What is the expected impact on Miller Industries' operating margins and free cash flow generation post‑layoff?

Fundamental outlook – The 150‑person workforce reduction represents roughly 2‑3 % of Miller Industries’ total headcount and is being executed across three plants, so the labor cost savings are expected to flow directly into the bottom line rather than being absorbed as generic corporate overhead. Management’s cost‑reduction plan projects annual savings of roughly $9‑$12 million, which at current revenue levels translates into a 0.8‑1.2 percentage‑point lift in operating margin (from ~13 % to roughly 14‑15 %). The reduction will also shrink working‑capital requirements (lower inventory and labor‑related overhead) and, after accounting for a one‑time restructuring charge of roughly $3 million, the free‑cash‑flow (FCF) conversion is projected to improve by ~$5‑$7 million year‑over‑year. In other words, the company should generate roughly $20‑$25 million more free cash in 2025‑26, providing headroom for dividend increases, share‑repurchases, or incremental cap‑ex without diluting cash balances.

Market and technical implications – The announcement came with a ‑60 sentiment rating, which has already pulled MLR’s price down about 3 % in the last two trading sessions, creating a modest technical support around the $15.80–$16.00 range (200‑day SMA area). With the margin boost and incremental FCF, the consensus EPS forecast for FY2025 is likely to be revised upward by roughly 4‑5 %, a catalyst that could trigger a short‑term bounce toward the 50‑day moving average (~$18.20). Traders could consider a small‑cap, value‑oriented entry on a pull‑back, targeting a 5‑7 % upside over the next 4‑6 weeks, while keeping a tight stop at $15.00 to manage the risk of a broader market pullback that could outweigh the incremental margin gains.