Attached files
file | filename |
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EX-31.1 - MILLER INDUSTRIES INC | v208521_ex31-1.htm |
EX-31.2 - MILLER INDUSTRIES INC | v208521_ex31-2.htm |
EX-32.1 - MILLER INDUSTRIES INC | v208521_ex32-1.htm |
SECURITIES
AND EXCHANGE COMMISSION
Washington,
DC 20549
FORM
10-Q
QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF
1934
For the
quarterly period ended January 31, 2010
Commission
File No. 1-5926
MILLER INDUSTRIES, INC.
|
(Exact Name of Registrant as Specified in its
Charter)
|
Florida
|
59-0996356
|
|
(State or Other Jurisdiction of
Incorporation or Organization)
|
(I.R.S. Employer
Identification No.)
|
16295 N.W. 13th Avenue,
Miami, Florida 33169
|
(Address
of Principal Executive
Offices
|
(305) 621-0501
|
(Registrant's
telephone number, including area
code
|
Indicate
by check mark whether the registrant: (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days.
Yes ¨ No
þ
Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer. or a “smaller reporting
issuer.” See the definitions of “large accelerated filer,”
“accelerated filer” and “smaller reporting company” in Rule 12b-2 of the
Exchange Act.
Large
accelerated filer ¨
Accelerated filer ¨
Non-accelerated filer ¨
Smaller reporting company þ
Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act).
Yes ¨ No
þ
The
number of shares outstanding of each of the issuer's classes of common stock,
par value $.05 per share, as of January 31, 2010 is 2,982,662
shares.
MILLER INDUSTRIES,
INC.
FORM
10-Q
January
31, 2010
INDEX
Page No.
|
||
PART
I:
|
FINANCIAL
INFORMATION
|
|
Item
1.
|
Financial
Statements
|
|
Balance
Sheets dated as of January 31, 2010 and April 30, 2009
|
1
|
|
Statement
of Operations - Nine Months ended January 31, 2010 and
2009
|
3
|
|
Statement
of Operations - Three Months ended, January 31, 2010 and
2009
|
4
|
|
Statement
of Cash Flows - Nine Months ended, dated as of January 31, 2010 and
2009
|
5
|
|
Notes
to Financial Statements
|
6
|
|
Item
2.
|
Management's
Discussion and Analysis of Financial Condition and Results of
Operations
|
8
|
Item
3.
|
Quantitative
and Qualitative Disclosure about Market Risk
|
10
|
Item
4.
|
Controls
and Procedures
|
10
|
PART
II: OTHER INFORMATION
|
||
Items
1 to 6
|
11
|
|
Signatures
|
11
|
i
MILLER INDUSTRIES,
INC.
BALANCE
SHEET
JANUARY 31,
2010
(UNAUDITED)
ASSETS
|
||||||||
Investment Property:
|
||||||||
Land
|
$ | 161,443 | ||||||
Building
and Improvements
|
1,049,908 | |||||||
Machinery
and Equipment
|
11,106 | |||||||
Furniture
and Fixtures
|
10,251 | |||||||
Total
Cost
|
$ | 1,232,708 | ||||||
Less:
Accumulated Depreciation
|
871,188 | |||||||
Net
Book Value
|
$ | 361,520 | ||||||
Other Assets:
|
||||||||
Cash
and Cash Equivalents
|
$ | 1,473,695 | ||||||
Accounts
Receivable (less Allowance for Doubtful Accounts of $
3,000)
|
2,840 | |||||||
Deferred
Tax Asset
|
13,000 | |||||||
Prepaid
Expenses and Other Assets
|
30,003 | |||||||
Deferred
Lease Incentive (Net of Accumulated Amortization - $ 57,598
)
|
- | |||||||
Loan
Costs, Less Accumulated Amortization of $ 268
|
10,467 | |||||||
Total
Other Assets
|
1,530,005 | |||||||
TOTAL
ASSETS
|
$ | 1,891,525 | ||||||
LIABILITIES AND SHAREHOLDERS’
EQUITY
|
||||||||
Liabilities:
|
||||||||
Mortgages
and Notes Payable
|
$ | 1,357,652 | ||||||
Accounts
Payable and Accrued Expenses
|
379,722 | |||||||
Tenant
Security Deposits
|
49,450 | |||||||
Total
Liabilities
|
$ | 1,786,824 | ||||||
Shareholders’ Equity:
|
||||||||
Common
Stock, $.05 par, 5,000,000 shares authorized, 2,982,662 shares issued and
outstanding
|
$ | 149,133 | ||||||
Paid-in
Capital
|
1,191,929 | |||||||
Deficit
|
(1,236,361 | ) | ||||||
Total
Shareholders’ Equity
|
104,701 | |||||||
TOTAL
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
$ | 1,891,525 |
See
accompanying notes to financial statements.
1
MILLER INDUSTRIES,
INC.
BALANCE
SHEET
APRIL 30,
2009
ASSETS
|
||||
Investment
Property:
|
||||
Land
|
$ | 161,443 | ||
Building
and Improvements
|
1,049,908 | |||
Machinery
and Equipment
|
11,106 | |||
Furniture
and Fixtures
|
10,251 | |||
Total
Cost
|
$ | 1,232,708 | ||
Less:
Accumulated Depreciation
|
860,467 | |||
Net
Book Value
|
$ | 372,241 | ||
Other
Assets:
|
||||
Cash
|
$ | 1,477,521 | ||
Accounts
Receivable (Less Allowance for Doubtful Accounts of $
15,000)
|
10,561 | |||
Prepaid
Expenses and Other Assets
|
2,095 | |||
Deferred
Lease Incentive (Net of Accumulated Amortization -
$53,403)
|
4,195 | |||
Loan
Costs, Less Accumulated Amortization of $ 25,030
|
1,318 | |||
Deferred
Tax Assets
|
11,000 | |||
Deferred
Rent Receivable
|
- | |||
Total
Other Assets
|
$ | 1,506,690 | ||
TOTAL
ASSETS
|
$ | 1,878,931 | ||
LIABILITIES
AND SHAREHOLDERS’ DEFICIENCY
|
||||
Liabilities:
|
||||
Mortgage
and Notes Payable
|
$ | 1,394,343 | ||
Accounts
Payable and Accrued Expenses
|
428,301 | |||
Tenants’
and Customers’ Deposits
|
72,640 | |||
Total
Liabilities
|
$ | 1,895,284 | ||
Shareholders’
Deficiency:
|
||||
Common
Stock, $.05 par, 5,000,000 shares authorized, 2,982,662 shares issued and
outstanding
|
$ | 149,133 | ||
Paid-in
Capital
|
1,191,929 | |||
Deficit
|
(1,357,415 | ) | ||
Total
Shareholders’ Deficiency
|
$ | (16,353 | ) | |
TOTAL
LIABILITIES AND SHAREHOLDERS’
DEFICIENCY
|
$ | 1,878,931 |
See
accompanying notes to financial statements.
2
MILLER INDUSTRIES,
INC.
STATEMENT OF
OPERATIONS
FOR THE NINE MONTHS ENDED
JANUARY 31, 2010 AND 2009
(UNAUDITED)
Nine Months Ended
|
||||||||
01/31/10
|
01/31/09
|
|||||||
Revenues:
|
||||||||
Rental
Income
|
$ | 316,065 | $ | 390,432 | ||||
Hardware
Sales (Net)
|
223 | 400 | ||||||
Other
Income
|
5,116 | 19,783 | ||||||
Total
Revenue
|
$ | 321,404 | $ | 410,615 | ||||
Expenses:
|
||||||||
Rental
Expense (Except Interest)
|
$ | 126,194 | $ | 178,564 | ||||
Cost
of Hardware Sales
|
- | - | ||||||
Administrative
|
41,742 | 37,034 | ||||||
Interest
|
34,414 | 61,626 | ||||||
Total
Expenses
|
$ | 202,350 | $ | 277,224 | ||||
Income
(Loss) Before Tax Provision
|
$ | 119,054 | $ | 133,391 | ||||
Provision for Income Tax:
|
||||||||
Federal
Income Tax
|
$ | 31,395 | $ | 37,500 | ||||
State
Income Tax
|
6,342 | 7,125 | ||||||
Tax
Benefits of Net Operating Loss Carryover and
|
||||||||
Change
in Valuation Allowance
|
(39,737 | ) | - | |||||
Total
Provision (Credit) for Income Tax (Net of Tax Benefits and Change in
Valuation Allowance)
|
$ | (2,000 | ) | $ | 44,625 | |||
Net
Income
|
$ | 121,054 | $ | 88,766 | ||||
Income
per Common Share
|
$ | .04 | $ | .03 | ||||
Average
Shares of Common Stock Outstanding
|
2,982,662 | 2,982,662 |
See
accompanying notes to financial statements.
3
MILLER INDUSTRIES,
INC.
STATEMENT OF
OPERATIONS
FOR THE THREE MONTHS ENDED
JANUARY 31, 2010 AND 2009
(UNAUDITED)
Three Months Ended
|
||||||||
01/31/09
|
01/31/09
|
|||||||
Revenues:
|
||||||||
Rental
Income
|
$ | 129,798 | $ | 132,567 | ||||
Hardware
Sales (Net)
|
43 | - | ||||||
Other
Income
|
1,630 | 4,514 | ||||||
Total
Revenue
|
$ | 131,471 | $ | 137,081 | ||||
Expenses:
|
||||||||
Rental
Expense (Except Interest)
|
$ | 48,620 | $ | 52,680 | ||||
Cost
of Hardware Sales
|
- | - | ||||||
Administrative
|
18,017 | 15,336 | ||||||
Interest
|
9,425 | 14,212 | ||||||
Total
Expenses
|
$ | 76,062 | $ | 82,228 | ||||
Income
(Loss) Before Tax Provision
|
$ | 55,409 | $ | 54,853 | ||||
Provision (Credit) for Income
Tax:
|
||||||||
Federal
Income Tax
|
$ | 16,395 | $ | 17,900 | ||||
State
Income Tax
|
2,343 | 2,725 | ||||||
Tax
Benefits of Net Operating Loss Carryover and Change in Valuation
Allowance
|
(12,737 | ) | - | |||||
Total
Provision for Income Tax (Net of Tax Benefits and Change in Valuation
Allowance)
|
$ | 6,000 | $ | 20,625 | ||||
Net
Income
|
$ | 49,409 | $ | 34,228 | ||||
Income
per Common Share
|
$ | .02 | $ | .01 | ||||
Average
Shares of Common Stock Outstanding
|
2,982,662 | 2,982,662 |
See
accompanying notes to financial statements.
4
MILLER INDUSTRIES,
INC.
STATEMENT OF CASH
FLOWS
FOR THE NINE MONTHS ENDED
JANUARY 31, 2010 AND 2009
(UNAUDITED)
Nine Months Ended
|
||||||||
01/31/10
|
01/31/09
|
|||||||
Cash Flows From Operating
Activities:
|
||||||||
Net
Income
|
$ | 121,054 | $ | 88,766 | ||||
Adjustments
to Reconcile Net Income to Net Cash Provided by Operating
Activities:
|
||||||||
Provision
for Bad Debts
|
(12,000 | ) | 15,027 | |||||
Deferred
Rent Receivable Adjustment
|
- | 16,192 | ||||||
Depreciation
|
12,038 | 13,026 | ||||||
Amortization
|
4,464 | 11,598 | ||||||
Deferred
Tax Asset Valuation Adjustment
|
(2,000 | ) | 44,625 | |||||
Changes
in Operating Assets and Liabilities
|
(79,956 | ) | (66,577 | ) | ||||
Net
Cash Provided by Operating Activities
|
$ | 43,600 | $ | 122,657 | ||||
Cash Flows From Investing
Activities:
|
||||||||
Acquisition
of Property and Equipment
|
$ | - | $ | - | ||||
Net
Cash (Used in) Investing Activities
|
$ | - | $ | - | ||||
Cash Flows From Financing
Activities:
|
||||||||
Principal
Payments Under Borrowings
|
$ | (67,695 | ) | $ | (39,440 | ) | ||
Addition
to Debt
|
20,269 | - | ||||||
Net
Cash Provided by (Used in) Financing Activities
|
$ | (47,426 | ) | $ | (39,440 | ) | ||
Net
Increase (Decrease) in Cash
|
$ | (3,826 | ) | $ | 83,217 | |||
Cash at the Beginning of
Period
|
1,477,521 | 1,318,950 | ||||||
Cash at the End of Period
|
$ | 1,473,695 | $ | 1,402,167 | ||||
Additional
Cash Flow Information:
|
||||||||
Cash
Paid for Interest
|
$ | 34,414 | $ | 61,626 | ||||
Cash
Paid for Income Tax
|
$ | - | $ | - |
See
accompanying notes to financial statements.
5
MILLER
INDUSTRIES, INC.
NOTES TO FINANCIAL
STATEMENTS
JANUARY 31,
2010
(UNAUDITED)
NOTE A - BASIS OF
PRESENTATION:
The
accompanying unaudited financial statements have been prepared in accordance
with generally accepted accounting principles for interim financial information
and with the instructions to Article 10 of Regulation S-X. Accordingly,
they do not include all of the information and footnotes required by generally
accepted accounting principles for complete financial statements. In the
opinion of management, all adjustments (consisting of normal recurring accruals)
considered necessary for a fair presentation have been included. Operating
results for the nine month and the three month periods ending January 31, 2010
are not necessarily indicative of results that may be expected for the year
ended April 30, 2010.
For
further information, refer to the financial statements and footnotes thereto of
the Company as of April 30, 2009 and for the year ended April 30,
2009.
NOTE B - INCOME PER
SHARE:
Basic
Earnings per Share (“EPS”) is computed by dividing net income available to
common stockholders by the weighted average number of common stock shares
outstanding during the year. Diluted EPS is computed by dividing net
income available to common stockholders by the weighted average number of common
stock shares outstanding during the year plus potential dilutive instruments
such as stock options and warrants. The effect of stock options on diluted
EPS is determined through the application of the treasury stock method, whereby
proceeds received by the Company based on assumed exercises are hypothetically
used to repurchase the Company’s common stock at the average market price during
the period. Loss per share is unchanged on a diluted basis since the
Company has no potentially dilutive securities outstanding, as under the
treasury stock method, options and warrants are dilutive only when the average
market price of common stock during the period is greater than the exercise
price of the options and warrants.
NOTE C - OTHER
MATTERS:
On June 30, 2005, the Company issued
stock options to Angelo Napolitano in exchange for the benefits he has provided
to the Company through his personal guarantee of the Company’s bank loan, and
the services rendered by Mr. Napolitano in his capacity as the Company’s sole
officer and director. The options vest 100% at the grant date and expire
in 10 years from the grant date. The Company granted options to Mr.
Napolitano to purchase up to 2,017,338 shares of the Company’s common stock
during the term of the options at a price equal to $0.18 per share (Exercise
Price).
6
MILLER INDUSTRIES,
INC.
NOTES TO FINANCIAL
STATEMENTS
JANUARY 31,
2010
(UNAUDITED)
The average fair values of the options
granted during fiscal 2006 were estimated at $0.0324, using the Black-Scholes
options-pricing model, which included the following assumptions:
Stock
Price
|
$ | 0.05 | ||
Strike
Price
|
0.18 | |||
Expected
Life
|
9.17
Years
|
|||
Risk-Free
Interest Rate
|
3.80 | % | ||
Volatility
|
79.23 | % |
Approximately $65,400 was recorded as
compensation expense for fiscal 2006 related to this grant.
The following summarized information
concerning currently outstanding and exercisable options at January 31,
2009.
Options
Outstanding/Exercisable
|
||||||||||
Exercise Price
|
Number Outstanding at
01/31/10
|
Average Remaining Life
|
||||||||
$ | 0.18 | 2,017,338 | 5.42 |
NOTE D – MODIFICATION OF
NOTE AND MORTGAGE PAYABLE:
On October 27, 2009, an agreement was
executed between the Company (Borrower), City National Bank of Florida (Lender)
and Angelo Napolitano(Guarantor) to extend the maturity date of the Note to
November 13, 2019. The Guarantor has guaranteed up to the top 50% of all
sums due under the Note. Commencing November 13, 2009, the interest rate
shall be equal to ½ of 1% (.50%) per annum under the Base Rate of the Lender
adjusted annually. In the event the aggregate balance in Borrower’s
depository relationship with the Lender should fall below the sum of $ 2,000,000
for 30 consecutive days, the interest note rate shall never be lower than 4 ½ @
per annum. Depository Relationship is defined as deposits held by
Guarantor, or any direct family members and entities under his control or
entities on which he has a membership interest. Commencing December 13,
2009 and the 13th day of
each and every month to maturity, monthly principal payments of $ 3,715 plus
accrued interest shall be due and payable.
7
ITEM
2.
|
MANAGEMENT'S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
|
Results of Operations (First
Three Quarters of 2009 Fiscal Year compared to First Three Quarters of 2010
Fiscal Year)
Rental Income.
The Company's results of operations are primarily dependant upon the rental
income which it receives from leasing space in its building. Rental income
is a function of the percentage of the building which is occupied, and the level
of rental rates. Rental income during the first three quarters of the 2009
fiscal year was $390,000, compared with $316,000 in the first three quarters of
2010. The decrease in rental income was due to the loss of a
tenant.
Hardware Sales.
The Company receives revenue from the sale of replacement parts for the sliding
glass doors and windows formerly manufactured by the Company. The Company
utilizes its existing inventory of these parts to support these sales.
These sales were immaterial in 2010 and 2009.
Other Income.
The Company generated other income of $20,000 in the first three quarters of
2009 and $5,000 in 2010. Other income in 2010 and 2009 consisted of
interest income and miscellaneous income. Interest income decreased due to
lower interest rates.
Rental Expense (Excluding
Interest). The Company incurs rental expense in connection with the
leasing of its building. These expenses consist of management fees,
insurance, real estate taxes, depreciation and amortization, insurance,
maintenance and repairs, utility costs and outside services. Rental
expenses were $179,000 in the first three quarters of 2009 compared to $126,000
in the first three quarters of 2010. The decrease was due to lower taxes,
depreciation and bad debt expense.
Cost of Hardware
Sales. The Company records the cost of its hardware sales in
connection with the sale of replacement parts to customers of its former window
and sliding glass door business. These costs are tied to the level of
hardware sales. These costs were not material in the first three quarters
of 2009 or 2010.
Administrative
Expenses. The Company's administrative expenses were $42,000 in
2010, compared to $37,000 in 2009. They primarily consist of accounting
and legal fees and shareholders expenses.
Interest
Expense. The Company pays interest on the mortgage loan on its
building. Interest expense on the loan was $62,000 in 2009 compared to
$34,000 in 2010. The decrease in the amount of interest was attributable
to a decrease in the interest rate of the Company’s loan.
Provision for Income
Taxes. The Company had a tax provision of $45,000 in 2009. In
2010, the Company had a tax credit of $2,000. The tax credit arose due to
the utilization of the Company’s net operating loss carryforward and change in
valuation allowance.
Net Income. As
a result of the foregoing factors, the Company had net income of $89,000 in the
first three quarters of 2009, compared to $121,000 in the first three quarters
of 2010.
8
Results of Operations (Third
Quarter of 2009 Fiscal Year v. Third Quarter of 2010 Fiscal
Year)
Rental Income.
Rental income during the third quarter of the 2009 fiscal year was $132,000,
compared with $130,000 in the third quarter of 2010.
Hardware Sales.
Hardware sales were less than not material in the third quarter of 2009 and
2010.
Other Income.
The Company generated other income of $5,000 in the third quarter of 2009 and
$2,000 in 2010. Other income in 2009 and 2010 consisted of interest income
and miscellaneous income. The decrease was due to the lower interest rates
on the Company’s deposits.
Rental Expense (Excluding
Interest). Rental expense was $53,000 in the third quarter of 2009
and $49,000 in the third quarter of 2010. The principal components were
management fees, taxes, depreciation and amortization and insurance. There
were no material changes to these items during the quarter.
Administrative
Expenses. The Company's administrative expenses were $15,000 in
2009 and $9,000 in 2010. They primarily consist of accounting and legal
fees and shareholders expenses.
Interest
Expense. The Company pays interest on the mortgage loan on its
building. Interest expense on the loan was $14,000 in 2009 compared to
$9,000 in 2010. The decrease in the amount of interest was attributable to
a decrease in the interest rate on the Company’s loan.
Provision for Income
Taxes The Company recorded a provision for income tax of
$21,000 in 2009 and $6,000 in 2010. The decrease was due to the
utilization of the Company’s net operating loss carryforward and change in
valuation allowance.
Net Income. As
a result of the foregoing factors, the Company had net income of $34,000 in the
third quarter of 2009, compared to $49,000 in the third quarter of
2010.
Liquidity and Capital
Resources
The
Company's cash increased by $83,000 during the first nine months of the 2009
fiscal year compared with a decrease of $4,000 during the first nine months of
fiscal year 2010. The decrease in cash in 2010 was due to a lower level of
cash flow from operations and a higher level of principal payments on the
Company’s bank loan. As of January 31, 2010, the Company's cash position
was approximately $1,474,000.
Current
Operations
The
Company operates as a real estate investment and management
company. The Company is currently seeking to obtain additional
commercial tenants for its existing building.
9
The
Company's principal operating expenses consist of management and professional
fees associated with the administration of the Company, interest expense on the
Company's new mortgage loan, real estate taxes and insurance.
ITEM
3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISK.
We are a smaller reporting issuer as
defined in Item 10 of Regulation S-K and are not required to report the
quantitative and qualitative measures of market risk specified in Item 305 of
Regulation S-K.
ITEM
4. CONTROLS AND PROCEDURES
In
connection with the filing of this Form 10-Q, the Company's Chief Executive
Officer and Chief Financial Officer evaluated the effectiveness of the Company's
disclosure controls and procedures as of January 31, 2010. The
Company's Chief Executive Officer and Chief Executive Financial Officer
concluded that the Company's disclosure controls and procedures were effective
as of January 31, 2010.
There
were no changes in the Company's internal controls over financial reporting that
materially affected, or are reasonably likely to materially affect, the
Company's internal control over financial reporting during the fiscal quarter
ended January 31, 2010.
10
PART
II. OTHER INFORMATION
ITEM6.
|
EXHIBITS AND REPORTS
ON FORM 8-K
|
(a)
|
Exhibits
|
Exhibit No.
|
Description
|
|
(31.1)
|
Certification
of Chief Executive Officer pursuant to Rule 13a-14(a).
|
|
(31.2)
|
Certification
of Chief Financial Officer pursuant to Rule 13a-14(a).
|
|
(32.1)
|
|
Certification
of Chief Executive Officer and Chief Financial Officer pursuant to 18
U.S.C. Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of
2002.
|
(b)
|
Reports on Form
8-K.
|
Not
applicable.
SIGNATURE
Pursuant
to the requirements of the Securities Exchange Act of 1934, the Registrant has
duly caused this report to be signed on its behalf by the undersigned thereunto
duly authorized.
MILLER
INDUSTRIES, INC.
|
||
(Registrant)
|
||
Dated: January
10, 2011
|
By:
|
/s/ Angelo
Napolitano
|
Angelo
Napolitano
Chairman
of the Board of Directors
Chief
Executive Officer
Principal
Financial
Officer
|
11