Overview of the Company’s Financial Performance

The financial report provides an overview of AMREP Corporation’s financial performance for the three and nine months ended January 31, 2025 compared to the same periods in the prior year. The key highlights are:

• Net income increased significantly, from $92,000 ($0.02 per diluted share) in Q3 2024 to $717,000 ($0.13 per diluted share) in Q3 2025, and from $2,546,000 ($0.48 per diluted share) in the first nine months of 2024 to $8,823,000 ($1.64 per diluted share) in the first nine months of 2025.

• Total revenues decreased 41% in Q3 2025 compared to Q3 2024, but increased 21% in the first nine months of 2025 compared to the same period in 2024.

• Land sale revenues decreased 28% in Q3 2025 but increased 16% in the first nine months of 2025. Home sale revenues increased 57% in Q3 2025 and 93% in the first nine months of 2025.

• Cost of revenues decreased 52% in Q3 2025 and increased 3% in the first nine months of 2025.

• General and administrative expenses decreased 1% in Q3 2025 but increased 6% in the first nine months of 2025.

• Interest income, net increased from $262,000 in Q3 2024 to $410,000 in Q3 2025, and from $473,000 in the first nine months of 2024 to $1,267,000 in the first nine months of 2025.

• The company had a provision for income taxes of $125,000 in Q3 2025 and $1,012,000 in the first nine months of 2025.

Revenue and Profit Trends

The company experienced mixed revenue trends, with land sale revenues decreasing in Q3 2025 but increasing in the first nine months, while home sale revenues increased significantly in both periods. The changes in revenues were driven by factors such as the location, size and mix of land and homes sold, as well as the impact of affordability challenges on housing demand.

Gross margins improved for land sales but declined for home sales, primarily due to increases in the prices of building materials and labor. Overall, the company was able to achieve significant growth in net income, driven by higher revenues, improved land sale margins, and increased interest income.

Strengths and Weaknesses

The company’s key strengths include:

• Diversified revenue streams from land sales, home sales, and other sources
• Ability to generate strong cash flow from operations
• Healthy liquidity position with $37.4 million in cash, cash equivalents and restricted cash as of January 31, 2025

Potential weaknesses or challenges include:

• Exposure to volatility in the real estate market and housing demand
• Potential for future impairment charges on real estate inventory or investment assets
• Delays in municipal approvals, infrastructure availability, and utility response times impacting construction and revenues

Outlook for the Future

The company expects continued challenges in the housing market due to affordability issues, rising interest rates, and macroeconomic factors. This has led the company to reduce the number and scope of active land development projects and delay new projects. As a result, the company anticipates a reduction in revenues from the sale of developed residential land during 2025 and the fiscal year ending April 30, 2026.

However, the company’s strong liquidity position and diversified revenue streams provide a degree of resilience. The company will need to closely monitor market conditions and adapt its strategies accordingly to navigate the current environment and position itself for future growth opportunities.