Miller Industries NYSE : MLR Yunfeng Bian Zuoquan Li Presented April 10, 2018

AGENDA Section 1 Introduction Section 2 Macroeconomic Overview Business Overview Section 4 Financial Analysis Section 5 Valuation Section 6 Recommendation

Two year share price performance SHARE MARKET PROSPECT Market Cap : $ 289.161 million Shares owned : 200 shares Two year share price performance Sell 200 on 12/06/2016 @ $26.60 Buy 400 on 5/5/2016 @ $20.59 Source: Yahoo Finance

BUSINESS DESCRIPTION In Truck and Bus manufacturing Industry

BUSINESS DESCRIPTION Products Wreckers Car Carriers Transport Trailer Used to recover and tow disabled vehicles Range in capacity from 4 to 75 tons Wreckers over 16 tons are classified as heavy duty Wreckers below or equal to 16 tons are classified as light duty Used to transport new or disabled vehicles and other equipment Most professional towing operators have car carriers in their fleets to complement their towing capabilities Specialized auto transport trailers with upper and lower decks and hydraulic ramps for loading vehicles Range in loading capacity from 6 to 7 vehicles Many professional towing operators have added auto transport trailers to their fleets Source : 10-K Form

BUSINESS DESCRIPTION Source : Miller’s website: https://www.millerind.com/brands

MANAGEMENT Key Executive Profile Strategies William G. Miller, II ● Has severed as Co-Chief Executive Officer since Dec 2013. ● President since Mar 2011 ● Vice President of Sales from Nov 2009 to Feb 2011 ● Vice President of Strategic Planning from Oct 2007 to Nov 2009 General strategy : diversify company’s line of products and increase company’s presence in the industry by combining internal growth and development with acquisitions of complementary products Marketing strategy : 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. Jeffrey I. Badgley ● Has severed as Co-Chief Executive Officer since Dec 2013. ● Chief Executive Officer from Mar 2011 to Dec 2013 ● President from Jun 1996 to Mar 2011 ● Vice President from 1994 to 1996 Deborah Whitmire ● Has severed as Chief Financial Officer since Jan 2017 ● Vice President from Jan 2014 to Dec 2016 ● Corporate Controller from Mar 2005 to Jan 2014 ● Director of Finance from Apr 2000 to Mar 2005 Source : 10-K Form

MACROECONOMY Number of Motor Vehicle Registrations Number of Vehicle Accidents Change in Total Vehicle Miles Source : IBISWorld – US Industry Report – Automobile Towing

Truck and bus manufacturing BUSINESS ANAYLSIS Industry:  Truck and bus manufacturing Source : ibisworld

Truck and bus manufacturing BUSINESS ANAYLSIS Industry:  Truck and bus manufacturing Industry Structure Life Cycle Stage Mature Revenue Volatility High Capital Intensity High Concentration Level High Regulation Level Heavy Technology Change Medium Barriers to Entry High Industry Globalization High Source : ibisworld

BUSINESS ANAYLSIS Industry:  Automobile towing Source : ibisworld

BUSINESS ANAYLSIS Industry: Automobile towing Affected by Weather Number of vehicle registration Fuel price Regulation New technology Source : ibisworld

PORTER’S 5 FORCES BARGAINING POWER OF BUYERS REVALRY AMONG EXISTING COMPETITORS -High competition for sales to distributors -Emphasis on product quality, innovation, reputation, technology, customer service, product availability, and price THREAT OF NEW ENTRANTS -High Capital requirement -Emphasis on need for proprietary products and technology BARGAINING POWER OF BUYERS -Demand dependent on availability of capital and access to lines of credit -Customer sentiment contingent on price of fuel and insurance costs THREAT OF SUBTITUTE PRODUCTS -High from technological innovations BARGAINING POWER OF SUPPLIERS -Dependent on outside suppliers for raw material production inputs -High commodity and fuel price risk -Demand for punctual delivery of goods crucial within the industry

SWOT Declining industry Market leader in towing equipment industry Highly cyclical Vulnerable to market risk and macroeconomic conditions Strong bargaining power of customer Market leader in towing equipment industry Independent distributors with strong relationship Low long-term debt & low cost of borrowing Strengths Weakness Opportunities Threats Increasing market share from acquisitions and expanding facilities International markets Technological advances and product innovation Regulation for the US New technology may dramatically cut the demand

Revenues and Gross Profit FINACIAL ANALYSIS Revenues and Gross Profit Margins Source : 10-K Form

FINACIAL ANALYSIS 2013 2014 2015 2016 2017 EBIT 14232 24052 25782 Greenblatt Ratio 2013 2014 2015 2016 2017 EBIT 14232 24052 25782 32238 31927 Net Working Capital 74069 83033 82597 88682 103131 Net Fixed Assets 30834 32050 39475 59613 77628 EBIT / Tangible Asset 13.57% 20.90% 21.12% 21.74% 17.66% Greenblatt Ratio shows that this company is becoming less effective in using its capital

FINACIAL ANALYSIS Dupont Analysis 2013 2014 2015 2016 2017 Tax Burden 66.6% 63.4% 64.3% 64.1% 75.9% Interest Burden 97.4% 97.7% 96.4% 95.0% EBIT Margin 3.5% 4.9% 4.8% 5.4% 5.2% Asset Turnover 1.8x 1.9x 2.0x Financial Leverage 1.4x 1.6x ROE 5.7% 8.8% 9.2% 10.8% 11.3% Interest Burden goes up from 2014 to 2015, 2016 to 2017 because the company is taking more debt Tax burden increases sharply because tax reform, effective tax rate decreased a lot in 2017 EBIT goes up more than 1% because this company controlled selling, general and administration cost very well while increasing its net sales, same story happened when 4.8% went up to 5.4% Source : 10-K Form

PROJECTIONS

REQUIRED RETURN

FREE CASH FLOW PROJECTION

DCF MODEL

COMPARABLES

COMPARABLES

DDM Required return: 6% Price: 16.514

RECOMMENDATION Current price : $25.45 DCF Valuation: $23.30 Sell 200 shares @ the Market