FORM 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 [ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended January 31, 1996 [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ________________ to ________________ Commission file number 1-3647 J.W. Mays, Inc. (Exact name of registrant as specified in its charter) New York 11-1059070 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 9 Bond Street, Brooklyn, New York 11201-5805 (Address of principal executive offices) (Zip Code) (Registrant's telephone number, including area code) 718-624-7400 Not Applicable (Former name, former address and former fiscal year, if changed since last report) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X . No . Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. Class Outstanding at March 8, 1996 Common Stock, $1 par value 2,136,397 shares This report contains 16 pages. J. W. MAYS, INC. INDEX Page No. Part I - Financial Information: Consolidated Balance Sheet 3 Consolidated Statement of Operations and Retained Earnings 4 Consolidated Statement of Cash Flows 5 Notes to Consolidated Financial Statements 6 - 12 Management's Discussion and Analysis of Results of Operations and Financial Condition 13 - 14 Part II - Other Information 15 J. W. MAYS, INC. CONSOLIDATED BALANCE SHEET January 31, July 31, ASSETS 1996 1995 --------------------------------------------------------------- --------------- --------------- (Unaudited) (Audited) Property and Equipment - net (Notes 4 and 6) $26,019,120 $25,285,935 ------------- ------------- Current Assets: Cash and cash equivalents 441,990 490,315 Marketable securities - other investments (Notes 3 and 8) 2,919,851 2,799,712 Receivables 314,358 244,992 Deferred income taxes 37,000 27,000 Prepaid expenses 1,049,346 1,121,694 ------------- ------------- Total current assets 4,762,545 4,683,713 ------------- ------------- Other Assets: Deferred charges 2,551,276 2,329,140 Less accumulated amortization 984,499 913,311 ------------- ------------- Net 1,566,777 1,415,829 Security deposits 843,530 458,641 Unbilled receivables (Note 9) 3,937,500 4,026,435 Receivables 153,906 109,687 Marketable securities - other investments (Notes 3 and 8) 97,726 164,063 Deferred income taxes 110,000 - ------------- ------------- Total other assets 6,709,439 6,174,655 ------------- ------------- TOTAL ASSETS $37,491,104 $36,144,303 ============= ============= LIABILITIES AND SHAREHOLDERS' EQUITY --------------------------------------------------------------- Long-Term Debt: Mortgages payable (Note 4) $6,885,452 $5,954,306 Other (Note 5) 1,059,833 677,597 ------------- ------------- Total long-term debt 7,945,285 6,631,903 ------------- ------------- Deferred Income Taxes - 14,000 ------------- ------------- Current Liabilities: Payable to securities broker (Note 8) 1,310,679 1,225,100 Accounts payable 17,927 64,744 Payroll and other accrued liabilities 551,299 487,956 Income taxes payable 6,383 18,588 Other taxes payable 8,758 4,081 Current portion of long-term debt - mortgages payable (Note 4) 525,245 404,813 ------------- ------------- Total current liabilities 2,420,291 2,205,282 ------------- ------------- Total liabilities 10,365,576 8,851,185 ------------- ------------- Shareholders' Equity: Common stock, par value $1 each share (shares - 5,000,000 authorized; 2,178,297 issued) 2,178,297 2,178,297 Additional paid in capital 3,346,245 3,346,245 Unrealized gain on available for sale securities (Note 3) 96,540 28,010 Retained earnings 21,788,686 22,024,806 ------------- ------------- 27,409,768 27,577,358 Less common stock held in treasury, at cost - 41,900 shares at January 31, 1996 and July 31, 1995 284,240 284,240 ------------- ------------- Total shareholders' equity 27,125,528 27,293,118 ------------- ------------- Commitments and Contingencies (Note 14) TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $37,491,104 $36,144,303 ============= ============= See Notes to Consolidated Financial Statements. - 3- J.W. MAYS, INC. CONSOLIDATED STATEMENT OF OPERATIONS AND RETAINED EARNINGS Three Months Ended Six Months Ended January 31, January 31, -------------- -------------- -------------- --------------- 1996 1995 1996 1995 ------------- ------------- ------------- ------------- (Unaudited) (Unaudited) (Unaudited) (Unaudited) Revenues Rental income $2,468,181 $2,109,155 $4,494,435 $4,179,904 ------------- ------------- ------------- ------------- Expenses Real estate operating expenses 1,506,188 1,402,653 2,778,806 2,757,216 Administrative and general expenses 891,624 500,996 1,407,904 1,022,200 Depreciation and amortization 222,684 209,555 439,768 417,984 ------------- ------------- ------------- ------------- Total expenses 2,620,496 2,113,204 4,626,478 4,197,400 ------------- ------------- ------------- ------------- (Loss) from operations before investment income, interest expense and income taxes (152,315) (4,049) (132,043) (17,496) ------------- ------------- ------------- ------------- Investment income and interest expense Investment income 64,857 112,163 125,166 221,549 Interest expense (173,140) (168,490) (340,243) (342,605) ------------- ------------- ------------- ------------- (108,283) (56,327) (215,077) (121,056) ------------- ------------- ------------- ------------- (Loss) from operations before income taxes (260,598) (60,376) (347,120) (138,552) Income taxes (benefit) (94,000) (7,000) (111,000) (28,000) ------------- ------------- ------------- ------------- (Loss) from operations before cumulative effect of change in accounting for certain investments in debt and equity securities (166,598) (53,376) (236,120) (110,552) Cumulative effect of change in accounting for certain investments in debt and equity securities - - - 21,769 ------------- ------------- ------------- ------------- Net (loss) (166,598) (53,376) (236,120) (88,783) Retained earnings, beginning of period 21,955,284 22,361,438 22,024,806 22,396,845 ------------- ------------- ------------- ------------- Retained earnings, end of period $21,788,686 $22,308,062 $21,788,686 $22,308,062 ============= ============= ============= ============= (Loss) per common share (Loss) from operations $(.08) $(.02) $(.11) $(.05) Cumulative effect of change in accounting for certain investments in debt and equity securities - - - .01 ------------- ------------- ------------- ------------- Net (loss) per common share $(.08) $(.02) $(.11) $(.04) ============= ============= ============= ============= Dividends per share $ - $ - $ - $ - ============= ============= ============= ============= Average common shares outstanding 2,136,397 2,136,397 2,136,397 2,136,397 ============= ============= ============= ============= See Notes to Consolidated Financial Statements. -4- J. W. MAYS, INC. CONSOLIDATED STATEMENT OF CASH FLOWS Six Months Ended January 31, ----------------- --------------- 1996 1995 ------------- ------------- (Unaudited) (Unaudited) Cash Flows From Operating Activities (Loss) from operations $(236,120) $(110,552) Cumulative effect of change in accounting for certain investments in debt and equity securities - 21,769 ------------- ------------- Net (loss) (236,120) (88,783) Adjustments to reconcile net (loss) to net cash provided by (used in) operating activities: Amortization of premium on marketable debt securities 346 1,534 Realized gain on marketable securities - (11,998) Unrealized gain on marketable securities - 14,231 Depreciation and amortization 439,768 417,984 Amortization of deferred expenses 100,995 96,313 Other assets - deferred expenses (251,943) (57,971) - security deposits (384,889) (194,904) - unbilled receivables 88,935 (353,764) Deferred income taxes (169,000) (122,000) Changes in: Receivables (113,585) 155,939 Prepaid expenses 72,348 37,482 Income taxes refundable - 22,005 Accounts payable (46,817) (72,739) Payroll and other accrued liabilities 63,343 (94,692) Income taxes payable (12,205) 13,178 Other taxes payable 4,677 4,745 ------------- ------------- Net cash (used in) operating activities (444,147) (233,440) ------------- ------------- Cash Flows From Investing Activities Capital expenditures (1,172,953) (462,154) Marketable securities - other investments: Receipts from sales or maturities 50,004 1,797,463 Payments for purchases (622) (415,050) ------------- ------------- Net cash provided by (used in) investing activities (1,123,571) 920,259 ------------- ------------- Cash Flows From Financing Activities Borrowings - securities broker 255,904 1,571,070 Payments - securities broker (170,325) (1,910,007) Increase (reduction) of mortgage debt - short term 120,432 (193,978) - long term 1,313,382 (196,199) ------------- ------------- Net cash provided by (used in) financing activities 1,519,393 (729,114) ------------- ------------- Net (decrease) in cash (48,325) (42,295) Cash and cash equivalents at beginning of period 490,315 602,289 ------------- ------------- Cash and cash equivalents at end of period $441,990 $559,994 ============= ============= See Notes to Consolidated Financial Statements. -5- J. W. MAYS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1. The interim financial statements are prepared pursuant to the requirements for reporting on Form 10-Q. The July 31, 1995 balance sheet was derived from audited financial statements but does not include all disclosures required by generally accepted accounting principles. The interim financial statements and notes thereto should be read in conjunction with the financial statements and notes included in the Company's latest Annual Report on Form 10-K for the year ended July 31, 1995. In the opinion of management, the interim financial statements reflect all adjustments of a normal recurring nature necessary for a fair statement of the results for interim periods. The results of operations for the current period are not necessarily indicative of the results for the entire year ending July 31, 1996. 2. Loss per common share has been computed by dividing the net loss for the periods by the weighted average number of shares of common stock outstanding during the periods, adjusted for the purchase of treasury stock. Shares used in computing the loss per common share were 2,136,397 in each of the three and six months ended January 31, 1996 and 1995. 3. Marketable Securities - Other Investments: Effective August 1, 1994, the Company adopted Statement of Financial Accounting Standards No. 115, "Accounting for Certain Investments in Debt and Equity Securities" ("FAS 115"). FAS 115 requires certain securities to be categorized as either trading, available for sale or held to maturity. Trading securities are carried at fair value with unrealized gains and losses included in income. Available for sale securities are carried at fair value with unrealized gains and losses recorded as a separate component of shareholders' equity. Held to maturity securities are carried at amortized cost. Dividends and interest income are accrued as earned. The cumulative effect as of August 1, 1994 of adopting Statement No. FAS 115 increased net income by $21,769 (net of $10,000 in deferred income taxes), or $.01 per share. The opening balance of shareholders' equity at August 1, 1994 was decreased by $21,769 to reflect the net unrealized holding gains on securities classified as available for sale previously carried at amortized cost or lower of cost or market. For the three months ended January 31, 1996, shareholders' equity was increased by $42,274 (net of $21,000 in deferred income taxes). For the six months ended January 31, 1996, shareholders' equity was increased by $68,530 (net of $35,000 in deferred income taxes). For the three months ended January 31, 1995, shareholders' equity was increasd by $13,805 (net of $3,000 in deferred income taxes). For the six months ended January 31, 1995, shareholders' equity was decreased by $67,362 (net of $36,000 in deferred income taxes). Marketable Securities - Other Investments (continued) As of January 31, 1996, the Company's marketable securities were classified as follows: Gross Gross Unrealized Unrealized Fair Cost Gains Losses Value ------------- ------------- ------------- ------------- Current Available for sale Equity securities $2,481,936 $145,540 $- $2,627,476 Certificate of deposit 26,426 - - 26,426 ------------- ------------- ------------- ------------- Total 2,508,362 145,540 - 2,653,902 Held to maturity Corporate debt securities due within one year 265,949 1,348 - 267,297 ------------- ------------- ------------- ------------- Total current $2,774,311 $146,888 $- $2,921,199 ============= ============= ============= ============= Noncurrent Held to maturity Corporate debt securities 97,726 7,582 - 105,308 ------------- ------------- ------------- ------------- Total noncurrent $97,726 $7,582 $- $105,308 ============= ============= ============= ============= Investment income consists of the following: Three Months Ended Six Months Ended January 31, January 31, ------------------------------ ------------------------------ 1996 1995 1996 1995 _________ _________ _________ _________ Interest income $10,214 $45,744 $20,619 $97,256 Dividend income 54,643 54,421 104,547 112,295 Gain on sale of marketable securities - 11,998 - 11,998 ------------- ------------- ------------- ------------- Total $64,857 $112,163 $125,166 $221,549 ============= ============= ============= ============= -7- 4. Long-Term Debt: January 31, 1996 July 31, 1995 ------------------------------ ------------------------------ Current Annual Final Due Due Due Due Interest Payment Within After Within After Rate Date One Year One Year One Year One Year ------- -------- ------------- ------------- ------------- ------------- Term - loan payable to bank (a) Variable 8/01/00 $104,167 $1,145,833 $- $- Mortgages: Jowein Building, Brooklyn, N.Y. (b) 10% 3/31/98 56,222 892,719 53,513 921,524 Fishkill, New York Property (c) 9% 11/01/99 103,888 2,616,971 99,333 2,670,079 Circleville, Ohio Property (d) 7% 9/30/02 253,755 2,024,623 245,053 2,153,714 Other 8 1/2% 5/01/01 7,213 205,306 6,914 208,989 ------------- ------------- ------------- ------------- Total $525,245 $6,885,452 $404,813 $5,954,306 ============= ============= ============= ============= (a)On August 17, 1995 the Company entered into an agreement with a bank wherein the bank approved a $1,500,000 loan facility for the Company to use to fund building construction/renovation costs to accommodate tenants under lease. The overall term of the facility is five years with a one year line of credit, to be taken down as needed. The initial twelve month period is to be on an interest only basis, payable monthly, with the principal balance outstanding to be converted to a four year fully amortizing term loan, payable with monthly payments to be first applied to the payment of interest, and second, to the payment of the principal indebtedness. The interest rate for advances under the line and the term loan will be the bank's prime rate of interest on a floating basis. The leases between the Company and two of its tenants in the Brooklyn (Jowein Building) renovated area have been assigned to the bank as collateral for the loan. There is no prepayment penalty for early payoff of the loan. The Company has taken down $1,250,000 as of the date of this report. (b)Mortgage is held by an affiliated corporation owned by members, including certain directors of the Company, of the family of the late Joe Weinstein, former Chairman of the Board of Directors. Interest and amortization of principal are paid quarterly. The mortgage was due to mature on March 31, 1996. On September 6, 1995, the maturity date of the mortgage was extended to March 31, 1998. The interest rate of 10% will continue until March 31, 1996 and from April 1, 1996 the interest rate will be established at a bank's prevailing rate as at March 31, 1996. During the renewal period there will be no change in the constant quarterly payments of interest and principal in the amount of $37,263. (c)On October 28, 1994, the existing first mortgage loan balance on the Fishkill property was paid down by a $200,000 payment and the due date of the mortgage loan was extended for a period of five years from November 1, 1994. The annual interest rate was reduced from 10% to 9% and the principal and interest payments are to be made in constant monthly amounts based upon a fifteen year payout period. (d)The mortgage loan, which is self-amortizing, matures September 30, 2002. The loan is payable at an annual interest rate of 7%. Under the terms of the loan, constant monthly payments, including interest and principal, commenced April 1, 1994 in the amount of $33,767, until October 1, 1997, at which time the monthly payments of interest and principal increase to $36,540. 5. Long-Term Debt - Other: Long-Term debt - other consists of the following: January 31, July 31, 1996 1995 --------------- --------------- Deferred compensation * $520,000 $520,000 Lease security deposits ** 539,833 157,597 ------------- ------------- Total $1,059,833 $677,597 ============= ============= * In fiscal 1964 the Company entered into a deferred compensation agreement with its then Chairman of the Board. This agreement, as amended, provides for the $520,000 to be paid in monthly installments of $8,666.67 for a period of 60 months, payable upon the expiration of his employment, retirement or permanent disability as defined in the agreement, or death. **Does not include two irrevocable letters of credit totaling $110,000 at January 31, 1996 and three irrevocable letters of credit totaling $410,000 at July 31, 1995, provided by two and three tenants, respectively. 6. Property and Equipment - Net: January 31, July 31, 1996 1995 --------------- --------------- Property and equipment - at cost: Buildings and improvements $31,627,054 $30,867,736 Improvements to leased property 8,989,411 8,215,035 Fixtures and equipment 486,597 483,208 Land 4,008,835 4,008,835 Other 171,183 167,223 Construction in progress - 384,133 ------------- ------------- 45,283,080 44,126,170 Less accumulated depreciation and amortization 19,263,960 18,840,235 ------------- ------------- Property and equipment - net $26,019,120 $25,285,935 ============= ============= 7. Income Taxes: Effective August 1, 1993, the Company adopted Statement of Financial Accounting Standards No. 109 "Accounting for Income Taxes" ("FAS 109"). 8. Payable to Securities Broker: The Company borrowed funds, payable on demand, from a securities broker. The loan balance at January 31, 1996 in the amount of $1,310,679, secured by the Company's marketable securities, accrues interest, which at January 31, 1996, was at the annual rate of 7.75%. 9. Unbilled Receivables: Unbilled receivables represent the excess of scheduled rental income recognized on a straight-line basis over rental income as it becomes receivable according to the provisions of each lease. 10. Employees' Retirement Plan: The Company sponsors a noncontributory Money Purchase Plan covering substantially all of its employees. Operations were charged $35,000 and $70,000 as contributions to the Plan for the three and six months ended January 31, 1996, respectively, and $36,000 and $70,000 as contributions to the Plan for the three and six months ended January 31, 1995, respectively. 11. Cash Flow Information: For purposes of reporting cash flows, the Company considers cash equivalents to consist of short-term highly liquid investments with maturities of six months or less, which are readily convertible into cash. Supplemental disclosure: Six Months Ended January 31, ------------------------------ 1996 1995 ------------------------------ Interest paid $341,827 $349,107 Income taxes paid $70,205 $22,817 12. Financial Accounting Standards No. 121: In May 1995, the Financial Accounting Standards Board issued Statement of Financial Standards No. 121 ("FAS 121"), "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of", effective for fiscal years beginning after December 15, 1995. FAS 121 requires the recognition of an impairment loss related to long-lived assets and certain identifiable intangibles whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The Company believes that the adoption of the new accounting standard will not have any effect on the consolidated financial statements. 13. Financial Instruments and Credit Risk Concentrations: Financial instruments that are potentially subject to concentrations of credit risk consist principally of marketable securities-other investments, cash equivalents and receivables. Marketable securities-other investments and cash equivalents are placed with high credit quality financial institutions and instruments to minimize risk. The Company derives rental income from twenty-five tenants, of which two tenants each accounted for more than 10% of rental income during the quarter ended January 31, 1996. The City of New York is one of the two tenants and the other tenant is 510 Fulton Street Realty Associates, the owners of which are long established in business. McCrory Stores Corporation ("McCrory"), which occupied space in the Fulton Mall in downtown Brooklyn, New York, and whose lease extended to April 29, 2010 and accounted for approximately 14% of the 1993 annual rental income of the Company, filed for Chapter 11 bankruptcy protection from creditors on February 26, 1992. McCrory made application to the United States Bankruptcy Court for authorization to reject the lease agreement, as amended, between the Company, as landlord, and McCrory, as tenant, effective January 31, 1994. The United States Bankruptcy Court authorized McCrory to reject such lease agreement effective January 31, 1994 by order signed on January 21, 1994. The Company has filed a Proof of Claim with the United States Bankruptcy Court, Southern District of New York in the total amount of $7,753,732 which amount includes $7,667,082 for damages arising from the rejection of the lease and $86,650 for pre- petition rental obligations. The Company has not included this claim in its financial statements due to the uncertainty of the ultimate court determined amount. McCrory has not as yet filed a Plan of Reorganization with the Bankruptcy Court. The Company has leased 50,000 square feet of the 99,000 square feet of space surrendered by McCrory. The lease with IBM, a former tenant in the Fishkill, New York property, expired on March 31, 1994. The IBM lease previously accounted for approximately 8% of the annual rental income of the Company. On August 31, 1995, the Company leased to the U.S. Post Office 25,000 square feet of the 100,000 square feet of space vacated by IBM. Occupancy commenced in December 1995. Jamesway Corporation, which occupied retail space in the Fishkill, New York property, filed for Chapter 11 bankruptcy protection from creditors on July 19, 1993. Jamesway emerged from bankruptcy on January 28, 1995. Jamesway, which was expected to account for approximately 5.2% of the annual rental income of the Company for the fiscal year ending July 31, 1996, and whose lease extended to January 31, 2005, filed for chapter 11 bankruptcy protection from creditors again on October 18, 1995. Jamesway, with the authority from the bankruptcy court, conducted a Going Out Of Business Sale at all of its stores and closed the Fishkill store during January, 1996. Jamesway rejected its lease in the Fishkill location with the approval of the United States Bankruptcy Court, effective February 29, 1996. The Company intends to file a Proof of Claim with the United States Bankruptcy Court, Southern District of New York in the amount of $853,478 for damages arising from the rejection of the lease. The Company has made no provision in its financial statements for post- petition damages in the amount of $821,507 relating to the lease rejection. Negotiations have been in progress to lease approximately 70,000 square feet of the 90,200 square feet occupied by Jamesway. 14. Commitments and Contingencies: There are various lawsuits and claims pending against the Company. It is the opinion of management that the resolution of these matters will not have a material adverse effect on the Company's Financial Statements. J. W. MAYS, INC. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION Results of Operations: Three Months Ended January 31, 1996 Compared to the Three Months Ended January 31, 1995: Operations for the three months ended January 31, 1996 resulted in an after tax net loss of $166,598, or $.08 per share, after the write off of a bad debt amounting to $424,011 relating to the rejection by a tenant of its lease, discussed below. There was no comparable item in the 1995 three month period. The comparable 1995 quarter resulted in an after tax net loss of $53,376, or $.02 per share. Rental income in the current three months increased to $2,468,181 from $2,109,155 in the comparable 1995 three months, principally due to the addition of three new tenants. Real estate operating expenses increased to $1,506,188 from $1,402,653 in the 1995 period principally due to increased maintenance and fuel costs. Adminintrative and general expenses increased to $891,624 from $500,996 principally due to the write off of the bad debt of $424,011 discussed below, offset in part by decreased insurance and legal and professional costs. The Company reports scheduled rental income recognized on a straight-line basis rather than rental income as it becomes receivable according to the provisions of the lease, in compliance with the provisions of Statement of Financial Accounting Standards No. 13, "Accounting for Leases". The excess of the scheduled rental income of Jamesway recognized on a straight line basis over rental income reported through January 31, 1996, amounts to $424,011 and such amount has been written off and classified as a bad debt. Depreciation and amortization expense in the current three months increased to $222,684 from $209,555 in the three months ended January 31, 1995 because of additional improvements to property. Interest expense exceeded investment income by $108,283 in the current quarter and by $56,327 in the comparable 1995 quarter, principally due to the increased interest on the broker loan discussed in Note 8 and the loan facility discussed in Note 4 (a) to Consolidated Financial Statements. Six Months Ended January 31, 1996 Compared to the Six Months Ended January 31, 1995 Operations for the six months ended January 31, 1996 resulted in an after tax net loss of $236,120, or $.11 per share, after the write off of a bad debt amounting to $424,011 relating to the rejection by a tenant of its lease, discussed above. There was no comparable item in the 1995 six month period. Operations for the comparable 1995 six month period resulted in an after tax net loss of $110,552, or $.05 per share. The overall net loss in the 1996 six month period amounted to $236,120, or $.11 per share, after the write off of the bad debt discussed above. The overall net loss for the 1995 six month period amounted to $88,783, or $.04 per share, after the cumulative effect (an increase of income) of a change in accounting for certain investments in debt and equity securities, in the amount of $21,769, or $.01 per share. There was no comparable item in the 1996 six month period. Rental income in the current six months increased to $4,494,435 from $4,179,904 in the 1995 six month period principally due to the addition of three new tenants. Real estate operating expenses increased to $2,778,806 from $2,757,216 in the 1995 comparable period principally due to increased maintenance and fuel costs, offset in part, by an allowed credit for utility costs and a decrease in real estate taxes in the 1996 six month period. Administrative and general expenses increased to $1,407,904 from $1,022,200 principally due to the bad debt write off of $424,011, discussed above, offset in part by decreased insurance and legal and professional costs. Depreciation and amortization expense in the current six months increased to $439,768 from $417,984 in the six months ended January 31, 1995 because of additional improvements to property. Interest expense exceeded interest income in the amount of $215,077 in the current six month period and by $121,056 in the six months ended January 31, 1995 principally due to the increased interest on the broker loan discussed in Note 8 and the loan facility discussed in Note 4 (a) to Consolidated Financial Statements. Liquidity and Capital Resources: The Company has been operating as a real estate enterprise since the discontinuance of the retail department store segment of its operations on January 3, 1989. The leasing of 50,000 square feet of space in the Jowein Building located in the Fulton Mall in downtown Brooklyn, New York to two chain store tenants for retail space and the leasing of 25,000 square feet to the U. S. Post Office in Fishkill, New York will provide additional working captial for the Company. The terms of the Brooklyn leases commenced in November, 1995 and the Fishkill lease in December, 1995. On August 17, 1995, the Company entered into an agreement with a bank wherein the bank approved a $1,500,000 loan facility for the Company to use to fund building construction/renovation costs to accommodate tenants under the lease. The Company has taken down $1,250,000 as of the date of this report (see Note 4 (a) to Consolidated Financial Statements). The Company had working capital of $2,342,254, with a ratio of current assets to current liabilities of 2 to 1 at January 31, 1996. Management considers current working capital and borrowing capabilities adequate to cover the Company's planned operating and capital requirements. Part II - Other Information Item 6 - Exhibits and Reports on Form 8-K (a) List of Exhibits: Sequentially Exhibit Numbered Number Exhibit Page (2) Plan of acquisition, reorganization, arrangement, liquidation or succession. N/A (4) Instruments defining the rights of security holders, including indentures. N/A (10) Material contracts. N/A (11) Statement re computation of per share earnings. N/A (15) Letter re unaudited interim financial information. N/A (18) Letter re change in accounting principles. N/A (19) Report furnished to security holders. N/A (22) Published report regarding matters submitted to vote of security holders. N/A (24) Power of attorney. N/A (27) Financial data schedule. N/A (99) Additional exhibits. N/A (b) Reports on Form 8-K - A report on Form 8-K was filed by the Registrant during the quarter for which this report on Form 10-Q is being filed. Item reported - Change in Registrant's certifying accountants. Financial Statements filed - None Date of Report filed - January 11, 1996 A report on Form 8-K/A, an amendment to the above report on Form 8-K, was filed by the Registrant on February 6, 1996. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. J.W. MAYS, Inc. (Registrant) Date March 8, 1996 Lloyd J. Shulman ----------------------------- Lloyd J. Shulman, Co-Chairman Date March 8, 1996 Alex Slobodin ----------------------------------- Alex Slobodin, Exec. Vice-President (Principal Financial Officer)