Miller Industries Q4 2023 Earnings Report

PURE Bioscience EPS Results

• Actual EPS: $1.45
• Consensus EPS: N/A
• Beat/Miss: N/A
• One Year Ago EPS: N/A

PURE Bioscience Revenue Results

• Actual Revenue: $296.25 million
• Expected Revenue: N/A
• Beat/Miss: N/A
• YoY Revenue Growth: N/A

PURE Bioscience Announcement Details

• Quarter: Q4 2023
• Date: 3/6/2024
• Time: N/A
• Conference Call Date: Thursday, March 7, 2024
• Conference Call Time: 10:00AM ET

PURE Bioscience (OTCMKTS:PURE) develops and commercializes antimicrobial products that provide solutions to the health and environmental challenges of pathogen and hygienic control in the United States and internationally. The company manufactures and distributes silver dihydrogen citrate (SDC), a non-toxic antimicrobial agent, which offers residual protection, as well as formulates with other compounds. It offers SDC-based disinfecting and sanitizing products, including PURE Hard Surface, a food contact surface sanitizer and disinfectant; PURE Control, a food contact processing aid for fresh produce and raw poultry; PURE Multi-Purpose and Floor Cleaner Concentrate to clean various resilient surfaces, including floors, glass, and food contact surfaces; and PURE Multi-Purpose Hi-Foam Cleaner Concentrate to clean stainless steel equipment, resilient floors, walls, and painted surfaces. The company also provides Axen30, a hard surface disinfectant; Axenohl, an antimicrobial formulation for use as a raw material ingredient in the manufacturing of consumer and commercial disinfecting and sanitizing products; and SILVÉRION, an antimicrobial formulation that is used against bacteria, viruses, yeasts, and molds. PURE Bioscience, Inc. was incorporated in 1992 and is headquartered in Rancho Cucamonga, California.

PURE Bioscience Q4 2023 Earnings Call Transcript

[Operator]

Good day, ladies and gentlemen, and welcome to the Miller Industries 4th Quarter and Full Year 2023 Results Conference Call. Please note this event is being recorded. And now at this time, I'd like to turn the call over to Mike Goodrow at FTI Consulting. Please go ahead, sir.

[Speaker 1]

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 4th quarter and full year results, which were released after the close of the market 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.

[Speaker 1]

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 to your attention the risks related to these statements, which are more fully described in the company's annual report filed on Form 10 ks 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.

[Speaker 2]

Thank you, and good morning, everyone. I'd like to start off by saying thank you to our team and our amazing employees for an exceptional year. It's with great pride that I am here with you today having concluded our fiscal year 2023 on a tremendous high note. The Q4 marked the culmination of a record breaking year as we surpassed the annual expectations we set a year ago by a wide margin. When stepping into this role, I had a clear vision of what Miller Industries could become and I am proud that we are now realizing the potential of our capital investments and long term strategy.

[Speaker 2]

During my tenure as CEO, Miller Industries has undergone a transformation, investing over $100,000,000 in projects since 2014, focused on increasing our capacity, improving our productivity and enhancing our supply chain. Most recently with the acquisition of Southern Hydraulic Cylinder as well as investing in and attracting the best talent in our sector. These efforts intensified over the last 2 years in particular as I became sole CEO during a period of global market volatility and macroeconomic uncertainty. Instead of cutting back, as we saw many of our peers do, we doubled down and continue to invest in our business regardless of the headwinds. We knew that with the right investments in our business and the right team in place, once macroeconomic factors normalized, Miller Industries would emerge stronger than ever.

[Speaker 2]

Our financial results this year are proof that our strategy is bearing fruit. Additionally, we focused on improving productivity by reinvesting in automation and productivity initiatives. One such example is the acquisition of Southern Cylinder or SHC. We'd like to again reiterate that SHC is integrating seamlessly into our broader business and has immensely improved production efficiency as custom hydraulic components have historically had long lead times. Our ability to in source this production is a significant advantage for us.

[Speaker 2]

Finally, we place significant emphasis on investing in our talent. We not only dedicate resources to training and retaining a highly skilled workforce, but also prioritize safety and sustainability in our facilities. These efforts aim to enhance the health and safety of our employees while optimizing operations and thus far they have been working, evidenced by a turnover rate which is 10.4% below the industry average. With the improvements to our supply chain and ability to meet the significant demand we have seen for our products over the last 3 years, our financial results are starting to reflect the underlying strength of our company and our end markets. Resulting from these initiatives was a 4th quarter where we generated revenues of $296,200,000 an increase of 31.2% year over year.

[Speaker 2]

Strong execution throughout the year on our backlog drove 20 23 revenues to approximately 1,150,000,000 dollars well ahead of the target we set at the end of last year for over $1,000,000,000 in annual revenue. Gross profit for the Q4 was $38,600,000 an increase of 51.4% compared to the prior year quarter. Again well ahead of even our own expectations for significant improvements in year over year profitability. Lastly, I want to also touch on capital return to shareholders. Our dividend has always been a big part of our identity as a company We are extremely proud to have paid the dividend for the 53 straight quarters.

[Speaker 2]

Even during some challenging moments in our business, today, we are pleased to announce that the Board has approved an increase in our quarterly dividend to $0.19 per share, a 5.6% increase, underscoring the confidence we have in our long term outlook. Debbie will get into our capital allocation priorities and more specifics. However, as our results improve, we believe it is only right that returns to our shareholders grow as well. We talked about our efforts to improve liquidity and took these steps to increase the dividend. But I want our shareholders to know that as the core business continues to grow, we're spending more time looking at optimizing capital return.

[Speaker 2]

Now I'd like to turn the call over to Debbie, who will review the Q4 and full year financial results in more detail. Following her remarks, I'll provide a market outlook and some closing comments. Debbie?

[Speaker 3]

Thanks, Will, and good morning, everyone. Net sales for the Q4 2023 were $296,200,000 compared to $225,900,000 in the Q4 of 2022, a 31.2% year over year increase, driven largely by continued strong demand for our products across all our geographies. Cost of operations increased 28.6 percent to $257,600,000 for the Q4 2023 compared to $200,300,000 for the Q4 2022. The increase in our cost of operations is largely a function of our higher revenue levels. As a percentage of net sales, cost of operations decreased approximately 200 basis points from the prior year period to 87%.

[Speaker 3]

Gross profit was $38,600,000 or 13 percent of net sales for the Q4 of 2023 versus $25,500,000 or 11.3 percent of net sales for the prior year period. The year over year improvement in gross margin was driven by favorable product mix, enhanced productivity and the stabilization of raw material costs. Although we consistently emphasize that our gross margins may vary quarter to quarter due to product mix, we are highly encouraged by the significantly improved outcomes from our strategic initiatives compared to the previous year. SG and A expenses were $16,400,000 in the Q4 20 23 compared to $13,100,000 in the Q4 2022 due to increases in bonus accruals and greater investment in our workforce. As a percentage of sales, SG and A was 5.5%, 30 basis points lower than the prior year.

[Speaker 3]

Interest expense for the Q4 of 2023 was 1 point $3,000,000 for the Q4 of 2022, driven by the increases in our debt levels and to a lesser extent an increase in our distributor floor plan financing cost, which as a reminder, flex up and down with volume. Other income for the Q4 was $149,000 compared to an expense of $512,000 for the Q4 2022, attributable to foreign currency exchange rate shifts. Our effective tax rate for the quarter increased slightly compared to the previous year, primarily due to reduced domestic tax credits. Net income for the Q4 2023 was $16,700,000 or $1.45 per diluted share compared to net income of $9,300,000 or $0.81 per diluted share in the Q4 of 2022. Before moving to the balance sheet, I'd like to quickly recap our results for the full year of 2023.

[Speaker 3]

Net sales for the full year were $1,150,000,000 compared to $848,500,000 in the prior year period, an increase of 35.9 percent. Gross profit for the full year was at $151,900,000 or 13.2 percent of sales compared to $82,400,000 or 9.7 percent of sales in 2022. Net income for the full year of 2023 was $58,300,000 or $5.07 per diluted share compared to net income for 2022 of $20,300,000 or $1.78 per share, increases of 186.5 percent and 184.8 percent, respectively. Turning to the balance sheet. Cash and cash equivalents as of December 31, 2023, were $29,900,000 compared to $26,800,000 as of September 30, 2023 $40,200,000 as of December 31, 2022.

[Speaker 3]

Accounts receivable as of December 31, 2023 was $286,100,000 compared to $240,600,000 as of September 30, 2023 and $177,700,000 as of December 31, 2022. Inventories were $189,800,000 as of December 31, 2023, compared to $176,000,000 as of September 30, 2023 $153,700,000 as of December 31, 2022. We made investments in inventory throughout 2023 to meet increasing demand levels. However, we expect our working capital to decrease throughout the balance of the year, predominantly in the form of a reduction in our inventory balance. Accounts payable as of December 31, 2023 was $191,800,000 compared to $146,800,000 as of December 30, 2023, and $125,500,000 as of December 31, 2022.

[Speaker 3]

Lastly, before I turn the call back to Will, as it relates to capital allocation, we think about 4 main buckets: investing in the business to increase capacity and improve productivity return of capital to our shareholders, accretive M and A and reduction of our debt. As Will mentioned, we increased the dividend by 5.6 percent. And during the Q1 of 2024, we also paid down $5,000,000 on our debt balance, resulting in a current balance of $55,000,000 Now I'll turn the call back over to Will for some closing remarks.

[Speaker 2]

Thank you, Debbie. Our results over the last two quarters of fiscal year 2023 have given us increased confidence in our business strategy. As top line growth has continued to improve, we are encouraged that our strategy has also yielded improved productivity and profitability. We continue to see no slowdown in the demand of our products across any of our geographies, giving us further encouragement that 2023 is only the very beginning of what this company can achieve. While our North American business has remained strong as evidenced by our backlog approaching $1,000,000,000 our international business is seeing signs of further improvement due to potential cleanup efforts as a result of continuing geopolitical strife.

[Speaker 2]

This time last year, we provided annual guidance for the first time with expectations for at least $1,000,000,000 of revenue in fiscal year 2023, with significant improvements in our year over year profitability. Today, we provide that to be true through our diligent execution for fiscal year 2024, our plan is to build upon the momentum gained in 2023 with expectations for high single digit revenue growth and continued productivity enhancements driving flow through to the bottom line, culminating in another year of record revenue and net income. In closing, the entire management team and I would like to thank all of our employees, suppliers, customers and shareholders for their continued support of Miller Industries. At this time, we'd like to open the line for any questions.

[Operator]

Thank you. At this time, we'll be conducting a question and answer There are no questions at this time. I'd like to turn the call back over to Will Miller for closing comments.

[Speaker 2]

Thank you. I'd like to thank you all again for joining us on the call today, and we look forward to speaking with you on our Q1 conference call. If you would like information on how to participate and ask questions on the call, please visit our Investor Relations website, millerind.com/investorsoremailinvestors. Relationsmillerind.com. Thank you all.

[Operator]

This concludes today's conference. You may disconnect your lines at this time. Thank you and we thank you for your participation.