Miller Industries Reports Fiscal 1999 Third Quarter Results
11 March 1999
Miller Industries Reports Fiscal 1999 Third Quarter Results
CHATTANOOGA, Tenn., March 11 -- Miller Industries, Inc.
today announced results for the fiscal 1999 third quarter and
nine-month period ended January 31, 1999.
In the fiscal 1999 third quarter, net sales were $132.6 million compared
with $105.2 million in the third quarter of fiscal 1998. Operating income in
the third quarter of fiscal 1999 increased 29% to $6.5 million compared with
operating income of $5.1 million in the same period a year ago. Fiscal 1999
third quarter net income was $2.3 million, or $0.05 per diluted share,
compared with $2.4 million, or $0.05 per diluted share, in the year ago
quarter.
For the fiscal 1999 nine-month period, net sales were $384.4 million
versus $285.3 million in the first nine months of fiscal 1998. Operating
income for the first nine months of fiscal 1999 was $24.0 million, an increase
of 40% over $17.1 million a year ago. Net income for the fiscal 1999 nine-
month period was $10.0 million, or $0.21 per diluted share, versus
$9.5 million, or $0.21 per diluted share, in the same period last year. The
Company's fiscal 1998 nine-month results include a one-time, pre-tax
restructuring charge of $4.1 million related to the closure of the Company's
Olive Branch, Mississippi facility and the relocation of its Vulcan product
line to its Ooltewah, Tennessee operation, as previously announced. Excluding
this charge, operating income and net income for the fiscal 1998 nine-month
period were $21.2 million and $12.0 million respectively, or $0.26 per diluted
share.
The Company's third quarter results reflect increased revenues and
operating profits resulting primarily from continued strong demand for the
Company's towing and recovery equipment, as well as increased revenue
contributions from RoadOne(R), the Company's towing services segment,
reflecting sales growth from acquisitions and from operations owned for more
than twelve months. Offsetting these factors were continued high field labor
and operating costs at RoadOne and mild weather conditions. Interest expense
in the fiscal third quarter increased primarily as a result of cash used in
RoadOne's acquisition program.
Jeffrey I. Badgley, President and CEO of Miller Industries, commented,
"Our towing and recovery equipment segment continued its strong performance in
the third quarter of fiscal 1999. Ongoing strong demand for our towing and
recovery products resulted in internal revenue growth of 20% within our
manufacturing operations, surpassing our expectations. The segment also
benefited from revenue growth within our financing and distribution
operations.
Mr. Badgley continued, "Going forward, we will continue to take advantage
of the cost savings opportunities we have created through the closure of our
Olive Branch facility and the consolidation of the Vulcan product line. We
recently completed a 45,000 square foot addition to our Ooltewah facility,
which should enhance revenues and reduce costs by improving product flow and
reducing inventory levels. Our future results should also benefit from
marketing programs for two new products recently introduced, the hydraulic
slide axle trailer and the seven-car trailer. To date, demand for these
products has been strong, with order backlogs well in excess of production
capacity."
Adam L. Dunayer, President of RoadOne, added, "While RoadOne's revenues
continued their growth during the quarter as a result of the acquisitions we
have made and increased revenues from our existing operations, the mild
weather conditions, combined with the seasonal effect of the holidays on the
commercial trucking market, impacted additional revenue growth during the
quarter. Also, despite significant reductions, certain costs within RoadOne's
operating companies remained unacceptably high. We remain committed to
consolidating operations within our multi-company markets, as well as
continuing to focus on controlling excess costs in all of our markets. During
the third quarter, we initiated a program designed to reduce overall operating
costs at RoadOne by approximately $500,000 per month, or $6 million annually.
At this point, we believe we are halfway towards achieving this goal, the
effects of which should begin to be felt during the fourth quarter. We have
slowed our acquisition pace to focus on both operational issues and our
national accounts program."
Mr. Dunayer continued, "We continue to be pleased with the results of our
national accounts program, and expect demand to continue to grow as we have
enhanced our selling efforts and introduced an advertising and marketing
campaign focused on capitalizing on our national brand image utilizing
1-800-ROADONE for our heavy truck customers and commercial fleet accounts.
The early indications are that our current customers are enjoying better
response times and a higher value-added service. Since its inception in
November of 1998, the program has generated over 2,000 towing and recovery
calls for our owned and affiliated companies."
The Company further announced that during the fiscal third quarter its
RoadOne subsidiary acquired six additional towing service companies with total
annualized revenues of $8 million. These acquisitions expand and enhance
RoadOne's operations in the Southwest, Southeast and Northeast, including
Dallas, Texas; Atlanta, Georgia; and Long Island, New York. Inclusive of
these acquisitions, RoadOne has purchased 106 towing service companies and has
annualized revenues of approximately $200 million, with a presence in 60 of
the 209 top national markets. The Company also indicated that its affiliate
program has grown to include over 1,700 members with over 11,500 vehicles in
operation.
The Company noted that it is continuing to explore various strategic and
financial alternatives and that Goldman, Sachs & Co. continues to act as the
company's financial advisor in that process.
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(R) 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 Nine Months Ended
January 31, January 31,
% %
1999 1998 Change 1999 1998 Change
NET SALES $132,629 $105,220 26% $384,438 $285,300 35%
COSTS AND
EXPENSES:
COSTS OF
OPERATIONS 107,375 86,777 24% 306,839 230,237 33%
SELLING, GENERAL,
AND ADMINISTRATIVE
EXPENSES 18,705 13,362 40% 53,556 33,842 58%
RESTRUCTURING COSTS 0 0 n/m 0 4,100 n/m
INTEREST EXPENSE,
NET 2,734 970 182% 7,003 1,670 319%
TOTAL COSTS AND
EXPENSES 128,814 101,109 27% 367,398 269,849 36%
INCOME BEFORE
INCOME TAXES 3,815 4,111 -7% 17,040 15,451 10%
INCOME TAXES 1,564 1,720 -9% 7,052 5,985 18%
NET INCOME $2,251 $2,391 -6% $9,988 $9,466 6%
NET INCOME
PER SHARE:
BASIC $0.05 $0.05 --- $0.22 $0.21 5%
DILUTED $0.05 $0.05 --- $0.21 $0.21 ---
WEIGHTED AVERAGE
SHARES OUTSTANDING:
BASIC 46,229 44,873 3% 46,354 44,208 5%
DILUTED 47,075 46,285 2% 47,317 46,008 3%
SUPPLEMENTAL SEGMENT DATA
(IN THOUSANDS)
Three Months Ended
January 31,
% of % of
1999 Total 1998 Total
NET SALES:
TOWING AND RECOVERY EQIUPMENT 85,147 64% 75,497 72%
TOWING SERVICES 47,482 36% 29,723 28%
$132,629 100% $105,220 100%
OPERATING INCOME:
TOWING AND RECOVERY EQUIPMENT 6,537 100% 5,395 106%
TOWING SERVICES 12 0% (314) -6%
$ 6,549 100% $ 5,081 100%
Nine Months Ended
January 31,
% of % of
1999 Total 1998 Total
NET SALES:
TOWING AND RECOVERY EQUIPMENT 249,941 65% 206,845 73%
TOWING SERVICES 134,497 35% 78,455 27%
$384,438 100% $285,300 100%
OPERATING INCOME(1):
TOWING AND RECOVERY EQUIPMENT 20,185 84% 13,136 77%
TOWING SERVICES 3,858 16% 3,985 23%
$ 24,043 100% $ 17,121 100%
(1) Includes a one-time, pre-tax restructuring charge of $4.1 million in
the fiscal 1998 nine-month period.