MLR - Earnings call transcript Q2 2021 | Miller Industries, Inc.

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Operator

Good day, ladies and gentlemen, and welcome to the Miller Industries' Second Quarter 2021 Results Conference Call. Please note, this event is being recorded. And now at this time, I would like to turn the call over to Brendan Dunlap at FTI Consulting. Please go ahead, sir.

Brendan Dunlap

Thank you, and good morning, everyone. welcome the to Call. Industries' like would you Miller to Conference I

followed yesterday. the are company's Miller, filed I'd and forward-looking after were risks harbor call, market the Reform the to Chairman turn statements, the company's filings us second Private like of to At We Will the may make to in discuss Co-CEO; which Co-CEO; with with described Frank XXXX. of Today's Jeff. President, your management, accordance XXXX Vice General go over Securities ahead, Litigation annual Counsel. a the this these Madonia, here Miller, and call are the team remarks Debbie other more provisions to begin to management by Secretary today Executive fully attention statements formal President like Form quarter Board; Vice Please this Whitmire, Badgley, conference Commission. results, related which the close period. Jeff. Executive Jeff call With the Bill from to of Exchange President safe and report the and XX-K with will note, CFO; question-and-answer morning's released and from in are Securities Please management of and I'd in call time, Act on

Jeffrey Badgley

good Thank everyone. you, morning, and

the commitment of our strength demand steadfast testament business, underlying our excellence. to operational Our to second a results quarter industry and are healthy

Gross XX.X% year $XXX.X the increased We driven pre-pandemic the note, pressures. mix. dynamics a escalating to $XX.X some our demand. to from continue announced largely margin second to we prices due customer another sales second the specifically, to are that quarter price growth. industry million, in raw for approximately these year-over-year the overall $XXX offset line XX.X% product points, increase profit Of increased shift by million towards levels inflationary improve. and inflation pleased to report rebound in second and due basis prior quarter strong decreased trend to increased in continues to material period business sales largely by top caused Gross our More to recently of quarter

pricing we in some our in the in pressure margin which existing term. backlog results honor near However, orders on

increases have difficulties timely turnover other demand also including our ship actively but impacts and arrival rates we for of and ability pace We to pressures materials parts, backlog have complete finished experienced our increased mitigate of improve demand In goods workers to training which purchase chain employee current and component to necessary hiring timing skilled are and the production available and new healthy. chain also our our inflationary challenges supply retention has negatively Such remain Supply and substantial raw resources workforce and our influence domestic cost. a in to business, them. trends recruiting, in the product international which our all impacted continue continue at to caused disruptions certain markets, chassis, leveraging levels. match order of

the impacting timing our on of shipping negatively global shipments. constraints are export However, routes

implement Our operations our to the significant upgrades operations our benefits see quarter, we are first business network. software of as we any disruptions not beginning across the work enterprise to anticipate system do completed and to improvements our in further

quarter closing second about some and to current market some will call over turn the I'll Debbie, Debbie? will provide financial I results, the commentary then who Now review the remarks. environment

Deborah Whitmire

employee XX.X% $XX.X XXXX, -- quarter was or profit and Gross pressures. sharp second of from million increased across of XXXX for XXXX Thanks, million all XXXX increase, significant or million sales the driven were XX.X% the prior second good the operations of from second driven for Cost profit of versus gross $XXX.X compared second net sales the the demand million by and $XX.X quarter morning, the recovery sales $XX.X year million net for by quarter period. pandemic to XX.X% everyone. year-over-year largely Jeff, million XXXX, supply markets quarter $XXX.X second for the Net pricing as XX.X% of strong $XX.X XXX to the increased increased for the quarter transportation trade software-related million expenses shipping points million quarter resulting $XXX.X for travel sales a to approximately as headwinds compared and our the XXXX as net SG&A for across quarter. related the of and show operations expenses XXXX to XXXX, for of XXXX $XXX.X due growth to compared in top percentage basis in chain networks. quarter million second were from rebound second of Cost well to line the second XX.X% expenses. quarter and $XX

quarter XXXX financing of As plan X.X% of approximately customer the the expense the decreased XXXX quarter elimination obligations a the sales, XXX percentage basis points third our second XXXX of $X.XX X.X% in to SG&A period. second or income floor due $X.XX $XXX,XXX, to decreased costs of for million the to quarter year income for the quarter XXXX. prior long-term second net for from from gain gain in to down $X.X was the $XXX,XXX fluctuations. second per exchange $XXX,XXX debt rate and Interest in share. XXXX was was share. currency quarter second net income for or quarter per quarter net second expense XXXX a $X.X a million Net Other for XXXX Net due the the compared of was $XX,XXX

for XXXX to XX.X% million in the X of the million million income or briefly period, XXXX. share. Gross X an me for June profit Net net XXXX, income XX, million sales year $XXX.X the $XX.X $X.XX months $XX.X of $X.XX increase was decrease X $XX.X our were or months months a XX.X% compared XX, per XXXX X or prior of the for per let of sales XX.X%. for first X ended Now months of was Net compared million the or June of to for months XXXX. the results ended the first for $XXX.X X of XXXX XX.X% share, million to first first sales months $X.X review compared of of

the to as balance $XXX.X sheet. March million XXXX. Now to were of XX, receivable as million XX, and XX, $XXX.X XX, investments of XX, million March $XX.X of of temporary $XXX.X as million at totaled XX, million June $XXX.X XXXX, as March of XXXX, XX, December $XX.X of million June of June and as as XXXX, as Accounts $XX.X XXXX, of XXXX, was compared March $XX.X and $XX.X Inventories of XX, June XX, payable million of XX, turning $XX.X compared and to December XXXX, as million was XX, at compared million Accounts million and to $XX million Cash $XXX.X XXXX. XXXX, as XXXX. December million December compared to as XXXX. XXXX,

balance pandemic, business While the allocation to and strong faced challenges with diligent priorities trends. demand related concerns supply strong and COVID our industry provide with chain capital in flexibility the to and capitalize financial us on sheet continuing our investing continue

at Lastly, of X, XXXX, dividend of Board share, approved to of XXXX. announced that close on its the XX, cash company also record September shareholders Directors of September per our the payable business $X.XX quarterly

further for Now to turn Jeff I'll call remarks. back the

Jeffrey Badgley

Thank you, Debbie.

constraints confident best-in-class to While economic are continue transportation for demand and across continue supply investing customer the trends unwavering in deliver and our service our our to financial the excellence are of demand, flexibility commitment position conditions we and networks shareholders. needs Despite and customers. business continue position in we global continue strengthen, our customer to operational strong, that to will normalize favorably the maintain significant return chains us customer to surge to to financial meet continue remains capital and Further, service we to customers.

employees, Looking the the I and overall and and we Will customers, headwinds, Operator, further the anticipate improving strength this open Miller year, confident trends us all like suppliers opportunities that growth closing, to second ongoing chain ahead half and capitalize of we would for their our into line our again transportation are industry our for position In morning. the you value. of on favorably but please us supply shareholder business and Industries. of to for support Thank questions. shareholders joining thank generate

Operator

[Operator Instructions].

We question Usina take our Family Office. will Usina first Arnie from [ph] now from

Unidentified Analyst

to manufacturing. on want more to I and try down bit incurring costs incremental little focus only a the to you're that drill

there? maybe talk gross taking the a little spend It costs. labor for gone or margin way, like you're great the By can time a applaud point steps actions can steps to to materials I more basis. But you basis XXX doing you about about Any on your your take up And you buying plan a mentioned costs especially dramatically, SG&A. bit of increase your chassis? in job go-forward You quite has improve availability, talking on challenges. controlling component sounds your the

Jeffrey Badgley

talking somewhere about the But in We'll of the calculated Debbie, costs first and talk chassis materials circle over increase. about in think of a I component X% minute. year we the back and to to be X% that raw half range increase,

Deborah Whitmire

Correct.

Jeffrey Badgley

your Step a accept finding take to our orders, out obviously, willing base. lot also willing our of from But reach we're protect walk-in particular. purchase but at other when at ship the And order. cost order, In is not to on the pricing in expanding going not purchase forward, further We're we'll to you we're going to cost attempting time time or cost ticked your further supplier increase. you suppliers be words, to ourselves us. but steel, to

effects effects. positive Now that or have can negative

price increases we offset -- the to Will? to -- obviously, had one Secondly, implemented those year, help the had we have We've at beginning of further, costs.

William Miller

year Every [indiscernible].

Jeffrey Badgley

in through finally, system QX. before approximately increase that weeks we the the the in this ate price last X orders But of were backlog of

positives we that any from effect, didn't in price So realize increase.

do increase. backlog Vince, which warn we our we some During besides for the you to announced protect quarter, about in little we chassis the thing distributors there a to surcharge our are -- right our is the our cost that we supply bit? January, But company. think And we be on long-term keep material the strong, of our unless going price another talk back also of relief to viability did price increase a can pressures. may distributors see

William Miller

doing getting as we to chassis of best need successful couple fairly not all getting mean, material partners order understand obviously, from of be at a suppliers and I We're, our as we well. many struggling next with strategic it. surcharge big our in obviously, can our it, Yes. mitigate we're that weeks. sure that of chassis the get. the making manufacturers monthly, as Runways but our are shortages that one of implemented we We're could

supply. we're best our chassis the so to doing And mitigate

Unidentified Analyst

on just Okay. placed increases, don't where I Can had in you you guess quarter, comment the escalating you -- you if And you of for that And rapidly formal been the I'm orders you're if your of quarter possibly orders give X to a the know X -- through I Can if price wondering shipping most weeks January probably backlog on so the ran I was anticipate right till are last wait now. costs the but them? you taking was few guess now? months. were surcharge I you when why -- backlog numbers, calculating

Jeffrey Badgley

we surcharge a price implemented of and new with the on orders. warning immediate Well, along increase

-- in QX. again Just in

a So them did business. pricing that, the only the the the new increase that divulge price products to increase rising continue warned would a and say get in we we from with backlog they They don't increase months. not a surcharge X costs cover We it orders, standpoint to actual will on get we due along costs QX, has not numbers, rise. and price levels may time, X give of is demand -- but have give trends. of numbers, length we work to I don't currently the in Hopefully, I backlog that, our guess, that

Unidentified Analyst

it high So you're saying returning the year? first the was of part most historic, abnormally for of it's to

Jeffrey Badgley

intake? terms In order of

Unidentified Analyst

In terms of backlog...

Jeffrey Badgley

Yes.

Unidentified Analyst

investor, new business, Okay. me Can I'm your new your a remind, store, a of the you investor to seasonality just of remind relatively please?

Jeffrey Badgley

that so very there's seasonality. We little broad-based are

Unidentified Analyst

have a sheet. balance fantastic you And

spent bit expanding money quite in You year. capacity the a of earlier

software You put a in new system.

investments. You've made massive

flow, your priorities built also up dollars. please? future for free Can you on cash comment in some You've inventory terms of

Jeffrey Badgley

levels. production That investments Board at they they future obviously, decision. And -- for of a it kinds efficiency initiatives. look really really at all But and becomes look

a, give you to we're to do going decision. that really becomes So a answer," "here's what to board and

Unidentified Analyst

Got it.

Finally...

William Miller

as well. Jeff, we also shareholders look to at the our return

Unidentified Analyst

will of Yes. balance impact hopeful are the with Delta, Absolutely. the is in And it the operations final of Tennessee it? rising how And handling you QX? question, not your state

Jeffrey Badgley

Yes.

country the of also our England suppliers' State hopeful of of We in in won't of and only by but of facilities. impact our operations. in operations, mind mandates. France. in our that have our not not we're Tennessee CDC We it Pennsylvania. are that But live We're keep we're the guidelines mass very only the not country and in state Tennessee, State The operations, the does

safe. our to to So we be try hard employees encourage very

William Miller

bit of and the aren't we of of security, then going but go work giving our teams that if by half are XX steps major from at separating off And really last shift, shift X employees levels let home little factories we in a levels, our work. can a year continue full extra back to issue we pre-pandemic as schedule, cutting have in X-day XX% that time, come any X-on-X given mitigation shut the to to off a implemented facilities days that us a one for on they do the on down, number as a well nearly return

the during During one all year, we one pandemic factory at of last for had shift. that occur only

well that given from well in work we've we've XXXX. in steps as seem put and as into headcount in to mitigation the last time very continued a that our on cleanliness factories hygiene, So year, any

Operator

to questions would There this closing additional time. further or no I remarks. like appears at any turn management call to be back for the to

Jeffrey Badgley

again we forward and you today, look you for call. conference third Thanks. the again quarter results us with our speaking on call Thank on joining to

Operator

conference And participation. again to you concludes that, your and ladies today's with gentlemen, that We'd call. like for thank

disconnect. now may You

Miller Industries (MLR) 7 Aug 212021 Q2 Earnings call transcript