America's biggest tow truck maker hauled in nearly twice the profits of a year ago during the first quarter.
Miller Industries Inc. said Wednesday it earned net income of $6.7 million, or 59 cents per share, on sales of $159.2 million in the first three months of 2018. In the same period a year ago, Miller earned $3.8 million, or 34 cents per share, on sales of $148.98 million.
Company CEO Jeff Badgley credited the 73.7 percent gain in net income to improved sales and profit margins, combined with a drop in the effective tax rate for the company from 35.9 percent a year ago to 28.5 percent this year due to the new federal tax changes.
"We are very pleased with our performance this quarter, in what was a very encouraging start to 2018," Badgley said in the quarterly earning report. "The trends across our business remain favorable as we continue to deliver revenue and earnings growth, return shareholder value, and make progress on our strategic priorities."
Gross profit for the first quarter of 2018 was $18.4 million, or 11.6 percent of net sales, compared to $15.4 million, or 10.3 percent of net sales, for the first quarter of 2017. The effective tax rate of 28.5 percent in the first quarter of 2018 was down from 35.9 percent in the prior year period due to the lower tax rates under recently enacted tax laws.
The company also announced Wednesday it will pay a quarterly cash dividend of 18 cents per share on June 18 to stockholders of record at the close of business on June 11.
Badgley said he is optimistic about 2018, but he said "we continue to face uncertainty as it relates to sourcing raw materials for our products" due to the uncertainty about the effects of steel and aluminum tariffs.
Miller Industries Towing Equipment is the world's largest manufacturer in towing and recovery equipment. Miller Industries offers a variety of products from auto-load units with 8,000-pound capacities to rotators with 75-ton capacities. Its tow trucks are sold under the Miller Industries family of brands of Century, Vulcan, Chevron and Holmes.
Miller Industries was recently awarded the Chattanooga Regional Manufacturers Association (CRMA), Manufacturers Excellence Award for 2018 Company of the Year. The annual honor is given to a manufacturer that shows its manufacturing proficiencies and commitment to employee safety, health and training and to community involvement.
Miller Industries is currently wrapping up a more than $40 million expansion to its production plants and its Ooltewah headquarters, complete with eco-friendly paint facilities, energy efficient all-LED lighting, employee training facility, and a state-of-the-art welding academy.
Contact Dave Flessner at dflessner@timesfreepress.com or at 757-6340.