J.W. Mays, Inc. 2022 Form 10-K Summary
Business Context and Reporting Period
J.W. Mays, Inc. operates commercial real estate properties, primarily in New York and Ohio. The filing covers the fiscal year ended July 31, 2022, rather than a standalone calendar fourth quarter. The Company had 31 employees and approximately 800 shareholders of record as of September 6, 2022.
The Company operated approximately 1.2 million square feet across properties in Brooklyn, Jamaica, Fishkill, Levittown, Massapequa, and Circleville. Its common stock trades on Nasdaq under the symbol MAYS.
Financial Metrics and Liquidity
The filing incorporates the consolidated financial statements and management’s discussion from the 2022 Annual Report to Shareholders, but those financial statement amounts are not included in the provided filing text. Accordingly, the filing text does not provide clear values for revenue, net income, earnings per share, operating cash flow, margins, total debt, cash and cash equivalents, or liquidity measures.
- Gross annual contractual rent reported for identified leased properties includes approximately $7.6 million at the Brooklyn Fulton Street property, $4.7 million at the Jowein building, $5.6 million at Jamaica, $0.8 million at Massapequa, and $0.8 million at Circleville.
- Occupancy at July 31, 2022 was 63.38% at Fulton Street, 80.84% at the Jowein building, 80.51% at Jamaica, 22.27% at Fishkill, 100% at Levittown, 100% at Massapequa, and 99.30% at Circleville.
- The Company stated that properties were adequately insured. The filing text does not provide a clear consolidated debt balance or borrowing capacity.
- During fiscal 2022, the Company paid total accountant fees of $227,100, compared with $226,000 in fiscal 2021.
Material Changes Versus the Prior Comparable Period
- Occupancy increased at Massapequa from 93.75% in fiscal 2021 to 100% in fiscal 2022, while Fishkill increased from 20.42% to 22.27%.
- Occupancy at Fulton Street increased from 62.31% to 63.38%, and occupancy at the Jowein building increased from 72.54% to 80.84%.
- At Jamaica, occupancy was substantially unchanged at approximately 80.5%; at Circleville, occupancy remained approximately 99.3%; and Levittown remained fully occupied.
- The Company leased 14,100 square feet of office space at Fulton Street, leased additional retail and office space, and commenced occupancy and rent payments for a 23,000-square-foot Jowein building tenant in January 2022.
- The Jamaica lease was amended in July 2022 to provide four five-year renewal options, potentially extending the lease through May 31, 2050.
- After July 31, 2022, a tenant leased 58,832 square feet at Fishkill for six months, with total rent of $576,259 paid at commencement in August 2022.
- No equity securities were repurchased during the fourth quarter, and no unregistered securities were sold during fiscal 2022.
Outlook, Risks, Contingencies, and Unusual Items
- COVID-19 contributed to late tenant payments, rent deferrals, and increased allowance-for-credit-loss considerations through July 2022. Management stated that the continuing effects on tenant credit quality, rental demand, economic activity, and investment valuations remain uncertain.
- Commercial real estate demand may be pressured by online retail competition and reduced office-space requirements resulting from remote work.
- Fishkill had approximately 156,000 square feet available for lease, and Jamaica had approximately 23,000 square feet available. Management plans potential renovations when future leases are executed, but gave no assurance that leases will be obtained.
- Several significant leases expire in or around 2023, including leases at Fulton Street, the Levittown property, and portions of Circleville. Tenant renewals are subject to the tenants maintaining adequate finances.
- The Company faces risks relating to tenant concentration, environmental remediation at older properties, insurance availability, financing availability, interest-rate and investment-market volatility, regulation, cybersecurity, climate change, and pandemics.
- The Company has related-party risks because its largest shareholder does business with the Company and shares certain management personnel, including the Chief Executive Officer.
- Various lawsuits and claims are pending, but management believes their resolution will not materially adversely affect the consolidated financial statements. If the Company sells, transfers, disposes of, or demolishes 25 Elm Place, it may need to create a condominium unit for a loading dock; the cost and requirement cannot currently be determined.
- Management concluded that disclosure controls and internal control over financial reporting were effective as of July 31, 2022, with no reported significant deficiencies or material weaknesses.
Important Facts for Investors to Verify
- Review the incorporated 2022 Annual Report for the missing consolidated revenue, profitability, cash-flow, debt, balance-sheet, and liquidity figures.
- Assess exposure to low occupancy at Fishkill and Jamaica and the concentration of rental income among major tenants.
- Review lease expirations and renewal prospects during 2023, particularly at Fulton Street, Levittown, and Circleville.
- Evaluate COVID-19-related receivable collectibility, rent deferrals, allowance for credit losses, and tenant credit quality.
- Review related-party transactions and the governance implications of the controlling shareholder and shared management relationships.
- Examine the incorporated notes for mortgage obligations, lease liabilities, investment valuations, legal contingencies, and commitments for property renovations or environmental matters.