Miller Industries Reports 2004 Second Quarter Earnings Results
CHATTANOOGA, Tenn., Aug. 10, 2004 -- Miller Industries, Inc. today announced financial results for the second quarter of 2004, which ended June 30, 2004.
For the second quarter of 2004, net sales from continuing operations were $59.6 million, compared with $58.0 million in the second quarter of 2003. Sales within the Company's towing and recovery equipment segment increased 17% to $59.6 million from $51.2 million in the year ago period. Second quarter 2004 income from continuing operations(1) was $2.1 million, or $0.19 per diluted share, compared with income from continuing operations in the second quarter of 2003 of $1.6 million, or $0.18 per diluted share. The Company's diluted shares outstanding increased 17% over the year ago period as a result of the completion of the exchange of certain of its subordinated debt and warrants for shares of its common stock in the first quarter of 2004, and the sale of 480,000 shares of common stock in a private placement, as previously announced.
Miller Industries reported net income for the 2004 second quarter of $1.8 million, or $0.16 per diluted share, which included a loss of $(322,000), or $(0.03) per diluted share, after-tax, from discontinued operations. This compares to a net loss for the 2003 second quarter of $(493,000), or $(0.05) per diluted share, which included a loss from discontinued operations of $(2.1) million, or $(0.23) per diluted share.
Costs of operations in the second quarter of 2004 were $51.0 million, compared to $49.4 million in the year ago period. For the second quarter of 2004, selling, general and administrative expenses were $5.4 million, versus $4.6 million in the prior year period, reflecting higher expenses related to increased sales and higher than normal professional fees in the quarter.
Gross margin within the towing and recovery equipment segment improved to 14.6% of sales from 13.5% a year ago, reflecting better fixed cost absorption due to increased production levels.
Total interest expense for the Company's continuing and discontinued operations in the second quarter of 2004 was $1.4 million, compared to $1.8 million in the year ago second quarter. Debt continued to decline in the second quarter due in large part to the retirement of approximately $5.4 million of subordinated debt with the proceeds from the sale of common stock, as previously announced. Total Senior and Junior debt at June 30, 2004 was $28.8 million, down from $31.8 million at March 31, 2004, and $40.6 million at December 31, 2003.
For the six-month period ended June 30, 2004, net sales from continuing operations were $105.8 million versus $105.9 million during the prior year period. During the first half of 2004 the Company reported income from continuing operations(1) of $3.2 million, or $0.29 per diluted share, compared to income from continuing operations of $3.4 million, or $0.36 per diluted share, a year ago. Including a loss from discontinued operations of $(809,000), or $(0.07) per diluted share, the Company reported net income for the first half of 2004 of $2.4 million, or $0.22 per diluted share. Including a loss from discontinued operations of $(4.4) million, or $(0.47) per diluted share, the Company reported a net loss for the 2003 six-month period of $(1.1) million, or $(0.11) per diluted share. As explained above, the Company's diluted shares outstanding increased by more than 17% over the year ago period as a result of the exchange of certain subordinated debt and warrants for shares of common stock, as well as the sale of additional shares of common stock during the first half of 2004.
"We are pleased with the results of the 2004 second quarter," stated Jeffrey I. Badgley, President and Co-CEO of Miller Industries. "While our results were affected by the continuation of some operational inefficiencies associated with the increased production levels, as well as higher than normal professional fees during the quarter, a 17% increase in sales allowed us to generate higher gross margins and a significant improvement in net income and cash flow."
Mr. Badgley concluded, "Although we recognize that challenges remain, we are pleased with the momentum of our business and are encouraged by the results of the first six months of 2004. We are optimistic that the positive trends that we began to experience in the first quarter will continue. As we head into a typically stronger selling season for our products, we remain focused on balancing costs in relation to demand and operating profitably."
Miller Industries is the world's largest manufacturer of towing and recovery equipment. The Company markets its towing and recovery equipment under a number of well-recognized brands, including Century, Vulcan, Chevron, Holmes, Challenger, Champion and Eagle.
Miller Industries, Inc. and Subsidiaries
Condensed Consolidated Statements of Income
(In thousands except per share data)
Three Months Ended Six Months Ended
June 30, June 30,
% %
2004 2003 Change 2004 2003 Change
NET SALES
TOWING AND RECOVERY
EQUIPMENT $59,648 $51,161 17% $105,807 $91,903 15%
TOWING SERVICES 0 6,801 -100% 0 13,952 -100%
59,648 57,962 3% 105,807 105,855 0%
COSTS AND EXPENSES:
COSTS OF OPERATIONS
TOWING AND RECOVERY
EQUIPMENT 50,952 44,234 15% 90,323 79,050 14%
TOWING SERVICES 0 5,188 -100% 0 10,618 -100%
50,952 49,422 3% 90,523 89,668 1%
SELLING, GENERAL AND
ADMINISTRATIVE
EXPENSES 5,369 4,641 16% 9,828 8,978 9%
LOSS ON DISPOSITION 0 682 100% 0 682 100%
INTEREST EXPENSE, NET 1,234 685 80% 2,278 1,439 58%
TOTAL COSTS
AND EXPENSES 57,555 55,430 4% 102,429 100,767 2%
INCOME (LOSS) BEFORE
INCOME TAXES 2,093 2,532 -17% 3,378 5,088 -34%
INCOME TAX PROVISION 18 889 -98% 204 1,703 -88%
INCOME FROM CONTINUING
OPERATIONS(1) 2,075 1,643 26% 3,174 3,385 -6%
DISCONTINUED OPERATIONS:
LOSS FROM DISCONTINUED
OPERATIONS,
BEFORE TAXES (322) (3,035) -89% (809) (6,243) -87%
INCOME TAX PROVISION 0 (899) -100% 0 (1,805) -100%
LOSS FROM DISCONTINUED
OPERATIONS (322) (2,136) -85% (809) (4,438) -82%
NET (LOSS) INCOME $1,753 $(493) -456% $2,365 $(1,053) -325%
BASIC INCOME (LOSS)
PER COMMON SHARE:
INCOME FROM CONTINUING
OPERATIONS $0.19 $0.18 6% $0.29 $0.36 -19%
LOSS FROM DISCONTINUED
OPERATIONS $(0.03) $(0.23) 87% $(0.07) $(0.47) 85%
BASIC INCOME (LOSS) $0.16 $(0.05) 420% $0.22 $(0.11) 300%
DILUTED INCOME (LOSS)
PER COMMON SHARE:
INCOME FROM CONTINUING
OPERATIONS $0.19 $0.18 6% $0.29 $0.36 -19%
LOSS FROM DISCONTINUED
OPERATIONS $(0.03) $(0.23) 87% $(0.07) $(0.47) 85%
DILUTED INCOME (LOSS) $0.16 $(0.05) 420% $0.22 $(0.11) 300%
WEIGHTED AVERAGE SHARES
OUTSTANDING:
BASIC 10,883 9,341 17% 10,789 9,341 16%
DILUTED 10,909 9,346 17% 10,895 9,348 17%
(1) During the quarter ended December 31, 2002, the Company's management
and its board of directors made the decision to divest of its
remaining towing services segment, as well as the operations of the
distribution group of the towing and recovery equipment segment. As a
result, the statements of operations and related financial statement
disclosures for all prior years have been restated to present the
towing services segment and the distribution group as discontinued
operations separate from continuing operations. The discussions and
analyses above are of continuing operations, as restated, unless
otherwise noted. Results of discontinued operations reflect interest
expense for debt directly attributing to these businesses, as well as
an allocation of corporate debt based on intercompany balances. The
results of operations and loss on disposal associated with certain
towing services markets, which were sold in June 2003 have been
reclassified from discontinued operations to continuing operations
given the Company's significant continuing involvement in the
operations of the disposal components via a consulting agreement, and
the Company's ongoing interest in the cash flows of the operations of
the disposal components via a long-term license agreement.