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 $100.4 million; its shares were traded at around $8.65 with a P/E ratio of 27.8 and P/S ratio of 0.4. Miller Industries Inc. had an annual average earning growth of 2.4% over the past 10 years.
Highlight of Business Operations:Cash provided by operating activities was $11.3 million for the six months ended June 30, 2009, compared to $3.0 million for the comparable period in 2008. The cash provided by operating activities for the six months ended June 30, 2009 reflects decreases in accounts receivable and inventory due to lower sales volume offset by decreases in accounts payable.
Cash used in investing activities was $0.4 million for the three months ended June 30, 2009, compared to $3.6 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 $3.9 million for the three months ended June 30, 2009, compared to $0.9 million for the comparable period in 2008. The cash used in financing activities repaid the term loan under our senior credit facility, mortgage notes payable, and 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, as amended, 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. At June 30, 2009 we had approximately $0.3 million of equipment notes payable and other long-term obligations. We also had approximately $1.6 million in non-cancelable operating lease obligations.
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, and not through the use of any financial or derivative instruments, forward contracts or hedging activities. Because we report in U.S. dollars on a consolidated basis, foreign currency exchange fluctuations could have a translation impact on our financial position. At June 30, 2009, we recognized a $1.8 million increase in our foreign currency translation adjustment account compared with December 31, 2008 because of weakening of the U.S. dollar against certain foreign currencies. During the three months ended June 30, 2009 and 2008, the impact of foreign currency exchange rate changes on our results of operations and cash flows were gains of $0.3 million and $0.1 million, respectively. The impact of foreign currency exchange rate changes on our results of operations and cash flows were gains of $0.3 million and $0.1 million for the six months ended June 30, 2009 and 2008, respectively.
Read the The complete ReportMLR is in the portfolios of Michael Price of MFP Investors LLC, HOTCHKIS & WILEY of HOTCHKIS & WILEY Capital Management LLC.