Miller Industries Reports Fiscal 1999 Second Quarter Results
9 December 1998
Miller Industries Reports Fiscal 1999 Second Quarter Results
CHATTANOOGA, Tenn., Dec. 9 -- Miller Industries, Inc.
today announced results for the fiscal 1999 second quarter and
first half ended October 31, 1998.
Net sales for the second quarter of fiscal 1999 increased 42% to
$134.1 million from $94.7 million in the second quarter of fiscal 1998.
Excluding a one-time, pre-tax restructuring charge of $4.1 million related to
the Company's closure of its Olive Branch, Mississippi facility and the
relocation of its Vulcan product line to its Ooltewah, Tennessee operation in
the second quarter of fiscal 1998, operating income rose 11% to $9.1 million
from $8.2 million in the year ago quarter. Net income for the quarter was
$4.0 million, or $0.09 per diluted share, compared with net income of
$2.3 million, or $0.05 per diluted share, in the same period last year.
Excluding the one-time, pre-tax restructuring charge, net income for the
fiscal 1998 second quarter was $4.8 million, or $0.11 per diluted share.
For the six-month period ended October 31, 1998, net sales were
$251.8 million, 40% higher than net sales of $180.1 million in the first six
months of fiscal 1998. Operating income increased 7% to $17.5 million
compared with $16.2 million in the same period last year excluding the
one-time, pre-tax restructuring charge. Net income for the first six months
of fiscal 1999 was $7.7 million, or $0.16 per diluted share, compared with
$7.1 million, or $0.15 per diluted share a year ago. Excluding the one-time,
pre-tax restructuring charge, net income for the fiscal 1998 six-month period
was $9.6 million, or $0.21 per diluted share.
The Company's strong sales growth resulted from increased revenues in its
towing and recovery equipment segment due primarily to strong market demand,
the acquisition of the Chevron product line in the third quarter of fiscal
1998, and the contribution from acquisitions and sales growth for operations
owned more than twelve months at RoadOne (TM), the Company's towing services
segment. The Company's operating margins for the quarter were 6.8%, slightly
lower than those reported in the fiscal first quarter due primarily to a
higher level of chassis sales in the period. Operating margins in the
Company's towing and recovery equipment segment continued to improve due
primarily to stronger contributions from its manufacturing, distribution and
finance divisions. This was offset by lower margins at RoadOne due primarily
to higher than expected field labor and operating costs as a percentage of
revenue. Interest expense rose in the fiscal second quarter as a result of an
increase in the use of cash in RoadOne's acquisition strategy and working
capital needs to support the sales growth in manufacturing and distribution,
including chassis inventory.
Separately, the Company announced that its RoadOne subsidiary acquired
seven towing service companies during the second quarter, and four additional
acquisitions subsequent to the end of the quarter, raising the total number of
companies acquired by RoadOne to 104. Total annualized revenues for the
acquisitions in the second quarter amounted to $6 million, and $4 million for
the acquisitions subsequent to the end of the quarter. RoadOne now has a
presence in 60 of the 209 top national markets and annualized revenues of over
$180 million. Additionally, the Company noted that membership in its
affiliate program has grown to approximately 1,440 professional towing
companies with over 10,000 vehicles in operation. This represents a
significant milestone in the growth of RoadOne's affiliate program.
Jeffrey I. Badgley, President and CEO of Miller Industries, commented, "We
are very pleased with the performance of our towing and recovery equipment
segment, which is due in large part to the strong teams we have in place in
our manufacturing, distribution and finance divisions. Revenues in the
segment for the second quarter were up over 30%, which included a strong
increase in our manufacturing division over and above the positive impact of
the Chevron addition. Through steps such as the Vulcan relocation we have
also improved the profitability of this segment. In addition, we have
implemented a price increase for our towing and recovery products that became
effective in November. We also broadened our product offerings with the
introduction of a hydraulic slide axle trailer used for the transportation of
heavy vehicles and equipment. Production of this product will begin in
January, and the initial demand has exceeded our expectations."
Adam L. Dunayer, President of RoadOne, added, "For the second quarter,
RoadOne continued its strong sales pace. However, field labor and other
operating costs rose as a percentage of sales during the period. In order to
address these costs, we are taking a more proactive approach to our best
practices strategy, and are focused on a higher utilization of labor and
equipment in each of our markets. We expect to see the results of these
efforts in the near future. Our national fleet account program is exceeding
our expectations, and demand in the marketplace for this service remains high.
We are currently working with several companies who are utilizing this
service. Through our ongoing acquisition program and growing affiliate
network, we continue to enhance our national network of towing service
operators. During the quarter we have added Columbus, GA; Syracuse, NY;
Concord, CA and Springfield, MA to our network of owned towing companies, and
increased our presence in Dallas, Atlanta, Chicago and San Diego. Our
acquisition pace has quickened since the end of the second quarter and we will
continue to increase our penetration of the nation's major markets."
Miller Industries is the world's leading integrated provider of vehicle
towing and recovery equipment and services. The Company markets its towing
services under the national brand name RoadOne(TM) and its towing and recovery
equipment under a number of well-recognized brands.
Except for historical information contained herein, the matters set forth
in this news release are forward-looking statements. The Company noted that
forward looking statements set forth above involve a number of risks and
uncertainties that could cause actual results to differ materially from any
such statement, including the risks and uncertainties discussed under the
caption "Risk Factors" in the Company's Form 10-K for fiscal 1998, which
discussion is incorporated herein by this reference.
Miller Industries, Inc. and Subsidiaries
Condensed Consolidated Statements of Income
(In thousands except per share data)
Three Months Ended Six Months Ended
October 31, October 31,
% %
1998 1997 Change 1998 1997 Change
NET SALES $134,055 $ 94,727 42% $251,809 $180,080 40%
COSTS AND EXPENSES:
COSTS OF OPERATIONS 107,153 76,221 41% 199,465 143,450 39%
SELLING, GENERAL, AND 17,820 10,269 74% 34,850 20,469 70%
ADMINISTRATIVE EXPENSES
RESTRUCTURING COSTS 0 4,100 n/m 0 4,100 n/m
INTEREST EXPENSE, NET 2,228 429 419% 4,268 700 510%
TOTAL COSTS AND EXPENSES 127,201 91,019 40% 238,583 168,719 41%
INCOME BEFORE INCOME TAXES 6,854 3,708 85% 13,226 11,361 16%
INCOME TAXES 2,812 1,410 99% 5,488 4,265 29%
NET INCOME $ 4,042 $ 2,298 76% $ 7,738 $ 7,096 9%
NET INCOME PER COMMON SHARE:
BASIC $ 0.09 $ 0.05 80% $ 0.17 $ 0.16 6%
DILUTED $ 0.09 $ 0.05 80% $ 0.16 $ 0.15 7%
WEIGHTED AVERAGE SHARES
OUTSTANDING:
BASIC 46,518 44,072 6% 46,291 44,001 5%
DILUTED 47,323 45,868 3% 47,283 45,988 3%
SUPPLEMENTAL SEGMENT DATA
(IN THOUSANDS)
Three Months Ended
October 31,
% of % of
1998 Total 1997 Total
REVENUE:
TOWING AND RECOVERY EQUIPMENT 88,190 66% 67,242 71%
TOWING SERVICES 45,865 34% 27,485 29%
$134,055 100% $ 94,727 100%
OPERATING INCOME(1):
TOWING AND RECOVERY EQUIPMENT 7,686 85% 1,676 41%
TOWING SERVICES 1,396 15% 2,461 60%
$ 9,082 100% $ 4,137 100%
Six Months Ended
October 31,
% of % of
1998 Total 1997 Total
REVENUE:
TOWING AND RECOVERY EQUIPMENT 164,793 65% 131,348 73%
TOWING SERVICES 87,016 35% 48,732 27%
$251,809 100% $180,080 100%
OPERATING INCOME(1):
TOWING AND RECOVERY EQUIPMENT 13,648 78% 7,762 64%
TOWING SERVICES 3,846 22% 4,299 36%
$ 17,494 100% $ 12,061 100%
(1) Includes a one-time, pre-tax restructuring charge of $4.1 million in
the fiscal 1998 second quarter and six-month periods.