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What changed in AMREP CORP.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of AMREP CORP.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+104 added−118 removedSource: 10-K (2024-07-23) vs 10-K (2023-07-25)

Top changes in AMREP CORP.'s 2024 10-K

104 paragraphs added · 118 removed · 88 edited across 5 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeSales contracts also typically include a financing contingency that provides homebuyers with the right to cancel if they cannot obtain mortgage financing at specified interest rates within a specified period. Contracts may also include other contingencies, such as the sale of an existing home. The construction of homes is conducted under the supervision of the Company’s on-site construction field managers.
Biggest changeContracts may also include other contingencies, such as the sale of an existing home. The construction of homes is conducted under the supervision of the Company’s on-site construction field managers. Most construction work is performed by independent subcontractors under contracts that establish a specific scope of work at an agreed-upon price.
Impact fees are charges or assessments payable by homebuilders to local governing authorities in order to generate revenue for funding or recouping the costs of capital improvements or facility expansions necessitated by and attributable to the new development.
Impact fees are charges or assessments payable by homebuilders to local governing authorities in order to generate revenue for funding or recouping the costs of capital improvements or facility expansions necessitated by and attributable to new developments.
Similar to a public improvement district, the covenants are expected to reimburse the Company for certain on-site and off-site costs of developing the subject property by imposing an assessment on the real property owners subject to the covenants. The Company has accepted discounted prepayments of amounts due under the private infrastructure reimbursement covenants.
Similar to a public improvement district, the covenants are expected to reimburse the Company for certain on-site and off-site costs of developing the subject property by imposing an assessment on the real property owners subject to the covenants. The Company has accepted and may in the future accept discounted prepayments of amounts due under the private infrastructure reimbursement covenants.
The Company conducts a substantial portion of its business in Rio Rancho, New Mexico (“Rio Rancho”) and certain adjoining areas of Sandoval County, New Mexico. Rio Rancho is the third largest city in New Mexico with a population of approximately 108,000. Land Development As of April 30, 2023, the Company owned approximately 17,000 acres in Sandoval County, New Mexico.
The Company conducts a substantial portion of its business in Rio Rancho, New Mexico (“Rio Rancho”) and certain adjoining areas of Sandoval County, New Mexico. Rio Rancho is the third largest city in New Mexico with a population of approximately 111,000. Land Development As of April 30, 2024, the Company owned approximately 17,000 acres in Sandoval County, New Mexico.
The Company has accepted discounted prepayments of amounts due under the public improvement district. 1 Developed lots/acreage are any tracts of land owned by the Company that have been entitled with infrastructure work that is substantially complete. ​ 2 Acreage under development is real estate owned by the Company for which entitlement or infrastructure work is currently being completed.
The Company has accepted and may in the future accept discounted prepayments of amounts due under the public improvement district. 1 Developed lots/acreage are any tracts of land owned by the Company that have been entitled with infrastructure work that is substantially complete. ​ 2 Acreage under development is real estate owned by the Company for which entitlement or infrastructure work is currently being completed.
These matters may result in delays, may cause the Company to incur substantial compliance, remediation, mitigation and other costs, and can prohibit or severely restrict land development and homebuilding activity in environmentally sensitive areas. Human Capital Resources As of April 30, 2023, the Company employed 28 full-time employees.
These matters may result in delays, may cause the Company to incur substantial compliance, remediation, mitigation and other costs, and can prohibit or severely restrict land development and homebuilding activity in environmentally sensitive areas. Human Capital Resources As of April 30, 2024, the Company employed 42 employees, all of which were full-time.
The number of new construction single-family residential starts in Rio Rancho by the Company, the Company’s customers and other builders was 585 in 2023 and 876 in 2022. The development of residential, commercial and industrial properties requires, among other things, financing or other sources of funding, which may not be available.
The number of new construction single-family residential starts in Rio Rancho by the Company, the Company’s customers and other builders was 1,007 in 2024 and 588 in 2023. The development of residential, commercial and industrial properties requires, among other things, financing or other sources of funding, which may not be available.
Engineering work is performed by both the Company’s employees and outside firms, but development work is generally performed by outside contractors. The Company also provides limited landscaping services, generally servicing homebuilders and homeowners’ associations. The Company markets land for sale or lease both directly and through brokers.
Engineering work is performed by both the Company’s employees and outside firms, but development work is generally performed by outside contractors. The Company also provides landscaping services primarily to homebuilders. The Company markets land for sale or lease both directly and through brokers.
The Company competes with other owners and developers of land that offer for sale developed and undeveloped residential lots and sites for commercial and industrial use. ​ 1 The following table presents information on the large land development projects of the Company in New Mexico as of April 30, 2023: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Developed 1 ​ Under Development 2 ​ ​ ​ ​ ​ ​ Commercial ​ ​ Commercial ​ ​ ​ ​ Residential ​ / Industrial ​ Residential ​ / Industrial ​ Undeveloped 3 ​ ​ Lots ​ Acres ​ Acres ​ Acres ​ Acres Lomas Encantadas 103 — 198 6 — Hawk Site 89 — 103 129 — Hawk Adjacent ​ — ​ — ​ 44 ​ — ​ — Enchanted Hills/ Commerce Center — 29 — — — Papillon ​ — ​ — ​ — ​ — ​ 308 Paseo Gateway — — — — 290 La Mirada — — 7 2 — ​ Lomas Encantadas is located in the eastern section of Unit 20 in Rio Rancho.
The Company competes with other owners and developers of land that offer for sale developed and undeveloped residential lots and sites for commercial and industrial use. ​ 1 The following table presents information on the large land development projects of the Company in New Mexico as of April 30, 2024: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Developed 1 ​ Under Development 2 ​ ​ ​ ​ ​ ​ Commercial ​ ​ Commercial ​ ​ ​ ​ Residential ​ / Industrial ​ Residential ​ / Industrial ​ Undeveloped 3 ​ ​ Lots ​ Acres ​ Acres ​ Acres ​ Acres Lomas Encantadas 61 — 218 6 — Hawk Site 23 35 104 111 — Hawk Adjacent ​ — ​ — ​ 45 ​ — ​ — Enchanted Hills/ Commerce Center — 29 — — — Papillon ​ — ​ — ​ — ​ — ​ 693 Paseo Gateway — — — — 290 La Mirada 41 1 — — — ​ Lomas Encantadas is located in the eastern section of Unit 20 in Rio Rancho.
With respect to residential development, the Company generally focuses its sales efforts on a limited number of homebuilders, with 95% of 2023 developed residential land sale revenues having been made to four homebuilders.
With respect to residential development, the Company generally focuses its sales efforts on a limited number of homebuilders, with 100% of 2024 developed residential third-party land sale revenues having been made to three homebuilders.
Undeveloped acreage is real estate that can be sold “as is” (e.g., where no entitlement or infrastructure work has begun on such property). ​ 2 The Company instituted private infrastructure reimbursement covenants in Lavender Fields and on a portion of the property in Hawk Site.
Undeveloped acreage is real estate that can be sold “as is” (e.g., where no entitlement or infrastructure work has begun on such property). ​ 2 The Company instituted private infrastructure reimbursement covenants on various land development projects.
Infrastructure Reimbursement Mechanisms . A portion of the Lomas Encantadas subdivision and a portion of the Enchanted Hills subdivision are subject to a public improvement district. The public improvement district reimburses the Company for certain on-site and off-site costs of developing the subdivisions by imposing a special levy on the real property owners within the district.
The public improvement district reimburses the Company for certain on-site and off-site costs of developing the subdivisions by imposing a special levy on the real property owners within the district.
The following table presents information on certain small residential land development projects of the Company in New Mexico as of April 30, 2023: ​ ​ ​ ​ ​ ​ ​ ​ ​ Developed 1 ​ Under Development 2 ​ ​ ​ ​ Lots ​ Acres ​ Location Lavender Fields 15 — Bernalillo County, New Mexico Vista Entrada 6 — Eastern section of Unit 20 in Rio Rancho Tierra Contenta 30 — Santa Fe, New Mexico GeoPark ​ — ​ 8 ​ Santa Fe, New Mexico Northern Meadows J-1 ​ — ​ 3 ​ Southern section of Unit 22 in Rio Rancho ​ In addition to the property listed in the tables above, as of April 30, 2023, the Company held undeveloped property in Sandoval County, New Mexico of approximately 16,000 acres in high contiguous ownership areas and low contiguous ownership areas.
The following table presents information on certain small residential land development projects of the Company in New Mexico as of April 30, 2024: ​ ​ ​ ​ ​ ​ ​ ​ ​ Developed 1 ​ Under Development 2 ​ ​ ​ Lots Acres Location Tierra Contenta 13 — Santa Fe, New Mexico GeoPark ​ 15 ​ — ​ Santa Fe, New Mexico Park West Village ​ 24 ​ — ​ Southern section of Unit 22 in Rio Rancho Playa del Sur ​ — ​ 5.5 ​ Albuquerque, New Mexico ​ In addition to the property listed in the tables above, as of April 30, 2024, the Company held undeveloped property in Sandoval County, New Mexico of approximately 16,000 acres in either high contiguous ownership areas or low contiguous ownership areas.
Government restrictions, standards and regulations intended to reduce greenhouse gas emissions or potential climate change impacts may result in restrictions on land development or homebuilding in certain areas and may increase energy, transportation or raw material costs, which could reduce the Company’s profit margins and adversely affect the Company’s results of operations.
The Company may experience extended timelines for receiving required approvals from municipalities or other government agencies that can delay anticipated development and construction activities. 3 Government restrictions, standards and regulations intended to reduce greenhouse gas emissions or potential climate change impacts or related to the availability of water may result in restrictions on land development or homebuilding in certain areas and may increase energy, transportation or raw material costs, which could reduce the Company’s profit margins and adversely affect the Company’s results of operations.
The Company utilizes internal and external sales brokers for home sales. Model homes are generally used to showcase the Company’s homes and their design features. The Company provides built-to-order homes where construction of the homes does not begin until the customer signs the purchase agreement and speculative (“spec”) homes for homebuyers that require a home within a short time frame.
The Company provides built-to-order homes where construction of the homes does not begin until the customer signs the purchase agreement and speculative (“spec”) homes for homebuyers who require a home within a short time frame.
Sales contracts with homebuyers generally require payment of a deposit at the time of contract signing and sometimes additional deposits upon selection of certain options or upgrade features for their homes.
Sales contracts with homebuyers generally require payment of a deposit at the time of contract signing and sometimes additional deposits upon selection of certain options or upgrade features for their homes. Sales contracts also typically include a financing contingency that provides homebuyers with the right to cancel if they cannot obtain appropriate mortgage financing within a specified period.
Most construction work is performed by independent subcontractors under contracts that establish a specific scope of work at an agreed-upon price. Although the Company does not yet have sufficient historical experience to observe any seasonal effect on sales and construction activities, the Company does expect some seasonality in sales and construction activities which can affect the timing of closings.
Although the Company does not yet have sufficient historical experience or volume to observe any seasonal effect on sales and construction activities, the Company does expect some seasonality in sales and construction activities which can affect the timing of closings.
The Company offers a variety of home floor plans and elevations at different prices and with varying levels of options and amenities to meet the needs of homebuyers. The Company focuses on selling single-family detached and attached homes. The Company selects locations for homebuilding based on available land inventory and completion of a feasibility study.
In 2024, the Company sold its approximately 147-acre property in Brighton, Colorado. Homebuilding The Company operates a homebuilder in New Mexico. The Company offers a variety of home floor plans and elevations at different prices and with varying levels of options and amenities to meet the needs of homebuyers. The Company focuses on selling single-family detached and attached homes.
These regulations are complex and include building codes, land zoning and other entitlement restrictions, health and safety regulations, labor practices, marketing and sales practices, environmental regulations and various other laws, rules and regulations. The applicable governing authorities frequently have broad discretion in administering these regulations.
Regulatory and Environmental Matters The Company’s operations are subject to extensive regulations imposed and enforced by various federal, state and local governing authorities. These regulations are complex and include building codes, land zoning and other entitlement restrictions, health and safety regulations, labor practices, marketing and sales practices, environmental regulations and various other laws, rules and regulations.
Increased competitive conditions in the residential resale or rental market could decrease demand for new homes or unfavorably impact pricing for new homes.
Increased competitive conditions in the residential resale or rental markets could decrease demand for new homes or unfavorably impact pricing for new homes. Materials and Labor Generally, construction materials for the Company’s operations are available from numerous sources.
High contiguous ownership areas may be suitable for special assessment districts or city redevelopment areas that may allow for development under the auspices of local government. Low contiguous ownership areas may require the purchase of a sufficient number of adjoining lots to create tracts suitable for development or may be offered for sale individually or in small groups.
High contiguous ownership areas may be suitable for development, including as special assessment districts or city redevelopment areas that may allow for development under the auspices of local government.
The ability to consistently source qualified labor at reasonable prices remains challenging as labor supply 3 growth has not kept pace with construction demand. To partially protect against changes in construction costs, labor and materials costs are generally established prior to or near the time when related sales contracts are signed with homebuilders or homebuyers.
To partially protect against changes in construction costs, labor and materials costs are generally established prior to or near the time when related sales contracts are signed with homebuilders or homebuyers. However, the Company cannot determine the extent to which necessary building materials and labor will be available at reasonable prices in the future.
The Company receives credits, allowances and offsets applicable to impact fees in connection with certain off-site costs incurred by the Company in developing subdivisions, which the Company generally sells to homebuilders. Commercial Property .
The Company receives credits, allowances and offsets applicable to impact fees in connection with certain costs incurred by the Company in developing subdivisions, which the Company generally sells to homebuilders. Mineral Rights . The Company owns certain minerals and mineral rights in and under approximately 55,000 surface acres of land in Sandoval County, New Mexico. Other Real Estate Interests .
Generally, construction materials for the Company’s operations are available from numerous sources. However, the cost and availability of certain building materials, especially lumber, steel, concrete, copper and petroleum-based materials, is influenced by changes in local and global commodity prices and capacity as well as government regulation, such as government-imposed tariffs or trade restrictions on supplies such as steel and lumber.
However, the cost and availability of certain building materials is influenced by changes in local and global commodity prices and capacity as well as government regulation, such as government-imposed tariffs or trade restrictions. The ability to consistently source qualified labor at reasonable prices remains challenging as labor supply growth has not kept pace with construction demand.
Removed
Out of the eight commercial lots in the La Mirada subdivision, the Company sold four of the commercial lots in 2023 and two of the commercial lots in 2022.
Added
Low contiguous ownership areas may require the purchase of a sufficient number of adjoining lots to create tracts suitable for development or may be offered for sale individually or in small groups. Infrastructure Reimbursement Mechanisms . A portion of the Lomas Encantadas subdivision and a portion of the Enchanted Hills subdivision are subject to a public improvement district.
Removed
As of April 30, 2023, the Company is in the process of constructing a 2,800 square foot single tenant building on a commercial lot in the La Mirada subdivision and a 2,800 square foot single tenant building on a commercial lot in Unit 10 in Rio Rancho.
Added
The Company selects locations for homebuilding based on available land inventory and completion of a feasibility study. The Company utilizes internal and external sales brokers for home sales. Model homes are generally used to showcase the Company’s homes and their design features.
Removed
In 2022, the Company also sold approximately 1.8 acres of commercial property in the Enchanted Hills/Commerce Center subdivision. Mineral Rights . The Company owns certain minerals and mineral rights in and under approximately 55,000 surface acres of land in Sandoval County, New Mexico. Other Real Estate Interests .
Added
The applicable governing authorities frequently have broad discretion in administering these regulations.
Removed
The Company owns an approximately 160-acre property in Brighton, Colorado planned for 410 homes. In 2022, the Company sold its approximately 5-acre property in Parker, Colorado and 143,000 square foot warehouse and office facility located in Palm Coast, Florida. Homebuilding In fiscal year 2020, the Company commenced operations in New Mexico of its internal homebuilder, Amreston Homes.
Removed
Materials and Labor During 2023 and 2022, the Company experienced supply chain constraints, increases in the prices of building materials, shortages of skilled labor and delays in municipal approvals and inspections in both the land development business segment and homebuilding business segment, which caused delays in construction and the realization of revenues and increases in cost of revenues.
Removed
However, the Company cannot determine the extent to which necessary building materials and labor will be available at reasonable prices in the future. Regulatory and Environmental Matters The Company’s operations are subject to extensive regulations imposed and enforced by various federal, state and local governing authorities.
Removed
The Company may experience extended timelines for receiving required approvals from municipalities or other government agencies that can delay anticipated development and construction activities.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeItem 2. Properties The executive offices of the Company are located in approximately 1,400 square feet of leased space in an office building in Havertown, Pennsylvania. The offices of the Company’s real estate business are located in approximately 5,400 square feet of space in a 7,000 4 square foot office building in Rio Rancho owned by the Company.
Biggest changeItem 2. Properties The executive offices of the Company are located in approximately 1,400 square feet of leased space in an office building in Havertown, Pennsylvania. The offices utilized by the Company’s land development business segment and homebuilding business segment are located in approximately 7,000 square feet of space in an office building in Rio Rancho owned by the Company.
Added
The Company also leases approximately 2 acres of property in Rio Rancho for use as a storage facility.

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeItem 4. Mine Safety Disclosures Not applicable. Information about the Company’s Executive Officers Set forth below is certain information concerning persons who are the current executive officers of the Company. Christopher V. Vitale , age 47, has been a director of the Company since 2021 and has been President and Chief Executive Officer of the Company since 2017.
Biggest changeItem 4. Mine Safety Disclosures Not applicable. Information about the Company’s Executive Officers Set forth below is certain information concerning persons who are the current executive officers of the Company. Christopher V. Vitale , age 48, has been a director of the Company since July 2021 and has been President and Chief Executive Officer of the Company since 2017.
Uleau had been Controller of United Tectonics Corp., a construction services company, from 2016 to August 2018. From 2014 to 2016, Ms. Uleau was Financial Manager of Cushman and Wakefield. Prior to 2014, Ms. Uleau held various accounting positions.
Uleau had been Controller of United Tectonics Corp., a construction services company, from 2016 to 2018. From 2014 to 2016, Ms. Uleau was Financial Manager of Cushman and Wakefield. Prior to 2014, Ms. Uleau held various accounting positions.
Vitale was an attorney with the law firms of Morgan, Lewis & Bockius LLP and Sullivan & Cromwell LLP. Adrienne M. Uleau , age 55, has been Vice President, Finance and Accounting of the Company since March 2020. From August 2018 to March 2020, Ms. Uleau was Controller of the Company. Prior to joining the Company, Ms.
Vitale was an attorney with the law firms of Morgan, Lewis & Bockius LLP and Sullivan & Cromwell LLP. Adrienne M. Uleau , age 56, has been Vice President, Finance and Accounting of the Company since March 2020. From 2018 to March 2020, Ms. Uleau was Controller of the Company. Prior to joining the Company, Ms.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeEquity Compensation Plan Information See Item 12, which incorporates such information by reference from the Company’s Proxy Statement for its 2023 Annual Meeting of Shareholders to be filed with the Securities and Exchange Commission. 5 Dividend Policy The Company has paid no cash dividends on its common stock since fiscal year 2008.
Biggest changeEquity Compensation Plan Information See Item 12, which incorporates such information by reference from the Company’s Proxy Statement for its 2024 Annual Meeting of Shareholders to be filed with the Securities and Exchange Commission. ​
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities The Company’s common stock is traded on the New York Stock Exchange under the symbol “AXR”. On July 7, 2023, there were 260 holders of record of the common stock. The Company’s common stock is often thinly traded.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities The Company’s common stock is traded on the New York Stock Exchange under the symbol “AXR”. On July 19, 2024, there were 258 holders of record of the common stock. 5 The Company’s common stock is often thinly traded.
Among other reasons, the stock is thinly traded due to the fact that four of the Company’s shareholders beneficially owned approximately 55.8% of the outstanding common stock as of July 17, 2023 according to available information.
Among other reasons, the stock is thinly traded due to the fact that four of the Company’s shareholders beneficially owned approximately 59% of the outstanding common stock as of July 19, 2024 according to available information.
The average trading volume in the Company’s common stock on the New York Stock Exchange over the thirty-day trading period ending on April 30, 2023 was 8,540 shares per day.
The average trading volume in the Company’s common stock on the New York Stock Exchange over the thirty-day trading period ending on April 30, 2024 was 7,948 shares per day.
Consequently, the concurrence of the Company’s largest shareholders would generally be needed for any “interested shareholder” to acquire control of the Company, even if a change in control would be beneficial to the Company’s other shareholders.
Consequently, the concurrence of the Company’s largest shareholders would generally be needed for any “interested shareholder” to acquire control of the Company, even if a change in control would be beneficial to the Company’s other shareholders. Dividend Policy The Company has paid no cash dividends on its common stock since fiscal year 2008.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeThe following presents information on general and administrative expenses (dollars in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended April 30, ​ 2023 2022 Increase (decrease) Operations ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Land development ​ $ 2,843 ​ $ 3,258 $ (415) ​ (13) % Homebuilding ​ 1,016 ​ 878 ​ 138 ​ 16 % Corporate ​ 1,613 ​ 1,218 ​ 395 ​ 32 % Operations Total ​ $ 5,472 ​ $ 5,354 ​ ​ 118 ​ 2 % Pension settlement ​ $ 7,597 ​ $ — ​ 7,597 ​ (a) ​ ​ (a) Percentage not meaningful. ​ ● The change in land development general and administrative expenses for 2023 compared to 2022 was primarily due to a refund of certain property taxes.
Biggest changeThe following presents information on general and administrative expenses (dollars in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended April 30, ​ 2024 2023 Increase (decrease) Operations ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Land development ​ $ 3,677 ​ $ 2,843 $ 834 ​ 29 % Homebuilding ​ 1,214 ​ 1,016 ​ 198 ​ 20 % Corporate ​ 1,979 ​ 1,613 ​ 366 ​ 23 % Total ​ $ 6,871 ​ $ 5,472 ​ ​ 1,151 ​ 21 % Pension settlement ​ $ — ​ $ 7,597 ​ (7,597) ​ ​ (a) ​ (a) Percentage not meaningful. ​ ● The change in land development general and administrative expenses for 2024 compared to 2023 was primarily due increases in the accrual for property taxes and the payment of broker commissions for a commercial lease. ● The change in homebuilding general and administrative expenses for 2024 compared to 2023 was primarily due to expansion of the Company’s homebuilding operations. ● The change in corporate general and administrative expenses for 2024 compared to 2023 was primarily due to increases in pension benefit expenses in connection with termination of the pension plan and bank charges. ● The pension settlement general and administrative expense in 2023 was due to (a) the Company’s defined benefit pension plan paying certain lump sum payouts of pension benefits to former employees and (b) the transfer of nearly all remaining pension benefit liabilities to an insurance company through an annuity purchase.
The rising cost of housing due to increases in average sales prices in recent years and the recent increases in mortgage interest rates, coupled with general inflation in the U.S. economy and other macroeconomic factors, have placed pressure on overall housing affordability and have caused many potential homebuyers to pause and reconsider their housing choices.
The rising cost of housing due to increases in average sales prices in recent years and increases in mortgage interest rates, coupled with general inflation in the U.S. economy and other macroeconomic factors, have placed pressure on overall housing affordability and have caused many potential homebuyers to pause and reconsider their housing choices.
The Company recognized a non-cash pre-tax pension settlement general and administrative expense of $7,597,000 during 2023 due to (a) the Company’s defined benefit pension plan paying certain lump sum payouts of pension benefits to former employees and (b) the transfer of nearly all remaining pension benefit liabilities to an insurance company through an annuity purchase. Cash Flow .
The Company recognized a non-cash pre-tax pension settlement general and administrative expense of $7,597,000 during 2023 due to (a) the Company’s defined benefit pension plan paying certain lump sum payouts of pension benefits to former employees and (b) the transfer of nearly all remaining pension benefit liabilities to an insurance company through an annuity purchase.
For real estate projects under development, an estimate of future cash flows on an undiscounted basis is determined using estimated future expenditures necessary to complete such projects and using management’s best estimates about sales prices and holding periods.
For real estate projects under development, an estimate of future cash flows on an undiscounted basis is determined using estimated future expenditures necessary to complete 6 such projects and using management’s best estimates about sales prices and holding periods.
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.
CRITICAL ACCOUNTING 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.
As of April 30, 2023 and April 30, 2022, the Company did not have any off-balance sheet arrangements (as defined in Item 303(a)(4)(ii) of Regulation S-K). Recent Accounting Pronouncements . Refer to Note 1 to the consolidated financial statements contained in this annual report on Form 10-K for a discussion of recently issued accounting pronouncements.
Off-Balance Sheet Arrangements . As of April 30, 2024 and April 30, 2023, the Company did not have any off-balance sheet arrangements (as defined in Item 303(a)(4)(ii) of Regulation S-K). Recent Accounting Pronouncements . Refer to Note 1 to the consolidated financial statements contained in this annual report on Form 10-K for a discussion of recently issued accounting pronouncements.
The net cash provided by operating activities for 2023 was primarily due to cash generated from business operations and a reduction real estate inventory offset in part by an increase in investment assets and other assets and a reduction in accounts payable and accrued expenses, notes payable and income taxes payable.
The net cash provided by operating activities for 2023 was primarily due to cash generated from business operations offset in part by a net increase in real estate inventory and investment assets, an increase in other assets and a reduction in accounts payable and accrued expenses and income taxes payable. ● Investing Activities .
The benefit for income taxes for 2023 was primarily due to the income tax benefit related to the Company’s worthless stock deduction offset in part by income taxes for the amount of income before income taxes during the year. The provision for income taxes for 2022 correlated to the amount of income before income taxes during the year.
The provision for income taxes for 2024 correlated to the amount of income before income taxes during the year. The benefit for income taxes for 2023 was primarily due to the income tax benefit related to the Company’s worthless stock deduction offset in part by income taxes for the amount of income before income taxes during the year.
While construction and land costs remain elevated, the Company has been able to offset these cost increases through land and home price increases in 2023 and 2022 due to a strong pricing environment, which may not continue. The Company’s past performance may not be indicative of future results. Revenues .
While construction and land costs remain elevated, the Company has been able partially to offset these cost increases through land and home price increases in 2024 and 2023 due to a strong pricing environment, which may not continue. The Company’s past performance may not be indicative of future results. Revenues .
The Company expects the primary demand for funds in the future will be for the development and acquisition of land, construction of home and commercial projects and general and administrative expenses. The development and acquisition of land and construction of home and commercial projects is generally required to satisfy delivery obligations of developed land or finished homes to customers.
The Company expects the primary demand for funds in the future will be for the development and acquisition of land, construction of home and commercial projects and general and administrative expenses. In many instances, the development of land and construction of home and commercial projects is required to satisfy delivery obligations of developed land or finished homes to customers.
The Company believes these conditions will continue to impact the land development and homebuilding industries for at least the remainder of calendar year 2023.
The Company believes these conditions will continue to impact the land development and homebuilding industries for at least the remainder of calendar year 2024.
The development of additional lots 10 for sale, construction of homes or pursuing other real estate projects may require financing or other sources of funding, which may not be available on acceptable terms (or at all). If the Company is unable to obtain such financing, the Company’s results of operations could be adversely affected.
The development of additional lots for sale, construction of homes or commercial buildings for sale or lease or pursuing other real estate projects may require financing or other sources of funding, which may not be available on acceptable terms (or at all). If the Company is unable to obtain such financing, the Company’s results of operations could be adversely affected.
Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in or suggested by such forward-looking statements. ​ The forward-looking statements contained in this annual report on Form 10-K include, but are not limited to, statements regarding (1) the Company’s ability to finance its future working capital, land development, acquisition of land, homebuilding, commercial projects, general and administrative expenses and capital expenditure needs, (2) the Company’s expected liquidity sources, including the availability of bank financing for projects and the utilization of existing bank financing, (3) anticipated development of the Company’s real estate holdings, (4) the development and construction of possible future commercial properties to be marketed to tenants, (5) the designs, pricing and levels of options and amenities with respect to the Company’s homebuilding operations, (6) the amount and timing of reimbursements under, and the general effectiveness of, the Company’s public improvement districts and private infrastructure reimbursement covenants, (7) the number of planned residential lots in the Company’s subdivisions, (8) estimates of the Company’s exposure to warranty claims, estimates of the cost to complete of common land development costs and the estimated relative sales value of individual parcels of land in connection with the allocation of common land development costs, (9) the sale of a significant amount of undeveloped land in 2022 and the sale of the warehouse and office facilities located in Palm Coast, Florida not being indicative of future operating results and the Company’s share repurchase activity not being indicative of future financing activities, (10) estimates and assumptions used in determining future cash flows of real estate projects, (11) the conditions resulting in homebuyer affordability challenges persisting through calendar year 2023, (12) the backlog of homes under contract and in production, the dollar amount of expected sale revenues when such homes are closed and homes and buildings leased or intended to be leased to third parties, (13) the effect of recent accounting pronouncements, (14) contributions by the Company to the pension plan, the amount of future annual benefit payments to pension plan participants payable from plan assets, the appropriateness of valuation methods to determine the fair value of financial instruments in the pension plan and the expected return on assets in the pension plan, (15) the timing of recognizing unrecognized compensation expense related to shares of common stock issued under the AMREP Corporation 2016 Equity Compensation Plan, (16) the Company’s belief that its compensation package and benefits offered to employees are competitive with others in the industry, (17) the future issuance of deferred stock units to directors of the Company, (18) the future business conditions that may be experienced by the Company, including the pace of the Company’s housing starts and land development projects, (19) the dilution to earnings per share that outstanding options to purchase shares of common stock of the Company may cause in the future, (20) the adequacy of the Company’s facilities, (21) the materiality of claims and legal actions arising in the normal course of the Company’s business, (22) projections of future earnings for the future recoverability of deferred tax assets and state net operating losses that are not expected to be realizable, (23) the duration, effect and severity of any pandemic and (24) the measures that governmental authorities may take to address a pandemic which may precipitate or exacerbate one or more of the above-mentioned or other risks and significantly disrupt or prevent the Company from operating in the ordinary course for an extended period of time.
Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in or suggested by such forward-looking statements. ​ The forward-looking statements contained in this annual report on Form 10-K include, but are not limited to, statements regarding (1) the Company’s ability to finance its future working capital, land development, acquisition of land, homebuilding, commercial projects, general and administrative expenses and capital expenditure needs, (2) the Company’s expected liquidity sources, including the availability of bank financing for projects and the utilization of existing bank financing, (3) anticipated development of the Company’s real estate holdings, (4) the development and construction of possible future commercial properties to be marketed to tenants, (5) the designs, pricing and levels of options and amenities with respect to the Company’s homebuilding operations, (6) the amount and timing of reimbursements under, and the general effectiveness of, the Company’s public improvement districts and private infrastructure reimbursement covenants, (7) the number of planned residential lots in the Company’s subdivisions, (8) estimates of the Company’s exposure to warranty claims, estimates of the cost to complete of common land development costs and the estimated relative sales value of individual parcels of land in connection with the allocation of common land development costs, (9) the sale of the property located in Brighton, Colorado and the sale of two buildings leased to commercial tenants not being indicative of future operating results, (10) estimates and assumptions used in determining future cash flows of real estate projects, (11) the conditions resulting in homebuyer affordability challenges persisting through calendar year 2024, (12) the backlog of homes under contract and in production, the dollar amount of expected sale revenues when such homes are closed and homes and buildings leased or intended to be leased to third parties, (13) the effect of recent accounting pronouncements, (14) the timing of recognizing unrecognized compensation expense related to shares of common stock issued under the AMREP Corporation 2016 Equity Compensation Plan, (15) the Company’s belief that its compensation package and benefits offered to employees are competitive with others in the industry, (16) the future issuance of deferred stock units to directors of the Company, (17) the future business conditions that may be experienced by the Company, including the pace of the Company’s housing starts and land development projects, (18) the dilution to earnings per share that outstanding options to purchase shares of common stock of the Company may cause in the future, (19) the adequacy of the Company’s facilities, (20) the materiality of claims and legal actions, (21) projections of future earnings for the future recoverability of deferred tax assets and state net operating losses that are not expected to be realizable, (22) the duration, effect and severity of any pandemic and (23) the measures that governmental authorities may take to address a pandemic which may precipitate or exacerbate one or more of the above-mentioned or other risks and significantly disrupt or prevent the Company from operating in the ordinary course for an extended period of time.
The Company has no foreign sales. 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.
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.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 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, through its subsidiaries, is primarily engaged in two business segments: land development and homebuilding.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 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 two business segments: land development and homebuilding. The Company has no foreign sales.
Areas that require significant judgments and estimates to be made include: (1) land sale cost of revenues, net calculations, which are based on land development budgets and estimates of costs to complete; (2) cash flows, asset groupings and valuation assumptions in performing asset impairment tests of long-lived assets and assets held for sale; (3) actuarially determined defined benefit pension obligations and other pension plan accounting and disclosures; (4) risk assessment of uncertain tax positions; and (5) the determination of the recoverability of net deferred tax assets.
Areas that require significant judgments and estimates to be made include: (1) land sale cost of revenues, net calculations, which are based on land development budgets and estimates of costs to complete; (2) cash flows, asset groupings and valuation assumptions in performing asset impairment tests of long-lived assets and assets held for sale; (3) risk assessment of uncertain tax positions; and (4) the determination of the recoverability of net deferred tax assets.
In addition, in response to inflation, the Federal Reserve increased benchmark interest rates during 2023 and 2022 and has signaled it expects additional future interest rate increases, which has resulted in a significant increase in mortgage interest rates during 2023 and 2022, impacting home affordability and consumer sentiment and tempering demand for new homes and finished residential lots.
In addition, in response to inflation, the Federal Reserve increased benchmark interest rates during 2024 and 2023, which resulted in a significant increase in mortgage interest rates during 2024 and 2023, impacting home affordability and consumer sentiment and tempering demand for new homes and finished residential lots.
Notes payable decreased from $2,030,000 as of April 30, 2022 to $44,000 as of April 30, 2023, primarily due to principal debt repayments. Refer to Note 6 to the consolidated financial statements contained in this annual report on Form 10-K for detail regarding each of the Company’s notes payable.
Notes payable decreased from $44,000 as of April 30, 2023 to $35,000 as of April 30, 2024 due to principal debt repayments. Refer to Note 6 to the consolidated financial statements contained in this annual report on Form 10-K for detail regarding the Company’s notes payable. Asset and Liability Levels .
The Company’s home sale revenues consist of (dollars in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended April 30, ​ 2023 2022 Homes sold ​ 32 ​ 41 Average selling price ​ $ 525 ​ $ 331 ​ As of April 30, 2023, the Company had 18 homes in production, including 10 homes under contract, which homes under contract represented $5,640,000 of expected home sale revenues when closed, subject to customer cancellations and change orders.
The Company’s home sale revenues consist of (dollars in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended April 30, ​ 2024 2023 Homes sold ​ 36 ​ 32 Average selling price ​ $ 477 ​ $ 525 ​ As of April 30, 2024, the Company had 64 homes in production, including 20 homes under contract, which homes under contract represented $8,719,000 of expected home sale revenues when closed, subject to customer cancellations and change orders.
The Company believes that it has adequate cash, bank financing and cash flows from operations to provide for its anticipated spending in fiscal year 2024. COVID-19 .
The Company believes that it has adequate cash and cash equivalents, bank financing and cash flows from operations to provide for its anticipated spending in its fiscal year ending April 30, 2025.
Miscellaneous other revenues for 2023 primarily consisted of extension fees for purchase contracts, forfeited deposits and residential rental revenues.
Miscellaneous other revenues for 2023 primarily consist of extension fees for purchase contracts, forfeited deposits from land sale contracts and residential rental revenues. ​ Cost of Revenues .
The Company does not expect the sale of a significant amount of undeveloped land in 2022 to be indicative of the sale of such undeveloped land in the future. ● The change in home sale revenues for 2023 compared to 2022 was primarily due to an increase in average selling prices offset in part by a decrease in the number of homes sold as a result of decreases in demand (including from the affordability challenges described above), supply chain constraints, shortages of skilled labor and delays in municipal approvals and inspections.
The Company does not expect the sale of the property located in Brighton, Colorado to be indicative of future land sale revenues. ● The change in home sale revenues for 2024 compared to 2023 was primarily due to an increase in the number of homes sold offset in part by a decrease in average selling prices and by the affordability challenges described above, supply chain constraints and delays in municipal approvals and inspections.
Given the affordability challenges described above and the resulting impact on demand, the Company has increased sales incentives on certain homes classified as homebuilding model inventory or homebuilding construction in process, opportunistically leased completed homes and slowed the pace of housing starts and land development projects.
Given the affordability challenges described above and the resulting impact on demand, the Company has provided sales incentives on certain homes, reduced the size of lots and homes, opportunistically leased completed homes and slowed the pace of housing starts and land development projects.
Future economic conditions and the demand for land and homes are subject to continued uncertainty due to many factors, including the recent increase in mortgage interest rates, higher inflation, low supplies of new and existing home inventory available for sale, ongoing disruptions from supply chain challenges and labor shortages, the ongoing impact of the COVID-19 pandemic and government directives, and other factors.
Future economic conditions and the demand for land and homes are subject to continued uncertainty due to many factors, including changes in mortgage interest rates, inflation, supplies of new and existing home inventory available for sale, labor shortages and other factors.
Other income of $1,803,000 for 2023 consisted of the sale of all of the Company’s minerals and mineral rights in and under approximately 147 surface acres of land in Brighton, Colorado.
Other income of $1,803,000 for 2023 primarily consists of the sale of all of the Company’s minerals and mineral rights in and under approximately 147 surface acres of land in Brighton, Colorado. Income Taxes . The Company had a provision for income taxes of $1,735,000 for 2024 and a benefit for income taxes of $14,149,000 for 2023.
As a result of many factors, including the nature and timing of specific transactions and the type and location of land being sold, revenues, average selling prices and related gross margin from land sales can vary significantly from period to period and prior results are not necessarily a good indication of what may occur in future periods. ● The change in home sale cost of revenues for 2023 compared to 2022 was primarily due to location, size of homes, increases in the prices of building materials and shortages of skilled labor.
As a result of many factors, including the nature and timing of specific transactions and the type and location of land or homes being sold, revenues, average selling prices and related gross margins from land sales or home sales can vary significantly from period to period and prior results are not necessarily a good indication of what may occur in future periods. 9 General and Administrative Expenses .
If the excess of undiscounted cash flows over the carrying value of a particular asset group is small, there is a greater risk of future impairment and any resulting impairment charges could be material; ● defined benefit pension obligations and other pension plan accounting and disclosures are based upon numerous assumptions and estimates, including the expected rate of investment return on pension 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; ● the Company assesses risk for uncertain tax positions and recognizes the financial statement effects of a tax position when it is more likely than not that the position will be sustained upon examination by tax authorities; and ● the Company provides a valuation allowance against net deferred tax assets unless, based upon the available evidence, it is more likely than not that the deferred tax assets will be realized.
If the excess of undiscounted cash flows over the carrying value of a particular asset group is small, there is a greater risk of future impairment and any resulting impairment charges could be material; ● the Company assesses risk for uncertain tax positions and recognizes the financial statement effects of a tax position when it is more likely than not that the position will be sustained upon examination by tax authorities; and ● the Company provides a valuation allowance against net deferred tax assets unless, based upon the available evidence, it is more likely than not that the deferred tax assets will be realized.
All forward-looking statements speak only as of the date of this annual report on Form 10-K or, in the case of any document incorporated by reference, the date of that document. All subsequent written and oral forward-looking statements attributable to the Company or any person acting on behalf of the Company are qualified by the cautionary statements in this section.
All forward-looking statements speak only as of the date of this annual report on Form 10-K or, in the case of any document incorporated by reference, the date of that 13 document.
From April 30, 2022 to April 30, 2023, the change in land inventory in New Mexico was primarily due to land development activity and the acquisition and sale of land, the change in homebuilding model inventory was primarily due to the sale of homes offset in part by the completion of homes not yet sold and the change in homebuilding construction in process was primarily due to supply chain constraints, shortages of skilled labor and delays in municipal approvals and inspections causing construction cycle time to lengthen. ● Investment assets, net consist of (dollars in thousands): 12 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ April 30, ​ 2023 2022 Increase (decrease) Land held for long-term investment ​ $ 8,961 ​ $ 9,017 $ (56) ​ (1) % Owned real estate leased or intended to be leased ​ 4,802 ​ — ​ 4,802 ​ (a) ​ Less accumulated depreciation ​ (16) ​ — ​ (16) ​ (a) ​ Owned real estate leased or intended to be leased, net ​ 4,786 ​ — ​ 4,786 ​ (a) ​ Total ​ $ 13,747 ​ $ 9,017 ​ ​ ​ ​ ​ ​ ​ (a) Percentage not meaningful.
From April 30, 2023 to April 30, 2024, the change in land inventory in New Mexico was primarily due to land development activity and the acquisition and sale of land, the change in land inventory in Colorado was primarily due to the sale of an approximately 147-acre property in Brighton, Colorado, the change in homebuilding model and completed inventory was primarily due to the completion of homes not yet sold offset in part by the sale of homes and the change in homebuilding construction in process was primarily due to an increase in the number of homes that started construction. ● Investment assets, net consist of (dollars in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ April 30, ​ Increase ​ 2024 2023 (decrease) Land held for long-term investment ​ $ 9,200 ​ $ 8,961 $ 239 ​ 3 % Owned real estate leased or intended to be leased ​ 3,449 ​ 4,802 ​ (1,353) ​ (28) % Less accumulated depreciation ​ (98) ​ (16) ​ (82) ​ ​ (a) Owned real estate leased or intended to be leased, net ​ 3,351 ​ 4,786 ​ (1,435) ​ (30) % Total ​ $ 12,551 ​ $ 13,747 ​ ​ (1,196) ​ ​ ​ ​ (a) Percentage not meaningful.
During 2023 and 2022, the Company has experienced supply chain constraints, increases in the prices of building materials, shortages of skilled labor and delays in municipal approvals and inspections in both the land development business segment and homebuilding business segment, which caused delays in construction and the realization of revenues and increases in cost of revenues.
During 2024 and 2023, the Company experienced delays in municipal approvals and inspections and utility response times in both the land development business segment and homebuilding business segment, which caused delays in construction and the realization of revenues and increases in cost of revenues.
The net cash provided by operating 11 activities for 2022 was primarily due to cash generated from business operations offset in part by an increase in real estate inventory and investment assets and other assets and a reduction in accounts payable and accrued expenses and income taxes payable. ● Investing Activities .
The net cash provided by operating activities for 2024 was primarily due to cash generated from business operations, a net decrease in real estate inventory and investment assets and a decrease in other assets.
The Company’s land sale revenues consist of (dollars in thousands): ​ 7 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended April 30, 2023 ​ Acres Sold Revenue Revenue Per Acre 1 Developed ​ ​ ​ Residential 46.5 ​ $ 25,651 ​ $ 552 Commercial 3.8 ​ 4,832 ​ 1,272 Total Developed 50.3 ​ ​ 30,483 ​ ​ 606 Undeveloped 10.8 ​ 176 ​ 16 Total 61.1 ​ $ 30,659 ​ ​ 502 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended April 30, 2022 ​ Acres Sold Revenue Revenue Per Acre 1 Developed ​ ​ ​ Residential 47.6 ​ $ 21,973 ​ $ 462 Commercial 7.7 ​ 6,054 ​ 786 Total Developed 55.3 ​ ​ 28,027 ​ ​ 507 Undeveloped 1,233.5 ​ 8,173 ​ 7 Total 1,288.8 ​ $ 36,200 ​ ​ 28 ​ The changes in the revenue per acre of developed residential land, developed commercial land and undeveloped land for 2023 compared to 2022 were primarily due to the location and mix of lots sold.
The Company’s land sale revenues consist of (dollars in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended April 30, 2024 ​ Acres Sold Revenue Revenue Per Acre 1 Developed ​ ​ ​ Residential 27.8 ​ $ 18,522 ​ $ 666 Commercial 1.5 ​ 549 ​ 366 Total Developed 29.3 ​ ​ 19,071 ​ ​ 651 Undeveloped 222.9 ​ 7,754 ​ 35 Total 252.2 ​ $ 26,825 ​ ​ 106 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended April 30, 2023 ​ Acres Sold Revenue Revenue Per Acre 1 Developed ​ ​ ​ Residential 46.5 ​ $ 25,651 ​ $ 552 Commercial 3.8 ​ 4,832 ​ 1,272 Total Developed 50.3 ​ ​ 30,483 ​ ​ 606 Undeveloped 10.8 ​ 176 ​ 16 Total 61.1 ​ $ 30,659 ​ ​ 502 ​ The changes in the revenue per acre of developed residential land, developed commercial land and undeveloped land for 2024 compared to 2023 were primarily due to the location and mix of land sold.
The Company’s liquidity is affected by many factors, including some that are based on normal operations and some that are related to the real estate industry and the economy generally.
As a holding company, AMREP Corporation is dependent on its available cash and cash equivalents and on cash and cash equivalents from subsidiaries to pay expenses and fund operations. The Company’s liquidity is affected by many factors, including some that are based on normal operations and some that are related to the real estate industry and the economy generally.
Depreciation associated with owned real estate leased or intended to be leased was $16,000 for 2023; there was no such depreciation in 2022. ● From April 30, 2022 to April 30, 2023: o The change in other assets was primarily due to an increase in prepaid expenses related to a land development cash collateralized performance guaranty and stock compensation. o The change in deferred income taxes, net was primarily due to the income tax effect of the Company’s worthless stock deduction offset in part by the income tax effect of the amount of income before income taxes during the year.
Depreciation associated with owned real estate leased or intended to be leased was $82,000 for 2024 and $16,000 for 2023. ● From April 30, 2023 to April 30, 2024: o The change in other assets was primarily due to a decrease in prepaid expenses related to the termination of a land development cash collateralized performance guaranty and a decrease in prepaid stock compensation offset by an increase in property and equipment related to software and equipment purchases. o The change in deferred income taxes, net was primarily due to the income tax effect of the amount of income before income taxes during the year. o The change in prepaid pension costs was primarily due to the transfer of $547,000, which was the amount of residual assets (after satisfying any pension plan liabilities) following termination of the defined benefit pension plan, from the defined benefit pension plan to a 401(k) retirement plan available to eligible employees of the Company.
The following presents information on certain assets and liabilities (dollars in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ April 30, ​ 2023 2022 Increase (decrease) Real estate inventory ​ $ 65,625 ​ $ 67,249 $ (1,624) ​ (2) % Investment assets, net ​ 13,747 ​ 9,017 ​ 4,730 ​ 52 % Other assets ​ 3,249 ​ 1,882 ​ 1,367 ​ 73 % Deferred income taxes, net ​ 12,493 ​ 958 ​ 11,535 ​ (a) ​ Prepaid pension costs ​ 747 ​ 90 ​ 657 ​ (a) ​ Accounts payable and accrued expenses ​ 4,851 ​ 6,077 ​ (1,226) ​ (20) % Income taxes receivable (payable), net ​ 41 ​ (3,648) ​ 3,689 ​ (a) ​ ​ (a) Percentage not meaningful. ● Real estate inventory consists of (dollars in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ April 30, ​ 2023 2022 Increase (decrease) Land inventory in New Mexico ​ $ 59,361 ​ $ 59,374 $ (13) ​ (a) ​ Land inventory in Colorado ​ 3,445 ​ 3,434 ​ 11 ​ (a) ​ Homebuilding model inventory ​ 1,171 ​ 1,135 ​ 36 ​ 3 % Homebuilding construction in process ​ 1,648 ​ 3,306 ​ (1,658) ​ (50) % Total ​ $ 65,625 ​ $ 67,249 ​ ​ ​ ​ ​ ​ ​ (a) Percentage not meaningful.
The following presents information on certain assets and liabilities (dollars in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ April 30, ​ Increase ​ 2024 2023 (decrease) Real estate inventory ​ $ 65,983 ​ $ 65,625 $ 358 1 % Investment assets, net ​ 12,551 ​ 13,747 ​ (1,196) ​ (9) % Other assets ​ 2,990 ​ 3,249 ​ (259) ​ (8) % Deferred income taxes, net ​ 11,038 ​ 12,493 ​ (1,455) ​ (12) % Prepaid pension costs ​ — ​ 747 ​ (747) ​ ​ (a) Accounts payable and accrued expenses ​ 4,745 ​ 4,851 ​ (106) ​ (2) % Income taxes receivable, net ​ 27 ​ 41 ​ (14) ​ (34) % ​ (a) Percentage not meaningful. ● Real estate inventory consists of (dollars in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ April 30, ​ Increase ​ 2024 2023 (decrease) Land inventory in New Mexico ​ $ 57,527 ​ $ 59,361 $ (1,834) (3) % Land inventory in Colorado ​ — ​ 3,445 ​ (3,445) ​ ​ (a) Homebuilding model and completed inventory ​ 4,138 ​ 1,171 ​ 2,967 ​ ​ (a) Homebuilding construction in process ​ 4,318 ​ 1,648 ​ 2,670 ​ ​ (a) Total ​ $ 65,983 ​ $ 65,625 ​ ​ ​ ​ ​ ​ ​ (a) Percentage not meaningful.
The following presents information on the cash flows for the Company (dollars in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended April 30, ​ 2023 2022 Increase (decrease) ​ Net cash provided by operating activities ​ $ 6,389 ​ $ 15,476 $ (9,087) ​ (59) % Net cash used in investing activities ​ (131) ​ (1,195) ​ 1,064 ​ 89 % Net cash used in financing activities ​ (1,986) ​ (23,361) ​ 21,375 ​ 91 % Increase (decrease) in cash and cash equivalents ​ $ 4,272 ​ $ (9,080) ​ 13,352 ​ (a) ​ ​ (a) Percentage not meaningful. ​ ● Operating Activities .
The following presents information on the cash flows (dollars in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended April 30, ​ Increase ​ 2024 2023 (decrease) ​ Net cash provided by operating activities ​ $ 10,714 ​ $ 6,389 $ 4,325 ​ 68 % Net cash used in investing activities ​ (457) ​ (131) ​ (326) ​ ​ (a) Net cash used in financing activities ​ (9) ​ (1,986) ​ 1,977 ​ ​ (a) Increase in cash and cash equivalents ​ $ 10,250 ​ $ 4,272 ​ 5,978 ​ ​ (a) ​ (a) Percentage not meaningful. ​ ● Operating Activities .
While the Company attempts to pass on to its customers increases in costs through increased sales prices, market forces may limit the Company’s ability to do so.
As a result of these inflationary pressures, the Company has experienced significant increases in the prices of labor and certain materials. Inflation may also increase the Company’s financing costs. While the Company attempts to pass on to its customers increases in costs through increased sales prices, market forces may limit the Company’s ability to do so.
If this situation were to exist, the demand for homes produced by the Company’s homebuilding segment could decrease and the demand for the Company’s land by homebuilder customers could decrease.
If this situation were to exist, the demand for homes produced by the Company’s homebuilding segment could decrease and the demand for the Company’s land by homebuilder customers could decrease. Although the rate of inflation has been historically low in recent years, it increased significantly in 2024 and 2023.
Any epidemic, pandemic or similar serious public health issue, and the measures undertaken by governmental authorities to address it, could significantly disrupt or prevent the Company from operating its business in the ordinary course for an extended period.
Any epidemic, pandemic or similar serious public health issue, and the measures undertaken by governmental authorities to address it (including quarantines, shelter-in-place orders and similar mandates for many individuals to substantially restrict daily activities and for many businesses to curtail or cease normal operations), could significantly disrupt or prevent the Company from operating its business in the ordinary course for an extended period, including disruptions to the Company’s supply chain and shortages in labor and certain building components and materials.
The following presents information on cost of revenues (dollars in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended April 30, ​ 2023 2022 Increase (decrease) Land sale cost of revenues, net ​ $ 17,379 ​ $ 17,645 $ (266) ​ (2) % Home sale cost of revenues ​ 12,037 ​ 10,237 ​ 1,800 ​ 18 % Building sales and other cost of revenues ​ 361 ​ 4,387 ​ (4,026) ​ (92) % Total ​ $ 29,777 ​ $ 32,269 ​ (2,492) ​ (8) % ​ ● Land sale cost of revenues, net consist of (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ Year Ended April 30, ​ ​ 2023 2022 Land sale cost of revenues ​ $ 22,477 ​ $ 21,198 Less: ​ ​ Public improvement district reimbursements ​ (759) ​ (558) Private infrastructure covenant reimbursements ​ (626) ​ (184) Payments for impact fee credits ​ (3,713) ​ (2,811) Land sale cost of revenues, net ​ $ 17,379 ​ $ 17,645 ​ Land sale gross margins were 42% for 2023 compared to 51% for 2022.
The following presents information on cost of revenues (dollars in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended April 30, ​ 2024 2023 Increase (decrease) Land sale cost of revenues, net ​ $ 17,224 ​ $ 17,379 $ (155) ​ (1) % Home sale cost of revenues ​ 12,946 ​ 12,037 ​ 909 ​ 8 % Other cost of revenues ​ 6,726 ​ 361 ​ 6,365 ​ ​ (a) Total ​ $ 36,896 ​ $ 29,777 ​ 7,119 ​ 24 % ​ (a) Percentage not meaningful. ● Land sale cost of revenues, net consist of (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ Year Ended April 30, ​ ​ 2024 2023 Land sale cost of revenues ​ $ 20,415 ​ $ 22,477 Less: ​ ​ ​ ​ Public improvement district reimbursements ​ (681) ​ (759) Private infrastructure covenant reimbursements ​ (544) ​ (626) Payments for impact fee credits ​ (1,966) ​ (3,713) Land sale cost of revenues, net ​ $ 17,224 ​ $ 17,379 ​ Land sale gross margins were 36% for 2024 compared to 42% for 2023.
As a result, the impact of such public health issues and the related governmental actions could materially impact the Company’s financial position, results of operations and cash flows.
As a result, the impact of such public health issues and the related governmental actions could materially impact the Company’s financial position, results of operations and cash flows. Pension Plan . The Company’s defined benefit pension plan was terminated in 2024. The Company did not make any contributions to the pension plan during 2024 or 2023.
Refer to Note 13 to the consolidated financial statements contained in this annual report on Form 10-K for detail regarding the Company’s worthless stock deduction. LIQUIDITY AND CAPITAL RESOURCES The Company had cash and cash equivalents of $19,993,000 and $15,721,000 as of April 30, 2023 and April 30, 2022.
Refer to Note 13 to the consolidated financial statements contained in this annual report on Form 10-K for detail regarding the Company’s worthless stock deduction.
As of April 30, 2023, eight homes are leased to residential tenants and two buildings under construction have been leased to commercial tenants. Given the impact on demand as a result of affordability challenges described in Note 16 to the consolidated financial statements contained in this annual report on Form 10-K, the Company has opportunistically leased completed homes.
Refer to Note 3 to the consolidated financial statements contained in this annual report on Form 10-K for detail regarding investment assets. As of April 30, 2024, ten homes were leased to residential tenants. As of April 30, 2023, eight homes were leased to residential tenants and two buildings under construction were leased to commercial tenants.
The change in gross margin was primarily due to the location and mix of homes sold and to operational efficiencies. ● Building sales and other cost of revenues for 2023 consisted of cost of goods sold for landscaping services.
Home sale gross margins were 25% for 2024 compared to 28% for 2023. The change in gross margin was primarily due to the location, size and mix of homes sold. ● Other cost of revenues for 2024 consist of the costs associated with the sale of investment assets and cost of goods sold for landscaping services.
No such pension settlement general and administrative expense was incurred in 2022. Interest Income (Expense) . Interest income (expense), net increased to $8,000 for 2023 from $2,000 for 2022. Interest and loan costs of $57,000 and $224,000 were capitalized in real estate inventory for 2023 and 2022. Other Income .
Interest income, net was $823,000 for 2024 and $8,000 for 2023. Interest and loan costs of $2,000 were capitalized in real estate inventory for the year ended April 30, 2024. Interest and loan costs of $57,000 were capitalized in real estate inventory for the year ended April 30, 2023. Other Income . There was no other income in 2024.
The Company’s primary sources of funding for working capital requirements are cash flow from operations, bank financing for specific real estate projects, a revolving line of credit and existing cash balances. Land and homebuilding properties generally cannot be sold quickly, and the ability of the Company to sell properties has been and will continue to be affected by market conditions.
The Company’s primary sources of funding for working capital requirements are cash flows from operations, bank financing for specific real estate projects, a revolving line of credit, interest income and existing balances of cash and cash equivalents.
As of April 30, 2022, the Company had 38 homes in production, including 17 homes under contract, which homes under contract represented $8,713,000 of expected home sale revenues when closed, subject to customer cancellations and change orders. ● Building sales and other revenues consist of (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended April 30, ​ 2023 2022 Sales of buildings ​ $ — ​ $ 8,439 Oil and gas royalties ​ 146 ​ 276 Landscaping revenues ​ 585 ​ — Miscellaneous other revenues ​ 595 ​ 446 Total ​ $ 1,326 ​ $ 9,161 ​ ​ ​ ​ ​ ​ 1 Revenues per acre may not calculate precisely due to the rounding of revenues to the nearest thousand dollars. ​ 8 Sales of buildings during 2022 consisted of revenues from the sale of a 4,338 square foot, single tenant retail building in the La Mirada subdivision and from the sale of a 143,000 square foot warehouse and office facility located in Palm Coast, Florida.
As of April 30, 2023, the Company had 18 homes in production, including 10 homes under contract, which homes under contract represented $5,640,000 of expected home sale revenues when closed, subject to customer cancellations and change orders. ● Other revenues consist of (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended April 30, ​ 2024 2023 Sale of investment assets ​ $ 5,701 ​ $ — Oil and gas royalties ​ — ​ 146 Landscaping revenues ​ 1,186 ​ 585 Miscellaneous other revenues ​ 470 ​ 580 Total ​ $ 7,357 ​ $ 1,311 ​ ​ ​ 1 Revenues per acre may not calculate precisely due to the rounding of revenues to the nearest thousand dollars. ​ 8 Sale of investment assets for 2024 consists of the sale of two buildings leased to commercial tenants.
The following presents information on revenues (dollars in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended April 30, ​ 2023 2022 Increase (decrease) Land sale revenues ​ $ 30,659 ​ $ 36,200 $ (5,541) ​ (15) % Home sale revenues ​ 16,691 ​ 13,565 ​ 3,126 ​ 23 % Building sales and other revenues ​ 1,326 ​ 9,161 ​ (7,835) ​ (86) % Total ​ $ 48,676 ​ $ 58,926 ​ (10,250) ​ (17) % ​ ● The change in land sale revenues for 2023 compared to 2022 was primarily due to a decrease in revenue of developed commercial land and undeveloped land offset in part by an increase in revenue of developed residential land.
The following presents information on revenues (dollars in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended April 30, ​ 2024 2023 Increase (decrease) Land sale revenues ​ $ 26,825 ​ $ 30,659 $ (3,834) ​ (13) % Home sale revenues ​ 17,177 ​ 16,706 ​ 471 ​ 3 % Other revenues ​ 7,357 ​ 1,311 ​ 6,046 ​ (a) ​ Total ​ $ 51,369 ​ $ 48,676 ​ 2,693 ​ 6 % ​ (a) Percentage not meaningful. 7 ● The change in land sale revenues for 2024 compared to 2023 was primarily due to a decrease in revenues from the sale of developed land offset in part by an increase in revenues from the sale of undeveloped land.
In making this determination, the Company projects its future earnings (including currently unrealized gains on real estate inventory) for the future recoverability of net deferred tax assets. 6 RESULTS OF OPERATIONS Year Ended April 30, 2023 Compared to Year Ended April 30, 2022 For 2023, the Company had net income of $21,790,000, or $4.11 per diluted share, compared to net income of $15,862,000, or $2.21 per diluted share, in 2022.
In making this determination, the Company projects its future earnings (including currently unrealized gains on real estate inventory) for the future recoverability of net deferred tax assets.
The net cash used in investing activities for each of 2023 and 2022 was primarily due to an increase in capital expenditures of property and equipment, including the acquisition in 2022 of a 7,000 square foot office building in Rio Rancho from which the Company’s real estate business now operates ● Financing Activities .
The net cash used in investing activities each of 2024 and 2023 was due to an increase in capital expenditures for property and equipment. 11 ● Financing Activities . The net cash used in financing activities for each of 2024 and 2023 was primarily due to principal debt repayments.
The change in gross margin was primarily due to the location, size and mix of property sold (including the sale of 1,233.5 acres in 2022 versus 10.8 acres in 2023 of undeveloped land with a low associated land sale cost of revenues) offset in part by lower than estimated costs in 2022 associated with certain completed projects.
The change in gross margin was primarily due to higher than estimated costs associated with certain completed projects and the location, size and mix of property sold (including the sale of a 147-acre property in Brighton, Colorado in 2024 with an associated land sale cost of revenues of $4,007,000). ● The change in home sale cost of revenues for 2024 compared to 2023 was primarily due to the number, location, size and mix of homes sold and increases in the prices of building materials and skilled labor.
The Company recorded, net of tax, other comprehensive income of $5,743,000 for 2023 and $50,000 for 2022 reflecting the change in accrued pension costs during each period net of the related deferred tax and unrecognized prepaid pension amounts. Off-Balance Sheet Arrangements .
The Company recorded, net of tax, other comprehensive income of $60,000 for 2024 and $5,743,000 for 2023 reflecting the change in accrued pension costs during each period net of the related deferred tax and unrecognized prepaid pension amounts. o The change in accounts payable and accrued expenses was primarily due to an increase in accrued property taxes offset by a decrease in homebuilder customer deposits. o The change in taxes receivable, net was primarily due to the payment of taxes and the accrual of state income taxes payable related to the amount of income before income taxes for 2024.
Many of the factors that will determine the Company’s future results are beyond the ability of management to control or predict.
All subsequent written and oral forward-looking statements attributable to the Company or any person acting on behalf of the Company are qualified by the cautionary statements in this section. Many of the factors that will determine the Company’s future results are beyond the ability of management to control or predict.
The Company did not record any non-cash impairment charges on real estate inventory or investment assets in 2023 or 2022.
There was no such pension settlement general and administrative expense in 2024. The Company did not record any non-cash impairment charges on real estate inventory or investment assets in 2024 or 2023. Due to volatility in market conditions and development costs, the Company may experience future impairment charges. Interest Income, net .
AMREP Corporation is a holding company that conducts substantially all of its operations through subsidiaries. As a holding company, AMREP Corporation is dependent on its available cash and on cash from subsidiaries to pay expenses and fund operations.
Government Securities ​ 19,229 Restricted Cash ​ 547 Total ​ $ 30,241 ​ As of April 30, 2023, the Company had cash of $19,993,000, no cash equivalents and no restricted cash. 10 AMREP Corporation is a holding company that conducts substantially all of its operations through subsidiaries.
Removed
The Company sold 1,196 acres of contiguous undeveloped land in Sandoval County, New Mexico in 2022, representing $7,107,000 of revenue, to one purchaser.
Added
RESULTS OF OPERATIONS Year Ended April 30, 2024 Compared to Year Ended April 30, 2023 For 2024, the Company had net income of $6,690,000, or $1.25 per diluted share, compared to net income of $21,790,000, or $4.11 per diluted share, in 2023.
Removed
The Company does not expect the sale of the warehouse and office facilities located in Palm Coast, Florida to be indicative of future sales of such properties since the Company has no other similar properties. Landscaping revenues consisted of landscaping services, generally servicing homebuilders and homeowners’ associations, provided by the Company.
Added
During 2024, the Company reduced the number and scope of its active land development projects and delayed proceeding with certain new land development projects due to market headwinds and uncertainty and an increase in entitlement and infrastructure delays as compared to 2023.
Removed
Miscellaneous other revenues for 2022 primarily consisted of rent received from a tenant at a building in Palm Coast, Florida and tenants at a shopping center in Albuquerque, New Mexico, a non-refundable option payment and proceeds from the sale of equipment. ​ Cost of Revenues .
Added
This may result in reduced developed residential revenues in the Company’s land development business segment during the Company’s fiscal year ending April 30, 2025 as compared to 2024.
Removed
Despite such increase in home sale cost of revenues, home sale gross margins were 28% for 2023 compared to 25% for 2022.
Added
Revenues from the sale of undeveloped land include the sale of a 147-acre property in Brighton, Colorado in 2024, representing $7,200,000 of revenue, to one purchaser.
Removed
Building sales and other cost of revenues for 2022 consisted of expenses associated with the sale of a 143,000 square foot warehouse and office facility located in Palm Coast, Florida and the sale of a 4,338 square foot, single tenant retail building in the La Mirada subdivision. 9 General and Administrative Expenses .
Added
The Company does not expect the sale of the two buildings leased to commercial tenants to be indicative of future sales of investments assets. Oil and gas royalties consist of amounts received from the lease of minerals and mineral rights in and under approximately 147 surface acres of land in Brighton, Colorado.
Removed
Due to volatility in market conditions and development costs, the Company may experience future impairment charges. ● The change in homebuilding general and administrative expenses for 2023 compared to 2022 was primarily due to expansion of the Company’s homebuilding operations. ● The change in corporate general and administrative expenses for 2023 compared to 2022 was primarily due to increases in pension benefit expenses, payroll and professional services offset in part by decreases in office rent and expenses and depreciation. ● The pension settlement general and administrative expense was due to (a) the Company’s defined benefit pension plan paying certain lump sum payouts of pension benefits to former employees and (b) the transfer of nearly all remaining pension benefit liabilities to an insurance company through an annuity purchase.
Added
In 2023, the Company sold such minerals and mineral rights. Landscaping revenues consist of landscaping services provided by the Company primarily to homebuilders. Miscellaneous other revenues for 2024 primarily consist of extension fees for purchase contracts and residential rental revenues.
Removed
Other income of $261,000 for 2022 primarily consisted of $185,000 received in connection with the bankruptcy of a warranty provider, $45,000 of debt forgiveness with respect to a note payable and $30,000 received from a life insurance policy for a retired executive of the Company. Income Taxes .
Added
The costs associated with the sale of investment assets primarily represented the costs to construct two buildings leased to commercial tenants, which costs were higher than the costs projected at the time the Company committed to each construction project. Other cost of revenues for 2023 consists of cost of goods sold for landscaping services.
Removed
The Company had a benefit for income taxes of $14,149,000 for 2023 compared to a provision for income taxes of $5,704,000 for 2022.
Added
LIQUIDITY AND CAPITAL RESOURCES As of April 30, 2024, the Company had cash, cash equivalents and restricted cash as follows (in thousands): ​ ​ ​ ​ ​ Cash, Cash ​ ​ Equivalents and ​ ​ Restricted Cash Cash ​ $ 10,465 U.S.
Removed
For instance, in March 2020, the World Health Organization declared COVID-19 a global pandemic, resulting in extraordinary and wide-ranging actions taken by public health and governmental authorities to contain and combat the outbreak and spread of COVID-19, including quarantines, shelter-in-place orders and similar mandates for many individuals to substantially restrict daily activities and for many businesses to curtail or cease normal operations.
Added
Land and homebuilding properties generally cannot be sold quickly, and the ability of the Company to sell properties has been and will continue to be affected by market conditions.
Removed
These restrictions had an adverse impact on the Company beginning in the spring of 2020. As effective treatment and mitigation measures for COVID-19 advanced, economic activity gradually resumed and demand for new homes improved significantly.
Added
There were no such charges in 2024. During 2024, the Company transferred $547,000, which was the amount of residual assets (after satisfying any pension plan liabilities) following termination of the defined benefit pension plan, from the defined benefit pension plan to a 401(k) retirement plan available to eligible employees of the Company.
Removed
The effects of the pandemic on economic activity, combined with the strong demand for new homes, caused many disruptions to the Company’s supply chain and shortages in certain building components and materials, as well as labor shortages.
Added
This amount is recognized as restricted cash on the Company’s balance sheet and is available for future awards to eligible employees. Cash Flow .
Removed
These conditions caused construction cycles to lengthen and while the Company’s business is now fully functioning, some of those conditions continue to impact the Company’s operations and financial performance. There is continuing uncertainty regarding how long COVID-19 and its resultant effect on the economy will continue to impact the Company’s supply chain and operations.
Added
Given the impact on 12 demand as a result of affordability challenges, the Company has opportunistically leased completed homes.
Removed
The Company’s operational and financial performance could be impacted by a resurgence in the pandemic and any containment or mitigation measures put in place as a result of the resurgence, all of which are highly uncertain, unpredictable and outside the Company’s control.

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