Amrep Corp.: Form 10-Q for the period ended Oct 31, 2025

AMREP Corporation (the “Company”), through its subsidiaries, is primarily engaged in two business segments: land development and homebuilding. The Company has no foreign sales or activities outside the United States. Unless the context otherwise indicates, all references to the Company in this quarterly report on Form 10-Q include the Company and its subsidiaries. The following provides information that management believes is relevant to an assessment and understanding of the Company’s unaudited condensed consolidated results of operations and financial condition. The information contained in this Item 2 should be read in conjunction with the unaudited condensed consolidated financial statements and related notes thereto included in this report on Form 10-Q and with the Company’s annual report on Form 10-K for the year ended April 30, 2025, which was filed with the Securities and Exchange Commission on July 25, 2025 (the “2025 Form 10-K”). Many of the amounts and percentages presented in this Item 2 have been rounded for convenience of presentation. Unless the context otherwise indicates, all references to 2026 and 2025 are to the fiscal years ending April 30, 2026 and 2025.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

Management’s discussion and analysis of financial condition and results of operations is based on the accounting policies used and disclosed in the 2025 condensed consolidated financial statements and accompanying notes that were prepared in accordance with accounting principles generally accepted in the United States of America and included as part of the 2025 Form 10-K. The preparation of the unaudited condensed consolidated financial statements included in this report on Form 10-Q required management to make estimates and assumptions that affected the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the unaudited condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual amounts or results could differ from those estimates and assumptions.

The Company’s critical accounting policies, assumptions and estimates are described in Item 7 of Part II of the 2025 Form 10-K. There have been no changes in these critical accounting policies.

Information concerning the Company’s implementation and the impact of recent accounting standards or updates issued by the Financial Accounting Standards Board is included in the notes to the consolidated financial statements contained in the 2025 Form 10-K and in the notes to the unaudited condensed consolidated financial statements included in this report on Form 10-Q. The Company did not adopt any accounting policy in the six months ended October 31, 2025 that had a material effect on its unaudited condensed consolidated financial statements.

RESULTS OF OPERATIONS

For the three months ended October 31, 2025, the Company had net income of $1,200,000, or $0.22 per diluted share, compared to net income of $4,042,000, or $0.75 per diluted share, for the three months ended October 31, 2024. For the six months ended October 31, 2025, the Company had net income of $5,892,000, or $1.09 per diluted share, compared to net income of $8,106,000, or $1.51 per diluted share, for the six months ended October 31, 2024.

During 2026 and 2025, the Company experienced material delays in municipal entitlements, infrastructure availability, 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. While construction and land costs remain elevated, the Company has been able to partially offset these cost increases through land and home price increases in 2026 and 2025 due to a strong pricing environment, which may not continue. The rising cost of housing due to increases in average sales prices in recent years and the level of mortgage interest rates, coupled with general inflation in the U.S. economy and other macroeconomic factors, have placed pressure on overall housing affordability, negatively affecting demand and have caused many potential homebuyers to pause and reconsider their housing choices. In addition, any tariffs on goods used as inputs in both the land development business segment and homebuilding business segment may result in further increases in the cost of housing and average sales prices. Given the affordability challenges and the resulting impact on demand, the Company has provided sales incentives on certain homes, reduced the sale prices of certain homes, reduced the size of lots and homes, opportunistically leased completed homes and slowed the pace of housing starts and land development projects. During 2026 and 2025, 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 prior years. This is expected to result in a reduction of revenues from the sale of developed residential land during 2026 as compared to 2025. Future economic conditions and the demand for land and homes are subject to continued uncertainty due to many factors, including macroeconomic factors, changes in mortgage interest rates, inflation, tariffs, supplies of new and existing home inventory available for sale, labor shortages and other factors. The Company’s past performance may not be indicative of future results.

Revenues. The following presents information on revenues (dollars in thousands):

• The change in land sale revenues for the three months ended October 31, 2025 compared to the prior period was primarily due to decreases in revenues from the sale of developed residential land and undeveloped land. The change in land sale revenues for the six months ended October 31, 2025 compared to the prior period was primarily due to a decrease in revenues from the sale of developed residential land offset in part by increases in revenues from the sale of undeveloped land and commercial developed land. During the six months ended October 31, 2025, the Company sold 467 acres of contiguous undeveloped land in Sandoval County, New Mexico, representing $2,174,000 of revenue, to one purchaser. During the three months ended October 31, 2024, the Company sold 549 acres of contiguous undeveloped land in Sandoval County, New Mexico, representing $2,502,000 of revenue, to one purchaser. The Company’s land sale revenues consist of (dollars in thousands):

1 Revenue per acre may not calculate precisely due to the rounding of revenues to the nearest thousand dollars.

The changes in the revenue per acre of developed residential land, developed commercial land and undeveloped land for the three and six months ended October 31, 2025 compared to the prior periods were primarily due to the location and mix of land sold.

• The changes in home sale revenues for the three and six months ended October 31, 2025 compared to the prior periods were primarily due to an increase in the number of homes sold. The changes in average selling prices for the three and six months ended October 31, 2025 compared to the prior periods were primarily due to the location, size and mix of homes sold. The Company’s home sale revenues consist of (dollars in thousands):

As of October 31, 2025, the Company had 59 homes in production, including 16 homes under contract, which homes under contract represented $7,446,000 of expected home sale revenues when closed, subject to customer cancellations and change orders. As of October 31, 2024, the Company had 70 homes in production, including 15 homes under contract, which homes under contract represented $6,610,000 of expected home sale revenues when closed, subject to customer cancellations and change orders.

• Other revenues consist of (in thousands):

Miscellaneous other revenues for the three and six months ended October 31, 2025 primarily consist of management fees for homeowners’ associations and residential rental revenues. Miscellaneous other revenues for the three and six months ended October 31, 2024 primarily consist of extension fees for purchase contracts and residential rental revenues.

Cost of Revenues. The following presents information on cost of revenues (dollars in thousands):

• Land sale cost of revenues, net consists of (in thousands):

Land sale gross margins were 80% and 70% for the three and six months ended October 31, 2025 compared to 60% and 52% for the three and six months ended October 31, 2024. The changes in gross margin were primarily due to changes in public improvement district reimbursements, private infrastructure covenant reimbursements and payments for impact fee credits and the location, size and mix of property sold (including the sale of 15.7 acres and 501.8 acres for the three and six months ended October 31, 2025 as compared to the sale of 567.1 acres and 585.2 acres for the three and six months ended October 31, 2024 of undeveloped land with a low associated land sale cost of revenues).

• The changes in home sale cost of revenues for the three and six months ended October 31, 2025 compared to the prior periods were primarily due to the number, location, size and mix of homes sold and increases in the prices of building materials and skilled labor. Home sale gross margins were 25% for the three and six months ended October 31, 2025 compared to 20% for the three and six months ended October 31, 2024. The changes in gross margin were primarily due to the location, size and mix of homes sold offset in part by increases in the amount of sales incentives to homebuyers and increases in the prices of building materials and skilled labor.
• Other cost of revenues for the three and six months ended October 31, 2025 and October 31, 2024 consists of the cost of goods sold for landscaping services.

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.

General and Administrative Expenses. The following presents information on general and administrative expenses (dollars in thousands):

• The changes in land development general and administrative expenses for the three and six months ended October 31, 2025 compared to the prior periods were primarily due to increases in compensation expense, professional services and depreciation.
• The changes in homebuilding general and administrative expenses for the three and six months ended October 31, 2025 compared to the prior periods were primarily due to increases in professional services, compensation expense, property taxes and depreciation.
• The changes in corporate general and administrative expenses for the three and six months ended October 31, 2025 compared to the prior periods were primarily due to increases in professional services and compensation expense.

The Company did not record any non-cash impairment charges on real estate inventory or investment assets in the three and six months ended October 31, 2025 or October 31, 2024. Changes in economic and other market conditions may adversely impact the fair market value of the Company’s real estate inventory or investment assets, which could lead to impairment charges in future periods.

Interest Income, net. Interest income, net was $459,000 and $915,000 for the three and six months ended October 31, 2025 and $576,000 and $857,000 for the three and six months ended October 31, 2024. There were no interest or loan costs capitalized in real estate inventory in the three and six months ended October 31, 2025 or October 31, 2024.

Income Taxes. The Company had a provision for income taxes of $378,000 and $2,288,000 for the three and six months ended October 31, 2025 related to the amount of income before income taxes during each period. The Company had a benefit for income taxes of $322,000 for the three months ended October 31, 2024 and a provision for income taxes of $887,000 for the six months ended October 31, 2024. The benefit (provision) for income taxes for the three and six months ended October 31, 2024 related to the amount of income before income taxes during each period and to the reclassification of the balance of accumulated other comprehensive income to a benefit for income taxes. In connection with the termination of the Company’s defined benefit pension plan, $1,230,000 of income tax effects that remained in accumulated other comprehensive income were reclassified to a benefit for income taxes during the three months ended October 31, 2024. Refer to Note 11 to the consolidated financial statements contained in the 2025 Form 10-K for detail regarding accumulated other comprehensive income.

LIQUIDITY AND CAPITAL RESOURCES

Except as described herein, there have been no material changes to the Company’s liquidity and capital resources as reflected in the Liquidity and Capital Resources section of Management’s Discussion and Analysis of Financial Condition and Results of Operations in the 2025 Form 10-K.

The Company had cash, cash equivalents and restricted cash as follows (dollars in thousands):

Cash Flow. The following presents information on cash flows (in thousands):

The net cash provided by operating activities for the six months ended October 31, 2025 was primarily due to cash generated from business operations and increases in accounts payable and accrued expenses offset in part by increases in real estate inventory and investment assets and a decrease in income taxes (payable) receivable, net. The net cash provided by operating activities for the six months ended October 31, 2024 was primarily due to cash generated from business operations and decreases in real estate inventory and other assets and an increase in taxes payable (receivable), net offset in part by an increase in investment assets and a decrease in accounts payable and accrued expenses.

Notes payable decreased from $26,000 as of April 30, 2025 to $23,000 as of October 31, 2025 due to principal debt repayments. Refer to Note 6 to the unaudited condensed consolidated financial statements included in this report on Form 10-Q and Note 6 to the consolidated financial statements contained in the 2025 Form 10-K for detail regarding the Company’s notes payable.

Asset and Liability Levels. The following presents information on certain assets and liabilities (dollars in thousands):

• Real estate inventory consists of (dollars in thousands):

From April 30, 2025 to October 31, 2025, the change in land inventory was primarily due to land development activity and the acquisition of land offset in part by the sale of land, the change in homebuilding model and completed 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 an increase in the number of homes that started construction.

• Investment assets, net consist of (dollars in thousands):

During the six months ended October 31, 2025, the Company sold 501.8 acres of undeveloped property in Sandoval County, New Mexico categorized as land held for long-term investment.

As of October 31, 2025, the Company leased 28 homes to residential tenants. As of April 30, 2025, the Company leased 21 homes to residential tenants. Given the impact on demand as a result of affordability challenges, the Company has opportunistically leased completed homes. Depreciation associated with owned real estate leased or intended to be leased was $49,000 and $88,000 for the three and six months ended October 31, 2025 and $24,000 and $48,000 for the three and six months ended October 31, 2024.

• From April 30, 2025 to October 31, 2025:
• The change in other assets was primarily due to increases in prepaid expenses related to insurance and accounts receivable.
• The change in deferred income taxes, net was primarily due to the income tax effect of the amount of income before income taxes for the six months ended October 31, 2025.
• The change in accounts payable and accrued expenses was primarily due to an increase in accruals for property taxes.
• The change in income taxes (payable) receivable was primarily due to the accrual of income taxes payable.

Off-Balance Sheet Arrangements. As of October 31, 2025 and October 31, 2024, 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 the 2025 Form 10-K and Note 1 to the unaudited condensed consolidated financial statements included in this report on Form 10-Q for a discussion of recently issued accounting pronouncements.

Statement of Forward-Looking Information

The Private Securities Litigation Reform Act of 1995 provides a safe harbor for forward-looking statements made by or on behalf of the Company. The Company and its representatives may from time to time make written or oral statements that are “forward-looking”, including statements contained in this report and other filings with the Securities and Exchange Commission, reports to the Company’s shareholders and news releases. All statements that express expectations, estimates, forecasts or projections are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. In addition, other written or oral statements, which constitute forward-looking statements, may be made by or on behalf of the Company. Words such as “expects”, “anticipates”, “intends”, “plans”, “believes”, “seeks”, “estimates”, “projects”, “forecasts”, “may”, “should”, variations of such words and similar expressions are intended to identify such forward-looking statements. These statements are not guarantees of future performance and involve certain risks, uncertainties and contingencies that are difficult to predict. All forward-looking statements speak only as of the date of this report 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. Many of the factors that will determine the Company’s future results are beyond the ability of management to control or predict. Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in or suggested by such forward-looking statements.

The forward-looking statements contained in this report 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) estimates of the Company’s exposure to warranty claims and liabilities for litigation and legal claims, estimates of the cost to complete of common land development costs and the estimated relative sales values of individual parcels of land in connection with the allocation of common land development costs, (4) the adequacy of warranty reserves to cover the ultimate resolution of any potential liabilities associated with warranty claims, (5) the conditions resulting in homebuyer affordability challenges, (6) the amount of land sale revenues during 2025 and 2026, (7) the backlog of homes under contract and in production and the dollar amount of expected sale revenues when such homes are closed, (8) the categorization of owned real estate leased or intended to be leased, (9) the timing of recognizing unrecognized compensation expense related to shares of common stock issued under the AMREP Corporation 2016 Equity Compensation Plan, (10) the future issuance of deferred stock units to directors of the Company, (11) the dilution to earnings per share that unvested shares of restricted common stock or shares issuable upon the exercise of stock options may cause in the future and (12) the future business conditions that may be experienced by the Company. The Company undertakes no obligation to update or publicly release any revisions to any forward-looking statement to reflect events, circumstances or changes in expectations after the date of such forward-looking statement, or to make any other forward-looking statements, whether as a result of new information, future events or otherwise.

Evaluation of Disclosure Controls and Procedures

The Company’s management, with the participation of the Company’s Chief Executive Officer and Chief Financial Officer has evaluated the effectiveness of the Company’s disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934) as of the end of the period covered by this report. As a result of such evaluation, the Company’s Chief Executive Officer and Chief Financial Officer have concluded that such disclosure controls and procedures were effective as of October 31, 2025 to provide reasonable assurance that the information required to be disclosed in the reports the Company files or submits under the Securities Exchange Act of 1934 is (i) recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and (ii) accumulated and communicated to the Company’s management, including the Company’s Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding disclosure. The Company believes that a control system, no matter how well designed and operated, cannot provide absolute assurance that the objectives of the control system are met, and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company have been detected.

Changes in Internal Control over Financial Reporting

No change in the Company’s system of internal control over “financial reporting” (as such term is defined in Rules 13a-15(f) and 15d-15(f) of the Securities Exchange Act of 1934) occurred during the most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, internal control over financial reporting.