UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 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	March 31, 2022


☐	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	001-14124

MILLER INDUSTRIES, INC.

(Exact name of registrant as specified in its charter)

Tennessee		62-1566286
(State or other jurisdiction of incorporation or		(I.R.S. Employer Identification No.)
organization)

8503 Hilltop Drive
Ooltewah, Tennessee		37363
(Address of principal executive offices)		(Zip Code)

(423) 238-4171

(Registrant’s telephone number, including area code)

Not Applicable

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:


Title of Each Class	Trading Symbol	Name of Each Exchange on Which Registered
Common Stock, par value $0.01 per share	MLR	New York Stock Exchange

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 ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes ☒ No ☐

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 ☐	Smaller reporting company ☐

	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 is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐ No ☒

The number of shares outstanding of the registrant’s common stock, par value $.01 per share, as of April 29, 2022 was 11,416,716.

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Index


			Page Number
PART I	FINANCIAL INFORMATION

	Item 1.	Financial Statements

		Condensed Consolidated Balance Sheets as of March 31, 2022 and December 31, 2021	3

		Condensed Consolidated Statements of Income for the Three Months Ended March 31, 2022 and 2021	4

		Condensed Consolidated Statements of Comprehensive Income for the Three Months Ended March 31, 2022 and 2021	5

		Condensed Consolidated Statements of Shareholders’ Equity for the Three Months Ended March 31, 2022 and 2021	6

		Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2022 and 2021	7

		Notes to Condensed Consolidated Financial Statements	8

	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	14

	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	17

	Item 4.	Controls and Procedures	18

PART II		OTHER INFORMATION

	Item 1.	Legal Proceedings	18

	Item 1A.	Risk Factors	18

	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	18

	Item 3.	Defaults Upon Senior Securities	18

	Item 4.	Mine Safety Disclosures	18

	Item 5.	Other Information	19

	Item 6.	Exhibits	20

SIGNATURES			22

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FORWARD-LOOKING STATEMENTS

Certain statements in this Quarterly Report on Form 10-Q, including but not limited to statements made in Part I, Item 2–“Management’s Discussion and Analysis of Financial Condition and Results of Operations,” statements made with respect to future operating results, expectations of future customer orders and the availability of resources necessary for our business may be deemed to be forward-looking statements, as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by the use of words such as “may,” “will,” “should,” “could,” “continue,” “future,” “potential,” “believe,” “project,” “plan,” “intend,” “seek,” “estimate,” “predict,” “expect,” “anticipate” and similar expressions, or the negative of such terms, or other comparable terminology. Forward-looking statements also include the assumptions underlying or relating to any of the foregoing statements. Such forward-looking statements are made based on our management’s beliefs as well as assumptions made by, and information currently available to, our management. Our actual results may differ materially from the results anticipated in these forward-looking statements due to, among other things:

●

changes in price, delivery delays and decreased availability of component parts, chassis and raw materials, including aluminum, steel, petroleum-related products, including as a result of increased demand due to improving market conditions, general inflation, the war in Ukraine, the impact of the COVID-19 pandemic and supply chain difficulties;

●

economic and market conditions, including the negative impacts on the Company’s customers, suppliers and employees from increasing inflationary pressures, geopolitical uncertainties and the continuing negative impacts of the COVID-19 pandemic;

●

our dependence upon outside suppliers for purchased component parts, chassis and raw materials, including aluminum, steel, and petroleum-related products;

●

increased employee turnover rates and problems hiring or retaining skilled labor to manufacture our products;

●

our customers’ and end users’ access to capital and credit to fund purchases;

●

operational challenges caused by increased sales volumes in recent years, prior to the COVID-19 pandemic;

●

various political, economic and other uncertainties relating to our international operations, including restrictive taxation and foreign currency fluctuation, and geopolitical instability such as the war in Ukraine;

●

the cyclical nature of our industry and changes in consumer confidence;

●

special risks from our sales to U.S. and other governmental entities through prime contractors;

●

changes in fuel and other transportation costs, insurance costs and weather conditions;

●

changes in government regulations, including environmental and health and safety regulations;

●

failure to comply with domestic and foreign anti-corruption laws;

●

competition in our industry and our ability to attract or retain customers;

●

our ability to develop or acquire proprietary products and technology;

●

assertions against us relating to intellectual property rights;

●

a disruption in, or breach in security of, our information technology systems or any violation of data protection laws;

●

changes in the tax regimes and related government policies and regulations in the countries in which we operate;

●

the effects of regulations relating to conflict minerals;

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●

the catastrophic loss of one of our manufacturing facilities;

●

environmental and health and safety liabilities and requirements;

●

loss of the services of our key executives;

●

product warranty or product liability claims in excess of our insurance coverage;

●

potential recalls of components or parts manufactured for us by suppliers or potential recalls of defective products;

●

an inability to acquire insurance at commercially reasonable rates;

●

and those other risks referenced herein, including those risks referred to in Part II, Item 1A–“Risk Factors” in this Quarterly Report on Form 10-Q and those risks discussed in our other filings with the Securities and Exchange Commission, including those risks discussed under the caption “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2021, which discussion is incorporated herein by this reference.

Such factors are not exclusive. We do not undertake to update any forward-looking statement that may be made from time to time by, or on behalf of, the Company.

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PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

MILLER INDUSTRIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except share data)


	March 31,
	2022		December 31,
	(Unaudited)		2021
ASSETS
CURRENT ASSETS:
Cash and temporary investments	$	29,292	$	54,332
Accounts receivable, net of allowance for credit losses of $1,200 and $1,155 at March 31, 2022 and December 31, 2021, respectively		193,884		153,977
Inventories, net		124,348		114,908
Prepaid expenses		8,743		5,751
Total current assets		356,267		328,968
NONCURRENT ASSETS:
Property, plant and equipment, net		97,787		96,496
Right-of-use assets - operating leases		1,167		1,231
Goodwill		11,619		11,619
Other assets		641		533
TOTAL ASSETS	$	467,481	$	438,847

LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable	$	139,311	$	119,029
Accrued liabilities		23,016		24,866
Current portion of operating lease obligation		349		361
Current portion of finance lease obligation		9		15
Total current liabilities		162,685		144,271
NONCURRENT LIABILITIES:
Long-term obligations		10,000		—
Noncurrent portion of operating lease obligation		816		870
Deferred income tax liabilities		5,134		5,170
Total liabilities		178,635		150,311

COMMITMENTS AND CONTINGENCIES (Note 7)

SHAREHOLDERS’ EQUITY:
Preferred stock, $0.01 par value; 5,000,000 shares authorized, none issued or outstanding		—		—
Common stock, $0.01 par value; 100,000,000 shares authorized, 11,416,716 and 11,410,728 outstanding at March 31, 2022 and December 31, 2021, respectively		114		114
Additional paid-in capital		151,724		151,449
Accumulated surplus		141,928		141,918
Accumulated other comprehensive loss		(4,920)		(4,945)
Total shareholders’ equity		288,846		288,536
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$	467,481	$	438,847

The accompanying notes are an integral part of these financial statements.

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MILLER INDUSTRIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except per share data)

(Unaudited)


	Three Months Ended
	March 31
	2022		2021

NET SALES	$	215,545	$	169,912
COSTS OF OPERATIONS		200,205		154,081
GROSS PROFIT		15,340		15,831

OPERATING EXPENSES:
Selling, general and administrative expenses		12,386		11,051

NON-OPERATING (INCOME) EXPENSES:
Interest expense, net		418		275
Other (income) expense, net		52		276
Total expense, net		12,856		11,602

INCOME BEFORE INCOME TAXES		2,484		4,229
INCOME TAX PROVISION		419		1,051
NET INCOME	$	2,065	$	3,178

BASIC INCOME PER COMMON SHARE	$	0.18	$	0.28
DILUTED INCOME PER COMMON SHARE	$	0.18	$	0.28

CASH DIVIDENDS DECLARED PER COMMON SHARE	$	0.18	$	0.18

WEIGHTED AVERAGE SHARES OUTSTANDING:
Basic		11,417		11,410
Diluted		11,421		11,410

The accompanying notes are an integral part of these financial statements.

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MILLER INDUSTRIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In thousands)

(Unaudited)


	Three Months Ended
	March 31
	2022		2021
NET INCOME	$	2,065	$	3,178

OTHER COMPREHENSIVE INCOME:
Foreign currency translation adjustment		25		760
Total other comprehensive income		25		760

COMPREHENSIVE INCOME	$	2,090	$	3,938

The accompanying notes are an integral part of these financial statements.

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MILLER INDUSTRIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

(In thousands, except share data)

(Unaudited)


							Accumulated
			Additional				Other
	Common		Paid-In		Accumulated		Comprehensive
	Stock		Capital		Surplus		Loss		Total
BALANCE, December 31, 2020	$	114	$	151,249	$	133,879	$	(2,789)	$	282,453
Components of comprehensive income:
Net income		—		—		3,178		—		3,178
Foreign currency translation adjustment		—		—		—		760		760
Total comprehensive income		—		—		3,178		760		3,938
Issuance of common stock to non-employee directors (5,260)		—		200		—		—		200
Dividends paid, $0.18 per share		—		—		(2,054)		—		(2,054)
BALANCE, March 31, 2021	$	114	$	151,449	$	135,003	$	(2,029)	$	284,537

BALANCE, December 31, 2021	$	114	$	151,449	$	141,918	$	(4,945)	$	288,536
Components of comprehensive income:
Net income		—		—		2,065		—		2,065
Foreign currency translation adjustment		—		—		—		25		25
Total comprehensive income		—		—		2,065		25		2,090
Issuance of common stock to non-employee directors (5,988)		—		200		—		—		200
Stock-based compensation on nonvested restricted stock units		—		75		—		—		75
Dividends paid, $0.18 per share		—		—		(2,055)		—		(2,055)
BALANCE, March 31, 2021	$	114	$	151,724	$	141,928	$	(4,920)	$	288,846

The accompanying notes are an integral part of these financial statements.

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MILLER INDUSTRIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)


	Three Months Ended
	March 31
	2022		2021
OPERATING ACTIVITIES:
Net income	$	2,065	$	3,178
Adjustments to reconcile net income to net cash flows from operating activities:
Depreciation and amortization		2,793		2,440
(Gain) Loss on disposal of property, plant and equipment		—		5
Provision for credit losses		45		51
Issuance of non-employee director shares		200		200
Stock-based compensation on nonvested restricted stock units		75		—
Deferred tax provision		(37)		(3)
Changes in operating assets and liabilities:
Accounts receivable		(39,960)		(25,812)
Inventories		(9,434)		(568)
Prepaid expenses		(2,992)		(3,377)
Other assets		(38)		37
Accounts payable		20,272		27,557
Accrued liabilities		(1,925)		(861)
Net cash flows from operating activities		(28,936)		2,847
INVESTING ACTIVITIES:
Purchases of property, plant and equipment		(4,091)		(2,489)
Proceeds from sale of property, plant and equipment		8		—
Net cash flows from investing activities		(4,083)		(2,489)

SEC Form 10-Q filed by Miller Industries Inc.