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 July 31, 1996 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.
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(Exact Name of Registrant as Specified in its Charter)
FLORIDA 59-0996356
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(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
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(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.
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MILLER INDUSTRIES, INC.
FORM 10-QSB
JULY 31, 1996
INDEX
PAGE NO.
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PART I: FINANCIAL INFORMATION
Item 1. Financial Statements
Balance Sheets -
July 31, 1996 and April 30, 1996............................................................... 3
Statements of Operations and (Deficit) -
Three Months Ended July 31, 1996 and 1995...................................................... 4
Statements of Cash Flows -
Three Months Ended July 31, 1996 and 1995...................................................... 5
Notes to Financial Statements.................................................................. 6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations............................................................ 8
PART II: OTHER INFORMATION
Items 1 to 6.................................................................................................... 10
Signatures...................................................................................................... 13
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<CAPTION>
MILLER INDUSTRIES, INC.
BALANCE SHEETS
AS OF JULY 31, 1996 AND APRIL 30, 1996
(DOLLARS IN THOUSANDS)
JULY 31, APRIL 30,
1996 1996
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ASSETS
Investment Property:
Land $ 161 $ 161
Building and Improvements 724 709
Furniture and Fixtures 10 10
Tenant Improvements 54 0
Machinery and Equipment 22 22
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971 902
Less Accumulated Depreciation (696) (696)
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275 206
Other Assets:
Cash 138 130
Inventory 33 38
Prepaid Expenses 6 9
Deferred Lease Incentive 0 54
Other Assets 21 20
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198 251
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TOTAL ASSETS $ 473 $ 457
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LIABILITIES AND SHAREHOLDERS'
(DEFICIENCY)
Liabilities:
Mortgage Payable $1,362 $1,366
Accounts Payable and
Accrued Expenses 164 167
Deposits 33 33
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TOTAL LIABILITIES 1,559 1,566
Shareholders' (Deficiency):
Preferred stock
$10 par, 250,000 shares authorized;
none issued and outstanding,
Common stock - $.05 par, 5,000,000
shares authorized, 2,982,662 shares
issued and outstanding 149 149
Paid-in capital 1,127 1,127
(Deficit) (2,362) (2,385)
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TOTAL SHAREHOLDERS' (DEFICIENCY) (1,035) (992)
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$ 473 $ 457
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The accompanying notes are an integral part of these financial statements.
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<CAPTION>
MILLER INDUSTRIES, INC.
STATEMENTS OF OPERATIONS AND (DEFICIT)
THREE MONTHS ENDED JULY 31, 1996 AND 1995
(Dollars in Thousands Except
Per Share Amounts)
(UNAUDITED)
THREE MONTHS ENDED
JULY 31,
---------------------------------------
1996 1995
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REVENUES:
Rental $ 43 $ 42
Net Sales 14 16
Interest and other 32 2
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TOTAL REVENUES 89 60
EXPENSES:
Rental and Administration 38 31
Cost of Sales 5 4
Interest Expense 23 31
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TOTAL EXPENSES 66 66
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Net Income (Loss) $ 23 $ (6)
======== ========
EARNINGS PER COMMON SHARE: $ .01 $ (.01)
======== ========
Shares used in computing earnings
per share 2,982,662 2,982,662
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The accompanying notes are an integral part of these financial statements.
4
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<CAPTION>
MILLER INDUSTRIES, INC.
STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED JULY 31, 1996 AND 1995
(Dollars in Thousands
Except Per Share Amounts)
(UNAUDITED)
THREE MONTHS ENDED
JULY 31,
------------------------------------------
1996 1995
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OPERATING ACTIVITIES:
Net Income (Loss) $ 23 $ (6)
Depreciation and amortization 7 7
Realized gain on sale of fixed assets (27) (2)
Changes in operating
assets and liabilities -
Receivables 0 0
Inventories 6 (15)
Prepaid expenses (46) 6
Accounts payable 14 (3)
Accrued expenses 20 (5)
Tenants deposits 1 29
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NET CASH PROVIDED (USED)
BY OPERATING ACTIVITIES (2) 11
FINANCING ACTIVITIES:
Reduction of long-term debt (17) (21)
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NET CASH PROVIDED (USED)
BY FINANCING ACTIVITIES (19) (10)
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INVESTMENT ACTIVITIES:
Proceeds from property, plant and
equipment sales 27 2
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INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS 8 (8)
Cash and Cash Equivalents as of
of April 30, 1996 and 1995 130 167
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Cash and Cash Equivalents as of
of July 31, 1996 and 1995 $ 138 $ 159
========= ==========
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The accompanying notes are an integral part of these financial statements.
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MILLER INDUSTRIES, INC.
NOTES TO FINANCIAL STATEMENTS
JULY 31, 1996
(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 July 31, 1996, and April 30,
1996, and the results of operations and cash flows for the three month periods
ended July 31, 1996 and 1995.
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 months ended July 31, 1996 and 1995, 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 July 31, 1996 and at April 30, 1996 are valued at the lower
of cost (first in, first out method) or market.
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Inventories, by classification, at July 31, 1996 and April 30, 1996 were as
follows:
JULY 31, APRIL 30,
(Thousands of dollars) 1996 1996
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Raw Materials $ 0 $ 0
Work in process 0 0
Finished goods 33 38
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$33 $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.
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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 first quarter ended July 31, 1996, the Company had rental income of
$42,000, compared with rental income of $42,000 for the same period in 1995.
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 $38,000 in the first quarter of 1996, compared to $31,000 in 1995.
During the first 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 first quarter of 1997 were $14,000 (with cost of goods sold of
$5,000), compared to sales of $16,000 in 1996 (and cost of goods sold of
$4,000).
LIQUIDITY AND CAPITAL RESOURCES
The Company's cash increased by $8,000 during the first three months of the 1996
fiscal year compared with a decrease of $8,000 during the first three months of
fiscal year 1995. The increase in cash in 1997 was primarily due to increased
rental income. As of July 31, 1996, the Company's cash position was
approximately $178,000.
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
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of $1,400,000 in full and complete satisfaction of all the 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, 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 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 financing from third parties, seller financing and
issuance of the Company's equity securities.
9
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The Company's business plan is subject to some 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.
At the present time, this problem is a major obstacle which must be overcome to
ensure the Company's future growth.
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
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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 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.
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(Registrant)
Date: September 2, 1997 /S/ ANGELO NAPOLITANO
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Angelo Napolitano
Chairman of the Board of Directors
Chief Executive Officer
Principal Financial Officer
11
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EXHIBIT INDEX
EXHIBIT DESCRIPTION
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27 Financial Data Schedule
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> APR-30-1997
<PERIOD-END> JUL-31-1996
<CASH> 138
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 33
<CURRENT-ASSETS> 171
<PP&E> 971
<DEPRECIATION> 696
<TOTAL-ASSETS> 473
<CURRENT-LIABILITIES> 197
<BONDS> 0
0
0
<COMMON> 149
<OTHER-SE> (1,184)
<TOTAL-LIABILITY-AND-EQUITY> 473
<SALES> 14
<TOTAL-REVENUES> 89
<CGS> 5
<TOTAL-COSTS> 5
<OTHER-EXPENSES> 38
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 23
<INCOME-PRETAX> 23
<INCOME-TAX> 0
<INCOME-CONTINUING> 23
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 23
<EPS-PRIMARY> .01
<EPS-DILUTED> .01
</TABLE>
