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

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

3. Two year share price performance
SHARE MARKET PROSPECT
Market Cap : $ 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

4. BUSINESS DESCRIPTION
In Truck and Bus manufacturing Industry

5. 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

6. BUSINESS DESCRIPTION
Source : Miller’s website:

7. 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

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

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

10. 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

11. BUSINESS ANAYLSIS
Industry: 
Automobile towing
Source : ibisworld

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

13. 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

14. 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

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

16. 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

17. 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

18. PROJECTIONS

19. REQUIRED RETURN

20. FREE CASH FLOW PROJECTION

21. DCF MODEL

22. COMPARABLES

23. COMPARABLES

24. DDM
Required return: 6% Price:

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