The Company is a manufacturer of vehicle 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.
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Miller Industries manufactures vehicle towing and recovery equipment primarily in the United States. It offers a range of wrecker, car carrier, and trailer bodies. Its wreckers range from the conventional tow truck to large recovery vehicles of 8 to 70 tons capability that are used to recover and tow disabled vehicles and other equipment. Car carriers transport new or disabled vehicles and other equipment whereas the trailers are used for moving multiple vehicles for auto auctions, car dealerships, leasing companies, and other applications.
The success of the towing and recovery equipment industry depends primarily on the usage of vehicles. As per the Bureau of Economic Analysis, total vehicle usage and new vehicle registration in US has gone up annually by over 1% in the past decade. This goes well for Miller Industries as it generates over 81% of its revenue from North American operations. The fiscal performance of the company for the nine months ended September 2006 has been good with about 13% rise in the top line. Looking ahead, management has a received a contract to manufacture over 130 small wreckers for the New York government and approximately 300 trailers for Datapath which could aid the top line growth of the company.
On the operational front, company has been able to improve its gross margins significantly despite rising cost of aluminum and copper, which are the key raw materials of the company. After huge hike in the past few years, copper prices are likely to go down in 2007 as construction activity is slowing down in US, which is reducing demand for copper. Also, aluminum prices are also expected to take a plunge since global production levels are expected to exceed the consumption by 1.1%. Stabilization of energy prices is another sweetener for the company as the transportation costs get reduced. In the light of these factors, Miller Industries looks set to have a bull ride ahead.