different  magazine
titles for approximately 280 clients and maintains  databases of over 76 million
active subscribers for its client publishers. In a typical month, Kable produces
approximately  90 million  mailing  labels for its  client  publishers  and also
processes over 29 million pieces of outgoing mail for these clients.

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

Newsstand Distribution Services

In its Newsstand  Distribution  Services operation,  Kable distributes magazines
for  approximately  240 publishers.  Among the titles are many special  interest
magazines,  including various puzzle, automotive, comics, romance and sports. In
a typical month,  Kable  distributes  approximately 57 million copies of various
titles to wholesalers.  Kable  coordinates the movement of the publications from
its  publisher  clients  to  approximately  100  independent  wholesalers.   The
wholesalers in turn sell the publications to major retail chains and independent
retail outlets. All parties generally have full return rights for unsold copies.
The newsstand  distribution  business  accounted  for 9% of Kable's  revenues in
2008.

While Kable may not handle all publications of an individual  publisher  client,
it usually is the exclusive  distributor  into the consumer  marketplace for the
publications it distributes.  Kable has a distribution sales and marketing force
that works with  wholesalers and retailers to promote  magazine sales and assist
in determining the appropriate number of copies of an individual  magazine to be
delivered to each  wholesaler  and  ultimately  each  retailer  serviced by that
wholesaler.  Kable  generally  does not  physically  handle any  product.  Kable
generates and delivers to each publisher's  printer shipping  instructions  with
the  addresses  of the  wholesalers  and the  number of copies of  product to be
shipped to each. All magazines  have a defined "off sale" date  following  which
the retailers  return unsold copies to the  wholesalers,  who destroy them after
accounting for returned merchandise in a manner satisfactory to and auditable by
Kable.

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

Kable competes primarily with three other national  distributors.  Each of these
competitors is owned by or affiliated with a magazine publishing  company.  Such
companies  publish a  substantial  portion of all  magazines  sold in the United
States,  and  the  competition  for the  distribution  rights  to the  remaining
publications is intense.  In addition,  there has been a major consolidation and


                                       5


reduction  in the  number of  wholesalers  to whom Kable  distributes  magazines
arising from changes within the magazine  distribution industry in recent years.
As a result,  three of these wholesalers  accounted for approximately 66% of the
fiscal 2008 gross billings of the Newsstand  Distribution  Services  operations,
which is common for the industry,  and approximately 42% of Kable's consolidated
accounts receivable were due from these wholesalers at April 30, 2008.

Item 1A. Risk Factors
-------- ------------
The risks  described  below are among those that could  materially and adversely
affect the Company's  business,  financial  condition or results of  operations.
These risks could cause  actual  results to differ  materially  from  historical
experience and from results predicted by any forward-looking  statements related
to  conditions  or events that may occur in the future.  These risks are not the
only risks the Company  faces,  and other risks  include  factors not  presently
known as well as those that are currently considered to be less significant.

Risks Related to the Company's Real Estate Operations
-----------------------------------------------------

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

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

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

Intel Corporation,  the largest employer in Rio Rancho with approximately  3,300
full-time   employees  at  April 30,   2008,   operates  a  large  semiconductor
manufacturing facility there and has announced its plan to retool this facility.
Intel  Corporation had approximately  4,700 full-time  employees as of April 30,
2007 and the  reduction  in force  reflects  a May 3, 2007  announcement  that a
workforce  reduction  would occur at that facility  beginning in August 2007. If
Intel Corporation's  presence in Rio Rancho were to continue to diminish for any
reason,  such as in response to a downturn  in its  semiconductor  manufacturing
business,  the Rio Rancho real estate market and consequently the Company's land
development business located there could be adversely affected.

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

When the  Company  acquired  its core real estate  inventory  in Rio Rancho over
40 years ago, the area was not developed and had a low  population.  As of April
30,  2008,  Rio  Rancho  was the  third  largest  city in New  Mexico  and had a
population of  approximately  75,000.  As Rio Rancho's  population  continues to
grow, the Company may be unable to engage in development  activities  comparable
to those the Company has engaged in  historically.  Local community or political
groups may oppose the Company's  development  plans or require  modification  of
those  plans,  which could cause  delays or increase  the cost of the  Company's
development  projects.  In addition,  zoning density limitations,  "slow growth"
provisions or other land use  regulations  implemented  by state,  city or local
governments could further restrict the Company's development activities or those
of its homebuilder customers, or could adversely affect financial returns from a
given project, which could adversely affect the Company's results of operations.

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

Substantially  all of the Company's real estate  revenues are derived from sales
of the Company's core  inventory in Rio Rancho.  This property was acquired more


                                       6


than 40 years  ago, and each time the Company  develops and sells real estate to
customers in Rio Rancho, the Company's real estate assets diminish.  As of April
30, 2008, the Company owned  approximately  17,240 acres in Rio Rancho out of an
original  purchase of  approximately  91,000 acres.  The  continuity  and future
growth of the  Company's  real estate  business  will  require  that the Company
acquire  new  properties  in or near Rio  Rancho or expand to other  markets  to
provide  sufficient assets to maintain the Company's current level of operations
and revenues. While the Company holds two properties in Colorado, it has not for
many years made any  significant  attempt to identify a development  opportunity
similar to the one the Company has undertaken in Rio Rancho, and there can be no
assurance that the Company will identify such an opportunity in another  market.
If the Company does not acquire new real estate assets, its real estate holdings
will continue to diminish,  which will adversely affect the Company's ability to
continue its real estate operations at their current level.

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

Of the  approximately  17,240  acres in Rio  Rancho  that the  Company  owned at
April 30,  2008,  approximately  4,500 acres were in contiguous  blocks that are
being developed or are suitable for development,  and approximately  1,990 acres
were in areas with a high  concentration  of  ownership,  where the Company owns
more than 50% of the lots in the area, suitable for special assessment districts
or city  redevelopment  areas  that may allow for future  development  under the
auspices  of local  government.  The  balance is in  scattered  lots,  where the
Company  owns  less  than 50% of the lots in the  area,  that  may  require  the
purchase of a sufficient  number of adjoining lots to create tracts suitable for
development  or that the Company may  attempt to sell  individually  or in small
groups.  As the  Company's  land sales  continue and the amount of the Company's
contiguous and highly  concentrated  lots diminishes,  the Company's  ability to
continue  to sell lots and  generate  land sale  revenues  at the  levels of the
recent past may be adversely affected, which would have an adverse effect on the
Company's results of operations.

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

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

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

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

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

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

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

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

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



                                       7


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

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

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

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

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

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

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

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

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

                                       8


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

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

The Company may be subject to environmental liability.

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

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

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

  -  changes in government regulation;

  -  periods of general economic slowdown or recession;

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

  -  adverse changes in local or regional economic conditions;

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

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

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

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

Changes in interest rates and other economic factors can dramatically affect the
availability of capital for the Company's developer  customers.  Residential and
commercial  developers to whom the Company  frequently sells land typically rely
upon  third  party  financing  to  provide  the  capital   necessary  for  their
acquisition of land.  Changes in economic and other external  market  conditions


                                       9


may result in a developer's inability to obtain suitable financing,  which could
adversely  impact the  Company's  ability to sell land,  or force the Company to
sell  land at  lower  prices,  which  would  adversely  affect  its  results  of
operations.

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

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

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

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

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

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

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

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

Risks Related to the Company's Media Service Operations
-------------------------------------------------------
The Company's media services  operations could face increased costs and business
disruption from instability in the newsstand distribution channel.

The Company extends credit to various newsstand distribution services customers,
whose credit  worthiness  and  financial  position may be affected by changes in
economic  or  other  external   conditions.   Financial   instruments  that  may
potentially subject the Company to a significant concentration of risk primarily
consist  of  trade  accounts   receivable  from   wholesalers  in  the  magazine
distribution  industry.  Due to industry  consolidation,  four major  wholesaler
groups represent over 80% of the wholesale magazine distribution  business,  and
the  insolvency  of any of them  could  have a  material  adverse  impact on the
Company's results of operations and financial condition. In addition, due to the
significant  concentration,  should  there  be a  disruption  in  the  wholesale
channel,  it could impede the Company's  ability to distribute  magazines to the
retail marketplace.

                                       10


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

As is  customary  in  the  magazine  distribution  industry,  almost  all of the
Company's revenues in its newsstand  distribution  services business segment are
derived from sales made on a fully returnable basis,  meaning that customers may
return unsold copies of magazines for credit.  During the Company's  fiscal year
ended April 30, 2008, customers ultimately returned for credit approximately 68%
of the magazines  initially  distributed by the Company.  The Company recognizes
revenues  from the  distribution  of  magazines  at the time of  delivery to the
wholesalers,  less a reserve for  estimated  returns that is based on historical
experience  and  recent  sales data on an  issue-by-issue  basis.  Although  the
Company has the  contractual  right to return  these  magazines  for  offsetting
credits from the publishers  from whom the magazines are purchased,  an error in
estimating  the  percentage of returns at the end of an accounting  period could
have the effect of understating or overstating  revenues in the period affected,
which  misstatement  would have to be adjusted in the subsequent period when the
actual return information became known.

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

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

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

The Company's  publisher  customers'  principal raw material is paper. Paper and
printing  prices have  fluctuated  over the past several years,  and significant
unanticipated  increases  in paper  prices  could  adversely  affect a publisher
customer's  operating  income.  Postage  for  magazine  distribution  and direct
solicitation is another significant operating expense of the Company's publisher
customers,  which  primarily use the U.S.  Postal  Service to  distribute  their
products.  The U.S. Postal Service  implemented a postal rate increase effective
May 12, 2008. Any significant increases in paper costs, printing costs or postal
rates that  publishers  are not able to offset  could have a negative  affect on
their operating  income,  and this in turn could negatively affect the Company's
media services operations.

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

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

                                       11


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

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

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

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

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

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

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

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

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

The Company  processes a large number of credit card  transactions  on behalf of
its  fulfillment  services  customers and is thus subject to the extensive rules
and regulations of the leading credit card  associations.  The card associations
modify their rules and regulations from time to time and the Company's inability
to anticipate changes in rules, regulations or the interpretation or application
thereof may result in substantial disruption to its business.  In the event that
the card associations or the sponsoring banks determine that the manner in which
the Company  processes  certain  card  transactions  is not in  compliance  with
existing rules and regulations,  or if the card associations  adopt new rules or
regulations that prohibit or restrict the manner in which the Company  processes


                                       12


card  transactions,  the  Company may be forced to modify the manner in which it
operates,  which  may  increase  costs,  or cease  processing  certain  types of
transactions  altogether,  either of which  could have a negative  impact on its
business.  As an example of the card  associations  amending their  regulations,
Kable is now  required  to comply  with the  Payment  Card  Industry  (PCI) Data
Security  Standard.  The  Company  continues  to  implement  its  plans  at  its
fulfillment  services  locations where credit card transactions are processed in
order to meet the compliance requirements of the PCI Data Security Standard. The
Company may be subject to  substantial  penalties  and fines if it is determined
that its plans or performance do not meet the compliance requirements of the PCI
Data Security Standard.

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

During  fiscal 2003,  Kable  acquired the  Colorado-based  fulfillment  services
business of Electronic Data Systems Corporation  ("EDS").  Since that time Kable
has outsourced to EDS a substantial  portion of the data processing  required to
service that  business and during fiscal 2008 has migrated much of that activity
to  its  own  systems.   However,  under  the  outsourcing  contract,  the  full
outsourcing  charge  remains  payable so long as any  outsourcing  services  are
provided. The Company anticipates completing this migration process by September
2008. The migration  process is technically  complex,  however,  and the Company
continues to address issues that have delayed the complete migration. Should the
Company  encounter  unanticipated  problems that will further delay the complete
migration, it may continue to be burdened with the outsourcing of this business.

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

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

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

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

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

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

From time to time, the Company may seek to grow through  strategic  acquisitions
intended to complement or expand one or more of its business  segments,  such as
the acquisition of Palm Coast in January 2007, or to enable the Company to enter
a new  business.  The success of these  transactions  will depend in part on the
Company's  ability to  integrate  the  systems and  personnel  acquired in these


                                       13


transactions into its existing  business without  substantial  costs,  delays or
other operational or financial problems.  The Company may encounter difficulties
in  integrating  acquisitions  with the  Company's  operations  or in separately
managing a new business.  Furthermore, the Company may not realize the degree of
benefits that the Company anticipates when first entering into a transaction, or
the Company may realize  benefits more slowly than it anticipates.  Any of these
problems or delays could adversely affect the Company's results of operations.

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

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

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

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

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

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

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

The Company's  pension plan was underfunded on a generally  accepted  accounting
principles  basis by  approximately  $2.0 million at April 30, 2008. The Company
froze the  pension  plan  effective  March 1,  2004 so that from that date there
would be no new participants in the plan and the existing  participants'  future
compensation  would  not  affect  their  pension  benefits.   A  key  assumption
underlying the actuarial  calculations  upon which the Company's  accounting and
reporting  obligations  for the pension plan are based is an assumed  investment
rate of return of eight  percent.  If the pension plan assets do not realize the
expected  rate of  return,  or if any other  assumptions  are  incorrect  or are
modified,  the Company  could be required to make  contributions  to the pension
plan until the plan is fully funded,  which could limit the Company's  financial
flexibility.

                                       14


The   Company's   quarterly   and  annual   operating   results  can   fluctuate
significantly.

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

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

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

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

The market price for the Company's common stock varied between a high of $149.99
and a low of $26.17 per share  during the two years ended April 30,  2008.  This
volatility may make it difficult for a shareholder to sell the Company's  common
stock,  and the sale of substantial  amounts of the Company's common stock could
adversely  affect the price of the common stock.  The  Company's  stock price is
likely to continue to be volatile and subject to significant price  fluctuations
in response to market and other factors,  including the other factors  discussed
in "Risk Factors," and:

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

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

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

  -  adverse changes in general market conditions or economic trends.

In  addition to the factors  discussed  above,  the  Company's  common  stock is
relatively thinly traded,  which means that large  transactions in the Company's
common  stock may be  difficult  to  conduct in a short time frame and may cause
significant fluctuations in the price of the Company's common stock. The average
daily  trading  volume  in the  Company's  common  stock on the New  York  Stock
Exchange  over  the  ten-day  trading  period  ending  on  April  30,  2008  was
approximately  58,400  shares per day.  Further,  there have been,  from time to
time, significant "short" positions in the Company's common stock, consisting of
borrowed  shares sold,  or shares sold for future  delivery,  which may not have
been  borrowed.  The Company does not know whether any of these short  positions
are covered by "long"  positions owned by the short sellers.  The short interest
in the Company's common stock, as reported by the New York Stock Exchange on May
30,  2008,  was  approximately  316,000  shares,  or  approximately  5.3% of the
Company's  outstanding  shares.  Any attempt by the short  sellers to  liquidate
their positions over a short period of time could cause  significant  volatility
in the price of the Company's common stock.

In the past, following periods of volatility in the market price of their stock,
many companies have been the subject of securities class action  litigation.  If
the Company  becomes  involved in  securities  class  action  litigation  in the
future,  it could result in  substantial  costs and  diversion of the  Company's
management's  attention and resources and could harm the Company's  stock price,
business, prospects, results of operations and financial condition. In addition,
the  broader  stock  market  has  experienced   significant   price  and  volume


                                       15


fluctuations in recent years.  This volatility has affected the market prices of
securities  issued by many  companies for reasons  unrelated to their  operating
performance and may adversely affect the price of the Company's common stock.

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

The Company has a principal  shareholder,  Nicholas G. Karabots,  who,  together
with  certain  of  his  affiliates,  currently  owns  approximately  61%  of the
Company's  outstanding  common stock.  As a result,  this principal  shareholder
exercises  significant  influence over the Company's major decisions,  including
through his ability to vote for the members of the Company's Board of Directors.
Because of this voting power,  the  principal  shareholder  could  influence the
Company to make  decisions that might run counter to the wishes of the Company's
other investors generally. In addition, publishing companies owned or controlled
by the Company's  principal  shareholder are also  significant  customers of the
Company's  distribution  business,  as  well  as  customers  of its  fulfillment
services business, and, as a result, the shareholder may have business interests
with  respect to the Company  that  differ from or conflict  with those of other
holders of the Company's common stock.

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

The Company has paid special cash  dividends on its common stock during the five
fiscal  years 2004  through  2008 of $0.25,  $0.40,  $0.55,  $0.85 and $1.00 per
share,  and also paid an additional  special cash dividend of $3.50 per share in
January  2006.  The Board of Directors  has stated that it may consider  special
dividends from  time-to-time in the future in light of conditions then existing,
including earnings, financial condition, cash position, and capital requirements
and other needs.  Notwithstanding  such  statement and the status of such future
conditions,  no assurance is given that there will be any such future  dividends
declared or that future dividend  declarations,  if any, will be commensurate in
amount or frequency with past dividends.

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

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

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

The Company is an Oklahoma  corporation,  and the  anti-takeover  provisions  of
Oklahoma  law impose  various  impediments  to the  ability of a third  party to
acquire control of the Company,  even if a change in control would be beneficial
to the Company's  existing  shareholders.  The Company's amended  certificate of


                                       16


incorporation  generally  prohibits  the  Company  from  engaging  in  "business
combinations"  with an "interested  shareholder"  unless the holders of at least
two-thirds  of  the  Company's  then   outstanding   common  stock  approve  the
transaction.

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

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

  -  prohibit shareholders from calling a special meeting of shareholders.

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

Item 1B. Unresolved Staff Comments
-------- -------------------------

Not applicable.

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

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

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

A. A subsidiary of Kable was one of a number of defendants in a lawsuit in which
the  plaintiff,  a former  wholesaler  no longer in  business,  alleged that the
Company and other national  magazine  distributors  and  wholesalers  engaged in
violations of the Robinson-Patman Act (which generally prohibits  discriminatory
pricing) that caused it to go out of business. The plaintiff sought damages from
the Kable defendant of approximately $15.2 million; any damages awarded would be
trebled. In September 2005, the Court granted the motion for summary judgment of
the  defendants,  including  Kable,  and  judgment  in favor of the  defendants,
including Kable, was entered.  The plaintiff filed an appeal of the judgment and
on March 25, 2008 the  appellate  court denied the appeal.  All time periods for
the  plaintiff  to seek further  review of the summary  judgment in favor of the
defendants have expired and plaintiff's case is over.

B. In June 2008 a lawsuit was brought  against the Company's Kable News Company,
Inc.  subsidiary by the owner of a warehouse  building  leased by the subsidiary
that was totally destroyed in a fire in December 2007. An employment agency that
provided the subsidiary  with a temporary  employee who is alleged to have had a
role in starting  the fire is also named as a defendant.  Plaintiff  charges the
subsidiary with  negligence and willful and wanton  misconduct and seeks damages
in excess of $50,000.  The Company's  liability  insurance provides coverage for
the negligence  claim up to the policy limit,  which may or may not be more than
the full amount of plaintiff's  claimed damages,  which is unknown at this time.
Additionally, the insurance carrier has indicated it intends to deny coverage of
the  willful  and wanton  misconduct  claim.  The  Company  believes it has good
defenses to the  charges and  assertable  claims  against the other  parties for
their  conduct in the matter,  and  intends  vigorously  to defend the  lawsuit.
However,  the proceeding is in its very earliest stage and the Company is not in
a position to offer a prediction as to its outcome.

                                       17


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

Item 4. Submission of Matters to a Vote of Security Holders
------- ---------------------------------------------------
There were no matters  submitted to a vote of security holders during the fourth
quarter of fiscal 2008.

Executive Officers of the Registrant

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

Name              Office Held / Principal Occupation for Past Five Years    Age
----              ------------------------------------------------------    ---
James Wall        Senior Vice President of the Company since 1991;          71
                  Chairman, President and Chief Executive Officer of
                  AMREP Southwest Inc. since 1991.


Peter M. Pizza    Vice President and Chief Financial Officer of the         57
                  Company since 2001; Vice President and Controller
                  of the Company from 1997 to 2001.


Irving Needleman  Vice President, General Counsel and Secretary of the      70
                  Company since November 2006; Of counsel to the law
                  firm of McElroy, Deutsch, Mulvaney & Carpenter, LLP
                  from September 2005 to October 2006.  Partner in the
                  law firm of Jacobs Persinger & Parker for more than
                  four years prior to September 2005.

Michael P. Duloc  President and Chief Executive Officer of Kable            51
                  Media Services since June 1, 2007; President of
                  Kable's Newsstand Distribution Services business
                  since 1996 and Chief Operating Officer of that business
                  until June 2007; President and Chief Operating Officer
                  of Kable's Fulfillment Services business from 2000 until
                  January 2007.

John Meneough     Executive Vice President, Fulfillment Services of         60
                  Kable Media Services, Inc. and President and Chief
                  Operating Officer of the Company's Fulfillment Services
                  business since January 2007.  President of Palm Coast
                  Data Holdco, Inc. and Palm Coast Data LLC since 2002
                  and President of their predecessor companies since 1996.

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



                                       18




                                     PART II
                                     -------
Item 5. Market for Registrant's  Common Equity,  Related Stockholder Matters and
------- ------------------------------------------------------------------------
        Issuer Purchases of Equity
        --------------------------
The Company's  common stock is traded on the New York Stock  Exchange  under the
symbol "AXR". On July 1, 2008, there were approximately 900 holders of record of
the common stock. The range of high and low sales prices for the last two fiscal
years by quarter is presented below:

                     FIRST                   SECOND                    THIRD                    FOURTH
               -------------------    -------------------      ----------------------    ---------------------
                 HIGH        LOW        HIGH        LOW          HIGH          LOW         HIGH         LOW
               --------    --------   --------   --------      ---------     --------    ---------    --------
   2008        $  69.31    $  40.75   $  41.54   $  26.17      $   46.34     $  27.94    $   58.25    $  34.47
   2007        $  65.00    $  34.55   $  73.70   $  35.84      $  149.99     $  57.14    $  111.75    $  59.00

Dividend Policy

The Company paid  special cash  dividends on its common stock of $1.00 and $0.85
per share during 2008 and 2007 following the end of the preceding  fiscal years.
The Board of Directors has stated that it may consider  special  dividends  from
time-to-time  in the  future in light of  conditions  then  existing,  including
earnings, financial condition, cash position, and capital requirements and other
needs.  Notwithstanding such statement and the status of such future conditions,
no assurance is given that there will be any such future  dividends  declared or
that future  dividend  declarations,  if any, will be  commensurate in amount or
frequency with past dividends.

Performance Graph

The following  graph compares the  cumulative  total  shareholder  return on the
Company's common stock with the cumulative total return of the Standard & Poor's
500  Index  ("S&P  500  Index")  and with an index  comprised  of the  stock (or
comparable equity interest) of 27 companies with market capitalizations  similar
to that of the Company  ("Similar Cap Issuers"),  for the five years ended April
30, 2008 (assuming the  investment of $100 in the stock of the Company,  the S&P
500 Index and the  Similar Cap Issuers at the close of trading on April 30, 2003
and the reinvestment of all dividends).  The Company cannot identify an index of
issuers engaged in operations  similar to those in which it is currently engaged
and  therefore  has  determined  to use the Similar Cap Issuers for  purposes of
comparison.


                                       19


        Company Name / Index                         2003       2004      2005      2006      2007      2008
        -----------------------------------------------------------------------------------------------------
        AMREP CORP                                    100     187.86    269.27    599.07    789.75    703.81
        S&P 500 INDEX                                 100     122.88    130.67    150.81    173.79    165.66
        SIMILAR CAP ISSUERS                           100     258.59    293.77    400.95    402.50    275.44


The Similar Cap Issuers are: Array  Biopharma  Inc., ATP Oil & Gas  Corporation,
Avigen, Inc., Bar Harbor Bankshares, Blue Coat Systems, Inc., California Coastal
Communities,  Inc., Capital Senior Living Corporation,  Charles & Colvard, Ltd.,
ChipMOS Technologies (Bermuda) Ltd.,  Communications Systems, Inc., Consolidated
Water Co. Ltd., Dynamex Inc., Heska  Corporation,  Interleukin  Genetics,  Inc.,
Ladish Co., Inc., Landec  Corporation,  LCA-Vision Inc.,  Mesabi Trust,  Network
Engines,  Inc.,  Peoples  Community  Bancorp,  Inc.,  Performance  Technologies,
Incorporated,  Pioneer Drilling Company, Poniard Pharmaceuticals,  Inc., Sparton
Corporation,  Tandy Brands Accessories, Inc., USA Mobility, Inc., Vist Financial
Corp.

As a result of changes in market  capitalizations from year to year, none of the
companies  comprising  the Similar Cap Issuer index in the  Company's  2007 Form
10-K met the criteria for inclusion in the Similar Cap Issuer index in this Form
10-K.  The  companies  comprising  the Similar Cap Issuer index in the Company's
2007 Form 10-K were: Alvarion Ltd., American Bank Incorporated,  Auburn National
Bancorporation,  Inc.,  Bioenvision,  Inc.,  Continental Materials  Corporation,
Criticare Systems, Inc., Empire Resorts, Inc., Fauquier Bankshares,  Inc., Focus
Enhancements,  Inc., Franklin Covey Co., Hi-Tech Pharmacal Co., Inc.,  Investors
Title Company, Loud Technologies Inc., Medtox Scientific,  Inc., Misonix,  Inc.,
Mocon,  Inc.,  Novadel Pharma Inc.,  NTN Buzztime,  Inc.,  Olympic Steel,  Inc.,
Peerless Mfg. Co., Premier Financial Bancorp, Inc., RCM Technologies,  Inc., Sun
Hydraulics Corporation,  Tele Norte Cellular Holding Company,  Telecommunication
Systems, Inc., Tutogen Medical, Inc., and XETA Technologies, Inc.

Equity Compensation Plan Information

See Item 12 of Part III of this  annual  report on Form  10-K that  incorporates
such  information by reference from the Company's  Proxy  Statement for its 2008
Annual Meeting of Shareholders.

                                       20


Item 6. Selected Financial Data
------- -----------------------

The selected consolidated  financial data presented below for, and as of the end
of, each of the last five fiscal years has been derived from and is qualified by
reference to the consolidated  financial statements.  The consolidated financial
statements have been audited by McGladrey & Pullen, LLP, independent  registered
public  accounting firm. The information  should be read in conjunction with the
consolidated  financial  statements and related notes thereto and  "Management's
Discussion and Analysis of Financial Condition and Results of Operations", which
is Item 7 of Part  II of this  annual  report  on Form  10-K.  These  historical
results  are not  necessarily  indicative  of the  results to be expected in the
future.


                                                        Year Ended April 30,
                             -------------------------------------------------------------------------------
                                  2008             2007           2006            2005              2004
                             --------------  ---------------  --------------- ---------------  -------------
                                                (In thousands, except per share amounts)
Financial Summary:
  Revenues                    $  172,061       $  204,839       $   148,296      $  134,506      $  129,291
  Income from Continuing
    Operations                $   13,762       $   46,697       $    22,494      $   15,588      $   11,297
  Income (loss) from
    Discontinued Operations,
    net of tax                $      (57)      $   (1,591)      $     3,556      $      (63)     $      380
  Net Income                  $   13,705       $   45,106       $    26,050      $   15,525      $   11,677
  Total Assets                $  284,951       $  292,659       $   189,041      $  194,309      $  171,165

Capitalization:
  Shareholders' Equity        $  145,056       $  160,004       $   118,970      $  117,405      $  105,522
  Notes Payable               $   25,980       $   32,299       $     6,016      $   12,054      $   12,643

Per Share:
  Earnings from Continuing
    Operations                $     2.20       $     7.02       $      3.39      $     2.36      $     1.71
  Income (loss) from
    Discontinued Operations   $    (0.01)      $    (0.24)      $      0.54      $    (0.01)     $     0.06
  Earnings Per Share-
    Basic and Diluted         $     2.19       $     6.78       $      3.93      $     2.35      $     1.77
  Book Value                  $    24.20       $    24.05       $     17.91      $    17.72      $    15.97
  Cash Dividends              $     1.00       $     0.85       $      4.05      $     0.40      $     0.25

Shares Outstanding                 5,995            6,654             6,644           6,626           6,606



Item 7. Management's  Discussion and Analysis of Financial Condition and Results
------- ------------------------------------------------------------------------
        of Operations
        -------------

INTRODUCTION
------------

For a description of the Company's  business,  refer to Item 1 of Part I of this
annual report on Form 10-K.

As  indicated  in Item 1, the  Company is  primarily  engaged in three  business
segments:  the  Real  Estate  business  operated  by  AMREP  Southwest  and  the
Fulfillment Services and Newsstand  Distribution Services businesses operated by
Kable. Data concerning industry segments is set forth in Note 19 of the notes to
the  consolidated   financial  statements.   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 7 to 2008,  2007 and 2006 mean the fiscal years ended April 30, 2008,  2007
and 2006.

                                       21


CRITICAL ACCOUNTING POLICIES AND ESTIMATES
------------------------------------------

The Company  prepares its financial  statements in  conformity  with  accounting
principles  generally  accepted  in the United  States of  America.  The Company
discloses  its  significant  accounting  policies  in the  notes to its  audited
consolidated financial statements.

The  preparation  of  such  financial  statements  requires  management  to make
estimates  and  assumptions  that  affect  the  reported  amounts  of assets and
liabilities and disclosures of contingent assets and liabilities at the dates of
those  financial  statements  as well as the  reported  amounts of revenues  and
expenses during the reporting periods.  Areas that require significant judgments
and estimates to be made include:  (i) the determination of revenue  recognition
for the Newsstand Distribution Services business, which is based on estimates of
allowances  for  magazine  returns  to the  Company  from  wholesalers  and  the
offsetting  return of magazines by the Company to  publishers  for credit;  (ii)
allowances for doubtful accounts;  (iii) real estate cost of sales calculations,
which are based on land development  budgets and estimates of costs to complete;
(iv) the determination of revenue recognition under the percentage-of-completion
method for  certain  development  contracts,  which is  determined  based on the
percentage  of total costs  incurred to date in  proportion  to total  estimated
costs to  complete  the  project;  (v) cash flow and  valuation  assumptions  in
performing asset impairment tests of long-lived assets,  goodwill impairment and
assets  held for sale;  (vi)  actuarially  determined  benefit  obligations  for
pension plan  accounting;  and (vii) legal  contingencies.  Actual results could
differ from those estimates.

There are numerous critical  assumptions that may influence accounting estimates
in  these  and  other  areas.  Management  bases  its  critical  assumptions  on
historical  experience,  third-party  data and various other  estimates  that it
believes to be reasonable under the circumstances. The most critical assumptions
made in arriving  at these  accounting  estimates  include  the  following:  (i)
Newsstand  Distribution  Services revenues represent commissions earned from the
distribution of publications  for client  publishers,  which are recorded by the
Company at the time the  publications go on sale in accordance with Statement of
Financial  Accounting Standards ("SFAS") No. 48, "Revenue Recognition When Right
of Return Exists".  The  publications  generally are sold on a fully  returnable
basis, which is in accordance with prevailing trade practice.  Accordingly,  the
Company provides for estimated  returns by charges to income that are determined
on an  issue-by-issue  basis utilizing  historical  experience and current sales
information.  The  financial  impact  to the  Company  of a change  in the sales
estimate for magazine returns to it from its wholesalers is substantially offset
by the  simultaneous  change in the Company's  estimate of its cost of purchases
since it passes on the returns to publishers for credit. As a result, the effect
of a difference  between the actual and estimated  return rates on the Company's
commission  revenues  is  the  amount  of  the  commission  attributable  to the
difference.  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
development contracts is based on the percentage of total costs incurred to date
in proportion to total estimated costs to complete the contract. Total estimated
costs, and thus contract income, are impacted by several factors including,  but
not limited to, changes in the costs of subcontractors, materials and equipment,
productivity and scheduling; (v) asset impairment determinations (including that
of goodwill, which is based on the fair value of reporting units) are based upon
the  intended  use of assets  and  expected  future  cash  flows;  (vi)  benefit
obligations  and other  pension plan  accounting  and  disclosure  is based upon
numerous  assumptions  and estimates,  including the expected rate of investment
return on  retirement  plan  assets,  the discount  rate used to  determine  the
present  value of  liabilities,  and certain  employee-related  factors  such as
turnover,  retirement  age and  mortality.  As of April 30, 2008,  the effect of
every 0.25% change in the  investment  rate of return on retirement  plan assets
would  increase or decrease  the pension  expense by  approximately  $65,000 per
year,  and the effect of every 0.25% change in the discount rate would  increase
or decrease the subsequent  year's pension cost of  approximately  $38,000;  and
(vii) the Company is currently involved in legal proceedings which are described
in  Item 3 of  this  annual  report  on  Form  10-K.  It is  possible  that  the
consolidated  financial  position or results of  operations  for any  particular
quarterly  or annual  period  could be  materially  affected  by an  outcome  of
litigation that is significantly different from the Company's assumptions.

                                       22


Year Ended April 30, 2008 Compared to Year Ended April 30, 2007
---------------------------------------------------------------

Results of Operations

Net income in 2008 was  $13,705,000,  or $2.19 per share,  compared  to 2007 net
income of  $45,106,000,  or $6.78 per share.  Results for 2008  consisted of net
income from continuing operations of $13,762,000,  or $2.20 per share, and a net
loss from discontinued  operations of $57,000,  or $0.01 per share,  compared to
the 2007 results  which  consisted of net income from  continuing  operations of
$46,697,000,  or $7.02 per share, and a net loss from discontinued operations of
$1,591,000, or $0.24 per share. 2008 consolidated revenues were $172,061,000,  a
decrease of $32,778,000 from 2007  consolidated  revenues of  $204,839,000.  The
decrease  in  consolidated  revenues  was  attributable  to  reduced  land sales
revenues  from the  Company's  Real  Estate  operations,  offset  in part by the
increased  Fulfillment  Services  revenues  from the  inclusion  of Palm Coast's
revenues for all of 2008 as compared  with three and a half months in 2007.  The
decrease in net income from  continuing  operations was  principally  due to the
reduced land sales.

The net loss from discontinued operations in 2008 was attributable to $57,000 of
costs incurred in connection  with the  settlement of all litigation  related to
the  Company's  El Dorado,  New Mexico  water  utility  subsidiary  that were in
addition to costs estimated and accrued for this matter in the fourth quarter of
2007 when in June 2007, the Company  settled all existing  litigation  involving
this subsidiary.  The 2007 amount accrued for the  settlements,  including legal
fees, was  $1,591,000,  net of tax, and was also accounted for as a discontinued
operation.

Revenues from real estate land sales at AMREP  Southwest  decreased  $67,923,000
from  $95,825,000  in 2007 to  $27,902,000  in 2008.  This  substantial  revenue
decrease was due to  substantially  lower land sales in the Company's  principal
market of Rio Rancho, New Mexico, reflecting the severe decline that occurred in
this market in 2008 compared to 2007 and earlier years. As previously  reported,
the number of permits  for new  home  construction  was down  significantly  for
calendar  2007  compared to 2006,  with Rio Rancho  showing a decrease of nearly
50%. The Company  believes that this decline was generally  consistent  with the
well-publicized problems of the national home building industry, including fewer
sales  of both  new and  existing  homes,  the  increasing  number  of  mortgage
delinquencies and foreclosures and a tightening of mortgage availability.  Faced
with these  adverse  conditions,  builders  slowed the pace of  building on land
previously  purchased from the Company in Rio Rancho and, in some cases, delayed
or cancelled the purchase of additional land. These factors are also believed to
have  contributed  to a sharp  decline  in  sales  of  undeveloped  land to both
builders and investors.  Revenues from sales of developed  lots to  homebuilders
decreased from  $39,407,000 in 2007 to $9,542,000 in 2008,  principally due to a
reduction in the number of lots sold. Revenues from sales of undeveloped builder
lots decreased from  $40,690,000 in 2007 to $9,709,000 in 2008,  principally due
to a  reduction  in the  number of lots sold and,  to a lesser  extent,  a lower
average price per lot due to a greater number of lots sold from locations in Rio
Rancho that are further  removed from  developed  areas.  Revenues from sales of
commercial  and  industrial  properties  decreased  in 2008 to  $8,651,000  from
$15,728,000 in 2007 as a result of fewer and smaller  transactions.  The average
gross  profit  percentage  on land sales  decreased  from 68% in 2007 to 65% for
2008, and is principally attributable to lower selling prices for commercial and
undeveloped lots in the latter period.

The  average  selling  price of land sold by the Company in Rio Rancho in recent
years has fluctuated,  from $63,200 per acre in 2006 to $91,200 per acre in 2007
and $68,700 per acre in 2008, reflecting  differences in the mix of the types of
properties  sold in each period and the effects of a strong  regional  market in
2006 and 2007 in Rio Rancho  and a much  softer  market in 2008.  As a result of
these  and  other   factors,   including  the  nature  and  timing  of  specific
transactions, revenues and related gross profits from real estate land sales can
vary significantly from period to period and prior results are not necessarily a
good indication of what may occur in future periods.

Revenues from Kable's Fulfillment Services and Newsstand  Distribution  Services
businesses   (collectively,   "Media  Services")   increased   $38,191,000  from
$100,505,000 in 2007 to $138,696,000  in 2008,  principally  attributable to the
January  16,  2007  acquisition  of Palm Coast.  Fulfillment  Services  revenues
increased by $39,659,000 from $86,121,000 in 2007 to $125,780,000 in 2008 due to
the  contribution  from Palm Coast. The increase in revenues from the Palm Coast
acquisition  was  partially  offset  by  decreases  in other  parts  of  Kable's
Fulfillment  Services business that resulted from continued  competitive  market
pressures  and customer  losses.  Pricing  pressure  from  customers  also had a
negative  effect  on  Fulfillment  Services  revenues.   Newsstand  Distribution


                                       23


Services   revenues   decreased  by  $1,468,000  from  $14,384,000  in  2007  to
$12,916,000 in 2008. The decrease in Newsstand  Distribution  Services  revenues
was due to reduced billings and lower commission rates, as well as the inclusion
of certain revenues in the prior year that did not recur in 2008. Media Services
operating expenses increased by $34,759,000 in 2008 compared to 2007,  primarily
attributable  to the  addition of operating  expenses of Palm Coast,  which were
offset in part by decreased  payroll and benefit  expenses  resulting from lower
revenue in other parts of Kable's Fulfillment Services business.

Although  there  are  multiple  revenue  streams  in  the  Fulfillment  Services
business, including revenues from the maintenance of customer computer files and
the performance of other  fulfillment-related  activities,  including  telephone
call  center  support  and  graphic  arts and  lettershop  services,  a customer
generally  contracts for and utilizes all available services as a total package,
and the Company would not provide its ancillary services to a customer unless it
was also  providing  the core service of  maintaining  a database of  subscriber
names.  Thus,  variations  in  Fulfillment  Services  revenues are the result of
fluctuations in the number and sizes of customers  rather than in the demand for
a particular service.  This is also true in the Newsstand  Distribution Services
business where there is only one primary service provided,  which results in one
revenue source,  the commissions  earned on the  distribution of magazines.  The
Company competes with other companies,  including three much larger companies in
the  Newsstand  Distribution  Services  business  and one larger  company in the
Fulfillment Services business,  and the competition for new customers is intense
in both segments,  which results in a price sensitive industry that may restrict
the Company's ability to increase its prices.

During  fiscal 2003,  Kable  acquired the  Colorado-based  fulfillment  services
business of Electronic Data Systems Corporation  ("EDS").  Since that time Kable
has outsourced to EDS a substantial  portion of the data processing  required to
service that  business but during fiscal 2008 has migrated much of that activity
to  its  own  systems.   However,  under  the  outsourcing  contract,  the  full
outsourcing  charge  remains  payable so long as any  outsourcing  services  are
provided. The Company anticipates completing this migration process by September
2008. The migration  process is technically  complex,  however,  and the Company
continues to address issues that have delayed the complete migration. Should the
Company  encounter  unanticipated  problems that will further delay the complete
migration, it may continue to be burdened with the outsourcing of this business.

The Company has  announced a project to integrate  certain  other aspects of the
Kable  and Palm  Coast  fulfillment  operations  in order to  improve  operating
efficiencies  and  customer  service  and also to reduce  costs.  To date,  this
project has resulted in (i) one significant workforce reduction that occurred in
the first quarter of 2008,  (ii) an announced plan in the second quarter of 2008
to  redistribute  the  fulfillment  services work performed at the Marion,  Ohio
facility of its Fulfillment  Services business and the scheduled closing of that
facility and (iii) the consolidation of the fulfillment operations customer call
center.  Approximately  $650,000 in  severance-related  costs is projected to be
paid in connection  with the Ohio facility  closure,  which is being recorded as
positions are  eliminated  during the  transitional  period  scheduled to end in
September  2008.  As of April  30,  2008,  severance-related  costs  charged  to
operations  totaled  $486,000.  Following the closure of the Ohio facility,  the
Company  anticipates  realizing annual cost savings of approximately  $5,300,000
from the three actions noted above.  The Company incurred costs directly related
to the integration project of $1,159,000 in 2008,  principally for severance and
other consulting costs related to the integration,  and these costs are included
in the  Restructuring  and fire  recovery  costs in the  Company's  consolidated
statement of income.

On December 5, 2007 a warehouse of  approximately  38,000  square feet leased by
the Company in Oregon, Illinois was totally destroyed by an accidental fire. The
warehouse was used  principally  to store back issues of magazines  published by
certain  customers for whom the Company fills  back-issue  orders as part of its
services. The Company has submitted preliminary claims to its insurance provider
for its property loss and for a business  interruption  claim  consisting of its
lost  revenues  offset by reduced  expenses  through  April 30, 2008.  While the
Company  has  been  advanced  $500,000  for  replacement  of lost  property,  no
insurance  proceeds have been received on the business  interruption claim as of
April 30, 2008. In addition,  the Company was required to provide  insurance for
certain of those  customers  whose property was destroyed in the warehouse fire.
The  Company  does not  believe  that the net  effect of the  outcome  of claims
related to materials of certain  publishers  for whom it was required to provide
insurance,  together  with any proceeds  received from its property and business
interruption  claims,  will have any material effect on its financial  position,
results of operations and cash flows. Due to the fire, gross assets were written
down by $470,000, along with related accumulated depreciation on those assets of


                                       24


about $440,000, resulting in a charge to operations of approximately $30,000. In
addition,  the Company has  recorded  other  charges to  operations  of $324,000
related to fire  recovery  costs for the year ended April 30, 2008,  principally
due to legal and other costs that are not covered by  insurance  and these costs
are  included in the  Restructuring  and fire  recovery  costs in the  Company's
consolidated statement of income.

Real estate  commissions and selling expenses  decreased  $673,000 (48%) in 2008
compared to 2007  principally  attributable to the reduced volume of land sales.
Other  operating  expenses  decreased  $536,000  (39%) in 2008  compared to 2007
principally due to a favorable adjustment of approximately $550,000 in the third
quarter of 2008 for real estate tax expense resulting from the finalization of a
property tax valuation  appeal by AMREP  Southwest.  Media Services  general and
administrative  expenses increased  $2,818,000 (31%) in 2008 compared to 2007 as
the addition of the Palm Coast expenses was only partially offset by lower costs
in other Fulfillment Services  operations.  Real estate operations and corporate
general and administrative expenses decreased $488,000 (10%) in 2008 compared to
2007  principally  as a result of lower  professional  and  consulting  services
costs.

Interest and other  revenues  decreased by  $3,046,000 in 2008 compared to 2007.
The decrease was partly  attributable  to lower cash balances to invest in 2008.
In addition, during 2008, the Company sold a commercial rental property at AMREP
Southwest that resulted in a pre-tax gain of $1,873,000,  and it also recognized
pre-tax  income of $927,000 from the  forfeiture of deposits for the purchase of
land by homebuilders  who did not exercise  purchase  options.  During the first
quarter  of 2007,  the  Company  sold  certain of AMREP  Southwest's  investment
assets,  including the  Company's  office  building in Rio Rancho,  which in the
aggregate contributed a pre-tax gain of $4,107,000.

The Company's  effective tax rate from  continuing  operations was 36.2% in 2008
compared to 33.9% in 2007.  The decrease from the  statutory  rate in both years
was primarily due to tax benefits  associated with charitable  contributions  of
land and tax exempt interest income.

Year Ended April 30, 2007 Compared to Year Ended April 30, 2006
----------------------------------------------------------------
Results of Operations

Net income in 2007 was  $45,106,000,  or $6.78 per share,  compared  to 2006 net
income of  $26,050,000,  or $3.93 per share.  Results for 2007  consisted of net
income from continuing operations of $46,697,000,  or $7.02 per share, and a net
loss from discontinued operations of $1,591,000, or $0.24 per share, compared to
the 2006 results  which  consisted of net income from  continuing  operations of
$22,494,000,  or $3.39 per share, and net income from discontinued operations of
$3,556,000, or $0.54 per share. 2007 consolidated revenues were $204,839,000, an
increase of $56,543,000 over 2006  consolidated  revenues of  $148,296,000.  The
increase in consolidated  revenues was attributable to continued  revenue growth
achieved by the Company's real estate  operations,  and, to a lesser extent, the
acquisition  of  Palm  Coast  by  the  Company's  Kable  Media  Services,   Inc.
subsidiary.   The  increase  in  net  income  from  continuing   operations  was
attributable  to higher gross profits  associated with the increased real estate
land sales.

Net income from  discontinued  operations  in 2006  reflected  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 during
2006. In June 2007, the Company settled all existing  litigation  involving this
subsidiary and accrued for the estimated  amount of the  settlements,  including
legal fees, of approximately $1,591,000,  net of tax, which was accounted for as
a loss from discontinued operations in 2007.

Revenues from real estate land sales at AMREP  Southwest  increased  $38,015,000
(66%) from $57,810,000 for 2006 to $95,825,000 in 2007. This substantial revenue
increase was due to higher average  selling  prices and increased  sales of both
developed and undeveloped  lots as well as commercial and industrial  properties
in the  Company's  principal  market of Rio Rancho,  New Mexico.  An increase in
revenues from  additional  sales in all categories of residential and commercial
lots in 2007  compared  to 2006  resulted  from the  strength  of the Rio Rancho
market, particularly in the first six months of the year. Revenues from sales of
developed lots to homebuilders increased from $31,920,000 in 2006 to $39,407,000
in 2007.  Revenues  from  sales  of  undeveloped  builder  lots  increased  from
$19,514,000  in  2006 to  $40,690,000,  principally  due to  higher  prices  for
scattered  builder lots,  and revenues from sales of commercial  and  industrial
properties  increased in 2007 to $15,728,000 from $6,376,000 in 2006 as a result
of an increased  number of and size of  transactions.  The average  gross profit
percentage on land sales increased from 54% in 2006 to 68% for 2007,  reflecting
higher average  selling prices in 2007 and the mix of developed and  undeveloped
residential lots sold in each of the periods.

                                       25


The average  selling  price of land sold by the Company in Rio Rancho  increased
from $63,200 per acre in 2006 to $91,200 per acre in 2007. This increase was due
to a  number  of  factors,  including  differences  in the mix of the  types  of
properties sold in each period and the effects of a strong regional market which
resulted  in  three  consecutive  years  of a  record  number  of  single-family
residential  housing  starts in Rio Rancho,  reaching a total in excess of 3,000
starts during the twelve months ending April 30, 2006. The real estate market in
Rio Rancho  softened  during 2007,  however,  and there was a 55% decline in the
number of housing starts in fiscal 2007 compared to fiscal 2006. In addition, in
May 2007 Rio Rancho's largest employer, Intel Corporation, announced a workforce
reduction  starting in August  2007 of at least 1,000 jobs in Rio Rancho,  which
could reduce the demand for the Company's land  inventory.  As a result of these
and other  factors,  including  the nature and timing of specific  transactions,
revenues  and  related  gross  profits  from  real  estate  land  sales can vary
significantly from period to period and prior results are not necessarily a good
indication of what may occur in future periods.

Revenues from Kable's Fulfillment Services and Newsstand  Distribution  Services
businesses   (collectively,   "Media  Services")   increased   $12,042,000  from
$88,463,000  in 2006 to  $100,505,000  in 2007.  This  increase in revenues  was
primarily  attributable  to the  January  16,  2007  acquisition  of Palm Coast.
Newsstand   Distribution   Services   revenues   increased  by  $1,253,000  from
$13,131,000 in 2006 to $14,384,000 in 2007,  principally due to a 6% increase in
revenues  from  new  business.   Fulfillment   Services  revenues  increased  by
$10,789,000  from $75,332,000 in 2006 to $86,121,000 in 2007 due to the addition
of Palm Coast.  The  increase in revenues  from the Palm Coast  acquisition  was
partially  offset  by  decreases  in core and  ancillary  services  of  customer
telephone,  lettershop  and list services of other parts of Kable's  Fulfillment
Services business. The revenue decreases in core and ancillary services resulted
from  continued  competitive  market  pressures  and  customer  losses.  Pricing
pressure  from  customers due to the  competitive  environment  for  Fulfillment
Services  business also had a negative effect on Fulfillment  Services  revenues
and  profitability  in the fourth  quarter  of 2007.  Media  Services  operating
expenses   increased  by  $11,306,000  in  2007  compared  to  2006,   primarily
attributable to (i) the addition of operating expenses of Palm Coast and (ii) an
increase in Newsstand  Distribution  Services  operating  expenses,  principally
payroll,  associated with the revenue growth of that business, offset in part by
decreased  payroll  and benefit  expenses in other parts of Kable's  Fulfillment
Services  businesses.   Media  Services  general  and  administrative   expenses
increased  $1,549,000 in 2007 compared to 2006 as the addition of Palm Coast was
only partially offset by lower costs in other Fulfillment Services businesses.

Real estate  commissions and selling expenses  remained  generally  unchanged in
2007  compared to 2006  despite the  increase  in land sales,  primarily  due to
decreases in variable  commissions  and selling  expenses.  Such costs generally
vary  depending upon the terms of specific land sale  transactions.  Real estate
and corporate general and  administrative  expenses  increased $728,000 (17%) in
2007 compared to the prior year due to increased legal,  real estate  consulting
and other consulting fees associated with Sarbanes-Oxley Act requirements.

Interest and other  revenues  increased by  $6,486,000  in 2007  compared to the
prior year,  primarily as a result of increased interest income on invested cash
balances  as well  as from  the  first  quarter  sale  of  certain  real  estate
investment  assets,  including the Company's office building in Rio Rancho,  New
Mexico, which in the aggregate contributed a pre-tax gain of $4,107,000.

The Company's  effective tax rate from  continuing  operations was 33.9% in 2007
compared to 31.3% in 2006.  The decrease from the  statutory  rate in both years
was primarily due to tax benefits  associated with charitable  contributions  of
land.

LIQUIDITY AND CAPITAL RESOURCES
-------------------------------

The Company  finances its operations from  internally  generated funds from real
estate sales and magazine  operations and from borrowings under its various loan
agreements.

Cash Flows From Financing Activities
------------------------------------

In January 2007,  AMREP Southwest  entered into a loan agreement that replaced a
prior loan  agreement  entered into in September  2006.  The new loan  agreement
added a $14,180,000  term loan facility to the unsecured  $25,000,000  revolving
credit  facility  provided in the September  2006  agreement and was  originally
scheduled to mature in September 2008.  During September 2007, the maturity date
of the revolving  credit facility was extended to September 2009, with all other
terms remaining unchanged.

                                       26


The revolving credit facility is used to support real estate  development in New
Mexico.  Borrowings  bear annual  interest at the  borrower's  option at (i) the
prime rate (5.0% at April 30,  2008) less 1.00%,  or (ii) the 30-day  LIBOR rate
(2.80% at April 30, 2008) plus 1.65% for borrowings of less than $10,000,000, or
plus  1.50% for  borrowings  of  $10,000,000  or more.  At April 30,  2008,  the
outstanding  balance of the revolving  credit  facility was  $18,000,000  with a
weighted  average  interest rate of 4.38%.  The term loan facility  bears annual
interest on borrowings at the 30-day LIBOR rate plus 1.75%, matures December 15,
2008 and is  secured by certain of the  borrower's  notes  receivable  from real
estate  sales.  The  term  loan  requires  prepayment  in  an  amount  equal  to
collections  on the notes  receivable  held as collateral  and the amount of any
that have  experienced  payment  defaults.  At April 30, 2008,  the  outstanding
balance of the term loan was $2,774,000. The loan agreement contains a number of
restrictive  covenants,  including  one that requires the borrower to maintain a
minimum  tangible net worth,  and AMREP  Southwest was in compliance  with these
covenants at April 30, 2008.

In connection  with the  completion of the  acquisition of Palm Coast in January
2007, Kable and certain of its direct and indirect  subsidiaries  entered into a
Second Amended and Restated Loan and Security Agreement with a bank (the "Credit
Agreement"). During January 2008, Kable entered into a First Modification to the
Credit Agreement ("First  Modification").  The First  Modification  modified the
Credit  Agreement by, among other things,  (a) increasing the amount that may be
borrowed  for capital  expenditures,  (b) allowing  the  borrowers  the right to
re-borrow the amounts of capital  expenditure  loans that have been repaid,  (c)
modifying  the  interest  rate options the  borrowers  may select and (d) adding
Kable Products  Services,  Inc., a recently  organized member of the Kable Media
Services group, as a borrower.

The  credit  facilities  available  to Kable  with the  execution  of the  First
Modification  consist  of:  (i) a  revolving  credit  loan and  letter of credit
facility in an aggregate  principal amount of up to $35,000,000  ("Facility A");
(ii) a secured term loan of  approximately  $3,000,000 that combined a number of
separate  borrowings  for  capital   expenditures  under  the  Credit  Agreement
("Facility B"); (iii) a capital expenditure line of credit in an amount of up to
$4,500,000 to finance new equipment  ("Facility C"); and (iv) a second revolving
credit loan facility of $10,000,000  ("Facility D") that may be used exclusively
for the  payment of  accounts  payable  under a  distribution  agreement  with a
customer of Kable's Distribution Services business.  The borrowers'  obligations
under the First  Modification  continue  to be secured by  substantially  all of
their assets other than (i) real  property and (ii) any  borrower's  interest in
the capital securities of any other borrower or any subsidiary of any borrower.

The  Facility A, C and D loans  mature in May 2010 and bear  annual  interest at
fluctuating  rates that,  at the  borrowers'  option,  may be either (i) reserve
adjusted  LIBOR  rates  (2.66%  at April  30,  2008)  plus a margin  established
quarterly from 1.5% to 2.5%  dependent on the  borrowers'  funded debt to EBITDA
ratio,  as defined  in the Credit  Agreement,  or (ii) the  Lender's  prime rate
(5.00%  at April  30,  2008).  As of April 30,  2008,  there was no  outstanding
balance under  Facilities A or D and the outstanding  balance for Facility C was
$2,895,000.  The Facility B loan matures December 2009 and bears annual interest
at a rate of 6.4% and had an  outstanding  balance  of  $1,687,000  at April 30,
2008.

The Credit Agreement requires the borrowers to maintain certain financial ratios
and contains customary covenants and restrictions, the most significant of which
limit the ability of the  borrowers  to declare or pay  dividends  or make other
distributions to the Company unless certain  conditions are satisfied,  and that
limit the annual  amount of  indebtedness  the  borrowers  may incur for capital
expenditures  and other  purposes.  The borrowers were in compliance  with these
covenants at April 30, 2008.

Other notes payable consist of equipment financing loans with a weighted average
interest rate of 5.71% at April 30, 2008.

Consolidated  notes  payable  outstanding  at April  30,  2008  was  $25,980,000
compared to $32,299,000 at April 30, 2007.

Cash Flows From Operating Activities
------------------------------------

Real estate  inventory  amounted to  $70,252,000  at April 30, 2008  compared to
$46,584,000  at April 30,  2007.  Inventory  in the  Company's  core real estate
market of Rio Rancho increased from $39,770,000 at April 30, 2007 to $63,215,000
at April 30, 2008 primarily  reflecting  the net effect of development  spending


                                       27


and land  sales.  The  increase  in  inventory  is  primarily  the result of the
start-up  costs of  development in several new project sites in Rio Rancho where
the Company is required to perform initial development work prior to the ability
to sell land. In addition, the Company reclassified  approximately $3,900,000 to
real estate inventory from receivables during the quarter ended January 31, 2008
resulting  from  the  receipt  of a deed  in lieu of  foreclosure  related  to a
delinquent mortgage receivable.  The balance of inventory  principally consisted
of properties in Colorado in both years.

Receivables from real estate operations  decreased from $25,117,000 at April 30,
2007 to $13,124,000 at April 30, 2008, principally resulting from the net effect
of payments received on mortgage notes and the reclassification of approximately
$3,900,000 to real estate inventory from  receivables  discussed above offset in
part by mortgage  notes  received by AMREP  Southwest  in  connection  with real
estate sales that closed during 2008 .

Intangible  and other assets  decreased  from  $34,014,000  at April 30, 2007 to
$29,913,000 at April 30, 2008, primarily reflecting normal amortization of these
assets.  Property,  plant and equipment  decreased from $30,518,000 at April 30,
2007 to $28,914,000 at April 30, 2008.

Accounts  payable and accrued  expenses  increased from $83,557,000 at April 30,
2007 to $98,533,000  at April 30, 2008,  primarily as a result of an increase in
the amounts due publishers.

The unfunded pension liability of the Company's defined benefit  retirement plan
increased  from  $1,243,000  at April 30, 2007 to  $2,045,000 at April 30, 2008,
principally due to a decrease in the fair market value of the plan assets during
the year resulting from a combination of net realized and unrealized losses from
investment  assets.  The  Company  recorded   comprehensive   income  (loss)  of
($660,000) in 2008 and $1,210,000 in 2007, reflecting the change in the unfunded
pension  liability in each year net of the related deferred tax and unrecognized
prepaid pension amounts.

Cash Flows From Investing Activities
------------------------------------

Capital expenditures for property, plant and equipment amounted to approximately
$5,169,000  and  $1,797,000  in 2008  and  2007  and  consisted  principally  of
expenditures for computer hardware and software for Kable's Fulfillment Services
segment. In addition, capital expenditures for investment assets were $1,208,000
in 2008 and $2,870,000 in 2007 for the purchase of additional  scattered lots in
Rio Rancho in order to increase the Company's  ownership in certain  areas.  The
Company  believes  that it has  adequate  financing  capability  to provide  for
anticipated capital expenditures.

During January 2007, the Company,  through a newly-created  subsidiary of Kable,
acquired Palm Coast for approximately $95,400,000.  The acquisition was financed
with existing cash and borrowings.

Future Payments Under Contractual Obligations
---------------------------------------------

The table below summarizes significant  contractual cash obligations as of April
30, 2008 for the items indicated (in thousands):

          Contractual                         Less than       1-3             3-5           More than
          Obligations           Total          1 year        years           years           5 years
          -----------        -----------    ------------   -----------    ------------    -------------

 Notes payable               $   25,980      $    4,815     $  20,548      $      617      $        -
 Operating leases and other      30,536           7,925        11,719           6,434           4,458
                             -----------    ------------   -----------    ------------    -------------
 Total                       $   56,516      $   12,740     $  32,267      $    7,051      $    4,458
                             ===========    ============   ===========    ============    =============


Operating leases and other includes  $2,793,000 of unrecognized tax benefits and
related  interest accrued in accordance with FIN 48. Refer to Notes 9, 16 and 17
to the  consolidated  financial  statements  included in this 2008 Form 10-K for
additional information on long-term debt and commitments and contingencies.

Discretionary Stock Repurchase Program
--------------------------------------

The  Company  announced  on  October  8, 2007 that its  Board of  Directors  had
authorized the repurchase of up to 500,000 shares of the Company's common stock,
which was in addition  to the  previously  announced  500,000  share  repurchase
program that was completed in early October 2007. The purchases may be made from
time-to-time   either  in  the  open  market  or  through   negotiated   private


                                       28


transactions with  non-affiliates  of the Company.  For the year ended April 30,
2008,  the Company  purchased  a total of 658,400  shares  under both  announced
programs, all in open market transactions, for a total purchase price, including
commissions,  of $21,363,000, or an average of $32.45 per share. The Company now
has  5,995,212  shares of  common  stock  outstanding,  and the  658,400  shares
repurchased  equaled  approximately  9.9% of the shares that were outstanding at
April 30, 2007.

All repurchases  were funded from cash on hand and  borrowings,  and the Company
expects  to  fund  any  future  purchases  from  internally  generated  cash  or
borrowings.

NEW AND EMERGING ACCOUNTING STANDARDS
-------------------------------------

In September 2006, the Financial Accounting Standards Board ("FASB") issued SFAS
No. 157,  "Fair Value  Measurements",  which  defines fair value,  establishes a
framework  for  measuring  fair  value  and  expands  disclosure  of fair  value
measurements.  SFAS No. 157 applies under accounting pronouncements that require
or permit fair value  measurements  and,  accordingly,  does not require any new
fair value  measurements.  SFAS No. 157, as it relates to  financial  assets and
financial  liabilities,  is effective for fiscal years  beginning after November
15,  2007.  On February 12,  2008,  the FASB issued FASB Staff  Position No. FAS
157-2  "Effective  Date of FASB  Statement  No. 157," which delays the effective
date of SFAS No. 157 for one year for all non-financial assets and non-financial
liabilities,  except those that are recognized or disclosed at fair value in the
financial  statements on at least an annual  basis.  The Company does not expect
the  adoption  of  SFAS  No.  157 to have a  material  impact  on its  financial
position, results of operations or cash flows.

In February  2007,  the FASB issued  SFAS No.  159,  "The Fair Value  Option for
Financial  Assets and  Financial  Liabilities  - Including  an amendment of FASB
Statement  No.  115",  which  provides  all  entities  with an  option to report
selected  financial  assets and liabilities at fair value. The objective of SFAS
No.  159 is to  improve  financial  reporting  by  providing  entities  with the
opportunity  to mitigate  volatility  in earnings  caused by  measuring  related
assets  and  liabilities   differently  without  having  to  apply  the  complex
provisions of hedge  accounting.  Certain  specified  items are eligible for the
irrevocable fair value  measurement  option as established by SFAS No. 159. SFAS
No. 159 is  effective  as of the  beginning  of an  entity's  first  fiscal year
beginning  after  November 15, 2007. The Company does not expect the adoption of
SFAS No. 159 to have a material  impact on its  financial  position,  results of
operations or cash flows.

In December  2007,  the FASB issued SFAS No. 160,  "Noncontrolling  Interests in
Consolidated  Financial  Statements-an  amendment of ARB No. 51", which provides
accounting  and  reporting  standards  for  the  noncontrolling  interest  in  a
subsidiary  and for the retained  interest and gain or loss when a subsidiary is
deconsolidated.  This statement is effective for financial statements issued for
fiscal years  beginning on or after  December 15, 2008. The adoption of SFAS No.
160 is not  expected  to  have a  material  impact  on the  Company's  financial
position, results of operations or cash flows.

In December 2007, the FASB also issued SFAS No. 141(R),  "Business  Combinations
(Revised)",  which  requires the use of the  acquisition  method of  accounting,
defines the acquirer, establishes the acquisition date and broadens the scope to
all  transactions  and other events in which one entity obtains control over one
or more  businesses.  The  statement is effective for business  combinations  or
transactions  entered into for fiscal years  beginning on or after  December 15,
2008.  The adoption of SFAS No. 141(R) will affect the Company's  accounting for
future  business  combinations  after the  effective  date and  therefore has no
impact on its current financial position, results of operations or cash flows.

The Company will monitor these  emerging  issues to assess any potential  future
impact on its consolidated financial statements.

SEGMENT INFORMATION
-------------------

Information  by industry  segment is  presented  in Note 19 to the  consolidated
financial statements. This information has been prepared in accordance with SFAS
No. 131,  "Disclosures about Segments of an Enterprise and Related Disclosures",
which  requires  that  industry  segment  information  be  prepared  in a manner
consistent  with the  manner in which  financial  information  is  prepared  and
evaluated by management for making operating decisions.  A number of assumptions
and  estimations are required to be made in the  determination  of segment data,


                                       29


including  the need to make  certain  allocations  of common  costs and expenses
among  segments.  On an annual  basis,  management  has evaluated the basis upon
which costs are allocated,  and has periodically made revisions to these methods
of  allocation.  Accordingly,  the  determination  of  "income  from  continuing
operations  before income taxes" of each segment as summarized in Note 19 to the
consolidated  financial statements is presented for informational  purposes, and
is not  necessarily  the amount that would be  reported  if the segment  were an
independent company.

IMPACT OF INFLATION
-------------------

Operations of the Company can be impacted by inflation. Within the industries in
which  the  Company  operates,  inflation  can  cause  increases  in the cost of
materials,  services,  interest  and  labor.  Unless  such  increased  costs are
recovered  through  increased sales prices or improved  operating  efficiencies,
operating  margins will  decrease.  Within the land  development  industry,  the
Company  encounters  particular risks. A large part of the Company's real estate
sales are to homebuilders who face their own  inflationary  concerns that rising
housing costs,  including interest costs, may substantially outpace increases in
the income of potential purchasers and make it difficult for them to finance the
purchase of a new home or sell their  existing  home. If this  situation were to
exist,  the demand for the Company's land by these  homebuilder  customers could
decrease.  In general,  in recent years interest rates have been at historically
low levels and other price  increases  have been  commensurate  with the general
rate of inflation in the Company's markets,  and as a result the Company has not
found the inflation risk to be a significant problem in its real estate or media
services operations businesses.

FORWARD-LOOKING STATEMENTS AND RISK FACTORS
-------------------------------------------

The Private Securities Litigation Reform Act of 1995 (the "Act") provides a safe
harbor for forward-looking  statements made by or on behalf of the Company.  The
Company  and its  representatives  may from  time to time make  written  or oral
statements that are  "forward-looking",  including  statements contained in this
report and other  filings with the  Securities  and Exchange  Commission  and in
reports to the Company's  shareholders  and news releases.  All statements  that
express  expectations,  estimates,  forecasts or projections are forward-looking
statements  within the meaning of the Act. In  addition,  other  written or oral
statements,  which constitute  forward-looking  statements, may be made by or on
behalf  of the  Company.  Words  such as  "expects",  "anticipates",  "intends",
"plans",  "believes",  "seeks",  "estimates",  "projects",  "forecasts",  "may",
"should",  variations  of such words and  similar  expressions  are  intended to
identify such forward-looking statements. These statements are not guarantees of
future  performance and involve certain risks,  uncertainties  and contingencies
that are difficult to predict.  These risks and uncertainties  include,  but are
not  limited  to,  those set  forth in Item 1A above  under  the  heading  "Risk
Factors".  Many of the factors that will determine the Company's  future results
are beyond the ability of  management to control or predict.  Therefore,  actual
outcomes and results may differ  materially from what is expressed or forecasted
in or suggested by such  forward-looking  statements.  The Company undertakes no
obligation to revise or update any  forward-looking  statements,  or to make any
other forward-looking statements, whether as a result of new information, future
events or otherwise.



                                       30




Item 7A. Quantitative and Qualitative Disclosures About Market Risk
-------- ----------------------------------------------------------
The  primary  market  risk  facing  the  Company  is  interest  rate risk on its
long-term debt and fixed rate  receivables.  The Company does not hedge interest
rate risk using  financial  instruments.  The Company is also subject to foreign
currency risk, but this risk is not material.  The following table sets forth as
of April 30, 2008 the  Company's  long-term  debt  obligations  and  receivables
(excluding trade accounts) by scheduled maturity, weighted average interest rate
and estimated Fair Market Value ("FMV") (dollar amounts in thousands):


                                                                      There-              FMV @
                    2009       2010      2011      2012      2013      after    Total     4/30/08
                    ----       ----      ----      ----      ----      -----    -----     -------

Fixed rate
 receivables      $ 11,530  $  1,130    $     -  $     -    $    -    $    -   $ 12,660  $ 11,878

Weighted average
 interest rate       9.22%     9.50%          -        -         -         -      9.24%

Fixed rate debt   $  1,271  $    912    $    95  $    33    $    -    $    -   $  2,311  $  2,358

Weighted average
 interest rate       6.35%     6.33%      6.54%    7.30%         -         -      6.37%

Variable rate
 debt             $  3,544  $ 18,771    $   771  $   583    $    -    $    -   $ 23,669  $ 23,669

Weighted average
 interest rate       4.67%     4.41%      5.08%    5.17%         -         -      4.49%





                                       31



Item 8.  Financial Statements and Supplementary Data
-------  -------------------------------------------

Management's Annual Report on Internal Control Over Financial Reporting

Management is responsible for  establishing  and maintaining  adequate  internal
control over  financial  reporting as defined in  Rules 13a-15(f)  and 15d-15(f)
under the  Securities  Exchange Act of 1934, as amended.  Internal  control over
financial  reporting is designed to provide reasonable  assurance  regarding the
reliability of financial  reporting and the preparation of financial  statements
for  external  purposes  in  accordance  with  generally   accepted   accounting
principles in the United States of America.

Because  of  the  inherent   limitations  of  internal  control  over  financial
reporting,  including the  possibility of human error and the  circumvention  or
overriding of controls,  material misstatements may not be prevented or detected
on a  timely  basis.  Accordingly,  even  internal  controls  determined  to  be
effective  can provide  only  reasonable  assurance  with  respect to  financial
statement  preparation  and  presentation.   Furthermore,   projections  of  any
evaluation of the  effectiveness  to future periods are subject to the risk that
such controls may become  inadequate due to changes in  conditions,  or that the
degree of compliance with the policies or procedures may deteriorate.

Management  has assessed the  effectiveness  of internal  control over financial
reporting  as of April 30,  2008 based upon the  criteria  set forth in a report
entitled  "Internal  Control - Integrated  Framework" issued by the Committee of
Sponsoring  Organizations of the Treadway  Commission.  Based on its assessment,
management  has  concluded  that,  as of April 30, 2008,  internal  control over
financial reporting was effective.  The independent registered public accounting
firm that audited the  financial  statements  included in the annual  report has
issued an audit report on the  effectiveness  of the Company's  internal control
over financial reporting.




                                       32




Report of Independent Registered Public Accounting Firm



To the Board of Directors
AMREP Corporation
Princeton, New Jersey

We have  audited  AMREP  Corporation  and  Subsidiaries  internal  control  over
financial  reporting as of April 30, 2008,  based on  "Criteria  established  in
Internal  Control-Integrated  Framework  issued by the  Committee of  Sponsoring
Organizations of the Treadway Commission (COSO)." AMREP Corporation's management
is  responsible  for  maintaining  effective  internal  control  over  financial
reporting and for its assessment of the  effectiveness  of internal control over
financial  reporting  including the accompanying  Management's  Annual Report on
Internal Control Over Financial  Reporting.  Our responsibility is to express an
opinion on the company's internal control over financial  reporting based on our
audit.

We conducted  our audit in accordance  with the standards of the Public  Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain  reasonable  assurance  about whether  effective
internal  control  over  financial  reporting  was  maintained  in all  material
respects. Our audit included obtaining an understanding of internal control over
financial  reporting,  assessing the risk that a material  weakness exists,  and
testing  and  evaluating  the design and  operating  effectiveness  of  internal
control based on the assessed  risk.  Our audit also included  performing  other
such procedures as we considered necessary in the circumstances. We believe that
our audit provides a reasonable basis for our opinion.

A company's  internal control over financial  reporting is a process designed to
provide reasonable  assurance  regarding the reliability of financial  reporting
and the preparation of financial  statements for external purposes in accordance
with generally accepted accounting principles. A company's internal control over
financial  reporting  includes those policies and procedures that (1) pertain to
the  maintenance  of records that, in reasonable  detail,  accurately and fairly
reflect the  transactions  and  dispositions  of the assets of the company;  (2)
provide  reasonable  assurance  that  transactions  are recorded as necessary to
permit preparation of financial statements in accordance with generally accepted
accounting  principles,  and that receipts and  expenditures  of the company are
being made only in accordance with authorizations of management and directors of
the company; and (3) provide reasonable assurance regarding prevention or timely
detection of  unauthorized  acquisition,  use, or  disposition  of the company's
assets that could have a material effect on the financial statements.

Because of its inherent  limitations,  internal control over financial reporting
may not prevent or detect misstatements.  Also, projections of any evaluation of
effectiveness to future periods are subject to the risk that controls may become
inadequate  because of changes in  conditions,  or that the degree of compliance
with the policies or procedures may deteriorate.

In our opinion, AMREP Corporation and Subsidiaries  maintained,  in all material
respects,  effective  internal control over financial  reporting as of April 30,
2008, based on "Criteria  established in Internal  Control-Integrated  Framework
issued by the Committee of Sponsoring  Organizations of the Treadway  Commission
(COSO)."

We have also  audited,  in accordance  with the standards of the Public  Company
Accounting  Oversight Board (United States),  the consolidated balance sheets of
AMREP  Corporation  and  Subsidiaries  as of April 30,  2008 and  2007,  and the
related consolidated  statements of income,  shareholders' equity and cash flows
for each of the three  years in the period  ended  April 30, 2008 and our report
dated July 11, 2008 expressed an unqualified opinion.


/s/ McGladrey & Pullen, LLP
July 14, 2008




                                       33



Report of Independent Registered Public Accounting Firm



To the Board of Directors
AMREP Corporation
Princeton, New Jersey

We have  audited  the  consolidated  balance  sheets  of AMREP  Corporation  and
Subsidiaries  as of  April  30,  2008 and  2007,  and the  related  consolidated
statements of income,  shareholders' equity and cash flows for each of the three
years in the period ended April 30, 2008. Our audits also included the financial
statement  schedule of AMREP Corporation  listed in item 15(a).  These financial
statements  and  financial  statement  schedule  are the  responsibility  of the
Company's  management.  Our  responsibility  is to  express  an opinion on these
financial statements based on our audits.

We conducted our audits in accordance  with the standards of the Public  Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement.  An audit includes examining, on a
test basis,  evidence  supporting  the amounts and  disclosures in the financial
statements.  An audit also includes assessing the accounting principles used and
significant  estimates  made by  management,  as well as evaluating  the overall
financial  statement  presentation.   We  believe  that  our  audits  provide  a
reasonable basis for our opinion.

In our opinion, the consolidated  financial statements referred to above present
fairly, in all material  respects,  the financial  position of AMREP Corporation
and  Subsidiaries  as of April  30,  2008 and  2007,  and the  results  of their
operations  and their cash flows for each of the three years in the period ended
April  30,  2008,  in  conformity  with  U.S.  generally   accepted   accounting
principles. Also, in our opinion, the related financial statement schedule, when
considered in relation to the basic consolidated financial statements taken as a
whole,  presents  fairly in all  material  respects  the  information  set forth
therein.

We also have  audited,  in accordance  with the standards of the Public  Company
Accounting   Oversight   Board  (United   States),   AMREP   Corporation's   and
Subsidiaries'  internal  control over financial  reporting as of April 30, 2008,
based on "Criteria established in Internal  Control-Integrated  Framework issued
by the Committee of Sponsoring  Organizations of the Treadway Commission (COSO)"
and our report  dated July 11,  2008  expressed  an  unqualified  opinion on the
effectiveness of AMREP Corporation's internal control over financial reporting.


/s/ McGladrey & Pullen, LLP
July 14, 2008





                                       34



                       AMREP CORPORATION AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                             APRIL 30, 2008 AND 2007
                          (Dollar amounts in thousands)


                                     ASSETS                                     2008                 2007
                                     ------                               ----------------    -----------------

CASH AND CASH EQUIVALENTS                                                  $      32,608       $     42,102

RECEIVABLES, net:
 Real estate operations                                                           13,124             25,117
 Media services operations                                                        45,701             47,825
                                                                          ----------------    -----------------
                                                                                  58,825             72,942

REAL ESTATE INVENTORY                                                             70,252             46,584

INVESTMENT ASSETS, net                                                            10,300             12,165

PROPERTY, PLANT AND EQUIPMENT, net                                                28,914             30,518

INTANGIBLE AND OTHER ASSETS, net                                                  29,913             34,014

GOODWILL                                                                          54,139             54,334
                                                                          ----------------    -----------------

  TOTAL ASSETS                                                             $     284,951       $    292,659
                                                                          ================    =================

                      LIABILITIES AND SHAREHOLDERS' EQUITY
                      ------------------------------------
LIABILITIES:
ACCOUNTS PAYABLE AND ACCRUED EXPENSES                                      $      98,532       $     83,557
DEFERRED REVENUE                                                                       -              4,352

NOTES PAYABLE:
 Amounts due within one year                                                       4,816              5,297
 Amounts subsequently due                                                         21,164             27,002
                                                                          ----------------    -----------------
                                                                                  25,980             32,299

TAXES PAYABLE                                                                        980                 55
DEFERRED INCOME TAXES                                                             12,358             11,149
ACCRUED PENSION COST                                                               2,045              1,243
                                                                          ----------------    -----------------

  TOTAL LIABILITIES                                                              139,895            132,655
                                                                          ----------------    -----------------

SHAREHOLDERS' EQUITY:
 Common stock, $.10 par value;
  shares authorized - 20,000,000; shares issued -  7,419,704 at
  April 30, 2008 and 2007                                                            742                742
 Capital contributed in excess of par value                                       46,085             46,085
 Retained earnings                                                               128,408            121,333
 Accumulated other comprehensive loss, net                                        (3,522)            (2,862)
 Treasury stock, 1,424,492 shares at April 30, 2008 and
  766,092 shares at April 30, 2007, at cost                                      (26,657)            (5,294)
                                                                          ----------------    -----------------
  TOTAL SHAREHOLDERS' EQUITY                                                     145,056            160,004
                                                                          ----------------    -----------------

  TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY                               $     284,951       $    292,659
                                                                          ================    =================

       The accompanying notes to consolidated financial statements are an
            integral part of these consolidated financial statements.


                                       35


                       AMREP CORPORATION AND SUBSIDIARIES
                        CONSOLIDATED STATEMENTS OF INCOME
                (Amounts in thousands, except per share amounts)



                                                                            Year Ended April 30,
                                                          -------------------------------------------------------
                                                               2008                2007               2006
                                                          ---------------     ---------------    ----------------
   REVENUES:
      Real estate land sales                              $     27,902        $    95,825        $    57,810

      Media services operations                                138,696            100,505             88,463

      Interest and other                                         5,463              8,509              2,023
                                                          ---------------     ---------------    ----------------

                                                               172,061            204,839            148,296
                                                          ---------------     ---------------    ----------------

   COSTS AND EXPENSES:
      Real estate land sales                                     9,760             31,154             26,732
      Operating expenses:
        Media services operations                              120,021             85,262             73,956
        Real estate commissions and selling                        731              1,404              1,427
        Restructuring and fire recovery costs                    1,513                  -                  -
        Other                                                      840              1,376              1,114

      General and administrative:
        Media services operations                               12,053              9,235              7,686
        Real estate operations and corporate                     4,550              5,038              4,310
      Interest expense, net of capitalized amounts               1,012                702                344
                                                          ---------------     ---------------    ----------------

                                                               150,480            134,171            115,569
                                                          ---------------     ---------------    ----------------

   INCOME FROM CONTINUING OPERATIONS
      BEFORE INCOME TAXES                                       21,581             70,668             32,727

   PROVISION FOR INCOME TAXES FROM
      CONTINUING OPERATIONS                                      7,819             23,971             10,233
                                                          ---------------     ---------------    ----------------

   INCOME FROM CONTINUING OPERATIONS                            13,762             46,697             22,494

   INCOME (LOSS) FROM OPERATIONS OF
      DISCONTINUED BUSINESS (NET OF
      INCOME TAXES)                                                (57)            (1,591)             3,556
                                                          ---------------     ---------------    ----------------

   NET INCOME                                             $     13,705        $    45,106        $    26,050
                                                          ===============     ===============    ================

   EARNINGS PER SHARE FROM CONTINUING
      OPERATIONS
                                                          $       2.20        $      7.02        $      3.39
   EARNINGS (LOSS) PER SHARE FROM
      DISCONTINUED OPERATIONS                                    (0.01)             (0.24)               .54
                                                          ---------------     ---------------    ----------------

   EARNINGS PER SHARE - BASIC AND DILUTED                 $       2.19       $       6.78        $      3.93
                                                          ===============     ===============    ================

   WEIGHTED AVERAGE NUMBER OF COMMON
      SHARES OUTSTANDING                                         6,248              6,650              6,633
                                                          ===============     ===============    ================


       The accompanying notes to consolidated financial statements are an
            integral part of these consolidated financial statements.



                                       36



                       AMREP CORPORATION AND SUBSIDIARIES
                 CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
                             (Amounts in thousands)


                                                           Capital                   Accumulated       Treasury
                                      Common Stock     Contributed in                   Other           Stock,
                                  -------------------     Excess of      Retained    Comprehensive         at
                                   Shares     Amount      Par Value      Earnings         Loss            Cost         Total
                                  -------    --------  ---------------  ----------   -------------     ----------    -----------

BALANCE, April 30, 2005            7,415     $    741  $     45,395     $  82,695    $    (5,976)      $  (5,450)    $ 117,405

  Net income                           -            -             -        26,050              -               -        26,050

  Other comprehensive
   income                              -            -             -             -          1,904               -         1,904
                                                                                                                     -----------

  Total comprehensive
   income                                                                                                               27,954
                                                                                                                     -----------

  Cash dividend, $4.05 per
   share                               -            -             -       (26,870)             -               -       (26,870)

  Issuance of stock under
   Directors' Plan                     -            1           336             -              -             104           441

  Exercise of stock options            2            -            40             -              -               -            40
                                  -------    --------  ---------------  ----------   -------------     ----------    -----------
BALANCE, April 30, 2006            7,417          742        45,771        81,875         (4,072)         (5,346)      118,970

  Net income                           -            -             -        45,106              -               -        45,106

  Other comprehensive
   income                              -            -             -             -          1,210               -         1,210
                                                                                                                     -----------
  Total comprehensive
   income                                                                                                               46,316
                                                                                                                     -----------
  Cash dividend, $0.85 per
   share                               -            -             -        (5,648)             -               -        (5,648)

  Issuance of stock under
   Directors' Plan                     -            -           287             -              -              52           339

   Exercise of stock options           3            -            27             -              -               -            27
                                  -------    --------  ---------------  ----------   -------------     ----------    -----------
BALANCE, April 30, 2007            7,420          742        46,085       121,333         (2,862)         (5,294)      160,004

  Net income                           -            -             -        13,705              -               -        13,705

  Other comprehensive
   income (loss)                       -            -             -             -           (660)              -          (660)
                                                                                                                     -----------
  Total comprehensive
   income                                                                                                               13,045
                                                                                                                     -----------
  Cash dividend, $1.00 per
   share                               -            -             -        (6,630)             -               -        (6,630)

  Acquisition of treasury
   stock, 658,400 shares               -            -             -             -              -         (21,363)      (21,363)
                                  -------    --------  ---------------  ----------   -------------     ----------    -----------
BALANCE, April 30, 2008            7,420     $   742   $     46,085     $ 128,408     $   (3,522)      $ (26,657)    $ 145,056
                                  =======    ========  ===============  ==========   =============     ==========    ===========

       The accompanying notes to consolidated financial statements are an
            integral part of these consolidated financial statements.



                                       37



                       AMREP CORPORATION AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                             (Amounts in thousands)
                                                                                                    Year Ended April 30,
                                                                                    ---------------------------------------------------
                                                                                         2008              2007               2006
                                                                                    --------------    --------------    ---------------
CASH FLOWS FROM OPERATING ACTIVITIES:
 Net income                                                                          $    13,705       $    45,106       $   26,050
 Adjustments to reconcile net income
   to net cash provided by operating activities-
   Depreciation and amortization                                                          10,524             7,319            5,568
   Non-cash credits and charges:
     Gain on disposition of assets                                                        (1,679)           (4,115)          (5,345)
     Provision for doubtful accounts                                                        (676)             (227)            (104)
     Pension accrual                                                                        (967)               26              627
     Stock based compensation - Directors' Plan                                                -               339              441
   Changes in assets and liabilities, excluding the effect of acquisitions:
     Receivables                                                                          10,901           (10,901)           4,202
     Real estate inventory                                                               (19,696)            1,064            6,942
     Other assets                                                                            272            (1,852)          (4,027)
     Accounts payable and accrued expenses, and deferred revenue                          11,328            33,156            3,400
     Taxes payable                                                                           925            (4,493)           2,328
     Deferred income taxes                                                                 1,614             3,267            1,764
                                                                                    --------------    --------------    ---------------
       Net cash provided by operating activities                                          26,251            68,689           41,846
                                                                                    --------------    --------------    ---------------

CASH FLOWS FROM INVESTING ACTIVITIES:
  Capital expenditures - property, plant, and equipment                                   (5,169)           (1,797)          (3,683)
  Capital expenditures - investment assets                                                (1,208)           (2,870)            (213)
  Proceeds from disposition of assets                                                      4,749             6,173            4,057
  Acquisition, net of cash acquired                                                          195           (95,636)               -
                                                                                    --------------    --------------    ---------------
       Net cash provided by (used in) investing activities                                (1,433)          (94,130)             161
                                                                                    --------------    --------------    ---------------

CASH FLOWS FROM FINANCING ACTIVITIES:
  Proceeds from debt financing                                                            86,860            81,255           29,162
  Principal debt payments                                                                (93,179)          (54,973)         (35,200)
  Exercise of stock options                                                                    -                27               40
  Acquisition of treasury stock                                                          (21,363)                -                -
  Cash dividends                                                                          (6,630)           (5,648)         (26,870)
                                                                                    --------------    --------------    ---------------
       Net cash provided by (used in) financing activities                               (34,312)           20,661          (32,868)
                                                                                    --------------    --------------    ---------------

INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                                          (9,494)           (4,780)           9,139
CASH AND CASH EQUIVALENTS, beginning of year                                              42,102            46,882           37,743
                                                                                    --------------    --------------    ---------------
CASH AND CASH EQUIVALENTS, end of year                                               $    32,608       $    42,102       $   46,882
                                                                                    ==============    ==============    ===============

SUPPLEMENTAL CASH FLOW INFORMATION:
  Interest paid - net of amounts capitalized                                         $     1,085       $       735       $      377
                                                                                    ==============    ==============    ===============

  Income taxes paid - net of refunds                                                 $     2,453       $    24,261       $    8,230
                                                                                    ==============    ==============    ===============
  Non-cash transactions:
   Foreclosure on land sale contract                                                 $     3,892       $         -       $    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.



                                       38



                       AMREP CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(1) SUMMARY OF SIGNIFICANT ACCOUNTING AND FINANCIAL REPORTING POLICIES:
    -------------------------------------------------------------------

    Organization and principles of consolidation
    --------------------------------------------

The consolidated financial statements include the accounts of AMREP Corporation,
an Oklahoma corporation, and its subsidiaries (individually and collectively, as
the context  requires,  the  "Company").  The  Company,  through  its  principal
subsidiaries,  is primarily engaged in three business segments.  AMREP Southwest
Inc. ("AMREP  Southwest")  operates in the real estate industry,  principally in
New Mexico, and Kable Media Services, Inc. ("Kable") operates in the fulfillment
services and magazine  distribution  services businesses  (collectively,  "media
services  operations").  All significant  intercompany accounts and transactions
have been eliminated in consolidation.

The  consolidated  balance sheets are presented in an unclassified  format since
the Company has  substantial  operations  in the real  estate  industry  and its
operating cycle is greater than one year.

    Fiscal Year
    -----------

The Company's  fiscal year ends on April 30. All  references  to 2008,  2007 and
2006 mean the  fiscal  years  ended  April 30,  2008,  2007 and 2006  unless the
context otherwise indicates.

    Revenue recognition
    -------------------

Real  Estate - Land sales are  recognized  when all  elements  of  Statement  of
Financial  Accounting  Standards  ("SFAS") No. 66, "Accounting for Sales of Real
Estate",  are met,  including  when the  parties  are  bound by the terms of the
contract, all consideration (including adequate cash) has been exchanged,  title
and other  attributes of ownership have been conveyed to the buyer by means of a
closing  and  the  Company  is not  obligated  to  perform  further  significant
development  of the specific  property  sold.  Profit is recorded  either in its
entirety or on the installment  method depending upon,  among other things,  the
ability to estimate the  collectibility  of the unpaid sales price. In the event
the buyer defaults on the obligation, the property is taken back and recorded as
inventory at the unpaid receivable balance,  net of any deferred profit, but not
in excess of fair market value less estimated costs to sell.

Cost of land  sales  includes  all  direct  acquisition  costs and  other  costs
specifically identified with the property,  including  pre-acquisition costs and
capitalized real estate taxes and interest,  and an allocation of certain common
development costs associated with the entire project.  Common  development costs
include the installation of utilities and roads, and may be based upon estimates
of cost to complete. The allocation of costs is based on the relative fair value
of the property before development.  Estimates and cost allocations are reviewed
on a regular basis until a project is substantially  completed,  and are revised
and reallocated as necessary on the basis of current estimates.

When the Company  enters into certain sales that require the Company to complete
specified  development work subsequent to closing,  sales are recorded under the
percentage-of-completion  method.  Revenues  and cost of sales are  recorded  as
development  work is performed  based on the  percentage  that incurred costs to
date bear to the  Company's  estimates of total costs and contract  value.  Cost
estimates  include  direct  and  indirect  costs  such as labor,  materials  and
overhead.  If a contract  extends  over an extended  period,  revisions  in cost
estimates  during  the  progress  of work  would  have the  effect of  adjusting
earnings  applicable to performance in prior periods in the current period. When
the current contract estimate indicates a loss,  provision is made for the total
anticipated  loss in the  current  period.  Consideration  received in excess of
amounts recognized as land sale revenues is accounted for as deferred revenue.

Media Services - Revenues from media services  operations  include revenues from
the  distribution  of  periodicals  and   subscription   fulfillment  and  other
activities.  Revenues from subscription  fulfillment  activities  represent fees
earned from the  maintenance of computer  files for customers,  which are billed
and  earned  monthly,  and  other  fulfillment   activities  including  customer
telephone  support,  product  fulfillment,   and  graphic  arts  and  lettershop
services,  all of which are billed and earned as the services are  provided.  In
accordance with Emerging Issues Task Force ("EITF") Issue No. 99-19,  "Reporting
Revenue Gross as a Principal versus Net as an Agent", certain reimbursed postage


                                       39


costs are accounted for on a net basis. Newsstand Distribution Services revenues
principally  represent  commissions earned from the distribution of publications
for  client  publishers  and  are  recorded  by  the  Company  at the  time  the
publications  go on sale at the retail level,  in  accordance  with SFAS No. 48,
"Revenue Recognition When Right of Return Exists".  Because the publications are
sold throughout the distribution chain on a fully-returnable basis in accordance
with prevailing  industry  practice,  the Company provides for estimated returns
from  wholesalers at the time the  publications  go on sale by charges to income
that  are  based  on  historical  experience  and  most  recent  sales  data for
publications on an issue-by-issue  basis, and then  simultaneously  provides for
estimated credits from publishers for the related returns. Accordingly, revenues
represent the  difference  between the  Company's  estimates of its net sales to
independent wholesalers and its net purchases from publisher clients.  Estimates
are continually  reevaluated  throughout the sales process, and final settlement
is typically made 90 days after a magazine's "off-sale" date.

    Cash and cash equivalents
    -------------------------
Cash equivalents  consist of short-term,  highly liquid investments that have an
original maturity of ninety days or less and are readily convertible into cash.

    Receivables
    -----------
Receivables  are carried at original  invoice or closing  statement  amount less
estimates  made  for  doubtful   receivables  and,  in  the  case  of  Newsstand
Distribution Services receivables, return allowances.  Management determines the
allowances for doubtful accounts by reviewing and identifying  troubled accounts
and by using historical experience applied to an aging of accounts. A receivable
is  considered  to be past  due if any  portion  of the  receivable  balance  is
outstanding  for more than 90 days.  Receivables  are  written  off when  deemed
uncollectible.  Recoveries of  receivables  previously  written off are recorded
when received.

Revenue  recognition  and related  receivables  for the  Newsstand  Distribution
Services  business is based on estimates of allowances  for magazine  returns to
the Company  from  wholesalers  and the  offsetting  return of  magazines by the
Company to publishers  for credit and is determined on an  issue-by-issue  basis
utilizing historical experience and current sales information.

    Real estate inventory
    ---------------------
Land and improvements on land held for future  development or sale are stated at
the lower of  accumulated  cost (except in certain  instances  where property is
repossessed as discussed above under "Revenue recognition"),  which includes the
development cost, certain amenities,  capitalized  interest and capitalized real
estate taxes, or fair market value less estimated costs to sell.

    Investment assets
    -----------------
Investment assets consist of investment land and commercial rental properties.

Investment land represents vacant,  undeveloped land not held for development or
sale in the normal  course of business  and which is stated at the lower of cost
or fair  market  value  less the  estimated  costs to  sell.  Commercial  rental
properties are recorded at cost less accumulated  depreciation.  Depreciation of
commercial  rental  properties is provided by the  straight-line  basis over the
estimated  useful  lives,  which  generally  are 10 years or less for  leasehold
improvements and 25 years for buildings.

    Property, plant and equipment
    -----------------------------
Items capitalized as part of property, plant and equipment are recorded at cost.
Expenditures  for  maintenance  and repair  and minor  renewals  are  charged to
expense as incurred,  while those expenditures that improve or extend the useful
life of  existing  assets are  capitalized.  Upon sale or other  disposition  of
assets, their cost and the related accumulated  depreciation or amortization are
removed from the accounts and the  resulting  gain or loss, if any, is reflected
in operations.

Depreciation  and  amortization  of property,  plant and  equipment are provided
principally by the straight-line  method at various rates calculated to amortize
the book values of the  respective  assets over their  estimated  useful  lives,
which  generally  are 10 years or less for  furniture  and  fixtures  (including
equipment) and 25 to 40 years for buildings and improvements.

                                       40


    Goodwill
    --------

Goodwill is the excess of amounts  paid for business  acquisitions  over the net
fair value of the assets  acquired and  liabilities  assumed.  Goodwill arose in
connection with the  acquisitions  of Kable News Company,  Inc. in 1969 and Palm
Coast Data Holdco, Inc. ("Palm Coast") in 2007 (see Note 10).

Goodwill  is not  amortized,  but is reviewed  at the  reporting  unit level for
impairment  annually or more frequently if indications of impairment exist under
the  provisions of SFAS No. 142,  "Goodwill  and Other  Intangible  Assets".  An
impairment  charge is generally  recognized  when the estimated  fair value of a
reporting unit, including goodwill, is less than its carrying amount. Based on a
review completed in April 2008, the Company believes that no goodwill impairment
existed at April 30, 2008.

    Long-lived assets
    -----------------

Long-lived  assets,  including  real  estate  inventory,  investment  assets and
property,  plant and equipment,  are evaluated in accordance  with SFAS No. 144,
"Accounting for the Impairment or Disposal of Long-Lived  Assets",  and reviewed
for  impairment  when events or changes in  circumstances  indicate the carrying
value of an asset may not be recoverable. Provisions for impairment are recorded
when  undiscounted cash flows estimated to be generated by those assets are less
than the carrying amount of the assets.  The amount of impairment would be equal
to the difference between the carrying value of an asset and its discounted cash
flows.

    Income taxes
    ------------

Deferred tax assets and liabilities are determined based on differences  between
financial reporting and tax bases of assets and liabilities, and are measured by
using  currently  enacted tax rates  expected to apply to taxable  income in the
years in which those differences are expected to reverse.

    Earnings per share
    ------------------

Basic  earnings  per  share is based on the  weighted  average  number of common
shares  outstanding  during each year.  Diluted  earnings  per share is computed
assuming  the  issuance  of  common  shares  for  all  dilutive   stock  options
outstanding (using the treasury stock method) during the reporting period.

    Stock options
    -------------

The Company  adopted SFAS No. 123(R),  "Share-Based  Payment",  effective May 1,
2006. SFAS No. 123(R)  requires the Company to recognize  expense related to the
fair value of share-based  compensation awards,  including employee and director
stock grants and options.

The  Company  had issued  stock  options  to  non-employee  directors  under the
Non-Employee  Directors  Option Plan that was  terminated in 2006 (see Note 11).
Stock options  granted prior to the adoption of SFAS No. 123(R) were issued with
an exercise price at the fair market value of the Company's stock at the date of
grant. Accordingly,  no compensation expense has been recognized with respect to
the stock option plan in the years 2006 and prior.  In addition,  under SFAS No.
123(R) the  compensation  expense was not material to the results of  operations
for 2008 and 2007.

    Pension plan
    ------------
In September 2006, the Financial Accounting Standards Board ("FASB") issued SFAS
No. 158,   "Employers'   Accounting  for  Defined   Benefit  Pension  and  Other
Postretirement Plans", an amendment of FASB Statement Nos. 87, 88, 106 and 132R.
SFAS No. 158  requires the recognition of the over-funded or under-funded status
of a  defined  benefit  postretirement  plan as an  asset  or  liability  in the
statement of financial position and changes in that funded status in the year in
which the changes occur through comprehensive income. SFAS No. 158 also requires
the funded status of a plan be measured as of the date of its year-end statement
of financial  position.  The Company  adopted the  recognition,  disclosure  and
measurement  provisions of SFAS No 158 as of April 30, 2007, which did not have
a material effect on the Company's consolidated  financial position,  results of
operations or cash flows.

                                       41


    Comprehensive income (loss)
    ---------------------------

Comprehensive  income  (loss) is defined as the change in equity during a period
from transactions and other events from non-owner sources.  Comprehensive income
(loss) is the total of net income and other  comprehensive  income  (loss) that,
for the Company,  is comprised  entirely of the minimum pension liability net of
the related deferred income taxes.

    Management's estimates and assumptions
    --------------------------------------

The  preparation  of  consolidated   financial  statements  in  conformity  with
accounting   principles   generally  accepted  in  the  United  States  requires
management to make estimates and assumptions that affect the amounts reported in
the financial statements and accompanying notes. The significant  estimates that
affect the  financial  statements  include,  but are not limited to, real estate
inventory  valuation and related  revenue  recognition,  allowances for magazine
returns and  doubtful  accounts,  the  recoverability  of  long-term  assets and
amortization  periods,   goodwill  impairment,   pension  plan  assumptions  for
determination   of  pension   expense   and  benefit   obligations,   and  legal
contingencies.  The  Company  bases  its  significant  estimates  on  historical
experience  and on  various  other  assumptions  that  management  believes  are
reasonable  under the  circumstances.  Actual  results  could  differ from these
estimates;  however,  there have been no material  changes made to the Company's
accounting estimates in the past three years.

    New and Emerging Accounting Standards
    -------------------------------------

In  September  2006,  the FASB issued SFAS No. 157,  "Fair Value  Measurements",
which defines fair value,  establishes a framework for measuring  fair value and
expands  disclosure  of fair  value  measurements.  SFAS No. 157  applies  under
accounting  pronouncements  that require or permit fair value  measurements and,
accordingly, does not require any new fair value measurements.  SFAS No. 157, as
it relates to financial  assets and  financial  liabilities,  is  effective  for
fiscal years  beginning  after November 15, 2007. On February 12, 2008, the FASB
issued FASB Staff Position No. FAS 157-2  "Effective  Date of FASB Statement No.
157,"  which  delays  the  effective  date of SFAS No.  157 for one year for all
non-financial  assets  and  non-financial  liabilities,  except  those  that are
recognized or disclosed at fair value in the financial statements on at least an
annual basis. The Company does not expect the adoption of SFAS No. 157 to have a
material impact on its financial position, results of operations or cash flows.

In February  2007,  the FASB issued  SFAS No.  159,  "The Fair Value  Option for
Financial  Assets and  Financial  Liabilities  - Including  an amendment of FASB
Statement  No.  115",  which  provides  all  entities  with an  option to report
selected  financial  assets and liabilities at fair value. The objective of SFAS
No.  159 is to  improve  financial  reporting  by  providing  entities  with the
opportunity  to mitigate  volatility  in earnings  caused by  measuring  related
assets  and  liabilities   differently  without  having  to  apply  the  complex
provisions of hedge  accounting.  Certain  specified  items are eligible for the
irrevocable fair value  measurement  option as established by SFAS No. 159. SFAS
No. 159 is  effective  as of the  beginning  of an  entity's  first  fiscal year
beginning  after  November 15, 2007. The Company does not expect the adoption of
SFAS No. 159 to have a material  impact on its  financial  position,  results of
operations or cash flows.

In December  2007,  the FASB issued SFAS No. 160,  "Noncontrolling  Interests in
Consolidated  Financial  Statements-an  amendment of ARB No. 51", which provides
accounting  and  reporting  standards  for  the  noncontrolling  interest  in  a
subsidiary  and for the retained  interest and gain or loss when a subsidiary is
deconsolidated.  This statement is effective for financial statements issued for
fiscal years  beginning on or after  December 15, 2008. The adoption of SFAS No.
160 is not  expected  to  have a  material  impact  on the  Company's  financial
position, results of operations or cash flows.

In December 2007, the FASB also issued SFAS No. 141(R),  "Business  Combinations
(Revised)",  which, among other provisions,  requires the use of the acquisition
method of accounting, defines the acquirer, establishes the acquisition date and
broadens  the scope to all  transactions  and other  events in which one  entity
obtains  control over one or more  businesses.  The  statement is effective  for
business combinations or transactions entered into for fiscal years beginning on
or after  December  15, 2008.  The  adoption of SFAS No.  141(R) will affect the
Company's  accounting for future business  combinations after the effective date
and  therefore  has no impact on its  current  financial  position,  results  of
operations or cash flows.

The Company will monitor these  emerging  issues to assess any potential  future
impact on its consolidated financial statements.

                                       42


(2) ADOPTION OF FIN 48
    ------------------

The Company adopted the provisions of FASB  Interpretation  No. 48,  "Accounting
for Uncertainty in Income Taxes - an  interpretation  of FASB Statement No. 109"
("FIN 48"),  as of May 1, 2007.  Previously,  the Company had  accounted for tax
contingencies   in  accordance  with  FASB  Statement  No.  5,  "Accounting  for
Contingencies".  As  required by FIN 48, the Company  recognizes  the  financial
statement benefit of a tax position only after determining that the relevant tax
authority  would more likely than not sustain the  position  following an audit.
For  tax  positions  meeting  the  more-likely-than-not  threshold,  the  amount
recognized in the financial  statements is the largest  benefit that  management
believes  has a  greater  than 50  percent  likelihood  of being  realized  upon
ultimate  settlement with the relevant tax authority.  Unrecognized tax benefits
are tax  benefits  claimed in the  Company's  tax returns that do not meet these
recognition and measurement standards.

At the adoption date, the Company  applied FIN 48 to all tax positions for which
the statute of  limitations  remained open. The adoption of FIN 48 had no impact
on the Company's financial  statements.  The Company's deferred income taxes and
other  long-term  liabilities  include an  unrecognized  tax benefit  that would
impact the  effective  tax rate was  $1,354,000  at May 1, 2007,  which had been
previously  recorded  under FASB  Statement No. 5 or FASB Statement No. 109. The
Company's  unrecognized  tax benefit at April 30, 2008 was  $2,076,000  that, if
recognized, would have an impact on the effective tax rate.

The Company is subject to U.S.  Federal income taxes, and also to various state,
local and foreign income taxes.  Tax regulations  within each  jurisdiction  are
subject  to the  interpretation  of the  related  tax laws and  regulations  and
require  significant  judgment  to apply.  The  Company is not  currently  under
examination by any tax  authorities  with respect to its income tax returns.  In
nearly all jurisdictions,  the tax years through the fiscal year ended April 30,
2004 are no longer subject to examination.

The total  amount of  unrecognized  tax  positions  ("UTP")  could  increase  or
decrease  within the next twelve  months for a number of reasons,  including the
expiration of statutes of limitations,  audit settlements,  tax examinations and
the recognition and measurement  considerations  under FIN 48. At this time, the
Company estimates that it is reasonably possible that the liability for UTP will
decrease by up to approximately $600,000 in the next twelve months due to either
the  expiration of statutes of limitations or the  recognition  and  measurement
considerations under FIN 48 related to the value of land contributions.

The Company has elected to retain its existing accounting policy with respect to
the  treatment  of  interest  and  penalties  attributable  to  income  taxes in
accordance  with  FIN 48,  and  continues  to  reflect  interest  and  penalties
attributable  to income taxes,  to the extent they arise,  as a component of its
income tax provision or benefit as well as its outstanding income tax assets and
liabilities. The total amount of interest payable recognized in the accompanying
consolidated  balance  sheets was $717,000 at April 30, 2008 and $395,000 at May
1, 2007 (date of adoption). No amount has been accrued for penalties.

(3) RECEIVABLES:
    ------------
Receivables consist of:                                                               April 30,
                                                                         -------------------------------------
                                                                              2008                 2007
                                                                         ----------------    -----------------
                                                                                     (Thousands)
Real estate operations:
  Mortgage and other receivables                                          $     13,236        $     25,165
  Allowance for doubtful accounts                                                 (112)                (48)
                                                                         ----------------    -----------------
                                                                          $     13,124        $     25,117
                                                                         ================    =================
Media services operations (maturing within one year):
  Fulfillment services                                                    $     28,348        $     29,606
  Newsstand Distribution Services, net of estimated returns                     18,008              19,550
                                                                         ----------------    -----------------
                                                                                46,356              49,156
  Allowance for doubtful accounts                                                 (655)             (1,331)
                                                                         ----------------    -----------------
                                                                          $     45,701        $     47,825
                                                                         ================    =================

The Company  extends  credit to various  companies  in its real estate and media
services  businesses  that may be  affected  by  changes  in  economic  or other
external  conditions.  Financial  instruments  that may potentially  subject the


                                       43


Company to a significant concentration of credit risk primarily consist of trade
accounts  receivable  from  wholesalers in the magazine  distribution  industry.
Approximately  42% and 43% of media  services net accounts  receivable  were due
from  three  wholesalers  at  April  30,  2008  and  2007.  As a  result  of the
concentration of accounts receivable in three wholesalers,  the Company could be
adversely  affected by adverse  changes in their  financial  condition  or other
factors negatively  affecting these companies.  As industry practices allow, the
Company's  policy is to  manage  its  exposure  to credit  risk  through  credit
approvals  and limits and, on occasion  (particularly  in  connection  with real
estate land  sales),  the taking of  collateral.  The Company  also  provides an
allowance  for  doubtful  accounts  for  potential  losses  based  upon  factors
surrounding the credit risk of specific  customers,  historical trends and other
financial and non-financial information.

Real estate  mortgage  receivables  bear  interest at rates ranging from 8.0% to
12.0% and result primarily from land sales. Real estate mortgage  receivables of
$2,774,000  collateralize the AMREP Southwest term loan (see Note 9). Maturities
of principal on real estate receivables at April 30, 2008 were as follows:  2009
- $12,106,000; 2010 - $1,130,000; 2011 and thereafter - none.

Because  the   publications   distributed  by  Kable  are  sold  throughout  the
distribution  chain on a  fully-returnable  basis in accordance  with prevailing
industry  practice,  the Company provides for estimated returns from wholesalers
at the time the  publications  go on sale by charges to income that are based on
historical  experience  and  most  recent  sales  data  for  publications  on an
issue-by-issue  basis, and then  simultaneously  provides for estimated  credits
from publishers for the related returns.  The financial impact to the Company of
a change in the sales estimate for magazine  returns to it from its  wholesalers
is substantially  offset by the simultaneous change in the Company's estimate of
its cost of purchases  since it passes on the returns to publishers  for credit.
Newsstand  Distribution  Services  accounts  receivable  are  net  of  estimated
magazine  returns of $55,930,000  in 2008 and  $52,275,000 in 2007. In addition,
pursuant  to an  arrangement  with  one  publisher  customer  of  the  Newsstand
Distribution Services business,  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 were netted  ($22,703,000 and $21,106,000
were netted at April 30, 2008 and 2007) against the related accounts payable due
the publisher on the  accompanying  balance  sheets.  Media services  operations
receivables collateralize line-of-credit arrangements utilized for the Newsstand
Distribution and Fulfillment Services operations (see Note 9).

Media Services  operations  provide  services to publishing  companies  owned or
controlled  by a  major  shareholder  and  member  of the  Board  of  Directors.
Commissions  and  other  revenues  earned  on  these  transactions   represented
approximately  1%  of  consolidated   revenues  in  2008  and  2007  and  2%  of
consolidated revenues in 2006.

(4) REAL ESTATE INVENTORY:
    ----------------------

Real  estate  inventory  consists  of land  and  improvements  held  for sale or
development.  Accumulated  capitalized  interest  costs  included in real estate
inventory at April 30, 2008 and 2007 were  $3,224,000 and  $2,293,000.  Interest
costs  capitalized  during  2008,  2007 and 2006 were  $1,300,000,  $469,000 and
$21,000.  Accumulated capitalized real estate taxes included in the inventory of
land and improvements at April 30, 2008 and 2007 were $1,820,000 and $1,887,000.
Real estate taxes capitalized  during 2008, 2007 and 2006 were $41,000,  $18,000
and $16,000. Previously capitalized interest costs and real estate taxes charged
to real estate cost of sales were $108,000,  $357,000 and $662,000 in 2008, 2007
and 2006.

Substantially all of the Company's real estate assets are located in or adjacent
to Rio Rancho,  New Mexico.  As a result of this geographic  concentration,  the
Company could be affected by changes in economic conditions in that region.





                                       44


(5) INVESTMENT ASSETS:
    ------------------
Investment assets consist of:
                                                                                April 30,
                                                                     ---------------------------------
                                                                         2008               2007
                                                                     --------------    ---------------
                                                                               (Thousands)

Land held for long-term investment                                    $   9,771         $     9,039
                                                                     --------------    ---------------
Commercial rental properties:
 Land, buildings and improvements                                           754               3,535
 Furniture and fixtures                                                      40                  42
                                                                     --------------    ---------------
                                                                            794               3,577
 Less accumulated depreciation                                             (265)               (451)
                                                                     --------------    ---------------
                                                                            529               3,126
                                                                     --------------    ---------------
                                                                      $  10,300         $    12,165
                                                                     ==============    ===============

Land held for long-term investment represents property located in areas that are
not planned to be  developed  in the near term and thus has not been offered for
sale.  During 2008,  the Company sold a commercial  rental  property in its real
estate business with a net book value of $2,876,000.

Depreciation  of investment  assets charged to operations  amounted to $117,000,
$179,000 and $209,000 in 2008, 2007 and 2006.

(6) PROPERTY, PLANT AND EQUIPMENT:
    ------------------------------
Property, plant and equipment consist of:
                                                                                 April 30,
                                                                     ---------------------------------
                                                                          2008               2007
                                                                     --------------    ---------------
                                                                               (Thousands)
Land, buildings and improvements                                       $   17,875        $  17,217
Furniture and equipment                                                    45,241           41,778
Other                                                                          59               75
                                                                     --------------    ---------------
                                                                           63,175           59,070
Less accumulated depreciation                                             (34,261)         (28,552)
                                                                     --------------    ---------------
                                                                       $   28,914        $  30,518
                                                                     ==============    ===============


Depreciation of property,  plant and equipment charged to operations amounted to
$6,578,000, $4,983,000 and $4,222,000 in 2008, 2007 and 2006.

(7) INTANGIBLE AND OTHER ASSETS:
    ----------------------------

Intangible and other assets consist of:

                                                       April 30, 2008                           April 30, 2007
                                             ------------------------------------     -----------------------------------
                                                                               (Thousands)
                                                                   Accumulated                             Accumulated
                                                 Cost             Amortization            Cost            Amortization
                                             --------------      ----------------     -------------      ----------------

Software development costs                    $    10,017         $      3,780         $    9,461          $    1,758
Deferred order entry costs                          5,681                    -              5,837                   -
Prepaid expenses                                    3,047                    -              3,302                   -
Customer contracts and relationships               15,000                1,613             15,000                 364
Other                                               2,430                  869              5,118               2,582
                                             --------------      ----------------     -------------      ----------------
                                              $    36,175         $      6,262         $   38,718          $    4,704
                                             ==============      ================     =============      ================

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


                                       45


connection with the data entry of customer subscription  information to database
files and are charged  directly to operations over a 12-month  period.  Customer
contracts and relationships are amortized over 12 years.

Amortization  related  to  deferred  charges  was  $3,829,000,   $2,157,000  and
$1,137,000 in 2008,  2007 and 2006.  Amortization of intangible and other assets
for  each  of  the  next  five  years  is  estimated  to be as  follows:  2009 -
$3,658,000;  2010 - $3,591,000; 2011 - $3,150,000; 2012 - $2,568,000; and 2013 -
$1,552,000.

(8) ACCOUNTS PAYABLE AND ACCRUED EXPENSES:
    --------------------------------------
Accounts payable and accrued expenses consist of:
                                                                                 April 30,
                                                                     ---------------------------------
                                                                          2008               2007
                                                                     ----------------    -------------
                                                                                (Thousands)

Publisher payables, net                                                $   77,003         $   63,759
Accrued expenses                                                            5,000              6,803
Trade payables                                                              5,753              3,701
Other                                                                      10,776              9,294
                                                                     --------------     --------------
                                                                       $   98,532         $   83,557
                                                                     ==============     ==============

Pursuant  to an  arrangement  with  one  publisher  customer  of  the  Newsstand
Distribution   Services  business,   the  Company  has  netted  $22,703,000  and
$21,106,000 of accounts receivable against the related accounts payable at April
30, 2008 and 2007 (See Note 3).

(9) NOTES PAYABLE:
    --------------
Notes payable consist of:
                                                                                 April 30,
                                                                     --------------------------------
                                                                          2008               2007
                                                                     ------------      --------------
                                                                                (Thousands)
   Line-of-credit arrangements:
     Real estate operations                                           $  18,000           $   6,000
     Media services operations                                            4,582              14,604
   Real estate operations term loan                                       2,774              10,559
   Other notes payable                                                      624               1,136
                                                                     ------------      --------------
                                                                      $  25,980           $  32,299
                                                                     ============      ==============

Maturities of principal on notes  outstanding at April 30, 2008 were as follows:
2009 - $4,815,000;  2010 - $19,683,000;  2011 - $865,000;  2012 - $617,000;  and
2013 and thereafter - none.

    Lines-of-credit and other arrangements
    --------------------------------------

Real Estate - In January 2007,  AMREP  Southwest  entered into a loan  agreement
that replaced a prior loan  agreement  entered into in September  2006.  The new
loan  agreement  added  a  $14,180,000  term  loan  facility  to  the  unsecured
$25,000,000  revolving credit facility  provided in the September 2006 agreement
and was originally scheduled to mature in September 2008. During September 2007,
the maturity  date of the  revolving  credit  facility was extended to September
2009, with all other terms remaining unchanged.

The revolving credit facility is used to support real estate  development in New
Mexico.  Borrowings  bear annual  interest at the  borrower's  option at (i) the
prime rate (5.0% at April 30,  2008) less 1.00%,  or (ii) the 30-day  LIBOR rate
(2.80% at April 30, 2008) plus 1.65% for borrowings of less than $10,000,000, or
plus  1.50% for  borrowings  of  $10,000,000  or more.  At April 30,  2008,  the
outstanding  balance of the revolving  credit  facility was  $18,000,000  with a
weighted  average  interest rate of 4.38%.  The term loan facility  bears annual
interest on borrowings at the 30-day LIBOR rate plus 1.75%, matures December 15,
2008 and is  secured by certain of the  borrower's  notes  receivable  from real
estate  sales.  The  term  loan  requires  prepayment  in  an  amount  equal  to
collections  on the notes  receivable  held as collateral  and the amount of any
that have  experienced  payment  defaults.  At April 30, 2008,  the  outstanding
balance of the term loan was $2,774,000. The loan agreement contains a number of
restrictive  covenants,  including  one that requires the borrower to maintain a
minimum  tangible net worth,  and AMREP  Southwest was in compliance  with these
covenants at April 30, 2008.

                                       46


Media Services - In connection  with the  completion of the  acquisition of Palm
Coast in  January  2007 (see  Note 10),  Kable and  certain  of its  direct  and
indirect  subsidiaries  entered  into a Second  Amended  and  Restated  Loan and
Security  Agreement with a bank (the "Credit  Agreement").  During January 2008,
Kable  entered  into a  First  Modification  to  the  Credit  Agreement  ("First
Modification").  The First Modification  modified the Credit Agreement by, among
other  things,  (a)  increasing  the amount  that may be  borrowed  for  capital
expenditures,  (b) allowing the  borrowers the right to re-borrow the amounts of
capital expenditure loans that have been repaid, (c) modifying the interest rate
options the borrowers may select and (d) adding Kable Products Services, Inc., a
recently organized member of the Kable Media Services group, as a borrower.

The  credit  facilities  available  to Kable  with the  execution  of the  First
Modification  consist  of:  (i) a  revolving  credit  loan and  letter of credit
facility in an aggregate  principal amount of up to $35,000,000  ("Facility A");
(ii) a secured term loan of  approximately  $3,000,000 that combined a number of
separate  borrowings  for  capital   expenditures  under  the  Credit  Agreement
("Facility B"); (iii) a capital expenditure line of credit in an amount of up to
$4,500,000 to finance new equipment  ("Facility C"); and (iv) a second revolving
credit loan facility of $10,000,000  ("Facility D") that may be used exclusively
for the  payment of  accounts  payable  under a  distribution  agreement  with a
customer of Kable's Distribution Services business.  The borrowers'  obligations
under the First  Modification  continue  to be secured by  substantially  all of
their assets other than (i) real  property and (ii) any  borrower's  interest in
the capital securities of any other borrower or any subsidiary of any borrower.

The  Facility A, C and D loans  mature in May 2010 and bear  annual  interest at
fluctuating  rates that,  at the  borrowers'  option,  may be either (i) reserve
adjusted  LIBOR  rates  (2.66%  at April  30,  2008)  plus a margin  established
quarterly from 1.5% to 2.5%  dependent on the  borrowers'  funded debt to EBITDA
ratio,  as defined  in the Credit  Agreement,  or (ii) the  Lender's  prime rate
(5.00%  at April  30,  2008).  As of April 30,  2008,  there was no  outstanding
balance under  Facilities A or D and the outstanding  balance for Facility C was
$2,895,000.  The Facility B loan matures December 2009 and bears annual interest
at a rate of 6.4% and had an  outstanding  balance  of  $1,687,000  at April 30,
2008.

The Credit Agreement requires the borrowers to maintain certain financial ratios
and contains customary covenants and restrictions, the most significant of which
limit the ability of the  borrowers  to declare or pay  dividends  or make other
distributions to the Company unless certain  conditions are satisfied,  and that
limit the annual  amount of  indebtedness  the  borrowers  may incur for capital
expenditures  and other  purposes.  The borrowers were in compliance  with these
covenants at April 30, 2008.

Other notes payable consist of equipment financing loans with a weighted average
interest rate of 5.71% at April 30, 2008.

(10) ACQUISITION:
     ------------

During  January  2007,  the  Company,  through  its Kable Media  Services,  Inc.
subsidiary, completed the acquisition of 100% of the stock of Palm Coast, which,
through its subsidiary,  Palm Coast Data LLC, is a major provider of fulfillment
services for magazine  publishers and others.  The acquisition has  complemented
and added service capability to the Company's fulfillment services business. The
merger  consideration was financed with existing cash and borrowings and totaled
approximately $95,400,000. The transaction has been accounted for as a purchase,
and  the  results  of  operations  of  Palm  Coast  have  been  included  in the
consolidated financial statements since the date of acquisition.

                                       47


The  allocation  of the  purchase  price  of  Palm  Coast  to net  tangible  and
identifiable  intangible  assets was based on their  estimated fair values as of
January 16, 2007,  determined using valuations and other studies.  The excess of
the purchase price plus estimated fees and expenses  related to the  acquisition
over the net  tangible  and  identifiable  intangible  assets was  allocated  to
goodwill. The purchase price allocation reflects a post-closing price adjustment
of $195,000  during 2008 in accordance  with FASB  Statement No. 141,  "Business
Combinations" and was as follows (in thousands):

         Receivables                                             $  10,082
         Property, plant and equipment                              22,886
         Deferred taxes, net                                         2,075
         Deferred order entry costs                                  1,636
         Customer contracts and relationships                       15,000
         Goodwill                                                   48,948
         Accounts payable and accrued expenses                      (7,631)
         Other assets                                                2,445
                                                                 -----------
                                                                 $  95,441
                                                                 ===========

The useful lives of the  intangible  assets  acquired  are as follows:  deferred
order entry costs - one year;  customer  contracts and relationships - 12 years;
and goodwill - indefinite.  The goodwill recognition of $48,948,000 is primarily
related to the anticipated future earnings and cash flows of Palm Coast.

(11) BENEFIT PLANS:
     --------------

     Retirement plan
     ---------------
The Company has a retirement plan for which accumulated benefits were frozen and
future service credits were curtailed as of March 1, 2004. Prior to that date it
had covered  substantially  all full-time  employees and provided benefits based
upon  a  percentage  of the  employee's  annual  salary.  The  following  tables
summarize the balance sheet impact as well as the benefit  obligations,  assets,
funded status and assumptions associated with the retirement plan.

Net periodic pension cost (benefit) for 2008, 2007 and 2006 was comprised of the
following components:

                                                                          Year Ended April 30,
                                                          -----------------------------------------------------
                                                               2008               2007               2006
                                                          ---------------    ----------------   ---------------
                                                                               (Thousands)
  Interest cost on projected
    benefit obligation                                    $       1,736      $       1,789      $       1,780
  Expected return on assets                                      (2,310)            (2,224)            (1,994)
  Plan expenses                                                     146                180                212
  Recognized net actuarial loss                                     164                325                629
                                                          ---------------    ----------------   ---------------
  Total cost (benefit) recognized in pretax income                 (264)                70                627
  Cost (benefit) recognized in pretax other
    comprehensive income                                          1,065             (2,017)            (3,173)
                                                          ---------------    ----------------   ---------------
                                                          $         801     $      (1,947)      $      (2,546)
                                                          ===============    ================   ===============

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  $291,000,  $0 and $0,
respectively.

                                       48


Assumptions  used in  determining  net  periodic  pension  cost and the  benefit
obligations were:

                                                                      Year Ended April 30,
                                                      -----------------------------------------------------
                                                          2008                2007               2006
                                                      --------------     ---------------    ---------------

       Discount rate used to determine net
          periodic pension cost                            5.75%              5.75%              5.75%
       Discount rate used to determine pension
          benefit obligation                               6.42%              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,
                                                                 ---------------------------------------------------
                                                                      2008               2007              2006
                                                                 -------------      -------------     --------------
                                                                                     (Thousands)
  Change in benefit obligation:
    Benefit obligation at beginning of year                       $   31,283         $   32,159        $  31,808
    Interest cost                                                      1,736              1,789            1,780
    Actuarial (gain) loss                                             (1,616)              (757)             418
    Benefits paid                                                     (2,133)            (1,908)          (1,847)
                                                                 -------------      -------------     --------------
    Benefit obligation at end of year                             $   29,270         $   31,283        $  32,159
                                                                 -------------      -------------     --------------


  Change in plan assets:
    Fair value of plan assets at beginning of year                $   30,040         $   28,925        $  26,028
    Contributions                                                          -                 44                -
    Actual return on plan assets                                        (507)             3,125            4,924
    Benefits paid                                                     (2,133)            (1,908)          (1,847)
    Plan expenses                                                       (175)              (146)            (180)
                                                                 -------------      -------------     --------------
    Fair value of plan assets at end of year                      $   27,225         $   30,040        $  28,925
                                                                 -------------      -------------     --------------


  Funded status:
    Benefit obligation in excess of plan assets                   $   (2,045)        $   (1,243)       $  (3,234)
    Unrecognized net actuarial loss                                    5,836              4,771            6,788
                                                                 -------------      -------------     --------------
    Net asset (liability) recognized in the balance sheets        $   (3,791)        $   (3,528)       $   3,554
                                                                 =============      =============     ==============

  Amounts recognized on the balance sheets:
    Accrued pension costs                                         $   (2,045)        $   (1,243)       $  (3,234)
    Pre-tax accumulated comprehensive loss                             5,836              4,771            6,788
                                                                 -------------      -------------     --------------
                                                                  $   (3,791)        $   (3,528)       $   3,554
                                                                 =============      =============     ==============


Due to the adoption of SFAS No. 158 as of April 30, 2007,  the funded  status of
the plan is equal to the net liability  recognized in the  consolidated  balance
sheet.  As a result of  applying  SFAS No. 158,  there was  minimal  incremental
affect on  individual  line  items in the  accompanying  balance  sheet,  and no
adjustments of retained earnings and accumulated comprehensive income (loss) was
required.

The average asset  allocation for the  retirement  plan by asset category was as
follows:

                                                                                      April 30,
                                                                            -------------------------------
                                                                                2008              2007
                                                                            --------------    -------------
          Equity securities                                                        74%              79%
          Fixed income securities                                                  23               19
          Other (principally cash and cash equivalents)                             3                2
                                                                            --------------    -------------
          Total                                                                   100%              100%
                                                                            ==============    =============

The  Company  recorded  other  comprehensive  income  (loss),  net  of  tax,  of
$(660,000) in 2008, $1,210,000 in 2007 and $1,904,000 in 2006 to account for the
net effect of changes to the unfunded pension liability.

                                       49


The  investment mix between  equity  securities  and fixed income  securities is
based  upon  achieving  a  desired  return by  balancing  more  volatile  equity
securities and less volatile fixed income  securities.  Plan assets are invested
in portfolios of diversified  public-market  equity and fixed income securities.
Investment  allocations  are made across a range of markets,  industry  sectors,
capitalization sizes and, in the case of fixed income securities, maturities and
credit quality. The plan holds no securities of the Company.

The expected  return on assets for the retirement  plan is based on management's
expectation  of  long-term  average  rates  of  return  to be  achieved  by  the
underlying investment  portfolios.  In establishing this assumption,  management
considers  historical  and expected  returns for the asset  classes in which the
plan is invested, as well as current economic and market conditions.

The Company funds the retirement plan according to IRS funding limitations.  The
Company made contributions to the plan for 2008, 2007 and 2006 as follows: none,
$44,000 and none.  No  mandatory  contributions  are  expected to be made by the
Company to the retirement plan in fiscal 2009.

The amount of future  annual  benefit  payments is  expected to be between  $2.2
million and $2.4 million in 2008 through 2012, and an aggregate of approximately
$11.5 million is expected to be paid in the five-year period 2013 through 2017.

    Savings and salary deferral plans
    ----------------------------------

The Company has a Savings and Salary  Deferral Plan,  commonly  referred to as a
401(k) plan, in which all full-time  employees (other than Palm Coast employees)
with more than one year of service are eligible to participate and contribute to
through  salary  deductions.   The  Company  may  make  discretionary   matching
contributions,  subject to the approval of its Board of  Directors.  For each of
the three years ended April 30,  2008,  the Company  matched  66.67% of eligible
employee contributions not in excess of 6% of such employee compensation.

The Company also has a 401(k) plan in which all Palm Coast  employees  with more
than six months of service are eligible to participate and contribute to through
salary deductions.  Employees may defer 1% to 20% of pretax wages to the allowed
federal  maximum each calendar  year. The Company  currently  matches 50% of the
employee contributions not in excess of 6% of eligible compensation.

The Company's  contributions to the plans amounted to approximately  $1,263,000,
$981,000 and $832,000 in 2008, 2007 and 2006.

    Directors' stock plan
    ---------------------
During  2003,  the  Company  adopted  the AMREP  Corporation  2002  Non-Employee
Directors' Stock Plan and reserved 65,000 shares of common stock for issuance to
non-employee  directors.  Under the plan, each  non-employee  director  received
1,250 shares of stock on each March 15 and  September 15 as partial  payment for
services rendered.  The expense recorded based upon the fair market value of the
stock at time of issuance  under this plan was $339,000 and $441,000 in 2007 and
2006 (7,500  shares  issued in 2007 and 15,000  shares  issued in each of 2006).
This plan was  terminated  in  December  2006 and,  as a result,  no shares were
issued or expense recorded in fiscal 2008.

    Equity compensation plan
    ------------------------
The Company adopted the 2006 Equity  Compensation Plan (the "Plan") in September
2006 that  provides for the issuance of up to 400,000  shares of common stock of
the Company pursuant to options,  grants or other awards made under the Plan. As
of April 30, 2008, the Company  issued no options,  grants or other awards under
the Plan.



                                       50


    Stock option plan
    -----------------
The Company had in effect a stock option plan that  provided  for the  automatic
issuance  of  an  option  to  purchase  500  shares  of  common  stock  to  each
non-employee  director  annually at the fair market  value at the date of grant.
The options are  exercisable in one year and expire five years after the date of
grant.  The Board of Directors  terminated  the plan following the annual grants
that were made in September 2005.  Options exercised resulted in the issuance of
new shares of common stock.

A summary of activity in the Company's stock option plan is as follows:

                                                                 Year Ended April 30,
                                    -----------------------------------------------------------------------
                                            2008                    2007                      2006
                                    --------------------   -----------------------   ----------------------
                                               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                   4,500     $ 20.28      7,000       $ 18.56        7,000    $ 14.92

Granted                                 -             -        -               -        3,000      24.88
Exercised                               -             -     (2,500)        15.47       (2,500)     16.13
Expired or canceled                     -             -        -               -         (500)     17.56
                              -----------------        -----------------          ---------------
Options outstanding at
  end of year                         4,500     $ 20.28      4,500       $ 20.28        7,000    $ 18.56
                              =================        =================          ===============

Available for grant at
  end of year                           -                      -                          -
                              =================        =================          ===============

Options exercisable at
  end of year                         4,500                  4,500                     4,000
                              =================        =================          ===============

Range of exercise prices
  for options exercisable
  at end of year              $15.19 to $24.88         $15.19 to $24.88           $3.95 to $24.88
                              =================        =================          ===============

Options  outstanding at April 30, 2008 were  exercisable over a four-year period
beginning  one  year  from  date  of  grant.  The  weighted  average   remaining
contractual  lives of options  outstanding at April 30, 2008, 2007 and 2006 were
1.6,  3.2 and 3.9 years.  The  weighted  average  fair value per option share of
options  granted  in 2006 was  $8.07.  The fair  value of each  option  grant is
estimated on the date of grant using the Black-Scholes option-pricing model with
the following  weighted-average  assumptions  used for grants in 2006:  dividend
yield 2.2%;  expected  volatility of 42%;  risk-free  interest rate of 5.0%; and
expected life of 4 years.

The intrinsic value (the difference  between the price of the underlying  shares
and the exercise  price) of options  exercisable at April 30, 2008 was $143,400.
The total intrinsic value of options  exercised during the years ended April 30,
2007 and 2006 was $122,000 and $25,000. There were no options exercised in 2008.

Stock  options  granted  were issued  with an exercise  price at the fair market
value of the Company's stock at the date of grant. Accordingly,  no compensation
expense  was  recognized  with  respect  to the stock  option  plan in 2006.  In
addition, under SFAS No. 123(R) the compensation expense was not material to the
results of operations for 2008.

                                       51


(12) INCOME TAXES:
     -------------

The provision for income taxes consists of the following:

                                                                         Year Ended April 30,
                                                        -------------------------------------------------------
                                                             2008                2007                2006
                                                        ----------------    ---------------     ---------------
                                                                            (Thousands)
Current:
    Federal                                             $      5,511          $   18,228          $    9,735
    State and local                                             (812)              1,540                 823
                                                        ----------------    ---------------     ---------------
                                                        $      4,699              19,768              10,558
                                                        ----------------    ---------------     ---------------


Deferred:
    Federal                                             $      2,777               2,940               1,587
    State and local                                              309                 328                 176
                                                        ----------------    ---------------     ---------------
                                                               3,086               3,268               1,763
                                                        ----------------    ---------------     ---------------
Total provision for income taxes                        $      7,785          $   23,036          $   12,321
                                                        ================    ===============     ===============

The provision for income taxes has been allocated as follows:

                                                                         Year Ended April 30,
                                                        -------------------------------------------------------
                                                             2008                2007                2006
                                                        ----------------    ---------------     ---------------
                                                                            (Thousands)

Continuing operations                                   $      7,819          $    23,971         $  10,233
Discontinued operations                                          (34)                (935)            2,088
                                                        ----------------    ---------------     ---------------
Total provision for income taxes                        $      7,785          $    23,036         $  12,321
                                                        ================    ===============     ===============

The components of the net deferred income tax liability are as follows:

                                                                                    April 30,
                                                                       -------------------------------------
                                                                            2008                 2007
                                                                       ---------------      ----------------
                                                                                   (Thousands)
Deferred income tax assets:
    State tax loss carryforwards                                       $      3,679         $      3,359
    Accrued pension costs                                                       785                  450
    Federal NOL carryforward                                                  1,752                2,895
    Vacation accrual                                                          1,236                1,236
    Other                                                                      (285)               1,097
                                                                       ---------------      ----------------
    Total deferred income tax assets                                   $      7,167                9,037
                                                                       ---------------      ----------------

Deferred income tax liabilities:
    Real estate basis differences                                      $     (1,527)              (2,181)
    Reserve for periodical returns                                           (2,210)              (1,888)
    Depreciable assets                                                       (2,532)              (4,680)
    Deferred gains on investment assets                                      (7,019)              (5,150)
    Capitalized costs for financial reporting
     purposes, expensed for tax                                              (3,572)              (3,624)
                                                                       ---------------      ----------------
    Total deferred income tax liabilities                                   (16,860)             (17,523)
                                                                       ---------------      ----------------

Valuation allowance for realization of state tax
    loss carry forwards                                                      (2,665)              (2,663)
                                                                       ---------------      ----------------
 Net deferred income tax liability                                     $    (12,358)         $   (11,149)
                                                                       ===============      ================

                                       52


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,
                                                              --------------------------------------------------------
                                                                    2008                2007                2006
                                                              -----------------    ---------------     ---------------
                                                                                   (Thousands)
Computed tax provision at
  statutory rate                                              $         7,554      $       24,734      $     11,455
Increase (reduction) in tax resulting from:
  State income taxes, net of federal
   income tax effect                                                     (325)              1,296               552
   Real estate charitable land contribution                              (481)             (1,419)           (1,543)
   Other                                                                1,071                (640)             (231)
                                                              -----------------    ---------------    ----------------
Actual tax provision                                          $         7,819      $       23,971      $     10,233
                                                              =================    ===============    ================

Other in  2008  principally  includes  additions  related  to  unrecognized  tax
benefits and related interest from tax positions of prior years.

The Company has a federal  net  operating  loss  carryforward  of  approximately
$5,000,000  resulting  from the purchase price  allocation of Palm Coast,  which
will begin to expire in the fiscal  year ending  April 30,  2024.  In  addition,
$23,483,000 of goodwill associated with the Palm Coast acquisition (see Note 10)
is amortizable for tax purposes.

A valuation  allowance is provided  when it is  considered  more likely than not
that certain deferred tax assets will not be realized.  The valuation  allowance
relates entirely to net operating loss carryforwards in states where the Company
has no current  operations.  These net operating loss  carryforwards will expire
beginning in the fiscal year ending April 30, 2010 through  April 30, 2029.  The
deferred  tax  asset of  $3,679,000  related  to the state  net  operating  loss
carryforwards  expires  as  follows:  2010 -  $42,000;  2011 -  $17,000;  2012 -
$32,000; 2013 - $304,000; 2014 - $208,000; and thereafter - $3,076,000.

The Company adopted the provisions of FIN 48 effective May 1, 2007 (see Note 2).
The  implementation of FIN 48 did not have an impact on the Company's  financial
statements.  A reconciliation of the beginning and ending amount of unrecognized
tax benefits, excluding interest, is as follows (in thousands):

         Gross unrecognized tax benefits at May 1, 2007                       $    4,289
             Gross increases:
                Additions based on tax positions related to current year              54
                Additions based on tax positions of prior years                      880
                                                                              -----------
         Gross unrecognized tax benefits at April 30, 2008                    $    5,223
                                                                              ===========

(13) SHAREHOLDERS' EQUITY:
     ---------------------
The Company  recorded other  comprehensive  income (loss) of ($660,000) in 2008,
$1,210,000  in 2007 and  $1,904,000  in 2006 to  account  for the net  effect of
changes to the unfunded pension liability (see Note 11).

The Company from time to time reacquired its shares to be held as treasury stock
as part of a stock  repurchase  program.  During  2008,  the Board of  Directors
authorized the repurchase of up to 1,000,000  shares.  As a result,  the Company
reacquired 658,400 shares, all in open market transactions, for a total purchase
price,  including  commissions,  of  $21,363,000.  There were no treasury  stock
repurchases in 2007 or 2006.

(14) DISCONTINUED OPERATIONS:
     ------------------------
Income from discontinued operations in 2006 of $3,556,000,  net of tax, 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  during  2006.  In June  2007,  the  Company  settled  all  existing
litigation  involving  this  subsidiary  and  accrued  the  estimated  costs  of
settlement of  $1,591,000,  net of tax, in the fourth  quarter of 2007. In 2008,
additional costs of $57,000, net of tax, were incurred.


                                       53




(15) RESTRUCTURING AND FIRE RECOVERY COSTS:
     --------------------------------------

The Company has  announced a project to integrate  certain  aspects of the Kable
and Palm Coast  fulfillment  services  operations in order to improve  operating
efficiencies  and customer  service and also to reduce  costs.  This project has
resulted  in one  significant  workforce  reduction  that  occurred in the first
quarter  of 2008  together  with an  announced  plan in the  second  quarter  to
redistribute  the  fulfillment  services  work  performed  at the  Marion,  Ohio
facility. The Company incurred costs directly related to the integration project
of  $1,159,000  for the year  ended  April  30,  2008,  principally  related  to
severance and other consulting costs related to the integration.

On December 5, 2007 a warehouse of  approximately  38,000  square feet leased by
the Company in Oregon, Illinois was totally destroyed by an accidental fire. The
warehouse was used  principally  to store back issues of magazines  published by
certain  customers for whom the Company fills  back-issue  orders as part of its
services.

The Company has submitted  preliminary  claims to its insurance provider for its
property and for a business  interruption  claim  principally  consisting of its
lost  revenues  offset by reduced  expenses  through  April 30, 2008.  While the
Company  has  been  advanced  $500,000  for  replacement  of lost  property,  no
insurance  proceeds have been received on the business  interruption claim as of
April 30, 2008. In addition,  the Company was required to provide  insurance for
certain of those  customers  whose property was destroyed in the warehouse fire.
The Company does not believe the net effect of the outcome of claims  related to
materials of certain  publishers for whom it was required to provide  insurance,
together with any proceeds received from its property and business  interruption
claims,  will have any material  effect on its  financial  position,  results of
operations  and cash flows.  Due to the fire,  gross assets were written down by
$470,000,  along with  associated  accumulated  depreciation  on those assets of
about $440,000, resulting in a charge to operations of approximately $30,000. In
addition,  the Company has  recorded  other  charges to  operations  of $324,000
related to fire  recovery  costs for the year ended April 30, 2008,  principally
related to legal and other costs that are not covered by insurance.

(16) COMMITMENTS AND CONTINGENCIES:
     ------------------------------

     Land sale contracts
     -------------------

From  time-to-time,  the Company has  obligations to complete  development  work
under certain  sales that are  accounted for under the  percentage-of-completion
method (see Note 1).  At April 30, 2008, there were no revenues deferred pending
completion of development work.

     Non-cancelable leases
     ---------------------

The Company is obligated under  long-term,  non-cancelable  leases for equipment
and various real estate properties.  Certain real estate leases provide that the
Company will pay for taxes,  maintenance and insurance costs and include renewal
options.  Rental expense for 2008, 2007 and 2006 was  approximately  $9,087,000,
$8,295,000 and $8,596,000.

The total minimum rental  commitments for years  subsequent to April 30, 2008 of
$27,743,000  are due as follows:  2009 - $7,925,000;  2010 - $5,378,000;  2011 -
$3,548,000; 2012 - $3,388,000; 2013 - $3,046,000; and thereafter - $4,458,000.

     Lot exchanges
     -------------

In connection with certain  individual home site sales made prior to 1977 at Rio
Rancho, New Mexico, if water,  electric and telephone utilities have not reached
the lot site when a purchaser is ready to build a home, the Company is obligated
to exchange a lot in an area then serviced by such  utilities for the lot of the
purchaser,  without  cost  to  the  purchaser.  The  Company  has  not  incurred
significant costs related to the exchange of lots.


                                       54



(17) LITIGATION:
     -----------

A subsidiary  of Kable was one of a number of  defendants  in a lawsuit in which
the  plaintiff,  a former  wholesaler  no longer in  business,  alleged that the
Company and other national  magazine  distributors  and  wholesalers  engaged in
violations of the Robinson-Patman Act (which generally prohibits  discriminatory
pricing) that caused it to go out of business. The plaintiff sought damages from
the Kable defendant of approximately $15.2 million; any damages awarded would be
trebled. In September 2005, the Court granted the motion for summary judgment of
the  defendants,  including  Kable,  and  judgment  in favor of the  defendants,
including Kable, was entered.  The plaintiff filed an appeal of the judgment and
on March 25, 2008 the  appellate  court denied the appeal.  All time periods for
the  plaintiff  to seek further  review of the summary  judgment in favor of the
defendants have expired and plaintiff's case is over.

In June 2008 a lawsuit was brought  against the  Company's  Kable News  Company,
Inc.  subsidiary by the owner of a warehouse  building  leased by the subsidiary
that was totally destroyed in a fire in December 2007. An employment agency that
provided the subsidiary  with a temporary  employee who is alleged to have had a
role in starting  the fire is also named as a defendant.  Plaintiff  charges the
subsidiary with  negligence and willful and wanton  misconduct and seeks damages
in excess of $50,000.  The Company's  liability  insurance provides coverage for
the negligence  claim up to the policy limit,  which may or may not be more than
the full amount of plaintiff's  claimed damages,  which is unknown at this time.
Additionally, the insurance carrier has indicated it intends to deny coverage of
the  willful  and wanton  misconduct  claim.  The  Company  believes it has good
defenses to the  charges and  assertable  claims  against the other  parties for
their  conduct in the matter,  and  intends  vigorously  to defend the  lawsuit.
However,  the proceeding is in its very earliest stage and the Company is not in
a position to offer a prediction as to its outcome.

The Company and its  subsidiaries are involved in various other claims and legal
actions incident to their  operations  which, in the opinion of management based
in part upon  advice of counsel,  will not  materially  affect the  consolidated
financial position or results of operations of the Company and its subsidiaries.

(18) FAIR VALUE OF FINANCIAL INSTRUMENTS:
     ------------------------------------

The estimated fair value of financial  instruments is determined by reference to
various market data and other valuation techniques as appropriate.  The carrying
amounts of cash and cash equivalents, media services trade receivables and trade
payables approximate fair value because of the short maturity of these financial
instruments.  Debt that bears variable  interest rates indexed to prime or LIBOR
also  approximates  fair value as it reprices when market interest rates change.
The  estimated  fair  value  of the  Company's  long-term,  fixed-rate  mortgage
receivables  was  $11,878,000  and  $24,420,000   versus  carrying   amounts  of
$12,660,000  and $24,711,000 at April 30, 2008 and April 30, 2007. The estimated
fair value of the Company's  long-term,  fixed-rate notes payable was $2,358,000
and $3,834,000 versus carrying amounts of $2,311,000 and $3,835,000 at April 30,
2008 and April 30, 2007.

(19) INFORMATION ABOUT THE COMPANY'S OPERATIONS IN DIFFERENT
     -------------------------------------------------------
     INDUSTRY SEGMENTS:
     ------------------
The Company has identified three  reportable  segments in which it currently has
business  operations.  Real  Estate  operations  primarily  include  land  sales
activities,  which involve the obtaining of approvals and  development  of large
tracts of land for sales to homebuilders,  commercial users and others,  as well
as  investments in commercial and  investment  properties.  The Company's  Media
Services subsidiary has two identified segments, Newsstand Distribution Services
and  Fulfillment   Services.   Fulfillment   Services   operations  involve  the
performance of subscription and product fulfillment and other related activities
on behalf of various  publishers and other clients,  and Newsstand  Distribution
Services  operations involve the national and, to a small degree,  international
distribution and sale of periodicals to wholesalers.  Certain common expenses as
well as  identifiable  assets are allocated  among industry  segments based upon
management's  estimate of each  segment's  absorption.  Corporate  revenues  and
expenses  not  identifiable  with a  specific  segment  are shown as a  separate
segment in this presentation.

The accounting  policies of the segments are the same as those described in Note
1.  Summarized  data relative to the industry  segments in which the Company has
continuing operations is as follows (amounts in thousands):


                                       55


                                                                            Newsstand
                                          Real Estate      Fulfillment     Distribution
                                          Operations       Services          Services         Corporate        Consolidated
                                        -------------     ------------     ------------      ------------      -------------
Year ended April 30, 2008 (a):
Revenues                                $   33,073        $  125,780       $   12,916         $     292        $   172,061
Income from continuing operations           12,187            (1,413)           1,293             1,695             13,762
Provision (benefit) for income taxes
  from continuing operations                 6,932              (755)             812               830              7,819
Interest expense (income), net (b)               -             5,041           (1,571)           (2,458)             1,012
Depreciation and amortization                  135             9,511              872                 6             10,524
                                        -------------     ------------     ------------      ------------      -------------
EBITDA (c)                              $   19,254        $   12,384       $    1,406         $      73        $    33,117
                                        -------------     ------------     ------------      ------------      -------------

Goodwill                                $        -        $   50,246       $    3,893         $       -        $    54,139
Total assets                            $   94,610        $  135,335       $   51,297         $   3,709        $   284,951
Capital expenditures                    $    1,312        $    4,888       $      174         $       3        $     6,377

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

     (a)  Segment information  reported above does not include net income (loss)
          from  discontinued  operations of ($57,000) in 2008,  ($1,591,000)  in
          2007 and $3,556,000 in 2006.

     (b)  Interest expense, net includes  inter-segment  interest income that is
          eliminated in consolidation.

     (c)  The Company  uses EBITDA  (which AMREP  Corporation  defines as income
          from continuing  operations before interest expense, net, income taxes
          and  depreciation  and  amortization)  in  addition  to  income as key
          measures  of profit or loss for  segment  performance  and  evaluation
          purposes.



                                       56




(20) SELECTED QUARTERLY FINANCIAL DATA (Unaudited):
     ----------------------------------------------

                                                              (In thousands of dollars, except per share amounts)
                                                                                  Quarter Ended
                                                        ---------------------------------------------------------------

Year ended April 30, 2008:                                  July 31,       October 31,      January 31,      April 30,
                                                              2007            2007            2008             2008
                                                        --------------  ---------------  --------------  --------------
Revenues                                                 $    51,359     $     42,090     $    43,435     $    35,177

Gross profit                                                  15,057            9,829          10,529           4,893

Income from continuing operations                              6,320            3,467           3,446             529

Loss from operations of discontinued business,
net of taxes                                                     (57)               -               -               -
                                                        --------------  ---------------  --------------  --------------
Net income                                               $     6,263     $      3,467     $     3,446     $       529
                                                        ==============  ===============  ==============  ==============

Earnings per share - Basic and Diluted: (a)
  Continuing operations                                  $       .95     $        .55     $       .57     $       .09
  Discontinued operations                                       (.01)               -               -               -
                                                        --------------  ---------------  --------------  --------------
Total                                                    $       .94     $        .55     $       .57     $       .09
                                                        ==============  ===============  ==============  ==============

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

Income(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
                                                        ==============  ===============  ==============  ==============

(a) The sum of the quarters  does not equal the full year earnings per share due
to the  change  in  outstanding  shares  throughout  the year in 2008 and due to
rounding in 2007.




                                       57


Item 9. Changes in and Disagreements with Accountants on Accounting and
------- ---------------------------------------------------------------
        Financial Disclosure
        --------------------
None

Item 9A. 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 annual 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
management,  including the Company's principal executive and principal financial
officers or persons performing such 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.

The report called for by Item 308(a) of Regulation S-K is incorporated herein by
reference to Report of Management on Internal Control Over Financial  Reporting,
included in Part II, "Item 8. Financial  Statements and  Supplementary  Data" of
this report.  The attestation report called for by Item 308(b) of Regulation S-K
is incorporated  herein by reference to Report of Independent  Public Accounting
Firm on Internal Control Over Financial Reporting, included in Part II, "Item 8.
Financial Statements and Supplementary Data" of this report.

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.

Item 9B. Other Information
-------- -----------------
None

                                    PART III
                                    --------

Item 10. Directors, Executive Officers and Corporate Governance
-------- ------------------------------------------------------

The information set forth under the headings "Election of Directors", "The Board
of  Directors  and its  Committees"  and  "Section  16(a)  Beneficial  Ownership
Reporting  Compliance"  in the  Company's  Proxy  Statement  for its 2008 Annual
Meeting of Shareholders to be filed with the Securities and Exchange  Commission
(the "2008 Proxy Statement") is incorporated  herein by reference.  In addition,
information  concerning the Company's  executive  officers is included in Part I
above under the caption "Executive Officers of the Registrant".

Item 11. Executive Compensation
-------- ----------------------
The  information  set  forth  under  the  headings  "Compensation  of  Executive
Officers" and  "Compensation  of Directors" and the  subheadings  "Report of the
Compensation  and  Human  Resources   Committee"  and  "Compensation   Committee
Interlocks  and  Insider   Participation"   in  the  2008  Proxy   Statement  is
incorporated herein by reference.


                                       58


Item 12.  Security  Ownership of Certain  Beneficial  Owners and  Management and
--------  ----------------------------------------------------------------------
          Related Stockholder Matters
          ---------------------------

The information set forth under the headings  "Common Stock Ownership of Certain
Beneficial Owners and Management" and "Equity  Compensation Plan Information" in
the 2008 Proxy Statement is incorporated herein by reference.

Item  13. Certain   Relationships  and  Related   Transactions,   and  Director
--------- ---------------------------------------------------------------------
          Independence
          ------------
The  information  set forth under the headings  "The Board of Directors  and its
Committees"  and  "Certain   Transactions"  and  the  subheading   "Compensation
Committee  Interlocks and Insider  Participation" in the 2008 Proxy Statement is
incorporated herein by reference.

Item 14. Principal Accounting Fees and Services
-------- --------------------------------------
The information set forth under the subheadings  "Audit Fees" and  "Pre-Approval
Policies and Procedures" in the 2008 Proxy  Statement is incorporated  herein by
reference.




                                       59




                                     PART IV

Item 15. Exhibits and Financial Statement Schedules
-------- ------------------------------------------

(a)      1. Financial Statements. The following consolidated financial statements and
            ---------------------
supplementary financial information are filed as part of this report:

     AMREP Corporation and Subsidiaries:

-    Management's Report on Internal Control Over Financial Reporting

-    Report of Independent Registered Public Accounting Firm on Internal Control
     Over Financial Reporting dated July 14, 2008 - McGladrey & Pullen, LLP

-    Report of Independent Registered Public Accounting Firm dated July 14, 2008
     - McGladrey & Pullen, LLP

-    Consolidated Balance Sheets - April 30, 2008 and 2007

-    Consolidated Statements of Income for the Three Years Ended April 30, 2008

-    Consolidated  Statements of Shareholders'  Equity for the Three Years Ended
     April 30, 2008

-    Consolidated  Statements  of Cash Flows for the Three Years Ended April 30,
     2008

-    Notes to Consolidated Financial Statements

         2.  Financial Statement Schedules.  The following financial statement schedule
             ------------------------------
is filed as part of this report:

     AMREP Corporation and Subsidiaries:

-    Schedule II - Valuation and Qualifying Accounts

          Financial  statement  schedules  not included in this annual report on
     Form 10-K have been omitted because they are not applicable or the required
     information is shown in the financial statements or notes thereto.

         3.  Exhibits.
             ---------

          The exhibits filed in this report are listed in the Exhibit Index.

          The  Registrant  agrees,  upon request of the  Securities and Exchange
     Commission,  to file as an exhibit each  instrument  defining the rights of
     holders  of  long-term  debt  of  the   Registrant  and  its   consolidated
     subsidiaries  which has not been filed for the reason that the total amount
     of securities authorized thereunder does not exceed 10% of the total assets
     of the Registrant and its subsidiaries on a consolidated basis.

(b)      Exhibits.  See (a)3 above.
         ---------

(c)      Financial Statement Schedules.  See (a)2 above.
         ------------------------------



                                       60




                                   SIGNATURES
                                   ----------

Pursuant to the  requirements of Section 13 or 15(d) of the Securities  Exchange
Act of 1934,  the  Registrant  has duly  caused  this report to be signed on its
behalf by the undersigned, thereunto duly authorized.

                                                    AMREP CORPORATION
                                                     (Registrant)

Dated:  July 14, 2008                               By /s/ Peter M. Pizza
                                                       ------------------------
                                                       Peter M. Pizza
                                                       Vice President and Chief
                                                       Financial Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following  persons on behalf of  Registrant  and in
the capacities and on the dates indicated.


/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 14, 2008
  Officer and Principal
  Accounting Officer*
  Dated:  July 14, 2008

/s/ Edward B. Cloues  II                 /s/ Samuel N. Seidman
------------------------                 --------------------------
  Edward B. Cloues II                     Samuel N. Seidman
  Director                                Director
  Dated:  July 14, 2008                   Dated:  July 14, 2008

/s/ Lonnie A. Coombs                     /s/ James Wall
------------------------                 --------------------------
  Lonnie A. Coombs                        James Wall
  Director                                Director*
  Dated:  July 14, 2008                   Dated:  July 14, 2008

/s/ Nicholas G. Karabots                 /s/ Jonathan B, Weller
------------------------                 --------------------------
  Nicholas G. Karabots                    Jonathan B, Weller
  Director                                Director
  Dated:  July 14, 2008                   Dated:  July 14, 2008

                                         /s/ Michael P. Duloc
                                         --------------------------
                                          Michael P. Duloc
                                          President, Kable Media Services, Inc.*
                                          Dated:  July 14, 2008

-----------------
*The Registrant is a holding company that does substantially all of its business
through two indirect wholly-owned  subsidiaries (and their subsidiaries).  Those
indirect  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.




                                       61



                       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, 2008:
     Allowance for doubtful accounts
       (included in receivables - real
       estate operations on the
       consolidated balance sheet)            $        48      $       64      $          -       $         -      $      112
                                           ----------------  --------------- ----------------   --------------   --------------

     Allowance for estimated returns and
       doubtful accounts (included in
       receivables - magazine circulation
       operations on the consolidated
       balance sheet)
                                              $    53,606      $     3,521     $          -       $       542      $   56,585
                                            ---------------  --------------- ----------------   --------------   --------------

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

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.



                                       62


                                  EXHIBIT INDEX
                                  -------------

   NUMBER                                   ITEM
   ------                                   ----

    2.1   Agreement  and Plan of Merger by and among  AMREP  Corporation,  Kable
          Media Services,  Inc., Glen Garry  Acquisition,  Inc., Palm Coast Data
          Holdco,  Inc.,  Palm Coast Data LLC and the  Sellers  set forth on the
          signature page thereto, dated as of November 7, 2006 - Incorporated by
          reference to Exhibit 2.1 to  Registrant's  Current  Report on Form 8-K
          filed January 19, 2007.

    3.1   Certificate of  Incorporation,  as amended - Incorporated by reference
          to Exhibit  3.1 to  Registrant's  Registration  Statement  on Form S-3
          filed March 21, 2007.

    3.2   By-Laws,  as amended-  Incorporated  by  reference to Exhibit 3 (b) to
          Registrant's Quarterly Report on Form 10-Q filed December 14, 2006.

    4.1   Second  Amended and Restated Loan and Security  Agreement  dated as of
          January 16, 2007 among Kable Media Services, Inc., Kable News Company,
          Inc., Kable  Distribution  Services,  Inc.,  Kable News Export,  Ltd.,
          Kable News  International,  Inc., Kable  Fulfillment  Services,  Inc.,
          Kable Fulfillment Services of Ohio, Inc., Palm Coast Data Holdco, Inc.
          and Palm  Coast  Data LLC and  LaSalle  Bank  National  Association  -
          Incorporated  by  reference to Exhibit  10.1 to  Registrant's  Current
          Report on Form 8-K filed January 19, 2007.

    4.2   First  Modification  to Loan  Documents  dated as of January 18, 2008,
          modifying the Second Amended and Restated Loan and Security  Agreement
          dated as of January  16, 2007 among Kable News  Company,  Inc.,  Kable
          Distribution  Services,  Inc.,  Kable News  Export,  Ltd.,  Kable News
          International,   Inc.,  Kable   Fulfillment   Services,   Inc.,  Kable
          Fulfillment  Services of Ohio, Inc., Palm Coast Data Holdco,  Inc. and
          Palm Coast Data LLC, and LaSalle Bank National Association and related
          loan  documents  -  Incorporated  by  reference  to  Exhibit  10.1  to
          Registrant's Current Report on Form 8-K filed February 5, 2008.

    4.3   Loan Agreement  dated January 8, 2007 between AMREP Southwest Inc. and
          Compass  Bank  -   Incorporated   by  reference  to  Exhibit  10.1  to
          Registrant's Current Report on Form 8-K filed January 12, 2007.

    4.4   $25,000,000 Promissory Note (Revolving Line of Credit) dated September
          18, 2006 of AMREP Southwest Inc.  payable to the order of Compass Bank
          -  Incorporated  by  reference  to  Exhibit  10.2 to the  Registrant's
          Current Report on Form 8-K filed September 21, 2006.

    4.5   $14,180,455 Promissory Note (Term Note) dated January 8, 2007 of AMREP
          Southwest Inc.  payable to the order of Compass Bank - Incorporated by
          reference to Exhibit 10.3 to  Registrant's  Current Report on Form 8-K
          filed January 12, 2007.

    10.1  Non-Employee  Directors  Option  Plan,  as amended -  Incorporated  by
          reference to Exhibit 10 (i) to Registrant's Annual Report on Form 10-K
          for the fiscal year ended April 30, 1997.*

    10.2  Amended and Restated Distribution Agreement dated as of April 30, 2006
          between Kappa Publishing Group, Inc. and Kable Distribution  Services,
          Inc. -  Incorporated  by reference  to Exhibit 10 (d) to  Registrant's
          Annual Report on Form 10-K for the fiscal year ended April 30, 2006.**

    10.3  2006 Equity  Compensation Plan - Incorporated by reference to Appendix
          B to the  Registrant's  Proxy Statement for its 2006 Annual Meeting of
          Shareholders  forming a part of Registrant's  Definitive  Schedule 14A
          filed August 14, 2006.*

     21   Subsidiaries of Registrant - Filed herewith.

     23   Consent of McGladrey & Pullen, LLP - 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.

    32.1  Certification  required  by Rule  13a - 14 (b)  under  the  Securities
          Exchange Act of 1934 - Filed herewith.

-----------------------
* Management  contract or compensatory plan or arrangement in which directors or
officers participate.

**  Portions  of this  exhibit  have been  omitted  pursuant  to a  request  for
confidential  treatment  under Rule 24b-2 under the  Securities  Exchange Act of
1934.

                                       63