MILLER INDUSTRIES INC /TN/ Q2 FY2025 earnings call

• Market Challenges: Faced industry-wide demand headwinds with retail sales down 20% Q/Q and order intake from distributors down 30%, attributed to lower consumer confidence and elevated cost of ownership. - Inventory and Production: Elevated field inventory in distribution channel; adjusting production levels to reduce channel inventory. - Cost and Supply Chain: Implementing targeted cost reduction initiatives, monitoring tariff landscape, implementing surcharges on new orders and price increases on parts/accessories. - CARB Update: Sales into California limited until federal action on CARB regulations. - Outlook for H2 2025: Anticipate demand rebound but with continued retail customer pressure; adjusting production to reduce inventory, implementing cost reduction initiatives, monitoring tariff impacts, advocating for CARB resolution.

Net sales for the second quarter of 2025 were $214 million, a 42.4% year-over-year decrease from $371.5 million in Q2 2024. Gross profit was $34.6 million (16.2% of net sales) compared to $51.1 million (13.8% of net sales) in the prior year period. SG&A expenses were $23.4 million (10.9% of net sales) in Q2 2025, up from $22.8 million (10.3% of net sales) in Q2 2024. Interest expense was $294,000 in Q2 2025, a significant decline from $2 million in the prior year. Net income was $8.5 million or $0.73 per diluted share in Q2 2025, down from $20.5 million or $1.78 per diluted share in Q2 2024. Cash balance was $31.8 million, debt reduced to $50 million, accounts receivables were $270.4 million, inventories were $165.5 million, and accounts payable were $98 million at the end of Q2 2025.

• Revised 2025 revenue guidance to the range of $750 million to $800 million. - Suspended earnings per share guidance due to potential material impact from operational initiatives in the second half of 2025.

• Industry-wide demand headwinds including lower consumer confidence, elevated cost of ownership, and elevated field inventory. - Rapidly evolving tariff landscape with potential cost and pricing impacts. - Uncertainty regarding CARB regulations and their effect on sales in California.

Q: Deeper dive into cost reduction actions.

A: Currently analyzing all business aspects including SG&A, IT, marketing, sales; postponing some expenses and working with chassis partners on incentives.

Q: Sales side efforts to push product.

A: Strategically working with chassis partners on incentives/programs for distribution channel, focusing more on Class 5 model chassis.

Q: Interest rate cut impact on orders.

A: Potential upside, but current guidance based on no change in environment; rate cut could unlock orders.

Q: Buyback status.

A: $25 million original buyback plan, $5 million bought, $20 million remaining; Board evaluates quarterly and will aggressively consider in coming quarters.

Q: Military RFQ activity.

A: Successful small projects, Canadian military contract signed, working on larger RFQs with activity beyond pre-COVID levels.

Q: Back half gross margin mix.

A: Anticipate chassis inventory to normalize, margins to settle in mid-13s