Miller Industries Inc. (NYSE:MLR) Q3 2019 Earnings Conference Call - Final Transcript

Nov 07, 2019 • 10:00 am ET


Miller Industries Inc. (NYSE:MLR) Q3 2019 Earnings Conference Call - Final Transcript


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Good day, ladies and gentlemen, and welcome to the Miller Industries third quarter 2019 results conference call. Please note this event is being recorded. And now at this time, I would like to turn the conference over to Brendan Dunlap at FTI Consulting. Please go ahead, sir.

Brendan Dunlap

Thank you. Good morning, everyone. I would like to welcome you to the Miller Industries conference call. We are here to discuss the company's 2019 third 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; Debbie Whitmire, Executive Vice President and CFO, and Frank Madonia, Executive Vice President, Secretary and General Counsel.

Today's call will begin with formal remarks from management followed by a question-and-answer period. Please note in this morning's conference call management may make forward-looking statements in accordance with the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. I'd like to call your attention to the risks related to these statements, which are more fully described in the company's Annual Report filed on Form 10-K and other filings with the Securities and Exchange Commission.

With these formalities out of the way, I'd like to turn the call over to Jeff. Please go ahead, Jeff.

Jeffrey I. Badgley

Thank you and good morning. We are pleased to discuss our third quarter results with you today. This was a solid quarter. Miller Industries increased its gross profits, expanded its gross margins and continued to strengthen its balance sheet. The strong execution during the third quarter reflects our continued focus on driving operational excellence across our business.

Revenue during the third quarter declined 0.1% to $195.5 million versus $195.7 million a year ago, which reflects temporary supply chain challenges with certain chassis manufacturers. These challenges have been addressed by both the suppliers and ourselves and we do not anticipate this will impact the fourth quarter. Despite these temporary challenges, we were able to increase gross profits by 1.3% year-over-year to $21.7 million and expand our gross margins 10 basis points year-over-year to 11.1%, which reflects our strong cost control and discipline. As such, net income was $8.1 million or $0.71 per share compared to net income of $8.7 million or $0.76 per share in the third quarter of 2018.

Additionally, during the quarter we continue to invest in our business by enhancing our software capabilities to better serve our customers, which resulted in a 50 basis point increase in SG&A, as a percentage of net sales to 5.3%. The investments we're making in technology will enable us to increase our administrative efficiency, improve our data analytic capabilities and increase our service levels for our customers.

We are currently in the early phases of rolling out this new technology and I am pleased to announce that the implementation is on schedule. As we move into the fourth quarter we remain confident in the underlying strength of our business, both domestic and international, and are committed to