Financial Data and Key Metrics Changes - For the full year 2024, net sales were $1.26 billion, a 9% increase from $1.15 billion in 2023, driven by strong demand for products [11] - Gross profit for 2024 was $170.8 million, or 13.6% of sales, compared to $151.9 million, or 13.2% of sales in 2023, reflecting an improvement in product mix and supply chain [11][12] - Net income for 2024 was $63.5 million, or $5.47 per diluted share, up from $58.3 million, or $5.07 per diluted share in 2023, representing increases of 8.9% and 7.9% respectively [12] - For Q4 2024, sales were $221.9 million, a decrease of 25.1% from $296.2 million in Q4 2023, primarily due to a decline in chassis shipments [13] - Q4 gross profit was $33.5 million, or 15.1% of sales, compared to $38.6 million, or 13% of sales in Q4 2023, with margin improvement driven by product mix [14][15] Business Line Data and Key Metrics Changes - The decline in chassis shipments in Q4 2024 was attributed to elevated shipments in Q4 2023 due to supply chain disruptions [13][14] - The company noted that gross margins vary due to product mix, particularly in Q4 2024 [14][20] Market Data and Key Metrics Changes - The company anticipates a return to normalized chassis deliveries in the second half of 2025, which should stabilize revenues and margins [22][37] - The rising cost of equipment ownership is impacting end-market towers, with increased insurance premiums and interest rates affecting customer purchasing decisions [25] Company Strategy and Development Direction - The company is focused on returning capital to shareholders through dividends and share repurchases, with a recent quarterly cash dividend of $0.20 per share approved [19][43] - An expansion of €8 million at a facility in France has been authorized to meet future demand [44] - The company plans to launch multiple new products across all categories to enhance offerings and support growth [38][45] Management Comments on Operating Environment and Future Outlook - Management expressed confidence in a strong second half of 2025 and beyond, citing stable demand for products and improvements in supply chain predictability [37][40] - The company is preparing for advanced clean truck regulations and expects to have CARB-compliant chassis available by the second half of 2025 [36][42] Other Important Information - The company had a cash balance of $24.3 million as of December 31, 2024, down from $40.6 million at the end of Q3 2024, primarily due to a reduction in accounts payable [16] - The debt balance was $65 million at year-end, with a focus on reducing debt levels as cash conversion improves in 2025 [18][19] Q&A Session Summary Question: Does the 2025 outlook include financial effects of military developments? - The current military contract production is expected to begin in late 2026, with most production in 2027 and 2028 [51] Question: How do you see the first half of 2025 compared to the second half? - The first half is expected to be similar to Q4 2024, with chassis shipments lower than normal, while the second half is anticipated to show upward momentum [53] Question: Can we expect margin levels to be the same as Q4? - Margins are expected to be relatively equal to last year [55] Question: How is the company managing working capital with anticipated sales decline? - The plan is to reduce inventories to historical levels, which ran about 20% of revenue pre-COVID [57] Question: Are you doing anything to help dealers navigate the next few quarters? - Dealers are currently healthy and working through their chassis inventory buildup, with expectations of returning to optimal levels in the next two to four months [61]

Miller Industries, Inc. (NYSE:MLR) Q4 2024 Earnings Conference Call March 6, 2025 10:00 AM ET Company Participants Mike Gaudreau - FTI Consulting Will Miller - President and Chief Executive Officer Deborah Whitmire - Executive Vice President and Chief Financial Officer Conference Call Participants Linda Umwali - D.A. Davidson Operator Good day, ladies and gentlemen, and welcome to the Miller Industries Fourth Quarter and Full Year 2024 Results Conference Call. Please note this event is being recorded. And n ...

Financial Performance - For Q4 2024, net sales were $221.9 million, a decrease of 25.1% compared to $296.2 million in Q4 2023, primarily due to a decline in chassis shipments[2] - Gross profit for Q4 2024 was $33.5 million, or 15.1% of net sales, compared to $38.6 million, or 13.0% of net sales in Q4 2023, reflecting an increase in gross margin driven by product mix[3] - Net income for Q4 2024 was $10.5 million, or $0.91 per diluted share, down 36.9% from $16.7 million, or $1.45 per diluted share in Q4 2023[5] - For the full year 2024, net sales were $1.26 billion, an increase of 9.0% from $1.15 billion in 2023, with net income rising to $63.5 million, or $5.47 per diluted share, up 8.9% from $58.3 million, or $5.07 per diluted share in 2023[6] Expenses and Dividends - Selling, general and administrative expenses for Q4 2024 were $19.7 million, or 8.9% of net sales, up from $16.4 million, or 5.5% of net sales in the prior year, due to increased executive compensation and new product launches[4] - The company declared a quarterly cash dividend of $0.20 per share, marking the fifty-seventh consecutive quarter of dividend payments[7] Future Projections - In 2025, the company expects to generate revenue between $950 million and $1.0 billion, with diluted earnings per share projected between $2.90 and $3.20[10] - The CEO expressed confidence in the company's prospects for 2025, citing the normalization of chassis market dynamics and upcoming new product launches[9] Shareholder Actions - The company repurchased 49,500 shares of common stock during 2024, representing $2.9 million of a $25.0 million repurchase program[7] Asset and Liability Management - Total assets increased to $667,015 million in 2024 from $647,210 million in 2023, representing a growth of approximately 3.8%[21] - Current assets rose to $529,766 million in 2024, up from $510,471 million in 2023, an increase of about 3.0%[21] - Accounts receivable increased to $313,413 million in 2024, compared to $286,138 million in 2023, reflecting a growth of approximately 9.5%[21] - Total liabilities decreased to $265,985 million in 2024 from $299,290 million in 2023, a reduction of about 11.1%[21] - Total shareholders' equity increased to $401,030 million in 2024, up from $347,920 million in 2023, indicating a growth of approximately 15.2%[21] - Accounts payable decreased significantly to $145,853 million in 2024 from $191,782 million in 2023, a decline of about 24.0%[21] - Accumulated surplus rose to $254,938 million in 2024, compared to $200,165 million in 2023, an increase of approximately 27.3%[21] - Long-term obligations increased to $65,000 million in 2024 from $60,000 million in 2023, reflecting an increase of about 8.3%[21] - The company reported a decrease in the non-current portion of operating lease obligations from $506 million in 2023 to $227 million in 2024, a decline of approximately 55.2%[21] - The cash and temporary investments decreased to $24,337 million in 2024 from $29,909 million in 2023, a decline of about 18.6%[21]

Acquisition and Expansion - Miller Industries acquired substantially all assets of Southern Hydraulic Cylinder, Inc. in fiscal 2023, enhancing its product portfolio and supply chain stability[33]. - The company has invested over $100 million in property, plant, and equipment projects since 2017, increasing manufacturing production capacity and implementing advanced technologies[40]. - The company expects to launch multiple new products throughout fiscal year 2025, continuing its focus on innovation[38]. - The company has a diverse product line marketed under 10 separate brand names, catering to various customer segments[20]. Manufacturing and Operations - The company operates ten manufacturing facilities in the U.S., France, and the U.K., utilizing advanced technologies for efficient assembly-line manufacturing[35]. - The backlog of manufactured equipment returned to historical levels during fiscal 2024, but demand slowed in the second half due to delivery timing issues[51]. - Management expects a harmonized flow of manufactured equipment and chassis deliveries throughout fiscal 2025, despite potential global supply chain disruptions[51]. Distribution and Sales - In 2024, no distributor accounted for more than 10% of consolidated total sales, indicating a diverse distribution network[42]. - Approximately 76 distributor locations in North America and over 30 distributors in foreign markets support the company's sales efforts[41]. - Management believes that over 90% of independent distributors do not offer products from other manufacturers, reflecting strong brand loyalty[12]. Financial Performance - Net sales for the year ended December 31, 2024, reached $1,257,500, an increase of 9.0% compared to $1,153,354 in 2023[272]. - Gross profit for 2024 was $170,805, representing a gross margin of approximately 13.6%, up from $151,854 in 2023[272]. - Net income for 2024 was $63,494, reflecting a 8.8% increase from $58,291 in 2023[272]. - Basic earnings per share increased to $5.55 in 2024, compared to $5.10 in 2023, marking a 8.8% growth[272]. - Total assets as of December 31, 2024, were $667,015, up from $647,210 in 2023, indicating a growth of 3.9%[269]. - Total liabilities decreased to $265,985 in 2024 from $299,290 in 2023, a reduction of 11.1%[269]. - Shareholders' equity increased to $401,030 in 2024, compared to $347,920 in 2023, representing a growth of 15.2%[269]. - Cash and temporary investments decreased to $24,337 in 2024 from $29,909 in 2023, a decline of 18.5%[269]. - The company declared cash dividends of $0.76 per share in 2024, up from $0.72 in 2023[272]. Employee and Labor Management - As of December 31, 2024, the company employed approximately 1,711 employees globally, with 98.8% being full-time[56]. - Employee turnover rates have trended down throughout fiscal 2023 and 2024 due to various retention efforts[60]. - The company has invested in training programs, including a Welding School and a Front-Line Leadership Academy, to address skill shortages and develop future leaders[58]. - The company has experienced substantial increases in employee wages since 2022 to retain and recruit skilled labor, which may continue to affect profitability[109]. - The company continues to monitor labor costs and implement strategies to mitigate risks associated with employee turnover and recruitment challenges[109]. Regulatory and Compliance Issues - The company is subject to stringent environmental regulations, including California's Advanced Clean Trucks regulation, which may negatively impact customer demand[73]. - Compliance with new environmental regulations has already negatively impacted customer demand during 2024 and early 2025[73]. - The company is subject to various legal and regulatory risks, including anti-corruption laws, which could adversely affect its business operations[122]. - Compliance with environmental regulations, including those aimed at reducing emissions, is becoming increasingly stringent and may negatively impact customer demand[119]. Market and Economic Conditions - The towing and recovery equipment industry is highly competitive, with the company focusing on quality and innovation rather than solely on price[47]. - The towing and recovery industry is cyclical, with demand and revenues affected by consumer confidence and economic conditions, including volatility in capital and credit markets[111]. - Customer demand may be negatively impacted by rising fuel and insurance costs, as well as unpredictable weather conditions and global supply chain disruptions[114]. - The company faces risks related to government contracts, including potential decreases in government spending and intense competition for contract awards[113]. - The company is subject to risks from international political and economic uncertainties, including tariffs and trade restrictions, which could adversely affect supply chains and costs[104]. - The ongoing military conflicts in Ukraine and the Middle East have created legal, political, and economic uncertainties that may impact the company's operations[105]. Supply Chain and Inventory Management - The company experienced significant supply chain challenges in 2024, leading to substantial price increases for raw materials and component parts, which adversely impacted profitability and results of operations[95]. - In the first half of 2024, there was a buildup of inventory in the distribution channel due to elevated levels of chassis shipments earlier than expected, affecting sales[95]. - The company faced difficulties in accurately forecasting and managing inventory, resulting in unexpected production disruptions and increased costs[94]. Financial Risks and Investments - The company is exposed to interest rate risks and foreign currency exchange rate risks, which could affect cash flow and earnings fluctuations[245]. - The availability of capital and access to credit for customers has been affected by rising interest rates, which could materially impact sales[100]. - The U.S. Federal Reserve maintained elevated interest rates throughout 2023, but began to lower rates in 2024, which may influence inflation levels and customer purchasing behavior[102]. - The company has obligations to repurchase products from third-party lenders if distributors default, which could impact future revenues[138]. - The company incurred a net foreign currency exchange loss of $0.6 million for the year ended December 31, 2024, compared to a gain of $0.8 million in 2023[248]. - The company reported a foreign currency translation loss of $1.8 million for the year ended December 31, 2024, compared to a gain of $3.2 million in 2023[249]. - A hypothetical 100-basis point change in interest rates would have changed interest expense by approximately $0.4 million for the year ended December 31, 2024[246]. Strategic Initiatives - The company must continuously develop or acquire new technology and products to maintain market share, as rapid technological advancements characterize the industry[124]. - The company has incurred significant costs to implement security measures for its IT systems to protect against potential breaches[141]. - The loss of key executives could have a material adverse impact on the company's operations[144]. - The company invests significant time and expense in employee training, which increases their value to competitors, posing a risk of employee turnover and associated hiring costs[110]. - Rising costs of equipment ownership, including increased insurance premiums and fluctuating trade-in values, have negatively impacted customer demand for the company's products[101].

Group 1 - The most recent coverage on Miller Industries, Inc. (NYSE: MLR) was in January of the previous year, where a 'Hold' rating was reiterated for the towing and recovery equipment supplier [1] - At that time, shares had recently failed to break through their 2021 highs, indicating a potential resistance level in the stock price [1] - The investment strategy discussed involves buying undervalued profitable stocks with strong balance sheets and minimal debt, along with writing calls against positions for additional income [1]

Group 1 - Miller Industries, Inc. plans to release its Fourth Quarter and Full Year results for the period ending December 31, 2024, on March 5, 2025, after market close [1] - A conference call will be held on March 6, 2025, at 10:00 AM ET, which will be broadcast live over the Internet [1] - Listeners are advised to access the conference call 15 minutes early to download any necessary audio software [1] Group 2 - Miller Industries is recognized as the world's largest manufacturer of towing and recovery equipment [2] - The company markets its products under several well-known brands, including Century, Vulcan, Chevron, Holmes, Challenger, Champion, Jige, Boniface, and Eagle [2]

Group 1: Momentum Investing Overview - Momentum investing involves following a stock's recent trend, with the aim of buying high and selling higher, capitalizing on established price movements [1] - The Zacks Momentum Style Score helps define momentum characteristics, with Miller Industries (MLR) currently holding a Momentum Style Score of B [2] - Style Scores complement the Zacks Rank system, which has a strong track record of outperforming the market; MLR has a Zacks Rank of 2 (Buy) [3] Group 2: Performance Metrics of Miller Industries - MLR shares have increased by 2.35% over the past week, outperforming the Zacks Automotive - Original Equipment industry, which rose by 0.49% [6] - Over the past quarter, MLR shares have risen by 29.77%, and by 86.07% over the last year, compared to the S&P 500's increases of 9.71% and 33.24%, respectively [7] - MLR's average 20-day trading volume is 108,812 shares, indicating a bullish sign when combined with rising stock prices [8] Group 3: Earnings Outlook - Recent earnings estimate revisions for MLR show one upward revision and no downward revisions, increasing the consensus estimate from $5.60 to $5.68 over the past 60 days [10] - For the next fiscal year, there has been one upward estimate revision with no downward changes, indicating positive earnings outlook [10] - Given these factors, MLR is positioned as a 2 (Buy) stock with a Momentum Score of B, suggesting it is a promising near-term investment [11]

Core Viewpoint - Growth stocks are appealing due to their potential for above-average financial growth, but identifying strong candidates can be challenging due to inherent risks and volatility [1] Group 1: Company Overview - Miller Industries (MLR) is identified as a promising growth stock, supported by a favorable Growth Score and a top Zacks Rank [2] - The company operates in the vehicle towing and recovery equipment sector [3] Group 2: Earnings Growth - Historical EPS growth rate for Miller Industries is 15.8%, with projected EPS growth of 12% this year, surpassing the industry average of 11.5% [5] Group 3: Cash Flow Growth - Year-over-year cash flow growth for Miller Industries is 122.8%, significantly higher than the industry average of 0% [6] - The company's annualized cash flow growth rate over the past 3-5 years is 11.5%, compared to the industry average of 1.2% [7] Group 4: Earnings Estimate Revisions - Current-year earnings estimates for Miller Industries have been revised upward, with a 1.4% increase in the Zacks Consensus Estimate over the past month [8] Group 5: Investment Positioning - Miller Industries has achieved a Growth Score of B and a Zacks Rank 2, indicating strong potential for outperformance in the growth stock category [9][10]

Core Viewpoint - The focus is on identifying undervalued stocks using the Zacks Rank system and Style Scores, with a particular emphasis on value investing strategies [1][2][3] Company Summary - Miller Industries (MLR) has a Zacks Rank of 2 (Buy) and an A grade for Value, indicating strong potential for value investors [4] - MLR's current P/E ratio is 12.44, which is lower than the industry average P/E of 15.56, suggesting it may be undervalued [4] - Over the past year, MLR's Forward P/E has fluctuated between 10.40 and 13.12, with a median of 11.38, further indicating its valuation dynamics [4] - The P/S ratio for MLR is 0.64, compared to the industry average P/S of 0.75, reinforcing the notion of MLR being undervalued [5] - The combination of MLR's favorable valuation metrics and strong earnings outlook positions it as an impressive value stock [6]

Core Viewpoint - The sustainability of a trend is crucial for successful short-term investing, and confirming fundamental factors is essential to maintain momentum in stocks [1][2]. Group 1: Trend Analysis - Timing entries into a trend significantly impacts investment success, as trends can reverse unexpectedly, leading to potential losses [1][2]. - A predefined screening strategy, "Recent Price Strength," helps identify stocks with strong fundamentals that can sustain their upward momentum [3]. Group 2: Stock Example - Miller Industries (MLR) - Miller Industries has shown a solid price increase of 29.6% over the past 12 weeks, indicating strong investor interest [4]. - The stock has also increased by 10.8% in the last four weeks, suggesting that the upward trend is still intact [5]. - Currently, MLR is trading at 90.1% of its 52-week high-low range, indicating a potential breakout [6]. Group 3: Fundamental Strength - MLR holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks based on earnings estimate revisions and EPS surprises [6]. - The stock has an Average Broker Recommendation of 1 (Strong Buy), reflecting high optimism from the brokerage community regarding its near-term performance [7]. Group 4: Additional Insights - Besides MLR, there are other stocks that meet the criteria of the "Recent Price Strength" screen, which can be considered for investment [8]. - The effectiveness of stock-picking strategies can be backtested using tools like the Zacks Research Wizard, which includes successful strategies [9].