Business Context and Reporting Period
Company: J. W. Mays, Inc.
Filing Type: Form 10-K (Annual Report)
Period Ended: July 31, 2002
Business Overview: The Company operates a portfolio of commercial real estate properties in New York and Ohio. It discontinued its department store business in 1989 and now focuses exclusively on leasing real estate. The Company employs approximately 31 people, with 16% covered by a union contract.
Key Financial Metrics
Note: Specific revenue, profit, cash flow, and margin figures are incorporated by reference from the Annual Report to Shareholders and are not explicitly detailed in the provided text. The following asset and liability data is available:
- Total Real Estate Investment (Gross): $57,197,856 (as of July 31, 2002).
- Total Accumulated Depreciation: $25,104,318.
- Net Carrying Value of Real Estate: Approximately $32,093,538 (Gross less Accumulated Depreciation).
- Encumbrances (Mortgages): $8,491,735 total on specific properties (Jamaica, Fishkill, Jowein Building, and Circleville).
- Marketable Securities Allowance: $1,334,810 allowance for net unrealized gains/losses.
- Shares Outstanding: 2,033,280 (as of September 18, 2002).
- Market Value of Voting Stock: Approximately $7,986,467 (as of September 18, 2002).
Material Changes and Property Status
- Capital Improvements: $1,655,143 in improvements were added to real estate during the fiscal year.
- Depreciation Expense: $1,086,386 charged to costs and expenses for the year.
- Lease Expirations:
- Circleville, Ohio: The primary tenant lease expired September 30, 2002, but an extension and modification for the entire premises has been executed.
- Brooklyn (Fulton St.): A lease for 1/3 of the premises expired in 2001; rental continues month-to-month while negotiations proceed.
- Brooklyn (Jowein Building): Renovations for office space commenced June 1, 2002.
- Occupancy:
- Levittown, Massapequa, and Circleville: 100% occupied.
- Fishkill: Approximately 12.28% occupied; ~177,000 sq. ft. available.
- Jamaica: Approximately 80.34% occupied; ~27,000 sq. ft. available.
- Jowein Building: Approximately 68.65% occupied; ~95,000 sq. ft. available.
Outlook, Risks, and Contingencies
- Legal Proceedings: Various lawsuits and claims are pending. Management opines that the resolution will not have a material adverse effect on financial statements.
- Internal Controls: Management evaluated disclosure controls and procedures and found no significant changes or material weaknesses. Certifications under Section 906 of the Sarbanes-Oxley Act were filed.
- Insurance: Management believes all properties are adequately covered by insurance.
- Concentration Risk: Several properties have single tenants or tenants occupying over 10% of rentable space (e.g., a NYC agency at Jowein Building occupies 33.33%).
Investor Verification Checklist
- Financial Statements: Verify specific Revenue, Net Income, and Cash Flow figures in the "Annual Report to Shareholders" (incorporated by reference), as they are not present in the 10-K text provided.
- Lease Renewals: Confirm the terms of the new lease extension for the Circleville, Ohio property and the status of negotiations for the Brooklyn (Fulton St.) partial lease.
- Vacancy Rates: Assess the impact of high vacancy at the Fishkill (87.72% vacant) and Jowein Building (31.35% vacant) properties on future cash flow.
- Debt Covenants: Review the specific terms of the $8.5 million in encumbrances to ensure compliance with mortgage covenants.
- Legal Exposure: Monitor the status of pending lawsuits to ensure management's assessment of "no material adverse effect" remains valid.