MILLER INDUSTRIES INC /TN/, 10-K405, 1996-07-30

MILLER INDUSTRIES INC /TN/
10-K405, 1996-07-30
TRUCK & BUS BODIES

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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

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FORM 10-K

/X/ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934.

<TABLE>
<S> <C>
FOR THE FISCAL YEAR COMMISSION FILE NO.
ENDED 0-24298
APRIL 30, 1996
</TABLE>

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MILLER INDUSTRIES, INC.
(Exact name of Registrant as specified in its charter)

<TABLE>
<S> <C>
TENNESSEE 62-1566286
(State or other jurisdiction (I.R.S. Employer
of incorporation or Identification No.)
organization)

900 CIRCLE 75 PARKWAY,
SUITE 1250,
ATLANTA, GEORGIA 30339
(Address of principal (Zip Code)
executive offices)
</TABLE>

Registrant's telephone number, including area code: (770) 988-0797

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Securities registered pursuant to Section 12(b) of the Act:

Common Stock, Par Value $0.01 Per Share

Name of each exchange on which registered: New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act: None.

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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 _X_ 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 10K. [X]

The aggregate market value of the voting stock held by nonaffiliates of the
Registrant as of June 30, 1996 was $229,897,308, based on the closing sale price
of the Common Stock as reported by the New York Stock Exchange on such date. See
Item 12.

At June 30, 1996 there were 11,571,912 shares of Common Stock, par value
$0.01 per share, outstanding.
DOCUMENTS INCORPORATED BY REFERENCE

Portions of the Registrant's definitive Proxy Statement for the 1996 Annual
Meeting of Shareholders are incorporated by reference into Part III.

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TABLE OF CONTENTS
FORM 10-K ANNUAL REPORT
PART I

<TABLE>
<S> <C> <C>
ITEM 1. BUSINESS................................................................... 1
ITEM 2. PROPERTIES................................................................. 5
ITEM 3. LEGAL PROCEEDINGS.......................................................... 5
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS........................ 6

PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS.................................................................... 6
ITEM 6. SELECTED FINANCIAL DATA.................................................... 6
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS................................................................. 8
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA................................ 11
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE................................................................. 11

PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT......................... 11
ITEM 11. EXECUTIVE COMPENSATION..................................................... 11
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT............. 11
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS............................. 11

PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULE AND REPORTS ON FORM 8-K............. 12
FINANCIAL STATEMENTS.................................................................. F-1
FINANCIAL STATEMENT SCHEDULE.......................................................... S-1
SIGNATURES............................................................................ II-1
</TABLE>

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PART I

ITEM 1. BUSINESS

GENERAL

Miller Industries, Inc. (the "Company") is the largest manufacturer of
towing and recovery equipment in the world and markets its products under the
Century, Challenger, Holmes, Champion, Eagle, Jige and Boniface brand names
through approximately 110 independent distributors in North America and through
approximately 30 distributors servicing foreign markets. The Company has
recently increased its presence in Europe with its acquisitions of S.A. Jige
Lohr Wreckers, located in Revigny-Sur-Ornain, France, in January 1996 and of
Boniface Engineering Limited, located in Norfolk, England, in April 1996.

The Company's products consist of the bodies of wreckers and car carriers,
which are installed on truck chassis manufactured by third parties. Wreckers are
used generally 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 60 ton lifting capacities. Car carriers are
specialized flat bed trucks with hydraulic tilting beds 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 over long distances.

The Company manufactures its products in five facilities and markets its
products under seven brand names, achieving manufacturing economies of scale
while maintaining each brand's distinct product image and corresponding customer
loyalty. The Company's products are sold through independent distributors that
serve all 50 states, Canada and Mexico, as well as other foreign markets
including the Pacific Rim, Europe and the Middle East. The Company's wreckers
and car carriers are used primarily by professional towing operators, owners of
service stations and repair shops, equipment rental companies and salvage
operators.

RECENT DEVELOPMENTS

On July 26, 1996, the Company announced that it had agreed to acquire four
towing equipment distribution companies with historical revenues totaling
approximately $40 million annually. The companies, located in Atlanta, Chicago,
Denver and Vancouver, currently market Company products as well as other
specialty transportation equipment. These acquisitions will form the core of a
new division of the Company which will be responsible for the development and
continuity of the towing equipment distribution business. The transactions are
structured as stock swaps involving the issuance of an aggregate of
approximately 200,000 shares of common stock. All are expected to close in the
first or second quarter of fiscal 1997, subject to the satisfaction of customary
conditions.

PRODUCT DESIGN AND DEVELOPMENT

The Company's 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, the Company focuses on developing or licensing new
technology for its products.

PATENTS AND TRADEMARKS

The development of the underlift parallel linkage and L-arms in 1982 is
considered one of the most innovative developments in the wrecker industry in
the last 25 years. This technology is significant primarily because it allows
the damage-free towing of reengineered vehicles made of lighter weight
materials. Patents for these technologies were granted to an operating
subsidiary of the Company in 1987 and 1989. These patents expire in 2004. These
innovations, particularly the L-arm device, are used in a majority of the
commercial wreckers today. Management believes that utilization of such devices
without a license is an infringement of the Company's patents. Recently, the
Company successfully litigated an infringement suit in which the jury verdict
confirmed the validity of the Company's patents on these technologies. The
Company also holds a number of other utility and

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design patents covering other products, including the "Eagle-Claw" hook up
system and the car carrier anti-tilt device. The Company has also obtained the
rights to use and develop certain technologies owned or patented by others.

The Company's trademarks "Century," "Holmes," "Champion," "Formula I,"
"Eagle Claw SelfLoading Wheellift," "Pro Star" and "Street Runner," among
others, are registered with the United States Patent and Trademark Office. The
Company has applied for trademark registration of "Challenger," as well as other
marks. Management believes that the Company's 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.

PRODUCT WARRANTIES AND INSURANCE

The Company offers a 12-month limited product and service warranty on its
wrecker and car carrier products. The Company's warranty generally provides for
repair or replacement of failed parts or components. Warranty service is usually
performed by the Company or an authorized distributor. Due to its emphasis on
quality production, the Company's warranty expense in fiscal 1996 averaged less
than 1% of net sales. Management believes that the Company maintains adequate
general liability and product liability insurance.

MANUFACTURING

The manufacturing process for the Company's products consists primarily of
cutting and bending sheet steel or aluminum into parts that are welded together
to form the wrecker or car carrier body. Components such as hydraulic cylinders,
winches, valves and pumps, which are purchased by the Company from third-party
suppliers, are then attached to the frame to form the completed wrecker or car
carrier body. The completed body is either installed by the Company or shipped
by common carrier to an independent distributor where it is then installed on a
truck chassis. Generally, the wrecker or car carrier bodies are painted by the
Company with a primer coat only, so that towing operators can select customized
colors to coordinate with chassis colors or fleet colors. To the extent final
painting is required before delivery, the Company contracts with independent
paint shops for such services.

The Company purchases raw materials and component parts from a number of
sources. Although the Company has no long term supply contracts, management
believes the Company has good relationships with its primary suppliers. The
Company has experienced no significant problems in obtaining adequate supplies
of raw materials and component parts to meet the requirements of its production
schedules. Management believes that the materials used in the production of the
Company's 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 the Company's
business.

SALES 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, municipal and federal governmental agencies, and
repair shop or salvage company owners. The heavy duty market is dominated by
professional wrecker operators serving the needs of commercial vehicle
operators. The car carrier market, historically dominated by automobile salvage
companies, 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 40,000 professional towing operators and 80,000 service station,
repair shop and salvage operators comprising the overall towing and recovery
market.

The Company's sales force, which services the Company's independent
distributors, consists of 29 sales representatives, seven of whom are Company
employees whose responsibilities include providing administrative and sales
support to the entire distributor base. The remaining 22 sales representatives
are independent contractors who market the Company's products exclusively. Sales

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representatives receive commissions on direct sales based on product type and
brand and generally are assigned specific territories in which to promote and
solicit sales of the Company's products and to maintain customer relationships.

The Company has developed a diverse customer base consisting of
approximately 110 independent distributors in North America, who serve all 50
states, Canada, and Mexico, and approximately 30 distributors that serve other
foreign markets. During the fiscal year ended April 30, 1996, no single
distributor accounted for more than 5% of the Company's sales. The top ten
distributors accounted for approximately 30% of sales during that period.
Management believes the Company's broad and diverse customer base provides it
with the flexibility to adapt to market changes, lessens its dependence on
particular distributors and reduces the impact of regional economic factors.

To support sales and marketing efforts, the Company produces demonstrator
models that are used by the Company's sales representatives and distributors. To
increase exposure to its products, the Company also has served as the official
recovery team for many automobile racing events, including the Daytona,
Talladega, Atlanta and Darlington NASCAR races, the Grand Prix in Miami and the
IMSA "24 Hours at Daytona" and "12 Hours at Sebring" races, among others.

The Company routinely responds to requests for proposals or bid invitations
in consultation with its local distributors. The Company has been selected by
the United States General Services Administration as an approved source for
certain federal and defense agencies. The Company intends to continue to pursue
government contracting opportunities.

The towing and recovery equipment industry places heavy marketing emphasis
on product exhibitions at national and regional trade shows. In order to focus
its marketing efforts and to control marketing costs, the Company has reduced
its participation in regional trade shows and now concentrates its efforts on
five of the major trade shows each year. The Company works with its distributor
network to concentrate on various regional shows.

COMPETITION

The towing and recovery equipment manufacturing industry is highly
competitive for sales to distributors and towing operators. Management believes
that competition in the towing and recovery equipment industry is a function of
product quality and innovation, reputation, technology, customer service,
product availability and price. The Company competes 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, the
Company has invested substantial resources and management time in building and
maintaining strong relationships with distributors. Management also believes
that the Company's products are regarded as high quality within their particular
price points. The Company's 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 the Company's 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. Accordingly,
management believes that the Company's ownership of patents on certain of the
industry's leading technologies has given it a competitive advantage. Certain of
the Company's competitors may have greater financial and other resources and may
provide more dealer and retail customer financing than the Company.

BACKLOG

The Company produces virtually all of its products to order. The Company's
backlog is based upon customer purchase orders that the Company believes are
firm. The level of backlog at any particular time, however, is not an
appropriate indicator of the future operating performance of the Company.

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Certain purchase orders are subject to cancellation by the customer upon
notification. Given the Company's production and delivery schedules, as well as
the recent plant expansions, management believes that the current backlog
represents less than three months of production.

EMPLOYEES

At April 30, 1996, the Company employed approximately 500 people. None of
the Company's employees is covered by a collective bargaining agreement, though
its employees in France and England have certain similar rights by their
respective government's employment regulations. The Company considers its
employee relations to be good.

GOVERNMENT REGULATIONS AND ENVIRONMENTAL MATTERS

The Company's 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 the Company is 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 has not had a material adverse impact on the Company's financial
condition or results of operations in the past and is not expected to have a
material adverse impact in the future.

The Company is 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 the Company's 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 the
operations of the Company.

EXECUTIVE OFFICERS OF THE REGISTRANT

<TABLE>
<CAPTION>
NAME AGE POSITION WITH THE COMPANY
- ----------------------------------- --- ------------------------------------------------------------
<S> <C> <C>
William G. Miller.................. 49 Chairman of the Board and Chief Executive Officer
Jeffrey I. Badgley................. 44 President, Chief Operating Officer and Director
Frank Madonia...................... 47 Vice President, Secretary and General Counsel
J. Vincent Mish.................... 45 Vice President, Treasurer and Chief Financial Officer
L. Stanley Neely................... 49 Vice President
Daniel N. Sebastian................ 52 Vice President
</TABLE>

WILLIAM G. MILLER has served as Chairman of the Board and Chief Executive
Officer of the Company since April 1994 and spends substantially all of his time
on Company matters. He also served as President of the Company from April 1994
to June 1996. Mr. Miller 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. Mr. Miller also
serves as Chairman of Flow Measurement, Inc. ("Flow Measurement"), a maker of
industrial flow meters, and served as its President from February 1987 until
April 1994. Mr. Miller beneficially owns 80% of the capital stock of Flow
Measurement. 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 President and Chief Operating Officer of
the Company since June 1996 and as a director since January 1996. In addition,
Mr. Badgley is President of Miller Industries Towing Equipment and is
responsible for the day to day operations of the towing and recovery equipment
business of the Company. Mr. Badgley served as Vice President - Sales of Miller
Industries Towing Equipment from 1988 to 1996. Mr. Badgley served for over five
years as Vice

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President - Sales and Marketing of Challenger Wrecker Corporation ("Challenger
Wrecker"), a position he held from 1982 until joining Miller Industries Towing
Equipment. He served as Vice-President of the Company from April 1994 to June
1996.

FRANK MADONIA has served as Vice President, General Counsel and Secretary of
the Company since April 1994. Mr. Madonia served as Secretary and General
Counsel to Miller Industries Towing Equipment 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., The
Signal Companies, Inc. and Allied-Signal Inc. In addition, Mr. Madonia is
registered to practice before the United States Patent and Trademark Office.

J. VINCENT MISH is a certified public accountant and has served as Vice
President, Chief Financial Officer and Treasurer of the Company since April
1994. Mr. Mish has served as Vice President and Treasurer of Miller Industries
Towing Equipment 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, Georgia
and Michigan Certified Public Accountant societies.

L. STANLEY NEELY has served as Vice President of the Company since April
1994. Mr. Neely served as President and a director of Miller Industries Towing
Equipment from December 1992 to May 1994. From July 1987 through April 1990, Mr.
Neely served as President of Hersey Measurement Company, a division of Flow
Measurement, and from 1990 to 1992, he served in various management positions
for Challenger Wrecker and Miller Industries Towing Equipment. Mr. Neely served
as President of Trackmobile, Inc., an industrial vehicle manufacturer, from 1984
to 1987. Prior to 1984, he served in various management positions for the Heil
Corporation.

DANIEL N. SEBASTIAN has served as Vice President of the Company since April
1994. Mr. Sebastian has also served as President of Champion Carrier Corporation
("Champion"), a wholly owned subsidiary of the Company, since July 1993. Mr.
Sebastian served as Vice President of SAFEREC, Inc., a towing and recovery
distributorship, from 1987 until 1988, at which time he became the operating
manager of Champion. Mr. Sebastian has over 20 years of experience in the towing
and recovery industry.

ITEM 2. PROPERTIES

The Company operates two single story, steel frame manufacturing facilities
in the United States; one in Ooltewah, Tennessee containing approximately
150,000 square feet; and the other in Hermitage, Pennsylvania consisting of
approximately 95,000 square feet. The Ooltewah plant, which produces light duty
and heavy duty wreckers, employs approximately 60 office administration and
supervisory staff and approximately 240 production workers. The Hermitage plant,
which produces car carriers, employs five office administration and supervisory
staff and approximately 100 production workers. The Company operates a day shift
at both plants and a partial second shift at Ooltewah. The Company leases its
executive offices in Atlanta, Georgia pursuant to a lease expiring in 1997.

The Company recently added 22,500 square feet of production capacity at its
Hermitage facility and approximately 15,000 square feet at its Ooltewah
facility. Management believes that these plant expansions, combined with
additional trained personnel, will allow the Company to increase production,
given its current product mix. The Company owns the Ooltewah facility, and also
purchased the Hermitage facility in February 1996. As part of the Jige
acquisition, the Company acquired a manufacturing facility in
Revigny-Sur-Ornain, France which employs approximately 100 production and

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administrative manufacturing personnel. In addition, Jige has a facility in
Bar-le-duc, France. As part of the Boniface Engineering acquisition, the Company
acquired a manufacturing and administrative facility in Norfolk, England.

ITEM 3. LEGAL PROCEEDINGS

The Company is, from time to time, a party to litigation arising in the
normal course of its business. Management believes that none of these actions,
individually or in the aggregate, will have a material adverse effect on the
financial position or results of operations of the Company.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

No matters were submitted to a vote of security holders of the Registrant
during the fourth quarter of the fiscal year covered by this Report.

PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

The Registrant's Common Stock is traded on the New York Stock Exchange
("NYSE") under the symbol "MLR." The following table sets forth the range of
high and low sales prices for the Common Stock for the period from August 2,
1994, when public trading of the Common Stock commenced, as reported on the
Nasdaq Stock Market's National Market through December 19, 1995 and thereafter
on the NYSE. The price quotations for the Nasdaq National market trading period
reflect inter-dealer prices, without adjustment for retail mark-up, mark-down or
commission and may not necessarily represent actual transactions. The following
prices have been adjusted to reflect the 3-for-2 stock split effected on April
12, 1996.

<TABLE>
<CAPTION>
HIGH LOW
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<S> <C> <C>
FISCAL YEAR ENDED APRIL 30, 1995
Second Quarter (beginning August 2, 1994).................................................. $ 10.00 $ 7.33
Third Quarter.............................................................................. 12.25 9.00
Fourth Quarter............................................................................. 12.33 11.09

FISCAL YEAR ENDED APRIL 30, 1996
First Quarter.............................................................................. 12.92 11.00
Second Quarter............................................................................. 13.67 10.83
Third Quarter.............................................................................. 19.33 13.25
Fourth Quarter............................................................................. 30.63 17.58
</TABLE>

The approximate number of holders of record and beneficial owners of Common
Stock as of July 15, 1996 was 1,400 and 3,400, respectively.

The Registrant has never declared cash dividends on the Common Stock. The
Registrant intends to retain its earnings to finance the expansion of its
business and does not anticipate paying cash dividends in the foreseeable
future. Any future determination as to the payment of cash dividends will depend
upon such factors as earnings, capital requirements, the Registrant's financial
condition, restrictions in financing agreements and other factors deemed
relevant by the Board of Directors. The payment of dividends by the Registrant
is restricted by its revolving credit facility.

ITEM 6. SELECTED FINANCIAL DATA

The following table sets forth the selected consolidated financial data of
the Company, which should be read in conjunction with "Management's Discussion
and Analysis of Financial Condition and Results of Operations" and with the
Company's Consolidated Financial Statements and Notes thereto. The selected
consolidated financial data for the years ended April 30, 1996 and 1995, the
nine months ended April 30, 1994 and the years ended July 31, 1993 and 1992 have
been derived from the consolidated financial statements of the Company audited
by Arthur Andersen LLP, independent public accountants. The selected
consolidated financial data for the twelve months ended April 30,

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1994 have been derived from the unaudited consolidated financial statements of
the Company which in the opinion of management, include all adjustments (which
consist of only normal recurring adjustments) necessary for a fair presentation
of the financial condition and results of operations of the Company for those
periods.

<TABLE>
<CAPTION>
TWELVE
YEARS ENDED MONTHS NINE MONTHS YEARS ENDED
APRIL 30, ENDED ENDED JULY 31,
-------------------- APRIL 30, APRIL 30, --------------------
1996 1995 1994 (1) 1994 (2) 1993 1992
--------- --------- ----------- ------------- --------- ---------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C>
STATEMENTS OF INCOME DATA:
Net sales............................................ $ 125,706 $ 94,722 $ 57,939 $ 45,873 $ 43,352 $ 32,567
Cost of sales........................................ 104,820 78,463 46,681 37,164 34,622 25,552
--------- --------- ----------- ------------- --------- ---------
Gross profit......................................... 20,886 16,259 11,258 8,709 8,730 7,015
--------- --------- ----------- ------------- --------- ---------
Operating expenses:
Selling.............................................. 5,709 4,922 4,032 3,039 3,567 2,946
General and administrative........................... 2,953 2,671 3,255 2,400 2,972 2,337
--------- --------- ----------- ------------- --------- ---------
Income from operations................................... 12,224 8,666 3,971 3,270 2,191 1,732
Interest income (expense), net........................... 303 (79) (128) (99) (129) (1,070)
Other income (expense), net.............................. (118) 74 56 51 35 19
--------- --------- ----------- ------------- --------- ---------
Income before income taxes, extraordinary gain and
cumulative effect of accounting change.................. 12,409 8,661 3,899 3,222 2,097 681
Provision for income taxes............................... (4,616) (3,255) (1,200) (1,200) 0 0
--------- --------- ----------- ------------- --------- ---------
Income before extraordinary gain and cumulative effect of
accounting change....................................... 7,793 5,406 2,699 2,022 2,097 681
Extraordinary gain on debt retirement (less applicable
income taxes of $175,000)............................... 0 288 0 0 0 0
Cumulative effect of change in accounting for income
taxes................................................... 0 0 379 379 0 0
--------- --------- ----------- ------------- --------- ---------
Net income............................................... 7,793 5,694 3,078 2,401 2,097 681
Preferred stock dividends................................ 0 0 (66) (38) (111) 0
--------- --------- ----------- ------------- --------- ---------
Net income available for common shareholders............. $ 7,793 $ 5,694 $ 3,012 $ 2,363 $ 1,986 $ 681
--------- --------- ----------- ------------- --------- ---------
--------- --------- ----------- ------------- --------- ---------
Net income per common share (3):
Before extraordinary gain and cumulative effect of
accounting change................................... $ 0.74 $ 0.61 $ 0.43 $ 0.32 $ 0.32 $ 0.11
Extraordinary gain on debt retirement................ 0.00 0.03 0.00 0.00 0.00 0.00
Cumulative effect of change in accounting for income
taxes............................................... 0.00 0.00 0.06 0.06 0.00 0.00
--------- --------- ----------- ------------- --------- ---------
$ 0.74 $ 0.64 $ 0.49 $ 0.38 $ 0.32 $ 0.11
--------- --------- ----------- ------------- --------- ---------
--------- --------- ----------- ------------- --------- ---------
Weighted average number of common and common equivalent
shares outstanding (3).................................. 10,501 8,943 6,158 6,158 6,158 6,158

BALANCE SHEET DATA (AT PERIOD END):
Working capital...................................... $ 49,677 $ 16,918 $ 7,890 $ 3,240 $ (425)
Total assets......................................... 99,323 49,375 28,556 21,090 16,934
Long term debt, less current portion................. 3,713 97 14,180 8,870 11,444
Cumulative redeemable preferred stock................ 0 0 4,094 4,056 0
Common shareholders' equity (deficit)................ 65,123 26,469 (2,129) (1,466) (3,932)
</TABLE>

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(1) The twelve month period ended April 30, 1994 is presented for comparison
only.

(2) In connection with the reorganization preceding the initial public
offering, the Company adopted an April 30 year end.

(3) Net income per common share and the weighted average number of common and
common equivalent shares outstanding are computed after giving retroactive
effect of the 3-for-2 common stock split effected April 12, 1996 and the
issuance of 6,157,500 shares of common stock in connection with the
reorganization in April 1994.

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ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

The following discussion of the results of operations and financial
condition of the Registrant should be read in conjunction with the Consolidated
Financial Statements and Notes thereto.

GENERAL

Under the Company's accounting policies, sales are recorded when equipment
is shipped to independent distributors or other customers. While the Company
manufactures only the bodies of wreckers, which are installed on truck chassis
manufactured by third parties, the Company sometimes purchases the truck chassis
for resale to its customers. Sales of Company-purchased truck chassis are
included in net sales. Margins are substantially lower on completed recovery
vehicles containing Company-purchased chassis because the markup over the cost
of the chassis is nominal.

The Company's net sales have historically been lower in its first quarter
when compared to the prior quarter due in part to decisions by purchasers of
light duty wreckers to defer wrecker purchases near the end of the chassis model
year. The Company's net sales have historically been relatively stronger in its
fourth quarter due in part to sales made at the largest towing and recovery
equipment trade show.

RESULTS OF OPERATIONS

YEAR ENDED APRIL 30, 1996 COMPARED TO YEAR ENDED APRIL 30, 1995

Net sales for the year ended April 30, 1996 increased 32.7% to $125.7
million from $94.7 million for the comparable period in 1995. The increase in
net sales was primarily the result of higher unit sales volume in all of the
Company's product lines and an increase in units sold complete with the truck
chassis included. Sales of Company-purchased truck chassis included in net sales
were $43.7 million and $26.0 million for the years ended April 30, 1996 and
1995, respectively. The growth in unit sales volume resulted from continued
market growth and market share gains.

Gross profit for the year ended April 30, 1996 increased 28.5% to $20.9
million from $16.3 million for the comparable period in 1995. Gross profit as a
percentage of net sales decreased to 16.6% from 17.2%. This decrease in gross
profit margin resulted primarily from increased sales of completed recovery
vehicles. Gross profit margin on wrecker unit sales excluding truck chassis
sales was 24.6% for the year ended April 30, 1996, compared to 23.9% in the
comparable 1995 period.

Selling expense for fiscal 1996 increased 16.0% to $5.7 million from $4.9
million for the comparable period of 1995. The increase in selling expense was
due primarily to higher commission expenses resulting from increased sales.
General and administrative expense for the year ended April 30, 1996 increased
10.6% to $3.0 million from $2.7 million for 1995. This increase was primarily
the result of increased expenses associated with the higher volume of sales and
the Company's recent acquisitions. Overall, operating expenses as a percentage
of net sales decreased to 6.9% in the 1996 fiscal year from 8.0% in the 1995
period. Interest income increased due to the investment of the cash generated
from the January 1996 stock offering.

An extraordinary gain of $288,000 (net of income taxes of $175,000) was
recognized in the year ended April 30, 1995 as the result of the early repayment
of certain debt obligations. The carrying amount of the debt included accrued
interest which was forgiven in a previous debt restructuring but which was being
amortized prospectively over the term of the debt agreement since the date of
its forgiveness. Upon early repayment of the underlying debt, the remaining
balance of the unamortized interest was recognized as an extraordinary gain. See
Note 4 of Notes to Consolidated Financial Statements.

The effective rate of the provision for income taxes was 37.2% in the year
ended April 30, 1996 and 37.6% for the comparable 1995 period.

8
<PAGE>
YEAR ENDED APRIL 30, 1995 COMPARED TO TWELVE MONTHS ENDED APRIL 30, 1994

Net sales for the year ended April 30, 1995 increased 63.5% to $94.7 million
from $57.9 million for the comparable period in 1994. The increase in net sales
was primarily the result of higher unit sales volume in all of the Company's
product lines and an increase in units sold complete with the truck chassis
included. Sales of Company-purchased truck chassis included in net sales were
$26.0 million and $10.1 million for the year ended April 30, 1995 and the twelve
months ended April 30, 1994, respectively. The growth in unit sales volume
resulted from continued market growth and market share gains. In addition, funds
provided by the Company's initial public offering allowed the Company to
increase inventory in order to accelerate production which in turn enabled the
Company to better meet demand.

Gross profit for the year ended April 30, 1995 increased 44.4% to $16.3
million from $11.3 million for the comparable period in 1994. Gross profit as a
percentage of net sales decreased to 17.2% from 19.4%. This decrease in gross
profit margin resulted primarily from increased sales of completed recovery
vehicles. Gross profit margin on wrecker unit sales excluding truck chassis
sales was 23.9% for the year ended April 30, 1995, compared to 23.7% in the
comparable 1994 period.

Selling expense for fiscal 1995 increased 22.1% to $4.9 million from $4.0
million for the comparable period of 1994. The increase in selling expense was
due primarily to higher commission expenses resulting from increased sales.
General and administrative expense for the year ended April 30, 1995 decreased
17.9% to $2.7 million from $3.2 million for 1994. This decrease was primarily
the result of expenses associated with the settlement of obligations under a
pre-reorganization incentive equity participation plan for certain management
employees which were included in general and administrative expense in 1994 and
were not applicable in fiscal 1995. General and administrative expense was
otherwise unchanged. Overall, operating expenses as a percentage of net sales
decreased to 8.0% in the 1995 fiscal year from 12.6% in the 1994 period.

The effective rate of the provision for income taxes was 37.6% in the year
ended April 30, 1995 and 30.8% for the comparable 1994 period because there was
no income tax provision in the first three months of the 1994 period due to the
utilization of previously unrecognized deferred tax benefits (primarily tax loss
carryforwards).

LIQUIDITY AND CAPITAL RESOURCES

The Company's primary capital requirements are for working capital, debt
service and capital expenditures. The Company has financed its operations and
growth from internally generated funds and debt financing and, since August
1994, in part from the proceeds from its initial public offering and its
subsequent public offering completed in January 1996. The net proceeds of the
initial public offering of approximately $23.3 million were used to repay
long-term debt, redeem cumulative preferred stock of a wholly owned subsidiary,
increase working capital, provide funds for capital expenditures and other
general corporate purposes.

Cash used in operating activities was $0.3 million for the year ended April
30, 1996 as compared to $3.7 million used in operations for the comparable
period of 1995. The increase in cash from operations was primarily the result of
increases in profitability, the timing of inventory receipts and increases in
other non-cash expenses offset in part by the timing of cash disbursements.

9
<PAGE>
Cash used in investing activities was $9.2 million for the year ended April
30, 1996 compared to $2.1 million for the year ended April 30, 1995. The cash
used in investing activities was primarily for the purchases of Jige Lohr and
Boniface Engineering and for capital expenditures, including plant expansions
and equipment purchases in fiscal 1996 and in the comparable period in 1995.

Cash provided by financing activities was $31.0 million for the year ended
April 30, 1996 compared to $7.8 million for the comparable period in 1995. On
January 31, 1996, the Company completed a public offering of its Common Stock
which resulted in net proceeds after underwriting discount and offering expenses
of $30.2 million. The net proceeds are to be used to repay debt, including the
debt incurred in the acquisition of Jige Lohr, for working capital, for capital
expenditures, for potential future strategic acquisitions and for other general
corporate purposes.

The Company has a $25 million unsecured revolving credit facility with
NationsBank of Tennessee, N.A. (the "Credit Facility"). Borrowings under the
Credit Facility bear interest at a rate equal to the 30-day LIBOR plus 1.4%. At
April 30, 1996, there were no borrowings outstanding under the Credit Facility.
The Credit Facility imposes restrictions on the Company with respect to the
maintenance of certain financial ratios and specified tangible net worth, the
incurrence of indebtedness, the sale of assets, mergers, capital expenditures
and the payment of dividends. In January 1996, the Company purchased all of the
outstanding capital stock of Jige Lohr for a price of approximately $2.9
million, including acquisition costs and the assumption of approximately $1.8
million of certain debt obligations. The Company drew upon its Credit Facility
to fund the acquisition. The Company anticipates it will incur costs of
approximately $2.0 million for certain capital expenditures and working capital
requirements at Jige Lohr. Jige Lohr has a secured revolving credit facility in
the approximate amount of $250,000, of which $100,000 was outstanding at April
30, 1996. In April 1996, the Company purchased all of the outstanding capital
stock of Boniface Engineering Limited for a combination of cash, common stock
and certain earn-out rights.

The Company has recently expanded its facilities in Hermitage, Pennsylvania
and Ooltewah, Tennessee. Capital expenditures remaining for these expansions and
additional equipment are expected to be approximately $3.0 million. The Company
purchased its formerly-leased facilities in Hermitage, Pennsylvania for
approximately $2.1 million in February 1996. Excluding the capital commitments
set forth above, the Company has no other pending material commitments. The
Company believes that cash on hand, cash flows from operations and unused
borrowing capacity under the Credit Facility will be sufficient to fund its
operating needs, capital expenditures and debt service requirements for fiscal
1997. Management continually evaluates potential strategic acquisitions.
Although the Company believes that its financial resources will enable it to
consider potential acquisitions, additional debt or equity financing may be
necessary. No assurance in this regard can be given, however, since future cash
flows and the availability of financing will depend on a number of factors,
including prevailing economic conditions and financial, business and other
factors beyond the Company's control.

RECENT ACCOUNTING PRONOUNCEMENTS

In March 1995, the Financial Accounting Standards Board issued Statement No.
121 (SFAS 121) on accounting for the impairment of long-lived assets, certain
identifiable intangibles, and goodwill related to assets to be held and used.
The Company adopted SFAS 121 effective May 1, 1996. The adoption of SFAS 121 did
not have a significant impact on the Company's financial position or results of
operations.

In November 1995, the Financial Accounting Standards Board issued Statement
No. 123 (SFAS 123) on accounting for stock-based compensation. While SFAS 123
does not require a change in the present accounting for stock-based
compensation, it does require certain audited pro forma disclosures. The Company
adopted the disclosure requirements of SFAS 123 effective May 1, 1996. The
Company does not intend to change its present accounting for stock-based
compensation and has not yet determined the effect of the required pro forma
disclosures.

10
<PAGE>
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The response to this item is included in Part IV, Item 14 of this Report.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE

Not applicable.

PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

The information contained under the heading "PROPOSAL 1: ELECTION OF
DIRECTORS" in the definitive Proxy Statement used in connection with the
solicitation of proxies for the Registrant's Annual Meeting of Shareholders to
be held August 30, 1996, filed with the Commission, is hereby incorporated
herein by reference. Pursuant to Instruction 3 to Paragraph (b) of Item 401 of
Regulation S-K, information relating to the executive officers of the Registrant
is included in Item 1 of this Report.

ITEM 11. EXECUTIVE COMPENSATION

The information contained under the heading "EXECUTIVE COMPENSATION" in the
definitive Proxy Statement used in connection with the solicitation of proxies
for the Registrant's Annual Meeting of Shareholders to be held August 30, 1996,
filed with the Commission, is hereby incorporated herein by reference. In no
event shall the information contained in the Proxy Statement under the headings
"Compensation Committee Report on Executive Compensation" and "Performance
Graph" be deemed incorporated herein by such reference.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The information contained under the heading "SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT" in the definitive Proxy Statement used in
connection with the solicitation of proxies for the Registrant's Annual Meeting
of Shareholders to be held August 30, 1996, filed with the Commission, is hereby
incorporated herein by reference.

For purposes of determining the aggregate market value of the Registrant's
voting stock held by nonaffiliates, shares held by all current directors and
executive officers of the Registrant have been excluded. The exclusion of such
shares is not intended to, and shall not, constitute a determination as to which
persons or entities may be "affiliates" of the Registrant as defined by the
Securities and Exchange Commission.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The information contained under the heading "CERTAIN RELATIONSHIPS AND
RELATED TRANSACTIONS" in the definitive Proxy Statement used in connection with
the solicitation of proxies for the Registrant's Annual Meeting of Shareholders
to be held August 30, 1996, filed with the Commission, is hereby incorporated
herein by reference.

11
<PAGE>
PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULE AND REPORTS ON FORM 8-K

(a) The following documents are filed as part of this Report:

1. FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
PAGE NUMBER
DESCRIPTION IN REPORT
- ---------------------------------------------------------------------------------------------------- -----------------
<S> <C>
Report of Independent Public Accountants............................................................ F-1
Consolidated Balance Sheets as of April 30, 1996 and 1995........................................... F-2
Consolidated Statements of Income for the years ended April 30, 1996 and 1995, and the nine months
ended April 30, 1994............................................................................... F-3
Consolidated Statements of Stockholders' Equity (Deficit) for the years ended April 30, 1996 and
1995, and the nine months ended April 30, 1994..................................................... F-4
Consolidated Statements of Cash Flows for the years ended April 30, 1996 and 1995, and the nine
months ended April 30, 1994........................................................................ F-5
Notes to Consolidated Financial Statements.......................................................... F-6
</TABLE>

2. FINANCIAL STATEMENT SCHEDULE

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:

All schedules, except as 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:

<TABLE>
<CAPTION>
INCORPORATED
BY
REFERENCE TO
REGISTRATION EXHIBIT
OR FORM OF NUMBER IN
DESCRIPTION FILE NUMBER REPORT DATE OF REPORT REPORT
------------------------------------------------ -------------- ------------- ------------------ ----------
<S> <C> <C> <C> <C> <C>
3.1 Charter of the Registrant 33-79430 S-1 August 1994 3.1
3.2 Bylaws of the Registrant 33-79430 S-1 August 1994 3.2
10.1 Settlement Letter dated April 27, 1994 between 33-79430 S-1 August 1994 10.7
Miller Group, Inc. and Jeffrey S. Badgley,
Thomas L. Cox, Marvin J. Griffin, Frank
Madonia, J. Vincent Mish, H. Patrick Mullen, L.
Stanley Neely and Daniel N. Sebastian (the
"Management Group")
10.5 Participants Agreement dated as of April 30, 33-79430 S-1 August 1994 10.11
1994 between the Registrant, Century Holdings,
Inc., Century Wrecker Corporation, William G.
Miller and certain former shareholders of
Miller Group, Inc.
</TABLE>

12
<PAGE>
<TABLE>
<CAPTION>
INCORPORATED
BY
REFERENCE TO
REGISTRATION EXHIBIT
OR FORM OF NUMBER IN
DESCRIPTION FILE NUMBER REPORT DATE OF REPORT REPORT
------------------------------------------------ -------------- ------------- ------------------ ----------
<S> <C> <C> <C> <C> <C>
10.20 Technology Transfer Agreement dated March 21, 33-79430 S-1 August 1994 10.26
1991 between Miller Group, Inc., Verducci, Inc.
and Jack Verducci
10.21 Form of Noncompetition Agreement between the 33-79430 S-1 August 1994 10.28
Registrant and certain officers of the
Registrant
10.22 Form of Nonexclusive Distributor Agreement 33-79430 S-1 August 1994 10.31
10.23 Loan Agreement dated as of June 28, 1994 among 33-79430 S-1 August 1994 10.35
NationsBank of Tennessee, N.A., the Registrant
and certain subsidiaries of the Registrant
10.24 $15 million Revolving Line of Credit Note dated 33-79430 S-1 August 1994 10.36
as of June 28, 1994 from the Registrant to
NationsBank of Tennessee, N.A.
10.25 Form of Guaranty Agreement among NationsBank of 33-79430 S-1 August 1994 10.37
Tennessee, N.A., and certain subsidiaries of
the Registrant dated as of June 28, 1994
10.26 Negative Pledge Agreement dated as of June 28, 33-79430 S-1 August 1994 10.38
1994 among NationsBank of Tennessee, N.A., the
Registrant and certain subsidiaries of the
Registrant
10.27 Miller Industries, Inc. Stock Option and 33-79430 S-1 August 1994 10.1
Incentive Plan**
10.28 Form of Incentive Stock Option Agreement** 33-79430 S-1 August 1994 10.2
10.29 Miller Industries, Inc. Cash Bonus Plan** 33-79430 S-1 August 1994 10.3
10.30 Miller Industries, Inc. Non-Employee Director 33-79430 S-1 August 1994 10.4
Stock Option Plan**
10.31 Form of Director Stock Option Agreement** 33-79430 S-1 August 1994 10.5
10.32 Form of Amended and Restated Settlement and 33-79430 S-1 August 1994 10.6
Restriction Agreement dated as of April 27,
1994 between Miller Group, Inc., Century
Holdings, Inc. and the Management Group
10.33 Employment Agreement dated October 14, 1993 33-79430 S-1 August 1994 10.29
between Century Wrecker Corporation and Jeffrey
I. Badgley
10.35 First Amendment to Employment Agreement between 33-79430 S-1 August 1994 10.33
Century Wrecker Corporation and Jeffrey I.
Badgley**
</TABLE>

13
<PAGE>
<TABLE>
<CAPTION>
INCORPORATED
BY
REFERENCE TO
REGISTRATION EXHIBIT
OR FORM OF NUMBER IN
DESCRIPTION FILE NUMBER REPORT DATE OF REPORT REPORT
------------------------------------------------ -------------- ------------- ------------------ ----------
<S> <C> <C> <C> <C> <C>
10.37 Form of Employment Agreement between Registrant -- Form 10-K April 30, 1995 10.37
and each of Messrs. Madonia and Mish**
10.38 First Amendment to Miller Industries, Inc. -- Form 10-K April 30, 1995 10.38
Non-Employee Director Stock Option Plan**
10.39 Second Amendment to Miller Industries, Inc. *
Non-Employee Director Stock Option Plan**
10.40 Second Amendment to Miller Industries, Inc. *
Stock Option and Incentive Plan**
10.41 Stock Purchase Agreement dated November 1, 1995 33-99888 S-1 December 1995 10.1
between Jean and Monique Georges, S.A. Lohr and
Miller Industries International, Inc.
10.42 Renewal and Modification of Revolving Line of 33-99888 S-1 December 1995 10.33
Credit Note dated December 29, 1995
10.43 Third Amended Loan Agreement and Amendment to 33-99888 S-1 December 1995 10.34
Guaranty Agreement Among NationsBank of
Tennessee, N.A., the Registrant and certain
subsidiaries of Registrant dated December 29,
1995
10.44 Guaranty Agreement by and between Miller 33-99888 S-1 December 1995 10.35
Industries International, Inc. and NationsBank
of Tennessee, N.A. dated December 29, 1995
22 Subsidiaries of the Registrant *
23 Consent of Arthur Andersen LLP *
24 Power of Attorney (see signature page) *
27 Financial Data Schedule *
</TABLE>

- ------------------------
* Filed herewith.
** Management contract or compensatory plan or arrangement

(b) No reports on Form 8-K were filed by the Registrant during the fourth
quarter of the Registrant's 1996 fiscal year.

(d) The Registrant hereby files as financial statement schedules to this
Report the financial statement schedule set forth in Item 14(a)2 hereof.

14
<PAGE>
MILLER INDUSTRIES, INC. AND SUBSIDIARIES
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Report of Independent Public Accountants.................................. F-1

Consolidated Balance Sheets as of April 30, 1996 and 1995................. F-2

Consolidated Statements of Income for the Years Ended April 30, 1996 and
1995, and the Nine Months Ended April 30, 1994........................... F-3

Consolidated Statements of Stockholders' Equity (Deficit) for the Years
Ended April 30, 1996 and 1995, and the Nine Months Ended April 30,
1994..................................................................... F-4

Consolidated Statements of Cash Flows for the Years Ended April 30, 1996
and 1995, and the Nine Months Ended April 30, 1994....................... F-5

Notes to Consolidated Financial Statements................................ F-6
</TABLE>

15
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Board of Directors and Stockholders of
Miller Industries, Inc.:

We have audited the accompanying consolidated balance sheets of MILLER
INDUSTRIES, INC. (a Tennessee corporation) AND SUBSIDIARIES (the "Company") as
of April 30, 1996 and 1995 and the related consolidated statements of income,
stockholders' equity (deficit), and cash flows for the years ended April 30,
1996 and 1995, and the nine months ended April 30, 1994. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the 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 financial statements referred to above present fairly,
in all material respects, the financial position of Miller Industries, Inc. and
subsidiaries as of April 30, 1996 and 1995 and the results of their operations
and their cash flows for the years ended April 30, 1996 and 1995, and the nine
months ended April 30, 1994, in conformity with generally accepted accounting
principles.

As discussed in Note 9 to the consolidated financial statements, effective
August 1, 1993 the Company changed its method of accounting for income taxes.

ARTHUR ANDERSEN LLP

Chattanooga, Tennessee
June 21, 1996

F-1
<PAGE>
MILLER INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
APRIL 30, 1996 AND 1995
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
ASSETS

<TABLE>
<CAPTION>
1996 1995
--------- ---------
<S> <C> <C>
CURRENT ASSETS:
Cash and temporary investments........................................................... $ 24,144 $ 2,561
Accounts receivable, net of allowance for doubtful accounts of $966 in 1996 and $518 in
1995.................................................................................... 28,183 17,778
Inventories.............................................................................. 24,992 17,409
Deferred income tax benefit.............................................................. 1,162 1,295
Prepaid expenses and other............................................................... 982 315
--------- ---------
Total current assets................................................................. 79,463 39,358
PROPERTY, PLANT, AND EQUIPMENT, net........................................................ 13,666 5,497
GOODWILL, net.............................................................................. 5,071 3,536
PATENTS, TRADEMARKS, AND OTHER PURCHASED PRODUCT RIGHTS, net............................... 926 984
OTHER ASSETS............................................................................... 197 0
--------- ---------
$ 99,323 $ 49,375
--------- ---------
--------- ---------

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
Current portion of long-term debt........................................................ $ 651 $ 650
Lines of credit.......................................................................... 100 1,000
Accounts payable......................................................................... 21,280 16,619
Accrued liabilities and other............................................................ 7,755 4,171
--------- ---------
Total current liabilities............................................................ 29,786 22,440
--------- ---------
LONG-TERM OBLIGATIONS, less current portion................................................ 3,713 97
--------- ---------
DEFERRED INCOME TAXES...................................................................... 701 369
--------- ---------

COMMITMENTS AND CONTINGENCIES (Notes 7 and 8)

STOCKHOLDERS' EQUITY:
Common stock, $.01 par value; 20,000,000 shares authorized; 11,571,336 and 9,735,938
shares issued and outstanding in 1996 and 1995, respectively............................ 115 65
Additional paid-in capital............................................................... 54,821 23,993
Retained earnings........................................................................ 10,204 2,411
Cumulative translation adjustment........................................................ (17) 0
--------- ---------
Total stockholders' equity........................................................... 65,123 26,469
--------- ---------
$ 99,323 $ 49,375
--------- ---------
--------- ---------
</TABLE>

The accompanying notes are an integral part of these consolidated balance
sheets.

F-2
<PAGE>
MILLER INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
NINE MONTHS
YEARS ENDED APRIL 30, ENDED
-------------------------- APRIL 30,
1996 1995 1994
------------- ----------- -------------
<S> <C> <C> <C>
NET SALES............................................................. $ 125,706 $ 94,722 $ 45,873
COST OF SALES......................................................... 104,820 78,463 37,164
------------- ----------- -------------
GROSS PROFIT.......................................................... 20,886 16,259 8,709

OPERATING EXPENSES:
Selling............................................................. 5,709 4,922 3,039
General and administrative.......................................... 2,953 2,671 2,400
------------- ----------- -------------
INCOME FROM OPERATIONS................................................ 12,224 8,666 3,270
INTEREST INCOME (EXPENSE), net........................................ 303 (79) (99)
OTHER INCOME (EXPENSE), net........................................... (118) 74 51
------------- ----------- -------------
INCOME BEFORE INCOME TAXES, EXTRAORDINARY GAIN AND CUMULATIVE EFFECT
OF ACCOUNTING CHANGE................................................. 12,409 8,661 3,222
PROVISION FOR INCOME TAXES............................................ (4,616) (3,255) (1,200)
------------- ----------- -------------
INCOME BEFORE EXTRAORDINARY GAIN AND CUMULATIVE EFFECT OF ACCOUNTING
CHANGE............................................................... 7,793 5,406 2,022
EXTRAORDINARY GAIN ON DEBT RETIREMENT (LESS APPLICABLE INCOME TAXES OF
$175)................................................................ 0 288 0
CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING FOR INCOME TAXES............ 0 0 379
------------- ----------- -------------
NET INCOME............................................................ 7,793 5,694 2,401
PREFERRED STOCK DIVIDENDS............................................. 0 0 (38)
------------- ----------- -------------
NET INCOME AVAILABLE FOR COMMON STOCKHOLDERS.......................... $ 7,793 $ 5,694 $ 2,363
------------- ----------- -------------
------------- ----------- -------------

NET INCOME PER COMMON SHARE:
Before extraordinary gain and cumulative effect of accounting
change............................................................. $ 0.74 $ 0.61 $ 0.32
Extraordinary gain on debt retirement............................... 0.00 0.03 0.00
Cumulative effect of change in accounting for income taxes.......... 0.00 0.00 0.06
------------- ----------- -------------
$ 0.74 $ 0.64 $ 0.38
------------- ----------- -------------
------------- ----------- -------------
WEIGHTED AVERAGE NUMBER OF COMMON AND COMMON EQUIVALENT SHARES
OUTSTANDING.......................................................... 10,500,917 8,943,260 6,157,500
------------- ----------- -------------
------------- ----------- -------------
</TABLE>

The accompanying notes are an integral part of these consolidated statements.

F-3
<PAGE>
MILLER INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
RETAINED
ADDITIONAL EARNINGS CUMULATIVE
COMMON PAID-IN (ACCUMULATED TRANSLATION
STOCK CAPITAL DEFICIT) ADJUSTMENT TOTAL
----------- ----------- ------------ ------------- ---------
<S> <C> <C> <C> <C> <C>
BALANCE, July 31, 1993.............................. $ 100 $ 480 $ (2,046) $ 0 $ (1,466)
Issuance of management shares by MGI.............. 0 574 0 0 574
Effect of the Reorganization (Note 1):
Exchange of common stock........................ (59) 59 0 0 0
Issuance of Reorganization Note................. 0 0 (3,600) 0 (3,600)
Accrued dividends on preferred stock, net......... 0 0 (38) 0 (38)
Net income........................................ 0 0 2,401 0 2,401
----- ----------- ------------ --- ---------
BALANCE, April 30, 1994............................. 41 1,113 (3,283) 0 (2,129)
Issuance of 3,578,438 common shares through a
public offering.................................. 24 22,186 0 0 22,210
Unamortized restructuring credit from redemption
of preferred stock............................... 0 694 0 0 694
Net income........................................ 0 0 5,694 0 5,694
----- ----------- ------------ --- ---------
BALANCE, April 30, 1995............................. 65 23,993 2,411 0 26,469
Issuance of 1,800,000 common shares through a
public offering.................................. 12 30,166 0 0 30,178
Issuance of 26,834 shares in purchase of Boniface
Engineering...................................... 0 615 0 0 615
Exercise of stock options......................... 0 37 0 0 37
Other stock issuance.............................. 0 48 0 0 48
Three-for-two stock split......................... 38 (38) 0 0 0
Net income........................................ 0 0 7,793 0 7,793
Net translation adjustments....................... 0 0 0 (17) (17)
----- ----------- ------------ --- ---------
BALANCE, April 30, 1996............................. $ 115 $ 54,821 $ 10,204 $ (17) $ 65,123
----- ----------- ------------ --- ---------
----- ----------- ------------ --- ---------
</TABLE>

The accompanying notes are an integral part of these consolidated statements.

F-4
<PAGE>
MILLER INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(DOLLARS IN THOUSANDS)

<TABLE>
<CAPTION>
NINE MONTHS
YEARS ENDED APRIL 30, ENDED
--------------------- APRIL 30,
1996 1995 1994
--------- ---------- -------------
<S> <C> <C> <C>
OPERATING ACTIVITIES:
Net income........................................................................... $ 7,793 $ 5,694 $ 2,401
--------- ---------- -------------
Adjustments to reconcile net income to net cash provided by (used in) operating
activities:
Depreciation and amortization...................................................... 877 474 303
Gain on sales and disposals of property, plant, and equipment...................... (29) 0 0
Extraordinary gain................................................................. 0 (288) 0
Cumulative effect of accounting change............................................. 0 0 (379)
Deferred income taxes.............................................................. 479 (58) (112)
Changes in operating assets and liabilities, net of effects of restructuring (Note
4):
Accounts receivable.............................................................. (8,154) (8,115) (3,842)
Inventories...................................................................... (3,375) (8,874) (2,530)
Prepaid expenses and other....................................................... (354) (125) (67)
Accounts payable................................................................. 1,991 8,318 3,797
Accrued liabilities.............................................................. 475 1,045 716
Income taxes payable to MGI (Note 9)............................................. 0 (1,736) 1,115
--------- ---------- -------------
Total adjustments.............................................................. (8,090) (9,359) (999)
--------- ---------- -------------
Net cash provided by (used in) operating activities............................ (297) (3,665) 1,402
--------- ---------- -------------

INVESTING ACTIVITIES:
Purchases of property, plant, and equipment.......................................... (5,603) (1,930) (480)
Proceeds from sales of property, plant, and equipment................................ 111 0 0
Proceeds from notes receivable....................................................... 0 39 35
Purchases of subsidiaries, net of cash acquired...................................... (3,567) 0 0
Other................................................................................ (91) (165) (22)
--------- ---------- -------------
Net cash used in investing activities.......................................... (9,150) (2,056) (467)
--------- ---------- -------------

FINANCING ACTIVITIES:
Proceeds from issuance of common stock............................................... 30,178 22,210 0
Proceeds from exercise of stock options.............................................. 37 0 0
Net (payments) borrowings under line of credit....................................... (1,001) 1,000 0
Proceeds from long-term debt......................................................... 2,545 0 80
Payments on long-term debt........................................................... (763) (11,752) (798)
Redemption of preferred stock........................................................ 0 (3,400) 0
Settlement of obligation to affiliate................................................ 0 (236) 0
Other................................................................................ 36 0 0
--------- ---------- -------------
Net cash provided by (used in) financing activities............................ 31,032 7,822 (718)
--------- ---------- -------------
NET INCREASE IN CASH................................................................... 21,585 2,101 217
EFFECT OF EXCHANGE RATE CHANGES ON CASH................................................ (2) 0 0
CASH, beginning of period.............................................................. 2,561 460 243
--------- ---------- -------------
CASH, end of period.................................................................... $ 24,144 $ 2,561 $ 460
--------- ---------- -------------
--------- ---------- -------------

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash payments for interest........................................................... $ 80 $ 137 $ 288
--------- ---------- -------------
--------- ---------- -------------
Cash payments for income taxes....................................................... $ 4,383 $ 2,817 $ 45
--------- ---------- -------------
--------- ---------- -------------
New equipment under capital lease financing.......................................... $ 51 $ 0 $ 0
--------- ---------- -------------
--------- ---------- -------------
</TABLE>

The accompanying notes are an integral part of these consolidated statements.

F-5
<PAGE>
MILLER INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. ORGANIZATION AND NATURE OF OPERATIONS
Miller Industries, Inc. (the "Company") was formed on April 28, 1994 in
connection with a reorganization effective April 30, 1994 (the
"Reorganization"). In the Reorganization all 100 shares of the no par value
common stock of Century Holdings, Inc. ("Century Holdings"), a manufacturer of
towing and recovery equipment, were transferred to the Company by Miller Group,
Inc. ("MGI") in exchange for 6,157,500 shares of the Company's $.01 par value
common stock and a $3,600,000 promissory note (the "Reorganization Note"). The
assets received by MGI in the Reorganization were distributed as follows: (1)
6,000,000 shares of common stock to an officer, (2) 157,500 shares of common
stock to certain members of management, and (3) the Reorganization Note to
certain former minority stockholders of MGI. The Reorganization required the
complete liquidation and dissolution of MGI. The issuance of the Reorganization
Note to the former minority stockholders of MGI was in exchange for their 17.5%
common stock ownership interest in MGI. The issuance of the Reorganization Note
resulted in a $3,600,000 charge to accumulated deficit. As a result of the
Reorganization, Century Holdings became a wholly-owned subsidiary of the
Company. The Reorganization was accounted for in a manner similar to a pooling
of interests.

NATURE OF OPERATIONS

The Company is a manufacturer of vehicle towing and recovery equipment which
is installed on truck chassis. The principal markets for the towing and recovery
equipment are independent distributors of towing and recovery equipment located
primarily throughout the United States, Canada, Europe, and the Pacific Rim. The
Company's products are marketed under the brand names of Century, Challenger,
Holmes, Champion, Eagle, Jige, and Boniface. The truck chassis are either
purchased by the Company or provided by customers. Sales of Company-purchased
chassis represented approximately 35%, 27%, and 19% of net sales in 1996, 1995,
and 1994, respectively.

PUBLIC OFFERINGS OF COMMON STOCK

On August 9, 1994, the Company completed an initial public offering of
3,578,438 shares of its common stock at $7.00 per share (the "Offering"). The
net proceeds of the Offering were used to repay long-term debt, redeem the
cumulative preferred stock of a wholly-owned subsidiary, increase working
capital, provide funds for capital additions, and for other general corporate
purposes (Notes 4 and 9).

On January 31, 1996, the Company completed a public offering of 1,800,000
shares of previously unissued common stock at $18.33 per share. The net proceeds
were used to repay debt, including the debt incurred in the acquisition of S.A.
Jige Lohr Wreckers (Note 3), increase working capital, provide funds for capital
additions, and for other general corporate purposes.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

FISCAL YEAR-END

In connection with the Reorganization, the Company adopted an April 30
year-end. The nine months ended April 30, 1994 will be referred to herein as
"1994".

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 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.

F-6
<PAGE>
MILLER INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
CONSOLIDATION

The accompanying consolidated financial statements include the accounts of
Miller Industries, Inc. and its wholly-owned subsidiaries. All significant
intercompany transactions and balances have been eliminated in consolidation.

CASH AND TEMPORARY INVESTMENTS

Cash and temporary investments include all cash and cash equivalent
investments with original maturities of three months or less, primarily
consisting of repurchase agreements.

INVENTORIES

Inventory costs include materials, labor, and factory overhead. Inventories
are stated at the lower of cost or market, determined on a first-in, first-out
basis. Inventories at April 30, 1996 and 1995 consisted of the following
categories (in thousands):

<TABLE>
<CAPTION>
1996 1995
--------- ---------
<S> <C> <C>
Chassis................................................................ $ 5,225 $ 5,466
Raw materials.......................................................... 10,028 5,427
Work in process........................................................ 5,772 3,290
Finished goods......................................................... 3,967 3,226
--------- ---------
$ 24,992 $ 17,409
--------- ---------
--------- ---------
</TABLE>

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 purposes. Estimated useful lives range from 20 to 30 years for
buildings and improvements and 5 to 10 years for machinery and equipment, and
furniture, fixtures, and vehicles. Expenditures for maintenance and repairs are
charged to expense as incurred.

The property, plant, and equipment balances at April 30, 1996 and 1995
consisted of the following (in thousands):

<TABLE>
<CAPTION>
1996 1995
--------- ---------
<S> <C> <C>
Land................................................................... $ 1,156 $ 307
Buildings and improvements............................................. 9,350 3,708
Machinery and equipment................................................ 2,989 1,657
Furniture, fixtures, and vehicles...................................... 1,465 403
Construction in progress............................................... 781 787
--------- ---------
15,741 6,862
Less accumulated depreciation.......................................... (2,075) (1,365)
--------- ---------
Property, plant, and equipment, net.................................. $ 13,666 $ 5,497
--------- ---------
--------- ---------
</TABLE>

In March 1995, the Financial Accounting Standards Board issued Statement No.
121 ("SFAS 121") on accounting for the impairment of long-lived assets, certain
identifiable intangibles, and goodwill related to assets to be held and used.
The Company adopted SFAS 121 effective May 1, 1996. The adoption of SFAS 121 did
not have a significant impact on the Company's consolidated financial position
or results of operations.

F-7
<PAGE>
MILLER INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
NET INCOME PER COMMON SHARE

Net income per common share is calculated using the weighted average number
of common and common equivalent shares outstanding. Net income per common share
for 1994 gives retroactive effect to the 6,157,500 shares issued in connection
with the Reorganization.

In April 1996, the Company effected a three-for-two common stock split. The
Company's par value of $.01 per share remained unchanged. As a result, $38,000
was transferred from additional paid-in capital to common stock. All historical
share and per share amounts have been restated to reflect retroactively the
common stock split.

GOODWILL

Goodwill is being amortized on a straight-line basis over 40 years. The
Company continually evaluates whether events and circumstances have occurred
which would indicate that the goodwill is not recoverable. When factors indicate
that goodwill should be evaluated for possible impairment, the Company uses an
estimate of undiscounted net income in measuring whether the goodwill is
recoverable. Accumulated amortization of goodwill was $578,000 and $477,000 at
April 30, 1996 and 1995, respectively. Amortization expense for 1996, 1995, and
1994 was $101,000, $100,000, and $75,000, respectively.

PATENTS, TRADEMARKS, AND OTHER PURCHASED PRODUCT RIGHTS

The cost of acquired patents, trademarks, and other purchased product rights
are capitalized and amortized using the straight-line method over 20 years.
Total accumulated amortization of these assets at April 30, 1996 and 1995 was
$208,000 and $151,000, respectively. Amortization expense for 1996, 1995, and
1994 was $57,000, $50,000, and $40,000, respectively.

ACCRUED LIABILITIES AND OTHER

Accrued liabilities and other consisted of the following at April 30, 1996
and 1995 (in thousands):

<TABLE>
<CAPTION>
1996 1995
--------- ---------
<S> <C> <C>
Accrued wages, commissions, bonuses, and benefits........................ $ 1,770 $ 951
Accrued income taxes..................................................... 1,978 2,010
Other.................................................................... 4,007 1,210
--------- ---------
$ 7,755 $ 4,171
--------- ---------
--------- ---------
</TABLE>

PRODUCT WARRANTY

The Company provides a one-year limited product and service warranty on its
products. The Company provides for the estimated cost of this warranty at the
time of sale. Warranty expense for 1996, 1995, and 1994 was $526,000, $484,000,
and $361,000, respectively.

CREDIT RISK

The Company performs on-going credit evaluations of the independent
distributors and other customers and maintains an allowance for doubtful
accounts at a level which management believes is sufficient to cover potential
credit losses.

REVENUE RECOGNITION

Sales are recorded by the Company when equipment is shipped to independent
distributors or other customers. The Company recognizes revenue on chassis it
purchases at the time of shipment to the customer.

F-8
<PAGE>
MILLER INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

3. ACQUISITIONS OF JIGE LOHR WRECKERS AND BONIFACE ENGINEERING
In January 1996, the Company purchased all of the outstanding capital stock
of S.A. Jige Lohr Wreckers ("Jige Lohr"), a French manufacturer of towing and
recovery equipment, for a total cash purchase price of approximately $2,950,000.

In April 1996, the Company purchased all of the outstanding capital stock of
Boniface Engineering ("Boniface"), an English manufacturer of towing and
recovery equipment, at a total purchase price of $1,691,000. The purchase price
consisted of $1,076,000 in cash and $615,000 (26,834 shares) of newly issued
common stock.

The acquisitions of Jige Lohr and Boniface have been accounted for under the
purchase method of accounting. Accordingly, the operating results of Jige Lohr
and Boniface have been included in the Company's consolidated results of
operations from the date of acquisition. The excess of the aggregate purchase
price over the fair value of net assets acquired of $1,641,000 has been
recognized as a component of goodwill in the accompanying consolidated balance
sheet at April 30, 1996. The impact of the acquisitions on consolidated pro
forma net income and earnings per share, as if the acquisitions had taken place
at the beginning of fiscal 1995, was not significant for 1996 and 1995.

4. DEBT RETIREMENT AND PREFERRED STOCK REDEMPTION
Upon consummation of the initial public offering, the Company retired
certain debt obligations, including previously restructured long-term debt,
which resulted in a gain of $288,000. Such amount is reflected as an
extraordinary gain, net of applicable income tax of $175,000, in the
accompanying consolidated statement of income for 1995.

Additionally, upon consummation of the initial public offering, the Company
redeemed its cumulative redeemable preferred stock for $3,400,000 resulting in a
gain of $694,000 which is reflected as a credit to additional paid-in capital in
1995.

5. LONG-TERM OBLIGATIONS AND LINES OF CREDIT
Long-term obligations consisted of the following at April 30, 1996 and 1995
(in thousands):

<TABLE>
<CAPTION>
1996 1995
--------- ---------
<S> <C> <C>
Mortgage notes payable, interest at rates from 3.0% to 6.88%, payable in monthly
installments, maturing 2003 to 2011................................................. $ 2,510 $ 0
Notes payable to banks, interest at rates from 7.23% to 9.75%, payable in monthly
installments, maturing 1997 to 2005................................................. 841 0
Mortgage note payable, interest at LIBOR plus 2.5%, payable in monthly installments
through 2002........................................................................ 139 0
Other notes payable.................................................................. 874 747
--------- ---------
4,364 747
Less current portion................................................................. (651) (650)
--------- ---------
$ 3,713 $ 97
--------- ---------
--------- ---------
</TABLE>

F-9
<PAGE>
MILLER INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

5. LONG-TERM OBLIGATIONS AND LINES OF CREDIT (CONTINUED)
The aggregate future maturities of long-term obligations (excluding future
cash outflows for interest) outstanding at April 30, 1996 are as follows (in
thousands):

<TABLE>
<CAPTION>
YEAR ENDING
APRIL 30,
------------
<S> <C>
1997...................................................................... $ 651
1998...................................................................... 561
1999...................................................................... 434
2000...................................................................... 428
2001...................................................................... 414
Thereafter................................................................ 1,876
---------
$ 4,364
---------
---------
</TABLE>

Certain equipment and manufacturing facilities are pledged as collateral
under the mortgage notes payable. Notes payable to banks are secured by life
insurance policies on a member of management.

LINES OF CREDIT

The Company maintains an unsecured revolving credit facility of $25,000,000
and a secured credit facility of $248,000 (the "Revolvers") for working capital
and other general corporate purposes. Borrowings under the Revolvers bear
interest at rates ranging from LIBOR plus 1.5%, (6.22% at April 30, 1996) to
Paris interbank rate plus 1.25% (8.25% at April 30, 1996) and includes a
commitment fee on the daily unused balance. The weighted average interest rate
for borrowings outstanding under the Revolvers during 1996 was approximately
7.09%. Interest is payable monthly and the Revolvers are renewable on an annual
basis. Total borrowings outstanding under the Revolvers were $100,000 at April
30, 1996.

The terms of the Revolvers require the Company, among other things, to
maintain minimum amounts of working capital, net worth, ratio of net worth to
liabilities, debt coverage and quarterly profits, to limit the amount of capital
expenditures, and to limit the payment of any dividends in the event of
noncompliance with the terms of the Revolvers.

6. STOCK OPTIONS
The Company maintains a stock option plan under which incentive stock
options, as well as nonqualified options and other stock-based awards may be
granted to officers, employees, and directors. A total of 1,500,000 common
shares have been reserved for issuance under the plan. No options may be
exercisable for a year from the date of grant, and the Compensation Committee of
the Board of Directors may determine when and in what amounts options thereafter
become exercisable. The Company also adopted a stock option plan providing for
the granting of options to purchase shares of common stock to each non-employee
director. A total of 300,000 common shares have been reserved

F-10
<PAGE>
MILLER INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

6. STOCK OPTIONS (CONTINUED)
for issuance under the plan. Stock options issued under the plans provide for
the purchase of common stock at the fair market value of the stock at the date
of grant. The following summarizes the stock option transactions under the stock
option plans for 1996 and 1995:

<TABLE>
<CAPTION>
OPTION PRICE
SHARES PER SHARE
--------- -----------------
<S> <C> <C>
Options outstanding, April 30, 1994............................ 0 $ 0
Granted........................................................ 627,874 7.00
Canceled....................................................... (4,387) 7.00
--------- -----------------
Options outstanding, April 30, 1995............................ 623,487 7.00
Granted........................................................ 314,304 9.67 - 22.92
Exercised...................................................... (5,868) 7.00
Canceled....................................................... (6,513) 7.00 - 11.33
--------- -----------------
Options outstanding, April 30, 1996............................ 925,410 $7.00 - $22.92
--------- -----------------
--------- -----------------
</TABLE>

The stock options outstanding at April 30, 1996 vest in annual increments
through April 2000.

7. LEASE COMMITMENTS
The Company has entered into various operating leases for buildings and
office equipment. Rental expense under these leases was $327,000, $396,000, and
$212,000 for 1996, 1995, and 1994, respectively.

At April 30, 1996, future minimum lease payments under noncancelable
operating leases were not significant.

8. LITIGATION
The Company is party to certain legal proceedings incidental to its
business. The ultimate disposition of such matters presently cannot be
determined but will not, in the opinion of management, based in part on the
advice of legal counsel, have a material adverse effect on the Company's
financial position or results of operations.

In January 1996, the Company won a judgment for approximately $1.1 million
plus prejudgment interest and enhanced damages in a patent infringement suit in
the United States District Court for the Northern District of Iowa at Sioux
City, Iowa. Certain defendants filed for protection under Chapter 11 of the U.S.
Bankruptcy Code. The Company is currently in negotiations with the defendants to
reach a plan to pay the judgment. No amounts have been recorded related to the
damages awarded to the Company in this matter pending its ultimate resolution.

9. INCOME TAXES
Effective August 1, 1993, the Company adopted the provisions of Statement of
Financial Accounting Standards No. 109, "Accounting for Income Taxes" ("SFAS
109") using the cumulative catch-up method. SFAS 109 requires the recognition of
deferred tax assets and liabilities for the expected future tax consequences of
events that have been included in the financial statements or tax returns. Under
this method, deferred tax assets and liabilities are determined based on the
differences between the financial and tax bases using currently enacted tax
rates in effect for the year in which the differences are expected to reverse.
The cumulative effect of adopting SFAS 109 resulted in a net credit to income of
$379,000 in 1994.

Prior to the Reorganization, Century Holdings had filed a consolidated
federal tax return with MGI and, as agreed, current and deferred federal income
taxes were allocated to Century Holdings as if Century Holdings had filed a
separate tax return. Since the acquisition of Century Holdings by MGI,

F-11
<PAGE>
MILLER INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

9. INCOME TAXES (CONTINUED)
no current taxes have been paid to MGI by Century Holdings. In connection with
the Reorganization, Century Holdings issued the $1,736,000 note payable to MGI
which represented the cumulative amount of Century Holdings' allocated current
federal income taxes which would have been payable on a separate company basis.
The note payable to MGI was repaid in 1995 with a portion of the proceeds from
the initial public offering.

The provision for income taxes consisted of the following for 1996, 1995 and
1994 (in thousands):

<TABLE>
<CAPTION>
1996 1995 1994
--------- --------- ---------
<S> <C> <C> <C>
Current:
Federal....................................................... $ 3,499 $ 2,780 $ 1,115
State......................................................... 514 533 197
Foreign....................................................... 124 0 0
--------- --------- ---------
4,137 3,313 1,312
--------- --------- ---------
Deferred:
Federal....................................................... 483 (58) (112)
Foreign....................................................... (4) 0 0
--------- --------- ---------
479 (58) (112)
--------- --------- ---------
$ 4,616 $ 3,255 $ 1,200
--------- --------- ---------
--------- --------- ---------
</TABLE>

The principal differences between the federal statutory tax rate and the
consolidated effective tax rate for 1996, 1995, and 1994 were as follows:

<TABLE>
<CAPTION>
1996 1995 1994
---------- ----------- -----------
<S> <C> <C> <C>
Federal statutory tax rate....................................... 34.0% 34.0% 34.0%
State taxes, net of federal tax benefit.......................... 4.0 4.0 4.0
Other............................................................ (0.8) (0.4) (0.8)
--- --- ---
Effective tax rate............................................... 37.2% 37.6% 37.2%
--- --- ---
--- --- ---
</TABLE>

Deferred income tax assets and liabilities for 1996 and 1995 reflect the
impact of temporary differences between the amounts of assets and liabilities
for financial reporting and income tax reporting purposes. Temporary differences
and carryforwards which give rise to deferred tax assets and liabilities at
April 30, 1996 and 1995 are as follows (in thousands):

<TABLE>
<CAPTION>
1996 1995
--------- ---------
<S> <C> <C>
Deferred tax assets:
Reserves-receivables and inventory...................................... $ 210 $ 316
Accruals and reserves................................................... 956 641
Inventory............................................................... 20 338
Other................................................................... 32 0
--------- ---------
Gross deferred tax assets........................................... 1,218 1,295
--------- ---------
Deferred tax liabilities:
Property, plant, and equipment.......................................... 701 369
Other................................................................... 7 0
--------- ---------
Gross deferred tax liabilities...................................... 708 369
--------- ---------
Net deferred tax asset................................................ $ 510 $ 926
--------- ---------
--------- ---------
</TABLE>

F-12
<PAGE>
MILLER INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

9. INCOME TAXES (CONTINUED)
In management's opinion, the net deferred tax asset will be realized through
the recognition of taxable income in future periods.

10. 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.

11. 401(K) PLAN
During 1996, the Company established a contributory retirement plan (the
"401(k) Plan") for all full-time employees with at least one year of service.
The 401(k) 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 401(k) Plan provides that each participant may contribute up to 15% of
his or her salary. The Company matches 25% of the first 4% of participant
contributions. Matching contributions vest over a period of five years. All
funds contributed by the participants are immediately vested. Under the terms of
the 401(k) Plan, the Company may also make discretionary profit sharing
contributions. Profit sharing contributions are allocated among participants
based on their annual compensation. Each participant has the right to direct the
investment of his or her funds among certain named investment options.

Upon death, disability, retirement, or the termination of employment,
participants may elect to receive periodic or lump sum payments. Additionally,
amounts may be withdrawn in cases of demonstrated hardship. Company
contributions to the 401(k) Plan were not significant in 1996.

12. SEGMENT INFORMATION
The Company's operations involve a single industry segment - the design,
manufacture, and sale of towing and recovery equipment. Substantially all
revenues result from the sale of towing and recovery equipment, either with or
without a chassis, and the related parts and accessories. All significant
intercompany revenues and expenses are eliminated in computing net sales and
operating income. Prior to fiscal 1996, the Company operated exclusively in the
United States. A summary of the Company's operations by geographic area for
fiscal 1996 is presented below (in thousands):

<TABLE>
<CAPTION>
UNITED
STATES EUROPE CONSOLIDATED
------------ --------- ------------
<S> <C> <C> <C>
Net sales...................................................... $ 121,291 $ 4,415 $ 125,706
Income from operations......................................... 11,748 476 12,224
Identifiable assets............................................ 86,548 12,775 99,323
</TABLE>

No single customer accounted for more than 10% of net sales during 1996,
1995, and 1994.

13. FAIR VALUE OF FINANCIAL INSTRUMENTS
Statements of Financial Accounting Standards Nos. 107 and 119 require
disclosure about fair value of all financial instruments. 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 value of long-term
obligations is a reasonable estimate of its fair value based on the rates
available for obligations with similar terms and maturities.

F-13
<PAGE>
MILLER INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

14. QUARTERLY FINANCIAL INFORMATION (UNAUDITED)
The following is a summary of the unaudited quarterly financial information
for the years ended April 30, 1996 and 1995 (in thousands, except per share
data):

<TABLE>
<CAPTION>
INCOME PER
COMMON SHARE
INCOME BEFORE BEFORE
GROSS EXTRAORDINARY EXTRAORDINARY NET NET INCOME PER
NET SALES PROFIT ITEMS ITEMS INCOME COMMON SHARE
----------- --------- ------------- --------------- --------- ---------------
<S> <C> <C> <C> <C> <C> <C>
1996
Quarter ended:
July 31..................... $ 28,236 $ 4,221 $ 1,499 $ 0.15 $ 1,499 $ 0.15
October 31.................. 29,611 4,734 1,706 0.17 1,706 0.17
January 31.................. 31,434 5,330 2,016 0.20 2,016 0.20
April 30.................... 36,425 6,601 2,572 0.22 2,572 0.22
----------- --------- ------------- ----- --------- -----
Total..................... $ 125,706 $ 20,886 $ 7,793 $ 0.74 $ 7,793 $ 0.74
----------- --------- ------------- ----- --------- -----
----------- --------- ------------- ----- --------- -----
1995
Quarter ended:
July 31..................... $ 19,152 $ 3,336 $ 962 $ 0.16 $ 962 $ 0.16
October 31.................. 22,277 3,953 1,238 0.13 1,526 0.16
January 31.................. 24,840 4,368 1,501 0.15 1,501 0.15
April 30.................... 28,453 4,602 1,705 0.17 1,705 0.17
----------- --------- ------------- ----- --------- -----
Total..................... $ 94,722 $ 16,259 $ 5,406 $ 0.61 $ 5,694 $ 0.64
----------- --------- ------------- ----- --------- -----
----------- --------- ------------- ----- --------- -----
</TABLE>

15. RECLASSIFICATIONS
Certain reclassifications have been made to prior years' financial
information to conform with the 1996 presentation.

F-14
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Directors and Stockholders of
Miller Industries, Inc.:

We have audited in accordance with generally accepted auditing standards,
the consolidated financial statements of Miller Industries, Inc. and
subsidiaries included in this Form 10-K and have issued our report thereon dated
June 21, 1996. Our audit was made for the purpose of forming an opinion on the
basic financial statements taken as a whole. The schedule listed in the index is
the responsibility of the Company's management and is presented for purposes of
complying with the Securities and Exchange Commission's rules and is not part of
the basic financial statements. This schedule has been subjected to the auditing
procedures applied in the audit of the basic financial statements and, in our
opinion, fairly states in all material respects the financial data required to
be set forth therein in relation to the basic financial statements taken as a
whole.

ARTHUR ANDERSEN LLP

Chattanooga, Tennessee
June 21, 1996

S-1
<PAGE>
MILLER INDUSTRIES, INC. AND SUBSIDIARIES

SCHEDULE II -- VALUATION AND QUALIFYING ACCOUNTS
(IN THOUSANDS)

<TABLE>
<CAPTION>
BALANCE AT BALANCE AT
BEGINNING CHARGED TO CHARGED TO ACCOUNTS END OF
OF PERIOD EXPENSES OTHER WRITTEN OFF PERIOD
----------- ------------- ------------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Nine months ended April 30, 1994:
Deduction from asset accounts:
Allowance for doubtful accounts................... $ 188 $ 303 $ 0 $ (69) $ 422

Year ended April 30, 1995:
Deduction from asset accounts:
Allowance for doubtful accounts................... 422 114 0 (18) 518

Year ended April 30, 1996:
Deduction from asset accounts:
Allowance for doubtful accounts................... 518 76 413(a) (41) 966
</TABLE>

- ------------------------
(a) The other addition to the allowance for doubtful accounts results from the
acquisitions of S.A. Jige Lohr Wreckers and Boniface Engineering during
fiscal 1996 which were accounted for under the purchase method of
accounting.

S-2
<PAGE>
SIGNATURES

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 29th day of
July, 1996.

MILLER INDUSTRIES, INC.

By: /s/ WILLIAM G. MILLER

-----------------------------------
William G. Miller
CHAIRMAN AND CHIEF EXECUTIVE
OFFICER

POWER OF ATTORNEY

Know all men by these presents, that each person whose signature appears
below constitutes and appoints William G. Miller and J. Vincent Mish, and either
of them, as attorneys-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 attorneys-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 29th day of July, 1996.

<TABLE>
<C> <S>
SIGNATURE TITLE
- ------------------------------------------------------ ---------------------------------------------------------

/s/ WILLIAM G. MILLER
------------------------------------------- Chairman of the Board and Chief Executive Officer
William G. Miller

/s/ J. VINCENT MISH
------------------------------------------- Vice President, Treasurer and Chief Financial Officer
J. Vincent Mish (Principal Financial and Accounting Officer)

/s/ JEFFREY I. BADGLEY
------------------------------------------- President, Chief Operating Officer and Director
Jeffrey I. Badgley

/s/ A. RUSSELL CHANDLER, III
------------------------------------------- Director
A. Russell Chandler, III

/s/ PAUL E. DRACK
------------------------------------------- Director
Paul E. Drack

/s/ STEPHEN A. FURBACHER
------------------------------------------- Director
Stephen A. Furbacher

/s/ H. PATRICK MULLEN
------------------------------------------- Director
H. Patrick Mullen

/s/ RICHARD H. ROBERTS
------------------------------------------- Director
Richard H. Roberts
</TABLE>

II-1
<PAGE>
EXHIBIT INDEX

<PAGE>
EXHIBIT A

SECOND AMENDMENT TO
MILLER INDUSTRIES, INC.
NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN

The Miller Industries, Inc. Non-Employee Director Stock Option Plan is
hereby amended as follows, subject to the approval of the Miller Industries,
Inc. shareholders at the 1996 Annual Meeting of Shareholders:

1. By deleting the first sentence of Section 5(a) in its entirety and
substituting in its place the following:

"Options to purchase up to 400,000 shares of Common Stock may be
granted hereunder."

2. By inserting at the end of Section 8 the following sentence:

"The amendment to the Director Plan shall become effective as of the
first meeting of shareholders following the amendment approved by the
directors on June 28, 1996."

<PAGE>
EXHIBIT B

SECOND AMENDMENT TO
MILLER INDUSTRIES, INC.
STOCK OPTION AND INCENTIVE PLAN

Section 3 of the Miller Industries, Inc. Stock Option and Incentive Plan is
hereby amended, effective as of June 28, 1996, subject to the approval of the
Miller Industries, Inc. shareholders at the 1996 Annual Meeting of Shareholders,
by deleting the first sentence in its entirety and substituting therefore the
following:

"The total number of shares of Stock reserved and available for
distribution under the Plan shall be three million (3,000,000)
shares; provided, however, that at no time may the Committee make
grants hereunder with respect to shares of Stock subject to
outstanding grants under the Plan in excess of an amount equal to
12.5% of the aggregate number of shares of Stock issued and
outstanding at the time of, and after giving effect to, the grant."

<PAGE>
EXHIBIT 22

SUBSIDIARIES OF THE REGISTRANT

<TABLE>
<CAPTION>
NAME STATE OF ORGANIZATION
- -------------------------------------- ----------------------------------------
<S> <C>
Century Holdings, Inc. Tennessee
Champion Carrier Corporation Delaware
Miller Industries Towing Equipment Delaware
Inc.
Century Wrecker (Canada) Ltd. Ontario, Canada
Miller Industries International, Inc. Tennessee
Boniface Engineering Limited England and Wales
Jige International, S.A. France
Miller Financial Services Group, Inc. Tennessee
</TABLE>

<PAGE>
EXHIBIT 23

CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS

As independent public accountants, we hereby consent to the incorporation of
our reports included in this Form 10-K, into the Company's previously filed
Registration Statement on Form S-8 (File No. 33-82282).

ARTHUR ANDERSEN LLP

Chattanooga, Tennessee
July 25, 1996

<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> APR-30-1996
<PERIOD-START> MAY-01-1995
<PERIOD-END> APR-30-1996
<CASH> 24,144
<SECURITIES> 0
<RECEIVABLES> 29,149
<ALLOWANCES> 966
<INVENTORY> 24,992
<CURRENT-ASSETS> 79,463
<PP&E> 15,741
<DEPRECIATION> 2,075
<TOTAL-ASSETS> 99,323
<CURRENT-LIABILITIES> 29,784
<BONDS> 3,713
0
0
<COMMON> 77
<OTHER-SE> 65,046
<TOTAL-LIABILITY-AND-EQUITY> 99,323
<SALES> 125,706
<TOTAL-REVENUES> 125,706
<CGS> 104,820
<TOTAL-COSTS> 113,482
<OTHER-EXPENSES> 118
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (303)
<INCOME-PRETAX> 12,409
<INCOME-TAX> 4,616
<INCOME-CONTINUING> 7,793
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 7,793
<EPS-PRIMARY> 0.74
<EPS-DILUTED> 0.73

</TABLE>