-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, KlqGxVCc9Py/2s+GJWQQvmbaB7xcwzCQAJJurHWAXLqR2SJpd6nsVnc6M3dtuyyC HIcFlh05ebFJqlaZLnN6Uw== 0000054187-97-000007.txt : 19970718 0000054187-97-000007.hdr.sgml : 19970718 ACCESSION NUMBER: 0000054187-97-000007 CONFORMED SUBMISSION TYPE: 10-Q/A PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970430 FILED AS OF DATE: 19970717 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: MAYS J W INC CENTRAL INDEX KEY: 0000054187 STANDARD INDUSTRIAL CLASSIFICATION: OPERATORS OF NONRESIDENTIAL BUILDINGS [6512] IRS NUMBER: 111059070 STATE OF INCORPORATION: NY FISCAL YEAR END: 0731 FILING VALUES: FORM TYPE: 10-Q/A SEC ACT: 1934 Act SEC FILE NUMBER: 001-03647 FILM NUMBER: 97641888 BUSINESS ADDRESS: STREET 1: 9 BOND ST CITY: BROOKLYN STATE: NY ZIP: 11201-5805 BUSINESS PHONE: 7186247400 MAIL ADDRESS: STREET 1: 9 BOND STREET CITY: BROOKLYN STATE: NY ZIP: 11201-5805 10-Q/A 1 FORM 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 [ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended April 30, 1997 [ ] 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 1-3647 J.W. Mays, Inc. (Exact name of registrant as specified in its charter) New York 11-1059070 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 9 Bond Street, Brooklyn, New York 11201-5805 (Address of principal executive offices) (Zip Code) (Registrant's telephone number, including area code) 718-624-7400 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 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 . Number of shares outstanding of the issuer's common stock as of the latest practicable date. Class Outstanding at June 5, 1997 Common Stock, $1 par value 2,135,804 shares This report contains 17 pages. J. W. MAYS, INC. INDEX Page No. Part I - Financial Information: Consolidated Balance Sheet 3 Consolidated Statement of Operations and Retained Earnings 4 Consolidated Statement of Cash Flows 5 Notes to the Consolidated Financial Statements 6 - 12 Management's Discussion and Analysis of Results of Operations and Financial Condition 13 - 15 Part II - Other Information 16
J. W. MAYS, INC. CONSOLIDATED BALANCE SHEET April 30, July 31, ASSETS 1997 1996 --------------------------------------------------------------- --------------- --------------- (Unaudited) (Audited) Property and Equipment - Net (Notes 5 and 7) $28,271,887 $26,080,506 ------------- ------------- Current Assets: Cash and cash equivalents 742,082 412,653 Marketable securities - other investments (Notes 4 and 8) 2,728,583 2,792,800 Receivables 254,077 315,179 Deferred income taxes 118,000 67,000 Prepaid expenses 699,598 1,171,896 Income taxes refundable - 4,496 Real estate taxes refundable - 13,409 ------------- ------------- Total current assets 4,542,340 4,777,433 ------------- ------------- Other Assets: Deferred charges 2,583,894 2,414,194 Less accumulated amortization 1,011,290 883,229 ------------- ------------- Net 1,572,604 1,530,965 Security deposits 584,743 887,121 Unbilled receivables (Note 9) 4,427,788 4,126,436 Receivables 195,127 194,453 Marketable securities - other investments (Notes 4 and 8) 98,550 98,056 Deferred income taxes - 76,000 ------------- ------------- Total other assets 6,878,812 6,913,031 ------------- ------------- TOTAL ASSETS $39,693,039 $37,770,970 ============= ============= LIABILITIES AND SHAREHOLDERS ' EQUITY --------------------------------------------------------------- Long-Term Debt: Mortgages payable (Note 5) $8,842,090 $6,964,717 Other (Note 6) 664,799 1,039,709 ------------- ------------- Total long-term debt 9,506,889 8,004,426 ------------- ------------- Current Liabilities: Payable to securities broker (Note 8) 1,280,992 1,497,320 Accounts payable 39,145 32,460 Payroll and other accrued liabilities 532,133 546,370 Income taxes payable 5,725 - Other taxes payable 3,105 5,194 Current portion of long-term debt - mortgages payable (Note 5) 762,288 483,450 Current portion of long-term debt - other (Note 6) 104,000 60,667 ------------- ------------- Total current liabilities 2,727,388 2,625,461 ------------- ------------- Deferred Income Taxes 67,000 - ------------- ------------- Total liabilities 12,301,277 10,629,887 ------------- ------------- Shareholders' Equity: Common stock, par value $1 each share (shares - 5,000,000 authorized; 2,178,297 issued) 2,178,297 2,178,297 Additional paid in capital 3,346,245 3,346,245 Unrealized gain on available for sale securities (Note 4) 55,684 17,261 Retained earnings 22,101,410 21,883,520 ------------- ------------- 27,681,636 27,425,323 Less common stock held in treasury, at cost - 42,493 shares at April 30, 1997 and 41,900 at July 31, 1996 289,874 284,240 ------------- ------------- Total shareholders' equity 27,391,762 27,141,083 ------------- ------------- Commitments and Contingencies (Note 13) TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $39,693,039 $37,770,970 ============= ============= See Notes to the Consolidated Financial Statements.
J. W. MAYS, INC. CONSOLIDATED STATEMENT OF OPERATIONS AND RETAINED EARNINGS Three Months Ended Nine Months Ended April 30, April 30, -------------- --------------- -------------- --------------- 1997 1996 1997 1996 < ------------- ------------- ------------- ------------- (Unaudited) (Unaudited) (Unaudited) (Unaudited) Revenues Rental income $2,429,193 $2,429,902 $7,343,860 $6,924,337 ------------- ------------- ------------- ------------- Expenses Real estate operating expenses 1,490,821 1,510,799 4,453,965 4,289,605 Administrative and general expenses 489,693 549,219 1,457,732 1,957,123 Depreciation and amortization 251,217 224,384 722,804 664,152 ------------- ------------- ------------- ------------- Total expenses 2,231,731 2,284,402 6,634,501 6,910,880 ------------- ------------- ------------- ------------- Income before investment income, interest expense and income taxes 197,462 145,500 709,359 13,457 ------------- ------------- ------------- ------------- Investment income and interest expense Investment income 64,006 61,392 189,966 186,558 Interest expense (168,455) (171,359) (520,435) (511,602) ------------- ------------- ------------- ------------- (104,449) (109,967) (330,469) (325,044) ------------- ------------- ------------- ------------- Income (loss) before income taxes 93,013 35,533 378,890 (311,587) Income taxes provided (benefit) 75,000 31,400 161,000 (79,600) ------------- ------------- ------------- ------------- Income (loss) 18,013 4,133 217,890 (231,987) Retained earnings, beginning of period 22,083,397 21,788,686 21,883,520 22,024,806 ------------- ------------- ------------- ------------- Retained earnings, end of period $22,101,410 $21,792,819 $22,101,410 $21,792,819 ============= ============= ============= ============= Income (loss) per common share $.01 $- $.10 $(.11) ============= ============= ============= ============= Dividends per share $- $- $- $- ============= ============= ============= ============= Weighted average common shares outstanding 2,136,124 2,136,397 2,136,308 2,136,397 ============= ============= ============= ============= See Notes to the Consolidated Financial Statements.
J. W. MAYS, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS Nine Months Ended April 30, ------------------------------ 1997 1996 ------------- ------------- (Unaudited) (Unaudited) Cash Flows From Operating Activities Income (loss) $217,890 $(231,987) Adjustments to reconcile income (loss) to net cash provided by operating activities: Amortization of premium on marketable debt securities (251) 530 Realized gain on marketable securities 2,360 - Depreciation and amortization 722,804 664,152 Amortization of deferred expenses 165,730 185,656 Other assets - deferred expenses (207,369) (267,412) - security deposits 302,378 (418,447) - unbilled receivables (301,352) (34,052) Deferred income taxes 73,000 (170,800) Changes in: Receivables 60,428 (29,176) Prepaid expenses 472,298 396,309 Income taxes refundable 4,496 - Real estate taxes refundable 13,409 - Accounts payable 6,685 (33,778) Payroll and other accrued liabilities (14,237) 91,554 Income taxes payable 5,725 (5,098) Other taxes payable (2,089) (1,158) ------------- ------------- Cash provided by operating activities 1,521,905 146,293 ------------- ------------- Cash Flows From Investing Activities Capital expenditures (2,914,185) (1,382,399) Marketable securities - other investments: Receipts from sales or maturities 170,000 326,132 Payments for purchases (50,963) (200,915) ------------- ------------- Cash (used in) investing activities (2,795,148) (1,257,182) ------------- ------------- Cash Flows From Financing Activities Borrowings - mortgage debt and term-loan 2,500,000 1,250,000 Borrowings - securities broker 129,347 477,080 Payments - securities broker (345,675) (860,380) Increase (decrease) in long-term debt and other - short-term 322,171 231,619 Increase (decrease) in long-term debt and other - long-term (997,537) (114,404) Purchase of treasury stock (5,634) - ------------- ------------- Cash provided by financing activities 1,602,672 983,915 ------------- ------------- Increase (decrease) in cash 329,429 (126,974) Cash and cash equivalents at beginning of period 412,653 490,315 ------------- ------------- Cash and cash equivalents at end of period $742,082 $363,341 ============= ============= See Notes to the Consolidated Financial Statements.
J. W. MAYS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1. The interim financial statements are prepared pursuant to the requirements for reporting on Form 10-Q. The July 31, 1996 balance sheet was derived from audited financial statements but does not include all disclosures required by generally accepted accounting principles. The interim financial statements and notes thereto should be read in conjunction with the financial statements and notes included in the Company's latest Annual Report on Form 10-K for the year ended July 31, 1996. In the opinion of management, the interim financial statements reflect all adjustments of a normal recurring nature necessary for a fair statement of the results for interim periods. The results of operations for the current period are not necessarily indicative of the results for the entire year ending July 31, 1997. The preparation of the Company's financial statements requires management to make estimates and judgments that affect the reported consolidated statements of operations and consolidated balance sheets and related disclosures. Actual results could differ from those estimates. 2. Income (loss) per common share: Income (loss) per common share has been computed by dividing the income (loss) for the periods by the weighted average number of shares of common stock outstanding during the periods, adjusted for the purchase of treasury stock. Shares used in computing income (loss) per common share were 2,136,124 and 2,136,308 in the three and nine months ended April 30, 1997, respectively, and 2,136,397 in each of the comparable 1996 three and nine month periods. 3. Financial Accounting Standards No. 121: In May 1995, the Financial Accounting Standards Board issued statement of Financial Standards No. 121 ("FAS 121"), "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of", effective for fiscal years beginning after December 15, 1995. FAS 121 requires the recognition of an impairment loss related to long-lived assets and certain identifiable intangibles whenever events or changes in circumstances indicate that the carrying amount of an asset exceeds the sum of its expected future cash flows. In such case, the asset's carrying value must be written down to fair value. Adoption of this accounting standard did not have any effect on the Company's consolidated financial position or results of operation. 4. Marketable Securities - Other Investments: Marketable Securities available for Sale are classified as current assets because the Company anticipates that the funds will be required to apply to the cost of renovation of the Jamaica building to accommodate new tenants for occupancy in May, 1997.
Marketable Securities - Other Investments (continued) As of April 30, 1997, the Company's marketable securities were classified as follows: Gross Gross Unrealized Unrealized Fair Cost Gains Losses Value ------------- ------------- ------------- ------------- Current Available for sale Equity securities $2,617,940 $82,684 $- $2,700,624 Certificate of deposit 27,959 - - 27,959 ------------- ------------- ------------- ------------- Total current $2,645,899 $82,684 $- $2,728,583 ------------- ------------- ------------- ------------- Noncurrent Held to maturity Corporate debt securities $98,550 $3,232 $- $101,782 ------------- ------------- ------------- ------------- Investment income consists of the following: Three Months Ended Nine Months Ended April 30, April 30, ------------------------------ ------------------------------ 1997 1996 1997 1996 __________ __________ __________ __________ Interest income $9,132 $7,914 $26,197 $28,533 Dividend income 55,604 53,112 166,129 157,659 Gain (loss) on sale of marketable securities (730) 366 (2,360) 366 ------------- ------------- ------------- ------------- Total $64,006 $61,392 $189,966 $186,558 ============= ============= ============= =============
5. Long-Term Debt:
April 30, 1997 July 31, 1996 ------------------------------ ---------------------------- Current Annual Final Due Due Due Due Interest Payment Within After Within After Rate Date One Year One Year One Year One Year ------- -------- ------------- ------------- ------------- ----------- Term loan payable to bank (a) Variable 2/01/07 $- $- $20,682 $1,479,318 Mortgages: Jamaica, New York Property (b) 8 1/2% 4/01/07 266,667 3,733,333 - - Jowein Building, Brooklyn, N.Y. (c) 9% 3/31/00 74,749 778,345 83,825 831,560 Fishkill, New York Property (d) 9% 11/01/99 116,209 2,473,302 108,651 2,561,428 Circleville, Ohio Property (e) 7% 9/30/02 296,644 1,661,724 262,767 1,890,947 Other 8 1/2% 5/01/01 8,019 195,386 7,525 201,464 ------------- ------------- ------------- ----------- Total $762,288 $8,842,090 $483,450 $6,964,717 ============= ============= ============= ===========
(a)On August 17, 1995, the Company entered into an agreement with a bank wherein the bank approved a $1,500,000 loan facility for the Company to use to fund building construction/renovation costs to accommodate tenants under lease. The Company had taken down the $1,500,000 and repaid the amount on September 11, 1996 (see Note 5(b) below). There was no prepayment penalty for early repayment of the loan. (b)The Company, on September 11, 1996, closed a loan with a bank in the amount of $4,000,000, the loan is secured by a first mortgage lien covering the entire leasehold interest of the Company, as tenant, in a certain ground lease and building in the Jamaica property. The loan proceeds were utilized by the Company toward (a) payment in full of the outstanding term loan by the Company in favor of the same bank in the amount of $1,500,000 plus interest (see Note 5(a) above) and (b) its costs for the renovations to the portions of the premises in connection with the Company's sublease of a significant portion of the building. Although the loan was closed on September 11, 1996 the entire $4,000,000 was not drawn down until March 31, 1997. As of October 31, 1996 the Company had taken down $1,500,000. Additional amounts of $800,000, $800,000 and $900,000 were taken down December 30, 1996, February 3, 1997 and March 31, 1997, respectively. The interest rate on the loan is 8 1/2% for a period of five (5) years and six (6) months, with such rate to change on the first day of the sixty-seventh (67th) month of the term to a rate equal to the then prime rate plus 1/4%, fixed for the balance of the term. The loan is to become due and payable on the first day of the month following the expiration of ten (10) years and six (6) months from the closing date. During the first six (6) months of the term, the Company is to have the option to secure advances against the loan amount with the loan to convert to a ten (10) year term at the expiration of the initial six (6) month period thereof. As of April 30, 1997, construction period interest incurred amounted to $45,845 which amount was capitalized as part of the renovations. Payments are payable in arrears, on the first day of each and every month during the term, calculated (a) during the initial six (6) month period of the term, interest only, and (b) during the final ten (10) year period of the term, at the sum of the interest plus amortization sufficient to fully liquidate the loan over a fifteen (15) year period. As additional security, the Company conditionally assigned to the bank certain leases and rents on the premises, or portions thereof, now existing and assigned certain leases on the premises hereafter consummated. The Company has an option to prepay principal, in whole or in part, plus interest accrued thereon, at any time during the term, upon thirty (30) days prior notice to the bank, without premium or penalty. Other provisions of the loan agreement provide certain restrictions on the incurrence of indebtedness and the sale or transfer of the Company's ground lease interest in the premises. (c)Mortgage is held by an affiliated corporation owned by members, including certain directors of the Company, of the family of the late Joe Weinstein, former Chairman of the Board of Directors. Interest and amortization of principal are paid quarterly. Effective April 1, 1997, the maturity date of the mortgage which was scheduled to be on March 31, 1998, was extended to March 31, 2000. The interest rate increased from 7 3/8% to 9% commencing April 1, 1997. During the renewal period there will be no change in the constant quarterly payments of interest and principal in the amount of $37,263. (d)On October 28, 1994, the existing first mortgage loan balance on the Fishkill property was paid down by a $200,000 payment and the due date of the mortgage loan was extended for a period of five (5) years from November 1, 1994. The annual interest rate was reduced from 10% to 9% and the principal and interest payments are to be made in constant monthly amounts based upon a fifteen (15) year payout period. (e)The mortgage loan, which is self-amortizing, matures September 30, 2002. The loan is payable at an annual interest rate of 7%. Under the terms of the loan, constant monthly payments, including interest and principal, commenced April 1, 1994 in the amount of $33,767, until October 1, 1997, at which time the monthly payments of interest and principal increase to $36,540. 6. Long-Term Debt - Other: Long-Term debt - other consists of the following:
April 30, 1997 July 31, 1996 ------------------------------- ------------------------------- Due Within Due After Due Within Due After One Year One Year One Year One Year --------------- --------------- --------------- --------------- Deferred compensation * $104,000 $381,334 $60,667 $459,333 Lease security deposits ** - 283,465 - 580,376 ------------- ------------- ------------- ------------- Total $104,000 $664,799 $60,667 $1,039,709 ============= ============= ============= =============
* In fiscal 1964 the Company entered into a deferred compensation agreement with Max L. Shulman, its then Chairman of the Board. This agreement, as amended, provides for a total of $520,000 to be paid in monthly installments of $8,666.67 for a period of 60 months, payable upon the expiration of his employment, retirement or permanent disability as defined in the agreement, or death. Mr Shulman retired as an employee on December 31, 1996. **Does not include three irrevocable letters of credit totaling $275,000 provided by three tenants as lease security deposits. 7. Property and Equipment - Net:
April 30, July 31, 1997 1996 --------------- --------------- Property: Buildings and improvements $32,101,198 $31,988,028 Improvements to leased property 9,143,368 9,131,836 Land 4,008,835 4,008,835 Construction in progress 2,773,123 - ------------- ------------- 48,026,524 45,128,699 Less accumulated depreciation 19,916,470 19,233,598 ------------- ------------- Property - net 28,110,054 25,895,101 ------------- ------------- Fixtures and equipment and other: Fixtures and equipment 510,109 493,748 Other fixed assets 171,183 171,183 ------------- ------------- 681,292 664,931 Less accumulated depreciation 519,459 479,526 ------------- ------------- Fixtures and equipment and other - net 161,833 185,405 ------------- ------------- Property and equipment - net $28,271,887 $26,080,506 ============= =============
8. Payable to Securities Broker: The Company borrowed funds, payable on demand, from a securities broker. The loan balance at April 30, 1997 in the amount of $1,280,992, secured by the Company's marketable securities, accrues interest, which at April 30, 1997, was at the annual rate of 7 3/4%. 9. Unbilled Receivables: Unbilled receivables represent the excess of scheduled rental income recognized on a straight-line basis over rental income as it becomes receivable according to the provisions of each lease. 10. Employees' Retirement Plan: The Company sponsors a noncontributory Money Purchase Plan covering substantially all of its employees. Operations were charged $33,750 and $101,925 as contributions to the Plan for the three and nine months ended April 30, 1997, respectively, and $35,000 and $105,000 as contributions to the Plan for the three and nine months ended April 30, 1996, respectively. 11. Cash Flow Information: For purposes of reporting cash flows, the Company considers cash equivalents to consist of short-term highly liquid investments with maturities of three months or less, which are readily convertible into cash. Supplemental disclosure:
Nine Months Ended April 30, ------------------------------ 1997 1996 __________ __________ Interest paid $494,814 $517,204 Income taxes paid $77,779 $96,298
12. Financial Instruments and Credit Risk Concentrations: Financial instruments that are potentially subject to concentrations of credit risk consist principally of marketable securities-other investments, cash equivalents and receivables. Marketable securities- other investments and cash equivalents are placed with high credit quality financial institutions and instruments to minimize risk. The Company derives rental income from twenty-eight tenants, of which two tenants each accounted for more than 10% of rental income during the quarter ended April 30, 1997. The City of New York is one of the two tenants and the other tenant is 510 Fulton Street Realty Associates, the owners of which are long established in business. McCrory Stores Corporation ("McCrory"), which occupied space in the Company's Jowein Building in the Fulton Mall in downtown Brooklyn, New York, and whose lease, as amended, extended to April 29, 2010, filed for relief under Chapter 11 of the Bankruptcy Code in February 1992. McCrory rejected its lease, as amended, with the Company with the approval of the Bankruptcy Court effective January 31, 1994. The Company has filed a proof of claim with the United States Bankruptcy Court, Southern District of New York in the total amount of $7,753,732 for damages arising from the rejection of the lease ("Lease Rejection Claim") and a proof of claim in the amount of $86,650 for pre-petition unpaid rent, which amount has been allowed in the reduced amount of $84,354.39, without prejudice to McCrory's right to assert other and further objections. The Company has also filed an administrative claim in the amount of approximately $296,000 ("Administrative Claim") for damages resulting from McCrory's failure to repair and maintain the premises as required by the lease. McCrory has filed an objection to the Company's Lease Rejection Claim and Administrative Claim, and asserts that no amount is due and owing. The Company has not included its claim against McCrory in its financial statements due to the pending litigation over the Lease Rejection Claim and Administrative Claim and the uncertainty of the amount that may ultimately be allowed and collected. The Company has leased approximately 69,000 square feet of the approximate 99,000 square feet of space surrendered by McCrory. The remainder of the space of approximately 30,000 square feet is not leaseable due to the renovations required to accommodate six tenants where formerly there was one. The rental income to be derived from the six tenants over the terms of their leases will be approximately $5,040,000 less than the total rental income that would have been due from McCrory for the period February 1, 1994 through April 29, 2010, the termination date of the McCrory lease. Jamesway Corporation ("Jamesway"), which occupied retail space in the Fishkill, New York property and whose lease extended to January 31, 2005, filed for relief under Chapter 11 of the Bankruptcy Code on October 18, 1995. Jamesway rejected its lease for the Fishkill location with the approval of the Bankruptcy Court, effective February 29, 1996 but continued occupancy until March 22, 1996. The Company has filed an amended unsecured claim in the amount of $883,635 for damages resulting from the breach and rejection of the lease and an administrative priority claim in the amount of approximately $189,000 for certain amounts due under the lease after the filing of Jamesway's Chapter 11 petition and for the costs of repairs resulting from Jamesway's failure to fulfill its repair and maintenance obligations under the lease. The Company has made no provision in its financial statements for the claims filed against Jamesway due to the uncertainty of the amount that may ultimately be allowed and collected, except for the pre-petition rental obligations claim of $31,971, which amount is included in the unsecured claim of approximately $883,635. Jamesway has recently stated in its Amended Disclosure Statement for Debtors' Amended Joint Liquidating Plan of Reorganization dated as of April 15, 1997, that creditors will receive distributions equal to approximately 44% of the allowed amounts of their unsecured claims. Accordingly, it is the opinion of management that the Company will realize in excess of $31,971 from the Company's amended unsecured claim of $883,635 and the Company's administrative claim in the amount of approximately $189,000. The Company reports scheduled rental income recognized on a straight-line basis rather than rental income as it becomes a receivable according to the provisions of the lease, in compliance with the provisions of Statement of Financial Accounting Standards No. 13, "Accounting for Leases". The excess of the scheduled rental income of McCrory, recognized on a straight-line basis over rental income reported through January 31, 1994, the effective date of McCrory's rejection of its lease, amounts to $708,673 and such amount was written off and classified as a bad debt during the twelve month period ended July 31, 1994. The excess of the scheduled rental income of Jamesway recognized on a straight-line basis over rental income reported through January 31, 1996, amounted to $424,011 and such amount was written off and classified as a bad debt during the twelve month period ended July 31, 1996. 13. Commitments and Contingencies: There are various lawsuits and claims pending against the Company. It is the opinion of management that the resolution of these matters will not have a material adverse effect on the Company's Consolidated Financial Statements. J. W. MAYS, INC. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION Results of Operations: Three Months Ended April 30, 1997 Compared to the Three Months Ended April 30, 1996: In the three months ended April 30, 1997, the Company reported income in the amount of $18,013, or $.01 per share. The comparable 1996 quarter resulted in income of $4,133. Rental income in the current three months amounted to $2,429,193 compared to $2,429,902 in the comparable 1996 three months. Real estate operating expenses decreased to $1,490,821 from $1,510,799 in the 1996 quarter principally due to decreased maintenance costs. Administrative and general expenses decreased to $489,693 from $549,219 principally due to decreased professional and insurance costs. Depreciation and amortization expense in the current three months increased to $251,217 from $224,384 in the three months ended April 30 1996 because of additional improvements to property. Interest expense exceeded investment income by $104,449 in the current quarter and by $109,967 in the comparable 1996 quarter, principally due to the increased interest on the broker loan discussed in Note 8 and the loans discussed in Notes 5(a) and (b) to the Consolidated Financial Statements. Nine Months Ended April 30, 1997 Compared to the Nine Months Ended April 30, 1996: In the nine months ended April 30, 1997, the Company reported income in the amount of $217,890, or $.10 per share. The comparable 1996 nine month period resulted in a loss of $231,987, or $.11 per share, after the pre-tax write-off of a bad debt amounting to $424,011 relating to the rejection by a tenant of its lease, discussed below. There was no comparable item in the 1997 nine month period. Rental income in the current nine months increased to $7,343,860 from $6,924,337 in the comparable 1996 nine months, primarily due to the addition of three tenants. Real estate operating expenses increased to $4,453,965 from $4,289,605 in the 1996 comparable period principally due to increased real estate taxes, electricity and fuel costs, offset in part by an allowed credit for water and sewage costs in the 1996 nine month period. Administrative and general expenses decreased to $1,457,732 from $1,957,123 principally due to a pre-tax write-off of a bad debt of $424,011 in the 1996 nine month period, discussed below, and a decrease in insurance and legal and professional costs. The Company reports scheduled rental income recognized on a straight-line basis rather than rental income as it becomes a receivable according to the provisions of the lease, in compliance with the provisions of Statement of Financial Accounting Standards No. 13, "Accounting for Leases". The excess of the scheduled rental income of Jamesway recognized on a straight-line basis over rental income reported through January 31, 1996, amounted to $424,011 and such amount was written off and classified as a bad debt in the 1996 nine month period. Depreciation and amortization expense in the current nine months increased to $722,804 from $664,152 in the nine months ended April 30, 1996 because of additional improvements to property. Interest expense exceeded investment income in the amount of $330,469 in the current nine month period and by $325,044 in the nine months ended April 30, 1996 principally due to the increased interest on the broker loan discussed in Note 8 and the loans discussed in Notes 5(a) and (b) to the Consolidated Financial Statements. Liquidity and Capital Resources: The Company has been operating as a real estate enterprise since the discontinuance of the retail department store segment of its operations on January 3, 1989. Cash Flows From Operating Activities: Other Assets: Security Deposits - The Company refunded to a tenant that vacated the premises at the Jowein building, Brooklyn, New York its security deposit in the amount of $305,737. Deferred Expenses - The Company had an expenditure of approximately $152,000 for costs incurred to obtain loan financing for renovations to be performed at the Jamaica, New York building to accommodate two new tenants. Cash Flows From Investing Activities: Capital Expenditures: The Company had expenditures of approximately $2,773,000 for renovations at its Jamaica, New York building to accommodate two new tenants. Cash Flows From Financing Activities: Borrowings: Mortgage Debt - The Company took down a loan in the aggregate amount of $2,500,000 from a bank to apply to the cost of renovations to the Jamaica, New York building to accommodate two new tenants. (See Note 5(b) to the Consolidated Financial Statements). Lease Security: The Company refunded to a tenant that vacated its premises in the Jowein building, Brooklyn, New York its security deposit in the amount of $305,737. The leasing of 69,000 square feet of space in the Jowein Building located in the Fulton Mall in downtown Brooklyn, New York to three chain store tenants and two additional tenants for retail space and one tenant for office space, the leasing of 25,000 square feet to the U. S. Post Office in Fishkill, New York and the leasing to the State of New York of approximately 46,000 square feet of office space for two tenants in the Company's former store in Jamaica, New York, will provide additional working capital for the Company. The Jamaica leases commenced May 1, 1997. To defray the costs of renovations for the State occupancy, the Company borrowed from a bank the principal amount of $2,500,000 (see Note 5(b) to the Consolidated Financial Statements). The Company had working capital of $1,814,952, with a ratio of current assets to current liabilities of 1.67 to 1 at April 30, 1997. Management considers current working capital and borrowing capabilities adequate to cover the Company's planned operating and capital requirements. Part II - Other Information Item 6 - Exhibits and Reports on Form 8-K (a) List of Exhibits: Sequentially Exhibit Numbered Number Exhibit Page _ (2) Plan of acquisition, reorganization, arrangement, liquidation or succession. N/A (4) Instruments defining the rights of security holders, including indentures. N/A (10) Material contracts. N/A (11) Statement re computation of per share earnings. N/A (15) Letter re unaudited interim financial information. N/A (18) Letter re change in accounting principles. N/A (19) Report furnished to security holders. N/A (22) Published report regarding matters submitted to vote of security holders. N/A (24) Power of attorney. N/A (27) Financial data schedule. N/A (99) Additional exhibits. N/A (b) Reports on Form 8-K - No report on Form 8-K was required to be filed by the Company during the three months ended April 30, 1997. SIGNATURES 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. J.W. MAYS, Inc. (Registrant) Date June 5, 1997 Lloyd J. Shulman ------------------- Lloyd J. Shulman Chairman Date June 5, 1997 Alex Slobodin -------------------- Alex Slobodin Exec. Vice-President (Principal Financial Officer) EX-27 2 ARTICLE 5 FIN. DATA SCHEDULE FOR 3RD QTR 10-Q
5 This schedule contains summary financial information extracted from the contained quarterly 10-Q and is qualified in its entirety by reference to such Form 10-Q. 1 3-MOS Jul-31-1997 Aug-01-1996 Apr-30-1997 742,082 2,728,583 254,077 0 0 4,542,340 48,707,816 20,435,929 39,693,039 2,727,388 0 0 0 0 25,213,465 39,693,039 0 7,343,860 0 0 6,634,501 0 520,435 378,890 161,000 217,890 0 0 0 217,890 0.10 0.00
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