Miller Industries (MLR) 10 Nov 222022 Q3 Earnings call transcript

Good day, ladies and gentlemen, and welcome to the Miller Industries Third Quarter 2022 Results Conference Call. [Operator Instructions] And at this time, I would like to turn the call over to your host, Mike Gaudreau, at FTI Consulting. Please go ahead sir.

Thank you, and good morning, everyone. I would like to welcome you to the Miller Industries conference call.

discuss after XXXX yesterday. the to which quarter here released were close are the third company's results, We of market us Tiano, Whitmire, Office. team of management Vice Chief President, CFO; from Manufacturing Bill General Executive Officer; With Chairman Counsel; and and Miller, Linden, Vin Frank today Madonia, the Revenue Vice Executive are Debbie Secretary President Chief and Board; the Jamison from management, Today's followed a formal call will begin question-and-answer remarks with session. by make Act this forward-looking safe in Please morning's with the management may in conference the statements note harbor Private call, accordance Securities of of provisions Litigation Reform XXXX. to with more the risks formally the Commission. Securities like XX-K report related are the your in Form which annual and company's Exchange statements, I'd attention described filed call filings to other to on these and to time, turn call over this I'd the to Debbie. At like go Debbie. Please ahead,

continued you today, good results, We pleased traveling by Thank our today's growth. end Sales sequential so in revenue I third the demand increased everyone. is the quarter million update. morning XX% $XX.X an be to providing in resulting markets of and were strong and third the in our Will will both XX.X% $XXX.X year year. a the prior last quarter quarter, compared the to XX.X%. million, increase profit to margin gross was of compared quarter third Gross the for quarter

our by We as initiatives. pricing from profitability are benefited the encouraged we improvement

information systems adjust levels trends business proper also results sales production products. actions our the last strategic with reflect our the Our build giving to for to taken us visibility us downturn partners, helping and into more since

have parts of fewer prior forward. yield steps and we goods positive to that our had experience recent chain We to that were to going quarters we these the in strengthen anticipate taken significant completion challenges. continue finished still However, results we critical difficulty had Despite challenges, certain will sort sourcing are chain supply continued that quarters. slightly than we supply

resiliency environment, macroeconomic end insignificant and to and despite gives of remains cancellations which backlog we our the date, number the an our have Our strong of in business had confidence markets. us

our our ongoing business, to conflict on international remained Moving despite products strong in the demand Ukraine. for

are we pricing, some demand all cost performed international customer raw exchange operations energy headwinds. freight unfavorable and the component material higher steadily net and to and rates, impacts experiencing of impacts increased in While our of have spite meet

third $XX for year our increased ship in million largely were margin third by strong to increase to The third sales turn a XXXX like actions to million as $XXX.X net of sales net quarter, $XX.X million or by approximately the the operations quarter million XXXX. detail. of $XX.X review XX.X% quarter gross year-over-year more the XXXX quarter to favorable for percentage Cost versus $XXX.X expenses XX.X%. $XX.X compared mix. period continued demand and XXXX, a an profit the were third points XX.X% I'd products, the year-over-year of Cost of for XX.X% for largely or goods. was in million a Now XXXX. increase, finished from XX third period. the compared driven in prior financial SG&A quarter of in compared quarter the Net XXXX product XX.X% the was more to million for sales results of the the operations XXXX year basis third to for net quarter third prior the third Gross quarter million our to of $XXX.X $XXX.X pricing for sales driven more to ability the decreased million

increases rates. strategic as primarily the quarter $X.X in costs development. of third increases the X.X% for the share basis the or $X was points million attributed period, $XXX,XXX dollar net as interest diluted benefit decreased debt the in one-time for $XXX,XXX our the due up quarter revenue, and to rising to with XX.X% in XXXX, increase per SG&A was for X.X% expense was wages year relative to distributor sales and $X.XX rate as of prior increase XXXX, our expenses and up down outstanding which employee percentage largely well in the XXXX in the quarter well share of third $X.XX to and third fluctuations third quarter was from period. $XXX,XXX support a as the U.S. XX compared as training from to exchange and including However, approximately expense income The plan cost, to related financing flex $X.X and Net increases of initiatives dollar. XX% third compared per diluted XXXX, million Net of currency quarter or for income the strength to XXXX interest for million Other respectively. XXXX third floor

compared of XXXX income million months of representing per and period share I'd to to million months XX.X% our months Gross $X.XX recap results $XX.X compared the for the nine $XX.X sales was nine for compared XX.X%. or of of like sales in for the $XXX.X same Net sheet, first nine sales the Before to nine year. $X.XX year. the to was the XXXX XX.X% for XX, the profit period, for XXXX share, or million income or prior first year were of of moving of increase per the million last balance million $XXX.X $XX.X quickly months to respectively. decreases X.X% million in months first ended $XX.X to XX.X% or Net compared nine September the first XXXX an of of net

$XXX.X $XXX.X $XXX.X to million June June the XX, XX, million and XXXX cash $XX.X XXXX. of $XXX.X September as million XX, June XXXX compared as XXXX September of million of XXXX as $XX.X million Inventories balance XXXX XX, XX, XX, compared compared were to million sheet, to XXXX receivable as $XXX.X million and as and of was to and XXXX. million $XXX.X $XX.X Accounts $XXX.X million million of and was of Accounts XX, of cash as Turning XX, XX, XXXX. June September as equivalence to of of September compared September as XX, as XXXX of as September XX, million of was September XXXX. $XXX.X XXXX as million as XX, September payable of $XX.X

averse that given the Traditionally, hopeful best our our significant peak our are fund of quarter. the debt we hit are inventory working we interest company, our capital to our as backlog. is the of a requirements to however, We have increased needs moderately working feel prior capital shareholders that in compared only and increasing we debt customers our

product to as for the critical as to inventory in us capital working invest goods continue possible. have will our finish turn as We quickly the hands and get to necessary to customers’ parts into and available

Lastly, XX, payable X, of approved on XXXX the close the quarterly dividend consecutive dividend. the Board XXXX, shareholders paid the December Directors the that December of at record of $X.XX per marking our company cash has to share of business quarter XXth

Finally, remarks. some closing

success The actions supply results effects to we actions revenue and saw chain third encouraging our alleviate as extremely our the was quarter constraints. experience since began sequential of through pricing growth of flow to our saw

customers these with relationships. of the As is ensure I closely product customers, all to our and we are further earlier, distributors getting to that working priority our strengthen mentioned and partners top we

this interest remain At exchange are continued conflict rates, While for still sourcing, to business. part of many we Miller stakeholders time, our headwinds, and open the by of we the support to their related there Industries. rising all of Europe In would in questions. foreign our encouraged closing, line like issues strength thank for any we'll

conducting we'll comes Office. session. Instructions] Family question. time from Ursaner this first Our Thank you. Please [Operator a with At be your question-and-answer with Arnie Ursaner proceed question

hear morning. okay? me Can Hi, good you

Arnie. Yes. Good morning,

taking international I a few questions. Is of for thanks simple margin your business? out domestic ones difference have my there knock quick any and to the between Great, way. really

the that energy the is U.S. is of Typically and similar. very definitely is things, pricing costs typically those very it but increased Obviously now due in with operations European dollar right is to fluctuating challenging. similar. And the the it margin some, strength

expanding? or Shrinking backlog. on question Simple Perfect.

outpacing shipments. right entry That's because It Remaining supply and is slightly now. chain the Order steady. flows mainly constraints. our kind ebbs of of

deliver. we to say to steady. certain start remaining improvement we would able it As is of areas, see in pockets I But are

suppliers. on update that looking how difference. when thorough component highlighted by suppliers In like update perhaps Perfect. cylinders, on down, pricing made the arriving. but up impacted an time. you current you getting look had were items was us QX, in had be earlier? you things Give mentioned mentioned additional hydraulics, had And the at of volume You've little additional you parts process give QX, more would it for a and you winches, Can that indicated you're us valves,

you Arnie, Jamison Linden. are this How doing today? is

great. I'm

Wonderful.

update. quick a Just

are within cylinders, metals improvement of and to pockets in significant seeing market mostly hydraulic delays We some castings. supply seen have winches. and related We still the the chain, valves

product inroads new a on by some few engineering made with being and have We designed suppliers. bringing

we made have upcoming improvements. But some So and improvements. hopeful but right we we'll quarters, see that is in some months now, very are still it challenging, the

would dock literally product timing have when you you out? certain What's – can't you're you going there to will, up tell So get certain the sitting, customer? are these if that be products because missing your parts. on the on do What shipments ship? holding likely out What

correct. is That

the delivering to best give shortages we answer us We We that depending from on parts that the components. have are can component that delay our them product.

different So it's component. on answer depending a the

relates Got next that and taking pricing of product in. you're question it. My to your orders

in a X% June. So increase you price had

XX% had in You surcharge a X% April. to

filing price You an your you QX have effective X% indicated to XXXX. in intend that increase

my immediate aren't orders to pricing. would question order little you're and quite of a are be taking to price a questions I why Why your be a price increase trying that getting So costs is, in? QX dramatically you XXXX? If until I you guess more shareholder aren't an going couple deferred – have I recovery related why as up on place today now,

January that the dependent is we're taking delivery today in – price date. on in increase Orders

by XXXX it year, increase. subject unit delivered it would after of take So is order the price today. be that the subject to price If the increase. be can delivered of would not if And it end we that XXXX, January an is to

dependent dependent it's date. order on It's not So intake on date. delivery

trying the Which was point make. I goes to key to

into getting as fair year. recovery that are your you recognition go your next statement? – be Is deliveries, should a then margins improving we cost price margin for on if Your increased

That sure, that the is is is with intent. of intent. all macroeconomic conditions, the volatile it the Yes. Obviously, but for

to in just I be Okay. mind. want my clear

replacing not are surcharge. increases correct? price Is Your that the

in, rolled plus is Surcharge an increase.

Okay. I – one really you maybe last my saw guess The in of QX, continuing trends are in Thank simple there's October? – they question you. and ones.

issues? really chain the as from supply some far As pockets of of the

when year No and nice last some trends I'm up. glitches have current you manufacturing. improvement major showed come challenges. And had in the continuing. you deliveries are additional relative QX assuming again, And to

is It ever-changing an scenario.

mentioned, pockets relief, Jamison As pocket seems are that another get presents there But it challenge of as of itself. one you relief.

but So are headwinds facing. we are seeing some positive trends, there that also we're yes, some

each said. but very they balancing to at So other seem this Jamison challenging it be is as point, still, out

you but know at don't to this directionally to questions myself XXXX because about ask I guidance, investors thinking Okay. point. provide least at going I'm are try like

are uncomfortable million Full XXXX, You've of of about further $X rate model your XXXX. an course what basis are your and revenues entirely factors assume – your other XX teens, if operating you me next obviously are you I between an another year assume XXXX, returns put and reasons in be productivity-enhancing. has even in that go if gross or will QX $X. high massive on margin about historic than almost control again, on and something If price lower lead I you for which mid- or continue which, getting price next going in my would seasonal back increases expansion year, QX mid-Xs, the somewhere should you expenses leverage What can been points $XX to XX to during the that and building to XX, the tax earnings in spent for other based thinking with? many to

in are there said, there of clearly a you lot as Well, and... assumptions

And a uncertainties. lot of

Correct.

not benefit the the you I'm back any I'm have that improvement. getting your giving productivity. parts giving held volume you of

maybe with you So my SG&A, reasonable exception, I'm get which I assuming anything, assumptions leverage they're the on. think are, if think I can some one

facing our direction. to steps taking many are is us. of we challenges into consideration that trying that in to all all – you to the in back we get profitable we seen make And those mind. past. uncertainties front is doing the to that if move the margins certainly model, are and have But of the are That There can things we're business taking

via you and we it pricing, – in our based be But moving automation, goal. are that have, said, And don't – initiatives is direction. guidance. As being we moving that certainly the give we on that

earnings whether XXXX, trying you thing My I'm out to it I As the power is environment. I compensation. that table. pin not not of time in but in last to normal do control figure down, XXXX trying the you one said, it's Miller but comment, XXXX, I a maybe executive speak you don't to in more but expect to in this, necessarily is and am

put out where – got got X base October too You Miller an a Committee XX% your salaries increase. increase. XX% a Compensation Debbie, a comment on salaries. few raised you've

I'd you noticed more this, magnitude that rather in. which have would program, salary the XX% Chief That's and and your I have RSU excellent compensation, Committee that Manufacturing much in than you see base is Compensation I all put CIO Your Officer got increases today. aware increases. hope least for Thank place, performance-based At price you. of I

there other questions? Are any

no the end call now We've questions. like are back the I'd There of comments. over for other to question-and-answer Whitmire closing turn Debbie reached the to session.

call. for with you everyone to look conference joining on our fourth today, Thank to thank like and and again call we I'd quarter speaking you. the forward year-end

This conference. concludes today's

may You participation. lines and this we your thank at you your time, for disconnect