FORM 10-Q
UNITED
STATES
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
October 31,
2012
[ ]
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
incorporation or organization)
|
(I.R.S. Employer 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 by check mark whether
the registrant has submitted electronically and posted on its corporate Web
site, if any, every Interactive Data File required to be submitted and posted
pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the
preceding 12 months (or for such shorter period that the registrant was required
to submit and post such files). Yes
X
No ____.
Indicate by check mark whether
the registrant is a large accelerated filer, an accelerated filer, a
non-accelerated filer, or a smaller reporting company. See the definitions of
large accelerated filer, accelerated filer and smaller reporting company
in Rule 12b-2 of the Exchange Act.
Large accelerated filer ____ Accelerated filer ____ Non-accelerated filer
____ Smaller reporting company
X
.
Indicate by check mark whether
the registrant is a shell company (as defined in Rule 12b-2 of the Exchange
Act). Yes ____ No
X
.
Indicate the number of shares
outstanding of the issuer's common stock, as of the latest practicable date.
Class
|
Outstanding at December 5, 2012
|
Common Stock, $1 par value
|
2,015,780 shares
|
|
|
This report contains 20
pages.
|
-1-
J. W. MAYS, INC.
INDEX
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Page No.
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Part I - Financial Information:
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Item 1.
Financial Statements
|
|
|
|
|
|
Condensed Consolidated Balance Sheets October 31, 2012
(unaudited)
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|
|
and July 31, 2012
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3
|
|
|
|
Condensed Consolidated Statements of Income and Retained
Earnings
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|
|
Three months ended October 31, 2012 and 2011 (unaudited)
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4
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Condensed Consolidated Statements of Comprehensive Income
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Three months ended October 31, 2012 and 2011 (unaudited)
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5
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Condensed Consolidated Statements of Cash Flows
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Three months ended October 31, 2012 and 2011 (unaudited)
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6
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Notes to Condensed Consolidated Financial Statements
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7 - 12
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Item 2.
Management's Discussion and Analysis of Results
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of Operations and Financial Condition
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13 - 15
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Item 3.
Quantitative and Qualitative Disclosures About Market Risk
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15
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Item 4.
Controls and Procedures
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15
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Part II - Other Information
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16
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Item
1A. Risk Factors
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16
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Item 6.
Exhibits and Reports on Form 8-K
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16
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Signatures
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17
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Exhibit
31 Certifications Pursuant to Section 302 of the Sarbanes-Oxley Act of
2002
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(31.1) - Chief Executive Officer
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18
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(31.2) - Chief Financial Officer
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19
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Exhibit
32 Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of
2002
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18 U.S.C. Section 1350
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20
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-2-
Part 1 - Financial
Information
Item 1 - Financial Statements
J. W. MAYS, INC.
CONDENSED CONSOLIDATED
BALANCE SHEETS
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October 31
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|
July 31
|
|
2012
|
|
2012
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|
(Unaudited)
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|
(Audited)
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ASSETS
|
|
|
|
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Property and Equipment - Net (Notes 5 and 6)
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$
|
44,086,275
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|
$
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44,259,379
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|
Current Assets:
|
|
|
|
|
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Cash
and cash equivalents (Note 4)
|
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2,348,266
|
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1,340,203
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Marketable securities (Notes 3 and 4)
|
|
126,088
|
|
|
226,397
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Receivables (Note 4)
|
|
353,280
|
|
|
276,585
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Deferred income taxes
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|
589,000
|
|
|
599,000
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Prepaid expenses
|
|
627,725
|
|
|
1,220,333
|
Security deposits
|
|
218,036
|
|
|
217,022
|
Total current assets
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|
4,262,395
|
|
|
3,879,540
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Other Assets:
|
|
|
|
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Deferred charges
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3,594,846
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|
|
3,594,846
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Less
accumulated amortization
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1,975,075
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|
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1,888,642
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Net
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1,619,771
|
|
|
1,706,204
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Receivables (Note 4)
|
|
90,000
|
|
|
120,000
|
Security deposits
|
|
993,964
|
|
|
989,873
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Unbilled receivables (Note 8)
|
|
2,280,766
|
|
|
2,214,540
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Marketable securities (Notes 3
and 4)
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2,490,903
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2,215,209
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Total other assets
|
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7,475,404
|
|
|
7,245,826
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|
TOTAL ASSETS
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$
|
55,824,074
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|
$
|
55,384,745
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|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
|
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|
Long-Term Debt:
|
|
|
|
|
|
Mortgages payable (Note
5)
|
$
|
5,563,339
|
|
$
|
5,591,597
|
Note
payable - related party (Note 7)
|
|
1,000,000
|
|
|
1,000,000
|
Security deposits
payable
|
|
747,984
|
|
|
743,894
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Payroll
and other accrued liabilities
|
|
|
|
|
28,457
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Total long-term debt
|
|
7,311,323
|
|
|
7,363,948
|
|
Deferred Income Taxes
|
|
3,284,000
|
|
|
3,282,000
|
|
Current Liabilities:
|
|
|
|
|
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Accounts payable
|
|
70,290
|
|
|
85,083
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Payroll
and other accrued liabilities
|
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1,321,692
|
|
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1,483,944
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Income taxes payable
|
|
238,060
|
|
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79,362
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Other
taxes payable
|
|
6,939
|
|
|
4,287
|
Current portion of long-term
debt (Note 5)
|
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149,127
|
|
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158,662
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Current
portion of security deposits payable
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218,036
|
|
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217,022
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Total current liabilities
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2,004,144
|
|
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2,028,360
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TOTAL LIABILITIES
|
|
12,599,467
|
|
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12,674,308
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Shareholders' Equity:
|
|
|
|
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Common
stock, par value $1 each share (shares - 5,000,000
|
|
|
|
|
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authorized; 2,178,297 issued)
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2,178,297
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2,178,297
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Additional paid in
capital
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3,346,245
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|
|
3,346,245
|
Unrealized gain on available-for-sale securities - net of deferred taxes
of
|
|
|
|
|
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$119,000 at October 31, 2012 and $110,000 at July 31, 2012
|
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146,873
|
|
|
133,477
|
Retained earnings
|
|
38,841,044
|
|
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38,340,270
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44,512,459
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43,998,289
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Less common stock held in
treasury, at cost - 162,517
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shares at October 31, 2012 and at July 31, 2012 (Note 11)
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1,287,852
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|
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1,287,852
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Total shareholders' equity
|
|
43,224,607
|
|
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42,710,437
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Contingencies (Note 12)
|
|
|
|
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TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
|
$
|
55,824,074
|
|
$
|
55,384,745
|
See
Notes to Condensed Consolidated Financial Statements.
-3-
J. W. MAYS,
INC.
CONDENSED CONSOLIDATED
STATEMENTS OF INCOME AND RETAINED EARNINGS
|
Three Months Ended
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|
October
31
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2012
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|
2011
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(Unaudited)
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(Unaudited)
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Revenues
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|
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Rental income (Notes 4 and
8)
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$
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4,194,532
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$
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3,982,537
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Total revenues
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4,194,532
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|
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3,982,537
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Expenses
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Real estate operating
expenses
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2,000,894
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2,014,265
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Administrative and general expenses
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844,069
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940,421
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Depreciation and amortization
(Note 6)
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401,257
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386,797
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Total expenses
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3,246,220
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|
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3,341,483
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Income from operations before investment
income,
|
|
|
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interest expense and income taxes
|
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948,312
|
|
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641,054
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Investment income and interest expense:
|
|
|
|
|
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Investment income (Note 3)
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10,324
|
|
|
|
2,812
|
|
Interest expense (Notes 5, 7
and 10)
|
|
(113,862
|
)
|
|
|
(151,689
|
)
|
|
|
( 103,538
|
)
|
|
|
(148,877
|
)
|
|
Income from operations before income
taxes
|
|
844,774
|
|
|
|
492,177
|
|
Income taxes provided
|
|
344,000
|
|
|
|
120,000
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Net income
|
|
500,774
|
|
|
|
372,177
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Retained earnings, beginning of
period
|
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38,340,270
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|
|
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37,069,917
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Retained earnings, end of period
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$
|
38,841,044
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|
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$
|
37,442,094
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Income per common share (Note 2)
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$
|
.25
|
|
|
$
|
.18
|
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Dividends per share
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$
|
|
|
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$
|
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Average common shares outstanding
|
|
2,015,780
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|
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2,015,780
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|
See Notes to Condensed
Consolidated Financial Statements.
-4-
J. W. MAYS,
INC.
CONDENSED CONSOLIDATED
STATEMENTS OF COMPREHENSIVE INCOME
|
Three Months Ended
|
|
October
31
|
|
2012
|
|
2011
|
|
(Unaudited)
|
|
(Unaudited)
|
Net income
|
$
|
500,774
|
|
$
|
372,177
|
|
|
Other comprehensive income, net of
taxes
|
|
|
|
|
|
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Unrealized gain (loss) on available-for-sale securities,
|
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net of taxes (benefit) of $9,000 and ($5,000) for the
|
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three months ended October 31, 2012 and 2011, respectively.
|
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13,396
|
|
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(12,460
|
)
|
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Comprehensive income
|
$
|
514,170
|
|
$
|
359,717
|
|
See Notes to Condensed
Consolidated Financial Statements.
-5-
J. W. MAYS,
INC.
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
Three Months Ended
|
|
October
31
|
|
2012
|
|
2011
|
|
(Unaudited)
|
|
(Unaudited)
|
Cash Flows From Operating
Activities:
|
|
|
|
|
|
|
|
Net income
|
$
|
500,774
|
|
|
$
|
372,177
|
|
|
Adjustments to reconcile net income
to
|
|
|
|
|
|
|
|
net
cash provided by operating activities:
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
401,257
|
|
|
|
386,797
|
|
Amortization of deferred charges
|
|
86,433
|
|
|
|
81,700
|
|
Realized loss on sale of
marketable securities
|
|
517
|
|
|
|
8,202
|
|
Other
assets - unbilled receivables
|
|
(66,226
|
)
|
|
|
(98,097
|
)
|
Deferred income
taxes
|
|
3,000
|
|
|
|
(80,000
|
)
|
Changes in:
|
|
|
|
|
|
|
|
Receivables
|
|
(46,695
|
)
|
|
|
17,573
|
|
Income
taxes refundable
|
|
-
|
|
|
|
315,577
|
|
Prepaid expenses
|
|
592,608
|
|
|
|
601,692
|
|
Accounts payable
|
|
(14,793
|
)
|
|
|
(3,379
|
)
|
Payroll and other accrued
liabilities
|
|
(190,709
|
)
|
|
|
275,290
|
|
Income
taxes payable
|
|
158,698
|
|
|
|
70,194
|
|
Other taxes payable
|
|
2,652
|
|
|
|
2,797
|
|
Cash provided by operating activities
|
|
1 ,427,516
|
|
|
|
1,950,523
|
|
|
Cash Flows From Investing
Activities:
|
|
|
|
|
|
|
|
Capital expenditures
|
|
(228,153
|
)
|
|
|
(437,587
|
)
|
Security deposits
|
|
(5,105
|
)
|
|
|
32,450
|
|
Marketable
securities:
|
|
|
|
|
|
|
|
Receipts from sales or maturities
|
|
99,816
|
|
|
|
179,941
|
|
Payments for purchases
|
|
(253,322
|
)
|
|
|
(179,368
|
)
|
Cash (used) by investing activities
|
|
(386,764
|
)
|
|
|
(404,564
|
)
|
|
Cash Flows From Financing
Activities:
|
|
|
|
|
|
|
|
Increase (decrease) - security
deposits
|
|
5,104
|
|
|
|
(30,285
|
)
|
Mortgage and other debt payments
|
|
(37,793
|
)
|
|
|
(2,167,232
|
)
|
Cash (used) by financing activities
|
|
(32,689
|
)
|
|
|
(2,197,517
|
)
|
|
Increase (decrease) in cash and cash
equivalents
|
|
1,008,063
|
|
|
|
(651,558
|
)
|
|
Cash and cash equivalents at beginning of
period
|
|
1,340,203
|
|
|
|
2,656,354
|
|
|
Cash and cash equivalents at end of
period
|
$
|
2 ,348,266
|
|
|
$
|
2,004,796
|
|
See Notes to Condensed
Consolidated Financial Statements.
-6-
J. W. MAYS,
INC.
NOTES TO CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
1.
|
|
Accounting Records and Use of Estimates:
|
|
|
|
The
accounting records are maintained in accordance with accounting principles
generally accepted in the United States of America (GAAP). The
preparation of the Companys financial statements in accordance with GAAP
requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities at the date of the financial
statements, the disclosure of contingent assets and liabilities, and the
reported amounts of revenues and expenses during the reporting period. The
estimates that we make include allowance for doubtful accounts,
depreciation and amortization, income tax assets and liabilities, fair
value of marketable securities and revenue recognition. Estimates are
based on historical experience where applicable or other assumptions that
management believes are reasonable under the circumstances. Due to the
inherent uncertainty involved in making estimates, actual results may
differ from those estimates under different assumptions or
conditions.
|
|
|
|
The
interim financial statements are prepared pursuant to the requirements for
reporting on Form 10-Q. The July 31, 2012 balance sheet was derived from
audited financial statements but does not include all disclosures required
by GAAP. The interim financial statements and notes thereto should be read
in conjunction with the financial statements and notes included in the
Company's latest Form 10-K Annual Report for the fiscal year ended July
31, 2012. 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 fiscal year ending July 31, 2013.
|
|
|
|
The
computation of the annual expected effective tax rate at each interim
period requires certain estimates and assumptions including, but not
limited to, the expected operating income for the year, projections of the
proportion of income (or loss), and permanent and temporary differences.
The accounting estimates used to compute the provision for income taxes
may change as new events occur, more experience is acquired, or as
additional information is obtained. To the extent that the estimated
annual effective tax rate changes during a quarter, the effect of the
change on prior quarters is included in tax expense for the current
quarter.
|
|
|
|
Prior to
April 30, 2012, the Company historically calculated New York State and New
York City taxes based on capital, as such, the taxes were considered
franchise taxes and were not included when calculating deferred taxes.
Currently, management expects future taxes for New York State and New York
City to be calculated based on income. Due to a move from a tax based on
capital to a calculation based on income, deferred tax asset, deferred tax
liability, and deferred taxes on unrealized gain on available-for-sale
securities includes $143,000, $644,000, and $29,000, respectively, at
October 31, 2012 and $3,000 of deferred tax expense for the three months
ended October 31, 2012.
|
|
2.
|
|
Income
Per Share of Common Stock:
|
|
|
|
Income per
share has been computed by dividing the net income for the periods by the
weighted average number of shares of common stock outstanding during the
periods, adjusted for the purchase of treasury stock. Shares used in
computing income per share were 2,015,780 for the three months ended
October 31, 2012 and October 31, 2011.
|
-7-
3.
|
|
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 measurements using quoted prices in
active markets for identical assets or liabilities 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. The Company reviews
marketable securities for impairment whenever circumstances and situations
change such that there is an indication that the carrying amounts may not
be recovered. The Company did not classify any securities as trading
during the three months ended October 31, 2012 and October 31, 2011.
The Company adopted
Accounting Standards Certification (ASC) 820, Fair Value Measurements and
Disclosures in 2011. ASC 820 establishes a fair value hierarchy that
prioritizes the valuation techniques and creates the following three broad
levels, with Level 1 valuation being the highest priority:
Level 1 valuation inputs are quoted market prices in active markets
for identical assets or liabilities that are accessible at the measurement
date (e.g., equity securities traded on the New York Stock Exchange).
Level 2 valuation inputs are from other than quoted market prices
included in Level 1 that are observable for the asset or liability, either
directly or indirectly (e.g., quoted market prices of similar assets or
liabilities in active markets, or quoted market prices for identical or
similar assets or liabilities in markets that are not active).
Level 3 valuation inputs are unobservable (e.g., an entitys own
data) and should be used to measure fair value to the extent that
observable inputs are not available.
In accordance with the
provisions of
Fair Value
Measurements
, the following
are the Company's financial assets presented at fair value at October 31,
2012 and July 31, 2012.
|
|
|
|
|
|
|
|
|
Fair value measurements at reporting date
using
|
|
|
|
|
|
|
|
|
|
|
|
Quoted prices
|
|
|
|
|
|
|
|
|
|
|
Quoted prices
|
|
|
|
|
|
|
|
|
|
|
|
in
active
|
|
Significant
|
|
|
|
|
|
|
|
in
active
|
|
Significant
|
|
|
|
|
|
|
|
|
markets for
|
|
other
|
|
Significant
|
|
|
|
|
markets for
|
|
other
|
|
Significant
|
|
|
|
|
|
identical
|
|
observable
|
|
unobservable
|
|
|
|
|
identical
|
|
observable
|
|
unobservable
|
|
|
|
|
|
assets/liabilities
|
|
inputs
|
|
inputs
|
|
|
|
|
assets/liabilities
|
|
inputs
|
|
inputs
|
|
|
October 31
|
|
|
|
|
|
|
|
|
|
|
July
31
|
|
|
|
|
|
|
|
|
|
Description
|
|
2012
|
|
(Level 1)
|
|
(Level 2)
|
|
(Level 3)
|
|
2012
|
|
(Level 1)
|
|
(Level 2)
|
|
(Level 3)
|
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Marketable securities
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
available-for-sale
|
|
$
|
2,490,903
|
|
$
|
2,490,903
|
|
$
|
|
|
$
|
|
|
$
|
2,215,209
|
|
$
|
2,215,209
|
|
$
|
|
|
$
|
|
held-to-maturity
|
|
|
77,250
|
|
|
77,250
|
|
|
|
|
|
|
|
|
178,176
|
|
|
178,176
|
|
|
|
|
|
|
|
|
$
|
2,568,153
|
|
$
|
2,568,153
|
|
$
|
|
|
$
|
|
|
$
|
2,393,385
|
|
$
|
2,393,385
|
|
$
|
|
|
$
|
|
-8-
As of October 31, 2012 and
July 31, 2012, the Company's marketable securities were classified as
follows:
|
|
October 31,
2012
|
|
July 31,
2012
|
|
|
|
|
|
Gross
|
|
Gross
|
|
|
|
|
|
|
|
Gross
|
|
Gross
|
|
|
|
|
|
|
|
|
Unrealized
|
|
Unrealized
|
|
Fair
|
|
|
|
|
Unrealized
|
|
Unrealized
|
|
Fair
|
|
|
Cost
|
|
Gains
|
|
Losses
|
|
Value
|
|
Cost
|
|
Gains
|
|
Losses
|
|
Value
|
Current:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Held-to-maturity:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Certificate of deposit
|
|
$
|
50,270
|
|
$
|
|
|
$
|
|
|
$
|
50,270
|
|
$
|
50,246
|
|
$
|
|
|
$
|
|
|
$
|
50,246
|
Corporate debt
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
securities
|
|
|
75,818
|
|
|
1,432
|
|
|
|
|
|
77,250
|
|
|
176,151
|
|
|
2,025
|
|
|
|
|
|
178,176
|
|
|
$
|
126,088
|
|
$
|
1,432
|
|
$
|
|
|
$
|
127,520
|
|
$
|
226,397
|
|
$
|
2,025
|
|
$
|
|
|
$
|
228,422
|
Noncurrent:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Available-for-sale:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mutual funds
|
|
$
|
1,509,280
|
|
$
|
161,791
|
|
$
|
2,653
|
|
$
|
1,668,418
|
|
$
|
1,255,982
|
|
$
|
123,203
|
|
$
|
|
|
$
|
1,379,185
|
Equity
securities
|
|
|
715,750
|
|
|
127,167
|
|
|
20,432
|
|
|
822,485
|
|
|
715,750
|
|
|
135,813
|
|
|
15,539
|
|
|
836,024
|
|
|
$
|
2,225,030
|
|
$
|
288,958
|
|
$
|
23,085
|
|
$
|
2,490,903
|
|
$
|
1,971,732
|
|
$
|
259,016
|
|
$
|
15,539
|
|
$
|
2,215,209
|
The Company's debt and equity
securities, gross unrealized losses and fair value, aggregated by investment
category and length of time that the investment securities have been in a
continuous unrealized loss position, at October 31, 2012, are as
follows.
|
|
|
|
|
Less Than
|
|
More Than
|
|
|
Fair
Value
|
|
12
Months
|
|
12
Months
|
Equity securities
|
|
$
|
384,624
|
|
$
|
20,432
|
|
$
|
|
Mutual Funds
|
|
|
248,103
|
|
|
2,653
|
|
|
|
Total
|
|
$
|
632,727
|
|
$
|
23,085
|
|
$
|
|
Investment income consists of
the following:
|
Three Months Ended
|
|
October
31
|
|
2012
|
|
2011
|
Loss on sale of marketable
securities
|
$
|
(517
|
)
|
|
$
|
(8,202
|
)
|
Interest income
|
|
2,527
|
|
|
|
6,294
|
|
Dividend income
|
|
8,314
|
|
|
|
4,720
|
|
Total
|
$
|
10,324
|
|
|
$
|
2,812
|
|
-9-
4.
|
|
Financial
Instruments and Credit Risk Concentrations:
|
|
|
|
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 multiple financial institutions and multiple instruments to
minimize risk. No assurance can be made that such financial institutions
and instruments will minimize all such risk.
|
|
|
|
The Company derives
rental income from fifty-one tenants, of which one tenant accounted for
22.43% and another tenant accounted for 15.50% of rental income during the
three months ended October 31, 2012. No other tenant accounted for more
than 10% of rental income during the same period.
|
|
|
|
The Company has one
irrevocable Letter of Credit totaling $230,000 at October 31, 2012 and
July 31, 2012 provided by one tenant as a security deposit.
|
|
5.
|
|
Long-Term Debt
Mortgages:
|
|
|
|
|
|
|
|
|
|
|
October 31,
2012
|
|
July 31,
2012
|
|
|
|
|
Current
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Annual
|
|
Final
|
|
Due
|
|
Due
|
|
Due
|
|
Due
|
|
|
|
|
Interest
|
|
Payment
|
|
Within
|
|
After
|
|
Within
|
|
After
|
|
|
|
|
Rate
|
|
Date
|
|
One
Year
|
|
One
Year
|
|
One
Year
|
|
One
Year
|
Fishkill, New York property
|
|
(a,b)
|
|
6.98
|
%
|
|
2/18/15
|
|
$
|
42,322
|
|
$
|
1,578,876
|
|
$
|
45,028
|
|
$
|
1,586,896
|
Bond
St. building, Brooklyn, NY
|
|
(b)
|
|
6.98
|
%
|
|
2/18/15
|
|
|
106,805
|
|
|
3,984,463
|
|
|
113,634
|
|
|
4,004,701
|
Total
|
|
|
|
|
|
|
|
|
$
|
149,127
|
|
$
|
5,563,339
|
|
$
|
158,662
|
|
$
|
5,591,597
|
(a)
|
|
On August 19, 2004,
the Company extended the then existing loan for an additional forty-two
(42) months, with an option to convert the loan to a seven (7) year
permanent mortgage loan. (See Note 5(b) below). The Company in February
2008 converted the loan to a seven (7) year permanent mortgage loan. The
interest rate on conversion was 6.98%.
|
|
(b)
|
|
The Company, on
August 19, 2004, closed a loan with a bank for a $12,000,000 multiple draw
term loan. This loan financed seventy-five (75%) percent of the cost of
capital improvements for an existing lease to a tenant and capital
improvements for future tenant leases at the Companys Brooklyn, New York
(Bond Street building) and Fishkill, New York properties through February
2008. The loan also financed $850,000 towards the construction of two new
elevators at the Companys Brooklyn, New York property (Bond Street
building). The loan consists of: a) a permanent, first mortgage loan to
refinance an existing first mortgage loan affecting the Fishkill, New York
property, which matured on July 1, 2004 (the First Permanent Loan)(see
Note 5(a)), b) a permanent subordinate mortgage loan in the amount of
$1,870,000 (the Second Permanent Loan), and c) multiple, successively
subordinate loans in the amount $8,295,274 (Subordinate Building Loans).
As of August 19, 2004, the Company refinanced the existing mortgage on the
Companys Fishkill, New York property, which balance was $1,834,726 and
took down an additional $2,820,000 for capital improvements for two
tenants at the Companys Bond Street building in Brooklyn, New York. In
fiscal years 2006, 2007 and 2008, the Company drew down additional amounts
totaling $916,670, on its multiple draw term loan to finance tenant
improvements and brokerage commissions for the leasing of 13,026 square
feet for office use at the Companys Bond Street building in Brooklyn, New
York. The Company, in February 2008, converted the loan to a seven (7)
year permanent mortgage loan.The interest rate on
conversion was 6.98%. Since the loan has been converted to a permanent
mortgage loan, the balance of the financing on this loan was for the new
elevators at the Companys Bond Street building in Brooklyn, New York in
the amount of $850,000 referred to above. The $850,000 was drawn down in
fiscal 2010.
|
-10-
6.
|
|
Property and Equipment at
cost:
|
|
|
|
October 31
|
|
July 31
|
|
|
|
2012
|
|
2012
|
|
Property:
|
|
|
|
|
|
|
|
Buildings and improvements
|
|
$
|
68,359,303
|
|
$
|
68,160,718
|
|
Improvements to
leased property
|
|
|
1,478,012
|
|
|
1,478,012
|
|
Land
|
|
|
6,067,805
|
|
|
6,067,805
|
|
Construction in
progress
|
|
|
102,035
|
|
|
72,467
|
|
|
|
|
76,007,155
|
|
|
75,779,002
|
|
Less accumulated
depreciation
|
|
|
32,009,188
|
|
|
31,620,831
|
|
Property - net
|
|
|
43,997,967
|
|
|
44,158,171
|
|
|
|
Fixtures and equipment and
other:
|
|
|
|
|
|
|
|
Fixtures and equipment
|
|
|
167,687
|
|
|
167,687
|
|
Other fixed
assets
|
|
|
219,385
|
|
|
219,385
|
|
|
|
|
387,072
|
|
|
387,072
|
|
Less accumulated
depreciation
|
|
|
298,764
|
|
|
285,864
|
|
Fixtures and equipment and other - net
|
|
|
88,308
|
|
|
101,208
|
|
|
|
Property and equipment - net
|
|
$
|
44,086,275
|
|
$
|
44,259,379
|
7.
|
|
Note Payable:
|
|
|
|
On December 15, 2004, the Company borrowed $1,000,000
from a former director of the Company, who at this time was also a greater
than 10% beneficial owner of the outstanding common stock of the Company.
The term of the loan was for a period of three (3) years maturing on
December 15, 2007 and was extended for an additional three (3) years
maturing on December 15, 2010, at an interest rate of 7.50% per annum. The
constant quarterly payments of interest were $18,750 through December 15,
2010. The Company, on November 11, 2010, further extended the note for an
additional three (3) years maturing on December 15, 2013, at an interest
rate of 5.00% per annum. The constant quarterly payment of interest is
$12,500. The loan is unsecured. The note is prepayable in whole or in part
at any time without penalty. The interest paid was $12,500 for each of the
three months ended October 31, 2012 and October 31, 2011, respectively.
The lender/former director passed away on November 17, 2012.
|
|
8.
|
|
Unbilled Receivables and Rental Income:
|
|
|
|
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 contributes to a union sponsored
multi-employer pension plan covering its union employees. The Company
contributions to the Pension Plan for the three months ended October 31,
2012 and 2011, respectively, were $6,886 and $6,568. The Company also
contributes to union sponsored health benefit plans.
|
|
|
|
The Company sponsors a noncontributory Money Purchase
Plan covering substantially all of its non-union employees. Operations
were charged $87,500 and $84,911 as contributions to the Plan for the
three months ended October 31, 2012 and 2011,
respectively.
|
-11-
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 (3) months or less, which are readily
convertible into cash.
|
|
|
Supplemental disclosure:
|
|
Three Months
Ended
|
|
|
|
October 31
|
|
|
|
2012
|
|
2011
|
|
Interest paid, net of
capitalized interest of $768 (2012)
|
|
|
|
|
|
|
|
|
and $1,269
(2011)
|
|
$
|
114,089
|
|
$
|
164,218
|
|
|
|
|
Income taxes paid
(refunded)
|
|
$
|
182,302
|
|
$
|
(185,771
|
)
|
11.
|
|
Capitalization:
|
|
|
|
The Company is capitalized
entirely through common stock with identical voting rights and rights to
liquidation. Treasury stock is recorded at cost and consists of 162,517
shares at October 31, 2012 and at July 31, 2012.
|
|
12.
|
|
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 Condensed Consolidated Financial Statements.
|
|
|
|
If the Company sells, transfers,
disposes of, or demolishes 25 Elm Place, Brooklyn, New York, then the
Company may be liable to create a condominium unit for the loading dock.
The necessity of creating the condominium unit and the cost of such
condominium unit cannot be determined at this
time.
|
-12-
Item 2.
J. W. MAYS, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF RESULTS OF OPERATIONS
AND FINANCIAL CONDITION
Managements Discussion and Analysis of
Financial Condition and Results of Operations should be read in conjunction with
our financial statements and related notes thereto contained in this report. In
this discussion, the words Company, we, our and us refer to J.W. Mays,
Inc. and subsidiaries.
Forward Looking Statements:
The following can be interpreted as
including forward looking statements under the Private Securities Litigation
Reform Act of 1995. The words outlook, intend, plans, efforts,
anticipates, believes, expects or words of similar import typically
identify such statements. Various important factors that could cause actual
results to differ materially from those expressed in the forward-looking
statements are identified under the heading Cautionary Statement Regarding
Forward-Looking Statements below. Our actual results may vary significantly
from the results contemplated by these forward-looking statements based on a
number of factors including, but not limited to, availability of labor,
marketing success, competitive conditions and the change in economic conditions
of the various markets we serve.
Critical Accounting Policies and
Estimates:
The preparation of financial statements in
conformity with accounting principles generally accepted in the United States of
America requires us to make estimates and judgments that affect the reported
amounts of assets, liabilities, revenues, expenses and related disclosure of
contingent assets and liabilities. We believe the critical accounting policies
in Note 1 to the Condensed Consolidated Financial Statements affect our more
significant judgments and estimates used in the preparation of our financial
statements. Actual results may differ from these estimates under different
assumptions and conditions. (See Note 1 on page 7 to the Condensed Consolidated
Financial Statements herein and Note 1 on pages 9 through 11 to the Consolidated
Financial Statements in the Annual Report to Shareholders for the fiscal year
ended July 31, 2012).
Results of Operations:
Three months Ended October 31, 2012
Compared to the Three months Ended October 31, 2011:
In the three months ended October 31,
2012, the Company reported net income of $500,774, or $.25 per share. In the
comparable three months ended October 31, 2011, the Company reported net income
of $372,177, or $.18 per share.
Revenues in the current three months
increased to $4,194,532 from $3,982,537 in the comparable 2011 three months
primarily due to two new tenants at the Company's Nine Bond Street, Brooklyn,
New York property, one new tenant at the Company's Massapequa, New York property
and increased rents from existing tenants.
Real estate operating expenses in the
current three months decreased to $2,000,894 from $2,014,265 in the comparable
2011 three months primarily due to decreases in utility costs and licenses and
permits, partially offset by increases in maintenance costs.
Administrative and general expenses in the
current three months decreased to $844,069 from $940,421 in the comparable 2011
three months primarily due to decreases in payroll costs, legal and professional
costs and stationary and printing costs.
Depreciation and amortization expense in
the current three months increased to $401,257 from $386,797 in the comparable
2011 three months, primarily due to improvements to the Nine Bond Street,
Brooklyn, New York property.
-13-
Interest expense in the current three
months exceeded investment income by $103,538 and by $148,877 in the comparable
2011 three months. The decrease in the excess of interest expense over
investment income was due primarily to scheduled repayments of debt.
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 Companys planned
operating and capital requirements. The Companys cash and cash equivalents
amounted to $2,348,266 at October 31, 2012.
In October, 2012, a tenant who occupies
56,547 square feet of office space at the Company's Jowein building in Brooklyn,
New York informed the Company that it was vacating the premises in January 2013.
The annual loss in rental income to the Company will be approximately
$1,357,000. The Company is actively seeking through brokers tenants to occupy
the space when it is vacated.
A tenant who occupies 22,000 square feet
of office space at the Company's Jowein building in Brooklyn, New York will
vacate the premises in January 2013. The annual loss in rental income to the
Company will be approximately $546,000. The Company is actively seeking through
brokers tenants to occupy the space when it is vacated.
Cash Flows From Investing Activities:
The Company had expenditures of $66,898 in
the three months ended October 31, 2012 for work on the elevators in the
Brooklyn, New York and Jamaica, New York properties. The cost of the project
will be approximately $300,000 and is anticipated to be completed in the spring
of 2013.
Cautionary Statement Regarding
Forward-Looking Statements:
This section, Managements Discussion and
Analysis of Financial Condition and Results of Operations, other sections of
this Report on Form 10-Q and other reports and verbal statements made by our
representatives from time to time may contain forward-looking statements that
are based on our assumptions, expectations and projections about us and the real
estate industry. These include statements regarding our expectations about
revenues, our liquidity, our expenses and our continued growth, among others.
Such forward-looking statements by their nature involve a degree of risk and
uncertainty. We caution that a variety of factors, including but not limited to
the factors listed below, could cause business conditions and our results to
differ materially from what is contained in forward-looking statements:
-
changes in the rate of economic growth in the
United States;
-
the ability to obtain credit from financial
institutions and at what costs;
-
changes in the financial condition of our
customers;
-
changes in regulatory environment;
-
lease cancellations;
-
changes in our estimates of costs;
-
war and/or terrorist attacks on facilities where
services are or may be provided;
-
outcomes of pending and future litigation;
-
increasing competition by other companies;
-
compliance with our loan covenants;
-
recoverability of claims against our customers and
others by us and claims by third parties against us; and
-
changes in estimates used in our critical
accounting policies.
Other factors and assumptions not
identified above were also involved in the formation of these forward-looking
statements and the failure of such other assumptions to be realized, as well as
other factors, may also cause actual results to differ materially from those
projected. Most of these factors are difficult to predict accurately and are
generally beyond our control. You should consider the areas of risk described
above in connection with any forward-looking statements that may be made by us.
-14-
We undertake no obligation to publicly
update any forward-looking statements, whether as a result of new information,
future events or otherwise. You are advised, however, to review any additional
disclosures we make in proxy statements, Quarterly Reports on Form 10-Q, Annual
Reports on Form 10-K and Current Reports on Form 8-K filed with the United
States Securities and Exchange Commission.
Item 3. Quantitative and Qualitative
Disclosures About Market Risk:
The Company uses fixed-rate debt to
finance its capital requirements. These transactions do not expose the Company
to market risk related to changes in interest rates. The Company does not use
derivative financial instruments. At October 31, 2012, the Company had
fixed-rate debt of $6,712,466.
Item 4. Controls and Procedures:
The Companys management reviewed the
Companys internal controls and procedures and the effectiveness of these
controls. As of October 31, 2012, the Company carried out an evaluation, under
the supervision and with the participation of the Companys management,
including its Chief Executive Officer and Chief Financial Officer, of the
effectiveness of the design and operation of the Companys disclosure controls
and procedures pursuant to Rules 13a-14(c) and 15d-14(c) of the Securities
Exchange Act of 1934. Based upon that evaluation, the Chief Executive Officer
and Chief Financial Officer concluded that the Companys disclosure controls and
procedures are effective in timely alerting them to material information
relating to the Company required to be included in its periodic SEC filings.
There was no change in the Companys internal controls over financial reporting
or in other factors during the Companys last fiscal quarter that materially
affected, or are reasonably likely to materially affect, the Companys internal
controls over financial reporting. There were no significant deficiencies or
material weaknesses, and therefore there were no corrective actions taken.
-15-
Part II - Other Information
Item 1A. Risk
Factors
There have been no changes to our risk
factors from those disclosed in our Annual Report on Form 10-K for our fiscal
year ended July 31, 2012.
Item 6. Exhibits and Reports on Form 8-K
(a) List of
Exhibits:
|
|
|
|
|
Sequentially
|
|
Exhibit
|
|
|
|
Numbered
|
|
Number
|
|
Exhibit
|
|
Page
|
|
(3)
|
|
Articles of Incorporation and
Bylaws
|
|
N/A
|
|
(10)
|
|
Material contracts
|
|
N/A
|
|
(11)
|
|
Statement re computation of per share
earnings
|
|
N/A
|
|
(12)
|
|
Statement re computation of ratios
|
|
N/A
|
|
(14)
|
|
Code of ethics
|
|
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
|
|
(31)
|
|
Additional
exhibits--Certifications Pursuant to Section 302 of the Sarbanes-Oxley Act
of 2002.
|
|
|
|
|
|
(31.1) Chief Executive Officer
|
|
18
|
|
|
|
(31.2) Chief Financial Officer
|
|
19
|
|
(32)
|
|
Certification Pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section
1350
|
|
20
|
|
EX-101.INS
|
|
XBRL INSTANCE
DOCUMENT
|
|
|
|
EX-101.SCH
|
|
XBRL TAXONOMY EXTENSION
SCHEMA
|
|
|
|
EX-101.PRE
|
|
XBRL TAXONOMY
EXTENSION PRESENTATION LINKBASE
|
|
|
|
EX-101.LAB
|
|
XBRL TAXONOMY EXTENSION LABEL
LINKBASE
|
|
|
|
EX-101.CAL
|
|
XBRL TAXONOMY
EXTENSION CALCULATION LINKBASE
|
|
|
|
EX-101.DEF
|
|
XBRL TAXONOMY EXTENSION
DEFINITION LINKBASE
|
|
|
|
(b)
|
|
Reports on Form 8-K Two reports on Form 8-K were filed
by the registrant during the three months ended October 31,
2012.
|
|
|
|
|
|
Items reported:
|
|
|
|
|
|
The Company reported its financial results for the three months and year
ended July 31, 2012.
|
|
|
|
Date of report filed - October 4, 2012.
|
|
|
|
|
|
The Company reported the results of the Submission of Matters to a vote of
security holders.
|
|
|
|
Date of report filed - November 21, 2012.
|
-16-
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
|
December 5, 2012
|
|
Lloyd
J. Shulman
|
|
|
Lloyd J.
Shulman
|
|
|
President
|
|
|
Chief Executive
Officer
|
|
|
|
Date
|
December 5, 2012
|
|
Mark S.
Greenblatt
|
|
|
Mark S.
Greenblatt
|
|
|
Vice
President
|
|
|
Chief Financial
Officer
|
-17-
J W Mays (NASDAQ:MAYS)
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