<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended July 31, 1996
Commission File No. 0-24298
MILLER INDUSTRIES, INC.
------------------------------------------------------
(Exact name of registrant as specified in its charter)
Tennessee 62-1566286
- ------------------------------- ------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
900 Circle 75 Parkway
Atlanta, Georgia 30339
---------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
--------------------------------------------------------------------
Registrant's telephone number, including area code: (770) 988-0797
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 __
The number of shares outstanding of the registrant's Common Stock, $.01
par value, as of August 31, 1996 was 24,015,846 (as adjusted to reflect
the 2-for-1 stock split dividend approved on August 30, 1996 for
distribution on September 30, 1996 to shareholders of record on
September 16, 1996).<PAGE>
MILLER INDUSTRIES, INC.
INDEX
PART I. FINANCIAL INFORMATION Page Number
Item 1. Financial Statements (Unaudited)
--------------------
Condensed Consolidated Balance Sheets -
July 31, 1996 and April 30, 1996 3
Condensed Consolidated Statements of Income
for the Three Months Ended
July 31, 1996 and 1995 4
Condensed Consolidated Statements of Cash Flows
for the Three Months Ended July 31, 1996 and 1995 5
Notes to Condensed Consolidated Financial
Statements 6
Item 2. Management's Discussion and Analysis of Financial
-------------------------------------------------
Condition and Results of Operations 9
-----------------------------------
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 11
---------------------------------
SIGNATURES 12<PAGE>
<PAGE>
MILLER INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
(Unaudited)
ASSETS
<TABLE>
<CAPTION>
July 31, April 30,
1996 1996
------- ----------
<S> <C> <C>
CURRENT ASSETS:
Cash $ 20,930 $ 24,499
Accounts receivable, net 29,595 27,889
Inventories 27,584 27,088
Deferred income taxes 1,162 1,162
Prepaid expenses and other 1,488 1,003
--------- ----------
Total current assets 80,759 81,641
--------- ----------
PROPERTY, PLANT AND EQUIPMENT, net 13,906 13,722
--------- ----------
GOODWILL, net 5,035 5,071
--------- ----------
PATENTS, TRADEMARKS AND OTHER PURCHASED PRODUCT RIGHTS, net
938 926
OTHER ASSETS 217 204
--------- ----------
Total assets $ 100,855 $ 101,564
========= ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Current portion of long-term debt $ 565 $ 751
Line of Credit 234 341
Accounts payable 19,203 21,693
Accrued liabilities 7,978 8,375
--------- ----------
Total current liabilities 27,980 31,160
--------- ----------
LONG-TERM DEBT, less current portion 3,950 3,927
--------- ----------
DEFERRED INCOME TAXES 701 701
--------- ----------
STOCKHOLDERS' EQUITY (Note 2):
Preferred stock, $.01 par value, 5,000,000 shares authorized;
none issued or outstanding 0 0
Common stock, $.01 par value, 100,000,000 shares
authorized; 23,348,266 and 23,142,672 shares issued
and outstanding, respectively 117 115
Additional paid-in capital 54,861 54,847
Retained earnings 13,246 10,814
--------- ----------
Total common stockholders' equity 68,224 65,776
--------- ----------
Total liabilities and stockholders' equity $ 100,855 $ 101,564
========= ==========
</TABLE>
See accompanying notes to condensed consolidated financial statements.
3<PAGE>
MILLER INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Dollars in thousands, except per share data)
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
July 31,
---------------------
1996 1995
------- --------
<S> <C> <C>
NET SALES $ 42,606 $ 32,884
COST OF SALES 35,498 28,056
-------- --------
GROSS PROFIT 7,108 4,828
OPERATING EXPENSES:
Selling 2,068 1,391
General and administrative 1,295 1,101
-------- --------
INCOME FROM OPERATIONS 3,745 2,336
INTEREST INCOME (EXPENSE), net 206 (43)
-------- --------
INCOME BEFORE INCOME TAXES 3,951 2,293
PROVISION FOR INCOME TAXES 1,481 909
-------- --------
NET INCOME $ 2,470 $ 1,384
======== ========
NET INCOME PER COMMON SHARE $ 0.10 $ 0.07
-------- --------
WEIGHTED AVERAGE NUMBER OF
COMMON AND COMMON
EQUIVALENT SHARES
OUTSTANDING 23,620 20,182
========= ========
</TABLE>
See accompanying notes to condensed consolidated financial statements.
4
<PAGE>
MILLER INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in thousands)
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended July 31,
---------------------------
1996 1995
<S> <C> <C>
---- ----
OPERATING ACTIVITIES:
Net income $ 2,470 $ 1,383
-------- --------
Adjustments to reconcile net income to net cash provided by
(used in) operating activities:
Depreciation and amortization 228 131
Changes in operating assets and liabilities:
Decrease (increase) in accounts receivable (1,706) 1,167
Increase in inventories (496) (359)
Decrease (increase) in prepaid expenses and other (498) 60
Increase (decrease) in accrued liabilities (397) 265
Decrease in accounts payable (2,489) (2,520)
Decrease (increase) in other assets (30) 15
-------- --------
Total adjustments (5,388) (1,241)
-------- --------
Net cash provided by (used in) operating
activities (2,918) 142
INVESTING ACTIVITIES:
Purchases of property, plant and equipment (358) (1,019)
Other (46) 0
-------- --------
Net cash used in investing activities (404) (1,019)
-------- --------
FINANCING ACTIVITIES:
Net repayments under line of credit (107) (230)
Repayment of long-term debt (163) (68)
Proceeds from issuance of long-term debt 0 66
Proceeds from exercise of stock options 23 0
-------- --------
Net cash provided by (used in) financing activities (247) (232)
-------- --------
NET DECREASE IN CASH (3,569) (1,109)
CASH, beginning of period 24,499 2,631
-------- --------
CASH, end of period $ 20,930 1,522
======== ========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash payments for interest $ 127 $ 57
======== ========
Cash payments for income taxes - State and Federal $ 1,520 $ 797
======== ========
</TABLE>
See accompanying notes to condensed consolidated financial statements.
5
<PAGE>
MILLER INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. Basis of Presentation
The condensed consolidated financial statements of Miller
Industries, Inc. and subsidiaries (the "Company") included
herein have been prepared by the Company pursuant to the
rules and regulations of the Securities and Exchange
Commission. Certain information and footnote disclosures
normally included in annual financial statements prepared in
accordance with generally accepted accounting principles
have been condensed or omitted pursuant to such rules and
regulations. Nevertheless, the Company believes that the
disclosures are adequate to make the financial information
presented not misleading. In the opinion of management, the
accompanying unaudited condensed consolidated financial
statements reflect all adjustments, which are of a normal
recurring nature, to present fairly the Company's financial
position, results of operations and cash flows at the dates
and for the periods presented. Interim results of
operations are not necessarily indicative of results to be
expected for the fiscal year. These condensed consolidated
financial statements should be read in conjunction with the
Company's Annual Report on Form 10-K for the year ended
April 30, 1996.
2. Common Stock
All share numbers, share prices, and per share amounts have
been restated to reflect the 3-for-2 stock split which
occurred on April 12, 1996 and the 2-for-1 stock split which
will be distributed on September 30, 1996 to shareholders of
record on September 16, 1996.
3. Inventories
Inventory costs include materials, labor and factory
overhead. Inventories are stated at the lower of cost or
market, determined on a first-in, first-out basis.
Inventories at July 31, 1996 and April 30, 1996 consisted of
the following (in thousands):
July 31, April 30,
1996 1996
---------- ----------
Chassis $ 5,691 $ 5,699
Raw Materials 9,956 10,028
Work in process 4,668 5,772
Finished goods 7,269 5,589
--------- ---------
$ 27,584 $ 27,088
========= =========
6<PAGE>
4. Net Income Per Common Share
Net income per common share is computed by dividing net income by
the weighted average number of common and common equivalent shares
outstanding.
5. Business Combinations
In July 1996 the Company issued approximately 198,000 shares of its
common stock in exchange for all of the outstanding common stock of
two towing equipment distributors ("Distributors") with historical
revenues of approximately $17 million annually. These transactions
have been accounted for as poolings of interests and, accordingly,
the Company's consolidated financial statements have been restated
to include the accounts and operations of Distributors for the
periods presented herein. Such operations were not significant for
the three month periods ended July 31, 1996 and July 31, 1995.
6. Subsequent Events
Legal Matters
In January 1996, the Company was awarded a judgment in a patent
infringement suit in the United States District Court for the
Northern District of Iowa at Sioux City, Iowa in which the jury
found that the defendant manufacturer and distributor of towing
equipment willfully infringed both the Company's underlift parallel
linkage and L-arm patents and that the common owner of the
manufacturer and distributor induced the infringement. The judgment
was paid to the Company in August 1996 in the amount of
approximately $1.8 million, which included enhanced damages for
willfulness and pre- and post-judgment interest and a broad
permanent injunction against future infringement by the defendants.
Defendants were not granted a license to use the Company's L-arm
technology. With this payment, both the Company and the defendant
withdrew their appeals and the judgment, therefore, became a final
judgment.
Business Combinations
In August and September 1996 the Company issued approximately
178,000 shares of its common stock in exchange for all of the
outstanding common stock of two additional towing equipment
distributors with historical revenues of approximately $23 million
annually. These two acquisitions will be accounted for using the
purchase method of accounting. Additionally, in September 1996 the
Company issued 490,000 shares of its common stock in exchange for
all of the outstanding common stock of Vulcan International, Inc.
("Vulcan"). Vulcan is a manufacturer of towing and recovery
equipment with historical revenues of $22 million annually. The
Company anticipates that this transaction will be accounted for as a
7<PAGE>
pooling of interests. Collectively, these three acquired companies
are referred to as "Newco's". Unaudited preliminary proforma
information is as follows (in thousands, except per share data):
<TABLE>
<CAPTION>
Three Months Ended
July 31,
____________________________
1996 1995
---- ----
<S> <C> <C>
Net Sales:
Company $ 42,606 $ 32,884
Newco's 13,846 10,057
Combined $ 56,452 $ 42,941
Net income:
Company $ 2,470 $ 1,384
Newco's 150 114
Combined $ 2,620 $ 1,498
Net income per share as reported $ 0.10 $ 0.07
Proforma net income per share $ 0.11 $ 0.07
July 31, 1996 April 30, 1996
------------- --------------
Stockholders' equity as reported $ 68,224 $ 65,776
Proforma stockholders' equity $ 70,840 $ 68,115
</TABLE>
The Company's historical financial statements filed for future periods
will not reflect operations prior to the date of acquisition for the two
distributors accorded purchase accounting.
7. Reclassifications
Certain amounts in the prior period financial information have been
reclassified to conform to the current presentation.
8
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and
---------------------------------------------------------------
Results of Operations
---------------------
RECENT DEVELOPMENTS
As more fully discussed in Note 5 to condensed consolidated
financial statements, in July 1996 the Company acquired two
towing equipment distributors. These transactions have been
accounted for as poolings of interests and, accordingly, the
Company's consolidated financial statements have been restated to
include the accounts and operations of Distributors for the
periods presented herein.
As more fully discussed in Note 6 to condensed consolidated
financial statements, subsequent to the end of the first quarter,
in August and September 1996 the Company acquired two additional
towing equipment distributors. Additionally, in September 1996
the Company acquired Vulcan International, Inc., a manufacturer
of towing and recovery equipment. Preliminary proforma
information for these acquired companies is presented in
Note 6 to condensed consolidated financial statements.
All five of these transactions were accomplished using
common stock of the Company.
RESULTS OF OPERATIONS--THREE MONTHS ENDED JULY 31, 1996 COMPARED
TO THREE MONTHS ENDED JULY 31, 1995
Net sales for the three months ended July 31, 1996,
increased 29.6% to $42.6 million from $32.9 million for the
comparable period in 1995. The increase in net sales was
primarily the result of higher unit sales volume in all of the
Company's product lines, an increase in units sold with the truck
chassis included, and sales from the Jige and Boniface operations
acquired in January and April 1996. The growth in unit sales
volume was a result of continued market growth, market share
gains, and the European acquisitions.
Gross profit for the three months ended July 31, 1996,
increased 47.2% to $7.1 million from $4.8 million for the
comparable period in 1995. Gross profit as a percentage of net
sales increased to 16.7% from 14.7%. This increase in gross
profit margin resulted primarily from production efficiencies
associated with the higher sales level, changes in the product
mix, and the positive impact of the price increase implemented in
the third quarter of last year.
Selling expenses for the three months ended July 31, 1996,
increased 48.0% to $2.1 million from $1.4 million for the
comparable period of 1995. The increase in selling expenses was
due primarily to higher commission expenses resulting from
increased sales and from the impact of the European operations.
General and administrative expenses for the three months ended
July 31, 1996 increased 17.6% to $1.3 million from $1.1 million
for 1995. Overall, operating expenses as a percentage of net
sales increased to 7.9% in the 1996 period from 7.6% in the 1995
period.
9
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES
The Company's primary capital requirements are for working
capital, debt service and capital expenditures. The Company has
financed its operations and growth from internally generated
funds and debt financing and, since August 1994, in part from the
proceeds from its initial public offering and its subsequent
public offering completed in January, 1996.
Cash flows used in operating activities were $2.9 million
for the three month period ended July 31, 1996 as compared to
$0.1 million provided by operations for the comparable period of
1995. The decrease in cash flows from operations was primarily
the result of timing of disbursements to trade creditors and
increases in accounts receivable levels resulting from the
continuing growth in sales.
Cash used in investing activities was $0.4 million for the
three month period ended July 31, 1996 compared to $1.0 million
for the comparable period in fiscal 1995. The cash used in
investing activities was primarily for capital expenditures and
equipment purchases in 1996 and 1995.
Cash used in financing activities was $0.2 million for the
three month periods ended July 31, 1996 and 1995. The cash was
used to repay long-term debt and to pay down amounts outstanding
under the two acquired Distributors' lines of credit.
The Company has a $25 million unsecured revolving credit
facility with NationsBank of Tennessee, N.A. (the "Credit
Facility"). Borrowings under the Credit Facility bear interest
at a rate equal to the 30-day LIBOR plus 1.4%. At July 31, 1996,
no amounts were outstanding under the Credit Facility. The
Credit Facility imposes restrictions on the Company with respect
to the maintenance of certain financial ratios and specified
tangible net worth, the sale of assets, mergers, and the payment
of dividends.
The Company has recently expanded its Hermitage,
Pennsylvania facility and is currently expanding its facility in
Ooltewah, Tennessee. Capital expenditures remaining for these
expansions and additional equipment are expected to be
approximately $3.0 million. Excluding the capital commitments
set forth above, the Company has no other pending material
commitments. The Company believes that cash on hand, cash flows
from operations and unused borrowing capacity under the Credit
Facility will be sufficient to fund its operating needs, capital
expenditures and debt service requirements for the next fiscal
year. Management continually evaluates potential strategic
acquisitions. Although the Company believes that its financial
resources will enable it to consider potential acquisitions,
additional debt or equity financing may be necessary. No
assurance in this regard can be given, however, since future cash
flows and the availability of financing will depend on a number
of factors, including prevailing economic conditions and
financial, business and other factors beyond the Company's
control.
10<PAGE>
Part II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits.
Exhibit 27 - Financial Data Schedule (for SEC use only)
(b) Reports on Form 8-K - No reports on Form 8-K were
filed by the Company during the first quarter of the
fiscal year.
11
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, Miller Industries, Inc. has duly
caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
MILLER INDUSTRIES, INC.
By: /s/ J. Vincent Mish
J. Vincent Mish
Vice President and
Chief Financial Officer
(Principal Financial Officer)
Date: September 13, 1996
12
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000924822
<NAME> MILLER INDUSTRIES, INC. /TN
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> APR-30-1996
<PERIOD-START> MAY-01-1996
<PERIOD-END> JUL-31-1996
<CASH> 20,930
<SECURITIES> 0
<RECEIVABLES> 29,595
<ALLOWANCES> 0
<INVENTORY> 27,584
<CURRENT-ASSETS> 80,759
<PP&E> 15,816
<DEPRECIATION> 1,910
<TOTAL-ASSETS> 100,855
<CURRENT-LIABILITIES> 27,980
<BONDS> 3,950
0
0
<COMMON> 117
<OTHER-SE> 68,028
<TOTAL-LIABILITY-AND-EQUITY> 100,855
<SALES> 42,606
<TOTAL-REVENUES> 42,606
<CGS> 35,498
<TOTAL-COSTS> 39,243
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (206)
<INCOME-PRETAX> 3,951
<INCOME-TAX> 1,481
<INCOME-CONTINUING> 2,470
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,470
<EPS-PRIMARY> .10
<EPS-DILUTED> .10
</TABLE>
