Miller Industries(MLR) - 2024 Q3 - Earnings Call Transcript

Financial Data and Key Metrics Changes - In Q3 2024, the company generated revenues of $314.3 million, a 14.5$42 million, a decrease of 2% compared to the prior year, with a gross margin of 13.4%, down 220 basis points year-over-year [10][16] - Net income for Q3 2024 was $15.4 million or$1.33 per diluted share, compared to $17.5 million or$1.52 per diluted share in Q3 2023 [20] Business Line Data and Key Metrics Changes - The international business, accounting for approximately 10% of total sales, showed continued demand and strong order intake, with potential growth in the military sector [12] - Cost of operations increased 17.5% to $272.2 million in Q3 2024, largely due to increased revenue levels [15] Market Data and Key Metrics Changes - The company experienced a slow order entry during the quarter, attributed to political uncertainty, but anticipates that backlog will return to historical levels in the next 1 to 2 quarters [27][28] Company Strategy and Development Direction - The company is focused on production capacity expansion and regularly analyzes future production needs to invest capital where it can generate the greatest shareholder returns [13] - The company remains committed to debt reduction and returning capital to shareholders through dividends and share repurchase programs [24][25] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving low double-digit growth for the full year 2024, in line with historical compounded annual growth rates [29] - The company noted that while challenges were faced in the quarter, core demand drivers remain solid, and distributor retail deliveries have remained steady compared to last year [27] Other Important Information - Cash and cash equivalents as of September 30, 2024, were$40.6 million, up from $23.8 million as of June 30, 2024 [20] - The company has repurchased 45,000 shares representing$2.9 million of the $25 million repurchase program authorized in April [25] Q&A Session Summary Question: Post-election order flow and dealer throughput assistance - Management noted that post-election sentiment in the industry has increased significantly, with multiple deals being completed that were previously on hold [32][33] - The company is providing appropriate inventory to help distributors finish builds and deliver to customers [34] Question: Gross margin outlook for next year - Management anticipates that gross margins will remain in the low mid-13s range moving into next year, with no expected issues continuing the margins [38] Question: SG&A expense management - Management is looking at cost control but noted that new compliance regulations are adding costs that are out of their control, making it challenging to reduce SG&A below the target of 6.5% [39]