AMREP(AXR) - 2025 Q4 - Annual Report

Part I Item 1. Business AMREP Corporation primarily develops land and builds homes in Rio Rancho, New Mexico, navigating market and regulatory challenges - The company's primary business segments are land development and homebuilding, with no foreign sales or activities outside the United States[11] - A substantial portion of the company's business is conducted in Rio Rancho, New Mexico, the state's third-largest city[11] Land Development The Land Development segment develops and sells residential and commercial land in Sandoval County, utilizing reimbursement mechanisms and owning mineral rights - As of April 30, 2025, the Company owned approximately 16,600 acres in Sandoval County, New Mexico, for development and sale[12] - In fiscal year 2025, 100% of developed residential land sales were made to just three homebuilders, indicating customer concentration[13] Property Owned in New Mexico Development Projects (as of April 30, 2025) | Project | Developed Residential Lots | Developed Commercial/Industrial Acres | Under Development Residential Acres | Under Development Commercial/Industrial Acres | Undeveloped Acres | | :--- | :--- | :--- | :--- | :--- | :--- | | Lomas Encantadas | 120 | — | 126 | 6 | — | | Commerce Center | — | 29 | — | — | — | | Paseo Gateway | — | — | — | — | 327 | | Hawk Site | 2 | 35 | 93 | 101 | — | | Hawk Adjacent | — | — | 45 | — | — | | Papillon | — | — | — | — | 656 | | Park West Village | 22 | — | — | — | — | | La Mirada | 30 | 1 | — | — | — | | Playa del Sur | — | — | 5.5 | — | — | - The company utilizes public improvement districts, private infrastructure covenants, and the sale of impact fee credits to be reimbursed for certain development costs[18][19][20] - The Company owns mineral rights under approximately 55,000 surface acres of land in Sandoval County, New Mexico[24] Homebuilding The Homebuilding segment constructs and sells single-family homes in New Mexico, facing seasonality and intense competition - The company builds and sells single-family homes, offering both built-to-order and speculative ("spec") options[25] - The homebuilding business experiences seasonality, with revenues and cash flow generally increasing during the first and fourth fiscal quarters due to the timing of home closings[26] - The housing industry in New Mexico is highly competitive, with pressure on sales volume and margins from national, regional, and local homebuilders, as well as from the resale and rental markets[27] Materials and Labor The company faces challenges with fluctuating material costs and limited skilled labor, mitigating risks by establishing costs near contract signing - The cost and availability of building materials are subject to fluctuations from commodity prices and government regulations like tariffs[28] - Sourcing qualified labor at reasonable prices is challenging as labor supply growth has not kept pace with construction demand[28] Regulatory and Environmental Matters Operations are subject to extensive federal, state, and local regulations, potentially causing delays and cost increases, with additional climate and water risks - Operations are subject to extensive regulations which can lead to extended timelines for receiving necessary government approvals, delaying development and construction[29] - Regulations related to greenhouse gas emissions, climate change, or water availability could restrict development and increase costs[30] Human Capital Resources AMREP Corporation employed 49 people as of April 30, 2025, focusing on talent retention and good employee relations - The company employed 49 people as of April 30, 2025, with 48 full-time employees[32] - Employees are not represented by any union, and the company considers its employee relations to be good[32] Item 1A. Risk Factors As a smaller reporting company, AMREP Corporation has opted not to provide risk factor disclosures in this report - The Company, as a smaller reporting company, has opted out of providing risk factor disclosures in this report[36] Item 1B. Unresolved Staff Comments This item is not applicable due to the absence of unresolved staff comments - Not applicable[37] Item 1C. Cybersecurity The company manages cybersecurity risks through third-party providers and Board oversight, reporting no material incidents in fiscal 2024 or 2025 - The Company relies on third-party service providers to operate, monitor, and manage its IT infrastructure and cybersecurity risks[38] - The Board of Directors' Audit Committee is responsible for overseeing the company's risk assessment policies, including cybersecurity risks[40] - For fiscal years 2025 and 2024, the company is not aware of any cybersecurity threats or incidents that have had a material effect on its business, operations, or financial condition[39] Item 2. Properties The company's executive offices are leased in Pennsylvania, while operational facilities are in a company-owned building in Rio Rancho, New Mexico - Executive offices are located in leased space in Havertown, PA, while operational offices for its business segments are in a company-owned building in Rio Rancho, NM[42] Item 3. Legal Proceedings The company is involved in routine legal matters, which management expects will not materially impact its financial position or operations - The Company is involved in routine legal matters but does not expect them to have a material adverse effect on its financial condition[43] Item 4. Mine Safety Disclosures This item is not applicable to the company's operations - Not applicable[44] Part II Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities AMREP's common stock (AXR) trades thinly on the NYSE due to concentrated ownership, with no cash dividends paid since fiscal year 2008 - The company's common stock (Symbol: AXR) is listed on the New York Stock Exchange[49] - The stock is thinly traded, with an average daily volume of 16,350 shares over the 30 days ending April 30, 2025. This is partly due to a high concentration of ownership, with three shareholders holding approximately 51% of the stock[50] - The company has not paid any cash dividends on its common stock since fiscal year 2008 and does not guarantee future dividends[52] Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations Fiscal 2025 net income increased to $12.7 million, driven by land development margins despite a slight revenue decrease, maintaining strong liquidity CRITICAL ACCOUNTING ESTIMATES Key accounting estimates involve land sale costs, asset impairment, uncertain tax positions, and deferred tax asset recoverability, based on judgment and historical data - Key accounting estimates involve land sale cost calculations, asset impairment tests, uncertain tax positions, and recoverability of deferred tax assets[56] - Critical assumptions for these estimates are based on historical experience, third-party data, and management's judgment regarding future events and conditions, such as sales prices and development costs[57][59] RESULTS OF OPERATIONS Fiscal 2025 net income rose to $12.7 million despite a 3% revenue decrease, driven by improved land sale margins offsetting lower home sale margins Net Income and EPS Comparison (FY 2025 vs. FY 2024) | Metric | 2025 ($) | 2024 ($) | | :--- | :--- | :--- | | Net Income | 12,716,000 | 6,690,000 | | Diluted EPS | 2.37 | 1.25 | Revenues by Segment (in thousands) | Revenue Type | 2025 ($ thousands) | 2024 ($ thousands) | Change ($ thousands) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Land sale revenues | 25,648 | 26,825 | (1,177) | (4)% | | Home sale revenues | 21,248 | 17,187 | 4,061 | 24% | | Other revenues | 2,798 | 7,357 | (4,559) | (62)% | | Total | 49,694 | 51,369 | (1,675) | (3)% | Home Sale Metrics | Metric | 2025 (Units) | 2024 (Units) | | :--- | :--- | :--- | | Homes sold | 50 | 36 | | Average selling price ($) | 425,000 | 477,000 | - Land sale gross margin increased from 36% in 2024 to 52% in 2025, primarily due to changes in reimbursement credits and the mix of property sold, including a larger sale of low-cost undeveloped land[64] - Home sale gross margin decreased from 25% in 2024 to 21% in 2025, attributed to the mix of homes sold, increased sales incentives, and higher material and labor costs[66] General and Administrative Expenses (in thousands) | Segment | 2025 ($ thousands) | 2024 ($ thousands) | Change ($ thousands) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Land development | 3,847 | 3,677 | 170 | 5% | | Homebuilding | 1,764 | 1,214 | 550 | 45% | | Corporate | 1,667 | 1,980 | (313) | (16)% | | Total | 7,278 | 6,871 | 407 | 6% | LIQUIDITY AND CAPITAL RESOURCES Liquidity strengthened in fiscal 2025, with cash and equivalents increasing 32% to $39.9 million, supported by operating cash flow and a revolving line of credit Cash, Cash Equivalents and Restricted Cash (in thousands) | Category | 2025 ($ thousands) | 2024 ($ thousands) | Change ($ thousands) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Cash | 10,651 | 10,465 | 186 | 2% | | U.S. Government Securities | 28,815 | 19,229 | 9,586 | 50% | | Restricted Cash | 455 | 547 | (92) | (17)% | | Total | 39,921 | 30,241 | 9,680 | 32% | Cash Flow Summary (in thousands) | Activity | 2025 ($ thousands) | 2024 ($ thousands) | | :--- | :--- | :--- | | Net cash provided by operating activities | 10,242 | 10,714 | | Net cash used in investing activities | (553) | (457) | | Net cash used in financing activities | (9) | (9) | - The company's defined benefit pension plan was terminated in 2024, and residual assets of $547,000 were transferred to the 401(k) plan, recognized as restricted cash[76] - Real estate inventory increased slightly to $66.8 million, with a significant 216% increase in homebuilding model and completed inventory, offset by a 13% decrease in land inventory[80] Item 8. Financial Statements and Supplementary Data This section presents the consolidated financial statements for fiscal years 2024 and 2025, including management's internal control report and detailed notes Management's Annual Report on Internal Control Over Financial Reporting Management concluded that the company's internal control over financial reporting was effective as of April 30, 2025, based on the COSO 2013 framework - Management concluded that the company's internal control over financial reporting was effective as of April 30, 2025[91] Consolidated Financial Statements Consolidated financial statements show total assets at $133.8 million and shareholders' equity at $130.0 million, with fiscal 2025 net income of $12.7 million Consolidated Balance Sheet Highlights (in thousands) | Account | April 30, 2025 ($ thousands) | April 30, 2024 ($ thousands) | | :--- | :--- | :--- | | Total Assets | 133,776 | 122,830 | | Total Liabilities | 3,815 | 4,780 | | Total Shareholders' Equity | 129,961 | 118,050 | Consolidated Statement of Operations Highlights (in thousands) | Account | FY 2025 ($ thousands) | FY 2024 ($ thousands) | | :--- | :--- | :--- | | Total Revenues | 49,694 | 51,369 | | Operating Income | 12,107 | 7,602 | | Net Income | 12,716 | 6,690 | Consolidated Statement of Cash Flows Highlights (in thousands) | Activity | FY 2025 ($ thousands) | FY 2024 ($ thousands) | | :--- | :--- | :--- | | Net cash provided by operating activities | 10,242 | 10,714 | | Increase in cash, cash equivalents and restricted cash | 9,680 | 10,248 | Notes to Consolidated Financial Statements Notes provide detailed accounting policies, asset breakdowns, debt, revenue recognition, tax positions, and segment data for land development and homebuilding - The company's two reportable segments are land development and homebuilding[126][212] - As of April 30, 2025, the company had a revolving line of credit with $3.5 million available for new borrowings and total outstanding notes payable of only $26,000[162] - In fiscal 2025, two customers in the land development segment each contributed over 10% of the company's total revenues, with amounts of $11.8 million and $6.0 million[169] - The company has federal net operating loss carryforwards of $32.5 million as of April 30, 2025, which do not expire[192] Segment Profit (in thousands) | Segment | FY 2025 ($ thousands) | FY 2024 ($ thousands) | | :--- | :--- | :--- | | Land Development | 11,329 | 6,733 | | Homebuilding | 2,445 | 2,849 | Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure No changes or disagreements with accountants on accounting and financial disclosure occurred during the period - None[221] Item 9A. Controls and Procedures Management concluded that disclosure controls and procedures were effective as of April 30, 2025, with no material changes to internal control - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of April 30, 2025[222] - No material changes to internal control over financial reporting occurred during the fourth quarter of fiscal 2025[224] Part III Item 10. Directors, Executive Officers and Corporate Governance Information on directors, executive officers, and corporate governance is incorporated by reference from the 2025 Proxy Statement - Required information is incorporated by reference from the Company's Proxy Statement for its 2025 Annual Meeting of Shareholders[228] Item 11. Executive Compensation Executive and director compensation details are incorporated by reference from the company's 2025 Proxy Statement - Required information is incorporated by reference from the Company's Proxy Statement[229] Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters Security ownership and equity compensation plan details are incorporated by reference from the company's 2025 Proxy Statement - Required information is incorporated by reference from the Company's Proxy Statement[230] Item 13. Certain Relationships and Related Transactions, and Director Independence Related party transactions and director independence information is incorporated by reference from the company's 2025 Proxy Statement - Required information is incorporated by reference from the Company's Proxy Statement[232] Item 14. Principal Accounting Fees and Services Principal accounting fees and services information is incorporated by reference from the company's 2025 Proxy Statement - Required information is incorporated by reference from the Company's Proxy Statement[233] Part IV Item 15. Exhibits, Financial Statement Schedules This section lists the consolidated financial statements, schedules, and an index of exhibits filed as part of the Form 10-K - This section lists the consolidated financial statements filed with the report, including the Balance Sheets, Statements of Operations, and Cash Flows[235][238] - An index of exhibits filed with the Form 10-K is provided, including governance documents, material contracts, and certifications[236][244][245][246]