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     JanuaryOctober 31, 2018     2020

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 NumberNumber: 1-4702

AMREP Corporation

(Exact Name of Registrant as Specified in its Charter)

Registrant’s telephone number, including area 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

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

Indicate by check mark whether the Registrantregistrant (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 Registrantregistrant 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 Registrantregistrant 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 Registrantregistrant was required to submit and post such files).  Yes x    No ¨

Indicate by check mark whether the Registrantregistrant 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.

If an emerging growth company, indicate by check mark if the Registrantregistrant 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 Registrantregistrant 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 March 15, 2018December 4, 2020 – 8,098,704.7,323,370.

AMREP CORPORATION AND SUBSIDIARIES

INDEX

PART I. FINANCIAL INFORMATION

Item 1.Financial Statements

AMREP CORPORATION AND SUBSIDIARIES

Consolidated Balance Sheets

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

The accompanying notes to consolidated financial statements are an

integral part of these consolidated financial statements.

AMREP CORPORATION AND SUBSIDIARIES

Consolidated Statements of Operations and Retained Earnings (Unaudited)

Three Months Ended JanuaryOctober 31, 20182020 and 20172019

(Amounts in thousands, except per share amounts)

The accompanying notes to consolidated financial statements are an

integral part of these consolidated financial statements.

AMREP CORPORATION AND SUBSIDIARIES

Consolidated Statements of Operations and Retained Earnings (Unaudited)

NineSix Months Ended JanuaryOctober 31, 20182020 and 20172019

(Amounts in thousands, except per share amounts)

The accompanying notes to consolidated financial statements are an

integral part of these consolidated financial statements.

AMREP CORPORATION AND SUBSIDIARIES

Consolidated Statements of Comprehensive Income (Loss) (Unaudited)

Three and NineSix Months Ended JanuaryOctober 31, 20182020 and 20172019

(Amounts in thousands)

The accompanying notes to consolidated financial statements are an

integral part of these consolidated financial statements.

AMREP CORPORATION AND SUBSIDIARIES

Consolidated Statements of Cash Flows from OperationsShareholders’ Equity (Unaudited)

NineThree Months Ended JanuaryOctober 31, 20182020 and 20172019

(Amounts in thousands)

The accompanying notes to consolidated financial statements are an

integral part of these consolidated financial statements.

AMREP CORPORATION AND SUBSIDIARIES

Consolidated Statements of Shareholders’ Equity (Unaudited)

Six Months Ended October 31, 2020 and 2019

(Amounts in thousands)

The accompanying notes to consolidated financial statements are an

integral part of these consolidated financial statements.

AMREP CORPORATION AND SUBSIDIARIES

Consolidated Statements of Cash Flows (Unaudited)

Six Months Ended October 31, 2020 and 2019

(Amounts in thousands)

The accompanying notes to consolidated financial statements are an

integral part of these consolidated financial statements.

AMREP CORPORATION AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Unaudited)

NineThree and Six Months Ended JanuaryOctober 31, 20182020 and 20172019

(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”)land development and its subsidiaries and the fulfillment services business operated by Palm Coast Data LLC (“Palm Coast”) and its affiliates.homebuilding. The Company’sCompany has no foreign sales are insignificant.sales. 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 qualified,indicates, all references to 20182021 and 20172020 are to the fiscal years ending April 30, 20182021 and 20172020 and all references to the thirdsecond quarter and first ninesix months of 20182021 and 20172020 mean the fiscal three month and ninesix month periods ended JanuaryOctober 31, 20182020 and 2017.2019.

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, 2017,2020, which was filed with the SEC on July 18, 201727, 2020 (the “2017“2020 Form 10-K”). Certain 20172020 balances in these financial statements have been reclassified to conform to the current year presentation with no effect on either net incomeloss 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 2020 Form 10-K, except for those adopted as described below.

Revenue Recognition

Recently IssuedAdopted Accounting Pronouncements

In May 2014,August 2018, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09,2018-13, Revenue from Contracts with CustomersFair Value Measurement: Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement. Since that date,ASU 2018-13 eliminates certain disclosure requirements for fair value measurements for all entities, requires public entities to disclose certain new information and modifies some disclosure requirements to improve the FASB has issued additional ASUs providing further revenue recognition guidance (collectively, “Topic 606”). Topic 606 clarifieseffectiveness of disclosures in the principlesnotes to financial statements. ASU 2018-13 was effective 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 defineson May 1, 2020. The adoption of ASU 2018-13 by the Company did not have a five-step process to achieve this core principle, and more judgment and estimates may be required under Topic 606 than are currently required under generally accepted accounting principles. The two permitted transition methods under Topic 606 are (i) the full retrospective method, in which case the standard would be applied to each prior reporting period presented, or (ii) the modified retrospective method, in which case the cumulativematerial effect of applying the standard would be recognized at the date of adoption. The Company intends to use the modified retrospective transition method upon adoption. on its consolidated financial statements.

In August 2015,2018, the FASB issued ASU No. 2015-14,2018-14, Revenue from ContractsCompensation—Retirement Benefits—Defined Benefit Plans—General (Subtopic 715-20): Disclosure Framework—Changes to the Disclosure Requirements for Defined Benefit Plans. ASU 2018-14 removes disclosures that no longer are considered cost beneficial, clarifies the specific requirements of disclosures and adds disclosure requirements identified as relevant for companies with Customers (Topic 606): Deferral of the Effective Date, which deferred the required adoption date until May 1, 2018defined benefit retirement plans. ASU 2018-14 was effective for the Company although an earlieron May 1, 2020. The adoption is permitted. The Company does not intend to early adopt Topic 606.

The Company has established an implementation team to evaluate the impact of Topic 606 on the Company’s accounting policies, processes and system requirements, as well as its consolidated financial statements. Depending on the results of the evaluation, there could be changes to the timing of recognition of revenues and related costs. The Company continues its evaluation of the impact of Topic 606. As of January 31, 2018,ASU 2018-14 by the Company haddid not determinedhave a reasonable estimate of the impact of these new ASUsmaterial effect on its consolidated financial statements, includingstatements.

In December 2019, the effectFASB issued ASU No. 2019-12, Income Taxes – Simplifying the Accounting for Income Taxes, which removes certain exceptions for companies related to tax allocations and simplifies when companies recognize deferred tax liabilities in an interim period. ASU 2019-12 will be effective for the Company’s fiscal year beginning May 1, 2021. The Company is currently evaluating the impact that this ASU will have on the Company’s operating results, if any. consolidated financial statements.

(2)       RESTRICTED CASH

The implementation team has reported the progress and status of its evaluation to the Audit Committeefollowing provides a reconciliation of the Company’s Boardcash, cash equivalents and restricted cash as reported in the consolidated statement of Directors.cash flows for the six months ended October 31, 2019:

There was no restricted cash at October 31, 2020 and April 30, 2020.

(3)       REAL ESTATE INVENTORY

Receivables,Real estate inventory consists of:

Land held for development represents property located in areas that are planned to be developed in the near term. As of October 31, 2020 and April 30, 2020, the Company held approximately 6,000 acres of land in New Mexico classified as land held for development. Construction in process relates to construction costs for residential homes being built and offered for sale by the homebuilding business segment.

(4)  INVESTMENT ASSETS, NET

Investment assets, net consist of:

DuringLand held for long-term investment represents property located in areas that are not planned to be developed in the first nine monthsnear term and thus has not been offered for sale. As of 2018, revenues from one major customerOctober 31, 2020 and April 30, 2020, the Company held approximately 12,000 acres of land in New Mexico classified as land held for long-term investment.

Buildings are comprised of 204,000 square feet of warehouse and office buildings in Palm Coast, Florida and a 14,000 square foot retail building in the Company’s fulfillment services business totaled $3,189,000 or approximately 10.3% of total revenuesLas Fuentes at Panorama Village subdivision in Rio Rancho, New Mexico. Depreciation associated with the buildings was $262,000 and $279,000 for the Company. As of Januarysix months ended October 31, 2018, the Company’s fulfillment services business had $682,000 of outstanding accounts receivable from this customer, which was collected in full by March 16, 2018. This customer has given the Company’s fulfillment services business notice that a significant portion of its business will be transferred from Palm Coast at the end of 2018.

Property, plant2020 and equipment, net consist of:

Depreciation of property, plantOctober 31, 2019 and equipment charged to operations was $319,000$140,000 and $954,000$157,000 for the three months ended October 31, 2020 and nine month periods ended JanuaryOctober 31, 2018 and $341,000 and $1,051,000 for2019. Construction in process relates to the construction costs of such retail building, which was completed during the three and nine month periodsmonths ended JanuaryOctober 31, 2017.2020.

(5)       OTHER ASSETS

Other assets consist of:

Deferred order entry costs represent costs incurredPrepaid expenses as of October 31, 2020 primarily consist of prepaid insurance, stock compensation, prepayments for office rent, in-process prepayments of amounts due under the public improvement district and security deposits for the buildings in connection with the data entryPalm Coast, Florida. Prepaid expenses as of customer subscription information to database filesOctober 31, 2019 primarily consist of prepaid insurance and are charged directly to operations generally over a twelve month period.stock compensation.

Depreciation expense associated with property and equipment was $8,000 and $9,000 for the six months ended October 31, 2020 and October 31, 2019 and $2,000 and $5,000 for the three months ended October 31, 2020 and October 31, 2019.

(6)       ACCOUNTS PAYABLE AND ACCRUED EXPENSES

Accounts payable and accrued expenses consist of:

Fulfillment Services: As of January 31, 2018, the accounts payable and accrued expenses total for the Company’s fulfillment services business included customer postage deposits of $3,362,000, accrued expenses of $496,000, trade payables of $443,000 and other of $1,119,000. As of April 30, 2017, the accounts payable and accrued expenses total for the Company’s fulfillment services business included customer postage deposits of $3,178,000, accrued expenses of $488,000, trade payables of $617,000 and other of $1,354,000.(7)       NOTES PAYABLE

Real Estate: AsNotes payable, net consist of:

Refer to Notes 8 and 17 to the consolidated financial statements contained in the 2020 Form 10-K for additional detail about each of January 31, 2018, the accounts payable and accrued expenses total for the Company’s real estate business included accrued expenses of $900,000, trade payables of $1,961,000, real estate customer deposits of $490,000 and other of $5,000. As of April 30, 2017, the accounts payable and accrued expenses total for the Company’s real estate business included accrued expenses of $967,000, trade payables of $0, real estate customer deposits of $155,000 and other of $16,000.following outstanding financing facilities that were entered into prior to May 1, 2020.

Notes payable consist of:

During December 2017, Lomas Encantadas Development Company LLC (“LEDC”), an indirect subsidiary of AMREP Corporation, entered into a Development Loan Agreement with BOKF, NA dba Bank of Albuquerque (“Lender”). The Development Loan Agreement is evidenced by a Non-Revolving Line of Credit Promissory Note, dated December 18, 2017, and is secured by a Mortgage, Security Agreement and Financing Statement, between LEDC and Lender, dated November 16, 2017, with respect to 343 planned residential lots within the Lomas Encantadas subdivision (the “Mortgaged Property”) located in Rio Rancho, New Mexico. Pursuant to a Guaranty Agreement, dated December 18, 2017, entered into by AMREP Southwest in favor of Lender, AMREP Southwest has guaranteed LEDC’s obligations under each of the above agreements. The Development Loan Agreement, Non-Revolving Line of Credit Promissory Note, Mortgage, Security Agreement and Financing Statement, Guaranty Agreement and other related transaction documents are collectively referred to as the “Loan Documentation.”

Pursuant to the Loan Documentation, Lender agrees to lend up to $4,750,000 to LEDC on a non-revolving line of credit basis to partially fund the development of the Mortgaged Property. LEDC expects to fully utilize the $4,750,000 for its land development activities. 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. Lender is required to release the lien of its mortgage on any lot included in the Mortgaged Property upon LEDC making a principal payment of $43,000 or $53,000 depending on the location of the lot. LEDC is required to make periodic principal repayments to the extent not previously paid as follows: $1,370,000 on or before August 18, 2019, $599,000 on or before November 18, 2019, $599,000 on or before February 18, 2020, $599,000 on or before May 18, 2020, $599,000 on or before August 18, 2020 and $599,000 on or before November 18, 2020. The outstanding principal amount of the loan as of January 31, 2018 was $638,000. The outstanding principal amount of the loan may be prepaid at any time without penalty. The loan is scheduled to mature on December 18, 2021. LEDC incurred certain customary costs and expenses and paid certain fees to Lender in connection with the loan.

LEDC and AMREP Southwest haveASW made certain representations and warranties in the Loan Documentationconnection with this loan and are required to comply with various covenants, reporting requirements and other customary requirements for similar loans. The Loan Documentationloan documentation contains customary events of default for similar financing transactions, including:including LEDC’s failure to make principal, interest or other payments when due; the failure of LEDC or AMREP SouthwestASW to observe or perform their respective covenants under the Loan Documentation;loan documentation; the representations and warranties of LEDC or AMREP SouthwestASW being false; the insolvency or bankruptcy of LEDC or AMREP Southwest;ASW; and the failure of AMREP SouthwestASW to maintain a tangible net worth of at least $35$32 million. Upon the occurrence and during the continuance of an event of default, LenderBOKF may declare the outstanding principal amount and all other obligations under the Loan Documentationloan immediately due and payable. LEDC incurred customary costs and expenses and paid certain fees to BOKF in connection with the loan. At JanuaryOctober 31, 2018, both2020, LEDC and AMREP Southwest werewas in compliance with the financial covenants contained withinin the Loan Documentation.loan documentation. The total book value of the property mortgaged pursuant to this loan was $289,000 as of October 31, 2020. The Company’s capitalized interest and fees related to this loan were immaterial during the three and six months ended October 31, 2020.

Refer to Note 8 to the consolidated financial statements contained in the 2020 Form 10-K for additional detail about each of the following expired or terminated financing facilities:

The following table summarizes the scheduled principal repayments subsequent to October 31, 2020:

(8)       REVENUES

Land sale revenues. Substantially all of the land sale revenues were received from four customers during each of the three and six months ended October 31, 2020 and from three customers during each of the three and six months ended October 31, 2019.

Home sale revenues. Home sale revenues are from homes constructed and sold by the Company in the Albuquerque metropolitan area. All home sale revenues were received from one customer during the three months ended October 31, 2020.

Rental revenues. Rental revenues consist of rent received from tenants at the Company’s warehouse and office buildings in Palm Coast, Florida and at a retail building in the Las Fuentes at Panorama Village subdivision in Rio Rancho, New Mexico.

Other revenues for the third quarter and first nine months of 2018 and 2017. Other revenues consist of:

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 20172020 Form 10-K for additional detail about the settlement agreement entered into between Palm Coast and the Stateeach category of Florida in the first quarter of 2018. In June 2009, Palm Coast received $3,000,000 pursuant to an agreement with the State of Florida (the “Award Agreement”) as part of the incentives made available in connection with the consolidation of the Company’s fulfillment services operations at its Palm Coast, Florida location. The Award Agreement included certain performance requirements in terms of job retention, job creation and capital investment which, if not met by Palm Coast, entitled the State of Florida to obtain the return of a portion, or all, of the $3,000,000. Palm Coast had not met certain of the performance requirements in the Award Agreement. During the first quarter of 2018, Palm Coast entered into a Settlement Agreement and Mutual General Release (the “Settlement Agreement”) with the State of Florida. Pursuant to the Settlement Agreement, (1) the Award Agreement was terminated, (2) each of the parties released all claims relating to the Award Agreement that the releasing party may have had against the other party and (3) Palm Coast agreed to pay the State of Florida $1,763,000 as follows: (a) $163,000 during the first quarter of 2018 and (b) 40 quarterly payments of $40,000 each, without interest, on the first business day of each calendar quarter starting on October 1, 2017 and ending on July 1, 2027. Palm Coast timely paid the State of Florida $163,000 during the first quarter of 2018, $40,000 during the second quarter of 2018 and $40,000 during the third quarter of 2018, leaving a balance owed to the State of Florida of $1,520,000 as of January 31, 2018.revenues.

In the Company’s consolidated financial statementsThe Company owns certain minerals and asmineral rights in and under approximately 55,000 surface acres of land in Sandoval County, New Mexico. The lease to a result of entering into the Settlement Agreement, Palm Coast reduced its previously recorded liability of $3,000,000 and a related $26,000 interest accrual by $1,620,000 to $1,406,000 by recognizing a pre-tax gain of $1,318,000 and recording deferred revenue of $302,000. The $1,318,000 pre-tax gain was determined based on depreciation previously taken on assets acquired with Award Agreement funds that were retained by Palm Coast and was recognized in Other revenues during the first nine months of 2018. The $302,000 deferred revenue will be recognized over the remaining life of these assets (approximately seven years from January 31, 2018), with $61,000 having been recognized during the first nine months of 2018 resulting in a deferred revenue balance of $241,000 as of January 31, 2018. As a result of paying the State of Florida $163,000 during the first quarter of 2018, $40,000 during the second quarter of 2018 and $40,000 during the third quarter of 2018, Palm Coast recognized $41,000 of imputed interest expense and reduced its remaining balance sheet liability of $1,406,000 as of the date of the Settlement Agreement to $1,204,000 as of January 31, 2018. These balance sheet liability numbers are less than the amounts owed to the State of Florida of $1,763,000 as of the date of the Settlement Agreement and $1,520,000 as of January 31, 2018 because they have been adjusted to reflect the present values of these deferred non-interest bearing obligations. In February 2018, the Company, Palm Coast and the State of Florida entered into an agreementparty with respect to the remaining payment obligations under the Settlement Agreement (see Note 10).such mineral rights expired in September 2020 and no drilling had commenced with respect to such mineral rights. The Company did not record any revenue in 2021 related to this lease.

In addition, referGeneral and administrative expenses consist of:

Corporate general and administrative expenses included a non-cash pre-tax pension settlement charge of $2,929,000 in the three and six months ended October 31, 2019, due to the Company’s defined benefit pension plan paying an aggregate of $7,280,000 in lump sum payouts of pension benefits to former employees. No such settlement expense was incurred in the same periods of 2020.

Pension Plan

Refer to Note 1011 to the consolidated financial statements contained in the 20172020 Form 10-K for detail aboutregarding the Oil and Gas Lease and the Addendum thereto with Thrust Energy, Inc. and Cebolla Roja, LLC. No royalties under the Lease were received during the first nine months of 2018. Revenue from this transaction is being recorded over the lease term and approximately $57,000 and $171,000 was recognized during the third quarter and first nine months of each of 2018 and 2017. At January 31, 2018, there was approximately $133,000 of deferred revenue remaining to be recognized before the end of the lease term in September 2018.

During the first quarter of 2017, a subsidiary of AMREP Southwest sold a single tenant retail commercial building in Rio Rancho, New Mexico, which resulted in a pre-tax gain of $1,496,000 that was recognized in Other revenues during the first nine months of 2018.

Retirement plan

The Company has aCompany’s defined benefit retirement plan for which accumulated benefits were frozen and future service credits were curtailed as of March 1, 2004. The Company has secured $4,535,000 of accrued pension-related obligations with first lien mortgages on certain real property in favor of the Pension Benefit Guaranty Corporation (the “PBGC”). 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 third quarter of 2018, 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.

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, (loss) net of the related deferred income tax effect. The Company recognized other comprehensive income of $225,000$180,000 and $674,000$252,000 for the six months ended October 31, 2020 and October 31, 2019 and $90,000 and $98,000 for the three and nine months ended JanuaryOctober 31, 2018,2020 and $248,000 and $746,000 for the same periods of 2017,October 31, 2019 related to the amortization of the plan’s unrecognized net loss includeda decrease in the Accumulated other comprehensive loss,Company’s pension liability, net in the accompanying financial statements.

of tax. The Company funds the pension plan in compliance with IRS funding requirements. The Company contributed $1,040,000made voluntary contributions to the pension plan of $1,847,000 during the ninethree and six months ended JanuaryOctober 31, 20182020 and none for$3,600,000 during the same period of 2017.three and six months ended October 31, 2019.

Equity compensation planCompensation Plan

In September 2016,Refer to Note 11 to the consolidated financial statements contained in the 2020 Form 10-K for detail regarding the AMREP Corporation 2016 Equity Compensation Plan (the “2016 Equity“Equity Plan”) replaced the AMREP Corporation 2006 Equity Compensation Plan (together with the 2016 Equity Plan, the “Equity Plans”). The Company issued 25,7509,000 shares of restricted common stock under the 2016 Equity Plan during each of the first ninesix months of 2018. In addition, 5,000 shares of restricted common stock issued under the 2006 Equity Plan prior to 2018 were returned to the Company during the second quarter of 2018ended October 31, 2020 and will not vest due to the retirement of an employee.October 31, 2019. During the first ninesix months of 2018, 10,500ended October 31, 2020 and October 31, 2019, 12,834 shares and 14,833 shares of restricted common stock previously issued under the Equity Plans vested leaving 34,750Plan vested. As of October 31, 2020 and October 31, 2019, 29,000 shares and 36,834 shares of restricted sharescommon stock previously issued under the Equity Plans thatPlan had not vested as of January 31, 2018. For the third quarter and first nine months of 2018, thevested. The Company recognized $31,000 and $76,000 of non-cash compensation expense related to the vesting of restricted shares of common stock issued,net of forfeitures of $7,000 and $19,000 and $48,000$54,000 for the same periods of 2017.six months ended October 31, 2020 and October 31, 2019 and $25,000 and $30,000 for the three months ended October 31, 2020 and October 31, 2019. As of JanuaryOctober 31, 2018,2020 and October 31, 2019, there was $138,000$73,000 and $135,000 of unrecognized compensation expense related to restricted shares of common stock previously issued under the Equity PlansPlan which had not vested as of that date,those dates, which is expected to be recognized over the remaining vesting term not to exceed three years.

OnIn connection with the last trading dayresignation of a director, the Company (i) issued 12,411 shares of common stock during the three months ended October 31, 2020 pursuant to an equivalent number of deferred common share units previously issued to such director and (ii) paid $20,000 to such director in lieu of issuance of deferred common share units earned for calendar year 2017, and based upon days of service, each2020. The Company recognized non-cash expense related to deferred common share units expected to be issued to non-employee membermembers of the Company’s Board of Directors was issued the number of deferred common share units of the Company under the 2016 Equity Plan equal to $20,000 divided by the closing price per share of common stock reported on the New York Stock Exchange on such date. Based on the closing price per share of $7.02 on December 29, 2017, the Company issued a total of 11,396 deferred common share units to members of the Company’s Board of Directors. Director compensation expense is recognized$35,000 and $53,000 for the annual grant of deferred common share units ratably oversix months ended October 31, 2020 and October 31, 2019 and $21,000 and $23,000 for the director’s service in office during the calendar year.During the first ninethree months of 2018,the total non-cash director fee compensation related to the deferred common share units was $60,000.ended October 31, 2020 and October 31, 2019.

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. corporateInterest (expense) income, tax by, among other things, lowering U.S. corporate income tax rates. The Act reduces 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 will be phased in, resulting in a U.S. statutory federal corporate tax rate of approximately 29.7% for our fiscal year ending April 30, 2018, and a 21% rate for subsequent fiscal years. The 29.7% federal corporate tax rate is a blended rate for the April 30, 2018 fiscal year-end based on a prorated percentage of the number of days prior and subsequent to the January 1, 2018 effective date.net consists of:

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”). In accordance with SAB 118, a company must reflect the income tax effects of those aspects of the Act for which the accounting under ASC 740 is complete. To the extent that a company’s accounting for certain income tax effects of the Tax Act is incomplete but it is able to determine a reasonable estimate, it must record a provisional estimate to be included in the financial statements. If a company cannot determine a provisional estimate to be included in the financial statements, it should continue to apply ASC 740 on the basis of the provision of the tax laws that were in effect immediately before the enactment of the Act.

As of January 31, 2018, the Company had not completed its accounting for the tax effects of the Act, but was able to make reasonable estimates of the impact of the reduction in corporate tax rate and the re-measurement of deferred tax balances:

The Company’s effective tax rate for the third quarter and first nine months was increased by the effect of a net income tax expense increase of $3,057,000 related to accounting for the tax effects of the Act. Excluding this increase, the Company’s effective tax rate was 27.7% and 32.5% for the third quarter and first nine months of 2018 compared to 35.5% and 32.5% for the same periods of 2017. The difference between the statutory rate and the effective rate of the tax provision after excluding the $3,057,000 was primarily due to state taxes.

The total tax effect of gross unrecognized tax benefits in the accompanying financial statements at both January 31, 2018 and April 30, 2017 was $58,000, which, if recognized, would have an impact on the effective tax rate. The Company believes it is reasonably possible that the liability for unrecognized tax benefits will not change in the next twelve months.

Refer to Note 72 to the consolidated financial statements contained in the 2020 Form 10-K for detail aboutregarding the Settlement Agreement between the State of Florida and Palm Coast entered into in the first quarter of 2018. In February 2018, Palm Coast and the Company entered intodeferred purchase price with respect to a Release Agreement (the “Release Agreement”) with the State of Florida. Pursuant to the Release Agreement, (1) Palm Coast paid the State of Florida $956,000, (2) eachformer business segment of the parties released all claims relating to the guaranty agreement (the “Guaranty Agreement”) between the Company and the State of Florida entered into in the first quarter of 2018 and the payment obligations under the Settlement Agreement that the releasing party may have had against each of the other parties and (3) each of the Guaranty Agreement and the payment obligations under the Settlement Agreement shall be deemed terminated and none of the parties shall have any further liabilities or obligations with respect thereto. The Company expects to recognize a gain related to the Release Agreement of approximately $257,000 during the fourth quarter of 2018.Company.

Other income for the three and six months ended October 31, 2020 consist of a settlement payment of $650,000 from a former business segment of the Company.-Refer to Note 2 to the consolidated financial statements contained in the 2020 Form 10-K for detail regarding the former business segment of the Company. During the six months ended October 31, 2020, affiliates of the Company and affiliates of this former business segment entered into a settlement agreement pursuant to which, among other things, the Company received $650,000 as a settlement payment and $350,000 for rent with respect to properties in Palm Coast, Florida for the period May 2020 through August 2020.

In August 2020, the Company repurchased 11,847 shares of common stock of the Company at a price of $4.48 per share in a privately negotiated transaction. As of the date of the repurchase, the repurchased shares were retired and returned to the status of authorized but unissued shares of common stock.

In September 2020, the Board of Directors of the Company authorized the Company to purchase up to 1,000,000 shares of common stock of the Company from time to time pursuant to a share repurchase program, subject to the total expenditure for the purchase of shares under the share repurchase program not exceeding $5,000,000, exclusive of any fees, commissions and other expenses related to such repurchases. Under the share repurchase program, the Company may have repurchased its common stock from time to time, in amounts, at prices, and at such times as the Company deems appropriate, subject to market conditions, legal requirements and other considerations. The Company’s repurchases may have been executed using open market purchases, unsolicited or solicited privately negotiated transactions or other transactions, and may have been effected pursuant to trading plans intended to qualify under Rule 10b5-1 of the Securities Exchange Act of 1934, as amended. The share repurchase program did not obligate the Company to repurchase any specific number of shares and may have been suspended, modified or terminated at any time without prior notice. The share repurchase program did not contain a time limitation during which repurchases are permitted to occur. In October 2020, the Company repurchased 675,616 shares of common stock of the Company at a price of $6.18 per share in a privately negotiated transaction pursuant to the share repurchase program. As of the date of the repurchase, the repurchased shares were retired and returned to the status of authorized but unissued shares of common stock.

The following tables set forth summarized data relative to the industry segments in which the Company operated for the three and nine month periods ended January 31, 2018 and 2017indicated (in thousands):