Release Date: August 08, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Miller Industries Inc (MLR, Financial) reported record revenues of $371.5 million for Q2 2024, marking a 23.7% increase year over year.
- Gross profit increased by 27.9% to $51.1 million, with gross margins improving by 50 basis points year over year and 120 basis points sequentially.
- The company has maintained strong demand and a stable backlog, with robust order intake and increased production internationally.
- Miller Industries Inc (MLR) has announced plans for production capacity expansion to maximize shareholder returns and support future growth.
- The company has increased its revenue guidance for 2024 to low double-digit growth, reflecting confidence in continued operational success.
Negative Points
- Cost of operations increased by 23.1% to $320.4 million, largely due to higher revenue levels.
- Interest expenses rose to $2 million from $1.7 million in the previous year, driven by increased debt levels to fund working capital.
- Cash and cash equivalents decreased to $23.8 million as of June 30, 2024, from $26.8 million as of March 31, 2024.
- The effective tax rate increased to 21.8%, primarily due to unfavorable adjustments to pre-tax income.
- The company borrowed an additional $15 million against its revolver to fund growth, indicating reliance on debt for expansion.
Q & A Highlights
Q: Can you provide some thoughts about margins for the rest of the year, given the increased cash supply and potential for pricing improvements?
A: William G. Miller, CEO: We believe that margins will maintain through the remainder of the year, and we expect our margins for 2024 to be in the mid-upper-13% range.
Q: Are you hearing any chatter about customers buying early in advance of the 2027 emissions changes for larger engines?
A: William G. Miller, CEO: There is chatter in the OEM truck market about pre-buying, but our customer base hasn't started discussing it significantly. We are monitoring the OEM and chassis markets closely as we approach the emission change date.
Q: What factors contributed to the year-over-year increase in net sales for the second quarter?
A: Deborah L. Whitmire, CFO: The 23.7% year-over-year increase in net sales was driven by increases in both production and deliveries.
Q: How are you managing your inventory levels, and what is your strategy moving forward?
A: Deborah L. Whitmire, CFO: Our inventory levels have remained relatively consistent. We will continue to invest in inventory as appropriate to ensure essential products are readily available and to turn work-in-process inventory into finished goods quickly.
Q: Can you elaborate on your capital allocation strategy, particularly regarding capacity expansion?
A: Deborah L. Whitmire, CFO: We are focused on investing in productivity improvements, capacity expansion, and employee health and safety. Capacity expansion is a key focus in the near to mid-term, and we will share updates as appropriate.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
