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, 1998 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
(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 September 1, 1998 is 2,982,662 shares.
<PAGE>
MILLER INDUSTRIES, INC.
FORM 10-QSB
JANUARY 31, 1998
INDEX
PAGE NO.
--------
PART I: FINANCIAL INFORMATION
Item 1. Financial Statements
Balance Sheets -
January 31, 1998 and April 30, 1997....................... 3
Statements of Operations and (Deficit) -
Three Months Ended January 31, 1998 and 1997.............. 4
Nine Months Ended January 31, 1998 and 1997............... 5
Statements of Cash Flows -
Nine Months Ended January 31, 1998 and 1997............... 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
2
<PAGE>
<TABLE>
<CAPTION>
MILLER INDUSTRIES, INC.
BALANCE SHEETS
AS OF JANUARY 31, 1998 AND APRIL 30, 1997
(DOLLARS IN THOUSANDS)
JANUARY 31, APRIL 30,
1998 1997
----------- ---------
<S> <C> <C>
ASSETS
Investment Property:
Land $ 161 $ 161
Building and Improvements 846 749
Furniture and Fixtures 11 11
Tenant Improvements 40 0
Machinery and Equipment 22 22
------ ------
1,080 943
Less: Accumulated Depreciation (711) (711)
------ ------
369 232
Other Assets:
Cash 70 80
Inventory 22 27
Prepaid Expenses 13 11
Deferred Lease Incentive 0 40
Other Assets 16 14
------ ------
121 172
------ ------
TOTAL ASSETS $ 490 $ 404
====== ======
LIABILITIES AND SHAREHOLDERS'
(DEFICIENCY)
Liabilities:
Mortgage Payable $1,437 $1,348
Accounts Payable and
Accrued Expenses 196 178
Deposits 47 33
------ ------
TOTAL LIABILITIES 1,680 1,559
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 1,126
(Deficit) (2,466) (2,430)
------ ------
TOTAL SHAREHOLDERS' (DEFICIENCY) (1,190) (1,155)
------ ------
$ 490 $ 404
====== ======
</TABLE>
The accompanying notes are an integral part of these financial statements.
3
<PAGE>
<TABLE>
<CAPTION>
MILLER INDUSTRIES, INC.
STATEMENTS OF OPERATIONS AND (DEFICIT)
THREE MONTHS ENDED JANUARY 31, 1998 AND 1997
(Dollars in Thousands Except Per Share Amounts)
(UNAUDITED)
THREE MONTHS ENDED
JANUARY 31,
------------------------------------
1998 1997
--------- ---------
<S> <C> <C>
REVENUES:
Rental $ 50 $ 45
Net Sales 12 9
Interest and other 9 5
--------- ---------
TOTAL REVENUES 71 59
--------- ---------
EXPENSES:
Rental and Administration 57 44
Cost of Sales 0 2
Interest Expense 32 43
--------- ---------
TOTAL EXPENSES 89 89
--------- ---------
Net (Loss) $ (18) $ (30)
========= =========
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.
4
<PAGE>
<TABLE>
<CAPTION>
MILLER INDUSTRIES, INC.
STATEMENTS OF OPERATIONS AND (DEFICIT)
NINE MONTHS ENDED JANUARY 31, 1998 AND 1997
(Dollars in Thousands Except Per Share Amounts)
(UNAUDITED)
NINE MONTHS ENDED
JANUARY 31,
------------------------------------------
1998 1997
--------- ---------
<S> <C> <C>
REVENUES:
Rental $ 140 $ 134
Net Sales 31 32
Interest and other 22 46
--------- ---------
TOTAL REVENUES 193 212
--------- ---------
EXPENSES:
Rental and Administration 136 128
Cost of Sales 7 10
Interest Expense 85 89
--------- ---------
TOTAL EXPENSES 228 227
--------- ---------
Net Income (Loss) $ (35) $ (15)
========= ==========
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.
5
<PAGE>
<TABLE>
<CAPTION>
MILLER INDUSTRIES, INC.
STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED JANUARY 31, 1998 AND 1997
(Dollars in Thousands Except Per Share Amounts)
(UNAUDITED)
NINE MONTHS ENDED
JANUARY 31,
--------------------------------------
1998 1997
-------- -------
<S> <C> <C>
OPERATING ACTIVITIES:
Net Income (Loss) $ (35) $ (16)
Depreciation and amortization 10 14
Realized gain on sale of fixed assets (2) (7)
Changes in operating
assets and liabilities -
Receivables (9) 0
Inventories 0 (9)
Prepaid expenses (36) 0
Accounts payable (10) 15
Accrued expenses (14) (9)
Tenants deposits 0 0
-------- -------
NET CASH PROVIDED (USED)
BY OPERATING ACTIVITIES (96) (12)
-------- -------
FINANCING ACTIVITIES:
Increase (reduction) of
long-term debt 83 (16)
-------- -------
NET CASH PROVIDED (USED)
BY FINANCING ACTIVITIES (13) (28)
-------- -------
INVESTMENT ACTIVITIES:
Proceeds from property, plant and
equipment sales 2 7
-------- -------
INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS (11) (21)
-------- -------
Cash and Cash Equivalents as of
of April 30, 1998 and 1997 80 130
-------- -------
Cash and Cash Equivalents as of
of January 31, 1998 and 1997 $ 69 $ 109
======== =======
</TABLE>
The accompanying notes are an integral part of these financial statements.
6
<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, 1998 and April 30,
1997, and the results of operations and cash flows for the three and nine month
periods ended January 31, 1998 and 1997.
Balance sheet information as of April 30, 1997, is derived from the audited
balance sheet as of April 30, 1997 contained in the Company's Annual Report on
Form 10-K.
The results of operations for the three and nine months ended January 31, 1998
and 1997, 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, 1997, 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 1998 and 1997 are shown as
continuing operations. Prior year results have been reclassified from
discontinued operations to continuing operations.
7
<PAGE>
NOTE 3 - INVENTORIES
The inventories at January 31, 1998 and at April 30, 1997 are valued at the
lower of cost (first in, first out method) or market.
Inventories, by classification, at January 31, 1998 and April 30, 1997 were as
follows:
<TABLE>
<CAPTION>
JANUARY 31, APRIL 30,
(Thousands of dollars) 1998 1997
---------- ---------
<S> <C> <C>
Raw Materials $ 0 $ 0
Work in process 0 0
Finished goods 22 27
---------- ---------
$ 22 $ 27
========== =========
</TABLE>
NOTE 4 - INCOME TAXES
The Company has net operating loss carry forwards of approximately $2,431,000
which will expire at various dates through 2010.
8
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATION
For the third quarter ended January 31, 1998, the Company had rental income of
$50,000, compared with rental income of $45,000 for the same period in 1997.
During these periods, less than half of the Company's warehouse was leased. The
Company needs to lease a greater portion of its warehouse in order to achieve
positive cash flow from operations. Rental income was offset by rental and
administrative expense of $57,000 in the third quarter of 1998, compared to
$44,000 in 1997.
During the third quarter of 1998, 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 certain equipment formerly utilized by its window business. Sales in
the third quarter of 1998 were $12,000 (with cost of goods sold of $0), compared
to sales of $8,000 in 1997 (and cost of goods sold of $7,000).
LIQUIDITY AND CAPITAL RESOURCES
The Company's cash decreased by $11,000 during the first nine months of the 1998
fiscal year compared with a decrease of $21,000 during the first nine months of
fiscal year 1997. The decrease in cash in the 1998 fiscal year was primarily due
to operating losses and cash utilized to improve the Company's building. The
decrease was offset in part by $83,000 in net additional borrowings. As of
January 31, 1998, the Company's cash position was approximately $69,000.
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 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.
9
<PAGE>
CURRENT OPERATIONS
At the present time, the Company's principal business activity is the leasing of
its building. The Company has leased approximately a substantial portion of the
building to a total of three (3) tenants as follows:
The Company has entered into a five-year lease expiring in January
2000, which provides for the rental of approximately 24,000 square feet
for approximately $10,000 per month.
The Company has entered into a three-year lease expiring in December
2000, which provides for the rental of approximately 18,800 square feet
for $6,550 per month.
The Company has also entered into a short-term lease for a smaller
portion of the building which provides for revenue of $4,000 per month.
This lease has expired and the tenant continues to occupy the space on
a month to month.
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 will be able to 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 and issuance of the
Company's equity securities.
The Company's business plan is subject to 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.
10
<PAGE>
PART II. OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS
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 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. (a) EXHIBITS
27 Financial Data Schedule
(b) REPORTS ON FORM 8-K
No reports on Form 8-K were filed by the Company during the
quarter ended January 31, 1998.
11
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
MILLER INDUSTRIES, INC.
(Registrant)
Date: September 30, 1998 /S/ ANGELO NAPOLITANO
------------------------------
Angelo Napolitano
Chairman of the Board of Directors
Chief Executive Officer
Principal Financial Officer
12
<PAGE>
EXHIBIT INDEX
EXHIBIT DESCRIPTION
- ------- -----------
27 Financial Data Schedule
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM ITS JANUARY
31, 1998 10-Q AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> APR-30-1998
<PERIOD-START> NOV-01-1997
<PERIOD-END> JAN-31-1998
<CASH> 70,000
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 22,000
<CURRENT-ASSETS> 0
<PP&E> 1,080,000
<DEPRECIATION> 711,000
<TOTAL-ASSETS> 490,000
<CURRENT-LIABILITIES> 1,680,000
<BONDS> 0
0
0
<COMMON> 149,000
<OTHER-SE> (1,339,000)
<TOTAL-LIABILITY-AND-EQUITY> 490,000
<SALES> 12,000
<TOTAL-REVENUES> 71,000
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 57,000
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 32,000
<INCOME-PRETAX> (18,000)
<INCOME-TAX> 0
<INCOME-CONTINUING> (18,000)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (18,000)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
