On August 5, Miller Industries (NYSE:MLR) reported second-quarter 2026 results that showed revenue climbing while profit slipped, a split scorecard for the towing and recovery equipment maker. Revenue reached $240 million, up 12.1% from $214 million in the same quarter of 2025, driven by steady production matched to order intake. Net income fell to $7.3 million from $8.5 million, and diluted EPS dropped to $0.63 from $0.73. The numbers set up a real tension for investors weighing top-line strength against bottom-line pressure.
Miller Industries backed up its growth with balance sheet moves that get less attention than headline revenue. The company cut total debt by $20 million during the second quarter of 2026, leaving no outstanding balance on its credit facility. That freed up cash for the business to keep funding its priorities without leaning on borrowed money. Strong cash generation also let Miller Industries return $4.9 million to shareholders during the quarter through dividends and share repurchases, including roughly $2.5 million spent buying back stock. The board approved a quarterly dividend of $0.21 per share, payable September 15, to shareholders of record as of September 8, marking the sixty-third consecutive quarter the company has paid a dividend.
The company is also betting on future demand. Miller Industries is building a new facility of more than 200,000 square feet at its Ooltewah, Tennessee headquarters, a roughly $100 million project the company plans to fund mostly through operating cash flow over the next several years. Management pointed to European demand, an expanding integration facility in France through its Jige unit, and military commitments now topping $200 million as reasons for the added capacity, with defense-grade vehicle production expected to begin in 2027 and ramp through 2028 and 2029. The company's Omars acquisition also delivered solid initial results, and management said it still expects the deal to be accretive within its first year.
The profit side of the report tells a tougher story. Gross margin slipped 120 basis points to 15% in the second quarter of 2026, even as gross profit inched up 3.9% to $35.9 million. SG&A expenses rose faster than revenue, up 7.6% to $25.2 million from $23.4 million a year earlier, and that cost growth helped push net income down 14.1% and diluted EPS down 13.7%. For a company posting double-digit revenue growth, a double-digit decline in earnings per share is the kind of gap investors tend to notice.
Part of that pressure traces back to the Omars acquisition itself. Miller Industries said non-cash acquisition-related expenses, tied to marking equipment to fair value and amortizing customer relationship intangibles, cut diluted EPS by about $0.11 per share in the quarter, with most of that expense recognized across the first and second quarters. Looking ahead, the company's own full-year 2026 guidance calls for gross margins to land in the mid-13% range, below the 15.0% posted in the second quarter, which suggests margin pressure is expected to continue rather than ease in the back half of the year.
Hedge fund ownership of Miller Industries fell from 16 funds in the prior quarter to 12 in the most recent one, a pullback that suggests some institutional holders trimmed their positions. Short interest sits at 4.86% of the float, enough to represent a real but not overwhelming bear camp. That combination does not point to one clear read on sentiment. Neither the crowd betting against Miller Industries nor the funds that stayed appear to be making an aggressive statement either way.
Miller Industries enters the second half of 2026 with reaffirmed guidance for $850 million to $900 million in revenue and earnings expected to land close to 2025 levels. The company's debt reduction, dividend streak, and expanding military and export opportunities give the bull case real substance. But margins compressing to 15.0% in the quarter, with management guiding to an even lower mid-13% range for the full year, leaves the bear case just as real. For the growth story to hold up, the Ooltewah expansion and military ramp need to convert into higher volume without further margin erosion.
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