##### Table of Contents



SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D.C. 20549
 FORM 10-Q
 QUARTERLY REPORT
 Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
 For the quarter ended July 31, 2005
 Commission file number 0-10146
 ABRAMS INDUSTRIES, INC.
  Georgia
    
    58-0522129(State or other jurisdiction of
    
    (I.R.S. Employer identification No.)incorporation or organization)
 1945 The Exchange, Suite 300, Atlanta, GA 30339-2029
 (770) 953-0304
 N/A
  þ o
  o þ
  o þ




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TABLE OF CONTENTS  PART I. FINANCIAL INFORMATIONITEM 1. FINANCIAL STATEMENTSITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKITEM 4. CONTROLS AND PROCEDURESPART II. OTHER INFORMATIONITEM 6. EXHIBITSSIGNATURESEX-31.(A) SECTION 302, CERTIFICATION OF THE CEOEX-31.(B) SECTION 302, CERTIFICATION OF THE CFOEX-32.(A) SECTION 906, CERTIFICATION OF THE CEOEX-32.(B) SECTION 906, CERTIFICATION OF THE CFO    Table of Contents  
  
 ITEM
1. FINANCIAL STATEMENTS
 ABRAMS INDUSTRIES, INC.
 July 31, 2005
    
    
    April 30, 2005ASSETSCURRENT ASSETS:Cash and cash equivalents
    
    $
    2,542,986
    
    
    $
    1,402,645Restricted cash
    
    
    4,782,752
    
    
    
    8,272,399Short-term investment
    
    
    2,000,000
    
    
    
    2,000,000Receivables (Note 4)
    
    
    2,075,183
    
    
    
    2,721,831Less: Allowance for doubtful accounts
    
    
    (16,760
    )
    
    
    (69,801
    )Assets of discontinued operations (Note 5)
    
    
    2,694
    
    
    
    103,632Costs and earnings in excess of billings
    
    
    129,565
    
    
    
    312,781Deferred income taxes
    
    
    552,953
    
    
    
    552,953Note receivables
    
    
    449,370
    
    
    
    23,500Other
    
    
    1,061,124
    
    
    
    867,022Total current assets
    
    
    13,579,867
    
    
    
    16,186,962INCOME-PRODUCING PROPERTIES, net
    
    
    24,486,455
    
    
    
    24,413,645PROPERTY AND EQUIPMENT, net
    
    
    889,662
    
    
    
    836,227OTHER ASSETS:Real estate held for future development or sale
    
    
    3,692,731
    
    
    
    3,692,731Intangible assets, net (Note 8)
    
    
    3,254,998
    
    
    
    3,164,272Goodwill (Note 8)
    
    
    5,458,717
    
    
    
    5,458,717Other
    
    
    3,813,125
    
    
    
    3,314,618$
    55,175,555
    
    
    $
    57,067,172LIABILITIES AND SHAREHOLDERS EQUITYCURRENT LIABILITIES:Trade and subcontractors payables
    
    $
    592,404
    
    
    $
    888,397Accrued expenses
    
    
    2,093,113
    
    
    
    1,861,348Accrued incentive compensation
    
    
    556,326
    
    
    
    1,089,369Liabilities of discontinued operations (Note 5)
    
    
    101,773
    
    
    
    196,427Billings in excess of costs and earnings
    
    
    219,645
    
    
    
    526,512Current maturities of long-term debt
    
    
    1,173,307
    
    
    
    1,174,707Total current liabilities
    
    
    4,736,568
    
    
    
    5,736,760DEFERRED INCOME TAXES
    
    
    3,251,969
    
    
    
    3,460,151OTHER LIABILITIES
    
    
    1,737,391
    
    
    
    1,602,243MORTGAGE NOTES PAYABLE, less current maturities
    
    
    23,327,738
    
    
    
    23,567,189OTHER LONG-TERM DEBT, less current maturities
    
    
    1,667,277
    
    
    
    1,787,418Total liabilities
    
    
    34,720,943
    
    
    
    36,153,761COMMITMENTS AND CONTINGENCIES (Note 9)SHAREHOLDERS EQUITY:Common stock, $1 par value; 5,000,000 shares authorized;
3,358,501 issued and 3,209,913 outstanding at July 31, 2005,
3,357,601 issued and 3,209,113 outstanding at April 30, 2005,
    
    
    3,358,501
    
    
    
    3,357,601Additional paid-in capital
    
    
    3,071,537
    
    
    
    3,067,982Deferred stock compensation
    
    
    (11,003
    )
    
    
    (14,162
    )Retained earnings
    
    
    14,720,894
    
    
    
    15,186,932Treasury stock, common shares;
148,588 at July 31, 2005, and 148,488 at April 30, 2005
    
    
    (685,317
    )
    
    
    (684,942
    )Total shareholders equity
    
    
    20,454,612
    
    
    
    20,913,411$
    55,175,555
    
    
    $
    57,067,172
 See accompanying notes to consolidated financial statements.
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##### Table of Contents



ABRAMS INDUSTRIES, INC.
 FIRST QUARTER ENDEDJULY 31,2005
    
    
    2004REVENUES:Energy and facilities solutions
    
    $
    924,348
    
    
    $
    890,211Energy services
    
    
    2,094,910
    
    
    
    1,962,868Rental income
    
    
    1,693,962
    
    
    
    1,738,3304,713,220
    
    
    
    4,591,409Interest
    
    
    46,224
    
    
    
    28,818Other
    
    
    13,061
    
    
    
    6,0074,772,505
    
    
    
    4,626,234COSTS AND EXPENSES:Energy and facilities solutions
    
    
    510,271
    
    
    
    480,889Energy services
    
    
    988,604
    
    
    
    1,481,237Rental property operating expenses, excluding interest
    
    
    1,092,852
    
    
    
    1,274,7802,591,727
    
    
    
    3,236,906Selling, general and administrativeEnergy and facilities solutions
    
    
    545,973
    
    
    
    638,932Energy services
    
    
    554,895
    
    
    
    640,033Real estate
    
    
    265,284
    
    
    
    362,590Parent
    
    
    899,552
    
    
    
    696,4282,265,704
    
    
    
    2,337,983Extinguishment of debt
    
    
    
    
    
    
    218,071Interest costs incurred
    
    
    432,105
    
    
    
    577,9175,289,536
    
    
    
    6,370,877LOSS BEFORE INCOME TAXES FROM
CONTINUING OPERATIONS
    
    
    (517,031
    )
    
    
    (1,744,643
    )INCOME TAX BENEFIT
    
    
    (196,472
    )
    
    
    (660,352
    )LOSS FROM CONTINUING OPERATIONS
    
    
    (320,559
    )
    
    
    (1,084,291
    )DISCONTINUED OPERATIONS:Loss from discontinued operations, adjusted
for applicable income tax benefit of $10,094,
and $2,649, respectively
    
    
    (16,467
    )
    
    
    (21,163
    )NET LOSS
    
    $
    (337,026
    )
    
    $
    (1,105,454
    )NET LOSS PER SHARE  BASIC AND DILUTED:From continuing operations
    
    $
    (.10
    )
    
    $
    (.34
    )From discontinued operations
    
    
    (.01
    )
    
    
    (.01
    )NET LOSS PER SHARE  BASIC AND DILUTED
    
    $
    (.11
    )
    
    $
    (.35
    )DIVIDENDS PER SHARE
    
    $
    .16
    
    
    $
    .16WEIGHTED AVERAGE SHARES OUTSTANDING  BASIC AND DILUTED
    
    
    3,209,478
    
    
    
    3,197,596
 See accompanying notes to consolidated financial statements.
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##### Table of Contents



ABRAMS INDUSTRIES, INC.
 Additional
    
    
    DeferredCommon Stock
    
    
    Paid-In
    
    
    Stock
    
    
    Retained
    
    
    TreasuryShares
    
    
    Amount
    
    
    Capital
    
    
    Compensation
    
    
    Earnings
    
    
    Stock
    
    
    TotalBALANCES at April 30, 2003
    
    
    3,060,239
    
    
    
    3,060,239
    
    
    
    2,153,505
    
    
    
    (16,598
    )
    
    
    16,734,753
    
    
    
    (673,947
    )
    
    
    21,257,952Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,850,126
    )
    
    
    
    
    
    
    (1,850,126
    )Common stock acquired
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Common stock issued
    
    
    267,389
    
    
    
    267,389
    
    
    
    810,369
    
    
    
    (41,700
    )
    
    
    
    
    
    
    
    
    
    
    1,036,058Stock compensation expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    31,443
    
    
    
    
    
    
    
    (5,836
    )
    
    
    25,607Cash
dividends declared  $.16 per share
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (471,964
    )
    
    
    
    
    
    
    (471,964
    )BALANCES at April 30, 2004
    
    
    3,327,628
    
    
    
    3,327,628
    
    
    
    2,963,874
    
    
    
    (26,855
    )
    
    
    14,412,663
    
    
    
    (679,783
    )
    
    
    19,997,527Net earnings
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,800,358
    
    
    
    
    
    
    
    1,800,358Common stock acquired
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Common stock issued
    
    
    29,973
    
    
    
    29,973
    
    
    
    104,108
    
    
    
    (39,175
    )
    
    
    
    
    
    
    
    
    
    
    94,906Stock compensation expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    51,868
    
    
    
    
    
    
    
    (5,159
    )
    
    
    46,709Cash
dividends declared  $.32 per share
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,026,089
    )
    
    
    
    
    
    
    (1,026,089
    )BALANCES at April 30, 2005
    
    
    3,357,601
    
    
    $
    3,357,601
    
    
    $
    3,067,982
    
    
    $
    (14,162
    )
    
    $
    15,186,932
    
    
    $
    (684,942
    )
    
    $
    20,913,411Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (337,026
    )
    
    
    
    
    
    
    (337,026
    )Common stock issued
    
    
    900
    
    
    
    900
    
    
    
    3,555
    
    
    
    (4,455
    )
    
    
    
    
    
    
    
    
    
    
    Stock compensation expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    7,614
    
    
    
    
    
    
    
    (375
    )
    
    
    7,239Cash
dividends declared  $.04 per share
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (129,012
    )
    
    
    
    
    
    
    (129,012
    )BALANCES at July 31, 2005
    
    
    3,358,501
    
    
    $
    3,358,501
    
    
    $
    3,071,537
    
    
    $
    (11,003
    )
    
    $
    14,720,894
    
    
    $
    (685,317
    )
    
    $
    20,454,612
 See accompanying notes to consolidated financial statements.
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ABRAMS INDUSTRIES, INC.
 FIRST QUARTER ENDEDJULY 31,2005
    
    
    2004CONTINUING OPERATIONS:Cash flows from operating activities:Net loss
    
    $
    (337,026
    )
    
    $
    (1,105,454
    )Loss from discontinued operations, net of tax
    
    
    16,467
    
    
    
    21,163Adjustments to reconcile net loss to net
cash used in operating activities:Depreciation and amortization
    
    
    366,713
    
    
    
    500,045Deferred tax benefit
    
    
    (208,182
    )
    
    
    (663,732
    )(Recovery
of) provision for doubtful accounts, net
    
    
    (53,041
    )
    
    
    17,316Extinguishment of debt
    
    
    
    
    
    
    218,071Changes in assets and liabilities:Receivables
    
    
    670,148
    
    
    
    380,823Costs and earnings in excess of billings
    
    
    183,216
    
    
    
    24,110Note receivables
    
    
    (425,870
    )
    
    
    Other current assets
    
    
    (217,602
    )
    
    
    (378,515
    )Other assets
    
    
    (498,507
    )
    
    
    (127,863
    )Trade and subcontractors payable
    
    
    (295,993
    )
    
    
    531,021Accrued expenses
    
    
    231,765
    
    
    
    (126,531
    )Accrued incentive compensation
    
    
    (533,043
    )
    
    
    Billings in excess of costs and earnings
    
    
    (306,867
    )
    
    
    (87,774
    )Other liabilities
    
    
    135,148
    
    
    
    59,228Net cash used in operating activities
    
    
    (1,272,674
    )
    
    
    (738,092
    )Cash flows from investing activities:Release of restricted cash held in escrow
    
    
    3,489,647
    
    
    
    Additions to income-producing properties, net
    
    
    (311,373
    )
    
    
    (106,261
    )Additions to property and equipment, net
    
    
    (99,820
    )
    
    
    (351,072
    )Additions to intangible assets, net
    
    
    (214,143
    )
    
    
    (161,737
    )Acquisition, net of cash acquired
    
    
    
    
    
    
    (154,256
    )Net cash provided by (used in) investing activities
    
    
    2,864,311
    
    
    
    (773,326
    )Cash flows from financing activities:Debt restructuring
    
    
    
    
    
    
    (1,974,042
    )Debt repayments
    
    
    (312,101
    )
    
    
    (242,041
    )Deferred loan costs paid
    
    
    
    
    
    
    (50,000
    )Cash dividends
    
    
    (129,012
    )
    
    
    (641,228
    )Net cash used in financing activities
    
    
    (441,113
    )
    
    
    (2,907,311
    )DISCONTINUED OPERATIONS:Operating activities
    
    
    (10,183
    )
    
    
    715,384Investing activities
    
    
    
    
    
    
    (13,662
    )Financing activities
    
    
    
    
    
    
    (44,099
    )Net cash (used in) provided by discontinued operations
    
    
    (10,183
    )
    
    
    657,623Net increase (decrease) in cash and cash equivalents
    
    
    1,140,341
    
    
    
    (3,761,106
    )Cash and cash equivalents at beginning of period
    
    
    1,402,645
    
    
    
    6,379,679Cash and cash equivalents at end of period
    
    $
    2,542,986
    
    
    $
    2,618,573Supplemental disclosure of noncash financing activities:Issuance of common stock under Stock Award Plan
    
    $
    4,455
    
    
    $
    5,200
 See accompanying notes to consolidated financial statements.
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##### Table of Contents



ABRAMS INDUSTRIES, INC.
 NOTE 1. ORGANIZATION AND BUSINESS
  NOTE 2. UNAUDITED STATEMENTS
   NOTE 3. SIGNIFICANT ACCOUNTING POLICIES
 Accounting for Stock-Based Compensation Accounting for Stock-Based Compensation  Transition and Disclosure
  5




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QuarterEnded July 31,2005
    
    2004Net loss, as reported
    
    $
    (337,026
    )
    
    $
    (1,105,454
    )Add: Stock-based compensation
    
    
    7,970
    
    
    
    14,616Deduct: Total stock-based compensation
expense as determined under fair value
based method for all awards, net of
related tax effects
    
    
    (29,209
    )
    
    
    (70,203
    )Add: Forfeitures, net of related tax effects
    
    
    2,586
    
    
    
    21,263Pro forma net loss
    
    $
    (355,679
    )
    
    $
    (1,139,778
    )Net loss per share:Basic and diluted  as reported
    
    $
    (0.11
    )
    
    $
    (0.35
    )Basic and diluted  pro forma
    
    $
    (0.11
    )
    
    $
    (0.36
    )
  NOTE 4. RECEIVABLES
  NOTE 5. DISCONTINUED OPERATIONS
 Construction Segment
  Real Estate Sales of Income-Producing Properties
 Accounting for the
Impairment or Disposal of Long-Lived Assets
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Quarter endedJuly 31,2005
    
    2004REVENUES:Construction
    
    $
    40
    
    
    $
    145,502Rental properties
    
    
    
    
    
    
    290,382Total revenues
    
    
    40
    
    
    
    435,884COSTS AND EXPENSES:Construction
    
    
    
    
    
    
    114,734Rental
property operating expenses, including depreciation and interest
    
    
    (101
    )
    
    
    237,065Construction selling, general & administrative
    
    
    26,702
    
    
    
    107,897Total costs and expenses
    
    
    26,601
    
    
    
    459,696Loss from discontinued operations
    
    
    (26,561
    )
    
    
    (23,812
    )Income tax benefit
    
    
    (10,094
    )
    
    
    (2,649
    )Loss from discontinued operations, net of tax
    
    $
    (16,467
    )
    
    $
    (21,163
    )
 Balances atJuly 31, 2005
    
    April 30, 2005Assets of
discontinued operationsReceivables, net
    
    $
    
    
    
    $
    100,477Other current assets
    
    
    2,694
    
    
    
    3,155$
    2,694
    
    
    $
    103,632
 Balances atJuly 31, 2005
    
    April 30, 2005Liabilities of discontinued operationsTrade and subcontractors payables
    
    $
    91,780
    
    
    $
    74,150Accrued expenses
    
    
    9,993
    
    
    
    122,277$
    101,773
    
    
    $
    196,427
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##### Table of Contents



NOTE 6. OPERATING SEGMENTS
  For the Quarter Ended
    
    Energy and
    
    
    
    
    
    Real EstateJuly 31, 2005
    
    Facilities Solutions
    
    Energy Services
    
    (1)
    
    Parent
    
    Eliminations
    
    ConsolidatedRevenues from unaffiliated
customers
    
    $
    924,348
    
    
    $
    2,094,910
    
    
    $
    1,693,962
    
    
    $
    
    
    
    $
    
    
    
    $
    4,713,220Interest and other income
    
    
    315
    
    
    
    
    
    
    
    154,322
    
    
    
    4,630
    
    
    
    (99,982
    )
    
    
    59,285Intersegment revenue
    
    
    
    
    
    
    
    
    
    
    127,188
    
    
    
    
    
    
    
    (127,188
    )
    
    
    Total revenues from
continuing operations
    
    $
    924,663
    
    
    $
    2,094,910
    
    
    $
    1,975,472
    
    
    $
    4,630
    
    
    $
    (227,170
    )
    
    $
    4,772,505Net earnings (loss) (2)
    
    $
    (130,827
    )
    
    $
    292,223
    
    
    $
    132,597
    
    
    $
    (615,953
    )
    
    $
    1,464
    
    
    $
    (320,496
    )
 For the Quarter Ended
    
    Energy and
    
    
    
    
    
    Real EstateJuly 31, 2004
    
    Facilities Solutions
    
    Energy Services
    
    (1)
    
    Parent
    
    Eliminations
    
    ConsolidatedRevenues from unaffiliated
customers
    
    $
    890,211
    
    
    $
    1,962,868
    
    
    $
    1,738,330
    
    
    $
    
    
    
    $
    
    
    
    $
    4,591,409Interest and other income
    
    
    
    
    
    
    
    
    
    
    75,197
    
    
    
    7,085
    
    
    
    (47,457
    )
    
    
    34,825Intersegment revenue
    
    
    11,535
    
    
    
    
    
    
    
    124,354
    
    
    
    
    
    
    
    (135,889
    )
    
    
    Total revenues from
continuing operations
    
    $
    901,746
    
    
    $
    1,962,868
    
    
    $
    1,937,881
    
    
    $
    7,085
    
    
    $
    (183,346
    )
    
    $
    4,626,234Net earnings (loss) (2)
    
    $
    (146,420
    )
    
    $
    (167,378
    )
    
    $
    (363,176
    )
    
    $
    (470,696
    )
    
    $
    96,669
    
    
    $
    (1,051,001
    )
 
 (1)
    
    The Company is in the business of creating long-term value by periodically realizing
gains through the sale of income-producing properties. The Real Estate Segments net
earnings includes discontinued operations from sales of income-producing properties
pursuant to SFAS 144.(2)
    
    The Company has changed its measurement of profit or loss previously disclosed from net
earnings (loss) from continuing operations before income taxes to net earnings (loss). The
chief executive officer uses this measurement to analyze each Segments operating
performance.  July 31,2005
    
    2004Consolidated Segment net loss
    
    $
    (320,496
    )
    
    $
    (1,051,001
    )Discontinued Construction Segment net loss
    
    
    (16,530
    )
    
    
    (107,196
    )Eliminations related to Construction Segment
    
    
    
    
    
    
    52,742Consolidated net loss
    
    $
    (337,026
    )
    
    $
    (1,105,455
    )
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NOTE 7. EARNINGS (LOSS) PER SHARE
  NOTE 8. GOODWILL AND OTHER INTANGIBLE ASSETS
  Gross Carrying
    
    
    AccumulatedAmount
    
    
    AmortizationAmortized intangible assets:Proprietary facility management
software applications
    
    $
    1,902,714
    
    
    $
    629,723Computer software
    
    
    411,520
    
    
    
    374,452Real estate lease costs
    
    
    1,583,716
    
    
    
    759,689Customer relationships
    
    
    218,000
    
    
    
    69,033Deferred loan costs
    
    
    751,547
    
    
    
    515,070Other
    
    
    55,608
    
    
    
    28,847$
    4,923,105
    
    
    $
    2,376,814Unamortized intangible assets:Trademark
    
    $
    708,707
    
    
    $
    Goodwill
    
    $
    5,458,717
    
    
    $
    
 Aggregate amortization expense for all amortized intangible assetsFor the three months ended July 31, 2005
    
    $
    123,810For the three months ended July 31, 2004
    
    
    142,362
 NOTE 9. COMMITMENTS AND CONTINGENCIES
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ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
     Results of operations of the first quarter of fiscal 2006 compared to the first quarter of
fiscal 2005
    CHART A
 First Quarter Ended
    
    Amount
    
    PercentJuly 31,
    
    Increase
    
    Increase2005
    
    2004
    
    (Decrease)
    
    (Decrease)Energy and Facilities Solutions
    
    $
    924
    
    
    $
    890
    
    
    $
    34
    
    
    
    4Energy Services (1)
    
    
    2,095
    
    
    
    1,963
    
    
    
    132
    
    
    
    7Real Estate (2)
    
    
    1,694
    
    
    
    1,738
    
    
    
    (44
    )
    
    
    (3
    )$
    4,713
    
    
    $
    4,591
    
    
    $
    122
    
    
    
    3
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NOTES TO CHART A
 (1)
    
    Revenues for the Energy Services Segment increased $132,000 or 7% for the first quarter of
fiscal 2006 compared to the same period in fiscal 2005, primarily due to the recognition of
approximately $593,000 in revenues from a consulting services contract that was substantially
performed in prior periods. This consulting services contract did not have any associated
cost and expense in the first quarter (See Chart B).(2)
    
    Real estate revenues from continuing operations decreased $44,000 or 3% for the first
quarter of fiscal 2006 compared to the same period in fiscal 2005, primarily due to:
 (a)
    
    a decrease in leaseback income of approximately $86,000 related to a
leaseback interest in a Kmart shopping center located in Minneapolis, Minnesota,
that was sold in September 2004 ;
  (b)
    
    a net increase in rental income of approximately $42,000.
  July 31,2005
    
    
    2004Energy and Facilities Solutions (a)
    
    $
    2,401,000
    
    
    $
    2,317,000Energy Services (b)
    
    
    2,299,000
    
    
    
    1,264,000Real Estate (c)
    
    
    6,690,000
    
    
    
    6,639,000Less: Intersegment eliminations
    
    
    (529,000
    )
    
    
    (521,000
    )Total Backlog
    
    $
    10,861,000
    
    
    $
    9,699,000
 
 (a)
    
    Backlog includes contracts that can be cancelled with less than one years notice, and
assumes cancellations provisions will not be invoked. The cancellation rate for such
contracts in the previous twelve months was approximately 9%.(b)
    
    The increase in backlog is primarily due to an increase in customer contracts in the
education, government and industrial sectors.(c)
    
    Not included in backlog are the sale of two outparcels located in North Fort Myers, Florida,
both of which are under contract, with closing dates contemplated in October 2005. There can
be no assurance that either sale will close. 
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CHART B
 Percent of SegmentRevenues forFirst Quarter Ended
    
    First Quarter EndedJuly 31,
    
    July 31,2005
    
    2004
    
    2005
    
    2004Energy and Facilities Solutions
    
    $
    510
    
    
    $
    481
    
    
    
    55
    
    
    
    54Energy Services (1)
    
    
    989
    
    
    
    1,481
    
    
    
    47
    
    
    
    75Real Estate (2)
    
    
    1,093
    
    
    
    1,275
    
    
    
    65
    
    
    
    73$
    2,592
    
    
    $
    3,237
    
    
    
    54
    
    
    
    71
 NOTES TO CHART B
 (1)
    
    On a dollar basis, costs and expenses from continuing operations decreased $492,000 or 33%
for the first quarter of fiscal 2006, compared to the same period of fiscal 2005, primarily
due a decrease in installation contract revenues.On a percentage basis, costs and expenses decreased due to:
 (a)
    
    the recognition of revenue from a consulting services contract that had
no additional cost and expense in the first quarter; and(b)
    
    an increase in margins on installation contract revenues from 25% in the
first quarter of 2005 to 34% in the first quarter of 2006.
 (2)
    
    On a dollar and percentage basis, costs and expenses from continuing operations decreased
$182,000 or 14% for the first quarter of fiscal 2006, compared to the same period of fiscal
2005, primarily due to:
 (a)
    
    a decrease of $68,000 in lease costs related to a leaseback interest in a
Kmart shopping center located in Minneapolis, Minnesota, that was sold in September
2004;(b)
    
    a decrease in common area maintenance expense of $43,000;(c)
    
    a decrease of $40,000 related to depreciation and amortization; and(d)
    
    a decrease of $31,000 related to leasing and marketing expense.
 
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CHART C
 Percent of SegmentRevenues forFirst Quarter Ended
    
    First Quarter EndedJuly 31,
    
    July 31,2005
    
    2004
    
    2005
    
    2004Energy and Facilities Solutions (1)
    
    $
    546
    
    
    $
    639
    
    
    
    59
    
    
    
    72Energy Services (2)
    
    
    555
    
    
    
    640
    
    
    
    26
    
    
    
    33Real Estate (3)
    
    
    265
    
    
    
    363
    
    
    
    16
    
    
    
    21Parent (4)
    
    
    900
    
    
    
    696
    
    
    
    19
    
    
    
    15$
    2,266
    
    
    $
    2,338
    
    
    
    48
    
    
    
    51
 NOTES TO CHART C
 (1)
    
    On a dollar and percentage basis, SG&A expenses from continuing operations decreased $93,000
or 15% for the first quarter of 2006, compared to the same period of fiscal 2005, primarily
due to:
 (a)
    
    the reversal of a bad debt expense of $46,000 from one customer that was
recorded in a prior period. The change was based on a substantial portion of the
receivable being collected and the remaining amount is believed to be collectible;
and(b)
    
    a decrease of rent expense of $27,000 related to the Energy Facilities
and Solutions Segment moving its main offices to the Companys corporate
headquarters.
 (2)
    
    On a dollar and percentage basis, SG&A expenses from continuing operations decreased $85,000
or 13% for the first quarter of 2006, compared to the same period of fiscal 2005, primarily
due to a decrease in project development costs of approximately $46,000 associated with the
timing of when contracts are awarded.(3)
    
    On a dollar and percentage basis, SG&A expenses from continuing operations decreased $98,000
or 27% for the first quarter of fiscal 2006, compared to the same period of fiscal 2005,
primarily due to the legal costs incurred in the prior year period related to the arbitration
proceedings against the Companys former asset manager that was settled in December 2004.(4)
    
    On a dollar and percentage basis, SG&A expenses increased $204,000 or 29% for the first
quarter of fiscal 2006, compared to the same period of fiscal 2005, primarily due to:
 (a)
    
    an increase in personnel and personnel related costs of approximately
$64,000; and(b)
    
    an increase of approximately $66,000 related to marketing efforts and the
re-development of the Companys Website.
 Liquidity and capital resources
  (a)
    
    the payment of $620,000 to employees, representing a portion of the
incentive compensation resulting from the successful achievement of Company-wide
earnings and performance goals in fiscal 2005;(b)
    
    an increase in note receivables of approximately $689,000 related to
services performed on a consulting contract;
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(c)
    
    a net decrease in trade and subcontractors payables, accrued expenses and
billings in excess of costs and earnings of $371,000 due to the timing and
submission of payments; and(d)
    
    an increase in other current assets of approximately $218,000 related to
insurance prepayments;
  (e)
    
    a net decrease in receivables and costs and earnings in excess of
billings of approximately $853,000.
  (a)
    
    the release of approximately $3,490,000 previously held in escrow for the
purpose of purchasing a replacement property as part of an Internal Revenue Code
Section 1031 federal tax deferred exchange for the Companys shopping center located
in Cincinnati, Ohio, sold in February 2005. The Company did not purchase a
replacement property.
  (b)
    
    approximately $311,000 in tenant and building improvements; and(c)
    
    additions to intangible assets of $214,000 primarily related to software
development costs for one of the Companys proprietary software solutions.
   Cautionary statement regarding forward-looking statements
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Critical Accounting Policies
  Revenue recognition
     Income-producing properties and property and equipment
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Valuation of goodwill and other intangible assets
  Income taxes
  Discontinued Operations
 Accounting for the Impairment or Disposal of Long- Lived Assets,
 
 ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
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ITEM 4. CONTROLS AND PROCEDURES
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ITEM 6. EXHIBITS
 31(a)
    
    Certification of Chief Executive Officer, pursuant Rules 13a-14(a)/15d-14(a)31(b)
    
    Certification of Chief Financial Officer, pursuant Rules 13a-14(a)/15d-14(a)32(a)
    
    Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted
Pursuant to Section 906 of the Sarbanes Oxley Act 200232(b)
    
    Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted
Pursuant to Section 906 of the Sarbanes Oxley Act 2002
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ABRAMS INDUSTRIES, INC.
          (Registrant)Date: September 14, 2005
    /s/ Alan R. AbramsAlan R. AbramsChief Executive OfficerDate: September 14, 2005
    /s/ Mark J. ThomasMark J. ThomasChief Financial Officer 19