10-Q 1 axr-20240131x10q.htm 10-Q
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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended January 31, 2024

OR

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ___________ to ___________

Commission File Number: 1-4702

AMREP Corporation

(Exact Name of Registrant as Specified in its Charter)

Oklahoma

    

59-0936128

State or Other Jurisdiction of

Incorporation or Organization

I.R.S. Employer Identification No.

 

 

850 West Chester Pike,

Suite 205, Havertown, PA

19083

Address of Principal Executive Offices

Zip Code

(610) 487-0905

Registrant’s Telephone Number, Including Area Code

Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

    

Trading Symbol(s)

    

Name of each exchange on which registered

Common Stock $0.10 par value

AXR

New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 (the “Exchange Act”) during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes      No 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes     No 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company”, and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer 

Accelerated filer 

Non-accelerated filer  

Smaller reporting company 

Emerging growth company   

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.   

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes     No 

Number of Shares of Common Stock, par value $.10 per share, outstanding at March 6, 2024 – 5,271,309.

AMREP CORPORATION AND SUBSIDIARIES

INDEX

PART I. FINANCIAL INFORMATION

PAGE NO.

Item 1.

Financial Statements

Condensed Consolidated Balance Sheets January 31, 2024 (Unaudited) and April 30, 2023

2

Condensed Consolidated Statements of Operations (Unaudited) Three and Nine Months Ended January 31, 2024 and 2023

3

Condensed Consolidated Statements of Comprehensive Income (Unaudited) Three and Nine Months Ended January 31, 2024 and 2023

4

Condensed Consolidated Statements of Shareholders’ Equity (Unaudited) Three and Nine Months Ended January 31, 2024 and 2023

5

Condensed Consolidated Statements of Cash Flows (Unaudited) Nine Months Ended January 31, 2024 and 2023

6

Notes to Condensed Consolidated Financial Statements (Unaudited)

7

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

14

Item 4.

Controls and Procedures

22

PART II. OTHER INFORMATION

Item 6.

Exhibits

23

SIGNATURE

24

EXHIBIT INDEX

25

PART I. FINANCIAL INFORMATION

Item 1.  Financial Statements

AMREP CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Amounts in thousands, except share and per share amounts)

January 31, 

April 30, 

2024

2023

    

(Unaudited)

    

ASSETS

 

  

 

  

Cash and cash equivalents

$

18,013

$

19,993

Short-term investments

5,043

Real estate inventory

 

68,098

 

65,625

Investment assets, net

 

12,511

 

13,747

Other assets

 

2,825

 

3,249

Income taxes receivable

 

 

41

Deferred income taxes, net

11,824

12,493

Prepaid pension costs

 

680

 

747

TOTAL ASSETS

$

118,994

$

115,895

LIABILITIES AND SHAREHOLDERS’ EQUITY

 

  

 

  

LIABILITIES:

 

  

 

  

Accounts payable and accrued expenses

$

4,982

$

4,851

Notes payable

 

37

 

44

Income taxes payable

 

188

 

TOTAL LIABILITIES

 

5,207

 

4,895

SHAREHOLDERS’ EQUITY:

 

  

 

  

Common stock, $.10 par value; shares authorized – 20,000,000; shares issued – 5,271,309 at January 31, 2024 and 5,254,909 at April 30, 2023

 

526

526

Capital contributed in excess of par value

 

32,926

 

32,686

Retained earnings

 

79,164

 

76,618

Accumulated other comprehensive income (loss), net

 

1,171

 

1,170

TOTAL SHAREHOLDERS’ EQUITY

 

113,787

 

111,000

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY

$

118,994

$

115,895

The accompanying notes to unaudited condensed consolidated financial statements are an integral part of these unaudited condensed consolidated financial statements.

2

AMREP CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

Three and Nine Months ended January 31, 2024 and 2023

(Amounts in thousands, except per share amounts)

Three Months ended

Nine Months ended

January 31,

January 31,

    

2024

    

2023

    

2024

    

2023

REVENUES:

 

  

 

  

 

  

 

  

Land sale revenues

$

4,033

$

6,367

$

15,576

$

24,389

Home sale revenues

2,604

2,639

9,527

10,984

Other revenues

 

6,052

 

111

 

6,730

 

602

Total revenues

 

12,689

 

9,117

 

31,833

 

35,975

COSTS AND EXPENSES:

 

  

 

 

  

 

Land sale cost of revenues, net

 

2,647

 

3,636

 

10,512

 

15,415

Home sale cost of revenues

2,020

2,047

6,924

7,762

Other cost of revenues

 

6,269

 

 

6,450

 

General and administrative expenses:

 

Operations

1,901

1,573

5,021

3,898

Pension settlement

2,336

2,336

Total costs and expenses

 

12,837

 

9,592

 

28,907

 

29,411

Operating income (loss)

(148)

(475)

2,926

6,564

Interest income, net

 

262

 

 

473

 

6

Other income

1,803

1,803

Income before income taxes

114

1,328

3,399

8,373

Provision (benefit) for income taxes

22

(15,246)

853

(13,734)

Net income

$

92

$

16,574

$

2,546

$

22,107

Earnings per share – basic

$

0.02

$

3.14

$

0.48

$

4.19

Earnings per share – diluted

$

0.02

$

3.12

$

0.48

$

4.17

Weighted average number of common shares outstanding – basic

 

5,303

 

5,284

 

5,299

 

5,280

Weighted average number of common shares outstanding – diluted

 

5,346

 

5,310

 

5,341

 

5,304

The accompanying notes to unaudited condensed consolidated financial statements are an integral part of these unaudited condensed consolidated financial statements.

3

AMREP CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)

Three and Nine Months ended January 31, 2024 and 2023

(Amounts in thousands)

Three Months ended

Nine Months ended

January 31, 

January 31, 

    

2024

    

2023

    

2024

    

2023

Net income

$

92

$

16,574

$

2,546

$

22,107

Other comprehensive income, net of tax:

 

  

 

  

 

  

 

  

Pension settlement expense

2,336

2,336

Income tax effect

(724)

(724)

Pension settlement expense, net of tax

1,612

1,612

Decrease in pension liability

 

1

 

94

 

1

 

301

Income tax effect

(29)

(93)

Decrease in pension liability, net of tax

1

65

1

208

Other comprehensive income

 

1

 

1,677

 

1

 

1,820

Total comprehensive income

$

93

$

18,251

$

2,547

$

23,927

The accompanying notes to unaudited condensed consolidated financial statements are an integral part of these unaudited condensed consolidated financial statements.

4

AMREP CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY (UNAUDITED)

Three and Nine Months ended January 31, 2024 and 2023

(Amounts in thousands)

Capital

Accumulated

Contributed

Other

Common Stock

in Excess of

Retained

Comprehensive

    

Shares

    

Amount

    

Par Value

    

Earnings

    

Income (Loss)

    

Total

Balance, November 1, 2022

5,255

$

526

$

32,570

$

60,361

$

(4,430)

$

89,027

Compensation related to issuance of option to purchase common stock

13

13

Issuance of deferred common share units

90

90

Net income

16,574

16,574

Other comprehensive income

1,677

1,677

Balance, January 31, 2023

5,255

$

526

$

32,673

$

76,935

$

(2,753)

$

107,381

Balance, November 1, 2023

5,271

$

526

$

32,775

$

79,072

$

1,170

$

113,543

Stock compensation expense

48

48

Compensation related to issuance of option to purchase common stock

13

13

Issuance of deferred common share units

90

90

Net income

92

92

Other comprehensive income

1

1

Balance, January 31, 2024

5,271

$

526

$

32,926

$

79,164

$

1,171

$

113,787

Balance, May 1, 2022

 

5,240

$

524

$

32,383

$

54,828

$

(4,573)

$

83,162

Issuance of restricted common stock

15

2

162

164

Compensation related to issuance of option to purchase common stock

38

38

Issuance of deferred common share units

90

90

Net income

22,107

22,107

Other comprehensive income

 

1,820

 

1,820

Balance, January 31, 2023

 

5,255

$

526

$

32,673

$

76,935

$

(2,753)

$

107,381

Balance, May 1, 2023

5,255

$

526

$

32,686

$

76,618

$

1,170

$

111,000

Issuance of restricted common stock

16

Stock compensation expense

112

112

Compensation related to issuance of option to purchase common stock

38

38

Issuance of deferred common share units

90

90

Net income

2,546

2,546

Other comprehensive income

1

1

Balance, January 31, 2024

 

5,271

$

526

$

32,926

$

79,164

$

1,171

$

113,787

The accompanying notes to unaudited condensed consolidated financial statements are an integral part of these unaudited condensed consolidated financial statements.

5

AMREP CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

Nine Months ended January 31, 2024 and 2023

(Amounts in thousands)

Nine Months ended January 31,

    

2024

    

2023

CASH FLOWS FROM OPERATING ACTIVITIES:

 

  

 

  

Net income

$

2,546

$

22,107

Adjustments to reconcile net income to net cash provided by (used in) operating activities:

 

  

 

  

Depreciation

 

107

 

35

Non-cash credits and charges:

 

 

Stock-based compensation

 

276

 

198

Deferred income tax provision

 

669

 

(14,547)

Net periodic pension cost

 

67

 

(254)

Pension settlement expense

2,336

Changes in assets and liabilities:

 

  

 

  

Real estate inventory and investment assets

 

(1,297)

 

(6,193)

Other assets

 

582

 

(860)

Accounts payable and accrued expenses

 

202

 

(1,280)

Taxes payable (receivable), net

 

229

 

(2,955)

Net cash provided by (used in) operating activities

 

3,381

 

(1,413)

CASH FLOWS FROM INVESTING ACTIVITIES:

 

 

Capital expenditures of property and equipment

 

(311)

 

(124)

Purchase of short-term investments

(5,043)

Net cash used in investing activities

 

(5,354)

 

(124)

CASH FLOWS FROM FINANCING ACTIVITIES:

 

 

Proceeds from debt financing

 

 

50

Principal debt payments

 

(7)

 

(1,831)

Net cash used in financing activities

 

(7)

 

(1,781)

Decrease in cash and cash equivalents

 

(1,980)

 

(3,318)

Cash and cash equivalents, beginning of period

 

19,993

 

15,721

Cash and cash equivalents, end of period

$

18,013

$

12,403

SUPPLEMENTAL CASH FLOW INFORMATION:

 

  

 

  

Interest paid

$

$

55

The accompanying notes to unaudited condensed consolidated financial statements are an integral part of these unaudited condensed consolidated financial statements.

6

AMREP CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

Three and Nine Months Ended January 31, 2024 and 2023

(1)           SUMMARY OF SIGNIFICANT ACCOUNTING AND FINANCIAL REPORTING POLICIES

The accompanying unaudited condensed consolidated financial statements have been prepared by AMREP Corporation (the “Company”) pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) for interim financial information, and do not include all the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. The Company, through its subsidiaries, is primarily engaged in two business segments: land development and homebuilding. The Company has no foreign sales. Unless the context otherwise indicates, all references to the Company in this quarterly report on Form 10-Q include the Company and its subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation.

In the opinion of management, these unaudited condensed consolidated financial statements include all adjustments, which are of a normal recurring nature, considered necessary to reflect a fair statement of the results for the interim periods presented. The results of operations for such interim periods are not necessarily indicative of what may occur in future periods. Unless the context otherwise indicates, all references to 2024 and 2023 are to the fiscal years ending April 30, 2024 and 2023.

The unaudited condensed consolidated financial statements herein should be read in conjunction with the Company’s annual report on Form 10-K for the year ended April 30, 2023, which was filed with the SEC on July 25, 2023 (the “2023 Form 10-K”). The significant accounting policies used in preparing these unaudited condensed consolidated financial statements are consistent with the accounting policies described in the 2023 Form 10-K, except for the following newly adopted policies:

Cash and Cash Equivalents: Cash equivalents are short-term, highly liquid investments that are readily convertible to known amounts of cash and are subject to an insignificant risk of change in value because of changes in interest rates. A debt security is classified as a cash equivalent if it meets these criteria and has an original maturity of ninety days or less when purchased. Restricted cash consists of cash deposits with a bank that are restricted due to subdivision improvement agreements with a governmental authority. Interest payments on cash and cash equivalents are recorded as income on the statement of operations.
Short-Term Investments: Short-term investments are held-to-maturity debt investments that have original maturities of greater than ninety days when purchased and remaining maturities of less than one year. Held-to-maturity debt investments are debt investments, such as certificates of deposit and U.S. government securities, that the Company has the positive intent and ability to hold to maturity. Held-to-maturity debt investments are recorded at their original purchase amount (and are reviewed for impairment when events or changes in circumstances indicate the carrying value may not be recoverable) with interest payments recorded as income on the statement of operations.

New Accounting Pronouncements: In November 2023, the Financial Accounting Standards Board issued Accounting Standards Update (“ASU”) 2019-07, Segment Reporting, which provides for enhanced disclosures about significant segment expenses. ASU 2019-07 will be effective for the Company’s fiscal year beginning May 1, 2024. The adoption of ASU 2019-07 by the Company is not expected to have a material effect on its consolidated financial statements. There are no other new accounting standards or updates to be adopted that the Company currently believes might have a significant impact on its unaudited condensed consolidated financial statements.

(2)         CASH AND CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS

As of January 31, 2024, cash and cash equivalents and short-term investments consist of (in thousands):

Cash and Cash

Short-Term

    

Equivalents

    

Investments

Cash

$

12,008

$

Certificates of Deposit

 

2,000

U.S. Government Securities

 

6,005

3,043

Total

$

18,013

$

5,043

7

As of April 30, 2023, the Company had cash of $19,993,000 and no cash equivalents or short-term investments.

(3)         REAL ESTATE INVENTORY

Real estate inventory consists of (in thousands):

January 31, 

April 30, 

    

2024

    

2023

Land inventory in New Mexico

$

57,007

$

59,361

Land inventory in Colorado

 

3,705

3,445

Homebuilding model inventory

988

1,171

Homebuilding construction in process

6,398

1,648

Total

$

68,098

$

65,625

(4)          INVESTMENT ASSETS

Investment assets, net consist of (in thousands):

    

January 31,

    

April 30,

2024

2023

Land held for long-term investment

$

9,142

$

8,961

Owned real estate leased or intended to be leased

 

3,445

 

4,802

Less accumulated depreciation

(76)

(16)

Owned real estate leased or intended to be leased, net

3,369

4,786

Total

$

12,511

$

13,747

As of January 31, 2024, nine homes were leased to residential tenants. As of April 30, 2023, eight homes were leased to residential tenants and two buildings under construction were leased to commercial tenants. Depreciation associated with owned real estate leased or intended to be leased was $12,000 and $60,000 for the three and nine months ended January 31, 2024 and $3,000 for each of the three and nine months ended January 31, 2023.

(5)          OTHER ASSETS

Other assets consist of (in thousands):

    

January 31, 

    

April 30, 

2024

2023

Prepaid expenses

$

907

$

1,536

Miscellaneous assets

303

362

Property

1,461

1,251

Equipment

467

366

Less accumulated depreciation of property and equipment

(313)

(266)

Property and equipment, net

1,615

1,351

Total

$

2,825

$

3,249

Prepaid expenses as of January 31, 2024 primarily consist of land development cash collateralized performance guaranties, insurance and income taxes. Prepaid expenses as of April 30, 2023 primarily consist of land development cash collateralized performance guaranties, stock compensation, insurance and income and real estate taxes. Amortized lease cost for right-of-use assets associated with leases of office facilities was $7,000 and $19,000 for the three and nine months ended January 31, 2024 and $6,000 and $18,000 for the three and nine months ended January 31, 2023. Depreciation expense associated with property and equipment was $19,000 and $47,000 for the three and nine months ended January 31, 2024 and $12,000 and $33,000 for the three and nine months ended January 31, 2023.

8

(6)          ACCOUNTS PAYABLE AND ACCRUED EXPENSES

Accounts payable and accrued expenses consist of (in thousands):

    

January 31, 

    

April 30, 

2024

2023

Land development and homebuilding operations

Accrued expenses

$

1,271

$

1,028

Trade payables

 

2,110

 

1,870

Customer deposits

1,180

1,319

4,561

4,217

Corporate operations

421

634

Total

$

4,982

$

4,851

(7)          NOTES PAYABLE

The following tables present information on the Company’s notes payable as of January 31, 2024 (in thousands):

    

Principal Amount

    

Available for

Outstanding

New Borrowings

Principal Amount

January 31, 

January 31, 

April 30, 

Loan Identifier

Lender

2024

2024

    

2023

Revolving Line of Credit

BOKF

 

$

4,177

 

$

 

$

Equipment Financing

DC

37

44

Total

$

4,177

$

37

$

44

January 31, 2024

Mortgaged Property

Loan Identifier

    

Interest Rate

    

Book Value

    

Scheduled Maturity

Revolving Line of Credit

 

8.51

%  

$

1,721

August 2025

Equipment Financing

 

2.35

%  

 

37

June 2028

Principal Repayments

Three Months Ended

Nine Months Ended

January 31,

January 31,

Loan Identifier

    

2024

    

2023

    

2024

    

2023

Revolving Line of Credit

    

$

    

$

    

$

    

$

Equipment Financing

 

2

 

2

 

7

 

5

Total

$

2

$

2

$

7

$

5

Capitalized Interest and Fees

Three Months Ended

Nine Months Ended

January 31,

January 31,

Loan Identifier

    

2024

    

2023

    

2024

    

2023

Revolving Line of Credit

$

$

$

$

Equipment Financing

 

 

 

 

Total

$

$

$

$

As of January 31, 2024, the Company was in compliance with the financial covenants contained in the loan documentation for the then outstanding notes payable. Refer to Note 6 to the consolidated financial statements contained in the 2023 Form 10-K for additional detail about the above notes payable.

As of January 31, 2024, the Company had (a) a letter of credit outstanding under its Revolving Line of Credit in the principal amount of $172,000 in favor of a municipality guarantying the completion of improvements in a subdivision being constructed by the Company and (b) $250,000 reserved under its Revolving Line of Credit for credit card usage. The amounts under the letter of credit and loan reserve are not reflected as outstanding principal in notes payable.

9

In June 2021, Wymont LLC (“Wymont”), a subsidiary of the Company, entered into a Development Loan Agreement with BOKF, NA dba Bank of Albuquerque (“BOKF”). The Development Loan Agreement was evidenced by a Non-Revolving Line of Credit Promissory Note and was secured by a Mortgage, Security Agreement and Financing Statement, between Wymont and BOKF, with respect to the La Mirada subdivision. The loan was scheduled to mature in June 2024. The Company made principal repayments of $1,826,000 during the nine months ended January 31, 2023 and the loan was terminated in October 2023.

The following table summarizes the notes payable scheduled principal repayments subsequent to January 31, 2024 (in thousands):

Fiscal Year

    

Scheduled Payments

2024

$

2

2025

 

8

2026

 

8

Thereafter

 

19

Total

$

37

(8)          REVENUES

Land sale revenues. Land sale revenues are sales of developed residential land, developed commercial land and undeveloped land.

Home sale revenues. Home sale revenues are from homes constructed and sold by the Company in the Albuquerque, New Mexico metropolitan area.

Other revenues. Other revenues consist of (in thousands):

Three Months 

Nine Months 

Ended January 31,

Ended January 31,

    

2024

    

2023

    

2024

    

2023

Sale of investment assets

$

5,701

$

$

5,701

$

Oil and gas royalties

34

140

Landscaping revenues

213

639

Miscellaneous other revenues

 

138

 

77

 

390

 

462

Total

$

6,052

$

111

$

6,730

$

602

Sale of investment assets for the three and nine months ended January 31, 2024 consist of the sale of two buildings leased to commercial tenants.

Refer to Note 7 to the consolidated financial statements contained in the 2023 Form 10-K for additional detail about the categories of other revenues.

Miscellaneous other revenues for the three and nine months ended January 31, 2024 primarily consist of extension fees for purchase contracts, forfeited deposits and residential rental revenues. Miscellaneous other revenues for the three and nine months ended January 31, 2023 primarily consist of extension fees for purchase contracts and residential rental revenues.

Major customers.

Substantially all of the land sale revenues were received from two customers and three customers for the three and nine months ended January 31, 2024 and two customers and three customers for the three and nine months ended January 31, 2023. Other than receivables for immaterial amounts (if any), there were no outstanding receivables from these customers as of January 31, 2024 or January 31, 2023.
There was one customer that contributed in excess of 10% of the Company’s revenues for the three months ended January 31, 2024. The revenue from such customer for the three months ended January 31, 2024 was $2,928,000, with this revenue reported in the Company’s land development business segment. There were two customers that each contributed in excess of 10% of the Company’s revenues for the three months ended January 31, 2023. The revenues for each such customer for the three months ended January 31, 2023 were as follows: $1,025,000 and $3,778,000, with all of these revenues reported in the Company’s land development business segment.

10

There were two customers that each contributed in excess of 10% of the Company’s revenues for the nine months ended January 31, 2024. The revenues from each such customer for the nine months ended January 31, 2024 were as follows: $3,500,000 and $8,937,000, with all of these revenues reported in the Company’s land development business segment. There were three customers that each contributed in excess of 10% of the Company’s revenues for the nine months ended January 31, 2023. The revenues for each such customer for the nine months ended January 31, 2023 were as follows: $4,369,000, $5,246,000 and $7,763,000, with all of these revenues reported in the Company’s land development business segment.

(9)          COST OF REVENUES

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

    

Three Months Ended 

    

Nine Months Ended

January 31,

January 31,

    

2024

    

2023

    

2024

    

2023

Land sale cost of revenues

$

3,368

$

4,330

$

12,770

$

17,317

Less:

 

Public improvement district reimbursements

 

(329)

(366)

(575)

(691)

Private infrastructure covenant reimbursements

 

(114)

(228)

(388)

(522)

Payments for impact fee credits

 

(278)

(100)

(1,295)

(689)

Land sale cost of revenues, net

$

2,647

$

3,636

$

10,512

$

15,415

Home sale cost of revenues include costs for residential homes that were sold.

Other cost of revenues for the three and nine months ended January 31, 2024 consist of the costs associated with the sale of investment assets and cost of goods sold for landscaping services. There were no other cost of revenues for the three and nine months ended January 31, 2023.

(10)          GENERAL AND ADMINISTRATIVE EXPENSES

General and administrative expenses consist of (in thousands):

Three Months Ended January 31,

Nine Months Ended January 31,

    

2024

    

2023

    

2024

    

2023

Operations

Land development

$

1,172

$

907

$

2,836

$

2,156

Homebuilding

 

283

264

887

795

Corporate

 

446

402

1,298

947

Total

$

1,901

$

1,573

$

5,021

$

3,898

Pension settlement

$

$

2,336

$

$

2,336

(11)          BENEFIT PLANS

Pension plan

Refer to Note 11 to the consolidated financial statements contained in the 2023 Form 10-K for detail regarding the Company’s defined benefit pension plan. The Company recognizes the known changes in the funded status of the pension plan in the period in which the changes occur through other comprehensive income, net of the related income tax effect. The Company recorded de minimis other comprehensive income for the three and nine months ended January 31, 2024. The Company recorded, net of tax, other comprehensive income of $1,677,000 and $1,820,000 for the three and nine months ended January 31, 2023 to account for the net effect of changes to the pension liability and a pension settlement expense due to the Company’s defined benefit pension plan paying lump sum payouts of pension benefits to former employees. The Company did not make any contributions to the pension plan for the three and nine months ended January 31, 2024 or January 31, 2023. The Company’s pension plan was terminated in December 2023.

11

Simple IRA

Refer to Note 11 to the consolidated financial statements contained in the 2023 Form 10-K for detail regarding the Company’s Simple IRA plan. The Company’s Simple IRA plan was terminated in December 2023.

Equity compensation plan

Refer to Note 11 to the consolidated financial statements contained in the 2023 Form 10-K for detail regarding the AMREP Corporation 2016 Equity Compensation Plan (the “Equity Plan”). The summary of the restricted share award activity for the nine months ended January 31, 2024 presented below represents the maximum number of shares that could become vested after that date:

    

Number of

Restricted share awards

Shares

Non-vested as of April 30, 2023

 

26,267

Granted during the nine months ended January 31, 2024

 

16,400

Vested during the nine months ended January 31, 2024

 

(12,199)

Forfeited during the nine months ended January 31, 2024

 

Non-vested as of January 31, 2024

 

30,468

The Company recognized non-cash compensation expense related to the vesting of restricted shares of common stock net of forfeitures of $67,000 and $170,000 for the three and nine months ended January 31, 2024 and $39,000 and $25,000 for the three and nine months ended January 31, 2023. As of January 31, 2024, there was $250,000 of unrecognized compensation expense related to restricted shares of common stock previously issued under the Equity Plan that had not vested, which is expected to be recognized over the remaining vesting term not to exceed three years.

In November 2021, the Company granted Christopher V. Vitale, the President and Chief Executive Officer of the Company, an option to purchase 50,000 shares of common stock of the Company under the Equity Plan with an exercise price of $14.24 per share. As of January 31, 2024, the option had not been exercised, cancelled or forfeited. The Company recognized non-cash compensation expense related to the option of $13,000 and $38,000 for the three and nine months ended January 31, 2024 and $13,000 and $38,000 for the three and nine months ended January 31, 2023. As of January 31, 2024, the option was in-the-money and therefore was included in “weighted average number of common shares outstanding – diluted” when calculating diluted earnings per share. As of January 31, 2023, the option was out-of-the-money and therefore was not included in “weighted average number of common shares outstanding – diluted” when calculating diluted earnings per share.

Director compensation non-cash expense, which is recognized for the annual grant of deferred common share units to non-employee members of the Company’s Board of Directors ratably over each director’s service in office during the calendar year, was $23,000 and $68,000 for the three and nine months ended January 31, 2024 and $23,000 and $68,000 for the three and nine months ended January 31, 2023. As of January 31, 2024, there was $8,000 of accrued compensation expense related to the deferred common share units expected to be issued in December 2024. As of January 31, 2023, there was $8,000 of accrued compensation expense related to the deferred common share units issued in December 2023.

(12)          OTHER INCOME

Other income during the three and nine months ended January 31, 2023 consists of $1,803,000 in connection with the sale of all of the Company’s minerals and mineral rights in and under approximately 147 surface acres of land in Brighton, Colorado. There was no other income for the three and nine months ended January 31, 2024.

(13)          INCOME TAXES

Refer to Note 13 to the consolidated financial statements contained in the 2023 Form 10-K for detail regarding the worthless stock deduction. As a result of the worthless stock deduction, the Company incurred an operating tax loss during the three and nine months ended January 31, 2023 that yielded an income tax benefit of $13,058,000 for U.S. federal corporate income taxes and an income tax benefit of $3,013,000 for New Mexico state corporate income taxes.

12

(14)         INFORMATION ABOUT THE COMPANY’S OPERATIONS IN DIFFERENT INDUSTRY SEGMENTS

The following tables set forth summarized data relative to the industry segments in which the Company operated for the periods indicated (in thousands):