Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2018 | Jul. 31, 2018 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | MILLER INDUSTRIES INC /TN/ | |
Entity Central Index Key | 924,822 | |
Trading Symbol | mlr | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock Shares Outstanding | 11,384,296 | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2018 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q2 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
CURRENT ASSETS: | ||
Cash and temporary investments | $ 19,713 | $ 21,895 |
Accounts receivable, net of allowance for doubtful accounts of $1,136 and $1,038 at June 30, 2018 and December 31, 2017, respectively | 148,023 | 132,699 |
Inventories, net | 81,219 | 68,567 |
Prepaid expenses | 4,550 | 4,272 |
Total current assets | 253,505 | 227,433 |
PROPERTY, PLANT, AND EQUIPMENT, net | 83,162 | 77,628 |
GOODWILL | 11,619 | 11,619 |
OTHER ASSETS | 579 | 558 |
TOTAL ASSETS | 348,865 | 317,238 |
CURRENT LIABILITIES: | ||
Accounts payable | 91,953 | 79,304 |
Accrued liabilities | 26,729 | 22,001 |
Long-term obligations due within one year | 386 | 394 |
Total current liabilities | 119,068 | 101,699 |
LONG-TERM OBLIGATIONS | 15,582 | 10,212 |
NONCURRENT TAXES PAYABLE | 1,102 | |
DEFERRED INCOME TAX LIABILITIES | 1,308 | 1,125 |
TOTAL LIABILITIES | 135,958 | 114,138 |
COMMITMENTS AND CONTINGENCIES (Notes 6 and 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, 11,384,296 and 11,378,482, outstanding at June 30, 2018 and December 31, 2017, respectively | 114 | 114 |
Additional paid-in capital | 150,849 | 150,699 |
Accumulated surplus | 65,752 | 55,580 |
Accumulated other comprehensive loss | (3,808) | (3,293) |
Total shareholders' equity | 212,907 | 203,100 |
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ 348,865 | $ 317,238 |
CONDENSED CONSOLIDATED BALANCE3
CONDENSED CONSOLIDATED BALANCE SHEETS (Parentheticals) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Statement Of Financial Position [Abstract] | ||
Allowance for doubtful accounts (in dollars) | $ 1,136 | $ 1,038 |
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 | 11,384,296 | 11,378,482 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Income Statement [Abstract] | ||||
NET SALES | $ 176,888 | $ 153,089 | $ 336,048 | $ 302,022 |
COSTS OF OPERATIONS | 155,609 | 135,486 | 296,342 | 269,024 |
GROSS PROFIT | 21,279 | 17,603 | 39,706 | 32,998 |
OPERATING EXPENSES: | ||||
Selling, general and administrative expenses | 9,678 | 9,066 | 19,267 | 18,110 |
NON-OPERATING (INCOME) EXPENSES: | ||||
Interest expense, net | 484 | 315 | 904 | 693 |
Other (income) expense, net | 627 | (470) | (288) | (484) |
Total expense, net | 10,789 | 8,911 | 19,883 | 18,319 |
INCOME BEFORE INCOME TAXES | 10,490 | 8,692 | 19,823 | 14,679 |
INCOME TAX PROVISION | 2,890 | 3,267 | 5,553 | 5,415 |
NET INCOME | $ 7,600 | $ 5,425 | $ 14,270 | $ 9,264 |
BASIC INCOME PER COMMON SHARE (in dollars per share) | $ 0.67 | $ 0.48 | $ 1.25 | $ 0.82 |
DILUTED INCOME PER COMMON SHARE (in dollars per share) | 0.67 | 0.48 | 1.25 | 0.81 |
CASH DIVIDENDS DECLARED PER COMMON SHARE (in dollars per share) | $ 0.18 | $ 0.18 | $ 0.36 | $ 0.36 |
WEIGHTED AVERAGE SHARES OUTSTANDING: | ||||
Basic (in shares) | 11,384 | 11,365 | 11,384 | 11,357 |
Diluted (in shares) | 11,393 | 11,383 | 11,393 | 11,381 |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Statement Of Other Comprehensive Income [Abstract] | ||||
NET INCOME | $ 7,600 | $ 5,425 | $ 14,270 | $ 9,264 |
OTHER COMPREHENSIVE INCOME (LOSS): | ||||
Foreign currency translation adjustment | (1,332) | 1,809 | (515) | 1,698 |
Total other comprehensive income (loss) | (1,332) | 1,809 | (515) | 1,698 |
COMPREHENSIVE INCOME | $ 6,268 | $ 7,234 | $ 13,755 | $ 10,962 |
CONDENSED CONSOLIDATED STATEME6
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
OPERATING ACTIVITIES: | ||
Net income | $ 14,270 | $ 9,264 |
Adjustments to reconcile net income to net cash flows from operating activities: | ||
Depreciation and amortization | 3,518 | 2,686 |
(Gain) loss on disposals of property, plant and equipment | 133 | (643) |
Provision for doubtful accounts | 115 | (50) |
Issuance of non-employee director shares | 150 | 150 |
Deferred tax provision | 182 | 63 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (15,585) | (8,455) |
Inventories | (13,024) | (3,448) |
Prepaid expenses | (287) | 820 |
Other assets | (21) | 45 |
Accounts payable | 12,823 | (2,971) |
Accrued liabilities | 3,817 | 3,931 |
Net cash flows from operating activities | 6,091 | 1,392 |
INVESTING ACTIVITIES: | ||
Purchases of property, plant and equipment | (9,392) | (14,304) |
Proceeds from sale of property, plant and equipment | 132 | 1,305 |
Net cash flows from investing activities | (9,260) | (12,999) |
FINANCING ACTIVITIES: | ||
Net borrowings under credit facility | 5,000 | 15,000 |
Payments of cash dividends | (4,098) | (4,091) |
Net proceeds from other long-term obligations | 374 | 142 |
Net cash flows from financing activities | 1,276 | 11,051 |
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND TEMPORARY INVESTMENTS | (289) | 1,471 |
NET CHANGE IN CASH AND TEMPORARY INVESTMENTS | (2,182) | 915 |
CASH AND TEMPORARY INVESTMENTS, beginning of period | 21,895 | 31,115 |
CASH AND TEMPORARY INVESTMENTS, end of period | 19,713 | 32,030 |
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | ||
Cash payments for interest | 1,121 | 1,044 |
Cash payments for income taxes, net of refunds | $ 3,699 | $ 761 |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 6 Months Ended |
Jun. 30, 2018 | |
Organization, Consolidation and Presentation Of Financial Statements [Abstract] | |
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. 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 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. Cost of goods sold for interim periods for certain entities is determined based on estimated gross profit rates. 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, 2017. 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 | 6 Months Ended |
Jun. 30, 2018 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
RECENT ACCOUNTING PRONOUNCEMENTS | 2. RECENT ACCOUNTING PRONOUNCEMENTS Recently Issued Standards The Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) 2016-02 Leases (Topic 842) on February 25, 2016 and is intended to improve financial reporting on leasing transactions. The standard affects all companies and other organizations that lease assets such as real estate, airplanes, and manufacturing equipment. The standard will require lessees to recognize on the balance sheet the assets and liabilities for the rights and obligations created by their lease agreements. An organization is to provide disclosures designed to enable users of financial statements to understand the amount, timing, and uncertainty of cash flows arising from leases. These disclosures include qualitative and quantitative requirements concerning additional information about the amounts recorded in the financial statements. Under the new guidance, a lessee will be required to recognize assets and liabilities for leases with lease terms of more than 12 months. Consistent with current GAAP, the recognition, measurement, and presentation of expenses and cash flows arising from a lease by a lessee will depend primarily on its classification as a finance or operating lease. However, unlike current GAAP, which requires only capital leases to be recognized on the balance sheet, the new standard will require both types of leases (i.e. operating and finance) to be recognized on the balance sheet. The lessee accounting model prescribed by the new standard will require a finance lease to be accounted for in substantially the same manner as capital leases under existing GAAP. An operating lease will be accounted for in a manner similar to operating leases under existing GAAP, except that lessees will recognize a lease liability and a right-of-use asset on the balance sheet during the lease term. The standard will be effective for financial statements issued for annual periods, and interim periods within these annual periods, beginning after December 15, 2018, with early adoption permitted. See “Credit Facilities and Other Obligations” within Item 2 for the Company’s current lease commitments. The Company plans to use the modified retrospective approach and will elect to initially apply the standard with a cumulative-effect adjustment to the opening balance of retained earnings at the date of adoption. The Company is currently evaluating the effect that implementation will have on its consolidated financial position, results of operations and cash flows. Recently Adopted Standards In May 2014, the FASB issued ASU 2014-09, Revenue—Revenue from Contracts with Customers. The Company has adopted the standard and all related amendments with an effective date of January 1, 2018 using the modified retrospective method, thus recognizing the cumulative effect of adopting the standard as an adjustment to the opening balance of retained earnings. The Company applied the standard to contracts that were not completed as of the adoption date. Comparative information has not been restated and continues to be reported under the accounting standards in effect for the periods prior to the effective date. As a result of the adoption, effective January 1, 2018, the Company began including the costs of painting activities as performance obligations within each contract, which results in a delay in recognition of revenue until such activities are complete and the product is shipped. With the exception of certain extended service contracts on a small percentage of units sold, the Company’s performance obligations are complete and sales revenue is recognized when products are shipped from the Company’s facilities. We do not anticipate the adoption of the standard to have a material impact on an ongoing basis to the Company’s consolidated financial statements and related disclosures. The cumulative effect adjustment to the consolidated balance sheets as of January 1, 2018 was as follows: Balance at Cumulative Effect Balance at Assets Accounts Receivable, net $ 132,699 $ (2,496 ) $ 130,203 Inventories, net 68,567 1,996 70,563 Liabilities and Shareholders' Equity Accrued Liabilities 22,001 (176 ) 21,825 Accumulated Surplus 55,580 (324 ) 55,256 In accordance with the new revenue standard requirements, the impact of the adoption to the consolidated statement of income during the three and six months ended June 30, 2018 and the consolidated balance sheets as of June 30, 2018 was as follows: Three Months Ended June 30, 2018 As Reported Balances Without Effect of Adoption Statement of Income Revenues Net Sales $ 176,888 $ 176,855 $ 33 Costs and Expenses Costs of Operations 155,609 155,583 26 Income Tax Provision 2,890 2,864 26 Net Income 7,600 7,619 (19 ) Six Months Ended June 30, 2018 As Reported Balances Without Effect of Adoption Statement of Income Revenues Net Sales $ 336,048 $ 336,890 $ (842 ) Costs and Expenses Costs of Operations 296,342 297,016 (674 ) Income Tax Provision 5,553 5,588 (35 ) Net Income 14,270 14,403 (133 ) June 30, 2018 As Reported Balances Without Effect of Adoption Balance Sheet Assets Accounts Receivable, net $ 148,023 $ 148,865 $ (842 ) Inventories, net 81,219 80,545 674 Liabilities and Shareholders’ Equity Accrued Liabilities 26,729 26,764 (35 ) Accumulated Surplus 65,752 65,885 (133 ) As a result of the adoption, we changed our accounting policy. See Note 4 for further information. In January 2017, the FASB issued ASU No. 2017-04, Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. The standard eliminates the second step in the goodwill impairment test which required an entity to determine the implied fair value of the reporting unit’s goodwill. Instead, an entity will now recognize an impairment loss if the carrying value of the net assets assigned to the reporting unit exceeds the fair value of the reporting unit, with the impairment loss not to exceed the amount of goodwill allocated to the reporting unit. The Company elected to adopt the standard in the first quarter of 2018, with an effective date of January 1, 2018. The adoption of this guidance did not have a material impact on its consolidated financial statements and related disclosures. In May 2017, the FASB amended the requirements in the Compensation—Stock Compensation Topic of the ASC related to changes to the terms or conditions of a share-based payment award. The amendments provide guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting. The Company adopted the amendments in the first quarter of 2018, with an effective date of January 1, 2018. The adoption of this guidance did not have a material impact on the Company’s financial statements and related disclosures. |
BASIC AND DILUTED INCOME PER SH
BASIC AND DILUTED INCOME PER SHARE | 6 Months Ended |
Jun. 30, 2018 | |
Earnings Per Share [Abstract] | |
BASIC AND DILUTED INCOME PER SHARE | 3. BASIC AND DILUTED INCOME PER SHARE Basic income per share is computed by dividing net income by the weighted average number of common shares outstanding. Diluted income per share is calculated by dividing net income by the weighted average number of common and potential dilutive common shares outstanding. Diluted income per share takes into consideration the assumed exercise of outstanding stock options resulting in approximately 9,000 and 18,000 potential dilutive common shares for the three months ended June 30, 2018 and 2017, respectively, and 9,000 and 24,000 for the six months ended June 30, 2018 and 2017, respectively. For the three and six months ended June 30, 2018 and 2017, none of the outstanding stock options would have been anti-dilutive. |
REVENUE
REVENUE | 6 Months Ended |
Jun. 30, 2018 | |
Revenue from Contract with Customer [Abstract] | |
REVENUE | 4. REVENUE Substantially all of our revenue is generated from sales of towing 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 Six Months Ended 2018 2017 2018 2017 Net Sales: North America $ 143,137 $ 137,354 $ 274,781 $ 268,031 Foreign 33,751 15,735 61,267 33,991 $ 176,888 $ 153,089 $ 336,048 $ 302,022 Revenue is recognized when obligations under the terms of a contract with a customer are satisfied. Generally, this occurs upon shipment, which is when the risk of ownership for products has transferred to independent distributors or other customers. From time to time, revenue is recognized under a bill and hold arrangement. Recognition of revenue on bill and hold arrangements occurs when risk of ownership has passed to the customer, a fixed written commitment has been provided by the customer, the goods are complete and ready for shipment, the goods are segregated from inventory, and no performance obligation remains. 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. 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 January 1, 2018 and June 30, 2018, contract liability balances related to extended service contracts were $154 and $708, respectively, and are included in accrued liabilities on the consolidated balance sheets. No revenue related to the contract liability balance at January 1, 2018 was recognized during the three or six months ended June 30, 2018. The Company did not have any contract assets at January 1, 2018 or June 30, 2018. Impairment losses on contract receivables were de minimis during the three and six months ended June 30, 2018. |
INVENTORIES
INVENTORIES | 6 Months Ended |
Jun. 30, 2018 | |
Inventory Disclosure [Abstract] | |
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 first-in, first-out 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 June 30, 2018 and December 31, 2017 consisted of the following: June 30, December 31, Chassis $ 7,037 $ 7,525 Raw materials 38,399 30,109 Work in process 12,415 13,521 Finished goods 23,368 17,412 $ 81,219 $ 68,567 |
LONG-TERM OBLIGATIONS
LONG-TERM OBLIGATIONS | 6 Months Ended |
Jun. 30, 2018 | |
Long-Term Debt, Unclassified [Abstract] | |
LONG-TERM OBLIGATIONS | 6. LONG-TERM OBLIGATIONS Credit Facility and Other Long-Term Obligations Credit Facility On April 5, 2017, the $50,000 credit facility pursuant to our Loan Agreement with First Tennessee Bank National Association was renewed to extend the maturity date to May 31, 2019. The credit facility contains customary representations and warranties, events of default, and financial, affirmative and negative covenants for loan agreements of this kind. Covenants under the credit facility restrict the payment of cash dividends if the Company would be in violation of the minimum tangible net worth test or the leverage ratio test in the current loan agreement as a result of the dividend, among various restrictions. The Company has been in compliance with these covenants throughout 2017 and during the first half of 2018 and we anticipate that the Company will continue to be in compliance during the remainder of 2018. Subsequent to June 30, 2018, the credit facility was renewed and the maturity date was extended to May 31, 2020. In the absence of a default, all borrowings under the current credit facility bear interest at the LIBOR Rate plus 1.50% per annum. The Company will pay a non-usage fee under the current loan agreement at a rate per annum equal to between 0.15% and 0.35% of the unused amount of the current credit facility, which fee is paid quarterly. At June 30, 2018 and December 31, 2017, the Company had $15,000 and $10,000, respectively, in outstanding borrowings under the credit facility. Other Long-Term Obligations During November 2017, the Company’s French subsidiary, Jige International S.A., entered into an agreement with Banque Européenne du Crédit Mutuel for a €1,000 unsecured fixed rate loan with a maturity date of September 30, 2020. All borrowings under this loan bear interest at 0.3% per annum. At June 30, 2018, the Company had $968 in outstanding borrowings under the loan agreement, of which $582 and $386 were classified as long-term obligations and long-term obligations due within one year, respectively, on the consolidated balance sheets. At December 31, 2017, the Company had $606 in outstanding borrowings under the loan agreement, of which $212 and $394 were classified as long-term obligations and long-term obligations due within one year, respectively, on the consolidated balance sheets. These borrowings are being used primarily for the purchase of land and routine repairs to the operating facilities in France. The loan agreement contains no material covenants. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 6 Months Ended |
Jun. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | 7. COMMITMENTS AND CONTINGENCIES Commitments At June 30, 2018, the Company had commitments of approximately $5,586 for the acquisition of property, plant and equipment, including a de minimis amount for construction of an administrative building discussed below. During 2017, the Company substantially completed capital projects relating to its Pennsylvania and Tennessee manufacturing facilities. These project costs are included in property, plant and equipment, net on the consolidated balance sheets. The Company began construction of an administrative building at its Ooltewah, Tennessee facility in June 2017. The Company substantially completed this project during the second quarter of 2018. Contingencies The Company has entered into arrangements with third-party lenders where it has agreed, in the event of default by the independent distributor customer, 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 $52,379 at June 30, 2018, and $54,093 at December 31, 2017. However, 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 liability under these arrangements and concluded that the liability associated with these potential repurchase obligations is not material and not probable at June 30, 2018. 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 these matters could be resolved unfavorably to the Company, which could result in substantial damages against the Company. The Company has established 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 these 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 | 6 Months Ended |
Jun. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | 8. INCOME TAXES The Tax Cuts and Jobs Act (TCJA), among other changes, reduced the corporate tax rate from a top rate of 35% to a flat rate of 21%, effective January 1, 2018. At December 31, 2017, because of the implementation of the TCJA, the Company recognized a $1,102 liability in noncurrent taxes payable on its consolidated balance sheets related to the income tax from the deemed repatriation of its cumulative foreign earnings. During the first three months of 2018, the Company gathered additional information which demonstrated that the liability should be increased. Due to the inherent complexity of the calculation for the deemed repatriation tax, the Company followed elective guidance in SEC Staff Accounting Bulletin (SAB) 118, which allows for a measurement period adjustment to be reflected in the current reporting period, and at March 31, 2018, the deemed repatriation liability was increased to $1,335. Subsequent to March 31, 2018, the Internal Revenue Service issued additional guidance requiring income tax overpayments to be applied to the balance of the liability. Therefore, during the second quarter of 2018, the Company applied its overpayment to the liability, which reduced the balance to $0 at June 30, 2018. As of June 30, 2018, the Company had no federal operating loss carryforwards. As of June 30, 2018, the Company had a state net operating loss carryforward of $849, which will expire between 2018 and 2025. |
SHAREHOLDERS EQUITY
SHAREHOLDERS EQUITY | 6 Months Ended |
Jun. 30, 2018 | |
Stockholders' Equity Note [Abstract] | |
SHAREHOLDERS EQUITY | 9. SHAREHOLDERS EQUITY Dividends The Company has paid consecutive quarterly cash dividends since May 2011. During the three months ended June 30, 2018 and 2017 the Company paid quarterly cash dividends of $2,049 and $2,048, respectively, with each payment amounting to $0.18 per share. During the six months ended June 30, 2018 and 2017, the Company paid cash dividends totaling $4,098 and $4,091, respectively, which amounted to $0.36 per share for the period. On August 6, 2018, the Company’s Board of Directors declared a quarterly cash dividend of $0.18 per share. The dividend is payable September 17, 2018 to shareholders of record as of September 10, 2018. |
SUBSEQUENT EVENT
SUBSEQUENT EVENT | 6 Months Ended |
Jun. 30, 2018 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENT | 10. SUBSEQUENT EVENT On July 19, 2018, the Company entered into an Amended and Restated Loan Agreement with First Tennessee Bank National Association (“First Tennessee”), which amends and restates the loan agreement governing the Company’s existing $50.0 million unsecured revolving credit facility (the “Credit Facility”) with First Tennessee (the “Prior Loan Agreement”) to (i) renew and extend the maturity date of the Credit Facility from May 31, 2019 to May 31, 2020 and make certain other conforming changes, (ii) remove and replace a subsidiary of the Company as a borrower under the Credit Facility and (iii) modify certain other terms, including definitions and representations and warranties, set forth therein. |
Accounting Policies (Policies)
Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2018 | |
Accounting Policies [Abstract] | |
BASIS OF PRESENTATION | BASIS OF PRESENTATION The condensed consolidated financial statements of Miller Industries, Inc. and subsidiaries (the “Company”) included herein have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America 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. Cost of goods sold for interim periods for certain entities is determined based on estimated gross profit rates. 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, 2017. The condensed consolidated financial statements include accounts of certain subsidiaries whose fiscal closing dates differ from December 31 st |
RECENT ACCOUNTING PRONOUNCEMENTS | RECENT ACCOUNTING PRONOUNCEMENTS Recently Issued Standards The Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) 2016-02 Leases (Topic 842) on February 25, 2016 and is intended to improve financial reporting on leasing transactions. The standard affects all companies and other organizations that lease assets such as real estate, airplanes, and manufacturing equipment. The standard will require lessees to recognize on the balance sheet the assets and liabilities for the rights and obligations created by their lease agreements. An organization is to provide disclosures designed to enable users of financial statements to understand the amount, timing, and uncertainty of cash flows arising from leases. These disclosures include qualitative and quantitative requirements concerning additional information about the amounts recorded in the financial statements. Under the new guidance, a lessee will be required to recognize assets and liabilities for leases with lease terms of more than 12 months. Consistent with current GAAP, the recognition, measurement, and presentation of expenses and cash flows arising from a lease by a lessee will depend primarily on its classification as a finance or operating lease. However, unlike current GAAP, which requires only capital leases to be recognized on the balance sheet, the new standard will require both types of leases (i.e. operating and finance) to be recognized on the balance sheet. The lessee accounting model prescribed by the new standard will require a finance lease to be accounted for in substantially the same manner as capital leases under existing GAAP. An operating lease will be accounted for in a manner similar to operating leases under existing GAAP, except that lessees will recognize a lease liability and a right-of-use asset on the balance sheet during the lease term. The standard will be effective for financial statements issued for annual periods, and interim periods within these annual periods, beginning after December 15, 2018, with early adoption permitted. See “Credit Facilities and Other Obligations” within Item 2 for the Company’s current lease commitments. The Company plans to use the modified retrospective approach and will elect to initially apply the standard with a cumulative-effect adjustment to the opening balance of retained earnings at the date of adoption. The Company is currently evaluating the effect that implementation will have on its consolidated financial position, results of operations and cash flows. Recently Adopted Standards In May 2014, the FASB issued ASU 2014-09, Revenue—Revenue from Contracts with Customers. The Company has adopted the standard and all related amendments with an effective date of January 1, 2018 using the modified retrospective method, thus recognizing the cumulative effect of adopting the standard as an adjustment to the opening balance of retained earnings. The Company applied the standard to contracts that were not completed as of the adoption date. Comparative information has not been restated and continues to be reported under the accounting standards in effect for the periods prior to the effective date. As a result of the adoption, effective January 1, 2018, the Company began including the costs of painting activities as performance obligations within each contract, which results in a delay in recognition of revenue until such activities are complete and the product is shipped. With the exception of certain extended service contracts on a small percentage of units sold, the Company’s performance obligations are complete and sales revenue is recognized when products are shipped from the Company’s facilities. We do not anticipate the adoption of the standard to have a material impact on an ongoing basis to the Company’s consolidated financial statements and related disclosures. The cumulative effect adjustment to the consolidated balance sheets as of January 1, 2018 was as follows: Balance at Cumulative Effect Balance at Assets Accounts Receivable, net $ 132,699 $ (2,496 ) $ 130,203 Inventories, net 68,567 1,996 70,563 Liabilities and Shareholders' Equity Accrued Liabilities 22,001 (176 ) 21,825 Accumulated Surplus 55,580 (324 ) 55,256 In accordance with the new revenue standard requirements, the impact of the adoption to the consolidated statement of income during the three and six months ended June 30, 2018 and the consolidated balance sheets as of June 30, 2018 was as follows: Three Months Ended June 30, 2018 As Reported Balances Without Effect of Adoption Statement of Income Revenues Net Sales $ 176,888 $ 176,855 $ 33 Costs and Expenses Costs of Operations 155,609 155,583 26 Income Tax Provision 2,890 2,864 26 Net Income 7,600 7,619 (19 ) Six Months Ended June 30, 2018 As Reported Balances Without Effect of Adoption Statement of Income Revenues Net Sales $ 336,048 $ 336,890 $ (842 ) Costs and Expenses Costs of Operations 296,342 297,016 (674 ) Income Tax Provision 5,553 5,588 (35 ) Net Income 14,270 14,403 (133 ) June 30, 2018 As Reported Balances Without Effect of Adoption Balance Sheet Assets Accounts Receivable, net $ 148,023 $ 148,865 $ (842 ) Inventories, net 81,219 80,545 674 Liabilities and Shareholders’ Equity Accrued Liabilities 26,729 26,764 (35 ) Accumulated Surplus 65,752 65,885 (133 ) As a result of the adoption, we changed our accounting policy. See Note 4 for further information. In January 2017, the FASB issued ASU No. 2017-04, Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. The standard eliminates the second step in the goodwill impairment test which required an entity to determine the implied fair value of the reporting unit’s goodwill. Instead, an entity will now recognize an impairment loss if the carrying value of the net assets assigned to the reporting unit exceeds the fair value of the reporting unit, with the impairment loss not to exceed the amount of goodwill allocated to the reporting unit. The Company elected to adopt the standard in the first quarter of 2018, with an effective date of January 1, 2018. The adoption of this guidance did not have a material impact on its consolidated financial statements and related disclosures. In May 2017, the FASB amended the requirements in the Compensation—Stock Compensation Topic of the ASC related to changes to the terms or conditions of a share-based payment award. The amendments provide guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting. The Company adopted the amendments in the first quarter of 2018, with an effective date of January 1, 2018. The adoption of this guidance did not have a material impact on the Company’s financial statements and related disclosures. |
RECENT ACCOUNTING PRONOUNCEME18
RECENT ACCOUNTING PRONOUNCEMENTS (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
Schedule of adoption to reported results | Balance at Cumulative Effect Balance at Assets Accounts Receivable, net $ 132,699 $ (2,496 ) $ 130,203 Inventories, net 68,567 1,996 70,563 Liabilities and Shareholders' Equity Accrued Liabilities 22,001 (176 ) 21,825 Accumulated Surplus 55,580 (324 ) 55,256 Three Months Ended June 30, 2018 As Reported Balances Without Effect of Adoption Statement of Income Revenues Net Sales $ 176,888 $ 176,855 $ 33 Costs and Expenses Costs of Operations 155,609 155,583 26 Income Tax Provision 2,890 2,864 26 Net Income 7,600 7,619 (19 ) Six Months Ended June 30, 2018 As Reported Balances Without Effect of Adoption Statement of Income Revenues Net Sales $ 336,048 $ 336,890 $ (842 ) Costs and Expenses Costs of Operations 296,342 297,016 (674 ) Income Tax Provision 5,553 5,588 (35 ) Net Income 14,270 14,403 (133 ) June 30, 2018 As Reported Balances Without Effect of Adoption Balance Sheet Assets Accounts Receivable, net $ 148,023 $ 148,865 $ (842 ) Inventories, net 81,219 80,545 674 Liabilities and Shareholders’ Equity Accrued Liabilities 26,729 26,764 (35 ) Accumulated Surplus 65,752 65,885 (133 ) |
REVENUE (Tables)
REVENUE (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of disaggregation of revenue by the geographic region for customers | For the Three Months Ended For the Six Months Ended 2018 2017 2018 2017 Net Sales: North America $ 143,137 $ 137,354 $ 274,781 $ 268,031 Foreign 33,751 15,735 61,267 33,991 $ 176,888 $ 153,089 $ 336,048 $ 302,022 |
INVENTORIES (Tables)
INVENTORIES (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Inventory Disclosure [Abstract] | |
Schedule of inventories, net of reserves | June 30, December 31, Chassis $ 7,037 $ 7,525 Raw materials 38,399 30,109 Work in process 12,415 13,521 Finished goods 23,368 17,412 $ 81,219 $ 68,567 |
RECENT ACCOUNTING PRONOUNCEME21
RECENT ACCOUNTING PRONOUNCEMENTS (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Jan. 01, 2018 | Dec. 31, 2017 |
Assets | |||
Accounts Receivable, net | $ 148,023 | $ 132,699 | |
Inventories, net | 81,219 | 68,567 | |
Liabilities and Shareholders' Equity | |||
Accrued Liabilities | 26,729 | 22,001 | |
Accumulated Surplus | $ 65,752 | $ 55,580 | |
ASU 2014-09 | Cumulative Effect Adjustment | |||
Assets | |||
Accounts Receivable, net | $ (2,496) | ||
Inventories, net | 1,996 | ||
Liabilities and Shareholders' Equity | |||
Accrued Liabilities | (176) | ||
Accumulated Surplus | (324) | ||
ASU 2014-09 | Balance at January 1, 2018 | |||
Assets | |||
Accounts Receivable, net | 130,203 | ||
Inventories, net | 70,563 | ||
Liabilities and Shareholders' Equity | |||
Accrued Liabilities | 21,825 | ||
Accumulated Surplus | $ 55,256 |
RECENT ACCOUNTING PRONOUNCEME22
RECENT ACCOUNTING PRONOUNCEMENTS (Details 1) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Statement of Income | ||||
Net Sales | $ 176,888 | $ 153,089 | $ 336,048 | $ 302,022 |
Costs and Expenses | ||||
Costs of Operations | 155,609 | 135,486 | 296,342 | 269,024 |
Income Tax Provision | 2,890 | 3,267 | 5,553 | 5,415 |
Net Income | 7,600 | $ 5,425 | 14,270 | $ 9,264 |
ASU 2014-09 | Balances Without Adoption of ASU 2014-09 | ||||
Statement of Income | ||||
Net Sales | 176,855 | 336,890 | ||
Costs and Expenses | ||||
Costs of Operations | 155,583 | 297,016 | ||
Income Tax Provision | 2,864 | 5,588 | ||
Net Income | 7,619 | 14,403 | ||
ASU 2014-09 | Effect of Adoption Increase/(Decrease) | ||||
Statement of Income | ||||
Net Sales | 33 | (842) | ||
Costs and Expenses | ||||
Costs of Operations | 26 | (674) | ||
Income Tax Provision | 26 | (35) | ||
Net Income | $ (19) | $ (133) |
RECENT ACCOUNTING PRONOUNCEME23
RECENT ACCOUNTING PRONOUNCEMENTS (Details 2) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Assets | ||
Accounts Receivable, net | $ 148,023 | $ 132,699 |
Inventories, net | 81,219 | 68,567 |
Liabilities and Shareholders' Equity | ||
Accrued Liabilities | 26,729 | 22,001 |
Accumulated Surplus | 65,752 | $ 55,580 |
ASU 2014-09 | Balances Without Adoption of ASU 2014-09 | ||
Assets | ||
Accounts Receivable, net | 148,865 | |
Inventories, net | 80,545 | |
Liabilities and Shareholders' Equity | ||
Accrued Liabilities | 26,764 | |
Accumulated Surplus | 65,885 | |
ASU 2014-09 | Effect of Adoption Increase/(Decrease) | ||
Assets | ||
Accounts Receivable, net | (842) | |
Inventories, net | 674 | |
Liabilities and Shareholders' Equity | ||
Accrued Liabilities | (35) | |
Accumulated Surplus | $ (133) |
BASIC AND DILUTED INCOME PER 24
BASIC AND DILUTED INCOME PER SHARE (Detail Textuals) - shares | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Outstanding stock options included in the calculation of diluted EPS | 9,000 | 18,000 | 9,000 | 24,000 |
Stock options | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from computation of earnings per share | 0 | 0 | 0 | 0 |
REVENUE (Details)
REVENUE (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Disaggregation of Revenue [Line Items] | ||||
Net Sales | $ 176,888 | $ 153,089 | $ 336,048 | $ 302,022 |
North America | ||||
Disaggregation of Revenue [Line Items] | ||||
Net Sales | 143,137 | 137,354 | 274,781 | 268,031 |
Foreign | ||||
Disaggregation of Revenue [Line Items] | ||||
Net Sales | $ 33,751 | $ 15,735 | $ 61,267 | $ 33,991 |
REVENUE (Detail Textuals)
REVENUE (Detail Textuals) - USD ($) $ in Thousands | Jun. 30, 2018 | Jan. 01, 2018 |
Revenue from Contract with Customer [Abstract] | ||
Contract liability balances related to extended service contracts | $ 708 | $ 154 |
INVENTORIES - Summary of invent
INVENTORIES - Summary of inventories, net of reserves (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Inventory Disclosure [Abstract] | ||
Chassis | $ 7,037 | $ 7,525 |
Raw materials | 38,399 | 30,109 |
Work in process | 12,415 | 13,521 |
Finished goods | 23,368 | 17,412 |
Inventories | $ 81,219 | $ 68,567 |
LONG-TERM OBLIGATIONS (Detail T
LONG-TERM OBLIGATIONS (Detail Textuals) € in Thousands, $ in Thousands | 1 Months Ended | 6 Months Ended | ||
Nov. 30, 2017EUR (€) | Jun. 30, 2018USD ($) | Dec. 31, 2017USD ($) | Apr. 05, 2017USD ($) | |
First Tennessee Bank National Association ("First Tennessee") | Credit Facility | ||||
Line of Credit Facility [Line Items] | ||||
Revolving credit facility | $ 50,000 | |||
Description of reference rate basis | LIBOR Rate plus 1.50 | |||
Outstanding borrowings under credit facility | $ 15,000 | $ 10,000 | ||
Maturity date | May 31, 2020 | |||
First Tennessee Bank National Association ("First Tennessee") | Credit Facility | Minimum | ||||
Line of Credit Facility [Line Items] | ||||
Non-usage fee for current loan agreement in annual amount percentage | 0.15% | |||
First Tennessee Bank National Association ("First Tennessee") | Credit Facility | Maximum | ||||
Line of Credit Facility [Line Items] | ||||
Non-usage fee for current loan agreement in annual amount percentage | 0.35% | |||
Jige International S.A. | Banque Europeenne du Credit Mutuel | ||||
Line of Credit Facility [Line Items] | ||||
Unsecured fixed rate loan | € | € 1,000 | |||
Maturity date | Sep. 30, 2020 | |||
Interest rate per annum | 0.30% | |||
Outstanding borrowings under loan agreement | $ 968 | 606 | ||
Long-term obligations | 582 | 212 | ||
Long-term obligations due within one year | $ 386 | $ 394 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Detail Textuals) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2018 | Dec. 31, 2017 | |
Long-term Purchase Commitment [Line Items] | ||
Maximum repurchase collateral amount | $ 52,379 | $ 54,093 |
Capital Addition Purchase Commitments | ||
Long-term Purchase Commitment [Line Items] | ||
Commitment for construction and acquisition of property, plant and equipment | $ 5,586 |
INCOME TAXES (Detail Textuals)
INCOME TAXES (Detail Textuals) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2018 | Dec. 31, 2017 | Mar. 31, 2018 | |
Income Tax Disclosure [Abstract] | |||
Corporate tax rate | 21.00% | 35.00% | |
Noncurrent taxes payable | $ 1,102 | ||
Deemed repatriation liability | $ 0 | $ 1,335 | |
State net operating loss carryforward | $ 849 |
SHAREHOLDERS EQUITY (Detail Tex
SHAREHOLDERS EQUITY (Detail Textuals) - USD ($) $ / shares in Units, $ in Thousands | Aug. 06, 2018 | Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 |
Stockholders Equity Note [Line Items] | |||||
Quarterly cash dividends | $ 2,049 | $ 2,048 | $ 4,098 | $ 4,091 | |
Dividend (per share) | $ 0.18 | $ 0.18 | $ 0.36 | $ 0.36 | |
Subsequent Event | |||||
Stockholders Equity Note [Line Items] | |||||
Declared Date | Aug. 6, 2018 | ||||
Dividend (per share) | $ 0.18 | ||||
Payment Date | Sep. 17, 2018 | ||||
Record Date | Sep. 10, 2018 |
SUBSEQUENT EVENT (Detail Textua
SUBSEQUENT EVENT (Detail Textuals) - First Tennessee Bank National Association ("First Tennessee") - Credit Facility - USD ($) $ in Thousands | 6 Months Ended | ||
Jun. 30, 2018 | Jul. 19, 2018 | Apr. 05, 2017 | |
Subsequent Event [Line Items] | |||
Amount of unsecured revolving credit facility | $ 50,000 | ||
Maturity date | May 31, 2020 | ||
Subsequent Event | |||
Subsequent Event [Line Items] | |||
Amount of unsecured revolving credit facility | $ 50,000 |