Miller Industries Inc. is a leading integrated provider of vehicle towing and recovery equipment and services. The Company's business is divided into two segments: (i) manufacturing and distributing towing and recovery equipment and providing financial and related services to the towing and recovery industry and (ii) providing towing and specialized transportationservices. The Company markets its towing and recovery equipment under several well-recognized brand names and markets its towing services under the national brand name of RoadOne(R). Miller Industries Inc. has a market cap of $90 million; its shares were traded at around $7.76 with a P/E ratio of 25.1 and P/S ratio of 0.3. Miller Industries Inc. had an annual average earning growth of 2.4% over the past 10 years.
Highlight of Business Operations:Costs of operations for the three months ended March 31, 2009 decreased 15.2% to $50.4 million from $59.4 million for the comparable period in 2008, which was attributable to lower overall production levels in the first quarter of 2009 compared to the comparable period in 2008 as described above. Overall, costs of operations decreased as a percentage of sales from 87.8% to 85.7% primarily due to product mix as well as volatility of raw materials costs including aluminum, steel and other petroleum-related products.
Cash provided by operating activities was $4.3 million for the three months ended March 31, 2009, compared to $3.5 million for the comparable period in 2008. The cash provided by operating activities for the three months ended March 31, 2009 reflects decreases in accounts receivable due to lower sales volume offset by increases in inventory and decreases in accounts payable. Increases in inventory resulted from purchases of materials to fill the export and government orders the Company received in the second half of 2008.
Cash used in investing activities was $0.2 million for the three months ended March 31, 2009, compared to $2.2 million for the comparable period in 2008. The cash used in investing activities was for the purchase of property, plant and equipment.
Cash used in financing activities was $2.1 million for the three months ended March 31, 2009, compared to $0.5 million for the comparable period in 2008. The cash used in financing activities repaid mortgage notes payable, paid down our term loan under our senior credit facility, and repaid other outstanding long-term debt.
We are party to a Credit Agreement with Wachovia Bank, National Association for a $27.0 million senior secured credit facility. The senior credit facility, which was amended on July 11, 2007, consists of a $20.0 million revolving credit facility, and a $7.0 million term loan. The senior credit facility is secured by substantially all of our assets, and contains customary representations and warranties, events of default and affirmative and negative covenants for secured facilities of this type. Covenants under the senior credit facility restrict the payment of cash dividends if a default or event of default under the Credit Agreement has occurred or would result from the dividends or if the Company would be in violation of the consolidated fixed charge coverage ratio test in the Credit Agreement as a result of the dividends, among various other restrictions.
In February 2009, approximately $1.7 million of mortgage notes payable was repaid and the related obligation was terminated. In addition to the borrowings under the senior credit facility described above, at March 31, 2009 we had approximately $0.4 million of mortgage notes payable, equipment notes payable and other long-term obligations. We also had approximately $1.5 million in non-cancelable operating lease obligations.
Read the The complete ReportMLR is in the portfolios of Michael Price of MFP Investors LLC, HOTCHKIS & WILEY of HOTCHKIS & WILEY Capital Management LLC.