Miller Industries Q4 Earnings Call Highlights

Key Points

• Miller cut production in 2025 to work down elevated distributor inventories, driving Q4 revenue of $171.2 million and full-year revenue of $790.3 million, but management says inventories are normalized, production is ramping and it guided to 2026 revenue of $850–$900 million with gross margins returning to the mid‑13% range and stronger second‑half performance.
• The company closed the OMARS acquisition in December (one month of contribution), expects the deal to be accretive in year one, and is investing in European capacity (Jige expansion, Boniface efficiencies) while planning a $100 million, 200,000+ sq ft Ooltewah expansion to boost heavy‑duty production by late 2027.
• Miller reported more than $150 million of military commitments with production starting in 2027 and most revenue expected in 2028–29, and highlighted a strong export outlook across Europe, Australia, Japan, Mexico and Indonesia supported by a growing pipeline of military RFQs.

Miller Industries NYSE: MLR said it finished a challenging 2025 with fourth-quarter results “in line with our revised expectations,” as the company intentionally reduced production to work down elevated distributor inventory across its North American network. On its fourth-quarter 2025 earnings call, management pointed to improving retail order activity late in the quarter, momentum continuing into 2026, and a growing international and military opportunity set underpinning its 2026 outlook.

Fourth-quarter and full-year results reflect planned production reductions

For the fourth quarter, Miller reported revenue of $171.2 million, down 22.9% year-over-year, which management said was expected given the earlier decision to decrease production and allow distributor inventories to return to “historically normalized levels.” Gross profit was $26.5 million, representing 15.5% of sales, and diluted earnings per share were $0.29.

For the full year 2025, revenue totaled $790.3 million, down 37.2% from 2024. Gross profit was $120.4 million, or 15.2% of sales, and net income was $23.0 million, or $1.98 per diluted share.

Management said sequential improvement in retail order activity late in the fourth quarter has carried into 2026. With distributor inventory now back to historical levels, the company said it has “greater visibility into retail demand” and has begun increasing production levels at its U.S. facilities to meet demand.

Cost actions and OMARS acquisition-related expenses affected SG&A

SG&A expenses increased year-over-year in both the fourth quarter and full year, which management attributed primarily to:

• One-time expenses related to a voluntary retirement program in the third and fourth quarters, as the company executed planned workforce transitions.
• Transaction and integration costs tied to the acquisition of OMARS.
• Higher stock compensation expenses aimed at retaining key leadership talent and aligning executives with shareholders’ interests.

Miller said it closed the OMARS acquisition on Dec. 2, meaning fourth-quarter results included roughly one month of contribution. Management characterized the items above as “planned and strategic investments and expenses” supporting the company’s future growth strategy.

Normalized domestic inventory, stronger export outlook, and European capacity investments

Looking to 2026, management said the domestic market is showing normalized distributor inventory, steadier retail demand, and improved sales order entry. The company expects production to rise “methodically throughout Q1 and Q2” to match the demand recovery.

On the international front, management described the export business as a “major strength,” with an “encouraging” 2026 outlook. The company cited three primary drivers: consistent European demand, growing demand in other international markets (including Australia, Japan, Mexico, and Indonesia), and an expanded pipeline of global military requests for quotations (RFQs).

Management highlighted progress integrating OMARS, calling it “Italy’s premier towing equipment manufacturer,” and reiterated expectations that the deal will be accretive in its first year. According to management, OMARS adds sales channels, brand presence in Europe, and a manufacturing and distribution hub in a key growth region. The company also said the acquisition should lead to increased U.S. production to supplement OMARS’ integration capacity and help meet demand for heavy-duty products.

Miller also outlined ongoing investments across its European operations:

• Jige (France): An EUR 8 million expansion is on schedule and is expected to double heavy-duty integration capacity, with completion anticipated by mid-2027.
• Boniface (United Kingdom): The company is investing in production efficiencies to increase capacity for both light- and heavy-duty products.

Management said U.S. operations—particularly increased heavy-duty production capability in Ooltewah—are expected to support Jige, Boniface, and OMARS with reduced lead times, consistent quality, and higher production volumes.

Military commitments and planned Ooltewah expansion

Management said it started 2026 with more than $150 million in military commitments, with production scheduled to begin in 2027 and the “majority of revenue” expected to be recognized in 2028 and 2029. The company added that it is engaged in a substantial pipeline of additional military RFQs and called the current level of military activity “unprecedented” for the business.

To support future demand, Miller said it is beginning what it described as one of the most significant projects in its history: a 200,000+ square foot addition to its Ooltewah facility. The company estimates the investment at $100 million and said the project is expected to unlock capacity, streamline heavy-duty workflow, and improve manufacturing efficiencies. Management anticipates the new facility will be production-ready in late 2027.

The company said it expects to fund the majority of its expansion organically through operating cash flow “over the next several years” as it continues to generate cash and reduce debt.

Capital allocation and 2026 revenue and margin expectations

Management reaffirmed a disciplined approach to capital allocation and outlined five priorities:

• Paying a consistent quarterly dividend; the board increased the dividend 5% to $0.21 per share this quarter.
• Debt reduction; management said debt was reduced to $20 million in January 2026 through reductions in working capital.
• Share repurchases, including $2.2 million in the fourth quarter of 2025.
• Selective M&A opportunities.
• Ongoing investments in automation, innovation, people, and capacity.

Miller said it has paid a dividend for 61 consecutive quarters and returned approximately $15.1 million to shareholders in 2025 through dividends and share repurchases.

For 2026, the company guided to revenue of $850 million to $900 million. Management expects performance to accelerate in the second half of the year as manufacturing activity increases through the first and second quarters and product mix normalizes, with revenue approaching $250 million per quarter by the second half of 2026.

On margins, management said it expects gross margins to return to “historical levels” in the mid-13% range for the full year as product mix shifts back toward historical percentages of manufactured product and chassis. In response to an analyst question, management said it views the margin outlook as a normalization, noting margins in 2019 were in the mid-12% to high-12% range and that 2023 and 2024 averaged in the mid-13% range, although quarterly results can fluctuate based on chassis availability and shipment timing.

Management also said it has higher confidence in its 2026 outlook than it had a year ago, citing improved internal use of technology and data to better analyze distributor needs and retail activity, as well as distributor inventory levels returning to historical averages.

About Miller Industries NYSE: MLR

Miller Industries, Inc is a leading designer, engineer and manufacturer of towing and recovery vehicles and related equipment. The company's product portfolio includes light-, medium- and heavy-duty tow trucks, integrated carriers, rotators, wreckers, trailers and associated hydraulic and electronic components. These products are marketed under well-known brand names, including Miller, Century, Holmes, Vulcan, Chevron and Jige International, serving a broad spectrum of customers in the towing, recovery, roadside assistance and vehicle transport industries.

Headquartered in Ooltewah, Tennessee, Miller Industries was founded in the early 1990s and has grown into a global supplier of towing and recovery solutions.

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