$20.80
$60.90
bear $20.80
base $40.20
bull $60.90
margin of safety $22.00
market price* $51.47
Miller Industries builds towing and recovery equipment: car-carrier and wrecker bodies (Century, Vulcan, Chevron, Jige, Boniface, Omars and other brands) that are mounted on truck chassis supplied by third parties. Sales run mainly through about 76 North American distributor locations and over 30 foreign distributors; management believes more than 90 percent of its independent distributors carry no other towing manufacturer. Net foreign sales were $148.9 million of $790.3 million in 2025. The company acquired Italy's Omars on December 2, 2025. What the earnings record looks like. Cash earnings swing hard with chassis supply and distributor stocking, so we strip out working-capital swings and measure what the business earns after stock compensation and the capital spending needed to stay in business. Owner earnings per share, 2016 to 2025, were $0.34, $0.30, $2.75, $3.08, $2.01, $1.80, $0.65, $5.61, $5.49 and $1.89. Adding back cash interest (small now) gives the pre-lender cash flow we value: $0.51, $0.49, $2.97, $3.36, $2.19, $1.94, $0.94, $6.31, $6.33 and $2.50. 2023 and 2024 were boosted by filling a backlog while distributors stocked up (receivables reached $313 million at the end of 2024, then fell to $198 million at the end of 2025 as production was cut). Sales fell 37.2% in 2025 to $790.3 million and net income fell from $63.5 million to $23.0 million. 2022 was depressed by the chassis shortage. Anchor. We use the median of 2018 to 2025, a window that holds a pre-2020 expansion, the 2020 dip, the 2022 shortage, the 2023-24 surge and the 2025 destocking: $2.73 per share before interest, roughly $31.7 million. 2016-17 are left out because capital spending of about $25 million a year left owners almost nothing, a level of spending not seen again except in 2022. If the two surge years were also set aside, the anchor would be about $2.34 and the base value would fall to roughly the mid-$30s. Growth path check. Pre-lender cash flow per share fell about 60% in 2025 ($2.50 versus $6.33). We assume the base case starts 2026 at $2.00, below 2025 but not another 60% lower. The reasons are dated: the 10-K filed in March 2026 says distributor inventory had normalized and expects a steady flow of equipment and chassis deliveries in 2026; second-quarter 2026 net income was $7.3 million after $0.6 million in the first quarter; Omars adds capacity from December 2025. Six-month 2026 net income of $7.8 million was still below $16.5 million a year earlier, so we do not yet credit a full recovery; capital spending also ran at $12.1 million in the first half versus $6.8 million. Base case ($40.20 per share). Pre-lender cash flow per share of $2.00 in 2026, $2.40 in 2027, back to the $2.73 anchor in 2028, then 2% a year through 2035 to about $3.14, held flat to 2055 and then ending. The 2% is credited because the company has repeatedly bought small businesses (Jige in France and Boniface in the United Kingdom, Southern Hydraulic Cylinder in 2023, Omars in 2025) and has paid dividends every quarter since May 2011. We credit nothing for market growth, new products or share gains. The business is worth about $40.20 per share; it owes about $0.27 of borrowings per share against $44.7 million of year-end 2025 cash, so we treat net debt as zero, and the difference is the same $40.20. Bear case ($20.80 per share). A full downturn like the ones in the record: 2016-17 produced pre-lender cash of only about $0.50 per share and 2022 about $0.94. We use $1.60 in 2026, $1.00, $0.80 and $1.20 in 2027-2029, and a permanently lower $1.80 from 2030 through 2050, then the story ends. Drivers named: distributor stocking that has swung sales by about a third in a year, dependence on third-party chassis, exposure to steel and aluminum tariffs, and low barriers to entry the company itself cites. Business worth about $20.80; borrowings are about $3.2 million (June 30, 2026), roughly $0.27 per share, easily covered by even the worst year in this case and offset by cash, so the difference is about $20.80. Bull case ($60.90 per share). The company's own levers work: distributors finish destocking, Omars capacity is used and pricing offsets tariffs. Pre-lender cash flow of $2.40, $3.40, then $4.20 in 2028 (between the 2018-19 and 2023-24 levels), 2% a year to 2035 and flat to 2055. Worth about $60.90, owing about $0.27 per share of borrowings offset by cash, so the difference is about $60.90. Debt. Borrowings fell from $33.3 million at the end of 2025 to about $3.2 million at June 30, 2026, so no maturity materially affects any case. The credit facility's covenants (minimum tangible net worth, leverage) can restrict dividends. $30.0 million of year-end cash sat in foreign subsidiaries. What would make this wrong: the 2023-24 surge may have been the real peak rather than the exception, in which case the lower anchor applies; second-half 2026 earnings still running below 2025 would push toward the bear case. The prior analysis was built on a different basis and is not comparable. Margin-of-safety price ($22.00). We are fairly sure of the average earnings level because it comes from eight years of audited statements, but the year-to-year range is wide, from $0.49 to $6.33 per share before interest, so we are not sure of any single year. The worst plausible outcome is a repeat of the 2016-17 or 2022 troughs for several years, possibly worsened by a chassis disruption or new tariffs; the structure survives that because borrowings are only about $3.2 million. If we are wrong about the anchor (it is $2.34 not $2.73) or the pace of recovery (it takes until 2030), the shares are worth roughly the mid-$30s or a little lower. The price assumes a holding period of three years or so, and the company paid $0.80 per share of dividends in 2025. From $22.00 the bear case implies the dividends plus roughly the price back, while a base-case recovery over three years implies well over 20% a year, which is the basis for the margin-of-safety price.