Miller Industries Q2 2026 Earnings Call Transcript

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August 6, 2026

Key Takeaways

  • Positive Sentiment: Second-quarter revenue rose 12.1% year over year to $240 million, while gross profit reached $35.9 million and diluted EPS increased to $0.63 from $0.05 in the first quarter, reflecting improved production efficiency and labor-cost management.
  • Positive Sentiment: Strong cash generation improved the balance sheet, with cash rising to $65.6 million and debt declining by $20 million during the quarter; Miller also returned $4.9 million to shareholders through dividends and buybacks.
  • Positive Sentiment: Military commitments surpassed $200 million, primarily from heavy-duty recovery vehicles, with production expected to begin in 2027 and most revenue recognized in 2028 and 2029.
  • Positive Sentiment: The company remains on track with capacity investments, including the $8 million Gigean, France expansion and a new 200,000-plus-square-foot Ooltewah facility targeted for production readiness in late 2027.
  • Negative Sentiment: Domestic demand, retail activity, and distributor inventories are stable but not accelerating amid weak consumer confidence, geopolitical concerns, and elevated fuel prices; management expects full-year gross margins to normalize to the mid-13% range, below recent quarterly levels.
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Earnings Conference Call
Miller Industries Q2 2026
00:00 / 00:00

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Operator

Good day, ladies and gentlemen, and welcome to the Miller Industries Second Quarter 2026 Results Conference Call. Please note this event is being recorded. Now at this time, I would like to turn the call over to Will Miller at Miller Industries. Please go ahead, sir.

Will Miller
Will Miller
President and CEO at Miller Industries

Thank you. Good morning, everyone, and thank you for joining us for our second quarter 2026 earnings call. I want to start by recognizing the hard work of our employees around the world. Our second quarter results and our continued progress in strengthening our business reflects the dedication and passion of our team, our suppliers, our customers, and our shareholders. As always, our remarks today will include forward-looking statements. Actual results may differ materially. Please refer to our SEC filings and the safe harbor statement included in today's presentation.

Will Miller
Will Miller
President and CEO at Miller Industries

Before I hand the call over to Debbie to discuss our results in greater detail, I would like to start with a brief overview of the quarter. We delivered strong sequential and year-over-year revenue growth in the second quarter while navigating an inconsistent macroeconomic environment. We also achieved continued improvement in profitability, reflecting the production efficiencies our operations team has implemented.

Will Miller
Will Miller
President and CEO at Miller Industries

These production efficiencies have also enhanced our already strong cash generation, enabling us to further improve our balance sheet and reduce our debt balance. This provides us with greater financial flexibility to invest in our business, focusing on the areas where we see the greatest opportunities to create long-term value. Together, we believe these actions position us well for a strong second half of the year. Our core philosophy remains exactly as it has been since the start of the company. Miller Industries has the best people, the best products, and the best distribution network in the towing and recovery industry. That philosophy is the backbone of Miller Industries' 35-plus-year history and will continue to be our philosophy moving forward.

Will Miller
Will Miller
President and CEO at Miller Industries

Our 1,500-plus employees across Tennessee, Pennsylvania, France, the United Kingdom, and Italy, combined with our widespread distribution footprint, give us unmatched reach, capability, and reliability that continues to position the company for sustained, profitable growth. I want to express my gratitude for all of our team members across the U.S., Europe, and the U.K. for their continued dedication to the company. Their commitment allows us to execute with discipline today while continuing to build the foundation for longer-term growth and value creation. I'll now turn the call over to Debbie, who will provide an update on our financial results in more detail before returning with some more specific thoughts on our markets, capital allocation priorities, and guidance.

Debbie Whitmire
Debbie Whitmire
EVP, CFO, and Treasurer at Miller Industries

Thank you, Will. For the second quarter, revenue was $240 million, up 12.1% year-over-year and 32.7% sequentially. This growth was driven by steady production rates to meet retail activity and order intake levels. Gross profit was $35.9 million, or 15% of sales, and net income was $7.3 million. Our improved profitability was driven by operational efficiency and disciplined labor cost management, which was made possible by the outstanding execution of our operations teams across the globe. Gross profit was impacted by product mix as it returned to a more normalized balance of chassis and body after periods of significantly elevated inventory in our distribution channels. Additionally, diluted EPS was $0.63 per share, up from $0.05 in the first quarter.

Debbie Whitmire
Debbie Whitmire
EVP, CFO, and Treasurer at Miller Industries

As expected, EPS during the quarter continued to reflect transaction-related expenses from the Omars' acquisition, which impacted EPS by $0.11 in the quarter. We have now recognized the majority of expenses related to the transaction, and we believe that any further impact will be far less material to our financial results. Our integration of Omars continues to progress smoothly, and we remain confident that the acquisition will be accretive in the first year after recognizing these expenses. I'd like to now shift to a discussion of our balance sheet. At the end of the second quarter, we had a cash balance of $65.6 million, up $2.6 million from last quarter. We also reduced our debt by an additional $20 million since the end of Q1.

Debbie Whitmire
Debbie Whitmire
EVP, CFO, and Treasurer at Miller Industries

This combination of strong cash generation and a robust balance sheet provides us with greater financial flexibility to invest in our business, pursue strategic opportunities, and allocate capital to maximize value for the company and our investors. During the quarter, we were pleased to return $4.9 million directly to our shareholders in the form of share repurchases and dividends. I'll turn the call back to Will to discuss our markets and our outlook.

Will Miller
Will Miller
President and CEO at Miller Industries

Thank you, Debbie. In the domestic market, despite the ongoing geopolitical tensions and elevated fuel prices, we are pleased to see stable retail demand, order entry, and distributor inventory levels which remain at historical averages. We currently anticipate that retail activity and production volumes will remain steady and in line with current levels as the product mix returns to an optimal ratio between bodies and chassis.

Will Miller
Will Miller
President and CEO at Miller Industries

We remain confident in the strength of our business and our ability to execute against our long-term strategy. In our international and export business, backlog levels remain consistent, and our international facilities are operating at a steady production pace to meet sustained customer demand. The acquisition of Omars and our €8 million expansion in Jigé, France, which remains on track to be completed mid-2027, will both be significant drivers of the success of our global initiatives.

Will Miller
Will Miller
President and CEO at Miller Industries

Meanwhile, we continue to communicate with various domestic and international government agencies, building our confidence that our success and our military business will continue to grow in the second half of the year. We are pleased to report that our military commitments have now surpassed $200 million, and production is scheduled to begin in 2027.

Will Miller
Will Miller
President and CEO at Miller Industries

We anticipate that the majority of revenue will be recognized in 2028 and 2029. We expect our diligent work with militaries around the globe and our industry-leading defense grade recovery vehicles will be an important driver for our financial results in years ahead. As it relates to our manufacturing capacity expansion in Ooltewah, we are still aiming to be production ready by late 2027. We are beginning to wrap up site preparation this month and are on schedule to begin construction of the new facility by Q4 of 2026.

Will Miller
Will Miller
President and CEO at Miller Industries

The new 200,000-plus sq ft manufacturing facility will be instrumental to producing global high-volume defense-grade recovery vehicles and meeting increased demand for our global export markets while maintaining the ability to service our North American customer base. The project will also incorporate the latest manufacturing technology, helping streamline heavy-duty workflows and enhance our manufacturing efficiency. We believe our strong cash flow generation positions us well to fund most of the expansion organically over the next several years.

Will Miller
Will Miller
President and CEO at Miller Industries

Our strengthened balance sheet now provides us with even more flexibility to allocate capital to our five key priorities. Industry leading quarterly dividend currently at $0.21 per share. $2.5 million of share repurchases in the second quarter and approximately $11.5 million remaining under the current share repurchase authorization. Strategic optimization of working capital. Selective M&A opportunities, ongoing investment in capacity expansion, automation, and innovation.

Will Miller
Will Miller
President and CEO at Miller Industries

We're extremely proud that we've paid our dividend for 63 consecutive quarters. As Debbie mentioned in the second quarter, we continue to prioritize distributing capital by returning approximately $4.9 million to shareholders between our share repurchase program and dividends. This balanced approach allows us to continue investing in the company while also returning value directly to shareholders. We believe our cash generation capabilities will allow us to execute on each one of these priorities without expanding our credit facility. Given our steady levels of production, we anticipate to attain similar quarterly results of approximately $250 million in revenue for the remainder of the year. We remain confident that we are on track to achieve our previously stated guidance, generating between $850 million-$900 million in revenue for the full year 2026.

Will Miller
Will Miller
President and CEO at Miller Industries

We anticipate that our earnings per share will be in line with full year 2025 results, and gross margins to return to historical levels in the mid 13% range for the full year 2026. We look forward to meeting with investors to speak about exciting developments in Miller Industries in the coming months at the D.A. Davidson Small Cap Conference on August 11th, Midwest IDEAS Conference on August 26th, the D.A. Davidson Diversified Industrials and Services Conference on September 23rd, Southwest IDEAS Conference on November 18th, additional non-deal roadshows to be scheduled. We always welcome continued dialogue with our shareholders.

Will Miller
Will Miller
President and CEO at Miller Industries

In closing, the entire management team and I would like to thank all of our employees, suppliers, customers, and shareholders for their continued support of Miller Industries. We are well-positioned to execute on our priorities in the near term while continuing to drive long-term global growth.

Will Miller
Will Miller
President and CEO at Miller Industries

Thank you again for joining us. Operator, please open the line for questions.

Operator

Thank you. Ladies and gentlemen, we will now begin the question-and-answer session. Should you have a question, please press star followed by the number one on your touchtone phone. You will hear a prompt that your hand has been raised. Should you wish to decline from the polling process, please press star followed by the number two. If you are using a speakerphone, please lift the handset before pressing any keys. One moment, please, for your first question. Your first question comes from Mike Shlisky of D.A. Davidson. Please go ahead. Your line is open.

Mike Shlisky
Mike Shlisky
Analyst at D.A. Davidson

Yes. Hi, good morning. Thanks for taking my questions here.

Will Miller
Will Miller
President and CEO at Miller Industries

Absolutely. Good morning, Mike.

Mike Shlisky
Mike Shlisky
Analyst at D.A. Davidson

Yes, good morning. The outlook for revenues of $250 a quarter in the back half of the year, that's a slight increase from where you were in 2Q and certainly above where you were in the first quarter. The gross margins in those two quarters were 14% and even 15% this past quarter, but you're still guiding for the mid-13s for the full year. You also mentioned that mix is getting back to normal again as well between the chassis and the body. Can you maybe just help us give us a little more granular detail as to why gross margins might not be as robust in the back half as in the first half, if that's the case?

Will Miller
Will Miller
President and CEO at Miller Industries

Yeah. Our projections, Mike, right now, thank you for the question. Our projections right now are sort of to continue the current pace with bodies and chassis, but we're seeing that the product mix return back to historical levels. As our distribution base demands more chassis to integrate with their bodies, we're going to see an uptick in that chassis revenue, which will probably affect margins slightly. We're not exactly sure, but we think somewhere in that mid-13 percent range for the full year as it starts to get back down to historical averages. It might be a little bit higher than that, but we're close.

Mike Shlisky
Mike Shlisky
Analyst at D.A. Davidson

Okay. Great. I also want to clarify, I think I did this last quarter on the call, Debbie, that the EPS outlook for roughly flat year-over-year, that includes what looks like in the first half so far is almost $0.25 of Omars' kind of one-time items. I know you don't put out adjusted EPS, had it not been for that, your EPS would be up double digits, if you didn't have those one-time charges. Is that the way to think about it?

Debbie Whitmire
Debbie Whitmire
EVP, CFO, and Treasurer at Miller Industries

Yes, that's correct. The outlook does include those additional expenses that were recorded in the first and second quarter.

Mike Shlisky
Mike Shlisky
Analyst at D.A. Davidson

Okay. You said in your comments that those are the majority of the one-time items. Could you maybe just give us a sense as to how much more might be left, even just a small amount? What will the whole full year look like from a one-time Omars' perspective?

Debbie Whitmire
Debbie Whitmire
EVP, CFO, and Treasurer at Miller Industries

First quarter, I think we said it was $0.13 impact. Second quarter is $0.11. I would say the remainder of the year is $0.04-$0.05.

Mike Shlisky
Mike Shlisky
Analyst at D.A. Davidson

Okay, great. Thank you for that. Also want to ask about military. Will, I think it was $150 last quarter, now you're at $200 million. Can you give us a sense of what, broadly speaking, has been added? Is it extremely heavy stuff? Is it with a European partner? Then just a sense as to what the pipeline is, what you might think you got your sights on for the rest of the year, or just the overall pipeline size for military.

Will Miller
Will Miller
President and CEO at Miller Industries

Yeah. The additions that we saw moving us from north of $150 million in commitments to now over $200 million was, probably there were some small items in there along throughout the quarter. There was one more larger commitment. All of it was vast majority of it was heavy duty production, a few industrial car carriers. The vast majority was heavy duty production. We can't disclose, as far as the customer or region that the latest larger contract was at this time.

Will Miller
Will Miller
President and CEO at Miller Industries

We hope to have a little bit more light for investors as we move into Q3 and Q4 this year with regards to where some of these vehicles may be headed. Looking forwards, there's still, as there has been, a significant pipeline of potential opportunities with RFQs that we're actively working with different governmental agencies globally. We're excited and we're happy to see them starting to progress and move forwards.

Mike Shlisky
Mike Shlisky
Analyst at D.A. Davidson

Great. Thanks for that. Maybe turning to the core tow business, what can you share about your latest conversations with end users or with some dealers about how they feel about buying? I remember over the last, let's say, 12 months or so, there's been political concerns, there's been interest rate concerns. They seem to have gotten better at some points along the way here. Give us a sense, as you take the temperature of the customer base and dealer base, what they might be telling you about for the rest of this year and even the first part of 2027.

Will Miller
Will Miller
President and CEO at Miller Industries

Yeah. Right now, what we're seeing is it's mostly consumer confidence and geopolitical and fuel pricing is what's on everybody's mind. The confidence level isn't all that high. Our production levels, retail activity levels, inventory levels, everything's really flat right now. We're building at the proper rate. We're receiving orders to build at that rate. We're not having inventory shrink or grow at the distribution level. Our distribution's happy with the inventory levels that they have today. We seem to have pushed through all of the excess inventory for the most part at the distribution level. I think everybody's in a solid, steady state.

Will Miller
Will Miller
President and CEO at Miller Industries

There's obviously room for improvement in the domestic market, I don't think we're going to see any of that until we get some light at the end of the tunnel with the current issues in the Middle East and fuel prices settling back down. Still there, Mike?

Mike Shlisky
Mike Shlisky
Analyst at D.A. Davidson

Oh, yes. I just wanted to make sure that you were done. Yeah, thanks for those answers. I appreciate it. I will pass it along. Thank you.

Debbie Whitmire
Debbie Whitmire
EVP, CFO, and Treasurer at Miller Industries

Thank you.

Will Miller
Will Miller
President and CEO at Miller Industries

Thank you, Mike. We appreciate it.

Operator

There are no further questions at this time. I would now like to turn the call back over to Will Miller for closing comments.

Will Miller
Will Miller
President and CEO at Miller Industries

Thank you. I'd like to thank you all again for joining us on the call today, and we look forward to speaking with you on our third quarter conference call. If you'd like information on how to participate and ask questions on the call, please visit our investor relations website, millerind.com/investors, or email investor.relations@millerind.com. Thank you. May God bless you, and may God bless our troops.

Operator

Ladies and gentlemen, this concludes today's conference. We thank you for participating and ask that you please disconnect your lines.

Executives
    • Will Miller
      Will Miller
      President and CEO
    • Debbie Whitmire
      Debbie Whitmire
      EVP, CFO, and Treasurer
Analysts
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