MILLER INDUSTRIES INC /TN/

Previous wording

Our history of innovation in the towing and recovery industry has been an important factor behind our growth over the last decade and we believe that our continued emphasis on research and development will be a key factor in our future growth. We opened a free-standing research and development facility in Chattanooga in 2019, where we pursue various innovations in our products and manufacturing processes, some of which are intended to enhance the safety of our employees and reduce our environmental impact. Our investments in strategic and planned projects have contributed to our increased production capacity and optimized our manufacturing processes, including investing in component re-design capabilities that allow for more flexibility in our manufacturing and sourcing. In addition, our strategic investment in Southern Hydraulic Cylinder, Inc. in May 2023, allowed us to strengthen our efforts to enhance the stability of our supply chain. Our recent domestic plant expansion and modernization projects have installed sophisticated robotics systems and other advanced technologies to complement our talented workforce. The projects completed during the period from 2017 to 2021 were at a cost of over $82 million. As we continue to focus on modernization and operational excellence, we expect to continue to invest in robotics and automated material handling equipment across all our domestic manufacturing facilities.

Current wording

Our history of innovation in the towing and recovery industry has been an important factor behind our growth over the last decade and we believe that our continued emphasis on research and development will be a key factor in our future growth. We opened a free-standing research and development facility in Chattanooga, Tennessee in 2019, where we pursue various innovations in our products and manufacturing processes, some of which are intended to enhance the safety of our employees and reduce our environmental impact. Our investments in strategic and planned projects have contributed to our increased production capacity and optimized our manufacturing processes, including investing in component re-design capabilities that allow for more flexibility in our manufacturing and sourcing. In addition, our strategic investment in Southern Hydraulic Cylinder, Inc. in May 2023, allowed us to strengthen our efforts to enhance the stability of our supply chain. Our domestic plant expansion and modernization projects have installed sophisticated robotics systems and other advanced technologies to complement our talented workforce. The projects completed during the period from 2017 to 2021 were at a cost of over $82 million. As we continue to focus on modernization and operational excellence, we expect to continue to invest in robotics and automated material handling equipment across all our domestic manufacturing facilities.

Previous wording

Based on the productivity enhancements that we have implemented and improved supply chain conditions, our gross profit as a percentage of sales improved for the six months ended June 30, 2025, despite net sales and earnings being lower for the period. During the second quarter of 2025, our results continued to be affected by the high levels of chassis inventory in our distribution channel, as our distributors worked through the inventory buildup stemming primarily from inconsistent supplier delivery schedules throughout 2024. We continue to believe that chassis and body inventory levels are moving closer to optimal levels and that the flow of manufactured equipment and chassis deliveries will become more synchronized during the second half of 2025. However, at the end of the second quarter, and continuing into the third quarter, we experienced unexpected demand headwinds, which we believe are attributable to the continued high cost of equipment ownership in the current interest rate environment, escalating insurance costs for our customers, and the imposition of and ongoing

Current wording

Based on the productivity enhancements that we have implemented and improved supply chain conditions, our gross profit as a percentage of sales improved for the nine months ended September 30, 2025, despite net sales and earnings being lower for the period. During the third quarter of 2025, our results continued to be affected by the high levels of inventory in our distribution channel, as our distributors worked through the inventory buildup stemming primarily from inconsistent supplier delivery schedules throughout 2024. We continue to believe that chassis and body inventory levels are moving closer to historical levels and that the flow of manufactured equipment and chassis deliveries will become more aligned during the remainder of 2025. However, during the second and third quarters, we also experienced demand headwinds, including reduced retail sales and lower order intake, which we believe are attributable to the continued high cost of equipment ownership in the current interest rate environment, escalating insurance costs for our customers, and the imposition of and ongoing uncertainty involving tariffs. As a result of these challenges, during the third quarter of 2025, we continued to strategically decrease

Previous wording

uncertainty involving tariffs. As we assess these trends, we are closely monitoring production schedules and costs, and continue to work towards optimizing our channel inventory levels.

Current wording

production to reduce field inventory in our distribution channel, we implemented certain cost savings initiatives, and we continued to secure our supply chain to mitigate the long-term impacts of tariffs. These actions during the third quarter of 2025 included the implementation of a reduction in workforce, which we announced in August 2025, as part of our comprehensive cost reduction plan. Under this plan, we reduced our headcount by approximately 150 positions across three of our U.S. manufacturing facilities during the third quarter of 2025. As we continue to assess ongoing trends, we are closely monitoring production schedules and costs, and plan to continue to work towards returning our channel inventory to historical levels.

Previous wording

Our condensed consolidated financial statements are prepared in accordance with GAAP, which require us to make estimates. Certain accounting policies are deemed “critical”, as they require management’s highest degree of judgment, estimations, and assumptions. The accounting policies deemed to be most critical to our financial position and results of operations are those related to accounts receivable, inventory, long-lived assets, warranty reserves, revenues, and income taxes. There have been no significant changes in our critical accounting policies during the six months ended June 30, 2025, from the information provided under the heading “Critical Accounting Policies and Sensitive Accounting Estimates” in Part II, Item 7– “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024.

Current wording

Our condensed consolidated financial statements are prepared in accordance with GAAP, which require us to make estimates. Certain accounting policies are deemed “critical”, as they require management’s highest degree of judgment, estimations, and assumptions. The accounting policies deemed to be most critical to our financial position and results of operations are those related to accounts receivable, inventory, long-lived assets, warranty reserves, revenues, and income taxes. There have been no significant changes in our critical accounting policies during the nine months ended September 30, 2025, from the information provided under the heading “Critical Accounting Policies and Sensitive Accounting Estimates” in Part II, Item 7– “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024.

Previous wording

Net sales for the three months ended June 30, 2025 were $214.0 million compared to $371.5 million for the corresponding period in fiscal 2024, a decrease of 42.4%. The decrease in net sales was primarily due to a reduction of chassis deliveries to mitigate inventory buildup in our distribution channel.

Current wording

Net sales for the three months ended September 30, 2025 were $178.7 million compared to $314.3 million for the corresponding period in fiscal 2024, a decrease of 43.1%. The decrease in net sales was primarily due to a reduction of chassis deliveries and lower production levels to mitigate inventory buildup in our distribution channel.

Previous wording

Net foreign sales for the three months ended June 30, 2025 were $38.1 million compared to $30.8 million for the corresponding period in fiscal 2024, an increase of 23.9%.

Current wording

Net foreign sales for the three months ended September 30, 2025 were $30.6 million compared to $27.7 million for the corresponding period in fiscal 2024, an increase of 10.6%.

Previous wording

Cost of operations includes the direct cost of manufacturing, including direct materials, labor and related factory overhead, physical inventory adjustments, as well as inbound and outbound freight. Cost of operations for the three months ended June 30, 2025 was $179.4 million compared to $320.4 million for thecorresponding period in fiscal 2024, a decrease of 44.0%. The decrease in cost of operations was consistent with the decrease in sales.

Current wording

Cost of operations includes the direct cost of manufacturing, including direct materials, labor and related factory overhead, physical inventory adjustments, as well as inbound and outbound freight. Cost of operations for the three months ended September 30, 2025 was $153.3 million compared to $272.2 million for thecorresponding period in fiscal 2024, a decrease of 43.7%. The decrease in cost of operations was consistent with the decrease in sales.

Previous wording

Gross profit is equal to net sales less cost of operations. Gross profit for thethree months ended June 30, 2025 was $34.6 million compared to $51.1 million for thecorresponding period in fiscal 2024, a decrease of 32.3%. This decrease was primarily due to the anticipated decrease in sales. As a percentage of sales, gross profit was 16.2% for the three months ended June 30, 2025, compared to 13.8% in the corresponding period in fiscal 2024, an increase of 17.5%. The year over year increase was primarily due to a favorable product mix, which shifted from a higher percentage of chassis deliveries in the second quarter of 2024 to a higher percentage of bodies in the second quarter of 2025.

Current wording

Gross profit is equal to net sales less cost of operations. Gross profit for thethree months ended September 30, 2025 was $25.3 million compared to $42.0 million for thecorresponding period in fiscal 2024, a decrease of 39.7%. This decrease was primarily due to the decrease in sales. As a percentage of sales, gross profit was 14.2% for the three months ended September 30, 2025, compared to 13.4% in the corresponding period in fiscal 2024, an increase of 6.0%. The year-over-year increase was primarily due to a favorable product mix, which shifted from a higher percentage of chassis deliveries in the third quarter of 2024 to a higher percentage of units in the third quarter of 2025.

Previous wording

Interest expense, net for the three months ended June 30, 2025 was $0.3 million compared to $2.0 million for the corresponding period in fiscal 2024, a decrease of 85.6%. Interest expense as of June 30, 2025 of $2.1 million was consistent with the interest expense of $2.7 million for the comparable period in 2024, offset by increased interest income of $1.8 million for the three months ended June 30, 2025, compared to interest income of $0.7 million for the comparable period in 2024. The increase in interest income is due to increased billings on open accounts receivable balances.

Current wording

Interest expense, net for the three months ended September 30, 2025 was $0.1 million compared to $0.3 million for the corresponding period in fiscal 2024, a decrease of 63.0%. Interest expense for the three months ended September 30, 2025 was $1.4 million and $2.5 million for the comparable period in 2024, offset by interest income of $1.3 million for the three months ended September 30, 2025, compared to interest income of $2.2 million for the comparable period in 2024.

Previous wording

The Company is exposed to foreign currency transaction risks when the Company has transactions that are denominated in a currency other than its functional currency. When the related balance sheet items are remeasured in the functional currency of the Company, gains and losses are recorded through other (income) expense. Other (income) expense, net is composed primarily of these foreign currency exchange gains and losses. The Company experienced a net foreign currency exchange gain of $0.5 million and loss of $0.1 million for the three months ended June 30, 2025 and 2024, respectively. Other (income) expense for the three months ended June 30, 2025 was de minimis.

Current wording

The Company is exposed to foreign currency transaction risks when the Company has transactions that are denominated in a currency other than its functional currency. When the related balance sheet items are remeasured in the functional currency of the Company, gains and losses are recorded through other (income) expense. Other (income) expense, net is composed primarily of these foreign currency exchange gains and losses. The Company experienced a net foreign currency exchange loss of $0.2 million and gain of $0.3 million for the three months ended September 30, 2025 and 2024, respectively. Other (income) expense for the three months ended September 30, 2025 included gain on the sale of assets in the amount of $0.5 million.

Previous wording

The provision for income taxes for thethree months ended June 30, 2025 and 2024 reflects a combined federal, state, and foreign tax rate of 25.6%and 21.8%, respectively. The increase was primarily due to non-deductible executive compensation. The principal differences between the federal statutory tax rate and the effective tax rate consist primarily of state taxes, domestic tax credits, and tax differences on foreign earnings.

Current wording

The provision for income taxes for thethree months ended September 30, 2025 and 2024 reflects a combined federal, state, and foreign tax rate of 28.4%and 22.0%, respectively. The increase was primarily due to non-deductible executive compensation. The principal differences between the federal statutory tax rate and the effective tax rate consist primarily of state taxes, domestic tax credits, and tax differences on foreign earnings.

Previous wording

Net sales for the six months ended June 30, 2025 were $439.7 million compared to $721.3 million for the corresponding period in fiscal 2024, a decrease of 39.0%. The decrease in net sales was primarily due to a reduction of chassis deliveries to mitigate inventory buildup in our distribution channel.

Current wording

Net sales for the nine months ended September 30, 2025 were $618.4 million compared to $1.04 billion for the corresponding period in fiscal 2024, a decrease of 40.3%. The decrease in net sales was primarily due to a reduction of chassis deliveries and lower production levels to mitigate inventory buildup in our distribution channel.

Previous wording

Net foreign sales for the six months ended June 30, 2025 were $77.4 million compared to $62.1 million for the corresponding period in fiscal 2024, an increase of 24.7%.

Current wording

Net foreign sales for the nine months ended September 30, 2025 were $108.0 million compared to $89.8 million for the corresponding period in fiscal 2024, an increase of 20.3%.

Previous wording

Cost of operations includes the direct cost of manufacturing, including direct materials, labor and related factory overhead, physical inventory adjustments, as well as inbound and outbound freight. Cost of operations for the six months ended June 30, 2025 was $371.2 million compared to $626.0 million for thecorresponding period in fiscal 2024, a decrease of 40.7%. The decrease in cost of operations was consistent with the decrease in sales.

Current wording

Cost of operations includes the direct cost of manufacturing, including direct materials, labor and related factory overhead, physical inventory adjustments, as well as inbound and outbound freight. Cost of operations for the nine months ended September 30, 2025 was $524.5 million compared to $898.2 million for thecorresponding period in fiscal 2024, a decrease of 41.6%. The decrease in cost of operations was consistent with the decrease in sales.

Previous wording

Gross profit is equal to net sales less cost of operations. Gross profit for the six months ended June 30, 2025 was $68.5 million compared to $95.3 million for thecorresponding period in fiscal 2024, a decrease of 28.1%. This decrease was primarily due to the anticipated decrease in sales. As a percentage of sales, gross profit was 15.6% for the six months ended June 30, 2025, compared to 13.2% in the corresponding period in fiscal 2024, an increase of 17.9%. The year over year increase was primarily due to a favorable product mix, which shifted from a higher percentage of chassis deliveries in the first half of 2024 to a higher percentage of bodies in the first half of 2025.

Current wording

Gross profit is equal to net sales less cost of operations. Gross profit for the nine months ended September 30, 2025 was $93.9 million compared to $137.3 million for thecorresponding period in fiscal 2024, a decrease of 31.7%. This decrease was primarily due to the decrease in sales. As a percentage of sales, gross profit was 15.2% for the nine months ended September 30, 2025, compared to 13.3% in the corresponding period in fiscal 2024, an increase of 14.5%. The year-over-year increase was primarily due to a favorable product mix, which shifted from a higher percentage of chassis deliveries throughout 2024 to a higher percentage of units throughout 2025.

Previous wording

Selling, general and administrative expenses for the three months ended June 30, 2025 were $23.4 million compared to $22.8 million for the corresponding period in fiscal 2024, an increase of 2.8%. As a percentage of net sales, selling, general and administrative expenses increased to 10.9% for the three months ended June 30, 2025, from 6.1% for the comparable period in fiscal 2024. The increase for the second quarter of 2025 was primarily due to higher stock-based compensation expense relating to prior period restricted stock unit grants and higher employee compensation and training costs.

Current wording

Selling, general and administrative expenses for the nine months ended September 30, 2025 were $67.9 million compared to $66.6 million for the corresponding period in fiscal 2024, an increase of 1.9%. As a percentage of net sales, selling, general and administrative expenses increased to 11.0% for the nine months ended September 30, 2025, from 6.4% for the comparable period in fiscal 2024. The increase was primarily due to higher stock-based compensation expense relating to prior year restricted stock unit grants and higher compensation expense and incentives for all employees to improve employee retention. This increase was partially offset by lower executive bonus expense for the current period.

Previous wording

Interest expense, net for the six months ended June 30, 2025 was $0.4 million compared to $3.3 million for the corresponding period in fiscal 2024, a decrease of 88.2%. Interest expense for the six months ended June 30, 2025 of $4.5 million was consistent with the interest expense of $4.9 million for the comparable period in 2024, offset by increased interest income of $4.1 million for the six months ended June 30, 2025, compared to interest income of $1.6 million for the comparable period in 2024. The increase in interest income is due to increased interest billings on open accounts receivable balances from customers.

Current wording

Interest expense, net for the nine months ended September 30, 2025 was $0.5 million compared to $3.5 million for the corresponding period in fiscal 2024, a decrease of 86.4%. Interest expense for the nine months ended September 30, 2025 was $5.9 million and $7.4 million for the comparable period in 2024, offset by increased interest income of $5.4 million for the nine months ended September 30, 2025, compared to interest income of $3.9 million for the comparable period in 2024. The increase in interest income is due to increased interest billings on open accounts receivable balances from customers.

Previous wording

The Company is exposed to foreign currency transaction risks when the Company has transactions that are denominated in a currency other than its functional currency. When the related balance sheet items are remeasured in the functional currency of the Company, gains and losses are recorded through other (income) expense. Other (income) expense, net is composed primarily of these foreign currency exchange gains and losses. The Company experienced a net foreign currency exchange gain of $0.7 million and loss of $0.2 million for the six months ended June 30, 2025 and 2024, respectively. Other (income) expense for the six months ended June 30, 2025 was de minimis.

Current wording

The Company is exposed to foreign currency transaction risks when the Company has transactions that are denominated in a currency other than its functional currency. When the related balance sheet items are remeasured in the functional currency of the Company, gains and losses are recorded through other (income) expense. Other (income) expense, net is composed primarily of these foreign currency exchange gains and losses. The Company experienced a net foreign currency exchange gain of $0.5 million and gain of $0.2 million for the nine months ended September 30, 2025 and 2024, respectively. Other (income) expense for the nine months ended September 30, 2025 also included gain on the sale of assets in the amount of $0.5 million.

Previous wording

The provision for income taxes for the six months ended June 30, 2025 and 2024 reflects a combined federal, state, and foreign tax rate of 25.4%and 21.4%, respectively. The increase was primarily due to non-deductible executive compensation. The principal differences between the federal statutory tax rate and the effective tax rate consist primarily of state taxes, domestic tax credits, and tax differences on foreign earnings.

Current wording

The provision for income taxes for the nine months ended September 30, 2025 and 2024 reflects a combined federal, state, and foreign tax rate of 25.9%and 21.5%, respectively. The increase was primarily due to non-deductible executive compensation. The principal differences between the federal statutory tax rate and the effective tax rate consist primarily of state taxes, domestic tax credits, and tax differences on foreign earnings.

Previous wording

As of June 30, 2025, we had cash and temporary investments of $31.8 million, and $45.0 million in availability for borrowing under our credit facility. Our primary cash requirements include working capital, capital expenditures, the funding of any declared cash dividends, purchases pursuant to our stock repurchase program, and principal and interest payments on indebtedness.

Current wording

As of September 30, 2025, we had cash and temporary investments of $38.4 million, and $55.0 million in availability for borrowing under our credit facility. Our primary cash requirements include working capital, capital expenditures, the funding of any declared cash dividends, purchases pursuant to our stock repurchase program, and principal and interest payments on indebtedness.

Previous wording

The cash and temporary investments balance as of June 30, 2025 included $23.1 million of cash held by subsidiaries outside of the United States.

Current wording

The cash and temporary investments balance as of September 30, 2025 included $24.6 million of cash held by subsidiaries outside of the United States.

Previous wording

During the six months ended June 30, 2025, net cash provided by operating activities was $30.0 million compared to net cash used in operating activities of $1.7 million in the comparable period in fiscal 2024. Cash provided by operating activities is generally attributable to the receipt of payments from our customers as settlement of their contractual obligation, once we have fulfilled all performance obligations related to our contracts with them. These cash receipts are netted with payments for purchases of inventory, payments for materials used in manufacturing, and other payments that are necessary in the ordinary course of our operations, such as those for utilities and taxes. The cash provided by operating activities was primarily driven by net income, non-cash expenses, and net positive change in working capital.

Current wording

During the nine months ended September 30, 2025, net cash provided by operating activities was $49.9 million compared to net cash provided by operating activities of $28.6 million in the comparable period in fiscal 2024. Cash provided by operating activities is generally attributable to the receipt of payments from our customers as settlement of their contractual obligation, once we have fulfilled all performance obligations related to our contracts with them. These cash receipts are netted with payments for purchases of inventory, payments for materials used in manufacturing, and other payments that are necessary in the ordinary course of our operations, such as those for utilities and taxes. The cash provided by operating activities was primarily driven by net income, non-cash expenses, and net positive change in working capital.

Previous wording

During the six months ended June 30, 2025, cash used in investing activities was $6.8 million compared to cash used in investing activities of $7.7 million for the comparable period in fiscal 2024. The cash used in investing activities was primarily for purchases of property, plant and equipment, as well as our continued investment in manufacturing automation and ERP system enhancements.

Current wording

During the nine months ended September 30, 2025, cash used in investing activities was $7.3 million compared to cash used in investing activities of $14.0 million for the comparable period in fiscal 2024. The cash used in investing activities was primarily for purchases of property, plant and equipment, as well as our continued investment in manufacturing automation and enterprise resource planning (ERP) system enhancements, offset by proceeds from the sale of assets.

Previous wording

During the six months ended June 30, 2025, cash used in financing activities was $17.2 million compared to cash provided by financing activities of $3.6 million for the comparable period in fiscal 2024. The cash used in financing activities was primarily due to payments on the credit facility, cash payments for dividends, and repurchases of common stock.

Current wording

During the nine months ended September 30, 2025, cash used in financing activities was $30.6 million compared to cash used in financing activities of $4.4 million for the comparable period in fiscal 2024. The cash used in financing activities was primarily due to payments on the credit facility, cash payments for dividends, and repurchases of common stock.

Previous wording

As of June 30, 2025 and December 31, 2024, we had commitments of approximately $9.0 million and $14.2 million, respectively, for the acquisition of property, plant and equipment. This decrease in commitments for acquisition of property, plant and equipment was due to our continued investments in automation and the use of robotics in our production processes to streamline efficiency. There have been no other material changes to our contractual obligations from what was previously disclosed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024.

Current wording

As of September 30, 2025 and December 31, 2024, we had commitments of approximately $15.5 million and $14.2 million, respectively, for the acquisition of property, plant and equipment. As of December 31, 2024, the Company had commitments related to the ERP implementation project of approximately $0.5 million. This increase in commitments for acquisition of property, plant and equipment was due to our continued investments in automation and the use of robotics in our production processes to streamline efficiency. There have been

Previous wording

The Company had outstanding borrowings of $55.0 million and $65.0 million under the credit facility as of June 30, 2025 and December 31, 2024, respectively. See the disclosure under the heading “Credit Facility” in Note 4 of the Notes to Condensed Consolidated Financial Statements in this Quarterly Report on Form 10-Q for additional information regarding the Company’s credit facility.

Current wording

The Company had outstanding borrowings of $45.0 million and $65.0 million under the credit facility as of September 30, 2025 and December 31, 2024, respectively. See the disclosure under the heading “Credit Facility” in Note 4 of the Notes to Condensed Consolidated Financial Statements in this Quarterly Report on Form 10-Q for additional information regarding the Company’s credit facility.

Previous wording

As of July 31, 2025, the outstanding balance on our credit facility was $50.0 million.

Current wording

As of October 31, 2025, the outstanding balance on our credit facility was $35.0 million.

Previous wording

Prior to applying a discount rate to our lease liabilities, we had approximately $0.5 million and $0.6 million in non-cancellable operating lease obligations as of June 30, 2025 and December 31, 2024, respectively. We had no non-cancellable finance lease obligations as of June 30, 2025 and December 31, 2024.

Current wording

Prior to applying a discount rate to our lease liabilities, we had approximately $0.4 million and $0.6 million in non-cancellable operating lease obligations as of September 30, 2025 and December 31, 2024, respectively. We had no non-cancellable finance lease obligations as of September 30, 2025 and December 31, 2024.

Previous wording

Capital expenditures during the six months ended June 30, 2025 and 2024 were $6.8 million and $7.8 million, respectively. We make ongoing capital investments in our property, plant and equipment to increase our production capacity and the efficiencies, as well as the sustainability and safety of our operations. This includes capital investments during the six months ended June 30, 2025 in the use of robotics and automation in our production processes to streamline efficiency.

Current wording

Capital expenditures during the nine months ended September 30, 2025 and 2024 were $8.6 million and $14.1 million, respectively. We make ongoing capital investments in our property, plant and equipment to increase our production capacity and efficiencies, as well as the sustainability and safety of our operations. This includes capital investments during the nine months ended September 30, 2025 in the use of robotics and automation in our production processes to streamline efficiency.