1. Jiaze (JZ) Li and Jack Lindblad
Miller Industries Inc.,
Presented April 6, 2017
Jiaze (JZ) Li and Jack Lindblad hi

2. Agenda 1 2 3 4 Company Overview Financial Analysis
Macroeconomy and Industry
Agenda 3
Financial Analysis 4
Valuation Consideration

3. 1
PART ONE
Company Overview 。

4. Current Holdings Portfolio Weight by Cost Portfolio Weight by Value
MLR has generated solid return since buying
Portfolio Weight by Cost
Portfolio Weight by Value
Share Performance
Buy $20.59
Realized Return %
Sell $26.60
Buy at May 5, Sell at
Source: Portfolio data from RCMP website. Accessed April 5, 2017.
Source: Share price and volume information from Yahoo! Finance. As of April 6, 2017

5. Business Overview Overview Key Statistics Products Wrecker Car Carrier
Millers Industries is a leading towing equipment manufacturer
Overview
Key Statistics
The world’s largest manufacturer of towing and recovery equipment
Founded in 1994 in Ooltewah, Tennessee
Products: Towing and recovery equipment including Wrecker, car carrier, and transport trailers
5 production facilities in US, 1 in UK, 1 in France
Consolidating production to Greeneville and Ooltewah, Tennessee
NYSE: MLR
Share Price1: $24.00
Market Cap2: Mil.
Trailing P/E3: 13.71
Dividend Yield4: 0.72 (2.80%)
Products
Wrecker
Car Carrier
Transport Trailer
Source: 1,2,3,4 data from Bloomberg as of April 5, 2017
Source: Financial information from Year 2016 – 10-K
Source: Products picture from Millers Industries Website

6. Brand Portfolio Wrecker and car carrier
Millers Industries has10 product lines targeting different customer base
Wrecker and car carrier
Founded in 1974, “top of the line” 1 11
Increasing popular car carriers
Can transport single or multiple vehicle 1 11
Mid-priced wreckers
“Most recognized brand domestically + internationally” 1 11
Prem. Light and heavy duty wreckers, which is sold under independent distributor 1 11
Premium multi-vehicle transport trailers
Can hold up to 7 vehicles 1 11
“Eagle” (light duty wreckers by acquisition) and “Champion” (lower-priced car carriers) 1 11
Prem. wreckers and car carrier
Independent distributor network 1 11
Wreckers and car carriers in France, sold in Europe
Fit into local narrow roads 1 11
Roll-off system and slide-back carriers
Transport large equipment 1 11
Heavy duty wreckers used to tow tour buses
Manufacturing in UK 1 11
Source: Logo pictures from Miller Industries webpage.
Source: Brand description from K.

7. Independent Distributors
Value Chain Analysis
Supplier
Distributor
Customer 1
Light Duty Wrecker
Professional wrecker operators Repossession towing services Local and national governmental entities
Repair shop or salvage company owners
Independent Distributors
Raw materials including aluminum, sheet steels
80 distributors serving domestic and foreign market
Heavy Duty Wrecker
Professional wrecker operators serving the needs of commercial vehicle operators
Governmental entities
Selected by the United States General Services Administration as an approved source for certain federal and defense agencies. 2
Components from third-parties - hydraulic cylinders, winches, valves and pumps
Prime Contractor
Serving large organizations including government entities
Car Carrier
Equipment rental companies that offer delivery service
Professional towing operators who desire to complement their existing towing capabilities
Source: Logo pictures from Miller Industries webpage.
Source: K.

8. Production and Expansion
Production Facilities
Acreage (Square Feet)
Function
Plan
Ooltewah, TN
279000, plus 53,000 under construction
Light and heavy duty wreckers
Expand
Hermitage, Pennsylvania
275,380
Car carrier -
Mercer, Pennsylvaniain
110,000
Car carrier and light duty wreckers
Close
2 in Greeneville, Tennessee
135,000, plus 50,000 leased property
Heavy duty wreckers and trailers
Lorraine, France
205,000
Wreckers and car carrier
Norfolk, England
48,000
Capital Expenditure in 2017
Production Facility
Expansion
Cost in total approximately $20,600.
$8,000 of these costs were incurred as of December 31, 2016 and are included in PP&E
The remainder of these costs are expected to be incurred during 2017
Construction of Administrative Building
The Company intends to construct an administrative building at its Ooltewah, Tennessee facility
The current estimated costs of such project are approximately $4,200
Expected to be incurred during 2017
Source: K form

9. Institutional Investors
Management and Investors
Experienced Management
Key Executive Profile
Institutional Investors
Deborah Whitmire
January 2017 – since CFO and Treasurer
2014 – 2016 VP and Corporate Controller
2005 – 2014 Corporate Controller
2000 – 2005 Director of Finance
Controller
1996 – 1997 Miller Accounting Manager
Jeffery I. Badgley
December 2013 – since Co-CEO
March 2011 – December 2013 CEO
June 1996 – March 2011 President
1994 – 1996 Vice President
1988 – 1996 President of Millers Towing Equipment Inc.
87.5% of total shares held by institutional investors with 4.04% held by insiders
Source: Executive information from K form
Source: Profile picture from
Source: Investor information from Yahoo! Finance. As of April 6, 2017

10. SWOT SWOT Strength Weakness Opportunity Threat
Market Leadership but competing in a cyclical industry
Strength
Weakness
Market leader in towing equipment industry (diverse product portfolio + international distribution channel)
Effective cost management
Clean balance sheet which leaves buffer for cyclicality
Thin profit margin of 3.3%
Cyclical nature of the industry
Strong bargaining power of customer (government entities)
SWOT
Opportunity
Threat
Market penetration in domestic market
International expansion primarily in Europe
Acquisition to strengthen market leadership
Demand level is affected by fuel prices
New competition
Political turmoil esp. in Euro
Access to capital market
S Economies of scale for either marketing and production purposes.
O International expansion – domestification W
T: government cut exp.

11. 2
PART TWO
Macroeconomics and Industry Analysis

12. Macroeconomic Overview
Cost of Goods Sold highly dependent on Steel and Aluminum Prices
Buyers ability to purchase dependent on Interest Rates and Fuel Prices
Exchange rates effect demand for export of goods
Towing and Recovery Services Industry driven by the number of accidents which is driven by a variety of factors:
Severe Weather
Disposable Income and Consumer Confidence
Number of Vehicle Accidents
Number of motor vehicle registrations
Total Vehicle Miles
Average age of Vehicle fleet
Source: IBIS World.

13. Number of Motor Vehicle Registrations01 02 05 03 04
More new cars on the road, more accidents
Naturally, amount decreased during recression but then picked up
IBIS projects it to grow at 1.2% over next five years as population grows but consumers face higher oil prices and interest rates
Source: IBISWorld Automobile Towing n the US industry report.

14. Average Age of Vehicle Fleet01 02 05 03 04
Older cars breakdown and cause more accidents
As a result of a variety of factors the average age of vehicles has been increasing
Even though Consumer Confidence and Disposable Income have been increasing the average age of fleet has increased
Cars are lasting longer and financially catious drivers choosing to repair car as opposed to buying a new one
Source: IBISWorld Automobile Towing n the US industry report.

15. Total Vehicle Miles 01 02 05 03 04
The more driving activity the greater the amount of accidents
Financial crisis and recession had combined effect of causing people to choose other forms of transportation
As economy picked up and more people went back to work, total vehicle miles increased
IBIS expects amount to plateau as businesses look to technology/internet to reduce transportation costs
Source: IBISWorld Automobile Towing n the US industry report.

16. Number of Vehicle Accidents01 02 05 03 04
Naturally, the greater the amount of vehicle accidents the greater amount of towing is required
Number of Accidents has decreased over the long term as cars and roads have become safer
Number of accidents also decreased during recession when people drove less
IBIS projects the number of accidents to decrease slightly then remain stagnat as cars become increasingly safer
Source: IBISWorld Automobile Towing n the US industry report.

17. Industry Analysis
Miller is the world leader in wrecker and car carrier manufacturing
In the U.S. Currently a $627 Million industry with 3 leaders accounting for ¾ of all sales
The rest of the market is accounted for by small regional companies that service highly customized demand
High barriers to Entry due to level of patented designs
Demand for Wreckers and Car Carriers has been high due to pent up demand from which should continue to drive sales over next few years
Competition for sales in this industry is driven by product quality and innovation, price and service
Competition also comes from the market for used towing and recovery equipment 01 02 05 03 04
Source: Markets and Research Vocational Truck/Body Industry in North America Report

18. Jerr-Dan Principal Competitor 01 02 05 03 04
Subsidiary of publically traded Oshkosh Corporation
$42.36 M in Sales
Also sells light and heavy duty wreckers, and car carriers
Sells through distributors in US, Canada, Europe, and Australia
Has been granted a variety of patents including the advanced rollback wheel-lift and Dual Angle Deck 01 02 05 03 04
Source: Oshkosh Corporation K

19. Miller Industries Historical Cyclicality
-63% 01 02
-32% 05 03 04
Source: Miller Industries Historical Financial Data. Data from Capital IQ.

20. 3
PART THREE
Financial Analysis

21. Profitability Ratio
Millers has been increasing cost efficiency and turnover to improve profitability
Thin profit margin on industry level
Source: Capital IQ. Analyst projection.

22. Efficiency Ratio
Source: Capital IQ. Analyst projection.

23. Greenblatt Ratio .
Source: Capital IQ. Analyst projection.

24. Dupont Analysis
Source: Capital IQ. Analyst projection.

25. 4
PART FOUR
Valuation

26. Financial Projections
Source: Capital IQ. Analyst projection.

27. Discount Rate
8.83%
13.89%
Source: Capital IQ. Analyst projection.

28. Discounted Cash Flow
Source: Capital IQ. Analyst projection.

29. Comparables
Supreme Industries- Manufactures and Sells specialized commercial vehicles
Spartan Motors-Manufactures and Sells specialized commercial vehicles including Emergency Response Vehicles, Fleet Vehicles, and Specialty Chassis for Drill Rigs and Buses
标题数字等都可以通过点击和重新输入进行更改。 03
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CVGI-Designs, Manufactures, and Sells various cab related products for commercial vehicles
输入标题
输入标题 02
标题数字等都可以通过点击和重新输入进行更改。
Oshkosh-Designs, Manufactures, and Markets specialty vehicles and vehicle bodies worldwide
Wabash -Designs, Manufactures, and Sells semi-trailers and liquid transportation systems
Source: Capital IQ.

30. 03 02 04 Comparables Valuation 输入标题 输入标题 输入标题 输入标题
标题数字等都可以通过点击和重新输入进行更改。 03
输入标题
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输入标题 02 04
标题数字等都可以通过点击和重新输入进行更改。
Source: Capital IQ
Source: Capital IQ. Analyst projection.

31. 03 02 Valuation 75% $24.60 DCF Price Intrinsic Value 输入标题 输入标题 $25.40
$27.79
25%
Comp Price

32. Scenario Analysis
$27.88
$17.10
Source: Capital IQ. Analyst projection.

33. Recommendation $27.88 Hold Bull Case $25.40 Upside
International Expansion
Domestic Penetration
Cost Efficiencies
Clear Industry Leader
Intrinsic Value
$24.00
Stock Price
Downside
Cyclical Industry
Potential for Significant Contraction
Strong Balance Sheet provides protection
$17.10
Bear Case

34. THANKS FOR YOUR WATCHING
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