x
|
QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF
1934
|
For the quarterly period ended |
September
30, 2006
|
o
|
TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF
1934
|
Commission file number |
0-24298
|
MILLER
INDUSTRIES, INC.
|
(Exact
Name of Registrant as Specified in Its
Charter)
|
Tennessee
|
62-1566286
|
|
(State
or Other Jurisdiction of Incorporation or Organization)
|
(I.R.S.
Employer Identification No.)
|
|
8503
Hilltop Drive
Ooltewah,
Tennessee
|
37363
|
|
(Address
of Principal Executive Offices)
|
(Zip
Code)
|
(423)
238-4171
|
(Registrant’s
Telephone Number, Including
Area Code)
|
Large
Accelerated Filer o
|
Accelerated
Filer x
|
Non-Accelerated
Filer o
|
Page
Number
|
|||
3
|
|||
4
|
|||
5
|
|||
6
|
|||
13
|
|||
19
|
|||
|
|||
|
|||
20
|
|||
Risk Factors |
20
|
||
20
|
|||
21
|
September
30, 2006
(Unaudited)
|
December
31, 2005
|
||||||
ASSETS
|
|||||||
CURRENT
ASSETS:
|
|||||||
Cash
and temporary investments
|
$
|
4,550
|
$
|
6,147
|
|||
Accounts
receivable, net of allowance for doubtful accounts of
$2,425 and $1,834 at
September 30, 2006 and
December 31, 2005, respectively |
79,136
|
65,792
|
|||||
Inventories,
net
|
46,559
|
38,318
|
|||||
Prepaid
expenses and other
|
2,285
|
739
|
|||||
Current
assets of discontinued operations held for sale
|
675
|
2,422
|
|||||
Total
current assets
|
133,205
|
113,418
|
|||||
PROPERTY,
PLANT, AND EQUIPMENT, net
|
22,190
|
17,443
|
|||||
GOODWILL,
net
|
11,619
|
11,619
|
|||||
OTHER
ASSETS
|
970
|
1,443
|
|||||
NONCURRENT
ASSETS OF DISCONTINUED OPERATIONS HELD
FOR SALE
|
377
|
647
|
|||||
|
$
|
168,361
|
$
|
144,570
|
|||
LIABILITIES
AND SHAREHOLDERS’ EQUITY
|
|||||||
CURRENT
LIABILITIES:
|
|||||||
Current
portion of long-term obligations
|
$
|
1,586
|
$
|
1,595
|
|||
Accounts
payable
|
53,031
|
45,352
|
|||||
Accrued
liabilities and other
|
10,283
|
9,821
|
|||||
Current
liabilities of discontinued operations held for sale
|
4,831
|
6,244
|
|||||
Total
current liabilities
|
69,731
|
63,012
|
|||||
LONG-TERM
OBLIGATIONS,
less current portion
|
13,805
|
16,803
|
|||||
COMMITMENTS
AND CONTINGENCIES (Notes
5 and 8)
|
|||||||
SHAREHOLDERS’
EQUITY:
|
|||||||
Preferred
stock, $.01 par value; 5,000,000 shares authorized, none
issued or
outstanding
|
-
|
-
|
|||||
Common
stock, $.01 par value; 100,000,000 shares authorized,
11,363,521 and
11,297,474 outstanding at
September 30, 2006 and December 31, 2005, respectively |
114
|
113
|
|||||
Additional
paid-in capital
|
158,787
|
157,996
|
|||||
Accumulated
deficit
|
(75,760
|
)
|
(93,882
|
)
|
|||
Accumulated
other comprehensive income
|
1,684
|
528
|
|||||
Total
shareholders’ equity
|
84,825
|
64,755
|
|||||
$
|
168,361
|
$
|
144,570
|
Three
Months Ended
September
30,
|
Nine
Months Ended
September
30,
|
||||||||||||
2006
|
2005
|
2006
|
2005
|
||||||||||
NET
SALES
|
$
|
107,364
|
$
|
89,480
|
$
|
292,723
|
$
|
259,314
|
|||||
|
|||||||||||||
COSTS
AND EXPENSES:
|
|||||||||||||
Costs
of operations
|
92,228
|
76,051
|
249,582
|
223,426
|
|||||||||
Selling,
general and administrative expenses
|
6,632
|
6,214
|
19,615
|
17,895
|
|||||||||
Interest
expense, net
|
851
|
853
|
2,653
|
3,216
|
|||||||||
Total
costs and expenses
|
99,711
|
83,118
|
271,850
|
244,537
|
|||||||||
INCOME
FROM CONTINUING OPERATIONS BEFORE INCOME TAXES
|
7,653
|
6,362
|
20,873
|
14,777
|
|||||||||
INCOME
TAX PROVISION
|
967
|
910
|
2,761
|
2,055
|
|||||||||
INCOME
FROM CONTINUING OPERATIONS
|
6,686
|
5,452
|
18,112
|
12,722
|
|||||||||
DISCONTINUED
OPERATIONS:
|
|||||||||||||
Loss
from discontinued operations, before taxes
|
-
|
(30
|
)
|
-
|
(110
|
)
|
|||||||
Income
tax provision
|
-
|
-
|
-
|
-
|
|||||||||
Loss
from discontinued operations
|
-
|
(30
|
)
|
-
|
(110
|
)
|
|||||||
NET
INCOME
|
$
|
6,686
|
$
|
5,422
|
$
|
18,112
|
$
|
12,612
|
|||||
BASIC
INCOME PER COMMON SHARE:
|
|||||||||||||
Income
from continuing operations
|
$
|
0.59
|
$
|
0.49
|
$
|
1.60
|
$
|
1.14
|
|||||
Loss
from discontinued operations
|
-
|
-
|
-
|
(0.01
|
)
|
||||||||
Basic
income per common share
|
$
|
0.59
|
$
|
0.49
|
$
|
1.60
|
$
|
1.13
|
|||||
DILUTED
INCOME PER COMMON SHARE:
|
|||||||||||||
Income
from continuing operations
|
$
|
0.58
|
$
|
0.47
|
$
|
1.56
|
$
|
1.11
|
|||||
Loss
from discontinued operations
|
-
|
-
|
-
|
(0.01
|
)
|
||||||||
Diluted
income per common share
|
$
|
0.58
|
$
|
0.47
|
$
|
1.56
|
$
|
1.10
|
|||||
WEIGHTED
AVERAGE SHARES OUTSTANDING:
|
|||||||||||||
Basic
|
11,360
|
11,234
|
11,334
|
11,209
|
|||||||||
Diluted
|
11,577
|
11,505
|
11,589
|
11,447
|
Nine
Months Ended
September
30,
|
|||||||
2006
|
2005
|
||||||
OPERATING
ACTIVITIES:
|
|||||||
Net
income
|
$
|
18,112
|
$
|
12,612
|
|||
Adjustments
to reconcile net income to net cash provided by (used
in) operating
activities:
|
|||||||
Loss
from discontinued operations
|
-
|
110
|
|||||
Depreciation
and amortization
|
2,119
|
2,322
|
|||||
Amortization
of deferred financing costs
|
92
|
293
|
|||||
Provision
for doubtful accounts
|
771
|
480
|
|||||
Stock-based
compensation
|
231
|
-
|
|||||
Issuance
of non-employee director shares
|
75
|
75
|
|||||
Deferred
income tax provision
|
-
|
(49
|
)
|
||||
Changes
in operating assets and liabilities:
|
|||||||
Accounts
receivable
|
(13,391
|
)
|
(15,092
|
)
|
|||
Inventories
|
(7,227
|
)
|
(2,722
|
)
|
|||
Prepaid
expenses and other
|
(1,501
|
)
|
(133
|
)
|
|||
Accounts
payable
|
6,771
|
8,794
|
|||||
Accrued
liabilities and other
|
208
|
2,177
|
|||||
Net
cash provided by operating activities from continuing
operations
|
6,260
|
8,867
|
|||||
Net
cash provided by (used in) operating activities from
discontinued
operations
|
658
|
(1,523
|
)
|
||||
Net
cash provided by operating activities
|
6,918
|
7,344
|
|||||
INVESTING
ACTIVITIES:
|
|||||||
Purchases
of property, plant, and equipment
|
(6,689
|
)
|
(831
|
)
|
|||
Proceeds
from sale of property, plant and equipment
|
91
|
-
|
|||||
Payments
received on notes receivables
|
171
|
164
|
|||||
Net
cash used in investing activities from continuing
operations
|
(6,427
|
)
|
(667
|
)
|
|||
Net
cash provided by investing activities from discontinued
operations
|
25
|
123
|
|||||
Net
cash used in investing activities
|
(6,402
|
)
|
(544
|
)
|
|||
FINANCING
ACTIVITIES:
|
|||||||
Net
borrowings under senior credit facility
|
3,000
|
17,127
|
|||||
Borrowings
under subordinated credit facility
|
-
|
5,707
|
|||||
Payments
under subordinated credit facility
|
(5,000
|
)
|
-
|
||||
Net
payments under former credit facility
|
-
|
(21,401
|
)
|
||||
Payments
on long-term obligations
|
(1,202
|
)
|
(1,558
|
)
|
|||
Borrowings
under long-term obligations
|
168
|
-
|
|||||
Additions
to deferred financing costs
|
(4
|
)
|
(386
|
)
|
|||
Termination
of interest rate swap
|
-
|
57
|
|||||
Proceeds
from the exercise of stock options
|
484
|
486
|
|||||
Net
cash (used in) provided by financing activities from
continuing
operations
|
(2,554
|
)
|
32
|
||||
Net
cash used in financing activities from discontinued
operations
|
-
|
(2,140
|
)
|
||||
Net
cash used in financing activities
|
(2,554
|
)
|
(2,108
|
)
|
|||
EFFECT
OF EXCHANGE RATE CHANGES ON CASH AND TEMPORARY
INVESTMENTS
|
520
|
(277
|
)
|
||||
NET
CHANGE IN CASH AND TEMPORARY INVESTMENTS
|
(1,518
|
)
|
4,415
|
||||
CASH
AND TEMPORARY INVESTMENTS, beginning of period
|
6,147
|
2,812
|
|||||
CASH
AND TEMPORARY INVESTMENTS-DISCONTINUED OPERATIONS, beginning
of
period
|
23
|
574
|
|||||
CASH
AND TEMPORARY INVESTMENTS-DISCONTINUED OPERATIONS, end
of
period
|
102
|
98
|
|||||
CASH
AND TEMPORARY INVESTMENTS, end of period
|
$
|
4,550
|
$
|
7,703
|
|||
SUPPLEMENTAL
DISCLOSURE OF CASH FLOW INFORMATION:
|
|||||||
Cash
payments for interest
|
$
|
2,866
|
$
|
3,032
|
|||
Cash
payments for income taxes
|
$
|
3,044
|
$
|
568
|
September 30,
2006
|
December
31, 2005
|
||||||
Chassis
|
$
|
3,755
|
$
|
2,346
|
|||
Raw
materials
|
18,926
|
16,654
|
|||||
Work
in process
|
14,571
|
10,989
|
|||||
Finished
goods
|
9,307
|
8,329
|
|||||
$
|
46,559
|
$
|
38,318
|
September 30,
2006
|
December
31, 2005
|
||||||
Outstanding
borrowings under Senior Credit Facility
|
$
|
8,250
|
$
|
6,300
|
|||
Outstanding
borrowings under Junior Credit Facility
|
5,000
|
10,000
|
|||||
Mortgage,
equipment and other notes payable
|
2,141
|
2,098
|
|||||
15,391
|
18,398
|
||||||
Less
current portion
|
(1,586
|
)
|
(1,595
|
)
|
|||
$
|
13,805
|
$
|
16,803
|
2007
|
$
|
1,586
|
||
2008
|
9,579
|
|||
2009
|
1,499
|
|||
2010
|
2,725
|
|||
2011
|
2
|
|||
$
|
15,391
|
6.
|
RELATED
PARTY TRANSACTIONS
|
7.
|
STOCK-BASED
COMPENSATION
|
Three
Months
Ended
September
30, 2005
|
Nine
Months
Ended
September 30,
2005
|
||||||
Net
income available to common shareholders, as reported
|
$
|
5,422
|
$
|
12,612
|
|||
Deduct:
Total stock-based employee compensation expense determined
under fair
value based method for all awards, net of related tax
effects
|
(84
|
)
|
(252
|
)
|
|||
Net
income available to common shareholders, pro forma
|
$
|
5,338
|
$
|
12,360
|
|||
Income
per common share:
|
|||||||
Basic,
as reported
|
$
|
0.49
|
$
|
1.13
|
|||
Basic,
pro forma
|
$
|
0.48
|
$
|
1.10
|
|||
Diluted,
as reported
|
$
|
0.47
|
$
|
1.10
|
|||
Diluted,
pro forma
|
$
|
0.46
|
$
|
1.08
|
8. |
COMMITMENTS
AND CONTINGENCIES
|
9. |
INCOME
TAXES
|
10. |
COMPREHENSIVE
INCOME
|
11. |
GEOGRAPHIC
AND CUSTOMER INFORMATION
|
For
the Three Months Ended
September 30,
|
For
the Nine Months Ended September 30,
|
||||||||||||
2006
|
2005
|
2006
|
2005
|
||||||||||
Net
Sales:
|
|||||||||||||
North
America
|
$
|
87,057
|
$
|
71,335
|
$
|
238,109
|
$
|
205,717
|
|||||
Foreign
|
20,307
|
18,145
|
54,614
|
53,597
|
|||||||||
$
|
107,364
|
$
|
89,
480
|
$
|
292,723
|
$
|
259,314
|
September
30, 2006
|
December
31, 2005
|
||||||
Long
Lived Assets:
|
|||||||
North
America
|
$
|
31,138
|
$
|
26,665
|
|||
Foreign
|
2,678
|
2,509
|
|||||
$
|
33,816
|
$
|
29,174
|
12. |
DISCONTINUED
OPERATIONS
|
Three
Months Ended September 30,
2006
|
|
Three
Months Ended September 30, 2005
|
|
||||||||||||||||
|
|
Dist.
|
|
Towing
|
|
Total
|
|
Dist.
|
|
Towing
|
|
Total
|
|||||||
Net
sales
|
$
|
25
|
$
|
-
|
$
|
25
|
$
|
3,238
|
$
|
-
|
$
|
3,238
|
|||||||
Operating
income (loss)
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
(30
|
)
|
$
|
-
|
$
|
(30
|
)
|
|||||
Loss
from discontinued operations
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
(30
|
)
|
$
|
-
|
$
|
(30
|
)
|
Nine
Months Ended September 30, 2006
|
Nine
Months Ended June 30, 2005
|
||||||||||||||||||
Dist.
|
Towing
|
Total
|
Dist.
|
Towing
|
Total
|
||||||||||||||
Net
sales
|
$
|
385
|
$
|
-
|
$
|
385
|
$
|
8,744
|
$
|
-
|
$
|
8,744
|
|||||||
Operating
income (loss)
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
(130
|
)
|
$
|
16
|
$
|
(114
|
)
|
|||||
Loss
from discontinued operations
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
(110
|
)
|
$
|
-
|
$
|
(110
|
)
|
September
30, 2006
|
December
31, 2005
|
||||||||||||||||||
|
Dist.
|
Towing
|
Total
|
Dist.
|
Towing
|
Total
|
|||||||||||||
Cash
and temporary investments
|
$
|
102
|
$
|
-
|
$
|
102
|
$
|
23
|
$
|
-
|
$
|
23
|
|||||||
Accounts
receivable, net
|
166
|
401
|
567
|
1,774
|
401
|
2,175
|
|||||||||||||
Inventories
|
-
|
-
|
-
|
187
|
-
|
187
|
|||||||||||||
Prepaid
expenses and other current assets
|
6
|
-
|
6
|
37
|
-
|
37
|
|||||||||||||
Current
assets of discontinued operations held for sale
|
$
|
274
|
$
|
401
|
$
|
675
|
$
|
2,021
|
$
|
401
|
$
|
2,422
|
|||||||
Property,
plant and equipment
|
$
|
-
|
$
|
377
|
$
|
377
|
$
|
-
|
$
|
647
|
$
|
647
|
|||||||
Noncurrent
assets of discontinued operations held for sale
|
$
|
-
|
$
|
377
|
$
|
377
|
$
|
-
|
$
|
647
|
$
|
647
|
|||||||
Other
current liabilities
|
$
|
48
|
$
|
4,783
|
$
|
4,831
|
$
|
273
|
$
|
5,971
|
$
|
6,244
|
|||||||
Current
liabilities of discontinued operations held for sale
|
$
|
48
|
$
|
4,783
|
$
|
4,831
|
$
|
273
|
$
|
5,971
|
$
|
6,244
|
13. |
RECENT
ACCOUNTING PRONOUNCEMENTS
|
ITEM 2. |
MANAGEMENT’S
DISCUSSION
AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
|
ITEM 4. |
CONTROLS
AND
PROCEDURES
|
ITEM 1. |
LEGAL
PROCEEDINGS
|
ITEM 1A. |
RISK
FACTORS
|
ITEM 6. |
3.1
|
Charter,
as amended, of the Registrant (incorporated by reference
to Exhibit 3.1 to
the Registrant’s Annual Report on Form 10-K, filed with the Commission
on
April 22, 2002)
|
3.2
|
Bylaws
of the Registrant (incorporated by reference to Exhibit
3.2 to the
Registrant’s Registration Statement on Form S-1, filed with the
Commission
in August 1994)
|
31.1
|
Certification
Pursuant to Rules 13a-14(a)/15d-14(a) by Co-Chief Executive
Officer*
|
31.2
|
Certification
Pursuant to Rules 13a-14(a)/15d-14(a) by Co-Chief Executive
Officer*
|
31.3
|
Certification
Pursuant to Rule 13a-14(a)/15d-14(a) by Chief Financial
Officer*
|
32.1
|
Certification
Pursuant to Section 1350 of Chapter 63 of Title 18 of
United States Code
by Co-Chief Executive Officer*
|
32.2
|
Certification
Pursuant to Section 1350 of Chapter 63 of Title 18 of
United States Code
by Co-Chief Executive Officer*
|
32.3
|
Certification
Pursuant to Section 1350 of Chapter 63 of Title 18 of
United States Code
by Chief Financial Officer*
|
MILLER
INDUSTRIES, INC.
By:
/s/ J. Vincent
Mish
J. Vincent Mish
Executive Vice President and Chief Financial
Officer
|