Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2018 | Apr. 30, 2018 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | MILLER INDUSTRIES INC /TN/ | |
Entity Central Index Key | 924,822 | |
Trading Symbol | mlr | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock Shares Outstanding | 11,384,296 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2018 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q1 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
CURRENT ASSETS: | ||
Cash and temporary investments | $ 15,056 | $ 21,895 |
Accounts receivable, net of allowance for doubtful accounts of $1,098 and $1,038 at March 31, 2018 and December 31, 2017, respectively | 136,684 | 132,699 |
Inventories, net | 77,653 | 68,567 |
Prepaid expenses | 6,425 | 4,272 |
Total current assets | 235,818 | 227,433 |
PROPERTY, PLANT, AND EQUIPMENT, net | 79,829 | 77,628 |
GOODWILL | 11,619 | 11,619 |
OTHER ASSETS | 539 | 558 |
TOTAL ASSETS | 327,805 | 317,238 |
CURRENT LIABILITIES: | ||
Accounts payable | 82,695 | 79,304 |
Accrued liabilities | 23,060 | 22,001 |
Long-term obligations due within one year | 409 | 394 |
Total current liabilities | 106,164 | 101,699 |
LONG TERM OBLIGATIONS | 10,718 | 10,212 |
NONCURRENT TAXES PAYABLE | 1,149 | 1,102 |
DEFERRED INCOME TAX LIABILITIES | 1,086 | 1,125 |
TOTAL LIABILITIES | 119,117 | 114,138 |
COMMITMENTS AND CONTINGENCIES (Notes 6 and 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, 11,384,296 and 11,378,482, outstanding at March 31, 2018 and December 31, 2017, respectively | 114 | 114 |
Additional paid-in capital | 150,849 | 150,699 |
Accumulated surplus | 60,201 | 55,580 |
Accumulated other comprehensive loss | (2,476) | (3,293) |
Total shareholders' equity | 208,688 | 203,100 |
Total Liabilities And Shareholders' Equity | $ 327,805 | $ 317,238 |
CONDENSED CONSOLIDATED BALANCE3
CONDENSED CONSOLIDATED BALANCE SHEETS (Parentheticals) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Statement Of Financial Position [Abstract] | ||
Allowance for doubtful accounts (in dollars) | $ 1,098 | $ 1,038 |
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares outstanding | 11,384,296 | 11,378,482 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Income Statement [Abstract] | ||
NET SALES | $ 159,160 | $ 148,933 |
COSTS OF OPERATIONS | 140,733 | 133,538 |
GROSS PROFIT | 18,427 | 15,395 |
OPERATING EXPENSES: | ||
Selling, general and administrative expenses | 9,589 | 9,044 |
NON-OPERATING (INCOME) EXPENSES: | ||
Interest expense, net | 420 | 378 |
Other (income) expense, net | (915) | (14) |
Total expenses, net | 9,094 | 9,408 |
INCOME BEFORE INCOME TAXES | 9,333 | 5,987 |
INCOME TAX PROVISION | 2,663 | 2,148 |
NET INCOME | $ 6,670 | $ 3,839 |
BASIC INCOME PER COMMON SHARE (in dollars per share) | $ 0.59 | $ 0.34 |
DILUTED INCOME PER COMMON SHARE (in dollars per share) | 0.59 | 0.34 |
CASH DIVIDENDS DECLARED PER COMMON SHARE (in dollars per share) | $ 0.18 | $ 0.18 |
WEIGHTED AVERAGE SHARES OUTSTANDING: | ||
Basic (in shares) | 11,384 | 11,350 |
Diluted (in shares) | 11,393 | 11,380 |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Statement Of Other Comprehensive Income [Abstract] | ||
NET INCOME | $ 6,670 | $ 3,839 |
OTHER COMPREHENSIVE INCOME (LOSS): | ||
Foreign currency translation adjustment | 817 | (111) |
Total other comprehensive income (loss) | 817 | (111) |
COMPREHENSIVE INCOME | $ 7,487 | $ 3,728 |
CONDENSED CONSOLIDATED STATEME6
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
OPERATING ACTIVITIES: | ||
Net income | $ 6,670 | $ 3,839 |
Adjustments to reconcile net income to net cash flows from operating activities: | ||
Depreciation and amortization | 1,746 | 1,346 |
(Gain) loss on disposals of property, plant and equipment | (39) | |
Provision for doubtful accounts | 56 | 51 |
Issuance of non-employee director shares | 150 | 150 |
Deferred tax provision | 207 | (25) |
Changes in operating assets and liabilities: | ||
Accounts receivable | (3,744) | (7,353) |
Inventories | (8,439) | (3,457) |
Prepaid expenses | (2,145) | (1,158) |
Other assets | 18 | 22 |
Accounts payable | 3,004 | 2,191 |
Accrued liabilities | 607 | 1,317 |
Net cash flows from operating activities | (1,909) | (3,077) |
INVESTING ACTIVITIES: | ||
Purchases of property, plant and equipment | (3,880) | (6,393) |
Proceeds from sale of property, plant and equipment | 60 | |
Net cash flows from investing activities | (3,820) | (6,393) |
FINANCING ACTIVITIES: | ||
Net borrowings (payments) under credit facility | 5,000 | |
Payments of cash dividends | (2,049) | (2,043) |
Proceeds (payments) from other long-term obligations | 499 | |
Net cash flows from financing activities | (1,550) | 2,957 |
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND TEMPORARY INVESTMENTS | 440 | (103) |
NET CHANGE IN CASH AND TEMPORARY INVESTMENTS | (6,839) | (6,616) |
CASH AND TEMPORARY INVESTMENTS, beginning of period | 21,895 | 31,115 |
CASH AND TEMPORARY INVESTMENTS, end of period | 15,056 | 24,499 |
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | ||
Cash payments for interest | 521 | 501 |
Cash payments for income taxes, net of refunds | $ 758 | $ 209 |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 3 Months Ended |
Mar. 31, 2018 | |
Organization, Consolidation and Presentation Of Financial Statements [Abstract] | |
BASIS OF PRESENTATION | 1. BASIS OF PRESENTATION The condensed consolidated financial statements of Miller Industries, Inc. and subsidiaries (the “Company”) included herein have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to such rules and regulations. Nevertheless, the Company believes that the disclosures are adequate to make the financial information presented not misleading. In the opinion of management, the accompanying unaudited condensed consolidated financial statements reflect all adjustments, which are of a normal recurring nature, to present fairly the Company’s financial position, results of operations and cash flows at the dates and for the periods presented. Cost of goods sold for interim periods for certain entities is determined based on estimated gross profit rates. Interim results of operations are not necessarily indicative of results to be expected for the fiscal year. These condensed consolidated financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2017. The condensed consolidated financial statements include accounts of certain subsidiaries whose fiscal closing dates differ from December 31 st |
RECENT ACCOUNTING PRONOUNCEMENT
RECENT ACCOUNTING PRONOUNCEMENTS | 3 Months Ended |
Mar. 31, 2018 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
RECENT ACCOUNTING PRONOUNCEMENTS | 2. RECENT ACCOUNTING PRONOUNCEMENTS Recently Issued Standards The Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) 2016-02 Leases (Topic 842) on February 25, 2016 and is intended to improve financial reporting on leasing transactions. The standard affects all companies and other organizations that lease assets such as real estate, airplanes, and manufacturing equipment. The standard will require lessees to recognize on the balance sheet the assets and liabilities for the rights and obligations created by their lease agreements. An organization is to provide disclosures designed to enable users of financial statements to understand the amount, timing, and uncertainty of cash flows arising from leases. These disclosures include qualitative and quantitative requirements concerning additional information about the amounts recorded in the financial statements. Under the new guidance, a lessee will be required to recognize assets and liabilities for leases with lease terms of more than 12 months. Consistent with current GAAP, the recognition, measurement, and presentation of expenses and cash flows arising from a lease by a lessee primarily will depend on its classification as a finance or operating lease. However, unlike current GAAP which requires only capital leases to be recognized on the balance sheet, the new standard will require both types of leases (i.e. operating and finance) to be recognized on the balance sheet. The FASB lessee accounting model will continue to account for both types of leases. The finance lease will be accounted for in substantially the same manner as capital leases are accounted for under existing GAAP. The operating lease will be accounted for in a manner similar to operating leases under existing GAAP, except that lessees will recognize a lease liability and a lease asset for all of those leases. The standard will be effective for financial statements issued for annual periods, and interim periods within these annual periods, beginning after December 15, 2018, with early adoption permitted. See “Credit Facilities and Other Obligations” within Item 2 for the Company’s current lease commitments. The Company plans to use the modified retrospective approach to implement the standard and is currently evaluating the effect that implementation will have on its consolidated financial position, results of operations and cash flows. Recently Adopted Standards In May 2014, the FASB issued ASU 2014-09, Revenue—Revenue from Contracts with Customers. The guidance within the new revenue standard is based upon the core principle that an entity should recognize revenue to reflect the transfer of goods and services to customers in an amount equal to the consideration the entity receives or expects to receive. The Company has adopted the standard and all related amendments with an effective date of January 1, 2018 using the modified retrospective method, thus recognizing the cumulative effect of adopting the standard as an adjustment to the opening balance of retained earnings. We applied the standard to contracts that were not completed as of the adoption date. Comparative information has not been restated and continues to be reported under the accounting standards in effect for the periods prior to the effective date. As a result of the adoption, effective January 1, 2018, the Company began including the costs of painting activities as performance obligations within each contract, which results in a delay in recognition of revenue until such activities are complete and the product is shipped. With the exception of certain extended service contracts on a small percentage of units sold, our performance obligations are complete and our sales revenue is recognized when products are shipped from our facilities. We do not anticipate the adoption of the standard to have a material impact on an ongoing basis to the Company’s consolidated financial statements and related disclosures. The cumulative effect adjustment to our consolidated balance sheets as of January 1, 2018 was as follows: Balance at Cumulative Effect Balance at Assets Accounts Receivable, net $ 132,699 $ (2,496 ) $ 130,203 Inventories, net 68,567 1,996 70,563 Liabilities and Shareholders' Equity Accrued Liabilities 22,001 (176 ) 21,825 Accumulated Surplus 55,580 (324 ) 55,256 In accordance with the new revenue standard requirements, the impact of the adoption to the consolidated statement of income during the three months ended March 31, 2018 and the consolidated balance sheets as of March 31, 2018 was as follows: Three Months Ended March 31, 2018 As Reported Balances Without Effect of Adoption Statement of Income Revenues Net Sales $ 159,160 $ 160,035 $ (875 ) Costs and Expenses Costs of Operations 140,733 141,433 (700 ) Income Tax Provision 2,663 2,724 (61 ) Net Income 6,670 6,784 (114 ) March 31, 2018 As Reported Balances Without Effect of Adoption Balance Sheet Assets Accounts Receivable, net $ 136,684 $ 137,559 $ (875 ) Inventories, net 77,653 76,953 700 Liabilities and Shareholders’ Equity Accrued Liabilities 23,060 23,121 (61 ) Accumulated Surplus 60,201 60,315 (114 ) As a result of the adoption, we changed our accounting policy. See Note 4 for further information. In January 2017, the FASB issued ASU No. 2017-04, Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. The standard eliminates the second step in the goodwill impairment test which required an entity to determine the implied fair value of the reporting unit’s goodwill. Instead, an entity will now recognize an impairment loss if the carrying value of the net assets assigned to the reporting unit exceeds the fair value of the reporting unit, with the impairment loss not to exceed the amount of goodwill allocated to the reporting unit. The Company elected to adopt the standard in the first quarter of 2018, with an effective date of January 1, 2018. The adoption of this guidance did not have a material impact on its consolidated financial statements and related disclosures. In May 2017, the FASB amended the requirements in the Compensation—Stock Compensation Topic of the ASC related to changes to the terms or conditions of a share-based payment award. The amendments provide guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting. The Company adopted the amendments in the first quarter of 2018, with an effective date of January 1, 2018. The adoption of this guidance did not have a material impact on the Company’s financial statements and related disclosures. |
BASIC AND DILUTED INCOME PER SH
BASIC AND DILUTED INCOME PER SHARE | 3 Months Ended |
Mar. 31, 2018 | |
Earnings Per Share [Abstract] | |
BASIC AND DILUTED INCOME PER SHARE | 3. BASIC AND DILUTED INCOME PER SHARE Basic income per share is computed by dividing net income by the weighted average number of common shares outstanding. Diluted income per share is calculated by dividing net income by the weighted average number of common and potential dilutive common shares outstanding. Diluted income per share takes into consideration the assumed exercise of outstanding stock options resulting in approximately 9,000 and 30,000 potential dilutive common shares for the three months ended March 31, 2018 and 2017, respectively. For the three months ended March 31, 2018 and 2017, none of the outstanding stock options would have been anti-dilutive. |
REVENUE
REVENUE | 3 Months Ended |
Mar. 31, 2018 | |
Revenue from Contract with Customer [Abstract] | |
REVENUE | 4. REVENUE Substantially all of our revenue is generated from sales of towing equipment. As such, disaggregation of revenue by product type was not a viable option for disclosure. However, we track our revenue streams by the location of our customers by separating North American sales from foreign sales. The following table disaggregates our revenue by the geographic region of our customers. For the Three Months Ended 2018 2017 Net Sales: North America $ 131,644 $ 130,678 Foreign 27,516 18,255 $ 159,160 $ 148,933 Revenue is recognized when obligations under the terms of a contract with our customer are satisfied. Generally, this occurs upon shipment, which is when the risk of ownership for products has transferred to independent distributors or other customers. From time to time, revenue is recognized under a bill and hold arrangement. Recognition of revenue on bill and hold arrangements occurs when risk of ownership has passed to the customer, a fixed written commitment has been provided by the customer, the goods are complete and ready for shipment, the goods are segregated from inventory, and no performance obligation remains. Revenue is measured as the amount of consideration we expect to receive in exchange for transferring our products. Sales and other taxes we collect concurrent with revenue-producing activities are excluded from revenue. Warranty related costs are recognized as an expense at the time products are sold. Depending on the terms of the arrangement, for certain contracts we may defer the recognition of a portion of the consideration received because we have to satisfy a future obligation, such as an extended service contract. We use an observable price to determine the stand-alone selling price for separate performance obligations or a cost plus margin approach when one is not available. Contract assets primarily relate to the Company’s rights to consideration for work completed but not billed at the reporting date. The contract assets are transferred to receivables when the rights become unconditional. Contract liabilities primarily relate to performance obligations to be satisfied in the future. As of January 1, 2018 and March 31, 2018, contract liability balances related to extended service contracts were $154 and $369, respectively. No revenue related to the contract liability balance at January 1, 2018 was recognized during the three months ended March 31, 2018. The Company did not have any contract assets at January 1, 2018 or March 31, 2018. Impairment losses on contract receivables were de minimis during the three months ended March 31, 2018. |
INVENTORIES
INVENTORIES | 3 Months Ended |
Mar. 31, 2018 | |
Inventory Disclosure [Abstract] | |
INVENTORIES | 5. INVENTORIES Inventory costs include materials, labor and factory overhead. Inventories are stated at the lower of cost or net realizable value, determined on a first-in, first-out basis. Appropriate consideration is given to obsolescence, valuation and other factors in determining net realizable value. Revisions of these estimates could result in the need for adjustments. Inventories, net of reserves, at March 31, 2018 and December 31, 2017 consisted of the following: March 31, December 31, Chassis $ 8,908 $ 7,525 Raw materials 34,144 30,109 Work in process 13,962 13,521 Finished goods 20,639 17,412 $ 77,653 $ 68,567 |
LONG-TERM OBLIGATIONS
LONG-TERM OBLIGATIONS | 3 Months Ended |
Mar. 31, 2018 | |
Long-Term Debt, Unclassified [Abstract] | |
LONG-TERM OBLIGATIONS | 6. LONG-TERM OBLIGATIONS Credit Facility and Other Long-Term Obligations Credit Facility On April 5, 2017, the $50,000 credit facility pursuant to our Loan Agreement with First Tennessee Bank National Association was renewed to extend the maturity date to May 31, 2019. The current credit facility contains customary representations and warranties, events of default, and financial, affirmative and negative covenants for loan agreements of this kind. Covenants under the current credit facility restrict the payment of cash dividends if the Company would be in violation of the minimum tangible net worth test or the leverage ratio test in the current loan agreement as a result of the dividend, among various restrictions. We have been in compliance with these covenants throughout 2017 and during the first quarter of 2018 and anticipate that we will continue to be in compliance during the remainder of 2018. In the absence of a default, all borrowings under the current credit facility bear interest at the LIBOR Rate plus 1.50% per annum. The Company will pay a non-usage fee under the current loan agreement at a rate per annum equal to between 0.15% and 0.35% of the unused amount of the current credit facility, which fee is paid quarterly. At March 31, 2018 and December 31, 2017, the Company had $10,000 in outstanding borrowings under the credit facility. Other Long-Term Obligations During November 2017, our French subsidiary, Jige International S.A., entered into an agreement with Banque Européenne du Crédit Mutuel for a €1,000 unsecured fixed rate loan with a maturity date of September 30, 2020. All borrowings under this loan bear interest at 0.3% per annum. At March 31, 2018, the Company had $1,127 in outstanding borrowings under the loan agreement, of which $718 and $409 were classified as long-term obligations and long-term obligations due within one year, respectively, on the consolidated balance sheets. At December 31, 2017, the Company had $606 in outstanding borrowings under the loan agreement, of which $212 and $394 were classified as long-term obligations and long-term obligations due within one year, respectively, on the consolidated balance sheets. These borrowings are being used primarily for the purchase of land and routine repairs to the operating facilities in France. The loan agreement contains no material covenants. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 3 Months Ended |
Mar. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | 7. COMMITMENTS AND CONTINGENCIES Commitments At March 31, 2018, the Company had commitments of approximately $7,080 for construction and acquisition of property, plant and equipment, including $1,000 for construction of an administrative building discussed below. During 2017, the Company substantially completed capital projects relating to its Pennsylvania and Tennessee manufacturing facilities. These project costs are included in property, plant and equipment, net on the consolidated balance sheets. The Company began construction of an administrative building at its Ooltewah, Tennessee facility in June 2017. The current estimated costs of this project are approximately $4,200. Approximately $3,200 of these costs were incurred as of March 31, 2018, and the remaining costs are expected to be incurred during the second quarter of 2018. Contingencies The Company has entered into arrangements with third-party lenders where it has agreed, in the event of default by the independent distributor customer, to repurchase from the third-party lender Company products repossessed from the independent distributor customer. These arrangements are typically subject to a maximum repurchase amount. The maximum amount of collateral that the Company could be required to purchase was approximately $54,546 at March 31, 2018, and $54,093 at December 31, 2017. However, the Company’s risk under these arrangements is mitigated by the value of the products that would be repurchased as part of the transaction. The Company considered the fair value at inception of its liability under these arrangements and concluded that the liability associated with these potential repurchase obligations is not material and not probable at March 31, 2018. The Company is, from time to time, a party to litigation arising in the normal course of its business. Litigation is subject to various inherent uncertainties, and it is possible that some of these matters could be resolved unfavorably to the Company, which could result in substantial damages against the Company. The Company has established accruals for matters that are probable and reasonably estimable and maintains product liability and other insurance that management believes to be adequate. Management believes that any liability that may ultimately result from the resolution of these matters in excess of available insurance coverage and accruals will not have a material adverse effect on the consolidated financial position or results of operations of the Company. |
INCOME TAXES
INCOME TAXES | 3 Months Ended |
Mar. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | 8. INCOME TAXES The Tax Cuts and Jobs Act (TCJA), among other changes, reduced the corporate tax rate from a top rate of 35% to a flat rate of 21%, effective January 1, 2018. At December 31, 2017, because of the implementation of the TCJA, the Company recognized a $1,102 liability in noncurrent taxes payable on its consolidated balance sheets related to the income tax from the deemed repatriation of its cumulative foreign earnings. During the first three months of 2018, the Company gathered additional information which demonstrated that the liability should be increased. Due to the inherent complexity of the calculation for the deemed repatriation tax, the Company followed elective guidance in SEC Staff Accounting Bulletin (SAB) 118, which allows for a measurement period adjustment to be reflected in the current reporting period. Therefore, at March 31, 2018, the deemed repatriation liability was increased to $1,335. The estimated payments of this liability of $186 that will be due within one year were classified as current accrued liabilities at March 31, 2018. As of March 31, 2018 the Company had no federal operating loss carryforwards. As of March 31, 2018, the Company had a state net operating loss carryforward of $865, which will expire between 2018 and 2025. |
SHAREHOLDERS EQUITY
SHAREHOLDERS EQUITY | 3 Months Ended |
Mar. 31, 2018 | |
Stockholders' Equity Note [Abstract] | |
SHAREHOLDERS EQUITY | 9. SHAREHOLDERS EQUITY Dividends The Company has paid consecutive quarterly cash dividends since May 2011. During the three months ended March 31, 2018 and 2017 the Company paid quarterly cash dividends of $2,049 and $2,043, respectively, with each payment amounting to $0.18 per share. On May 7, 2018, the Company’s Board of Directors declared a quarterly cash dividend of $0.18 per share. The dividend is payable June 18, 2018 to shareholders of record as of June 11 , |
Accounting Policies (Policies)
Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2018 | |
Accounting Policies [Abstract] | |
BASIS OF PRESENTATION | BASIS OF PRESENTATION The condensed consolidated financial statements of Miller Industries, Inc. and subsidiaries (the “Company”) included herein have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to such rules and regulations. Nevertheless, the Company believes that the disclosures are adequate to make the financial information presented not misleading. In the opinion of management, the accompanying unaudited condensed consolidated financial statements reflect all adjustments, which are of a normal recurring nature, to present fairly the Company’s financial position, results of operations and cash flows at the dates and for the periods presented. Cost of goods sold for interim periods for certain entities is determined based on estimated gross profit rates. Interim results of operations are not necessarily indicative of results to be expected for the fiscal year. These condensed consolidated financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2017. The condensed consolidated financial statements include accounts of certain subsidiaries whose fiscal closing dates differ from December 31 st |
RECENT ACCOUNTING PRONOUNCEMENTS | RECENT ACCOUNTING PRONOUNCEMENTS Recently Issued Standards The Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) 2016-02 Leases (Topic 842) on February 25, 2016 and is intended to improve financial reporting on leasing transactions. The standard affects all companies and other organizations that lease assets such as real estate, airplanes, and manufacturing equipment. The standard will require lessees to recognize on the balance sheet the assets and liabilities for the rights and obligations created by their lease agreements. An organization is to provide disclosures designed to enable users of financial statements to understand the amount, timing, and uncertainty of cash flows arising from leases. These disclosures include qualitative and quantitative requirements concerning additional information about the amounts recorded in the financial statements. Under the new guidance, a lessee will be required to recognize assets and liabilities for leases with lease terms of more than 12 months. Consistent with current GAAP, the recognition, measurement, and presentation of expenses and cash flows arising from a lease by a lessee primarily will depend on its classification as a finance or operating lease. However, unlike current GAAP which requires only capital leases to be recognized on the balance sheet, the new standard will require both types of leases (i.e. operating and finance) to be recognized on the balance sheet. The FASB lessee accounting model will continue to account for both types of leases. The finance lease will be accounted for in substantially the same manner as capital leases are accounted for under existing GAAP. The operating lease will be accounted for in a manner similar to operating leases under existing GAAP, except that lessees will recognize a lease liability and a lease asset for all of those leases. The standard will be effective for financial statements issued for annual periods, and interim periods within these annual periods, beginning after December 15, 2018, with early adoption permitted. See “Credit Facilities and Other Obligations” within Item 2 for the Company’s current lease commitments. The Company plans to use the modified retrospective approach to implement the standard and is currently evaluating the effect that implementation will have on its consolidated financial position, results of operations and cash flows. Recently Adopted Standards In May 2014, the FASB issued ASU 2014-09, Revenue—Revenue from Contracts with Customers. The guidance within the new revenue standard is based upon the core principle that an entity should recognize revenue to reflect the transfer of goods and services to customers in an amount equal to the consideration the entity receives or expects to receive. The Company has adopted the standard and all related amendments with an effective date of January 1, 2018 using the modified retrospective method, thus recognizing the cumulative effect of adopting the standard as an adjustment to the opening balance of retained earnings. We applied the standard to contracts that were not completed as of the adoption date. Comparative information has not been restated and continues to be reported under the accounting standards in effect for the periods prior to the effective date. As a result of the adoption, effective January 1, 2018, the Company began including the costs of painting activities as performance obligations within each contract, which results in a delay in recognition of revenue until such activities are complete and the product is shipped. With the exception of certain extended service contracts on a small percentage of units sold, our performance obligations are complete and our sales revenue is recognized when products are shipped from our facilities. We do not anticipate the adoption of the standard to have a material impact on an ongoing basis to the Company’s consolidated financial statements and related disclosures. The cumulative effect adjustment to our consolidated balance sheets as of January 1, 2018 was as follows: Balance at Cumulative Effect Balance at Assets Accounts Receivable, net $ 132,699 $ (2,496 ) $ 130,203 Inventories, net 68,567 1,996 70,563 Liabilities and Shareholders' Equity Accrued Liabilities 22,001 (176 ) 21,825 Accumulated Surplus 55,580 (324 ) 55,256 In accordance with the new revenue standard requirements, the impact of the adoption to the consolidated statement of income during the three months ended March 31, 2018 and the consolidated balance sheets as of March 31, 2018 was as follows: Three Months Ended March 31, 2018 As Reported Balances Without Effect of Adoption Statement of Income Revenues Net Sales $ 159,160 $ 160,035 $ (875 ) Costs and Expenses Costs of Operations 140,733 141,433 (700 ) Income Tax Provision 2,663 2,724 (61 ) Net Income 6,670 6,784 (114 ) March 31, 2018 As Reported Balances Without Effect of Adoption Balance Sheet Assets Accounts Receivable, net $ 136,684 $ 137,559 $ (875 ) Inventories, net 77,653 76,953 700 Liabilities and Shareholders’ Equity Accrued Liabilities 23,060 23,121 (61 ) Accumulated Surplus 60,201 60,315 (114 ) As a result of the adoption, we changed our accounting policy. See Note 4 for further information. In January 2017, the FASB issued ASU No. 2017-04, Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. The standard eliminates the second step in the goodwill impairment test which required an entity to determine the implied fair value of the reporting unit’s goodwill. Instead, an entity will now recognize an impairment loss if the carrying value of the net assets assigned to the reporting unit exceeds the fair value of the reporting unit, with the impairment loss not to exceed the amount of goodwill allocated to the reporting unit. The Company elected to adopt the standard in the first quarter of 2018, with an effective date of January 1, 2018. The adoption of this guidance did not have a material impact on its consolidated financial statements and related disclosures. In May 2017, the FASB amended the requirements in the Compensation—Stock Compensation Topic of the ASC related to changes to the terms or conditions of a share-based payment award. The amendments provide guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting. The Company adopted the amendments in the first quarter of 2018, with an effective date of January 1, 2018. The adoption of this guidance did not have a material impact on the Company’s financial statements and related disclosures. |
RECENT ACCOUNTING PRONOUNCEME17
RECENT ACCOUNTING PRONOUNCEMENTS (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
Schedule of adoption to reported results | Balance at Cumulative Effect Balance at Assets Accounts Receivable, net $ 132,699 $ (2,496 ) $ 130,203 Inventories, net 68,567 1,996 70,563 Liabilities and Shareholders' Equity Accrued Liabilities 22,001 (176 ) 21,825 Accumulated Surplus 55,580 (324 ) 55,256 Three Months Ended March 31, 2018 As Reported Balances Without Effect of Adoption Statement of Income Revenues Net Sales $ 159,160 $ 160,035 $ (875 ) Costs and Expenses Costs of Operations 140,733 141,433 (700 ) Income Tax Provision 2,663 2,724 (61 ) Net Income 6,670 6,784 (114 ) March 31, 2018 As Reported Balances Without Effect of Adoption Balance Sheet Assets Accounts Receivable, net $ 136,684 $ 137,559 $ (875 ) Inventories, net 77,653 76,953 700 Liabilities and Shareholders’ Equity Accrued Liabilities 23,060 23,121 (61 ) Accumulated Surplus 60,201 60,315 (114 ) |
REVENUE (Tables)
REVENUE (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of disaggregation of revenue by the geographic region for customers | For the Three Months Ended 2018 2017 Net Sales: North America $ 131,644 $ 130,678 Foreign 27,516 18,255 $ 159,160 $ 148,933 |
INVENTORIES (Tables)
INVENTORIES (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Inventory Disclosure [Abstract] | |
Schedule of inventories, net of reserves | March 31, December 31, Chassis $ 8,908 $ 7,525 Raw materials 34,144 30,109 Work in process 13,962 13,521 Finished goods 20,639 17,412 $ 77,653 $ 68,567 |
RECENT ACCOUNTING PRONOUNCEME20
RECENT ACCOUNTING PRONOUNCEMENTS (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Jan. 01, 2018 | Dec. 31, 2017 |
Assets | |||
Accounts Receivable, net | $ 136,684 | $ 132,699 | |
Inventories, net | 77,653 | 68,567 | |
Liabilities and Shareholders' Equity | |||
Accrued Liabilities | 23,060 | 22,001 | |
Accumulated Surplus | $ 60,201 | $ 55,580 | |
Cumulative Effect Adjustment | |||
Assets | |||
Accounts Receivable, net | $ (2,496) | ||
Inventories, net | 1,996 | ||
Liabilities and Shareholders' Equity | |||
Accrued Liabilities | (176) | ||
Accumulated Surplus | (324) | ||
Balance at January 1, 2018 | |||
Assets | |||
Accounts Receivable, net | 130,203 | ||
Inventories, net | 70,563 | ||
Liabilities and Shareholders' Equity | |||
Accrued Liabilities | 21,825 | ||
Accumulated Surplus | $ 55,256 |
RECENT ACCOUNTING PRONOUNCEME21
RECENT ACCOUNTING PRONOUNCEMENTS (Details 1) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Statement of Income | ||
Net Sales | $ 159,160 | $ 148,933 |
Costs and Expenses | ||
Costs of Operations | 140,733 | 133,538 |
Income Tax Provision | 2,663 | 2,148 |
Net Income | 6,670 | $ 3,839 |
Balances Without Adoption of ASU 2014-09 | ||
Statement of Income | ||
Net Sales | 160,035 | |
Costs and Expenses | ||
Costs of Operations | 141,433 | |
Income Tax Provision | 2,724 | |
Net Income | 6,784 | |
Effect of Adoption Increase/(Decrease) | ||
Statement of Income | ||
Net Sales | (875) | |
Costs and Expenses | ||
Costs of Operations | (700) | |
Income Tax Provision | (61) | |
Net Income | $ (114) |
RECENT ACCOUNTING PRONOUNCEME22
RECENT ACCOUNTING PRONOUNCEMENTS (Details 2) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Assets | ||
Accounts Receivable, net | $ 136,684 | $ 132,699 |
Inventories, net | 77,653 | 68,567 |
Liabilities and Shareholders' Equity | ||
Accrued Liabilities | 23,060 | 22,001 |
Accumulated Surplus | 60,201 | $ 55,580 |
Balances Without Adoption of ASU 2014-09 | ||
Assets | ||
Accounts Receivable, net | 137,559 | |
Inventories, net | 76,953 | |
Liabilities and Shareholders' Equity | ||
Accrued Liabilities | 23,121 | |
Accumulated Surplus | 60,315 | |
Effect of Adoption Increase/(Decrease) | ||
Assets | ||
Accounts Receivable, net | (875) | |
Inventories, net | 700 | |
Liabilities and Shareholders' Equity | ||
Accrued Liabilities | (61) | |
Accumulated Surplus | $ (114) |
BASIC AND DILUTED INCOME PER 23
BASIC AND DILUTED INCOME PER SHARE (Detail Textuals) - shares | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Outstanding stock options included in the calculation of diluted EPS | 9,000 | 30,000 |
Stock options | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share | 0 | 0 |
REVENUE (Details)
REVENUE (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Disaggregation of Revenue [Line Items] | ||
Net Sales | $ 159,160 | $ 148,933 |
North America | ||
Disaggregation of Revenue [Line Items] | ||
Net Sales | 131,644 | 130,678 |
Foreign | ||
Disaggregation of Revenue [Line Items] | ||
Net Sales | $ 27,516 | $ 18,255 |
REVENUE (Detail Textuals)
REVENUE (Detail Textuals) - USD ($) $ in Thousands | Mar. 31, 2018 | Jan. 01, 2018 |
Revenue from Contract with Customer [Abstract] | ||
Contract liability balances related to extended service contracts | $ 369 | $ 154 |
INVENTORIES - Summary of invent
INVENTORIES - Summary of inventories, net of reserves (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Inventory Disclosure [Abstract] | ||
Chassis | $ 8,908 | $ 7,525 |
Raw materials | 34,144 | 30,109 |
Work in process | 13,962 | 13,521 |
Finished goods | 20,639 | 17,412 |
Inventories | $ 77,653 | $ 68,567 |
LONG-TERM OBLIGATIONS (Detail T
LONG-TERM OBLIGATIONS (Detail Textuals) € in Thousands, $ in Thousands | 1 Months Ended | 3 Months Ended | ||
Nov. 30, 2017EUR (€) | Mar. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Apr. 05, 2017USD ($) | |
First Tennessee Bank National Association ("First Tennessee") | Credit Facility | ||||
Line of Credit Facility [Line Items] | ||||
Revolving credit facility | $ 50,000 | |||
Description of reference rate basis | LIBOR Rate plus 1.50% | |||
Outstanding borrowings under credit facility | $ 10,000 | $ 10,000 | ||
First Tennessee Bank National Association ("First Tennessee") | Credit Facility | Minimum | ||||
Line of Credit Facility [Line Items] | ||||
Non-usage fee for current loan agreement in annual amount percentage | 0.15% | |||
First Tennessee Bank National Association ("First Tennessee") | Credit Facility | Maximum | ||||
Line of Credit Facility [Line Items] | ||||
Non-usage fee for current loan agreement in annual amount percentage | 0.35% | |||
Jige International S.A. | Banque Europeenne du Credit Mutuel | ||||
Line of Credit Facility [Line Items] | ||||
Unsecured fixed rate loan | € | € 1,000 | |||
Maturity date | Sep. 30, 2020 | |||
Interest rate per annum | 0.30% | |||
Outstanding borrowings under loan agreement | $ 1,127 | 606 | ||
Long-term obligations | 718 | 212 | ||
Long-term obligations due within one year | $ 409 | $ 394 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Detail Textuals) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Dec. 31, 2017 | |
Long-term Purchase Commitment [Line Items] | ||
Maximum repurchase collateral amount | $ 54,546 | $ 54,093 |
Capital Addition Purchase Commitments | ||
Long-term Purchase Commitment [Line Items] | ||
Commitment for construction and acquisition of property, plant and equipment | 7,080 | |
Commitments related to construction of administrative building | 1,000 | |
Tennessee | ||
Long-term Purchase Commitment [Line Items] | ||
Capital cost incurred | 3,200 | |
Current estimated costs of administrative building | $ 4,200 |
INCOME TAXES (Detail Textuals)
INCOME TAXES (Detail Textuals) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | ||
Corporate tax rate | 21.00% | 35.00% |
Noncurrent taxes payable | $ 1,149 | $ 1,102 |
Deemed repatriation liability | 1,335 | |
Estimated payments of repatriation liability classified as current accrued liabilities | 186 | |
State net operating loss carryforward | $ 865 |
SHAREHOLDERS EQUITY (Detail Tex
SHAREHOLDERS EQUITY (Detail Textuals) - USD ($) $ / shares in Units, $ in Thousands | May 07, 2018 | Mar. 31, 2018 | Mar. 31, 2017 |
Stockholders Equity Note [Line Items] | |||
Quarterly cash dividends | $ 2,049 | $ 2,043 | |
Dividend (per share) | $ 0.18 | $ 0.18 | |
Subsequent Event | |||
Stockholders Equity Note [Line Items] | |||
Declared Date | May 7, 2018 | ||
Dividend (per share) | $ 0.18 | ||
Payment Date | Jun. 18, 2018 | ||
Record Date | Jun. 11, 2018 |