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SECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549

FORM 10-K

xANNUAL REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934.

For the fiscal year ended
December 31, 2003

Commission File No. 0-24298

MILLER INDUSTRIES, INC.(Exact name of Registrant as specified in its charter)

|Tennessee                                                       
|----------------------------------------------------------------
|(State or other jurisdiction of
  incorporation or organization)
|                                                                
|62-1566286                                                      
|(I.R.S. Employer Identification No.)                            
|                                                                
|8503 Hilltop Drive, Ooltewah,
  Tennessee  37363                
|(Address of principal executive
  offices)     (Zip Code)       

Registrants telephone number,
including area code:  (423) 238-4171

Securities registered pursuant to Section
12(b) of the Act:  Common Stock, Par
Value $0.01 Per Share.

Name of each exchange on which registered:  New York Stock Exchange.

Securities registered pursuant to Section
12(g) of the Act:  None.

Indicate
by check mark whether the Registrant (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the Registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.Yes x  No o.

Indicate
by check mark if disclosure of delinquent filers pursuant to Item 405 of
Regulation S-K is not contained herein and will not be contained, to the best
of Registrants knowledge, in definitive proxy or information statements incorporated
by reference in Part III of this Form 10-K or any amendment to this Form
10K.  x

Indicate
by check mark whether the registrant is an accelerated filer (as defined in
Exchange Act Rule 12b-2). Yes o  No  x.

The aggregate market value of the voting
stock for non-affiliates (which for purposes hereof are all holders other than
executive officers and directors) of the Registrant as of June 30, 2003 is
$26,401,870 (based on 7,742,484 shares held by non-affiliates at $3.41 per
share, the last sale price on the NYSE on June 30, 2003).

At
March 15, 2004 there were 10,663,403 shares of Common Stock, par value $0.01
per share, outstanding.

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MESSAGE

TABLE OF CONTENTS
FORM 10-K ANNUAL REPORT

|PART I                        
|------------------------------
|                              
|ITEM 1.                       
|ITEM 2.                       
|ITEM 3.                       
|ITEM 4.                       
|                              
|PART II                       
|                              
|ITEM 5.                       
|ITEM 6.                       
|ITEM 7.                       
|ITEM 7A.                      
|ITEM 8.                       
|ITEM 9.                       
|ITEM 9A.                      
|                              
|PART III                      
|                              
|ITEM 10.                      
|ITEM 11.                      
|ITEM 12.                      
|ITEM 13.                      
|ITEM 14.                      
|                              
|PART IV                       
|                              
|ITEM 15.                      
|                              
|FINANCIAL
  STATEMENTS        
|                              
|FINANCIAL
  STATEMENT SCHEDULE

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PART I

|ITEM 1. | BUSINESS
|------- | --------

GENERAL

Miller
Industries, Inc. is the worlds largest manufacturer of vehicle towing and
recovery equipment, with executive offices in Ooltewah, Tennessee and Atlanta,
Georgia and manufacturing operations in Tennessee, Pennsylvania, France and
England.

Since
1990, we have developed or acquired several of the most well-recognized brands
in the towing and recovery equipment manufacturing industry.  Our strategy has been to diversify our line
of products and increase our market share in the industry through a combination
of internal growth and development and acquisitions of complementary
businesses.

In
February 1997, we formed our towing services division, RoadOne, to offer a
broad range of towing and transportation services.  We subsequently disposed of all towing services operations.  In addition, we have made the decision to
sell our distribution group.  As a
result of these decisions, both the towing services segment and the
distribution group have been classified as discontinued operations.

As
of December 31, 2003, we had sold or closed all of our RoadOne terminals and
one distributor location.  We have sold
three distributors since December 31, 2003 and five distributors remain to be
sold.

INCLUSION OF
FORWARD-LOOKING STATEMENTS

Certain
statements in this Annual Report, including but not limited to Item 7
Managements Discussion and Analysis of Financial Condition and Results of
Operations, may be deemed to be forward-looking statements, as defined in the
Private Securities Litigation Reform Act of 1995.  Such forward-looking statements are made based on our
managements belief as well as assumptions made by, and information currently
available to, our management pursuant to safe harbor provisions of the
Private Securities Litigation Reform Act of 1995.  Our actual results may differ materially from the results
anticipated in these forward-looking statements due to, among other things, factors
set forth below under the heading Risk Factors, and in particular, the risks
associated with the wind down of the towing services segment and the risks
associated with the terms of our substantial indebtedness.  Such factors are not exclusive we do not
undertake to update any forward-looking statement that may be made from time to
time by, or on behalf of, our company.

RISK FACTORS

We have a high level of indebtedness and certain requirements that we
must comply with under our credit facilities that may affect the growth and
profitability of our business.

As
of January 31, 2004 our debt included approximately $30.9 million under our
senior credit facility and $12.9 million under our junior credit facility.  This amount includes approximately $3.2
million under our junior credit facility that was later converted into common
stock upon the completion of the exchange described under the heading Related
Party Transactions.

As
a consequence of our level of indebtedness, a substantial portion of our cash
flow from operations as well as from sales of our distributorships must be
dedicated to debt service requirements. 
The terms of our outstanding indebtedness restrict our ability and our
subsidiaries ability to, among other things, incur additional indebtedness, pay
dividends or make certain other restricted payments or investments in certain
situations, consummate certain asset sales, enter into certain transactions
with affiliates, incur liens, or merge or consolidate with any other person or
sell, assign, transfer, lease, convey or otherwise dispose of all or
substantially all of our or their assets. 
Our credit facilities also require us to meet certain financial tests
and comply with certain other reporting, affirmative and negative
covenants.  We have experienced
difficulties meeting these financial tests in the past and may continue to do
so in the future. In addition,

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our substantial indebtedness may make us more vulnerable to general
adverse economic and industry conditions. 
Our credit facilities are collateralized
by liens on all of our assets.  The
liens give the lenders the right to foreclose on our assets under certain
defined events of default and such foreclosure could allow the lenders to gain
control of our operations.

Our
former independent auditors included a going concern explanatory paragraph in
their report on our financial statements for the year ended December 31, 2002
as a result of our condition of being in default of certain covenants under our
junior and senior credit facilities and as a result of our junior credit
facility maturing in 2003.  Our junior
credit facility has since been restructured and we have entered into an
amendment with the junior lenders whereby the debt under the junior credit
facility will not be due until July 31, 2005.

If
we were to fail to comply with the requirements under the credit facilities,
such non-compliance would result in an event of default, which if not waived by
the lending groups would result in the acceleration of the amounts due under
the respective credit facility as well as other remedies.  Under these circumstances, we could be
required to find alternative funding sources, or to sell assets.  There is no assurance that we would be able
to obtain any such refinancing or that we would be able to sell assets on terms
that are acceptable to us or at all. If we were to be unsuccessful in our
efforts to refinance the credit facility, we might be required to seek
bankruptcy court or other protection from our creditors.  For more information regarding the impact of
our substantial indebtedness on our liquidity, see Managements Discussion and
Analysis of Financial Conditions and Results of Operations  Liquidity and
Capital Resources, and Notes 2 and 8 to our Consolidated Financial Statements
for the year ended December 31, 2003.

The wind down of our towing services division may divert the attention
of our management from our core manufacturing business and we still have
retained certain liabilities related to the towing services division.

We
sold all of our towing services businesses in a relatively short period of time
during fiscal 2003.  The net cash
proceeds from these sales exceeded the RoadOne revolving commitment under the
senior credit facility associated with the sold operations, as well as other
associated liabilities.  Almost all of
these businesses will continue to operate under new ownership and in general
their customary operating liabilities will be assumed by the new owners.  We nevertheless will be subject to some
continuing liabilities with respect to the pre-sale operations of these
businesses, including, for example, liabilities related to litigation, certain
trade payables, parent guarantees, workers compensation and other insurance,
surety bonds, and real estate.  It is
possible that the sale proceeds and the remaining assets of the towing services
segment will not be sufficient to satisfy such liabilities.  We may also be subject to inefficiencies,
management distractions, additional expenses and uncertainties resulting from
the rapid wind down of the infrastructure that was developed to provide
administrative support to over 100 towing service locations.  Although we believe that we can manage the wind
down effectively, there can be no assurance that such will be the case.  Even if we are able to manage the wind down
effectively, it may nevertheless have an adverse impact on our operating
results.

In
addition, we have experienced difficulty in maintaining our insurance and surety
bond coverage primarily as a result of disruption in these markets resulting
from the events of September 11, 2001, general economic conditions and our
operating results.

We have experienced certain difficulties and unexpected expenses, and
may continue to do so, related to entering into new lines of business.

Historically,
our expertise has been in the manufacture of towing and recovery equipment and
we had no prior operating experience in other lines of business prior to
1997.  Commencing during fiscal 1997, we
entered three new lines of business through the acquisition of towing and
recovery equipment distributors and towing services companies, and the
establishment of our Financial Services Group. 
Our operation of these businesses has been subject to all of the risks
inherent in the establishment of a new business enterprise.  Such acquisitions presented the additional
risk that newly-acquired businesses could be viewed as being in competition
with our other customers.  Although the
new businesses are closely related to our towing and recovery equipment
manufacturing business, we experienced difficulties and unexpected

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expenses establishing and operating these new businesses, and may
continue to experience such difficulties and expenses as we wind down the
towing services segment and the distribution group.

Our business is subject to the cyclical nature of our industry, general
economic conditions and weather. 
Adverse changes with respect to any 
of these factors may lead to a downturn in our business.

The
towing and recovery industry is cyclical in nature and has been affected
historically by high interest rates, insurance costs, and economic conditions
in general. Accordingly, a downturn in the economy could have a material
adverse effect on our operations, as has been the case during the current
general economic downturn.  The industry
is also influenced by consumer confidence and general credit availability, and
by weather conditions, none of which is within our control.

Our dependence upon outside suppliers for our raw materials and other
purchased component parts, leaves us 
subject to price increases and delays in receiving supplies of such
materials or parts.

We
are dependent upon outside suppliers for our raw material needs and other
purchased component parts and, therefore, are subject to price increases and
delays in receiving supplies of such materials and component parts.  There can be no assurance that we will be
able to pass any price increase on to our customers.  Although we believe that sources of our materials and component
parts will continue to be adequate to meet our requirements and that
alternative sources are available, events beyond our control could have an
adverse effect on the cost or availability of such materials and component
parts.  Additionally, demand for our
products could be negatively affected by the unavailability of truck chassis,
which are manufactured by third parties and are typically purchased separately
by our distributors or by towing operators and are sometimes supplied by us.

Our competitors could impede our ability to attract new customers, or
attract current customers away from us.

The
towing and recovery equipment manufacturing industry is highly
competitive.  Competition for sales
exists at both the distributor and towing-operator levels and is based
primarily on product quality and innovation, reputation, technology, customer
service, product availability and price. 
In addition, sales of our products are affected by the market for used
towing and recovery equipment.  Certain
of our competitors may have substantially greater financial and other resources
and may provide more attractive dealer and retail customer financing
alternatives than us.  We may also face
significant competition from large competitors as we enter other new lines of
business, including financial services.

Our future success depends upon our ability to develop proprietary
products and technology.

Historically,
we have been able to develop or acquire patented and other proprietary product
innovations which have allowed us to produce what management believes to be
technologically advanced products relative to most of our competition.  Certain of our patents expire in 2004 at
which time we may not have a continuing competitive advantage through
proprietary products and technology.  In
addition, pursuant to the terms of a consent judgment entered into in 2000 with
the Antitrust Division of the U.S. Department of Justice, we are required to
offer non-exclusive royalty-bearing licenses to certain of our key patents to
all wrecker and car carrier manufacturers. 
Our historical market position has been a result, in part, of our
continuous efforts to develop new products. 
Our future success and ability to maintain market share will depend, to
an extent, on new product development.

We depend upon skilled labor to manufacture our products.  If we experience problems hiring and
retaining skilled labor, our business may be negatively affected.

The
timely production of our wreckers and car carriers requires an adequate supply
of skilled labor.  In addition, the
operating costs of each manufacturing facility can be adversely affected by
high turnover in skilled positions. 
Accordingly, our ability to increase sales, productivity and net
earnings will be limited to a degree by our ability to employ the skilled
laborers necessary to meet our requirements. 
There can be no assurance that we will be able to maintain an adequate
skilled labor force necessary to efficiently operate our facilities.  The United Auto Workers Union filed a
representation petition with the National Labor Relations Board for the
employees at our Ooltewah, Tennessee

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manufacturing plant.  A vote was
held on such union representation on April 11, 2002.  The employees of the Ooltewah manufacturing plant voted against
joining the United Auto Workers Union. 
There can be no assurance that the employees at the Ooltewah
manufacturing plant or other of our employees may not choose to become
unionized in the future.

If our common stock was delisted from the New York Stock Exchange the
market for our common stock may be substantially less active and it may impair
the ability of our shareholders to buy and sell our common stock.

To
remain listed on the New York Stock Exchange, the average closing price of our
stock must not drop below $1.00 per share for 30 days or more.  Our common stock price was below $1.00 per
share for an extended period during 2001 and the common stock was in danger of
being delisted.  A one-for-five reverse
stock split was effected on October 1, 2001, and the price of the common stock
has not been below $2.10 since that time. 
We received notification from the New York Stock Exchange on June 26,
2003 that, based on market information and information in our recent public
filings, we were not in compliance with the New York Stock Exchanges continued
listing standards.  The New York Stock
Exchange requires shareholders equity of not less than $50.0 million and a
30-day average market capitalization of $50.0 million.  Our shareholders equity was $28.0 million
as of December 31, 2003.  As of March 1,
2004, we had a 30-day average market capitalization of $96.6 million.

We
have compiled a three-pronged plan for regaining compliance with the continued
listing standards.  Our plan is to
restructure our bank facilities and rationalize the timing of our debt service,
dispose of our remaining RoadOne and distributor operations within the time
period specified and focus all of our resources, manpower as well as financial,
on returning the manufacturing operations to their historically profitable
levels.  In September 2003, we were
notified that the New York Stock Exchange accepted our plan to regain
compliance with the New York Stock Exchange continued listing standards related
to shareholders equity and market capitalization within an eighteen month
timeframe.  With the approval by
shareholders of the conversion of a portion of our subordinated debt into our
common stock, we have completed the restructuring of our facilities.  We have also disposed of the remainder of
our RoadOne operations and are in the process of disposing of our
distributors.  During this timeframe, we
will be subject to quarterly monitoring for compliance by the New York Stock
Exchange.

If
our common stock were to be delisted from the New York Stock Exchange, it is
likely that the trading market for our common stock would be substantially less
active, and the ability of shareholders to buy and sell shares of our common
stock would be materially impaired. In addition, the delisting of our stock
could adversely affect our ability to enter into future equity financing transactions.  In the event that our stock is delisted from
the New York Stock Exchange, we would pursue listing on an alternative national
securities exchange or association.

Any loss of the services of our key executives could have a material
adverse impact on our operations.

Our
success is highly dependent on the continued services of our management
team.  The loss of services of one or
more key members of our senior management team could have a material adverse
effect on us.

A product liability claim in excess of our insurance coverage or an
inability to acquire insurance at commercially reasonable rates could have a
material adverse effect upon our business.

We
are subject to various claims, including automobile and product liability
claims arising in the ordinary course of business, and may at times be a party
to various legal proceedings incidental to our business.  We maintain reserves and liability insurance
coverage at levels based upon commercial norms and our historical claims
experience.  A successful product
liability or other claim brought against us in excess of our insurance coverage
or the inability of us to acquire insurance at commercially reasonable rates
could have a material adverse effect upon our business, operating results and
financial condition.

A continued increase in insurance and fuel costs will have a material
effect upon our business.

As
a result of the events of September 11, 2001 and other general economic
factors, we have experienced a substantial increase in our insurance costs and
have experienced fluctuations in fuel and other transportation costs.  Our

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customers have also experienced reduced availability of credit for
purchasing equipment.  There can be no
assurance that these costs will not continue to increase for us.  Such increases have had, and may continue to
have, a material effect upon our business and operating results.

Our stock price may fluctuate greatly as a result of the general
volatility of the stock market.

From
time to time, there may be significant volatility in the market price for our
common sock.  Our quarterly operating
results, changes in earnings estimated by analysts, changes in general
conditions in our industry or the economy or the financial markets or other
developments affecting us could cause the market price of the common stock to
fluctuate substantially.  In addition,
in recent years the stock market has experienced significant price and volume
fluctuations.  This volatility has had a
significant effect on the market prices of securities issued by many companies
for reasons unrelated to their operating performance.

Our Chairman and Co-Chief Executive Officer owns a substantial interest
in our common stock.  He may vote his
shares in ways with which you disagree.

William
G. Miller, our chairman, beneficially owns approximately 20% of the outstanding
shares of common stock.  Accordingly,
Mr. Miller has the ability to exert significant influence over our business
affairs, including the ability to influence the election of directors and the
result of voting on all matters requiring shareholder approval.

Our charter and bylaws contain anti-takeover provisions that may make
it more difficult or expensive to acquire us in the future or may negatively
affect our stock price.

Our
charter and bylaws contain restrictions that may discourage other persons from
attempting to acquire control of us, including, without limitation,
prohibitions on shareholder action by written consent and advance notice
requirements respecting amendments to certain provisions of our charter and
bylaws. In addition, our charter authorizes the issuance of up to 5,000,000
shares of preferred stock.  The rights
and preferences for any series of preferred stock may be set by the board of
directors, in its sole discretion and without shareholder approval, and the
rights and preferences of any such preferred stock may be superior to those of
common stock and thus may adversely affect the rights of holders of common
stock.

TOWING AND RECOVERY
EQUIPMENT

We
offer a broad range of towing and recovery equipment products that meet most
customer design, capacity and cost requirements.  We manufacture the bodies of wreckers and car carriers, which are
installed on truck chassis manufactured by third parties.  Wreckers generally are used to recover and
tow disabled vehicles and other equipment and range in type from the
conventional tow truck to large recovery vehicles with rotating hydraulic booms
and 70-ton lifting capacities.  Car
carriers are specialized flat bed vehicles with hydraulic tilt mechanisms that
enable a towing operator to drive or winch a vehicle onto the bed for
transport.  Car carriers transport new
or disabled vehicles and other equipment and are particularly effective over
longer distances.

Our
products are sold primarily through independent distributors that serve all 50
states, Canada and Mexico, and other foreign markets including Europe, the
Pacific Rim and the Middle East.  As a
result of our ownership of Jige in France and Boniface in the United Kingdom,
we have substantial distribution capabilities in Europe.  While most of our distributor agreements do
not contain exclusivity provisions, management believes that approximately 65%
of our independent distributors sell our products on an exclusive basis.  In addition to selling our products to
towing operators, the distributors provide parts and service.  We also have independent sales
representatives that exclusively market our products and provide expertise and
sales assistance to distributors. 
Management believes the strength of our distribution network and the
breadth of our product offerings are two key advantages over our competitors.

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Product Line

We
manufacture a broad line of wrecker, car carrier and trailer bodies to meet a
full range of customer design, capacity and cost requirements. The products are
marketed under the Century, Vulcan, Challenger, Holmes, Champion, Chevron,
Eagle, Titan, Jige, and Boniface brand names.

Wreckers.Wreckers are generally used to
recover and tow disabled vehicles and other equipment and range in type from
the conventional tow truck to large recovery vehicles with 70-ton lifting
capacities.  Wreckers are available with
specialized features, including underlifts, L-arms and scoops, which lift
disabled vehicles by the tires or front axle to minimize front end damage to
the towed vehicles.  Certain heavy duty
wrecker models offer rotating booms, which allow heavy duty wreckers to recover
vehicles from any angle, and proprietary remote control devices for operating
wreckers.  In addition, certain light
duty wreckers are equipped with the patented Express automatic wheellift hookup
device that allow operators to engage a disabled or unattended vehicle without
leaving the cab of the wrecker.

Our
wreckers range in capacity from 8 to 70 tons, and are characterized as light
duty and heavy duty, with wreckers of 16-ton or greater capacity being
classified as heavy duty.  Light duty
wreckers are used to remove vehicles from accident scenes and vehicles
illegally parked, abandoned or disabled, and for general recovery.  Heavy duty wreckers are used in commercial
towing and recovery applications including overturned tractor trailers, buses,
motor homes and other vehicles.

Car
Carriers.Car
carriers are specialized flat-bed vehicles with hydraulic tilt mechanisms that
enable a towing operator to drive or winch a vehicle onto the bed for
transport.  Car carriers are used to
transport new or disabled vehicles and other equipment and are particularly
effective for transporting vehicles or other equipment over longer distances.  In addition to transporting vehicles, car
carriers may also be used for other purposes, including transportation of
industrial equipment. In recent years, professional towing operators have added
car carriers to their fleets to complement their towing capabilities.

Multi-Vehicle
Transport Trailers.Multi-vehicle
transport trailers are specialized auto transport trailers with upper and lower
decks and hydraulic ramps for loading vehicles. The trailers are used for
moving multiple vehicles for auto auctions, car dealerships, leasing companies,
and other similar applications. The trailers are easy to load with 6 to 7
vehicles, and with the optional cab rack, can haul up to 8 vehicles.  The
vehicles can be secured to the transport quickly with ratchet and chain
tie-downs that are mounted throughout the frame of the transport. In recent
years, professional towing operators have added auto transport trailers to
their fleets to add to their towing capabilities.

Brand Names

We
manufacture and market our wreckers, car carriers and trailers under ten
separate brand names.  Although certain
of the brands overlap in terms of features, prices and distributors, each brand
has its own distinctive image and customer base.

Century®.  The Century brand is our top-of-the-line
brand and represents what management believes to be the broadest product line
in the industry.  The Century line was
started in 1974 and produces wreckers ranging from the 8-ton light duty to the
70-ton heavy duty models and car carriers in lengths from 171⁄2 to 26 feet.  Management believes that the Century brand
has a reputation as the industrys leading product innovator.

Vulcan®.Our Vulcan product line includes
a range of premium light and heavy duty wreckers, car carriers and other towing
and recovery equipment.  The Vulcan line
is operated autonomously with its own independent distribution network.

Challenger®.Our Challenger products compete
with the Century and Vulcan products and constitute a third premium product
line.  Challenger products consist of
light to heavy duty wreckers with capacities ranging from 8 to 70 tons, and car
carriers with lengths ranging from 171⁄2 to 26 feet.  The Challenger line was started in 1975 and is known for high performance
heavy duty wreckers and aesthetic design.

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Holmes®.  Our Holmes product line includes mid-priced
wreckers with 8 to 16 ton capacities and car carriers in 171⁄2 to 21 foot
lengths.  The Holmes wrecker was first
produced in 1916. The Holmes name has been the most well-recognized and leading
industry brand both domestically and internationally through most of this
century.

Champion®.  The Champion brand, which was introduced in
1991, includes car carriers which range in length from 171⁄2 to 21 feet.  The Champion product line, which is
generally lower-priced, allows us to offer a full line of car carriers at
various competitive price points. In 1993, the Champion line was expanded to
include a line of economy tow trucks with integrated boom and underlift.

Chevron.  Our Chevron product line is comprised
primarily of premium car carriers. 
Chevron produces a range of premium single-car, multi-car and industrial
carriers, light duty wreckers and other towing and recovery equipment.  The Chevron line is operated autonomously
with its own independent distribution network that focuses on the salvage
industry.

Eagle®.  Our Eagle products consist of light duty
wreckers with the Eagle Claw hook-up system that allows towing operators to
engage a disabled or unattended vehicle without leaving the cab of the tow
truck.  The Eagle Claw hook-up
system, which was patented in 1984, was originally developed for the
repossession market.  Since acquiring
Eagle, we have upgraded the quality and features of the Eagle product line and
expanded its recovery capability.

Titan.
Our Titan product line is comprised of premium multi-vehicle transport trailers
which can transport up to 8 vehicles depending on configuration.

Jige.Our Jige product line is
comprised of a broad line of light and heavy duty wreckers and car carriers
marketed primarily in Europe.  Jige is a
market leader best known for its innovative designs of car carriers and light
wreckers necessary to operate within the narrow confines of European cities.

Boniface.  Our Boniface product line is comprised
primarily of heavy duty wreckers marketed primarily in Europe.  Boniface produces a wide range of heavy duty
wreckers specializing in the long underlift technology required to tow modern
European tour buses.

Our
Holmes and Century brand names are associated with four of the major
innovations in the industry: the rapid reverse winch, the tow sling, the
hydraulic lifting mechanism, and the underlift with parallel linkage and
L-arms.  Our engineering staff, in
consultation with manufacturing personnel, uses computer-aided design and
stress analysis systems to test new product designs and to integrate various
product improvements. In addition to offering product innovations, we focus on
developing or licensing new technology for our products.

Manufacturing
Process

We
manufacture wreckers, car carriers and trailers at six manufacturing facilities
located in the United States, France and England.  The manufacturing process for our products consists primarily of
cutting and bending sheet steel or aluminum into parts that are welded together
to form the wrecker, car carrier body or trailer.  Components such as hydraulic cylinders, winches, valves and
pumps, which are purchased by us from third-party suppliers, are then attached
to the frame to form the completed wrecker or car carrier body.  The completed body is either installed by us
or shipped by common carrier to a distributor where it is then installed on a
truck chassis.  Generally, the wrecker
or car carrier bodies are painted by us with a primer coat only, so that towing
operators can select customized colors to coordinate with chassis colors or
fleet colors.  To the extent final
painting is required before delivery, we contract with independent paint shops
for such services.

We
purchase raw materials and component parts from a number of sources.  Although we have no long-term supply
contracts, management believes we have good relationships with our primary
suppliers.  We have experienced no
significant problems in obtaining adequate supplies of raw materials and
component parts to meet the requirements of our production schedules.  Management believes that the materials used
in the production of our products are available at

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competitive prices from an adequate number of alternative
suppliers.  Accordingly, management does
not believe that the loss of a single supplier would have a material adverse
effect on our business.

Towing and
Recovery Equipment Sales and Distribution

Company-owned
Distributors

During
2002, our board of directors and management made the decision to sell our
distributors.  Our distribution group as
of December 31, 2003 owned eight towing and recovery equipment distributors
located in California, Colorado, Florida, Illinois, Indiana and British
Columbia and Ontario, Canada and had sold one distributor.  We intend to sell all of our distributors as
quickly as possible.  All assets,
liabilities and results of operations of the distribution group are now presented
separately as discontinued operations and all prior period financial information
is presented to conform to this treatment.

Independent
Distributors and Sales

Management
categorizes the towing and recovery market into three general product types:
light duty wreckers, heavy duty wreckers and car carriers.  The light duty wrecker market consists
primarily of professional wrecker operators, repossession towing services,
municipal and federal governmental agencies, and repair shop or salvage company
owners.  The heavy duty market is
dominated by professional wrecker operators serving the needs of commercial
vehicle operators.  The car carrier
market, historically dominated by automobile salvage companies, has expanded to
include equipment rental companies that offer delivery service and professional
towing operators who desire to complement their existing towing
capabilities.  Management estimates that
there are approximately 30,000 professional towing operators and 80,000 service
station, repair shop and salvage operators comprising the overall towing and recovery
market.

Our
sales force, which services our distribution network, consists of sales
representatives whose responsibilities include providing administrative and
sales support to the entire distributor base. 
Sales representatives receive commissions on direct sales based on
product type and brand and generally are assigned specific territories in which
to promote sales of our products and to maintain customer relationships.

We
have developed a diverse customer base consisting of approximately 175
distributors in North America, who serve all 50 states, Canada and Mexico, and
approximately 50 distributors that serve other foreign markets. During the year
ended December 31, 2003, no single distributor accounted for more than 5% of
our sales.  Management believes our broad and diverse
customer base provides us with the flexibility to adapt to market changes,
lessens our dependence on particular distributors and reduces the impact of
regional economic factors.

To
support sales and marketing efforts, we produce demonstrator models that are
used by our sales representatives and distributors. To increase exposure to our
products, we also have served as the official recovery team for many automobile
racing events, including the Daytona, Talladega, Atlanta and Darlington NASCAR
races, the Grand Prix in Miami, the Suzuka in Japan, the IMSA 24 Hours at
Daytona, Molson Indy, the Brickyard, and the Indy 500 races, among others.

We
routinely respond to requests for proposals or bid invitations in consultation
with our local distributors.  Our
products have been selected by the United States General Services
Administration as an approved source for certain federal and defense
agencies.  We intend to continue to
pursue government contracting opportunities.

The
towing and recovery equipment industry places heavy marketing emphasis on
product exhibitions at national and regional trade shows. In order to focus our
marketing efforts and to control marketing costs, we have reduced our
participation in regional trade shows and now concentrate our efforts on five
of the major trade shows each year.  We
work with our distributor network to concentrate on various regional shows.

8

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Product
Warranties and Insurance

We
offer a 12-month limited manufacturers product and service warranty on our
wrecker and car carrier products.  Our
warranty generally provides for repair or replacement of failed parts or
components.  Warranty service is usually
performed by us or an authorized distributor. 
Management believes that we maintain adequate general liability and
product liability insurance.

Backlog

We
produce virtually all of our products to order.  Our backlog is based upon customer purchase orders that we
believe are firm.  The level of backlog
at any particular time, however, is not an appropriate indicator of our future
operating performance.  Certain purchase
orders are subject to cancellation by the customer upon notification.  Given our production and delivery schedules
management believes that the current backlog represents less than three months
of production.

Competition

The
towing and recovery equipment manufacturing industry is highly competitive for
sales to distributors and towing operators. 
Management believes that competition in the towing and recovery
equipment industry is a function of product quality and innovation, reputation,
technology, customer service, product availability and price.  We compete on the basis of each of these
criteria, with an emphasis on product quality and innovation and customer
service.  Management also believes that
a manufacturers relationship with distributors is a key component of success
in the industry.  Accordingly, we have
invested substantial resources and management time in building and maintaining
strong relationships with distributors. 
Management also believes that our products are regarded as high quality
within their particular price points. 
Our marketing strategy is to continue to compete primarily on the basis
of quality and reputation rather than solely on the basis of price, and to
continue to target the growing group of professional towing operators who as
end-users recognize the quality of our products.

Traditionally,
the capital requirements for entry into the towing and recovery manufacturing
industry have been relatively low. 
Management believes a manufacturers capital resources and access to technological
improvements have become a more integral component of success in recent
years.  Accordingly, management believes
that our ownership of patents on certain of the industrys leading technologies
has given us a competitive advantage. 
Certain of our competitors may have greater financial and other
resources and may provide more attractive dealer and retail customer financing
alternatives than we do.

Employees

As
of December 31, 2003, we employed approximately 950 people in our towing and
recovery equipment manufacturing and distribution operations.  None of our employees are covered by a
collective bargaining agreement, though our employees in France and England
have certain similar rights provided by their respective governments
employment regulations.  We consider our
employee relations to be good.

TOWING SERVICES 
ROADONE

In
February 1997, we formed our towing services division, RoadOne, to build a
national towing services network. 
During April 2000, we announced plans to accelerate our efforts to
aggressively reduce expenses in the towing services segment at the corporate
level, as well as in the field.  During
the quarter ended June 30, 2002, our management and board of directors approved
a plan to dispose of certain identified assets, which primarily consisted of
underperforming markets of the towing services segment.  In October 2002, we made the decision to
sell all remaining towing services operations. 
As of December 31, 2003 all of the towing services markets had either
been sold or closed.

In
accordance with SFAS No. 144, we began reporting the entire towing services
segment as discontinued operations as of the beginning of the fourth quarter of
2002.  Accordingly, the depreciation of
fixed assets ceased on

9

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October 1, 2002.  As of such
date, all assets, liabilities, and results of operations are separately
presented as discontinued operations and all prior period financial information
is presented to conform with this treatment.

Employees

As
of December 31, 2003, the few RoadOne employees that remained had been
transferred to our towing and recovery equipment operations.

PATENTS AND
TRADEMARKS

The
development of the underlift parallel linkage and L-arms in 1982 is considered
one of the most innovative developments in the wrecker industry in the last 25
years.  This technology is significant
primarily because it allows the damage-free towing of newer aerodynamic
vehicles made of lighter weight materials. 
Patents for this technology were granted to an operating subsidiary in
1987 and 1989.  These patents expire in
mid-year 2004.  This technology,
particularly the L-arms, is used in a majority of the commercial wreckers
today.  Management believes that
utilization of such devices without a license is an infringement of our
patents.  We have successfully litigated
infringement lawsuits in which the validity of our patents on this technology
was upheld, and successfully settled other lawsuits.  We also hold a number of other utility and design patents
covering other products, the Vulcan scoop wheel-retainer and the car
carrier anti-tilt device.  We have also obtained
the rights to use and develop certain technologies owned or patented by
others.  Pursuant to the terms of a
consent judgment entered into in 2000 with the Antitrust Division of the U.S.
Department of Justice, we are required to offer non-exclusive royalty-bearing
licenses to certain of our key patents to all tow truck and car carrier
manufacturers.

Our
trademarks Century, Holmes, Champion, Challenger, Formula I,
Eagle Claw Self-Loading Wheellift, Pro Star, Street Runner,
Vulcan, RoadOne, Right Approach and Extreme Angle, among others,
are registered with the United States Patent and Trademark Office.  Management believes that our trademarks are
well-recognized by dealers, distributors and end-users in their respective
markets and are associated with a high level of quality and value.

GOVERNMENT
REGULATIONS AND ENVIRONMENTAL MATTERS

Our
operations are subject to federal, state and local laws and regulations
relating to the generation, storage, handling, emission, transportation and
discharge of materials into the environment. 
Management believes that we are in substantial compliance with all
applicable federal, state and local provisions relating to the protection of
the environment.  The costs of complying
with environmental protection laws and regulations has not had a material
adverse impact on our financial condition or results of operations in the past
and is not expected to have a material adverse impact in the future.

We
are also subject to the Magnuson-Moss Warranty Federal Trade Commission
Improvement Act which regulates the description of warranties on products.  The description and substance of our
warranties are also subject to a variety of federal and state laws and
regulations applicable to the manufacturing of vehicle components.  Management believes that continued
compliance with various government regulations will not materially affect our
operations.

The
Financial Services Group is subject to regulation under various federal, state
and local laws which limit the interest rates, fees and other charges that may
be charged by it or prescribe certain other terms of the financing documents
that it enters into with its customers. 
Management believes that the additional administrative costs of
complying with these regulations will not materially affect our operations.

10

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|ITEM 2. | PROPERTIES
|------- | ----------

We
operate four manufacturing facilities in the United States.  The facilities are located in (1) Ooltewah,
Tennessee, (2) Hermitage, Pennsylvania, (3) Mercer, Pennsylvania,
and (4) Greeneville, Tennessee.  The
Ooltewah plant, containing approximately 242,000 square feet, produces light
and heavy duty wreckers; the Hermitage plant, containing approximately 95,000
square feet, produces car carriers; the Mercer plant, which was acquired in
December 1997, containing approximately 110,000 square feet, produces car
carriers and light duty wreckers; and the Greeneville plant, containing
approximately 112,000 square feet, primarily produces car carriers and
trailers.

We
operate two foreign manufacturing facilities located in the Lorraine region of
France, which contain, in the aggregate, approximately 180,000 square feet, and
one in Norfolk, England, which contains approximately 30,000 square feet.

We
believe that our existing manufacturing facilities will allow us to meet
anticipated demand for our products.

|ITEM 3. | LEGAL
  PROCEEDINGS
|------- | -------------------

We
are, from time to time, a party to litigation arising in the normal course of
our business.  Litigation is subject to
various inherent uncertainties, and it is possible that some of these matters
could be resolved unfavorably to us, which could result in substantial damages
against us.  We have established accruals
for matters that are probable and reasonably estimable and maintain product
liability and other insurance that management believes to be adequate.  Management believes that any liability that
may ultimately result from the resolution of these matters in excess of
available insurance coverage and accruals will not have a material adverse
effect on our consolidated financial position or results of operations.

|ITEM 4. | SUBMISSION
  OF MATTERS TO A VOTE OF SECURITY HOLDERS
|------- | -----------------------------------------------------

No matters were submitted to a vote of security
holders of the Registrant during the last three months of the period covered by
this Annual Report.

11

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PART II

|ITEM 5. | MARKET FOR REGISTRANTS COMMON EQUITY AND RELATED
  STOCKHOLDER MATTERS
|------- | -----------------------------------------------------------------------

Our
common stock is traded on the New York Stock Exchange under the symbol
MLR.  The following table sets forth
the quarterly range of high and low sales prices for the common stock for the
fiscal years ending December 31, 2002 and 2003.

|                                    |                  | High |   | Low  | 
|----------------------------------- | ---------------- | ---- | - | ---- | 
|                                    |                  |      |   |      | 
|Fiscal Year Ended December 31, 2003 |                  |      |   |      | 
|                                    | First
  Quarter  |      | $ | 3.54 | 
|                                    | Second
  Quarter |      | $ | 3.98 | 
|                                    | Third
  Quarter  |      | $ | 4.71 | 
|                                    | Fourth
  Quarter |      | $ | 7.80 | 
|                                    |                  |      |   |      | 
|Fiscal Year Ended December 31, 2002 |                  |      |   |      | 
|                                    | First
  Quarter  |      | $ | 4.20 | 
|                                    | Second
  Quarter |      | $ | 3.95 | 
|                                    | Third
  Quarter  |      | $ | 4.18 | 
|                                    | Fourth
  Quarter |      | $ | 3.65 | 

As
of March 22, 2004, our high and low sales price per share during the first
quarter of 2004 were $10.80 and $7.35, respectively.

The
approximate number of holders of record and beneficial owners of common stock
as of December 31, 2003 was 1,859 and 10,000, respectively.

The
Company has never declared cash dividends on the Common Stock.  The Company intends to retain its earnings
and does not anticipate paying cash dividends in the foreseeable future.  Any future determination as to the payment
of cash dividends will depend upon such factors as earnings, capital
requirements, the Companys financial condition, restrictions in financing
agreements and other factors deemed relevant by the Board of Directors.  The payment of dividends by the Company is
restricted by its revolving credit facility.

12

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|ITEM 6. | SELECTED FINANCIAL DATA
|------- | -----------------------

The
following table presents selected statement of operations data and selected
balance sheet data on a consolidated basis. 
We derived the selected historical consolidated financial data for the
years ended December 31, 2003, 2002 and April 30, 2001 and the eight months
ended December 31, 2001 from our audited consolidated financial statements and
related notes.  We derived the selected
historical consolidated financial data for the years ended April 30, 2000 and
1999 from our unaudited consolidated financial statements and related
notes.  You should read this data
together with Item 7  Managements Discussion and Analysis of Financial
Condition and Results of Operation and our consolidated financial statements
and related notes that are a part of this Annual Report on Form 10-K.

MILLER INDUSTRIES, INC. AND SUBSIDIARIES
SELECTED FINANCIAL DATA

(In thousands except per share data)

|                                                                                 |                                                         | Years Ended
  December 31, |         | Eight Months Ended
  December 31, |   | Years Ended April 30, |        
|-------------------------------------------------------------------------------- | ------------------------------------------------------- | -------------------------- | ------- | --------------------------------- | - | --------------------- | -------
|                                                                                 |                                                         | 2003                       |         | 2002                              |   | 2001                  |        
|                                                                                 |                                                         |                            |         |                                   |   |                       |        
|Statements
  of Income Data (1):                                                 |                                                         |                            |         |                                   |   |                       |        
|Net sales:                                                                       |                                                         |                            |         |                                   |   |                       |        
|                                                                                 | Towing and recovery
  equipment                         |                            | $       | 192,043                           |   | $                     | 203,059
|                                                                                 | Towing services                                         |                            |         | 13,953                            |   |                       | 28,444 
|                                                                                 |                                                         |                            |         |                                   |   |                       |        
|                                                                                 |                                                         |                            | 205,996 |                                   |   | 231,503               |        
|Costs and expenses:                                                              |                                                         |                            |         |                                   |   |                       |        
|Costs of
  operations:                                                           |                                                         |                            |         |                                   |   |                       |        
|                                                                                 | Towing and recovery
  equipment                         |                            |         | 168,390                           |   |                       | 174,516
|                                                                                 | Towing services                                         |                            |         | 10,618                            |   |                       | 22,539 
|                                                                                 |                                                         |                            |         |                                   |   |                       |        
|                                                                                 |                                                         |                            | 179,008 |                                   |   | 197,055               |        
|Selling, general, and
  administrative expenses                                  |                                                         |                            | 17,411  |                                   |   | 19,540                |        
|Special charges (2)                                                              |                                                         |                            | 682     |                                   |   | -                     |        
|Interest expense, net                                                            |                                                         |                            | 5,609   |                                   |   | 4,617                 |        
|                                                                                 |                                                         |                            |         |                                   |   |                       |        
|Total costs and expenses                                                         |                                                         |                            | 202,710 |                                   |   | 221,212               |        
|Income from continuing operations before income 
  taxes                         |                                                         |                            | 3,286   |                                   |   | 10,291                |        
|Income tax provision                                                             |                                                         |                            | 1,216   |                                   |   | 7,208                 |        
|                                                                                 |                                                         |                            |         |                                   |   |                       |        
|Income from continuing
  operations                                              |                                                         |                            | 2,070   |                                   |   | 3,083                 |        
|Discontinued operations:                                                         |                                                         |                            |         |                                   |   |                       |        
|Income (loss) from
  discontinued operations, before income taxes                |                                                         |                            | (17,260 | )                                 |   | (29,697               | )      
|                                                                                 | Income tax benefit                                      |                            |         | (1,037                            | ) |                       | (2,732 
|                                                                                 |                                                         |                            |         |                                   |   |                       |        
|Loss from discontinued
  operations, net of taxes                                |                                                         |                            | (16,223 | )                                 |   | (26,965               | )      
|                                                                                 |                                                         |                            |         |                                   |   |                       |        
|Net income (loss) before
  cumulative effect of
  change in accounting principle |                                                         |                            | (14,153 | )                                 |   | (23,882               | )      
|Cumulative effect of change
  in accounting 
  principle                         |                                                         |                            | -       |                                   |   | (21,812               | )      
|                                                                                 |                                                         |                            |         |                                   |   |                       |        
|                                                                                 |                                                         |                            |         |                                   |   |                       |        
|Net income (loss)                                                                |                                                         | $                          | (14,153 | )                                 | $ | (45,694               | )      
|                                                                                 |                                                         |                            |         |                                   |   |                       |        
|Basic loss per common
  share(3):                                                |                                                         |                            |         |                                   |   |                       |        
|                                                                                 | Income (loss) from
  continuing operations              |                            | $       | 0.22                              |   | $                     | 0.34   
|                                                                                 | Income (loss) from
  discontinued operations            |                            |         | (1.74                             | ) |                       | (2.89  
|                                                                                 | Cumulative effect of change
  in accounting
  principle |                            |         | -                                 |   |                       | (2.34  
|                                                                                 |                                                         |                            |         |                                   |   |                       |        
|                                                                                 |                                                         |                            |         |                                   |   |                       |        
|                                                                                 | Basic loss                                              |                            | $       | (1.52                             | ) | $                     | (4.89  
|                                                                                 |                                                         |                            |         |                                   |   |                       |        
|Diluted loss per common
  share(3):                                              |                                                         |                            |         |                                   |   |                       |        
|                                                                                 | Income (loss) from
  continuing operations              |                            | $       | 0.22                              |   | $                     | 0.34   
|                                                                                 | Income (loss) from
  discontinued operations            |                            |         | (1.74                             | ) |                       | (2.89  
|                                                                                 | Cumulative effect of change
  in accounting
  principle |                            |         | -                                 |   |                       | (2.34  
|                                                                                 |                                                         |                            |         |                                   |   |                       |        
|                                                                                 |                                                         |                            |         |                                   |   |                       |        
|                                                                                 | Diluted loss                                            |                            | $       | (1.52                             | ) | $                     | (4.89  
|                                                                                 |                                                         |                            |         |                                   |   |                       |        
|Weighted average shares
  outstanding:                                           |                                                         |                            |         |                                   |   |                       |        
|                                                                                 | Basic                                                   |                            |         | 9,342                             |   |                       | 9,341  
|                                                                                 |                                                         |                            |         |                                   |   |                       |        
|                                                                                 | Diluted                                                 |                            |         | 9,385                             |   |                       | 9,348  
|                                                                                 |                                                         |                            |         |                                   |   |                       |        

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|Balance
  Sheet Data (at period end):         |  |   |         |  |   |         |   |  |   |         |  |  |   |         |  |   |         |  |   |         | 
|--------------------------------------------- |  | - | ------- |  | - | ------- | - |  | - | ------- |  |  | - | ------- |  | - | ------- |  | - | ------- | 
|Working capital (deficit)                     |  | $ | 31,136  |  | $ | (10,174 | ) |  | $ | 87,601  |  |  | $ | 91,314  |  | $ | 103,801 |  | $ | 121,449 | 
|Total assets                                  |  |   | 131,818 |  |   | 162,177 |   |  |   | 252,963 |  |  |   | 281,287 |  |   | 323,694 |  |   | 392,480 | 
|Long-term obligations, less
  current portion |  |   | 29,927  |  |   | 1,214   |   |  |   | 91,562  |  |  |   | 99,121  |  |   | 119,319 |  |   | 133,850 | 
|Common shareholders equity
  (deficit)       |  |   | 27,997  |  |   | 39,697  |   |  |   | 84,843  |  |  |   | 106,533 |  |   | 113,821 |  |   | 187,303 | 

| | (1) | The results
  of operations and loss on disposal associated with certain towing services
  markets, which were sold in June 2003, have been reclassified from
  discontinued to continuing operations for all periods presented because of
  our significant continuing involvement in the operations of the disposal
  components through a consulting agreement and our ongoing interest in the
  cash flows of the operations of the disposal components through a long-term
  licensing agreement.                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | (2) | Special
  charges and other net operating expenses include a loss on the sale of
  operations of $682 for the twelve months ended December 31, 2003, asset
  impairment charges for continuing operations of $6,376 for the eight months
  ended December 31, 2001, $2,770 for the year ended April 30, 2000 and special
  charges of $4,100 in fiscal 1998 for the closure of a facility and
  consolidation of manufacturing operations in the towing and recovery
  equipment segment.  The Company
  recorded asset impairments and special charges for discontinued operations of
  $11,828 for the year ended December 31, 2002, $10,716 for the eight months
  ended December 31, 2001, and $74,085 of special charges and $6,041 for the
  costs of rationalization of the towing services segment for the year ended
  April 30, 2000.  Special charges and
  asset impairments related to discontinued operations are included in Loss
  from Discontinued Operations.
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | (3) | Basic and
  diluted net income per share and the weighted average number of common and
  potential dilutive common shares outstanding are computed after giving
  retroactive effect to the 1-for-5 reverse stock split effected on October 1,
  2001.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          

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|ITEM 7. | MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL
  CONDITION AND RESULTS OF OPERATIONS
|------- | ---------------------------------------------------------------------------------------

The
following discussion of our results of operations and financial condition
should be read in conjunction with the Consolidated Financial Statements and
Notes thereto.

General

Going
Concern.Our
financial statements have been prepared on a going concern basis, which
contemplates the realization of assets and the settlement of liabilities and
commitments in the normal course of business. 
Subsequent to December 31, 2002, we were in default of certain covenants
under our Senior and Junior Credit Facility Agreements, and our Junior Credit
Facility matured on July 23, 2003.  The
Senior and Junior Credit Facility Agreements contain certain cross-default
provisions and provide for acceleration of amounts due as well as other
remedies in the event of default.  These
circumstances raised substantial doubt about our ability to continue as a going
concern without refinancing such credit facilities.  Since the issuance of the going concern opinion, we have
restructured both our Junior and Senior Credit Facilities.  The Junior Credit Facility now matures on
July 31, 2005.  All defaults under both
facilities have been waived.

New
York Stock Exchange Listing Standards.We
received notification from the New York Stock Exchange on June 26, 2003 that,
based on market information and information in our recent public filings, we
were not in compliance with the New York Stock Exchanges continued listing
standards.  The New York Stock Exchange
requires shareholders equity of not less than $50.0 million and a 30-day
average market capitalization of $50.0 million.  Our shareholders equity was $40.7 million, as of June 30, 2003;
$33.4 million as of September 30, 2003; and $28.0 million as of December 31,
2003.  As of March 1, 2004, we had a
30-day average market capitalization of $96.6 million.

We
compiled a three-pronged plan for regaining compliance with the continued
listing standards.  Our plan is to
restructure our bank facilities and rationalize the timing of our debt service,
dispose of our remaining RoadOne and distributor operations within the time
period specified and focus all of our resources, manpower as well as financial,
on returning the manufacturing operations to their historically profitable
levels.  In September 2003, we were
notified that the New York Stock Exchange accepted our plan to regain
compliance with the New York Stock Exchange continued listing standards related
to shareholders equity and market capitalization within an eighteen month
timeframe.  With the approval by
shareholders of the conversion of a portion of our subordinated debt into our
common stock, we have completed the restructuring of our facilities.  We have also disposed of the remainder of
our RoadOne operations and are in the process of disposing of our distributors.  During this timeframe, we will be subject to
quarterly monitoring for compliance by the New York Stock Exchange.

Discontinued
Operations.During
the year ended December 31, 2002, our management and board of directors made
the decision to divest the remaining towing services segment, as well as the
operations of the distribution group of the towing and recovery equipment
segment. In accordance with SFAS No. 144, Accounting for the Impairment or
Disposal of Long-Lived Assets, the assets of the towing services segment and
the distribution group are considered a disposal group and the assets are no
longer being depreciated. All assets and liabilities and results of operations
associated with these assets have been separately presented in the accompanying
financial statements. The statements of operations and related financial
statement disclosures for all prior years have been restated to present the
towing services segment and the distribution group as discontinued operations
separate from continuing operations. The analyses contained herein are of continuing
operations, as restated, unless otherwise noted.

The
results of operations and loss on disposal associated with certain towing
services markets, which were sold in June 2003 have been reclassified from
discontinued to continuing operations given our significant continuing
involvement in the operations of the disposal components via a consulting
agreement and our ongoing interest in the cash flows of the operations of the
disposal components via a long-term license agreement.

Income Taxes.  Differences between the effective tax rate
and the expected tax rate are due primarily to non-deductible goodwill
amortization and impairment charges for all periods presented.

15

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Critical Accounting Policies

The
consolidated financial statements are prepared in accordance with accounting
principles generally accepted in the United States of America, which require us
to make estimates.  Certain accounting
policies are deemed critical, as they require managements highest degree of
judgment, estimates and assumptions.  A
discussion of critical accounting policies, the judgments and uncertainties
affecting their application and the likelihood that materially different
amounts would be reported under different conditions or using different
assumptions follows:

Accounts
receivable.  We
extend credit to customers in the normal course of business.  Collections from customers are continuously
monitored and an allowance for doubtful accounts is maintained based on historical
experience and any specific customer collection issues.  While such bad debt expenses have
historically been within expectations and the allowance established, there can
be no assurance that we will continue to experience the same credit loss rates
as in the past.

Valuation
of long-lived assets and goodwill.  Long-lived assets and goodwill are reviewed
for impairment whenever events or circumstances indicate that the carrying
amount of these assets may not be fully recoverable.  When a determination has been made that the carrying amount of
long-lived assets and goodwill may not be fully recovered, the amount of
impairment is measured by comparing an assets estimated fair value to its
carrying value.  The determination of
fair value is based on projected future cash flows discounted at a rate
determined by management, or if available independent appraisals or sales price
negotiations.  The estimation of fair
value includes significant judgment regarding assumptions of revenue, operating
costs, interest rates, property and equipment additions; and industry
competition and general economic and business conditions among other
factors.  We believe that these
estimates are reasonable; however, changes in any of these factors could affect
these evaluations.

Upon
adoption of Financial Accounting Standard No. 142, Goodwill and Other
Intangible Assets on January 1, 2002, we ceased to amortize goodwill.  In lieu of amortization, we are required to
perform an initial impairment review of goodwill in 2002 and an annual
impairment review thereafter.  For
further detail of our impairment review and related write downs, See Note 7 to
the Consolidated Financial Statements.

Warranty
Reserves.  We estimate
expense for product warranty claims at the time products are sold.  These estimates are established using
historical information about the nature, frequency, and average cost of
warranty claims.  We review trends of
warranty claims and takes actions to improve product quality and minimize
warranty claims.  We believe the
warranty reserve is adequate; however; actual claims incurred could differ from
the original estimates, requiring adjustments to the accrual.

Income taxes.  We recognize deferred tax assets and
liabilities based on differences between the financial statement carrying
amounts and the tax bases of assets and liabilities.  We consider the need to record a valuation allowance to reduce
deferred tax assets to the amount that is more likely than not to be
realized.  We consider tax loss
carrybacks, reversal of deferred tax liabilities, tax planning and estimates of
future taxable income in assessing the need for a valuation allowance.  We established a deferred tax valuation
allowance of $18.0 million as of December 31, 2002, representing a full
valuation allowance against our net deferred tax assets from continuing and
discontinuing operations.  The allowance
reflects our recognition that continuing losses from operations and certain
liquidity matters associated with our credit facility indicate that it is more
likely than not that certain future tax benefits will not be realized through
future taxable income.  The balance of
the valuation allowance was $13.3 million at December 31, 2003.

Revenues.  Under our accounting policies, sales are
recorded when equipment is shipped to independent distributors or other
customers.  While we manufacture only
the bodies of wreckers, which are installed on truck chassis manufactured by
third parties, we sometimes purchases the truck chassis for resale to our
customers.  Sales of company-purchased
truck chassis are included in net sales. 
Margins are substantially lower on completed recovery vehicles
containing company-purchased chassis because the markup over the cost of the
chassis is nominal.  Revenue from our
owned distributors is recorded at the time equipment is shipped to customers or
services are rendered.  The towing
services division recognizes revenue at the time services are performed.

16

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Seasonality.  Our towing and recovery equipment segment
has experienced some seasonality in net sales due in part to decisions by
purchasers of light duty wreckers to defer wrecker purchases near the end of
the chassis model year.  The segments
net sales have historically been seasonally impacted due in part to sales made
at the largest towing and recovery equipment trade show which is held in the
spring.

Change
in Fiscal Year. On September 25, 2001, we announced
that our Board of Directors had approved a change in our fiscal year, from
April 30 to December 31, effective December 31, 2001.  The change to a December 31 fiscal year will enable us to report
results on a conventional calendar basis. 
As a result of the change in fiscal year, we filed a transition report
for the eight-month period ended December 31, 2001, and the comparative data
below compares the financial results for that period against the results for
the fiscal year ended April  30, 2001.  The periods are not directly comparable, in that they relate to
periods of materially different lengths, and also that the transition period
does not include results from the three months ended April 30, a fiscal quarter
in which our sales have traditionally been seasonally higher than other
quarters.

Recent Developments

On
January 20, 2004, we completed the exchange of certain of our subordinated debt
and warrants held by Contrarian Funds, LLC for shares of our common stock.  We also completed the exchange of
subordinated debt and warrants held by Harbourside Investments, LLLP, subject
to shareholder approval at a shareholder meeting, which was held on February
12, 2004.  Harboursides partners
include several of our executive officers and directors, including our Chairman
and Co-Chief Executive Officer, William G. Miller, our President and Co-Chief
Executive Officer, Mr. Jeffrey I. Badgley, our Executive Vice President and
Chief Financial Officer, J. Vincent Mish and our Executive Vice President,
Secretary and General Counsel, Frank Madonia.

The
exchanges were consummated based on separate agreements with Contrarian and
Harbourside, which we entered into as of January 14, 2004.  Pursuant to their respective agreements,
Contrarian and Harbourside agreed to (1) extend the maturity date until July
31, 2005 of 70% of the principal amount of the outstanding subordinated debt
that they respectively hold, (2) convert the remaining portion of their
subordinated debt (which includes 30% of the principal amount plus all
outstanding and accrued interest and fees) into shares of our common stock and
(3) convert all of their respective warrants into shares of our common stock.Pursuant to the exchange,
Contrarian received 734,151 shares of common stock, and Harbourside received
583,556 shares of common stock conditioned upon shareholder approval.

Under
its agreement, Contrarian agreed to (1) extend the maturity date until
July 31, 2005 of approximately $5.40 million of the principal amount of the
subordinated debt and increase the interest rate thereon from 14% to 18% per
annum, (2) convert approximately $3.97 million of its subordinated debt into
690,348 shares of our common stock and (3) convert warrants for 103,644 shares
of common stock into 43,803 shares of our common stock.  Under its agreement, Harbourside, subject to
the condition subsequent of obtaining shareholder approval, agreed to
(1) extend the maturity date until July 31, 2005 of approximately $4.29
million of the principal amount of the subordinated debt and reduce the
interest rate thereon from 14% to 9% per annum, (2) convert approximately $3.16
million of its subordinated debt into 548,738 shares of our common stock and
(3) convert warrants for 82,382 shares of common stock into 34,818 shares of
our common stock.

The
exchange transaction with respect to Harbourside was approved by a Special
Committee of our Board of Directors as a result of Mr. Millers and Mr.
Badgleys personal interest in the transaction and was subsequently approved by
our shareholders at a meeting on February 12, 2004.

Additional
information regarding amendments to our senior and junior credit facilities
that occurred in connection with this transaction is found under the heading
Item 7  Managements Discussion and Analysis  Liquidity and Capital
Resources  Credit Facilities. 
Additional information regarding Harboursides exchange transaction is
found under the heading Item 13  Certain Relationships and Related Transactions
in this Annual Report on Form 10-K.

17

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Results of Operations

The
following table sets forth, for the periods indicated, the components of the
consolidated statements of operations expressed as a percentage of net sales.

|                             |                                                        | Years Ended
  December 31, |       | Eight Months
  Ended
  December 31, |   | Year Ended
  April 30,
|---------------------------- | ------------------------------------------------------ | -------------------------- | ----- | ----------------------------------- | - | ----------------------
|                             |                                                        | 2003                       |       | 2002                                |   | 2001                  
|                             |                                                        |                            |       |                                     |   |                       
|Continuing
  Operations:     |                                                        |                            |       |                                     |   |                       
|Net Sales                    |                                                        |                            | 100.0 | %                                   |   | 100.0                 
|Costs and
  expenses:        |                                                        |                            |       |                                     |   |                       
|                             | Costs of
  operations                                  |                            |       | 86.9                                | % |                       
|                             | Selling,
  general and administrative                  |                            |       | 8.5                                 | % |                       
|                             | Special
  charges and other operating 
  expenses, net |                            |       | 0.3                                 | % |                       
|                             | Interest
  expense, net                                |                            |       | 2.7                                 | % |                       
|                             |                                                        |                            |       |                                     |   |                       
|                             | Total costs
  and expenses                             |                            |       | 98.4                                | % |                       
|                             |                                                        |                            |       |                                     |   |                       
|Income
  before income taxes |                                                        |                            | 1.6   | %                                   |   | 4.5                   
|                             |                                                        |                            |       |                                     |   |                       
|                             |                                                        |                            |       |                                     |   |                       
|Discontinued
  Operations:   |                                                        |                            |       |                                     |   |                       
|Net Sales                    |                                                        |                            | 100.0 | %                                   |   | 100.0                 
|Costs and
  expenses:        |                                                        |                            |       |                                     |   |                       
|                             | Costs of
  operations                                  |                            |       | 90.3                                | % |                       
|                             | Selling,
  general and administrative                  |                            |       | 13.8                                | % |                       
|                             | Special
  charges and other operating 
  expense, net  |                            |       | 11.3                                | % |                       
|                             | Interest
  Expense, net                                |                            |       | 7.0                                 | % |                       
|                             |                                                        |                            |       |                                     |   |                       
|                             | Total costs
  and expenses                             |                            |       | 122.4                               | % |                       
|                             |                                                        |                            |       |                                     |   |                       
|Loss before
  income taxes   |                                                        |                            | (22.4 | )%                                  |   | (16.7                 
|                             |                                                        |                            |       |                                     |   |                       

Twelve Months Ended December 31, 2003
Compared to Twelve Months Ended December 31, 2002

Continuing
Operations

Net
sales from continuing operations were $206.0 million for the twelve months
ended December 31, 2003 compared to $231.5 million for the year ended December
31, 2002. Demand for our towing and recovery equipment continues to be
negatively impacted by cost pressures facing our customers and tightness in the
current credit markets.  In addition,
the war in Iraq at the beginning of the year had a negative impact on revenues
of continuing operations.

Costs
of operations as a percentage of net sales increased to 86.9% for the year
ended December 31, 2003 from 85.1% for the year ended December 31, 2002 due to
the fixed cost impact of lower sales volume for domestic manufacturing
operations .  Selling, general, and
administrative expenses changed slightly as a percentage of net sales from 8.4%
for the twelve months ended December 31, 2002 to 8.5% for the twelve months
ended December 31, 2003, reflecting the Companys ongoing focus to control
costs of continuing operations while disposing of towing services segment and
distribution group.

Towing
services revenues and cost of operations reflect the change in status of
certain towing services markets, which were sold in June 2003.  These operations have been reclassified from
discontinued operations to continuing operations based on certain on-going cash
flows provided for under the disposal agreement.

In
January 2002, we adopted SFAS No. 142, Goodwill and Other Intangible Assets.
Upon adoption of SFAS No. 142, we ceased to amortize goodwill. In lieu of
amortization, we were required to perform an initial impairment

18

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review, which resulted in the write-off of $1.7 million of goodwill
attributable to continuing operations and $20.1 million of goodwill
attributable to discontinued operations.

Interest
expense for continuing operations for the years ended December 31, 2003 and
2002 was $5.6 million.  Interest expense
for the year ended December 31, 2003 includes commitment fees charged in
conjunction with the maturing of the junior credit facility in July 2003 and
the write-off of unamortized loan costs from the senior credit facility.

The
effective rate for the provision for income taxes for continuing operations was
37.0% for the year ended December 31, 2003 compared to 70.0% for the year ended
December 31, 2002.  In prior years, we
recorded a full valuation allowance reflecting the recognition that continuing
losses from operations and certain liquidity matters associated with our credit
facility indicated that it was more likely than not that certain future tax
benefits would not be realized through future taxable income.

Discontinued
Operations

Net sales
of discontinued operations decreased to $77.1 million for the year ended
December 31, 2003 from $178.5 million for the year ended December 31,
2002.  Net sales of the distribution group
were $68.7 million for the year ended December 31, 2003 compared to $85.4
million for the year ended December 31, 2002. Net sales of the towing services
segment were $8.4 million for the year ended December 31, 2003 compared to
$93.1 million for the year ended December 31, 2002. Revenues of the
discontinued operations were significantly reduced from prior year as the
Company continued its efforts to sell or close activities of the discontinued
operations.

Cost of
sales as a percentage of net sales for the distribution group was 92.3% for the
year ended December 31, 2003 compared to 92.1% for the year ended December
31, 2002. Cost of sales of the towing services segment decreased from 85.1% for
the year ended December 31, 2002 to 73.2% for the year ended December 31, 2003.

Selling,
general, and administrative expenses as a percentage of sales was 8.2% for the
distribution group and 59.9% for the towing services segment for the year ended
December 31, 2003 compared to 7.8% and 21.1%, respectively for the year ended
December 31, 2002.  The decrease for the
distribution group was the result of our continued cost reduction efforts as we
began implementation of our plans for disposition of these operations.  The increase in the towing services segment
was the result of expenses not decreasing as rapidly as revenues as markets
were sold throughout the year as well as various expenses incurred in
connection with such dispositions.

Net
interest expense was $5.4 million for the year ended December 31, 2003 compared
to $4.6 million for the year ended December 31, 2002, respectively.

The
effective rate for the provision for income taxes for discontinued operations
was 6.0% for the year ended December 31, 2003 compared to 9.2% for the year
ended December 31, 2002.

Twelve
Months Ended December 31, 2002 Compared to Eight Months Ended December 31, 2001

Continuing Operations

Net sales
from continuing operations were $231.5 million for the twelve months ended
December 31, 2002 compared to $162.3 million for the eight months ended
December 31, 2001. Net sales at December 31, 2001 include only eight months of
activity, accounting for a substantial portion of the increase from period to
period. Demand for our towing and recovery equipment continues to be negatively
impacted by cost pressures facing our customers and tightness in the current
credit markets.

Costs of
operations as a percentage of net sales increased slightly to 85.1% for the
year ended December 31, 2002 from 85.0% for the eight months ended December 31,
2001. Selling, general, and administrative expenses decreased 0.5% as a
percentage of net sales from 8.9% for the eight months ended December 31, 2001
to 8.4% for the twelve months

19

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ended December 31, 2002. The slight decrease in costs of sales and
selling, general, and administrative expenses as a percentage of sales is the
result of our continued focus on controlling costs of our continuing operations
while disposing of our towing services segment and distribution group.

Towing
services revenues and cost of operations reflect the change in status of
certain towing services markets, which were sold in June 2003.  These operations have been reclassified from
discontinued operations to continuing operations based on certain on-going cash
flows provided for under the disposal agreement.

In January
2002, we adopted SFAS No. 142, Goodwill and Other Intangible Assets. Upon
adoption of SFAS No. 142, we ceased to amortize goodwill. In lieu of
amortization, we were required to perform an initial impairment review, which
resulted in the write-off of $1.7 million of goodwill attributable to
continuing operations and $20.1 million of goodwill attributable to
discontinued operations.

We
periodically review the carrying value of goodwill and long-lived assets to
determine if those assets may be recoverable based upon future operating cash
flows expected to be generated by those assets. During the eight months ended
December 31, 2001, evaluations of these assets indicated that projected future
cash flows from certain towing and recovery equipment operations were not
sufficient to fully recover the carrying value of its goodwill and certain
other long-lived assets. Accordingly, a non-cash impairment charge of $6.3
million was recorded.

Interest
expense for continuing operations for the year ended December 31, 2002 was $4.6
million compared to $1.1 million for the eight months ended December 31, 2001
as a result of the acceleration of amortization of deferred financing costs.

The
effective rate for the provision for income taxes for continuing operations was
70.0% for the year ended December 31, 2002 compared to 98.9% for the eight
months ended December 31, 2001.  The
decrease in the effective rate is due to higher taxable income in 2002 as
compared to 2001 and permanent differences related to goodwill impairment
recorded in 2001.  The allowance
reflected the Companys recognition that continuing losses from operations and
certain liquidity matters associated with the Companys credit facility
indicate that it is more likely than not that certain future tax benefits will
not be realized through future taxable income.

Discontinued Operations

Net sales
of discontinued operations increased to $178.5 million for the year ended
December 31, 2002 from $141.6 million for the eight months ended December 31,
2001. The increase is primarily due to the fact that net sales at December 31,
2001 include only eight months of activity. Net sales of the distribution group
were $85.4 million for the year ended December 31, 2002 compared to $60.6
million for the eight months ended December 31, 2001. Net sales of the towing
services segment were $93.1 million for the year ended December 31, 2002
compared to $81.1 million for the eight months ended December 31, 2001.
Revenues of the towing services segment were negatively affected by our ongoing
efforts to sell or close under performing and other markets.

Cost of
sales as a percentage of net sales for the distribution group was 92.1 % for
the year ended December 31, 2002 compared to 91.7% for the eight months
ended December 31, 2001. Cost of sales of the towing services segment increased
0.2% from 84.9% for the eight months ended December 31, 2001 to 85.1% for the
year ended December 31, 2002.

Selling,
general, and administrative expenses as a percentage of sales was 7.8% for the
distribution group and 21.1% for the towing services segment for the year ended
December 31, 2002 compared to 9.5% and 20.7%, respectively for the eight months
ended December 31, 2001.  The decrease
for the distribution group was the result of our continued cost reduction
efforts as we began implementation of our plans for disposition of these
operations.  The increase in the towing
services segment was the result of expenses not decreasing as rapidly as
revenues as markets were sold throughout the year as well as various expenses
incurred in connection with such dispositions.

20

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Net
interest expense was $4.6 million for the year ended December 31, 2002 compared
to $6.3 million for the eight months ended December 31, 2001, respectively.

The
effective rate for the provision for income taxes for discontinued operations
was 9.2% for the year ended December 31, 2002 compared to 3.1% for the eight
months ended December 31, 2001.

Eight
Months Ended December 31, 2001 Compared to Year Ended April 30, 2001

Continuing Operations

Net
sales for the eight months ended December 31, 2001 were $162.3 compared to
$244.9 for the twelve months ended April 30, 2001.  Net sales at December 31, 2001 include only eight months
activity, accounting for a substantial portion of the decrease.  We experienced generally stable order rates
for towing and recovery equipment in the face of continued
challenging business conditions during the eight months ended December 31,
2001.  Demand for our towing and
recovery equipment continued to be negatively impacted by cost pressures facing
our customers.

Cost of
operations as a percentage of net sales increased to 85.0% for the eight months
ended December 31, 2001 compared to 83.6% for the year ended April 30, 2001.  The increase as a percentage of net sales
was primarily due to declines in overall sales volume as discussed above.

Towing
services revenues and cost of operations reflect the change in status of
certain towing services markets, which were sold in June 2003.  These operations have been reclassified from
discontinued operations to continuing operations based on certain on-going cash
flows provided for under the disposal agreement.

Selling,
general, and administrative expenses decreased 0.9% as a percentage of net
sales from 9.8% for the year ended April 30, 2001 to 8.9% for the eight months
ended December 31, 2001.  The slight
decrease in selling, general, and administrative expenses as a percentage of
sales, is a result of our continued focus on cost reduction efforts implemented
in prior fiscal years.

We
periodically review the carrying value of goodwill and long-lived assets in
both to determine if those assets may be recoverable based upon the future
operating cash flows expected to be generated by those assets.  During the eight months ended December 31,
2001 evaluations indicated that projected cash flows from certain towing
services markets were not sufficient to fully recover the carrying value of its
goodwill and other long-lived assets. 
Accordingly, we recorded non-cash impairment charges of $6.4 million for
continuing operations and $10.2 million for discontinued operations.

Interest
expense for the eight months ended December 31, 2001 and the year ended April
30, 2001 was $1.1 million and $2.1 million, respectively.  During the eight months ended December 31,
2001, we incurred lower interest expense as a result of refinancing our line of
credit at more favorable rates in July 2001, a decrease in debt levels and four
months less interest expense in the transition period.

The
effective rate of the provision for income taxes for continuing operations for
the eight months ended December 31, 2001 was 98.9% compared to 34.2% for the
year ended April 30, 2001.  The increase
in the effective rate is due to a deferred tax valuation allowance recorded as
of December 31, 2001.  The allowance
reflects our recognition that continuing losses from operations and certain
liquidity matters associated with our credit facility indicate that it is more
likely than not that certain future tax benefits will not be realized through
future taxable income.

Discontinued Operations

Net sales
of discontinued operations decreased from $250.6 million for the year ended
April 30, 2001 to $141.6 million for the eight months ended December 31, 2001.
The decrease is primarily due to the fact that net sales at December 31, 2001
include only eight months of activity. Net sales of the distribution group were
$60.6 million for the eight months ended December 31, 2001 compared to $100.3
million for the year ended April 30, 2001. Net sales of the

21

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towing services segment was $81.1 million for the eight months ended
December 31, 2001 compared to $150.3 million for the year ended April 30, 2001.
Revenues in the distribution group were negatively impacted by cost pressures
facing our customers. Revenues in the towing services segment were negatively
impacted during the eight months ended December 31, 2001 due to unseasonably
mild temperatures, the impact on the overall transportation industry following
the events of September 11th, and the sale of several towing
services markets as part of our continued efforts to eliminate underperforming
terminals.

Cost of
sales as a percentage of net sales for the distribution group was 91.7% for the
eight months ended December 31, 2001 compared to 91.3% for the year ended April
30, 2001. Cost of sales of the towing services increased 0.7% from 84.2% for
the year ended April 30, 2001 to 84.9% for the eight months ended December 31, 2001
primarily due to declines in revenues of underperforming markets

Selling,
general, and administrative expenses as a percentage of sales was 9.5% for the
distribution group and 20.7% for the towing services segment for the eight
months ended December 31, 2001 compared to 8.4% and 22.0%, respectively for the
year ended April 30, 2001. The increase for the distribution group was
primarily due to declines in sales volume as described above. The decrease for
the towing services segment was the result of our continued cost reduction
efforts.

Net
interest expense of discontinued operations decreased $8.3 million from $14.6
million for the year ended April 31, 2001 to $6.3 million for the eight months
ended December 31, 2001. During the eight months ended December 31, 2001, we
experienced overall lower interest expense as a result of refinancing our line
of credit at more favorable rates in July 2001, a decrease in debt levels, and
four months less interest expense in the transition period.

The
effective rate for the provision for income taxes for discontinued operations
was 3.1% for the eight months ended December 31, 2001 compared to 33.7% for the
year ended April 30, 2001.

Liquidity And Capital
Resources

Cash
provided by operating activities was $13.4 million for the year ended December
31, 2003 compared to $19.6 million for the year ended December 31, 2002, $9.8
million for the eight months ended December 31, 2001 and $21.9 million for the
year ended April 30, 2001.  The cash
provided by operating activities for the year ended December 31, 2003 reflects
decreases in accounts receivable and inventory levels, partially offset by
increases in accounts payable.

Cash
provided by investing activities was $8.9 million for the year ended December
31, 2003 compared to $18.3 million provided by investing activities for the
year ended December 31, 2002, $0.2 million used in investing activities for the
eight months ended December 31, 2001, and $8.3 million provided by investing
activities for the year ended April 30, 2001. 
The cash provided by investing activities for the year ended December
31, 2003 was primarily the result of proceeds from the sale of towing services
and distribution operations.

Cash used
in financing activities was $20.3 million for the year ended December 31, 2003
compared to $44.4 million used in financing activities for the year ended
December 31, 2002, $6.3 million for the eight months ended December 31, 2001,
$29.1 million for the year ended April 30, 2001.  The cash used in financing activities in the year ended December
31, 2003 was used almost entirely to reduce borrowings under our credit
facilities and other outstanding long-term debt and capital lease obligations.

Our primary
capital requirements are for working capital, debt service, and capital
expenditures.  Since 1996, we have
financed our operations and growth from internally generated funds and debt
financing.

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Contractual
Obligations

The
following is a summary of our contractual obligations for our continuing
operations as of December 31, 2003. 
This table does not reflect the impact of the exchange transactions
described under Recent Developments.

|                                                           |  | Payment Due By Period (in thousands) |       
|---------------------------------------------------------- |  | ------------------------------------ | ------
|                                                           |  |                                      |       
|Contractual Obligations                                    |  | Total                                |       
|                                                           |  |                                      |       
|Outstanding
  Borrowings Under Senior 
    Credit Facility |  | $                                    | 13,448
|Outstanding
  Borrowings Under Junior 
    Credit Facility |  |                                      | 16,743
|Mortgage
  Notes Payable                                   |  |                                      | 1,304 
|Equipment
  Notes Payable (Capital 
    Lease Obligations) |  |                                      | 349   
|Other                                                      |  |                                      | 133   
|Operating
  Lease Obligations                              |  |                                      | 1,552 
|                                                           |  |                                      |       
|                                                           |  |                                      |       
|Total                                                      |  | $                                    | 33,529
|                                                           |  |                                      |       

Credit Facilities

Senior Credit Facility.  In July 2001, we entered into a new four
year senior secured credit facility with a syndicate of lenders to replace our
then existing credit facility.  As a
part of this agreement, the previous credit facility was reduced with proceeds
from the senior credit facility and amended to provide for a $14.0 million
subordinated secured facility.  The
senior credit facility originally consisted of an aggregate $102.0 million
revolving credit facility and an $8.0 million term loan.  The senior credit facility has been amended
several times, including most recently on December 24, 2003 in connection with
the restructuring of our senior and junior debt obligations.  As amended, the senior credit facility
consists of an aggregate $32.0 million credit facility, including a $15.0
million revolving loan, a $5.0 million term loan and a $12.0 million term
loan.  Borrowing availability under the
revolving senior credit facility is based on a percentage of eligible inventory
and accounts receivable (determined on eligibility criteria set forth in the credit
facility) and subject to a maximum borrowing limitation.  Borrowings under the term loans are
collateralized by substantially all of our property, plant, and equipment.  We are required to make monthly amortization
payments on the first term loan of $167,000, but the amortization payments due
on November 1, 2003, December 1, 2003, and January 1, 2004 were deferred until
the maturity date.  The senior credit
facility bears interest at the prime rate (as defined) plus 2.75%, subject to
the rights of the senior lender agent or a majority of the lenders to charge a
default rate equal to the prime rate (as defined) plus 4.75% during the
continuance of any event of default under the senior credit facility.

The senior
credit facility matures on July 23, 2005. 
The senior credit facility contains requirements related to maintaining
minimum excess availability at all times and minimum quarterly levels of
earnings before income taxes, depreciation and amortization (as defined) and a
minimum quarterly fixed charge coverage ratio (as defined).  In addition, the senior credit facility
contains restrictions on capital expenditures, incurrence of indebtedness,
mergers and acquisitions, distributions and transfers and sales of assets.  The senior credit facility also contains
requirements related to weekly and monthly collateral reporting.

Junior Credit Facility.  The $14.0 million junior credit facility is
by its terms expressly subordinated only to the senior credit facility.  The junior credit facility is secured by
certain specified assets and by a second priority lien and security interest in
substantially all of our other assets. 
The junior credit facility contains requirements for certain fees to be
paid at six month intervals beginning in January 2002 based on the outstanding
balance of the facility at the time. 
The junior credit facility also contains provisions for the issuance of
warrants for 0.5% of the outstanding shares of our common stock (47,417 shares)
in July 2002 and an additional 1.5% (138,611 shares) on July 23, 2003 with an
exercise price equal to the then fair market value of our common stock.  As amended, the junior credit facility
contains

23

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requirements for the maintenance of certain financial covenants.  It also imposes restrictions on capital
expenditures, incurrence of indebtedness, mergers and acquisitions,
distributions and transfers and sales of assets.

The junior
credit facility originally matured on July 23, 2003.  In connection with the restructuring of our debt, the facility
has been amended.  As amended, the
junior credit facility, under which $9.7 million in principal was outstanding
at February 29, 2004, matures on July 31, 2005 and bears interest at an
effective blended rate of 14.0%.

Restructuring of Credit Facilities.Our failure to repay all
outstanding principal, interest and any other amounts due and owing under the
junior credit facility at its original July 23, 2003 maturity date constituted
an event of default under the junior credit facility and also triggered an event
of default under the senior credit facility cross-default provisions.  Additionally, we were in default of the
EBITDA covenant under the junior credit facility only for the first
quarter of calendar 2003.  We were also
in default under both the senior and junior credit facility as a result of the
going concern explanatory paragraph included in the auditors report as well
as the failure to file our Annual Report for the fiscal year ended December 31,
2002 prior to April 30, 2003.

Pursuant
to the terms of the intercreditor agreement between the senior and junior
lenders, the junior lender agent and the junior lenders were prevented
from taking any enforcement action or exercising any remedies against us, our
subsidiaries or our respective assets as a result of such events of default
during a standstill period.  On July 29,
2003, the junior lender agent gave a notice of enforcement to the senior lender
agent based upon the event of default for failure to repay the outstanding
obligations under the junior credit facility on the junior credit facilitys
maturity date.  On August 5, 2003, the senior agent gave a
payment blockage notice to the junior agent based upon certain events of
default under the senior credit facility, thereby preventing the junior agent
and junior lenders from receiving any payments from us in respect of the junior
credit facility.

On October
31, 2003, we entered into a forbearance agreement with the lenders and the
senior lender agent under the senior credit facility, pursuant to which, among
other things, the senior lenders agreed to forbear from exercising any remedies
in respect of the defaults then existing under the senior credit facility as a
result of (i) the failure to timely deliver financial statements for fiscal
year 2002 and the failure to deliver a report of our independent certified
public accountants which is unqualified in any respect, as well as the event of
default under the senior credit facility caused by the event of default arising
from such failure under the junior credit facility; (ii) the failure to fulfill
certain payment obligations to the junior lenders under the junior credit
facility; and (iii) the failure to fulfill certain financial covenants in the
junior credit facility for one or more of the fiscal quarters ending in fiscal
year 2003, which failure would constitute an event of default under the senior
credit facility.  The forbearance period
under the forbearance agreement was to expire on the earlier of (x) December
31, 2003, (y) the occurrence of certain bankruptcy type events in respect of us
or any of our subsidiaries, and (z) the failure by us or any of our
subsidiaries that are borrower parties under the senior credit facility to
perform our obligations under the senior credit facility or the forbearance
agreement.  Under the forbearance
agreement, the senior lenders and the senior lender agent did not waive their
rights and remedies with respect to the existing senior facility defaults, but
agreed to forbear from exercising rights and remedies with respect to the
existing senior facility defaults solely during the forbearance period.

Simultaneous
with entering into the forbearance agreement on October 31, 2003, William G.
Miller, the Chairman of the Board and Co-CEO of the Company, made a $2.0
million loan to us as a part of the senior credit facility.  The loan to us and Mr. Millers
participation in the senior credit facility were effected by the seventh
amendment to the credit agreement and a participation agreement between Mr.
Miller and the senior credit facility lenders.

On December
24, 2003, Mr. Miller increased his previous $2.0 million participation in the
existing senior credit facility by an additional $10.0 million.  These funds, along with additional funds
from The CIT Group/Business Credit, Inc., 
were used to satisfy our obligations to two of our existing senior
lenders with the result being that CIT, an existing senior lender, and Mr.
Miller constituted our senior lenders, with CIT holding 62.5% of such loan and
Mr. Miller participating in 37.5% of the loan. 
Mr. Millers portion of the loan is subordinated to that of CIT.

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In
conjunction with Mr. Millers increased participation, the senior credit
facility was restructured and restated as a $15.0 million revolving facility
and $12.0 million and $5.0 million term loans. 
As a result of this restructuring, all previously existing defaults
under the senior credit facility were waived, the interest rate was lowered by
2% to reflect a non-default rate, fees attributable to RoadOne of $30,000 per
month were eliminated, the financial covenants were substantially relaxed, and
availability under the facility was increased by approximately $5.0
million.  The senior lending group,
consisting of CIT and Mr. Miller, earned fees of $850,000 in connection
with the restructuring, including previously unpaid fees of $300,000 for the
earlier forbearance agreement through December 31, 2003 and $550,000 for the
restructuring of the loans described above. 
Of these fees, 37.5% ($318,750) were paid to Mr. Miller and the
remainder ($531,250) were paid to CIT. 
In addition, we will pay additional interest at a rate of 1.8% on Mr.
Millers portion of the loan, which is in recognition of the fact that Mr.
Millers rights to payments and collateral are subordinate to those of
CIT.  This transaction was approved by
the Special Committee of the Board, as well as the full Board of Directors with
Mr. Miller abstaining due to his personal interest in the transaction.

In order to
enter into this restructuring of the senior credit facility, CIT required that
the junior lenders agree to extend the standstill and payment blockage periods,
which were to expire at the end of April 2004, until July 31, 2005, which is
after the July 23, 2005 maturity of the senior debt.  The junior facility lenders were unwilling to extend such
standstill and payment blockage dates without 
the conversion provisions described above having been committed to by
us, subject only to shareholder approval of the conversion by Harbourside.  As a result, the restructuring of the senior
debt facility and the conversion and exchange of subordinated debt and warrants
described above were cross-conditioned upon each other and agreements effecting
them were entered into simultaneously on December 24, 2003.

To
effectuate the conversion and exchange of the subordinated debt and warrants,
we entered into a Binding Restructuring Agreement with Contrarian and
Harbourside on December 24, 2003.  Pursuant
to this agreement, Contrarian and Harbourside agreed to an exchange transaction
where they would extend the maturity date of 70% of the outstanding principal
amount of the junior debt, approximately $9.75 million, convert the remaining
30% of the outstanding principal, plus all accrued interest and fees, into our
common stock and convert the warrants into our common stock.  This agreement contemplated that the
conversions would be further documented in separate exchange agreements and
also contemplated registration rights agreements.  The Binding Restructuring Agreement also outlined the terms for
amending the junior credit facility to extend its maturity date to July 31,
2005 (which is after the July 23, 2005 maturity date of the senior credit
facility), to provide for an interest rate on the remaining debt of Contrarian
at 18% and the remaining debt of Harbourside at a reduced rate (which was
ultimately agreed to be 9%), to provide for financial covenants that match
those of the senior credit facility and to make other amendments to the junior
credit facility consistent with amendments made to the senior credit facility
as it was amended on December 24, 2003. 
The disparity in the interest rates to be earned by Contrarian and
Harbourside is caused by Contrarian negotiating an interest rate of 18% as a
condition to it entering into the Binding Restructuring Agreement, as a result
of which Harbourside agreed to reduce the rate to be received by it to 9% so
that we would continue to pay an effective blended interest rate of 14% on the
aggregate of the subordinated debt following the exchange transactions.  At the same time, Contrarian and Harbourside
entered into an agreement with our senior lenders to extend the maturity date
of the subordinated debt that they would continue to hold.

As of
January 14, 2004, we entered into separate exchange agreements with Contrarian
and Harbourside, a registration rights agreement with Contrarian and
Harbourside and an amendment to the junior credit facility with Contrarian and
Harbourside, all as contemplated in the Binding Restructuring Agreement.  Additional details regarding the specific
terms of the exchange agreements can be found under the heading Recent
Developments and Related Party Transactions.  Under the amendment to the junior credit facility, the maturity
of the remaining subordinated debt was extended and the interest rates thereon
were altered and the financial covenants were amended to match those in its
senior credit facility, which had been substantially relaxed in our favor on
December 24, 2003.  Specifically, the
consolidated fixed charge coverage ratio covenant was amended to provide that
we may not have a consolidated fixed charge coverage ratio of less than 1.1 to
1.0 for each four quarter period beginning with the four quarter period ending
March 30, 2003.  The consolidated fixed
charge coverage ratio is the ratio of consolidated EBITDA to consolidated fixed
charges.  In addition, the consolidated
EBITDA covenant was amended to provide that we must have consolidated

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EBITDA for each trailing three month period ended as of the last day of
each month, commencing on March 31, 2004, of at least $2.5 million.

Because of
the amount of obligations outstanding under our credit facilities and the
connection of the interest rate under each facility (including the default
rates) to the prime rate, an increase in the prime rate could have a
significant effect on our ability to satisfy our obligations under the credit
facilities and increase our interest expense significantly.  Therefore, our liquidity and access to
capital resources could be further affected by increasing interest rates.

Outstanding Borrowings.Outstanding borrowings under the Senior and Junior
Credit Facilities as of December 31, 2003 and as of December 31, 2002 were as
follows (in thousands):

|                               |               | December 31, 2003 |   | December 31, 2002 |       
|------------------------------ | ------------- | ----------------- | - | ----------------- | ------
|                               |               |                   |   |                   |       
|Senior
  Credit Facility       |               |                   |   |                   |       
|                               | Manufacturing |                   |   | $                 | 6,394 
|                               | Road One      |                   |   |                   | 451   
|                               | Term Loan     |                   |   |                   | 17,000
|                               |               |                   |   |                   |       
|                               | Total         |                   |   |                   | 23,845
|                               |               |                   |   |                   |       
|Junior
  Credit Facility       |               |                   |   | 16,743            |       
|                               |               |                   |   |                   |       
|                               |               |                   |   |                   |       
|Total
  Outstanding Borrowings |               |                   | $ | 40,588            |       
|                               |               |                   |   |                   |       

These
substantial reductions in the Companys overall indebtedness were due to
improved operating cash flow resulting from cost reductions and expense
controls.  Dispositions of RoadOne
assets and operations improved liquidity and generated proceeds and reduced
expenses, which were used to further reduce debt.  Borrowings under the junior credit facility have been further
reduced after December 31, 2003 as a result of our debt restructuring.

Financial Instruments

SFAS No.
133, Accounting for Derivative Instruments and Hedging Activities, as
amended, is effective for fiscal years beginning after June 15, 2000.  SFAS No. 133 establishes accounting and
reporting standards requiring that every derivative instrument (including
certain derivative instruments embedded in other contracts) be recorded in the
balance sheet as either an asset or liability measured at its fair value.  SFAS No. 133 requires that changes in the
derivatives fair value be recognized currently in earnings unless specific
hedge accounting criteria are met. 
Special accounting for qualifying hedges allows a derivatives gains and
losses to offset related results on the hedged item in the income statement,
and requires that a company must formally document, designate, and assess the
effectiveness of transactions that receive hedge accounting.

In October
2001, we obtained interest rate swaps as required by terms in our senior credit
facility to hedge exposure to market fluctuations.  The interest rate swaps cover $40.0 million in notional amounts
of variable rate debt and with fixed rates ranging from 2.55% to 3.920%.  The swaps expire annually from October 2002
to October 2004.  The hedges were deemed
to be fully effective resulting in a pretax loss of $12,000 recorded in Other
Comprehensive Loss at December 31, 2001. 
Upon expiration of these hedges, the amount recorded in Other
Comprehensive Loss will be reclassified into earnings as interest.  In 2002, the borrowing base was converted
from LIBOR to prime, which rendered the swap ineffective as a hedge.  Accordingly, concurrent with the conversion
we prematurely terminated the swap in February 2002 at a cost of $341,000.  The resulting loss was recorded in Other
Comprehensive Loss at December 31, 2002 and reclassified to earnings as interest
expense over the term of the senior credit facility.

The junior
credit facility contains provisions for the issuance of warrants of up to 0.5%
of the outstanding shares of our common stock on July 2002 and up to an
additional 1.5% in July 2003.  The
warrants were valued as of July 2001 based on the relative fair value using the
Black Scholes model with the following assumptions:  risk-free rate of 4.9%

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estimated life of 7 years, 72% volatility and no dividend yield.  Accordingly, we have recorded a liability
and make periodic mark to market adjustments, which are reflected in the
accompanying consolidated statement of operations in accordance with EITF Issue
00-19, Accounting for Derivative Financial Instruments Indexed to, and Potentially
Settled in, a Companys Own Stock.  At
December 31, 2003, the related liability was $349,000 and is included in
accrued liabilities in the accompanying consolidated financial statements.

Recent Accounting
Pronouncements

In April
2002, the FASB issued SFAS No. 145, Rescission of SFAS Nos. 4, 44, and 64,
Amendment of SFAS No. 13, and Technical Corrections as of April 2002.  This Statement rescinds SFAS No. 4,
Reporting Gains and Losses from Extinguishment of Debt, and an amendment of
that Statement, SFAS No. 64, Extinguishments of Debt Made to Satisfy
Sinking-Fund Requirements.  This
Statement also rescinds SFAS No. 44, Accounting for Intangible Assets of Motor
Carriers.  This Statement amends SFAS
No. 13, Accounting for Leases, to eliminate an inconsistency between the
required accounting for sale-leaseback transactions and the required accounting
for certain lease modifications for sale-leaseback transaction and the required
accounting for certain lease modifications that have economic effects that are
similar to sale-leaseback transactions. 
SFAS No. 145 will be effective for fiscal 2003, which begins January 1,
2003.  The adoption of this statement
did not have a material impact on our results of operations of financial
position.

FASB has
issued SFAS No. 146, Accounting for Exit or Disposal Activities. SFAS No. 146
addresses the recognition, measurement, and reporting of costs that are
associated with exit and disposal activities, including costs related to
terminating a contract that is not a capital lease and termination benefits
that employees who are involuntarily terminated receive under the terms of a
one-time benefit arrangement that is not an ongoing benefit arrangement or an
individual deferred-compensation contract. SFAS No. 146 supersedes Emerging
Issues Task Force Issue No. 94-3, Liability Recognition for Certain Employee
Termination Benefits and Other Costs to Exit an Activity (including Certain
Costs Incurred in a Restructuring) and requires liabilities associated with
exit and disposal activities to be expensed as incurred. SFAS No. 146 was
effective for our exit or disposal activities that were initiated after
December 31, 2002.

In April
2003, the FASB issued SFAS No. 149, Amendment of Statement 133 on
Derivative Instruments and Hedging Activities.  SFAS No. 149 amends and clarifies the accounting for certain
derivative instruments embedded in other contracts, and for hedging activities
under SFAS No. 133.  SFAS
No. 149 is effective for certain contracts entered into or modified after
June 30, 2003.  The adoption of
SFAS No. 149 had no impact on our financial position or results of
operations.

In May
2003, the FASB issued SFAS No. 150, Accounting for Certain Financial
Instruments with Characteristics of both Liabilities and Equity, effective for
financial instruments entered into or modified after May 31, 2003, and existing
financial instruments at the beginning of the third quarter of 2003.  This statement sets standards for classification
and measurement of certain financial instruments.  The adoption of SFAS No. 150 had no impact on our financial
position or  results of operations.

In December
2003, the FASB issued a revision of FIN 46, Consolidation of Variable Interest
Entities.  FIN 46 applies to any
business enterprise that has a controlling interest, contractual relationship
or other business relationship with a variable interest entity.  FIN 46 provides guidance for determining
when an entity should consolidate a variable interest entity.  The interpretation is effective for periods
ending after December 31, 2003.  We have
no contractual relationship or other business relationship with a variable
interest entity, and therefore the adoption will not have an effect on our
consolidated results of operations or financial position.

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|ITEM 7A. | FINANCIAL
  STATEMENTS AND SUPPLEMENTARY DATA
|-------- | ---------------------------------------------

We
believe that our exposures to market risks are immaterial. We hold no market
risk sensitive instruments for trading purposes. At present, we do not employ
any derivative financial instruments, other financial instruments, or
derivative commodity instruments to hedge any market risk, and we have no plans
to do so in the future. To the extent we have borrowings outstanding under our
credit facilities, we are exposed to interest rate risk because of the variable
interest rate under the facility.

|ITEM 8. | FINANCIAL
  STATEMENTS AND SUPPLEMENTARY DATA
|------- | ---------------------------------------------

The
response to this item is included in Part IV, Item 15 of this Report.

|ITEM 9. | CHANGES
  IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
|------- | --------------------------------------------------------------------------------------

PricewaterhouseCoopers
LLP were our independent public accountants for the fiscal year ended December
31, 2002.  On October 3, 2003,
PricewaterhouseCoopers LLP resigned as our principal accountants.  On October 9, 2003 we engaged Joseph
Decosimo and Company, LLP to be our principal accountants.  The decision to engage Joseph Decosimo and
Company, LLP was made upon the recommendation of our Audit Committee and the
approval of our Board of Directors. 
During our two most recent fiscal years and the subsequent interim
period through October 9, 2003, we have not consulted with Joseph Decosimo and
Company, LLP regarding any matter requiring disclosure under Regulation S-K,
Item 304(a)(2)(i) and (ii).

The report
of PricewaterhouseCoopers LLP for the year ended December 31, 2002 included an
explanatory paragraph.  This explanatory
paragraph was included as a result of us being in default of certain covenants
under our senior and subordinated credit facility agreements, and because our
subordinated credit facility matured on July 23, 2003.  The senior and subordinated credit facility
agreements contain certain cross-default provisions and provide for the
acceleration of amounts due as well as other remedies in the event of
default.  The report of
PricewaterhouseCoopers LLP indicated that these circumstances raise substantial
doubt about our ability to continue as a going concern.

The report
of PricewaterhouseCoopers LLP for the period ending December 31, 2001 included
a separate paragraph regarding our default under certain credit agreements and
related waivers.

Except as
described in the two preceding paragraphs, neither of the reports of
PricewaterhouseCoopers LLP on our financial statements for the year ended
December 31, 2002, the eight months ended December 31, 2001, or the year ended
April 30, 2001 contained an adverse opinion or disclaimer of opinion, nor was
either qualified or modified as to uncertainty, audit scope, or accounting
principle.

In
connection with its audits of us for the two most recent fiscal years and
through October 3, 2003, there were no disagreements with
PricewaterhouseCoopers LLP on any matter of accounting principles or practices,
financial statement disclosure, or auditing scope or procedure, which
disagreements, if not resolved to the satisfaction of PricewaterhouseCoopers
LLP, would have caused them to make reference to the subject matter of the
disagreements in their reports on the financial statements for such fiscal
years.

|ITEM 9A. | CONTROLS AND PROCEDURES
|-------- | -----------------------

The Company
carried out an evaluation, under the supervision and with the participation of
the Companys management, including the Chief Executive Officer (CEO) and Chief
Financial Officer (CFO), of the effectiveness of the design and operation of
its disclosure controls and procedures, as defined in Rules 13a-14(c) under the
Securities Exchange Act of 1934, as of the end of the period covered by this
report.  Based upon this evaluation, the
Companys CEO and CFO have concluded that the disclosure controls and
procedures were effective as of the end of the period covered by this report to
ensure that information required to be disclosed by the Company in reports that
it files or submits under the Exchange Act

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are recorded, processed, summarized and reported within the time
periods specified in Securities and Exchange Commission rules and forms.

There
were no significant changes in the Companys internal controls or in other
factors that could significantly affect internal controls subsequent to the
date of this evaluation.

PART III

|ITEM 10. | DIRECTORS
  AND EXECUTIVE OFFICERS OF THE REGISTRANT
|-------- | ----------------------------------------------------

The
following table sets forth the names, ages and positions of our executive
officers and directors:

|Name                       |  | Age |  | Position                                                                                          
|-------------------------- |  | --- |  | --------------------------------------------------------------------------------------------------
|                           |  |     |  |                                                                                                   
|William G. Miller          |  | 57  |  | Chairman of the Board, Co-Chief Executive Officer                                                 
|Jeffrey I. Badgley         |  | 51  |  | President, Co-Chief Executive Officer and Director                                                
|Frank Madonia              |  | 55  |  | Executive Vice President, Secretary and General Counsel                                           
|J. Vincent Mish            |  | 53  |  | Executive Vice President, Chief Financial Officer and      President of
  Financial Services Group
|A. Russell
  Chandler, III |  | 58  |  | Director                                                                                          
|Paul E. Drack              |  | 74  |  | Director                                                                                          
|Richard H. Roberts         |  | 49  |  | Director                                                                                          

William G. Miller has served as Chairman
of the Board since April 1994 and our Co-Chief Executive Officer since October
2003.  From January 2002 to August 2002
Mr. Miller served as the Chief Executive Officer of Team Sports Entertainment,
Inc., as well as Team Sports Entertainments subsidiary, Team Racing Auto
Circuit.  Mr. Miller served as our Chief
Executive Officer from April 1994 until June 1997.  In June 1997, he was named Co-Chief Executive Officer, a title he
shared with Jeffrey I. Badgley until November 1997.  Mr. Miller also served as our President from April 1994 to June
1996.  He served as Chairman of Miller
Group, Inc., from August 1990 through May 1994, as its President from August
1990 to March 1993, and as its Chief Executive Officer from March 1993 until
May 1994.  Prior to 1987, Mr. Miller
served in various management positions for Bendix Corporation, Neptune
International Corporation, Wheelabrator-Frye Inc. and The Signal Companies, Inc.

Jeffrey
I. Badgleyhas served as our Co-Chief Executive
Officer with William G. Miller since October 2003, as our President since June
1996 and as a director since January 1996. 
Mr. Badgley served as our Chief Executive Officer from November 1997 to
October 2003.  In June 1997, he was
named our Co-Chief Executive Officer, a title he shared with Mr. Miller until
November 1997.  Mr. Badgley served as
our Vice President from 1994 to 1996, and as our Chief Operating Officer from
June 1996 to June 1997.  In addition,
Mr. Badgley has served as President of Miller Industries Towing Equipment Inc.
since 1996.  Mr. Badgley served as Vice
PresidentSales of Miller Industries Towing Equipment Inc. from 1988 to
1996.  He previously served as Vice
PresidentSales and Marketing of Challenger Wrecker Corporation, from 1982
until joining Miller Industries Towing Equipment Inc.

Frank
Madoniahas served as our Executive Vice President,
General Counsel and Secretary since September 1998.  From April 1994 to September 1998 Mr. Madonia served as our Vice
President, General Counsel and Secretary. 
Mr. Madonia served as Secretary and General Counsel to Miller Industries
Towing Equipment Inc. since its acquisition by Miller Group in 1990.  From July 1987 through April 1994, Mr.
Madonia served as Vice President, General Counsel and Secretary of Flow
Measurement.  Prior to 1987, Mr. Madonia
served in various legal and management positions for United States Steel
Corporation, Neptune International Corporation, Wheelabrator-Frye Inc., The
Signal Companies, Inc.

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and Allied-Signal Inc.  In
addition, Mr. Madonia is registered to practice before the United States Patent
and Trademark Office.

J. Vincent Mishis a
certified public accountant and has served as our Chief Financial Officer and
Treasurer since June 1999, a position he also held from April 1994 through
September 1996.  In December 2002, Mr.
Mish was appointed as our Executive Vice President.  He also has served as President of the Financial Services Group
since September 1996 and as a Vice President of Miller Industries since April
1994.  Mr. Mish served as Vice President
and Treasurer of  Miller Industries
Towing Equipment Inc. since its acquisition by Miller Group in 1990.  From February 1987 through April 1994, Mr.
Mish served as Vice President and Treasurer of Flow Measurement.  Mr. Mish worked with Touche Ross &
Company (now Deloitte and Touche) for over ten years before serving as
Treasurer and Chief Financial Officer of DNE Corporation from 1982 to
1987.  Mr. Mish is a member of the
American Institute of Certified Public Accountants and the Tennessee and
Michigan Certified Public Accountant societies.

A. Russell Chandler, IIIhas served as a
director since April 1994.  He is founder
and Chairman of Whitehall Group Ltd., a private investment firm based in
Atlanta, Georgia.  Mr. Chandler served
as the Mayor of the Olympic Village for the Atlanta Committee for the Olympic
Games from 1990 through August 1996. 
From 1987 to 1993, he served as Chairman of United Plastic Films, Inc.,
a manufacturer and distributor of plastic bags.  He founded Qualicare, Inc., a hospital management company, in
1972 and served as President and Chief Executive Officer until its sale in
1983.

Paul E. Drackhas served as a director
since April 1994.  Mr. Drack is also a
director of Euramax International PLC. 
Mr. Drack retired in December 1993 as President and Chief Operating Officer
of AMAX Inc., positions he held since August 1991.  From 1985 to 1991, Mr. Drack served in various capacities for
operating subsidiaries of AMAX Inc. including Chairman, President and Chief
Executive Officer of Alumax Inc. and President of Kawneer Company.  He was a director of AMAX Inc. from 1988 to
1993.  Prior to its acquisition by
Cyprus  Minerals in November 1993, AMAX
Inc. was a producer of aluminum and manufactured aluminum products with
interests in domestic energy and gold production.

Richard H. Robertshas served as a
director since April 1994. 
Mr. Roberts currently serves as Senior Vice President, Landair
Transport, Inc., a position he has held since August 1994.  From August 1994 until July 2002, Mr.
Roberts served as General Counsel and Secretary of Forward Air Corporation and
Landair Corporation.  From May 1995
until May 2002 Mr. Roberts served as a director of Forward Air
Corporation.  Mr. Roberts also a held
similar position with Landair Corporation from September 1998 until February
2003.  Mr. Roberts was partner in the
law firm of Baker, Worthington, Crossley & Stansberry, counsel to us, from
January 1991 to August 1994 and prior thereto was an associate of the firm.

Board Composition and
Committees

Our Board
of Directors held seven meetings during 2003. 
The Board has determined that a majority of the members of the Board of
Directors are independent as independent is defined under applicable
federal securities laws and the recently revised NYSE Listing Standards.  The independent directors are Messrs.
Chandler, Drack and Roberts.  The Board
of Directors has standing Audit, Compensation and Nominating Committees.  A copy of the charters for all three
committees and a copy of the Companys Corporate Governance Guidelines are
available on the Companys website.  In
addition, the non-management directors also meet in executive session as a part
of the meeting of the Audit Committee. 
The presiding director at those sessions is selected by the
non-management directors on a meeting by meeting basis.  Interested parties may communicate with a
non-management director by mailing communication to the attention of that
director at 8503 Hilltop Road, Ooltewah, Tennessee 37363.

The Audit
Committee is comprised of Messrs. Chandler, Drack and Roberts.  The Audit Committee recommends the appointment
of independent public accountants, reviews the scope of audits proposed by the
independent public accountants, reviews audit reports on various aspects of
corporate operations, and periodically consults with the independent public
accountants on matters relating to internal financial controls and
procedures.  The Audit Committee held
four meetings during 2003.  The
Companys Board of Directors has determined that Mr. Chandler qualifies as an
audit committee financial expert.

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The purpose
of the Compensation Committee is to establish, among other things, salaries,
bonuses and other compensation for our officers, and to administer our stock
option and other employee benefit plans. 
Messrs. Chandler, Drack and Roberts comprise the Compensation
Committee.  The Compensation Committee
held one meeting during 2003.

Through
February 2004, the Nominating Committee consisted of Messrs. Chandler, Drack
and Miller.  In February 2004, Mr.
Roberts replaced Mr. Miller on the Nominating Committee.  The Nominating Committee was established to
evaluate candidates for service as directors. 
The Nominating Committee held one meeting during 2003.  The Nominating Committee will consider
candidates recommended by shareholders. 
Shareholder recommendations must comply with the procedures for
nominations set forth in Article I, Section 1.2, of our Bylaws.

All
incumbent directors attended more than 75% of the meetings of the Board of
Directors and the respective committees of which they are members.

Code of Ethics

We adopted
a code of business conduct and ethics that applies to its directors, officers,
and employees.  A copy of our code of
business conduct and ethics can be found on our website.  A copy can also be obtained upon request
from our Corporate Secretary.

Compliance with Section 16(a) of the
Securities Exchange Act of 1934

Section
16(a) of the Securities Exchange Act of 1934 and the disclosure requirements of
Item 405 of Regulation S-K require our directors and executive officers, and
any persons holding more than 10% of any class of our equity securities, to
report their ownership of such equity securities and any subsequent changes in
that ownership to the Securities and Exchange Commission, The New York Stock
Exchange and us.  Based solely on a
review of the written statements and copies of such reports furnished to us by
our executive officers and directors, our management believes that during
fiscal 2003 all Section 16(a) filing requirements applicable to its executive
officers, directors and shareholders were complied with, and our management is
not aware of any filing delinquencies.

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ITEM 11.     EXECUTIVE
COMPENSATION

Summary Compensation Table

The
following table sets forth certain information for the fiscal years ended
December 31, 2003 and 2002, the eight month transition period ended December
31, 2001 (noted as Trans. Per.) and the fiscal years ended April 30, 2001 and
2000 concerning compensation paid by us and our subsidiaries to our Chief
Executive Officer and to each of our other most highly compensated executive
officers as of December 31, 2003 who earned in excess of $100,000 in salary and
bonus during the fiscal year 2003 (collectively, the Named Executive
Officers).

|                                                                                                              |  |      |               |                          |   | Long Term
  Compensation Awards | 
|------------------------------------------------------------------------------------------------------------- |  | ---- | ------------- | ------------------------ | - | ------------------------------- | 
|                                                                                                              |  |      |               |                          |   |                                 | 
|                                                                                                              |  |      |               | Annual
  Compensation(1) |   | SecuritiesUnderlying            | 
|                                                                                                              |  |      |               |                          |   |                                 | 
|Name and Principal Position                                                                                   |  | Year |               | Salary ($)               |   | Bonus ($)                       | 
|                                                                                                              |  |      |               |                          |   |                                 | 
|                                                                                                              |  |      |               |                          |   |                                 | 
|William G.
  Miller                                                                                           |  |      | 2003          |                          | $ | 180,000                         | 
|Chairman
  and Co-Chief Executive Officer(2)                                                                  |  |      | 2002          |                          |   | 180,000                         | 
|                                                                                                              |  |      | Trans.
  Per. |                          |   | 120,000                         | 
|                                                                                                              |  |      | 2001          |                          |   | 180,000                         | 
|                                                                                                              |  |      | 2000          |                          |   | 180,000                         | 
|                                                                                                              |  |      |               |                          |   |                                 | 
|Jeffrey I.
  Badgley                                                                                          |  |      | 2003          |                          |   | 276,210                         | 
|President
  and Co-Chief Executive Officer(3)                                                                 |  |      | 2002          |                          |   | 276,210                         | 
|                                                                                                              |  |      | Trans.
  Per. |                          |   | 184,133                         | 
|                                                                                                              |  |      | 2001          |                          |   | 266,667                         | 
|                                                                                                              |  |      | 2000          |                          |   | 245,833                         | 
|                                                                                                              |  |      |               |                          |   |                                 | 
|Frank
  Madonia                                                                                               |  |      | 2003          |                          |   | 196,207                         | 
|Executive
  Vice President, Secretary and
      General Counsel                                               |  |      | 2002          |                          |   | 196,207                         | 
|                                                                                                              |  |      | Trans.
  Per. |                          |   | 130,800                         | 
|                                                                                                              |  |      | 2001          |                          |   | 191,667                         | 
|                                                                                                              |  |      | 2000          |                          |   | 178,333                         | 
|                                                                                                              |  |      |               |                          |   |                                 | 
|J. Vincent
  Mish                                                                                             |  |      | 2003          |                          |   | 176,206                         | 
|Executive
  Vice President, Chief Financial
      Officer and President of the Financial Services
      Group |  |      | 2002          |                          |   | 176,206                         | 
|                                                                                                              |  |      | Trans.
  Per. |                          |   | 117,467                         | 
|                                                                                                              |  |      | 2001          |                          |   | 163,333                         | 
|                                                                                                              |  |      | 2000          |                          |   | 153,333                         | 

---

|(1) | Excludes
  perquisites and other personal benefits aggregating less than $50,000 or 10%
  of the named executive officers annual salary and bonus.                                      
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(2) | Mr. Miller
  became our Co-Chief Executive Officer in October 2003.                                                                                                                      
|(3) | Mr. Badgley
  served as our President and Chief Executive Officer until October 2003 when
  he became Co-Chief Executive Officer.                                                        
|(4) | Bonus awards
  consist entirely of amounts earned in previous fiscal years which are paid
  incrementally to the executive officer in the year noted in accordance with
  our bonus plan.
|(5) | Consists of
  a matching contribution made to the executives account in our 401(k) Plan.                                                                                                

32

---

---

|(6) | Mr. Badgleys
  other compensation includes $6,250 received from the sale of 125,000 out of
  the money options to us at a purchase price of $0.05 per option and a $2,678
  matching contribution to Mr. Badgleys account in our 401(k) Plan.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(7) | Mr.
  Madonias other compensation includes $4,700 received from the sale of 94,000
  out of the money options to us at a purchase price of $0.05 per option and a
  $1,928 matching contribution to Mr. Madonias account in our 401(k) Plan. 
|(8) | Mr. Mishs
  other compensation includes $4,700 received from the sale of 94,000 out of
  the money options to us at a purchase price of $0.05 per option and a $1,522
  matching contribution to Mr. Mishs account in our 401(k) Plan.       

No
options were granted to or exercised by the Named Executive Officers during
2003.

Option Values as of December 31, 2003

The
following table summarizes certain information regarding option values of the
Named Executive Officers as of the end of December 31, 2003.

|                     |  | No. of Securities Underlying
  Unexercised Options at
  Fiscal Year End |        | Value of Unexercised
  In-the-Money Options
  At Fiscal Year End(1) | 
|-------------------- |  | ----------------------------------------------------------------------- | ------ | ------------------------------------------------------------------- | 
|                     |  |                                                                         |        |                                                                     | 
|Name                 |  | Exercisable                                                             |        | Unexercisable                                                       | 
|                     |  |                                                                         |        |                                                                     | 
|William G.
  Miller  |  |                                                                         | -      |                                                                     | 
|Jeffrey I.
  Badgley |  |                                                                         | 72,586 |                                                                     | 
|Frank
  Madonia      |  |                                                                         | 59,786 |                                                                     | 
|J. Vincent
  Mish    |  |                                                                         | 43,286 |                                                                     | 

---

|(1) | As required
  by the rules of the Securities and Exchange Commission, the value of unexercised
  in-the-money options for the common stock is calculated based on the closing
  sale price on the New York Stock Exchange as of December 31, 2003, which was
  $7.51 per share.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Employment
Contracts, Termination of Employment, Severance and Change-in-Control
Arrangements

In
December 2002, we entered into an employment agreement with Mr. Mish.  The employment agreement provides for a
rolling three-year term, extended automatically as of each annual shareholders
meeting such that the remaining term of the employment agreement is three years
as of that date.  Notwithstanding the
foregoing, the term of the agreement ends on Mr. Mishs 65th
birthday.  The employment agreement
provides for a base salary of $175,000, subject to annual review by the board
of directors.  Additionally, Mr. Mish
may participate in any bonus plans or other benefits generally available to our
executive officers.  We may terminate
Mr. Mish pursuant to this employment agreement for any reason upon written
notice.  However, if termination is for
other than just cause (as defined in the employment agreements), 100% of Mr.
Mishs options for our stock granted pursuant to our stock option and incentive
plan will vest and become immediately exercisable, and we must pay Mr. Mish his
current base salary plus bonuses and health and life insurance benefits for a
period of three years, or until the end of the term of the employment
agreement, whichever is shorter. 
Finally, the employment agreement also provides for non-competition and confidentiality
during employment and for a period ending two years from termination or
expiration of the employment agreement (or one year if termination occurs
pursuant to a change in control).

In
September 1998, we entered into employment agreements with Messrs. Badgley and
Madonia.  Each employment agreement
provides for a rolling three-year term, extended automatically each day for an
additional day such that the remaining term of each employment agreement is
three years.  However, on each
individuals 62nd birthday, the employment agreement ceases to extend
automatically, and instead terminates three years from that date.  The employment agreements provide for base
salaries of $200,000 to Mr. Badgley, and $165,000 to Mr. Madonia, each subject
to annual review by the board of directors. 
Additionally, each individual may participate in any bonus plans or
other benefits generally available to our executive officers.  We may terminate Messrs. Badgley or Madonia
pursuant to their respective employment agreements for any reason upon written
notice.  However, if termination is for
other than just cause (as defined in the employment agreements), 100% of the
terminated individuals options for our stock

33

---

---

granted pursuant to our stock option and incentive plan will vest and
become immediately exercisable, and we must pay the terminated individual his
current base salary plus bonuses and health and life insurance benefits for a
period of three years, or until the end of the term of the employment
agreement, whichever is shorter. 
Finally, each employment agreement also provides for non-competition and
confidentiality during employment and for a period ending two years from
termination or expiration of the employment agreement (or one year if termination
occurs pursuant to a change in control as defined in each individuals change
in control agreement described below).

In
September 1998, we entered into change in control agreements with Messrs.
Badgley and Madonia.  Each change in control
agreement provides for a rolling three-year term, extended automatically each
day for an additional day such that the remaining term of each employment
agreement is three years.  However, on
each individuals 62nd birthday, the employment agreement ceases to extend
automatically, and instead terminates three years from that date.  Upon termination within 6 months prior to or
2 years after a change in control (as defined in each respective change in
control agreement), Messrs. Badgley and Madonia are entitled to payment of then
current salary, plus bonuses and incentives, and health and life insurance
coverage for a period of three years following termination.

In
July 1997, we entered into an employment agreement with Mr. Miller which provides
for a base salary as agreed to by us and Mr. Miller from time to time, but
which shall in any event be substantially the same as the base salary of our
Chief Executive Officer unless Mr. Miller agrees to accept a lower salary.  Mr. Miller also receives certain insurance
and other benefits as are generally provided by us to our executive
employees.  Mr. Millers employment
agreement is for an indeterminate term and allows Mr. Miller to pursue other
business related interests as long as they do not interfere with his duties for
us.  Employment may be terminated by
either party upon three years written notice or for cause, as defined in the
employment agreement.  The agreement
also provides for non-competition by Mr. Miller for a period ending three years
from termination of the agreement if the agreement is terminated by breach of
Mr. Miller.

Compensation of Directors

The
members of the board of directors who are employees of Miller Industries do not
receive additional compensation for board or committee service (other than
service on the Special Committee formed during 2003).  Prior to 2003, upon initial election to the board, each
non-employee director was granted an option to purchase 2,000 shares of common
stock as of the date of becoming a director. 
In addition, on the first business day following each annual meeting of
shareholders, each non-employee director would receive an option to purchase a
number of shares of our common stock equal to $32,500 divided by the
Black-Scholes value of an option to purchase one such share, and up to 400
additional shares based upon our earnings. 
Messrs. Chandler, Drack and Roberts were granted 9,400 options each on
May 28, 2002.

In
February 2003, the board approved a new compensation plan beginning in 2003 for
non-employee directors that includes a cash and an equity compensation
component.  Each non-employee director
is entitled to receive an annual payment of $25,000 as compensation for service
on the board of directors.  The payment
to the directors of the cash portion of their compensation has not occurred for
fiscal years 2003 or 2004.  In addition,
each director is entitled to awards under the non-employee director stock plan.  The awards will be paid in shares of common
stock equal to $25,000 divided by the closing price of the common stock on the
first trading day of the fiscal year. 
All future equity compensation paid to the directors will be made in
accordance with the plan.

Compensation Committee Interlocks and Insider
Participation

During
2003, the Compensation Committee was comprised of Messrs. Chandler, Drack and
Roberts, all of whom were non-employee directors.

34

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ITEM 12.     SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The
following table sets forth, as of March 15, 2004 certain information with
respect to (a) all shareholders known to be beneficial owners (as that term
is defined in the rules of the Securities and Exchange Commission)  of more than five percent of the common
stock; and (b) the common stock beneficially owned (i) by each director or
nominee for director, (ii) by the executive officers named in the Summary
Compensation Table and (iii) by all our executive officers and directors as a
group.  Except as otherwise indicated,
the shareholders listed in the table have sole voting and investment powers
with respect to the common stock owned by them.

|Name and Address of Beneficial Owner                                                                                                                                              |  | Amount and Nature
  of Beneficial
  Ownership(1) |           | Percent of
  Class(1) | 
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------------------------------------------ | --------- | --------------------- | 
|                                                                                                                                                                                  |  |                                                  |           |                       | 
|William G.
  Miller(2)                                                                                                                                                            |  |                                                  | 2,099,713 | (3)                   | 
|Account
  Management, LLC                                                                                                                                                         |  |                                                  | 823,530   | (4)                   | 
|Contrarian
  Funds, LLC                                                                                                                                                           |  |                                                  | 734,151   |                       | 
|Peter S.
  Lynch                                                                                                                                                                  |  |                                                  | 682,600   | (5)                   | 
|Avocet Capital Management , L.P.     }
  Blackpool Enterprises, LLC                }
  Raymond S. Ingelby                            }
  Avocet Investment Partners, L.P.(6)    } |  |                                                  | 539,975   | (6)                   | 
|Jeffrey I.
  Badgley                                                                                                                                                              |  |                                                  | 95,901    | (7)                   | 
|Frank
  Madonia                                                                                                                                                                   |  |                                                  | 83,401    | (8)                   | 
|J. Vincent
  Mish                                                                                                                                                                 |  |                                                  | 58,901    | (9)                   | 
|A. Russell
  Chandler, III                                                                                                                                                        |  |                                                  | 61,430    | (10)                  | 
|Richard H.
  Roberts                                                                                                                                                              |  |                                                  | 46,470    | (11)                  | 
|Paul E.
  Drack                                                                                                                                                                   |  |                                                  | 44,070    | (12)                  | 
|All
  Executive Officers and Directors as a Group 
  (7 persons)                                                                                                                  |  |                                                  | 2,489,886 | (13)                  | 

---

|*   | Less than
  one percent                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | The Percent
  of Class column represents the percentage that the named person or group
  would beneficially own if such person or group, and only such person or
  group, exercised all currently exercisable options and rights to acquire
  shares of common stock held by such person or group.                                                                                                                                                                                                                                                                                                                                                                                   
|(2) | Mr. Millers
  business address is Miller Industries, Inc., 3295 River Exchange Parkway,
  Suite 220, Norcross, Georgia 30092.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|(3) | Includes
  109,288 shares held by the Miller Family Foundation, Inc., a Georgia
  non-profit corporation of which Mr. Miller is the sole director.  Also includes 2,800 shares held by Mr.
  Millers minor son.  Includes 583,556
  shares of common stock held by Harbourside, of which Mr. Miller owns a 21.72%
  interest as a limited partner and a 1% interest as the sole general partner.  As the sole general partner of
  Harbourside, Mr. Miller has sole voting power over the shares of the common
  stock held by Harbourside.                                                                                                                                         
|(4) | As reported
  in a Schedule 13G filed with the SEC on February 14, 2003, Account
  Management, LLC, a registered investment advisor, has sole dispositive power
  over 823,530 of the shares reported. 
  Account Management does not have voting power with respect to any of
  the shares reported.  Account
  Managements address is 2 Newbury Street, Boston, Massachusetts 02116.                                                                                                                                                                                                                                                                                              
|(5) | As reported
  in an amended Schedule 13G filed with the SEC on February 14, 2003, Mr. Lynch
  has sole voting and dispositive power over 242,600 of the shares reported and
  shared voting and dispositive power over 440,000 of the shares reported.  The shares reported include shares
  beneficially owned by Mr. Lynchs wife, shares beneficially owned in two
  charitable lead trusts and a charitable remainder trust, shares beneficially
  owned in trust for members of Mr. Lynchs family and shares beneficially
  owned by a charitable foundation of which Mr. Lynch is a trustee.  Mr. Lynchs address is 82 Devonshire
  Street, S8A, Boston, Massachusetts 02109.
|(6) | As reported
  in a Schedule 13G filed with the SEC on February 20, 2003, Avocet Capital
  Management, L.P., a registered investment advisor, (ACM), Blackpool
  Enterprises, LLC (Blackpool) and Raymond Ingelby (Ingelby) are members of a
  group who have shares voting and dispositive power over 539,975 of the shares
  reported.  Avocet Investment Partners,
  L.P. (AIP) has shared voting and dispositive power over 466,925 of the shares
  reported.  AIP disclaims membership in
  a group.  ACM, Blackpool and Ingelby
  expressly disclaim beneficial ownership in the reported shares, except to the
  extent of their respective pecuniary interests.  AIP          

35

---

---

|     | expressly
  disclaims beneficial ownership of any of the shares reported on the Schedule
  13G.  The address for ACM, Blackpool,
  Ingelby and AIP is 5508 Highway 290 West, Austin, Texas 78735.                                                           
|---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(7)  | Includes
  72,586 shares which are issuable pursuant to options which are exercisable
  within sixty days of the date set forth above.  Does not include any shares held by Harbourside, of which Mr.
  Badgley owns a 22.73% interest as a limited partner.
|(8)  | Includes
  59,786 shares which are issuable pursuant to options which are exercisable
  within sixty days of the date set forth above.  Does not include any shares held by Harbourside, of which Mr.
  Madonia owns a 4.55% interest as a limited partner. 
|(9)  | Includes
  43,286 shares which are issuable pursuant to options which are exercisable
  within sixty days of the date set forth above.  Does not include any shares held by Harbourside, of which Mr.
  Mish owns a 4.55% interest as a limited partner.    
|(10) | Includes
  32,748 shares which are issuable pursuant to options which are exercisable
  within sixty days of the date set forth above.                                                                                                                      
|(11) | Includes
  32,748 shares which are issuable pursuant to options which are exercisable
  within sixty days of the date set forth above.                                                                                                                      
|(12) | Includes
  32,748 shares which are issuable pursuant to options which are exercisable
  within sixty days of the date set forth above.                                                                                                                      
|(13) | Includes
  273,902 shares which are issuable pursuant to options which are exercisable
  within sixty days of the date set forth above.                                                                                                                     

ITEM
13.     CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Subordinated Debt and Warrant Conversion

On
November 24, 2003, Harbourside purchased from Contrarian 44.286% of (1) the
subordinated debt and (2) the warrants to purchase 186,028 shares of our common
stock.  As a result of this
transaction,  Harbourside acquired (1)
approximately $6.13 million of the outstanding principal of subordinated debt
plus accrued interest and fees attributable to this outstanding principal and
(2) warrants to purchase an aggregate of 82,382 shares of our common stock,
consisting of warrants to purchase up to 20,998 shares at an exercise price of
$3.48 and 61,384 shares at an exercise price of $3.27.  Contrarian retained the remaining principal
outstanding under the junior credit facility, which is approximately $7.72
million, plus related interest and fees thereon of approximately $1.65 million,
and the remaining warrants to purchase 103,646 shares of common stock.

On
January 14, 2004, we entered into an exchange agreement with Harbourside
Investments, LLLP, a Georgia limited liability partnership, pursuant to which
we later issued 583,556 shares of our common stock upon shareholder approval in
exchange for approximately $1.8 million principal amount of, plus approximately
$1.32 million of accrued interest and fees on, our outstanding subordinated
debt and warrants to purchase 82,382 shares of our common stock.

Under
the Exchange Agreement, Harbourside retained 70% of the outstanding principal
amount of the subordinated debt that it held and converted the remaining 30% of
the outstanding principal amount of such debt plus all accrued interest and
commitment fees thereunder into shares of our common stock.  Immediately prior to entering into the
Exchange Agreement, Harbourside held approximately $7.45 million of our subordinated
debt, consisting of approximately $6.13 million of outstanding principal and
approximately $1.32 million of accrued interest and fees.  Harbourside continues to hold approximately
$4.29 million principal amount of subordinated debt and converted approximately
$3.16 million of the subordinated debt (30% of $6.13 million principal amount,
plus approximately $1.32 million of accrued interest and fees) into 548,738
shares of our common stock.  In
addition, Harbourside received 34,818 shares of our common stock in exchange
for the warrants to purchase 82,382 shares of our common stock.

The
subordinated debt and warrants held by Harbourside were purchased by
Harbourside from Contrarian Funds, LLC on November 24, 2003.  Contrarian had previously purchased all of
our outstanding subordinated debt in a series of transactions during the second
half of 2003.  The subordinated debt was
originally issued pursuant to that certain Amended and Restated Credit Agreement,
dated July 23, 2001, as amended, by and among us and Miller Industries Towing
Equipment, Inc., a Delaware corporation and Bank of America, N.A. in its
capacity as a lender, and certain other financial institutions.  This junior credit facility and the notes
issued pursuant to it are subordinate to our senior credit facility which was
also entered into on July 23, 2001.  The
subordinated debt had an original aggregate principal amount of $14.0 million
bearing interest at the prime rate plus 6.0% per annum and at the time of
Contrarians purchases had an outstanding principal amount of approximately
$13.85 million bearing interest at the default rate of 14% per annum.  The original maturity date of the
subordinated debt was July 23, 2003. 
The total amount outstanding on the subordinated debt

36

---

---

as of January 14, 2004, including accrued interest and commitment fees,
was approximately $16.83 million with an interest rate of 14% per annum
continuing to apply.

As
a part of its purchases of the subordinated debt, Contrarian also purchased
warrants, or the rights to receive warrants, to purchase 186,028 shares of our
common stock.  We issued these warrants
to the initial lenders under the junior credit facility pursuant to a Warrant
Agreement, dated July 23, 2001, by and among us and the initial lenders.The 186,028 total consists of
warrants issued in July 2002 for the purchase of 47,417 shares of our common
stock at an exercise price of $3.48 and warrants issued in October 2003 for
138,611 shares of common stock at an exercise price of $3.27.  Other than these transactions relating to
the subordinated debt and the warrants, which it purchased without our
involvement, Contrarian has no relationship with us or Harbourside.

Harbourside
is a limited liability limited partnership of which several of our executive
officers and directors are partners. 
Specifically, William G. Miller is the general partner of, and controls,
Harbourside.  Mr. Miller is our Chairman
of the Board and Co-Chief Executive Officer, as well as the holder of
approximately 16% of our outstanding common stock.  Mr. Miller, Jeffrey I. Badgley, our President and Co-Chief
Executive Officer, J. Vincent Mish, our Executive Vice President and Chief
Financial Officer, and Frank Madonia, our Executive Vice President, Secretary
and General Counsel, are all limited partners in Harbourside.  In connection with the formation of
Harbourside, Mr. Miller made loans to the other executive officers, the
proceeds of which the other executive officers then contributed to
Harbourside.  These loans from Mr.
Miller to the other executive officers are secured by pledges of their
respective limited partnership interests to Mr. Miller.

As
partners of Harbourside, each of Messrs. Miller, Badgley, Mish and Madonia
indirectly received shares of common stock in exchange for the subordinated
debt and warrants held by Harbourside. 
As general partner of Harbourside, Mr. Miller has sole voting power over
the shares of common stock that Harbourside received in the exchange.  This transaction was approved by the Special
Committee of the Board, as well as the full Board of Directors with Messrs.
Miller and Badgley abstaining due to their personal interest in the
transaction.  The transaction was
subsequently approved by our shareholders at a meeting on February 12,
2004.  Other than the exchange, we have
not engaged in any transactions with Harbourside.  Neither we nor Harbourside currently intend to engage in any
other transactions in the future except as may be related to Harboursides
continuing ownership of a portion of the subordinated debt.

Senior Credit Facility

Simultaneously
with entering into a forbearance agreement on October 31, 2003 with respect to
our senior credit facility, Mr. Miller made a $2.0 million loan to us as a part
of the senior credit facility.  The loan
to us and Mr. Millers participation in the senior credit facility were
effected by an amendment to the credit agreement and a participation agreement
between Mr. Miller and the senior credit facility lenders.

On
December 24, 2003, Mr. Miller increased his $2.0 million participation in the
existing senior credit facility by an additional $10.0 million.  These funds, along with additional funds
from The CIT Group/Business Credit, Inc., 
were used to satisfy our obligations to two of the existing senior
lenders with the result being that CIT, an existing senior lender, and Mr.
Miller constituted the senior lenders to us, with CIT holding 62.5% of such
loan and Mr. Miller participating in 37.5% of the loan.  Mr. Millers portion of the loan is
subordinated to that of CIT.

In
conjunction with Mr. Millers increased participation, the senior credit
facility was restructured and restated as a $15.0 million revolving facility
and $12.0 million and $5.0 million term loans. 
The senior lending group, consisting of CIT and Mr. Miller, earned
fees of $850,000 in connection with the restructuring, including previously
unpaid fees of $300,000 for the earlier forbearance agreement through December
31, 2003 and $550,000 for the restructuring of the loans described above.  Of these fees, 37.5% ($318,750) were paid to
Mr. Miller and the remainder ($531,250) were paid to CIT.  In addition, we will pay additional interest
at a rate of 1.8% on Mr. Millers portion of the loan, which is in recognition
of the fact that Mr. Millers rights to payments and collateral are subordinate
to those of CIT.  This transaction

37

---

---

was approved by the Special Committee of the Board, as well as the full
Board of Directors with Mr. Miller abstaining due to his personal interest in
the transaction.

ITEM
14.     PRINCIPAL ACCOUNTANT FEES AND SERVICES

Audit Fees

Joseph
  Decosimo and Company, LLP billed aggregate fees of $185,000 for professional
  services rendered for the audit of financial statements for fiscal year 2003
  and the reviews of financial statements included in Forms 10-Q filed during
  fiscal year 2003.  PricewaterhouseCoopers LLP billed aggregate fees of
  $598,906 for professional services rendered for the audit of financial statements
  for fiscal year 2002, the re-audit of the financial statements for the fiscal
  years 2001 and 2000 that were performed during 2003, and the reviews of financial
  statements included in Forms 10-Q filed during fiscal years 2003 and 2002.

Audit-Related Fees

Joseph
  Decosimo and Company, LLP did not perform any, or bill us for, assurance and
  related services related to the performance of the audit and review of financial
  statements for fiscal year 2003.  PricewaterhouseCoopers LLP did not perform
  any, or bill us for, assurance and related services related to the performance
  of the audit and review of financial statements for fiscal years 2003 and 2002.

Taxes Fees

Joseph Decosimo and Company, LLP did not perform any, or bill us for, tax services
  during fiscal year 2003. PricewaterhouseCoopers LLP did not perform any, or
  bill us for, tax services during fiscal years 2003 and 2002.

Other Fees

Joseph
  Decosimo and Company, LLP did not perform any, or bill us for, other services
  during fiscal year 2003.  PricewaterhouseCoopers LLP billed us fees of
  $89,750 for additional services provided to us in fiscal years 2003 and 2002
  related to cash flow modeling and successor auditor work paper reviews.

Approval of Audit and
Non-Audit Services

The
audit committee pre-approves all audit and non-audit services performed by the
Companys independent auditor.  The
audit committee specifically approves the annual audit services
engagement.  Certain non-audit services
that are permitted under the federal securities laws may be approved from time
to time by the audit committee.

38

---

---

PART IV

ITEM
15.     EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND
REPORTS ON FORM 8-K

(a)     The
following documents are filed as part of this Report:

1.            Financial
Statements

|Description                                                                                                                                                                        |  | Page Number
  in Report | 
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ----------------------- | 
|                                                                                                                                                                                   |  |                         | 
|                                                                                                                                                                                   |  |                         | 
|Report of
  Independent Accountants                                                                                                                                                |  | F-2                     | 
|                                                                                                                                                                                   |  |                         | 
|Consolidated
  Balance Sheets as of December 31, 2003 and 2002                                                                                                                     |  | F-4                     | 
|                                                                                                                                                                                   |  |                         | 
|Consolidated
  Statements of Operations for the years ended December 31, 2003 and
  2002, the eight months ended December 31, 2001 and the year ended April 30,
  2001             |  | F-5                     | 
|                                                                                                                                                                                   |  |                         | 
|Consolidated
  Statements of Shareholders Equity for the years ended December 31,
  2003 and 2002, the eight months ended December 31, 2001 and the year ended
  April
  30, 2001 |  | F-6                     | 
|                                                                                                                                                                                   |  |                         | 
|Consolidated
  Statements of Cash Flows for the years ended December 31, 2003
  and 2002, the eight months ended December 31, 2001 and the year ended April
  30, 2001             |  | F-7                     | 
|                                                                                                                                                                                   |  |                         | 
|Notes to
  Consolidated Financial Statements                                                                                                                                       |  | F-8                     | 

2.            Financial
Statement Schedules

The
following Financial Statement Schedule for the Registrant is filed as part of
this Report and should be read in conjunction with the Consolidated Financial
Statements:

|Description                                       |  | Page
  Number in
  Report
|------------------------------------------------- |  | -------------------------
|                                                  |  |                          
|                                                  |  |                          
|Schedule II
  - Valuation and Qualifying Accounts |  | S-1                      

All schedules,
except those set forth above, have been omitted since the information required
is included in the financial statements or notes or have been omitted as not
applicable or not required.

3.            Exhibits

The
following exhibits are required to be filed with this Report by Item 601 of
Regulation S-K:

|    |  | Description                              |  | Incorporated
  by Reference
  to
  Registration
  File Number |  | Form or
  Report |  | Date of Report    |  | Exhibit Number
  in Report | 
|--- |  | ---------------------------------------- |  | ------------------------------------------------------------- |  | ---------------- |  | ----------------- |  | -------------------------- | 
|    |  |                                          |  |                                                               |  |                  |  |                   |  |                            | 
|3.1 |  | Charter, as
  amended, of the Registrant |  | -                                                             |  | 10-K             |  | December 31, 2001 |  | 3.1                        | 

39

---

---

|      |  | Description                                                                                                                                                                                                  |  | Incorporated
  by Reference
  to
  Registration
  File Number |  | Form or
  Report |  | Date of Report |  | Exhibit Number
  in Report | 
|----- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | ------------------------------------------------------------- |  | ---------------- |  | -------------- |  | -------------------------- | 
|      |  |                                                                                                                                                                                                              |  |                                                               |  |                  |  |                |  |                            | 
|      |  |                                                                                                                                                                                                              |  |                                                               |  |                  |  |                |  |                            | 
|3.2   |  | Bylaws of
  the Registrant                                                                                                                                                                                   |  | 33-79430                                                      |  | S-1              |  | August 1994    |  | 3.2                        | 
|      |  |                                                                                                                                                                                                              |  |                                                               |  |                  |  |                |  |                            | 
|10.1  |  | Settlement
  Letter dated April 27, 1994 between Miller Group, Inc. and the Management
  Group                                                                                                               |  | 33-79430                                                      |  | S-1              |  | August 1994    |  | 10.7                       | 
|      |  |                                                                                                                                                                                                              |  |                                                               |  |                  |  |                |  |                            | 
|10.5  |  | Participants
  Agreement dated as of April 30, 1994 between the Registrant, Century
  Holdings, Inc., Century Wrecker Corporation, William G. Miller and certain
  former shareholders of Miller Group, Inc. |  | 33-79430                                                      |  | S-1              |  | August 1994    |  | 10.11                      | 
|      |  |                                                                                                                                                                                                              |  |                                                               |  |                  |  |                |  |                            | 
|10.20 |  | Technology
  Transfer Agreement dated March 21, 1991 between Miller Group, Inc., Verducci,
  Inc. and Jack Verducci                                                                                          |  | 33-79430                                                      |  | S-1              |  | August 1994    |  | 10.26                      | 
|      |  |                                                                                                                                                                                                              |  |                                                               |  |                  |  |                |  |                            | 
|10.21 |  | Form of
  Noncompetition Agreement between the Registrant and certain officers of the
  Registrant                                                                                                           |  | 33-79430                                                      |  | S-1              |  | August 1994    |  | 10.28                      | 
|      |  |                                                                                                                                                                                                              |  |                                                               |  |                  |  |                |  |                            | 
|10.22 |  | Form of
  Nonexclusive Distributor Agreement                                                                                                                                                                 |  | 33-79430                                                      |  | S-1              |  | August 1994    |  | 10.31                      | 
|      |  |                                                                                                                                                                                                              |  |                                                               |  |                  |  |                |  |                            | 
|10.23 |  | Miller
  Industries, Inc. Stock Option and Incentive Plan**                                                                                                                                                  |  | 33-79430                                                      |  | S-1              |  | August 1994    |  | 10.1                       | 
|      |  |                                                                                                                                                                                                              |  |                                                               |  |                  |  |                |  |                            | 
|10.24 |  | Form of
  Incentive Stock Option Agreement**                                                                                                                                                                 |  | 33-79430                                                      |  | S-1              |  | August 1994    |  | 10.2                       | 
|      |  |                                                                                                                                                                                                              |  |                                                               |  |                  |  |                |  |                            | 
|10.25 |  | Miller
  Industries, Inc. Cash Bonus Plan**                                                                                                                                                                  |  | 33-79430                                                      |  | S-1              |  | August 1994    |  | 10.3                       | 
|      |  |                                                                                                                                                                                                              |  |                                                               |  |                  |  |                |  |                            | 
|10.26 |  | Miller
  Industries, Inc. Non-Employee Director Stock Option Plan**                                                                                                                                          |  | 33-79430                                                      |  | S-1              |  | August 1994    |  | 10.4                       | 
|      |  |                                                                                                                                                                                                              |  |                                                               |  |                  |  |                |  |                            | 
|10.27 |  | Form of
  Director Stock Option Agreement**                                                                                                                                                                  |  | 33-79430                                                      |  | S-1              |  | August 1994    |  | 10.5                       | 
|      |  |                                                                                                                                                                                                              |  |                                                               |  |                  |  |                |  |                            | 
|10.28 |  | Employment
  Agreement dated October 14, 1993 between Century Wrecker Corporation and
  Jeffrey I. Badgley**                                                                                                 |  | 33-79430                                                      |  | S-1              |  | August 1994    |  | 10.29                      | 
|      |  |                                                                                                                                                                                                              |  |                                                               |  |                  |  |                |  |                            | 
|10.29 |  | First
  Amendment to Employment Agreement between Century Wrecker Corporation and
  Jeffrey I. Badgley**                                                                                                     |  | 33-79430                                                      |  | S-1              |  | August 1994    |  | 10.33                      | 
|      |  |                                                                                                                                                                                                              |  |                                                               |  |                  |  |                |  |                            | 
|10.30 |  | Form of
  Employment Agreement between Registrant and each of Messrs. Madonia and
  Mish**                                                                                                                   |  | -                                                             |  | Form 10-K        |  | April 30, 1995 |  | 10.37                      | 
|      |  |                                                                                                                                                                                                              |  |                                                               |  |                  |  |                |  |                            | 
|10.31 |  | First
  Amendment to Miller Industries, Inc. Non-Employee Director Stock Option
  Plan**                                                                                                                     |  | -                                                             |  | Form 10-K        |  | April 30, 1995 |  | 10.38                      | 

40

---

---

|      |  | Description                                                                                                                                                                                                                                                     |  | Incorporated
  by Reference
  to
  Registration
  File Number |  | Form or
  Report |  | Date of Report     |  | Exhibit Number
  in Report | 
|----- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------------------------------------------------------- |  | ---------------- |  | ------------------ |  | -------------------------- | 
|      |  |                                                                                                                                                                                                                                                                 |  |                                                               |  |                  |  |                    |  |                            | 
|10.32 |  | Second
  Amendment to Miller Industries, Inc. Non-Employee Director Stock Option
  Plan**                                                                                                                                                                       |  | -                                                             |  | Form 10-K        |  | April 30, 1996     |  | 10.39                      | 
|      |  |                                                                                                                                                                                                                                                                 |  |                                                               |  |                  |  |                    |  |                            | 
|10.33 |  | Second
  Amendment to Miller Industries, Inc. Stock Option and Incentive Plan**                                                                                                                                                                                 |  | -                                                             |  | Form 10-K        |  | April 30, 1996     |  | 10.40                      | 
|      |  |                                                                                                                                                                                                                                                                 |  |                                                               |  |                  |  |                    |  |                            | 
|10.34 |  | Employment
  Agreement dated July 8, 1997 between the Registrant and William G. Miller**                                                                                                                                                                        |  | -                                                             |  | Form 10-Q/A      |  | July 31, 1997      |  | 10                         | 
|      |  |                                                                                                                                                                                                                                                                 |  |                                                               |  |                  |  |                    |  |                            | 
|10.35 |  | Guaranty
  Agreement Among NationsBank of Tennessee, N.A. and certain subsidiaries of
  Registrant dated January 30, 1998.                                                                                                                                      |  | -                                                             |  | Form 10-K        |  | April 30, 1998     |  | 10.37                      | 
|      |  |                                                                                                                                                                                                                                                                 |  |                                                               |  |                  |  |                    |  |                            | 
|10.36 |  | Stock Pledge
  Agreement Between NationsBank of Tennessee, N.A. and the Registrant dated
  January 30, 1998.                                                                                                                                                    |  | -                                                             |  | Form 10-K        |  | April 30, 1998     |  | 10.38                      | 
|      |  |                                                                                                                                                                                                                                                                 |  |                                                               |  |                  |  |                    |  |                            | 
|10.37 |  | Stock Pledge
  Agreement Between NationsBank of Tennessee, N.A. and the certain subsidiaries
  of the Registrant dated January 30, 1998.                                                                                                                        |  | -                                                             |  | Form 10-K        |  | April 30, 1998     |  | 10.39                      | 
|      |  |                                                                                                                                                                                                                                                                 |  |                                                               |  |                  |  |                    |  |                            | 
|10.40 |  | Form of
  Indemnification Agreement dated June 8, 1998 by and between the Registrant
  and each of William G. Miller, Jeffrey I. Badgley, A. Russell Chandler, Paul
  E. Drack, Frank Madonia, J. Vincent Mish, Richard H. Roberts, and Daniel N.
  Sebastian** |  | -                                                             |  | Form 10-Q        |  | September 14, 1998 |  | 10                         | 
|      |  |                                                                                                                                                                                                                                                                 |  |                                                               |  |                  |  |                    |  |                            | 
|10.41 |  | Employment
  Agreement between the Registrant and Jeffrey I. Badgley, dated September 11,
  1998**                                                                                                                                                              |  | -                                                             |  | Form 10-Q        |  | December 15, 1998  |  | 10.1                       | 
|      |  |                                                                                                                                                                                                                                                                 |  |                                                               |  |                  |  |                    |  |                            | 
|10.42 |  | Employment
  Agreement between the Registrant and Frank Madonia, dated September 11,
  1998**                                                                                                                                                                   |  | -                                                             |  | Form 10-Q        |  | December 15, 1998  |  | 10.3                       | 
|      |  |                                                                                                                                                                                                                                                                 |  |                                                               |  |                  |  |                    |  |                            | 
|10.50 |  | Agreement
  between the Registrant and Jeffrey I. Badgley, dated September 11, 1998**                                                                                                                                                                           |  | -                                                             |  | Form 10-Q        |  | December 15, 1998  |  | 10.4                       | 
|      |  |                                                                                                                                                                                                                                                                 |  |                                                               |  |                  |  |                    |  |                            | 
|10.51 |  | Agreement
  between the Registrant and Frank Madonia, dated September 11, 1998**                                                                                                                                                                                |  | -                                                             |  | Form 10-Q        |  | December 15, 1998  |  | 10.6                       | 
|      |  |                                                                                                                                                                                                                                                                 |  |                                                               |  |                  |  |                    |  |                            | 
|10.60 |  | Credit
  Agreement among Bank of America, N.A., The CIT Group/Business Credit, Inc.
  and Registrant and its subsidiaries dated July 23, 2001                                                                                                                   |  | -                                                             |  | Form 10-K        |  | April 30, 2001     |  | 10.6                       | 

41

---

---

|      |  | Description                                                                                                                                                                                                     |  | Incorporated
  by Reference
  to
  Registration
  File Number |  | Form or
  Report |  | Date of Report    |  | Exhibit Number
  in Report | 
|----- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------------------------------------------------------- |  | ---------------- |  | ----------------- |  | -------------------------- | 
|      |  |                                                                                                                                                                                                                 |  |                                                               |  |                  |  |                   |  |                            | 
|10.61 |  | Security
  Agreement among the Registrant and its subsidiaries, The CIT Group/Business
  Credit, Inc. and Bank of America, N.A. dated July 23, 2001                                                             |  | -                                                             |  | Form 10-K        |  | April 30, 2001    |  | 10.61                      | 
|      |  |                                                                                                                                                                                                                 |  |                                                               |  |                  |  |                   |  |                            | 
|10.62 |  | Stock Pledge
  Agreement between Registrant and The CIT Group/Business Credit, Inc. dated
  July 23, 2001                                                                                                       |  | -                                                             |  | Form 10-K        |  | April 30, 2001    |  | 10.62                      | 
|      |  |                                                                                                                                                                                                                 |  |                                                               |  |                  |  |                   |  |                            | 
|10.70 |  | Amended and
  Restated Credit Agreement among the Registrant, its subsidiary and Bank of
  America, N.A. dated July 23, 2001                                                                                    |  | -                                                             |  | Form 10-K        |  | April 30, 2001    |  | 10.7                       | 
|      |  |                                                                                                                                                                                                                 |  |                                                               |  |                  |  |                   |  |                            | 
|10.71 |  | Promissory
  Note among Registrant, its subsidiary and SunTrust Bank dated July 23, 2001                                                                                                                        |  | -                                                             |  | Form 10-K        |  | April 30, 2001    |  | 10.71                      | 
|      |  |                                                                                                                                                                                                                 |  |                                                               |  |                  |  |                   |  |                            | 
|10.72 |  | Promissory
  Note among Registrant, its subsidiary and AmSouth Bank dated July 23, 2001                                                                                                                         |  | -                                                             |  | Form 10-K        |  | April 30, 2001    |  | 10.72                      | 
|      |  |                                                                                                                                                                                                                 |  |                                                               |  |                  |  |                   |  |                            | 
|10.73 |  | Promissory
  Note among Registrant, its subsidiary and Wachovia Bank, N.A. dated July 23,
  2001                                                                                                                |  | -                                                             |  | Form 10-K        |  | April 30, 2001    |  | 10.73                      | 
|      |  |                                                                                                                                                                                                                 |  |                                                               |  |                  |  |                   |  |                            | 
|10.74 |  | Promissory
  Note among Registrant, its subsidiary and Bank of America, N.A. dated July
  23, 2001                                                                                                              |  | -                                                             |  | Form 10-K        |  | April 30, 2001    |  | 10.74                      | 
|      |  |                                                                                                                                                                                                                 |  |                                                               |  |                  |  |                   |  |                            | 
|10.75 |  | Warrant
  Agreement dated July 23, 2001                                                                                                                                                                         |  | -                                                             |  | Form 10-K        |  | April 30, 2001    |  | 10.75                      | 
|      |  |                                                                                                                                                                                                                 |  |                                                               |  |                  |  |                   |  |                            | 
|10.80 |  | Forbearance
  Agreement and First Amendment to the Credit Agreement by and among the
  Company and its subsidiaries and The CIT Group/Business Credit, Inc. and Bank
  of America, N.A. dated February 28, 2002 |  | -                                                             |  | Form 10-K        |  | December 31, 2001 |  | 10.8                       | 
|      |  |                                                                                                                                                                                                                 |  |                                                               |  |                  |  |                   |  |                            | 
|10.81 |  | Second
  Amendment to the Credit Agreement by and among the Company and its
  subsidiaries and The CIT Group/Business Credit, Inc. and Bank of America,
  N.A. dated February 28, 2002                          |  |                                                              |  | Form 10-K        |  | December 31, 2001 |  | 10.81                      | 
|      |  |                                                                                                                                                                                                                 |  |                                                               |  |                  |  |                   |  |                            | 
|10.82 |  | First
  Amendment to the Amended and Restated Credit Agreement among the Registrant,
  its subsidiary and Bank of America, N.A. dated July 23, 2001                                                             |  |                                                              |  | Form 10-K        |  | December 31, 2001 |  | 10.82                      | 

42

---

---

|      |  | Description                                                                                                                                                                                  |  | Incorporated
  by Reference
  to
  Registration
  File Number |  | Form or
  Report |  | Date of Report     |  | Exhibit Number
  in Report | 
|----- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------------------------------------------------------- |  | ---------------- |  | ------------------ |  | -------------------------- | 
|      |  |                                                                                                                                                                                              |  |                                                               |  |                  |  |                    |  |                            | 
|10.83 |  | Amended and
  Restated Intercreditor and Subordination Agreement by and among The CIT
  Group/Business Credit, Inc. and Bank of America, N.A.                                                |  |                                                              |  | Form 10-K        |  | December 31, 2001  |  | 10.83                      | 
|      |  |                                                                                                                                                                                              |  |                                                               |  |                  |  |                    |  |                            | 
|10.84 |  | Third
  Amendment to the Credit Agreement by and among the Company and its
  Subsidiaries and the CIT Group/Business Credit, Inc. and Bank of America,
  N.A. dated September 13, 2002.      |  |                                                              |  | Form 10-K        |  | December 31, 2002  |  | 10.84                      | 
|      |  |                                                                                                                                                                                              |  |                                                               |  |                  |  |                    |  |                            | 
|10.85 |  | Fourth
  Amendment to the Credit Agreement by and among the Company and its
  Subsidiaries and the CIT Group/Business Credit, Inc. and Bank of America,
  N.A. dated November 14, 2002.      |  |                                                              |  | Form 10-Q/A      |  | September 30, 2002 |  | 10.1                       | 
|      |  |                                                                                                                                                                                              |  |                                                               |  |                  |  |                    |  |                            | 
|10.86 |  | Fifth
  Amendment to the Credit Agreement by and among the Company and its
  Subsidiaries and the CIT Group/Business Credit, Inc. and Bank of America,
  N.A. dated February 28, 2003.       |  |                                                              |  | Form 10-K        |  | December 31, 2002  |  | 10.86                      | 
|      |  |                                                                                                                                                                                              |  |                                                               |  |                  |  |                    |  |                            | 
|10.87 |  | Sixth Amendment
  to the Credit Agreement by and among the Company and its Subsidiaries and the
  CIT Group/Business Credit, Inc. and Bank of America, N.A. dated April 1,
  2003.           |  |                                                              |  | Form 10-K        |  | December 31, 2002  |  | 10.87                      | 
|      |  |                                                                                                                                                                                              |  |                                                               |  |                  |  |                    |  |                            | 
|10.88 |  | Seventh
  Amendment to Credit Agreement entered into by and among the Company and its
  Subsidiaries and CIT Group/Business Credit, Inc., and Bank of America, N.A.
  dated October 31, 2003 |  | -                                                             |  | Form 10-Q        |  | September 30, 2003 |  | 10.1                       | 
|      |  |                                                                                                                                                                                              |  |                                                               |  |                  |  |                    |  |                            | 
|10.89 |  | Forbearance
  Agreement by and among the Company and its Subsidiaries and CIT
  Group/Business Credit, Inc. and Bank of American, N.A. dated October 31,
  2003.                             |  | -                                                             |  | Form 10-Q        |  | September 30, 2003 |  | 10.2                       | 
|      |  |                                                                                                                                                                                              |  |                                                               |  |                  |  |                    |  |                            | 
|10.90 |  | Participation
  Agreement by and among the Company and its Subsidiaries, CIT Group/Business
  Credit and Bank of America, N.A. and William G. Miller dated October 31,
  2003.               |  | -                                                             |  | Form 10-Q        |  | September 30, 2003 |  | 10.3                       | 
|      |  |                                                                                                                                                                                              |  |                                                               |  |                  |  |                    |  |                            | 
|10.91 |  | Eighth
  Amendment to the Credit Agreement by and among the Registrant, CIT Group,
  Inc. and Bank of America, N.A., dated December 24, 2003                                                 |  | -                                                             |  | Form 8-K         |  | January 20, 2004   |  | 10.1                       | 

43

---

---

|      |  | Description                                                                                                                                                                                                        |  | Incorporated
  by Reference
  to
  Registration
  File Number |  | Form or
  Report |  | Date of Report   |  | Exhibit Number
  in Report | 
|----- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | ------------------------------------------------------------- |  | ---------------- |  | ---------------- |  | -------------------------- | 
|      |  |                                                                                                                                                                                                                    |  |                                                               |  |                  |  |                  |  |                            | 
|10.92 |  | Ninth
  Amendment to the Credit Agreement by and between the Registrant and CIT
  Group, Inc., dated December 24, 2003                                                                                             |  | -                                                             |  | Form 8-K         |  | January 20, 2004 |  | 10.2                       | 
|      |  |                                                                                                                                                                                                                    |  |                                                               |  |                  |  |                  |  |                            | 
|10.93 |  | Modification
  of First Amendment to the Amended and Restated Intercreditor and
  Subordination Agreement by and among CIT Group, Inc., Bank of America, N.A.,
  and Contrarian Funds, LLC dated December 24, 2003 |  | -                                                             |  | Form 8-K         |  | January 20, 2004 |  | 10.3                       | 
|      |  |                                                                                                                                                                                                                    |  |                                                               |  |                  |  |                  |  |                            | 
|10.94 |  | Second
  Amendment to the Amended and Restated Intercreditor and Subordination
  Agreement by and between CIT Group, Inc. and Contrarian Funds, LLC, dated
  December 24, 2003                                     |  | -                                                             |  | Form 8-K         |  | January 20, 2004 |  | 10.4                       | 
|      |  |                                                                                                                                                                                                                    |  |                                                               |  |                  |  |                  |  |                            | 
|10.95 |  | Amended and
  Restated Participation Agreement by and among the Registrant, CIT and William
  G. Miller, dated December 24, 2003                                                                                   |  | -                                                             |  | Form 8-K         |  | January 20, 2004 |  | 10.5                       | 
|      |  |                                                                                                                                                                                                                    |  |                                                               |  |                  |  |                  |  |                            | 
|10.96 |  | Amendment
  No. 3 to Amended and Restated Credit Agreement by and among the Registrant,
  Contrarian Funds, LLC and Harbourside Investments, LLLP, dated as of January
  14, 2004                                  |  | -                                                             |  | Form 8-K         |  | January 20, 2004 |  | 10.6                       | 
|      |  |                                                                                                                                                                                                                    |  |                                                               |  |                  |  |                  |  |                            | 
|10.97 |  | Exchange
  Agreement by and between the Registrant and Contrarian Funds, LLC, dated as
  of January 14, 2004                                                                                                       |  | -                                                             |  | Form 8-K         |  | January 20, 2004 |  | 10.7                       | 
|      |  |                                                                                                                                                                                                                    |  |                                                               |  |                  |  |                  |  |                            | 
|10.98 |  | Exchange
  Agreement by and between the Registrant and Harbourside Investments, LLLP,
  dated as of January 14, 2004                                                                                               |  | -                                                             |  | Form 8-K         |  | January 20, 2004 |  | 10.8                       | 
|      |  |                                                                                                                                                                                                                    |  |                                                               |  |                  |  |                  |  |                            | 
|10.99 |  | Registration
  Rights Agreement by and among the Registrant, Harbourside Investments, LLLP
  and Contrarian Funds, LLC, dated January 20, 2004                                                                     |  | -                                                             |  | Form 8-K         |  | January 20, 2004 |  | 10.9                       | 
|      |  |                                                                                                                                                                                                                    |  |                                                               |  |                  |  |                  |  |                            | 
|21    |  | Subsidiaries
  of the Registrant*                                                                                                                                                                                  |  |                                                               |  |                  |  |                  |  |                            | 
|      |  |                                                                                                                                                                                                                    |  |                                                               |  |                  |  |                  |  |                            | 
|23.1  |  | Consent of
  Joseph Decosimo and Company, LLP*                                                                                                                                                                     |  |                                                               |  |                  |  |                  |  |                            | 
|      |  |                                                                                                                                                                                                                    |  |                                                               |  |                  |  |                  |  |                            | 
|23.2  |  | Consent of
  PricewaterhouseCoopers LLP*                                                                                                                                                                           |  |                                                               |  |                  |  |                  |  |                            | 
|      |  |                                                                                                                                                                                                                    |  |                                                               |  |                  |  |                  |  |                            | 
|24    |  | Power of
  Attorney (see signature page)*                                                                                                                                                                          |  |                                                               |  |                  |  |                  |  |                            | 

44

---

---

|     |  | Description                                                                                                                                                                                                                    |  | Incorporated
  by Reference
  to
  Registration
  File Number |  | Form or
  Report |  | Date of Report |  | Exhibit Number
  in Report | 
|---- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | ------------------------------------------------------------- |  | ---------------- |  | -------------- |  | -------------------------- | 
|     |  |                                                                                                                                                                                                                                |  |                                                               |  |                  |  |                |  |                            | 
|31.1 |  | Certification
  Pursuant to Section 1350 of Chapter 63 of Title 18 of United States Code by
  Chief Financial Officer with respect to the Companys Annual Report on Form
  10-K for the fiscal year ended December 31, 2003.* |  |                                                               |  |                  |  |                |  |                            | 
|     |  |                                                                                                                                                                                                                                |  |                                                               |  |                  |  |                |  |                            | 
|31.2 |  | Certification
  of Chief Financial Officer with respect to the Companys Annual Report on
  Form 10-K for the fiscal year ended December 31, 2003.*                                                                            |  |                                                               |  |                  |  |                |  |                            | 
|     |  |                                                                                                                                                                                                                                |  |                                                               |  |                  |  |                |  |                            | 
|32.1 |  | Certification
  Pursuant to Section 1350 of Chapter 63 of Title 18 of United States Code by
  Chief Executive Officer with respect to the Companys Annual Report on Form
  10-K for the fiscal year ended December 31, 2003.* |  |                                                               |  |                  |  |                |  |                            | 
|     |  |                                                                                                                                                                                                                                |  |                                                               |  |                  |  |                |  |                            | 
|32.2 |  | Certification
  Pursuant to Section 1350 of Chapter 63 of Title 18 of United States Code by
  Chief Financial Officer with respect to the Companys Annual Report on Form
  10-K for the fiscal year ended December 31, 2003.* |  |                                                               |  |                  |  |                |  |                            | 

|*  | Filed
  herewith.                                         
|-- | ----------------------------------------------------------
|** | Management
  contract or compensatory plan or arrangement.

(b)Reports
on Form 8-K.

The
following reports on Form 8-K were filed or furnished by the Company during the
fourth quarter of the fiscal year covered by this Report:

|Date Filed or
  Furnished |  | Items Reported                                                                                            |  | Financial Statements Filed
|------------------------- |  | --------------------------------------------------------------------------------------------------------- |  | --------------------------
|                          |  |                                                                                                           |  |                           
|October 3,
  2003         |  | Item 4 
  Changes in Registrants Certifying Accountant and Item 7  Financial
  Statements and Exhibits |  | None                      

(c)The
Registrant hereby files as exhibits to this Report the exhibits set forth in
Item 14(a)3 hereof.

(d)The
Registrant hereby files as financial statement schedules to this Report the
financial statement schedules set forth in Item 14(a)2 hereof.

45

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---

LOGO

INDEX TO FINANCIAL STATEMENTS

|REPORT OF INDEPENDENT ACCOUNTANTS                                                                                                                                      | F-2
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ---
|                                                                                                                                                                       |    
|CONSOLIDATED BALANCE SHEETS AS OF
  DECEMBER 31, 2003 AND 2002                                                                                                         | F-4
|                                                                                                                                                                       |    
|CONSOLIDATED STATEMENTS OF
  OPERATIONS  FOR THE YEARS ENDED
  DECEMBER 31, 2003, 2002, EIGHT MONTHS ENDED DECEMBER 31, 2001 AND YEAR ENDED
  APRIL 30, 2001           | F-5
|                                                                                                                                                                       |    
|CONSOLIDATED STATEMENTS OF
  SHAREHOLDERS EQUITY  FOR THE YEARS
  ENDED DECEMBER 31, 2003, 2002, EIGHT MONTHS ENDED DECEMBER 31, 2001 AND YEAR
  ENDED APRIL 30, 2001 | F-6
|                                                                                                                                                                       |    
|CONSOLIDATED STATEMENTS OF CASH
  FLOWS  FOR THE YEARS ENDED DECEMBER
  31, 2003, 2002, EIGHT MONTHS ENDED DECEMBER 31, 2001 AND YEAR ENDED APRIL 30,
  2001           | F-7
|                                                                                                                                                                       |    
|NOTES TO CONSOLIDATED FINANCIAL
  STATEMENTS                                                                                                                           | F-8
|                                                                                                                                                                       |    
|SCHEDULE II VALUATION AND
  QUALIFYING ACCOUNTS                                                                                                                       | S-1

---

---

REPORT OF INDEPENDENT ACCOUNTANTS

Board
of Directors and Stockholders
Miller Industries, Inc.
Ooltewah, Tennessee

We
have audited the accompanying consolidated balance sheet of Miller Industries,
Inc. and subsidiaries as of December 31, 2003, and the related consolidated
statements of operations, shareholders equity and cash flows for the year then
ended. These consolidated financial statements and the financial statement
schedule are the responsibility of the companys management. Our responsibility
is to express an opinion on the 2003 consolidated financial statements and
financial statement schedule based on our audit.

We
conducted our audit in accordance with auditing standards generally accepted in
the United States of America. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the consolidated
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the consolidated financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We believe
that our audit provides a reasonable basis for our opinion.

In
our opinion, the 2003 consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Miller Industries,
Inc. and subsidiaries as of December 31, 2003, and the results of their
operations and their cash flows for the year then ended in conformity with
accounting principles generally accepted in the United States of America.  Also, in our opinion, the 2003 financial
statement schedule when considered in relation to the 2003 basic consolidated
financial statements taken as a whole, presents fairly, in all material
respects, the information set forth therein.

/s/
Joseph Decosimo and Company, LLP

Chattanooga,
TN
March 15, 2004

F-2

---

---

REPORT
OF INDEPENDENT ACCOUNTANTS

To the Shareholders and
the
Board of Directors of Miller Industries, Inc.:

In our opinion, the
consolidated financial statements listed in the accompanying index present
fairly, in all material respects, the financial position of Miller Industries,
Inc. and its subsidiaries at December 31, 2002, and the results of their
operations and their cash flows for the year ended December 31, 2002, the eight
month period ended December 31, 2001 and the year ended April 30, 2001, in
conformity with accounting principles generally accepted in the United States
of America. In addition, in our opinion, the financial statement schedule listed
in the accompanying index, presents fairly, in all material respects, the
information set forth therein when read in conjunction with the related
consolidated financial statements.
These financial statements and financial statement schedule are the responsibility
of the Companys management; our responsibility is to express an opinion on
these financial statements and financial statement schedule based on our
audits. We conducted our audits of these statements in accordance with auditing
standards generally accepted in the United States of America, which require
that we plan and perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, assessing the accounting principles used and
significant estimates made by management, and evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

The accompanying
financial statements have been prepared assuming that the Company will continue
as a going concern.  As discussed in
Notes 2 and 8 to the consolidated financial statements, subsequent to December
31, 2002, the Company was in default of certain covenants under its senior and
subordinated credit facility agreements, and its subordinated credit facility
matures on July 23, 2003.  The senior
and subordinated credit facility agreements contain certain cross-default
provisions and provide for the acceleration of amounts due as well as other
remedies in the event of default.  These
circumstances raise substantial doubt about the Companys ability to continue
as a going concern.  Managements
actions and plans in regard to these matters are also described in Note 2.  The consolidated financial statements do not
include any adjustments that might result from the outcome of this uncertainty.

As discussed in Note 7 to
the financial statements, the Company changed its method of assessing
impairment of intangible assets in 2002.

/s/PricewaterhouseCoopers
LLP

Atlanta, Georgia
April 11, 2003, except as to Notes 2 and 8 for which the date is May 1, 2003
and except as to Note 3 for which the date is March 18, 2004

F-3

---

---

MILLER INDUSTRIES, INC. AND SUBSIDIARIES

CONSOLIDATED
BALANCE SHEETS
DECEMBER 31, 2003 AND 2002

(In
thousands, except share data)

|                                                                                                                                                         |  | December 31,
  2003 |          | December 31,
  2002 |  
|-------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------------- | -------- | ------------------- | -
|                                                                                                                                                         |  |                     |          |                     |  
|ASSETS                                                                                                                                                   |  |                     |          |                     |  
|CURRENT ASSETS:                                                                                                                                          |  |                     |          |                     |  
|Cash and temporary
  investments                                                                                                                         |  | $                   | 5,240    |                     | $
|Accounts receivable, net of
  allowance for doubtful accounts of $1,062 and
      $805, at December 31, 2003 and 2002 respectively                       |  |                     | 37,990   |                     |  
|Inventories, net                                                                                                                                         |  |                     | 26,715   |                     |  
|Prepaid expenses and other                                                                                                                               |  |                     | 1,783    |                     |  
|Current assets of
  discontinued operations held for sale                                                                                                |  |                     | 23,757   |                     |  
|                                                                                                                                                         |  |                     |          |                     |  
|Total
  current assets                                                                                                                                   |  |                     | 95,485   |                     |  
|PROPERTY, PLANT, AND EQUIPMENT,net                                                                                                                       |  |                     | 20,977   |                     |  
|GOODWILL,net                                                                                                                                             |  |                     | 11,619   |                     |  
|PATENTS, TRADEMARKS, AND OTHER
  PURCHASED
  PRODUCT RIGHTS, NET                                                                                         |  |                     | 392      |                     |  
|OTHER ASSETS                                                                                                                                             |  |                     | 1,391    |                     |  
|NONCURRENT ASSETS OF DISCONTINUED    OPERATIONS
  HELD FOR SALE                                                                                          |  |                     | 1,954    |                     |  
|                                                                                                                                                         |  |                     |          |                     |  
|                                                                                                                                                         |  | $                   | 131,818  |                     | $
|                                                                                                                                                         |  |                     |          |                     |  
|                                                                                                                                                         |  |                     |          |                     |  
|LIABILITIES AND SHAREHOLDERS EQUITY                                                                                                                     |  |                     |          |                     |  
|                                                                                                                                                         |  |                     |          |                     |  
|CURRENT LIABILITIES:                                                                                                                                     |  |                     |          |                     |  
|Current portion of long-term
  obligations                                                                                                               |  | $                   | 2,050    |                     | $
|Accounts payable                                                                                                                                         |  |                     | 34,164   |                     |  
|Accrued liabilities and
  other                                                                                                                          |  |                     | 4,371    |                     |  
|Current liabilities of
  discontinued operations held for sale                                                                                           |  |                     | 23,764   |                     |  
|                                                                                                                                                         |  |                     |          |                     |  
|                                                                                                                                                         |  |                     |          |                     |  
|Total
  current liabilities                                                                                                                              |  |                     | 64,349   |                     |  
|                                                                                                                                                         |  |                     |          |                     |  
|                                                                                                                                                         |  |                     |          |                     |  
|LONG-TERM OBLIGATIONS,
  less current portion                                                                                                            |  |                     | 29,927   |                     |  
|                                                                                                                                                         |  |                     |          |                     |  
|NONCURRENT LIABILITIES OF
  DISCONTINUED    OPERATIONS
  HELD FOR SALE                                                                                   |  |                     | 9,545    |                     |  
|                                                                                                                                                         |  |                     |          |                     |  
|COMMITMENTS AND CONTINGENCIES(Notes
  8, 10 and 12)                                                                                                      |  |                     |          |                     |  
|                                                                                                                                                         |  |                     |          |                     |  
|SHAREHOLDERS EQUITY:                                                                                                                                    |  |                     |          |                     |  
|Preferred stock, $.01 par
  value; 5,000,000 shares authorized,
          none issued or outstanding                                                     |  |                     | 0        |                     |  
|                                                                                                                                                         |  |                     |          |                     |  
|Common stock, $.01 par value; 100,000,000 shares authorized, 9,342,151
  and        9,341,436, outstanding at December 31, 2003
  and 2002, respectively |  |                     | 93       |                     |  
|Additional paid-in capital                                                                                                                               |  |                     | 145,090  |                     |  
|Accumulated deficit                                                                                                                                      |  |                     | (117,943 | )                   |  
|Accumulated other
  comprehensive income (loss)                                                                                                          |  |                     | 757      |                     |  
|                                                                                                                                                         |  |                     |          |                     |  
|Total
  shareholders equity                                                                                                                             |  |                     | 27,997   |                     |  
|                                                                                                                                                         |  |                     |          |                     |  
|                                                                                                                                                         |  | $                   | 131,818  |                     | $
|                                                                                                                                                         |  |                     |          |                     |  

The accompanying
notes are an integral part of these consolidated balance sheets.

F-4

---

---

MILLER INDUSTRIES, INC. AND SUBSIDIARIES

CONSOLIDATED
STATEMENTS OF OPERATIONS

FOR
THE YEARS ENDED DECEMBER 31, 2003, 2002, EIGHT MONTHS ENDED
DECEMBER 31, 2001 AND YEAR ENDED APRIL 30, 2001

(IN
THOUSANDS, EXCEPT PER SHARE DATA)

|                                                                          |  | December 31,
  2003 |         | December 31,
  2002 |   | December 31,
  2001 |   | April 30,
  2001 |        
|------------------------------------------------------------------------- |  | ------------------- | ------- | ------------------- | - | ------------------- | - | ---------------- | -------
|                                                                          |  |                     |         |                     |   |                     |   |                  |        
|                                                                          |  |                     |         |                     |   |                     |   |                  |        
|NET SALES                                                                 |  |                     |         |                     |   |                     |   |                  |        
|Towing
  and recovery equipment                                           |  | $                   | 192,043 |                     | $ | 203,059             |   | $                | 142,445
|Towing
  services                                                         |  |                     | 13,953  |                     |   | 28,444              |   |                  | 19,892 
|                                                                          |  |                     |         |                     |   |                     |   |                  |        
|                                                                          |  |                     | 205,996 |                     |   | 231,503             |   |                  | 162,337
|                                                                          |  |                     |         |                     |   |                     |   |                  |        
|COSTS AND
  EXPENSES                                                      |  |                     |         |                     |   |                     |   |                  |        
|Costs of
  operations                                                     |  |                     |         |                     |   |                     |   |                  |        
|Towing
  and recovery equipment                                           |  |                     | 168,390 |                     |   | 174,516             |   |                  | 122,753
|Towing
  services                                                         |  |                     | 10,618  |                     |   | 22,539              |   |                  | 15,250 
|                                                                          |  |                     |         |                     |   |                     |   |                  |        
|                                                                          |  |                     | 179,008 |                     |   | 197,055             |   |                  | 138,003
|                                                                          |  |                     |         |                     |   |                     |   |                  |        
|Selling,
  general, and administrative expenses                           |  |                     | 17,411  |                     |   | 19,540              |   |                  | 14,353 
|Loss
  on sale of business and special charges                            |  |                     | 682     |                     |   | -                   |   |                  | 6,376  
|Interest
  expense, net                                                   |  |                     | 5,609   |                     |   | 4,617               |   |                  | 1,055  
|                                                                          |  |                     |         |                     |   |                     |   |                  |        
|                                                                          |  |                     |         |                     |   |                     |   |                  |        
|Total costs and
  expenses                                                |  |                     | 202,710 |                     |   | 221,212             |   |                  | 159,787
|                                                                          |  |                     |         |                     |   |                     |   |                  |        
|INCOME
  FROM CONTINUING OPERATIONS BEFORE INCOMETAXES                    |  |                     | 3,286   |                     |   | 10,291              |   |                  | 2,550  
|INCOME TAX
  PROVISION                                                    |  |                     | 1,216   |                     |   | 7,208               |   |                  | 2,522  
|                                                                          |  |                     |         |                     |   |                     |   |                  |        
|                                                                          |  |                     |         |                     |   |                     |   |                  |        
|INCOME
  FROM CONTINUING OPERATIONS                                       |  |                     | 2,070   |                     |   | 3,083               |   |                  | 28     
|                                                                          |  |                     |         |                     |   |                     |   |                  |        
|DISCONTINUED
  OPERATIONS                                                 |  |                     |         |                     |   |                     |   |                  |        
|Loss
  from discontinued operations, before taxes                         |  |                     | (17,260 | )                   |   | (29,697             | ) |                  | (22,296
|Income
  tax benefit                                                      |  |                     | (1,037  | )                   |   | (2,732              | ) |                  | (681   
|                                                                          |  |                     |         |                     |   |                     |   |                  |        
|Loss
  from discontinued operations, net of taxes                         |  |                     | (16,223 | )                   |   | (26,965             | ) |                  | (21,615
|                                                                          |  |                     |         |                     |   |                     |   |                  |        
|                                                                          |  |                     |         |                     |   |                     |   |                  |        
|NET LOSS
  BEFORE CUMULATIVE EFFECT OF
    CHANGE IN ACCOUNTING PRINCIPLE |  |                     | (14,153 | )                   |   | (23,882             | ) |                  | (21,587
|                                                                          |  |                     |         |                     |   |                     |   |                  |        
|Cumulative
  effect of change in accounting principle                     |  |                     | -       |                     |   | (21,812             | ) |                  | -      
|                                                                          |  |                     |         |                     |   |                     |   |                  |        
|                                                                          |  |                     |         |                     |   |                     |   |                  |        
|NET LOSS                                                                  |  | $                   | (14,153 | )                   | $ | (45,694             | ) | $                | (21,587
|                                                                          |  |                     |         |                     |   |                     |   |                  |        
|                                                                          |  |                     |         |                     |   |                     |   |                  |        
|BASIC LOSS
  PER COMMON SHARE:                                            |  |                     |         |                     |   |                     |   |                  |        
|Income
  (loss)from continuing operations                                 |  | $                   | 0.22    |                     | $ | 0.34                |   | $                | 0.00   
|Loss
  from discontinued operations                                       |  |                     | (1.74   | )                   |   | (2.89               | ) |                  | (2.31  
|Cumulative
  effect of change in accounting principle                     |  |                     | -       |                     |   | (2.34               | ) |                  | -      
|                                                                          |  |                     |         |                     |   |                     |   |                  |        
|Basic
  loss                                                              |  | $                   | (1.52   | )                   | $ | (4.89               | ) | $                | (2.31  
|                                                                          |  |                     |         |                     |   |                     |   |                  |        
|                                                                          |  |                     |         |                     |   |                     |   |                  |        
|DILUTED
  LOSS PER COMMON SHARE:                                          |  |                     |         |                     |   |                     |   |                  |        
|Income
  (loss)from continuing operations                                 |  | $                   | 0.22    |                     | $ | 0.34                |   | $                | 0.00   
|Loss
  from discontinued operations                                       |  |                     | (1.74   | )                   |   | (2.89               | ) |                  | (2.31  
|Cumulative
  effect of change in accounting
          principle           |  |                     | -       |                     |   | (2.34               | ) |                  | -      
|                                                                          |  |                     |         |                     |   |                     |   |                  |        
|Diluted
  loss                                                            |  | $                   | (1.52   | )                   | $ | (4.89               | ) | $                | (2.31  
|                                                                          |  |                     |         |                     |   |                     |   |                  |        
|                                                                          |  |                     |         |                     |   |                     |   |                  |        
|WEIGHTED
  AVERAGE SHARES OUTSTANDING:                                    |  |                     |         |                     |   |                     |   |                  |        
|Basic                                                                     |  |                     | 9,342   |                     |   | 9,341               |   |                  | 9,341  
|                                                                          |  |                     |         |                     |   |                     |   |                  |        
|Diluted                                                                   |  |                     | 9,385   |                     |   | 9,348               |   |                  | 9,345  
|                                                                          |  |                     |         |                     |   |                     |   |                  |        

The accompanying
notes are an integral part of these consolidated statements.

F-5

---

---

MILLER INDUSTRIES, INC. AND SUBSIDIARIES

CONSOLIDATED
STATEMENTS OF SHAREHOLDERS EQUITY

FOR
THE YEARS ENDED DECEMBER 31, 2003, 2002, EIGHT MONTHS ENDED
DECEMBER 31, 2001 AND YEAR ENDED APRIL 30, 2001

(IN
THOUSANDS)

|                                                         |  | Common
  Stock |   | Additional
  Paid-In Capital |  | Accumulated
  Deficit |  | Accumulated
  Other
  Comprehensive
  Income (Loss) |         | Total | 
|-------------------------------------------------------- |  | -------------- | - | ---------------------------- |  | --------------------- |  | --------------------------------------------------- | ------- | ----- | 
|                                                         |  |                |   |                              |  |                       |  |                                                     |         |       | 
|BALANCE,
  April 30, 2000                                |  |                | $ | 93                           |  |                       |  | $                                                   | 145,081 |       | 
|                                                         |  |                |   |                              |  |                       |  |                                                     |         |       | 
|Net
  loss                                               |  |                |   | 0                            |  |                       |  |                                                     | 0       |       | 
|Other
  comprehensive, net of tax:                       |  |                |   |                              |  |                       |  |                                                     |         |       | 
|Foreign
  currency translation
              adjustments |  |                |   | 0                            |  |                       |  |                                                     | 0       |       | 
|                                                         |  |                |   |                              |  |                       |  |                                                     |         |       | 
|Comprehensive
  loss                                     |  |                |   | 0                            |  |                       |  |                                                     | 0       |       | 
|Exercise
  of stock options                              |  |                |   | 0                            |  |                       |  |                                                     | 7       |       | 
|                                                         |  |                |   |                              |  |                       |  |                                                     |         |       | 
|BALANCE,
  April 30, 2001                                |  |                |   | 93                           |  |                       |  |                                                     | 145,088 |       | 
|Net
  loss                                               |  |                |   | 0                            |  |                       |  |                                                     | 0       |       | 
|Other
  comprehensive, net of tax:                       |  |                |   |                              |  |                       |  |                                                     |         |       | 
|Foreign
  currency translation
              adjustments |  |                |   | 0                            |  |                       |  |                                                     | 0       |       | 
|Unrealized
  loss on financial
              instruments |  |                |   | 0                            |  |                       |  |                                                     | 0       |       | 
|                                                         |  |                |   |                              |  |                       |  |                                                     |         |       | 
|Comprehensive
  loss                                     |  |                |   | 0                            |  |                       |  |                                                     | 0       |       | 
|                                                         |  |                |   |                              |  |                       |  |                                                     |         |       | 
|BALANCE,
  December 31, 2001                             |  |                |   | 93                           |  |                       |  |                                                     | 145,088 |       | 
|Net
  loss                                               |  |                |   | 0                            |  |                       |  |                                                     | 0       |       | 
|Other
  comprehensive, net of tax:                       |  |                |   |                              |  |                       |  |                                                     |         |       | 
|Foreign
  currency translation
              adjustments |  |                |   | 0                            |  |                       |  |                                                     | 0       |       | 
|Unrealized
  loss on financial
              instruments |  |                |   | 0                            |  |                       |  |                                                     | 0       |       | 
|                                                         |  |                |   |                              |  |                       |  |                                                     |         |       | 
|Comprehensive
  loss                                     |  |                |   | 0                            |  |                       |  |                                                     | 0       |       | 
|                                                         |  |                |   |                              |  |                       |  |                                                     |         |       | 
|BALANCE,
  December 31, 2002                             |  |                |   | 93                           |  |                       |  |                                                     | 145,088 |       | 
|Net
  loss                                               |  |                |   | 0                            |  |                       |  |                                                     | 0       |       | 
|Other
  comprehensive, net of tax:                       |  |                |   |                              |  |                       |  |                                                     |         |       | 
|Foreign
  currency translation
              adjustments |  |                |   | 0                            |  |                       |  |                                                     | 0       |       | 
|Unrealized
  gain on financial
              instruments |  |                |   | 0                            |  |                       |  |                                                     | 0       |       | 
|                                                         |  |                |   |                              |  |                       |  |                                                     |         |       | 
|Comprehensive
  loss                                     |  |                |   | 0                            |  |                       |  |                                                     | 0       |       | 
|Exercise
  of stock options                              |  |                |   | 0                            |  |                       |  |                                                     | 2       |       | 
|                                                         |  |                |   |                              |  |                       |  |                                                     |         |       | 
|BALANCE,
  December 31, 2003                             |  |                | $ | 93                           |  |                       |  | $                                                   | 145,090 |       | 
|                                                         |  |                |   |                              |  |                       |  |                                                     |         |       | 

The accompanying notes are an integral part of these consolidated
statements

F-6

---

---

MILLER INDUSTRIES, INC. AND SUBSIDIARIES

CONSOLIDATED
STATEMENTS OF CASH FLOWS

FOR
THE YEARS ENDED DECEMBER 31, 2003, 2002, EIGHT MONTHS ENDED
DECEMBER 31, 2001 AND YEAR ENDED APRIL 30, 2001(IN
THOUSANDS)

|                                                                                  |  | December 31,
  2003 |   | December 31,
  2002 |   | December 31,
  2001 |  | April 30,
  2001 |        
|--------------------------------------------------------------------------------- |  | ------------------- | - | ------------------- | - | ------------------- |  | ---------------- | -------
|                                                                                  |  |                     |   |                     |   |                     |  |                  |        
|OPERATING
  ACTIVITIES:                                                           |  |                     |   |                     |   |                     |  |                  |        
|Net
  loss                                                                        |  |                     | $ | (14,153             | ) |                     |  | $                | (45,694
|Adjustments
  to reconcile net loss to net cash provided by operating activities: |  |                     |   |                     |   |                     |  |                  |        
|                                                                                  |  |                     |   |                     |   |                     |  |                  |        
|Loss
  from discontinued operations                                               |  |                     |   | 16,223              |   |                     |  |                  | 26,965 
|Depreciation
  and amortization                                                   |  |                     |   | 8,065               |   |                     |  |                  | 7,232  
|Provision
  for doubtful accounts                                                 |  |                     |   | 492                 |   |                     |  |                  | 563    
|Cumulative
  effect of change in accounting principle                             |  |                     |   |                    |   |                     |  |                  | 21,812 
|Special
  charges and other operating expenses, net                               |  |                     |   | 682                 |   |                     |  |                  |       
|(Gain) Loss on disposals of property, plant, and equipment                        |  |                     |   | 54                  |   |                     |  |                  | (4     
|Deferred
  income tax (benefit) provision                                         |  |                     |   |                    |   |                     |  |                  | 3,726  
|Paid
  in kind interest                                                           |  |                     |   |                    |   |                     |  |                  | 574    
|Proceeds
  from tax refunds                                                       |  |                     |   |                    |   |                     |  |                  | 9,046  
|Changes
  in operating assets and liabilities:                                    |  |                     |   |                     |   |                     |  |                  |        
|Accounts
  receivable                                                             |  |                     |   | 7,393               |   |                     |  |                  | (1,290 
|Inventories                                                                       |  |                     |   | 2,200               |   |                     |  |                  | 5,286  
|Prepaid
  expenses and other                                                      |  |                     |   | (997                | ) |                     |  |                  | (80    
|Other
  assets                                                                    |  |                     |   |                    |   |                     |  |                  | (31    
|Accounts
  payable                                                                |  |                     |   | 7,942               |   |                     |  |                  | 644    
|Accrued
  liabilities and other                                                   |  |                     |   | (2,231              | ) |                     |  |                  | (5,767 
|                                                                                  |  |                     |   |                     |   |                     |  |                  |        
|Net
  cash provided by operating activities from continuing operations            |  |                     |   | 25,670              |   |                     |  |                  | 22,982 
|                                                                                  |  |                     |   |                     |   |                     |  |                  |        
|Net
  cash used in operating activities from discontinued operations              |  |                     |   | (12,292             | ) |                     |  |                  | (3,392 
|                                                                                  |  |                     |   |                     |   |                     |  |                  |        
|Net
  cash provided operating activities                                          |  |                     |   | 13,378              |   |                     |  |                  | 19,590 
|                                                                                  |  |                     |   |                     |   |                     |  |                  |        
|INVESTING
  ACTIVITIES:                                                           |  |                     |   |                     |   |                     |  |                  |        
|Purchases
  of property, plant, and equipment                                     |  |                     |   | (1,178              | ) |                     |  |                  | (2,647 
|Proceeds
  from sale of property, plant, and equipment                            |  |                     |   | 51                  |   |                     |  |                  | 52     
|Proceeds
  from sale of business                                                  |  |                     |   | 3,645               |   |                     |  |                  |       
|Payments
  received on notes receivables                                          |  |                     |   | 808                 |   |                     |  |                  | 142    
|                                                                                  |  |                     |   |                     |   |                     |  |                  |        
|Net
  cash provided by (used in) investing activities from continuing operations  |  |                     |   | 3,326               |   |                     |  |                  | (2,453 
|                                                                                  |  |                     |   |                     |   |                     |  |                  |        
|Net
  cash provided by investing activities from discontinued operations          |  |                     |   | 5,530               |   |                     |  |                  | 20,691 
|                                                                                  |  |                     |   |                     |   |                     |  |                  |        
|Net
  cash provided by (used in) investing activities                             |  |                     |   | 8,856               |   |                     |  |                  | 18,238 
|                                                                                  |  |                     |   |                     |   |                     |  |                  |        
|FINANCING
  ACTIVITIES:                                                           |  |                     |   |                     |   |                     |  |                  |        
|Net
  (payments) borrowings under Senior Credit Facility                          |  |                     |   | (1,569              | ) |                     |  |                  | (1,310 
|Borrowings
  under subordinated credit facility                                   |  |                     |   |                    |   |                     |  |                  |       
|Net
  payments under former credit facility                                       |  |                     |   |                    |   |                     |  |                  |       
|Payments
  on long-term obligations                                               |  |                     |   | (3,301              | ) |                     |  |                  | (4,948 
|Borrowings
  under long-term obligations                                          |  |                     |   | 260                 |   |                     |  |                  | 1,007  
|Additions
  to deferred financing costs                                           |  |                     |   | (3,080              | ) |                     |  |                  | (1,699 
|Termination
  of interest rate swap                                               |  |                     |   | 97                  |   |                     |  |                  | (239   
|Proceeds
  from exercise of stock options                                         |  |                     |   | 2                   |   |                     |  |                  |       
|                                                                                  |  |                     |   |                     |   |                     |  |                  |        
|Net
  cash (used in) provided by financing activities from continuing operations  |  |                     |   | (7,591              | ) |                     |  |                  | (7,189 
|                                                                                  |  |                     |   |                     |   |                     |  |                  |        
|Net
  cash used in financing activities from discontinued operations              |  |                     |   | (12,667             | ) |                     |  |                  | (37,161
|                                                                                  |  |                     |   |                     |   |                     |  |                  |        
|Net
  cash used in financing activities                                           |  |                     |   | (20,258             | ) |                     |  |                  | (44,350
|                                                                                  |  |                     |   |                     |   |                     |  |                  |        
|EFFECT OF
  EXCHANGE RATE CHANGES ON CASH AND TEMPORARY
  INVESTMENTS             |  |                     |   | 1,569               |   |                     |  |                  | 508    
|                                                                                  |  |                     |   |                     |   |                     |  |                  |        
|                                                                                  |  |                     |   |                     |   |                     |  |                  |        
|NET CHANGE
  IN CASH AND TEMPORARY INVESTMENTS                                    |  |                     |   | 3,545               |   |                     |  |                  | (6,014 
|CASH AND
  TEMPORARY INVESTMENTS, beginning of period                             |  |                     |   | 2,097               |   |                     |  |                  | 9,863  
|                                                                                  |  |                     |   |                     |   |                     |  |                  |        
|CASH AND
  TEMPORARY INVESTMENTS-DISCONTINUED OPERATIONS,
  beginning of period   |  |                     |   | 1,752               |   |                     |  |                  |       
|                                                                                  |  |                     |   |                     |   |                     |  |                  |        
|CASH AND
  TEMPORARY INVESTMENTS-DISCONTINUED OPERATIONS,
  end of period         |  |                     |   | 2,154               |   |                     |  |                  | 1,752  
|                                                                                  |  |                     |   |                     |   |                     |  |                  |        
|CASH AND
  TEMPORARY INVESTMENTS, end of period                                   |  |                     | $ | 5,240               |   |                     |  | $                | 2,097  
|                                                                                  |  |                     |   |                     |   |                     |  |                  |        
|                                                                                  |  |                     |   |                     |   |                     |  |                  |        
|SUPPLEMENTAL
  DISCLOSURE OF CASH FLOW INFORMATION:                               |  |                     |   |                     |   |                     |  |                  |        
|Cash
  payments for interest                                                      |  |                     | $ | 5,060               |   |                     |  | $                | 7,392  
|                                                                                  |  |                     |   |                     |   |                     |  |                  |        
|                                                                                  |  |                     |   |                     |   |                     |  |                  |        
|Cash
  payments for income taxes                                                  |  |                     | $ | 358                 |   |                     |  | $                | 581    
|                                                                                  |  |                     |   |                     |   |                     |  |                  |        

The accompanying notes are an integral part of these consolidated
statements

F-7

---

---

MILLER INDUSTRIES, INC. AND SUBSIDIARIES

NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS

1.          ORGANIZATION
AND NATURE OF OPERATIONS

Miller
Industries, Inc. and subsidiaries (the Company) has historically been an
integrated provider of vehicle towing and recovery equipment. As further
described in Note 3, during the year ended December 31, 2002, the Companys
management and board of directors made the decision to divest of the remainder
of its towing services segment, as well as the operations of the distribution
group of the towing and recovery equipment segment.  At December 31, 2003, the Company had substantially completed
this process.  The principal markets for
the Companys towing and recovery equipment are approximately 150 independent
distributors and users of towing and recovery equipment located primarily
throughout the United States and other customers throughout the world. The
Companys products are marketed under the brand names of Century, Challenger,
Holmes, Champion, Eagle, Jige, Boniface, Vulcan, and Chevron.

The
Company marketed its towing and recovery services in the United States through
its wholly-owned subsidiary RoadOne, Inc.

2.          GOING
CONCERN

The towing and recovery equipment manufacturing and towing
services industries are highly competitive. Certain competitors may have
substantially greater financial and other resources than the Company. These
industries are also subject to a number of external influences, such as general
economic conditions, interest rate levels, consumer confidence, and general
credit availability. Demand for the Companys equipment has been negatively
impacted by cost pressures facing its customers.  Continuation of these pressures could impact the Companys
ability to service its debt.

The Companys financial statements have been prepared on a
going concern basis, which contemplates the realization of assets and the
settlement of liabilities and commitments in the normal course of
business.  As more fully described
below, subsequent to December 31, 2002, the Company was in default of certain
covenants under its senior (Senior Credit Facility) and subordinated (Junior
Credit Facility) credit facility agreements, and its subordinated credit
facility was scheduled to mature on July 23, 2003.  The senior and subordinated credit facility agreements contain
certain cross-default provisions and provide for acceleration of amounts due as
well as other remedies in the event of default.  These circumstances raised substantial doubt about the Companys
ability to continue as a going concern as of December 31, 2002.  The consolidated financial statements for
2002 do not include any adjustments that might result from the resolution of
these matters.

Prior
to making the determination to sell all of its remaining towing services
operations, the Company had focused on cost reduction and expense control, as
well as other opportunities for improving operating cash flows to improve
liquidity. The Company had also disposed of certain underperforming RoadOne
assets and operations in order to improve liquidity and to reduce expenses and
debt. As described in Note 3, in October 2002, the Company decided to sell all
remaining towing services operations. 
During 2002, the Company sold 29 towing services markets for proceeds of
$23.5 million, which have been used to reduce the RoadOne revolver.  The Company also made the decision in the
fourth quarter of 2002 to divest of the operations of the distribution group of
the towing and recovery equipment segment. 
During the year ended December 31, 2003, the Company sold substantially
all of the assets in sixteen towing service markets, as well as assets in other
markets of its towing services segment. 
Total proceeds from

F-8

---

---

the
sales were $6.8 million which included $6.6 million in cash and $0.2 million in
notes receivable.  Losses on the sales
of discontinued operations were $3.8 million. As of March 15, 2004, only
miscellaneous assets from previously sold markets remain.  During the year ended December 31, 2003, the
Company sold one distributor location with total proceeds of approximately $1.9
million in cash and $0.8 million subordinated notes receivable.  Subsequent to December 31, 2003, the Company
sold three distributor locations which included total proceeds of approximately
$2.3 million in cash and $0.4 million subordinated notes receivable.  The Company has entered into negotiations
for the disposition of all of the five remaining distribution group
locations.  As of March 15, 2004,
agreements for the disposition of two of the locations are being negotiated,
and letters of intent are being negotiated for three of the locations.  Although the Company believes that it can
manage the sale and wind down of the remaining operations effectively, there
can be no assurance that such will be the case.  Even if the Company is able to manage the sales and wind down
effectively, it may nevertheless have an adverse impact on the Companys
results of operations.

The
Company received a tax refund of approximately $4.2 million during the quarter
ended June 30, 2002, which was used to reduce the RoadOne revolver and cured
the over-advance position that existed at that time.  An additional tax refund of $4.6 million was received during the
quarter ended September 30, 2002, with proceeds used to further reduce the
borrowings under the RoadOne revolver.

All
of these efforts have resulted in approximately $28.1 million in reductions to
the RoadOne revolver during 2002 and 
$9.5 million during 2003. Additionally, the towing and recovery equipment revolver and the term loan were  reduced by $10.9 million and $4.1 million,
respectively, during 2002.  During 2003,
the towing and recovery equipment revolver was decreased by $23.0 million and
the term loan was increased by $14.0 million, including the effects of the
refinancing described in Note 8.

As
further described in Note 8, the Companys Senior Credit Facility and Junior
Credit Facility were restructured in December 2003.

The
Senior Credit Facility was restructured and restated as a $15.0 million
revolving facility and $12.0 million and $5.0 million term loans.  As a result of this restructuring, all
previously existing defaults under the Senior Credit Facility were waived, the
interest rate was lowered by 2% to reflect a non-default rate, fees
attributable to RoadOne of $30,000 per month were eliminated, the financial
covenants were substantially relaxed, and availability under the Facility was
increased by approximately $5.0 million.

The
Junior Credit Facility holders agreed to an exchange transaction where they
would extend the maturity date of 70% of the outstanding principal amount,
approximately $9.75 million, convert the remaining 30% of the outstanding
principal, plus all accrued interest and fees, into the Companys common stock
and convert warrants into the Companys common stock.  The restructured terms extend the maturity date to July 31, 2005
provide for an effective blended interest rate of 14%, provide for financial
covenants that match those of the Senior Credit Facility and make other
amendments to the Junior Credit Facility consistent with amendments made to the
Senior Credit Facility as it was amended December 24, 2003.

3.          DISCONTINUED
OPERATIONS

During the fourth quarter
of the year ended December 31, 2002, the Companys management and board of
directors made the decision to divest of its remaining towing services segment,
as well as the operations of the distribution group of the towing and recovery
equipment segment.

During the year ended
December 31, 2002, the Company disposed of assets in 29 underperforming towing
service markets, as well as assets in other markets of its towing services
segment.  Total proceeds

F-9

---

---

from the sales were $23.5
million which included $22.7 million in cash and $0.8 million in notes
receivable.  Losses on the sales of
discontinued operations were $5.1 million.

During the year ended December
31, 2003, the Company disposed of substantially all of the assets in sixteen
towing service markets, as well as assets in other markets of its towing
services segment.  Total proceeds from
the sales were $6.8 million which included $6.6 million in cash and $0.2
million in notes receivable.  Losses on
the sales of discontinued operations were $3.8 million.  As of March 15, 2004, only miscellaneous
assets from previously sold markets remain.

During the year ended
December 31, 2003, the Company sold one distributor location with total
proceeds of approximately $1.9 million in cash and $0.8 million subordinated
notes receivable.  Subsequent to
December 31, 2003, the Company sold three distributor locations which included
total proceeds of approximately $2.3 million in cash and $0.4 million
subordinated notes receivable.  The
Company has entered into negotiations for the disposition of all of the five
remaining distribution group locations. 
As of March 15, 2004, agreements for the disposition of all of the
remaining locations are being negotiated.

In accordance with SFAS
No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets, the
assets for the towing services segment and the distribution group are
considered a disposal group and are no longer being depreciated.  All assets and liabilities and results of
operations associated with these assets have been separately presented in the
accompanying financial statements at December 31, 2002.  The statements of operations and related
financial statement disclosures for all prior years have been restated to
present the towing services segment and the distribution group as discontinued
operations separate from continuing operations.  Results of operations for the towing services segment and the distribution
group reflect interest expense for debt directly attributing to these
businesses, as well as an allocation of corporate debt based on intercompany
balances.

The results of operations
and loss on disposal associated with certain towing services markets, which
were sold in June 2003, have been reclassified from discontinued operations to
continuing operations given the Companys significant continuing involvement in
the operations of the disposal components via a consulting agreement, and the Companys
ongoing interest in the cash flows of the operations of the disposal components
via a long-term license agreement.  The
Company applied this change retroactively by adjusting the Consolidated
Statement of Operations and the Consolidated Statements of Cash Flows for all
periods presented as outlined below:

F-10

---

---

|                                                                           |  | Year Ended December 31, 2002 |         | Eight Months Ended
  December 31, 2001 |   | Year Ended April 30, 2001 |  
|-------------------------------------------------------------------------- |  | ---------------------------- | ------- | -------------------------------------- | - | ------------------------- | -
|                                                                           |  |                              |         |                                        |   |                           |  
|                                                                           |  | As
  Previously
  Reported   |         | Adjustments                            |   | As Adjusted               |  
|                                                                           |  |                              |         |                                        |   |                           |  
|                                                                           |  |                              |         |                                        |   |                           |  
|Net sales                                                                  |  | $                            | 203,059 |                                        | $ | 28,444                    |  
|                                                                           |  |                              |         |                                        |   |                           |  
|Costs and expenses:                                                        |  |                              |         |                                        |   |                           |  
|Costs of
  operations                                                      |  |                              | 174,516 |                                        |   | 22,539                    |  
|Selling,
  general and administrative
        expenses                     |  |                              | 17,434  |                                        |   | 2,106                     |  
|                                                                           |  |                              |         |                                        |   |                           |  
|Special charges                                                            |  |                              | -       |                                        |   | -                         |  
|                                                                           |  |                              |         |                                        |   |                           |  
|Interest expense, net                                                      |  |                              | 4,368   |                                        |   | 249                       |  
|                                                                           |  |                              |         |                                        |   |                           |  
|                                                                           |  |                              |         |                                        |   |                           |  
|Total costs and expenses                                                   |  |                              | 196,318 |                                        |   | 24,894                    |  
|                                                                           |  |                              |         |                                        |   |                           |  
|Income from continuing
  operations
     before income taxes               |  |                              | 6,741   |                                        |   | 3,550                     |  
|Income tax provision                                                       |  |                              | 3,217   |                                        |   | 3,991                     |  
|                                                                           |  |                              |         |                                        |   |                           |  
|Income from continuing
  operations                                        |  |                              | 3,524   |                                        |   | (441                      | )
|                                                                           |  |                              |         |                                        |   |                           |  
|Discontinued operations:                                                   |  |                              |         |                                        |   |                           |  
|Loss from
  discontinued operations,
        before income taxes           |  |                              | (26,146 | )                                      |   | (3,551                    | )
|Income
  tax (benefit) provision                                           |  |                              | 1,260   |                                        |   | (3,992                    | )
|                                                                           |  |                              |         |                                        |   |                           |  
|Loss from
  discontinued operations,
        net of taxes                  |  |                              | (27,406 | )                                      |   | 441                       |  
|                                                                           |  |                              |         |                                        |   |                           |  
|                                                                           |  |                              |         |                                        |   |                           |  
|Net loss before cumulative
  effect of
     change in accounting principle |  |                              | (23,882 | )                                      |   | -                         |  
|Cumulative
  effect of change in
        accounting principle              |  |                              | (21,812 | )                                      |   | -                         |  
|                                                                           |  |                              |         |                                        |   |                           |  
|Net loss                                                                   |  | $                            | (45,694 | )                                      | $ | -                         |  
|                                                                           |  |                              |         |                                        |   |                           |  
|                                                                           |  |                              |         |                                        |   |                           |  
|Basic loss per common
  share:                                             |  |                              |         |                                        |   |                           |  
|Income
  (loss) from continuing
        operations                         |  | $                            | 0.38    |                                        | $ | (0.04                     | )
|Loss from
  discontinued operations                                        |  |                              | (2.93   | )                                      |   | 0.04                      |  
|Cumulative
  effect of change in
        accounting principle              |  |                              | (2.34   | )                                      |   | -                         |  
|                                                                           |  |                              |         |                                        |   |                           |  
|Basic loss                                                                 |  | $                            | (4.89   | )                                      | $ | -                         |  
|                                                                           |  |                              |         |                                        |   |                           |  
|                                                                           |  |                              |         |                                        |   |                           |  
|Diluted loss per common
  share:                                           |  |                              |         |                                        |   |                           |  
|Income
  (loss) from continuing
        operations                         |  | $                            | 0.38    |                                        | $ | (0.04                     | )
|Loss from
  discontinued operations                                        |  |                              | (2.93   | )                                      |   | 0.04                      |  
|Cumulative
  effect of change in
        accounting principle              |  |                              | (2.34   | )                                      |   | -                         |  
|                                                                           |  |                              |         |                                        |   |                           |  
|Diluted
  loss                                                             |  | $                            | (4.89   | )                                      | $ | -                         |  
|                                                                           |  |                              |         |                                        |   |                           |  
|                                                                           |  |                              |         |                                        |   |                           |  
|Weighted average shares outstanding:                                       |  |                              |         |                                        |   |                           |  
|Basic                                                                      |  |                              | 9,341   |                                        |   |                           |  
|                                                                           |  |                              |         |                                        |   |                           |  
|Diluted                                                                    |  |                              | 9,348   |                                        |   |                           |  
|                                                                           |  |                              |         |                                        |   |                           |  

F-11

---

---

|                                                                                                       |  | Year Ended
  December 31, 2002 |         | Eight
  Months Ended
  December 31, 2001 |   | Year Ended
  April 30, 2001 |  
|------------------------------------------------------------------------------------------------------ |  | ------------------------------ | ------- | ---------------------------------------- | - | --------------------------- | -
|                                                                                                       |  | As Previously
  Reported       |         | Adjustments                              |   | AsAdjusted                  |  
|                                                                                                       |  |                                |         |                                          |   |                             |  
|Operating
  Activities:                                                                                |  |                                |         |                                          |   |                             |  
|Net Loss                                                                                               |  | $                              | (45,694 | )                                        | $ | -                           |  
|Adjustments
  to reconcile net loss to net
     cash provided by operating activities:                 |  |                                |         |                                          |   |                             |  
|Loss on
  discontinued operations                                                                      |  |                                | 27,406  |                                          |   | (441                        | )
|Depreciation
  and amoritzation                                                                        |  |                                | 6,554   |                                          |   | 678                         |  
|Provision
  for doubtful accounts                                                                      |  |                                | 563     |                                          |   | -                           |  
|Cumulative
  effect of change in
           accounting principle                                       |  |                                | 21,812  |                                          |   | -                           |  
|Special
  charges and other operating
           expenses, net                                         |  |                                | -       |                                          |   | -                           |  
|Gain on
  disposals of property,
           plant, and equipment                                       |  |                                | (4      | )                                        |   | -                           |  
|Deferred
  income tax (benefit) provision                                                              |  |                                | 3,726   |                                          |   | -                           |  
|Paid in
  kind interest                                                                                |  |                                | 574     |                                          |   | -                           |  
|Proceeds
  from tax refunds                                                                            |  |                                | 9,046   |                                          |   | -                           |  
|Changes
  in operating assets and
           liabilities:                                              |  |                                |         |                                          |   |                             |  
|Accounts
  receivable                                                                                  |  |                                | (1,742  | )                                        |   | 452                         |  
|Inventories                                                                                            |  |                                | 5,286   |                                          |   | -                           |  
|Prepaid
  expenses and other                                                                           |  |                                | (102    | )                                        |   | 22                          |  
|Other
  assets                                                                                         |  |                                | (33     | )                                        |   | 2                           |  
|Accounts
  payable                                                                                     |  |                                | 637     |                                          |   | 7                           |  
|Accrued
  liabilities and other                                                                        |  |                                | (2,446  | )                                        |   | (3,321                      | )
|                                                                                                       |  |                                |         |                                          |   |                             |  
|Net cash provided by
  operating activities
     from continuing operations                            |  |                                | 25,583  |                                          |   | (2,601                      | )
|                                                                                                       |  |                                |         |                                          |   |                             |  
|Net cash used in operating
     activities from discontinued operations                                |  |                                | (5,993  | )                                        |   | 2,601                       |  
|                                                                                                       |  |                                |         |                                          |   |                             |  
|Net cash provided by
  operating activities                                                            |  |                                | 19,590  |                                          |   | -                           |  
|                                                                                                       |  |                                |         |                                          |   |                             |  
|                                                                                                       |  |                                |         |                                          |   |                             |  
|Investing
  Activities:                                                                                |  |                                |         |                                          |   |                             |  
|Purchases
  of property, plant and
           equipment                                                |  |                                | (1,090  | )                                        |   | (1,557                      | )
|Proceeds
  from the sale of property,
           plant and equipment                                   |  |                                | 52      |                                          |   | -                           |  
|Payments
  received on notes receivable                                                                |  |                                | 142     |                                          |   | -                           |  
|                                                                                                       |  |                                |         |                                          |   |                             |  
|Net cash
  used in investing activities
           from continuing operations                          |  |                                | (896    | )                                        |   | (1,557                      | )
|                                                                                                       |  |                                |         |                                          |   |                             |  
|Net cash
  provided by investing
           activities from discontinued
           operations         |  |                                | 19,134  |                                          |   | 1,557                       |  
|                                                                                                       |  |                                |         |                                          |   |                             |  
|Net cash
  provided by (used in)
           investing activities                                       |  |                                | 18,238  |                                          |   | -                           |  
|                                                                                                       |  |                                |         |                                          |   |                             |  
|                                                                                                       |  |                                |         |                                          |   |                             |  
|Financing
  Activities:                                                                                |  |                                |         |                                          |   |                             |  
|Net
  (payments) borrowings under
           senior credit facility                                    |  |                                | (1,310  | )                                        |   | -                           |  
|Borrowings
  under subordinated credit
           facility                                             |  |                                | -       |                                          |   | -                           |  
|Net
  payments under
           former credit facility                                                 |  |                                | -       |                                          |   | -                           |  
|Payments
  on long-term obligations                                                                    |  |                                | (4,948  | )                                        |   | -                           |  
|Borrowings
  under long-term obligations                                                               |  |                                | 78      |                                          |   | 929                         |  
|Additions
  to deferred financing costs                                                                |  |                                | (1,699  | )                                        |   | -                           |  
|Termination
  of interest rate swap                                                                    |  |                                | (239    | )                                        |   | -                           |  
|Proceeds
  from exercise of stock options                                                              |  |                                | -       |                                          |   | -                           |  
|                                                                                                       |  |                                |         |                                          |   |                             |  
|Net cash
  (used in) provided by
           financing activities from continuing
           operations |  |                                | (8,118  | )                                        |   | 929                         |  
|                                                                                                       |  |                                |         |                                          |   |                             |  
|Net cash
  used in financing activities
           from discontinued operations                        |  |                                | (36,232 | )                                        |   | (929                        | )
|                                                                                                       |  |                                |         |                                          |   |                             |  
|Net cash used in financing
  activities                                                                |  |                                | (44,350 | )                                        |   | -                           |  
|                                                                                                       |  |                                |         |                                          |   |                             |  
|                                                                                                       |  |                                |         |                                          |   |                             |  
|Effect of Exchange Rate Changes on
  Cash and Temporary Investments                                    |  |                                | 508     |                                          |   | -                           |  
|                                                                                                       |  |                                |         |                                          |   |                             |  
|                                                                                                       |  |                                |         |                                          |   |                             |  
|Net Change
  in Cash and TemporaryInvestments                                                          |  |                                | (6,014  | )                                        |   | -                           |  
|Cash and
  Temporary Investments,beginning of
  period                                                 |  |                                | 9,863   |                                          |   | -                           |  
|                                                                                                       |  |                                |         |                                          |   |                             |  
|Cash and
  Temporary Investments -Discontinued
  Operations - end of period                            |  |                                | 1,752   |                                          |   | -                           |  
|Cash and
  Temporary Investments end of period                                                        |  | $                              | 2,097   |                                          | $ | -                           |  
|                                                                                                       |  |                                |         |                                          |   |                             |  

F-12

---

---

The operating results for
the discontinued operations of the towing services segment and the distributor
group for the years ended December 31, 2003, 2002, the eight months ended
December 31, 2001, and the year ended April 30, 2001 were as follows (in thousands):

|                                    |  | Year Ended December 31, 2003 |        | Year Ended December 31, 2002 |   | Eight Months Ended
  December 31, 2001 |   | Year Ended April 30, 2001 |        
|----------------------------------- |  | ---------------------------- | ------ | ---------------------------- | - | -------------------------------------- | - | ------------------------- | -------
|                                    |  |                              |        |                              |   |                                        |   |                           |        
|                                    |  | Dist.                        |        | Towing                       |   | Total                                  |   | Dist.                     |        
|                                    |  |                              |        |                              |   |                                        |   |                           |        
|                                    |  |                              |        |                              |   |                                        |   |                           |        
|Net Sales                           |  | $                            | 68,724 |                              | $ | 8,356                                  |   | $                         | 77,080 
|                                    |  |                              |        |                              |   |                                        |   |                           |        
|Operating income (loss)             |  |                              | (371   | )                            |   | (2,764                                 | ) |                           | (3,135 
|                                    |  |                              |        |                              |   |                                        |   |                           |        
|Net loss before taxes               |  |                              | (6,449 | )                            |   | (10,811                                | ) |                           | (17,260
|                                    |  |                              |        |                              |   |                                        |   |                           |        
|Loss from discontinued
  operations |  |                              | (6,607 | )                            |   | (9,616                                 | ) |                           | (16,223

F-13

---

---

The following assets and
liabilities are reclassified as held for sale at December 31, 2003 and 2002 (in
thousands):

|                                                                    |  | Year Ended December 31, 2003 |        | Year Ended December 31, 2002 |  
|------------------------------------------------------------------- |  | ---------------------------- | ------ | ---------------------------- | -
|                                                                    |  |                              |        |                              |  
|                                                                    |  | Dist.                        |        | Towing                       |  
|                                                                    |  |                              |        |                              |  
|                                                                    |  |                              |        |                              |  
|Cash and temporary
  investments                                    |  | $                            | 2,154  |                              | $
|                                                                    |  |                              |        |                              |  
|Accounts receivable, net                                            |  |                              | 3,603  |                              |  
|                                                                    |  |                              |        |                              |  
|Inventories                                                         |  |                              | 14,266 |                              |  
|                                                                    |  |                              |        |                              |  
|Prepaid expenses and other
  current assets                         |  |                              | 157    |                              |  
|                                                                    |  |                              |        |                              |  
|                                                                    |  |                              |        |                              |  
|Current assets of
  discontinued operations held
  for sale         |  |                              | 20,180 |                              |  
|                                                                    |  |                              |        |                              |  
|                                                                    |  |                              |        |                              |  
|Property, plant and
  equipment                                     |  |                              | 22     |                              |  
|                                                                    |  |                              |        |                              |  
|Other long-term assets                                              |  |                              |       |                              |  
|                                                                    |  |                              |        |                              |  
|                                                                    |  |                              |        |                              |  
|Noncurrent assets of
  discontinued operations held
  for sale      |  |                              | 22     |                              |  
|                                                                    |  |                              |        |                              |  
|                                                                    |  |                              |        |                              |  
|Current portion of long-term
  debt                                 |  |                              | 852    |                              |  
|                                                                    |  |                              |        |                              |  
|Accounts payable                                                    |  |                              | 3,644  |                              |  
|                                                                    |  |                              |        |                              |  
|Accrued liabilities and other                                       |  |                              | 4,792  |                              |  
|                                                                    |  |                              |        |                              |  
|                                                                    |  |                              |        |                              |  
|Current liabilities of
  discontinued operations held
  for sale    |  |                              | 9,288  |                              |  
|                                                                    |  |                              |        |                              |  
|                                                                    |  |                              |        |                              |  
|Long-term debt                                                      |  |                              | 9,094  |                              |  
|                                                                    |  |                              |        |                              |  
|                                                                    |  |                              |        |                              |  
|Noncurrent liabilities of
  discontinued operations held
  for sale |  | $                            | 9,094  |                              | $
|                                                                    |  |                              |        |                              |  

F-14

---

---

4.          SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES

Use of Estimates in the Preparation of Financial Statements

The
preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.

Consolidation

The
accompanying consolidated financial statements include the accounts of Miller
Industries, Inc. and its subsidiaries. All significant intercompany
transactions and balances have been eliminated.

Cash and Temporary Investments

Cash
and temporary investments include all cash and cash equivalent investments with
original maturities of three months or less, primarily consisting of overnight
repurchase agreements.

Fair Value of Financial Instruments

The
carrying values of cash and temporary investments, accounts receivable,
accounts payable, and accrued liabilities are reasonable estimates of their
fair values because of the short maturity of these financial instruments. The
carrying values of long-term obligations are reasonable estimates of their fair
values based on the rates available for obligations with similar terms and
maturities.

Inventories

Inventory
costs include materials, labor, and factory overhead. Inventories are stated at
the lower of cost or market, determined on a first-in, first-out basis.
Inventories for continuing operations at December 31, 2003 and 2002 consisted
of the following (in thousands):

|                |  | December 31, 2003 |   | December 31, 2002 | 
|--------------- |  | ----------------- | - | ----------------- | 
|                |  |                   |   |                   | 
|Chassis         |  |                   | $ | 4,286             | 
|Raw materials   |  |                   |   | 10,253            | 
|Work in process |  |                   |   | 7,892             | 
|Finished goods  |  |                   |   | 4,284             | 
|                |  |                   |   |                   | 
|                |  |                   | $ | 26,715            | 
|                |  |                   |   |                   | 

Property, Plant, and Equipment

Property, plant, and
equipment are recorded at cost. Depreciation for financial reporting purposes is
provided using the straight-line method over the estimated useful lives of the
assets. Accelerated depreciation methods are used for income tax reporting
purposes. Estimated useful lives range from 20 to 30 years for buildings and
improvements and 5 to 10 years for machinery and equipment, furniture and
fixtures, and software costs. Expenditures for routine maintenance and repairs
are charged to expense as incurred. Expenditures related to major overhauls and
refurbishments of towing services equipment that extend the related useful
lives are capitalized. Internal labor is used in certain capital projects.

F-15

---

---

Property, plant, and
equipment for continuing operations at December 31, 2003 and 2002 consisted of
the following (in thousands):

|                              |  | December 31, 2003 |   | December 31, 2002 |  
|----------------------------- |  | ----------------- | - | ----------------- | -
|                              |  |                   |   |                   |  
|                              |  |                   |   |                   |  
|Land                          |  |                   | $ | 1,764             |  
|Buildings and improvements    |  |                   |   | 18,956            |  
|Machinery and equipment       |  |                   |   | 11,500            |  
|Furniture and fixtures        |  |                   |   | 5,587             |  
|Software costs                |  |                   |   | 6,142             |  
|                              |  |                   |   |                   |  
|                              |  |                   |   | 43,949            |  
|Less accumulated depreciation |  |                   |   | (22,972           | )
|                              |  |                   |   |                   |  
|                              |  |                   | $ | 20,977            |  
|                              |  |                   |   |                   |  

The Company recognized
$3,570,000, $4,243,000, $3,095,000 and $4,826,000 in depreciation expense for
continuing operations for the years ended December 31, 2003 and 2002, the eight
months ended December 31, 2001 and the fiscal year ended April 30, 2001,
respectively.  Depreciation expense for
discontinued operations was $148,000, $2,145,000, $2,931,000, and $4,858,000
for the years ended December 31, 2003 and 2002, the eight months ended December
31, 2001, and the fiscal year ended April 30, 2001, and is included in the loss
from discontinued operations in the consolidated statement of operations.

The Company capitalizes
costs related to software development in accordance with established criteria,
and amortizes those costs to expense on a straight-line basis over five years.
System development costs not meeting proper criteria for capitalization are
expensed as incurred.

Net
Income (Loss) Per Share

Basic net income (loss)
per share is computed by dividing net income (loss) by the weighted average
number of common shares outstanding. Diluted net income (loss) per share is
calculated by dividing net income (loss) by the weighted average number of
common and potential dilutive common shares outstanding. Diluted net income per
share takes into consideration the assumed exercise of outstanding stock
options resulting in approximately 43,000, 7,000, 4,000 and 9,000 potential
dilutive common shares for the years ended December 31, 2003 and 2002, the
eight months ended December 31, 2001, and the year ended April 30, 2001,
respectively.

On October 1, 2001, the
Company effected a one-for-five reverse common stock split. All historical and
per share amounts have been retroactively restated to reflect the reverse
common stock split.

Goodwill
and Long-Lived Assets

Goodwill is accounted for
in accordance with SFAS No. 141 Business Combinations and SFAS No. 142
Goodwill and Other Intangible Assets. Upon adoption of these standards in
January 2002, the Company ceased to amortize goodwill (see Note 7 for further
discussion).

In
accordance with SFAS No. 144, Accounting for the Impairment of Long-Lived
Assets, management evaluates the carrying value of long-lived assets when
significant adverse changes in economic value of these assets requires an
analysis, including property and equipment and other intangible assets.  With the adoption of SFAS No. 144, in
January 2002, a long-lived asset is

F-16

---

---

considered
impaired when its fair value is less than its carrying value.  In that event, a loss is calculated based on
the amount the carrying value exceeds the fair value which is estimated based
on future cash flows.  Prior to adopting
SFAS No. 144, a long-lived asset was considered impaired when undiscounted cash
flows or fair value, whichever was more readily determinable, to be realized
from such asset was less than the carrying value.

Accumulated
amortization of goodwill for continuing operations was $2,140,000 at December
31, 2003 and 2002, and $4,373,000 for consolidated operations at December 31,
2001.  Amortization expense for
continuing operations for the eight months ended December 31, 2001 and the
fiscal year ended April 30, 2001, was $602,000 and $906,000, respectively.  Amortization expense for discontinued
operations was $421,000 and $650,000 for the eight months ended December 31,
2001, and the fiscal year ended April 30, 2001, and is included in the loss
from discontinued operations in the consolidated statement of operations.

Patents, Trademarks, and Other Purchased Product Rights

The
cost of acquired patents, trademarks, and other purchased product rights is
capitalized and amortized using the straight-line method over various periods
not exceeding 20 years. Total accumulated amortization of these assets was
$1,275,000, and $1,219,000 for continuing operations at December 31, 2003 and
2002, and $1,080,000 for consolidated operations at December 31, 2001.  Amortization expense for continuing
operations for the years ended December 31, 2003 and 2002, the eight months
ended December 31, 2001 and the fiscal year ended April 30, 2001, was $145,000,
$162,000, $112,000, and $168,000, respectively.  Amortization expense for discontinued operations was $149,000,
$7,000 and $5,000 for the year ended December 31, 2002, the eight months ended
December 31, 2001, and the fiscal year ended April 30, 2001, and is included in
the loss from discontinued operations in the consolidated statement of
operations.  Based on the current
amount of intangible assets subject to amortization, the estimated amortization
expense for the succeeding five years are as follows:  2004 - $140,000; 2005 - $140,000; 2006 - $113,000; 2007 - $0; and
2008 - $0.  As acquisitions and
dispositions of intangible assets occur in the future, these amounts may vary.

Deferred Financing Costs

All
deferred financing costs are included in other assets of continuing operations
and are amortized over the terms of the respective obligations. Total
accumulated amortization of deferred financing costs at December 31, 2003 and
2002 was $300,000 and $3,227,000,
respectively. Amortization expense for the years ended December 31, 2003 and
2002, the eight months ended December 31, 2001 and the fiscal year ended April
30, 2001 was $4,627,000, $2,878,000,
$1,272,000 and $2,127,000, respectively, and is included in interest expense in
the accompanying consolidated statements of operations.

F-17

---

---

Accrued Liabilities and Other

Accrued
liabilities and other consisted of the following for continuing operations at
December 31, 2003 and 2002 (in thousands):

|                                                         |  | December 31, 2003 |   | December 31, 2002 | 
|-------------------------------------------------------- |  | ----------------- | - | ----------------- | 
|                                                         |  |                   |   |                   | 
|Accrued wages, commissions,
       bonuses, and benefits |  |                   | $ | 2,747             | 
|Accrued income taxes                                     |  |                   |   | 204               | 
|Accrued Insurance                                        |  |                   |   | 63                | 
|Other                                                    |  |                   |   | 1,357             | 
|                                                         |  |                   |   |                   | 
|                                                         |  |                   | $ | 4,371             | 
|                                                         |  |                   |   |                   | 

Stock-Based Compensation

The
Company accounts for its stock-based compensation plans under Accounting
Principles Board Opinion No. 25, Accounting for Stock Issued to Employees.
The Company has adopted the disclosure option of SFAS No. 123, Accounting for
Stock-Based Compensation. Accordingly, no compensation cost has been
recognized for stock option grants since the options have exercise prices equal
to the market value of the common stock at the date of grant.

For SFAS No. 123
purposes, the fair value of each option grant has been estimated as of the date
of grant using the Black-Scholes option-pricing model with the following
weighted average assumptions for grants in the year ended December 31, 2002, the
eight months ended December 31, 2001 and the fiscal year ended April 30, 2001,
respectively: expected dividend yield of 0%; expected volatility of 84%, 72%,
and 71%; risk-free interest rate of 3.84%, 4.28%, and 6.10%; and expected lives
of 3.0 years for the year ended December 31, 2002, 5.0 years for the eight
months ended December 31, 2001 and 5.5 years for the fiscal year ended April
30, 2001.  Using these assumptions, the
fair value of options granted in the year ended December 31, 2002, the eight months
ended December 31, 2001, and the fiscal year ended April 30, 2001 is
approximately $53,000, $355,000 and $300,000, respectively, which would be
amortized as compensation expense over the vesting period of the options.  No options were granted during calendar year
2003.

Had compensation cost for
stock option grants in the fiscal years ended December 31, 2003 and 2002, the
eight months ended December 31, 2001 and the fiscal year ended April 30, 2001,
been determined based on the fair value at the grant dates consistent with the
method prescribed by SFAS No. 123, the Companys net loss and net loss per
share would have been adjusted to the pro forma amounts indicated below:

F-18

---

---

|                                                                                                                                                       |  | December 31,
  2003 |   | December 31,
  2002 |   | December 31,
  2001 |  | April 30,
  2001 |        
|------------------------------------------------------------------------------------------------------------------------------------------------------ |  | ------------------- | - | ------------------- | - | ------------------- |  | ---------------- | -------
|                                                                                                                                                       |  |                     |   |                     |   |                     |  |                  |        
|Net loss available to common stockholders, as
  reported                                                                                               |  |                     | $ | (14,153             | ) |                     |  | $                | (45,694
|Add:  Stock-based employee compensation expense
     included in reported net loss, net of related tax effects                                         |  |                     |   |                    |   |                     |  |                  |       
|Deduct:  Total stock-based employee compensation
     expense determined under fair value based method
     for all awards, net of related tax effects |  |                     |   | (265                | ) |                     |  |                  | (400   
|                                                                                                                                                       |  |                     |   |                     |   |                     |  |                  |        
|Net loss available to common stockholders, pro forma                                                                                                   |  |                     | $ | (14,418             | ) |                     |  | $                | (46,094
|                                                                                                                                                       |  |                     |   |                     |   |                     |  |                  |        
|Loss per common share:                                                                                                                                 |  |                     |   |                     |   |                     |  |                  |        
|Basic, as reported                                                                                                                                     |  |                     | $ | (1.52               | ) |                     |  | $                | (4.89  
|Diluted, as reported                                                                                                                                   |  |                     | $ | (1.52               | ) |                     |  | $                | (4.89  
|                                                                                                                                                       |  |                     |   |                     |   |                     |  |                  |        
|Basic, pro forma                                                                                                                                       |  |                     | $ | (1.54               | ) |                     |  | $                | (4.93  
|Diluted, pro forma                                                                                                                                     |  |                     | $ | (1.54               | ) |                     |  | $                | (4.93  

Product Warranty

The
Company provides a one-year limited product and service warranty on certain of
its products.  The Company provides for
the estimated cost of this warranty at the time of sale. Warranty expense for
continuing operations for the years ended December 31, 2003 and 2002, the eight
months ended December 31, 2001 and the fiscal year ended April 30, 2001 was
$1,547,000, $1,489,000, $1,271,000 and $2,126,000, respectively.

The
table below provides a summary of the warranty liability for December 31, 2003
and 2002:

|                                        |  | December 31, |       
|--------------------------------------- |  | ------------ | ------
|                                        |  | 2003         |       
|                                        |  |              |       
|Accrual at beginning of the year        |  | $            | 554   
|Provision                               |  |              | 1,547 
|Settlement                              |  |              | (1,462
|Adjustments to pre-existing liabilities |  |              |      
|                                        |  |              |       
|Accrual at end of year                  |  | $            | 639   
|                                        |  |              |       

Credit Risk

Financial
instruments that potentially subject the Company to significant concentrations
of credit risk consist principally of cash investments and trade accounts
receivable. The Company places its cash investments with high-quality financial
institutions and limits the amount of credit exposure to any one institution.
The Companys trade receivables are primarily from independent distributors of
towing and recovery equipment and towing service customers. Such receivables
are generally not collateralized for towing service customers. The Company
monitors its exposure for credit losses and maintains allowances for
anticipated losses.

F-19

---

---

Revenue Recognition

Revenue
is recorded by the Company when equipment is shipped to independent
distributors or other customers. Revenue from towing services (discontinued
operations) is recognized when services are performed.

Financial Instruments

SFAS
No. 133, Accounting for Derivative Instruments and Hedging Activities,
establishes accounting and reporting standards requiring that every derivative
instrument (including certain derivative instruments embedded in other
contracts) be recorded in the balance sheet as either an asset or liability
measured at its fair value. Changes in the derivatives fair value are
recognized currently in earnings unless specific hedge accounting criteria are
met. Special accounting for qualifying hedges allows a derivatives gains and
losses to offset related results on the hedged item in the income statement,
and requires that a company must formally document, designate, and assess the
effectiveness of transactions that receive hedge accounting. The adoption of
SFAS No. 133 did not have a material effect on the Companys financial
statements. See Note 10 for additional discussions.

Recent Accounting Pronouncements

In
April 2002, the FASB issued SFAS No. 145, Rescission of SFAS Nos. 4, 44, and
64, Amendment of SFAS No. 13, and Technical Corrections as of April 2002.  This Statement rescinds SFAS No. 4,
Reporting Gains and Losses from Extinguishment of Debt, and an amendment of
that Statement, SFAS No. 64, Extinguishments of Debt Made to Satisfy
Sinking-Fund Requirements.  This
Statement also rescinds SFAS No. 44, Accounting for Intangible Assets of Motor
Carriers.  This Statement amends SFAS
No. 13, Accounting for Leases, to eliminate an inconsistency between the
required accounting for sale-leaseback transactions and the required accounting
for certain lease modifications that have economic effects that are similar to
sale-leaseback transactions.  SFAS No.
145 will be effective for fiscal 2003, which begins January 1, 2003.  The adoption of this statement did not have
a material impact on the Companys results of operations or financial position.

FASB
has issued SFAS No. 146, Accounting for Exit or Disposal Activities.  SFAS No. 146 addresses the recognition,
measurement, and reporting of costs that are associated with exit and disposal
activities, including costs related to terminating a contract that is not a
capital lease and termination benefits that employees who are involuntarily
terminated receive under the terms of a one-time benefit arrangement that is
not an ongoing benefit arrangement or an individual deferred-compensation
contract.  SFAS No. 146 supersedes Emerging
Issues Task Force Issue No. 94-3, Liability Recognition for Certain Employee
Termination Benefits and Other Costs to Exit an Activity (including Certain
Costs Incurred in a Restructuring) and requires liabilities associated with
exit and disposal activities to be expensed as incurred.  SFAS No. 146 was effective for exit or
disposal activities of the Company that were initiated after December 31, 2002.

In
April 2003, the FASB issued SFAS No. 149, Amendment of Statement 133 on
Derivative Instruments and Hedging Activities.  SFAS No. 149 amends and clarifies the accounting for certain
derivative instruments embedded in other contracts, and for hedging activities
under SFAS No. 133.  SFAS No. 149 is
effective for certain contracts entered into or modified after June 30,
2003.  The adoption of SFAS No. 149 had
no impact on the Companys financial position or results of operations.

In
May 2003, the FASB issued SFAS No. 150, Accounting for Certain Financial
Instruments with Characteristics of both Liabilities and Equity, effective for
financial instruments entered into or modified after May 31, 2003, and existing
financial instruments at the beginning of the third quarter of

F-20

---

---

2003.  This statement sets standards for
classification and measurement of certain financial instruments.  The adoption of SFAS No. 150 had no impact
on the Companys financial position or 
results of operations.

In
December 2003, the FASB issued a revision of FIN 46, Consolidation of Variable
Interest Entities.  FIN 46 applies to
any business enterprise that has a controlling interest, contractual
relationship or other business relationship with a variable interest
entity.  FIN 46 provides guidance for
determining when an entity should consolidate a variable interest entity.  The interpretation is effective for periods
ending after December 31, 2003.  The
Company has no contractual relationship or other business relationship with a
variable interest entity, and therefore the adoption will not have an effect on
the consolidated results of operations or financial position.

Reclassifications

Certain
prior year amounts have been reclassified to conform to current year
presentation, with no impact on previously reported shareholders equity or net
income (loss).

5.          FISCAL
YEAR CHANGE

Effective
December 31, 2001, the Company changed its fiscal year end from April 30 to
December 31. The table below summarizes selected financial data for the eight
months ended December 31, 2001 and December 31, 2000.

|                                                        |  | Eight months ended
  December 31, 2001 |   | Eight months ended
  December 31, 2000
  (unaudited) | 
|------------------------------------------------------- |  | -------------------------------------- | - | ---------------------------------------------------- | 
|                                                        |  |                                        |   |                                                      | 
|                                                        |  | (in thousands)                         |  
|Net Sales                                               |  |                                        | $ | 162,337                                              | 
|Depreciation and amortization                           |  |                                        |   | 3,809                                                | 
|Special charges and other operating
      expenses, net |  |                                        |   | 6,376                                                | 
|Operating income                                        |  |                                        |   | 3,605                                                | 
|Interest expense, net                                   |  |                                        |   | 1,055                                                | 
|Income from continuing operations                       |  |                                        |   | 28                                                   | 

6.          SPECIAL
CHARGES

During the years ended
December 31, 2003 and 2002 and the eight months ended December 31, 2001, the
Company recorded special charges and other net operating expenses for asset
impairments and the rationalization of certain operations, as follows (in
thousands):

F-21

---

---

|                                                            |  | December 31,
  2003 |   | December 31,
  2002 |  | December 31,
  2001 | 
|----------------------------------------------------------- |  | ------------------- | - | ------------------- |  | ------------------- | 
|                                                            |  |                     |   |                     |  |                     | 
|Towing Services:                                            |  |                     |   |                     |  |                     | 
|Impairment of goodwill                                      |  |                     |   |                     |  |                     | 
|Continuing
  operations                                     |  |                     | $ |                    |  |                     | 
|Discontinued
  operations                                   |  |                     |   |                    |  |                     | 
|                                                            |  |                     |   |                     |  |                     | 
|                                                            |  |                     |   |                    |  |                     | 
|Impairment of
  long-lived assets                           |  |                     |   |                     |  |                     | 
|Discontinued
  operations                                   |  |                     |   | 3,792               |  |                     | 
|Special charges and 
         rationalization of operations |  |                     |   |                     |  |                     | 
|Discontinued
  operations                                   |  |                     |   |                    |  |                     | 
|                                                            |  |                     |   |                     |  |                     | 
|                                                            |  |                     |   | 3,792               |  |                     | 
|Towing and Recovery Equipment:                              |  |                     |   |                     |  |                     | 
|Impairment of goodwill                                      |  |                     |   |                     |  |                     | 
|Continuing operations                                       |  |                     |   |                    |  |                     | 
|Discontinued
  operations                                   |  |                     |   |                    |  |                     | 
|                                                            |  |                     |   |                     |  |                     | 
|                                                            |  |                     |   |                    |  |                     | 
|Impairment of long-lived assets                             |  |                     |   |                     |  |                     | 
|Continuing operations                                       |  |                     |   |                    |  |                     | 
|Discontinued
  operations                                   |  |                     |   | 1,113               |  |                     | 
|                                                            |  |                     |   |                     |  |                     | 
|                                                            |  |                     |   | 1,113               |  |                     | 
|                                                            |  |                     |   |                     |  |                     | 
|                                                            |  |                     | $ | 4,905               |  |                     | 
|                                                            |  |                     |   |                     |  |                     | 

The Company periodically
reviews the carrying amount of long-lived assets and goodwill in both its
towing services and towing equipment segments to determine if those assets may
be recoverable based upon the future operating cash flows expected to be
generated by those assets. As a result of such review during the eight months
ended December 31, 2001, the Company concluded that the carrying value of such
assets in certain towing services markets and certain assets within the
Companys towing and recovery equipment segment were not fully recoverable.

Impairment charges of
$10,778,000 were recorded for the eight months ended December 31, 2001 to
write-down the goodwill in certain towing services markets to their estimated
fair value. Additionally, charges of $3,792,000, $10,191,000 and $2,644,000
were recorded for the years ended December 31, 2003 and 2002 and the eight
months ended December 31, 2001 to write-down the carrying value of certain
long-lived assets (primarily property and equipment) and other special changes
in related markets to estimated fair value. The Company determined fair value
for these assets on a market by market basis taking into consideration various
factors affecting the valuation in each market.

The Company also reviewed
the carrying values of the goodwill associated with certain investments within
its towing and recovery equipment segment. This evaluation indicated that the
recorded amounts of goodwill for certain of these investments were not fully
recoverable. Impairment charges of $1,480,000 were recorded to reduce the
carrying amounts of the goodwill to estimated fair value at December 31,
2001.  The Company recorded $1,113,000,
$1,637,000 and $1,770,000 of additional costs related to the write-down of the
carrying value of other long-lived assets of its towing and recovery equipment
segment for the years ended December 31, 2003 and 2002 and the eight months
ended December 31, 2001.

F-22

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---

In accordance with SFAS
No. 121 and APB No. 17, the Company wrote-off goodwill and long-lived assets of
$3,250,000 associated with the towing and recovery equipment segment as of
December 31, 2001.  Additionally, during
the eight months ended December 31, 2001, the Company wrote-off goodwill and
long-lived assets associated with the towing services segment of
$13,422,000.  Management believes its
long-lived assets are appropriately valued following the impairment charges.

7.          GOODWILL
AND OTHER LONG-LIVED ASSETS

In June 2001, the FASB
issued SFAS No. 141, Business Combinations and SFAS No. 142, Goodwill and
Other Intangible Assets (collectively the Standards). The Standards were
effective for fiscal years beginning after December 15, 2001. Companies with
fiscal years beginning after March 15, 2001 could early adopt, but only as of
the beginning of that fiscal year and only if all existing goodwill was
evaluated for impairment by the end of that fiscal year. SFAS No. 141 requires
companies to recognize acquired identifiable intangible assets separately from
goodwill if control over the future economic benefits of the asset results from
contractual or other legal rights or the intangible asset is capable of being
separated or divided and sold, transferred, licensed, rented, or exchanged. The
Standards require the value of a separately identifiable intangible asset
meeting any of the criteria to be measured at its fair value. SFAS No. 142
requires that goodwill not be amortized and that amounts recorded as goodwill
be tested for impairment. Annual impairment tests have to be performed at the
lowest level of an entity that is a business and that can be distinguished,
physically and operationally and for internal reporting purposes, from the
other activities, operations, and assets of the entity.

Upon adoption of SFAS No.
142 in January 2002, the Company ceased to amortize goodwill. In lieu of
amortization, the Company is required to perform an initial impairment review
of goodwill in 2002 and an annual impairment review thereafter. As a result of impairment reviews, the Company wrote-off
goodwill of $2,886,000 in the towing equipment segment and $18,926,000 in the
towing services segment during the year ended December 31, 2002. The write-off
has been accounted for as a cumulative effect of change in accounting principle
to reflect application of the new accounting standards.

Had
the Company applied the non-amortization of goodwill provisions of SFAS No. 142
in the eight months ended December 31, 2001, and the year ended April 30, 2001
reported net loss and basic and diluted loss per share would have been as
follows (in thousands):

F-23

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|                                 |  | December 31, 2001 |   | April 30, 2001 |  
|-------------------------------- |  | ----------------- | - | -------------- | -
|                                 |  |                   |   |                |  
|                                 |  |                   |   |                |  
|Net loss:                        |  |                   |   |                |  
|As reported                      |  |                   | $ | (21,587        | )
|Goodwill amortization            |  |                   |   |                |  
|Continuing
  operations          |  |                   |   | 602            |  
|Discontinued
  operations        |  |                   |   | 421            |  
|                                 |  |                   |   |                |  
|Pro forma loss                   |  |                   | $ | (20,564        | )
|                                 |  |                   |   |                |  
|                                 |  |                   |   |                |  
|Basic loss per share             |  |                   |   |                |  
|As reported                      |  |                   | $ | (2.31          | )
|Goodwill amortization            |  |                   |   |                |  
|Continuing
  operations          |  |                   |   | 0.06           |  
|Discontinued
  operations        |  |                   |   | 0.05           |  
|                                 |  |                   |   |                |  
|Pro forma basic loss per share   |  |                   | $ | (2.20          | )
|                                 |  |                   |   |                |  
|                                 |  |                   |   |                |  
|Diluted loss per share           |  |                   |   |                |  
|As reported                      |  |                   | $ | (2.31          | )
|Goodwill amortization            |  |                   |   |                |  
|Continuing
  operations          |  |                   |   | 0.06           |  
|Discontinued
  operations        |  |                   |   | 0.05           |  
|                                 |  |                   |   |                |  
|Pro forma diluted loss per share |  |                   | $ | (2.20          | )
|                                 |  |                   |   |                |  

8.          LONG-TERM
OBLIGATIONS AND LINE OF CREDIT

Long-Term Obligations

Long-term
obligations consisted of the following for continuing operations at December 31,
2003 and 2002 (in thousands):

|                                                                                                                                    |  | December
  31, |       
|----------------------------------------------------------------------------------------------------------------------------------- |  | -------------- | ------
|                                                                                                                                    |  |                |       
|                                                                                                                                    |  | 2003           |       
|                                                                                                                                    |  |                |       
|Outstanding borrowings under Senior Credit
     Facility                                                                            |  | $              | 13,448
|Outstanding borrowings under Junior Credit
     Secured Facility                                                                    |  |                | 16,743
|Mortgage notes payable, weighted average
     interest rate of 4.40%, payable in monthly
     installments, maturing 2004 to 2011   |  |                | 1,304 
|Equipment notes payable, weighted average
     interest rate of 12.51%, payable in monthly
     installments, maturing 2004 to 2005 |  |                | 349   
|Other notes payable, weighted average interest
     rate of 5.56%, payable in monthly installments,
     maturing 2004 to 2006      |  |                | 133   
|                                                                                                                                    |  |                |       
|                                                                                                                                    |  |                | 31,977
|Less current portion                                                                                                                |  |                | (2,050
|                                                                                                                                    |  |                |       
|                                                                                                                                    |  | $              | 29,927
|                                                                                                                                    |  |                |       

The
December 31, 2003 and 2002 figures do not include $10.4 million and $22.7
million, respectively, outstanding under the Senior Credit Facility relating to
discontinued operations.  Obligations
under the Senior Credit Facility are allocated to discontinued operations based
on the assets used to determine

F-24

---

---

borrowing
availability for collateral reporting. 
Certain equipment and manufacturing facilities are pledged as collateral
under the mortgage and equipment notes payable.

2001 Credit Facility

Senior Credit Facility.  In July
2001, the Company entered into a new four year Senior Credit Facility (the
Senior Credit Facility) with a syndicate of lenders to replace the existing
credit facility. As part of this agreement, the previous credit facility was
reduced with proceeds from the Senior Credit Facility and amended to provide
for a $14.0 million subordinated secured facility. The Senior Credit Facility
originally consisted of an aggregate $102.0 million revolving credit facility
and an $8.0 million term loan. The revolving credit facility provides for
separate and distinct loan commitment levels for the Companys towing and
recovery equipment segment and RoadOne segment, respectively. At December 31,
2003, $6.4 million and $0.5 million, respectively were outstanding under the
towing and recovery equipment segment and RoadOne portions of the revolving
credit facility. In addition, $17.0 million was outstanding under the senior
term loan, and $16.7 million was outstanding under the subordinated secured
facility.

The Senior Credit
Facility has been amended several times, including most recently on December
24, 2003 in connection with the restructuring of all of the Companys debt
obligations.  As amended, the Senior
Credit Facility consists of an aggregate $32.0 million credit facility,
including a $15.0 million revolving loan, a $5.0 million term loan and a $12.0
million term loan.  Borrowing
availability under the revolving Senior Credit Facility is based on a
percentage of eligible inventory and accounts receivable (determined on
eligibility criteria set forth in the credit facility) and subject to a maximum
borrowing limitation.  Borrowings under
the term loans are collateralized by substantially all of the Companys
property, plant, and equipment.  The
Company is required to make monthly amortization payments on the first term
loan of $167,000, but the amortization payments due on November 1, 2003,
December 1, 2003, and January 1, 2004 were deferred until the maturity
date.  The Senior Credit Facility bears
interest at the prime rate (as defined) plus 2.75%, subject to the rights of
the senior lender agent or a majority of the lenders to charge a default rate
equal to the prime rate (as defined) plus 4.75% during the continuance of any
event of default under the Senior Credit Facility.

The Senior Credit
Facility matures in July 2005. The Senior Credit Facility contains requirements
relating to maintaining minimum excess availability at all times and minimum
quarterly levels of earnings before income taxes, depreciation and amortization
(as defined) and a minimum quarterly fixed charge coverage ratio (as defined).
In addition, the Senior Credit Facility contains restrictions on capital
expenditures, incurrence of indebtedness, mergers and acquisitions,
distributions and transfers and sales of assets. The Senior Credit Facility
also contains requirements related to weekly and monthly collateral reporting.

Junior
Credit Facility.  The
$14.0 million Junior Credit Facility (the Junior Credit Facility) is by its
terms expressly subordinated only to the Senior Credit Facility.  The Junior Credit Facility is secured by
certain specified assets and by a second priority lien and security interest in
substantially all of the Companys other assets.  The Junior Credit Facility contains requirements for certain fees
to be paid at six month intervals beginning in January 2002 based on the
outstanding balance of the facility at the time.  The Junior Credit Facility also contains provisions for the issuance
of warrants for 0.5% of the outstanding shares of the Companys common stock
(47,417 shares) in July 2002 and an additional 1.5% (138,611 shares) on July
23, 2003 with an exercise price equal to the then fair market value of the
Companys common stock.  As amended, the
Junior Credit Facility contains requirements for the maintenance of certain
financial covenants.  It also imposes
restrictions on capital expenditures, incurrence of indebtedness, mergers and
acquisitions, distributions and transfers and sales of assets.

F-25

---

---

Contrarian Funds, LLC
purchased all of the outstanding debt of the Junior Credit facility in a series
of transactions during the second half of 2003.  As part of its purchase of the subordinated debt, Contrarian also
purchased warrants, or the rights to receive warrants, to purchase 186,028
shares of the Companys common stock.

On November 24, 2003,
Harbourside Investments, LLLP (Note 9) purchased from Contrarian 44.286% of the
subordinated debt and the warrants.

The Junior Credit
Facility originally matured on July 23, 2003. 
In connection with the restructuring of the Companys debt, the facility
has been amended.  As amended, the
Junior Credit Facility, under which $16.7 million in principal, interest and
fees was outstanding at December 31, 2003, matures on July 31, 2005 and bears
interest at an effective blended rate of 14.0%.

Default
of Credit Facilities. 
The Companys failure to repay all outstanding principal, interest and
any other amounts due and owing under the Junior Credit Facility at its
original July 23, 2003 maturity date constituted an event of default under the
Junior Credit Facility and also triggered an event of default under the Senior
Credit Facility cross-default provisions. 
Additionally, the Company was in default of the EBITDA covenant under
the Junior Credit Facility only for the first quarter of calendar 2003.  The Company was also in default under both
the Senior and Junior Credit Facility as a result of the going concern
explanatory paragraph included in the auditors report as well as the failure
to file its Annual Report for the fiscal year ended December 31, 2002 prior to
April 30, 2003.

Pursuant to the terms of
the intercreditor agreement between the senior and junior lenders, the junior
lender agent and the junior lenders were prevented from taking any enforcement
action or exercising any remedies against the Company, its subsidiaries or its
respective assets as a result of such events of default during a standstill
period.  On July 29, 2003, the junior
lender agent gave a notice of enforcement to the senior lender agent based upon
the event of default for failure to repay the outstanding obligations under the
Junior Credit Facility on the Junior Credit Facilitys maturity date.  On August 5, 2003, the senior agent gave a
payment blockage notice to the junior agent based upon certain events of
default under the Senior Credit Facility, thereby preventing the junior agent
and junior lenders from receiving any payments from the Company in respect of
the Junior Credit Facility while such blockage notice remains in effect.

2002
Amendments

The Company was in an
over-advance position under its credit facility during the first quarter of
2002. On February 28, 2002 the Company entered into a Forbearance Agreement and
First Amendment to its Senior Credit Agreement with the lenders under the
Senior Credit Facility, as amended by that certain Amendment to Forbearance
Agreement dated as of March 18, 2002 and that certain Second Amendment to the
Forbearance Agreement dated as of March 29, 2002 (as so amended, the
Forbearance Agreement). As a result of a revised asset appraisal conducted by
the senior lenders, the senior lenders determined that the amounts outstanding
under the Senior Credit Facility should be lowered below the amount then
outstanding under the Senior Credit Facility, causing the Company to be
over-advanced on its line of credit which resulted in the occurrence of an
event of default under the Senior Credit Facility and a corresponding event of
default under the Junior Credit Facility. The Forbearance Agreement and
subsequent amendments waived the Companys overadvance under the Senior Credit
Facility and amended the terms of the credit agreement to, among other things,
(i) permanently reduce the commitment levels to $42.0 million for the towing
and recovery equipment segment and $36.0 million for the RoadOne segment
portion of the revolving credit facility and $6,611,000 for the term loan
facility, (ii) eliminate the Companys ability to borrow funds at a LIBOR rate
of interest, and (iii) increase the interest rate to a floating rate of
interest equal to the prime rate plus 2.75%.

F-26

---

---

On April 15, 2002 the
Company amended the Senior Credit Facility, pursuant to which, among other
things: (i) the senior lenders waived the overadvance event of default and
other events of default, (ii) interest on advances will be charged at the prime
rate (as defined) plus 2.75% on the revolving portion and the term portion,
subject to substantial upward adjustments in
the interest rate on and after certain specified dates based on the amounts
outstanding under the revolving loan commitment relating to RoadOne (escalating
at generally quarterly intervals from prime plus 4.50% as of October 1, 2002 to
prime plus 14.00% as of April 1, 2005) and (iii) the revolving loan commitment
amount relating to RoadOne is subject to mandatory reductions over time
commencing August 12, 2002, which reductions will require a mandatory repayment
of portions of outstanding loans at specified dates and the failure to timely
make such repayments shall result in an event of default under the bank credit
agreements. The RoadOne revolving commitment amount, which was set at $36.0
million through the April 15, 2002 amendment, is scheduled to be reduced as
follows: August 12, 2002- to $34.0 million; October 2, 2002 - to $30.0 million;
March 31, 2003 - to $27.0 million; thereafter- quarterly reductions of $3.0
million through June 30, 2005. On April 15, 2002 the Company also amended the
Junior Credit Facility, pursuant to which, among other things, (i) the junior
lenders waived the events of default, and (ii) extended the time for payment of
certain scheduled amortization payments. On April 15, 2002, the junior lender
agent, the senior lender agent and the Company entered into an Amended and
Restated Intercreditor and Subordination Agreement, pursuant to which, among
other things, subject to certain terms and conditions, the junior lenders have
agreed to defer the required payment of amortization payments under the Junior
Credit Facility until November 20, 2002, April 5, 2003 and May 20, 2003.

On
September 13, 2002, the Company entered into the Third Amendment to the Senior
Credit Facility.  Pursuant to the Third
Amendment, the amount of the mandatory periodic reductions in the RoadOne
revolving loan commitment amount, as established in the April 15, 2002 Second
Amendment to Senior Credit Agreement, were increased by amounts calculated
based on updated asset appraisals completed in September 2002.  Consequently, the Company will need to repay
outstanding loans and permanently reduce the RoadOne loan commitment under its
Senior Credit Facility over the life of the loan and prior to the maturity
date.  Pursuant to the terms of the
Second and Third Amendments, the failure by the Company to repay outstanding
loans and to reduce the RoadOne revolving loan commitment by the amounts and
the times required pursuant to these amendments will result in increased
interest rates on the senior loans and/or the occurrence of an event of default
under the Senior Credit Facility.

In
addition, pursuant to the Third Amendment, the amount of availability that can
be generated for used inventory considered as eligible inventory for collateral
purposes was limited to $4.3 million (subject to downward adjustments upon
certain sales of sales of assets and stock by the Company and certain of its
subsidiaries) through February 28, 2003 and reduced to $0 thereafter.  The Sixth Amendment (discussed below 2003
Amendments) lowered the $4.3 million limit and eliminated the further
requirement for reduction to $0 after February 28, 2003.

On
November 14, 2002, the Company entered into the Fourth Amendment to the Senior
Credit Facility, which granted waivers from the Senior Lenders of violations of
certain financial covenants for the quarter ended September 2002. There were no
violations under the Junior Credit Facility. The Amendment also reduced the
level of certain financial covenants for future periods, basing them strictly
on the results of the towing and recovery equipment segment for those periods.
In addition, the amendment revised the Road One revolving commitment amount
based on the plan to sell all remaining towing service operations, reducing the
commitment amount to $15.0 million at November 30, 2002, $12.0 million at
December 31, 2002, $9.0 million at January 31, 2003, $6.0 million at February
28, 2003 and reducing to zero as of March 31, 2003.

F-27

---

---

2003 Amendments

On
February 28, 2003, the Company entered into the Fifth Amendment to the Senior
Credit Facility.  Pursuant to the Fifth
Amendment, the date upon which the amount of certain used inventory taken in
trade for collateral purposes is reduced to $-0- was extended from February 28,
2003 to March 31, 2003.  In addition,
the Fifth Amendment revised the RoadOne revolving commitment reducing the
amount to $9.0 million at February 28, 2003 and $-0- as of March 31, 2003.

On April 1, 2003, the Company entered into the Sixth Amendment to Senior Credit Facility. 
The Sixth Amendment, among other things, revised the RoadOne revolving commitment, extending the time for
the reduction thereof to $-0- from March 31, 2003 to March 31, 2004.  The amount of availability that can be generated for used inventory considered as eligible inventory for collateral purposes
was reduced to $2.7 million with no further required reductions.

Subsequent
to April 1, 2003, the Company was in default under certain covenants under its
Senior and Junior Credit Facility agreements. 
Accordingly, amounts outstanding under these Facilities are presented as
current liabilities in the accompanying December 31, 2002 consolidated balance
sheet.  The Companys bank
facilities are collateralized by liens on all of the Companys assets. The
liens give the lenders the right to foreclose on the assets of the Company
under certain defined events of default and such foreclosure could allow the
lenders to gain control of the operations of the Company.

On October 31, 2003, the
Company entered into a forbearance agreement with the lenders and the senior
lender agent under the Senior Credit Facility, pursuant to which, among other
things, the senior lenders agreed to forbear from exercising any remedies in
respect of the defaults then existing under the Senior Credit Facility as a
result of (i) the failure to timely deliver financial statements for fiscal
year 2002 and the failure to deliver a report of the Companys independent
certified public accountants which is unqualified in any respect, as well as
the event of default under the Senior Credit Facility caused by the event of
default arising from such failure under the Junior Credit Facility; (ii) the
failure to fulfill certain payment obligations to the junior lenders under the
Junior Credit Facility; and (iii) the failure to fulfill certain financial
covenants in the Junior Credit Facility for one or more of the fiscal quarters
ending in fiscal year 2003, which failure would constitute an event of default
under the Senior Credit Facility.  The
forbearance period under the forbearance agreement was to expire on the earlier
of (x) December 31, 2003, (y) the occurrence of certain bankruptcy type events
in respect of the Company or any of its subsidiaries, and (z) the failure by
the Company or any of its subsidiaries that are borrower parties under the
Senior Credit Facility to perform the obligations under the Senior Credit
Facility or the forbearance agreement. 
Under the forbearance agreement, the senior lenders and the senior lender
agent did not waive their rights and remedies with respect to the existing
senior facility defaults, but agreed to forbear from exercising rights and
remedies with respect to the existing senior facility defaults solely during
the forbearance period.

Simultaneous with
entering into the forbearance agreement on October 31, 2003, William G. Miller,
the Chairman of the Board and Co-CEO of the Company, made a $2.0 million loan
to the Company as a part of the Senior Credit Facility.  The loan to the Company and Mr. Millers
participation in the Senior Credit Facility were effected by the seventh
amendment to the credit agreement and a participation agreement between Mr.
Miller and the Senior Credit Facility lenders.

On December 24, 2003, Mr.
Miller increased his previous $2.0 million participation in the existing Senior
Credit Facility by an additional $10.0 million.  These funds, along with additional funds from The CIT
Group/Business Credit, Inc., were used to satisfy the obligations to two of the
existing senior lenders with the result being that CIT, an existing senior
lender, and Mr. Miller constituted the senior lenders to the

F-28

---

---

Company, with CIT holding
62.5% of such loan and Mr. Miller participating in 37.5% of the loan.  Mr. Millers portion of the loan is
subordinated to that of CIT.

In conjunction with Mr.
Millers increased participation, the Senior Credit Facility was restructured
and restated as a $15.0 million revolving facility and $12.0 million and $5.0
million term loans.  As a result of this
restructuring, all previously existing defaults under the Senior Credit
Facility were waived, the interest rate was lowered by 2% to reflect a
non-default rate, fees attributable to RoadOne of $30,000 per month were
eliminated, the financial covenants were substantially relaxed, and availability
under the Facility was increased by approximately $5.0 million.  The senior lending group, consisting of CIT
and Mr. Miller, earned fees of $850,000 in connection with the restructuring,
including previously unpaid fees of $300,000 for the earlier forbearance
agreement through December 31, 2003 and $550,000 for the restructuring of the
loans described above.  Of these fees,
37.5% ($318,750) were paid to Mr. Miller and the remainder ($531,250) were paid
to CIT.  In addition, the Company will
pay additional interest at a rate of 1.8% on Mr. Millers portion of the loan,
which is in recognition of the fact that Mr. Millers rights to payments and
collateral are subordinate to those of CIT. 
This transaction was approved by the Special Committee of the Board, as
well as the full Board of Directors with Mr. Miller abstaining due to his
personal interest in the transaction.

In order to enter into
this restructuring  of the Senior Credit
Facility, CIT required that the junior lenders agree to extend the standstill
and payment blockage periods, which were to expire at the end of April 2004,
until July 31, 2005, which is after the July 23, 2005 maturity of the senior
debt.  The junior facility lenders were
unwilling to extend such standstill and payment blockage dates without  the conversion provisions described above
having been committed to by the Company, subject only to shareholder approval
of the conversion by Harbourside.  As a result,
the restructuring of the senior debt facility and the conversion and exchange
of subordinated debt and warrants described above were cross-conditioned upon
each other and agreements effecting them were entered into simultaneously on
December 24, 2003.

To effectuate the
conversion and exchange of the subordinated debt and warrants, the Company
entered into a Binding Restructuring Agreement with Contrarian and Harbourside
on December 24, 2003.  Pursuant to this
agreement, Contrarian and Harbourside agreed to an exchange transaction where
they would extend the maturity date of 70% of the outstanding principal amount
of the junior debt, approximately $9.75 million, convert the remaining 30% of
the outstanding principal, plus all accrued interest and fees, into the
Companys common stock and convert the warrants into the Companys common
stock.  This agreement contemplated that
the conversions would be further documented in separate exchange agreements and
also contemplated registration rights agreements.  The Binding Restructuring Agreement also outlined the terms for
amending the Junior Credit Facility to extend its maturity date to July 31,
2005 (which is after the July 23, 2005 maturity date of the Senior Credit
Facility), to provide for an interest rate on the remaining debt of Contrarian
at 18% and the remaining debt of Harbourside at a reduced rate (which was
ultimately agreed to be 9%), to provide for financial covenants that match
those of the Senior Credit Facility and to make other amendments to the Junior
Credit Facility consistent with amendments made to the Senior Credit Facility
as it was amended on December 24, 2003. 
The disparity in the interest rates to be earned by Contrarian and
Harbourside is caused by Contrarian negotiating an interest rate of 18% as a
condition to it entering into the Binding Restructuring Agreement, as a result
of which Harbourside agreed to reduce the rate to be received by it to 9% so
that the Company would continue to pay an effective blended interest rate of
14% on the aggregate of the subordinated debt following the exchange
transactions.  At the same time,
Contrarian and Harbourside entered into an agreement with the senior lenders to
extend the maturity date of the subordinated debt that they would continue to
hold.

As of January 14, 2004,
the Company entered into separate exchange agreements with Contrarian and
Harbourside, a registration rights agreement with Contrarian and Harbourside
and an amendment to the

F-29

---

---

Junior Credit Facility
with Contrarian and Harbourside, all as contemplated in the Binding
Restructuring Agreement.  Additional
details regarding the specific terms of the exchange agreements can be found
under the heading Recent Developments and Related Party Transactions.  Under the amendment to the Junior Credit
Facility, the maturity of the remaining subordinated debt was extended and the
interest rates thereon were altered and the financial covenants were amended to
match those in the Senior Credit Facility, which had been substantially relaxed
in the Companys favor on December 24, 2003.

Future maturities of
long-term obligations at December 31, 2003 are as follows (in thousands):

|           |  | Continuing Operations |   | Discontinued Operations |  | Total | 
|---------- |  | --------------------- | - | ----------------------- |  | ----- | 
|           |  |                       |   |                         |  |       | 
|2004       |  |                       | $ | 2,050                   |  |       | 
|2005       |  |                       |   | 29,307                  |  |       | 
|2006       |  |                       |   | 142                     |  |       | 
|2007       |  |                       |   | 107                     |  |       | 
|2008       |  |                       |   | 110                     |  |       | 
|Thereafter |  |                       |   | 261                     |  |       | 
|           |  |                       |   |                         |  |       | 
|           |  |                       | $ | 31,977                  |  |       | 
|           |  |                       |   |                         |  |       | 

9.          RELATED
PARTY TRANSACTIONS

Subordinated
Debt and Warrant Conversion

Harbourside Investments
LLLP is a limited liability limited partnership of which several of the
Companys executive officers and directors are partners.  Specifically, William G. Miller is the
general partner of, and controls, Harbourside. 
Mr. Miller is the Companys Chairman of the Board and Co-Chief Executive
Officer, as well as the holder of approximately 16% of the Companys
outstanding common stock.  Mr. Miller,
Jeffrey I. Badgley, the Companys President and Co-Chief Executive Officer, J.
Vincent Mish, the Companys Executive Vice President and Chief Financial
Officer, and Frank Madonia, the Companys Executive Vice President, Secretary
and General Counsel, are all limited partners in Harbourside.  In connection with the formation of
Harbourside, Mr. Miller made loans to the other executive officers, the
proceeds of which the other executive officers then contributed to
Harbourside.  These loans from Mr.
Miller to the other executive officers are secured by pledges of their
respective limited partnership interests to Mr. Miller.

As partners of
Harbourside, each of Messrs. Miller, Badgley, Mish and Madonia indirectly
received shares of common stock in exchange for the subordinated debt and
warrants held by Harbourside.  As
general partner of Harbourside, Mr. Miller has sole voting power over the
shares of common stock that Harbourside received in the exchange.  This transaction was approved by the Special
Committee of the Board, as well as the full Board of Directors with Messrs.
Miller and Badgley abstaining due to their personal interest in the
transaction.  The transaction was
subsequently approved by the Companys shareholders at a meeting on February
12, 2004.  Other than the exchange, the
Company has not engaged in any transactions with Harbourside.  Neither the Company nor Harbourside
currently intend to engage in any other transactions in the future except as
may be related to Harboursides continuing ownership of a portion of the
subordinated debt.

On November 24, 2003,
Harbourside purchased from Contrarian 44.286% of (1) the subordinated debt and
(2) the warrants to purchase 186,028 shares of the Companys common stock.  Contrarian had previously purchased all of
the Companys outstanding subordinated debt in a series of transactions during
the second half of 2003.  As a result of
this transaction,  Harbourside acquired
(1) approximately

F-30

---

---

$6.13 million of the
outstanding principal of subordinated debt plus accrued interest and fees
attributable to this outstanding principal and (2) warrants to purchase an
aggregate of 82,382 shares of the Companys common stock, consisting of
warrants to purchase up to 20,998 shares at an exercise price of $3.48 and
61,384 shares at an exercise price of $3.27. 
Contrarian retained the remaining principal outstanding under the Junior
Credit Facility, which is approximately $7.72 million, plus related interest
and fees thereon of approximately $1.65 million, and the remaining warrants to
purchase 103,646 shares of common stock.

On January 14, 2004, the
Company entered into an exchange agreement with Harbourside, pursuant to which
it later issued 583,556 shares of the Companys common stock upon shareholder
approval in exchange for approximately $1.8 million principal amount of, plus
approximately $1.32 million of accrued interest and fees on, the outstanding
subordinated debt and warrants to purchase 82,382 shares of the the Companys
common stock.

Under the Exchange
Agreement, Harbourside retained 70% of the outstanding principal amount of the
subordinated debt that it held and converted the remaining 30% of the
outstanding principal amount of such debt plus all accrued interest and
commitment fees thereunder into shares of the Companys common stock.  Immediately prior to entering into the
Exchange Agreement, Harbourside held approximately $7.45 million of the
Companys subordinated debt, consisting of approximately $6.13 million of
outstanding principal and approximately $1.32 million of accrued interest and
fees.  Harbourside continues to hold
approximately $4.29 million principal amount of subordinated debt and converted
approximately $3.16 million of the subordinated debt (30% of $6.13 million
principal amount, plus approximately $1.32 million of accrued interest and
fees) into 548,738 shares of the Companys common stock.  In addition, Harbourside received 34,818
shares of the Companys common stock in exchange for the warrants to purchase
82,382 shares of the Companys common stock.

The subordinated debt was
originally issued pursuant to that certain Amended and Restated Credit
Agreement, dated July 23, 2001, as amended, by and among the Company and Miller
Industries Towing Equipment, Inc., a Delaware corporation and Bank of America,
N.A. in its capacity as a lender, and certain other financial institutions.  This Junior Credit Facility and the notes
issued pursuant to it are subordinate to the Senior Credit Facility which was
also entered into on July 23, 2001.  The
subordinated debt had an original aggregate principal amount of $14.0 million
bearing interest at the prime rate plus 6.0% per annum and at the time of
Contrarians purchases had an outstanding principal amount of approximately
$13.9 million bearing interest at the default rate of 14% per annum.  The original maturity date of the
subordinated debt was July 23, 2003. 
The total amount outstanding on the subordinated debt as of January 14,
2004, including accrued interest and commitment fees, was approximately $16.8
million with an interest rate of 14% per annum continuing to apply.

As a part of its purchases
of the subordinated debt, Contrarian also purchased warrants, or the rights to
receive warrants, to purchase 186,028 shares of the Companys common
stock.  The Company issued these
warrants to the initial lenders under the Junior Credit Facility pursuant to a
Warrant Agreement, dated July 23, 2001, by and among the Company and the
initial lenders.  The 186,028 total
consists of warrants issued in July 2002 for the purchase of 47,417 shares of
the Companys common stock at an exercise price of $3.48 and warrants issued in
October 2003 for 138,611 shares of common stock at an exercise price of
$3.27.  Other than these transactions
relating to the subordinated debt and the warrants, which it purchased without the
Companys involvement, Contrarian has no relationship with the Company or
Harbourside.

Senior
Credit Facility

Simultaneously with
entering into a forbearance agreement on October 31, 2003 with respect to the
Senior Credit Facility, Mr. Miller made a $2.0 million loan to the Company as a
part of the Senior Credit

F-31

---

---

Facility.  The loan to the Company and Mr. Millers
participation in the Senior Credit Facility were effected by an amendment to
the credit agreement and a participation agreement between Mr. Miller and the
Senior Credit Facility lenders.

On December 24, 2003, Mr.
Miller increased his $2.0 million participation in the existing Senior Credit
Facility by an additional $10.0 million. 
These funds, along with additional funds from The CIT Group/Business Credit,
Inc.,  were used to satisfy the
Companys obligations to two of the existing senior lenders with the result
being that CIT, an existing senior lender, and Mr. Miller constituted the
senior lenders to the Company, with CIT holding 62.5% of such loan and Mr.
Miller participating in 37.5% of the loan. 
Mr. Millers portion of the loan is subordinated to that of CIT.

In conjunction with Mr.
Millers increased participation, the Senior Credit Facility was restructured
and restated as a $15.0 million revolving facility and $12.0 million and $5.0
million term loans.  The senior lending
group, consisting of CIT and Mr.Miller, earned fees of $850,000 in connection
with the restructuring, including previously unpaid fees of $300,000 for the
earlier forbearance agreement through December 31, 2003 and $550,000 for the
restructuring of the loans described above. 
Of these fees, 37.5% ($318,750) were paid to Mr. Miller and the
remainder ($531,250) were paid to CIT. 
In addition, the Company will pay additional interest at a rate of 1.8%
on Mr. Millers portion of the loan, which is in recognition of the fact that
Mr. Millers rights to payments and collateral are subordinate to those of
CIT.  This transaction was approved by
the Special Committee of the Board, as well as the full Board of Directors with
Mr. Miller abstaining due to his personal interest in the transaction.

10.          
FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES

SFAS No. 133 Accounting
for Derivative Instruments and Hedging Activities, establishes accounting and
reporting standards requiring that every derivative instrument (including
certain derivatives embedded in other contracts) be recorded in the balance
sheet as either an asset or liability measured at its fair value. SFAS No. 133
requires that changes in the derivatives fair value be recognized currently in
earnings unless specific hedge criteria are met. Special accounting for
qualifying hedges allows a derivatives gains and losses to offset related
results on the hedged item on the income statement, and requires that the
Company must formally document, designate, and assess the effectiveness of
transactions that receive hedge accounting.

In October 2001, the
Company obtained interest rate swaps as required by terms in its Senior Credit
Facility to hedge exposure to market fluctuations. The interest rate swaps
cover $40.0 million in notional amounts of variable rate debt and with fixed
rates ranging from 2.535% to 3.920%. The swaps expire annually from October
2002 to October 2004. Because the Company hedges only with derivatives that
have high correlation with the underlying transaction pricing, changes in
derivatives fair values and the underlying pricing largely offset. The hedges
were deemed to be fully effective resulting in a pretax loss of $12,000
recorded in Other Comprehensive Loss at December 31, 2001. Upon expiration of
these hedges, the amount recorded in Other Comprehensive Loss will be
reclassified into earnings as interest. 
Subsequent to year end December 31, 2001, the borrowing base was
converted from LIBOR to prime, which rendered the swap ineffective as a
hedge.  Accordingly, concurrent with the
conversion, the Company prematurely terminated the swap in February 2002 at a
cost of $341,000. The resulting loss was recorded in Other Comprehensive Loss
in February 2002 and is being reclassified to earning as interest expense over
the term of the Senior Credit Facility.

As described in Note 8,
the Junior Credit Facility contains provisions for the issuance of warrants of
up to 0.5% of the outstanding shares of the Companys common stock on July 2002
and up to an additional 1.5% in July 2003. 
The warrants were valued as of July 2001 based on the estimated relative
fair value using the Black Scholes model with the following assumptions:  risk-free rate of 4.9% estimated life of 7

F-32

---

---

years, 72% volatility and
no dividend yield.  Accordingly, the
Company has recorded a liability and makes periodic mark to market adjustments,
which are reflected in the accompanying consolidated statement of operations in
accordance with EITF Issue 00-19, Accounting for Derivative Financial
Instruments Indexed to, and Potentially Settled in, a Companys Own
Stock.  At December 31, 2003, the
related liability was $349,000 and is included in accrued liabilities in the
accompanying consolidated financial statements.

As described in Note 9 
Related Party Transactions, subsequent to December 31, 2003, the warrants were
exchanged for shares of the Companys common stock and are no longer
outstanding.

11.          STOCK-BASED
COMPENSATION PLANS

In accordance with the
Companys stock-based compensation plans, the Company may grant incentive stock
options as well as non-qualified and other stock-related incentives to
officers, employees, and non-employee directors of the Company. Options vest
ratably over a two to four-year period beginning on the grant date and expire
ten years from the date of grant. Shares available for granting options at
December 31, 2003, 2002 and 2001 were approximately 0.5 million, 0.5 million
and 0.4 million, respectively.

A summary of the activity
of stock options for the years ended December 31, 2003 and 2002, the eight
months ended December 31, 2001 and the year ended April 30, 2001 is presented
below (shares in thousands):

F-33

---

---

|                                                 |  | December 31, 2003       |     | December 31, 2002                     |   | December 31, 2001       |  | April 30, 2001                        |     
|------------------------------------------------ |  | ----------------------- | --- | ------------------------------------- | - | ----------------------- |  | ------------------------------------- | ----
|                                                 |  |                         |     |                                       |   |                         |  |                                       |     
|                                                 |  | Shares
  Under
  Option |     | Weighted
  Average
  Exercise
  Price |   | Shares
  Under
  Option |  | Weighted
  Average
  Exercise
  Price |     
|                                                 |  |                         |     |                                       |   |                         |  |                                       |     
|Outstanding at Beginning of Period               |  |                         | 761 |                                       | $ | 19.58                   |  |                                       | 948 
|Granted                                          |  |                         |    |                                       |   |                        |  |                                       | 28  
|Exercised                                        |  |                         | (1  | )                                     |   | 3.05                    |  |                                       |    
|Forfeited and cancelled                          |  |                         | (15 | )                                     |   | 5.02                    |  |                                       | (215
|                                                 |  |                         |     |                                       |   |                         |  |                                       |     
|Outstanding at End of Period                     |  |                         | 745 |                                       | $ | 19.90                   |  |                                       | 761 
|                                                 |  |                         |     |                                       |   |                         |  |                                       |     
|                                                 |  |                         |     |                                       |   |                         |  |                                       |     
|Options exercisable at year end                  |  |                         | 714 |                                       | $ | 20.64                   |  |                                       | 648 
|                                                 |  |                         |     |                                       |   |                         |  |                                       |     
|                                                 |  |                         |     |                                       |   |                         |  |                                       |     
|Weighted average fair value of
  options granted |  |                         |     |                                       |   |                        |  |                                       |     

A summary of options
outstanding under the Companys stock-based compensation plans at December 31,
2003 is presented below (shares in thousands):

|Exercise
  Price Range |   | Shares
  Under
  Option |  | Weighted Average
  Exercise Price of
  Options
  Outstanding |     | Weighted
  Average
  Remaining
  Life |  | Options
  Exercisable |       | Weighted
  Average
  Exercise Price of
  Shares Exercisable | 
|---------------------- | - | ----------------------- |  | ------------------------------------------------------------ | --- | ------------------------------------- |  | --------------------- | ----- | ----------------------------------------------------------- | 
|                       |   |                         |  |                                                              |     |                                       |  |                       |       |                                                             | 
|$  3.05                | - | $  3.37                 |  |                                                              | 110 |                                       |  | $                     | 3.13  |                                                             | 
|4.60                   | - | 5.03                    |  |                                                              | 37  |                                       |  |                       | 4.61  |                                                             | 
|7.01                   | - | 8.13                    |  |                                                              | 35  |                                       |  |                       | 7.07  |                                                             | 
|10.62                  | - | 15.94                   |  |                                                              | 226 |                                       |  |                       | 11.50 |                                                             | 
|16.85                  | - | 25.00                   |  |                                                              | 161 |                                       |  |                       | 19.43 |                                                             | 
|28.74                  | - | 38.44                   |  |                                                              | 88  |                                       |  |                       | 34.78 |                                                             | 
|43.95                  | - | 64.38                   |  |                                                              | 60  |                                       |  |                       | 54.71 |                                                             | 
|67.49                  | - | 84.06                   |  |                                                              | 28  |                                       |  |                       | 73.45 |                                                             | 
|                       |   |                         |  |                                                              |     |                                       |  |                       |       |                                                             | 
|                       |   | Total                   |  |                                                              | 745 |                                       |  | $                     | 19.90 |                                                             | 
|                       |   |                         |  |                                                              |     |                                       |  |                       |       |                                                             | 

12.          COMMITMENTS
AND CONTINGENCIES

Commitments

The Company has entered
into various operating leases for buildings, office equipment, and trucks.
Rental expense under these leases for continuing operations was $1,928,000,
$2,729,000, $1,986,000 and $2,828,000, for the years ended December 31, 2003
and 2002, the eight months ended December 31, 2001 and the fiscal year ended
April 30, 2001, respectively.  Rental
expense under these leases for discontinued operations was $2,011,000,
$8,153,000, $6,437,000 and $10,925,000, for the years ended December 31, 2003
and 2002, the eight months ended December 31, 2001, and the fiscal year ended
April 30, 2001, respectively.

At December 31, 2003,
future minimum lease payments under non-cancelable operating leases for the
next five fiscal years are as follows (in thousands):

F-34

---

---

|     |  | Continuing
  Operations |   | Discontinued
  Operations |  | Total | 
|---- |  | ----------------------- | - | ------------------------- |  | ----- | 
|     |  |                         |   |                           |  |       | 
|2004 |  |                         | $ | 599                       |  |       | 
|2005 |  |                         |   | 420                       |  |       | 
|2006 |  |                         |   | 297                       |  |       | 
|2007 |  |                         |   | 215                       |  |       | 
|2008 |  |                         |   | 21                        |  |       | 

Contingencies

The Company is, from time
to time, a party to litigation arising in the normal course of its
business.  Litigation is subject to
various inherent uncertainties, and it is possible that some of these matters
could be resolved unfavorably to the Company, which could result in substantial
damages against the Company.  The
Company has established accruals for matters that are probable and reasonably
estimable and maintains product liability and other insurance that management
believes to be adequate.  Management
believes that any liability that may ultimately result from the resolution of
these matters in excess of available insurance coverage and accruals will not
have a material adverse effect on the consolidated financial position or
results of operations of the Company.

13.          INCOME
TAXES

Deferred tax assets and
liabilities are determined based on the differences between the financial and
tax bases of existing assets and liabilities using the currently enacted tax
rates in effect for the year in which the differences are expected to reverse.

The (benefit) provision
for income taxes on income from continuing operations consisted of the
following for the years ended December 31, 2003 and  2002, the eight months ended December 31, 2001 and the year ended
April 30, 2001 (in thousands):

|          |  | December 31, 2003 |   | December 31, 2002 |   | December 31, 2001 |  | April 30, 2001 |      
|--------- |  | ----------------- | - | ----------------- | - | ----------------- |  | -------------- | -----
|          |  |                   |   |                   |   |                   |  |                |      
|          |  |                   |   |                   |   |                   |  |                |      
|Current:  |  |                   |   |                   |   |                   |  |                |      
|Federal   |  |                   | $ | 839               |   |                   |  | $              | (256 
|State     |  |                   |   | 246               |   |                   |  |                | 297  
|Foreign   |  |                   |   | 131               |   |                   |  |                | 533  
|          |  |                   |   |                   |   |                   |  |                |      
|          |  |                   |   | 1,216             |   |                   |  |                | 574  
|          |  |                   |   |                   |   |                   |  |                |      
|Deferred: |  |                   |   |                   |   |                   |  |                |      
|Federal   |  |                   |   | (290              | ) |                   |  |                | 6,620
|State     |  |                   |   | 288               |   |                   |  |                | (177 
|Foreign   |  |                   |   | 2                 |   |                   |  |                | 191  
|          |  |                   |   |                   |   |                   |  |                |      
|          |  |                   |   | -0-               |   |                   |  |                | 6,634
|          |  |                   |   |                   |   |                   |  |                |      
|          |  |                   | $ | 1,216             |   |                   |  | $              | 7,208
|          |  |                   |   |                   |   |                   |  |                |      

The principal differences
between the federal statutory tax rate and the income expense (benefit) from
continuing operations for the years ended December 31, 2003 and 2002, the eight
months ended December 31, 2001, and the year ended April 30, 2001 were as
follows (in thousands):

F-35

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|                                                                      |  | December 31, 2003 |  | December 31, 2002 |    | December 31, 2001 |  | April
  30, 2001 |     
|--------------------------------------------------------------------- |  | ----------------- |  | ----------------- | -- | ----------------- |  | ---------------- | ----
|                                                                      |  |                   |  |                   |    |                   |  |                  |     
|Federal statutory tax rate                                            |  |                   |  | 34.0              | %  |                   |  |                  | 34.0
|State taxes, net of federal
     tax benefit                          |  |                   |  | 4.0               | %  |                   |  |                  | 5.5 
|Non-deductible goodwill
     amortization and
     impairment charges |  |                   |  | 0.0               | %  |                   |  |                  | 0.0 
|Change in deferred tax asset
     valuation allowance                 |  |                   |  | 0.0               | %  |                   |  |                  | 26.1
|Excess of foreign tax over
     US tax on foreign income              |  |                   |  | 0.0               | %  |                   |  |                  | 5.0 
|Other                                                                 |  |                   |  | (1.0              | )% |                   |  |                  | (0.6
|                                                                      |  |                   |  |                   |    |                   |  |                  |     
|Effective tax rate                                                    |  |                   |  | 37.0              | %  |                   |  |                  | 70.0
|                                                                      |  |                   |  |                   |    |                   |  |                  |     

Deferred income tax
assets and liabilities at December 31, 2003, 2002 and 2001 reflect the impact
of temporary differences between the amounts of assets and liabilities for
financial reporting and income tax reporting purposes. Temporary differences
and carry forwards which give rise to deferred tax assets and liabilities at
December 31, 2003, 2002 and 2001 are as follows (in thousands):

|                                                           |  | December
  31, |       
|---------------------------------------------------------- |  | -------------- | ------
|                                                           |  |                |       
|                                                           |  | 2003           |       
|Deferred tax assets:                                       |  |                |       
|Allowance for doubtful
  accounts                          |  | $              | 377   
|Accruals and reserves                                      |  |                | 1,463 
|Federal net operating
  loss
            carryforward      |  |                | 10,078
|Deductible goodwill
  and
            impairment
  charges |  |                | (22   
|Other                                                      |  |                | 1,957 
|                                                           |  |                |       
|Total
  deferred tax assets                                |  |                | 13,853
|                                                           |  |                |       
|Less valuation
  allowance                                 |  |                | (9,001
|                                                           |  |                |       
|Net
  deferred tax asset                                   |  |                | 4,852 
|Deferred tax liabilities:                                  |  |                |       
|Property, plant, and
  equipment                           |  |                | 4,852 
|Other                                                      |  |                |      
|                                                           |  |                |       
|Total
  deferred tax liabilities                           |  |                | 4,852 
|Net deferred tax asset                                     |  | $              |      
|                                                           |  |                |       

Included in the Companys
noncurrent assets of discontinued operations at December 31, 2003 and 2002, is
a net noncurrent deferred tax asset of $4.1 million and $7.2 million, respectively,
relating primarily to tax deductible goodwill and reserves that are not
deductible for tax purposes until paid. 
In addition, the Companys noncurrent liabilities of discontinued
operations at December 31, 2003 and 2002, include noncurrent deferred tax
liability of $0.2 million and $2.7 million, respectively, related primarily to
differences in the book and tax bases of fixed assets.  The net deferred tax assets of $4.3 and $4.4
million have a full valuation allowance.

As of December 31, 2003,
the Company had federal net operating loss carryforwards of approximately $28.2
million which will expire between 2004 and 2023.  While the majority of these loss carryforwards are associated
with the Companys discontinued operations, the Company has classified the
related deferred tax asset and valuation allowance as a component of continuing
operations since it believes it will be able to retain these tax
attributes.  In addition, the Company
had charitable contributions of $0.3 million that may be carried forward
through 2007 and an AMT credit carryforward of approximately $0.2 million,
which may be carried forward indefinitely.

F-36

---

---

A consolidated valuation
allowance of $7.1 million related to rationalization of net operating loss
carryforwards generated by the Companys discontinued operations was
established as of December 31, 2001. The allowance reflects the Companys
recognition that continuing losses from operations and certain liquidity
matters discussed in Note 2 indicate that it is more likely than not that
certain future tax benefits will not be realized as a result of future taxable
income.  At December 31, 2002, the
Company recorded a full valuation allowance against its net deferred tax asset
from continuing and discontinuing operations totaling approximately $18.0
million.  The full valuation allowance
against the Companys net deferred tax asset from continuing and discontinuing
operations was approximately $13.3 million at December 31, 2003.

As of December 31, 2003,
the Company has state net operating loss carryforwards of approximately $87.3
million.  As the Company believes that
realization of the benefit of these state losses is remote, it has not recorded
deferred tax assets associated with these losses.

The Company received a
tax refund of approximately $4.2 million during the quarter ended June 30,
2002, which was used to reduce the RoadOne revolver and cured the over-advance
position that existed at that time.  An
additional tax refund of $4.6 million was received during the quarter ended September
30, 2002, with proceeds used to further reduce the borrowings under the RoadOne
revolver.

14.          PREFERRED
STOCK

The Company has
authorized 5,000,000 shares of undesignated preferred stock which can be issued
in one or more series. The terms, price, and conditions of the preferred shares
will be set by the board of directors. No shares have been issued.

15.          EMPLOYEE
BENEFIT PLANS

During 1996, the Company
established a contributory retirement plan for all full-time employees with at least
90 days of service. Effective January 1, 1999, the Company split the plan into
two identical plans by operating segment. As a result of the Companys decision
to dispose of its towing services operations the two separate plans were
combined to form a consolidated plan effective January 1, 2003. These plans are
designed to provide tax-deferred income to the Companys employees in
accordance with the provisions of Section 401 (k) of the Internal Revenue Code.

These plans provide that
each participant may contribute up to 15% of his or her salary. The Company
matches 33.33% of the first 3% of participant contributions. Matching
contributions vest over a period of five years. Company contributions to the
plans were not significant in 2003, 2002, and 2001.

16.          QUARTERLY
FINANCIAL INFORMATION (UNAUDITED)

The following is a
summary of the unaudited quarterly financial information for the twelve months
ended December 31, 2003 and 2002 (in thousands, except per share data):

F-37

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|                            |  | Net Sales |         | Operating
  Income
  (Loss) |   | Loss From
  Discontinued
  Operations |  | Net Income
  (Loss)(a) |   | Basic
  Net Loss
  Per Share |   | DilutedNet Loss
  Per Share |  
|--------------------------- |  | --------- | ------- | --------------------------- | - | ------------------------------------- |  | ---------------------- | - | ---------------------------- | - | --------------------------- | -
|                            |  |           |         |                             |   |                                       |  |                        |   |                              |   |                             |  
|Year endedDecember 31, 2003 |  |           |         |                             |   |                                       |  |                        |   |                              |   |                             |  
|First Quarter               |  | $         | 47,893  |                             | $ | 3,310                                 |  |                        | $ | (2,302                       | ) |                             | $
|Second Quarter              |  |           | 57,962  |                             |   | 3,217                                 |  |                        |   | (2,136                       | ) |                             |  
|Third Quarter               |  |           | 50,322  |                             |   | 1,439                                 |  |                        |   | (4,845                       | ) |                             |  
|Fourth Quarter              |  |           | 49,819  |                             |   | 1,611                                 |  |                        |   | (6,940                       | ) |                             |  
|                            |  |           |         |                             |   |                                       |  |                        |   |                              |   |                             |  
|                            |  |           |         |                             |   |                                       |  |                        |   |                              |   |                             |  
|Total                       |  | $         | 205,996 |                             | $ | 9,577                                 |  |                        | $ | (16,223                      | ) |                             | $
|                            |  |           |         |                             |   |                                       |  |                        |   |                              |   |                             |  
|                            |  |           |         |                             |   |                                       |  |                        |   |                              |   |                             |  
|Year endedDecember 31, 2002 |  |           |         |                             |   |                                       |  |                        |   |                              |   |                             |  
|First Quarter               |  | $         | 55,427  |                             | $ | 4,202                                 |  |                        | $ | (2,398                       | ) |                             | $
|Second Quarter              |  |           | 61,187  |                             |   | 3,643                                 |  |                        |   | (1,836                       | ) |                             |  
|Third Quarter               |  |           | 54,776  |                             |   | 2,066                                 |  |                        |   | (1,811                       | ) |                             |  
|Fourth Quarter              |  |           | 60,113  |                             |   | 4,997                                 |  |                        |   | (20,920                      | ) |                             |  
|                            |  |           |         |                             |   |                                       |  |                        |   |                              |   |                             |  
|                            |  |           |         |                             |   |                                       |  |                        |   |                              |   |                             |  
|Total                       |  | $         | 231,503 |                             | $ | 14,908                                |  |                        | $ | (26,965                      | ) |                             | $
|                            |  |           |         |                             |   |                                       |  |                        |   |                              |   |                             |  

|(a) | The income tax provision
  (benefit) has been allocated by quarter based on the effective rate for the
  twelve months ended December 31, 2003 and 2002.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------
|(b) | The results of operations
  reflect asset impairments and other special charges as discussed in Notes 6
  and 7.                                        

F-38

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MILLER
INDUSTRIES, INC. AND SUBSIDIARIESSCHEDULE II VALUATION AND QUALIFYING ACCOUNTS

|                                                                                                                  |  | Balance at
  Beginning of
  Period |   | Charged to
  Expenses |  | Charged to
  Other |       | Accounts
  Written Off |  | Balance at
  End of
  Period |     
|----------------------------------------------------------------------------------------------------------------- |  | ---------------------------------- | - | --------------------- |  | ------------------ | ----- | ---------------------- |  | ---------------------------- | ----
|                                                                                                                  |  |                                    |   |                       |  |                    |       |                        |  |                              |     
|                                                                                                                  |  | (In Thousands)                     |  
|Year ended April 30, 2001:
     Deduction from asset accounts:
        Allowance for doubtful accounts            |  |                                    | $ | 6,509                 |  |                    | 3,845 |                        |  | (265                         | )(a)
|                                                                                                                  |  |                                    |   |                       |  |                    |       |                        |  |                              |     
|Eight months ended December 31, 2001:
     Deduction from asset accounts:
        Allowance for doubtful accounts |  |                                    | $ | 2,853                 |  |                    | 1,262 |                        |  |                             |     
|                                                                                                                  |  |                                    |   |                       |  |                    |       |                        |  |                              |     
|Year ended December 31, 2002
     Deduction from asset accounts:
        Allowance for doubtful accounts          |  |                                    | $ | 576                   |  |                    | 564   |                        |  |                             |     
|                                                                                                                  |  |                                    |   |                       |  |                    |       |                        |  |                              |     
|Year ended December 31, 2003
     Deduction from asset accounts:
        Allowance for doubtful accounts          |  |                                    | $ | 805                   |  |                    | 492   |                        |  |                             |     

|(a) | The other reduction to the allowance for doubtful
  accounts results from the dispositions of towing services markets in fiscal
  2001.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------

S-1

---

---

|                                      |  | Balance at
  Beginning of
  Period |   | Charged to
  Expense |  | Claims |  | Balance at
  End of Period |      
|------------------------------------- |  | ---------------------------------- | - | -------------------- |  | ------ |  | -------------------------- | -----
|                                      |  |                                    |   |                      |  |        |  |                            |      
|                                      |  | (In
  Thousands)                   |  
|Year ended April 30, 2001:            |  |                                    |   |                      |  |        |  |                            |      
|Product
  Warranty Reserve:           |  |                                    | $ | 918                  |  |        |  |                            | 2,126
|                                      |  |                                    |   |                      |  |        |  |                            |      
|Eight Months ended December 31, 2001: |  |                                    |   |                      |  |        |  |                            |      
|Product
  Warranty Reserve:           |  |                                    | $ | 888                  |  |        |  |                            | 1,271
|                                      |  |                                    |   |                      |  |        |  |                            |      
|Year ended December 31, 2002:         |  |                                    |   |                      |  |        |  |                            |      
|Product
  Warranty Reserve:           |  |                                    | $ | 926                  |  |        |  |                            | 1,489
|                                      |  |                                    |   |                      |  |        |  |                            |      
|Year ended December 31, 2003:         |  |                                    |   |                      |  |        |  |                            |      
|Product
  Warranty Reserve:           |  |                                    | $ | 554                  |  |        |  |                            | 1,547

|                                      |  | Balance at
  Beginning
  of Period |   | Additions(Reductions) |  | Balance at
  End of Period | 
|------------------------------------- |  | ---------------------------------- | - | --------------------- |  | -------------------------- | 
|                                      |  |                                    |   |                       |  |                            | 
|                                      |  | (In
  Thousands)                   |  
|Eight Months ended December 31, 2001: |  |                                    |   |                       |  |                            | 
|Deferred Tax Valuation Allowance:     |  |                                    | $ |                      |  |                            | 
|                                      |  |                                    |   |                       |  |                            | 
|Year ended December 31, 2002:         |  |                                    |   |                       |  |                            | 
|Deferred Tax Valuation Allowance:     |  |                                    | $ | 6,011                 |  |                            | 
|                                      |  |                                    |   |                       |  |                            | 
|Year ended December 31, 2003:         |  |                                    |   |                       |  |                            | 
|Deferred Tax Valuation Allowance:     |  |                                    | $ | 18,032                |  |                            | 

|Note: | The Allowance for Doubtful Accounts and Product
  Warranty Reserve tables above reflect activity for continuing operations for
  the years ended December 31, 2003 and 2002, and for consolidated operations
  for the eight months ended December 31, 2001 and the fiscal year ended April
  30, 2001.  The Deferred Tax Valuation
  Allowance table reflects consolidated operations for all periods presented.
|----- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

S-2

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SIGNATURES

Pursuant
to the requirements of Section 13 or 15(d) of the Securities Exchange Act of
1934, the Registrant has duly caused this Report to be signed on its behalf by
the undersigned, thereunto duly authorized, on the 26th day of March, 2004.

| | MILLER
  INDUSTRIES, INC.
| | -------------------------
| |                          
| | By:                      
| |                          
| |                          
| |                          

Know
all men by these presents, that each person whose signature appears below
constitutes and appoints Jeffrey I. Badgley as attorney-in-fact, with power of
substitution, for him in any and all capacities, to sign any amendments to this
Report on Form 10-K, and to file the same, with exhibits thereto, and other
documents in connection therewith, with the Securities and Exchange Commission,
hereby ratifying and confirming all that said attorney-in-fact may do or cause
to be done by virtue hereof.

Pursuant
to the requirements of the Securities Exchange Act of 1934, this Report has
been signed below by the following persons on behalf of the Registrant in the
capacities indicated on the 26th day of March, 2004.

|Signature                      |  | Title                                                                                                             
|------------------------------ |  | ------------------------------------------------------------------------------------------------------------------
|                               |  |                                                                                                                   
|                               |  |                                                                                                                   
|/s/ William
  G. Miller        |  | Chairman of
  the Board of Directors and Co-ChiefExecutive Officer                                                
|                               |  |                                                                                                                   
|William G.
  Miller            |  |                                                                                                                   
|                               |  |                                                                                                                   
|/s/ Jeffrey
  I. Badgley       |  | President,
  Co-Chief Executive Officer and Director                                                              
|                               |  |                                                                                                                   
|Jeffrey I.
  Badgley           |  |                                                                                                                   
|                               |  |                                                                                                                   
|/s/ J.
  Vincent Mish          |  | Executive
  Vice President, Treasurer and Chief
  Financial Officer (Principal Financial and
  Accounting Officer)
|                               | 
|J. Vincent
  Mish              | 
|                               |  |                                                                                                                   
|/s/ A.
  Russell Chandler, III |  | Director                                                                                                          
|                               |  |                                                                                                                   
|A. Russell
  Chandler, III     |  |                                                                                                                   
|                               |  |                                                                                                                   
|/s/ Paul E.
  Drack            |  | Director                                                                                                          
|                               |  |                                                                                                                   
|Paul E.
  Drack                |  |                                                                                                                   
|                               |  |                                                                                                                   
|/s/ Richard
  H. Roberts       |  | Director                                                                                                          
|                               |  |                                                                                                                   
|Richard H.
  Roberts           |  |                                                                                                                   

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EXHIBIT INDEX

|21   | Subsidiaries
  of the Registrant                                                                                                                                                                                                                                
|---- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|     |                                                                                                                                                                                                                                                                 
|23.1 | Consent of
  Joseph Decosimo and Company, LLP                                                                                                                                                                                                                   
|     |                                                                                                                                                                                                                                                                 
|23.2 | Consent of
  PricewaterhouseCoopers LLP                                                                                                                                                                                                                         
|     |                                                                                                                                                                                                                                                                 
|24   | Power of
  Attorney (see signature page)                                                                                                                                                                                                                        
|     |                                                                                                                                                                                                                                                                 
|31.1 | Certification
  of Jeffrey I. Badgley, President and Co-Chief Executive Officer of Miller
  Industries, Inc., pursuant to rule 13a-14(a) or 15d-14(a) of the Exchange
  Act, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.              
|     |                                                                                                                                                                                                                                                                 
|31.2 | Certification
  of William G. Miller , Chairman of the Board and Co-Chief Executive Officer
  of Miller Industries, Inc., pursuant to rule 13a-14(a) or 15d-14(a) of the
  Exchange Act, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of
  2002.
|     |                                                                                                                                                                                                                                                                 
|31.3 | Certification
  of J. Vincent Mish, Executive Vice President and Chief Financial Officer of
  Miller Industries, Inc., pursuant to rule 13a-14(a) or 15d-14(a) of the
  Exchange Act, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of
  2002.   
|     |                                                                                                                                                                                                                                                                 
|32.1 | Certification
  of Jeffrey I. Badgley, President and Co-Chief Executive Officer of Miller
  Industries, Inc., pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
  Section 906 of the Sarbanes-Oxley Act of 2002.                                       
|     |                                                                                                                                                                                                                                                                 
|32.2 | Certification
  of William G. Miller , Chairman of the Board and Co-Chief Executive Officer
  of Miller Industries, Inc., pursuant to 18 U.S.C. Section 1350, as adopted
  pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.                           
|     |                                                                                                                                                                                                                                                                 
|32.3 | Certification of J.
  Vincent Mish, Executive Vice President and Chief Financial Officer of Miller
  Industries, Inc., pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
  Section 906 of the Sarbanes-Oxley Act of 2002.                              

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