MILLER INDUSTRIES ISSUES STATEMENT IN RESPONSE TO SHAREHOLDER LETTER

Rhea-AI Summary

Miller Industries, Inc. responds to Advisory Research's call for a strategic review process, emphasizing the success of their current growth strategy with a 48.4% total shareholder return over the past year.

Insights

Market Research Analyst

The call by Advisory Research for Miller Industries to form a special committee and conduct a strategic review is a significant event that warrants attention from a market research perspective. The company's defense, citing a 48.4% total shareholder return over the past year, suggests a strong recent performance. However, the push for a strategic review typically arises when investors believe there are untapped opportunities or inefficiencies in the current strategy that could be hindering further growth or maximizing shareholder value.

It is important to understand that such calls can often lead to corporate actions like divestitures, acquisitions, or even changes in management that could potentially unlock value. The response from Miller Industries indicates a confidence in their existing growth strategy, which may be rooted in their market position as the 'World's Largest Manufacturer of Towing and Recovery Equipment'. Yet, the market will likely keep a close watch on this development, as investor activism can lead to significant changes that might affect the company's stock performance.

From a market research standpoint, the key will be to monitor the company's performance indicators closely, such as revenue growth, profit margins and return on equity, to assess whether the current strategy continues to yield results in line with or above industry benchmarks. Additionally, the sentiment and actions of other shareholders in response to Advisory Research's public statement could influence the stock's volatility in the near term.

Financial Analyst

Investors are often interested in the dynamics between a company's management and its shareholders, especially when it involves strategic decision-making and potential conflicts. In this case, the disagreement between Miller Industries' board and Advisory Research highlights a critical aspect of investor relations. Miller Industries' reference to a 48.4% shareholder return is a strong indicator of past performance, but the financial analyst community would scrutinize whether this performance is sustainable under the current strategy.

Financial analysts would also evaluate the company's valuation metrics, such as price-to-earnings ratios, in comparison to industry peers to determine if the stock is currently undervalued or overvalued. This assessment could provide context to Advisory Research's claims regarding the need for a strategic review. If the company's valuation is indeed lower than its intrinsic value, there might be merit to the argument for exploring alternative strategies.

Furthermore, the financial implications of any strategic changes, such as costs associated with restructuring or the potential for unlocking hidden value within the company's assets, would be of interest. Analysts would project how these changes could affect future earnings, cash flow and ultimately, shareholder returns. The long-term financial health of Miller Industries, including its debt levels and liquidity, would also be considered to ensure that the company is positioned to capitalize on growth opportunities or withstand market downturns.

Investor Relations Expert

The public disagreement between Miller Industries and one of its shareholders, Advisory Research, is a matter of concern from an investor relations standpoint. The tone and content of the exchange can influence investor perception and confidence in the company's governance and strategic direction. The board's willingness to engage in dialogue and review its corporate strategy is positive, but the outright dismissal of Advisory Research's claims could be perceived as a reluctance to consider alternative viewpoints or strategies that may benefit shareholders.

Investor relations professionals would advise maintaining a balanced communication strategy that addresses shareholder concerns without appearing defensive or dismissive. Transparency in how the company evaluates and implements its growth strategy is essential to maintain trust. Additionally, the investor relations team would likely monitor the reaction of the broader investment community to this exchange, as it could impact investor sentiment and the company's reputation in the market.

It's also worth noting that such public disputes can attract the attention of other activist investors, potentially leading to a more concerted effort to influence the company's strategic direction. The company must be prepared to navigate these challenges while ensuring that its communication with shareholders is clear, factual and focused on the long-term interests of the company and its investors.

CHATTANOOGA, Tenn., March 21, 2024 /PRNewswire/ -- Miller Industries, Inc. (NYSE: MLR) ("Miller Industries" or the "Company"), the World's Largest Manufacturer of Towing and Recovery Equipment, today responded to a public statement issued by Advisory Research, a shareholder in Miller Industries, calling on the Miller Industries Board of Directors (the "Board") to form a special committee and conduct a strategic review process.

Ted Ashford, Lead Independent Director commented, "Our Board routinely reviews our corporate strategy and is willing to discuss and challenge management's plans for value creation. At this time, the Board believes that the execution of our current plan and growth strategy, which has driven 48.4% in total shareholder return over the past year, is the best means to maximize long-term shareholder value and drive continued positive change. We're disappointed, but perhaps not surprised that after months of earnest engagement, Advisory Research has concluded that it is not willing to put its thesis to a vote to shareholders, but has instead decided to make a self-serving and short-sighted public complaint, with spurious allegations and no credible path for long-term value creation."

"We welcome engagement with our shareholders and are always looking for ways to maximize value at Miller Industries. Thus far, Advisory Research's interactions with the Company have been consistently focused on near-term issues and share price performance. We are surprised by the persistent urgency in which they have insisted we move, particularly in light of the Company's share price performance over the past year. It appears that Advisory Research is operating based on faulty assumptions about the Company's fundamentals," continued Mr. Ashford.

The Miller Industries management team and Board have been in regular dialogue with Advisory Research since it initiated its position in August 2022. The management team has regularly made themselves available both in person at conferences, as well as virtually, scheduling calls with the Advisory Research team following quarterly earnings. In an effort to continue to engage in good faith, the Company also facilitated multiple Board-level meetings between Advisory Research and Miller Industries' Lead Independent Director, Ted Ashford, and Chair of the Nominating & Governance Committee, Leigh Walton. During these interactions, Advisory Research provided numerous and shifting critiques about Miller Industries, including ideas on strategy, margin expansion and leadership changes. Ultimately, Advisory Research plainly stated that its desire was for the Company to be sold. After the meetings, the two directors shared Advisory Research's perspectives with the entire Board for consideration.

Additionally, Advisory Research put forward two names for the Company to consider as potential additions to the Board. The Company thoroughly considered the candidates and conducted formal evaluations consisting of issuing and reviewing questionnaires, facilitating site visits with management and holding interviews with multiple Board members. Following the completion of that process, the Nominating & Governance Committee, as well as the full Board, determined the two candidates that Advisory Research put forth did not add any incremental value or skills beyond those the Company already has on its recently refreshed Board of Directors.

Mr. Ashford concluded, "We are proud of the current state of our business. Our backlog remains at near-record levels and our management team has been able to drive full year records for both net income and EPS in 2023, with high single digit growth expected on the horizon in 2024. We believe the Company and this management team, led by Chief Executive Officer William G. Miller, II., is well positioned to continue delivering excellent financial results, particularly given the strong macroeconomic backdrop ahead and the oversight of a highly effective Board of Directors."

About Miller Industries

Miller Industries is The World's Largest Manufacturer of Towing and Recovery Equipment®, and markets its towing and recovery equipment under a number of well- recognized brands, including Century®, Vulcan®, Chevron™, Holmes®, Challenger®, Champion®, Jige™, Boniface™, Titan® and Eagle®.  

View original content:https://www.prnewswire.com/news-releases/miller-industries-issues-statement-in-response-to-shareholder-letter-302096264.html

SOURCE Miller Industries, Inc.

FAQ

What is Miller Industries' ticker symbol?

Miller Industries' ticker symbol is MLR.

What percentage of total shareholder return has Miller Industries achieved over the past year?

Miller Industries has achieved a 48.4% total shareholder return over the past year.

What is Advisory Research's complaint about Miller Industries?

Advisory Research has made a public complaint calling for a strategic review process by Miller Industries' Board of Directors.

How has Miller Industries responded to Advisory Research's statement?

Miller Industries has stated that their current growth strategy has been successful in maximizing long-term shareholder value and driving positive change.

What has been Advisory Research's focus in their interactions with Miller Industries?

Advisory Research's interactions with Miller Industries have been focused on near-term issues and share price performance.