-----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, LDiIhAR6OC77T6/330hiLo7NnUZgEx2ZBSxY/b/0FJFkUZfa2W1HjTQuPBVl/YIQ riqfXeMJyPnf40+eJGPFAg== 0000791905-00-000003.txt : 20000203 0000791905-00-000003.hdr.sgml : 20000203 ACCESSION NUMBER: 0000791905-00-000003 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20000101 FILED AS OF DATE: 20000202 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: SEC FILE NUMBER: 000-14651 FILM NUMBER: 520414 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 January 1, 2000 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 3,194,198 Shares Outstanding at February 2, 2000 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 7-9 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 9-12 Part II. Other Information Item 6. Exhibits and Reports on Form 8-K 12 Signatures 13 Index to Exhibits 14 Part I. Financial Information Item 1. Financial Statements MILLER BUILDING SYSTEMS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS January 1, July 3, 2000 1999 ASSETS CURRENT ASSETS: Cash and cash equivalents $ 2,505,712 $ 55,503 Receivables 10,601,009 12,837,571 Refundable income taxes - 16,200 Inventories 5,571,403 5,502,052 Deferred income taxes 218,000 218,000 Other current assets 249,022 143,984 TOTAL CURRENT ASSETS 19,145,146 18,773,310 PROPERTY, PLANT AND EQUIPMENT, at cost 13,544,412 14,962,620 Less, Accumulated depreciation and amortization 5,788,949 5,731,885 PROPERTY, PLANT AND EQUIPMENT, NET 7,755,463 9,230,735 Deferred compensation plan investments 587,901 417,143 Excess acquisition cost over fair value of acquired net assets, net 4,069,642 4,159,600 Other assets 181,656 194,398 TOTAL ASSETS $31,739,808 $32,775,186 See notes to condensed consolidated financial statements. MILLER BUILDING SYSTEMS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS January 1, July 3, 2000 1999 LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Short-term borrowings $ - $ 2,000,000 Current maturities of long-term debt 786,619 806,119 Accounts payable 4,087,743 3,954,923 Accrued income taxes 75,510 132,635 Accrued expenses and other 1,498,519 1,407,365 TOTAL CURRENT LIABILITIES 6,448,391 8,301,042 Long-term debt, less current maturities 4,767,841 5,276,854 Deferred compensation liabilities 587,901 417,143 Deferred income taxes 310,000 310,000 Other 11,547 13,300 TOTAL LIABILITIES 12,125,680 14,318,339 STOCKHOLDERS' EQUITY: Preferred stock, $1.00 par value - - Common stock, $.01 par value 42,506 42,506 Additional paid-in capital 13,847,920 13,847,920 Retained earnings 10,459,473 8,325,154 24,349,899 22,215,580 Less, Treasury stock, at cost 4,735,771 3,758,733 TOTAL STOCKHOLDERS' EQUITY 19,614,128 18,456,847 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $31,739,808 $32,775,186 See notes to condensed consolidated financial statements. MILLER BUILDING SYSTEMS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF INCOME Three Months Ended January 1, December 26, 2000 1998 Net sales $15,536,362 $16,400,935 Costs and expenses: Cost of products sold 12,861,422 13,594,515 Selling, general and administrative 1,702,290 1,743,263 Gain on sale of property (1,225,828) - Interest expense 91,436 162,994 Other income, principally interest (19,917) - Nonrecurring item 101,391 - INCOME BEFORE INCOME TAXES 2,025,568 900,163 Income taxes 769,000 355,000 NET INCOME $ 1,256,568 $ 545,163 Earnings per share of common stock: Basic $ .38 $ .15 Diluted $ .38 $ .15 Number of shares used in computation of earnings per share: Basic 3,301,814 3,537,624 Diluted 3,340,920 3,612,489 Six Months Ended January 1, December 26, 2000 1998 Net sales $32,419,573 $33,617,032 Costs and expenses: Cost of products sold 26,514,187 27,738,963 Selling, general and administrative 3,610,620 3,559,487 Gain on sale of property and equipment (1,434,157) - Interest expense 206,752 321,084 Other income, principally interest (27,540) (7,228) Nonrecurring item 101,391 - INCOME BEFORE INCOME TAXES 3,448,320 2,004,726 Income taxes 1,310,000 782,000 NET INCOME $ 2,138,320 $ 1,222,726 Earnings per share of common stock: Basic $ .64 $ .35 Diluted $ .63 $ .34 Number of shares used in computation of earnings per share: Basic 3,331,148 3,535,944 Diluted 3,373,687 3,622,127 See notes to condensed consolidated financial statements. MILLER BUILDING SYSTEMS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS Six Months Ended January 1, December 26, 2000 1998 Net cash provided by (used in) operating activities $ 2,666,297 $ (28,967) Cash flows provided by (used in) investing activities: Purchase of property, plant and equipment (212,358) (928,828) Decrease in unexpended industrial revenue bond proceeds - 1,049,763 Proceeds from sale of property and equipment 3,500,000 - Increase in deferred compensation plan investments (170,758) (99,660) Net cash provided by investing activities 3,116,884 21,275 Cash flows provided by (used in) financing activities: Proceeds from short-term borrowings 6,150,000 15,105,000 Reduction of short-term borrowings (8,150,000) (14,805,000) Payments of long-term debt (351,933) (341,506) Purchase of treasury stock (986,039) - Proceeds from exercise of stock options 5,000 43,100 Net cash provided by (used in) financing activities (3,332,972) 1,594 Increase in cash and cash equivalents 2,450,209 (6,098) Cash and cash equivalents: Beginning of period 55,503 111,620 End of period $ 2,505,712 $ 105,522 Noncash investing and financing activities: Issuance of 227,082 shares of common stock in connection with business acquisition $ - $ 2,250,000 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" or the "Company"). 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 July 1, 2000. The Annual Report on Form 10-K for the year ended July 3, 1999 and the Quarterly Report on Form 10-Q for the quarter ended October 2, 1999, should be read in conjunction with these statements. The July 3, 1999 condensed consolidated balance sheet was derived from audited financial statements, but does not include all disclosures required by generally accepted accounting principles. Note B - BUSINESS SEGMENTS Miller has one reportable segment, designing, manufacturing, marketing and servicing factory-built buildings, which includes three product lines: Structures, Telecom and Construction Services. Year- to-Date net sales by product line are as follows: Six Months Ended January 1, 2000 December 26, 1998 Structures $ 13,615,910 $15,083,013 Telecom 17,415,102 17,576,396 Construction Services 1,388,561 957,623 $32,419,573 $33,617,032 Note C - INVENTORIES Inventories consist of the following: January 1, 2000 July 3,1999 Raw materials $ 3,491,809 $ 4,369,472 Work in process 1,834,153 885,957 Finished goods 245,441 246,623 $ 5,571,403 $ 5,502,052 Note D - EARNINGS PER SHARE The number of shares used in the computation of basic and diluted earnings per share are as follows: Three Months Ended January 1, December 26, 2000 1998 Weighted average number of common shares outstanding (used for basic earnings per share) 3,301,814 3,537,624 Effect of dilutive stock options 39,106 74,865 Diluted shares outstanding (used for diluted earnings per share) 3,340,920 3,612,489 Six Months Ended January 1, December 26, 2000 1998 Weighted average number of common shares outstanding (used for basic earnings per share) 3,331,148 3,535,944 Effect of dilutive stock options 42,539 86,183 Diluted shares outstanding (used for diluted earnings per share) 3,373,687 3,622,127 Note E - SALE OF KANSAS ASSETS On August 20, 1999, Miller entered into an Asset Purchase Agreement with Andrew Corporation (the "Buyer") to sell certain assets used in the business operations of its Kansas facility. The Asset Purchase Agreement also provided for the assignment of Miller's lease of its Kansas facility. The purchase price consisted of $3.5 million in cash from the Buyer plus the Buyer's assumption of certain liabilities of the Kansas operation. The $3.5 million consisted of a $1.0 million base purchase price, which was paid at closing on August 20, 1999, and a contingent purchase price of $2.5 million, which was paid by the Buyer to Miller with the assignment and transfer of a lease agreement for the Kansas facility on November 9, 1999. Miller reported pre-tax gains on the sale of certain Kansas assets of $208,329 in the quarter ended October 2, 1999 and $1,225,828 in the quarter ended January 1, 2000. Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS This Report contains certain statements that are "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, as amended. Those statements are dependent on certain risks and uncertainties. Such factors, among others, are the mix between products with varying profit margins, the ability to achieve forecasted production levels through the second half of fiscal 2000, the strength of the economy in the various sections of the country served by the Company, the impact of our competitors on the profitability of our products, the future availability of raw materials, the anticipated adequacy of the Company's operating cash flows and credit facilities to finance operations, capital expenditures and other needs of its business and the ability of the Company, its suppliers and its customers to be year 2000 compliant. Readers are cautioned that reliance on any forward-looking statement involves risks and uncertainties. Forward-looking statements contained herein are based on reasonable assumptions, any of which could prove to be inaccurate given the inherent uncertainties as to the occurrence or nonoccurrence of future events. There can be no assurance that the forward-looking statements contained in this Report will prove to be accurate. The inclusion of a forward-looking statement herein should not be regarded as a representation by the Company that the Company's objectives will be achieved. Financial Condition - January 1, 2000 compared to July 3, 1999 At January 1, 2000, Miller's working capital was $12,696,755 compared to $10,472,268 at July 3, 1999. The working capital ratio was 3.0 to 1 at January 1, 2000 and 2.3 to 1 at July 3, 1999. Miller has an unsecured bank credit agreement which provides for advances up to $8,000,000 through November 30, 2000. There were no outstanding borrowings under this credit agreement at January 1, 2000 compared to $2,000,000 at July 3, 1999. Miller believes operating cash flows and the bank credit agreement are sufficient to meet its operating needs. Results of Operations - Three months ended January 1, 2000 compared to the three months ended December 26, 1998 Net sales for the second quarter of fiscal 2000 declined 5.3% from the corresponding quarter in fiscal 1999. Net sales for the Structures product line ("Structures") decreased 14.3% from the second quarter last year. This decrease was primarily the result of lower sales at the Indiana operation which was prototyping and converting production lines to produce luxury sports suites and the loss of sales at the Kansas operation which was sold on August 20, 1999. Net sales for the Telecom product line ("Telecom") decreased slightly from the second quarter last year. This decrease was primarily the result of lost sales from the Kansas operation, partially offset by increased sales at the United and Pennsylvania Telecom operations. The Structures business remains strong and its third quarter results should be favorably impacted from the full production of the luxury sports suites. The order rate for the Telecom business continues to increase. The Telecom backlog is 56% higher than last year, excluding last year's backlog at the Kansas plant. The current backlogs should provide the basis for Miller to improve fiscal 2000 third quarter sales and earnings over the prior year. We believe United and the Pennsylvania Telecom facility will continue to be strong contributors to Miller's overall profitability during the remainder of fiscal 2000. During the three-month period ended January 1, 2000, cost of products sold was 82.8% of net sales compared to 82.9% for the comparable period of fiscal 1999. This difference is not considered material. Selling, general and administrative expenses for the three-month period ended January 1, 2000 decreased 2.4% when compared to the similar period of fiscal 1999. The lower selling, general and administrative expenses were generally the result of lower administrative expenses at the sold Kansas operation and lower incentive compensation, partially offset by higher group health and prototyping expenses. As a percentage of net sales, selling, general and administrative expenses for the three-month period ended January 1, 2000 were 11.0%, compared to 10.6% in the comparable three-month period in fiscal 1999. During the three-month period ended January 1, 2000, Miller recognized nonrecurring expenses of $101,391 related to costs associated with a discontinued merger opportunity. Interest expense decreased $71,558 to $91,436 during the current three-month period compared to the similar period of the prior year. The decrease was attributable to lower levels of outstanding debt during the period. The provision for income taxes was 38.0% of income before income taxes for the three months ended January 1, 2000 and 39.4% for the comparable three-month period of fiscal 1999. Results of Operations - Six months ended January 1, 2000 compared to the six months ended December 26, 1998 Net sales decreased $1,197,459 during the first six months of fiscal 2000 or approximately 3.6% from the corresponding period in fiscal 1999. Net sales for the Structures product line decreased 9.7% from the first six months last year. This decrease at Structures was primarily the result of lost sales from the sold Kansas facility and lower production levels at the Indiana facility caused by the conversion of the production line to build luxury sports suites. Net sales for the Telecom product line decreased slightly from the first six months last year. This decrease was the primarily the result of lost sales volume from the sale of the Kansas facility, which was partially offset by increased sales at the United and Pennsylvania facilities. During the six-month period ended January 1, 2000, cost of products sold was 81.8% of net sales compared to 82.5% for the comparable period of fiscal 1999. This decrease from the comparable period last year is primarily the result of a higher mix of Telecom products, which carry a higher gross profit than Structures products. Selling, general and administrative expense for the six-month period ended January 1, 2000 increased 1.4% when compared to the similar period of fiscal 1999. The higher selling, general and administrative expense was generally the result of higher group insurance costs, travel expenses, consulting fees and prototyping expense. As a percentage of net sales, selling, general and administrative expenses for the six-month period ended January 1, 2000 were 11.1%, compared to 10.6% in the comparable six-month period in fiscal 1999. Interest expense decreased $114,332 to $206,752 during the current six-month period compared to the similar period of the prior year. The decrease was attributable to lower levels of outstanding debt. The provision for income taxes was 38.0% of income before income taxes for the six months ended January 1, 2000 and 39.0% for the comparable six-month period of fiscal 1999. Year 2000 Compliance Miller has completed the process of identifying, evaluating and implementing changes to its computer programs necessary to address the Year 2000 issue. Miller's current computer hardware and software programs are Year 2000 compliant. Costs related to the Year 2000 issue have been expensed as incurred. Costs incurred to date have been less than $50,000 and management does not believe any material additional costs will be incurred. Miller has not experienced any significant interruption to its operations because of Year 2000 problems. Miller's products do not have Year 2000 readiness issues because they do not contain date-sensitive functions. Miller has completed the process of contacting all third parties with which it has significant relationships, to determine the extent to which Miller could be vulnerable to failure by any of them to be Year 2000 compliant. Miller is not aware of any third parties with a Year 2000 issue that could materially impact Miller's operations, liquidity or capital resources. However, Miller has no means of ensuring that all third parties are Year 2000 compliant and the potential effect of third-party non-compliance is currently not determinable. Miller will continue to devote the resources necessary to ensure that all Year 2000 issues are properly addressed. However, there can be no assurance that all Year 2000 problems will be detected. Part II. Other Information 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 January 1, 2000. 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: February 2, 2000 \Edward C. Craig Edward C. Craig Chairman, 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 (27) Financial Data Schedule EX-27 2
5 6-MOS JUL-01-2000 JAN-01-2000 2,505,712 0 10,601,009 0 5,571,403 19,145,146 13,544,412 5,788,949 31,739,808 6,448,391 3,725,000 0 0 42,506 0 31,739,808 32,419,573 32,419,573 26,514,187 28,971,253 0 0 91,436 3,448,320 1,310,000 2,138,320 0 0 0 2,138,320 .64 .63
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