File No. 333-______
As filed with the Securities and Exchange Commission on August 29, 1997.
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
MILLER INDUSTRIES, INC.
(Exact name of issuer as specified in its charter)
Tennessee 3713 62-1566286
- -------------------------------------------------------------------------
(State or other (Primary Standard (I.R.S. Employer
jurisdiction of Industrial Identification Number)
incorporation or Classification Code
organization) Number)
3220 Pointe Parkway, Suite 100, Norcross, Georgia 30092
(770) 446-6778
-------------------------------------------------------------
(Address, including zip code, and telephone number, including
area code, of issuer's principal executive offices)
Frank Madonia
Vice President, Secretary and General Counsel
MILLER INDUSTRIES, INC.
3220 Pointe Parkway, Suite 100, Norcross, Georgia 30092
(770) 446-6778
---------------------------------------------------------
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
Copies to:
David A. Stockton, Esquire
KILPATRICK STOCKTON LLP
1100 Peachtree Street, Atlanta, Georgia 30309-4530
Telephone: (404) 815-6500
==========================
Approximate date of commencement of proposed sale to the
public: From time to time after the effective date of this
Registration Statement.
If the securities being registered on this Form are being
offered in connection with the formation of a holding company and
there is compliance with General Instruction G, check the
following box. / /
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
==================================================================================================================================
| | Proposed | Proposed Maximum |
| Amount to be | Maximum Offering | Aggregate Offering| Amount of
Title of Each Class of Securities to be Registered | Registered | Price per Unit<F1> | Price<F1> |Registration Fee
- -----------------------------------------------------|----------------|---------------------|--------------------|----------------
<S> | <C> | <C> | <C> | <C>
Common Stock, par value $.01 per share | 5,000,000 | $14.46875 | $72,343,750 | $21,922.35
| shares | | |
==================================================================================================================================
</TABLE>
[FN]
<F1> Estimated solely for the purpose of determining the
registration fee pursuant to Rule 457(c). Calculated on the basis of
$14.46875 per share, the average of the high and low sale prices of the
Company's Common Stock reported on the New York Stock Exchange on August
28, 1997.
THE COMPANY HEREBY AMENDS THIS REGISTRATION STATEMENT ON
SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE
DATE UNTIL THE COMPANY SHALL FILE A FURTHER AMENDMENT WHICH
SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL
THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
<PAGE>
Information contained herein is subject to completion or
amendment. A registration statement relating to these securities
has been filed with the Securities and Exchange Commission.
These securities may not be sold nor may offers to buy be
accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell
or the solicitation of an offer to buy nor shall there be any
sale of these securities in any state in which such offer,
solicitation or sale would be unlawful prior to registration or
qualification under the securities laws of any such state.
<PAGE>
PROSPECTUS SUBJECT TO COMPLETION,
AUGUST 29,1997
5,000,000 Shares
MILLER INDUSTRIES, INC.
Common Stock
This prospectus relates to 5,000,000 shares (the "Shares")
of Common Stock, par value $.01 per share (the "Common Stock"),
of Miller Industries, Inc., a Tennessee corporation ("Miller" or
the "Company"), which may be issued from time to time in the
future by the Company on the completion of acquisitions of
assets, businesses and securities, or on the payment of dividends
on or conversion of shares of preferred stock or the conversion
of or payment of interest on convertible notes issued in
connection with such acquisitions of other businesses or
properties. No period of time has been fixed within which the
Shares may be offered or sold.
The consideration for acquisitions may consist of shares of
Common Stock, cash, assumptions of liabilities or a combination
thereof as determined by negotiations between the Company's
representatives and the owners or controlling persons of the
business or properties to be acquired. Factors taken into
account in acquisitions include the quality and reputation of the
management, potential earning power, cash flow and growth
potential of the businesses or properties to be acquired, market
value of the Common Stock and other relevant factors. In
addition, the Company may lease property from and enter into
employment, management, consultant and noncompetition agreements
with former owners and key executive personnel of the businesses
to be acquired. The Company's management anticipates that the
Shares issued in any acquisition will be valued at a price
reasonably related to the market price of the Common Stock,
reported as of one or more times during the period beginning on
the date the terms of the acquisition are agreed upon and ending
on the date the Shares are issued and delivered.
This Prospectus may only be used in connection with the
issuance of Common Stock pursuant to acquisitions of businesses
or properties in business combination transactions that would be
exempt from registration but for the possibility of integration
with other transactions. If the issuance of Common Stock in
connection with an acquisition would not be exempt from
registration even if integration is not taken into account, then
offerees of the Common Stock in such an acquisition will be
furnished with copies of this Prospectus, as amended by a
supplement to this Prospectus (a "Prospectus Supplement") or a
post-effective amendment (a "Post-Effective Amendment") to the
Registration Statement on Form S-4 of which this Prospectus is a
part. This Prospectus will be furnished to security holders of
the businesses or properties to be acquired.
If an acquisition has a material financial effect upon the
Company, a Current Report on Form 8-K will be filed subsequent to
the acquisition containing financial and other information about
the acquisition that would be material to subsequent acquirors of
the Shares offered hereby, including pro forma financial
information for the Company and historical financial information
<PAGE>
for the company being acquired. A Current Report on Form 8-K
will also be filed when an acquisition does not have a per se
material effect upon the Company, but if aggregated with other
acquisitions since the date of the Company's most recent audited
financial statements, would have such a material effect as set
forth in Rule 3-05 under Regulation S-X promulgated by the
Securities and Exchange Commission (the "Commission").
All expenses of this offering will be paid by the Company.
No underwriting discounts or commissions will be paid in
connection with the issuance of Shares by the Company in business
combination transactions, although finder's fees may be paid with
respect to specific acquisitions. Any person receiving a
finder's fee may be deemed to be an underwriter with the meaning
of Section 2(11) of the Securities Act of 1933, as amended (the
"Securities Act").
This Prospectus may not be used in connection with reoffers
and resales by persons who receive Shares covered by this
Prospectus (the "Selling Shareholders") and who may be deemed to
be underwriters within the meaning of Section 2(11) of the
Securities Act unless accompanied by a Prospectus Supplement or
Post-Effective Amendment, if required, naming such persons as
Selling Shareholders and providing other information. Resales or
reoffers by Selling Shareholders may only be made pursuant to
Rule 145(d) under the Securities Act or an exemption from
registration under the Securities Act.
The Common Stock is traded on the New York Stock Exchange
("NYSE") under the symbol "MLR." On August 28, 1997, the closing
price of the Common Stock, as reported in the NYSE consolidated
reporting system, was $14.625.
See "Risk Factors" beginning on page 4 for a discussion of
certain factors that should be considered by prospective
investors.
_______________
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION NOR HAS THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
_______________
The date of this Prospectus is September __, 1997.
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<PAGE>
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO
MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED OR
INCORPORATED BY REFERENCE IN THIS PROSPECTUS AND, IF GIVEN OR
MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON
AS HAVING BEEN AUTHORIZED BY THE COMPANY. THIS PROSPECTUS DOES
NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER
TO BUY ANY SECURITIES OTHER THAN THE SECURITIES DESCRIBED IN THIS
PROSPECTUS OR AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO
BUY SUCH SECURITIES IN ANY CIRCUMSTANCES IN WHICH SUCH OFFER OR
SOLICITATION IS UNLAWFUL. NEITHER THE DELIVERY OF THIS
PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY
CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THE INFORMATION
CONTAINED HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE
OF SUCH INFORMATION.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of
the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and in accordance therewith files reports and other
information with the Securities and Exchange Commission (the
"Commission"). Reports, proxy statements and other information
filed by the Company with the Commission pursuant to the
information requirements of the Exchange Act may be inspected and
copied at the public reference facilities maintained by the
Commission at Room 1024, 450 Fifth Street, N.W., Washington, D.C.
20549, and at the following Regional Offices of the Commission:
New York Regional Office, 7 World Trade Center, 13th Floor, New
York, New York 10007; and Chicago Regional Office, 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of
such material can also be obtained from the Public Reference
Section of the Commission at Room 1024, 450 Fifth Street, N.W.,
Washington, D.C. 20549, at prescribed rates. The Commission
maintains a Web site that contains reports, proxy and information
statements and other information regarding registrants that file
electronically with the Commission. The address of that Web site
is http://www.sec.gov.
The Company's Common Stock is listed on the NYSE. All
reports, proxy statements and other information filed by the
Company with the NYSE may be inspected at the offices of the NYSE
at 20 Broad Street, New York, New York 10005.
The Company has filed with the Commission a Registration
Statement on Form S-4 (together with any amendments thereto, the
"Registration Statement") under the Securities Act of 1933, as
amended (the "Securities Act"), with respect to the Common Stock
offered hereby. This Prospectus does not contain all of the
information set forth in the Registration Statement and the
exhibits thereto, certain parts of which are omitted in
accordance with the rules and regulations of the Commission. For
further information, reference is made to the Registration
Statement and the exhibits filed as a part thereof. Statements
contained in this Prospectus regarding the contents of any
contract, agreement or other document referred to are not
necessarily complete, and in each instance reference is made to
the copy of such contract, agreement or document filed as an
exhibit to the Registration Statement, each such statement being
qualified in all respects by such reference. The Registration
Statement, including the exhibits thereto, may be inspected
without charge at the principal office of the Commission, 450
Fifth Street, N.W., Washington, D.C. 20549, and copies of all or
any part thereof may be obtained from such office upon payment of
the prescribed fees.
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FORWARD-LOOKING STATEMENTS
The Company may from time to time make written or oral
forward-looking statements, including statements contained in the
Company's filings with the Commission and its reports to
shareholders. This Prospectus contains and incorporates by
reference certain statements, other than those concerning
historical information, that should be considered forward-looking
and subject to various risks and uncertainties. Such forward-
looking statements are made based on management's belief as well
as assumptions made by, and information currently available to,
management pursuant to "safe harbor" provisions of the Private
Securities Corporation Reform Act of 1995. The Company's actual
results may differ materially from the results anticipated in
these forward-looking statements due to, among other things,
factors set forth in this Prospectus under the heading "Risk
Factors," and in particular, the risks associated with
acquisitions, including, without limitation, the risks that
acquisitions do not close and the cost or difficulties related to
the integration of the acquired businesses. The Company cautions
that such factors are not exclusive. The Company does not
undertake to update any forward-looking statement that may be
made from time to time by, or on behalf of, the Company.
RISK FACTORS
THE BUSINESS, FINANCIAL CONDITION, RESULTS OF OPERATIONS AND
FUTURE PROSPECTS OF THE COMPANY, AND THE PREVAILING MARKET PRICE
AND PERFORMANCE OF THE COMPANY'S COMMON STOCK, MAY BE ADVERSELY
AFFECTED BY A NUMBER OF FACTORS, INCLUDING THE MATTERS DISCUSSED
BELOW.
UNCERTAINTIES IN INTEGRATING OPERATIONS AND ACHIEVING COST
SAVINGS. Many of the companies that the Company has recently
acquired and that the Company plans to acquire are large
enterprises with operations in different markets. The success of
any business combination is in part dependent on management's
ability following the transaction to integrate operations,
systems and procedures and thereby obtain business efficiencies,
economies of scale and related cost savings. The challenges
posed to the Company's management may be particularly significant
because integrating the recently acquired companies must be
addressed contemporaneously. There can be no assurance that
future consolidated results will improve as a result of cost
savings and efficiencies from any such acquisitions or proposed
acquisitions, or as to the timing or extent to which cost savings
and efficiencies will be achieved.
RISKS ASSOCIATED WITH ACQUISITION STRATEGY. The Company
has an aggressive acquisition strategy that has involved, and is
expected to continue to involve, the acquisition of a significant
number of additional companies. As a result, the Company's
future success is dependent, in part, upon its ability to
identify, finance and acquire attractive businesses and then to
successfully integrate and/or manage such acquired businesses.
Acquisitions involve special risks, including risks associated
with unanticipated problems, liabilities and contingencies,
diversion of management attention and possible adverse effects on
earnings resulting from increased goodwill amortization,
increased interest costs, the issuance of additional securities
and difficulties related to the integration of the acquired
business. Although the Company believes that it can identify and
consummate the acquisitions of a sufficient number of businesses
to successfully implement its growth strategies, there can be no
assurance that such will be the case. Further, there can be no
assurance that future acquisitions will not have an adverse
effect upon the Company's operating results, particularly during
periods in which the operations of acquired businesses are being
integrated into the Company's operations.
RISKS OF FOREIGN MARKETS. The Company's growth strategy
includes the expansion of its operations in foreign markets. In
January 1996 the Company acquired Jige Lohr, a French
manufacturer of wreckers and car carriers, and in April 1996 the
Company acquired Boniface, a British manufacturer of towing and
recovery equipment. Prior to these acquisitions, the Company had
limited experience with sales and manufacturing operations
outside North America. There is no assurance that the Company
will be able to successfully integrate and expand its foreign
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<PAGE>
operations. Furthermore, there is no assurance that the Company
will be able to successfully expand sales outside of North
America or compete in markets in which it is unfamiliar with
cultural and business practices. The Company's foreign operations
are subject to various political, economic and other
uncertainties, including risks of restrictive taxation policies,
foreign exchange restrictions and currency translations, changing
political conditions and governmental regulations.
RISKS OF ENTERING NEW LINES OF BUSINESS. The Company's
growth strategy includes vertically integrating within the towing
and recovery industry through a combination of acquisitions and
internal growth. Implementation of its growth strategy has
resulted in the Company's entry into several new lines of
business. Historically, the Company's expertise has been in the
manufacture of towing equipment and the Company had no prior
operating experience in the lines of business it recently
entered. During fiscal 1997, the Company entered three new lines
of business through the acquisition of towing and recovery
equipment distributors and towing service companies, and the
establishment of the Company's Financial Services Group. The
Company's operation of these businesses will be subject to all of
the risks inherent in the establishment of a new business
enterprise. Such acquisitions present the additional risk that
newly-acquired businesses could be viewed as being in competition
with other customers of the Company. Although the new businesses
are closely related to the Company's towing equipment
manufacturing business, there can be no assurance that the
Company will be able to successfully operate these new
businesses.
CYCLICAL NATURE OF INDUSTRY AND GENERAL ECONOMIC CONDITIONS.
The towing and recovery industry is cyclical in nature and has
historically been affected by high interest rates and economic
conditions in general. Accordingly, a downturn in the economy
could have a material adverse effect on the Company's operations.
The industry is also influenced by consumer confidence and
general credit availability.
FLUCTUATIONS IN PRICE AND SUPPLY OF MATERIALS AND COMPONENT
PARTS. The Company is dependent upon outside suppliers for its
raw material needs and other purchased component parts and,
therefore, is subject to price increases and delays in receiving
supplies of such materials and component parts. There can be no
assurance that the Company will be able to pass any price
increase on to its customers. Although the Company believes that
sources of its materials and component parts will continue to be
adequate to meet its requirements and that alternative sources
are available, events beyond the Company's control could have an
adverse effect on the cost or availability of such materials and
component parts. Additionally, demand for the Company's products
could be negatively affected by the unavailability of truck
chassis, which are manufactured by third parties and are
typically purchased separately by the Company's distributors or
by towing operators and are sometimes supplied by the Company.
COMPETITION. The towing and recovery equipment
manufacturing industry is highly competitive. Competition for
sales exists at both the distributor and towing-operator levels
and is based primarily on product quality and innovation,
reputation, technology, customer service, product availability
and price. In addition, sales of the Company's products are
affected by the market for used towing and recovery equipment.
Certain of the Company's competitors may have substantially
greater financial and other resources and may provide more
attractive dealer and retail customer financing alternatives than
the Company. The Company may also face significant competition
from large competitors as it enters new lines of business,
including towing and recovery equipment distribution, financial
services and towing service businesses.
DEPENDENCE ON PROPRIETARY TECHNOLOGY. Historically, the
Company has been able to develop or acquire patented and other
proprietary product innovations which have allowed it to produce
what management believes to be technologically advanced products
relative to most of its competition. Certain of the Company's
patents expire in 2004 at which time the Company may not have a
continuing competitive advantage through proprietary products and
technology. The Company's historical market position has been a
result, in part, of its continuous efforts to develop new
products. The Company's future success and ability to maintain
market share will depend, to an extent, on new product
development.
LABOR AVAILABILITY. The timely production of the Company's
wreckers and car carriers requires an adequate supply of skilled
labor. In addition, the operating costs of each manufacturing and
towing service facility can be adversely affected by high
turnover in skilled positions. Accordingly, the Company's ability
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to increase sales, productivity and net earnings will be limited
to a degree by its ability to employ the skilled laborers
necessary to meet the Company's requirements. There can be no
assurance that the Company will be able to maintain an adequate
skilled labor force necessary to efficiently operate its
facilities.
DEPENDENCE ON KEY MANAGEMENT. The success of the Company is
highly dependent on the continued services of the Company's
management team. The loss of services of one or more key members
of the Company's senior management team could have a material
adverse effect on the Company. Although the Company historically
has been successful in retaining the services of its senior
management, there can be no assurance that the Company will be
able to retain such personnel in the future.
PRODUCT LIABILITY AND INSURANCE. The Company is subject to
various claims, including product liability claims arising in the
ordinary course of business, and may at times be a party to
various legal proceedings that constitute ordinary routine
litigation incidental to the Company's business. The Company
maintains reserves and liability insurance coverage at levels
based upon commercial norms and the Company's historical claims
experience. A successful product liability or other claim
brought against the Company in excess of its insurance coverage
or the inability of the Company to acquire insurance at
commercially reasonable rates could have a material adverse
effect upon the Company's business, operating results and
financial condition.
VOLATILITY OF MARKET PRICE. From time to time, there may be
significant volatility in the market price for the Common Stock.
Quarterly operating results of the Company, changes in earnings
estimated by analysts, changes in general conditions in the
Company's industry or the economy or the financial markets or
other developments affecting the Company could cause the market
price of the Common Stock to fluctuate substantially. In
addition, in recent years the stock market has experienced
significant price and volume fluctuations. This volatility has
had a significant effect on the market prices of securities
issued by many companies for reasons unrelated to their operating
performance.
POSSIBLE ADVERSE EFFECT OF FUTURE SALES OF COMMON STOCK.
The Company has filed a shelf registration statement to register
for sale, from time to time on a continuous basis, an aggregate
of approximately 5.7 million shares of Common Stock, which shares
were issued by the Company as consideration for businesses
acquired by it since August 1996. Future sales of such shares,
or the perception that such sales could occur, could adversely
affect the market price of Common Stock. There can be no
assurance as to when, and how many of, such shares will be sold
and the effect such sales may have on the market price of Common
Stock. In addition, the Company intends to continue to issue
Common Stock in connection with certain of its acquisitions or in
other transactions. Such securities may be subject to resale
restrictions in accordance with the Securities Act and the
regulations promulgated thereunder, as well as resale limitations
imposed by tax laws and regulations or by contractual provisions
negotiated by the Company. As such restrictions lapse,
such securities may be sold to the public. It is contemplated
that any such shares will be issued pursuant to this Prospectus,
as it may be supplemented or amended from time to time, and thus will
no longer be subject to any holding period under Rule 144. In the
event of the issuance and subsequent resale of a substantial
number of shares of Common Stock, or a perception that such sales
could occur, there could be a material adverse effect on the
prevailing market price of Common Stock.
CONTROL BY PRINCIPAL SHAREHOLDER. William G. Miller, the
Chairman and Co-Chief Executive Officer of the Company,
beneficially owns approximately 15% of the outstanding shares of
Common Stock. Accordingly, Mr. Miller has the ability to exert
significant influence over the business affairs of the Company,
including the ability to influence the election of directors and
the result of voting on all matters requiring shareholder
approval.
ANTI-TAKEOVER PROVISIONS OF CHARTER AND BYLAWS; PREFERRED
STOCK. The Company's Charter and Bylaws contain restrictions
that may discourage other persons from attempting to acquire
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<PAGE>
control of the Company, including, without limitation, a Board of
Directors that has staggered terms for its members (although the
shareholders will consider a proposal to amend the Company's
Charter at the August 29, 1997 meeting to eliminate the staggered
board), prohibitions on shareholder action by written consent,
and advance notice requirements respecting amendments to certain
provisions of the Company's Charter and Bylaws. In addition, the
Company's Charter authorizes the issuance of up to 5,000,000
shares of preferred stock. The rights and preferences for any
series of preferred stock may be set by the Board of Directors,
in its sole discretion and without shareholder approval, and the
rights and preferences of any such preferred stock may be
superior to those of Common Stock and thus may adversely affect
the rights of holders of Common Stock.
BUSINESS
GENERAL
Miller Industries, Inc. is the world's largest integrated provider
of vehicle towing and recovery equipment, systems and services and has
executive offices in Atlanta, Georgia and manufacturing operations in
Tennessee, Pennsylvania, Mississippi, France and England. The Company
markets its towing and recovery equipment under the well-recognized
Century(R), Challenger(R), Holmes(R), Champion(R), Eagle(R), Jige(TM),
Boniface(TM) and Vulcan(R) brand names and markets its towing services
under the national brand name of RoadOne(TM).
Since 1990 the Company has developed or acquired several of the most
well-recognized brands in the fragmented towing and recovery equipment
manufacturing industry. The Company's strategy has been to increase its
market share in the industry through a combination of acquisitions and
internal growth. The Company increased its domestic and international
market share as a result of the acquisitions of three well-known brands
during calendar 1996. In January 1996, the Company acquired S.A. Jige
Lohr Wreckers ("Jige Lohr"), a leading European manufacturer of wreckers
and car carriers, and in April 1996, the Company acquired Boniface
Engineering Limited ("Boniface"), a leading manufacturer of large
wreckers in the United Kingdom, thereby establishing itself as the market
leader in Europe. In September 1996, the Company acquired Vulcan
International, Inc., a leading domestic manufacturer of towing equipment.
As a natural extension of its leading market position in
manufacturing and strong brand name recognition, the Company has
broadened its strategy to include vertical integration, with the goal of
becoming the leading worldwide manufacturer, distributor and service
provider in the towing and recovery industry. Since July 1996, the
Company has acquired ten towing equipment distributors, which, together
with its independent distributors, are intended to be part of a North
American distribution network for towing and recovery equipment as well
as other specialty truck equipment and components. Through the First
quarter of fiscal 1998, the Company, through its RoadOne subsidiary, has
acquired 38 towing service companies. These acquisitions are part of the
Company's plan to establish a national towing service network through
owned companies in combination with an extensive group of affiliates.
Also in fiscal 1997, the Company established its Financial Services Group
to provide equipment financing and related services to its distributors
and their customers. The Company intends to continue its expansion into
the towing service and distribution markets in fiscal 1998.
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The Company was incorporated under the laws of the State of
Tennessee in April 1994. The Company's principal executive
offices are located at 3220 Pointe Parkway, Norcross, Georgia
30092, and its telephone number is (770) 446-6778.
ACQUISITIONS
The Company has been pursuing a growth strategy that has involved
acquisitions of a significant number of companies. The Company uses an
internal acquisition team, supplemented as needed by outside advisors,
and its extensive contacts in the towing service industry, to identify,
evaluate, acquire and integrate towing operators and towing equipment
distributors. Acquisition candidates are evaluated based on stringent
criteria in a comprehensive process which includes operational, legal and
financial due diligence reviews. The Company expects to continue to
pursue acquisitions in the towing service and towing equipment
distribution markets and anticipates financing acquisitions with
issuances of Common Stock, cash and/or borrowings under lines of credit.
TOWING SERVICE ACQUISITIONS
During fiscal 1997, the Company acquired 29 towing service companies
in separate transactions, none of which were individually material to the
financial results of the Company. The Company issued an aggregate of
approximately 1.6 million shares of Common Stock and paid approximately
$7.5 million of cash in such transactions which have been accounted for
under the purchase method of accounting, and issued an aggregate of
approximately 2.2 million shares of Common Stock in such transactions
which have been accounted for under the pooling-of-interests method of
accounting. During the first quarter of fiscal 1998, the Company acquired
nine additional towing service companies in separate transactions,
issuing approximately 600,000 shares and paying approximately $3 million
in cash, all of which transactions have been accounted for under the
purchase method of accounting.
At July 31, 1997, the Company had entered into letters of intent to
acquire 20 additional towing service companies in transactions expected
to close over the following twelve weeks. These transactions are subject
to customary conditions, including completion of due diligence
investigations and execution of definitive acquisition agreements, among
others. The Company intends to continue to aggressively pursue additional
purchases of towing service companies.
TOWING EQUIPMENT DISTRIBUTOR ACQUISITIONS
During fiscal 1997, the Company acquired six towing equipment
distributors in separate transactions, none of which were individually
material to the financial results of the Company. The Company issued an
aggregate of approximately 320,000 shares of Common Stock in such
transactions which have been accounted for under the purchase method of
accounting, and issued an aggregate of approximately 370,000 shares of
Common Stock in such transactions which have been accounted for under the
pooling-of-interests method. Subsequent to April 30, 1997, the Company
acquired four additional towing equipment distributors in separate
transactions, issuing approximately 45,000 shares and paying
approximately $865,000 in cash in transactions accounted for under the
purchase method of accounting, and issuing approximately 151,000 shares
of Common Stock in acquisitions accounted for under the pooling-of-
interests method. The Company intends to continue to acquire additional
towing equipment distributors, but is not currently a party to any
agreement to acquire any other distributors.
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TOWING AND RECOVERY EQUIPMENT MANUFACTURING
The Company offers a broad range of towing and recovery equipment
products that meet most customer design, capacity and cost requirements.
The Company manufactures the bodies of wreckers and car carriers, which
are installed on truck chassis manufactured by third parties. Wreckers
generally are used to recover and tow disabled vehicles and other
equipment and range in type from the conventional tow truck to large
recovery vehicles with rotating hydraulic booms and 60-ton lifting
capacities. Car carriers are specialized flat bed hauling vehicles with
hydraulic tilt mechanisms that enable a towing operator to drive or winch
a vehicle onto the bed for transport. Car carriers transport new or
disabled vehicles and other equipment and are particularly effective over
longer distances.
The Company's products are sold primarily through independent
distributors that serve all 50 states, Canada and Mexico, and other
foreign markets including Europe, Japan, Taiwan, Hong Kong, China and the
Middle East. As a result of the acquisitions of Jige Lohr and Boniface,
the Company significantly increased its distribution capabilities in
Europe. While most of the Company's distributor agreements do not contain
exclusivity provisions, management believes that approximately 70% of the
Company's independent distributors sell the Company's products on an
exclusive basis. In addition to selling the Company's products to towing
operators, the distributors provide parts and service. The Company also
has independent sales representatives that exclusively market the
Company's products and provide expertise and sales assistance to
distributors. Management believes the strength of the Company's
distribution network and the breadth of its product offerings are two key
advantages over its competitors.
PRODUCT LINE
The Company manufactures a broad line of wrecker and car carrier
bodies to meet a full range of customer design, capacity and cost
requirements. The products are marketed under the Century, Challenger,
Holmes, Champion, Eagle, Jige, Boniface and Vulcan brand names.
WRECKERS. Wreckers are generally used to recover and tow disabled
vehicles and other equipment and range in type from the conventional tow
truck to large recovery vehicles with 60 ton lifting capacities. Wreckers
are available with specialized features, including underlifts, L-arms and
scoops, which lift disabled vehicles by the tires or front axle to
minimize front end damage to the towed vehicles. Certain heavy duty
wrecker models offer rotating booms, which allow heavy duty wreckers to
recover vehicles from any angle, and proprietary remote control devices
for operating wreckers. In addition, certain light duty wreckers are
equipped with the patented "Eagle Claw" automatic wheellift hookup device
that allows operators to engage a disabled or unattended vehicle without
leaving the cab of the wrecker.
The Company's wreckers range in capacity from 8 to 60 tons, and are
characterized as light duty and heavy duty, with wreckers of 16 ton or
greater capacity being classified as heavy duty. Light duty wreckers are
used to remove vehicles from accident scenes and vehicles illegally
parked, abandoned or disabled, and for general recovery. Heavy duty
wreckers are used in commercial towing and recovery applications
including overturned tractor trailers, buses, motor homes and other
vehicles.
CAR CARRIERS. Car carriers are specialized flat bed hauling vehicles
with hydraulic tilt mechanisms that enable a towing operator to drive or
-9-<PAGE>
winch a vehicle onto the bed for transport. Car carriers are used to
transport new or disabled vehicles and other equipment and are
particularly effective for transporting vehicles or other equipment over
long distances. In addition to transporting vehicles, car carriers may
also be used for other purposes, including transportation of industrial
equipment. In recent years, professional towing operators have added car
carriers to their fleets to complement their towing capabilities.
BRAND NAMES
The Company manufactures and markets its wreckers and car carriers
under eight separate brand names. Although certain of the brands overlap
in terms of features, prices and distributors, each brand has its own
distinctive image and
customer base.
Century(R). The Century brand is the Company's "top-of-the-line"
brand and represents what management believes to be the broadest product
line in the industry. The Century line was started in 1974 and produces
wreckers ranging from the 8 ton light duty to the 60 ton heavy duty
models and car carriers in lengths from 17 1/2 to 26 feet. Management
believes that the Century brand has a reputation as the industry's
leading product innovator.
Vulcan(R). The Company's Vulcan product line, acquired in September
1996, includes a range of premium light and heavy duty wreckers, car
carriers and other towing and recovery equipment. The Vulcan line is
operated as an autonomous subsidiary with its own independent
distribution network.
Challenger(R). The Company's Challenger products compete with the
Century and Vulcan products and constitute a third premium product line.
Challenger products consist of light to heavy duty wreckers with
capacities ranging from 8 to 60 tons, and car carriers with lengths
ranging from 17 1/2 to 26 feet. The Challenger line was started in 1975
and is known for high performance heavy duty wreckers and aesthetic
design.
Holmes(R). The Company's Holmes product line includes mid-priced
wreckers with 8 to 16 ton capacities and car carriers in 17 1/2 to 21
foot lengths. The Holmes wrecker was first produced in 1916. The Holmes
name has been the most well-recognized and leading industry brand both
domestically and internationally through most of this century.
Champion(R). The Champion brand, which was introduced in 1991,
includes car carriers which range in length from 17 1/2 to 21 feet. The
Champion product line, which is generally lower-priced, allows the
Company to offer a full line of car carriers at various competitive price
points. In 1993, the Champion line was expanded to include a line of
economy tow trucks with integrated boom and underlift.
Eagle(R). The Company's Eagle products consist of light duty
wreckers with a patented "Eagle Claw" hook-up system that allows towing
operators to engage a disabled or unattended vehicle without leaving the
cab of the tow truck. The "Eagle Claw" hook-up system, which was patented
in 1984, was originally developed for the repossession market. Since
being acquired, the Company has upgraded its quality and features and
expanded its recovery capability. The Eagle line is now gaining increased
popularity in the broader towing and recovery vehicle market.
Jige(TM). The Company's Jige product line, acquired in January 1996,
is comprised of a broad line of light and heavy duty wreckers and car
carriers marketed primarily in Europe. Jige International is a market
-10-<PAGE>
leader best known for its innovative designs of car carriers and light
wreckers necessary to operate within the narrow confines of European
cities.
Boniface(TM). The Company's Boniface product line, acquired in April
1996, is comprised primarily of heavy duty wreckers. Boniface produces a
wide range of heavy duty wreckers specializing in the long underlift
technology required to tow modern European tour buses.
The Company's Holmes and Century brand names are associated with
four of the major innovations in the industry: the rapid reverse winch,
the tow sling, the hydraulic lifting mechanism, and the underlift with
parallel linkage and L-arms. 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.
MANUFACTURING PROCESS
The Company manufactures wreckers and car carriers at six
manufacturing facilities located in the United States, France and
England. 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.
TOWING AND RECOVERY EQUIPMENT DISTRIBUTION
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
-11-<PAGE>
existing towing capabilities. Management estimates that there are
approximately 30,000 professional towing operators and 80,000 service
station, repair shop and salvage operators comprising the overall towing
and recovery market.
Since July 1996, the Company's distribution group has acquired 10
towing equipment distributors. These distributors are located in
California, Colorado, Florida, Georgia, Illinois, Mississippi and
Missouri and in British Columbia and Ontario, Canada. The Company intends
to continue to acquire additional towing equipment distributors, but is
not currently a party to any agreement to acquire any other distributors.
The acquired distributors market the Company's products as well as other
specialty transportation equipment, and the Company intends to expand the
number and types of products distributed through its distributors. The
Company-owned distributors generally do not compete in the same
geographic markets as the Company's independent distributors. Vulcan,
which operates as an autonomous subsidiary, distributes its products
through a separate part of the Company's distribution network.
The Company's sales force, which services the Company's distribution
network, consists of 40 sales representatives, 34 of whom are Company
employees whose responsibilities include providing administrative and
sales support to the entire distributor base. The remaining 6 sales
representatives are independent contractors who market the Company's
products exclusively. Sales 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 150 distributors in North America, who serve all 50 states,
Canada and Mexico, and approximately 40 distributors that serve other
foreign markets. During the fiscal year ended April 30, 1997, no single
distributor accounted for more than 5% of the Company's sales. 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, Suzuka in Japan, the IMSA "24 Hours at
Daytona" and Molson Indy 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.
-12-<PAGE>
FINANCIAL SERVICES
The Company's Financial Services Group commenced operations in
September 1996 to provide financial services to towing and recovery
equipment distributors and towing service companies. The Company
initially offered floor plan financing to distributors and purchase and
lease financing to towing service operators.
In April 1997, the Company entered into a strategic alliance with
Associates Commercial Corporation to jointly market financing of the
Company's products. Under the exclusive arrangement, the Company,
through its owned and independent distributors, originates lease and loan
financing for its end-customers, and Associates provides the financing
and servicing of the leases and loans. In return for the Company's
marketing activities, Associates pays a fee based on amounts financed.
The Company expects to capitalize on its strong existing
relationships with its distributors and their customers and its
reputation for reliable service to develop the Financial Services Group.
PRODUCT WARRANTIES AND INSURANCE
The Company offers a 12-month limited manufacturer's 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 1997 averaged less than 1% of net
sales. Management believes that the Company maintains adequate general
liability and product liability insurance.
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. 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.
TOWING SERVICES - ROADONE
In February 1997, the Company formed its towing service subsidiary,
RoadOne, to begin building a national towing service network. With the
acquisition of 38 towing service companies through the first quarter of
fiscal 1998, RoadOne has become the nation's largest towing service company.
The newly acquired operations are located in Colorado, Florida, Georgia,
Illinois, Indiana, Kentucky, Maryland, Massachusetts, Michigan, Mississippi,
Missouri, New York, North Carolina, Ohio, Oregon, Texas and Washington.
RoadOne's corporate offices are located in Chattanooga, Tennessee.
Historically, the towing service industry has been highly
fragmented, with an estimated 30,000 professional towing operators in the
United States, many of whom are undercapitalized local operators with no
viable means of realizing independently the economic value they have
created for their businesses. As the Company continues to pursue the
acquisition of towing service companies, management believes that these
owned companies, along with affiliations established with other
professional towing operations, will form an organization capable of
offering commercial industries, as well as the general public,
-13-<PAGE>
consistent, high quality service across the nation. The Company's
strategy is to build brand loyalty among towing service customers by
emphasizing consistently high quality and dependable service from
multiple locations over a broad geographic area. The Company expects to
market these services to organizations with widely dispersed fleets of
vehicles that would benefit from a single source provider.
The Company intends to acquire a significant number of additional
towing service operators. The Company has targeted professional towers,
and generally seeks operators who have good reputations in their markets
and solid management willing to continue in the employment of the Company
after the acquisition. As of July 31, 1997, the Company had acquired 38
towing service operators, and had entered into letters of intent to
acquire 20 additional towing service operators. These transactions
are subject to customary conditions, including completion of due
diligence investigations and execution of definitive acquisition
agreements, among others.
In order to offer a nationwide towing service, the Company is
establishing an affiliate program under which independent professional
towers who meet the Company's criteria will provide towing services under
the RoadOne name as "affiliates." RoadOne affiliates will be offered many
of the benefits of Miller-owned companies, such as product rebates, lower
costs for financing and insurance, quantity buying advantages, national
marketing strength and driver training. The Company's intention is
eventually to sign agreements with a large number of RoadOne affiliates
across the United States.
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 attractive
dealer and retail customer financing alternatives than the Company.
-14-<PAGE>
Historically, the towing service industry has been highly
fragmented, with an estimated 30,000 professional towing operators in the
United States. The Company believes that its consolidation of a number of
these companies will give it brand loyalty among towing service customers
through an emphasis on consistently high quality and dependable service
from multiple locations over a broad geographic area. The Company expects
to market these services to organizations with widely dispersed fleets of
vehicles that would benefit from a single source provider. However, the
size of the towing service industry will mean that the Company's
operations will face continued competition from many operators across the
country. These operators could be consolidated by other individuals or
entities, or they could enter into affiliate relationships with other
companies. In addition, the Company's entry into the towing service
industry presents the risk that its new business could be viewed as being
in competition with other customers of the Company.
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 newer aerodynamic vehicles
made of lighter weight materials. Patents for this technology were
granted to an operating subsidiary of the Company in 1987 and 1989. These
patents expire in mid-year 2004. This technology, particularly the L-arm
device, is 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 this technology, and
successfully settled an infringement action it brought against another
manufacturer. The Company also holds a number of other utility and design
patents covering other products, including the "Eagle-Claw" hook up
system, the Vulcan "scoop" wheel-retainer 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,"
"Challenger," "Formula I," "Eagle Claw SelfLoading Wheellift," "Pro
Star," "Street Runner" and "Vulcan," among others, are registered with
the United States Patent and Trademark Office. The Company has applied
for trademark registration of "RoadOne," 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.
EMPLOYEES
At April 30, 1997, the Company employed approximately 2,200 people,
including approximately 1,300 employees at RoadOne. None of the Company's
employees is covered by a collective bargaining agreement, though its
employees in France and England have certain similar rights provided 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.
-15-<PAGE>
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.
The Financial Services Group is subject to regulation under various
federal, state and local laws which limit the interest rates, fees and
other charges that may be charged by it or prescribe certain other terms
of the financing documents that it enters into with its customers.
Management believes that the additional administrative costs of complying
with these regulations will not materially affect the operations of the
Company.
DESCRIPTION OF PROPERTY
The Company operates four manufacturing facilities in the United
States. The facilities are located in (i) Ooltewah, Tennessee, (ii)
Hermitage, Pennsylvania, (iii) Olive Branch, Mississippi, and (iv)
Greeneville, Tennessee. The Ooltewah plant, containing approximately
150,000 square feet, produces light and heavy duty wreckers; the
Hermitage plant, containing approximately 95,000 square feet, produces
car carriers; the Olive Branch facility, containing approximately 120,000
square feet, produces light and heavy wreckers; and the Greeneville
plant, which was acquired in January 1997, and contains approximately
100,000 square feet, primarily produces car carriers.
The Company operates two foreign manufacturing facilities located in
the Lorraine region of France, which contain, in the aggregate,
approximately 100,000 square feet, and one in Norfolk, England, which
contains approximately 22,500 square feet.
The Company recently added 22,500 square feet of production capacity
at its Hermitage facility and approximately 15,000 square feet at the
Ooltewah facility. Management believes that these plant expansions,
together with the new car carrier manufacturing facility and additional
training of personnel, will allow the Company to increase production to
meet anticipated demand for its products.
In connection with its acquisition of 38 towing service companies,
the Company has acquired or entered into leases for property at over 100
locations in 17 states. These facilities are utilized as offices for
administrative and dispatch operations, garages for repair and upkeep of
towing vehicles, and lots for storage and impounding of towed cars.
RoadOne's corporate offices are housed in 2,000 square feet of leased
space in Chattanooga, Tennessee.
In connection with its acquisition of 10 towing equipment
distribution companies, the Company has acquired or entered into leases
for property at 12 locations in seven states and two Canadian provinces.
These facilities are used for various distribution operations.
-16-
<PAGE>
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.
USE OF PROCEEDS
This Prospectus relates to shares of Common Stock that the
Company may issue from time to time in connection with proposed
acquisitions by the Company or one or more of its subsidiaries.
The Company will not receive any proceeds from these offerings
other than the value of the businesses or properties acquired by
the Company or one or more of its subsidiaries in the proposed
acquisitions.
MARKET FOR REGISTRANT'S COMMON EQUITIY 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 quarterly range of high and low sales prices for the Common Stock for
the period from May 1, 1995 through April 30, 1997. The following prices
have been adjusted to reflect a 3-for-2 stock split effected in April
1996, a 2-for-1 stock split effected in September 1996, and a 3-for-2
stock split effected in December, 1996, each in the form of a stock
dividend.
<TABLE>
<CAPTION>
HIGH LOW
------ ------
<S> <C> <C>
FISCAL YEAR ENDED APRIL 30, 1996
First Quarter.................................................. $ 4.31 $ 3.67
Second Quarter................................................. $ 4.56 $ 3.61
Third Quarter.................................................. $ 6.44 $ 4.42
Fourth Quarter................................................. $10.29 $ 5.83
FISCAL YEAR ENDED APRIL 30, 1997
First Quarter.................................................. $12.17 $ 8.50
Second Quarter................................................. $17.33 $11.00
Third Quarter.................................................. $22.88 $14.67
Fourth Quarter................................................. $21.63 $ 9.75
</TABLE>
The approximate number of holders of record and beneficial owners of Common
Stock as of July 18, 1997 was 1,644 and 9,000, respectively.
The Company has never declared cash dividends on the Common Stock. The
Company 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 Company's financial condition,
restrictions in financing agreements and other factors deemed relevant by the
Board of Directors. The payment of dividends by the Company is restricted by
its revolving credit facility.
-17-
<PAGE>
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, 1997, 1996 and 1995 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 year ended July 31, 1993, the nine months ended
April 30, 1994 and the twelve months ended April 30, 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.
-18-<PAGE>
MILLER INDUSTRIES, INC. AND SUBSIDIARIES
SELECTED FINANCIAL DATA
<TABLE>
<CAPTION>
TWELVE NINE
MONTHS MONTHS YEAR
ENDED ENDED ENDED
YEARS ENDED APRIL 30, APRIL APRIL JULY
-------------------------- 30, 30, 31,
1997 1996 1995 1994<F1> 1994<F2> 1993
-------- -------- -------- ------- ------- -------
(IN THOUSANDS EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C>
STATEMENTS OF INCOME
DATA:
Net sales............... $292,394 $180,463 $139,779 $94,601 $74,192 $71,554
Costs and expenses:
Cost of operations.... 238,625 148,490 113,439 72,985 57,306 54,751
Selling, general and
administrative
expenses............. 29,740 17,629 14,750 15,273 11,508 13,188
Merger related
expenses............. 452 -- -- -- -- --
Interest expense,
net.................. 620 209 370 409 338 311
-------- -------- -------- ------- ------- -------
Total costs and
expenses............... 269,437 166,328 128,559 88,667 69,152 68,250
Income before income
taxes, extraordinary
gain and cumulative
effect of accounting
change................. 22,957 14,135 11,220 5,934 5,040 3,304
Provision for income
taxes.................. 8,436 5,108 3,736 1,644 1,620 100
-------- -------- -------- ------- ------- -------
Income before
extraordinary gain and
cumulative effect of
accounting change...... 14,521 9,027 7,484 4,290 3,420 3,204
Extraordinary gain on
debt retirement (less
applicable income taxes
of $175 in 1995 and $26
in 1994)............... -- -- 288 1,143 1,143 --
Cumulative effect of
change in accounting
for income taxes....... -- -- -- 781 781 --
Net income.............. 14,521 9,027 7,772 6,214 5,344 3,204
Preferred stock
dividends.............. -- -- -- (66) (38) (111)
-------- -------- -------- ------- ------- -------
Net income available for
common stockholders.... $ 14,521 $ 9,027 $ 7,772 $ 6,148 $ 5,306 $ 3,093
======== ======== ======== ======= ======= =======
Net income per common
share<F3>:
Before extraordinary
gain and cumulative
effect of accounting
change............... $ 0.35 $ 0.26 $ 0.25 $ 0.20 $ 0.16 $ 0.15
Extraordinary gain on
debt retirement...... -- -- 0.01 0.05 0.05 --
Cumulative effect of
change in accounting
for income taxes..... -- -- -- 0.04 0.04 --
-------- -------- -------- ------- ------- -------
$ 0.35 $ 0.26 $ 0.26 0.29 0.25 0.15
======== ======== ======== ======= ======= =======
Weighted average number
of common & common
equivalent shares
outstanding............ 41,454 34,102 29,428 21,072 21,072 21,072
======== ======== ======== ======= ======= =======
BALANCE SHEET DATA (AT
PERIOD END):
Working capital......... $ 61,980 $ 52,438 $ 19,011 $ -- $ 9,382 $ 2,361
Total assets............ 215,297 123,978 66,018 -- 42,156 31,704
Long-term debt, less
current portion........ 11,282 9,335 5,171 -- 17,848 12,746
Cumulative redeemable
preferred stock........ -- -- -- -- 4,094 4,094
Common shareholders'
equity (deficit)....... 138,783 71,913 32,320 -- 2,443 (201)
</TABLE>
- --------
[FN]
<F1>The twelve month period ended April 30, 1994 is presented for comparison
only.
<F2>In connection with the reorganization preceding the initial public
offering, the Company adopted an April 30 year end.
<F3>Net income per common share and the weighted average number of common and
common equivalent shares outstanding are computed after giving retroactive
effect to the 3-for-2 stock split effected on April 12, 1996, the 2-for-1
stock split effected on September 30, 1996, the 3-for-2 stock split
effected on December 30, 1996, and the issuance of 18,472,500 shares of
common stock in connection with the reorganization in April 1994.
-19-<PAGE>
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 Company 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 customer. Sales
of Company-purchased truck chassis are included in net sales. Revenue
from Company owned distributors is recorded at the time equipment is
shipped to customers or services are rendered. The towing services
division recognizes revenue at the time services are performed. 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
The following table sets forth, for the periods indicated, the
components of the consolidated statements of income expressed as a
percentage of net sales.
<TABLE>
<CAPTION>
YEARS ENDED APRIL
30,
-------------------
1997 1996 1995
----- ----- -----
<S> <C> <C> <C>
Net sales................................................ 100.0% 100.0% 100.0%
Costs and expenses:
Costs of operations.................................... 81.6% 82.3% 81.2%
Selling, general and administrative expenses........... 10.2% 9.8% 10.6%
Merger related expenses................................ 0.1% -- --
Interest expense, net.................................. 0.2% 0.1% 0.2%
----- ----- -----
Total cost and expenses.................................. 92.1% 92.2% 92.0%
Income before income taxes and extraordinary gain........ 7.9% 7.8% 8.0%
Provision for income taxes............................... 2.9% 2.8% 2.6%
----- ----- -----
Income before extraordinary gain......................... 5.0% 5.0% 5.4%
Extraordinary gain on debt retirement (Less applicable
income taxes of $175)................................... 0.0% 0.0% 0.2%
----- ----- -----
Net income............................................... 5.0% 5.0% 5.6%
===== ===== =====
</TABLE>
-20-
<PAGE>
YEAR ENDED APRIL 30, 1997 COMPARED TO YEAR ENDED APRIL 30, 1996
Net sales for the year ended April 30, 1997 increased 62.0 % to
$292.4 million from $180.5 million for the comparable period in 1996. The
increase in net sales was primarily the result of (i) higher unit sales
in all of the Company's manufacturing product lines, (ii) the inclusion
for a full year of sales of the two European manufacturing operations
acquired in January and April 1996, (iii) the inclusion since the
acquisition dates in fiscal 1997 of sales from the distributors and
towing service companies acquired via purchase transactions, (iv) a
higher level of sales by the Company-owned distributors and the towing
service companies acquired in fiscal 1997 in pooling-of-interests
transactions and, (v) an increase in sales of truck chassis sold by the
domestic manufacturing operations to third parties.
Costs of operations as a percentage of net sales decreased slightly
to 81.6% for the year ended April 30, 1997 from 82.3% for the comparable
prior year period. This reduction was primarily a result of the Company's
towing service division, which generally has a lower level of operating
costs than the manufacturing and distribution division, accounting for a
higher proportion of revenue in fiscal 1997.
Selling, general and administrative expenses for fiscal 1997
increased 68.7% to $29.7 million from $17.6 million for the comparable
period of fiscal 1996. The increase was due primarily to the impact of
the significant expansion of the Company's business referred to above and
to incremental resources added to support the Company's growth. As a
percentage of net sales, selling, general and administrative expenses
increased slightly from 9.8% in fiscal 1996 to 10.2% in fiscal 1997
primarily as a result of the Company's towing services division, which
generally has a higher level of selling, general and administrative costs
than the manufacturing and distribution division.
Net interest expense for fiscal 1997 increased $.4 million to $.6
million from $.2 million for fiscal 1996 primarily due to interest
expense of the businesses acquired in fiscal 1997 exceeding the interest
income from the investment of available cash balances.
The effective rate of the provision for income taxes was 36.7% for
fiscal 1997 and 36.1% for fiscal 1996.
YEAR ENDED APRIL 30, 1996 COMPARED TO YEAR ENDED APRIL 30, 1995
Net sales for the year ended April 30, 1996 increased 29.1 % to
$180.5 million from $139.8 million for the comparable period in 1995. The
increase in net sales was primarily the result of (i) higher unit sales
in all of the Company's manufacturing product lines, (ii) the inclusion
of sales in fiscal 1996 of sales of Jige Lohr following its acquisition
in January 1996, (iii) a higher level of sales by the Company-owned
distributors and the towing service companies acquired in fiscal 1997 in
pooling-of-interests transactions and, (iv) an increase in sales of truck
chassis sold by the domestic manufacturing operations to third parties.
Costs of operations as a percentage of net sales increased slightly
to 82.3% for the year ended April 30, 1996 from 81.2% for the comparable
prior year period due primarily to the impact of truck chassis cost of
sales being at a higher relative level in fiscal 1996 than in fiscal
1995.
Selling, general and administrative expenses for fiscal 1996
increased 19.5% to $17.6 million from $14.8 million for the comparable
-21-<PAGE>
period of fiscal 1995. The increase was due primarily to the impact of
higher expenses in the towing service companies accounted for using the
pooling-of-interests method of accounting, higher commission expenses
resulting from higher sales, and higher general and administrative
expenses incurred to support the increased sales and the Company's fiscal
1996 acquisitions. As a percentage of net sales, selling, general and
administrative expenses decreased slightly to 9.8% in fiscal 1996 from
10.6% in fiscal 1995.
Net interest expense for fiscal 1996 decreased $.2 million to $.2
million from $.4 million for fiscal 1995 primarily due to the investment
of cash generated from the January 1996 stock offering.
The effective rate of the provision for income taxes was 36.1% for
fiscal 1996 and 33.3% for fiscal 1995. The increase was due primarily to
the higher level of taxes incurred in fiscal 1996 by the towing service
companies accounted for using the pooling-of-interests method of
accounting.
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 offerings completed in January 1996
and November 1996. The net proceeds of the public offerings were used to
repay long-term debt, including that of acquired companies, redeem
cumulative preferred stock of a wholly owned subsidiary, increase working
capital, provide funds for capital expenditures, acquisition of
businesses, and other general corporate purposes.
Capital used in operating activities was $11.0 million for the year
ended April 30, 1997 as compared to $1.6 million provided by operations
for the comparable period of 1996. The cash used in operating activities
in fiscal 1997 was primarily for the purpose of supporting the growth of
the business in both manufacturing and distribution.
Cash used in investing activities was $22.9 million for the year
ended April 30, 1997 compared to $13.6 million for the year ended April
30, 1996. The cash used in investing activities was primarily for the
acquisition of companies and for capital expenditures, including the
acquisition of a car carrier production plant in fiscal 1997, and
equipment purchases.
Cash provided by financing activities was $17.3 million for the year
ended April 30, 1997 compared to $33.3 million for the comparable period
in 1996. In November 1996, the company completed a public offering of its
Common Stock which resulted in net proceeds after underwriting discounts
and offering expenses of $29.2 million. The net proceeds were used to
repay debt, including that of acquired companies, purchase a car carrier
production plant in January 1997, for other capital expenditures, for
working capital, for the acquisition of companies, and for other general
corporate purposes.
The Company has a $50 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 rate plus 0.8%. At April 30, 1997, there were no borrowings
outstanding under the Credit Facility. The Credit Facility imposes
restrictions on the Company with respect to the maintenance of certain
-22-<PAGE>
financial ratios, the incurrence of indebtedness, the sale of assets,
mergers, capital expenditures, and the payment of dividends.
RECENT ACCOUNTING PRONOUNCEMENTS
In February 1997, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards ("SFAS") No. 128, "Earnings
Per Share," which establishes new standards for computing and presenting
earnings per share ("EPS"). SFAS No. 128 is effective for financial
statements issued for periods ending after December 15, 1997, including
interim periods. Early adoption is not permitted and upon initial
application, all prior period EPS data is required to be restated. The
adoption of SFAS No. 128 will not have a material effect on the Company's
EPS amounts.
LEGAL MATTERS
Certain legal matters with respect to the validity of the
Shares offered hereby will be passed upon by Kilpatrick Stockton
LLP, Atlanta, Georgia.
EXPERTS
The financial statements included in or incorporated by reference
in this prospectus or elsewhere in the registration statement have been
audited by Arthur Andersen LLP, independent public accountants, as indicated
in their reports with respect thereto, and are included herein in reliance
upon the authority of said firm as experts in giving said reports.
-23-
<PAGE>
MILLER INDUSTRIES, INC. AND SUBSIDIARIES
INDEX TO CONSOLIDATED 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, 1997 and 1996......... F-2
Consolidated Statements of Income for the years ended April 30,
1997, 1996, and 1995............................................. F-3
Consolidated Statements of Shareholders' Equity for the years
ended April 30, 1997, 1996, and 1995............................. F-4
Consolidated Statements of Cash Flows for the years ended April
30, 1997, 1996, and 1995......................................... F-5
Notes to Consolidated Financial Statements........................ F-6
</TABLE>
-24-<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Board of Directors and Shareholders of
Miller Industries, Inc.:
We have audited the accompanying consolidated balance sheets of MILLER
INDUSTRIES, INC. (a Tennessee corporation) AND SUBSIDIARIES as of April 30,
1997 and 1996 and the related consolidated statements of income, shareholders'
equity, and cash flows for each of the three years in the period ended
April 30, 1997. 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, 1997 and 1996 and the results of their
operations and their cash flows for each of the three years in the period
ended April 30, 1997 in conformity with generally accepted accounting
principles.
Arthur Andersen LLP
Chattanooga, Tennessee
July 15, 1997
F-1
<PAGE>
MILLER INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
APRIL 30, 1997 AND 1996
(IN THOUSANDS, EXCEPT SHARE DATA)
<TABLE>
<CAPTION>
1997 1996
-------- --------
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and temporary investments........................... $ 8,508 $ 25,117
Accounts receivable, net of allowance for doubtful
accounts of $1,774 and $1,265 in 1997 and 1996,
respectively............................................ 49,844 33,650
Inventories.............................................. 60,574 32,432
Deferred income taxes.................................... 4,541 1,485
Prepaid expenses and other............................... 1,885 1,614
-------- --------
Total current assets................................... 125,352 94,298
PROPERTY, PLANT, AND EQUIPMENT, net........................ 49,171 23,309
GOODWILL, net.............................................. 36,916 5,107
PATENTS, TRADEMARKS, AND OTHER PURCHASED PRODUCT RIGHTS,
net....................................................... 908 976
OTHER ASSETS............................................... 2,950 288
-------- --------
$215,297 $123,978
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Current portion of long term obligations................. $ 4,479 $ 1,414
Line of credit........................................... 0 1,301
Accounts payable......................................... 38,548 28,017
Accrued liabilities and other............................ 20,345 11,128
-------- --------
Total current liabilities.............................. 63,372 41,860
-------- --------
LONG TERM OBLIGATIONS, less current portion................ 11,282 9,335
-------- --------
DEFERRED INCOME TAXES...................................... 1,860 870
-------- --------
COMMITMENTS AND CONTINGENCIES (Notes 3, 7, 8 and 10)
SHAREHOLDERS' EQUITY:
Preferred stock, $.01 par value; 5,000,000 shares
authorized, none issued or outstanding.................. 0 0
Common stock, $.01 par value; 100,000,000 shares
authorized, 42,480,202 and 37,312,478 shares issued and
outstanding at 1997 and 1996, respectively.............. 425 373
Additional paid-in capital............................... 110,773 54,808
Retained earnings........................................ 28,027 16,749
Cumulative translation adjustment........................ (442) (17)
-------- --------
Total shareholders' equity............................. 138,783 71,913
-------- --------
$215,297 $123,978
======== ========
</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
FOR THE YEARS ENDED APRIL 30, 1997, 1996, AND 1995
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
1997 1996 1995
-------- -------- --------
<S> <C> <C> <C>
NET SALES.......................................... $292,394 $180,463 $139,779
-------- -------- --------
COSTS AND EXPENSES:
Costs of operations.............................. 238,625 148,490 113,439
Selling, general, and administrative expenses.... 29,740 17,629 14,750
Merger related expenses.......................... 452 0 0
Interest expense, net............................ 620 209 370
-------- -------- --------
Total Costs and Expenses....................... 269,437 166,328 128,559
-------- -------- --------
INCOME BEFORE INCOME TAXES AND EXTRAORDINARY GAIN.. 22,957 14,135 11,220
PROVISION FOR INCOME TAXES......................... 8,436 5,108 3,736
-------- -------- --------
INCOME BEFORE EXTRAORDINARY GAIN................... 14,521 9,027 7,484
EXTRAORDINARY GAIN ON DEBT RETIREMENT (less
applicable income taxes of $175).................. 0 0 288
-------- -------- --------
NET INCOME......................................... $ 14,521 $ 9,027 $ 7,772
======== ======== ========
NET INCOME PER SHARE:
Before extraordinary gain on debt retirement..... $ 0.35 $ 0.26 $ 0.25
Extraordinary gain on debt retirement............ 0.00 0.00 0.01
-------- -------- --------
$ 0.35 $ 0.26 $ 0.26
======== ======== ========
WEIGHTED AVERAGE COMMON AND COMMON EQUIVALENT
SHARES OUTSTANDING................................ 41,454 34,102 29,428
======== ======== ========
</TABLE>
The accompanying notes are an integral part of these consolidated statements.
F-3
<PAGE>
MILLER INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
FOR THE YEARS ENDED APRIL 30, 1997, 1996, AND 1995
(IN THOUSANDS, EXCEPT SHARE DATA)
<TABLE>
<CAPTION>
ADDITIONAL CUMULATIVE
COMMON PAID-IN RETAINED TRANSLATION
STOCK CAPITAL EARNINGS ADJUSTMENT TOTAL
------ ---------- -------- ----------- --------
<S> <C> <C> <C> <C> <C>
BALANCE, April 30, 1994....... $211 $ 1,188 $ 1,747 $ 0 $ 3,146
Issuance of 10,735,314
common shares through
initial public offering.... 107 22,103 0 0 22,210
Unamortized restructuring
credit from redemption of
preferred stock............ 0 694 0 0 694
Distributions to former
shareholders of Pooled
Entities................... 0 0 (789) 0 (789)
Net income.................. 0 0 7,772 0 7,772
---- -------- ------- ----- --------
BALANCE, April 30, 1995....... 318 23,985 8,730 0 33,033
Issuance of 5,400,000 common
shares through a public
offering................... 54 30,124 0 0 30,178
Issuance of 80,502 shares in
acquisition................ 1 614 0 0 615
Exercise of stock options... 0 37 0 0 37
Other stock issuance........ 0 48 0 0 48
Distributions to former
shareholders of Pooled
Entities................... 0 0 (1,008) 0 (1,008)
Net income.................. 0 0 9,027 0 9,027
Net translation
adjustments................ 0 0 0 (17) (17)
---- -------- ------- ----- --------
BALANCE, April 30, 1996....... 373 54,808 16,749 (17) 71,913
Exercise of stock options... 6 540 0 0 546
Tax benefit of exercise of
stock options.............. 0 630 0 0 630
Issuance of 1,943,028 common
shares through a public
offering................... 19 29,225 0 0 29,244
Issuance of 2,709,503 common
shares in acquisitions..... 27 25,570 (2,530) 0 23,067
Distributions to former
shareholders of Pooled
Entities................... 0 0 (713) 0 (713)
Net income.................. 0 0 14,521 0 14,521
Net translation
adjustments................ 0 0 0 (425) (425)
---- -------- ------- ----- --------
BALANCE, April 30, 1997....... $425 $110,773 $28,027 $(442) $138,783
==== ======== ======= ===== ========
</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
FOR THE YEARS ENDED APRIL 30, 1997, 1996, AND 1995
(IN THOUSANDS)
<TABLE>
<CAPTION>
1997 1996 1995
-------- -------- --------
<S> <C> <C> <C>
OPERATING ACTIVITIES:
Net income...................................... $ 14,521 $ 9,027 $ 7,772
Adjustments to reconcile net income to net cash
provided by (used in) operating activities:
Depreciation and amortization................. 5,782 2,762 2,017
Gain on disposals of property, plant, and
equipment.................................... (170) (161) (130)
Extraordinary gain on debt retirement......... 0 0 (288)
Deferred income tax (benefit) provision....... (703) 373 140
Changes in operating assets and liabilities:
Accounts receivable......................... (10,385) (9,836) (9,894)
Inventories................................. (20,442) (6,857) (9,187)
Prepaid expenses and other.................. 1,312 (454) (211)
Accounts payable............................ (1,124) 5,827 9,501
Accrued liabilities and other............... 200 900 (657)
Other assets................................ 0 18 (20)
-------- -------- --------
Net cash (used in) provided by operating
activities............................... (11,009) 1,599 (957)
-------- -------- --------
INVESTING ACTIVITIES:
Purchases of property, plant, and equipment..... (11,073) (10,407) (4,032)
Proceeds from sales of property, plant, and
equipment...................................... 297 449 165
Payment received on notes receivable............ 0 0 39
Proceeds from sale of finance receivables....... 24,596 0 0
Acquisition of businesses, net of cash
acquired....................................... (7,701) (3,567) 0
Funding of finance receivables.................. (28,679) 0 0
Other........................................... (304) (91) (165)
-------- -------- --------
Net cash used in investing activities..... (22,864) (13,616) (3,993)
-------- -------- --------
FINANCING ACTIVITIES:
Proceeds from issuance of common stock.......... 29,244 30,178 22,210
Proceeds from exercise of stock options......... 546 37 0
Net borrowings (payments) under line of credit.. (5,236) (522) 1,564
Borrowings under long term obligations.......... 1,374 6,346 1,176
Payments on long term obligations............... (7,365) (1,771) (13,219)
Redemption of preferred stock................... 0 0 (3,400)
Distributions to former shareholders of Pooled
Entities....................................... (713) (1,008) (789)
Other........................................... (560) 0 (225)
-------- -------- --------
Net cash provided by financing
activities............................... 17,290 33,260 7,317
-------- -------- --------
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND
TEMPORARY INVESTMENTS.......................... (26) (2) 0
-------- -------- --------
NET INCREASE (DECREASE) IN CASH AND TEMPORARY
INVESTMENTS.................................... (16,609) 21,241 2,367
CASH AND TEMPORARY INVESTMENTS, beginning of
year........................................... 25,117 3,876 1,509
-------- -------- --------
CASH AND TEMPORARY INVESTMENTS, end of year..... $ 8,508 $ 25,117 $ 3,876
======== ======== ========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION:
Cash payments for interest.................... $ 1,298 $ 430 $ 388
======== ======== ========
Cash payments for income taxes................ $ 7,898 $ 4,826 $ 3,027
======== ======== ========
</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
APRIL 30, 1997 AND 1996
1. ORGANIZATION AND NATURE OF OPERATIONS
Miller Industries, Inc. and subsidiaries ("the Company") is an integrated
provider of vehicle towing and recovery equipment, systems and services. The
principal markets for the towing and recovery equipment are independent
distributors and users of towing and recovery equipment located primarily
throughout the United States, Canada, Europe, Asia, and the Middle East. The
Company's products are marketed under the brand names of Century, Challenger,
Holmes, Champion, Eagle, Jige, Boniface, and Vulcan. The truck chassis on
which towing and recovery equipment are installed are either purchased by the
Company or provided by customers.
The Company markets its towing and recovery services in the United States
through its wholly owned subsidiary Road One, Inc. ("Road One").
At various dates during 1997, the Company acquired certain companies in
separate transactions that have been accounted for as poolings of interests.
These companies are referred to collectively as the "Pooled Entities." Prior
periods have been restated to include the operating results of all material
pooling-of-interests transactions. See Note 3, Business Combinations, for
further discussion of these transactions.
On August 9, 1994, the Company completed an initial public offering of
10,735,314 shares of its common stock at $2.33 per share (the "Offering"). The
net proceeds of the Offering were used to repay long-term obligations, redeem
cumulative preferred stock of a wholly owned subsidiary, increase working
capital, and provide funds for capital additions and other general corporate
purposes.
On January 31, 1996, the Company completed a public offering of 5,400,000
shares of previously unissued common stock at $6.11 per share. The net
proceeds were used to repay long-term obligations, increase working capital,
and provide funds for capital additions and other general corporate purposes.
On November 12, 1996, the Company completed a public offering of 1,943,028
shares of previously unissued common stock at $16.17 per share. The net
proceeds were used to fund Road One acquisitions and increase working capital.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
USE OF ESTIMATES IN THE PREPARATION OF FINANCIAL STATEMENTS
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
CONSOLIDATION
The accompanying consolidated financial statements include the accounts of
Miller Industries, Inc. and its subsidiaries. All significant intercompany
transactions and balances have been eliminated.
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.
F-6
<PAGE>
MILLER INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
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, 1997 and 1996 consisted of the following (in
thousands):
<TABLE>
<CAPTION>
1997 1996
------- -------
<S> <C> <C>
Chassis.................................................... $18,837 $ 7,188
Raw materials.............................................. 16,257 11,505
Work in process............................................ 7,843 7,155
Finished goods............................................. 17,637 6,584
------- -------
$60,574 $32,432
======= =======
</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.
Property, plant, and equipment at April 30, 1997 and 1996 consisted of the
following (in thousands):
<TABLE>
<CAPTION>
1997 1996
-------- --------
<S> <C> <C>
Land................................................... $ 3,181 $ 1,852
Buildings and improvements............................. 16,550 12,472
Machinery and equipment................................ 39,302 17,439
Furniture, fixtures, and vehicles...................... 9,402 2,210
Construction in progress............................... 1,193 781
-------- --------
69,628 34,754
Less accumulated depreciation.......................... (20,457) (11,445)
-------- --------
Property, plant, and equipment, net.................... $ 49,171 $ 23,309
======== ========
</TABLE>
NET INCOME PER SHARE
Net income per share is calculated using the weighted average number of
common and common equivalent shares outstanding.
In April 1996, September 1996, and December 1996, the Company effected a
three-for-two, a two-for-one, and a three-for-two common stock split,
respectively, each in the form of a stock dividend. All historical share and
per share amounts have been retroactively restated to reflect the common stock
splits.
In February 1997, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards ("SFAS") No. 128, "Earnings Per Share,"
which establishes new standards for computing and presenting earnings per
share ("EPS"). SFAS No. 128 is effective for financial statements issued for
periods ending after December 15, 1997, including interim periods. Early
adoption is not permitted, and upon initial application, all prior period EPS
data is required to be restated. The adoption of SFAS No. 128 will not have a
material effect on the Company's EPS amounts.
F-7
<PAGE>
MILLER INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
GOODWILL
Goodwill is being amortized on a straight-line basis over 40 years. The
Company periodically evaluates whether events and circumstances have occurred
which would indicate that the goodwill is not recoverable. Accumulated
amortization of goodwill was $831,000 and $578,000 at April 30, 1997 and 1996,
respectively. Amortization expense for 1997, 1996, and 1995 was $253,000,
$101,000, and $100,000, 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, 1997 and 1996 was
$315,000 and $251,000, respectively. Amortization expense for 1997, 1996, and
1995 was $64,000, $73,000, and $64,000, respectively.
ACCRUED LIABILITIES AND OTHER
Accrued liabilities and other consisted of the following at April 30, 1997
and 1996 (in thousands):
<TABLE>
<CAPTION>
1997 1996
------- -------
<S> <C> <C>
Accrued wages, commissions, bonuses, and benefits......... $ 4,153 $ 2,565
Accrued income taxes...................................... 3,159 2,217
Other..................................................... 13,033 6,346
------- -------
$20,345 $11,128
======= =======
</TABLE>
PRODUCT WARRANTY
The Company provides a one-year limited product and service warranty on
certain of its products. The Company provides for the estimated cost of this
warranty at the time of sale. Warranty expense for 1997, 1996, and 1995 was
$1,057,000, $618,000, and $941,000, respectively.
STOCK-BASED COMPENSATION
Effective May 1, 1996, the Company adopted SFAS No. 123, "Accounting for
Stock-Based Compensation." This statement defines a fair value based method of
accounting for an employee stock option or similar equity instrument. However,
it also allows an entity to continue to measure compensation for these plans
using the intrinsic value based method of accounting prescribed by Accounting
Principles Board Opinion No. 25 ("APB No. 25"). The Company has elected to
continue to account for its stock compensation plans under APB No. 25. Pro
forma disclosures of net income and net income per share, as if the fair value
based method of accounting defined in SFAS No. 123 had been applied, are
presented in Note 6.
CREDIT RISK
Financial instruments that potentially subject the Company to significant
concentrations of credit risk consist principally of cash investments and
trade accounts receivable. The Company places its cash investments with high-
quality financial institutions and limits the amount of credit exposure to any
one institution. The Company's trade receivables are primarily from
independent distributors of towing and recovery equipment, and such
receivables are generally not collateralized. The Company monitors its
exposure for credit losses and maintains allowances for anticipated losses.
REVENUE RECOGNITION
Revenue is recorded by the Company when equipment is shipped to independent
distributors or other customers. Revenue from towing services is recognized
when services are performed.
F-8
<PAGE>
MILLER INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
3. BUSINESS COMBINATIONS
During fiscal 1996, the Company purchased all of the outstanding capital
stock of two European manufacturers of towing and recovery equipment at a
total purchase price of $4,641,000, consisting of $4,026,000 in cash and
$615,000 (80,502 shares) of newly issued common stock. These acquisitions have
been accounted for under the purchase method, and their operating results have
been included in the Company's consolidated results of operations from their
respective dates of acquisition. The impact of the acquisitions on
consolidated pro forma net sales, net income, and net income per share as if
the acquisitions had taken place at the beginning of fiscal 1995, was not
significant for 1996 and 1995.
In September 1996, the Company acquired all of the outstanding capital stock
of Vulcan International, Inc. ("Vulcan"), a manufacturer of towing and
recovery equipment, for $8,690,000 (761,193 shares) of newly issued common
stock. The acquisition was accounted for under the pooling-of-interests
method. Accordingly, prior periods have been restated to include Vulcan's
operating results.
During fiscal 1997, the Company purchased all of the outstanding capital
stock of 3 distributors of towing and recovery equipment in separate
transactions for an aggregate purchase price of $4,073,000 which consisted of
318,157 shares of common stock. The Company also purchased all of the
outstanding common stock of 13 towing service companies in separate
transactions for an aggregate purchase price of $29,239,000 which consisted of
$7,479,000 in cash and $21,760,000 (1,639,491 shares) of common stock. These
acquisitions have been accounted for using the purchase method of accounting,
and their operating results have been included in the Company's consolidated
results of operations from the respective dates of acquisition. The financial
statements reflect the preliminary allocation of purchase price as the
purchase price has not been finalized for all transactions. The excess of the
aggregate purchase price over the estimated fair value of assets acquired of
approximately $32,062,000 has been recognized as a component of goodwill in
the accompanying consolidated balance sheet at April 30, 1997.
Also during fiscal 1997, the Company purchased all of the outstanding
capital stock of an additional 3 distributors of towing and recovery equipment
in separate transactions for an aggregate purchase price of $4,395,000 which
consisted of 371,320 shares of common stock. The Company also purchased all of
the outstanding common stock of 16 towing service companies in separate
transactions for an aggregate purchase price of $28,053,000 which consisted of
$250,000 in cash and $27,803,000 (2,217,680 shares) of common stock. These
acquisitions were accounted for using the pooling-of-interests method of
accounting. Prior periods have been restated to include the operating results
of all material pooling-of-interests transactions.
The impact of the restatement for the Pooled Entities on the consolidated
results of operations of the Company for 1996 and 1995 is as follows (in
thousands):
<TABLE>
<CAPTION>
1997 1996 1995
-------- -------- --------
<S> <C> <C> <C>
Net sales:
As previously reported....................... $182,741 $125,706 $ 94,722
Pooled Entities.............................. 109,653 54,757 45,057
-------- -------- --------
As restated................................ $292,394 $180,463 $139,779
======== ======== ========
Income before extraordinary gain:
As previously reported....................... $ 10,416 $ 7,793 $ 5,406
Pooled Entities.............................. 4,105 1,234 2,078
-------- -------- --------
As restated................................ $ 14,521 $ 9,027 $ 7,484
======== ======== ========
Net income:
As previously reported....................... $ 10,416 $ 7,793 $ 5,694
Pooled Entities.............................. 4,105 1,234 2,078
-------- -------- --------
As restated................................ $ 14,521 $ 9,027 $ 7,772
======== ======== ========
</TABLE>
F-9
<PAGE>
MILLER INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
The following unaudited pro forma summary combines the results of operations
of all 1997 purchase combinations, the immaterial pooling-of-interests
combinations, and the Company as if these combinations had occurred at the
beginning of fiscal 1996 after giving effect to certain adjustments, including
amortization of intangible assets and related income tax effects. The pro
forma summary does not necessarily reflect the results of operations as they
would have been if the Company and these acquisitions had constituted a single
entity during these periods (in thousands, except share data).
<TABLE>
<CAPTION>
1997 1996
--------------------- ---------------------
AS REPORTED PRO FORMA AS REPORTED PRO FORMA
----------- --------- ----------- ---------
<S> <C> <C> <C> <C>
Net sales...................... $292,394 $341,668 $180,463 $276,323
======== ======== ======== ========
Net income..................... $ 14,521 $ 13,727 $ 9,027 $ 10,008
======== ======== ======== ========
Net income per share........... $ 0.35 $ 0.32 $ 0.26 $ 0.28
======== ======== ======== ========
</TABLE>
Subsequent to April 30, 1997, the Company acquired an additional four
distributors of towing and recovery equipment and five towing service
companies in separate transactions, issuing in the aggregate approximately
497,000 shares of common stock and paying approximately $2,875,000 in cash.
These transactions have been accounted for under the purchase method of
accounting.
4. GAIN ON EARLY RETIREMENT OF DEBT AND PREFERRED STOCK REDEMPTION
Upon consummation of the initial public offering, the Company retired
certain obligations including previously restructured long-term obligations,
which resulted in a gain of $288,000. Such amount is reflected as an
extraordinary gain in the accompanying 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 was reflected as a credit to paid-in capital in
1995.
5. LONG-TERM OBLIGATIONS AND LINES OF CREDIT
LONG-TERM OBLIGATIONS
Long-term obligations consisted of the following at April 30, 1997 and 1996
(in thousands):
<TABLE>
<CAPTION>
1997 1996
------- ------
<S> <C> <C>
Mortgage notes payable, interest at rates from 3% to
6.88%, payable in monthly installments, maturing 2003 to
2011.................................................... $ 2,344 $2,510
Equipment notes payable, interest at rates from 6.5% to
13.75%, payable in monthly installments, maturing 1997
to 2005................................................. 12,015 5,539
Other notes payable...................................... 1,402 2,700
------- ------
15,761 10,749
Less current portion..................................... (4,479) (1,414)
------- ------
$11,282 $9,335
======= ======
</TABLE>
F-10
<PAGE>
MILLER INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
At April 30, 1997, maturities of long-term obligations (excluding future
cash outflows for interest) for the next five fiscal years are as follows (in
thousands):
<TABLE>
<S> <C>
1998.................................. $4,479
1999.................................. 3,982
2000.................................. 2,545
2001.................................. 1,662
2002.................................. 977
</TABLE>
Certain equipment and manufacturing facilities are pledged as collateral
under the mortgage notes payable.
LINE OF CREDIT
At April 30, 1997, the Company had an unsecured revolving credit facility of
$50,000,000 (the "Revolver") for working capital and other general corporate
purposes. Borrowings under the Revolver bear interest at rate LIBOR plus 0.8%,
(6.69% at April 30, 1997) and include a commitment fee on the daily unused
balance. The weighted average interest rate for borrowings outstanding under
the Revolver during 1997 was approximately 6.88%. Interest is payable monthly
and the Revolver is renewable on an annual basis. There were no borrowings
outstanding under the Revolver at April 30, 1997.
The Revolver imposes restrictions on the company with respect to the
maintenance of certain financial ratios, the incurrence of indebtedness, the
sale of assets, mergers, capital expenditures, and the payment of dividends.
6. STOCK-BASED COMPENSATION PLANS
Although the Company adopted SFAS No. 123 during 1997, it elected to
continue to account for compensation expense under its stock compensation
plans under APB No. 25. Accordingly, no compensation cost has been recognized
for stock option grants since the options have exercise prices equal to the
market value of the common stock at the date of grant.
In accordance with the Company's stock-based compensation plans, the Company
may grant incentive stock options as well as non-qualified and other stock-
related incentives to officers, employees and nonemployee directors of the
Company. Options vest ratably over a four-year period beginning on the grant
date and expire ten years from the date of grant. Shares available for
granting options at April 30, 1997 and 1996 were 2.3 million and 3.8 million,
respectively.
For SFAS No. 123 purposes, the fair value of each option grant has been
estimated as of the date of grant using the Black-Scholes option-pricing model
with the following weighted average assumptions for grants in 1997 and 1996:
expected dividend yield of 0%, expected volatility of 42%, risk-free interest
rates of 6.33% and 6.08%, and expected lives of 5.5 years. Using these
assumptions, the fair value of options granted in 1997 and 1996 is
approximately $7,457,000 and $1,639,000, respectively, which would be
amortized as compensation expense over the vesting period of the options.
F-11
<PAGE>
MILLER INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
Had compensation cost for 1997 and 1996 stock option grants been determined
based on the fair value at the grant dates consistent with the method
prescribed by SFAS No. 123, the Company's net income and net income per share
would have been adjusted to the pro forma amounts indicated below:
<TABLE>
<CAPTION>
1997 1996
------- ------
<S> <C> <C>
Net income (in thousands):
As reported............................................. $14,521 $9,027
Pro forma............................................... 13,624 8,864
Net income per share:
As reported............................................. $ 0.35 $ 0.26
Pro forma............................................... 0.33 0.26
</TABLE>
The pro forma effect on net income in this disclosure is not representative
of the pro forma effect on net income in future years because it does not take
into consideration pro forma compensation expense related to grants made prior
to 1996.
A summary of the activity of stock options during 1997, 1996, and 1995 is
presented below (shares in thousands):
<TABLE>
<CAPTION>
1997 1996 1995
---------------- ---------------- ----------------
WEIGHTED WEIGHTED WEIGHTED
SHARES AVERAGE SHARES AVERAGE SHARES AVERAGE
UNDER EXERCISE UNDER EXERCISE UNDER EXERCISE
OPTION PRICE OPTION PRICE OPTION PRICE
------ -------- ------ -------- ------ --------
<S> <C> <C> <C> <C> <C> <C>
Outstanding at Beginning of
Year...................... 2,776 $ 2.98 1,915 $2.36 0 $0.00
Granted.................. 1,529 11.28 898 4.29 1,929 2.36
Exercised................ (515) 2.55 (18) 2.33 0 0
Forfeited................ (22) 6.67 (19) 2.77 (14) 2.33
----- ------ ----- ----- ----- -----
Outstanding at End of
Year...................... 3,768 $ 6.39 2,776 $2.98 1,915 $2.36
===== ====== ===== ===== ===== =====
Options exercisable at
year-end.................. 811 $ 3.25 509 $2.38 0 $0.00
===== ====== ===== ===== ===== =====
$ 5.54 $2.06 N/A
====== ===== =====
</TABLE>
A summary of the exercise prices for options outstanding under the Company's
stock-based compensation plans at April 30, 1997 is presented below (shares in
thousands):
<TABLE>
<CAPTION>
WEIGHTED
AVERAGE
EXERCISE
SHARES WEIGHTED PRICE OF
EXERCISE UNDER AVERAGE SHARES SHARES
PRICE RANGE OPTION REMAINING LIFE EXERCISABLE EXERCISABLE
---------------- ------ -------------- ----------- -----------
<S> <C> <C> <C> <C> <C>
$ 2.33 $ 3.37 1,425 7.27 577 $ 2.41
3.78 5.48 722 8.28 188 4.19
5.75 7.64 95 8.80 16 6.96
8.79 12.88 1,395 9.41 30 11.66
13.38 18.00 131 9.81 0 0.00
----- ---- --- ------
Total....... 3,768 8.38 811 $ 3.25
===== ==== === ======
</TABLE>
7. LEASE COMMITMENTS
The Company has entered into various operating leases for buildings and
office equipment. Rental expense under these leases was $455,000, $892,000,
and $908,000 for 1997, 1996, and 1995, respectively.
F-12
<PAGE>
MILLER INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
At April 30, 1997, future minimum lease payments under noncancellable
operating leases for the next five fiscal years are as follows (in thousands):
<TABLE>
<S> <C>
1998.................................. $1,570
1999.................................. 1,524
2000.................................. 1,399
2001.................................. 1,225
2002.................................. 1,080
</TABLE>
8. LITIGATION
The Company is party to certain proceedings incidental to its business. The
ultimate disposition of such matters cannot be determined presently 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 was awarded a judgment in a patent infringement
suit in the United States District Court for the Northern District of Iowa at
Sioux City, Iowa in which the jury found the defendant manufacturer and
distributor of towing equipment willfully infringed both the Company's
underlift parallel linkage and L-arm patents and that the common owner of the
manufacturer and distributor induced the infringement. The judgment was paid
to the Company in August 1996 in the amount of approximately $1.8 million,
which included enhanced damages for willfulness and pre-judgment and post-
judgment interest and a broad permanent injunction against future infringement
by the defendants. Defendants were not granted a license to use the Company's
L-arm technology. With this payment, both the Company and the defendants
withdrew their appeals, and the judgment, therefore, became a final judgment.
During the year ended April 30, 1995, Vulcan reached an agreement to settle
its patent infringement litigation against another towing equipment
manufacturer. As part of the settlement, Vulcan received $600,000 in cash from
the manufacturer in June 1995.
9. INCOME TAXES
Deferred tax assets and liabilities are determined based on the differences
between the financial and tax bases of existing assets and liabilities using
the currently enacted tax rates in effect for the year in which the
differences are expected to reverse.
The provision for income taxes consisted of the following for 1997, 1996,
and 1995 (in thousands):
<TABLE>
<CAPTION>
1997 1996 1995
------ ------ ------
<S> <C> <C> <C>
Current:
Federal........................................... $7,973 $4,041 $3,045
State............................................. 938 570 551
Foreign........................................... 228 124 0
------ ------ ------
9,139 4,735 3,596
------ ------ ------
Deferred:
Federal........................................... (612) 388 112
State............................................. (72) (11) 28
Foreign........................................... (19) (4) 0
------ ------ ------
(703) 373 140
------ ------ ------
$8,436 $5,108 $3,736
====== ====== ======
</TABLE>
F-13
<PAGE>
MILLER INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
The principal differences between the federal statutory tax rate and the
consolidated effective tax rate for 1997, 1996, and 1995 were as follows:
<TABLE>
<CAPTION>
1997 1996 1995
---- ---- ----
<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
Effect of S corporations acquired........................ (3.1) (1.7) (2.5)
Other.................................................... 1.8 (0.2) (2.2)
---- ---- ----
Effective tax rate....................................... 36.7% 36.1% 33.3%
==== ==== ====
</TABLE>
Deferred income taxes and liabilities for 1997 and 1996 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, 1997 and 1996 are as follows (in thousands):
<TABLE>
<CAPTION>
1997 1996
------ -----
<S> <C> <C>
Deferred tax assets:
Allowance for doubtful accounts............................ $ 621 $ 245
Accruals and reserves...................................... 4,105 1,149
Inventory and related reserves............................. 185 25
Tax credit carryforwards................................... 0 127
Other...................................................... 12 74
------ -----
Total deferred tax assets................................ 4,923 1,620
------ -----
Deferred tax liabilities:
Property, plant, and equipment............................. 2,060 998
Other...................................................... 182 7
------ -----
Total deferred tax liabilities........................... 2,242 1,005
------ -----
Net deferred tax asset....................................... $2,681 $ 615
====== =====
</TABLE>
In management's opinion, the net deferred tax asset will be realized through
the recognition of taxable income in future periods.
10. SALE OF FINANCE RECEIVABLES
In April 1997, the Company entered into an agreement to sell certain finance
receivables to a third party leasing company for $24,596,000. The resulting
gain on the sale did not have a material impact on the Company's financial
statements.
The agreement contingently obligates the Company to indemnify the leasing
company for any losses it incurs up to specified amounts in the event the
lessee defaults. The Company believes that any equipment returned as a result
of lessee defaults could be sold to third parties at amounts approximating the
debt obligations under the lease. The Company's aggregate potential liability
under the agreement as of April 30, 1997 was $6,280,000. Management believes
its reserves for such recourse provisions are adequate to cover its exposures
under the agreement. No payments have been required under these arrangements
to date.
11. 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.
F-14
<PAGE>
MILLER INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
12. EMPLOYEE BENEFIT PLAN
During 1996, the Company established a contributory retirement plan (the
"401(k) Plan") for all full-time employees with at least 90 days 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 33.33% of the first 3% 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 1997.
13. SEGMENT INFORMATION
The Company operates in two principal industry segments: (i) manufacturing
and distribution and (ii) towing services.
<TABLE>
<CAPTION>
MANUFACTURING TOWING
AND DISTRIBUTION SERVICES CONSOLIDATED
---------------- -------- ------------
<S> <C> <C> <C>
1997
Net sales $254,977 $37,417 $292,394
Operating earnings.................. 21,200 2,377 23,577
Interest expense (income), net...... (271) 891 620
Earnings before income taxes and
extraordinary gain.................. 21,471 1,486 22,957
Depreciation and amortization....... 2,983 2,799 5,782
Capital expenditures................ 7,996 3,077 11,073
Identifiable assets................. 149,740 65,557 215,297
1996
Net sales 163,810 16,653 180,463
Operating earnings.................. 12,903 1,441 14,344
Interest expense, net............... 31 178 209
Earnings before income taxes and
extraordinary item.................. 12,747 1,388 14,135
Depreciation and amortization....... 1,259 1,503 2,762
Capital expenditures................ 7,246 3,161 10,407
Identifiable assets................. 114,054 9,924 123,978
1995
Net sales 125,899 13,880 139,779
Operating earnings.................. 10,016 1,574 11,590
Interest expense, net............... 228 142 370
Earnings before income taxes and
extraordinary item.................. 9,788 1,432 11,220
Depreciation and amortization....... 781 1,236 2,017
Capital expenditures................ 2,100 1,932 4,032
Identifiable assets................. 58,989 7,029 66,018
</TABLE>
F-15
<PAGE>
MILLER INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
14. FAIR VALUE OF 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 values of long-term obligations is a reasonable estimate of their
fair values based on the rates available for obligations with similar terms
and maturities.
15. QUARTERLY FINANCIAL INFORMATION
The following is a summary of the unaudited quarterly financial information
for the years ended April 30, 1997 and 1996 (in thousands, except per share
data):
<TABLE>
<CAPTION>
INCOME PER
COMMON SHARE
INCOME BEFORE BEFORE
EXTRAORDINARY EXTRAORDINARY NET INCOME
NET SALES ITEM ITEM NET INCOME PER SHARE
--------- ------------- ------------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Year ended April 30,
1997:
First quarter......... $ 60,963 2,857 $0.07 $ 2,857 $0.07
Second quarter........ 74,061 3,516 0.09 3,516 0.09
Third quarter......... 80,261 3,852 0.09 3,852 0.09
Fourth quarter........ 77,109 4,296 0.10 4,296 0.10
-------- ------- ----- ------- -----
Total............... $292,394 $14,521 $0.35 $14,521 $0.35
======== ======= ===== ======= =====
Year ended April 30,
1996:
First quarter......... $ 40,463 $ 1,591 $0.05 $ 1,591 $0.05
Second quarter........ 43,720 2,268 0.07 2,268 0.07
Third quarter......... 45,979 2,436 0.07 2,436 0.07
Fourth quarter........ 50,301 2,732 0.07 2,732 0.07
-------- ------- ----- ------- -----
Total............... $180,463 $ 9,027 $0.26 $ 9,027 $0.26
======== ======= ===== ======= =====
</TABLE>
16. RECLASSIFICATIONS
Certain reclassifications have been made to prior years' financial
information to conform with the 1997 presentation.
F-16
<PAGE>
NO DEALER, SALESPERSON OR
OTHER PERSON HAS BEEN
AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN 5,000,000 SHARES
THOSE CONTAINED IN THIS
PROSPECTUS IN CONNECTION WITH
THE OFFER MADE HEREBY. IF
GIVEN OR MADE, SUCH
INFORMATION AND
REPRESENTATIONS MUST NOT BE
RELIED UPON AS HAVING BEEN MILLER INDUSTRIES, INC.
AUTHORIZED BY THE COMPANY.
THIS PROSPECTUS DOES NOT
CONSTITUTE AN OFFER TO SELL OR
SOLICITATION OF AN OFFER TO
BUY ANY OF THE SECURITIES
OFFERED HEREBY IN ANY
JURISDICTION TO ANY PERSON TO
WHOM IT IS UNLAWFUL TO MAKE
SUCH OFFER IN SUCH
JURISDICTION. NEITHER THE
DELIVERY OF THIS PROSPECTUS COMMON STOCK
NOR ANY SALE MADE HEREUNDER AT
ANY TIME SHALL UNDER ANY
CIRCUMSTANCES CREATE ANY
IMPLICATION THAT THE
INFORMATION HEREIN IS CORRECT
AT ANY TIME AFTER THE DATE
HEREOF.
___________________________
______________________
PROSPECTUS
TABLE OF CONTENTS ___________________________
Page
----
Available Information . 3
Incorporation of Certain
Information by Reference3
Forward-Looking Statements4
Risk Factors . . . . . 4 SEPTEMBER __, 1997
Business . . . . . . . 7
Use of Proceeds . . . . 17
Market for Registrant's Common
Equity
and Related Stockholder
Matters . . . . . . . . 17
Selected
Financial Data . . . . 18
Management's Discussion and
Analysis
of Financial Conditions and
Results of
Operations . . . . . 20
Legal Matters . . . . . 23
Experts . . . . . . . . 23
Index to Consolidated
Financial
Statements . . . . . 24
______________________
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Tennessee Business Corporation Act (the "TBCA")
authorizes corporations to limit or eliminate the personal
liability of directors to corporations and their shareholders for
monetary damages for breaches of certain of the directors'
fiduciary duties. In general, the duty of care requires that a
director exercise his judgment in good faith on an informed
basis, and in a manner he reasonably believes to be in the best
interests of the corporation. Absent the limitations now
authorized by the TBCA, directors are accountable to corporations
and their shareholders for monetary damages only for conduct
constituting gross negligence in the exercise of their duty of
care. Although the statute does not change the directors' duty
of care, it enables corporations to limit available relief to
equitable remedies such as injunction or rescission.
The Charter of the Company limits the liability of
directors (in their capacity as directors but not in their
capacity as officers) to the Company or its shareholders to the
fullest extent permitted by the laws of the State of Tennessee,
as so amended. Specifically, a director of the Company will not
be personally liable to the Company or its shareholders for
monetary damages for breach of such director fiduciary duty as a
director, except for liability for (i) any breach of the
director's duty of loyalty, (ii) any acts or omissions not in
good faith or which involve intentional misconduct or a knowing
violation of law, (iii) unlawful distributions, or (iv) receipt
of an improper personal benefit. The Charter provides that if
the TBCA is amended to authorize corporate action further
eliminating or limiting the personal liability of directors, then
the liability of a director of a corporation will be eliminated
or limited to the fullest extent permitted by the law, as so
amended.
The inclusion of this provision in the Charter may have the
effect of reducing the likelihood of derivative litigation
against directors and may discourage or deter shareholders or
management from bringing a lawsuit against directors for breach
of their duty of care, even though such an action, if successful,
might otherwise have benefited the Company and its shareholders.
II-1
<PAGE>
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
The following exhibits are filed as part of this
Registration Statement:
1. Financial Statements
(a) The following documents are filed as part of this Report:
<TABLE>
<CAPTION>
PAGE NUMBER
DESCRIPTION IN REPORT
- - ----------- -----------
<S> <C>
Report of Independent Public Accountants.......................... F-1
Consolidated Balance Sheets as of April 30, 1997 and 1996......... F-2
Consolidated Statements of Income for the years ended April 30,
1997, 1996, and 1995............................................. F-3
Consolidated Statements of Shareholders' Equity for the years
ended April 30, 1997, 1996, and 1995............................. F-4
Consolidated Statements of Cash Flows for the years ended April
30, 1997, 1996, and 1995......................................... F-5
Notes to Consolidated Financial Statements........................ F-6
</TABLE>
2. 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 EXHIBIT
REGISTRATION OR FILE FORM OR DATE OF NUMBER IN
DESCRIPTION NUMBER REPORT REPORT REPORT
------------------------------- -------------------- -------- ------------- ---------
<C> <S> <C> <C> <C> <C>
3.1 Charter of the -- Form 10K July 29, 1997 3.1
Registrant
3.2 Bylaws of the Registrant 33-79430 S-1 August 1994 3.2
5.1 Opinion of Kilpatrick Stockton
LLP *
10.1 Settlement Letter dated 33-79430 S-1 August 1994 10.7
April 27, 1994 between
Miller Group, Inc. and
the Management Group
10.5 Participants Agreement 33-79430 S-1 August 1994 10.11
dated as of April 30,
1994 between the
Registrant, Century
Holdings, Inc., Century
Wrecker Corporation,
William G. Miller and
certain former
shareholders of Miller
Group, Inc.
</TABLE>
II-2<PAGE>
<TABLE>
<CAPTION>
INCORPORATED BY
REFERENCE TO FORM EXHIBIT
REGISTRATION OR FILE OR DATE OF NUMBER IN
DESCRIPTION NUMBER REPORT REPORT REPORT
------------------------------- -------------------- ------ ----------- ---------
<C> <S> <C> <C> <C> <C>
10.20 Technology Transfer 33-79430 S-1 August 1994 10.26
Agreement dated March
21, 1991 between Miller
Group, Inc., Verducci,
Inc. and Jack Verducci
10.21 Form of Noncompetition 33-79430 S-1 August 1994 10.28
Agreement between the
Registrant and certain
officers of the
Registrant
10.22 Form of Nonexclusive 33-79430 S-1 August 1994 10.31
Distributor Agreement
10.23 Loan Agreement dated as 33-79430 S-1 August 1994 10.35
of June 28, 1994 among
NationsBank of
Tennessee, N.A., the
Registrant and certain
subsidiaries of the
Registrant
10.24 $15 million Revolving 33-79430 S-1 August 1994 10.36
Line of Credit Note
dated as of June 28,
1994 from the Registrant
to NationsBank of
Tennessee, N.A.
10.25 Form of Guaranty 33-79430 S-1 August 1994 10.37
Agreement among
NationsBank of
Tennessee, N.A., and
certain subsidiaries of
the Registrant dated as
of June 28, 1994
10.26 Negative Pledge 33-79430 S-1 August 1994 10.38
Agreement dated as of
June 28, 1994 among
NationsBank of
Tennessee, N.A., the
Registrant and certain
subsidiaries of the
Registrant
10.27 Miller Industries, Inc. 33-79430 S-1 August 1994 10.1
Stock Option and
Incentive Plan**
10.28 Form of Incentive Stock 33-79430 S-1 August 1994 10.2
Option Agreement**
10.29 Miller Industries, Inc. 33-79430 S-1 August 1994 10.3
Cash Bonus Plan**
10.30 Miller Industries, Inc. 33-79430 S-1 August 1994 10.4
Non-Employee Director
Stock Option Plan**
10.31 Form of Director Stock 33-79430 S-1 August 1994 10.5
Option Agreement**
</TABLE>
II-3<PAGE>
<TABLE>
<CAPTION>
INCORPORATED BY
REFERENCE TO EXHIBIT
REGISTRATION OR FILE FORM OR NUMBER IN
DESCRIPTION NUMBER REPORT DATE OF REPORT REPORT
------------------------------- -------------------- --------- -------------- ---------
<C> <S> <C> <C> <C> <C>
10.32 Form of Amended and 33-79430 S-1 August 1994 10.6
Restated Settlement and
Restriction Agreement
dated as of April 27,
1994 between Miller
Group, Inc., Century
Holdings, 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")
10.33 Employment Agreement 33-79430 S-1 August 1994 10.29
dated October 14, 1993
between Century Wrecker
Corporation and Jeffrey
I. Badgley
10.35 First Amendment to 33-79430 S-1 August 1994 10.33
Employment Agreement
between Century Wrecker
Corporation and Jeffrey
I. Badgley**
10.37 Form of Employment -- Form 10-K April 30, 1995 10.37
Agreement between
Registrant and each of
Messrs. Madonia and
Mish**
10.38 First Amendment to -- Form 10-K April 30, 1995 10.38
Miller Industries, Inc.
Non-Employee Director
Stock Option Plan**
10.39 Second Amendment to -- Form 10-K April 30, 1996 10.39
Miller Industries, Inc.
Non-Employee Director
Stock Option Plan**
10.40 Second Amendment to -- Form 10-K April 30, 1996 10.40
Miller Industries, Inc.
Stock Option and
Incentive Plan**
10.41 Stock Purchase Agreement 33-99888 S-1 December 1995 10.1
dated November 1, 1995
between Jean and Monique
Georges, S.A. Lohr and
Miller Industries
International, Inc.
</TABLE>
II-4
<PAGE>
<TABLE>
<CAPTION>
INCORPORATED BY
REFERENCE TO EXHIBIT
REGISTRATION OR FILE FORM OR NUMBER IN
DESCRIPTION NUMBER REPORT DATE OF REPORT REPORT
------------------------------- -------------------- --------- -------------- ---------
<C> <S> <C> <C> <C> <C>
10.42 Renewal and Modification 33-99888 S-1 December 1995 10.33
of Revolving Line of
Credit Note dated
December 29, 1995
10.43 Third Amended Loan 33-99888 S-1 December 1995 10.34
Agreement and Amendment
to Guaranty Agreement
Among NationsBank of
Tennessee, N.A., the
Registrant and certain
subsidiaries of
Registrant dated
December 29, 1995
10.44 Guaranty Agreement by 33-99888 S-1 December 1995 10.35
and between Miller
Industries
International, Inc. and
NationsBank of
Tennessee, N.A. dated
December 29, 1995
10.45 Fourth Amended Loan -- Form 10-K July 29, 1997 10.45
Agreement among
Nationsbank of
Tennessee, N.A. the
Registrant and certain
subsidiaries of the
Registrant dated June
28, 1994
10.46 Fifth Amendment to Loan -- Form 10-K July 29, 1997 10.46
Agreement and Amendment
to Guaranty Agreements
Among NationsBank of
Tennessee, N.A., the
Registrant and certain
subsidiaries of
Registrant dated April
30, 1997
10.47 Second Renewal and -- Form 10-K July 29, 1997 10.47
Modification of
Revolving Line of Credit
Note dated April 30,
1997
10.48 Amended Negative Pledge -- Form 10-K July 29, 1997 10.48
Agreement Among
NationsBank of
Tennessee, N.A., the
Registrant and certain
subsidiaries of
Registrant dated April
30, 1997
</TABLE>
II-5
<PAGE>
<TABLE>
<CAPTION>
INCORPORATED BY
REFERENCE TO EXHIBIT
REGISTRATION OR FILE FORM OR DATE OF NUMBER IN
DESCRIPTION NUMBER REPORT REPORT REPORT
---------------------------- -------------------- --------- ------------- ---------
<C> <S> <C> <C> <C> <C>
22 Subsidiaries of the -- Form 10-K July 29, 1997 22
Registrant
23.1Consent of Arthur *
Andersen LLP
23.2 Consent of Kilpatrick
Stockton LLP (included
in Exhibit 5.1) *
24 Power of Attorney (included *
in Exhibit 5.1)
</TABLE>
- --------
* Filed herewith.
** Management contract or compensatory plan or arrangement
(b) The Registrant hereby files as exhibits to this Report the exhibits set
forth in Item 21(a)2 hereof.
II-6
<PAGE>
ITEM 22. UNDERTAKINGS.
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or
sales are being made, a post-effective amendment to this
Registration Statement:
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the Registration
Statement (or the most recent post-effective amendment
thereof) which individually or in the aggregate represent
a fundamental change in the information set forth in this
Registration Statement. Notwithstanding the foregoing,
any increase or decrease in the volume of securities
offered (if the total dollar value of securities offered
would not exceed that which is registered) and any
deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule
424(b) if, in the aggregate, the changes in volume and
price represent no more than a 20 percent change in the
maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective
registration statement;
(iii) To include any material information with
respect to the plan of distribution not previously
disclosed in this Registration Statement or any material
change to such information in this Registration
Statement;
Provided, however, that paragraphs (i) and (ii) above
do not apply if the information required to be included in a
post-effective amendment by those paragraphs is contained in
periodic reports filed by the Registrant pursuant to Section
13 or Section 15(d) of the Securities Exchange Act of 1934
that are incorporated by reference in this Registration
Statement.
(2) That, for the purpose of determining any liability
under the Securities Act of 1933, each such post-effective
amendment shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering
of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(3) To remove from registration by means of a post-
effective amendment any of the securities being registered
which remain unsold at the termination of the offering.
(b) The undersigned Registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act of
1933, each filing of the Registrant's annual report pursuant to
Section 13(a) or Section 15(d) of the Securities Exchange Act of
1934 (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to section 15(d) of the Securities
II-7
<PAGE>
Exchange Act of 1934) that is incorporated by reference in this
Registration Statement shall be deemed to be a new Registration
Statement relating to the securities offered therein and the
offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising
under the Securities Act of 1933 may be permitted to directors,
officers and controlling persons of the Registrant pursuant to
the foregoing provisions, or otherwise, the Registrant has been
advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities
(other than the payment by the Registrant of expenses incurred or
paid by a director, officer or controlling person of the
Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the
Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in
the Act and will be governed by the final adjudication of such
issue.
(d) The undersigned registrant hereby undertakes to respond
to requests for information that is incorporated by reference
into the prospectus pursuant to Items 4, 10(b), 11, or 13 of Form
S-4, within one business day of receipt of such request, and to
send the incorporated documents by first class mail or other
equally prompt means. This includes information contained in
documents filed subsequent to the effective date of the
registration statement through the date of responding to the
request.
(e) The undersigned registrant hereby undertakes to supply
by means of a post-effective amendment all information concerning
a transaction, and the company being acquired involved therein,
that was not the subject of and included in the registration
statement when it became effective.
II-8
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
as amended, the Registrant has duly caused this Registration
Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Chattanooga, State of
Tennessee, on August 28, 1997.
MILLER INDUSTRIES, INC.
By: /s/ Jeffrey I. Badgley
Jeffrey I. Badgley
President and Co-Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose
signature appears below constitutes and appoints Jeffrey I.
Badgley and Adam L. Dunayer, jointly and severally, his attorneys-
in-fact, each with power of substitution for him in any and all
capacities, to sign any amendments to this Registration
Statement, and to file the same, with the exhibits thereto, and
other documents in connection therewith, with the Securities and
Exchange Commission hereby ratifying and confirming all that each
of said attorneys-in-fact, or his substitute or substitutes, may
do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933,
as amended, this Registration Statement has been signed by the
following persons in the capacities indicated on the 28th day of
August, 1997.
Signature Title
- --------- -----
/s/ WILLIAM G. MILLER Chairman of the Board of Directors
William G. Miller and Co-Chief Executive Officer
/s/ JEFFREY I. BADGLEY President, Co-Chief Executive Officer,
Jeffrey I. Badgley and Director (Principal Executive Officer)
/s/ ADAM L. DUNAYER Vice President, Treasurer and
Adam L. Dunayer Chief Financial Officer
(Principal Financial and
Accounting Officer)
/s/ A. RUSSELL CHANDLER, III Director
A. Russell Chandler, III
II-9
<PAGE>
/S/ PAUL E. DRACK Director
Paul E. Drack
/S/ STEPHEN A. FURBACHER Director
Stephen A. Furbacher
/s/ RICHARD H. ROBERTS Director
Richard H. Roberts
II-10
<PAGE>
Exhibit Index
<TABLE>
<CAPTION>
INCORPORATED BY
REFERENCE TO EXHIBIT
REGISTRATION OR FILE FORM OR DATE OF NUMBER IN
DESCRIPTION NUMBER REPORT REPORT REPORT
------------------------------- -------------------- -------- ------------- ---------
<C> <S> <C> <C> <C> <C>
3.1 Charter of the -- Form 10K July 29, 1997 3.1
Registrant
3.2 Bylaws of the Registrant 33-79430 S-1 August 1994 3.2
5.1 Opinion of Kilpatrick Stockton
LLP *
10.1 Settlement Letter dated 33-79430 S-1 August 1994 10.7
April 27, 1994 between
Miller Group, Inc. and
the Management Group
10.5 Participants Agreement 33-79430 S-1 August 1994 10.11
dated as of April 30,
1994 between the
Registrant, Century
Holdings, Inc., Century
Wrecker Corporation,
William G. Miller and
certain former
shareholders of Miller
Group, Inc.
10.20 Technology Transfer 33-79430 S-1 August 1994 10.26
Agreement dated March
21, 1991 between Miller
Group, Inc., Verducci,
Inc. and Jack Verducci
/TABLE
<PAGE>
<TABLE>
<CAPTION>
INCORPORATED BY
REFERENCE TO FORM EXHIBIT
REGISTRATION OR FILE OR DATE OF NUMBER IN
DESCRIPTION NUMBER REPORT REPORT REPORT
------------------------------- -------------------- ------ ----------- ---------
<C> <S> <C> <C> <C> <C>
10.21 Form of Noncompetition 33-79430 S-1 August 1994 10.28
Agreement between the
Registrant and certain
officers of the
Registrant
10.22 Form of Nonexclusive 33-79430 S-1 August 1994 10.31
Distributor Agreement
10.23 Loan Agreement dated as 33-79430 S-1 August 1994 10.35
of June 28, 1994 among
NationsBank of
Tennessee, N.A., the
Registrant and certain
subsidiaries of the
Registrant
10.24 $15 million Revolving 33-79430 S-1 August 1994 10.36
Line of Credit Note
dated as of June 28,
1994 from the Registrant
to NationsBank of
Tennessee, N.A.
10.25 Form of Guaranty 33-79430 S-1 August 1994 10.37
Agreement among
NationsBank of
Tennessee, N.A., and
certain subsidiaries of
the Registrant dated as
of June 28, 1994
10.26 Negative Pledge 33-79430 S-1 August 1994 10.38
Agreement dated as of
June 28, 1994 among
NationsBank of
Tennessee, N.A., the
Registrant and certain
subsidiaries of the
Registrant
10.27 Miller Industries, Inc. 33-79430 S-1 August 1994 10.1
Stock Option and
Incentive Plan**
10.28 Form of Incentive Stock 33-79430 S-1 August 1994 10.2
Option Agreement**
10.29 Miller Industries, Inc. 33-79430 S-1 August 1994 10.3
Cash Bonus Plan**
10.30 Miller Industries, Inc. 33-79430 S-1 August 1994 10.4
Non-Employee Director
Stock Option Plan**
10.31 Form of Director Stock 33-79430 S-1 August 1994 10.5
Option Agreement**
10.32 Form of Amended and 33-79430 S-1 August 1994 10.6
Restated Settlement and
Restriction Agreement
dated as of April 27,
1994 between Miller
Group, Inc., Century
Holdings, 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")
10.33 Employment Agreement 33-79430 S-1 August 1994 10.29
dated October 14, 1993
between Century Wrecker
Corporation and Jeffrey
I. Badgley
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
INCORPORATED BY
REFERENCE TO EXHIBIT
REGISTRATION OR FILE FORM OR NUMBER IN
DESCRIPTION NUMBER REPORT DATE OF REPORT REPORT
------------------------------- -------------------- --------- -------------- ---------
<C> <S> <C> <C> <C> <C>
10.35 First Amendment to 33-79430 S-1 August 1994 10.33
Employment Agreement
between Century Wrecker
Corporation and Jeffrey
I. Badgley**
10.37 Form of Employment -- Form 10-K April 30, 1995 10.37
Agreement between
Registrant and each of
Messrs. Madonia and
Mish**
10.38 First Amendment to -- Form 10-K April 30, 1995 10.38
Miller Industries, Inc.
Non-Employee Director
Stock Option Plan**
10.39 Second Amendment to -- Form 10-K April 30, 1996 10.39
Miller Industries, Inc.
Non-Employee Director
Stock Option Plan**
10.40 Second Amendment to -- Form 10-K April 30, 1996 10.40
Miller Industries, Inc.
Stock Option and
Incentive Plan**
10.41 Stock Purchase Agreement 33-99888 S-1 December 1995 10.1
dated November 1, 1995
between Jean and Monique
Georges, S.A. Lohr and
Miller Industries
International, Inc.
10.42 Renewal and Modification 33-99888 S-1 December 1995 10.33
of Revolving Line of
Credit Note dated
December 29, 1995
10.43 Third Amended Loan 33-99888 S-1 December 1995 10.34
Agreement and Amendment
to Guaranty Agreement
Among NationsBank of
Tennessee, N.A., the
Registrant and certain
subsidiaries of
Registrant dated
December 29, 1995
10.44 Guaranty Agreement by 33-99888 S-1 December 1995 10.35
and between Miller
Industries
International, Inc. and
NationsBank of
Tennessee, N.A. dated
December 29, 1995
10.45 Fourth Amended Loan -- Form 10-K July 29, 1997 10.45
Agreement among
Nationsbank of
Tennessee, N.A. the
Registrant and certain
subsidiaries of the
Registrant dated June
28, 1994
10.46 Fifth Amendment to Loan -- Form 10-K July 29, 1997 10.46
Agreement and Amendment
to Guaranty Agreements
Among NationsBank of
Tennessee, N.A., the
Registrant and certain
subsidiaries of
Registrant dated April
30, 1997
10.47 Second Renewal and -- Form 10-K July 29, 1997 10.47
Modification of
Revolving Line of Credit
Note dated April 30,
1997
10.48 Amended Negative Pledge -- Form 10-K July 29, 1997 10.48
Agreement Among
NationsBank of
Tennessee, N.A., the
Registrant and certain
subsidiaries of
Registrant dated April
30, 1997
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
INCORPORATED BY
REFERENCE TO EXHIBIT
REGISTRATION OR FILE FORM OR DATE OF NUMBER IN
DESCRIPTION NUMBER REPORT REPORT REPORT
---------------------------- -------------------- --------- ------------- ---------
<C> <S> <C> <C> <C> <C>
22 Subsidiaries of the -- Form 10-K July 29, 1997 22
Registrant
23.1Consent of Arthur *
Andersen LLP
23.2 Consent of Kilpatrick
Stockton LLP (included
in Exhibit 5.1) *
24 Power of Attorney (included *
in Exhibit 5.1)
</TABLE>
- --------
* Filed herewith.
** Management contract or compensatory plan or arrangement
(b) The Registrant hereby files as exhibits to this Report the exhibits set
forth in Item 21(a)2 hereof.
KILPATRICK STOCKTON, LLP
Attorneys at Law
Suite 2800
1100 Peachtree Street
Atlanta, Georgia 30309-4530
Telephone: 404.815.6500
Facsimile: 404.815.6555
E-mail: [email protected]
August 29, 1997
Direct Dial: 404.815.6444
Miller Industries, Inc.
3220 Pointe Parkway
Suite 100
Norcross, Georgia 30092
Re: Form S-4 Registration Statement
Gentlemen:
At your request, we have acted as counsel for Miller
Industries, Inc., a Tennessee corporation (the "Company"), in the
preparation of a Registration Statement on Form S-4 (the
"Registration Statement") relating to 5,000,000 shares of Common
Stock, $0.01 par value per share, of the Company (the "Common
Stock"), which may be offered for sale and issued by the Company
from time to time in connection with future acquisitions of the
assets or securities of businesses or properties in such amounts,
at such prices and on such terms as will be determined at the
time of each such transaction.
As your counsel, and in connection with the preparation
of the Registration Statement, we have examined the originals or
copies of such documents, corporate records, certificates of
public officials, officers of the Company and other instruments
relating to the authorization and issuance of the Common Stock as
we deemed relevant or necessary for the opinions herein
expressed. On the basis of the foregoing, it is our opinion that
the shares of the Common Stock to be issued pursuant to the
Registration Statement will be validly issued, fully paid and
nonassessable, upon issuance, delivery and sale in the manner and
under the terms and conditions described in the Registration
Statement, and upon approval by the Company's Board of Directors
of the terms and conditions of each acquisition of a business
pursuant to which such shares will be issued.
We hereby consent to the filing of this opinion as an
exhibit to the Registration Statement and further consent to the
use of our name wherever appearing in the Registration Statement,
including the Prospectus constituting a part thereof, and any
amendments thereto.
Sincerely,
KILPATRICK STOCKTON LLP
By: /s/ David A. Stockton
David A. Stockton, a partner
Exhibit 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTS
As independent public accountants, we hereby consent to the use or
incorporation by reference in this registration statement of our
reports dated July 15, 1997 included in Miller Industries, Inc.
Form 10-K for the year ended April 30, 1997 and to all references
to our Firm included in this registration statement.
/s/ Arthur Andersen LLP
ARTHUR ANDERSEN LLP
Chattanooga, Tennessee
August 26, 1997
