SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended July 31, 2018
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 NW 165th Street, Miami Gardens, Florida 33169 |
(Address of Principal Executive Offices) |
(305) 621-0501 |
(Registrant’s telephone number, including area code) |
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes ¨ No þ
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer ¨ Accelerated filer ¨ Non-accelerated filer þ Smaller reporting company þ Emerging growth company ¨
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
Yes ¨ No þ
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes ¨ No þ
The number of shares outstanding of each of the issuer’s classes of common stock, par value $.05 per share, as of July 31, 2018 is 5,000,000 shares.
MILLER INDUSTRIES, INC.
FORM 10-Q
July 31, 2018
INDEX
-i- |
PART I. | FINANCIAL INFORMATION |
Item 1. | FINANCIAL STATEMENTS |
BALANCE SHEET
July 31, 2018
(UNAUDITED)
July 31, 2018 | ||||
ASSETS | ||||
Investment Property: | ||||
Land | $ | 161,443 | ||
Building and Improvements | 1,049,908 | |||
Machinery and Equipment | 11,106 | |||
Furniture and Fixtures | 10,251 | |||
Total Cost | $ | 1,232,708 | ||
Less: Accumulated Depreciation | 980,975 | |||
Net Book Value | $ | 251,733 | ||
Other Assets: | ||||
Cash and Cash Equivalents | $ | 2,056,309 | ||
Accounts Receivable | 940 | |||
Prepaid Expenses and Other Assets | 9,109 | |||
Prepaid Income Taxes | 9,196 | |||
Deferred Lease Incentive (Net of Accumulated Amortization - $56,326 in 2018) | 18,758 | |||
Loan Costs, Less Accumulated Amortization of $9,305 | 1,431 | |||
Deferred Tax | 24,671 | |||
Total Other Assets | $ | 2,120,414 | ||
TOTAL ASSETS | $ | 2,372,147 | ||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||
Liabilities: | ||||
Mortgage and Notes Payable | $ | 970,615 | ||
Accounts Payable and Accrued Expenses | 177,083 | |||
Tenant’s Deposits and Advance Rent | 78,059 | |||
Total Liabilities | $ | 1,225,757 | ||
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 | (315,712 | ) | ||
Total Shareholders’ Equity | $ | 1,146,390 | ||
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $ | 2,372,147 |
See Accompanying Notes to Financial Statements.
1 |
BALANCE SHEET
April 30, 2018
April 30, 2018 | ||||
ASSETS | ||||
Investment Property: | ||||
Land | $ | 161,443 | ||
Building and Improvements | 1,049,908 | |||
Machinery and Equipment | 11,106 | |||
Furniture and Fixtures | $ | 10,251 | ||
Total Cost | $ | 1,232,708 | ||
Less: Accumulated Depreciation | 978,004 | |||
Net Book Value | $ | 254,704 | ||
Other Assets: | ||||
Cash and Cash Equivalents | $ | 1,976,520 | ||
Accounts Receivable (Less Allowance for Doubtful Accounts of $0 in 2018) | 1,614 | |||
Prepaid Expenses and Other Assets | 19,057 | |||
Prepaid Income Taxes | 24,446 | |||
Deferred Lease Incentive (Net of accumulated Amortization - $56,326 in 2018) | 18,758 | |||
Loan Costs, Less Accumulated Amortization of $9,035 | 1,700 | |||
Deferred Tax | 25,421 | |||
Total Other Assets | $ | 2,067,516 | ||
TOTAL ASSETS | $ | 2,322,220 | ||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||
Liabilities: | ||||
Mortgage and Notes Payable | $ | 981,760 | ||
Accounts Payable and Accrued Expenses | 147,395 | |||
Tenant’s Deposits and Advance Rent | 93,924 | |||
Total Liabilities | $ | 1,223,079 | ||
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 | (362,961 | ) | ||
Total Shareholders’ Equity | $ | 1,099,141 | ||
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $ | 2,322,220 |
See Accompanying Notes to Financial Statements.
2 |
STATEMENT OF OPERATIONS
FOR THE THREE MONTHS ENDED JULY 31, 2018 AND 2017
(UNAUDITED)
7/31/18 | 7/31/17 | |||||||
Revenues: | ||||||||
Rental Income | $ | 133,601 | $ | 157,472 | ||||
Utilities Reimbursement | 13,407 | 19,970 | ||||||
Other Income | 3,958 | 1,667 | ||||||
Total Revenues | $ | 150,966 | $ | 179,109 | ||||
Expenses: | ||||||||
Rental Expenses (Except Interest) | $ | 66,542 | $ | 72,279 | ||||
Administrative | 11,638 | 11,339 | ||||||
Interest | 9,537 | 6,482 | ||||||
Total Expenses | $ | 87,717 | $ | 90,099 | ||||
Income Before Tax Provision | $ | 63,249 | $ | 89,010 | ||||
Provision (Credit) for Income Tax: | ||||||||
Federal Income Tax | $ | 13,000 | $ | 27,000 | ||||
State Income Tax | 3,000 | 4,000 | ||||||
Total Provision for Income Tax | $ | 16,000 | $ | 31,000 | ||||
Net Income (Loss) | $ | 47,249 | $ | 58,010 | ||||
Income per Common Share (Basic) | $ | .01 | $ | .01 | ||||
Average Shares of Common Stock Outstanding | 5,000,000 | 5,000,000 |
See Accompanying Notes to Financial Statements.
3 |
STATEMENT OF CASH FLOWS
FOR THE THREE MONTHS ENDED JULY 31, 2018 AND 2017
(UNAUDITED)
7/31/18 | 7/31/17 | |||||||
Cash Flows from Operating Activities: | ||||||||
Net Income (Loss) | $ | 47,249 | $ | 58,010 | ||||
Adjustments to Reconcile Net Income to Net Cash Provided by (used for) Operating Activities: | ||||||||
Depreciation | 2,971 | 2,971 | ||||||
Amortization | — | — | ||||||
Changes in Operating Assets and Liabilities | 40,714 | (27,068 | ) | |||||
Net Cash Provided by Operating Activities | $ | 90,934 | $ | 33,913 | ||||
Cash Flows from Investing Activities: | ||||||||
Acquisition of Property, Equipment, and Intangible | $ | (— | ) | $ | (— | ) | ||
Net Cash (used by) Investing Activities | $ | (— | ) | $ | (— | ) | ||
Cash Flows from Financing Activities: | ||||||||
Principal Payments Under Borrowings | $ | (11,145 | ) | $ | (11,145 | ) | ||
Proceeds from Stock option purchase | — | — | ||||||
Net Cash Provided by (used by) Financing Activities | $ | (11,145 | ) | $ | (11,145 | ) | ||
Net Increase in Cash and Cash Equivalents | $ | 79,789 | $ | 22,768 | ||||
Cash and Cash Equivalents at the Beginning of Year | $ | 1,976,520 | $ | 2,007,930 | ||||
Cash and Cash Equivalents at the End of Quarter | $ | 2,056,309 | $ | 2,030,698 | ||||
Additional Cash Flow Information: | ||||||||
Cash Payments During the Year | ||||||||
Interest | $ | 9,268 | $ | 7,753 | ||||
Income Taxes | $ | - | $ | - |
See Accompanying Notes to Financial Statements.
4 |
MILLER
INDUSTRIES, INC.
NOTES TO FINANCIAL STATEMENTS
JULY 31, 2018
(UNAUDITED)
Note A – Basis of Presentation
The accompanying unaudited financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three month period ending July 31, 2018 are not necessarily indicative of results that may be expected for the year ended April 30, 2019.
For further information refer to the financial statements and footnotes thereto of the Company as of April 30, 2018 and for the year ended April 30, 2018.
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
The “Tax Cuts and Jobs Act” was signed into law on December 22, 2017. The “Act” changes the current tax system for corporations, generally beginning with taxable years starting after December 31, 2017. The bill reduces the U.S. corporate tax rate from a graduated set of rates with a maximum of 35 percent tax rate to a flat 21 percent tax rate. Additionally, the bill introduces many changes that impact corporations some of which are the net operating loss deduction subject to annual limitations, interest expense deduction subject to annual limitations, elimination of the alternative minimum tax and immediate expensing of the full cost of qualified property.
5 |
Under U.S. Accounting Standards, Codification Topic 740, Accounting for Income Taxes requires re-measurement of all U.S. deferred income tax assets and liabilities for temporary differences and NOL carryforwards from the current rate of 35 percent to the new corporate rate of 21 percent. The cumulative adjustment will be recognized in income tax expense from continuing operations as a discrete item in the period that includes the enactment date (December 22, 2017).
The Company recorded the re-measurement of its U.S. deferred income tax assets on December 22, 2017 as a reduction in deferred income taxes of approximately $10,000. A similar amount was recognized as income tax expense at December 22, 2017.
In accordance with SFAS (ASC 855-10), Management has performed an evaluation of subsequent events through the date that the financial statements were issued and has determined that it does not have any material subsequent events to disclose in these financials.
6 |
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Results of Operations (First Quarter of 2019 Fiscal Year compared to First Quarter of 2018 Fiscal Year)
Rental Income. The Company’s results of operations are primarily dependent upon the rental income which it receives from leasing space in its building. Rental income is a function of the percentage of the building which is occupied and the level of rental rates. Rental income during the first quarter of 2018 was $157,000, compared to $134,000 in the first quarter of 2019.
Other Income. The Company generated other income of $1,700 in the first quarter of fiscal year 2018 and $4,000 in 2019. Income in these quarters consisted of interest income and miscellaneous income.
Rental Expense (Excluding Interest). The Company incurs rental expense in connection with the leasing of its building. These expenses consist of management fees, insurance, real estate taxes, depreciation and amortization, maintenance and repairs, utility costs and outside services. Rental expenses were $72,000 in the first quarter of 2018 and $67,000 in the first quarter of 2019.
Administrative Expenses. The Company’s administrative expenses were $11,000 in the first quarter of fiscal year 2018 and $11,000 in the first quarter of fiscal year 2019.
Interest Expense. The Company pays interest on the mortgage loan on its building. Interest expense on the loan was $6,500 in the first quarter of fiscal year 2018 and $9,600 in 2019.
Provision for Income Taxes. The Company had a tax provision of $31,000 in the first quarter of fiscal 2018 and $16,000 in the first quarter of 2019.
Net Income. As a result of the foregoing factors, the Company had net income of $58,000 in the first quarter of fiscal 2018 and net income of $47,000 in the first quarter of 2019.
Liquidity and Capital Resources
The Company’s cash increased by $23,000 during the first three months of fiscal year 2018 and $80,000 during the first three months of fiscal year 2019. The Company’s cash position was approximately $2,056,000.
Current Operations
The Company operates as a real estate investment and management company. The Company is currently seeking to obtain additional commercial tenants for its existing building.
The Company’s principal operating expenses consist of management and professional fees associated with the administration of the Company, interest expense on the Company’s mortgage loan, real estate taxes and insurance.
7 |
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
We are a smaller reporting company as defined in Rule 12b-2 and are not required to report the quantitative and qualitative measures of market risk specified in Item 305 of Regulation S-K.
ITEM 4. CONTROLS AND PROCEDURES
In connection with the filing of this Form 10-Q, the Company’s Chief Executive Officer and Chief Financial Officer evaluated the effectiveness of the Company’s disclosure controls and procedures as of July 31, 2018. The Company’s Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures were effective as of July 31, 2018.
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 July 31, 2018.
8 |
ITEM 6. | EXHIBITS |
* Furnished herewith |
9 |
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
MILLER INDUSTRIES, INC. | ||
(Registrant) | ||
Dated: March 15, 2019 | By: | /s/ Marc Napolitano |
Marc Napolitano | ||
Chief Executive Officer | ||
Principal Financial Officer |
10 |
Exhibit 31.1
SECTION 302 CERTIFICATIONS
I, Marc Napolitano, certify that:
1. | I have reviewed this report on Form 10-Q of Miller Industries, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to me by others within those entities, particularly during the period in which this report is being prepared; |
(b) | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of the annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing equivalent functions): |
(a) | all significant deficiencies and material weaknesses in the design or operation of the internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
(b) | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Dated: March 15, 2019 | By: | /s/ Marc Napolitano |
Marc Napolitano, | ||
President, and Chief Executive Officer |
Exhibit 31.2
SECTION 302 CERTIFICATIONS
I, Marc Napolitano, certify that:
1. | I have reviewed this report on Form 10-Q of Miller Industries, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to me by others within those entities, particularly during the period in which this report is being prepared; |
(b) | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of the annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing equivalent functions): |
(a) | all significant deficiencies and material weaknesses in the design or operation of the internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
(b) | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Dated: March 15, 2019 | By: | /s/ Marc Napolitano | |
Marc Napolitano, | |||
Chief Financial Officer |
EXHIBIT 32.1
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION
1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Miller Industries, Inc. (the “Company”) on Form 10-Q for the period ending July 31, 2018 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I Marc Napolitano, Chief Executive Officer and Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:
(1) | The Report fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934; and |
(2) | The information contained in the Report fairly presents in all material respects, the financial condition and results of operations of the Company. |
Dated: March 15, 2019 | |
/s/ Marc Napolitano | |
Marc Napolitano | |
Chief Executive Officer and Chief Financial Officer |