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EX-32.1 - EXHIBIT 32.1 - MILLER INDUSTRIES INCv346439_ex32-1.htm
EX-31.2 - EXHIBIT 31.2 - MILLER INDUSTRIES INCv346439_ex31-2.htm
EX-31.1 - EXHIBIT 31.1 - MILLER INDUSTRIES INCv346439_ex31-1.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 July 31, 2011

 

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 July 31, 2011 is 5,000,000 shares.

  

 
 

  

MILLER INDUSTRIES, INC. 

FORM 10-Q

July 31, 2011

 

INDEX

 

    Page No.
PART I: FINANCIAL INFORMATION  
     
Item 1. Financial Statements  
     
  Balance Sheet as of July 31, 2011 1
     
  Balance Sheet of April 30, 2011 2
     
  Statement of Operations - Three Months Ended July 31, 2011 and 2010 3
     
  Statement of Cash Flows - Three Months Ended July 31, 2011 and 2010 4
     
  Notes to Financial Statements 5
     
Item 2. Management’s Discussion and Analysis of Financial  
  Condition and Results of Operations 8
     
Item 3. Quantitative and Qualitative Disclosure about Market Risk 9
     
Item 4. Controls and Procedures 9
     
PART II: OTHER INFORMATION  
   
Items 1 to 6   10
     
Signatures   11

  

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MILLER INDUSTRIES, INC.

BALANCE SHEET

JULY 31, 2011

(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        896,470 
Net Book Value       $336,238 
           
 Other Assets:          
Cash and Cash Equivalents  $1,612,290      
Accounts Receivable (less Allowance for Doubtful Accounts of $4,142)   -      
Prepaid Expenses and Other Assets   4,479      
Deferred Lease Incentive (Net of Accumulated  Amortization - $7,490)   15,592      
Deferred Tax   60,028      
Loan Costs, Less Accumulated Amortization of $1,573   9.162      
Total Other Assets        1,701,551 
TOTAL ASSETS       $2,037,789 
           
           
LIABILITIES AND SHAREHOLDERS’ EQUITY          
Liabilities:          
Mortgages and Notes Payable  $1,282,674      
Accounts Payable and Accrued Expenses   248,427      
Tenant Security Deposits and Advanced Rent   72,032      
Total Liabilities       $1,603,133 
           
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   (1,027,446)     
Total Shareholders’ Equity        434,656 
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY       $2,037,789 

 

See Accompanying Notes to Financial Statements.

 

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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.

 

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MILLER INDUSTRIES, INC.

STATEMENT OF OPERATIONS

FOR THE THREE MONTHS ENDED JULY 31, 2011 AND 2010

(UNAUDITED)

 

   Three Months Ended 
   7/31/10   7/31/11 
         
Revenues:          
Rental Income  $96,471   $98,984 
Hardware Sales (Net)   134    - 
Other Income   1,555    1,668 
           
Total Revenue  $98,160   $100,652 
Expenses:          
Rental Expense (Except Interest)  $52,817   $51,269 
Administrative   10,372    10,169 
Interest   7,538    7,285 
Total Expenses  $70,727   $68,723 
Income Before Tax Provision  $27,433   $31,929 
           
Provision for Income Tax:          
Federal Income Tax  $6,000   $7,500 
State Income Tax   1,450    1,700 
Total Provision (Credit) for Income Tax          
   $7,450   $9,200 
           
Net Income  $19,983   $22,729 
           
Income per Common Share  $.01   $.01 
           
Average Shares of Common Stock Outstanding   2,982,662    4,125,820 

 

See Accompanying Notes to Financial Statements.

 

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MILLER INDUSTRIES, INC.

STATEMENT OF CASH FLOWS

FOR THE THREE MONTHS ENDED JULY 31, 2011 AND 2010

(UNAUDITED)

 

   Three Months Ended 
   7/31/10   7/31/11 
         
Cash Flows From Operating Activities:          
           
Net Income  $19,983   $22,729 
Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities:          
Depreciation   4,019    3,986 
Amortization   1,686    1,560 
Deferred Tax Asset Valuation Adjustment   7,450    - 
Changes in Operating Assets and Liabilities   4,200    (120,580)
Net Cash Provided by Operating Activities  $37,338   $(92,305)
           
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  $(11,145)  $(11,145)
Addition to Debt   -    121,040 
           
Net Cash Provided by (Used in) Financing Activities  $(11,145)  $109,895
           
Net Increase in Cash and Cash Equivalents  $26,193   $17,590 
           
Cash at the Beginning of Year   1,512,525    1,594,700 
Cash at the End of Year   $1,538,718   $1,612,290 
           
Additional Cash Flow Information:          
Cash Paid for Interest  $9,277   $7,285 
Cash Paid for Income Tax  $-   $- 

 

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MILLER INDUSTRIES, INC.

NOTES TO FINANCIAL STATEMENTS

JULY 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 three month period ending July 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:

 

In accordance with Financial Accounting Standards No. 128, basic earnings per share is computed based on the weighted-average number of common shares outstanding during each year and excludes any potential dilution. Diluted earnings per share is based on the weighted-average number of common shares outstanding as well as potentially dilutive common shares, which in the Company’s case include shares issuable under the stock option agreement. The Company’s outstanding options are not included in the computation of basic or diluted earnings per share since they are 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.

 

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 $0.18 per share (Exercise Price).

 

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Miller Industries, Inc.

Notes to Financial Statements

 

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.

 

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 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 the fair value of the modified award is less than the fair value of the original award on the modification date, the grant date value is not reduced.

 

The options were exercised on June 7, 2011.

 

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Miller Industries, Inc.

Notes to Financial Statements

 

A summary of the status of the Company’s stock option agreement as of April 30, 2011 and 2010, and changes during the years then ended were as follows:

 

   2010   2011 
   Shares   Exercise   Shares   Excise 
   Subject   Price Per   Subject   Price Per 
   To Option   Share   To Option   Share 
Outstanding, May 1   2,017,338   $.06    2,017,338   $.06 
Granted   -    -    -    - 
Exercised   -    -    2,017,338   $.06 
Cancelled   -    -    -    - 
Outstanding/Exercisable, April 30   2,017,338   $.06    -    - 

  

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Miller Industries, Inc.

Notes to Financial Statements

 

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

 

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 quarter of 2011 was $96,000, compared to $101,000 in the first 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 $1,700 in the first quarter of fiscal year of both 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 $53,000 in the first quarter of 2011 and $51,000 in the first quarter of 2012.

 

Administrative Expenses. The Company’s administrative expenses were approximately $10,000 in the first 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 $7,600 in the first quarter of fiscal year 2011 and $7,300 in 2012.

 

Provision for Income Taxes. The Company had a tax provision of $7,500 in the first quarter of fiscal 2011 and $9,200 in 2012.

 

Net Income. As a result of the foregoing factors, the Company had net income of $20,000 in the first quarter of fiscal 2011 and $23,000 in first quarter of 2012.

 

Liquidity and Capital Resources

 

The Company’s cash increased by $26,000 during the first three months of fiscal year 2011 compared to an increase of $18,000 during the first three months of fiscal year 2012. During 2012, the Company received $121,000 from the exercise of stock options which was then used to reduce the Company’s accounts payables. As of July 31, 2011, The Company’s cash position was approximately $1,612,000.

 

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Miller Industries, Inc.

Notes to Financial Statements

 

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.

 

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

  

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Miller Industries, Inc.

Notes to Financial Statements

 

PART II. OTHER INFORMATION

 

ITEM 1.LEGAL PROCEEDINGS

 

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 entered into a Tolling Agreement in order to allow the Company to investigate this matter. The investigation is on-going.

 

ITEM 2.UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

 

On June 7, 2011, Angelo Napolitano, the Company’s chief executive officer, exercised his stock option and acquired 2,017,338 shares of its common stock from the Company at a price of $.06 per share. The shares sold were not registered under the Securities Act of 1933 (the “Securities Act”), in reliance on the exemption provided by Section 4(2) thereof as a transaction by an issuer not involving a public offering.

 

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.

 

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Miller Industries, Inc.

Notes to Financial Statements

 

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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