-----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, Puk4EeAjgJa2qjifVWf5UiPxS/d+feL0YG4noINDCU1yTqmHbaw9+QwSBvNxvS73 dbHRmSxL/Q37rKh6hk0OZQ== 0000054187-04-000005.txt : 20040610 0000054187-04-000005.hdr.sgml : 20040610 20040610085213 ACCESSION NUMBER: 0000054187-04-000005 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20040430 FILED AS OF DATE: 20040610 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: 04857160 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, 2004 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, 2004 [ ] 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 9, 2004 Common Stock, $1 par value 2,015,780 shares This report contains 20 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 - 10 Management's Discussion and Analysis of Results of Operations and Financial Condition 11 - 14 Controls and Procedures 15 Part II - Other Information 16 Signatures 17 (31) Certifications Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (31.1) - Chief Executive Officer 18 (31.2) - Chief Financial Officer 19 (32) Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002; 18 U.S.C. Section 1350 20 -2-
J. W. MAYS, INC. CONSOLIDATED BALANCE SHEET April 30, July 31, ASSETS 2004 2003 --------------------------------------------------------------- --------------- --------------- (Unaudited) (Audited) Property and Equipment - Net (Notes 6 and 7) $38,896,920 $33,482,384 ------------- ------------- Current Assets: Cash and cash equivalents 464,310 1,862,444 Marketable securities (Note 4) 45,326 45,111 Receivables (Note 9) 74,318 433,495 Deferred income taxes 89,000 116,000 Income taxes refundable - 210,382 Prepaid expenses 682,087 1,562,998 Security deposits 259,269 20,836 ------------- ------------- Total current assets 1,614,310 4,251,266 ------------- ------------- Other Assets: Deferred charges 3,112,887 3,018,471 Less accumulated amortization 1,826,278 1,682,714 ------------- ------------- Net 1,286,609 1,335,757 Security deposits 951,954 872,436 Unbilled receivables (Note 9) 4,249,224 4,247,812 Marketable securities (Note 4) 2,512,162 4,155,891 ------------- ------------- Total other assets 8,999,949 10,611,896 ------------- ------------- TOTAL ASSETS $49,511,179 $48,345,546 ============= ============= LIABILITIES AND SHAREHOLDERS' EQUITY --------------------------------------------------------------- Long-Term Debt: Mortgages payable (Note 6) $6,694,702 $5,261,146 Security deposits payable 647,155 568,421 ------------- ------------- Total long-term debt 7,341,857 5,829,567 ------------- ------------- Deferred Income Taxes 3,027,000 3,135,000 ------------- ------------- Current Liabilities: Payable to securities broker (Note 8) 743,281 - Accounts payable 41,760 46,829 Payroll and other accrued liabilities 1,089,789 1,085,981 Income taxes payable 54,279 - Other taxes payable 2,668 4,264 Current portion of mortgages payable (Note 6) 584,442 2,517,725 Current portion of security deposits payable 109,269 20,836 ------------- ------------- Total current liabilities 2,625,488 3,675,635 ------------- ------------- Total liabilities 12,994,345 12,640,202 ------------- ------------- 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 1,122,912 1,014,901 Retained earnings 31,157,232 30,453,753 ------------- ------------- 37,804,686 36,993,196 Less common stock held in treasury, at cost - 162,517 shares at April 30, 2004 and at July 31, 2003 (Note 12) 1,287,852 1,287,852 ------------- ------------- Total shareholders' equity 36,516,834 35,705,344 ------------- ------------- Contingencies (Note 13) TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $49,511,179 $48,345,546 ============= ============= 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, --------------- ---------------- --------------- -------------- 2004 2003 2004 2003 -------------- -------------- -------------- ------------ (Unaudited) (Unaudited) (Unaudited) (Unaudited) Revenues Rental income (Notes 5 and 9) $3,490,161 $3,209,984 $10,255,638 $9,862,241 Rental income - affiliated company (Note 9) - - - 69,629 Loss on sale of fixed assets - - (4,353) - -------------- -------------- -------------- ------------ Total revenues 3,490,161 3,209,984 10,251,285 9,931,870 -------------- -------------- -------------- ------------ Expenses Real estate operating expenses 1,902,440 1,830,098 5,784,737 5,208,676 Administrative and general expenses 661,976 713,102 2,012,262 2,274,218 Bad debt (recovery) - - - (163,009) Depreciation and amortization 343,161 296,788 982,483 886,730 -------------- -------------- -------------- ------------ Total expenses 2,907,577 2,839,988 8,779,482 8,206,615 -------------- -------------- -------------- ------------ Income from operations before investment income, interest expense, other expenses and income taxes 582,584 369,996 1,471,803 1,725,255 -------------- -------------- -------------- ------------ Investment income, interest expense and other expenses: Loss on disposal of asset - (100,172) - (100,172) Investment income (Note 4) 103,742 86,635 234,550 222,069 Interest expense (Notes 6 and 11) (127,006) (134,438) (386,874) (414,523) -------------- -------------- -------------- ------------ (23,264) (147,975) (152,324) (292,626) -------------- -------------- -------------- ------------ Income before income taxes 559,320 222,021 1,319,479 1,432,629 Income taxes provided 285,000 76,000 616,000 619,000 -------------- -------------- -------------- ------------ Net income 274,320 146,021 703,479 813,629 Retained earnings, beginning of period 30,882,912 29,974,330 30,453,753 29,306,722 -------------- -------------- -------------- ------------ Retained earnings, end of period $31,157,232 $30,120,351 $31,157,232 $30,120,351 ============== ============== ============== ============ Income per common share (Note 2) $.14 $.07 $.35 $.40 ============== ============== ============== ============ Dividends per share $- $- $- $- ============== ============== ============== ============ Average common shares outstanding 2,015,780 2,025,022 2,015,780 2,030,588 -------------- -------------- -------------- ------------ See Notes to Consolidated Financial Statements. CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME Three Months Ended Nine Months Ended April 30, April 30, --------------- ---------------- --------------- -------------- 2004 2003 2004 2003 -------------- -------------- -------------- ------------ (Unaudited) (Unaudited) (Unaudited) (Unaudited) Net Income $274,320 $146,021 $703,479 $813,629 -------------- -------------- -------------- ------------ Other comprehensive income, net of taxes (Note 3) Unrealized gain (loss) on available-for-sale securities: Net of taxes (benefit) of $(104,000) and $8,000 for the three months ended April 30, 2004 and 2003, respectively, and $31,000 and $(60,000) for the nine months ended April 30, 2004 and 2003, respectively. (155,051) 15,952 108,011 (115,240) Less reclassification adjustment 76,624 - 94,614 (3,993) -------------- -------------- -------------- ------------ Other comprehensive income (loss) (78,427) 15,952 202,625 (119,233) -------------- -------------- -------------- ------------ Comprehensive Income $195,893 $161,973 $906,104 $694,396 ============== ============== ============== ============ See Notes to Consolidated Financial Statements. -4-
J. W. MAYS, INC. CONSOLIDATED STATEMENT OF CASH FLOWS Nine Months Ended April 30, -------------- --------------- 2004 2003 -------------- --------------- (Unaudited) (Unaudited) Cash Flows From Operating Activities: Net income $703,479 $813,629 Adjustments to reconcile income to net cash provided by operating activities: Realized loss (gain) on marketable securities (94,614) 3,993 (Loss) on sale of fixed assets (4,353) - Depreciation and amortization 982,483 886,730 Amortization of deferred expenses 193,796 371,443 Other assets - deferred expenses (144,648) (102,033) - unbilled receivables (1,412) 28,542 - receivables - 193,444 Deferred income taxes (112,000) (4,000) Changes in: Receivables 359,177 151,146 Prepaid expenses 880,911 695,675 Real estate taxes refundable - 82,769 Income taxes refundable 210,382 (202,813) Accounts payable (5,069) (10,768) Payroll and other accrued liabilities 3,808 (159,568) Income taxes payable 54,279 (747,268) Other taxes payable (1,596) 3,086 ------------- ------------- Cash provided by operating activities 3,024,623 2,004,007 ------------- ------------- Cash Flows From Investing Activities: Capital expenditures (6,392,666) (1,452,509) Security deposits (317,951) (59,331) Marketable securities: Receipts from sales or maturities 1,877,354 268,887 Payments for purchases (215) (72,882) ------------- ------------- Cash (used) by investing activities (4,833,478) (1,315,835) ------------- ------------- Cash Flows From Financing Activities: Borrowings - security broker 2,451,517 - Payments - security broker (1,708,236) - Increase - security deposits 167,167 57,916 Decrease - mortgage and other debt payments (499,727) (549,786) Purchase of treasury stock - (227,500) ------------- ------------- Cash provided (used) by financing activities 410,721 (719,370) ------------- ------------- (Decrease) in cash (1,398,134) (31,198) Cash and cash equivalents at beginning of period 1,862,444 2,951,013 ------------- ------------- Cash and cash equivalents at end of period $464,310 $2,919,815 ============= ============= 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 statements of income and retained earnings, comprehensive income, and the consolidated balance sheets 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, 2003 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 fiscal year ended July 31, 2003. 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 fiscal year ending July 31, 2004. 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 2,015,780 for the three and nine months ended April 30, 2004, and 2,025,022 for the three months and 2,030,588 for the nine months ended April 30, 2003. 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, 2004, the Company's marketable securities were classified as follows: Gross Gross Unrealized Unrealized Fair Cost Gains Losses Value ------------- ------------- ------------- ------------- Current: Held-to-maturity: Certificate of deposit $45,326 $- $- $45,326 ============= ============= ============= ============= Noncurrent: Available-for-sale: Equity securities $810,250 $1,701,912 $- $2,512,162 ============= ============= ============= ============= Investment income consists of the following: Three Months Ended Nine Months Ended April 30, April 30, ------------- ------------- ------------- ------------- 2004 2003 2004 2003 ------------- ------------- ------------- ------------- Interest income $1,811 $34,353 $12,613 $69,817 Dividend income 25,307 52,282 127,323 156,245 Gain (loss) on sale of marketable securities 76,624 - 94,614 (3,993) ------------- ------------- ------------- ------------- Total $103,742 $86,635 $234,550 $222,069 ============= ============= ============= =============
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 forty tenants, of which one tenant accounted for 17.77% and another tenant accounted for 15.01% of rental income during the nine months ended April 30, 2004. No other tenant accounted for more than 10% of rental income during the same period. The Company has three irrevocable Letters of Credit totaling $319,000 at April 30, 2004 and July 31, 2003, provided by three tenants. -7- 6. Long-Term Debt:
Long Term Debt: April 30, 2004 July 31, 2003 -------------------------------- --------------------------------- 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% 4/01/07 $266,667 $1,866,667 $266,666 $2,066,667 Jamaica, New York property (b) 6.98% 8/01/06 164,035 2,961,363 155,110 3,085,296 Jowein building, Brooklyn, N.Y. (c) 9 % 3/31/05 143,987 - 134,689 109,183 Fishkill, New York property (d) Variable 1/01/08 9,753 1,866,672 1,961,260 - -------------- -------------- -------------- --------------- Total $584,442 $6,694,702 $2,517,725 $5,261,146 ============== ============== ============== ===============
(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. As of April 1, 2002, the effective rate was reduced to 5.00% per annum. The outstanding balance of the loan, totaling $1,355,555 will become due and payable on April 1, 2007. (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 42,250 square feet 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. 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 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. On August 2, 2001, the Company took down the balance of the loan of $1,200,000. -8- (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 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, New York 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 to be made in constant monthly amounts based upon a fifteen (15) year payout period. On June 4, 2004 the Company signed a commitment letter with a bank that will extend the loan for an additiona1 forty-one (42) months, with an option to convert the loan to a seven (7) year permanent mortgage loan. The payments for the extended period of forty-one (41) months will be interest only on the amount owing at a floating rate per annum equal to the one-month LIBOR rate plus 2.25%. The payments for the seven-year permanent mortgage loan would be on a seventeen (17) year level amortization, plus interest. The interest rate on the permanent loan would be a fixed rate equal to the Federal Home Loan Bank of New York's seven-year (7) fixed interest rate plus 2.25% per annum. 7. Property and Equipment - at cost:
April 30, July 31, 2004 2003 --------------- --------------- Property: Buildings and improvements $52,650,353 $46,181,865 Improvements to leased property 9,158,009 9,158,009 Land 4,008,835 4,008,835 Construction in progress - 62,436 ------------- ------------- 65,817,197 59,411,145 Less accumulated depreciation 27,173,895 26,240,399 ------------- ------------- Property - net 38,643,302 33,170,746 ------------- ------------- Fixtures and equipment and other: Fixtures and equipment 706,340 694,520 Other fixed assets 212,747 242,538 ------------- ------------- 919,087 937,058 Less accumulated depreciation 665,469 625,420 ------------- ------------- Fixtures and equipment and other - net 253,618 311,638 ------------- ------------- Property and equipment - net $38,896,920 $33,482,384 ============= =============
8. Payable to Securities Broker: The Company borrowed funds, payable on demand, from a securities broker. The loan balance at April 30, 2004 in the amount of $743,281, secured by the Company's marketable securities, accrues interest at a floating rate, which at April 30, 2004, was at the annual rate of 3.375%. -9- 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. The Company had leased from an affiliate one of the stores which was 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 provided for certain monthly payments to be made to the Company through August 30, 2002, the termination date of the agreement. Rental income includes $69,629 for the nine months ended April 30, 2003, representing rental from the affiliated company. There was no rental income from the affiliated company for the nine months ended April 30, 2004. 10. Employees' Retirement Plan: The Company sponsors a noncontributory Money Purchase Plan covering substantially all of its employees. Operations were charged $69,139 and $206,649 as contributions to the Plan for the three and nine months ended April 30, 2004, respectively, and $64,367 and $202,513 as contributions to the Plan for the three and nine months ended April 30, 2003, 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, ------------- ------------- 2004 2003 ------------- ------------- Interest paid $388,874 $417,904 Income taxes paid $463,339 $1,573,081 12. Capitalization: The Company is capitalized entirely through common stock with identical voting rights and rights to liquidation. Treasury stock is recorded at cost and consists of 162,517 shares at April 30, 2004 and at July 31, 2003. 13. 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. -10- J. W. MAYS, INC. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION Results of Operations: Three Months Ended April 30, 2004 Compared to the Three Months Ended April 30, 2003: In the three months ended April 30, 2004, the Company reported net income of $274,320, or $.14 per share. In the comparable three months ended April 30, 2003, the Company reported net income of $146,021, or $.07 per share. Revenues in the current three months increased to $3,490,161 from $3,209,984 in the comparable 2003 three months. The increase in revenue was due primarily to the leasing to two retail tenants at the Company's Jamaica, New York property, and one new tenant at the Brooklyn, New York property. Real estate operating expenses in the current three months increased to $1,902,440 from $1,830,098 in the comparable 2003 three months primarily due to increases in rental expense, real estate taxes, payroll and maintenance costs, partially offset by decreases in insurance and utility costs. Administrative and general expenses in the current three months decreased to $661,976 from $713,102 in the comparable 2003 three months primarily due to decreases in payroll and insurance costs, offset by an increase in legal and professional costs. Depreciation and amortization expense in the current three months increased to $343,161 from $296,788 in the comparable 2003 three months primarily due to depreciation on the additional improvements to the Brooklyn, New York and the Jamaica, New York properties. Interest expense and other expenses in the current three months exceeded investment income by $23,264 and by $147,975 in the comparable 2003 three months. The decrease was due primarily to scheduled repayments of debt, the gain on sales of the Company's marketable securities and the loss on disposition of asset on a portion of the Company's Fishkill, New York property which was recorded in the comparable 2003 three months. Nine Months Ended April 30, 2004 Compared to the Nine Months Ended April 30, 2003: In the nine months ended April 30, 2004, the Company reported net income of $703,479, or $.35 per share. In the comparable nine months ended April 30, 2003, the Company reported net income of $813,629, or $.40 per share. Revenues in the current nine months increased to $10,251,285 from $9,931,870 in the comparable 2003 nine months. The increase in revenue was due primarily to the leasing to two retail tenants at the Company's Jamaica, New York property, and one new tenant at the Brooklyn, New York property. Real estate operating expenses in the current nine months increased to $5,784,737 from $5,208,676 in the comparable 2003 nine months primarily due to increases in rental expense, real estate taxes, payroll, maintenance and utility costs, partially offset by a decrease in insurance costs. Administrative and general expenses in the current nine months decreased to $2,012,262 from $2,274,218 in the comparable 2003 nine months due to decreases in payroll, insurance, and legal and professional costs. Depreciation and amortization expense in the current nine months increased to $982,483 from $886,730 in the comparable 2003 nine months primarily due to depreciation on the additional improvements to the Brooklyn, New York and the Jamaica, New York properties. Interest expense and other expenses in the current nine months exceeded investment income by $152,324 and by $292,626 in the comparable 2003 nine months. The decrease was due primarily to scheduled repayments of debt, the gain on sales of the Company's marketable securities and the loss on disposition of asset on a portion of the Company's Fishkill, New York property which was recorded in the comparable 2003 nine months. -11- The bad debt recovery in the amount of $163,009 in the nine months ended April 30, 2003 relates to a prior year's bad debt write-off of one of the retail tenants at the Jamaica, New York property. 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 $464,310 at April 30, 2004. The current working capital deficit of approximately $1,000,000 was caused by the Company's outlay of cash for renovations made on behalf of tenants in the Company's premises. The loan commitment discussed below, along with the increased rentals from the additional tenants should resolve the deficit in current working capital. The City of New York, a tenant in the Company's Jowein building in Brooklyn, New York, whose lease expires April 29, 2010, has elected to exercise its option to terminate the Lease Agreement effective May 31, 2004. The loss in annual revenue to the Company commencing June 1, 2004, relating to the termination of the lease, will approximate $2,440,000. Upon the termination of the lease agreement, the Company will be due $295,695 from the City of New York representing the unamortized portion of the Company's work cost to prepare the leased premises for occupancy. The Company is actively seeking, through brokers, tenants to occupy the space to be vacated as well as the additional 87,000 square feet of available space in the building. The Company leased 47,615 square feet for office use to two tenants in the Company's Brooklyn, New York property. One tenant leased 25,423 square feet and its rent commenced April, 2004. The second tenant leased 22,192 square feet and its rent commenced June, 2004. The Company also leased 8,300 square feet for office use to two tenants in the Company's Jowein building in Brooklyn, New York. Rent commenced in December, 2003 for one tenant, and in May, 2004 for the other tenant. To replace the retail store which vacated the Jamaica, New York property in March, 2003, the Company divided the premises into three retail stores. As of April 30, 2004, the Company has leased 54,289 square feet to two tenants. Rent commenced in September, 2003. The first mortgage loan balance on the Fishkill, New York property matures on July 1, 2004, with a balloon payment due of $1,856,852. The Company has signed a commitment letter with the bank to extend this mortgage (See Note 6(d) to the Consolidated Financial Statements). The Company, on June 4, 2004, signed a commitment letter with a bank for a $12,000,000 multiple draw term loan. This loan will finance seventy-five (75%) percent of the cost of capital improvements for an existing lease to a tenant and capital improvements to future tenant leases at the Company's Brooklyn, New York (9 Bond Street) and Fishkill, New York properties. The loan will also refinance the existing mortgage on the Company's Fishkill, New York property which will mature on July 1, 2004 (see Note 6(d) to the Consolidated Financial Statements). The Company will have three and one half years to draw down amounts under this loan. The loan will consist of: a) a permanent, first mortgage loan to refinance an existing first mortgage loan affecting the Fishkill Property (the "First Permanent Loan") (see Note 6(d) to the Consolidated Financial Statements), b) a permanent subordinate mortgage loan in the amount of $1,870,000 (the "Second Permanent Loan"), and c) multiple, successively subordinate building loans in the amount of $8,253,575 ("Subordinate Building Loan"). The loan is structured in two phases: 1) a forty-two month loan with payments of interest only at the floating one month LIBOR rate plus 2.25% per annum, but not less than 3.40%; and 2) after the forty-two month period, the loan would convert to a seven-year (7) mortgage permanent loan on a seventeen (17) year level amortization, plus interest, at the option of the Company. The interest rate on the permanent loan would be at a fixed rate equal to the Federal Home Loan Bank of New York's seven-year (7) fixed interest rate plus 2.25% per annum. -12- The Company on May 7, 2004, purchased a one half interest in a parcel which is part of one of its Brooklyn, New York properties. The parcel was leased to the Company. The purchase price was $1,500,000. The Company financed $1,350,000 of the purchase price from an affiliated company. The term of the loan is for a period of five (5) years at an interest rate of 9%. Interest and amortization will be based on a fifteen (15) year level amortization period. The Company has decided to liquidate its portfolio of preferred securities in order to fund tenant improvements. Cash Flows From Operating Activities: Receivables: The Company received $193,444 in the nine months ended April 30, 2004 as reimbursement for expenditures for renovations made on behalf of a tenant at the Jamaica, New York property. The original amount of the reimbursement was $1,591,753. As of April 30, 2004, the total amount has been received. Prepaid Expenses: Expenditures for the nine months ended April 30, 2004 increased by $27,673 compared to the period ended April 30, 2003, due to increases in real estate taxes offset by a decrease in insurance premiums paid. Security Deposits: The Company made an expenditure of $150,000 for a deposit on the purchase of a one-half interest in a parcel which is part of one of its Brooklyn, New York properties as of April 30, 2004. The one-half interest on the parcel was aquired on May 7, 2004 at a total purchase price of $1,500,000. Other Assets: Security Deposits - The Company increased tenant security deposits by $179,364, due to the leasing of office space to two tenants at one of the Company's Brooklyn, New York properties. Deferred Expenses: The Company had an expenditure for a brokerage commission in the amount of $71,665 relating to a tenant at one of the Brooklyn, New York properties. Payroll and other accrued liabilities: The Company paid $170,250 for commissions incurred in order to lease space at the Company's properties in the nine months ended April 30, 2004. The original amount of the brokerage commissions was $481,294. As of April 30, 2004, $222,784 has been paid. There are also amounts due outside contractors totaling $144,572 for construction work completed at one of the Brooklyn, New York properties. Cash Flows From Investing Activities: Capital expenditures: The Company had expenditures of $218,904 for the nine months ended April 30, 2004 for the renovation of a portion of the exterior of one of its Brooklyn, New York properties. The total cost was $253,185. The project was completed in April, 2004. The Company had expenditures of $370,369 for the nine months ended April 30, 2004 for the dividing of space into three separate stores, which was formerly occupied by one department store that vacated the premises in March, 2003, at its Jamaica, New York property. The total cost of the project was $883,518. The project was completed in October, 2003. The Company had expenditures of $935,800 for the nine months ended April 30, 2004 for the renovation of 8,300 square feet for office space for two tenants at its Jowein building in Brooklyn, New York. The total cost of the project was $961,655. The project was completed in October, 2003. -13- The Company had expenditures of $2,485,288 for the nine months ended April 30, 2004 for the renovation of 22,192 square feet for office space for a tenant at one of its Brooklyn, New York properties. The total cost of the project was $2,485,288. The project was completed in January, 2004. The Company also had expenditures of $2,006,197 for the nine months ended April 30, 2004 for the renovation of 25,423 square feet for office space for a tenant at one of its Brooklyn, New York properties. The total cost of the project was $2,006,197. The project was completed in March, 2004. Cash Flows From Financing Activities: Borrowing: Payable to securities broker - The Company borrowed $743,281 payable on demand from a securities broker. (See Note 8 to the Consolidated Financial Statements). Lease security: The Company increased tenant security deposits by $179,364 due to the leasing of office space to two tenants at one of the Company's Brooklyn, New York properties. Quantitative and Qualitative Disclosures About Market Risks: The Company primarily uses fixed-rate debt to finance its capital requirements. These transactions do not expose the Company to market risk related to changes in interest rates. The Company does not use derivative financial instruments. At April 30, 2004, the Company had fixed-rate debt of $7,279,144. Because of the extension of the Fishkill, New York property loan, (presently with a balance of $1,876,425), if interest rates were to increase 100 basis points, the effect to net income from operations and future cash flows would be a decrease of $18,764 and if it were to decrease 100 basis points, the effect would be an increase of $18,764 for this loan. In connection with the loan payable to securities broker in the amount of $743,281, if interest rates were to increase 100 basis points, the effect to net income from operations and future cash flows would be a decrease of $7,433 and if it were to decrease 100 basis points, the effect would be an increase of $7,433 for this loan. Cautionary Statement Regarding Forward-Looking Statements: This Quarterly Report on Form 10-Q may contain forward-looking statements which include assumptions about future market conditions, operations and financial results. These statements are based on current expectations and are subject to risks and uncertainties. They are made pursuant to safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The Company's actual results, performance or achievements in the future could differ significantly from the results, performance or achievements discussed or implied in such forward-looking statements herein and in prior Securities and Exchange Commission filings by the Company. The Company assumes no obligation to update these forward-looking statements or to advise of changes in the assumptions on which they were based. Factors that could cause or contribute to such differences include, but are not limited to, changes in the competitive environment of the Company, general economic and business conditions, industry trends, changes in government rules and regulations and environmental rules and regulations. Statements concerning interest rates and other financial instrument fair values and their estimated contribution to the Company's future results of operations are based upon market information as of a specific date. This market information is often a function of significant judgment and estimation. Further, market interest rates are subject to significant volatility. -14- Controls and Procedures: The Company's management reviewed the Company's internal controls and procedures and the effectiveness of these controls. As of April 30, 2004, the Company carried out an evaluation, under the supervision and with the participation of the Company's management, including its Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Company's disclosure controls and procedures pursuant to Rules 13a-14(c) and 15d-14(c) of the Securities Exchange Act of 1934. Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the Company's disclosure controls and procedures are effective in timely alerting them to material information relating to the Company required to be included in its periodic SEC filings. There was no change in the Company's internal controls over financial reporting or in other factors during the Company's last fiscal quarter that materially affected, or are reasonably likely to materially affect, the Company's internal controls over financial reporting. There were no significant deficiencies or material weaknesses, and therefore there were no corrective actions taken. -15- 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 (31) Additional exhibits--Certifications Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. (31.1) Chief Executive Officer 17 (31.2) Chief Financial Officer 18 (32) Certification Pursuant to Section 906 of the Sarbanes- Oxley Act of 2002, 18 U.S.C. Section. 1350. 19 (b) Reports on Form 8-K - A report on Form 8-K was filed by the registrant during the three months ended April 30, 2004. Item reported - The Company reported its financial results for the three months ended January 31, 2004. Date of report filed - March 12, 2004. -16- 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 9, 2004 Lloyd J. Shulman ------------------ -------------------------- Lloyd J. Shulman President Chief Executive Officer Date June 9, 2004 Mark S. Greenblatt ------------------ -------------------------- Mark S. Greenblatt Vice President Chief Financial Officer -17- EXHIBIT 31.1 CERTIFICATION I, Lloyd J. Shulman, certify that: 1. I have reviewed this Quarterly Report on Form 10-Q of J.W. Mays, Inc.; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have: (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; (b) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and (c) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: June 9, 2004 /s/ Lloyd J. Shulman --------------------------- Lloyd J. Shulman President Chief Executive Officer -18- EXHIBIT 31.2 CERTIFICATION I, Mark S. Greenblatt, certify that: 1. I have reviewed this Quarterly Report on Form 10-Q of J.W. Mays, Inc.; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have: (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; (b) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and (c) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: June 9, 2004 /s/ Mark S. Greenblatt --------------------------- Mark S. Greenblatt Vice President Chief Financial Officer -19- EXHIBIT 32 CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 The following certification is being furnished solely to accompany the Report pursuant to 18 U.S.C. Section 1350 and in accordance with SEC Release No. 33- 8238. This certification shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall it be incorporated by reference in any filing of the Company under the Securities Act of 1933, as amended, whether made before or after the date hereof, regardless of any general incorporation language in such filing. In connection with the Quarterly Report of J. W. Mays, Inc. (the "Company") on Form 10-Q for the period ending April 30, 2004 as filed with the Securities and Exchange Commission (the "Report"), we, Lloyd J. Shulman and Mark S. Greenblatt, Chief Executive Officer and Chief Financial Officer, respectively, of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to our knowledge: (1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and (2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. June 9, 2004 /s/ Lloyd J. Shulman --------------------------- Lloyd J. Shulman Chief Executive Officer /s/ Mark S. Greenblatt --------------------------- Mark S. Greenblatt Chief Financial Officer A signed original of this written statement required by Section 906 has been provided to J.W. Mays, Inc. and will be retained by J. W. Mays, Inc. and furnished to the Securities and Exchange Commission or its staff upon request. -20- -----END PRIVACY-ENHANCED MESSAGE-----