Miller Industries (MLR) 9 Nov 232023 Q3 Earnings call transcript

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

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

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

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

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

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

a And mine to fruit have XXXX, results into good to environmental had impact, to the and we actions year. and really feeling safety research a our opportunity increase development, not development we are great improve freestanding our quarter, macroeconomic and automation yet X positive the . In research again another and investments It facility product has see accelerate and strong over these yielding an we X this last and our been results. integration is our really have on you, bear to morning, reduce proving Unfortunately, role, strategic environment of in operating everyone. this robotics, -- once Thank until great within modernization. years, footprint. report focus that given of stepping innovation built a

best in reported on strong have place, performance Those production and inventory attracting strategic initiatives strategy believe paying our the year facilities, decade, elevated industry. to the put execution the capacity in and our last retaining in year. team's we've our we the service this in attributed are made both to talent over thus the backlog our this to increasing We off capabilities investments far that improving and is accumulate we our investments

third finished the to $XXX.X due execution generated XXXX, quarter an of of of backlog form goods In XX.X% healthy customers. our in we our million, to mainly deliveries revenues of the on improved increase year-over-year, of

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

The the is impact due year-over-year of enhancements year. a I the mix compared product to those prior mentioned and largely to material earlier, raw costs increase the productivity of stabilization favorable

recent also provide is announced we of addition, we We're portfolio. In our SHC on an our as this way of wanted update May in Southern or acquisition very Hydraulic Cylinder to with the of which pleased part performing year. SHC,

that this said to extremely the dividends is it our relates clear familiarity to and company we've prior As integration. acquisition, knew is paying we it as well previously,

return longer year has team all products been exceeding a of up X SHC not particularly meeting are some and cylinders tremendously, if and helped expectations our has the of investment calculations. delivering historically on supply of our The shore chain in ahead that seamlessly because have our is times. in acquisition the SHC lead

demonstrates business, overall to strategy. smart my days on are early complementary the acquisitions this if in investments make willing our and transaction we of that they're they are and During organic we focused tenure, accretive our to

the chain woods completely are we difficulties. Despite all out positives, not of supply on the

is macro we improve. some challenges. That demonstrated year results continue in production, so determine much that a when supply chassis health chain this it our high that better in difficult is the it despite have Some disruptions will and far can than and suppliers facing had perform dynamics year to to overall was have level a ago, said, at

would that thus disruptions I not like we have large OEM of any the any experienced far. to Additionally, note strikes from

in Demand all our our growth is Because improve all goods remains deliveries. healthy in and substantially as possible. longer same first products demand, of still -- customer and this in our year-over-year customers X strategy sales our our business our remains to year, and to levels. as execution investing months, record the the immense backlog and markets. times end has for Backlog to remains lead no throughout the improvement higher prepandemic now across finished in as our high at improved it due levels strong year After inventory of the than our of been ship quickly

extremely are expect rate levels prior slower a at have managing than the We to grow focused our year. inventory on and inventories in they

to at use it cash the believe our However, best moment. are with continue we the we is of demand the seeing,

approximately over hand Lastly, before on which I sales. to military our call makes I want our of business, quickly to XX% up and Debbie, international touch the

As domestic demand in business, our remains strong.

see We are activity and in are military the encouraged space, by of this business the well. of we as starting more our aspect performance to

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

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

compared were by product XXXX million XXX Net everyone. XXXX third driven period of of quarter Cost largely an XX.X%. basis continued of to increased improved to of morning, demand. sales cost XXXX, due sales to is $XXX.X the for year-over-year increase, quarter increase year in deliveries recover. of as our operations decreased good net percentage third the meet operations in quarter a XX% increase largely of points approximately to XX.X% XXXX. supply for chain third The to finished $XXX.X to and a the prior of the of of for $XXX.X from million versus $XXX.X for disruptions third million the Cost quarter and Will, delivery Thanks, operations million

of was driven million $XX.X largely year net Gross mentioned to quarter prior period. of sales and profit productivity favorable was the to improvement year-over-year for third year compared Will XXXX in period. prior raw or product for by XX.X% sales earlier, our the The compared initiatives material costs reduction million that the a mix net of XX.X% $XX.X or

always results initiatives our While are gross remind that extremely margins to we much the encouraged yield fluctuation improved begun compared mix, prior subject are you we productivity to product some on by quarter-to-quarter our to year. based have

the of in million $XX.X quarter $XX.X in were to XXXX. expenses the of quarter XXXX compared million third third SG&A

largely bonus accruals as interest adopted income executive investments compensation set well align plan, closely result and SG&A and pretax shareholder lower XX As adjusted of which a forth percentage as training to X%, in was we retraining than prior more The expense year due more extremely SG&A as management higher increased as a our was net points of specialized period. basis by new the increase sales, in our workforce. to

We have important everything employees accruals Miller able we also our increased the are success. long-term easily Industries. backbone aspects here for Investing our of to are as in at of of our they achieve team bonus the most our one replaceable under is

approximately expenses would quarterly we forward, SG&A Moving to these remain at levels. expect

increase the higher financing revenues. costs, for by floor XXXX along expense an levels, the function related million, is of an in increase with $X Interest quarter which a our up was quarter plan $X.X driven third XXXX debt million to third from for largely customer

Other compared quarter an currency the to shifts. for of income of third attributable was to exchange $XXX,XXX XXXX quarter expense for foreign $XXX,XXX the rate third

adjustments to effective to Our slightly was related tax lower and credits the quarter sequentially, our primarily tax favorable provision. rate year due for XX.X%, than year-over-year prior

or million of result Net quarter share a was all was income compared of discussed per $X.X direct -- net that share $X.XX factors for third the quarter I $XX.X the to $X.XX or per quarter diluted of margins. profit XXXX above revenues impacted diluted and million our the third XXXX, third in income

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

of $XXX.X XXXX. as June to as December was XXXX, $XXX.X as XXXX, of XX, September compared million XX, receivable and million $XXX.X million of XX, Accounts

of $XXX.X as June December million XXXX, of September $XXX.X XX, were to XXXX, XX, compared million as as XX, Inventories and $XXX.X of million XXXX.

Will the to inventory this will improved when our planning while dynamic strategy hopeful we has impossible into it's and are inventory the turning determine term. peak we been we progress inventory monitor This are making of in a near significant our significant continuing year-over-year meet in requirements will to reach that While -- results. levels to we in goods. to earlier, And shift, constantly and finished a our are accumulate immense refer piece

this is we now, capital. our make best working can investments the with of For one

XXXX. XX, of June of September to XX, $XXX.X compared as XXXX, as and was of payable $XXX.X $XXX.X XXXX, December million XX, as Accounts million million

million facility our balance in unchanged quarter, includes outstanding of acquisition million remained Our this revolving $XXX of our of May $XX credit SHC which XXXX. on

capital been paid XX recent returning capital dividend, we allocation our which to straight an have In industry-leading through focus something proud terms strategy, of. of quarters, our are for has centered broader incredibly we shareholders around

debt continue capital we prioritizing balance. this to areas our returning we our look to dividend will always we reducing have, for in While as invest and business, to are through shareholders

if in diverse our the the have a not short we interest extremely position. be acquisition opportunity flexibility right of liquidity as comfortable will We it. shareholders. been do we balance materializes, our Miller that said, term, we believe Industries and the SHC, with And have though demonstrated debt That pursue and our in and to anything company, such debt the have always both we best we are expect feel reducing

per Directors of at December of of X, Board the on XX, share the XXXX, Lastly, our December quarterly shareholders $X.XX XXXX. dividend cash business payable of approved to close record

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

proud back undertook spades. of we first in The and navigating I'm we've a Thank we has in XXXX. strategy crisis and global X as bit, supply Debbie. the company made months you, paid pandemic the of in a our incredibly chain business off investments achieved the Stepping while what

for some for and to in operational revenues excellence, previous our of per not for earnings we validation managing long Just year This, XXXX, quarter-to-quarter the surpassed already share. X the embracing records the term, full innovation is quest of business and perspective, fluctuations. months while have for us, first

any execute know am we have right overcome the the strategy clear will we face. challenges to that might hurdle confident in strategy place I never be, the and that team right we and While what next on to

of it are $X for full should result, significant year-over-year billion improvements a revenue we our meeting year come annual still and no the in surprise XXXX. in as extremely As confident for expectations of profitability over that

I I most year. for results record have on the believe has which workforce talented the leadership our this of to industry, mentioned and X us in first allowed we team delivered the opening execute and As in initiatives my remarks, strategic months

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

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

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

ask pay balance outstanding, to right it do inventories that and sound maybe X? I first point, time and then the you most look beyond dividend the If I quick at debt debt to, cash capital raise that ability the to you've ability just of and appropriate reduce the and the general you question. want the some you'll Am seems have got you've question time, essentially at sheet track? inventory once allocation inventory a on a reduced I to like It stretch that your enough that, the your and the of map have over debt. much at increase with out doesn't then like the in have that room, take And maybe down

required reaching mix and on Mike, the peak are we feel we yes, based track. the the have do you right at levels that inventory the of different moment. product that initiatives are We like on going

for So peak, priority to would certainly debt. yes, intention down once to is the pay us. That the get we that be a

far as analyzed Board decision made. that's decision. goes, dividend the It Board a quarterly the is is the and by As

that would be So a time. that make decision at would they

And mentioned inventories, you better about improvements productivity. in if chassis having in growth speaking your had I the I the productivity, to the then but you quarter wanted to just see ask a and door? had wanted in sales additional that some also, it's a Or chassis are out pool remind you simply cases, supply Will, Perfect. quarter, in did Okay. of also And do you -- help point? at it's own for us just it, upfitting at the you the chassis all . non-pass-through bailment getting more most you just

we Yes. regards do With do, chassis. we to purchase resell and chassis, the

customer So demands being do not chassis. we is meet pool. the to a part and own With It of to deliveries. chassis able regards and

bit in QX their a deliveries of We OEMs in expect into QX going struggle network with the from diligently Although our and QX did that and had we've production discussions into seen at at believe the QX and to working to resolve deliveries, the with to chassis next quite we year on better facilities they are year. issues chassis levels continue this so both far enough them. ground have we've our distribution

Okay. that ask I about was going inventory. distribution to

any Maybe more but then is topic SG&A forward then do expenses company-wide Will going how sense I appreciate your consistent R&D, in you R&D question that. I somewhat innovation, even we do that on elsewhere? just time? investing on any So rate bit intend of then consistent and mentioned you of to an add SG&A? answering you basis, increase also on mentioned dusted be overall And guess, a -- had Debbie, about over cetera side. et you or a you'll you the mix SG&A different run though What changes forward. one you I'll the selling in going the on perhaps

No.

I have pretty point. think the good see we at for everything we run that moment on rate this horizon the a at

going pretty believe consistent should we it is I what forward. So with see

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

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

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

teleconference. today's concludes This

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