SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

 

FORM 10-Q

 

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended October 31, 2016 or

 

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from __________ to ___________

 

Commission File No. 1-5926

 

  MILLER INDUSTRIES, INC.  
  (Exact Name of Registrant as Specified in its Charter)  
 
Florida   59-0996356
(State or Other Jurisdiction of
Incorporation or Organization) 		  (I.R.S. Employer
Identification No.)
 
  1521 N.W. 165th Street, Miami,  Florida  33169  
  (Address of Principal Executive Offices  
 
  (305) 621-0501  
  (Registrant’s telephone number, including area code  
 
  Not Applicable  
  (Former Name, Former Address and Former Fiscal
Year, if Changed Since Last Report) 		 
         

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or of such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing required for the past 90 days.

 

Yes ☐   No ☒

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

 

Yes ☐   No ☒

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer. or a “smaller reporting issuer.” See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer ☐ Accelerated filer ☐ Non-accelerated filer ☐  Smaller reporting company ☒      

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

 

Yes ☐   No ☒

 

The number of shares outstanding of each of the issuer’s classes of common stock, par value $.05 per share, as of October 31, 2016 is 5,000,000 shares.

  

 

 

 

MILLER INDUSTRIES, INC.

FORM 10-Q

October 31, 2016

 

INDEX

 

    Page No.
     
PART I: FINANCIAL INFORMATION  
     
Item 1. Financial Statements  
     
  Balance Sheets dated as of October 31, 2016 and April 30, 2016 2
     
  Statement of Operations – Three Months Ended October 31, 2016 and 2015  4
     
  Statement of Operations –Six Months Ended October 31, 2016 and 2015 5
     
  Statement of Cash Flows - Six Months Ended October 31, 2016 and 2015 6
     
  Notes to Financial Statements 7
     
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 8
     
Item 3. Quantitative and Qualitative Disclosures about Market Risk 9
     
Item 4. Controls and Procedures 9
     
PART II: OTHER INFORMATION  
     
Item 6. Exhibits 10
     
Signatures   11

 

    i  

 

 

MILLER INDUSTRIES, INC.

 

Balance Sheet

 

October 31, 2016

 

ASSETS

 

    2016  
Investment Property:        
Land   $ 161,443  
Building and Improvements     1,049,908  
Machinery and Equipment     11,106  
Furniture and Fixtures     10,251  
Total Cost   $ 1,232,708  
Less:  Accumulated Depreciation     959,877  
Net Book Value   $ 272,831  
         
Other Assets:        
Cash and Cash Equivalents   $ 1,918,225  
Accounts Receivable        
Prepaid Expenses and Other Assets     34,333  
Deferred Lease Incentive (Net of Accumulated        
Amortization - $ 53,436.69)     1,785  
Deferred Tax     40,416  
Total Other Assets   $ 1,994,759  
         
TOTAL ASSETS   $ 2,267,590  
         
LIABILITIES AND SHAREHOLDERS’ EQUITY        
Liabilities:        
Mortgage and Notes Payable   $ 1,045,320  
Accounts Payable and Accrued Expenses     202,824  
Income Tax Payable     10,810  
Tenant’s Deposits and Advance Rent     80,387  
Total Liabilities   $ 1,339,341  
         
Shareholders’ Equity:        
Common Stock - $.05 par, 5,000,000 shares Authorized; 5,000,000 shares issued and Outstanding   $ 250,000  
Paid-In Capital     1,212,102  
Deficit     (533,853 )
         
Total Shareholders’ Equity   $ 928,249  
         
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY   $ 2,267,590  

 

See Accompanying Notes to Financial Statements.

 

  2  

 

 

MILLER INDUSTRIES, INC.

 

Balance Sheet
April 30, 2016

 

ASSETS

  

  2016  
Investment Property:        
Land   $ 161,443  
Building and Improvements     1,049,908  
Machinery and Equipment     11,106  
Furniture and Fixtures     10,251  
Total Cost   $ 1,232,708  
Less:  Accumulated Depreciation     953,934  
Net Book Value   $ 278,774  
         
Other Assets:        
Cash and Cash Equivalents   $ 1,817,572  
Accounts Receivable     1,049  
Prepaid Expenses and Other Assets     32,590  
Prepaid Income Tax     4,213  
Deferred Lease Incentive (Net of Accumulated Amortization - $ 48,080)     7,142  
Deferred Tax     40,416  
Total Other Assets   $ 1,902,982  
         
TOTAL ASSETS   $ 2,181,756  
         
LIABILITIES AND SHAREHOLDERS’ EQUITY        
Liabilities:        
Mortgage and Notes Payable   $ 1,067,074  
Accounts Payable and Accrued Expenses     198,464  
Income Tax Payable        
Tenant’s Deposits and Advance Rent     76,267  
Total Liabilities   $ 1,341,805  
         
Shareholders’ Equity:        
Common Stock - $.05 par, 5,000,000 shares Authorized; 5,000,000 shares issued and Outstanding   $ 250,000  
Paid-In Capital     1,212,102  
Deficit     (622,151 )
         
Total Shareholders’ Equity   $ 839,951  
         
TOTAL LIABILITIES AND SHAREHOLDERS’EQUITY   $ 2,181,756  

 

See Accompanying Notes to Financial Statements.

 

  3  

 

 

MILLER INDUSTRIES, INC.

 

Statement of Operations

 

For the Three Months Ended October 31, 2016 and 2015

 

    10/31/16     10/31/15  
Revenues:            
Rental Income   $ 153,990     $ 148,344  
Utilities Reimbursement     27,230       25,125  
Other Income     1,682       1,502  
                 
Total Revenues   $ 182,902     $ 174,971  
                 
Expenses:                
Rental Expenses (Except Interest)   $ 85,515     $ 86,511  
Administrative     11,363       15,602  
Interest     7,691       7,871  
                 
Total Expenses   $ 104,569     $ 109,984  
                 
Income Before Tax Provision   $ 78,333     $ 64,987  
                 
Provision for Income Tax:                
Federal Income Tax   $ 28,000     $ 20,000  
State Income Tax     3,700       3,000  
                 
Total Provision for Income Tax   $ 31,700     $ 23,000  
                 
Net Income   $ 46,633     $ 41,987  
                 
Income per Common Share (Basic)   $ .01     $ .01  
                 
Average Shares of Common Stock Outstanding     5,000,000       5,000,000  

 

See Accompanying Notes to Financial Statements.

 

  4  

 

 

MILLER INDUSTRIES, INC.

 

Statement of Operations

 

For the Six Months Ended October 31, 2016 and 2015

 

    10/31/16     10/31/15  
Revenues:            
Rental Income   $ 303,770     $ 297,130  
Utilities Reimbursement     49,629       49,906  
Other Income     3,252       2,951  
                 
Total Revenues   $ 356,651     $ 349,987  
                 
Expenses:                
Rental Expenses (Except Interest)   $ 173,796     $ 176,905  
Administrative     23,652       26,751  
Interest     13,904       14,065  
                 
Total Expenses   $ 211,352     $ 217,721  
                 
Income Before Tax Provision   $ 145,299     $ 132,266  
                 
Provision for Income Tax:                
Federal Income Tax   $ 50,000     $ 41,000  
State Income Tax     7,000       6,000  
                 
Total Provision for Income Tax   $ 57,000     $ 47,000  
                 
Net Income   $ 88,299     $ 85,266  
                 
Income per Common Share (Basic)   $ .01     $ .01  
                 
Average Shares of Common Stock Outstanding     5,000,000       5,000,000  

 

See Accompanying Notes to Financial Statements.

 

  5  

 

 

MILLER INDUSTRIES, INC.

 

Statement of Cash Flows

 

For the Six Months Ended October 31, 2016 and 2015

 

      10/31/16       10/31/15  
Cash Flows from Operating Activities:                
                 
Net Income   $ 88,299     $ 85,266  
Adjustments to Reconcile Net Income to Net Cash                
Provided by (used for) Operating Activities:                
Provision for Bad Debts                
Depreciation     5,943       5,943  
Amortization     5,357       6,551  
Deferred Tax Asset Valuation Adjustment                
Changes in Operating Assets and Liabilities     23,344       53,840  
                 
Net Cash Provided by Operating Activities   $ 122,943     $ 151,600  
                 
Cash Flows from Investing Activities:                
Acquisition of Property, Equipment, and Intangible                
                 
Net Cash (used by) Investing Activities   $     $    
                 
Cash Flows from Financing Activities:                
                 
Principal Payments Under Borrowings   $ (22,290 )   $ (22,290 )
                 
Net Cash Provided by (used by) Financing                
Activities   $ (22,290 )   $ (22,290 )
                 
Net Increase in Cash and Cash                
Equivalents   $ 100,653     $ 129,310  
                 
Cash and Cash Equivalents at the Beginning of Year     1,817,572       1,665,062  
Cash and Cash Equivalents at the End of Quarter   $ 1,918,225     $ 1,794,372  
                 
Additional Cash Flow Information:                
Cash Payments During the Year                
Interest   $ 14,839     $ 15,618  
Income Taxes   $ 41,977     $ 63,458  

 

See Accompanying Notes to Financial Statements.

 

  6  

 

 

MILLER INDUSTRIES, INC.

 

NOTES TO FINANCIAL STATEMENTS

 

OCTOBER 31, 2016

 

Note A – Basis of Presentation

 

The accompanying unaudited financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the six month period ending October 31, 2016 are not necessarily indicative of results that may be expected for the year ended April 30, 2017.

 

For further information refer to the financial statements and footnotes thereto of the Company as of April 30, 2016 and for the year ended April 30, 2016.

 

Note B - Earnings Per Share

 

Basic earnings per share (“EPS”) is computed by dividing net income available to common stockholders by the weighted-average number of common shares outstanding during the period, excluding the effects of any potentially dilutive securities. Diluted EPS gives effect to all dilutive potential of shares of common stock outstanding during the period including stock options or warrants, using the treasury stock method (by using the average stock price for the period to determine the number of shares assumed to be purchased from the exercise of stock options or warrants). Diluted EPS excludes all dilutive potential of shares of common stock if their effect is anti-dilutive.

 

Note C - Use of Estimates

 

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. The most significant estimates included in the preparation of the financial statements are related to income taxes, asset lives, accruals and valuation allowances.

 

Note D – Commitments, Contingent Liabilities, Other Matters and Subsequent Events

 

1.                   On June 1, 2016, the Company entered into a month to month lease agreement for approximately 5,500 square feet at a monthly rental of $3,800.

 

2.                   In April 2015, the FASB issued ASU No. 2015-03, simplifying the presentation of debt issuance costs. ASU 2015-03 is effective for fiscal years beginning after December 15, 2015. Debt issuance costs will be required to be classified as a direct reduction of the debt balances. Amortization of Debt Issuance Costs using the effective interest method with any amortization recorded as part of interest expense. We have adopted the ASU for fiscal years and interim periods beginning May 1, 2016.

 

3.                   A tenant has advised they will not be renewing their lease which will expire on December 31, 2016. Approximate annual rental income of this tenant is $225,000, which will cease on December 31, 2016.

 

  7  

 

 

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 

Results of Operations (Second Quarter of 2017 Fiscal Year compared to Second Quarter of 2016 Fiscal Year and Six Months of 2017 Fiscal Year compared to Six Months of 2016 Fiscal Year)

 

Rental Income . The Company’s results of operations are primarily dependent upon the rental income and expense reimbursement which it receives from leasing space in its building. Rental income is a function of the percentage of the building which is occupied and the level of rental rates. Rental income and expense reimbursement during the second quarter of fiscal 2016 was $173,000, compared to $187,000 in the second quarter of fiscal 2017. Rental income and expense reimbursement during the first two quarters of fiscal 2016 was $347,000, compared to $353,000 during the first two quarters of fiscal 2017.

 

Other Income . The Company generated other income of $1,500 in the second quarter of 2016 and $1,700 in 2017. The Company generated $3,000 in the first two quarters of fiscal year 2016 and $3,200 in the first two quarters of fiscal year 2017. Income in these quarters consisted of interest income and miscellaneous income.

 

Rental Expense (Excluding Interest). The Company incurs rental expense in connection with the l easing of its building. These expenses consist of management fees, insurance, real estate taxes, depreciation and amortization, maintenance and repairs, utility costs and outside services. Rental expenses were $87,000 in the second quarter of 2016 and $86,000 in the second quarter of 2017. Rental expenses were $177,000 in the first two quarters of 2016 and $174,000 in the first two quarters of 2017.

 

Administrative Expenses. The Company’s administrative expenses were $16,000 in the second quarter of 2016 and $11,000 in 2017 and $27,000 in the first two quarters of fiscal years 2016 and $24,000 in 2017.

 

Interest Expense . The Company pays interest on the mortgage loan on its building. Interest expense on the loan was $8,000 in the second quarter of fiscal year 2016 and 2017 and $15,000 in the first two quarters of fiscal year 2016 and 2017.

 

Provision for Income Taxes. The Company had a tax provision of $23,000 for the second quarter of fiscal year 2016 and $32,000 for the second quarters of fiscal year 2017 and $47,000 in the first two quarters of 2016 and $57,000 in 2017.

 

Net Income . As a result of the foregoing factors, the Company had net income of $42,000 in the second quarter of 2016 and $47,000 in the second quarter of 2017 and $85,000 in the first two quarters of 2016 and $89,000 in first two quarters of 2017.

 

Liquidity and Capital Resources

 

The Company’s cash increased by $130,000 during the first six months of fiscal year 2016 compared to an increase of $100,000 during the first six months of fiscal year 2017. As of October 31, 2016, the Company’s cash position was approximately $1,918,000.

 

  8  

 

 

Current Operations

 

The Company operates as a real estate investment and management company. The Company is currently seeking to obtain additional commercial tenants for its existing building.

 

The Company’s principal operating expenses consist of management and professional fees associated with the administration of the Company, interest expense on the Company’s mortgage loan, real estate taxes and insurance.

 

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

 

We are a smaller reporting issuer as defined in Item 10 of Regulation S-K and are not required to report the quantitative and qualitative measures of market risk specified in Item 305 of Regulation S-K.

 

ITEM 4. CONTROLS AND PROCEDURES

 

In connection with the filing of this Form 10-Q, the Company’s Principal Executive Officer and Principal Financial Officer evaluated the effectiveness of the Company’s disclosure controls and procedures as of October 31, 2016. The Company’s Principal Executive Officer and Principal Financial Officer concluded that the Company’s disclosure controls and procedures were effective as of October 31, 2016.

 

There were no changes in the Company’s internal controls over financial reporting that materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting during the fiscal quarter ended October 31, 2016.

 

  9  

 

  

PART II. OTHER INFORMATION

 

ITEM 6. EXHIBITS

 

  (a) Exhibits  
    Exhibit No . Description
    (31.1) Certification of Principal Executive Officer pursuant to Rule 13a-14(a).
    (31.2) Certification of Principal Financial Officer pursuant to Rule 13a-14(a).
    (32.1) Certification of Principal Executive Officer and Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
  (b) Reports on Form 8-K .
    Not applicable.

 

 

  10  

 

  

SIGNATURE

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

    MILLER INDUSTRIES, INC.
     
     
     
Dated:  June 2, 2017   By: /s/  Marc Napolitano
     

Principal Executive Officer and

Principal Financial Officer

 

  11