Miller Industries(MLR)2025-03-06 21:14Financial Data and Key Metrics Changes - For the full year 2024, net sales were 1.15 billion in 2023, driven by strong demand for products [11] - Gross profit for 2024 was 151.9 million, or 13.2% of sales in 2023, reflecting an improvement in product mix and supply chain [11][12] - Net income for 2024 was 5.47 per diluted share, up from 5.07 per diluted share in 2023, representing increases of 8.9% and 7.9% respectively [12] - For Q4 2024, sales were 296.2 million in Q4 2023, primarily due to a decline in chassis shipments [13] - Q4 gross profit was 38.6 million, or 13% of sales in Q4 2023, with margin improvement driven by product mix [14][15] Business Line Data and Key Metrics Changes - The decline in chassis shipments in Q4 2024 was attributed to elevated shipments in Q4 2023 due to supply chain disruptions [13][14] - The company noted that gross margins vary due to product mix, particularly in Q4 2024 [14][20] Market Data and Key Metrics Changes - The company anticipates a return to normalized chassis deliveries in the second half of 2025, which should stabilize revenues and margins [22][37] - The rising cost of equipment ownership is impacting end-market towers, with increased insurance premiums and interest rates affecting customer purchasing decisions [25] Company Strategy and Development Direction - The company is focused on returning capital to shareholders through dividends and share repurchases, with a recent quarterly cash dividend of 24.3 million as of December 31, 2024, down from 65 million at year-end, with a focus on reducing debt levels as cash conversion improves in 2025 [18][19] Q&A Session Summary Question: Does the 2025 outlook include financial effects of military developments? - The current military contract production is expected to begin in late 2026, with most production in 2027 and 2028 [51] Question: How do you see the first half of 2025 compared to the second half? - The first half is expected to be similar to Q4 2024, with chassis shipments lower than normal, while the second half is anticipated to show upward momentum [53] Question: Can we expect margin levels to be the same as Q4? - Margins are expected to be relatively equal to last year [55] Question: How is the company managing working capital with anticipated sales decline? - The plan is to reduce inventories to historical levels, which ran about 20% of revenue pre-COVID [57] Question: Are you doing anything to help dealers navigate the next few quarters? - Dealers are currently healthy and working through their chassis inventory buildup, with expectations of returning to optimal levels in the next two to four months [61]