Despite a 12.2% drop in sales in the fourth quarter, Miller Industries, Inc. improved its net income in the final three months of 2020 to end the year with profits down only 23.7% last year to $29.8 million, or $2.62 per share.
But the Chattanooga-based tow truck equipment maker warned that 2021 is starting with supply problems due to adverse weather, computer software issues and the ongoing impact of the coronavirus pandemic.
Miller said it earned $12 million, or $1.05 per share, on sales of $178.3 million in the fourth quarter. In the same period a year earlier, Miller said it earned $11.7 million, or $1.03 per share on sales of $203.1 million.
"While we were encouraged to finish the year with such strong operating results, the start to the first quarter of 2021 has not been without its challenges," Miller Industries CEO Jeff Badgley said in the quarterly earnings report released after the market closed Wednesday. "In the first half of the first quarter of 2021, we experienced significant delays in deliveries to our distributors caused by changes we made to our legacy business processes during the implementation of our new enterprise software system. During the same period, we also experienced significant supply chain disruptions due primarily to continued impacts from COVID-19, and extreme weather conditions across parts of the U.S. and tightening availability of freight trucks caused delays in delivering products to our facilities as well as to our customers."
Badgley said he expects the rest of 2021 will be better for the towing equipment manufacturer.
"Based on our strong backlog and the current status of our process improvements, we believe we have the opportunity to substantially improve our operating results in 2021 beyond the first quarter," he said.
For the year ended December 31, 2020, net sales for Miller Industries were $651.3 million, a decrease of 20.4% compared to $818.2 million of sales in 2019.
The company also announced that the board of directors declared a quarterly cash dividend of 18 cents per share, payable March 22, 2021 to shareholders of record at the close of business on March 15, 2021.
Shares of Miller Industries traded lower in after-the-market trading following the release of the quarterly results. Ahead of the earnings announcement, Miller Industries closed at $42.63 per share, up 12.1% so far in 2021 and 50.2% higher than what the stock was trading at a year ago.