Miller Industries(MLR) - 2025 Q2 - Quarterly Results

Q2 2025 Financial Results Overview Q2 2025 Key Financial Highlights Miller Industries reported a significant decline in Q2 2025 net sales and net income compared to Q2 2024, primarily due to decreased product shipments, especially chassis, despite an improved gross margin percentage due to a favorable product mix shift towards bodies, and declared its 59th consecutive quarterly cash dividend Q2 2025 Key Financial Highlights vs Q2 2024 | Metric | Q2 2025 | Q2 2024 | Change (%) | | :----------------- | :------------- | :------------- | :------------- | | Net Sales | $214.0 million | $371.5 million | (42.4)% | | Gross Profit | $34.6 million | $51.1 million | (32.3)% | | Gross Margin % | 16.2% | 13.8% | +2.4 pp | | SG&A Expenses | $23.4 million | $22.8 million | +2.8% | | SG&A % of Net Sales| 10.9% | 6.1% | +4.8 pp | | Net Income | $8.5 million | $20.5 million | (58.8)% | | Diluted EPS | $0.73 | $1.78 | (59.0)% | | Quarterly Dividend | $0.20/share | $0.19/share | +5.3% | - The decrease in net sales was primarily driven by a decline in product shipments, predominantly chassis, compared to the prior year period which saw significantly elevated chassis shipments[2] - The year-over-year increase in gross margin percentage was largely driven by a sales product mix shift from a higher percentage of chassis in the prior year to a higher percentage of bodies in the current period[3] - Selling, general and administrative expenses increased primarily due to higher stock-based compensation expense and employee compensation and training costs[4] Management Commentary and Business Outlook CEO William G. Miller, II, acknowledged significant market challenges in Q2, including a 20% quarter-over-quarter decline in retail sales and a 30% decrease in order intake, attributed to lower consumer confidence, elevated ownership costs (interest rates, insurance, tariffs), and high field inventory, but the company is taking proactive steps to adjust production, reduce channel inventory, improve costs, and secure the supply chain, remaining confident in long-term business drivers and anticipating a market recovery with potential upside from military contracts - Retail sales activity was down 20% quarter over quarter, resulting in a 30% decrease in order intake from distributors[6] - Decreased demand is largely attributed to lower consumer confidence, elevated costs of ownership (interest rates, insurance costs, tariff-related price increases), and elevated field inventory in the distribution channel[6] - The company is closely monitoring and adjusting production levels, accelerating the reduction of channel inventory, taking steps to improve costs, and securing the supply chain to mitigate tariff risks[6] - Fundamental drivers of long-term business performance, such as miles driven, average age of vehicles on the road, and accidents per mile, are steadily climbing[7] - For the remainder of 2025, the company will prioritize operational efficiency and capital allocation, anticipating a meaningful recovery in the commercial market and potential upside from pending military contracts[7] Revised 2025 Guidance 2025 Fiscal Year Guidance Update Due to heightened uncertainty and near-term challenges, Miller Industries has revised its 2025 fiscal year guidance, now expecting revenue in the range of $750 million to $800 million and suspending guidance on earnings per share, citing potential material impacts on cost structure from ongoing operational initiatives that could result in extraordinary expenses and potential losses in the second half of the year - Revised 2025 revenue guidance is in the range of $750 million to $800 million[8] - Guidance on earnings per share for 2025 has been suspended due to heightened uncertainty and potential material impacts on cost structure from organization-wide operational initiatives, which could lead to extraordinary expenses and potential losses in the second half of the year[8] Financial Statements Condensed Consolidated Statements of Income The condensed consolidated statements of income show a significant year-over-year decline in net sales, gross profit, and net income for both the three and six months ended June 30, 2025, with an improved gross profit margin percentage in Q2 but a decrease in absolute gross profit, and increased selling, general and administrative expenses contributing to the overall decline in profitability Condensed Consolidated Statements of Income (Q2 and YTD June 30) | Metric (in thousands) | Q2 2025 | Q2 2024 | % Change (QoQ) | YTD 2025 | YTD 2024 | % Change (YoY) | | :-------------------- | :------ | :------ | :------------- | :------- | :------- | :------------- | | Net Sales | $214,032 | $371,451 | (42.4)% | $439,682 | $721,322 | (39.0)% |\n| Costs of Operations | $179,446 | $320,373 | (44.0)% | $371,153 | $626,001 | (40.7)% |\n| Gross Profit | $34,586 | $51,078 | (32.3)% | $68,529 | $95,321 | (28.1)% |\n| SG&A Expenses | $23,404 | $22,773 | 2.8% | $46,664 | $44,316 | 5.3% |\n| Income Before Taxes | $11,367 | $26,244 | (56.7)% | $22,158 | $47,732 | (53.6)% |\n| Net Income | $8,458 | $20,514 | (58.8)% | $16,523 | $37,537 | (56.0)% |\n| Diluted EPS | $0.73 | $1.78 | (59.0)% | $1.42 | $3.26 | (56.3)% |\n| Cash Dividends Declared Per Share | $0.20 | $0.19 | 5.3% | $0.40 | $0.38 | 5.3% | Condensed Consolidated Balance Sheets As of June 30, 2025, Miller Industries' total assets decreased to $622.9 million from $667.0 million at December 31, 2024, primarily driven by reductions in accounts receivable and inventories, while total liabilities also decreased significantly from $266.0 million to $204.3 million mainly due to lower accounts payable and long-term obligations, and shareholders' equity increased to $418.6 million from $401.0 million Condensed Consolidated Balance Sheets (June 30, 2025 vs Dec 31, 2024) | Metric (in thousands) | June 30, 2025 | December 31, 2024 | Change | | :-------------------- | :------------ | :---------------- | :----- | | Cash and temporary investments | $31,821 | $24,337 | $7,484 |\n| Accounts receivable, net | $270,419 | $313,413 | $(42,994) |\n| Inventories, net | $165,458 | $186,169 | $(20,711) |\n| Total Current Assets | $485,409 | $529,766 | $(44,357) |\n| Total Assets | $622,933 | $667,015 | $(44,082) |\n| Accounts payable | $98,035 | $145,853 | $(47,818) |\n| Total Current Liabilities | $146,346 | $197,873 | $(51,527) |\n| Long-term obligations | $55,000 | $65,000 | $(10,000) |\n| Total Liabilities | $204,339 | $265,985 | $(61,646) |\n| Total Shareholders' Equity | $418,594 | $401,030 | $17,564 | Additional Information About Miller Industries, Inc. Miller Industries, Inc. is recognized as the world's largest manufacturer of towing and recovery equipment, marketing its products under several well-known brands including Century®, Vulcan®, Chevron™, Holmes®, Challenger®, Champion®, Jige™, Boniface™, Titan®, and Eagle® - Miller Industries is The World's Largest Manufacturer of Towing and Recovery Equipment®[10] - Markets its equipment under well-recognized brands including Century®, Vulcan®, Chevron™, Holmes®, Challenger®, Champion®, Jige™, Boniface™, Titan®, and Eagle®[10] Forward-Looking Statements This section provides a cautionary note regarding forward-looking statements, as defined by the Private Securities Litigation Reform Act of 1995, identifying various factors that could cause actual results to differ materially from those anticipated, including dependence on suppliers, customer access to capital, tariffs, rising equipment ownership costs, macroeconomic trends, and regulatory changes, with the company explicitly stating it does not undertake to update any forward-looking statements - Forward-looking statements are identified by specific terminology (e.g., "may", "will", "should", "expect", "anticipate") and include statements related to 2025 guidance, production adjustments, cost improvements, supply chain security, market recovery, and military contracts[12] - Actual results may differ materially due to various risks, including dependence on outside suppliers, customer access to capital, tariffs, rising equipment ownership costs, macroeconomic trends, and changes in government regulations[12] - The company does not undertake to update any forward-looking statement[12] Conference Call Information Miller Industries will host a conference call on August 7, 2025, at 10:00 AM ET to discuss the results, with the call broadcast live over the Internet and a replay available for a limited time - A conference call is scheduled for August 7, 2025, at 10:00 AM ET[9] - The call will be simultaneously broadcast live over the Internet, with a replay available until August 14, 2025[9]