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What changed in AMREP CORP.'s 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of AMREP CORP.'s 2022 and 2023 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 2023 report.

+111 added−147 removedSource: 10-K (2023-07-25) vs 10-K (2022-07-21)

Top changes in AMREP CORP.'s 2023 10-K

111 paragraphs added · 147 removed · 82 edited across 5 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeThe following table presents information on the small land development projects of the Company in New Mexico as of July 1, 2022: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Developed 1 ​ Under Development 2 ​ ​ ​ ​ ​ ​ ​ Residential ​ Residential ​ ​ ​ ​ ​ ​ ​ Lots ​ Planned Lots ​ Acres ​ Location Lavender Fields 43 — — Bernalillo County, New Mexico ​ ​ ​ ​ Vista Entrada 12 — — Eastern section of Unit 20 in Rio Rancho ​ ​ ​ ​ Tierra Contenta 50 — — Santa Fe, New Mexico ​ ​ ​ ​ GeoPark ​ — ​ 42 ​ 8 ​ Santa Fe, New Mexico ​ ​ ​ ​ ​ In addition to the property listed in the tables above, as of July 1, 2022, the Company held undeveloped property in New Mexico of approximately 16,000 acres, approximately half of which the Company had less than 50% contiguous ownership.
Biggest changeThe 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.
Government restrictions, standards or 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.
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.
High contiguous ownership areas may be suitable for special assessment districts or city redevelopment areas that may allow for future 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 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.
Materials and Labor During 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 have caused delays in construction and the realization of revenues and increases in cost of revenues.
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.
Substantially all 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.
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.
The number of new construction single-family residential starts in Rio Rancho by the Company, the Company’s customers and other builders was 876 in 2022 and 1,139 in 2021. 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 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.
With respect to residential development, the Company generally focuses its sales efforts on a limited number of homebuilders, with 99% of 2022 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 95% of 2023 developed residential land sale revenues having been made to four homebuilders.
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 July 1, 2022, the Company employed 22 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, 2023, the Company employed 28 full-time employees.
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 104,000. Land Development As of July 1, 2022, 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 108,000. Land Development As of April 30, 2023, the Company owned approximately 17,000 acres in Sandoval County, New Mexico.
Out of the eight expected commercial lots in the La Mirada subdivision, the Company sold two of the commercial lots in 2022.
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.
The Company instituted private infrastructure reimbursement covenants in Lavender Fields and on a portion of the property in Hawk Site. 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.
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.
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 July 1, 2022: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Developed 1 ​ Under Development 2 ​ ​ ​ ​ ​ ​ Commercial ​ ​ ​ Commercial ​ ​ ​ ​ Residential ​ / Industrial ​ Residential ​ / Industrial ​ Undeveloped 3 ​ ​ Lots ​ Acres ​ Planned Lots ​ Acres ​ Acres ​ Acres Lomas Encantadas 27 — 630 135 4 — Hawk Site 109 — 633 138 147 — Hawk Adjacent ​ — ​ — ​ 214 ​ 35 ​ — ​ — Enchanted Hills/ Commerce Center — 29 — — — — Papillon ​ — ​ — ​ — ​ — ​ — ​ 295 Paseo Gateway — — — — — 298 La Mirada — — 66 7 7 — ​ 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, 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.
Engineering work is performed by both the Company’s employees and outside firms, but all development work is performed by outside contractors. 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 limited landscaping services, generally servicing homebuilders and homeowners’ associations. The Company markets land for sale or lease both directly and through brokers.
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 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.
Other Real Estate Interests . 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.
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.
The Company has accepted discounted prepayments of amounts due under the private infrastructure reimbursement covenants. ​ 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.
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.
As of July 1, 2022, the Company is in the process of constructing two 2,835 square foot, single tenant buildings – the first on a commercial lot in the La Mirada subdivision and the second on a commercial lot in Unit 10 in Rio Rancho.
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.
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 Company has accepted discounted prepayments of amounts due under the public improvement district.
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 Company owns certain minerals and mineral rights in and under approximately 55,000 surface acres of land in Sandoval County, New Mexico.
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 .
Acreage under development is real estate owned by the Company for which entitlement or infrastructure work is currently being completed. However, there is no assurance that the acreage under development will be developed because of the nature and cost of the approval and development process and market demand for a particular use.
However, there is no assurance that the acreage under development will be developed because of the nature and cost of the approval and development process and market demand for a particular use. In addition, the mix of residential and commercial acreage under development may change prior to final development.
There is no assurance that undeveloped acreage will be developed because of the nature and cost of the approval and development process and market demand for a particular use. 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 Commercial Property .
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.
In addition, the mix of residential and commercial acreage under development may change prior to final development. The development of this acreage will require significant additional financing or other sources of funding, which may not be available. ​ 3.
The development of this acreage will require significant additional financing or other sources of funding, which may not be available. ​ 3 There is no assurance that undeveloped acreage will be developed because of the nature and cost of the approval and development process and market demand for a particular use.
Removed
In 2022, the Company sold 1,233.5 acres of undeveloped property in Sandoval County, New Mexico. 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.
Added
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.
Removed
In 2022, the Company also sold approximately 1.8 acres of commercial property in the Enchanted Hills/Commerce Center subdivision. In 2021, the Company constructed and sold a 14,000 square foot, single tenant retail building in the Las Fuentes at Panorama Village subdivision in Rio Rancho. Mineral Rights .
Added
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 .
Removed
The Company owns certain minerals and mineral rights in and under approximately 147 surface acres of land in Brighton, Colorado leased to a third party for as long as oil or gas is produced and marketed in paying quantities from the property or for additional limited periods of time if the lessee undertakes certain operations or makes certain de minimis shut-in royalty payments.
Removed
The lessee has pooled various minerals and mineral rights, including the Company’s minerals and mineral rights, for purposes of drilling and extraction.
Removed
After applying the ownership and royalty percentages of the pooled minerals and mineral rights, the lessee is required to pay the Company a royalty on oil and gas produced from the pooled property of 1.42% of the proceeds received by the lessee from the sale of such oil and gas, and such royalty will be charged with 1.42% of certain post-production costs associated with such oil and gas.
Removed
In 2021, the Company sold its 61,000 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
The Company utilizes third-party sales brokers for the majority of home sales. Model homes are generally used to showcase the Company’s homes and their design features.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeWhile the ultimate results of these other 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. ​
Biggest changeWhile 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. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

5 edited+0 added−0 removed1 unchanged
Biggest changeUleau 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. In 2012, Ms. Uleau declared bankruptcy in connection with unsecured credit card debt.
Biggest changeUleau 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.
From 2014 to September 2017, Mr. Vitale was Executive Vice President, Chief Administrative Officer and General Counsel of the Company and, from 2013 to 2014, he was Vice President and General Counsel of the Company. Prior to joining the Company, Mr.
From 2014 to 2017, Mr. Vitale was Executive Vice President, Chief Administrative Officer and General Counsel of the Company and, from 2013 to 2014, he was Vice President and General Counsel of the Company. Prior to joining the Company, Mr.
Vitale was an attorney with the law firms of Morgan, Lewis & Bockius LLP and Sullivan & Cromwell LLP. Adrienne M. Uleau , age 54, 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 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.
The executive officers are elected or appointed by the board of directors of the Company or its appropriate subsidiary to serve until the appointment or election and qualification of their successors or their earlier death, resignation or removal. ​ PART II
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 of their successors or their earlier death, resignation or removal. ​ PART II
Item 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 46, has been a director of the Company since 2021 and has been President and Chief Executive Officer of the Company since September 2017.
Item 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.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeConsequently, 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. 5 Equity Compensation Plan Information See Item 12, which incorporates such information by reference from the Company’s Proxy Statement for its 2022 Annual Meeting of Shareholders to be filed with the Securities and Exchange Commission.
Biggest changeConsequently, 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.
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 18, 2022, there were 264 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 7, 2023, there were 260 holders of record of the common stock. 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 54% of the outstanding common stock as of July 18, 2022 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 55.8% of the outstanding common stock as of July 17, 2023 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, 2022 was 11,596 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, 2023 was 8,540 shares per day.
Dividend Policy The Company has paid no cash dividends on its common stock since fiscal year 2008. The Company may consider dividends from time-to-time in the future in light of conditions then existing, including earnings, financial condition, cash position, capital requirements and other needs. No assurance is given that there will be any such future dividends declared.
The Company may consider dividends from time-to-time in the future in light of conditions then existing, including earnings, financial condition, cash position, capital requirements and other needs. No assurance is given that there will be any such future dividends declared. ​
Removed
Share Repurchases Refer to Note 15 to the consolidated financial statements contained in this annual report on Form 10-K for detail regarding the Company’s share repurchase activity.
Added
Equity 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.
Removed
The following table sets forth all purchases made by or on behalf of the Company or any “affiliated purchaser” as defined in Rule 10b-18(a)(3) under the Exchange Act, of shares of common stock of the Company during each month within the three months ended April 30, 2022: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total ​ Average ​ Total Number of Shares ​ Maximum Number of ​ Number of Price Purchased as Part of Shares that May Yet Be ​ Shares Paid Per Publicly Announced Purchased Under the Plans Period Purchased Share Plans or Programs or Programs (1) February 1, 2022 – February 28, 2022 — ​ — — — March 1, 2022 – March 31, 2022 2,096,061 (1) ​ $ 10.45 — — April 1, 2022 – April 30, 2022 — ​ — — — Total 2,096,061 ​ $ 10.45 — — ​ (1) In March 2022, the Company repurchased 2,096,061 shares of common stock of the Company at a price of $10.45 per share in a privately negotiated transaction.
Removed
As of the date of the repurchase, the repurchased shares were retired and returned to the status of authorized but unissued shares of common stock. The share repurchase was not completed pursuant to a publicly announced share repurchase program of the Company. ​

Item 7. Management's Discussion & Analysis

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

49 edited+26 added−55 removed20 unchanged
Biggest changeThe 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, homebuilding and capital expenditure needs, (2) the Company’s expected liquidity sources, including the amount of principal available for borrowing under the Company’s financing arrangements, (3) anticipated future 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 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) 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, (9) estimates and assumptions used in determining future cash flows of real estate projects, (10) the availability of bank financing for projects and the utilization of existing bank financing, (11) the backlog of homes under contract and in production and the dollar amount of expected sale revenues when such homes are closed, (12) the effect of recent accounting pronouncements, (13) contributions by the Company to the pension plan, the amount of future annual benefit payments to pension plan participants payable from plan assets, the investment mix between equity securities and fixed income securities seeks to achieve a desired return in the pension plan, the appropriateness of valuation methods to determine the fair value of financial instruments in the pension plan, the expected return on assets in the pension plan, the expected long-term rate of return on assets in the pension plan, the effect of changes in the weighted average discount interest rate on the amount of pension plan liabilities and the effect of changes in the investment rate of return on pension plan assets with respect to pension expense, (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, (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 arising in the normal course of the Company’s business, (21) the state net operating losses that are not expected to be realizable, (22) the negative impact of the COVID-19 pandemic on the Company’s financial position and ability to continue operations at normal levels or at all, (23) the duration, effect and severity of the COVID-19 pandemic and (24) the measures that governmental authorities may take to address the COVID-19 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.
Biggest changeTherefore, 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.
Areas that require significant judgments and estimates to be made include: (1) land sale cost of revenues 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) 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.
The most critical assumptions made in arriving at these accounting estimates include the following: ● land sale cost of revenues 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; ● when events or changes in circumstances indicate the carrying value of an asset may not be recoverable, a test for asset impairment may be required.
The most critical assumptions made in arriving at these accounting estimates include the following: ● land sale cost of revenues, net 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; ● when events or changes in circumstances indicate the carrying value of an asset may not be recoverable, a test for asset impairment may be required.
Actual results could differ from those estimates. 6 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.
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.
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, 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 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.
As of April 30, 2022 and April 30, 2021, 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.
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.
The development of additional lots for sale, construction of homes or pursuing other real estate projects will 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 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.
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 earned from a life insurance policy for a retired executive of the Company.
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 .
During 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 have caused delays in construction and the realization of revenues and increases in cost of revenues.
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.
The Company did not record any non-cash impairment charges on real estate inventory or investment assets in 2022 or 2021.
The Company did not record any non-cash impairment charges on real estate inventory or investment assets in 2023 or 2022.
LIQUIDITY AND CAPITAL RESOURCES 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.
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.
The pension plan liabilities were determined using a weighted average discount interest rate of 3.97% per year as of April 30, 2022 and 2.48% per year as of April 30, 2021, which are based on the FTSE Pension Discount Curve as of such dates as it corresponds to the projected liability requirements of the pension plan.
The pension plan liabilities were determined using a weighted average discount interest rate of 4.51% per year as of April 30, 2023 and 3.97% per year as of April 30, 2022, which are based on the FTSE Pension Discount Curve as of such dates as it corresponds to the projected liability requirements of the pension plan.
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.
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.
Subsequently, extraordinary and wide-ranging actions were 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.
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.
Although the rate of inflation has been historically low in recent years, it has increased significantly in 2022 and the Company is currently experiencing historically significant increases in the prices of labor and certain materials as a result of this increase as well as the COVID-19 pandemic and increased demand for new homes.
Although the rate of inflation has been historically low in recent years, 13 it increased significantly in 2023 and 2022 and the Company has and is experiencing significant increases in the prices of labor and certain materials as a result of this increase and increased demand for new homes. Inflation may also increase the Company’s financing costs.
The Company recorded, net of tax, other comprehensive income of $50,000 and $1,844,000 in 2022 and 2021, reflecting the change in accrued pension costs in each year 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 $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 .
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 10 operating in the ordinary course for an extended period and could have a significant adverse impact on the Company’s financial statements.
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.
Under generally accepted accounting principles, the Company’s defined benefit pension plan was overfunded as of April 30, 2022 by $90,000, with $18,054,000 of assets and $17,964,000 of liabilities, and was underfunded as of April 30, 2021 by $476,000, with $21,102,000 of assets and $21,578,000 of liabilities.
Under generally accepted accounting principles, the Company’s defined benefit pension plan was overfunded as of April 30, 2023 by $747,000, with $1,030,000 of assets and $283,000 of liabilities, and was overfunded as of April 30, 2022 by $90,000, with $18,054,000 of assets and $17,964,000 of liabilities.
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.
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.
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 average 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. ● Home sale cost of revenues for 2022 were higher than 2021 by $7,653,000.
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.
The Company’s home sale revenues consisted of: ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended April 30, ​ 2022 2021 Homes sold ​ 41 ​ 14 Average selling price ​ $ 331,000 ​ $ 220,000 ​ 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 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, ​ 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 pension plan is subject to minimum IRS contribution requirements, but these requirements can be satisfied by the use of the pension plan’s existing credit balance. No cash contributions were required during 2022. The Company made voluntary contributions to the pension plan of $1,847,000 during 2021. Cash Flow .
The pension plan is subject to minimum IRS contribution requirements, but these requirements can be satisfied by the use of the pension plan’s existing credit balance. No cash contributions to the pension plan were required during 2023 or 2022 and the Company did not make any contributions to the pension plan during 2023 or 2022.
Investing Activities . Net cash used in investing activities for 2022 was higher than 2021 by $1,190,000 primarily due to the acquisition 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 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 .
To the extent the sources of capital described above are insufficient to meet its needs, the Company may conduct public or private offerings of securities, dispose of certain assets or draw on existing or new debt facilities.
Further, the Company regularly evaluates property available for purchase from third parties for possible acquisition and development by the Company. To the extent the sources of capital described above are insufficient to meet its needs, the Company may conduct public or private offerings of securities, dispose of certain assets or draw on existing or new debt facilities.
Building sales and other cost of revenues for 2021 consisted of expenses associated with the sale of a 14,000 square foot, single tenant retail building in the Las Fuentes at Panorama Village subdivision in Rio Rancho and the sale of a 61,000 square foot warehouse and office facility located in Palm Coast, Florida. General and Administrative Expenses .
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 .
While construction and land costs remain elevated, the Company has been able to offset these cost increases through land and home price increases in 2022 due to the strong pricing environment.
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 .
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 14 document.
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.
The following presents information on the cash flows for the Company (dollars in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended April 30, ​ % Increase ​ 2022 2021 (Decrease) ​ Net cash provided by operating activities ​ $ 15,476 ​ $ 12,609 23 % Net cash used in investing activities ​ (1,195) ​ (5) (a) ​ Net cash used in financing activities ​ (23,361) ​ (5,305) (a) ​ (Decrease) increase in cash, cash equivalents and restricted cash ​ $ (9,080) ​ $ 7,299 (a) ​ ​ (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 Company expects the primary demand for funds in the short-term and long-term future will be for the development and acquisition of land, construction of home and commercial projects and general and administrative expenses.
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.
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. Refer to Note 15 to the consolidated financial statements contained in this annual report on Form 10-K for detail regarding the Company’s share repurchase activity.
Refer to Note 15 to the consolidated financial statements contained in this annual report on Form 10-K for detail regarding the Company’s share repurchase activity. The Company does not expect the Company’s share repurchase activity to be indicative of its future activity in this area. Asset and Liability Levels .
The increase in the average selling price per acre of undeveloped land in 2022 compared to 2021 was primarily due to the location and mix of property sold and increased demand in the market. 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.
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.
Interest Income (Expense) . Interest income (expense), net increased to $2,000 for 2022 from $(40,000) for 2021. Interest and loan costs of $224,000 and $105,000 were capitalized in real estate inventory for the years ending April 30, 2022 and April 30, 2021. Other Income .
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 .
Land held for long-term investment represents property located in areas that are not planned to be developed in the near term and that has not been offered for sale in the normal course of business. In 2022, the Company sold 1,233.5 acres of undeveloped property in Sandoval County, New Mexico categorized as land held for long-term investment.
Land held for long-term investment represents property located in areas that are not planned to be developed in the near term and that has not been offered for sale in the normal course of business. Owned real estate leased or intended to be leased represents homes and buildings leased or intended to be leased to third parties.
Net cash used in financing activities for 2022 was higher than 2021 by $18,056,000 primarily due to the Company’s share repurchase activity.
The net cash used in financing activities for 2023 was primarily due to principal debt repayments. The net cash used in financing activities for 2022 was primarily due to the Company’s share repurchase activity and principal debt repayments offset in part by the proceeds from debt financing.
The gross margin increase was primarily due to the location, size and mix of property sold (including the sale of 1,233.5 acres in 2022 versus 83.3 acres in 2021 of undeveloped land with a low associated land sale cost of revenues) and the demand for lots by builders resulting in higher revenue per developed lot.
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.
Net cash provided by operating activities for 2022 was higher than 2021 by $2,867,000 primarily due to (i) an increase in the Company’s net income, accounts payable and accrued expenses and taxes payable and (ii) a decrease in the amount of investment assets and pension costs, partially offset by (a) a decrease in the amount of deferred income taxes and (b) an increase in the amount of real estate inventory.
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 Company believes that it has adequate cash, bank financing and cash flows from operations to provide for its anticipated spending in fiscal year 2023. COVID-19 Impact and Response . In March 2020, the World Health Organization declared the novel strain of coronavirus (COVID-19) a global pandemic and recommended containment and mitigation measures worldwide.
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 .
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.
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.
If the Company is unable to raise sales prices enough to compensate for higher costs, or if mortgage interest rates increase significantly, the Company’s revenues, gross margins and net income could be adversely affected. OTHER In November 2021, the Company entered into an employment agreement with Christopher V. Vitale. Mr.
If the Company is unable to raise sales prices enough to compensate for higher costs, or if mortgage interest rates increase significantly, the Company’s revenues, gross margins and net income could be adversely affected. FORWARD-LOOKING STATEMENTS The Private Securities Litigation Reform Act of 1995 provides a safe harbor for forward-looking statements made by or on behalf of the Company.
Small Business Administration. 9 Income Taxes . The Company had a provision for income taxes of $5,704,000 for 2022 compared to a provision for income taxes of $2,643,000 for 2021. The provision for income taxes correlated to the amount of income before income taxes during each year.
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.
Building sales and other revenues consisted of (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended April 30, ​ 2022 2021 Sales of buildings and other land ​ $ 8,439 ​ $ 9,493 Oil and gas royalties ​ 276 ​ 135 Infrastructure reimbursements ​ 1,189 ​ 1,228 Miscellaneous other revenues ​ 446 ​ 959 ​ ​ $ 10,350 ​ $ 11,815 ​ Sales of buildings and other land 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, 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.
The following presents information on certain asset and liability levels (dollars in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ April 30, ​ % Increase ​ 2022 2021 (Decrease) Real estate inventory ​ $ 67,249 ​ $ 55,589 21 % Investment assets, net ​ 9,017 ​ 13,582 (34) % Other assets ​ 1,882 ​ 645 (a) ​ Deferred income taxes, net ​ 958 ​ 2,749 (a) ​ Accounts payable and accrued expenses ​ 6,077 ​ 4,458 36 % Taxes payable, net ​ 3,648 ​ 95 (a) ​ Prepaid (accrued) pension costs ​ 90 ​ (476) (a) ​ ​ (a) Percentage not meaningful. ● Real estate inventory increased from April 30, 2021 to April 30, 2022 by $11,660,000.
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.
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.
Many of the factors that will determine the Company’s future results are beyond the ability of management to control or predict.
The Company’s land sale revenues were as follows (dollars in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended April 30, 2022 ​ Year Ended April 30, 2021 ​ ​ ​ ​ ​ ​ ​ Revenue ​ ​ ​ ​ ​ ​ Revenue ​ Acres Sold Revenue Per Acre 1 Acres Sold Revenue Per Acre 1 Developed ​ ​ ​ ​ ​ Residential 47.6 ​ $ 24,337 ​ $ 511 ​ 50.0 ​ $ 24,503 ​ $ 490 Commercial 7.7 ​ 6,054 ​ 785 ​ 0.4 ​ 134 ​ 335 Total Developed 55.3 ​ ​ 30,391 ​ ​ 549 ​ 50.4 ​ 24,637 ​ 489 Undeveloped 1,233.5 ​ 8,173 ​ 7 ​ 83.3 ​ 538 ​ 6 Total 1,288.8 ​ $ 38,564 ​ $ 30 ​ 133.7 ​ $ 25,175 ​ $ 188 ​ The increase in the average selling price per acre of developed residential land in 2022 compared to 2021 was primarily due to the location and mix of property sold and increased demand for lots by builders.
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 following presents information on general and administrative expenses for the Company’s operations (dollars in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended April 30, ​ % Increase ​ 2022 2021 (Decrease) Land development ​ $ 3,258 ​ $ 2,532 29 % Homebuilding ​ 878 ​ 626 40 % Corporate ​ 1,218 ​ 2,262 (46) % ​ ​ $ 5,354 ​ $ 5,420 (1) % ​ ● Land development general and administrative expenses for 2022 were higher than 2021 by $726,000 primarily due to an increase in real estate taxes.
The 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.
Due to volatility in market conditions and development costs, the Company may experience future impairment charges. ● Homebuilding general and administrative expenses for 2022 were higher than 2021 by $252,000 primarily due to expansion of the Company’s homebuilding operations. ● Corporate general and administrative expenses for 2022 were lower than 2021 by $1,044,000 primarily due to reduced pension benefit expenses, depreciation and professional fees.
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.
Vitale an option to purchase 50,000 shares of common stock of the Company under the AMREP Corporation 2016 Equity Compensation Plan. Refer to Note 11 to the consolidated financial statements contained in this annual report on Form 10-K for additional detail about this option.
Refer to Note 2 to the consolidated financial statements contained in this annual report on Form 10-K for detail regarding real estate inventory.
The gross margin increase was primarily due to the location and mix of homes sold and to efficiencies gained during the expansion of the Company’s homebuilding operations. ● Building sales and other cost of revenues for 2022 consisted of expenses associated with the sale of a 4,338 square foot, single tenant retail building in the La Mirada subdivision and the sale of a 143,000 square foot warehouse and office facility located in Palm Coast, Florida.
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.
The following presents information on cost of revenues for the Company’s operations (dollars in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended April 30, ​ % Increase ​ 2022 2021 (Decrease) Land sale cost of revenues ​ $ 21,198 ​ $ 17,296 23 % Home sale cost of revenues ​ 10,237 ​ 2,584 (a) ​ Building sales and other cost of revenues ​ 4,387 ​ 5,722 (23) % ​ (a) Percentage not meaningful. ● Land sale cost of revenues for 2022 were higher than 2021 by $3,902,000.
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.
Removed
RESULTS OF OPERATIONS Year Ended April 30, 2022 Compared to Year Ended April 30, 2021 For 2022, the Company had net income of $15,862,000, or $2.21 per diluted share, compared to net income of $7,392,000, or $0.95 per diluted share, in 2021. Revenues .
Added
As discussed in more detail below, during 2023, the Company recognized a non-cash income tax benefit of $16,071,000 as a result of a worthless stock deduction related to its former fulfillment services business and a non-cash pre-tax pension settlement general and administrative expense of $7,597,000 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.
Removed
The following presents information on revenues for the Company’s operations (dollars in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended April 30, % Increase ​ 2022 2021 (Decrease) Land sale revenues ​ $ 38,564 ​ $ 25,175 53 % Home sale revenues ​ 13,565 ​ 3,079 (a) ​ Building sales and other revenues ​ 10,350 ​ 11,815 (12) % Total revenues ​ $ 62,479 ​ $ 40,069 56 % ​ (a) Percentage not meaningful.
Added
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.
Removed
The Company’s past performance may not be indicative of future results. 7 ● Land sale revenues for 2022 were higher than 2021 by $13,389,000 primarily due to the sale of a significant amount of undeveloped land, the sale of developed commercial land and increased demand for lots by builders.
Added
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.
Removed
The increase in the average selling price per acre of developed commercial land in 2022 compared to 2021 was primarily due to the location and mix of property sold.
Added
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.
Removed
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. ● Home sale revenues for 2022 were higher than 2021 by $10,486,000 due to the expansion of the Company’s homebuilding operations.
Added
The Company believes these conditions will continue to impact the land development and homebuilding industries for at least the remainder of calendar year 2023.
Removed
As of April 30, 2021, the Company had 33 homes in production, including 23 homes under contract, which homes under contract represented $6,567,000 of expected sale revenues when closed, subject to customer cancellations and change orders. ● Building sales and other revenues for 2022 were lower than 2021 by $1,465,000.
Added
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.
Removed
Sales of buildings and other land during 2021 consisted of revenues from the sale of a 14,000 square foot, single tenant retail building in the Las Fuentes at Panorama Village subdivision in Rio Rancho and from the sale of a 61,000 square foot warehouse and office facility located in Palm Coast, Florida.
Added
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.
Removed
Refer to Note 7 to the consolidated financial statements contained in this annual report on Form 10-K for detail about the categories of building sales and other revenues. 1 Revenues per lot may not calculate precisely due to the rounding of revenues to the nearest thousand dollars. ​ 8 Cost of Revenues .
Added
Miscellaneous other revenues for 2023 primarily consisted of extension fees for purchase contracts, forfeited deposits and residential rental revenues.
Removed
Land sale gross margin was 45.0% for 2022 compared to 31.3% for 2021.
Added
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 .
Removed
Average home sale cost of revenues per home sold was $250,000 for 2022 compared to $185,000 for 2021 and home sale gross margin was 24.5% for 2022 compared to 16.1% for 2021.
Added
Despite such increase in home sale cost of revenues, home sale gross margins were 28% for 2023 compared to 25% for 2022.
Removed
Other income of $1,028,000 for 2021 primarily consisted of a settlement payment of $650,000 from a tenant for failure to pay rent for the Company’s warehouse and office facilities located in Palm Coast, Florida and $300,000 of debt forgiveness with respect to a loan received by the Company pursuant to the Paycheck Protection Program administered by the U.S.
Added
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.
Removed
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. Further, the Company regularly evaluates property available for purchase from third parties for possible acquisition and development by the Company.
Added
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.
Removed
The Company’s construction operations have continued functioning during this period subject to health and safety protocols in order to protect the Company’s employees, trade contractors and homebuilder customers.
Added
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.
Removed
Those restrictions, combined with a reduction in the availability, capacity and efficiency of municipal and private services necessary to progress land development and homebuilding, have reduced the Company’s sales pace and delayed certain projects and deliveries.
Added
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.
Removed
The inconsistent and unpredictable impacts of the COVID-19 virus and related variants, including changing governmental directives, public health challenges and progress, macroeconomic consequences and market reactions thereto, may cause the Company to adjust its planning and operations and makes it more challenging for the Company to estimate the future performance of the business and develop strategies to generate growth.
Added
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.
Removed
Despite the development of vaccines and more effective treatments for the physical impacts of COVID-19, there are no reliable estimates of how long the COVID-19 pandemic, or its related impacts on overall economic conditions or the global supply chain, will last. As a result, the unpredictability of the current economic and public health conditions will continue to evolve.

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