Attached files
| file | filename |
|---|---|
| EX-31.2 - MILLER INDUSTRIES INC | v208522_ex31-2.htm |
| EX-32.1 - MILLER INDUSTRIES INC | v208522_ex32-1.htm |
| EX-31.1 - MILLER INDUSTRIES INC | v208522_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, 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 July 31, 2010 is 2,982,662
shares.
MILLER INDUSTRIES,
INC.
FORM
10-Q
July 31,
2010
INDEX
|
Page
No.
|
||||
|
PART
I:
|
FINANCIAL
INFORMATION
|
|||
|
Item
1.
|
Financial
Statements
|
|||
|
Balance
Sheet as of July 31, 2010
|
3 | |||
|
Balance
Sheet of April 30, 2010
|
4 | |||
|
Statement
of Operations - Three Months Ended July 31, 2010 and 2009
|
5 | |||
|
Statement
of Cash Flows - Three Months Ended July 31, 2010 and 2009
|
6 | |||
|
|
Notes
to Financial Statements
|
8 | ||
|
Item
2.
|
Management’s
Discussion and Analysis of Financial Condition and Results of
Operations
|
|||
|
Item
3.
|
Quantitative
and Qualitative Disclosure about Market Risk
|
9 | ||
|
Item
4.
|
Controls
and Procedures
|
10 | ||
|
PART
II: OTHER INFORMATION
|
||||
|
Items
1 to 6
|
11 | |||
|
Signatures
|
11 | |||
-i-
MILLER INDUSTRIES,
INC.
BALANCE
SHEET
JULY 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
|
880,560 | |||||||
|
Net
Book Value
|
$ | 352,148 | ||||||
|
Other Assets:
|
||||||||
|
Cash
and Cash Equivalents
|
$ | 1,538,718 | ||||||
|
Accounts
Receivable (less Allowance for Doubtful Accounts of $
6,942)
|
- | |||||||
|
Deferred
Tax Asset
|
107,050 | |||||||
|
Prepaid
Expenses and Other Assets
|
8,012 | |||||||
|
Deferred
Lease Incentive (Net of Accumulated Amortization - $
32,131)
|
19,369 | |||||||
|
Loan
Costs, Less Accumulated Amortization of $ 735
|
10,000 | |||||||
|
Total
Other Assets
|
1,683,149 | |||||||
|
TOTAL
ASSETS
|
$ | 2,035,297 | ||||||
|
LIABILITIES AND SHAREHOLDERS’
EQUITY
|
||||||||
|
Liabilities:
|
||||||||
|
Mortgages
and Notes Payable
|
$ | 1,327,254 | ||||||
|
Accounts
Payable and Accrued Expenses
|
400,902 | |||||||
|
Tenant
Security Deposits and Advanced Rent
|
70,423 | |||||||
|
Total
Liabilities
|
$ | 1,798,579 | ||||||
|
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
|
(1,104,344 | ) | ||||||
|
Total
Shareholders’Equity
|
236,718 | |||||||
|
TOTAL
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
$ | 2,035,297 | ||||||
See
Accompanying Notes to Financial Statements.
-1-
MILLER INDUSTRIES,
INC.
BALANCE
SHEET
APRIL 30,
2010
|
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
|
876,541 | |||
|
Net
Book Value
|
$ | 356,167 | ||
|
Other Assets:
|
||||
|
Cash
|
$ | 1,512,525 | ||
|
Accounts
Receivable (Less Allowance for Doubtful Accounts of $
6,942)
|
- | |||
|
Prepaid
Expenses and Other Assets
|
14,854 | |||
|
Deferred
Lease Incentive (Net of Accumulated Amortization -
$31,020)
|
20,768 | |||
|
Loan
Costs, Less Accumulated Amortization of $ 447
|
10,288 | |||
|
Deferred
Tax Assets
|
114,500 | |||
|
Total
Other Assets
|
$ | 1,672,935 | ||
|
TOTAL
ASSETS
|
$ | 2,029,102 | ||
|
LIABILITIES AND SHAREHOLDERS’
EQUITY
|
||||
|
Liabilities:
|
||||
|
Mortgage
and Notes Payable
|
$ | 1,338,399 | ||
|
Accounts
Payable and Accrued Expenses
|
403,545 | |||
|
Tenants’
and Customers’ Deposits
|
70,423 | |||
|
Total
Liabilities
|
$ | 1,812,367 | ||
|
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
|
(1,124,327 | ) | ||
|
Total
Shareholders’ Equity
|
$ | 216,735 | ||
|
TOTAL
LIABILITIES AND
|
||||
|
SHAREHOLDERS’
EQUITY
|
$ | 2,029,102 | ||
See
Accompanying Notes to Financial Statements
-2-
MILLER INDUSTRIES,
INC.
STATEMENT OF
OPERATIONS
FOR THE THREE MONTHS ENDED
JULY 31, 2010 AND 2009
(UNAUDITED)
|
Three Months Ended
|
||||||||
|
7/31/10
|
7/31/09
|
|||||||
|
Revenues:
|
||||||||
|
Rental
Income
|
$ | 96,471 | $ | 92,618 | ||||
|
Hardware
Sales (Net)
|
134 | 83 | ||||||
|
Other
Income
|
1,555 | 1,746 | ||||||
|
Total
Revenue
|
$ | 98,160 | $ | 94,447 | ||||
|
Expenses:
|
||||||||
|
Rental
Expense (Except Interest)
|
$ | 52,817 | $ | 47,519 | ||||
|
Administrative
|
10,372 | 11,226 | ||||||
|
Interest
|
7,538 | 11,264 | ||||||
|
Total
Expenses
|
$ | 70,727 | $ | 70,009 | ||||
|
Income
Before Tax Provision
|
$ | 27,433 | $ | 24,438 | ||||
|
Provision for Income Tax:
|
||||||||
|
Federal
Income Tax
|
$ | 6,000 | $ | 5,000 | ||||
|
State
Income Tax
|
1,450 | 1,500 | ||||||
|
Tax
Benefits of Net Operating Loss
|
||||||||
|
Carryforward
and change in Valuation Allowace
|
- | (13,500 | )- | |||||
|
Total
Provision (Credit) for Income Tax
|
||||||||
|
(Net
of Tax Benefits and Change in Valuation Allowance)
|
$ | 7,450 | $ | (7,000 | ) | |||
|
Net
Income
|
$ | 19,983 | $ | 31,438 | ||||
|
Income
per Common Share
|
$ | .01 | $ | .01 | ||||
|
Average
Shares of Common Stock Outstanding
|
2,982,662 | 2,982,662 | ||||||
See
Accompanying Notes to Financial Statements.
-3-
MILLER INDUSTRIES,
INC.
STATEMENT OF CASH
FLOWS
FOR THE THREE MONTHS ENDED
JULY 31, 2010 AND 2009
(UNAUDITED)
|
Three Months Ended
|
||||||||
|
7/31/10
|
7/31/09
|
|||||||
|
Cash Flows From Operating
Activities:
|
||||||||
|
Net
Income
|
$ | 19,983 | $ | 31,438 | ||||
|
Adjustments
to Reconcile Net Income to Net Cash Provided by Operating
Activities:
|
||||||||
|
Depreciation
|
4,019 | 4,232 | ||||||
|
Amortization
|
1,686 | 3,576 | ||||||
|
Deferred
Tax Asset Valuation Adjustment
|
7,450 | (7,000 | ) | |||||
|
Changes
in Operating Assets and Liabilities
|
4,200 | (23,553 | ) | |||||
|
Net
Cash Provided by Operating Activities
|
$ | 37,338 | $ | 8,693 | ||||
|
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 | ) | $ | (20,874 | ) | ||
|
Addition
to Debt
|
- | 19,956 | ||||||
|
Net
Cash Provided by (Used in) Financing Activities
|
$ | (11,145 | ) | $ | (918 | ) | ||
|
Net
Increase in Cash and Cash Equivalents
|
$ | 26,193 | $ | 7,775 | ||||
|
Cash at the Beginning of
Year
|
1,512,525 | 1,477,521 | ||||||
|
Cash at the End of Year
|
$ | 1,538,718 | $ | 1,485,296 | ||||
|
Additional
Cash Flow Information:
|
||||||||
|
Cash
Paid for Interest
|
$ | 9,277 | $ | 13,889 | ||||
|
Cash
Paid for Income Tax
|
$ | - | $ | - | ||||
-4-
MILLER INDUSTRIES,
INC.
NOTES TO FINANCIAL
STATEMENTS
JULY 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 three
month period ending July 31, 2010 are not necessarily indicative of results that
may be expected for the year ended April 30, 2011.
For
further information, refer to the financial statements and footnotes thereto of
the Company as of April 30, 2010 and for the year ended April 30,
2010.
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 earning
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. At July 31,
2010 potentially dilutive securities consist of an option that could be
converted into 2,017,338 common shares.
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).
-5-
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 entitle 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.
A summary
of the status of the Company’s stock option agreement as of April 30, 2010 and
2009, and changes during the years then ended were as follows:
-6-
Miller
Industries, Inc.
Notes to
Financial Statements
|
2010
|
2009
|
|||||||||||||||
|
Shares
|
Exercise
|
Shares
|
Excise
|
|||||||||||||
|
Subject
|
Price
Per
|
Subject
|
Price
Per
|
|||||||||||||
|
To Option
|
Share
|
To Option
|
Share
|
|||||||||||||
|
Outstanding,
May 1
|
2,017,338 | $ | .18 | 2,017,338 | $ | .18 | ||||||||||
|
Granted
|
- | - | - | - | ||||||||||||
|
Modification
|
(.12 | ) | - | - | ||||||||||||
|
Exercised
|
- | - | - | - | ||||||||||||
|
Cancelled
|
- | - | - | - | ||||||||||||
|
Outstanding/Exercisable,
April 30
|
2,017,338 | $ | .06 | 2,017,338 | $ | .18 | ||||||||||
The
following summarized information concerning currently outstanding and
exercisable options at July 31, 2010.
|
Options
Outstanding/Exercisable
|
||||||||||
|
Exercise Price
|
Number Outstanding at
7/31/10
|
Average Remaining Life
|
||||||||
| $ | 0.06 | 2,017,338 | 4.9 | |||||||
-7-
Miller
Industries, Inc.
Notes to
Financial Statements
ITEM
2. MANAGEMENT’S DISCUSSION AND
ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Results of Operations (First
Quarter of 2010 Fiscal Year compared to First 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 first quarter of the 2010 fiscal year was $93,000, compared
with $96,000 in the first quarter of 2011.
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 2010 and
in 2011.
Other
Income. The Company generated other income of $2,000 in the
first quarter of fiscal year 2010 and 2011. 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,
insurance, maintenance and repairs, utility costs and outside
services. Rental expenses were $48,000 in the first quarter of fiscal
year 2010 and $53,000 in the first quarter of 2010. The increase was
primarily due to higher insurance premiums and management fees.
Administrative
Expenses. The Company’s administrative expenses were $11,000
in the first quarter of fiscal years 2010 and $10,000 in 2010.
Interest
Expense. The Company pays interest on the mortgage loan on its
building. Interest expense on the loan was $14,000 in the first
quarter of fiscal year 2010 compared to $9,000 in 2010. The decrease
in the amount of interest was attributable to an decrease in the interest rate
on the Company’s base loan.
Provision for Income
Taxes. The Company had a tax provision of $7,000 in the first
quarter of fiscal 2010 and $8,000 in 2011. The provision in 2010 was
more than offset by the Company’s net operation loss carry forward.
Net
Income. As a result of the foregoing factors, the Company had
net income of $31,000 in the first quarter of fiscal year 2010, compared to
$20,000 in the first quarter of 2011.
-8-
Miller
Industries, Inc.
Notes to
Financial Statements
Liquidity and Capital
Resources
The
Company’s cash increased by $7,000 during the first three months of the 2010
fiscal year compared to an increase of $26,000 during the first three months of
fiscal year 2011. The increase in cash in 2011 was due to cash flow
from operations. As of July 31, 2010, the Company’s cash position was
approximately $1,539,000.
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 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 July 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 July 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 July 31, 2010.
-9-
Miller
Industries, Inc.
Notes to
Financial Statements
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: January
10, 2011
|
By:
|
/s/ Angelo
Napolitano
|
|
|
Angelo
Napolitano
|
|||
|
Chairman
of the Board of Directors
|
|||
|
Chief
Executive Officer
|
|||
|
Principal
Financial Officer
|
|||
-10-