Miller Industries, Inc. (NYSE:MLR) Q2 2023 Results Conference Call August 10, 2023 10:00 AM ET

Company Participants

Mike Gaudreau - FTI Consulting

Will Miller - President and CEO

Debbie Whitmire - EVP and CFO

Conference Call Participants

Mike Shlisky - D.A. Davidson

Operator

Good day, ladies and gentlemen, and welcome to Miller Industries Second Quarter 2023 Results Conference Call. Please note this event is being recorded.

And now at this time, I would like to turn the call over to Mike Gaudreau at FTI Consulting. Please go ahead, sir.

Mike Gaudreau

Thank you, and good morning, everyone. I would like to welcome you to the Miller Industries conference call. We are here to discuss the company's 2023 second quarter results, which were released 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 Counsel. 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 Exchange Commission. At this time, I'd like to turn the call over to Will. Please go ahead, Will.

Will Miller

Thank you, and good morning, everyone. We are very pleased to report another solid quarter, which demonstrates that our use of capital to reinvest in our facilities over the past decade in connection with our strategic initiatives we've undertaken over the past several quarters are continuing to pay off. This is a testament to our commitment to our shareholders as well as our efforts to invest in our workforce during the pandemic. We generated record revenue of $300.3 million, increasing 49% year-over-year due to improved supply chain resilience and increased productivity. Gross profit for the second quarter was $39.9 million, an increase of 117.3% compared to the prior year quarter while our gross margin of 13.3% improved 420 basis points year-over-year and 250 basis points sequentially.

We are seeing continued benefits from the productivity initiatives and pricing adjustments to offset inflationary pressures and are optimistic about what this means for our profitability moving forward. To give a bit more context to maximize production output after facing the challenges created by the pandemic, we have been focused on vertical integration to minimize production disruptions. This was a large driver behind our decision to acquire Southern Hydraulic Cylinder in May. The sourcing flexibility this acquisition provides us will continue to improve execution on our delivery of finished goods and consolidate lead times, particularly since hydraulic component availability has recently constrained our ability to maximize production. And historically, custom cylinders have longer than normal lead times.