Good day, ladies and gentlemen, and welcome to the Miller Industries Fourth Quarter and Full Year 2022 Results Conference Call. Please note this event is being recorded. And now at this time, I would like to turn the call over to Mike Gaudreau 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 2022 fourth quarter and full year results, which were released after the close of the market yesterday. With us from the management team today are Bill Miller, Chairman of the Board; Will Miller, President and CEO; Jeff Badgley, President of International and Military; Debbie Whitmire, Executive Vice President and CFO; Frank Madonia, Executive Vice President, Secretary and General Counsel; Vince Tiano, Chief Revenue Officer; and Jamison Linden, Chief Manufacturing Officer. Today's call will begin with formal remarks from management, followed by a question-and-answer session. 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 formally described in the company's annual report filed on Form 10-K and other filings with the Securities and Exchange Commission. I would also like to inform you that Miller Industries intends to file a proxy statement and related proxy materials with the SEC in connection with the company's upcoming 2023 Annual Meeting of Shareholders and in connection with this annual meeting, the company, its directors and certain of its executive officers are participants in the solicitation of proxies from its shareholders. Shareholders of Miller Industries are strongly encouraged to read the definitive proxy statement and all other related materials filed with the SEC carefully and in their entirety when they become available as they will contain important information about the 2023 Annual Meeting. On today's call, we will be limiting our discussion to quarterly results. At this time, I'd like to turn the call over to Will. Please go ahead Will.

Thank you and good morning everyone. I'd like to start off by saying that we've recognized particularly over the last few quarters that the performance of the business is not very well understood by the Street. In an effort to remedy this, we are committed to continuing to maximize shareholder value and help investors better understand the underlying dynamics of our business, so they can better assess our financial performance and outlook. That said, we were very pleased with our fourth quarter results that were ahead of internal expectations closing out 2022 on a strong note despite a year of persistent supply chain challenges. Sales in the quarter increased 12% year-over-year and 9.9% sequentially to $225.9 million due to improved deliveries on our strong backlog and a large order from a new customer, which we began recognizing revenue on in the back half of the year. We expect to continue to recognize revenue from this as well as other new customer orders as we progress through 2023. Gross profit in the fourth quarter was $25.5 million, an increase of 63.6% compared to the prior year quarter, while gross margin of 11.3% improved 360 basis points year-over-year. Sequentially gross profit improved 10.1%, while gross margins remained flat. Our probability continued to trend in the right direction, due to moderating input costs and the full benefit of our 2022 price increases. These factors, combined with steps we've made to improve our supply chain and our normally scheduled 2023 price increases, which just began to roll out into the marketplace, give us confidence in improving profitability in 2023. While we continue to accumulate inventory in the form of goods near completion, we have taken a number of steps over the past year to ensure stability and flexibility of our supply chain to maximize…

Thanks, Will. Good morning everyone. Net sales for the fourth quarter 2022 were $225.9 million versus $201.7 million for the fourth quarter of 2021, a 12% year-over-year increase, driven largely by the robust demand across all of our products and the benefit of our 2022 price increases as Will mentioned earlier. Cost of operations increased 9.8% to $200.3 million for the fourth quarter of 2022, compared to $182.4 million for the fourth quarter 2021. The increase in our cost of operations is due largely to parts scarcity and high prices for our components, compared to the prior year period. Cost of operations, as a percentage of net sales, decreased approximately 360 basis points from the prior year period to 88.7%. Gross profit was $25.5 million or 11.3% of net sales for the fourth quarter of 2022 compared to $15.6 million or 7.7% of net sales for the prior year period. The year-over-year improvement in gross margin was driven by higher deliveries and increasing benefit from our 2022 price increases and stabilization of raw materials input costs. SG&A expenses were $13.1 million in the fourth quarter 2022 compared to $11.2 million in the fourth quarter of 2021 due to investments in human capital and increases in employee benefit costs. As a percentage of sales, SG&A was 5.8%, 30 basis points higher than the prior year period. Interest expense for the fourth quarter 2022 was $1.3 million up from $454,000 for the fourth quarter 2021, primarily related to an increase in our debt levels to find higher working capital needs along with the increases in our distributor floor plan financing costs, which flags up and down with revenue. Other income for the fourth quarter was $512,000 compared to an expense of $64,000 for the fourth quarter 2021 attributed largely to currency exchange…

Thank you, Debbie. Our results over the last two quarters of fiscal 2022 have given us increased confidence in our business and our strategy, as top line growth has continued to improve, we are encouraged by the sequential and year-over-year margin improvements in the back half of the year. As I alluded to earlier, subject to no substantial changes in the supply chain environment and the general economic conditions, we are confident that the profitability will improve in 2023. Demand for our products is as high as it has ever been evidenced by our record backlog and significant customer wins. We remain poised to quickly execute against our backlog, as parts are increasingly available over the coming year due to the capacity expansions and capital equipment expenditures we have previously made in preparation for our increasing demand. While some headwinds remain, including the consistency of the supply chain for various component parts and rising interest rates, making it difficult to predict when a fully normal environment will return we are committed to doing everything in our power to deliver on our commitments to our customers, partners and suppliers in as timely manner as possible. Despite these headwinds, we are confident that given the dynamics in our business and the strength of our backlog that we will be able to generate over $1 billion in revenue for fiscal 2023. In closing, the entire management team and I would like to thank all of our employees, suppliers, customers and shareholders for their continued support of Miller Industries. At this time, we'd like to open the line for any questions.

Thank you. I'd like to thank you all again for joining us on the call today and we look forward to speaking with you on our first quarter conference call. Thank you again.

Thank you. This will conclude today's conference. You may disconnect your lines at this time and thank you for your participation.