-----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, T8vIcBQ4bV8UQdYyz+yCMZ1x8dJIzWgyqOfSBt8SEQ0cXTbv8epvb+MUp/RvGhXZ yWLtzqCO1KPsoxzX5YkgLg== 0000791905-96-000002.txt : 19960202 0000791905-96-000002.hdr.sgml : 19960202 ACCESSION NUMBER: 0000791905-96-000002 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19951230 FILED AS OF DATE: 19960201 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: 96510126 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 December 30, 1995 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 3,100,963 Shares Outstanding at January 31, 1996 The index to Exhibits is at page 14 in the sequential numbering system. Total pages: 15 MILLER BUILDING SYSTEMS, INC. CONTENTS Pages Part I. Financial Information Item 1. Financial Statements Consolidated Condensed Balance Sheets 3-4 Consolidated Condensed Statements of Operations 5 Consolidated Condensed Statements of Cash Flows 6 Notes to Consolidated Condensed Financial Statements 7-8 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 9-11 Part II. Other Information 12 Signatures 13 Index to Exhibits 14 Part I. Financial Information Item 1. Financial Statements MILLER BUILDING SYSTEMS, INC. AND SUBSIDIARIES CONSOLIDATED CONDENSED BALANCE SHEETS December 30, July 1, 1995 1995 ASSETS CURRENT ASSETS: Cash and temporary cash investments $ 89,100 $ 351,860 Receivables 4,416,402 5,960,110 Inventories 2,736,361 3,533,619 Deferred federal income taxes 320,000 320,000 Other current assets 213,320 126,752 TOTAL CURRENT ASSETS 7,775,183 10,292,341 PROPERTY, PLANT AND EQUIPMENT, at cost 10,338,097 10,110,765 Less, Accumulated depreciation and amortization 4,396,745 4,083,640 5,941,352 6,027,125 OTHER ASSETS, net 205,745 202,166 TOTAL ASSETS $13,922,280 $16,521,632 See notes to consolidated condensed financial statements. MILLER BUILDING SYSTEMS, INC. AND SUBSIDIARIES CONSOLIDATED CONDENSED BALANCE SHEETS December 30, July 1, 1995 1995 LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Short-term borrowings $ - $ 1,550,000 Current maturities of long-term debt 171,095 224,925 Accounts payable 1,560,991 2,074,510 Accrued income taxes 178,310 89,827 Accrued expenses and other 218,502 904,766 Accrued nonrecurring items 152,448 193,857 TOTAL CURRENT LIABILITIES 2,281,346 5,037,885 LONG-TERM DEBT, less current maturities 1,270,000 1,385,000 DEFERRED FEDERAL INCOME TAXES 134,000 134,000 OTHER 45,782 45,782 TOTAL LIABILITIES 3,731,128 6,602,667 STOCKHOLDERS' EQUITY: Common stock, $.01 par value 40,235 40,235 Additional paid-in capital 11,454,903 11,454,903 Retained earnings 1,835,388 1,563,201 13,330,526 13,058,339 Less, Treasury stock, at cost 3,139,374 3,139,374 TOTAL STOCKHOLDERS' EQUITY 10,191,152 9,918,965 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $13,922,280 $16,521,632 See notes to consolidated condensed financial statements. MILLER BUILDING SYSTEMS, INC. AND SUBSIDIARIES CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS Three Months Ended December 30, December 31, 1995 1994 Net sales $ 7,670,294 $ 9,691,497 Costs and expenses: Cost of products sold 6,394,902 8,250,632 Selling, general and administrative 1,220,152 1,225,341 Interest expense 25,239 29,269 Interest income - (4,562) INCOME BEFORE INCOME TAXES 30,001 190,817 Income taxes 11,000 72,000 NET INCOME $ 19,001 $ 118,817 Earnings per share of common stock $ .01 $ .04 Weighted average number of common shares and equivalents outstanding 3,105,349 3,120,883 Six Months Ended December 30, December 31, 1995 1994 Net sales $ 17,742,442 $ 20,929,619 Costs and expenses: Cost of products sold 14,598,810 17,879,470 Selling, general and administrative 2,642,255 2,439,834 Nonrecurring items - (66,000) Interest expense 62,943 46,390 Interest income (753) (7,062) INCOME BEFORE INCOME TAXES 439,187 636,987 Income taxes 167,000 210,000 NET INCOME $ 272,187 $ 426,987 Earnings per share of common stock $ .09 $ .14 Weighted average number of common shares and equivalents outstanding 3,105,674 3,143,471 See notes to the consolidated condensed financial statements. MILLER BUILDING SYSTEMS, INC. AND SUBSIDIARIES CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS Six Months Ended December 30, December 31, 1995 1994 Net cash provided by operating activities $ 1,683,402 $ 234,541 Cash flows (used in) investing activities: Purchase of property, plant and equipment (227,332) (1,510,416) Cash flows provided by (used in) financing activities: Proceeds from short-term borrowing 3,600,000 10,623,000 Payments on short-term borrowing (5,150,000) (10,663,000) Payments of long-term debt (168,830) (49,112) Proceeds from Industrial Revenue Bond - 1,500,000 Proceeds from exercise of stock options - 19,250 Purchase of treasury stock - (260,000) Proceeds from sale of treasury stock - 50,001 Net cash provided by (used in) financing activities (1,718,830) 1,220,139 Decrease in cash and temporary cash investments (262,760) (55,736) Cash and temporary cash investments: Beginning of period 351,860 132,084 End of period $ 89,100 $ 76,348 See notes to consolidated condensed financial statements. MILLER BUILDING SYSTEMS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS Note A - BASIS OF PRESENTATION AND OPINION OF MANAGEMENT The accompanying consolidated condensed financial statements include the accounts of Miller Building Systems, Inc. and its subsidiaries (individually and collectively referred to herein as "Miller"). The unaudited interim consolidated condensed 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 29, 1996. The July 1, 1995 consolidated condensed 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: December 30, 1995 July 1, 1995 Raw materials $ 2,365,902 $ 2,945,366 Work in process 242,763 441,366 Finished goods 127,696 146,887 $ 2,736,361 $ 3,533,619 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 six months ended December 30, 1995 compared to a 33.0% in the comparable six month period of fiscal 1994. During the first quarter of fiscal 1995, Miller reversed $32,000 of previously accrued federal and state income taxes as a result of a settlement of the audit by the Internal Revenue Service. Note D - NONRECURRING ITEMS During the first quarter of fiscal 1995, Miller reversed certain restructuring accruals recorded during the third fiscal quarter of 1993. These reversals included $25,000 for the early release from the Fontana property lease agreement, $23,000 for lower than expected legal costs to settle disputes on the Denver International Airport project at the closed PME Pacific Systems, Inc. ("PME") operations and $18,000 for lower interest expense on the final settlement with the Internal Revenue Service. Note E - PENDING ACQUISITION On November 3, 1995, Miller signed a letter of intent to acquire all of the issued and outstanding common stock of Whitley Manufacturing, Inc., a manufacturer of modular structures. It is anticipated the closing date will occur during Miller's fourth quarter of fiscal year 1996. The acquisition and purchase price are subject to, among other things, due diligence investigations by Miller and negotiation of a definitive purchase agreement. Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Financial Condition - December 30, 1995 compared to July 1, 1995 At December 30, 1995, Miller's working capital was $5,493,837 compared to $5,254,456 at July 1, 1995. The working capital ratio was 3.4 to 1 at December 30, 1995 and 2.0 to 1 at July 1, 1995. Miller has an unsecured bank credit agreement that provides for advances up to $5,000,000 through January 31, 1996. There were no borrowings outstanding under this agreement at December 30, 1995 and $1,550,000 at July 1, 1995. Miller believes operating cash flows and the bank credit agreement are sufficient to meet operating needs. On November 3, 1995, Miller signed a letter of intent to acquire all of the outstanding common stock of Whitley Manufacturing, Inc. (see Note E.). Miller intends to use bank financing and authorized but unissued common shares to finance the acquisition. Results of Operations - Three months ended December 30, 1995 compared to the three months ended December 31, 1994 Net sales decreased $2,021,203 during the second quarter of fiscal 1996 or approximately 20.9% from the corresponding quarter in fiscal 1995. Miller Structures, Inc. ("Structures") recorded a 25.4% or $1,943,004 decrease. During the first and second quarter Structures experienced a significant decrease in order activity which led to the decline in sales volume. The decline in order activity is attributable to high dealer inventories, which caused many dealers to reconfigure buildings versus ordering new, and a general softness in the commercial modular building industry. Management does not believe this decrease in net sales at Structures represents a trend. Miller Telecom Services, Inc. ("Telecom") attained a 67.1% sales increase as this subsidiary continues to increase market share. Management believes Telecom will continue to increase its market share and is positioned to post strong sales increases during the second half of fiscal 1996. During the second quarter of fiscal 1995, net sales at the Structures' Residential division ("Residential"), which was closed in the third quarter of fiscal 1995, were $861,523. During the three-month period ended December 30, 1995, cost of sales was 83.4% of net sales compared to 85.1% for the comparable period of fiscal 1995. 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 because of varying product mix. The decrease in the cost of sales percentage for the quarter ended December 30, 1995 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 December 30, 1995, decreased $5,189 compared to the similar period of fiscal 1995. The slight decrease in selling, general and administrative expenses for the quarter was primarily the result of reduced expenses related to the closed Structures' Residential division and overall lower administrative expense at Structures, partially offset by higher administrative costs to support the growth at Telecom. During the quarter, approximately $38,000 in major program costs for marketing and plant efficiency programs were expensed. As a percentage of net sales, selling, general and administrative expenses for the three-month period ended December 30, 1995 were 15.9%, on lower sales volume, compared to 12.6% in the comparable three-month period in fiscal 1995. Interest expense decreased $4,030 to $25,239 during the current three-month period compared to the similar period in the prior year. The decrease during the quarter was a result of lower average levels of debt outstanding on the line of credit and lower interest rates on the debt converted to the Industrial Revenue Bonds. The provision for income taxes was 36.7% before income taxes for the three months ended December 30, 1995 compared to a 37.7% provision in the comparable three-month period of fiscal 1995. The difference is not considered material. Results of Operations - Six months ended December 30, 1995 compared to six months ended December 31, 1994 Net sales decreased $3,187,177 for the six-month period ended December 30, 1995 or 15.2% compared to the similar period of fiscal 1994. Net sales at Structures decreased 19.9% from the six-month period last year. The sales decline was the result of slowing business activity in the commercial modular building industry. Net sales at Telecom increased 95.4% over the same period last year. Telecom continues to increase market share and improve its position in the rapidly expanding telecommunication markets. During the first six months of fiscal 1995, net sales at Residential, which was closed in the third quarter of fiscal 1995, were $1,940,286. During the three-month period ended December 31, 1994, cost of sales was 82.3% of net sales compared to 85.4% for the comparable period of fiscal 1994. 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. Selling, general and administrative expenses for the six-month period ended December 30, 1995, increased $202,422 compared to the similar period of fiscal 1995. Lower selling, general and administrative expenses at the closed Residential division was offset by increased administrative costs related to the growth at Telecom and increased staffing in the Structures' sales, costing and engineering departments. In addition, approximately $108,000 in major program costs for marketing, research and development, and plant efficiency programs were expensed during the current six month period. As a percentage of net sales, selling general and administrative expenses for the six-month period ended December 30, 1995 were 14.9%, on lower sales volume, compared to 11.7% in the comparable six-month period in fiscal 1995. During the first quarter of fiscal year 1995, nonrecurring items of $66,000 resulted from the reversal of certain accruals related to an early release from the Fontana property lease agreement, lower than expected legal costs to settle disputes on the Denver International Airport project and lower interest expense for a settlement with the Internal Revenue Service. Interest expense increased $16,553 to $62,943 during the current six- month period compared to the similar period of the prior year. The increase was attributable to interest paid on the Industrial Revenue Bonds which funded the Telecom plant expansion, partially offset by lower levels of outstanding debt on the line of credit. The provision for income taxes was 38.0% of income before income taxes for the six-month period ended December 30, 1995 compared to a provision of 33.0% in the comparable six-month period of fiscal 1994. During the first quarter of fiscal 1995, Miller reversed $32,000 of previously accrued federal and state income taxes as a result of the final settlement of the audit by the Internal Revenue Service. 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 December 30, 1995. 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 1, 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 Six Months Ended December December December December 1995 1994 1995 1994 Calculation of primary earnings per common share: Net income $ 19,001 $ 118,817 $ 272,187 $ 426,988 Shares outstanding, net of treasury shares, at beginning of period 3,100,963 3,093,963 3,100,963 3,158,578 Average number of shares arising from the exercise of stock options - 4,109 - 2,054 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 4,386 22,811 4,711 23,909 Average number of shares from the sale of treasury stock - - - 11,539 Average number of shares purchased as treasury stock - - - (52,609) Weighted average shares and equivalent shares outstanding 3,105,349 3,120,883 3,105,674 3,143,471 Primary earnings per share: $ .01 $ .04 $ .09 $ .14 Fully dilutive earnings per share do not differ from primary earnings per share. EX-27 2 WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
5 6-MOS JUN-29-1996 DEC-30-1995 89,100 0 4,416,402 0 2,736,361 7,775,183 10,338,097 4,396,745 13,922,280 2,281,346 1,270,000 0 0 40,235 0 17,742,442 17,742,442 14,598,810 17,241,065 0 0 62,943 439,187 167,000 272,187 0 0 0 272,187 .09 .09
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