Miller Industries, Inc. ((MLR)) has held its Q4 earnings call. Read on for the main highlights of the call.
Miller Industries recently held its earnings call, revealing a mixed sentiment for 2024. The company celebrated a record year with significant improvements in revenue and profit margins, driven by strong demand and strategic shareholder returns. However, challenges such as a significant revenue decline in Q4, supply chain volatility, and regulatory hurdles were also highlighted. Despite these issues, the company maintains a positive outlook for the latter half of 2025 and beyond, buoyed by strong market demand and recent military contracts.
Record Revenue and Profit for 2024
Miller Industries achieved record revenue, gross profit, net income, and EPS for the fiscal year 2024. The company reported net sales of $1.26 billion, marking a 9% increase from the previous year. This achievement underscores the company’s robust performance and strategic execution over the year.
Improved Gross Margin
The company saw an improvement in gross profit, which rose to $170.8 million or 13.6% of sales, compared to $151.9 million or 13.2% of sales in 2023. This improvement was attributed to an enhanced product mix and supply chain enhancements, reflecting efficient operational management.
Return to Shareholders
In 2024, Miller Industries returned $11.6 million to shareholders through dividends and share repurchases. Additionally, the company declared a $0.20 per share dividend for March 2025, demonstrating its commitment to delivering value to its shareholders.
Military Contract Win
A significant highlight for Miller Industries was being selected to supply Rheinmetall Canada with military recovery vehicles, part of a $230 million contract. This contract win signals potential future growth and strengthens the company’s position in the military sector.
Strong Demand and Positive Outlook
Despite facing near-term challenges, Miller Industries reported strong ongoing demand for its towing and recovery products. The company expects improved performance in the second half of 2025 and beyond, driven by this robust demand.
Significant Q4 Revenue Decline
The company faced a significant revenue decline in Q4 2024, with sales dropping to $221.9 million, a 25.1% decrease from Q4 2023. This decline was primarily due to a reduction in chassis shipments, highlighting challenges in the supply chain.
Impact of Chassis Supply Chain Volatility
Volatility in chassis deliveries led to revenue and margin fluctuations, affecting short-term results. However, Miller Industries anticipates normalization in the second half of 2025, which should stabilize the company’s financial performance.
Challenges with Advanced Clean Truck Regulations
New regulations limiting diesel-powered vehicle registrations in certain states have impacted sales. While efforts are underway to meet compliance, uncertainty remains, posing a challenge for future sales.
Rising Costs for End-Market Customers
End-market towers are facing challenges due to rising equipment ownership costs, including increased insurance premiums and fluctuating trade-in values. These rising costs are impacting the company’s customer base and could affect future sales.
Forward-Looking Guidance
Looking ahead, Miller Industries projects 2025 revenue between $950 million and $1 billion, with an EPS range of $2.90 to $3.20 per diluted share. The company anticipates a more stable market and will focus on working capital reduction and debt management to navigate future challenges.
In conclusion, Miller Industries’ earnings call painted a picture of a company that has achieved significant milestones in 2024, despite facing some challenges. The overall sentiment was cautiously optimistic, with a focus on strategic growth and overcoming regulatory and supply chain hurdles. Investors and stakeholders will be keenly watching how the company navigates the upcoming year, with particular interest in its military contracts and market stabilization efforts.