Miller Industries, manufacturers of multiple brands of wrecker bodies, posted sales of $107.4 million during the third quarter, up 20% from the corresponding period in 2005.
Third quarter 2006 net income rose 23.3% to $6.7 million, or $0.58 per diluted share, compared with third quarter 2005 net income of $5.4 million, or $0.47 per diluted share, which included a loss from discontinued operations of $(30,000), or $(0.00) per diluted share.
Costs of operations for the third quarter of 2006 were $92.2 million, compared to $76.1 million in the prior year period. Gross profit for the third quarter of 2006 rose to $15.1 million from $13.4 million in the third quarter of 2005. As a percentage of net sales, gross margin was 14.1% in the third quarter of 2006, compared to 15.0% in the prior year period. The decrease in gross margin over the prior year period is a reflection of changes in product mix, including increased chassis sales, as well as higher costs of aluminum, copper and petroleum-related products over the last year, partially offset by past pricing actions.
For the third quarter of 2006, selling, general and administrative expenses were $6.6 million compared to $6.2 million for the prior year period. As a percentage of net sales, selling, general and administrative expenses were 6.2% for the third quarter of 2006, compared to 6.9% in the prior year period.
For the 2006 third quarter, the company reported operating income (earnings before interest and taxes) of $8.5 million, or 7.9% of net sales, compared with $7.2 million for the third quarter of 2005, or 8.1% of net sales.
Interest expense for the company's continuing operations in the third quarter of 2006 was $851,000, compared to $853,000 in the third quarter of 2005. Total senior and junior debt at September 30, 2006, was approximately $13.3 million, down from $15.6 million at June 30, 2006, and $16.3 million at December 31, 2005.
For the nine-month period ended September 30, 2006, net sales rose 12.9% to $292.7 million compared to $259.3 million in the prior year period. For the first nine months of 2006, the Company reported net income of $18.1 million, or $1.56 per diluted share, compared to net income for the first nine months of 2005 of $12.6 million, or $1.10 per diluted share, which included a loss from discontinued operations of $(110,000), or $(0.01) per diluted share.
"We are pleased with our results in the third quarter, which saw net sales increase 20.0% and a 23.4% improvement in diluted earnings per share," stated Jeffrey Badgley, president and co-CEO. "We continued to see strong demand from our customers on both the commercial and government sides of our business. For example, we recently received an order for 133 small wreckers for the city of New York, as well as additional orders from DataPath for approximately 300 trailers. We expect to complete delivery on these new orders by the end of the 2007 second quarter. Our new product introductions have also produced strong results. We continue to feel price pressure from our suppliers for raw materials, including aluminum, copper and petroleum- related products. To offset these pressures, we recently announced a price increase of approximately 4%.
"We also made progress with our plant modernization program. We recently started operations at our new small wrecker plant, and we continue our work on the large wrecker facility as well. One of our best opportunities to improve margins exists in improving manufacturing efficiencies and controlling product costs, and we expect these improvements to contribute to our efforts in these areas over time. We are also extremely proud that we have been able to reduce debt while paying for the costs of the plant modernizations from cash flow. Going into the fourth quarter, backlog levels remain strong as we continue to see strong overall demand from our customer base.”
Miller Industries markets its towing and recovery equipment under a number of recognized brands, including Century, Vulcan, Chevron, Holmes, Challenger, Champion, Jige, Boniface and Eagle.