SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-QSB
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended January 31, 1997 or
[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________ to _______________
Commission File No. 1-5926
MILLER INDUSTRIES, INC.
(Exact Name of Registrant as Specified in its Charter)
FLORIDA 59-0996356
- --------------------------------- -------------------------
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
16295 N.W. 13TH AVE., MIAMI, FLORIDA 33169
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(Address of Principal Executive Offices)
(305) 621-0501
----------------------------------------------------
(Registrant's telephone number, including area code)
NOT APPLICABLE
---------------------------------------------------------------
(Former Name, Former Address and Former Fiscal Year, if Changed
Since Last Report)
Indicate by check mark whether the registrant: (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or 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 X
The number of shares outstanding of each of the issuer's classes of common
stock, par value $.05 per share, as of July 7, 1997 is 2,982,662 shares.
<PAGE>
MILLER INDUSTRIES, INC.
FORM 10-QSB
JANUARY 31, 1997
INDEX
PAGE NO.
PART I: FINANCIAL INFORMATION
Item 1. Financial Statements
Balance Sheets -
January 31, 1997 and April 30, 1996........................ 3
Statements of Operations and (Deficit) -
Three Months Ended January 31, 1997 and 1996............... 4
Nine Months Ended January 31, 1997 and 1996................ 5
Statements of Cash Flows -
Nine Months Ended January 31, 1997 and 1996................ 6
Notes to Financial Statements.............................. 7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations........................ 9
PART II: OTHER INFORMATION
Items 1 to 6................................................................ 11
Signatures.................................................................. 12
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<PAGE>
MILLER INDUSTRIES, INC.
BALANCE SHEETS
AS OF JANUARY 31, 1997 AND APRIL 30, 1996
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
JANUARY 31, APRIL 30,
1997 1996
----------- ---------
<S> <C> <C>
ASSETS
Investment Property:
Land $ 161 $ 161
Building and Improvements 733 708
Furniture and Fixtures 11 11
Tenant Improvements 0 0
Machinery and Equipment 22 22
------- -------
927 902
Less Accumulated Depreciation 696 696
------- -------
231 206
Other Assets:
Cash 110 130
Inventory 31 38
Prepaid Expenses 13 9
Deferred Lease Incentive 54 54
Other Assets 20 20
------- -------
228 251
------- -------
TOTAL ASSETS $ 459 $ 457
======= =======
LIABILITIES AND SHAREHOLDERS'
(DEFICIENCY)
Liabilities:
Mortgage Payable $ 1,354 $ 1,366
Accounts Payable and
Accrued Expenses 197 167
Deposits 33 33
------- -------
TOTAL LIABILITIES 1,584 1,566
Shareholders' (Deficiency):
Preferred stock
$10 par, 250,000 shares authorized;
none issued and outstanding,
Common stock - $.05 par, 5,000,000
shares authorized, 2,982,662 shares
issued and outstanding 149 149
Paid-in capital 1,127 1,127
(Deficit) (2,401) (2,385)
-------- --------
TOTAL SHAREHOLDERS' (DEFICIENCY) (1,125) (1,109)
-------- --------
$ 459 $ 457
======== ========
</TABLE>
The accompanying notes are an integral part of these financial statements.
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<PAGE>
MILLER INDUSTRIES, INC.
STATEMENTS OF OPERATIONS AND (DEFICIT)
THREE MONTHS ENDED JANUARY 31, 1997 AND 1996
(DOLLARS IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
JANUARY 31,
-------------------------------------------
1997 1996
----------- ----------
<S> <C> <C>
REVENUES:
Rental $ 45 $ 43
Net Sales 9 9
Interest and other 5 17
--------- ----------
TOTAL REVENUES 59 69
EXPENSES:
Rental and Administration 44 51
Cost of Sales 2 6
Interest Expense 43 34
--------- ----------
TOTAL EXPENSES 89 92
--------- ----------
(Loss) (30) (22)
Net Income (Loss) $ (30) $ (22)
========= ==========
EARNINGS PER COMMON SHARE:
Net Income (Loss) $ (.01) $ (.01)
========= ==========
Shares used in computing earnings
per share 2,982,662 2,982,662
</TABLE>
The accompanying notes are an integral part of these financial statements.
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<PAGE>
MILLER INDUSTRIES, INC.
STATEMENTS OF OPERATIONS AND (DEFICIT)
NINE MONTHS ENDED JANUARY 31, 1997 AND 1996
(DOLLARS IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
(UNAUDITED)
<TABLE>
<CAPTION>
NINE MONTHS ENDED
JANUARY 31,
-------------------------------------------
1997 1996
------------ ------------
<S> <C> <C>
REVENUES:
Rental $ 134 $ 129
Net Sales 32 40
Interest and other 46 22
---------- -----------
TOTAL REVENUES 212 191
EXPENSES:
Rental and Administration 128 136
Cost of Sales 10 12
Interest Expense 89 86
---------- -----------
TOTAL EXPENSES 227 234
---------- -----------
(Loss) Continuing Operations (15) (43)
Net Income (Loss) $ (15) $ (43)
========== ===========
EARNINGS PER COMMON SHARE: $ (.01) $ (.01)
========== ===========
Shares used in computing earnings
per share 2,982,662 2,982,662
</TABLE>
The accompanying notes are an integral part of these financial statements.
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<PAGE>
<TABLE>
<CAPTION>
MILLER INDUSTRIES, INC.
STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED JANUARY 31, 1997 AND 1996
(DOLLARS IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
(UNAUDITED)
NINE MONTHS ENDED
JANUARY 31,
-------------------------------------------
1997 1996
------------ -----------
<S> <C> <C>
OPERATING ACTIVITIES:
Net Income (Loss) $ (16) $ (43)
Depreciation and amortization 14 11
Realized gain on sale of fixed assets (7) (2)
Changes in operating
assets and liabilities -
Receivables 0 0
Inventories (9) 23
Prepaid expenses 0 1
Accounts payable 15 23
Accrued expenses (9) 10
Tenants deposits 0 0
------ ------
NET CASH PROVIDED (USED)
BY OPERATING ACTIVITIES (12) 23
FINANCING ACTIVITIES:
Reduction of long-term debt (16) (19)
------ ------
NET CASH PROVIDED (USED)
BY FINANCING ACTIVITIES (28) 4
------ ------
INVESTMENT ACTIVITIES:
Proceeds from property, plant and
equipment sales 7 2
------ ------
INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS (21) 6
------ ------
Cash and Cash Equivalents as of
of April 30, 1996 and 1995 $ 130 $ 167
====== ======
Cash and Cash Equivalents as of
of January 31, 1997 and 1996 $ 109 $ 173
====== ======
</TABLE>
The accompanying notes are an integral part of these financial statements.
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<PAGE>
MILLER INDUSTRIES, INC.
NOTES TO FINANCIAL STATEMENTS
JANUARY 31, 1997
(UNAUDITED)
NOTE 1 - GENERAL
In the opinion of the Company, the accompanying unaudited financial statements
contain all adjustments (consisting of only normal recurring accruals) necessary
to present fairly the financial position as of January 31, 1997, and April 30,
1996, and the results of operations and cash flows for the three and nine month
periods ended January 31, 1997 and 1996.
Balance sheet information as of April 30, 1996, is derived from the audited
balance sheet as of April 30, 1996 contained in the Company's Annual Report on
Form 10-K.
The results of operations for the three and nine months ended January 31, 1997
and 1996, are not necessarily indicative of the results to be expected for the
full year.
All footnotes and disclosures required under generally accepted accounting
principles are not shown in this report.
See the Company's notes to financial statements contained in its Annual Report
on Form 10-K, for the year ended April 30, 1996, for disclosure of significant
accounting policies and pertinent disclosures.
NOTE 2 - OPERATIONS
During its 1992 fiscal year, the Company discontinued its Mildoor sliding glass
door and window operations. These activities comprised the Company's only
business unit. However, effective September 15, 1994, the Company refinanced its
mortgage debt, which allowed the Company to continue to operate in a new type of
business. This consisted of leasing its building to third parties. Consequently,
the results of the Company's operations for fiscal 1997 and 1996 are shown as
continuing operations. Prior year results have been reclassified from
discontinued operations to continuing operations.
NOTE 3 - INVENTORIES
The inventories at January 31, 1997 and at April 30, 1996 are valued at the
lower of cost (first in, first out method) or market.
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<PAGE>
Inventories, by classification, at January 31, 1997 and April 30, 1996 were as
follows:
JANUARY 31, APRIL 30,
(Thousands of dollars) 1997 1996
---------- ---------
Raw Materials $ 0 $ 0
Work in process 0 0
Finished goods 31 38
----- -----
$ 31 $ 38
===== =====
NOTE 4 - INCOME TAXES
The Company has net operating loss carry forwards of approximately $2,486,000
which will expire at various dates through 2010. Additionally, the Company has
tax credit carryforwards of approximately $3,341 which will expire at various
dates through 2001.
-8-
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATION
In 1991, the Company discontinued the operation of its aluminum door and window
business. Prior to that time, these operations comprised the Company's only
business unit. Between 1991 and 1994, the Company's income and expenses were
accounted for under the "discontinued operations" method of accounting. However,
in 1995, the Company decided to report its financial results on the assumption
that it was engaged in continuing operations. This decision was based upon the
Company's new business plan, in which the Company plans to operate as a real
estate holding company. Due to this decision, the Company's results of
operations have been restated to reflect the Company's continuing operations.
See Note 1 to Financial Statements.
For the third quarter ended January 31, 1997, the Company had rental income of
$45,000, compared with rental income of $43,000 for the same period in 1996.
During these periods, less than half of the Company's warehouse was leased. The
Company needs to lease the balance of the space in order to achieve positive
cash flow from operations. Rental income was offset by rental and administrative
expense of $44,000 in the third quarter of 1997, compared to $65,000 in 1996.
During the third quarter of 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. The Company also continued to
liquidate the equipment and product lines for the Company's former business.
Sales in the third quarter of 1997 were $8,700(with cost of goods sold of
$2,000), compared to sales of $9,000 in 1996 (and cost of goods sold of $7,800).
LIQUIDITY AND CAPITAL RESOURCES
The Company's cash decreased by $21,000 during the first nine months of the 1997
fiscal year compared with an increase of $6,000 during the first nine months of
fiscal year 1996. The decrease of cash in 1997 was primarily due to reduced
hardware sales. As of January 31, 1997, the Company's cash position was
approximately $109,000.
On September 15, 1994, the Company entered into a settlement agreement with its
principal mortgage lender. As a result of this settlement, the Company's prior
lender agreed to accept a payment of $1,400,000 in full and complete
satisfaction of all the
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<PAGE>
Company's obligations under its mortgage loan. As of the date of the settlement,
the Company owed the mortgage lender approximately $2,600,000 for principal,
interest and other expenses. The Company financed the settlement through a new
loan of $1,400,000.
The Company's working capital remains extremely limited. The Company intends to
generate cash flow by leasing its building and continuing hardware sales. The
Company believes that its working capital needs over the next twelve months will
include repairing the roof of its building, 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 has modified its business plan. Under the new plan, the Company now
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 approximately $10,000 per month. 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. The parties are conducting
negotiations for a lease extension based on a reduction in the space requirement
of this tenant.
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. 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 cash, financing from third parties, seller financing
and issuance of the Company's equity securities.
The Company's business plan is subject to some uncertainty. There
can be no assurance that the Company will be able to obtain a
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<PAGE>
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.
PART II. OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS
CONTAMINATION AT COMPANY'S WAREHOUSE
In March of 1990, the Company received an environmental report prepared by an
outside environmental consulting firm on the Company's property. This report
indicated the presence of soil and groundwater contamination in an area behind
and to one side of the Company's building. Prior to 1988, the Company utilized
this area to store paint and other chemicals used in the Company's painting
process. These activities were terminated in April 1987.
As previously reported, the Company reported the contamination to the Florida
Department of Environmental Regulation and took steps to clean up the
contamination. In March 1997, after the latest groundwater test results were
analyzed by the Florida Department of Environmental Regulation, the Company
received notification that the State was closing its file on this matter.
SEABOARD CHEMICAL CORPORATION
In September 1991, the Company was identified by the North Carolina Department
of Environmental, Health and Natural Resources ("DEHNR") as one of a number of
generators of hazardous material which had been shipped to a site (the "Site")
owned by the Seaboard Chemical Corp. ("Seaboard"). Accordingly, DEHNR issued to
the Company a notice of responsibility advising of its liability as a potential
responsible party 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
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<PAGE>
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 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.
ITEM 6. REPORTS ON FORM 8-K
No reports on Form 8-K were filed by the Company during the
quarter ended July 31, 1996.
SIGNATURES
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)
Date: September 2, 1997 /s/ ANGELO NAPOLITANO
------------------------------------
Angelo Napolitano
Chairman of the Board of Directors
Chief Executive Officer
Principal Financial Officer
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<PAGE>
EXHIBIT INDEX
EXHIBIT PAGE
- --------- ----
27 Financial Data Schedule
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> APR-30-1997
<PERIOD-END> JAN-31-1997
<CASH> 110
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 31
<CURRENT-ASSETS> 141
<PP&E> 927
<DEPRECIATION> 696
<TOTAL-ASSETS> 459
<CURRENT-LIABILITIES> 230
<BONDS> 0
0
0
<COMMON> 149
<OTHER-SE> (1,274)
<TOTAL-LIABILITY-AND-EQUITY> 459
<SALES> 32
<TOTAL-REVENUES> 212
<CGS> 10
<TOTAL-COSTS> 10
<OTHER-EXPENSES> 128
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 89
<INCOME-PRETAX> (15)
<INCOME-TAX> 0
<INCOME-CONTINUING> (15)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (15)
<EPS-PRIMARY> (.01)
<EPS-DILUTED> (.01)
</TABLE>
