SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
þQUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended OctoberJanuary 31, 2011 or
¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________ to ___________2014
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 Incorporation or Organization) | (I.R.S. Employer Identification No.) |
| 16295 N.W. 13th Avenue, Miami, Florida 33169 | ||
| (Address of Principal Executive |
| (305) 621-0501 | ||
| ( |
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 offor such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requiredrequirements for the past 90 days.
Yes¨ Noþ
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer.filer or a “smaller reporting issuer.” See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer¨ Accelerated filer¨ Non-accelerated filer¨
| Large accelerated filer ¨ | Accelerated filer ¨ | Non-accelerated filer ¨ | Smaller reporting companyþ |
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes¨ Noþ
The number of shares outstanding of each of the issuer'sissuer’s classes of common stock, par value $.05 per share, as of OctoberJanuary 31, 20112014 is 5,000,000 shares.
MILLER INDUSTRIES, INC.
FORM 10-Q
OctoberJanuary 31, 20112014
INDEX
| Page No. | ||
| PART I: | FINANCIAL INFORMATION | |
| Item 1. | Financial Statements | |
| Balance Sheets dated as of | 1 | |
| Statement of Operations | 3 | |
| Statement of Operations | 4 | |
| Statement of Cash Flows - | 5 | |
| Notes to Financial Statements | 6 | |
| Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 8 |
| Item 3. | Quantitative and Qualitative Disclosure about Market Risk | 9 |
| Item | 9 | |
| PART II: | OTHER INFORMATION | |
| Items 1 to 6 | 11 | |
| 11 | ||
i
BALANCE SHEET
October
January 31, 2011
2014
(UNAUDITED)
ASSETS
| 2011 | ||||
| Investment Property: | ||||
| Land | $ | 161,443 | ||
| Building and Improvements | 1,049,908 | |||
| Machinery and Equipment | 11,106 | |||
| Furniture and Fixtures | 10,251 | |||
| Total Cost | $ | 1,232,708 | ||
| Less: Accumulated Depreciation | 900,455 | |||
| Net Book Value | $ | 332,253 | ||
| Other Assets: | ||||
| Cash and Cash Equivalents | $ | 1,622,330 | ||
| Accounts Receivable (Less Allowance for | ||||
| Doubtful Accounts of $ 3,892) | 4,978 | |||
| Prepaid Expenses and Other Assets | 27,066 | |||
| Deferred Lease Incentive (Net of Accumulated Amortization - $ 8,997) | 14,084 | |||
| Loan Costs, Less Accumulated | ||||
| Amortization – | ||||
| Loan Costs, Less Accumulated Amortization of $ 1,626 | 9,109 | |||
| Deferred Tax | 53,228 | |||
| Total Other Assets | $ | 1,730,795 | ||
| TOTAL ASSETS | $ | 2,063,048 | ||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||
| Liabilities: | ||||
| Mortgage and Notes Payable | $ | 1,271,529 | ||
| Accounts Payable and Accrued Expenses | 288,445 | |||
| Tenant’s Deposits and Advance Rent | 49,450 | |||
| Total Liabilities | $ | 1,609,424 | ||
| Shareholders’ Equity: | ||||
| Common Stock - $.05 par, 5,000,000 shares | ||||
| Authorized; 5,000,000 shares issued and Outstanding | $ | 250,000 | ||
| Paid-In Capital | 1,212,102 | |||
| Deficit | (1,008,478 | ) | ||
| Total Shareholders’ Equity | $ | 453,624 | ||
| TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $ | 2,063,048 | ||
| ASSETS | ||||
| 2014 | ||||
| Investment Property: | ||||
| Land | $ | 161,443 | ||
| Building and Improvements | 1,049,908 | |||
| Machinery and Equipment | 11,106 | |||
| Furniture and Fixtures | 10,251 | |||
| Total Cost | $ | 1,232,708 | ||
| Less: Accumulated Depreciation | 927,193 | |||
| Net Book Value | $ | 305,515 | ||
| Other Assets: | ||||
| Cash and Cash Equivalents | $ | 1,557,372 | ||
| Accounts Receivable | ||||
| Prepaid Expenses and Other Assets | 27,602 | |||
| Deferred Lease Incentive (Net of Accumulated | ||||
| Amortization - $ 20,450) | 34,587 | |||
| Loan Costs, (Less Accumulated Amortization of $4,473) | 6,262 | |||
| Deferred Tax | 39,993 | |||
| Total Other Assets | $ | 1,665,816 | ||
| TOTAL ASSETS | $ | 1,971,331 | ||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||
| Liabilities: | ||||
| Mortgage and Notes Payable | $ | 1,171,225 | ||
| Accounts Payable and Accrued Expenses | 216,768 | |||
| Tenant’s Deposits and Advance Rent | 63,080 | |||
| Total Liabilities | $ | 1,451,073 | ||
| Shareholders’ Equity: | ||||
| Common Stock - $.05 par, 5,000,000 shares | ||||
| Authorized; 5,000,000 shares issued and | ||||
| Outstanding | $ | 250,000 | ||
| Paid-In Capital | 1,212,102 | |||
| Deficit | (941,844 | ) | ||
| Total Shareholders’ Equity | $ | 520,258 | ||
| TOTAL LIABILITIES AND SHAREHOLDERS’ | ||||
| EQUITY | $ | 1,971,331 | ||
See Accompanying Notes to Financial Statements.
MILLER INDUSTRIES, INC.
BALANCE SHEET
April 30, 20112013
ASSETS
| ASSETS | ||||
| Investment Property: | ||||
| Land | $ | 161,443 | ||
| Building and Improvements | 1,049,908 | |||
| Machinery and Equipment | 11,106 | |||
| Furniture and Fixtures | 10,251 | |||
| Total Cost | $ | 1,232,708 | ||
| Less: Accumulated Depreciation | 918,279 | |||
| Net Book Value | $ | 314,429 | ||
| Other Assets: | ||||
| Cash and Cash Equivalents | $ | 1,606,404 | ||
| Accounts Receivable ( Less Allowance for Doubtful | ||||
| Accounts of $ 0) | 855 | |||
| Prepaid Expenses and Other Assets | 13,005 | |||
| Deferred Lease Incentive (Net of Accumulated | ||||
| Amortization - $ 16,504) | 6,577 | |||
| Loan Costs (Less Accumulated Amortization of | ||||
| $3,668) | 7,067 | |||
| Deferred Tax | 39,993 | |||
| Total Other Assets | $ | 1,673,901 | ||
| TOTAL ASSETS | $ | 1,988,330 | ||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||
| Liabilities: | ||||
| Mortgage and Notes Payable | $ | 1,204,660 | ||
| Accounts Payable and Accrued Expenses | 242,060 | |||
| Tenant’s Deposits and Advance Rent | 24,054 | |||
| Income Taxes payable | 16,072 | |||
| Total Liabilities | $ | 1,486,846 | ||
| Shareholders’ Equity: | ||||
| Common Stock - $.05 par, 5,000,000 shares | ||||
| Authorized; 5,000,000 shares issued and | ||||
| Outstanding | $ | 250,000 | ||
| Paid-In Capital | 1,212,102 | |||
| Deficit | (960,618 | ) | ||
| Total Shareholders’ Equity | $ | 501,484 | ||
| TOTAL LIABILITIES AND SHAREHOLDERS’ | ||||
| EQUITY | $ | 1,988,330 | ||
| 2011 | ||||
| Investment Property: | ||||
| Land | $ | 161,443 | ||
| Building and Improvements | 1,049,908 | |||
| Machinery and Equipment | 11,106 | |||
| Furniture and Fixtures | 10,251 | |||
| Total Cost | $ | 1,232,708 | ||
| Less: Accumulated Depreciation | 892,483 | |||
| Net Book Value | $ | 340,225 | ||
| Other Assets: | ||||
| Cash and Cash Equivalents | $ | 1,594,700 | ||
| Accounts Receivable ( Less Allowance for Doubtful Accounts of $ 4,142) | — | |||
| Prepaid Expenses and Other Assets | 12,748 | |||
| Deferred Lease Incentive (Net of Accumulated Amortization - $ 5,982) | 17,100 | |||
| Loan Costs, Less Accumulated Amortization of $ 1,521 | 9,214 | |||
| Deferred Tax | 69,228 | |||
| Total Other Assets | $ | 1,702,990 | ||
| TOTAL ASSETS | $ | 2,043,215 | ||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||
| Liabilities: | ||||
| Mortgage and Notes Payable | $ | 1,293,819 | ||
| Accounts Payable and Accrued Expenses | 386,476 | |||
| Tenant’s Deposits and Advance Rent | 72,033 | |||
| Total Liabilities | $ | 1,7582,328 | ||
| Shareholders’ Equity: | ||||
| Common Stock - $.05 par, 5,000,000 shares Authorized; 2,982,662 shares issued and Outstanding | $ | 149,133 | ||
| Paid-In Capital | 1,191,929 | |||
| Deficit | (1,050,175 | ) | ||
| Total Shareholders’ Equity | $ | 290,887 | ||
| TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $ | 2,043,215 | ||
See Accompanying Notes to Financial Statements.
STATEMENT OF OPERATIONS
FOR THE THREE MONTHS ENDED OCTOBER 31, 2011 AND 2010
(UNAUDITED)
| 10/31/11 | 10/31/10 | |||||||
| Revenues: | ||||||||
| Rental Income | $ | 98,984 | $ | 96,546 | ||||
| Hardware Sales (Net) | 138 | |||||||
| Other Income | 1,641 | 1,588 | ||||||
| Total Revenues | $ | 100,763 | $ | 98,134 | ||||
| Expenses: | ||||||||
| Rental Expenses (Except Interest) | $ | 55,677 | $ | 37,435 | ||||
| Administrative | 10,855 | 10,855 | ||||||
| Interest | 8,984 | 9,300 | ||||||
| Total Expenses | $ | 74,995 | $ | 57,590 | ||||
| Income Before Tax Provision | $ | 25,768 | $ | 40,544 | ||||
| Provision (Benefit) for Income Tax: | ||||||||
| Federal Income Tax | $ | 5,500 | 11,500 | |||||
| State Income tax | 1,300 | 2,250 | ||||||
| Total Provision for Income Tax | 6,800 | $ | 13,750 | |||||
| Net Income | $ | 18,968 | $ | 26,794 | ||||
| Income per Common Share (Basic) | $ | .01 | $ | .01 | ||||
| Average Shares of Common Stock Outstanding | 5,000,000 | 2,982,662 | ||||||
See Accompanying Notes to Financial Statements
STATEMENT OF OPERATIONS
FOR THE SIXTHREE MONTHS ENDED OCTOBERJANUARY 31, 20112014 AND 20102013
(UNAUDITED)
| 10/31/11 | 10/31/10 | |||||||
| Revenues: | ||||||||
| Rental Income | $ | 197,967 | $ | 193,017 | ||||
| Hardware Sales (Net) | 138 | 134 | ||||||
| Other Income | 3,309 | 3,143 | ||||||
| Total Revenues | $ | 201,414 | $ | 196,294 | ||||
| Expenses: | ||||||||
| Rental Expenses (Except Interest) | $ | 105,008 | $ | 90,252 | ||||
| Administrative | 22,441 | 21,227 | ||||||
| Interest | 16,269 | 16,838 | ||||||
| Total Expenses | $ | 143,718 | $ | 128,317 | ||||
| Income Before Tax Provision | $ | 57,696 | $ | 67,977 | ||||
| Provision (Benefit) for Income Tax: | ||||||||
| Federal Income Tax | $ | 13,000 | $ | 17,500 | ||||
| State Income Tax | 3,000 | 3,700 | ||||||
| Total Provision for Income Tax | $ | 16,000 | $ | 21,200 | ||||
| Net Income | $ | 41,696 | $ | 46,777 | ||||
| Income per Common Share (Basic) | $ | .01 | $ | .02 | ||||
| Average Shares of Common Stock Outstanding | 4,562,910 | 2,982,662 | ||||||
| 1/31/14 | 1/31/13 | |||||||
| Revenues | ||||||||
| Rental Income | $ | 77,626 | $ | 63,254 | ||||
| Hardware Sales (Net) | ||||||||
| Other Income | 1,374 | 1,408 | ||||||
| Total Revenues | $ | 79,000 | $ | 64,662 | ||||
| Expenses: | ||||||||
| Rental Expenses (Except Interest) | $ | 50,644 | $ | 31,868 | ||||
| Administrative | 13,191 | 11,107 | ||||||
| Interest | 8,293 | 8,703 | ||||||
| Total Expenses | $ | 72,128 | $ | 51,678 | ||||
| Income Before Tax Provision | $ | 6,872 | $ | 12,894 | ||||
| Provision (Benefit) for Income Tax: | ||||||||
| Federal Income Tax | $ | 1,000 | $ | 2,500 | ||||
| State Income Tax | 400 | 440 | ||||||
| Total Provision for Income Tax | $ | 1,400 | $ | 2,940 | ||||
| Net Income | $ | 5,472 | $ | 10,044 | ||||
| Income per Common Share (Basic) | $ | .01 | $ | .01 | ||||
| Average Shares of Common Stock Outstanding | 5,000,000 | 5,000,000 | ||||||
See Accompanying Notes to Financial Statements.
STATEMENT OF OPERATIONS
FOR THE NINE MONTHS ENDED JANUARY 31, 2014 AND 2013
(UNAUDITED)
| 1/31/14 | 1/31/13 | |||||||
| Revenues: | ||||||||
| Rental Income | $ | 207,131 | $ | 267,433 | ||||
| Hardware Sales (Net) | ||||||||
| Other Income | 4,154 | 4,230 | ||||||
| Total Revenues | $ | 211,285 | $ | 271,653 | ||||
| Expenses: | ||||||||
| Rental Expenses (Except Interest) | $ | 94,237 | $ | 99,559 | ||||
| Administrative | 70,656 | 58,450 | ||||||
| Interest | 23,517 | 24,316 | ||||||
| Total Expenses | $ | 188,410 | $ | 182,325 | ||||
| Income Before Tax Provision | $ | 22,875 | $ | 89,328 | ||||
| Provision (Benefit) for Income Tax: | ||||||||
| Federal Income Tax | $ | 3,500 | $ | 22,500 | ||||
| State Income Tax | 600 | 4,640 | ||||||
| Total Provision for Income Tax | $ | 4,100 | $ | 27,140 | ||||
| Net Income | $ | 18,775 | $ | 62,188 | ||||
| Income per Common Share (Basic) | $ | .01 | $ | .01 | ||||
| Average Shares of Common Stock Outstanding | 5,000,000 | 5,000,000 | ||||||
See Accompanying Notes to Financial Statements.
STATEMENT OF CASH FLOWS
FOR THE SIXNINE MONTHS ENDED OCTOBERJANUARY 31, 20112014 AND 20102013
(UNAUDITED)
| 10/31/11 | 10/31/10 | |||||||
| Cash Flows from Operating Activities: | ||||||||
| Net Income (Loss) | $ | 41,696 | $ | 46,777 | ||||
| Adjustments to Reconcile Net Income to Net Cash | ||||||||
| Provided by (used for) Operating Activities | ||||||||
| Provision for Bad Debts | (250 | ) | (700 | ) | ||||
| Depreciation | 7,971 | 8,037 | ||||||
| Amortization | 3,121 | 3,372 | ||||||
| Deferred Tax Asset Valuation Adjustment | 16,000 | 21,200 | ||||||
| Changes in Operating Assets and Liabilities | (139,658 | ) | 3,708 | |||||
| Net Cash Provided by Operating Activities | $ | (71,120 | ) | $ | 82,394 | |||
| Cash Flows from Investing Activities: | ||||||||
| Acquisition of Property, Equipment, and Intangible | $ | - | $ | - | ||||
| Net Cash (used by) Investing Activities | $ | - | $ | - | ||||
| Cash Flows from Financing Activities: | ||||||||
| Principal Payments Under Borrowings | $ | (22,290 | ) | $ | (22,290 | ) | ||
| Proceeds from stock option purchase | 121,040 | - | ||||||
| Net Cash Provided by (used by) Financing Activities | $ | 98,750 | $ | (22,290 | ) | |||
| Net Increase in Cash and Cash Equivalents | $ | 27,630 | $ | 60,104 | ||||
| Cash and Cash Equivalents at the Beginning of Year | 1,594,700 | 1,512,525 | ||||||
| Cash and Cash Equivalents at the End of Quarter | $ | 1,622,330 | $ | 1,572,629 | ||||
| Additional Cash Flow Information: | ||||||||
| Cash Payments During the Year | ||||||||
| Interest | $ | 7,285 | $ | 18,576 | ||||
| Income Taxes | $ | - | $ | - | ||||
| 1/31/14 | 1/31/13 | |||||||
| Cash Flows from Operating Activities: | ||||||||
| Net Income | $ | 18,775 | $ | 62,188 | ||||
| Adjustments to Reconcile Net Income to Net Cash | ||||||||
| Provided by (used for) Operating Activities: | ||||||||
| Provision for Bad Debts | ||||||||
| Depreciation | 8,914 | 10,432 | ||||||
| Amortization | 4,751 | 4,751 | ||||||
| Deferred Tax Asset Valuation Adjustment | 7,960 | |||||||
| Changes in Operating Assets and Liabilities | (16,081 | ) | (68,089 | ) | ||||
| Net Cash Provided by Operating Activities | $ | 16,359 | $ | 17,242 | ||||
| Cash Flows from Investing Activities: | ||||||||
| Acquisition of Property, Equipment, and Intangible | $ | (31,956 | ) | $ | ||||
| Net Cash (used by) Investing Activities | $ | (31,956 | ) | $ | ||||
| Cash Flows from Financing Activities: | ||||||||
| Principal Payments Under Borrowings | $ | (33,435 | ) | $ | (33,435 | ) | ||
| Proceeds from Stock option purchase | ||||||||
| Net Cash Provided by (used by) Financing | ||||||||
| Activities | $ | (33,435 | ) | $ | (33,435 | ) | ||
| Net Increase in Cash and Cash | ||||||||
| Equivalents | $ | (49,032 | ) | $ | (16,193 | ) | ||
| Cash and Cash Equivalents at the Beginning of Year | 1,606,404 | 1,609,457 | ||||||
| Cash and Cash Equivalents at the End of Quarter | $ | 1,557,372 | $ | 1,593,264 | ||||
| Additional Cash Flow Information: | ||||||||
| Cash Payments During the Year | ||||||||
| Interest | $ | 23,517 | $ | 25,175 | ||||
| Income Taxes | $ | 26,372 | $ | 6,320 | ||||
See Accompanying Notes to Financial Statements.
NOTES TO FINANCIAL STATEMENTS
OCTOBERJANUARY 31, 20112013
(UNAUDITED)
(UNAUDITED)
NOTE A – Basis of PresentationBASIS OF PRESENTATION
The accompanying unaudited financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the sixnine month period ending OctoberJanuary 31, 20112014 are not necessarily indicative of results that may be expected for the year ended April 30, 2012.2014.
For further information refer to the financial statements and footnotes thereto of the Company as of April 30, 20112013 and for the year ended April 30, 2011.2013.
NOTE B - Earnings Per Share -
Basic earnings per share (“EPS”) is computed by dividing net income available to common stockholders by the weighted-average number of common shares outstanding during the period, excluding the effects of any potentially dilutive securities. Diluted EPS gives effect to all dilutive potential of shares of common stock outstanding during the period including stock options or warrants, using the treasury stock method (by using the average stock price for the period to determine the number of shares assumed to be purchased from the exercise of stock options or warrants). Diluted EPS excludes all dilutive potential of shares of common stock if their effect is anti-dilutive.
NOTE C - Use of Estimates -
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notesnotes. Actual results could differ from those estimates. The most significant estimates included in the preparation of the financial statements are related to income taxes, asset lives, accruals and valuation allowances.
Miller Industries, Inc.
Miller Industries, Inc.
Notes to Financial Statements
NOTE D – Stock Option AgreementCommitments, Contingent Liabilities, Other Matters, and Subsequent Events
On June1. A Company tenant of approximately 20,000 square feet has indicated its intention not to renew its lease expiring September 30, 20052012. Rental income of approximately $13,000 per month ($155,000 per annum) ceased during September 2012.
2. Commencing January 1, 2014, the Company issued stock options to Angelo Napolitano in exchangeleased for the benefits he has provided to the Company through his personal guarantee of the company’s bank loan, and the services rendered by Mr. Napolitano in his capacity as the company’s sole officer and director. The options vest 100% at the grant date and expire in 10three years from the grant date. The company granted options to Mr. Napolitano to purchase up to 2,017,338 shares of the Company’s Common Stock during the term of the Options at a price equal to $ .18approximately 33,700 square feet for approximately $219,000 per share (Exercise Price)year ($18,250 per month).
The average fair values of the options granted during fiscal 2006 were estimated at $.0324, using the Black-Scholes options-pricing model, which included the following assumptions:
Approximately $65,400 was recorded as compensation expense for fiscal 2006 related to this grant.
On February 22, 2010, the Company modified the option previously granted to Angelo Napolitano that entitled him to acquire 2,017,338 shares of the Company’s common stock. Under the terms of the modification, the exercise price for the options were reduced from $0.18 per share to $0.06 per share. The Company reduced the exercise price of the option in consideration of Mr. Napolitano’s guarantee of the Company’s bank loan and his services as the Company’s president. The average fair values of the options modified during fiscal year 2010 were estimated at $.0130 using the Black-Scholes options-pricing model, which included the following assumptions:
The approximate compensation value of the modified option at February 22, 2010 is $26,000 which is less than the $65,000 compensation cost of the original option. Under FASB Statement 123R, the accounting for a modification, total compensation cost for the award should generally not be less than the awards original fair value. Therefore, if fair value of the modified award is less than fair value of the original award on the modification date, the grant date value is not reduced.
A summary of the status of the company’s stock option agreement as of October 31, 2011 and 2010, and changes during the years then ended were as follows:
The options were exercised on June 7, 2011.
| 2011 | 2010 | |||||||||||||||
| Shares Subject to Option | Exercise Price Per Share | Shares Subject to Option | Exercise Price Per Share | |||||||||||||
| Outstanding, May 1 | 2,017,338 | $ | .06 | 2,017,338 | $ | .06 | ||||||||||
| Granted | - | - | - | - | ||||||||||||
| Exercised | 2,017,338 | $ | .06 | - | - | |||||||||||
| Cancelled | - | - | - | - | ||||||||||||
| Outstanding/Exercisable, October 31 | - | - | 2,017,338 | $ | .06 | |||||||||||
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
Results of Operations (Second(Third Quarter of 20122014 Fiscal Year compared to SecondThird Quarter of 20112013 Fiscal Year)
Rental Income. The Company’s results of operations are primarily dependent upon the rental income which it receives from leasing space in its building. Rental income is a function of the percentage of the building which is occupied and the level of rental rates. Rental income duringthrough the secondthird quarter of 20112013 was $98,000,$267,000, compared to $101,000$207,000 in the secondthird quarter of 2012.
Hardware Sales (net). The Company receives revenue from the sale of replacement parts for the sliding glass doors and windows formerly manufactured by the Company. The Company utilizes its existing inventory of these parts to support these sales. Net sales were immaterial in 2011 and 2012.2014.
Other Income. The Company generated other income of less than $2,000 during$4,200 through the secondthird quarter of fiscal year 20112013 and 2012.$4,154 in the third quarter of 2014. Other income in these quarters consisted of interest income and miscellaneous income.
Rental Expense (Excluding Interest). The Company incurs rental expense in connection with the leasing of its building. These expenses consist of management fees, insurance, real estate taxes, depreciation and amortization, maintenance and repairs, utility costs and outside services. Rental expenses were $37,000$100,000 through the secondthird quarter of 20112013 and $56,000$94,000 through the secondthird quarter of 2012.2014.
Administrative Expenses. The Company’s administrative expenses were $11,000$58,000 in the secondfirst three quarters of fiscal years 20112013 and 2012.$70,000 for 2014.
Interest Expense. The Company pays interest on the mortgage loan on its building. Interest expense on the loan was $9,000$24,000 in the second quarterfirst three quarters of fiscal year 2011years 2013 and in 2012.2014.
Provision for Income Taxes. The Company had a tax provision of $14,000$23,000 in the secondfirst three quarter of fiscal 20112013 and $7,000$3,500 in 2012. 2014.
Net Income. As a result of the foregoing factors, The Company had net income of $27,000$62,000 in the secondfirst three quarters of fiscal 20112013 and $19,000$20,000 in second quarterfirst three quarters of 2012.2014.
Results of Operations (First SixNine Months of 20122014 Fiscal Year compared to First SixNine Months of 20112013 Fiscal Year)
Rental Income. The Company’s results of operations are primarily dependent upon the rental income which it receives from leasing space in its building. Rental income is a function of the percentage of the building which is occupied and the level of rental rates. Rental income duringthrough the first six monthsthird quarter of 20112013 was $193,000,$267,000, compared to $198,000$207,000 in the first six monthsthird quarter of 2012.
Hardware Sales (net). The Company receives revenue from the sale of replacement parts for the sliding glass doors and windows formerly manufactured by the Company. The Company utilizes its existing inventory of these parts to support these sales. Net sales were immaterial in 2011 and 2012.2014.
Other Income. The Company generated other income of $3,000$4,200 through the first six monthsthird quarter of fiscal year 20112013 and 2012.$4,154 in the third quarter of 2014. Other income in these quarters consisted of interest income and miscellaneous income.
Rental Expense (Excluding Interest). The Company incurs rental expense in connection with the leasing of its building. These expenses consist of management fees, insurance, real estate taxes, depreciation and amortization, maintenance and repairs, utility costs and outside services. Rental expenses were $90,000$100,000 through the first six monthsthird quarter of 20112013 and $105,000$94,000 through first six monthsthe third quarter of 2012.2014.
Administrative Expenses. The Company’s administrative expenses were $22,000$58,000 in the first six monthsthree quarters of fiscal years 20112013 and 2012.$70,000 for 2014.
Interest Expense. The Company pays interest on the mortgage loan on its building. Interest expense on the loan was $17,000$24,000 in the first six monthsthree quarters of fiscal year 2011years 2013 and $16,000 in 2012.2014.
Provision for Income Taxes. The Company had a tax provision of $21,000$23,000 in the first six monthsthree quarter of fiscal 20112013 and $16,000$3,500 in 2012. 2014.
Net Income. As a result of the foregoing factors, theThe Company had net income of $47,000$62,000 in the first six monthsthree quarters of fiscal 20112013 and $42,000$20,000 in first six monthsthree quarters of 2012.2014.
Liquidity and Capital Resources
The Company’s cash increaseddecreased by $60,000$16,000 during the first sixnine months of fiscal year 20112013 compared to an increasea decrease of $28,000$49,000 during the first sixnine months of fiscal year 2012. During the first six months of fiscal year 2012, the Company received a cash infusion of $121,000 from the exercise of stock options.2014. The Company usedinvested $31,956 in tenant improvements during the proceeds to reduce the Company’s accounts payables.third quarter of 2014. As of JulyJanuary 31, 2011,2014, The Company’s cash position was approximately $1,622,000.$1,557,000.
Current Operations
The Company 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’s principal operating expenses consist of management and professional fees associated with the administration of the Company, interest expense on the Company’s mortgage loan, real estate taxes and insurance.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
We are a smaller reporting issuer as defined in Item 10 of Regulation S-K and are not required to report the quantitative and qualitative measures of market risk specified in Item 305 of Regulation S-K.
ITEM 4. CONTROLS AND PROCEDURES
In connection with the filing of this Form 10-Q, the Company’s Chief Executive Officer and Chief Financial Officer evaluated the effectiveness of the Company’s disclosure controls and procedures as of OctoberJanuary 31, 2011.2014. The Company’s Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures were effective as of OctoberJanuary 31, 2011.2014.
There were no changes in the Company’s internal controls over financial reporting that materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting during the fiscal quarter ended OctoberJanuary 31, 2011.
ITEM 5. OTHER MATTERS AND SUBSEQUENT EVENTS
1. The State of California State Controller filed a complaint against the Company in the Superior Court of California. In the Complaint, the State asserts that the Company had failed to report the alleged abandonment of certain shares of the Company’s common stock in a timely manner and, as a result, the Company was obligated to pay the State the amount of $102,230. The State and the Company have entered into a Tolling Agreement in order to allow the Company to investigate this matter. The investigation is on-going. The Company is currently unable to assess whether the claim has any validity.
2012.
PART II. OTHER INFORMATION
| ITEM 6. | EXHIBITS AND REPORTS ON FORM 8-K |
| (a) | Exhibits |
| Exhibit | Description | |
| (31.1) | Certification of Chief Executive Officer pursuant to Rule 13a-14(a). | |
| (31.2) | Certification of Chief Financial Officer pursuant to Rule 13a-14(a). | |
| (32.1) | Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of |
| (b) | Reports on Form 8-K. |
Not applicable.
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) | ||||
| Dated: | May 26, 2015 | By: | /s/ Angelo Napolitano | |
Angelo Napolitano Chairman of the Board of Directors Chief Executive Officer Principal Financial Officer | ||||