##### 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 January 31, 2003

Commission file number 0-10146

ABRAMS INDUSTRIES, INC.

(Exact name of registrant as specified in its charter)


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
(Address of principal executive offices) (Zip Code)

Registrants telephone number, including area code: (770) 953-0304

Former name, former address, former fiscal year, if changed since last report: N/A

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  þ            No  o

The number of shares of $1.00 par value Common Stock of the
Registrant outstanding as of February 28, 2003, was 2,910,051.





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TABLE OF CONTENTS



|                                               |                                                                                                |  |  |  |  |  |  | 
|---------------------------------------------- | ---------------------------------------------------------------------------------------------- |  |  |  |  |  |  | 
|PART I. FINANCIAL INFORMATION                 
|                                               | ITEM 1. FINANCIAL STATEMENTS                                                                  
|                                               | ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
|                                               | ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.                           
|                                               | ITEM 4. CONTROLS AND PROCEDURES.                                                              
|PART II. OTHER INFORMATION                    
|                                               | ITEM 1. LEGAL PROCEEDINGS                                                                     
|                                               | ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K                                                      
|SIGNATURES                                    
|CERTIFICATION BY CHIEF EXECUTIVE OFFICER      
|CERTIFICATION BY CHIEF FINANCIAL OFFICER      
|EX-99.1 - SECTION 906 CERTIFICATION OF THE CEO
|EX-99.2 - SECTION 906 CERTIFICATION OF THE CFO



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##### Table of Contents






PART I. FINANCIAL INFORMATION




ITEM 1.   FINANCIAL STATEMENTS

ABRAMS INDUSTRIES, INC.
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)

January 31, 2003
        
        April 30, 2002ASSETSCURRENT ASSETS:Cash and cash equivalents
        
        $
        4,970,008
        
        
        $
        7,911,205Receivables (Note 3)
        
        
        11,871,826
        
        
        
        12,978,375Less: Allowance for doubtful accounts (Note 5)
        
        
        (514,524
        )
        
        
        (1,031,460
        )Assets of discontinued operations (Note 4)
        
        
        102,146
        
        
        
        12,525,941Costs and earnings in excess of billings
        
        
        1,389,990
        
        
        
        682,162Property held for sale
        
        
        74,687
        
        
        
        Income taxes receivable
        
        
        1,553,696
        
        
        
        843,486Deferred income taxes
        
        
        864,036
        
        
        
        864,036Other
        
        
        714,746
        
        
        
        686,842Total current assets
        
        
        21,026,611
        
        
        
        35,460,587INCOME-PRODUCING PROPERTIES, net
        
        
        43,333,035
        
        
        
        44,545,585PROPERTY AND EQUIPMENT, net
        
        
        503,579
        
        
        
        642,710OTHER ASSETS:Real estate held for future development or sale
        
        
        3,952,812
        
        
        
        4,211,073Intangible assets, net (Note 7)
        
        
        2,373,301
        
        
        
        2,416,887Goodwill (Note 7)
        
        
        1,741,831
        
        
        
        1,741,831Other
        
        
        2,517,673
        
        
        
        2,765,696$
        75,448,842
        
        
        $
        91,784,369LIABILITIES
AND SHAREHOLDERS EQUITYCURRENT LIABILITIES:Trade and subcontractors payables
        
        $
        5,761,255
        
        
        $
        8,028,199Accrued expenses
        
        
        1,470,256
        
        
        
        1,637,525Liabilities of discontinued operations (Note 4)
        
        
        639,384
        
        
        
        12,541,036Billings in excess of costs and earnings
        
        
        1,100,870
        
        
        
        677,987Current maturities of long-term debt
        
        
        2,515,374
        
        
        
        2,700,744Total current liabilities
        
        
        11,487,139
        
        
        
        25,585,491DEFERRED INCOME TAXES
        
        
        4,359,894
        
        
        
        4,359,894OTHER LIABILITIES
        
        
        3,824,801
        
        
        
        3,896,616MORTGAGE NOTES PAYABLE, less current maturities
        
        
        23,642,359
        
        
        
        19,501,385OTHER LONG-TERM DEBT, less current maturities
        
        
        10,671,855
        
        
        
        15,662,107Total liabilities
        
        
        53,986,048
        
        
        
        69,005,493COMMITMENTS AND CONTINGENCIES (Note 12)SHAREHOLDERS EQUITY:Common stock, $1 par value; 5,000,000 shares authorized;
3,055,539 issued and 2,910,051 outstanding in January 2003,
3,054,439 issued and 2,909,079 outstanding in April 2002
        
        
        3,055,539
        
        
        
        3,054,439Additional paid-in capital
        
        
        2,139,403
        
        
        
        2,135,005Deferred stock compensation
        
        
        (2,750
        )
        
        
        (12,744
        )Retained earnings
        
        
        16,942,749
        
        
        
        18,273,853Treasury stock, common shares;
145,488 in January 2003 and 145,360 in April 2002
        
        
        (672,147
        )
        
        
        (671,677
        )Total shareholders equity
        
        
        21,462,794
        
        
        
        22,778,876$
        75,448,842
        
        
        $
        91,784,369


See accompanying notes to consolidated financial statements.

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ABRAMS INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)

THIRD QUARTER ENDED
        
        FIRST NINE MONTHS ENDEDJANUARY 31,
        
        JANUARY 31,2003
        
        2002
        
        2003
        
        2002REVENUES:Construction
        
        $
        11,824,634
        
        
        $
        20,388,024
        
        
        $
        46,353,243
        
        
        $
        85,293,150Rental income
        
        
        2,818,376
        
        
        
        3,004,214
        
        
        
        8,005,919
        
        
        
        8,500,489Real estate sales
        
        
        434,561
        
        
        
        465,000
        
        
        
        434,561
        
        
        
        465,000Energy management
        
        
        723,490
        
        
        
        734,084
        
        
        
        2,122,032
        
        
        
        2,350,01215,801,061
        
        
        
        24,591,322
        
        
        
        56,915,755
        
        
        
        96,608,651Interest
        
        
        13,484
        
        
        
        24,728
        
        
        
        48,869
        
        
        
        144,911Other
        
        
        10,737
        
        
        
        10,555
        
        
        
        53,105
        
        
        
        53,17815,825,282
        
        
        
        24,626,605
        
        
        
        57,017,729
        
        
        
        96,806,740COSTS AND EXPENSES:Construction
        
        
        11,460,006
        
        
        
        19,846,464
        
        
        
        45,482,225
        
        
        
        82,962,168Rental property operating expenses, excluding interest
        
        
        1,824,637
        
        
        
        1,876,786
        
        
        
        5,050,997
        
        
        
        4,894,158Cost of real estate sold
        
        
        196,087
        
        
        
        405,647
        
        
        
        196,087
        
        
        
        405,647Energy management
        
        
        432,551
        
        
        
        508,757
        
        
        
        1,165,153
        
        
        
        1,358,12113,913,281
        
        
        
        22,637,654
        
        
        
        51,894,462
        
        
        
        89,620,094Selling, general and administrativeConstruction (Note 5)
        
        
        734,505
        
        
        
        713,801
        
        
        
        1,649,312
        
        
        
        2,260,595Real estate
        
        
        263,381
        
        
        
        141,260
        
        
        
        716,451
        
        
        
        382,114Energy management
        
        
        442,380
        
        
        
        346,256
        
        
        
        1,286,024
        
        
        
        993,581Parent
        
        
        631,347
        
        
        
        448,581
        
        
        
        1,816,502
        
        
        
        1,803,8882,071,613
        
        
        
        1,649,898
        
        
        
        5,468,289
        
        
        
        5,440,178Interest costs incurred
        
        
        818,074
        
        
        
        815,508
        
        
        
        2,271,177
        
        
        
        2,493,53016,802,968
        
        
        
        25,103,060
        
        
        
        59,633,928
        
        
        
        97,553,802LOSS BEFORE INCOME TAXES FROM
CONTINUING OPERATIONS
        
        
        (977,686
        )
        
        
        (476,455
        )
        
        
        (2,616,199
        )
        
        
        (747,062
        )INCOME TAX BENEFIT
        
        
        (375,000
        )
        
        
        (210,997
        )
        
        
        (1,012,000
        )
        
        
        (321,997
        )LOSS FROM CONTINUING OPERATIONS
        
        
        (602,686
        )
        
        
        (265,458
        )
        
        
        (1,604,199
        )
        
        
        (425,065
        )DISCONTINUED OPERATIONS (Note 4):Earnings (loss) from discontinued operations, adjusted
for applicable income tax expense of $0,
$29,729, $3,413, and $68,729, respectively
        
        
        (479
        )
        
        
        45,289
        
        
        
        4,283
        
        
        
        110,408Gain on sale of assets of discontinued operations,
adjusted for applicable income tax expense of $0, $0,
$372,228 and $1,056,000, respectively
        
        
        
        
        
        
        
        
        
        
        617,987
        
        
        
        1,720,749EARNINGS (LOSS) FROM DISCONTINUED OPERATIONS
        
        
        (479
        )
        
        
        45,289
        
        
        
        622,270
        
        
        
        1,831,157NET EARNINGS (LOSS)
        
        $
        (603,165
        )
        
        $
        (220,169
        )
        
        $
        (981,929
        )
        
        $
        1,406,092NET EARNINGS (LOSS) PER SHARE  BASIC AND DILUTED (Note 9):From continuing operations
        
        $
        (.21
        )
        
        $
        (.09
        )
        
        $
        (.55
        )
        
        $
        (.14
        )From discontinued operations
        
        
        
        
        
        
        .01
        
        
        
        .21
        
        
        
        .62NET EARNINGS (LOSS) PER SHARE  BASIC AND DILUTED
        
        $
        (.21
        )
        
        $
        (.08
        )
        
        $
        (.34
        )
        
        $
        .48$
        
        
        
        $DIVIDENDS PER SHARE
        
        $
        .04
        
        
        $
        .04
        
        
        
        .12
        
        
        
        .12WEIGHTED AVERAGE SHARES OUTSTANDING  BASIC AND DILUTED
        
        
        2,910,051
        
        
        
        2,922,941
        
        
        
        2,909,771
        
        
        
        2,931,498


See accompanying notes to consolidated financial statements.

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ABRAMS INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)

NINE MONTHS ENDED JANUARY 31,2003
        
        2002Cash flows from operating activities:Net earnings (loss)
        
        $
        (981,929
        )
        
        $
        1,406,092Adjustments to reconcile net earnings (loss) to net
cash used in operating activities:Depreciation and amortization
        
        
        1,910,170
        
        
        
        1,717,491Gain on sale of real estate
        
        
        (238,474
        )
        
        
        (59,353
        )Loss on impairment
        
        
        
        
        
        
        32,952(Recovery of) provision for doubtful accounts, net
        
        
        (516,936
        )
        
        
        20,896Income from discontinued operations, net of tax
        
        
        (622,270
        )
        
        
        (1,831,157
        )Changes in assets and liabilities:Receivables
        
        
        388,796
        
        
        
        (1,682,837
        )Costs and earnings in excess of billings
        
        
        (707,828
        )
        
        
        348,288Other current assets
        
        
        (27,904
        )
        
        
        (416,708
        )Other assets
        
        
        244,023
        
        
        
        514,746Trade and subcontractors payable
        
        
        (2,266,944
        )
        
        
        807,075Accrued expenses
        
        
        (167,269
        )
        
        
        (2,648,068
        )Billings in excess of costs and earnings
        
        
        422,883
        
        
        
        (208,922
        )Other liabilities
        
        
        (71,815
        )
        
        
        (137,039
        )Net cash used in operating activities
        
        
        (2,635,497
        )
        
        
        (2,136,544
        )Cash flows from investing activities:Proceeds from sale of real estate, net
        
        
        422,048
        
        
        
        407,837Additions to income-producing properties, net
        
        
        (36,185
        )
        
        
        (420,212
        )Additions to property and equipment, net
        
        
        (68,597
        )
        
        
        Additions to intangible assets
        
        
        (202,168
        )
        
        
        (221,502
        )Acquisition, net of cash acquired
        
        
        
        
        
        
        (2,971,663
        )Repayments received on notes receivable
        
        
        7,543
        
        
        
        91,710Net cash provided by (used in) investing activities
        
        
        122,641
        
        
        
        (3,113,830
        )Cash flows from financing activities:Debt proceeds
        
        
        4,900,000
        
        
        
        Debt repayments
        
        
        (6,015,320
        )
        
        
        (1,470,948
        )Deferred loan costs paid
        
        
        (107,788
        )
        
        
        (5,000
        )Repurchase of common stock
        
        
        (470
        )
        
        
        (159,097
        )Cash dividends
        
        
        (349,177
        )
        
        
        (352,433
        )Net cash used in financing activities
        
        
        (1,572,755
        )
        
        
        (1,987,478
        )Cash flows from discontinued operations:Operating activities
        
        
        (138,787
        )
        
        
        870,980Mortgage payoff
        
        
        (12,206,700
        )
        
        
        Proceeds from sale of property, net of costs of sale
        
        
        13,489,901
        
        
        
        Net cash provided by discontinued operations
        
        
        1,144,414
        
        
        
        870,980Net decrease in cash and cash equivalents
        
        
        (2,941,197
        )
        
        
        (6,366,872
        )Cash and cash equivalents at beginning of period
        
        
        7,911,205
        
        
        
        11,448,750Cash and cash equivalents at end of period
        
        $
        4,970,008
        
        
        $
        5,081,878Supplemental disclosure of noncash investing activities:Transfer of income-producing property to property held for sale
        
        $
        
        
        
        $
        12,522,944Transfer of property to real estate held for future development or sale
        
        $
        
        
        
        $
        321,710Supplemental disclosure of noncash financing activities:Issuance of common stock under Stock Award Plan
        
        $
        5,500
        
        
        $
        


See accompanying notes to consolidated financial statements.

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ABRAMS INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JANUARY 31, 2003, AND APRIL 30, 2002
(UNAUDITED)

NOTE
1.   ORGANIZATION AND BUSINESS

Abrams Industries, Inc. and subsidiaries (the Company) was organized
under Delaware law in 1960. In 1984, the Company changed its state of
incorporation from Delaware to Georgia. The Company engages in (i) commercial
construction; (ii) development and ownership of income-producing real estate
properties; and (iii) energy management.

NOTE 2.   UNAUDITED
STATEMENTS

The accompanying unaudited consolidated financial statements have been
prepared by the Company in accordance with accounting principles generally
accepted in the United States of America, pursuant to the rules and regulations
of the Securities and Exchange Commission. Certain information and footnote
disclosures normally included in financial statements have been condensed or
omitted pursuant to such rules and regulations, although management believes
that the disclosures contained herein are adequate to make the information
presented not misleading. In the opinion of management, the accompanying
financial statements contain all necessary adjustments, which consist of normal
recurring accruals, that are necessary for a fair statement of the results for
the interim periods presented. These financial statements should be read in
conjunction with the consolidated financial statements and the notes thereto
included in the Companys Annual Report to Shareholders for the year ended
April 30, 2002. Results of operations for interim periods are not necessarily
indicative of annual results.

Certain reclassifications have been made to the fiscal 2002 consolidated
financial statements to conform to classifications adopted in the first nine
months of fiscal 2003.

NOTE
3.   RECEIVABLES

All net contract and trade receivables are expected to be collected within
one year.

NOTE
4.   DISCONTINUED OPERATIONS

Effective May 1, 2002, the Company adopted Statement of Financial
Accounting Standards (SFAS) No. 144, which requires, among other things, that
the operating results of certain income-producing assets, sold subsequent to
April 30, 2002, be included in discontinued operations in the statements of
operations for all periods presented. On June 28, 2002, the Company sold its
shopping center located in Englewood, Florida, and recognized a pre-tax gain of
$990,215. As a result of the sale, the Companys financial statements have
been prepared with the propertys assets and liabilities, results of
operations, cash flows, and the gain from the sale shown as discontinued
operations. All historical statements have been restated to conform to this
presentation in accordance with SFAS 144. Summarized financial information for
discontinued operations is as follows:

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Three months endedJanuary 31,Results of
operations
        
        2003
        
        2002Revenues
        
        $
        
        
        
        $
        581,191Operating expenses, including amortization and interest
        
        
        479
        
        
        
        506,173$
        (479
        )
        
        $
        75,018


Nine months endedJanuary 31,Results of
operations
        
        2003
        
        2002Revenues
        
        $
        289,173
        
        
        $
        1,520,287Operating expenses, including amortization and interest
        
        
        281,477
        
        
        
        1,341,150$
        7,696
        
        
        $
        179,137


Balances atAssets of
discontinued operations
        
        January 31, 2003
        
        April 30, 2002Property held for sale
        
        $
        
        
        
        $
        12,502,037Receivables
        
        
        57,020
        
        
        
        16,713Other
        
        
        45,126
        
        
        
        7,191$
        102,146
        
        
        $
        12,525,941


Balances atLiabilities of
discontinued operations
        
        January 31, 2003
        
        April 30, 2002Mortgage debt
        
        $
        
        
        
        $
        12,206,700Accounts payable
        
        
        
        
        
        
        10,764Income taxes
        
        
        552,435
        
        
        
        242,091Accrued expenses
        
        
        86,949
        
        
        
        81,481$
        639,384
        
        
        $
        12,541,036


NOTE 5.   CHANGE IN
AN ALLOWANCE FOR DOUBTFUL ACCOUNTS

Selling, general, and administrative expense for the construction segment
for the nine months ended January 31, 2003, is net of a $450,000 reduction in
the allowance for doubtful accounts reserve for a receivable from Montgomery
Ward & Company, a former customer that is now undergoing a reorganization under
Chapter 11 of the U. S. Bankruptcy Code. In February 2003, the Company
received payment of $350,000 related to a portion of the Montgomery Ward
receivable and expects to realize the balance of the reduction within the next
several months.

NOTE 6.   NEW
ACCOUNTING PRONOUNCEMENTS

During August 2001, the Financial Accounting Standards Board issued SFAS
144, Accounting for the Impairment or Disposal of Long-Lived Assets. SFAS 144
supercedes SFAS 121, Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to be Disposed Of. In addition, SFAS 144 supercedes the
accounting and reporting provisions of APB Opinion No. 30, Reporting the
Results of Operations-Reporting the Effects of Disposal of a Segment of a
Business, and Extraordinary, Unusual and Infrequently Occurring Events and
Transactionsfor segments of a business to be disposed of. SFAS 144 addresses
the treatment of assets held for sale or to be otherwise disposed of, the
evaluation of impairment for long-lived assets, and the reporting of
discontinued operations. The provisions of SFAS

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144 are effective for financial
statements issued for fiscal years beginning after December 15, 2001. The
adoption of SFAS 144 did not have a significant impact on the Companys
financial position or cash flows. Under SFAS 144, as of May 1, 2002, the
Company began reporting any gains or losses recognized on sales of its
income-producing real estate properties in discontinued operations, and the
results of operations of any operating property classified as held for sale is
reported in discontinued operations.

In December 2002, SFAS 148, Accounting for Stock-Based Compensation -
Transition and Disclosure,was issued which is an amendment of SFAS 123,
Accounting for Stock-Based Compensation. This statement amends SFAS 123 to
provide alternative methods of transition for an entity that voluntarily
changes to the fair value based method of accounting for stock-based employee
compensation. It also amends the disclosure provisions of that statement to
require prominent disclosure about the effects on reported net income of an
entitys accounting policy decisions with respect to stock-based employee
compensation. The Company has elected to adopt this standard as of January 31,
2003, resulting in additional disclosures related to its stock-based
compensation plan as described in Note 10. This standard had no effect of the
financial position and results of operations of the Company.

NOTE 7.   GOODWILL
AND OTHER INTANGIBLE ASSETS

The gross carrying amounts and accumulated amortization for all of the
Companys intangible assets as of January 31, 2003, are as follows:

Gross Carrying
        
        AccumulatedAmortized intangible assets
        
        Amount
        
        AmortizationComputer-based work and energy
management products
        
        $
        967,319
        
        
        $
        337,035Computer software
        
        
        369,195
        
        
        
        298,106Real estate lease costs
        
        
        1,774,432
        
        
        
        917,888Deferred loan costs
        
        
        945,063
        
        
        
        468,583Other
        
        
        28,660
        
        
        
        5,017$
        4,084,669
        
        
        $
        2,026,629


Unamortized intangible assetsGoodwill
        
        $
        1,741,831Trademark
        
        
        315,261$
        2,057,092


Aggregate amortization expense for all amortized intangible assetsFor the quarter ended January 31, 2003
        
        $
        127,834For the nine months ended January 31, 2003
        
        
        380,409


Estimated amortization expense for all amortized intangible assets for thefiscal year endedApril 30, 2004
        
        $
        450,337April 30, 2005
        
        
        423,536April 30, 2006
        
        
        309,421April 30, 2007
        
        
        178,164April 30, 2008
        
        
        146,276


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NOTE 8.   OPERATING
SEGMENTS

The table below exhibits selected financial data on a segment basis.
Earnings (loss) from continuing operations before income taxes are total
revenues less operating expenses (including depreciation and interest) of
continuing operations. Parent expenses have not been allocated to the
subsidiaries.

EnergyFor the Quarter Ended January 31, 2003
        
        Construction
        
        Real Estate
        
        Management
        
        Parent
        
        Eliminations
        
        ConsolidatedRevenues from unaffiliated customers
        
        $
        11,824,634
        
        
        $
        3,252,937
        
        
        $
        723,490
        
        
        $
        
        
        
        $
        
        
        
        $
        15,801,061Interest and other income
        
        
        1,256
        
        
        
        20,160
        
        
        
        
        
        
        
        2,805
        
        
        
        
        
        
        
        24,221Intersegment revenue
        
        
        
        
        
        
        113,493
        
        
        
        
        
        
        
        
        
        
        
        (113,493
        )
        
        
        Total revenues from
continuing operations
        
        $
        11,825,890
        
        
        $
        3,386,590
        
        
        $
        723,490
        
        
        $
        2,805
        
        
        $
        (113,493
        )
        
        $
        15,825,282Earnings (loss) from continuing operations
before income taxes
        
        $
        (436,126
        )
        
        $
        280,670
        
        
        $
        (151,717
        )
        
        $
        (766,563
        )
        
        $
        96,050
        
        
        $
        (977,686
        )


EnergyFor the Quarter Ended January 31, 2002
        
        Construction
        
        Real Estate
        
        Management
        
        Parent
        
        Eliminations
        
        ConsolidatedRevenues from unaffiliated customers
        
        $
        20,388,024
        
        
        $
        3,469,214
        
        
        $
        734,084
        
        
        $
        
        
        
        $
        
        
        
        $
        24,591,322Interest and other income
        
        
        6,766
        
        
        
        26,984
        
        
        
        
        
        
        
        3,234
        
        
        
        (1,701
        )
        
        
        35,283Intersegment revenue
        
        
        
        
        
        
        115,245
        
        
        
        
        
        
        
        
        
        
        
        (115,245
        )
        
        
        Total revenues from
continuing operations
        
        $
        20,394,790
        
        
        $
        3,611,443
        
        
        $
        734,084
        
        
        $
        3,234
        
        
        $
        (116,946
        )
        
        $
        24,626,605Earnings (loss) from continuing operations
before income taxes
        
        $
        (230,878
        )
        
        $
        375,715
        
        
        $
        (122,200
        )
        
        $
        (542,226
        )
        
        $
        43,134
        
        
        $
        (476,455
        )


EnergyFor the Nine Months Ended January 31, 2003
        
        Construction
        
        Real Estate
        
        Management
        
        Parent
        
        Eliminations
        
        ConsolidatedRevenues from unaffiliated customers
        
        $
        46,353,243
        
        
        $
        8,440,480
        
        
        $
        2,122,032
        
        
        $
        
        
        
        $
        
        
        
        $
        56,915,755Interest and other income
        
        
        9,372
        
        
        
        76,945
        
        
        
        
        
        
        
        21,991
        
        
        
        (6,334
        )
        
        
        101,974Intersegment revenue
        
        
        
        
        
        
        336,056
        
        
        
        
        
        
        
        
        
        
        
        (336,056
        )
        
        
        Total revenues from
continuing operations
        
        $
        46,362,615
        
        
        $
        8,853,481
        
        
        $
        2,122,032
        
        
        $
        21,991
        
        
        $
        (342,390
        )
        
        $
        57,017,729Earnings (loss) from continuing operations
before income taxes
        
        $
        (968,368
        )
        
        $
        611,996
        
        
        $
        (336,400
        )
        
        $
        (2,033,802
        )
        
        $
        110,375
        
        
        $
        (2,616,199
        )


EnergyFor the Nine Months Ended January 31, 2002
        
        Construction
        
        Real Estate
        
        Management
        
        Parent
        
        Eliminations
        
        ConsolidatedRevenues from unaffiliated customers
        
        $
        85,293,150
        
        
        $
        8,965,489
        
        
        $
        2,350,012
        
        
        $
        
        
        
        $
        
        
        
        $
        96,608,651Interest and other income
        
        
        57,364
        
        
        
        123,437
        
        
        
        
        
        
        
        23,359
        
        
        
        (6,071
        )
        
        
        198,089Intersegment revenue
        
        
        
        
        
        
        358,393
        
        
        
        
        
        
        
        
        
        
        
        (358,393
        )
        
        
        Total revenues from
continuing operations
        
        $
        85,350,514
        
        
        $
        9,447,319
        
        
        $
        2,350,012
        
        
        $
        23,359
        
        
        $
        (364,464
        )
        
        $
        96,806,740Earnings (loss) from continuing operations
before income taxes
        
        $
        (70,824
        )
        
        $
        1,279,382
        
        
        $
        (7,331
        )
        
        $
        (2,099,011
        )
        
        $
        150,722
        
        
        $
        (747,062
        )


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NOTE 9.   EARNINGS
PER SHARE

Basic earnings per share are computed by dividing net earnings by the
weighted average shares outstanding during the reporting period. Diluted
earnings per share are computed giving effect to dilutive stock equivalents
resulting from outstanding options. The dilutive potential number of common
shares for the third quarter and the first nine months of fiscal 2003 were 0
and 12,648, respectively. Since the Company had losses from continuing
operations for both periods presented, all stock equivalents were antidilutive
during these periods, and are therefore excluded from weighted average shares
outstanding.

NOTE 10.   STOCK
COMPENSATION

In May 2001, the Company issued 150,616 incentive stock options with an
exercise price of $4.00 per share to certain employees, one-half of which
vested in May 2002 and the remaining one-half of which will vest in May 2003, as long as
the grantees continue to be employed by the Company until the vesting date. In
July 2002, the Company issued an additional 355,856 incentive stock options to
certain employees and 253,144 non-qualified stock options to the Companys
directors, certain employees, and an independent contractor, one-half of which
vest in July 2003 and the remaining one-half of which will vest in July 2004,
as long as the grantees continue to be employed by the Company until the
vesting date. All of the options issued in July 2002 have an exercise price of
$5.10 per share. On July 29, 2002, the Company granted a restricted stock
award totaling 1,100 shares of common stock to certain eligible employees,
which shares will vest on July 29, 2003, as long as the grantees continue to be
employed by the Company until the vesting date. No stock options or stock
awards were granted in the three months ended January 31, 2003. At January 31,
2003, 75,308 options were vested.

As allowed under SFAS 123, Accounting for Stock-Based Compensation, the
Company will account for all options issued to employees under the Award Plan
in accordance with APB Opinion No. 25, Accounting for Stock Issued to
Employees,and compensation expense, if any, will be recognized accordingly.
All options issued to non-employees will be accounted for under SFAS 123, and
compensation expense will be recognized accordingly.

For purposes of the pro forma disclosures required by SFAS 123, the
Company has computed the value of all stock option awards granted using the
Black-Scholes option pricing model.

The Black-Scholes option valuation model was developed for use in
estimating the fair value of traded options which have no vesting restrictions
and are fully transferable. In addition, option valuation models require the
input of highly subjective assumptions. In the Companys opinion, because the
Companys stock-based compensation awards have characteristics significantly
different from traded options, and because changes in the subjective
assumptions can materially affect the fair value estimate, the results obtained
from the valuation model do not necessarily provide a reliable single measure
of the value of its stock-based compensation awards.

If the Company had accounted for its stock-based compensation awards in
accordance with SFAS 123, pro forma results would have been as follows:

8



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##### Table of Contents



Three Months
        
        Nine MonthsEnded January 31,
        
        Ended January 31,2003
        
        2002
        
        2003
        
        2002Net earnings (loss), as reported
        
        $
        (603,165
        )
        
        $
        (220,169
        )
        
        $
        (981,929
        )
        
        $
        1,406,092Deduct: Total stock-based compensation
expense as determined under fair value
based method for all awards, net of
related tax effects
        
        
        (60,583
        )
        
        
        (12,256
        )
        
        
        (133,422
        )
        
        
        (34,726
        )Pro forma net earnings (loss)
        
        $
        (663,748
        )
        
        $
        (232,425
        )
        
        $
        (1,115,351
        )
        
        $
        1,371,366Net earnings (loss) per share:Basic and diluted  as reported
        
        $
        (0.21
        )
        
        $
        (0.08
        )
        
        $
        (0.34
        )
        
        $
        0.48Basic and diluted  pro forma
        
        $
        (0.23
        )
        
        $
        (0.09
        )
        
        $
        (0.38
        )
        
        $
        0.46


NOTE 11.   KMART
BANKRUPTCY

In January 2002, Kmart Corporation filed for protection under Chapter 11
of the U.S. Bankruptcy Code. At that time, four of the Companys seven owned
retail properties contained stores leased to Kmart, two of which were
freestanding stores. The Company sold at a gain its Englewood shopping center,
which is co-anchored by a Kmart store, on June 28, 2002. See Note 4. The
remaining three Kmart stores owned by the Company are currently open and
operating. The seven freestanding Kmart stores that the Company developed,
sold, leased back, and then sub-leased to Kmart are currently open and
operating.

In March 2002 and January 2003, Kmart published lists of stores that it
would close. None of the properties leased or subleased to Kmart by the
Company was on the lists. The Bankruptcy Court has not provided the Company any
further information as to whether any additional Kmart stores will be closed or
which leases will be rejected or affirmed. The Bankruptcy Court has extended
the deadline for Kmart to affirm or reject the Companys owned property leases
and leaseback subleases to May 31, 2003.

NOTE
12.   COMMITMENTS AND CONTINGENCIES

On December 18, 2002, ASK Financial, primary counsel for Montgomery Ward,
LLC (Ward), filed a complaint in Bankruptcy Court in Delaware to recover
approximately $1.84 million in alleged preference payments made by Ward to
the Companys subsidiary, Abrams Construction, Inc. (ACI), prior to Wards
Chapter 11 bankruptcy filing on December 28, 2000. Under federal bankruptcy
law, a bankrupt debtor-in-possession can sue to recover preferential payments
made to the creditors of the bankrupt debtor-in-possession during the 90-day
period preceding the filing for bankruptcy protection, subject to certain
defenses, including payments made in the ordinary course of business.
Management cannot reasonably estimate the amount, if any, that could ultimately
be paid with respect to this claim. The Company believes the claim against ACI
is without merit and intends to continue to vigorously defend against the
claim.

On September 20, 2002, the Companys subsidiary, Abrams Properties, Inc. (''API"), filed
a claim in the Superior Court of Cobb County, Georgia, against APIs former real estate
asset manager. The defendant subsequently made a demand against API for arbitration and filed a
counterclaim. During the third quarter of fiscal 2003, the Cobb County Superior Court denied the defendants demand
for arbitration, but this decision has been accepted for review by the
Georgia Court of Appeals. No hearing date has been set by the Appellate Court.  The
dispute arises out of the defendant's former provision of real estate  management services to API. The Company believes APIs claims against its former
asset manager and its defenses to the manager's claims are
meritorious and intends to continue to vigorously pursue the claims and assert the defenses.

The Company believes the ultimate
disposition of the above noted claims and legal proceedings will not have a material adverse effect on the financial condition, cash flows or results of
operations of the Company; however, the Company cannot predict the ultimate disposition of the above noted claims and proceedings.

9



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##### Table of Contents



The Company is subject to other various legal proceedings and claims that
arise in the ordinary course of business. While the resolution of these
matters cannot be predicted with certainty, the Company believes that the final
outcome of these matters will not have a material adverse effect on the
Companys financial position or results of operations.




ITEM 2.   MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.

Changes in CONSOLIDATED BALANCE
SHEETS between April 30, 2002, and January 31, 2003.

Accounts receivable decreased by $1,106,549 and subcontractors payable
decreased by $2,266,944, primarily because of the timing of the submission and
payment of invoices for construction work performed.

Assets of discontinued operations decreased by $12,423,795, as a result of
the sale of the shopping center in Englewood, Florida (see Note 4 to the
Consolidated Financial Statements).

Current maturities of long-term debt decreased by $185,370 and mortgage
notes payable increased by $4,140,974, primarily due to the refinancing of the
corporate headquarters building in Atlanta, Georgia. The prior acquisition and
construction loan in the amount of $4,279,361 was previously classified as
other long-term debt, and $317,322 was included in current maturities of
long-term debt.

Liabilities of discontinued operations decreased by $11,901,652, primarily
due to the repayment of the debt on the sold shopping center located in
Englewood, Florida (see Note 4 to the Consolidated Financial Statements).

Results of operations of the third quarter and the first nine months of fiscal
2003 compared to the third quarter and the first nine months of
fiscal 2002.

REVENUES From Continuing Operations

For the third quarter of fiscal 2003, consolidated revenues from
continuing operations, including interest income and other income, and net of
intersegment eliminations, were $15,825,282, compared to $24,626,605 for the
third quarter of fiscal 2002, a decrease of 36%. For the first nine months of
fiscal 2003, consolidated revenues from continuing operations were $57,017,729,
compared to $96,806,740 for the first nine months of fiscal 2002, a decrease of
41%.

The figures in Chart A are Segment revenues from continuing operations,
net of intersegment eliminations, and do not include interest income or other
income.

10



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##### Table of Contents



CHART A
REVENUES FROM CONTINUING OPERATIONS SUMMARY BY SEGMENT
(Dollars in Thousands)

Third Quarter Ended
        
        
        
        
        
        
        
        
        
        Nine Months EndedJanuary 31,
        
        
        
        
        
        
        
        
        
        January 31,Amount
        
        Percent
        
        
        
        Amount
        
        Percent2003
        
        2002
        
        Decrease
        
        Decrease
        
        2003
        
        2002
        
        Decrease
        
        DecreaseConstruction (1)
        
        $
        11,825
        
        
        $
        20,388
        
        
        $
        (8,563
        )
        
        
        (42
        )
        
        $
        46,353
        
        
        $
        85,293
        
        
        $
        (38,940
        )
        
        
        (46
        )Real Estate (2)
        
        
        3,253
        
        
        
        3,469
        
        
        
        (216
        )
        
        
        (6
        )
        
        
        8,441
        
        
        
        8,966
        
        
        
        (525
        )
        
        
        (6
        )Energy Management (3)
        
        
        723
        
        
        
        734
        
        
        
        (11
        )
        
        
        (1
        )
        
        
        2,122
        
        
        
        2,350
        
        
        
        (228
        )
        
        
        (10
        )$
        15,801
        
        
        $
        24,591
        
        
        $
        (8,790
        )
        
        
        (36
        )
        
        $
        56,916
        
        
        $
        96,609
        
        
        $
        (39,693
        )
        
        
        (41
        )


NOTES TO CHART A



|(1) |  | Revenues decreased for the third quarter and the first nine months of
fiscal 2003 compared to the same periods in fiscal 2002 primarily due to: a)
managements ongoing election to reduce revenue volume rather than
continuing to bid at prices that offered the Company unacceptable levels
of potential profitability on a number of jobs for the Companys largest
customer (revenues from this customer decreased by approximately $.7
million in the third quarter and $22 million in the first nine months of
fiscal 2003, as compared to the same periods in 2002); b) two distribution
center construction jobs for other customers, which accounted for revenues
of approximately $6.0 million in the third quarter and $13.4 million for
the first nine months of fiscal 2002; and c) a limited number of
construction jobs available in a very competitive marketplace, which is a
result of a continuing weakness in capital spending by many retail
companies. Management expects the trends discussed in (a) and (c) above
to continue. The Company has increased its new business development
efforts, as it actively seeks to identify customers and contracts that
place more value on the Companys high quality and high service approach,
and is exploring different commercial market sectors for potential
opportunities to broaden and increase construction segment revenues.
|--- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(2) |  | Revenues for the third quarter and the first nine months of fiscal 2003
are lower primarily due to the termination by Kmart of its subleases on
two leaseback centers during the fourth quarter of fiscal 2002. Revenues
on these leasebacks of approximately $147,000 and $441,000 were included
in the third quarter and first nine months of fiscal 2002, respectively.
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(3) |  | Revenues decreased for the third quarter and the first nine months of
2003 compared to the same periods in 2002 primarily due to the general slowdown
in the economy resulting in a decline in spending by customers for the
products and services offered by the Company. The Company has recently
augmented its sales and marketing capabilities in an effort to increase
market share despite the continued difficult economic conditions affecting
the markets the Company serves.
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

The following table indicates the backlog of contracts and rental income
from continuing operations for the next twelve months by industry segment.

January 31,2003
        
        2002Construction (1)
        
        $
        12,554,000
        
        
        $
        15,910,000Real Estate-rental income (2)
        
        
        8,886,000
        
        
        
        9,069,000Real Estate-sales (3)
        
        
        425,000
        
        
        
        Energy Management (4)
        
        
        683,000
        
        
        
        531,000Total Backlog
        
        $
        22,548,000
        
        
        $
        25,510,000


11



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##### Table of Contents





|(1) |  | See Note 1 to Chart A above.
|--- |  | ----------------------------



|(2) |  | The difference is primarily due to lease expirations.
|--- |  | -----------------------------------------------------



|(3) |  | Included in the real estate sales backlog at January 31, 2003, is a
contract to sell an outparcel in Jackson, Michigan. The sale of the
Jackson outparcel is expected to be sold at a gain, and is scheduled to
close prior to April 30, 2003.
|--- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(4) |  | Energy management contracts that can be cancelled with less than one years
notice are not included in backlog. As of January 31, 2003, such contracts
totaled approximately $1.1 million in potential revenue over the next
twelve months, assuming cancellation provisions are not invoked, compared
to $1.3 million at January 31, 2002.
|--- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

COSTS AND EXPENSES APPLICABLE TO REVENUES
From Continuing Operations

As a percentage of total segment revenues from continuing operations (See
Chart A) the total applicable costs and expenses (See Chart B) were 88% and 92%
for the third quarter of fiscal 2003 and 2002, respectively, and 91% and 93%
for the first nine months of fiscal 2003 and 2002, respectively. In reviewing
Chart B, the reader should recognize that the volume of revenues generally will
affect the amounts and percentages.

The figures in Chart B are net of intersegment eliminations.

CHART B
COSTS AND EXPENSES APPLICABLE TO REVENUES
FROM CONTINUING OPERATIONS SUMMARY BY SEGMENT
(Dollars in Thousands)

Percent of Segment
        
        
        
        
        
        
        
        
        
        Percent of SegmentRevenues for
        
        
        
        
        
        
        
        
        
        Revenues forThird Quarter Ended
        
        Third Quarter Ended
        
        Nine Months Ended
        
        Nine Months EndedJanuary 31,
        
        January 31,
        
        January 31,
        
        January 31,2003
        
        2002
        
        2003
        
        2002
        
        2003
        
        2002
        
        2003
        
        2002Construction (1)
        
        $
        11,460
        
        
        $
        19,846
        
        
        
        97
        
        
        
        97
        
        
        $
        45,482
        
        
        $
        82,962
        
        
        
        98
        
        
        
        97Real Estate (2)
        
        
        2,021
        
        
        
        2,283
        
        
        
        62
        
        
        
        66
        
        
        
        5,247
        
        
        
        5,300
        
        
        
        62
        
        
        
        59Energy Management (3)
        
        
        432
        
        
        
        509
        
        
        
        60
        
        
        
        69
        
        
        
        1,165
        
        
        
        1,358
        
        
        
        55
        
        
        
        58$
        13,913
        
        
        $
        22,638
        
        
        
        88
        
        
        
        92
        
        
        $
        51,894
        
        
        $
        89,620
        
        
        
        91
        
        
        
        93


NOTES TO CHART B



|(1) |  | Beginning in fiscal 2002, management began to see an oversupply of
contractors in the construction segments marketplace with consequential
pressure on margins, which is a result of a significant decrease in demand
due to the reduction in the number of available construction jobs because
of ongoing weakness of capital spending in the retail industry.
|--- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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|(2) |  | The decreases in the dollar amount applicable to revenues from continuing
operations for the third quarter and first nine months of fiscal 2003,
compared to the same periods of fiscal 2002, are primarily attributable
to: (a) a decrease in the costs of real estate sold of approximately
$210,000 in both periods presented; and (b) a decrease in leasing
expenses, due to the cancellation of Kmart subleases, of approximately
$130,000 and $385,000 for the third quarter and the first nine months,
respectively, offset by: (c) an increase in depreciation expense of
approximately $169,000 in the third quarter and $526,000 in the first nine
months of fiscal 2003 on the Companys shopping center located in North
Ft. Myers, Florida. That center was not depreciated during the third
quarter and the first nine months of fiscal 2002, as it was held for sale
during those periods. In the fourth quarter, the center was removed from
the market and reclassified to income-producing property, resulting in
recapture of the full fiscal year depreciation expense of $833,872 in that
quarter.
|--- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(3) |  | The decrease in the percentage of costs and expenses applicable to
revenues for the third quarter of 2003, compared to the same period of
2002, is primarily a result of the change in the mix of services and
products sold.
|--- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
From Continuing Operations

For the third quarter of 2003 and 2002, selling, general and
administrative expenses from continuing operations, net of intersegment
eliminations, were $2,071,613 and $1,649,898, respectively. As a percentage of
consolidated revenues from continuing operations, these expenses were
13% and
7%, respectively. For the first nine months of 2003 and 2002, selling, general
and administrative expenses from continuing operations, net of intersegment
eliminations, were $5,468,289 and $5,440,178, respectively. As a percentage of
consolidated revenues from continuing operations, these expenses were 10% and
6%, respectively. In reviewing Chart C, the reader should recognize that the
volume of revenues generally will affect the amounts and percentages. The
percentages in Chart C are based upon expenses as they relate to segment
revenues from continuing operations (Chart A), except for parent and total
expenses, which relate to consolidated revenues from continuing operations.

CHART C
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
FROM CONTINUING OPERATIONS BY SEGMENT
(Dollars in Thousands)

Percent of Segment
        
        
        
        
        
        
        
        
        
        Percent of SegmentRevenues for
        
        
        
        
        
        
        
        
        
        Revenues forThird Quarter Ended
        
        Third Quarter Ended
        
        Nine Months Ended
        
        Nine Months EndedJanuary 31,
        
        January 31,
        
        January 31,
        
        January 31,2003
        
        2002
        
        2003
        
        2002
        
        2003
        
        2002
        
        2003
        
        2002Construction (1)
        
        $
        735
        
        
        $
        714
        
        
        
        6
        
        
        
        4
        
        
        $
        1,649
        
        
        $
        2,261
        
        
        
        4
        
        
        
        3Real Estate (2)
        
        
        263
        
        
        
        141
        
        
        
        8
        
        
        
        4
        
        
        
        716
        
        
        
        382
        
        
        
        8
        
        
        
        4Energy Management (3)
        
        
        443
        
        
        
        346
        
        
        
        61
        
        
        
        47
        
        
        
        1,286
        
        
        
        993
        
        
        
        61
        
        
        
        42Parent (4)
        
        
        631
        
        
        
        449
        
        
        
        4
        
        
        
        2
        
        
        
        1,817
        
        
        
        1,804
        
        
        
        3
        
        
        
        2$
        2,072
        
        
        $
        1,650
        
        
        
        13
        
        
        
        7
        
        
        $
        5,468
        
        
        $
        5,440
        
        
        
        10
        
        
        
        6


13



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##### Table of Contents



NOTES TO CHART C



|(1) |  | On a dollar basis, selling, general and
administrative expenses were lower for the first nine months of fiscal
2003 compared to the same period of fiscal 2002 due to: (a) a $450,000
reduction in an allowance for doubtful accounts reserve for a receivable
from Montgomery Ward & Company; and (b) a reduction in personnel and
incentive compensation costs of approximately $237,000 offset by: (c) an increase in
marketing expenses of approximately $126,000.
|--- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(2) |  | On a dollar and percentage basis, selling, general and administrative
expenses were higher for the third quarter and the first nine months of
fiscal 2003 compared to the same periods of 2002 primarily due to
increased legal and professional fees of approximately $87,000 and
$226,000, respectively, and increased personnel and staffing costs of
approximately $75,000 for the first nine months of fiscal 2003.
|--- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(3) |  | On a dollar and percentage basis, selling, general and administrative
expenses were higher for the third quarter and the first nine months of
2003 compared to the same periods of fiscal 2002 primarily due to an
increase in the number of personnel and other personnel costs and consulting fees.
|--- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(4) |  | On a dollar basis, selling, general and administrative expenses were
higher for the third quarter of 2003 compared to the same period of 2002
primarily because of an increase in the number of personnel and other personnel costs.
|--- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Liquidity and capital resources.

Between April 30, 2002, and January 31, 2003, working capital decreased by
$335,624. Operating activities used cash of $2,635,497, which primarily
consisted of the decrease in trade and subcontractors payable. Investing
activities provided cash of $122,641. Financing activities used cash of
$1,572,755, primarily for scheduled principal payments of mortgage notes and
other long-term debt. Discontinued operations provided cash of $1,144,414,
primarily from the sale of the Companys shopping center located in Englewood,
Florida.

In October 1999, the Georgia World Congress Center Authority acquired the
Companys former wood manufacturing facility located in Atlanta, Georgia, for
approximately $4.5 million. For income tax purposes, the Company treated this
transaction as an involuntary conversion under Section 1033 of the Internal
Revenue Code, which allows for the tax deferral on the gain if the Company
acquires a qualified replacement property by April 30, 2003. The Company
intends to acquire such property, primarily through the use of debt financing,
by April 30, 2003. There can be no assurance, however, that such acquisition
will take place. If a qualified replacement property is not acquired by April
30, 2003, the Company will be required to pay the deferred taxes of
approximately $1.15 million, which are classified as a long-term liability on
the Companys Consolidated Balance Sheets at January 31, 2003, and April 30,
2002.

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At January 31, 2003, the Company had commitments from a bank for unsecured
lines of credit totaling $9 million to finance working capital and other
general corporate purposes, of which $650,000 was restricted to secure two
letters of credit described subsequently in this section. These lines of
credit bear interest at the prime rate or LIBOR plus 2%, and have a commitment
fee of 0.375% on any unused portion. The lines of credit will expire on
October 30, 2003. At January 31, 2003, there were no amounts outstanding under
these lines of credit.

In conjunction with the origination of a mortgage on an income-producing
property, the Company obtained an irrevocable, standby letter of credit in the
amount of $500,000. The letter of credit was originally issued in July 1997,
and has been extended to mature on June 30, 2003. The mortgage lender is
allowed to draw on the letter in order to reduce the related mortgage loan if
certain leasing requirements are not met. The letter of credit is secured by a
bank line of credit, as discussed above. The Company plans to extend this
letter of credit until December 31, 2003.

In 1999, in connection with the financing of the purchase of the Companys
shopping center in Jacksonville, Florida, the Company obtained a permanent
mortgage loan in the amount of $9,500,000, which is secured by the center. The
loan bears interest at 7.375% and is scheduled to be fully amortized over
twenty years. The loan matures in 2019, but the lender may call the loan at any
time after September 1, 2002 upon thirteen months notice. If the loan were
called, the Company would have up to thirteen months to repay the principal
amount of the loan without penalty by selling or refinancing the loan on the
shopping center. There can be no assurance that the property could be
refinanced or sold, and that sufficient proceeds would be realized during the
time allowed to pay off this loan. In conjunction with the loan, an Additional
Interest Agreement was executed which entitles the lender to be paid additional
interest equal to fifty percent of the quarterly net cash flow and fifty
percent of the appreciation in the property upon sale or refinance. The
liability related to the lenders fifty percent share of the appreciation in
the property was $2,520,150 at January 31, 2003. The mortgage debt and related
unamortized loan discount was $8,668,077 and $1,571,691, respectively, at
January 31, 2003.

In October 2002, the maturity date of the loan related to the Companys
shopping center in North Ft. Myers, Florida, was extended to February 2004. In
March 2003, the Company received an extension of the maturity date to August
2004. There can be no assurance that the property can be refinanced or that
sufficient proceeds from any such refinancings will be available to pay off
this loan on or before the maturity date.

On June 28, 2002, the Company sold its shopping center located in
Englewood, Florida, at a gain. The Company is using the excess cash remaining,
after repaying the debt and selling expenses, for operating cash requirements,
capital improvements to owned real estate, and to pursue investment in other
growth opportunities.

In July 2002, the Company refinanced the acquisition and construction loan
on its corporate headquarters building in Atlanta, Georgia, which loan had a
balance of $4,596,683 as of April 30, 2002. The new permanent loan, in the
original principal amount of the $4,900,000, bears interest at 7.75%, is due in
ten years, and is to be amortized on a twenty-five year schedule. Net proceeds
from the new loan, remaining after repayment of the original loan and
refinancing costs, are being used for operating cash needs. In conjunction
with the refinancing of the loan, the Company is required to provide for
potential future tenant improvements and lease commissions through additional
collateral, in the form of a letter of credit in the amount of $150,000 for
each of the first three loan years, $300,000 during the fourth, fifth, and
sixth loan years, and $450,000 during the seventh, eighth, ninth and tenth loan
years. The $150,000 letter of credit for the first three loan years is secured
by a bank line of credit, as discussed above.

15



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##### Table of Contents



The Companys other commitments primarily include operating leases for its
seven leaseback shopping centers and two ground leases for two of its owned
buildings leased to Kmart. The Company has no long-term commitments to
purchase building materials or other supplies.

Cautionary statement regarding
forward-looking statements.

Certain statements contained or incorporated by reference in this
Quarterly Report on Form 10-Q, including without limitation, statements
containing the words believes, anticipates, expects, plans, and words
of similar import, are forward-looking statements within the meaning of the
federal securities laws. Such forward-looking statements involve known and
unknown risks, uncertainties and other matters which may cause the actual
results, performance or achievements of the Company to be materially different
from any past or future results, performance or uncertainties expressed or
implied by such forward-looking statements.

Factors relating to general global, national, regional and local economic
conditions, including international political stability, national security,
employment levels, wage and salary levels, consumer confidence, availability of
credit, taxation policies, interest rates, capital spending and inflation could
negatively impact the Company and its customers, suppliers and sources of
capital. Any significant negative impact from these factors could result in
material adverse effects on the Companys results of operations and financial
condition.

The Company is at risk for many other matters beyond its control,
including, but not limited to: the impact of the Kmart Corporation bankruptcy
on the Companys rental revenues; co-tenancy provisions in anchor tenant
leases; the Companys ability to sell or refinance its real estate; the
possibility of not achieving projected backlog revenues or not realizing
earnings from such revenues; continuing competitive pressures on the
availability and pricing of construction projects; the cost and availability of
insurance; the ability of the Company to attract and retain key personnel;
weather conditions; changes in laws and regulations, including changes in
accounting standards, generally accepted accounting principles, and regulatory
requirements of the SEC and NASDAQ; overall capital spending trends in the
economy; the timing and amount of earnings recognition related to the possible
sale of real estate properties held for sale; delays in customers orders; the
ultimate collectibility of the Companys receivable from the Montgomery Ward &
Company bankruptcy; the ultimate disposition of legal proceedings in which the
Company is involved; the availability, timing and amount of possible
refinancings related to real estate properties; the level and volatility of
interest rates; the potential loss of a significant customer; the failure of a
subcontractor to perform; and the deterioration in the financial stability of
an anchor tenant, significant subcontractor or other significant customer.

Critical Accounting Policies

A critical accounting policy is one which is both important to the
portrayal of a Companys financial position and results of operations, and
requires the Company to make estimates and assumptions in certain circumstances
that affect amounts reported in the accompanying consolidated financial
statements and related notes. In preparing these financial statements, the
Company has made its best estimates and judgments regarding certain amounts
included in the financial statements, giving due consideration to materiality.
The application of these accounting policies involves the exercise of judgment
and use of assumptions regarding future uncertainties, and as a result, actual
results could differ from those estimates. Management believes that the
Companys most critical accounting policies are discussed below:

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Revenue recognition

Construction revenues are reported on the percentage-of-completion method,
using costs incurred to date in relation to estimated total costs of the
contracts, to measure the stage of completion. Original contract prices are
adjusted for change orders in the amounts that are reasonably estimated based
on the Companys historical experience. The cumulative effects of changes in
estimated total contract costs and revenues (change orders) are recorded in the
period in which the facts requiring the revisions become known, and are
accounted for using the percentage-of-completion method. At the time it is
determined that a contract is expected to result in a loss, the entire
estimated loss is recorded.

The Company leases space in its income-producing properties to tenants,
and recognizes minimum base rentals as revenue on a straight-line basis over
the lease terms. Tenants may also be required to pay additional rental amounts
based on property operating expenses. In addition, certain tenants are
required to pay incremental rental amounts, which are contingent on store
sales. These percentage rents are recognized only as earned.

Revenues from the sale of real estate are recognized when all of the
following have occurred: (a) the property is transferred to the buyer; (b) the
buyers initial and continuing investment are adequate to demonstrate a
commitment to pay for the property; and (c) the buyer has assumed all future
ownership risks of the property. Costs of sales related to real estate are
based on the specific property sold. When a portion or unit of a development
property is sold, a proportionate share of the total cost of the development is
charged to cost of sales.

Energy management revenues primarily consist of services and product
sales. Revenues are recognized as services are completed, and depending upon
the product type and customer agreement, product sales are recognized when
products are shipped or delivered.

Income-producing properties and property and equipment

Income-producing properties are stated at cost, and are depreciated for
financial reporting purposes using the straight-line method over the estimated
useful lives of the assets.

Property and equipment are recorded at cost, and are depreciated for
financial reporting purposes using the straight-line method over the estimated
useful lives of the assets. Significant additions, which extend asset lives,
are capitalized. Normal maintenance and repair costs are expensed as incurred.

Interest and other carrying costs related to any real estate assets under
development are capitalized. Costs of development and construction are also
capitalized. Capitalization of interest and other carrying costs is
discontinued when a project is substantially completed or if active development
ceases.

Impairment of long-lived assets, including goodwill, and assets to be disposed of

Long-lived assets and certain intangible assets, including goodwill, are
required to be reviewed for impairment on an annual basis or whenever events or
changes in circumstances indicate that the carrying amount of an asset may not
be recoverable. Recoverability of assets to be held and used is measured by a
comparison of the carrying amount of the asset to future net cash flows
expected to be generated by the asset. If an asset is considered to be
impaired, the impairment to be recognized is measured by the amount by which
the carrying amount of the asset exceeds the assets estimated fair value.
Assets to be disposed of are reported at the lower of their carrying amount or
estimated fair value less cost to sell. Depreciation is suspended during the
period the asset is marketed for sale.

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Income taxes

Income taxes are accounted for under the asset and liability method.
Deferred tax assets and liabilities are recognized for the future tax
consequences attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their respective tax
bases. Deferred tax assets and liabilities are measured using enacted tax
rates expected to apply to taxable income in the years in which those temporary
differences are expected to be recovered or settled. The effect of a change in
tax rates on deferred tax assets and liabilities is recognized in income in the
period that includes the enactment date.

New accounting pronouncements

See Note 6 to the consolidated financial statements.




ITEM
3.   QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT
MARKET RISK.

The Companys capital structure includes the use of variable rate and
fixed rate indebtedness. As such, it is exposed to the impact of changes in
interest rates. The Company typically refinances maturing debt instruments at
then-existing market interest rates, and at January 31, 2003, the fixed rate
and variable rate debt represented 68% and 32%, respectively, of the Companys
total debt outstanding.

See ITEM 2. Liquidity and capital resources for discussion regarding the
debt on the Companys former shopping center in Englewood, Florida, its
shopping center in North Ft. Myers, Florida, and its corporate headquarters
office building in Atlanta, Georgia. There have been no other material changes
since April 30, 2002. Refer to the Companys Annual Report on Form 10-K for
the fiscal year ended April 30, 2002, for detailed disclosures about
quantitative and qualitative disclosures about market risk.




ITEM 4.   CONTROLS
AND PROCEDURES

The Company has evaluated its disclosure controls and procedures as
defined by Rules 13a-14 and 15d-14 under the Securities Exchange Act of 1934,
as amended, within 90 days of the filing date of this Quarterly Report. This
evaluation was carried out under the supervision and with the participation of
the Companys management, including its Chief Executive Officer and Chief
Financial Officer. Based on this evaluation, these officers have concluded that
the Companys disclosure controls and procedures were effective as of the date
of the evaluation. There were no significant changes to the Companys internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of their evaluation.

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##### Table of Contents






PART II. OTHER INFORMATION




ITEM 1.   LEGAL
PROCEEDINGS

On December 18, 2002, ASK Financial, primary counsel for Montgomery Ward,
LLC (Ward), filed a complaint in Bankruptcy Court in Delaware to recover
approximately $1.84 million in alleged preference payments made by Ward to
the Companys subsidiary, Abrams Construction, Inc. (ACI), prior to Wards
Chapter 11 bankruptcy filing on December 28, 2000. Under federal bankruptcy
law, a bankrupt debtor-in-possession can sue to recover preferential payments
made to the creditors of the bankrupt debtor-in-possession during the 90-day
period preceding the filing for bankruptcy protection, subject to certain
defenses, including payments made in the ordinary course of business. The
Company believes the claim against ACI is without merit and intends to continue
to vigorously defend against the claim.

On September 20, 2002, the Companys subsidiary, Abrams Properties, Inc.
(API), filed a claim in the Superior Court of Cobb County, Georgia, against
APIs former real estate asset manager. The defendant subsequently made a
demand against API for arbitration and filed a counterclaim. During the third
quarter of fiscal 2003, the Cobb County Superior Court denied the defendants
demand for arbitration, but this decision has been accepted for review by the
Georgia Court of Appeals. No hearing date has been set by the Appellate Court.
The dispute arises out of the defendants former provision of real estate
asset management services to API. The Company believes APIs claims against
its former asset manager and its defenses to the managers claims are
meritorious and intends to continue to vigorously pursue the claims and assert
the defenses.

The Company believes the
ultimate disposition of the above noted
claims and legal proceedings will not have a material adverse effect on the
financial condition, cash flows or results of operations of the
Company; however, the Company cannot predict the ultimate disposition of the
above noted claims and proceedings.

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##### Table of Contents






ITEM 6.   EXHIBITS
AND REPORTS ON FORM 8-K



|(a) |  | Exhibits                                                                                                                                         
|--- |  | -------------------------------------------------------------------------------------------------------------------------------------------------
|   
|    |  | Exhibit 99.1 Certification Pursuant to 18 U.S.C. Section 1350, as Adopted
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002              
|   
|    |  | Exhibit 99.2 Certification Pursuant to 18 U.S.C. Section 1350, as Adopted
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002              
|   
|(b) |  | Reports on Form 8-K during the quarter ended January 31, 2003                                                                                    
|   
|    |  | See Current Reports on Form 8-K, filed January 24, 2003, reporting changes
in beneficial ownership of the common stock of Abrams Industries, Inc.

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##### Table of Contents






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.

ABRAMS INDUSTRIES, INC.
              (Registrant)Date:
        
        March 17, 2003
        
        /s/ Alan R. AbramsAlan R. Abrams
Chief Executive OfficerDate:
        
        March 17, 2003
        
        /s/ Melinda S. GarrettMelinda S. Garrett
Chief Financial Officer


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##### Table of Contents






CERTIFICATION BY CHIEF EXECUTIVE OFFICER

I, Alan R. Abrams, certify that:



|1. |  | I have reviewed this quarterly report on Form 10-Q of Abrams
Industries, Inc.;
|-- |  | ------------------------------------------------------------------------------



|2. |  | Based on my knowledge, this quarterly report does not contain any
untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect to
the period covered by this quarterly report;
|-- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|3. |  | Based on my knowledge, the financial statements, and other
financial information included in this quarterly report, fairly
present in all material respects the financial condition, results of
operations and cash flows of the registrant as of, and for, the
periods presented in this quarterly report;
|-- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|4. |  | The registrants other certifying officer and I are responsible
for establishing and maintaining disclosure controls and procedures
(as defined in Exchange Act Rules 13a-14 and 15d-14) for the
registrant and we have:
|-- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|a. |  | Designed such disclosure controls and procedures to
ensure that material information relating to the registrant,
including its consolidated subsidiaries, is made known to us by
others within those entities, particularly during the period in
which this quarterly report is being prepared;
|-- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|b. |  | Evaluated the effectiveness of the registrants
disclosure controls and procedures as of a date within 90 days
prior to the filing date of this quarterly report (the Evaluation
Date); and
|-- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|c. |  | Presented in this quarterly report our conclusions about
the effectiveness of the disclosure controls and procedures based
on our evaluation as of the Evaluation Date;
|-- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------



|5. |  | The registrants other certifying officer and I have disclosed,
based on our most recent evaluation, to the registrants auditors and
the audit committee of the registrants board of directors (or persons
performing the equivalent function):
|-- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|a. |  | All significant deficiencies in the design or operation
of internal controls which could adversely affect the registrants
ability to record, process, summarize and report financial data
and have identified for the registrants auditors any material
weaknesses in internal controls; and
|-- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|b. |  | Any fraud, whether or not material, that involves
management or other employees who have a significant role in the
registrants internal controls; and
|-- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------



|6. |  | The registrants other certifying officer and I have indicated in
this quarterly report whether or not there were significant changes in
internal controls or in other factors that could significantly affect
internal controls subsequent to the date of our most recent
evaluation, including any corrective actions with regard to
significant deficiencies and material weaknesses.
|-- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Date:
        
        March 17, 2003
        
        /s/ Alan R. AbramsAlan R. Abrams
Chief Executive Officer


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##### Table of Contents






CERTIFICATION BY CHIEF FINANCIAL OFFICER

I, Melinda S. Garrett, certify that:



|1. |  | I have reviewed this quarterly report on Form 10-Q of Abrams
Industries, Inc.;
|-- |  | ------------------------------------------------------------------------------



|2. |  | Based on my knowledge, this quarterly report does not contain any
untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect to
the period covered by this quarterly report;
|-- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|3. |  | Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and
cash flows of the registrant as of, and for, the periods presented in
this quarterly report;
|-- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|4. |  | The registrants other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and
we have:
|-- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|a. |  | Designed such disclosure controls and procedures to
ensure that material information relating to the registrant,
including its consolidated subsidiaries, is made known to us by
others within those entities, particularly during the period in
which this quarterly report is being prepared;
|-- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|b. |  | Evaluated the effectiveness of the registrants
disclosure controls and procedures as of a date within 90 days
prior to the filing date of this quarterly report (the Evaluation
Date); and
|-- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|c. |  | Presented in this quarterly report our conclusions about
the effectiveness of the disclosure controls and procedures based
on our evaluation as of the Evaluation Date;
|-- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------



|5. |  | The registrants other certifying officer and I have disclosed, based
on our most recent evaluation, to the registrants auditors and the
audit committee of the registrants board of directors (or persons
performing the equivalent function):
|-- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|a. |  | All significant deficiencies in the design or operation
of internal controls which could adversely affect the registrants
ability to record, process, summarize and report financial data
and have identified for the registrants auditors any material
weaknesses in internal controls; and
|-- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|b. |  | Any fraud, whether or not material, that involves
management or other employees who have a significant role in the
registrants internal controls; and
|-- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------



|6. |  | The registrants other certifying officer and I have indicated in
this quarterly report whether or not there were significant changes in
internal controls or in other factors that could significantly affect
internal controls subsequent to the date of our most recent evaluation,
including any corrective actions with regard to significant deficiencies
and material weaknesses.
|-- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Date:
        
        March 17, 2003
        
        /s/ Melinda S. GarrettMelinda S. Garrett
Chief Financial Officer


23