J.W. MAYS, INC.
Annual Report
2000
Year Ended July 31, 2000
<PAGE>
J.W. MAYS, INC.
CONTENTS
PAGE NO.
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Summary of Selected Financial Data 2
The Company 2
Message to Shareholders 3
Consolidated Balance Sheets 4-5
Consolidated Statements of Income and
Retained Earnings 6
Consolidated Statements of Comprehensive
Income 6
Consolidated Statements of Cash Flows 7
Notes to Consolidated Financial Statements 8-15
Report of Independent Auditors 15
Five Year Summary of Consolidated Operations 16
Management's Discussion and Analysis of
Financial Condition and Results of Operations 17-18
Quarterly Financial Information (Unaudited) 19
Common Stock and Dividend Information 19
Officers and Directors 20
EXECUTIVE OFFICES
9 Bond Street, Brooklyn, N.Y. 11201
TRANSFER AGENT AND REGISTRAR
American Stock Transfer & Trust Company
59 Maiden Lane
New York, N.Y. 10007
SPECIAL COUNSEL
Holland & Knight LLP
195 Broadway
New York, N.Y. 10007
INDEPENDENT AUDITORS
D'Arcangelo & Co., LLP
3020 Westchester Avenue
Purchase, N.Y. 10577
ANNUAL MEETING
The Annual Meeting of Shareholders will be
held on Tuesday, November 21, 2000, at
10:00 A.M., New York time, at J. W. MAYS, INC.,
9 Bond Street, Brooklyn, New York.
1
<PAGE>
<TABLE>
<CAPTION>
J.W. MAYS, INC.
SUMMARY OF SELECTED FINANCIAL DATA
(dollars in thousands except per share data)
2000 1999 1998 1997 1996
=========================================================================================================
<S> <C> <C> <C> <C> <C>
Rental Income $10,451 $10,250 $10,249 $ 9,666 $ 8,855
Rental Income--Affiliated Company 414 411 414 414 414
Recovery of Real Estate Taxes -- -- 1,219 -- --
---------------------------------------------------------------------------------------------------------
Total Revenues 10,865 10,661 11,882 10,080 9,269
---------------------------------------------------------------------------------------------------------
Net Income (Loss) 1,066 1,164 1,838 811 (141)
---------------------------------------------------------------------------------------------------------
Real Estate--Net 29,339 28,586 28,024 27,953 25,895
---------------------------------------------------------------------------------------------------------
Total Assets 42,485 41,657 41,375 40,406 37,771
---------------------------------------------------------------------------------------------------------
Long-Term Debt:
Mortgages Payable 6,000 6,440 7,814 8,642 6,965
Other 362 491 582 641 734
------- ------- ------- ------- -------
Total 6,362 6,931 8,396 9,283 7,699
---------------------------------------------------------------------------------------------------------
Shareholders' Equity 31,803 31,067 30,059 28,030 27,141
---------------------------------------------------------------------------------------------------------
Net Income (Loss) Per Common Share $ .50 $ .54 $ .86 $ .38 $ (.07)
---------------------------------------------------------------------------------------------------------
Cash Dividends Declared Per Share -- -- -- -- --
---------------------------------------------------------------------------------------------------------
</TABLE>
Average common shares outstanding for fiscal 2000, 2,118,908, 1999 and 1998,
2,135,780; 1997, 2,136,175 and 1996, 2,136,397.
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 Form
10-K Annual Report for the fiscal year ended July 31, 2000.
2
<PAGE>
J.W. MAYS, INC.
TO OUR SHAREHOLDERS:
================================================================================
In last year's letter to shareholders, we reported a continued improvement
in the Company's financial position with profits in each of the four quarters.
It is gratifying that we are able to do so again this year.
In fiscal 2000, our revenues were $10,864,565 compared to $10,661,297 in
the 1999 fiscal year. Net income for fiscal 2000 was $1,065,938, or $.50 per
share. This compares to fiscal 1999 net income of $1,163,822, or $.54 per share.
The shareholders' equity increased to $31,802,995 at July 31, 2000 from
$31,067,438 at July 31, 1999.
We leased 11,200 square feet of office space to the State of New York which
space is contiguous to the existing office space occupied by the State in the
Company's Jamaica, New York property. Rent for the additional space commenced
September 1, 2000.
The new lobby entrance in the 9-17 Bond Street building, a part of the
Company's former Brooklyn, New York store, has been completed. The new lobby
will provide separate access to the upper floors for prospective large user
tenants through two high-speed elevators.
In fiscal 2000, we extended the mortgage on the Jowein building in
Brooklyn, New York, effective April 1, 2000, for a period of five years, at the
same interest rate. The mortgage loan is self-amortizing.
The Company has agreed, in principle, to the terms of a bank commitment
letter for a construction loan to be converted to a term loan, in the principal
amount of $3,500,000, to cover the cost of capital improvements in connection
with a lease signed by the Company with the State of New York, which lease is
awaiting final documentation from the State, for 42,250 square feet of office
space in the Company's Jamaica, New York property. Occupancy is anticipated to
commence on or about August 1, 2001.
We are continuing to solicit prospective tenants for the available space in
each of the Company's locations.
Because of adequate preparation, Y2K turned out to be a non-event as we
transitioned into Year 2000 without any Y2K issues.
In August, 2000, your Board appointed Mark Greenblatt to the position of
Vice President, Assistant Treasurer and Controller. Mark has served as our
Company's Assistant Treasurer and Controller since November, 1987.
Our thanks go to our employees for their continued hard work and to our
Board of Directors for their support. I am confident and convinced that we are
on the right track for continued growth.
/s/ LLOYD J. SHULMAN
----------------------------
Lloyd J. Shulman
Chairman/President
October 12, 2000
3
<PAGE>
<TABLE>
<CAPTION>
J.W. MAYS, INC.
CONSOLIDATED BALANCE SHEETS
July 31, 2000 and 1999
ASSETS
2000 1999
==================================================================================================
<S> <C> <C>
Property and Equipment--at cost (Notes 1 and 3):
Buildings and improvements ................................. $38,917,272 $36,775,251
Improvements to leased property ............................ 9,158,009 9,143,369
Fixtures and equipment ..................................... 572,189 567,057
Land ....................................................... 4,008,835 4,008,835
Other ...................................................... 209,223 208,775
Construction in progress ................................... 246,342 694,042
----------- -----------
53,111,870 51,397,329
Less accumulated depreciation and amortization ............. 23,557,465 22,611,294
----------- -----------
Property and equipment--net ............................ 29,554,405 28,786,035
=========== ===========
Current Assets:
Cash and cash equivalents (Notes 10 and 11) ................ 1,529,082 1,489,843
Marketable securities (Notes 1, 2 and 11) .................. 41,685 39,993
Receivables (Note 7) ....................................... 215,872 415,243
Income taxes refundable (Notes 1 and 5) .................... -- 38,727
Deferred income taxes (Notes 1 and 5) ...................... 180,000 79,000
Security deposits .......................................... 33,125 6,165
Prepaid expenses ........................................... 1,005,279 960,614
----------- -----------
Total current assets ................................... 3,005,043 3,029,585
----------- -----------
Other Assets:
Deferred charges (Note 1) .................................. 2,619,188 2,562,715
Less accumulated amortization .............................. 1,466,651 1,341,887
----------- -----------
Net .................................................... 1,152,537 1,220,828
Security deposits (Note 11) ................................ 613,799 633,424
Unbilled receivables (Notes 1 and 7) ....................... 4,735,115 4,423,417
Unbilled receivable--affiliated company (Notes 1 and 7) .... 363,875 545,812
Receivables -- 12,534
Marketable securities (Notes 1, 2 and 11) .................. 3,059,770 3,005,401
----------- -----------
Total other assets ..................................... 9,925,096 9,841,416
----------- -----------
TOTAL ASSETS ........................................... $42,484,544 $41,657,036
=========== ===========
</TABLE>
See Notes to Consolidated Financial Statements.
4
<PAGE>
<TABLE>
<CAPTION>
LIABILITIES AND SHAREHOLDERS' EQUITY
2000 1999
======================================================================================================================
<S> <C> <C>
Long-Term Debt:
Mortgages payable (Notes 3 and 11) ............................................ $ 5,999,844 $ 6,439,933
Other (Note 4) ................................................................ 362,443 490,716
----------- -----------
Total long-term debt ...................................................... 6,362,287 6,930,649
----------- -----------
Deferred Income Taxes (Notes 1 and 5) ........................................... 2,333,000 1,740,000
----------- -----------
Current Liabilities:
Accounts payable .............................................................. 43,663 29,728
Payroll and other accrued liabilities (Note 8) ................................ 756,660 380,140
Income taxes payable (Notes 1 and 5) .......................................... 22,365 --
Other taxes payable ........................................................... 3,414 2,205
Current portion of long-term debt--mortgages payable (Notes 3 and 11) ......... 1,023,035 1,396,711
Current portion of long-term debt--other (Note 4) ............................. 137,125 110,165
----------- -----------
Total current liabilities ................................................. 1,986,262 1,918,949
----------- -----------
Total liabilities ......................................................... 10,681,549 10,589,598
----------- -----------
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) .............. 63,117 136,998
Retained earnings ............................................................. 26,761,938 25,696,000
----------- -----------
32,349,597 31,357,540
Less common stock held in treasury, at cost--90,017 shares at
July 31, 2000 and 42,517 shares at July 31, 1999 ............................. 546,602 290,102
----------- -----------
Total shareholders' equity ................................................ 31,802,995 31,067,438
----------- -----------
Commitments (Notes 6 and 7) and Contingencies (Note 12)
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY ................................ $42,484,544 $41,657,036
=========== ===========
</TABLE>
5
<PAGE>
J.W. MAYS, INC.
CONSOLIDATED STATEMENTS OF INCOME AND RETAINED EARNINGS
<TABLE>
<CAPTION>
Years Ended July 31,
---------------------------------------------
2000 1999 1998
===========================================================================================================================
<S> <C> <C> <C>
Revenues
Rental income (Notes 1 and 7) .......................................... $10,450,955 $10,250,423 $10,249,650
Rental income--affiliated company (Note 7) ............................. 413,610 410,874 413,609
Recovery of real estate taxes .......................................... -- -- 1,218,600
----------- ----------- -----------
Total revenues ................................................... 10,864,565 10,661,297 11,881,859
----------- ----------- -----------
Expenses
Real estate operating expenses (Note 6) ................................ 5,529,850 5,312,787 5,416,292
Administrative and general expenses .................................... 2,240,372 2,119,558 2,076,614
Bad debts (recovery) (Note 12) ......................................... -- (17,115) (52,749)
Depreciation and amortization (Note 1) ................................. 1,009,859 1,002,733 1,011,318
----------- ----------- -----------
Total expenses ................................................... 8,780,081 8,417,963 8,451,475
----------- ----------- -----------
Income from operations before investment income,
interest expense and income taxes ...................................... 2,084,484 2,243,334 3,430,384
----------- ----------- -----------
Investment income and interest expense
Investment income (Notes 1 and 2) ...................................... 296,768 278,162 269,646
Interest expense (Notes 3 and 10) ...................................... 618,314 683,674 812,297
----------- ----------- -----------
(321,546) (405,512) (542,651)
----------- ----------- -----------
Income before income taxes .............................................. 1,762,938 1,837,822 2,887,733
Income taxes provided (Notes 1 and 5) ................................... 697,000 674,000 1,050,000
----------- ----------- -----------
Net income .............................................................. 1,065,938 1,163,822 1,837,733
Retained earnings, beginning of year .................................... 25,696,000 24,532,178 22,694,445
----------- ----------- -----------
Retained earnings, end of year .......................................... $26,761,938 $25,696,000 $24,532,178
=========== =========== ===========
Income per common share (Note 1) ........................................ $ .50 $ .54 $ .86
=========== =========== ===========
Dividends per share ..................................................... -- -- --
=========== =========== ===========
Average common shares outstanding ....................................... 2,118,908 2,135,780 2,135,780
=========== =========== ===========
</TABLE>
See Notes to Consolidated Financial Statements.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
<TABLE>
<CAPTION>
Years Ended July 31,
--------------------------------------------
2000 1999 1998
===========================================================================================================================
<S> <C> <C> <C>
Net Income ............................................................... $1,065,938 $1,163,822 $1,837,733
---------- ---------- ----------
Other comprehensive income, net of tax (Note 5) Unrealized gain (loss)
on available-for-sale securities, net of taxes (benefit) of $(38,000),
$(61,000) and $80,000 for the fiscal years 2000, 1999 and 1998,
respectively............................................................. (73,881) (155,881) 191,728
Reclassification adjustment .............................................. (26,734) (2,202) 14,997
---------- ---------- ----------
Other comprehensive income (loss) ........................................ (100,615) (158,083) 206,725
---------- ---------- ----------
Comprehensive income ..................................................... $ 965,323 $1,005,739 $2,044,458
========== ========== ==========
</TABLE>
See Notes to Consolidated Financial Statements.
6
<PAGE>
J.W. MAYS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Years Ended July 31,
---------------------------------------------
2000 1999 1998
===========================================================================================================================
<S> <C> <C> <C>
Cash Flows From Operating Activities
Net income ............................................................. $ 1,065,938 $ 1,163,822 $ 1,837,733
Adjustments to reconcile net income to net cash
provided by operating activities:
Deferred income taxes ................................................ 530,000 529,000 854,000
Amortization of premium on marketable debt
securities .......................................................... -- (623) (661)
Realized (gain) loss on marketable securities ........................ (26,734) (2,202) 14,997
Depreciation and amortization ........................................ 1,009,859 1,002,733 1,011,318
Amortization of deferred expenses .................................... 214,139 240,818 248,601
Other assets--deferred expenses ...................................... (145,848) (81,372) (139,493)
--unbilled receivables ................................... (311,698) (405,502) (366,120)
--unbilled receivable--affiliated company ................ 181,937 181,938 181,938
--receivables ............................................ 12,534 167,777 203,777
--receivable--affiliated company ......................... -- 87,943 106,510
Changes in:
Receivables .......................................................... 199,371 46,527 101,640
Prepaid expenses ..................................................... (44,665) (6,886) 197,188
Income taxes refundable .............................................. 38,727 (38,727) --
Accounts payable ..................................................... 13,935 (13,054) (3,474)
Payroll and other accrued liabilities ................................ 376,520 (179,204) 6,129
Income taxes payable ................................................. 22,365 (82,348) 70,912
Other taxes payable .................................................. 1,209 298 (11)
----------- ----------- -----------
Net cash provided by operating activities .......................... 3,137,589 2,610,938 4,324,984
----------- ----------- -----------
Cash Flows From Investing Activities
Acquisition of property and equipment .................................. (1,778,229) (1,321,921) (1,126,540)
Security deposits ...................................................... (7,335) (15,942) (34,155)
Marketable securities:
Receipts from sales or maturities ..................................... 139,134 644,714 486,524
Payments for purchases ................................................ (280,342) (577,404) (736,049)
----------- ----------- -----------
Net cash (used) by investing activities ........................... (1,926,772) (1,270,553) (1,410,220)
----------- ----------- -----------
Cash Flows From Financing Activities
Borrowings--securities broker .......................................... -- -- 1,708,595
Payments--securities broker ............................................ -- -- (2,978,648)
Increase--security deposits ............................................ 2,687 10,668 54,513
Payments--mortgage and other debt ...................................... (917,765) (909,189) (885,533)
Purchase of treasury stock ............................................. (256,500) -- --
----------- ----------- -----------
Net cash (used) by financing activities ........................... (1,171,578) (898,521) (2,101,073)
----------- ----------- -----------
Net increase in cash and cash equivalents .............................. 39,239 441,864 813,691
Cash and cash equivalents at beginning of year ......................... 1,489,843 1,047,979 234,288
----------- ----------- -----------
Cash and cash equivalents at end of year ............................... $ 1,529,082 $ 1,489,843 $ 1,047,979
=========== =========== ===========
</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, a New York corporation and its subsidiaries, which are
wholly-owned. Material intercompany items have been eliminated in consolidation.
ACCOUNTING RECORDS AND USE OF ESTIMATES: 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 income and retained earnings, comprehensive income and the
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
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: The Company categorizes marketable securities as
either trading, available-for-sale or held-to-maturity. Trading securities are
carried at fair value with unrealized gains and losses included in income.
Available-for-sale securities are carried at fair value with unrealized gains
and losses recorded as a separate component of shareholders' equity.
Held-to-maturity securities are carried at amortized cost. Dividends and
interest income are accrued as earned. Realized gains and losses are determined
on a specific identification basis.
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 is amortized over the asset's
estimated useful life.
COMPREHENSIVE INCOME: In June 1997, SFAS No. 130, "Reporting Comprehensive
Income", ("SFAS 130") was issued. SFAS 130 establishes standards for the
reporting of comprehensive income and its components. It requires all items that
are required to be recognized as components of comprehensive income be reported
in a financial statement that is displayed with the same prominence as other
income statement information. SFAS 130 is effective for financial statements for
periods beginning after December 15, 1997. Reclassification of financial
statements for earlier periods presented for comparative purposes was required
upon adoption.
8
<PAGE>
================================================================================
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 PER SHARE OF COMMON STOCK: Income per share has been computed by
dividing net income 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 per share were 2,118,908 in fiscal 2000
and 2,135,780 in fiscals 1999 and 1998. The Company's adoption of FASB 128
"Earnings per Share" has had no effect on the computation of previously reported
earnings per share.
RECLASSIFICATIONS: Certain accounts for the year ended July 31, 1998 have
been reclassified to reflect comparability with account classifications adopted
for the year ended July 31, 2000 with no effect on previously reported net
income.
2. MARKETABLE SECURITIES:
As of July 31, 2000 and 1999, the Company's marketable securities were
classified as follows:
<TABLE>
<CAPTION>
2000 1999
----------------------------------------------- ----------------------------------------------
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:
Certificate of deposit...... $ 41,685 $ -- $-- $ 41,685 $ 39,993 $ -- $-- $ 39,993
========== ======== === ========== ========== ======== === ==========
Non-current:
Available-for-sale:
Equity securities......... $2,964,653 $ 95,117 $-- $3,059,770 $2,798,403 $206,998 $-- $3,005,401
========== ======== === ========== ========== ======== === ==========
</TABLE>
<TABLE>
<CAPTION>
Investment income for the years ended July 31, 2000, 1999 and 1998 consists of
the following:
2000 1999 1998
-------- -------- --------
<S> <C> <C> <C>
Interest income....................................................... $ 67,516 $ 82,344 $ 81,746
Dividend income....................................................... 202,518 193,616 202,897
Gain (loss) on sale of securities..................................... 26,734 2,202 (14,997)
-------- -------- --------
Total............................................................... $296,768 $278,162 $269,646
======== ======== ========
</TABLE>
9
<PAGE>
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3. LONG-TERM DEBT:
<TABLE>
<CAPTION>
JULY 31, 2000 July 31, 1999
----------------------- -----------------------
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> <C>
Mortgages:
Jamaica, New York property ....... (a) 8 1/2% 4/01/07 $ 266,666 $2,866,667 $ 266,667 $3,133,333
Jowein building, Brooklyn, N.Y ... (b) 9 % 3/31/05 103,128 479,819 675,050 --
Fishkill, New York property ...... (c) 8 1/4% 7/01/04 89,312 2,163,500 82,263 2,252,812
Circleville, Ohio property ....... (d) 7 % 9/30/02 389,272 489,858 363,029 879,130
Other ............................ 8 1/2% 5/01/01 174,657 -- 9,702 174,658
---------- ---------- ---------- ----------
Total ......................... $1,023,035 $5,999,844 $1,396,711 $6,439,933
========== ========== ========== ==========
</TABLE>
(a) 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 interest rate on the loan is 81 @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.
(b) Mortgage is held by an affiliated corporation owned by members,
including certain directors of the Company, of the family of the late Joe
Weinstein, former Chairman of the Board of Directors. Interest and amortization
of principal are paid quarterly. Effective April 1, 2000, the maturity date of
the mortgage, which was scheduled to be on March 31, 2000, was extended to March
31, 2005. The interest rate remained at 9%. During the extended period the
constant quarterly payments of interest and principal increased from $37,263 to
$38,044. The mortgage loan is self-amortizing.
(c) On June 2, 1999, the existing first mortgage loan balance on the
Fishkill property was extended for a period of five years. The annual interest
rate was reduced from 9% to 81 @4% and the interest and principal payments are
to be made in constant monthly amounts based upon a fifteen (15) year payout
period.
(d) The mortgage loan, which is self-amortizing, matures September 30,
2002. The loan is payable at an annual interest rate of 7%. Under the terms of
the loan, constant monthly payments, including interest and principal, are
currently in the amount of $36,540.
Maturities of long-term debt--mortgages payable, outstanding at July 31,
2000, are as follows: Years ending July 31, 2001 (included in current
liabilities), $1,023,035; 2002, $893,772; 2003, $567,607; 2004, $2,362,617;
2005, $375,848, and thereafter, $1,800,000.
4. LONG-TERM DEBT--OTHER:
Long-Term debt--Other consists of the following:
<TABLE>
<CAPTION>
July 31, 2000 July 31, 1999
------------------------- -----------------------
Due Within Due After Due Within Due After
One Year One Year One Year One Year
<S> <C> <C> <C> <C>
Deferred compensation*................................ $104,000 $ 43,333 $104,000 $147,333
Lease security deposits**............................. 33,125 319,110 6,165 343,383
-------- -------- -------- --------
Total............................................ $137,125 $362,443 $110,165 $490,716
======== ======== ======== ========
</TABLE>
Maturities of long-term debt--other, outstanding at July 31, 2000, are as
follows: Years ending July 31, 2001 (included in current liabilities), $137,125;
2002, $43,333; 2003, $1,010; 2004, $5,958; 2005, $111,130, and thereafter,
$201,012.
----------
* In fiscal 1964, the Company entered into a deferred compensation agreement
with Max L. Shulman, its then Chairman of the Board. The 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, 2000 and at July 31, 1999, provided by three tenants.
10
<PAGE>
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5. INCOME TAXES:
Significant components of the Company's deferred tax assets and liabilities
as of July 31, 2000 and 1999, are a result of temporary differences related to
the items described as follows:
<TABLE>
<CAPTION>
2000 1999
---------------------------- -------------------------------
DEFERRED DEFERRED Deferred Deferred
TAX ASSETS TAX LIABILITIES Tax Assets Tax Liabilities
---------- --------------- ---------- ---------------
<S> <C> <C> <C> <C>
Net operating loss carryforward ......................... $192,056 $ -- $ 763,563 $ --
Alternative minimum tax credit carryforward ............. 356,814 -- 327,293 --
Investment tax credit carryforward ...................... -- -- 9,171 --
Deferred compensation not currently deductible .......... 50,093 -- 85,453 --
Rental income received in advance ....................... 106,063 -- 13,411 --
Unbilled receivables .................................... -- 1,733,657 -- 1,689,538
Property and equipment .................................. -- 1,114,820 -- 1,129,908
Unrealized gain on available-for-sale securities ........ -- 32,340 -- 70,379
Other ................................................... 22,791 -- 39,105 --
-------- ---------- ---------- ----------
727,817 2,880,817 1,237,996 2,889,825
Valuation allowance ..................................... -- -- (9,171) --
-------- ---------- ---------- ----------
$727,817 $2,880,817 $1,228,825 $2,889,825
======== ========== ========== ==========
</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,
2000, except for investment tax credit carryforwards, for which a 100% valuation
allowance was provided. The valuation allowance was reduced by $9,171 in fiscal
2000 and $15,820 in fiscal 1999, due to the expiration of investment tax credit
carryforwards.
Income taxes provided for the years ended July 31, 2000, 1999 and 1998
consists of the following:
<TABLE>
<CAPTION>
2000 1999 1998
-------- -------- ----------
<S> <C> <C> <C>
Current:
Federal .................................................... $ 29,600 $ 21,400 $ 54,000
State and City ............................................. 137,400 123,600 142,000
Deferred taxes .............................................. 530,000 529,000 854,000
-------- -------- ----------
Total provision .......................................... $697,000 $674,000 $1,050,000
======== ======== ==========
</TABLE>
Components of the deferred tax provision for the years ended July 31, 2000,
1999 and 1998 consists of the following:
<TABLE>
<CAPTION>
2000 1999 1998
--------- -------- ---------
<S> <C> <C> <C>
Book depreciation over (under) tax depreciation ............. $ (15,088) $174,842 $ (29,000)
Reduction (increase) of rental income received in
advance .................................................... (92,652) 17,837 (24,000)
Increase in unbilled receivables ............................ 44,119 76,012 63,000
Deferred compensation ....................................... 35,360 35,360 35,000
et operating loss carryforwards ............................. 571,506 293,200 869,000
Alternative minimum tax ..................................... (29,521) (21,479) (53,000)
Other ....................................................... 16,276 (46,772) (7,000)
--------- -------- ---------
$ 530,000 $529,000 $ 854,000
========= ======== =========
</TABLE>
11
<PAGE>
================================================================================
Taxes provided for the years ended July 31, 2000, 1999 and 1998 differ from
amounts which would result from applying the federal statutory tax rate to
pre-tax income, as follows:
<TABLE>
<CAPTION>
2000 1999 1998
---------- ---------- ----------
<S> <C> <C> <C>
Income before income taxes .............................................. $1,762,937 $1,837,822 $2,887,733
Dividends received deduction ............................................ (45,694) (52,820) (98,530)
Other-net ............................................................... 44,522 (38,600) 22,663
---------- ---------- ----------
Adjusted pre-tax income ................................................. $1,761,765 $1,746,402 $2,811,866
========== ========== ==========
Statutory rate .......................................................... 34% 34% 34%
Income tax provision at statutory rate .................................. $ 599,000 $ 594,000 $ 956,300
State and City income taxes, net of federal
income tax benefit ..................................................... 98,000 80,000 93,700
---------- ---------- ----------
Income taxes provided ................................................... $ 697,000 $ 674,000 $1,050,000
========== ========== ==========
</TABLE>
The Company's fiscal 2000 and fiscal 1999 federal income tax liability of
$30,000 and $21,000, respectively, were 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 $306,000 resulting in total AMT credits of $357,000 at July
31, 2000.
At July 31, 2000, the Company had net operating tax loss carryforwards of
$748,000 available to offset future regular taxable income. Of this amount
$326,000 is available until the year 2010 and $422,000 until 2011.
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 1 year to 27 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, 2000 was exceeded by sublease rental income, as follows:
<TABLE>
<CAPTION>
2000 1999 1998
---------- ---------- ----------
<S> <C> <C> <C>
Minimum rental expense .................................................. $1,158,749 $1,155,118 $1,156,168
Contingent rental expense ............................................... 1,094,897 1,032,643 1,051,884
---------- ---------- ----------
2,253,646 2,187,761 2,208,052
Sublease rental income .................................................. 5,512,126 5,437,421 5,399,129
---------- ---------- ----------
Excess of rental income over expense ............................... $3,258,480 $3,249,660 $3,191,077
========== ========== ==========
</TABLE>
Rent expense paid to an affiliated company totaled $160,800 for each of the
fiscal years.
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
------ ---------
2001 ....................................... $ 1,087,174
2002 ....................................... 1,031,007
2003 ....................................... 1,031,007
2004 ....................................... 1,031,007
2005 ....................................... 1,018,750
After 2005 ................................. 5,849,402
-----------
Total required* ....................... $11,048,347
===========
* Minimum payments have not been reduced by minimum sublease rentals of
$31,437,639 under operating leases due in the future under non-cancellable
leases.
12
<PAGE>
================================================================================
7. RENTAL INCOME:
Rental income for each of the fiscal years 2000, 1999 and 1998 is as
follows:
<TABLE>
<CAPTION>
July 31,
-------------------------------------------
2000 1999 1998
----------- ----------- -----------
<S> <C> <C> <C>
Minimum rentals
Company owned property ................................................ $ 4,890,946 $ 4,803,089 $ 4,800,127
Operating leases ...................................................... 4,751,200 4,733,897 4,686,130
----------- ----------- -----------
9,642,146 9,536,986 9,486,257
----------- ----------- -----------
Contingent rentals
Company owned property ................................................ 461,493 420,787 464,003
Operating leases ...................................................... 760,926 703,524 712,999
----------- ----------- -----------
1,222,419 1,124,311 1,177,002
----------- ----------- -----------
Total ............................................................... $10,864,565 $10,661,297 $10,663,259
=========== =========== ===========
</TABLE>
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
------- -------------- ----------- -----------
2001 .............. $ 4,933,428 $ 4,930,884 $ 9,864,312
2002 .............. 4,508,887 4,461,330 8,970,217
2003 .............. 3,316,666 4,041,046 7,357,712
2004 .............. 3,226,382 4,036,004 7,262,386
2005 .............. 2,969,315 3,904,718 6,874,033
After 2005 ........ 14,581,495 10,063,657 24,645,152
----------- ----------- -----------
Total ......... $33,536,173 $31,437,639 $64,973,812
=========== =========== ===========
Rental income from an affiliated company totaled $413,610 for fiscal year
2000, $410,874 for fiscal year 1999 and $413,609 for fiscal year 1998.
Amounts due from the affiliated company are as follows:
July 31,
--------------------------
2000 1999
-------- ---------
Unbilled receivables ............... $363,875 $545,812
8. PAYROLL AND OTHER ACCRUED LIABILITIES:
Payroll and other accrued liabilities for the years ended July 31, 2000 and
1999 consists of the following:
2000 1999
-------- --------
Payroll ................................ $ 98,004 $ 93,704
Interest ............................... 49,181 54,555
Professional fees ...................... 55,750 52,115
Rents received in advance .............. 311,949 39,443
Utilities .............................. 101,080 79,065
Brokers commissions .................... 20,991 4,712
Construction costs ..................... 23,025 --
Other .................................. 96,680 56,546
-------- --------
Total ............................. $756,660 $380,140
======== ========
13
<PAGE>
================================================================================
9. EMPLOYEES' RETIREMENT PLAN:
The Company sponsors a noncontributory Money Purchase Plan covering
substantially all of its employees. Operations were charged $230,719, $225,353
and $202,432 as contributions to the Plan for fiscal years 2000, 1999 and 1998,
respectively.
10. 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,
--------------------------------------------
2000 1999 1998
-------- -------- --------
Interest paid .............. $623,688 $690,187 $820,577
Income taxes paid .......... $105,908 $266,075 $125,088
11. 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: (i) quoted market prices, when available, are
used to estimate the fair value of investments in marketable debt and equity
securities; (ii) 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 (iii) 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, 2000
--------------------------
CARRYING FAIR
VALUE VALUE
---------- ----------
Cash and cash equivalents ........... $1,529,082 $1,529,082
Marketable securities ............... $3,101,455 $3,101,455
Tenant security deposits ............ $ 352,235 $ 352,235
Long-term debt-mortgages payable .... $7,022,879 $7,009,948
Financial instruments that are potentially subject to concentrations of
credit risk consist principally of marketable securities, cash and cash
equivalents and receivables. Marketable securities and cash and cash equivalents
are placed with high credit quality financial institutions and instruments to
minimize risk.
The Company derives rental income from thirty-eight tenants, of which one
tenant accounted for 15.91% of rental income during the year ended July 31,
2000. No other tenant accounted for more than 10% of rental income during the
year ended July 31, 2000.
12. 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 realized from McCrory $36,602 or 21.53% on
account of its administrative claim of $170,000. The McCrory case has been
closed and the Company has been advised that there will be no further
distribution to creditors.
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 realized from Jamesway $465,811 or 49% on account of its
unsecured claim and 100% of its allowed administrative claim of $54,887, for a
total of $520,698. The Company has made no provision in its financial statements
for the balance of its claim filed against Jamesway due to the fact that there
may not be any further distributions.
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.
14
<PAGE>
================================================================================
13. SUBSEQUENT EVENTS:
The Company has agreed, in principle, to the terms of a commitment letter
with a bank for a loan in the amount of $3,500,000, the loan to be secured by a
second position leasehold mortgage covering the entire leasehold interest of the
Company as tenant in a certain ground lease and building in the Jamaica, New
York, property. The financial statements do not give effect to the commitment
letter. The loan proceeds are to be utilized by the Company toward its costs of
capital improvements of the premises in connection with the Company's lease of a
significant portion of a floor in the building to the State of New York.
The loan is structured in two phases:
No. 1--A nine-month second mortgage construction loan with a six-month
extension option, with interest at a floating prime rate. During this
period, the Company is to have the option to secure advances against the
loan amount.
No. 2--Upon completion of the renovations the construction loan would
convert to a 10-year second mortgage permanent loan on a 15-year level
amortization, plus interest, at the option of the Company. The interest
rate on the permanent loan during the first 5 years is at a fixed rate
equal to the 5-year treasury note rate plus 2.25%, per annum, set 3 days
prior to closing, and during the 5-year renewal term, at a fixed rate equal
to the 5-year treasury note rate, as of the start of the renewal term plus
2.25%, per annum.
Payments are to be payable, in arrears, on the first day of each and every
month calculated (a) during the period of the construction loan, interest only,
and (b) during the ten (10) year period of the term loan, at the sum of the
interest rate plus amortization sufficient to fully liquidate the loan over a
fifteen (15) year period. As additional collateral security, the Company will
conditionally assign to the bank all leases and rents on the premises, or
portions thereof, whether now existing or hereafter consummated. The Company has
an option to prepay principal, in whole or in part, plus interest accrued
thereon, at any time during the term, without premium or penalty. Other
provisions of the commitment letter provide certain restrictions on the
incurrence of indebtedness and the sale or transfer of the Company's ground
lease interest in the premises. Both facilities will be subject to the bank's
existing first position mortgage loan on the premises.
Rent commenced September 1, 2000 for 11,200 square feet of office space,
leased during April, 2000 to the State of New York, which space is contiguous to
space occupied by the State in the Company's Jamaica, New York property.
Renovations will be completed during November, 2000.
================================================================================
INDEPENDENT AUDITORS' 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 of July 31, 2000 and 1999, and the related consolidated
statements of income and retained earnings, comprehensive income and cash flows
for the three years ended July 31, 2000. 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 on our
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, 2000 and 1999, and the results of their
operations and their cash flows for the three years ended July 31, 2000 in
conformity with generally accepted accounting principles.
D'ARCANGELO & CO., LLP
Purchase, New York
October 12, 2000
15
<PAGE>
J.W. MAYS, INC.
FIVE YEAR SUMMARY OF CONSOLIDATED OPERATIONS
(dollars in thousands except per share data)
<TABLE>
<CAPTION>
Years Ended July 31,
--------------------------------------------------------------------
2000 1999 1998 1997 1996
------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Revenues
Rental income ............................... $ 10,451 $ 10,250 $ 10,249 $ 9,666 $ 8,855
Rental income--affiliated company ........... 414 411 414 414 414
Recovery of real estate taxes ............... -- -- 1,219 -- --
--------- --------- --------- --------- ---------
Total revenues ............................ 10,865 10,661 11,882 10,080 9,269
--------- --------- --------- --------- ---------
Expenses
Real estate operating expenses .............. 5,530 5,312 5,416 5,874 5,679
Administrative and general expenses ......... 2,240 2,119 2,077 1,939 2,008
Bad debts (recovery) ........................ -- (17) (53) (419) 424
Depreciation and amortization ............... 1,010 1,003 1,011 967 889
--------- --------- --------- --------- ---------
Total expenses ............................ 8,780 8,417 8,451 8,361 9,000
--------- --------- --------- --------- ---------
Income from operations before
investment income, interest expense and
income taxes ................................ 2,085 2,244 3,431 1,719 269
--------- --------- --------- --------- ---------
Investment income and interest expense
Investment income ........................... 297 278 269 268 250
Interest expense ............................ 619 684 812 696 682
--------- --------- --------- --------- ---------
(322) (406) (543) (428) (432)
--------- --------- --------- --------- ---------
Income (loss) before income taxes ............ 1,763 1,838 2,888 1,291 (163)
Income taxes provided (benefit) .............. 697 674 1,050 480 (22)
--------- --------- --------- --------- ---------
Net Income (loss) ............................ $ 1,066 $ 1,164 $ 1,838 $ 811 $ (141)
========= ========= ========= ========= =========
Net income (loss) per common share ........... $ .50 $ .54 $ .86 $ .38 $ (.07)
========= ========= ========= ========= =========
Dividends per share .......................... -- -- -- -- --
========= ========= ========= ========= =========
Average common shares outstanding ............ 2,118,908 2,135,780 2,135,780 2,136,175 2,136,397
========= ========= ========= ========= =========
</TABLE>
16
<PAGE>
J.W. MAYS, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
--------------------------------------------------------------------------------
FISCAL 2000 COMPARED TO FISCAL 1999
Net income for the year ended July 31, 2000 amounted to $1,065,938, or $.50
per share, compared to net income for the year ended July 31, 1999 of
$1,163,822, or $.54 per share. The 1999 figures include a bad debt recovery of
$17,115. There was no comparable bad debt recovery in the 2000 year.
Revenues in the current year increased to $10,864,565 from $10,661,297 in
the comparable 1999 fiscal year.
Real estate operating expenses in the current year increased to $5,529,850
from $5,312,787 in the comparable 1999 year primarily due to an increase in real
estate taxes, fuel, electric and water and sewer costs, partially offset by a
decrease in maintenance costs.
Administrative and general expenses in the current year increased to
$2,240,372 from $2,119,558 in the comparable 1999 year primarily due to an
increase in payroll, pension, medical and insurance costs.
Depreciation and amortization expense in the current year increased to
$1,009,859 from $1,002,733 in the 1999 year.
Interest expense exceeded investment income by $321,546 in fiscal 2000 and
by $405,512 in the comparable 1999 year. The decrease was due to scheduled
repayments of debt.
FISCAL 1999 COMPARED TO FISCAL 1998
Net income for the year ended July 31, 1999 amounted to $1,163,822, or $.54
per share, compared to net income for the year ended July 31, 1998 of $1,
837,733, or $.86 per share. The 1998 figures include a pre-tax net recovery of
real estate taxes of $1,218,600 (see below) and a pre-tax bad debt recovery of
$52,749. The 1999 figures include a pre-tax bad debt recovery of $17,115. There
was no comparable pre-tax net recovery of real estate taxes in the 1999 year.
Revenues in the 1999 year decreased to $10,661,297 from $11,881,859 in the
comparable 1998 fiscal year, primarily due to the pre-tax net recovery of prior
years' real estate taxes of $1,218,600 in the 1998 year.
The recovery of real estate taxes in the 1998 fiscal year of $1,218,600,
net of legal expenses and credits to tenants in accordance with the terms of
their leases, represents prior years' real estate taxes from the City of New
York and the Town of Fishkill, New York.
Real estate operating expenses in the 1999 year decreased to $5,312,787
from $5,416,292 in the comparable 1998 year primarily due to a decrease in real
estate taxes, fuel, vault charges, insurance, maintenance, water and sewer costs
and leasing commissions, partially offset by an increase in payroll and licenses
and permits costs.
Administrative and general expenses in the 1999 year increased to
$2,119,558 from $2,076,614 in the comparable 1998 year primarily due to an
increase in payroll, pension and medical costs, partially offset by a decrease
in insurance and legal and professional costs.
Depreciation and amortization expenses in the 1999 year decreased to
$1,002,733 from $1,011,318 in the 1998 year.
Interest expense exceeded investment income by $405,512 in fiscal 1999 and
by $542,651 in the comparable 1998 year. The decrease was primarily due to the
elimination of the loan payable to a securities broker and scheduled repayments
of debt.
The pre-tax bad debt recovery in the amount of $17,115 in the 1999 year and
$52,749 in the 1998 year relates to prior years' bad debt write-offs from
McCrory and Jamesway.
17
<PAGE>
================================================================================
LIQUIDITY AND CAPITAL RESOURCES:
The Company has been operating as a real estate enterprise since the
discontinuance of the retail department store segment of its operations on
January 3, 1989.
Management considers current working capital and borrowing capabilities
adequate to cover the Company's planned operating, capital and debt service
requirements. The Company's cash and cash equivalents amounted to $1,529,082 at
July 31, 2000.
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital Expenditures: The Company had expenditures of approximately
$808,893 for the fiscal year ended July 31, 2000 for renovations at its Jamaica,
New York building, of which $246,342 was to renovate11,200 square feet of
additional space for an existing tenant. The Company anticipates that the
renovation will cost approximately $1,000,000 and is anticipated to be completed
during November, 2000.
The Company had expenditures of $505,589 for renovations at its Brooklyn,
New York building for the fiscal year ended July 31, 2000. The Company
constructed a new lobby at this location to enable the Company to attract
tenants to the facility. The cost of the new lobby was $683,633. Work on the
lobby commenced in April, 1999 and was completed July, 2000. As of July 31,
2000, the Company had expended a total of $660,433 for the lobby.
The Company had expenditures of $225,421 for the fiscal year ended July 31,
2000 for the installation of heating, ventilating and air conditioning equipment
at its Fishkill, New York building, which work was completed in November, 1999.
CASH FLOWS FROM FINANCING ACTIVITIES:
The Company purchased 47,500 shares of its outstanding common stock in a
private transaction for a total purchase price of $256,500 during the year ended
July 31, 2000.
The Company extended the mortgage on the Jowein building in Brooklyn, New
York, effective April 1, 2000, for a period of five years, at the same interest
rate. The mortgage loan is self-amortizing.
YEAR 2000 (Y2K) COMPLIANCE:
No material expenditures were required to resolve the Company's year 2000
issue. The Y2K issue concerned the inability of some technology-based
information and operating systems to properly recognize and process
date-sensitive information beyond December 31, 1999. The Company did not
experience any operational problems with its computerized systems nor did the
Company experience any problems with any of its tenants, financial institutions,
contractors, utility companies or other service providers, relating to the year
2000 issue.
18
<PAGE>
J.W. MAYS, INC.
================================================================================
QUARTERLY FINANCIAL INFORMATION (UNAUDITED)
(dollars in thousands except per share data)
Three months ended
-------------------------------------------
Oct. 31, Jan. 31, Apr. 30, July 31,
1999 1999 1999 1999
-------- --------- -------- --------
Revenues ...................... $2,705 $2,727 $2,716 $2,717
Revenues less expenses ........ 462 331 449 521
Net income .................... 295 197 294 280
Net income per common share ... $ .14 $ .09 $ .14 $ .13
Three months ended
-------------------------------------------
Oct. 31, Jan. 31, Apr. 30, July 31,
1999 1999 1999 1999
-------- --------- -------- --------
Revenues ...................... $2,680 $2,625 $2,667 $2,689
Revenues less expenses ........ 490 323 486 539
Net income .................... 321 177 326 340
Net income per common share ... $ .15 $ .08 $ .16 $ .15
Income per share is computed independently for each of the quarters presented,
on the basis described inNote 1 to the Consolidated Financial Statements.
COMMON STOCK AND DIVIDEND INFORMATION
Effective November 8, 1999, the Company's common stock commenced trading on
The Nasdaq SmallCap Market tier of The Nasdaq Stock Market under the Symbol:
"Mays". Such shares were previously traded on The Nasdaq National Market.
Following is the sales price range per share of J.W. Mays, Inc. common
stock during the fiscal years ended July 31, 2000 and 1999:
Sales Price
-----------------
Three months ended High Low
------------------ ----- -----
OCTOBER 31, 1999 ............. 7.250 5.125
JANUARY 31, 2000 ............. 6.375 5.000
APRIL 30, 2000 ............... 6.125 5.000
JULY 31, 2000 ................ 7.000 4.500
October 31, 1998 ............. 12.500 6.875
January 31, 1999 ............. 8.500 6.531
April 30, 1999 ............... 9.000 3.250
July 31, 1999 ................ 8.000 4.688
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 22, 2000, the Company had approximately 3,500 shareholders of
record.
19
<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
Mark Greenblatt Vice President and Assistant Treasurer
Ward N. Lyke, Jr. Vice President--Management Information Services
George Silva Vice President
Salvatore Cappuzzo Secretary
BOARD OF DIRECTORS
Lance D. Myers 1,2,3,4 From March 6, 2000 with the law firm of Holland &
Knight LLP; From February 1983 through March 5,
2000, with the law firm of Cullen and Dykman
Dean L. Ryder 2,3,4 President, Putnam County National Bank
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.
Sylvia W. Shulman 3 Retired
Lewis D. Siegel 2,3,4 First Vice President--Investments, Salomon Smith
Barney
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, 2000, will be furnished without
charge to shareholders upon written request to: Secretary, J.W. Mays, Inc.,
9 Bond Street, Brooklyn, New York 11201.
20
