2013 Annual Report
,
TO OUR SHAREHOLDERS
April 18, 2014
2013 was a year of strong revenue growth for Miller Industries. We continued to execute on our
strategic goals and objectives throughout the year. While market conditions remained below
normalized levels in 2013, we saw conditions improve in the second half of the year, which was
reflected in our results. Furthermore, our results also reflected a number of achievements during
the year, which were in line with our strategic objectives. These achievements included the
expansion of our geographic initiatives and the delivery of our towing and recovery equipment to
the French military through a prime contractor.
Revenue growth for the year was achieved by an improving order flow and a better market
environment. In addition, our decision in the first quarter of 2013 to ramp up production levels
based on our view of the market allowed us to deliver on orders that we would not have been
able to accomplish had we had not taken those steps. We also maintained efficiencies in our
operations by controlling our costs and lowering SG&A as a percentage of net sales for the year.
This underscores our flexibility to operate under evolving market environments while continuing
to take advantage of our operational leverage.
While our core business continues to operate at strong levels, we made the decision to consider
strategic alternatives with regards to our Delavan joint venture. Following a review and
evaluation of joint venture operations, our Board of Directors made the decision to sell our
interest in Delavan to our joint venture partner to eliminate future losses associated with the joint
venture. On February 28, 2014, the Company entered into an agreement to sell its interest in the
Delavan joint venture to the parent of the joint venture partner, which closed on March 31, 2014.
Our Greeneville facility ceased manufacturing of Delavan products at the end of the first quarter
of 2014, and will now increase production of products associated with our core business.
Net sales for 2013 were $404.2 million, an increase of approximately 18 percent compared to
$342.7 million in the prior-year period. Growth in net sales reflected improving order trends and
an increasingly positive sentiment from our customers, particularly in the commercial markets,
both domestically and internationally. Market conditions in Europe remained challenging,
although we have started to receive modestly-sized orders in that region and in other market
areas of the world, which further illustrates the in-roads we are making in the international
marketplace.
Gross profit was $42.4 million, or 10.5 percent of sales in 2013, compared to $40.1 million, or
11.7 percent of sales, in 2012. Our gross margins were lower year-over-year as a result of higher
production costs related to the Delavan joint venture and a shift in the sales mix of our core
business. Net income in 2013 was $9.2 million, or $0.82 per diluted share, compared to net
income of $9.1 million, or $0.82 per diluted share in 2012. The financial results for 2013 include
losses before income taxes that are directly attributable to the Delavan joint venture of
approximately $1.3 million. Our 2012 results included one time income tax benefits of $1.4
million primarily from federal domestic production activity deductions, as well as from federal
research and development and other tax credits recognized in the third quarter of that year.
In addition to our increased revenue in 2013, we continued to operate from a position of financial
strength. We ended 2013 with cash and cash equivalents of $42.9 million, and continued to
operate with no debt. Receivables increased from the year ago period driven by sales volume
growth, and payables were up reflecting our higher production levels. We remain committed to
generating value for our shareholders through our strong cash flow, solid balance sheet and the
quarterly dividend, which the board of directors increased by 7.1% to $0.15 per share in early-
2014.
We made significant progress on our geographic expansion initiatives during the year. In
addition to our French military order through a prime contractor, which is scheduled to be
delivered through 2014, we continued to make inroads across a variety of other regions in
Europe, as well as the Asia-Pacific, Middle East and Latin America regions. We are seeing more
international order activity, which should create additional long-term opportunities for our
business. One of our top priorities is to continue building relationships with prime contractors
who are bidding for government and military tenders, both domestically and abroad.
Reflecting on our performance in 2013, we are pleased with the progress our Company has made
in an improving economic environment for our core business. We generated strong revenue
growth, expanded our market opportunities and enhanced the efficiency of our business.
Looking ahead to 2014, we are well-positioned to continue building upon our 2013 performance.
As The World’s Largest Manufacturer of Towing and Recovery Equipment®, we are excited
about the outlook for Miller Industries in the coming year.
We thank our employees, customers, suppliers and shareholders for their ongoing dedication and
support, and look forward to continuing our hard work and successful execution in 2014.
Jeffrey I. Badgley
Co-Chief Executive Officer
William G. Miller, II
Co-Chief Executive Officer
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
(Mark One)
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2013
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ____________________________ to ____________________________
Commission File No. 001-14124
MILLER INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)
Tennessee
(State or other jurisdiction of incorporation or organization)
62-1566286
(I.R.S. Employer Identification No.)
8503 Hilltop Drive, Ooltewah, Tennessee
(Address of principal executive offices)
37363
(Zip Code)
(423) 238-4171
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class
Name of Each Exchange on Which Registered
Common Stock, par value $.01 per share
New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act:
None
(Title of Class)
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.
Yes No
Yes No
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes No
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File
required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was
required to submit and post such files).
Yes No
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein and will not be contained,
to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment
to this Form 10-K.
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting
company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act:
Large Accelerated Filer
Non-accelerated Filer
Accelerated Filer
Smaller Reporting Company
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
The aggregate market value of the voting stock held by non-affiliates of the registrant (which for purposes hereof are all holders other than
executive officers, directors and holders of more than 10% of the registrant’s Common Stock) as of June 28, 2013 (the last business day of the registrant’s
most recently completed second fiscal quarter) was $139,459,119 (based on 9,067,563 shares held by non-affiliates at $15.38 per share, the last sale price
reported on the New York Stock Exchange on June 28, 2013).
At February 28, 2014 there were 11,272,333 shares of the registrant’s common stock, par value $0.01 per share, outstanding.
The information called for by Part III (Items 10, 11, 12, 13 and 14) is incorporated herein by reference to the Registrant’s definitive proxy statement
for its 2014 Annual Meeting of Shareholders which is to be filed pursuant to Regulation 14A.
DOCUMENTS INCORPORATED BY REFERENCE
Yes No
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12
12
12
12
13
15
16
22
23
23
23
26
27
27
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TABLE OF CONTENTS
PART I
BUSINESS
ITEM 1.
ITEM 1A. RISK FACTORS
ITEM 1B UNRESOLVED STAFF COMMENTS
ITEM 2.
ITEM 3.
ITEM 4. MINE SAFETY DISCLOSURES
PROPERTIES
LEGAL PROCEEDINGS
PART II
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND
ISSUER PURCHASES OF EQUITY SECURITIES
SELECTED FINANCIAL DATA
ITEM 6.
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
ITEM 8.
ITEM 9.
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE
ITEM 9A. CONTROLS AND PROCEDURES
ITEM 9B. OTHER INFORMATION
PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
ITEM 11. EXECUTIVE COMPENSATION
ITEM 12.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED
STOCKHOLDER MATTERS
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
ITEM 14.
PRINCIPAL ACCOUNTANT FEES AND SERVICES
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
PART IV
i
CERTAIN FACTORS AFFECTING FORWARD-LOOKING STATEMENTS
Certain statements in this Annual Report, including but not limited to statements made in Part II–Item 7–”Management’s Discussion
and Analysis of Financial Condition and Results of Operations,” statements made with respect to future operating results, expectations
of future customer orders and the availability of resources necessary for our business may be deemed to be forward-looking
statements, as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by the
use of words such as “may,” “will,” “should,” “could,” “continue,” “future,” “potential,” “believe,” “project,” “plan,” “intend,”
“seek,” “estimate,” “predict,” “expect,” “anticipate” and similar expressions, or the negative of such terms, or other comparable
terminology. Forward-looking statements also include the assumptions underlying or relating to any of the foregoing statements. Such
forward-looking statements are made based on our management’s beliefs as well as assumptions made by, and information currently
available to, our management. Our actual results may differ materially from the results anticipated in these forward-looking statements
due to, among other things: the cyclical nature of our industry and changes in consumer confidence; economic and market conditions;
our customer’s access to capital and credit to fund purchases, including the ability of our customers to secure floor plan financing; our
dependence on outside suppliers of raw materials; changes in the cost of aluminum, steel and related raw materials; changes in fuel
and other transportation costs, insurance costs and weather conditions; changes in government regulation; foreign currency
fluctuation; competitors could impede our ability to attract or retain customers; our ability to develop or acquire proprietary products
and technology; assertions against us relating to intellectual property rights; problems hiring or retaining skilled labor; the effects of
new regulation relating to conflict minerals; the catastrophic loss of one or our manufacturing facilities; environmental and health and
safety liabilities and requirements; loss of the services of our key executives; product warranty or product liability claims in excess of
our insurance coverage; an inability to acquire insurance at commercially reasonable rates; and those other risks referenced herein,
including those risks referred to in this report, in Part I, Item 1A–”Risk Factors” and those risks discussed in our filings with the
Securities and Exchange Commission filed after this Annual Report. Such factors are not exclusive. We do not undertake to update
any forward-looking statement that may be made from time to time by, or on behalf of, our company.
1
ITEM 1.
BUSINESS
General
PART I
Miller Industries is The World’s Largest Manufacturer of Towing and Recovery Equipment®, with executive offices in
Ooltewah, Tennessee, domestic manufacturing operations in Tennessee and Pennsylvania, and foreign manufacturing operations in
France and the United Kingdom.
Since 1990, we have developed or acquired several of the most well-recognized brands in the towing and recovery equipment
manufacturing industry. Our strategy has been to diversify our line of products and increase our presence in the industry by combining
internal growth and development with acquisitions of complementary products.
In this Annual Report on Form 10-K, the words “Miller Industries,” “the Company,” “we,” “our,” “ours” and “us” refer to
Miller Industries, Inc. and its subsidiaries or any of them.
Towing and Recovery Equipment
We offer a broad range of towing and recovery equipment products that meet most customer design, capacity and cost
requirements. We manufacture the bodies of wreckers and car carriers, which are installed on truck chassis manufactured by third
parties. We frequently purchase the truck chassis for resale to our customers. Wreckers generally are used to recover and tow disabled
vehicles and other equipment and range in type from the conventional tow truck to large recovery vehicles with rotating hydraulic
booms and up to 75-ton lifting capacities. Car carriers are specialized flatbed vehicles with hydraulic tilt mechanisms that enable a
towing operator to drive or winch a vehicle onto the bed for transport. Car carriers transport new or disabled vehicles and other
equipment and are particularly effective over longer distances. We also manufacture vehicle transport trailers.
Our products primarily are sold through independent distributors that serve all 50 states, Canada and Mexico, and other
foreign markets including Europe, the Pacific Rim, the Middle East, South America and Africa, and through prime contractors to
governmental entities. Additionally, as a result of our ownership of Jige in France and Boniface in the United Kingdom, we have
substantial distribution capabilities in Europe. While most of our distributor agreements do not contain exclusivity provisions,
management believes that approximately 85% of our independent distributors sell our products on an exclusive basis. In addition to
selling our products to towing operators, our independent distributors provide parts and service. We also utilize sales representatives to
exclusively market our products and provide expertise and sales assistance to our independent distributors. Management believes the
strength of our distribution network and the breadth of our product offerings are two key advantages over our competitors.
Product Lines
We manufacture a broad line of wrecker, car carrier and trailer bodies to meet a full range of customer design, capacity and
cost requirements.
Wreckers. Wreckers are generally used to recover and tow disabled vehicles and other equipment and range in type from the
conventional tow truck to large recovery vehicles with up to 75-ton lifting capacities. Wreckers are available with specialized features,
including underlifts, L-arms, crossbars and scoops, which lift disabled vehicles by the tires or front axle to minimize front end damage
to the towed vehicles. Certain heavy duty wrecker models offer rotating booms, which allow heavy duty wreckers to recover vehicles
from any angle, and remote control devices for operating wreckers. In addition, certain light duty wreckers are equipped with
automatic wheellift hookup devices that allow operators to engage a disabled or unattended vehicle without leaving the cab of the
wrecker.
2
Our wreckers range in capacity from 4 to 75 tons, and are classified as either light duty or heavy duty, with wreckers of 16-
ton or greater capacity being classified as heavy duty. Light duty wreckers are used to remove vehicles from accident scenes and
vehicles illegally parked, abandoned or disabled, and for general recovery. Heavy duty wreckers are used in towing and recovery
applications including overturned tractor trailers, buses, motor homes and other large vehicles.
Car Carriers. Car carriers are specialized flat-bed vehicles with hydraulic tilt mechanisms that enable a towing operator to
drive or winch a vehicle onto the bed for transport. Car carriers are used to transport new or disabled vehicles and other equipment and
are particularly effective for transporting vehicles or other equipment over longer distances. In addition to transporting vehicles, car
carriers may also be used for other purposes, including transportation of industrial equipment. Most professional towing operators
have car carriers in their fleets to complement their towing capabilities.
Transport Trailers. Our multi-vehicle transport trailers are specialized auto transport trailers with upper and lower decks and
hydraulic ramps for loading vehicles. These trailers are used for moving multiple vehicles for auto auctions, car dealerships, leasing
companies and other similar applications. These trailers are easy to load and transport 6 to 7 vehicles. The vehicles can be secured to
transport quickly with ratchet and chain tie-downs that are mounted throughout the frame of the transport. Many professional towing
operators have added auto transport trailers to their fleets to add to their service offerings. Also, we design, engineer and manufacture
special-use transport and trailer products. In December 2012, we formed Delavan Automotive LLC, of which we have a controlling
interest, for the sale of larger capacity automobile transport trailers in the United States and Canada as an extension of our current
product offering. We have an agreement to sell our interest in this entity to our joint venture partner, which is scheduled to close on
March 31, 2014. See Item 7–”Management’s Discussion and Analysis of Financial Condition and Results of Operations – Executive
Overview” for a discussion of the financial results of this venture.
Brand Names
We manufacture and market our wreckers, car carriers and trailers under ten separate brand names. Although certain brands
overlap in terms of features, prices and distributors, each brand has its own distinctive image and customer base.
Century®. The Century® brand is our “top-of-the-line” brand and represents what management believes to be the broadest
product line in the industry. The Century® line was started in 1974 and produces wreckers ranging from 8-ton light duty to 75-ton
heavy duty models, and car carriers in lengths from 20 to 30 feet. Management believes that the Century® brand has a reputation as the
industry’s leading product innovator.
Vulcan®. Our Vulcan® product line includes a range of premium light duty and heavy duty wreckers, ranging from 8-ton light
duty to 50-ton heavy duty models, and car carriers. The Vulcan® line is sold through its own independent distribution network.
Challenger®. Our Challenger® products compete with the Century® and Vulcan® products and constitute a third premium
product line. Challenger® products consist of heavy duty wreckers with capacities ranging from 25 to 75 tons. The Challenger® line
was started in 1975 and is known for high performance heavy duty wreckers and aesthetic design.
Holmes®. Our Holmes® product line includes mid-priced wreckers with 4 to 16 ton capacities, a 16-ton rotator and a
detachable towing unit (DTU). The Holmes® wrecker was first produced in 1916. Historically, the Holmes® name has been the most
well-recognized and leading industry brand both domestically and internationally.
Champion®. The Champion® brand, which was introduced in 1991, includes car carriers which range in length from 19 to 21
feet. The Champion® product line, which is generally lower-priced, allows us to offer a full line of car carriers at various competitive
price points.
Chevron™. Our Chevron™ product line is comprised primarily of premium car carriers. Chevron™ produces a range of
premium single-car, multi-car and industrial carriers, as well as wreckers ranging from 8-ton to 16-ton models. The Chevron™ line is
operated autonomously with its own independent distribution network.
Eagle®. Our Eagle® products consist of light duty wreckers with the “Eagle Claw®” hook-up system that allows towing
operators to engage a disabled or unattended vehicle without leaving the cab of the tow truck. The “Eagle Claw®” hook-up system was
originally developed for the repossession market. Since acquiring Eagle, we have upgraded the quality and features of the Eagle®
product line and expanded its recovery capability.
3
Titan®. Our Titan® product line is comprised of premium multi-vehicle transport trailers which can transport up to 7 vehicles
depending on configuration.
Jige™. Our Jige™ product line is comprised of a broad line of premium light duty and heavy duty wreckers and car carriers
marketed primarily in Europe. Jige™ is a market leader best known for its innovative designs of car carriers and light duty wreckers
necessary to operate within the narrow confines of European cities, as well as heavy duty wreckers.
Boniface™. Our Boniface™ product line is comprised primarily of premium heavy duty wreckers marketed primarily in
Europe. Boniface™ produces heavy duty wreckers specializing in the long underlift technology required to tow modern European tour
buses.
Product Development and Manufacturing
Our Holmes® and Century® brand names are associated with four of the major innovations in the industry: the rapid reverse
winch; the tow sling; the hydraulic lifting mechanism; and the underlift with parallel linkage and L arms. Our engineering staff, in
consultation with manufacturing personnel, uses computer-aided design and stress analysis systems to test new product designs and to
integrate various product improvements. In addition to offering product innovations, we focus on developing or licensing new
technology for our products.
We manufacture wreckers, car carriers and trailers at seven manufacturing facilities located in the United States, France and
the United Kingdom. The manufacturing process for our products consists primarily of cutting and bending sheet steel or aluminum
into parts that are welded together to form the wrecker, car carrier body or trailer. In addition, during the past several years, we have
also begun to produce wrecker bodies using composites and other non-metallic materials. After the frame is formed, components such
as hydraulic cylinders, winches, valves and pumps, which are purchased by us from third-party suppliers, are attached to the frame to
form the completed wrecker or car carrier body. The completed body is either installed by us, or shipped by common carrier to a
distributor where it is then installed, on a truck chassis. Generally, the wrecker or car carrier bodies are painted and towing operators
can select customized colors to coordinate with chassis colors or fleet colors. To the extent final painting is required before delivery,
we either complete such painting or contract with independent paint shops for such services.
We purchase raw materials and component parts from a number of sources. Although we have no long-term supply contracts,
management believes we have good relationships with our primary suppliers. In recent years prices have fluctuated significantly, but
we have experienced no significant problems in obtaining adequate supplies of raw materials and component parts to meet the
requirements of our production schedules. Management believes that the materials used in the production of our products are available
at competitive prices from an adequate number of alternative suppliers. Accordingly, management does not believe that the loss of a
single supplier would have a material adverse effect on our business.
Sales, Distribution and Marketing
Management categorizes the towing and recovery market into three general product types: light duty wreckers; heavy duty
wreckers; and car carriers. The light duty wrecker market consists primarily of professional wrecker operators, repossession towing
services, local and national governmental entities and repair shop or salvage company owners. The heavy duty market includes
professional wrecker operators serving the needs of commercial vehicle operators as well as governmental entities. The car carrier
market has expanded to include equipment rental companies that offer delivery service and professional towing operators who desire
to complement their existing towing capabilities. Management estimates that there are approximately 35,000 professional towing
operators and many more service station, repair shop and salvage operators comprising the overall towing and recovery market.
We have developed a diverse network of independent distributors, consisting of approximately 80 distributors in North
America, who serve all 50 states, Canada and Mexico, and numerous distributors that serve other foreign markets. In 2013, no single
distributor accounted for more than 10% of our sales. Management believes our broad and diverse network of distributors provides us
with the flexibility to adapt to market changes, lessens our dependence on particular distributors and reduces the impact of regional
economic factors.
4
Our sales force services our network of independent distributors and consists of sales representatives whose responsibilities
include providing administrative and sales support to the entire base of independent distributors. Sales representatives receive
commissions on direct sales based on product type and brand and generally are assigned specific territories in which to promote sales
of our products and to maintain customer relationships.
In addition to providing services to our network of independent distributors, our sales force sells our products to various
governmental entities, including the U.S. federal government and foreign governments, through prime contractors. For example, in
2011, 26.8% of our consolidated net sales were made to the U.S. federal government through prime contractors.
To support sales and marketing efforts, we produce demonstrator models that are used by our sales representatives and
independent distributors. To increase exposure to our products, we also serve as the official recovery team for many automobile racing
events, including NASCAR races at Daytona, Talladega, Richmond, Atlanta, Chicago, Kansas, California, Michigan, Darlington,
Phoenix, Homestead (Miami) and the Rolex Daytona 24 Hour Race, among others.
We routinely respond to requests for proposals or bid invitations in consultation with our local distributors. Our products
have been selected by the United States General Services Administration as an approved source for certain federal and defense
agencies. We intend to continue to pursue government contracting opportunities.
The towing and recovery equipment industry places heavy marketing emphasis on product exhibitions at national, regional
and international trade shows. In order to focus our marketing efforts and to control marketing costs, we concentrate our efforts on the
major trade shows each year, and we work with our network of independent distributors to concentrate on various regional shows.
Product Warranties and Insurance
We generally offer a 12-month limited manufacturer’s product and service warranty on our wrecker and car carrier products.
Our warranty generally provides for repair or replacement of failed parts or components. Warranty service is usually performed by us
or an authorized distributor. Management believes that we maintain adequate general liability and product liability insurance.
Backlog
We produce virtually all of our products to order. Our backlog is based upon customer purchase orders that we believe are
firm. The level of backlog at any particular time, however, may not be an appropriate indicator of our future operating performance.
Certain purchase orders may be subject to cancellation by the customer upon notification. Given our production and delivery
schedules, management generally believes that the current backlog represents less than three months of production except for certain
governmental orders for which we expect production to continue into the first half of 2015.
Competition
The towing and recovery equipment manufacturing industry is highly competitive for sales to distributors and towing
operators. Management believes that competition in this industry focuses on product quality and innovation, reputation, technology,
customer service, product availability and price. We compete on the basis of each of these criteria, with an emphasis on product
quality and innovation and customer service. Management also believes that a manufacturer’s relationship with distributors is a key
component of success in the industry. Accordingly, we have invested substantial resources and management time in building and
maintaining strong relationships with distributors. Management also believes that our products are regarded as high quality within
their particular price points. Our marketing strategy is to continue to compete primarily on the basis of quality and reputation rather
than solely on the basis of price, and to continue to target the growing group of professional towing operators who as end-users
recognize the quality of our products.
Traditionally, the capital requirements for entry into the towing and recovery manufacturing industry have been relatively
low. Management believes a manufacturer’s capital resources and access to technological improvements have become a more integral
component of success in recent years. Certain of our competitors may have greater financial and other resources and may provide
more attractive dealer and retail customer financing alternatives than we do.
5
Employees
We employed approximately 820 people as of December 31, 2013. None of our employees are covered by a collective
bargaining agreement, though our employees in France and the United Kingdom have certain similar rights provided by their
respective government’s employment regulations. We consider our employee relations to be good.
Intellectual Property Rights
Our development of the underlift parallel linkage and L-arms is considered one of the most innovative developments in the
wrecker industry. This technology is significant primarily because it allows the damage-free towing of newer aerodynamic vehicles
made of lighter weight materials. This technology, particularly the L-arms, is used in a majority of commercial wreckers today. We
hold a number of utility and design patents covering other of our products, including the Vulcan “scoop” wheel-retainer and the car
carrier anti-tilt device. We have also obtained the rights to use and develop certain technologies owned or patented by others.
Management believes that, until the patents on our technology expire, utilization of our patented technology without a license is an
infringement of such patents. We have successfully litigated infringement lawsuits in which the validity of our patents on our
technology was upheld, and successfully settled other lawsuits,
Our trademarks “Century®,” “Holmes®,” “Champion®,” “Challenger®,” “Formula I®,” “Pro Star®,” “Street Runner®,”
“Vulcan®,” “Right Approach®” and “Extreme Angle®,” among others, are registered with the United States Patent and Trademark
Office. Management believes that our trademarks are well-recognized by dealers, distributors and end-users in their respective markets
and are associated with a high level of quality and value.
Government Regulations and Environmental Matters
Our operations are subject to federal, state and local laws and regulations relating to the generation, storage, handling,
emission, transportation and discharge of materials into the environment. Management believes that we are in substantial compliance
with all applicable federal, state and local provisions relating to the protection of the environment. The costs of complying with
environmental protection laws and regulations have not had a material adverse impact on our financial condition or results of
operations in the past.
We are also subject to the additional diligence and disclosure requirements adopted by the Securities and Exchange
Commission (the “SEC”) in 2012 related to certain minerals sourced from the Democratic Republic of Congo or adjoining countries in
connection with the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”). The SEC rules impose
these obligations with respect to “conflict minerals,” defined as tin, tantalum, tungsten and gold, which are necessary to the
functionality of a product manufactured, or contracted to be manufactured, by an SEC reporting company. If any “conflict minerals”
that are necessary to the functionality of a product manufactured by an SEC reporting company originated in the Democratic Republic
of Congo or an adjoining country, the rules require the issuer to prepare and file a report addressing its efforts to exercise due
diligence on the source of such “conflict minerals” and their chain of custody. We are actively working toward complying with the
conflict minerals diligence and disclosure obligations required under the Dodd-Frank Act.
We are also subject to the Magnuson-Moss Warranty Federal Trade Commission Improvement Act which regulates the
description of warranties on products. The description and substance of our warranties are also subject to a variety of federal and state
laws and regulations applicable to the manufacturing of vehicle components. Management believes that continued compliance with
various government regulations will not materially affect our operations.
Executive Officers of the Registrant
Information relating to our executive officers as of the end of the period covered by this Annual Report is set forth below.
William G. Miller, II is the son of William G. Miller. Other than Messrs. Miller and Miller II, there are no family relationships among
the executive officers, directors or nominees for director, nor are there any arrangements or understandings between any of the
executive officers and any other persons pursuant to which they were selected as executive officers.
6
Name
Age
Position
William G. Miller
Jeffrey I. Badgley
William G. Miller, II
Frank Madonia
J. Vincent Mish
Vincent J. Tiano
67
61
35
65
63
49
Chairman of the Board
Co-Chief Executive Officer
President and Co-Chief Executive Officer
Executive Vice President, Secretary and General Counsel
Executive Vice President, Chief Financial Officer and Treasurer
Vice President, Sales - North America
William G. Miller has served as Chairman of the Board since April 1994. Mr. Miller served as our Chief Executive Officer
from April 1994 until June 1997, and as our Co-Chief Executive Officer from October 2003 until March 2011. In June 1997, he was
named Co-Chief Executive Officer, a title he shared with Jeffrey I. Badgley until November 1997. Mr. Miller also served as our
President from April 1994 to June 1996. He served as Chairman of Miller Group, Inc. from August 1990 through May 1994, as its
President from August 1990 to March 1993, and as its Chief Executive Officer from March 1993 until May 1994. Prior to 1987, Mr.
Miller served in various management positions for Bendix Corporation, Neptune International Corporation, Wheelabrator-Frye, Inc.
and The Signal Companies, Inc.
Jeffrey I. Badgley has served as a director since 1996 and as Vice Chairman of the Board since March 2011. He has served as
our Co-Chief Executive Officer since December 2013, after serving as our Chief Executive Officer from March 2011 until December
2013, our President from June 1996 until March 2011, our Co-Chief Executive Officer from October 2003 until March 2011 and our
Chief Executive Officer from November 1997 to October 2003. Mr. Badgley served as our Vice President from 1994 to 1996, and as
our Chief Operating Officer from June 1996 to June 1997. In addition, Mr. Badgley has served as President of Miller Industries
Towing Equipment Inc. since 1996. Mr. Badgley served as Vice President—Sales of Miller Industries Towing Equipment Inc. from
1988 to 1996. He previously served as Vice President—Sales and Marketing of Challenger Wrecker Corporation from 1982 until
joining Miller Industries Towing Equipment Inc.
William G. Miller, II has served as our Co-Chief Executive Officer since December 2013 and President since March 2011,
after serving as a Regional Vice President of Sales of Miller Industries Towing Equipment Inc. from November 2009 to February
2011. Mr. Miller II served as Vice President of Strategic Planning of the Company from October 2007 until November 2009. Mr.
Miller II served as Light Duty General Manager from November 2004 to October 2007 and as a Sales Representative of Miller
Industries Towing Equipment Inc. from 2002 to 2004.
Frank Madonia has served as our Executive Vice President, Secretary and General Counsel since September 1998. From
April 1994 to September 1998 Mr. Madonia served as our Vice President, General Counsel and Secretary. Mr. Madonia served as
Secretary and General Counsel to Miller Industries Towing Equipment Inc. since its acquisition by Miller Group in 1990. From July
1987 through April 1994, Mr. Madonia served as Vice President, General Counsel and Secretary of Flow Measurement. Prior to 1987,
Mr. Madonia served in various legal and management positions for United States Steel Corporation, Neptune International
Corporation, Wheelabrator-Frye, Inc. and The Signal Companies, Inc.
J. Vincent Mish is a certified public accountant and has served as our Chief Financial Officer and Treasurer since June 1999,
a position he also held from April 1994 through September 1996. In December 2002, Mr. Mish was appointed as our Executive Vice
President. He also has served as President of the Financial Services Group since September 1996 and as a Vice President of Miller
Industries since April 1994. Mr. Mish served as Vice President and Treasurer of Miller Industries Towing Equipment Inc. since its
acquisition by Miller Group in 1990. From February 1987 through April 1994, Mr. Mish served as Vice President and Treasurer of
Flow Measurement. Mr. Mish worked with Touche Ross & Company (now Deloitte and Touche) for over ten years before serving as
Treasurer and Chief Financial Officer of DNE Corporation from 1982 to 1987. Mr. Mish is a member of the American Institute of
Certified Public Accountants and the Tennessee and Michigan Certified Public Accountant societies.
Vincent J. Tiano has served as Vice President, Sales – North America of the Company since March 2011. From March 2008
to March 2011 Mr. Tiano served as Vice President of Miller Industries Towing Equipment Inc. From May 1997 to March 2008, Mr.
Tiano served as Director, Chassis and Trailer Division of Miller Industries Towing Equipment Inc. Mr. Tiano served as a sales
representative for Kenworth of Tennessee from January 1993 to April 1997.
Available Information
Our Internet website address is www.millerind.com. We make available free of charge through our website our Annual
Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, and amendments to those reports, as soon
as reasonably practicable after we file them with, or furnish them to, the Securities and Exchange Commission. Our Corporate
Governance Guidelines and Code of Business Conduct and Ethics are also available on our website. Other corporate governance-
related documents can be found at our website as well.
7
ITEM 1A. RISK FACTORS
There are many factors that affect our business and the results of our operations, some of which are beyond our control. The
following is a description of all known material risks that may cause the actual results of our operations in future periods to differ
materially from those currently expected or desired. We encourage you to read this section carefully.
Our business is subject to the cyclical nature of our industry and changes in consumer confidence and in economic conditions in
general. Adverse changes or continued uncertainty with respect to these factors may lead to a downturn in our business.
The towing and recovery industry is cyclical in nature and historically the industry has been affected by changes in consumer
confidence and in economic conditions in general. Concerns over the slow economic recovery and continued volatility and disruption
in domestic and international capital and credit markets have caused significant erosion in consumer confidence. As a result, the
overall demand for our products from our commercial customers has been negatively affected, and the level of future sales of our
products is uncertain. A prolonged economic downturn, and slow or negative growth in the domestic and global economy, may
continue to have a material adverse effect on our business, financial condition and results of operations for the foreseeable future.
Our demand from our customers and towing operators is affected by the availability of capital and access to credit.
The ability of our customers and of towing operators to purchase our products is affected by the availability of capital and
credit to them. Our independent distributor customers rely on floor plan financing in connection with the purchase of our products, and
the availability of that financing on acceptable terms has a direct effect on the volume of their purchases. Additionally, in many cases,
a towing operator’s decision to purchase our products from one of our distributors is dependent upon their ability to obtain financing
upon acceptable terms. Volatility and disruption in the capital and credit markets, principally in the U.S. and Europe, has decreased
the availability of capital to, and credit capacity of, our customers and towing operators. In addition, in the past, certain providers of
floor plan financing have exited the market, which made floor plan financing increasingly difficult for our independent distributor
customers to secure at those times. This reduced availability of capital and credit has negatively affected the ability and capacity of our
customers and of towing operators to purchase towing and related equipment. This, in turn, has negatively impacted sales of our
products. If customers are unable to access capital or credit, it could materially and adversely affect our ability to sell our products,
and as a result, could negatively affect our business and operating results.
8
Our dependence upon outside suppliers for our raw materials, including aluminum, steel, petroleum-related products and other
purchased component parts, leaves us subject to changes in price and delays in receiving supplies of such materials or parts.
We are dependent upon outside suppliers for our raw material needs and other purchased component parts, and although we
believe that these suppliers will continue to meet our requirements and specifications, and that alternative sources of supply are
available, events beyond our control could have an adverse effect on the cost or availability of raw materials and component parts.
Shipment delays, unexpected price increases or changes in payment terms from our suppliers of raw materials or component parts
could impact our ability to secure necessary raw materials or component parts, or to secure such materials and parts at favorable
prices. To partially offset price increases for raw materials and component parts, we have, from time to time, implemented general
price increases and cost surcharges. While we have attempted to pass these increased costs on to our customers, there can be no
assurance that we will be able to continue to do so. Additionally, demand for our products could be negatively affected by the
unavailability of truck chassis, which are manufactured by third parties and are frequently supplied by us, or are purchased separately
by our distributors or by towing operators. Although we believe that sources of our raw materials and component parts will continue to
be adequate to meet our requirements and that alternative sources are available, shortages, price increases or delays in shipments of
our raw materials and component parts could have a material adverse effect on our financial performance, competitive position and
reputation.
Overall demand from our customers may be affected by increases in their fuel and insurance costs and changes in weather
conditions.
In the past, our customers have experienced substantial increases in fuel and other transportation costs, and in the cost of
insurance, and while many of these costs have remained stable since 2010, there can be no assurance that these costs will not continue
to be volatile, or again increase, for our customers in the future. Additionally, our customers also have, from time to time, been subject
to unpredictable and varying weather conditions which could, among other things, impact the cost and availability of fuel and other
materials. Any of these factors could negatively affect the ability of our customers to purchase, and their capacity for purchasing,
towing and related equipment, and, consequently, have a material negative effect upon our business and operating results.
Our international operations are subject to various political, economic and other uncertainties that could adversely affect our
business results, including by restrictive taxation or other government regulation and by foreign currency fluctuation.
Historically, a significant portion of our net sales and production were outside the United States, primarily in Europe. As a
result, our operations are subject to various political, economic and other uncertainties, including risks of restrictive taxation policies,
changing political conditions and governmental regulations. Also, a substantial portion of our net sales derived outside the United
States, as well as salaries of employees located outside the United States and certain other expenses, are denominated in foreign
currencies, including the British pound and the Euro. We are, therefore, subject to risk of financial loss resulting from fluctuations in
exchange rates of these currencies against the U.S. dollar.
9
Our competitors could impede our ability to attract or retain customers.
The towing and recovery equipment manufacturing industry is highly competitive. Competition for sales exists domestically
and internationally at the manufacturer, distributor and towing-operator levels and is based primarily on product quality and
innovation, reputation, technology, customer service, product availability and price. Competition for sales also comes from the market
for used towing and recovery equipment. Certain of our competitors may have substantially greater financial and other resources and
may provide more attractive dealer and retail customer financing alternatives than us. If these competitors are able to make it more
difficult for us to attract or retain customers, it could have a negative impact on our sales, revenue and financial performance.
Our future success depends upon our ability to develop or acquire proprietary products and technology and assertions against us
relating to intellectual property rights could harm our business.
Historically, we have been able to develop or acquire patented and other proprietary product innovations which have allowed
us to produce what management believes to be technologically advanced products relative to most of our competition. However,
certain of our patents have expired, and others will expire in the next few years, and as a result, we may not have a continuing
competitive advantage through proprietary products and technology. If we are unable to develop or acquire new products and
technology in the future, our ability to maintain market share, and, consequently, our revenues and operating results, may be
negatively affected.
Third parties may claim that our products infringe their patents or other intellectual property rights. If a competitor were to
challenge our patents, or assert that our products or processes infringe its patent or other intellectual property rights, we could incur
substantial litigation costs, be forced to design around their patents, pay substantial damages or even be forced to cease our operations,
any of which could be expensive and/or have an adverse effect on our operating results. Third party infringement claims, regardless of
their outcome, would not only consume our financial resources, but also would divert the time and effort of our management and
could result in our customers or potential customers deferring or limiting their purchase or use of the affected products or services
until resolution of the litigation.
We depend upon skilled labor to manufacture our products, and if we experience problems hiring and retaining skilled labor, our
business may be negatively affected.
The timely manufacture and delivery of our products requires an adequate supply of skilled labor, and the operating costs of
our manufacturing facilities can be adversely affected by high turnover in skilled positions. Accordingly, our ability to increase sales,
productivity and net earnings will be limited to a degree by our ability to employ the skilled laborers necessary to meet our
requirements. There can be no assurance that we will be able to maintain an adequate skilled labor force necessary to efficiently
operate our facilities. In addition, while our employees are not currently members of a union, there can be no assurance that the
employees at any of our facilities will not choose to become unionized in the future.
Our sales to governmental entities through prime contractors are subject to special risks.
While no one customer accounted for more than 10% of our consolidated net sales for 2012 and 2013, a significant
concentration of our consolidated net sales were made to the U.S. federal government through prime contractors in the three prior
years. Such sales accounted for 26.8% of our consolidated net sales for 2011. At this time we do not expect to receive any new or
follow-on U.S. government-related orders in the near term. Our U.S. and other government business is subject to the following risks,
among others: (i) this business is susceptible to changes in government spending, which may reduce future revenues; (ii) most of our
contracts with governmental entities through prime contractors are fixed-price contracts, and our actual costs on any of these contracts
could exceed our projected costs, (iii) competition for the award of these contracts is intense, and we may not be successful in bidding
on future contracts, and (iv) the products we sell to governmental entities are subject to highly technical requirements, and any failure
to comply with these requirements could result in unanticipated retrofit costs, delayed acceptance of products, late or reduced payment
or cancellation of the contract. We continue to work to secure additional U.S. and other governmental orders, but we cannot predict
the success or timing of any such efforts.
The effects of new regulations relating to conflict minerals may adversely affect our business.
On August 22, 2012, under the Dodd-Frank Wall Street Reform and Consumer Protection Act, the SEC adopted new
requirements for companies that use certain minerals and metals, known as conflict minerals, in their products, whether or not these
products are manufactured by third parties. These requirements will require companies to perform due diligence, and disclose and
report whether or not such minerals originate from the Democratic Republic of Congo and adjoining countries. We will have to
perform due diligence to determine whether such minerals are used in the manufacture of our products. However, the implementation
of these new requirements could adversely affect the sourcing, availability and pricing of such minerals if they are found to be used in
the manufacture of our products. In addition, we will incur additional costs to comply with the disclosure requirements, including
costs related to determining the source of any of the relevant minerals and metals used in our products. The Company’s supply chain
is complex, and, as a result, we expect significant difficulty in verifying the origins for all “conflict minerals” used in our products and
certifying that our products are “conflict free.” We may face reputational challenges from customers, investors or others if we are
unable to verify the origins for all “conflict minerals” used in our products. In such event, we may also face difficulties in satisfying
customers who require that all of the components of our products are certified as conflict mineral free.
10
The catastrophic loss of one of our manufacturing facilities could harm our business, financial condition and results of
operations.
While we manufacture our products in several facilities and maintain insurance covering our facilities, including business
interruption insurance, a catastrophic loss of the use of all or a portion of one of our manufacturing facilities due to accident, labor
issues, weather conditions, natural disaster, civil unrest or otherwise, whether short or long-term, could materially harm our business,
financial condition and results of operations.
Environmental and health and safety liabilities and requirements could require us to incur material costs.
We are subject to various U.S. and foreign laws and regulations relating to environmental protection and worker health and
safety, including those governing discharges of pollutants into the ground, air and water; the generation, handling, use, storage,
transportation, treatment and disposal of hazardous substances and waste materials; and the investigation and cleanup of contaminated
properties.
Environmental and health-related requirements are complex, subject to change and have tended to become more and more
stringent. Future developments could cause us to incur various expenditures and could also subject us to fines or sanctions, obligations
to investigate or remediate contamination or restore natural resources, liability for third party property damage or personal injury
claims and the imposition of new permitting requirements and/or the modification or revocation of our existing operating permits,
among other effects. These and other developments could materially harm our business, financial condition and results of operation.
Any loss of the services of our key executives could have a material adverse impact on our operations.
Our success is highly dependent on the continued services of our management team. The loss of services of one or more key
members of our senior management team could have a material adverse effect on us.
A product warranty or product liability claim in excess of our insurance coverage, or an inability to acquire or maintain insurance
at commercially reasonable rates, could have a material adverse effect upon our business.
We are subject to various claims, including product warranty and product liability claims arising in the ordinary course of
business, and may at times be a party to various legal proceedings incidental to our business. We maintain reserves and liability
insurance coverage at levels based upon commercial norms and our historical claims experience. If we manufacture poor quality
products or receive defective materials, we may incur unforeseen costs in excess of what we have reserved in our financial statements.
A successful product warranty, product liability or other claim brought against us in excess of our insurance coverage, or the inability
of us to acquire or maintain insurance at commercially reasonable rates, could have a material adverse effect upon our business,
operating results and financial condition.
Our stock price may fluctuate greatly as a result of the general volatility of the stock market.
From time to time, there may be significant volatility in the market price for our common stock. Our quarterly operating
results, changes in earnings estimated by analysts, if any, changes in general conditions in our industry or the economy or the financial
markets or other developments affecting us, including our ability to pay dividends, could cause the market price of our common stock
to fluctuate substantially.
Our charter and bylaws contain anti-takeover provisions that may make it more difficult or expensive to acquire us in the future or
may negatively affect our stock price.
Our charter and bylaws contain restrictions that may discourage other persons from attempting to acquire control of us,
including, without limitation, prohibitions on shareholder action by written consent and advance notice requirements regarding
amendments to certain provisions of our charter and bylaws. In addition, our charter authorizes the issuance of up to 5,000,000 shares
of preferred stock. The rights and preferences for any series of preferred stock may be set by the board of directors, in its sole
discretion and without shareholder approval, and the rights and preferences of any such preferred stock may be superior to those of
common stock and thus may adversely affect the rights of holders of common stock.
The requirements and restrictions imposed by our current credit facility restrict our ability to operate our business, and failure to
comply with these requirements and restrictions could adversely affect our business.
The terms of our current credit facility restrict our ability and our subsidiaries’ ability to, among other things, incur additional
indebtedness, guarantee the indebtedness of another person or make loans or investments in certain situations, incur liens, sell,
discount or dispose of accounts receivable or promissory notes, enter into any new line of business, permit certain loans to officers or
employees, sell, transfer, convey or grant any security interest in any material trademark, merge or consolidate with any other person,
or sell, transfer or dispose of all or substantially all of our assets. In addition, covenants under our current credit facility restrict our
ability to pay cash dividends if the Company would be in violation of the minimum tangible net worth test or the leverage ratio test in
the current loan agreement as a result of the dividend. Our current credit facility also requires us to meet certain financial tests, and to
comply with certain other reporting, affirmative and negative covenants.
11
If we fail to comply with the requirements of our current credit facility, such non-compliance would result in an event of
default. If not waived by the bank, such event of default would result in the acceleration of any amounts due under the current credit
facility, and may permit the bank to foreclose on our assets.
ITEM 1B UNRESOLVED STAFF COMMENTS
None.
ITEM 2.
PROPERTIES
We operate four manufacturing facilities in the United States. The facilities are located in Ooltewah (Chattanooga),
Tennessee; Hermitage, Pennsylvania; Mercer, Pennsylvania; and Greeneville, Tennessee. The Ooltewah plant, containing
approximately 302,000 square feet, produces light and heavy duty wreckers; the Hermitage plant, containing approximately 134,000
square feet, produces car carriers; the Mercer plant, containing approximately 110,000 square feet, produces car carriers and light duty
wreckers; and the Greeneville plant, containing approximately 136,000 square feet (plus 40,000 square feet of leased property),
produces car carriers and trailers.
We also have manufacturing operations at two facilities located in the Lorraine region of France, which have, in the
aggregate, approximately 180,000 square feet, and manufacturing operations in Norfolk, England, with approximately 48,000 square
feet.
ITEM 3.
LEGAL PROCEEDINGS
We are, from time to time, a party to litigation arising in the normal course of our business. Litigation is subject to various
inherent uncertainties, and it is possible that some of these matters could be resolved unfavorably to us, which could result in
substantial damages against us. We have established accruals for matters that are probable and reasonably estimable and maintain
product liability and other insurance that management believes to be adequate. Management believes that any liability that may
ultimately result from the resolution of these matters in excess of available insurance coverage and accruals will not have a material
adverse effect on our consolidated financial position or results of operations.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
12
PART II
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND
ISSUER PURCHASES OF EQUITY SECURITIES
Market Price of and Dividends on the Registrant’s Common Equity and Related Stockholder Matters
Our common stock is traded on the New York Stock Exchange under the symbol “MLR.” The following table sets forth the quarterly
range of high and low sales prices for the common stock for the periods indicated.
Period
Year Ended December 31, 2012
First Quarter
Second Quarter
Third Quarter
Fourth Quarter
Year Ended December 31, 2013
First Quarter
Second Quarter
Third Quarter
Fourth Quarter
Year Ending December 31, 2014
First Quarter (through February 28, 2014)
Price Range of Common Stock
High
Low
$
$
$
$
17.80
17.56
17.18
16.45
17.23
16.93
17.25
19.16
14.80
13.55
14.50
14.00
14.91
14.73
15.30
16.42
$
19.21
$
16.89
The approximate number of holders of record and beneficial owners of common stock as of December 31, 2013 was 542 and
2,250 respectively.
Prior to March 2010, we had never declared cash dividends on our common stock. On March 8, 2010, our board of directors
adopted a dividend policy to consider and pay annual cash dividends subject to our ability to satisfy all applicable statutory and
regulatory requirements and our continued financial strength. On May 10, 2011, the Company’s board of directors approved a
dividend policy to consider and pay quarterly dividends on its common stock subject to the Company’s ability to satisfy all applicable
statutory requirements and the Company’s continued financial strength, replacing the previous policy of paying annual cash dividends.
Dividend payments made for 2013, 2012 and 2011 were as follows:
Payment
Record Date
Payment Date
Dividend
(per share)
Amount
(in thousands)
Q1 2011
Q2 2011
Q3 2011
Q4 2011
Total for 2011
Q1 2012
Q2 2012
Q3 2012
Q4 2012
Total for 2012
Q1 2013
Q2 2013
Q3 2013
Q4 2013
Total for 2013
March 17, 2011
May 23, 2011
August 19, 2011
December 5, 2011
March 24, 2011
May 31, 2011
August 26, 2011
December 19, 2011
March 19, 2012
June 18, 2012
September 17, 2012
December 10, 2012
March 26, 2012
June 25, 2012
September 24, 2012
December 17, 2012
March 18, 2013
June 17, 2013
September 16, 2013
December 9, 2013
March 25, 2013
June 24, 2013
September 23, 2013
December 16, 2013
$
$
$
$
$
$
0.12
0.12
0.12
0.12
0.48
0.13
0.13
0.13
0.13
0.52
0.14
0.14
0.14
0.14
0.56
$
$
$
$
$
$
1,415
1,429
1,365
1,336
5,545
1,437
1,439
1,439
1,447
5,762
1,569
1,573
1,575
1,577
6,294
13
Any future determination as to the payment of cash dividends will depend upon such factors as earnings, capital
requirements, our financial condition, restrictions in financing agreements and other factors deemed relevant by our board of directors.
Covenants under our current credit facility restrict the payment of cash dividends if the Company would be in violation of the
minimum tangible net worth test or the leverage ratio test in the current loan agreement as a result of the dividend, among various
other restrictions.
Sales of Unregistered Securities
We did not sell any unregistered securities during the year ended December 31, 2013.
Performance Graph
The following line graph compares the percentage change in the cumulative shareholder return of our common stock with
The New York Stock Exchange Composite Index and the Standard & Poor’s Construction Index over the period of time from
December 31, 2008 through December 31, 2013. The respective returns assume reinvestment of dividends paid.
Miller Industries, Inc.
NYSE Composite Index
S&P Construction Index
12/31/08
12/31/09
12/31/10
12/30/11
12/30/12
100
100
100
214
125
163
268
138
282
297
130
248
288
155
287
12/31/13
352
181
280
14
ITEM 6.
SELECTED FINANCIAL DATA
The following table presents selected statements of income data and selected balance sheet data on a consolidated basis. We
derived the selected historical consolidated financial data from our audited consolidated financial statements and related notes. You
should read this data together with Item 7–”Management’s Discussion and Analysis of Financial Condition and Results of Operations”
and our consolidated financial statements and related notes that are a part of this Annual Report on Form 10 K.
Statements of Income Data:
Net Sales
Costs of operations
Gross Profit
Operating Expenses:
Selling, general, and administrative expenses
Interest expense, net
Other expense (income)
Total operating expenses
Income before income taxes
Income tax provision
Net income
Net loss attributable to noncontrolling interests
Net income attributable to Miller Industries, Inc.
Basic income per common share
Diluted income per common share
Weighted average shares outstanding:
Basic
Diluted
Balance Sheet Data:
Working capital
Total assets
Long-term obligations, less current portion
Common shareholders’ equity
Other Data:
Cash dividend per common share
2013
$ 404,170
361,734
42,436
Years Ended December 31,
2011
(In thousands except per share data)
2012
2010
2009
342,663 $ 412,659 $ 306,897 $ 237,567
202,272
302,606
35,295
40,057
260,566
46,331
342,557
70,102
28,323
369
(119 )
28,573
27,507
712
(815 )
27,404
31,407
728
(161 )
31,974
26,665
305
71
27,041
24,905
883
(442 )
25,346
13,863
5,175
8,688
542
9,230 $
12,653
3,531
9,122 $
--
38,128
15,120
23,008 $
--
19,290
7,583
11,707 $
--
9,122 $
23,008 $
11,707 $
0.82
0.82
0.82 $
0.82 $
1.98 $
1.92 $
1.00 $
0.96 $
$
$
$
$
9,949
3,933
6,016
--
6,016
0.52
0.51
11,233
11,324
11,068
11,258
11,600
11,984
11,671
12,163
11,611
11,902
2013
2012
December 31,
2011
2010
2009
$ 120,821
226,669
--
161,713
115,178 $ 109,760 $ 106,831 $
211,842
202,351
--
--
152,651
157,490
199,876
5
150,568
94,247
172,320
185
141,439
2013
2012
December 31,
2011
2010
2009
$
0.56 $
0.52 $
0.48 $
0.10 $
--
15
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
The following discussion of our results of operations and financial condition should be read in conjunction with the
Consolidated Financial Statements and Notes thereto. Unless the context indicates otherwise, all dollar amounts in this Management’s
Discussion and Analysis of Financial Condition and Results of Operations are in thousands.
Executive Overview
Miller Industries, Inc. is The World’s Largest Manufacturer of Towing and Recovery Equipment®, with domestic
manufacturing subsidiaries in Tennessee and Pennsylvania, and foreign manufacturing subsidiaries in France and the United
Kingdom. We offer a broad range of equipment to meet our customers’ design, capacity and cost requirements under our Century®,
Vulcan®, Challenger®, Holmes®, Champion®, Chevron™, Eagle®, Titan®, Jige™ and Boniface™ brand names.
Our management focuses on a variety of key indicators to monitor our overall operating and financial performance. These
indicators include measurements of revenue, operating income, gross margin, net income, earnings per share, capital expenditures and
cash flow.
We derive revenues primarily from product sales made through our network of domestic and foreign independent
distributors. Our revenues are sensitive to a variety of factors including general economic conditions as well as demand for, and price
of, our products, our technological competitiveness, our reputation for providing quality products and reliable service, competition
within our industry and the cost of raw materials (including aluminum, steel and petroleum-related products). We had substantial
domestic and foreign government related sales for several years up through 2011, representing approximately 26.8% of our 2011 net
sales. These government related sales declined substantially beginning in 2012 and continuing into 2013. However, our core
commercial customer business grew in the latter part of 2012 and throughout 2013 as economic conditions and customer sentiment
improved.
Our industry is cyclical in nature and in recent years the overall demand for our products and our resulting revenues
continued to be negatively affected by:
● wavering levels of consumer confidence;
● volatility and disruption in domestic and international capital and credit markets and the resulting decrease in the
availability of financing, including floor plan financing, for our customers and towing operators;
●
●
●
significant periodic increases in fuel and insurance costs and their negative effect on the ability of our customers to
purchase towing and related equipment;
the overall effects of the global economic downturn;
and, currently, the slow economic recovery.
We remain concerned about the continuing effects of these factors on the towing and recovery industry, and we continue to
monitor our overall cost structure to see that it remains in line with business conditions.
In addition, we have been and will continue to be affected by changes in the prices that we pay for raw materials, particularly
aluminum, steel, petroleum-related products and other raw materials, which represent a substantial part of our total cost of operations.
In the past, as we have determined necessary, we have implemented price increases to offset these higher costs. We also developed
alternatives to some of the components used in our production process that incorporate these raw materials, and our suppliers have
implemented these alternatives in the production of our component parts. We continue to monitor raw material prices and availability
in order to more favorably position the Company in this dynamic market.
Our financial results for 2013 were negatively impacted by the Delavan joint venture, which was formed in December 2012
to sell larger capacity automobile transport trailers in the United States and Canada. Financial results for 2013 include losses before
income taxes that are directly attributable to the Delavan joint venture of approximately $1.3 million. The Company also generated
additional indirect losses associated with the Greeneville, Tennessee facility in connection with its manufacturing and supply
agreement for the joint venture. Following a review and evaluation of operations related to the Delavan joint venture, the Company
made the decision to consider strategic alternatives with regard to the venture. On February 28, 2014, the Company entered into an
agreement to sell its interest in the Delavan joint venture to its joint venture partner, which is expected to close on March 31,
2014. Our Greeneville facility will cease the manufacturing of Delavan products by the end of the first quarter 2014 as it winds down
Delavan production. The Company expects additional losses of approximately $0.5 million related to the Delavan joint venture in the
first quarter of 2014.
There were no borrowings under our current credit facility at December 31, 2013.
16
Critical Accounting Policies
Our consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United
States of America, which require us to make estimates. Certain accounting policies are deemed “critical,” as they require
management’s highest degree of judgment, estimates and assumptions. A discussion of critical accounting policies, the judgments and
uncertainties affecting their application and the likelihood that materially different amounts would be reported under different
conditions or using different assumptions follows:
Accounts Receivable
We extend credit to customers in the normal course of business. Collections from customers are continuously monitored and
an allowance for doubtful accounts is maintained based on historical experience and any specific customer collection issues. While
such bad debt expenses have historically been within expectations and the allowance established, there can be no assurance that we
will continue to experience the same credit loss rates as in the past.
Inventory
Inventory costs include materials, labor and factory overhead. Inventories are stated at the lower of cost or market (net
realizable value), determined on a first-in, first-out basis. Appropriate consideration is given to obsolescence, valuation and other
factors in determining net realizable value. Revisions of these estimates could result in the need for adjustments.
Long-Lived Assets
Long-lived assets are reviewed for impairment whenever events or circumstances indicate that the carrying amount of these
assets may not be fully recoverable. When a determination has been made that the carrying amount of long-lived asset may not be
fully recovered, the amount of impairment is measured by comparing an asset’s estimated fair value to its carrying value. The
determination of fair value is based on projected future cash flows discounted at a rate determined by management, or if available
independent appraisals or sales price negotiations. The estimation of fair value includes significant judgment regarding assumptions of
revenue, operating costs, interest rates, property and equipment additions, and industry competition and general economic and
business conditions among other factors. We believe that these estimates are reasonable; however, changes in any of these factors
could affect these evaluations. Based on these estimates, we believe that our long-lived assets are appropriately valued.
Goodwill
Goodwill is tested for impairment annually or if an event or circumstance occurs that would more likely than not reduce the
fair value of the reporting unit below the carrying amount. Goodwill is reviewed for impairment utilizing a qualitative assessment or a
two-step process. If we choose to perform a qualitative analysis of goodwill and determine that fair value more likely than not exceeds
the carrying value, no further testing is needed. If we choose the two-step approach, the first step identifies potential impairment by
comparing the fair value of the reporting unit with its carrying value. If the fair value exceeds the carrying value the second step is not
necessary. If the carrying value is more than the fair value, the second step of testing is performed to compare the fair value of the
goodwill with its carrying value. An impairment loss would be recognized to the extent that the carrying value of the goodwill exceeds
its fair value. We cannot predict the occurrence of certain events or changes in circumstances that might adversely affect the carrying
value of goodwill. Such events might include, but are not limited to, the impact of the economic environment or a material change in a
relationship with significant customers.
Warranty Reserves
We estimate expense for product warranty claims at the time products are sold. These estimates are established using
historical information about the nature, frequency, and average cost of warranty claims. We review trends of warranty claims and take
actions to improve product quality and minimize warranty claims. We believe the warranty reserve is adequate; however, actual
claims incurred could differ from the original estimates, requiring adjustments to the accrual.
17
Income Taxes
We recognize deferred tax assets and liabilities based on differences between the financial statement carrying amounts and
the tax bases of assets and liabilities. We consider the need to record a valuation allowance to reduce deferred tax assets to the amount
that is more likely than not to be realized. We consider tax loss carryforwards, reversal of deferred tax liabilities, tax planning and
estimates of future taxable income in assessing the need for a valuation allowance. If uncertain tax positions exist, we record interest
and penalties related to the uncertain tax positions as income tax expense in our consolidated statements of income.
Revenues
Under our accounting policies, revenues are recorded when the risk of ownership for products has transferred to independent
distributors or other customers, which generally occurs on shipment. From time to time, revenue is recognized under a bill and hold
arrangement. Recognition of revenue on bill and hold arrangements occurs when risk of ownership has passed to the customer, a fixed
written commitment has been provided by the customer, the goods are complete and ready for shipment, the goods are segregated
from inventory, no performance obligation remains, and a schedule for delivery has been established. While we manufacture only the
bodies of wreckers, which are installed on truck chassis manufactured by third parties, we frequently purchase the truck chassis for
resale to our customers. Sales of company-purchased truck chassis are included in net sales. Margin percentages are substantially
lower on completed recovery vehicles containing company-purchased chassis because the markup over the cost of the chassis is
nominal.
Foreign Currency Translation
The functional currency for our foreign operations is the applicable local currency. The translation from the applicable
foreign currencies to U.S. dollars is performed for balance sheet accounts using current exchange rates in effect at the balance sheet
date, historical rates for equity and the weighted average exchange rate during the period for revenue and expense accounts. Foreign
currency translation adjustments are included in shareholders’ equity. Intercompany transactions denominated in a currency other than
the functional currency are remeasured into the functional currency. Gains and losses resulting from foreign currency transactions are
included in other income and expense in our consolidated statements of income.
Results of Operations
The following table sets forth, for the years indicated, the components of the consolidated statements of income expressed as
a percentage of net sales.
Net Sales
Costs of operations
Gross Profit
Operating Expenses:
Selling, general and administrative
Interest expense
Other expense (income)
Total operating expenses
Income before income taxes
2013
100%
89.5%
10.5%
2012
100.0 %
88.3 %
11.7 %
2011
100.0%
83.0%
17.0%
7.0%
0.1%
0.0%
7.1%
3.4%
8.0 %
0.2 %
(0.2 )%
8.0 %
3.7 %
7.6%
0.2%
0.0%
7.8%
9.2%
Year Ended December 31, 2013 Compared to Year Ended December 31, 2012
Net sales were $404,170 for the year ended December 31, 2013, compared to $342,663 for the year ended December 31,
2012, an increase of 18.0%. The increase in net sales was attributable to increased demand levels from our commercial customers and
corresponding increases in production levels based on recovering economic conditions and improving consumer sentiment.
Costs of operations increased 19.6% to $361,734 for the year ended December 31, 2013 from $302,606 for the year ended
December 31, 2012, which was attributable to higher sales volumes. Overall, costs of operations as a percentage of net sales increased
from 88.3% for the year ended December 31, 2012 to 89.5% for the year ended December 31, 2013, primarily due to product mix
during the quarter consisting of a higher percentage of lower margin chassis sales.
Selling, general and administrative expenses for the year ended December 31, 2013 increased to $28,323 from $27,507 for
the year ended December 31, 2012. The increase in expenses was primarily attributable to higher sales and production levels. As a
percentage of net sales, selling, general and administrative expenses decreased to 7.0% for 2013 from 8.0% for 2012 due to the fixed
nature of certain of these expenses.
Interest expense decreased to $369 for the year ended December 31, 2013 from $712 for the year ended December 31, 2012.
Decreases were primarily due to decreases in interest on distributor floor planning and on chassis purchases.
18
Other income relates to foreign currency transaction gains and losses. During 2013, the net gain was $119 compared to a net
gain of $815 for 2012.
The provision for income taxes for the years ended December 31, 2013 and 2012 reflects a combined federal, state and
foreign tax rate of 37.3% and 27.9%, respectively. Income taxes for 2012 include income tax benefits of approximately $1,361. The
benefits resulted primarily from Federal Domestic Production Activity Deductions as well as from Federal Research and Development
and other tax credits recognized in the period.
19
Year Ended December 31, 2012 Compared to Year Ended December 31, 2011
Net sales were $342,663 for the year ended December 31, 2012, compared to $412,659 for the year ended December 31,
2011, a decrease of 17.0%. The decrease in net sales was attributable to the absence of revenues in 2012 from follow-on orders from a
prime contractor for government-related sales, which represented 26.8% of total 2011 sales, offset partially by increased activity from
our commercial customers.
Costs of operations decreased 11.7% to $302,606 for the year ended December 31, 2012 from $342,557 for the year ended
December 31, 2011, which was attributable to decreases in governmental sales described above. Overall, costs of operations as a
percentage of net sales increased from 83.0% for the year ended December 31, 2011 to 88.3% for the year ended December 31, 2012,
primarily due to product mix during the period consisting of a higher percentage of lower margin chassis sales.
Selling, general and administrative expenses for the year ended December 31, 2012 decreased to $27,507 from $31,407 for
the year ended December 31, 2011. The decrease in expenses was primarily attributable to the lower sales levels during the period,
and resulting decreased sales commissions and incentives. As a percentage of net sales, selling, general and administrative expenses
increased to 8.0% for 2012 from 7.6% for 2011 due to the fixed nature of certain of these expenses.
Interest expense remained constant at $700 for the year ended December 31, 2012 and for 2011.
Other expense (income) relates to foreign currency transaction gains and losses. During 2012, the net gain was $815
compared to a net gain of $161 for 2011.
The provision for income taxes for the years ended December 31, 2012 and 2011 reflects a combined federal, state and
foreign tax rate of 27.9% and 39.7%, respectively. Income taxes for 2012 include income tax benefits of approximately $1,361. The
benefits resulted primarily from Federal Domestic Production Activity Deductions as well as from Federal Research and Development
and other tax credits recognized in the period.
Liquidity And Capital Resources
Cash provided by operating activities was $1,192 for the year ended December 31, 2013, compared to $6,109 for the year
ended December 31, 2012, and $28,338 for the year ended December 31, 2011. The cash used in operating activities for 2013 is
attributable to increases in accounts receivable and inventories. These increases were offset by increases in accounts payable and
accrued liabilities. Certain components of accounts receivable and accounts payable have extended collection and payment terms.
Cash used in investing activities was $2,335 for the year ended December 31, 2013, compared to $2,836 for the years ended
December 31, 2012, and $2,767 for the year ended December 31, 2011. The cash used in investing activities for 2013 was primarily
for the purchase of property, plant and equipment.
Cash used in financing activities was $5,448 for the year ended December 31, 2013, compared to $4,500 for the year ended
December 31, 2012, and $21,543 for the year ended December 31, 2011. The cash used in financing activities in 2013 and 2012 was
primarily to pay cash dividends, partially offset by proceeds from the exercise of stock options. For 2011, cash used in financing was
primarily used for stock repurchases.
Over the past year, we generally have used available cash flow from operations to pay dividends and to pay for capital
expenditures.
As of December 31, 2013, we had cash and cash equivalents of $42,864, exclusive of unused availability under our current
credit facility. Our primary cash requirements include working capital, capital expenditures and the funding of any declared cash
dividends. We expect our primary sources of cash to be cash flow from operations and cash and cash equivalents on hand at December
31, 2013, with borrowings under our current credit facility being available if needed. We expect these sources to be sufficient to
satisfy our cash needs during 2014 and for the next several years. However, our ability to satisfy our cash needs will substantially
depend upon a number of factors including our future operating performance, taking into account the economic and other factors
discussed above and elsewhere in this Annual Report, as well as financial, business and other factors, many of which are beyond our
control.
20
Contractual Obligations
The following is a summary of our contractual obligations as of December 31, 2013.
Contractual Obligations (1)
Total
Operating Lease Obligations
Purchase Obligations (2)
Commitments for construction and acquisition of plant
$
1,256 $
22,231
and equipment
Total
413
413
$ 23,900 $ 23,226
$
--
608 $
--
66 $
Payment Due By Period (in thousands)
Less than
1 year
582
22,231
608 $
--
1-3 years
3-5 years
$
66 $
--
More than
5 years
--
--
--
--
(1) Amounts do not include potential contingent obligations of $31.9 million under repurchase commitments with third-party lenders
in the event of independent distributor customer default.
(2) Purchase obligations represent open purchase orders for raw materials and other components issued in the normal course of
business.
Credit Facility and Other Obligations
Credit Facility
On April 6, 2010 we entered into a Loan Agreement with First Tennessee Bank National Association for a $20.0 million
unsecured revolving credit facility. On December 21, 2011, the credit facility was renewed and our unsecured revolving credit facility
was increased to $25.0 million. On December 17, 2013, the credit facility was further renewed to extend the maturity date to March
31, 2016. The current credit facility contains customary representations and warranties, events of default, and financial, affirmative
and negative covenants for loan agreements of this kind. Covenants under the current credit facility restrict the payment of cash
dividends if the Company would be in violation of the minimum tangible net worth test or the leverage ratio test in the current loan
agreement as a result of the dividend, among various restrictions.
21
In the absence of a default, all borrowings under the current credit facility bear interest at the LIBOR Rate plus 1.50% per
annum. The Company will pay a non-usage fee under the current loan agreement at a rate per annum equal to between 0.15% and
0.35% of the unused amount of the current credit facility, which fee shall be paid quarterly.
Outstanding Borrowings
There were no outstanding borrowings under the credit facility as of December 31, 2013 and 2012.
Interest Rate Sensitivity
Changes in interest rates affect the interest paid on indebtedness under our credit facility because the outstanding amounts of
indebtedness under our current credit facility are subject to variable interest rates. Under our credit facility, the non-default rate of
interest is equal to the LIBOR Market Index Rate plus 1.50% per annum (for a rate of interest of 1.67% at December 31, 2013).
Because there were no amounts outstanding under our credit facility, a one percent change in the interest rate on our variable-rate debt
would not have materially impacted our financial position, results of operations or cash flows for the year ended December 31, 2013.
Other Long-Term Obligations
We had approximately $1,256 in non-cancellable operating lease obligations at December 31, 2013.
Recent Accounting Pronouncements
Recently Adopted Standards
In February 2013, the FASB issued Accounting Standards Update No. 2013-02, Comprehensive Income (Topic 220):
Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income (FASB ASU 2013-02). The amendment in this
update requires an entity to report the effect of significant reclassifications out of accumulated other comprehensive income on the
respective line items in net income if the amount being reclassified is required under U.S. generally accepted accounting principles to
be reclassified in its entirety to net income. The provisions of FASB ASU 2013-02 are effective for annual and interim periods
beginning after December 15, 2012. The adoption of the provisions of FASB ASU 2013-02 did not have a material impact on the
Company’s consolidated financial statements.
In December 2011, the FASB issued Accounting Standards Update 2011-11, Balance Sheet (Topic 210): Disclosures about
Offsetting Assets and Liabilities (FASB ASU 2011-11). The amendments in this update will require an entity to disclose information
about offsetting and related arrangements to enable users of its financial statements to understand the effect of those arrangements on
its financial position. The intention is to enhance required disclosures by improving information about financial instruments and
derivative instruments that are either offset in accordance with FASB guidance or are subject to an enforceable master netting
arrangement; irrespective of whether they are offset in accordance with FASB guidance. The provisions of FASB ASU 2011-11 are
effective for annual and interim reporting periods beginning on or after January 1, 2013. The adoption of the provisions of FASB ASU
2011-11 did not have a material impact on the Company’s consolidated financial statements.
Recently Issued Standards
There are no recently issued accounting standards for which the Company expects a material impact on our consolidated
financial statements.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
In the normal course of our business, we are exposed to market risk from changes in interest rates and foreign currency
exchange rates that could impact our results of operations and financial position.
22
Interest Rate Risk
Changes in interest rates affect the interest paid on indebtedness under our current credit facility because the outstanding
amounts of indebtedness under our current credit facility are subject to variable interest rates. Under our current credit facility, the
non-default rate of interest is equal to the LIBOR Market Index Rate plus 1.50% per annum (for a rate of interest of 1.67% at
December 31, 2013). Because there were no amounts outstanding under our current credit facility, a one percent change in the interest
rate on our variable-rate debt would not have materially impacted our financial position, results of operations or cash flows for the
year ended December 31, 2013.
Foreign Currency Risk
We are subject to risk arising from changes in foreign currency exchange rates related to our international operations in
Europe. We manage our exposure to our foreign currency exchange rate risk through our regular operating and financing activities.
Additionally, from time to time, we enter into certain forward foreign currency exchange contracts. Because we report in U.S. dollars
on a consolidated basis, foreign currency exchange fluctuations could have a translation impact on our financial position. At
December 31, 2013, we recognized a $884 increase in our foreign currency translation adjustment account compared with December
31, 2012. During the years ended December 31, 2013, 2012 and 2011, the impact of foreign currency exchange rate changes on our
results of operations and cash flows was a $119 gain, $815 gain and $161 gain, respectively.
ITEM 8.
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The response to this item is included in Part IV, Item 15 of this Report.
ITEM 9.
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE
None.
ITEM 9A. CONTROLS AND PROCEDURES
Disclosure Controls and Procedures
We carried out an evaluation, under the supervision and with the participation of our management, including our chief
executive and chief financial officers, of the effectiveness of the design and operation of our disclosure controls and procedures, as
defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as of the end of the period covered by this
report. Based upon this evaluation, our Chief Executive Officer and our Chief Financial Officer have concluded that the disclosure
controls and procedures were effective as of the end of the period covered by this Annual Report to ensure that information required to
be disclosed in our reports that we file or submit under the Exchange Act are recorded, processed, summarized and reported within the
time periods specified in Securities and Exchange Commission rules and forms.
Management’s Report On Internal Control Over Financial Reporting
Management of Miller Industries, Inc. is responsible for establishing and maintaining adequate internal control over financial
reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act). Our internal control over financial reporting is a
process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of consolidated
financial statements for external purposes in accordance with accounting principles generally accepted in the United States of
America. The Company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the
maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the
Company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of consolidated financial
statements in accordance with U.S. generally accepted accounting principles, and that receipts and expenditures of the Company are
being made only in accordance with authorizations of management and directors of the Company; and (3) provide reasonable
assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company’s assets that could
have a material effect on the consolidated financial statements.
23
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also,
projections of any evaluation of effectiveness to future periods are subject to the risk that controls may be inadequate because of
changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Management, including our principal executive officers and principal financial officer, conducted an evaluation of the
effectiveness of our internal control over financial reporting as of December 31, 2013. In making this assessment, management used
the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in “Internal Control—Integrated
Framework” (1992). Based on our assessment under those criteria, we concluded that, as of December 31, 2013, we maintained
effective internal control over financial reporting.
Joseph Decosimo and Company, PLLC, the independent registered public accounting firm who audited the Company’s
consolidated financial statements included in this report, has issued an audit report on the effectiveness of the Company’s internal
control over financial reporting as of December 31, 2013, which appears herein.
March 5, 2014
24
Report of Independent Registered Public Accounting Firm
Board of Directors and Shareholders
Miller Industries, Inc.
Ooltewah, Tennessee
We have audited the internal control over financial reporting of Miller Industries, Inc. and subsidiaries as of December 31,
2013, based on criteria established in Internal Control—Integrated Framework (1992) issued by the Committee of Sponsoring
Organizations of the Treadway Commission (the COSO criteria). Miller Industries, Inc.’s management is responsible for maintaining
effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting
included in the accompanying Management’s Report on Internal Control Over Financial Reporting. Our responsibility is to express an
opinion on the Company’s internal control over financial reporting based on our audit.
We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United
States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal
control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal
control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating
effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the
circumstances. We believe that our audit provides a reasonable basis for our opinion.
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally
accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1)
pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the
assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial
statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being
made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance
regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a
material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also,
projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of
changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
In our opinion, Miller Industries, Inc. and subsidiaries maintained, in all material respects, effective internal control over
financial reporting as of December 31, 2013, based on the COSO criteria.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States),
the consolidated balance sheets of Miller Industries, Inc. and subsidiaries as of December 31, 2013 and 2012, and the related
consolidated statements of income, comprehensive income, shareholders’ equity, and cash flows for each of the three years in the
period ended December 31, 2013, and our report dated March 5, 2014, expressed an unqualified opinion on those consolidated
financial statements.
/s/ Joseph Decosimo and Company, PLLC
Chattanooga, Tennessee
March 5, 2014
25
Changes in Internal Control Over Financial Reporting
There were no changes in our internal control over financial reporting that occurred during our most recent fiscal quarter that
have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
ITEM 9B. OTHER INFORMATION
None.
26
PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
The Proxy Statement for our Annual Meeting of Shareholders, to be filed with the Securities and Exchange Commission, will
contain information relating to our directors and audit committee, compliance with Section 16(a) of the Exchange Act, and our code of
ethics applicable to our chief executive, financial and accounting officers, which information is incorporated by reference herein.
Information relating to our executive officers is included in Item 1 of this report.
ITEM 11. EXECUTIVE COMPENSATION
The Proxy Statement for our Annual Meeting of Shareholders, to be filed with the Securities and Exchange Commission, will
contain information relating to director and executive officer compensation, which information is incorporated by reference herein.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED
STOCKHOLDER MATTERS
The Proxy Statement for our Annual Meeting of Shareholders, to be filed with the Securities and Exchange Commission, will
contain information relating to security ownership of certain beneficial owners and management, which information is incorporated by
reference herein.
The Proxy Statement will also contain information relating to our equity compensation plans, which information is
incorporated by reference herein.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
The Proxy Statement for our Annual Meeting of Shareholders, to be filed with the Securities and Exchange Commission, will
contain information relating to certain relationships and related transactions between us and certain of our directors and executive
officers, which information is incorporated by reference herein.
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
The Proxy Statement for our Annual Meeting of Shareholders, to be filed with the Securities and Exchange Commission, will
contain information relating to the fees charged and services provided by Joseph Decosimo and Company, PLLC, our principal
accountants during the last three fiscal years, and our pre-approval policy and procedures for audit and non-audit services, which
information is incorporated by reference into this report.
27
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
(a)
1.
The following documents are filed as part of this Report:
Financial Statements
PART IV
Description
Report of Independent Registered Public Accounting Firm
Consolidated Balance Sheets as of December 31, 2013 and 2012
Consolidated Statements of Income for the years ended December 31, 2013, 2012 and 2011
Consolidated Statements of Comprehensive Income for the years ended December 31, 2013, 2012 and 2011
Consolidated Statements of Shareholders’ Equity for the years ended December 31, 2013, 2012 and 2011
Consolidated Statements of Cash Flows for the years ended December 31, 2013, 2012 and 2011
Notes to Consolidated Financial Statements
2.
Financial Statement Schedules
Page
Number
in Report
F-2
F-3
F-4
F-5
F-6
F-7
F-8
The following Financial Statement Schedule for the Registrant is filed as part of this Report and should be read in
conjunction with the Consolidated Financial Statements:
Description
Schedule II - Valuation and Qualifying Accounts
Page
Number
in Report
S-1
All schedules, except those set forth above, have been omitted since the information required is included in the financial
statements or notes or have been omitted as not applicable or not required.
3.
Exhibits
The following exhibits are required to be filed with this Report by Item 601 of Regulation S-K:
Description
Incorporated
by Reference
to Registration
File Number
Form or
Report
Date of Report
3.1
Charter, as amended, of the Registrant
3.2
Amended and Restated Bylaws of the Registrant
--
--
Form 10-K December 31, 2001
Form 10-Q November 8, 2007
Exhibit
Number in
Report
3.1
3.2
10.1 Form of Noncompetition Agreement between the
33-79430
Registrant and certain officers of the Registrant
10.2 Form of Nonexclusive Distributor Agreement
33-79430
S-1
S-1
August 1994
10.28
August 1994
10.31
28
Description
Incorporated
by Reference
to Registration
File Number
Form or
Report
Date of Report
Exhibit
Number in
Report
10.3
Miller Industries, Inc. Stock Option and Incentive
33-79430
S-1
August 1994
10.1
Plan**
10.4
Form of Incentive Stock Option Agreement under
Miller Industries, Inc. Stock Option and Incentive
Plan**
33-79430
S-1
August 1994
10.2
10.5
Miller Industries, Inc. Non-Employee Director
33-79430
S-1
August 1994
10.4
Stock Option Plan**
10.6
Form of Director Stock Option Agreement**
33-79430
S-1
August 1994
10.5
10.7
First Amendment to Miller Industries, Inc. Non-
Employee Director Stock Option Plan**
10.8
Second Amendment to Miller Industries, Inc. Non-
Employee Director Stock Option Plan**
10.9
Second Amendment to Miller Industries, Inc. Stock
Option and Incentive Plan**
10.10 Employment Agreement dated as of December 30,
2008 between the Registrant and William G.
Miller**
--
--
--
--
Form 10-K
April 30, 1995
10.38
Form 10-K
April 30, 1996
10.39
Form 10-K
April 30, 1996
10.40
Form 10-Q
May 6, 2009
10.1
10.11 Form of Indemnification Agreement by and
--
Form 10-Q September 14, 1998
10
between the Registrant and each of William G.
Miller, Jeffrey I. Badgley, A. Russell Chandler,
Frank Madonia, J. Vincent Mish, Richard H.
Roberts and Theodore H. Ashford **
10.12 Employment Agreement, dated as of December 30,
2008, between the Registrant and Jeffrey I.
Badgley**
10.13 Employment Agreement, dated as of December 30,
2008 between the Registrant and Frank Madonia**
10.14 Employment Agreement, dated as of December 30,
2008 between the Registrant and J. Vincent Mish**
10.15 Agreement between the Registrant and Jeffrey I.
Badgley, effective December 30, 2008**
10.16 Agreement between the Registrant and Frank
Madonia, effective December 30, 2008**
--
Form 10-Q
May 6, 2009
10.2
--
--
--
--
Form 10-Q
May 6, 2009
10.3
Form 10-Q
May 6, 2009
10.4
Form 10-Q
May 6, 2009
10.5
Form 10-Q
May 6, 2009
10.6
29
Description
Incorporated
by Reference
to Registration
File Number
Form or
Report
Date of Report
Exhibit
Number in
Report
10.17 Agreement between the Registrant and J. Vincent Mish,
--
Form 10-Q
May 6, 2009
10.7
effective December 30, 2008**
10.18 Letter Agreement, dated as of November 27, 2013
between the Registrant and William G. Miller, effective
as of December 31, 2013, amending the Employment
Agreement dated as of December 30, 2008* **
10.19 Letter Agreement, dated as of November 27, 2013
between the Registrant and Jeffrey I. Badgley, effective
as of December 31, 2013, amending the Employment
Agreement dated as of December 30, 2008 and the
Change in Control Agreement effective December 30,
2008* **
10.20 Letter Agreement, dated as of November 27, 2013
between the Registrant and J. Vincent Mish, effective as
of December 31, 2013, amending the Employment
Agreement dated as of December 30, 2008 and the
Change in Control Agreement effective December 30,
2008* **
10.21 Non-Employee Director Stock Plan**
10.22 Miller Industries, Inc. 2005 Equity Incentive Plan**
10.23 Loan Agreement, dated April 6, 2010, by and among the
Registrant, certain of the Registrant’s wholly-owned
subsidiaries, and First Tennessee National Association
10.24 Agreement, dated April 6, 2010, by and between the
Registrant, certain of the Registrant’s wholly-owned
subsidiaries, and First Tennessee National Association
10.25 Agreement, dated April 6, 2010, by and between the
Registrant, certain of the Registrant’s wholly-owned
subsidiaries, and First Tennessee National Association
21
Subsidiaries of the Registrant*
23.1
Consent of Joseph Decosimo and Company, PLLC*
24
Power of Attorney (see signature page)*
31.1
Certification Pursuant to Rules 13a-14(a)/15d-14(a) by
Co-Chief Executive Officer*
31.2
Certification Pursuant to Rules 13a-14(a)/15d-14(a) by
Co-Chief Executive Officer*
31.3
Certification Pursuant to Rule 13a-14(a)/15d-14(a) by
Chief Financial Officer*
32.1
32.2
Certification Pursuant to Section 1350 of Chapter 63 of
Title 18 of United States Code by Co-Chief Executive
Officer*
Certification Pursuant to Section 1350 of Chapter 63 of
Title 18 of United States Code by Co-Chief Executive
Officer*
32.3
Certification Pursuant to Section 1350 of Chapter 63 of
Title 18 of United States Code by Chief Financial
Officer*
30
--
--
--
--
--
Schedule 14A
January 23, 2004
Annex A
Schedule 14A May 2, 2005
Annex B
Form 8-K
April 12, 2010
10.1
Form 8-K
April 12, 2010
10.2
Form 8-K
April 12, 2010
10.3
Incorporated
by Reference
to Registration
File Number
Form or
Report
Date of Report
Exhibit
Number in
Report
Description
101
The following financial information from Miller
Industries, Inc.’s Annual Report on Form 10-K for the
year ended December 31, 2013, formatted in XBRL
(eXtensible Business Reporting Language): (i)
Consolidated Balance Sheets as of December 31, 2013
and December 31, 2012, (ii) Consolidated Statements
of Income for the years ended December 31, 2013,
2012 and 2011, (iii) Consolidated Statements of
Comprehensive Income for the years ended December
31, 2013, 2012 and 2011, (iv) Consolidated Statements
of Shareholder’s Equity for the years ended December
31, 2013, 2012 and 2011, (v) Consolidated Statements
of Cash Flows for the years ended December 31, 2013,
2012 and 2011, and (vi) the Notes to Consolidated
Financial Statements.*
* Filed herewith.
** Management contract or compensatory plan or arrangement.
(b)
The Registrant hereby files as exhibits to this Report the exhibits set forth in Item 15(a)3 hereof.
I
15(a)2 hereof.
The Registrant hereby files as financial statement schedules to this Report the financial statement schedules set forth in Item
31
[This Page Intentionally Left Blank]
INDEX TO FINANCIAL STATEMENTS
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2013 AND 2012
CONSOLIDATED STATEMENTS OF INCOME FOR THE YEARS ENDED DECEMBER 31, 2013, 2012 AND 2011
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31,
2013, 2012 AND 2011
CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY FOR THE YEARS ENDED DECEMBER 31, 2013,
2012 AND 2011
CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2013, 2012 AND
2011
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SCHEDULE II –VALUATION AND QUALIFYING ACCOUNTS
F-2
F-3
F-4
F-5
F-6
F-7
F-8
F-20
F-1
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Board of Directors and Shareholders
Miller Industries, Inc.
Ooltewah, Tennessee
We have audited the accompanying consolidated balance sheets of Miller Industries, Inc. and subsidiaries as of December 31,
2013 and 2012, and the related consolidated statements of income, comprehensive income, shareholders’ equity and cash flows for
each of the three years in the period ended December 31, 2013. Our audits also included the financial statement schedule listed in the
Index at Item 15. These consolidated financial statements and financial statement schedule are the responsibility of the Company’s
management. Our responsibility is to express an opinion on these consolidated financial statements and financial statement schedule
based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United
States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated
financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts
and disclosures in the consolidated financial statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial
position of Miller Industries, Inc. and subsidiaries as of December 31, 2013 and 2012, and the results of their operations and their cash
flows for each of the three years in the period ended December 31, 2013, in conformity with accounting principles generally accepted
in the United States of America. Also, in our opinion, the financial statement schedule when considered in relation to the basic
consolidated financial statements taken as a whole, presents fairly, in all material respects, the information set forth therein.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States),
the Company’s internal control over financial reporting as of December 31, 2013, based on criteria established in Internal Control—
Integrated Framework (1992) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) and our
report dated March 5, 2014 expressed an unqualified opinion on the effectiveness on the Company’s internal control over financial
reporting.
/s/ Joseph Decosimo and Company, PLLC
Chattanooga, Tennessee
March 5, 2014
F-2
MILLER INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 2013 AND 2012
(In thousands, except share data)
ASSETS
CURRENT ASSETS:
Cash and temporary investments
Accounts receivable, net of allowance for doubtful accounts of $1,714 and $1,614, at December
$ 42,864
$ 48,591
2013
2012
31, 2013 and 2012, respectively
Inventories
Prepaid expenses
Current deferred income taxes
Total current assets
PROPERTY, PLANT, AND EQUIPMENT, net
GOODWILL
OTHER ASSETS
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable
Accrued liabilities
Total current liabilities
DEFERRED INCOME TAX LIABILITIES
COMMITMENTS AND CONTINGENCIES (Notes 3 and 5)
SHAREHOLDERS’ EQUITY:
Preferred stock, $.01 par value; 5,000,000 shares authorized, none issued or outstanding
Common stock, $.01 par value; 100,000,000 shares authorized, 11,265,679 and 11,158,631,
outstanding at December 31, 2013 and 2012, respectively
Additional paid-in capital
Accumulated surplus
Accumulated other comprehensive income (loss)
Total Miller Industries, Inc. shareholders’ equity
Noncontrolling interest
Total shareholders’ equity
80,821
54,172
2,190
3,888
183,935
30,834
11,619
281
$ 226,669
59,113
45,045
1,951
3,581
158,281
32,188
11,619
263
$ 202,351
$ 47,388
15,726
63,114
$ 30,745
12,358
43,103
1,842
1,758
--
--
113
149,608
11,696
814
162,231
(518 )
161,713
$ 226,669
112
148,688
8,760
(70 )
157,490
--
157,490
$ 202,351
The accompanying notes are an integral part of these consolidated statements.
F-3
MILLER INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
FOR THE YEARS ENDED DECEMBER 31, 2013, 2012 AND 2011
(In thousands, except per share data)
NET SALES
COSTS OF OPERATIONS
GROSS PROFIT
OPERATING EXPENSES:
Selling, general, and administrative expenses
Interest expense, net
Other income
Total operating expenses
INCOME BEFORE INCOME TAXES
INCOME TAX PROVISION
NET INCOME
NET LOSS ATTRIBUTABLE TO NONCONTROLLING INTERESTS
NET INCOME ATTRIBUTABLE TO MILLER INDUSTRIES, INC.
BASIC INCOME PER COMMON SHARE
DILUTED INCOME PER COMMON SHARE
CASH DIVIDENDS DECLARED PER COMMON SHARE
WEIGHTED AVERAGE SHARES OUTSTANDING:
Basic
Diluted
2013
$ 404,170
361,734
42,436
2012
2011
$ 342,663
302,606
40,057
$ 412,659
342,557
70,102
28,323
369
(119 )
28,573
13,863
5,175
8,688
27,507
712
(815 )
27,404
12,653
3,531
9,122
31,407
728
(161 )
31,974
38,128
15,120
23,008
542
9,230
$
--
9,122
$
--
23,008
0.82
$
0.82
$
1.98
0.82
$
0.82
$
1.92
0.56
$
0.52
$
0.48
$
$
$
$
11,233
11,324
11,068
11,258
11,600
11,984
The accompanying notes are an integral part of these consolidated statements.
F-4
MILLER INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
FOR THE YEARS ENDED DECEMBER 31, 2013, 2012 AND 2011
(In thousands)
Net income
Other comprehensive income:
2013
8,688
$
2012
$
9,122
$
2011
23,008
Foreign currency translation adjustment
Derivative instrument and hedging activities
Reclassifications from accumulated other comprehensive income (loss)
Total other comprehensive income (loss)
1,175
(216 )
(75 )
884
(207 )
--
--
(207 )
71
--
--
71
Comprehensive income
Net loss attributable to noncontrolling interests
Comprehensive income attributable to Miller Industries, Inc.
9,572
542
$ 10,114
$
8,915
--
8,915
23,079
--
23,079
$
The accompanying notes are an integral part of these consolidated statements.
F-5
MILLER INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
FOR THE YEARS ENDED DECEMBER 31, 2013, 2012 AND 2011
(In thousands, except share data)
Accumulated
Other
Comprehensive
Income (Loss)
BALANCE, December 31, 2010
Components of comprehensive
income:
Net income
Foreign currency translation
adjustments
Total comprehensive income
Issuance of common stock to non-
employee directors (6,840)
Exercise of stock options (468,204)
Repurchase of common stock
(1,184,200)
Stock-based compensation expense
Excess tax effect for stock-based
compensation
Dividends paid, $0.48 per share
BALANCE, December 31, 2011
Components of comprehensive
income:
Net income
Foreign currency translation
adjustments
Total comprehensive income
Issuance of common stock to non-
employee directors (4,737)
Exercise of stock options (153,775)
Stock-based compensation expense
Excess tax effect for stock-based
compensation
Dividends paid, $0.52 per share
BALANCE, December 31, 2012
Components of comprehensive
income:
Net income
Foreign currency translation
adjustments
Derivative instrument and
hedging activities
Total comprehensive income
Capital Contribution from non
controlling interest holder
Issuance of common stock to
non-employee directors
(4,734)
Exercise of stock options
(102,314)
Common
Stock
117
Additional
Paid-In
Capital
162,447
Accumulated
Surplus
(Deficit)
(12,062 )
--
--
--
--
5
--
--
--
100
2,762
(12 )
--
(19,988 )
399
23,008
--
23,008
--
--
--
--
--
--
110
--
--
--
--
2
--
--
--
112
--
--
--
--
--
--
1
1,284
--
147,004
--
(5,546 )
5,400
--
--
--
75
851
332
9,122
--
9,122
--
--
--
426
--
148,688
--
(5,762 )
8,760
--
--
--
--
--
75
620
9,230
--
--
9,230
--
--
--
Excess tax effect for stock-based
compensation
Dividends paid, $0.56 per share
BALANCE, December 31, 2013
$
--
--
113
225
--
$ 149,608
--
(6,294 )
11,696
$
$
Total Miller
Industries, Inc.
Shareholders’
Equity
150,568
23,008
71
23,079
100
2,767
(20,000 )
399
1,284
(5,546 )
152,651
9,122
(207 )
8,915
75
853
332
426
(5,762 )
157,490
9,230
1,175
(291 )
10,114
--
75
621
Noncontrolling
Interests
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
(542 )
--
--
(542 )
24
--
--
Total
150,568
23,008
71
23,079
100
2,767
(20,000 )
399
1,284
(5,546 )
152,651
9,122
(207 )
8,915
75
853
332
426
(5,762 )
157,490
8,688
1,175
(291 )
9,572
24
75
621
225
(6,294 )
$
162,231
--
--
(518 )
225
(6,294 )
161,713
66
--
71
71
--
--
--
--
--
--
137
--
(207 )
(207 )
--
--
--
--
--
(70 )
--
1,175
(291 )
884
--
--
--
--
--
814
The accompanying notes are an integral part of these consolidated statements.
F-6
MILLER INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2013, 2012 AND 2011
(In thousands)
OPERATING ACTIVITIES:
Net income
Adjustments to reconcile net income to net cash flows from operating
2013
2012
2011
$
8,688
$
9,122
$
23,008
activities:
Depreciation and amortization
Deferred tax provision
Provision for doubtful accounts
Stock-based compensation
Excess tax benefit from stock-based compensation
Issuance of non-employee director shares
(Gain) Loss on disposals of equipment
Changes in operating assets and liabilities:
Accounts receivable
Inventories
Prepaid expenses
Accounts payable
Accrued liabilities
Net cash flows from operating activities
INVESTING ACTIVITIES:
Purchases of property, plant, and equipment
Proceeds from sale of equipment
Payments received on notes receivables
Net cash flows from investing activities
FINANCING ACTIVITIES:
Payments on long-term obligations
Payments of cash dividends
Additions to deferred financing costs
Proceeds from exercise of stock options
Excess tax benefit from stock-based compensation
Payments for common stock repurchased
Net cash flows from financing activities
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND
TEMPORARY INVESTMENTS
NET CHANGE IN CASH AND TEMPORARY INVESTMENTS
CASH AND TEMPORARY INVESTMENTS, beginning of year
CASH AND TEMPORARY INVESTMENTS, end of year
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash payments for interest
Cash payments for income taxes, net of refunds
$
$
$
3,763
(225 )
211
--
(225 )
75
(2 )
(21,993 )
(8,506 )
(173 )
16,164
3,415
1,192
(2,430 )
19
76
(2,335 )
--
(6,294 )
--
621
225
--
(5,448 )
864
(5,727 )
48,591
42,864
912
2,419
3,807
1,210
257
332
(426 )
75
(1 )
1,884
3,033
270
(8,893 )
(4,561 )
6,109
(2,889 )
20
33
(2,836 )
(5 )
(5,762 )
(10 )
851
426
--
(4,500 )
(335 )
(1,562 )
50,153
48,591
1,070
3,858
3,675
206
240
399
(1,284 )
100
--
(1,365 )
(9,360 )
1,338
5,886
5,495
28,338
(3,961 )
1,017
177
(2,767 )
(47 )
(5,546 )
--
2,766
1,284
(20,000 )
(21,543 )
(209 )
3,819
46,334
50,153
968
12,578
$
$
$
$
$
$
The accompanying notes are an integral part of these consolidated statements.
F-7
MILLER INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share data and except as otherwise noted)
ORGANIZATION AND NATURE OF OPERATIONS
1.
Miller Industries, Inc. and subsidiaries (the “Company”) is The World’s Largest Manufacturer of Towing and Recovery Equipment.® The
principal markets for the Company’s towing and recovery equipment are approximately 80 independent distributors and the users of towing
and recovery equipment located primarily throughout North America, and other customers throughout the world. The Company’s products
are marketed under the brand names of Century®, Challenger®, Holmes®, Champion®, Eagle®, Titan®, JigeTM, BonifaceTM, Vulcan®, and
ChevronTM.
2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Use of Estimates in the Preparation of Financial Statements
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those
estimates.
Consolidation
The accompanying consolidated financial statements include the accounts of Miller Industries, Inc. and its subsidiaries. All significant
intercompany transactions and balances have been eliminated. We consolidate our majority-owned and controlled Delavan joint venture, and
our joint venturer’s interests in the Delavan joint venture are reported as noncontrolling interests.
Cash and Temporary Investments
Cash and temporary investments include all cash and cash equivalent investments with original maturities of three months or less.
Accounts Receivable
Receivables consist of amounts billed and currently due from customers. The Company extends credit to customers in the normal course of
business. Collections from customers are continuously monitored and an allowance for doubtful accounts is maintained based on historical
experience and any specific customer collection issues.
Fair Value of Financial Instruments
For assets and liabilities measured at fair value on a recurring and nonrecurring basis, a three-level hierarchy of measurements based upon
observable and unobservable inputs is used to arrive at fair value. Observable inputs are developed based on market data obtained from
independent sources, while unobservable inputs reflect our assumptions about valuation based on the best information available in the
circumstances. Depending on the inputs, we classify each fair value measurement as follows:
Level 1—based upon quoted prices for identical instruments in active markets,
Level 2—based upon quoted prices for similar instruments, prices for identical or similar instruments in markets that are not active, or
model-derived valuations, all of whose significant inputs are observable, and
Level 3—based upon one or more significant unobservable inputs
The carrying values of cash and temporary investments, accounts receivable, accounts payable and accrued liabilities are reasonable estimates
of their fair values because of the short maturity of these financial instruments. The carrying values of long-term obligations are reasonable
estimates of their fair values based on the rates available for obligations with similar terms and maturities.
The fair value of derivative assets and liabilities are measured assuming that the unit of account is an individual derivative transaction and
that each derivative could be sold or transferred on a stand-alone basis. We classify within Level 2 our forward foreign currency exchange
contracts based upon quoted prices for similar instruments that are actively traded. For more information regarding derivatives, see Note 11,
Derivative Financial Instruments.
Inventories
Inventory costs include materials, labor and factory overhead. Inventories are stated at the lower of cost or market (net realizable value),
determined on a first-in, first-out basis. Appropriate consideration is given to obsolescence, valuation and other factors in determining net
realizable value. Revisions of these estimates could result in the need for adjustments. Inventories, net of reserves, at December 31, 2013 and
2012 consisted of the following:
Chassis
Raw materials
Work in process
Finished goods
$
2013
7,665
25,772
9,915
10,820
$ 54,172
2012
$
9,952
18,856
7,961
8,276
$ 45,045
F-8
Property, Plant, and Equipment
Property, plant and equipment are recorded at cost. Depreciation for financial reporting purposes is provided using the straight-line
method over the estimated useful lives of the assets. Accelerated depreciation methods are used for income tax reporting purposes.
Estimated useful lives range from 20 to 30 years for buildings and improvements and 5 to 10 years for machinery and equipment,
furniture and fixtures, and software costs. Expenditures for routine maintenance and repairs are charged to expense as incurred.
Internal labor is used in certain capital projects.
Property, plant and equipment at December 31, 2013 and 2012 consisted of the following:
Land and improvements
Buildings and improvements
Machinery and equipment
Furniture and fixtures
Software costs
Less accumulated depreciation
$
2013
2012
5,031 $ 4,887
33,498
32,759
26,959
29,664
8,242
8,556
7,381
7,533
80,967
83,543
(48,779 )
(52,709 )
$ 30,834 $ 32,188
The Company recognized $3,757, $3,796 and $3,648 in depreciation expense in 2013, 2012 and 2011, respectively.
The Company capitalizes costs related to software development in accordance with established criteria, and amortizes those costs to
expense on a straight-line basis over five years. System development costs not meeting proper criteria for capitalization are expensed
as incurred.
Basic and Diluted Income Per Common Share
Basic income per common share is computed by dividing net income by the weighted average number of common shares outstanding.
Diluted income per common share is calculated by dividing net income by the weighted average number of common and potential
dilutive common shares outstanding. Diluted income per common share takes into consideration the assumed exercise of outstanding
stock options resulting in approximately 91,000, 190,000 and 384,000 potential dilutive common shares in 2013, 2012 and 2011,
respectively. For 2013, 2012 and 2011, none of the outstanding stock options would have been anti-dilutive.
Long-Lived Assets
The Company periodically reviews the carrying amount of its long-lived assets to determine if those assets may be recoverable based
upon the future operating cash flows expected to be generated by those assets. Management believes that its long-lived assets are
appropriately valued.
Goodwill
Goodwill consists of the excess of cost of acquired entities over the sum of the amounts assigned to identifiable assets acquired less
liabilities assumed. Goodwill is not amortized. However, the Company evaluates the carrying value of goodwill for impairment at
least annually or if an event or circumstance occurs that would indicate that the carrying amount had been impaired. The Company
reviews goodwill for impairment utilizing a qualitative assessment or a two-step process. If the qualitative analysis of goodwill is
utilized and it is determined that fair value more likely than not exceeds the carrying value, no further testing is needed. If the two-step
approach is chosen, first, the carrying value of the entity is compared to the fair value. If the fair value is less, a comparison of the
carrying value of goodwill to the fair value of goodwill is performed to determine if a writedown is required.
F-9
Patents, Trademarks and Other Purchased Product Rights
The cost of acquired patents, trademarks and other purchased product rights is capitalized and amortized using the straight-line
method over various periods not exceeding 20 years. Total accumulated amortization of these assets was $1,547 at December 31, 2013
and 2012. At December 31, 2013 and 2012, all intangible assets subject to amortization were fully amortized. As acquisitions and
dispositions of intangible assets occur in the future, the amortization amounts may vary.
Deferred Financing Costs
All deferred financing costs are included in other assets and are amortized using the straight-line method over the terms of the
respective obligations. Total accumulated amortization of deferred financing costs at December 31, 2013 and 2012 was $61 and $55,
respectively. Amortization expense in 2013, 2012 and 2011, was $6, $10 and $27, respectively, and is included in interest expense in
the accompanying consolidated statements of income. Based on the current amount of deferred financing costs subject to amortization,
the estimated amortization expense in future years is not significant.
Accrued Liabilities
Accrued liabilities consisted of the following at December 31, 2013 and 2012:
Accrued wages, commissions, bonuses and benefits
Accrued products warranty
Accrued income taxes
Other
2013
2012
$ 4,991 $ 4,819
4,357
57
3,125
$ 15,726 $ 12,358
3,084
2,995
4,656
Income Taxes
The Company recognizes as deferred income tax assets and liabilities the future tax consequences of the differences between the
financial statement carrying amounts of existing assets and liabilities and their respective tax bases. The Company considers the need
to record a valuation allowance to reduce deferred tax assets to the amount that is more likely than not to be realized. Tax loss
carryforwards, reversal of deferred tax liabilities, tax planning and estimates of future taxable income are considered in assessing the
need for a valuation allowance.
The Company accounts for uncertain tax positions in accordance with FASB ASC Topic 740, Income Taxes. ASC Topic 740
prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position
taken or expected to be taken in a tax return. ASC Topic 740 also provides guidance on derecognition, classification, interest and
penalties, disclosure and transition. The evaluation of a tax position in accordance with ASC Topic 740 is a two-step process. The first
step is recognition, where the Company evaluates whether an individual tax position has a likelihood of greater than 50% of being
sustained upon examination based on the technical merits of the position, including resolution of any related appeals or litigation
processes. For tax positions that are currently estimated to have a less than 50% likelihood of being sustained, zero tax benefit is
recorded. For tax positions that have met the recognition threshold in the first step, the Company performs the second step of
measuring the benefit to be recorded. The actual benefits ultimately realized may differ from the Company’s estimates. In future
periods, changes in facts and circumstances and new information may require the Company to change the recognition and
measurement estimates with regard to individual tax positions. Changes in recognition and measurement estimates are recorded in
results of operations and financial position in the period in which such changes occur. As of December 31 2013, the Company had no
unrecognized tax benefits pertaining to uncertain tax positions.
Stock-Based Compensation
Stock compensation expense was $-0- for 2013, $332 for 2012 and $399 for 2011. The stock-based compensation expense is included
in selling, general and administrative expenses in the accompanying consolidated statements of income.
No options were granted during 2013 or 2012. The fair value of options granted in 2008 has been estimated as of the date of the grant
using the Black-Scholes option-pricing model with the following weighted average assumptions: expected dividend yield of 0%;
expected volatility of 44%; risk-free interest rate of 1.71%; and expected life of four years. Using these assumptions, the fair value of
options granted in 2008 was $1,596, which is being amortized as compensation expense over the vesting period.
At December 31, 2013, the Company had no unrecognized compensation expense related to stock options. The Company issued
approximately 102,000 and 154,000 shares of common stock during 2013 and 2012, respectively, from the exercise of stock options.
F-10
Product Warranty
The Company generally provides a one-year limited product and service warranty on certain of its products. The Company provides
for the estimated cost of this warranty at the time of sale. These estimates are established using historical information about the nature,
frequency, and average cost of warranty claims. Warranty expense in 2013, 2012 and 2011, was $1,086, $901 and $3,908,
respectively.
The table below provides a summary of the warranty liability for December 31, 2013 and 2012:
Accrual at beginning of the year
Provision
Settlement and Other
Accrual at end of year
$
$
2013
4,357
1,086
(2,359 )
3,084
$
$
2012
5,322
901
(1,866 )
4,357
Credit Risk
Financial instruments that potentially subject the Company to significant concentrations of credit risk consist principally of cash
investments and trade accounts receivable. The Company places its cash investments with high-quality financial institutions. In
addition, the Company limits the amount of credit exposure through the use of accounts and funds backed by the U.S. Government
and its agencies. Trade accounts receivable are generally diversified due to the number of entities comprising the Company’s customer
base and their dispersion across many geographic regions and by frequent monitoring of the creditworthiness of the customers to
whom the credit is granted in the normal course of business.
Revenue Recognition
Revenue is recorded by the Company when the risk of ownership for products has transferred to the independent distributors or other
customers, which is generally upon shipment. From time to time, revenue is recognized under a bill and hold arrangement.
Recognition of revenue on bill and hold arrangements occurs when risk of ownership has passed to the customer, a fixed written
commitment has been provided by the customer, the goods are complete and ready for shipment, the goods are segregated from
inventory, no performance obligation remains, and a schedule for delivery has been established.
Shipping and Handling Fees and Cost
The Company records revenues earned for shipping and handling as revenue, while the cost of shipping and handling is classified as
cost of operations.
Research and Development
Research and development costs are expensed as incurred and included in cost of operations and to a lesser extent in selling, general
and administrative expenses. Research and development costs amounted to $1,304, $1,436 and $1,922 for 2013, 2012 and 2011,
respectively.
Foreign Currency Translation
The functional currency for the Company’s foreign operations is the applicable local currency. The translation from the applicable
foreign currencies to U.S. dollars is performed for balance sheet accounts using current exchange rates in effect at the balance sheet
date, historical rates for equity and the weighted average exchange rate during the period for revenue and expense accounts. Foreign
currency translation adjustments resulting from such translations are included in shareholders’ equity. Intercompany transactions
denominated in a currency other than the functional currency are remeasured into the functional currency. Gains and losses resulting
from foreign currency transactions are included in other income (expense) in our consolidated statements of income.
F-11
Derivative Financial Instruments
The Company periodically enters into certain forward foreign currency exchange contracts that are designed to mitigate foreign
currency risk.
Prior to November 2012, the Company had not instituted a formal foreign exchange policy. Any foreign currency exchange contracts
entered into did not qualify for hedge accounting. Changes in fair value of these instruments were recognized each period in other
income (expense) in our consolidated statements of income.
In November 2012, the Company adopted a formal foreign exchange policy. Under this policy, at inception of each hedge
relationship, the Company documents its risk management objectives, procedures and accounting treatment. For those foreign
currency exchange contracts that qualify for hedge accounting treatment, changes in the fair value of such instruments are included in
accumulated other comprehensive income (loss). The Company also assesses, both at inception and on an ongoing basis, whether the
derivatives that are used in the hedging transaction are highly effective in offsetting changes in cash flows of the hedged items. For
those foreign currency exchange contracts that do not qualify for hedge accounting treatment, changes in the fair value of such
instruments are recognized each period in other income (expense) in our consolidated statements of income.
Recent Accounting Pronouncements
Recently Adopted Standards
In February 2013, the FASB issued Accounting Standards Update No. 2013-02, Comprehensive Income (Topic 220): Reporting of
Amounts Reclassified Out of Accumulated Other Comprehensive Income (FASB ASU 2013-02). The amendment in this update
requires an entity to report the effect of significant reclassifications out of accumulated other comprehensive income on the respective
line items in net income if the amount being reclassified is required under U.S. generally accepted accounting principles to be
reclassified in its entirety to net income. The provisions of FASB ASU 2013-02 are effective for annual and interim periods beginning
after December 15, 2012. The adoption of the provisions of FASB ASU 2013-02 did not have a material impact on the Company’s
consolidated financial statements.
In December 2011, the FASB issued Accounting Standards Update 2011-11, Balance Sheet (Topic 210): Disclosures about Offsetting
Assets and Liabilities (FASB ASU 2011-11). The amendments in this update will require an entity to disclose information about
offsetting and related arrangements to enable users of its financial statements to understand the effect of those arrangements on its
financial position. The intention is to enhance required disclosures by improving information about financial instruments and
derivative instruments that are either offset in accordance with FASB guidance or are subject to an enforceable master netting
arrangement; irrespective of whether they are offset in accordance with FASB guidance. The provisions of FASB ASU 2011-11 are
effective for annual and interim reporting periods beginning on or after January 1, 2013. The adoption of the provisions of FASB ASU
2011-11 did not have a material impact on the Company’s consolidated financial statements.
Recently Issued Standards
There are no recently issued accounting standards for which the Company expects a material impact on our consolidated financial
statements.
Reclassifications
Certain prior year amounts have been reclassified to conform to current year presentation, with no impact on previously reported
shareholders’ equity or net income.
F-12
3.
LONG-TERM OBLIGATIONS
Long-Term Obligations
Credit Facility On April 6, 2010 we entered into a Loan Agreement with First Tennessee Bank National Association for a $20.0
million unsecured revolving credit facility, and on December 21, 2011 the credit facility was renewed and our unsecured revolving
credit facility was increased to $25.0 million (the “Credit Facility”). On December 17, 2013 the Credit Facility was further renewed,
which extended the maturity date to March 31, 2016. The Credit Facility contains customary representations and warranties, events of
default, and financial, affirmative and negative covenants for loan agreements of this kind. Covenants under the Credit Facility restrict
the payment of cash dividends if the Company would be in violation of the minimum tangible net worth test or the leverage ratio test
in the current loan agreement as a result of the dividend, among various restrictions.
In the absence of a default, all borrowings under the Credit Facility bear interest at the LIBOR Rate plus 1.50% per annum. The
Company will pay a non-usage fee under the current loan agreement at a rate per annum equal to between 0.15% and 0.35% of the
unused amount of the Credit Facility, which fee shall be paid quarterly.
At December 31, 2013 and 2012, the Company had no outstanding borrowings under the Credit Facility.
Interest Rate Sensitivity. Changes in interest rates affect the interest paid on indebtedness under our Credit Facility because the
outstanding amounts of indebtedness under our Credit Facility are subject to variable interest rates. Under our Credit Facility, the non-
default rate of interest is equal to the LIBOR Market Index Rate plus 1.50% per annum (for a rate of interest of 1.67% at
December 31, 2013). A one percent change in the interest rate on our variable-rate debt would not have materially impacted our
financial position, results of operations or cash flows for the year ended December 31, 2013.
4.
STOCK-BASED COMPENSATION PLANS
In accordance with the Company’s stock-based compensation plans, the Company may grant incentive stock options as well as non-
qualified and other stock-related incentives to officers, employees and non-employee directors of the Company. Options vest ratably
over a two to four-year period beginning on the grant date and expire ten years from the date of grant. Shares available for granting
options at December 31, 2013, 2012 and 2011 were 600,000.
A summary of the activity of stock options for the years ended December 31, 2013, 2012 and 2011, is presented below (shares in
thousands):
2013
Shares
Under
Option
Weighted
Average
Exercise
Price
2012
Weighted
Average
Exercise
Price
Shares
Under
Option
Shares
Under
Option
2011
Weighted
Average
Exercise
Price
5.82
--
5.91
5.49
5.71
5.98
831 $
--
(468 )
(3 )
360 $
161 $
Outstanding at Beginning of Period
Granted
Exercised
Forfeited and cancelled
Outstanding at End of Period
Options exercisable at year end
206 $
--
(102 )
--
104 $
104 $
5.83
--
6.07
--
5.60
5.60
360 $
--
(154 )
--
206 $
206 $
5.71
--
5.54
--
5.83
5.83
F-13
A summary of options outstanding under the Company’s stock-based compensation plans at December 31, 2013 is presented below:
Exercise Price
Shares
Under
Option
Weighted
Average
Exercise Price
of
Options
Outstanding
Weighted
Average
Remaining Life
Options
Exercisable
Weighted
Average
Exercise Price
of
Shares
Exercisable
$
5.49
8.31
Total
99,572
4,125
103,697
$
$
5.49
8.31
5.60
4.9
0.2
4.7
99,572
4,125
103,697
$
$
5.49
8.31
5.60
5.
COMMITMENTS AND CONTINGENCIES
Commitments
The Company has entered into various operating leases for buildings and for office and computer equipment. Rental expense under
these leases was $1,126, $1,127 and $1,570 in 2013, 2012 and 2011, respectively.
At December 31, 2013 future minimum lease payments under non-cancelable operating leases for the next five years and in the
aggregate are as follows:
2014
2015
2016
2017
2018
Thereafter
$
$
582
432
176
66
--
--
1,256
The Company has also entered into arrangements with third-party lenders where it has agreed, in the event of a default by the
independent distributor customer, to repurchase from the third-party lender Company products repossessed from the independent
distributor customer. These arrangements are typically subject to a maximum repurchase amount. The Company’s risk under these
arrangements is mitigated by the value of the products repurchased as part of the transaction. The maximum amount of collateral the
Company could be required to purchase was approximately $31,854 and $22,035 at December 31, 2013 and 2012, respectively. No
repurchases of products were required during 2013 or 2012.
Contingencies
The Company is, from time to time, a party to litigation arising in the normal course of its business. Litigation is subject to various
inherent uncertainties, and it is possible that some of these matters could be resolved unfavorably to the Company, which could result
in substantial damages against the Company. The Company has established accruals for matters that are probable and reasonably
estimable and maintains product liability and other insurance that management believes to be adequate. Management believes that any
liability that may ultimately result from the resolution of these matters in excess of available insurance coverage and accruals will not
have a material adverse effect on the consolidated financial position or results of operations of the Company.
6.
INCOME TAXES
Deferred tax assets and liabilities are determined based on the differences between the financial and tax basis of existing assets and
liabilities using the currently enacted tax rates in effect for the year in which the differences are expected to reverse.
F-14
The provision for income taxes on income consisted of the following in 2013, 2012 and 2011:
Current:
Federal
State
Foreign
Deferred:
Federal
State
Foreign
2013
2012
2011
$
$
3,960
415
1,025
5,400
(238 )
(28 )
41
(225 )
5,175
$
202
321
1,798
2,321
1,095
122
(7 )
1,210
3,531
$
$ 11,902
1,428
1,584
14,914
245
27
(66 )
206
$ 15,120
The principal differences between the federal statutory tax rate and the income tax expense in 2013, 2012 and 2011:
Federal statutory tax rate
State taxes, net of federal tax benefit
Excess of foreign tax over US tax on foreign income
Domestic Tax Credits
Other
Effective tax rate
2013
35.0 %
3.7 %
0.3 %
(1.5 )%
(0.2 )%
37.3 %
2012
35.0 %
4.0 %
0.6 %
(10.8 )%
(0.9 )%
27.9 %
2011
35.0 %
4.0 %
0.6 %
--
0.1 %
39.7 %
Income taxes for 2012 include $1,361 of income tax benefits resulting primarily from Federal Domestic Activity Deductions, as well
as Federal Research and Development and other tax credits recognized during the period.
Deferred income tax assets and liabilities reflect the impact of temporary differences between the amounts of assets and liabilities for
financial reporting and income tax reporting purposes. Temporary differences and carry forwards which give rise to deferred tax assets
and liabilities at December 31, 2013 and 2012 are as follows:
Deferred tax assets:
Allowance for doubtful accounts
Accruals and reserves
Other
Total deferred tax assets
Deferred tax liabilities:
Property, plant, and equipment
Total deferred tax liabilities
Net deferred tax asset
2013
2012
$
$
95
3,739
54
3,888
1,842
1,842
2,046
$
$
95
3,390
96
3,581
1,758
1,758
1,823
As of December 31, 2013, the Company has no federal or state net operating loss carryforwards.
At December 31, 2013 and 2012, the Company had no unrecognized tax positions. The Company does not expect its unrecognized tax
positions to change significantly in the next twelve months. If unrecognized tax positions existed, the interest and penalties related to
the unrecognized tax positions would be recorded as income tax expense in the consolidated statements of income.
F-15
The Company is subject to United States federal income taxes, as well as income taxes in various states and foreign jurisdictions. The
Company’s tax years 2010 through 2012 remain open to examination for U.S. Federal and state income taxes.
7.
SHAREHOLDERS EQUITY
Preferred Stock
The Company has authorized 5,000,000 shares of undesignated preferred stock which can be issued in one or more series. The terms,
price and conditions of the preferred shares will be set by the board of directors. No shares have been issued.
Dividends
Prior to March 2010, we had never declared cash dividends on our common stock. On March 8, 2010, our board of directors adopted a
dividend policy to consider and pay annual cash dividends subject to our ability to satisfy all applicable statutory and regulatory
requirements and our continued financial strength. On May 10, 2011, the Company’s board of directors approved a dividend policy to
consider and pay quarterly dividends on its common stock subject to the Company’s ability to satisfy all applicable statutory
requirements and the Company’s continued financial strength, replacing the previous policy of paying annual cash dividends.
Dividend payments made for 2013, 2012 and 2011 were as follows:
Payment
Record Date
Payment Date
Dividend
(per share)
Amount
Q1 2011
Q2 2011
Q3 2011
Q4 2011
Total for 2011
Q1 2012
Q2 2012
Q3 2012
Q4 2012
Total for 2012
Q1 2013
Q2 2013
Q3 2013
Q4 2013
Total for 2013
Stock Repurchase Program
March 17, 2011
May 23, 2011
August 19, 2011
December 5, 2011
March 24, 2011
May 31, 2011
August 26, 2011
December 19, 2011
March 19, 2012
June 18, 2012
September 17, 2012
December 10, 2012
March 26, 2012
June 25, 2012
September 24, 2012
December 17, 2012
March 18, 2013
June 17, 2013
September 16, 2013
December 9, 2013
March 25, 2013
June 24, 2013
September 23, 2013
December 16, 2013
$
$
$
$
$
$
0.12
0.12
0.12
0.12
0.48
0.13
0.13
0.13
0.13
0.52
0.14
0.14
0.14
0.14
0.56
$
$
$
$
$
$
1,415
1,429
1,365
1,336
5,545
1,437
1,439
1,439
1,447
5,762
1,569
1,573
1,575
1,577
6,294
In May 2011, the Company’s board of directors authorized the repurchase of up to $20.0 million of shares of its common stock. At
December 31, 2011, the repurchase program was complete and total of 1,184,200 shares have been repurchased for $20.0 million.
8.
EMPLOYEE BENEFIT PLANS
The Company maintains a contributory retirement plan for all full-time employees with at least 90 days of service. The plan is
designed to provide tax-deferred income to the Company’s employees in accordance with the provisions of Section 401(k) of the
Internal Revenue Code.
The plan provides that each participant may contribute the maximum allowable under Internal Revenue Service regulations. For 2013,
2012 and 2011, the Company matched 50% of the first 5% of participant contributions. Matching contributions vest over the first five
years of employment. Company contributions to the plan were $472, $424, and $409 in 2013, 2012 and 2011, respectively.
F-16
9.
GEOGRAPHIC INFORMATION
Net sales and long-lived assets (property, plant and equipment and goodwill and intangible assets) by region were as follows (net sales
are attributed to regions based on the locations of customers):
North America
Foreign
2013
2012
2011
Net Sales
$ 335,969
Long-Lived
Assets
$
39,832
Net Sales
$ 282,497
Long-Lived
Assets
$ 40,965
Net Sales
$ 356,257
Long-Lived
Assets
$
42,147
68,201
2,645
60,166
2,842
56,402
2,592
$ 404,170
$
42,477
$ 342,663
$ 43,807
$ 412,659
$
44,739
10.
CUSTOMER INFORMATION
No single customer accounted for 10% or more of consolidated net sales for 2013 or 2012. The Company’s largest customer
accounted for 26.8% of consolidated sales for 2011.
F-17
11.
DERIVATIVE FINANCIAL INSTRUMENTS
The Company periodically enters into foreign currency exchange contracts designed to mitigate the impact of foreign currency risk.
Prior to November 2012, the Company had not instituted a formal foreign exchange policy. All contracts entered into prior to this date
are accounted for as undesignated hedges and, therefore changes in fair value are recognized each period in other income (expense) in
our consolidated statements of income. The fair value of the contracts is presented in accounts receivable in our consolidated balance
sheets. At December 31, 2011, the Company had foreign exchange contracts with notional values of $600 that matured in April 2012.
At December 31, 2012, the Company also had undesignated foreign currency hedge contracts with notional amounts of $6,600 which
were directly offset by corresponding foreign currency contracts. These contracts expire over a period from September to November
2013. A gain of $4 and $43 was recognized for 2012 and 2011, respectively.
In November 2012, the Company adopted a formal foreign currency exchange policy. Under this policy, for those foreign currency
exchange contracts that qualify for hedge accounting treatment, changes in the fair value of such instruments are included in
accumulated other comprehensive income (loss). The Company also assesses, both at inception and on an ongoing basis, whether the
derivatives that are used in the hedging transaction are highly effective in offsetting changes in cash flows of the hedged items. For
those foreign currency exchange contracts that do not qualify for hedge accounting treatment, changes in the fair value of such
instruments are recognized each period in other income (expense) in our consolidated statements of income. In December 2012, the
Company entered into foreign exchange currency contracts with notional values of $10,637 at December 31, 2013 and $12,950 at
December 31, 2012 maturing from September 2013 to October 2014 that were considered cash flow hedges. Changes in fair value of
such cash flow hedges are recorded in accumulated other comprehensive income (loss) to the extent that the hedges are considered
effective. At December 31, 2013 and 2012, the net fair value of foreign currency exchange contracts was ($291) and $-0-,
respectively, which is included in accounts receivable or accounts payable in our consolidated balance sheets, depending on the asset
or liability position of the derivative.
The following table presents the financial instruments measured at fair value on a recurring basis:
Current Assets
Derivative financial instruments
Foreign currency contracts
Total assets
Current Liabilities
Derivative financial instruments
Foreign currency contracts
Total liabilities
Current Assets
Derivative financial instruments
Foreign currency contracts
Total assets
Current Liabilities
Derivative financial instruments
Foreign currency contracts
Total liabilities
December 31, 2013
Level 1
Level 2
Level 3
Total
-- $
-- $
-- $
-- $
-- $
-- $
--
--
-- $
-- $
291 $
291 $
-- $
-- $
291
291
December 31, 2012
Level 1
Level 2
Level 3
Total
-- $
-- $
326 $
326 $
-- $
-- $
326
326
-- $
-- $
326 $
326 $
-- $
-- $
326
326
$
$
$
$
$
$
$
$
F-18
12.
QUARTERLY FINANCIAL INFORMATION (UNAUDITED)
The following is a summary of the unaudited quarterly financial information for the years ended December 31, 2013 and 2012:
Net Sales
Operating
Income
Net
Income
Attributable to
Miller
Industries, Inc.
Basic
Income
Per Share
Diluted
Income Per
Share
Cash
Dividends
Declared
Per Share
$ 84,950 $
105,834
105,108
108,278
$ 404,170 $
1,935 $
4,510
4,079
3,589
14,113 $
$ 94,957 $
87,346
77,957
82,403
$ 342,663 $
3,882 $
3,361
2,534
2,773
12,550 $
1,328
2,901
2,622
2,379
9,230
2,010
2,546
2,890
1,676
9,122
$
$
$
$
0.12
0.26
0.23
0.21
0.82
0.18
0.23
0.26
0.15
0.82
$
$
$
$
0.12
0.26
0.23
0.21
0.82
0.18
0.23
0.26
0.15
0.82
$
$
$
$
0.14
0.14
0.14
0.14
0.56
0.13
0.13
0.13
0.13
0.52
2013
First Quarter
Second Quarter
Third Quarter
Fourth Quarter
Total
2012
First Quarter
Second Quarter
Third Quarter
Fourth Quarter
Total
13.
SUBSEQUENT EVENTS
On December 27, 2012, we formed Delavan Automotive LLC, of which we have a controlling interest, for the sale of larger capacity
automobile transport trailers in the United States and Canada. We began to produce trailers under this entity beginning in 2013 as an
extension of our current product offering.
Following a review and evaluation of operations related to the Delavan joint venture, the Company made the decision to consider
strategic alternatives with regard to the venture. On February 28, 2014, the Company entered into an agreement to sell its interest in
the Delavan joint venture to its joint venture partner, which is expected to close on March 31, 2014. Our Greeneville facility will cease
the manufacturing of Delavan products by the end of the first quarter of 2014 as it winds down Delavan production.
On March 3, 2014, the Company’s board of directors declared a quarterly cash dividend of $0.15 per share. The dividend is payable
March 24, 2014 to shareholders of record as of March 17, 2014.
F-19
MILLER INDUSTRIES, INC. AND SUBSIDIARIES
SCHEDULE II –VALUATION AND QUALIFYING ACCOUNTS
(in thousands)
Year ended December 31, 2011
Deduction from asset accounts:
Allowance for doubtful accounts
Year ended December 31, 2012
Deduction from asset accounts:
Allowance for doubtful accounts
Year ended December 31, 2013
Deduction from asset accounts:
Allowance for doubtful accounts
Balance at
Beginning
of Period
Charged to
Expense
Accounts
Written
Off
Balance at
End of
Period
$
1,843
240
(392 )
$
1,691
$
1,691
240
(317 )
$
1,614
$
1,614
211
(111 )
$
1,714
F-20
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused
this Report to be signed on its behalf by the undersigned, thereunto duly authorized, on the 5th day of March, 2014.
SIGNATURES
MILLER INDUSTRIES, INC.
By: /s/ Jeffrey I. Badgley
Jeffrey I. Badgley
Co-Chief Executive Officer
Know all men by these presents, that each person whose signature appears below constitutes and appoints Jeffrey I. Badgley
as attorney in fact, with power of substitution, for him in any and all capacities, to sign any amendments to this Report on Form 10 K,
and to file the same, with exhibits thereto, and other documents in connection therewith, with the Securities and Exchange
Commission, hereby ratifying and confirming all that said attorney in fact may do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Exchange Act of 1934, this Report has been signed below by the following
persons on behalf of the Registrant in the capacities indicated on the 5th day of March, 2014.
Signature
Title
/s/ William G. Miller
William G. Miller
/s/ Jeffrey I. Badgley
Jeffrey I. Badgley
/s/ William G. Miller, II
William G. Miller, II
/s/ J. Vincent Mish
J. Vincent Mish
/s/ Theodore H. Ashford, III
Theodore H. Ashford, III
/s/ A. Russell Chandler, III
A. Russell Chandler, III
/s/ Richard H. Roberts
Richard H. Roberts
Chairman of the Board of Directors
Co-Chief Executive Officer and Director
President and Co-Chief Executive Officer
Executive Vice President, Treasurer and Chief Financial Officer
(Principal Financial and Accounting Officer)
Director
Director
Director
S-1
Exhibit Number
EXHIBIT INDEX
Description
10.18
10.19
10.20
21
23.1
24
31.1
31.2
31.3
32.1
32.2
32.3
101
Letter Agreement, dated as of November 27, 2013 between the Registrant and William G. Miller, effective as
of December 31, 2013, amending the Employment Agreement dated as of December 30, 2008
Letter Agreement, dated as of November 27, 2013 between the Registrant and Jeffrey I. Badgley, effective as
of December 31, 2013, amending the Employment Agreement dated as of December 30, 2008 and the
Change in Control Agreement effective December 30, 2008
Letter Agreement, dated as of November 27, 2013 between the Registrant and J. Vincent Mish, effective as of
December 31, 2013, amending the Employment Agreement dated as of December 30, 2008 and the Change in
Control Agreement effective December 30, 2008
Subsidiaries of the Registrant
Consent of Joseph Decosimo and Company, PLLC
Power of Attorney (see signature page)
Certification Pursuant to Rules 13a-14(a)/15d-14(a) by Co-Chief Executive Officer
Certification Pursuant to Rules 13a-14(a)/15d-14(a) by Co-Chief Executive Officer
Certification Pursuant to Rules 13a-14(a)/15d-14(a) by Chief Financial Officer
Certification Pursuant to Section 1350 of Chapter 63 of Title 18 of United States Code by Co-Chief Executive
Officer
Certification Pursuant to Section 1350 of Chapter 63 of Title 18 of United States Code by Co-Chief Executive
Officer
Certification Pursuant to Section 1350 of Chapter 63 of Title 18 of United States Code by Chief Financial
Officer
The following financial information from Miller Industries, Inc.’s Annual Report on Form 10-K for the year
ended December 31, 2013, formatted in XBRL (eXtensible Business Reporting Language): (i) Consolidated
Balance Sheets as of December 31, 2013 and December 31, 2012, (ii) Consolidated Statements of Income for
the years ended December 31, 2013, 2012 and 2011, (iii) Consolidated Statements of Comprehensive Income
for the years ended December 31, 2013, 2012 and 2011, (iv) Consolidated Statements of Shareholder’s
Equity for the years ended December 31, 2013, 2012 and 2011, (v) Consolidated Statements of Cash Flows
for the years ended December 31, 2013, 2012 and 2011, and (vi) the Notes to Consolidated Financial
Statements.
Name of Entity
Jurisdiction of Incorporation
SUBSIDIARIES
Exhibit 21
APACO, Inc.
Boniface Engineering, Ltd.
Century Holdings, Inc.
Champion Carrier Corporation
Chevron, Inc.
Delavan Automotive LLC
Jige International S.A.
Miller Financial Services Group, Inc.
Miller/Greeneville, Inc.
Miller Industries Distributing, Inc.
Miller Industries Europe B.V.
Miller Industries International, Inc.
Miller Industries Towing Equipment Inc.
RRIC Acquisition Corp.
Delaware
United Kingdom
Tennessee
Delaware
Pennsylvania
Delaware
France
Tennessee
Tennessee
Delaware
Netherlands
Tennessee
Delaware
Delaware
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We hereby consent to the incorporation by reference in the following Registration Statements:
Exhibit 23.1
(1)
(2)
(3)
(4)
(5)
(6)
(7)
Registration Statement on Form S-4 (File No. 333-34641);
Registration Statement on Form S-8 (File No. 333-82282);
Registration Statement on Form S-3 (File No. 333-113782);
Registration Statement on Form S-3 (File No. 333-116107);
Registration Statement on Form S-8 (File No. 333-124676);
Registration Statement on Form S-8 (File No. 333-127481); and
Registration Statement on Form S-8 (File No. 333-188898)
of our reports dated March 5, 2014, relating to the consolidated financial statements, financial statement schedule and effectiveness of
internal control over financial reporting of Miller Industries, Inc. and subsidiaries, which appear in this Form 10-K.
/s/ Joseph Decosimo and Company, PLLC
Chattanooga, Tennessee
March 5, 2014
Exhibit 31.1
I, Jeffrey I. Badgley, certify that:
1.
2.
3.
4.
I have reviewed this annual report on Form 10-K of Miller Industries, Inc.;
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading
with respect to the period covered by this report;
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all
material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods
presented in this report;
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and
procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as
defined in Exchange Act Rule 13a-15(f) and 15d-15(f)) for the registrant and have:
(a)
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be
designed under our supervision, to ensure that material information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being
prepared;
(b)
Designed such internal control over financial reporting, or caused such internal control over financial
reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting
and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c)
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this
report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered
by this report based on such evaluation; and
(d)
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred
during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has
materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over
financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons
performing the equivalent functions):
(a)
All significant deficiencies and material weaknesses in the design or operation of internal control over
financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and
report financial information; and
(b)
Any fraud, whether or not material, that involves management or other employees who have a significant
role in the registrant’s internal control over financial reporting.
Date: March 5, 2014
/s/ Jeffrey I. Badgley
Jeffrey I. Badgley
Co-Chief Executive Officer
Exhibit 31.2
I, William G. Miller, II, certify that:
1.
2.
3.
4.
I have reviewed this annual report on Form 10-K of Miller Industries, Inc.;
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading
with respect to the period covered by this report;
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all
material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods
presented in this report;
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and
procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as
defined in Exchange Act Rule 13a-15(f) and 15d-15(f)) for the registrant and have:
(a)
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be
designed under our supervision, to ensure that material information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being
prepared;
(b)
Designed such internal control over financial reporting, or caused such internal control over financial
reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting
and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c)
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this
report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered
by this report based on such evaluation; and
(d)
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred
during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has
materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over
financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons
performing the equivalent functions):
(a)
All significant deficiencies and material weaknesses in the design or operation of internal control over
financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and
report financial information; and
(b)
Any fraud, whether or not material, that involves management or other employees who have a significant
role in the registrant’s internal control over financial reporting.
Date: March 5, 2014
/s/ William G. Miller, II
William G. Miller, II
President and Co-Chief Executive Officer
Exhibit 31.3
I, J. Vincent Mish, certify that:
1.
2.
3.
4.
I have reviewed this annual report on Form 10-K of Miller Industries, Inc.;
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading
with respect to the period covered by this report;
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all
material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods
presented in this report;
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and
procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as
defined in Exchange Act Rule 13a-15(f) and 15d-15(f)) for the registrant and have:
(a)
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be
designed under our supervision, to ensure that material information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being
prepared;
(b)
Designed such internal control over financial reporting, or caused such internal control over financial
reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting
and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c)
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this
report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered
by this report based on such evaluation; and
(d)
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred
during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has
materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over
financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons
performing the equivalent functions):
(a)
All significant deficiencies and material weaknesses in the design or operation of internal control over
financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and
report financial information; and
(b)
Any fraud, whether or not material, that involves management or other employees who have a significant
role in the registrant’s internal control over financial reporting.
Date: March 5, 2014
/s/ J. Vincent Mish
J. Vincent Mish
Executive Vice President and Chief Financial Officer
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350
In connection with the Annual Report of Miller Industries, Inc. (the “Company”) on Form 10-K for the period ended
December 31, 2013 filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Jeffrey I. Badgley, Co-
Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. § 1350 as adopted by § 906 of the Sarbanes-Oxley Act of
2002, that:
(1)
(2)
The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
The information contained in the Report fairly presents, in all material respects, the financial condition and results of
operations of the Company.
Exhibit 32.1
Dated: March 5, 2014
/s/ Jeffrey I. Badgley
Jeffrey I. Badgley
Co-Chief Executive Officer
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350
In connection with the Annual Report of Miller Industries, Inc. (the “Company”) on Form 10-K for the period ended
December 31, 2013 filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, William G. Miller, II,
Co-Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. § 1350 as adopted by § 906 of the Sarbanes-Oxley Act of
2002, that:
(1)
(2)
The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
The information contained in the Report fairly presents, in all material respects, the financial condition and results of
operations of the Company.
Dated: March 5, 2014
Exhibit 32.2
/s/ William G. Miller, II
William G. Miller, II
President and Co-Chief Executive Officer
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350
In connection with the Annual Report of Miller Industries, Inc. (the “Company”) on Form 10-K for the period ended
December 31, 2013 filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, J. Vincent Mish,
Executive Vice President and Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. § 1350 as adopted by § 906 of
the Sarbanes-Oxley Act of 2002, that:
(1)
(2)
The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
The information contained in the Report fairly presents, in all material respects, the financial condition and results of
operations of the Company.
Exhibit 32.3
Dated: March 5, 2014
/s/ J. Vincent Mish
J. Vincent Mish
Executive Vice President and Chief Financial Officer
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