J. W. Mays, Inc. Net Income dropped on 160% and EBITDA Margin dropped on 16.3 pp from 18.5% to 2.2%
10/08/2020 • About J. W. Mays, Inc. (
$MAYS) • By InTwits
J. W. Mays, Inc. reported FY2020 financial results today. Here are the key drivers of the company's long term financial model:
- EBITDA Margin is declining: 2.2% in FY2020 vs. 18.5% in FY2019 vs. 22.3% in FY2016
- EBITDA Margin is quite volatile: 2.2% in FY2020, 18.5% in FY2019, 18.8% in FY2018, 24.1% in FY2017, 22.3% in FY2016
- J. W. Mays, Inc. has high CAPEX intensity: 5 year average CAPEX/Revenue was 18.8%. At the same time it's in pair with industry average of 18.3%
- CAPEX is quite volatile: $6m in FY2020, $4m in FY2019, $3m in FY2018, $2m in FY2017, $3m in FY2016
- The company has unprofitable business model: ROIC is -1.5%
- It operates with high leverage: Net Debt/EBITDA is 81.6x while industry average is 49.8x
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
The company's Revenue decreased on 4.6%. Revenue decline showed acceleration in FY20Q4 - it was 17.4% YoY. Revenue decline was worsened by EBITDA margin decline. EBITDA Margin dropped on 16.3 pp from 18.5% to 2.2% in FY2020. During the last 5 years EBITDA Margin topped in FY2017 at 24.1% and was declining since that time.
Net Income margin dropped on 12.0 pp from 7.4% to -4.6% in FY2020. During FY2016-FY2020 Net Income margin topped in FY2018 at 15.4% and was declining since that time.
Investments (CAPEX, working capital and M&A)
In FY2020 J. W. Mays, Inc. had CAPEX/Revenue of 32.6%. J. W. Mays, Inc.'s CAPEX/Revenue jumped on 21.8 pp from 10.8% in FY2017 to 32.6% in FY2020. It's average level of CAPEX/Revenue for the last three years was 23.2%. Battling declining revenue the company made large investments to CAPEX (1,508% of EBITDA) but that didn't help at least in this year. CAPEX as a % of Revenue grew at 4.8 pp per annum in FY2016-FY2020.
Return on investment
The company operates at negative ROIC (-1.5%) and ROE (-1.7%). ROIC decreased on 4.4 pp from 2.8% to -1.5% in FY2020. ROE decreased on 4.5 pp from 2.8% to -1.7% in FY2020. During FY2016-FY2020 ROIC topped in FY2017 at 5.0% and was declining since that time. During FY2016-FY2020 ROE topped in FY2018 at 5.8% and was declining since that time.
Leverage (Debt)
Company's Net Debt / EBITDA is 81.6x and Debt / EBITDA is 89.3x. Net Debt / EBITDA surged on 81.3x from 0.3x to 81.6x in FY2020. Debt surged on 613% while cash dropped on 20.8%. During the last 5 years Net Debt/EBITDA bottomed in FY2017 at 0.041x and was growing since that time.
The company has no short term refinancing risk: short term debt is zero.
Management team
The company's CEO is Lloyd J Shulman. Lloyd J Shulman has 25 years tenure with the company.
Financial and operational results
FY ended 07/31/2020
J. W. Mays, Inc. ($MAYS) key annual financial indicators| mln. $ | 2016 | 2017 | 2018 | 2019 | 2020 | 2020/2019 |
|---|
P&L
|
|---|
| Revenue | 18.583 | 19.549 | 19.301 | 20.478 | 19.532 | -4.6% |
| EBITDA | 4.145 | 4.721 | 3.628 | 3.779 | 0.422 | -88.8% |
| Net Income | 1.518 | 1.926 | 2.974 | 1.515 | -0.906 | -159.8% |
Balance Sheet
|
|---|
| Cash | 5.229 | 5.381 | 5.255 | 4.118 | 3.260 | -20.8% |
| Short Term Debt | 1.000 | 0.000 | 0.000 | 0.000 | 0.000 | |
| Long Term Debt | 5.706 | 5.572 | 5.433 | 5.287 | 37.673 | 612.5% |
Cash flow
|
|---|
| Capex | 2.509 | 2.103 | 3.084 | 4.297 | 6.361 | 48.0% |
Ratios
|
|---|
| Revenue growth | -1.7% | 5.2% | -1.3% | 6.1% | -4.6% | |
| EBITDA growth | -15.5% | 13.9% | -23.1% | 4.1% | -88.8% | |
|
|---|
| EBITDA Margin | 22.3% | 24.1% | 18.8% | 18.5% | 2.2% | -16.3% |
| Net Income Margin | 8.2% | 9.8% | 15.4% | 7.4% | -4.6% | -12.0% |
| CAPEX, % of revenue | 13.5% | 10.8% | 16.0% | 21.0% | 32.6% | 11.6% |
|
|---|
| ROIC | 4.3% | 5.0% | 3.0% | 2.8% | -1.5% | -4.4% |
| ROE | 3.2% | 3.9% | 5.8% | 2.8% | -1.7% | -4.5% |
| Net Debt/EBITDA | 0.4x | 0.0x | 0.0x | 0.3x | 81.6x | 81.3x |
J. W. Mays, Inc. ($MAYS) key quoterly financial indicators
| mln. $ | FY20Q1 | FY20Q2 | FY20Q3 | FY20Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 5 | 5 | 5 | 4 | | -2.4% | -5.3% | -2.8% | -17.4% |
| EBITDA | 1 | 0 | -0 | -0 | | 29.5% | -82.3% | -106.5% | -117.9% |
| Net Income | 0 | -0 | -1 | -0 | | - | -119.5% | -189.2% | -160.9% |
Balance Sheet
|
|---|
| Cash | 5 | 3 | 6 | 3 | | -18.8% | -29.6% | 14.9% | -20.8% |
| Long Term Debt | 23 | 25 | 38 | 38 | | 322.6% | 361.5% | 622.9% | 612.5% |
Ratios
|
|---|
| EBITDA Margin | 11.4% | 3.2% | -1.4% | -5.5% | | 2.8% | -13.7% | -22.6% | -30.6% |
| Net Income Margin | 2.6% | -1.1% | -11.4% | -9.1% | | 4.1% | -6.7% | -23.8% | -21.3% |
Peers in Real Estate Operating Companie
Below we provide J. W. Mays, Inc. benchmarking against other companies in Real Estate Operating Companie industry for the last 5 years. We show data for the top-5 companies by key financial metric together with the median value for all the companies in the industry.
Top companies by Revenue growth, %
| Top | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| The Intergroup Corporation ($INTG) | - | -5.3% | 3.7% | 4.4% | -22.4% |
| |
|---|
| Median (1 company) | - | -5.3% | 3.7% | 4.4% | -22.4% |
|---|
| J. W. Mays, Inc. ($MAYS) | - | 5.2% | -1.3% | 6.1% | -4.6% |
Top companies by EBITDA margin, %
| Top | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| The Intergroup Corporation ($INTG) | 14.7% | 26.6% | 36.8% | 26.7% | 16.6% |
| |
|---|
| Median (1 company) | 14.7% | 26.6% | 36.8% | 26.7% | 16.6% |
|---|
| J. W. Mays, Inc. ($MAYS) | 22.3% | 24.1% | 18.8% | 18.5% | 2.2% |
Top companies by CAPEX/Revenue, %
| Top | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| The Intergroup Corporation ($INTG) | 9.3% | 1.7% | 1.3% | 3.0% | 4.0% |
| |
|---|
| Median (1 company) | 9.3% | 1.7% | 1.3% | 3.0% | 4.0% |
|---|
| J. W. Mays, Inc. ($MAYS) | 13.5% | 10.8% | 16.0% | 21.0% | 32.6% |
Top companies by ROIC, %
| Top | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| The Intergroup Corporation ($INTG) | 4.9% | 12.0% | 19.8% | 13.8% | 4.4% |
| |
|---|
| Median (1 company) | 4.9% | 12.0% | 19.8% | 13.8% | 4.4% |
|---|
| J. W. Mays, Inc. ($MAYS) | 4.3% | 5.0% | 3.0% | 2.8% | -1.5% |
Top companies by Net Debt / EBITDA
| Top | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| The Intergroup Corporation ($INTG) | 16.5x | 9.8x | 6.5x | 8.3x | 18.1x |
| |
|---|
| Median (1 company) | 16.5x | 9.8x | 6.5x | 8.3x | 18.1x |
|---|
| J. W. Mays, Inc. ($MAYS) | 0.4x | 0.0x | 0.0x | 0.3x | 81.6x |
