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| MAYS > SEC Filings for MAYS > Form 10-Q on 7-Jun-2012 | All Recent SEC Filings |
7-Jun-2012
Quarterly Report
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 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 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 April 30, 2012 Compared to the Three months Ended April 30, 2011:
In the three months ended April 30, 2012, the Company reported net income of $140,159, or $.07 per share. In the comparable three months ended April 30, 2011, the Company reported net income of $203,216, or $.11 per share.
In the three months ended April 30, 2012, the Company reported net income from continuing operations of $140,159, or $.07 per share. In the comparable three months ended April 30, 2011, the Company reported net income from continuing operations of $213,627, or $.11 per share.
In the three months ended April 30, 2012, the Company did not have income (loss) from discontinued operations. In the comparable three months ended April 30, 2011, the Company reported a net loss from discontinued operations of ($10,411), or ($.00) per share.
Revenues from continuing operations in the current three months increased to $4,181,446 from $3,794,152 in the comparable 2011 three months primarily due to increased rents from existing tenants and one new office tenant at the Company's Nine Bond Street, Brooklyn, New York building.
Real estate operating expenses from continuing operations in the current three months decreased to $1,918,185 from $2,045,169 in the comparable 2011 three months primarily due to decreases in utilities partially offset by increases in payroll costs and rental expense.
Depreciation and amortization expense from continuing operations in the current three months increased to $395,827 from $387,495 in the comparable 2011 three months.
Interest expense in the current three months exceeded investment income by $115,364 and by $138,927 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.
Nine months Ended April 30, 2012 Compared to the Nine months Ended April 30, 2011:
In the nine months ended April 30, 2012, the Company reported net income of $826,081, or $.41 per share. In the comparable nine months ended April 30, 2011, the Company reported net income of $195,197, or $.10 per share.
In the nine months ended April 30, 2012, the Company reported net income from continuing operations of $826,081, or $.41 per share. In the comparable nine months ended April 30, 2011, the Company reported net income from continuing operations of $382,968 or $.19 per share.
In the nine months ended April 30, 2012, the Company did not have income (loss) from discontinued operations. In the comparable nine months ended April 30, 2011, the Company reported a net loss from discontinued operations of ($187,771), or ($.09) per share.
Revenues from continuing operations in the current nine months increased to $12,273,220 from $11,109,373 in the comparable 2011 nine months primarily due to increased rents from existing tenants and one new office tenant at the Company's Nine Bond Street, Brooklyn, New York building.
Real estate operating expenses from continuing operations in the current nine months increased to $6,042,225 from $5,977,390 in the comparable 2011 nine months primarily due to increases in real estate taxes, payroll costs, maintenance costs and rental expense partially offset by decreases in utilities.
Administrative and general expenses from continuing operations in the current nine months increased to $2,788,877 from $2,687,793 in the comparable 2011 nine months primarily due to increases legal and professional costs and pension costs partially offset by decreases in payroll and medical costs.
Depreciation and amortization expense from continuing operations in the current nine months increased to $1,175,961 from $1,168,773 in the comparable 2011 nine months.
Interest expense in the current nine months exceeded investment income by $387,076 and by $432,449 in the comparable 2011 nine 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 Company's planned operating and capital requirements. The Company's cash and cash equivalents amounted to $904,040 at April 30, 2012.
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 will construct a new building. Rent commenced in April 2012. This replaced 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 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 7(b) to the Condensed Consolidated Financial Statements).
In March, 2012, the Company paid the outstanding balance of a loan on the Jamaica, New York property in the amount of $1,036,602 (see note 7(a) to the condensed consolidated financial statements).
Cash Flows From Operating Activities:
Deferred Charges: The Company had expenditures for brokerage commissions in the nine months ended April 30, 2012 in the amount of $137,261, relating to a tenant at its Massapequa, New York property, a tenant at its Nine Bond Street, Brooklyn, New York property and a tenant at its Circleville, Ohio property.
Payroll and Other Accrued Liabilities: The Company incurred $137,261 for brokerage commissions in order to lease space at the Company's property in Massapequa, New York, Nine Bond Street, Brooklyn, New York property and Circleville, Ohio property in the nine months ended April 30, 2012. The balance due as of April 30, 2012 is $107,813. The Company also owed a balance of $278,720 at April 30, 2012 for the new electrical service at its 25 Elm Place, Brooklyn, New York building.
Cash Flows From Investing Activities:
The Company had expenditures of $147,884 in the nine months ended April 30, 2012 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 $1,684,831 and was completed in November 2011. The Company also had expenditures of $258,000 and $307,898 in the nine months ended April 30, 2012 for a new heating system and electrical service, respectively, at its 25 Elm Place, Brooklyn, New York building.
Cash Flows From Financing Activities:
The Company paid the outstanding balances of loans on the Jamaica, New York property in the amount of $2,090,493 and $1,036,602 in September 2011 and March 2012, respectively.
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;
• 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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