Hello, this is the Chorus Call operator. Welcome to the Miller Industries First Quarter 2012 Results Conference Call. [Operator Instructions] Please note, this event is being recorded. At this time, I would like to turn the conference over to Alexandra Tramont. Ms. Tramont, go ahead.

Thank you. Good morning, everyone. I would like to welcome you to the Miller Industries conference call. We are here to discuss the company's 2012 first quarter results which were released after the close of the market yesterday. With us from management today are Bill Miller, Chairman of the Board; Jeff Badgley, CEO; Vince Mish, CFO; Frank Madonia, General Counsel; and Allison Houghton, Director of Finance. Today's call will begin with formal remarks from management, followed by a question-and-answer period. Please note that in this morning's call, management may make forward-looking statements in accordance with the Safe Harbor Provision of the Private Securities Litigation Reform Act of 1995. I would 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 would like to turn the call over to Jeff Badgley. Jeff, please go ahead.

Thank you, and good morning. Overall, we are pleased with our results in the first quarter of this year and encouraged by many of the trends we are seeing in our markets. Yesterday, we reported 2012 first quarter sales of $95 million, compared to sales of $108.9 million in the prior-year period. As we noted in the press release, this decrease reflected a large U.S. government-related order in the year-ago period that did not repeat and represented approximately 42% of our total sales in the 2011 first quarter. Excluding the government order, we achieved nearly 50% of revenue growth year-over-year, reflecting strengthening demand for our commercial products across both our core domestic and in some European markets. A shift in sales mix to commercial products which typically include a greater level of chassis sales also affected our gross margins for the period. I am encouraged by some of the trends in our markets. We are seeing stronger demand in our domestic markets year-over-year and sentiment among our customers appears to be gradually improving. We continued to see stronger conditions in our European markets, particularly in the U.K., as we seek out new distribution channels across Europe. While general European macro conditions remain challenging, we believe there are good opportunities for growth in this region as we execute on our geographic expansion initiatives. Now I'll turn the call over to Vince who will review the financial results. After that, I'll be back with some more comments then we'll open the line for questions. Vince? J. Mish: Thanks, Jeff. And good morning, everyone. As Jeff mentioned, net sales for the first quarter of 2012 were $95.0 million versus $108.9 million in the 2011 first quarter. Sales were down approximately 13% year-over-year, reflecting the large government order we filled a year ago which did not repeat, offset somewhat by increasing demand in our commercial markets. Cost of operations decreased by about 5% to $84.1 million in the 2012 first quarter compared to $88.2 million last year driven by the lower volumes. Gross profit was $10.9 million or 11.5% of net sales in the first quarter of 2012 compared to $20.7 million or 19% of net sales in the fourth quarter of 2010 -- 2011. The decrease in gross margin percentage resulted from the change in sales mix that Jeff highlighted. SG&A expense decreased 14% over the prior year to $7.0 million. As a percentage of sales, SG&A decreased to 7.4% from 7.5% over the prior-year period. Other income related to foreign currency transactions was a net loss of $336,000 in the first quarter of 2012 compared to breakeven in the first quarter of 2011. Interest expense in the 2012 first quarter was $217,000 compared to interest expense of $146,000 in the first quarter of 2011. The increase reflects higher interest expense on chassis and distributor floor plan financing. Net income was $2.0 million, $0.18 per diluted share, compared to the $7.4 million, or $0.61 per diluted share, for the 2011 first quarter. Turning now to our balance sheet. We continue to operate from a position of financial strength. We had cash and cash equivalents of $37.6 million as of March 31, 2012 compared to $50.2 million as of December 31, 2011 and $39.1 million at March 31, 2011. Cash declined from fourth quarter levels due to increases in receivables and inventories, particularly demonstrator units for the annual Florida Tow Show. Accounts receivable at March 31, 2012, totaled $74.3 million compared to $61.1 million as of December 31, 2011 and $84.4 million at March 31, 2011. Inventories were $52.4 million at March 31, 2012 compared to $48.2 million at December 31, 2011 and $53.4 million at March 31, 2011. Inventories were higher as we rolled out several new products for display at the Florida Tow Show. Accounts payable on March 31, 2012 were $46.1 million compared to $39.4 million at December 31, 2011 and $50.3 million at March 31, 2011. During the quarter, the company did not borrow against its $25 million unsecured revolving credit facility. Now I'll turn the call back to Jeff for further remarks.

Thank you, Vince. I'm very pleased with our team's performance this quarter as they have continued to demonstrate both the strength and agility of our business and our commitment to innovation. We are continually researching and developing new products to meet our customers' needs, and many of our innovative products for the commercial market went on display at last month's annual Florida Tow Show. As a result of the dedicated efforts of our production team, we produced 33 demonstrator units during the quarter, in addition to our first quarter production for display. We are pleased by the response at the show as evidenced by the sale of all our units, and we were encouraged by the strong interest that our products generated. Additionally, as I mentioned, we are starting to see demand return to our markets in Europe, highlighted by improved performance in the U.K. While demand levels remained below more normal levels, we are encouraged by the increase in activity in this region, and we'll continue to go after new business in Europe and seek out avenues to expand our reach there. As it relates to the French military order, we continue to make progress. We remain in the testing phase with a prime contractor and end user. And although final timing still remains uncertain, we are pleased with the progress to date. Our geographic expansion strategy will also take us to areas in the Asia-Pacific and other regions where we continue to look for opportunities. We also remain aggressive in bidding for government orders going forward. We continue to work on several tenders worldwide and are encouraged with their progress thus far. We believe our industry-leading product offering and manufacturing capability positions us well to continue succeeding in this area as opportunities arise. With our production transitioning from repetitive nature of governmental orders of recent years to a predominantly commercial mix of business this quarter, we have seen an impact on working capital levels. In addition, we continue to pursue strategies to take advantage of our recent investments made in our processes and facilities. These strategies include in-sourcing services such as installation of small wreckers and carriers and expansion of the painting services that we offer. We also look to take better advantage of our production capacity in the U.S. in order to grow our European market share. While these strategies will have long-term positive profitability impacts on our business, in the near term, as we are successful in these endeavors, they would require working capital investments. Although short-term demand levels remain volatile, we are optimistic that our offering will result in slow but steady sales growth. Our margins will continue to reflect the shift in our sales mix towards our commercial customers, which includes more chassis sales. We remain confident that our industry-leading product offering will support our ability to capture market demand in the coming quarters. At the same time, we will continue to review our cost base and take steps to further increase efficiencies and align costs with the current operating environment. Overall, we're looking forward to a solid performance in 2012 within the context of the current operating environment. And we remain committed to leveraging our strong financial position to further invest in our business and return value to our shareholders. In closing, I would like to thank our employees, our shareholders, suppliers, our customers for their ongoing support of Miller Industries. With that, we are ready to take your questions.

[Operator Instructions] Our first question comes from David Cohen of Midwood Capital.

One clarifying question. Were there any government units shipped in the quarter? I know you mentioned no orders and production was completed during Q4, but were there any shipments that hit in Q1? J. Mish: This is Vince. There are some government shipments, yes. We had some ongoing service parts orders and such.

Yes, David, we do. We have a GSA contract which technically would be considered government orders. And through the quarter, we produced an insignificant amount of those units. Basically, really I think what the company is saying in our comments in the press release that this is a -- the sales level reflects commercial environment, not any great amount of governmental orders.

Okay. And then maybe you could just explain better, I know you distributed to sort of more commercial terms, but the degree to which your -- on a year-over-year and sequential revenue decline, you did have at least sequentially a meaningful increase in your net working capital, both in inventory, particularly finished goods which I guess is a lot of that demo units. And then in particular, on accounts receivable which is up like $13 million sequentially versus last quarter's end. Maybe you could explain sort of what the dynamic is there and how much of that is likely to come back to you through the year?

I think it's, if -- and David, I think you started following the company after we added another military business, but obviously the shift from a repetitive nature of the military business with payments within 45 days is a little different than our everyday Commercial business, especially when we look at heavy duties. You've been here. You saw our installation facility. When that heavy duty chassis leaves our facility for paint after partial install, it is in fact, invoiced to the distributors. So it goes to paint -- it goes into paint queue, right? Because the paint is off-site. Then it comes back for dress out. And then delivered to the distributor who then collects. Now after we finished the military contract, we raised production on heavy duties. So we're tying up more capital in inventory and also more capital in receivables. Overtime, that will smooth out. But I think historically, we have always told people, I know, historically we have always told people that to grow, it will take working capital. Also when you look at our European endeavors, David, as we switch and attempt to build and fill capacity in the U.S. to gain more profitability than building it in Europe, once we build it, even when we build it for our plants, obviously, in Europe, it's going to spend 4 weeks or so on the water, right? So your -- as we become more successful in Europe, your inventory, obviously, is going to climb and a lot of that time is spent just in transporting the product efficiently. J. Mish: Can I throw just one thing in quick. You also noticed that the payables are up. I mean, we do get extended terms from our chassis suppliers and we do offer those extended terms also to our customers. So chassis sales and volumes up, that has an impact on receivables and inventory and payables.

[Operator Instructions] Our next question comes from Rob Schwartz of Cooper Creek Partners.

Just wanted some further clarity on the margin drop. I guess, given the large increase in your Commercial business, I was surprised of the extent of the gross margins, I guess they're about what, 400, 450 [ph] basis points below last year, slight below estimates, if you could just talk about that and expectations over the next few quarters there?

Yes. Well, let's start with the last word you said, estimates. We truly don't have anybody following our company from an analyst standpoint. We don't talk to analysts. But now let's talk about the margin drop. Obviously, when you're building military units and not providing chassis for those military units, you are only reflecting margin on manufactured items. When you shift back into a regular commercial business and start selling chassis again, it has an impact based on the level of chassis-to-unit sales mix. And that really from the standpoint of margin percentage is shown in the financials. So more chassis you sell, the more impact it has on the reported margin.

All right. So should that smooth out over the next few quarters? Or is that based to the margin run rate, assuming there's no military business in the mix?

Yes, I would say -- I mean, just -- although we don't report chassis sales separately, I would say on this call that the first quarter of this year, I we think, we had what I would call over-budget in my mind, chassis sales, especially the first 2 months. So yes, it should smooth out and increase somewhat in coming quarters. But when I see chassis sales going up, I see that as a positive because chassis purchased by our distributors indicate -- it's kind of a leading indicator to me of understanding that they're going to need those chassis on a go forward basis.

Right. So how many basis points you think it impacted you this quarter? Do you think it was half the decrease? I mean, did it impact you 100, 200 basis points or is it less significant than that? J. Mish: Well, I wouldn't -- I mean, we do not focus on the margin percentage quarter-to-quarter. We, I mean -- chassis is a great thing for us to sell. We don't have to do much to it. We make some margin out of it, not much because we are not adding a lot of value to that. But we do get our normal manufactured margins on the wrecker and carrier bodies that we make and it's a good mix from that standpoint. So we don't focus on that gross total margin thing as much. We're happy to sell the chassis like Jeff said. And they are an indicator that people are going to buy the wrecker and carrier products as well.

Okay. And then just one more, 2 more questions actually. In terms of the $0.18-quarter, so you would say that's not a good run rate for the rest of the year. I guess, margins are improving, that number should improve as we move forward throughout the year. J. Mish: Well, we -- again, as Jeff mentioned, we don't give expectations and all that. So I mean that we're going to do the best we can. The other thing I will say though is that in that $0.18, there's a $336,000 currency number that's not a real expense. I mean, that's $0.02 after-tax. So it's a little better than that from a standpoint of what our operations were. There's just a currency translation in that as well. But we're going to do the best we can for the year. And things seem to be picking up.

Okay, great. And then last question is just, you have been an aggressive buyer of your stock, about 6, 9 months ago. And right now, you don't have a repurchase authorization. Can you talk about your plans going forward in terms of capital allocation? J. Mish: Well, we're -- we'll see what the Board wants to do. We still got a fair amount of cash. But as Jeff mentioned, we're -- we need that cash as we're expanding globally as well.

This is Bill. I think that's up to the Board. And we'll clearly look at our cash use of funds at the next Board meeting.

Okay, sounds good. And last question, do you know when -- we've been talking about the opportunity of military side from the French military for a while, any more color you can give us in terms of potential time here, if there's an opportunity that could add to the second half or fourth quarter of 2012?

Well, I would believe that testing will take the majority of 2012. So I really don't see any major impact this year, but see some payoffs. And again, I don't -- I'm not trying to be a fortuneteller, but I would see that happening early next year.

This concludes our question-and-answer session. I would like to turn the conference back over to management for closing remarks.

Well, we certainly thank everyone for joining our conference call. And we look forward to talking to you about our next quarter's results. Thank you very much.

This concludes today's event. Thank you for attending today's presentation. You may now disconnect.