SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-KSB
[X] ANNUAL REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934 (FEE REQUIRED)
For the fiscal year ended April 30, 1997
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
For the transition period from __________ to _______________
Commission File No. 1-5926
MILLER INDUSTRIES, INC.
-------------------------------------------------------------
(Name of Small Business Issuer in its Charter)
FLORIDA 59-0996356
-------------------------------------- -----------------------------
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
16295 N.W. 13TH AVE., MIAMI, FLORIDA 33169
-------------------------------------------------------------
(Address of Principal Executive Offices)
(305) 621-0501
-------------------------------------------------------------
(Issuer's Telephone Number, Including Area Code)
Securities registered under Section 12(b)
of the Exchange Act: None
Securities registered under Section 12(g) of the Exchange Act:
COMMON STOCK, $.05 PAR VALUE
-------------------------------------------------------------
(Title of Class)
Check whether the issuer: (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 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 past 90 days.
Yes __________ No ____X____
Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B contained in this form, and no disclosure will be contained, to
the best of registrant's knowledge, in the definitive proxy or information
statement incorporated by reference in Part III of this Form 10-KSB or any
amendment to this Form 10-KSB. [X]
State issuer's revenues for its most recent fiscal year: $294,000.
As of July 1, 1997, the registrant had 2,982,662 outstanding shares of common
stock $.05 par value. The aggregate market value of the common stock of the
registrant held by non-affiliates (based on the average of the closing bid and
asked prices of the common stock in the over-the-counter market as of July 31)
was approximately $55,500.
<PAGE>
PART I
ITEM 1. BUSINESS
GENERAL
MILLER INDUSTRIES, INC. (the "Company") was incorporated under the laws of the
State of Florida on January 21, 1963. The administrative offices of the Company
are located at 16295 N.W. 13th Avenue, Miami, Florida 33169, and its telephone
number is (305) 621-0501.
The Company=s principal business is the ownership and management of a 98,000
square feet warehouse located in Miami, Florida. See Item 2. Properties. As of
the date of this report, the Company had not yet leased enough of its warehouse
to generate positive cash flow from operations. The Company also intends to
acquire other income-generating properties to add to the Company's portfolio.
The Company's current President, Angelo Napolitano, has extensive experience in
the real estate industry, and believes that he can provide the Company with the
expertise to locate, acquire and manage attractive properties. The Company hopes
to finance the acquisition of properties through a combination of debt from
third parties (including outside lenders and seller financing) and issuance of
equity securities.
EMPLOYEES
The Company had no employees during the 1997 and 1996 fiscal years.
The Company's President provides services to the Company as an independent
contractor. The Company also utilizes an independent contractor to perform
administrative and bookkeeping services.
ITEM 2. PROPERTIES
DESCRIPTION OF WAREHOUSE
The Company owns a one-story concrete block building located at 16295 N.W. 13th
Avenue, Miami, Florida. This facility consists of 97,813 square feet, 7,000 of
which is air-conditioned. The building is zoned for use as a warehouse or light
manufacturing facility. The building has a relatively low ceiling, which has
adversely affected leasing efforts.
FINANCING
At April 30, 1997, the building was subject to an outstanding first mortgage in
favor of Nations Bank. The mortgage secured a loan with a balance of
approximately $1,350,000. In June 1997, the loan was amended to permit the
Company to borrow an additional $100,000. The proceeds of the additional
borrowing will be utilized to make additional improvements to the roof on the
building.
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<PAGE>
Under the current terms of the loan, the Company is obligated to make
monthly payments of principal and interest of $13,285 (based on an original
23-year amortization schedule). The loan is due in full on September 16, 1999.
Angelo Napolitano, the Company's Chairman of the Board, has currently guaranteed
$800,000 of the new loan balance.
LEASING ACTIVITIES
The Company continues to seek long term commercial tenants for its building. The
building is located in an industrial park which contains many similar
facilities. Current rents for such facilities range from approximately $3.75 per
square foot to approximately $5.00 per square foot and the occupancy rate in the
area is approximately 90%.
The Company has leased 24,000 square feet of the building under a 5-year lease
which commenced in January 1995. This lease provides for rent of $120,000 per
year, plus increases based on changes in the consumer price index. The Company
has also leased approximately 7,650 square feet of the building, at a monthly
rental of $3,978. This lease is currently scheduled for expiration in December
1997, although it may be extended based on negotiations between the parties.
Total rental income for fiscal 1997 was approximately $180,000.
INSURANCE AND TAXES
The Company believes that the building is adequately insured. Depreciation is
determined using the straight-line method over five to 31.5 years for tax
purposes and 10 to 30 years for accounting purposes. Real estate taxes paid for
calendar year 1996 were approximately $35,000.
BUSINESS PLAN
The Company's current business plan is to make strategic investments in
commercial real estate. At the present time, the Company has not developed any
specific investment policy with regard to its proposed real estate activities.
Accordingly, the Company has not established any limitations in the percentage
of assets which may be invested in any one investment or type of investments.
The Company generally intends to seek real estate assets for income-generation
purposes rather than capital gains. The Company has not developed any particular
criteria for the types of real estate in which it may invest. Accordingly, the
Company may invest in office and apartment buildings, shopping centers,
industrial and commercial properties, special purpose buildings and undeveloped
acreage. The Company believes that any such acquisitions will occur in South
Florida. The Company hopes to finance the acquisition of properties through a
combination of financing from third parties, financing from the seller and
issuance of equity securities of the Company. The Company may also invest in
real estate through partnerships or other similar vehicles. There can be no
assurance that any of these plans will be realized.
-3-
<PAGE>
ITEM 3. LEGAL PROCEEDINGS
DISPUTE WITH TENANT
In June 1996, the principal tenant for the building indicated that it would seek
to recover losses from the Company and its roofing contractor arising from
damage caused by roof leaks and certain related repair efforts. The Company has
been advised that the tenant has settled this matter with the roofing company's
insurance carrier.
CONTAMINATION AT COMPANY WAREHOUSE
In March 1990, the Company received an environmental report on the Company's
building prepared by an outside consulting firm. The report indicated the
presence of soil and groundwater contamination in a limited area behind and to
one side of the building.
Prior to 1988, the Company utilized this area to store paints and other
chemicals used in the Company's paint line. The Company terminated its painting
operations in April 1987.
In March, 1997, after the latest groundwater test results were analyzed by the
Florida Department of Environmental Regulations, the Company received
notification from the Florida Department of Environmental Regulation that it was
closing its file on this matter. Therefore, the Company believes that this
matter is resolved. In connection with this matter, the Company recognized
$38,000 in revenues when it reversed a prior accrual for possible clean-up
costs.
SEABOARD CHEMICAL CORPORATION
In late 1991, the Company was identified by the North Carolina Department of
Environment, Health, and Natural Resources ("DEHNR") as a member of a large
group of companies who had shipped hazardous waste to a disposal site owner and
operated by Seaboard Chemical Corporation ("Seaboard"). Accordingly, DEHNR
issued a Notice of Responsibility to advise the Company of its liability as a
potentially responsible party ("PRP") with respect to the site.
Seaboard had operated the site in Jamestown, North Carolina for the storage,
treatment and disposal of hazardous waste materials for the period from 1976 to
1989. Operations at the site ceased in 1989 when Seaboard declared bankruptcy.
Beginning in 1990, the bankruptcy trustee for Seaboard attempted to close the
site in accordance with the terms of the Resource Conservation and Recovery Act
("RCRA"). However, insufficient funds were available to allow the trustee to
complete this work. As a result, the Federal Environmental Protection Agency
(the "EPA") and the DEHNR advised the trustee that if the clean up work were not
completed, either one or both of the agencies would complete the work and would
sue the responsible parties to recover the costs involved. To avoid the
possibility of this lawsuit, in October 1991, the Company entered into an
agreement with other responsible parties to form a group to complete the site
clean up work. Over the next two
-4-
<PAGE>
years, the necessary steps were taken to complete the clean up of the surface
contamination of the site. In 1994, the Company joined a group to complete the
groundwater clean up ("Phase II"). Phase II was to begin as soon as a
satisfactory plan was approved by the concerned authorities. To date, the
Company has been required to expend only a minimal amount on this operation.
Therefore, no accrual has been made for further costs to this point. No
determination of the estimated additional expenditures has been furnished to the
group members.
GOLD COAST OIL
In 1981, the Company was named by the U.S. Environmental Protection Agency
("EPA") as one of many potential PRPs with respect to chemical pollution
discovered at a site known as "Gold Coast Oil."
In 1988, a settlement was negotiated between the EPA and certain PRP's including
the Company which resulted in a settlement of the EPA claim. The PRPs
subsequently negotiated a settlement among themselves in which the Company
agreed to pay $50,000 of the anticipated clean up costs. The Company's insurance
carrier at the time of the alleged violations agreed to pay $45,000 of this
amount in return for a release from any future additional claims.
In January 1993, it was determined that additional funds would be required to
complete the clean up of the Gold Coast Oil site. The Company received an
assessment of $10,000 for this obligation. As of April 30, 1997, the Company had
accrued, but not paid this amount.
-5-
<PAGE>
ITEM 4. SUBMISSION OF MATTERS TO VOTE OF SECURITY HOLDERS
None.
-6-
<PAGE>
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED STOCKHOLDER
MATTERS
The Company's common stock is currently traded on the over-the-counter market.
The range of the high and low bid quotations for each quarter of the past two
(2) fiscal years is as follows:
MAY 1996 - APRIL 1997(1) HIGH LOW
- --------------------- ---- ---
First Quarter $ .060 $ .020
Second Quarter .060 .020
Third Quarter .060 .020
Fourth Quarter .060 .020
MAY 1995 - APRIL 1996(1) HIGH LOW
- --------------------- ---- ---
First Quarter $ .100 $ .020
Second Quarter .080 .020
Third Quarter .080 .020
Fourth Quarter .060 .020
- ---------------------------
(1) Over-the-counter prices do not reflect retail mark-ups, mark-downs, or
commissions and may not necessarily represent actual transactions.
Prices for fiscal years 1996 and 1997 were provided by National
Quotation Bureau, Inc.
As of July 13, 1997, there were 490 holders of record of the Company's common
stock.
The Company has not paid any cash dividends during the last two fiscal years.
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
RESULTS OF OPERATION
In fiscal year 1997, the Company had rental income of $180,000, compared with
rental income of $174,000 in 1996. During 1996 and 1997, less than half of the
Company's warehouse was leased.
-7-
<PAGE>
The Company needs to lease the balance of this space in order to achieve
positive cash flow from operations. Rental income was offset by rental expense
of $125,000 in 1997 compared to $144,000 in 1996. The decrease in rental expense
was due to a reduction in repairs and improvements over the previous year.
During 1997, the Company continued to operate a hardware sales business, in
which it sells replacement parts for the sliding glass door and window products
formerly sold by the Company. Sales in 1997 were $42,000 (with cost of goods
sold of $15,000), compared to sales of $69,000 in 1996 (and cost of goods sold
of $17,000).
During 1997, the Company also continued to liquidate the equipment and product
lines for the Company's former business. The Company recognized a gain of
$13,000 from these sales in 1997, compared with a gain of $8,000 in 1996.
The Company recognized $38,000 in revenues in 1997 due to the reversal of a
prior accrual of potential clean-up costs. See Item 3, Legal Proceedings.
The Company's administration expenses were $69,000 in 1997, compared to $76,000
in 1996. The decrease was due to further reductions in operating expenses.
LIQUIDITY AND CAPITAL RESOURCES
The Company's cash decreased by $50,000 during fiscal year 1997 compared with a
decrease of $38,000 during fiscal year 1996. This decrease in cash was primarily
due to the loss from operations and a lower level of hardware sales and
expenditures for improvements to a certain portion of the roof on the Company's
warehouse. As of April 30, 1997, the Company's cash position was approximately
$80,000.
The Company's working capital remains extremely limited. The Company's most
pressing working capital requirement is the need to repair a large remaining
portion of the roof on its warehouse. To address this problem, the Company
borrowed an additional $100,000 from its principal lender in June, 1997. The
Company believes that this amount will cover most of the cost of the roof
project. The Company believes that its working capital needs over the next
twelve months will also include routine maintenance of its building, and
alterations to the interior of the building to accommodate new tenants. The
Company believes that it has enough cash to continue operations at their current
level for at least 12 more months. However, the Company's long term prospects
ultimately depend on the Company's ability to lease the remainder of its
building at attractive rates.
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 has entered into a five-year lease, which
commenced in January 1995, which provides for rent of
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<PAGE>
approximately $120,000 per year. The Company also has an existing short-term
lease for approximately 7,650 square feet which provides for rental of $3,978
per month. This lease is currently scheduled for expiration in December 1997,
although it may be further extended based on negotiations between the parties.
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. The
Company believes that it can generate positive cash flow from operations if it
is able to find additional tenants for the building. However, at the present
time, the Company does not receive enough in lease payments to cover its
expenses.
The Company's business plan also contemplates the acquisition of additional
income-producing properties. The Company hopes to acquire such properties
through a combination of financing from third parties, seller financing and
issuance of the Company's equity securities.
The Company's business plan is subject to considerable uncertainty. There can be
no assurance that the Company will be able to obtain a sufficient number of
additional tenants in order to fully lease its existing building and to meet its
debt service requirements and operating expenses. Furthermore, there can be no
assurance that the Company will be able to locate or acquire suitable properties
in order to expand its holdings of real property.
ITEM 7. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The Company's financial statements and supplementary financial schedules are
attached as an exhibit to this report. See Items 14(a) and 14(b).
ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
-9-
<PAGE>
PART III
ITEM 9. DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY
The directors and executive officers of the Company are as follows:
OFFICER DIRECTOR
NAME POSITION SINCE SINCE
---- -------- ------- --------
Angelo Napolitano President, Chief 1992 1988
Executive Officer,
and Chairman of the
Board of Directors
Martin Engelmann Director -- 1988
Each director is elected for a period of one (1) year, or until his successor is
duly elected by the shareholders. Officers serve at the will of the Board of
Directors.
ANGELO NAPOLITANO, age 61, has been President and Chief Executive Officer of the
Company since 1992. He has been a Director of the Company since 1988 and
Chairman since July 1989. Mr. Napolitano is the Chairman and Chief Executive
Officer of Harnap Corp., a commercial real estate management company which he
founded in 1971. Since 1975, Mr. Napolitano has served as a director of Sunshine
State Industrial Park Authority, the property owners' association for the
industrial park in which the Company's building is located.
MARTIN ENGELMANN, age 56, has been a director of the Company since 1988. Mr.
Engelmann is the President of DiaMed Caribbean, Inc., a health care consulting
and exporting company which he founded in 1984. Mr. Engelmann also serves as a
director of America's Growth Fund, an investment company which provides
short-term capital to companies doing business in Latin America.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Based solely upon a review of Forms 3, 4 and 5 furnished to the Company, all of
the Company's directors have filed reports on a timely basis.
-10-
<PAGE>
ITEM 10. EXECUTIVE COMPENSATION
The following table sets forth information regarding the compensation paid by
the Company to the Company's chief executive officer. None of the Company's
officers in 1997 received compensation in excess of $100,000.
SUMMARY COMPENSATION TABLE
--------------------------
FISCAL STOCK
NAME AND POSITION YEAR SALARY (1) OPTIONS
- ----------------- ------ ---------- -------
Angelo Napolitano, 1997 $ 37,500 -
Chief Executive
Officer 1996 $ 36,250 -
1995 $ 35,500 -
- ---------------
(1) Includes management fees paid to Harnap Corp., a company controlled
by Mr. Napolitano, and director fees paid to Mr. Napolitano.
MANAGEMENT AGREEMENT
In October 1992, the Company agreed to pay Harnap Corp. a monthly management fee
of $3,000. Harnap Corp. is owned and controlled by Angelo Napolitano, the
Company's Chief Executive Officer and Chairman of the Board. At the close of the
current fiscal year, accrued management fees totaled $64,500. No fees have been
paid since June 1995.
COMPENSATION OF DIRECTORS
Each director receives a fee of $250 for attendance at each meeting of the Board
of Directors. Directors also receive $450 per day for any special assignments
which they undertake at the Board's request. Directors are also reimbursed for
out-of-pocket expenses which they incur while performing activities on behalf of
the Company.
The total amount paid to directors during the 1997 fiscal year was $500.
-11-
<PAGE>
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
To the knowledge of management, as of August 1, 1996, the only person who
beneficially owned 5% or more of the common stock of the Company was as follows:
AMOUNT
NAME AND ADDRESS OF BENEFICIALLY OWNED PERCENT OF
BENEFICIAL OWNER AS OF AUGUST 1, 1997 CLASS
- ------------------- -------------------- -------
Angelo Napolitano 1,131,256(1) 37.9%
1521 N.W. 165th Street
Miami, FL 33169
- ----------------
(1) Mr. Napolitano has sole voting and investment power with respect to
1,121,256 shares which he holds of record. Mr. Napolitano has shared
voting and investment power with respect to 10,000 shares which he
owns jointly with his wife, Mrs. Helen Napolitano.
The shares of common stock beneficially owned by each director and by all the
executive officers and directors of the Company as a group as of August 1, 1997
were as follows:
NAME OF AMOUNT BENEFICIALLY PERCENT OF
BENEFICIAL OWNER OWNED (1) CLASS
- ------------------- ------------------- ----------
Directors and Officers 1,151,256 38.8%
as a Group (consisting
of two persons)
Martin Engelmann 20,000 0.9%
Angelo Napolitano 1,131,256(2) 37.9%(2)
- ----------------
(1) Except as otherwise indicated, each person has sole voting and
investment power as to the listed shares.
(2) With respect to Mr. Napolitano's shares, see Note (1) to the preceding
table.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Company has entered into a brokerage agreement with Napolitano Realty
Corporation ("NRC") with respect to the lease of the Company's building. The
President of NRC is the son of Mr. Angelo
-12-
<PAGE>
Napolitano, the Company's President and Chairman of the Board. The agreement
provides for a 6% commission to be paid to NRC on sales or lease proceeds
received by the Company. During fiscal 1997, a $5,780 commission was paid for
rental income generated by the short term leases of portions of the building. In
addition, Napolitano Realty will receive commissions of $18,000, payable at the
rate of $3,600 per year, for a 5-year lease which commenced in January 1995.
Payment of the first three installments of these commissions has been delayed by
mutual agreement until the Company's cash position improves. Accordingly, the
Company=s accrued expenses include $10,800 representing the unpaid balance.
-13-
<PAGE>
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 10-KSB
PAGE NO.
--------
(a) Financial Statements
Report of Independent Certified Public
Accountants............................................ F-1
Balance Sheets As of April 30, 1997
and 1996............................................... F-2
Statements of Operations and (Deficit) for
Years ended April 30, 1997 and 1996.................... F-3
Statements of Changes in Shareholders (Deficiency)
for Years ended April 30, 1997 and 1996................ F-4
Statements of Cash Flows for Years ended
April 30, 1997 and 1996................................ F-5
Notes to Financial Statements.......................... F-6
-14-
<PAGE>
(b) Exhibits SEQUENTIAL
PAGE NUMBER
-----------
3. (A) Articles of Incorporation (Note 1)
(B) Articles of Amendment (Note 2)
(C) By-laws (Note 1)
(D) Amendment to By-laws --
Indemnification (Note 1)
(E) Amendment to By-laws --
Control Share Acquisitions (Note 5)
10. Material Contracts
(A) Profit Sharing Plan (Note 3)
(B) Stock Option Plan (Note 3)
(C) Incentive Bonus Plan (Note 3)
(D) Indemnification Agreement
with Directors (Note 4)
(E) Option Agreement with
Angelo Napolitano (Note 5)
(F) Settlement Agreement with
Granite (Note 6)
(G) Promissory Note to
InterContinental Bank (Note 6)
(H) Amended and Restated
Promissory Note to NationsBank, 28
N.A. (South)
Note 1. Incorporated by reference from the Form 10-K filed
with the Commission for the year ended April 30, 1981.
Note 2. Incorporated by reference from Form 10-K filed with
the Commission for the year ended April 30, 1985.
Note 3. Incorporated by reference from Form 10-K filed with
the Commission for the year ended April 30, 1988.
Note 4. Incorporated by reference from the Form 10-K filed
with the Commission for the year ended April 30, 1990.
Note 5. Incorporated by reference from the Form 10-K filed
with the Commission for the year ended April 30, 1993.
Note 6. Incorporated by reference from the Form 10-K filed
with the Commission for the fiscal year ended April 30,
1994.
(d) Reports on Form 8-K
There were no reports on Form 8-K for the three months
ended April 30, 1997.
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<PAGE>
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the
registrant caused this report to be signed on its behalf by the undersigned,
thereto duly authorized on the 2nd day of September, 1997.
MILLER INDUSTRIES, INC.
/S/ ANGELO NAPOLITANO
------------------------------------
By: Angelo Napolitano, President
and Chief Executive Officer
In accordance with the Exchange Act, this report has been signed below
by the following persons on behalf of the registrant and in the capacities
indicated on the 2nd day of September, 1997.
SIGNATURE TITLE
- --------- -----
/S/ ANGELO NAPOLITANO President, Chief Executive
- -------------------------------- Officer, and Director
Angelo Napolitano (Principal Executive Officer)
(Principal Financial Officer)
(Principal Accounting Officer)
/S/ MARTIN ENGELMANN Director
- --------------------------------
Martin Engelmann
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<PAGE>
INDEPENDENT AUDITORS' REPORT
The Board of Directors and Shareholders
Miller Industries, Inc.
Miami, Florida
We have audited the accompanying balance sheets of Miller Industries, Inc. as of
April 30, 1997 and 1996, and the related statements of operations, shareholders'
deficiency, and cash flows for the years then ended. These financial statements
are the responsibility of the Company's management. Our responsibility is to
express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Miller Industries, Inc. as of
April 30, 1997 and 1996, and the results of its operations and its cash flows
for the years then ended, in conformity with generally accepted accounting
principles.
/s/ SPEAR, SAFER, HARMON & CO., P.A.
Miami, Florida
July 2, 1997
F-1
<PAGE>
<TABLE>
<CAPTION>
MILLER INDUSTRIES, INC.
Balance Sheets
April 30, 1997 and 1996
A S S E T S
1997 1996
-------------- -------------
<S> <C> <C>
Investment Property:
Land $ 161,443 $ 161,443
Building and improvements 749,118 708,487
Machinery and equipment 22,211 22,211
Furniture and fixtures 10,451 10,451
-------------- -------------
943,223 902,592
Less: Accumulated depreciation (710,471) (696,359)
-------------- -------------
232,752 206,233
-------------- -------------
Other Assets:
Cash 80,334 129,548
Inventories 27,000 38,224
Prepaid expenses and other assets 11,000 9,286
Deferred lease incentive 39,475 54,095
Loan costs, less accumulated amortization of $16,178
and $10,111 in 1997 and 1996, respectively 14,155 20,222
------------- -------------
171,964 251,375
------------- -------------
$ 404,716 $ 457,608
============= =============
LIABILITIES AND SHAREHOLDERS' DEFICIENCY
Liabilities:
Mortgage note payable $1,348,851 $1,366,087
Accounts payable and accrued expenses 177,726 167,497
Tenant security deposits 33,247 33,092
-------------- --------------
Total Liabilities 1,559,824 1,566,676
-------------- --------------
Shareholders' Deficiency:
Common stock - $.05 par, 5,000,000 shares authorized;
2,982,662 shares issued and outstanding 149,133 149,133
Paid-in capital 1,126,507 1,126,507
Deficit (2,430,748) (2,384,708)
-------------- -------------
Total Shareholders' Deficiency (1,155,108) (1,109,068)
-------------- -------------
$ 404,716 $ 457,608
============== =============
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-2
<PAGE>
<TABLE>
<CAPTION>
MILLER INDUSTRIES, INC.
Statements of Operations
Years Ended April 30, 1997 and 1996
1997 1996
----------- -----------
<S> <C> <C>
Revenues:
Rental $ 179,653 $ 174,323
Net hardware sales 42,341 69,399
Sale of product lines 20,000 -
Gain on sale of equipment and other income 13,496 8,301
Settlement of environmental clean-up contingent liability 38,010 -
----------- -----------
Total Revenues 293,500 252,023
----------- -----------
Expenses:
Rental 125,014 144,178
Cost of hardware sales 14,598 16,736
Administrative 69,095 76,250
Interest 130,833 131,453
----------- -----------
Total Expenses 339,540 368,617
----------- -----------
Net Loss $ (46,040) $ (116,594)
=========== ===========
Net Loss per Common Share $ (.02) $ (.03)
====== ======
Weighted average common shares outstanding
used in computing net loss per common share 2,982,662 2,982,662
=========== ==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-3
<PAGE>
<TABLE>
<CAPTION>
MILLER INDUSTRIES, INC.
Statements of Shareholders' Deficiency
Years Ended April 30, 1997 and 1996
COMMON STOCK
----------------------------------
ADDITIONAL
SHARES PAID-IN
ISSUED AMOUNT CAPITAL (DEFICIT)
------------------ --------------- -------------------- -------------------
<S> <C> <C> <C> <C>
Balance at April 30, 1995 2,982,662 $149,133 $1,126,507 $(2,268,114)
Net Loss - 1996 - - - (116,594)
--------- -------- ---------- -----------
Balance at April 30, 1996 2,982,662 149,133 1,126,507 (2,384,708)
Net Loss - 1997 - - - (46,040)
--------- -------- ---------- -----------
Balance at April 30, 1997 2,982,662 $149,133 $1,126,507 $(2,430,748)
========= ======== ========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-4
<PAGE>
<TABLE>
<CAPTION>
MILLER INDUSTRIES, INC.
Statements of Cash Flows
Years Ended April 30, 1997 and 1996
1997 1996
--------- ---------
<S> <C> <C>
Cash Flows from Operating Activities:
Net loss $ (46,040) $(116,594)
Adjustments to reconcile net loss to net cash
used by operating activities -
Gain on sale of product lines (20,000) -
Gain on sale of equipment (7,500) -
Depreciation 14,112 14,112
Amortization 20,687 20,687
Changes in operating
assets and liabilities
Decrease (increase) in:
Inventories 11,224 (8,507)
Prepaid expenses (1,714) 50,909
Increase (decrease) in;
Accounts payable and accrued expenses 10,229 28,554
Tenant security deposits 155 1,582
------------- ----------
Net Cash Used by Operating Activities (18,847) (9,257)
------------ ----------
Cash Flows from Investing Activities:
Acquisition of property and equipment (40,631) (10,585)
Proceeds on sale of product lines 20,000 -
Proceeds on sale of equipment 7,500 -
------------- --------------
Net Cash Used by Investing Activities (13,131) (10,585)
------------ ----------
Cash Flows from Financing Activities:
Payments on mortgage note payable (17,236) (17,916)
----------- ----------
Decrease in cash (49,214) (37,758)
Cash at Beginning of Year 129,548 167,306
--------- ---------
Cash at End of Year $ 80,334 $129,548
========= ========
Supplemental Disclosure of Cash Flow Information:
Cash paid during the year for interest $130,833 $131,453
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-5
<PAGE>
MILLER INDUSTRIES, INC.
Notes to Financial Statements
Years Ended April 30, 1997 and 1996
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
ORGANIZATION - In August of 1991, Miller Industries, Inc. (the
"Company") discontinued its primary operations, manufacturing of
aluminum windows and doors. Pursuant to a plan of reorganization,
the Company currently operates as a rental real estate company.
(See Note 2)
CREDIT RISK - Financial instruments, which potentially subject the
Company to concentrations of credit risk, consist principally of
cash. The Company places its cash with high credit quality
financial institutions. At certain times during the year the
Company had amounts on deposit with financial institutions in
excess of the F.D.I.C. insured limits.
INVESTMENT PROPERTY - Investment property is recorded at cost.
Depreciation is computed using the straight-line method over the
estimated useful lives of the assets ranging from 5 to 30 years.
INVENTORIES - Inventories consist primarily of miscellaneous
hardware items and are stated at the lower of cost (first-in,
first-out) or market.
DEFERRED LEASE INCENTIVE - The deferred lease incentive is
amortized on a straight-line basis over the term of the lease
which is five years.
LOAN COSTS - Loan costs are amortized on a straight-line basis
over the term of the loan which is five years.
INCOME TAXES - Deferred tax liabilities and assets are determined
based on the difference between the financial statement carrying
amounts and tax bases of assets and liabilities, principally
depreciation, using enacted tax rates in effect in the years in
which the differences are expected to reverse. Deferred tax assets
are reduced by a valuation allowance if, based on the weight of
available evidence, it is more likely than not that some portion
or all of the deferred tax assets will not be realized.
ESTIMATES - The preparation of financial statements in conformity
with generally accepted accounting principles requires management
to make estimates and assumptions that affect the reported amounts
of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the reporting
period. Actual results could differ from those estimates.
F-6
<PAGE>
MILLER INDUSTRIES, INC.
Notes to Financial Statements (Continued)
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
NET LOSS PER SHARE - The net loss per share is computed by
dividing net loss by the weighted average number of common shares
outstanding. Common share equivalents are not included for fiscal
years 1997 and 1996 as their effect would be antidilutive.
NOTE 2 - OPERATIONS
The Company's principal asset is a building and the related real
property. The Company's current business plan is to lease its
building to one or more parties and use the cash flows generated
to purchase additional investment real estate as selected by the
Company's Board of Directors.
During June 1996, the Company sold its Executive and Patrician
single hung window lines, including trade names, trademark
registration and rights, for $20,000.
NOTE 3 - INCOME TAXES
The Company has net operating loss carryforwards of approximately
$2,431,000 which may provide future income tax benefits that
expire through 2012.
The deferred tax asset at April 30, 1997, consists of the
following:
Net operating loss carryforwards $826,000
Valuation allowance 826,000
--------
$ -
========
Since any tax benefit is dependent on future taxable earnings, the
Company has not recognized such benefits for financial reporting
purposes.
A reconciliation of income tax at the statutory rate to the
Company's effective rate for the year ended April 30, 1997, is as
follows:
Federal income tax at statutory rate 34.0%
State income tax, net of Federal tax benefit 3.6
Benefit of net operating loss carryforward (37.6)
-------
Income tax expense - %
=======
F-7
<PAGE>
MILLER INDUSTRIES, INC.
Notes to Financial Statements (Continued)
NOTE 4 - MORTGAGE NOTE PAYABLE
The Company has a $1,400,000 loan from a bank which bears interest
at the Citibank prime rate plus 1% (9.25% at April 30, 1997) and
may be adjusted annually. Principal and interest are payable
monthly over a five year period based on a twenty-three year
amortization schedule. The remaining outstanding balance is
payable in full in September 1999. The loan is secured by a first
lien on the Company's building. At April 30, 1997, $1,348,851 was
outstanding under this loan agreement.
The Company's Chairman of the Board, Angelo Napolitano, guaranteed
$700,000 of the loan. The guaranty will be reduced to $350,000
once the Company stabilizes its tenant occupancy for ninety
consecutive days. This stabilization has not yet been achieved.
Future maturities of the mortgage note payable are as follows:
YEAR ENDING
APRIL 30,
-----------
1998 $ 21,200
1999 23,362
2000 25,745
2001 28,370
2002 1,250,174
-----------
$1,348,851
===========
Subsequent to year end, the Company executed a future advance
note, in the amount of $100,000, with the above bank which will be
added to existing indebtedness. The note is secured by the
existing mortgage and is fully guaranteed by the Chairman of the
Board.
NOTE 5 - RENTAL INCOME
The Company leases portions of its warehouse space to unrelated
third parties for various short-term lease periods. Total rental
income under these leases for fiscal 1997 and 1996 was
approximately $180,000 and $174,000, respectively.
F-8
<PAGE>
MILLER INDUSTRIES, INC.
Notes to Financial Statements (Continued)
NOTE 5 - RENTAL INCOME (CONTINUED)
Future minimum rental income under these non-cancelable leases,
excluding cost of living adjustments, is summarized as follows:
YEAR ENDING
APRIL 30,
-----------
1998 $ 144,000
1999 120,000
2000 30,000
---------
$294,000
========
NOTE 6 - RELATED PARTY TRANSACTIONS
MANAGEMENT FEES - The Company pays a monthly management fee of
$3,000 to Harnap Corp., a corporation related to the Company's CEO
and President. Total management fees under this agreement were
$37,500 and $36,000 for 1997 and 1996, respectively of which
approximately $65,000 and $27,000 is included in accounts payable
in the accompanying balance sheet in 1997 and 1996, respectively.
COMMISSION CONTRACT - On November 1, 1990, the Company entered
into a real estate listing agreement with Napolitano Realty
Corporation ("NRC") for the purpose of marketing the Company's
former manufacturing facility for lease or sale. The President of
NRC is the son of the Company's CEO and President. The agreement
provides for the payment of a commission to NRC in the event that
the building is leased or sold as the result of services rendered
by NRC. During fiscal years 1997 and 1996, $5,780 of fees were
paid under this agreement. In January 1995, NRC executed a five
year lease on a portion of the building and became entitled to
commissions of $3,600 per year for a period of five years.
Commissions in the amount of $10,800 have not been paid as of
April 30, 1997. Consequently, this amount is included in accrued
expenses on the 1997 balance sheet. The contract is on-going on a
month-to-month basis.
F-9
<PAGE>
MILLER INDUSTRIES, INC.
Notes to Financial Statements (Continued)
NOTE 7 - CONTINGENCIES
ENVIRONMENTAL MATTERS
Since fiscal 1990, the Company has conducted various environmental
evaluations of its land and building. In February 1993, the
Company entered into a consent order with the State of Florida
Department of Environmental Regulation (the "Department") agreeing
to perform various tests to determine the extent, if any, of soil
and ground water contamination. In prior years, based on the
results of these tests, the Company accrued $48,620 for the
estimated additional costs to complete the clean-up which was
included in accrued expenses.
During March 1997, the Department determined that the Company
satisfactorily completed the tasks and objectives pursuant to the
contamination assessment report and that no further action by the
Company was required. Consequently, the Company reversed
approximately $38,000, of the balance previously accrued, which is
included in the accompanying statements of operations.
During 1991, the Company was named by the North Carolina
Department of Environmental, Health and Natural Resources as one
of many Potentially Responsible Parties ("PRPs") for the closure
and clean-up of a bankrupt Environmental Protection Agency ("EPA")
approved hazardous waste processing facility in Jamestown, North
Carolina. Over 1,000 of the PRPs, including the Company, have
formed the Seaboard Group II for the purpose of limiting their
exposure with respect to the site. To date, the Company has
incurred approximately $200 in costs with respect to this site.
However, the Company is unable to determine what its total costs
might be, and no accruals have been made for future clean-up
liability at this site.
In 1981, the Company was named by the EPA as one of many PRPs with
respect to chemical pollution discovered at a site known as "Gold
Coast Oil". In 1988, a settlement was negotiated between the EPA
and certain PRPs including the Company which resulted in a consent
order in settlement of the EPA claim. The PRPs subsequently
negotiated a settlement among themselves to raise the funds
necessary to perform specified cleanup activities. To date, all
but $15,000 of the Company's commitment has been covered by its
insurance carrier, and clean-up operations are progressing at the
site. The Company has accrued $10,000 for the estimated additional
costs to complete the clean-up which is included in accrued
expenses in the accompanying balance sheets.
TENANT MATTER
In June 1996, the principal tenant of the Company's building
indicated that it would seek to recover an unspecified amount of
damages to its inventory and other property caused by roof leaks
and the work performed by a contractor to repair those leaks.
During fiscal year 1997, the matter was settled, without the
Company's involvement, between the roofer's insurance company and
the tenant.
F-10
<PAGE>
EXHIBIT INDEX
EXHIBIT
- -------
10.h Amended and Restated Promissory Note to NationsBank, N.A.
(South)
27. Financial Data Schedule
EXHIBIT 10.h
CONSOLIDATED PROMISSORY NOTE
$1,448,403.45 Miami, Florida
June _, 1997
FOR VALUE RECEIVED, MILLER INDUSTRIES, INC., a Florida
corporation, ("Borrower") promises to pay to the order of
NATIONSBANK, N.A. (SOUTH)
a national banking association ("LENDER"), the principal sum of
ONE MILLION FOUR HUNDRED FORTY-EIGHT THOUSAND
FOUR HUNDRED THREE DOLLARS AND FORTY-FIVE CENTS
and the Borrower further promises to pay to the Lender interest on the
principal amount evidenced hereby and from time to time outstanding at
an initial rate equal to the Lender's prime rate ("Prime Rate") PLUS
one-half of one percent (1/2%) subject to the changes in the interest
rate and monthly payments as follows:
The interest rate may change on the 16th day of September, 1997 and
on that day every twelve (12) months thereafter. Each date on which the
interest rate could change is called a "CHANGE DATE". Beginning with the
first Change Date, the interest rate will be based on an Index. The
"Index" is the Lender's Prime Rate. The most recent Index figure
available as of the date thirty (30) days before each Change Date is
called the "CURRENT INDEX". If the Index is no longer available, the
Lender will choose a new index which is based upon comparable
information. The Lender will give the Borrower notice of this choice.
Before each Change Date, the Lender will calculate the new interest
rate by adding one-half of one percent (1/2%) to the Current Index. The
Lender will then determine the amount of the new monthly payments of
principal and interest that would be sufficient to repay the unpaid
principal over the remainder of the original amortization period based
on the new interest rate. The new monthly payment shall begin on the
first monthly payment date after the Change Date and continue until the
next Change Date. The rate of interest to be applied and the amount of
interest to be paid on the daily outstanding balance of principal
evidenced hereby shall be calculated on an assumed year of 360 days. All
payments hereunder shall be applied first to accrued interest and the
balance to principal. In the event the Lender has not received the
full amount of any payment (whether principal or interest) by the end of
five (5) business days after the date it is due, the Bor-
DOCUMENTARY 8TAMPS HAVE BEEN AFFIXED TO THE MORTGAGE SECURING THIS
NOTE AND CANCELLED.
<PAGE>
rower shall pay to the Lender a late charge equal to three percent
(3%) of any overdue payment.
The Borrower agrees to pay the outstanding indebtedness evidenced
by this note in monthly installments of principal AND interest, based on
a 19 year amortization schedule, in the amount of $13,285.31 each,
commencing June 1, 1997 and continuing on the first day of each month
thereafter subject to adjustments on each Change Date. All outstanding
principal, plus all accrued but unpaid interest, shall be due and
payable in full on September 16, 1999. The Borrower shall have the right
to prepay the principal indebtedness evidenced by this note, in full or
in part, at any time during the term hereof without premium or penalty.
The Borrower further promises and agrees that:
1. The repayment of the indebtedness evidenced by this note is
secured by and is subject to all of the terms and conditions of a
Restated Mortgage Deed and Security Agreement, dated September 30, 1994
and recorded in Official Records Book 16531, Page 875 of the Public
Records of Dade County, Florida and a Restated Assignment of Leases and
Rents, dated September 30, 1994 and recorded in Official Records Book
16531, Page 9005 of the Public Records of Dade County, Florida
(collectively "MORTGAGE") of even date herewith from the Borrower to the
Lender and other instruments executed and delivered by the Borrower to
the Lender as security for and securing the indebtedness evidenced by
this note and other obligations of the Borrower to the Lender in
connection with such indebtedness (collectively the "OBLIGATIONS").
2. The occurrence of any one or more of the following events,
circumstances, or conditions shall constitute a default hereunder and
under the Mortgage ("EVENT OF DEFAULT"): (a) failure of the Borrower to
pay to the Lender promptly when the same shall become due (whether at
scheduled maturity, upon mandatory payment, upon acceleration or
otherwise) any portion of the indebtedness evidenced hereby, including,
but not limited to, any installment of principal or of interest due
under this note or any other instrument evidencing or securing the
Obligations or any fees owing to the Lender and such failure shall
continue for five (5) consecutive business days; or (b) the Borrower
shall fail to perform or observe any term, covenant or agreement
contained in this note or the Mortgage on its part to be performed or
observed if such failure shall remain unremedied for 30 days after
written notice of said failure shall have been given to the Borrower by
the Lender PROVIDED, HOWEVER, if any such default be of a nature that it
cannot be cured or remedied within said 30 days, Borrower shall be
entitled to a reasonable period of time to cure or remedy said default
provided Borrower commences the cure or remedy thereof within the 30
day period following the giving of notice and thereafter proceeds with
diligence to complete such cure or remedy; or (c) a default, after
the expiration of any appropriate grace period, under any loan (other
than the one evidenced by this note), whether now existing or here-
- 2 -
<PAGE>
after committed or made, from the Lender (with or without participating
lenders) to the Borrower; or (d) the filing of any petition under the
Bankruptcy Code or any similar federal or state statute by or against
the Borrower or any guarantor of the obligations of the Borrower to the
Lender ("GUARANTOR") and such filing is not discharged within 60 days
after filing; or (e) the appointment of a receiver for, the making of a
general assignment for the benefit of creditors by, or the insolvency of
the Borrower or any Guarantor and any of same is not discharged within
60 days after the occurrence thereof; or (f) the entry of a final
judgment in excess of $25,000.00 against the Borrower or any Guarantor
which is not satisfied or payment thereof secured by a bond, letter of
credit or similar collateral acceptable to the Lender within 30 days
after the rendition thereof; or (g) the taking possession of any
substantial part of the property of the Borrower or any Guarantor by any
governmental authority; or (h) any material warranty, representation,
certificate, or statement of the Borrower or the Guarantor (whether
contained in this note or not) pertaining to or in connection with the
obligations is not true or is misleading in any material respect; or (i)
the assignment to any one, other than the Lender, by the Borrower of any
equity in any of the collateral for the loan other than as permitted in
the Mortgage; or (j) the failure by Borrower to do all things
necessary to preserve and maintain the value and collectibility of the
collateral for the obligations, including, but not limited to, the
failure to pay taxes and premiums on policies of insurance on their
due dates (unless the payment of taxes is being contested in good faith
by appropriate proceedings); or (k) the occurrence of any material
adverse change in the financial condition, property or operations of the
Borrower or any Guarantor.
3. At any time after the occurrence and continuation of any such
Event of Default, the indebtedness evidenced by this note and/or any
note(s) or other obligation(s) which may be taken in renewal, extension,
substitution, or modification of all or any part of the indebtedness
evidenced thereby and all other obligations of the Borrower to the
Lender, howsoever created and existing, shall immediately become due and
payable without demand upon or notice to the Borrower, and the Lender
shall be entitled to exercise the other remedies as provided by law or
in equity.
4. Upon the occurrence and during the continuance of any Event of
Default, the Lender is authorized, without notice to the Borrower (the
giving of notice being expressly waived by the Borrower) to set off and
apply any indebtedness owing by the Lender to the Borrower against the
indebtedness evidenced by this note, although then contingent or
unmatured. The Lender agrees to notify the Borrower after any such
setoff and application; PROVIDED, however, the failure to give such
notice shall not affect the validity of such setoff and application. The
rights of the Lender under this Paragraph 4 are in addition to any other
rights and remedies which the Lender may have upon the occurrence and
continuation of an Event of Default.
- 3 -
<PAGE>
5. The Lender may transfer this note and deliver to the
transferee(s) all or any of the property then held by the Lender as
security for the indebtedness evidenced by this note ("Collateral")
whereupon the transferee(s) shall become vested with all the powers,
rights, and obligations herein given to the Lender with respect thereto;
and the Lender shall thereafter be forever relieved and fully discharged
from any liability or responsibility in the matter, but the Lender shall
retain all rights, powers, and obligations hereby given with respect to
any Collateral not so transferred.
6. The Borrower hereby waives presentment for payment, demand,
notice of dishonor and protest and agrees that: (i) any Collateral, lien
and/or right of setoff securing any indebtedness evidenced by this note
may, from time to time, in whole or in part, be exchanged or released,
and any person liable on or with respect to the indebtedness evidenced
by this note may be released -- all without notice to or further
reservations of rights against the Borrower, any endorser, surety or
Guarantor and all without in any way affecting or releasing the
liability of the Borrower, any endorser, surety or Guarantor; and (ii)
none of the terms or provisions hereof may be waived, altered,
modified or amended except as the Lender may consent thereto in writing.
7. The Borrower agrees to deliver to the Lender annually, or at
such other reasonable intervals as the Lender may request, its financial
statements (and such other financial information as Lender may
reasonably request) in such format as is acceptable to the Lender.
8. The Borrower hereby agrees to pay all out-of-pocket costs and
expenses, including attorneys' fees, reasonably incurred by the Lender
to enforce the collection of the indebtedness evidenced by this note or
in enforcing any of the rights, powers, remedies, and privileges of the
Lender hereunder or under the Security Documents. As used in this note,
the term, "attorneys' fees", shall mean reasonable charges and any
out-of-pocket expenses for legal services rendered to or on behalf of
the Lender in connection with the collection of the indebtedness
evidenced by this note at any time whether prior to the commencement of
judicial proceedings and/or thereafter at the trial and/or appellate
level and/or in pre- and post-judgment or bankruptcy proceedings.
9. Both principal and interest of this note shall be payable in
lawful currency of the United States of America to the Lender at 100
Southeast Second Street, Miami, Florida 33131, Attn: Private Client
Group or at such other place or to such other person as may be
designated in writing by the Lender, in immediately available (same day)
funds without deduction for or on account of any present or future taxes
levied or imposed on this note, the proceeds hereof, or on the Borrower
or holder hereof by any government, or any instrumentality, authority or
political subdivision thereof. The Borrower agrees, upon the request of
the Lender, to
- 4 -
<PAGE>
pay all such taxes (other than taxes on or measured by net income of the
holder hereof) in addition to the principal and interest evidenced by
this note.
10. To the extent permitted by law, any amount of principal and/or
interest evidenced by this note which is not paid on the day when such
payment is scheduled to be made, regardless of whether or not the Lender
has accelerated payment of any or all sums outstanding under this note,
shall bear interest from the day when due until said amount is paid in
full, payable on demand, at the rate of eighteen percent (18%) per annum
("DEFAULT RATE"); not to exceed, however, the maximum lending rate
permitted by Federal or Florida law whichever is higher or unlimited and
less any amounts collected as a late charge. In the event any such
payment of interest in excess of such maximum lending rate is received
by the Lender, then such excess shall constitute and be designated as a
payment on principal hereunder or, if such amount is in excess of the
principal indebtedness then due, such excess shall be refunded to the
Borrower.
11. The Lender, at its option, may make subsequent advances
evidenced by this note in which event this note shall remain valid and
enforceable notwithstanding partial or total repayment, reborrowing and
repayment of sums hereunder. This note shall be deemed to have been made
under and shall be governed by the laws of the State of Florida in all
respects [except as to interest rates and other terms of lending which
are, by virtue of a federal preemption or, at the election of the
Lender, may be governed by the laws of the United States], including
matters of construction, validity, and performance. If any provision of
this note shall be deemed unenforceable under applicable law, such
provision shall be ineffective, but only to the extent of such
unenforceability, without invalidating the remainder of such provision
or the remaining provisions of this note. If more than one person signs
this note as a maker, each shall be jointly and severally liable
hereunder. All of the terms and provisions of this note shall be
applicable to and be binding upon each and every maker, endorser,
surety, Guarantor, and all other persons who are or may become liable
for the payment hereof and their heirs, personal representatives,
successors or assigns.
12. The Borrower hereby irrevocably submits to the jurisdiction of
any state or federal court having a situs in the City of Miami, State of
Florida, in any action or proceeding involving or in connection with
this note. The Borrower irrevocably agrees that all claims in respect of
such actions or proceedings may be heard and determined in such Florida
state court or federal court. The Borrower irrevocably waives the
defense of inconvenient forum to the maintenance of such action or
proceeding. The Borrower agrees that a final judgment in any such action
or proceeding shall be conclusive and may be enforced in any other
jurisdiction(s) by suit on the judgment or in any other manner provided
by law. Anything herein to the contrary notwithstanding, the Lender may
bring any
- 5 -
<PAGE>
legal action or proceeding involving this note in any other appropriate
jurisdiction.
13. This Note consolidates into one aggregate indebtedness, the
indebtednesses evident by (i) that certain Restated promissory Note,
dated September 15, 1994 from Miller Industries, Inc. to
Intercontinental Bank (predecessor of NationsBank, N.A. (South)) and
(ii) that certain Future Advance Promissory Note of even date herewith
from Miller Industries, Inc. to NationsBank, N.A. (South).
14. THE BORROWER, AND THE LENDER IN ACCEPTING DELIVERY OF THIS
NOTE, KNOWINGLY, VOLUNTARILY, AND INTENTIONALLY WAIVE THE RIGHT EITHER
MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED ON OR
ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS NOTE AND ANY DOCUMENT
EXECUTED AND DELIVERED BY THE BORROWER TO THE LENDER IN CONJUNCTION WITH
THIS NOTE, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS
(WHETHER ORAL OR WRITTEN) OR ACTIONS OF EITHER PARTY OR ANY STOCKHOLDER,
DIRECTOR, OFFICER, EMPLOYEE, AGENT OR INDEPENDENT CONTRACTOR OF EITHER.
THIS PROVISION IS A MATERIAL INDUCEMENT TO THE LENDER TO MAKE THE LOAN
EVIDENCED BY THIS NOTE.
BORROWER:
MILLER INDUSTRIES, INC.
By: /s/ ANGELO NAPOLITANO
--------------------------------
Angelo Napolitano, President
GUARANTY
For value received, I, Angelo Napolitano, absolutely and
unconditionally guarantee the repayment of (i) $100,00.00, plus accrued
interest thereon, of the total amount of the aforesaid Note (ii) a
limited portion of the balance of the aforesaid Note in accordance with
the terms of that certain Continuing Limited Guarantee, dated September
15, 1994 from Angelo Napolitano to Intercontinental Bank now held by
NationsBank, N.A. (South) as to successor by acquisition to
Intercontinental Bank. If Miller Industries, Inc. defaults in the
payment of principal and/or interest due under the aforesaid note
according to its terms, I will repay on demand that portion of the
aforesaid note as required by the foregoing.
/s/ ANGELO NAPOLITANO
-------------------------------
Angelo Napolitano, individually
- 6 -
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> APR-30-1997
<PERIOD-END> APR-30-1997
<CASH> 80,334
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 27,000
<CURRENT-ASSETS> 117,334
<PP&E> 943,223
<DEPRECIATION> 710,471
<TOTAL-ASSETS> 404,716
<CURRENT-LIABILITIES> 232,173
<BONDS> 0
0
0
<COMMON> 149,133
<OTHER-SE> (1,304,241)
<TOTAL-LIABILITY-AND-EQUITY> 404,716
<SALES> 42,341
<TOTAL-REVENUES> 293,500
<CGS> 14,598
<TOTAL-COSTS> 14,598
<OTHER-EXPENSES> 324,942
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 130,833
<INCOME-PRETAX> (46,040)
<INCOME-TAX> 0
<INCOME-CONTINUING> (46,040)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (46,040)
<EPS-PRIMARY> (.02)
<EPS-DILUTED> (.02)
</TABLE>
