Business Context and Reporting Period
Company: J.W. Mays, Inc.
Filing Type: Form 10-Q (Quarterly Report)
Period Ended: April 30, 2002 (Nine months ended April 30, 2002)
Business Overview: The Company operates as a real estate enterprise following the discontinuance of its retail department store segment in 1989. It owns and manages properties in New York and Ohio, deriving revenue primarily from rental income.
Key Financial Metrics
| Metric | Nine Months Ended April 30, 2002 |
Nine Months Ended April 30, 2001 |
Three Months Ended April 30, 2002 |
Three Months Ended April 30, 2001 |
|---|---|---|---|---|
| Total Revenues | $9,630,917 | $8,403,472 | $3,286,240 | $2,855,015 |
| Net Income | $1,069,640 | $741,409 | $336,639 | $294,107 |
| Earnings Per Share | $0.53 | $0.36 | $0.17 | $0.14 |
| Operating Cash Flow | $3,554,265 | $1,889,750 | N/A | N/A |
| Cash and Equivalents (Ending) | $3,591,284 | $1,770,914 | $3,591,284 | $1,003,130 |
| Total Debt (Long-Term + Current) | $9,166,876 | $8,707,367 | $9,166,876 | $8,707,367 |
| Working Capital | $2,759,743 | $935,761 | $2,759,743 | $935,761 |
Note: Working Capital calculated as Total Current Assets minus Total Current Liabilities.
Material Changes vs. Prior Period
- Revenue Growth: Revenues increased 14.6% for the nine-month period and 15.1% for the three-month period compared to the prior year. This is primarily attributed to a new lease for 42,250 square feet at the Jamaica, New York property, which commenced on May 1, 2001.
- Profitability: Net income increased 44.3% for the nine-month period ($1.07M vs $0.74M) and 14.5% for the three-month period. Operating income before investment income and taxes rose significantly due to higher rental income.
- Expense Trends:
- Real Estate Operating Expenses: Increased slightly for the nine-month period ($4.49M vs $4.47M) due to higher taxes, insurance, and maintenance, partially offset by lower payroll and utility costs.
- Administrative Expenses: Increased 10.6% for the nine-month period due to higher payroll, medical, legal, and professional costs.
- Interest Expense: Increased significantly due to a new $3.5M mortgage on the Jamaica property and a $49,770 impairment write-down on Enron Capital Resources Series A preferred stock.
- Liquidity: Cash and cash equivalents more than tripled from $1.0M to $3.6M, driven by strong operating cash flows ($3.55M) and a $1.2M drawdown on a mortgage facility.
Outlook, Risks, and Contingencies
- Lease Expirations: The lease for the Circleville, Ohio property (193,000 sq. ft.) terminates on September 30, 2002. Negotiations are ongoing for renewal; the tenant currently pays $466,162 annually plus taxes and utilities.
- Legal Contingency: The Company obtained a $4.15M judgment plus interest against the State of New York regarding a condemnation of part of the Fishkill property. The State has appealed; the award is not reflected in financial statements until affirmed.
- Capital Projects: Renovations for tenants in the Brooklyn Jowein building are ongoing, with total costs estimated at $1M. These costs are expected to be reimbursed by tenants through increased rent.
- Debt Maturities: A mortgage on the Circleville property matures on September 30, 2002. Other significant mortgages mature between 2004 and 2007.
- Concentration Risk: Two tenants accounted for 15.58% and 14.75% of rental income during the nine months ended April 30, 2002.
Investor Verification Checklist
- Verify the status of the lease renewal negotiations for the Circleville, Ohio property expiring September 30, 2002.
- Monitor the appeal status of the $4.15M judgment against the State of New York regarding the Fishkill property condemnation.
- Confirm the completion and tenant reimbursement status of the Brooklyn Jowein building renovations.
- Review the impact of the Enron Capital Resources preferred stock impairment on future investment income.
- Assess the Company's ability to refinance or repay the Circleville mortgage maturing in September 2002.