UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Form 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1995
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 Number 0-14651
MILLER BUILDING SYSTEMS, INC.
(Exact name of registrant as specified in its charter)
Delaware 36-3228778
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
58120 County Road 3 South
Elkhart, Indiana 46517
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (219) 295-1214
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 X No
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practical date:
Common Shares, Par Value $.01 Per Share
3,100,963 Shares Outstanding at November 10, 1995
The index to Exhibits is at page 13 in the sequential numbering
system. Total pages: 14
MILLER BUILDING SYSTEMS, INC.
CONTENTS
Pages
Part I. Financial Information
Item 1. Financial Statements
Consolidated Condensed Balance Sheets 3-4
Consolidated Condensed Statements of Income 5
Consolidated Condensed Statements of Cash Flows 6
Notes to Consolidated Condensed Financial
Statements 7-8
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of
Operations 9-10
Part II. Other Information 11
Signatures 12
Index to Exhibits 13
Part I. Financial Information
Item 1. Financial Statements
MILLER BUILDING SYSTEMS, INC.
AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
September 30, July 2,
1995 1995
ASSETS
CURRENT ASSETS:
Cash and temporary cash investments $ 66,580 $ 351,860
Receivables 5,488,189 5,960,110
Inventories 3,020,468 3,533,619
Deferred federal income taxes 320,000 320,000
Other current assets 184,227 126,752
TOTAL CURRENT ASSETS 9,079,464 10,292,341
PROPERTY, PLANT AND EQUIPMENT, at cost 10,207,880 10,110,765
Less, Accumulated depreciation and
amortization 4,247,882 4,083,640
5,959,998 6,027,125
OTHER ASSETS, net 195,601 202,166
TOTAL ASSETS $15,235,063 $16,521,632
See notes to consolidated condensed financial statements.
MILLER BUILDING SYSTEMS, INC.
AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
September 30, July 1,
1995 1995
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Short-term borrowings $ 270,000 $ 1,550,000
Current maturities of long-term debt 198,362 224,925
Accounts payable 1,950,105 2,074,510
Accrued income taxes 243,740 89,827
Accrued expenses and other 644,540 904,766
Accrued nonrecurring items 191,383 193,857
TOTAL CURRENT LIABILITIES 3,498,130 5,037,885
LONG-TERM DEBT, less current maturities 1,385,000 1,385,000
DEFERRED FEDERAL INCOME TAXES 134,000 134,000
OTHER 45,782 45,782
TOTAL LIABILITIES 5,062,912 6,602,667
STOCKHOLDERS' EQUITY:
Common stock, $.01 par value 40,235 40,235
Additional paid-in capital 11,454,903 11,454,903
Retained earnings 1,816,387 1,563,201
13,311,525 13,058,339
Less, Treasury stock, at cost 3,139,374 3,139,374
TOTAL STOCKHOLDERS' EQUITY 10,172,151 9,918,965
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $15,235,063 $16,521,632
See notes to consolidated condensed financial statements.
MILLER BUILDING SYSTEMS, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF INCOME
Three Months Ended
September 30, October 1,
1995 1994
Net sales $10,072,148 $11,238,122
Costs and expenses:
Cost of products sold 8,203,908 9,628,838
Selling, general and administrative 1,422,103 1,214,493
Nonrecurring items - (66,000)
Interest expense 37,704 17,121
Interest income (753) (2,500)
INCOME BEFORE INCOME TAXES 409,186 446,170
Income taxes 156,000 138,000
NET INCOME $ 253,186 $ 308,170
Earnings per share
of common stock $ .08 $ .10
Weighted average number of common
shares and equivalents outstanding 3,106,001 3,128,236
See notes to the consolidated condensed financial statements.
MILLER BUILDING SYSTEMS, INC.
AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
Three Months Ended
September 30, October 1,
1995 1994
Net cash provided by
operating activities $ 1,118,398 $ 655,219
Cash flows (used in)
investing activities:
Purchase of property, plant
and equipment (97,115) (837,316)
Cash flows provided by (used in)
financing activities:
Proceeds from short-term borrowings 2,450,000 6,047,000
Payments on short-term borrowings (3,730,000) (5,672,000)
Payments of long-term debt (26,563) (24,280)
Purchase of treasury stock - (260,000)
Sale of treasury stock - 50,001
Net cash provided by (used in)
financing activities (1,306,563) 140,721
Decrease in cash and
temporary cash investments (285,280) (41,376)
Cash and temporary cash investments:
Beginning of period 351,860 132,084
End of period $ 66,580 $ 90,708
See notes to consolidated condensed financial statements.
MILLER BUILDING SYSTEMS, INC.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
Note A - BASIS OF PRESENTATION AND OPINION OF MANAGEMENT
The accompanying consolidated condensed financial statements
include the accounts of Miller Building Systems, Inc. and its
subsidiaries (individually and collectively referred to herein as
"Miller"). The unaudited interim consolidated condensed financial
statements have been prepared in accordance with the instructions
to Form 10-Q and, therefore, do not include all information and
disclosures necessary for a fair presentation of consolidated
financial position, results of operations and cash flows in
conformity with generally accepted accounting principles. In the
opinion of management, the information furnished herein includes
all adjustments (consisting of normal recurring accruals) necessary
to reflect a fair statement of the interim periods presented.
Operating results for the interim periods are not necessarily
indicative of the results that may be expected for the year ending
June 29, 1996.
The July 1, 1995 consolidated condensed balance sheet was
derived from audited financial statements, but does not include all
disclosures required by generally accepted accounting principles.
Note B - INVENTORIES
Inventories consist of the following:
September 30, 1995 July 1, 1995
Raw materials $ 2,547,032 $ 2,945,366
Work in process 279,307 441,366
Finished goods 194,129 146,887
$ 3,020,468 $ 3,533,619
Note C - INCOME TAXES
The provision for income taxes includes estimated federal
and state income taxes computed using statutory rates in effect
with recognition given to various income tax versus financial
reporting differences. The provision for income taxes was 38.1% of
income before income taxes for the three-months ended September 30,
1995 compared to 30.9% in the comparable three month period of
fiscal 1995. During the first quarter of fiscal 1995, Miller
reversed $32,000 of previously accrued federal and state income
taxes as a result of the final settlement of the audit by the
Internal Revenue Service.
Note D - NONRECURRING ITEMS
During the first quarter of fiscal 1995, Miller reversed
certain restructuring accruals which were recorded during the third
fiscal quarter of 1993. These reversals included $25,000 for the
early release from the Fontana property lease agreement, $23,000
for lower than expected legal costs to settle disputes on the
Denver International Airport project at the closed PME Pacific
Systems, Inc. ("PME") operations and $18,000 for lower interest
expense on the final settlement with the Internal Revenue Service.
Note E - PENDING ACQUISITION
On November 3, 1995, Miller signed a letter of intent to
acquire all of the outstanding common stock of Whitley
Manufacturing, Inc., a manufacturer of modular structures. It is
anticipated the closing date will occur during Miller's third
quarter of fiscal year 1996. The acquisition and purchase price
are subject to, among other things, due diligence investigations by
Miller and negotiation of a definitive purchase agreement.
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Financial Condition - September 30, 1995 compared to July 1, 1995
At September 30, 1995, Miller's working capital was $5,581,334
compared to $5,254,456 at July 1, 1995. The working capital ratio
at September 30, 1995 was 2.6 to 1 compared to 2.0 to 1 at July 1,
1995.
Miller has an unsecured bank credit agreement which provides
for advances up to $5,000,000 through November 30, 1995. There was
$270,000 outstanding under this agreement at September 30, 1995 and
$1,550,000 at July 1, 1995.
Miller believes operating cash flows and the bank credit
agreement are sufficient to meet operating needs.
On November 3, 1995, Miller signed a letter of intent to
acquire all of the outstanding common stock of Whitley
Manufacturing, Inc. (see Note E). Miller intends to use bank
financing and authorized but unissued common shares to finance the
acquisition.
Results of Operations - Three months ended September 30, 1995
compared to the three months ended October 1, 1994
Net sales decreased $1,165,974 during the first quarter of
fiscal 1996 or approximately 10.4% from the corresponding quarter
in fiscal 1995. The decrease in sales volume for the quarter was
attributable to the closed Residential division ("Residential").
Net sales at Miller Structures, Inc. ("Structures") decreased 15.3%
from the first quarter last year. Some of the decline in net sales
at Structures relates to the shift in mix from the lower margin
fleet units to the more profitable custom units. However,
Structures has experienced a softening in their order activity,
which could adversely impact its profits in the second fiscal
quarter. Management does not believe this decrease in net sales at
Structures represents a trend. Miller Telecom Services, Inc
("Telecom") has continued to record net sales increases. Telecom's
net sales more than doubled when compared to the first quarter last
year. Management believes the growth at Telecom will continue
during the current fiscal year.
During the three-month period ended September 30, 1995, cost
of sales was 81.5% of net sales compared to 85.7% for the
comparable period of fiscal 1995. Generally, changes in gross
profit are a result of varying factors, none of which can be
specifically quantified, as product profitability varies in the
different geographic regions served by Miller and also as a result
of varying product mix. The decrease in the cost of sales
percentage for the quarter ended September 30, 1995 is not
necessarily indicative of the trend in cost of sales anticipated in
future periods.
Selling, general and administrative expenses for the three
month period ended September 30, 1995, increased 17.1% when
compared to the similar period of fiscal 1995. Lower selling,
general and administrative expenses at the closed Residential
division was offset by increased administrative costs related to
the growth at Telecom and increased staffing in the Structures'
sales, costing and engineering departments. In addition,
approximately $70,000 in major program costs for marketing,
research and development, and plant efficiency programs were
expensed during the quarter. As a percentage of net sales,
selling, general and administrative expenses for the three-month
period ended September 30, 1995, were 14.1%, on lower sales volume,
compared to 10.8% in the comparable three month period in fiscal
1995.
Nonrecurring items of $66,000, for the quarter ended October
1, 1994, resulted from the reversals of certain accruals related to
an early release from the Fontana property lease agreement, lower
than expected legal costs to settle disputes on the Denver
International Airport project and lower interest expense for the
final settlement with the Internal Revenue Service.
Interest expense increased $20,583 to $37,704 during the
current three month period compared to the similar period of the
prior year. The increase was attributable to interest paid on the
Industrial Revenue Bonds which funded the Telecom plant expansion.
The provision for income taxes was 38.1% of income before
income taxes for the three-months ended September 30, 1995 compared
to 30.9% in the comparable three month period of fiscal 1995.
During the first quarter of fiscal 1995, Miller reversed $32,000 of
previously accrued federal and state income taxes as a result of
the final settlement of the audit by the Internal Revenue Service.
Part II. Other Information
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
(a) Annual Meeting held on November 7, 1995, proxies for which
were solicited pursuant to Regulation 14 under the
Securities and Exchange Act of 1934, as amended.
(c) Matters voted upon at Annual Meeting:
Votes Cast
1. Election of Directors For Withheld
David E. Downen 2,715,986 37,747
William P. Hall 2,715,986 37,747
Myron C. Noble 2,715,986 37,747
2. Appointment of Coopers For 2,727,349
& Lybrand L.L.P. Against 23,934
Withheld 2,450
3. 1995 Employee Stock For 1,461,142
Purchase Plan Against 108,757
Withheld 9,650
Broker non-votes 1,174,184
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits. See Index to Exhibits
(b) Reports on Form 8-K
There were no reports on Form 8-K filed during the three
months ended September 30, 1995.
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 BUILDING SYSTEMS, INC.
(Registrant)
DATE: November 13, 1995 \Edward C. Craig
Edward C. Craig
President and Chief Executive
Officer
(Principal Executive
Officer)
\Thomas J. Martini
Thomas J. Martini
Secretary and Treasurer
(Principal Financial and
Accounting Officer)
MILLER BUILDING SYSTEMS, INC.
AND SUBSIDIARIES
FORM 10-Q
INDEX TO EXHIBITS
Number Assigned
in Regulation S-K
Item 601 Description of Exhibit
(11) Statement regarding computation of
per share earnings
Exhibit 11
MILLER BUILDING SYSTEMS, INC.
AND SUBSIDIARIES
Statement Regarding Computation of Per Share Earnings
Three Months Ended
September 30, October 1,
1995 1994
Calculation of primary earnings
per common share:
Net income $ 253,186 $ 308,171
Shares outstanding, net of
treasury shares, at beginning of
the fiscal year 3,100,963 3,158,578
Additional shares assuming
exercise as of the beginning of
the fiscal year of dilutive stock
options, based on the treasury
stock method using the average
market price for the period 5,038 22,758
Average number of shares purchased
as treasury stock - (66,630)
Average number of shares sold
as treasury stock - 13,530
Weighted average shares and
equivalent shares outstanding 3,106,001 3,128,236
Primary earnings per share: $ .08 $ .10
Fully dilutive earnings per share do not differ materially from
primary earnings per share.
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
ARTICLE> 5
TABLE>
S> <C>
PERIOD-TYPE 3-MOS
FISCAL-YEAR-END> JUN-29-1996
PERIOD-END> SEP-30-1995
CASH> 66,580
SECURITIES> 0
RECEIVABLES> 5,488,189
ALLOWANCES> 0
INVENTORY> 3,020,468
CURRENT-ASSETS> 9,079,464
PP&E> 10,207,880
DEPRECIATION> 4,247,882
TOTAL-ASSETS> 15,235,063
CURRENT-LIABILITIES> 3,498,130
BONDS> 1,385,000
COMMON> 40,235
PREFERRED-MANDATORY> 0
PREFERRED> 0
OTHER-SE> 0
TOTAL-LIABILITY-AND-EQUITY> 15,235,063
SALES> 10,072,148
TOTAL-REVENUES> 10,072,148
CGS> 8,203,903
TOTAL-COSTS> 9,626,011
OTHER-EXPENSES> 0
LOSS-PROVISION> 0
INTEREST-EXPENSE> 37,704
INCOME-PRETAX> 409,186
INCOME-TAX> 156,000
INCOME-CONTINUING> 253,186
DISCONTINUED> 0
EXTRAORDINARY> 0
CHANGES> 0
NET-INCOME> 253,186
EPS-PRIMARY> .08
EPS-DILUTED> .08
</TABLE>
