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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 10-K
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[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED: JULY 31, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM TO
COMMISSION FILE NUMBER: 1-3647
J. W. MAYS, INC.
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(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
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(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
Registrant's telephone number, including area code: (718) 624-7400
Securities registered pursuant to Section 12(b) of the Act:
TITLE OF EACH CLASS NAME OF EACH EXCHANGE ON WHICH REGISTERED
------------------- -----------------------------------------
NONE NONE
Securities registered pursuant to Section 12(g) of the Act:
COMMON STOCK, PAR VALUE $1 PER SHARE
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(TITLE OF CLASS)
INDICATE BY CHECK MARK WHETHER THE REGISTRANT (1) HAS FILED ALL REPORTS
REQUIRED TO BE FILED BY SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934 DURING THE PRECEDING 12 MONTHS (OR FOR SUCH SHORTER PERIOD THAT THE
REGISTRANT WAS REQUIRED TO FILE SUCH REPORTS), AND (2) HAS BEEN SUBJECT TO SUCH
FILING REQUIREMENTS FOR THE PAST 90 DAYS. YES X NO.
--- ---
INDICATE BY CHECK MARK IF DISCLOSURE OF DELINQUENT FILERS PURSUANT TO ITEM
405 OF REGULATION S-K IS NOT CONTAINED HEREIN, AND WILL NOT BE CONTAINED, TO THE
BEST OF REGISTRANT'S KNOWLEDGE, IN DEFINITIVE PROXY OR INFORMATION STATEMENTS
INCORPORATED BY REFERENCE IN PART III OF THIS FORM 10-K OR ANY AMENDMENT TO THIS
FORM 10-K. [X] NO DELINQUENT FILERS.
THE AGGREGATE MARKET VALUE OF VOTING STOCK HELD BY NONAFFILIATES OF THE
REGISTRANT WAS APPROXIMATELY $9,268,515 AS OF SEPTEMBER 26, 1997 BASED UPON THE
AVERAGE BID AND ASKED PRICE OF THE STOCK REPORTED FOR SUCH DATE. SHARES OF
COMMON STOCK HELD BY EACH OFFICER AND DIRECTOR AND BY EACH PERSON WHO OWNS 5% OR
MORE OF THE OUTSTANDING COMMON STOCK HAVE BEEN EXCLUDED IN THAT SUCH PERSONS MAY
BE DEEMED TO BE AFFILIATES. THIS DETERMINATION OF AFFILIATE STATUS IS NOT
NECESSARILY A CONCLUSIVE DETERMINATION FOR OTHER PURPOSES.
The number of shares outstanding of the registrant's Common Stock as of
September 26, 1997 was 2,135,780.
DOCUMENTS INCORPORATED BY REFERENCE
PART OF FORM 10-K
IN WHICH THE DOCUMENT
DOCUMENT IS INCORPORATED
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Annual Report to Shareholders for Fiscal
Year Ended July 31, 1997 Parts I and II
Definitive Proxy Statement for the 1997
Annual Meeting of Shareholders Part III
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<PAGE>
J. W. MAYS, INC.
FORM 10-K FOR THE FISCAL YEAR ENDED JULY 31, 1997
TABLE OF CONTENTS
PART I PAGE
----
Item 1. Business ..................................................... 3
Item 2. Properties ................................................... 3
Item 3. Legal Proceedings ............................................ 6
Item 4. Submission of Matters to a Vote of Security Holders .......... 6
Executive Officers of the Registrant .................................. 7
PART II
Item 5. Market for Registrant's Common Stock and Related
Shareholder Matters ......................................... 7
Item 6. Selected Financial Data ...................................... 7
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations ........................ 7
Item 8. Financial Statements and Supplementary Data .................. 8
Item 9. Changes in and Disagreements with Accountants
on Accounting and Financial Disclosure ...................... 8
PART III
Item 10. Directors and Executive Officers of the Registrant ........... 8
Item 11. Executive Compensation ....................................... 8
Item 12. Security Ownership of Certain Beneficial Owners and
Management ................................................. 8
Item 13. Certain Relationships and Related Transactions .............. 8
PART IV
Item 14 Exhibits, Financial Statement Schedules, and Reports
on Form 8-K ................................................ 8
2
<PAGE>
PART I
ITEM 1. BUSINESS.
J. W. Mays, Inc. (the "Company" or "Registrant") with executive offices at
9 Bond Street, Brooklyn, New York 11201, operates a number of commercial real
estate properties. See below for the description of these properties (Item 2.
Properties). The Company's business was founded in 1924 and incorporated under
the laws of the State of New York on July 6, 1927.
The Company discontinued its department store business which operated under
the name of "MAYS," in the year ended July 31, 1989, and has continued the
leasing of real estate. The Company has no foreign operations.
The Company employs approximately 30 employees and has a contract with a
union covering rates of pay, hours of employment and other conditions of
employment for 20% of its employees. The Company considers that its labor
relations with its employees and union are good.
ITEM 2. PROPERTIES.
The table below sets forth certain information as to each of the properties
currently operated by the Company:
APPROXIMATE
LOCATION SQUARE FEET
-------- -----------
1. Brooklyn, New York
Fulton Street at Bond Street ........................... 380,000
2. Brooklyn, New York
Jowein Building
Fulton Street and Elm Place ............................ 430,000
3. Jamaica, New York
Jamaica Avenue at 169th Street ......................... 297,000
4. Fishkill, New York
Route 9 at Interstate Highway 84 ....................... 211,000
(located on
14.9 acres)
5. Levittown, New York
Hempstead Turnpike ..................................... 85,800
6. Massapequa, New York
Sunrise Highway ........................................ 133,400
7. Circleville, Ohio
Tarlton Road ........................................... 193,350
(located on
11.6 acres)
8. Brooklyn, New York
Truck Bays, passage facilities and tunnel--
Schermehorn Street .................................. 17,000
Building--Livingston Street ........................... 10,500
Properties leased are under long-term leases for varying periods, the
longest of which extends to 2013, and in most instances renewal options are
included. Reference is made to Note 6 to the Consolidated Financial Statements
contained in the 1997 Annual Report to Shareholders, incorporated herein by
reference. The properties owned which are held subject to mortgage are the
Jowein building, Jamaica Building, Fishkill property, Ohio property and a small
part of the Company's former Brooklyn store.
3
<PAGE>
1. Brooklyn, New York--Fulton Street at Bond Street
15% of the premises is leased by the Company under eight separate leases.
Expiration dates are as follows: 1/31/2001 (2 leases); 4/30/2011 (4
leases); 6/30/2011 (1 lease); and 12/8/2013 (1 lease). One lease which
expires 1/31/2001 has a 10 year option and the lease which expires
12/8/2013 has two thirty year options through 12/8/2073. There are no
present plans for the improvements of this property.
The property is currently leased to eight tenants of which six are retail
tenants and two occupy office space. One tenant occupies in excess of 10%
of the rentable square footage (26.11%). This tenant subleases to a flea
market, department store, shoe store and various other retail shops. The
lease expires April 30, 2011 with no renewal options.
OCCUPANCY LEASE EXPIRATION
-------------------- ------------------------------
YEAR YEAR NUMBER OF AREA
ENDED RATE ENDED LEASES SQ. FT.
------- ----- --------- --------- -------
7/31/93 28.61% 7/31/1998 1 3,080
7/31/94 28.77% 7/31/2000 1 2,140
7/31/95 28.77% 7/31/2001 3 3,781
7/31/96 28.77% 7/31/2004 1 1,140
7/31/97 28.77% 7/31/2006 1 6,192
7/31/2011 1 92,998
-- -------
8 109,331
-- -------
The life expectancy used to calculate depreciation varies between 18-40
years and the methods used are straight-line and declining balance.
2. Brooklyn, New York--Jowein Building, Fulton St. & Elm Place
Approximately 50% of the premises is owned and 50% is leased. The lease is
with one landlord and expires April 30, 2010. There are no renewal options.
There are no present plans for the improvement of this property.
Approximately 280,000 square feet of the property is currently leased to
twelve tenants of which eight are retail stores, one is a restaurant and
three leases are for office space. One tenant is a New York City agency
which occupies in excess of 10% of the rentable square footage (31.19%).
The lease expires April 29, 2010 with no renewal options. Approximately
110,000 square feet of the building is available for lease.
OCCUPANCY LEASE EXPIRATION
-------------------- -------------------------------
YEAR YEAR NUMBER OF AREA
ENDED RATE ENDED LEASES SQ. FT.
------ ------- --------- --------- -------
7/31/93 67.99% 7/31/2001 3 34,610
7/31/94 67.99% 7/31/2004 1 23,603
7/31/95 50.34% 7/31/2007 1 5,500
7/31/96 63.67% 7/31/2010 7 216,613
7/31/97 65.19% -- -------
12 280,326
-- -------
The life expectancy used to calculate depreciation varies between 18-40
years and the methods used are straight-line and declining balance.
3. Jamaica, New York--Jamaica Avenue at 169th Street
The building is owned and the fee is leased from an affiliated company. The
lease expires July 31, 2027. Approximately 46,000 square feet was renovated
for office space for two new tenants during fiscal 1997. Occupancy
commenced May 1, 1997. There are no present plans for the improvement of
the balance of the second floor of the property. The property is currently
leased to six tenants; four are retail tenants and two leases are for
office space. Two tenants occupy in excess of 10% of the rentable square
footage. One of the tenants is a department store that occupies 27.50% of
the rentable space with a lease that expires August 31, 2005 and has one
five year renewal option. The other tenant is a major retail toy store
which occupies 15.95% of the rentable space. The lease expires January 31,
2006 with six renewal options of five years each and 2,700 square feet to
another tenant for retail space. The Company during August 1997 executed
two ten year leases for office space, for a combined total of 8,000 square
feet. Approximately 83,000 square feet of the building are available for
lease.
4
<PAGE>
OCCUPANCY LEASE EXPIRATION
-------------------- -----------------------------
YEAR YEAR NUMBER OF AREA
ENDED RATE ENDED LEASES Q. FT.
------- ------ --------- --------- --------
7/31/93 45.55% 7/31/2002 1 2,680
7/31/94 45.55% 7/31/2006 2 128,342
7/31/95 45.55% 7/31/2007 3 45,960
7/31/96 44.72% -- -------
7/31/97 59.59% 6 176,982
-- -------
The life expectancy used to calculate depreciation varies between 18-40 years
and the methods used are straight-line and declining balance.
4. Fishkill, New York Route 9 at Interstate Highway 84
The Company owns the entire premises. There are no present plans for the
improvement of this property. Approximately 26,000 square feet are leased
to one tenant for office space and 186,000 square feet of the building are
available for lease.
OCCUPANCY LEASE EXPIRATION
-------------------- -------------------------------
YEAR YEAR NUMBER OF AREA
ENDED RATE ENDED LEASES SQ. FT.
------- ------ ---------- --------- -------
7/31/93 94.45% 7/31/2001 1 25,915
7/31/94 94.45%
7/31/95 42.75%
7/31/96 55.03%
7/31/97 12.28%
The life expectancy used to calculate depreciation varies between 18-40
years and the methods used are straight-line and declining balance.
5. Levittown, New York--Hempstead Turnpike
The Company owns the entire premises. There are no present plans for the
improvement of this property. The property is currently leased to one
tenant that operates the premises as a game room and fast food restaurant.
The lease expires September 30, 1999 with one five year renewal option.
OCCUPANCY LEASE EXPIRATION
------------------- ------------------------------
YEAR YEAR NUMBER OF AREA
ENDED RATE ENDED LEASES SQ. FT.
------- ---- --------- --------- -------
7/31/93 100% 7/31/2000 1 85,800
7/31/94 100%
7/31/95 100%
7/31/96 100%
7/31/97 100%
The life expectancy used to calculate depreciation varies between 18-40
years and the methods used are straight-line and declining balance.
6. Massapequa, New York--Sunrise Highway
The Company leases the entire premises under one lease. The lease expires
May 14, 2009. There are no renewal options. There are no present plans for
the improvement of this property. The property is currently sub-leased to
two tenants; one, a gasoline service station and the other, a bank. Each of
these tenants occupy in excess of 10% of the rentable square footage. The
gasoline service station lease expires April 29, 2009 with no renewal
options. The sub-lease to the bank expires May 14, 2009 with no renewal
options.
OCCUPANCY LEASE EXPIRATION
----------------------- ------------------------------
YEAR YEAR NUMBER OF AREA
ENDED RATE ENDED LEASES SQ. FT.
-------- ----- --------- --------- -------
7/31/93 100% 7/31/2009 2 133,400
7/31/94 100%
7/31/95 100%
7/31/96 100%
7/31/97 100%
5
<PAGE>
The Company does not own this property and has made no improvements
thereon.
7. Circleville, Ohio--Tarlton Road
The Company owns the entire premises. There are no present plans for
improvement of this property. The entire property is currently leased to
one tenant. The tenant is a manufacturer and uses these premises as a
warehouse and distribution facility. The lease expires September 30, 2002.
There are three five year renewal options.
OCCUPANCY LEASE EXPIRATION
------------------- ------------------------------
YEAR YEAR NUMBER OF AREA
ENDED RATE ENDED LEASES SQ. FT.
------- ----- -------- --------- -------
7/31/93 100% 7/31/2003 1 193,350
7/31/94 100%
7/31/95 100%
7/31/96 100%
7/31/97 100%
The life expectancy used to calculate depreciation is 31.5 years. The
method used is straight-line.
8. The City of New York through its Economic Development Administration ("New
York City") constructed a municipal garage at Livingston Street opposite
the Company's Brooklyn properties. The Company has a long-term lease with
New York City expiring in 2013 with renewal options, the last of which
expires in 2073, under which:
(1) Such garage, available to the public, provides truck bays and
passage facilities through a tunnel for the exclusive use of the
Company, to the structure referred to in (2) below; the bays, passage
facilities and tunnel, totaling approximately 17,000 square feet, are
included in the lease from New York City mentioned in the preceding
paragraph and are in full use.
(2) The Company constructed a six-story building and basement on
a 20 x 75-foot plot (acquired and made available by New York City and
leased to the Company for a term expiring in 2013 with renewal
options, the last of which expires in 2073) adjacent to and connected
with the Company's Brooklyn properties, which provides the other end
of the tunnel with the truck bays in the municipal garage.
In the opinion of management, all of the Company's properties are adequately
covered by insurance.
See Note 12 to the Consolidated Financial Statements of the 1997 Annual
Report to Shareholders, which information is incorporated herein by
reference, for information concerning those tenants the rental income from
which equals 10% or more of the Company's rental income.
ITEM 3. LEGAL PROCEEDINGS.
There are various lawsuits and claims pending against the Company. It is
the opinion of management that the resolution of these matters will not have a
material adverse effect on the Company's Consolidated Financial Statements.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
During the fourth quarter of the fiscal year covered by this report, no
matter was submitted to a vote of security holders of the Company.
6
<PAGE>
EXECUTIVE OFFICERS OF THE REGISTRANT
The following information is furnished with respect to each Executive
Officer of the Registrant (each of whom is elected annually) whose present term
of office will expire upon the election and qualification of his successor,
except for Max L. Shulman who retired as Co-Chairman of Board on November 26,
1996:
<TABLE>
<CAPTION>
FIRST BECAME
BUSINESS EXPERIENCE DURING SUCH OFFICER
NAME AGE THE PAST FIVE YEARS OR DIRECTOR
---- --- -------------------------- -------------
<S> <C> <C> <C>
Max L. Shulman ........ 88 Chairman of the Board June, 1963
Co-Chairman of the Board June, 1995
Retired as Co-Chairman of
the Board--November 26,
1996
Director January, 1946
Lloyd J. Shulman ...... 55 President November, 1978
Co-Chairman of the Board and
President June, 1995
Chairman of the Board and
President November, 1996
Director November, 1977
Alex Slobodin ......... 82 Executive Vice President November, 1965
Treasurer September, 1955
Director November, 1963
Ward N. Lyke, Jr. ..... 46 Vice President February, 1984
George Silva .......... 47 Vice President March, 1995
Salvatore Cappuzzo .... 38 Secretary November, 1981
</TABLE>
No family relationship exists among the foregoing persons except that Lloyd
J. Shulman is the son of Max L. Shulman.
All of the above mentioned officers have been appointed as such by the
directors and, except for Mr. Silva, have been employed as Executive Officers of
the Company during the past five years.
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON STOCK AND RELATED SHAREHOLDER MATTERS.
The information appearing under the heading "Common Stock Prices and
Dividends" on page 20 of the Registrant's 1997 Annual Report to Shareholders is
incorporated herein by reference.
ITEM 6. SELECTED FINANCIAL DATA.
The information appearing under the heading "Summary of Selected Financial
Data" on page 2 of the Registrant's 1997 Annual Report to Shareholders is
incorporated herein by reference.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.
The information appearing under the heading "Management's Discussion and
Analysis of Financial Condition and Results of Operations" on pages 18 and 19 of
the Registrant's 1997 Annual Report to Shareholders is incorporated herein by
reference.
7
<PAGE>
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
The Registrant's Consolidated Financial Statements, together with the
reports of D'Arcangelo & Co., LLP and of Lipsky, Goodkin & Co., P.C.,
Independent Public Accountants, dated October 3, 1997 and October 12, 1995,
respectively, appearing on pages 4 through 16 of the Registrant's 1997 Annual
Report to Shareholders is incorporated herein by reference. With the exception
of the aforementioned information and the information incorporated by reference
in Items 2, 5, 6, 7 and 8 hereof, the 1997 Annual Report to Shareholders is not
to be deemed filed as part of this Form 10-K Annual Report.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
The information required by that part of this item relating to Changes in
Registrant's Certifying Accountants appears in the Registrant's Form 8-K dated
January 11, 1996, amended February 6, 1996 by Form 8-K/A, and such information
is incorporated herein by reference.
Response to that part of this item relating to Disagreements with
Accountants and Financial Disclosures--None, as it applies to both the former
and present accountants.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
The information relating to directors of the Registrant is contained in the
Definitive Proxy Statement for the 1997 Annual Meeting of Shareholders and such
information is incorporated herein by reference.
The information with respect to Executive Officers of the Registrant is set
forth in Part I hereof.
ITEM 11. EXECUTIVE COMPENSATION.
The information required by this item appears under the heading "Executive
Compensation and Related Matters" in the Definitive Proxy Statement for the 1997
Annual Meeting of Shareholders and such information is incorporated herein by
reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
The information required by this item appears under the headings "Security
Ownership of Certain Beneficial Owners and Management" and "Information
Concerning Nominees for Election as Directors" in the Definitive Proxy Statement
for the 1997 Annual Meeting of Shareholders and such information is incorporated
herein by reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
The information required by this item appears under the heading "Executive
Compensation and Related Matters" in the Definitive Proxy Statement for the 1997
Annual Meeting of Shareholders and such information is incorporated herein by
reference.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K.
(a) The following documents are filed as part of this report:
1. (i) The Consolidated Financial Statements and report of
D'Arcangelo & Co., LLP, Independent Public Accountants, dated
October 3, 1997, set forth on pages 4 through 16 of the
Registrant's 1997 Annual Report to Shareholders.
(ii) The report of Lipsky, Goodkin & Co., P.C. Independent Public
Accountants, dated October 12, 1995, (except with respect to the
matter discussed in Note 16(b), as to which the date is October
18, 1995), set forth on page 16 of the Registrant's 1995 Annual
Report to Shareholders.
2. See accompanying Index to Registrant's Financial Statements and
Schedules.
8
<PAGE>
3. Exhibits:
(2) Plan of acquisition, reorganization, arrangement,
liquidation or succession--not applicable.
(3) Articles of incorporation and by-laws:
(i) Certificate of Incorporation, as amended, incorporated
by reference to Registrant's Form 8-K dated December 3,
1973.
(ii) By-laws, as amended June 1, 1995, incorporated by
reference to Registrant's Form 10-K dated October 23,
1995.
(4) Instruments defining the rights of security holders,
including indentures--see Exhibit (3) above.
(9) Voting trust agreement--not applicable.
(10) Material contracts:
(i) Agreement of Lease dated March 29, 1990 pursuant to
which the basement and a portion of the street floor,
approximately 32% of the total area of the Registrant's
former Jamaica store, has been leased to a tenant for
retail space, incorporated by reference to Registrant's
Form 10-K dated October 29, 1990.
(ii) Agreement of Lease dated July 5, 1990, as amended
February 25, 1992, pursuant to which a portion of the
street floor and basement, approximately 35% of the
total area of the Registrant's former Brooklyn store,
has been leased to a tenant for the retail sale of
general merchandise and for a restaurant, incorporated
by reference to Registrant's Form 10-K dated October
29, 1990.
(iii) The J.W. Mays, Inc. Retirement Plan and Trust, Summary
Plan Description, effective August 1, 1991,
incorporated by reference to Registrant's Form 10-K
dated October 23, 1992 and, as amended, effective
August 1, 1993, incorporated by reference to
Registrant's Form 10-Q for the Quarter ended October
31, 1993 dated December 2, 1993.
(11) Statement re computation of per share earnings--not
applicable.
(12) Statement re computation of ratios--not applicable.
(13) Annual report to security holders.
(16) Letter re change in certifying accountant--the information
required by this item appears in the Registrant's Form 8-K
dated January 11, 1996, amended February 6, 1996 by Form
8-K/A, and such information is incorporated herein by
reference.
(18) Letter re change in accounting principles--not applicable.
(21) Subsidiaries of the registrant.
(22) Published report regarding matters submitted to vote of
security holders--not applicable.
(24) Power of attorney--none.
(28) Information from reports furnished to state insurance
regulatory authorities--not applicable.
(99) Additional exhibits--none.
(b) Reports on Form 8-K -- No reports on Form 8-K were required to be
filed by the Registrant during the three months ended July 31, 1997.
9
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934, THE REGISTRANT HAS DULY CAUSED THIS REPORT TO BE SIGNED ON
ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED.
J. W. MAYS, INC.
-----------------------------------
(REGISTRANT)
October 20, 1997 By: LLOYD J. SHULMAN
------------------------------------
Lloyd J. Shulman
Chairman of the Board
Principal Executive Officer
President
Principal Operating Officer
October 20, 1997 By: ALEX SLOBODIN
------------------------------------
Alex Slobodin
Executive Vice President
and Treasurer
Principal Financial Officer
October 20, 1997 By: MARK GREENBLATT
------------------------------------
Mark Greenblatt
Controller
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934, THIS
REPORT HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSONS ON BEHALF OF THE
REGISTRANT IN THE CAPACITIES AND ON THE DATE INDICATED.
SIGNATURE TITLE DATE
--------- ----- ----
LLOYD J. SHULMAN Chairman of the Board, October 20, 1997
- ----------------------------- Chief Executive Officer,
Lloyd J. Shulman President, Chief Operating
Officer and Director
ALEX SLOBODIN Executive Vice President, October 20, 1997
- ----------------------------- Treasurer and Director
Alex Slobodin
FRANK J. ANGELL Director October 20, 1997
- -----------------------------
Frank J. Angell
LANCE D. MYERS Director October 20, 1997
- -----------------------------
Lance D. Myers
JACK SCHWARTZ Director October 20, 1997
- -----------------------------
Jack Schwartz
MAX L. SHULMAN Director October 20, 1997
- -----------------------------
Max L. Shulman
SYLVIA W. SHULMAN Director October 20, 1997
- -----------------------------
Sylvia W. Shulman
LEWIS D. SIEGEL Director October 20, 1997
- -----------------------------
Lewis D. Siegel
10
<PAGE>
INDEX TO REGISTRANT'S FINANCIAL STATEMENTS AND SCHEDULES
Reference is made to the following sections of the Registrant's Annual
Report to Shareholders for the fiscal year ended July 31, 1997, which are
incorporated herein by reference:
Reports of Independent Accountants (page 16)
Consolidated Balance Sheets (pages 4 and 5)
Consolidated Statements of Operations and Retained Earnings (page 6)
Consolidated Statements of Cash Flows (page 7)
Notes to Consolidated Financial Statements (pages 8-15)
PAGE
----
Financial Statement Schedules:
Reports of Independent Accountants ....................... 11
II Valuation and Qualifying Accounts ........................ 12
III Real Estate and Accumulated Depreciation ................. 13
All other schedules for which provision is made in the applicable
regulations of the Securities and Exchange Commission are not required under the
related instructions or are inapplicable and, accordingly, are omitted.
The separate financial statements and schedules of J. W. Mays, Inc. (not
consolidated) are omitted because the Company is primarily an operating company
and its subsidiaries are wholly-owned.
REPORTS OF INDEPENDENT ACCOUNTANTS ON FINANCIAL STATEMENT SCHEDULES
To the Board of Directors and Shareholders
J. W. Mays, Inc. and Subsidiaries
We have audited the consolidated financial statements of J.W. Mays, Inc.
and subsidiaries as of July 31, 1997 and 1996, and for the two years then ended,
and have issued our report thereon dated October 3, 1997; such consolidated
financial statements and report are incorporated by reference in this Form 10-K
Annual Report. Our audits also included the consolidated financial statement
schedules of J.W. Mays, Inc. and subsidiaries listed in Item 14(a)2 of this Form
10-K. These consolidated financial statement schedules are the responsibility of
the Corporation's management. Our responsibility is to express an opinion based
on our audits. In our opinion, such consolidated financial statement schedules,
when considered in relation to the basic consolidated financial statements taken
as a whole, present fairly, in all material respects, the information set forth
therein.
D'ARCANGELO & CO., LLP
Purchase, N.Y
October 3, 1997
----------------------
To the Board of Directors and Shareholders
of J. W. Mays, Inc.:
Our audit of the Consolidated Financial Statements referred to in our
report dated October 12, 1995, appearing on page 16 of the 1995 Annual Report to
Shareholders of J.W. Mays, Inc., (which report and Consolidated Financial
Statements are incorporated by reference in this Form 10-K Annual Report) also
included an audit of the Summarized Financial Information contained in Item 8
and Financial Statement Schedules listed in Item 14(a)(2) of this Form 10-K. Our
report on the Consolidated Financial Statements includes explanatory paragraphs
with respect to the change in the method of accounting for marketable
securities--other investments in 1995, as discussed in Note 1 to the
Consolidated Financial Statements. In our opinion, this Summarized Financial
Information and these Financial Statement Schedules present fairly, in all
material respects, the information set forth therein when read in conjunction
with the related Consolidated Financial Statements.
LIPSKY, GOODKIN & Co., P.C.
New York, N.Y
October 12, 1995 (except with respect to the matter discussed in Note 16(b)
to the 1995 Consolidated Financial Statements, as to which the date is
October 18, 1995). See paragraphs 6 and 7 of Note 12 to the 1997
Consolidated Financial Statements for events subsequent to October 18, 1995.
11
<PAGE>
SCHEDULE II
J.W. MAYS, INC.
VALUATION AND QUALIFYING ACCOUNTS
YEAR ENDED JULY 31,
-----------------------------------
1997 1996 1995
-------- -------- --------
Allowance for net unrealized gains
(losses) on marketable securities--
other investments:
Balance, beginning of period ..... $ 25,261 $ 42,010 $(31,769)
Additions (Reductions) ........... 126,890 (16,749) 73,779
-------- -------- --------
Balance, end of period ........... $152,151 $ 25,261 $ 42,010
======== ======== ========
Deferred income tax asset
valuation allowance:
Balance, beginning of period ..... $ 41,597 $117,098 $169,698
(Reductions) ..................... (14,645) (75,501) (52,600)
-------- -------- --------
Balance, end of period ........... $ 26,952 $ 41,597 $117,098
======== ======== ========
12
<PAGE>
<TABLE>
SCHEDULE III
J. W. MAYS, INC.
REAL ESTATE AND ACCUMULATED DEPRECIATION
JULY 31, 1997
<CAPTION>
====================================================================================================================================
COL. A COL. B COL. C COL. D COL. E
- ------------------------------------------------------------------------------------------------------------------------------------
COST CAPITALIZED GROSS AMOUNT AT WHICH CARRIED
INITIAL COST TO COMPANY SUBSEQUENT TO ACQUISITION AT CLOSE OF PERIOD
--------------------------------------------------------------------------------------
ENCUM- BUILDING & CARRYING BUILDING &
DESCRIPTION BRANCES LAND IMPROVEMENTS IMPROVEMENTS COST LAND IMPROVEMENTS TOTAL
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
OFFICE AND RENTAL BUILDINGS
Brooklyn, New York
Fulton Street at Bond
Street ................... $ 201,464 $1,703,157 $ 3,862,454 $ 6,250,101 $ -- $1,703,157 $10,112,555 $11,815,712
Jamaica, New York
Jamaica Avenue at
169th Street .............. 3,933,333 -- 3,215,699 7,182,343 -- -- 10,398,042 10,398,042
Fishkill, New York
Route 9 at Interstate
Highway 84 ................ 2,561,428 467,341 7,212,116 1,726,320 -- 467,341 8,938,436 9,405,777
Brooklyn, New York
Jowein Building
Fulton Street and Elm
Place .................... 835,026 1,622,232 770,561 9,205,808 -- 1,622,232 9,976,369 11,598,601
Levittown, New York
Hempstead Turnpike ........ -- 95,256 200,560 72,990 -- 95,256 273,550 368,806
Circleville, Ohio
Tarlton Road .............. 1,890,947 120,849 4,388,456 -- -- 120,849 4,388,456 4,509,305
---------- ---------- ----------- ----------- -------- ---------- ----------- -----------
Total (A) ................. $9,422,198 $4,008,835 $19,649,846 $24,437,562 $ -- $4,008,835 $44,087,408 $48,096,243
========== ========== =========== =========== ======== ========== =========== ===========
<CAPTION>
===================================================
COL. F COL. G COL. H COL. I
---------------------------------------------------
LIFE ON WHICH
DEPRECIATION IN
LATEST INCOME
ACCUMULATED DATE OF DATE STATEMENT IS
DEPRECIATION CONSTRUCTION ACQUIRED COMPUTED
---------------------------------------------------
OFFICE AND RENTAL BUILDINGS
Brooklyn, New York
Fulton Street at Bond
Street .................. $ 4,580,126 Various Various (1)(2)
Jamaica, New York
Jamaica Avenue at
169th Street ............. 5,099,302 1959 1959 (1 (2)
Fishkill, New York
Route 9 at Interstate
Highway 84 ............... 4,426,835 10/74 11/72 (1)
Brooklyn, New York
Jowein Building
Fulton Street and Elm
Place .................... 5,301,167 1915 1950 (1)(2)
Levittown, New York
Hempstead Turnpike ....... 242,486 4/69 6/62 (1)
Circleville, Ohio
Tarlton Road ............. 493,701 9/92 12/92 (1)
-----------
Total (A) ................ $20,143,617
===========
</TABLE>
- ---------------
(1) Building and improvements 18-40 years
(2) Improvements to leased property 3-40 years
(A) Does not include Office Furniture and Equipment and Transportation
Equipment in the amount of $690,490 and Accumulated Depreciation thereon
of $517,282 at July 31, 1997.
YEAR ENDED JULY 31,
---------------------------------------
1997 1996 1995
----------- ----------- -----------
INVESTMENT IN REAL ESTATE
Balance at Beginning of Year $45,128,700 $43,475,739 $42,529,020
Improvements ............... 2,967,543 1,652,961 946,719
----------- ----------- -----------
Balance at End of Year ..... $48,096,243 $45,128,700 $43,475,739
=========== =========== ===========
ACCUMULATED DEPRECIATION
Balance at Beginning of Year $19,233,598 $18,398,773 $17,617,239
Additions Charged to Costs
and Expenses .............. 910,019 834,825 781,534
----------- ----------- -----------
Balance at End of Year ..... $20,143,617 $19,233,598 $18,398,773
=========== =========== ===========
13
<PAGE>
EXHIBIT INDEX TO FORM 10-K
(2) Plan of acquisition, reorganization, arrangement, liquidation or
succession-not applicable
(3) (i) Articles of incorporation-incorporated by reference
(ii) By-laws-incorporated by reference
(4) Instruments defining the rights of security holders, including
indentures-see Exhibit (3) above
(9) Voting trust agreement-not applicable
(10) Material contracts-(i) through (iii) incorporated by reference
(11 Statement re computation of per share earnings-not applicable
(12) Statement re computation of ratios-not applicable
(13) Annual report to security holders
(16) Letter re change in certifying accountant
(18) Letter re change in accounting principles-not applicable
(21) Subsidiaries of the registrant
(22) Published report regarding matters submitted to vote of security
holders-not applicable
(24) Power of attorney-none
(28) Information from reports furnished to state insurance regulatory
authorities-not applicable
(99) Additional exhibits-none
EXHIBIT 13
(COPY OF ANNUAL REPORT TO SHAREHOLDERS ATTACHED HERETO)
FISCAL YEAR ENDED JULY 31, 1997
(NEXT PAGE)
EXHIBIT 21
SUBSIDIARIES OF THE REGISTRANT
The Registrant owns all of the outstanding stock of the following
corporations, which are included in the Consolidated Financial Statements filed
with this report:
DUTCHESS MALL SEWAGE PLANT, INC. (a New York corporation)
J. W. M. Realty Corp. (an Ohio corporation)
14
J. W. MAYS, INC.
ANNUAL REPORT
1997
Year Ended July 31, 1997
<PAGE>
CONTENTS
PAGE NO.
--------
Summary of Selected Financial Data 2
The Company 2
Message to Shareholders 3
Consolidated Balance Sheets 4-5
Consolidated Statements of Operations
and Retained Earnings 6
Consolidated Statements of Cash Flows 7
Notes to Consolidated Financial Statements 8-15
Reports of Independent Accountants 16
Five Year Summary of
Consolidated Operations 17
Management's Discussion and
Analysis of Financial Condition
and Results of Operations 18-19
Quarterly Financial Information (Unaudited) 20
Common Stock Prices and Dividends 20
Officers and Directors 21
EXECUTIVE OFFICES
9 Bond Street, Brooklyn, N.Y. 11201
TRANSFER AGENT AND REGISTRAR
American Stock Transfer & Trust Company
40 Wall Street
New York, N.Y. 10005
SPECIAL COUNSEL
Cullen and Dykman
177 Montague Street
Brooklyn, N.Y. 11201
INDEPENDENT ACCOUNTANTS
D'Arcangelo & Co., LLP
3010 Westchester Avenue
Purchase, N.Y. 10577
<TABLE>
<CAPTION>
COMMON STOCK ANNUAL MEETING
<S> <C>
The Company's common stock trades on the The Annual Meeting of Shareholders will be
Nasdaq National Market tier of The held on Tuesday, November 25, 1997, at
Nasdaq Stock Market under the Symbol: 10:00 A.M., New York time, at J. W. MAYS, INC.,
"Mays". 9 Bond Street, Brooklyn, New York.
</TABLE>
1
<PAGE>
J.W. MAYS, INC.
<TABLE>
SUMMARY OF SELECTED FINANCIAL DATA
(dollars in thousands except per share data)
<CAPTION>
1997 1996 1995 1994 1993
===========================================================================================================================
<S> <C> <C> <C> <C> <C>
Rental Income .................................................. $10,080 $ 9,269 $ 8,330 $ 9,523 $10,030
Gain on Sale of Property and Equipment ......................... -- -- -- - 1
Gain on Condemnation Award ..................................... -- -- -- -- 639
- ---------------------------------------------------------------------------------------------------------------------------
Total Revenues ................................................. 10,080 9,269 8,330 9,523 10,670
- ---------------------------------------------------------------------------------------------------------------------------
Income (Loss) from Continuing Operations Before
Cumulative Effect of Changes in Accounting
Principles and Extraordinary Item ............................ 811 (141) (394) (32) 1,464
Cumulative Effect of Changes in Accounting Principles:
Accounting for Certain Investments in Debt
and Equity Securities ...................................... -- -- 22 -- --
Accounting for Income Taxes .................................. -- -- -- (275) --
Extraordinary Item--Utilization of Net Operating
Loss Carryforward ............................................ -- -- -- -- 709
- ---------------------------------------------------------------------------------------------------------------------------
Net Income (Loss) .............................................. 811 (141) (372) (307) 2,173
- ---------------------------------------------------------------------------------------------------------------------------
Working Capital ................................................ 1,969 2,152 2,478 4,629 3,816
- ---------------------------------------------------------------------------------------------------------------------------
Real Estate--Net ............................................... 27,953 25,895 25,077 24,912 23,964
- ---------------------------------------------------------------------------------------------------------------------------
Total Assets ................................................... 40,406 37,771 36,144 37,290 36,384
- ---------------------------------------------------------------------------------------------------------------------------
Long-Term Debt:
Mortgages Payable ............................................ 8,642 6,965 5,954 6,359 4,315
Other ........................................................ 641 734 678 672 668
------ ------ ------- ------ -------
Total ...................................................... 9,283 7,699 6,632 7,031 4,983
- ---------------------------------------------------------------------------------------------------------------------------
Shareholders' Equity ........................................... 28,030 27,141 27,293 27,637 28,028
- ---------------------------------------------------------------------------------------------------------------------------
Income (Loss) Per Common Share:
Operations ................................................... .38 (.07) (.18) (.02) .67
Cumulative Effect of Changes in Accounting
Principles:
Accounting for Certain Investments in Debt
and Equity Securities .................................. -- -- .01 -- --
Accounting for Income Taxes .............................. -- -- -- (.13) --
Extraordinary Item--Utilization of
Net Operating Loss Carryforward ............................ -- -- -- -- .33
------ ------ ------- ------ -------
Net Income (Loss) Per Common Share ....................... $ .38 $ (.07) $ (.17) $ (.15) $ 1.00
- ---------------------------------------------------------------------------------------------------------------------------
Cash Dividends Declared Per Share .............................. -- -- -- -- --
- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>
Average common shares outstanding for 1997, 2,136,175; 1996, 2,136,397; 1995,
2,136,397; 1994, 2,137,440; and 1993, 2,171,124.
THE COMPANY
================================================================================
J.W. Mays, Inc. was founded in 1924 and incorporated under the laws of the
State of New York on July 6, 1927.
The Company operates a number of commercial real estate properties located
in Brooklyn and Jamaica in New York City, in Levittown, Long Island, New York,
in Fishkill, Dutchess County, New York and in Circleville, Ohio. The major
portion of these properties is owned and the balance is leased. A substantial
percentage of these properties is leased to tenants while the remainder is
available for lease.
More comprehensive information concerning the Company appears in its Annual
Report on Form 10-K for the fiscal year ended July 31, 1997.
2
<PAGE>
J.W. MAYS, INC.
TO OUR SHAREHOLDERS:
================================================================================
I am pleased to report that the current fiscal year has shown a marked
improvement over the 1996 fiscal year's results. Revenues for the current fiscal
year increased to $10,080,382 from $9,268,768 in the 1996 comparable fiscal
year, while revenues for the three months ended July 31, 1997 increased to
$2,736,522, from $2,344,431 in the 1996 comparable quarter.
For the fiscal year ended July 31, 1997, our Company realized pre-tax
income of $1,290,925 which amount includes a pre-tax recovery of $418,789 from a
lessee that had filed for bankruptcy protection under Chapter 11. For the 1996
comparable year our Company realized a pre-tax loss of $163,286, which amount
includes a pre-tax bad debt write-off of $424,011 due to a court approved lease
rejection granted to the aforesaid tenant.
The Board, at its meeting August 27, 1997, was enriched by the addition, as
a director, of Lance D. Myers, a partner in the law firm of Cullen and Dykman,
the Company's Special Counsel.
Max L. Shulman, associated with the Company since 1939 and a director since
1946, had elected to retire as Co-Chairman of the Company in November 1996 and
as an employee on December 31, 1996. Mr. Shulman will continue as a director of
the Company. I would like to acknowledge with great appreciation the many years
of dedicated service by Mr. Shulman, my father.
I wish to thank our shareholders for their loyalty, our Directors for their
guidance and our employees for their diligence. We will continue to strive to
produce the kind of results that will merit your support.
I look forward to reporting on our progress to you next year.
Sincerely,
/s/ LLOYD J. SHULMAN
- --------------------
Lloyd J. Shulman
Chairman
3
<PAGE>
J.W. MAYS, INC.
CONSOLIDATED BALANCE SHEETS
July 31, 1997 and 1996
ASSETS
1997 1996
----------- -----------
Property and Equipment--at cost (Notes 1 and 3):
Buildings and improvements ...................... $34,944,039 $31,988,028
Improvements to leased property ................. 9,143,369 9,131,836
Fixtures and equipment .......................... 510,108 493,748
Land ............................................ 4,008,835 4,008,835
Other ........................................... 180,382 171,183
----------- -----------
48,786,733 45,793,630
Less accumulated depreciation and amortization .. 20,660,899 19,713,124
----------- -----------
Property and equipment--net ................. 28,125,834 26,080,506
----------- -----------
Current Assets:
Cash and cash equivalents (Notes 11 and 12) ..... 234,288 412,653
Marketable securities--other investments
(Notes 1, 2, 9 and 12) ........................ 2,721,127 2,792,800
Receivables (Note 7) ............................ 563,410 315,179
Deferred income taxes (Notes 1 and 5) ........... 67,000 67,000
Security deposits ............................... -- 305,737
Prepaid expenses ................................ 1,150,916 1,171,896
Income taxes refundable ......................... -- 4,496
Real estate taxes refundable .................... -- 13,409
----------- -----------
Total current assets ........................ 4,736,741 5,083,170
----------- -----------
Other Assets:
Deferred charges (Note 1) ....................... 2,745,524 2,414,194
Less accumulated amortization ................... 1,030,351 883,229
----------- -----------
Net ......................................... 1,715,173 1,530,965
Security deposits (Note 12) ..................... 589,492 581,384
Unbilled receivables (Notes 1 and 7) ............ 3,651,795 3,171,920
Unbilled receivables--affiliated company (Note 7) 909,688 954,516
Receivables ..................................... 384,088 --
Receivables--affiliated company (Note 7) ........ 194,453 194,453
Marketable securities--other investments
(Notes 1, 2, 9 and 12) ......................... 98,716 98,056
Deferred income taxes (Notes 1 and 5) ........... -- 76,000
----------- -----------
Total other assets .......................... 7,543,405 6,607,294
----------- -----------
TOTAL ASSETS ................................ $40,405,980 $37,770,970
=========== ===========
See Notes to Consolidated Financial Statements.
4
<PAGE>
LIABILITIES AND SHAREHOLDERS' EQUITY
1997 1996
----------- -----------
Long-Term Debt:
Mortgages payable (Notes 3 and 12) ................ $ 8,641,833 $ 6,964,717
Other (Note 4) .................................... 640,868 733,972
----------- -----------
Total long-term debt .......................... 9,282,701 7,698,689
----------- -----------
Deferred Income Taxes (Notes 1 and 5) ............... 326,000 --
----------- -----------
Current Liabilities:
Payable to securities broker (Notes 9 and 12) ..... 1,270,053 1,497,320
Accounts payable .................................. 46,256 32,460
Payroll and other accrued liabilities (Note 8) .... 553,215 546,370
Income taxes payable (Notes 1 and 5) .............. 11,436 --
Other taxes payable ............................... 1,918 5,194
Current portion of long-term debt--other
(Note 4) ......................................... 104,000 366,404
Current portion of long-term debt--mortgages
payable (Notes 3 and 12) ........................ 780,365 483,450
----------- -----------
Total current liabilities ..................... 2,767,243 2,931,198
----------- -----------
Total liabilities ............................. 12,375,944 10,629,887
----------- -----------
Shareholders' Equity:
Common stock, par value $1 each share
(shares--5,000,000 authorized;
2,178,297 issued) .............................. 2,178,297 2,178,297
Additional paid in capital ........................ 3,346,245 3,346,245
Unrealized gain on available for sale
securities (Notes 1 and 2) ...................... 101,151 17,261
Retained earnings ................................. 22,694,445 21,883,520
----------- -----------
28,320,138 27,425,323
Less common stock held in treasury, at cost--
42,517 shares at 1997 and 41,900 at 1996 ......... 290,102 284,240
----------- -----------
Total shareholders' equity .................... 28,030,036 27,141,083
----------- -----------
Commitments (Notes 6 and 7) and Contingencies
(Note 13)
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY ... $40,405,980 $37,770,970
=========== ===========
5
<PAGE>
<TABLE>
J.W. MAYS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS AND RETAINED EARNINGS
<CAPTION>
Years Ended July 31,
-----------------------------------------
1997 1996 1995
----------- ----------- -----------
<S> <C> <C> <C>
Revenues
Rental income (Notes 1 and 7) ........................ $10,080,382 $ 9,268,768 $ 8,330,182
----------- ----------- -----------
Expenses
Real estate operating expenses (Note 6) .............. 5,873,719 5,678,653 5,580,161
Administrative and general expenses .................. 1,939,303 2,007,987 2,100,800
Bad debts (recovery) (Note 13) ....................... (418,789) 424,011 56,810
Depreciation and amortization ........................ 966,628 888,932 838,063
----------- ----------- -----------
Total expenses ................................. 8,360,861 8,999,583 8,575,834
----------- ----------- -----------
Income (loss) from operations before investment income,
interest expense and income taxes .................... 1,719,521 269,185 (245,652)
----------- ----------- -----------
Investment income and interest expense
Investment income (Notes 1 and 2) .................... 267,876 249,479 366,911
Interest expense (Notes 3 and 11) .................... 696,472 681,950 641,067
----------- ----------- -----------
(428,596) (432,471) (274,156)
----------- ----------- -----------
Income (loss) from operations before income taxes ..... 1,290,925 (163,286) (519,808)
Income taxes provided (benefit) (Notes 1 and 5) ....... 480,000 (22,000) (126,000)
----------- ----------- -----------
Income (loss) from operations before cumulative effect
of change in accounting principle .................... 810,925 (141,286) (393,808)
Cumulative effect of change in accounting principle:
Accounting for certain investments in debt and
equity securities (Note 1) .......................... -- -- 21,769
----------- ----------- -----------
Net income (loss) ..................................... 810,925 (141,286) (372,039)
Retained earnings, beginning of year .................. 21,883,520 22,024,806 22,396,845
----------- ----------- -----------
Retained earnings, end of year ........................ $22,694,445 $21,883,520 $22,024,806
=========== =========== ===========
Income (loss) per common share (Note 1):
Income (loss) from operations ........................ $ .38 $ (.07) $ (.18)
Cumulative effect of change in accounting principle:
Accounting for certain investments in debt and
equity securities .................................. -- -- .01
----------- ----------- -----------
Net income (loss) per common share ............. $ .38 $ (.07) $ (.17)
=========== =========== ===========
Dividends per share ................................... -- -- --
=========== =========== ===========
Average common shares outstanding ..................... 2,136,175 2,136,397 2,136,397
=========== =========== ===========
</TABLE>
See Notes to Consolidated Financial Statements.
6
<PAGE>
J.W. MAYS, INC.
<TABLE>
CONSOLIDATED STATEMENTS OF CASH FLOWS
<CAPTION>
Years Ended July 31,
----------------------------------------------
1997 1996 1995
=================================================================================================================
<S> <C> <C> <C>
Cash Flows From Operating Activities
Income (loss) from operations .............................. $ 810,925 $ (141,286) $ (393,808)
Adjustments to reconcile net income (loss) to net cash
provided (used) by operating activities:
Deferred income taxes .................................... 359,000 (124,000) (251,000)
Amortization of premium on marketable debt
securities .............................................. (417) 723 2,171
Realized loss (gain) on marketable securities ............ 2,618 6,642 (13,643)
Depreciation and amortization ............................ 966,628 888,932 838,063
Amortization of deferred expenses ........................ 229,344 238,134 127,131
Other assets--deferred expenses .......................... (413,552) (353,270) (107,469)
--security deposits .......................... 297,629 (428,480) (200,505)
--unbilled receivables ....................... (435,047) (100,001) (704,496)
--receivables ................................ (384,088) (84,766) 26,211
Changes in:
Receivables .............................................. (248,231) (70,187) 128,011
Prepaid expenses ......................................... 20,980 (50,202) 40,925
Real estate taxes refundable ............................. 13,409 (13,409) --
Income taxes refundable .................................. 4,496 (4,496) 22,005
Accounts payable ......................................... 13,796 (32,284) (26,786)
Payroll and other accrued liabilities .................... 6,845 58,414 (77,888)
Income taxes payable ..................................... 11,436 (18,588) 18,588
Other taxes payable ...................................... (3,276) 1,113 433
---------- ---------- ----------
Net cash provided (used) by operating activities ....... 1,252,495 (227,011) (572,057)
---------- ---------- ----------
Cash Flows From Investing Activities
Acquisition of property and equipment ...................... (3,011,956) (1,683,503) (982,150)
Marketable securities--other investments:
Receipts from sales or maturities ......................... 246,994 476,497 2,333,962
Payments for purchases .................................... (51,292) (427,692) (415,708)
---------- ---------- ----------
Net cash (used) provided by investing activities ...... (2,816,254) (1,634,698) 936,104
---------- ---------- ----------
Cash Flows From Financing Activities
Borrowings--mortgage and other notes payable ............... 2,500,000 1,500,000 --
Borrowings--securities broker .............................. 655,020 1,348,262 2,697,663
Payments--securities broker ................................ (882,287) (1,076,042) (2,596,076)
Increase (reduction) of mortgage debt and other
debt--short-term .......................................... 340,248 445,041 (178,354)
(Reduction) of mortgage and other debt--long-term .......... (1,221,725) (433,214) (399,254)
Purchase of treasury stock ................................. (5,862) -- --
---------- ---------- ----------
Net cash provided (used) by financing activities ....... 1,385,394 1,784,047 (476,021)
---------- ---------- ----------
Net (decrease) in cash and cash equivalents ................ (178,365) (77,662) (111,974)
Cash and cash equivalents at beginning of year ............. 412,653 490,315 602,289
---------- ---------- ----------
Cash and cash equivalents at end of year ................... $ 234,288 $ 412,653 $ 490,315
========== ========== ==========
</TABLE>
See Notes to Consolidated Financial Statements
7
<PAGE>
J.W. MAYS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
================================================================================
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
CONSOLIDATION: The consolidated financial statements include the accounts
of the Company and its subsidiaries, which are wholly-owned. Material
intercompany items have been eliminated in consolidation.
ACCOUNTING RECORDS: The accounting records are maintained in accordance
with generally accepted accounting principles (GAAP). The preparation of the
Company's financial statements in accordance with GAAP requires management to
make estimates that affect the reported consolidated statements of operations
and consolidated balance sheets and related disclosures. Actual results could
differ from those estimates.
RENTAL INCOME: All of the real estate owned by the Company is held for
leasing to tenants except for a small portion used for Company offices. Rent is
to be recognized from tenants under executed leases no later than on an
established date or on an earlier date if the tenant should commence conducting
business. Unbilled receivables represent the excess of scheduled rental income
recognized on a straight-line basis over rental income as it becomes receivable
according to the provisions of the lease.
MARKETABLE SECURITIES--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.
PROPERTY AND EQUIPMENT: Property and equipment are stated at cost.
Depreciation is calculated using the straight-line method and the declining
balance method. Amortization of improvements to leased property is calculated
over the shorter of the life of the lease or the estimated useful life of the
improvements. Lives used to determine depreciation and amortization are
generally as follows:
Building and improvements .................... 18-40 years
Improvements to leased property .............. 3-40 years
Fixtures and equipment ....................... 7-12 years
Other ........................................ 3-5 years
Maintenance, repairs, renewals and improvements of a non-permanent nature are
charged to expense when incurred. Expenditures for additions and major renewals
or improvements are capitalized. The cost of assets sold or retired and the
accumulated depreciation or amortization thereon are eliminated from the
respective accounts in the year of disposal, and the resulting gain or loss is
credited or charged to income. Interest is capitalized in connection with the
construction/renovations of real property. The capitalized interest is recorded
as part of the asset to which it relates and will be amortized over the asset's
estimated useful life.
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 adoption of the new
accounting standard has not had any effect on the consolidated financial
statements.
DEFERRED CHARGES: Deferred charges consist principally of costs incurred in
connection with the leasing of property to tenants. Such costs are amortized
over the related lease periods using the straight-line method.
INCOME TAXES: Deferred income taxes are provided for the temporary
differences between the financial reporting basis and the tax basis of the
Company's assets and liabilities. Deferred tax assets result principally from
the recording of certain accruals and reserves which currently are not
deductible for tax purposes. Deferred tax liabilities result principally from
temporary differences in the recognition of gains and losses from certain
investments and from the use, for tax purposes, of accelerated depreciation.
INCOME (LOSS) PER SHARE OF COMMON STOCK: Income (loss) per share has been
computed by dividing net income or loss for the year by the weighted average
number of shares of common stock outstanding during the year, adjusted for the
purchase of treasury stock. Shares used in computing income or (loss) per share
were 2,136,175 in fiscal 1997 and 2,136,397 in fiscal 1996 and 1995.
8
<PAGE>
<TABLE>
================================================================================
RECLASSIFICATIONS: Certain accounts for years ended July 31, 1996 and 1995
have been reclassified to reflect comparability with account classifications
adopted for the year ended July 31, 1997 with no effect on previously reported
net income.
2. MARKETABLE SECURITIES -- OTHER INVESTMENTS:
As of July 31, 1997 and 1996, the Company's marketable securities were
classified as follows:
<CAPTION>
1997 1996
------------------------------------------------- --------------------------------------------
GROSS GROSS Gross Gross
UNREALIZED UNREALIZED FAIR Unrealized Unrealized Fair
COST GAINS LOSSES VALUE Cost Gains Losses Value
---------- -------- ------ ---------- ---------- ------- ------ ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Current:
Available for sale:
Equity securities ........... $2,540,688 $152,151 $ -- $2,692,839 $2,675,300 $25,261 $ -- $2,700,561
Certificate of deposit ...... 28,288 -- -- 28,288 26,996 -- -- 26,996
---------- -------- ------ ---------- ---------- ------- ------ ----------
Total ..................... 2,568,976 152,151 -- 2,721,127 2,702,296 25,261 -- 2,727,557
Held to maturity:
Corporate debt securities
due within one year ........ -- -- -- -- 65,243 79 -- 5,322
---------- -------- ------ ---------- ---------- ------- ------ ----------
Total current ............. $2,568,976 $152,151 $ -- $2,721,127 $2,767,539 $25,340 $ -- $2,792,879
========== ======== ====== ========== ========== ======= ====== ==========
Noncurrent:
Held to maturity:
Corporate debt
securities ................ $ 98,716 $ 3,971 $ -- $ 102,687 $ 98,056 $ 3,644 $ -- $ 101,700
========== ======== ====== ========== ========== ======= ====== ==========
</TABLE>
Investment income consists of the following:
1997 1996 1995
-------- -------- --------
Interest income .................... $ 48,642 $ 43,294 $157,788
Dividend income .................... 221,852 212,827 195,480
(Loss) Gain on sale of securities .. (2,618) (6,642 13,643
-------- -------- --------
Total ............................ $267,876 $249,479 $366,911
======== ======== ========
3. LONG-TERM DEBT:
<TABLE>
<CAPTION>
JULY 31, 1997 July 31, 1996
---------------------- ----------------------
Current
Annual Final DUE DUE Due Due
Interest Payment WITHIN AFTER Within After
Rate Date ONE YEAR ONE YEAR One Year One Year
------- ------ -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Term-loan payable to bank ......... (a) Variable 2/1/07 $ -- $ -- $ 20,682 $1,479,318
Mortgages:
Jamaica, New York Property ....... (b) 8 1/2% 4/01/07 266,667 3,666,666 -- --
Jowein Building, Brooklyn, N.Y. .. (c) 9 % 3/31/00 76,431 758,595 83,825 831,560
Fishkill, New York Property ...... (d) 9 % 11/01/99 118,844 2,442,584 108,651 2,561,428
Circleville, Ohio Property ....... (e) 7 % 9/30/02 310,233 1,580,714 262,767 1,890,947
Other ............................ 8 1/2% 5/01/01 8,190 193,274 7,525 201,46
-------- ---------- -------- ----------
Total ......................... $780,365 $8,641,833 $483,450 $6,964,717
======== ========== ======== ==========
</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 Company had taken down the $1,500,000 and repaid the amount on September 11,
1996 (see Note 3(b) below). There was no prepayment penalty for early repayment
of the loan.
(b) The Company, on September 11, 1996, closed a loan with a bank in the
amount of $4,000,000. The loan is secured by a first mortgage lien covering the
entire leasehold interest of the Company, as tenant, in a certain ground lease
and building in the Jamaica property. The loan proceeds were utilized by the
Company toward (i) payment in full of the outstanding term loan by the Company
in favor of the same bank in the amount of $1,500,000 plus interest (see Note
3(a) above) and (ii) its costs for the renovations to the portions of the
premises in connection with the Company's
9
<PAGE>
================================================================================
sublease of a significant portion of the building. Although the loan was closed
on September 11, 1996 the entire $4,000,000 was not drawn down until March 31,
1997. The interest rate on the loan is 8 1/2% for a period of five (5) years and
six (6) months, with such rate to change on the first day of the sixty-seventh
(67th) month of the term to a rate equal to the then prime rate plus 1/4%,
fixed for the balance of the term. The loan is to become due and payable on the
first day of the month following the expiration of ten (10) years and six (6)
months from the closing date. During the first six (6) months of the term, the
Company had the option to secure advances against the loan amount with the loan
to convert to a ten (10) year term at the expiration of the initial six (6)
month period thereof.
Payments are payable in arrears, on the first day of each and every month
during the term, calculated (i) during the initial six (6) month period of the
term, interest only, and (ii) during the final ten (10) year period of the term,
at the sum of the interest plus amortization sufficient to fully liquidate the
loan over a fifteen (15) year period. As additional security, the Company
conditionally assigned to the bank certain leases and rents on the premises, or
portions thereof, now existing and assigned certain leases on the premises
hereafter consummated. The Company has an option to prepay the 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 loan agreement provide certain restrictions on the
incurrence of indebtedness and the sale or transfer of the Company's ground
lease interest in the premises.
(c) Mortgage is held by an affiliated corporation owned by members,
including certain directors of the Company, of the family of the late Joe
Weinstein, former Chairman of the Board of Directors. Interest and amortization
of principal are paid quarterly. Effective April 1, 1997, the maturity date of
the mortgage which was scheduled to be on March 31, 1998, was extended to March
31, 2000. The interest rate was increased from 7 3/8% to 9% commencing April 1,
1997. During the extended period there will be no change in the constant
quarterly payments of interest and principal in the amount of $37,263.
(d) 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 (5) 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 (15) year payout period.
(e) 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 will increase to $36,540.
Maturities of long-term debt--mortgages payable, outstanding at July 31,
1997, are as follows: Years ending July 31, 1998 (included in current
liabilities), $780,365; 1999, $827,673; 2000, $3,627,040; 2001, $830,597; 2002,
$684,080, and thereafter, $2,672,443.
4. LONG-TERM DEBT--OTHER:
Long-Term debt--Other consists of the following:
1997 1996
-------- --------
Deferred compensation ..................... $355,333* $459,333*
Lease security deposits ................... 285,535** 274,639**
-------- --------
Total ................................. $640,868 $733,972
======== ========
Maturities of long-term debt--other, outstanding at July 31, 1997, are as
follows: Years ending July 31, 1998 (included in current liabilities), $104,000;
1999, $112,267; 2000, $212,187; 2001, $178,873; 2002, $43,333; and thereafter,
$94,208.
- ------------------
* The Company entered into a deferred compensation agreement with Max L.
Shulman, its then Chairman of the Board. This agreement, as amended, provides
for $520,000 to be paid in monthly installments of $8,666.67 for a period of
60 months, payable upon the expiration of his employment, retirement or
permanent disability as defined in the agreement, or death. Mr. Shulman
retired December 31, 1996 and the monthly payments commenced January, 1997.
** Does not include three irrevocable letters of credit totaling $275,000 at
July 31, 1997, and two irrevocable letters of credit totaling $110,000 at
July 31, 1996, provided by three and two tenants, respectively.
10
<PAGE>
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5. INCOME TAXES:
Significant components of the Company's deferred tax assets and
liabilities as of July 31, 1997 and 1996, are a result of temporary differences
related to the items described as follows:
<TABLE>
<CAPTION>
1997 1996
--------------------------- -----------------------------
DEFERRED DEFERRED Deferred Deferred
TAX ASSETS TAX LIABILITIES Tax Assets Tax Liabilities
---------- --------------- ---------- ---------------
<S> <C> <C> <C> <C>
Net operating loss
carryforward ................ $1,915,163 $ -- $2,108,362 $ --
Alternative minimum
tax credit carryforward ..... 252,633 -- 246,369 --
Investment tax credit
carryforward ................ 26,952 -- 41,597 --
Deferred compensation not
currently deductible ........ 156,173 -- 176,800 --
Rental income received in
advance ..................... 7,713 -- 16,601 --
Bad debts .................... -- -- 44,138 --
Unbilled receivables ......... -- 1,550,904 -- 1,402,988
Property and equipment ....... -- 1,010,288 -- 1,068,094
Unrealized gain on available
for sale securities ......... -- 51,731 -- 8,589
Other ........................ 22,241 -- 30,438 37
---------- ---------- ---------- ----------
2,380,875 2,612,923 2,664,305 2,479,708
Valuation allowance .......... 26,952 -- 41,597 --
---------- ---------- ---------- ----------
$2,353,923 $2,612,923 $2,622,708 $2,479,708
========== ========== ========== ==========
</TABLE>
The Company has determined, based on its history of operating earnings and
expectations for the future, that it is more likely than not that future taxable
income will be sufficient to fully utilize the deferred tax assets at July 31,
1997, except for investment tax credit carryforwards, for which a 100% valuation
allowance has been provided. The valuation allowance was reduced by $14,645 in
1997 and $75,501 in 1996 due to the expiration of investment tax credit
carryforwards.
Income taxes provided (benefit) in fiscal 1997, 1996 and 1995 consisted of:
1997 1996 1995
-------- --------- ---------
Current:
Federal ........................... $ 6,000 $ (7,000) $ --
State and City .................... 115,000 109,000 125,000
Deferred taxes ..................... 359,000 (124,000) (251,000)
-------- --------- ---------
Total provision or (benefit) .... $480,000 $ (22,000) $(126,000)
======== ========= =========
Components of the deferred tax provision (benefit) for the years ended July
31, 1997, 1996 and 1995 are as follows:
1997 1996 1995
--------- --------- ---------
Excess of book depreciation over
tax depreciation ................... $ (58,000) $ (25,000) (3,000)
Reduction of rental income received
in advance ......................... 9,000 2,000 5,000
Increase in unbilled receivables .... 148,000 34,000 240,000
Unrealized gain on marketable
securities ......................... -- -- 14,000
Net operating loss carryforwards .... 193,000 (114,000) (474,000)
Bad debts ........................... 44,000 -- (15,000)
Other ............................... 23,000 (21,000) (18,000)
--------- --------- ---------
$ 359,000 $(124,000) $(251,000)
========= ========= =========
Taxes provided (benefit) for the years ended July 31, 1997, 1996 and 1995
differ from amounts which would result from applying the federal statutory tax
rate to pre-tax income (loss), as follows:
1997 1996 1995
---------- --------- ---------
Income (loss) from operations
before income taxes ............... $1,290,925 $(163,286) $(519,808)
Dividends received deduction ....... (117,959) (110,259) (96,442)
Other-net .......................... 13,777 (1,600) 3,015
---------- --------- ---------
Adjusted pre-tax income (loss) ..... 1,186,743 $(275,145) $(613,235)
Statutory rate ..................... 34% 34% 34%
---------- --------- ---------
Income tax provision (benefit)
at statutory rate ................. 403,500 $ (93,500) $(208,500)
State and City income taxes,
net of federal income tax benefit . 76,500 71,500 82,500
---------- --------- ---------
Income taxes provided (benefit) .... $ 480,000 $ (22,000) $(126,000)
========== ========= =========
11
<PAGE>
================================================================================
The Company's 1997 federal income tax liability of $6,000 was determined
using the Alternative Minimum Tax ("AMT"), a separate parallel tax system. The
excess of the AMT over the regular tax is a credit which can be carried forward
indefinitely to reduce future regular tax liabilities. The Company has
additional AMT credits from prior years totaling $246,000 resulting in total AMT
credits of $252,000 at July 31, 1997.
At July 31, 1997, the Company has net operating tax loss carryforwards of
$5,633,000 available to offset future regular taxable income. Of this amount
$642,000 is available until the year 2003, $2,057,000 until 2005, $1,028,000
until 2006, $175,000 until 2009, $1,395,000 until 2010, and $336,000 until 2011.
Although the Tax Reform Act of 1986 eliminated investment tax credits for
non-transitional property placed in service after December 31, 1985, the Company
has investment tax credit carryforwards of $27,000 that expire as follows:
$2,000 in 1998, $16,000 in 1999 and $9,000 in 2000.
6. LEASES:
The Company's real estate operations encompass both owned and leased
properties. The current leases on leased property, most of which have options to
extend the term, range from 2 years to 21 years. Certain of the leases provide
for additional rentals under certain circumstances and obligate the Company for
payments of real estate taxes and other expenses.
Rental expense for leased real property for each of the three fiscal years
ended July 31, 1997 was exceeded by sublease rental income, as follows:
1997 1996 1995
---------- ---------- ----------
Minimum rental expense ............. $1,155,644 $1,155,120 $1,133,896
Contingent rental expense .......... 1,266,880 1,252,684 1,278,773
---------- ---------- ----------
2,422,524 2,407,804 2,412,669
Sublease rental income ............. 4,798,895 4,108,307 3,540,588
---------- ---------- ----------
Excess of rental income
over expense .................. $2,376,371 $1,700,503 $1,127,919
========== ========== ==========
Rent expense for operating leases include $160,800 for fiscal 1997,
$160,800 for fiscal 1996 and $141,300 for fiscal 1995, representing rentals with
affiliated companies.
Future minimum non-cancellable rental commitments for operating leases with
initial or remaining terms of one year or more are payable as follows:
Fiscal OPERATING
Year LEASES
------ -----------
1998 ........................................... $ 1,143,340
1999 ........................................... 1,143,340
2000 ........................................... 1,143,340
2001 ........................................... 1,087,174
2002 ........................................... 1,031,007
After 2002 ..................................... 8,930,166
-----------
Total required* ............................ $14,478,367
===========
* Minimum payments have not been reduced by minimum sublease rentals of
$38,657,120 under operating leases due in the future under non-cancellable
leases.
7. RENTAL INCOME:
Rental income from Company owned property includes $413,609 for the fiscal
year 1997, $413,609 for the fiscal year 1996 and $385,720 for the fiscal year
1995 representing rentals from an affiliated company.
Amounts due from the affiliated company are as follows:
July 31,
-----------------------------------
1997 1996 1995
---------- ---------- ----------
Unbilled receivables ............. $ 909,688 $ 954,516 $ 999,344
Receivables-noncurrent ........... 194,453 194,453 109,687
---------- ---------- ----------
Total ........................ $1,104,141 $1,148,969 $1,109,031
========== ========== ==========
12
<PAGE>
================================================================================
Rental income for the years 1997, 1996 and 1995 is as follows:
July 31,
------------------------------------
1997 1996 1995
----------- ---------- ----------
Minimum rentals
Company owned property ........ $ 4,713,783 $4,584,959 $4,254,489
Operating leases .............. 4,036,156 3,443,822 2,955,906
----------- ---------- ----------
8,749,939 8,028,781 7,210,395
----------- ---------- ----------
Contingent rentals
Company owned property ........ 567,704 575,502 535,105
Operating leases .............. 762,739 664,485 584,682
----------- ---------- ----------
1,330,443 1,239,987 1,119,787
----------- ---------- ----------
Total ....................... $10,080,382 $9,268,768 $8,330,182
=========== ========== ==========
Future minimum non-cancellable rental income for leases with initial or
remaining terms of one year or more is as follows:
Fiscal COMPANY OPERATING
Year OWNED PROPERTY LEASES TOTAL
---- -------------- ----------- -----------
1998 ........................ $ 4,782,617 $ 4,576,969 $ 9,359,586
1999 ........................ 4,352,994 4,174,239 8,527,233
2000 ........................ 3,846,444 3,775,999 7,622,443
2001 ........................ 3,670,518 3,709,840 7,380,358
2002 ........................ 3,510,134 3,526,680 7,036,814
After 2002 .................. 21,064,632 18,893,393 39,958,025
----------- ----------- -----------
Total ................... $41,227,339 $38,657,120 $79,884,459
=========== =========== ===========
8. PAYROLL AND OTHER ACCRUED LIABILITIES:
Payroll and other accrued liabilities consist of the following:
1997 1996
-------- --------
Payroll .......................................... $ 83,891 $122,435
Interest ......................................... 69,348 93,337
Professional fees ................................ 58,525 75,317
Rents received in advance ........................ 22,685 93,271
Utilities ........................................ 45,378 20,570
Construction costs ............................... 21,000 42,869
Brokers commissions .............................. 208,571 63,368
Other ............................................ 43,817 35,203
-------- --------
Total ....................................... $553,215 $546,370
======== ========
9. PAYABLE TO SECURITIES BROKER:
The Company borrowed funds, payable on demand, from a securities broker.
The loan balance at July 31, 1997 in the amount of $1,270,053, secured by the
Company's marketable securities, accrues interest, which at July 31, 1997, was
at the annual rate of 7 3/4%.
10. EMPLOYEES' RETIREMENT PLAN:
The Company sponsors a noncontributory Money Purchase Plan covering
substantially all of its employees. Operations were charged $132,273, $132,234
and $137,474 as contributions to the Plan for fiscal years 1997, 1996 and 1995,
respectively.
13
<PAGE>
================================================================================
11. CASH FLOW INFORMATION:
For purpose of reporting cash flows, the Company considers cash equivalents
to consist of short-term highly liquid investments with maturities of three
months or less, which are readily convertible into cash.
Supplemental disclosure:
Years Ended July 31,
---------------------------------
1997 1996 1995
-------- -------- --------
Interest paid, net of capitalized
interest of $45,845 (1997) ......... $720,461 $686,644 $647,348
Income taxes paid ................... $105,068 $125,084 $ 84,407
12. FINANCIAL INSTRUMENTS AND CREDIT RISK CONCENTRATIONS:
The following disclosure of estimated fair value was determined by the
Company, using available market information and appropriate valuation methods.
Considerable judgment is necessary to develop estimates of fair value. The
estimates presented herein are not necessarily indicative of the amounts that
could be realized upon disposition of the financial instruments.
The Company estimates the fair value of its financial instruments using the
following methods and assumptions: (1) quoted market prices, when available, are
used to estimate the fair value of investments in marketable debt and equity
securities; (2) discounted cash flow analyses are used to estimate the fair
value of long-term debt, using the Company's estimate of current interest rates
for similar debt; and (3) carrying amounts in the balance sheet approximate fair
value for cash and cash equivalents and tenant security deposits due to their
high liquidity.
JULY 31, 1997
-------------------------
CARRYING FAIR
VALUE VALUE
---------- ----------
Cash and cash equivalents .......... $ 234,288 $ 234,288
Marketable securities .............. 2,819,843 2,823,814
Tenant security deposits ........... 285,535 285,535
Payable to securities broker ....... (1,270,053) (1,270,053)
Long-term debt-mortgages payable ... (9,422,198) (9,549,476)
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 thirty-two tenants, of which two
tenants each accounted for more than 10% of rental income during the year ended
July 31, 1997. The City of New York is one of the tenants and the other tenant
is 510 Fulton Street Realty Associates, the owners of which are long established
in business.
13. CONTINGENCIES:
McCrory Stores Corporation ("McCrory"), which occupied space in the
Company's Jowein Building in the Fulton Mall in downtown Brooklyn, New York, and
whose lease, as amended, extended to April 29, 2010, filed for relief under
Chapter 11 of the Bankruptcy Code in February 1992. McCrory rejected its lease,
as amended, with the Company with the approval of the Bankruptcy Court effective
January 31, 1994. The Company has filed a proof of claim with the United States
Bankruptcy Court, Southern District of New York in the total amount of
$7,753,732 for damages arising from the rejection of the lease ("Lease Rejection
Claim") and a proof of claim in the amount of $86,650 for pre-petition unpaid
rent, which amount has been allowed in the reduced amount of $84,354, without
prejudice to McCrory's right to assert other and further objections. The Company
has also filed an administrative claim in the amount of approximately $296,000
("Administrative Claim") for damages resulting from McCrory's failure to repair
and maintain the premises as required by the lease. McCrory objected to the
Company's Lease Rejection Claim and Administrative Claim and asserts that no
amount is due and owing. The Company has not included its claims against McCrory
in its financial statements due to (a) the fact that McCrory has disclosed that
it is liquidating and that its assets are insufficient to make any distributions
to unsecured creditors or to satisfy in full the administrative claims asserted
against McCrory, (b) the pending litigation over the Lease Rejection Claim and
Administrative Claim; and (c) the uncertainty of the amount that may ultimately
be allowed and collected. The Company has leased approximately 69,000 square
feet of the approximate 99,000 square feet of space surrendered by McCrory. The
remainder of the space of approximately 30,000 square feet is not leasable due
to the renovations required to accommodate six tenants where formerly there was
one. The rental income to be derived from the six tenants over the terms of
their leases will be approximately $5,040,000 less than the total rental income
that would have been due from McCrory for the period February 1, 1994 through
April 29, 2010, the termination date of the McCrory lease.
14
<PAGE>
================================================================================
Jamesway Corporation ("Jamesway"), which occupied retail space in the
Fishkill, New York property and whose lease extended to January 31, 2005, filed
for relief under Chapter 11 of the Bankruptcy Code on October 18, 1995. Jamesway
rejected its lease for the Fishkill location with the approval of the Bankruptcy
Court, effective February 29, 1996 but continued occupancy until March 22, 1996.
The Company had filed an amended unsecured claim in the amount of $883,635 for
damages resulting from the breach and rejection of the lease and an
administrative priority claim in the amount of approximately $189,000 for
certain amounts due under the lease after the filing of Jamesway's Chapter 11
petition and for the costs of repairs resulting from Jamesway's failure to
fulfill its repair and maintenance obligations under the lease. Pursuant to a
settlement that was approved by the court, the Company has an allowed unsecured
claim in the amount of $950,635 and an allowed administrative claim in the
amount of $54,887. The Company has realized, to date, $418,279 or 44% on account
of its unsecured claim and 100% of its allowed administrative claim for a total
of $473,166 . The amount of $418,789 recorded in Bad Debt Recovery represents
the amount realized of $473,166 less legal expenses of $22,406 and a previously
recorded pre-petition rental obligations claim of $31,971. The Company has made
no provision in its financial statements for the balance of its unsecured claim
filed against Jamesway due to the uncertainty of the amount that may ultimately
be collected.
The Company reports scheduled rental income recognized on a straight-line
basis rather than rental income as it becomes a 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 McCrory, recognized on a straight-line basis over
rental income receivable according to the lease through January 31, 1994, the
effective date of McCrory's rejection of its lease, amounts to $708,673 and such
amount was written off and classified as a bad debt during the twelve month
period ended July 31, 1994. The excess of the scheduled rental income of
Jamesway recognized on a straight-line basis over rental income receivable
according to the lease through January 31, 1996, amounted to $424,011 and such
amount was written off and classified as a bad debt during the twelve month
period ended July 31, 1996.
There are various lawsuits and claims pending against the Company. It is
the opinion of management that the resolution of these matters will not have a
material adverse effect on the Company's Consolidated Financial Statements.
15
<PAGE>
INDEPENDENT AUDITOR'S REPORT
To the Board of Directors and Shareholders
J.W. Mays, Inc. and Subsidiaries
We have audited the accompanying consolidated balance sheets of J.W. Mays,
Inc. and subsidiaries as ofJuly 31, 1997 and 1996, and the related consolidated
statements of operations and retained earnings and cashflows for the years then
ended. These consolidated financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
consolidated financial statements based onour audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the consolidated financial statements are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the consolidated financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of J.W. Mays,
Inc. and its subsidiaries as of July 31, 1997 and 1996, and the results of their
operations and their cash flows for the years then ended in conformity with
generally accepted accounting principles.
D'ARCANGELO & CO., LLP
Purchase, New York
October 3, 1997
================================================================================
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Shareholders
J.W. Mays, Inc.
We have audited the accompanying consolidated balance sheet of J.W. Mays,
Inc. and its subsidiaries as of July 31, 1995 and the related consolidated
statements of operations and retained earnings, and cash flows for the year
ended July 31, 1995. These consolidated financial statements were the
responsibility of the Company's management. Our responsibility was to express an
opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of J.W. Mays,
Inc. and its subsidiaries as at July 31, 1995 and the results of their
operations and their cash flows for the year ended July 31, 1995, in conformity
with generally accepted accounting principles.
As described in Note 1 to the consolidated financial statements, on August
1, 1994, the Company changed its method of accounting for marketable
securities--other investments.
LIPSKY, GOODKIN & CO., P.C.
New York, New York
October 12, 1995 (except with respect to the
matter discussed in Note 16(b) to the 1995
Consolidated Financial Statements, as to which the
date is October 18, 1995). See paragraphs 6 and 7
of Note 12 to the 1997 Consolidated Financial
Statements for events subsequent to October 18, 1995.
16
<PAGE>
J.W. MAYS, INC.
<TABLE>
FIVE YEAR SUMMARY OF CONSOLIDATED OPERATIONS
(dollars in thousands except per share data)
<CAPTION>
Years Ended July 31,
-----------------------------------------------------------------
1997 1996 1995 1994 1993
---------- ---------- ---------- ---------- ---------
<S> <C> <C> <C> <C> <C>x
Revenues
Rental income .......................................... $ 10,080 $ 9,269 $ 8,330 $ 9,523 $ 10,030
Gain on sale of property and equipment ................. -- -- -- -- 1
Gain on condemnation award ............................. -- -- -- -- 639
---------- ---------- ---------- ---------- ---------
Total revenues ....................................... 10,080 9,269 8,330 9,523 10,670
---------- ---------- ---------- ---------- ---------
Expenses
Real estate operating expenses ......................... 5,874 5,679 5,580 5,612 5,509
Administrative and general expenses .................... 1,939 2,008 2,101 2,131 2,053
Bad debts (recovery) ................................... (419) 424 57 709 22
Depreciation and amortization .......................... 967 889 838 823 748
---------- ---------- ---------- ---------- ---------
Total expenses ....................................... 8,361 9,000 8,576 9,275 8,332
---------- ---------- ---------- ---------- ---------
Income (loss) from continuing operations before
investment income, interest expense and
income taxes ........................................... 1,719 269 (246) 248 2,338
---------- ---------- ---------- ---------- ---------
Investment income and interest expense
Investment income ...................................... 268 250 367 385 562
Interest expense ....................................... 696 682 641 597 564
---------- ---------- ---------- ---------- ---------
(428) (432) (274) (212) (2)
---------- ---------- ---------- ---------- ---------
Income (loss) from continuing operations before
income taxes ........................................... 1,291 (163) (520) 36 2,336
Income taxes provided (benefit) ......................... 480 (22) (126) 68 872
---------- ---------- ---------- ---------- ---------
Income (loss) from continuing operations ................ 811 (141) (394) (32) 1,464
---------- ---------- ---------- ---------- ---------
Income (loss) from operations before extraordinary
item and cumulative effect of changes in
accounting principles .................................. 811 (141) (394) (32) 1,464
Accounting for certain investments in debt
and equity securities ................................ -- -- 22 -- --
Accounting for income taxes ........................... -- -- -- (275) --
Extraordinary Item--utilization of net operating
loss carryforward ...................................... -- -- -- -- 709
---------- ---------- ---------- ---------- ---------
Net Income (loss) ....................................... $ 811 (141) $ (372) $ (307) $ 2,173
========== ========== ========== ========== =========
Income (loss) per common share
Income (loss) from operations .......................... $ .38 $ (.07) $ (.18) $ (.02) $ .67
Cumulative effect of changes in accounting principles:
Accounting for certain investments in debt
and equity securities ................................. -- -- .01 -- --
Accounting for income taxes ............................ -- -- -- (.13) --
Extraordinary item--utilization of net operating
loss carryforward ..................................... -- -- -- -- .33
---------- ---------- ---------- ---------- ---------
Net income (loss) per common share ................... $ .38 $ (.07) $ (.17) $ (.15) $ 1.00
========== ========== ========== ========== =========
Dividends per share ..................................... -- -- -- -- --
========== ========== ========== ========== =========
Average common shares outstanding ....................... 2,136,175 2,136,397 2,136,397 2,137,440 2,171,124
========== ========== ========== ========== =========
</TABLE>
17
<PAGE>
J.W. MAYS, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
================================================================================
FISCAL 1997 COMPARED TO FISCAL 1996
Income for the year ended July 31, 1997 amounted to $810,925, or $.38 per
share, after a pre-tax bad debt recovery of $418,789, compared to a loss for the
year ended July 31, 1996 in the amount of $141,286, or $.07 per share, after a
pre-tax bad debt write-off amounting to $424,011 relating to the rejection by a
tenant of its lease, discussed below. The above recovery relates to the same
rejected lease.
Rental income in the current year increased to $10,080,382 from $9,268,768
in the 1996 fiscal year principally due to the addition of new tenants.
Real estate operating expenses in the current year increased to $5,873,719
from $5,678,653 in the 1996 comparable year principally due to increased real
estate taxes, maintenance and fuel costs, and an allowed credit for utility
costs in the 1996 fiscal year.
Administrative and general expenses decreased to $1,939,303 from $2,007,987
principally due to a decrease in insurance and legal and professional expenses.
The bad debt recovery in the amount of $418,789 in fiscal 1997 relates to
the bad debt write-off of $424,011 in the 1996 year (discussed below). See Note
13 to the Consolidated Financial Statements (Jamesway).
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 amounted to $424,011 and such amount had been written off in
fiscal 1996 and classified as a bad debt.
Depreciation and amortization expense in the current year increased to
$966,628 from $888,932 in the 1996 year because of additional improvements to
property.
Interest expense exceeded investment income in the amount of $428,596 in
the current year and by $432,471 in the 1996 year.
FISCAL 1996 COMPARED TO FISCAL 1995
Loss from operations and the overall net loss for the year ended July 31,
1996 amounted to $141,286, or $.07 per share, after a pre-tax bad debt write-off
amounting to $424,011 relating to the rejection by a tenant of its lease,
discussed below. There was no comparable item in the 1995 twelve month period.
Operations for the comparable 1995 twelve month period resulted in an after tax
net loss of $393,808, or $.18 per share. The overall net loss for the 1995
twelve month period amounted to $372,039, or $.17 per share, after the
cumulative effect (an increase in 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 twelve month period.
Rental income in the 1996 fiscal year increased to $9,268,768 from
$8,330,182 in the 1995 twelve month period principally due to the addition of
new tenants.
Real estate operating expenses in the 1996 fiscal year increased to
$5,678,653 from $5,580,161 in the 1995 comparable year principally due to
increased maintenance and fuel costs, partially offset, by an allowed credit for
utility costs and a decrease in real estate taxes in the 1996 fiscal year.
Administrative and general expenses decreased to $2,007,987 from
$2,100,800.
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 in fiscal 1996.
18
<PAGE>
Depreciation and amortization expense in the 1996 fiscal year increased to
$888,932 from $838,063 in the 1995 year because of additional improvements to
property.
Interest expense exceeded interest income in the amount of $432,471 in the
1996 fiscal year and by $274,156 in the 1995 year principally due to the
increased interest on the broker loan discussed in Note 9 and the loan facility
discussed in Note 3(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.
CASH FLOWS FROM OPERATING ACTIVITIES
Receivables: The Company is due the amount of $571,314 as of July 31, 1997
for expenditures for renovations made on behalf of three tenants. Of this amount
$384,088 is non-current.
Other assets: Security Deposits--The Company refunded to a tenant that
vacated the premises at the Jowein Building, Brooklyn, New York its security
deposit in the amount of $305,737.
Deferred Expenses--The Company had an expenditure of approximately $152,000
for costs incurred to obtain loan financing for renovations to be performed at
the Jamaica, New York building to accommodate two new tenants, and approximately
$218,000 for brokerage leasing commissions relating to these same two tenants.
CASH FLOWS FROM INVESTING ACTIVITIES
Capital Expenditures: The Company had expenditures of approximately
$2,842,000 for renovations at its Jamaica, New York building for two new
tenants.
CASH FLOWS FROM FINANCING ACTIVITIES
Borrowing: Mortgage Debt--The Company took down a new loan in the net
aggregate amount of $2,500,000 from a bank to apply to the cost of renovations
to the Jamaica, New York building for two new tenants. (See Note 3(b) to the
Consolidated Financial Statements).
Lease Security: The Company refunded to a tenant that vacated its premises
in the Jowein Building, Brooklyn, New York its security deposit in the amount of
$305,737.
The leasing of 69,000 square feet of space in the Jowein Building located
in the Fulton Mall in downtown Brooklyn, New York to three chain store tenants
and two additional tenants for retail space and one tenant for office space, the
leasing of 25,000 square feet to the U. S. Post Office in Fishkill, New York and
the leasing to the State of New York of approximately 46,000 square feet of
office space for two tenants in the Company's former store in Jamaica, New York,
will provide additional working capital for the Company. The Jamaica leases
commenced May 1, 1997. To defray the costs of renovations for the State
occupancy, the Company borrowed from a bank the $2,500,000, noted above (See
Note 3(b) to the Consolidated Financial Statements).
The Company had working capital of $1,969,498 with a ratio of current
assets to current liabilities of 1.71 to 1 at July 31, 1997.
Management considers current working capital and borrowing capabilities
adequate to cover the Company's planned operating and capital requirements.
19
<PAGE>
J.W. MAYS, INC.
<TABLE>
QUARTERLY FINANCIAL INFORMATION (UNAUDITED)
(dollars in thousands except per share data)
<CAPTION>
Three months ended
------------------------------------------------------------------
Oct. 31, 1996 Jan. 31, 1997 Apr. 30, 1997 July 31, 1997
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Revenues ............................... $2,442 $2,473 $2,429 $2,736
Revenues less expenses ................. 163 123 93 912
Net income ............................. 100 100 18 593
Net income per common share ............ $ .05 $ .05 $ .01 $ .27
<CAPTION>
Three months ended
-----------------------------------------------------------------
Oct. 31, 1995 Jan. 31, 1996 Apr. 30, 1996 July 31, 1996
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Revenues ............................... $2,026 $2,468 $2,430 $2,345
Revenues less expenses ................. (87) (261) 36 149
Net income (loss) ...................... (70) (167) 4 91
Net income (loss) per common share ..... $ (.03) $ (.08) $ -- $ .04
</TABLE>
- ---------------
Income (loss) per share is computed independently for each of the quarters
presented, on the basis described in Note 1 to Consolidated Financial
Statements.
COMMON STOCK PRICES AND DIVIDENDS
The Company's common stock trades on the Nasdaq National Market tier of The
Nasdaq Stock Market under the Symbol: "Mays".
Following is the sales price range per share of J.W. Mays, Inc. common
stock during the fiscal years ended July 31, 1997 and 1996:
Sales Price
--------------
Three months ended High Low
------------------ ------ ------
October 31, 1996 .............................. 12 1/2 7 3/4
January 31, 1997 .............................. 10 3/4 7 7/8
April 30, 1997 ................................ 9 1/2 8 1/2
July 31, 1997 ................................. 10 1/2 8 1/4
October 31, 1995 .............................. 7 3/4 5 3/4
January 31, 1996 .............................. 8 6 3/8
April 30, 1996 ................................ 8 1/2 6 15/16
July 31, 1996 ................................. 8 1/2 7 1/2
The quotations were obtained for the respective periods from the National
Association of Securities Dealers, Inc.
There were no dividends declared in either of the two fiscal years.
On September 26, 1997, the Company had approximately 3,700 shareholders of
record.
20
<PAGE>
J.W. MAYS, INC.
================================================================================
OFFICERS
Lloyd J. Shulman Chairman of the Board, Chief Executive Officer and
President and Chief Operating Officer
Alex Slobodin Executive Vice President and Treasurer
Ward N. Lyke, Jr. Vice President--Management Information Services
George Silva Vice President--Operations
Salvatore Cappuzzo Secretary
Mark Greenblatt Controller and Assistant Treasurer
BOARD OF DIRECTORS
Frank J. Angell 1,2,3,4 Professor Emeritus, New York University Leonard N.
Stern School of Business
Lance D. Myers 2,3,4 Partner in the law firm of Cullen and Dykman
Jack Schwartz 1,2,3,4 Private Consultant
Lloyd J. Shulman 1,3,4 Chairman of the Board, Chief Executive Officer and
President and Chief Operating Officer,
J.W. Mays, Inc.
Max L. Shulman Retired Chairman of the Board, J.W. Mays, Inc.
Sylvia W. Shulman Retired Fashion Director and Merchandiser of Boutique
Shops, J.W. Mays, Inc.
Lewis D. Siegel 2,3,4 First Vice President, Smith Barney, Inc.
Alex Slobodin 1,3 Executive Vice President and Treasurer, J.W. Mays, Inc.
COMMITTEE ASSIGNMENTS KEY:
1 Member of Executive Committee
2 Member of Audit Committee
3 Member of Investment Advisory Committee
4 Member of Executive Compensation Committee
FORM 10-K ANNUAL REPORT
Copies of the Company's Form 10-K Annual Report
to the Securities and Exchange Commission
for the fiscal year ended July 31, 1997,
will be furnished without charge to
shareholders upon written request
to: Secretary, J.W. Mays, Inc.,
9 Bond Street, Brooklyn, New York 11201.
21
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the Annual
Report for the year ended July 31, 1997 and is qualified in its entirety by
reference to such Annual Report.
</LEGEND>
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> JUL-31-1997
<PERIOD-START> AUG-01-1996
<PERIOD-END> JUL-31-1997
<CASH> 234,288
<SECURITIES> 2,721,127
<RECEIVABLES> 563,410
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 4,736,741
<PP&E> 48,786,733
<DEPRECIATION> 20,660,899
<TOTAL-ASSETS> 40,405,980
<CURRENT-LIABILITIES> 2,767,243
<BONDS> 0
0
0
<COMMON> 2,178,297
<OTHER-SE> 25,851,739
<TOTAL-LIABILITY-AND-EQUITY> 40,405,980
<SALES> 0
<TOTAL-REVENUES> 10,080,382
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 8,360,861
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 696,472
<INCOME-PRETAX> 1,290,925
<INCOME-TAX> 480,000
<INCOME-CONTINUING> 810,925
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 810,925
<EPS-PRIMARY> .38
<EPS-DILUTED> .00
</TABLE>
