FORM 10-Q
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
For the quarterly period ended April 30, 2013 | |
[ ] 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 incorporation or organization) | (I.R.S. Employer Identification No.) |
9 Bond Street, Brooklyn, New York | 11201-5805 |
(Address of principal executive offices) | (Zip Code) |
(Registrant's telephone number, including area code) 718-624-7400
Not Applicable
(Former name, former address and former fiscal year, if
changed since last report)
Indicate by check mark whether the
registrant (1) has filed all reports required to be filed by Section 13 or 15(d)
of the Securities Exchange Act of 1934 during the preceding 12 months (or for
such shorter period that the registrant was required to file such reports), and
(2) has been subject to such filing requirements for the past 90
days.
Yes X
No ____.
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes X No ____ .
Indicate by check mark whether the
registrant is a large accelerated filer, an accelerated filer, a non-accelerated
filer, or a smaller reporting company. See the definitions of large accelerated
filer, accelerated filer and smaller reporting company in Rule 12b-2 of the
Exchange Act.
Large accelerated filer ____
Accelerated filer ____ Non-accelerated filer ____ Smaller reporting
company
X .
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ____ No X .
Indicate the number of shares outstanding of the issuer's common stock, as of the latest practicable date.
Class | Outstanding at June 5, 2013 |
Common Stock, $1 par value | 2,015,780 shares |
This report contains 21 pages. |
-1-
J. W. MAYS, INC.
INDEX
Page No. | |||
Part I - Financial Information: | |||
Item 1. Financial Statements | |||
Condensed Consolidated Balance Sheets April 30, 2013 (unaudited) | |||
and July 31, 2012 | 3 | ||
Condensed Consolidated Statements of Income and Retained Earnings | |||
Three and nine months ended April 30, 2013 and 2012 (unaudited) | 4 | ||
Condensed Consolidated Statements of Comprehensive Income | |||
Three and nine months ended April 30, 2013 and 2012 (unaudited) | 5 | ||
Condensed Consolidated Statements of Cash Flows | |||
Nine months ended April 30, 2013 and 2012 (unaudited) | 6 | ||
Notes to Condensed Consolidated Financial Statements | 7 - 12 | ||
Item 2. Management's Discussion and Analysis of Results | |||
of Operations and Financial Condition | 13 - 16 | ||
Item 3. Quantitative and Qualitative Disclosures About Market Risk | 16 | ||
Item 4. Controls and Procedures | 16 | ||
Part II - Other Information | |||
Item 1A. Risk Factors | 17 | ||
Item 6. Exhibits and Reports on Form 8-K | 17 | ||
Signatures | 18 | ||
Exhibit 31 Certifications Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | |||
(31.1) - Chief Executive Officer | 19 | ||
(31.2) - Chief Financial Officer | 20 | ||
Exhibit 32 Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | |||
18 U.S.C. Section 1350 | 21 |
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Part 1 - Financial Information
Item
1 - Financial Statements
J. W. MAYS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
April 30 | July 31 | ||||
ASSETS | 2013 | 2012 | |||
(Unaudited) | (Audited) | ||||
Property and Equipment - Net (Notes 5 and 6) | $ | 44,677,092 | $ | 44,259,379 | |
Current Assets: | |||||
Cash and cash equivalents (Note 4) | 2,231,478 | 1,340,203 | |||
Marketable securities (Notes 3 and 4) | 125,512 | 226,397 | |||
Receivables (Note 4) | 211,523 | 276,585 | |||
Income taxes refundable | 281,073 | | |||
Deferred income taxes | 637,000 | 599,000 | |||
Prepaid expenses | 610,813 | 1,220,333 | |||
Security deposits | 224,317 | 217,022 | |||
Total current assets | 4,321,716 | 3,879,540 | |||
Other Assets: | |||||
Deferred charges | 4,231,247 | 3,594,846 | |||
Less: accumulated amortization | 2,203,452 | 1,888,642 | |||
Net | 2,027,795 | 1,706,204 | |||
Receivables (Note 4) | 90,000 | 120,000 | |||
Security deposits | 915,428 | 989,873 | |||
Unbilled receivables (Note 8) | 2,170,401 | 2,214,540 | |||
Marketable securities (Notes 3 and 4) | 2,420,010 | 2,215,209 | |||
Total other assets | 7,623,634 | 7,245,826 | |||
TOTAL ASSETS | $ | 56,622,442 | $ | 55,384,745 | |
LIABILITIES AND SHAREHOLDERS' EQUITY | |||||
Long-Term Debt: | |||||
Mortgages payable (Note 5) | $ | 5,465,314 | $ | 5,591,597 | |
Note payable - related party (Note 7) | | 1,000,000 | |||
Security deposits payable | 598,449 | 743,894 | |||
Payroll and other accrued liabilities | 94,683 | 28,457 | |||
Total long-term debt | 6,158,446 | 7,363,948 | |||
Deferred Income Taxes | 3,517,000 | 3,282,000 | |||
Current Liabilities: | |||||
Accounts payable | 54,886 | 85,083 | |||
Payroll and other accrued liabilities | 2,155,010 | 1,483,944 | |||
Income taxes payable | | 79,362 | |||
Other taxes payable | 10,770 | 4,287 | |||
Current portion of long-term debt (Note 5) | 167,292 | 158,662 | |||
Note payable - related party (Note 7) | 1,000,000 | | |||
Current portion of security deposits payable | 224,317 | 217,022 | |||
Total current liabilities | 3,612,275 | 2,028,360 | |||
TOTAL LIABILITIES | 13,287,721 | 12,674,308 | |||
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 - net of deferred taxes of | |||||
$159,000 at April 30, 2013 and $110,000 at July 31, 2012 | 194,918 | 133,477 | |||
Retained earnings | 38,903,113 | 38,340,270 | |||
44,622,573 | 43,998,289 | ||||
Less common stock held in treasury, at cost - 162,517 | |||||
shares at April 30, 2013 and at July 31, 2012 (Note 11) | 1,287,852 | 1,287,852 | |||
Total shareholders' equity | 43,334,721 | 42,710,437 | |||
Contingencies (Note 12) | |||||
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ | 56,622,442 | $ | 55,384,745 |
See Notes to Condensed Consolidated Financial Statements.
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J. W. MAYS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND RETAINED EARNINGS
Three Months Ended | Nine Months Ended | ||||||||||||||
April 30 | April 30 | ||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||
(Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | ||||||||||||
Revenues | |||||||||||||||
Rental income (Notes 4 and 8) | $ | 3,704,426 | $ | 4,185,661 | $ | 12,004,447 | $ | 12,277,435 | |||||||
Expenses | |||||||||||||||
Real estate operating expenses | 2,154,463 | 1,918,185 | 6,607,728 | 6,042,225 | |||||||||||
Administrative and general expenses | 876,370 | 902,911 | 2,673,644 | 2,788,877 | |||||||||||
Depreciation and amortization (Note 6) | 404,479 | 395,827 | 1,208,221 | 1,175,961 | |||||||||||
Loss on disposition of property and equipment | | 4,215 | 316,021 | 4,215 | |||||||||||
Total expenses | 3,435,312 | 3,221,138 | 10,805,614 | 10,011,278 | |||||||||||
Income from operations before investment income, | |||||||||||||||
interest expense and income taxes | 269,114 | 964,523 | 1,198,833 | 2,266,157 | |||||||||||
Investment income and interest expense: | |||||||||||||||
Investment income (Note 3) | 12,094 | 4,959 | 69,291 | 23,176 | |||||||||||
Interest expense (Notes 5, 7 and 10) | (99,171 | ) | (120,323 | ) | (323,281 | ) | (410,252 | ) | |||||||
(87,077 | ) | (115,364 | ) | (253,990 | ) | (387,076 | ) | ||||||||
Income from operations before income taxes | 182,037 | 849,159 | 944,843 | 1,879,081 | |||||||||||
Income taxes provided | 109,000 | 709,000 | 382,000 | 1,053,000 | |||||||||||
Net income | 73,037 | 140,159 | 562,843 | 826,081 | |||||||||||
Retained earnings, beginning of period | 38,830,076 | 37,755,839 | 38,340,270 | 37,069,917 | |||||||||||
Retained earnings, end of period | $ | 38,903,113 | $ | 37,895,998 | $ | 38,903,113 | $ | 37,895,998 | |||||||
Income per common share (Note 2) | $ | .04 | $ | .07 | $ | .28 | $ | .41 | |||||||
Dividends per share | $ | | $ | | $ | | $ | | |||||||
Average common shares outstanding | 2,015,780 | 2,015,780 | 2,015,780 | 2,015,780 |
See Notes to Condensed Consolidated Financial Statements.
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J. W. MAYS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Three Months Ended | Nine Months Ended | ||||||||||
April 30 | April 30 | ||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||
(Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | ||||||||
Net income | $ | 73,037 | $ | 140,159 | $ | 562,843 | $ | 826,081 | |||
Other comprehensive income, net of taxes | |||||||||||
Unrealized gain on available-for-sale securities, | |||||||||||
net of taxes of $19,000 and $40,000 for the | |||||||||||
three months ended April 30, 2013 and 2012, | |||||||||||
respectively, and $49,000 and $50,000 for the nine months | |||||||||||
ended April 30, 2013 and 2012, respectively. | 23,412 | 2,909 | 61,441 | 19,859 | |||||||
Comprehensive income | $ | 96,449 | $ | 143,068 | $ | 624,284 | $ | 845,940 |
See Notes to Condensed Consolidated Financial Statements.
-5-
J. W. MAYS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Nine Months Ended | |||||||
April 30 | |||||||
2013 | 2012 | ||||||
(Unaudited) | (Unaudited) | ||||||
Cash Flows From Operating Activities: | |||||||
Net income | $ | 562,843 | $ | 826,081 | |||
Adjustments to reconcile net income to | |||||||
net cash provided by operating activities: | |||||||
Depreciation and amortization | 1,208,221 | 1,175,961 | |||||
Amortization of deferred charges | 314,810 | 260,431 | |||||
Realized loss on sale of marketable securities | 3,322 | 16,732 | |||||
Loss on disposition of property and equipment | 316,021 | 4,215 | |||||
Other assets - unbilled receivables | (196,119 | ) | (460,368 | ) | |||
- unbilled receivables - bad debts | 240,258 | 5,103 | |||||
- deferred charges | (636,401 | ) | (137,261 | ) | |||
Deferred income taxes | 148,000 | 690,000 | |||||
Changes in: | |||||||
Receivables | 95,062 | (401,141 | ) | ||||
Income taxes refundable | (281,073 | ) | 245,605 | ||||
Prepaid expenses | 609,520 | 631,519 | |||||
Accounts payable | (30,197 | ) | (101,107 | ) | |||
Payroll and other accrued liabilities | 737,292 | 338,486 | |||||
Income taxes payable | (79,362 | ) | | ||||
Other taxes payable | 6,483 | 5,593 | |||||
Cash provided by operating activities | 3,018,680 | 3,099,849 | |||||
Cash Flows From Investing Activities: | |||||||
Capital expenditures | (1,941,955 | ) | (1,075,150 | ) | |||
Security deposits | 67,150 | 56,404 | |||||
Marketable securities: | |||||||
Receipts from sales or maturities | 548,818 | 503,361 | |||||
Payments for purchases | (545,615 | ) | (999,210 | ) | |||
Cash (used) by investing activities | (1,871,602 | ) | (1,514,595 | ) | |||
Cash Flows From Financing Activities: | |||||||
(Decrease) - security deposits | (138,150 | ) | (29,544 | ) | |||
Mortgage and other debt payments | (117,653 | ) | (3,308,024 | ) | |||
Cash (used) by financing activities | (255,803 | ) | (3,337,568 | ) | |||
Increase (decrease) in cash and cash equivalents | 891,275 | (1,752,314 | ) | ||||
Cash and cash equivalents at beginning of period | 1,340,203 | 2,656,354 | |||||
Cash and cash equivalents at end of period | $ | 2,231,478 | $ | 904,040 |
See Notes to Condensed Consolidated Financial Statements.
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J. W. MAYS, INC.
NOTES TO CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
1. | Accounting Records and Use of Estimates: | |
The accounting records are maintained in accordance with accounting principles generally accepted in the United States of America (GAAP). The preparation of the Companys financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements, the disclosure of contingent assets and liabilities, and the reported amounts of revenues and expenses during the reporting period. The estimates that we make include allowance for doubtful accounts, depreciation and amortization, income tax assets and liabilities, fair value of marketable securities and revenue recognition. Estimates are based on historical experience where applicable or other assumptions that management believes are reasonable under the circumstances. Due to the inherent uncertainty involved in making estimates, actual results may differ from those estimates under different assumptions or conditions. | ||
The interim financial statements are prepared pursuant to the requirements for reporting on Form 10-Q. The July 31, 2012 balance sheet was derived from audited financial statements but does not include all disclosures required by GAAP. The interim financial statements and notes thereto should be read in conjunction with the financial statements and notes included in the Company's latest Form 10-K Annual Report for the fiscal year ended July 31, 2012. In the opinion of management, the interim financial statements reflect all adjustments of a normal recurring nature necessary for a fair statement of the results for interim periods. The results of operations for the current period are not necessarily indicative of the results for the entire fiscal year ending July 31, 2013. | ||
The computation of the annual expected effective tax rate at each interim period requires certain estimates and assumptions including, but not limited to, the expected operating income for the year and future periods, projections of the proportion of income (or loss), and permanent and temporary differences. The accounting estimates used to compute the provision for income taxes may change as new events occur, more experience is acquired, or as additional information is obtained. To the extent that the estimated annual effective tax rate changes during a quarter, the effect of the change on prior quarters is included in tax expense for the current quarter. | ||
Prior to April 30, 2012, the Company historically calculated New York State and New York City taxes based on capital, as such, the taxes were considered franchise taxes and were not included when calculating deferred taxes. Effective April 30, 2012, management assumes future taxes for New York State and New York City will be calculated based on income. This change in management's assumption relating to operating income in future periods for state and city deferred tax calculations resulted in a charge to deferred tax expense of $389,000 for the period ended April 30, 2012. | ||
2. | Income Per Share of Common Stock: | |
Income per share has been computed by dividing the net income for the periods by the weighted average number of shares of common stock outstanding during the periods, adjusted for the purchase of treasury stock. Shares used in computing income per share were 2,015,780 for the nine months ended April 30, 2013 and April 30, 2012. |
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3. | 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 measurements using quoted prices in active markets for identical assets or liabilities 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. The Company reviews marketable securities for impairment whenever circumstances and situations change such that there is an indication that the carrying amounts may not be recovered. The Company did not classify any securities as trading during the nine months ended April 30, 2013 and April 30, 2012. The Company also did not classify any securities as trading at July 31, 2012. | ||
The Company adopted Accounting Standards Certification (ASC) 820, Fair Value Measurements and Disclosures in 2011. ASC 820 establishes a fair value hierarchy that prioritizes the valuation techniques and creates the following three broad levels, with Level 1 valuation being the highest priority: |
Level 1 valuation inputs are quoted market prices in active markets for identical assets or liabilities that are accessible at the measurement date (e.g., equity securities traded on the New York Stock Exchange).
Level 2 valuation inputs are from other than quoted market prices included in Level 1 that are observable for the asset or liability, either directly or indirectly (e.g., quoted market prices of similar assets or liabilities in active markets, or quoted market prices for identical or similar assets or liabilities in markets that are not active).
Level 3 valuation inputs are unobservable (e.g., an entitys own data) and should be used to measure fair value to the extent that observable inputs are not available.
In accordance with the provisions of Fair Value Measurements, the following are the Company's financial assets presented at fair value at April 30, 2013 and July 31, 2012.
Fair value measurements at reporting date using | ||||||||||||||||||||||||
Quoted prices | Quoted prices | |||||||||||||||||||||||
in active | Significant | in active | Significant | |||||||||||||||||||||
markets for | other | Significant | markets for | other | Significant | |||||||||||||||||||
identical | observable | unobservable | identical | observable | unobservable | |||||||||||||||||||
assets/liabilities | inputs | inputs | assets/liabilities | inputs | inputs | |||||||||||||||||||
April 30 | July 31 | |||||||||||||||||||||||
Description | 2013 | (Level 1) | (Level 2) | (Level 3) | 2012 | (Level 1) | (Level 2) | (Level 3) | ||||||||||||||||
Assets: | ||||||||||||||||||||||||
Marketable securities - | ||||||||||||||||||||||||
available-for-sale | $ | 2,420,010 | $ | 2,420,010 | $ | | $ | | $ | 2,215,209 | $ | 2,215,209 | $ | | $ | | ||||||||
held-to-maturity | 76,419 | 76,419 | | | 178,176 | 178,176 | | | ||||||||||||||||
$ | 2,496,429 | $ | 2,496,429 | $ | | $ | | $ | 2,393,385 | $ | 2,393,385 | $ | | $ | |
-8-
As of April 30, 2013 and July 31, 2012, the Company's marketable securities were classified as follows:
April 30, 2013 | July 31, 2012 | ||||||||||||||||||||||
Gross | Gross | Gross | Gross | ||||||||||||||||||||
Unrealized | Unrealized | Fair | Unrealized | Unrealized | Fair | ||||||||||||||||||
Cost | Gains | Losses | Value | Cost | Gains | Losses | Value | ||||||||||||||||
Current: | |||||||||||||||||||||||
Held-to-maturity: | |||||||||||||||||||||||
Certificate of deposit | $ | 50,307 | $ | | $ | | $ | 50,307 | $ | 50,246 | $ | | $ | | $ | 50,246 | |||||||
Corporate debt | |||||||||||||||||||||||
securities | 75,205 | 1,214 | | 76,419 | 176,151 | 2,025 | | 178,176 | |||||||||||||||
$ | 125,512 | $ | 1,214 | $ | | $ | 126,726 | $ | 226,397 | $ | 2,025 | $ | | $ | 228,422 | ||||||||
Noncurrent: | |||||||||||||||||||||||
Available-for-sale: | |||||||||||||||||||||||
Mutual funds | $ | 1,554,354 | $ | 227,765 | $ | 113 | $ | 1,782,006 | $ | 1,255,982 | $ | 123,203 | $ | | $ | 1,379,185 | |||||||
Equity securities | 511,738 | 128,708 | 2,442 | 638,004 | 715,750 | 135,813 | 15,539 | 836,024 | |||||||||||||||
$ | 2,066,092 | $ | 356,473 | $ | 2,555 | $ | 2,420,010 | $ | 1,971,732 | $ | 259,016 | $ | 15,539 | $ | 2,215,209 |
The Company's debt and equity securities, gross unrealized losses and fair value, aggregated by investment category and length of time that the investment securities have been in a continuous unrealized loss position, at April 30, 2013, are as follows:
Less Than | More Than | |||||||
Fair Value | 12 Months | 12 Months | ||||||
Equity securities | $ | 59,757 | $ | 2,442 | $ | | ||
Mutual funds | 259,133 | 113 | | |||||
Total | $ | 318,890 | $ | 2,555 | $ | |
Investment income consists of the following:
Three Months Ended | Nine Months Ended | ||||||||||||||
April 30 | April 30 | ||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||
Loss on sale of marketable securities | $ | (2,805 | ) | $ | (2,500 | ) | $ | (3,322 | ) | $ | (16,732 | ) | |||
Interest income | 4,337 | (1,031 | ) | 9,229 | 7,321 | ||||||||||
Dividend income | 10,562 | 8,490 | 63,384 | 32,587 | |||||||||||
Total | $ | 12,094 | $ | 4,959 | $ | 69,291 | $ | 23,176 |
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4. | Financial Instruments and Credit Risk Concentrations: | |
Financial instruments that are potentially subject to concentrations of credit risk consist principally of marketable securities, cash and cash equivalents and receivables. Marketable securities and cash and cash equivalents are placed with multiple financial institutions and multiple instruments to minimize risk. No assurance can be made that such financial institutions and instruments will minimize all such risk. | ||
The Company derives rental income from fifty tenants, of which one tenant accounted for 20.02% and another tenant accounted for 15.99% of rental income during the nine months ended April 30, 2013. No other tenant accounted for more than 10% of rental income during the same period. | ||
The Company has one irrevocable Letter of Credit totaling $230,000 at April 30, 2013 and July 31, 2012 provided by one tenant as a security deposit. | ||
5. | Long-Term Debt Mortgages: |
April 30, 2013 | July 31, 2012 | ||||||||||||||||
Current | |||||||||||||||||
Annual | Final | Due | Due | Due | Due | ||||||||||||
Interest | Payment | Within | After | Within | After | ||||||||||||
Rate | Date | One Year | One Year | One Year | One Year | ||||||||||||
Fishkill, New York property | (a,b) | 6.98% | 2/18/15 | $ | 47,478 | $ | 1,551,056 | $ | 45,028 | $ | 1,586,896 | ||||||
Bond St. building, Brooklyn, NY | (b) | 6.98% | 2/18/15 | 119,814 | 3,914,258 | 113,634 | 4,004,701 | ||||||||||
Total | $ | 167,292 | $ | 5,465,314 | $ | 158,662 | $ | 5,591,597 |
(a) | On August 19, 2004, the Company extended the then existing loan for an additional forty-two (42) months, with an option to convert the loan to a seven (7) year permanent mortgage loan. (See Note 5(b) below). The Company in February 2008 converted the loan to a seven (7) year permanent mortgage loan. The interest rate on conversion was 6.98%. | |
(b) | The Company, on August 19, 2004, closed a loan with a bank for a $12,000,000 multiple draw term loan. This loan financed seventy-five (75%) percent of the cost of capital improvements for an existing lease to a tenant and capital improvements for future tenant leases at the Companys Brooklyn, New York (Bond Street building) and Fishkill, New York properties through February 2008. The loan also financed $850,000 towards the construction of two new elevators at the Companys Brooklyn, New York property (Bond Street building). The loan consists of: a) a permanent, first mortgage loan to refinance an existing first mortgage loan affecting the Fishkill, New York property, which matured on July 1, 2004 (the First Permanent Loan)(see Note 5(a)), b) a permanent subordinate mortgage loan in the amount of $1,870,000 (the Second Permanent Loan), and c) multiple, successively subordinate loans in the amount $8,295,274 (Subordinate Building Loans). As of August 19, 2004, the Company refinanced the existing mortgage on the Companys Fishkill, New York property, which balance was $1,834,726 and took down an additional $2,820,000 for capital improvements for two tenants at the Companys Bond Street building in Brooklyn, New York. In fiscal years 2006, 2007 and 2008, the Company drew down additional amounts totaling $916,670, on its multiple draw term loan to finance tenant improvements and brokerage commissions for the leasing of 13,026 square feet for office use at the Companys Bond Street building in Brooklyn, New York. The Company, in February 2008, converted the loan to a seven (7) year permanent mortgage loan. The interest rate on conversion was 6.98%. Since the loan has been converted to a permanent mortgage loan, the balance of the financing on this loan was for the new elevators at the Companys Bond Street building in Brooklyn, New York in the amount of $850,000 referred to above. The $850,000 was drawn down in fiscal 2010. The outstanding balance of the loan totaling $5,318,490 will become due and payable on February 18, 2015. |
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6. | Property and Equipment at cost: |
April 30 | July 31 | ||||||
2013 | 2012 | ||||||
Property: | |||||||
Buildings and improvements | $ | 68,909,135 | $ | 68,160,718 | |||
Improvements to leased property | 1,478,012 | 1,478,012 | |||||
Land | 6,067,805 | 6,067,805 | |||||
Construction in progress | 748,905 | 72,467 | |||||
77,203,857 | 75,779,002 | ||||||
Less accumulated depreciation | 32,668,704 | 31,620,831 | |||||
Property - net | 44,535,153 | 44,158,171 | |||||
Fixtures and equipment and other: | |||||||
Fixtures and equipment | 176,877 | 167,687 | |||||
Other fixed assets | 241,293 | 219,385 | |||||
418,170 | 387,072 | ||||||
Less accumulated depreciation | 276,231 | 285,864 | |||||
Fixtures and equipment and other - net | 141,939 | 101,208 | |||||
Property and equipment - net | $ | 44,677,092 | $ | 44,259,379 |
7. | Note Payable: | |
On December 15, 2004, the Company borrowed $1,000,000 from a former director of the Company, who at the time was also a greater than 10% beneficial owner of the outstanding common stock of the Company. The term of the loan was for a period of three (3) years maturing on December 15, 2007 and was extended for an additional three (3) years maturing on December 15, 2010. The Company, on November 11, 2010, further extended the note for an additional three (3) years maturing on December 15, 2013, at an interest rate of 5.00% per annum. The constant quarterly payment of interest is $12,500. The loan is unsecured. The note is prepayable in whole or in part at any time without penalty. The interest paid was $37,500 for each of the nine months ended April 30, 2013 and April 30, 2012, respectively. The lender/former director passed away on November 17, 2012. | ||
8. | Unbilled Receivables and Rental Income: | |
Unbilled receivables represent the excess of scheduled rental income recognized on a straight-line basis over rental income as it becomes receivable according to the provisions of each lease. Adjustments are made to the unbilled receivables when terms of leases are changed. For the nine months ended April 30, 2013, the Company recorded a bad debt of approximately $240,000 due to the early termination of a lease. | ||
9. | Employees' Retirement Plan: | |
The Company contributes to a union sponsored multi-employer pension plan covering its union employees. The Company contributions to the Pension Plan were $10,000 and $24,778 for the three and nine months ended April 30, 2013, respectively, and $6,042 and $22,675 for the three and nine months ended April 30, 2012, respectively. The Company also contributes to union sponsored health benefit plans. | ||
The Company sponsors a noncontributory Money Purchase Plan covering substantially all of its non-union employees. Operations were charged $80,396 and $262,499 as contributions to the Plan for the three and nine months ended April 30, 2013, respectively, and $87,460 and $259,968 as contributions to the Plan for the three and nine months ended April 30, 2012, respectively. |
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10. | Cash Flow Information: | |
For purposes of reporting cash flows, the Company considers cash equivalents to consist of short-term highly liquid investments with maturities of three (3) months or less, which are readily convertible into cash. |
Supplemental disclosure: | Nine Months Ended | ||||||
April 30 | |||||||
2013 | 2012 | ||||||
Interest paid, net of capitalized interest of $15,217 (2013) | |||||||
and $1,269 (2012) | $ | 325,080 | $ | 429,680 | |||
Income taxes paid | $ | 594,382 | $ | 117,395 |
11. | Capitalization: | |
The Company is capitalized entirely through common stock with identical voting rights and rights to liquidation. Treasury stock is recorded at cost and consists of 162,517 shares at April 30, 2013 and at July 31, 2012. | ||
12. | Contingencies: | |
There are various lawsuits and claims pending against the Company. It is the opinion of management that the resolution of these matters will not have a material adverse effect on the Company's Condensed Consolidated Financial Statements. | ||
If the Company sells, transfers, disposes of, or demolishes 25 Elm Place, Brooklyn, New York, then the Company may be liable to create a condominium unit for the loading dock. The necessity of creating the condominium unit and the cost of such condominium unit cannot be determined at this time. |
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Item 2.
J. W. MAYS, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF RESULTS OF OPERATIONS
AND FINANCIAL CONDITION
Managements Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with our financial statements and related notes thereto contained in this report. In this discussion, the words Company, we, our and us refer to J.W. Mays, Inc. and subsidiaries.
Forward Looking Statements:
The following can be interpreted as including forward looking statements under the Private Securities Litigation Reform Act of 1995. The words outlook, intend, plans, efforts, anticipates, believes, expects or words of similar import typically identify such statements. Various important factors that could cause actual results to differ materially from those expressed in the forward-looking statements are identified under the heading Cautionary Statement Regarding Forward-Looking Statements below. Our actual results may vary significantly from the results contemplated by these forward-looking statements based on a number of factors including, but not limited to, availability of labor, marketing success, competitive conditions and the change in economic conditions of the various markets we serve.
Critical Accounting Policies and Estimates:
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues, expenses and related disclosure of contingent assets and liabilities. We believe the critical accounting policies in Note 1 to the Condensed Consolidated Financial Statements affect our more significant judgments and estimates used in the preparation of our financial statements. Actual results may differ from these estimates under different assumptions and conditions. (See Note 1 on page 7 to the Condensed Consolidated Financial Statements herein and Note 1 on pages 9 through 11 to the Consolidated Financial Statements in the Annual Report to Shareholders for the fiscal year ended July 31, 2012).
Results of Operations:
Three months Ended April 30, 2013 Compared to the Three months Ended April 30, 2012:
In the three months ended April 30, 2013, the Company reported net income of $73,037, or $.04 per share. In the comparable three months ended April 30, 2012, the Company reported net income of $140,159, or $.07 per share.
Revenues in the current three months decreased to $3,704,426 from $4,185,661 in the comparable 2012 three months primarily due to two office tenants vacating the Company's Jowein building in Brooklyn, New York, partially offset by one new office tenant at the Company's Nine Bond Street, Brooklyn, New York building and one new office tenant at the Company's Jowein building in Brooklyn, New York.
Real estate operating expenses in the current three months increased to $2,154,463 from $1,918,185 in the comparable 2012 three months primarily due to increases in payroll costs, real estate taxes and utility costs.
Administrative and general expenses in the current three months decreased to $876,370 from $902,911 in the comparable 2012 three months primarily due to decreases in legal and professional costs, partially offset by increases in payroll costs.
Depreciation and amortization expense in the current three months increased to $404,479 from $395,827 in the comparable 2012 three months, primarily due to improvements to the Nine Bond Street, Brooklyn, New York building and the Jowein building in Brooklyn, New York.
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The current three months did not have a loss on disposition of property and equipment compared to $4,215 in the 2012 three month period.
Interest expense in the current three months exceeded investment income by $87,077 and by $115,364 in the comparable 2012 three months. The decrease in the excess of interest expense over investment income was due primarily to scheduled repayments of debt.
Nine months Ended April 30, 2013 Compared to the Nine months Ended April 30, 2012:
In the nine months ended April 30, 2013, the Company reported net income of $562,843, or $.28 per share. In the comparable nine months ended April 30, 2012, the Company reported net income of $826,081, or $.41 per share.
Revenues in the current nine months decreased to $12,004,447 from $12,277,435 in the comparable 2012 nine months primarily due to two office tenants vacating the Company's Jowein building in Brooklyn, New York, partially offset by one new office tenant at the Company's Nine Bond Street, Brooklyn, New York building and one new office tenant at the Company's Jowein building in Brooklyn, New York.
Real estate operating expenses in the current nine months increased to $6,607,728 from $6,042,225 in the comparable 2012 nine months primarily due to increases in maintenance costs, real estate taxes, payroll costs, utility costs, leasing commissions and a bad debt expense in the amount of $240,258 from a retail tenant that vacated the Nine Bond Street, Brooklyn, New York building, partially offset by decreases in licenses and permits costs.
Administrative and general expenses in the current nine months decreased to $2,673,644 from $2,788,877 in the comparable 2012 nine months primarily due to decreases in legal and professional costs.
Depreciation and amortization expense in the current nine months increased to $1,208,221 from $1,175,961 in the comparable 2012 nine months, primarily due to improvements to the Nine Bond Street, Brooklyn, New York building and the Jowein building in Brooklyn, New York.
The current nine months had a loss on disposition of property and equipment in the amount of $316,021, compared to $4,215 in the 2012 nine month period.
Interest expense in the current nine months exceeded investment income by $253,990 and by $387,076 in the comparable 2012 nine months. The decrease in the excess of interest expense over investment income was due primarily to scheduled repayments of debt.
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 Companys planned operating and capital requirements. The Companys cash and cash equivalents amounted to $2,231,478 at April 30, 2013.
A tenant who occupied 56,547 square feet of office space at the Company's Jowein building in Brooklyn, New York vacated the premises in January 2013. The annual loss in rental income to the Company will be approximately $1,357,000. The Company, in April 2013, entered into a lease agreement for 41,385 square feet of the total vacated. The rental income from this lease will more than offset the rental income lost from the previous tenant on a per square foot comparison. The cost of construction and brokerage commission to be paid by the Company will be approximately $775,000, which will be financed through operating funds. The project was completed in May 2013 and rent is expected to commence in July 2013.
A tenant who occupied 22,000 square feet of office space at the Company's Jowein building in Brooklyn, New York vacated the premises in January 2013. The annual loss in rental income to the Company will be approximately $546,000. The Company, in January 2013, entered into a lease agreement to replace this tenant. The rental income from this lease will more than offset the rental income lost from the previous tenant. The cost of construction and brokerage commissions to be paid by the Company was $1,108,600, which was financed through operating funds. The project was completed in April 2013 at which time rent and occupancy commenced.
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In January 2013, a tenant who occupies 7,401 square feet of retail space at the Company's Nine Bond Street, Brooklyn, New York property informed the Company that it will vacate the premises. The Company is currently in litigation to evict this tenant from the premises. The annual loss in rental income to the Company will be approximately $430,000. The Company expensed unbilled receivables in the amount of $240,258 in the nine months ended April 30, 2013. The Company is utilizing brokers to actively seek tenants to occupy the space when this tenant vacates the premises.
In February 2013, the Company entered into a lease agreement with a tenant for 10,000 square feet for office space at the Company's Nine Bond Street, Brooklyn, New York building. The cost of construction and brokerage commissions to the Company will be approximately $1,300,000. The Company will finance these costs through operating funds. Occupancy is anticipated to commence in late 2013 and rent is anticipated to commence in early 2014. The Company will also have to relocate part of its general offices to accommodate the tenant at a cost of approximately $400,000. Both of these projects will be financed through operating funds.
Cash Flows From Operating Activities:
Deferred Charges: The Company had expenditures for brokerage commissions for the nine months ended April 30, 2013 in the amount of $611,994, relating to two tenants at its Jowein building in Brooklyn, New York and a tenant at its Nine Bond Street, Brooklyn, New York building.
Payroll and Other Accrued Liabilities: The Company incurred $611,994 for brokerage commissions in order to lease space at the Company's Jowein building in Brooklyn, New York and Nine Bond Street, Brooklyn, New York building for the nine months ended April 30, 2013. The balance due as of April 30, 2013 is $446,453.
Cash Flows From Investing Activities:
The Company had expenditures of $168,873 in the nine months ended April 30, 2013 for work on the elevators in the Brooklyn, New York and Jamaica, New York buildings. The cost of the project will be approximately $300,000 and is anticipated to be completed in the fall of 2013.
The Company had expenditures of $849,438 for the nine months ended April 30, 2013 for the renovation of 22,000 square feet for office space for a tenant at the Company's Jowein building in Brooklyn, New York. The project was completed in April 2013.
The Company had expenditures of $267,443 in the nine months ended April 30, 2013 for the renovation of 10,000 square feet for office space for a tenant and the partial relocation of the Company's general offices at the Company's Nine Bond Street, Brooklyn, New York building. The cost of the project is approximately $1,150,000 and is anticipated to be completed in November 2013.
The Company had expenditures of $265,000 for the nine months ended April 30, 2013 for the renovation of 41,385 square feet for office space for a tenant at the Company's Jowein building in Brooklyn, New York. The cost of the project was $665,000 and was completed in May 2013.
-15-
Cautionary Statement Regarding Forward-Looking Statements:
This section, Managements Discussion and Analysis of Financial Condition and Results of Operations, other sections of this Report on Form 10-Q and other reports and verbal statements made by our representatives from time to time may contain forward-looking statements that are based on our assumptions, expectations and projections about us and the real estate industry. These include statements regarding our expectations about revenues, our liquidity, our expenses and our continued growth, among others. Such forward-looking statements by their nature involve a degree of risk and uncertainty. We caution that a variety of factors, including but not limited to the factors listed below, could cause business conditions and our results to differ materially from what is contained in forward-looking statements:
Other factors and assumptions not identified above were also involved in the formation of these forward-looking statements and the failure of such other assumptions to be realized, as well as other factors, may also cause actual results to differ materially from those projected. Most of these factors are difficult to predict accurately and are generally beyond our control. You should consider the areas of risk described above in connection with any forward-looking statements that may be made by us.
We undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise. You are advised, however, to review any additional disclosures we make in proxy statements, Quarterly Reports on Form 10-Q, Annual Reports on Form 10-K and Current Reports on Form 8-K filed with the United States Securities and Exchange Commission.
Item 3. Quantitative and Qualitative Disclosures About Market Risk:
The Company uses fixed-rate debt to finance its capital requirements. These transactions do not expose the Company to market risk related to changes in interest rates. The Company does not use derivative financial instruments. At April 30, 2013, the Company had fixed-rate debt of $6,632,606.
Item 4. Controls and Procedures:
The Companys management reviewed the Companys internal controls and procedures and the effectiveness of these controls. As of April 30, 2013, the Company carried out an evaluation, under the supervision and with the participation of the Companys management, including its Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Companys disclosure controls and procedures pursuant to Rules 13a-14(c) and 15d-14(c) of the Securities Exchange Act of 1934. Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the Companys disclosure controls and procedures are effective in timely alerting them to material information relating to the Company required to be included in its periodic SEC filings.
There was no change in the Companys internal controls over financial reporting or in other factors during the Companys last fiscal quarter that materially affected, or are reasonably likely to materially affect, the Companys internal controls over financial reporting. There were no significant deficiencies or material weaknesses, and therefore there were no corrective actions taken.
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Part II - Other Information
Item 1A. Risk Factors | ||
There have been no changes to our risk factors from those disclosed in our Annual Report on Form 10-K for our fiscal year ended July 31, 2012. | ||
Item 6. Exhibits and Reports on Form 8-K | ||
(a) |
List of Exhibits: |
Sequentially | |||||||||
Exhibit | Numbered | ||||||||
Number | Exhibit | Page | |||||||
(3) | Articles of Incorporation and Bylaws | N/A | |||||||
(10) | Material contracts | N/A | |||||||
(11) | Statement re computation of per share earnings | N/A | |||||||
(12) | Statement re computation of ratios | N/A | |||||||
(14) | Code of ethics | N/A | |||||||
(15) | Letter re unaudited interim financial information | N/A | |||||||
(18) | Letter re change in accounting principles | N/A | |||||||
(19) | Report furnished to security holders | N/A | |||||||
(31) | Additional exhibits--Certifications Pursuant to Section 302 of the Sarbanes- | ||||||||
Oxley Act of 2002. | |||||||||
(31.1) Chief Executive Officer | 19 | ||||||||
(31.2) Chief Financial Officer | 20 | ||||||||
(32) | Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, | ||||||||
18 U.S.C. Section 1350 | 21 | ||||||||
EX-101.INS | XBRL INSTANCE DOCUMENT | ||||||||
EX-101.SCH | XBRL TAXONOMY EXTENSION SCHEMA | ||||||||
EX-101.PRE | XBRL TAXONOMY EXTENSION PRESENTATION LINKBASE | ||||||||
EX-101.LAB | XBRL TAXONOMY EXTENSION LABEL LINKBASE | ||||||||
EX-101.CAL | XBRL TAXONOMY EXTENSION CALCULATION LINKBASE | ||||||||
EX-101.DEF | XBRL TAXONOMY EXTENSION DEFINITION LINKBASE |
(b) |
Reports on Form 8-K One report on Form 8-K were filed by the registrant during the three months ended April 30, 2013. |
Items reported: | |
The Company reported its financial results for the three months and six months ended January 31, 2013. | |
Date of report filed - March 7, 2013. |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
J.W. MAYS, Inc. | |||
(Registrant) | |||
Date | June 5, 2013 | Lloyd J. Shulman | |
Lloyd J. Shulman | |||
President | |||
Chief Executive Officer | |||
Date | June 5, 2013 | Mark S. Greenblatt | |
Mark S. Greenblatt | |||
Vice President | |||
Chief Financial Officer |
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I, Lloyd J. Shulman, certify that:
1. I have reviewed this Quarterly Report on Form 10-Q of J.W. Mays, Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under my supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America; | |
(c) | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | |
(d) | Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; |
5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and | |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. | |
Date: | June 5, 2013 | ||
/s/ Lloyd J. Shulman | |||
Lloyd J. Shulman | |||
President | |||
Chief Executive Officer |
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I, Mark S. Greenblatt, certify that:
1. I have reviewed this Quarterly Report on Form 10-Q of J.W. Mays, Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under my supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America; | |
(c) | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | |
(d) | Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; |
5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and | |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. | |
Date: | June 5, 2013 | ||
/s/ Mark S. Greenblatt | |||
Mark S. Greenblatt | |||
Vice President | |||
Chief Financial Officer |
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In connection with the Quarterly Report of J.W. Mays, Inc. (the "Company") on Form 10-Q for the period ending April 30, 2013 as filed with the United States Securities and Exchange Commission (the "Report"), we, Lloyd J. Shulman and Mark S. Greenblatt, Chief Executive Officer and Chief Financial Officer, respectively, of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to our knowledge:
(1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and | |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. | |
Date: | June 5, 2013 | ||
/s/ Lloyd J. Shulman | |||
Lloyd J. Shulman | |||
Chief Executive Officer | |||
/s/ Mark S. Greenblatt | |||
Mark S. Greenblatt | |||
Chief Financial Officer |
A signed original of this written statement required by Section 906 has been provided to J.W. Mays, Inc. and will be retained by J.W. Mays, Inc. and furnished to the United States Securities and Exchange Commission or its staff upon request.
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Cash Flow Information
|
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Apr. 30, 2013
|
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Supplemental Cash Flow Elements [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cash Flow, Supplemental Disclosures [Text Block] |
|
CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND RETAINED EARNINGS (USD $)
|
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Apr. 30, 2013
|
Apr. 30, 2012
|
Apr. 30, 2013
|
Apr. 30, 2012
|
|
Revenues | ||||
Rental income (Notes 4 and 8) | $ 3,704,426 | $ 4,185,661 | $ 12,004,447 | $ 12,277,435 |
Expenses | ||||
Real estate operating expenses | 2,154,463 | 1,918,185 | 6,607,728 | 6,042,225 |
Administrative and general expenses | 876,370 | 902,911 | 2,673,644 | 2,788,877 |
Depreciation and amortization (Note 6) | 404,479 | 395,827 | 1,208,221 | 1,175,961 |
Loss on disposition of property and equipment | 0 | 4,215 | 316,021 | 4,215 |
Total expenses | 3,435,312 | 3,221,138 | 10,805,614 | 10,011,278 |
Income from operations before investment income, interest expense and income taxes | 269,114 | 964,523 | 1,198,833 | 2,266,157 |
Investment income and interest expense: | ||||
Investment income (Note 3) | 12,094 | 4,959 | 69,291 | 23,176 |
Interest expense (Notes 5, 7 and 10) | (99,171) | (120,323) | (323,281) | (410,252) |
Interest Income (Expense), Net | (87,077) | (115,364) | (253,990) | (387,076) |
Income from operations before income taxes | 182,037 | 849,159 | 944,843 | 1,879,081 |
Income taxes provided | 109,000 | 709,000 | 382,000 | 1,053,000 |
Net income | 73,037 | 140,159 | 562,843 | 826,081 |
Retained earnings, beginning of period | 38,830,076 | 37,755,839 | 38,340,270 | 37,069,917 |
Retained earnings, end of period | $ 38,903,113 | $ 37,895,998 | $ 38,903,113 | $ 37,895,998 |
Income per common share (Note 2) (in dollars per share) | $ 0.04 | $ 0.07 | $ 0.28 | $ 0.41 |
Dividends per share (in dollars per share) | $ 0 | $ 0 | $ 0 | $ 0 |
Average common shares outstanding (in shares) | 2,015,780 | 2,015,780 | 2,015,780 | 2,015,780 |
Marketable Securities
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Apr. 30, 2013
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Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Marketable Securities Disclosure [Text Block] |
Level 1 valuation inputs are quoted market prices in active markets for identical assets or liabilities that are accessible at the measurement date (e.g., equity securities traded on the New York Stock Exchange). Level 2 valuation inputs are from other than quoted market prices included in Level 1 that are observable for the asset or liability, either directly or indirectly (e.g., quoted market prices of similar assets or liabilities in active markets, or quoted market prices for identical or similar assets or liabilities in markets that are not active). Level 3 valuation inputs are unobservable (e.g., an entity’s own data) and should be used to measure fair value to the extent that observable inputs are not available. In accordance with the provisions of Fair Value Measurements, the following are the Company's financial assets presented at fair value at April 30, 2013 and July 31, 2012.
As of April 30, 2013 and July 31, 2012, the Company's marketable securities were classified as follows:
The Company's debt and equity securities, gross unrealized losses and fair value, aggregated by investment category and length of time that the investment securities have been in a continuous unrealized loss position, at April 30, 2013, are as follows:
Investment income consists of the following:
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Accounting Records and Use of Estimates (Details Textual) (USD $)
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12 Months Ended |
---|---|
Apr. 30, 2012
|
|
Deferred Income Tax Expense (Benefit) | $ 389,000 |
Capitalization
|
9 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|
Apr. 30, 2013
|
||||||||||
Capitalization Disclosure [Abstract] | ||||||||||
Capitalization Disclosure [Text Block] |
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Cash Flow Information (Details Textual) (USD $)
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9 Months Ended | |
---|---|---|
Apr. 30, 2013
|
Apr. 30, 2012
|
|
Interest Paid, Capitalized | $ 15,217 | $ 1,269 |
Marketable Securities (Details) (USD $)
|
Apr. 30, 2013
|
Jul. 31, 2012
|
---|---|---|
Assets: | ||
Marketable securities - available-for-sale | $ 2,420,010 | $ 2,215,209 |
Marketable securities - held-to-maturity | 76,419 | 178,176 |
Marketable securities - Total | 2,496,429 | 2,393,385 |
Fair Value, Inputs, Level 1 [Member]
|
||
Assets: | ||
Marketable securities - available-for-sale | 2,420,010 | 2,215,209 |
Marketable securities - held-to-maturity | 76,419 | 178,176 |
Marketable securities - Total | 2,496,429 | 2,393,385 |
Fair Value, Inputs, Level 2 [Member]
|
||
Assets: | ||
Marketable securities - available-for-sale | 0 | 0 |
Marketable securities - held-to-maturity | 0 | 0 |
Marketable securities - Total | 0 | 0 |
Fair Value, Inputs, Level 3 [Member]
|
||
Assets: | ||
Marketable securities - available-for-sale | 0 | 0 |
Marketable securities - held-to-maturity | 0 | 0 |
Marketable securities - Total | $ 0 | $ 0 |
Note Payable (Details Textual) (USD $)
|
9 Months Ended | 12 Months Ended | |
---|---|---|---|
Apr. 30, 2013
|
Apr. 30, 2012
|
Jul. 31, 2005
|
|
Proceeds from Related Party Debt | $ 1,000,000 | ||
Minimum Percentage Of Beneficial Owned Of Common Stock | 10.00% | ||
Interest Expense, Related Party | 37,500 | 37,500 | |
Notes Payable Maturing Dec 2013 [Member]
|
|||
Debt Instrument, Interest Rate, Stated Percentage | 5.00% | ||
Debt Instrument, Periodic Payment, Interest | $ 12,500 |
Long-Term Debt - Mortgages (Details) (USD $)
|
9 Months Ended | |||||||
---|---|---|---|---|---|---|---|---|
Apr. 30, 2013
|
Jul. 31, 2012
|
|||||||
Due Within One Year | $ 167,292 | $ 158,662 | ||||||
Due After One Year | 5,465,314 | 5,591,597 | ||||||
Fishkill, New York Property [Member]
|
||||||||
Due Within One Year | 47,478 | [1],[2] | 45,028 | [1],[2] | ||||
Due After One Year | 1,551,056 | [1],[2] | 1,586,896 | [1],[2] | ||||
Current Annual Interest Rate | 6.98% | [1],[2] | ||||||
Final Payment Date | Feb. 18, 2015 | [1],[2] | ||||||
Bond St. Building Brooklyn N Y [Member]
|
||||||||
Due Within One Year | 119,814 | [1] | 113,634 | [1] | ||||
Due After One Year | $ 3,914,258 | [1] | $ 4,004,701 | [1] | ||||
Current Annual Interest Rate | 6.98% | [1] | ||||||
Final Payment Date | Feb. 18, 2015 | [1] | ||||||
|
Income Per Share of Common Stock (Details Textual)
|
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Apr. 30, 2013
|
Apr. 30, 2012
|
Apr. 30, 2013
|
Apr. 30, 2012
|
|
Weighted Average Number Of Shares Outstanding, Basic (in shares) | 2,015,780 | 2,015,780 | 2,015,780 | 2,015,780 |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME [Parenthetical] (USD $)
|
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Apr. 30, 2013
|
Apr. 30, 2012
|
Apr. 30, 2013
|
Apr. 30, 2012
|
|
Unrealized gain on available-for-sale securities, tax | $ 19,000 | $ 40,000 | $ 49,000 | $ 50,000 |
Accounting Records and Use of Estimates
|
9 Months Ended | |||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Apr. 30, 2013
|
||||||||||||||||||||||||||||
Organization, Consolidation and Presentation Of Financial Statements [Abstract] | ||||||||||||||||||||||||||||
Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block] |
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Financial Instruments and Credit Risk Concentrations
|
9 Months Ended | |||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Apr. 30, 2013
|
||||||||||||||||||||||
Financial Instruments and Credit Risk Concentrations Disclosure [Abstract] | ||||||||||||||||||||||
Financial Instruments and Credit Risk Concentrations Disclosure [Text Block] |
|
Income Per Share of Common Stock
|
9 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|
Apr. 30, 2013
|
||||||||||
Earnings Per Share [Abstract] | ||||||||||
Earnings Per Share [Text Block] |
|
Marketable Securities (Details 2) (USD $)
|
Apr. 30, 2013
|
---|---|
Investment securities, Fair Value | $ 318,890 |
Investment securities, Less Than 12 Months | 2,555 |
Investment securities, More Than 12 Months | 0 |
Equity Securities [Member]
|
|
Investment securities, Fair Value | 59,757 |
Investment securities, Less Than 12 Months | 2,442 |
Investment securities, More Than 12 Months | 0 |
Mutual Fund [Member]
|
|
Investment securities, Fair Value | 259,133 |
Investment securities, Less Than 12 Months | 113 |
Investment securities, More Than 12 Months | $ 0 |
Long-Term Debt - Mortgages (Details Textual) (USD $)
|
12 Months Ended | 36 Months Ended | ||||||
---|---|---|---|---|---|---|---|---|
Apr. 30, 2013
|
Jul. 31, 2005
Fishkill, New York Property [Member]
|
Jul. 31, 2005
Bond St. Building Brooklyn N Y [Member]
|
Jul. 31, 2008
Bond St. Building Brooklyn N Y [Member]
sqft
|
Aug. 19, 2004
Bond St. Building Brooklyn N Y [Member]
|
Aug. 19, 2004
Construction Of Two New Elevators [Member]
Bond St. Building Brooklyn N Y [Member]
|
Aug. 19, 2004
Permanent Subordinate Mortgage [Member]
Bond St. Building Brooklyn N Y [Member]
|
Aug. 19, 2004
Multiple Successively Subordinate Loans [Member]
Bond St. Building Brooklyn N Y [Member]
|
|
Closed Bank Liabilities | $ 12,000,000 | |||||||
Debt Instrument, Convertible, Terms of Conversion Feature | On August 19, 2004, the Company extended the then existing loan for an additional forty-two (42) months, with an option to convert the loan to a seven (7) year permanent mortgage loan. (See Note 5(b) below). The Company in February 2008 converted the loan to a seven (7) year permanent mortgage loan. The interest rate on conversion was 6.98%. | |||||||
Percentage Of Cost Of Capital Improvements On Loan Financed | 75.00% | |||||||
Secured Debt | 850,000 | 1,870,000 | 8,295,274 | |||||
Long Term Debt Refinanced Amount | 1,834,726 | |||||||
Additional Mortgage Loans For Capital Improvements | 2,820,000 | 916,670 | ||||||
Secured Long-term Debt, Noncurrent | $ 5,318,490 | |||||||
Area of Land | 13,026 |
Cash Flow Information (Details) (USD $)
|
9 Months Ended | |
---|---|---|
Apr. 30, 2013
|
Apr. 30, 2012
|
|
Interest paid, net of capitalized interest of $15,217 (2013) and $1,269 (2012) | $ 325,080 | $ 429,680 |
Income taxes paid | $ 594,382 | $ 117,395 |