Eric Boyriven - Managing Director Jeffrey I. Badgley - Vice Chairman and Chief Executive Officer J. Vincent Mish - Chief Financial Officer, Principal Accounting Officer, Executive Vice President, Treasurer and President of Financial Services Group William G. Miller - Founder and Chairman

Richard G. D'Auteuil - Columbia Funds Series Trust I- Columbia Small Cap Core Fund Walter S. Lang - Avondale Partners, LLC Matt Sherwood

Hello, this is the Chorus Call operator. Welcome to the Miller Industries Fourth Quarter and Full Year 2012 Results Conference Call. [Operator Instructions] Please note, this event is being recorded. At this time, I would like to turn the conference over to Mr. Eric Boyriven of FTI Consulting. Mr. Boyriven, the floor is yours, sir.

Thank you, and good morning, everyone. I would like to welcome you to the Miller Industries conference call. We are here to discuss the company's 2012 fourth quarter and full year results, which were released after the close of the market yesterday. With us from management today are Bill Miller, Chairman of the Board; Jeff Badgley, CEO; Vince Mish, CFO; Frank Madonia, General Counsel; Debbie Whitmire, Corporate Controller; and Allison Houghton, Director of Finance. Today's call will begin with formal remarks from management followed by a question-and-answer period. Please note that in this morning's conference call, management may make forward-looking statements in accordance with the Safe Harbor Provision of the Private Securities Litigation Reform Act of 1995. I'd like to call your attention to the risks related to these statements, which are more fully described in the company's annual report filed on Form 10-K and other filings with the Securities and Exchange Commission. With these formalities out of the way, I'd like to turn the call over to Jeff Badgley. Jeff, please go ahead. Jeffrey I. Badgley: Thank you, and good morning. Overall for the 2012 fourth quarter, we achieved solid results under economic conditions which remain challenging. Yesterday, we reported 2012 fourth quarter sales of $82.4 million compared to sales of $109.4 million in the prior year period and up from $78 million we reported in the 2012 third quarter. The decrease in year-over-year sales was primarily a result of government-related orders to prime contractors that did not repeat in the current quarter's results. Those government-related orders represented approximately 20% of our total sales in the year-ago period. As a result, our year-over-year comparisons will become more normalized going forward. During the quarter, economic conditions remained weak. However, we witnessed a moderate improvement in demand trends within our domestic commercial customer base relative to both the fourth quarter of last year and 2012 third quarter. This growth was partially offset by softer conditions in Europe, which continued to contend with economic turmoil and low levels of consumer confidence. With this backdrop, we are pleased that our continued focus on cost reduction and efficiency resulted in earnings growth relative to the 2012 third quarter when you exclude the income tax benefits from that period. The quarter also saw us continue to operate from a position of financial strength, generating solid cash flow and returning value to our shareholders through our quarterly dividend, which has been increased by our board to $0.14 beginning this month. Now I'll turn the call over to Vince, who will review the quarter's financial results. After that, I'll be back with some more comments. Then, we'll go to Q&A. Mr. Mish? J. Vincent Mish: Thanks, Jeff, and good morning, everyone. As Jeff mentioned, net sales for the fourth quarter of 2012 were $82.4 million versus $109.4 million in the 2011 fourth quarter. Sales were down approximately 24.7% year-over-year, reflecting the government-related work we filled a year ago which did not repeat, as well as weaker demand conditions in Europe. These were partially offset by higher sales volumes in the U.S. commercial markets. Costs of operations decreased by 21.6% to $73.0 million in the 2012 fourth quarter compared to $93.1 million last year, primarily driven by the lower sales volumes. Gross profit was $9.4 million or 11.4% of net sales in the fourth quarter of 2012 compared to $16.3 million or 14.9% of net sales in the fourth quarter of 2011. The decrease in gross margin resulted from the lower sales volumes, as well as a higher proportion of commercial sales, which brings with it an incremental proportion of lower margin chassis sales in our product mix. SG&A expense decreased 18.1% to $6.6 million compared to $8.1 million in the fourth quarter of 2011. As a percentage of sales, SG&A increased to 8.0% from 7.4% up over the prior year period due to the fixed nature of certain expenses. Other income related to foreign currency transactions was a net gain of $15,000 in the fourth quarter 2012 compared to a net gain of $143,000 in the fourth quarter 2011. Interest expense in the 2012 fourth quarter was $89,000 compared to $194,000 in the fourth quarter of 2011. Net income in the 2012 fourth quarter was $1.7 million or $0.15 per diluted share compared to $4.9 million or $0.43 per diluted share in the 2011 fourth quarter. Now let me briefly review our results for the full year period ended December 31, 2012. Net sales were $342.7 million in 2012 compared to $412.7 million in the prior year period. Results in the 2012 full year period include a government-related work for a prime contractor that represented about 26.8% of our total sales and did not repeat in the 2012 year -- I should have said 2011 full year period year included. Gross profit was $40.1 million or 11.7% of sales in 2012 compared to $70.1 million or 17.0% of sales in 2011. Income taxes for the 2012 full year period included a benefit of $1.4 million primarily from federal domestic production activity deductions, as well as from federal research and development and other tax credits recognized in the third quarter. Including the income tax benefit for the 2012 full year period, the company reported net income of $9.1 million or $0.82 per diluted share compared to net income for the 2011 full year period of $23.0 million or $1.92 per diluted share. Turning now to our balance sheet. Cash and cash equivalents as of December 31, 2012, were $48.6 million compared to $43.5 million as of September 30, 2012 and $50.2 million at December 31, 2011. Accounts receivable at December 31, 2012, totaled $59.1 million compared to $63 million at September 30, 2012, and $61.1 million at December 31, 2011. Inventories were $45.0 million at December 31, 2012, compared to $45.2 million at September 30, 2012, and $48.2 million at December 31, 2011. Accounts payable at December 31, 2012, were $30.7 million compared to $31.5 million at September 30, 2012, and $39.7 million at December 31, 2011. We continue to operate with no borrowings under our $25 million unsecured revolving credit facility. Now I will turn the call back to Jeff for further remarks. Jeffrey I. Badgley: Thanks, Vince. Overall, 2012 included numerous economic challenges and headwinds that affected our business. Despite these challenges, we turned in solid financial and operational performance. Additionally, we continued our progress to position the company for long-term growth by expanding our markets, enhancing our product line and maximizing our profitability and return value to our shareholders. In Europe, we made significant progress in expanding our distribution channels, growing our network and attracting new customers. We continue to believe that this region provides good growth opportunities when economic conditions improve, and we are poised to take advantage of the eventual recovery in these markets. Let me also provide you an update on the French military order. After several months of successful testing, shipments are scheduled to begin on the initial order of 50 units in the second quarter of 2013 and are scheduled to continue into late 2014. Along with investing in the long-term growth of our company, we continue to take the necessary steps to manage our costs to drive a lean and efficient business model with an emphasis on operational cost controls without sacrificing the resources necessary for the long-term success of the company. The unusually large revenue headwinds we faced in 2012 masked some of the benefits of actions we have taken at this point, and we expect them to become clearer as we move through 2013. Turning to our outlook for 2013. While we have seen demand levels inch higher, our overall visibility is still limited as our consumer sentiment remains below normal levels. However, we believe the demand improvement is also indicative of improved levels of consumer sentiment in the domestic commercial market. We will closely monitor demand levels as we would expect to continue to see peaks and values in consumer sentiment in the coming months. Raw material costs driven by the price of fuel remain somewhat volatile. As a result, we announced a price increase of approximately 3% in late January to mitigate the rising cost. Our strategic initiatives will focus on operational execution, product innovation and geographic expansion. We will also focus on maximizing shareholder value, which is driven by our solid balance sheet and strong free cash flows. We believe these initiatives position us to generate growth opportunities going forward, assuming a continued broader economic recovery. On a final note, we are excited about the formation of Delavan Automotive LLC in late December to manufacture and sell automobile transport trailers in the United States and Canada. We own a controlling interest in Delavan, with the minority partner being the LOHR Group, a world leader in providing automobile transport trailers. Production of these trailers is scheduled to begin in 2013. While this venture is not expected to represent a significant portion of our business in the future, it does demonstrate our ability to leverage our manufacturing base with natural expansions of our existing product offering. In closing, I would like to thank our employees, our shareholders, suppliers and our customers for their ongoing support of Miller Industries. With that, we're ready to take your questions. Thank you.

[Operator Instructions] And the first question we have comes from Rick D'Auteuil of Columbia Management. Richard G. D'Auteuil - Columbia Funds Series Trust I- Columbia Small Cap Core Fund: Just a number I missed in your presentation, the cash number that Vince provided? J. Vincent Mish: Total cash? Richard G. D'Auteuil - Columbia Funds Series Trust I- Columbia Small Cap Core Fund: Yes. J. Vincent Mish: At the end of the year, it was $48.6 million. And that's -- it's $48.6 million, it was $43.5 million at September, and $50.2 million at December 31, 2011. Richard G. D'Auteuil - Columbia Funds Series Trust I- Columbia Small Cap Core Fund: And on the French order, they begin being shipped in Q2 of this year, and is it the 50 units that will be spread out over into 2014 or that's just the first wave and you expect a bigger number to be shipped over the duration that you talked about through the '14 period? Jeffrey I. Badgley: Well, the question -- I guess, the question is do we expect to ship more than 50 between 2013 and 2014? The answer to that is no. The second question, if I heard you right, Rick, was, is the 50 the first tranche of more? And the answer to that at this point is the original bid was for 150. It's supposed to come in 3 tranches. We've received POs on the first tranche, but we have not received POs on the second or third tranche. Richard G. D'Auteuil - Columbia Funds Series Trust I- Columbia Small Cap Core Fund: Okay. So through what period... William G. Miller: And we're not sure that they will ever come. Richard G. D'Auteuil - Columbia Funds Series Trust I- Columbia Small Cap Core Fund: Okay. Through what period of '14 did you say? This 50 units is to be completed by when? Jeffrey I. Badgley: By the third quarter of '14. Richard G. D'Auteuil - Columbia Funds Series Trust I- Columbia Small Cap Core Fund: Okay. Over 5 quarters you'll ship those units? Jeffrey I. Badgley: Yes. Richard G. D'Auteuil - Columbia Funds Series Trust I- Columbia Small Cap Core Fund: The -- is that similar to the U.S. military where -- is it with or without chassis? I guess, how does that get accounted for? Jeffrey I. Badgley: It is without chassis. It is not similar to our past history with U.S. military. The U.S. military was volume with quick delivery, which of course was a blessing at the time. However, this year, working against that comparable, it became a curse. But the -- no, it's a more slow steady delivery schedule than U.S. military. Richard G. D'Auteuil - Columbia Funds Series Trust I- Columbia Small Cap Core Fund: Okay. But without chassis is accretive to margin? J. Vincent Mish: Oh, yes. Yes. Jeffrey I. Badgley: Yes, sir. Richard G. D'Auteuil - Columbia Funds Series Trust I- Columbia Small Cap Core Fund: Okay. And then on the automotive, the Delavan opportunity. Your partner is in the business already. Why did they -- I guess, I'm scratching my head on why an incumbent would take on a partner. What do they gain in the equation other than sort of competing with themselves to some extent? Jeffrey I. Badgley: Well, LOHR is a French company that ran into financial difficulties during both the economic downturn here in the U.S. and then it got extended to Europe. Got into -- it's got a lot of subs, got into some banking situations and sold some assets off, did not want to vacate the North American automobile transport market but needed a partner to provide manufacturing and working capital for that manufacturing process to supply trailers in the U.S. as that market upticks. Richard G. D'Auteuil - Columbia Funds Series Trust I- Columbia Small Cap Core Fund: Okay. What -- historically, what was their share of the market or how many units did they do historically? Jeffrey I. Badgley: Historically, if you look at that market, the market is controlled by a private company by the name of Cottrell. They are located in Georgia. I would assume their market share is over 60%. Delavan was making headway into that market share with larger fleets in the industry, but then got to a position with LOHR's financial problems, could not deliver product into the market, lost share. And really, what we're looking at with this venture is slow steady growth. We don't want to be the big player on the market, but we see it as a perfect opportunity to load product into our Greenville manufacturing plant, take advantage of that capacity and move forward. William G. Miller: And Jeff, this is Bill. One of the things that LOHR got is a much more efficient manufacturing facility. They were having difficulties in Buffalo cost-wise. So there is a trade here. Richard G. D'Auteuil - Columbia Funds Series Trust I- Columbia Small Cap Core Fund: Okay. And why do you say you don't want to be the big guy? Is this a niche product that they're doing or is it comparable to the competitor? Jeffrey I. Badgley: No, it's very comparable to the competitor. But I think, I guess what I'm trying to say, Rick, is from a market share perspective, Cottrell is well entrenched. Obviously, the only way -- they build a great product. And if you talk to the fleets in the industry, some of those fleets own over a thousand automobile transport trailers. They're not dissatisfied with Cottrell. They are well respected, but they are looking for -- Cottrell is kind of a single manufacturer in the space of any size, and they're looking for someone that is well heeled financially to offer alternative supply chains. William G. Miller: And to handle their increasing volume, Jeff. Jeffrey I. Badgley: Right, absolutely. William G. Miller: Because delivery is an issue here. Richard G. D'Auteuil - Columbia Funds Series Trust I- Columbia Small Cap Core Fund: Okay. How -- what's the replacement -- what's the industry's replacement units per year? Jeffrey I. Badgley: Well, it's hard to talk about the automobile trailer per se because it's dominated by a private manufacturer. But if you look at trailers in general, there were -- in 2003 through 2006, there were about 233,000 trailers produced per year. And that's all trailers. That average dropped almost 83,000 trailers per year during the past downturn. And the difference amounts to a loss of almost 250,000 trailers over the course of 3 years. And that's more than the total trailer industry built in 2012. So I would answer your question with the industry is driven by new car production rates in the automobile trailer space and that there is probably a lot of pent-up demand out in the market. Richard G. D'Auteuil - Columbia Funds Series Trust I- Columbia Small Cap Core Fund: But I mean, the automotive element has to be just a little niche of that, because we own Wabash and Great Dane is out there, Utility is out there, as the 3 big players. But I'm not sure any of those 3 players are involved with this niche. I'm just curious... Jeffrey I. Badgley: No, they aren't. They are not involved. Richard G. D'Auteuil - Columbia Funds Series Trust I- Columbia Small Cap Core Fund: Is this 2% of that niche or is it -- I mean, is the automotive market -- I would think it's a very, very small fraction of that 200,000. Jeffrey I. Badgley: Yes, I would say that it is a small fraction of the total trailer industry. But it is a niche that we're very familiar with, and it's a niche that is just a natural extension of something that we already provide, which is a 6-car high-mount trailer. So it gives us an opportunity to load more products in to our facilities, improve utilization and hopefully, gain some revenue. William G. Miller: And Jeff, I think you might mention that or at least, during this downturn of the last few years, at least 2 manufacturers went out of business. Jeffrey I. Badgley: Well, certainly the #2 player which was Boydstun went out of business, and they're really -- Delavan was... William G. Miller: Nonexistent, yes. Richard G. D'Auteuil - Columbia Funds Series Trust I- Columbia Small Cap Core Fund: So -- I mean are we talking between 500 and 1,000 units per year? Is that kind of what they had historically been doing or much higher? Jeffrey I. Badgley: I think the market probably historically on average did somewhere between 1,000 and 1,300 a year. I think the fleet size has shrunk in the market to where the demands of automobile transport movement are straining the capacity of the available units in the market. Richard G. D'Auteuil - Columbia Funds Series Trust I- Columbia Small Cap Core Fund: Right. But if you're seeking maybe 20% share, so you're talking a couple hundred units is kind of what you expect. Jeffrey I. Badgley: Yes. William G. Miller: Yes, we'd be very happy with that. Richard G. D'Auteuil - Columbia Funds Series Trust I- Columbia Small Cap Core Fund: Okay. I just wanted to get a sense of the size. And margins in that, with your more efficient manufacturing, would you expect it to be comparable to your base, your core business or... Jeffrey I. Badgley: Well, I would say somewhat comparable. The joint venture is set up. They have a manufacturing license agreement with our Greenville plants, which produces margin on what they build to sell at the joint venture. And then the joint venture itself sells to the fleets and the end users in the market through distribution, and the joint venture profits from manufacturing costs provided to the joint venture, and sales costs is shared between Miller and LOHR.

[Operator Instructions] Your next question comes from Walter Lang of Avondale Partners. Walter S. Lang - Avondale Partners, LLC: I guess a question observation on recent weather trends. As we all know, the weather was very benign last winter, last year. But since the end of January, the country has been hit by a series of storms. I would have to think that would stimulate some menus of demand for your core domestic product. Jeffrey I. Badgley: Walter, I would agree with you. I mean last year was you had no winter throughout the U.S. This year, although not the total U.S., has been in places where you would think got hit hard, like Chicago for instance I think has only had 1 or 2 storms throughout the year. But given all that, it's a heck of a lot better talking to customers who last year were saying, "Hey, we didn't have a winter" to this year saying, "Hey, business has been pretty good." So my assumption is we would see some pickup in demand based on utilization of their fleets over the winter. Walter S. Lang - Avondale Partners, LLC: Okay. I mean I think Chicago has its biggest storm in 2 years this year, this week in fact. And then a follow-up on Rick's question on Delavan. So Sears is back to 15 million. So you would think that their demand from their end customers is starting to pick up. Will that require some upfront working capital requirements on your part? And then who is the end customer for that, and who's controlling the sales process? Jeffrey I. Badgley: Well, the way our agreement works with LOHR is Miller Greenville obviously will manufacture product, which means Miller Greenville will assume working capital requirements. The current market is structured whereby manufacturers sell to large fleets on a direct mode and owner operators or smaller fleets buy through distribution. Does that answer that? Walter S. Lang - Avondale Partners, LLC: But you yourselves will be manufacturing, not involved in the sales process? William G. Miller: No, no, he wants to know the sales, who's controlling that, Jeff. Jeffrey I. Badgley: Oh, I'm sorry. Miller has control of the sales process. Walter S. Lang - Avondale Partners, LLC: Are you going to put together a new division of sales force to exploit that opportunity. Jeffrey I. Badgley: Yes, absolutely. Obviously, Delavan had a few salespeople, some of which we kept, some of which we didn't. But yes, we will continue to improve that situation with the right people and more people. Walter S. Lang - Avondale Partners, LLC: Okay. And then on the military orders in addition to the French order, is there anything fermenting there? Any other worldwide militaries in which you're having dialogues? Jeffrey I. Badgley: Well, I don't want to get -- obviously, I don't want to get into specifics, but I think in past conference calls, we have always talked about we're trying to replicate our position with Navistar in Europe. I think our people in Europe have done a great job of developing relationships with European chassis manufacturers in that space. And one in particular has been down-selected in 2 or 3 bid processes. So yes, there is a long, long process. But yes, there are further or more opportunities, we think, in the future. Walter S. Lang - Avondale Partners, LLC: Okay. And then on the French order, which you just said the original bid was 150, now it's 50 units. All that, was that not the timeline the order put in place prior to recent events in North Africa where the French military is actually deployed? Jeffrey I. Badgley: Yes, certainly, certainly. Yes, it was.

Next, we have Matt Sherwood of Cooper Creek Partners.

Just had a couple of quick questions, sort of housekeeping. First of all, the working capital, obviously your sales are down a lot, but your inventories are basically flat other than chassis inventory, and your receivables are sort of unchanged. Just wondering what's going on there and whether we can hope for a better benefit this coming year. J. Vincent Mish: This is Vince. Some of that, the chassis sales have been up. And with the chassis sales, they take a while to go through but we get longer terms from our chassis suppliers on those. So that's one of the reasons that the receivables would be not down as much in that process. It's not something we have to pay for because we do get extended terms and offer extended terms on the chassis sales.

Got you. I'm just saying if you look at your free cash, obviously, you have plenty of cash on the balance sheet to pay the dividend. But if you look at your free cash flow, it's $3 million, and your dividend payments are going to be above $6 million. So you're sort of half covered. Just wondering if we're going to get covered through free cash flow or whether it's just going to be sort of bleeding down the cash position to pay the dividend. Jeffrey I. Badgley: Well, a couple of things that you should be aware of. There is pressure on the supply chain to raise prices. So knowing that we have the French military, knowing what our backlog is and knowing that we want margin improvements prior to the price increase, we did do some pre-buys on inventory to mitigate price increases because we have cash and to enhance margins, so we didn't get caught in a trap. That would be number one. Number two, I think if you came to our facility, one of the areas we've talked about in the past that we're trying to take advantage of historically, the install and paint process has been done by outside services. And we have made a strong attempt to further enhance our facility here in Chattanooga and the 2 facilities in Pennsylvania by expanding our process of installation into small wreckers and carriers versus the old process of just large wreckers and have in fact added paint to the process which keeps -- it... William G. Miller: We have to keep it longer. Jeffrey I. Badgley: It lengthens the cycle, it lengthens the time cycle of work in process versus flipping that to a receivable. And lastly, we've had great success with a new market segment that we -- has always been there, but we've never been successful getting into that market segment, and that's the rental industry with industrial carriers. And most of those carriers are going to large users, large fleets. And historically, 30% of our carriers were shipped out uninstalled. This model providing to those fleets is one of providing installed units that are more complex and again extend the cycle of completion. William G. Miller: Yes. And because they have tough delivery requirements, which is very important to them, I think we're building some inventory of those units so that we are always ready. It's not significant, but you got to build.

Got you. So there's probably not going to be any material changes in working capital terms this year to sort of going to be higher than it was when you're doing the military. And then I guess just going back to what you were saying on the price increase, you were saying you pre-bought some materials because your suppliers are going to raise prices on you or because you were going to raise prices and you can capture margin? I was just confused as to which one. Jeffrey I. Badgley: It's because we were getting pressured by our suppliers of price increases.

Next we have a follow-up from Rick D'Auteuil of Columbia Management. Richard G. D'Auteuil - Columbia Funds Series Trust I- Columbia Small Cap Core Fund: Yes, just one quick one on the Delavan opportunity. The -- was LOHR a union shop? Jeffrey I. Badgley: Well, actually, LOHR, the name of the company in the U.S. was in fact Delavan. And Delavan was, in fact, located in Buffalo, New York. And Delavan was a union shop, yes. Richard G. D'Auteuil - Columbia Funds Series Trust I- Columbia Small Cap Core Fund: Okay. So -- and is the competitor -- do you know if Cottrell is union? Jeffrey I. Badgley: No, it is not. To the best of my knowledge, it is not. Richard G. D'Auteuil - Columbia Funds Series Trust I- Columbia Small Cap Core Fund: So presumably, you will be in a better position overall then to compete on it even to more even playing field? Jeffrey I. Badgley: Well, I hope so. And I mean we're -- again, we see this as an opportunity to add revenue to the equation, spread out the fixed costs, provide products to existing customers we already have that we were serving in that market and losing as he bought a bigger trailer, and then finally, expand our customer base. So I think it's got fluxes all the way around. All we have to do is to build a quality product and provide good customer service. William G. Miller: I think, Jeff, as we were looking at that, we'd say there is no doubt Cottrell is the 800-pound gorilla in this market, and we're just trying to offer a quality product as a secondary choice and try to be effective at it.

At this time, we have no further questions. We'll go ahead and conclude our question-and-answer session. I will now like to turn the conference back over to management for any closing remarks. Gentlemen? Jeffrey I. Badgley: Well, I'd like to thank you for joining our Q4 and year-end conference call. I will be talking to you in a couple more months about Q1. Thanks again. We appreciate your support.

And we thank you, sir, and the rest of the management for your time. The conference call has now concluded. We thank you all for attending today's presentation. At this time, you may disconnect your lines. Thank you and take care.