Miller Industries(MLR) - 2023 Q3 - Quarterly Report

FORWARD-LOOKING STATEMENTS This section details factors that may cause actual results to differ from forward-looking statements, including economic conditions, supply chain disruptions, and geopolitical events - Actual results may differ materially from forward-looking statements due to various factors, including changes in price, delivery delays, decreased availability of component parts, chassis and raw materials, economic and market conditions (inflation, interest rates, geopolitical uncertainties like the war in Ukraine and the Middle East conflict), increased labor costs, and supply chain disruptions[5] - The company assumes no obligation to publicly update these forward-looking statements or the reasons actual results could differ, except as required by law[7] PART I FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS. This section presents the unaudited condensed consolidated financial statements, including balance sheets, statements of income, comprehensive income, shareholders' equity, and cash flows, for the periods ended September 30, 2023, and December 31, 2022 Condensed Consolidated Balance Sheets The condensed consolidated balance sheets show the company's financial position as of September 30, 2023, and December 31, 2022, indicating growth in total assets, liabilities, and shareholders' equity | Metric | Sep 30, 2023 (in thousands) | Dec 31, 2022 (in thousands) | Change (vs Dec 31, 2022) | | :----------------------------- | :-------------------------- | :-------------------------- | :----------------------- | | Total Assets | $587,406 | $501,429 | +$85,977 | | Total Liabilities | $255,021 | $207,972 | +$47,049 | | Total Shareholders' Equity | $332,385 | $293,457 | +$38,928 | | Current Assets | $449,109 | $376,048 | +$73,061 | | Current Liabilities | $188,514 | $156,145 | +$32,369 | | Long-term obligations | $60,000 | $45,000 | +$15,000 | Condensed Consolidated Statements of Income The condensed consolidated statements of income highlight significant improvements in net sales, gross profit, and net income for both the three and nine months ended September 30, 2023, compared to the prior year periods | Metric (in thousands) | 3 Months Ended Sep 30, 2023 | 3 Months Ended Sep 30, 2022 | YoY Change (%) | 9 Months Ended Sep 30, 2023 | 9 Months Ended Sep 30, 2022 | YoY Change (%) | | :-------------------- | :-------------------------- | :-------------------------- | :------------- | :-------------------------- | :-------------------------- | :------------- | | Net Sales | $274,568 | $205,557 | +33.6% | $857,108 | $622,602 | +37.7% | | Costs of Operations | $231,700 | $182,377 | +27.0% | $743,894 | $565,708 | +31.5% | | Gross Profit | $42,868 | $23,180 | +84.9% | $113,214 | $56,894 | +98.9% | | Net Income | $17,459 | $5,232 | +233.7% | $41,596 | $11,054 | +276.3% | | Basic EPS | $1.53 | $0.46 | +232.6% | $3.64 | $0.97 | +275.3% | | Diluted EPS | $1.52 | $0.46 | +230.4% | $3.62 | $0.97 | +273.2% | | Cash Dividends Declared Per Common Share | $0.18 | $0.18 | 0.0% | $0.54 | $0.54 | 0.0% | Condensed Consolidated Statements of Comprehensive Income The condensed consolidated statements of comprehensive income show a significant increase in comprehensive income for both the three and nine months ended September 30, 2023, primarily driven by positive foreign currency translation adjustments compared to losses in the prior year | Metric (in thousands) | 3 Months Ended Sep 30, 2023 | 3 Months Ended Sep 30, 2022 | 9 Months Ended Sep 30, 2023 | 9 Months Ended Sep 30, 2022 | | :-------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Net Income | $17,459 | $5,232 | $41,596 | $11,054 | | Foreign currency translation adjustment | $822 | $(3,341) | $2,712 | $(5,621) | | Total other comprehensive income (loss) | $822 | $(3,341) | $2,712 | $(5,621) | | Comprehensive Income | $18,281 | $1,891 | $44,308 | $5,433 | Condensed Consolidated Statements of Shareholders' Equity The condensed consolidated statements of shareholders' equity detail changes from December 31, 2021, through September 30, 2023, reflecting contributions from net income, foreign currency translation adjustments, stock-based compensation, and dividend payments, leading to an increase in total shareholders' equity | Metric (in thousands) | Dec 31, 2022 | Sep 30, 2023 | Change | | :-------------------- | :----------- | :----------- | :----- | | Common Stock | $114 | $114 | $0 | | Additional Paid-In Capital | $152,392 | $153,191 | +$799 | | Accumulated Surplus | $150,124 | $185,541 | +$35,417 | | Accumulated Other Comprehensive Loss | $(9,173) | $(6,461) | +$2,712 | | Total Shareholders' Equity | $293,457 | $332,385 | +$38,928 | - Net income contributed significantly to accumulated surplus, with $9,220K for Q1 2023, $14,915K for Q2 2023, and $17,459K for Q3 2023[19][21] Condensed Consolidated Statements of Cash Flows The condensed consolidated statements of cash flows show a significant improvement in cash provided by operating activities for the nine months ended September 30, 2023, compared to cash used in the prior year, while cash used in investing activities increased due to a business acquisition | Metric (in thousands) | 9 Months Ended Sep 30, 2023 | 9 Months Ended Sep 30, 2022 | Change | | :-------------------- | :-------------------------- | :-------------------------- | :----- | | Net cash flows from operating activities | $4,213 | $(31,602) | +$35,815 | | Net cash flows from investing activities | $(27,508) | $(25,119) | -$2,389 | | Net cash flows from financing activities | $8,822 | $38,820 | -$29,998 | | Net change in cash and temporary investments | $(13,306) | $(21,124) | +$7,818 | | Cash and temporary investments, end of period | $26,847 | $33,208 | -$6,361 | - Investing activities for the nine months ended September 30, 2023, included a $17,802K acquisition of Southern Hydraulic Cylinder, Inc. (SHC)[24] - Cash payments for interest significantly increased to $5,758K for the nine months ended September 30, 2023, from $1,902K in the comparable 2022 period[24] Notes to Condensed Consolidated Financial Statements This section provides detailed explanations and disclosures for the condensed consolidated financial statements, covering accounting policies, recent pronouncements, the acquisition of Southern Hydraulic Cylinder, Inc., earnings per share calculations, revenue disaggregation, inventory valuation, long-term debt, commitments, contingencies, income taxes, corrections of prior period errors, and subsequent events 1. BASIS OF PRESENTATION This section outlines