Business Context and Reporting Period
Company: J.W. Mays, Inc.
Filing Type: Form 10-K (Annual Report)
Period Ended: July 31, 2008
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 focuses on leasing real estate. The Company employs approximately 30 people and has no foreign operations.
Key Financial Metrics
Note: Specific revenue, net income, and cash flow figures for the fiscal year are incorporated by reference from the Annual Report to Shareholders and are not explicitly detailed in the provided text. The following metrics are derived from the filing text:
- Real Estate Assets: Total gross carrying cost of real estate and improvements was $78,345,657 as of July 31, 2008.
- Accumulated Depreciation: $33,069,044 as of July 31, 2008.
- Debt Structure:
- Fixed-rate debt: $12,081,167
- Variable-rate debt: $500,000
- Dividends: No dividends were declared in fiscal years 2008 or 2007.
- Stock Price Range (FY 2008): High of $24.69 (Oct 2007) to Low of $18.00 (July 2008).
- Shareholders: Approximately 1,500 shareholders of record as of September 12, 2008.
Material Changes and Property Status
- Property Portfolio: The Company operates 8 primary locations, including significant holdings in Brooklyn (Bond Street and Jowein Building), Jamaica, Fishkill, Levittown, Massapequa, and Circleville, Ohio.
- Occupancy and Leasing:
- Bond Street: Approximately 25,000 sq. ft. available for lease. Two tenants occupy over 10% of rentable space (33.42% and 15.06%).
- Jowein Building: Approximately 150,000 sq. ft. available for lease. The Company owns 47% and leases 53%. Leases with landlords expire April 30, 2010, with no renewal options, potentially resulting in the loss of 90,697 sq. ft. of tenant space.
- Fishkill: Approximately 203,000 sq. ft. available for lease; occupancy was effectively 0% in recent years.
- Circleville: Approximately 58,000 sq. ft. available for lease; occupancy rate was 49.13% as of July 31, 2008.
- Capital Improvements: The Company added two new elevators to the Bond Street lobby, anticipated for completion in 2008. A new 10,000 sq. ft. restaurant building in Levittown opened in May 2008.
Outlook, Risks, and Contingencies
- Legal Proceedings: The Company is involved in litigation regarding a termination notice for its tenancy in the Jowein Building. A preliminary injunction was granted in May 2007 preventing eviction, but the case is awaiting trial. Management cannot predict the outcome or potential costs.
- Market Risk: The Company is exposed to interest rate risk on its $500,000 variable-rate debt. A 100 basis point increase would decrease net income by $5,000. The Company does not use derivative instruments.
- Operational Risks:
- Concentration: A controlling shareholder group may vote in ways that do not align with minority shareholders. There are shared management and auditors between the Company and its largest shareholder.
- Real Estate: Risks include environmental liabilities in older properties, rising costs to "fit up" properties for tenants, and potential loss of major tenants.
- Internal Controls: Due to a small accounting department (four persons), complete segregation of duties is not possible. The Company relies on compensating controls.
- Guidance: The filing contains forward-looking statements but does not provide specific quantitative financial guidance for future periods.
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 listed in the 10-K text.
- Jowein Building Litigation: Monitor the status of the lawsuit regarding the lease termination notice and potential financial impact of losing the leased portion of the building in 2010.
- Occupancy Rates: Assess the impact of high vacancy rates at the Fishkill and Circleville properties on future rental income.
- Related Party Transactions: Review the Proxy Statement for details on transactions with the controlling shareholder and the affiliated company leasing land for the Jamaica property.
- Debt Covenants: Confirm the terms and maturity dates of the $12.1 million fixed-rate debt and $500,000 variable-rate debt.