Miller Industries Reports 2020 Second Quarter Results

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Miller Industries (NYSE: MLR) reported second-quarter results for 2020, revealing a 42.2% decline in net sales to $128.5 million, down from $222.3 million in Q2 2019. Net income also fell 45.5%, totaling $5.8 million, or $0.51 per share. Over six months, net sales decreased 27.4% to $304.6 million. Despite challenges from COVID-19, the company reduced long-term obligations by $25 million, and declared a quarterly dividend of $0.18 per share. CEO Jeffrey Badgley emphasized ongoing investments in technology for operational efficiency.

Positive

• Reduced long-term obligations by $25 million, improving balance sheet.
• Continued investments in technological improvements for operational efficiency.
• Declared a quarterly cash dividend of $0.18 per share, marking thirty-nine consecutive quarters of dividends.

Negative

• Net sales decreased by 42.2% year-over-year.
• Net income fell by 45.5%, impacting shareholder returns.
• Operational challenges due to temporary shutdowns and supply chain disruptions from COVID-19.

CHATTANOOGA, Tenn., Aug. 5, 2020 /PRNewswire/ -- Miller Industries, Inc. (NYSE: MLR) (the "Company") today announced financial results for the second quarter ended June 30, 2020.

For the second quarter of 2020, net sales were $128.5 million, a decrease of 42.2%, compared to $222.3 million for the second quarter of 2019. Net income in the second quarter of 2020 was $5.8 million, or $0.51 per share, a decrease of 45.5%, compared to net income of $10.7 million, or $0.94 per share, in the prior year period. Long-term obligations decreased by $25.0 million, reducing our credit facility balance to $5.0 million as of June 30, 2020.

Gross profit for the second quarter of 2020 was $17.7 million, or 13.8% of net sales, compared to $25.2 million, or 11.3% of net sales, for the second quarter of 2019. Selling, general and administrative expenses were $10.1 million, or 7.8% of net sales, compared to $11.0 million, or 4.9% of net sales, in the prior year period.

For the six months ended June 30, 2020, net sales were $304.6 million, a decrease of 27.4% compared to $419.6 million in the prior year period.  The Company reported net income of $11.3 million, or $0.99 per share for the six months of 2020, a decrease of 41.8% compared to net income of $19.3 million, or $1.70 per share for the first six months of 2019.

The Company also announced that its Board of Directors has declared a quarterly cash dividend of $0.18 per share, payable September 14, 2020 to shareholders of record at the close of business on September 7, 2020, the thirty-ninth consecutive quarter that the Company has paid a dividend.

Jeffrey I. Badgley, Co-Chief Executive Officer of the Company stated, "Our performance during the second quarter continued to be impacted by the ongoing COVID-19 pandemic. Second quarter revenue declined 42.2% year-over-year as a result of temporary shutdowns of some of our facilities, the shutdown of part of our supply chain, and the implementation of health and safety operating adjustments, all of which weighed on our production capacity. Despite the challenging circumstances, we remained focused on optimizing our production schedules to meet customer demand and reduce operating costs, while maintaining stringent social distancing and sanitary protocols to protect the health and safety of our employees. Additionally, we maintained a constant dialogue with our distribution network throughout the quarter so we could quickly and efficiently fulfill customer orders. I am very proud of the continued commitment to operational excellence from the entire Miller team as we work together to navigate the business through this uncertain market environment."

Mr. Badgley continued, "During the second quarter, we continued to invest in crucial technological improvements that will further enhance our operational efficiency and enable us to emerge from this pandemic stronger than before. While we are still in the early stages of this rollout, I am pleased to announce that we remain on schedule. In addition to our operational improvements, we reduced our outstanding debt levels during the quarter to further strengthen our balance sheet and increase financial flexibility as we operate in this unpredictable environment. As we move into the second half of 2020, I am confident that our unwavering dedication to operational efficiency and our healthy balance sheet position us favorably to capitalize on future growth coming out of this crisis."

In conjunction with this release, the Company will host a conference call, which will be simultaneously broadcast live over the Internet. Management will host the call, which is scheduled for tomorrow, August 6, 2020, at 10:00 AM ET. Listeners can access the conference call live and archived over the Internet through a link at:

https://www.webcaster4.com/Webcast/Page/1034/36351

Please allow 15 minutes prior to the call to visit the site, download, and install any necessary audio software. A replay of this call will be available approximately one hour after the live call ends through August 13, 2020. The replay number is 1-844-512-2921, Passcode 21967043.

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®.

Certain statements in this news release may be deemed to be forward-looking statements, as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by the use of words such as "may," "will," "should," "could," "continue," "future," "potential," "believe," "project," "plan," "intend," "seek," "estimate," "predict," "expect," "anticipate" and similar expressions, or the negative of such terms, or other comparable terminology. Forward-looking statements also include the assumptions underlying or relating to any of the foregoing statements. Such forward-looking statements are made based on our management's beliefs as well as assumptions made by, and information currently available to, our management. Our actual results may differ materially from the results anticipated in these forward-looking statements due to, among other things: the effects of the coronavirus known as COVID-19 on our revenues, results of operations and financial condition; the cyclical nature of our industry and changes in consumer confidence; economic and market conditions; our dependence upon outside suppliers for our raw materials, including aluminum, steel, petroleum-related products and other purchased component parts; changes in price and availability (including as a result of the imposition of additional tariffs and the impact of the outbreak of COVID-19) of aluminum, steel, petroleum-related products and other purchased component parts; delays in receiving supplies of such materials or parts; our customers' access to capital and credit to fund purchases; operational challenges caused by changes in our sales volume; various political, economic and other uncertainties relating to our international operations, including restrictive taxation and foreign currency fluctuation; special risks from our sales to U.S. and other governmental entities through prime contractors; our ability to secure new government orders; changes in fuel and other transportation costs, insurance costs and weather conditions; changes in government regulation; failure to comply with domestic and foreign anti-corruption laws; competition and our ability to attract or retain customers; our ability to develop or acquire proprietary products and technology; assertions against us relating to intellectual property rights; problems hiring or retaining skilled labor; a disruption in, or breach in security of, our information technology systems or any violation of data protection laws; changes in the tax regimes and related government policies and regulations in the countries in which we operate; the effects of regulations relating to conflict minerals; the catastrophic loss of one of our manufacturing facilities; environmental and health and safety liabilities and requirements; loss of the services of our key executives; product warranty or product liability claims in excess of our insurance coverage; potential recalls of components or parts manufactured for us by suppliers or potential recalls of defective products; an inability to acquire insurance at commercially reasonable rates; and those other risks referenced herein, and those risks discussed in our filings with the Securities and Exchange Commission, including those risks discussed under the caption "Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2019, as supplemented in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2020 and our Quarterly Report on Form 10-Q for the quarter ended June 30, 2020, which discussion is incorporated herein by this reference. Such factors are not exclusive. We do not undertake to update any forward-looking statement that may be made from time to time by, or on behalf of, our company.

Miller Industries, Inc. and Subsidiaries
Condensed Consolidated Statements of Income
(In thousands, except per share data) (Unaudited)
		Three Months Ended								Six Months Ended
		June 30								June 30
							%								%
		2020			2019		Change			2020			2019		Change
NET SALES	$	128,529		$	222,346		-42.2%		$	304,583		$	419,559		-27.4%
COSTS OF OPERATIONS		110,802			197,133		-43.8%			268,318			371,749		-27.8%
GROSS PROFIT		17,727			25,213		-29.7%			36,265			47,810		-24.1%
OPERATING EXPENSES:
Selling, General and Administrative Expenses		10,067			10,968		-8.2%			21,041			21,183		-0.7%
NON-OPERATING (INCOME) EXPENSES:
Interest Expense, Net		429			721		-40.5%			788			1,389		-43.3%
Other (Income) Expense, Net		(275)			57		-582.5%			(184)			311		-159.2%
Total Expense, Net		10,221			11,746		-13.0%			21,645			22,883		-5.4%
INCOME BEFORE INCOME TAXES		7,506			13,467		-44.3%			14,620			24,927		-41.3%
INCOME TAX PROVISION		1,680			2,784		-39.7%			3,363			5,584		-39.8%
NET INCOME	$	5,826		$	10,683		-45.5%		$	11,257		$	19,343		-41.8%
BASIC INCOME PER COMMON SHARE	$	0.51		$	0.94		-45.7%		$	0.99		$	1.70		-41.8%
CASH DIVIDENDS DECLARED PER COMMON SHARE	$	0.18		$	0.18		0.0%		$	0.36		$	0.36		0.0%
WEIGHTED AVERAGE SHARES OUTSTANDING:
Basic		11,405			11,400		0.0%			11,405			11,400		0.0%

 

Miller Industries, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(In thousands, except per share data)
		June 30,
		2020			December 31,
		(Unaudited)			2019
ASSETS
CURRENT ASSETS:
Cash and temporary investments	$	37,116		$	26,072
Accounts receivable, net of allowance for doubtful accounts of $1,186 and $1,106 at June 30, 2020 and December 31, 2019, respectively		123,161			168,619
Inventories, net		90,902			87,965
Prepaid expenses		5,715			4,796
Total current assets		256,894			287,452
NONCURRENT ASSETS:
Property, plant and equipment, net		93,604			90,735
Right-of-use assets - operating leases		1,432			1,640
Goodwill		11,619			11,619
Other assets		424			521
TOTAL ASSETS	$	363,973		$	391,967
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable	$	59,481		$	95,750
Accrued liabilities		29,581			27,813
Current portion of operating lease obligation		302			330
Current portion of finance lease obligation		22			21
Long-term obligations due within one year		185			368
Total current liabilities		89,571			124,282
NONCURRENT LIABILITIES:
Long-term obligations		5,000			4,998
Noncurrent portion of operating lease obligation		1,128			1,307
Noncurrent portion of finance lease obligation		26			37
Deferred income tax liabilities		3,360			3,416
Total liabilities		99,085			134,040
SHAREHOLDERS' EQUITY:
Preferred stock, $0.01 par value; 5,000,000 shares authorized, none issued or outstanding		—			—
Common stock, $0.01 par value; 100,000,000 shares authorized, 11,405,468 and 11,400,102, outstanding at June 30, 2020 and December 31, 2019, respectively		114			114
Additional paid-in capital		151,249			151,055
Accumulated surplus		119,412			112,261
Accumulated other comprehensive loss		(5,887)			(5,503)
Total shareholders' equity		264,888			257,927
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$	363,973		$	391,967

 

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SOURCE Miller Industries, Inc.

FAQ

What were Miller Industries' Q2 2020 net sales?

Miller Industries reported Q2 2020 net sales of $128.5 million, a decrease of 42.2% compared to the previous year.

How much did Miller Industries' net income decline in Q2 2020?

Net income for Q2 2020 was $5.8 million, down 45.5% from $10.7 million in Q2 2019.

What is the dividend declared by Miller Industries for Q3 2020?

Miller Industries declared a quarterly cash dividend of $0.18 per share, payable on September 14, 2020.

How did COVID-19 impact Miller Industries' Q2 2020 performance?

The ongoing COVID-19 pandemic led to significant revenue declines due to facility shutdowns and supply chain disruptions.

How did Miller Industries perform in the first six months of 2020?

For the six months ended June 30, 2020, net sales were $304.6 million, a decrease of 27.4% compared to the prior year.