Business Context and Reporting Period
Company: J.W. Mays, Inc.
Filing Type: Form 10-Q (Quarterly Report)
Period Ended: October 31, 1999
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 including locations in Jamaica and Brooklyn, New York, Fishkill, New York, and Circleville, Ohio.
Key Financial Metrics
| Metric | Q1 FY2000 (Oct 31, 1999) | Q1 FY1999 (Oct 31, 1998) |
|---|---|---|
| Total Revenues | $2,704,905 | $2,679,905 |
| Net Income | $294,500 | $321,315 |
| Earnings Per Share | $0.14 | $0.15 |
| Operating Cash Flow | $1,363,571 | $1,285,417 |
| Cash and Equivalents | $2,022,942 | $1,520,022 |
| Total Assets | $41,829,918 | $41,657,036 |
| Total Liabilities | $10,554,811 | $10,589,598 |
| Long-Term Debt | $6,721,523 | $6,930,649 |
Note: Comparative balance sheet data for Oct 31, 1998 is not provided in the filing text; only income and cash flow comparisons are available.
Material Changes vs. Prior Period
- Revenue: Increased by $25,000 (0.9%) to $2.70 million, driven by rental income.
- Net Income: Decreased by $26,815 (8.3%) to $294,500. This decline occurred despite higher revenues due to increased operating and administrative expenses.
- Expenses:
- Real estate operating expenses rose to $1.36 million (from $1.32 million) due to higher real estate taxes, electric costs, and licenses.
- Administrative and general expenses increased to $542,313 (from $519,499) primarily due to payroll and medical costs.
- Interest Expense: Net interest expense (interest minus investment income) decreased to $96,009 from $108,751, attributed to scheduled debt repayments.
- Liquidity: Cash and cash equivalents increased by $533,099 during the quarter, supported by strong operating cash flows of $1.36 million.
Outlook, Risks, and Management Commentary
- Capital Projects:
- Jamaica Building: Exterior facade renovation nearing completion (Nov 1999). Total project cost estimated at $1.2 million; $1.15 million expended as of Oct 31.
- Brooklyn Building: New lobby construction underway to attract tenants. Estimated cost $620,000; $332,679 expended. Completion expected Jan 2000.
- Fishkill Building: HVAC installation completed Nov 1999. Total cost approx. $320,000.
- Year 2000 Compliance: Management believes the Company is compliant and does not anticipate material risk from third-party system failures, though no guarantee exists.
- Stock Listing: The Company's common stock was transferred from the Nasdaq National Market to the Nasdaq SmallCap Market effective November 8, 1999, due to insufficient public float value.
- Contingencies:
- McCrory Stores: Lease rejected in bankruptcy; Company received 21.53% of administrative claim. No further distributions expected.
- Jamesway Corp: Lease rejected in bankruptcy; Company received 49% of unsecured claim and 100% of administrative claim. No further distributions expected.
- Tenant Concentration: One tenant accounted for 15.82% of rental income in the quarter.
Investor Verification Checklist
- Verify the status and completion costs of the Jamaica facade renovation and Brooklyn lobby construction.
- Confirm the impact of the Nasdaq SmallCap Market transfer on stock liquidity and trading volume.
- Review the lease status of the single tenant representing 15.82% of rental income to assess concentration risk.
- Monitor the repayment schedule of the Jowein building mortgage (due March 31, 2000) and the Fishkill property mortgage extension.
- Assess the adequacy of reserves regarding the McCrory and Jamesway bankruptcy claims, as no provision was made for remaining balances.