Miller Industries (MLR) 10 Aug 232023 Q2 Earnings call transcript

Good day, ladies and gentlemen, and welcome to Miller Industries Second Quarter 2023 Results Conference Call. Please note this event is being recorded.

And now at this time, I would like to turn the call over to Mike Gaudreau at FTI Consulting. Please go ahead, sir.

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

CEO; management Bill are company's Will yesterday. were the the Executive followed with begin formal and from management, to Vice CFO; Miller, Executive With today session. Frank second Madonia, from will Debbie We President, Today's Secretary call discuss which a President Whitmire, by question-and-answer XXXX and here the Chairman Miller, of quarter Vice results, us and President and General team Counsel. Board; remarks are released

related conference more in to this provisions management company's note Litigation Commission. statements statements, to I'd over Please to the forward-looking Form the Private fully call filed on risks in filings the like the and Exchange with to morning's Securities Reform these Please harbor call, and ahead, safe described I'd to report may turn XXXX. in of XX-K time, attention like Will. annual the other make with go call Act Will. this which At Securities accordance your are of the

Thank everyone. you, and good morning,

and Gross shareholders is for reinvest points was an to year-over-year are testament due basis of year basis past XXX.X% our over to sequentially. very million, the solid increase to another which well facilities a workforce the quarter commitment increasing XX.X% XXX that during several revenue productivity. quarters $XX.X our while initiatives XX% as our gross year-over-year profit past our resilience improved chain of improved pandemic. We our the to margin as pay our XXX $XXX.X second quarter and with capital million, compared We points of record generated prior the This supply in of to increased over to report demonstrates the our connection off. decade use undertaken efforts in quarter, to strategic pleased in we've to continuing invest are our

what for we We are a production a And large offset productivity the to consolidate pandemic, in on component output Hydraulic improve by our profitability to been means provides us this moving flexibility pressures the availability The historically, continue pricing have lead acquisition our seeing finished have to more bit optimistic to forward. vertical production lead goods constrained give behind and driver maximize adjustments than initiatives ability disruptions. This since continued and created our challenges particularly cylinders and to benefits decision acquire times, production. from custom facing hydraulic after the our focused to about integration Cylinder context inflationary are longer Southern was has To this maximize May. delivery times. execution will sourcing on of recently normal minimize

near end no to We record and all ability deliver our are remains even demand in markets strong levels. our significant of far. dynamics products finished our in and our cancellations elevated despite continued ship through have had earlier. But chain enhancements improved mentioned and XXXX our to productivity product, supply goods so our customer ability backlog for experiencing We've

continue As demand. results service our is our to increase of backlog, to a elevated it to the inventory result we prudent levels and our strong financial believe

year. inventories slower than at to rate in prior expect we'd grow However, a the

see. In our demand strong International business, by we XX% are levels which sales, the makes encouraged up of to our approximately we continue

as in finalize in we During orders invoicing second been pricing. offered quarter, of have backlog that we our experienced protected margins the the improvement our not

I'd make Debbie, turn call over Lastly, to workforce. few regarding the like comments a before our to I

company align mirror performance. compensation As a to quarter, announced our plan executive reminder, in peers our to last and to compensation we executive changes order

these adjustments. exercise, needed be made to compensation that modified provisions employees we and As have determined part nonexecutive for of that some

treat the lives, skilled our will not team. we It has benefit utmost our to culture our our and their well try respect always will critical been is to their employees only success. part changes but company's best incredibly company's Miller with These benefit that of expertise retain as as our Industries

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

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

and strong quarter sales of increase Will, good Thanks, the versus increased were shipments driven on a Net for the morning, second XX% finished XXXX and million everyone. execution quarter year-over-year, backlog. for XXXX, million by $XXX.X our second $XXX.X goods of

prior operations XX.X%. XX.X% and to to of an from XXXX to more of sales or Cost as X.X% million second Cost improvements, increase million for quarter revenue year approximately price percentage this in was environment points a sales year. deliveries. XXXX year-over-year quarter our due The our The second year $XXX.X earlier the of basis margin for $XXX.X increase adjustments $XX.X XX net -- was chain to XXX increased higher second compared or by driven period sales for largely of from Gross earlier, realization $XX.X the of in net decreased our of the the million profit XXXX. supply period. further XX.X% of productivity compared the and Will largely a mentioned is net implemented improvement reliable million cost operations for to operations we prior quarter levels

quarter as the $XX.X quarter-to-quarter our in XXXX can a to achieve We SG&A the That normalized mix. as to subject you were expenses XXXX view margins remind margins in fluctuations second gross the representative said, based on for environment. of are product every business we million million compared our gross XXXX. quarter more second what in quarter, $XX.X

points of Investor is basis and executive Relations. well legal increase to corporate largely percentage compensation plan as than related The costs governance of our net as due period. X.X%, to year our and XX the was prior new a consulting refreshment higher sales, As SG&A

As Will for for that compensation increase. we earlier, provisioned nonexecutive also employees the mentioned contributed new structure some a have to

Cylinder levels second in Moving quarter quarter, our along forward, our expense assuming $XXX,XXX the with revenue. our for plan currency was related levels to similar $XXX,XXX primarily shifts rate acquisition an from expenses debt we the to second with financing for XXXX $XXX,XXX to up income quarter down related fluctuations. would XXXX, Interest an Southern floor costs, to $X.X to million, of compared second performance. the earnings with increase related for which expect revenue quarter second was increase distributor XXXX to largely be quarterly Other attributable and the up some and expense of Hydraulic second the quarter for SG&A in consistent exchange

benefit effective and slightly quarter various tax XX.X% lower to primarily for Our rate the due tax the of credits. was year-over-year

share or $X.X million of for $X.XX net diluted $X.XX second the Net income XXXX per compared quarter the to of $XX.X income was share quarter in or diluted XXXX. million per second

to of was as of XXXX, XXXX, $XXX.X March XXXX. XX, Turning as compared sheet. XX, March XX, XXXX. Accounts million XX, receivable $XX.X XX, and as June compared to million June XXXX, million XX, Inventories of XXXX. cash as as June $XXX.X of XX, XX, million compared of equivalents balance XXXX, of December the million of XXXX, $XXX.X to to as of $XXX.X as and XX, March as and $XX.X was $XX.X were $XXX.X Cash million million million December million December and as $XXX.X XXXX, of

and to improve raw over levels form the chain of To our maximize elevated the we context, in taken increase year continue we to in flexibility stability provide steps deliveries goods number our of finished to given a have more past materials, near and inventory and bit a completion, supply our goods backlog.

into possible. We XX, working inventory quickly for million customers' and as to goods finished as of to capital XXXX. have was product us available million get payable to March December critical $XXX.X XXXX, Accounts $XXX.X XX, turn of as will invest parts June into the as in XXXX, $XXX.X of continue as our XX, to as necessary and compared million hands

to $XX During revolving facility, primarily our our the Southern quarter, related outstanding Cylinder. Hydraulics the $XXX on balance acquisition of to credit million increased due million

relates allocation, areas safety to Productivity been focus in core the our dividend over and capital the years returning it expansion investing our shareholders of an X has capacity and of past to and the improvements, health few industry-leading employees. through capital business: As

We the to shareholders our the capital are out always of in seeking to will company. return and opportunities in dividend invest continue our form to

priority, be reducing capital debt top to it our balance. relates moment, our However, will the allocation at as

have the best today, a comfortable debt-averse feel are our customers we and believe in we is debt. of we reduce said, with we yet cash that company, as use investing and always current service As our debt our to level, inventory

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

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

Debbie. you, Thank

in are taken quarter strategic results demonstrate positive recent the clearly we've results. second steps that yielding Our quarters

now Our benefits. enhanced production improved showing efficiency product and deliveries are tangible

to significant the these pre-pandemic profitability our increase potential. instill by and us our be believe encouraged in achievements barring in we long-term able confidence year-over-year sustain are These any circumstances. strong We unforeseen with margins will

in Building year-over-year XXXX, generate over first significantly on ability with performance profitability. confident revenue the our annual solid the billion are half we to in $X of in improved

suppliers, the always, shareholders, support to for As to our the we'd time, their customers like of Industries. line would continued any management entire thank Miller like questions. and this team all open At of and employees, I

first from question comes Mike Shlisky D.A. [Operator Instructions] with Our Davidson.

larger, year? maybe half models commentary, and delineate might your on Could an the for the of be you Just with? can chassis X] the first us for trucks working of you for quick Maybe that look of heavier between And here. class [X, ones in products? that the might How a some class it [X, how X] you did smaller couple maybe of maybe back throughout trucks trend maybe, that the -- quarter? give some supply if update

Chassis Certainly, still quarter OEMs are the similar date. we than chassis slower Yes. issues expected. been probably the supply were with dealing deliveries a have to chain in that little

based have negatively of the at year believe we OEMs We deliveries to on have on this through see production demands. not We necessarily chassis enough And meet level conversations point. should appropriate impacted the order. end with our the at our been customer

also compensation of that employee it there's in the you those do be want I changes you to there half topic outstanding. feel at whether behavior that change the who the of company sector. in out cultural been like or up any you hot any any to as recently. might Great, the [indiscernible] by changes Or employee follow feedback had Definitely made were early year? still Have some affected recently? for a industrial on

very Mike, cut the at of didn't apologize. hear the I right out can't the you question. I there beginning I context, --

was made was the on impact were the culture made about that employee recently I I I to on too the in if are make had among early it just asking changes Or tell curious operation? an the various everyday the it going office you to is compensation the had apologize. compensation recently? in the and employees. that -- shop changes changes to if any floor

we're to of our No, employees, that I of done view great in what this only that we've all will employees everything point pride our I to any always future date think the impacts they at employees looking negative We the do changes. in don't any believe how to be and compensation we've and company. take beneficial the hourly management seen and from

was going Have I around you changes to positive Actually, how about seen ask impact. people... any

positive -- believe I at morale employee is at facilities Yes, we this that, time. our have overall,

hit time our a employees, we luncheon provide of Just every which actually quarter, -- a last we all goes very over for quarter well. record

do extra time to over a feeds employees. little off the of and a get luncheon hourly management We employees where of staff lunch very the work. goes That well. they all executive So

finished also both annual our and picnic in Pennsylvania. Tennessee facilities We for our just

Tennessee. all to So we all And that in facilities. morale positive in we we believe our have -- sorry, facilities date, very now X of

or got one Outstanding. you Maybe acquire M&A of made. And just and you company to that And an make surprised sell how could customers, last building them Miller that key you Southern to that provider? those to hydraulic besides as to will I'm have curious, do and sales Industries? outside on you the to Hydraulic. more customers tell continue if is the changes us operates the for you one been deal -- company in-house Anything the me, once at

Everything time. audits no smoothly this the through nature. things that gone of inventory So, unanticipated issues very or unknown at and has

customers, up cancellations and order that regards from to but made outside customers bank. they orders on we've no upgrade to already nature other other major no But list things have outside We the get -- new at we at Industries, than standards, issues. had current are sell Miller to of time to this facility and customer and adjustments security the moving into evaluating customers those suppliers the working to our With do to IT either.

turn time. for There like are back I at the to comments. would further no Miller floor now over questions Will closing to this

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

on call, you the to If how millerind.com/investors and please Thank website Relations updated all, Investor visit questions participate our God Bless. like information would you investors.relations@millerind.com. on e-mail, and ask or at

concludes today's conference. This

at your your participation. disconnect may Thank You lines time. you for this