-----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, Ka5VX8y7VYBsGj1dRnrIeOGmH5TVXVHUdiqjabb9fd5DOyQwRP86taRhtsCz0DNX sMc1NwfP6icIKx8Sl85+GQ== 0000054187-02-000006.txt : 20020607 0000054187-02-000006.hdr.sgml : 20020607 20020606121233 ACCESSION NUMBER: 0000054187-02-000006 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20020430 FILED AS OF DATE: 20020606 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 SEC ACT: 1934 Act SEC FILE NUMBER: 001-03647 FILM NUMBER: 02671752 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 1 sub10q.txt APRIL 30,2002 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, 2002 [ ] 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, 2002 Common Stock, $1 par value 2,033,280 shares This report contains 16 pages. -1- J. W. MAYS, INC. INDEX Page No. Part I - Financial Information: Consolidated Balance Sheet 3 Consolidated Statement of Income and Retained Earnings 4 Consolidated Statement of Comprehensive Income 4 Consolidated Statement of Cash Flows 5 Notes to Consolidated Financial Statements 6 - 11 Management's Discussion and Analysis of Results of Operations and Financial Condition 12 - 14 Part II - Other Information 15 -2-
J. W. MAYS, INC. CONSOLIDATED BALANCE SHEET April 30, July 31, ASSETS 2002 2001 --------------------------------------------------------------- --------------- --------------- (Unaudited) (Audited) Property and Equipment - Net (Notes 6 and 8) $32,113,718 $31,763,131 ------------- ------------- Current Assets: Cash and cash equivalents 3,591,284 1,003,130 Marketable securities (Note 4) 44,522 43,741 Receivables (Note 9) 304,135 619,062 Deferred income taxes 87,000 112,000 Prepaid expenses 681,029 1,083,256 ------------- ------------- Total current assets 4,707,970 2,861,189 ------------- ------------- Other Assets: Deferred charges 3,012,081 2,980,935 Less accumulated amortization 1,805,946 1,654,395 ------------- ------------- Net 1,206,135 1,326,540 Security deposits 713,889 663,358 Unbilled receivables (Note 9) 4,669,600 4,756,828 Unbilled receivables - affiliated company (Note 9) 45,484 181,937 Receivables 254,935 430,914 Marketable securities (Note 4) 4,408,376 3,593,770 ------------- ------------- Total other assets 11,298,419 10,953,347 ------------- ------------- TOTAL ASSETS $48,120,107 $45,577,667 ============= ============= LIABILITIES AND SHAREHOLDERS' EQUITY --------------------------------------------------------------- Long-Term Debt: Mortgages payable (Note 6) $7,941,949 $7,331,449 Other (Note 7) 412,316 364,190 ------------- ------------- Total long-term debt 8,354,265 7,695,639 ------------- ------------- Deferred Income Taxes 3,231,000 2,924,000 ------------- ------------- Current Liabilities: Accounts payable 27,914 29,324 Payroll and other accrued liabilities 629,979 680,746 Income taxes payable 471,220 200,689 Other taxes payable 6,503 2,941 Current portion of long-term debt - mortgages payable (Note 6) 812,611 968,395 Current portion of long-term debt - other (Note 7) - 43,333 ------------- ------------- Total current liabilities 1,948,227 1,925,428 ------------- ------------- Total liabilities 13,533,492 12,545,067 ------------- ------------- 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 1,000,253 515,878 Retained earnings 29,122,172 28,052,532 ------------- ------------- 35,646,967 34,092,952 Less common stock held in treasury, at cost - 145,017 shares at April 30, 2002 and at July 31, 2001 1,060,352 1,060,352 ------------- ------------- Total shareholders' equity 34,586,615 33,032,600 ------------- ------------- Contingencies (Note 12) TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $48,120,107 $45,577,667 ============= ============= See Notes to Consolidated Financial Statements. -3-
J. W. MAYS, INC. CONSOLIDATED STATEMENT OF INCOME AND RETAINED EARNINGS Three Months Ended Nine Months Ended April 30, April 30, --------------- ---------------- --------------- -------------- 2002 2001 2002 2001 -------------- -------------- -------------- ------------ (Unaudited) (Unaudited) (Unaudited) (Unaudited) Revenues Rental income (Notes 5 and 9) $3,163,369 $2,751,613 $9,301,241 $8,093,265 Rental income - affiliated company (Note 9) 122,871 103,402 329,676 310,207 -------------- -------------- -------------- ------------ Total revenues 3,286,240 2,855,015 9,630,917 8,403,472 -------------- -------------- -------------- ------------ Expenses Real estate operating expenses 1,494,739 1,501,269 4,493,946 4,465,851 Administrative and general expenses 633,114 566,155 1,967,319 1,779,462 Bad debt (recovery) - - - (47,532) Depreciation and amortization 288,405 282,777 850,015 806,331 -------------- -------------- -------------- ------------ Total expenses 2,416,258 2,350,201 7,311,280 7,004,112 -------------- -------------- -------------- ------------ Income from operations before investment income, interest expense and income taxes 869,982 504,814 2,319,637 1,399,360 -------------- -------------- -------------- ------------ Investment income and interest expense: Investment income (Note 4) 24,807 63,075 161,717 184,865 Interest expense (Notes 6 and 11) (174,150) (133,782) (535,714) (419,816) -------------- -------------- -------------- ------------ (149,343) (70,707) (373,997) (234,951) -------------- -------------- -------------- ------------ Income before income taxes 720,639 434,107 1,945,640 1,164,409 Income taxes provided 384,000 140,000 876,000 423,000 -------------- -------------- -------------- ------------ Net income 336,639 294,107 1,069,640 741,409 Retained earnings, beginning of period 28,785,533 27,209,240 28,052,532 26,761,938 -------------- -------------- -------------- ------------ Retained earnings, end of period $29,122,172 $27,503,347 $29,122,172 $27,503,347 ============== ============== ============== ============ Income per share of common stock (Note 2) $.17 $.14 $.53 $.36 ============== ============== ============== ============ Dividends per share $- $- $- $- ============== ============== ============== ============ Average common shares outstanding 2,033,280 2,063,280 2,033,280 2,071,064 ============== ============== ============== ============ See Notes to Consolidated Financial Statements. CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME Three Months Ended Nine Months Ended April 30, April 30, --------------- ---------------- --------------- -------------- 2002 2001 2002 2001 -------------- -------------- -------------- ------------ (Unaudited) (Unaudited) (Unaudited) (Unaudited) Net Income $336,639 $294,107 $1,069,640 $741,409 -------------- -------------- -------------- ------------ Other comprehensive income, net of taxes (Note 3) Unrealized gain on available-for-sale securities: Net of taxes of $134,000 and $47,000 for the three months ended April 30, 2002 and 2001, respectively, and $224,000 and $155,000 for the nine months ended April 30, 2002 and 2001, respectively. 310,386 89,943 484,375 299,558 Less reclassification adjustment (2,270) - (18,475) 248 -------------- -------------- -------------- ------------ Other comprehensive income 308,116 89,943 465,900 299,806 -------------- -------------- -------------- ------------ Comprehensive Income $644,755 $384,050 $1,535,540 $1,041,215 ============== ============== ============== ============ See Notes to Consolidated Financial Statements. -4-
J. W. MAYS, INC. CONSOLIDATED STATEMENT OF CASH FLOWS Nine Months Ended April 30, -------------- --------------- 2002 2001 -------------- --------------- (Unaudited) (Unaudited) Cash Flows From Operating Activities: Net income $1,069,640 $741,409 Adjustments to reconcile income to net cash provided by operating activities: Realized (gain) loss on marketable securities 17,705 (248) Impairment of Marketable Securities 49,770 - Depreciation and amortization 850,015 806,331 Amortization of deferred expenses 194,701 157,426 Other assets - deferred expenses (74,296) (368,858) - unbilled receivables 87,228 8,460 - unbilled receivables - affiliated company 136,453 136,452 - receivables 175,979 (256,009) Deferred income taxes 108,000 176,000 Changes in: Receivables 314,927 (99,260) Prepaid expenses 402,227 384,213 Accounts payable (1,410) (10,444) Payroll and other accrued liabilities (50,767) 108,363 Income taxes payable 270,531 103,640 Other taxes payable 3,562 2,275 ------------- ------------- Cash provided by operating activities 3,554,265 1,889,750 ------------- ------------- Cash Flows From Investing Activities: Capital expenditures (1,200,602) (2,895,313) Security deposits (50,531) (13,612) Marketable securities: Receipts from sales or maturities 298,794 51,001 Payments for purchases (473,281) (1,590) ------------- ------------- Cash (used) by investing activities (1,425,620) (2,859,514) ------------- ------------- Cash Flows From Financing Activities: Borrowing - mortgage 1,200,000 2,300,000 Increase - security deposits 48,126 10,165 Payments - mortgages and other debt (788,617) (884,819) Purchase of treasury stock - (213,750) ------------- ------------- Cash provided by financing activities 459,509 1,211,596 ------------- ------------- Increase in cash 2,588,154 241,832 Cash and cash equivalents at beginning of period 1,003,130 1,529,082 ------------- ------------- Cash and cash equivalents at end of period $3,591,284 $1,770,914 ============= ============= See Notes to Consolidated Financial Statements. -5-
J. W. MAYS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1. Accounting Records and Use of Estimates: The accounting records are maintained in accordance with accounting principles generally accepted in the United States of America ('GAAP'). The preparation of the Company's financial statements in accordance with GAAP requires management to make estimates that affect the reported consolidated balance sheets, consolidated statements of income and retained earnings, consolidated statements of comprehensive income, consolidated statement of cash flows and related disclosures. Actual results could differ from those estimates. The interim financial statements are prepared pursuant to the requirements for reporting on Form 10-Q. The July 31, 2001 balance sheet was derived from audited financial statements but does not include all disclosures required by GAAP. The interim financial statements and notes thereto should be read in conjunction with the financial statements and notes included in the Company's latest Form 10-K Annual Report for the year ended July 31, 2001. 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, 2002. 2. Income Per Share of Common Stock: Income per share has been computed by dividing the net income 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 per share were 2,033,280 for the three and nine month periods ended April 30, 2002, and 2,063,280 and 2,071,064 for the three and nine month periods ended April 30, 2001, respectively. 3. Comprehensive Income: SFAS No. 130, 'Reporting Comprehensive Income', establishes standards for the reporting of comprehensive income and its components. It requires all items that are required to be recognized as components of comprehensive income be reported in a financial statement that is displayed with the same prominence as other income statement information. Comprehensive income is defined to include all changes in equity except those resulting from investments by and distributions to shareholders. 4. Marketable Securities: The Company categorizes marketable securities as either trading, available- for-sale or held-to-maturity. Trading securities are carried at fair value with unrealized gains and losses included in income. Available-for-sale securities are carried at fair value with unrealized gains and losses recorded as a separate component of shareholders' equity. Held-to-maturity securities are carried at amortized cost. Dividends and interest income are accrued as earned. -6-
As of April 30, 2002, the Company's marketable securities were classified as follows: Gross Gross Unrealized Unrealized Fair Cost Gains Losses Value ------------- ------------- ------------- ------------- Current: Certificate of deposit $44,522 $ - $ - $44,522 ============= ============= ============= ============= Noncurrent: Available-for-sale: Equity securities $2,919,123 $1,489,253 $ - $4,408,376 ============= ============= ============= ============= Investment income consists of the following: Three Months Ended Nine Months Ended April 30, April 30, -------------- --------------- -------------- --------------- 2002 2001 2002 2001 ------------ ------------- ------------- ------------- Interest income $24,156 $11,018 $83,719 $35,746 Dividend income 51,921 52,057 145,473 148,871 Gain (loss) on sale of securities (51,270) - (67,475) 248 ------------- ------------- ------------- ------------- Total $24,807 $63,075 $161,717 $184,865 ============= ============= ============= =============
5. Financial Instruments and Credit Risk Concentrations: Financial instruments that are potentially subject to concentrations of credit risk consist principally of marketable securities, cash and cash equivalents and receivables. Marketable securities and cash and cash equivalents are placed with high credit quality financial institutions and instruments to minimize risk. The Company derives rental income from thirty-nine tenants, of which one tenant accounted for 15.58% and another tenant accounted for 14.75% of rental income during the nine months ended April 30, 2002. No other tenant accounted for more than 10% of rental income during the same period. -7- 6. Long-Term Debt:
Long Term Debt: April 30, 2002 July 31, 2001 -------------------------------- --------------------------------- Current Annual Final Due Due Due Due Interest Payment Within After Within After Rate Date One Year One Year One Year One Year ------- -------- -------------- -------------- -------------- --------------- Mortgages: Jamaica, New York property (a) 5.00% 4/01/07 $266,667 $2,400,000 $266,667 $2,600,000 Jamaica, New York property (b) 6.98% 8/01/06 142,758 3,277,840 74,623 2,225,377 Jowein building, Brooklyn, N.Y. (c) 9.00% 3/31/05 120,509 275,713 112,727 367,092 Fishkill, New York property (d) 8.25% 7/01/04 103,132 1,988,396 96,965 2,066,535 Circleville, Ohio property (e) 7.00% 9/30/02 179,545 - 417,413 72,445 -------------- -------------- -------------- --------------- -------------- -------------- -------------- --------------- Total $812,611 $7,941,949 $968,395 $7,331,449 ============== ============== ============== ===============
(a) 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, New York property. The interest rate on the loan was 8.50% 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 .25%, fixed for the balance of the term. As of April 1, 2002, the effective rate was reduced to 5.00% per annum. 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. (b) The Company, on December 13, 2000, closed a loan with a bank in the amount of $3,500,000. The loan is secured by a second position leasehold mortgage covering the entire leasehold interest of the Company as tenant in a certain ground lease and building in the Jamaica, New York property. The loan proceeds were utilized by the Company toward its costs of capital improvements of the premises in connection with the Company's lease of a significant portion of a floor in the building to the State of New York. The loan is structured in two phases: 1.) A fifteen-month construction term with interest only on the amount owing at a floating rate per annum equal to the prime rate. 2.) Upon completion of the renovations, the construction loan was converted to a ten (10) year second mortgage permanent loan on a fifteen (15) year level amortization, plus interest. The interest rate on the permanent loan during the first five (5) years is fixed at 6.98% per annum. The interest rate during the five (5) year renewal term is at a fixed rate per annum equal to 2.25% above the five (5) year Treasury Note Rate then in effect of 4.73%. Payments are to be made, in arrears, on the first day of each and every month calculated (a) during the period of the construction loan, interest only, and (b) during the ten (10) year period of the term loan, at the sum of the interest rate plus amortization sufficient to fully liquidate the loan over a fifteen (15) year period. As additional collateral security, the Company will conditionally assign to the bank all leases and rents on the premises, or portions thereof, whether now -8- existing or 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, 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. Both credit facilities are subject to the bank's existing first position mortgage loan on the premises. As of July 31, 2001, the Company had secured advances of $2,300,000 against the principal amount of the loan. On August 2, 2001, the Company took down the balance of the loan of $1,200,000. (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, 2000, the maturity date of the mortgage which was scheduled to be on March 31, 2000 was extended to March 31, 2005. The interest rate remained at 9% per annum. During the extended period the constant quarterly payments of interest and principal increased from $37,263 to $38,044. The mortgage loan is self-amortizing. (d)On June 2, 1999, the existing first mortgage loan balance on the Fishkill property was extended for a period of five years. Under the terms of the extension agreement the annual interest rate was reduced from 9% to 8.25% and the interest and principal payments are 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, are currently in the amount of $36,540. -9- 7. Long-Term Debt - Other: Long-Term debt - Other consists of the following:
April 30, 2002 July 31, 2001 ------------------------------ ------------------------------- Due Due Due Due Within After Within After One Year One Year One Year One Year ------------- ------------- ------------- ------------- Deferred compensation * $ - $ - $43,333 $ - Lease security deposits ** - 412,316 - 364,190 ------------- ------------- ------------- ------------- Total $ - $412,316 $43,333 $364,190 ============= ============= ============= =============
* In fiscal 1964 the Company entered into a deferred compensation agreement with Max L. Shulman, its then Chairman of the Board. The 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 and the monthly payments commenced January, 1997. The final payment was made December 13, 2001. **Does not include three irrevocable letters of credit totaling $319,000 at April 30, 2002 and $291,500 at July 31, 2001, provided by three tenants.
8. Property and Equipment - at cost: April 30, July 31, 2002 2001 --------------- --------------- Property: Buildings and improvements $43,273,893 $42,371,769 Improvements to leased property 9,158,009 9,158,009 Land 4,008,835 4,008,835 Construction in progress 227,857 4,100 ------------- ------------- 56,668,594 55,542,713 Less accumulated depreciation 24,829,417 24,017,931 ------------- ------------- Property - net 31,839,177 31,524,782 ------------- ------------- Fixtures and equipment and other: Fixtures and equipment 640,605 613,460 Other fixed assets 216,702 214,426 ------------- ------------- 857,307 827,886 Less accumulated depreciation 582,766 589,537 ------------- ------------- Fixtures and equipment and other - net 274,541 238,349 ------------- ------------- Property and equipment - net $32,113,718 $31,763,131 ============= ============= -10-
9. Unbilled Receivables and Rental Income: 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. Rental income includes $122,871 and $329,676 for the three and nine months ended April 30, 2002, respectively, and $103,402 and $310,207 for the three and nine months ended April 30, 2001, respectively, representing rentals from an affiliated company. Amounts due from the affiliated company are as follows:
April 30, July 31, 2002 2001 ------------------------------ Unbilled receivables $45,484 $181,937 ============= =============
10 Employees' Retirement Plan: The Company sponsors a noncontributory Money Purchase Plan covering substantially all of its employees. Operations were charged $65,653 and $196,890 as contributions to the Plan for the three and nine months ended April 30, 2002, respectively, and $64,892 and $187,771 as contributions to the plan for the three and nine months ended April 30, 2001, 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, ------------------------------ 2002 2001 ------------------------------ Interest paid, net of capitalized interest of zero for the April 30, 2002 nine month period, and $31,058 for the April 30, 2001 nine month period. $533,583 $425,943 Income taxes paid $497,470 $143,360
12. 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. 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. The Company has realized from Jamesway $513,343, or 54% on account of its unsecured claim, and 100% of its allowed administrative claim of $54,887, for a total of $568,230. The recovery of $47,532 in the year ended July 31, 2001 represents the final recovery from Jamesway. -11- J. W. MAYS, INC. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION Results of Operations: Three Months Ended April 30, 2002 Compared to the Three Months Ended April 30, 2001: In the three months ended April 30, 2002, the Company reported net income of $336,639, or $.17 per share. In the comparable three months ended April 30, 2001, the Company reported net income of $294,107, or $.14 per share. Revenues in the current three months increased to $3,286,240 from $2,855,015 in the comparable 2001 three months. The increase is primarily due to rental income from the leasing of 42,250 square feet to a tenant at the Company's Jamaica, New York property. The lease commenced May 1, 2001. Real estate operating expenses in the current three months decreased to $1,494,739 from $1,501,269 in the comparable 2001 three months primarily due to a decrease in payroll, utilities and fuel costs partially offset by an increase in real estate taxes, insurance, and maintenance costs. Administrative and general expenses in the current three months increased to $633,114 from $566,155 in the comparable 2001 three months due to an increase in medical, legal and professional costs. Depreciation and amortization expense in the current three months increased to $288,405 from $282,777 in the comparable 2001 three months, primarily due to depreciation on the additional improvements to the Jamaica, New York property. Interest expense in the current three months exceeded investment income by $149,343 and by $70,707 in the comparable 2001 three months. The increase was due to interest expense on the additional mortgage on the Jamaica, New York property and the write-down of $49,770 due to the impairment of the Company's investment in Enron Capital Resources Series A preferred stock. Nine Months Ended April 30, 2002 Compared to the Nine Months Ended April 30, 2001: In the nine months ended April 30, 2002, the Company reported net income of $1,069,640, or $.53 per share. In the comparable nine months ended April 30, 2001, the Company reported net income of $741,409, or $.36 per share. Revenues in the current nine months increased to $9,630,917 from $8,403,472 in the comparable 2001 nine months. The increase is primarily due to rental income from the leasing of 42,250 square feet to a tenant at the Company's Jamaica, New York property. The lease commenced May 1, 2001. Real estate operating expenses in the current nine months increased to $4,493,946 from $4,465,851 in the comparable 2001 nine months primarily due to a increase in real estate taxes, insurance and maintenance costs, partially offset by a decrease in payroll, utility and fuel costs. Administrative and general expenses in the current nine months increased to $1,967,319 from $1,779,462 in the comparable 2001 nine months due to an increase in payroll, medical, legal and professional costs. -12- Depreciation and amortization expense in the current nine months increased to $850,015 from $806,331 in the comparable 2001 nine months, primarily due to depreciation on the additional improvements to the Jamaica, New York property. Interest expense in the current nine months exceeded investment income by $373,997 and by $234,951 in the comparable 2001 nine months. The increase was due to interest expense on the additional mortgage on the Jamaica, New York property and the write-down of $49,770 due to the impairment of the Company's investment in Enron Capital Resources Series A preferred stock. The bad debt recovery in the amount $47,532 in the nine months ended April 30, 2001 relates to prior years' bad debt write-off from Jamesway. See Note 12 to the Consolidated Financial Statements. There was no comparable item in the 2002 nine month period. 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. Management considers current working capital and borrowing capabilities adequate to cover the Company's planned operating and capital requirements. The Company's cash and cash equivalents amounted to $3,591,284 at April 30, 2002. The Company's rate of return on investments in preferred and common stock is seven percent annualized, exclusive of the unrealized gains. One tenant occupies the entire Circleville, Ohio property comprising a warehouse distribution building of approximately 193,000 square feet on approximately 11.66 acreage of land. The initial term of the lease terminates September 30, 2002. Negotiations are in progress as the tenant has indicated it wishes to continue to use some of the premises. The tenant's current annual rent to September 30, 2002 is $466,162. The tenant also pays real estate taxes of approximately $45,000 annually plus the cost of utilities. The space not requested for lease by the present tenant will be made available for lease to others. The Company has obtained a judgment at a Trial Court in the New York State Court of Claims in the amount of $4,147,500, plus interest, against the State of New York in connection with a condemnation by the State affecting a portion of the Fishkill, New York property. The State is also required to pay the Company's legal fees. The State appealed the judgment and the trial court granting of legal fees. This award will not be reflected in the Company's Financial Statements unless and until the judgment is affirmed or otherwise modified on appeal by the applicable appellate court(s). The Company secured financing from a bank in the principal amount of $3,500,000 (see Note 6(b) to the Consolidated Financial Statements). As of July 31, 2001, the Company secured advances of $2,300,000 against the principal amount of the loan. On August 2, 2001, the Company took down the balance of the loan of $1,200,000 and immediately converted the loan in the principal amount of $3,500,000 to a ten (10) year second mortgage permanent loan at an interest rate during the first five (5) years at a fixed rate per annum of 6.98% (2.25% above the five (5) year Treasury Note Rate of 4.73%). The Company had leased from an affiliate one of the stores which it closed in connection with its reorganization proceedings in 1982. The Company, by agreement with the affiliate, modified and assigned its lease to a third party. The agreement with the affiliate provides for certain monthly payments to be made to the Company through August 30, 2002, the termination date of the -13- agreement. For the nine months ended April 30, 2002, the Company received $329,676. For the twelve months ending July 31, 2002, the Company anticipates receiving approximately $462,282 During fiscal 2002, the Company leased an additional 15,527 square feet of storage space to an existing tenant in the Company's Brooklyn, New York property. Rent for the additional space commenced in April, 2002. The Company also leased an additional 5,110 square feet of office space to an existing tenant in the Company's Jowein building in Brooklyn, New York. Rent for the additional space is anticipated to commence in June, 2002. Cash Flows From Operating Activities: Receivables: The Company is due the amount of $486,852 as of April 30, 2002 as reimbursement for expenditures for renovations made on behalf of two tenants at the Jamaica, New York building. The amount of $541,483 is to be paid in installments through April, 2004. The original amount of the reimbursement was $1,591,753 of which $1,104,901 has been received. Prepaid Expenses: Cash expenditures for the nine months ended April 30, 2002 increased by $86,842 compared to the nine months ended April 30, 2001, due primarily to an increase in real estate taxes and insurance costs. Cash Flows From Investing Activities: Capital expenditures: The Company had expenditures of $366,255 to renovate 3,922 square feet for an existing tenant at its Jowein building in Brooklyn, New York for the nine months ended April 30, 2002. The total cost of this renovation will be approximately $400,000 and will be reimbursed by the tenant through increased rental income. The renovations were completed in May, 2002. The Company also had expenditures of $227,857 for the nine months ended April 30, 2002 to renovate 5,110 square feet of office space for an existing tenant in the same building. The total cost of this renovation will be approximately $600,000 of which $162,486 will be reimbursed by the tenant. The renovations are anticipated to be completed in June, 2002. Cash Flows From Financing Activities: Borrowing: Mortgage Debt - The Company secured financing from a bank in the principal amount of $3,500,000 (see Note 6 (b) to the Consolidated Financial Statements). On August 2, 2001, the Company took down the balance of the loan of $1,200,000. -14- 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, 2002. -15- 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, 2002 Lloyd J. Shulman -------------------------- Lloyd J. Shulman Chairman Date June 5, 2002 Alex Slobodin -------------------------- Alex Slobodin Exec. Vice-President (Principal Financial Officer) -16- -----END PRIVACY-ENHANCED MESSAGE-----