• Revenue: $314.3 million, a 14.5% increase year over year.
• Gross Profit: $42 million, a decrease of 2% compared to the prior year quarter.
• Gross Margin: 13.4%, decreased by 220 basis points year over year.
• Net Income: $15.4 million or $1.33 per diluted share.
• SG&A Expenses: $22.3 million, 7.1% of net sales.
• Interest Expense: $251,000, down 86.2% from the prior year.
• Cash and Cash Equivalents: $40.6 million as of September 30, 2024.
• Accounts Receivable: $34 million as of September 30, 2024.
• Inventory: $190.3 million as of September 30, 2024.
• Dividend: $0.19 per share, marking the 56th consecutive quarter of dividend payment.
• Share Repurchase: 45,000 shares repurchased, representing $2.9 million.

• Warning! GuruFocus has detected 7 Warning Signs with MLR.

Release Date: November 13, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Miller Industries Inc (NYSE:MLR) reported a 14.5% year-over-year increase in revenues for the third quarter of 2024, reaching $314.3 million, driven by improved OEM chassis deliveries.
• The company experienced strong order intake and continued demand, particularly in the international and military sectors, which are seen as potential growth areas.
• Miller Industries Inc (NYSE:MLR) is focused on expanding production capacity and investing in areas that promise the greatest shareholder returns.
• The company has successfully reduced interest expenses by 86.2% year-over-year, enhancing financial flexibility.
• Miller Industries Inc (NYSE:MLR) has maintained a consistent dividend payout, marking the 56th consecutive quarter of dividend distribution, and continues its share repurchase program.

Negative Points

• The company faced a decrease in gross profit by 2% year-over-year, with gross margins dropping by 220 basis points due to a shift in product mix.
• Hurricane Helene impacted operations, causing a temporary production halt at the Greenville facility, affecting revenues by low single-digit millions.
• Miller Industries Inc (NYSE:MLR) experienced a slowdown in order entry during the quarter, attributed to political uncertainty and distributor throughput limitations.
• SG&A expenses increased to 7.1% of net sales, above the long-term target of 6.5%, due to compliance and regulatory costs.
• Net income for the third quarter of 2024 decreased to $15.4 million from $17.5 million in the same period of 2023, reflecting challenges in maintaining profitability.

Q & A Highlights

Q: Have you seen any changes in order flow since the election, and are there any plans to assist dealers with throughput limitations? A: William Miller, President and CEO, noted that post-election sentiment has improved, with some deals that were on hold now completed. Although this hasn't yet reflected in order intake, confidence is expected to return. Regarding dealer throughput, distributors are working on expanding their facilities and outsourcing integration to local bodybuilders to resolve capacity issues.

Q: How do you expect gross margins to play out next year, considering the current chassis environment? A: William Miller stated that despite some quarterly fluctuations, they anticipate maintaining current margin levels into next year, as the chassis delivery timing normalizes.

Q: Can you achieve additional leverage on SG&A expenses as you grow in 2025? A: Deborah Whitmire, CFO, mentioned that while they aim to control costs, new compliance and regulations are adding to SG&A expenses. They hope to gain leverage but acknowledge that some costs are beyond their control.

Q: What is the outlook for your backlog and order intake in the coming quarters? A: William Miller expressed confidence that the backlog will return to historical levels over the next one to two quarters, driven by stabilized supply chains and strong customer interest, despite recent slow order entry.

Q: How is the company managing its capital allocation strategy? A: Deborah Whitmire highlighted their focus on returning capital to shareholders through dividends and share repurchases, while also prioritizing debt reduction, supported by improved cash conversion.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.