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MI

MILLER INDUSTRIES INC /TN/ (MLR)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 revenue was $225.7M and diluted EPS was $0.69; both slightly beat S&P Global consensus ($224.4M revenue, $0.625 EPS). The beat was driven by mix favoring manufactured bodies over chassis, lifting gross margin to 15.0% from 12.6% YoY . Revenue and EPS consensus values marked with * below; Values retrieved from S&P Global.
  • Management reaffirmed FY2025 guidance at the time: revenue $950M–$1.0B, EPS $2.90–$3.20, gross margin ~13–13.5%, and SG&A ~9.5% of sales .
  • Channel inventory and distributor chassis levels continued to normalize, improving cash conversion; the company returned $4.4M to shareholders (dividend + buybacks) and executed ~$2.1M of share repurchases; $20M remains on the authorization .
  • CEO flagged tariff-related uncertainty and announced a tariff surcharge on new manufactured orders, plus price increases in accessories/parts. Management highlighted robust military RFQ activity and anticipated H2 2025 improvement, entering 2026 “in a position of strength” .

What Went Well and What Went Wrong

What Went Well

  • Gross margin expanded to 15.0% (vs. 12.6% LY) on favorable product mix, with higher share of bodies vs. chassis .
  • Cash conversion and working capital improved sequentially: cash $27.4M (up from $24.3M), A/R down ~$21M, inventories down ~$21M; management expects further conversion as channel inventories normalize .
  • “Results for the quarter were in-line with our expectations as we continued to execute our strategy of reducing field inventory and product lead times…positioning ourselves for future growth.” – CEO Will Miller . Management reiterated FY2025 guidance including EPS and revenue ranges .

What Went Wrong

  • Net sales fell 35.5% YoY to $225.7M as chassis shipments normalized from prior-year elevated levels; diluted EPS fell to $0.69 from $1.47 (−52.8%) .
  • SG&A rose to $23.3M (10.3% of sales) from $21.5M (6.2%), driven by salary/CoL adjustments (2Q24) and higher benefits costs .
  • Management highlighted tariff volatility and CARB/ACT regulatory uncertainty limiting diesel chassis sales in certain states; tariff surcharges were implemented to mitigate cost risks .

Financial Results

MetricQ1 2024Q3 2024Q4 2024Q1 2025
Revenue ($USD Millions)$349.9 $314.3 $221.9 $225.7
Gross Profit ($USD Millions)$44.2 $42.0 $33.5 $33.9
Gross Margin (%)12.6% 13.4% 15.1% 15.0%
Net Income ($USD Millions)$17.0 $15.4 $10.5 $8.1
Diluted EPS ($)$1.47 $1.33 $0.91 $0.69
SG&A ($USD Millions)$21.5 $22.3 $19.7 $23.3
SG&A as % of Sales6.2% 7.1% 8.9% 10.3%

Estimates vs. Actuals (Q1 2025):

MetricConsensusActualBeat/(Miss)
Revenue ($USD Millions)$224.4*$225.7 +$1.3
Diluted EPS ($)$0.625*$0.69 +$0.065

Values retrieved from S&P Global.

Balance Sheet KPIs (Sequential)

MetricQ4 2024Q1 2025
Cash & Temp Investments ($USD Millions)$24.3 $27.4
Accounts Receivable ($USD Millions)$313.4 $292.6
Inventories ($USD Millions)$186.2 $164.9
Long-term Obligations ($USD Millions)$65.0 $75.0

Guidance Changes

MetricPeriodPrevious GuidanceCurrent Guidance (Q1 2025)Change
RevenueFY2025$950M–$1,000M $950M–$1,000M Maintained
Diluted EPSFY2025$2.90–$3.20 $2.90–$3.20 Maintained
Gross Margin %FY2025N/A~13%–13.5% Introduced
SG&A as % of SalesFY2025N/A~9.5% Introduced
Quarterly DividendOngoing$0.20 declared (Q4) $0.20 declared (Q1) Maintained
Share Repurchase AuthorizationOngoing$25M authorized; $2.9M used in 2024 ~$20M remaining; $2.1M executed in Q1 Active program

Earnings Call Themes & Trends

TopicPrevious Mentions (Q3 2024, Q4 2024)Current Period (Q1 2025)Trend
Supply chain & chassis cadenceChassis deliveries normalized YoY; margins sensitive to mix Mix favored bodies; margins at 15%; expect inverse margin as chassis deliveries rise Stabilizing with predictable cadence
Channel inventory normalizationDistributor inventory elevated; plan to slow shipments; normalization expected H2’25 Chassis inventory now below bodies; 30–90 days to reach optimal; improved collections Improving
Tariffs/macroTariff uncertainty, rising ownership costs pressuring demand Tariff surcharge on manufactured orders; accessory/parts price increases implemented Proactive mitigation; uncertainty persists
CARB/ACT regulatoryLimits diesel registrations; suppliers working on CARB-compliant chassis; timeline late ’25/early ’26 House passed H.J.Res. 87; Senate bill proposed; planning with no regulatory change; CARB-compliant deliveries expected late ’25/early ’26 Monitoring; operational contingency in place
Military RFQsCanadian contract; rising global RFQs Continued robust RFQ activity domestically/internationally Strengthening pipeline
Capital allocationDividend increase; buybacks authorized $4.4M returned; $2.1M buybacks; $20M remaining authorization Ongoing returns

Management Commentary

  • “Results for the quarter were in-line with our expectations as we continued to execute our strategy of reducing field inventory and product lead times as the industry returns to a normalized channel flow, positioning ourselves for future growth.” – CEO Will Miller .
  • “We recently implemented a tariff surcharge on all new orders of manufactured products, as well as additional price increases on all accessories and parts sales. We continue to diversify our supply chain, including continued reduction of our already-minimal exposure in China.” – CEO Will Miller .
  • “We returned $4.4 million to our shareholders, comprised of $2.1 million of share repurchases and the remaining balance of our industry-leading dividend.” – CFO Deborah Whitmire .
  • “We are reaffirming our full year revenue guidance of $950 million to $1 billion…and continue to expect an EPS range from $2.90 to $3.20 per diluted share. We anticipate our annual gross margin to be comparable to the prior year in the range of 13% to 13.5% and SG&A as a percentage of sales for the full year to be approximately 9.5%.” – CEO Will Miller .

Q&A Highlights

  • Demand/order intake: Retail activity consistent with recent quarters, but customers are cautious given tariffs and potential tax incentives; order trends steady through April/May .
  • Tariff impact: Direct China exposure is minimal; implemented tariff surcharge and price increases; watching supply chain impacts across EU/Mexico/Canada; guidance held pending clarity .
  • Margins mix sensitivity: Expect chassis shipments to increase through the year, creating downward pressure on margins from the 15% Q1 level; full-year margin guide 13%–13.5% reflects caution .
  • Distributor inventory timeline: Chassis inventory fell below body inventory; expected 30–90 days to reach optimal levels, enabling normalized orders (CARB-compliant states dependent on supply) .

Estimates Context

  • Q1 2025 beat: Revenue $225.7M vs $224.4M consensus*; EPS $0.69 vs $0.625 consensus*. Small beat on both lines, with mix-driven margin support offsetting volume normalization . Values retrieved from S&P Global.
  • Implications: Given management’s caution on margin mix as chassis deliveries rise and tariff/regulatory uncertainty, consensus may need to balance H2 normalization with SG&A elevation and potential margin headwind from chassis mix .

Key Takeaways for Investors

  • Mix-driven margin expansion to 15.0% provided a modest EPS beat despite sharp YoY volume normalization; watch chassis cadence and mix as the key margin swing factor .
  • Channel inventory normalization is a near-term catalyst for improved cash conversion and potentially better H2 shipment flow; receivables and inventories declined sequentially .
  • Tariff surcharge and price actions mitigate risk but create demand elasticity concerns; monitor pricing acceptance and distributor throughput .
  • Regulatory path remains uncertain; CARB-compliant chassis timelines (late ’25/early ’26) suggest pent-up demand could normalize in 2026; policy outcomes (House/Senate actions) are potential stock catalysts .
  • Capital returns continue: $0.20 quarterly dividend and active buybacks ($2.1M in Q1; $20M remaining authorization) underscore confidence and provide downside support .
  • Trading setup: Modest beat with maintained FY guide, improving working capital and margins; near-term volatility tied to tariffs/CARB news flow and distributor inventory progress .
  • Medium-term thesis: Military RFQs and normalized supply chain support growth runway; maintain focus on margin mix and operating leverage as chassis/body balance reverts .