-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, GdNMeCXub5IWEUfDa4a0NqTbVZiqJwSLuPVXezKcfcrXwqIrtZMjwgTe18OrZR41 UyJsbwobh4vY5O1+xzBRVA== 0000791905-96-000012.txt : 19961113 0000791905-96-000012.hdr.sgml : 19961113 ACCESSION NUMBER: 0000791905-96-000012 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960928 FILED AS OF DATE: 19961112 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: MILLER BUILDING SYSTEMS INC CENTRAL INDEX KEY: 0000791905 STANDARD INDUSTRIAL CLASSIFICATION: PREFABRICATED METAL BUILDINGS & COMPONENTS [3448] IRS NUMBER: 363228778 STATE OF INCORPORATION: DE FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-14651 FILM NUMBER: 96659950 BUSINESS ADDRESS: STREET 1: 58120 COUNTY RD 3 S STREET 2: P O BOX 1283 CITY: ELKHART STATE: IN ZIP: 46517 BUSINESS PHONE: 2192951214 MAIL ADDRESS: STREET 1: 58120 COUNTRY ROAD 3 SOUTH CITY: ELKHART STATE: IN ZIP: 46517 FORMER COMPANY: FORMER CONFORMED NAME: MODULAR TECHNOLOGY INC /DE/ DATE OF NAME CHANGE: 19881120 10-Q 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 Form 10-Q (Mark One) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 28, 1996 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 Number 0-14651 MILLER BUILDING SYSTEMS, INC. (Exact name of registrant as specified in its charter) Delaware 36-3228778 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification Number) 58120 County Road 3 South Elkhart, Indiana 46517 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (219) 295-1214 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 X No Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practical date: Common Shares, Par Value $.01 Per Share 3,102,963 Shares Outstanding at November 8, 1996 The index to Exhibits is at page 13 in the sequential numbering system. Total pages: 14 MILLER BUILDING SYSTEMS, INC. CONTENTS Pages Part I. Financial Information Item 1. Financial Statements Condensed Consolidated Balance Sheets 3-4 Condensed Consolidated Statements of Income 5 Condensed Consolidated Statements of Cash Flows 6 Notes to Condensed Consolidated Financial Statements 7-8 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 9-10 Part II. Other Information Item 4. Submission of Matters to a Vote of Security Holders 11 Item 6. Exhibits and Reports on Form 8-K 11 Signatures 12 Index to Exhibits 13 Part I. Financial Information Item 1. Financial Statements MILLER BUILDING SYSTEMS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS September 28, June 29, 1996 1996 ASSETS CURRENT ASSETS: Cash and temporary cash investments $ 111,061 $ 165,329 Receivables 7,440,466 6,749,230 Refundable income Taxes 14,844 241,158 Inventories 3,834,235 3,541,000 Deferred income taxes 252,000 252,000 Other current assets 137,905 83,087 TOTAL CURRENT ASSETS 11,790,511 11,031,804 PROPERTY, PLANT AND EQUIPMENT, at cost 11,523,277 10,401,137 Less, Accumulated depreciation and amortization 4,767,613 4,627,438 6,755,664 5,773,699 OTHER ASSETS, net 101,778 114,855 TOTAL ASSETS $18,647,953 $16,920,358 See notes to condensed consolidated financial statements. MILLER BUILDING SYSTEMS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS September 28, June 29, 1996 1996 LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Short-term borrowings $ 1,000,000 $ 1,500,000 Current maturities of long-term debt and capitalized lease obligations 487,900 115,000 Accounts payable 3,215,238 2,291,448 Accrued income taxes 344,450 79,438 Accrued expenses and other 931,168 974,698 Accrued nonrecurring items 122,721 129,167 TOTAL CURRENT LIABILITIES 6,101,477 5,089,751 LONG-TERM DEBT AND CAPITALIZED LEASE OBLIGATIONS, less current maturities 1,476,100 1,270,000 DEFERRED INCOME TAXES 136,000 136,000 OTHER 20,019 20,019 TOTAL LIABILITIES 7,733,596 6,515,770 STOCKHOLDERS' EQUITY: Common stock, $.01 par value 40,235 40,235 Additional paid-in capital 11,454,903 11,454,903 Retained earnings 2,551,787 2,048,824 14,046,925 13,543,962 Less, Treasury stock, at cost 3,132,568 3,139,374 TOTAL STOCKHOLDERS' EQUITY 10,914,357 10,404,588 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $18,647,953 $16,920,358 See notes to condensed consolidated financial statements. MILLER BUILDING SYSTEMS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF INCOME Three Months Ended September 28, September 30, 1996 1995 Net sales $13,036,388 $10,072,148 Costs and expenses: Cost of products sold 10,717,582 8,203,908 Selling, general and administrative 1,484,284 1,422,103 Interest expense 50,618 37,704 Other income, principally interest (29,865) (753) INCOME BEFORE INCOME TAXES 813,769 409,186 Income taxes 309,000 156,000 NET INCOME $ 504,769 $ 253,186 Earnings per share of common stock $ .15 $ .08 Weighted average number of common shares and equivalents outstanding 3,272,244 3,106,001 See notes to the condensed consolidated financial statements. MILLER BUILDING SYSTEMS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS Three Months Ended September 28, September 30, 1996 1995 Net cash provided by operating activities $ 983,872 $ 1,118,398 Cash flows (used in) investing activities: Purchase of property, plant and equipment (143,140) (97,115) Cash flows provided by (used in) financing activities: Proceeds from short-term borrowings 4,820,000 2,450,000 Payments on short-term borrowings (5,320,000) (3,730,000) Payments of long-term debt and capitalized lease obligations (400,000) (26,563) Proceeds from exercise of stock options 5,000 - Net cash (used in) financing activities (895,000) (1,306,563) Decrease in cash and temporary cash investments (54,268) (285,280) Cash and temporary cash investments: Beginning of period 165,329 351,860 End of period $ 111,061 $ 66,580 Noncash investing and financing activities: Building capitalized under capital lease and the related capital obligation $ 979,000 $ - See notes to condensed consolidated financial statements. MILLER BUILDING SYSTEMS, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS Note A - BASIS OF PRESENTATION AND OPINION OF MANAGEMENT The accompanying condensed consolidated financial statements include the accounts of Miller Building Systems, Inc. and its subsidiaries (individually and collectively referred to herein as "Miller"). The unaudited interim condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and, therefore, do not include all information and disclosures necessary for a fair presentation of consolidated financial position, results of operations and cash flows in conformity with generally accepted accounting principles. In the opinion of management, the information furnished herein includes all adjustments (consisting of normal recurring accruals) necessary to reflect a fair statement of the interim periods presented. Operating results for the interim periods are not necessarily indicative of the results that may be expected for the year ending June 28, 1997. The June 29, 1996 condensed consolidated balance sheet was derived from audited financial statements, but does not include all disclosures required by generally accepted accounting principles. Note B - INVENTORIES Inventories consist of the following: September 28, 1996 June 29, 1995 Raw materials $ 3,406,137 $ 2,875,527 Work in process 395,955 612,016 Finished goods 32,143 53,457 $ 3,834,235 $ 3,541,000 Note C - INCOME TAXES The provision for income taxes includes estimated federal and state income taxes computed using statutory rates in effect with recognition given to various income tax versus financial reporting differences. The provision for income taxes was 38.0% of income before income taxes for the three-months ended September 28, 1996 compared to 38.1% in the comparable three month period of fiscal 1996. Note D - ACQUISITION OF KANSAS FACILITY On August 12, 1996, Miller entered into a ten-year lease agreement with the Board of County Commissioners of Coffey County, Kansas to lease a 155,000 square foot manufacturing facility. The lease agreement provides for payments of $2,500 per month with an option to purchase the building at the end of the lease for a balloon payment of $250,000. The balloon payment can be reduced if certain full-time employee levels are attained during the term of the lease. In connection with the lease agreement, Miller also entered into an agreement with the current tenant of the property, whereby Miller agreed to pay the tenant $750,000, in three installments ($400,000 on August 12, 1996; $300,000 on October 24, 1996; and $50,000 five days after the tenant vacates the premises). Miller has accounted for this transaction as a capital lease whereby Miller recorded the leased property under the capital lease and the related obligations on its balance sheet. Note E - SALE OF CALIFORNIA OPERATION On October 21, 1996, Miller Structures, Inc.("Seller"), an Indiana corporation and a wholly owned subsidiary of Miller, sold all of its issued and outstanding stock of its wholly owned subsidiary, Miller Structures, Inc.,("Company") a California corporation, to MODTECH, Inc.("Buyer"). The sale was made pursuant to an Agreement for Purchase and Sale of all of the outstanding Capital Stock of Miller Structures, Inc., a Non-Competition Agreement and the Supplemental Closing Agreement. The consideration paid by the Buyer to the Seller consists of a cash purchase price of $1,606,022 less $82,000 pending the resolution of a dispute over the valuation of inventories. Seller and Buyer also entered into a three-year lease obligation for certain real property ("Property") which lease agreement requires the Buyer, as lessee, to pay Seller rental payments of $4,500 per month. The lease obligation is subject to cancellation if an expanded environmental report on the Property is performed and is satisfactory to Buyer. Upon the issuance of an acceptable expanded environmental report, Seller and Buyer will mutually agree to cancel the lease agreement, and Buyer will acquire the Property from Seller for a cash purchase price of $450,000. The Non-Competition Agreement provides that the Seller will not, at any time within a five-year period following closing, engage in any business that manufactures and markets the products currently manufactured by the Company in the states of California, Nevada and Arizona. Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Financial Condition - September 28, 1996 compared to June 29, 1996 At September 28, 1996, Miller's working capital was $5,689,034 compared to $5,942,053 at June 29, 1996. The working capital ratio at September 28, 1996 was 1.9 to 1 compared to 2.2 to 1 at June 29, 1996. Miller has an unsecured bank credit agreement which provides for advances up to $5,000,000 through November 30, 1996. There was $1,000,000 outstanding under this agreement at September 28, 1996 and $1,500,000 at June 29, 1996. Miller believes operating cash flows and the bank credit agreement are sufficient to meet operating needs. The proceeds from the sale of the California operation (see Note E of Notes to condensed consolidated financial statements) will be used to fund the acquisition of the Kansas facility (see Note D of the Notes to the condensed consolidated financial statements). Results of Operations - Three months ended September 28, 1996 compared to the three months ended September 30, 1995 Net sales increased $2,964,240 during the first quarter of fiscal 1997 or approximately 29.4% from the corresponding quarter in fiscal 1996. The increase in sales volume for the quarter was the result of strong business conditions at all of Millers' operating locations. Net sales at Miller Structures, Inc. ("Structures") increased 29.9% from the first quarter last year. All of the Structures plants participated in significant sales increases. Structures current backlog of business is more than double last years backlog. Net sales at Miller Telecom Services, Inc ("Telecom") increased 28.0% from the first quarter last year. Telecom has increasingly become a more competitive force in the telecommunication shelter business. Management believes the growth at Telecom will continue during the current fiscal year. During the three-month period ended September 28, 1996, cost of products sold was 82.2% of net sales compared to 81.5% for the comparable period of fiscal 1996. Generally, changes in gross profit are a result of varying factors, none of which can be specifically quantified, as product profitability varies in the different geographic regions served by Miller and also as a result of varying product mix. The increase in the cost of products sold percentage for the quarter ended September 28, 1996 is not necessarily indicative of the trend in cost of sales anticipated in future periods. Selling, general and administrative expenses for the three month period ended September 28, 1996, increased 4.4% when compared to the similar period of fiscal 1996. The higher selling, general and administrative expenses was the result of higher salary and wage expenses, partially offset by lower consulting, advertising and moving expenses. As a percentage of net sales, selling, general and administrative expenses for the three-month period ended September 29, 1996, were 11.4%, compared to 14.1% in the comparable three month period in fiscal 1996. Interest expense increased $12,914 to $50,618 during the current three month period compared to the similar period of the prior year. The increase was attributable to higher interest rates and higher levels of debt outstanding. Other income (principally interest income) was $29,865 for the three months ended September 28, 1996 compared to $753 for the three months ended September 30, 1995. The current period's interest income was interest received from the Internal Revenue Service ("IRS") for tax refunds arising from filing amended income tax returns to reflect IRS audit adjustments (timing differences) on prior years' tax filings. The provision for income taxes was 38.0% of income before income taxes for the three-months ended September 28, 1996 compared to 38.1% in the comparable three month period of fiscal 1996. Part II. Other Information ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS (a) Annual Meeting held on November 6, 1996, proxies for which were solicited pursuant to Regulation 14 under the Securities and Exchange Act of 1934, as amended. (c) Matters voted upon at Annual Meeting: Votes Cast 1. Election of Directors For Withheld Edward C. Craig 2,340,105 5,005 Steven F. Graver 2,340,105 5,005 ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits. See Index to Exhibits (b) Reports on Form 8-K There were no reports on Form 8-K filed during the three months ended September 28, 1996. SIGNATURES 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 BUILDING SYSTEMS, INC. (Registrant) DATE: November 11, 1996 \Edward C. Craig Edward C. Craig President and Chief Executive Officer (Principal Executive Officer) \Thomas J. Martini Thomas J. Martini Secretary and Treasurer (Principal Financial and Accounting Officer) MILLER BUILDING SYSTEMS, INC. AND SUBSIDIARIES FORM 10-Q INDEX TO EXHIBITS Number Assigned in Regulation S-K Item 601 Description of Exhibit (11) Statement regarding computation of per share earnings Exhibit 11 MILLER BUILDING SYSTEMS, INC. AND SUBSIDIARIES Statement Regarding Computation of Per Share Earnings Three Months Ended September 28, September 30, 1996 1995 Calculation of primary earnings per common share: Net income $ 504,769 $ 253,186 Shares outstanding, net of treasury shares, at beginning of the fiscal year 3,100,963 3,100,963 Additional shares assuming exercise as of the beginning of the fiscal year of dilutive stock options, based on the treasury stock method using the average market price for the period 169,523 5,038 Weighted average number of shares issued as a result of exercise of stock options 1,758 - Weighted average shares and equivalent shares outstanding 3,272,244 3,106,001 Primary earnings per share: $ .15 $ .08 Fully dilutive earnings per share do not differ materially from primary earnings per share. EX-27 2
5 3-MOS JUN-28-1997 SEP-28-1996 111,061 0 7,440,466 0 3,834,235 11,790,511 11,523,277 4,767,613 18,647,953 6,101,477 1,270,000 0 0 40,235 0 18,647,953 13,036,388 13,036,388 10,717,582 12,201,866 0 0 50,618 813,769 309,000 504,769 0 0 0 504,769 .15 .15
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