Business Context and Reporting Period
Company: J.W. Mays, Inc.
Filing Type: Form 10-Q (Quarterly Report)
Period Ended: January 31, 2000
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 Jamaica, Brooklyn, Fishkill, and Circleville.
Key Financial Metrics
| Metric | Three Months Ended Jan 31, 2000 | Six Months Ended Jan 31, 2000 | Balance Sheet (Jan 31, 2000) |
|---|---|---|---|
| Total Revenues | $2,727,171 | $5,432,076 | - |
| Net Income | $197,357 | $491,857 | - |
| Earnings Per Share | $0.09 | $0.23 | - |
| Operating Cash Flow | - | $1,725,096 | - |
| Cash and Equivalents | - | - | $1,759,819 |
| Total Assets | - | - | $41,754,896 |
| Total Liabilities | - | - | $10,385,562 |
| Long-Term Debt | - | - | $6,472,006 |
| Shareholders' Equity | - | - | $31,369,334 |
Material Changes vs. Prior Period
- Revenue Growth: Total revenues increased to $2,727,171 for the three months ended Jan 31, 2000, compared to $2,624,516 in the prior year period. For the six-month period, revenues rose to $5,432,076 from $5,304,421.
- Net Income: Net income for the three months increased to $197,357 from $177,129. However, for the six-month period, net income slightly decreased to $491,857 from $498,444.
- Expense Increases: Real estate operating expenses rose due to higher real estate taxes, fuel, and utility costs. Administrative and general expenses increased primarily due to higher payroll and legal/professional fees.
- Interest Expense: Interest expense decreased in both periods compared to the prior year due to scheduled debt repayments. The net interest cost (interest expense less investment income) narrowed to $88,942 for the quarter and $184,951 for the six months.
- Comprehensive Income: Comprehensive income for the six months ended Jan 31, 2000, was $301,896, significantly lower than net income due to an unrealized loss of $189,961 on available-for-sale securities.
Outlook, Risks, and Management Commentary
- Liquidity: Management considers current working capital and borrowing capabilities adequate to cover planned operating and capital requirements. Cash and cash equivalents totaled $1,759,819.
- Capital Projects: The Company is constructing a new lobby at its Brooklyn property with an estimated total cost of $680,000. As of Jan 31, 2000, $519,078 had been expended, with completion expected by April 2000. Renovations at the Jamaica and Fishkill properties were also ongoing or recently completed.
- Year 2000 Compliance: The Company reported no material expenditures or operational problems related to Year 2000 issues.
- Contingencies: The Company has outstanding claims against former tenants McCrory Stores Corporation and Jamesway Corporation, both of which filed for Chapter 11 bankruptcy. The Company has received partial payments but has made no provision for the remaining balances, deeming further distributions unlikely. Management believes pending lawsuits will not have a material adverse effect.
- Tenant Concentration: One tenant accounted for 15.98% of rental income during the six months ended Jan 31, 2000.
Investor Verification Checklist
- Verify the status and expected completion date of the $680,000 Brooklyn lobby renovation project.
- Confirm the occupancy status and lease terms of the tenant representing 15.98% of rental income.
- Review the details of the mortgage held by an affiliated corporation (Jowein building) maturing March 31, 2000, and the status of extension negotiations.
- Assess the potential impact of unrealized losses on marketable securities on future liquidity if assets need to be liquidated.
- Monitor the status of bankruptcy claims against McCrory and Jamesway for any unexpected distributions or legal developments.