# Amrep Corp.: Form 10-Q for the period ended Oct 31, 2022

- Company: [Amrep Corp.](/companies/axr.md) (CIK 6207)
- Form: 10-Q
- Filed: 2022-12-12
- Accepted by EDGAR: Dec 12, 2022, 21:28 ET
- Period: 2022-10-31
- Accession: 0001410578-22-003556
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/6207/000141057822003556/axr-20221031x10q.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/6207/000141057822003556/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2022-10-31.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Revenue | 3 months, 2022-08-01 to 2022-10-31 | $16.1m | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax |
| Revenue | 6 months, 2022-05-01 to 2022-10-31 | $26.9m | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax |
| Operating income | 3 months, 2022-08-01 to 2022-10-31 | $4.5m | us-gaap:OperatingIncomeLoss |
| Operating income | 6 months, 2022-05-01 to 2022-10-31 | $7.0m | us-gaap:OperatingIncomeLoss |
| Income tax | 3 months, 2022-08-01 to 2022-10-31 | $850.0k | us-gaap:IncomeTaxExpenseBenefit |
| Income tax | 6 months, 2022-05-01 to 2022-10-31 | $1.5m | us-gaap:IncomeTaxExpenseBenefit |
| Net income | 3 months, 2022-08-01 to 2022-10-31 | $3.6m | us-gaap:NetIncomeLoss |
| Net income | 6 months, 2022-05-01 to 2022-10-31 | $5.5m | us-gaap:NetIncomeLoss |
| Diluted EPS | 3 months, 2022-08-01 to 2022-10-31 | $0.68 | us-gaap:EarningsPerShareDiluted |
| Diluted EPS | 6 months, 2022-05-01 to 2022-10-31 | $1.04 | us-gaap:EarningsPerShareDiluted |
| Basic EPS | 3 months, 2022-08-01 to 2022-10-31 | $0.69 | us-gaap:EarningsPerShareBasic |
| Basic EPS | 6 months, 2022-05-01 to 2022-10-31 | $1.05 | us-gaap:EarningsPerShareBasic |
| Diluted shares (weighted) | 3 months, 2022-08-01 to 2022-10-31 | 5,307 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Diluted shares (weighted) | 6 months, 2022-05-01 to 2022-10-31 | 5,302 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Operating cash flow | 6 months, 2022-05-01 to 2022-10-31 | −$934.0k | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Capital expenditure | 6 months, 2022-05-01 to 2022-10-31 | $121.0k | us-gaap:PaymentsToAcquirePropertyPlantAndEquipment |
| Cash and equivalents | at 2022-10-31 | $12.9m | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Total assets | at 2022-10-31 | $96.2m | us-gaap:Assets |
| Total liabilities | at 2022-10-31 | $7.2m | us-gaap:Liabilities |
| Long-term debt | at 2022-10-31 | $252.0k | us-gaap:LongTermDebt |
| Shareholders' equity | at 2022-10-31 | $89.0m | us-gaap:StockholdersEquity |

## Management's discussion and analysis

As filed, 27,902 characters.

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, 2022, which was filed with the Securities and Exchange Commission on July 21, 2022 (the “2022 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 2023 and 2022 are to the fiscal years ending April 30, 2023 and 2022.

### 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 2022 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 2022 Form 10-K and in Note 1 to the unaudited condensed consolidated financial statements included in this report on Form 10-Q. The preparation of those unaudited condensed consolidated financial statements 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 2022 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 2022 Form 10-K. The Company did not adopt any accounting policy in the six months ended October 31, 2022 that had a material effect on its unaudited condensed consolidated financial statements.

### RESULTS OF OPERATIONS

For the three months ended October 31, 2022, the Company had net income of $3,621,000, or $0.68 per diluted share, compared to net income of $3,326,000, or $0.45 per diluted share, for the three months ended October 31, 2021. For the six months ended October 31, 2022, the Company had net income of $5,533,000, or $1.04 per diluted share, compared to net income of $4,963,000, or $0.67 per diluted share, for the six months ended October 31, 2021.

Revenues. The following presents information on revenues for the Company’s operations (dollars in thousands):

| ​ ​ ​ ​ | ​ ​ | ​ ​ Three Months ended October 31, ​ ​ 2022 | ​ ​ | ​ ​ ​ ​ 2021 | ​ ​ ​ ​ % Increase ​ (Decrease) | ​ ​ Six Months ended October 31, ​ ​ 2022 | ​ ​ | ​ ​ ​ ​ 2021 | ​ ​ ​ ​ ​ % Increase ​ (Decrease) ​ |
| --- | --- | ---: | --- | ---: | ---: | ---: | --- | ---: | ---: |
| Land sale revenues | ​ | $12,849 | ​ | $8,466 | 52% | $18,021 | ​ | $15,656 | 15% |
| Home sale revenues | ​ | 2,906 | ​ | 819 | (a) ​ | 8,345 | ​ | 3,230 | (a) ​ |
| Building sales and other revenues | ​ | 394 | ​ | 6,827 | (a) ​ | 490 | ​ | 7,212 | (a) ​ |
| Total | ​ | $16,149 | ​ | $16,112 | — ​ | $26,856 | ​ | $26,098 | 3% |

#### (a) Percentage not meaningful.

During the three and six months ended October 31, 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 have caused delays in construction and the realization of revenues and increases in cost of revenues. In addition, in response to inflation, the Federal Reserve increased benchmark interest rates during 2022 and has signaled it expects additional future interest rate increases, which has resulted in a significant increase in mortgage interest rates during 2022, impacting home affordability and consumer sentiment and tempering demand for new homes and finished residential lots. 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 additional pressure on overall housing affordability and have caused many potential home buyers to pause and reconsider their housing choices. 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 and slowed the pace of housing starts and land development projects. The Company believes these conditions will continue to impact the land development and homebuilding industries for at least the remainder of 2022.

- Land sale revenues for the three months and six months ended October 31, 2022 were higher than the prior period by $4,383,000 and $2,365,000 primarily due to the availability of developed residential lots and the sale of commercial lots. The Company’s land sale revenues consist of (dollars in thousands):

| ​ ​ ​ ​ ​ Developed ​ | ​ Three Months ended October 31, 2022 Acres Sold | ​ ​ | ​ ​ Revenue ​ | ​ ​ | ​ ​ Revenue Per Acre1 ​ | ​ ​ ​ Three Months ended October 31, 2021 Acres Sold ​ | ​ ​ | ​ ​ Revenue ​ | ​ ​ | ​ ​ Revenue Per Acre1 ​ |
| --- | ---: | --- | ---: | --- | ---: | ---: | --- | ---: | --- | ---: |
| Residential | 16.8 | ​ | $10,886 | ​ | $648 | 14.6 | ​ | $8,466 | ​ | $580 |
| Commercial | 2.2 | ​ | 1,888 | ​ | 858 | — | ​ | — | ​ | — |
| Total Developed | 19.0 | ​ | $12,774 | ​ | $672 | 14.6 | ​ | 8,466 | ​ | 580 |
| Undeveloped | 3.5 | ​ | 75 | ​ | 21 | — | ​ | — | ​ | — |
| Total | 22.5 | ​ | $12,849 | ​ | $571 | 14.6 | ​ | $8,466 | ​ | $580 |

| ​ ​ ​ Developed | ​ ​ ​ | ​ Six Months ended October 31, 2022 Acres Sold | ​ ​ | ​ ​ Revenue ​ | ​ ​ | ​ ​ Revenue Per Acre1 ​ | ​ ​ ​ Six Months ended October 31, 2021 Acres Sold ​ | ​ ​ | ​ ​ Revenue ​ | ​ ​ | ​ ​ Revenue Per Acre1 ​ |
| --- | --- | ---: | --- | ---: | --- | ---: | ---: | --- | ---: | --- | ---: |
| Residential | ​ | 26.7 | ​ | $16,038 | ​ | $601 | 33.3 | ​ | $15,656 | ​ | $470 |
| Commercial | ​ | 2.2 | ​ | 1,888 | ​ | 858 | — | ​ | — | ​ | — |
| Total Developed | ​ | 28.9 | ​ | $17,926 | ​ | $620 | 33.3 | ​ | 15,656 | ​ | 470 |
| Undeveloped | ​ | 6.4 | ​ | 95 | ​ | 15 | — | ​ | — | ​ | — |
| Total |  | 35.3 | ​ | $18,021 | ​ | $511 | 33.3 | ​ | $15,656 | ​ | $470 |

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

The change in the average selling price per acre of developed residential land for the three months ended October 31, 2022 compared to the three months ended October 31, 2021 and for the six months ended October 31, 2022 compared to the six months ended October 31, 2021 was primarily due to the location and mix of lots sold.

- Home sale revenues for the three and six months ended October 31, 2022 were higher than the prior periods by $2,087,000 and $5,115,000 due to the growth of the Company’s homebuilding operations despite supply chain constraints, shortages of skilled labor and delays in municipal approvals and inspections. The Company’s home sale revenues consist of (dollars in thousands):

| ​ ​ ​ ​ | ​ ​ ​ ​ | ​ ​ Three Months ended October 31, ​ ​ 2022 | ​ ​ | ​ ​ ​ ​ 2021 | ​ ​ | ​ ​ ​ % Increase ​ (Decrease) | ​ ​ Six Months ended October 31, ​ ​ 2022 | ​ ​ | ​ ​ ​ ​ 2021 | ​ ​ | ​ ​ ​ % Increase ​ (Decrease) ​ |
| --- | --- | ---: | --- | ---: | --- | ---: | ---: | --- | ---: | --- | ---: |
| Homes sold | ​ | ​ 5 | ​ | ​ 3 | ​ | 66% | ​ 16 | ​ | ​ 11 | ​ | 45% |
| Average selling price | ​ | $581 | ​ | $273 | ​ | (a) ​ | $522 | ​ | $294 | ​ | (a) ​ |

#### (a) Percentage not meaningful.

As of October 31, 2022, the Company had 32 homes in production, including 12 homes under contract, which homes under contract represented $6,300,000 of expected home sale revenues when closed, subject to customer cancellations and change orders.

- Building sales and other revenues for the three and six months ended October 31, 2022 were lower than the prior periods by $6,433,000 and $6,722,000. Building sales and other revenues consist of (dollars in thousands):

| ​ ​ ​ ​ | ​ ​ ​ | ​ ​ Three Months ended October 31, ​ ​ 2022 | ​ ​ | ​ ​ ​ ​ 2021 | ​ ​ | ​ ​ ​ % Increase ​ (Decrease) | ​ ​ Six Months ended October 31, ​ ​ 2022 | ​ ​ | ​ ​ ​ ​ 2021 | ​ ​ | ​ ​ ​ % Increase ​ (Decrease) ​ |
| --- | --- | ---: | --- | ---: | --- | --- | ---: | --- | ---: | --- | ---: |
| Sale of building | ​ | $— | ​ | $6,750 | ​ | (a) ​ | $— | ​ | $6,750 | ​ | (a) ​ |
| Oil and gas royalties | ​ | ​ 49 | ​ | ​ 40 | ​ | 23% | ​ 106 | ​ | ​ 175 | ​ | (39)% |
| Miscellaneous other revenues | ​ | 345 | ​ | 37 | ​ | (a) ​ | 384 | ​ | 287 | ​ | (37)% |
| Total | ​ | $394 | ​ | $6,827 | ​ | ​ ​ | $490 | ​ | $7,212 | ​ | ​ ​ |

#### (a) Percentage not meaningful.

Refer to Note 7 to the consolidated financial statements contained in the 2022 Form 10-K for additional detail about the categories of building sales and other revenues.

The Company owned a 143,000 square foot warehouse and office facility located in Palm Coast, Florida during the three and six months ended October 31, 2021. Sale of building during the three and six months ended October 31, 2021 consists of the sale of this 143,000 square foot warehouse and office facility.

Miscellaneous other revenues for the three and six months ended October 31, 2022 primarily consist of proceeds from the retention of deposits for certain terminated customer contracts. Miscellaneous other revenues for the three and six months ended October 31, 2021 primarily consist 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. The following presents information on cost of revenues for the Company’s operations (dollars in thousands):

| ​ ​ ​ ​ | ​ ​ ​ | ​ ​ Three Months ended October 31, ​ ​ 2022 | ​ ​ | ​ ​ ​ ​ 2021 | ​ ​ | ​ ​ ​ % Increase ​ (Decrease) | ​ ​ Six Months ended October 31, ​ ​ 2022 | ​ ​ | ​ ​ ​ ​ 2021 | ​ ​ | ​ ​ ​ % Increase ​ (Decrease) ​ |
| --- | --- | ---: | --- | ---: | --- | --- | ---: | --- | ---: | --- | --- |
| Land sale cost of revenues, net | ​ | $8,472 | ​ | $6,030 |  | 40% | $11,779 | ​ | $11,120 |  | 6% |
| Home sale cost of revenues | ​ | 2,051 | ​ | 629 |  | (a) ​ | 5,714 | ​ | 2,543 |  | (a) ​ |
| Building sales and other cost of revenues | ​ | ​ — | ​ | ​ 3,837 | ​ | (a) ​ | ​ — | ​ | ​ 3,837 | ​ | (a) ​ |

#### (a) Percentage not meaningful.

- Land sale cost of revenues, net consist of (in thousands):

| ​ ​ ​ ​ | ​ ​ | ​ ​ Three Months ended October 31, ​ ​ 2022 | ​ ​ | ​ ​ ​ ​ 2021 | ​ ​ | ​ ​ % Increase ​ (Decrease) | ​ ​ Six Months ended October 31, ​ ​ 2022 | ​ ​ | ​ ​ ​ ​ 2021 | ​ ​ ​ ​ % Increase ​ (Decrease) |
| --- | --- | ---: | --- | ---: | --- | --- | ---: | --- | ---: | ---: |
| Land sale cost of revenues | ​ | $9,155 | ​ | $6,154 |  | 49% | $12,986 | ​ | $11,765 | 10% |
| Less: | ​ |  | ​ |  |  | ​ |  | ​ |  | ​ |
| Public improvement district reimbursements | ​ | 34 | ​ | 15 |  | (a) ​ | 325 | ​ | 239 | 36% |
| Private infrastructure covenant reimbursements | ​ | 114 | ​ | 31 |  | (a) ​ | 293 | ​ | 83 | (a) ​ |
| Payments for impact fee credits | ​ | 535 | ​ | 78 |  | (a) ​ | 589 | ​ | 323 | 82% |
| Land sale cost of revenues, net | ​ | $8,472 | ​ | $6,030 | ​ | ​ ​ | $11,779 | ​ | $11,120 | ​ |

#### (a) Percentage not meaningful.

Land sale cost of revenues, net for the three and six months ended October 31, 2022 was higher than the prior periods by $2,442,000 and $659,000. Land sale gross margins were 34% and 35% for the three and six months ended October 31, 2022 compared to 29% for each of the three and six months ended October 31, 2021. If land sale cost of revenues was not reduced for amounts received from public improvement districts, private infrastructure covenants and payments for impact fee credits, land sale gross margins would have been 29% and 28% for the three and six months ended October 31, 2022 compared to 27% and 25% for the three and six months ended October 31, 2021. The change in gross margin were primarily due to lower than estimated cost associated with certain completed projects and the location, size and mix of property sold. 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.

- Home sale cost of revenues for the three and six months ended October 31, 2022 were higher than the prior periods by $1,422,000 and $3,171,000 due to the location and amenities available in the communities. Home sale gross margins were 29% and 32% for the three and six months ended October 31, 2022 compared to 23% and 21% for the three and six months ended October 31, 2021. The increase in gross margin 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 during the three and six months ended October 31, 2021 consists of the sale of a 143,000 square foot warehouse and office facility located in Palm Coast, Florida.

General and Administrative Expenses. The following presents information on general and administrative expenses for the Company’s operations (dollars in thousands):

| ​ ​ ​ ​ | ​ ​ ​ | ​ ​ Three Months ended October 31, ​ ​ 2022 | ​ ​ | ​ ​ ​ ​ 2021 | ​ ​ ​ ​ ​ % Increase ​ (Decrease) | ​ ​ Six Months ended October 31, ​ ​ 2022 | ​ ​ | ​ ​ ​ ​ 2021 | ​ ​ ​ ​ ​ % Increase ​ (Decrease) ​ |
| --- | --- | ---: | --- | ---: | ---: | ---: | --- | ---: | ---: |
| Land development | ​ | $642 | ​ | $677 | (5)% | $1,249 | ​ | $1,261 | (1)% |
| Homebuilding | ​ | 274 | ​ | 212 | 29% | 531 | ​ | 399 | 33% |
| Corporate | ​ | 239 | ​ | 368 | (35)% | 545 | ​ | 783 | (30)% |
| Total | ​ | $1,155 | ​ | $1,257 | (8)% | $2,325 | ​ | $2,443 | (5)% |

- Land development general and administrative expenses for the three and six months ended October 31, 2022 were lower than the prior periods by $35,000 and $12,000 primarily due to a refund of certain property taxes. The Company did not record any non-cash impairment charges on real estate inventory or investment assets for the three and six months ended October 31, 2022 or October 31, 2021. Due to volatility in market conditions and development costs, the Company may experience future impairment charges.
- Homebuilding general and administrative expenses for the three and six months ended October 31, 2022 were higher than the prior periods by $62,000 and $132,000 primarily due to hiring additional employees.
- Corporate general and administrative expenses for the three and six months ended October 31, 2022 were lower than the prior periods by $129,000 and $238,000 primarily due to a decline in depreciation as a result of building sales in prior periods and a decrease in office rent.

Interest income, net. Interest income, net for the six months ended October 31, 2022 was higher than the prior period by $5,000 primarily due to interest earned in connection with a refund of federal income taxes.

Other income. Refer to Note 10 to the unaudited condensed consolidated financial statements included in this report on Form 10-Q for detail regarding other income.

Provision for income taxes. The Company had a provision for income taxes of $850,000 and $1,511,000 for the three and six months ended October 31, 2022 compared to $1,065,000 and $1,453,000 for the three and six months ended October 31, 2021. The provision for income taxes correlated to the amount of income before income taxes during each period.

### 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. The

Company’s liquidity is affected by many factors, including some that are based on normal operations and some that are related to the real estate industry and the economy generally.

The Company’s primary sources of funding for working capital requirements are cash flow from operations, bank financing for specific real estate projects, a revolving line of credit and existing cash balances. Land and homebuilding properties generally cannot be sold quickly, and the ability of the Company to sell properties has been and will continue to be affected by market conditions. The ability of the Company to generate cash flow from operations is primarily dependent upon its ability to sell the properties it has selected for disposition at the prices and within the timeframes the Company has established for each property. The development of additional lots for sale, construction of homes or pursuing other real estate projects may require financing, 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. Except as described below, 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 2022 Form 10-K.

Cash Flow. The following presents information on the cash flows for the Company (dollars in thousands):

| ​ ​ ​ ​ | ​ ​ ​ | ​ ​ ​ ​ Six Months Ended October 31, 2022 | ​ ​ | ​ ​ ​ ​ 2021 | ​ ​ ​ ​ ​ % Increase (Decrease) | ​ ​ ​ |
| --- | --- | ---: | --- | ---: | --- | --- |
| Net cash provided by (used in) operating activities | ​ | $(934) | ​ | $2,930 | (a) | ​ |
| Net cash provided by (used in) investing activities | ​ | (121) | ​ | 81 | (a) | ​ |
| Net cash provided by (used in) financing activities | ​ | (1,778) | ​ | 2,515 | (a) | ​ |
| Increase (decrease) in cash, cash equivalents and restricted cash | ​ | $(2,833) | ​ | $5,526 | (a) | ​ |

#### (a) Percentage not meaningful.

Operating Activities. Net cash provided by (used in) operating activities for the six months ended October 31, 2022 was lower than the prior period by $3,864,000 primarily due to the amount of change during each period in real estate inventory and investment assets, other assets, accounts payable and accrued expenses, taxes payable (receivable), net and the deferred income tax provision.

Investing Activities. Net cash provided by (used in) investing activities for the six months ended October 31, 2022 was lower than the prior period by $202,000 primarily due to the purchase of equipment.

Financing Activities. Net cash provided by (used in) financing activities for the six months ended October 31, 2022 was lower than the prior period by $4,293,000 primarily due to a reduction in proceeds from debt financing partially offset by a decrease in principal debt repayments. Notes payable decreased from $2,030,000 as of April 30, 2022 to $252,000 as of October 31, 2022 due to principal debt repayments. Refer to Note 5 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 2022 Form 10-K for detail regarding each of the Company’s notes payable.

Asset and Liability Levels. The following presents information on certain asset and liability levels (dollars in thousands):

| ​ ​ ​ | ​ ​ | ​ ​ October 31, 2022 | ​ ​ | ​ ​ April 30, 2022 | ​ ​ ​ % Increase ​ (Decrease) |
| --- | --- | ---: | --- | ---: | ---: |
| Real estate inventory | ​ | $70,046 | ​ | $67,249 | 4% |
| Investment assets | ​ | 8,961 | ​ | 9,017 | (1)% |
| Other assets | ​ | 2,851 | ​ | 1,882 | 51% |
| Deferred income taxes, net | ​ | 895 | ​ | 958 | (7)% |
| Prepaid pension costs | ​ | 543 | ​ | 90 | (a) ​ |
| Accounts payable and accrued expenses | ​ | 5,511 | ​ | 6,077 | (9)% |
| Taxes payable, net | ​ | 1,394 | ​ | 3,648 | (62)% |

#### (a) Percentage not meaningful.

- Real estate inventory increased from April 30, 2022 to October 31, 2022 by $2,797,000. Real estate inventory consists of (dollars in thousands):

| ​ ​ ​ | ​ ​ | ​ ​ October 31, 2022 | ​ ​ | ​ ​ April 30, 2022 | ​ ​ | ​ ​ % Increase (Decrease) |
| --- | --- | ---: | --- | ---: | --- | ---: |
| Land inventory in New Mexico | ​ | $60,032 | ​ | $59,374 |  | 1% |
| Land inventory in Colorado | ​ | 3,435 | ​ | 3,434 |  | —% |
| Homebuilding model inventory | ​ | 1,005 | ​ | 1,135 |  | (11)% |
| Homebuilding construction in process | ​ | 5,574 | ​ | 3,306 |  | 69% |
| ​ | ​ | $70,046 | ​ | $67,249 | ​ | ​ ​ |

Land inventory in New Mexico increased from April 30, 2022 to October 31, 2022 by $658,000 primarily due to land development activity and the acquisition of land. Homebuilding model inventory decreased from April 30, 2022 to October 31, 2022 by $130,000 primarily due to the sale of homes partially offset by the completion of homes not yet sold. Homebuilding construction in process increased from April 30, 2022 to October 31, 2022 by $2,268,000 due to supply chain constraints, shortages of skilled labor and delays in municipal approvals and inspections causing construction cycle time to lengthen.

- Investment assets decreased from April 30, 2022 to October 31, 2022 by $56,000. Investment assets consist of land held for long-term investment.
- Other assets increased from April 30, 2022 to October 31, 2022 by $969,000 primarily due to prepaid expenses of a cash collateralized performance guaranty related to land development, stock compensation, insurance and real estate taxes.
- Deferred income taxes, net decreased from April 30, 2022 to October 31, 2022 by $63,000 primarily due to the income tax effect of the decrease in pension liability. During 2022, the Company expects to recognize a loss for tax purposes only related to worthless stock of Palm Coast Data Holdco, Inc. owned by the Company. Palm Coast Data Holdco, Inc. had previously been the owner of the Company’s fulfillment services business. The amount of the tax loss has not yet been determined.
- Accounts payable and accrued expenses decreased from April 30, 2022 to October 31, 2022 by $566,000 primarily due to the payment of invoices partially offset by an increase in customer deposits.
- Taxes payable, net decreased from April 30, 2022 to October 31, 2022 by $2,254,000 due to the payment of taxes.
- Prepaid pension costs of the Company’s frozen defined benefit pension plan increased from April 30, 2022 to October 31, 2022 by $453,000 primarily due to the funding levels of the plan. The Company recorded, net of tax, other comprehensive income of $77,000 and $143,000 for the three and six months ended October 31, 2022 and $67,000 and $133,000 for the three and six months ended October 31, 2021 reflecting the change in accrued pension costs during each period net of the related deferred tax and unrecognized prepaid pension amounts.

Recent Accounting Pronouncements. Refer to Note 1 to the consolidated financial statements contained in the 2022 Form 10-K 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, homebuilding and capital expenditure needs, (2) the Company’s expected liquidity sources, (3) the availability and utilization of existing bank financing, (4) the market conditions impacting the land development and homebuilding industries, including possible future increases in benchmark interest rates by the Federal Reserve and demand for new homes and finished residential lots, (5) the future business conditions that may be experienced by the Company, including the pace of the Company’s housing starts and land development projects, (6) the backlog of homes under contract and in production and the dollar amount of expected sales revenues when such homes are closed, (7) the timing of recognizing unrecognized compensation expense related to shares of common stock (and option related thereto) issued under the AMREP Corporation 2016 Equity Compensation Plan, (8) the future issuance of deferred stock units to directors of the Company and (9) the timing and amount of the recognition of a loss for tax purposes only related to worthless stock of Palm Coast Data Holdco, Inc. owned 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.

## Controls and procedures

As filed, 1,866 characters.

### Evaluation of Disclosure Controls and Procedures

The Company’s management, with the participation of the Company’s Chief Executive Officer and Vice President, Finance and Accounting, 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 Vice President, Finance and Accounting have concluded that such disclosure controls and procedures were effective as of October 31, 2022 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 Vice President, Finance and Accounting, 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.

Filed Dec 12, 2022.
Source: SEC EDGAR, the filing index for accession 0001410578-22-003556. Last ingested by Listed: Oct 24, 2026, 14:51 ET. No prices; not investment advice.