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, 1996
[ ] 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 11, 1996
Common Stock, $1 par value 2,136,397 shares
This report contains 16 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
<PAGE>
<TABLE>
J. W. MAYS, INC.
<CAPTION>
CONSOLIDATED BALANCE SHEET
April 30, July 31,
ASSETS 1996 1995
--------------------------------------------------------------- --------------- ---------------
(Unaudited) (Audited)
<S> <C> <C>
Property and Equipment - net (Notes 4 and 6) $26,004,182 $25,285,935
------------- -------------
Current Assets:
Cash and cash equivalents 363,341 490,315
Marketable securities - other investments (Notes 3 and 8) 2,738,805 2,799,712
Receivables 227,839 244,992
Deferred income taxes 55,400 27,000
Prepaid expenses 725,385 1,121,694
------------- -------------
Total current assets 4,110,770 4,683,713
------------- -------------
Other Assets:
Deferred charges 2,559,845 2,329,140
Less accumulated amortization 1,062,260 913,311
------------- -------------
Net 1,497,585 1,415,829
Security deposits 877,088 458,641
Unbilled receivables (Note 9) 4,060,487 4,026,435
Receivables 156,016 109,687
Marketable securities - other investments (Notes 3 and 8) 97,889 164,063
Deferred income taxes 128,900 -
------------- -------------
Total other assets 6,817,965 6,174,655
------------- -------------
TOTAL ASSETS $36,932,917 $36,144,303
============= =============
LIABILITIES AND SHAREHOLDERS' EQUITY
---------------------------------------------------------------
Long-Term Debt:
Mortgages payable (Note 4) $6,672,086 $5,954,306
Other (Note 5) 1,095,413 677,597
------------- -------------
Total long-term debt 7,767,499 6,631,903
------------- -------------
Deferred Income Taxes - 14,000
------------- -------------
Current Liabilities:
Payable to securities broker (Note 8) 841,800 1,225,100
Accounts payable 30,966 64,744
Payroll and other accrued liabilities 579,510 487,956
Income taxes payable 13,490 18,588
Other taxes payable 2,923 4,081
Current portion of long-term debt - mortgages payable (Note 4) 636,432 404,813
------------- -------------
Total current liabilities 2,105,121 2,205,282
------------- -------------
Total liabilities 9,872,620 8,851,185
------------- -------------
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 (Note 3) 27,176 28,010
Retained earnings 21,792,819 22,024,806
------------- -------------
27,344,537 27,577,358
Less common stock held in treasury, at cost - 41,900
shares at April 30, 1996 and July 31, 1995 284,240 284,240
------------- -------------
Total shareholders' equity 27,060,297 27,293,118
------------- -------------
Commitments and Contingencies (Note 14)
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $36,932,917 $36,144,303
============= =============
See Notes to Consolidated Financial Statements.
- 3-
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
J.W. MAYS, INC.
CONSOLIDATED STATEMENT OF OPERATIONS AND RETAINED EARNINGS
Three Months Ended Nine Months Ended
April 30, April 30,
-------------- -------------- -------------- ---------------
1996 1995 1996 1995
<S> <C> <C> <C> <C>
------------- ------------- ------------- -------------
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
Revenues
Rental income $2,429,902 $2,096,545 $6,924,337 $6,276,449
------------- ------------- ------------- -------------
Expenses
Real estate operating expenses 1,510,799 1,446,161 4,289,605 4,203,377
Administrative and general expenses 549,219 513,820 1,957,123 1,536,020
Depreciation and amortization 224,384 211,903 664,152 629,887
------------- ------------- ------------- -------------
Total expenses 2,284,402 2,171,884 6,910,880 6,369,284
------------- ------------- ------------- -------------
Income (loss) from operations before investment income,
interest expense and income taxes 145,500 (75,339) 13,457 (92,835)
------------- ------------- ------------- -------------
Investment income and interest expense
Investment income 61,392 72,961 186,558 294,510
Interest expense (171,359) (148,378) (511,602) (490,983)
------------- ------------- ------------- -------------
(109,967) (75,417) (325,044) (196,473)
------------- ------------- ------------- -------------
Income (loss) from operations before income taxes 35,533 (150,756) (311,587) (289,308)
Income taxes (benefit) 31,400 (40,000) (79,600) (68,000)
------------- ------------- ------------- -------------
Income (loss) from operations before cumulative effect of change in
accounting for certain investments in debt and equity securities 4,133 (110,756) (231,987) (221,308)
Cumulative effect of change in accounting for certain
investments in debt and equity securities - - - 21,769
------------- ------------- ------------- -------------
Net income (loss) 4,133 (110,756) (231,987) (199,539)
Retained earnings, beginning of period 21,788,686 22,308,062 22,024,806 22,396,845
------------- ------------- ------------- -------------
Retained earnings, end of period $21,792,819 $22,197,306 $21,792,819 $22,197,306
============= ============= ============= =============
Income (loss) per common share
Income (loss) from operations $- $(.05) $(.11) $(.10)
Cumulative effect of change in accounting for certain
investments in debt and equity securities - - - .01
------------- ------------- ------------- -------------
Net income (loss) per common share $- $(.05) $(.11) $(.09)
============= ============= ============= =============
Dividends per share $- $- $- $-
============= ============= ============= =============
Average common shares outstanding 2,136,397 2,136,397 2,136,397 2,136,397
============= ============= ============= =============
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,
----------------- ---------------
1996 1995
------------- -------------
(Unaudited) (Unaudited)
<S> <C> <C>
Cash Flows From Operating Activities
(Loss) from operations $(231,987) $(221,308)
Cumulative effect of change in accounting
for certain investments in debt and equity securities - 21,769
------------- -------------
Net (loss) (231,987) (199,539)
Adjustments to reconcile net (loss) to
net cash provided by (used in) operating activities:
Amortization of premium on marketable debt securities 530 1,962
Realized (loss) on marketable securities - (11,998)
Unrealized (loss) on marketable securities - (23,270)
Depreciation and amortization 664,152 629,887
Amortization of deferred expenses 185,656 157,044
Other assets - deferred expenses (267,412) (79,946)
- security deposits (418,447) (191,802)
- unbilled receivables (34,052) (522,465)
Deferred income taxes (170,800) (159,000)
Changes in:
Receivables (29,176) 250,117
Prepaid expenses 396,309 410,283
Income taxes refundable - 22,005
Accounts payable (33,778) (69,397)
Payroll and other accrued liabilities 91,554 (46,331)
Income taxes payable (5,098) 18,442
Other taxes payable (1,158) (1,066)
------------- -------------
Net cash provided by operating activities 146,293 184,926
------------- -------------
Cash Flows From Investing Activities
Capital expenditures (1,382,399) (752,301)
Marketable securities - other investments:
Receipts from sales or maturities 326,132 1,997,463
Payments for purchases (200,915) (415,368)
------------- -------------
Net cash provided by (used in) investing activities (1,257,182) 829,794
------------- -------------
Cash Flows From Financing Activities
Borrowings - securities broker 477,080 1,583,883
Payments - securities broker (860,380) (2,183,932)
Increase (reduction) of mortgage debt - short term 231,619 749,157
- long term 1,135,596 (1,238,395)
------------- -------------
Net cash provided by (used in) financing activities 983,915 (1,089,287)
------------- -------------
Net (decrease) in cash (126,974) (74,567)
Cash and cash equivalents at beginning of period 490,315 602,289
------------- -------------
Cash and cash equivalents at end of period $363,341 $527,722
============= =============
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, 1995 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, 1995. In the opinion of management, the interim
financial statements reflect all adjustments of a normal recurring
nature necessary for a fair statement of the results for interim
periods. The results of operations for the current period are not
necessarily indicative of the results for the entire year ending July
31, 1996.
2. Income (loss) per common share has been computed by dividing the net
income (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 income
(loss) per common share were 2,136,397 in each of the three and nine
months ended April 30, 1996 and 1995.
3. Marketable Securities - Other Investments:
Effective August 1, 1994, the Company adopted Statement of Financial
Accounting Standards No. 115, "Accounting for Certain Investments in
Debt and Equity Securities" ("FAS 115"). FAS 115 requires certain
securities to be categorized as either trading, available for sale or
held to maturity. Trading securities are carried at fair value with
unrealized gains and losses included in income. Available for sale
securities are carried at fair value with unrealized gains and losses
recorded as a separate component of shareholders' equity. Held to
maturity securities are carried at amortized cost. Dividends and
interest income are accrued as earned. The cumulative effect as of
August 1, 1994 of adopting Statement No. FAS 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 at August 1, 1994
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, 1996, shareholders' equity was decreased by $69,364 (net of
$35,500 in deferred income taxes). For the nine months ended April
30, 1996, shareholders' equity was decreased by $834 (net of $500 in
deferred income taxes). 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).
<TABLE>
Marketable Securities - Other Investments (continued)
<CAPTION>
As of April 30, 1996, the Company's marketable securities were classified as follows:
Gross Gross
Unrealized Unrealized Fair
Cost Gains Losses Value
------------- ------------- ------------- -------------
Current
<S <C> <C> <C> <C> <C>
Available for sale
Equity securities $2,605,808 $40,676 $- $2,646,484
Certificate of deposit 26,719 - - 26,719
------------- ------------- ------------- -------------
Total 2,632,527 40,676 - 2,673,203
Held to maturity
Corporate debt securities
due within one year 65,602 238 - 65,840
------------- ------------- ------------- -------------
Total current $2,698,129 $40,914 $- $2,739,043
============= ============= ============= =============
Noncurrent
Held to maturity
Corporate debt securities 97,889 4,267 - 102,156
------------- ------------- ------------- -------------
Total noncurrent $97,889 $4,267 $- $102,156
============= ============= ============= =============
Investment income consists of the following:
Three Months Ended Nine Months Ended
April 30, April 30,
------------------------------ ------------------------------
1996 1995 1996 1995
_________ _________ _________ _________
Interest income $7,914 $18,049 $28,533 $115,305
Dividend income 53,112 54,912 157,659 167,207
Gain on sale of marketable securities 366 - 366 11,998
------------- ------------- ------------- -------------
Total $61,392 $72,961 $186,558 $294,510
============= ============= ============= =============
-7-
</TABLE>
<PAGE>
4. Long-Term Debt:
<TABLE>
<CAPTION>
April 30, 1996 July 31, 1995
------------------------------ ------------------------------
<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
------- -------- ------------- ------------- ------------- -------------
Term - loan payable to bank (a) Variable 8/01/00 $182,292 $1,067,708 $- $-
Mortgages:
Jowein Building, Brooklyn, N.Y. (b) 7 3/8% 3/31/98 82,308 853,094 53,513 921,524
Fishkill, New York Property (c) 9% 11/01/99 106,243 2,589,511 99,333 2,670,079
Circleville, Ohio Property (d) 7% 9/30/02 258,222 1,958,368 245,053 2,153,714
Other 8 1/2% 5/01/01 7,367 203,405 6,914 208,989
------------- ------------- ------------- -------------
$636,432 $6,672,086 $404,813 $5,954,306
============= ============= ============= =============
</TABLE>
(a)On August 17, 1995 the Company entered into an agreement with a bank
wherein the bank approved a $1,500,000 loan facility for the Company
to use to fund building construction/renovation costs to accommodate
tenants under lease. The overall term of the facility is five years
with a one year line of credit, to be taken down as needed. The
initial twelve month period is to be on an interest only basis,
payable monthly, with the principal balance outstanding to be
converted to a four year fully amortizing term loan, payable with
monthly payments to be first applied to the payment of interest, and
second, to the payment of the principal indebtedness. The interest
rate for advances under the line and the term loan will be the bank's
prime rate of interest on a floating basis. The leases between the
Company and two of its tenants in the Brooklyn (Jowein Building)
renovated area have been assigned to the bank as collateral for the
loan. There is no prepayment penalty for early payoff of the loan.
The Company has taken down $1,250,000 as of the date of this report.
(b)Mortgage is held by an affiliated corporation owned by members,
including certain directors of the Company, of the family of the late
Joe Weinstein, former Chairman of the Board of Directors. Interest
and amortization of principal are paid quarterly. The mortgage was
due to mature on March 31, 1996. On September 6, 1995, the maturity
date of the mortgage was extended to March 31, 1998. The interest
rate of 10% continued until March 31, 1996 and from April 1, 1996 the
interest rate was established at the bank's prevailing rate as at
March 31, 1996 which was 7.375%. During the renewal period there will
be no change in the constant quarterly payments of interest and
principal in the amount of $37,263.
(c)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.
(d)The mortgage loan, which is self-amortizing, matures September 30,
2002. The loan is payable at an annual interest rate of 7%. Under
the terms of the loan, constant monthly payments, including interest
and principal, commenced April 1, 1994 in the amount of $33,767, until
October 1, 1997, at which time the monthly payments of interest and
principal increase to $36,540.
<PAGE>
5. Long-Term Debt - Other:
Long-Term debt - other consists of the following:
<TABLE>
<CAPTION>
April 30, July 31,
1996 1995
--------------- ---------------
<S> <C> <C>
Deferred compensation * $520,000 $520,000
Lease security deposits ** 575,413 157,597
------------- -------------
$1,095,413 $677,597
============= =============
</TABLE>
* In fiscal 1964 the Company entered into a deferred compensation
agreement with its then Chairman of the Board. This agreement, as
amended, 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
$110,000 at April 30, 1996 and three irrevocable letters of credit
totaling $410,000 at July 31, 1995, provided by two and three
tenants, respectively.
6. Property and Equipment - Net:
<TABLE>
<CAPTION>
April 30, July 31,
1996 1995
--------------- ---------------
<S> <C> <C>
Property and equipment - at cost:
Buildings and improvements $31,713,020 $30,867,736
Improvements to leased property 9,107,076 8,215,035
Fixtures and equipment 492,413 483,208
Land 4,008,835 4,008,835
Other 171,182 167,223
Construction in progress - 384,133
------------- -------------
45,492,526 44,126,170
Less accumulated depreciation and amortization 19,488,344 18,840,235
------------- -------------
$26,004,182 $25,285,935
============= =============
</TABLE>
7. Income Taxes:
Effective August 1, 1993, the Company adopted Statement of Financial
Accounting Standards No. 109 "Accounting for Income Taxes" ("FAS
109").
8. Payable to Securities Broker:
The Company borrowed funds, payable on demand, from a securities
broker. The loan balance at April 30, 1996 in the amount of
$841,800, secured by the Company's marketable securities, accrues
interest, which at April 30, 1996, was at the annual rate of 7.5%.
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 each 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, 1996, respectively, and $35,000 and $105,000
as contributions to the Plan for the three and nine months ended
April 30, 1995, respectively.
11. Cash Flow Information:
For purposes of reporting cash flows, the Company considers cash
equivalents to consist of short-term highly liquid investments with
maturities of three months or less, which are readily convertible
into cash.
<TABLE>
Supplemental disclosure:
<CAPTION>
Nine Months Ended
April 30,
--------------------------
1996 1995
--------------------------
<S> <C> <C>
Interest paid $517,204 $498,526
Income taxes paid $96,298 $52,053
</TABLE>
<PAGE>
12. Financial Accounting Standards No. 121:
In May 1995, the Financial Accounting Standards Board issued
Statement of Financial Standards No. 121 ("FAS 121"), "Accounting
for the Impairment of Long-Lived Assets and for Long-Lived Assets to
be Disposed Of", effective for fiscal years beginning after December
15, 1995. FAS 121 requires the recognition of an impairment loss
related to long-lived assets and certain identifiable intangibles
whenever events or changes in circumstances indicate that the
carrying amount of an asset may not be recoverable. The Company
believes that the adoption of the new accounting standard will not
have any effect on the consolidated financial statements.
13. 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-five tenants, of which
two tenants each accounted for more than 10% of rental income during
the nine months ended April 30, 1996. The City of New York is one
of the two tenants and the other tenant is 510 Fulton Street Realty
Associates, the owners of which are long established in business.
McCrory Stores Corporation ("McCrory"), a former tenant of the
Company, which leased space in the Fulton Mall in downtown Brooklyn,
New York, filed for Chapter 11 bankruptcy protection from creditors
on February 26, 1992. The United States Bankruptcy Court authorized
McCrory to reject its lease agreement with the Company, as amended,
effective January 31, 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 with the Bankruptcy Court.
The Company has leased 58,000 square feet of the 99,000 square feet
of space surrendered by McCrory.
The lease with IBM, a former tenant in the Fishkill, New York
property, expired on March 31, 1994. The IBM lease previously
accounted for approximately 8% of the annual rental income of the
Company. On August 31, 1995, the Company leased to the U.S. Post
Office 25,000 square feet of the 100,000 square feet of space
vacated by IBM. Occupancy commenced in December 1995.
Jamesway Corporation, which occupied retail space in the Fishkill,
New York property, filed for Chapter 11 bankruptcy protection from
creditors on July 19, 1993. Jamesway emerged from bankruptcy on
January 28, 1995. Jamesway, which was expected to account for
approximately 5.2% of the annual rental income of the Company for
the fiscal year ending July 31, 1996, and whose lease extended to
January 31, 2005, filed for Chapter 11 bankruptcy protection from
creditors again on October 18, 1995. Jamesway rejected its lease in
the Fishkill location with the approval of the United States
Bankruptcy Court, effective February 29, 1996, but continued
occupancy until March 22, 1996.
The Company intends to file a Proof of Claim with the United States
Bankruptcy Court, Southern District of New York in the amount of
$1,036,142 for damages arising from the rejection of the lease. The
Company has made no provision in its financial statements for post-
petition damages in the amount of $1,004,171 relating to the lease
rejection.
14. 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.
15. Subsequent Event:
The Company, on June 11, 1996, signed a commitment letter with a
bank for a loan in the amount of $4,000,000, the loan to be secured
by a first mortgage lien covering the entire leasehold interest of
the Company as tenant in a certain ground lease and building in the
Jamaica property. The financial statements do not give effect to
the commitment letter. The loan proceeds are to be utilized by the
Company toward (a) payment in full of the outstanding term loan by
the Company in favor of the same bank in the current principal
balance of $1,500,000 plus interest, (see Note 4(a) above), and (b)
its costs of renovations to portions of the premises in connection
with the Company's sublease of a significant portion of the
building. The interest rate on the loan is to be a rate equal to
the prime rate as published on the last business day prior to the
closing of the loan plus 1/4%, fixed at time of closing, for a
period of five (5) years and six (6) months, with such rate to
change on the first day of the sixty-seventh (67th) month of the
term to a rate equal to the then prime rate plus 1/4%, fixed for the
balance of the term. The loan is to become due and payable on the
first day of the month following the expiration of ten (10) years
and six (6) months from the closing date. During the first six (6)
months of the term, the Company is to have the option to secure
advances against the loan amount with the loan to convert to a ten
year term at the expiration of the initial six (6) month period
thereof.
Payments are to be payable, in arrears, on the first day of each and
every month during the term calculated (a) during the initial six
(6) month period of the term, interest only, and (b) during the
final ten (10) year period of the term, at the sum of the interest
rate plus amortization sufficient to fully liquidate the loan over a
fifteen (15) year period. As additional collateral security, the
Company will conditionally assign to the bank all leases and rents
on the premises, or portions thereof, whether now existing or
hereafter consummated. The Company has an option to prepay
principal, in whole or in part, plus interest accrued thereon, at
any time during the term, upon thirty (30) days prior notice to the
bank, without premium or penalty. Other provisions of the
commitment letter provide certain restrictions on the incurrence of
indebtedness and the sale or transfer of the Company's ground lease
interest in the premises.
<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, 1996 Compared to the Three Months Ended
April 30, 1995:
Operations for the three months ended April 30, 1996 resulted in an after
tax net income of $4,133. The comparable 1995 quarter resulted in an
after tax net loss of $110,756, or $.05 per share.
Rental income in the current three months increased to $2,429,902 from
$2,096,545 in the comparable 1995 three months, principally due to the
addition of three new tenants.
Real estate operating expenses increased to $1,510,799 from $1,446,161 in
the 1995 period principally due to increased maintenance and fuel costs.
Administrative and general expenses increased to $549,219 from $513,820
in the 1995 period principally due to increased professional costs.
Depreciation and amortization expense in the current three months
increased to $224,384 from $211,903 in the three months ended April 30,
1995 because of additional improvements to property.
Interest expense exceeded investment income by $109,967 in the current
quarter and by $75,417 in the comparable 1995 quarter, principally due to
the increased interest on the broker loan discussed in Note 8 and the
loan facility discussed in Note 4 (a) to Consolidated Financial
Statements.
Nine Months Ended April 30, 1996 Compared to the Nine Months Ended April
30, 1995
Loss from operations and the overall net loss for the nine months ended
April 30, 1996 amounted to $231,987, or $.11 per share, after the write
off of a bad debt amounting to $424,011 relating to the rejection by a
tenant of its lease, discussed below. There was no comparable item in
the 1995 nine month period. Operations for the comparable 1995 nine
month period resulted in an after tax net loss of $221,308, or $.10 per
share. The overall net loss for the 1995 nine month period amounted to
$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 1996 nine month period.
Rental income in the current nine months increased to $6,924,337 from
$6,276,449 in the 1995 nine month period principally due to the addition
of three new tenants.
Real estate operating expenses increased to $4,289,605 from $4,203,377 in
the 1995 comparable period principally due to increased maintenance and
fuel costs, offset in part, by an allowed credit for utility costs and a
decrease in real estate taxes in the 1996 nine month period.
Administrative and general expenses increased to $1,957,123 from
$1,536,020 principally due to the bad debt write off of $424,011,
discussed above.
The Company reports scheduled rental income recognized on a straight-line
basis rather than rental income as it becomes receivable according to the
provisions of the lease, in compliance with the provisions of Statement
of Financial Accounting Standards No. 13, "Accounting for Leases". The
excess of the scheduled rental income of Jamesway recognized on a
straight line basis over rental income amounts to $424,011 and such
amount has been written off and classified as a bad debt.
Depreciation and amortization expense in the current nine months
increased to $664,152 from $629,887 in the nine months ended April 30,
1995 because of additional improvements to property.
Interest expense exceeded interest income in the amount of $325,044 in
the current nine month period and by $196,473 in the nine months ended
April 30, 1995 principally due to the increased interest on the broker
loan discussed in Note 8 and the loan facility discussed in Note 4 (a) 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 leasing of 58,000 square feet of space in the Jowein Building located
in the Fulton Mall in downtown Brooklyn, New York to three chain store
tenants for retail space and one non-retail tenant, and the leasing of
25,000 square feet to the U. S. Post Office in Fishkill, New York will
provide additional working capital for the Company. The terms of the
Brooklyn leases commenced in November, 1995 and the Fishkill lease in
December, 1995.
On August 17, 1995, the Company entered into an agreement with a bank
wherein the bank approved a $1,500,000 loan facility for the Company to
use to fund building construction/renovation costs to accommodate tenants
under the lease. The Company has taken down $1,250,000 as of the date of
this report (see Note 4 (a) to Consolidated Financial Statements).
The Company had working capital of $2,005,649, with a ratio of current
assets to current liabilities of 2 to 1 at April 30, 1996.
Management considers current working capital and borrowing capabilities
adequate to cover the Company's planned operating and capital
requirements.
<PAGE>
Part II - Other Information
Item 6 - Exhibits and Reports on Form 8-K
(a) List of Exhibits:
Sequentially
Exhibit Numbered
Number Exhibit Page _
(2) Plan of acquisition, reorganization, arrangement,
liquidation or succession. N/A
(4) Instruments defining the rights of security holders,
including indentures. N/A
(10) Material contracts. N/A
(11) Statement re computation of per share earnings. N/A
(15) Letter re unaudited interim financial information. N/A
(18) Letter re change in accounting principles. N/A
(19) Report furnished to security holders. N/A
(22) Published report regarding matters submitted to vote
of security holders. N/A
(24) Power of attorney. N/A
(27) Financial data schedule. N/A
(99) Additional exhibits. N/A
(b) Reports on Form 8-K - No report on Form 8-K was required to be
filed by the Registrant during the three months ended April 30,
1996.
<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 11, 1996 Lloyd J. Shulman
Lloyd J. Shulman, Co-Chairman
Date June 11, 1996 Alex Slobodin
Alex Slobodin, Exec. Vice-President
(Principal Financial Officer)
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted
from the contained quarterly 10-Q and is qualified in its entirety
by reference to such Form 10-Q.
</LEGEND>
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> Jul-31-1996
<PERIOD-START> Aug-01-1995
<PERIOD-END> Apr-30-1996
<CASH> 363,341
<SECURITIES> 2,738,805
<RECEIVABLES> 227,839
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 4,110,770
<PP&E> 45,492,526
<DEPRECIATION> 19,488,344
<TOTAL-ASSETS> 36,932,917
<CURRENT-LIABILITIES> 2,105,121
<BONDS> 0
<COMMON> 2,178,297
0
0
<OTHER-SE> 24,882,000
<TOTAL-LIABILITY-AND-EQUITY> 36,932,917
<SALES> 0
<TOTAL-REVENUES> 6,924,337
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 6,910,880
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 511,602
<INCOME-PRETAX> (311,587)
<INCOME-TAX> (79,600)
<INCOME-CONTINUING> (231,987)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
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<NET-INCOME> (231,987)
<EPS-PRIMARY> (0.11)
<EPS-DILUTED> .00
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