Q1 2025 Miller Industries Inc Earnings Call
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Speaker Change: Good day, ladies and gentlemen, and welcome to the Miller Industries' first quarter 2025 results Conference call. Please note. This event is being recorded and now at this time I would now like to turn the call over to my good drove at MTI consulting. Please go ahead Sir.
Operator: Good day, ladies and gentlemen, and welcome to the Miller Industries first quarter 2025 results conference call. Please note this event is being recorded.
Michael Gaudreau: And now, at this time, I would now like to turn the call over to Mike Gaudreau at FDI Consulting. Please go ahead, sir. Thank you and good morning everyone.
Speaker Change: Thank you and good morning, everyone.
Michael Gaudreau: I would like to welcome you to the Miller Industries conference call. We are here to discuss the company's 2025 first quarter results which were released after the close of the market yesterday. 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.
Speaker Change: I would like to welcome you to the Miller Industries Conference call.
Speaker Change: We're here to discuss the company's 2025 first quarter results, which were released after the close of the market yesterday.
Speaker Change: 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.
Michael Gaudreau: 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. 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 Exchanges.
Speaker Change: Today's call will begin with formal remarks from management, followed by question and answer session.
Speaker Change: 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, I would 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.
Speaker Change: <unk> 10-K, and other filings with the Securities and Exchange Commission.
William Miller: At this time, I'd like to turn the call over to Will. Please go ahead, Will. Good morning, everyone, and thank you for joining us today. Miller Industries is the world's largest manufacturer of towing and recovery equipment. Our product lines span light, medium, and heavy duty recovery vehicles, car carriers, military recovery solutions, and more. with 10 manufacturing facilities across the United States, France, and the UK. We are uniquely positioned to serve our global customer base. Our long-standing leadership in the industry is built on a foundation of exceptional people, best-in-class products, and the strongest distribution network in the towing and recovery market.
Will: At this time I'd like to turn the call over to will.
Will: Please go ahead well.
Will: Good morning, everyone and thank you for joining us today.
Will: Miller industries is the world's largest manufacturer of talking and recovery equipment, our product line spam light medium and heavy duty recovery vehicles car carriers military recovery solutions and more.
Will: With 10 manufacturing facilities across the United States, France, and the U K, we are uniquely positioned to serve our global customer base.
Will: Our longstanding leadership in the industry is built on a foundation of exceptional people best in class products, and the strongest distribution network and the towing and recovery market.
William Miller: Moving to our first quarter performance, despite macroeconomic uncertainty, we are pleased with the results that align with our expectations. We continue to execute on our strategy of returning to a normalized channel flow, which will position us for growth in the future. We have used this period as an opportunity to reduce field inventory and product lead time. streamline operations, evaluate our supply chain, and return capital to shareholders.
Will: Moving to our first quarter performance despite macro economic uncertainty we are pleased with the results that align with our expectations.
Will: We continue to execute on our strategy of returning to a normalized channel flow, which will position us for growth in the future.
Will: We have used this period as an opportunity to reduce field inventory and product lead times.
Will: Streamline operations evaluate evaluate our supply chain and return capital to shareholders now.
Deborah Whitmire: Now I'll turn the call over to Debbie to walk through the quarter in more detail, and I'll return later to speak on our outlook, regulatory developments, and capital allocation. Thanks, Will, and good morning, everyone. For the first quarter of 2025, net sales were $225.7 million compared to $349.9 million in the same quarter last year, a decline of 35.5 percent. This was largely driven by chassis shipment patterns normalizing after prior irregular deliveries of OEMs as they emerged from supply chain disruption. Gross profit for the first quarter was $33.9 million, or 15% of net sales, compared to $44.2 million, or 12.6% of net sales, for the same period in 2024.
Will: Now I'll turn the call over to Debbie to walk through the quarter in more detail and I'll return later to speak on our outlook regulatory developments and capital allocation.
Debbie: Thanks, Lynn and good morning, everyone.
Debbie: For the first quarter of 2025, net sales were $225 $7 million compared to $349 9 million in the same quarter last year, a decline of 35, 5%.
Debbie: This was largely driven by chassis shipment patterns normalizing after prior irregular deliveries of Oems as they emerge from supply chain disruptions.
Debbie: Gross profit for the first quarter was $33 9 million or 15% of net sales compared to $44 2 million or 12, 6% of net sales for the same period in 2020 for the.
Deborah Whitmire: The margin improvement was due, in part, to product mix with a higher percentage of body deliveries relative to chassis shipments. As always, margins are sensitive to this mix, and this quarter it plays our advantage. Net income for the first quarter of 2025 was $8.1 million, or $0.69 per diluted share, compared to net income of $17 million, or $1.47 per diluted share in the prior year period. As Will alluded to, during the quarter, we returned $4.4 million to our shareholders, comprised of $2.1 million of share repurchases and the remaining balance of our industry-leading dividends.
Debbie: The margin improvement was due in part to product mix with a higher percentage of body deliveries relative to chassis shipments as.
Debbie: That's all right margins are sensitive to this makes in this quarter it plays to our advantage.
Debbie: Net income for the first quarter of 2025 with $8 1 million for 69 cents per diluted share compared to net income of $17 million or $1 47 per diluted share in the prior year period.
Debbie: As we alluded to during the quarter, we returned $4 $4 million to our shareholders comprised of $2 $1 million of share repurchases and the remaining balance of our industry leading dividend.
Deborah Whitmire: The board also recently approved a quarterly cash dividend of $0.20 per share, payable June 9, 2025, to shareholders of record at the close of business on June 2, 2025, the 58th consecutive quarter that the company has paid the dividend. Returning capital to our shareholders has always been a core part of our identity and will continue to be a key area of focus as we move forward. Shifting to the balance sheet, we have a cash balance of $27.4 million as of March 31, 2025, compared to $24.3 million as of December 31, 2024. During the quarter, we reduced accounts payable by nearly $33 million.
Debbie: <unk> also recently approved a quarterly cash dividend of <unk> 20 per share payable June nine 2025 to shareholders of record at the close of business on June <unk> 2025, the 58th consecutive quarter that the company has paid a dividend.
Debbie: Returning capital to our shareholders has always been a core part of our identity and we will continue to be a key area of focus as we move forward.
Debbie: Shifting to the balance sheet, we have a cash balance of $27 4 million as of March 31, 2025, compared to $24 3 million as of December 31, 2024.
Debbie: During the quarter, we reduced accounts payable by nearly $33 million.
Deborah Whitmire: We also improved collections on our accounts receivable, which declined by roughly $21 million compared to year-end. We expect our receivable to continue to convert into cash at a faster rate as inventory levels for both Miller Industries and our distributors normalize in the second half of 2025. Inventories were $164.9 million as of March 31, 2025, compared to $186.2 million as of December 31, 2024. We're seeing a gradual decline from inventory levels following the strategic investments we made in inventory throughout 2024 to meet the increased demand levels we witnessed. While inventories and working capital remain slightly elevated, the increased inventory levels have proved advantageous in the current environment, providing us with greater flexibility and reaction time as market conditions and tariff developments evolve.
Debbie: Also improved collections on our accounts receivable, which declined by roughly $21 million compared to year end.
Debbie: We expect our receivables to continue.
Debbie: To convert into cash at a faster rate as inventory levels for both Miller industries, and our distributors normalized in the second half of 2025.
Debbie: Inventories were $164 $9 million as of March 31, 2025, compared to $186 2 million as of December 31st 2024.
Debbie: We're seeing a gradual gradually decline from inventory levels. Following the strategic investments we made in inventory throughout 2024 to meet the increased demand levels we witnessed.
Debbie: Well the inventory and working capital remain slightly elevated the increased inventory levels have proved advantageous in the current environment, providing us with greater flexibility and reaction time as market conditions and tariff developments evolve.
Deborah Whitmire: That said, we're proud of the progress we have made to reduce our working capital thus far and will continue these efforts to improve free cash flow generation through the remainder of 2025. Our debt balance was $75 million as of the end of the first quarter, and while we feel comfortable about our current leverage position, we have historically been a debt-averse company. Reducing our debt levels will continue to be a key focus as cash conversion improves. As I stated before, our blended margin, comprised of chassis and unit margins, is correlated directly to our product mix. On slide 6, you'll see that we've illustrated this dynamic visually to provide a clearer explanation.
Debbie: That said we are proud of the progress we have made to reduce our working capital thus far and we'll continue the efforts to improve free cash flow generation through the remainder of 2025.
Debbie: Our debt balance was $75 million as of the end of the first quarter and while we feel comfortable that our current leverage position, we have historically been a debt averse company.
Debbie: Reducing our debt levels and continue to be a key focus is cash conversion improves.
Debbie: As I stated before our blended margin comprised of chassis and unit margins is correlated directly to our product mix on slide six you'll see that we've illustrated this dynamic visually chipper should provide a clearer explanation.
Deborah Whitmire: We explained last quarter how post-COVID supply chain disruptions led to increased volatility in chassis deliveries and therefore increased fluctuations in our margins. As you can see, this quarter gross margins remain relatively stable, even while chassis deliveries picked up slightly. Looking ahead, as chassis deliveries continue to increase, we would expect an inverse relationship with gross margins. I'd like to again reiterate that this is not a demand issue. Demand remains strong. The challenge has been inconsistent delivery from our suppliers, which have resulted in a strain on our distribution channel's ability to deliver finished units.
Debbie: We explained last quarter, how post COVID-19 supply chain disruptions led to increased volatility in chassis that will increase and therefore increased fluctuations in our margins.
Debbie: As you can see this quarter gross margins remained relatively stable, even while chassis deliveries picked up slightly looking ahead. This chassis deliveries continue to increase we would expect an inverse relationship with gross margins.
Debbie: I'd like to again reiterate that this is not a demand issue demand remains strong. The challenge has been inconsistent deliveries from our suppliers, which have resulted in a strain on our distribution channel's ability to deliver finished units.
William Miller: Now I'll turn the call back to Will to discuss some key considerations for 2025. Thank you, Debbie. I'd like to provide some insight into what we see moving forward.
Debbie: Now I'll turn the call back to will to discuss some key considerations for 2025.
Will: Thank you Debbie.
Will: I'd like to provide some insight into what we see moving forward.
Will: First the chassis situation our decision last year to hold deliveries allowed our distribution partners to begin to work through elevated inventory.
William Miller: First, the chassis situation. Our decision last year to hold deliveries allowed our distribution partners to begin to work through elevated inventory. This was a deliberate move that may have had impact near-term sales, but was critical to protecting the health of our channel. As a result, both body and chassis inventory levels are now approaching normal levels. I will get into more detail on this dynamic in the following slides.
Will: This was a deliberate move that May may have had impact near term sales, but was critical to protecting the health of our trial.
Will: As a result, both body and chassis inventory levels are now approaching normal levels I will get into more detail on this dynamic in the following slides.
William Miller: Second, global military demand remains robust. We're seeing continued RFQ activity from military vehicles, both domestically and internationally. This is a positive signal and one we are prepared to respond to.
Will: Second global military demand remains robust, we're seeing continued RF <unk> activity for military vehicles, both domestically and internationally. This is a positive signal and one we are prepared.
Will: Prepared to respond to.
William Miller: Third, while the tariff environment continues to evolve, we've taken proactive steps to ensure we remain well positioned, regardless of the outcome. We recently implemented a tariff surcharge on all new orders of manufactured product, as well as an additional price increase on all accessories and parts sales. We continue to diversify our supply chain where we can, including further reduction of our already minimal exposure in China. That said, many critical components used in our products are not available domestically and full on-shoring of our supply chain is not currently feasible for us or anyone else in our industry.
Will: Third while the tariff environment continues to evolve we've taken proactive steps to ensure we remain well positioned regardless of the outcome.
Will: We recently implemented a tariff surcharge on all new orders of manufactured product as well as an additional price increase on all accessories and parts sales.
Will: We continue to diversify our supply chain, where we can including further reduction of our already minimal exposure in China.
Will: That said many critical components used in our products are not available domestically.
Will: Full onshoring of our supply chain is not currently feasible for us or anyone else in our industry. However.
William Miller: However, we remain confident that the diversity and strength of our supply chain will allow us to navigate the uncertainty. We continue to actively monitor these developments and will adjust guidance accordingly as more clarity emerges.
Will: However, we remain confident that the diversity and strength of our supply chain will allow us to navigate the uncertainties.
Will: We continue to actively monitor these developments and we'll adjust guidance accordingly as more clarity emerges.
Will: Fourth.
William Miller: Fourth, what remains a point of uncertainty is the advanced clean truck regulation, which affects our ability to supply our existing products to customers in six large states. We are aware of the ongoing regulatory activity to revoke the ACT waiver that supports these regulations but we're planning as if no material changes will occur as a result of this activity.
Will: What remains a point of uncertainty is the advanced clean truck regulation, which affects our ability to supply our existing products to customers in six large states.
Will: We are aware of the ongoing regulatory activity to revoke the ACG waiver that supports these regulations, but we're planning as if no material changes will occur as a result of this activity.
William Miller: As I mentioned last quarter, we expect one of our major suppliers to begin delivering CARB-compliant chassis later this year, with broader availability in early 2026. This gives us confidence in our ability to meet customer needs over time, even with no change in the regulatory environment.
Will: As I mentioned last quarter, we expect one of our major suppliers to begin delivering carb compliant chassis later this year.
Will: With broader availability in early 2026.
Will: This gives us confidence in our ability to meet customer needs over time, even with no change in the regulatory environment.
Will: Lastly, despite.
William Miller: Lastly, despite some uncertainty, we feel very comfortable in our ability to improve free cash flow generation and will continue to prioritize returning capital to shareholders and paying down our debt balance with this cash flow.
Will: Despite some uncertainty we feel very comfortable in our ability to improve free cash flow generation and we will continue to prioritize returning capital to shareholders and paying down our debt balance with this cash flow.
Will: Slide eight gives an updated picture of the inventory activity activity in our distribution channel.
William Miller: Slide 8 gives an updated picture of the inventory activity in our distribution channel. We entered last year with constrained inventory, saw an influx of chassis in Q1, Q2, and Q3, and chose to slow down deliveries in Q4 to maintain a healthy distribution channel.
Will: We entered last year with constrained inventory saw an influx of chassis in Q1, Q2, and Q3 and chose to slow down deliveries in Q4 to maintain a healthy distribution channel.
William Miller: which is critical to our success. Now we're seeing inventory continue to decline, particularly chassis inventory, with both bodies and chassis moving towards optimal levels. This gives us the confidence that we will not only be able to collect receivables and convert cash in a more timely manner, but also accelerate sales in the second half of the year.
Will: Which is critical to our success now.
Will: Now, we're seeing inventory continued to decline, particularly chassis inventory with both bodies and chassis is moving towards optimal levels. This year.
Will: US the confidence that we will not only be able to collect receivables and convert cash in a more timely manner, but also accelerate sales in the second half of the year.
Will: Yeah.
William Miller: Moving on to the CARB and the Advanced Clean Truck Initiative, the situation remains dynamic, making it difficult for us to forecast if and when we may be able to resume normal operations and satisfy the continued buildup of demand we have from customers in these states.
Will: Moving onto the carb and the advanced clean truck initiative, the situation remains dynamic, making it difficult for us to forecast if and when we may be able to resume normal operations and satisfy the continued buildup of demand we have from customers in these states.
William Miller: However, there have been some notable updates. On April 14th, the Massachusetts DEP announced a delay in its ZEV requirement for chassis OEM. Additionally, the U.S.
Will: However, there have been some notable upticks on April 14th the Massachusetts, TEP announced a delay and it's zev requirement for chassis Oems.
Will: Additionally, the U S House of Representatives recently passed joint resolution 87.
William Miller: House of Representatives recently passed Joint Resolution 87, aiming to revoke the waiver that allows California and other states to enforce the ACT regulations. Additionally, the Senate has proposed Senate Bill 996 to amend the Clean Air Act. Regardless of the outcome, we are positioning the company to adapt. Our investments in lobbying, compliance, and product alignment will serve us well in a dynamic regulatory landscape. Our suppliers are also making efforts to become CARB compliant as early as the end of 2025. We continue to believe these regulations unnecessarily impact our downstream customers who face strong demand but lack access to compliant products.
Will: Aiming to revoke the waiver that allows California and other states to enforce the ACG regulation. Additionally.
Will: Additionally, the Senate has proposed Senate Bill 996 to amend the clean Air Act.
Will: Regardless of the outcome, we are positioning the company to adapt our investments in lobbying compliance and product alignment will serve us well in a dynamic regulatory landscape.
Will: Our suppliers are also making efforts to become carb compliant as early as the end of 2025.
Will: We continue to believe these regulations unnecessarily impact our downstream customers, who faced strong demand, but lack asset access to compliant products as.
William Miller: As car-compliant vehicles begin to roll out, we expect this pent-up demand to be normalized in 2026.
Will: As car compliant vehicles begin to rollout we expect this pent up demand to be normalized in 2026.
Will: Now shifting gears to capital allocation and our continued focus on our strategy and priorities.
William Miller: Now shifting gears to capital allocation and our continued focus on our strategy and priorities. In line with our long-standing business practices, we continue to prioritize returning capital to our shareholders. Our quarterly cash dividend of $0.20 per share increased by 5.3% compared to the prior year. Additionally, we repurchased $2.1 million of stock in the first quarter and still have $20 million remaining on our share repurchase program. Consistent with our company's longstanding practices, we will prioritize reducing our debt balance to maintain flexibility and be in a position to take advantage of future opportunities. And lastly, we continue to evaluate capacity expansion, both domestically and in Europe.
Will: In line with our long standing business practices, we continue to prioritize returning capital to our shareholders. Our quarterly cash dividend of <unk> 20 per share increased by five 3% compared to the prior year.
Will: Additionally, we repurchased $2 $1 million of stock in the first quarter and still have $20 million remaining on our share repurchase program.
Will: Consistent with our company's long standing practices, we will prioritize reducing our debt balance to maintain flexibility and be in a position to take advantage of future opportunities.
Will: And lastly, we continue to evaluate capacity expansion, both domestically and in Europe as mentioned earlier there is a strong activity in the military sector, which we are monitoring closely.
William Miller: As mentioned earlier, there is a strong activity in the military sector, which we are monitoring closely. As always, we will prioritize innovation, automation, and investing in our people, as it is what has led Miller Industries to become the world's largest manufacturer of towing and recovery equipment. Looking ahead, we are reaffirming our full year revenue guidance of $950 million to $1 billion, which would be our third highest performance on record, and continue to expect an EPS range from $2.90 to $3.20 per diluted share. We anticipate our annual gross margin to be comparable to the prior year in the range of 13 to 13.5 percent and SG&A as a percentage of sales for the full year to be approximately 9.5 percent.
Will: As always we will prioritize innovation automation and investing in our people as it is what has led Miller industries to become the world's largest manufacturer of towing and recovery equipment.
Will: Looking ahead, we are reaffirming our full year revenue guidance of $950 million to $1 billion.
Will: Which would be our third highest performance on record and continue to expect an EPS range from $2 90 to.
Will: The $3 20 per diluted share.
Will: We anticipate our annual gross margin to be comparable to the prior year in the range of 13 to 13, 5%.
Will: And SG&A as a percentage of sales for the full year to be approximately nine 5%.
William Miller: This guidance assumes no major changes in regulations, unforeseen supply chain issues, or significant tariff impacts. We believe we are well positioned for ongoing improvement and strong free cash flow throughout the second half of the year, with significant growth potential in 2026 and beyond.
Will: This guidance assumes no major changes in regulations.
Will: Unforeseen supply chain issues or significant tariff impacts.
Will: We believe we are well positioned for ongoing improvement and strong free cash flow throughout the second half of the year.
Will: With significant growth potential in 2026 and beyond.
Will: To close we are pleased with our current position.
William Miller: To close, we are pleased with our current position. underlying fundamentals in our end markets are strong and we're excited on our strategy as planned. We are executing on our strategy as planned, continuing to strengthen our business over time and returning capital to shareholders. Our leading position in this industry is the result of decades of focused investments in our people, our products, and our partners.
Will: Underlying fundamentals in our end markets are strong and we're excited on our strategy as planned we are executing on our strategy as planned continuing to strengthen our business over time and returning capital to shareholders.
Will: Our leading position in this industry is the result of decades of focused investments in our people our products and our partners are.
William Miller: Our foundation remains strong and we look forward to the opportunities that lie ahead.
Will: Our foundation remains strong and we look forward to the opportunities that lie ahead.
Will: In closing the entire management team and I would like to thank all of our employees suppliers customers and shareholders for their continued support at this time, we'd like to open the line for any questions.
William Miller: In closing, the entire management team and I would like to thank all of our employees, suppliers, customers, and shareholders for their continued support.
Operator: At this time, we'd like to open the line for any questions. Thank you.
Will: Thank you ladies and gentlemen, we will now begin the question and answer session should you have any questions. Please press the star followed by the number one on your telephone.
Operator: Ladies and gentlemen, we will now begin the question-and-answer session. Should you have any questions, please press the star followed by the number 1 on your touch-tone phone. You will hear a prompt that your hand has been raised. Should you wish to decline from the polling process, please press star followed by the number 2. If you are using speakerphone, please flip the handset before pressing any key.
Will: Mr. Han has been way should you wish to decline from the voting process. Please press star followed by the number two if you are using speaker phone. Please sleep dancette before granting any keys.
Michael Shlisky: Your first question comes from the line of Mike Shlisky from DA Davidson. Your line is now open. Yes, hello, good morning, and thanks for taking my question. I guess, first off... Good morning, Will.
Speaker Change: Your first question comes from the line of Mike Zaremski from D. A Davidson your line is now open.
Mike Zaremski: Yes, Hello, good morning, and thanks for taking my question.
Speaker Change: Good guess yourself.
Speaker Change: Good morning will.
William Miller: I guess, first off, can you talk about broad demand for a tow truck? regardless of who's buying the chassis. I guess I'm kind of curious how will order trends... during their first quarter in units and has that continue to take on that. Retail activity that we can see through our distribution channel remains consistent with the last few quarters. We believe that similar to last year, there's still a lot of uncertainty in the marketplace. Customers waiting to see the total impact of the tariff situation, as well as waiting to see what potential tax incentives and what gets passed through the tax bill up and coming.
Speaker Change: I guess first off can you talk about broad demand for tow trucks, regardless of who is who is buying the chassis if I'm kind of curious how order trends.
Speaker Change: During the first quarter in units.
Speaker Change: And has that April and May.
Speaker Change: Retail activity that we can see through our distribution channel.
Speaker Change: <unk> remains consistent.
Speaker Change: With the last few quarters, we believe that.
Speaker Change: Similar to last year, Theres still a lot of uncertainty in the marketplace.
Speaker Change: Customers waiting to see.
Speaker Change: Total impact of.
Speaker Change: Of the tariff situation.
Speaker Change: As well as waiting to see what.
Speaker Change: Potential tax incentives and what gets passed.
Speaker Change: Through.
Speaker Change: The tax bill.
Speaker Change: And coming.
Speaker Change: Okay great.
William Miller: been on the tariff topic, could you maybe share a broad number as to how much of your COGS do you think comes from China? And from what you know today, I mean, you didn't change your guidance on tariffs past. I'd be curious if you could tell us whether what has, as things stand lately, has not affected your guys all that much, or are you just waiting to see how things turn out, how they're changing? Well, I think the tariff situation is pretty, I don't want to say volatile, but pretty open-ended at this moment in time.
Speaker Change: I've been on the path.
Speaker Change: Tariff topic.
Speaker Change: Could you maybe share a broad number if that how much of your Cogs.
Speaker Change: Think comes from China.
Speaker Change: And what you know today I mean, you you didn't change your guidance without the powers pass.
Speaker Change: I'd be curious who will tell us whether what has.
Speaker Change: Hey, guys.
Speaker Change: It really has not affected your guidance all that much or you're just waiting to see how things go.
Speaker Change: We're not changing anything.
Speaker Change: Well I think you know the tariff situations really pretty.
Speaker Change: I would say volatile, but pretty open ended at this moment in time.
Speaker Change: We did announce that we did a price increase to try to get in front of it.
William Miller: We did announce that we did a price increase to try to get in front of it, a tariff surcharge on all new orders. We've also implemented a price increase both on parts and accessory sales that took place last month. We'll be a little bit proactive on what may occur in the future. From a China perspective, it's very minimal exposure from direct purchases from Miller Industries. I don't know that I can speak to the impact of the rest of our supply chain, what they may purchase from China, but directly it's minimal. From a From a broader perspective, we do source products from around the globe, from the EU, specifically Mexico, Canada, so waiting to see the final outcome of where all the terror situation lands is certainly important for us, but difficult at this time with minimal information to really ascertain a total impact, although we are watching it closely and we'll make adjustments as needed.
Speaker Change: Surcharge tariff surcharge on all new orders, we've also implemented a price increase both on parts and accessory sales.
Speaker Change: That took place last month.
Speaker Change: Be a little bit proactive on what may occur in.
Speaker Change: In the future.
Speaker Change: From a China perspective.
Speaker Change: Very minimal exposure from direct purchases from Miller industries, I don't know that I can speak to the impact of the rest of our supply chain, what they may purchase from China, but directly it's minimal.
Speaker Change: From a.
Speaker Change: From a broader perspective, we do source products from around the globe.
Speaker Change: From the EU.
Speaker Change: Specifically.
Speaker Change: Mexico, Canada so.
Speaker Change: Waiting to see the final outcome of where all the tariff situation Lance.
Speaker Change: It is certainly important for us.
Speaker Change: But its difficult at this time with minimal information to really ascertain a total impact although we are watching it closely and we'll make adjustments as needed.
Speaker Change: Great. Thank you.
Michael Shlisky: Thank you. Great. Thank you.
Michael Shlisky: And then on the gross margin side, you just did 15% in the first quarter, and yet you still maintained, if I heard you correctly, well, 13 to 15 to 25% for the full year, even when you were shipping a really large number of, you know, the full package. from Miller was still in the 30s. So I'd be curious.
Speaker Change: And then on the gross margin side, you did 15% in the first quarter.
Speaker Change: Yet you still maintain that if I heard you correctly, well 13, 5% for the full year.
Speaker Change: Even when you were shipping a really large number of the full package.
Speaker Change: Familiar it was still in the <unk>.
Speaker Change: So I'd be curious.
Speaker Change: Are there any weird headwinds, we should be thinking about that happened to you that I'm not thinking about or are you just trying to keep things cautious until the tariff situation plays out.
William Miller: Are there any weird headwinds you should be thinking about in the back half of the year that I'm not thinking about? Or are you just trying to keep things cautious until the tariff situation gets better? No, I think we're cautiously optimistic with regards to tariffs and everything else and how they may impact us from a gross margin perspective. Yes, you are correct that annualized last year we were in that 13, 13.5. We've had a good start. We do anticipate chassis shipments to increase throughout the remainder of the year, which will certainly have some effect, downward effect on the margins, but then also just being somewhat cautious with the unknown landscape moving forward.
Speaker Change: No I think we're cautiously optimistic with regards to tariffs and everything else and how they may impact us from a gross margin perspective, yes, you are correct that annualized last year, we were in that 13, 13 and a half.
Speaker Change: We've had a good start.
Speaker Change: We do anticipate chassis shipments to increase throughout the remainder of the year, which will certainly have some.
Speaker Change: Affect downward effect on the margins, but then also just you know being somewhat cautious with the unknown landscape moving forwards.
Michael Shlisky: Great.
Speaker Change: Great and maybe one last one for me can you outline who will comment on the chassis inventory situations dealers travels.
William Miller: And maybe one last one for me. Can you outline just a little more comment on the chat, the inventory situation at the dealers? The chart was very illuminating, but it's hard to really tell. Can you just give a sense as to how many months do you think are left until the dealers are at the correct number? And is how it's gone so far this year, has it performed to what you were expecting? Yeah, so as you saw from the chart, chassis have now dropped below body inventory, which is a positive direction for us. They're still relatively close.
Speaker Change: That's very illuminating, but it's hard to really tell.
Speaker Change: Just give a sense as to how many months do you think are left until the dealers throughout the correct number.
Speaker Change: And then how it's gone so far this year has it performed to what you were expecting.
Speaker Change: Yeah. So as you saw from the chart chassis have now dropped below body inventory, which is a positive direction for us.
Speaker Change: Theyre still relatively close its law of small numbers right. So the two graphs are still.
William Miller: It's lost small numbers, right? So the two graphs are still pretty in line with one another. We anticipate, you know, another 30 to 90 days of probably additional inventory and field inventory before we really start to see chassis orders start to pick up back to normalized levels. Except those states that are CARB compliant like California, you know, as soon as they can start to receive CARB compliant chassis that they've placed orders for this year, they certainly are looking to capitalize on that as quickly as Great.
Speaker Change: Pretty in line with one another.
We anticipate you know.
Speaker Change: Another.
Speaker Change: 30 to 90 days, probably additional inventory and field inventory before we really start to see a chassis.
Speaker Change: Uh huh.
Speaker Change: Orders start to pick up back to normalized levels.
Speaker Change: Except those states that are carb compliant like California.
Speaker Change: As soon as they can start to receive carb compliant chassis.
Speaker Change: They placed orders for this year.
Speaker Change: Certainly are looking to capitalize on that as quickly as possible.
Speaker Change: Okay.
Speaker Change: Great. Thank you so much and I appreciate your Windows. When you go to those questions I'll pass it along.
Michael Shlisky: Thank you so much and I appreciate your indulgence with all those questions. I'll pass it along. All right, absolutely. Absolutely. We appreciate it, Mike. Thank you so much. Have a great day. Thank you.
Speaker Change: Alright, absolutely absolutely we appreciate it Mike. Thank you so much have great day.
Speaker Change: Okay.
Speaker Change: Thank you there are no further questions at this time turning over back to wheel.
Operator: There are no further questions at this time.
William Miller: Turning over back to Will. Please go ahead. Thank you.
Speaker Change: Please go ahead.
Speaker Change: Okay.
Speaker Change: 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 second quarter Conference call.
William Miller: 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 second quarter conference call. If you would like information on how to participate and ask questions on the call, please visit our Investor Relations website, millerind.com forward slash investors or email investors.relations at millerind.com.
Speaker Change: If you would like information on how to participate and ask questions on the call.
Speaker Change: Please visit our Investor Relations website.
Speaker Change: Miller <unk> dot com forward slash investors or email investors Dot relations <unk> dot com.
Operator: Thank you, and may God bless you all.
Speaker Change: And May God bless you all.
Speaker Change: Ladies and gentlemen, this concludes your conference call for today, we thank you for participating and ask thank you. Please disconnect your lines.
Operator: Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please disconnect your lines. and Ron Jansson.
Okay.
Speaker Change: [noise].
Speaker Change: Yeah.
Speaker Change: Yes.
Speaker Change: Okay.