MILLER INDUSTRIES INC /TN/ Q1 FY2025 earnings call

• Miller Industries is the world's largest manufacturer of towing and recovery equipment with global manufacturing facilities.
• First quarter performance aligned with expectations despite macroeconomic uncertainty, with efforts to reduce field inventory, streamline operations, and evaluate supply chain.
• Net sales decline due to normalized chassis shipments from OEMs. Gross margin improved due to product mix with higher body deliveries.
• Returned $4.4 million to shareholders, including share repurchases and dividends. Cash balance, accounts payable, receivables, and inventories details provided.
• Chassis situation, global military demand, tariff environment actions (tariff surcharge, supply chain diversification), Advanced Clean Truck regulation, capital allocation (dividends, share repurchases, debt reduction), and capacity expansion discussed.

For the first quarter of 2025, net sales were $225.7 million, a decline of 35.5% compared to $349.9 million in the same quarter last year. Gross profit was $33.9 million (15% of net sales) compared to $44.2 million (12.6% of net sales) in Q1 2024. Net income was $8.1 million or $0.69 per diluted share compared to $17 million or $1.47 per diluted share in Q1 2024. During the quarter, $4.4 million was returned to shareholders, including $2.1 million of share repurchases and the dividend. Cash balance was $27.4 million as of March 31, 2025, accounts payable reduced by nearly $33 million, accounts receivable declined by ~$21 million, inventories were $164.9 million as of March 31, 2025.

• Reaffirmed full year revenue guidance of $950 million to $1 billion.
• Expect EPS range from $2.90 to $3.20 per diluted share.
• Annual gross margin anticipated to be in the range of 13% to 13.5% and SG&A as a percentage of sales to be approximately 9.5%.
• Guidance assumes no major changes in regulations, unforeseen supply chain issues, or significant tariff impacts.

• Macroeconomic uncertainty.
• Impact of the Advanced Clean Truck regulation on supplying products to 6 large states.
• Uncertainties in the tariff environment.
• Supply chain challenges with critical components not domestically available and full onshoring not feasible.

Q: Can you talk about broad demand for tow trucks regardless of who's buying the chassis? How were order trends during the first quarter in units? And has that continued into April and May?

A: Retail activity through distribution channel remains consistent with last few quarters. Uncertainty in marketplace with customers waiting on tariff situation and tax bill.

Q: On the tariff topic, share broad number of COGS from China? Impact on guidance?

A: Minimal direct exposure from Miller Industries to China. Waiting on final tariff outcome, difficult to ascertain total impact but watching closely.

Q: On gross margin side, 15% in Q1, full year guidance. Any headwinds in back half?

A: Cautiously optimistic. Chassis shipments expected to increase, which may downwardly impact margins. Cautious due to unknown tariff landscape.

Q: Outline comment on chassis inventory situation at dealers? Months left until correct number?

A: Chassis below body inventory. Anticipate another 30 to 90 days of additional inventory before chassis orders pick up, except CARB-compliant states.