Miller Industries’ Earnings Call: Challenges and Resilience

Miller Industries, Inc. ((MLR)) has held its Q2 earnings call. Read on for the main highlights of the call.

Miller Industries’ recent earnings call painted a picture of both challenges and resilience. The company faced significant hurdles in the second quarter of 2025, with a sharp decline in net sales and net income, largely due to lower consumer confidence and a drop in chassis volumes. Despite these setbacks, Miller Industries managed to improve its gross margin, reduce debt, and increase its cash balance. Positive developments in military contracts and RFQ activity offer a glimmer of hope, though uncertainties remain due to the suspension of earnings guidance and ongoing CARB regulation issues. Overall, the earnings call presented a balanced view of the company’s current state.

Gross Margin Improvement

The earnings call highlighted a notable improvement in Miller Industries’ gross profit margin, which rose to 16.2% from 13.8% year-over-year. This improvement was attributed to a higher percentage of body deliveries compared to chassis volumes, showcasing the company’s ability to optimize its product mix effectively.

Debt Reduction

Miller Industries made significant strides in reducing its debt, cutting down its balance by $20 million during the second quarter, with an additional $5 million paid down since. This brings the current debt balance to $50 million, reflecting the company’s commitment to strengthening its financial position.

Increased Cash Balance

The company’s cash balance saw a healthy increase, rising by $4.4 million sequentially and $7.5 million since the end of last year, reaching $31.8 million. This improvement in liquidity positions Miller Industries well for future investments and operational needs.

Military Contracts and RFQs

Miller Industries continues to see positive activity in military contracts, with a recently signed agreement with the Canadian military and ongoing RFQs. These developments indicate potential future business growth and diversification opportunities.

Significant Net Sales Decline

Net sales for the second quarter of 2025 were reported at $214 million, marking a substantial 42.4% decline from the previous year. This drop was primarily due to a decrease in chassis volumes, highlighting the challenges the company faces in maintaining its sales momentum.

Decreased Net Income

The company’s net income fell to $8.5 million or $0.73 per diluted share, down from $20.5 million or $1.78 per diluted share in the prior year period. This decline underscores the impact of reduced sales and market challenges on Miller Industries’ profitability.

Order Intake Drop

Miller Industries experienced a 30% decrease in order intake from distributors, driven by lower consumer confidence and elevated cost of ownership. This decline in demand poses a significant challenge for the company’s future sales prospects.

Suspension of Earnings Guidance

The company has suspended its earnings per share guidance for the fiscal year 2025 due to potential extraordinary expenses and potential losses in the second half of the year. This decision reflects the uncertainties and challenges Miller Industries anticipates in the near future.

Challenges with CARB Regulations

Sales into California have been limited due to CARB regulations, impacting the company’s overall market potential in the state. This regulatory challenge adds another layer of complexity to Miller Industries’ market strategy.

Forward-Looking Guidance

In its revised guidance, Miller Industries anticipates revenues between $750 million and $800 million for the fiscal year, while suspending earnings per share guidance due to ongoing market uncertainties. The company is focusing on cost reduction initiatives and production adjustments to normalize inventory levels, with expectations of a potential commercial market recovery in the near term. Despite current challenges, Miller Industries is strategically positioning itself for future growth.

In conclusion, Miller Industries’ earnings call reflected a balanced sentiment, with both challenges and positive developments. While the company faces significant hurdles, such as declining sales and regulatory issues, its efforts in improving gross margins, reducing debt, and securing military contracts provide a foundation for potential future growth. The suspension of earnings guidance highlights the uncertainties ahead, but the company’s strategic initiatives offer hope for a recovery in the commercial market.