Mueller Industries, Inc.

Good day, ladies and gentlemen, and welcome to the Miller Industries third quarter 2023 results conference call. Please note this event is being recorded. It is now time I would like to turn the call over to Mike Goudreau at FTI Consulting. Please go ahead, sir.

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 third quarter results, which were released after 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. 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 your attention to the risks related to these statements, which are more fully described in the company's annual report filed on Form 10-K 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.

Thank you, and good morning, everyone. It is a great feeling to report yet another strong quarter. proving once again that our strategic actions are yielding positive results. In stepping into this role, a great focus of mine has been on innovation and modernization. In 2019, we built a freestanding research and development facility to accelerate product development, increase research and integration of automation and robotics, reduce our environmental impact, and improve safety within our operating footprint. Unfortunately, given the macroeconomic environment over the last two to three years, we have not really had an opportunity to see these investments bear fruit in our results until this year. We believe that the strong performance we've reported thus far this year is attributed to our team's execution on the strategic initiatives we put in place. Investments we have made over the last decade, both in improving our facilities increasing capacity, and attracting and retaining the best talent in the industry. Those investments in our production capabilities and our strategy to accumulate inventory to service our elevated backlog are paying off this year. In the third quarter of 2023, we generated revenues of $274.6 million, an increase of 33.6% year over year, mainly due to execution on our healthy backlog of finished goods to our customers. Gross profit for the third quarter was $42.9 million, an increase of 84.9% compared to the prior year quarter, where our gross margin of 15.6% improved 430 basis points year over year and 222, 220 basis points sequentially. The year over year increase is largely due to the impact of those productivity enhancements I mentioned earlier, a favorable product mix, and the stabilization of raw material costs compared to the prior year. In addition, we also wanted to provide an update on our recent acquisition of Southern Hydraulic Cylinder, or SHC, which we announced in May of this year. We're very pleased with the way SHC is performing as part of our portfolio. As we've said previously, we knew the company extremely well prior to our acquisitions. and it is clear that this familiarity is paying dividends as it relates to integration. The SHC team has fit in seamlessly, and the acquisition has helped shore up our supply chain tremendously, particularly because cylinders are some of the products that historically have longer lead times. SHC is meeting, if not exceeding, all of our expectations in year one and delivering a return on investment ahead of our calculations. During the early days of my tenure, we focused on organic investments in our business, and this transaction demonstrates that we are willing to make smart acquisitions if they are accretive and complementary to our overall strategy. Despite all of the positives, we are not completely out of the woods on supply chain difficulties. Some chassis suppliers have had disruptions in production, and it is difficult to determine when that dynamic will improve. That said, the overall supply chain is in much better health than it was a year ago and our results so far this year have demonstrated that we can continue to perform at a high level despite facing some macro challenges. Additionally, I would like to note that we have not experienced any disruptions from any of the large OEM strikes this far. Demand for our products remains high across all of our end markets. Backlog remains healthy and no longer at record levels due to our improvement in deliveries. After all of our execution this year, and strong year-over-year sales growth in the first nine months, backlog is still substantially higher than pre-pandemic levels. Because of the immense customer demand, our strategy now remains the same as it has been throughout the year, investing in our inventory and in our business to improve lead times and ship finished goods to our customers as quickly as possible. We are extremely focused on managing our inventory levels and expect inventories to grow at a slower rate than they have in the prior year. However, with the demand we are seeing, we continue to believe it is the best use of our cash at the moment. Lastly, before I hand the call over to Debbie, I want to quickly touch on our international and military business, which makes up approximately 10% of our sales. As in our domestic business, demand remains strong. We are starting to see more activity in the military space, and we are encouraged by the performance of this aspect of our business as well. Now I'll turn the call over to Debbie, who will review the third quarter financial results in more detail. Following her remarks, I'll provide some closing comments and an update on our outlook. Debbie?