Miller Industries, Inc. Q1 2008 Earnings Call Transcript

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Earnings Call Excerpt

Miller Industries, Inc. (MLR)

Q1 2008 Earnings Call

May 13, 2008 10:00 am ET

Executives

Jeffrey I. Badgley- Co-chief Executive Officer and President

Vince Mitchell- EVP, CFO and Treasurer

Eric Boyriven- Investor Relations

Presentation

Operator

Good morning, my name is Bobbie Joe and I will be your conference operator today. At this time I would like to welcome everyone to Miller Industries 2008 First Quarter Conference call.

(Operator Instructions)

I would now like to turn the call over to Mr. Eric Boyriven of FD. Sir, you may begin.

Eric Boyriven

Good morning everyone, I am Eric of FD and I would like to welcome you to the Miller Industries conference call. We are here to discuss the company’s results which were released after the close of market yesterday. With this from management today are Bill Miller, Chairman of the Board and Co-CEO; Jeff Badgley, President and Co-CEO; Vince Mish, CFO; Frank Madonia, General Counsel; Debbie Whitmire, Corporate Controller; and Allison Houghton, Director of Finance. Today’s call will begin with formal remarks from management followed by a question-and-answer period. Please note that in this mornings' call management may reiterate forward-looking statements. In accordance with the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995, we 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 form 10K and on other filings with the Securities and Exchange Commission. With these formalities out of the way, I would like to turn the call over to Jeff Badgley. Jeff?

Jeffrey Badgley

Good morning and thank you Eric. Net sales for the 2008 first quarter declined about 20% from fourth quarter levels to $67.6 million, reflecting the impact of the softening economic environment and the uncertainties associated with it, and their effects on our customer demand levels.

Our performance also reflects the absence of some significant government related contracts that we worked to deliver through the first half of last year. In response to the economic conditions, we have continued to adjust our production levels, and we were successful in bringing our cost of operations down as sales levels declined. We have also continue to experience cost pressures as a result of rising raw materials prices for steel, aluminum, and petroleum-related products and we have taken steps to mitigate the impact of these cost increases.

In order to properly align our operating structure with current demand levels during the quarter, we reduced production levels, and our cost base, and as a result of these actions, our cost-of-goods sold, and sales each declined relatively and proportionately. At the same time, we took steps to mitigate the effect of increased raw materials cost on our business, and in April we implemented price increases across all our product lines. This should begin flowing through our backlog as the year progresses, but we expect continued increases in raw materials costs which will mitigate the effect of our price increases relative to margins. Now I will turn the call over to Vince who will review the first quarter 2008 financial results in greater detail. After that, I will be back to add some comments, following which we will take your questions. Vince?

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