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MAYS > SEC Filings for MAYS > Form 10-Q on 8-Dec-2011All Recent SEC Filings

Show all filings for MAYS J W INC

Form 10-Q for MAYS J W INC


8-Dec-2011

Quarterly Report


MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS
AND FINANCIAL CONDITION

Management's 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 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 8 and 9 to the Consolidated Financial Statements in the Annual Report to Shareholders for the fiscal year ended July 31, 2011).

Results of Operations:

Three Months Ended October 31, 2011 Compared to the Three Months Ended October 31, 2010:

In the three months ended October 31, 2011, the Company reported net income of $372,177, or $.18 per share. In the comparable three months ended October 31, 2010, the Company reported net income of $174,955, or $.09 per share.

Revenues in the current three months increased to $3,982,537 from $3,608,290 in the comparable 2010 three months primarily due to increased rents from existing tenants.

Real estate operating expenses in the current three months increased to $2,014,265 from $1,863,977 in the comparable 2010 three months primarily due to increases in payroll costs and utility costs.

Administrative and general expenses in the current three months increased to $940,421 from $874,173 in the comparable 2010 three months primarily due to increases in payroll costs and legal and professional costs.

Depreciation and amortization expense in the current three months decreased to $386,797 from $391,195 in the comparable 2010 three months.

Interest expense in the current three months exceeded investment income by $148,877 and by $154,990 in the comparable 2010 three months. The decrease in the excess of interest expense over investment income was due primarily to scheduled repayments of debt.

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Liquidity and Capital Resources:

The Company has been operating as a real estate enterprise since the discontinuance of the retail department store segment of its operations on January 3, 1989.

Management considers current working capital and borrowing capabilities adequate to cover the Company's planned operating and capital requirements. The Company's cash and cash equivalents amounted to $2,004,796 at October 31, 2011.

In September 2009, the Company entered into a lease agreement with a drive-in restaurant at the Company's Massapequa premises. The drive-in restaurant intends to construct a new building. The tenant's occupancy is subject to it receiving the necessary building permits and licenses to construct the building and open for business within a reasonable time period. Rent is anticipated to commence in 2012. This will replace the tenant that vacated the premises in April 2009. The rental income from this lease agreement will more than offset the rental income lost from the previous tenant.

In October, 2010, the Company entered into a lease agreement with a tenant for 18,218 square feet for office space at the Company's Nine Bond Street, Brooklyn, New York building. The cost of construction and brokerage commissions to the Company was $2,114,544. The Company has financed these costs through operating funds. The project was completed in November 2011. Rent will commence in early 2012.

In September, 2011, the Company paid the outstanding balance of a loan on the Jamaica, New York property in the amount of $2,090,493 (see Note 6(b) to the Condensed Consolidated Financial Statements).

Cash Flows From Investing Activities:

The Company had expenditures of $124,878 in the three months ended October 31, 2011 for the renovation of 18,218 square feet for office space for a tenant at the Company's Nine Bond Street Brooklyn, New York building. The cost of the project was $1,639,404 and was completed in November 2011. The Company also had expenditures of $258,000 in the three months ended October 31, 2011 for a new heating system at its 25 Elm Place, Brooklyn, New York building.

Cash Flows From Financing Activities:

The Company paid the outstanding balance of a loan on the Jamaica, New York property in the amount of $2,090,493.

Cautionary Statement Regarding Forward-Looking Statements:

This section, Management's 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;

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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.

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.

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