avatar Miller Industries, Inc. Manufacturing
  • Location: Tennessee 
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    2020 Annual Report


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    TO OUR SHAREHOLDERS April 16, 2021 The global COVID-19 pandemic provided several challenges for our Company, but it also created opportunities for our business to learn and grow. We believe our organization did so by rising to the occasion during 2020 and we are now better positioned to deliver for our shareholders in 2021 and beyond. 2020 had a meaningful impact on our customers, suppliers, and employees as we navigated through the global COVID-19 pandemic. That being said, Miller Industries continued to operate as an essential business throughout the year and we are incredibly proud of the perseverance of our employees as they continued to deliver the critical tools to keep America’s roadways clear throughout the pandemic. While COVID-19 significantly impacted our performance during the year, we remained focused on the aspects of the business within our control. We were able to identify and successfully mitigate operating expenses in our business, which led to a modest gross margin expansion despite the decline in our top-line sales. Further, our strong financial position allowed us to continue investing in our business as evidenced by the repurposing of our Greeneville, Tennessee facility to mitigate future supplier constraints as well as the completion of phase one of our enterprise software system upgrades. In addition to the operational improvements we made during the year, we also took significant measures to strengthen our balance sheet. We preemptively drew $25 million from our existing credit facility in the first quarter to bolster our liquidity position at the onset of the pandemic. By the end of our third quarter, we fully repaid those obligations and eliminated all long-term debt obligations from our balance sheet. As we move into 2021, we are well positioned to continue investing in the business and to capture growth opportunities as we emerge from this crisis. Despite the challenging environment and its material impact on our business, we remained committed to returning capital to shareholders with the declaration of our 41st consecutive quarterly dividend, which includes payments of $0.72 per share during each of the last four years. As we enter 2021, the lingering effects of the pandemic will continue to weigh on our business in the near term. However, we are confident that we will begin to see the benefits of the operational improvements and cost reductions we implemented during 2020. As America continues to heal, Miller Industries is well positioned to capitalize on future growth opportunities in the new year.


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    In closing, we would like to extend our sincerest thanks to our employees, customers, suppliers, and shareholders for their ongoing support of Miller Industries as we work to build on our industry-leading product portfolio and best-in-class customer service. Jeffrey I. Badgley William G. Miller, II Deborah L. Whitmire Co-Chief Executive Officer Co-Chief Executive Officer Chief Financial Officer


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    UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K (Mark One) ց ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2020 OR տ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File No. 001-14124 MILLER INDUSTRIES, INC. (Exact name of registrant as specified in its charter) Tennessee 62-1566286 (State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.) 8503 Hilltop Drive, Ooltewah, Tennessee 37363 (Address of principal executive offices) (Zip Code) (423) 238-4171 (Registrant’s telephone number, including area code) Securities registered pursuant to Section 12(b) of the Act: Title of Each Class Trading Symbol(s) Name of Each Exchange on Which Registered Common Stock, par value $.01 per share MLR New York Stock Exchange Securities registered pursuant to Section 12(g) of the Act: None (Title of Class) Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes _ No Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes _ No Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. _ Yes No Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). _ Yes No Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act: Large Accelerated Filer Accelerated Filer ց Non-accelerated Filer Smaller Reporting Company տ Emerging Growth Company տ If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. _ Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). տ Yes _ No The aggregate market value of the voting stock held by non-affiliates of the registrant (which for purposes hereof are all holders other than executive officers, directors and holders of more than 10% of the registrant’s Common Stock) as of June 30, 2020 (the last business day of the registrant’s most recently completed second fiscal quarter) was $287,430,630 (based on 9,655,043 shares held by non-affiliates at $29.77 per share, the last sale price reported on the New York Stock Exchange on June 30, 2020). At February 26, 2021 there were 11,410,728 shares of the registrant’s common stock, par value $0.01 per share, outstanding. DOCUMENTS INCORPORATED BY REFERENCE The information called for by Part III (Items 10, 11, 12, 13 and 14) is incorporated herein by reference to the Registrant’s definitive proxy statement for its 2021 Annual Meeting of Shareholders which is to be filed pursuant to Regulation 14A.


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    TABLE OF CONTENTS PART I ITEM 1. BUSINESS 3 ITEM 1A. RISK FACTORS 10 ITEM 1B UNRESOLVED STAFF COMMENTS 17 ITEM 2. PROPERTIES 17 ITEM 3. LEGAL PROCEEDINGS 18 ITEM 4. MINE SAFETY DISCLOSURES 18 PART II ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES 19 ITEM 6. SELECTED FINANCIAL DATA 20 ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 21 ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 30 ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA 30 ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE 30 ITEM 9A. CONTROLS AND PROCEDURES 31 ITEM 9B. OTHER INFORMATION 33 PART III ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE 33 ITEM 11. EXECUTIVE COMPENSATION 33 ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS 33 ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE 33 ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES 33 PART IV ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES 33 ITEM 16. FORM OF 10-K SUMMARY 36


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    CERTAIN FACTORS AFFECTING FORWARD-LOOKING STATEMENTS Certain statements in this Annual Report on Form 10-K, including but not limited to statements made in Part II–Item 7– “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” statements made with respect to future operating results, expectations of future customer orders and the availability of resources necessary for our business may be deemed to be forward- looking statements, as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by the use of words such as “may,” “will,” “should,” “could,” “continue,” “future,” “potential,” “believe,” “project,” “plan,” “intend,” “seek,” “estimate,” “predict,” “expect,” “anticipate” and similar expressions, or the negative of such terms, or other comparable terminology. Forward-looking statements also include the assumptions underlying or relating to any of the foregoing statements. Such forward-looking statements are made based on our management’s beliefs as well as assumptions made by, and information currently available to, our management. Our actual results may differ materially from the results anticipated in these forward-looking statements due to, among other things: x the overall impact of the COVID-19 pandemic on the Company’s revenues, results of operations and financial condition; x the duration and severity of the COVID-19 pandemic, including actions that may be taken by government authorities and others to address or otherwise mitigate the impact of the COVID-19 pandemic; x the cyclical nature of our industry and changes in consumer confidence; x economic and market conditions, including the negative impacts of the COVID-19 pandemic on global economies and the Company’s customers, suppliers and employees; x our dependence upon outside suppliers for our raw materials, including aluminum, steel, and petroleum-related products as well as other purchased component parts; x changes in price and availability (including as a result of the imposition of additional tariffs and the impact of COVID-19 pandemic) of aluminum, steel, petroleum-related products and purchased component parts; x delays in receiving supplies of such materials or parts, including as a result of the impact of the COVID-19 pandemic; x our customers’ access to capital and credit to fund purchases; x operational challenges caused by increased sales volumes in recent years, prior to the COVID-19 pandemic; x various political, economic and other uncertainties relating to our international operations, including restrictive taxation and foreign currency fluctuation; x special risks from our sales to U.S. and other governmental entities through prime contractors; x our ability to secure new government orders; x changes in fuel and other transportation costs, insurance costs and weather conditions; x changes in government regulations; x failure to comply with domestic and foreign anti-corruption laws; x competition in our industry and our ability to attract or retain customers; x our ability to develop or acquire proprietary products and technology; 1


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    x assertions against us relating to intellectual property rights; x problems hiring or retaining skilled labor; x a disruption in, or breach in security of, our information technology systems or any violation of data protection laws; x changes in the tax regimes and related government policies and regulations in the countries in which we operate; x the effects of regulations relating to conflict minerals; x the catastrophic loss of one of our manufacturing facilities; x environmental and health and safety liabilities and requirements; x loss of the services of our key executives; x product warranty or product liability claims in excess of our insurance coverage; x potential recalls of components or parts manufactured for us by suppliers or potential recalls of defective products; x an inability to acquire insurance at commercially reasonable rates; x and those other risks referenced herein, including those risks referred to in this report, in Part I, Item 1A–“Risk Factors” and those risks discussed in our filings with the Securities and Exchange Commission filed after this Annual Report. Such factors are not exclusive. We do not undertake to update any forward-looking statement that may be made from time to time by, or on behalf of, the Company. 2


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    PART I ITEM 1. BUSINESS General Miller Industries is The World’s Largest Manufacturer of Towing and Recovery Equipment®, with executive offices in Ooltewah, Tennessee, domestic manufacturing operations in Tennessee and Pennsylvania, and foreign manufacturing operations in France and the United Kingdom. In 1990, we began developing or acquiring several of the most well-recognized brands in the towing and recovery equipment manufacturing industry. Our strategy has been to diversify our line of products and increase our presence in the industry through internal growth and development, while remaining open to opportunities for acquisitions of complementary products. In this Annual Report on Form 10-K, the words “Miller Industries,” the “Company,” “we,” “our,” “ours” and “us” refer to Miller Industries, Inc. and its subsidiaries or any of them. Towing and Recovery Equipment We offer a broad range of towing and recovery equipment products that meet most customer design, capacity and cost requirements. We manufacture the bodies of wreckers and car carriers, which are installed on truck chassis manufactured by third parties. We frequently purchase the truck chassis for integration with our towing and recovery equipment and resale to our customers. Wreckers generally are used to recover and tow disabled vehicles and other equipment and range in type from the conventional tow truck to large recovery vehicles with rotating hydraulic booms and up to 100-ton lifting capacities. Car carriers are specialized flatbed vehicles with hydraulic tilt mechanisms that enable a towing operator to drive or winch a vehicle onto the bed for transport. Car carriers transport new or disabled vehicles and other equipment and are particularly effective over longer distances. We also manufacture vehicle transport trailers. Our products primarily are sold through independent distributors that serve all 50 states, Canada and Mexico, and other foreign markets including Europe, the Pacific Rim, the Middle East, South America and Africa, and through prime contractors to governmental entities. Additionally, as a result of our ownership of Jige International S.A. in France and Boniface Engineering, Ltd. in the United Kingdom, we have substantial distribution capabilities in Europe. While most of our distributor agreements do not generally contain exclusivity provisions, management believes that more than 85% of our independent distributors do not offer products of any other towing and recovery equipment manufacturer, which we believe is a testament to their loyalty to our brands. In addition to selling our products to towing operators, our independent distributors provide them with parts and service. We also utilize sales representatives to inform prospective end-users about our current product lines in an effort to drive sales to independent distributors. Management believes the strength of our distribution network and the breadth and quality of our product offerings are two key advantages over our competitors. Product Lines We manufacture a broad line of wrecker, car carrier and trailer bodies to meet a full range of customer design, capacity and cost requirements. Wreckers. Wreckers are generally used to recover and tow disabled vehicles and other equipment and range in type from the conventional tow truck to large recovery vehicles with up to 100-ton lifting capacities. Wreckers are available with specialized features, including underlifts, L-arms, crossbars and scoops, which lift disabled vehicles by the tires or front axle to minimize front end damage to the towed vehicles. Certain heavy-duty wrecker models offer rotating booms, which allow heavy-duty wreckers to recover vehicles from any angle, and remote control devices for recovery equipment. In addition, certain light-duty wreckers are equipped with automatic wheel- lift hookup devices that allow operators to engage a disabled or unattended vehicle without leaving the cab of the wrecker. Our wreckers range in capacity from 4 to 100 tons, and are classified as either light-duty or heavy-duty, with wreckers of 16-ton or greater capacity being classified as heavy-duty. Light-duty wreckers are used to remove vehicles from accident scenes and vehicles illegally parked, abandoned or disabled, and for general recovery. Heavy-duty wreckers are used in towing and recovery applications including overturned tractor trailers, buses, motor homes and other large vehicles. 3


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    Car Carriers. Car carriers are specialized flat-bed vehicles with hydraulic tilt mechanisms that enable a towing operator to drive or winch a vehicle onto the bed for transport. Car carriers are used to transport new or disabled vehicles and other equipment and are particularly effective for transporting vehicles or other equipment over longer distances. In addition to transporting vehicles, car carriers may also be used for other purposes, including transportation of industrial equipment. Most professional towing operators have car carriers in their fleets to complement their towing capabilities. Transport Trailers. Our multi-vehicle transport trailers are specialized auto transport trailers with upper and lower decks and hydraulic ramps for loading vehicles. These trailers are used for moving multiple vehicles for auto auctions, car dealerships, leasing companies and other similar applications. These trailers are easy to load and transport 6 to 7 vehicles. The vehicles can be secured to transport quickly with ratchet and chain tie-downs that are mounted throughout the frame of the transport trailer. Many professional towing operators have added auto transport trailers to their fleets to add to their service offerings. Brand Names We manufacture and market our wreckers, car carriers and trailers under ten separate brand names. Although certain brands overlap in terms of features, prices and distributors, each brand has its own distinctive image and customer base. Century®. The Century® brand is our “top-of-the-line” brand and represents what management believes to be the broadest product line in the industry. The Century® line was started in 1974 and produces wreckers ranging from 8-ton light-duty to 100-ton heavy-duty models, and car carriers in lengths from 20 to 30 feet. Management believes that the Century® brand has a reputation as the industry’s leading product innovator. Vulcan®. Our Vulcan® product line includes a range of premium light-duty and heavy-duty wreckers, ranging from 8-ton light-duty to 75-ton heavy-duty models, and car carriers. Challenger®. Our Challenger® products compete with the Century® and Vulcan® products and constitute a third premium product line. Challenger® products consist of heavy-duty wreckers with capacities ranging from 25 to 75 tons. The Challenger® line was started in 1975 and is known for high-performance heavy-duty wreckers and aesthetic design. Holmes®. Our Holmes® product line includes mid-priced wreckers with 4 to 16-ton capacities, a 16-ton rotator and a detachable towing unit (DTU). The Holmes® wrecker was first produced in 1916. Historically, the Holmes® name has been the most well-recognized and leading industry brand both domestically and internationally. Champion®. The Champion® brand, which was introduced in 1991, includes car carriers which range in length from 19 to 21 feet. The Champion® product line, which is generally lower-priced, allows us to offer a full line of car carriers at various competitive price points. Chevron™. Our Chevron™ product line is comprised primarily of premium car carriers. Chevron™ produces a range of premium single-car, multi-car and industrial carriers, as well as wreckers ranging from 8-ton to 16-ton models. Eagle®. Our Eagle® products consist of light-duty wreckers with the “Eagle Claw®” hook-up system that allows towing operators to engage a disabled or unattended vehicle without leaving the cab of the tow truck. The “Eagle Claw®” hook-up system was originally developed for the repossession market. Since acquiring Eagle, we have upgraded the quality and features of the Eagle® product line and expanded its recovery capability. Titan®. Our Titan® product line is comprised of premium multi-vehicle transport trailers which can transport up to 7 vehicles depending on configuration. Jige™. Our Jige™ product line is comprised of a broad line of premium light-duty and heavy-duty wreckers and car carriers marketed primarily in Europe. Jige™ is a market leader best known for its innovative designs of car carriers and light-duty wreckers necessary to operate within the narrow confines of European cities, as well as heavy-duty wreckers. Boniface™. Our Boniface™ product line is comprised predominantly of premium heavy-duty wreckers marketed primarily in Europe. Boniface™ produces heavy-duty wreckers specializing in the long underlift technology required to tow modern European tour buses. 4


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    Product Development and Manufacturing Product Innovation and Manufacturing Process Improvements We have a long history of innovation in our products and manufacturing processes based on advanced technologies. Our Holmes® and Century® brand names are associated with four of the major innovations in the industry: the rapid reverse winch; the tow sling; the hydraulic lifting mechanism; and the underlift with parallel linkage and L-arms. Our engineering department currently consists of over 50 engineers who, in consultation with manufacturing personnel, use sophisticated computer-aided design and stress analysis systems to test new product designs and to integrate various product improvements. In addition to licensing new technologies, we have a continuing emphasis on research and development to achieve product innovations. We opened our free-standing research and development (R&D) facility in Chattanooga, Tennessee in 2019, where we are pursuing various innovations in our products and improvements in our manufacturing processes, some of which are intended to enhance the safety of our employees and reduce the environmental impact of both our manufacturing processes and the products we manufacture. These efforts led to our newest product, the M100, which was introduced in the fall of 2019 and that we believe to be the world’s largest tow truck. We manufacture wreckers, car carriers and trailers at six manufacturing facilities located in the United States, France and the United Kingdom. The manufacturing process for our products consists primarily of cutting and bending sheet steel or aluminum into parts that are welded together to form the wrecker, car carrier body or trailer. In addition, during the past several years, we have also begun to produce wrecker bodies using composites and other non-metallic materials, which reduces the overall vehicle weight and increases fuel efficiency. After the frame is formed, components such as hydraulic cylinders, winches, valves and pumps, which are purchased by us from third-party suppliers, are attached to the frame to form the completed wrecker or car carrier body. The completed body is either installed by us or shipped by common carrier to a distributor where it is then installed on a truck chassis. Generally, the wrecker or car carrier bodies are painted, and towing operators can select customized colors to coordinate with chassis colors or customer fleet colors. To the extent final painting is required before delivery, we either complete such painting or contract with independent paint shops for such services. Expansion and Modernization of Domestic Production Facilities All of our domestic facilities have undergone substantial expansion and modernization projects during the period 2016 to 2020, as we have invested over $97 million on property, plant and equipment over this five-year period, including approximately $25 million on our Pennsylvania consolidation and expansion project and approximately $29 million on building and equipment improvements at our two Tennessee locations. These projects not only increased our production capacity, but also included installing sophisticated robotics and implementing other advanced technologies to optimize our manufacturing processes, enhance the safety of our employees and reduce our environmental impact. Reducing the Environmental Impacts of our Domestic Production Facilities We strive to conduct our operations in a manner that protects our employees, to comply with all applicable laws and regulations, and to reduce the environmental impacts of our manufacturing operations. The modernization projects at all our domestic facilities in the last few years included many environmentally-friendly upgrades, such as the installation of air filtration equipment that removes airborne contaminants like smoke, dust, pollen and dander to improve the air quality at our production facilities. As part of these projects, we also transitioned from oil-based primers to water-based primers in our domestic painting operations, to reduce volatile organic compounds (VOC) emissions into the environment and make our workplace safer for our employees. At the same time, we upgraded the lighting at all of our domestic production facilities to LED lighting, which has the benefit of reducing electric consumption while also increasing visibility for our employees. In addition, we are currently in the process of acquiring a nitrogen generator, which would have the effect of minimizing the environmental impacts of transporting nitrogen gas to our domestic facilities. We continue to look for new ways to promote sustainable and environmentally friendly practices at our production facilities to reduce energy-usage, increase recycling and decrease waste. Company Suppliers We purchase raw materials and component parts from several sources. Although we have no long-term supply contracts, management believes we have good relationships with our primary suppliers. In recent years prices have fluctuated significantly, but we have experienced no significant problems in obtaining adequate supplies of raw materials and component parts to meet the requirements of our production schedules. Management believes that the materials used in the production of our products are available at competitive prices from an adequate number of alternative suppliers. Accordingly, management does not believe that the loss of a single supplier would have 5


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    a material adverse effect on our business. We are continuing to closely monitor the COVID-19 pandemic and the further impacts it may have on the Company’s supply chain and operations. Sales, Distribution and Marketing The industry categorizes the towing and recovery market into three general product types: light-duty wreckers; heavy-duty wreckers; and car carriers. The light-duty wrecker market consists primarily of professional wrecker operators, repossession towing services, local and national governmental entities and repair shop or salvage company owners. The heavy-duty market includes professional wrecker operators serving the needs of commercial vehicle operators as well as governmental entities. The car carrier market has expanded to include equipment rental companies that offer delivery service and professional towing operators who desire to complement their existing towing capabilities. We sell our products to a diverse network of independent distributors, consisting of approximately 80 distributors in North America, who serve all 50 states, Canada and Mexico, and numerous distributors that serve other foreign markets. These distributors then sell our products to the end-users. In 2020, no single distributor accounted for more than 10% of our sales. Management believes our broad and diverse network of distributors provides us with the flexibility to adapt to market changes, lessens our dependence on particular distributors and reduces the impact of regional economic factors. Our distributor network has been stable for many years, with a large majority of our distributors having been engaged to sell our products for more than 10 years, and many for more than 25 years. We believe this distributor loyalty results primarily from our high quality and innovative products and our emphasis on customer service. These long-standing relations give our distributors a deep knowledge of our products and our corporate culture, allowing them to effectively promote our products to end-users. While we do not impose exclusivity requirements on our distributors, we believe that more than 85% of our independent distributors do not offer products of any other towing and recovery equipment manufacturer, which we believe is a testament to their loyalty to our brands. We engage sales representatives who provide sales support to our entire network of independent distributors. Sales representatives receive commissions on direct sales based on product type and brand and generally are assigned specific territories in which to promote sales of our products and to maintain customer relationships. To support sales and marketing efforts, we produce demonstrator models that are used by our sales representatives and independent distributors. In addition to providing services to our network of independent distributors, our sales representatives sell our products to various governmental entities, including the U.S. federal government and foreign governments, through prime contractors. We routinely respond to requests for proposals or bid invitations in consultation with our local distributors. Our products have been selected by the United States General Services Administration as an approved source for certain federal and defense agencies. We intend to continue to pursue federal, state and local government and foreign government contracting opportunities. The towing and recovery equipment industry places heavy marketing emphasis on product exhibitions at national, regional and international trade shows. To focus our marketing efforts and to control marketing costs, we concentrate our efforts on the major trade shows each year, and we work with our network of independent distributors to concentrate on various regional shows. Although attendance at trade shows has been suspended during the current pandemic, we expect to resume our active participation in these shows when conditions allow. Product Warranties and Insurance We generally offer a 12-month limited manufacturer’s product and service warranty on our wrecker and car carrier products. Our warranty generally provides for repair or replacement of failed parts or components. Our independent distributor customers regularly perform any needed warranty repair work themselves, rather than shipping products back to us, and then invoice us for the cost of the parts and labor. Management believes that we maintain adequate general liability and product liability insurance. Backlog We produce virtually all of our products to order. Our backlog is based upon customer purchase orders that we believe are firm. The level of backlog at any particular time, however, may not be an appropriate indicator of our future operating performance. Certain purchase orders may be subject to cancellation by the customer upon notification. Given our production and delivery schedules, management believes that the current backlog represents approximately five months of production. 6


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    Competition The towing and recovery equipment manufacturing industry is highly competitive for sales to distributors and towing operators. Management believes that competition in our industry focuses on product quality and innovation, reputation, technology, customer service, product availability and price. We compete on the basis of each of these criteria, with an emphasis on product quality and innovation and customer service. Management also believes that a manufacturer’s relationship with distributors is a key component of success in the industry. Accordingly, we have invested substantial resources and management time in building and maintaining strong relationships with distributors. Management also believes that our products are regarded as high quality within their particular price points. Our marketing strategy is to continue to compete primarily on the basis of quality and reputation rather than solely on the basis of price, and to continue to target the growing group of professional towing operators who as end-users recognize the quality of our products. Traditionally, the capital requirements for entry into the towing and recovery manufacturing industry have been relatively low. Management believes a manufacturer’s capital resources and access to technological improvements have become a more integral component of success in recent years. Certain of our competitors may have greater financial and other resources and may provide more attractive dealer and retail customer financing alternatives than we do. Human Capital We employed approximately 1,280 people as of December 31, 2020. Part-time employees represent less than 2% of our total employees. None of our employees are covered by a collective bargaining agreement, though our employees in France and the United Kingdom have certain similar rights provided by their respective government’s employment regulations. We consider our employee relations to be good. Our company culture is based on treating others the way we would like to be treated and we strive to foster a work environment that is inclusive, fair and engaged. In addition, our Code of Business Conduct and Ethics is intended to reinforce our core values of respect, integrity, collaboration, innovation, trust, and excellence throughout our operations. Employee Development/Training We provide training programs that address skills shortages in our workforce, foster career development, and encourage proper use of technology and resources. These include our Welding School that teaches employees how to read blueprints, interpret weld symbols, and learn welding technique. In addition, Miller University One and Two were created to develop high potential employees for future leadership roles in the company, and provide change management, decision making, and problem-solving skills to future leaders of our Company. We have also established a tuition reimbursement program for continuing education, including undergraduate and graduate degrees or certifications and licenses relevant to the business. Competitive Pay and Employee Benefits We invest in our employees through high-quality benefits and various health and wellness initiatives, competitive compensation packages and fair compensation practices. For example, we periodically perform compensation studies to ensure competitive pay rates for our employees. In addition, we provide a variety of benefits including but not limited to comprehensive medical coverage, short and long term disability, life insurance, wellness screening, dental coverage, paid time off incentive programs, an employee assistance program, access to telehealth services, and a U.S. 401(k) plan with a Company match. Occupational Health and Safety We seek to provide a healthy and safe workplace. The modernization projects at all our domestic facilities in the last few years included many advanced health and safety features, such as the installation of air filtration equipment that removes airborne contaminants like smoke, dust, pollen and dander to improve the air quality at our production facilities. As part of these projects and upgrades, we also transitioned from oil-based primers to water-based primers in our domestic painting operations to reduce total volatile organic compounds emissions and make our workplace safer for our employees. We also upgraded the lighting at our facilities to LED lighting, which has the benefit of reducing electric consumption while also increasing visibility for our employees. We have established a safety committee to implement and monitor our various safety programs. We are continually striving to better our workplace safety record and our five-year 7


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    trend on workplace accidents reflects substantial improvement in this area. We are committed to fostering a diverse workforce and an inclusive environment. The ongoing COVID-19 pandemic has led to unique challenges, and we are striving to ensure the health, safety and general well- being of our employees. We have made and continue to make what we believe to be appropriate modifications to our operations because of COVID-19 to allow us to protect our employees while operating all our facilities consistent with applicable governmental guidelines and orders. We have been rotating our workforce every four days, and have designated periods of non-production time for sanitation efforts, and have adjusted work schedules to maximize our capacity while adhering to recommended precautions such as social distancing, and have established and implemented remote work provisions where possible. We have also instituted travel restrictions according to recommended guidelines. As part of our ongoing safety measures, we may also decide to temporarily suspend operations to clean and disinfect areas within our facilities, as needed to protect our employees. We enacted such limited suspensions from time to time at certain of our domestic facilities during 2020. Employee Engagement The Company’s management team promotes an “open door” environment in which all feedback and suggestions are welcome. We have invested substantial time and resources in recent years to optimize the engagement, productivity and safety of our workforce, which we believe is the foundation upon which we can maintain our competitive advantages in product quality and customer service. For example, we hired an employee engagement specialist who is dedicated to communicating with our employees. We also actively monitor the satisfaction and engagement of our workforce, including through periodic employee surveys conducted by third-party experts. Intellectual Property Rights Our development of the underlift parallel linkage and L-arms was at the time considered one of the most innovative developments in the wrecker industry. This technology continues to be significant primarily because it allows the damage-free towing of aerodynamic vehicles made of lighter weight materials. This technology, particularly the L-arms, is still used in a majority of commercial wreckers today. Our patents on the L-arm have expired, but we hold a number of utility and design patents for our products. We have also obtained the rights to use and develop certain technologies owned or patented by others. Management believes that, during the life of our patents on our technology, utilizing our patented technology without a license would be an infringement of such patents. Our trademarks “M®” (stylized), “Miller Industries®” (with stylized “M”), “Century®,” “Holmes®,” “Champion®,” “Challenger®,” “Pro Star®,” “Street Runner®,” “Vulcan®,” “Right Approach®” and “Extreme Angle®,” among others, are registered with the United States Patent and Trademark Office. Management believes that our trademarks are well-recognized by dealers, distributors and end-users in their respective markets and are associated with a high level of quality and value. Government Regulations and Environmental Matters We strive to manufacture our products in a way that minimizes environmental impact and maximizes worker health and safety. Our operations are subject to federal, state and local laws and regulations relating to the generation, storage, handling, emission, transportation and discharge of materials into the environment. Management believes that we are in substantial compliance with all applicable federal, state and local provisions relating to the protection of the environment. The costs of complying with environmental protection laws and regulations have not had a material adverse impact on our financial condition or results of operations in the past. We act as a subcontractor for certain U.S. and other government programs. As a result, we are subject to extensive regulations and requirements of the U.S. and other government agencies and entities that govern these programs, including with respect to the award, administration and performance of contracts under such programs. We are also subject to various federal, state and non-U.S. laws and regulations related to privacy, data protection and cybersecurity, including the European Union's General Data Protection Regulation ("GDPR"), which became effective in May 2018. In addition, California’s Consumer Privacy Act came into effect on January 1, 2020, and enforcement began on July 1, 2020. Many other states are also attempting to enact privacy laws that may impact us in the future. We are also subject to the additional diligence and disclosure requirements adopted by the Securities and Exchange Commission (the “SEC”) related to certain minerals sourced from the Democratic Republic of Congo or adjoining countries in connection with the Dodd- 8


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    Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”). The SEC rules impose these obligations with respect to “conflict minerals,” defined as tin, tantalum, tungsten and gold, which are necessary to the functionality of a product manufactured, or contracted to be manufactured, by an SEC reporting company. If any “conflict minerals” that are necessary to the functionality of a product manufactured by an SEC reporting company originated in the Democratic Republic of Congo or an adjoining country, the rules require the issuer to prepare and file a report addressing its efforts to exercise due diligence on the source of such “conflict minerals” and their chain of custody. In addition to the SEC regulation, the European Union adopted new requirements for European Union importers of conflict minerals, which went into effect on January 1, 2021, and that may impact and increase the cost of our conflict minerals compliance program. We are also subject to the Magnuson-Moss Warranty Federal Trade Commission Improvement Act which regulates the description of warranties on products. The description and substance of our warranties are also subject to a variety of federal, state and foreign laws and regulations applicable to the manufacturing of vehicle components. Management believes that continued compliance with various government regulations will not materially affect our operations. Information About Our Executive Officers Information relating to our executive officers as of February 28, 2021 is set forth below. William G. Miller, II is the son of William G. Miller. Other than Messrs. Miller and Miller II, there are no family relationships among the executive officers, directors or nominees for director, nor are there any arrangements or understandings between any of the executive officers and any other persons pursuant to which they were selected as executive officers. Name Age Position William G. Miller 74 Chairman of the Board Jeffrey I. Badgley 68 Co-Chief Executive Officer William G. Miller, II 42 President and Co-Chief Executive Officer Frank Madonia 72 Executive Vice President, Secretary and General Counsel Deborah L. Whitmire 55 Executive Vice President, Chief Financial Officer and Treasurer Josias W. Reyneke 64 Chief Information Officer William G. Miller has served as Chairman of the Board since April 1994. Mr. Miller served as President and Chief Executive Officer from 1994 to 1996 and as Chief Executive Officer from 1996 to 1997. Mr. Miller also served as Co-Chief Executive Officer from October 2003 to March 2011. Mr. Miller served as Chairman and President of Miller Group from 1990 to 1993 and as Chairman and CEO of Miller Group from 1993 to 1994. Prior to 1987, Mr. Miller served in various management positions for Bendix Corporation, Neptune International Corporation, Wheelabrator-Frye, Inc. and The Signal Companies, Inc. Jeffrey I. Badgley has served as our Co-Chief Executive Officer since December 2013. Prior to serving as Co-Chief Executive officer, Mr. Badgley served in various executive positions, including Vice President (1994 – 1996), President (1996 – 2011), Chief Executive Officer (1997 – 2003; 2011 – 2013), and Co-Chief Executive Officer (2003 – 2011). In addition, Mr. Badgley served as a director from 1996 to 2014 and as Vice Chairman of the Board from 2011 to 2014. Mr. Badgley also served as Vice President to Miller Industries Towing Equipment Inc. from 1988 to 1996 and has been their President since 1996. William G. Miller, II has served as a director since May 2014, our Co-Chief Executive Officer since December 2013 and President since March 2011, after serving as a Regional Vice President of Sales of Miller Industries Towing Equipment Inc. from November 2009 to February 2011. Mr. Miller II served as Vice President of Strategic Planning of the Company from October 2007 until November 2009. Mr. Miller II served as Light-Duty General Manager from November 2004 to October 2007 and as a Sales Representative of Miller Industries Towing Equipment Inc. from 2002 to 2004. Frank Madonia has served as our Executive Vice President, Secretary and General Counsel since September 1998. From April 1994 to September 1998 Mr. Madonia served as our Vice President, General Counsel and Secretary. Mr. Madonia served as Secretary and General 9


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    Counsel to Miller Industries Towing Equipment Inc. since its acquisition by Miller Group in 1990. From July 1987 through April 1994, Mr. Madonia served as Vice President, General Counsel and Secretary of Flow Measurement. Prior to 1987, Mr. Madonia served in various legal and management positions for United States Steel Corporation, Neptune International Corporation, Wheelabrator-Frye, Inc. and The Signal Companies, Inc. Deborah L. Whitmire has served as a director since February 2020, our Executive Vice President, Chief Financial Officer and Treasurer since January 2017, after serving as our Vice President and Corporate Controller from January 2014 to December 2016 and Corporate Controller to Miller Industries Towing Equipment Inc. from March 2005 to January 2014. From April 2000 to March 2005, she also served as Director of Finance – Manufacturing to Miller Industries Towing Equipment Inc. In addition, she served as Controller to Miller Industries Towing Equipment Inc. from October 1997 to April 2000 and Accounting Manager to Miller Industries Towing Equipment Inc. from October 1996 to October 1997. Josias W. Reyneke has served as our Chief Information Officer since January 2017, after serving as our Vice President of Operations to Miller Industries Towing Equipment Inc. from July 2011 to December 2016. From 2002 to 2011, Mr. Reyneke served as Director of Management Information Systems and Materials of Miller Industries Towing Equipment Inc. Mr. Reyneke joined Miller Industries Towing Equipment Inc. as a consultant in 1997 to assist with the implementation of an enterprise resource planning system and was subsequently offered the position of Director of Management Information Systems in 1998, a position he held until 2002. Prior to 1998, Mr. Reyneke also served in various management positions for SE Technologies, Wheels of Africa and Toyota South Africa. Available Information We file annual, quarterly and current reports and other information with the SEC. The SEC maintains a website at www.sec.gov that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC. Our Internet website address is www.millerind.com. We make available free of charge through our website our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, and amendments to those reports, as soon as reasonably practicable after we file them with, or furnish them to, the Securities and Exchange Commission. Information contained on our website is not part of this Annual Report on Form 10-K or our other filings with the SEC. Our Corporate Governance Guidelines, Code of Business Conduct and Ethics and the charters of the Audit, Compensation and Nominating Committees of the Board of Directors are also available on our website. ITEM 1A. RISK FACTORS There are many factors that affect our business and the results of our operations, some of which are beyond our control. The following is a description of all known material risks that may cause the actual results of our operations in future periods to differ materially from those currently expected or desired. We encourage you to read this section carefully. Risks Relating to Our Operations The continuing COVID-19 pandemic may adversely affect our revenues, results of operations and financial condition. The U.S. and other countries are experiencing outbreaks of COVID-19, which is continuing to spread to areas where we, our customers, our suppliers and our end users do business. The outbreak has resulted in governments around the world implementing at times stringent measures to help control the spread of the virus, including quarantines, “shelter in place” and “stay at home” orders, travel restrictions, business curtailments, school closures, and other measures. We are considered a critical infrastructure industry, as defined by the U.S. Department of Homeland Security, and were thus exempt from state and local business closure orders that were previously in effect in states where we have manufacturing facilities. However, as the pandemic continues, business closure orders may be implemented or reinstated in states or localities that experience a rebound or surge in COVID-19 cases, including as a result of new variants of the virus that may be more transmissible or virulent, and those orders may not include the same exemptions. Other organizations, businesses and individuals are taking additional steps to avoid or reduce infection, including limiting travel and staying home from work. These measures taken to curb the spread of COVID-19 are disrupting normal business operations both in and outside of affected areas, including our business operations. 10


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    We have made and continue to make what we believe to be appropriate modifications to our operations because of COVID-19 to allow us to protect our employees while operating all our facilities consistent with applicable governmental guidelines and orders. We continue to monitor government recommendations impacting our operations and may need to enact further precautionary measures to help minimize the risk of our employees being exposed to COVID-19, which could have a further adverse impact on our plant production levels. As part of our ongoing safety measures, we may also decide to temporarily suspend operations to clean and disinfect areas within our facilities, as needed to protect our employees, which may have an adverse impact on our plant productivity. We enacted such limited suspensions from time to time at certain of our domestic facilities during 2020. The businesses of towing and recovery equipment operators have been disrupted and they have limited and may continue to limit spending as a result of COVID-19, which could negatively impact their willingness to purchase new equipment from us or our independent distributors, and ultimately adversely affect our revenues. We have seen order cancellations and softening of demand, which could worsen depending on the duration, spread, and severity of the pandemic. The cancellation of major industry shows and events has also reduced our ability to meet with existing and potential new customers to market our products. Additionally, global economic disruptions such as the COVID-19 pandemic could negatively impact our supply chain and cause delays in the delivery of chassis, raw materials, components and other supplies that we need to manufacture our products. During the COVID- 19 pandemic, we have had material curtailments of new chassis deliveries due to shutdowns and production slowdowns at our suppliers’ facilities. During the second quarter, most of these facilities were operating at a reduced capacity, but by the end of the third quarter were operating at levels sufficient to meet our requirements. However, these decreased production levels could recur, and if so, could cause substantial decreases to our revenues and results of operations. The COVID-19 pandemic had a material adverse impact on our financial results and business operations in the second, third and fourth quarters of 2020, and economic and health conditions in the United States and across most of the globe continue to change dramatically from day to day as a result of the COVID-19 pandemic. The future impact of the COVID-19 pandemic on our operations is unknown and will depend on future developments, which are highly uncertain and cannot be predicted with confidence, including the duration of the outbreak, new information which may emerge concerning the severity of the COVID-19 pandemic, the emergence of new strains of the virus and any future resurgences of COVID-19 or variant strains, the timing of our chassis and other suppliers resuming normal shipment levels, the effect of the pandemic on spending levels of towing and recovery equipment operators, and any additional preventative and protective actions that governments, or we or other businesses, may direct, which may result in an extended period of continued business disruption and reduced operations. Any resulting financial impact cannot be reasonably estimated at this time but should be anticipated to have a material adverse impact on our business, financial condition and results of operations. Even after the COVID-19 pandemic has subsided, we may experience materially adverse impacts to our business due to any resulting economic recession or depression, or to a general reduction in miles driven on roadways due to a decrease in travel. Our business is subject to the cyclical nature of our industry and changes in consumer confidence and in economic conditions in general, including the negative impacts of the COVID-19 pandemic on global economies. Adverse changes or continued uncertainty with respect to these factors may lead to a downturn in our business. The towing and recovery industry is cyclical in nature. In recent years, the overall demand for our products and resulting revenues have been positively affected by recovering economic conditions and improving consumer sentiment. However, historically, the overall demand for our products and our resulting revenues have at times been negatively affected by wavering levels of consumer confidence, volatility and disruption in domestic and international capital and credit markets and the resulting decrease in the availability of financing for our customers and towing operators and the overall effects of global economic conditions. We remain concerned about the potential effects of these factors on the towing and recovery industry, and we continue to monitor our overall cost structure to see that it remains in line with business conditions. A prolonged economic downturn, including as a result of the continuing COVID-19 pandemic, political unrest, terrorist acts, military conflict and any other disease outbreaks, and slow or negative growth in the domestic and global economy, could have a material adverse effect on our business, financial condition and results of operations for the foreseeable future. Our dependence upon outside suppliers for our raw materials, including aluminum, steel, petroleum-related products and other purchased component parts, leaves us subject to changes in price and availability (including as a result of the imposition of additional tariffs and the impact of the COVID-19 pandemic) and delays in receiving supplies of such materials or parts. We are dependent upon outside suppliers for our raw material needs and other purchased component parts, and events beyond our control could have an adverse effect on the cost or availability of raw materials and component parts. Steel, aluminum, fuel and other 11


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    commodity prices have historically experienced high volatility depending on market conditions and global demand. Price increases or changes in payment terms from our suppliers of raw materials or component parts could impact our ability to secure necessary raw materials or component parts, or to secure such materials and parts at favorable prices. In addition, government actions related to tariffs on imports and trade policies have impacted, and have the potential to further impact, pricing of raw materials, such as steel and aluminum. For example, in 2018 the United States government imposed import tariffs and restrictions on imports for steel products and aluminum products. The Company uses a substantial amount of imported steel and aluminum in its products and experienced increases in costs for these materials as a result of the tariffs and import quotas. To partially offset price increases for raw materials and component parts, we have, from time to time, implemented general price increases and cost surcharges. While we have attempted to pass these increased costs (including as a result of tariffs and import quotas) on to our customers, there can be no assurance that we will be able to continue to do so. Any further price increases for these or any other materials that we use would require a long lead time to implement while the higher material costs would be felt much sooner. In the future, if we experience increased prices or shortages for key materials that are essential to our manufacturing operations, such as steel and aluminum (including as a result of tariffs or import quotas), there is a substantial risk that the Company’s financial performance and competitive position could be materially adversely impacted. Demand for our products also could be negatively affected by supply delays of truck chassis and other component parts used in our products. Our third party suppliers’ ability to supply us with truck chassis and component parts is limited by their available capacity to manufacture the component parts we require. We have experienced supply delays and limitations for component parts from time to time as a result of the continuing COVID-19 pandemic, and, prior to the COVID-19 pandemic, as our production levels had substantially increased over the last several years prior to the start of the pandemic. If these delays recur, continue or worsen, our customers may reduce their purchase levels with us and/or seek alternative solutions to meet their demand. At this time, we believe that sources of our raw materials and component parts will continue to be adequate to meet our requirements and that alternative sources are available. However, shortages, price increases or delays in shipments of our raw materials and component parts could have a material adverse effect on our financial performance, competitive position and reputation. Demand from our customers and towing operators is affected by the availability of capital and access to credit. The ability of our customers and of towing operators to purchase our products is affected by the availability of capital and credit to them. Our independent distributor customers rely on floor plan financing in connection with the purchase of our products, and the availability of that financing on acceptable terms has a direct effect on the volume of their purchases. Additionally, in many cases, a towing operator’s decision to purchase our products from one of our distributors is dependent upon their ability to obtain financing upon acceptable terms. Volatility and disruption in the capital and credit markets, principally in the U.S. and Europe, in the past has decreased the availability of capital to, and credit capacity of, our customers and towing operators. In addition, in the past, certain providers of floor plan financing have exited the market, which made floor plan financing increasingly difficult for our independent distributor customers to secure at those times. This reduced availability of capital and credit has negatively affected the ability and capacity of our customers and of towing operators to purchase towing and related equipment. This, in turn, has negatively impacted sales of our products. If customers are unable to access capital or credit, it could materially and adversely affect our ability to sell our products, and as a result, could negatively affect our business and operating results. Operational challenges caused by our increased sales volumes in recent years prior to the COVID-19 pandemic could result in material delays, increased costs and loss of business opportunities, which could negatively impact our operating results and financial condition. Substantially increased sales of our products over the five years prior to the COVID-19 pandemic have caused a variety of operating challenges, including supply chain constraints and production capacity limitations. The recent major additions and renovations to all our domestic production facilities have allowed us to effectively address these challenges, but they have nevertheless caused increased production costs and delayed deliveries to customers in some instances. These factors could in the future result in delay or termination of orders, the loss of sales and a negative impact on our reputation with our customers, all of which could materially adversely affect our business, financial condition and results of operations. In addition, our recent major additions and renovations to all our domestic facilities may not achieve our intended objectives of lowering costs, improving manufacturing efficiencies in an environmentally conscious way and increasing productivity, which could adversely affect our operating results and financial condition. 12


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    Our international operations are subject to various political, economic and other uncertainties that could adversely affect our business results, including by restrictive taxation or other government regulation and by foreign currency fluctuation. Historically, a portion of our net sales occur outside the United States, primarily in Europe. In addition, we have manufacturing operations at two facilities located in the Lorraine region of France and manufacturing operations in Norfolk, England. As a result, our operations are subject to various political, economic and other uncertainties, including risks of restrictive taxation policies, changing political conditions and governmental regulations and trade policies. This includes the uncertainty surrounding the United Kingdom’s exit from the European Union, commonly referred to as “Brexit,” on European and worldwide economic conditions, and on our international sales. The United Kingdom formally left the European Union on January 31, 2020. In December 2020, the United Kingdom and the European Union agreed on a trade and cooperation agreement which is being applied provisionally until it is formally ratified by the European Union parliament. The trade and cooperation agreement covers the general objectives and framework of the relationship between the United Kingdom and the European Union, including as it relates to trade, transport, visas, judicial, law enforcement and security matters, and provides for continued participation in community programs and mechanisms for dispute resolution. Notably, under the trade and cooperation agreement, United Kingdom service suppliers no longer benefit from automatic access to the entire European Union single market, United Kingdom goods no longer benefit from the free movement of goods and there is no longer the free movement of people between the United Kingdom and the European Union. In addition, there remain uncertainties surrounding Brexit and the new relationship between the United Kingdom and the European Union that will continue to be developed and defined. Brexit could adversely affect European or worldwide political, regulatory, economic or market conditions and could contribute to instability in political institutions and regulatory agencies. In addition, a portion of our net sales derived outside the United States, as well as salaries of employees located outside the United States and certain other expenses, are denominated in foreign currencies, including the British pound sterling and the euro. We are, therefore, subject to risk of financial loss resulting from fluctuations in exchange rates of these currencies against the U.S. dollar. Brexit has caused, and may continue to result in, significant volatility in global stock markets and currency exchange rate fluctuations of the U.S. dollar relative to other foreign currencies in which we conduct business, including both the British pound sterling and the euro. In addition, political unrest, terrorist acts, military conflict and disease outbreaks, including the COVID-19 pandemic, have increased the risks of doing business abroad in general. We are continuing to monitor the COVID-19 pandemic and the further impacts it may have on the Company’s supply chain and operations. Our sales to U.S. and other governmental entities through prime contractors are subject to special risks. We act as a subcontractor for certain U.S. and other government programs. As a result, we are subject to extensive regulations and requirements of the U.S. and other government agencies and entities that govern these programs, including with respect to the award, administration and performance of contracts under such programs. Our U.S. and other government business is subject to the following risks, among others: (i) this business is susceptible to changes in government spending, which may reduce future revenues; (ii) most of our contracts with governmental entities through prime contractors are fixed-price contracts, and our actual costs on any of these contracts could exceed our projected costs, (iii) competition for the award of these contracts is intense, and we may not be successful in bidding on future contracts, and (iv) the products we sell to governmental entities are subject to highly technical requirements, and any failure to comply with these requirements could result in unanticipated retrofit costs, delayed acceptance of products, late or reduced payment or cancellation of the contract. Our inability to address any of the foregoing concerns could seriously harm our business, financial condition and results of operations. We continue to be focused on efforts to secure new government orders to replace existing government projects as they are completed. Our inability to replace sales generated from government orders as they are completed would result in lower sales and have an adverse effect on our business, results of operations and financial condition. Overall demand from our customers may be affected by increases in their fuel and insurance costs and changes in weather conditions. In the past, our customers have experienced substantial increases in fuel and other transportation costs, and in the cost of insurance. Our customers also have, from time to time, been subject to unpredictable and varying weather conditions which could, among other things, impact the cost and availability of fuel and other materials. Any of these factors could negatively affect our customers’ capacity for purchasing towing and related equipment, and, consequently, have a material negative effect upon our business and operating results. 13


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    Our competitors could impede our ability to attract or retain customers. The towing and recovery equipment manufacturing industry is highly competitive. Capital requirements for entry into the towing and recovery manufacturing industry have been relatively low, which could result in an increase in the number of competitors entering the industry. Competition for sales exists domestically and internationally at the manufacturer, distributor and towing-operator levels and is based primarily on product quality and innovation, reputation, technology, customer service, product availability and price. Competition for sales also comes from the market for used towing and recovery equipment. Certain of our competitors may have substantially greater financial and other resources and may provide more attractive dealer and retail customer financing alternatives than us. If these competitors are able to make it more difficult for us to attract or retain customers, it could have a negative impact on our sales, revenue and financial performance. We depend upon skilled labor to manufacture our products, and if we experience problems hiring and retaining skilled labor, our business may be negatively affected. The timely manufacture and delivery of our products requires an adequate supply of skilled labor, and the operating costs of our manufacturing facilities can be adversely affected by high turnover in skilled positions. Accordingly, our ability to increase sales, productivity and net earnings will be limited to a degree by our ability to employ the skilled laborers necessary to meet our requirements. We must attract, train and retain skilled employees while controlling related labor costs and maintaining our core values, including safety standards. Our ability to control labor costs is subject to numerous external factors, including prevailing wage rates and increases in healthcare and other insurance costs. There can be no assurance that we will be able to maintain an adequate skilled labor force necessary to efficiently operate our facilities. In addition, while our employees are not currently members of a union, there can be no assurance that the employees at any of our facilities will not choose to become unionized in the future. The catastrophic loss of one of our manufacturing facilities could harm our business, financial condition and results of operations. While we manufacture our products in several facilities and maintain insurance covering our facilities, including business interruption insurance to mitigate losses resulting from any production interruption or shutdown caused by an insured loss, a catastrophic loss of the use of all or a portion of any one of our manufacturing facilities due to accident, labor issues, weather conditions, natural disaster, civil unrest, terrorist acts, military conflict and disease outbreaks (including the COVID-19 pandemic), or otherwise, whether short or long- term, could materially harm our business, financial condition and results of operations. Any recovery under our insurance policies may not offset the lost sales or increased costs that may be experienced during the disruption of operations. Risks Related to Legal, Regulatory and Compliance Matters Failure to comply with domestic and foreign anti-corruption laws could have an adverse effect on our business. Our international operations require us to comply with a number of U.S. and international laws and regulations, including those involving anti-bribery and anti-corruption. Failure to comply with the Foreign Corrupt Practices Act (“FCPA”), the U.K. Bribery Act, and other foreign anti-bribery laws could have an adverse effect on our business. Violations of these laws, or allegations of such violations, could result in our incurring significant fees and having fines and criminal sanctions imposed on us or our employees, and could adversely impact our business with government entities. Our future success depends upon our ability to develop or acquire proprietary products and technology and assertions against us relating to intellectual property rights could harm our business. Historically, we have been able to develop or acquire patented and other proprietary product innovations which have allowed us to produce what management believes to be technologically advanced products relative to most of our competition. While we are continuing to develop new technology and apply for patents, if we are unable to develop or acquire new products and technology in the future, our ability to maintain market share, and, consequently, our revenues and operating results, may be negatively affected. Third parties may claim that our products infringe their patents or other intellectual property rights. If a competitor were to challenge our patents, or assert that our products or processes infringe its patent or other intellectual property rights, we could incur substantial litigation costs, be forced to design around their patents, pay substantial damages or even be forced to cease our operations, any of which could be expensive and/or have an adverse effect on our operating results. Third party infringement claims, regardless of their outcome, would not 14


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    only consume our financial resources, but also would divert the time and effort of our management and could result in our customers or potential customers deferring or limiting their purchase or use of the affected products or services until resolution of the litigation. Changes in the tax regimes and related government policies and regulations in the countries in which we operate could adversely affect our results and our effective tax rate. As a result of our international operations, we are subject to various taxes in both U.S. and non-U.S. jurisdictions. Due to economic and political conditions, tax laws, regulations and rates in these various jurisdictions may be subject to significant change. Our future effective income tax rate could be affected by changes in the mix of earnings in countries with differing statutory tax rates, changes in the valuation of deferred tax assets or changes in tax laws or their interpretation. Changes to long-standing tax principles in the countries in which we operate could adversely affect our effective tax rate or result in higher cash tax liabilities. Increases in our effective tax rate or tax liabilities could have a material adverse effect on us. The effects of regulations relating to conflict minerals may adversely affect our business. In 2012, the SEC adopted rules under the Dodd-Frank Wall Street Reform and Consumer Protection Act to improve transparency and accountability concerning the supply of certain minerals, known as “conflict minerals”, originating from the Democratic Republic of Congo and adjoining countries. These rules could adversely affect the sourcing, availability and pricing of such minerals if they are found to be used in the manufacture of our products, as the number of suppliers who provide conflict-free minerals may be limited. In addition, we have incurred and expect to incur additional costs to comply with the disclosure requirements, including costs related to determining the source of any of the relevant minerals and metals used in our products. In addition to the SEC regulation, the European Union adopted new requirements for European Union importers of conflict minerals, which went into effect on January 1, 2021, and that may impact and increase the cost of our conflict minerals compliance program. The Company’s supply chain is complex. As a result, we have encountered and continue to expect significant difficulty in determining the country of origin or the source and chain of custody for all “conflict minerals” used in our products and disclosing that our products are “conflict free” (meaning that they do not contain “conflict minerals” that directly or indirectly finance or benefit armed groups in the Democratic Republic of the Congo or an adjoining country). We may face reputational challenges from customers, investors or others if we are unable to verify the origins for all “conflict minerals” used in our products. In such event, we may also face difficulties in satisfying customers who may require that all of the components of our products be certified as conflict mineral free. Environmental and health and safety liabilities and requirements could require us to incur material costs. We are subject to various U.S. and foreign laws and regulations relating to environmental protection and worker health and safety, including those governing discharges of pollutants into the ground, air and water; the generation, handling, use, storage, transportation, treatment and disposal of hazardous substances and waste materials; and the investigation and cleanup of contaminated properties. In certain cases, these regulatory requirements may limit the productive capacity of our operations. Environmental and health-related requirements are complex, subject to change and have tended to become more and more stringent. Future developments could cause us to incur various expenditures and could also subject us to fines or sanctions, obligations to investigate or remediate contamination or restore natural resources, liability for third party property damage or personal injury claims and the imposition of new permitting requirements and/or the modification or revocation of our existing operating permits, among other effects. These and other developments could materially harm our business, financial condition and results of operation. A product warranty or product liability claim in excess of our insurance coverage, or an inability to acquire or maintain insurance at commercially reasonable rates, could have a material adverse effect upon our business. We are subject to various claims, including product warranty and product liability claims arising in the ordinary course of business, and may at times be a party to various legal proceedings incidental to our business. We maintain reserves and liability insurance coverage at levels based upon commercial norms and our historical claims experience. If we manufacture poor quality products or receive defective materials, we may incur unforeseen costs in excess of what we have reserved in our financial statements. A successful product warranty, product liability or other claim brought against us in excess of our insurance coverage, or the inability of us to acquire or maintain insurance at commercially reasonable rates, could have a material adverse effect upon our business, operating results and financial condition. In addition, we are subject to potential recalls of components or parts manufactured by suppliers which we purchase and incorporate into our towing and recovery equipment products, as well as potential recalls of our products from customers to cure manufacturing defects or in the 15


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    event of a failure to comply with applicable regulatory standards or customers’ order specifications. Moreover, the adverse publicity that may result from a product liability claim, perceived or actual defect with our products or a product recall could have a material adverse effect on our ability to market our products successfully. Risks Related to Our Common Stock Our stock price may fluctuate greatly as a result of the general volatility of the stock market. From time to time, there may be significant volatility in the market price for our common stock. Our quarterly operating results, changes in earnings estimated by analysts, if any, changes in general conditions in our industry or the economy or the financial markets or other developments affecting us, including our ability to pay dividends, could cause the market price of our common stock to fluctuate substantially. Our charter and bylaws contain anti-takeover provisions that may make it more difficult or expensive to acquire us in the future or may negatively affect our stock price. Our charter and bylaws contain restrictions that may discourage other persons from attempting to acquire control of us, including, without limitation, prohibitions on shareholder action by written consent and advance notice requirements regarding amendments to certain provisions of our charter and bylaws. In addition, our charter authorizes the issuance of up to 5,000,000 shares of preferred stock. The rights and preferences for any series of preferred stock may be set by the board of directors, in its sole discretion and without shareholder approval, and the rights and preferences of any such preferred stock may be superior to those of common stock and thus may adversely affect the rights of holders of common stock. Risks Related to Indebtedness and Liquidity Our credit facility could restrict our ability to operate our business and failure to comply with its terms could adversely affect our business; our obligations to repurchase products from third-party lenders to our distributors could adversely impact our future revenues and financial condition. Our credit facility contains customary representations and warranties, events of default, and financial, affirmative and negative covenants for loan agreements of this kind. In addition, covenants under our current credit facility restrict our ability to pay cash dividends if the Company would be in violation of the minimum tangible net worth test or the leverage ratio test in the current loan agreement as a result of the dividend, among various restrictions. We have been in compliance with these covenants throughout 2020 and anticipate that we will continue to be in compliance during 2021. If we fail to comply with the requirements of our current credit facility, such non-compliance would result in an event of default. If not waived by the bank, such event of default would result in the acceleration of any amounts due under the current credit facility. We also have certain obligations to repurchase our products repossessed by third-party lenders if our distributors should default in their obligations to those lenders. Such repurchases could result in reduced net revenue in future periods as we resell such products and, if we are unable to sell the products, could adversely impact our financial condition. We cannot assure you that we will continue to declare dividends on our common stock. Our board of directors approved a dividend policy in 2011 to consider and pay quarterly dividends on our common stock subject to our ability to satisfy all applicable statutory requirements and our continued financial strength. While we currently intend to pay a quarterly dividend on shares of our common stock, to the extent that we have sufficient funds available for such purpose, the declaration, amount and payment of any future dividends on shares of common stock will be at the sole discretion of our board of directors and we may reduce or discontinue entirely the payment of such dividends at any time. Our board of directors may take into account general and economic conditions, our financial condition and operating results, capital requirements, restrictions in financing agreements and such other factors as they may deem relevant from time to time. 16


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    General Risk Factors A disruption in, or breach in security of, our information technology ("IT") systems or any violation of data protection laws could adversely impact our business and operations. We rely on the accuracy, capacity and security of our IT systems and our ability to update these systems in response to the changing needs of our business. We use our IT systems to collect and store confidential and sensitive data, including information about our business, our customers, our suppliers and our employees. We rely on IT systems to protect this information and to keep financial records, process orders, manage inventory, coordinate shipments to customers, and operate other critical functions. Our IT systems may be disrupted or fail for a number of reasons, including natural disasters, such as fires; power loss; software “bugs”, hardware defects or human error or malfeasance; or security breaches caused by hacking, computer viruses, malware, ransomware or other cyber-attacks. As technology continues to evolve, we anticipate that we will collect and store even more data in the future and that our systems will increasingly use remote communication features that are susceptible to both willful and unintentional security breaches. We have incurred costs and expect to incur significant additional costs in order to implement security measures that we feel are appropriate to protect our IT systems. Despite these efforts, future attacks could result in our systems or data being breached and/or damaged by computer viruses or unauthorized physical or electronic access. Such a breach could result in theft of our intellectual property or trade secrets and/or unauthorized access to controlled data and personal information stored in connection with our human resources function. In the event of a breach in security that allows third parties access to personal information, we are subject to a variety of ever-changing laws on a global basis that may require us to provide notification to the data owners, and that may subject us to lawsuits, fines and other means of regulatory enforcement or harm employee morale. Any disruption, outage or breach of our IT systems could result in interruption of our business operations, damage to our reputation and a loss of confidence in our security measures, all of which could adversely affect our business. In addition, if our systems are improperly implemented, breached, damaged or cease to function properly, we may have to make significant investments to fix or replace them. To the extent that any data is lost or destroyed or any confidential information is inappropriately disclosed or used, it could adversely affect our competitive position or customer relationships, harm our business and possibly lead to significant claims, liability, or fines based upon alleged breaches of contract or applicable laws. Regulators globally are also imposing greater monetary fines for privacy violations. For example, in 2016, the European Union adopted a new law governing data practices and privacy called the General Data Protection Regulation (“GDPR”), which became effective in May 2018. The law establishes new requirements regarding the handling of personal data, and non-compliance with the GDPR may result in monetary penalties of up to 4% of worldwide revenue. The GDPR and other changes in laws or regulations associated with the enhanced protection of certain types of sensitive data, such as healthcare data or other personal information, could increase our cost of providing our products and services. Any loss of the services of our key executives could have a material adverse impact on our operations. Our success is highly dependent on the continued services of our management team. The loss of services of one or more key members of our senior management team could have a material adverse effect on us. ITEM 1B. UNRESOLVED STAFF COMMENTS None. ITEM 2. PROPERTIES We operate four manufacturing facilities in the United States. The facilities are located in Ooltewah (Chattanooga), Tennessee; Hermitage, Pennsylvania; and two in Greeneville, Tennessee. The Ooltewah plant, containing approximately 309,000 square feet, produces light and heavy-duty wreckers; the Hermitage plant, containing approximately 279,000 square feet, produces car carriers; and the Greeneville plants, containing an aggregate of approximately 210,000 square feet, produces car carriers, heavy-duty wreckers and trailers. We opened our free-standing R&D facility in Chattanooga in 2019, containing an aggregate of approximately 34,000 square feet, where we are pursuing various innovations in our products and manufacturing processes. 17


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    Since 2015, the Company has modernized and expanded all of its domestic facilities. For a discussion of these capital projects, see “Executive Overview” in Item 7–“Management’s Discussion and Analysis of Financial Condition and Results of Operations,” of this Annual Report on Form 10-K. We also have two manufacturing facilities and one storage facility located in the Lorraine region of France, which have, in the aggregate, approximately 205,000 square feet, and manufacturing operations in Norfolk, England, with approximately 48,000 square feet. ITEM 3. LEGAL PROCEEDINGS We are, from time to time, a party to litigation arising in the normal course of our business. Litigation is subject to various inherent uncertainties, and it is possible that some of these matters could be resolved unfavorably to us, which could result in substantial damages against us. We have established accruals for matters that are probable and reasonably estimable and maintain product liability and other insurance that management believes to be adequate. Management believes that any liability that may ultimately result from the resolution of these matters in excess of available insurance coverage and accruals will not have a material adverse effect on our consolidated financial position or results of operations. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 18


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    PART II ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Price of and Dividends on the Registrant’s Common Equity and Related Stockholder Matters Our common stock is traded on the New York Stock Exchange under the symbol “MLR.” As of February 26, 2021, there were approximately 407 registered holders of record of our common stock. The number of record holders does not include persons who held our common stock in nominee or “street name” accounts through brokers. The Company has paid consecutive quarterly cash dividends since May 2011. For more information on dividends, see Note 7 to our Consolidated Financial Statements. Any future determination as to the payment of cash dividends will depend upon such factors as earnings, capital requirements, our financial condition, restrictions in financing agreements and other factors deemed relevant by our board of directors. Covenants under our current credit facility restrict the payment of cash dividends if the Company would be in violation of the minimum tangible net worth test or the leverage ratio test in the current loan agreement as a result of the dividend, among various other restrictions. Sales of Unregistered Securities We did not sell any unregistered securities during the year ended December 31, 2020. Performance Graph The following line graph compares the percentage change in the cumulative shareholder return of our common stock with The New York Stock Exchange Composite Index and the Standard & Poor’s Construction Machinery & Heavy Trucks Index over the period of time from December 31, 2015 through December 31, 2020. The respective returns assume reinvestment of dividends paid. 19


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    12/31/2015 12/31/2016 12/31/2017 12/31/2018 12/31/2019 12/31/2020 Miller Industries, Inc. 100 121 118 124 170 175 NYSE Composite Index 100 109 126 112 137 143 S&P Construction Machinery & Heavy Trucks Index 100 141 203 176 199 235 ITEM 6. SELECTED FINANCIAL DATA This item is no longer required as we have elected to early adopt the changes to Item 301 of Regulation S-K contained in SEC Release No. 33-10890. 20


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    ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion of our results of operations and financial condition should be read in conjunction with the Consolidated Financial Statements and Notes thereto. Unless the context indicates otherwise, all dollar amounts in this Management’s Discussion and Analysis of Financial Condition and Results of Operations are in thousands. Executive Overview Miller Industries, Inc. is The World’s Largest Manufacturer of Towing and Recovery Equipment®, with domestic manufacturing subsidiaries in Tennessee and Pennsylvania, and foreign manufacturing subsidiaries in France and the United Kingdom. We offer a broad range of equipment to meet our customers’ design, capacity and cost requirements under our Century®, Vulcan®, Challenger®, Holmes®, Champion®, Chevron™, Eagle®, Titan®, Jige™ and Boniface™ brand names. In this Item 7 – “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” the words “Miller Industries,” “the Company,” “we,” “our,” “ours” and “us” refer to Miller Industries, Inc. and its subsidiaries or any of them. Our management focuses on a variety of key indicators to monitor our overall operating and financial performance. These indicators include measurements of revenue, operating income, gross margin, net income, earnings per share, capital expenditures and cash flow. We derive revenues primarily from product sales made through our network of domestic and foreign independent distributors. Our revenues are sensitive to a variety of factors including general economic conditions as well as demand for, and price of, our products, our technological competitiveness, our reputation for providing quality products and reliable service, competition within our industry, and the cost and availability of raw materials (including aluminum, steel and petroleum-related products) and component parts. Our history of innovation in the towing and recovery industry has been an important factor behind our growth over the last decade and we believe that our continued emphasis on research and development will be a key factor in our future growth. Our domestic plant expansion and modernization projects have installed sophisticated robotics and implemented other advanced technologies to optimize our manufacturing processes. We opened our free-standing R&D facility in Chattanooga in 2019, where we pursue various innovations in our products and manufacturing processes, some of which are intended to enhance the safety of our employees and reduce our environmental impact. Our latest new product, the M100, which we believe to be the world’s largest tow truck, was introduced in the fall of 2019. All of our domestic facilities have undergone substantial expansion and modernization projects during the period 2016 to 2020, as we have invested over $97,000 on property, plant and equipment over this five-year period, including approximately $25,000 on our Pennsylvania consolidation and expansion project and approximately $29,000 on building and equipment improvements at our two Tennessee locations. These projects not only increased our production capacity, but also included installing sophisticated robotics and implementing other advanced technologies to optimize our manufacturing process. Our industry is cyclical in nature. Until the onset of the COVID-19 pandemic, the overall demand for our products and resulting revenues in recent years have been positively affected by favorable economic conditions, such as lower fuel prices, and positive consumer sentiment in our industry. However, historically, the overall demand for our products and our resulting revenues have at times been negatively affected by: x wavering levels of consumer confidence; x volatility and disruption in domestic and international capital and credit markets and the resulting decrease in the availability of financing, including floor plan financing, for our customers and towing operators; x significant periodic increases in fuel and insurance costs and their negative effect on the ability of our customers to purchase towing and related equipment; and x the overall effects of global, political, economic and health conditions. 21


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    We remain concerned about the continuing effects of these factors on the towing and recovery industry, and we continue to monitor our overall cost structure to see that it remains in line with business conditions. In addition, we have been and will continue to be affected by changes in the prices that we pay for raw materials, particularly aluminum, steel, petroleum-related products and other raw materials, which represent a substantial part of our total cost of operations. Prices in raw materials can be affected by tariffs and quantitative restrictions, such as those that were imposed by the U.S. government in 2018. Historically, we have implemented price increases on our products to offset price increases in the raw materials that we use. We also developed alternatives to some of the components used in our production process that incorporate these raw materials, and our suppliers have implemented these alternatives in the production of our component parts. We continue to monitor raw material prices and availability in order to more favorably position the Company in this dynamic market. As of December 31, 2020 and 2019, respectively, the Company owed $0 and $4,998 under its primary credit facility. Recent Developments In the first half of the first quarter of 2021, we experienced significant delays in deliveries to our distributors caused by changes we made to our legacy business processes during the implementation of our new enterprise software system as well as supply chain and weather related disruptions. The business process changes during the first half of the quarter had a significant impact on deliveries, particularly of higher margin products. Continued implementation of the software system is not expected to have this level of impact on our manufacturing processes, as they were due primarily to the initial data conversion and deployment of a newly created information framework. This framework is the foundation of our migration to a multi-tenant cloud environment which includes global ERP, human capital management, data analytics and artificial intelligence. As first mentioned in our third quarter 2019 Form 10-Q, this migration and upgrade will be done in three phases over three years and this implementation marks the successful completion of phase one of this long-term investment in our future. We expect to substantially improve our administrative efficiency and customer service levels as the full capabilities of our new software system are rolled out. The supply chain disruptions we experienced were due primarily to continued impacts from COVID-19. In addition, extreme weather conditions across parts of the U.S and tightening availability of freight trucks caused delays in delivering products to our facilities as well as to our customers. These factors along with our new software system implementation caused substantial downward pressures on our revenues, margins and earnings during the first half of the first quarter of 2021. The business process improvements critical to developing our new software system are now essentially operational, allowing our delivery schedule to return to meeting current customer demand. The supply chain issues have been greatly reduced as of this filing but could recur. Based on our strong backlog and the current status of our process improvements, we believe we have the opportunity to substantially improve our operating results in 2021 beyond the first quarter. Impact of COVID-19 The spread of the COVID-19 virus during the year ended December 31, 2020 has caused an economic downturn on a global scale, as well as significant volatility in the financial markets. We are considered a critical infrastructure industry, as defined by the U.S. Department of Homeland Security. During the month of March 2020, we enacted limited shutdowns of all of our domestic facilities to make appropriate modifications to our operations because of COVID-19, which allowed us to continue to serve our customers, while taking precautions to provide a safe work environment for our employees and customers. Since that time and through the present, we have been rotating our workforce every four days, and have designated periods of non-production time for sanitation efforts, and have adjusted work schedules to maximize our capacity while adhering to recommended precautions such as social distancing, and have established and implemented work from home provisions where possible. As part of our ongoing safety measures, we temporarily suspend operations from time to time to clean and disinfect areas within our facilities. We enacted such limited suspensions from time to time at certain of our domestic facilities during 2020. Our international operations have also been affected by various comparable requirements of governmental agencies and safety related operational adjustments. These safety modifications continue to have an adverse impact on our plant productivity, although the impact has been less severe as we have become more accustomed to working under them. We are unable to predict when we may be able to safely relax these new operating measures that were adopted as a result of the COVID-19 pandemic. In March 2020, we drew $25,000 on our existing credit facility for working capital needs and as a precautionary measure to ensure future short-term cash flow requirements were met during the heightened uncertainty resulting from the COVID-19 pandemic. However, during the year we repaid the balance in full, as our cash position was stronger than anticipated. At December 31, 2020, we had cash and cash equivalents of $57,521, which were substantially unchanged at February 26, 2021. Although our cash position is strong, we continue 22


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    to consider other steps that could be implemented to conserve liquidity in these uncertain times, including possible delays of certain capital expenditures. We have not taken any loans or grants under the Coronavirus Aid, Relief, and Economic Security Act, also referred to as the CARES Act, or other governmental programs, and have no plans to do so. While we have experienced no material disruptions in our supply of parts, components and materials due to the COVID-19 pandemic, we have had material curtailments of new chassis deliveries due to shutdowns and production slowdowns at our suppliers’ facilities during the second and third quarters of 2020. During the second quarter, most of these facilities were operating at a reduced capacity, but returned to operating at levels sufficient to meet our requirements by the end of the third quarter. We also have experienced reductions in orders for our products since the beginning of the pandemic, although demand has steadily improved since the second quarter. This depressed demand along with the decreases in deliveries of chassis caused us to temporarily shut our domestic plants in Pennsylvania and Greeneville, Tennessee for several weeks at the end of the second quarter and for the first few weeks of the third quarter. Our international plants also were adversely impacted and experienced shutdowns during the second quarter. While all of our plants have now reopened, the possibility of new shutdowns of one or more of our facilities due to the COVID-19 pandemic remains. This decrease in our production levels, coupled with our health and safety-related adjustments to operations, materially negatively impacted our revenues during the year, but also served to strengthen our current backlog of orders. Our revenues recovered substantially from the second quarter levels. However, the impacts of chassis delivery curtailments and the somewhat softened demand from towing equipment operators are still uncertain, and we are continuing to monitor these factors to determine how they might impact our future production. The impact of the COVID-19 pandemic continues to unfold and certain states and localities continue to experience surges in COVID-19 cases from time to time. The extent of the pandemic’s effect on our operational and financial performance will depend in large part on future developments, which cannot be predicted with confidence at this time. Future developments include the duration, scope and severity of the pandemic, including as a result of the emergence of new strains of the virus and any future resurgences of COVID-19 or variant strains, the actions taken to contain or mitigate its impact, the impact on governmental programs and budgets, the development of treatments or vaccines, the demand for new equipment from towing equipment operators, and the resumption of widespread economic activity. We are continuing to monitor orders from our customers for COVID-19 pandemic related changes. While we know that COVID- 19 related changes to our operating processes have and will continue to impact our production levels for so long as they are in place, due to the inherent uncertainty of the unprecedented and rapidly evolving situation, we are unable to predict with any confidence the likely impact of the continuing COVID-19 pandemic on our future operations. Even after the COVID-19 pandemic has subsided, we may experience materially adverse impacts to our business due to any resulting economic recession or depression, or to a general reduction in miles driven on roadways due to a decrease in travel. Critical Accounting Policies Our consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America, which require us to make estimates. Certain accounting policies are deemed “critical,” as they require management’s highest degree of judgment, estimations and assumptions. A discussion of critical accounting policies, the judgments and uncertainties affecting their application and the likelihood that materially different amounts would be reported under different conditions or using different assumptions follows: Accounts Receivable We extend credit to customers in the normal course of business. Collections from customers are continuously monitored and an allowance for doubtful accounts is maintained based on historical experience and any specific customer collection issues. While such bad debt expenses have historically been within expectations and the allowance established, there can be no assurance that we will continue to experience the same credit loss rates as in the past. Inventory Inventory costs include materials, labor and factory overhead. Inventories are stated at the lower of cost or net realizable value, determined on a first-in, first-out basis. Appropriate consideration is given to obsolescence, valuation and other factors in determining net realizable value. Revisions of these estimates could result in the need for adjustments. 23


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    Long-Lived Assets Long-lived assets are reviewed for impairment whenever events or circumstances indicate that the carrying amount of these assets may not be fully recoverable. When a determination has been made that the carrying amount of long-lived asset may not be fully recovered, the amount of impairment is measured by comparing an asset’s estimated fair value to its carrying value. The determination of fair value is based on projected future cash flows discounted at a rate determined by management, or if available, independent appraisals or sales price negotiations. The estimation of fair value includes significant judgment regarding assumptions of revenue, operating costs, interest rates, property and equipment additions, and industry competition and general economic and business conditions among other factors. We believe that these estimates are reasonable; however, changes in any of these factors could affect these evaluations. Based on these estimates, we believe that our long-lived assets are appropriately valued. Goodwill Goodwill is tested for impairment annually or if an event or circumstance occurs that would more likely than not reduce the fair value of the reporting unit below the carrying amount. Goodwill is reviewed for impairment utilizing a qualitative assessment and, if necessary, a quantitative assessment. If we perform a qualitative analysis of goodwill and determine that fair value more likely than not exceeds the carrying value of the reporting unit, no further testing is needed. Alternatively, if we elect to utilize a quantitative assessment, an impairment loss would be recognized to the extent that the carrying value of the reporting unit exceeds its fair value, not to exceed the carrying value of the goodwill. We cannot predict the occurrence of certain events or changes in circumstances that might adversely affect the carrying value of goodwill. Such events might include, but are not limited to, the impact of the economic environment or a material change in a relationship with significant customers. Warranty Reserves We estimate expense for product warranty claims at the time products are sold. These estimates are established using historical information about the nature, frequency, and average cost of warranty claims. We review trends of warranty claims and take actions to improve product quality and minimize warranty claims. We believe the warranty reserve is adequate; however, actual claims incurred could differ from the original estimates, requiring adjustments to the accrual. Income Taxes Our income tax expense, deferred tax assets and liabilities for unrecognized tax benefits reflect management’s best assessment of estimated current and future taxes to be paid. We are subject to income taxes in both the United States and foreign jurisdictions. Significant judgments and estimates are required in determining the consolidated income tax expense. Deferred income taxes arise from temporary differences between the tax basis of assets and liabilities and their reported amounts in the financial statements, which will result in deductible or taxable amounts in the future. In evaluating our ability to recover our deferred tax assets within the jurisdiction from which they arise, we consider all available positive and negative evidence, including scheduled reversals of deferred tax liabilities, projected future taxable income, tax-planning strategies, and results of recent operations. The assumptions about future taxable income require significant judgment and are consistent with the plans and estimates we use to manage the underlying businesses. The calculation of our tax liabilities involves dealing with uncertainties in the application of complex tax laws and regulations in multiple jurisdictions. Accounting Standards Codification (“ASC”) 740 states that a tax benefit from an uncertain tax position may be recognized when it is more likely than not that the position will be sustained upon examination, including resolutions of any related appeals or litigation process, on the basis of the technical merits. We (1) record unrecognized tax benefits as liabilities in accordance with ASC 740 and (2) adjust these liabilities when our judgment changes because of the evaluation of new information not previously available to us. Because of the complexity of some of these uncertainties, the ultimate resolution may result in a payment that is materially different from our current estimate of the unrecognized tax benefit liabilities. These differences will be reflected as increases or decreases to income tax expense in the period in which new information is available. 24


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    Revenues Under our accounting policies, revenues are recognized when obligations under the terms of a contract with a customer are satisfied. Generally, this occurs upon shipment, which is when control has transferred to independent distributors or other customers. From time to time, revenue is recognized under a bill and hold arrangement. Recognition of revenue on bill and hold arrangements occurs when control transfers to the customer. Our policy requires the reason for the bill and hold arrangement to be substantive, and the product to be separately identified as belonging to the customer, ready for physical transfer, and unavailable to be used or directed to another customer. Revenue is measured as the amount of consideration expected to be received in exchange for the transfer of products. Sales and other taxes collected concurrent with revenue-producing activities are excluded from revenue. Warranty related costs are recognized as an expense at the time products are sold. Depending on the terms of the arrangement, for certain contracts the Company may defer the recognition of a portion of the consideration received because a future obligation has not yet been satisfied, such as an extended service contract. An observable stand-alone selling price for separate performance obligations or a cost plus margin approach is utilized when one is not available. While we manufacture only the bodies of wreckers and car carriers, which are installed on truck chassis manufactured by third parties, we frequently purchase truck chassis for resale to our customers. Sales of company-purchased truck chassis are included in net sales. Margin percentages are substantially lower on completed recovery vehicles containing company-purchased chassis. Foreign Currency Translation The functional currency for our foreign operations is the applicable local currency. The translation from the applicable foreign currencies to U.S. dollars is performed for balance sheet accounts using current exchange rates in effect at the balance sheet date, historical rates for equity and the weighted average exchange rate during the period for revenue and expense accounts. Foreign currency translation adjustments are included in shareholders’ equity. Intercompany transactions denominated in a currency other than the functional currency are remeasured into the functional currency. Gains and losses resulting from foreign currency transactions are included in other (income) expense, net in our consolidated statements of income. Results of Operations The following table sets forth, for the years indicated, the components of the consolidated statements of income expressed as a percentage of net sales. 2020 2019 2018 Net Sales 100.0 % 100.0 % 100.0 % Costs of operations 88.0 % 88.2 % 88.3 % Gross Profit 12.0 % 11.8 % 11.7 % Operating Expenses: Selling, general and administrative 6.1 % 5.3 % 5.6 % Non-operating (income) expenses Interest expense, net 0.2 % 0.3 % 0.3 % Other (income) expense, net (0.1)% — % (0.1)% Total expenses, net 6.2 % 5.6 % 5.8 % Income before income taxes 5.8 % 6.2 % 5.9 % Year Ended December 31, 2020 Compared to Year Ended December 31, 2019 Net sales were $651,286 for the year ended December 31, 2020, compared to $818,166 for the year ended December 31, 2019, a decrease of 20.4%. The decrease in our revenue stream was largely attributable to chassis supply chain issues, shutdown periods due to soft demand, and health and safety-related adjustments to operations, all attributable to impacts of the COVID-19 pandemic. Net domestic sales decreased during the period from $697,002 to $556,540, and net foreign sales decreased from $121,164 to $94,746 during the same period. Net sales in the fourth quarter were $178,337, which reflected continued recovery from the pandemic impacted level of $128,529 in the second quarter of the year. 25


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    Costs of operations decreased 20.6% to $572,928 for the year ended December 31, 2020 from $721,678 for the year ended December 31, 2019. Overall, costs of operations as a percentage of net sales decreased from 88.2% for the year ended December 31, 2019 to 88.0% for the year ended December 31, 2020, primarily due to differences in product mix. Selling, general and administrative expenses for the year ended December 31, 2020 decreased to $39,714 from $43,394 for the year ended December 31, 2019, primarily due to decreases in travel related expenses and other professional fees. As a percentage of net sales, selling, general and administrative expenses increased to 6.1% for 2020 from 5.3% for 2019, primarily due to fixed period costs relative to reduced sales levels. Interest expense, net decreased to $1,215 for the year ended December 31, 2020 from $2,378 for the year ended December 31, 2019. Decreases in interest expense, net were primarily due to decreases in interest on distributor floor plan activity, decreases in interest on the credit facility, and decreases in interest to chassis suppliers. When the Company has transactions that are denominated in a currency other than its functional currency, the Company is exposed to foreign currency transaction risk and must record gains and losses through other (income) expense when the related balance sheet items are remeasured in the functional currency of the Company. Other (income) expense, net is composed primarily of these foreign currency exchange gains and losses, with the remainder being composed of gains and losses on disposals of equipment. The Company experienced a net foreign currency exchange gain of $685 for 2020 compared to a net exchange loss of $274 for 2019. The provision for income taxes for the years ended December 31, 2020 and 2019 reflects a combined federal, state and foreign tax rate of 21.7% and 22.4%, respectively, which corresponds to a tax provision of $8,267 for 2020 as compared to $11,274 for 2019. Our tax rate in 2020 compares favorably to 2019 primarily due to increases in R&D tax credit estimates for 2020. For more information on the effective tax rate, see Note 6 to our Consolidated Financial Statements. During the fourth quarter of 2020, despite the unique challenges of the continuing COVID-19 pandemic, the Company experienced strengthening demand and increased operations at its domestic production facilities in comparison to the prior two quarters due to a steadying supply chain, more normalized operations and the absence of domestic shutdowns, which led to improved revenues during the period. In addition, the Company continued to experience reduced selling, general and administrative costs due to reduced travel and accrued expense adjustments for cancelled trade shows and various other marketing events. For these reasons, net income for the fourth quarter substantially exceeded that from the previous three quarters of the year. Year Ended December 31, 2019 Compared to Year Ended December 31, 2018 For a comparison of the 2019 to 2018 reporting periods, see Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations - “Results of Operations - Year Ended December 31, 2019 Compared to Year Ended December 31, 2018” of our Annual Report on Form 10-K filed on March 4, 2020 for the fiscal year ended December 31, 2019. Liquidity and Capital Resources Cash provided by operating activities during 2020 was $60,709, compared to $35,132 provided during 2019. Cash provided by operating activities is generally attributable to the receipt of payments from our customers as settlement of their contractual obligation once we have fulfilled all performance obligations related to our contracts with them. These cash receipts are netted with payments for purchases of inventory, payments for materials used in manufacturing, and other payments that are necessary in the ordinary course of our operations, such as those for utilities and taxes. Our decreased revenue stream during the 2020 caused less cash to be used for purposes of new production while receivables from higher sales levels of the prior year continued to flow in, resulting in substantially greater cash provided by operating activities during the year. During 2020, we have largely used available cash flow from operations to pay for capital expenditures, to pay dividends and to repay the debt balance under our credit facility. Cash from operations in 2019 was favorably impacted by increases in revenue growth resulting from our incremental increases in production capacities and favorable changes in inventory levels. Cash used in investing activities during 2020 was $17,224, compared to $17,063 used during 2019. The cash used in investing activities for 2020 and 2019 was primarily for the purchase of property, plant and equipment, including a significant equipment upgrade project at our Greeneville, Tennessee location. 26


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    Cash used in financing activities during 2020 was $13,631, compared to $18,597 used during 2019. The cash used in financing activities in 2020 was primarily attributable to dividend payments of $8,212, net payments on the credit facility of $4,998, net payments on our French subsidiary’s loan of $400, and an immaterial amount of payments on finance lease obligations. The cash used in financing activities in 2019 was primarily attributable to net payments on the credit facility of $10,002, dividend payments of $8,208, net payments on our French subsidiary’s loan of $367, and an immaterial amount of payments on finance lease obligations. As of December 31, 2020, we had cash and cash equivalents of $57,521. Our primary cash requirements include working capital, capital expenditures, the funding of any declared cash dividends and principal and interest payments on indebtedness. At December 31, 2020, we had commitments of approximately $7,068 for the acquisition of property and equipment, which includes $1,736 on a fabrication equipment upgrade project at our Greeneville, Tennessee location. As of December 31, 2020, we also had commitments of $5,266 in software license fees. We expect our primary sources of cash to be cash flow from operations and cash and cash equivalents on hand at December 31, 2020, with borrowings under our credit facility being available as needed. We expect these sources to be sufficient to satisfy our cash needs during 2021 and for the next several years. However, our ability to satisfy our cash needs will substantially depend upon a number of factors including our future operating performance, taking into account the economic, regulatory and other factors discussed above and elsewhere in this Annual Report, as well as financial, business and other factors, many of which are beyond our control. At December 31, 2020 and 2019, $22,787 and $18,103, respectively, of the Company’s cash and temporary investments were held by foreign subsidiaries based in the local currency. We do not currently have plans to repatriate undistributed foreign earnings to the United States and have not determined any timeline or amount for any such future distributions. During 2019, in addition to investments in manufacturing equipment technology, the Company purchased a facility in Chattanooga to be used in research and development and various other activities. During 2020, the Company took advantage of temporary shutdown periods and engaged in a project to significantly upgrade fabrication equipment at its Greeneville, Tennessee location. For a discussion of the 2019 reporting period, see Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations - “Liquidity and Capital Resources” of our Annual Report on Form 10-K filed on March 4, 2020 for the fiscal year ended December 31, 2019. Contractual Obligations The following is a summary of our contractual obligations as of December 31, 2020. Payment Due By Period (in thousands) Less than More than Contractual Obligations (1)(2) Total 1 year 1-3 years 3-5 years 5 years Operating and Finance Lease Obligations $ 1,613 $ 428 $ 660 $ 446 $ 79 Purchase Obligations (2) 34,316 34,316 — — — Revolving Credit Facility — — — — — Other Long-term Obligations — — — — — Software License Fees 5,266 2,008 2,172 1,086 — Capital Projects (3) 7,068 7,068 — — — Total $ 48,263 $ 43,820 $ 2,832 $ 1,532 $ 79 (1) Amounts do not include potential contingent obligations of $56,822 under repurchase commitments with third-party lenders in the event of independent distributor customer default. (2) Purchase obligations represent open purchase orders for raw materials and other components issued in the normal course of business. (3) Represents commitments to various capital projects and equipment acquisitions. 27


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    Credit Facility and Other Obligations Credit Facility On December 21, 2020, we amended and restated our loan agreement with First Horizon Bank (formerly known as First Tennessee Bank National Association), which governs our existing $50,000 unsecured revolving credit facility, to (i) renew and extend the maturity date from May 31, 2022 to May 31, 2027 and make certain other conforming changes, (ii) amend the tangible net worth covenant to increase the minimum required compliance level thereunder from $160,000 to $190,000 (the Company’s tangible net worth at December 31, 2020 was approximately $271,000), and (iii) allow for the sale and leaseback of certain equipment. The credit facility contains customary representations and warranties, events of default, and financial, affirmative and negative covenants for loan agreements of this kind. Covenants under the credit facility restrict the payment of cash dividends if the Company would be in violation of the minimum tangible net worth test or the leverage ratio test in the current loan agreement as a result of the dividend, among various restrictions. We have been in compliance with these covenants throughout 2019 and 2020. In the absence of a default, all borrowings under the credit facility bear interest at the LIBOR Rate plus 1.00% or 1.25% per annum. The Company will pay a non-usage fee under the current loan agreement at a rate per annum equal to between 0.15% and 0.35% of the unused amount of the credit facility, which fee is paid quarterly. Outstanding Borrowings As of December 31, 2020, the Company had no borrowings outstanding under the credit facility. The Company continued to collect on accounts receivable while less cash was used on working capital expenditures during the period of lower demand resulting from the COVID-19 pandemic, thus increasing cash available for payments on the credit facility. As of December 31, 2019, the Company owed $4,998 under the credit facility. Our French subsidiary, Jige International S.A., had an agreement with Banque Européenne du Crédit Mutuel for an unsecured fixed rate loan which matured at September 30, 2020. At December 31, 2019, the Company had $368 in outstanding borrowings under the loan agreement, all of which was classified as short-term obligations on the consolidated balance sheets. Changes in interest rates affect the interest paid on indebtedness under our credit facility because the outstanding amounts of indebtedness under our current credit facility are subject to variable interest rates. Under our credit facility, the non-default rate of interest is equal to the LIBOR Market Index Rate plus 1.00% or 1.25% per annum, depending on our leverage ratio, for a rate of interest of 1.14% at December 31, 2020. A one percent change in the interest rate on our variable-rate debt would not have materially impacted our financial position, results of operations or cash flows for the year ended December 31, 2020. Other Long-Term Obligations Prior to applying a discount rate to our lease liabilities, we had approximately $1,575 in non-cancellable operating lease obligations and $38 in non-cancellable finance lease obligations at December 31, 2020. Leases with original contractual terms less than one year were excluded from non-cancellable lease obligations. We are in the process of implementing an enterprise software solution which we expect to substantially improve our administrative efficiency and customer service levels. We have $5,266 in remaining contractual payments under our agreement with the software provider, which extends through 2025. Recent Accounting Pronouncements Recently Issued Standards In December 2019, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Updated (“ASU”) 2019-12 Income Taxes (Topic 740), which among other things will require the Company to recognize franchise tax that is partially based on income as an income-based tax. The update will be effective for financial statements issued for annual periods, and interim periods within these annual periods, beginning after December 15, 2020, with early adoption permitted. The Company plans to apply the amendments in the update on a modified retrospective basis. The adoption of this update will not have a material impact on the Company’s consolidated financial statements and related disclosures. 28


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    Recently Adopted Standards During the first quarter of 2020, the Company adopted ASU 2018-15 Intangibles – Goodwill and Other – Internal-Use Software (Subtopic 350-40). The purpose of the standard is to align the requirements for capitalizing implementation costs incurred in cloud computing arrangements that are service contracts with the requirements for capitalizing implementation costs incurred to develop or obtain internal- use software. The Company applied the amendments in the update prospectively to all implementation costs incurred after the date of the adoption. The adoption of this update did not have a material impact on the Company’s consolidated financial statements or related disclosures. 29


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    ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK In the normal course of our business, we are exposed to market risk from changes in interest rates and foreign currency exchange rates that could impact our results of operations and financial position. Unless the context indicates otherwise, all dollar amounts in this “Item 7A. Quantitative and Qualitative Disclosures About Market Risk” are in thousands. Interest Rate Risk Changes in interest rates affect the interest paid on indebtedness under our current credit facility because the outstanding amounts of indebtedness under our current credit facility are subject to variable interest rates. Under our current credit facility, the non-default rate of interest is equal to the LIBOR Market Index Rate plus 1.00% or 1.25% per annum, depending on our leverage ratio, for a rate of interest of 1.14% at December 31, 2020. A one percent change in the interest rate on our variable-rate debt would not have materially impacted our financial position, results of operations or cash flows for the year ended December 31, 2020. Foreign Currency Risk We are subject to risk arising from changes in foreign currency exchange rates related to our international operations in Europe. We manage our exposure to our foreign currency exchange rate risk through our regular operating and financing activities. Additionally, from time to time, we enter into certain forward foreign currency exchange contracts. During the years ended December 31, 2020, 2019, and 2018 the impact of foreign currency exchange rate changes on our results of operations and cash flows was a net foreign currency exchange gain of $685, loss of $274, and loss of $97, respectively. Because we report in U.S. dollars on a consolidated basis, foreign currency exchange fluctuations could have a translation impact on our financial position. During 2020, we recognized a $2,714 increase in our foreign currency translation adjustment account because of the weakening of the U.S. dollar against certain foreign currencies, primarily the euro, compared to a decrease of $693 during 2019 and a decrease of $965 during 2018. ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA The response to this item is included in Part IV, Item 15 of this Report. ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None. 30


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    ITEM 9A. CONTROLS AND PROCEDURES Disclosure Controls and Procedures We carried out an evaluation, under the supervision and with the participation of our management, including our Co-Chief Executive Officers and our Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as of the end of the period covered by this report. Based upon this evaluation, our Co-Chief Executive Officers and our Chief Financial Officer have concluded that the disclosure controls and procedures were effective as of the end of the period covered by this Annual Report to ensure that information required to be disclosed in our reports that we file or submit under the Exchange Act are recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms. Changes in Internal Control over Financial Reporting There were no significant changes in our internal control over financial reporting that occurred during our most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting Management’s Report on Internal Control over Financial Reporting Management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act). Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of consolidated financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America. The Company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of consolidated financial statements in accordance with U.S. generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company’s assets that could have a material effect on the consolidated financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may be inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Management conducted an evaluation of the effectiveness of our internal control over financial reporting as of December 31, 2020. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in “Internal Control—Integrated Framework” (2013). Based on our assessment under those criteria, we concluded that, as of December 31, 2020, we maintained effective internal control over financial reporting. Elliott Davis, LLC, the independent registered public accounting firm who audited the Company’s consolidated financial statements included in this report, has issued an audit report on the effectiveness of the Company’s internal control over financial reporting as of December 31, 2020, which appears herein. March 3, 2021 31


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    Report of Independent Registered Public Accounting Firm To the Shareholders and the Board of Directors of Miller Industries, Inc.: Opinion on the Internal Control Over Financial Reporting We have audited Miller Industries, Inc.’s and its subsidiaries (the Company) internal control over financial reporting as of December 31, 2020, based on criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission in 2013. In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2020, based on the criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission in 2013. We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets as of December 31, 2020 and 2019, the related consolidated statements of income, comprehensive income, shareholders’ equity and cash flows for each of the three years in the period ended December 31, 2020, and the related notes to the consolidated financial statements and financial statement schedule listed in the index at Item 15, of the Company and our report dated March 3, 2021, expressed an unqualified opinion. Basis for Opinion The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Definition and Limitations of Internal Control Over Financial Reporting A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the company’s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. /s/ Elliott Davis, LLC Chattanooga, Tennessee March 3, 2021 32


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    ITEM 9B. OTHER INFORMATION None. PART III ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE The Proxy Statement for our Annual Meeting of Shareholders, to be filed with the Securities and Exchange Commission pursuant to Regulation 14A not later than 120 days after the end of our 2020 fiscal year, will contain information relating to our directors and audit committee, compliance with Section 16(a) of the Exchange Act (if there are any applicable delinquencies to report), and our code of ethics applicable to our chief executive, financial and accounting officers, which information is incorporated by reference herein. Information relating to our executive officers is included in Part I, Item 1 of this report. ITEM 11. EXECUTIVE COMPENSATION The Proxy Statement for our Annual Meeting of Shareholders, to be filed with the Securities and Exchange Commission pursuant to Regulation 14A not later than 120 days after the end of our 2020 fiscal year, will contain our compensation committee report, information relating to director and executive officer compensation and information relating to compensation committee interlocks and insider participation, each of which is incorporated by reference herein. ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS The Proxy Statement for our Annual Meeting of Shareholders, to be filed with the Securities and Exchange Commission pursuant to Regulation 14A not later than 120 days after the end of our 2020 fiscal year, will contain information relating to security ownership of certain beneficial owners and management, which information is incorporated by reference herein. The Proxy Statement will also contain information relating to our equity compensation plans, which information is incorporated by reference herein. ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE The Proxy Statement for our Annual Meeting of Shareholders, to be filed with the Securities and Exchange Commission pursuant to Regulation 14A not later than 120 days after the end of our 2020 fiscal year, will contain information relating to certain relationships and related transactions between us and certain of our directors and executive officers, which information is incorporated by reference herein. ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES The Proxy Statement for our Annual Meeting of Shareholders, to be filed with the Securities and Exchange Commission pursuant to Regulation 14A not later than 120 days after the end of our 2020 fiscal year, will contain information relating to the fees charged and services provided by Elliott Davis, LLC, our principal accountants, and our pre-approval policy and procedures for audit and non-audit services, which information is incorporated by reference into this report. PART IV ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES (a) The following documents are filed as part of this Report: 1. Financial Statements 33


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    Page Number Description in Report Report of Independent Registered Public Accounting Firm F-2 Consolidated Balance Sheets as of December 31, 2020 and 2019 F-4 Consolidated Statements of Income for the years ended December 31, 2020, 2019 and 2018 F-5 Consolidated Statements of Comprehensive Income for the years ended December 31, 2020, 2019 and 2018 F-6 Consolidated Statements of Shareholders’ Equity for the years ended December 31, 2020, 2019 and 2018 F-7 Consolidated Statements of Cash Flows for the years ended December 31, 2020, 2019 and 2018 F-8 Notes to Consolidated Financial Statements F-9 2. Financial Statement Schedules The following Financial Statement Schedule for the Registrant is filed as part of this Report and should be read in conjunction with the Consolidated Financial Statements: Page Number Description in Report Schedule II - Valuation and Qualifying Accounts F-21 All schedules, except those set forth above, have been omitted since the information required is included in the financial statements or notes or have been omitted as not applicable or not required. 3. Exhibits The following exhibits are required to be filed with this Report by Item 601 of Regulation S-K: Incorporated by Reference Exhibit to Registration Form or Number in Description File Number Report Date of Report Report 3.1 Charter, as amended, of the Registrant — Form 10-K April 22, 2002 3.1 3.2 Second Amended and Restated Bylaws of the — Form 10-K March 6, 2019 3.2 Registrant 4.1 Description of the Registrant’s Securities — Form 10-K March 4, 2020 4.1 10.1 Form of Noncompetition Agreement between the 33-79430 S-1 August 1994 10.28 Registrant and certain officers of the Registrant 10.2 Form of Indemnification Agreement by and — Form 10-Q September 14, 10 between the Registrant and each of Theodore H. 1998 Ashford, III, Jeffrey I. Badgley, A. Russell 34


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    Incorporated by Reference Exhibit to Registration Form or Number in Description File Number Report Date of Report Report Chandler, III, Frank Madonia, William G. Miller, William G. Miller, II, Josias W. Reyneke, Leigh Walton, Deborah L. Whitmire, and Richard H. Roberts ** 10.3 Miller Industries, Inc. 2005 Equity Incentive — Schedule May 2, 2005 Annex B Plan** 14A 10.4 2013 Non-Employee Director Stock Plan** — Schedule April 22, 2013 Annex A 14A 10.5 Amendment No. 1 to Miller Industries, Inc. 2013 — Form 8-K March 15, 2017 10.1 Non-Employee Director Stock Plan** 10.6 Miller Industries, Inc. 2016 Stock Incentive Plan — Schedule April 19, 2017 Appendix ** 14A A 10.7 Amended and Restated Loan Agreement, dated as — Form 8-K December 23, 10.1 of December 21, 2020, by and among the 2020 Registrant, certain of the Registrant’s wholly- owned subsidiaries, and First Horizon Bank 10.8 Amended and Restated Master Revolving Credit — Form 8-K December 23, 10.2 Note dated as of December 21, 2020 issued by the 2020 Registrant to First Horizon Bank 21 Subsidiaries of the Registrant* 23.1 Consent of Elliott Davis, LLC* 24 Power of Attorney (see signature page) 31.1 Certification Pursuant to Rules 13a-14(a)/15d-14(a) by Co-Chief Executive Officer* 31.2 Certification Pursuant to Rules 13a-14(a)/15d-14(a) by Co-Chief Executive Officer* 31.3 Certification Pursuant to Rule 13a-14(a)/15d-14(a) by Chief Financial Officer* 32.1 Certification Pursuant to Section 1350 of Chapter 63 of Title 18 of United States Code by Co-Chief Executive Officer± 32.2 Certification Pursuant to Section 1350 of Chapter 63 of Title 18 of United States Code by Co-Chief Executive Officer± 35


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    Incorporated by Reference Exhibit to Registration Form or Number in Description File Number Report Date of Report Report 32.3 Certification Pursuant to Section 1350 of Chapter 63 of Title 18 of United States Code by Chief Financial Officer± 101.INS Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. 101.SCH Inline XBRL Taxonomy Extension Schema Document 101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document 101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document 101.LAB Inline XBRL Taxonomy Extension Label Linkbase Document 101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document 104 The cover page from the Company’s Annual Report on Form 10-K for the year ended December 31, 2020, has been formatted in Inline XBRL * Filed herewith. ± Exhibit is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Exchange Act, or otherwise subjected to the liabilities of that Section. This exhibit shall not be incorporated by reference into any given registration statement or other document pursuant to the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such a filing. ** Management contract or compensatory plan or arrangement. (b) The Registrant hereby files as exhibits to this Report the exhibits set forth in Item 15(a)3 hereof. (c) The Registrant hereby files as financial statement schedules to this Report the financial statement schedules set forth in Item 15(a)2 hereof. ITEM 16. FORM 10-K SUMMARY None. 36


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    INDEX TO CONSOLIDATED FINANCIAL STATEMENTS REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM F-2 CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2020 AND 2019 F-4 CONSOLIDATED STATEMENTS OF INCOME FOR THE YEARS ENDED DECEMBER 31, 2020, 2019 AND 2018 F-5 CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2020, 2019 AND 2018 F-6 CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY FOR THE YEARS ENDED DECEMBER 31, 2020, 2019 AND 2018 F-7 CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2020, 2019 AND 2018 F-8 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS F-9 SCHEDULE II –VALUATION AND QUALIFYING ACCOUNTS F-21 F-1


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    Report of Independent Registered Public Accounting Firm To the Shareholders and the Board of Directors of Miller Industries, Inc.: Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of Miller Industries, Inc. and its subsidiaries (the “Company”) as of December 31, 2020 and 2019, the related consolidated statements of income, comprehensive income, shareholders' equity and cash flows for each of the three years in the period ended December 31, 2020, and the related notes to the consolidated financial statements and financial statement schedule listed in the index at Item 15 (collectively, the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2020 and 2019, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2020, in conformity with accounting principles generally accepted in the United States of America. We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2020, based on criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission in 2013, and our report dated March 3, 2021, expressed an unqualified opinion on the effectiveness of the Company's internal control over financial reporting. Basis for Opinion These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matter The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. Income Taxes Critical Audit Matter Description As described in Note 6 to the consolidated financial statements, the Company operates in many different geographic locations, including several foreign, state and local tax jurisdictions. Establishing its deferred income tax assets and liabilities and its provision for income taxes requires management to make assumptions and judgments regarding the application of complex tax laws and regulations as well as projected future operating results, eligible carry forward periods, and tax planning opportunities. Deferred tax assets and liabilities are measured and recorded using current enacted tax rates, which management expects will apply to taxable income in the years in which those temporary differences are recovered or settled. Management also evaluates the need for valuation allowances to reduce the deferred tax assets to realizable amounts. The Company recorded a provision for income taxes of $8.3 million for the year ended December 31, 2020 and net F-2


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    deferred income tax liabilities of $4.1 million as of December 31, 2020. As of December 31, 2020, management has determined that it is more likely than not that all of the Company’s deferred tax assets are realizable against expected future taxable income. The principal considerations for our determination that performing procedures relating to income taxes is a critical audit matter are the significant judgment and estimation by management when assessing current enacted tax laws and published tax guidance as it relates to determining the provision for income taxes as well as in assessing the realizability of its deferred income tax assets, specifically related to evaluating positive and negative evidence regarding past and future events, including operating results. This resulted in significant audit effort, judgment, and subjectivity in performing procedures and evaluating audit evidence relating to income taxes. The audit effort involved the use of professionals with specialized skill and knowledge to assist in performing procedures and evaluating the audit evidence obtained from these procedures. How the Critical Audit Matter Was Addressed in the Audit Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to income taxes, including management’s controls over the application of current enacted tax laws and published tax guidance and their impact to the current year provision, the establishment of deferred tax assets and liabilities, and the evaluation of the realizability of deferred tax assets. These procedures included (i) testing the provision for income taxes and the application of current enacted tax laws and published tax guidance, including the effective tax rate reconciliation, return to provision adjustments, and permanent and temporary differences, (ii) testing the underlying data used in establishing and measuring deferred tax assets and liabilities, and (iii) evaluating management’s assessment of the realizability of deferred tax assets by evaluating factors used in management’s assessment of positive and negative evidence regarding past and future events, including operating results and the related expected utilization of deferred tax assets. Professionals with specialized skill and knowledge were used to assist in the evaluation of the calculations, including application of relevant tax laws and published tax guidance. We have served as the Company’s auditor since 2003. /s/ Elliott Davis, LLC Chattanooga, Tennessee March 3, 2021 F-3


  • Page 46

    MILLER INDUSTRIES, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2020 AND 2019 (In thousands, except share data) 2020 2019 ASSETS CURRENT ASSETS: Cash and temporary investments $ 57,521 $ 26,072 Accounts receivable, net of allowance for doubtful accounts of $1,295 and $1,106 at December 31, 2020 and December 31, 2019, respectively 141,642 168,619 Inventories, net 83,939 87,965 Prepaid expenses 3,167 4,796 Total current assets 286,269 287,452 NONCURRENT ASSETS: Property, plant and equipment, net 98,620 90,735 Right-of-use assets - operating leases 1,468 1,640 Goodwill 11,619 11,619 Other assets 434 521 TOTAL ASSETS $ 398,410 $ 391,967 LIABILITIES AND SHAREHOLDERS’ EQUITY CURRENT LIABILITIES: Accounts payable $ 85,534 $ 95,750 Accrued liabilities 24,773 27,813 Current portion of operating lease obligation 354 330 Current portion of finance lease obligation 21 21 Short-term obligations — 368 Total current liabilities 110,682 124,282 NONCURRENT LIABILITIES Long-term obligations — 4,998 Noncurrent portion of operating lease obligation 1,116 1,307 Noncurrent portion of finance lease obligation 15 37 Deferred income tax liabilities 4,144 3,416 Total liabilities 115,957 134,040 COMMITMENTS AND CONTINGENCIES (Note 5) SHAREHOLDERS’ EQUITY: Preferred stock, $0.01 par value; 5,000,000 shares authorized, none issued or outstanding — — Common stock, $0.01 par value; 100,000,000 shares authorized, 11,405,468 and 11,400,102, outstanding at December 31, 2020 and December 31, 2019, respectively 114 114 Additional paid-in capital 151,249 151,055 Accumulated surplus 133,879 112,261 Accumulated other comprehensive loss (2,789) (5,503) Total shareholders’ equity 282,453 257,927 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 398,410 $ 391,967 The accompanying notes are an integral part of these consolidated statements. F-4


  • Page 47

    MILLER INDUSTRIES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME FOR THE YEARS ENDED DECEMBER 31, 2020, 2019 AND 2018 (In thousands, except per share data) 2020 2019 2018 NET SALES $ 651,286 $ 818,166 $ 711,706 COSTS OF OPERATIONS 572,928 721,678 628,370 GROSS PROFIT 78,358 96,488 83,336 OPERATING EXPENSES: Selling, general and administrative expenses 39,714 43,394 39,542 NON-OPERATING (INCOME) EXPENSES: Interest expense, net 1,215 2,378 1,878 Other (income) expense, net (668) 331 253 Total expense, net 40,261 46,103 41,673 INCOME BEFORE INCOME TAXES 38,097 50,385 41,663 INCOME TAX PROVISION 8,267 11,274 7,917 NET INCOME $ 29,830 $ 39,111 $ 33,746 BASIC INCOME PER COMMON SHARE $ 2.62 $ 3.43 $ 2.96 DILUTED INCOME PER COMMON SHARE $ 2.62 $ 3.43 $ 2.96 CASH DIVIDENDS DECLARED PER COMMON SHARE $ 0.72 $ 0.72 $ 0.72 WEIGHTED AVERAGE SHARES OUTSTANDING: Basic 11,405 11,400 11,388 Diluted 11,405 11,400 11,393 The accompanying notes are an integral part of these consolidated statements. F-5


  • Page 48

    MILLER INDUSTRIES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2020, 2019 AND 2018 (In thousands) 2020 2019 2018 NET INCOME $ 29,830 $ 39,111 $ 33,746 OTHER COMPREHENSIVE LOSS: Foreign currency translation adjustment 2,714 (693) (965) Total other comprehensive loss 2,714 (693) (965) COMPREHENSIVE INCOME $ 32,544 $ 38,418 $ 32,781 The accompanying notes are an integral part of these consolidated statements. F-6


  • Page 49

    MILLER INDUSTRIES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY FOR THE YEARS ENDED DECEMBER 31, 2020, 2019 AND 2018 (In thousands, except share data) Accumulated Additional Other Common Paid-In Accumulated Comprehensive Stock Capital Surplus Loss Total BALANCE, January 1, 2018 $ 114 $ 150,699 $ 55,256 $ (3,293) $ 202,776 Prior period accounting reclassification — — 552 (552) — Components of comprehensive income: Net income — — 33,746 — 33,746 Foreign currency translation adjustments — — — (965) (965) Total comprehensive income — — 34,298 (1,517) 32,781 Issuance of common stock to non-employee directors (5,814) — 150 — — 150 Exercise of stock options (10,250) — 56 — — 56 Dividends paid, $0.72 per share — — (8,200) — (8,200) BALANCE, December 31, 2018 114 150,905 81,354 (4,810) 227,563 Cumulative effect adjustment for adoption of ASU 2016-02 — — 4 — 4 BALANCE, January 1, 2019 114 150,905 81,358 (4,810) 227,567 Components of comprehensive income: Net income — — 39,111 — 39,111 Foreign currency translation adjustments — — — (693) (693) Total comprehensive income — — 39,111 (693) 38,418 Issuance of common stock to non-employee directors (5,556) — 150 — — 150 Dividends paid, $0.72 per share — — (8,208) — (8,208) BALANCE, December 31, 2019 114 151,055 112,261 (5,503) 257,927 Components of comprehensive income: Net income — — 29,830 — 29,830 Foreign currency translation adjustments — — — 2,714 2,714 Total comprehensive income — — 29,830 2,714 32,544 Issuance of common stock to non-employee directors (5,366) — 194 — — 194 Dividends paid, $0.72 per share — — (8,212) — (8,212) BALANCE, December 31, 2020 $ 114 $ 151,249 $ 133,879 $ (2,789) $ 282,453 The accompanying notes are an integral part of these consolidated statements. F-7


  • Page 50

    MILLER INDUSTRIES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2020, 2019 AND 2018 (In thousands) 2020 2019 2018 OPERATING ACTIVITIES: Net income $ 29,830 $ 39,111 $ 33,746 Adjustments to reconcile net income to net cash flows from operating activities: Depreciation and amortization 9,598 9,127 7,745 (Gain) loss on disposal of property, plant and equipment 17 (21) 156 Provision for doubtful accounts 195 15 214 Issuance of non-employee director shares 194 150 150 Deferred tax provision 752 1,708 568 Changes in operating assets and liabilities: Accounts receivable 27,375 (19,605) (19,353) Inventories 5,466 5,453 (23,865) Prepaid expenses 1,652 (1,529) 989 Other assets 321 609 60 Accounts payable (10,881) (2,165) 19,425 Accrued liabilities (3,810) 2,279 2,062 Net cash flows from operating activities 60,709 35,132 21,897 INVESTING ACTIVITIES: Purchases of property, plant and equipment (17,500) (17,391) (13,342) Proceeds from sale of property, plant and equipment 276 328 141 Net cash flows from investing activities (17,224) (17,063) (13,201) FINANCING ACTIVITIES: Net proceeds (payments) under credit facility (4,998) (10,002) 5,000 Payments of cash dividends (8,212) (8,208) (8,200) Net proceeds (payments) on other long-term obligations (400) (367) 56 Finance lease obligation payments (21) (20) — Proceeds from exercise of stock options — — 179 Net cash flows from financing activities (13,631) (18,597) (2,965) EFFECT OF EXCHANGE RATE CHANGES ON CASH AND TEMPORARY INVESTMENTS 1,595 (437) (589) NET CHANGE IN CASH AND TEMPORARY INVESTMENTS 31,449 (965) 5,142 CASH AND TEMPORARY INVESTMENTS, beginning of period 26,072 27,037 21,895 CASH AND TEMPORARY INVESTMENTS, end of period $ 57,521 $ 26,072 $ 27,037 SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: Cash payments for interest $ 2,052 $ 3,249 $ 2,437 Cash payments for income taxes, net of refunds $ 6,721 $ 10,067 $ 7,457 The accompanying notes are an integral part of these consolidated statements. F-8

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