Miller Industries (MLR) 4 May 232023 Q1 Earnings call transcript

Good day, ladies and gentlemen, and welcome to the Miller Industries First Quarter Results Conference Call. Please note, this event is being recorded.

And now at this time, I would like to turn the conference over to Michael Gaudreau of FTI Consulting. Please go ahead.

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

market are company's after were the the to the first of We discuss which XXXX here quarter results, close yesterday. released

Officer; Secretary team Tiano, and today us the Jamison Will Executive CFO; and Debbie of Frank President Miller, Whitmire, the Chief President President, With CEO; Badgley, and are Madonia, Board; Jeff Manufacturing from and and International Chief Miller, Vince Officer. Chairman Bill Executive Revenue General of Counsel; management Military; Linden, Vice Vice President

Reform Today's management, statements call conference session. in remarks Private the will Act call, begin with Litigation provisions accordance morning's in followed Please of formal from Harbor XXXX. this forward-looking question-and-answer by the Safe a make with management may of note, Securities

to other related report your Securities with these in I'd to which fully and call annual and the Commission. are company's like XX-K filings to the Form risks more described the Exchange on attention filed statements,

to over At I'd the to ahead, go this Will. like Will. Please time, turn call

year-over-year, of morning, and Sales quarterly record to start great our to improved you, had increased a availability everyone. generating Thank and quarter XX% the compared improved to XXXX, significantly in component profitability XXXX. parts. revenue We due good

basis first XXX profit points prior XX.X% compared year-over-year. year million, Gross to the quarter improved an for the of margin quarter, $XX.X was increase XX.X% of while gross

we stabilize pressures. by We benefiting inflationary and to encouraged our our are are begun efforts input profitability as to have from levels offset taken costs

chain We we move are as forward improvement XXXX. supply seeing signs in of continued

macroeconomic order experienced environment. strong, challenging our the products remains cancellations not for have Demand we despite and

the to to in of the completion form feel in goods inventory in is strong sales best investing We have decided, in use light of in cash and accumulate environment. the business our manner that current elevated and this near backlog, our our continue of

backlog. supply to Meanwhile, taking opportunities the and we evaluate to revenue we to stability significant all all of its deliver going possible are as to steps recognize chain goods our on ensure as said, forward. quickly our continuing necessary are improve That finished flexibility

diversify chain focused engineering to integration feasible. our will supply to and to to constraints continue We with utilizing new vertical improve and on our redesign adapt where consider our sourcing ability capabilities suppliers,

our makes approximately demand remained of In our XX% international which business, up sales, strong.

the first During believe experienced we benefit recognize increase that the year and partial quarter, full the we will we these of the from a benefit increases implemented as progresses. price price

during turn over to I'd quarter. first before the the the call Debbie, to like we changes acknowledge Lastly, made I governance

challenges results our the the we've able improving and our to structure. and cleared pandemic operating were governance financial to of our As improved, turn we attention

in XXXX, refreshment Committee in governance Nomination is Walton's well of to and began qualified appointment accelerated to Governance Board XXXX. with recognized Board and Ms. Walton, appointment the of and this process a nationally with to the effort. Our Leigh earnest Chair in professional her August lead corporate

to continuing shareholder During their forward with quarter, the to They Miller and qualified to to we demonstrated Board. added work part have already Industries directors we are maximize team of new highly value value. four our as first looking them

compensation feedback on and Under input a with Industries believe more Miller consulting, position aligned to our new governance executive a these structure. relative closely proxy profitability to executive also compensation with long-term from based and success. changes and our We also We've compensation plan, in compensation interest shareholder group leader the shareholders from executive and for peer Pearl this will Meyer, adopted management tied more and plan. closely is

more Now financial the I'll detail. over the quarter turn review in to Debbie, first call who will results

outlook. closing comments on update Following Debbie? and our her remarks, some I'll provide

increase first quarter driven morning, XXXX by $XXX.X million our XX% year-over-year were quarter sales million of across demand and for first XXXX, everyone. all versus Thanks, $XXX.X deliveries Net products. continued Will increased the finished the goods and a good strong for of

quarter in to levels. largely the our increased operations $XXX.X for XX.X%. XXX million points cost XXXX, Cost of is sales, XXXX. to as compared decreased increase the percentage at our The revenue of $XXX.X to XX.X% of first prior approximately of higher million Cost a due of period from operations first operations quarter for of basis net the year

period. inflation for XX.X% of improvement increases gross on was price, million in net $XX.X for was X.X% profit prior of The some or compared Gross cost of quarter first million by to the margin the materials. driven raw the stabilization or net our improved of $XX.X and sales year sales XXXX, year-over-year delivery

mix XX declined a sequentially, to quarter-to-quarter. due margin which basis Gross sales points fluctuates shift in

our has our quarter first been fourth quarter-to-quarter than quarter. historically Additionally, higher

gross strong to year-over-year continue expect improvement. margin We

both associated SG&A accruals non-recurring the in as quarter -- first XXXX, new approximately and executive well professional million expenses in compared due million plan. to compensation as fees were associated legal bonus million of well costs with increase of quarter XXXX. first largely the The as as $XX.X $X.X $XX.X our with is to

year As X.X%, the of was SG&A percentage prior than a basis period. higher points sales, XX

quarterly quarter costs. be expect these in consistent excluding would SG&A levels expenses non-recurring we to forward, with Moving the first

up levels, for XXXX quarter increases in was down revenue. floor the distributor increased plan interest which as first million for $X quarter costs the up first flex $XXX,XXX reminder, of with XXXX expense to and higher our rates a related Interest from financing debt and

XXXX the $XX,XXX and pound. rate euro quarter to currency for of the fluctuation the was of quarter Other exchange for $XXX,XXX, compared to British of income attributed expense first largely first an

tax quarter jurisdictions year. tax to prior rate the foreign adjustments first tax to effective for up our in the to quarter our due last during XX.X% was compared increase, favorable compared Our increase year --

of would of tax and quarter first line or of rate moving in is the share, XXXX. to per effective to we rate net per our first income or in what expect $X.XX $X.X typical similar Net $X.XX for share was XXXX quarter's million income $X.X forward. with This was compared million diluted the diluted quarter

million was cash XXXX the March of of $XX.X as XXst equivalents December $XX.X balance compared cash million of as million as to Turning sheet, and XXst XXXX. and to March XXst $XX.X XXXX

XXst to million Inventories XXst as March as of December as was $XXX.X $XXX.X of as $XXX.X XXXX, XXst as March $XXX.X XXst were million XXXX. million, March receivable $XXX.X compared Accounts December million XXXX of XXst and XXXX of million XXXX. to of of XXst and compared million $XXX.X XXXX as March

As making we invest given the to our were our Will elevated effort mentioned earlier, inventory to continue concerted backlog. in

goods see meaningful and to in of starting component more match-up are the the We parts. delivery purchase of finished improvement

December the $XXX.X March million XX, million as $XXX.X XX, XXXX we However, XXXX as prudent of to environment, March payable it's compared XX, still XXXX. as and given of in was $XXX.X million demand of Accounts feel inventory. invest to

quarter million balance line remained revolving the at on outstanding During our million. our $XX $XXX credit

million with in a pay the current $XX million. we by of balance balance However, $X April down

to relates allocation, remain dividend. it As focused we on capital our capital through returning shareholders to

health continuing in our and productivity, improve safety the and to invest also that employees. capacity projects are We of

alluded we're of As we aspects also our in-sourcing chain. feasible, Will to potentially are supply looking at some

as to to the are shareholders, and especially, receivable business reduce addition investments expense, also balance cash. associated to capital striving and in we returning the In accounts interest these further convert our our to debt

past, we're a data-verse As we the company. stated have in

always shareholders. However, focused when making our the on on investment decisions are for allocation we long-term return capital

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

Now to back for I'll closing over some call turn the Will remarks.

and Thank a backlog strategy, marketplace. demand the XXXX strong remain products given our our our confident strong you, is in in the off Debbie. to we start and for

inventories continue to and down. We are well-positioned we and to expect we accumulate availability near-finished as deliveries backlog form as inventory deliver of further improve the in on this cash would come goods

in encouraged our billion to margins. sustain current we confident our we'll the increase significant ability to dynamics, significantly improved strong year-over-year over profitability start in year-over-year revenue and believe generate be are improved by profitability. in market We Based annual with and on $X are able

thank entire always, and would their team to employees, customers I support of suppliers, Industries. As of our for Miller shareholders management continued all the like and

for any questions. At this like open the to time, we'd line

question-and-answer begin from Ursaner now Instructions] ahead. session. question [Operator will first Ursaner from The Please the go We Family Office. Arnold comes

number price in better My for increases remarks, to you gross a is was I the QX relates morning. Thank are Debbie have an have closed I days guess especially, would one with Good Hi. would --in questions. just of couple. your in QX In issue. coupled have versus one margin. prepared mix seasonality QX a you from your I taking to put thought question mentioned the gross had the margin, you -- my plants But first QX. I have January. you I much

the of how importantly impacting So year? margin, think comment about it little the more could the you factors on balance gross a we should on but

Well, QX. there you past look favorable years year quarter is to in And a if XX historically generally I the XX were think, over end certainly if and margin at QX. QX historically year look years you adjustments than lower the company this

this impact margin. direct should on year gross Except pretty a in you price Okay. had dramatic increases have put that

Those calls in quarters, price increases until as in did were but implemented, previous QX. conference effect not mentioned we of previous March they take

for benefit some of but increases price did we March. So only those see

Okay.

were So that's January you different going calls than going in previous X% -- said they X. your where was effective

correct? So that's that Is a change.

said delayed a further -- March. them And we think stated we in believe until what that. I originally, I we then, statement that

increase. price then, we customers. So, delayed originally, January anticipated X to later for And March we a that

Will, of you I Okay. may you. call ask since answered one that

a said likely how in enhance shareholder you're And, next obviously, investor is Thanks. refresh get the statements, direction. speak attend front upcoming step planning hope the you months? to to plan public to investors several you have Could you in Board in that in year. of to in the You, or actually engagement conferences

Yes.

our some attend. working conferences pick to to out We are currently with of Board Directors

those what to believe but they conferences We to at best that this for company have input this certainly with forward the on audience. the have best time, is the attend not looking I'm pinpointed they

are we -- call -- also to joining to investors or refreshed We've to investor.relations@millerind.com call. visit make request we're in the so Investor for easier trying added Relations interested well. the the millerind.com/investors e-mail can as access that And our it they website,

Okay.

Another important kind of investors. for question

might You Could add more detail areas? likely easier that which acquisition this products you or you do whether it you as through be might mentioned in through engineering more investment little internally. product or of a specific of in-source some you on you comment would just mentioned, more

evaluating facilities. of supply to at this continue that, focused believe parts, on engineering side. raw this of materials we diligently to we time can clearly we're work this for increase all to I at that But our our We're component importantly, on more Well, or still everything time. potentials doing

the of for ex expect sure to prepared quarters your QX. we be similar compensation question in the if the year. had you commented treatment for some I not that, changes. of A SG&A, On I'm retroactively should remarks accounting there your understand items Deb, the into Okay. April levels I may. one-time remaining Obviously,

the items Thanks. SG&A So expect next rate can separate us several a run and out maybe for give you quarters? we the one-time should

Yes. accrual The to the was one-time expenses increase additional we the compensation don't were those that changes. recur. $X.X expect million around But retroactive for

the for similar would rate of year non-recurring those the So items going QX be run $X.X forward million. to ex

cliffs has And various significant Okay. quite the retroactive. and though levels is new compensation plan at

be will So of higher April all based at your levels you release? on XXXX, the XX accruing press through

accrual annualizing that's the each be be We'll quarter. will and on based what results

me. for Okay. That’s it

So I’ll you. let others in. Thank

you. Thank

you. Thank

remarks. This conference back to the now the turn would concludes I session. closing for like management question-and-answer over to any our

us thank conference on our and you to joining call you on call. for quarter look like we second speaking all I'd with the to again forward today

As the our join to earnings and value welcome and call. quarterly stated, input we shareholders our appreciate I we investors previously from

call, you. participate millerind.com/investors this If our on you'd and investor.relations@millerind.com. like ask how to updated e-mail Relations information please Thank Investor on questions website visit or

participating conference Chorus conference. and for Call Thank for thank in Ladies you gentlemen, now the you over. is and the choosing

disconnect now Goodbye. lines. your may You