Miller Industries, Inc.

Good day, ladies and gentlemen, and welcome to the Miller Industries First Quarter 2020 Results Conference Call. Please note, this event is being recorded. And now, at this time, I would like to turn the call over to Brendan Dunlap, FTI Consulting. Please go ahead, sir.

Thank you, and good morning, everyone. I would like to welcome you to Miller Industries Conference Call. We are here today to discuss the company's 2020 first quarter results, which were released after the close of market yesterday. With us from the management team today are Bill Miller, Chairman of the Board, Will Miller, President and Co-CEO, Jeff Badgley, Co-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 period. 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. With these formalities out of the way, I'd like to turn the call over to Jeff. Please go ahead, Jeff.

Thank you, and good morning, everyone. Before we discuss our first quarter financial results, let me start by saying that our thoughts are with all those affected by COVID-19. These are unprecedented and challenging times, and I am deeply appreciative of the hard work and dedication of our employees. During March, we implemented significant actions to protect the health and well-being of our employees as well as our suppliers and customers. Additionally, we took the necessary steps to adjust our operations that serve to balance health and safety with continued operations so that we can continue to serve our customers. I'd also like to say that we are thankful for the healthcare professionals and essential workers, which includes our employees and our customers on the frontline dedicated to moving America forward during this difficult time. As the country begins to heal, we remain committed to providing industry-leading products to help keep America's roadways clear. Moving on to our financial results, our performance during the quarter was negatively impacted by disruptions in our supply chain as well as production modifications and shutdowns and delayed deliveries associated with the onset of the COVID-19 pandemic. Revenue during the first quarter decreased 10.7% to $176.1 million versus $197.2 million a year ago as a result of rescheduled delivery of certain components within our supply chain and deferred delivery of units as a result of the cancellation of our largest trade show of the year due to COVID-19. Additionally, we experienced a temporary shutdown in our manufacturing facility at the end of the quarter as social distancing and children in place policies were implemented nationwide. However, I am pleased to say that we were able to quickly adjust our business operations in order to resume production effectively and efficiently. and the rest. Our domestic business was negatively impacted, however. Our international business held constant quarter over quarter due to favorable contract delivery timing. Quarterly gross profits decreased by 18% year over year to $18.5 million and our gross margin contracted approximately 100 basis points year over year to 10.5%, reflecting reduced fixed cost absorption as a result of a decrease in top-line sales. Net income was $5.4 million, or 48 cents per share, compared to net income of $8.7 million, or 76 cents per share, in the first quarter of 2019. Despite the challenging environment, we are confident in our ability to continue meeting the needs of our customers. The safety and well-being of our employees is our primary concern, so as we move into the second quarter, we are maintaining current production levels to balance deliveries on our strong backlog while following recommended social distancing guidelines and other and the CDC requirements in our facilities. We're also proactively working with our distribution network to maximize their inventory investment during these challenging times. Further, we drew $25 million on our existing credit facility to strengthen our liquidity position as we manage the business through this crisis. Now I'll turn the call over to Debbie. who will review the first quarter financial results. After that, I'll be back with comments about market environment and some closing remarks. Debbie?