Miller Industries Inc. increased its third quarter sales by 3.9 percent from a year ago, but net income dropped by 20.4 percent from a year ago due to lower margins and investments in new production capacity for the future.
The Ooltewah-based towing equipment maker said Wednesday it earned $4.5 million, or 39 cents per share, on sales of $153.4 million in the three months ended Sept. 30. In the same period a year ago, Miller Industries earned $5.5 million, or 49 cents per share, on sales of $147.6 million.
Gross profit for the third quarter of 2017 was $15.7 million, or 10.2 percent of net sales, compared to $17.1 million, or 11.6 percent of net sales, for the third quarter of 2016.
"While the integration efforts certainly had an effect on gross margins quarter over quarter, additional factors included product mix, higher health insurance costs, additional depreciation on the investment in our facilities, and increasing supplier lead times," said Jeffrey I. Badgley, the company's co-chief executive.
Badgley said demand for its tow trucks remains strong in both the U.S. and foreign markets and the company is building in new facilities and expansions in Ooltewwah, Greeneville, Tenn., and Hermitage, Pa., to expand production capacity.
"Through our investment initiatives, we are developing our business for future growth, by positioning our production capacity to meet growing demand," he said. ""As we approach the end of 2017, I am encouraged by the trajectory of our business. In the fourth quarter, we will continue to further integrate our new processes while executing our strategic objectives and maintaining a healthy balance sheet."
The company also declared a quarterly cash dividend of 18 cents per share, payable Dec. 11 to shareholders of record at the close of business Dec. 4.
This story was updated Nov. 8 at 10:30 p.m. with more information.