Business Context and Reporting Period
Company: J.W. Mays, Inc. (MAYS)
Filing Type: Form 10-K (Annual Report)
Reporting Period: Fiscal year ended July 31, 2024
Business Overview: The Company operates a portfolio of commercial real estate properties, primarily in New York and Ohio, founded in 1924. It employs 28 people, with approximately 21% covered by a union contract expiring November 30, 2025. The Company is classified as a non-accelerated filer and a smaller reporting company.
Key Financial Metrics
Note: The provided text incorporates the Consolidated Financial Statements by reference and does not contain the specific numerical values for revenue, net income, cash flow, or debt balances for the fiscal year ended July 31, 2024. The following metrics are derived from property-level data and fee disclosures present in the text.
- Revenue Drivers: Rental income from seven primary properties. Specific annual rent commitments for key properties include:
- Brooklyn (Fulton/Bond): $7,322,535
- Jamaica (Leased from affiliate): $5,803,666
- Brooklyn (Jowein): $5,031,744
- Fishkill: $1,008,036
- Massapequa: $778,281
- Circleville: $982,479
- Levittown: $456,648
- Property Valuation (Net Carrying Value as of July 31, 2024):
- Brooklyn (Fulton/Bond): $7,743,420
- Fishkill: $6,569,653
- Jamaica: $3,748,586
- Brooklyn (Jowein): $2,225,953
- Circleville: $167,936
- Accounting Fees (Fiscal 2024): Total fees paid to Prager Metis CPAs, LLC were $237,800 (Audit: $180,000; Tax: $45,000; Audit-related: $12,800).
- Dividends: No cash dividends were declared during the fiscal year.
- Stock Repurchases: No equity securities were repurchased during the fiscal year.
Material Changes and Operational Updates
- Lease Activity:
- Brooklyn (Fulton/Bond): Leased 5,632 sq. ft. to an office tenant (10-year term, rent commencing May 2024) and 1,600 sq. ft. to a restaurant (10-year term, rent commencing Dec 2024). A major office tenant (25,423 sq. ft.) extended its lease for one year through Sept 2025.
- Brooklyn (Jowein): Leased 5,800 sq. ft. to an office tenant for 18 months (April 2024 – Aug 2025).
- Jamaica: Extended a lease with an office tenant for 10 years (Nov 2023 – Nov 2033) with a space reduction from 46,421 to 23,210 sq. ft.
- Circleville: A warehouse tenant exercised options to reduce leased space from 84,000 to 60,000 sq. ft. between April and May 2024.
- Occupancy Trends: Occupancy rates vary by property. Fishkill reported 27.26% occupancy as of July 31, 2024, with approximately 156,000 sq. ft. available for lease. Massapequa occupancy was 88.76%.
- Management Changes: Ward N. Lyke, Jr. was appointed Vice President, Chief Financial Officer, and Treasurer in January 2024.
Outlook, Risks, and Contingencies
- Market Risks: The Company faces declining demand for commercial real estate due to the expansion of online retail and remote work trends. High interest rates and reduced liquidity for smaller businesses pose risks to tenant financial stability.
- Operational Risks:
- Concentration: A controlling shareholder group may vote in ways that do not align with minority shareholders. The Jamaica property is leased from an affiliated company (related party transaction).
- Environmental: Older properties may contain hazardous materials requiring remediation during tenant fit-outs.
- Cybersecurity: The Company relies on third-party providers for IT and financial systems. While no material incidents were reported, the Board maintains oversight via the Audit Committee.
- Legal Proceedings: The Company is subject to ordinary course litigation (contractual disputes, personal injury claims). Management believes these will not have a material adverse effect.
- Guidance: The filing contains forward-looking statements but does not provide specific quantitative financial guidance for future periods. The Company plans to retain earnings for business use rather than paying dividends.
Investor Verification Checklist
- Financial Statements: Verify total revenue, net income, and debt levels in the "2024 Annual Report to Shareholders" (incorporated by reference), as these specific figures are not in the 10-K text provided.
- Related Party Transactions: Review Note 10 of the financial statements regarding the Jamaica property lease with the affiliated landlord.
- Occupancy Rates: Confirm current occupancy levels for the Fishkill property (reported at 27.26%) and Massapequa (88.76%) to assess revenue stability.
- Debt Covenants: Review the terms of mortgages on the Brooklyn Fulton Street and Fishkill properties to ensure compliance with loan covenants.
- Tenant Concentration: Verify the financial health of major tenants, including the department store at Fulton Street (20.6% of rentable space) and the three largest tenants at the Jowein building.