Miller Industries Reports Fiscal 2000 First Quarter Results
14 September 1999
Miller Industries Reports Fiscal 2000 First Quarter Results
CHATTANOOGA, Tenn., Sept. 14 -- Miller Industries, Inc.
today announced results for its fiscal 2000 first quarter ended
July 31, 1999.
Net sales in the quarter increased 14% to a record $134.3 million compared
with $117.8 million in the first quarter of fiscal 1999. Operating income for
the first quarter of fiscal 2000 was $5.2 million, compared with operating
income of $6.7 million in the first quarter of fiscal 1999. For the fiscal
2000 first quarter, the Company reported net income of $1.4 million, or
$0.03 per basic and diluted share, compared with net income of $2.7 million,
or $0.06 per basic and diluted share, in the year ago period.
The higher sales are a product of 8.3% internal growth within Miller
Industries towing and recovery equipment segment, and growth at RoadOne(R) due
primarily to the inclusion of towing companies acquired subsequent to the
first quarter of fiscal 1999.
Operating margins of the Company's towing and recovery equipment segment
remained relatively level with those in the year ago period despite the
continuation from the fiscal 1999 fourth quarter of inefficiencies related to
the implementation of a new information and production management system in
the Company's Ooltewah facility. Within Miller Industries' RoadOne
operations, the Company benefited from the steps it has taken to reduce costs
and consolidate inefficient operations. As a result of these actions and an
increase in revenue, operating income at RoadOne improved to $744,000 in the
first quarter of fiscal 2000, from a loss of $3.4 million in the fourth
quarter of fiscal 1999.
The Company also announced that it intends to implement a restructuring of
certain of its RoadOne operations, which is expected to result in a charge of
up to $6 million to fiscal second quarter earnings. The details of the
restructuring are being finalized by management.
Selling, general and administrative expenses were $19.2 million versus
$17.0 million in the year ago period, but remained relatively constant as a
percentage of sales. Interest expense increased to $2.6 million versus
$2.0 million in the first quarter of fiscal 1999 due primarily to higher debt
levels used to finance RoadOne acquisitions made subsequent to the first
quarter of fiscal 1999. Interest expense decreased 22% versus the fiscal
1999 fourth quarter as a result of the repayment of debt with cash generated
from operations. Cash provided from operations was $7.9 million for the first
quarter of fiscal 2000, as compared to a negative $2.4 million in the same
quarter a year ago.
The Company also announced that its Board of Directors approved an
extension of the previously announced authorization to repurchase up to
2,000,000 shares of its common stock from time to time through March 10, 2000.
Any such purchases, if made, could be in the open market at prevailing prices
or in privately negotiated transactions. Some or all of such repurchased
shares may be issued as consideration in business acquisitions pursuant to the
Company's ongoing strategy of acquiring towing service companies. Any such
repurchases will only be made from time to time as allowed by applicable
securities laws and regulations.
Jeffrey I. Badgley, President and CEO of Miller Industries, commented,
"The first quarter saw significant progress within both our manufacturing and
RoadOne operations. During the quarter we also began to see contributions
from the new products we introduced in the latter part of last year. Demand
for these products has been strong, and we expect to continue to see high
order rates going forward. The prospects for the manufacturing business
remain strong. We continue to see significant demand in the marketplace, and
we remain focused on further improving throughout the remainder of the year on
the efficiency gains made in the latter part of the first quarter."
James A. McKinney, Chief Executive Officer of RoadOne, added "While these
results are encouraging, there is still room for improvement, as labor and
asset inefficiencies continue at unacceptably high levels. On September 1st,
we initiated our "One More Tow" program in an effort to drive revenue growth
through increased asset utilization to realize the operating leverage in our
business. We expect to see the benefits of this and other cost savings
programs we have instituted over the balance of this fiscal year."
Mr. McKinney continued, "The restructuring in the second quarter will
involve redundant personnel and facilities associated with acquired
businesses. We currently expect that it should result in annual savings of up
to $3 million."
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 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
July 31,
%
1999 1998 Change
NET SALES $134,336 $117,754 14%
COSTS AND EXPENSES:
COSTS OF OPERATIONS 109,914 94,040 17%
SELLING, GENERAL, AND 19,228 17,030 13%
ADMINISTRATIVE EXPENSES
INTEREST EXPENSE, NET 2,638 2,040 29%
TOTAL COSTS AND EXPENSES 131,780 113,110 17%
INCOME BEFORE INCOME TAXES 2,556 4,644 -45%
INCOME TAXES 1,112 1,960 -43%
NET INCOME $ 1,444 $ 2,684 -46%
NET INCOME PER COMMON SHARE:
BASIC $ 0.03 $ 0.06 -50%
DILUTED $ 0.03 $ 0.06 -50%
WEIGHTED AVERAGE SHARES OUTSTANDING:
BASIC 46,689 46,064 1%
DILUTED 47,290 47,195 0%
SUPPLEMENTAL SEGMENT DATA
(IN THOUSANDS)
Three Months Ended
July 31,
1999 1998
% of % of
Total Total
NET SALES:
TOWING & RECOVERY EQUIPMENT 82,951 62% 76,603 65%
TOWING SERVICES 51,385 38% 41,151 35%
$134,336 100% $117,754 100%
OPERATING INCOME:
TOWING & RECOVERY EQUIPMENT 4,450 86% 4,239 63%
TOWING SERVICES 744 14% 2,445 37%
$ 5,194 100% $ 6,684 100%