FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended January 31, 1997
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ________________ to ________________
Commission file number 1-3647
J.W. Mays, Inc.
(Exact name of registrant as specified in its charter)
New York 11-1059070
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
9 Bond Street, Brooklyn, New York 11201-5805
(Address of principal executive offices) (Zip Code)
(Registrant's telephone number, including area code) 718-624-7400
Not Applicable
(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter
period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.
Yes X . No .
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.
Class Outstanding at March 7, 1997
Common Stock, $1 par value 2,136,397 shares
This report contains 17 pages.
<PAGE>
J. W. MAYS, INC.
INDEX
Page No.
Part I - Financial Information:
Consolidated Balance Sheet 3
Consolidated Statement of Operations
and Retained Earnings 4
Consolidated Statement of Cash Flows 5
Notes to Consolidated Financial Statements 6 - 13
Management's Discussion and Analysis of Results
of Operations and Financial Condition 14 - 15
Part II - Other Information 16
<PAGE>
<TABLE>
<CAPTION>
J. W. MAYS, INC.
CONSOLIDATED BALANCE SHEET
January 31, July 31,
1997 1996
--------------- ---------------
ASSETS (Unaudited) (Audited)
<S> <C> <C>
Property and Equipment - Net (Notes 4 and 6) $26,919,232 $26,080,506
------------- -------------
Current Assets:
Cash and cash equivalents 287,279 412,653
Marketable securities - other investments (Notes 3 and 7) 2,774,877 2,792,800
Receivables 164,808 315,179
Deferred income taxes 92,000 67,000
Prepaid expenses 1,064,698 1,171,896
Income taxes refundable - 4,496
Real estate taxes refundable - 13,409
------------- -------------
Total current assets 4,383,662 4,777,433
------------- -------------
Other Assets:
Deferred charges 2,580,267 2,414,194
Less accumulated amortization 959,219 883,229
------------- -------------
Net 1,621,048 1,530,965
Security deposits 580,963 887,121
Unbilled receivables (Note 8) 4,326,926 4,126,436
Receivables 220,279 194,453
Marketable securities - other investments (Notes 3 and 7) 98,388 98,056
Deferred income taxes - 76,000
------------- -------------
Total other assets 6,847,604 6,913,031
------------- -------------
TOTAL ASSETS $38,150,498 $37,770,970
============= =============
LIABILITIES AND SHAREHOLDERS' EQUITY
Long-Term Debt:
Mortgages payable (Note 4) $7,471,079 $6,964,717
Other (Note 5) 684,518 1,039,709
------------- -------------
Total long-term debt 8,155,597 8,004,426
------------- -------------
Current Liabilities:
Payable to securities broker (Note 7) 1,341,699 1,497,320
Accounts payable 146,076 32,460
Payroll and other accrued liabilities 456,431 546,370
Income taxes payable 4,015 -
Other taxes payable 2,355 5,194
Current portion of long-term debt - mortgages payable (Note 4) 550,060 483,450
Current portion of long-term debt - other (Note 5) 104,000 60,667
------------- -------------
Total current liabilities 2,604,636 2,625,461
------------- -------------
Deferred Income Taxes 1,000 -
------------- -------------
Total liabilities 10,761,233 10,629,887
------------- -------------
Shareholders' Equity:
Common stock, par value $1 each share (shares - 5,000,000
authorized; 2,178,297 outstanding) 2,178,297 2,178,297
Additional paid in capital 3,346,245 3,346,245
Unrealized gain on available for sale securities (Note 3) 65,566 17,261
Retained earnings 22,083,397 21,883,520
------------- -------------
27,673,505 27,425,323
Less common stock held in treasury, at cost - 41,900
shares at January 31, 1997 and July 31, 1996 284,240 284,240
------------- -------------
Total shareholders' equity 27,389,265 27,141,083
------------- -------------
Commitments and Contingencies (Note 13)
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $38,150,498 $37,770,970
============= =============
See Notes to Consolidated Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
J. W. MAYS, INC.
CONSOLIDATED STATEMENT OF OPERATIONS AND RETAINED EARNINGS
Three Months Ended Six Months Ended
January 31, January 31,
-------------- --------------- -------------- ---------------
1997 1996 1997 1996
<S> <C> <C> <C> <C>
------------- ------------- ------------- -------------
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
Revenues
Rental income $2,472,658 $2,468,181 $4,914,667 $4,494,435
------------- ------------- ------------- -------------
Expenses
Real estate operating expenses 1,539,028 1,506,188 2,963,144 2,778,806
Administrative and general expenses 462,803 891,624 968,039 1,407,904
Depreciation and amortization 238,119 222,684 471,587 439,768
------------- ------------- ------------- -------------
Total expenses 2,239,950 2,620,496 4,402,770 4,626,478
------------- ------------- ------------- -------------
Income (loss) before investment income,
interest expense and income taxes 232,708 (152,315) 511,897 (132,043)
------------- ------------- ------------- -------------
Investment income and interest expense
Investment income 64,104 64,857 125,960 125,166
Interest expense (173,935) (173,140) (351,980) (340,243)
------------- ------------- ------------- -------------
(109,831) (108,283) (226,020) (215,077)
------------- ------------- ------------- -------------
Income (loss) before income taxes 122,877 (260,598) 285,877 (347,120)
Income taxes provided (benefit) 23,000 (94,000) 86,000 (111,000)
------------- ------------- ------------- -------------
Income (loss) 99,877 (166,598) 199,877 (236,120)
Retained earnings, beginning of period 21,983,520 21,955,284 21,883,520 22,024,806
------------- ------------- ------------- -------------
Retained earnings, end of period $22,083,397 $21,788,686 $22,083,397 $21,788,686
============= ============= ============= =============
Income (loss) per common share $.05 $(.08) $.09 $(.11)
============= ============= ============= =============
Dividends per share $ - $ - $ - $ -
============= ============= ============= =============
Average common shares outstanding 2,136,397 2,136,397 2,136,397 2,136,397
============= ============= ============= =============
See Notes to Consolidated Financial Statements.
</TABLE>
<PAGE>
<TABLE>
J. W. MAYS, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
<CAPTION>
Six Months Ended
January 31,
---------------- ---------------
1997 1996
------------- -------------
(Unaudited) (Unaudited)
<S> <C> <C>
Cash Flows From Operating Activities
Income (loss) $199,877 $(236,120)
Adjustments to reconcile income (loss) to
net cash provided by operating activities:
Amortization of premium on marketable debt securities (89) 346
Realized gain on marketable securities 1,630 -
Depreciation and amortization 471,587 439,768
Amortization of deferred expenses 113,659 100,995
Other assets - deferred expenses (203,742) (251,943)
- security deposits 306,158 (384,889)
- unbilled receivables (200,490) 88,935
Deferred income taxes 27,000 (169,000)
Changes in:
Receivables 124,545 (113,585)
Prepaid expenses 107,198 72,348
Income taxes refundable 4,496 -
Real estate taxes refundable 13,409 -
Accounts payable 113,616 (46,817)
Payroll and other accrued liabilities (89,939) 63,343
Income taxes payable 4,015 (12,205)
Other taxes payable (2,839) 4,677
------------- -------------
Cash provided by (used in) operating activities 990,091 (444,147)
------------- -------------
Cash Flows From Investing Activities
Capital expenditures (1,310,313) (1,172,953)
Marketable securities - other investments:
Receipts from sales or maturities 140,000 50,004
Payments for purchases (50,645) (622)
------------- -------------
Cash (used in) investing activities (1,220,958) (1,123,571)
------------- -------------
Cash Flows From Financing Activities
Borrowings - mortgage debt 800,000 1,250,000
Borrowings - securities broker 104,451 255,904
Payments - securities broker (260,072) (170,325)
Increase (reduction) of mortgage debt and other - short-term 109,943 120,432
(648,829) 63,382
------------- -------------
Cash provided by financing activities 105,493 1,519,393
------------- -------------
(Decrease) in cash (125,374) (48,325)
Cash and cash equivalents at beginning of period 412,653 490,315
------------- -------------
Cash and cash equivalents at end of period $287,279 $441,990
============= =============
See Notes to Consolidated Financial Statements.
</TABLE>
<PAGE>
J. W. MAYS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. The interim financial statements are prepared pursuant to the
requirements for reporting on Form 10-Q. The July 31, 1996 balance
sheet was derived from audited financial statements but does not
include all disclosures required by generally accepted accounting
principles. The interim financial statements and notes thereto should
be read in conjunction with the financial statements and notes
included in the Company's latest Annual Report on Form 10-K for the
year ended July 31, 1996. In the opinion of management, the interim
financial statements reflect all adjustments of a normal recurring
nature necessary for a fair statement of the results for interim
periods. The results of operations for the current period are not
necessarily indicative of the results for the entire year ending July
31, 1997. The preparation of the Company's financial statements
requires management to make estimates and judgments that affect the
reported consolidated statements of operations and consolidated
balance sheets and related disclosures. Actual results could differ
from those estimates.
2. Income (loss) per common share has been computed by dividing the
income (loss) for the periods by the number of shares of common stock
outstanding during the periods, adjusted for the purchase of treasury
stock. Shares used in computing the income (loss) per common share
were 2,136,397 in each of the three months ended January 31, 1997 and
1996.
3. Marketable Securities - Other Investments:
Effective August 1, 1994, the Company adopted Statement of Financial
Accounting Standards No. 115, "Accounting for Certain Investments in
Debt and Equity Securities" ("FAS 115"). FAS 115 requires certain
securities to be categorized as either trading, available for sale or
held to maturity. Trading securities are carried at fair value with
unrealized gains and losses included in income. Available for sale
securities are carried at fair value with unrealized gains and losses
recorded as a separate component of shareholders' equity. Held to
maturity securities are carried at amortized cost. Dividends and
interest income are accrued as earned.
<PAGE>
<TABLE>
Marketable Securities - Other Investments (continued)
<CAPTION>
As of January 31, 1997, the Company's marketable securities were classified as follows:
Gross Gross
Unrealized Unrealized Fair
Cost Gains Losses Value
<S> <C> <C> <C> <C> <C>
------------- ------------- ------------- -------------
Current
Available for sale
Equity securities $2,648,670 $98,566 $ - $2,747,236
Certificate of deposit 27,641 - - 27,641
------------- ------------- ------------- -------------
Total current $2,676,311 $98,566 $ - $2,774,877
------------- ------------- ------------- -------------
Noncurrent
Held to maturity
Corporate debt securities $98,388 $3,886 $ - $102,274
============= ============= ============= =============
Investment income consists of the following:
Three Months Ended Six Months Ended
January 31, January 31,
------------------------------ ------------------------------
1997 1996 1997 1996
________ ________ ________ ________
Interest income $6,641 $10,214 $17,065 $20,619
Dividend income 59,093 54,643 110,525 104,547
(Loss) on sale of marketable securities (1,630) - (1,630) -
------------- ------------- ------------- -------------
Total $64,104 $64,857 $125,960 $125,166
============= ============= ============= =============
</TABLE>
<PAGE>
4. Long-Term Debt:
<TABLE>
<CAPTION>
January 31, 1997 July 31, 1996
------------------------------ --------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Current
Annual Final Due Due Due Due
Interest Payment Within After Within After
Rate Date One Year One Year One Year One Year
------- -------- ------------- ------------- ------------- ---------
Term loan payable to bank (a) Variable 2/01/07 $ - $ - $20,682 $1,479,318
Mortgages:
Jamaica, New York Property (b) 8 1/2% 4/01/07 58,342 2,241,658 - -
Jowein Building, Brooklyn, N.Y. (c) 7 3/8% 3/31/98 86,945 787,294 83,825 831,560
Fishkill, New York Property (d) 9% 11/01/99 113,633 2,503,338 108,651 2,561,428
Circleville, Ohio Property (e) 7% 9/30/02 283,289 1,741,334 262,767 1,890,947
Other 8 1/2% 5/01/01 7,851 197,455 7,525 201,464
------------- ------------- ------------- ---------
Total $550,060 $7,471,079 $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 4(b) below). There
was no prepayment penalty for early payoff 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 to be secured by a first mortgage lien
covering the entire leasehold interest of the Company, as tenant, in a
certain ground lease and building in the Jamaica property. The loan
proceeds are to be utilized by the Company toward (a) payment in full
of the outstanding term loan by the Company in favor of the same bank
in the amount of $1,500,000 plus interest (see Note 4(a) above) and
(b) its costs for the renovations to the portions of the premises in
connection with the Company's sublease of a significant portion of the
building. The interest rate on the loan is 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 is to have 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. As of January
31, 1997, construction period interest incurred amounted to $5,813
which amount was capitalized as part of the renovations.
Payments are to be made, in arrears, on the first day of each and
every month during the term, calculated (a) during the initial six (6)
month period of the term, interest only, and (b) during the final ten
(10) year period of the term, at the sum of the interest 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 will assign certain leases on the
premises hereafter consummated. The Company has an option to prepay
principal, in whole or in part, plus interest accrued thereon, at any
time during the term, upon thirty (30) days prior notice to the bank,
without premium or penalty. Other provisions of the 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. On September 6,
1995, the maturity date of the mortgage was extended to March 31,
1998. The interest rate of 10% continued until March 31, 1996 and
from April 1, 1996 the interest rate was established at the bank's
prevailing rate as at March 31, 1996, which was 7 3/8%. During the
renewal 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 increase to $36,540.
<PAGE>
5. Long-Term Debt - Other:
Long-Term debt - other consists of the following:
<TABLE>
<CAPTION>
January 31, 1997 July 31, 1996
------------------------------- -------------------------------
<S> <C> <C> <C> <C>
Due Within Due After Due Within Due After
One Year One Year One Year One Year
--------------- --------------- --------------- ---------------
Deferred compensation * $104,000 $407,333 $60,667 $459,333
Lease security deposits ** - 277,185 - 580,376
------------- ------------- ------------- -------------
Total $104,000 $684,518 $60,667 $1,039,709
============= ============= ============= =============
</TABLE>
* In fiscal 1964 the Company entered into a deferred compensation
agreement with Max L. Shulman, its then Chairman of the Board.
This agreement, as amended, provides for a total of $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 as an employee on December 31, 1996.
**Does not include three irrevocable letters of credit totaling
$440,000 provided by three tenants as lease security deposits.
6. Property and Equipment - Net:
<TABLE>
<CAPTION>
January 31, July 31,
1997 1996
--------------- ---------------
<S> <C> <C>
Property and equipment - at cost:
Buildings and improvements $32,092,608 $31,988,028
Improvements to leased property 9,143,368 9,131,836
Fixtures and equipment 510,109 493,748
Land 4,008,835 4,008,835
Other 171,183 171,183
Construction in progress 1,177,840 -
------------- -------------
47,103,943 45,793,630
Less accumulated depreciation and amortization 20,184,711 19,713,124
------------- -------------
Property and equipment - net $26,919,232 $26,080,506
============= =============
</TABLE>
7. Payable to Securities Broker:
The Company borrowed funds, payable on demand, from a securities
broker. The loan balance at January 31, 1997 in the amount of
$1,341,699, secured by the Company's marketable securities, accrues
interest, which at January 31, 1997, was at the annual rate of 7 1/2%.
8. Unbilled Receivables:
Unbilled receivables represent the excess of scheduled rental income
recognized on a straight-line basis over rental income as it becomes
receivable according to the provisions of each lease.
9. Employees' Retirement Plan:
The Company sponsors a noncontributory Money Purchase Plan covering
substantially all of its employees. Operations were charged $33,750
and $68,175 as contributions to the Plan for the three and six
months ended January 31, 1997, respectively, and $35,000 and $70,000
as contributions to the Plan for the three and six months ended
January 31, 1996, respectively.
10. Cash Flow Information:
For purposes of reporting cash flows, the Company considers cash
equivalents to consist of short-term highly liquid investments with
maturities of three months or less, which are readily convertible
into cash.
<TABLE>
Supplemental disclosure:
<CAPTION>
Six Months Ended
January 31,
------------------------------
1997 1996
__________ __________
<S> <C> <C>
Interest paid $353,538 $341,827
Income taxes paid $50,489 $70,205
</TABLE>
11. Financial Accounting Standards No. 121:
In May 1995, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 121 ("FAS 121"),
"Accounting for the Impairment of Long-Lived Assets and for Long-
Lived Assets to be Disposed Of", effective for fiscal years
beginning after December 15, 1995. FAS 121 requires the recognition
of an impairment loss related to long-lived assets and certain
identifiable intangibles whenever events or changes in circumstances
indicate that the carrying amount of an asset may not be
recoverable. The Company believes that the adoption of the new
accounting standard will not have any effect on the consolidated
financial statements.
12. Financial Instruments and Credit Risk Concentrations:
Financial instruments that are potentially subject to concentrations
of credit risk consist principally of marketable securities-other
investments, cash equivalents and receivables. Marketable
securities-other investments and cash equivalents are placed with
high credit quality financial institutions and instruments to
minimize risk.
The Company derives rental income from twenty-eight tenants, of
which two tenants each accounted for more than 10% of rental income
during the quarter ended January 31, 1997. The City of New York is
one of the two tenants and the other tenant is 510 Fulton Street
Realty Associates, the owners of which are long established in
business.
McCrory Stores Corporation ("McCrory"), 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 $84,354.39, 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 has filed an objection 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 claim against
McCrory in its financial statements due to the pending litigation
over the Lease Rejection Claim and Administrative Claim and 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 remander of the space of approximately 30,000 square
feet is not leaseable 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.
Jamesway Corporation ("Jamesway"), which occupied retail space in
the Fishkill, New York property and whose lease extended to January
31, 2005, filed for relief under Chapter 11 of the Bankruptcy Code
on October 18, 1995. Jamesway rejected its lease for the Fishkill
location with the approval of the Bankruptcy Court, effective
February 29, 1996 but continued occupancy until March 22, 1996. The
Company has filed an unsecured claim in the amount of approximately
$981,255 for damages resulting from the 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. The Company has made no
provision in its financial statements for the claims filed against
Jamesway due to the uncertainty of the amount that may ultimately be
allowed and collected, except for the pre-petition rental
obligations claim of $31,971, which amount is included in the
unsecured claim of approximately $981,255.
13. Commitments and Contingencies:
There are various lawsuits and claims pending against the Company.
It is the opinion of management that the resolution of these matters
will not have a material adverse effect on the Company's
Consolidated Financial Statements.
<PAGE>
J. W. MAYS, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS
AND FINANCIAL CONDITION
Results of Operations:
Three Months Ended January 31, 1997 Compared to the Three Months Ended
January 31, 1996:
In the three months ended January 31, 1997, the Company reported income
in the amount of $99,877, or $.05 per share. The comparable 1996 quarter
resulted in a loss of $166,598, or $.08 per share, after the pre-tax
write-off of a bad debt amounting to $424,011 relating to the rejection
by a tenant of its lease, discussed below. There was no comparable item
in the 1997 three month period.
Rental income in the current three months increased to $2,472,658 from
$2,468,181 in the comparable 1996 three months.
Real estate operating expenses increased to $1,539,028 from $1,506,188 in
the 1996 quarter principally due to increased maintenance and fuel costs.
Administrative and general expenses decreased to $462,803 from $891,624
principally due to the pre-tax write-off of the bad debt of $424,011 in
the 1996 three month period, discussed below.
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 reported through January 31, 1996,
amounted to $424,011 and such amount was written off and classified as a
bad debt.
Depreciation and amortization expense in the current three months
increased to $238,119 from $222,684 in the three months ended January 31,
1996 because of additional improvements to property.
Interest expense exceeded investment income by $109,831 in the current
quarter and by $108,283 in the comparable 1996 quarter, principally due
to the increased interest on the broker loan discussed in Note 7 and the
loan facility discussed in Notes 4(a) and (b) to Consolidated Financial
Statements.
Six Months Ended January 31, 1997 Compared to the Six Months Ended
January 31, 1996:
In the six months ended January 31, 1997, the Company reported income in
the amount of $199,877, or $.09 per share. The comparable 1996 six month
period resulted in a loss of $236,120, or $.11 per share, after the pre-
tax write-off of a bad debt amounting to $424,011 relating to the
rejection by a tenant of its lease, discussed above. There was no
comparable item in the 1997 six month period.
Rental income in the current six months increased to $4,914,667 from
$4,494,435 in the comparable 1996 six months, primarily due to the
addition of three tenants.
Real estate operating expenses increased to $2,963,144 from $2,778,806 in
the 1996 comparable period principally due to increased maintenance and
fuel costs, offset in part, by an allowed credit for utility costs and a
decrease in real estate taxes in the 1996 six month period.
Administrative and general expenses decreased to $968,039 from $1,407,904
principally due to a pre-tax write-off of a bad debt of $424,011, in the
1996 six month period, discussed above, and a decrease in insurance and
legal and professional costs..
Depreciation and amortization expense in the current six months increased
to $471,587 from $439,768 in the six months ended January 31, 1996
because of additional improvements to property.
Interest expense exceeded investment income in the amount of $226,020 in
the current six month period and by $215,077 in the six months ended
January 31, 1996 principally due to the increased interest on the broker
loan discussed in Note 7 and the loan facility discussed in Notes 4(a)
and (b) to Consolidated Financial Statements.
Liquidity and Capital Resources:
The Company has been operating as a real estate enterprise since the
discontinuance of the retail department store segment of its operations
on January 3, 1989.
The leasing of 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 are anticipated to
commence in May 1997. To defray the costs of renovations for the State
occupancy, the Company borrowed from a bank the principal amount of
$2,500,000 (see Note 4(b) to Consolidated Financial Statements). As of
January 31, 1997, the Company secured an advance of $800,000 against the
principal amount of $2,500,000.
The Company had working capital of $1,779,026, with a ratio of current
assets to current liabilities of 1.7 to 1 at January 31, 1997.
Management considers current working capital and borrowing capabilities
adequate to cover the Company's planned operating and capital
requirements.
<PAGE>
Part II - Other Information
Item 6 - Exhibits and Reports on Form 8-K
(a) List of Exhibits:
Sequentially
Exhibit Numbered
Number Exhibit Page _
(2) Plan of acquisition, reorganization, arrangement,
liquidation or succession. N/A
(4) Instruments defining the rights of security holders,
including indentures. N/A
(10) Material contracts. N/A
(11) Statement re computation of per share earnings. N/A
(15) Letter re unaudited interim financial information. N/A
(18) Letter re change in accounting principles. N/A
(19) Report furnished to security holders. N/A
(22) Published report regarding matters submitted to vote
of security holders. N/A
(24) Power of attorney. N/A
(27) Financial data schedule. N/A
(99) Additional exhibits. N/A
(b) Reports on Form 8-K - A report on Form 8-K, dated November 26,
1996, was filed by the Company during the quarter for which this
report on Form 10-Q is being filed.
Item reported - Max L. Shulman resigned his position as Co-
Chairman of the Board of Directors and his position on the
various committees on which he served as Chairman. Max L.
Shulman remains as a director of the Company. Lloyd J. Shulman
was elected as Chairman of the Board of Directors and continues
as President and Chief Executive Officer and Chief Operating
Officer of the Company. Lloyd J. Shulman was also elected
Chairman of the various committees on which he served.
Financial Statements filed - None
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.
J.W. MAYS, Inc.
(Registrant)
Date March 7, 1997 Lloyd J. Shulman
Lloyd J. Shulman
Chairman
Date March 7, 1997 Alex Slobodin
Alex Slobodin
Exec. Vice-President
(Principal Financial Officer)
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted
from the contained quarterly 10-Q and is qualified in its
entirety by reference to such Form 10-Q.
</LEGEND>
<MULTIPLIER> 1
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> Jul-31-1997
<PERIOD-START> Aug-01-1996
<PERIOD-END> Jan-31-1997
<S> <C>
<CASH> 287,279
<SECURITIES> 2,774,877
<RECEIVABLES> 164,808
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 4,383,662
<PP&E> 47,103,943
<DEPRECIATION> 20,184,711
<TOTAL-ASSETS> 38,150,498
<CURRENT-LIABILITIES> 2,604,636
<BONDS> 0
<COMMON> 2,178,297
0
0
<OTHER-SE> 25,210,968
<TOTAL-LIABILITY-AND-EQUITY> 38,150,498
<SALES> 0
<TOTAL-REVENUES> 4,914,667
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 4,402,770
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 351,980
<INCOME-PRETAX> 285,877
<INCOME-TAX> 86,000
<INCOME-CONTINUING> 199,877
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 199,877
<EPS-PRIMARY> 0.09
<EPS-DILUTED> 0.00
</TABLE>
