Miller Industries(MLR) - 2025 Q1 - Quarterly Report

Part I: Financial Information Financial Statements Q1 2025 saw significantly lower net sales and income, though shareholders' equity and cash position slightly improved Balance Sheet Highlights (in thousands) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total Current Assets | $500,945 | $529,766 | | Inventories, net | $164,897 | $186,169 | | Total Assets | $639,707 | $667,015 | | Total Current Liabilities | $155,238 | $197,873 | | Long-term obligations | $75,000 | $65,000 | | Total Liabilities | $233,201 | $265,985 | | Total Shareholders' Equity | $406,506 | $401,030 | - Total assets decreased from $667.0 million at year-end 2024 to $639.7 million as of March 31, 2025, primarily due to a reduction in current assets, while shareholders' equity saw a slight increase[13] Q1 2025 vs. Q1 2024 Income Statement (in thousands, except per share data) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net Sales | $225,651 | $349,871 | | Gross Profit | $33,944 | $44,243 | | Income Before Income Taxes | $10,791 | $21,488 | | Net Income | $8,065 | $17,023 | | Diluted EPS | $0.69 | $1.47 | | Dividends Declared Per Share | $0.20 | $0.19 | - Net sales for Q1 2025 decreased by 35.5% year-over-year, leading to a 52.6% drop in net income and a fall in diluted EPS to $0.69 from $1.47[16] Q1 2025 vs. Q1 2024 Cash Flow Summary (in thousands) | Activity | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash from operating activities | $2,714 | $8,977 | | Net cash used in investing activities | ($5,128) | ($4,663) | | Net cash from (used in) financing activities | $5,610 | ($7,179) | | Net change in cash | $3,023 | ($3,100) | - Cash from operations decreased to $2.7 million in Q1 2025 from $9.0 million in Q1 2024, while positive financing cash flow resulted from $10.0 million in net borrowings[23] - The company operates as a single reportable segment in towing and recovery equipment, with performance assessed based on consolidated net income[35][36] Net Sales by Geographic Region (in thousands) | Region | Q1 2025 | Q1 2024 | Change | | :--- | :--- | :--- | :--- | | North America | $186,338 | $318,536 | (41.5)% | | Foreign | $39,313 | $31,335 | 25.5% | | Total | $225,651 | $349,871 | (35.5)% | - Total inventory decreased to $164.9 million as of March 31, 2025, from $186.2 million at year-end 2024, with reductions in chassis and raw materials[40] - Outstanding borrowings under the credit facility increased to $75.0 million as of March 31, 2025, up from $65.0 million at the end of 2024[45] - In March 2025, the Board authorized approximately $9.1 million (€8.0 million) for an expansion at a facility in France, expected to begin in Q3 2025[56] - During Q1 2025, the company repurchased 46,817 shares for $2.1 million under its new stock repurchase program[65] - Subsequent to the quarter end, the Board declared a quarterly cash dividend of $0.20 per share[70] Management's Discussion and Analysis (MD&A) Management attributes the 35.5% sales decline to inventory management but notes improved gross margins and future optimism - Miller Industries is the world's largest manufacturer of towing and recovery equipment, with operations in the US, UK, and France[75] - Products are sold under brands such as Century®, Vulcan®, and Chevron™ through a global network of distributors[76][77] - The company continues to invest in automation and robotics, having spent over $82 million on modernization projects from 2017 to 2021[80] - Q1 results were impacted by high chassis inventory levels in the distribution channel, with a more synchronized flow expected in the second half of 2025[81][82] - Key business risks include geopolitical factors, supply chain pressures, potential tariffs, rising equipment ownership costs, and new state-level emissions standards[83][87] Q1 2025 vs. Q1 2024 Operating Results (in thousands) | Metric | Q1 2025 | Q1 2024 | Change | | :--- | :--- | :--- | :--- | | Net Sales | $225,651 | $349,871 | (35.5)% | | Gross Profit | $33,944 | $44,243 | (23.3)% | | SG&A Expenses | $23,260 | $21,543 | 8.0% | | Net Income | $8,065 | $17,023 | (52.6)% | - Net sales decreased 35.5% YoY due to reduced chassis deliveries, though foreign sales increased by 25.5%[88] - Gross profit as a percentage of sales increased to 15.0% from 12.6% in the prior year, attributed to a favorable product mix[90] - Selling, general and administrative (SG&A) expenses rose 8.0% to $23.3 million, mainly due to increased compensation and incentive expenses[91] - As of March 31, 2025, the company had $27.4 million in cash and temporary investments and $25.0 million available for borrowing[96] Cash Flow Summary (in thousands) | Activity | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Operating activities | $2,714 | $8,977 | | Investing activities | ($5,128) | ($4,663) | | Financing activities | $5,610 | ($7,179) | - Capital expenditures were $5.1 million in Q1 2025, focused on manufacturing automation and robotics[100][106] - Commitments for property, plant, and equipment were approximately $10.0 million as of March 31, 2025, a decrease from $14.2 million at year-end 2024[102] Quantitative and Qualitative Disclosures About Market Risk Market risk disclosures remain materially unchanged from the 2024 year-end 10-K report - There have been no material changes to market risk disclosures since the 2024 year-end 10-K report[107] Controls and Procedures Management concluded disclosure controls and procedures were effective with no significant changes in internal controls - Management concluded that as of March 31, 2025, the company's disclosure controls and procedures were effective[108] - No significant changes were made to internal controls over financial reporting during the first quarter of 2025[109] Part II: Other Information Legal Proceedings The company faces ordinary course litigation but does not expect a significant financial impact - The company is subject to various claims and lawsuits in the ordinary course of business, for which management believes it has adequate accruals and insurance[58][112] Risk Factors Risk factors remain materially unchanged from the 2024 Annual Report on Form 10-K - No material changes to risk factors have occurred since the 2024 Annual Report on Form 10-K[113] Issuer Purchases of Equity Securities The company repurchased 67,911 shares in Q1 2025 under its new program and for employee tax obligations Share Repurchases for Quarter Ended March 31, 2025 | Period | Total Shares Purchased | Avg. Price Paid | Shares Purchased as Part of Program | Max. Value Remaining for Purchase (in thousands) | | :--- | :--- | :--- | :--- | :--- | | Jan 2025 | — | — | — | $22,102 | | Feb 2025 | — | — | — | $22,102 | | Mar 2025 | 67,911 | $46.42 | 46,817 | $20,000 | | Total | 67,911 | | 46,817 | | - On April 2, 2024, the Board approved a stock repurchase program authorizing up to $25.0 million of the company's common stock[115]