**EXHIBIT 13**

**J.W. MAYS, INC.**

**Annual Report2009**Year Ended July 31, 2009

J.W. MAYS, INC.

**Contents**

 

 

 

 

 

 
 
**Page No.**
 
 

 

Summary of Selected Financial Data
 
 
 
      2
  
 

The Company
 
 
 
      2
  
 

Message to Shareholders
 
 
 
      3
  
 

Consolidated Balance Sheets
 
 
 
      4-5
  
 

Consolidated Statements of Income and Retained      Earnings
 
 
 
      6
  
 

Consolidated Statements of Comprehensive Income
 
 
 
      6
  
 

Consolidated Statements of Cash Flows
 
 
 
      7
  
 

Notes to Consolidated Financial Statements
 
 
 
      8-17
  
 

Report of Management
 
 
 
      18
  
 

Report of Independent Registered Public      Accounting Firm
 
 
 
      18
  
 

Five Year Summary of Consolidated Operations
 
 
 
      19
  
 

Management’s Discussion and Analysis of Financial      Condition and Results of Operations
 
 
 
      20-23
  
 

Controls and Procedures
 
 
 
      23
  
 

Quarterly Financial Information (Unaudited)
 
 
 
      24
  
 

Common Stock and Dividend Information
 
 
 
      24
  
 

Officers and Directors
 
 
 
      25
  
 

**Executive Offices**9 Bond Street, Brooklyn, N.Y. 11201-5805

**Transfer Agent and Registrar**American Stock Transfer & Trust Company59 Maiden LaneNew York, N.Y. 10038-4502

**Special Counsel**Holland & Knight LLP195 BroadwayNew York, N.Y. 10007-3189

**Independent Registered Public Accounting Firm**D’Arcangelo & Co., LLP3000 Westchester AvenuePurchase, N.Y. 10577-2538

**Annual Meeting**The Annual Meeting of Shareholders will beheld on Tuesday, November 24, 2009, at10:00 A.M., New York time, at J.W. MAYS, INC.,9 Bond Street, Brooklyn, New York.

J.W. MAYS, INC.

**Summary of Selected Financial Data**(dollars in thousands except per share data)

 

 

 

 

 

 

 

 

 

 

 

 
 
**2009**
 
      2008
 
      2007
 
      2006
 
      2005

 

Rental Income
 
 

      $

 

       16,103
  
 

      $

 

       14,572
  
 

      $

 

       13,810
  
 

      $

 

       13,470
  
 

      $

 

       12,879
 
Recovery of Real Estate Taxes
 
 
 
      547
  
 
 
      91
  
 
 
      39
  
 
 
      196
  
      —

Gain (Loss) on Disposition of Property and Equipment
 
 
 
      (5

       )

 
 
 
 
      (17

       )

 
 
 
 
      4,309
  
      —
 
 
 
      4
 
 

Total Revenues
 
 
 
      16,645
  
 
 
      14,646
  
 
 
      18,158
  
 
 
      13,666
  
 
 
      12,883
 
 

Net Income (Loss)
 
 
 
      756
  
 
 
      (76

       )

 
 
 
 
      2,056
  
 
 
      1,433
  
 
 
      348
 
 

Real Estate-Net
 
 
 
      44,831
  
 
 
      45,277
  
 
 
      44,779
  
 
 
      45,586
  
 
 
      44,370
 
 

Total Assets
 
 
 
      55,707
  
 
 
      57,283
  
 
 
      60,162
  
 
 
      57,290
  
 
 
      57,177
 
 

Long-Term Debt:

 

 

 

 

 

 

 

 

 

 

Mortgages and Term Loan Payable
 
 
 
      8,564
  
 
 
      9,514
  
 
 
      11,554
  
 
 
      10,697
  
 
 
      12,476
 
Note Payable
 
 
 
      1,000
  
 
 
      1,000
  
 
 
      1,000
  
 
 
      1,000
  
 
 
      1,000
 
Other
 
 
 
      805
  
 
 
      1,370
  
 
 
      1,078
  
 
 
      1,031
  
 
 
      925
 
 

 

 

 

 

 

 

 

 

 

 

Total
 
 
 
      10,369
  
 
 
      11,884
  
 
 
      13,632
  
 
 
      12,728
  
 
 
      14,401
 
 

Shareholders’ Equity
 
 
 
      40,286
  
 
 
      39,454
  
 
 
      39,697
  
 
 
      37,639
  
 
 
      37,339
 
 

Net Income (Loss) Per Common Share
 
 

      $

 

       .38
  
 

      $

 

       (.04

       )

 
 
 

      $

 

       1.02
  
 

      $

 

       .71
  
 

      $

 

       .17
 
 

Cash Dividends Declared Per Share
 
      —
 
      —
 
      —
 
      —
 
      —

 

Average common shares outstanding for fiscal years 2005 through 2009; 2,015,780.

**The Company**

J.W. Mays, Inc. was founded in 1924 and incorporated under the laws of the State of New York on July 6, 1927.

The Company operates a number of commercial real estate properties located in Brooklyn and Jamaica in New York City, in Levittown and Massapequa, Long Island, New York, in Fishkill, Dutchess County, New York and in Circleville, Ohio. The major portion of these properties is owned and the balance  is leased. A substantial percentage of these properties are leased to tenants while the remainder is available for lease.

More comprehensive information concerning the Company appears in its Form 10-K Annual Report for the fiscal year ended July 31, 2009.

2

J.W. MAYS, INC.

**To Our Shareholders:**

The financial condition of our Company improved during the fiscal year ended July 31, 2009 with profits earned in all four quarters, notwithstanding the continued national and international recession during this period.

In fiscal 2009, our revenues were $16,644,716 compared to $14,646,049 in the 2008 fiscal year. Net income for fiscal 2009 was $756,086 or $.38 per share. This compares to net loss of ($75,641) or ($.04) per share for fiscal 2008.

During fiscal 2009, additional rent commenced for 57,209 square feet of office space at the Company’s Bond Street, Brooklyn, New York Property in February 2009.

Increased rentals from existing tenants and the new tenant in fiscal 2009, and before, should adequately cover the Company’s planned operating and capital requirements.

Our emphasis on pursuing and obtaining government agencies, educational institutions and prospective corporate and retail tenants in the last several years has helped us weather the commercial property headwinds which, hopefully, are abating.

I want to express the sincerest gratitude of the Board and all of Mays’ personnel to Mrs. Sylvia W. Shulman who stepped down from serving as a member of the Board as of December 31, 2008. Her leadership and guidance will be missed by all who have known, respected and loved her.

I believe our Company is well-positioned to continue its growth. I specifically want to thank the Mays’ personnel and our Board colleagues for their ongoing commitment and support.

Lloyd J. ShulmanChairman, President and Chief Executive Officer

October 7, 2009

3

J.W. MAYS, INC.

**Consolidated Balance Sheets**

July 31, 2009 and 2008**Assets**

 

 

 

 

 

 
 
**2009**
 
      2008

 

Property and Equipment-at cost (Notes 1 and 3):

 

 

 

 

Buildings and improvements
 
 

      $

 

       63,145,461
  
 

      $

 

       62,488,206
 
Improvements to leased property
 
 
 
      9,154,777
  
 
 
      9,154,777
 
Fixtures and equipment
 
 
 
      519,525
  
 
 
      544,384
 
Land
 
 
 
      6,067,805
  
 
 
      6,067,805
 
Other
 
 
 
      245,387
  
 
 
      227,582
 
Construction in progress
 
 
 
      1,109,538
  
 
 
      634,869
 
 

 

 

 

 

 
 
 
 
      80,242,493
  
 
 
      79,117,623
 
Less accumulated depreciation and amortization
 
 
 
      35,204,996
  
 
 
      33,693,516
 
 

 

 

 

 

Property and equipment-net
 
 
 
      45,037,497
  
 
 
      45,424,107
 
 

 

 

 

 

Current Assets:

 

 

 

 

Cash and cash equivalents (Notes 9 and 10)
 
 
 
      653,719
  
 
 
      1,475,390
 
Marketable securities (Notes 1, 2 and 10)
 
 
 
      49,888
  
 
 
      49,097
 
Receivables (Notes 1 and 6)
 
 
 
      268,501
  
 
 
      171,031
 
Deferred income taxes (Notes 1 and 4)
 
 
 
      360,000
  
 
 
      320,000
 
Security deposits
 
 
 
      257,108
  
 
 
      13,674
 
Prepaid expenses
 
 
 
      1,974,478
  
 
 
      1,833,569
 
 

 

 

 

 

Total current assets
 
 
 
      3,563,694
  
 
 
      3,862,761
 
 

 

 

 

 

Other Assets:

 

 

 

 

Deferred charges (Notes 1 and 11)
 
 
 
      3,348,869
  
 
 
      3,461,708
 
Less accumulated amortization (Notes 1 and 11)
 
 
 
      1,662,701
  
 
 
      1,361,804
 
 

 

 

 

 

Net
 
 
 
      1,686,168
  
 
 
      2,099,904
 
Receivables (Notes 1 and 6)
 
 
 
      181,467
  
 
 
      3,067
 
Security deposits
 
 
 
      1,136,404
  
 
 
      1,428,573
 
Unbilled receivables (Note 1)
 
 
 
      2,476,588
  
 
 
      2,859,076
 
Marketable securities (Notes 1, 2 and 10)
 
 
 
      1,625,552
  
 
 
      1,605,840
 
 

 

 

 

 

Total other assets
 
 
 
      7,106,179
  
 
 
      7,996,460
 
 

 

 

 

 

TOTAL ASSETS
 
 

      $

 

       55,707,370
  
 

      $

 

       57,283,328
 
 

 

 

 

 

See Notes to Consolidated Financial Statements.

4

**Liabilities and Shareholders’ Equity**

 

 

 

 

 

 
 
**2009**
 
      2008

 

Long-Term Debt:

 

 

 

 

Mortgages and term loan payable (Notes 3 and 10)
 
 

      $

 

       8,563,925
  
 

      $

 

       9,513,528
 
Note payable—related party (Notes 10 and 13)
 
 
 
      1,000,000
  
 
 
      1,000,000
 
Security deposits payable (Note 10)
 
 
 
      804,756
  
 
 
      1,102,134
 
Payroll and other accrued liabilities (Note 7)
 
 
 
      —
  
 
 
      268,272
 
 

 

 

 

 

Total long-term debt
 
 
 
      10,368,681
  
 
 
      11,883,934
 
 

 

 

 

 

Deferred Income Taxes (Notes 1 and 4):  
 
 
 
      1,929,000
  
 
 
      1,935,000
 
 

 

 

 

 

Current Liabilities:

 

 

 

 

Accounts payable
 
 
 
      91,403
  
 
 
      39,364
 
Payroll and other accrued liabilities (Note 7)
 
 
 
      1,476,955
  
 
 
      1,785,336
 
Income taxes payable
 
 
 
      346,355
  
 
 
      102,945
 
Other taxes payable
 
 
 
      2,300
  
 
 
      1,891
 
Current portion of mortgages and term loan payable (Notes 3 and 10)
 
 
 
      949,603
  
 
 
      2,067,639
 
Current portion of security deposits payable (Note 10)
 
 
 
      257,108
  
 
 
      13,674
 
 

 

 

 

 

Total current liabilities
 
 
 
      3,123,724
  
 
 
      4,010,849
 
 

 

 

 

 

Total liabilities
 
 
 
      15,421,405
  
 
 
      17,829,783
 
 

 

 

 

 

Shareholders’ Equity:

 

 

 

 

Common stock, par value $1 each share (shares-5,000,000 authorized; 2,178,297 issued)
 
 
 
      2,178,297
  
 
 
      2,178,297
 
Additional paid in capital
 
 
 
      3,346,245
  
 
 
      3,346,245
 
Unrealized (loss) on available-for-sale securities—net of deferred taxes (benefit) of ($30,000) at July 31, 2009 and ($70,000) at July 31, 2008. (Notes 1, 2 and 4)
 
 
 
      (58,078

       )

 
 
 
 
      (134,412

       )

 

Retained earnings
 
 
 
      36,107,353
  
 
 
      35,351,267
 
 

 

 

 

 

 
 
 
 
      41,573,817
  
 
 
      40,741,397
 
Less common stock held in treasury, at cost-162,517 shares at July 31, 2009 and July 31, 2008 (Note 12)
 
 
 
      1,287,852
  
 
 
      1,287,852
 
 

 

 

 

 

Total shareholders’ equity
 
 
 
      40,285,965
  
 
 
      39,453,545
 
 

 

 

 

 

Commitments (Notes 5 and 6) and Contingencies (Note 15)

 

 

 

 

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY
 
 

      $

 

       55,707,370
  
 

      $

 

       57,283,328
 
 

 

 

 

 

See Notes to Consolidated Financial Statements.

5

J.W. MAYS, INC.**Consolidated Statements of Income and Retained Earnings**

 

 

 

 

 

 

 

 

 

 
 
      Years Ended July 31,
 
**2009**
 
      2008
 
      2007

 

 

 

Revenues

 

 

 

 

 

 
 
 

Rental income (Notes 1 and 6)
 
 

      $

 

       16,103,482
  
 

      $

 

       14,572,005
  
 

      $

 

       13,809,879
  
 

Recovery of real estate taxes
 
 
 
      546,418
  
 
 
      91,043
  
 
 
      39,483
  
 

Gain (loss) on disposition of property and equipment
 
 
 
      (5,184

       )

 
 
 
 
      (16,999

       )

 
 
 
 
      4,309,340
  
 

 

 

 

 

 

 

 
 
 

Total revenues
 
 
 
      16,644,716
  
 
 
      14,646,049
  
 
 
      18,158,702
  
 

 

 

 

 

 

 

 
 
 

Expenses

 

 

 

 

 

 
 
 

Real estate operating expenses (Note 5)
 
 
 
      9,224,301
  
 
 
      8,886,483
  
 
 
      8,587,081
  
 

Administrative and general expenses
 
 
 
      3,470,670
  
 
 
      3,455,068
  
 
 
      3,255,094
  
 

Depreciation and amortization (Note 1)
 
 
 
      1,625,016
  
 
 
      1,604,321
  
 
 
      1,582,153
  
 

 

 

 

 

 

 

 
 
 

Total expenses
 
 
 
      14,319,987
  
 
 
      13,945,872
  
 
 
      13,424,328
  
 

 

 

 

 

 

 

 
 
 

Income from operations before investment income (loss), interest expense and income taxes
 
 
 
      2,324,729
  
 
 
      700,177
  
 
 
      4,734,374
  
 

 

 

 

 

 

 

 
 
 

Investment income (loss) and interest expense: 

 

 

 

 

 

 
 
 

Investment income (loss)(Notes 1 and 2)
 
 
 
      (77,877

       )

 
 
 
 
      212,705
  
 
 
      84,094
  
 

Interest expense (Notes 3, 9 and 13)
 
 
 
      (762,766

       )

 
 
 
 
      (883,523

       )

 
 
 
 
      (997,529

       )

 
 
 

 

 

 

 

 

 

 
 
 
 
 
 
      (840,643

       )

 
 
 
 
      (670,818

       )

 
 
 
 
      (913,435

       )

 
 
 

 

 

 

 

 

 

 
 
 

Income before income taxes
 
 
 
      1,484,086
  
 
 
      29,359
  
 
 
      3,820,939
  
 

Income taxes provided (Notes 1 and 4)
 
 
 
      728,000
  
 
 
      105,000
  
 
 
      1,765,000
  
 

 

 

 

 

 

 

 
 
 

Net income (loss)
 
 
 
      756,086
  
 
 
      (75,641

       )

 
 
 
 
      2,055,939
  
 

Retained earnings, beginning of year
 
 
 
      35,351,267
  
 
 
      35,426,908
  
 
 
      33,370,969
  
 

 

 

 

 

 

 

 
 
 

Retained earnings, end of year
 
 

      $

 

       36,107,353
  
 

      $

 

       35,351,267
  
 

      $

 

       35,426,908
  
 

 

 

 

 

 

 

 
 
 

Net income (loss) per common share (Note 1)
 
 

      $

 

       .38
  
 

      $

 

       (.04

       )

 
 
 

      $

 

       1.02
  
 

 

 

 

 

 

 

 
 
 

Dividends per share
 
 

      $

 

      —  
  
 

      $

 

      —  
  
 

      $

 

      —  
  
 

 

 

 

 

 

 

 
 
 

Average common shares outstanding
 
 
 
      2,015,780
  
 
 
      2,015,780
  
 
 
      2,015,780
  
 

 

 

 

 

 

 

 
 
 

See Notes to Consolidated Financial Statements.

**Consolidated Statements of Comprehensive Income**

 

 

 

 

 

 

 

 
 
      Years Ended July 31,
 
**2009**
 
      2008
 
      2007

 

Net income (loss)
 
 

      $

 

       756,086
  
 

      $

 

       (75,641

       )

 
 
 

      $

 

       2,055,939
 
 

 

 

 

 

 

 

Other comprehensive income, net of tax

 

 

 

 

 

 

Unrealized gain (loss) on available-for-sale securities, net of taxes (benefit) of $40,000, ($87,000) and $1,000 for the fiscal years 2009, 2008 and 2007, respectively
 
 
 
      (29,346

       )

 
 
 
 
      (167,660

       )

 
 
 
 
      1,500
 
Reclassification adjustment
 
 
 
      105,680
  
      —
 
      —

 

 

 

 

 

 

 

Net change in comprehensive income
 
 
 
      76,334
  
 
 
      (167,660

       )

 
 
 
 
      1,500
 
 

 

 

 

 

 

 

Comprehensive income (loss)
 
 

      $

 

       832,420
  
 

      $

 

       (243,301

       )

 
 
 

      $

 

       2,057,439
 
 

 

 

 

 

 

 

See Notes to Consolidated Financial Statements.

6

J.W. MAYS, INC.**Consolidated Statements of Cash Flows**

 

 

 

 

 

 

 

 

 

 
 
      Years Ended July 31,
 
**2009**
 
      2008
 
      2007

 

 

 

Cash Flows From Operating Activities

 

 

 

 

 

 
 
 

Net Income (loss)
 
 

      $

 

       756,086
  
 

      $

 

       (75,641

       )

 
 
 

      $

 

       2,055,939
  
 

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

 

 

 

 

 

 
 
 

Deferred income taxes
 
 
 
      (86,000

       )

 
 
 
 
      (419,000

       )

 
 
 
 
      (194,000

       )

 
 
 

Realized loss on marketable securities
 
 
 
      223,881
  
      —
 
      —
 
 

(Gain) loss on disposition of property and equipment
 
 
 
      5,184
  
 
 
      16,999
  
 
 
      (4,309,340

       )

 
 
 

Depreciation and amortization
 
 
 
      1,625,016
  
 
 
      1,604,321
  
 
 
      1,582,153
  
 

Amortization of deferred charges
 
 
 
      413,736
  
 
 
      379,970
  
 
 
      449,701
  
 

Other assets—deferred charges
 
      —
 
 
 
      (288,405

       )

 
 
 
 
      (1,180,695

       )

 
 
 

                         —unbilled receivables
 
 
 
      382,488
  
 
 
      602,071
  
 
 
      743,420
  
 

                         —receivables
 
 
 
      (178,400

       )

 
 
 
 
      1,600
  
 
 
      1,600
  
 

Changes in:

 

 

 

 

 

 
 
 

Receivables
 
 
 
      (97,470

       )

 
 
 
 
      (44,778

       )

 
 
 
 
      (40,054

       )

 
 
 

Prepaid expenses
 
 
 
      (140,909

       )

 
 
 
 
      (130,030

       )

 
 
 
 
      18,683
  
 

Accounts payable
 
 
 
      52,039
  
 
 
      (50,257

       )

 
 
 
 
      27,713
  
 

Payroll and other accrued liabilities
 
 
 
      (576,653

       )

 
 
 
 
      (94,100

       )

 
 
 
 
      878,130
  
 

Income taxes payable
 
 
 
      243,410
  
 
 
      (1,353,613

       )

 
 
 
 
      662,244
  
 

Other taxes payable
 
 
 
      409
  
 
 
      (6,018

       )

 
 
 
 
      2,264
  
 

 

 

 

 

 

 

 
 
 

Net cash provided by operating activities
 
 
 
      2,622,817
  
 
 
      143,119
  
 
 
      697,758
  
 

 

 

 

 

 

 

 
 
 

Cash Flows From Investing Activities

 

 

 

 

 

 
 
 

Acquisition of property and equipment
 
 
 
      (1,243,590

       )

 
 
 
 
      (2,075,060

       )

 
 
 
 
      (901,294

       )

 
 
 

Proceeds from sale of property and equipment
 
      —
 
      —
 
 
 
      4,452,222
  
 

Security deposits
 
 
 
      48,735
  
 
 
      (39,738

       )

 
 
 
 
      (56,312

       )

 
 
 

Marketable securities:

 

 

 

 

 

 
 
 

Receipts from sales or maturities
 
 
 
      176,119
  
      —
 
      —
 
 

Payments for purchases
 
 
 
      (304,169

       )

 
 
 
 
      (1,701,679

       )

 
 
 
 
      (1,476

       )

 
 
 

 

 

 

 

 

 

 
 
 

Net cash provided (used) by investing activities
 
 
 
      (1,322,905

       )

 
 
 
 
      (3,816,477

       )

 
 
 
 
      3,493,140
  
 

 

 

 

 

 

 

 
 
 

Cash Flows From Financing Activities

 

 

 

 

 

 
 
 

Increase (decrease)—security deposits
 
 
 
      (53,944

       )

 
 
 
 
      20,899
  
 
 
      55,812
  
 

Borrowings—mortgage and other debt
 
      —
 
 
 
      41,955
  
 
 
      315,706
  
 

Payments—mortgage and other debt payments
 
 
 
      (2,067,639

       )

 
 
 
 
      (879,456

       )

 
 
 
 
      (932,394

       )

 
 
 

 

 

 

 

 

 

 
 
 

Net cash (used) by financing activities
 
 
 
      (2,121,583

       )

 
 
 
 
      (816,602

       )

 
 
 
 
      (560,876

       )

 
 
 

 

 

 

 

 

 

 
 
 

Net increase (decrease) in cash and cash equivalents
 
 
 
      (821,671

       )

 
 
 
 
      (4,489,960

       )

 
 
 
 
      3,630,022
  
 

Cash and cash equivalents at beginning of year
 
 
 
      1,475,390
  
 
 
      5,965,350
  
 
 
      2,335,328
  
 

 

 

 

 

 

 

 
 
 

Cash and cash equivalents at end of year
 
 

      $

 

       653,719
  
 

      $

 

       1,475,390
  
 

      $

 

       5,965,350
  
 

 

 

 

 

 

 

 
 
 

See Notes to Consolidated Financial Statements.

7

J.W. MAYS, INC.**Notes to Consolidated Financial Statements**

**1. Summary of Significant Accounting Policies:**

CONSOLIDATION: The consolidated financial statements include the accounts of the Company, a New York corporation and its subsidiaries, which are wholly-owned. Material intercompany items have been eliminated in consolidation.

ACCOUNTING RECORDS AND USE OF ESTIMATES: The accounting records are maintained in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The preparation of the Company’s financial statements in accordance with GAAP requires management to  make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements, the disclosure of contingent assets and liabilities, and the reported amounts of revenues and expenses during the reporting period. The estimates that we make include allowance  for doubtful accounts, depreciation and amortization, income tax assets and liabilities, fair value of marketable securities and revenue recognition. Estimates are based on historical experience where applicable or other assumptions that management believes are reasonable under the circumstances. Due to  the inherent uncertainty involved in making estimates, actual results may differ from those estimates under different assumptions or conditions.

RENTAL INCOME: All of the real estate owned by the Company is held for leasing to tenants except for a small portion used for Company offices. Rent is recognized from tenants under executed leases no later than on an established date or on an earlier date if the tenant should commence conducting  business. Unbilled receivables represent the excess of scheduled rental income recognized on a straight-line basis over rental income as it becomes receivable according to the provisions of the lease. Contingent rental income is recorded when earned and is not based on tenant revenue. Based upon its  periodic assessment of the quality of the receivables, management, using its historical knowledge of the tenants and industry experience, determines whether a reserve or write-off is required.

MARKETABLE SECURITIES: The Company categorizes marketable securities as either trading, available-for-sale or held-to-maturity. Trading securities are carried at fair value with unrealized gains and losses included in income. Available-for-sale securities are carried at fair value measurements using  quoted prices in active markets for identical assets or liabilities (which is considered a Level 1 valuation) with unrealized gains and losses recorded as a separate component of shareholders’ equity. Held-to-maturity securities are carried at amortized cost. Dividends and interest income are accrued as  earned. Realized gains and losses are determined on a specific identification basis. The Company reviews marketable securities for impairment whenever circumstances and situations change such that there is an indication that the carrying amounts may not be recovered. The Company did not classify any  securities as trading during the three years ended July 31, 2009. The implementation of Statement of Financial Accounting Standards No. 157, Fair Value Measurements, had no impact on the presentation of marketable securities in the Company’s financial statements. The Company does not have any assets  valued, using Levels 2 or 3 valuation methods. During 2009, the Company adopted FASB Staff Position 115-2 (FSP), Recognition and Presentation of Other-Than-Temporary Impairments. The implementation of this did not have an impact on the Company’s financial statements.

PROPERTY AND EQUIPMENT: Property and equipment are stated at cost. Depreciation is calculated using the straight-line method and the declining-balance method. Amortization of improvements to leased property is calculated over the shorter of the life of the lease or the estimated useful life of the  improvements. Lives used to determine depreciation and amortization are generally as follows:

 

 

 

Buildings and improvements
 
 
 
      18-40 years
 
Improvements to leased property
 
 
 
      3-40 years
 
Fixtures and equipment
 
 
 
      7-12 years
 
Other
 
 
 
      3-5 years
 
Maintenance, repairs, renewals and improvements of a non-permanent nature are charged to expense when incurred. Expenditures for additions and major renewals or improvements are capitalized along with the associated interest cost during construction. The cost of assets sold or retired and the  accumulated depreciation or amortization thereon are eliminated from the respective accounts in the year of disposal, and the resulting gain or loss is credited or charged to income. Capitalized interest is recorded as part of the asset to which it relates and is amortized over the asset’s estimated useful life.

8

** **

The Company reviews long-lived assets for impairment whenever circumstances and situations change such that there is an indication that the carrying amounts may not be recovered. At July 31, 2009 and 2008, there were no impairments of its property and equipment.

COMPREHENSIVE INCOME: Statement of Financial Accounting Standards (“SFAS”) No. 130, “Reporting Comprehensive Income”, establishes standards for the reporting of comprehensive income and its components. It requires all items that are required to be recognized as components of  comprehensive income be reported in a financial statement that is displayed with the same prominence as other income statement information.

Comprehensive income is defined to include all changes in equity except those resulting from investments by and distributions to shareholders.

DEFERRED CHARGES: Deferred charges consist principally of costs incurred in connection with the leasing of property to tenants. Such costs are amortized over the related lease periods, ranging from 1 to 21 years, using the straight-line method.

INCOME TAXES: Deferred income taxes are provided for the temporary differences between the financial reporting basis and the tax basis of the Company’s assets and liabilities. Deferred tax assets result principally from the recording of certain accruals and reserves which currently are not deductible  for tax purposes. Deferred tax liabilities result principally from temporary differences in the recognition of gains and losses from certain investments and from the use, for tax purposes, of accelerated depreciation.

INCOME PER SHARE OF COMMON STOCK: Income per share has been computed by dividing net income for the year by the weighted average number of shares of common stock outstanding during the year, adjusted for the purchase of treasury stock. Shares used in computing income per share  were 2,015,780 in fiscal years 2009, 2008 and 2007.

RECENT ACCOUNTING PRONOUNCEMENTS: In May 2009, the FASB issued Statement of Accounting Standards No. 165, Subsequent Events, which establishes general standards of accounting for and disclosure of events that occur after the balance sheet date but before financial statements are  issued or are available to be issued and requires the disclosure of the date through which we have evaluated subsequent events and the basis for that date. This pronouncement is effective for interim or annual periods ending after June 15, 2009 and does apply to this fiscal year ending July 31, 2009.

In July 2009, the FASB, in an effort to codify all authoritative accounting guidance related to a particular topic in a single place, issued Statement of Financial Account Standards No. 168 (“FAS 168”), “The FASB Accounting Standard Codification and the Hierarchy of Generally Accepted Accounting  Principles, a replacement of FASB Statement No. 162.” It replaces the U.S. generally accepted accounting principles (“U.S. GAAP”) hierarchy created by Statement of Financial Accounting Standards No. 162, “The Hierarchy of Generally Accepted Accounting Principles,” by establishing only two levels of  generally accepted accounting principles: authoritative and non authoritative. All authoritative guidance will carry the same level of authority. The statement is effective for financial statements issued for interim and annual periods ending after September 15, 2009. The adoption of FAS 168 will not have an  impact on our financial position or results of operations.

9

** **

**2. Marketable Securities:**

As of July 31, 2009 and 2008, the Company’s marketable securities were classified as follows:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
 
**2009**
 
      2008
 
**Cost**
 
**GrossUnrealizedGains**
 
**GrossUnrealizedLosses**
 
**FairValue**
 
      Cost
 
      GrossUnrealizedGains
 
      GrossUnrealizedLosses
 
      FairValue

Current:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Held-to-Maturity:Certificate of deposit
 
 

      $

 

       49,888
  
 

      $

 

      —
  
 

      $

 

      —
  
 

      $

 

       49,888
  
 

      $

 

       49,097
  
 

      $

 

      —
  
 

      $

 

      —
  
 

      $

 

       49,097
 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-current:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Available-for-sale: CorporateEquity securities
 
 

      $

 

       1,410,252
  
 

      $

 

       52,810
  
 

      $

 

       140,888
  
 

      $

 

       1,322,174
  
 

      $

 

       1,810,252
  
 

      $

 

       49,268
  
 

      $

 

       253,680
  
 

      $

 

       1,605,840
 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Held-to-Maturity:Corporate Debt Securities
 
 

      $

 

       303,378
  
 

      $

 

      —
  
 

      $

 

       4,173
  
 

      $

 

       299,205
  
 

      $

 

      —
  
 

      $

 

      —
  
 

      $

 

      —
  
 

      $

 

      —
 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The Company’s debt and equity securities gross unrealized losses and fair value, aggregated by investment category and length of time that the investment securities have been in a continuous unrealized loss position, at July 31, 2009 are as follows. These investment securities are considered to be  temporarily impaired because, if held to maturity, the Company should not incur any losses. All of our investments in corporate debt securities mature in the 1-5 year time frame.

 

 

 

 

 

 

 

 
 
**Fair Value**
 
      Less Than 12Months
 
      More than 12Months

Corporate Equity Securities
 
 

      $

 

       1,322,174
  
 

      $

 

 —  
  
 

      $

 

       140,888
 
Corporate Debt Securities
 
 
 
      299,205
  
 
 
      4,173
  
      —

 

 

 

 

 

 

 
 
 

      $

 

       1,621,379
  
 

      $

 

       4,173
  
 

      $

 

       140,888
 
 

 

 

 

 

 

 

Investment income for the years ended July 31, 2009, 2008 and 2007 consists of the following:

 

 

 

 

 

 

 

 
 
**2009**
 
      2008
 
      2007

Interest income
 
 

      $

 

       17,029
  
 

      $

 

       97,301
  
 

      $

 

       26,294
 
Dividend income
 
 
 
      128,975
  
 
 
      115,404
  
 
 
      57,800
 
(Loss) on sale of marketable securities
 
 
 
      (223,881

       )

 
 
      —
 
      —

 

 

 

 

 

 

 

Total
 
 

      $

 

       (77,877

       )

 
 
 

      $

 

       212,705
  
 

      $

 

       84,094
 
 

 

 

 

 

 

 

**3. Long-Term Debt—Mortgages and Term Loan:**

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
   
      CurrentAnnualInterestRate
 
      FinalPaymentDate
 
**July 31, 2009**
 
      July 31, 2008
 
**DueWithinOne Year**
 
**DueAfterOne Year**
 
      DueWithinOne Year
 
      DueAfterOne Year

Mortgages:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Jamaica, New York property
 
 
 
      (a

       )

 
 
 
 
      6

       %

 
 
 
 
      4/01/12
  
 

      $

 

       65,786
  
 

      $

 

       1,155,387
  
 

      $

 

       61,964
  
 

      $

 

       1,221,173
 
Jamaica, New York property
 
 
 
      (b

       )

 
 
 
 
      6.81

       %

 
 
 
 
      10/01/11
  
 
 
      128,856
  
 
 
      2,251,859
  
 
 
      120,396
  
 
 
      2,380,715
 
Jowein building, Brooklyn, NY
 
 
 
      (c

       )

 
 
 
 
      9

       %

 
 
 
 
      4/01/09
  
      —
 
      —
 
 
 
      1,103,520
  
      —

Fishkill, New York property
 
 
 
      (d,e

       )

 
 
 
 
      6.98

       %

 
 
 
 
      2/18/15
  
 
 
      62,453
  
 
 
      1,691,509
  
 
 
      58,199
  
 
 
      1,753,961
 
Bond St. building, Brooklyn, NY
 
 
 
      (e

       )

 
 
 
 
      6.98

       %

 
 
 
 
      2/18/15
  
 
 
      127,202
  
 
 
      3,445,170
  
 
 
      118,535
  
 
 
      3,572,373
 
Term-loan payable to bank
 
 
 
      (f

       )

 
 
 
 
      6.50

       %

 
 
 
 
      5/01/10
  
 
 
      325,306
  
      —
 
 
 
      365,025
  
 
 
      325,306
 
Jowein building, Brooklyn, NY
 
 
 
      (g

       )

 
 
      Variable
 
 
 
      8/01/10
  
 
 
      240,000
  
 
 
      20,000
  
 
 
      240,000
  
 
 
      260,000
 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

 

 

 

 

 
 
 

      $

 

       949,603
  
 

      $

 

       8,563,925
  
 

      $

 

       2,067,639
  
 

      $

 

       9,513,528
 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(a) The Company, on September 11, 1996, closed a loan with a bank in the amount of $4,000,000. The loan is secured by a first mortgage lien covering the entire leasehold interest of the Company, as tenant, in a certain

10

** **

ground lease and building in the Jamaica, New York property. In March, 2007, the Company extended the loan for five years with an option for an additional five-year period. The interest rate for the extended period is 6.00% per annum. Interest and amortization of principal will be made in constant monthly  amounts based on a fifteen year (15) payout period. The outstanding balance of the loan totaling $1,036,602 will become due and payable on April 1, 2012.

(b) The Company, on December 13, 2000, closed a loan with a bank in the amount of $3,500,000. The loan is secured by a second position leasehold mortgage covering the entire leasehold interest of the Company, as tenant, in a certain ground lease and building in the Jamaica, New York property. The  outstanding balance of the loan, totaling $2,739,452 became due and payable on October 1, 2006. The Company exercised its option to extend the loan for an additional five (5) years to October 1, 2011. The interest rate for the extended period is 6.81% per annum. At the end of the five year period, there will  be a balance due on the loan of $2,077,680.

As additional collateral security, the Company conditionally assigned to the bank all leases and rents on the premises, or portions thereof, whether now existing or hereafter consummated. The Company has an option to prepay principal, in whole or in part, plus interest accrued thereon, at any time during  the term, without premium or penalty. Other provisions of the loan agreement provide certain restrictions on the incurrence of indebtedness on the Jamaica property and the sale or transfer of the Company’s ground lease interest in the premises.

(c) The Company, on May 7, 2004, closed a loan with an affiliated corporation owned by members, including certain directors of the Company, of the family of the late Joe Weinstein, former Chairman of the Board of Directors, in the amount of $1,350,000. The term of the loan was for a period of five (5)  years at an interest rate of 9.00% per annum. Interest and amortization of principal were paid quarterly based on a fifteen (15) year level amortization period. The constant quarterly payments of interest and principal were $40,316. The outstanding balance of the loan, totaling $764,648, became due and  payable on April 1, 2009. On September 22, 2008, the Company made a payment in the amount of $300,000, which was a partial payment towards the principal amount of the loan and accrued interest to date and in March 2009 the Company paid the balance of the loan in the amount of $764,648. Interest  paid for the years ended July 31, 2009, 2008 and 2007 was $48,148, $102,211, and $107,239, respectively.

(d) On August 19, 2004 the Company extended the then existing loan for forty-two (42) months, with an option to convert the loan to a seven (7) year permanent mortgage loan. (See Note 3(e) below). The Company, in February 2008, converted the loan to a seven (7) year permanent mortgage loan. The  interest rate on conversion was 6.98%.

(e) The Company, on August 19, 2004, closed a loan with a bank for a $12,000,000 multiple draw term loan. This loan finances seventy-five (75%) percent of the cost of capital improvements for an existing lease to a tenant and capital improvements for future tenant leases at the Company’s Brooklyn,  New York (Bond Street building) and Fishkill, New York properties. The loan will also finance $850,000 towards the construction of two new elevators at the Company’s Brooklyn, New York property (Bond Street building). The Company had three and one-half years to draw down amounts under this loan. The  loan consists of: a) a permanent, first mortgage loan to refinance an existing first mortgage loan affecting the Fishkill Property, which matured on July 1, 2004 (the “First Permanent Loan”)(see Note 3(d)), b) a permanent subordinate mortgage loan in the amount of $1,870,000 (the “Second Permanent Loan”),  and c) multiple, successively subordinate loans in the amount $8,295,274 (“Subordinate Building Loans”). The loan is structured in two phases: 1) a forty-two (42) month loan with payments of interest only at the floating one–month LIBOR rate plus 2.25% per annum, but not less than 3.40%; and 2) after the  forty-two month period, the loan would convert to a seven-year (7) permanent mortgage loan on a seventeen (17) year level amortization, plus interest, at the option of the Company. The interest rate on the permanent loan would be at a fixed rate equal to the Federal Home Loan Bank of New York’s seven-year  (7) fixed interest rate plus 2.25% per annum at the time of conversion. As of August 19, 2004, the Company refinanced the existing mortgage on the Company’s Fishkill, New York property, which balance was $1,834,726 and took down an additional $2,820,000 for capital improvements for two tenants at the  Company’s Bond Street building in Brooklyn, New York. In fiscal 2006, 2007 and 2008, the Company drew down additional amounts totaling $916,670, on its multiple draw term loan to finance tenant improvements and brokerage commissions for

11

** **

the leasing of 13,026 square feet for office use at the Company’s Bond Street building in Brooklyn, New York. The Company in February 2008 converted the loan to a seven (7) year permanent mortgage loan. The interest rate on conversion was 6.98%. Since the loan has been converted to a permanent  mortgage loan, the balance of the financing on this loan is for the new elevators at the Company’s Bond Street building in Brooklyn, New York in the amount of $850,000 referred to above. As of July 31, 2009, the Company has not drawn down any of the $850,000. The $850,000 is available until the elevator  work is completed. The monthly payments to the bank will increase once the $850,000 is drawn down. On September 17, 2009, the Company drew down $751,500 of the $850,000 elevator loan.

(f) On February 18, 2005, the Company secured financing in the amount of $1,700,000, from a bank whose president is a director of the Company. The loan is a multiple draw loan, for a period of five (5) years, and is self-amortizing, at an interest rate of 6.50% per annum. Interest paid for the years ended  July 31, 2009, 2008 and 2007 was $32,147, $55,183 and $76,773, respectively.

(g) The Company, on July 22, 2005, closed a loan with a bank for $1,200,000. The loan was used to finance the construction costs and brokerage commissions associated with the leasing of 15,000 square feet for office use to a tenant at the Company’s Jowein building in Brooklyn, New York. The loan is  secured by the assignment of the lease of 15,000 square feet. The loan is for a period of five (5) years and is self-amortizing, at a floating interest rate of prime plus 1.00% per annum. The interest rate at July 31, 2009 was 4.25% per annum.

Maturities of long-term debt-mortgages and term loan payable outstanding at July 31, 2009, are as follows: Years ending July 31, 2010 (included in current liabilities); $949,603; 2011; $431,275; 2012; $3,417,893; 2013; $234,368; 2014; and thereafter, $4,480,389.

The carrying value of all properties collateralizing to above debt is $32,558,255 at July 31, 2009.

**4. Income Taxes:**

Significant components of the Company’s deferred tax assets and liabilities as of July 31, 2009 and 2008 are a result of temporary differences related to the items described as follows:

 

 

 

 

 

 

 

 

 

 
 
**2009**
 
      2008
 
**DeferredTax Assets**
 
**DeferredTax Liabilities**
 
      DeferredTax Assets
 
      DeferredTax Liabilities

Rental income received in advance
 
 

      $

 

       165,886
  
 

      $

 

 —  
  
 

      $

 

       277,719
  
 

      $

 

 —  
 
Unbilled receivables
 
      —
 
 
 
      842,040
  
      —
 
 
 
      972,086
 
Property and equipment
 
      —
 
 
 
      1,113,218
  
      —
 
 
 
      1,032,461
 
Unrealized gain on marketable securities
 
 
 
      29,947
  
      —
 
 
 
      69,500
  
      —

Other
 
 
 
      190,425
  
      —
 
 
 
      42,328
  
      —

 

 

 

 

 

 

 

 

 

 
 
 

      $

 

       386,258
  
 

      $

 

       1,955,258
  
 

      $

 

       389,547
  
 

      $

 

       2,004,547
 
 

 

 

 

 

 

 

 

 

The Company has determined, based on its history of operating earnings and expectations for the future, that it is more likely than not that future taxable income will be sufficient to fully utilize the deferred tax assets at July 31, 2009.

Income taxes provided for the years ended July 31, 2009, 2008 and 2007 consist of the following:

 

 

 

 

 

 

 

 
 
**2009**
 
      2008
 
      2007

Current:

 

 

 

 

 

 

Federal
 
 

      $

 

       475,000
  
 

      $

 

       342,400
  
 

      $

 

       1,238,771
 
State and City
 
 
 
      277,000
  
 
 
      181,600
  
 
 
      720,229
 
Prior:

 

 

 

 

 

 

State and City
 
 
 
      62,000
  
      —
 
      —

Deferred taxes (benefit)
 
 
 
      (86,000

       )

 
 
 
 
      (419,000

       )

 
 
 
 
      (194,000

       )

 

 

 

 

 

 

 

 

Total provision
 
 

      $

 

       728,000
  
 

      $

 

       105,000
  
 

      $

 

       1,765,000
 
 

 

 

 

 

 

 

12

** **

Components of the deferred tax provision (benefit) for the years ended July 31, 2009, 2008 and 2007 consist of the following:

 

 

 

 

 

 

 

 
 
**2009**
 
      2008
 
      2007

Book depreciation over (under) tax depreciation
 
 

      $

 

       87,557
  
 

      $

 

       (23,961

       )

 
 
 

      $

 

       56,658
 
Reduction (increase) of rental income received in advance
 
 
 
      111,833
  
 
 
      (172,382

       )

 
 
 
 
      13,496
 
(Decrease) in unbilled receivables
 
 
 
      (130,046

       )

 
 
 
 
      (204,704

       )

 
 
 
 
      (252,763

       )

 

Other
 
 
 
      (155,344

       )

 
 
 
 
      (17,953

       )

 
 
 
 
      (11,391

       )

 

 

 

 

 

 

 

 
 
 

      $

 

       (86,000

       )

 
 
 

      $

 

       (419,000

       )

 
 
 

      $

 

       (194,000

       )

 

 

 

 

 

 

 

 

Taxes provided for the years ended July 31, 2009, 2008 and 2007 differ from amounts which would result from applying the federal statutory tax rate to pre-tax income, as follows:

 

 

 

 

 

 

 

 
 
**2009**
 
      2008
 
      2007

Income before income taxes
 
 

      $

 

       1,541,311
  
 

      $

 

       29,358
  
 

      $

 

       3,820,939
 
Dividends received deduction
 
 
 
      (48,983

       )

 
 
 
 
      (80,782

       )

 
 
 
 
      (40,460

       )

 

Other-net
 
 
 
      (4,800

       )

 
 
 
 
      (2,700

       )

 
 
 
 
      (2,600

       )

 

 

 

 

 

 

 

 

Adjusted pre-tax income
 
 

      $

 

       1,487,528
  
 

      $

 

       (54,124

       )

 
 
 

      $

 

       3,777,879
 
 

 

 

 

 

 

 

Statutory rate
 
 
 
      34%
  
 
 
      34%
  
 
 
      34%
 
Income tax provision at statutory rate
 
 
 
      506,000
  
 
 
      (18,072

       )

 
 
 
 
      1,282,480
 
State and City income taxes, net of federal income tax benefit
 
 
 
      222,000
  
 
 
      123,072
  
 
 
      482,520
 
 

 

 

 

 

 

 

Income tax provision
 
 

      $

 

       728,000
  
 

      $

 

       105,000
  
 

      $

 

       1,765,000
 
 

 

 

 

 

 

 

The Company records interest and penalties relating to its tax returns and provisions as interest expense and administrative and general expenses, respectively.

The Company’s tax returns through the year ended July 31, 2006 have been audited by the various taxing authorities.

**5. Leases:**

The Company’s real estate operations encompass both owned and leased properties. The current leases on leased property, most of which have options to extend the terms, range from 1 year to 22 years. Certain of the leases provide for additional rentals under certain circumstances and obligate the  Company for payments of real estate taxes and other expenses.

Rental expense for leased real property for each of the three fiscal years in the period ended July 31, 2009 was exceeded by sublease rental income, as follows:

 

 

 

 

 

 

 

 
 
**2009**
 
      2008
 
      2007

Minimum rental expense
 
 

      $

 

       2,000,787
  
 

      $

 

       2,000,673
  
 

      $

 

       1,801,414
 
Contingent rental expense
 
 
 
      1,766,361
  
 
 
      1,550,313
  
 
 
      1,349,508
 
 

 

 

 

 

 

 
 
 
 
      3,767,148
  
 
 
      3,550,986
  
 
 
      3,150,922
 
Sublease rental income
 
 
 
      7,807,957
  
 
 
      7,660,825
  
 
 
      6,985,512
 
 

 

 

 

 

 

 

Excess of sublease income over expense
 
 

      $

 

       4,040,809
  
 

      $

 

       4,109,839
  
 

      $

 

       3,834,590
 
 

 

 

 

 

 

 

Rent expense related to an affiliate principally owned by certain directors of the Company totaled $825,000 for fiscal years ended July 31, 2009, 2008 and 2007. Rent expense is recognized on a straight-line basis over the lives of the leases.

13

** **

Future minimum non-cancelable rental commitments for operating leases with initial or remaining terms of one year or more are payable as follows:

 

 

 

      Fiscal Year
 
**OperatingLeases**

2010
 
 

      $

 

       2,097,949
 
2011
 
 
 
      1,742,259
 
2012
 
 
 
      1,729,116
 
2013
 
 
 
      1,729,116
 
2014
 
 
 
      1,717,755
 
After 2014
 
 
 
      24,429,731
 
 

 

 

Total required*
 
 

      $

 

       33,445,926
 
 

 

 

 

      *
 
 
 
      Minimum payments have not been reduced by minimum sublease rentals of $37,955,215 under operating leases due in the future under non-cancelable leases.
**6. Rental Income:**

Rental income for each of the fiscal years 2009, 2008 and 2007 is as follows:
 
 

 

 

 

 

 

 
 
      July 31,
 
**2009**
 
      2008
 
      2007

Minimum rentals

 

 

 

 

 

 

Company owned property
 
 

      $

 

       7,672,673
  
 

      $

 

       6,423,034
  
 

      $

 

       6,319,755
 
Leased property
 
 
 
      7,043,384
  
 
 
      6,858,020
  
 
 
      6,103,279
 
 

 

 

 

 

 

 

 
 
 
 
      14,716,057
  
 
 
      13,281,054
  
 
 
      12,423,034
 
 

 

 

 

 

 

 

Contingent rentals

 

 

 

 

 

 

Company owned property
 
 
 
      622,852
  
 
 
      488,146
  
 
 
      504,612
 
Leased property
 
 
 
      764,573
  
 
 
      802,805
  
 
 
      882,233
 
 

 

 

 

 

 

 

 
 
 
 
      1,387,425
  
 
 
      1,290,951
  
 
 
      1,386,845
 
 

 

 

 

 

 

 

Total 
 
 

      $

 

       16,103,482
  
 

      $

 

       14,572,005
  
 

      $

 

       13,809,879
 
 

 

 

 

 

 

 

Future minimum non-cancelable rental income for leases with initial or remaining terms of one year or more is as follows:

 

 

 

 

 

 

 

      Fiscal Year
 
**CompanyOwned Property**
 
**LeasedProperty**
 
**Total**

2010
 
 

      $

 

       7,059,241
  
 

      $

 

       6,784,949
  
 

      $

 

       13,844,190
 
2011
 
 
 
      5,974,643
  
 
 
      4,870,260
  
 
 
      10,844,903
 
2012
 
 
 
      5,372,269
  
 
 
      3,840,047
  
 
 
      9,212,316
 
2013
 
 
 
      5,207,009
  
 
 
      3,467,626
  
 
 
      8,674,635
 
2014
 
 
 
      4,579,217
  
 
 
      3,041,849
  
 
 
      7,621,066
 
After 2014
 
 
 
      24,303,478
  
 
 
      15,950,484
  
 
 
      40,253,962
 
 

 

 

 

 

 

 

Total
 
 

      $

 

       52,495,857
  
 

      $

 

       37,955,215
  
 

      $

 

       90,451,072
 
 

 

 

 

 

 

 

Rental income is recognized on a straight-line basis over the lives of the leases.

14

** **

**7. Payroll and Other Accrued Liabilities:**

Payroll and other accrued liabilities for the fiscal years ended July 31, 2009, and 2008 consist of the following:

 

 

 

 

 

 
 
**2009**
 
      2008

Payroll
 
 

      $

 

       121,233
  
 

      $

 

       98,024
 
Interest
 
 
 
      64,034
  
 
 
      77,936
 
Professional fees
 
 
 
      101,737
  
 
 
      143,526
 
Rents received in advance
 
 
 
      510,976
  
 
 
      816,821
 
Utilities
 
 
 
      39,600
  
 
 
      36,100
 
Brokers commissions
 
 
 
      34,139
  
 
 
      471,792
 
Construction costs
 
 
 
      221,600
  
 
 
      145,200
 
Other
 
 
 
      383,636
  
 
 
      264,209
 
 

 

 

 

 

Total
 
 

      $

 

       1,476,955
  
 

      $

 

       2,053,608
 
 

 

 

 

 

**8. Employees’ Retirement Plan:**

The Company contributes to a union sponsored multi-employer pension plan covering its union employees. The Pension Plan contributions to the plan for the years ended July 31, 2009, 2008 and 2007 were $20,168, $20,380 and $16,545 respectively. The Company also contributes to union sponsored  health benefit plans.

The Company sponsors a non-contributory Money Purchase Plan covering substantially all of its non-union employees. Operations were charged $311,539, $300,368 and $266,506 as contributions to the Plan for fiscal years 2009, 2008 and 2007, respectively.

**9. Cash Flow Information:**

For purposes of reporting cash flows, the Company considers cash equivalents to consist of short-term highly liquid investments with maturities of three months or less, which are readily convertible into cash.

Supplemental disclosures:

 

 

 

 

 

 

 

 
 
      July 31,
 
**2009**
 
      2008
 
      2007

Interest paid, net of capitalized interest of $65,745 (2009) $55,833 (2008) and $19,684 (2007)
 
 

      $

 

       745,668
  
 

      $

 

       893,030
  
 

      $

 

       1,015,254
 
Income taxes paid
 
 

      $

 

       601,587
  
 

      $

 

       1,837,616
  
 

      $

 

       1,296,928
 
**10. Financial Instruments and Credit Risk Concentrations:**

The following disclosure of estimated fair value was determined by the Company using available market information and appropriate valuation methods. Considerable judgment is necessary to develop estimates of fair value. The estimates presented herein are not necessarily indicative of the amounts  that could be realized upon disposition of the financial instruments.

The Company estimates the fair value of its financial instruments using the following methods and assumptions: (i) quoted market prices, when available, are used to estimate the fair value of investments in marketable debt and equity securities; (ii) discounted cash flow analyses are used to estimate the  fair value of long-term debt, using the Company’s estimate of current interest rates for similar debt; and (iii) carrying amounts in the balance sheet approximate fair value for cash and cash equivalents and tenant security deposits due to their high liquidity.

15

** **

 

 

 

 

 

 
 
**July 31, 2009**
 
**CarryingValue**
 
**FairValue**

Cash and cash equivalents
 
 

      $

 

       653,719
  
 

      $

 

       653,719
 
Marketable securities
 
 

      $

 

       1,675,440
  
 

      $

 

       1,671,267
 
Security deposits payable
 
 

      $

 

       1,061,864
  
 

      $

 

       1,061,864
 
Mortgages, notes and term loan payable
 
 

      $

 

       10,513,528
  
 

      $

 

       12,135,125
 
Financial instruments that are potentially subject to concentrations of credit risk consist principally of marketable securities, cash and cash equivalents and receivables. Marketable securities and cash and cash equivalents are placed with multiple financial institutions and instruments to minimize risk. No  assurance can be made that such financial institutions and instruments will minimize all such risk.

The Company derives rental income from fifty-seven tenants, of which one tenant accounted for 16.16% and another tenant accounted for 13.19% of rental income during the year ended July 31, 2009. No other tenant accounted for more than 10% of rental income during the year ended July 31, 2009.

The Company has three irrevocable letters of credit totaling $367,500 at July 31, 2009 and July 31, 2008 provided by three tenants.

**11. Deferred Charges:**

Deferred charges for the fiscal years ended July 31, 2009 and 2008 consist of the following:

 

 

 

 

 

 

 

 

 

 
 
**July 31, 2009**
 
**July 31, 2008**
 
**Gross CarryingAmount**
 
**AccumulatedAmortization**
 
**Gross CarryingAmount**
 
**AccumulatedAmortization**

Leasing brokerage commissions
 
 

      $

 

       2,246,242
  
 

      $

 

       923,594
  
 

      $

 

       2,269,914
  
 

      $

 

       655,424
 
Professional fees for leasing
 
 
 
      341,956
  
 
 
      188,154
  
 
 
      431,123
  
 
 
      197,871
 
Financing costs
 
 
 
      760,671
  
 
 
      550,953
  
 
 
      760,671
  
 
 
      508,509
 
 

 

 

 

 

 

 

 

 

Total
 
 

      $

 

       3,348,869
  
 

      $

 

       1,662,701
  
 

      $

 

       3,461,708
  
 

      $

 

       1,361,804
 
 

 

 

 

 

 

 

 

 

The aggregate amortization expense for the three years in the period ended July 31, 2009 was $413,736, $379,970 and $449,701, respectively.

The estimated aggregate amortization expense for each of the five succeeding fiscal years is as follows:

 

 

 

**Fiscal Year**

 

 

2010
 
 

      $

 

       363,334
 
2011
 
 

      $

 

       294,852
 
2012
 
 

      $

 

       205,975
 
2013
 
 

      $

 

       195,001
 
2014
 
 

      $

 

       189,186
 
**12. Capitalization:**

The Company is capitalized entirely through common stock with identical voting rights and rights to liquidation. Treasury stock is recorded at cost and consists of 162,517 shares at July 31, 2009 and at July 31, 2008.

**13. Note Payable:**

On December 15, 2004, the Company borrowed $1,000,000 from a former director of the Company, who is also a greater than 10% beneficial owner of the outstanding common stock of the Company. The term of the loan

16

** **

was for a period of three (3) years maturing on December 15, 2007, at an interest rate of 7.50% per annum. The loan is unsecured. The note is prepayable in whole or in part at any time without penalty. The funds were used towards the purchase of a one-half interest in a parcel which is part of the Company’s  Brooklyn, New York properties. The total purchase price was $1,500,000. The constant quarterly payments of interest are $18,750. The Company extended the note for an additional three (3) years maturing on December 15, 2010, at an interest rate of 7.50% per annum. The interest paid for each of the years  ended July 31, 2009, 2008 and 2007 was $75,000.

**14. Related Party Transactions:**

In the years ended July 31, 2009, 2008 and 2007, Holland & Knight LLP, a law firm in which Lance D. Myers, a member of our Board of Directors, is a partner, performed legal services for us for which it was paid $303,020, $195,540, and $158,997, respectively.

**15. Contingencies:**

There are various lawsuits and claims pending against the Company. It is the opinion of management that the resolution of these matters will not have a material adverse effect on the Company’s Consolidated Financial Statements, except for the matter described below the Company is unable to predict  the outcome of the matter.

In response to a termination notice that the Company received concerning its tenancy in a portion of the Jowein Building, Brooklyn, New York, on April 25, 2007, the Company filed a lawsuit against its landlords in New York State Supreme Court, Kings County. In the lawsuit, the Company seeks a  judgment declaring that the landlord’s termination notice was improperly issued and that the Company is not required to correct or cure the purported defaults cited in the termination notice. In addition, the Company seeks an order temporarily, preliminarily and permanently enjoining the landlords from taking  any action to terminate the lease or otherwise interfere with the Company’s possession of the premises.

On May 16, 2007, the New York State Supreme Court granted the Company’s motion for preliminary injunctive relief and enjoined the landlords, during the pendency of this action, from taking any action to evict the Company, terminate the Company’s lease which is scheduled to expire on April 30, 2010,  and/or commencing summary action adverse to the Company’s rights or otherwise disturb the Company’s possession of the premises. The landlords have answered the complaint denying the allegations and asserting counterclaims against the Company relating to the premises. Discovery has been  completed and a trial date has been scheduled for October 19, 2009, but it is likely that the trial will be adjourned until November 2009. Management of the Company is unable to predict the outcome of this matter or whether the Company will be required to expend significant amounts of money in order to  correct any of the purported defaults.

If the lease is not renewed prior to expiration, the Company is committed to return the premises in the condition the Company received it, taking into account normal wear and tear on the building. At this time the Company is only able to estimate this cost at a range between $700,000 and $1,200,000.

**16. Subsequent events:**

The Company evaluated events occurring between the end of its most recent fiscal year and October 8, 2009, the date the financial statements were issued.

17

J.W. MAYS, INC.

**Report of Management**

Management is responsible for the preparation and reliability of the financial statements and the other financial information in this Annual Report. Management has established systems of internal control over financial reporting designed to provide reasonable assurance that the financial records used for  preparing financial statements are reliable and reflect the transactions of the Company and that established policies and procedures are carefully followed. The Company reviews, modifies and improves its system of internal controls in response to changes in operations.

The Board of Directors, acting through the Audit Committee, which is comprised solely of independent directors who are not employees of the Company, oversees the financial reporting process. The financial statements have been prepared in accordance with accounting standards generally accepted  in the United States of America and include amounts based on judgments and estimates made by management. Actual results could differ from estimated amounts.

To ensure complete independence, D’Arcangelo & Co., LLP, the independent registered public accounting firm, has full and free access to meet with the Audit Committee, without management representatives present, to discuss results of the audit, the adequacy of internal controls and the quality of  financial reporting.

**Report of Independent Registered Public Accounting Firm**

To the Board of Directors and ShareholdersJ.W. Mays, Inc. and Subsidiaries

We have audited the accompanying consolidated balance sheets of J.W. Mays, Inc. and subsidiaries as of July 31, 2009 and 2008, and the related consolidated statements of income and retained earnings, comprehensive income, and cash flows for each of the three years in the period ended July 31,  2009. J.W. Mays Inc. and subsidiaries management is responsible for these consolidated financial statements. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material  misstatement. The company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not  for the purpose of expressing an opinion on the effectiveness of the company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements,  assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of J.W. Mays, Inc. and subsidiaries as of July 31, 2009 and 2008, and the results of its operations and its cash flows for each of the three years in the period ended July 31,  2009, in conformity with U.S. generally accepted accounting principles.

D’ARCANGELO & CO., LLPPurchase, New YorkOctober 8, 2009

18

J.W. MAYS, INC.

**Five Year Summary of Consolidated Operations**(dollars in thousands except per share data)

 

 

 

 

 

 

 

 

 

 

 

 

 
 
      Years Ended July 31,
 
**2009**
 
      2008
 
      2007
 
      2006
 
      2005

 

Revenues

 

 

 

 

 

 

 

 

 

 

Rental income
 
 

      $

 

       16,103
  
 

      $

 

       14,572
  
 

      $

 

       13,810
  
 

      $

 

       13,470
  
 

      $

 

       12,879
 
Recovery of real estate taxes
 
 
 
      547
  
 
 
      91
  
 
 
      39
  
 
 
      196
  
      —

Gain (loss) on disposition of property and equipment
 
 
 
      (5

       )

 
 
 
 
      (17

       )

 
 
 
 
      4,309
  
      —
 
 
 
      4
 
 

 

 

 

 

 

 

 

 

 

 

Total revenues
 
 
 
      16,645
  
 
 
      14,646
  
 
 
      18,158
  
 
 
      13,666
  
 
 
      12,883
 
 

 

 

 

 

 

 

 

 

 

 

Expenses

 

 

 

 

 

 

 

 

 

 

Real estate operating expenses
 
 
 
      9,224
  
 
 
      8,887
  
 
 
      8,587
  
 
 
      7,855
  
 
 
      7,321
 
Administrative and general expenses
 
 
 
      3,471
  
 
 
      3,455
  
 
 
      3,255
  
 
 
      3,011
  
 
 
      2,764
 
Depreciation and amortization
 
 
 
      1,625
  
 
 
      1,604
  
 
 
      1,582
  
 
 
      1,545
  
 
 
      1,465
 
 

 

 

 

 

 

 

 

 

 

 

Total expenses
 
 
 
      14,320
  
 
 
      13,946
  
 
 
      13,424
  
 
 
      12,411
  
 
 
      11,550
 
 

 

 

 

 

 

 

 

 

 

 

Income from operations before investment income (loss), interest expense, and income taxes
 
 
 
      2,325
  
 
 
      700
  
 
 
      4,734
  
 
 
      1,255
  
 
 
      1,333
 
 

 

 

 

 

 

 

 

 

 

 

Investment income (loss) and interest expense:

 

 

 

 

 

 

 

 

 

 

Investment income (loss)
 
 
 
      (78

       )

 
 
 
 
      213
  
 
 
      84
  
 
 
      2,108
  
 
 
      84
 
Interest expense
 
 
 
      (763

       )

 
 
 
 
      (884

       )

 
 
 
 
      (997

       )

 
 
 
 
      (971

       )

 
 
 
 
      (726

       )

 

 

 

 

 

 

 

 

 

 

 

 
 
 
 
      (841

       )

 
 
 
 
      (671

       )

 
 
 
 
      (913

       )

 
 
 
 
      1,137
  
 
 
      (642

       )

 

 

 

 

 

 

 

 

 

 

 

 

Income before income taxes
 
 
 
      1,484
  
 
 
      29
  
 
 
      3,821
  
 
 
      2,392
  
 
 
      691
 
Income taxes provided
 
 
 
      728
  
 
 
      105
  
 
 
      1,765
  
 
 
      959
  
 
 
      343
 
 

 

 

 

 

 

 

 

 

 

 

Net Income (loss)
 
 

      $

 

       756
  
 

      $

 

       (76

       )

 
 
 

      $

 

       2,056
  
 

      $

 

       1,433
  
 

      $

 

       348
 
 

 

 

 

 

 

 

 

 

 

 

Net income (loss) per common share
 
 

      $

 

       .38
  
 

      $

 

       (.04

       )

 
 
 

      $

 

       1.02
  
 

      $

 

       .71
  
 

      $

 

       .17
 
 

 

 

 

 

 

 

 

 

 

 

Dividends per share
 
      —
 
      —
 
      —
 
      —
 
      —

 

 

 

 

 

 

 

 

 

 

 

Average common shares outstanding
 
 
 
      2,015,780
  
 
 
      2,015,780
  
 
 
      2,015,780
  
 
 
      2,015,780
  
 
 
      2,015,780
 
 

 

 

 

 

 

 

 

 

 

 

19

J.W. MAYS, INC.**Management’s Discussion and Analysis of Financial Condition andResults of Operations**

Management’s Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with our financial statements and related notes thereto contained in this report. In this discussion, the words “Company”, “we”, “our” and “us” refer to J.W. Mays, Inc. and subsidiaries.

The following can be interpreted as including forward-looking statements under the Private Securities Litigation Reform Act of 1995. The words “outlook”, “intend”, “plans”, “efforts”, “anticipates”, “believes”, “expects” or words of similar import typically identify such statements. Various important factors  that could cause actual results to differ materially from those expressed in the forward-looking statements are identified under the heading “Cautionary Statement Regarding Forward-Looking Statements” below. Our actual results may vary significantly from the results contemplated by these forward-looking  statements based on a number of factors including, but not limited to, availability of labor, marketing success, competitive conditions and the change in economic conditions of the various markets we serve.

**Critical Accounting Policies and Estimates**

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues, expenses and related disclosure of contingent assets and liabilities. We  believe the critical accounting policies in Note 1 affect our more significant judgments and estimates used in the preparation of our financial statements. Actual results may differ from these estimates under different assumptions and conditions. (See Note 1 on pages 8 and 9 to the Consolidated Financial  Statements).

**Fiscal 2009 Compared to Fiscal 2008**

Net income for the year ended July 31, 2009 amounted to $756,086, or $.38 per share, compared to net loss for the year ended July 31, 2008 of ($75,641), or ($.04) per share.

Revenues in the current year increased to $16,644,716 from $14,646,049 in the comparable 2008 fiscal year. The increase in revenue was due to the Company’s leasing to six additional tenants at the Company’s Brooklyn, Jamaica, Levittown, New York and Circleville, Ohio properties.

The recovery of real estate taxes in the current year in the amount of $546,418, net of legal expenses, represents prior years’ real estate taxes from two of the Company’s properties. The comparable 2008 year had a recovery of real estate taxes in the amount of $91,043, net of legal expenses.

Real estate operating expenses in the current year increased to $9,224,301 from $8,886,483 in the comparable 2008 year primarily due to increases in real estate taxes, maintenance and payroll costs, partially offset by decreases in insurance costs and utility costs.

Administrative and general expenses in the current year increased to $3,470,670 from $3,455,068 in the comparable 2008 year primarily due to increases in payroll costs, and legal and professional costs, partially offset by a bad debt from a tenant vacating the Company’s Jowein Building, in Brooklyn,  New York in the comparable 2008 year.

Depreciation and amortization expense in the current year increased to $1,625,016 from $1,604,321 in the comparable 2008 year primarily due to depreciation on the additional improvements to the Jamaica, New York property.

Interest expense in the current year exceeded investment income by $840,643 and $670,818 in the comparable 2008 year. The increase in the excess of interest expense over investment income was due to the loss on the sale of the Company’s investment in Lehman Brothers Holding Inc. preferred stock  in the amount of $99,900 and losses on the sale of three other preferred stocks which totaled $123,981 and a decrease in investment income, partially offset by scheduled repayments of debt.

20

**Fiscal 2008 Compared to Fiscal 2007**

Net loss for the year ended July 31, 2008 amounted to ($75,641), or ($.04) per share, compared to net income for the year ended July 31, 2007 of $2,055,939, or $1.02 per share.

Revenues in fiscal 2008 decreased to $14,646,049 from $18,158,702 in the comparable 2007 fiscal year. The decrease in revenue was due to the Company’s gain on the sale of a building in Brooklyn, New York in the amount of $4,309,340 in fiscal 2007 and the vacating of a tenant at the Company’s  Brooklyn, New York property in July 2007 and the reduced rent received by the tenant that replaced Levitz Home Furnishings, Inc., at the Company’s Jowein building in Brooklyn, New York, offset by the Company’s leasing to five additional tenants at the Company’s Brooklyn, Jamaica and Levittown, New York  properties.

The recovery of real estate taxes in fiscal 2008 in the amount of $91,043, net of legal expenses, represents prior years’ real estate taxes from one of the Company’s properties. The comparable 2007 year had a recovery of real estate taxes in the amount of $39,483, net of legal expenses.

Real estate operating expenses in fiscal 2008 increased to $8,886,483 from $8,587,081 in the comparable 2007 year primarily due to increases in rental expense in the Company’s Brooklyn, New York property, utility costs and payroll costs, partially offset by decreases in real estate taxes, insurance  costs, licenses and permits and leasing commission costs.

Administrative and general expenses in fiscal 2008 increased to $3,455,068 from $3,255,094 in the comparable 2007 year primarily due to increases in payroll costs, insurance costs, legal and professional costs, and pension costs.

Depreciation and amortization expense in fiscal 2008 increased to $1,604,321 from $1,582,153 in the comparable 2007 year primarily due to depreciation on the additional improvements to the Jamaica, New York property.

Interest expense in fiscal 2008 exceeded investment income by $670,818 and $913,435 in the comparable 2007 year. The decrease in the excess of interest expense over investment income was due primarily to increased investment income and scheduled repayments of debt.

**Liquidity and Capital Resources:**

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

Management considers current working capital and borrowing capabilities adequate to cover the Company’s planned operating and capital requirements. The Company’s cash and cash equivalents amounted to $653,719 at July 31, 2009.

In July 2008, the Company entered into a lease agreement with a tenant for 57,209 square feet of office space at the Company’s Brooklyn, New York property. Rent commenced in February 2009. The cost of construction to the Company for this tenant was insignificant.

On September 22, 2008, the Company made a payment in the amount of $300,000, which was a partial payment towards the principal amount of its loan and accrued interest to date on the Jowein Building in Brooklyn, New York and in March 2009, the Company paid the balance of the loan in the amount  of $764,648 in addition to quarterly payments. (See Note 3(c) to the Consolidated Financial Statements.)

As part of the $12,000,000 multiple draw term loan, the bank agreed to finance the cost of two new elevators at the Company’s Bond Street building in Brooklyn, New York. The amount to be financed will be $850,000. (See Note 3(e) to the Consolidated Financial Statements). The total cost of the elevator  project was approximately $1,200,000 and was completed in August 2009. On September 17, 2009, the Company drew down $751,500 of the $850,000 elevator loan (see Note 3(e) to the Consolidated Financial Statements).

The leases with the Company’s landlords at the Jowein building in Brooklyn, New York, expire on April 30, 2010. The Company is committed to return the premises in the condition the Company received it, taking into account normal wear and tear. At this time we are only able to estimate that the costs  required to separate the

21

building will range between $700,000 and $1,200,000. The loss in cash flow to the company will be insignificant when compared to the fiscal 2009 cash flow.

On August 12, 2009, a tenant in our 9 Bond Street building in Brooklyn, New York filed for Chapter 11 protection. This tenant is expected to account for 1.66% of our projected annual income for the year ending July 31, 2010. While we cannot ascertain what the effect of this filing will be on the Company,  cash flows would be adversely affected by approximately $23,000 per month should the tenant reject the lease and vacate the premises.

In September 2009, the Company entered into a lease agreement with a drive-in restaurant at the Company’s Massapequa premises. The drive-in restaurant intends to construct a new building. The tenant’s occupancy is subject to it receiving the necessary building permits and licenses to construct the  building and open for business within a reasonable time period. Rent is anticipated to commence in late 2010. This will replace the tenant that vacated the premises in April 2009. The rental income from this lease agreement will more than offset the rental income lost from the previous tenant.

**Contractual Obligations:**

At July 31, 2009, the Company had certain contractual cash obligations, as set forth in the following tables:

 

 

 

 

 

 

 

 

 

 

 

Contractual CashObligations

 
 
      Payment Due by Period
 
      Total
 
      Less than 1Year
 
      1-3Years
 
      4-5Years
 
      After 5Years

Mortgages and term loan payable
 
 

      $

 

       9,513,528
  
 

      $

 

       949,603
  
 

      $

 

       3,849,168
  
 

      $

 

       485,871
  
 

      $

 

       4,228,886
 
Note payable
 
 
 
      1,000,000
  
      —
 
 
 
      1,000,000
  
      —
 
      —

Security deposits payable
 
 
 
      1,061,864
  
 
 
      257,108
  
 
 
      262,902
  
 
 
      220,900
  
 
 
      320,954
 
Operating leases
 
 
 
      33,445,926
  
 
 
      2,097,949
  
 
 
      3,471,375
  
 
 
      3,446,871
  
 
 
      24,429,731
 
 

 

 

 

 

 

 

 

 

 

 

Total contractual cash obligations
 
 

      $

 

       45,021,318
  
 

      $

 

       3,304,660
  
 

      $

 

       8,583,445
  
 

      $

 

       4,153,642
  
 

      $

 

       28,979,571
 
 

 

 

 

 

 

 

 

 

 

 

**Cash Flows:**

The following table summarizes our cash flow activity for the fiscal years ended July 31, 2009, 2008 and 2007:

 

 

 

 

 

 

 

 
 
      2009
 
      2008
 
      2007

Net cash provided by operating activities
 
 

      $

 

       2,622,817
  
 

      $

 

       143,119
  
 

      $

 

       697,758
 
Net cash provided (used) by investing activities
 
 
 
      (1,322,905

       )

 
 
 
 
      (3,816,477

       )

 
 
 
 
      3,493,140
 
Net cash (used) by financing activities
 
 
 
      (2,121,583

       )

 
 
 
 
      (816,602

       )

 
 
 
 
      (560,876

       )

 

**Cash Flows From Operating Activities:**

*Payroll and Other Accrued Liabilities:*The Company paid $422,325 for commissions incurred in order to lease space at the Company’s properties in the year ended July 31, 2009. The original amount of the brokerage commissions was $2,540,474. As of July 31, 2009, $2,506,335 had been paid.

A tenant at the Company’s Jowein building in Brooklyn, New York paid the rent in advance to the end of the lease term which is April 2010. The amount paid in advance as of July 31, 2009 is $268,264.

**Cash Flows From Investing Activities:**

The Company had expenditures of $595,550 for the year ended July 31, 2009, for the construction of two new elevators. The total cost of the project is approximately $1,200,000, of which $850,000 will be financed by a bank. The project was completed in August 2009.

**Cash Flows From Financing Activities:**

On September 22, 2008, the Company made a payment in the amount of $300,000, which was a partial payment towards the principal amount of its loan and accrued interest to date on the Jowein Building in

22

Brooklyn, New York and in March 2009, the Company paid the balance of the loan in the amount of $764,648 in addition to quarterly payments. (See Note 3(c) to the Consolidated Financial Statements.)

**Cautionary Statement Regarding Forward-Looking Statements:**

This section, Management’s Discussion and Analysis of Financial Condition and Results of Operations, other sections of this Annual Report on Form 10-K and other reports and verbal statements made by our representatives from time to time may contain forward-looking statements that are based on our  assumptions, expectations and projections about us and the securities industry. These include statements regarding our expectations about revenues, our liquidity, or expenses and our continued growth, among others. Such forward-looking statements by their nature involve a degree of risk and uncertainty.  We caution that a variety of factors, including but not limited to the factors described under Item 1A, “Risk Factors” in our Form 10-K for the fiscal year ended July 31, 2009 and the following, could cause business conditions and our results to differ materially from what is contained in forward-looking  statements:

 

      •
 
 
 
      changes in the rate of economic growth in the United States;

 

•
 
 
 
changes in the financial condition of our customers;

 

•
 
 
 
changes in regulatory environment;

 

•
 
 
 
lease cancellations;

 

•
 
 
 
changes in our estimates of costs;

 

•
 
 
 
war and/or terrorist attacks on facilities where services are or may be provided;

 

•
 
 
 
outcomes of pending and future litigation;

 

•
 
 
 
increasing competition by other companies;

 

•
 
 
 
compliance with our loan covenants;

 

•
 
 
 
recoverability of claims against our customers and others by us and claims by third parties against us; and

 

•
 
 
 
changes in estimates used in our critical accounting policies.

Other factors and assumptions not identified above were also involved in the formation of these forward-looking statements and the failure of such other assumptions to be realized, as well as other factors, may also cause actual results to differ materially from those projected. Most of these factors are  difficult to predict accurately and are generally beyond our control. You should consider the areas of risk described above in connection with any forward-looking statements that may be made by us.

We undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise. You are advised, however, to consult any additional disclosures we make in proxy statements, quarterly reports on Form 10-Q, Annual Reports on Form 10-K  and current reports on Form 8-K filed with the Securities and Exchange Commission.

**Controls and Procedures:**

The Company’s management reviewed the Company’s internal controls and procedures and the effectiveness of these controls. As of July 31, 2009, the Company carried out an evaluation, under the supervision and with the participation of the Company’s management, including its Chief Executive  Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures pursuant to Rules 13a-14(c) and 15d-14(c) of the Securities Exchange Act of 1934. Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer  concluded that the Company’s disclosure controls and procedures are effective in timely alerting them to material information relating to the Company required to be included in its periodic SEC filings.

23

There was no change in the Company’s internal controls over financial reporting or in other factors during the Company’s last fiscal quarter that materially affected, or are reasonably likely to materially affect, the Company’s internal controls over financial reporting. There were no significant deficiencies or  material weaknesses, and therefore there were no corrective actions taken.

Our accounting department is comprised of four persons. Due to such a limited number of persons, a complete segregation of all of the duties as to which the department is responsible is not possible. In order to make sure that the inability to segregate all duties does not affect our timely and accurate  financial reporting, we need to remain vigilant in maintaining compensating controls. These compensating controls will continue to be monitored in order to assure us that our internal controls over financial reporting remain at a high level despite the limited number of accounting department personnel.

**Quarterly Financial Information (Unaudited)(dollars in thousands except per share data)
 

 

 

 

 

 

 

 

 

 
 
      Three Months Ended
 
      Oct. 31, 2008
 
      Jan. 31, 2009
 
      Apr. 30, 2009
 
      July 31, 2009

Revenues
 
 

      $

 

       3,923
  
 

      $

 

       4,497
  
 

      $

 

       4,072
  
 

      $

 

       4,153
 
Revenues less expenses
 
 
 
      134
  
 
 
      509
  
 
 
      382
  
 
 
      459
 
Net income
 
 
 
      60
  
 
 
      261
  
 
 
      344
  
 
 
      91
 
Net income per common share
 
 

      $

 

       .03
  
 

      $

 

       .13
  
 

      $

 

       .17
  
 

      $

 

       .05
 
 

 

 

 

 

 

 

 

 

 
 
      Three Months Ended
 
      Oct. 31, 2007
 
      Jan. 31, 2008
 
      Apr. 30, 2008
 
      July 31, 2008

Revenues
 
 

      $

 

       3,477
  
 

      $

 

       3,735
  
 

      $

 

       3,489
  
 

      $

 

       3,945
 
Revenues less expenses
 
 
 
      (20

       )

 
 
 
 
      (308

       )

 
 
 
 
      (129

       )

 
 
 
 
      486
 
Net income (loss)
 
 
 
      (36

       )

 
 
 
 
      (245

       )

 
 
 
 
      67
  
 
 
      138
 
Net income (loss) per common share
 
 

      $

 

       (.02

       )

 
 
 

      $

 

       (.12

       )

 
 
 

      $

 

       .03
  
 

      $

 

       .07
 
Income per share is computed independently for each of the quarters presented on the basis described in Note 1 to the Consolidated Financial Statements.

**Common Stock and Dividend Information**

Effective November 8, 1999, the Company’s common stock commenced trading on The Nasdaq Capital Market tier of The Nasdaq Stock Market under the Symbol: “Mays”. Such shares were previously traded on The Nasdaq National Market. Effective August 1, 2006, NASDAQ became operational as an  exchange in NASDAQ-Listed Securities. It is now known as The NASDAQ Stock Market LLC.

The following is the sales price range per share of J.W. Mays, Inc. common stock during the fiscal years ended July 31, 2009 and 2008:

 

 

 

 

 

Three Months Ended
 
      Sales Price
 
      High
 
      Low

October 31, 2008
 
 

      $

 

       18.05
  
 

      $

 

       10.90
 
January 31, 2009
 
 
 
      11.40
  
 
 
      4.15
 
April 30, 2009
 
 
 
      6.56
  
 
 
      4.20
 
July 31, 2009
 
 
 
      16.00
  
 
 
      5.77
 
October 31, 2007
 
 

      $

 

       24.69
  
 

      $

 

       21.36
 
January 31, 2008
 
 
 
      22.15
  
 
 
      19.00
 
April 30, 2008
 
 
 
      20.25
  
 
 
      19.60
 
July 31, 2008
 
 
 
      21.00
  
 
 
      18.00
 
The quotations were obtained for the respective periods from the National Association of Securities Dealers, Inc. There were no dividends declared in either of the two fiscal years.

On September 11, 2009, the Company had approximately 1,500 shareholders of record.

24

J.W. MAYS, INC.

**Officers**

 

 

 

      Lloyd J. Shulman
 
Chairman of the Board, Chief Executive Officer and President and Chief Operating Officer

      Mark S. Greenblatt
 
Vice President and Treasurer

      Ward N. Lyke, Jr.
 
Vice President and Assistant Treasurer

      George Silva
 
Vice President-Operations

      Salvatore Cappuzzo
 
Secretary

     
 
 

**Board of Directors**
 
 

      Mark S. Greenblatt3,5
 
Vice President and Treasurer, J.W. Mays, Inc.

      Lance D. Myers1,3,4,5,6
 
Partner, Holland & Knight LLP

      Dean L. Ryder2,3,4,6
 
President, Putnam County National Bank

      Jack Schwartz1,2,3,4,6
 
Private Consultant

      Lloyd J. Shulman1,3
 
Chairman of the Board, Chief Executive Officer and President and Chief Operating Officer, J.W. Mays, Inc.

      Lewis D. Siegel2,3,4,6
 
Senior Vice President-Investments, Wells Fargo Advisers, LLC.

Committee Assignments Key:1 Member of Executive Committee2 Member of Audit Committee3 Member of Investment Advisory Committee4 Member of Executive Compensation Committee5 Member of Disclosure Committee (Mr. Lyke is also a member)6 Member of Nominating Committee
**Form 10-K Annual Report**

Copies of the Company’s Form 10-K Annual Reportto the Securities and Exchange Commissionfor the fiscal year ended July 31, 2009.will be furnished without charge toshareholders upon written requestto: Secretary, J.W. Mays, Inc.9 Bond Street, Brooklyn, New York 11201-5805.

Copies of the Notice of meeting, Proxy Statement,Proxy Card and Annual Report to Shareholders are available at:http://www.amstock.com/proxyservices/viewmaterial.asp?CoNumber=03443

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