10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

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

For the quarterly period ended July 31, 2018

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.
620 West Germantown Pike, Suite 175 Plymouth Meeting, PA	19462
Address of Principal Executive Offices	Zip Code

(610) 487-0905

Registrant’s Telephone Number, Including Area Code

Not Applicable

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

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 x     No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted 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 and post such files).  Yes x    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 x
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 x

Number of Shares of Common Stock, par value $.10 per share, outstanding at September 7, 2018 – 8,127,904.

AMREP CORPORATION AND SUBSIDIARIES

INDEX

		PAGE NO.
PART I. FINANCIAL INFORMATION		1
Item 1.	Financial Statements	1
	Consolidated Balance Sheets  July 31, 2018 (Unaudited) and April 30, 2018	1
	Consolidated Statements of Operations and Retained Earnings (Unaudited) Three Months Ended July 31, 2018 and 2017	2
	Consolidated Statements of Comprehensive Income (Unaudited) Three Months Ended July 31, 2018 and 2017	3
	Consolidated Statements of Cash Flows (Unaudited)  Three Months Ended July 31, 2018 and 2017	4
	Notes to Consolidated Financial Statements (Unaudited)	5
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	13
Item 4.	Controls and Procedures	19
PART II. OTHER INFORMATION		20
Item 5.	Other Information	20
Item 6.	Exhibits	20
SIGNATURE		21
EXHIBIT INDEX		22

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

AMREP CORPORATION AND SUBSIDIARIES

Consolidated Balance Sheets

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

	July 31, 2018			April 30, 2018
		(Unaudited)
ASSETS
Cash and cash equivalents	$	15,100		$	14,041
Receivables, net		5,866			5,901
Real estate inventory		59,174			58,874
Investment assets		9,713			9,714
Property, plant and equipment, net		9,492			9,745
Other assets, net		2,329			2,321
Taxes receivable, net		-			209
Deferred income taxes, net		5,045			5,060
TOTAL ASSETS	$	106,719		$	105,865
LIABILITIES AND SHAREHOLDERS’ EQUITY
LIABILITIES:
Accounts payable and accrued expenses	$	8,419		$	8,215
Taxes payable, net		65			-
Notes payable, net		2,071			1,843
Other liabilities and deferred revenue		122			149
Accrued pension costs		9,011			9,051
TOTAL LIABILITIES		19,688			19,258
SHAREHOLDERS’ EQUITY:
Common stock, $.10 par value; shares authorized – 20,000,000; shares issued – 8,353,154 at July 31, 2018 and 8,323,954 at April 30, 2018		835			832
Capital contributed in excess of par value		51,125			50,922
Retained earnings		47,063			47,002
Accumulated other comprehensive loss, net		(7,777	)		(7,934	)
Treasury stock, at cost; 225,250 shares at July 31, 2018 and April 30, 2018		(4,215	)		(4,215	)
TOTAL SHAREHOLDERS’ EQUITY		87,031			86,607
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	106,719		$	105,865

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

1

AMREP CORPORATION AND SUBSIDIARIES

Consolidated Statements of Operations and Retained Earnings (Unaudited)

Three Months Ended July 31, 2018 and 2017

(Amounts in thousands, except per share amounts)

	2018			2017
REVENUES:
Fulfillment services	$	7,445		$	7,243
Real estate land sales		4,181			2,677
Other		89			1,406
		11,715			11,326
COSTS AND EXPENSES:
Real estate land sales		3,731			1,223
Operating and selling expenses:
Fulfillment services		6,338			6,094
Real estate		276			511
General and administrative expenses:
Fulfillment services		346			349
Real estate operations		188			114
Corporate operations		822			808
Interest expense		5			13
		11,706			9,112
Income before income taxes		9			2,214
(Benefit) provision for income taxes		(52	)		766
Net income		61			1,448
Retained earnings, beginning of period		47,002			46,764
Retained earnings, end of period	$	47,063		$	48,212
Earnings per share – basic and diluted	$	0.01		$	0.18
Weighted average number of common shares outstanding – basic		8,086			8,063
Weighted average number of common shares outstanding – diluted		8,124			8,083

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

2

AMREP CORPORATION AND SUBSIDIARIES

Consolidated Statements of Comprehensive Income (Unaudited)

Three Months Ended July 31, 2018 and 2017

(Amounts in thousands)

	2018		2017
Net income	$	61	$	1,448
Other comprehensive income, net of tax:
Decrease in pension liability, net of tax ($69 in 2019 and $98 in 2018)		157		225
Other comprehensive income		157		225
Total comprehensive income	$	218	$	1,673

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

3

AMREP CORPORATION AND SUBSIDIARIES

Consolidated Statements of Cash Flows (Unaudited)

Three Months Ended July 31, 2018 and 2017

(Amounts in thousands)

	2018			2017
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	61		$	1,448
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		291			321
Non-cash credits and charges:
Non-cash gain on settlement		-			(1,318	)
Non-cash deferred revenue recognized		-			(20	)
Provision for (recovery of) doubtful accounts		63			(21	)
Stock-based compensation		28			18
Net periodic pension cost		186			250
Changes in assets and liabilities:
Receivables		(28	)		452
Real estate inventory and investment assets		(299	)		733
Other assets		85			(13	)
Accounts payable and accrued expenses		204			(375	)
Taxes receivable (payable)		274			(1	)
Other liabilities and deferred revenue		(27	)		(366	)
Deferred income taxes		(54	)		770
Accrued pension costs		-			(563	)
Total adjustments		723			(133	)
Net cash provided by operating activities		784			1,315
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from corporate-owned life insurance policy		85			-
Capital expenditures – property, plant and equipment		(34	)		(10	)
Net cash provided by (used in) investing activities		51			(10	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from debt financing		1,044			-
Principal debt payments		(774	)		-
Payments for debt issuance costs		(46	)		-
Net cash provided by financing activities		224			-
Increase in cash and cash equivalents		1,059			1,305
Cash and cash equivalents, beginning of period		14,041			11,811
Cash and cash equivalents, end of period	$	15,100		$	13,116
SUPPLEMENTAL CASH FLOW INFORMATION:
Interest paid, net of amounts capitalized	$	1		$	-
Income taxes (refunded) paid, net	$	(271	)	$	1

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

4

AMREP CORPORATION AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Unaudited)

Three Months Ended July 31, 2018 and 2017

(1) SUMMARY OF SIGNIFICANT ACCOUNTING AND FINANCIAL REPORTING POLICIES

The accompanying unaudited 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: the real estate business operated by AMREP Southwest Inc. (“AMREP Southwest”) and its subsidiaries and the fulfillment services business operated by Palm Coast Data LLC (“Palm Coast”) and its affiliates. The Company’s foreign sales are insignificant. All significant intercompany accounts and transactions have been eliminated in consolidation.

In the opinion of management, these unaudited consolidated financial statements include all adjustments, which are of a normal recurring nature, considered necessary to reflect a fair presentation 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 2019 and 2018 are to the fiscal years ending April 30, 2019 and 2018 and all references to the first quarters of 2019 and 2018 mean the fiscal three month periods ended July 31, 2018 and 2017.

The unaudited 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, 2018, which was filed with the SEC on July 20, 2018 (the “2018 Form 10-K”). Certain 2018 balances in these financial statements have been reclassified to conform to the current year presentation with no effect on either net income or shareholders’ equity.

Summary of Significant Accounting Policies

The significant accounting policies used in preparing these consolidated financial statements are consistent with the accounting policies described in the 2018 Form 10-K, except for those adopted as described below.

Recently Adopted Accounting Pronouncements

Revenue Recognition

In May 2014, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers. Since that date, the FASB has issued additional ASUs providing further revenue recognition guidance (collectively, “Topic 606”). Topic 606 clarifies the principles for recognizing revenues and costs related to obtaining and fulfilling customer contracts, with the objective of improving financial reporting. The core principle of Topic 606 is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration the Company expects to receive in exchange for those goods or services. Topic 606 defines a five-step process to achieve this core principle, and more judgment and estimates are required under Topic 606 than were required under the prior generally accepted accounting principles of Topic 605, Revenue Recognition (“Topic 605”). In accordance with Topic 606, fulfillment services revenues are recognized as the services are performed in proportion to the transfer of control to the customer and real estate revenues are recognized at the time of sale when consideration has been exchanged and title has been conveyed to the buyer.

5

Topic 606 was effective for the Company’s fiscal year beginning May 1, 2018. The Company adopted Topic 606 using the modified retrospective method. Results for reporting periods beginning after May 1, 2018 are presented under Topic 606, while prior period amounts were not adjusted and continue to be reported in accordance with Topic 605. The adoption of Topic 606 had no impact on the Company’s results of operations.

Statements of Cash Flows

In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments. ASU 2016-15 reduces the diversity in practice regarding how certain cash receipts and cash payments are presented and classified in the statement of cash flows, including classifying proceeds from company-owned life insurance proceeds as an investing activity. ASU 2016-15 was effective for the Company’s fiscal year beginning May 1, 2018. The Company received life insurance proceeds of $85,000 during the first quarter of 2019, which is reflected in the accompanying Consolidated Statement of Cash Flows as an investing activity. The income associated with the life insurance proceeds was recognized in various years prior to the first quarter of 2019.

Recently Issued Accounting Pronouncements

In February 2016, the FASB issued ASU No. 2016-02, Leases. Since that date, the FASB has issued additional ASUs providing further guidance for lease transactions (collectively “ASU 2016-02”). ASU 2016-02 requires that a lessee recognize the assets and liabilities that arise from operating leases. A lessee should recognize in its balance sheet a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term. For leases with a term of twelve months or less, a lessee is permitted to make an accounting policy election by class of underlying asset not to recognize lease assets and lease liabilities. Upon adoption of ASU 2016-02, the Company will be required to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach. The amendments in ASU 2016-02 will be effective for the Company for fiscal year 2020 beginning on May 1, 2019. The Company has not yet concluded how the new standard will impact its consolidated financial statements.

In January 2018, the FASB issued ASU 2018-02, Income Statement – Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income, which permits the reclassification to retained earnings of certain tax effects resulting from the U.S. Tax Cuts and Jobs Act related to items in accumulated other comprehensive income. ASU 2018-02 may be applied retrospectively to each period in which the effect of the U.S. Tax Cuts and Jobs Act is recognized or may be applied in the period of adoption. ASU 2018-02 is effective for the Company’s fiscal year 2020 beginning May 1, 2019. The Company has not determined whether it will elect to reclassify such tax effects. The adoption of ASU 2018-02 by the Company is not expected to have a material effect on its consolidated financial statements.

In June 2018, the FASB issued ASU No. 2018-07, Compensation – Stock Compensation (Topic 718) – Improvements to Nonemployee Share-based Payment Accounting. ASU 2018-07 addresses several aspects of the accounting for nonemployee share-based payment transactions, including share-based payment transactions for acquiring goods and services from nonemployees. ASU 2018-07 is effective for the Company’s fiscal year 2020 beginning May 1, 2019. The adoption of ASU 2018-07 by the Company is not expected to have a material effect on its consolidated financial statements.

6

(2) RECEIVABLES

Receivables, net consist of:

	July 31, 2018			April 30, 2018
	(in thousands)
Fulfillment services	$	6,196		$	6,189
Real estate operations		26			10
Corporate operations		21			16
		6,243			6,215
Less allowance for doubtful accounts		(377	)		(314	)
	$	5,866		$	5,901

During the three months ended July 31, 2018, revenues from one major customer of the Company’s fulfillment services business totaled $1,154,000 or approximately 9.9% of total revenues for the Company. As of July 31, 2018, the Company’s fulfillment services business had $771,000 of outstanding accounts receivable from this customer, which was reduced by collections to $405,000 at September 7, 2018. This customer in-sourced a significant portion of its business from the Company’s fulfillment services business in August 2018, which transfer had been expected and previously disclosed.

(3) PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment, net consist of:

	July 31,			April 30,
	2018			2018
	(in thousands)
Land, buildings and improvements	$	15,939		$	15,932
Furniture and equipment		18,280			18,239
		34,219			34,171
Less accumulated depreciation		(24,727	)		(24,426	)
	$	9,492		$	9,745

Depreciation of property, plant and equipment charged to operations was $287,000 and $321,000 for the three months ended July 31, 2018 and 2017.

(4) OTHER ASSETS

Other assets consist of:

	July 31,		April 30,
	2018		2018
	(in thousands)
Prepaid expenses	$	1,608	$	1,561
Deferred order entry costs		515		513
Other		206		247
	$	2,329	$	2,321

7

Deferred order entry costs represent costs incurred in connection with the data entry of customer subscription information to database files and are charged directly to operations generally over a twelve month period.

(5) ACCOUNTS PAYABLE AND ACCRUED EXPENSES

Accounts payable and accrued expenses consist of:

	July 31,		April 30,
	2018		2018
	(in thousands)
Fulfillment services	$	5,340	$	5,448
Real estate operations		2,737		2,425
Corporate operations		342		342
	$	8,419	$	8,215

As of July 31, 2018, accounts payable and accrued expenses for the Company’s fulfillment services business included customer postage deposits of $2,889,000, accrued expenses of $748,000, trade payables of $600,000 and other of $1,103,000. As of April 30, 2018, accounts payable and accrued expenses for the Company’s fulfillment services business included customer postage deposits of $3,223,000, accrued expenses of $515,000, trade payables of $388,000 and other of $1,322,000.

As of July 31, 2018, accounts payable and accrued expenses for the Company’s real estate business included accrued expenses of $634,000, trade payables of $681,000, and real estate customer deposits of $1,422,000. As of April 30, 2018, accounts payable and accrued expenses for the Company’s real estate business included accrued expenses of $746,000, trade payables of $773,000, real estate customer deposits of $897,000 and other of $9,000.

(6) NOTES PAYABLE

Notes payable, net consist of:

	July 31,			April 30,
	2018			2018
	(in thousands)
Real estate notes payable	$	2,157		$	1,887
Unamortized debt issuance costs		(86	)		(44	)
Notes payable, net	$	2,071		$	1,843

Lomas Encantadas Subdivision – Refer to Note 8 to the consolidated financial statements contained in the 2018 Form 10-K for detail about the loan agreement and related documentation entered into with BOKF, NA dba Bank of Albuquerque in December 2017 with respect to the development of certain planned residential lots within the Lomas Encantadas subdivision (the “Lomas Property”) located in Rio Rancho, New Mexico.

Pursuant to such loan documentation, BOKF, NA agrees to lend up to $4,750,000 to the borrower on a non-revolving line of credit basis to partially fund the development of the Lomas Property. Interest on the outstanding principal amount of the loan is payable monthly at the annual rate equal to the London Interbank Offered Rate for a thirty-day interest period plus a spread of 3.0%, adjusted monthly. The outstanding principal amount of the loan as of July 31, 2018 was $2,115,000 and the borrower made principal repayments of $774,000 during the three months ended July 31, 2018. The loan is scheduled to mature in December 2021. The total book value of the Lomas Property was $10,461,000 as of July 31, 2018. The Company capitalized $26,000 of interest related to this loan in the first quarter of 2019. At July 31, 2018, both the borrower and AMREP Southwest were in compliance with the covenants contained within the loan documentation.

8

Hawk Site Subdivision – In July 2018, Hawksite 27 Development Company, LLC (“HDC”), a subsidiary of AMREP Southwest, entered into a Business Loan Agreement with Main Bank. The loan under the Business Loan Agreement is evidenced by a Promissory Note and is secured by a Mortgage, between HDC and Main Bank with respect to certain planned residential lots within the Hawk Site subdivision (the “Hawk Property”). Pursuant to a Commercial Guaranty entered into by AMREP Southwest in favor of Main Bank, AMREP Southwest has guaranteed HDC’s obligations under each of the above agreements. The Business Loan Agreement, Promissory Note, Mortgage, Commercial Guaranty and other related transaction documents are collectively referred to as the “HS Loan Documentation.”

Pursuant to the HS Loan Documentation, Main Bank agrees to lend up to $1,800,000 to HDC on a non-revolving line of credit basis to partially fund the development of the Hawk Property. Interest on the outstanding principal amount of the loan is payable monthly at the annual rate equal to the Wall Street Journal Prime Rate plus a spread of 2.38%, adjusted annually. Main Bank is required to release the lien of its mortgage on any lot included in the Hawk Property upon HDC making a principal payment equal to the greater of $30,000 or 55% of the sales price of the lot. HDC is required to reduce the principal balance of the loan to a maximum of $1,700,000 at July 20, 2020. The outstanding principal amount of the loan may be prepaid at any time without penalty. The loan is scheduled to mature on July 20, 2021. HDC incurred customary costs and expenses and paid fees to Main Bank in connection with the loan. The outstanding principal amount of the loan as of July 31, 2018 was $42,000 and HDC made no principal repayments during the three months ended July 31, 2018. The total book value of the Hawk Property was $3,218,000 as of July 31, 2018. There was no interest capitalized related to this loan during the first quarter of 2019.

HDC and AMREP Southwest have made certain representations and warranties in the HS Loan Documentation and are required to comply with various covenants, reporting requirements and other customary requirements for similar loans. The HS Loan Documentation contains customary events of default for similar financing transactions, including: HDC’s failure to make principal, interest or other payments when due; the failure of HDC or AMREP Southwest to observe or perform their respective covenants under the HS Loan Documentation; the representations and warranties of HDC or AMREP Southwest being false; and the insolvency or bankruptcy of HDC or AMREP Southwest. Upon the occurrence and during the continuance of an event of default, Main Bank may declare the outstanding principal amount and all other obligations under the HS Loan Documentation immediately due and payable. At July 31, 2018, both HDC and AMREP Southwest were in compliance with the covenants contained within the HS Loan Documentation.

(7) OTHER REVENUES

Other revenues for the first quarter of 2019 and 2018 consist of:

	Three Months Ended July 31,
	2018		2017
	(in thousands)
Settlement gain	$	-	$	1,318
Deferred revenue and other		89		88
	$	89	$	1,406

Deferred revenue and other includes the recognition of deferred revenue related to an oil and gas lease noted below, as well as fees and forfeited deposits from customers earned by AMREP Southwest, together with miscellaneous other income items.

9

Refer to Note 9 to the consolidated financial statements contained in the 2018 Form 10-K for detail about the settlement agreement entered into between Palm Coast and the State of Florida in the first quarter of 2018. As a result of this settlement agreement, the Company’s fulfillment services business recognized a gain of $1,318,000 during the first quarter of 2018.

In addition, refer to Note 9 to the consolidated financial statements contained in the 2018 Form 10-K for detail about an oil and gas lease with respect to all minerals and mineral rights owned by the Company or for which the Company has executive rights in and under approximately 55,000 surface acres of land in Sandoval County, New Mexico. No royalties under the lease were received during the three months ended July 31, 2018. Revenue from this transaction is being recorded over the lease term and approximately $57,000 was recognized during the first quarter of each of 2019 and 2018. At July 31, 2018, there was approximately $19,000 of deferred revenue remaining to be recognized before the end of the lease term in September 2018. On September 7, 2018, the oil and gas lease was amended pursuant to a lease extension agreement. The lease extension agreement extends the expiration date of the initial term of the lease from September 2018 to September 2020. No fee was paid by the lessee to the Company with respect to such extension. If lessee or any of its affiliates provides any consideration to obtain, enter into, option, extend or renew an interest in any minerals or mineral rights within Sandoval County, Bernalillo County, Santa Fe County or Valencia County in New Mexico at any time from September 2017 through September 2020, lessee shall pay the Company an amount equal to the amount of such consideration paid per acre multiplied by 54,793.24. The lease extension agreement further provides that the lessee shall assign, or shall cause their affiliate to assign, to the Company an overriding royalty interest of 1% with respect to the proceeds received by the lessee with respect to any minerals or minerals rights presently or hereinafter owned by, leased by, optioned by or otherwise subject to the control of lessee or any of its affiliates in any part of Sandoval County, Bernalillo County, Santa Fe County or Valencia County in New Mexico.

(8) BENEFIT PLANS

Pension Plan

The Company has a defined benefit pension plan for which accumulated benefits were frozen and future service credits were curtailed as of March 1, 2004. Refer to Note 11 to the consolidated financial statements contained in the 2018 Form 10-K for additional detail regarding the Company’s agreements with the Pension Benefit Guaranty Corporation (the “PBGC”). Pursuant to these agreements, the Company has secured $4,535,000 of accrued pension-related obligations with first lien mortgages on certain real property in favor of the PBGC. The total book value of the real property subject to the mortgages was approximately $7,874,000 as of July 31, 2018. On an annual basis, the Company is required to provide updated appraisals on each mortgaged property and, if the appraised value of the mortgaged properties is less than two times the amount of the accrued pension-related obligations secured by the mortgages, the Company is required to make a payment to its pension plan in an amount equal to one-half of the amount of the shortfall. During the first quarter of 2019, there was no change in the appraised value of the mortgaged properties that required the Company to make any additional payments to its pension plan. In addition, following the end of the first quarter of 2019, the agreements with the PBGC terminated by their terms on August 30, 2018 with the PBGC being deemed to have released and discharged the Company and all other members of its controlled group from any claims under such agreements.

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 deferred income tax effect. The Company recognized other comprehensive income of $157,000 for the three months ended July 31, 2018 and $225,000 for the three months ended July 31, 2017, related to the amortization of the plan’s unrecognized net loss included in Accumulated other comprehensive loss, net in the accompanying financial statements.

The Company funds the pension plan in compliance with IRS funding requirements. The Company did not make any contributions to the pension plan during the three months ended July 31, 2018 and made $563,000 of contributions for the three months ended July 31, 2017.

Equity Compensation Plan

Refer to Note 11 to the consolidated financial statements contained in the 2018 Form 10-K for additional detail regarding the AMREP Corporation 2016 Equity Compensation Plan (the “2016 Equity Plan”) and the AMREP Corporation 2006 Equity Compensation Plan (together with the 2016 Equity Plan, the “Equity Plans”). The Company issued 29,200 shares of restricted common stock under the 2016 Equity Plan during the three months ended July 31, 2018. During the three months ended July 31, 2018, 8,750 shares of restricted common stock previously issued under the Equity Plans vested leaving 55,200 restricted shares issued under the Equity Plans that had not vested as of July 31, 2018. For the three months ended July 31, 2018, the Company recognized $28,000 of non-cash compensation expense related to the vesting of restricted shares of common stock, and $18,000 for the same period of 2018. As of July 31, 2018, there was $274,000 of unrecognized compensation expense related to restricted shares of common stock issued under the Equity Plans which had not vested as of that date, which is expected to be recognized over the remaining vesting term not to exceed three years. In addition, the Company recognized $20,000 of expense during the three months ended July 31, 2018 related to deferred stock units expected to be issued to non-employee members of the Company’s Board of Directors in December 2018.

10

(9) INCOME TAXES

The U.S. Tax Cuts and Jobs Act (the “Act”) was signed into law in December 2017. The Act significantly revised the future ongoing U.S. corporate income tax by, among other things, lowering U.S. corporate income tax rates. The Act reduced the federal corporate tax rate to 21.0% effective January 1, 2018. As the Company has an April 30 fiscal year-end, the lower corporate income tax rate was phased in, resulting in the Company having a blended federal tax rate of 29.7% for 2018. Effective May 1, 2018, the Company’s federal corporate tax rate is 21.0%.

In December 2017, the SEC staff issued Staff Accounting Bulletin No. 118 (“SAB 118”), which addresses how a company recognizes provisional amounts when a company does not have the necessary information available, prepared or analyzed (including computations) in reasonable detail to complete its accounting for the effect of the changes in the Act. SAB 118 provides for a measurement period that should not extend beyond one year from the Act enactment date for companies to complete the accounting under Accounting Standards Codification Topic 740, Income Taxes (“ASC 740”). As of July 31, 2018, the Company had not completed its accounting for the tax effects of the Act and expects to complete the accounting during its third quarter of 2019, which could potentially affect the measurement of deferred tax balances or potentially give rise to new deferred tax balances.

The total tax effect of gross unrecognized tax benefits in the accompanying financial statements at both July 31, 2018 and April 30, 2018 was $58,000, which, if recognized, will have an impact on the effective tax rate and, as a result of the lapse of the statute of limitations, is expected to be recognized in the quarter ending January 31, 2019.

11

(10) 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):

	Real Estate			Fulfillment Services (d)		Corporate and Other			Consolidated
Three months ended July 31, 2018 (a):
Revenues	$	4,239		$	7,445	$	31		$	11,715
Net income (loss)	$	(511	)	$	195	$	377		$	61
Provision (benefit) for income taxes		(180	)		55		73			(52	)
Interest expense (income), net (b)		585			291		(871	)		5
Depreciation and amortization		25			266		-			291
EBITDA (c)	$	(81	)	$	807	$	(421	)	$	305
Capital expenditures	$	-		$	34	$	-		$	34
Total assets as of July 31, 2018	$	74,336		$	18,595	$	13,788		$	106,719
Three months ended July 31, 2017 (a):
Revenues	$	2,747		$	8,561	$	18		$	11,326
Net income	$	180		$	1,040	$	228		$	1,448
Provision for income taxes		134			536		96			766
Interest expense (income), net (b)		524			303		(814	)		13
Depreciation and amortization		18			303		-			321
EBITDA (c)	$	856		$	2,182	$	(490	)	$	2,548
Capital expenditures	$	-		$	10	$	-		$	10
Total assets as of July 31, 2017	$	75,387		$	26,485	$	3,936		$	105,808

(a) Revenue information provided for each segment includes amounts grouped as Other in the accompanying consolidated statements of operations. Corporate and Other is net of intercompany eliminations.

(b) Interest expense (income), net includes inter-segment interest expense (income) that is eliminated in consolidation.

(c) The Company uses EBITDA (which the Company defines as income (loss) before net interest expense, income taxes, depreciation and amortization, and non-cash impairment charges) in addition to net income (loss) as a key measure of profit or loss for segment performance and evaluation purposes.

(d) Fulfillment services revenues and EBITDA for the three months ended July 31, 2017 included a pre-tax gain of $1,318,000 resulting from the settlement agreement with the State of Florida (see Note 7).

12

Disaggregation of Revenues

The Company presents revenues disaggregated by business segment and, in the case of fulfillment services, by service provided, and in the case of real estate, by type of lots sold. The Company believes this disaggregation best depicts how its various business segments perform and are affected by economic factors. The following table presents the Company’s revenues disaggregated by revenue source (in thousands):

	Three Months Ended July 31,
	2018		2017
Fulfillment revenues:
Subscription services	$	4,389	$	4,260
Membership fulfillment		1,931		1,837
Contact center		976		947
Other revenues		149		199
Total fulfillment revenues		7,445		7,243
Real estate revenues:
Developed land sales
Residential land sales		4,181		2,677
Commercial land sales		-		-
Undeveloped land sales		-		-
Total real estate revenues		4,181		2,677
Total corporate and other revenues		89		1,406
Total revenues	$	11,715	$	11,326

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

INTRODUCTION

AMREP Corporation (the “Company”), through its subsidiaries, is primarily engaged in two business segments: the real estate business operated by AMREP Southwest Inc. (“AMREP Southwest”) and its subsidiaries and the fulfillment services business operated by Palm Coast Data LLC (“Palm Coast”) and its affiliates. Data concerning industry segments is set forth in Note 10 of the notes to the consolidated financial statements included in this report on Form 10-Q. All significant intercompany accounts and transactions have been eliminated in consolidation. The Company’s foreign sales and activities are not significant.

The following provides information that management believes is relevant to an assessment and understanding of the Company’s consolidated results of operations and financial condition. The information contained in this section should be read in conjunction with the 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, 2018, which was filed with the Securities and Exchange Commission on July 20, 2018 (the “2018 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 2019 and 2018 are to the fiscal years ending April 30, 2019 and 2018 and all references to the first quarters of 2019 and 2018 mean the fiscal three month periods ended July 31, 2018 and 2017.

13

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 2018 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 2018 Form 10-K and in Note 1 of the notes to the consolidated financial statements included in this report on Form 10-Q. The preparation of those 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 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 critical accounting policies, assumptions and estimates are described in Item 7 of Part II of the 2018 Form 10-K. There have been no changes in these critical accounting policies.

The significant accounting policies of the Company are described in Note 1 to the consolidated financial statements contained in the 2018 Form 10-K. Information concerning the Company’s implementation and the impact of recent accounting standards issued by the Financial Accounting Standards Board is included in the notes to the consolidated financial statements contained in the 2018 Form 10-K and in the notes to the consolidated financial statements included in this report on Form 10-Q. The Company did not adopt any accounting policy in the three months ended July 31, 2018 that had a material impact on its consolidated financial statements. The Company adopted the following accounting policies effective May 1, 2018.

Revenue Recognition

In May 2014, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers. Since that date, the FASB has issued additional ASUs providing further revenue recognition guidance (collectively, “Topic 606”). Topic 606 clarifies the principles for recognizing revenues and costs related to obtaining and fulfilling customer contracts, with the objective of improving financial reporting. The core principle of Topic 606 is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration the Company expects to receive in exchange for those goods or services. Topic 606 defines a five-step process to achieve this core principle, and more judgment and estimates are required under Topic 606 than were required under the prior generally accepted accounting principles of Topic 605, Revenue Recognition (“Topic 605”). In accordance with Topic 606, fulfillment services revenues are recognized as the services are performed in proportion to the transfer of control to the customer and real estate revenues are recognized at the time of sale when consideration has been exchanged and title has been conveyed to the buyer.

Topic 606 was effective for the Company’s fiscal year beginning May 1, 2018. The Company adopted Topic 606 using the modified retrospective method. Results for reporting periods beginning after May 1, 2018 are presented under Topic 606, while prior period amounts were not adjusted and continue to be reported in accordance with Topic 605. The adoption of Topic 606 had no impact on the Company’s results of operations.

Statements of Cash Flows

In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments. ASU 2016-15 reduces the diversity in practice regarding how certain cash receipts and cash payments are presented and classified in the statement of cash flows, including classifying proceeds from company-owned life insurance proceeds as an investing activity. ASU 2016-15 was effective for the Company’s fiscal year beginning May 1, 2018.

14

RESULTS OF OPERATIONS

For the first quarter of 2019, the Company recorded net income of $61,000, or $0.01 per share, compared to net income of $1,448,000, or $0.18 per share, for the first quarter of 2018. Revenues were $11,715,000 for the first quarter of 2019 compared to $11,326,000 for the same period of 2018.

Revenues from land sales at AMREP Southwest and its subsidiaries were $4,181,000 for the first quarter of 2019 compared to $2,677,000 for the same period of 2018. For 2018, $2,044,000 of the $2,677,000 of revenues from land sales was for an approximate five acre undeveloped commercial property in Colorado, which was sold with a gross profit percentage of 65%.

For the first quarter of 2019 and 2018, the Company’s land sales in New Mexico were as follows (dollars in thousands):

	Ended July 31, 2018						Ended July 31, 2017
	Acres Sold		Revenue		Revenue Per Acre		Acres Sold		Revenue		Revenue Per Acre
Three months:
Developed
Residential		11.5	$	4,150	$	361		1.8	$	598	$	332
Commercial		-		-		-		-		-		-
Total Developed		11.5		4,150		361		1.8		598		332
Undeveloped		.8		31		39		2.5		35		14
Total		12.3	$	4,181	$	340		4.3	$	633	$	147

The average gross profit percentage on land sales in New Mexico before indirect costs was 11% for the first quarter of 2019 compared to 18% for the same period of 2018. The profit percentage is attributable to the mix of lots sold with developed lots having a lower profit percentage compared to undeveloped lots. 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 average gross profits 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.

Revenues from the Company’s fulfillment services operations were $7,445,000 for the first quarter of 2019 compared to $7,243,000 for the same period of 2018. The increased revenues were primarily attributable to new business, offset in part by reduced business volumes from existing customers, price concessions on renewed contracts and lost business. The Company’s fulfillment services business has been successful in obtaining new business partially as a result of a significant competitor announcing its intention to cease operations. Otherwise, magazine publishers are one of the principal customers of the Company’s fulfillment services operations, and these customers have continued to be negatively impacted by increased competition from new media sources, alternative technologies for the distribution, storage and consumption of media content, weakness in advertising revenues and increases in paper costs, printing costs and postal rates. The result has been reduced subscription sales, which has caused publishers to close some magazine titles, change subscription fulfillment providers and seek more favorable terms from the Company’s fulfillment services business and its competitors when contracts are up for bid or renewal. One customer of the Company’s fulfillment services business whose revenues were approximately 9.9% of the total Company revenues for the three months ended July 31, 2018 in-sourced a significant portion of its business from the Company’s fulfillment services business in August 2018, which transfer had been expected and previously disclosed.

15

Other revenues were $89,000 for the first quarter of 2019 compared to $1,406,000 for the same period of 2018. Other revenues for the first quarter of 2018 were primarily due to a pre-tax gain of $1,318,000 related to a settlement agreement with the State of Florida by Palm Coast (refer to Note 7 of the notes to the consolidated financial statements included in this report on Form 10-Q). In addition to the pre-tax gain in 2018, Other revenues in the first quarter of 2019 and 2018 includes the recognition of deferred revenue related to an oil and gas lease, as well as fees and forfeited deposits from customers earned by AMREP Southwest and miscellaneous other income items.

Operating and selling expenses for real estate decreased from $511,000 for the first quarter of 2018 to $276,000 for the same period of 2019, primarily due to reduced commissions on sales activity and lower real estate taxes and costs of storm water pollution prevention. Operating and selling expenses for fulfillment services increased from $6,094,000 for the first quarter of 2018 to $6,338,000 for the same period in 2019, primarily due to increased costs related to payroll and benefits, bad debt expense, supplies expense and outside services.

Real estate general and administrative expenses increased from $114,000 for the first quarter of 2018 to $188,000 for the same period of 2019, primarily due to an increase in legal fees. Fulfillment services general and administrative expenses decreased from $349,000 for the first quarter of 2018 to $346,000 for the same period of 2019, with no significant variances in specific expense line items. Corporate general and administrative expenses increased from $808,000 for the first quarter of 2018 to $822,000 for the same period of 2019, primarily due to increased costs related to payroll and benefits, offset in part by lower travel and legal expenses.

Interest expense was $5,000 for the first quarter of 2019 compared to $13,000 for the same period of 2018. Interest expense in 2019 was related to borrowings for land development activities, while interest expense in 2018 was primarily related to the liability with the State of Florida noted above. The Company capitalized interest of $26,000 for the first quarter of 2019 compared to none for the same period of 2018.

The U.S. Tax Cuts and Jobs Act (the “Act”) was signed into law in December 2017. The Act significantly revised the future ongoing U.S. corporate income tax by, among other things, lowering U.S. corporate income tax rates. The Act reduced the federal corporate tax rate to 21.0% effective January 1, 2018. As the Company has an April 30 fiscal year-end, the lower corporate income tax rate was phased in, resulting in the Company having a blended federal tax rate of 29.7% for 2018. Effective May 1, 2018, the Company’s federal corporate tax rate is 21.0%.

The Company had a benefit for income taxes of $52,000 in connection with $9,000 of income before income taxes for the first quarter of 2019, as compared to a provision for income taxes of $766,000 in connection with $2,214,000 of income before income taxes for the same period of 2018. The (benefit) provision for income taxes includes expenses related to federal income tax as well as the net tax benefits related to state operating losses.

The total tax effect of gross unrecognized tax benefits in the accompanying financial statements at both July 31, 2018 and April 30, 2018 was $58,000, which, if recognized, will have an impact on the effective tax rate and, as a result of the lapse of the statute of limitations, is expected to be recognized in the quarter ending January 31, 2019.

LIQUIDITY AND CAPITAL RESOURCES

The Company’s primary sources of funding for working capital requirements are cash flow from operations, bank financing for specific real estate projects and existing cash balances. The Company’s liquidity is affected by many factors, including some that are based on normal operations and some that are related to the industries in which the Company operates and the economy generally. 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 2018 Form 10-K.

16

Pension Plan

The Company has a defined benefit pension plan for which accumulated benefits were frozen and future service credits were curtailed as of March 1, 2004. Refer to Note 11 to the consolidated financial statements contained in the 2018 Form 10-K for additional detail regarding the Company’s agreements with the Pension Benefit Guaranty Corporation (the “PBGC”). Pursuant to these agreements, the Company has secured $4,535,000 of accrued pension-related obligations with first lien mortgages on certain real property in favor of the PBGC. The total book value of the real property subject to the mortgages was approximately $7,874,000 as of July 31, 2018. On an annual basis, the Company is required to provide updated appraisals on each mortgaged property and, if the appraised value of the mortgaged properties is less than two times the amount of the accrued pension-related obligations secured by the mortgages, the Company is required to make a payment to its pension plan in an amount equal to one-half of the amount of the shortfall. During the first quarter of 2019, there was no change in the appraised value of the mortgaged properties that required the Company to make any additional payments to its pension plan. In addition, following the end of the first quarter of 2019, the agreements with the PBGC terminated by their terms on August 30, 2018 with the PBGC being deemed to have released and discharged the Company and all other members of its controlled group from any claims under such agreements.

Operating Activities

Receivables, net decreased from $5,901,000 at April 30, 2018 to $5,866,000 at July 31, 2018, primarily due to the timing of collections. Real estate inventory increased from $58,874,000 at April 30, 2018 to $59,174,000 at July 31, 2018, primarily due to an increase in land development activity, offset in part by real estate land sales. Property, plant and equipment, net decreased from $9,745,000 at April 30, 2018 to $9,492,000 at July 31, 2018, primarily due to depreciation of fixed assets. Taxes receivable, net was $209,000 at April 30, 2018, and included an anticipated refund of federal taxes of $271,000. During the first quarter of 2019, the Company received the $271,000 refund, which resulted in a Taxes payable, net balance of $65,000 at July 31, 2018.

Accounts payable and accrued expenses increased from $8,215,000 at April 30, 2018 to $8,419,000 at July 31, 2018, primarily due to an increase in land development activity. Notes payable, net increased from $1,843,000 at April 30, 2018 to $2,071,000 at July 31, 2018, primarily due to financing of land development activity. Other liabilities and deferred revenue decreased from $149,000 at April 30, 2018 to $122,000 at July 31, 2018, primarily due to the recognition of deferred revenue related to an oil and gas lease.

Financing Activities

Lomas Encantadas Subdivision – Refer to Note 8 to the consolidated financial statements contained in the 2018 Form 10-K for detail about the loan agreement and related documentation entered into with BOKF, NA dba Bank of Albuquerque in December 2017 with respect to the development of certain planned residential lots within the Lomas Encantadas subdivision (the “Lomas Property”) located in Rio Rancho, New Mexico.

Pursuant to such loan documentation, BOKF, NA agrees to lend up to $4,750,000 to the borrower on a non-revolving line of credit basis to partially fund the development of the Lomas Property. Interest on the outstanding principal amount of the loan is payable monthly at the annual rate equal to the London Interbank Offered Rate for a thirty-day interest period plus a spread of 3.0%, adjusted monthly. The outstanding principal amount of the loan as of July 31, 2018 was $2,115,000 and the borrower made principal repayments of $774,000 during the three months ended July 31, 2018. The outstanding principal amount of the loan as of September 7, 2018 was $1,900,000. The loan is scheduled to mature in December 2021. The total book value of the Lomas Property was $10,461,000 as of July 31, 2018. The Company capitalized $26,000 of interest related to this loan in the first quarter of 2019. At July 31, 2018, both the borrower and AMREP Southwest were in compliance with the covenants contained within the loan documentation.

17

Hawk Site Subdivision – In July 2018, Hawksite 27 Development Company, LLC (“HDC”), a subsidiary of AMREP Southwest, entered into a Business Loan Agreement with Main Bank. The loan under the Business Loan Agreement is evidenced by a Promissory Note and is secured by a Mortgage, between HDC and Main Bank with respect to certain planned residential lots within the Hawk Site subdivision (the “Hawk Property”). Pursuant to a Commercial Guaranty entered into by AMREP Southwest in favor of Main Bank, AMREP Southwest has guaranteed HDC’s obligations under each of the above agreements. The Business Loan Agreement, Promissory Note, Mortgage, Commercial Guaranty and other related transaction documents are collectively referred to as the “HS Loan Documentation.”

Pursuant to the HS Loan Documentation, Main Bank agrees to lend up to $1,800,000 to HDC on a non-revolving line of credit basis to partially fund the development of the Hawk Property. Interest on the outstanding principal amount of the loan is payable monthly at the annual rate equal to the Wall Street Journal Prime Rate plus a spread of 2.38%, adjusted annually. Main Bank is required to release the lien of its mortgage on any lot included in the Hawk Property upon HDC making a principal payment equal to the greater of $30,000 or 55% of the sales price of the lot. HDC is required to reduce the principal balance of the loan to a maximum of $1,700,000 at July 20, 2020. The outstanding principal amount of the loan may be prepaid at any time without penalty. The loan is scheduled to mature on July 20, 2021. HDC incurred customary costs and expenses and paid fees to Main Bank in connection with the loan. The outstanding principal amount of the loan as of July 31, 2018 was $42,000 and HDC made no principal repayments during the three months ended July 31, 2018. The outstanding principal amount of the loan as of September 7, 2018 was $42,000. The total book value of the Hawk Property was $3,218,000 as of July 31, 2018. There was no interest capitalized related to this loan during the first quarter of 2019.

HDC and AMREP Southwest have made certain representations and warranties in the HS Loan Documentation and are required to comply with various covenants, reporting requirements and other customary requirements for similar loans. The HS Loan Documentation contains customary events of default for similar financing transactions, including: HDC’s failure to make principal, interest or other payments when due; the failure of HDC or AMREP Southwest to observe or perform their respective covenants under the HS Loan Documentation; the representations and warranties of HDC or AMREP Southwest being false; and the insolvency or bankruptcy of HDC or AMREP Southwest. Upon the occurrence and during the continuance of an event of default, Main Bank may declare the outstanding principal amount and all other obligations under the HS Loan Documentation immediately due and payable. At July 31, 2018, both HDC and AMREP Southwest were in compliance with the covenants contained within the HS Loan Documentation.

Investing Activities

Capital expenditures for property, plant and equipment totaled $34,000 for the first quarter of 2019 and $10,000 for the same period of 2018, primarily related to the Company’s fulfillment services business in both periods.

The Company received life insurance proceeds of $85,000 during the first quarter of 2019, which is reflected in the accompanying Consolidated Statement of Cash Flows. The income associated with the life insurance proceeds was recognized in various years prior to the first quarter of 2019.

18

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, the effect of recent accounting pronouncements on the Company, the timing of recognizing unrecognized compensation expense related to shares of restricted common stock issued under the Equity Plans, the issuance of deferred stock units to non-employee members of the Company’s Board of Directors, the liability for unrecognized tax benefits changing in the next twelve months, the availability of bank financing for projects, the expected utilization of existing bank financing, the impact and the timing of completion of accounting for the tax effects of the of the U.S. Tax Cuts and Jobs Act on the Company and the future business conditions that may be experienced by the Company. The Company undertakes no obligation to update or publicly release any revisions to forward-looking statements 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.

Item 4. Controls and Procedures

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 are effective 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 its 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.

19

Changes in Internal Control over Financial Reporting

No change in the Company’s system of internal control over financial reporting occurred during the most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, internal control over financial reporting.

PART II. OTHER INFORMATION

Item 5. Other Information

The following disclosure would otherwise be filed on Form 8-K under Item 1.01:

Refer to Note 9 to the consolidated financial statements contained in the 2018 Form 10-K for detail about an oil and gas lease with respect to all minerals and mineral rights owned by the Company or for which the Company has executive rights in and under approximately 55,000 surface acres of land in Sandoval County, New Mexico. On September 7, 2018, the oil and gas lease was amended pursuant to a lease extension agreement. The lease extension agreement extends the expiration date of the initial term of the lease from September 2018 to September 2020. No fee was paid by the lessee to the Company with respect to such extension. If lessee or any of its affiliates provides any consideration to obtain, enter into, option, extend or renew an interest in any minerals or mineral rights within Sandoval County, Bernalillo County, Santa Fe County or Valencia County in New Mexico at any time from September 2017 through September 2020, lessee shall pay the Company an amount equal to the amount of such consideration paid per acre multiplied by 54,793.24. The lease extension agreement further provides that the lessee shall assign, or shall cause their affiliate to assign, to the Company an overriding royalty interest of 1% with respect to the proceeds received by the lessee with respect to any minerals or minerals rights presently or hereinafter owned by, leased by, optioned by or otherwise subject to the control of lessee or any of its affiliates in any part of Sandoval County, Bernalillo County, Santa Fe County or Valencia County in New Mexico.

The foregoing description of the lease extension agreement is a summary only and is qualified in all respects by the provisions of the lease extension agreement, a copy of which is attached hereto as Exhibit 10.5 and is incorporated herein by reference.

Item 6. Exhibits

Exhibit Number	Description
10.1	Business Loan Agreement, dated July 20, 2018, between Main Bank and Hawksite 27 Development Company, LLC. (Incorporated by reference to Exhibit 10.1 to Registrant’s Current Report on Form 8-K filed July 25, 2018)
10.2	Promissory Note, dated July 20, 2018, by Hawksite 27 Development Company, LLC in favor of Main Bank. (Incorporated by reference to Exhibit 10.2 to Registrant’s Current Report on Form 8-K filed July 25, 2018)
10.3	Mortgage, dated July 20, 2018, between Main Bank and Hawksite 27 Development Company, LLC. (Incorporated by reference to Exhibit 10.3 to Registrant’s Current Report on Form 8-K filed July 25, 2018)
10.4	Commercial Guaranty, dated July 24, 2018, made by AMREP Southwest Inc. for the benefit of Main Bank. (Incorporated by reference to Exhibit 10.4 to Registrant’s Current Report on Form 8-K filed July 25, 2018)
10.5	Lease Extension Agreement, dated September 7, 2018, by and among Southwest Mineral Company, LLC, Thrust Energy, Inc. and Cebolla Roja, LLC.
31.1	Certification required by Rule 13a-14(a) under the Securities Exchange Act of 1934
31.2	Certification required by Rule 13a-14(a) under the Securities Exchange Act of 1934
32	Certification required pursuant to 18 U.S.C. Section 1350
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema
101.CAL	XBRL Taxonomy Extension Calculation Linkbase
101.DEF	XBRL Taxonomy Extension Definition Linkbase
101.LAB	XBRL Taxonomy Extension Label Linkbase
101.PRE	XBRL Taxonomy Extension Presentation Linkbase

20

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Date: September 11, 2018	AMREP CORPORATION
	(Registrant)

By:	/s/ James M. McMonagle
	James M. McMonagle
	Vice President and Chief Financial Officer
	(Principal Accounting Officer)

21

EXHIBIT INDEX

Exhibit Number	Description
10.1	Business Loan Agreement, dated July 20, 2018, between Main Bank and Hawksite 27 Development Company, LLC. (Incorporated by reference to Exhibit 10.1 to Registrant’s Current Report on Form 8-K filed July 25, 2018)
10.2	Promissory Note, dated July 20, 2018, by Hawksite 27 Development Company, LLC in favor of Main Bank. (Incorporated by reference to Exhibit 10.2 to Registrant’s Current Report on Form 8-K filed July 25, 2018)
10.3	Mortgage, dated July 20, 2018, between Main Bank and Hawksite 27 Development Company, LLC. (Incorporated by reference to Exhibit 10.3 to Registrant’s Current Report on Form 8-K filed July 25, 2018)
10.4	Commercial Guaranty, dated July 24, 2018, made by AMREP Southwest Inc. for the benefit of Main Bank. (Incorporated by reference to Exhibit 10.4 to Registrant’s Current Report on Form 8-K filed July 25, 2018)
10.5	Lease Extension Agreement, dated September 7, 2018, by and among Southwest Mineral Company, LLC, Thrust Energy, Inc. and Cebolla Roja, LLC.
31.1	Certification required by Rule 13a-14(a) under the Securities Exchange Act of 1934
31.2	Certification required by Rule 13a-14(a) under the Securities Exchange Act of 1934
32	Certification required pursuant to 18 U.S.C. Section 1350
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema
101.CAL	XBRL Taxonomy Extension Calculation Linkbase
101.DEF	XBRL Taxonomy Extension Definition Linkbase
101.LAB	XBRL Taxonomy Extension Label Linkbase
101.PRE	XBRL Taxonomy Extension Presentation Linkbase

22

EX-10.5

Exhibit 10.5

LEASE EXTENSION AGREEMENT

This Agreement (the “Extension Agreement”) is made by and between Southwest Mineral Company, LLC, a New Mexico limited liability company (“Lessor”), and Thrust Energy, Inc., a New Mexico corporation (“Thrust”), and Cebolla Roja, LLC, a New Mexico limited liability company (“Cebolla”) (Thrust and Cebolla are collectively referred to hereinbelow as the “Lessee”). The Lessor and Lessee are collectively referred to hereinbelow as the “Parties.”

WHEREAS, AMREP Southwest, Inc., a New Mexico corporation (“Amrep”), and Outer Rim Investments, Inc., a New Mexico corporation (“Outer Rim”) (Amrep and Outer Rim are hereinafter collectively referred to as the “Original Lessors”), as lessor, and Lessee, as lessee, entered into that certain Oil & Gas Lease and Addendum dated September 8, 2014, for certain mineral rights in Sandoval County, New Mexico (hereinafter the “Lease”); and

WHEREAS, the term of the Lease expires on September 8, 2018; and

WHEREAS, the Original Lessors conveyed all their right, title and interest in the minerals and mineral rights subject to the Lease to Lessor pursuant to that certain Mineral Rights Quitclaim Deed dated August 7, 2018, and recorded in the office of the County Clerk of Sandoval County, New Mexico, on August 8, 2018, in Book 421, Page 17859, as Document No. 2018017859; and

WHEREAS, the Parties desire to extend the term of the Lease upon the terms and conditions contained in this Extension Agreement.

NOW, THEREFORE, in consideration of the mutual covenants and agreements contained hereinbelow, the Parties hereby agree and covenant as follows:

1. All capitalized terms used in this Extension Agreement but not defined in this Extension Agreement shall have the same meaning as used in the Lease.

2. The expiration date of the Primary Term of the Lease shall be extended from September 8, 2018 to September 8, 2020.

3. The Lessee shall not pay an extension fee for the extension granted in Section 2 of this Extension Agreement, except as follows: if at any time during the Test Period any Lessee Related Entity provides any Consideration to obtain, enter into, option, extend or renew a lease for or an acquisition of any Minerals within the exterior boundaries of Sandoval County, Bernalillo County, Santa Fe County or Valencia County (collectively, the “Applicable Area”), Lessee agrees to immediately pay Lessor an amount equal to the Consideration per Third Party Acre multiplied by 54,793.24. Lessee is not obligated to extend any leases nor to exercise any options to acquire any oil and gas leases.

For purposes of this Extension Agreement:

· “Consideration” means any kind or form of consideration, benefit, property, money, amount or forbearance or anything else of value. If the Consideration is not money, the Consideration shall be deemed to have a value equal to the fair market value of the Consideration as determined by Lessor.

1 

· “Consideration per Third Party Acre” means an amount equal to the value of the Consideration divided by the number of net mineral acres subject to the applicable lease or acquisition.

· “Costs” means any pre-production, production, post-production or other costs or expenses (including without limitation any costs or expenses of or relating to exploration, drilling, equipping, processing, transportation, sales, capital, depreciation, overhead, administration, gathering, compressing, storing, marketing or other activities).

· “Lessee Related Entity” means the Lessee, Thrust, Cebolla or any entity owned or controlled, in whole or in part, by the Lessee, Thrust, Cebolla or by one or more of the past, current or future officers, managers, stockholders or members of the Lessee, Thrust or Cebolla. The Lessee, Thrust and Cebolla represent and warrant that James C. Manatt, Jr., F. Andrew Grooms and Christopher Carameros are current officers, managers, stockholders and/or members of the Lessee, Thrust or Cebolla.

· “Minerals” means any minerals or mineral rights, including without limitation any oil, gas, oil rights or gas rights.

· “Test Period” means the period of time from and including September 8, 2017 through and including September 8, 2020.

4. Upon execution of this Extension Agreement, Lessee shall assign, or shall cause their affiliate to assign, an ORRI to Lessor on any and all rights, titles and interests in, to, under or relating to Minerals (whether such Minerals are a result of acquisition, lease, option or otherwise) presently or hereinafter owned by, leased by, optioned by or otherwise subject to the control of any Lessee Related Entity in any part of the Applicable Area for the period of time equal to the period of time of such Lessee Related Entity’s ownership, lease, option or other control (including without limitation any extensions, renewals or modifications of such ownership, lease, option or other control). If the applicable Minerals are not owned, leased, optioned or otherwise subjected to the control of Lessee (but rather are owned, leased, optioned or otherwise subjected to the control of a Lessee Related Entity other than Lessee) and Lessee is unable to secure the assignment contemplated by the prior sentence within thirty (30) days after the date of this Extension Agreement as to existing leases, options or other control documents or within fifteen (15) days after the effective date of any future leases, options or other control documents, Lessor may, in its sole discretion, obtain one or more of the following remedies: (i) immediately terminate the Lease and Lessee shall have no further rights thereunder; and/or (ii) seek any and all other remedies available at law or in equity including injunctive relief and specific performance.

Lessee represents and warrant that all rights, titles and interests in, to, under or relating to Minerals (whether such Minerals are a result of acquisition, lease, option or otherwise) presently owned by, leased by, optioned by or otherwise subject to the control of any Lessee Related Entity in any part of the Applicable Area is solely owned by, leased by, optioned by or otherwise subject to the control of Lessee and no other Lessee Related Entity.

2 

Lessee covenants that all rights, titles and interests in, to, under or relating to Minerals (whether such Minerals are a result of acquisition, lease, option or otherwise) hereinafter owned by, leased by, optioned by or otherwise subject to the control of any Lessee Related Entity in any part of the Applicable Area shall be solely owned by, leased by, optioned by or otherwise subject to the control of Lessee and no other Lessee Related Entity.

Lessee does not warrant title to any Minerals subject to the ORRI and Lessor accepts the ORRI on this basis. The ORRI assigned hereunder shall be on a net mineral acre basis presently or hereinafter owned by, leased by, optioned by or otherwise subject to the control of any Lessee Related Entity in any part of the Applicable Area and is subject to spacing unit pooling provisions as approved by the New Mexico Oil Conservation Division, but the gross proceeds to which the ORRI apply shall include any cost recovery obtained by any Lessee Related Entity in connection with such pooling provision or otherwise.

For the purpose of this Extension Agreement, “ORRI” means an overriding royalty interest of one percent (1%) of one hundred percent (100%) of (i) the gross proceeds (including without limitation premiums and special credits) from the sale (or, when used by or sold to any Lessee Related Entity, one percent (1%) of one hundred percent (100%) of the market value at the point of sale or use thereof) of any and all Minerals, without any deduction whatsoever for any Costs, (ii) any and all advance payments and take-or-pay payments received by any Lessee Related Entity arising out of or relating to the Applicable Area, and (iii) Consideration received by any Lessee Related Entity as a result of any final judgment or settlement of any of any contractual, common law, statutory or administrative claim that relates or pertains to the Applicable Area or the agreement of any Lessee Related Entity to modify, release, cancel or terminate any agreement relating or pertaining to the Applicable Area. The ORRI granted in this Extension Agreement shall apply to every extension, renewal or modification of any ownership, lease, option or other control of any and all Minerals presently or hereinafter owned by, leased by, optioned by or otherwise subject to the control of any Lessee Related Entity in any part of the Applicable Area. The ORRI granted in this Extension Agreement shall apply to any new ownership, lease, option or other control of any and all Minerals presently or hereinafter owned by, leased by, optioned by or otherwise subject to the control of any Lessee Related Entity in any part of the Applicable Area. All of the express and implied covenants of the Lease shall be equally applicable to the ORRI.

Any other provision hereof to the contrary notwithstanding, any right granted or reserved herein for Lessor to receive an ORRI under this Extension Agreement shall, in any event, terminate one day prior to the expiration of 21 years after the death of the survivor of all descendants of Donald Trump, President of the United States, who are living on the effective date of this Extension Agreement.

5. At any time prior to September 8, 2020, Lessee may elect to renew the Lease in accordance with the terms of the Lease by paying Lessor the payment required therein to initiate the full term of the Option Lease. Any such renewal shall not affect, amend or negate the ORRI or any other rights granted to Lessor under this Extension Agreement.

6. In the event of a conflict between the terms of the Lease and this Extension Agreement, the terms of this Extension Agreement shall prevail.

3 

7. The Parties agree that this Extension Agreement is a covenant running with the Applicable Area and that it touches and concerns the Applicable Area. Thrust shall reimburse Lessor for any and all costs and expenses in connection with recording the Lease and/or the Extension Agreement in each of the counties within the Applicable Area.

8. The foregoing constitutes the entire agreement between the Parties and, other than the Lease, there are no other verbal or written terms, obligations or agreements not written herein between the Parties.

[Signature Pages Follow]

4 

IN WITNESS WHEREOF, the Parties have executed this Extension Agreement as of September 7, 2018.

LESSOR:

SOUTHWEST MINERAL COMPANY, LLC,

a New Mexico limited liability company

By: /s/ Jarrod D. Likar                               

Name: Jarrod D. Likar

Title: Vice President – Land Development

STATE OF NEW MEXICO	)
	)ss:
COUNTY OF SANDOVAL	)

This instrument was acknowledged before me on September 7, 2018, by Jarrod D. Likar, Vice President – Land Development of SOUTHWEST MINERAL COMPANY, LLC, a New Mexico limited liability company, on behalf of said company.

/s/ Matthew M. Spangler

NOTARY PUBLIC

My Commission Expires:

9-24-2019

5 

LESSEE:

THRUST ENERGY, INC.,	CEBOLLA ROJA, LLC,
a New Mexico corporation	a New Mexico limited liability company
By: /s/ James C. Manatt, Jr.	By: /s/ Christopher Carameros
Name: James C. Manatt, Jr.	Name: Christopher Carameros
Title: President / CEO	Title: Authorized Member

STATE OF NEW MEXICO	)
	)ss:
COUNTY OF CHAVEZ	)

This instrument was acknowledged before me on September 7, 2018, by James C. Manatt, Jr., President/CEO of THRUST ENERGY, INC., a New Mexico corporation, on behalf of said corporation.

/s/ Debra Franks

NOTARY PUBLIC

My Commission Expires:

1-19-2022

STATE OF NEW MEXICO	)
	)ss:
COUNTY OF CHAVEZ	)

This instrument was acknowledged before me on September 7, 2018, by Christopher Carameros, Authorized Member of CEBOLLA ROJA, LLC, a New Mexico limited liability company, on behalf of said company.

/s/ Alice Chavez

NOTARY PUBLIC

My Commission Expires:

7-15-2022

6 

EX-31.1

Exhibit 31.1

CERTIFICATION

I, James M. McMonagle, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q for the period ended July 31, 2018 of AMREP Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;

4. The Registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the Registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and

5. The Registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of the Registrant’s board of directors (or persons performing the equivalent functions):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.

Dated: September 11, 2018

/s/ James M. McMonagle

James M. McMonagle

Vice President and Chief Financial Officer

(Principal Financial Officer)

EX-31.2

Exhibit 31.2

CERTIFICATION

I, Christopher V. Vitale, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q for the period ended July 31, 2018 of AMREP Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;

4. The Registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the Registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and

5. The Registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of the Registrant’s board of directors (or persons performing the equivalent functions):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.

Dated: September 11, 2018

/s/ Christopher V. Vitale

Christopher V. Vitale

President and Chief Executive Officer

(Principal Executive Officer)

EX-32

Exhibit 32

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of AMREP Corporation (the “Company”) on Form 10-Q for the period ended July 31, 2018 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), each of the undersigned does hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to his knowledge:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: September 11, 2018

/s/ James M. McMonagle

James M. McMonagle

Vice President and Chief Financial Officer

(Principal Financial Officer)

/s/ Christopher V. Vitale

Christopher V. Vitale

President and Chief Executive Officer

(Principal Executive Officer)

XML

Document And Entity Information - shares	3 Months Ended
	Jul. 31, 2018	Sep. 07, 2018
Document Information [Line Items]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jul. 31, 2018
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	Q1
Entity Registrant Name	AMREP CORP.
Entity Central Index Key	0000006207
Current Fiscal Year End Date	--04-30
Entity Filer Category	Smaller Reporting Company
Trading Symbol	AXR
Entity Common Stock, Shares Outstanding		8,127,904

XML

Consolidated Balance Sheets - USD ($) $ in Thousands	Jul. 31, 2018	Apr. 30, 2018
ASSETS
Cash and cash equivalents	$ 15,100	$ 14,041
Receivables, net	5,866	5,901
Real estate inventory	59,174	58,874
Investment assets	9,713	9,714
Property, plant and equipment, net	9,492	9,745
Other assets, net	2,329	2,321
Taxes receivable, net	0	209
Deferred income taxes, net	5,045	5,060
TOTAL ASSETS	106,719	105,865
LIABILITIES:
Accounts payable and accrued expenses	8,419	8,215
Taxes payable, net	65	0
Notes payable, net	2,071	1,843
Other liabilities and deferred revenue	122	149
Accrued pension costs	9,011	9,051
TOTAL LIABILITIES	19,688	19,258
SHAREHOLDERS' EQUITY:
Common stock, $.10 par value; shares authorized – 20,000,000; shares issued – 8,353,154 at July 31, 2018 and 8,323,954 at April 30, 2018	835	832
Capital contributed in excess of par value	51,125	50,922
Retained earnings	47,063	47,002
Accumulated other comprehensive loss, net	(7,777)	(7,934)
Treasury stock, at cost; 225,250 shares at July 31, 2018 and April 30, 2018	(4,215)	(4,215)
TOTAL SHAREHOLDERS' EQUITY	87,031	86,607
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$ 106,719	$ 105,865

XML

Consolidated Balance Sheets [Parenthetical] - $ / shares	Jul. 31, 2018	Apr. 30, 2018
Common stock, par value (in dollars per share)	$ 0.10	$ 0.10
Common stock, shares authorized	20,000,000	20,000,000
Common stock, shares issued	8,353,154	8,323,954
Treasury stock, shares	225,250	225,250

XML

Consolidated Statements of Operations and Retained Earnings - USD ($) $ in Thousands		3 Months Ended
		Jul. 31, 2018	Jul. 31, 2017
REVENUES:
Fulfillment services		$ 7,445	$ 7,243
Real estate land sales		4,181	2,677
Other		89	1,406
Revenues	[1]	11,715	11,326
COSTS AND EXPENSES:
Real estate land sales		3,731	1,223
Operating and selling expenses:
Fulfillment services		6,338	6,094
Real estate		276	511
General and administrative expenses:
Fulfillment services		346	349
Real estate operations		188	114
Corporate operations		822	808
Interest expense		5	13
Costs and Expenses		11,706	9,112
Income before income taxes		9	2,214
(Benefit) provision for income taxes	[1]	(52)	766
Net income		61	1,448
Retained earnings, beginning of period		47,002	46,764
Retained earnings, end of period		$ 47,063	$ 48,212
Earnings per share – basic and diluted		$ 0.01	$ 0.18
Weighted average number of common shares outstanding - basic		8,086	8,063
Weighted average number of common shares outstanding - diluted		8,124	8,083

[1] Revenue information provided for each segment includes amounts grouped as Other in the accompanying consolidated statements of operations. Corporate and Other is net of intercompany eliminations.

XML

Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands	3 Months Ended
	Jul. 31, 2018	Jul. 31, 2017
Net income	$ 61	$ 1,448
Other comprehensive income, net of tax:
Decrease in pension liability, net of tax ($69 in 2019 and $98 in 2018)	157	225
Other comprehensive income	157	225
Total comprehensive income	$ 218	$ 1,673

XML

Consolidated Statements of Comprehensive Income [Parenthetical] - USD ($) $ in Thousands	3 Months Ended
	Jul. 31, 2018	Jul. 31, 2017
Other Comprehensive (Income) Loss, Defined Benefit Plan, after Reclassification Adjustment, Tax, Attributable to Parent	$ 69	$ 98

XML

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	3 Months Ended
	Jul. 31, 2018	Jul. 31, 2017
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$ 61	$ 1,448
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	291	321
Non-cash credits and charges:
Non-cash gain on settlement	0	(1,318)
Non-cash deferred revenue recognized	0	(20)
Provision for (recovery of) doubtful accounts	63	(21)
Stock-based compensation	28	18
Net periodic pension cost	186	250
Changes in assets and liabilities:
Receivables	(28)	452
Real estate inventory and investment assets	(299)	733
Other assets	85	(13)
Accounts payable and accrued expenses	204	(375)
Taxes receivable (payable)	274	(1)
Other liabilities and deferred revenue	(27)	(366)
Deferred income taxes	(54)	770
Accrued pension costs	0	(563)
Total adjustments	723	(133)
Net cash provided by operating activities	784	1,315
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from corporate-owned life insurance policy	85	0
Capital expenditures - property, plant and equipment	(34)	(10)
Net cash provided by (used in) investing activities	51	(10)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from debt financing	1,044	0
Principal debt payments	(774)	0
Payments for debt issuance costs	(46)	0
Net cash provided by financing activities	224	0
Increase in cash and cash equivalents	1,059	1,305
Cash and cash equivalents, beginning of period	14,041	11,811
Cash and cash equivalents, end of period	15,100	13,116
SUPPLEMENTAL CASH FLOW INFORMATION:
Interest paid, net of amounts capitalized	1	0
Income taxes (refunded) paid, net	$ (271)	$ 1

XML

SUMMARY OF SIGNIFICANT ACCOUNTING AND FINANCIAL REPORTING POLICIES

3 Months Ended

Jul. 31, 2018

Accounting Policies [Abstract]

Significant Accounting Policies [Text Block]

(1) SUMMARY OF SIGNIFICANT ACCOUNTING AND FINANCIAL REPORTING POLICIES

The accompanying unaudited 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: the real estate business operated by AMREP Southwest Inc. (“AMREP Southwest”) and its subsidiaries and the fulfillment services business operated by Palm Coast Data LLC (“Palm Coast”) and its affiliates. The Company’s foreign sales are insignificant. All significant intercompany accounts and transactions have been eliminated in consolidation.

In the opinion of management, these unaudited consolidated financial statements include all adjustments, which are of a normal recurring nature, considered necessary to reflect a fair presentation 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 2019 and 2018 are to the fiscal years ending April 30, 2019 and 2018 and all references to the first quarters of 2019 and 2018 mean the fiscal three month periods ended July 31, 2018 and 2017.

The unaudited 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, 2018, which was filed with the SEC on July 20, 2018 (the “2018 Form 10-K”). Certain 2018 balances in these financial statements have been reclassified to conform to the current year presentation with no effect on either net income or shareholders’ equity.

Summary of Significant Accounting Policies

The significant accounting policies used in preparing these consolidated financial statements are consistent with the accounting policies described in the 2018 Form 10-K, except for those adopted as described below.

Recently Adopted Accounting Pronouncements

Revenue Recognition

In May 2014, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers. Since that date, the FASB has issued additional ASUs providing further revenue recognition guidance (collectively, “Topic 606”). Topic 606 clarifies the principles for recognizing revenues and costs related to obtaining and fulfilling customer contracts, with the objective of improving financial reporting. The core principle of Topic 606 is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration the Company expects to receive in exchange for those goods or services. Topic 606 defines a five-step process to achieve this core principle, and more judgment and estimates are required under Topic 606 than were required under the prior generally accepted accounting principles of Topic 605, Revenue Recognition (“Topic 605”). In accordance with Topic 606, fulfillment services revenues are recognized as the services are performed in proportion to the transfer of control to the customer and real estate revenues are recognized at the time of sale when consideration has been exchanged and title has been conveyed to the buyer.

Topic 606 was effective for the Company’s fiscal year beginning May 1, 2018. The Company adopted Topic 606 using the modified retrospective method. Results for reporting periods beginning after May 1, 2018 are presented under Topic 606, while prior period amounts were not adjusted and continue to be reported in accordance with Topic 605. The adoption of Topic 606 had no impact on the Company’s results of operations.

Statements of Cash Flows

In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments. ASU 2016-15 reduces the diversity in practice regarding how certain cash receipts and cash payments are presented and classified in the statement of cash flows, including classifying proceeds from company-owned life insurance proceeds as an investing activity. ASU 2016-15 was effective for the Company’s fiscal year beginning May 1, 2018. The Company received life insurance proceeds of $85,000 during the first quarter of 2019, which is reflected in the accompanying Consolidated Statement of Cash Flows as an investing activity. The income associated with the life insurance proceeds was recognized in various years prior to the first quarter of 2019.

Recently Issued Accounting Pronouncements

In February 2016, the FASB issued ASU No. 2016-02, Leases. Since that date, the FASB has issued additional ASUs providing further guidance for lease transactions (collectively “ASU 2016-02”). ASU 2016-02 requires that a lessee recognize the assets and liabilities that arise from operating leases. A lessee should recognize in its balance sheet a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term. For leases with a term of twelve months or less, a lessee is permitted to make an accounting policy election by class of underlying asset not to recognize lease assets and lease liabilities. Upon adoption of ASU 2016-02, the Company will be required to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach. The amendments in ASU 2016-02 will be effective for the Company for fiscal year 2020 beginning on May 1, 2019. The Company has not yet concluded how the new standard will impact its consolidated financial statements.

In January 2018, the FASB issued ASU 2018-02, Income Statement – Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income, which permits the reclassification to retained earnings of certain tax effects resulting from the U.S. Tax Cuts and Jobs Act related to items in accumulated other comprehensive income. ASU 2018-02 may be applied retrospectively to each period in which the effect of the U.S. Tax Cuts and Jobs Act is recognized or may be applied in the period of adoption. ASU 2018-02 is effective for the Company’s fiscal year 2020 beginning May 1, 2019. The Company has not determined whether it will elect to reclassify such tax effects. The adoption of ASU 2018-02 by the Company is not expected to have a material effect on its consolidated financial statements.

In June 2018, the FASB issued ASU No. 2018-07, Compensation – Stock Compensation (Topic 718) – Improvements to Nonemployee Share-based Payment Accounting. ASU 2018-07 addresses several aspects of the accounting for nonemployee share-based payment transactions, including share-based payment transactions for acquiring goods and services from nonemployees. ASU 2018-07 is effective for the Company’s fiscal year 2020 beginning May 1, 2019. The adoption of ASU 2018-07 by the Company is not expected to have a material effect on its consolidated financial statements.

XML

RECEIVABLES

3 Months Ended

Jul. 31, 2018

Receivables [Abstract]

Loans, Notes, Trade and Other Receivables Disclosure [Text Block]

(2) RECEIVABLES

Receivables, net consist of:

	July 31, 2018			April 30, 2018
	(in thousands)
Fulfillment services	$	6,196		$	6,189
Real estate operations		26			10
Corporate operations		21			16
		6,243			6,215
Less allowance for doubtful accounts		(377	)		(314	)
	$	5,866		$	5,901

During the three months ended July 31, 2018, revenues from one major customer of the Company’s fulfillment services business totaled $1,154,000 or approximately 9.9% of total revenues for the Company. As of July 31, 2018, the Company’s fulfillment services business had $771,000 of outstanding accounts receivable from this customer, which was reduced by collections to $405,000 at September 7, 2018. This customer in-sourced a significant portion of its business from the Company’s fulfillment services business in August 2018, which transfer had been expected and previously disclosed.

XML

PROPERTY, PLANT AND EQUIPMENT

3 Months Ended

Jul. 31, 2018

Property, Plant and Equipment Disclosure [Abstract]

Property, Plant and Equipment [Text Block]

(3) PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment, net consist of:

	July 31,			April 30,
	2018			2018
	(in thousands)
Land, buildings and improvements	$	15,939		$	15,932
Furniture and equipment		18,280			18,239
		34,219			34,171
Less accumulated depreciation		(24,727	)		(24,426	)
	$	9,492		$	9,745

Depreciation of property, plant and equipment charged to operations was $287,000 and $321,000 for the three months ended July 31, 2018 and 2017.

XML

OTHER ASSETS

3 Months Ended

Jul. 31, 2018

Other Assets [Abstract]

Other Assets Disclosure [Text Block]

(4) OTHER ASSETS

Other assets consist of:

	July 31,		April 30,
	2018		2018
	(in thousands)
Prepaid expenses	$	1,608	$	1,561
Deferred order entry costs		515		513
Other		206		247
	$	2,329	$	2,321

Deferred order entry costs represent costs incurred in connection with the data entry of customer subscription information to database files and are charged directly to operations generally over a twelve month period.

XML

ACCOUNTS PAYABLE AND ACCRUED EXPENSES

3 Months Ended

Jul. 31, 2018

Payables and Accruals [Abstract]

Accounts Payable and Accrued Liabilities Disclosure [Text Block]

(5) ACCOUNTS PAYABLE AND ACCRUED EXPENSES

Accounts payable and accrued expenses consist of:

	July 31,		April 30,
	2018		2018
	(in thousands)
Fulfillment services	$	5,340	$	5,448
Real estate operations		2,737		2,425
Corporate operations		342		342
	$	8,419	$	8,215

As of July 31, 2018, accounts payable and accrued expenses for the Company’s fulfillment services business included customer postage deposits of $2,889,000, accrued expenses of $748,000, trade payables of $600,000 and other of $1,103,000. As of April 30, 2018, accounts payable and accrued expenses for the Company’s fulfillment services business included customer postage deposits of $3,223,000, accrued expenses of $515,000, trade payables of $388,000 and other of $1,322,000.

As of July 31, 2018, accounts payable and accrued expenses for the Company’s real estate business included accrued expenses of $634,000, trade payables of $681,000, and real estate customer deposits of $1,422,000. As of April 30, 2018, accounts payable and accrued expenses for the Company’s real estate business included accrued expenses of $746,000, trade payables of $773,000, real estate customer deposits of $897,000 and other of $9,000.

XML

NOTES PAYABLE

3 Months Ended

Jul. 31, 2018

Debt Disclosure [Abstract]

Debt Disclosure [Text Block]

(6) NOTES PAYABLE

Notes payable, net consist of:

	July 31,			April 30,
	2018			2018
	(in thousands)
Real estate notes payable	$	2,157		$	1,887
Unamortized debt issuance costs		(86	)		(44	)
Notes payable, net	$	2,071		$	1,843

Lomas Encantadas Subdivision – Refer to Note 8 to the consolidated financial statements contained in the 2018 Form 10-K for detail about the loan agreement and related documentation entered into with BOKF, NA dba Bank of Albuquerque in December 2017 with respect to the development of certain planned residential lots within the Lomas Encantadas subdivision (the “Lomas Property”) located in Rio Rancho, New Mexico.

Pursuant to such loan documentation, BOKF, NA agrees to lend up to $4,750,000 to the borrower on a non-revolving line of credit basis to partially fund the development of the Lomas Property. Interest on the outstanding principal amount of the loan is payable monthly at the annual rate equal to the London Interbank Offered Rate for a thirty-day interest period plus a spread of 3.0%, adjusted monthly. The outstanding principal amount of the loan as of July 31, 2018 was $2,115,000 and the borrower made principal repayments of $774,000 during the three months ended July 31, 2018. The loan is scheduled to mature in December 2021. The total book value of the Lomas Property was $10,461,000 as of July 31, 2018. The Company capitalized $26,000 of interest related to this loan in the first quarter of 2019. At July 31, 2018, both the borrower and AMREP Southwest were in compliance with the covenants contained within the loan documentation.

Hawk Site Subdivision – In July 2018, Hawksite 27 Development Company, LLC (“HDC”), a subsidiary of AMREP Southwest, entered into a Business Loan Agreement with Main Bank. The loan under the Business Loan Agreement is evidenced by a Promissory Note and is secured by a Mortgage, between HDC and Main Bank with respect to certain planned residential lots within the Hawk Site subdivision (the “Hawk Property”). Pursuant to a Commercial Guaranty entered into by AMREP Southwest in favor of Main Bank, AMREP Southwest has guaranteed HDC’s obligations under each of the above agreements. The Business Loan Agreement, Promissory Note, Mortgage, Commercial Guaranty and other related transaction documents are collectively referred to as the “HS Loan Documentation.”

Pursuant to the HS Loan Documentation, Main Bank agrees to lend up to $1,800,000 to HDC on a non-revolving line of credit basis to partially fund the development of the Hawk Property. Interest on the outstanding principal amount of the loan is payable monthly at the annual rate equal to the Wall Street Journal Prime Rate plus a spread of 2.38%, adjusted annually. Main Bank is required to release the lien of its mortgage on any lot included in the Hawk Property upon HDC making a principal payment equal to the greater of $30,000 or 55% of the sales price of the lot. HDC is required to reduce the principal balance of the loan to a maximum of $1,700,000 at July 20, 2020. The outstanding principal amount of the loan may be prepaid at any time without penalty. The loan is scheduled to mature on July 20, 2021. HDC incurred customary costs and expenses and paid fees to Main Bank in connection with the loan. The outstanding principal amount of the loan as of July 31, 2018 was $42,000 and HDC made no principal repayments during the three months ended July 31, 2018. The total book value of the Hawk Property was $3,218,000 as of July 31, 2018. There was no interest capitalized related to this loan during the first quarter of 2019.

HDC and AMREP Southwest have made certain representations and warranties in the HS Loan Documentation and are required to comply with various covenants, reporting requirements and other customary requirements for similar loans. The HS Loan Documentation contains customary events of default for similar financing transactions, including: HDC’s failure to make principal, interest or other payments when due; the failure of HDC or AMREP Southwest to observe or perform their respective covenants under the HS Loan Documentation; the representations and warranties of HDC or AMREP Southwest being false; and the insolvency or bankruptcy of HDC or AMREP Southwest. Upon the occurrence and during the continuance of an event of default, Main Bank may declare the outstanding principal amount and all other obligations under the HS Loan Documentation immediately due and payable. At July 31, 2018, both HDC and AMREP Southwest were in compliance with the covenants contained within the HS Loan Documentation.

XML

OTHER REVENUES

3 Months Ended

Jul. 31, 2018

Other Liabilities and Financial Instruments Subject to Mandatory Redemption [Abstract]

Other Liabilities Disclosure [Text Block]

(7) OTHER REVENUES

Other revenues for the first quarter of 2019 and 2018 consist of:

	Three Months Ended July 31,
	2018		2017
	(in thousands)
Settlement gain	$	-	$	1,318
Deferred revenue and other		89		88
	$	89	$	1,406

Deferred revenue and other includes the recognition of deferred revenue related to an oil and gas lease noted below, as well as fees and forfeited deposits from customers earned by AMREP Southwest, together with miscellaneous other income items.

Refer to Note 9 to the consolidated financial statements contained in the 2018 Form 10-K for detail about the settlement agreement entered into between Palm Coast and the State of Florida in the first quarter of 2018. As a result of this settlement agreement, the Company’s fulfillment services business recognized a gain of $1,318,000 during the first quarter of 2018.

In addition, refer to Note 9 to the consolidated financial statements contained in the 2018 Form 10-K for detail about an oil and gas lease with respect to all minerals and mineral rights owned by the Company or for which the Company has executive rights in and under approximately 55,000 surface acres of land in Sandoval County, New Mexico. No royalties under the lease were received during the three months ended July 31, 2018. Revenue from this transaction is being recorded over the lease term and approximately $57,000 was recognized during the first quarter of each of 2019 and 2018. At July 31, 2018, there was approximately $19,000 of deferred revenue remaining to be recognized before the end of the lease term in September 2018. On September 7, 2018, the oil and gas lease was amended pursuant to a lease extension agreement. The lease extension agreement extends the expiration date of the initial term of the lease from September 2018 to September 2020. No fee was paid by the lessee to the Company with respect to such extension. If lessee or any of its affiliates provides any consideration to obtain, enter into, option, extend or renew an interest in any minerals or mineral rights within Sandoval County, Bernalillo County, Santa Fe County or Valencia County in New Mexico at any time from September 2017 through September 2020, lessee shall pay the Company an amount equal to the amount of such consideration paid per acre multiplied by 54,793.24. The lease extension agreement further provides that the lessee shall assign, or shall cause their affiliate to assign, to the Company an overriding royalty interest of 1% with respect to the proceeds received by the lessee with respect to any minerals or minerals rights presently or hereinafter owned by, leased by, optioned by or otherwise subject to the control of lessee or any of its affiliates in any part of Sandoval County, Bernalillo County, Santa Fe County or Valencia County in New Mexico.

XML

BENEFIT PLANS

3 Months Ended

Jul. 31, 2018

Retirement Benefits [Abstract]

Pension and Other Postretirement Benefits Disclosure [Text Block]

(8) BENEFIT PLANS

Pension Plan

The Company has a defined benefit pension plan for which accumulated benefits were frozen and future service credits were curtailed as of March 1, 2004. Refer to Note 11 to the consolidated financial statements contained in the 2018 Form 10-K for additional detail regarding the Company’s agreements with the Pension Benefit Guaranty Corporation (the “PBGC”). Pursuant to these agreements, the Company has secured $4,535,000 of accrued pension-related obligations with first lien mortgages on certain real property in favor of the PBGC. The total book value of the real property subject to the mortgages was approximately $7,874,000 as of July 31, 2018. On an annual basis, the Company is required to provide updated appraisals on each mortgaged property and, if the appraised value of the mortgaged properties is less than two times the amount of the accrued pension-related obligations secured by the mortgages, the Company is required to make a payment to its pension plan in an amount equal to one-half of the amount of the shortfall. During the first quarter of 2019, there was no change in the appraised value of the mortgaged properties that required the Company to make any additional payments to its pension plan. In addition, following the end of the first quarter of 2019, the agreements with the PBGC terminated by their terms on August 30, 2018 with the PBGC being deemed to have released and discharged the Company and all other members of its controlled group from any claims under such agreements.

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 deferred income tax effect. The Company recognized other comprehensive income of $157,000 for the three months ended July 31, 2018 and $225,000 for the three months ended July 31, 2017, related to the amortization of the plan’s unrecognized net loss included in Accumulated other comprehensive loss, net in the accompanying financial statements.

The Company funds the pension plan in compliance with IRS funding requirements. The Company did not make any contributions to the pension plan during the three months ended July 31, 2018 and made $563,000 of contributions for the three months ended July 31, 2017.

Equity Compensation Plan

Refer to Note 11 to the consolidated financial statements contained in the 2018 Form 10-K for additional detail regarding the AMREP Corporation 2016 Equity Compensation Plan (the “2016 Equity Plan”) and the AMREP Corporation 2006 Equity Compensation Plan (together with the 2016 Equity Plan, the “Equity Plans”). The Company issued 29,200 shares of restricted common stock under the 2016 Equity Plan during the three months ended July 31, 2018. During the three months ended July 31, 2018, 8,750 shares of restricted common stock previously issued under the Equity Plans vested leaving 55,200 restricted shares issued under the Equity Plans that had not vested as of July 31, 2018. For the three months ended July 31, 2018, the Company recognized $28,000 of non-cash compensation expense related to the vesting of restricted shares of common stock, and $18,000 for the same period of 2018. As of July 31, 2018, there was $274,000 of unrecognized compensation expense related to restricted shares of common stock issued under the Equity Plans which had not vested as of that date, which is expected to be recognized over the remaining vesting term not to exceed three years. In addition, the Company recognized $20,000 of expense during the three months ended July 31, 2018 related to deferred stock units expected to be issued to non-employee members of the Company’s Board of Directors in December 2018.

XML

INCOME TAXES

3 Months Ended

Jul. 31, 2018

Income Tax Disclosure [Abstract]

Income Tax Disclosure [Text Block]

(9) INCOME TAXES

The U.S. Tax Cuts and Jobs Act (the “Act”) was signed into law in December 2017. The Act significantly revised the future ongoing U.S. corporate income tax by, among other things, lowering U.S. corporate income tax rates. The Act reduced the federal corporate tax rate to 21.0% effective January 1, 2018. As the Company has an April 30 fiscal year-end, the lower corporate income tax rate was phased in, resulting in the Company having a blended federal tax rate of 29.7% for 2018. Effective May 1, 2018, the Company’s federal corporate tax rate is 21.0%.

In December 2017, the SEC staff issued Staff Accounting Bulletin No. 118 (“SAB 118”), which addresses how a company recognizes provisional amounts when a company does not have the necessary information available, prepared or analyzed (including computations) in reasonable detail to complete its accounting for the effect of the changes in the Act. SAB 118 provides for a measurement period that should not extend beyond one year from the Act enactment date for companies to complete the accounting under Accounting Standards Codification Topic 740, Income Taxes (“ASC 740”). As of July 31, 2018, the Company had not completed its accounting for the tax effects of the Act and expects to complete the accounting during its third quarter of 2019, which could potentially affect the measurement of deferred tax balances or potentially give rise to new deferred tax balances.

The total tax effect of gross unrecognized tax benefits in the accompanying financial statements at both July 31, 2018 and April 30, 2018 was $58,000, which, if recognized, will have an impact on the effective tax rate and, as a result of the lapse of the statute of limitations, is expected to be recognized in the quarter ending January 31, 2019.

XML

INFORMATION ABOUT THE COMPANY'S OPERATIONS IN DIFFERENT INDUSTRY SEGMENTS

3 Months Ended

Jul. 31, 2018

Segment Reporting [Abstract]

Segment Reporting Disclosure [Text Block]

(10) 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):

	Real Estate			Fulfillment Services ‎(d)		Corporate ‎and ‎Other			Consolidated
Three months ended July 31, 2018 (a):
Revenues	$	4,239		$	7,445	$	31		$	11,715
Net income (loss)	$	(511	)	$	195	$	377		$	61
Provision (benefit) for income taxes		(180	)		55		73			(52	)
Interest expense (income), net (b)		585			291		(871	)		5
Depreciation and amortization		25			266		-			291
EBITDA (c)	$	(81	)	$	807	$	(421	)	$	305
Capital expenditures	$	-		$	34	$	-		$	34
Total assets as of July 31, 2018	$	74,336		$	18,595	$	13,788		$	106,719
Three months ended July 31, 2017 (a):
Revenues	$	2,747		$	8,561	$	18		$	11,326
Net income	$	180		$	1,040	$	228		$	1,448
Provision for income taxes		134			536		96			766
Interest expense (income), net (b)		524			303		(814	)		13
Depreciation and amortization		18			303		-			321
EBITDA (c)	$	856		$	2,182	$	(490	)	$	2,548
Capital expenditures	$	-		$	10	$	-		$	10
Total assets as of July 31, 2017	$	75,387		$	26,485	$	3,936		$	105,808

(a) Revenue information provided for each segment includes amounts grouped as Other in the accompanying consolidated statements of operations. Corporate and Other is net of intercompany eliminations.

(b) Interest expense (income), net includes inter-segment interest expense (income) that is eliminated in consolidation.

(c) The Company uses EBITDA (which the Company defines as income (loss) before net interest expense, income taxes, depreciation and amortization, and non-cash impairment charges) in addition to net income (loss) as a key measure of profit or loss for segment performance and evaluation purposes.

(d) Fulfillment services revenues and EBITDA for the three months ended July 31, 2017 included a pre-tax gain of $1,318,000 resulting from the settlement agreement with the State of Florida (see Note 7).

Disaggregation of Revenues

The Company presents revenues disaggregated by business segment and, in the case of fulfillment services, by service provided, and in the case of real estate, by type of lots sold. The Company believes this disaggregation best depicts how its various business segments perform and are affected by economic factors. The following table presents the Company’s revenues disaggregated by revenue source (in thousands):

	Three Months Ended July 31,
	2018		2017
Fulfillment revenues:
Subscription services	$	4,389	$	4,260
Membership fulfillment		1,931		1,837
Contact center		976		947
Other revenues		149		199
Total fulfillment revenues		7,445		7,243
Real estate revenues:
Developed land sales
Residential land sales		4,181		2,677
Commercial land sales		-		-
Undeveloped land sales		-		-
Total real estate revenues		4,181		2,677
Total corporate and other revenues		89		1,406
Total revenues	$	11,715	$	11,326

XML

SUMMARY OF SIGNIFICANT ACCOUNTING AND FINANCIAL REPORTING POLICIES (Policies)

3 Months Ended

Jul. 31, 2018

Accounting Policies [Abstract]

New Accounting Pronouncements, Policy [Policy Text Block]

Recently Adopted Accounting Pronouncements

Revenue Recognition

In May 2014, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers. Since that date, the FASB has issued additional ASUs providing further revenue recognition guidance (collectively, “Topic 606”). Topic 606 clarifies the principles for recognizing revenues and costs related to obtaining and fulfilling customer contracts, with the objective of improving financial reporting. The core principle of Topic 606 is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration the Company expects to receive in exchange for those goods or services. Topic 606 defines a five-step process to achieve this core principle, and more judgment and estimates are required under Topic 606 than were required under the prior generally accepted accounting principles of Topic 605, Revenue Recognition (“Topic 605”). In accordance with Topic 606, fulfillment services revenues are recognized as the services are performed in proportion to the transfer of control to the customer and real estate revenues are recognized at the time of sale when consideration has been exchanged and title has been conveyed to the buyer.

Topic 606 was effective for the Company’s fiscal year beginning May 1, 2018. The Company adopted Topic 606 using the modified retrospective method. Results for reporting periods beginning after May 1, 2018 are presented under Topic 606, while prior period amounts were not adjusted and continue to be reported in accordance with Topic 605. The adoption of Topic 606 had no impact on the Company’s results of operations.

Statements of Cash Flows

In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments. ASU 2016-15 reduces the diversity in practice regarding how certain cash receipts and cash payments are presented and classified in the statement of cash flows, including classifying proceeds from company-owned life insurance proceeds as an investing activity. ASU 2016-15 was effective for the Company’s fiscal year beginning May 1, 2018. The Company received life insurance proceeds of $85,000 during the first quarter of 2019, which is reflected in the accompanying Consolidated Statement of Cash Flows as an investing activity. The income associated with the life insurance proceeds was recognized in various years prior to the first quarter of 2019.

Recently Issued Accounting Pronouncements

In February 2016, the FASB issued ASU No. 2016-02, Leases. Since that date, the FASB has issued additional ASUs providing further guidance for lease transactions (collectively “ASU 2016-02”). ASU 2016-02 requires that a lessee recognize the assets and liabilities that arise from operating leases. A lessee should recognize in its balance sheet a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term. For leases with a term of twelve months or less, a lessee is permitted to make an accounting policy election by class of underlying asset not to recognize lease assets and lease liabilities. Upon adoption of ASU 2016-02, the Company will be required to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach. The amendments in ASU 2016-02 will be effective for the Company for fiscal year 2020 beginning on May 1, 2019. The Company has not yet concluded how the new standard will impact its consolidated financial statements.

In January 2018, the FASB issued ASU 2018-02, Income Statement – Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income, which permits the reclassification to retained earnings of certain tax effects resulting from the U.S. Tax Cuts and Jobs Act related to items in accumulated other comprehensive income. ASU 2018-02 may be applied retrospectively to each period in which the effect of the U.S. Tax Cuts and Jobs Act is recognized or may be applied in the period of adoption. ASU 2018-02 is effective for the Company’s fiscal year 2020 beginning May 1, 2019. The Company has not determined whether it will elect to reclassify such tax effects. The adoption of ASU 2018-02 by the Company is not expected to have a material effect on its consolidated financial statements.

In June 2018, the FASB issued ASU No. 2018-07, Compensation – Stock Compensation (Topic 718) – Improvements to Nonemployee Share-based Payment Accounting. ASU 2018-07 addresses several aspects of the accounting for nonemployee share-based payment transactions, including share-based payment transactions for acquiring goods and services from nonemployees. ASU 2018-07 is effective for the Company’s fiscal year 2020 beginning May 1, 2019. The adoption of ASU 2018-07 by the Company is not expected to have a material effect on its consolidated financial statements.

XML

RECEIVABLES (Tables)

3 Months Ended

Jul. 31, 2018

Receivables [Abstract]

Schedule of Accounts, Notes, Loans and Financing Receivable [Table Text Block]

Receivables, net consist of:

	July 31, 2018			April 30, 2018
	(in thousands)
Fulfillment services	$	6,196		$	6,189
Real estate operations		26			10
Corporate operations		21			16
		6,243			6,215
Less allowance for doubtful accounts		(377	)		(314	)
	$	5,866		$	5,901

XML

PROPERTY, PLANT AND EQUIPMENT (Tables)

3 Months Ended

Jul. 31, 2018

Property, Plant and Equipment Disclosure [Abstract]

Property, Plant and Equipment [Table Text Block]

Property, plant and equipment, net consist of:

	July 31,			April 30,
	2018			2018
	(in thousands)
Land, buildings and improvements	$	15,939		$	15,932
Furniture and equipment		18,280			18,239
		34,219			34,171
Less accumulated depreciation		(24,727	)		(24,426	)
	$	9,492		$	9,745

XML

OTHER ASSETS (Tables)

3 Months Ended

Jul. 31, 2018

Other Assets [Abstract]

Schedule of Other Assets [Table Text Block]

Other assets consist of:

	July 31,		April 30,
	2018		2018
	(in thousands)
Prepaid expenses	$	1,608	$	1,561
Deferred order entry costs		515		513
Other		206		247
	$	2,329	$	2,321

XML

ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Tables)

3 Months Ended

Jul. 31, 2018

Payables and Accruals [Abstract]

Schedule of Accounts Payable and Accrued Liabilities [Table Text Block]

Accounts payable and accrued expenses consist of:

	July 31,		April 30,
	2018		2018
	(in thousands)
Fulfillment services	$	5,340	$	5,448
Real estate operations		2,737		2,425
Corporate operations		342		342
	$	8,419	$	8,215

XML

NOTES PAYABLE (Tables)

3 Months Ended

Jul. 31, 2018

Debt Disclosure [Abstract]

Schedule of Debt [Table Text Block]

Notes payable, net consist of:

	July 31,			April 30,
	2018			2018
	(in thousands)
Real estate notes payable	$	2,157		$	1,887
Unamortized debt issuance costs		(86	)		(44	)
Notes payable, net	$	2,071		$	1,843

XML

OTHER REVENUES (Tables)

3 Months Ended

Jul. 31, 2018

Other Liabilities and Financial Instruments Subject to Mandatory Redemption [Abstract]

Other Revenues [Table Text Block]

Other revenues for the first quarter of 2019 and 2018 consist of:

	Three Months Ended July 31,
	2018		2017
	(in thousands)
Settlement gain	$	-	$	1,318
Deferred revenue and other		89		88
	$	89	$	1,406

XML

INFORMATION ABOUT THE COMPANY'S OPERATIONS IN DIFFERENT INDUSTRY SEGMENTS (Tables)

3 Months Ended

Jul. 31, 2018

Segment Reporting [Abstract]

Schedule of Segment Reporting Information, by Segment [Table Text Block]

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

	Real Estate			Fulfillment Services ‎(d)		Corporate ‎and ‎Other			Consolidated
Three months ended July 31, 2018 (a):
Revenues	$	4,239		$	7,445	$	31		$	11,715
Net income (loss)	$	(511	)	$	195	$	377		$	61
Provision (benefit) for income taxes		(180	)		55		73			(52	)
Interest expense (income), net (b)		585			291		(871	)		5
Depreciation and amortization		25			266		-			291
EBITDA (c)	$	(81	)	$	807	$	(421	)	$	305
Capital expenditures	$	-		$	34	$	-		$	34
Total assets as of July 31, 2018	$	74,336		$	18,595	$	13,788		$	106,719
Three months ended July 31, 2017 (a):
Revenues	$	2,747		$	8,561	$	18		$	11,326
Net income	$	180		$	1,040	$	228		$	1,448
Provision for income taxes		134			536		96			766
Interest expense (income), net (b)		524			303		(814	)		13
Depreciation and amortization		18			303		-			321
EBITDA (c)	$	856		$	2,182	$	(490	)	$	2,548
Capital expenditures	$	-		$	10	$	-		$	10
Total assets as of July 31, 2017	$	75,387		$	26,485	$	3,936		$	105,808

(a) Revenue information provided for each segment includes amounts grouped as Other in the accompanying consolidated statements of operations. Corporate and Other is net of intercompany eliminations.

(b) Interest expense (income), net includes inter-segment interest expense (income) that is eliminated in consolidation.

(c) The Company uses EBITDA (which the Company defines as income (loss) before net interest expense, income taxes, depreciation and amortization, and non-cash impairment charges) in addition to net income (loss) as a key measure of profit or loss for segment performance and evaluation purposes.

(d) Fulfillment services revenues and EBITDA for the three months ended July 31, 2017 included a pre-tax gain of $1,318,000 resulting from the settlement agreement with the State of Florida (see Note 7).

Disaggregation of Revenue [Table Text Block]

The following table presents the Company’s revenues disaggregated by revenue source (in thousands):

	Three Months Ended July 31,
	2018		2017
Fulfillment revenues:
Subscription services	$	4,389	$	4,260
Membership fulfillment		1,931		1,837
Contact center		976		947
Other revenues		149		199
Total fulfillment revenues		7,445		7,243
Real estate revenues:
Developed land sales
Residential land sales		4,181		2,677
Commercial land sales		-		-
Undeveloped land sales		-		-
Total real estate revenues		4,181		2,677
Total corporate and other revenues		89		1,406
Total revenues	$	11,715	$	11,326

XML

SUMMARY OF SIGNIFICANT ACCOUNTING AND FINANCIAL REPORTING POLICIES (Details Textual) - USD ($)	3 Months Ended
	Jul. 31, 2018	Jul. 31, 2017
Accounting Policies [Line Items]
Proceeds from Life Insurance Policy	$ 85,000	$ 0
Accounting Standards Update 2016-15 [Member]
Accounting Policies [Line Items]
Proceeds from Life Insurance Policy	$ 85,000

XML

RECEIVABLES (Details) - USD ($) $ in Thousands	Jul. 31, 2018	Apr. 30, 2018
Accounts, Notes, Loans and Financing Receivable [Line Items]
Accounts Receivable, Gross	$ 6,243	$ 6,215
Less allowance for doubtful accounts	(377)	(314)
Accounts Receivable, Net	5,866	5,901
Fulfillment service [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Accounts Receivable, Gross	6,196	6,189
Real estate operations
Accounts, Notes, Loans and Financing Receivable [Line Items]
Accounts Receivable, Gross	26	10
Corporate operations
Accounts, Notes, Loans and Financing Receivable [Line Items]
Accounts Receivable, Gross	$ 21	$ 16

XML

RECEIVABLES (Details Textual) - USD ($)		3 Months Ended
		Jul. 31, 2018	Jul. 31, 2017	Sep. 07, 2018	Apr. 30, 2018
Revenues	[1]	$ 11,715,000	$ 11,326,000
Accounts Receivable, Net		5,866,000			$ 5,901,000
Customer Concentration Risk [Member]
Revenues		$ 1,154,000
Customer Concentration Risk [Member] | Sales Revenue, Net [Member]
Concentration Risk, Percentage		9.90%
Fulfillment Services [Member]
Revenues	[1],[2]	$ 7,445,000	$ 8,561,000
Accounts Receivable, Net				$ 405,000
Fulfillment Services [Member] | Customer Concentration Risk [Member]
Accounts Receivable, Net		$ 771,000

[1] Revenue information provided for each segment includes amounts grouped as Other in the accompanying consolidated statements of operations. Corporate and Other is net of intercompany eliminations.

[2] Fulfillment services revenues and EBITDA for the three months ended July 31, 2017 included a pre-tax gain of $1,318,000 resulting from the settlement agreement with the State of Florida (see Note 7).

XML

PROPERTY, PLANT AND EQUIPMENT (Details) - USD ($) $ in Thousands	Jul. 31, 2018	Apr. 30, 2018
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Gross	$ 34,219	$ 34,171
Less accumulated depreciation	(24,727)	(24,426)
Property, plant and equipment, net	9,492	9,745
Land, buildings and improvements [Member]
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Gross	15,939	15,932
Furniture and equipment [Member]
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Gross	$ 18,280	$ 18,239

XML

PROPERTY, PLANT AND EQUIPMENT (Details Textual) - USD ($)	3 Months Ended
	Jul. 31, 2018	Jul. 31, 2017
Property, Plant and Equipment [Line Items]
Depreciation	$ 287,000	$ 321,000

XML

OTHER ASSETS (Details) - USD ($) $ in Thousands	Jul. 31, 2018	Apr. 30, 2018
Prepaid expenses	$ 1,608	$ 1,561
Deferred order entry costs	515	513
Other	206	247
Prepaid Expense and Other Assets	$ 2,329	$ 2,321

XML

ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Details) - USD ($) $ in Thousands	Jul. 31, 2018	Apr. 30, 2018
Accounts Payable and Accrued Liabilities	$ 8,419	$ 8,215
Fulfillment services
Accounts Payable and Accrued Liabilities	5,340	5,448
Real estate operations
Accounts Payable and Accrued Liabilities	2,737	2,425
Corporate operations
Accounts Payable and Accrued Liabilities	$ 342	$ 342

XML

ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Details Textual) - USD ($)	Jul. 31, 2018	Apr. 30, 2018
Real Estate Operation [Member]
Accounts Payable and Accrued Liabilities Disclosure [Line Items]
Accrued Liabilities	$ 634,000	$ 746,000
Accounts Payable, Trade	681,000	773,000
Other Accounts Payable and Accrued Liabilities		9,000
Customer Advances and Deposits, Current	1,422,000	897,000
Fulfillment Services [Member]
Accounts Payable and Accrued Liabilities Disclosure [Line Items]
Accrued Liabilities	748,000	515,000
Customer Postage Deposits Current And Noncurrent	2,889,000	3,223,000
Accounts Payable, Trade	600,000	388,000
Other Accounts Payable and Accrued Liabilities	$ 1,103,000	$ 1,322,000

XML

NOTES PAYABLE (Details) - USD ($) $ in Thousands	Jul. 31, 2018	Apr. 30, 2018
Notes Payable [Abstract]
Notes Payable	$ 2,071	$ 1,843
Real Estate Operations And Corporate [Member]
Notes Payable [Abstract]
Notes Payable	2,157	1,887
Unamortized debt issuance costs [Member]
Notes Payable [Abstract]
Notes Payable	$ (86)	$ (44)

XML

NOTES PAYABLE (Details Textual) - USD ($)	1 Months Ended	3 Months Ended
	Jul. 24, 2018	Jul. 31, 2018	Jul. 31, 2017
Debt Instrument [Line Items]
Loans Payable		$ 2,115,000
Repayments of Notes Payable		774,000	$ 0
Real Estate Operations And Corporate [Member]
Debt Instrument [Line Items]
Repayments of Notes Payable		774,000
Nonrevolving Line Of Credit [Member]
Debt Instrument [Line Items]
Line of Credit Facility, Current Borrowing Capacity		$ 4,750,000
Debt Instrument, Basis Spread on Variable Rate		3.00%
Book Value Of Real Estate Property Collateralized		$ 10,461,000
Interest Costs Capitalized		26,000
Nonrevolving Line Of Credit Two [Member]
Debt Instrument [Line Items]
Line of Credit Facility, Current Borrowing Capacity	$ 1,800,000
Debt Instrument, Basis Spread on Variable Rate	2.38%
Book Value Of Real Estate Property Collateralized		3,218,000
Debt Instrument Maximum Principal Amount To Be Settled	$ 1,700,000
Other Notes Payable		$ 42,000
Debt Instrument, Payment Terms	principal payment equal to the greater of $30,000 or 55% of the sales price of the lot
Debt Instrument, Description of Variable Rate Basis	Interest on the outstanding principal amount of the loan is payable monthly at the annual rate equal to the Wall Street Journal Prime Rate plus a spread of 2.38%, adjusted annually.

XML

OTHER REVENUES (Details) - USD ($) $ in Thousands	3 Months Ended
	Jul. 31, 2018	Jul. 31, 2017
Settlement gain	$ 0	$ 1,318
Deferred revenue and other	89	88
Other Revenue, Net	$ 89	$ 1,406

XML

OTHER REVENUES (Details Textual)		3 Months Ended
	Sep. 07, 2018	Jul. 31, 2018 USD ($) a	Jul. 31, 2017 USD ($)
Pre Tax Gain Included Other Revenues		$ 0	$ 1,318,000
Operating Leases, Income Statement, Lease Revenue		57,000
Deferred Revenue, Leases, Net		$ 19,000
Area of Land | a		55,000
Subsequent Event [Member]
Royalty InterestPercentage	1.00%
Lessor, Operating Lease, Description	If lessee or any of its affiliates provides any consideration to obtain, enter into, option, extend or renew an interest in any minerals or mineral rights within Sandoval County, Bernalillo County, Santa Fe County or Valencia County in New Mexico at any time from September 2017 through September 2020, lessee shall pay the Company an amount equal to the amount of such consideration paid per acre multiplied by 54,793.24.

XML

BENEFIT PLANS (Details Textual) - USD ($)	3 Months Ended
	Jul. 31, 2018	Jul. 31, 2017
Defined Benefit Plan Disclosure [Line Items]
Share-based Compensation, Total	$ 28,000	$ 18,000
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Total	274,000
Pension Benefit Plan Accelerated Funding	4,535,000
Other Comprehensive Income (Loss), Net of Tax, Portion Attributable to Parent	157,000	225,000
Defined Benefit Plan, Plan Assets, Contributions by Employer	$ 0	$ (563,000)
Stock Issued During Period, Shares, Restricted Stock Award, Forfeited	29,200
Pledged Assets, Not Separately Reported, Real Estate	$ 7,874,000
Non employee Individual of Board of Directors [Member]
Defined Benefit Plan Disclosure [Line Items]
Share-based Compensation, Total	20,000
Scenario, Plan [Member]
Defined Benefit Plan Disclosure [Line Items]
Share-based Compensation, Total	28,000
Equity Plan [Member]
Defined Benefit Plan Disclosure [Line Items]
Share-based Compensation, Total	$ 18,000
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period	8,750
Two Thousand Six Equity Plan [Member]
Defined Benefit Plan Disclosure [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number	55,200

XML

INCOME TAXES (Details Textual) - USD ($)	3 Months Ended	12 Months Ended
	Jul. 31, 2018	Dec. 31, 2018	Apr. 30, 2018
Income Tax Disclosure [Line Items]
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent	21.00%	21.00%	29.70%
Unrecognized Tax Benefits	$ 58,000		$ 58,000

XML

INFORMATION ABOUT THE COMPANY'S OPERATIONS IN DIFFERENT INDUSTRY SEGMENTS (Details) - USD ($) $ in Thousands		3 Months Ended
		Jul. 31, 2018	Jul. 31, 2017	Apr. 30, 2018
Segment Reporting, Revenue Reconciling Item [Line Items]
Revenues	[1]	$ 11,715	$ 11,326
Net income (loss)	[1]	61	1,448
Provision (benefit) for income taxes	[1]	(52)	766
Interest expense (income), net	[2]	5	13
Depreciation and amortization		291	321
EBITDA	[3]	305	2,548
Capital expenditures		34	10
Total assets		106,719	105,808	$ 105,865
Real Estate
Segment Reporting, Revenue Reconciling Item [Line Items]
Revenues	[1]	4,239	2,747
Net income (loss)	[1]	(511)	180
Provision (benefit) for income taxes	[1]	(180)	134
Interest expense (income), net	[2]	585	524
Depreciation and amortization		25	18
EBITDA	[3]	(81)	856
Capital expenditures		0	0
Total assets		74,336	75,387
Fulfillment Services [Member]
Segment Reporting, Revenue Reconciling Item [Line Items]
Revenues	[1],[4]	7,445	8,561
Net income (loss)	[1],[4]	195	1,040
Provision (benefit) for income taxes	[1],[4]	55	536
Interest expense (income), net	[2],[4]	291	303
Depreciation and amortization	[4]	266	303
EBITDA	[3],[4]	807	2,182
Capital expenditures	[4]	34	10
Total assets	[4]	18,595	26,485
Corporate and Other [Member]
Segment Reporting, Revenue Reconciling Item [Line Items]
Revenues	[1]	31	18
Net income (loss)	[1]	377	228
Provision (benefit) for income taxes	[1]	73	96
Interest expense (income), net	[2]	(871)	(814)
Depreciation and amortization		0	0
EBITDA	[3]	(421)	(490)
Capital expenditures		0	0
Total assets		$ 13,788	$ 3,936

[1] Revenue information provided for each segment includes amounts grouped as Other in the accompanying consolidated statements of operations. Corporate and Other is net of intercompany eliminations.

[2] Interest expense (income), net includes inter-segment interest expense (income) that is eliminated in consolidation.

[3] The Company uses EBITDA (which the Company defines as income (loss) before net interest expense, income taxes, depreciation and amortization, and non-cash impairment charges) in addition to net income (loss) as a key measure of profit or loss for segment performance and evaluation purposes.

[4] Fulfillment services revenues and EBITDA for the three months ended July 31, 2017 included a pre-tax gain of $1,318,000 resulting from the settlement agreement with the State of Florida (see Note 7).

XML

INFORMATION ABOUT THE COMPANY'S OPERATIONS IN DIFFERENT INDUSTRY SEGMENTS (Details 1) - USD ($)		3 Months Ended
		Jul. 31, 2018	Jul. 31, 2017
Revenues	[1]	$ 11,715,000	$ 11,326,000
Fulfillment Revenue Segment [Member]
Revenues		7,445,000	7,243,000
Real Estate Revenue Segment [Member]
Revenues		4,181,000	2,677,000
Corporate and Other [Member]
Revenues	[1]	31,000	18,000
Subscription Services [Member] | Fulfillment Revenue Segment [Member]
Revenues		4,389,000	4,260,000
Membership Fulfillment [Member] | Fulfillment Revenue Segment [Member]
Revenues		1,931,000	1,837,000
Contact Center [Member] | Fulfillment Revenue Segment [Member]
Revenues		976,000	947,000
Other Revenues [Member] | Fulfillment Revenue Segment [Member]
Revenues		149,000	199,000
Developed Land Sales [Member] | Real Estate Revenue Segment [Member]
Revenues		0	0
Residential land sales [Member] | Real Estate Revenue Segment [Member]
Revenues		4,181,000	2,677,000
Commercial land sales [Member] | Real Estate Revenue Segment [Member]
Revenues		0	0
Undeveloped land sales [Member] | Real Estate Revenue Segment [Member]
Revenues		$ 0	$ 0

[1] Revenue information provided for each segment includes amounts grouped as Other in the accompanying consolidated statements of operations. Corporate and Other is net of intercompany eliminations.

XML

INFORMATION ABOUT THE COMPANY'S OPERATIONS IN DIFFERENT INDUSTRY SEGMENTS (Details Textual) - USD ($) $ in Thousands	3 Months Ended
	Jul. 31, 2018	Jul. 31, 2017
Segment Reporting Information [Line Items]
Pre Tax Gain Included Other Revenues	$ 0	$ 1,318