Good day, ladies and gentlemen, and welcome to the Miller Industries Second Quarter 2018 Results Conference Call. Please note this event is being recorded. And now, at this time, I would like to turn the call over to Ben Herskowitz at FTI Consulting. Please go ahead, sir.

Thank you, and good morning everyone. I would like to welcome you to the Miller Industries Conference Call. We are here to discuss the company's 2018 second quarter results which were released after the close of market yesterday. With us from the management team today are Bill Miller, Chairman of the Board; Jeff Badgley, Co-CEO; Will Miller, President and Co-CEO; Debbie Whitmire, Executive Vice President and CFO; and Frank Madonia, Executive Vice President, Secretary and General Counsel. Today's call will begin with formal remarks from management followed by a question-and-answer period. Please note, in this morning's conference call management may make forward-looking statements in accordance with the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. I'd 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'd like to turn the call over to Jeff. Please go ahead, Jeff.

Thank you and good morning. We are pleased to discuss our second quarter results with you today. This was another strong quarter for Miller Industries as we achieved solid topline growth and gross margin expansion. We continue to increase our profitability through careful cost management and increases in production due to our disciplined execution of our plant consolidation and expansion efforts. Our commitment to operational excellence continues to pay-off as evidenced by our 20.9% increase in gross profit, and our 40.1% increase in net income as compared to the second quarter of 2017. Results this quarter were driven by continued strong demand in both our domestic and international markets. We recorded 2018 second quarter sales of $176.9 million, an increase of 15.5% compared to $153.1 million in the prior year period. Net income was $7.6 million or $0.67 per share compared to net income of $5.4 million or $0.48 per share in the 2017 second quarter. Gross profit as a percentage of total sales this quarter was 12%, up from 11.5% in the second quarter of 2017. Concurrently, selling, general and administrative expenses decreased 40 basis points as a percentage of total sales to 5.5%. As of June 30, our plant expansion and consolidation efforts are substantially complete which has increased efficiency and boosted production levels allowing us to meet increased customer demand. Our balance sheet remains healthy and we continue to strategically deploy our resources to drive organic growth. We remain confident in our competitive position and our financial outlook. Now I'll turn the call over to Debbie who will review the second quarter financial results. After that, I will be back with comments on the market environment and some closing remarks.

Thanks, Jeff and good morning everyone. Net sales for the 2018 second quarter were $176.9 million versus $153.1 million for the 2017 second quarter, a 15.5% increase. Cost of operations increased 14.9% to $155.6 million for the 2018 second quarter compared to $135.5 million for the 2017 second quarter, reflecting increased costs associated with higher demand. Gross profit was $21.3 million or 12% of net sales for the 2018 second quarter compared to $17.6 million or 11.5% of net sales for the 2017 second quarter. SG&A expenses were $9.7 million for the 2018 second quarter compared to $9.1 million for the 2017 second quarter. As a percentage of sales SG&A decreased to 5.5% from 5.9% in the prior year period. Other income expense net for the 2018 second quarter was an expense of $627,000 compared to other income of $470,000 for the 2017 second quarter, primarily reflecting unfavorable currency translation. Interest expense for the 2018 second quarter was $484,000 compared to $315,000 for the 2017 second quarter. These are decreases in net foreign interest income and increases in floor planning cost and borrowings under the credit facility. Net income for the 2018 second quarter was $7.6 million or $0.67 per diluted share. Net income for the 2017 second quarter was $5.4 million or $0.48 per diluted share. Now turning to our balance sheet. Cash and cash equivalents as of June 30, 2018, were $19.7 million compared $15.1 million as of March 31, 2018, and $21.9 million at December 31, 2017. Accounts receivable at June 30, 2018, totaled $148 million compared to $136.7 million as of March 31, 2018, and $132.7 million at December 31, 2017. Inventories were $81.2 million as of June 30, 2018, compared to $77.7 million as of March 31, 2018, and $68.6 million at December 31, 2017. Accounts payable at June 30, 2018, were $92 million compared to $82.7 million as of March 31, 2018, and $79.3 million at December 31, 2017. As of June 30, 2018, we have borrowed $15 million under our $50 million unsecured revolving credit facility to help fund our capital projects and working capital needs as we work to meet customer demand. The company also announced that it's Board of Directors approved our quarterly cash dividend of $0.18 per share payable September 17, 2018, to shareholders of record at the close of business on September 10, 2018. Now I'll turn the call back to Jeff for further comments.

Thank you, Debbie. Our performance this quarter was very encouraging as the effects of our capital projects allow us to better lead increasing demand which has resulted in strong sales growth and increased profitability. We have enhanced our operational efficiency and minimized our operational complexity while simultaneously increasing our production capacity. These factors combined with continued favorable macro trends globally bode well for our company's outlook for the remainder of this year. As always, disciplined balance sheet management and capital deployment continue to remain central to our strategy as we strive to maximize shareholder value. To underscore our commitment to returning shareholder value, we have declared our quarterly dividend of $0.18 per share. Lastly, while our growth in profitability is yet to be affected, we will continue to monitor current discussions related to tariffs on steel and aluminum in order to determine the impact they may have on our raw material cost in the future. While we are concerned about the potential impact of any tariffs and remain in constant communication with our customers and suppliers, it is still too early to make any meaningful assessment. In closing, I'd like to thank our employees, shareholders, suppliers and customers for their ongoing support of Miller Industries. With that, we're ready to take your questions.

[Operator Instructions] We'll take our first question from James Lee with Potrero.

I have a question about capital expenditures, I bet your plans have been completed; how should we get value about your annual capital expenditure going forward?

Our plans in the U.S. are certainly complete, we would -- we are looking at our backlogs in our European facility and as of yet have not determined if any further CapEx will need to take place there but historically in the past, our CapEx has somewhat land in alignment with our depreciation.

[Operator Instructions] And we have no further phone questions. I'd like to turn the call back to management for any additional or closing remarks.

Well, we certainly would like to thank you for joining our call today. And we look forward to speaking with you to report our third quarter results in the future. Have a good afternoon. Bye.

And with that, ladies and gentlemen, that concludes today's conference call. We'd like to thank you again for your participation. You may now disconnect.