SECURITIES AND EXCHANGE COMMISSION
Washington, DC 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, 2017
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.) |
(Address of Principal Executive Offices |
(305) 621-0501 | ||||
(Registrant’s telephone number, including area code | ||||
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☐¨ No☒þ
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer¨Accelerated filer¨ Non-accelerated filer¨Smaller reporting companyþEmerging growth company¨
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.¨
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
Yes☐¨ No☒þ
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated 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.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes☐¨ No☒þ
The number of shares outstanding of each of the issuer’s classes of common stock, par value $.05 per share, as of OctoberJuly 31, 20162017 is 5,000,000 shares.
MILLER INDUSTRIES, INC.
FORM 10-Q
OctoberJuly 31, 20162017
INDEX
- i - |
BALANCE SHEET
July 31, 2017
(UNAUDITED)
July 31, 2017 | ||||
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 | 968,790 | |||
Net Book Value | $ | 263,918 | ||
Other Assets: | ||||
Cash and Cash Equivalents | $ | 2,030,699 | ||
Accounts Receivable | 1,027 | |||
Prepaid Expenses and Other Assets | 13,415 | |||
Loan Costs, Less Accumulated Amortization of $8,230 | 2,505 | |||
Deferred Tax | 38,334 | |||
Total Other Assets | $ | 2,085,980 | ||
TOTAL ASSETS | $ | 2,349,898 | ||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||
Liabilities: | ||||
Mortgage and Notes Payable | $ | 1,015,195 | ||
Accounts Payable and Accrued Expenses | 170,368 | |||
Income Taxes Payable | 13,907 | |||
Tenant’s Deposits and Advance Rent | 108,710 | |||
Total Liabilities | $ | 1,308,180 | ||
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 | (420,384 | ) | ||
Total Shareholders’ Equity | $ | 1,041,718 | ||
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $ | 2,349,898 |
See Accompanying Notes to Financial Statements.
1 |
October 31, 2016
BALANCE SHEET
April 30, 2017
ASSETS
April 30, 2017 | ||||
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 | 965,819 | |||
Net Book Value | $ | 266,889 | ||
Other Assets: | ||||
Cash and Cash Equivalents | $ | 2,007,930 | ||
Accounts Receivable | 1,034 | |||
Prepaid Expenses and Other Assets | 18,287 | |||
Prepaid Income Taxes | 16,343 | |||
Loan Costs, Less Accumulated Amortization of $7,962 | 2,773 | |||
Deferred Tax | 39,804 | |||
Total Other Assets | $ | 2,085,451 | ||
TOTAL ASSETS | $ | 2,352,340 | ||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||
Liabilities: | ||||
Mortgage and Notes Payable | $ | 1,026,340 | ||
Accounts Payable and Accrued Expenses | 160,071 | |||
Tenant’s Deposits and Advance Rent | 182,221 | |||
Total Liabilities | $ | 1,368,632 | ||
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 | (478,394 | ) | ||
Total Shareholders’ Equity | $ | 983,708 | ||
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $ | 2,352,340 |
2016 | ||||
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 | 959,877 | |||
Net Book Value | $ | 272,831 | ||
Other Assets: | ||||
Cash and Cash Equivalents | $ | 1,918,225 | ||
Accounts Receivable | ||||
Prepaid Expenses and Other Assets | 34,333 | |||
Deferred Lease Incentive (Net of Accumulated | ||||
Amortization - $ 53,436.69) | 1,785 | |||
Deferred Tax | 40,416 | |||
Total Other Assets | $ | 1,994,759 | ||
TOTAL ASSETS | $ | 2,267,590 | ||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||
Liabilities: | ||||
Mortgage and Notes Payable | $ | 1,045,320 | ||
Accounts Payable and Accrued Expenses | 202,824 | |||
Income Tax Payable | 10,810 | |||
Tenant’s Deposits and Advance Rent | 80,387 | |||
Total Liabilities | $ | 1,339,341 | ||
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 | (533,853 | ) | ||
Total Shareholders’ Equity | $ | 928,249 | ||
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $ | 2,267,590 |
See Accompanying Notes to Financial Statements.
2 |
STATEMENT OF OPERATIONS
FOR THE THREE MONTHS ENDED JULY 31, 2017 AND 2016
(UNAUDITED)
Balance SheetApril 30, 2016
ASSETS
2016 | ||||
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 | 953,934 | |||
Net Book Value | $ | 278,774 | ||
Other Assets: | ||||
Cash and Cash Equivalents | $ | 1,817,572 | ||
Accounts Receivable | 1,049 | |||
Prepaid Expenses and Other Assets | 32,590 | |||
Prepaid Income Tax | 4,213 | |||
Deferred Lease Incentive (Net of Accumulated Amortization - $ 48,080) | 7,142 | |||
Deferred Tax | 40,416 | |||
Total Other Assets | $ | 1,902,982 | ||
TOTAL ASSETS | $ | 2,181,756 | ||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||
Liabilities: | ||||
Mortgage and Notes Payable | $ | 1,067,074 | ||
Accounts Payable and Accrued Expenses | 198,464 | |||
Income Tax Payable | ||||
Tenant’s Deposits and Advance Rent | 76,267 | |||
Total Liabilities | $ | 1,341,805 | ||
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 | (622,151 | ) | ||
Total Shareholders’ Equity | $ | 839,951 | ||
TOTAL LIABILITIES AND SHAREHOLDERS’EQUITY | $ | 2,181,756 |
7/31/17 | 7/31/16 | |||||||
Revenues: | ||||||||
Rental Income | $ | 157,472 | $ | 149,516 | ||||
Utilities reimbursement | 19,970 | 22,752 | ||||||
Other Income | 1,667 | 1,480 | ||||||
Total Revenues | $ | 179,109 | $ | 173,748 | ||||
Expenses: | ||||||||
Rental Expenses (Except Interest) | $ | 72,279 | $ | 88,333 | ||||
Administrative | 11,338 | 12,239 | ||||||
Interest | 6,482 | 6,212 | ||||||
Total Expenses | $ | 90,099 | $ | 106,784 | ||||
Income (Loss) Before Tax Provision | $ | 89,010 | $ | 66,964 | ||||
Provision (Credit) for Income Tax: | ||||||||
Federal Income Tax | $ | 27,000 | $ | 22,000 | ||||
State Income Tax | 4,000 | 3,300 | ||||||
Total Provision for Income Tax | $ | 31,000 | $ | 25,300 | ||||
Net Income (Loss) | $ | 58,010 | $ | 41,664 | ||||
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.
3 |
STATEMENT OF CASH FLOWS
FOR THE THREE MONTHS ENDED JULY 31, 2017 AND 2016
(UNAUDITED)
7/31/17 | 7/31/16 | |||||||
Cash Flows from Operating Activities: | ||||||||
Net Income (Loss) | $ | 58,010 | $ | 41,664 | ||||
Adjustments to Reconcile Net Income to Net Cash | 19,970 | 22,752 | ||||||
Provided by (used for) Operating Activities: | ||||||||
Depreciation | 2,971 | 2,971 | ||||||
Amortization | 2,679 | |||||||
Changes in Operating Assets and Liabilities | (27,068 | ) | 69,475 | |||||
Net Cash Provided by Operating Activities | $ | 33,913 | 116,789 | |||||
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 | $ | (11,145 | ) | $ | (11,145 | ) | ||
Proceeds from Stock option purchase | — | |||||||
Net Cash Provided by (used by) Financing Activities | $ | (11,145 | ) | $ | (11,145 | ) | ||
Net Increase in Cash and Cash Equivalents | $ | 22,768 | $ | 105,644 | ||||
Cash and Cash Equivalents at the Beginning of Year | 2,007,930 | 1,817,572 | ||||||
Cash and Cash Equivalents at the End of Quarter | $ | 2,030,698 | $ | 1,923,216 | ||||
Additional Cash Flow Information: | ||||||||
Cash Payments During the Year | ||||||||
Interest | $ | 7,753 | $ | 7,417 | ||||
Income Taxes | $ | $ | - |
For the Three Months Ended October 31, 2016 and 2015
10/31/16 | 10/31/15 | |||||||
Revenues: | ||||||||
Rental Income | $ | 153,990 | $ | 148,344 | ||||
Utilities Reimbursement | 27,230 | 25,125 | ||||||
Other Income | 1,682 | 1,502 | ||||||
Total Revenues | $ | 182,902 | $ | 174,971 | ||||
Expenses: | ||||||||
Rental Expenses (Except Interest) | $ | 85,515 | $ | 86,511 | ||||
Administrative | 11,363 | 15,602 | ||||||
Interest | 7,691 | 7,871 | ||||||
Total Expenses | $ | 104,569 | $ | 109,984 | ||||
Income Before Tax Provision | $ | 78,333 | $ | 64,987 | ||||
Provision for Income Tax: | ||||||||
Federal Income Tax | $ | 28,000 | $ | 20,000 | ||||
State Income Tax | 3,700 | 3,000 | ||||||
Total Provision for Income Tax | $ | 31,700 | $ | 23,000 | ||||
Net Income | $ | 46,633 | $ | 41,987 | ||||
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.
4 |
For the Six Months Ended October 31, 2016 and 2015
10/31/16 | 10/31/15 | |||||||
Revenues: | ||||||||
Rental Income | $ | 303,770 | $ | 297,130 | ||||
Utilities Reimbursement | 49,629 | 49,906 | ||||||
Other Income | 3,252 | 2,951 | ||||||
Total Revenues | $ | 356,651 | $ | 349,987 | ||||
Expenses: | ||||||||
Rental Expenses (Except Interest) | $ | 173,796 | $ | 176,905 | ||||
Administrative | 23,652 | 26,751 | ||||||
Interest | 13,904 | 14,065 | ||||||
Total Expenses | $ | 211,352 | $ | 217,721 | ||||
Income Before Tax Provision | $ | 145,299 | $ | 132,266 | ||||
Provision for Income Tax: | ||||||||
Federal Income Tax | $ | 50,000 | $ | 41,000 | ||||
State Income Tax | 7,000 | 6,000 | ||||||
Total Provision for Income Tax | $ | 57,000 | $ | 47,000 | ||||
Net Income | $ | 88,299 | $ | 85,266 | ||||
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.
MILLER INDUSTRIES, INC.
For the Six Months Ended October 31, 2016 and 2015
10/31/16 | 10/31/15 | |||||||
Cash Flows from Operating Activities: | ||||||||
Net Income | $ | 88,299 | $ | 85,266 | ||||
Adjustments to Reconcile Net Income to Net Cash | ||||||||
Provided by (used for) Operating Activities: | ||||||||
Provision for Bad Debts | ||||||||
Depreciation | 5,943 | 5,943 | ||||||
Amortization | 5,357 | 6,551 | ||||||
Deferred Tax Asset Valuation Adjustment | ||||||||
Changes in Operating Assets and Liabilities | 23,344 | 53,840 | ||||||
Net Cash Provided by Operating Activities | $ | 122,943 | $ | 151,600 | ||||
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 | ) | ||
Net Cash Provided by (used by) Financing | ||||||||
Activities | $ | (22,290 | ) | $ | (22,290 | ) | ||
Net Increase in Cash and Cash | ||||||||
Equivalents | $ | 100,653 | $ | 129,310 | ||||
Cash and Cash Equivalents at the Beginning of Year | 1,817,572 | 1,665,062 | ||||||
Cash and Cash Equivalents at the End of Quarter | $ | 1,918,225 | $ | 1,794,372 | ||||
Additional Cash Flow Information: | ||||||||
Cash Payments During the Year | ||||||||
Interest | $ | 14,839 | $ | 15,618 | ||||
Income Taxes | $ | 41,977 | $ | 63,458 |
See Accompanying Notes to Financial Statements.
MILLER INDUSTRIES, INC.
JULY 31, 2017
OCTOBER 31, 2016(UNAUDITED)
Note A – Basis 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 sixthree month period ending OctoberJuly 31, 20162017 are not necessarily indicative of results that may be expected for the year ended April 30, 2017.2018.
For further information refer to the financial statements and footnotes thereto of the Company as of April 30, 20162017 and for the year ended April 30, 2016.2017.
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.
NoteNOTE C - Use ofOf 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 notes. 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.
NoteNOTE D – Commitments, Contingent Liabilities, Other Matters and Subsequent Events
1. On June 1, 2016, the Company entered into a month to month lease agreement for approximately 5,500 square feet at a monthly rental of $3,800.
2. In April 2015, the FASB issued ASU No. 2015-03, simplifying the presentation of debt issuance costs. ASU 2015-03 is effective for fiscal years beginning after December 15, 2015. Debt issuance costs will be required to be classified as a direct reduction of the debt balances. Amortization of Debt Issuance Costs using the effective interest method with any amortization recorded as part of interest expense. We have adopted the ASU for fiscal years and interim periods beginning May 1, 2016.
3. A tenant has advised they will not be renewing their lease which will expire on December 31, 2016. Approximate annual rental income of this tenant is $225,000, which will cease on December 31, 2016.None.
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Results of Operations (Second(First Quarter of 20172018 Fiscal Year compared to SecondFirst Quarter of 2016 Fiscal Year and Six Months of 2017 Fiscal Year compared to Six Months of 2016 Fiscal Year)
Rental Income. The Company’s results of operations are primarily dependent upon the rental income and expense reimbursement 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 and expense reimbursement during the second quarter of fiscal 2016 was $173,000, compared to $187,000 in the second quarter of fiscal 2017. Rental income and expense reimbursement during the first two quartersquarter of fiscal 20162017 was $347,000,$150,000, compared to $353,000 during$157,000 in the first two quartersquarter of fiscal 2017.2018.
Other Income. The Company generated other income of $1,500 in the secondfirst quarter of 2016fiscal year 2017 and $1,700 in 2017. The Company generated $3,000 in the first two quarters of fiscal year 2016 and $3,200 in the first two quarters of fiscal year 2017.2018. Income in these quarters consisted of interest income and miscellaneous income.
Rental Expense (Excluding Interest). The Company incurs rental expense in connection with theleasing 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 $87,000 in the second quarter of 2016 and $86,000 in the second quarter of 2017. Rental expenses were $177,000$88,000 in the first two quartersquarter of 20162017 and $174,000$72,000 in the first two quartersquarter of 2017.2018.
Administrative Expenses. The Company’s administrative expenses were $16,000$12,000 in the secondfirst quarter of 2016fiscal year 2017 and $11,000 in 2017 and $27,000 in the first two quartersquarter of fiscal years 2016 and $24,000 in 2017.year 2018.
Interest Expense. The Company pays interest on the mortgage loan on its building. Interest expense on the loan was $8,000$6,200 in the secondfirst quarter of fiscal year 2016 and 2017 and $15,000$6,500 in the first two quarters of fiscal year 2016 and 2017.2018.
Provision for Income Taxes. The Company had a tax provision of $23,000 for25,300 in the secondfirst quarter of fiscal year 2016 and $32,000 for the second quarters of fiscal year 2017 and $47,000$31,000 in the first two quartersquarter of 2016 and $57,000 in 2017.2018.
Net IncomeIncome.. As a result of the foregoing factors, the Company had net income of $42,000 in the secondfirst quarter of 2016fiscal 2017 and $47,000net income of $58,000 in the secondfirst quarter of 2017 and $85,000 in the first two quarters of 2016 and $89,000 in first two quarters of 2017.2018.
Liquidity and Capital Resources
The Company’s cash increased by $130,000$106,000 during the first sixthree months of fiscal year 2016 compared to an increase of $100,0002018 and $23,000 during the first sixthree months of fiscal year 2017. As of October 31, 2016,The increase in the 2018 fiscal year was due to an increase in tenant deposits and advance rent. The Company’s cash position was approximately $1,918,000.$2,030,000.
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.
6 |
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 PrincipalChief Executive Officer and PrincipalChief Financial Officer evaluated the effectiveness of the Company’s disclosure controls and procedures as of OctoberJuly 31, 2016.2017. The Company’s PrincipalChief Executive Officer and PrincipalChief Financial Officer concluded that the Company’s disclosure controls and procedures were effective as of OctoberJuly 31, 2016.2017.
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 OctoberJuly 31, 2016.2017.
ITEM 6. | EXHIBITS AND REPORTS ON FORM 8-K |
(a) | Exhibits |
(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: | By: | /s/ Marc Napolitano | ||
Marc Napolitano | ||||
| Chief Executive Officer | |||
Principal Financial Officer |