Business Context and Reporting Period
Company: J.W. Mays, Inc.
Filing Type: Form 10-K (Annual Report)
Period Ended: July 31, 2009
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 value of real estate and improvements was $79,477,581 as of July 31, 2009.
- Accumulated Depreciation: $34,646,428 as of July 31, 2009.
- Depreciation Expense: $1,577,384 for the fiscal year ended July 31, 2009.
- Debt Structure:
- Fixed-rate debt: $10,253,528
- Variable-rate debt: $260,000
- Market Capitalization: Aggregate market value of voting stock held by non-affiliates was approximately $2,425,864 as of January 31, 2009.
- Shares Outstanding: 2,015,780 shares as of September 11, 2009.
- Dividends: No dividends were declared in fiscal years 2008 or 2009.
Material Changes and Property Status
- Stock Price Volatility: The common stock price range fluctuated significantly during the fiscal year, dropping from a high of $18.05 in Q1 2009 to a low of $4.15 in Q2 2009, before recovering to a high of $16.00 in Q4 2009.
- Property Occupancy:
- Brooklyn (Bond Street): Approximately 25,000 sq. ft. available for lease. Two tenants occupy over 10% of rentable space (33.42% and 15.06%).
- Brooklyn (Jowein Building): Approximately 150,000 sq. ft. available for lease. The Company owns 47% and leases 53%. Leases with landlords expire April 30, 2010, potentially resulting in the loss of nine tenants (93,697 sq. ft.).
- Fishkill, NY: Approximately 203,000 sq. ft. available for lease; occupancy rates were negligible in recent years.
- Circleville, OH: Occupancy improved to 69.82% in 2009 from 49.13% in 2008, with approximately 58,000 sq. ft. still available.
- Investment in Real Estate: Increased by $1,131,924 due to improvements during the fiscal year.
Outlook, Risks, and Contingencies
- Legal Proceedings: A lawsuit is pending regarding the termination of the Company's tenancy in the Jowein building. A trial was scheduled for October 2009 (likely adjourned to November 2009). Management cannot predict the outcome or potential costs to cure defaults.
- Interest Rate Risk: The Company has $260,000 in variable-rate debt. A 100 basis point increase in interest rates would decrease net income by $2,600.
- Operational Risks: Risks include economic downturns, loss of key personnel, availability of financing, and environmental liabilities associated with older properties requiring remediation.
- Related Party Transactions: The controlling shareholder group includes a corporation that does business with the Company. Both entities share the same CEO, auditors, and some management personnel, creating potential conflicts of interest.
- Internal Controls: Management concluded that disclosure controls and procedures were effective as of July 31, 2009. However, the accounting department consists of only four persons, preventing complete segregation of duties.
Investor Verification Checklist
- Financial Statements: Review the full Consolidated Financial Statements (incorporated by reference) for specific revenue, net income, and cash flow figures not detailed in this summary.
- Jowein Building Litigation: Monitor the outcome of the lawsuit regarding the lease termination and potential financial impact of losing 93,697 sq. ft. of leased space.
- Occupancy Trends: Verify current occupancy rates for the Fishkill and Circleville properties, which had significant vacant space as of July 2009.
- Debt Covenants: Review the terms of the $10.25 million fixed-rate debt and $260,000 variable-rate debt for upcoming maturities or covenants.
- Related Party Conflicts: Examine the Definitive Proxy Statement for details on transactions between the Company and its controlling shareholder.