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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
For the Transition Period from to
Commission file number: 1-3647
Registrants telephone number, including area code: (718) 624-7400
Securities registered pursuant to Section 12(b) of the Act:
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes o No x
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes o No x
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 x No o
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No o
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulations S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrants knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. x No delinquent filers
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of large accelerated filer, accelerated filer and smaller reporting company in Rule 12b-2 of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x
The aggregate market value of voting stock held by non-affiliates of the registrant was approximately $6,540,568 as of January 31, 2012 based on the average of the bid and asked price of the stock reported for such date. For the purpose of the foregoing calculation, the shares of common stock held by each officer and director and by each person who owns 5% or more of the outstanding common stock have been excluded in that such persons may be deemed to be affiliates. This determination of affiliate status is not necessarily a conclusive determination for other purposes.
The number of shares outstanding of the registrants common stock as of September 7, 2012 was 2,015,780.
DOCUMENTS INCORPORATED BY REFERENCE
TABLE OF CONTENTS
ITEM 1. BUSINESS.
J.W. Mays, Inc. (the Company or Registrant) with executive offices at 9 Bond Street, Brooklyn, New York 11201, operates a number of commercial real estate properties, which are described in Item 2 Properties. The Companys business was founded in 1924 and incorporated under the laws of the State of New York on July 6, 1927.
The Company discontinued its department store business which operated under the name of MAYS, in the year ended July 31, 1989, and has continued the leasing of real estate. The Company has no foreign operations.
The Company employs 29 employees and has a contract, expiring November 30, 2013, with a union covering rates of pay, hours of employment and other conditions of employment for approximately 24% of its employees. The Company considers that its labor relations with its employees and union are good.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
This Annual Report on Form 10-K may contain forward-looking statements which include assumptions about future market conditions, operations and financial results. These statements are based on current expectations and are subject to risks and uncertainties. They are made pursuant to safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The Companys actual results, performance or achievements in the future could differ significantly from the results, performance or achievements discussed or implied in such forward-looking statements herein and in prior U. S. Securities and Exchange Commission (SEC) filings by the Company. The Company assumes no obligation to update these forward-looking statements or to advise of changes in the assumptions on which they were based.
Factors that could cause or contribute to such differences include, but are not limited to, changes in the competitive environment of the Company, general economic and business conditions, industry trends, changes in government rules and regulations and environmental rules and regulations. Statements concerning interest rates and other financial instrument fair values and their estimated contribution to the Companys future results of operations are based upon market information as of a specific date. This market information is often a function of significant judgment and estimation. Further, market interest rates are subject to potential significant volatility.
ITEM 1A. RISK FACTORS.
Risks Relating to Ownership Structure
The controlling shareholder group may be able to vote its shares in favor of its interests that may not always coincide with the interests of shareholders not part of such group. This risk may be counter-balanced to a degree by the actions of the Board of Directors whose composition is made up of a majority of independent directors.
The controlling shareholder group includes a corporation that owns a significant percentage of the Companys common stock and which does business with the Company, as further described in the Notes to the Consolidated Financial Statements. In theory, this could result in a conflict of interest; nevertheless, the Company and its largest shareholder have put in place some controls to reduce the effects of any perceived conflict of interest.
Certain conflicts of interest may be perceived by the relationship between the Company and its largest shareholder. Both entities have the same Chief Executive Officer, and certain management personnel work for both entities. Nevertheless, the Companys Board of Directors is composed of a majority of independent directors. As recently as 2005, in a case involving both entities, the Delaware Supreme Court in connection with an attempt to obtain books and records of the Company through a proceeding against the Companys significant shareholder, held that the actions of the Companys Board were proper.
Risks Related to Our Business
We are a part of the communities in which we do business. Accordingly, like other businesses in our communities, we are subject to the following risks:
Risks Related to Real Estate Operations
Our investment in property development may be limited by increasing costs required to fit up property to be leased to tenants. Also, as the cost of fitting up properties increases, we may be required to wait and forsake opportunities that would be revenue producing until such time that we obtain the necessary financing of such ventures. This risk may be mitigated by our obtaining of lines of credit and other financing vehicles, although such have significant limitations on the amounts that may be borrowed at any point in time.
We also may be subject to environmental liability as an owner or operator of properties. Many of our properties are old and when we need to fit up a property for a new tenant, we may find materials and the like that could be deemed to contain hazardous elements requiring remediation or encapsulation.
We try to lease our properties to tenants with adequate finances, but as a result of the recent economic downturn, even formerly financially strong tenants may be at risk. The Company is trying to mitigate the latter by leasing our properties to multiple tenants where applicable in order to diversify the tenant base.
Risks Related to our Investments
Excess cash and cash equivalents may be invested from time to time. We seek to earn rates of return that will help us finance our business operations. These investments may be subject to significant uncertainties and may not be successful for many reasons, including, but not limited to the following:
Risk Factors Summary
These are some of the Risk Factors that could affect the Companys business. The Company endeavors to take actions and do business in a way that reduces these Risk Factors or, at least, takes them into account when conducting its business. Nevertheless, some of these Risk Factors cannot be avoided so that the Company must also take actions and do business that negates the adverse effects that these may have on the ongoing business of the Company.
ITEM 1B. UNRESOLVED STAFF COMMENTS.
There are no unresolved comments from the staff of the U. S. Securities and Exchange Commission as of the date of this Annual Report on Form 10-K.
ITEM 2. PROPERTIES.
The table below sets forth certain information as to each of the properties currently operated by the Company:
Properties are leased under long-term leases for varying periods, the longest of which extends to 2073, and in most instances renewal options are included. Reference is made to Note 6 to the Consolidated Financial Statements contained in the 2012 Annual Report to Shareholders, incorporated herein by reference. The properties owned which are held subject to mortgage are the Brooklyn Bond Street building and the Fishkill property.
As of July 31, 2012 the federal tax basis is $11,356,323 with accumulated depreciation of $4,391,492 for a net carrying value of $6,964,831. The lives taken for depreciation vary between 15-40 years and the methods used are straight-line and declining balance.
The real estate taxes for this property are $520,602 per year and the rate used is averaged at $10.556 per $100 of assessed valuation.
As of July 31, 2012 the federal tax basis is $9,608,447 with accumulated depreciation of $8,298,723 for a net carrying value of $1,309,724. The lives taken for depreciation vary between 15-40 years and the methods used are straight-line and declining balance.
The real estate taxes for this property are $126,639 per year and the rate used is averaged at $2.32 per $100 of assessed valuation.
In the opinion of management, all of the Companys properties are adequately covered by insurance.
See Note 11 to the Consolidated Financial Statements contained in the 2012 Annual Report to Shareholders, which information is incorporated herein by reference, for information concerning the tenants, the rental income from which equals 10% or more of the Companys rental income.
ITEM 3. LEGAL PROCEEDINGS.
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 Companys Consolidated Financial Statements.
The Company was required to remove the foot bridge over Bond Street in Brooklyn, New York by June 2012. The removal of the foot bridge was completed in November 2011 at a cost of $309,423.
If the Company sells, transfers, disposes of or demolishes 25 Elm Place, Brooklyn, New York, then the Company may be liable to create a condominium unit for the loading dock. The necessity of creating the condominium unit and the cost of such condominium unit cannot be determined at this time.
ITEM 4. MINE SAFETY DISCLOSURES.
EXECUTIVE OFFICERS OF THE REGISTRANT
The following information is furnished with respect to each Executive Officer of the Registrant (each of whose position is reviewed annually but each of whom has a three-year employment agreement, effective August 1, 2008 and renewed August 1, 2011), whose present term of office will expire upon the election and qualification of his successor:
All of the above mentioned officers have been appointed as such by the directors and have been employed as Executive Officers of the Company during the past five years.
COMMON STOCK AND DIVIDEND INFORMATION
Effective November 8, 1999, the Companys 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, 2012 and 2011:
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 7, 2012, the Company had approximately 1,350 shareholders of record.
RECENT SALES OF UNREGISTERED SECURITIES
During the year ended July 31, 2012 we did not sell any unregistered securities.
RECENT PURCHASES OF EQUITY SECURITIES
During the year ended July 31, 2012 we did not repurchase any of our outstanding equity securities.
The following graph sets forth a five-year comparison of cumulative total shareholder return for the Company, the Standard & Poors 500 Stock-Index (S&P 500), and a Peer Group. The graph assumes the investment of $100 at the close of trading July 31, 2007 in the common stock of the Company, the S&P 500 and the Peer Group, and the reinvestment of all dividends, although the Company did not pay a dividend during this five-year period.
Comparison of Five-Year Cumulative
Assumes $100 invested at the close of trading 7/31/07 in J. W. MAYS, INC. common stock, Standard & Poors 500 and Peer Group.
*Cumulative total return assumes
reinvestment of dividends.
Factual material is obtained from sources believed to be reliable, but the publisher is not responsible for any errors or omissions contained herein.
The Performance Graph shall not be deemed incorporated by reference by any general statement of incorporation by reference in any filing made under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, and shall not otherwise be deemed filed under such Acts.
ITEM 6. SELECTED FINANCIAL DATA.
The information appearing under the heading Summary of Selected Financial Data on page 2 of the Registrants 2012 Annual Report to Shareholders is incorporated herein by reference.
The information appearing under the heading Managements Discussion and Analysis of Financial Condition and Results of Operations of the Registrants 2012 Annual Report to Shareholders is incorporated herein by reference.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
The Company uses fixed-rate debt to finance its capital requirements. These transactions do not expose the Company to market risk related to changes in interest rates. The Company does not use derivative financial instruments. At July 31, 2012, the Company had fixed-rate debt of $6,750,259.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
The Registrants Consolidated Financial Statements, together with the report of DArcangelo & Co., LLP, independent registered public accounting firm, dated October 4, 2012, appearing on pages 4 through 20 of the Registrants 2012 Annual Report to Shareholders is incorporated herein by reference. With the exception of the aforementioned information and the information incorporated by reference in Items 2, 5, 6, and 7 hereof, the 2012 Annual Report to Shareholders is not to be deemed filed as part of this Form 10-K Annual Report.
There are no disagreements between the Company and its accountants relating to accounting or financial disclosures.
ITEM 9A. CONTROLS AND PROCEDURES.
(A) EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES.
The Companys management reviewed the Companys internal controls and procedures and the effectiveness of these controls. As of July 31, 2012, the Company carried out an evaluation, under the supervision and with the participation of the Companys management, including its Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Companys 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 Companys 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.
(B) CHANGE TO INTERNAL CONTROLS OVER FINANCIAL REPORTING.
There was no change in the Companys internal controls over financial reporting or in other factors during the Companys last fiscal quarter that materially affected, or is reasonably likely to materially affect, the Companys internal controls over financial reporting. There were no significant deficiencies or material weaknesses noted, and therefore there were no corrective actions taken.
(C) MANAGEMENTS ANNUAL REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING.
The Companys management is responsible for establishing and maintaining adequate internal control over financial reporting as such term is defined in Rule 13(a)-15(f). Our internal control system has been designed to provide reasonable assurance to the Companys management and its Board of Directors regarding the preparation and fair presentation of published financial statements. All internal control systems, no matter how well designed, have inherent limitations. Even those systems that have been determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. The Companys management assessed the effectiveness of our internal control over financial reporting as of July 31, 2012. In making this assessment, the Companys management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control Integrated Framework Guidance for Small Public Companies. Based on the Companys assessments, we believe that, as of July 31, 2012, its internal control over financial reporting is effective based on these criteria.
This Form 10-K Annual Report does not include an attestation report of our independent registered public accounting firm regarding internal controls over financial reporting. Managements report was not subject to attestation by our independent registered public accounting firm pursuant to the permanent exemption for small reporting company filers from the internal control audit requirement of Section 404(b) of the Sarbanes-Oxley Act of 2002.
ITEM 9B. OTHER INFORMATION.
Reports on Form 8-KOne report on Form 8-K was filed by the Company during the three months ended July 31, 2012.
Item reportedThe Company reported its financial results for the three and nine months ended April 30, 2012.
Date of report filed June 7, 2012
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.
The information relating to directors of the Company is contained in the Definitive Proxy Statement for the 2012 Annual Meeting of Shareholders and such information is incorporated herein by reference.
The information with respect to Executive Officers of the Company is set forth in Part I hereof.
ITEM 11. EXECUTIVE COMPENSATION.
The information required by this item appears under the heading Executive Compensation in the Definitive Proxy Statement for the 2012 Annual Meeting of Shareholders and such information is incorporated herein by reference.
The information required by this item appears under the headings Security Ownership of Certain Beneficial Owners and Management and Information Concerning Nominees for Election as Directors in the Definitive Proxy Statement for the 2012 Annual Meeting of Shareholders and such information is incorporated herein by reference.
The information required by this item appears under the headings Executive Compensation, Certain Transactions, and Board Interlocks and Insider Participation in the Definitive Proxy Statement for the 2012 Annual Meeting of Shareholders and such information is incorporated herein by reference.
ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES.
The following table sets forth the fees paid by the Company to its independent registered public accounting firm, DArcangelo & Co., LLP, for the fiscal years 2012 and 2011.
Audit Fees for fiscal year 2012 and fiscal year 2011 were for professional services rendered for the audits of the consolidated financial statements of the Company, interim quarterly reviews of Form 10-Q information and assistance with the review of documents filed with the U. S. Securities and Exchange Commission.
Tax Fees and Other Fees for fiscal year 2012 and fiscal year 2011 were for services related to tax compliance and preparation of federal, state and local corporate tax returns and audit of real estate tax matters.
The officers of the Company consult with, and receive the approval of, the Audit Committee before engaging accountants for any services.
ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
The following documents are filed as part of this report:
Pursuant to the requirements of Section 13 or 15(d) 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.
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant in the capacities and on the date indicated.
INDEX TO REGISTRANTS FINANCIAL STATEMENTS AND SCHEDULES
Reference is made to the following sections of the Registrants Annual Report to Shareholders for the fiscal year ended July 31, 2012, which are incorporated herein by reference:
Report of Independent Registered Public Accounting Firm (page 20)
Consolidated Balance Sheets (pages 4 and 5)
Consolidated Statements of Income and Retained Earnings (page 6)
Consolidated Statements of Comprehensive Income (page 7)
Consolidated Statements of Cash Flows (page 8)
Notes to Consolidated Financial Statements (pages 9-18)
All other schedules for which provision is made in the applicable regulations of the Securities and Exchange Commission are not required under the related instructions or are inapplicable and, accordingly, are omitted.
The separate financial statements and schedules of J.W. Mays, Inc. (not consolidated) are omitted because the Company is primarily an operating company and its subsidiaries are wholly-owned.
REPORT OF INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM ON
To the Board of Directors and
We have audited the consolidated financial statements of J.W. Mays, Inc. and subsidiaries as of July 31, 2012 and 2011, and for the three years in the period ended July 31, 2012 and have issued our report thereon dated October 4, 2012; such consolidated financial statements and reports are incorporated by reference in this Form 10-K Annual Report. Our audits also included the consolidated financial statement schedules of J.W. Mays, Inc. and subsidiaries referred to in Item 15-2 of this Form 10-K. These consolidated financial statement schedules are the responsibility of the Companys management. Our responsibility is to express an opinion based on our audits. In our opinion, such consolidated financial statement schedules, when considered in relation to the basic consolidated financial statements taken as a whole, present fairly, in all material respects, the information set forth therein.
DARCANGELO & CO., LLP
J.W. MAYS, INC.
EXHIBIT INDEX TO FORM 10-K