Miller Industries Inc. (NYSE:MLR) Q2 2018 Earnings Conference Call - Final Transcript
Aug 09, 2018 • 10:00 am ET
Good day ladies and gentlemen, and welcome to the Miller Industries Second Quarter 2018 Results Conference Call. Please note this event is being recorded.
And now at this time, I would like to turn the call over to Ben Herskowitz at FTI Consulting. Please go ahead, sir.
Thank you, and good morning, everyone. I would like to welcome you to the Miller Industries conference call. We are here to discuss the Company's 2018 second quarter results which were released after the close of market yesterday. With us from the management team today are Bill Miller, Chairman of the Board; Jeff Badgley, co-CEO; Will Miller, President and co-CEO; Debbie Whitmire, EVP and CFO; and Frank Madonia, EVP, Secretary and General Counsel.
(Forward-Looking Cautionary Statements)
With these formalities out of the way, I'd like to turn the call over to Jeff. Please go ahead, Jeff.
Thank you, and good morning. We're pleased to discuss our second quarter results with you today. This was another strong quarter for Miller Industries as we achieved solid top line growth and gross margin expansion. We continue to increase our profitability through careful cost management and increases in production due to our disciplined execution of our plant consolidation and expansion efforts.
Our commitment to operational excellence continues to pay off, as evidenced by our 20.9% increase in gross profit and our 40.1% increase in net income as compared to the second quarter of 2017. Results this quarter were driven by continued strong demand in both our domestic and international markets.
We reported 2018 second quarter sales of $176.9 million, an increase of 15.5% compared to $153.1 million in the prior-year period. Net income was $7.6 million or $0.67 per share compared to net income of $5.4 million or $0.48 per share in the 2017 second quarter. Gross profit as a percentage of total sales this quarter was 12%, up from 11.5% in the second quarter of 2017.
Concurrently, selling general and administrative expenses decreased 40 basis points as a percentage of total sales to 5.5%. As of June 30, our plant expansion and consolidation efforts are substantially complete, which has increased efficiency and boosted production levels allowing us to meet the increased customer demand.
Our balance sheet remains healthy and we continue to strategically deploy our resources to drive organic growth. We remain confident in our competitive position and in our financial outlook.
Now I'll turn the call over to Debbie, who will review the second quarter financial results. After that, I'll be back with comments on the market environment and some closing remarks.
Thanks, Jeff, and good morning, everyone. Net sales for the 2018 second quarter were $176.9 million versus $153.1 million for the 2017 second quarter, a 15.5% increase.
Cost of operations increased 14.9% to $155.6 million for the 2018 second quarter compared to $135.5 million for the 2017 second quarter, reflecting increased cost associated with higher demand. Gross profit was $21.3 million or 12% of net sales for the 2018 second quarter compared to $17.6