-----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, SHeOW8nEv4LUwbTEDkcTT44VfO50tyfOzQyAnOkasJSlUdnav+OT29HlJUetkJkl fMgynOdmJf6mQPs4kfoSqg== /in/edgar/work/0000950110-00-001119/0000950110-00-001119.txt : 20001023 0000950110-00-001119.hdr.sgml : 20001023 ACCESSION NUMBER: 0000950110-00-001119 CONFORMED SUBMISSION TYPE: 10-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20000731 FILED AS OF DATE: 20001020 FILER: COMPANY DATA: COMPANY CONFORMED NAME: MAYS J W INC CENTRAL INDEX KEY: 0000054187 STANDARD INDUSTRIAL CLASSIFICATION: [6512 ] IRS NUMBER: 111059070 STATE OF INCORPORATION: NY FISCAL YEAR END: 0731 FILING VALUES: FORM TYPE: 10-K SEC ACT: SEC FILE NUMBER: 001-03647 FILM NUMBER: 743051 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-K 1 0001.txt FORM 10-K ================================================================================ SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K /X/ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED: JULY 31, 2000 OR / / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO COMMISSION FILE NUMBER: 1-3647 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 IDENTIFICATION NO.) INCORPORATION OR ORGANIZATION) 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 Securities registered pursuant to Section 12(b) of the Act: TITLE OF EACH CLASS NAME OF EACH EXCHANGE ON WHICH REGISTERED None None Securities registered pursuant to Section 12(g) of the Act: Common Stock, par value $1 per share (TITLE OF CLASS) 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. . --- --- INDICATE BY CHECK MARK IF DISCLOSURE OF DELINQUENT FILERS PURSUANT TO ITEM 405 OF REGULATION S-K IS NOT CONTAINED HEREIN, AND WILL NOT BE CONTAINED, TO THE BEST OF REGISTRANT'S KNOWLEDGE, IN DEFINITIVE PROXY OR INFORMATION STATEMENTS INCORPORATED BY REFERENCE IN PART III OF THIS FORM 10-K OR ANY AMENDMENT TO THIS FORM 10-K. /x/ NO DELINQUENT FILERS. THE AGGREGATE MARKET VALUE OF VOTING STOCK HELD BY NONAFFILIATES OF THE REGISTRANT WAS APPROXIMATELY $6,045,800 AS OF SEPTEMBER 22, 2000 BASED ON THE AVERAGE OF THE BID AND ASKED PRICE OF THE STOCK REPORTED FOR SUCH DATE. FOR THE PURPOSE OF THE FOREGOING CALCULATION, THE SHARES OF COMMON STOCK HELD BY EACH OFFICER AND DIRECTOR AND BY EACH PERSON WHO OWNS 5% OR MORE OF THE OUTSTANDING COMMON STOCK HAVE BEEN EXCLUDED IN THAT SUCH PERSONS MAY BE DEEMED TO BE AFFILIATES. THIS DETERMINATION OF AFFILIATE STATUS IS NOT NECESSARILY A CONCLUSIVE DETERMINATION FOR OTHER PURPOSES. The number of shares outstanding of the registrant's common stock as of September 22, 2000 was 2,088,280. DOCUMENTS INCORPORATED BY REFERENCE PART OF FORM 10-K IN WHICH THE DOCUMENT DOCUMENT IS INCORPORATED -------- --------------------- Annual Report to Shareholders for Fiscal Year Ended July 31, 2000 Parts I and II Definitive Proxy Statement for the 2000 Annual Meeting of Shareholders Part III ================================================================================ J. W. MAYS, INC. FORM 10-K FOR THE FISCAL YEAR ENDED JULY 31, 2000 TABLE OF CONTENTS PART I PAGE ---- Item 1. Business .................................................. 3 Item 2. Properties ................................................ 3 Item 3. Legal Proceedings ......................................... 7 Item 4. Submission of Matters to a Vote of Security Holders ........................................ 7 Executive Officers of the Registrant ............................... 8 PART II Item 5. Market for Registrant's Common Stock and Related Shareholder Matters ......................... 8 Item 6. Selected Financial Data ................................... 8 Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations .............................................. 8 Item 8. Financial Statements and Supplementary Data ............... 8 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure .............................................. 9 PART III Item 10. Directors and Executive Officers of the Registrant ............................................. 9 Item 11. Executive Compensation ................................... 9 Item 12. Security Ownership of Certain Beneficial Owners and Management .................................. 9 Item 13. Certain Relationships and Related Transactions ........... 9 PART IV Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K .................................... 9 2 PART I ITEM 1. BUSINESS. J. W. Mays, Inc. (the "Company" or "Registrant ") with executive offices at 9 Bond Street, Brooklyn, New York 11201, operates a number of commercial real estate properties, which are described in Item 2 "Properties". The Company's business was founded in 1924 and incorporated under the laws of the State of New York on July 6, 1927. The Company discontinued its department store business which operated under the name of "MAYS," in the year ended July 31, 1989, and has continued the leasing of real estate. The Company has no foreign operations. The Company employs approximately 29 employees and has a contract with a union covering rates of pay, hours of employment and other conditions of employment for approximately 21% of its employees. The Company considers that its labor relations with its employees and union are good. ITEM 2. PROPERTIES. The table below sets forth certain information as to each of the properties currently operated by the Company: APPROXIMATE LOCATION SQUARE FEET -------- ----------- 1. Brooklyn, New York Fulton Street at Bond Street ............................ 380,000 2. Brooklyn, New York Jowein building Fulton Street and Elm Place ............................. 430,000 3. Jamaica, New York Jamaica Avenue at 169th Street .......................... 297,000 4. Fishkill, New York Route 9 at Interstate Highway 84 ........................ 211,000 (located on 14.9 acres) 5. Levittown, New York Hempstead Turnpike ...................................... 85,800 6. Massapequa, New York Sunrise Highway ......................................... 133,400 7. Circleville, Ohio Tarlton Road ............................................ 193,350 (located on 11.6 acres) 8. Brooklyn, New York Truck bays, passage facilities and tunnel--Schermehorn Street ........................ 17,000 Building--Livingston Street ............................. 10,500 Properties leased are under long-term leases for varying periods, the longest of which extends to 2073, and in most instances renewal options are included. Reference is made to Note 6 to the Consolidated Financial Statements contained in the 2000 Annual Report to Shareholders, incorporated herein by reference. The properties owned which are held subject to mortgage are the Jowein building, Jamaica building, Fishkill property, Ohio property and a small portion of the Company's former Brooklyn store. 3 1. Brooklyn, New York--Fulton Street at Bond Street 15% of the premises is leased by the Company under eight separate leases. Expiration dates are as follows: 1/31/2001 (2 leases); 4/30/2011 (4 leases); 6/30/2011 (1 lease); and 12/8/2013 (1 lease). One lease which expires 1/31/2001 has a 10 year option and the lease which expires 12/8/2013 has two thirty year options through 12/8/2073. A new lobby entrance in the 9-17 Bond Street building was completed in fiscal 2000. There are no present plans for additional improvement of this property. The property is currently leased to eight tenants of which six are retail tenants and two occupy office space. One tenant occupies in excess of 10% of the rentable square footage (26.11%). This tenant subleases to a flea market, department store, shoe store and various other retail shops. The lease expires April 30, 2011 with no renewal options. OCCUPANCY LEASE EXPIRATION - ------------------------ --------------------------------------- YEAR YEAR NUMBER OF AREA ENDED RATE ENDED LEASES SQ. FT. ----- ---- ----- ------ ------- 7/31/96 28.77% 7/31/2001 1 1,558 7/31/97 28.77% 7/31/2003 1 63 7/31/98 28.77% 7/31/2004 1 1,140 7/31/99 31.57% 7/31/2005 1 2,140 7/31/00 31.57% 7/31/2006 1 2,160 7/31/2009 1 3,080 7/31/2011 2 109,819 - ------- 8 119,960 - ------- The federal tax basis is $9,495,469 with accumulated depreciation of $4,922,966 for a net carrying value of $4,572,503 as of July 31, 2000. The life taken for depreciation varies between 18-40 years and the methods used are the straight-line and the declining balance. The real estate taxes for this property are $696,298 and the rate used is averaged at $9.989 per $100 of assessed valuation. 2. Brooklyn, New York--Jowein building, Fulton St. & Elm Place Approximately 50% of the premises is owned and 50% is leased. The lease is with one landlord and expires April 30, 2010. There are no renewal options. There are no present plans for additional improvement of this property. Approximately 280,000 square feet of the property is currently leased to twelve tenants of which six are retail stores, three are fast food restaurants and three leases are for office space. One tenant is a New York City agency which occupies in excess of 10% of the rentable square footage (31.19%). The lease expires April 29, 2010 with no renewal options. Approximately 110,000 square feet of the building is available for lease. OCCUPANCY LEASE EXPIRATION - --------------------------- ---------------------------------------- YEAR YEAR NUMBER OF AREA ENDED RATE ENDED LEASES SQ. FT. ----- ---- ----- ------ ------- 7/31/96 63.67% 7/31/2001 1 8,000 7/31/97 65.19% 7/31/2004 1 23,603 7/31/98 65.19% 7/31/2007 1 5,500 7/31/99 65.19% 7/31/2010 9 243,307 7/31/00 65.21% -- ------- 12 280,410 -- ------- The federal tax basis is $10,184,811 with accumulated depreciation of $5,635,695 for a net carrying value of $4,549,116 as of July 31, 2000. The life taken for depreciation varies between 18-40 years and the methods used are the straight-line and the declining balance. The real estate taxes for this property are $857,333 and the rate used is averaged at $9.989 per $100 of assessed valuation. 4 3. Jamaica, New York--Jamaica Avenue at 169th Street The building is owned and the fee is leased from an affiliated company. The lease expires July 31, 2027. Approximately 11,200 square feet was renovated by August 31, 2000 for office space for an existing tenant on the second floor. Occupancy commenced September 1, 2000. There are present plans for the improvement of 42,250 square feet on the third floor for office space for a prospective tenant. The property is currently leased to nine tenants: five are retail tenants and four leases are for office space. Two tenants occupy in excess of 10% of the rentable square footage. One of the tenants is a department store that occupies 27.50% of the rentable space with a lease that expires August 31, 2005 and has one five year renewal option. The other tenant is a major retail toy store which occupies 15.95% of the rentable space. The lease expires January 31, 2006 with six renewal options of five years each, and 2,700 square feet to another tenant for retail space. Approximately 25,000 square feet of the building are available for lease. OCCUPANCY LEASE EXPIRATION - ------------------------- --------------------------------------- YEAR YEAR NUMBER OF AREA ENDED RATE ENDED LEASES SQ. FT. ----- ---- ----- ------ ------- 7/31/96 44.72% 7/31/2002 1 2,680 7/31/97 59.59% 7/31/2006 2 128,342 7/31/98 62.34% 7/31/2007 4 46,107 7/31/99 62.34% 7/31/2008 2 8,021 7/31/00 62.34% - ------- 9 185,150 - ------- The federal tax basis is $12,864,270 with accumulated depreciation of $5,775,200 for a net carrying value of $7,089,070 as of July 31, 2000. The life taken for depreciation varies between 18-40 years and the methods used are the straight-line and the declining balance. The real estate taxes for this property are $267,651 and the rate used is averaged at $9.989 per $100 of assessed valuation. 4. Fishkill, New York--Route 9 at Interstate Highway 84 The Company owns the entire premises. The completion of the replacement of heating, ventilating and air conditioning units is the only present plan for the additional improvement of this property. Approximately 26,000 square feet are leased to one tenant for office space and 186,000 square feet of the building are available for lease. OCCUPANCY LEASE EXPIRATION -------------------------- ------------------------------------------ YEAR YEAR NUMBER OF AREA ENDED RATE ENDED LEASES SQ. FT. ----- ---- ----- ------ ------- 7/31/96 55.03% 7/31/2006 1 25,915 7/31/97 12.28% 7/31/98 12.28% 7/31/99 12.28% 7/31/00 12.28% The federal tax basis is $9,280,746 with accumulated depreciation of $5,581,170 for a net carrying value of $3,699,576 as of July 31, 2000. The life taken for depreciation varies between 18-40 years and the methods used are the straight-line and the declining balance. The real estate taxes for this property are $136,277 and the rate used is averaged at $3.68 per $100 of assessed valuation. 5 5. Levittown, New York--Hempstead Turnpike The Company owns the entire premises. There are no present plans for additional improvement of this property. The property is currently leased to one tenant that operates the premises as a game room and fast food restaurant. The lease expires September 30, 2004 with one five year renewal option. OCCUPANCY LEASE EXPIRATION - ------------------------ ---------------------------------------- YEAR YEAR NUMBER OF AREA ENDED RATE ENDED LEASES SQ. FT. ----- ---- ----- ------ ------- 7/31/96 100% 7/31/2005 Building 15,243 7/31/97 100% Land 70,557 7/31/98 100% ------ 7/31/99 100% 1 85,800 7/31/00 100% ------ The federal tax basis is $273,550 with accumulated depreciation of $266,867 for a net carrying value of $6,683 as of July 31, 2000. The life taken for depreciation varies between 18-40 years and the methods used are the straight-line and the declining balance. The real estate taxes for this property are $106,304 and the rate used is averaged at $101.62 per $100 of assessed valuation. 6. Massapequa, New York--Sunrise Highway The Company leases the entire premises under one lease. The lease expires May 14, 2009. There are no renewal options. There are no present plans for additional improvement of this property. The property is currently sub-leased to two tenants; one, a gasoline service station and the other, a bank. Each of these tenants occupies in excess of 10% of the rentable square footage. The gasoline service station lease expires April 29, 2009 with no renewal options. The sub-lease to the bank expires May 14, 2009 with no renewal options. OCCUPANCY LEASE EXPIRATION - ------------------------ ----------------------------------------- YEAR YEAR NUMBER OF AREA ENDED RATE ENDED LEASES SQ. FT. - ------ ---- ----- ------ ------- 7/31/96 100% 7/31/2009 2 133,400 7/31/97 100% 7/31/98 100% 7/31/99 100% 7/31/00 100% The real estate taxes for this property are $288,355 and the rate used is averaged at $90.89 per $100 of assessed valuation. The Company does not own this property. Improvements to the property are made by the tenants. 6 7. Circleville, Ohio--Tarlton Road The Company owns the entire premises. There are no present plans for additional improvement of this property. The entire property is currently leased to one tenant. The tenant is a manufacturer and uses these premises as a warehouse and distribution facility. The lease expires September 30, 2002. There are three five year renewal options. OCCUPANCY LEASE EXPIRATION - -------------------------- ----------------------------------------- YEAR YEAR NUMBER OF AREA ENDED RATE ENDED LEASES SQ. FT. ----- ---- ----- ------ ------- 7/31/96 100% 7/31/2003 1 193,350 7/31/97 100% 7/31/98 100% 7/31/99 100% 7/31/00 100% The federal tax basis is $4,388,456 with accumulated depreciation of $1,062,285 for a net carrying value of $3,326,171 as of July 31, 2000. The life taken for depreciation varies between 18-40 years and the methods used are the straight-line and the declining balance. The real estate taxes for this property are $308,504 and the rate used is averaged at $49.30 per $1,000 of assessed valuation. 8. Brooklyn, New York--Livingston Street The City of New York through its Economic Development Administration constructed a municipal garage at Livingston Street opposite the Company's Brooklyn properties. The Company has a long-term lease with the City of New York expiring in 2013 with renewal options, the last of which expires 2073, under which: (1) Such garage, available to the public, provides truck bays and passage facilities through a tunnel, both for the exclusive use of the Company, to the structure referred to in (2) below. The truck bays, passage facilities and tunnel, totaling approximately 17,000 square feet, are included in the lease from the City of New York referred to in the preceding paragraph, and are in full use. (2) The Company constructed a building of six stories and basement on a 20 x 75-foot plot (acquired and made available by the City of New York and leased to the Company for a term expiring in 2013 with renewal options, the last of which expires in 2073). The plot is adjacent to and connected with the Company's Brooklyn properties, which provides the other end of the tunnel with the truck bays in the municipal garage. In the opinion of management, all of the Company's properties are adequately covered by insurance. See Note 11 to the Consolidated Financial Statements of the 2000 Annual Report to Shareholders, which information is incorporated herein by reference, for information concerning the tenant, the rental income from which equals 10% or more of the Company's rental income. ITEM 3. LEGAL PROCEEDINGS. 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. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. During the fourth quarter of the fiscal year covered by this report, no matter was submitted to a vote of security holders of the Company. 7 EXECUTIVE OFFICERS OF THE REGISTRANT The following information is furnished with respect to each Executive Officer of the Registrant (each of whom is elected annually) whose present term of office will expire upon the election and qualification of his successor:
FIRST BECAME BUSINESS EXPERIENCE DURING SUCH OFFICER NAME AGE THE PAST FIVE YEARS OR DIRECTOR ---- --- ------------------- ----------- All of the above mentioned officers have been appointed as such by the directors and, except for Mr. Greenblatt, have been employed as Executive Officers of the Company during the past five years. PART II ITEM 5. MARKET FOR REGISTRANT'S COMMON STOCK AND RELATED SHAREHOLDER MATTERS. The information appearing under the heading "Common Stock and Dividend Information" on page 19 of the Registrant's 2000 Annual Report to Shareholders is incorporated herein by reference. ITEM 6. SELECTED FINANCIAL DATA. The information appearing under the heading "Summary of Selected Financial Data" on page 2 of the Registrant's 2000 Annual Report to Shareholders is incorporated herein by reference. ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. The information appearing under the heading "Management's Discussion and Analysis of Financial Condition and Results of Operations" on pages 17 and 18 of the Registrant's 2000 Annual Report to Shareholders is incorporated herein by reference. ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA. The Registrant's Consolidated Financial Statements, together with the report of D'Arcangelo & Co., LLP, Independent Auditors, dated October 12, 2000, appearing on pages 4 through 15 of the Registrant's 2000 Annual Report to Shareholders is incorporated herein by reference. With the exception of the aforementioned information and the information incorporated by reference in Items 2, 5, 6, 7 and 8 hereof, the 2000 Annual Report to Shareholders is not to be deemed filed as part of this Form 10-K Annual Report. 8 ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE. Response to that part of this item relating to Disagreements with Accountants and Financial Disclosures--None. PART III ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT. The information relating to directors of the Registrant is contained in the Definitive Proxy Statement for the 2000 Annual Meeting of Shareholders and such information is incorporated herein by reference. The information with respect to Executive Officers of the Registrant is set forth in Part I hereof. ITEM 11. EXECUTIVE COMPENSATION. The information required by this item appears under the heading "Executive Compensation" in the Definitive Proxy Statement for the 2000 Annual Meeting of Shareholders and such information is incorporated herein by reference. ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT. The information required by this item appears under the headings "Security Ownership of Certain Beneficial Owners and Management" and "Information Concerning Nominees for Election as Directors" in the Definitive Proxy Statement for the 2000 Annual Meeting of Shareholders and such information is incorporated herein by reference. ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS. The information required by this item appears under the headings "Executive Compensation" and "Certain Relationships and Related Transactions" in the Definitive Proxy Statement for the 2000 Annual Meeting of Shareholders and such information is incorporated herein by reference. PART IV ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K. (a) The following documents are filed as part of this report: 1. The Consolidated Financial Statements and report of D'Arcangelo & Co., LLP, Independent Auditors, dated October 12, 2000, set forth on pages 4 through 15 of the Registrant's 2000 Annual Report to Shareholders. 2. See accompanying Index to Registrant's Financial Statements and Schedules. 9 3. Exhibits: (2) Plan of acquisition, reorganization, arrangement, liquidation or succession--not applicable. (3) Articles of incorporation and by-laws: (i) Certificate of Incorporation, as amended, incorporated by reference to Registrant's Form 8-K dated December 3, 1973. (ii) By-laws, as amended June 1, 1995, incorporated by reference to Registrant's Form 10-K dated October 23, 1995. (iii) Amendment to By-laws, effective November 1, 1999. (4) Instruments defining the rights of security holders, including indentures--see Exhibit (3) above. (9) Voting trust agreement--not applicable. (10) Material contracts: (i) Agreement of Lease dated March 29, 1990 pursuant to which the basement and a portion of the street floor, approximately 32% of the total area of the Registrant's former Jamaica store, has been leased to a tenant for retail space, incorporated by reference to Registrant's Form 10-K dated October 29, 1990. (ii) Agreement of Lease dated July 5, 1990, as amended February 25, 1992, pursuant to which a portion of the street floor and basement, approximately 35% of the total area of the Registrant's former Brooklyn store, has been leased to a tenant for the retail sale of general merchandise and for a restaurant, incorporated by reference to Registrant's Form 10-K dated October 29, 1990. (iii) The J. W. Mays, Inc. Retirement Plan and Trust, Summary Plan Description, effective August 1, 1991, incorporated by reference to Registrant's Form 10-K dated October 23, 1992 and, as amended, effective August 1, 1993, incorporated by reference to Registrant's Form 10-Q for the Quarter ended October 31, 1993 dated December 2, 1993. (11) Statement re computation of per share earnings--not applicable. (12) Statement re computation of ratios--not applicable. (13) Annual report to security holders. (16) Letter re change in certifying auditors--not applicable. (18) Letter re change in accounting principles--not applicable. (21) Subsidiaries of the registrant. (22) Published report regarding matters submitted to vote of security holders--not applicable. (24) Power of attorney--none. (28) Information from reports furnished to state insurance regulatory authorities--not applicable. (99) Additional exhibits--none. (b) Reports on Form 8-K -- No reports on Form 8-K were required to be filed by the Registrant during the three months ended July 31, 2000. 10 SIGNATURES PURSUANT TO THE REQUIREMENTS OF SECTION 13 OR 15(d) 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) October 18, 2000 By: LLOYD J. SHULMAN --------------------------------- Lloyd J. Shulman Chairman of the Board Principal Executive Officer President Principal Operating Officer October 18, 2000 By: ALEX SLOBODIN --------------------------------- Alex Slobodin Executive Vice President and Treasurer Principal Financial Officer October 18, 2000 By: MARK GREENBLATT --------------------------------- Mark Greenblatt Vice President and Assistant Treasurer Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant in the capacities and on the date indicated.
SIGNATURE TITLE DATE --------- ----- ---- LLOYD J. SHULMAN Chairman of the Board, October 18, 2000 - ---------------------------- Chief Executive Officer, Lloyd J. Shulman President, Chief Operating Officer and Director ALEX SLOBODIN Executive Vice President, October 18, 2000 - ---------------------------- Treasurer and Director Alex Slobodin LANCE D. MYERS Director October 18, 2000 - ---------------------------- Lance D. Myers DEAN L. RYDER Director October 18, 2000 - ---------------------------- Dean L. Ryder JACK SCHWARTZ Director October 18, 2000 - ---------------------------- Jack Schwartz SYLVIA W. SHULMAN Director October 18, 2000 - ---------------------------- Sylvia W. Shulman LEWIS D. SIEGEL Director October 18, 2000 - ---------------------------- Lewis D. Siegel
11 INDEX TO REGISTRANT'S FINANCIAL STATEMENTS AND SCHEDULES Reference is made to the following sections of the Registrant's Annual Report to Shareholders for the fiscal year ended July 31, 2000, which are incorporated herein by reference: Report of Independent Auditors (page 15) Consolidated Balance Sheets (pages 4 and 5) Consolidated Statements of Income and Retained Earnings (page 6) Consolidated Statements of Comprehensive Income (page 6) Consolidated Statements of Cash Flows (page 7) Notes to Consolidated Financial Statements (pages 8-15) PAGE ---- Financial Statement Schedules: Report of Independent Auditors ........................... 12 II Valuation and Qualifying Accounts ........................ 13 III Real Estate and Accumulated Depreciation ................. 14 All other schedules for which provision is made in the applicable regulations of the Securities and Exchange Commission are not required under the related instructions or are inapplicable and, accordingly, are omitted. The separate financial statements and schedules of J. W. Mays, Inc. (not consolidated) are omitted because the Company is primarily an operating company and its subsidiaries are wholly-owned. REPORT OF INDEPENDENT AUDITORS ON FINANCIAL STATEMENT SCHEDULES To the Board of Directors and Shareholders J. W. Mays, Inc. and Subsidiaries We have audited the consolidated financial statements of J. W. Mays, Inc. and subsidiaries as of July 31, 2000 and 1999, and for the three years ended July 31, 2000 and have issued our report thereon dated October 12, 2000; such consolidated financial statements and report are incorporated by reference in this Form 10-K Annual Report. Our audits also included the consolidated financial statement schedules of J. W. Mays, Inc. and subsidiaries listed in Item 14(a)2 of this Form 10-K. These consolidated financial statement schedules are the responsibility of the Corporation's management. Our responsibility is to express an opinion based on our audits. In our opinion, such consolidated financial statement schedules, when considered in relation to the basic consolidated financial statements taken as a whole, present fairly, in all material respects, the information set forth therein. D'ARCANGELO & CO., LLP Purchase, N.Y. October 12, 2000 12
SCHEDULE II J. W. MAYS, INC. VALUATION AND QUALIFYING ACCOUNTS YEAR ENDED JULY 31, ----------------------------------------------- 2000 1999 1998 -------- -------- -------- Allowance for net unrealized gains (losses) on marketable securities: Balance, beginning of period ......................... $206,998 $423,879 $152,151 Additions (Reductions) ............................... (111,881) (216,881) 271,728 -------- -------- -------- Balance, end of period ............................... $ 95,117 $206,998 $423,879 ======== ======== ======== Deferred income tax asset valuation allowance: Balance, beginning of period ......................... $ 9,171 $ 24,991 $ 26,952 (Reductions) ......................................... (9,171) (15,820) (1,961) -------- -------- -------- Balance, end of period ............................... $ -- $ 9,171 $ 24,991 ======== ======== ========
13
SCHEDULE III J. W. MAYS, INC. REAL ESTATE AND ACCUMULATED DEPRECIATION JULY 31, 2000 ================================================================================================== Col. A Col. B Col. C Col. D - -------------------------------------------------------------------------------------------------- Cost Capitalized Initial Cost to Company Subsequent to Acquisition ------------------------------------------------------ Encum- Building & Carrying Description brances Land Improvements Improvements Cost - -------------------------------------------------------------------------------------------------- OFFICE AND RENTAL BUILDINGS Brooklyn, New York Fulton Street at Bond Street ..................... $ 174,657 $1,703,157 $ 3,862,454 $ 7,425,015 $ -- Jamaica, New York Jamaica Avenue at 169th Street ............... 3,133,333 -- 3,215,699 9,648,571 -- Fishkill, New York Route 9 at Interstate Highway 84 ................. 2,252,812 467,341 7,212,116 2,110,951 -- Brooklyn, New York Jowein Building Fulton Street and Elm Place ...................... 582,947 1,622,232 770,561 9,414,250 -- Levittown, New York Hempstead Turnpike ......... -- 95,256 200,560 72,990 -- Circleville, Ohio Tarlton Road ............... 879,130 120,849 4,388,456 -- -- ---------- ---------- ----------- ----------- --------- Total (A) .................. $7,022,879 $4,008,835 $19,649,846 $28,671,777 $ -- ========== ========== =========== =========== ========= ==================================================================================================================================== Col A Col. E Col. F Col. G Col. H Col. I - ------------------------------------------------------------------------------------------------------------------------------------ Gross Amount at Which Carried Life on Which at Close of Period Depreciation in ----------------------------------------- Latest Income Building & Accumulated Date of Date Satement Is Description Land Improvements Total Depreciation Construction Acquired Computed - ------------------------------------------------------------------------------------------------------------------------------------ OFFICE AND RENTAL BUILDINGS Brooklyn, New York Fulton Street at Bond Street $1,703,157 $11,287,469 $12,990,626 $ 5,135,654 Various Various (1) (2) Jamaica, New York Jamaica Avenue at 169th Street -- 12,864,270 12,864,270 5,727,894 1959 1959 (1) (2) Fishkill, New York Route 9 at Interstate Highway 84 467,341 9,323,067 9,790,408 5,103,161 10/74 11/72 (1) Brooklyn, New York Jowein Building Fulton Street and Elm Place 1,622,232 10,184,811 11,807,043 5,957,892 1915 1950 (1) (2) Levittown, New York Hempstead Turnpike 95,256 273,550 368,806 244,458 4/69 6/62 (1) Circleville, Ohio Tarlton Road 120,849 4,388,456 4,509,305 822,836 9/92 12/92 (1) ---------- ----------- ----------- ----------- Total (A) $4,008,835 $48,321,623 $52,330,458 $22,991,895 ========== =========== =========== =========== - --------------------- [GRAPHIC OMITTED] (1) Building and improvements 18-40 years (2) Improvements to leased property 3-40 years (A) Does not include Office Furniture and Equipment and Transportation Equipment in the amount of $781,412 and Accumulated Depreciation thereon of $565,571 at July 31, 2000. YEAR ENDED JULY 31, ---------------------------------------- 2000 1999 1998 ----------- ----------- ----------- S INVESTMENT IN REAL ESTATE Balance at Beginning of Year ....................... $50,621,497 $49,120,806 $48,096,243 Improvements ....................................... 1,708,961 1,500,691 1,024,563 ----------- ----------- ----------- Balance at End of Year ............................. $52,330,458 $50,621,497 $49,120,806 =========== =========== =========== ACCUMULATED DEPRECIATION Balance at Beginning of Year ....................... $22,035,880 $21,097,162 $20,143,617 Additions Charged to Costs and Expenses ............ 956,015 938,718 953,545 ----------- ----------- ----------- Balance at End of Year ............................. $22,991,895 $22,035,880 $21,097,162 =========== =========== ===========
14 EXHIBIT INDEX TO FORM 10-K (2) Plan of acquisition, reorganization, arrangement, liquidation or succession-not applicable (3) (i) Articles of incorporation-incorporated by reference (ii) By-laws-incorporated by reference (iii) Amendment to By-Laws, effective November 1, 1999 (4) Instruments defining the rights of security holders, including indentures-see Exhibit (3) above (9) Voting trust agreement-not applicable (10) Material contracts-(i) through (iii) incorporated by reference (11) Statement re computation of per share earnings-not applicable (12) Statement re computation of ratios-not applicable (13) Annual report to security holders (16) Letter re change in certifying auditors-not applicable (18) Letter re change in accounting principles-not applicable (21) Subsidiaries of the registrant (22) Published report regarding matters submitted to vote of security holders-not applicable (24) Power of attorney-none (28) Information from reports furnished to state insurance regulatory authorities-not applicable (99) Additional exhibits-none EXHIBIT 3 (III) AMENDMENT TO BY-LAWS The Board of Directors, at its meeting held August 18, 1999, by resolution, adopted amendment to the By-Laws of the Company, effective November 1, 1999, to give effect to changing that part of Section 1.1 (Annual Meeting) of the By-Laws, referring to the date for the holding of the annual meeting of shareholders of J.W. Mays, Inc. from the last Tuesday of November of each year, or as soon thereafter as practical, to the second to last or the last Tuesday of November of each year, or as soon thereafter as practical. The purpose of the amendment is to allow for the annual meeting of the shareholders to be held on one of two Tuesdays in the month of November instead of just the last Tuesday. EXHIBIT 13 (COPY OF ANNUAL REPORT TO SHAREHOLDERS ATTACHED HERETO) FISCAL YEAR ENDED JULY 31, 2000 (NEXT PAGE) EXHIBIT 21 SUBSIDIARIES OF THE REGISTRANT The Registrant owns all of the outstanding stock of the following corporations, which are included in the Consolidated Financial Statements filed with this report: DUTCHESS MALL SEWAGE PLANT, INC. (a New York corporation) J. W. M. Realty Corp. (an Ohio corporation) 15 EX-13 2 0002.txt ANNUAL REPORT J.W. MAYS, INC. Annual Report 2000 Year Ended July 31, 2000 J.W. MAYS, INC. CONTENTS PAGE NO. ================================================================================ Summary of Selected Financial Data 2 The Company 2 Message to Shareholders 3 Consolidated Balance Sheets 4-5 Consolidated Statements of Income and Retained Earnings 6 Consolidated Statements of Comprehensive Income 6 Consolidated Statements of Cash Flows 7 Notes to Consolidated Financial Statements 8-15 Report of Independent Auditors 15 Five Year Summary of Consolidated Operations 16 Management's Discussion and Analysis of Financial Condition and Results of Operations 17-18 Quarterly Financial Information (Unaudited) 19 Common Stock and Dividend Information 19 Officers and Directors 20 EXECUTIVE OFFICES 9 Bond Street, Brooklyn, N.Y. 11201 TRANSFER AGENT AND REGISTRAR American Stock Transfer & Trust Company 59 Maiden Lane New York, N.Y. 10007 SPECIAL COUNSEL Holland & Knight LLP 195 Broadway New York, N.Y. 10007 INDEPENDENT AUDITORS D'Arcangelo & Co., LLP 3020 Westchester Avenue Purchase, N.Y. 10577 ANNUAL MEETING The Annual Meeting of Shareholders will be held on Tuesday, November 21, 2000, at 10:00 A.M., New York time, at J. W. MAYS, INC., 9 Bond Street, Brooklyn, New York. 1
J.W. MAYS, INC. SUMMARY OF SELECTED FINANCIAL DATA (dollars in thousands except per share data) 2000 1999 1998 1997 1996 ========================================================================================================= Rental Income $10,451 $10,250 $10,249 $ 9,666 $ 8,855 Rental Income--Affiliated Company 414 411 414 414 414 Recovery of Real Estate Taxes -- -- 1,219 -- -- - --------------------------------------------------------------------------------------------------------- Total Revenues 10,865 10,661 11,882 10,080 9,269 - --------------------------------------------------------------------------------------------------------- Net Income (Loss) 1,066 1,164 1,838 811 (141) - --------------------------------------------------------------------------------------------------------- Real Estate--Net 29,339 28,586 28,024 27,953 25,895 - --------------------------------------------------------------------------------------------------------- Total Assets 42,485 41,657 41,375 40,406 37,771 - --------------------------------------------------------------------------------------------------------- Long-Term Debt: Mortgages Payable 6,000 6,440 7,814 8,642 6,965 Other 362 491 582 641 734 ------- ------- ------- ------- ------- Total 6,362 6,931 8,396 9,283 7,699 - --------------------------------------------------------------------------------------------------------- Shareholders' Equity 31,803 31,067 30,059 28,030 27,141 - --------------------------------------------------------------------------------------------------------- Net Income (Loss) Per Common Share $ .50 $ .54 $ .86 $ .38 $ (.07) - --------------------------------------------------------------------------------------------------------- Cash Dividends Declared Per Share -- -- -- -- -- - ---------------------------------------------------------------------------------------------------------
Average common shares outstanding for fiscal 2000, 2,118,908, 1999 and 1998, 2,135,780; 1997, 2,136,175 and 1996, 2,136,397. THE COMPANY ================================================================================ J.W. Mays, Inc. was founded in 1924 and incorporated under the laws of the State of New York on July 6, 1927. The Company operates a number of commercial real estate properties located in Brooklyn and Jamaica in New York City, in Levittown, Long Island, New York, in Fishkill, Dutchess County, New York and in Circleville, Ohio. The major portion of these properties is owned and the balance is leased. A substantial percentage of these properties is leased to tenants while the remainder is available for lease. More comprehensive information concerning the Company appears in its Form 10-K Annual Report for the fiscal year ended July 31, 2000. 2 J.W. MAYS, INC. TO OUR SHAREHOLDERS: ================================================================================ In last year's letter to shareholders, we reported a continued improvement in the Company's financial position with profits in each of the four quarters. It is gratifying that we are able to do so again this year. In fiscal 2000, our revenues were $10,864,565 compared to $10,661,297 in the 1999 fiscal year. Net income for fiscal 2000 was $1,065,938, or $.50 per share. This compares to fiscal 1999 net income of $1,163,822, or $.54 per share. The shareholders' equity increased to $31,802,995 at July 31, 2000 from $31,067,438 at July 31, 1999. We leased 11,200 square feet of office space to the State of New York which space is contiguous to the existing office space occupied by the State in the Company's Jamaica, New York property. Rent for the additional space commenced September 1, 2000. The new lobby entrance in the 9-17 Bond Street building, a part of the Company's former Brooklyn, New York store, has been completed. The new lobby will provide separate access to the upper floors for prospective large user tenants through two high-speed elevators. In fiscal 2000, we extended the mortgage on the Jowein building in Brooklyn, New York, effective April 1, 2000, for a period of five years, at the same interest rate. The mortgage loan is self-amortizing. The Company has agreed, in principle, to the terms of a bank commitment letter for a construction loan to be converted to a term loan, in the principal amount of $3,500,000, to cover the cost of capital improvements in connection with a lease signed by the Company with the State of New York, which lease is awaiting final documentation from the State, for 42,250 square feet of office space in the Company's Jamaica, New York property. Occupancy is anticipated to commence on or about August 1, 2001. We are continuing to solicit prospective tenants for the available space in each of the Company's locations. Because of adequate preparation, Y2K turned out to be a non-event as we transitioned into Year 2000 without any Y2K issues. In August, 2000, your Board appointed Mark Greenblatt to the position of Vice President, Assistant Treasurer and Controller. Mark has served as our Company's Assistant Treasurer and Controller since November, 1987. Our thanks go to our employees for their continued hard work and to our Board of Directors for their support. I am confident and convinced that we are on the right track for continued growth. /s/ LLOYD J. SHULMAN - ---------------------------- Lloyd J. Shulman Chairman/President October 12, 2000 3
J.W. MAYS, INC. CONSOLIDATED BALANCE SHEETS July 31, 2000 and 1999 ASSETS 2000 1999 ================================================================================================== Property and Equipment--at cost (Notes 1 and 3): Buildings and improvements ................................. $38,917,272 $36,775,251 Improvements to leased property ............................ 9,158,009 9,143,369 Fixtures and equipment ..................................... 572,189 567,057 Land ....................................................... 4,008,835 4,008,835 Other ...................................................... 209,223 208,775 Construction in progress ................................... 246,342 694,042 ----------- ----------- 53,111,870 51,397,329 Less accumulated depreciation and amortization ............. 23,557,465 22,611,294 ----------- ----------- Property and equipment--net ............................ 29,554,405 28,786,035 =========== =========== Current Assets: Cash and cash equivalents (Notes 10 and 11) ................ 1,529,082 1,489,843 Marketable securities (Notes 1, 2 and 11) .................. 41,685 39,993 Receivables (Note 7) ....................................... 215,872 415,243 Income taxes refundable (Notes 1 and 5) .................... -- 38,727 Deferred income taxes (Notes 1 and 5) ...................... 180,000 79,000 Security deposits .......................................... 33,125 6,165 Prepaid expenses ........................................... 1,005,279 960,614 ----------- ----------- Total current assets ................................... 3,005,043 3,029,585 ----------- ----------- Other Assets: Deferred charges (Note 1) .................................. 2,619,188 2,562,715 Less accumulated amortization .............................. 1,466,651 1,341,887 ----------- ----------- Net .................................................... 1,152,537 1,220,828 Security deposits (Note 11) ................................ 613,799 633,424 Unbilled receivables (Notes 1 and 7) ....................... 4,735,115 4,423,417 Unbilled receivable--affiliated company (Notes 1 and 7) .... 363,875 545,812 Receivables -- 12,534 Marketable securities (Notes 1, 2 and 11) .................. 3,059,770 3,005,401 ----------- ----------- Total other assets ..................................... 9,925,096 9,841,416 ----------- ----------- TOTAL ASSETS ........................................... $42,484,544 $41,657,036 =========== ===========
See Notes to Consolidated Financial Statements. 4
LIABILITIES AND SHAREHOLDERS' EQUITY 2000 1999 ====================================================================================================================== Long-Term Debt: Mortgages payable (Notes 3 and 11) ............................................ $ 5,999,844 $ 6,439,933 Other (Note 4) ................................................................ 362,443 490,716 ----------- ----------- Total long-term debt ...................................................... 6,362,287 6,930,649 ----------- ----------- Deferred Income Taxes (Notes 1 and 5) ........................................... 2,333,000 1,740,000 ----------- ----------- Current Liabilities: Accounts payable .............................................................. 43,663 29,728 Payroll and other accrued liabilities (Note 8) ................................ 756,660 380,140 Income taxes payable (Notes 1 and 5) .......................................... 22,365 -- Other taxes payable ........................................................... 3,414 2,205 Current portion of long-term debt--mortgages payable (Notes 3 and 11) ......... 1,023,035 1,396,711 Current portion of long-term debt--other (Note 4) ............................. 137,125 110,165 ----------- ----------- Total current liabilities ................................................. 1,986,262 1,918,949 ----------- ----------- Total liabilities ......................................................... 10,681,549 10,589,598 ----------- ----------- 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 (Notes 1 and 2) .............. 63,117 136,998 Retained earnings ............................................................. 26,761,938 25,696,000 ----------- ----------- 32,349,597 31,357,540 Less common stock held in treasury, at cost--90,017 shares at July 31, 2000 and 42,517 shares at July 31, 1999 ............................. 546,602 290,102 ----------- ----------- Total shareholders' equity ................................................ 31,802,995 31,067,438 ----------- ----------- Commitments (Notes 6 and 7) and Contingencies (Note 12) TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY ................................ $42,484,544 $41,657,036 =========== ===========
5 J.W. MAYS, INC. CONSOLIDATED STATEMENTS OF INCOME AND RETAINED EARNINGS
Years Ended July 31, --------------------------------------------- 2000 1999 1998 =========================================================================================================================== Revenues Rental income (Notes 1 and 7) .......................................... $10,450,955 $10,250,423 $10,249,650 Rental income--affiliated company (Note 7) ............................. 413,610 410,874 413,609 Recovery of real estate taxes .......................................... -- -- 1,218,600 ----------- ----------- ----------- Total revenues ................................................... 10,864,565 10,661,297 11,881,859 ----------- ----------- ----------- Expenses Real estate operating expenses (Note 6) ................................ 5,529,850 5,312,787 5,416,292 Administrative and general expenses .................................... 2,240,372 2,119,558 2,076,614 Bad debts (recovery) (Note 12) ......................................... -- (17,115) (52,749) Depreciation and amortization (Note 1) ................................. 1,009,859 1,002,733 1,011,318 ----------- ----------- ----------- Total expenses ................................................... 8,780,081 8,417,963 8,451,475 ----------- ----------- ----------- Income from operations before investment income, interest expense and income taxes ...................................... 2,084,484 2,243,334 3,430,384 ----------- ----------- ----------- Investment income and interest expense Investment income (Notes 1 and 2) ...................................... 296,768 278,162 269,646 Interest expense (Notes 3 and 10) ...................................... 618,314 683,674 812,297 ----------- ----------- ----------- (321,546) (405,512) (542,651) ----------- ----------- ----------- Income before income taxes .............................................. 1,762,938 1,837,822 2,887,733 Income taxes provided (Notes 1 and 5) ................................... 697,000 674,000 1,050,000 ----------- ----------- ----------- Net income .............................................................. 1,065,938 1,163,822 1,837,733 Retained earnings, beginning of year .................................... 25,696,000 24,532,178 22,694,445 ----------- ----------- ----------- Retained earnings, end of year .......................................... $26,761,938 $25,696,000 $24,532,178 =========== =========== =========== Income per common share (Note 1) ........................................ $ .50 $ .54 $ .86 =========== =========== =========== Dividends per share ..................................................... -- -- -- =========== =========== =========== Average common shares outstanding ....................................... 2,118,908 2,135,780 2,135,780 =========== =========== ===========
See Notes to Consolidated Financial Statements. CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Years Ended July 31, -------------------------------------------- 2000 1999 1998 =========================================================================================================================== Net Income ............................................................... $1,065,938 $1,163,822 $1,837,733 ---------- ---------- ---------- Other comprehensive income, net of tax (Note 5) Unrealized gain (loss) on available-for-sale securities, net of taxes (benefit) of $(38,000), $(61,000) and $80,000 for the fiscal years 2000, 1999 and 1998, respectively............................................................. (73,881) (155,881) 191,728 Reclassification adjustment .............................................. (26,734) (2,202) 14,997 ---------- ---------- ---------- Other comprehensive income (loss) ........................................ (100,615) (158,083) 206,725 ---------- ---------- ---------- Comprehensive income ..................................................... $ 965,323 $1,005,739 $2,044,458 ========== ========== ==========
See Notes to Consolidated Financial Statements. 6 J.W. MAYS, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS
Years Ended July 31, --------------------------------------------- 2000 1999 1998 =========================================================================================================================== Cash Flows From Operating Activities Net income ............................................................. $ 1,065,938 $ 1,163,822 $ 1,837,733 Adjustments to reconcile net income to net cash provided by operating activities: Deferred income taxes ................................................ 530,000 529,000 854,000 Amortization of premium on marketable debt securities .......................................................... -- (623) (661) Realized (gain) loss on marketable securities ........................ (26,734) (2,202) 14,997 Depreciation and amortization ........................................ 1,009,859 1,002,733 1,011,318 Amortization of deferred expenses .................................... 214,139 240,818 248,601 Other assets--deferred expenses ...................................... (145,848) (81,372) (139,493) --unbilled receivables ................................... (311,698) (405,502) (366,120) --unbilled receivable--affiliated company ................ 181,937 181,938 181,938 --receivables ............................................ 12,534 167,777 203,777 --receivable--affiliated company ......................... -- 87,943 106,510 Changes in: Receivables .......................................................... 199,371 46,527 101,640 Prepaid expenses ..................................................... (44,665) (6,886) 197,188 Income taxes refundable .............................................. 38,727 (38,727) -- Accounts payable ..................................................... 13,935 (13,054) (3,474) Payroll and other accrued liabilities ................................ 376,520 (179,204) 6,129 Income taxes payable ................................................. 22,365 (82,348) 70,912 Other taxes payable .................................................. 1,209 298 (11) ----------- ----------- ----------- Net cash provided by operating activities .......................... 3,137,589 2,610,938 4,324,984 ----------- ----------- ----------- Cash Flows From Investing Activities Acquisition of property and equipment .................................. (1,778,229) (1,321,921) (1,126,540) Security deposits ...................................................... (7,335) (15,942) (34,155) Marketable securities: Receipts from sales or maturities ..................................... 139,134 644,714 486,524 Payments for purchases ................................................ (280,342) (577,404) (736,049) ----------- ----------- ----------- Net cash (used) by investing activities ........................... (1,926,772) (1,270,553) (1,410,220) ----------- ----------- ----------- Cash Flows From Financing Activities Borrowings--securities broker .......................................... -- -- 1,708,595 Payments--securities broker ............................................ -- -- (2,978,648) Increase--security deposits ............................................ 2,687 10,668 54,513 Payments--mortgage and other debt ...................................... (917,765) (909,189) (885,533) Purchase of treasury stock ............................................. (256,500) -- -- ----------- ----------- ----------- Net cash (used) by financing activities ........................... (1,171,578) (898,521) (2,101,073) ----------- ----------- ----------- Net increase in cash and cash equivalents .............................. 39,239 441,864 813,691 Cash and cash equivalents at beginning of year ......................... 1,489,843 1,047,979 234,288 ----------- ----------- ----------- Cash and cash equivalents at end of year ............................... $ 1,529,082 $ 1,489,843 $ 1,047,979 =========== =========== ===========
See Notes to Consolidated Financial Statements. 7 J.W. MAYS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS ================================================================================ 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: CONSOLIDATION: The consolidated financial statements include the accounts of the Company, a New York corporation and its subsidiaries, which are wholly-owned. Material intercompany items have been eliminated in consolidation. ACCOUNTING RECORDS AND USE OF ESTIMATES: The accounting records are maintained in accordance with generally accepted accounting principles ("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. RENTAL INCOME: All of the real estate owned by the Company is held for leasing to tenants except for a small portion used for Company offices. Rent is recognized from tenants under executed leases no later than on an established date or on an earlier date if the tenant should commence conducting business. 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 the lease. 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. Realized gains and losses are determined on a specific identification basis. PROPERTY AND EQUIPMENT: Property and equipment are stated at cost. Depreciation is calculated using the straight-line method and the declining-balance method. Amortization of improvements to leased property is calculated over the shorter of the life of the lease or the estimated useful life of the improvements. Lives used to determine depreciation and amortization are generally as follows: Building and improvements .............. 18-40 years Improvements to leased property ........ 3-40 years Fixtures and equipment ................. 7-12 years Other .................................. 3-5 years Maintenance, repairs, renewals and improvements of a non-permanent nature are charged to expense when incurred. Expenditures for additions and major renewals or improvements are capitalized. The cost of assets sold or retired and the accumulated depreciation or amortization thereon are eliminated from the respective accounts in the year of disposal, and the resulting gain or loss is credited or charged to income. Interest is capitalized in connection with the construction/renovations of real property. The capitalized interest is recorded as part of the asset to which it relates and is amortized over the asset's estimated useful life. COMPREHENSIVE INCOME: In June 1997, SFAS No. 130, "Reporting Comprehensive Income", ("SFAS 130") was issued. SFAS 130 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. SFAS 130 is effective for financial statements for periods beginning after December 15, 1997. Reclassification of financial statements for earlier periods presented for comparative purposes was required upon adoption. 8 ================================================================================ DEFERRED CHARGES: Deferred charges consist principally of costs incurred in connection with the leasing of property to tenants. Such costs are amortized over the related lease periods using the straight-line method. INCOME TAXES: Deferred income taxes are provided for the temporary differences between the financial reporting basis and the tax basis of the Company's assets and liabilities. Deferred tax assets result principally from the recording of certain accruals and reserves which currently are not deductible for tax purposes. Deferred tax liabilities result principally from temporary differences in the recognition of gains and losses from certain investments and from the use, for tax purposes, of accelerated depreciation. INCOME PER SHARE OF COMMON STOCK: Income per share has been computed by dividing net income for the year by the weighted average number of shares of common stock outstanding during the year, adjusted for the purchase of treasury stock. Shares used in computing income per share were 2,118,908 in fiscal 2000 and 2,135,780 in fiscals 1999 and 1998. The Company's adoption of FASB 128 "Earnings per Share" has had no effect on the computation of previously reported earnings per share. RECLASSIFICATIONS: Certain accounts for the year ended July 31, 1998 have been reclassified to reflect comparability with account classifications adopted for the year ended July 31, 2000 with no effect on previously reported net income. 2. MARKETABLE SECURITIES: As of July 31, 2000 and 1999, the Company's marketable securities were classified as follows:
2000 1999 ----------------------------------------------- ---------------------------------------------- GROSS GROSS Gross Gross UNREALIZED UNREALIZED FAIR Unrealized Unrealized Fair COST GAINS LOSSES VALUE Cost Gains Losses Value ---------- ---------- ---------- --------- ---------- ---------- ---------- ---------- Current: Certificate of deposit...... $ 41,685 $ -- $-- $ 41,685 $ 39,993 $ -- $-- $ 39,993 ========== ======== === ========== ========== ======== === ========== Non-current: Available-for-sale: Equity securities......... $2,964,653 $ 95,117 $-- $3,059,770 $2,798,403 $206,998 $-- $3,005,401 ========== ======== === ========== ========== ======== === ==========
Investment income for the years ended July 31, 2000, 1999 and 1998 consists of the following: 2000 1999 1998 -------- -------- -------- Interest income....................................................... $ 67,516 $ 82,344 $ 81,746 Dividend income....................................................... 202,518 193,616 202,897 Gain (loss) on sale of securities..................................... 26,734 2,202 (14,997) -------- -------- -------- Total............................................................... $296,768 $278,162 $269,646 ======== ======== ========
9 ================================================================================ 3. LONG-TERM DEBT:
JULY 31, 2000 July 31, 1999 ----------------------- ----------------------- 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) 8 1/2% 4/01/07 $ 266,666 $2,866,667 $ 266,667 $3,133,333 Jowein building, Brooklyn, N.Y ... (b) 9 % 3/31/05 103,128 479,819 675,050 -- Fishkill, New York property ...... (c) 8 1/4% 7/01/04 89,312 2,163,500 82,263 2,252,812 Circleville, Ohio property ....... (d) 7 % 9/30/02 389,272 489,858 363,029 879,130 Other ............................ 8 1/2% 5/01/01 174,657 -- 9,702 174,658 ---------- ---------- ---------- ---------- Total ......................... $1,023,035 $5,999,844 $1,396,711 $6,439,933 ========== ========== ========== ==========
(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 property. The interest rate on the loan is 81 @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. (b) 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%. 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. (c) On June 2, 1999, the existing first mortgage loan balance on the Fishkill property was extended for a period of five years. The annual interest rate was reduced from 9% to 81 @4% and the interest and principal payments are to be made in constant monthly amounts based upon a fifteen (15) year payout period. (d) 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. Maturities of long-term debt--mortgages payable, outstanding at July 31, 2000, are as follows: Years ending July 31, 2001 (included in current liabilities), $1,023,035; 2002, $893,772; 2003, $567,607; 2004, $2,362,617; 2005, $375,848, and thereafter, $1,800,000. 4. LONG-TERM DEBT--OTHER: Long-Term debt--Other consists of the following:
July 31, 2000 July 31, 1999 ------------------------- ----------------------- Due Within Due After Due Within Due After One Year One Year One Year One Year Deferred compensation*................................ $104,000 $ 43,333 $104,000 $147,333 Lease security deposits**............................. 33,125 319,110 6,165 343,383 -------- -------- -------- -------- Total............................................ $137,125 $362,443 $110,165 $490,716 ======== ======== ======== ========
Maturities of long-term debt--other, outstanding at July 31, 2000, are as follows: Years ending July 31, 2001 (included in current liabilities), $137,125; 2002, $43,333; 2003, $1,010; 2004, $5,958; 2005, $111,130, and thereafter, $201,012. - ---------- * 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 $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 December 31, 1996 and the monthly payments commenced January, 1997. ** Does not include three irrevocable letters of credit totaling $275,000 at July 31, 2000 and at July 31, 1999, provided by three tenants. 10 ================================================================================ 5. INCOME TAXES: Significant components of the Company's deferred tax assets and liabilities as of July 31, 2000 and 1999, are a result of temporary differences related to the items described as follows:
2000 1999 ---------------------------- ------------------------------- DEFERRED DEFERRED Deferred Deferred TAX ASSETS TAX LIABILITIES Tax Assets Tax Liabilities ---------- --------------- ---------- --------------- Net operating loss carryforward ......................... $192,056 $ -- $ 763,563 $ -- Alternative minimum tax credit carryforward ............. 356,814 -- 327,293 -- Investment tax credit carryforward ...................... -- -- 9,171 -- Deferred compensation not currently deductible .......... 50,093 -- 85,453 -- Rental income received in advance ....................... 106,063 -- 13,411 -- Unbilled receivables .................................... -- 1,733,657 -- 1,689,538 Property and equipment .................................. -- 1,114,820 -- 1,129,908 Unrealized gain on available-for-sale securities ........ -- 32,340 -- 70,379 Other ................................................... 22,791 -- 39,105 -- -------- ---------- ---------- ---------- 727,817 2,880,817 1,237,996 2,889,825 Valuation allowance ..................................... -- -- (9,171) -- -------- ---------- ---------- ---------- $727,817 $2,880,817 $1,228,825 $2,889,825 ======== ========== ========== ==========
The Company has determined, based on its history of operating earnings and expectations for the future, that it is more likely than not that future taxable income will be sufficient to fully utilize the deferred tax assets at July 31, 2000, except for investment tax credit carryforwards, for which a 100% valuation allowance was provided. The valuation allowance was reduced by $9,171 in fiscal 2000 and $15,820 in fiscal 1999, due to the expiration of investment tax credit carryforwards. Income taxes provided for the years ended July 31, 2000, 1999 and 1998 consists of the following:
2000 1999 1998 -------- -------- ---------- Current: Federal .................................................... $ 29,600 $ 21,400 $ 54,000 State and City ............................................. 137,400 123,600 142,000 Deferred taxes .............................................. 530,000 529,000 854,000 -------- -------- ---------- Total provision .......................................... $697,000 $674,000 $1,050,000 ======== ======== ==========
Components of the deferred tax provision for the years ended July 31, 2000, 1999 and 1998 consists of the following:
2000 1999 1998 --------- -------- --------- Book depreciation over (under) tax depreciation ............. $ (15,088) $174,842 $ (29,000) Reduction (increase) of rental income received in advance .................................................... (92,652) 17,837 (24,000) Increase in unbilled receivables ............................ 44,119 76,012 63,000 Deferred compensation ....................................... 35,360 35,360 35,000 et operating loss carryforwards ............................. 571,506 293,200 869,000 Alternative minimum tax ..................................... (29,521) (21,479) (53,000) Other ....................................................... 16,276 (46,772) (7,000) --------- -------- --------- $ 530,000 $529,000 $ 854,000 ========= ======== =========
11 ================================================================================ Taxes provided for the years ended July 31, 2000, 1999 and 1998 differ from amounts which would result from applying the federal statutory tax rate to pre-tax income, as follows:
2000 1999 1998 ---------- ---------- ---------- Income before income taxes .............................................. $1,762,937 $1,837,822 $2,887,733 Dividends received deduction ............................................ (45,694) (52,820) (98,530) Other-net ............................................................... 44,522 (38,600) 22,663 ---------- ---------- ---------- Adjusted pre-tax income ................................................. $1,761,765 $1,746,402 $2,811,866 ========== ========== ========== Statutory rate .......................................................... 34% 34% 34% Income tax provision at statutory rate .................................. $ 599,000 $ 594,000 $ 956,300 State and City income taxes, net of federal income tax benefit ..................................................... 98,000 80,000 93,700 ---------- ---------- ---------- Income taxes provided ................................................... $ 697,000 $ 674,000 $1,050,000 ========== ========== ==========
The Company's fiscal 2000 and fiscal 1999 federal income tax liability of $30,000 and $21,000, respectively, were determined using the Alternative Minimum Tax ("AMT"), a separate parallel tax system. The excess of the AMT over the regular tax is a credit which can be carried forward indefinitely to reduce future regular tax liabilities. The Company has additional AMT credits from prior years totaling $306,000 resulting in total AMT credits of $357,000 at July 31, 2000. At July 31, 2000, the Company had net operating tax loss carryforwards of $748,000 available to offset future regular taxable income. Of this amount $326,000 is available until the year 2010 and $422,000 until 2011. 6. LEASES: The Company's real estate operations encompass both owned and leased properties. The current leases on leased property, most of which have options to extend the term, range from 1 year to 27 years. Certain of the leases provide for additional rentals under certain circumstances and obligate the Company for payments of real estate taxes and other expenses. Rental expense for leased real property for each of the three fiscal years ended July 31, 2000 was exceeded by sublease rental income, as follows:
2000 1999 1998 ---------- ---------- ---------- Minimum rental expense .................................................. $1,158,749 $1,155,118 $1,156,168 Contingent rental expense ............................................... 1,094,897 1,032,643 1,051,884 ---------- ---------- ---------- 2,253,646 2,187,761 2,208,052 Sublease rental income .................................................. 5,512,126 5,437,421 5,399,129 ---------- ---------- ---------- Excess of rental income over expense ............................... $3,258,480 $3,249,660 $3,191,077 ========== ========== ==========
Rent expense paid to an affiliated company totaled $160,800 for each of the fiscal years. Future minimum non-cancellable rental commitments for operating leases with initial or remaining terms of one year or more are payable as follows: Fiscal OPERATING Year LEASES ------ --------- 2001 ....................................... $ 1,087,174 2002 ....................................... 1,031,007 2003 ....................................... 1,031,007 2004 ....................................... 1,031,007 2005 ....................................... 1,018,750 After 2005 ................................. 5,849,402 ----------- Total required* ....................... $11,048,347 =========== * Minimum payments have not been reduced by minimum sublease rentals of $31,437,639 under operating leases due in the future under non-cancellable leases. 12 ================================================================================ 7. RENTAL INCOME: Rental income for each of the fiscal years 2000, 1999 and 1998 is as follows:
July 31, ------------------------------------------- 2000 1999 1998 ----------- ----------- ----------- Minimum rentals Company owned property ................................................ $ 4,890,946 $ 4,803,089 $ 4,800,127 Operating leases ...................................................... 4,751,200 4,733,897 4,686,130 ----------- ----------- ----------- 9,642,146 9,536,986 9,486,257 ----------- ----------- ----------- Contingent rentals Company owned property ................................................ 461,493 420,787 464,003 Operating leases ...................................................... 760,926 703,524 712,999 ----------- ----------- ----------- 1,222,419 1,124,311 1,177,002 ----------- ----------- ----------- Total ............................................................... $10,864,565 $10,661,297 $10,663,259 =========== =========== ===========
Future minimum non-cancellable rental income for leases with initial or remaining terms of one year or more is as follows: Fiscal COMPANY OPERATING Year OWNED PROPERTY LEASES TOTAL ------- -------------- ----------- ----------- 2001 .............. $ 4,933,428 $ 4,930,884 $ 9,864,312 2002 .............. 4,508,887 4,461,330 8,970,217 2003 .............. 3,316,666 4,041,046 7,357,712 2004 .............. 3,226,382 4,036,004 7,262,386 2005 .............. 2,969,315 3,904,718 6,874,033 After 2005 ........ 14,581,495 10,063,657 24,645,152 ----------- ----------- ----------- Total ......... $33,536,173 $31,437,639 $64,973,812 =========== =========== =========== Rental income from an affiliated company totaled $413,610 for fiscal year 2000, $410,874 for fiscal year 1999 and $413,609 for fiscal year 1998. Amounts due from the affiliated company are as follows: July 31, -------------------------- 2000 1999 -------- --------- Unbilled receivables ............... $363,875 $545,812 8. PAYROLL AND OTHER ACCRUED LIABILITIES: Payroll and other accrued liabilities for the years ended July 31, 2000 and 1999 consists of the following: 2000 1999 -------- -------- Payroll ................................ $ 98,004 $ 93,704 Interest ............................... 49,181 54,555 Professional fees ...................... 55,750 52,115 Rents received in advance .............. 311,949 39,443 Utilities .............................. 101,080 79,065 Brokers commissions .................... 20,991 4,712 Construction costs ..................... 23,025 -- Other .................................. 96,680 56,546 -------- -------- Total ............................. $756,660 $380,140 ======== ======== 13 ================================================================================ 9. EMPLOYEES' RETIREMENT PLAN: The Company sponsors a noncontributory Money Purchase Plan covering substantially all of its employees. Operations were charged $230,719, $225,353 and $202,432 as contributions to the Plan for fiscal years 2000, 1999 and 1998, respectively. 10. CASH FLOW INFORMATION: For purpose 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: Years Ended July 31, -------------------------------------------- 2000 1999 1998 -------- -------- -------- Interest paid .............. $623,688 $690,187 $820,577 Income taxes paid .......... $105,908 $266,075 $125,088 11. FINANCIAL INSTRUMENTS AND CREDIT RISK CONCENTRATIONS: The following disclosure of estimated fair value was determined by the Company, using available market information and appropriate valuation methods. Considerable judgment is necessary to develop estimates of fair value. The estimates presented herein are not necessarily indicative of the amounts that could be realized upon disposition of the financial instruments. The Company estimates the fair value of its financial instruments using the following methods and assumptions: (i) quoted market prices, when available, are used to estimate the fair value of investments in marketable debt and equity securities; (ii) discounted cash flow analyses are used to estimate the fair value of long-term debt, using the Company's estimate of current interest rates for similar debt; and (iii) carrying amounts in the balance sheet approximate fair value for cash and cash equivalents and tenant security deposits due to their high liquidity. JULY 31, 2000 -------------------------- CARRYING FAIR VALUE VALUE ---------- ---------- Cash and cash equivalents ........... $1,529,082 $1,529,082 Marketable securities ............... $3,101,455 $3,101,455 Tenant security deposits ............ $ 352,235 $ 352,235 Long-term debt-mortgages payable .... $7,022,879 $7,009,948 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-eight tenants, of which one tenant accounted for 15.91% of rental income during the year ended July 31, 2000. No other tenant accounted for more than 10% of rental income during the year ended July 31, 2000. 12. CONTINGENCIES: 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 realized from McCrory $36,602 or 21.53% on account of its administrative claim of $170,000. The McCrory case has been closed and the Company has been advised that there will be no further distribution to creditors. 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 realized from Jamesway $465,811 or 49% on account of its unsecured claim and 100% of its allowed administrative claim of $54,887, for a total of $520,698. The Company has made no provision in its financial statements for the balance of its claim filed against Jamesway due to the fact that there may not be any further distributions. 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. 14 ================================================================================ 13. SUBSEQUENT EVENTS: The Company has agreed, in principle, to the terms of a commitment letter with a bank for a loan in the amount of $3,500,000, the loan to be 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 financial statements do not give effect to the commitment letter. The loan proceeds are to be 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: No. 1--A nine-month second mortgage construction loan with a six-month extension option, with interest at a floating prime rate. During this period, the Company is to have the option to secure advances against the loan amount. No. 2--Upon completion of the renovations the construction loan would convert to a 10-year second mortgage permanent loan on a 15-year level amortization, plus interest, at the option of the Company. The interest rate on the permanent loan during the first 5 years is at a fixed rate equal to the 5-year treasury note rate plus 2.25%, per annum, set 3 days prior to closing, and during the 5-year renewal term, at a fixed rate equal to the 5-year treasury note rate, as of the start of the renewal term plus 2.25%, per annum. Payments are to be payable, 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 commitment letter provide certain restrictions on the incurrence of indebtedness and the sale or transfer of the Company's ground lease interest in the premises. Both facilities will be subject to the bank's existing first position mortgage loan on the premises. Rent commenced September 1, 2000 for 11,200 square feet of office space, leased during April, 2000 to the State of New York, which space is contiguous to space occupied by the State in the Company's Jamaica, New York property. Renovations will be completed during November, 2000. ================================================================================ INDEPENDENT AUDITORS' REPORT To the Board of Directors and Shareholders J.W. Mays, Inc. and Subsidiaries We have audited the accompanying consolidated balance sheets of J.W. Mays, Inc. and subsidiaries as of July 31, 2000 and 1999, and the related consolidated statements of income and retained earnings, comprehensive income and cash flows for the three years ended July 31, 2000. These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of J.W. Mays, Inc. and its subsidiaries as of July 31, 2000 and 1999, and the results of their operations and their cash flows for the three years ended July 31, 2000 in conformity with generally accepted accounting principles. D'ARCANGELO & CO., LLP Purchase, New York October 12, 2000 15 J.W. MAYS, INC. FIVE YEAR SUMMARY OF CONSOLIDATED OPERATIONS (dollars in thousands except per share data)
Years Ended July 31, -------------------------------------------------------------------- 2000 1999 1998 1997 1996 - ------------------------------------------------------------------------------------------------------------------------ Revenues Rental income ............................... $ 10,451 $ 10,250 $ 10,249 $ 9,666 $ 8,855 Rental income--affiliated company ........... 414 411 414 414 414 Recovery of real estate taxes ............... -- -- 1,219 -- -- --------- --------- --------- --------- --------- Total revenues ............................ 10,865 10,661 11,882 10,080 9,269 --------- --------- --------- --------- --------- Expenses Real estate operating expenses .............. 5,530 5,312 5,416 5,874 5,679 Administrative and general expenses ......... 2,240 2,119 2,077 1,939 2,008 Bad debts (recovery) ........................ -- (17) (53) (419) 424 Depreciation and amortization ............... 1,010 1,003 1,011 967 889 --------- --------- --------- --------- --------- Total expenses ............................ 8,780 8,417 8,451 8,361 9,000 --------- --------- --------- --------- --------- Income from operations before investment income, interest expense and income taxes ................................ 2,085 2,244 3,431 1,719 269 --------- --------- --------- --------- --------- Investment income and interest expense Investment income ........................... 297 278 269 268 250 Interest expense ............................ 619 684 812 696 682 --------- --------- --------- --------- --------- (322) (406) (543) (428) (432) --------- --------- --------- --------- --------- Income (loss) before income taxes ............ 1,763 1,838 2,888 1,291 (163) Income taxes provided (benefit) .............. 697 674 1,050 480 (22) --------- --------- --------- --------- --------- Net Income (loss) ............................ $ 1,066 $ 1,164 $ 1,838 $ 811 $ (141) ========= ========= ========= ========= ========= Net income (loss) per common share ........... $ .50 $ .54 $ .86 $ .38 $ (.07) ========= ========= ========= ========= ========= Dividends per share .......................... -- -- -- -- -- ========= ========= ========= ========= ========= Average common shares outstanding ............ 2,118,908 2,135,780 2,135,780 2,136,175 2,136,397 ========= ========= ========= ========= =========
16 J.W. MAYS, INC. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - -------------------------------------------------------------------------------- FISCAL 2000 COMPARED TO FISCAL 1999 Net income for the year ended July 31, 2000 amounted to $1,065,938, or $.50 per share, compared to net income for the year ended July 31, 1999 of $1,163,822, or $.54 per share. The 1999 figures include a bad debt recovery of $17,115. There was no comparable bad debt recovery in the 2000 year. Revenues in the current year increased to $10,864,565 from $10,661,297 in the comparable 1999 fiscal year. Real estate operating expenses in the current year increased to $5,529,850 from $5,312,787 in the comparable 1999 year primarily due to an increase in real estate taxes, fuel, electric and water and sewer costs, partially offset by a decrease in maintenance costs. Administrative and general expenses in the current year increased to $2,240,372 from $2,119,558 in the comparable 1999 year primarily due to an increase in payroll, pension, medical and insurance costs. Depreciation and amortization expense in the current year increased to $1,009,859 from $1,002,733 in the 1999 year. Interest expense exceeded investment income by $321,546 in fiscal 2000 and by $405,512 in the comparable 1999 year. The decrease was due to scheduled repayments of debt. FISCAL 1999 COMPARED TO FISCAL 1998 Net income for the year ended July 31, 1999 amounted to $1,163,822, or $.54 per share, compared to net income for the year ended July 31, 1998 of $1, 837,733, or $.86 per share. The 1998 figures include a pre-tax net recovery of real estate taxes of $1,218,600 (see below) and a pre-tax bad debt recovery of $52,749. The 1999 figures include a pre-tax bad debt recovery of $17,115. There was no comparable pre-tax net recovery of real estate taxes in the 1999 year. Revenues in the 1999 year decreased to $10,661,297 from $11,881,859 in the comparable 1998 fiscal year, primarily due to the pre-tax net recovery of prior years' real estate taxes of $1,218,600 in the 1998 year. The recovery of real estate taxes in the 1998 fiscal year of $1,218,600, net of legal expenses and credits to tenants in accordance with the terms of their leases, represents prior years' real estate taxes from the City of New York and the Town of Fishkill, New York. Real estate operating expenses in the 1999 year decreased to $5,312,787 from $5,416,292 in the comparable 1998 year primarily due to a decrease in real estate taxes, fuel, vault charges, insurance, maintenance, water and sewer costs and leasing commissions, partially offset by an increase in payroll and licenses and permits costs. Administrative and general expenses in the 1999 year increased to $2,119,558 from $2,076,614 in the comparable 1998 year primarily due to an increase in payroll, pension and medical costs, partially offset by a decrease in insurance and legal and professional costs. Depreciation and amortization expenses in the 1999 year decreased to $1,002,733 from $1,011,318 in the 1998 year. Interest expense exceeded investment income by $405,512 in fiscal 1999 and by $542,651 in the comparable 1998 year. The decrease was primarily due to the elimination of the loan payable to a securities broker and scheduled repayments of debt. The pre-tax bad debt recovery in the amount of $17,115 in the 1999 year and $52,749 in the 1998 year relates to prior years' bad debt write-offs from McCrory and Jamesway. 17 ================================================================================ 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, capital and debt service requirements. The Company's cash and cash equivalents amounted to $1,529,082 at July 31, 2000. CASH FLOWS FROM INVESTING ACTIVITIES: Capital Expenditures: The Company had expenditures of approximately $808,893 for the fiscal year ended July 31, 2000 for renovations at its Jamaica, New York building, of which $246,342 was to renovate11,200 square feet of additional space for an existing tenant. The Company anticipates that the renovation will cost approximately $1,000,000 and is anticipated to be completed during November, 2000. The Company had expenditures of $505,589 for renovations at its Brooklyn, New York building for the fiscal year ended July 31, 2000. The Company constructed a new lobby at this location to enable the Company to attract tenants to the facility. The cost of the new lobby was $683,633. Work on the lobby commenced in April, 1999 and was completed July, 2000. As of July 31, 2000, the Company had expended a total of $660,433 for the lobby. The Company had expenditures of $225,421 for the fiscal year ended July 31, 2000 for the installation of heating, ventilating and air conditioning equipment at its Fishkill, New York building, which work was completed in November, 1999. CASH FLOWS FROM FINANCING ACTIVITIES: The Company purchased 47,500 shares of its outstanding common stock in a private transaction for a total purchase price of $256,500 during the year ended July 31, 2000. The Company extended the mortgage on the Jowein building in Brooklyn, New York, effective April 1, 2000, for a period of five years, at the same interest rate. The mortgage loan is self-amortizing. YEAR 2000 (Y2K) COMPLIANCE: No material expenditures were required to resolve the Company's year 2000 issue. The Y2K issue concerned the inability of some technology-based information and operating systems to properly recognize and process date-sensitive information beyond December 31, 1999. The Company did not experience any operational problems with its computerized systems nor did the Company experience any problems with any of its tenants, financial institutions, contractors, utility companies or other service providers, relating to the year 2000 issue. 18 J.W. MAYS, INC. ================================================================================ QUARTERLY FINANCIAL INFORMATION (UNAUDITED) (dollars in thousands except per share data) Three months ended ------------------------------------------- Oct. 31, Jan. 31, Apr. 30, July 31, 1999 1999 1999 1999 -------- --------- -------- -------- Revenues ...................... $2,705 $2,727 $2,716 $2,717 Revenues less expenses ........ 462 331 449 521 Net income .................... 295 197 294 280 Net income per common share ... $ .14 $ .09 $ .14 $ .13 Three months ended ------------------------------------------- Oct. 31, Jan. 31, Apr. 30, July 31, 1999 1999 1999 1999 -------- --------- -------- -------- Revenues ...................... $2,680 $2,625 $2,667 $2,689 Revenues less expenses ........ 490 323 486 539 Net income .................... 321 177 326 340 Net income per common share ... $ .15 $ .08 $ .16 $ .15 Income per share is computed independently for each of the quarters presented, on the basis described inNote 1 to the Consolidated Financial Statements. COMMON STOCK AND DIVIDEND INFORMATION Effective November 8, 1999, the Company's common stock commenced trading on The Nasdaq SmallCap Market tier of The Nasdaq Stock Market under the Symbol: "Mays". Such shares were previously traded on The Nasdaq National Market. Following is the sales price range per share of J.W. Mays, Inc. common stock during the fiscal years ended July 31, 2000 and 1999: Sales Price ----------------- Three months ended High Low ------------------ ----- ----- OCTOBER 31, 1999 ............. 7.250 5.125 JANUARY 31, 2000 ............. 6.375 5.000 APRIL 30, 2000 ............... 6.125 5.000 JULY 31, 2000 ................ 7.000 4.500 October 31, 1998 ............. 12.500 6.875 January 31, 1999 ............. 8.500 6.531 April 30, 1999 ............... 9.000 3.250 July 31, 1999 ................ 8.000 4.688 The quotations were obtained for the respective periods from the National Association of Securities Dealers, Inc. There were no dividends declared in either of the two fiscal years. On September 22, 2000, the Company had approximately 3,500 shareholders of record. 19 J.W. MAYS, INC. ================================================================================ OFFICERS Lloyd J. Shulman Chairman of the Board, Chief Executive Officer and President and Chief Operating Officer Alex Slobodin Executive Vice President and Treasurer Mark Greenblatt Vice President and Assistant Treasurer Ward N. Lyke, Jr. Vice President--Management Information Services George Silva Vice President Salvatore Cappuzzo Secretary BOARD OF DIRECTORS Lance D. Myers 1,2,3,4 From March 6, 2000 with the law firm of Holland & Knight LLP; From February 1983 through March 5, 2000, with the law firm of Cullen and Dykman Dean L. Ryder 2,3,4 President, Putnam County National Bank Jack Schwartz 1,2,3,4 Private Consultant Lloyd J. Shulman 1,3,4 Chairman of the Board, Chief Executive Officer and President and Chief Operating Officer, J.W. Mays, Inc. Sylvia W. Shulman 3 Retired Lewis D. Siegel 2,3,4 First Vice President--Investments, Salomon Smith Barney Alex Slobodin 1,3 Executive Vice President and Treasurer, J.W. Mays, Inc. COMMITTEE ASSIGNMENTS KEY: 1 Member of Executive Committee 2 Member of Audit Committee 3 Member of Investment Advisory Committee 4 Member of Executive Compensation Committee FORM 10-K ANNUAL REPORT Copies of the Company's Form 10-K Annual Report to the Securities and Exchange Commission for the fiscal year ended July 31, 2000, will be furnished without charge to shareholders upon written request to: Secretary, J.W. Mays, Inc., 9 Bond Street, Brooklyn, New York 11201. 20 EX-27 3 0003.txt ARTICLE 5 FINANCIAL DATA SCHEDULE
5 This schedule contains summary financial information extracted from the contained Annual Report for the Year Ended July 31, 2000 and is qualified in its entirety by reference to such Annual Report. 1 12-MOS JUL-31-2000 AUG-01-1999 JUL-31-2000 1,529,082 41,685 215,872 0 0 3,005,043 53,111,870 23,557,465 42,484,544 1,986,262 0 2,178,297 0 0 29,624,698 42,484,544 0 10,864,565 0 0 8,780,081 0 618,314 1,762,938 697,000 1,065,938 0 0 0 1,065,938 0.50 0.50
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