Miller Industries(MLR) - 2021 Q1 - Quarterly Report

Financial Performance - Net sales for Q1 2021 were $169.912 million, a decrease of 3.2% from $176.054 million in Q1 2020[14] - Gross profit for Q1 2021 was $15.831 million, down 14.6% from $18.538 million in Q1 2020[14] - Net income for Q1 2021 was $3.178 million, a decline of 41.5% compared to $5.431 million in Q1 2020[14] - The company reported a comprehensive income of $3.938 million for Q1 2021, compared to $5.359 million for Q1 2020[17] - Net sales for Q1 2021 decreased 3.5% to $169,912 from $176,054 in Q1 2020, primarily impacted by ERP software implementation and supply chain disruptions[71] Assets and Liabilities - Total current assets increased to $315.385 million as of March 31, 2021, up from $286.269 million at the end of 2020[12] - Total liabilities rose to $143.123 million as of March 31, 2021, compared to $115.957 million at the end of 2020[12] - Cash and temporary investments decreased to $56.199 million at the end of Q1 2021 from $57.521 million at the end of 2020[12] - The company had cash and temporary investments of $56,199 as of March 31, 2021, with no outstanding borrowings under its $50,000 credit facility[37] - As of March 31, 2021, cash and cash equivalents totaled $56,199, with commitments of approximately $5,190 for property and equipment acquisitions[81] Sales Performance - North America net sales increased to $146.687 million in Q1 2021 from $143.856 million in Q1 2020, while foreign sales decreased to $23.225 million from $32.198 million[29] - Domestic sales increased to $146,687 in Q1 2021 from $143,856 in Q1 2020, while foreign sales decreased to $23,225 from $32,198 during the same period[71] Operating Expenses - Operating expenses for Q1 2021 were $11.051 million, slightly up from $10.974 million in Q1 2020[14] - Selling, general and administrative expenses rose to $11,051 in Q1 2021 from $10,974 in Q1 2020, increasing as a percentage of sales to 6.5% from 6.2%[73] - Costs of operations decreased 2.2% to $154,081 in Q1 2021, but increased as a percentage of sales to 90.7% from 89.5% in Q1 2020[72] Cash Flow - Cash provided by operating activities was $2,847 in Q1 2021, compared to cash used of $1,852 in Q1 2020[78] - Cash used in investing activities was $2,489 in Q1 2021, down from $3,516 in Q1 2020[79] - Cash used in financing activities was $2,059 in Q1 2021, compared to cash provided of $22,850 in Q1 2020[80] Supply Chain and Operational Challenges - The company continues to face supply chain challenges, including semiconductor shortages and high steel prices, impacting production capabilities[63] - The company experienced significant supply chain disruptions during the first quarter of 2021, impacting its ability to obtain certain raw materials and purchased component parts[99] - Steel prices increased considerably during the first quarter of 2021 due to improving global economic conditions, remaining at record highs[98] - The company implemented general price increases and cost surcharges to offset rising raw material costs, but future price increases may require a long lead time to implement[100] Investments and Commitments - Commitments for construction and acquisition of property, plant, and equipment were approximately $5,190 as of March 31, 2021, down from $7,068 at December 31, 2020[43] - The company invested over $97,000 in property, plant, and equipment from 2016 to 2020, including approximately $25,000 for a Pennsylvania expansion project[55] Corporate Governance and Compliance - The company has been in compliance with its credit facility covenants throughout 2020 and Q1 2021, and anticipates continued compliance for the remainder of 2021[35] - The company has not experienced significant changes in internal controls over financial reporting that materially affect its financial reporting[93] Taxation - The effective tax rate for Q1 2021 was 24.9%, compared to 23.7% in Q1 2020[77] Executive Compensation - The new cash bonus program for executive officers is contingent on the company's Pretax Income exceeding $10 million for the fiscal year[104] - The annual base salary for the Co-CEOs increased from $519,046 to $569,046 effective January 1, 2021[106] Lease Obligations - The weighted average remaining lease term for operating leases was 4.4 years as of March 31, 2021, compared to 4.6 years at December 31, 2020[42] - The company reported non-cancelable operating lease obligations of approximately $1,485 million and finance lease obligations of $32 million as of March 31, 2021[86]