MLR - Earnings call transcript Q2 2022 | Miller Industries, Inc.

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Operator

Good day, ladies and gentlemen, and welcome to the Miller Industries Second Quarter 2022 Results Conference Call. Please note, this event is being recorded. And now at this time, I would like to turn the call over to Mike Gaudreau of FTI Consulting. Please go ahead, sir.

Mike Gaudreau

Thank you, and good afternoon, everyone. welcome the to call. Industries like would you Miller to conference I

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

Will Miller

shortages quarter in compared to quarter the But year. million impact to XX.X% everyone. and second chain strong. demand last to the quarter, $XXX.X the reflect In results Thank good supply Sales increased our second the pressures. inflationary afternoon, of you, and second remained of continue

year-over-year. to $XX.X a to However, sequentially, able XX.X% the amount decrease quarter goods was compared Gross to the of due from finished X.X% year margin quarter shortages difficult we million, Though the comparison gross XX.X% we while largely points drive gross has first point were XXX in are first during profit sales inflation to XXX for deliver basis improvement our in comparisons, quarter the the second and significant quarter, prior impacted encouraged XXXX of to that part by margin improvement sequential continued the quarter. of of to X.X% declined of profit gross basis XXXX. declined year-over-year

we demand European said, in XXXX grew but facing, supply globe to are and mix. the is full international increases, our realized constraints by haven’t demand has minimal line of in improve rates over cancellations, been a impacts chain of levels, we top some a markets. through in caused of to are subject business flowed unfavorable XXXX. encouraged conflict inflationary challenges will second portion even entire in is Because that the product Despite remained drive sequential strong has markets. that were pending and we delivering price despite half optimistic to price slowdown or environment significant the not only our growth While cautiously the in part the in the June, the macroeconomic still That of the able our our there are benefit to and pressures improvement availability. the and continued high stable results which that products to of encouraged date, year, date backlog in order these order To any we Ukraine in very finished of operations the remained goods, demand the same substantially have as increases balance for

quarter who will over financial call the more review the turn in to detail. like I’d results Debbie, second Now to

update Debbie? Following market closing some provide her a and remarks, I’ll comments. give

Debbie Whitmire

$XXX.X second the second Cost year-over-year of million second approximately good XX.X% million inflationary products. period the strong and everyone. second quarter Will, year our increased profit decline or the the for human XXXX, $XX.X net X.X% year-over-year in for driven earlier. to prior sales million for increase sales costs. employee operations of sales compared from of for $XX.X in was of XX% sales to $XX.X XXXX by the largely net versus XXXX $XX for driven demand afternoon, compared quarter million referenced XXXX by the SG&A for challenges in to $XXX.X the operations increase increased of The the Net Thanks, XX.X%. largely operations components expenses capital $XXX.X year quarter an were or and period. Cost XXX the Gross our due of to for The for of margin is the basis in quarter a second quarter to to XXXX net scarcity million XXXX were gross XX.X% points quarter investments to $XXX.X second in quarter benefit increases our and prior period. part supply and cost due the chain in was higher prior XXXX. to million compared the million year percentage second prices compared as of million

As normalized share along our X financing of to expense second second a COVID-related give was working and to confidence decrease of last XXXX of the basis year $X.XX loss turnover rate that decline and the significant for second the the XXXX, an seen a was diluted primarily decreases in debt for more million quarter sales, diluted XX prior in with that in XX.X%, have points for of increase period. a was net income and days, fluctuations. up $XXX,XXX quarter Notably, million $X.X to data expense and XXXX $X.X $X.XX environment. respectively. quarter from distributor toward per increases per currency of of from income percentage to share in absenteeism income XXXX quarter of in net for related which Interest $XX,XXX largely XX.X% flex or compared to Other in Net XXXX XXXX, second X.X% the points great the in the compared with a second income are levels. for $XXX,XXX or us plan exchange XX SG&A quarter X.X% attributable we decreased floor approximately costs, second $XXX,XXX, down for we of moving revenue quarter up the

to June prior the $XX.X XXXX, to for half $XXX increase to I’d sheet, in moving compared year. first Before results of first million were the X was Net for to like XX.X%. the period, our XX.X% XXXX of income income the Gross balance Net compared of half diluted million XX, decreases million the ended months million an $XX.X last to was the diluted quickly XX%, $XXX.X million the year. of for net net and $X.X year of the X sales million months respectively. or same recap XX.X% of profit sales of first period share, for or half X.X% of sales share to or $X.X per compared for first the per XXXX XXXX or $X.XX $X.XX compared of

as sheet $XXX.X million $XX.X as XX, December XX, Turning and of XXXX, million compared of of of March compared XX, Cash of June XXXX, XXXX, million to $XXX of XX, and balance $XXX.X was as and of XX, $XXX.X as June March of million December XXXX. compared of million cash XXXX. million XX, million $XXX.X as June was XX, as and as equivalents to of XXXX, million $XXX.X Accounts December December of XXXX, March and XXXX, XXXX. XX, as $XXX.X million as receivable now. to the XXXX, Accounts $XXX.X June $XX.X XX, million $XXX as compared was XXXX, million of as XX, as XX, Inventories to million were payable XX, March XXXX. to $XX.X

ultimate working and after revolving drew end inventory additional we quarter, additional an drew needs $X quarter million During for facility we capital against as the while to awaiting delivery to we million customers. parts our final our continue an build $XX for credit

also from expand agreement primary May with same date. substantially million same our terms million XX, from our $XX XXXX We and a the the $XXX commitment existing on loan lender maturity to secured to

despite market capital expenditures, value forward as allocation any position a have we cut always, who to we as for That when allocate an those working a stakeholders. needs. continue prudent the continue and recovery caution will most from approach continue many strategy gain cutting press we While said, the we’ll have making we to spending. inventory, building of decisions and to feel in taken share use time a for capital ourselves view our places to generate effort an that in are abundance capital we chain disciplined higher supply their competitors to this when At

XXth the to on has quarter close of Directors the cash Lastly, per paid record September XX, of share dividend quarterly dividend. the September our payable $X.XX business Board the that of XXXX, XXXX, a to X, marking shareholders of at company approved consecutive

call the closing to back remarks. for Now Will some turn I’ll

Will Miller

Debbie. Thank you,

as everything our While is we deliver move the we pleased manner sequential customers, driving we as line line with growth our in year margin on improvement we power are realized. timely products possible. bottom our Demand partners for still experiencing for and and as as our are and more suppliers prospects to committed price fully strong, in are through increases quarter, this are and top doing our challenges our commitments to to our

that hopeful impacts will and abate. are inflationary supply We chain

rates this more are environment normal is to intermediate for execute dollar the it positioned only have Rising additional have in interest that in of business the new the and continued headwinds uncertainty. with Europe, conflict relative we However, term. the continue to as the if strength added

the However, we fundamentals by our encouraged are in markets. long-term

the decisions whenever like position expect continued we to I At open the questions. thank any of cope the entire to this be. time, year recovery of team proactive in throughout with well a time we to for for our us support like and results As we’d impacts, that continue we to line stakeholders we all for made their and yield that line macroeconomic closing, may move have more improvement these In Miller as management would bottom Industries.

Operator

Industries. Ursaner [Operator first comes Instructions] Miller from Our Arnold question with

Arnold Ursaner

I dramatic focus facility. first on it’s a in Family Actually, want to increase credit the your Office,

have to on and As you $XXX $XX indicated, date you to took million. it expanded million

finished indicated for build you seasonal likely more to more in capital. think getting be this Should as a I credit you of normal, referred should you working think significant primarily to product? start generate new as that is out flow or we cash this the

Will Miller

if needed believe know I absolutely it’s don’t time. I at you’re it’s but in necessarily this seasonal, moment correct. certainly,

we customer in the meet of as demand. to level deliver inventory arrive, we quickly to we’ve that as can our that final finished product finished goods materials that so from to as seen can So raw to increase we final an possible level facets continue most to produce all as component parts the

it expect to our temporary opinion, our means don’t in is but I new would it normal. So be of temporary. term the today, not what I know

Arnold Ursaner

you Can the up expenditures a know the for -- had Okay. you the balance capital significant of the expect? facility give capital year of the pretty building year. beginning expenditure new you freshen us I should we at what and Can your

Debbie Whitmire

the We’ve in got focused several and queue, around projects robotics automation. primarily

as sure efficiencies and Just many we trying possible as to through that technology make get automation.

more probably looking we’re going So a historical forward. depreciation levels at

Arnold Ursaner

you it’s call, efficiencies imagine gotten kind this of freshen labor in completely situation. there? resolved of your mention how time, that can didn’t the In the your achieving and adds has period gone up you’re labor and I training on but short incremental perhaps side a

Will Miller

of in to time, are needs the we employees frame XX-day our close always, a are There of there’s U.S. XX- new turnover that time onboard to at the don’t -- as full facilities, cut. at in are our and when moment -- most make team. operations employment meeting believe and I the we

hands our we our hands-on making standpoint, a and an adding However, and are of our employees. to we seeing of a are to facilities structure with additional to training think bit be supervision more I have level changes less from little inside look turnover on

we’ll I this benefit So us remainder see through the of year that the in future. and think

for it a employees. little very doing today, to It’s all So doing the market has market a a higher bit with we’re job, is than well. be but the cost very in we’re Certainly, good been. right today looking of employees

Arnold Ursaner

has of versus in price? me, revenue, you it highlight cadence your questions, that quarter could equally continued Okay. of month chain have the revenue some in month a about be for In lot supply couple couple maybe by One the to growth the is of it’s questions. about seeing I if comment trends. you on unfavorable you of and improvement But much X how maybe give you. thank mix important you’re questions referred more bit would of volume can terms us times. as the know a July? into but And I a little sense of A that -- some

Will Miller

want or You you want me to... [indiscernible]

Debbie Whitmire

this as month-to-month any every activity. right new And dependent we challenge. supply say all day on to It far now see is a wouldn’t be trends I point. at chain as seems

mentioned, in -- and try that or facets revenue Will it As be relief -- inventory of all increased our to for we’ve facets all chain those supply in increased when ready comes.

you’ve got us point. on at versus... it with crystal month-to-month please if this share So Volume a ball, a

Arnold Ursaner

see change You by didn’t a month. correct a month statement? QX meaningful Is within that

Debbie Whitmire

That’s correct. Sorry, -- versus Volume price ahead. go

Arnold Ursaner

No, my question. that next was

Debbie Whitmire

quarter. Okay. Volume the put we into kind as disclosed mentioned And versus second of think we’ve in throughout Will those price, the that I place. rolled earlier, increases

second So of I would quarter. say probably increases in were the XX% those

difference. were volume, -- little, a we the volume-wise but So pricing up the down made

on price substantial probably growth in amount there’s increase in based the quarter. there say would I So of second the a

Arnold Ursaner

Okay.

your your the highlighted the bigger in, if that in of June, disclosed XX% the the price increase a a a to to at we you margins backlog in to in surcharge you now you you had a recovering XXXX. up most increase and that I fully average question the that in your but I’m was would you price know approaching guessing June. take me in And a investors normalized to -- are ball, an But I’m I surcharge So other what that impact built you’re expect when see on went crystal went in is the reading where should business? guess know X-year anything X% X and Q, XXXX. but I for don’t speak April backlog is, have point in like don’t or you costs. going I’d question if call, order,

Will Miller

From of every or every point, pricing. majority a backlog pricing -- the is say current I vast products standpoint, should in our at -- at all this

applied extending of early and/or surcharges of and increases June our protection ‘XX, effect. as backlog that on in price of all through our any were So price different the X taken have XXXX

backlog pricing are So new the pricing, as is not only at current orders at well. current

Your that product mix put question more price us increases to a back about XXXX in did it. margin. in to have a believe mix prior place are some we say push higher product would that COVID we’ve the starting I to in margins, that military level normalized of The

we as far back that XXX% I’m not pricing So believe put going place say were, that to in we’re I us but -- is but in we’ve the as product, commercial that back to where pushing direction. that

Arnold Ursaner

Okay.

Will Miller

review. constant under And

we by make margins the month watching as needed. the as So produce are we’ll and adjustments product month, we

Arnold Ursaner

Okay.

second to So your half your the of the you get assuming and dependent I guess missing expect get quarter. literally in of Deb to back have you volume question been to backlog improve -- my the the been improved? ability completely the or components you’ve on mentioned the it critical in chain slightly be, that is gets I would given volume year, volume you as start supply the have down half year, can look would that to the might

Will Miller

is, on which parts is It determined when the our arrive. component opinion, XXX% big if, in

well sourcing We team changes to are as purchasing find make component quickly alternate and our working as suppliers as possible for and engineering diligently parts. primary to with as operations

Arnold Ursaner

your problem? chassis biggest Are still

Will Miller

components. hydraulic around don’t as still Chassis a largest are our as today, an But from well believe components, finished hovering standpoint, product issue cylinders, valves, I is that issue. winches, electrical

and remote lighting controls So control systems.

Arnold Ursaner

Well, lot questions. a I’ve you asked of

give a chance. I’ll So others

Will Miller

Not problem. a

Operator

additional [Operator Instructions] We Arnold from have questions Ursaner.

Arnold Ursaner

down in with management they’re I key yet, different to line one SG&A trying of it income a operating quick But bonuses impacted executive assuming our which jump know at driven. can it look had the me. please year-over-year, I’m and being you you I’m of -- on remind determinants revenues of with one comp? don’t Just -- have us performance just front components. I right many have in your

us If that factors of give drive the you could a compensation? reminder executive key

Debbie Whitmire

March of put was place new in year. There’s that structure a in Sure. this

release is there compensation based executive pretax on is income. a that. for out But So there

So will income affect compensation. yes, certainly, pretax management lower

Arnold Ursaner

correct? increase factors. Sales in factors, SG&A that is commissions So the other or is other

Debbie Whitmire

to benefit. It staff employee that’s question. is not administrative comp, and if It’s your related management

Arnold Ursaner

Yes.

Operator

I’ll There management to this questions time. are floor remarks. further the hand no at closing back for

Will Miller

you Thank today, call. conference we look Have forward again and like quarter all the joining third with speaking thank us call I’d to for our you. you day. on a wonderful to on

Operator

you. Thank All great a disconnect. parties Have may now day.

Mike Gaudreau	FTI Consulting
Bill Miller	Chairman
Will Miller	President and CEO
Jeff Badgley	President, International and Military
Debbie Whitmire	EVP and CFO
Frank Madonia	EVP, Secretary and General Counsel
Vince Tiano	Chief Revenue Officer
Jamison Linden	Chief Manufacturing Officer
Arnold Ursaner	Miller Industries

Miller Industries (MLR) 7 Aug 222022 Q2 Earnings call transcript