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EX-31.2 - EXHIBIT 31.2 - MILLER INDUSTRIES INCv346390_ex31-2.htm
EX-31.1 - EXHIBIT 31.1 - MILLER INDUSTRIES INCv346390_ex31-1.htm
EX-32.1 - EXHIBIT 32.1 - MILLER INDUSTRIES INCv346390_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, 2012

 

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, 2012 is 5,000,000 shares.

 

 
 

 

MILLER INDUSTRIES, INC.

FORM 10-Q

 January 31, 2012

 

INDEX

 

    Page No.
     
PART I: FINANCIAL INFORMATION  
     
Item 1. Financial Statements  
     
  Balance Sheets dated as of January 31, 2012 and April 30, 2011 1
     
  Statement of Operations - Three Months ended January 31, 2012 and 2011 3
     
  Statement of Operations - Nine Months ended, January 31, 2012 and 2011 4
     
  Statement of Cash Flows - Nine Months ended, dated as of January 31, 2012 and 2011 5
     
  Notes to Financial Statements 6
     
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 9
     
Item 3. Quantitative and Qualitative Disclosure about Market Risk 11
     
Item 4. Controls and Procedures 11
     
Item 5. Other Matters and Subsequent Events 11
     
PART II: OTHER INFORMATION  
   
Items 1 to 6 12
   
Signatures 12

 

 
 

 

MILLER INDUSTRIES, INC.

BALANCE SHEET

January 31, 2012

(UNAUDITED)

 

Investment Property:     
Land  $161,443 
Building and Improvements   1,049,908 
Machinery and Improvement   11,106 
Furniture and Fixtures   10,251 
Total Cost  $1,232,708 
Less Accumulated Depreciation Net     
Book Value   904,441 
Net Book Value  $328,267 
      
Other Asset     
Cash and Cash Equivalents  $1,572,805 
Accounts Receivable (less Allowance for Doubtful Accounts of $3,192)    
Prepaid Expenses and Other Assets   18,378 
Deferred Lease Incentive (Net of Accumulated Amortization - $10,505)   12,576 
Loan Costs, Less Accumulated Amortization of $1,679   9,056 
Deferred Tax   48,103 
Total Other Assets  $1,660,918 
      
TOTAL ASSETS  $1,989,185 
      
LIABILITIES AND SHAREHOLDERS’ EQUITY     
Liabilities:     
Mortgages and Notes Payable  $1,260,384 
Accounts Payable and Accrued Expenses   199,036 
Tenant Security Deposits- Rent Paid in Advance   49,450 
Total Liabilities  $1,508,870 
      
Shareholders’ Equity:     
Common Stock, $.05 par, 5,000,000 shares authorized, 5,000,000 shares issued and outstanding  $250,000 
Paid-in Capital   1,212,102 
Deficit   (981,787)
Total Shareholders’ Equity   480,315 
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY  $1,989,185 

 

See Accompanying Notes to Financial Statements

 

1
 

 

MILLER INDUSTRIES, INC.

BALANCE SHEET

APRIL 30, 2011

 

   2011 
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   892,483 
Net Book Value  $340,225 
      
Other Assets:     
Cash and Cash Equivalents  $1,594,700 
Accounts Receivable (Less Allowance for Doubtful Accounts of $4,142)    
Prepaid Expenses and Other Assets   12,748 
Deferred Lease Incentive (Net of Accumulated Amortization - $5,982)   17,100 
Loan Costs, Less Accumulated Amortization of $1,521   9,214 
Deferred Tax   69,228 
Total Other Assets  $1,702,990 
TOTAL ASSETS  $2,043,215 
      
LIABILITIES AND SHAREHOLDERS’ EQUITY 
      
Liabilities:     
Mortgage and Notes Payable  $1,293,819 
Accounts Payable and Accrued Expenses   386,479 
Tenant’s Deposits and Advance Rent   72,033 
Total Liabilities     
   $1,752,328 
Shareholders’ Equity:     
Common Stock - $.05 par, 5,000,000 shares Authorized; 2,982,662 shares issued and Outstanding     
Paid-In Capital  $149,133 
Deficit   1,191,929 
Total Shareholders’ Equity   (1,050,175)
TOTAL LIABILITIES AND  $290,887 
SHAREHOLDER’S EQUITY  $2,043,215 

 

See Accompanying Notes to Financial Statements.

 

2
 

 

MILLER INDUSTRIES, INC.

STATEMENT OF OPERATIONS

FOR THE THREE MONTHS ENDED JANUARY 31, 2012 AND 2011

(UNAUDITED)

 

   1/31/12   1/31/11 
Revenues:          
Rental Income  $100,873   $93,248 
Hardware Sales (Net)          
Other Income   1,443    1,565 
           
Total Revenues  $102,316   $94,813 
           
Expenses:          
Rental Expenses (Except Interest)  $36,960   $40,818 
Administrative   24,634    30,050 
Interest   8,906    9,222 
Total Expenses  $70,500   $80,090 
           
Income Before Tax Provision  $31,816   $14,723 
           
Provision (Benefit) for Income Tax:          
Federal Income Tax  $1,125   $500 
State Income Tax   4,000    600 
           
Total Provision for Income Tax  $5,125   $1,100 
           
Net Income  $26,691   $13,623 
           
Income per Common Share (Basic)  $.01   $.01 
           
Average Shares of Common Stock Outstanding   5,000,000    2,982,662 

 

See Accompanying Notes to Financial Statements.

 

3
 

 

MILLER INDUSTRIES, INC.

STATEMENT OF OPERATIONS

FOR THE NINE MONTHS ENDED JANUARY 31, 2012 AND 2011

(UNAUDITED)

 

   1/31/12   1/31/11 
Revenues:          
Rental Income  $298,840   $286,265 
Hardware Sales (Net)       134 
Other Income   4,752    4,708 
           
Total Revenues  $303,592   $291,107 
           
Expenses:          
Rental Expenses (Except Interest)  $141,829   $131,070 
Administrative   47,075    51,277 
Interest   25,175    26,060 
           
Total Expenses  $214.079   $208,407 
Income Before Tax Provision  $89,513   $82,700 
           
Provision (Benefit) for Income Tax:          
Federal Income Tax  $17,000   $18,000 
State Income Tax   4,125    4,300 
Total Provision for Income Tax          
   $21,125   $22,300 
           
Net Income  $68,388   $60,400 
           
Income per Common Share (Basic)  $.01   $.02 
           
Average Shares of Common Stock Outstanding   4,562,910    2,982,662 

 

See Accompanying Notes to Financial Statements.

 

4
 

 

MILLER INDUSTRIES, INC.

STATEMENT OF CASH FLOWS

FOR THE NINE MONTHS ENDED JANUARY 31, 2012 AND 2011

(UNAUDITED)

 

   1/31/12   1/31/11 
Cash Flows from Operating Activities:          
           
Net Income (Loss)  $68,388   $60,400 
Adjustments to Reconcile Net Income to Net Cash Provided by (used for) Operating Activities:          
Provision for Bad Debts      (2,100
Depreciation   11,956    12,056 
Amortization   4,680    5,058 
Deferred Tax Asset Valuation Adjustment   21,125    22,300 
Changes in Operating Assets and Liabilities   (215,651)   (39,757)
           
Net Cash Provided by Operating Activities  $(109,502)  $57,957 
           
Cash Flows from Investing Activities:          
Acquisition of Property, Equipment, and Intangible  $-   $- 
           
Net Cash (used by) Investing Activities  $-   $- 
           
Cash Flows from Financing Activities:          
Principal Payments Under Borrowings  $(33,434)  $(33,435)
Proceeds from stock option purchase   121,040    - 
           
Net Cash Provided by (used by) Financing Activities  $87,606   $(33,435)
           
Net Increase in Cash and Cash Equivalents  $(21,896)  $24,522 
           
Cash and Cash Equivalents at the Beginning of Year   1,594,700    1,512,525 
Cash and Cash Equivalents at the End of Quarter  $1,572,804   $1,537,047 
           
Additional Cash Flow Information:          
Cash Payments During the Year          
Interest  $25,175   $26,060 
Income Taxes  $-   $- 

 

See Accompanying Notes to Financial Statements.

 

5
 

 

MILLER INDUSTRIES, INC.

NOTES TO FINANCIAL STATEMENTS

JANUARY 31, 2012

(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 period ending January 31, 2012 are not necessarily indicative of results that may be expected for the year ended April 30, 2012.

 

For further information refer to the financial statements and footnotes thereto of the Company as of April 30, 2011 and for the year ended April 30, 2011.

 

NOTE B - Earnings Per Share

 

Basic earnings per share (“EPS”) is computed by dividing net income available to common stockholders by the weighted-average number of common shares outstanding during the period, excluding the effects of any potentially dilutive securities. Diluted EPS gives effect to all dilutive potential of shares of common stock outstanding during the period including stock options or warrants, using the treasury stock method (by using the average stock price for the period to determine the number of shares assumed to be purchased from the exercise of stock options or warrants). Diluted EPS excludes all dilutive potential of shares of common stock if their effect is anti-dilutive.

 

NOTE C - Use of Estimates

 

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes Actual results could differ from those estimates. The most significant estimates included in the preparation of the financial statements are related to income taxes, asset lives, accruals and valuation allowances.

 

6
 

 

Miller Industries, Inc.

Notes to Financial Statements

 

NOTE D – Stock Option Agreement

 

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 $ .18 per share (Exercise Price).

 

The average fair values of the options granted during fiscal 2006 were estimated at $.0324, using the Black-Scholes options-pricing model, which included the following assumptions:

 

   2006 
Stock Price  $.05 
Strike Price  $.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.

 

On February 22, 2010, the Company modified the option previously granted to Angelo Napolitano that entitled him to acquire 2,017,338 shares of the Company’s common stock. Under the terms of the modification, the exercise price for the options was reduced from $0.18 per share to $0.06 per share. The Company reduced the exercise price of the option in consideration of Mr. Napolitano’s guarantee of the Company’s bank loan and his services as the Company’s president. The average fair values of the options modified during fiscal year 2010 were estimated at $.0130 using the Black-Scholes options-pricing model, which included the following assumptions:

 

   2010 
Stock Price  $.04 
Strike Price  $.06 
Expected Life   5.17 years 
Risk-Free Interest Rate   3.78%
Volatility   44.6%

 

The approximate compensation value of the modified option at February 22, 2010 is $26,000 which is less than the $65,000 compensation cost of the original option. Under FASB Statement 123R, the accounting for a modification, total compensation cost for the award should generally not be less than the awards original fair value. Therefore, if fair value of the modified award is less than fair value of the original award on the modification date, the grant date value is not reduced.

 

7
 

 

Miller Industries, Inc.

Notes to Financial Statements

 

A summary of the status of the company’s stock option agreement as of January 31, 2012 and 2011, and changes during the years then ended were as follows:

 

The options were exercised on June 7, 2011.

 

   1/31/12   1/31/11 
                 
   Shares Subject
to Option
   Exercise Price
Per Share
   Shares Subject
to Option
   Exercise Price
Per Share
 
                 
Outstanding, May 1   2,017,338   $.06    2,017,338   $.06 
Granted   -    -    -    - 
                     
Exercised   2,017,338   $.06    2,017,338   $.06 
Cancelled   -    -    -    - 
                     
Outstanding/Exercisable, October 31   -    -    -    - 

 

8
 

 

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

 

Results of Operations (Third Quarter of 2012 Fiscal Year compared to Third Quarter of 2011 Fiscal Year)

 

Rental Income. The Company’s results of operations are primarily dependent 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 through the third quarter of 2011 was $93,000, compared to $102,000 in the third quarter of 2012.

 

Hardware Sales (net). 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. Net sales were immaterial in 2011 and 2012.

 

Other Income. The Company generated other income of less than $2,000 during the third quarters of fiscal year 2011 and 2012. Other income in these quarters consisted of interest income and miscellaneous income.

 

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, maintenance and repairs, utility costs and outside services. Rental expenses were $131,000 through the third quarter of 2011 and $148,000 through the third quarter of 2012.

 

Administrative Expenses. The Company’s administrative expenses were $41,000 in the third quarter of fiscal years 2011 and $37,000 for 2012.

 

Interest Expense. The Company pays interest on the mortgage loan on its building. Interest expense on the loan was $9,000 in the third quarter of fiscal year 2011 and 2012.

 

Provision for Income Taxes. The Company had a tax provision of $1,000 in the third quarter of fiscal 2011 and $5.000 in 2012.

 

Net Income. As a result of the foregoing factors, The Company had net income of $14,000 in the third quarter of fiscal 2011 and $27,000 in third quarter of 2012.

 

Results of Operations (First Nine Months of 2012 Fiscal Year compared to First Nine Months of 2011 Fiscal Year)

 

Rental Income. The Company’s results of operations are primarily dependent 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 through the first nine months of 2011 was $286,000, compared to $299,000 in the first nine months of 2012.

 

9
 

 

Hardware Sales (net). 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. Net sales were immaterial in 2011 and 2012.

 

Other Income. The Company generated other income of $5,000 through the first nine months of fiscal year 2011 and 2012. Other income in these quarters consisted of interest income and miscellaneous income.

 

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, maintenance and repairs, utility costs and outside services. Rental expenses were $131,000 through the first nine months of 2011 and $142,000 through the first nine months of 2012.

 

Administrative Expenses. The Company’s administrative expenses were $51,000 in the first nine months of fiscal years 2011 and $47,000 for the first nine months 2012.

 

Interest Expense. The Company pays interest on the mortgage loan on its building. Interest expense on the loan was $26,000 in the first three quarters of fiscal year 2011 and $25,000 in 2012.

 

Provision for Income Taxes. The Company had a tax provision of $22,000 in the first three quarter of fiscal 2011 and $21,000 in 2012. The provision was more than offset by the Company’s net operations loss carry forward.

 

Net Income. As a result of the foregoing factors, The Company had net income of $60,000 in the first three quarters of fiscal 2011 and $68,000 in the first three quarters of 2012.

 

Liquidity and Capital Resources

 

The Company’s cash increased by $25,000 during the first nine months of fiscal year 2011 compared to a decrease of $22,000 during the first nine months of fiscal year 2012. In the first nine months, the Company received a cash infusion of $121,000 from the exercise of stock options. The proceeds were used to reduce the Company’s accounts payables. As of January 31, 2012, the Company’s cash position was approximately $1,573,000.

 

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.

 

10
 

 

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 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, 2012. The Company’s Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures were effective as of January 31, 2012.

 

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, 2012.

 

ITEM 5. OTHER MATTERS AND SUBSEQUENT EVENTS

 

The State of California State Controller filed a complaint against the Company in the Superior Court of California. In the Complaint, the State asserts that the Company had failed to report the alleged abandonment of certain shares of the Company’s common stock in a timely manner and, as a result, the Company was obligated to pay the State the amount of $102,230. The State and the Company have entered into a Tolling Agreement in order to allow the Company to investigate this matter. The investigation is on-going. The Company is currently unable to assess whether the claim has any validity.

 

11
 

 

PART II. OTHER INFORMATION

 

ITEM 6.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:  June 4, 2012 By: /s/  Angelo Napolitano
    Angelo Napolitano
    Chairman of the Board of Directors
    Chief Executive Officer
    Principal Financial Officer

 

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