The full-year EPS outlook is flat year-over-year, but Q1 and Q2 included significant OMARs one-time charges. Is it correct to assume EPS would be up double-digits without these charges, and what is the remaining impact?

Yes, the analyst's assumption is correct; the outlook includes the OMARs expenses. The majority of these one-time items have been recognized, with Q1 at $0.13 and Q2 at $0.11. The remaining impact for the rest of the year is estimated to be $0.04 to $0.05. “So first quarter, I think we said it was 13th in impact. Second quarter is 11. I would say the remainder of the year is 45 cents.”

Military commitments increased from $150 million to over $200 million. What was added, was it heavy-duty, and what is the pipeline for future opportunities?

The increase was primarily due to one larger commitment, mostly for heavy-duty production, with a few industrial car carriers. The customer or region cannot be disclosed yet but more details are expected in Q3/Q4. There is a significant pipeline of potential opportunities and RFQs being actively worked with global governmental agencies. “The addition that we saw, you know, moving us, you know, from the course of 150 million in commitments to, you know, now over 200 million was probably there were some small items in there along for us where there was one more larger commitment. All of it was, vast majority of it was heavy duty production, some, a few industrial car carriers.”

What are the latest conversations with dealers indicating about buying sentiment for the rest of 2026 and early 2027, considering past political and interest rate concerns?

Current sentiment is driven by consumer confidence, geopolitical issues, and fuel prices, leading to low confidence. Production levels, retail activity, and inventory levels are currently flat and stable. Dealers are content with current inventory, and excess inventory has been cleared. Improvement is not expected until geopolitical and fuel price issues resolve. “Yes, I mean, right now what we're seeing is it's mostly consumer confidence and geopolitical and fuel pricing is what's on everybody's mind. So the confidence level isn't all that high. I mean, our production levels, retail activity. levels, inventory levels, everything's really flat right now.”

MLR

Miller Industries (MLR) Q2 FY26 earnings call: guidance and Q&A

Earnings call· Jun 2026 (Q2 FY26)· Consumer Discretionary· Aug 6, 2026

Source: earnings call transcript

Executive summary

Miller Industries Q2 FY26 — Strong Revenue Growth and Profitability Improvement

Miller Industries delivered robust sequential and year-over-year revenue growth in Q2 FY26, driven by operational efficiencies and disciplined cost management, which also enhanced profitability and cash generation. The company strengthened its balance sheet through debt reduction and returned capital to shareholders, while strategically investing in capacity expansion and integrating the OMARs acquisition. Despite macroeconomic headwinds and geopolitical concerns impacting domestic market confidence, the company maintains a positive outlook for the second half of the year, supported by consistent international backlog and growing military commitments.

Highlights

Revenue increased 12.1% year-over-year to $240 million in Q2 FY26.
Gross profit margin improved to 15% of sales in Q2 FY26.
Diluted EPS rose significantly to $0.63 in Q2 FY26 from $0.05 in Q1 FY26.
Debt was reduced by an additional $20 million since Q1 FY26.
Returned $4.9 million to shareholders through share repurchases and dividends in Q2 FY26.

Concerns

OMARs acquisition transaction expenses impacted Q2 FY26 EPS by $0.11 per share.
Inconsistent macroeconomic environment, geopolitical tensions, and elevated fuel prices are impacting domestic market confidence.
Full-year 2026 gross margin guidance of mid-13% range implies a decline from Q2 FY26's 15% due to anticipated product mix shift.

Guidance & targets

Category	Target	Timeline	Confidence
Full-year 2026 Revenue	$850 million to $900 million high materiality	Full Year · FY26	High
Full-year 2026 Diluted EPS	In line with full year 2025 results high materiality	Full Year · FY26	Medium
Full-year 2026 Gross Margins	Mid 13% range high materiality	Full Year · FY26	Medium
Q3 and Q4 2026 Quarterly Revenue	Approximately $250 million medium materiality	Q3 FY26	Medium
GIGER Expansion Completion	Mid-2027 medium materiality	Mid-2027	High
New Manufacturing Facility Construction Start	Q4 of 2026 medium materiality	Q4 FY26	High
New Manufacturing Facility Production Readiness	Late 2027 medium materiality	Late 2027	High
Military Commitments Revenue Recognition	Majority in 2028 and 2029 high materiality	FY28-FY29	High

Orderbook & backlog

Military Commitments $200 million+ Q2 FY26

up from $150 million last quarter

Production scheduled to begin in 2027; majority of revenue recognized in 2028 and 2029.

International and Export Business Backlog Consistent Q2 FY26

International facilities operating at a steady production pace to meet sustained customer demand.

Deals & partnerships

OMARs Acquisition of a company

Integration continues to progress smoothly. Transaction-related expenses impacted Q1 EPS by $0.13 and Q2 EPS by $0.11. Remaining impact for the year is $0.04-$0.05.

Capital programs

GIGER Expansion in France on track €8 million

Expansion in France, part of global initiatives.

New Manufacturing Facility underway

Funding: organically

Start: Q4 2026 (construction)

Benefit:200,000+ sq ft; global high-volume defense-grade recovery vehicles; increased demand for global export markets; enhanced manufacturing efficiency

New 200,000-plus square foot facility, site preparation wrapping up, construction to begin Q4 2026, production ready late 2027. Will incorporate latest manufacturing technology.

Risks & headwinds

Inconsistent macroeconomic environment Near-term

Stable retail demand, but consumer confidence not high.

Mitigation:Focus on production efficiencies, strengthening balance sheet, and strategic investments.

Geopolitical tensions Ongoing

Affecting consumer confidence and domestic market sentiment.

Mitigation:Diversifying through international and military business growth.

Elevated fuel prices Ongoing

Affecting consumer confidence and domestic market sentiment.

Mitigation:Diversifying through international and military business growth.

OMARs acquisition transaction expenses Q1-Q4 FY26

$0.11 EPS impact in Q2 FY26 (following $0.13 in Q1 FY26). Remaining $0.04-$0.05 EPS impact for remainder of FY26.

Mitigation:Majority of expenses recognized; integration progressing smoothly and expected to be accretive post-expenses.

Product mix shift impacting gross margins H2 FY26

Anticipated return to historical levels in mid-13% range for full-year 2026, down from Q2's 15%.

Mitigation:Managing production pace and product mix to optimize profitability.

What to watch in Q3 FY26

Gross Margin Trajectory

Next quarter (Q3 FY26)

Current 15% in Q2 FY26

Target Mid-13% range for full-year 2026

Why it matters

Indicates the impact of product mix shift (more chassis) on profitability and whether the company can maintain higher margins.

Yes, I mean, our projections, Mike, right now, thank you for the question. Our projections right now are sort of to continue the current pace with bodies and chassis, but we're, you know, seeing that product mix return back to historical levels. So as our distribution base demands more chassis to integrate with their bodies. We're going to see an uptick in that chassis revenue, which will probably affect margins slightly. So, you know, we're not exactly sure, but we think somewhere in that, you know, mid 13% range for the full year as it starts to get back down to historical averages. It might be a little bit higher than that, but we're close.

Find out whether MLR delivers this. Inve re-checks your case every morning.

Q&A highlights

Why are gross margins guided to mid-13% for the full year, implying a decline in H2, despite Q2's 15% margin?

Management expects a shift in product mix back to historical levels, with an uptick in chassis revenue (which typically has lower margins) as distributors demand more chassis to integrate with bodies. This will likely affect overall margins slightly, bringing them to the mid-13% range for the full year.

“Our projections right now are sort of to continue the current pace with bodies and chassis, but we're, you know, seeing that product mix return back to historical levels. So as our distribution base demands more chassis to integrate with their bodies. We're going to see an uptick in that chassis revenue, which will probably affect margins slightly.”

asked by Michael Schleske · answered by William Miller

2 min read 6 chapters

Detailed narrative

Q2 Financial Performance Highlights

Miller Industries reported Q2 FY26 revenue of $240 million, marking a 12.1% year-over-year increase and a 32.7% sequential rise. Gross profit reached $35.9 million, representing 15% of sales, driven by operational efficiencies and disciplined labor cost management. Net income for the quarter was $7.3 million, with diluted EPS of $0.63, a significant improvement from $0.05 in Q1 FY26.

The company noted that product mix, returning to a more normalized balance of chassis and body, impacted gross profit.

Balance Sheet Strength and Capital Allocation

The company ended Q2 FY26 with a cash balance of $55.6 million, an increase of $2.6 million from the prior quarter. Debt was reduced by an additional $20 million during the quarter, enhancing financial flexibility. Miller Industries returned $4.9 million to shareholders through $2.5 million in share repurchases and dividends.

The company has approximately $11.5 million remaining under its current share repurchase authorization and has paid dividends for 63 consecutive quarters, emphasizing a balanced approach to capital deployment.

OMARs Acquisition Integration

Integration of the OMARs acquisition is progressing smoothly, with management confident it will be accretive in its first year after accounting for transaction expenses. The majority of these expenses have now been recognized, with a $0.11 per share impact on Q2 FY26 EPS, following a $0.13 impact in Q1.

Remaining expenses for the year are anticipated to be minimal, estimated at $0.04 to $0.05 per share.

Domestic Market Conditions

Despite geopolitical tensions and elevated fuel prices, the domestic market is experiencing stable retail demand and distributor inventory levels, which remain at historical averages. However, consumer confidence is not high, leading to flat production levels and retail activity. Management does not anticipate significant improvement until external factors like Middle East issues and fuel prices stabilize, indicating a steady state without immediate growth drivers.

International Business and Military Contracts

International and export business backlogs remain consistent, with facilities operating at a steady production pace. The €8 million GIGER expansion in France is on track for mid-2027 completion and is expected to drive global initiatives. Military commitments have surpassed $200 million, with production scheduled to begin in 2027 and the majority of revenue recognition anticipated in 2028 and 2029, positioning this segment as a significant future growth driver.

Manufacturing Capacity Expansion

Miller Industries is expanding its manufacturing capacity with a new 200,000-plus square foot facility. Site preparation is concluding, and construction is slated to begin in Q4 2026, with production readiness targeted for late 2027. This expansion aims to support global high-volume defense-grade recovery vehicles and increased export demand, while incorporating advanced manufacturing technology to enhance efficiency.

The project is expected to be funded organically through strong cash flow generation.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.