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, 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
(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 April 30, 1998 is 2,982,662 shares.
<PAGE>
MILLER INDUSTRIES, INC.
FORM 10-QSB
JULY 31, 1997
INDEX
PAGE NO.
--------
PART I: FINANCIAL INFORMATION
Item 1. Financial Statements
Balance Sheets -
July 31, 1997 and April 30, 1997................................ 3
Statements of Operations and (Deficit) -
Three Months Ended July 31, 1997 and 1996....................... 4
Statements of Cash Flows -
Three Months Ended July 31, 1997 and 1996....................... 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
2
<PAGE>
MILLER INDUSTRIES, INC.
BALANCE SHEETS
AS OF JULY 31, 1997 AND APRIL 30, 1997
(DOLLARS IN THOUSANDS)
JULY 31, APRIL 30,
1997 1997
-------- ---------
ASSETS
Investment Property:
Land $ 161 $ 161
Building and Improvements 749 749
Furniture and Fixtures 11 11
Tenant Improvements 39 0
Machinery and Equipment 22 22
-------- ---------
982 943
Less Accumulated Depreciation (711) (711)
-------- ---------
271 232
Other Assets:
Cash 84 80
Inventory 27 27
Prepaid Expenses 6 11
Deferred Lease Incentive 0 40
Other Assets 15 14
-------- ---------
132 172
-------- ---------
TOTAL ASSETS $ 403 $ 404
======== =========
LIABILITIES AND SHAREHOLDERS'
(DEFICIENCY)
Liabilities:
Mortgage Payable $1,344 $1,348
Accounts Payable and
Accrued Expenses 181 178
Deposits 33 33
-------- ---------
TOTAL LIABILITIES 1,558 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 1,126 1,126
(Deficit) (2,430) (2,430)
-------- ---------
TOTAL SHAREHOLDERS' (DEFICIENCY) (1,155) (1,155)
-------- ---------
$ 403 $ 404
======== =========
The accompanying notes are an integral part of these financial statements.
3
<PAGE>
MILLER INDUSTRIES, INC.
STATEMENTS OF OPERATIONS AND (DEFICIT)
THREE MONTHS ENDED JULY 31, 1997 AND 1996
(DOLLARS IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
(UNAUDITED)
THREE MONTHS ENDED
JULY 31,
----------------------------------
1997 1996
-------------- -------------
REVENUES:
Rental $ 46 $ 43
Net Sales 11 14
Interest and other 7 32
-------------- -------------
TOTAL REVENUES 64 89
-------------- -------------
EXPENSES:
Rental and Administration 40 38
Cost of Sales 1 5
Interest Expense 21 23
-------------- -------------
TOTAL EXPENSES 62 66
-------------- -------------
Net Income (Loss) $ 2 $ 23
============== =============
EARNINGS PER COMMON SHARE: $ NM $ .01
============== =============
Shares used in computing earnings
per share 2,982,662 2,982,662
============== =============
The accompanying notes are an integral part of these financial statements.
4
<PAGE>
MILLER INDUSTRIES, INC.
STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED JULY 31,1997 AND 1996
(DOLLARS IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
(UNAUDITED)
THREE MONTHS ENDED
JULY 31,
---------------------------------
1997 1996
------------ ------------
OPERATING ACTIVITIES:
Net Income (Loss) $ 2 $ 23
Depreciation and amortization 7 7
Realized gain on sale of fixed assets 0 (27)
Changes in operating
assets and liabilities -
Receivables 0 0
Inventories (6) 6
Prepaid expenses (1) (46)
Accounts payable 18 14
Accrued expenses 4 20
Tenants deposits 0 1
------------ ------------
NET CASH PROVIDED (USED)
BY OPERATING ACTIVITIES 24 (2)
FINANCING ACTIVITIES:
Reduction of long-term debt (19) (17)
------------ ------------
NET CASH PROVIDED (USED)
BY FINANCING ACTIVITIES 5 (19)
------------ ------------
INVESTMENT ACTIVITIES:
Proceeds from property, plant and
equipment sales 0 27
------------ ------------
INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS 5 8
Cash and Cash Equivalents as of
of April 30, 1997 and 1996 80 130
------------ ------------
Cash and Cash Equivalents as of
of July 31, 1997 and 1996 $ 85 $ 138
============ ============
The accompanying notes are an integral part of these financial statements.
5
<PAGE>
MILLER INDUSTRIES, INC.
NOTES TO FINANCIAL STATEMENTS
JULY 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 July 31, 1997, and April 30,
1997, and the results of operations and cash flows for the three month periods
ended July 31, 1997 and 1996.
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 months ended July 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, 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 1997 and 1996 are shown as
continuing operations. Prior year results have been reclassified from
discontinued operations to continuing operations.
6
<PAGE>
NOTE 3 - INVENTORIES
The inventories at July 31, 1997 and at April 30, 1997 are valued at the lower
of cost (first in, first out method) or market.
Inventories, by classification, at July 31, 1997 and April 30, 1997 were as
follows:
JULY 31, APRIL 30,
(Thousands of dollars) 1997 1997
---------- ---------
Raw Materials $ 0 $ 0
Work in process 0 0
Finished goods 27 27
---------- ---------
$ 27 $ 27
========== =========
NOTE 4 - INCOME TAXES
The Company has net operating loss carry forwards of approximately $2,431,000
which will expire at various dates through 2012.
7
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
RESULTS OF OPERATION
For the first quarter ended July 31, 1997, the Company had rental income of
$46,000, 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 $40,000 in the first quarter of 1997, compared to $38,000 in 1996.
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 $11,000 (with cost of goods sold of
$1,000), compared to sales of $14,000 in 1996 (and cost of goods sold of
$5,000).
LIQUIDITY AND CAPITAL RESOURCES
The Company's cash increased by $5,000 during the first three months of the 1997
fiscal year compared with an increase of $8,000 during the first three months of
fiscal year 1996. The increase in cash in 1997 was primarily due to increased
rental income. As of July 31, 1997, the Company's cash position was
approximately $85,000.
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 repairs to a portion of the Building's roof, 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.
8
<PAGE>
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 the rental of an estimated 24,000 square feet
for approximately $10,000 per month. In December 1997, the Company executed a
new lease agreement for an additional tenant. This will provide an additional
$6,550 per month of income commencing in March 1998. The amount of the leased
space is approximately 18,800 square feet. The term of this lease is for a
period of three years. The Company also has an existing short-term lease for a
smaller portion of the Building which provides for revenue of $3,978 per month.
This lease is currently scheduled for expiration in June 1998, 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.
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.
9
<PAGE>
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 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
10
<PAGE>
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, 1997.
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: April 30, 1998 /S/ ANGELO NAPOLITANO
-----------------------------
Angelo Napolitano
Chairman of the Board of Directors
Chief Executive Officer
Principal Financial Officer
11
<PAGE>
EXHIBIT INDEX
EXHIBIT DESCRIPTION
- ------- -----------
27.1 Financial Data Schedule
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM ITS JULY 31,
1997 10-Q AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> APR-30-1998
<PERIOD-START> MAY-01-1997
<PERIOD-END> JUL-31-1997
<CASH> 84,000
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 27,000
<CURRENT-ASSETS> 0
<PP&E> 982,000
<DEPRECIATION> 711,000
<TOTAL-ASSETS> 403,000
<CURRENT-LIABILITIES> 1,158,000
<BONDS> 0
0
0
<COMMON> 149,000
<OTHER-SE> (1,147,000)
<TOTAL-LIABILITY-AND-EQUITY> 403,000
<SALES> 0
<TOTAL-REVENUES> 64,000
<CGS> 1,000
<TOTAL-COSTS> 1,000
<OTHER-EXPENSES> 40,000
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 21,000
<INCOME-PRETAX> (2,000)
<INCOME-TAX> 0
<INCOME-CONTINUING> (2,000)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (2,000)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
