Executive Summary

Q2 2025 results reflected sharp volume compression and channel destocking: revenue fell 42.4% year over year to $214.0M and 5.1% sequentially; EPS was $0.73. Management cited retail activity down 20% QoQ and order intake down 30% amid elevated end-market cost of ownership and distributor inventory overhang .
Versus S&P Global consensus, revenue missed (consensus $234.95M* vs actual $214.03M), while EPS beat (consensus $0.625* vs actual $0.73). The EPS beat was aided by favorable mix (higher body vs chassis) that lifted gross margin to 16.2% and sharply lower interest expense vs. last year .
2025 outlook reset: revenue guidance was cut to $750–$800M (from $950M–$1.0B in March), and EPS guidance was suspended due to potential extraordinary costs from company-wide cost actions; subsequent to the quarter, the company announced ~150 position reductions to right-size the cost base .
Cash conversion and deleveraging improved: cash ended Q2 at $31.8M; long-term debt fell to $55M at quarter-end and to $50M post-quarter, positioning MLR to prioritize the dividend and opportunistic repurchases against a still-active military opportunity pipeline .

What Went Well and What Went Wrong

What Went Well
- Mix and cost tailwinds supported margins despite volume pressure: gross margin expanded to 16.2% (vs. 13.8% LY) “largely driven by product mix,” with more bodies and fewer lower-margin chassis in the sales mix .
- Balance sheet strengthening: Q2 cash rose to $31.8M; long-term debt fell by $20M in the quarter to $55M, and was $50M shortly after quarter-end, reflecting accelerating AR conversion and working capital normalization .
- Management confidence in long-term demand drivers and pipeline: “miles driven, average age of vehicles… and accidents per mile are steadily climbing,” and management highlighted “potential upside from pending military contracts” .
What Went Wrong
- Demand and channel softness worse than expected: retail activity down 20% QoQ and order intake down 30% due to lower consumer confidence, high insurance/interest costs, tariff-related price increases, and elevated distributor inventories .
- Outlook reset and EPS uncertainty: full-year revenue guidance cut to $750–$800M, EPS guidance suspended due to potential extraordinary expenses/possible losses in H2 tied to operational initiatives .
- Post-quarter cost actions underscore end-market pressures: announced ~150 position reduction across three plants as part of a broader cost reduction plan .

Financial Results

Income statement snapshot (USD millions, except per-share and %)

Metric	Q2 2024	Q4 2024	Q1 2025	Q2 2025
Revenue ($M)	371.451	221.907	225.651	214.032
Gross Profit ($M)	51.078	33.458	33.944	34.586
Gross Margin %	13.8%	15.1%	15.0%	16.2%
SG&A ($M)	22.773	19.680	23.260	23.404
SG&A % of Sales	6.1%	8.9%	10.3%	10.9%
Net Income ($M)	20.514	10.532	8.065	8.458
Diluted EPS ($)	1.78	0.91	0.69	0.73

Q2 2025 vs Street consensus (S&P Global)

Metric	Consensus*	Actual	Surprise Direction
Revenue ($M)	234.95*	214.03	Miss
Diluted EPS ($)	0.625*	0.73	Beat

Other operating/financial KPIs

Interest expense: $0.294M in Q2 vs. $2.048M LY, down ~85.6% (lower customer floorplan expense and reduced debt) .
Dividend: $0.20 declared for Q2, payable 9/15/25; 59th consecutive quarterly dividend .
ROE (TTM): 10.6% (company presentation) .
No segment disclosures were provided in Q2 materials; results discussed on a consolidated basis .

Balance sheet and cash metrics (USD millions)

Metric	Dec 31, 2024	Mar 31, 2025	Jun 30, 2025
Cash & Equivalents	24.337	27.360	31.821
Long-term Obligations	65.000	75.000	55.000
Accounts Receivable	313.413	292.574	270.419
Inventories	186.169	164.897	165.458
Accounts Payable	145.853	113.512	98.035
Quarterly Dividend/Share ($)	0.20	0.20	0.20

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue	FY 2025	$950M–$1,000M	$750M–$800M	Lowered
Diluted EPS	FY 2025	$2.90–$3.20	Suspended	Suspended
Dividend/Share	Quarterly	$0.20 (maintained)	$0.20 (maintained)	Maintained

Management added that operational initiatives under evaluation could result in extraordinary expenses and potential losses in H2 2025, contributing to suspension of EPS guidance .

Earnings Call Themes & Trends

Topic	Q4 2024 (Q-2)	Q1 2025 (Q-1)	Q2 2025 (Current)	Trend
Demand/Order Intake	Macro headwinds; rising cost of ownership flagged	Uncertainties persist; working capital/cash conversion improving	Retail −20% QoQ; order intake −30%; confident long term	Worsened ST
Distributor Inventory	Normalization expected post-COVID chassis swings	Strategy to reduce field inventory and lead times	Elevated inventory persists; lowering production to accelerate destock	Deteriorated ST
Tariffs	Key uncertainty	Implemented tariff surcharge, price increases	Continuing surcharges/price actions; supply chain mitigation	Active mitigation
CARB/Regulation	CARB ACT risk cited	—	California only enforcing; sales limited until federal action	Unchanged exposure
Military Pipeline	Anticipated developments	Strong global activity	Canadian contract signed; multiple large RFQs active	Building
Capital Allocation	Dividend; 2024 repurchases $2.9M	$2.1M buybacks; $20M remaining authorization	Dividend priority; repurchases to continue; deleveraging	Ongoing

Management Commentary

Strategic posture: “We are closely monitoring and adjusting production levels to meet current demand and accelerate the reduction of channel inventory, taking significant steps to improve our costs, and securing our supply chain to mitigate the long-term risks of tariffs.” – CEO William G. Miller II .
Long-term demand drivers: “All fundamental drivers of our long-term business performance, such as miles driven, average age of vehicles on the road, and accidents per mile, are steadily climbing.” – CEO .
Cash and leverage: “As expected, the business is generating significant free cash flow… which we are using to pay down debt…” – CEO .
Margin outlook: “We believe margins will settle back in the mid thirteens as we move forward,” as mix normalizes (timing uncertain) – CEO (Q&A) .
Outlook reset: “We now expect revenue in the range of $750,000,000 to $800,000,000 and… are suspending guidance on earnings per share…” – CEO .

Q&A Highlights

Cost actions: Management is reviewing SG&A and broader projects (IT, marketing, sales), aiming to postpone non-critical spend without impairing long-term capacity .
Commercial incentives: Working with chassis partners on incentives, especially in Class 5, to help move dealer inventory; promotional stance remains disciplined on value positioning .
Macro optionality: Potential rate cuts and newly passed accelerated depreciation could aid year-end demand; not embedded in guidance and would represent upside .
Buybacks: $25M authorization (April 2024); ~$5M executed to date; ~$20M remaining; board supportive given valuation and long-term positioning .
Mix/margins: As chassis inventory normalizes, mix should revert and gross margins “settle… in the mid-13s” over time .

Estimates Context

Q2 2025 vs S&P Global consensus: Revenue missed ($234.95M* vs $214.03) while EPS beat ($0.625* vs $0.73), reflecting better mix and lower interest expense despite weaker volumes .
FY 2025: Company revenue guidance $750–$800M brackets Street revenue consensus $782.55M*; EPS guidance suspended vs Street $1.76*, implying downside risk if restructuring/extraordinary costs materialize .

Q2 vs consensus (S&P Global)

Metric	Consensus*	Actual	Surprise Direction
Revenue ($M)	234.95*	214.03	Miss
Diluted EPS ($)	0.625*	0.73	Beat

FY 2025 context

Metric	Company Guidance	Street Consensus*	Comment
Revenue ($M)	750–800	782.55*	Guidance brackets consensus
EPS ($)	Suspended	1.76*	Street likely to reassess for H2 charges risk

Values retrieved from S&P Global.*

Key Takeaways for Investors

The quarter underscores cyclical pressure and channel destock: revenue fell faster than expected, but mix and lower interest expense supported an EPS beat; near-term narrative remains volume headwinds and inventory normalization .
The guide cut and suspended EPS introduce earnings uncertainty for H2 as cost actions flow through; subsequent workforce reduction (~150 roles) signals management’s resolve to resize for current demand .
Cash conversion and deleveraging are bright spots; continued debt paydown and dividend continuity mitigate downside while preserving optionality for repurchases under the remaining $20M authorization .
Watch for catalysts: improvement in dealer inventory turns, rate cuts and accelerated depreciation impacts, tariff clarity, CARB developments, and military awards (Canadian contract closed; larger RFQs pending) .
Margin trajectory likely moderates to mid-13% gross margin as mix normalizes; EPS leverage re-accelerates when volumes recover and destocking abates .
Estimate revisions: expect Street to lower H2 EPS dispersion given suspended guidance and potential extraordinary costs; revenue consensus already sits within the new guidance range .
Trading setup: the stock’s near-term path likely tracks channel inventory reduction and order intake reacceleration; any evidence of faster destock or new military wins could be upside catalysts, while prolonged retail weakness or tariff shocks are key risks .

Sources: Q2 2025 press release and 8‑K (including exhibits) ; Q2 2025 earnings call transcript ; Q1 2025 press release ; Q4 2024 press release ; Workforce reduction press release (Aug 14, 2025) . Values retrieved from S&P Global for consensus and target metrics where marked with an asterisk.*

MILLER INDUSTRIES INC /TN/ (MLR)·Q2 2025 Earnings Summary