Amrep Corp.: Form 10-Q for the period ended Jul 31, 2026

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, 2026, which was filed with the Securities and Exchange Commission on July 24, 2026 (the “2026 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 2027 and 2026 are to the fiscal years ending April 30, 2027 and 2026.

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 2026 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 2026 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 2026 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 2026 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 policies during the three months ended July 31, 2026 that had a material effect on its unaudited condensed consolidated financial statements.

RESULTS OF OPERATIONS

For the three months ended July 31, 2026, the Company had net income of $276,000, or $0.05 per diluted share, compared to net income of $4,692,000, or $0.87 per diluted share, for the three months ended July 31, 2025.

Except as described herein, there have been no material changes to the Company’s commentary on market conditions and outlook and the Company’s response thereto as reflected in the Results of Operations section of Management’s Discussion and Analysis of Financial Condition and Results of Operations in the 2026 Form 10-K.

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

• The change in land sale revenues for the three months ended July 31, 2026 compared to the prior period was primarily due to a decrease in revenues from the sale of developed residential land, developed commercial land and undeveloped land. 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 change in the revenue per acre of undeveloped land for the three months ended July 31, 2026 compared to the prior period was primarily due to the location and mix of land sold. As a result of the Company reducing the number and scope of its active land development projects and delaying certain new land development projects due to market headwinds and uncertainty, a more intentional focus on growing the homebuilding business segment and an increase in entitlement, contractor and infrastructure delays in 2026, the Company expects significantly reduced revenues from the sale of developed residential land during 2027.

• The change in home sale revenues for the three months ended July 31, 2026 compared to the prior period was primarily due to a decrease in the number of homes sold. The change in average selling prices for the three months ended July 31, 2026 compared to the prior period was primarily due to the location, size and mix of homes sold. The Company’s home sale revenues consist of (dollars in thousands):

As of July 31, 2026, the Company had 83 homes in production, including 23 homes under contract, which homes under contract represented $12,505,000 of expected home sale revenues (less any sales incentives associated with such contracts) when closed, subject to customer cancellations and change orders. As of July 31, 2025, the Company had 62 homes in production, including 24 homes under contract, which homes under contract represented $11,508,000 of expected home sale revenues (less any sales incentives associated with such contracts) when closed, subject to customer cancellations and change orders.

• Other revenues consist of (in thousands):

In August 2026, the Company ceased providing landscaping services. Miscellaneous other revenues for the three months ended July 31, 2026 primarily consist of management fees for homeowners’ associations, residential rental revenues and billboard advertising revenues. Miscellaneous other revenues for the three months ended July 31, 2025 primarily consist of management fees for homeowners’ associations 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 cost of revenues, net was negative for the three months ended July 31, 2026 due to public improvement district reimbursements and private infrastructure covenant reimbursements exceeding the amount of land sale cost of revenues. Land sale gross margins were not meaningful for the three months ended July 31, 2026 compared to 69% for the three months ended July 31, 2025.

• The change in home sale cost of revenues for the three months ended July 31, 2026 compared to the prior period was 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 23% for the three months ended July 31, 2026 compared to 25% for the three months ended July 31, 2025. The change in gross margin for the three months ended July 31, 2026 compared to the prior period was 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 each of the three months ended July 31, 2026 and July 31, 2025 consist 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 change in land development general and administrative expenses for the three months ended July 31, 2026 compared to the prior period was primarily due to the costs to terminate the agreement to share a portion of the collected assessments from private infrastructure reimbursement covenants for two land development projects and an increase in real estate taxes and depreciation.

The Company has instituted private infrastructure reimbursement covenants on various land development projects. Similar to a public improvement district, the covenants are expected to reimburse the Company for certain costs of developing a property by imposing an assessment on the real property owners subject to the covenants. The Company agreed to share a portion of the collected assessments from private infrastructure reimbursement covenants for two land development projects with TV Investments, LLC (“TVI”) in October 2021 and April 2024. TVI is 50% owned by an entity wholly-owned by Timothy S. McNaney, who became a member of the Board in January 2026. In June 2026, (i) the Company and TVI terminated the October 2021 agreement and the April 2024 agreement and (ii) the Company paid TVI $201,000 with respect to the termination of the October 2021 agreement (of which $100,500 represents Mr. McNaney’s interest in the transaction) and $114,000 with respect to the termination of the April 2024 agreement (of which $57,000 represents Mr. McNaney’s interest in the transaction). Mr. McNaney was not involved in the negotiation of the termination agreements. In accordance with its charter, the Nominating and Corporate Governance Committee of the Board reviewed and approved the termination agreements. Mr. McNaney is not a member of the Nominating and Corporate Governance Committee.

• The change in homebuilding general and administrative expenses for the three months ended July 31, 2026 compared to the prior period was primarily due to an increase in payroll and benefits and marketing expenses.
• The change in corporate general and administrative expenses for the three months ended July 31, 2026 compared to the prior period was primarily due to an increase in compensation expense, professional services and director fees.

The Company did not record any non-cash impairment charges on real estate inventory or investment assets in the three months ended July 31, 2026 or July 31, 2025. 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 $448,000 and $456,000 for the three months ended July 31, 2026 and July 31, 2025. There were no interest or loan costs capitalized in real estate inventory in the three months ended July 31, 2026 and July 31, 2025.

Income Taxes. The Company had a provision for income taxes of $9,000 and $1,910,000 for the three months ended July 31, 2026 and July 31, 2025 related to the amount of income before income taxes during each period.

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 2026 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):

Notes payable decreased from $18,000 as of April 30, 2026 to $17,000 as of July 31, 2026 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 2026 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, 2026 to July 31, 2026, 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. Refer to Note 2 to the consolidated financial statements contained in the 2026 Form 10-K for detail regarding real estate inventory.

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

As of July 31, 2026, the Company leased 30 homes to residential tenants. As of April 30, 2026, the Company leased 28 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 $41,000 and $39,000 for the three months ended July 31, 2026 and July 31, 2025. Refer to Note 3 to the consolidated financial statements contained in the 2026 Form 10-K for detail regarding investment assets, net.

• From April 30, 2026 to July 31, 2026:
• The change in other assets was primarily due to an increase in miscellaneous assets involving 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 three months ended July 31, 2026.
• The change in accounts payable and accrued expenses was primarily due to increases in trade payables and customer deposits offset in part by a decrease in accrued expenses.

Off-Balance Sheet Arrangements. As of July 31, 2026 and July 31, 2025, 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 2026 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 2026 and 2027, (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 July 31, 2026 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.