FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended April 30, 1995
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ________________ to ________________
Commission file number 1-3647
J.W. Mays, Inc.
(Exact name of registrant as specified in its charter)
New York 11-1059070
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
9 Bond Street, Brooklyn, New York 11201-5805
(Address of principal executive offices) (Zip Code)
(Registrant's telephone number, including area code) 718-624-7400
Not Applicable
(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter
period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.
Yes X . No .
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.
Class Outstanding at June 9, 1995
Common Stock, $1 par value 2,136,397 shares
This report contains 17 pages.
<PAGE>
J. W. MAYS, INC.
INDEX
Page No.
Part I - Financial Information:
Consolidated Balance Sheet 3
Consolidated Statement of Operations
and Retained Earnings 4
Consolidated Statement of Cash Flows 5
Notes to Consolidated Financial Statements 6 - 12
Management's Discussion and Analysis of Results
of Operations and Financial Condition 13 - 14
Part II - Other Information 15 - 16
<PAGE>
<TABLE>
J. W. MAYS, INC.
CONSOLIDATED BALANCE SHEET
<CAPTION>
April 30, July 31,
ASSETS 1995 1994
--------------- ---------------
(Unaudited) (Audited)
<S> <C> <C>
Property and Equipment - net (Notes 4 and 6) $25,264,264 $25,141,848
------------- -------------
Current Assets:
Cash and cash equivalents 527,722 602,289
Marketable securities - other investments (Notes 3 and 8) 3,067,125 4,796,778
Receivables 181,284 373,003
Deferred income taxes 69,000 40,000
Prepaid expenses 752,336 1,162,619
Income taxes refundable - 22,005
------------- -------------
Total current assets 4,597,467 6,996,694
------------- -------------
Other Assets:
Deferred charges 2,279,222 2,221,671
Less accumulated amortization 920,829 786,180
------------- -------------
Net 1,358,393 1,435,491
Security deposits 449,938 258,136
Unbilled receivables (Note 9) 3,844,404 3,321,939
Receivables 77,500 135,898
Marketable securities - other investments (Notes 3 and 8) 164,256 -
------------- -------------
Total other assets 5,894,491 5,151,464
------------- -------------
TOTAL ASSETS $35,756,222 $37,290,006
============= =============
LIABILITIES AND SHAREHOLDERS ' EQUITY
Long-Term Debt:
Mortgages payable (Note 4) $5,123,116 $6,359,119
Other (Note 5) 669,646 672,038
------------- -------------
Total long-term debt 5,792,762 7,031,157
------------- -------------
Deferred Income Taxes 124,000 254,000
------------- -------------
Current Liabilities:
Payable to securities broker (Note 8) 523,464 1,123,513
Accounts payable 22,133 91,530
Payroll and other accrued liabilities 519,513 565,844
Income taxes payable 18,442 -
Other taxes payable 2,582 3,648
Current portion of long-term debt - mortgages payable (Note 4) 1,332,324 583,167
------------- -------------
Total current liabilities 2,418,458 2,367,702
------------- -------------
------------- -------------
Total liabilities 8,335,220 9,652,859
------------- -------------
Shareholders' Equity:
Common stock, par value $1 each share (shares - 5,000,000
authorized; 2,178,297 outstanding) 2,178,297 2,178,297
Additional paid in capital 3,346,245 3,346,245
Net unrealized loss on marketable equity securities (Note 3) (16,606) -
Retained earnings 22,197,306 22,396,845
------------- -------------
27,705,242 27,921,387
Less common stock held in treasury, at cost - 41,900
shares at April 30, 1995 and July 31, 1994 284,240 284,240
------------- -------------
Total shareholders' equity 27,421,002 27,637,147
------------- -------------
Commitments and Contingencies (Note 13)
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $35,756,222 $37,290,006
============= =============
See Notes to Consolidated Financial Statements.
- 3-
</TABLE>
<PAGE>
<TABLE>
J. W. MAYS, INC.
CONSOLIDATED STATEMENT OF OPERATIONS AND RETAINED EARNINGS
<CAPTION>
Three Months Ended Nine Months Ended
April 30, April 30,
-------------- --------------- -------------- ---------------
1995 1994 1995 1994
------------- ------------- ------------- -------------
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
Revenues
Rental income $2,096,545 $2,160,572 $6,276,449 $7,247,949
------------- ------------- ------------- -------------
Expenses
Real estate operating expenses 1,446,161 1,446,264 4,203,377 4,277,203
Administrative and general expenses 513,820 583,909 1,536,020 2,203,323
Depreciation and amortization 211,903 205,856 629,887 610,512
------------- ------------- ------------- -------------
Total expenses 2,171,884 2,236,029 6,369,284 7,091,038
------------- ------------- ------------- -------------
Income (loss) from operations before investment income,
interest expense and income taxes (75,339) (75,457) (92,835) 156,911
------------- ------------- ------------- -------------
Investment income and interest expense
Investment income 72,961 100,038 294,510 320,488
Interest expense (148,378) (150,779) (490,983) (436,853)
------------- ------------- ------------- -------------
(75,417) (50,741) (196,473) (116,365)
------------- ------------- ------------- -------------
Income (loss) from operations before income taxes (150,756) (126,198) (289,308) 40,546
Income taxes (40,000) (31,000) (68,000) 50,000
------------- ------------- ------------- -------------
(Loss) from operations before cumulative effect of changes in accounting
for certain investments in debt and equity securities and for incom (110,756) (95,198) (221,308) (9,454)
Cumulative effect of change in accounting for certain investments in
debt and equity securities - - 21,769 -
Cumulative effect of change in accounting for income taxes - - - (275,000)
------------- ------------- ------------- -------------
Net (loss) (110,756) (95,198) (199,539) (284,454)
Retained earnings, beginning of period 22,308,062 22,515,055 22,396,845 22,704,311
------------- ------------- ------------- -------------
Retained earnings, end of period $22,197,306 $22,419,857 $22,197,306 $22,419,857
============= ============= ============= =============
(Loss) per common share
(Loss) from operations $(.05) $(.04) $(.10) $-
Cumulative effect of change in accounting for certain investments in
debt and equity securities - - .01 -
Cumulative effect of change in accounting for income taxes - - - (.13)
------------- ------------- ------------- -------------
Net (loss) per common share $(.05) $(.04) $(.09) $(.13)
============= ============= ============= =============
Dividends per share $- $- $- $-
============= ============= ============= =============
Average common shares outstanding 2,136,397 2,136,397 2,136,397 2,137,792
============= ============= ============= =============
See Notes to Consolidated Financial Statements.
-4-
</TABLE>
<PAGE>
<TABLE>
J. W. MAYS, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
<CAPTION>
Nine Months Ended
April 30,
---------------- ---------------
1995 1994
------------- -------------
(Unaudited) (Unaudited)
<S> <C> <C>
Cash Flows From Operating Activities
(Loss) from operations $(221,308) $(9,454)
Cumulative effect of change in accounting
for certain investments in debt and equity securities 21,769 -
for income taxes - (275,000)
------------- -------------
Net (loss) (199,539) (284,454)
Adjustments to reconcile net (loss) to
net cash provided from (used in) operating activities:
Cumulative effect of change in accounting for income taxes - 275,000
Amortization of premium on marketable debt securities 1,962 4,027
Realized gain on marketable securities (11,998) -
Unrealized loss on marketable securities (23,270) -
Depreciation and amortization 629,887 610,512
Amortization of deferred expenses 157,044 195,350
Other assets - deferred expenses (79,946) (127,379)
- security deposits (191,802) (54,086)
- unbilled receivables (522,465) 176,232
Deferred income taxes (159,000) (45,000)
Changes in:
Receivables 250,117 (56,475)
Prepaid expenses 410,283 438,848
Income taxes refundable 22,005 (15,791)
Real estate taxes refundable - (66,593)
Accounts payable (69,397) (51,319)
Payroll and other accrued liabilities (46,331) 211,936
Income taxes payable 18,442 (29,898)
Other taxes payable (1,066) (973)
------------- -------------
Net cash provided by operating activities 184,926 1,179,937
------------- -------------
Cash Flows From Investing Activities
Capital expenditures (752,301) (1,023,566)
Marketable securities - other investments:
Receipts from sales or maturities 1,997,463 480,874
Payments for purchases (415,368) (556,314)
------------- -------------
Net cash provided (used) by investing activities 829,794 (1,099,006)
------------- -------------
Cash Flows From Financing Activities
Borrowings - securities broker 1,583,883 1,234,590
Payments - securities broker (2,183,932) (3,626,373)
Increase (reduction) of mortgage debt - short term 749,157 239,435
- long term (1,238,395) 2,302,135
Purchase of treasury stock - (83,300)
------------- -------------
Net cash provided (used) by financing activities (1,089,287) 66,487
------------- -------------
Net increase (decrease) in cash (74,567) 147,418
Cash and cash equivalents at beginning of period 602,289 888,281
------------- -------------
Cash and cash equivalents at end of period $527,722 $1,035,699
============= =============
See Notes to Consolidated Financial Statements.
-5-
</TABLE>
<PAGE>
J. W. MAYS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. The interim financial statements are prepared pursuant to the
requirements for reporting on Form 10-Q. The July 31, 1994 balance
sheet was derived from audited financial statements but does not
include all disclosures required by generally accepted accounting
principles. The interim financial statements and notes thereto should
be read in conjunction with the financial statements and notes
included in the Company's latest Annual Report on Form 10-K for the
year ended July 31, 1994. 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 current period results of operations are not necessarily
indicative of the results for the entire year ending July 31, 1995.
2. Loss per common share has been computed by dividing the net loss for
the periods by the weighted average number of shares of common stock
outstanding during the periods, adjusted for the purchase of treasury
stock. Shares used in computing the loss per common share were
2,136,397 in each of the three and nine months ended April 30, 1995,
and 2,136,397 and 2,137,792 in the comparable 1994 three and nine
month periods, respectively.
3. Marketable Securities - Other Investments:
In May 1993 the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 115, "Accounting for Certain
Investments in Debt and Equity Securities." The Company adopted the
provisions of the new standard for investments held as of or acquired
after August 1, 1994. In accordance with the Statement, prior period
financial statements have not been restated to reflect the change in
accounting principles. The cumulative effect as of August 1, 1994 of
adopting Statement No. 115 increased net income by $21,769 (net of
$10,000 in deferred income taxes), or $.01 per share. The opening
balance of shareholders' equity was decreased by $21,769 to reflect
the net unrealized holding gains on securities classified as available-
for-sale previously carried at amortized cost or lower of cost or
market. For the three months ended April 30, 1995, shareholders'
equity was increased by $72,525 (net of $37,500 in deferred income
taxes). For the nine months ended April 30, 1995, shareholders'
equity was increased by $5,163 (net of $1,500 in deferred income
taxes), for a total decrease of shareholders' equity of $16,606, as at
April 30, 1995.
<PAGE>
<TABLE>
Marketable Securities - Other Investments (continued)
<CAPTION>
April 30, 1995
-------------------------------------------------------------
Gross Gross
Unrealized Unrealized Fair
Cost Gains Losses Value
------------- ------------- ------------- -------------
<S <C> <C> <C> <C> <C>
Current
Available for sale
Equity securities - preferred stocks $2,536,791 $- $13,853 $2,522,938
Mutual funds 50,003 - 11,253 38,750
Certificate of deposit 25,463 - - 25,463
Corporate debt securities - - - -
------------- ------------- ------------- -------------
Total 2,612,257 - 25,106 2,587,151
Held to maturity
Corporate debt securities
due within one year 479,974 4,441 - 484,415
------------- ------------- ------------- -------------
Total current $3,092,231 $4,441 $25,106 $3,071,566 *
============= ============= ============= =============
Noncurrent
Held to maturity
Corporate debt securities
Due after one year through three years $67,030 $- $572 $66,458
Due after three years through five years 97,226 922 - 98,148
------------- ------------- ------------- -------------
Total noncurrent $164,256 $922 $572 $164,606 *
============= ============= ============= =============
Investment income consists of the following:
Three Months Ended Nine Months Ended
April 30, April 30,
------------------------------ ------------------------------
1995 1994 1995 1994
_________ _________ _________ _________
Interest income $18,049 $59,305 $115,305 $185,208
Dividend income 54,912 40,733 167,207 116,357
Gain on sale of marketable securities - - 11,998 18,923
------------- ------------- ------------- -------------
Total $72,961 $100,038 $294,510 $320,488
============= ============= ============= =============
* Gross unrealized gains and gross unrealized losses of corporate debt securities held to maturity
are not recognized in the financial statements until realized.
<PAGE>
Marketable Securities - Other Investments (continued)
<CAPTION>
July 31, 1994
------------------------------------------------------------
Gross Gross
Unrealized Unrealized Fair
Cost Gains Losses Value
------------- ------------- ------------- -------------
<S <C> <C> <C> <C> <C>
Current
Available for sale
Equity securities - preferred stocks $2,309,306 $- $58,836 $2,250,470
Mutual funds 50,003 - 11,253 38,750
Certificate of deposit 120,010 - - 120,010
Corporate debt securities 2,349,229 38,319 - 2,387,548
------------- ------------- ------------- -------------
Total 4,828,548 38,319 70,089 4,796,778
Held to maturity
Corporate debt securities
due within one year - - - -
------------- ------------- ------------- -------------
Total current $4,828,548 $38,319 $70,089 $4,796,778
============= ============= ============= =============
Noncurrent
Held to maturity
Corporate debt securities
Due after one year through three years $- $- $- $-
Due after three years through five years - - - -
------------- ------------- ------------- -------------
Total noncurrent $- $- $- $-
============= ============= ============= =============
<PAGE>
</TABLE>
4. Long-Term Debt - Mortgages Payable:
<TABLE>
<CAPTION>
April 30, 1995 July 31, 1994
------------------------------ ------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Current
Annual Final Due Due Due Due
Interest Payment Within After Within After
Rate Date One Year One Year One Year One Year
------- -------- ------------- ------------- ------------- -------------
Jowein Building, Brooklyn, N.Y. (a) 10% 3/31/96 $987,610 $- $48,480 $975,037
Fishkill, New York Property (b) 9% 11/01/99 97,131 2,695,754 299,802 2,769,413
Circleville, Ohio Property (c) 7% 9/30/02 240,814 2,216,590 228,532 2,398,767
Other 8 1/2% 5/01/01 6,769 210,772 6,353 215,902
------------- ------------- ------------- -------------
Total $1,332,324 $5,123,116 $583,167 $6,359,119
============= ============= ============= =============
</TABLE>
(a)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.
(b)On October 28, 1994, the existing first mortgage loan balance on the
Fishkill property was paid down by a $200,000 payment and the due date
of the mortgage loan was extended for a period of five years from
November 1, 1994. The annual interest rate was reduced from 10% to 9%
and the principal and interest payments are to be made in constant
monthly amounts based upon a fifteen year payout period.
(c)The mortgage loan, which is self-amortizing, matures September 30,
2002. The loan is payable at an annual interest rate of 7%. Under
the terms of the loan, constant monthly payments, including interest
and principal, commenced April 1, 1994 in the amount of $33,766.95,
until October 1, 1997 at which time the monthly payments of interest
and principal increase to $36,539.97.
<PAGE>
5. Long-Term Debt - Other:
Long-Term debt - other consists of the following:
<TABLE>
<CAPTION>
April 30, July 31,
1995 1994
--------------- ---------------
<S> <C> <C>
Deferred compensation * $520,000 $520,000
Lease security deposits ** 149,646 152,038
------------- -------------
Total $669,646 $672,038
============= =============
</TABLE>
* In fiscal 1964 the Company entered into a deferred compensation
agreement with its Chairman of the Board. This agreement, as
amended December 2, 1993, provides for the $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.
**Does not include two irrevocable letters of credit totaling
$370,000, provided by two tenants, as lease security deposits.
6. Property and Equipment - Net:
<TABLE>
<CAPTION>
April 30, July 31,
1995 1994
--------------- ---------------
<S> <C> <C>
Property and equipment - at cost:
Buildings and improvements $31,042,203 $30,326,774
Improvements to leased property 8,208,035 8,193,410
Fixtures and equipment 470,026 470,026
Land 4,008,835 4,008,835
Other 167,223 161,108
------------- -------------
43,896,322 43,160,153
Less accumulated depreciation and amortization 18,632,058 18,018,305
------------- -------------
Property and equipment - net $25,264,264 $25,141,848
============= =============
</TABLE>
<PAGE>
7. Income Taxes:
Effective August 1, 1993, the Company adopted Statement of Financial
Accounting Standards No. 109 "Accounting for Income Taxes" ("FAS
109"). The adoption of FAS 109 changes the Company's method of
accounting for income taxes from the deferred method previously used
under APB Opinion No. 11 to an asset and liability approach. This
approach requires the recognition of deferred tax assets and
liabilities with respect to the expected future tax consequences of
events that have been recognized in the Company's financial
statements and income tax returns. As permitted by FAS 109, the
Company has elected not to restate prior years' consolidated
financial statements. The adoption of FAS 109 resulted in a
cumulative adjustment which decreased the earnings for the fiscal
1994 first quarter and nine month period by $275,000.
8. Payable to Securities Broker:
The Company borrowed funds, payable on demand, from a securities
broker. The loan balance at April 30, 1995 in the amount of
$523,464, secured by the Company's marketable securities, accrues
interest, which at April 30, 1995, was at the annual rate of 8 1/4%.
9. Unbilled Receivables:
Unbilled receivables represent the excess of scheduled rental income
recognized on a straight-line basis over rental income as it becomes
receivable according to the provisions of the lease.
10. Employees' Retirement Plan:
The Company sponsors a noncontributory Money Purchase Plan covering
substantially all of its employees. Operations were charged $35,000
and $105,000 as contributions to the Plan for the three and nine
months ended April 30, 1995, respectively, and $32,488 and $93,125
as contributions to the Plan for the three and nine months ended
April 30, 1994, respectively.
<PAGE>
11. Cash Flow Information:
For purposes of reporting cash flows, the Company considers cash
equivalents to consist of short-term highly liquid investments with
maturities of three months or less, which are readily convertible
into cash.
<TABLE>
Supplemental disclosure:
<CAPTION>
Nine Months Ended
April 30,
------------------------------
1995 1994
________ ________
<S> <C> <C>
Interest paid $498,526 $463,920
Income taxes paid $52,053 $140,689
</TABLE>
12. Financial Instruments and Credit Risk Concentrations:
Financial instruments that are potentially subject to concentrations
of credit risk consist principally of marketable securities-other
investments, cash equivalents and receivables. Marketable
securities-other investments and cash equivalents are placed with
high credit quality financial institutions and instruments to
minimize risk.
The Company derives rental income from twenty-two tenants, of which
three tenants each accounted for more than 10% of rental income
during the three months ended April 30, 1995. The City of New York
is one of the three tenants and the other two tenants are 510 Fulton
Street Realty Association and its related 168-21 Jamaica Avenue
Store Corporation, the owners of which are long established in
business.
McCrory Stores Corporation ("McCrory"), which occupied space in the
Fulton Mall in downtown Brooklyn, New York, and whose lease extended
to April 29, 2010 and accounted for approximately 13% of the annual
rental income of the Company, filed for Chapter 11 bankruptcy
protection from creditors on February 26, 1992. McCrory made
application to the United States Bankruptcy Court for authorization
to reject the lease agreement, as amended, between the Company, as
landlord, and McCrory, as tenant, effective January 31, 1994. The
United States Bankruptcy Court authorized McCrory to reject such
lease agreement effective January 31, 1994 by order signed on
January 21, 1994. The Company has filed a Proof of Claim with the
United States Bankruptcy Court, Southern District of New York in the
total amount of $7,753,732 which amount includes $7,667,082 for
damages arising from the rejection of the lease and $86,650 for pre-
petition rental obligations. The Company has not included this
claim in its financial statements due to the uncertainty of the
ultimate court determined amount. McCrory has not as yet filed a
Plan of Reorganization.
<PAGE>
Jamesway Corporation, which occupies retail space in the Fishkill,
New York property and accounts for approximately 6% of the annual
rental income of the Company, filed for Chapter 11 bankruptcy
protection from creditors on July 19, 1993. On December 22, 1993,
conditioned upon Jamesway not rejecting the lease, the Company
granted Jamesway a $250,000 cumulative reduction of the fixed rent
for the period between February 1, 1994 and January 31, 1997. On
December 8, 1994, as an additional inducement for Jamesway to assume
the lease, the lease was further modified by reducing the original
expiration date of the lease from January 31, 2009 to January 31,
2005, granting Jamesway a four-year extension period to expire
January 31, 2009 at an increased rental during such extension period
and requiring the payment of the amount of $26,210.66 to cure its
monetary default. On December 29, 1994 an order was signed by the
Judge of the United States Bankruptcy Court, Southern District of
New York approving the assumption of the modified lease by Jamesway
and ordering Jamesway to cure its monetary default in the amount of
$26,210.66 by paying such amount in cash within ten (10) days from
the entry of the Order. The amount has been paid. Jamesway emerged
from bankruptcy on January 28, 1995. Of the $250,000 cumulative
reduction in the fixed rent, Jamesway applied $75,000 through July
31, 1994, $100,000 from August 1, 1994 through April 30, 1995 and
the balance of $75,000 will be applied through January 31, 1997.
The Company in 1991 changed its method of recognizing rental income
revenues under lease arrangements to comply with the provisions of
Statement of Financial Accounting Standards No. 13, "Accounting for
Leases", and since 1991 includes scheduled minimum lease payments in
income on a straight-line basis. Consequently, of the above
$250,000 cumulative reduction in the fixed rent, $53,191.59 has been
reflected as a reduction of rental income through July 31, 1994,
$23,022.46 will be reflected for the fiscal year ending July 31,
1995 and the balance of $173,785.95 will be reflected as a reduction
of rental income thereafter.
The lease with IBM, a tenant in Fishkill, New York, expired on March
31, 1994. The IBM lease previously accounted for approximately 8%
of the annual rental income of the Company.
13. Commitments and Contingencies:
There are various lawsuits and claims pending against the Company.
It is the opinion of management that the resolution of these matters
will not have a material adverse effect on the Company's Financial
Statements.
<PAGE> J. W. MAYS, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS
AND FINANCIAL CONDITION
Results of operations:
Three Months Ended April 30, 1995 Compared to the Three Months Ended
April 30, 1994:
Operations for the three months ended April 30, 1995 resulted in an
after tax net loss of $110,756, or $.05 per share, compared to an
after tax net loss in the previous year's comparable quarter of
$95,198, or $.04 per share.
Rental income in the current three months decreased to $2,096,546
from $2,160,572 in the 1994 three months, primarily due to the loss
of two tenants and the concession of rent for another tenant (see
Note 12 to Consolidated Financial Statements), partially offset by
rental income from a new tenant.
Real estate operating expenses were virtually identical in the 1995
and 1994 periods.
Administrative and general expenses decreased to $513,820 from
$583,909 principally due to a reduction of legal and professional
expenses and prior retail related expenses.
Depreciation and amortization expense in the current three months
increased to $211,903 from $205,856 in the three months ended April
30, 1994 because of additional improvements to property.
Interest expense exceeded investment income by $75,417 in the
current quarter and by $50,741 in the 1994 quarter, primarily due to
the increased interest on the broker loan discussed in Note 8 to
Consolidated Financial Statements.
Nine Months Ended April 30, 1995 Compared to the Nine Months
Ended April 30, 1994:
Operations for the nine months ended April 30, 1995 resulted in an
after tax net loss of $221,308, or $.10 per share, compared to after
tax net loss of $9,454, after the write off of the bad debt
amounting to $622,023, discussed below, in the 1994 nine month
period.
The excess of the scheduled rental income of McCrory, recognized on
a straight line basis over rental income reported through January
31, 1994, the effective date of McCrory's rejection of its lease,
amounted to $622,023 and such amount was written off as a bad debt
and reported as an administrative expense.
In the nine months ended April 30, 1995, the Company reported an
overall net loss in the amount of $199,539, or $.09 per share, after
the cumulative effect (an increase of income) of a change in
accounting for certain investments in debt and equity securities, in
the amount of $21,769, or $.01 per share. There was no comparable
item in the 1994 nine month period. The overall net loss for the
1994 nine month period amounted to $284,454, or $.13 per share,
after a charge for the cumulative effect of a change in accounting
for income taxes of $275,000, or $.13 per share. There was no
comparable item in the 1995 nine month period.
Rental income in the current nine months decreased to $6,276,449
from $7,247,949 in the 1994 nine months primarily due to the loss of
two tenants and the concession of rent for another tenant (see Note
12 to Consolidated Financial Statements), partially offset by rental
income from a new tenant.
Real estate operating expenses decreased to $4,203,377 in the
current nine months from $4,277,203 in the 1994 nine months
principally due to decreased real estate taxes, maintenance costs,
and fuel, partially offset by an increase in insurance expense and
electricity.
Administrative and general expenses decreased to $1,536,020 in the
current nine months from $2,203,323 in the 1994 nine month period,
principally due to the recording of the bad debt in 1994 discussed
above, and a reduction of legal and professional expenses.
Depreciation expense increased to $629,887 from $610,512 because of
additional improvements to property.
Interest expense exceeded interest income in the amount of $196,473
in the current nine month period and by $116,365 in the nine months
ended April 30, 1994 primarily due to the increased interest on the
broker loan discussed in Note 8 to Consolidated Financial
Statements.
Liquidity and Capital Resources:
The Company has been operating as a real estate enterprise since the
discontinuance of the retail department store segment of its
operations on January 3, 1989.
The Company had working capital of $2,179,009 with a ratio of
current assets to current liabilities of 1.9 to 1 at April 30,
1995. The Company's working capital decreased during the three
month period from January 31, 1995 to April 30, 1995 in the amount
of approximately $1,100,000, principally due to the classification
as a current liability, at April 30, 1995, of the balance due on a
mortgage on the Jowein Building in the amount of $987,610, which
mortgage matures March 31, 1996. (See Note 4 (a) to Consolidated
Financial Statements). The Company is negotiating for a renewal of
the mortgage with the mortgagee. Management considers current
working capital and borrowing capabilities adequate to cover the
Company's planned operating and capital requirements.
The leasing of space in the Jowein Building (See Part II - Other
Information, Item 5) will provide additional working capital for the
Company.
<PAGE>
Part II - Other Information
Item 5 - Other Information
(a) The Company has entered into an Agreement of Lease (the
"Lease"), dated June 8, 1995, pursuant to which approximately
26,000 square feet of space in the Jowein Building located in
the Fulton Mall in downtown Brooklyn, New York have been leased
to a chain store tenant for retail space.
The term of the Lease is for a period of fourteen years and six
months and is anticipated to commence on or about November 1,
1995, but commencement may occur prior thereto. The fixed rent
aggregates approximately $2,675,000 in the initial five-year
period of the Lease, $3,076,250 for the next five-year period
and $3,183,919 for the remaining four years and six month
period. In addition, the Lease provides that the tenant pay
its proportionate share of certain items, including real estate
taxes and operating expenses.
(b) The Company has entered into an Agreement of Lease (the
"Lease"), dated April 19, 1995, pursuant to which approximately
47,000 square feet of space in the Company's Jamaica, New York
property have been leased to a chain store tenant for retail
space. Of the 47,000 square feet, 20,500 square feet is to be
surrendered by a present tenant whose lease, including a five-
year option period, expires August 31, 2010. The term of the
Lease of the new tenant is anticipated to commence on or about
November 1, 1995, but such commencement date may occur either
earlier or later than such date. (See Note 12 to Consolidated
Financial Statements).
The term of the Lease is for ten years, with six options of
five years each. The fixed rent for the initial ten-year
period amounts to $4,250,000, and for the thirty-year renewal
period, approximately $21,000,000 if all options are renewed.
In addition, the Lease provides that the tenant pay its
proportionate share of certain items, including real estate
taxes and operating expenses.
(c) At the Board of Directors' meeting held May 24, 1995, Mr. Max
L. Shulman, Chairman and Chief Executive Officer of the
Company, vacated the position of Chief Executive Officer of the
Company, effective June 1, 1995. Mr. Max L. Shulman was
elected to the position of Co-Chairman of the Board of
Directors along with his son, Lloyd J. Shulman, and will
continue as a director and as an employee of the Company.
Mr. Lloyd J. Shulman, President and Chief Operating Officer of
the Company, at the same directors' meeting, effective June 1,
1995, was elected to the position of Co-Chairman of the Board
of Directors and also assumed the position of Chief Executive
Officer to fill the vacancy created by Mr. Max L. Shulman. Mr.
Lloyd J. Shulman will continue as President and Chief Operating
Officer of the Company.
<PAGE>
Item 6 - Exhibits and Reports on Form 8-K
(a) List of Exhibits:
Sequentially
Exhibit Numbered
Number Exhibit Page
(2) Plan of acquisition, reorganization, arrangement,
liquidation or succession. N/A
(4) Instruments defining the rights of security holders,
including indentures. N/A
(10) Material contracts. N/A
(11) Statement re computation of per share earnings. N/A
(15) Letter re unaudited interim financial information. N/A
(18) Letter re change in accounting principles. N/A
(19) Report furnished to security holders. N/A
(22) Published report regarding matters submitted to
vote of security holders. N/A
(24) Power of attorney. N/A
(27) Financial Data Schedule. N/A
(99) Additional exhibits. N/A
(b) Reports on Form 8-K - No report on Form 8-K was
required to be filed by the Registrant during the three
months ended April 30, 1995.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.
J.W. MAYS, Inc.
(Registrant)
Date June 9, 1995 Lloyd J. Shulman
Lloyd J. Shulman, Co-Chairman
Date June 9, 1995 Alex Slobodin
Alex Slobodin, Exec. Vice-President
(Principal Financial Officer)
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted
from the third quarter 10-Q and is qualified in its entirety
by reference to such 10-Q.
</LEGEND>
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> Jul-31-1995
<PERIOD-START> Feb-01-1995
<PERIOD-END> Apr-30-1995
<CASH> 527,722
<SECURITIES> 3,067,125
<RECEIVABLES> 181,284
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 4,597,467
<PP&E> 43,896,322
<DEPRECIATION> 18,632,058
<TOTAL-ASSETS> 35,756,222
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<BONDS> 0
<COMMON> 2,178,297
0
0
<OTHER-SE> 25,242,705
<TOTAL-LIABILITY-AND-EQUITY> 35,756,222
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<INCOME-PRETAX> (150,756)
<INCOME-TAX> (40,000)
<INCOME-CONTINUING> (110,756)
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<NET-INCOME> (110,756)
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