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EX-32.1 - EXHIBIT 32.1 - MILLER INDUSTRIES INCv346389_ex32-1.htm
EX-31.2 - EXHIBIT 31.2 - MILLER INDUSTRIES INCv346389_ex31-2.htm
EX-31.1 - EXHIBIT 31.1 - MILLER INDUSTRIES INCv346389_ex31-1.htm

 

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

 

FORM 10-Q

 

þ        QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended October 31, 2011 or

 

¨        TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from __________ to ___________

 

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

 

Not Applicable
(Former Name, Former Address and Former Fiscal
Year, if Changed Since Last Report)

 

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 of such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing required 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 October 31, 2011 is 5,000,000 shares.

 

 
 

 

MILLER INDUSTRIES, INC.

FORM 10-Q

October 31, 2011

 

INDEX

 

    Page No.
     
PART I: FINANCIAL INFORMATION  
     
Item 1. Financial Statements  
     
  Balance Sheets dated as of October 31, 2011 and April 30, 2011 1
     
  Statement of Operations – Three Months Ended October 31, 2011 and 2010 3
     
  Statement of Operations –Six Months Ended October 31, 2011 and 2010 4
     
  Statement of Cash Flows - Six Months Ended October 31, 2011 and 2010 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 Disclosures 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 13

 

i
 

 

MILLER INDUSTRIES, INC.

BALANCE SHEET

October 31, 2011

(UNAUDITED)

 

ASSETS

   2011 
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   900,455 
Net Book Value  $332,253 
Other Assets:     
Cash and Cash Equivalents  $1,622,330 
Accounts Receivable (Less Allowance for     
Doubtful Accounts of $ 3,892)   4,978 
Prepaid Expenses and Other Assets   27,066 
Deferred Lease Incentive (Net of Accumulated  Amortization - $ 8,997)   14,084 
Loan Costs, Less Accumulated     
Amortization –     
Loan Costs, Less Accumulated Amortization of $ 1,626   9,109 
Deferred Tax   53,228 
Total Other Assets  $1,730,795 
      
TOTAL ASSETS  $2,063,048 
      
LIABILITIES AND SHAREHOLDERS’ EQUITY     
Liabilities:     
Mortgage and Notes Payable  $1,271,529 
Accounts Payable and Accrued Expenses   288,445 
Tenant’s Deposits and Advance Rent   49,450 
Total Liabilities  $1,609,424 
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   (1,008,478)
Total Shareholders’ Equity  $453,624 
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY  $2,063,048 

 

See Accompanying Notes to Financial Statements.

 

-1-
 

 

MILLER INDUSTRIES, INC.

BALANCE SHEET

April 30, 2011

 

ASSETS

 

   2011 
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   386,476 
Tenant’s Deposits and Advance Rent   72,033 
      
Total Liabilities  $1,7582,328 
      
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   (1,050,175)
      
Total Shareholders’ Equity  $290,887 
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY  $2,043,215 

 

See Accompanying Notes to Financial Statements.

 

-2-
 

 

STATEMENT OF OPERATIONS

FOR THE THREE MONTHS ENDED OCTOBER 31, 2011 AND 2010

(UNAUDITED)

 

   10/31/11   10/31/10 
Revenues:          
Rental Income  $98,984   $96,546 
Hardware Sales (Net)   138      
Other Income   1,641    1,588 
           
Total Revenues  $100,763   $98,134 
           
Expenses:          
Rental Expenses (Except Interest)  $55,677   $37,435 
Administrative   10,855    10,855 
Interest   8,984    9,300 
           
Total Expenses  $74,995   $57,590 
           
Income Before Tax Provision  $25,768   $40,544 
           
Provision (Benefit) for Income Tax:          
Federal Income Tax  $5,500    11,500 
State Income tax   1,300    2,250 
           
Total Provision for Income Tax   6,800   $13,750 
           
Net Income  $18,968   $26,794 
           
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 SIX MONTHS ENDED OCTOBER 31, 2011 AND 2010

(UNAUDITED)

 

   10/31/11   10/31/10 
Revenues:          
Rental Income  $197,967   $193,017 
Hardware Sales (Net)   138    134 
Other Income   3,309    3,143 
           
Total Revenues  $201,414   $196,294 
           
Expenses:          
Rental Expenses (Except Interest)  $105,008   $90,252 
Administrative   22,441    21,227 
Interest   16,269    16,838 
           
Total Expenses  $143,718   $128,317 
           
Income Before Tax Provision  $57,696   $67,977 
           
Provision (Benefit) for Income Tax:          
Federal Income Tax  $13,000   $17,500 
State Income Tax   3,000    3,700 
Total Provision for Income Tax  $16,000   $21,200 
           
Net Income  $41,696   $46,777 
           
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 SIX MONTHS ENDED OCTOBER 31, 2011 AND 2010

(UNAUDITED)

 

    10/31/11    10/31/10 
Cash Flows from Operating Activities:      
Net Income (Loss)  $41,696   $46,777 
Adjustments to Reconcile Net Income to Net Cash          
Provided by (used for) Operating Activities          
Provision for Bad Debts   (250)   (700)
Depreciation   7,971    8,037 
Amortization   3,121    3,372 
Deferred Tax Asset Valuation Adjustment   16,000    21,200 
Changes in Operating Assets and Liabilities   (139,658)   3,708 
Net Cash Provided by Operating Activities  $(71,120)  $82,394 
           
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  $(22,290)  $(22,290)
Proceeds from stock option purchase    121,040    - 
Net Cash Provided by (used by) Financing Activities  $98,750   $(22,290)
           
Net Increase in Cash and Cash Equivalents  $27,630   $60,104 
           
Cash and Cash Equivalents at the Beginning of Year   1,594,700    1,512,525 
Cash and Cash Equivalents at the End of Quarter  $1,622,330   $1,572,629 
           
Additional Cash Flow Information:          
Cash Payments During the Year          
Interest  $7,285   $18,576 
Income Taxes  $-   $- 

 

See Accompanying Notes to Financial Statements.

 

-5-
 

 

MILLER INDUSTRIES, INC.

NOTES TO FINANCIAL STATEMENTS

OCTOBER 31, 2011

 

(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 six month period ending October 31, 2011 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.

Miller Industries, Inc.

 

-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 were 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-
 

 

A summary of the status of the company’s stock option agreement as of October 31, 2011 and 2010, and changes during the years then ended were as follows:

 

The options were exercised on June 7, 2011.

 

   2011   2010 
                 
   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    -    - 
Cancelled   -    -    -    - 
                     
Outstanding/Exercisable, October 31   -    -    2,017,338   $.06 

 

-8-
 

 

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

 

Results of Operations (Second Quarter of 2012 Fiscal Year compared to Second 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 during the second quarter of 2011 was $98,000, compared to $101,000 in the second 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 second quarter 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 $37,000 through the second quarter of 2011 and $56,000 through the second quarter of 2012.

 

Administrative Expenses. The Company’s administrative expenses were $11,000 in the second quarters of fiscal years 2011 and 2012.

 

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

 

Provision for Income Taxes.  The Company had a tax provision of $14,000 in the second quarter of fiscal 2011 and $7,000 in 2012.  

 

Net Income.  As a result of the foregoing factors, The Company had net income of $27,000 in the second quarters of fiscal 2011 and $19,000 in second quarter of 2012.

 

Results of Operations (First Six Months of 2012 Fiscal Year compared to First Six 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 during the first six months of 2011 was $193,000, compared to $198,000 in the first six 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 $3,000 through the first six 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 $90,000 through the first six months of 2011 and $105,000 through first six months of 2012.

 

Administrative Expenses. The Company’s administrative expenses were $22,000 in the first six months of fiscal years 2011 and 2012.

 

Interest Expense. The Company pays interest on the mortgage loan on its building.  Interest expense on the loan was $17,000 in the first six months of fiscal year 2011 and $16,000 in 2012.

 

Provision for Income Taxes.  The Company had a tax provision of $21,000 in the first six months of fiscal 2011 and $16,000 in 2012.  

 

Net Income.  As a result of the foregoing factors, the Company had net income of $47,000 in the first six months of fiscal 2011 and $42,000 in first six months of 2012.

 

Liquidity and Capital Resources

 

The Company’s cash increased by $60,000 during the first six months of fiscal year 2011 compared to an increase of $28,000 during the first six months of fiscal year 2012. During the first six months of fiscal year 2012, the Company received a cash infusion of $121,000 from the exercise of stock options.  The Company used the proceeds to reduce the Company’s accounts payables. As of July 31, 2011, The Company’s cash position was approximately $1,622,000.

 

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.

 

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.

 

-10-
 

 

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 October 31, 2011.  The Company’s Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures were effective as of October 31, 2011.

 

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 October 31, 2011.

 

ITEM 5. OTHER MATTERS AND SUBSEQUENT EVENTS

 

1. 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.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.

 

-12-
 

 

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

 

-13-