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 October 31, 1997 [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ________________ to ________________ Commission file number 1-3647 J.W. Mays, Inc. (Exact name of registrant as specified in its charter) New York 11-1059070 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 9 Bond Street, Brooklyn, New York 11201-5805 (Address of principal executive offices) (Zip Code) (Registrant's telephone number, including area code) 718-624-7400 Not Applicable (Former name, former address and former fiscal year, if changed since last report) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X . No . Number of shares outstanding of the issuer's common stock as of the latest practicable date. Class Outstanding at December 5, 1997 Common Stock, $1 par value 2,135,780 shares This report contains 17 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 the Consolidated Financial Statements 6 - 13 Management's Discussion and Analysis of Results of Operations and Financial Condition 14 - 15 Part II - Other Information 16 J. W. MAYS, INC. CONSOLIDATED BALANCE SHEET October 31, July 31, ASSETS 1997 1997 --------------------------------------------------------------- --------------- --------------- (Unaudited) (Audited) Property and Equipment - Net (Notes 5 and 7) $28,142,659 $28,125,834 ------------- ------------- Current Assets: Cash and cash equivalents 1,252,666 234,288 Marketable securities - other investments (Notes 4 and 9) 2,665,558 2,721,127 Receivables (Note 10) 364,605 563,410 Deferred income taxes 98,000 67,000 Security deposits 8,268 - Prepaid expenses 564,494 1,150,916 ------------- ------------- Total current assets 4,953,591 4,736,741 ------------- ------------- Other Assets: Deferred charges 2,789,171 2,745,524 Less accumulated amortization 1,094,417 1,030,351 ------------- ------------- Net 1,694,754 1,715,173 Security deposits 606,895 589,492 Unbilled receivables (Note 10) 3,740,957 3,651,795 Unbilled receivables - affiliated company (Note 10) 864,203 909,688 Receivables 334,749 384,088 Receivables - affiliated company (Note 10) 300,039 194,453 Marketable securities - other investments (Notes 4 and 9) 98,883 98,716 ------------- ------------- Total other assets 7,640,480 7,543,405 ------------- ------------- TOTAL ASSETS $40,736,730 $40,405,980 ============= ============= LIABILITIES AND SHAREHOLDERS ' EQUITY --------------------------------------------------------------- Long-Term Debt: Mortgages payable (Note 5) $8,438,965 $8,641,833 Other (Note 6) 630,726 640,868 ------------- ------------- Total long-term debt 9,069,691 9,282,701 ------------- ------------- Deferred Income Taxes 517,000 326,000 ------------- ------------- Current Liabilities: Payable to securities broker (Note 9) 688,269 1,270,053 Accounts payable 61,670 46,256 Payroll and other accrued liabilities 1,108,489 553,215 Income taxes payable 8,910 11,436 Other taxes payable 3,282 1,918 Current portion of long-term debt - mortgages payable (Note 5) 796,008 780,365 Current portion of long-term debt - other (Note 6) 112,268 104,000 ------------- ------------- Total current liabilities 2,778,896 2,767,243 ------------- ------------- Total liabilities 12,365,587 12,375,944 ------------- ------------- 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 97,247 101,151 Retained earnings 23,039,456 22,694,445 ------------- ------------- 28,661,245 28,320,138 Less common stock held in treasury, at cost - 42,517 shares at October 31, 1997 and July 31, 1997 290,102 290,102 ------------- ------------- Total shareholders' equity 28,371,143 28,030,036 ------------- ------------- Commitments (Note 10) and Contingencies (Note 14) TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $40,736,730 $40,405,980 ============= ============= See Notes to the Consolidated Financial Statements. -3- J. W. MAYS, INC. CONSOLIDATED STATEMENT OF OPERATIONS AND RETAINED EARNINGS Three Months Ended October 31, -------------- --------------- 1997 1996 ------------- ------------- (Unaudited) (Unaudited) Revenues Rental income (Note 10) $2,538,182 $2,338,606 Rental income - affiliated company 103,403 103,403 Recovery of real estate taxes 159,276 - ------------- ------------- Total revenues 2,800,861 2,442,009 ------------- ------------- Expenses Real estate operating expenses 1,346,377 1,424,116 Administrative and general expenses 528,537 505,236 Depreciation and amortization 249,108 233,468 ------------- ------------- Total expenses 2,124,022 2,162,820 ------------- ------------- Income from operations before investment income, interest expense and income taxes 676,839 279,189 ------------- ------------- Investment income and interest expense: Investment income 74,203 61,856 Interest expense (Notes 5 and 12) (216,031) (178,045) ------------- ------------- (141,828) (116,189) ------------- ------------- Income before income taxes 535,011 163,000 Income taxes provided 190,000 63,000 ------------- ------------- Income from operations 345,011 100,000 Retained earnings, beginning of period 22,694,445 21,883,520 ------------- ------------- Retained earnings, end of period $23,039,456 $21,983,520 ============= ============= Income per common share (Note 2) $.16 $.05 ============= ============= Dividends per share $- $- ============= ============= Weighted average common shares outstanding 2,135,780 2,136,397 ============= ============= See Notes to the Consolidated Financial Statements. -4- J. W. MAYS, INC. CONSOLIDATED STATEMENT OF CASH FLOWS Three Months Ended October 31, -------------- --------------- 1997 1996 ------------- ------------- (Unaudited) (Unaudited) Cash Flows From Operating Activities: Income $345,011 $100,000 Adjustments to reconcile income to net cash provided by operating activities: Amortization of premium on marketable debt securities (164) 77 Depreciation and amortization 249,108 233,468 Amortization of deferred expenses 69,488 55,202 Other assets - deferred expenses (49,069) (168,687) - security deposits (17,403) 307,373 - unbilled receivables (43,677) (99,730) - receivables 49,339 (44,976) - receivables - affiliated company (105,586) (6,563) Deferred income taxes 162,000 36,000 Changes in: Receivables 198,805 103,935 Prepaid expenses 586,422 506,363 Income taxes refundable - 4,496 Security deposits (8,268) - Accounts payable 15,414 30,797 Payroll and other accrued liabilities 555,274 (44,893) Income taxes payable (2,526) 5,664 Other taxes payable 1,364 (775) ------------- ------------- Cash provided by operating activities 2,005,532 1,017,751 ------------- ------------- Cash Flows From Investing Activities: Capital expenditures (265,933) (498,615) Marketable securities - other investments: Receipts from sales or maturities 50,000 35,000 Payments for purchases (338) (50,295) ------------- ------------- Cash (used) by investing activities (216,271) (513,910) ------------- ------------- Cash Flows From Financing Activities: Borrowings - securities broker 21,817 77,902 Payments - securities broker (603,601) (89,189) Increase in long-term debt and other - short-term 23,911 20,191 (Decrease) in long-term debt and other - long-term (213,010) (461,521) ------------- ------------- Cash (used) by financing activities (770,883) (452,617) ------------- ------------- Increase in cash 1,018,378 51,224 Cash and cash equivalents at beginning of period 234,288 412,653 ------------- ------------- Cash and cash equivalents at end of period $1,252,666 $463,877 ============= ============= See Notes to the Consolidated Financial Statements. -5- J. W. MAYS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1. Accounting Records: The accounting records are maintained in accordance with generally accepted accounting principles (GAAP). The preparation of the Company's financial statements in accordance with GAAP, requires management to make estimates that affect the reported consolidated statements of operations and consolidated balance sheets and related disclosures. Actual results could differ from those estimates. The interim financial statements are prepared pursuant to the requirements for reporting on Form 10-Q. The July 31, 1997 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 Annual Report on Form 10-K for the year ended July 31, 1997. 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, 1998. 2. Income per common share: Income per common share has been computed by dividing the 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 common share were 2,135,780 and 2,136,397 in the three months ended October 31, 1997 and October 31, 1996, respectively. 3. 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 adoption of this accounting standard has had no effect on the consolidated financial statements. 4. Marketable Securities - Other Investments: Effective August 1, 1994, the Company adopted Statement of Financial Accounting Standards No. 115 ("FAS 115"), "Accounting for Certain Investments in Debt and Equity Securities". 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. Marketable Securities - Other Investments (continued) As of October 31, 1997, the Company's marketable securities were classified as follows: Gross Gross Unrealized Unrealized Fair Cost Gains Losses Value ------------- ------------- ------------- ------------- Current Available for sale: Equity securities $2,490,685 $146,247 $ - $2,636,932 Certificate of deposit 28,626 - - 28,626 ------------- ------------- ------------- ------------- Total current $2,519,311 $146,247 $ - $2,665,558 ============= ============= ============= ============= Noncurrent Held to maturity: Corporate debt securities $98,883 $3,232 $ - $102,406 ============= ============= ============= ============= Investment income consists of the following: Three Months Ended October 31, ------------------------------ 1997 1996 ________ ________ Interest income $20,602 $10,424 Dividend income 53,601 51,432 ------------- ------------- Total $74,203 $61,856 ============= ============= -7- 5. Long-Term Debt: October 31, 1997 July 31, 1997 ------------------------------ ---------------------------- Current Annual Final Due Due Due Due Interest Payment Within After Within After Rate Date One Year One Year One Year One Year ------- -------- ------------- ------------- ------------- ----------- Mortgages: Jamaica, New York property (a) 8 1/2 % 4/01/07 $266,667 $3,600,000 $266,667 $3,666,666 Jowein Building, Brooklyn, N.Y. (b) 9 % 3/31/00 78,150 738,401 76,431 758,595 Fishkill, New York property (c) 9 % 11/01/99 121,537 2,411,171 118,844 2,442,584 Circleville, Ohio property (d) 7 % 9/30/02 321,288 1,498,278 310,233 1,580,714 Other 8 1/2 % 5/01/01 8,366 191,115 8,190 193,274 ------------- ------------- ------------- ----------- Total $796,008 $8,438,965 $780,365 $8,641,833 ============= ============= ============= =========== (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 loan proceeds were utilized by the Company toward (i) payment in full of the outstanding term loan by the Company in favor of the same bank in the amount of $1,500,000 plus interest and (ii) its costs for the renovations to the portions of the premises in connection with the Company's sublease of a significant portion of the building. Although the loan was closed on September 11, 1996 the entire $4,000,000 was not drawn down until March 31, 1997. The interest rate on the loan is 8 1/2% for a period of five (5) years and six (6) months, with such rate to change on the first day of the sixty-seventh (67th) month of the term to a rate equal to the then prime rate plus 1/4%, fixed for the balance of the term. The loan is to become due and payable on the first day of the month following the expiration of ten (10) years and six (6) months from the closing date. During the first six (6) months of the term, the Company had the option to secure advances against the loan amount with the loan to convert to a ten (10) year term at the expiration of the initial six (6) month period thereof. Payments are payable in arrears, on the first day of each and every month during the term, calculated (a) during the initial six (6) month period of the term, interest only, and (b) during the final ten (10) year period of the term, at the sum of the interest plus amortization sufficient to fully liquidate the loan over a fifteen (15) year period. As additional security, the Company conditionally assigned to the bank certain leases and rents on the premises, or portions thereof, now existing and assigned certain leases on the premises hereafter consummated. The Company has an option to prepay principal, in whole or in part, plus interest accrued thereon, at any time during the term, upon thirty (30) days prior notice to the bank, without premium or penalty. Other provisions of the loan agreement provide certain restrictions on the incurrence of indebtedness and the sale or transfer of the Company's ground lease interest in the premises. (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, 1997, the maturity date of the mortgage which was scheduled to be on March 31, 1998, was extended to March 31, 2000. The interest rate increased from 7 3/8% to 9% commencing April 1, 1997. 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 (5) years from November 1, 1994. The annual interest rate was reduced from 10% to 9% and the principal and interest payments are to be made in constant monthly amounts based upon a fifteen (15) year payout period. (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 increased to $36,540. 6. Long-Term Debt - Other: Long-Term debt - other consists of the following: October 31, 1997 July 31, 1997 ------------------------------- ------------------------------- Due Within Due After Due Within Due After One Year One Year One Year One Year --------------- --------------- --------------- --------------- Deferred compensation * $104,000 $329,333 $104,000 $355,333 Lease security deposits ** 8,268 301,393 - 285,535 ------------- ------------- ------------- ------------- Total $112,268 $630,726 $104,000 $640,868 ============= ============= ============= ============= * In fiscal 1964 the Company entered into a deferred compensation agreement with Max L. Shulman, its then Chairman of the Board. This agreement, as amended, provides for a total of $520,000 to be paid in monthly installments of $8,666.67 for a period of 60 months, payable upon the expiration of his employment, retirement or permanent disability as defined in the agreement, or death. Mr Shulman retired as an employee on December 31, 1996. **Does not include three irrevocable letters of credit totaling $275,000 at October 31, 1997 provided by three tenants as lease security deposits. 7. Property and Equipment - Net: October 31, July 31, 1997 1997 --------------- --------------- Property: Buildings and improvements $34,973,058 $34,944,039 Improvements to leased property 9,143,369 9,143,369 Land 4,008,835 4,008,835 Construction in progress 233,544 - ------------- ------------- 48,358,806 48,096,243 Less accumulated depreciation 20,380,125 20,143,617 ------------- ------------- Property - net 27,978,681 27,952,626 ------------- ------------- Fixtures and equipment and other: Fixtures and equipment 513,478 510,108 Other fixed assets 180,382 180,382 ------------- ------------- 693,860 690,490 Less accumulated depreciation 529,882 517,282 ------------- ------------- Fixtures and equipment and other - net 163,978 173,208 ------------- ------------- Property and equipment - net $28,142,659 $28,125,834 ============= ============= 8. Income Taxes: Effective August 1, 1993, the Company adopted Statement of Financial Accounting Standards No. 109 ("FAS 109"), "Accounting for Income Taxes". 9. Payable to Securities Broker: The Company borrowed funds, payable on demand, from a securities broker. The loan balance at October 31, 1997 in the amount of $688,269, secured by the Company's marketable securities, accrues interest, which at October 31, 1997, was at the annual rate of 7 3/4%. 10. 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. Rental income includes $103,403 for each of the quarters ended October 31, 1997 and October 31, 1996, representing rentals from an affiliated company. Amounts due from the affiliated company are as follows: October 31, July 31, 1997 1997 ------------- ------------- Unbilled receibables $864,203 $909,688 Receivables - noncurrent 300,039 194,453 ------------- ------------- Total $1,164,242 $1,104,141 ============= ============= 11. Employees' Retirement Plan: The Company sponsors a noncontributory Money Purchase Plan covering substantially all of its employees. Operations were charged $35,000 and $34,425 as contributions to the Plan for the three months ended October 31, 1997 and 1996, respectively. 12. Cash Flow Information: For purposes of reporting cash flows, the Company considers cash equivalents to consist of short-term highly liquid investments with maturities of three months or less, which are readily convertible into cash. Supplemental disclosure: Three Months Ended October 31, ------------------------- 1997 1996 __________ __________ Interest paid $246,733 $178,484 Income taxes paid $30,526 $16,840 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 thirty-two tenants, of which two tenants each accounted for more than 10% of rental income during the quarter ended October 31, 1997. The City of New York is one of the two tenants and the other tenant is 510 Fulton Street Realty Associates, the owners of which are long established in business. 14. Contingencies: McCrory Stores Corporation ("McCrory"), which occupied space in the Company's Jowein Building in the Fulton Mall in downtown Brooklyn, New York, and whose lease, as amended, extended to April 29, 2010, filed for relief under Chapter 11 of the Bankruptcy Code in February 1992. McCrory rejected its lease, as amended, with the Company with the approval of the Bankruptcy Court effective January 31, 1994. The Company has filed a proof of claim with the United States Bankruptcy Court, Southern District of New York in the total amount of $7,753,732 for damages arising from the rejection of the lease ("Lease Rejection Claim") and a proof of claim in the amount of $86,650 for pre-petition unpaid rent, which amount has been allowed in the reduced amount of $84,354, without prejudice to McCrory's right to assert other and further objections. The Company has also filed an administrative claim in the amount of approximately $296,000 ("Administrative Claim") for damages resulting from McCrory's failure to repair and maintain the premises as required by the lease. McCrory objected to the Company's Lease Rejection Claim and Administrative Claim, and asserts that no amount is due and owing. The Company has not included its claim against McCrory in its financial statements due to (a) the fact that McCrory has disclosed that it has sold its assets and that the proceeds of sale are insufficient to make any distributions to unsecured creditors or to satisfy in full the administrative claims asserted against McCrory, (b) the pending litigation over the Lease Rejection Claim and Administrative Claim and (c) the uncertainty of the amount that may ultimately be allowed and collected. The Company has leased approximately 69,000 square feet of the approximate 99,000 square feet of space surrendered by McCrory. The remainder of the space of approximately 30,000 square feet is not leaseable due to the renovations required to accommodate six tenants where formerly there was one. The rental income to be derived from the six tenants over the terms of their leases will be approximately $5,040,000 less than the total rental income that would have been due from McCrory for the period February 1, 1994 through April 29, 2010, the termination date of the McCrory lease. Jamesway Corporation ("Jamesway"), which occupied retail space in the Fishkill, New York property and whose lease extended to January 31, 2005, filed for relief under Chapter 11 of the Bankruptcy Code on October 18, 1995. Jamesway rejected its lease for the Fishkill location with the approval of the Bankruptcy Court, effective February 29, 1996 but continued occupancy until March 22, 1996. The Company filed an amended unsecured claim in the amount of $883,635 for damages resulting from the breach and rejection of the lease and an administrative priority claim in the amount of approximately $189,000 for certain amounts due under the lease after the filing of Jamesway's Chapter 11 petition and for the costs of repairs resulting from Jamesway's failure to fulfill its repair and maintenance obligations under the lease. Pursuant to a settlement that was approved by the Bankruptcy Court, the Company has an allowed unsecured claim in the amount of $950,635 and an allowed administrative claim in the amount of $54,887. The Company has realized, to date, $418,279, or 44% on account of its unsecured claim and 100% of its allowed administrative claim for a total of $473,166. At July 31, 1997, the amount of $418,789 was recorded in Bad Debt Recovery represents the amount realized of $473,166 less legal expenses of $22,406 and a previously recorded pre-petition rental claim of $31,971. The Company has made no provision in its financial statements for the balance of its unsecured claim filed against Jamesway due to the uncertainty of the amount that may ultimately be collected. The Company reports scheduled rental income recognized on a straight-line basis rather than rental income as it becomes a receivable according to the provisions of the lease, in compliance with the provisions of Statement of Financial Accounting Standards No. 13, "Accounting for Leases". The excess of the scheduled rental income of McCrory, recognized on a straight-line basis over rental income reported through January 31, 1994, the effective date of McCrory's rejection of its lease, amounts to $708,673 and such amount was written off and classified as a bad debt during the twelve month period ended July 31, 1994. The excess of the scheduled rental income of Jamesway recognized on a straight-line basis over rental income receivable according to the lease reported through January 31, 1996, amounted to $424,011 and such amount was written off and classified as a bad debt during the twelve month period ended July 31, 1996. There are various lawsuits and claims pending against the Company. It is the opinion of management that the resolution of these matters will not have a material adverse effect on the Company's Consolidated Financial Statements. J. W. MAYS, INC. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION Results of Operations: Three Months Ended October 31, 1997 Compared to the Three Months Ended October 31, 1996: In the three months ended October 31, 1997, the Company reported income in the amount of $345,011, or $.16 per share. In the comparable three months ended October 31, 1996, the Company reported income in the amount of $100,000 or $.05 per share. The 1997 quarter includes a pre-tax net recovery of real estate taxes in the amount of $159,276, (see below). There was no comparable item in the 1996 three month period. Rental income in the current three months increased to $2,641,585 from $2,442,009 in the comparable 1996 three months, primarily due to the addition of new tenants. Interest expense in the current quarter exceeded investment income by $141,828 as compared to $116,189 in the 1996 quarter. The increase was primarily due to the interest on the Jamaica Building loan discussed in Note 5(a) to the Consolidated Financial Statements. Real estate operating expenses decreased to $1,346,377 from $1,424,116 principally due to a decrease in real estate taxes. Administrative and general expenses increased to $528,537 from $505,236. The recovery of real estate taxes in the current quarter in the amount of $159,276, 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. Depreciation and amortization expense in the current three months increased to $249,108 from $233,468 in the three months ended October 31, 1996 because of additional improvements to property. 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 City of New York and the Company have agreed to a settlement which substantially reduces the real property tax assessments applicable to the Jowein Building, Brooklyn, New York from the 1991/92 through the 1995/96 tax years. The Company's portion of the tax refund, after legal expenses and credits to tenants in accordance with the terms of their leases, is in the amount of approximately $919,000. The Company is currently awaiting the court's execution of an order covering this settlement. The Company has not included the refund in its financial statements due to the pending execution of the order by the court. Cash Flows From Operating Activities: Deferred Expenses: The Company had an expenditure of approximately $37,700 for brokerage leasing commissions relating to two new tenants at the Jamaica, New York building during the three months ended October 31, 1997. Payroll and other accrued liabilities: Included in the increase of $555,274 is an amount of $438,943 representing attorneys' fees and amounts payable to five tenants, in accordance with the terms of their leases, due to the recovery of prior years' real estate taxes from the City of New York. Cash Flows From Investing Activities: Capital Expenditures: The Company had expenditures of approximately $242,000 for renovations at its Jamaica, New York building to accommodate two new tenants during the three months ended October 31, 1997. Cash Flows From Financing Activities: Lease Security: The Company received approximately $22,000 in additional lease security due to the leasing of space to three new tenants at its Jamaica, New York building during the three months ended October 31, 1997. The leasing of 69,000 square feet of space in the Jowein Building located in the Fulton Mall in downtown Brooklyn, New York to three chain store tenants and two additional tenants for retail space and one tenant for office space, the leasing of 25,000 square feet to the U. S. Post Office in Fishkill, New York and the leasing to the State of New York of approximately 46,000 square feet of office space for two tenants in the Company's former store in Jamaica, New York, will provide additional working capital for the Company. The Jamaica leases commenced May 1, 1997. To defray the costs of renovations for the State occupancy, the Company borrowed from a bank the principal amount of $2,500,000 (see Note 5(a) to the Consolidated Financial Statements). The Company had working capital of $2,174,695, with a ratio of current assets to current liabilities of 1.78 to 1 at October 31, 1997. 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 - No report on Form 8-K was required to be filed by the Company during the three months ended October 31, 1997. 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, 1997 Lloyd J. Shulman Lloyd J. Shulman Chairman Date December 5, 1997 Alex Slobodin Alex Slobodin Exec. Vice-President (Principal Financial Officer)