Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2022 | Oct. 31, 2022 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2022 | |
Document Transition Report | false | |
Entity Registrant Name | MILLER INDUSTRIES, INC. | |
Entity File Number | 001-14124 | |
Entity Incorporation, State or Country Code | TN | |
Entity Tax Identification Number | 62-1566286 | |
Entity Address, Address Line One | 8503 Hilltop Drive | |
Entity Address, City or Town | Ooltewah | |
Entity Address, State or Province | TN | |
Entity Address, Postal Zip Code | 37363 | |
City Area Code | 423 | |
Local Phone Number | 238-4171 | |
Title of 12(b) Security | Common Stock, par value $0.01 per share | |
Trading Symbol | MLR | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock Shares Outstanding | 11,416,716 | |
Entity Central Index Key | 0000924822 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
CURRENT ASSETS: | ||
Cash and temporary investments | $ 33,208 | $ 54,332 |
Accounts receivable, net of allowance for credit losses of $1,268 and $1,155 at September 30, 2022 and December 31, 2021, respectively | 167,887 | 153,977 |
Inventories, net | 144,382 | 114,908 |
Prepaid expenses | 6,053 | 5,751 |
Total current assets | 351,530 | 328,968 |
NONCURRENT ASSETS: | ||
Property, plant and equipment, net | 112,545 | 96,496 |
Right-of-use assets - operating leases | 944 | 1,231 |
Goodwill | 11,619 | 11,619 |
Other assets | 626 | 533 |
TOTAL ASSETS | 477,264 | 438,847 |
CURRENT LIABILITIES: | ||
Accounts payable | 107,477 | 119,029 |
Accrued liabilities | 30,124 | 24,866 |
Current portion of operating lease obligation | 316 | 361 |
Current portion of finance lease obligation | 15 | |
Total current liabilities | 137,917 | 144,271 |
NONCURRENT LIABILITIES: | ||
Long-term obligations | 45,000 | |
Noncurrent portion of operating lease obligation | 628 | 870 |
Deferred income tax liabilities | 5,195 | 5,170 |
Total liabilities | 188,740 | 150,311 |
COMMITMENTS AND CONTINGENCIES (Note 7) | ||
SHAREHOLDERS' EQUITY: | ||
Preferred stock, $0.01 par value; 5,000,000 shares authorized, none issued or outstanding | ||
Common stock, $0.01 par value; 100,000,000 shares authorized, 11,416,716 and 11,410,728 outstanding at September 30, 2022 and December 31, 2021, respectively | 114 | 114 |
Additional paid-in capital | 152,169 | 151,449 |
Accumulated surplus | 146,807 | 141,918 |
Accumulated other comprehensive loss | (10,566) | (4,945) |
Total shareholders' equity | 288,524 | 288,536 |
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ 477,264 | $ 438,847 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parentheticals) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
CONDENSED CONSOLIDATED BALANCE SHEETS | ||
Allowance for doubtful accounts (in dollars) | $ 1,268 | $ 1,155 |
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares outstanding | 11,416,716 | 11,410,728 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF INCOME - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
CONDENSED CONSOLIDATED STATEMENTS OF INCOME | ||||
NET SALES | $ 205,557 | $ 164,715 | $ 622,602 | $ 515,785 |
COSTS OF OPERATIONS | 182,377 | 146,883 | 565,708 | 461,532 |
GROSS PROFIT | 23,180 | 17,832 | 56,894 | 54,253 |
OPERATING EXPENSES: | ||||
Selling, general and administrative expenses | 14,673 | 11,983 | 39,710 | 35,053 |
NON-OPERATING (INCOME) EXPENSES: | ||||
Interest expense, net | 1,042 | 286 | 2,088 | 901 |
Other (income) expense, net | 666 | 206 | 993 | 434 |
Total expense, net | 16,381 | 12,475 | 42,791 | 36,388 |
INCOME BEFORE INCOME TAXES | 6,799 | 5,357 | 14,103 | 17,865 |
INCOME TAX PROVISION | 1,567 | 1,511 | 3,049 | 4,325 |
NET INCOME | $ 5,232 | $ 3,846 | $ 11,054 | $ 13,540 |
BASIC INCOME PER COMMON SHARE (in dollars per share) | $ 0.46 | $ 0.34 | $ 0.97 | $ 1.19 |
DILUTED INCOME PER COMMON SHARE (in dollars per share) | 0.46 | 0.34 | 0.97 | 1.19 |
CASH DIVIDENDS DECLARED PER COMMON SHARE (in dollars per share) | $ 0.18 | $ 0.18 | $ 0.54 | $ 0.54 |
WEIGHTED AVERAGE SHARES OUTSTANDING: | ||||
Basic (in shares) | 11,417 | 11,411 | 11,417 | 11,411 |
Diluted (in shares) | 11,417 | 11,411 | 11,418 | 11,411 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | ||||
NET INCOME | $ 5,232 | $ 3,846 | $ 11,054 | $ 13,540 |
OTHER COMPREHENSIVE INCOME (LOSS): | ||||
Foreign currency translation adjustment | (3,341) | (1,501) | (5,621) | (162) |
Total other comprehensive income (loss) | (3,341) | (1,501) | (5,621) | (162) |
COMPREHENSIVE INCOME | $ 1,891 | $ 2,345 | $ 5,433 | $ 13,378 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS EQUITY - USD ($) $ in Thousands | Common Stock | Additional Paid-In Capital | Accumulated Surplus | Accumulated Other Comprehensive Income (Loss) | Total |
BALANCE at Dec. 31, 2020 | $ 114 | $ 151,249 | $ 133,879 | $ (2,789) | $ 282,453 |
Components of comprehensive income: | |||||
Net income | 3,178 | 3,178 | |||
Foreign currency translation adjustment | 760 | 760 | |||
COMPREHENSIVE INCOME | 3,178 | 760 | 3,938 | ||
Issuance of common stock to non-employee directors | 200 | 200 | |||
Dividends paid | (2,054) | (2,054) | |||
BALANCE at Mar. 31, 2021 | 114 | 151,449 | 135,003 | (2,029) | 284,537 |
BALANCE at Dec. 31, 2020 | 114 | 151,249 | 133,879 | (2,789) | 282,453 |
Components of comprehensive income: | |||||
Net income | 13,540 | ||||
Foreign currency translation adjustment | (162) | ||||
COMPREHENSIVE INCOME | 13,378 | ||||
BALANCE at Sep. 30, 2021 | 114 | 151,449 | 141,257 | (2,951) | 289,869 |
BALANCE at Mar. 31, 2021 | 114 | 151,449 | 135,003 | (2,029) | 284,537 |
Components of comprehensive income: | |||||
Net income | 6,516 | 6,516 | |||
Foreign currency translation adjustment | 579 | 579 | |||
COMPREHENSIVE INCOME | 6,516 | 579 | 7,095 | ||
Dividends paid | (2,054) | (2,054) | |||
BALANCE at Jun. 30, 2021 | 114 | 151,449 | 139,465 | (1,450) | 289,578 |
Components of comprehensive income: | |||||
Net income | 3,846 | 3,846 | |||
Foreign currency translation adjustment | (1,501) | (1,501) | |||
COMPREHENSIVE INCOME | 3,846 | (1,501) | 2,345 | ||
Dividends paid | (2,054) | (2,054) | |||
BALANCE at Sep. 30, 2021 | 114 | 151,449 | 141,257 | (2,951) | 289,869 |
BALANCE at Dec. 31, 2021 | 114 | 151,449 | 141,918 | (4,945) | 288,536 |
Components of comprehensive income: | |||||
Net income | 2,065 | 2,065 | |||
Foreign currency translation adjustment | 25 | 25 | |||
COMPREHENSIVE INCOME | 2,065 | 25 | 2,090 | ||
Issuance of common stock to non-employee directors | 200 | 200 | |||
Stock-based compensation on nonvested restricted stock units | 75 | 75 | |||
Dividends paid | (2,055) | (2,055) | |||
BALANCE at Mar. 31, 2022 | 114 | 151,724 | 141,928 | (4,920) | 288,846 |
BALANCE at Dec. 31, 2021 | 114 | 151,449 | 141,918 | (4,945) | 288,536 |
Components of comprehensive income: | |||||
Net income | 11,054 | ||||
Foreign currency translation adjustment | (5,621) | ||||
COMPREHENSIVE INCOME | 5,433 | ||||
BALANCE at Sep. 30, 2022 | 114 | 152,169 | 146,807 | (10,566) | 288,524 |
BALANCE at Mar. 31, 2022 | 114 | 151,724 | 141,928 | (4,920) | 288,846 |
Components of comprehensive income: | |||||
Net income | 3,757 | 3,757 | |||
Foreign currency translation adjustment | (2,305) | (2,305) | |||
COMPREHENSIVE INCOME | 3,757 | (2,305) | 1,452 | ||
Stock-based compensation on nonvested restricted stock units | 222 | 222 | |||
Dividends paid | (2,054) | (2,054) | |||
BALANCE at Jun. 30, 2022 | 114 | 151,946 | 143,631 | (7,225) | 288,466 |
Components of comprehensive income: | |||||
Net income | 5,232 | 5,232 | |||
Foreign currency translation adjustment | (3,341) | (3,341) | |||
COMPREHENSIVE INCOME | 5,232 | (3,341) | 1,891 | ||
Stock-based compensation on nonvested restricted stock units | 223 | 223 | |||
Dividends paid | (2,056) | (2,056) | |||
BALANCE at Sep. 30, 2022 | $ 114 | $ 152,169 | $ 146,807 | $ (10,566) | $ 288,524 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS EQUITY (Parentheticals) - $ / shares | 3 Months Ended | |||||
Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | |
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY | ||||||
Issuance of common stock to non-employee directors (in shares) | 5,988 | 5,260 | ||||
Dividends paid (in dollars per share) | $ 0.18 | $ 0.18 | $ 0.18 | $ 0.18 | $ 0.18 | $ 0.18 |
CONDENSED CONSOLIDATED STATEM_5
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
OPERATING ACTIVITIES: | ||
Net income | $ 11,054 | $ 13,540 |
Adjustments to reconcile net income to net cash flows from operating activities: | ||
Depreciation and amortization | 8,628 | 8,124 |
(Gain) Loss on disposal of property, plant and equipment | (52) | 7 |
Provision for credit losses | 126 | 118 |
Issuance of non-employee director shares | 200 | 200 |
Stock-based compensation on nonvested restricted stock units | 520 | |
Deferred tax provision | 19 | 9 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (15,147) | 10,312 |
Inventories | (32,625) | (24,990) |
Prepaid expenses | (359) | (3,209) |
Other assets | 51 | 190 |
Accounts payable | (10,190) | 2,204 |
Accrued liabilities | 6,173 | 531 |
Net cash flows from operating activities | (31,602) | 7,036 |
INVESTING ACTIVITIES: | ||
Purchases of property, plant and equipment | (25,127) | (7,857) |
Proceeds from sale of property, plant and equipment | 8 | 6 |
Net cash flows from investing activities | (25,119) | (7,851) |
FINANCING ACTIVITIES: | ||
Net borrowings under credit facility | 45,000 | |
Payments of cash dividends | (6,165) | (6,162) |
Finance lease obligation payments | (15) | (16) |
Net cash flows from financing activities | 38,820 | (6,178) |
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND TEMPORARY INVESTMENTS | (3,223) | (121) |
NET CHANGE IN CASH AND TEMPORARY INVESTMENTS | (21,124) | (7,114) |
CASH AND TEMPORARY INVESTMENTS, beginning of period | 54,332 | 57,521 |
CASH AND TEMPORARY INVESTMENTS, end of period | 33,208 | 50,407 |
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | ||
Cash payments for interest | 1,902 | 1,104 |
Cash payments for income taxes, net of refunds | $ 1,277 | $ 5,153 |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 9 Months Ended |
Sep. 30, 2022 | |
BASIS OF PRESENTATION | |
BASIS OF PRESENTATION | 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 (the “SEC”). Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) 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 December 31, 2021. The condensed consolidated financial statements include accounts of certain subsidiaries whose fiscal closing dates differ from December 31 st |
RECENT ACCOUNTING PRONOUNCEMENT
RECENT ACCOUNTING PRONOUNCEMENTS | 9 Months Ended |
Sep. 30, 2022 | |
RECENT ACCOUNTING PRONOUNCEMENTS | |
RECENT ACCOUNTING PRONOUNCEMENTS | 2. RECENT ACCOUNTING PRONOUNCEMENTS Recently Issued Standards In October 2021, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2021-08, Business Combinations (Topic 805). The update provides guidance on how to measure and recognize contract assets and contract liabilities when purchased as part of a business combination. According to the guidance, the acquirer must follow ASC Topic 606 in accounting for the contract asset or contract liability being purchased. The amendments in the update will be effective for financial statements beginning after December 15, 2022, including interim periods within those fiscal years. The Company will apply the amendments prospectively. The adoption of this update will not have a material impact on the Company’s consolidated financial statements and related disclosures. In March 2022, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2022-02, Financial Instruments – Credit Losses (Topic 326). The update will require entities with financing receivables to disclose gross write-offs by year of origination of the receivable. The amendments in the update will be effective for financial statements beginning after December 15, 2022, including interim periods within those fiscal years, and will be applied prospectively. The adoption of this update will not have a material impact on the Company’s consolidated financial statements and related disclosures. Recently Adopted Standards During the first quarter of 2022, the Company adopted ASU 2021-10, Government Assistance (Topic 832), which requires certain disclosures about transactions with a government that are accounted for by applying a grant or contribution accounting model by analogy. The amendments require disclosure of information about the nature of the transactions and the related accounting policy used to account for the transactions, information regarding the line items within the consolidated financial statements that are affected by the transactions, and significant terms and conditions of the transactions. The adoption of this update did not have a material impact on the Company’s condensed consolidated financial statements and related disclosures. |
BASIC AND DILUTED INCOME PER CO
BASIC AND DILUTED INCOME PER COMMON SHARE | 9 Months Ended |
Sep. 30, 2022 | |
BASIC AND DILUTED INCOME PER COMMON SHARE | |
BASIC AND DILUTED INCOME PER COMMON SHARE | 3. BASIC AND DILUTED INCOME PER COMMON SHARE Basic and diluted income per common share were calculated using the following: Three Months Ended Nine Months Ended September 30 September 30 2022 2021 2022 2021 Net Income $ 5,232 $ 3,846 $ 11,054 $ 13,540 Basic and Diluted Common Shares Weighted Average Shares Outstanding - Basic 11,417 11,411 11,417 11,411 Dilution for Assumed Exercises of Nonvested Restricted Stock Units — — 1 — Weighted Average Common Shares Outstanding - Diluted 11,417 11,411 11,418 11,411 Basic income per common share is computed by dividing net income by the weighted average number of common shares outstanding. Diluted income per common share is calculated by dividing net income by the weighted average number of common and potential dilutive common shares outstanding. The Company uses the treasury stock method to account for the effect of nonvested restricted stock units on the computation of diluted income per share. For the three months ended September 30, 2022, all 160 nonvested restricted stock units would have been anti-dilutive. For the nine months ended September 30, 2022, none of the nonvested restricted stock units would have been anti-dilutive. There were no nonvested restricted stock units granted or outstanding during the three or nine months ended September 30, 2021. |
REVENUE
REVENUE | 9 Months Ended |
Sep. 30, 2022 | |
REVENUE | |
REVENUE | 4. REVENUE Substantially all of our revenue is generated from sales of towing and recovery equipment. As such, disaggregation of revenue by product line would not provide useful information because all product lines have substantially similar characteristics. However, revenue streams are tracked by the geographic location of customers. This disaggregated information is presented in the table below. For the Three Months Ended For the Nine Months Ended September 30, September 30, 2022 2021 2022 2021 Net Sales: North America $ 182,249 $ 142,338 $ 562,235 $ 450,908 Foreign 23,308 22,377 60,367 64,877 $ 205,557 $ 164,715 $ 622,602 $ 515,785 Revenue is recognized when obligations under the terms of a contract with a customer are satisfied. Except for certain extended service contracts on a small percentage of units sold, the Company’s performance obligations are satisfied, and sales revenue is recognized when products are shipped from the Company’s facilities. From time to time, revenue is recognized under a bill and hold arrangement. Recognition of revenue on bill and hold arrangements occurs when control transfers to the customer. The bill and hold arrangement must be substantive, and the product must be separately identified as belonging to the customer, ready for physical transfer, and unavailable to be used or directed to another customer. Revenue is measured as the amount of consideration expected to be received in exchange for the transfer of products. Sales and other taxes collected concurrent with revenue-producing activities are excluded from revenue. Warranty related costs are recognized as an expense at the time products are sold and a reserve is established. Depending on the terms of the arrangement, for certain contracts the Company may defer the recognition of a portion of the consideration received because a future obligation has not yet been satisfied, such as an extended service contract. An observable price is used to determine the stand-alone selling price for separate performance obligations or a cost plus margin approach is utilized when one is not available. Contract assets primarily relate to the Company’s rights to consideration for work completed but not billed at the reporting date. The contract assets are transferred to receivables when the rights become unconditional. Contract liabilities primarily relate to performance obligations to be satisfied in the future. As of September 30, 2022, and December 31, 2021, contract liability balances were $274 and $257, respectively, and are included in accrued liabilities on the condensed consolidated balance sheets. No revenue related to contract liability balances was recognized during the three and nine months ended September 30, 2022, or during the three and nine months ended September 30, 2021. The Company did not have any contract assets at September 30, 2022 or December 31, 2021. The Company extends credit to customers in the normal course of business. Collections from customers are continuously monitored and an allowance for credit losses is maintained based on historical experience adjusted for current conditions and forecasts capturing country and industry-specific economic factors. The Company also considers any specific customer collection issues. Since the Company’s trade receivables are largely similar, the Company evaluates its allowance for credit losses as one portfolio segment. At origination, the Company evaluates credit risk based on a variety of credit quality factors including prior payment experience, customer financial information, credit ratings, probabilities of default, industry trends and other internal metrics. On an ongoing basis, data by each major customer is regularly reviewed based on past-due status to evaluate the adequacy of the allowance for credit losses and actual write-offs are charged against the allowance. Trade accounts receivable are generally diversified due to the number of entities comprising the Company’s customer base and their dispersion across many geographic regions. The Company also frequently monitors the creditworthiness of the customers to whom the credit is granted in the normal course of business. Sales from one customer made up approximately 12% and 11% of total Company sales during the three and nine months ended September 30, 2022, respectively. No one customer made up greater than 10% of total Company sales during the three or nine months ended September 30, 2021. Accounts receivable from no one customer made up greater than 10% of total Company trade accounts receivable at September 30, 2022 or December 31, 2021. |
INVENTORIES
INVENTORIES | 9 Months Ended |
Sep. 30, 2022 | |
INVENTORIES | |
INVENTORIES | 5. INVENTORIES Inventory costs include materials, labor and factory overhead. Inventories are stated at the lower of cost or net realizable value, determined on a moving average unit cost basis. Appropriate consideration is given to obsolescence, valuation and other factors in determining net realizable value. Revisions of these estimates could result in the need for adjustments. Inventories, net of reserves, at September 30, 2022 and December 31, 2021 consisted of the following: 2022 2021 Chassis $ 14,974 $ 5,753 Raw materials 70,531 59,651 Work in process 44,334 33,994 Finished goods 14,543 15,510 $ 144,382 $ 114,908 |
LONG-TERM OBLIGATIONS
LONG-TERM OBLIGATIONS | 9 Months Ended |
Sep. 30, 2022 | |
LONG-TERM OBLIGATIONS | |
LONG-TERM OBLIGATIONS | 6. LONG-TERM OBLIGATIONS Credit Facility On October 28, 2022, the Company and certain of its subsidiaries entered into (a) a First Amendment to Amended and Restated Loan Agreement with First Horizon Bank (successor in interest to First Tennessee Bank National Association, “First Horizon”) and (b) an Amended and Restated Master Revolving Credit Note, dated as of October 28, 2022, in the maximum principal amount of $100.0 million, with a maturity date of May 31, 2027 (the “Amended Note” and together with the Amended Note, collectively, the “Amendment Documents”). The Amendment Documents amend the Company’s existing credit facility evidenced by the Amended and Restated Loan Agreement dated as of December 21, 2020 (the “Prior Credit Agreement”) which had provided a $50.0 million unsecured revolving credit facility with First Horizon (the “Prior Credit Facility”) to, among other things: (i) provide for revolving credit availability up to a maximum principal amount of $100.00 million, (ii) make certain technical and operational adjustments necessary to implement one (1) month Term SOFR as the primary interest rate index and (iii) include a new asset coverage financial covenant test. All other material terms and conditions of the Prior Credit Facility as evidenced by the Prior Credit Agreement remain unchanged, including the maturity date of May 31, 2027. During the first nine months of 2022, the Company drew $45,000 on its credit facility for working capital needs and retained $45,000 in outstanding borrowings under its credit facility at September 30, 2022. At December 31, 2021, the Company had $0 in outstanding borrowings under the credit facility. At September 30, 2022 and December 31, 2022, the Company had cash and temporary investments of $33,208 and $54,332, respectively. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Sep. 30, 2022 | |
COMMITMENTS AND CONTINGENCIES. | |
COMMITMENTS AND CONTINGENCIES | 7. COMMITMENTS AND CONTINGENCIES Leasing Activities The Company leases certain equipment and facilities under long-term non-cancellable operating and finance lease agreements. The leases expire at various dates through 2027. Certain of the lease agreements contain renewal options. For those leases that have renewal options, the Company included these renewal periods in the lease term if the Company determined it was reasonably certain to exercise the renewal option. Lease payments during such renewal periods were also considered in the calculation of right-of-use assets and lease obligations. Right-of-use assets represent the Company’s right to use an underlying asset for the lease term and lease obligations represent the Company’s obligation to make lease payments arising from the lease. Lease obligations are recognized at the commencement date based on the present value of lease payments over the lease term. Right-of-use assets are recognized at the commencement date as the initial measurement of the lease liability, plus payments made prior to lease commencement and any initial direct costs. As most of the Company’s leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments. The Company’s lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Expense is recognized on a straight-line basis over the lease term for operating leases. For finance leases, expense is recognized as the expense from straight-line amortization of the right-of-use asset plus the periodic interest expense from the lease obligation. Short-term leases have a lease term of twelve months or less. The Company recognizes short-term leases on a straight-line basis and does not record a related right-of-use asset or lease obligation for such contracts. Right-of-use assets related to finance leases are included as a component of property, plant and equipment, net on the condensed consolidated balance sheets. A maturity analysis of the undiscounted cash flows of operating lease obligations is as follows: Operating Lease Obligation Remaining lease payments to be paid during the year ended December 31, 2022 $ 96 2023 323 2024 274 2025 239 2026 87 Thereafter 1 Total lease payments 1,020 Less imputed interest (76) Lease obligation at September 30, 2022 $ 944 The lease cost and certain other information during the three and nine months ended September 30, 2022 and 2021 were as follows: Three Months Ended Nine Months Ended September 30 September 30 2022 2021 2022 2021 Lease Cost Finance lease cost: Amortization of right-of-use assets $ 4 $ 5 $ 14 $ 16 Interest on lease obligation — — 1 1 Total finance lease cost 4 5 15 17 Total long-term operating lease cost 95 107 300 320 Total short-term operating lease cost 141 116 424 362 Total lease cost $ 240 $ 228 $ 739 $ 699 Other Information Cash paid for amounts included in the measurement of lease obligation: Operating cash flows from operating leases $ 95 $ 107 $ 301 $ 320 Financing cash flows from finance leases 4 5 15 16 Right-of-use assets obtained in exchange for new operating lease obligations 67 6 135 6 The weighted average remaining lease term for operating leases at September 30, 2022 was 3.3 years. The weighted average remaining lease term for operating leases and finance leases at December 31, 2021 was 3.9 years and 0.7 years, respectively. The weighted average discount rate for operating leases at September 30, 2022 was 3.1%. The weighted average discount rate for operating leases and finance leases at December 31, 2021 was 3.1% and 4.0%, respectively. The Company’s subsidiary in the United Kingdom leased facilities used for manufacturing and office space from a related party with related lease costs during the three months ended September 30, 2022 and 2021 of $50 and $59, respectively, and related lease costs during the nine months ended September 30, 2022 and 2021 of $158 and $172, respectively. The Company’s French subsidiary leased a fleet of vehicles from a related party with related lease costs of $38 and $27 during the three months ended September 30, 2022 and 2021, respectively, and related lease costs of $109 and $83 during the nine months ended September 30, 2022 and 2021, respectively. Other Commitments At September 30, 2022 and December 31, 2021, the Company had commitments of approximately $5,616 and $5,052 , respectively, for construction and acquisition of property, plant and equipment. The Company migrated its enterprise resource planning (ERP) system to a multi-tenant cloud environment in 2021 and is continuing to implement additional modules such as enterprise performance management, human capital management, data analytics and the use of artificial intelligence. During the implementation of these modules we are conducting an examination of historical information to confirm accuracy of information being migrated to our new systems. Any adjustments identified and recorded as a result of the examination are not expected to have a material adverse effect on the consolidated financial position or results of operations of the Company. Related to the continuing implementation project, at September 30, 2022 and December 31, 2021, the Company had commitments of approximately $2,874 and $3,751 , respectively, in software license fees payable in installments through 2025. Contingencies The Company has entered into arrangements with third-party lenders where it has agreed, in the event of default by a distributor within the independent distributor network, to repurchase from the third-party lender Company products repossessed from the independent distributor customer. These arrangements are typically subject to a maximum repurchase amount. The maximum amount of collateral that the Company could be required to purchase was approximately $72,863 at September 30, 2022, and $47,883 at December 31, 2021. The increase during 2022 is due to increases in sales and supply chain issues that delay payment until all parts and components are received. The Company’s risk under these arrangements is mitigated by the value of the products that would be repurchased as part of the transaction. The Company considered the fair value at inception of its commitment under these arrangements and concluded that there is no probable loss associated with these potential repurchase obligations and thus no associated liability was recognized at September 30, 2022 or December 31, 2021. The Company is, from time to time, a party to litigation arising in the normal course of its business. Litigation is subject to various inherent uncertainties, and it is possible that some of such matters could be resolved unfavorably to the Company, which could result in substantial damages against the Company. The Company establishes accruals for matters that are probable and reasonably estimable and maintains product liability and other insurance that management believes to be adequate. Management believes that any liability that may ultimately result from the resolution of any such matters in excess of available insurance coverage and accruals will not have a material adverse effect on the consolidated financial position or results of operations of the Company. |
INCOME TAXES
INCOME TAXES | 9 Months Ended |
Sep. 30, 2022 | |
INCOME TAXES | |
INCOME TAXES | 8. INCOME TAXES As of September 30, 2022, the Company had no federal net operating loss carryforwards. State net operating loss carryforwards were not significant at September 30, 2022. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 9 Months Ended |
Sep. 30, 2022 | |
SUBSEQUENT EVENTS | |
SUBSEQUENT EVENTS | 9. SUBSEQUENT EVENTS Credit Facility Subsequent to September 30, 2022, the Company and certain of its subsidiaries entered into (a) a First Amendment to Amended and Restated Loan Agreement with First Horizon Bank (successor in interest to First Tennessee Bank National Association, “First Horizon”) and (b) an Amended and Restated Master Revolving Credit Note, dated as of October 28, 2022, in the maximum principal amount of $100.0 million, with a maturity date of May 31, 2027 (the “Amended Note” and together with the Amended Note, collectively, the “Amendment Documents”). See Note 6 for more information. Dividends On November 7, 2022, the Company’s Board of Directors declared a quarterly cash dividend of $0.18 per share. The dividend is payable December 12, 2022, to shareholders of record as of December 5, 2022. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Sep. 30, 2022 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
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 (the “SEC”). Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) 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 December 31, 2021. The condensed consolidated financial statements include accounts of certain subsidiaries whose fiscal closing dates differ from December 31 st |
Recent Accounting Pronouncements | Recently Issued Standards In October 2021, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2021-08, Business Combinations (Topic 805). The update provides guidance on how to measure and recognize contract assets and contract liabilities when purchased as part of a business combination. According to the guidance, the acquirer must follow ASC Topic 606 in accounting for the contract asset or contract liability being purchased. The amendments in the update will be effective for financial statements beginning after December 15, 2022, including interim periods within those fiscal years. The Company will apply the amendments prospectively. The adoption of this update will not have a material impact on the Company’s consolidated financial statements and related disclosures. In March 2022, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2022-02, Financial Instruments – Credit Losses (Topic 326). The update will require entities with financing receivables to disclose gross write-offs by year of origination of the receivable. The amendments in the update will be effective for financial statements beginning after December 15, 2022, including interim periods within those fiscal years, and will be applied prospectively. The adoption of this update will not have a material impact on the Company’s consolidated financial statements and related disclosures. Recently Adopted Standards During the first quarter of 2022, the Company adopted ASU 2021-10, Government Assistance (Topic 832), which requires certain disclosures about transactions with a government that are accounted for by applying a grant or contribution accounting model by analogy. The amendments require disclosure of information about the nature of the transactions and the related accounting policy used to account for the transactions, information regarding the line items within the consolidated financial statements that are affected by the transactions, and significant terms and conditions of the transactions. The adoption of this update did not have a material impact on the Company’s condensed consolidated financial statements and related disclosures. |
BASIC AND DILUTED INCOME PER _2
BASIC AND DILUTED INCOME PER COMMON SHARE (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
BASIC AND DILUTED INCOME PER COMMON SHARE | |
Schedule of basic and diluted income per common share | Three Months Ended Nine Months Ended September 30 September 30 2022 2021 2022 2021 Net Income $ 5,232 $ 3,846 $ 11,054 $ 13,540 Basic and Diluted Common Shares Weighted Average Shares Outstanding - Basic 11,417 11,411 11,417 11,411 Dilution for Assumed Exercises of Nonvested Restricted Stock Units — — 1 — Weighted Average Common Shares Outstanding - Diluted 11,417 11,411 11,418 11,411 |
REVENUE (Tables)
REVENUE (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
REVENUE | |
Schedule of disaggregation of revenue by the geographic region for customers | For the Three Months Ended For the Nine Months Ended September 30, September 30, 2022 2021 2022 2021 Net Sales: North America $ 182,249 $ 142,338 $ 562,235 $ 450,908 Foreign 23,308 22,377 60,367 64,877 $ 205,557 $ 164,715 $ 622,602 $ 515,785 |
INVENTORIES (Tables)
INVENTORIES (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
INVENTORIES | |
Schedule of inventories, net of reserves | 2022 2021 Chassis $ 14,974 $ 5,753 Raw materials 70,531 59,651 Work in process 44,334 33,994 Finished goods 14,543 15,510 $ 144,382 $ 114,908 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
COMMITMENTS AND CONTINGENCIES. | |
Summary of maturities of operating lease liabilities | Operating Lease Obligation Remaining lease payments to be paid during the year ended December 31, 2022 $ 96 2023 323 2024 274 2025 239 2026 87 Thereafter 1 Total lease payments 1,020 Less imputed interest (76) Lease obligation at September 30, 2022 $ 944 |
Summary of components of our lease cost | Three Months Ended Nine Months Ended September 30 September 30 2022 2021 2022 2021 Lease Cost Finance lease cost: Amortization of right-of-use assets $ 4 $ 5 $ 14 $ 16 Interest on lease obligation — — 1 1 Total finance lease cost 4 5 15 17 Total long-term operating lease cost 95 107 300 320 Total short-term operating lease cost 141 116 424 362 Total lease cost $ 240 $ 228 $ 739 $ 699 Other Information Cash paid for amounts included in the measurement of lease obligation: Operating cash flows from operating leases $ 95 $ 107 $ 301 $ 320 Financing cash flows from finance leases 4 5 15 16 Right-of-use assets obtained in exchange for new operating lease obligations 67 6 135 6 |
BASIC AND DILUTED INCOME PER _3
BASIC AND DILUTED INCOME PER COMMON SHARE (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||||||
Net income | $ 5,232 | $ 3,757 | $ 2,065 | $ 3,846 | $ 6,516 | $ 3,178 | $ 11,054 | $ 13,540 |
Basic and Diluted Common Shares | ||||||||
Weighted Average Shares Outstanding - Basic | 11,417,000 | 11,411,000 | 11,417,000 | 11,411,000 | ||||
Dilution for Assumed Exercises of Nonvested Restricted Stock Units | 1,000 | |||||||
Weighted Average Common Shares Outstanding - Diluted | 11,417,000 | 11,411,000 | 11,418,000 | 11,411,000 | ||||
Restricted Stock Units | ||||||||
Basic and Diluted Common Shares | ||||||||
Antidilutive securities excluded from computation of earnings per share | 160,000 | 0 | ||||||
Nonvested restricted stock units granted | 0 | 0 | ||||||
Nonvested restricted stock units outstanding | 0 | 0 |
REVENUE (Schedule of Disaggrega
REVENUE (Schedule of Disaggregation of Revenue by Geographic Segment) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Disaggregation of Revenue [Line Items] | ||||
Net Sales | $ 205,557 | $ 164,715 | $ 622,602 | $ 515,785 |
North America | ||||
Disaggregation of Revenue [Line Items] | ||||
Net Sales | 182,249 | 142,338 | 562,235 | 450,908 |
Foreign | ||||
Disaggregation of Revenue [Line Items] | ||||
Net Sales | $ 23,308 | $ 22,377 | $ 60,367 | $ 64,877 |
REVENUE (Narrative) (Details)
REVENUE (Narrative) (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 USD ($) | Sep. 30, 2021 USD ($) | Sep. 30, 2022 USD ($) customer | Sep. 30, 2021 USD ($) | Dec. 31, 2021 USD ($) | |
Concentration Risk [Line Items] | |||||
Contract liability balances related to performance obligations | $ 274 | $ 274 | $ 257 | ||
Recognized revenue related to contract liability balances | 0 | $ 0 | 0 | $ 0 | |
Contract assets | $ 0 | $ 0 | $ 0 | ||
Net sales | Customer Concentration Risk | Customer one | |||||
Concentration Risk [Line Items] | |||||
Number of customer | customer | 1 | ||||
Concentration Risk, Percentage | 12% | 11% |
INVENTORIES (Schedule of Invent
INVENTORIES (Schedule of Inventories, Net of Reserves) (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
INVENTORIES | ||
Chassis | $ 14,974 | $ 5,753 |
Raw materials | 70,531 | 59,651 |
Work in process | 44,334 | 33,994 |
Finished goods | 14,543 | 15,510 |
Inventories | $ 144,382 | $ 114,908 |
LONG-TERM OBLIGATIONS (Details)
LONG-TERM OBLIGATIONS (Details) - USD ($) $ in Thousands | 9 Months Ended | |||||
Sep. 30, 2022 | Oct. 28, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | Dec. 31, 2020 | Dec. 21, 2020 | |
Line of Credit Facility [Line Items] | ||||||
Cash and temporary investments | $ 33,208 | $ 54,332 | $ 50,407 | $ 57,521 | ||
First Tennessee Bank National Association | Credit facility | ||||||
Line of Credit Facility [Line Items] | ||||||
Revolving credit facility | $ 100,000 | $ 50,000 | ||||
Amount drew on existing credit facility | 45,000 | |||||
Line of credit outstanding borrowings | $ 45,000 | $ 0 |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES (Maturity of Undiscounted Cash Flows of Operating Lease Obligations) (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2022 USD ($) | |
Operating Lease Obligation | |
2022 | $ 96 |
2023 | 323 |
2024 | 274 |
2025 | 239 |
2026 | 87 |
Thereafter | 1 |
Total lease payments | 1,020 |
Less: Imputed Interest | (76) |
Lease obligation at end of period | $ 944 |
Lessee, Operating Lease, Existence of Option to Extend [true false] | true |
Lessee, Operating Lease, Existence of Option to Terminate [true false] | true |
Finance Lease Obligation | |
Lessee, Finance Lease, Existence of Option to Extend [true false] | true |
Lessee, Finance Lease, Existence of Option to Terminate [true false] | true |
COMMITMENTS AND CONTINGENCIES_3
COMMITMENTS AND CONTINGENCIES (Lease Cost) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Lease Cost | |||||
Amortization of right-of-use assets | $ 4 | $ 5 | $ 14 | $ 16 | |
Interest on lease obligation | 1 | 1 | |||
Total finance lease cost | 4 | 5 | 15 | 17 | |
Total long-term operating lease cost | 95 | 107 | 300 | 320 | |
Total short-term operating lease cost | 141 | 116 | 424 | 362 | |
Total lease cost | 240 | 228 | 739 | 699 | |
Cash paid for amounts included in the measurement of lease obligation: | |||||
Operating cash flows from operating leases | 95 | 107 | 301 | 320 | |
Financing cash flows from finance leases | 4 | 5 | 15 | 16 | |
Right-of-use assets obtained in exchange for new operating lease obligations | $ 67 | 6 | $ 135 | 6 | |
Weighted average remaining lease term for operating leases | 3 years 3 months 18 days | 3 years 3 months 18 days | 3 years 10 months 24 days | ||
Weighted average remaining lease term for finance leases | 8 months 12 days | ||||
Weighted average discount rate for operating leases | 3.10% | 3.10% | 3.10% | ||
Weighted average discount rate for finance leases | 4% | ||||
Boniface Engineering, Ltd. | |||||
Lease Cost | |||||
Total lease cost | $ 50 | 59 | $ 158 | 172 | |
Jige International S.A | |||||
Lease Cost | |||||
Total lease cost | $ 38 | $ 27 | $ 109 | $ 83 |
COMMITMENTS AND CONTINGENCIES_4
COMMITMENTS AND CONTINGENCIES (Other Commitments and Contingencies) (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
Maximum | ||
Long-term Purchase Commitment [Line Items] | ||
Repurchase collateral amount | $ 72,863 | $ 47,883 |
Capital Addition Purchase Commitments | ||
Long-term Purchase Commitment [Line Items] | ||
Commitment amount | 5,616 | 5,052 |
Software License Fee Arrangement | ||
Long-term Purchase Commitment [Line Items] | ||
Commitment amount | $ 2,874 | $ 3,751 |
INCOME TAXES (Details)
INCOME TAXES (Details) $ in Thousands | Sep. 30, 2022 USD ($) |
INCOME TAXES | |
Federal net operating loss carryforward | $ 0 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) - USD ($) $ / shares in Units, $ in Millions | Nov. 07, 2022 | Oct. 28, 2022 | Dec. 21, 2020 |
Subsequent Event [Line Items] | |||
Dividends payable, declared date | Nov. 07, 2022 | ||
Dividends payable, amount per share | $ 0.18 | ||
Dividends payable, payment date | Dec. 12, 2022 | ||
Dividends payable, record date | Dec. 05, 2022 | ||
First Tennessee Bank National Association | Credit facility | |||
Subsequent Event [Line Items] | |||
Revolving credit facility | $ 100 | $ 50 |