Miller Industries Inc (MLR) 2023 Q2 法說會逐字稿

Good day, ladies and gentlemen, and welcome to Miller Industries Second Quarter 2023 Results Conference Call. Please note this event is being recorded. And now at this time, I would like to turn the call over to Mike Gaudreau at FTI Consulting. Please go ahead, sir.

女士們、先生們，美好的一天，歡迎參加米勒工業 2023 年第二季度業績電話會議。請注意此事件正在被記錄。現在這個時候，我想把電話轉給 FTI Consulting 的 Mike Gaudreau。請繼續，先生。

Thank you, and good morning, everyone. I would like to welcome you to the Miller Industries conference call. We are here to discuss the company's 2023 second quarter results, which were released yesterday.

謝謝大家，大家早上好。歡迎您參加米勒工業公司的電話會議。我們在這裡討論該公司昨天發布的 2023 年第二季度業績。

With us from the management team today are Bill Miller, Chairman of the Board; Will Miller, President and CEO; Debbie Whitmire, Executive Vice President and CFO; and Frank Madonia, Executive Vice President, Secretary and General Counsel.

今天與我們一起參加管理團隊的有董事會主席比爾·米勒 (Bill Miller)；威爾·米勒，總裁兼首席執行官； Debbie Whitmire，執行副總裁兼首席財務官；以及執行副總裁、秘書兼總法律顧問 Frank Madonia。

Today's call will begin with formal remarks from management, followed by a question-and-answer session. Please note in this morning's conference call, management may make forward-looking statements in accordance with the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.

今天的電話會議將以管理層的正式講話開始，然後是問答環節。請注意，在今天上午的電話會議中，管理層可能會根據 1995 年《私人證券訴訟改革法案》的安全港條款做出前瞻性陳述。

I'd like to call your attention to the risks related to these statements, which are more fully described in the company's annual report filed on Form 10-K and other filings with the Securities and Exchange Commission. At this time, I'd like to turn the call over to Will. Please go ahead, Will.

我想提請您注意與這些聲明相關的風險，這些風險在公司向美國證券交易委員會提交的 10-K 表格年度報告和其他文件中進行了更全面的描述。這時，我想把電話轉給威爾。請繼續，威爾。

Thank you, and good morning, everyone. We are very pleased to report another solid quarter, which demonstrates that our use of capital to reinvest in our facilities over the past decade in connection with our strategic initiatives we've undertaken over the past several quarters are continuing to pay off.

謝謝大家，大家早上好。我們非常高興地報告又一個穩健的季度，這表明我們在過去十年中利用資本對我們的設施進行再投資，以及我們在過去幾個季度採取的戰略舉措正在繼續獲得回報。

This is a testament to our commitment to our shareholders as well as our efforts to invest in our workforce during the pandemic. We generated record revenue of $300.3 million, increasing 49% year-over-year due to improved supply chain resilience and increased productivity.

這證明了我們對股東的承諾以及我們在大流行期間投資於員工隊伍的努力。由於供應鏈彈性的改善和生產力的提高，我們創造了創紀錄的 3.003 億美元收入，同比增長 49%。

Gross profit for the second quarter was $39.9 million, an increase of 117.3% compared to the prior year quarter while our gross margin of 13.3% improved 420 basis points year-over-year and 250 basis points sequentially. We are seeing continued benefits from the productivity initiatives and pricing adjustments to offset inflationary pressures and are optimistic about what this means for our profitability moving forward.

第二季度毛利潤為 3990 萬美元，比去年同期增長 117.3%，毛利率為 13.3%，同比提高 420 個基點，環比提高 250 個基點。我們看到生產力計劃和定價調整的持續好處，以抵消通脹壓力，並對這對我們未來的盈利能力意味著什麼持樂觀態度。

To give a bit more context to maximize production output after facing the challenges created by the pandemic, we have been focused on vertical integration to minimize production disruptions. This was a large driver behind our decision to acquire Southern Hydraulic Cylinder in May. The sourcing flexibility this acquisition provides us will continue to improve execution on our delivery of finished goods and consolidate lead times, particularly since hydraulic component availability has recently constrained our ability to maximize production. And historically, custom cylinders have longer than normal lead times.

為了在面對大流行帶來的挑戰後提供更多背景信息，以最大限度地提高產量，我們一直專注於垂直整合，以盡量減少生產中斷。這是我們決定在五月份收購南方液壓缸的一個重要推動因素。此次收購為我們提供的採購靈活性將繼續提高成品交付的執行力並鞏固交貨時間，特別是因為液壓元件的可用性最近限制了我們最大化生產的能力。從歷史上看，定制氣缸的交貨時間比正常的要長。

We are experiencing continued strong demand for our products in all of our end markets and have had no significant customer cancellations in 2023 so far. We've improved our ability to deliver finished goods through our productivity enhancements and supply chain dynamics mentioned earlier. But even despite our ability to ship product, our backlog remains elevated and near record levels.

我們的所有終端市場對我們的產品的需求持續強勁，並且 2023 年到目前為止沒有出現重大客戶取消訂單。通過前面提到的生產力提高和供應鏈動態，我們提高了交付成品的能力。但儘管我們有能力運送產品，我們的積壓訂單仍然很高，並接近歷史最高水平。

As a result of our strong financial results and our elevated backlog, we continue to believe it is prudent to increase our inventory levels to service the demand. However, we'd expect inventories to grow at a slower rate than in the prior year. In our International business, which makes up approximately 10% of our sales, we are encouraged by the strong demand levels we continue to see.

由於我們強勁的財務業績和增加的積壓，我們仍然認為增加庫存水平以滿足需求是謹慎的做法。然而，我們預計庫存增長速度將低於去年。我們的國際業務約占我們銷售額的 10%，我們對持續看到的強勁需求水平感到鼓舞。

During the second quarter, we experienced improvement in our margins as we finalize the invoicing of orders in our backlog that have not been offered protected pricing. Lastly, before I turn the call over to Debbie, I'd like to make a few comments regarding our workforce.

在第二季度，我們的利潤率有所改善，因為我們最終完成了積壓訂單中尚未提供保護定價的訂單的發票。最後，在將電話轉給黛比之前，我想就我們的員工隊伍發表一些評論。

As a reminder, last quarter, we announced changes to our executive compensation plan in order to mirror our peers and align executive compensation to company performance. As part of that exercise, we determined that some nonexecutive employees compensation needed to be modified and have made provisions for these adjustments.

提醒一下，上個季度，我們宣布了對高管薪酬計劃的更改，以反映我們的同行並使高管薪酬與公司業績保持一致。作為該工作的一部分，我們確定一些非執行員工的薪酬需要修改，並為這些調整做好了準備。

It has always been part of our company's culture that we treat our employees with the utmost respect and try our best to retain our incredibly skilled team. These changes will not only benefit their lives, but will benefit Miller Industries as well as their expertise is critical to our company's success.

我們以最大的尊重對待員工並儘力留住我們技術精湛的團隊，這一直是我們公司文化的一部分。這些變化不僅有利於他們的生活，也有利於米勒工業公司，他們的專業知識對我們公司的成功至關重要。

Now I'll turn the call over to Debbie, who will review the second quarter financial results in more detail. Following her remarks, I'll provide some closing comments and update on our outlook. Debbie?

現在我將把電話轉給黛比，她將更詳細地審查第二季度的財務業績。在她發表講話之後，我將提供一些總結評論以及我們的展望的最新情況。黛比？

Thanks, Will, and good morning, everyone. Net sales for the second quarter 2023 were $300.3 million versus $201.5 million for the second quarter of 2022, a 49% increase year-over-year, driven by increased shipments of finished goods and execution on our strong backlog.

謝謝威爾，大家早上好。 2023 年第二季度的淨銷售額為3.003 億美元，而2022 年第二季度的淨銷售額為2.015 億美元，同比增長49%，這得益於成品出貨量的增加和我們強大的積壓訂單的執行。

Cost of operations increased 42.2% to $260.3 million for the second quarter 2023 compared to $183.1 million for the second quarter of 2022. The increase in our cost of operations is due largely to our higher revenue levels and an increase in deliveries. Cost of operations as a percentage of net sales decreased approximately 42 -- 420 basis points from the prior year period to 86.7%.

2023 年第二季度的運營成本增加了 42.2%，達到 2.603 億美元，而 2022 年第二季度為 1.831 億美元。我們運營成本的增加主要是由於我們更高的收入水平和交付量的增加。運營成本占淨銷售額的百分比較上年同期下降約 42 - 420 個基點至 86.7%。

Gross profit was $39.9 million or 13.3% of net sales for the second quarter 2023 compared to $18.4 million or 9.1% of net sales for the prior year period. The year-over-year improvement was driven largely by our productivity improvements, Will mentioned earlier, a more reliable supply chain environment and further margin realization from price adjustments we implemented earlier this year.

2023 年第二季度毛利潤為 3,990 萬美元，占淨銷售額的 13.3%，而去年同期毛利潤為 1,840 萬美元，占淨銷售額的 9.1%。威爾之前提到，同比改善主要是由於我們生產力的提高、更可靠的供應鏈環境以及我們今年早些時候實施的價格調整進一步實現了利潤率。

We view our gross margins for 2023 as representative of what the business can achieve in a more normalized environment. That said, as we remind you every quarter, our gross margins are subject to quarter-to-quarter fluctuations based on product mix. SG&A expenses were $19.5 million in the second quarter 2023 compared to $12.7 million in the second quarter 2022.

我們認為 2023 年的毛利率代表了企業在更加正常化的環境中可以實現的目標。也就是說，正如我們每個季度提醒您的那樣，我們的毛利率會根據產品組合而受到季度波動的影響。 2023 年第二季度的銷售管理及行政費用為 1,950 萬美元，而 2022 年第二季度為 1,270 萬美元。

As a percentage of net sales, SG&A was 6.5%, 20 basis points higher than the prior year period. The increase is due largely to our new executive compensation plan as well as legal and consulting costs related to our refreshment of corporate governance and Investor Relations. As Will mentioned earlier, we have also provisioned for a new compensation structure for some nonexecutive employees that contributed to the increase.

SG&A 占淨銷售額的百分比為 6.5%，比上年同期高 20 個基點。這一增長主要是由於我們新的高管薪酬計劃以及與我們更新公司治理和投資者關係相關的法律和諮詢成本。正如威爾之前提到的，我們還為一些促成增長的非執行員工製定了新的薪酬結構。

Moving forward, we would expect quarterly SG&A expenses to be consistent with levels in the second quarter, assuming similar revenue and earnings performance. Interest expense for the second quarter 2023 was $1.7 million, up from $628,000 for the second quarter 2022 primarily related to an increase in our debt levels related to our acquisition of Southern Hydraulic Cylinder along with some increase related to our distributor floor plan financing costs, which shifts up and down with revenue.

展望未來，假設收入和盈利表現相似，我們預計季度銷售及管理費用將與第二季度的水平保持一致。 2023 年第二季度的利息支出為170 萬美元，高於2022 年第二季度的628,000 美元，主要與我們收購南方液壓缸相關的債務水平增加以及與我們的經銷商平面圖融資成本相關的一些增加有關。隨著收入的變化而上下變化。

Other income for the second quarter was $229,000 compared to an expense of $275,000 for the second quarter 2022, attributable largely to currency exchange rate fluctuations. Our effective tax rate for the quarter was 21.4% and slightly lower year-over-year primarily due to the benefit of various tax credits.

第二季度的其他收入為 229,000 美元，而 2022 年第二季度的支出為 275,000 美元，這主要歸因於貨幣匯率波動。我們本季度的有效稅率為 21.4%，同比略低，主要是由於各種稅收抵免的好處。

Net income for the second quarter 2023 was $14.9 million or $1.29 per diluted share compared to net income of $3.8 million or $0.33 per diluted share in the second quarter of 2022.

2023 年第二季度的淨利潤為 1,490 萬美元，即稀釋後每股收益 1.29 美元，而 2022 年第二季度淨利潤為 380 萬美元，即稀釋後每股收益 0.33 美元。

Turning to the balance sheet. Cash and cash equivalents as of June 30, 2023, was $30.5 million compared to $29.7 million as of March 31, 2023, and $40.2 million as of December 31, 2022. Accounts receivable as of June 30, 2023, was $264.5 million compared to $233.1 million as of March 31, 2023, and $177.7 million as of December 31, 2022.

轉向資產負債表。截至2023年6月30日的現金和現金等價物為3,050萬美元，截至2023年3月31日為2,970萬美元，截至2022年12月31日為4,020萬美元。截至2023年6月30日的應收賬款為2.645億美元，而截至2023年12月31日為2.33.1美元截至2023年3月31日為1.777億美元，截至2022年12月31日為1.777億美元。

Inventories were $167.5 million as of June 30, 2023, compared to $164.4 million as of March 31, 2023, and $153.7 million as of December 31, 2022. To provide a bit more context, we continue to increase inventory levels in the form of raw materials, finished goods and goods near completion, and we have taken a number of steps over the past year to improve stability and flexibility in our supply chain to maximize our deliveries given our elevated backlog.

截至2023 年6 月30 日，庫存為1.675 億美元，而截至2023 年3 月31 日，庫存為1.644 億美元；截至2022 年12 月31 日，庫存為1.537 億美元。為了提供更多背景信息，我們繼續以原材料形式增加庫存水平。材料、成品和即將完成的貨物，在過去的一年裡，我們採取了一系列措施來提高供應鏈的穩定性和靈活性，以最大限度地提高我們的交付量，因為我們的積壓量增加了。

We will continue to invest in our working capital as necessary to have critical parts available for us to turn inventory into finished goods and get product into the customers' hands as quickly as possible. Accounts payable as of June 30, 2023, was $188.9 million compared to $169.5 million as of March 31, 2023, and $125.5 million as of December 31, 2022.

我們將繼續根據需要投資我們的營運資金，以獲得關鍵零件，以便我們將庫存轉化為成品，並儘快將產品送到客戶手中。截至2023年6月30日的應付賬款為1.889億美元，而截至2023年3月31日的應付賬款為1.695億美元，截至2022年12月31日的應付賬款為1.255億美元。

During the quarter, our outstanding balance on our $100 million revolving credit facility, increased to $60 million related primarily due to the acquisition of Southern Hydraulics Cylinder. As it relates to capital allocation, our focus over the past few years has been returning capital to shareholders through an industry-leading dividend and investing in 3 core areas of the business: Productivity improvements, capacity expansion and the health and safety of our employees.

本季度，我們 1 億美元循環信貸額度的未償餘額增加至 6,000 萬美元，這主要是由於收購了 SouthernHydraulics Cylinder。就資本配置而言，過去幾年我們的重點是通過行業領先的股息向股東返還資本，並投資於業務的三個核心領域：生產力提高、產能擴張以及員工的健康和安全。

We will continue to return capital to our shareholders in the form of our dividend and are always seeking out opportunities to invest in the company. However, our top priority, as it relates to capital allocation at the moment, will be reducing our debt balance. As we have always said, we are a debt-averse company, and yet we feel comfortable with our current debt level, as we believe that today, the best use of cash is investing in inventory to service our customers and reduce our debt.

我們將繼續以股息的形式向股東返還資本，並始終尋找投資公司的機會。然而，我們目前的首要任務是減少我們的債務餘額，因為這與資本配置有關。正如我們一直所說的，我們是一家規避債務的公司，但我們對當前的債務水平感到滿意，因為我們相信，今天現金的最佳用途是投資於庫存，以服務我們的客戶並減少我們的債務。

Lastly, the Board of Directors approved our quarterly cash dividend of $0.18 per share payable September 11, 2023, to shareholders of record at the close of business on September 1, 2023, marking the 51st consecutive quarter that the company has paid a dividend. Now I'll turn the call back over to Will for some closing remarks.

最後，董事會批准了我們將於 2023 年 9 月 11 日向 2023 年 9 月 1 日收盤時在冊的股東派發每股 0.18 美元的季度現金股息，這標誌著公司連續第 51 個季度支付股息。現在我將把電話轉回給威爾，讓他發表一些結束語。

Thank you, Debbie. Our second quarter results clearly demonstrate that the strategic steps we've taken in recent quarters are yielding positive results. Our improved product deliveries and enhanced production efficiency are now showing tangible benefits. We are encouraged by the significant increase in our year-over-year profitability and believe we will be able to sustain these pre-pandemic margins bearing any unforeseen circumstances.

謝謝你，黛比。我們第二季度的業績清楚地表明，我們最近幾個季度採取的戰略步驟正在產生積極的成果。我們改進的產品交付和提高的生產效率現已顯示出切實的效益。我們對同比盈利能力的大幅增長感到鼓舞，並相信無論發生任何不可預見的情況，我們都將能夠維持大流行前的利潤率。

These achievements instill us with strong confidence in our long-term potential. Building on the solid performance in the first half of 2023, we are confident in our ability to generate over $1 billion in annual revenue with significantly improved year-over-year profitability. As always, the entire management team and I would like to thank all of our employees, suppliers, customers and shareholders, their continued support of Miller Industries. At this time, we'd like to open the line for any questions.

這些成就使我們對自己的長期潛力充滿信心。基於 2023 年上半年的穩健業績，我們有信心創造超過 10 億美元的年收入，並且同比盈利能力顯著提高。與往常一樣，我和整個管理團隊要感謝我們所有的員工、供應商、客戶和股東，感謝他們對米勒工業的持續支持。此時，如果有任何問題，我們願意開通熱線。

(Operator Instructions) Our first question comes from Mike Shlisky with D.A. Davidson.

（操作員說明）我們的第一個問題來自 D.A. 的 Mike Shlisky。戴維森。

Just a couple of quick ones here. Could you maybe give us an update first on chassis supply for trucks for some of your products? How did that trend throughout the quarter? And maybe how it might look for the back half of the year? Maybe -- if you can maybe, in that commentary, delineate between some of the larger, heavier class [7, 8] trucks and maybe the class [5, 6] smaller models that you might be working with?

這裡只是一些快速的。您能否先向我們介紹一下您的某些產品的卡車底盤供應情況？整個季度的趨勢如何？也許今年下半年情況會如何？也許 - 如果您可以在評論中描述一些較大、較重的 [7, 8] 級卡車和您可能使用的 [5, 6] 級較小型號卡車？

Yes. chassis deliveries in the quarter were probably a little slower than expected. Certainly, the chassis OEMs have been dealing with similar supply chain issues that we are still to date. We have not been necessarily negatively impacted at production level at this point. We believe we have enough chassis on order. And based on our conversations with the OEMs should see appropriate deliveries through the end of the year to meet our customer demands.

是的。本季度的底盤交付量可能比預期稍慢一些。當然，底盤原始設備製造商一直在處理類似的供應鏈問題，而我們迄今為止仍然如此。目前我們的生產水平不一定受到負面影響。我們相信我們已經訂購了足夠的底盤。根據我們與原始設備製造商的對話，應該會在今年年底前實現適當的交付，以滿足我們的客戶需求。

Great, outstanding. I want to follow up also on some of the employee compensation changes that you made at the company recently. Definitely a hot topic out there in the industrial sector. Have you had any early feedback as to whether there's been any cultural change or any changes in employee behavior for those who were affected by it recently? Or do you feel like that might be still (inaudible) half of the year?

很棒，很出色。我還想跟進您最近在公司做出的一些員工薪酬變化。絕對是工業界的熱門話題。您是否有任何早期反饋，了解最近受其影響的人員是否有任何文化變革或員工行為發生任何變化？或者你覺得這可能仍然是（聽不清）半年嗎？

Mike, you cut out right there at the very beginning of the question. I can't -- I didn't hear the context, I apologize.

邁克，你在問題一開始就中斷了。我不能——我沒有聽到上下文，我很抱歉。

I apologize. I was just asking about the employee compensation changes that were made recently among the various employees. I was curious if that had -- it had an impact on the culture in the office and on the shop floor recently? Or is it too early to tell if the changes you made to compensation are going to make any changes in the everyday operation?

我道歉。我只是詢問最近各員工之間的員工薪酬變化。我很好奇這是否對最近辦公室和車間的文化產生了影響？或者現在判斷你對薪酬所做的改變是否會對日常運營產生任何改變還為時過早？

No, I think everything that we've done to date and what we're looking to do in the future will only be beneficial to our employees and how they view the company. We always take great pride in all of our hourly employees, management employees and I don't believe that we've seen any negative impacts at this point from any of the compensation changes.

不，我認為我們迄今為止所做的一切以及我們未來要做的事情只會對我們的員工以及他們對公司的看法有利。我們始終為所有小時工、管理人員感到非常自豪，我認為目前我們還沒有看到任何薪酬變化帶來任何負面影響。

Actually, I was going to ask about positive impact. Have you seen any changes around how people...

事實上，我想問的是積極影響。您是否看到人們的方式發生了任何變化...

Yes, we have -- I believe that, overall, employee morale at our facilities is positive at this time. Just last quarter -- every time we hit a record quarter, we actually provide a luncheon for all of our employees, which goes over very well. So they get a little extra time off of work. We do a luncheon where the executive staff feeds lunch to all of the hourly employees and management employees. That goes over very well. We also just finished our annual picnic for both our facilities in Tennessee and Pennsylvania. So we -- sorry, all 3 facilities now in Tennessee. And to date, we believe that we have very positive morale in all of our facilities.

是的，我們——我相信，總體而言，目前我們工廠的員工士氣是積極的。就在上個季度，每當我們達到創紀錄的季度時，我們實際上都會為所有員工提供午餐，效果非常好。所以他們可以得到一些額外的休息時間。我們舉辦午餐會，行政人員為所有小時工和管理人員提供午餐。一切進展順利。我們還剛剛結束了田納西州和賓夕法尼亞州工廠的年度野餐活動。所以我們——抱歉，所有 3 個設施現在都在田納西州。迄今為止，我們相信我們所有設施都擁有非常積極的士氣。

Outstanding. Maybe one last one for me, and that is on the M&A deal to acquire Southern Hydraulic. Anything surprised you once you got the key to the building as to how that company operates and changes that have been made. And I'm curious, do you -- could you tell us if the company sales to outside customers besides just Miller Industries? And will you continue to sell those at customers? Or make them more of an in-house hydraulic provider?

傑出的。也許對我來說最後一件事就是收購南方液壓的併購交易。一旦你拿到了大樓的鑰匙，關於該公司的運作方式和所發生的變化，任何事情都會讓你感到驚訝。我很好奇，你能告訴我們公司是否向米勒工業公司以外的外部客戶銷售產品嗎？您會繼續向客戶出售這些產品嗎？或者讓他們更像一個內部液壓提供商？

So, no unanticipated or unknown issues at this time. Everything has gone very smoothly through the inventory audits and things of that nature. We have already made IT adjustments to upgrade security and things of that nature at the facility to get up to our standards, but no major issues. With regards to other customers, they do sell to outside suppliers -- to outside customers other than Miller Industries, and we are evaluating the customer list at this time and working on moving those orders into the new order bank. But we've had no cancellations from current customers either.

因此，目前沒有意外或未知的問題。通過庫存審計和類似性質的事情，一切都非常順利。我們已經進行了 IT 調整，以升級設施的安全性和類似性質的東西，以達到我們的標準，但沒有出現重大問題。至於其他客戶，他們確實向外部供應商銷售——除了米勒工業公司以外的外部客戶，我們目前正在評估客戶名單，並努力將這些訂單轉移到新的訂單庫中。但目前的客戶也沒有取消我們的訂單。

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

目前沒有其他問題。我現在想把發言權交還給威爾·米勒（Will Miller）以發表結束評論。

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 would like information on how to participate and ask questions on the call, please visit our updated Investor Relations website at millerind.com/investors or e-mail, investors.relations@millerind.com. Thank you all, and God Bless.

謝謝。我想再次感謝大家今天加入我們的電話會議，我們期待在第三季度的電話會議上與你們交談。如果您想了解如何參與電話會議並提出問題，請訪問我們最新的投資者關係網站 millerind.com/investors 或發送電子郵件至 Investors.relations@millerind.com。謝謝大家，願上帝保佑。

This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation.

今天的會議到此結束。此時您可以斷開線路。感謝您的參與。