SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549


                                    FORM 10-K/A


              /X/ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF
                      THE SECURITIES EXCHANGE ACT OF 1934.

                    For the fiscal year ended April 30, 1999
                           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 / /

         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. [ ]

         The aggregate market value of the voting stock held by nonaffiliates of
the  Registrant  as of July 27, 1999 was $133,550,000  based on the closing sale
price of the Common  Stock as  reported  by the New York Stock  Exchange on such
date. See Item 12.

         At July 27,  1999 there were  46,794,297  shares of Common  Stock,  par
value $0.01 per share, outstanding.

                      DOCUMENTS INCORPORATED BY REFERENCE:

         Portions of the  Registrant's  definitive  Proxy Statement for the 1999
Annual Meeting of Shareholders are incorporated by reference into Part III.




<PAGE>


                                TABLE OF CONTENTS
                             FORM 10-K ANNUAL REPORT

                                     PART I

ITEM 1.
       BUSINESS............................................................ 1

ITEM 2.
       PROPERTIES.......................................................... 17

ITEM 3.
       LEGAL PROCEEDINGS................................................... 17

ITEM 4.
       SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS................. 18

                                     PART II

ITEM 5.
       MARKET FOR THE REGISTRANT'S COMMON EQUITY AND
       RELATED STOCKHOLDER MATTERS......................................... 18

ITEM 6.
       SELECTED FINANCIAL DATA............................................. 19

ITEM 7.
       MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
       CONDITION AND RESULTS OF OPERATIONS................................. 21

ITEM 8.
       FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA......................... 27

ITEM 9.
       CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
       ACCOUNTING AND FINANCIAL DISCLOSURE................................. 27

                                    PART III

ITEM 10.
       DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.................. 28


                                      -i-

<PAGE>



ITEM 11.
       EXECUTIVE COMPENSATION.............................................. 28

ITEM 12.
       SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
       AND MANAGEMENT...................................................... 28

ITEM 13.
       CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS...................... 28

                                     PART IV

ITEM 14.
       EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS
       ON FORM 8-K......................................................... 28

FINANCIAL STATEMENTS........................................................F-1


FINANCIAL STATEMENT SCHEDULE................................................S-1


SIGNATURES.................................................................II-1



                                      -ii-

<PAGE>



                                     PART I

ITEM 1.  BUSINESS

GENERAL


         Miller  Industries,   Inc.  (the  "Company")  is  the  world's  leading
integrated  provider of vehicle  towing and recovery  equipment and services and
has  executive  offices  in  Ooltewah,   Tennessee  and  Atlanta,   Georgia  and
manufacturing  operations in Tennessee,  Pennsylvania,  France and England.  The
Company's  business  is divided  into two  segments:  (i)  towing  and  recovery
equipment and (ii) towing services.  The Company markets its towing and recovery
equipment  under  several  well-recognized  brand  names and  markets its towing
services under the national brand name of RoadOne(R).


         Since 1990 the Company has  developed  or acquired  several of the most
well-recognized   brands  in  the  fragmented  towing  and  recovery   equipment
manufacturing industry. The Company's strategy has been to diversify its line of
products and increase its market share in the industry  through a combination of
internal growth and development and acquisitions of complementary businesses.

         As a natural  extension of its leading market position in manufacturing
and strong brand name  recognition,  the Company has  broadened  its strategy to
include vertical integration,  with the goal of achieving operating efficiencies
while  becoming a leading  worldwide  manufacturer,  distributor  and  financial
services  provider in the towing and  recovery  industry.  The  Company's  owned
distributors and its independent distributors form a North American distribution
network  for towing and  recovery  equipment  as well as other  specialty  truck
equipment and components.

         In February  1997,  the  Company  formed its towing  service  division,
RoadOne,  to begin building a national towing service network.  RoadOne offers a
broad range of towing and transportation services,  including towing, impounding
and storing  motor  vehicles,  conducting  lien sales and  auctions of abandoned
vehicles,  environmental  clean-up  services,  and  transporting  new  and  used
vehicles and heavy construction equipment. In fiscal 1999, the Company,  through
its RoadOne  subsidiary,  acquired 35 towing  service  companies  with aggregate
historical annual revenues of approximately  $35.9 million.  These  acquisitions
are part of the Company's plan to establish a national  towing  service  network
through owned companies in combination with an extensive group of affiliates. At
July 23, 1999, the Company was operating over 200 facilities  serving 49 markets
in 27 states,  and had  relationships  with over 2,184 RoadOne  affiliates.  The
Company  intends to  continue  its  expansion  into  additional  towing  service
markets.

INCLUSION OF FORWARD-LOOKING STATEMENTS

         Certain statements in this Annual Report,  including but not limited to
"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 management's belief as well as assumptions made by,
and information  currently  available to,  management  pursuant to "safe harbor"
provisions  of  the  Private  Securities  Litigation  Reform  Act of  1995.  The
<PAGE>

Company's 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 acquisitions, including, without limitation, the risks that acquisitions do
not  close  and the  cost or  difficulties  related  to the  integration  of the
acquired  businesses.  The Company cautions that such factors are not exclusive.
The Company does not undertake to update any forward-looking  statement that may
be made from time to time by, or on behalf of, the Company.

         RISK FACTORS

         UNCERTAINTIES IN INTEGRATING OPERATIONS AND ACHIEVING COST SAVINGS. The
companies  that the Company has recently  acquired and that the Company plans to
acquire have operations in many different  markets.  The success of any business
combination  is  in  part  dependent  on  management's   ability  following  the
transaction to integrate  operations,  systems and procedures and thereby obtain
business  efficiencies,  economies  of  scale  and  related  cost  savings.  The
challenges  posed to the Company's  management may be  particularly  significant
because   integrating  the  recently   acquired   companies  must  be  addressed
contemporaneously.  There can be no assurance that future  consolidated  results
will  improve  as a  result  of cost  savings  and  efficiencies  from  any such
acquisitions  or proposed  acquisitions,  or as to the timing or extent to which
cost savings and efficiencies will be achieved.


         RISKS  ASSOCIATED  WITH  ACQUISITION  STRATEGY.   The  Company  has  an
aggressive  acquisition strategy that has involved,  and is expected to continue
to involve, the acquisition of a significant number of additional companies.  As
a result,  the Company's future success is dependent,  in part, upon its ability
to identify,  finance and acquire attractive businesses and then to successfully
integrate  and/or  manage  such  acquired  businesses.  In light of  operational
difficulties and certain restrictions  contained in the Company's amended Credit
Facility,  it is likely that the frequency of acquisitions  will be less than in
the past,  at least  for the near  term.  Acquisitions  involve  special  risks,
including  risks  associated  with  unanticipated   problems,   liabilities  and
contingencies, diversion of management attention and possible adverse effects on
earnings  resulting from increased  goodwill  amortization,  increased  interest
costs,  the issuance of additional  securities and  difficulties  related to the
integration of the acquired business.  Although the Company believes that it can
identify and consummate the acquisitions of a sufficient number of businesses to
successfully  implement its growth  strategies,  there can be no assurance  that
such  will  be  the  case.  Further,  there  can  be no  assurance  that  future
acquisitions  will not have an  adverse  effect  upon  the  Company's  operating
results,  particularly  during  periods  in which  the  operations  of  acquired
businesses are being integrated into the Company's operations.


          RISKS OF FOREIGN MARKETS.  The Company's growth strategy  includes the
expansion  of its  operations  in foreign  markets.  In January 1996 the Company
acquired S.A. Jige International ("Jige"), a French manufacturer of wreckers and
car  carriers,  and in April  1996 the  Company  acquired  Boniface  Engineering
Limited  ("Boniface"),  a British manufacturer of towing and recovery equipment.
Prior to these  acquisitions,  the Company had limited experience with sales and
manufacturing  operations outside North America.  There is no assurance that the
Company  will  be  able  to  successfully   integrate  and  expand  its  foreign
operations.  Furthermore, there is no assurance that the Company will be able to
successfully  expand  sales  outside  of North  America or compete in markets in
which it is  unfamiliar  with  cultural and business  practices.  The  Company's
foreign  operations  are  subject  to  various  political,  economic  and  other
uncertainties,   including  risks  of  restrictive  taxation  policies,  foreign
exchange restrictions and currency  translations,  changing political conditions
and governmental regulations.

         RISKS OF ENTERING NEW LINES OF BUSINESS.  The Company's growth strategy
includes vertically  integrating within the towing and recovery industry through
a combination of acquisitions and internal growth.  Implementation of its growth



                                      -2-
<PAGE>

strategy has resulted in the Company's entry into several new lines of business.
Historically,  the Company's expertise has been in the manufacture of towing and
recovery  equipment  and the Company had no prior  operating  experience  in the
lines of business it recently  entered.  During fiscal 1997, the Company entered
three new lines of  business  through  the  acquisition  of towing and  recovery
equipment  distributors and towing service  companies,  and the establishment of
the  Company's  Financial  Services  Group.  The  Company's  operation  of these
businesses will be subject to all of the risks inherent in the  establishment of
a new business  enterprise.  Such acquisitions  present the additional risk that
newly-acquired  businesses  could be viewed as being in  competition  with other
customers of the Company. Although the new businesses are closely related to the
Company's towing and recovery equipment manufacturing business,  there can be no
assurance  that the  Company  will be able to  successfully  operate  these  new
businesses.


         CYCLICAL NATURE OF INDUSTRY,  GENERAL ECONOMIC  CONDITIONS AND WEATHER.
The towing and  recovery  industry is  cyclical in nature and has been  affected
historically  by  high  interest  rates  and  economic  conditions  in  general.
Accordingly,  a downturn in the economy could have a material  adverse effect on
the Company's operations. The industry is also influenced by consumer confidence
and general credit availability, and by weather conditions.

         FLUCTUATIONS IN PRICE AND SUPPLY OF MATERIALS AND COMPONENT  PARTS. The
Company is dependent upon outside suppliers for its raw material needs and other
purchased  component  parts and,  therefore,  is subject to price  increases and
delays in receiving supplies of such materials and component parts. There can be
no assurance  that the Company will be able to pass any price increase on to its
customers.  Although  the Company  believes  that sources of its  materials  and
component parts will continue to be adequate to meet its  requirements  and that
alternative  sources are  available,  events beyond the Company's  control could
have an  adverse  effect  on the  cost or  availability  of such  materials  and
component  parts.  Additionally,  demand  for the  Company's  products  could be
negatively   affected  by  the  unavailability  of  truck  chassis,   which  are
manufactured  by third  parties and are  typically  purchased  separately by the
Company's  distributors or by towing operators and are sometimes supplied by the
Company.

         COMPETITION.  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 the  Company's  products are affected by the market for used
towing and recovery  equipment.  Certain of the Company's  competitors  may have
substantially  greater  financial  and  other  resources  and may  provide  more
attractive dealer and retail customer  financing  alternatives than the Company.
Historically,  the towing service industry has been highly  fragmented,  with an
estimated 30,000 professional  towing operators in the United States,  therefore
the Company's  towing service  operations will face continued  competition  from
many  operators  across the country.  The Company also faces  competition in its
consolidation  of  professional  towing  operators.  These  operators  could  be
consolidated by other  companies,  individuals or entities,  or they could enter
into affiliate  relationships with other companies.  In addition,  the Company's
presence  in the  towing  service  industry  presents  the risk that it could be
viewed as being in competition with other customers of the Company.  The Company
may also face significant  competition from large competitors as it enters other
new lines of business, including equipment distribution and financial services.


                                      -3-
<PAGE>


         DEPENDENCE ON  PROPRIETARY  TECHNOLOGY.  Historically,  the Company has
been  able  to  develop  or  acquire  patented  and  other  proprietary  product
innovations  which have  allowed it to produce  what  management  believes to be
technologically  advanced products relative to most of its competition.  Certain
of the Company's patents expire in 2004 at which time the Company may not have a
continuing  competitive  advantage through proprietary  products and technology.
The  Company's  historical  market  position has been a result,  in part, of its
continuous  efforts to develop new products.  The Company's  future  success and
ability to  maintain  market  share will  depend,  to an extent,  on new product
development.

         LABOR AVAILABILITY. The timely production of the Company's wreckers and
car carriers  requires an adequate  supply of skilled  labor.  In addition,  the
operating  costs  of each  manufacturing  and  towing  service  facility  can be
adversely  affected by high  turnover  in skilled  positions.  Accordingly,  the
Company's  ability to increase  sales,  productivity  and net  earnings  will be
limited to a degree by its ability to employ the skilled  laborers  necessary to
meet the Company's requirements. There can be no assurance that the Company will
be able to maintain an adequate  skilled  labor force  necessary to  efficiently
operate its facilities.

         DEPENDENCE  ON KEY  MANAGEMENT.  The  success of the  Company is highly
dependent on the continued  services of the Company's  management team. The loss
of services of one or more key members of the Company's  senior  management team
could  have a material  adverse  effect on the  Company.  Although  the  Company
historically  has been  successful  in  retaining  the  services  of its  senior
management,  there can be no  assurance  that the Company will be able to retain
such personnel in the future.

         PRODUCT  LIABILITY  AND  INSURANCE.  The  Company is subject to various
claims,  including  product  liability  claims arising in the ordinary course of
business,  and may at  times  be a  party  to  various  legal  proceedings  that
constitute ordinary routine litigation incidental to the Company's business. The
Company maintains reserves and liability insurance coverage at levels based upon
commercial norms and the Company's  historical claims  experience.  A successful
product  liability or other claim  brought  against the Company in excess of its
insurance  coverage  or the  inability  of the Company to acquire  insurance  at
commercially  reasonable  rates  could have a material  adverse  effect upon the
Company's business, operating results and financial condition.

         VOLATILITY OF MARKET PRICE. From time to time, there may be significant
volatility in the market price for the Common Stock. Quarterly operating results
of the Company,  changes in earnings  estimated by analysts,  changes in general
conditions in the Company's  industry or the economy or the financial markets or
other  developments  affecting  the Company  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.

         POSSIBLE  ADVERSE  EFFECT OF FUTURE SALES OF COMMON STOCK.  The Company
has filed a shelf registration statement to register for sale, from time to time
on a continuous  basis,  an aggregate of 5 million  shares of Common Stock which
the Company has issued and intends to issue in  connection  with  certain of its
acquisitions or in other transactions.  Such securities may be subject to resale
restrictions   in  accordance  with  the  Securities  Act  and  the  regulations
promulgated  thereunder,  as well as resale limitations  imposed by tax laws and
regulations  or by  contractual  provisions  negotiated by the Company.  As such


                                      -4-
<PAGE>

restrictions  lapse,  such securities may be sold to the public. In the event of
the issuance and subsequent  resale of a substantial  number of shares of Common
Stock,  or a perception  that such sales could occur,  there could be a material
adverse effect on the prevailing market price of Common Stock.

          CONTROL BY PRINCIPAL  SHAREHOLDER.  William G. Miller, the Chairman of
the Company,  beneficially owns  approximately 15% of the outstanding  shares of
Common  Stock.  Accordingly,  Mr.  Miller has the  ability to exert  significant
influence  over the business  affairs of the Company,  including  the ability to
influence  the  election  of  directors  and the result of voting on all matters
requiring shareholder approval.

         ANTI-TAKEOVER  PROVISIONS OF CHARTER AND BYLAWS;  PREFERRED  STOCK. The
Company's  Charter and Bylaws contain  restrictions  that may  discourage  other
persons from  attempting to acquire control of the Company,  including,  without
limitation,  prohibitions  on shareholder  action by written consent and advance
notice requirements respecting amendments to certain provisions of the Company's
Charter and Bylaws. In addition,  the Company's 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

         The  Company  offers a broad  range of towing  and  recovery  equipment
products that meet most customer  design,  capacity and cost  requirements.  The
Company  manufactures  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 60-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.

         The  Company's   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
its ownership of Jige in France and Boniface in the United Kingdom,  the Company
has substantial distribution capabilities in Europe. While most of the Company's
distributor  agreements  do  not  contain  exclusivity  provisions,   management
believes that approximately 65% of the Company's  independent  distributors sell
the  Company's  products  on an  exclusive  basis.  In  addition  to selling the
Company's  products to towing  operators,  the  distributors  provide  parts and
service. The Company also has independent sales representatives that exclusively
market the  Company's  products and provide  expertise  and sales  assistance to
distributors.  Management  believes the strength of the  Company's  distribution
network and the breadth of its product offerings are two key advantages over its
competitors.


                                      -5-
<PAGE>

         PRODUCT LINE

         The Company manufactures a broad line of wrecker and car carrier 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, 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  60-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  "Eagle  Claw"  automatic
wheellift hookup device that allows operators to engage a disabled or unattended
vehicle without leaving the cab of the wrecker.

         The Company's  wreckers  range in capacity  from 8 to 60 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.

         BRAND NAMES

         The Company  manufactures  and markets its  wreckers  and car  carriers
under nine 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(R). The Century brand is the Company's  "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 60-ton  heavy duty  models and car  carriers in
lengths from 17 1/2 to 26 feet. Management believes that the Century brand has a
reputation as the industry's leading product innovator.

         VULCAN(R).  The  Company's  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.


                                      -6-
<PAGE>

         CHALLENGER(R).  The  Company's  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 60 tons, and car carriers with lengths  ranging from 17 1/2 to
26  feet.  The  Challenger  line  was  started  in 1975  and is  known  for high
performance heavy duty wreckers and aesthetic design.

         HOLMES(R).  The  Company's  Holmes  product  line  includes  mid-priced
wreckers  with 8 to 16 ton  capacities  and  car  carriers  in 17 1/2 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(R). The Champion brand, which was introduced in 1991, includes
car carriers which range in length from 17 1/2 to 21 feet. The Champion  product
line, which is generally  lower-priced,  allows the Company 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(TM).  The Company's 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(R).  The Company's Eagle products  consist of light duty wreckers
with a patented  "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, the
Company has  upgraded  the quality and  features of the Eagle  product  line and
expanded  its  recovery  capability.  The Eagle  line is now  gaining  increased
popularity in the broader towing and recovery vehicle market.

         JIGE(TM).  The Company's 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(TM).   The  Company's   Boniface  product  line  is  comprised
primarily of heavy duty wreckers.  Boniface  produces a wide range of heavy duty
wreckers  specializing in the long underlift  technology  required to tow modern
European tour buses.

         The Company's  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. The Company's  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, the Company focuses on developing or licensing new
technology for its products.


                                      -7-
<PAGE>

         MANUFACTURING PROCESS

         The Company manufactures wreckers and car carriers at six manufacturing
facilities located in the United States,  France and England.  The manufacturing
process for the  Company's  products  consists  primarily of cutting and bending
sheet steel or aluminum into parts that are welded  together to form the wrecker
or car carrier body. Components such as hydraulic cylinders, winches, valves and
pumps, which are purchased by the Company 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 the Company 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 the  Company  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, the Company contracts with independent paint shops for such services.

         The Company  purchases raw materials and component  parts from a number
of sources.  Although the Company has no long-term supply contracts,  management
believes  the Company has good  relationships  with its primary  suppliers.  The
Company has experienced no significant  problems in obtaining  adequate supplies
of raw materials and component parts to meet the  requirements of its production
schedules.  Management believes that the materials used in the production of the
Company's  products are available at 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 the  Company's
business.

         TOWING AND RECOVERY EQUIPMENT SALES AND DISTRIBUTION

         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.

         The Company's  sales force,  which services the Company's  distribution
network, consists of 40 sales representatives,  34 of whom are Company employees
whose responsibilities include providing administrative and sales support to the
entire distributor base. The remaining 6 sales  representatives  are independent
contractors who market the Company's products exclusively. 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 the
Company's products and to maintain customer relationships.

         The  Company  has  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 fiscal year ended April 30, 1999, no single distributor accounted for
more than 5% of the Company's sales. Management believes the Company's broad and



                                      -8-
<PAGE>

diverse  customer  base  provides  it with the  flexibility  to adapt to  market
changes,  lessens its  dependence  on  particular  distributors  and reduces the
impact of regional economic factors.

         To  support  sales  and  marketing   efforts,   the  Company   produces
demonstrator  models that are used by the Company's  sales  representatives  and
distributors.  To increase exposure to its products, the Company also has 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.


         The  Company  routinely  responds  to  requests  for  proposals  or bid
invitations in consultation with its local distributors.  The Company's products
have  selected  by the  United  States  General  Services  Administration  as an
approved source for certain federal and defense agencies. The Company intends 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 its marketing  efforts and to control  marketing costs, the Company has
reduced its  participation  in regional  trade  shows and now  concentrates  its
efforts on five of the major trade shows each year.  The Company  works with its
distributor network to concentrate on various regional shows.


         TOWING AND RECOVERY EQUIPMENT DISTRIBUTOR ACQUISITIONS

         During  fiscal years 1997 and 1998,  the Company's  distribution  group
acquired 10 towing and recovery equipment  distributors.  These distributors are
located in  California,  Colorado,  Florida,  Georgia,  Illinois,  Missouri  and
Mississippi  and  in  British  Columbia  and  Ontario,   Canada.   The  acquired
distributors   market  the  Company's   products  as  well  as  other  specialty
transportation equipment, and the Company intends to expand the number and types
of products distributed through its distributors. The Company-owned distributors
generally  do not  compete  in the  same  geographic  markets  as the  Company's
independent distributors.

         The  Company  may  acquire  additional  towing and  recovery  equipment
distributors from time to time and anticipates  financing such acquisitions with
issuances of Common Stock, cash and/or borrowings under lines of credit,  but is
not  currently a party to any agreement to acquire any other  distributors.  The
Company uses an internal  acquisition  team,  supplemented  as needed by outside
advisors,  and  its  extensive  contacts  in the  towing  service  industry,  to
identify,   evaluate,  acquire  and  integrate  towing  and  recovery  equipment
distributors.  Acquisition  candidates are evaluated based on stringent criteria
in a comprehensive process which includes  operational,  legal and financial due
diligence reviews.


         FINANCIAL SERVICES

         The  Company's   Financial  Services  Group  commenced   operations  in
September 1996 to provide  financial  services to towing and recovery  equipment
distributors and towing service  companies.  The Company initially offered floor
plan  financing  to  distributors  and  purchase  and lease  financing to towing
service  operators.  In addition to financing  services,  the Financial Services
Group now provides insurance coverage,  extended warranties and related services
to purchasers of the Company's products.


                                      -9-
<PAGE>

         The Company has entered into  business  relationships  with  Associates
Commercial  Corporation,  and others (the "Lenders") to jointly market financing
of the Company's products. As part of these relationships,  the Company, through
its owned and independent distributors,  originates lease and loan financing for
its  end-consumers,  and the Lenders  provide the financing and servicing of the
leases and loans. In return for the Company's marketing activities,  the Lenders
pay a fee based on amounts financed.

         The Company expects to capitalize on its strong existing  relationships
with its  distributors  and their  customers  and its  reputation  for  reliable
service to develop the Financial Services Group.

         PRODUCT WARRANTIES AND INSURANCE

         The  Company  offers a  12-month  limited  manufacturer's  product  and
service warranty on its wrecker and car carrier products. The Company's warranty
generally  provides for repair or  replacement  of failed  parts or  components.
Warranty  service  is  usually   performed  by  the  Company  or  an  authorized
distributor.  Due to its emphasis on quality production,  the Company's warranty
expense in fiscal 1999 averaged less than 1% of net sales.  Management  believes
that the Company  maintains  adequate  general  liability and product  liability
insurance.

         BACKLOG

         The  Company  produces  virtually  all of its  products  to order.  The
Company's  backlog is based  upon  customer  purchase  orders  that the  Company
believes are firm. The level of backlog at any particular time,  however, is not
an  appropriate  indicator of the future  operating  performance of the Company.
Certain  purchase  orders  are  subject to  cancellation  by the  customer  upon
notification.  Given the Company's production and delivery schedules, as well as
the recent  plant  expansions,  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.  The Company  competes 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,  the
Company has invested  substantial  resources and management time in building and
maintaining strong  relationships  with  distributors.  Management also believes
that the Company's products are regarded as high quality within their particular
price  points.  The  Company's  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 the Company's 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 the  Company's  ownership of patents on certain of the


                                      -10-
<PAGE>

industry's leading technologies has given it a competitive advantage. Certain of
the Company's competitors may have greater financial and other resources and may
provide more attractive dealer and retail customer  financing  alternatives than
the Company.

         EMPLOYEES

         At April 30, 1999, the Company employed  approximately  1,287 people in
its towing and recovery  equipment  manufacturing  and distribution  operations.
None of the Company's employees is covered by a collective bargaining agreement,
though its employees in France and England have certain  similar rights provided
by their respective government's  employment regulations.  The Company considers
its employee relations to be good.

TOWING SERVICES - ROADONE

         In February  1997,  the Company  formed its towing  services  division,
RoadOne,  to  begin  building  a  national  towing  service  network.  With  the
acquisition  of 112 towing  service  companies as of July 23, 1999,  RoadOne has
become a leading towing service company with operations at over 200 locations in
27 states. RoadOne's corporate offices are located in Chattanooga, Tennessee.


         Historically,  the towing services industry has been highly fragmented,
with an estimated  30,000  professional  towing  operators in the United States,
many  that  are  undercapitalized  local  operators  with  no  viable  means  of
independently   realizing  the  economic  value  they  have  created  for  their
businesses. As the Company continues to pursue the acquisition of towing service
companies,   management   believes  that  these  owned  companies,   along  with
affiliations  established with non-owned  professional  towing operations,  will
form an organization capable of offering commercial  industries,  as well as the
general  public,  consistent,  high  quality  service  across  the  nation.  The
Company's  strategy is to build brand loyalty among towing service  customers by
emphasizing  consistently  high quality and  dependable  service  from  multiple
locations  throughout a broad  geographic  area.  The Company  intends to market
these services to  organizations  with widely  dispersed fleets of vehicles that
would benefit from a single source provider.


         SERVICES PROVIDED

         Services   provided  by  RoadOne   include   towing  and  recovery  and
specialized  transportation  services.  RoadOne's  towing and recovery  services
primarily  involve  providing  road-side  assistance to disabled  vehicles which
allows such  vehicles to proceed  under their own power,  or towing  disabled or
abandoned  vehicles to a location  designated by the customer.  RoadOne  derives
revenue  from towing and  recovery  services  based on  distance,  time or fixed
charges and from  storage  services  based on daily  fees.  These  services  are
primarily provided to commercial entities,  such as fleet operators,  automobile
dealers,  repair shops,  automobile  leasing  companies,  and automobile auction
companies;  public entities such as municipalities,  police, sheriff and highway
patrol departments,  colleges and universities, and toll-road departments; motor
clubs;  and  individual  motorists.  RoadOne  conducts lien and salvage sales of
certain vehicles in conjunction with its towing and recovery  services.  RoadOne
also provides limited environmental clean-up services in some areas.

         RoadOne's   specialized   transportation   services  primarily  involve
transporting  new and  used  vehicles,  construction  equipment  and  industrial
equipment.  RoadOne derives  revenue from transport  services based on distance,


                                      -11-
<PAGE>

time or fixed  charges.  These  services are  primarily  provided to  automobile
leasing  companies,  automobile  auction companies,  automobile  dealers,  fleet
operators, construction companies, and industrial manufacturers.

         TOWING, RECOVERY AND ROAD SERVICES

         COMMERCIAL.  RoadOne provides commercial road services to a broad range
of commercial customers,  including automobile dealers and repair shops. RoadOne
typically  charges a flat fee and a mileage  premium for these towing  services.
Commercial road services also include towing and recovery of heavy-duty  trucks,
recreational vehicles, buses and other large vehicles,  typically for commercial
fleet operators. RoadOne charges an hourly rate based on the towing vehicle used
for these  specialized  services.  RoadOne also provides  private impound towing
services to  commercial  customers,  such as  shopping  centers,  retailers  and
hotels,  which engage RoadOne to tow vehicles that are parked illegally on their
property.


         MUNICIPAL. RoadOne also provides towing and recovery services to public
entities  such  as  municipalities  and  police,   sheriff  and  highway  patrol
departments.  In a limited number of markets, RoadOne provides municipal freeway
towing service to  local  transit  districts and other  transportation  agencies
through  patrolling  a preset  route on  heavily-used  freeways  and  towing  or
otherwise assisting disabled vehicles. These services are in some cases provided
under contracts,  typically for terms of five years or less, that are terminable
for  material  breach and are  typically  subject to  competitive  bidding  upon
expiration.  In other cases, RoadOne provides these services without a long-term
contract.  Whether  pursuant  to a contract  or an ongoing  relationship,  these
services are generally provided by RoadOne for a designated  geographic area, or
shared with one or more other companies on a rotation basis.


         MOTOR  CLUB.  RoadOne  provides  towing  and  recovery  services  under
contract to national  motor clubs for the  disabled  vehicles of their  members.
Roadside assistance is provided and, if necessary,  vehicles are towed to repair
facilities  for a flat fee paid by either the  individual  motorist or the motor
club.

         CONSUMER  TOWING AND  RECOVERY.  RoadOne  provides  towing and recovery
services  to  individual   motorists  for  their  disabled  vehicles.   Roadside
assistance  is  provided  and,  if  necessary,  vehicles  are  towed  to  repair
facilities for a flat fee paid by the individual motorist.

         LIEN AND  SALVAGE  SALES.  In  conjunction  with  providing  towing and
recovery services, vehicles may be towed to a Company facility where the vehicle
is impounded and placed in storage.  Such a vehicle will remain in storage until
its owner pays the towing fee, which is typically based on an hourly charge, and
any  daily  storage  fees  to the  Company,  as  well  as any  fines  due to law
enforcement  agencies.  If the vehicle is not claimed within a period prescribed
by law (typically between 30 and 90 days), RoadOne may complete lien proceedings
and sell the vehicle at auction or to a scrap metal  facility,  depending on the
value of the vehicle.


         ENVIRONMENTAL  CLEANUP.  RoadOne also  provides  environmental  cleanup
services to a range of commercial customers in some markets.  These services are
typically  provided when there is a spill of a petroleum  product in conjunction
with a wrecked  vehicle  requiring  towing and recovery  services,  but may also
involve  an  isolated  spill.  RoadOne  does not  clean up spills  of  materials
designated as Hazardous Materials by the Environmental  Protection Agency. There



                                      -12-
<PAGE>

are fixed  and  variable  components  to the fees  charged  by  RoadOne  for its
environmental cleanup services.

         SPECIALIZED TRANSPORTATION

         CONSTRUCTION   EQUIPMENT.   RoadOne  provides  construction   equipment
transport services to construction  companies,  contractors,  municipalities and
equipment  leasing  companies  for  mobile  cargo  such as  cranes,  bulldozers,
forklifts and other heavy construction equipment.  Service fees are based on the
vehicle used and the distance traveled.

         INDUSTRIAL  EQUIPMENT.  RoadOne provides industrial equipment transport
services  to  manufacturing  companies,   construction  companies,  contractors,
municipalities  and  equipment  leasing  companies  for  immobile  cargo such as
engines,  industrial generators and heavy construction  materials.  Service fees
may be based on the vehicle used and the distance  traveled or may be determined
using an hourly  rate based on the  towing  vehicle  used for these  specialized
services.

         NEW AND USED AUTOMOBILE. RoadOne provides automobile transport services
to  leasing  companies,   automobile  dealers,   automobile  auction  companies,
long-distance  transporters,  brokers and  individuals.  Services  typically are
provided as needed by  particular  customers  and charged  according  to pre-set
rates based on mileage.  RoadOne  provides  transport  services for dealers with
used cars coming off lease and who  transfer new cars from one region to another
based on demand. The Company also provides local collection and delivery support
to long-haul automobile transporters.

         DISPATCH SYSTEMS

         RoadOne  currently  dispatches its towing and recovery and  specialized
transportation  services via existing  local  dispatch  systems  operated by its
individual  subsidiaries.   Some  of  these  subsidiaries  utilize  computerized
positioning  systems which  identify and track vehicle  location and status in a
localized  area.  RoadOne  intends to  continue to use these  existing  dispatch
systems,  while  developing and  implementing a national  computerized  dispatch
system that will more  efficiently  support  its  national,  regional  and local
customers in allocating and utilizing assets on every level.

         TOWING SERVICE ACQUISITIONS

         The Company  intends to continue to acquire  additional  towing service
operations.  The Company has targeted  professional  towers, and generally seeks
operators  who have good  reputations  in their  markets  and  solid  management
willing to continue in the employment of the Company after the acquisition.  The
Company uses an internal  acquisition  team,  supplemented  as needed by outside
advisors,  and  its  extensive  contacts  in the  towing  service  industry,  to
identify,   evaluate,  acquire  and  integrate  towing  operators.   Acquisition
candidates  are  evaluated  based on criteria in a  comprehensive  process which
includes  operational,  legal and financial due diligence  reviews.  The Company
expects to utilize  Common  Stock,  cash,  or both as  consideration  for future
acquisitions.


         During fiscal 1999, the Company acquired 35 towing service companies in
separate transactions, none of which were individually material to the financial
results of the Company.  The Company  issued an aggregate of  approximately  1.2
million shares of Common Stock and paid approximately  $21.3 million in cash and
$0.9 million in notes in such  transactions  which have been accounted for under
the purchase method of



                                      -13-
<PAGE>

accounting.  Subsequent  to  April  30,  1999,  the  Company  has  acquired  one
additional towing service company as of July 23, 1999, paying approximately $1.3
million in cash. This transaction was accounted for under the purchase method of
accounting.


         At July 23,  1999,  the Company had entered  into  letters of intent to
acquire six additional  towing  service  companies in  transactions  expected to
close over the  following  several  weeks.  These  transactions  are  subject to
customary conditions,  including completion of due diligence  investigations and
execution  of  definitive  acquisition  agreements,  among  others.  The Company
intends to  continue  to  aggressively  pursue  additional  purchases  of towing
service companies,  although  operational  difficulties and certain restrictions
contained  in the  Company's  amended  Credit  Facility  make it likely that the
frequency of  acquisitions  will be less than in the past, at least for the near
term.


         AFFILIATE PROGRAM

         In  order  to  offer a  nationwide  towing  service,  the  Company  has
established an affiliate program under which independent professional towers who
meet the Company's  criteria  provide towing  services under the RoadOne name as
"affiliates."  RoadOne affiliated companies will be offered many of the benefits
of owned  companies,  such as product  rebates,  lower costs for  financing  and
insurance,  quantity buying  advantages,  national marketing strength and driver
training.  The Company's intention is eventually to sign agreements with a large
number of RoadOne  affiliates  across North  America.  As of July 23, 1999,  the
Company had signed 2,184  agreements  with RoadOne  affiliates in all 50 states,
Puerto Rico and five provinces in Canada.

         COMPETITION

         Historically,  the towing service industry has been highly  fragmented,
with an estimated 30,000 professional towing operators in the United States. The
Company believes that its consolidation of a number of these companies will give
it  brand  loyalty  among  towing  service  customers  through  an  emphasis  on
consistently high quality and dependable  service from multiple locations over a
broad  geographic  area.  The  Company  expects  to  market  these  services  to
organizations with widely dispersed fleets of vehicles that would benefit from a
single source  provider.  However,  the size of the towing service industry will
mean that the Company's  operations  will face continued  competition  from many
operators  across  the  country.  The  Company  also  faces  competition  in its
consolidation  of  professional  towing  operators.  These  operators  could  be
consolidated by other  companies,  individuals or entities,  or they could enter
into affiliate  relationships with other companies.  In addition,  the Company's
presence  in the  towing  service  industry  presents  the risk that it could be
viewed as being in competition with other customers of the Company.

         EMPLOYEES

         At April 30, 1999, the Company employed  approximately  3,022 people at
RoadOne.  None of the  Company's  RoadOne  employees are covered by a collective
bargaining agreement. The Company considers its employee relations to be good.


                                      -14-
<PAGE>

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
of the Company 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  the  Company's   patents.   The  Company  has
successfully  litigated  infringement  lawsuits  in which  the  validity  of the
Company's patents on this technology was upheld, and successfully  settled other
lawsuits.  The Company also holds a number of other  utility and design  patents
covering other products,  including the "Eagle-Claw" hook up system,  the Vulcan
"scoop"  wheel-retainer  and the car carrier anti-tilt  device.  The Company has
also  obtained  the  rights to use and  develop  certain  technologies  owned or
patented by others.

         The Company's trademarks "Century," "Holmes," "Champion," "Challenger,"
"Formula I," "Eagle Claw  Self-Loading  Wheellift," "Pro Star," "Street Runner,"
"Vulcan," and "RoadOne,"  among others,  are  registered  with the United States
Patent and Trademark Office.  Management believes that the Company's  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

         The Company's  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 the  Company is 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 the Company's  financial
condition  or results of  operations  in the past and is not  expected to have a
material adverse impact in the future.

         The Company is 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 the Company's  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 the
operations of the Company.

         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 the operations of the Company.

                                      -15-
<PAGE>

EXECUTIVE OFFICERS OF THE REGISTRANT
<TABLE>
<CAPTION>

                  NAME                        AGE                     POSITION WITH THE COMPANY
                  ----                        ---                     -------------------------
<S>                                           <C>     <S>
William G. Miller......................       52      Chairman of the Board
Jeffrey I. Badgley.....................       48      President, Chief Executive Officer and Director
James A. McKinney......................       54      Chief Executive Officer - RoadOne, Inc. and Director
Frank Madonia..........................       50      Executive Vice President, Secretary and General Counsel
J. Vincent Mish........................       48      Vice  President,  Chief  Financial  Officer  and  President  of
                                                           Financial Services Group


</TABLE>


          WILLIAM G.  MILLER has served as  Chairman  of the Board  since  April
1994.  Mr.  Miller served as Chief  Executive  Officer of the Company from April
1994 to June 1997, as Co-Chief  Executive  Officer of the Company from June 1997
to November  1997, and as President of the Company 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.  BADGLEY  has  served as Chief  Executive  Officer  of the
Company since  November  1997, as President  since June 1996,  and as a director
since January 1996.  Mr.  Badgley  served as Co-Chief  Executive  Officer of the
Company  from June 1997 to  November  1997,  as Chief  Operating  Officer of the
Company  from June 1996 to June 1997 and as  Vice-President  of the Company from
April 1994 to June 1996. In addition,  Mr. Badgley serves as President of Miller
Industries Towing Equipment Inc. Mr. Badgley served as Vice President - Sales of
Miller Industries Towing Equipment Inc. from 1988 to 1996. Mr. Badgley served as
Vice President - Sales and Marketing of Challenger Wrecker Manufacturing,  Inc.,
from 1982 until joining Miller Industries Towing Equipment Inc.

          JAMES A.  MCKINNEY has served as Chief  Executive  Officer of RoadOne,
Inc.  since June 1999,  and as a director of the Company  since June 1999.  From
August 1998 through June 1999, Mr.  McKinney  served as Executive Vice President
of Rollins, Inc.. From January 1997 through May 1998, Mr. McKinney served as the
Chief Executive  Officer of Skywire.  From 1993 to 1997 he served as Senior Vice
President for Federal Express.

         FRANK MADONIA has served as Executive Vice  President,  General Counsel
and Secretary of the Company since  September 1998. From April 1994 to September
1998 Mr. Madonia served as Vice President,  General Counsel and Secretary of the
Company.  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. and Allied-Signal  Inc. In addition,  Mr. Madonia is registered to practice
before the United States Patent and Trademark Office.

          J. VINCENT  MISH is a certified  public  accountant  and has served as
President of the Financial  Services  Group since  September  1996 and as a Vice
President of the Company  since April 1994.  From April 1994  through  September
1996, Mr. Mish served as Chief Financial Officer and Treasurer of the Company, a


                                      -16-
<PAGE>

position he  reassumed  in June,  1999.  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, Georgia and Michigan Certified Public Accountant societies.



ITEM 2.  PROPERTIES

          The  Company  operates  four  manufacturing  facilities  in the United
States. The facilities are located in (i) Ooltewah,  Tennessee,  (ii) Hermitage,
Pennsylvania,  (iii) Mercer, Pennsylvania, and (iv) Greeneville,  Tennessee. The
Ooltewah plant, containing approximately 208,000 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,  contains  approximately  100,000  square feet,  produces car carriers and
light duty wreckers; and the Greeneville plant, containing approximately 100,000
square feet, primarily produces car carriers.

          The Company operates two foreign  manufacturing  facilities located in
the Lorraine region of France,  which contain,  in the aggregate,  approximately
100,000 square feet, and one in Norfolk,  England,  which contains approximately
22,500 square feet.

          Management  believes that its existing  manufacturing  facilities will
allow the Company to meet anticipated demand for its products.

          In  connection  with  its  acquisition  of  over  112  towing  service
companies,  the Company has acquired or entered into leases for property at over
200  locations  in 27 states.  These  facilities  are  utilized  as offices  for
administrative and dispatch operations,  garages for repair and upkeep of towing
vehicles, and lots for storage and impounding of towed cars. RoadOne's corporate
offices  are  housed  in 10,000  square  feet of  leased  space in  Chattanooga,
Tennessee.

ITEM 3.  LEGAL PROCEEDINGS

          In January  1998,  the Company  received a letter  from the  Antitrust
Division of the  Department  of Justice  (the  "Division")  stating  that it was
conducting  a  civil  investigation  covering  "competition  in  the  tow  truck
industry." The letter asked that the Company preserve its records related to the
tow truck  industry,  particularly  documents  related  to sales  and  prices of
products and parts, acquisition of other companies in the industry,  distributor
relations, patent matters, competition in the industry generally, and activities
of other companies in the industry.  In March 1998, the Company received a Civil
Investigation  Demand  ("CID")  issued by the Division as part of its continuing
investigation  of  whether  there  are,  have been or may be  violations  of the


                                      -17-
<PAGE>

federal  antitrust  statutes  in the tow truck  industry.  Under  this CID,  the
Company has produced  information and documents to assist in the  investigation,
has corresponded and met with the Division concerning the investigation,  and is
continuing to cooperate  with the Division.  It is unknown at this time what the
eventual outcome of the investigation will be.


         During  September,  October and November 1997, five lawsuits were filed
by certain persons who seek to represent a class of  shareholders  who purchased
shares of the Company's common stock during the period from either October 15 or
November  6, 1996 to  September  11,  1997.  Four of the suits were filed in the
United States District Court for the Northern District of Georgia. The remaining
suit was filed in the Chancery Court of Hamilton County,  Tennessee. In general,
the  individual  plaintiffs in all of the cases allege that they were induced to
purchase  the  Company's  common  stock  on the  basis of  allegedly  actionable
misrepresentations  or omissions  about the Company and its  business  and, as a
result were thereby damaged. Four of the complaints assert claims under Sections
10(b) and 20 of the Securities  Exchange Act of 1934. The complaints name as the
defendants  the Company and  various of its  present  and former  directors  and
officers.  The plaintiffs in the four actions which  involved  claims in Federal
Court under the Securities Exchange Act of 1934 have consolidated those actions.
The Company filed a motion to dismiss in the consolidated case which was granted
in part and denied in part.  The proposed class was certified by order dated May
27, 1999.  The Company filed a motion to dismiss in the Tennessee case which was
granted in its entirety.  The plaintiffs in that case,  with permission from the
Court,  amended and refiled their complaint,  which was dismissed with prejudice
by order of the  Court  dated  March 11,  1999.  On April 4,  1999  counsel  for
plaintiffs  filed a notice of appeal.  In both these  actions,  the  Company has
denied liability and will continue to vigorously defend itself.


          In addition to the shareholder litigation described above, the Company
is, from time to time, a party to litigation arising in the normal course of its
business. Management believes that none of these actions, individually or in the
aggregate,  will have a material  adverse  effect on the  financial  position or
results of operations of the Company.

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 fourth quarter of the fiscal year covered by this Report.


                                     PART II

ITEM 5    MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
          STOCKHOLDER MATTERS

          The Registrant's Common Stock is traded on the New York Stock Exchange
("NYSE")  under the symbol "MLR." The  following  table sets forth the quarterly
range of high and low sales  prices for the Common Stock for the period from May
1, 1997 through April 30, 1999.


                                      -18-
<PAGE>
<TABLE>
<CAPTION>

                                                                                  HIGH                   LOW
                                                                                  ----                   ----
<S>                                                                              <C>                    <C>
FISCAL YEAR ENDED APRIL 30, 1998
   First Quarter                                                                 $17.63                 $11.88
   Second Quarter                                                                $18.25                 $ 9.00
   Third Quarter                                                                 $12.00                 $ 9.06
   Fourth Quarter                                                                $11.44                 $ 6.19

FISCAL YEAR ENDED APRIL 30, 1999
   First Quarter                                                                 $ 8.88                 $ 6.19
   Second Quarter                                                                $ 7.44                 $ 3.75
   Third Quarter                                                                 $ 7.00                 $ 4.00
   Fourth Quarter                                                                $ 6.31                 $ 4.19
</TABLE>


         The  approximate  number of holders of record and beneficial  owners of
Common Stock as of July 27, 1999 was 1,874 and 10,000, respectively.

         The Company has never declared cash dividends on the Common Stock.  The
Company  intends to retain its earnings to finance the expansion of its business
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.


ITEM 6.  SELECTED FINANCIAL DATA

         The following table sets forth the selected consolidated financial data
of  the  Company,  which  should  be  read  in  conjunction  with  "Management's
Discussion and Analysis of Financial  Condition and Results of  Operations"  and
with the Company's  Consolidated  Financial  Statements and Notes  thereto.  The
selected  consolidated  financial data for the years ended April 30, 1995, 1996,
1997, 1998 and 1999 have been derived from the consolidated financial statements
of the Company audited by Arthur Andersen LLP, independent public accountants.



                                      -19-
<PAGE>



<TABLE>
<CAPTION>

                                              MILLER INDUSTRIES, INC. AND SUBSIDIARIES

                                                       SELECTED FINANCIAL DATA

                                                                                     Years Ended April 30,
                                                             --------------------------------------------------------------------

                                                                1999          1998           1997           1996           1995
                                                              --------       --------       --------       --------      --------
                                                                     (In thousands, except per share data)

<S>                                                           <C>            <C>            <C>            <C>            <C>
Statements of Income Data:
Net sales ...............................................     $525,932       $397,213       $292,394       $180,463       $139,779
Costs and expenses:
   Costs of operations ..................................      435,691        319,453        238,625        148,490        113,439
   Selling, general, and administrative .................       75,368         49,420         30,192         17,629         14,750
   expenses
   Restructuring costs ..................................         --            4,100           --             --             --
   Interest expense, net ................................       10,395          3,389            620            209            370
                                                              --------       --------       --------       --------       --------
Total costs and expenses ................................      521,454        376,362        269,437        166,328        128,559
Income before income taxes and extraordinary
   gain .................................................        4,478         20,851         22,957         14,135         11,220
Income taxes ............................................        2,272          8,186          8,436          5,108          3,736
                                                              --------       --------       --------       --------       --------
Income before extraordinary gain ........................        2,206         12,665         14,521          9,027          7,484
Extraordinary gain on debt retirement (less
   applicable income taxes of $175 in 1995)  ............         --             --             --             --              288
                                                              ========       ========       ========       ========       ========
Net income ..............................................     $  2,206       $ 12,665       $ 14,521       $  9,027       $  7,772
                                                              ========       ========       ========       ========       ========
Basic net income per common share<F1>:
   Before extraordinary gain ............................     $   0.05       $   0.28       $   0.37       $   0.27       $   0.26
   Extraordinary gain on debt retirement ................         --             --             --             --             0.01
                                                              --------       --------       --------       --------       --------
                                                              $   0.05       $   0.28       $   0.37       $   0.27       $   0.27
                                                              ========       ========       ========       ========       ========

Weighted average common shares outstanding ..............       46,338         44,559         39,565         33,172         28,797
                                                              ========       ========       ========       ========       ========
Diluted net income per common share<F1>:
   Before extraordinary gain ............................     $   0.05       $   0.27       $   0.35       $   0.26       $   0.25
   Extraordinary gain on debt retirement ................         --             --             --             --             0.01
                                                              --------       --------       --------       --------       --------
                                                              $   0.05       $   0.27       $   0.35       $   0.26       $   0.26
                                                              ========       ========       ========       ========       ========
Weighted average common & potential dilutive
   shares outstanding ...................................       47,266         46,201         41,454         34,102         29,428
                                                              ========       ========       ========       ========       ========
Balance Sheet Data (at period end):
   Working capital ......................................     $121,449       $104,774       $ 61,980       $ 52,438       $ 19,011
   Total assets .........................................      392,480        329,730        215,297        123,978         66,018
   Long-term obligations, less current portion ..........      133,850         95,778         11,282          9,335          5,171
   Shareholders' equity .................................      187,303        180,236        138,783         71,913         32,320

   --------------------------------------------------------------
<FN>
<F1>Basic and  diluted  net  income per common  share and the  weighted  average
    number of common  and  potential  dilutive  common  shares  outstanding  are
    computed after giving retroactive effect to the 3-for-2 stock split effected
    April 12, 1996,  the 2-for-1 stock split effected on September 30, 1996, the
    3-for-2 stock split effected on December 30, 1996.
</FN>
</TABLE>


                                                                -20-
<PAGE>


ITEM 7.    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
           AND RESULTS OF OPERATIONS

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

GENERAL

         Under  the  Company's  accounting  policies,  sales are  recorded  when
equipment is shipped to independent  distributors or other customers.  While the
Company  manufactures only the bodies of wreckers,  which are installed on truck
chassis manufactured by third parties, the Company sometimes purchases the truck
chassis for resale to its 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 Company 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.


         The  Company's  net sales  have  historically  been  lower in its first
quarter  when  compared  to the  prior  quarter  due in  part  to  decisions  by
purchasers of light duty wreckers to defer wrecker purchases near the end of the
chassis model year. The Company's net sales have  historically  been  relatively
stronger in its fourth  quarter due in part to sales made at the largest  towing
and recovery equipment trade show.

RESULTS OF OPERATIONS

         The  following  table  sets  forth,  for  the  periods  indicated,  the
components of the consolidated statements of income expressed as a percentage of
net sales.
<TABLE>
<CAPTION>

                                                                                  Years Ended April 30,
                                                                     ------------------------------------------------
                                                                         1999             1998              1997
                                                                     -------------    -------------     -------------
<S>                                                                      <C>              <C>               <C>
Towing and Recovery Equipment Segment
-------------------------------------
Net Sales...................................................             100.0%           100.0%            100.0%
Costs and expenses:
   Costs of operations......................................              86.6%            84.1%             83.0%
   Selling, general and administrative......................               9.1%             7.7%              8.7%
   Restructuring costs......................................               0.0%             1.5%              0.0%
   Interest expense (income), net............................              1.4%             0.3%            (0.1%)
                                                                    -------------     -------------     -------------
Total costs and expenses....................................              97.2%            93.6%             91.6%
                                                                     -------------    -------------     -------------
Income before income taxes..................................               2.8%             6.4%              8.4%
                                                                     =============    =============     =============

Towing Services Segment
-----------------------
Net sales...................................................             100.0%           100.0%            100.0%
Costs and expenses:
   Costs of operations......................................              75.7%            71.3%             71.9%
   Selling, general and administrative......................              24.0%            24.2%             21.7%
   Interest expense, net....................................               3.0%             2.1%              2.4%
                                                                     -------------    -------------     -------------
Total costs and expenses....................................             102.8%            97.6%             96.0%
                                                                     -------------    -------------     -------------
Income before income taxes..................................             (2.8%)             2.4%              4.0%
                                                                     =============    =============     =============
</TABLE>

                                      -21-
<PAGE>

YEAR ENDED APRIL 30, 1999 COMPARED TO YEAR ENDED APRIL 30, 1998

         Net sales for the year ended April 30, 1999  increased  32.4% to $525.9
million from $397.2 million for the comparable  period in 1998. Net sales in the
towing and recovery  equipment  segment  increased  21.3% to $342.3 million from
$282.2 million for the comparable  period in 1998. The increase in net sales was
primarily  the result of higher unit sales and the  inclusion for a full year of
sales for the Chevron  manufacturing  operation acquired during fiscal 1998. Net
sales in the towing  services  segment  increased  59.6% to $183.5  million from
$115.0 million for the comparable  period in 1998. The increase in net sales was
primarily  the  result of (i) the  inclusion  for a full year of sales of towing
service  companies  acquired  in  fiscal  1998,  (ii) the  inclusion  since  the
acquisition dates in fiscal 1999 of sales from towing service companies acquired
via purchase transactions, and (iii) same store sales growth in fiscal 1999 over
fiscal 1998.

         Costs of  operations  for the  Company  as a  percentage  of net  sales
increased  to 82.8%  for the year  ended  April  30,  1999  from  80.4%  for the
comparable  prior year  period.  In the towing and recovery  equipment  segment,
costs of operations as a percentage of net sales increased to 86.6% for the 1999
fiscal year as compared to 84.1% in the prior year.  This increase was primarily
the  result  of  charges  incurred  in  the  consolidation  and  integration  of
production,   which  were  mostly  related  to  inventory.   In  addition,   the
implementation  of a new  information  and  production  system in the  segment's
largest  plant  resulted  in  higher  than   anticipated   operating  costs  and
inefficiencies  during the fourth quarter,  including higher direct and indirect
labor  costs.  The segment also  experienced  higher  material  costs as outside
fabricators  and  suppliers  were more  heavily  relied upon to meet  production
schedules  during  this  period.  In  the  towing  services  segment,  costs  of
operations  as a percentage  of net sales  increased to 75.7% for the year ended
April 30, 1999 from 71.3% for the  comparable  prior  period.  This increase was
primarily the result of increased  labor costs of the towing service  operations
along with the associated  employee  benefits and worker's  compensation  costs,
increased  depreciation on additions to the fleet and increased  insurance costs
due to the loss experience.

         Selling, general and administrative expenses for the Company for fiscal
1999  increased  52.5% to $75.3  million from $49.4  million for the  comparable
period of fiscal 1998. In the towing and recovery  equipment  segment,  selling,
general and  administrative  expenses for fiscal 1999  increased  44.9% to $31.3
million  from $21.6  million  for the  comparable  period of fiscal  1998.  This
increase was  primarily  due to the inclusion for a full year of expense for the
Chevron  manufacturing  operation  acquired during fiscal 1998,  increased costs
related to the new information  systems and increased  professional  fees during
the year.  As a percentage  of net sales,  selling,  general and  administrative
expenses  in the  segment  were 9.1% and 7.7% for fiscal  1999 and fiscal  1998,
respectively.   In  the  towing   services   segment,   selling,   general   and
administrative  expenses for fiscal 1999  increased  58.4% to $44.1 million from
$27.8  million for the  comparable  period of fiscal 1998.  The increase was due
primarily  to the impact of the  significant  expansion  of  RoadOne's  business
referred  to above  and to  incremental  resources  added to  support  RoadOne's
growth.  As a percentage  of net sales,  selling,  general,  and  administrative
expenses were 24.0% and 24.2% for fiscal 1999 and fiscal 1998, respectively.

         Net  interest  expense for the Company for fiscal 1999  increased  $7.0
million to $10.4  million  from $3.4  million for fiscal 1998  primarily  due to
increased  borrowing  under the Company's line of credit to fund working capital
and equipment needs and acquisitions of businesses.

                                      -22-
<PAGE>

         Income  taxes are  accounted  for on a  consolidated  basis and are not
allocated by segment.  The effective  rate of the provision for income taxes was
50.7% for fiscal 1999 and 39.3% for fiscal 1998. The difference is primarily due
to the impact of a higher level of non-deductible goodwill amortization relative
to income before income taxes in fiscal 1999 as compared to 1998.

RESULTS OF QUARTER ENDED APRIL 30, 1999

         The Company  reported a net loss of $4.5  million for the three  months
ended April 30, 1999  compared to net income of $3.2 million for the  comparable
prior year  period.  Operating  results for the fiscal 1999 fourth  quarter were
adversely  affected by costs resulting from the consolidation and integration of
some  of  the  Company's  product  lines.  Other  factors  adversely   affecting
profitability in the quarter include costs and inefficiencies resulting from the
implementation  of a new  information  and production  management  system in the
Company's  largest  manufacturing  facility.  Operating  income  of  the  towing
services  segment was  negatively  affected  by mild  weather  conditions  which
reduced  the volume of towing  activity in the  quarter,  and higher than normal
operating expenses.

YEAR ENDED APRIL 30, 1998 COMPARED TO YEAR ENDED APRIL 30, 1997

         Net sales of the Company  for the year ended  April 30, 1998  increased
35.8% to $397.2 million from $292.4  million for the comparable  period in 1997.
Net sales in the towing and recovery equipment segment increased 10.7% to $282.2
million from $255.0 million for the  comparable  period in 1997. The increase in
net sales in the segment was primarily the result of (i) higher unit sales, (ii)
the  inclusion  since  the  acquisition  date in fiscal  1998 of sales  from the
Chevron  manufacturing  operation,  (iii) an increase in sales of truck  chassis
sold by the  domestic  manufacturing  operations  to third  parties and (iv) the
inclusion of sales of the acquired distributors. Net sales in the towing service
segment increased 207.3% to $115.0 million from $37.4 million for the comparable
period in 1997.  The increase in net sales was  primarily  the result of (i) the
inclusion  for a full year of sales of the  towing  service  companies  acquired
during fiscal 1997, and (ii) the inclusion since the acquisition dates in fiscal
1998 of sales from towing service companies.

         Costs of operations as a percentage of net sales decreased  slightly to
80.4%  for the  from  81.6%  for the  comparable  prior  year  period.  Costs of
operations of the towing and recovery  equipment  segment as a percentage of net
sales  increased  from  83.0% in fiscal  1997 to 84.1% due  primarily  to normal
increases  in labor and plant  overhead  costs  and costs of  re-aligning  plant
production in the segment's Ooltewah facility to accommodate the transfer of the
Vulcan production line to the Ooltewah plant.  Costs of operations of the towing
services  segment as a percentage  of net sales  decreased to 71.3% for the year
ended April 30, 1998 from 71.9% for the comparable prior period. The decrease is
primarily the result of the towing services segment  acquisitions  during fiscal
1998 and 1997 as referred to above.

         Selling,  general and administrative expenses of the Company for fiscal
1998  increased  63.7% to $49.4  million from $30.2  million for the  comparable
period of fiscal 1997.  Selling,  general,  and  administrative  expenses of the
towing and recovery  equipment  segment as a percentage  of net sales  decreased
from  8.7% in  fiscal  1997 to 7.7% in  fiscal  1998  primarily  as a result  of
achieving a higher level of sales without incurring a proportionate  increase in
selling,   general,   and  administrative   expenses.   Selling,   general,  and
administrative  expenses of the towing  services  segment as a percentage of net
sales increased to 24.2% in fiscal 1998 from 21.7% in fiscal 1997 primarily as a
result of the incremental  resources added to support the significant  growth of
the segment.

         During  the  second  quarter of fiscal  1998,  the towing and  recovery
equipment  segment  recorded a one-time  pretax  charge of $4.1  million for the
Olive Branch,  Mississippi  facility closure and  consolidation of manufacturing
operations.

         Net  interest  expense for fiscal 1998  increased  $2.8 million to $3.4
million from $0.6 million for fiscal 1997 primarily due to increased  borrowings
under  the  Company's  line  of  credit  to  fund  working   capital  needs  and
acquisitions of businesses.

                                      -23-
<PAGE>

         Income  taxes are  accounted  for on a  consolidated  basis and are not
allocated by segment.  The effective  rate of the provision for income taxes was
39.3% for fiscal 1998 and 36.7% for fiscal 1997.  The increase was due primarily
to the impact of a higher level of nondeductible goodwill amortization in fiscal
1998 than in fiscal 1997.

LIQUIDITY AND CAPITAL RESOURCES

         The Company's  primary capital  requirements  are for working  capital,
debt service, and capital expenditures.  The Company has financed its operations
and growth from internally  generated funds and debt financing and, since August
1994,  in part  from the  proceeds  from its  initial  public  offering  and its
subsequent public offerings completed in January 1996 and November 1996. The net
proceeds of the public  offerings were used to repay long-term  debt,  including
that of acquired companies,  redeem cumulative preferred stock of a wholly owned
subsidiary,  increase working capital,  provide funds for capital  expenditures,
acquisition of businesses, and other general corporate purposes.

     Cash provided by operating  activities  was $3.5 million for the year ended
April  30,  1999  as  compared  to  $20.3  million  used in  operations  for the
comparable  period of 1998. The cash provided by operating  activities in fiscal
1999 was  primarily  the result of an increase  in accounts  payable due to more
favorable terms obtained from certain vendors.

         Cash used in  investing  activities  was $32 million for the year ended
April 30, 1999 compared to $46.3 million for the year ended April 30, 1998.  The
cash used in investing activities was primarily for the acquisition of companies
and for capital expenditures.

         Cash  provided by financing  activities  was $30.6 million for the year
ended April 30,  1999  compared to $65.5  million for the  comparable  period in
1998. The cash was provided  primarily by borrowing  under the Company's  credit
facilities  of $40  million  reduced by  payments  on debt  obligations  of $7.6
million and the repurchase of its common stock of $2.3 million. The net proceeds
were used to repay debt, including that of acquired companies, for other capital
expenditures,  for working  capital,  for the acquisition of companies,  and for
other general corporate purposes.

         At April 30, 1999, the Company had a $175 million  unsecured  revolving
credit facility with a group of banks (the "Credit Facility").  Borrowings under
the  Credit  Facility  at April 30,  1999 bore  interest  at a rate equal to the
London  Interbank  Offered Rate  ("LIBOR")  plus a margin  ranging from 0.75% to
2.00% based on a specified  ratio of funded  indebtedness  to  earnings,  or the
prime rate.  At April 30, 1999,  $125 million was  outstanding  under the Credit
Facility.  The Credit Facility imposes  restrictions on the Company with respect
to the maintenance of certain financial ratios,  the incurrence of indebtedness,
the sale of assets, capital expenditures,  mergers and acquisitions.

         The Credit  Facility  was  amended in July 1999 to waive the  Company's
failure to comply with certain of those  financial  ratios at April 30, 1999. In
connection with the amendment, the applicable interest rate for borrowings under
the  Credit  Facility  was  increased  to  LIBOR  plus a  margin  of  2.5%,  for
LIBOR-based  borrowings,  and to the prime rate plus a margin of 1.25% for prime
rate-based borrowings, through January 31, 2000. In addition, as a result of the
amendment,  the Credit Agreement is  collateralized  by substantially all of the
assets and  properties of the Company and its domestic  subsidiaries.  On May 1,
1998,  the Company  entered into an interest  rate swap  agreement  covering $50
million of  variable-rate  debt. The agreement  fixes the interest rate at 5.68%
plus the  applicable  margin for a period of three years unless  canceled by the
bank at the end of two years. The amendment also places certain  restrictions on
the ability of the Company to continue to acquire businesses.

                                      -24-
<PAGE>

         The  Company's  board of  directors  approved a share  repurchase  plan
during fiscal 1998 under which the Company may repurchase up to 2,000,000 shares
of its common stock from time to time until  September  30, 1999. It is expected
that  such  repurchased  shares  would be issued as  consideration  in  business
acquisitions  currently  being  negotiated  pursuant  to the  Company's  ongoing
acquisition strategy. All shares purchased under the plan during fiscal 1998 and
1999 (500,000 shares at a cost of $2.3 million for the year ended April 30, 1999
and 547,900  shares at a cost of $4.2 million for the year ended April 30, 1998)
were reissued as consideration for towing services  companies  acquired prior to
April 30, 1999.

STRATEGIC AND FINANCIAL ALTERNATIVES STUDY

         The  Company  announced  in May 1999  that its Board of  Directors  had
concluded its study of potential  strategic and financial  alternatives  for the
Company and had ratified its Special  Committee's  recommendation to investigate
and pursue the  possibility of separating the Company's  RoadOne towing services
segment  from its  towing  and  recovery  equipment  segment  through a tax-free
spinoff which would result in the formation of two public companies. The Company
engaged  J.C.  Bradford & Co. as its  financial  advisor  with  respect to these
matters.

         Completing any such separation of the two businesses through a tax-free
spinoff  transaction  would  entail the  satisfaction  of  numerous  significant
conditions which at this time are uncertain.  These conditions include,  but are
not limited to, securing an IRS private letter ruling,  an SEC no-action letter,
satisfactory banking  arrangements,  the approval of the Company's  shareholders
and a final decision to proceed by the Board of Directors.  The Company can give
no assurance that any such transaction will occur. The Company currently expects
that the  spinoff  transaction,  if  completed,  would not occur any sooner than
during the fourth quarter of the fiscal year ending April 30, 2000.

RECENT ACCOUNTING PRONOUNCEMENTS

         In June 1998, the Financial  Accounting Standards Board ("FASB") issued
SFAS No. 133,  "Accounting for Derivative  Instruments and Hedging  Activities,"
effective for fiscal years beginning after June 15, 1999. In June 1999, the FASB
issued SFAS No. 137, which delayed the effective date of SFAS No. 133 until 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.

         The Company has not yet  quantified the impact of adopting SFAS No. 133
on its financial  statements  and has not  determined the timing of or method of
adoption of SFAS No. 133.  However,  SFAS No. 133 could  increase  volatility in
earnings and other comprehensive income.


                                      -25-
<PAGE>

YEAR 2000

         The  "Year   2000"   issue   refers  to  the   possibility   that  some
date-sensitive computer software was written with two digits rather than four to
define the  applicable  year.  This  software  will not  interpret the "00" year
correctly, and may experience problems. In addition, any equipment that has time
sensitive  embedded  chips  may  have  similar  date-related  problems.  If  not
corrected,  these  computer  programs or embedded  chips  could  possibly  cause
systems to fail or other errors,  leading to possible  disruptions in operations
or creation of erroneous results.

         The Company,  in an  enterprise-wide  effort, is taking steps to ensure
that its systems are secure from such failures. Our Year 2000 plan addresses the
anticipated impacts of the Year 2000 problem on our information  technology (IT)
systems and on non-IT systems involving embedded chip technologies.  We are also
surveying  key  third  parties  to  determine  the  status  of their  Year  2000
compliance programs. In addition, we are developing contingency plans specifying
what the Company will do if it or important third parties experience disruptions
as a result of the Year 2000 problem.

         Our  Year  2000  plan  is  subject  to  modification,  and  is  revised
periodically  as  additional  information  is developed.  The Company  currently
believes  that its Year 2000 plan will be completed for all key aspects prior to
the anticipated Year 2000 failure dates.

         With  respect  to IT  systems,  our Year  2000 plan  includes  programs
relating to (i)  computer  applications,  including  those for  servers,  client
server systems,  and personal  computers and (ii) IT  infrastructure,  including
hardware,  software, network technology,  and voice and data communications.  In
the case of non-IT  systems,  our Year 2000 plan  includes  programs  related to
equipment  and processes  required to produce our products in our  manufacturing
plants.

         With respect to its applications programs, the Company's  manufacturing
plants began  implementing  a Year 2000  compliant ERP system in 1997.  Although
this project included initiatives outside of the scope of the Year 2000, the new
system  replaced  an  older   non-compliant   system.   The  Company's   largest
manufacturing  facility has completed its  implementation.  The remaining plants
are scheduled to complete the  implementation  of their  computerized  functions
prior to the  anticipated  Year 2000  failure  dates.  The new ERP  system  also
contains the Company's financial applications,  with implementation completed in
Fiscal 1999. These  implementations were not accelerated due to Year 2000 issues
and,  therefore,  their costs are not  included in the  discussion  of Year 2000
costs below.

         The Company's  towing services  segment began  development in 1998 of a
new  dispatch  system  which  will  assist in  resolving  its Year 2000  issues.
Approximately  $1.5 million of the cost of this system is being  accelerated  to
assist in resolving  Year 2000 issues and is included in the  discussion of Year
2000 costs below. This segment has also initiated a remediation plan for some of
the existing dispatch applications.  In addition, it is developing a contingency
plan which will address  locations not remediated prior to January 1, 2000. This
segment  completed  its  implementation  of  financial  systems  on a Year  2000
compliant ERP system in Fiscal 1999.

         With  respect  to  its  infrastructure   program,   the  inventory  and
assessment  phase  is  substantially   complete.  The  implementation  phase  is
on-going,  with many components being replaced as part of the Company's  support


                                      -26-
<PAGE>

for the  implementation  of a new ERP system  for  manufacturing  and  financial
applications.  The new  dispatch  system  that the  towing  services  segment is
implementing will centralize all processing to one location. This new processing
infrastructure to support the dispatch application is constructed.  RoadOne will
continue  to  assess  and  replace  client  infrastructure  at each of its field
locations as the dispatch application is rolled out.

         With respect to its non-IT program, the Company is identifying embedded
chip technology at all  manufacturing  locations.  A limited amount of operating
equipment is date sensitive.  Manufacturers of the affected  equipment are being
contacted.   The  Company  is  evaluating   the  suggested   modifications   and
replacements.
The plan is to complete remediation of these systems by the end of the year.

         The Company  has  initiated  inquiries  of major  business  partners to
assess their state of readiness regarding Year 2000 issues that could materially
and adversely impact the Company. These major business partners include, but are
not limited to suppliers,  financial  institutions,  benefit providers,  payroll
services,  and  customers,  as well as potential  failures in public and private
infrastructure  services,  including  electricity,  water,  transportation,  and
communications. The Company has requested those third parties respond in writing
that  they  will be Year  2000  compliant  by the end of 1999.  The  Company  is
reviewing the responses as received and is assessing the third parties'  efforts
in  addressing  Year 2000  issues.  Further,  the  Company is in the  process of
determining  its  vulnerability  if these third parties fail to remediate  their
Year 2000 problems.  Contingency plans are being developed and include,  but are
not limited to, using alternate  vendors,  manual  interfaces,  and hard copies.
There can be no guarantee  that the systems of third  parties will be remediated
on a timely basis,  or that such parties'  failure to remediate Year 2000 issues
would not have a material adverse effect on the Company.

     The total  cost of the  Company's  Year  2000  project  includes  costs for
installing  certain new hardware  and software  upgrades in both of its business
segments of approximately $0.5 million and the cost of acceleration of a portion
of its new dispatch software in its towing services segment of $1.5 million. The
total cost of our Year 2000 efforts is expected to be about $2.0 million,  which
is being expensed as incurred except for hardware or software  replacement costs
that have been or will be  capitalized.  About $0.1  million of the total amount
was incurred  through the end of fiscal 1999,  and  approximately  an additional
$1.9 million will be incurred in the remainder of calendar  1999. The timing and
amount  of  these  future   expenditures  are  forward-looking  and  subject  to
uncertainties  relating to the  Company's  ongoing  assessment  of the Year 2000
issue, and appropriate  remediation efforts,  contingency plans and responses to
any problems that may arise.  The  Company's  Year 2000 expenses are paid out of
its annual budget for information services.

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

         The  response  to this  item is  included  in Part IV,  Item 14 of this
Report.

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

         Not applicable.




                                      -27-
<PAGE>

                                    PART III

ITEM 10.   DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT


         The information  contained under the headings  "PROPOSAL 1: ELECTION OF
DIRECTORS" AND COMPLIANCE  WITH SECTION 16(A) OF THE SECURITIES AND EXCHANGE ACT
OF  1934"  in the  definitive  Proxy  Statement  used  in  connection  with  the
solicitation of proxies for the  Registrant's  Annual Meeting of Shareholders to
be filed  with the  Commission,  is hereby  incorporated  herein  by  reference.
Pursuant  to  Instruction  3 to  Paragraph  (b) of Item 401 of  Regulation  S-K,
information  relating to the executive officers of the Registrant is included in
Item 1 of this Report.


ITEM 11. EXECUTIVE COMPENSATION

         The information contained under the heading "EXECUTIVE COMPENSATION" in
the definitive  Proxy  Statement  used in connection  with the  solicitation  of
proxies for the Registrant's Annual Meeting of Shareholders to be filed with the
Commission, is hereby incorporated herein by reference.  Pursuant to Instruction
3 to Paragraph (b) of Item 401 of Regulation  S-K,  information  relating to the
executive officers of the Registrant is included in Item 1 of this Report.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT


         The  information  contained  under the heading  "SECURITY  OWNERSHIP OF
CERTAIN BENEFICIAL OWNERS AND MANAGEMENT" in the definitive Proxy Statement used
in  connection  with the  solicitation  of proxies for the  Registrant's  Annual
Meeting of Shareholders to be filed with the Commission,  is hereby incorporated
herein by reference.



       For  purposes  of   determining   the  aggregate   market  value  of  the
Registrant's  voting  stock held by  nonaffiliates,  shares  held by all current
directors and  executive  officers of the  Registrant  have been  excluded.  The
exclusion  of such  shares is not  intended  to,  and shall  not,  constitute  a
determination  as to  which  persons  or  entities  may be  "affiliates"  of the
Registrant as defined by the Securities and Exchange Commission.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

         None.


                                     PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

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


                                      -28-
<PAGE>
<TABLE>
<CAPTION>

1.        FINANCIAL STATEMENTS
                                                                                   Page Number
Description                                                                         in Report
-----------                                                                        -----------

<S>                                                                                     <C>
Report of Independent Public Accountants.........................................       F-1
Consolidated Balance Sheets as of April 30, 1999 and 1998........................       F-2
Consolidated Statements of Income for the years ended April 30, 1999, 1998 and
1997.............................................................................       F-3
Consolidated Statements of Stockholders' Equity for the years ended April 30,
1999, 1998 and 1997..............................................................       F-4
Consolidated Statements of Cash Flows for the years ended April 30, 1999, 1998,
and 1997.........................................................................       F-5
Notes to Consolidated Financial Statements.......................................       F-6


2.        FINANCIAL STATEMENT SCHEDULES

                                                                                   Page Number
Description                                                                         in Report
-----------                                                                        -----------

Report of Independent Public Accountants........................................       S-1
Schedule II - Valuation and Qualifying Accountants..............................       S-2
</TABLE>

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:

<TABLE>
<CAPTION>
                                                          INCORPORATED BY
                                                            REFERENCE TO                                                 EXHIBIT
                                                        REGISTRATION OR FILE      FORM OR REPORT       DATE OF REPORT   NUMBER IN
                           DESCRIPTION                         NUMBER                                                     REPORT
------------ ----------------------------------------- ------------------------ ------------------- --------------------------------
<C>           <S>                                             <C>                      <C>             <S>                 <C>
3.1          Charter of the Registrant (composite                 -                    10-K            April 30, 1998      3.1
             conformed copy)

3.2          Bylaws of the Registrant                         33-79430                 S-1               August 1994       3.2

10.1         Settlement Letter dated April 27, 1994           33-79430                 S-1               August 1994       10.7
             between Miller Group, Inc. and the
             Management Group


                                                               -29-
<PAGE>

10.5         Participants Agreement dated as of               33-79430                 S-1               August 1994      10.11
             April 30, 1994 between the Registrant,
             Century Holdings, Inc., Century Wrecker
             Corporation, William G. Miller and
             certain former shareholders of Miller
             Group, Inc.

10.20        Technology Transfer Agreement dated              33-79430                 S-1               August 1994      10.26
             March 21, 1991 between Miller Group,
             Inc., Verducci, Inc. and Jack Verducci

10.21        Form of Noncompetition Agreement                 33-79430                 S-1               August 1994      10.28
             between the Registrant and certain
             officers of the Registrant

10.22        Form of Nonexclusive Distributor                 33-79430                 S-1               August 1994      10.31
             Agreement

10.23        Miller Industries, Inc. Stock Option             33-79430                 S-1               August 1994       10.1
             and Incentive Plan**

10.24        Form of Incentive Stock Option                   33-79430                 S-1               August 1994       10.2
             Agreement**

10.25        Miller Industries, Inc. Cash Bonus               33-79430                 S-1               August 1994       10.3
             Plan**

10.26        Miller Industries, Inc. Non-Employee             33-79430                 S-1               August 1994       10.4
             Director Stock Option Plan**

10.27        Form of Director Stock Option                    33-79430                 S-1               August 1994       10.5
             Agreement**

10.28        Employment Agreement dated October 14,           33-79430                 S-1               August 1994      10.29
             1993 between Century Wrecker
             Corporation and Jeffrey I. Badgley**

10.29        First Amendment to Employment Agreement          33-79430                 S-1               August 1994      10.33
             between Century Wrecker Corporation and
             Jeffrey I. Badgley**

10.30        Form of Employment Agreement between                 -                 Form 10-K          April 30, 1995     10.37
             Registrant and each of Messrs. Madonia
             and Mish**
</TABLE>
                                                               -30-
<PAGE>
<TABLE>
<CAPTION>

                                                          INCORPORATED BY
                                                            REFERENCE TO                                                 EXHIBIT
                                                        REGISTRATION OR FILE      FORM OR REPORT       DATE OF REPORT   NUMBER IN
                           DESCRIPTION                         NUMBER                                                     REPORT
------------ ----------------------------------------- ------------------------ ------------------- --------------------------------

<C>          <S>                                              <C>                   <C>                <C>               <C>
10.31        First Amendment to Miller Industries,                -                 Form 10-K          April 30, 1995     10.38
             Inc. Non-Employee Director Stock Option
             Plan**

10.32        Second Amendment to Miller Industries,               -                 Form 10-K          April 30, 1996     10.39
             Inc. Non-Employee Director Stock Option
             Plan**

10.33        Second Amendment to Miller Industries,               -                 Form 10-K          April 30, 1996     10.40
             Inc. Stock Option and Incentive Plan**

10.34        Employment Agreement dated July 8, 1997           0-24298             Form 10-Q/A          July 31, 1997       10
             between the Registrant and William G.
             Miller**

10.35        Credit Agreement Among NationsBank of                -                 Form 10-K          April 30, 1998     10.35
             Tennessee, N.A., the Registrant and
             certain subsidiaries of Registrant
             dated January 30, 1998.

10.36        Negative Pledge Agreement Among                      -                 Form 10-K          April 30, 1998     10.36
             NationsBank of Tennessee, N.A., the
             Registrant and certain subsidiaries of
             Registrant dated January 30, 1998.

10.37        Guaranty Agreement Among NationsBank of              -                 Form 10-K          April 30, 1998     10.37
             Tennessee, N.A. and certain
             subsidiaries of Registrant dated
             January 30, 1998.

10.38        Stock Pledge Agreement Between                       -                 Form 10-K          April 30, 1998     10.38
             NationsBank of Tennessee, N.A. and the
             Registrant dated January 30, 1998.

10.39        Stock Pledge Agreement Between                       -                 Form 10-K          April 30, 1998     10.39
             NationsBank of Tennessee, N.A. and the
             certain subsidiaries of the Registrant
             dated January 30, 1998.

10.40        Revolving Note Among NationsBank of                  -                 Form 10-K          April 30, 1998     10.40
             Tennessee, N.A., the Registrant and
             certain subsidiaries of Registrant
             dated January 30, 1998.
</TABLE>
                                                               -31-
<PAGE>
<TABLE>
<CAPTION>

                                                          INCORPORATED BY
                                                            REFERENCE TO                                                 EXHIBIT
                                                        REGISTRATION OR FILE      FORM OR REPORT       DATE OF REPORT   NUMBER IN
                           DESCRIPTION                         NUMBER                                                     REPORT
------------ ----------------------------------------- ------------------------ ------------------- --------------------------------

<C>          <S>                                              <C>                   <C>                <C>               <C>
10.41        Revolving Note Among Bank of America,                -                 Form 10-K          April 30, 1998     10.41
             FSB, the Registrant and certain
             subsidiaries of Registrant dated
             January 30, 1998.
10.42        Revolving Note Among Wachovia Bank,                  -                 Form 10-K          April 30, 1998     10.42
             N.A., the Registrant and certain
             subsidiaries of Registrant dated
             January 30, 1998.
10.43        Revolving Note Among First American                  -                 Form 10-K          April 30, 1998     10.43
             National Bank, the Registrant and
             certain subsidiaries of Registrant
             dated January 30, 1998.
10.44        Swing Line Note Among NationsBank of                 -                 Form 10-K          April 30, 1998     10.44
             Tennessee, N.A., the Registrant and
             certain subsidiaries of Registrant
             dated January 30, 1998.
10.45        LC Account Agreement Among NationsBank               -                 Form 10-K          April 30, 1998     10.45
             of Tennessee, N.A., the Registrant and
             certain subsidiaries of Registrant
             dated January 30, 1998.

10.46        Amendment No. 1 to the Credit Agreement              -                 Form 10-K          April 30, 1998     10.46
             Among NationsBank of Tennessee, N.A.,
             the Registrant and certain subsidiaries
             of Registrant dated January 31, 1998.

10.47        Form of Indemnification Agreement dated              -                 Form 10-Q        September 14, 1998     10
             June 8, 1998 by and between the
             Registrant and each of William G.
             Miller, Jeffrey I. Badgley, A. Russell
             Chandler, Paul E. Drack, Adam L.
             Dunayer, Stephen Furbacher, Frank
             Madonia, J. Vincent Mish, Richard H.
             Roberts, and Daniel N. Sebastian**

10.48        Employment Agreement between the                     -                 Form 10-Q         December 15, 1998    10.1
             Registrant and Jeffrey I. Badgley,
             dated September 11, 1998**

                                                               -32-
<PAGE>

10.49        Employment Agreement between the                     -                 Form 10-Q         December 15, 1998    10.2
             Registrant and Adam L. Dunayer, dated
             September 11, 1998**

10.50        Employment Agreement between the                     -                 Form 10-Q         December 15, 1998    10.3
             Registrant and Frank Madonia, dated
             September 11, 1998**

10.51        Agreement between the Registrant and                 -                 Form 10-Q         December 15, 1998    10.4
             Jeffrey I. Badgley, dated September 11,
             1998**

10.52        Agreement between the Registrant and                 -                 Form 10-Q         December 15, 1998    10.5
             Adam L. Dunayer, dated September 11,
             1998**
10.53        Agreement between the Registrant and                 -                 Form 10-Q         December 15, 1998    10.6
             Frank Madonia, dated September 11,
             1998**
10.54        Employment Agreement between the                     *
             Registrant and James A McKinney, dated
             May 12, 1999**

10.55        Agreement between the Registrant and                 *
             James A. McKinney, dated May 12, 1999**

10.56        Amendment No. 3 to the Credit Agreement              *
             Among Bank of America, N.A. d/b/a
             NationsBank, N.A. successor to
             NationsBank, N.A., the Registrant, and
             Certain Subsidiaries of Registrant
             dated July 27, 1999.
21           Subsidiaries of the Registrant                       *


23           Consent of Arthur Andersen LLP                      ***
24           Power of Attorney (see signature page)               *
27           Financial Data Schedule                             ***
</TABLE>



-----------------------------------------------------


                                                               -33-
<PAGE>
<TABLE>
<CAPTION>
                                                          INCORPORATED BY
                                                            REFERENCE TO                                                 EXHIBIT
                                                        REGISTRATION OR FILE      FORM OR REPORT       DATE OF REPORT   NUMBER IN
                           DESCRIPTION                         NUMBER                                                     REPORT
------------ ----------------------------------------- ------------------------ ------------------- --------------------------------

<C>          <S>                                              <C>                   <C>                <C>               <C>
</TABLE>

*    Filed with initial filing of this Form 10-K.
**   Management contract or compensatory plan or arrangement
***  Filed herewith.


(B)      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.


                                                               -34-
<PAGE>

                    REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS




To Miller Industries, Inc.:


We  have  audited  the  accompanying   consolidated  balance  sheets  of  MILLER
INDUSTRIES, INC. (a Tennessee corporation) AND SUBSIDIARIES as of April 30, 1999
and 1998,  and the  related  consolidated  statements  of income,  shareholders'
equity, and cash flows for each of the three years in the period ended April 30,
1999.  These  financial  statements  are  the  responsibility  of the  Company's
management.  Our  responsibility  is to express  an  opinion on these  financial
statements based on our audits.

We  conducted  our  audits  in  accordance  with  generally   accepted  auditing
standards.  Those standards 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.  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 audits provide a reasonable basis for our opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all material respects,  the financial  position of Miller  Industries,  Inc. and
subsidiaries as of April 30, 1999 and 1998, and the results of their  operations
and their cash flows for each of the three  years in the period  ended April 30,
1999 in conformity with generally accepted accounting principles.






                                            ARTHUR ANDERSEN LLP
Chattanooga, Tennessee
August 5, 1999



                                      F-1
<PAGE>
                    MILLER INDUSTRIES, INC. AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEETS

                             APRIL 30, 1999 AND 1998


                        (In thousands, except share data)


<TABLE>
<CAPTION>

                                ASSETS                                        1999               1998
                                ------                                        ----               ----
<S>                                                                      <C>                <C>
CURRENT ASSETS:
    Cash and temporary investments                                       $   9,331          $   7,367
    Accounts receivable, net of allowance for doubtful accounts of
        $3,702 and $2,117 in 1999 and 1998, respectively                    81,109             67,008
    Inventories                                                             77,912             71,839
    Deferred income taxes                                                    4,244              4,217
    Prepaid expenses and other                                              12,264              5,362
                                                                         ---------          ---------
                Total current assets                                       184,860            155,793

PROPERTY, PLANT, AND EQUIPMENT, net                                         95,984             85,849

GOODWILL, net                                                              103,292             81,605

PATENTS, TRADEMARKS, AND OTHER PURCHASED PRODUCT RIGHTS, net                 1,147              1,276

OTHER ASSETS                                                                 7,197              5,207
                                                                         ---------          ---------
                                                                         $ 392,480          $ 329,730
                                                                         =========          =========


<PAGE>


                 LIABILITIES AND SHAREHOLDERS' EQUITY                         1999               1998
                 ------------------------------------                         ----               ----

CURRENT LIABILITIES:
    Current portion of long-term obligations                             $   4,170          $   4,900
    Accounts payable                                                        42,783             27,883
    Accrued liabilities and other                                           16,458             18,236
                                                                         ---------          ---------
                Total current liabilities                                   63,411             51,019
                                                                         ---------          ---------
LONG-TERM OBLIGATIONS, less current portion                                133,850             95,778
                                                                         ---------          ---------
DEFERRED INCOME TAXES                                                        7,916              2,697
                                                                         ---------          ---------
COMMITMENTS AND CONTINGENCIES (Notes 6, 7 and 9)

SHAREHOLDERS' EQUITY:
    Preferred stock, $.01 par value; 5,000,000 shares authorized, none
        issued or outstanding                                                    0                  0

    Common stock, $.01 par value; 100,000,000 shares
        authorized, 46,679,783 and 45,941,814 shares issued and
        outstanding at 1999 and 1998, respectively                             467                459
    Additional paid-in capital                                             144,607            139,480
    Retained earnings                                                       43,068             40,862
    Accumulated other comprehensive income (expense)                          (839)              (565)
                                                                         ---------          ---------
                Total shareholders' equity                                 187,303            180,236
                                                                         ---------          ---------
                                                                         $ 392,480          $ 329,730
                                                                         =========          =========

                         The accompanying notes are an integral part of these consolidated balance sheets.
</TABLE>


                                                               F-2
<PAGE>

                    MILLER INDUSTRIES, INC. AND SUBSIDIARIES

                        CONSOLIDATED STATEMENTS OF INCOME

               FOR THE YEARS ENDED APRIL 30, 1999, 1998, AND 1997

                      (In thousands, except per share data)

<TABLE>
<CAPTION>
                                                        1999         1998         1997
                                                      --------     --------     --------

<S>                                                   <C>          <C>          <C>
NET SALES                                             $525,932     $397,213     $292,394
                                                      --------     --------     --------
COSTS AND EXPENSES:
    Costs of operations                                435,691      319,453      238,625
    Selling, general, and administrative expenses       75,368       49,420       30,192
    Restructuring costs                                      0        4,100            0
    Interest expense, net                               10,395        3,389          620
                                                      --------     --------     --------
                Total costs and expenses               521,454      376,362      269,437
                                                      --------     --------     --------

INCOME BEFORE INCOME TAXES                               4,478       20,851       22,957

INCOME TAXES                                             2,272        8,186        8,436
                                                      --------     --------     --------
NET INCOME                                            $  2,206     $ 12,665     $ 14,521
                                                      ========     ========     ========

NET INCOME PER COMMON SHARE:
    Basic                                             $   0.05     $   0.28     $   0.37
                                                      ========     ========     ========

    Diluted                                           $   0.05     $   0.27     $   0.35
                                                      ========     ========     ========

WEIGHTED AVERAGE SHARES OUTSTANDING:
    Basic                                               46,338       44,559       39,565
                                                      ========     ========     ========

    Diluted                                             47,266       46,201       41,454
                                                      ========     ========     ========
</TABLE>



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


                                      F-3
<PAGE>
<TABLE>
<CAPTION>
                                            MILLER INDUSTRIES, INC. AND SUBSIDIARIES

                                         CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

                                       FOR THE YEARS ENDED APRIL 30, 1999, 1998, AND 1997
                                                (In thousands, except share data)


                                                                                                          Accumulated
                                                                                                             Other
                                                                                 Additional             Comprehensive
                                                                       Common      Paid-In    Retained      Income
                                                                       Stock      Capital     Earnings     (Expense)     Total
                                                                       -----      -------     --------     ---------     -----
<S>                                                                 <C>         <C>          <C>         <C>          <C>
BALANCE, April 30, 1996                                             $    373    $  54,808    $ 16,749    $     (17)   $  71,913

    Comprehensive income:
        Net income                                                         0            0      14,521            0       14,521
        Other comprehensive income, net of tax:
           Foreign currency translation adjustments                        0            0           0         (425)        (425)
                                                                                                                      ---------
    Comprehensive income                                                                                                 14,096
    Exercise of stock options                                              6        1,170           0            0        1,176
    Issuance of 1,943,028 common shares through a public offering         19       29,225           0            0       29,244
    Issuance of 2,709,503 common shares in acquisitions                   27       25,570      (2,530)           0       23,067
    Distributions to former shareholders of pooled entities                0            0        (713)           0         (713)
                                                                    --------    ---------    --------    ---------    ---------
BALANCE, April 30, 1997                                                  425      110,773      28,027         (442)     138,783

    Comprehensive income:
        Net income                                                         0            0      12,665            0       12,665
        Other comprehensive income, net of tax:
           Foreign currency translation adjustments                        0            0           0         (123)        (123)
                                                                                                                      ---------
    Comprehensive income                                                                                                 12,542
    Exercise of stock options                                              2        1,558           0            0        1,560
    Issuance of 3,709,560 common shares in acquisitions                   37       31,356         170            0       31,563
    Repurchase of 547,900 common shares                                   (5)      (4,207)          0            0       (4,212)
                                                                    --------    ---------    --------    ---------    ---------
BALANCE, April 30, 1998                                                  459      139,480      40,862         (565)     180,236

    Comprehensive income:
        Net income                                                         0            0       2,206            0        2,206
        Other comprehensive income, net of tax:
           Foreign currency translation adjustments                        0            0           0         (274)        (274)
                                                                                                                      ---------
    Comprehensive income                                                                                                  1,932
    Exercise of stock options                                              1           93           0            0           94
    Issuance of 1,242,167 common shares in acquisitions                   12        7,368           0            0        7,380
    Repurchase of 500,000 common shares                                   (5)      (2,334)          0            0       (2,339)
                                                                    --------    ---------    --------    ---------    ---------
BALANCE, April 30, 1999                                             $    467   $ 144,607     $  43,068    $   (839)   $ 187,303
                                                                    ========   =========     =========    ========    =========

                            The accompanying notes are an integral part of these consolidated statements.
</TABLE>

                                                                F-4

<PAGE>
<TABLE>
<CAPTION>
                                            MILLER INDUSTRIES, INC. AND SUBSIDIARIES


                                              CONSOLIDATED STATEMENTS OF CASH FLOWS

                                       FOR THE YEARS ENDED APRIL 30, 1999, 1998, AND 1997

                                                         (In thousands)
                                                                                                   1999        1998        1997
                                                                                               --------    --------    --------
<S>                                                                                            <C>         <C>         <C>
OPERATING ACTIVITIES:
    Net income                                                                                 $  2,206    $ 12,665    $ 14,521
    Adjustments  to  reconcile  net  income  to net cash  provided  by (used in)
        operating activities:
            Depreciation and amortization                                                        15,500      10,247       5,782
            Gain on disposals of property, plant, and equipment                                    (837)     (1,359)       (170)
            Deferred income tax provision (benefit)                                               5,054         927        (703)
            Changes in operating assets and liabilities,  net of acquisitions of businesses:
                Accounts receivable                                                             (10,181)    (13,281)    (10,385)
                Inventories                                                                      (6,209)     (2,316)    (20,442)
                Prepaid expenses and other                                                       (9,706)     (2,462)      1,312
                Accounts payable                                                                 12,554     (17,993)     (1,124)
                Accrued liabilities and other                                                    (4,906)     (6,742)        200
                                                                                               --------    --------    --------
                    Net cash provided by (used in) operating activities                           3,475     (20,314)    (11,009)
                                                                                               --------    --------    --------
INVESTING ACTIVITIES:
    Acquisition of businesses, net of cash acquired                                             (19,867)    (25,286)     (7,701)
    Purchases of property, plant, and equipment                                                 (18,998)    (26,515)    (11,073)
    Proceeds from sales of property, plant, and equipment                                         6,606       4,345         297
    Payments received on notes receivable                                                           272         627           0
    Proceeds from sale of finance receivables                                                         0       3,861      24,596
    Funding of finance receivables                                                                    0      (2,262)    (28,679)
    Other                                                                                             0      (1,027)       (304)
                                                                                               --------    --------    --------
                    Net cash used in investing activities                                       (31,987)    (46,257)    (22,864)
                                                                                               --------    --------    --------
FINANCING ACTIVITIES:
    Net borrowings (payments) under line of credit                                               40,000      85,000      (5,236)
    Payments on long-term obligations                                                            (7,579)    (17,292)     (7,365)
    Borrowings under long-term obligations                                                          405       1,020       1,374
    Repurchase of common stock                                                                   (2,339)     (4,212)          0
    Proceeds from exercise of stock options                                                          94         966         546
    Proceeds from issuance of common stock                                                            0           0      29,244
    Distributions to former shareholders of pooled entities                                           0           0        (713)
    Other                                                                                             0           0        (560)
                                                                                               --------    --------    --------
                    Net cash provided by financing activities                                    30,581      65,482      17,290
                                                                                               --------    --------    --------
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND TEMPORARY INVESTMENTS
                                                                                                   (105)        (52)        (26)

NET CHANGE IN CASH AND TEMPORARY INVESTMENTS                                                      1,964      (1,141)    (16,609)
CASH AND TEMPORARY INVESTMENTS, beginning of year                                                 7,367       8,508      25,117
                                                                                               --------    --------    --------
CASH AND TEMPORARY INVESTMENTS, end of year                                                    $  9,331    $  7,367    $  8,508
                                                                                               ========    ========    ========

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
    Cash payments for interest, net of amounts capitalized                                     $ 10,433    $  3,440    $  1,298
                                                                                               ========    ========    ========

    Cash payments for income taxes                                                             $  5,011    $  7,662    $  7,898
                                                                                               ========    ========    ========

  The accompanying notes are an integral part of these consolidated statements.
</TABLE>


                                                               F-5
<PAGE>
                    MILLER INDUSTRIES, INC. AND SUBSIDIARIES


                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                             APRIL 30, 1999 AND 1998


  1.   ORGANIZATION AND NATURE OF OPERATIONS

       Miller Industries, Inc. and subsidiaries ("the Company") is an integrated
       provider of vehicle towing and recovery equipment,  systems and services.
       The  principal  markets  for  the  towing  and  recovery   equipment  are
       independent  distributors  and users of  towing  and  recovery  equipment
       located primarily throughout the United States, Canada, Europe, Asia, and
       the Middle East.  The  Company's  products  are marketed  under the brand
       names of Century,  Challenger,  Holmes, Champion,  Eagle, Jige, Boniface,
       Vulcan,  and  Chevron.  The truck  chassis on which  towing and  recovery
       equipment  are  installed  are either  purchased by Miller or provided by
       customers.

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


  2.   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 repurchase agreements.


                                      F-6
<PAGE>
       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  at  April  30,  1999  and 1998
       consisted of the following (in thousands):

                                    1999        1998
                                   -------     -------

               Chassis             $18,340     $14,211
               Raw materials        16,348      22,027
               Work in process      12,180      11,470
               Finished goods       31,044      24,131
                                   -------     -------
                                   $77,912     $71,839
                                   =======     =======


       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  purposes.  Estimated  useful lives range
       from 20 to 30 years for buildings and  improvements and 5 to 10 years for
       machinery and  equipment,  furniture,  fixtures,  vehicles,  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.

       Property,  plant,  and equipment at April 30, 1999 and 1998  consisted of
       the following (in thousands):

                                                    1999           1998
                                                 ---------      ---------

               Land                              $   4,535      $   5,027
               Buildings and improvements           23,354         18,849
               Machinery and equipment              88,429         80,302
               Furniture and fixtures               11,317          8,448
               Software costs                        4,786          1,660
               Construction in progress                810            957
                                                 ---------      ---------
                                                   133,231        115,243
               Less accumulated depreciation       (37,247)       (29,394)
                                                 ---------      ---------
                                                 $  95,984      $  85,849
                                                 =========      =========


                                      F-7
<PAGE>

        NET INCOME PER SHARE

       Basic net  income per share is  computed  by  dividing  net income by the
       weighted average number of common shares outstanding.  Diluted net income
       per share is  calculated  by dividing net income by the weighted  average
       number  of common  and  potential  dilutive  common  shares  outstanding.
       Diluted  net  income  per share  takes  into  consideration  the  assumed
       conversion of  outstanding  stock options  resulting in 0.9 million,  1.6
       million,  and 1.9 million potential  dilutive common shares for the years
       ended April 30, 1999, 1998, and 1997, respectively.  Per share amounts do
       not include the assumed  conversion of stock options with exercise prices
       greater  than the average  share  price  because to do so would have been
       antidilutive for the periods presented.

       In September 1996 and December  1996, the Company  effected a two-for-one
       and a three-for-two common stock split, respectively, each in the form of
       a stock  dividend.  All historical  share and per share amounts have been
       retroactively restated to reflect the common stock splits.

       GOODWILL

       Goodwill is being amortized on a straight-line  basis over 40 years.  The
       Company  periodically  evaluates  whether events and  circumstances  have
       occurred  which  would   indicate  that  goodwill  is  not   recoverable.
       Accumulated  amortization  of goodwill was  $4,709,000  and $2,233,000 at
       April 30,  1999 and 1998,  respectively.  Amortization  expense for 1999,
       1998, and 1997 was $2,476,000, $1,434,000, and $253,000, respectively.

       PATENTS, TRADEMARKS, AND OTHER PURCHASED PRODUCT RIGHTS

       The cost of acquired  patents,  trademarks,  and other purchased  product
       rights are capitalized and amortized using the straight-line  method over
       various periods not exceeding 20 years. Total accumulated amortization of
       these  assets  at April  30,  1999 and 1998 was  $561,000  and  $364,000,
       respectively. Amortization expense for 1999, 1998, and 1997 was $473,000,
       $271,000, and $64,000, respectively.

       ACCOUNTS PAYABLE

       Accounts  payable  includes  checks  written  but not yet  presented  for
       payment  at  April  30,  1999  and  1998 of  $5,215,000  and  $6,409,000,
       respectively.

       ACCRUED LIABILITIES AND OTHER

       Accrued  liabilities  and other  consisted of the  following at April 30,
       1999 and 1998 (in thousands):

                                                          1999       1998
                                                        -------    -------
            Accrued wages, commissions,
              bonuses, and benefits                     $ 9,041    $ 7,607
            Accrued income taxes                            265        828
            Other                                         7,152      9,801
                                                        -------    -------
                                                        $16,458    $18,236
                                                        =======    =======

                                      F-8
<PAGE>
       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 1999, 1998, and
       1997 was $1,719,000, $1,035,000, and $1,057,000, respectively.

       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,  and such  receivables  are generally not
       collateralized.  The Company  monitors its exposure for credit losses and
       maintains allowances for anticipated losses.

       REVENUE RECOGNITION

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

       INTEREST RATE SWAP AGREEMENT

       The Company has entered  into an  interest  rate swap  agreement  for the
       purpose of managing its interest  rate  exposure.  The swap  agreement is
       accounted  for on an accrual  basis and  amounts  to be paid or  received
       under the  agreement  are  recorded in interest  expense in the period in
       which they accrue.

       RECENT ACCOUNTING PRONOUNCEMENTS

       In June 1998, the Financial  Accounting  Standards  Board ("FASB") issued
       SFAS  No.  133,  "Accounting  for  Derivative   Instruments  and  Hedging
       Activities", effective for fiscal years beginning after June 15, 1999. In
       June 1999, the FASB issued SFAS No. 137, which delayed the effective date
       of SFAS No. 133 until 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.

       The Company has not yet quantified the impact of adopting SFAS No. 133 on
       its financial  statements  and has not determined the timing of or method
       of  adoption  of SFAS No.  133.  However,  SFAS No.  133  could  increase
       volatility in earnings and other comprehensive income.

       RECLASSIFICATIONS

       Certain  reclassifications  have  been  made to  prior  years'  financial
       information to conform with the 1999 presentation.



                                      F-9
<PAGE>

  3.   BUSINESS COMBINATIONS

       All businesses  acquired  through April 30, 1999 which were accounted for
       under the purchase method of accounting are included in the  accompanying
       consolidated  financial  statements  from the dates of  acquisition.  Any
       excess of the aggregate  purchase  price over the estimated fair value of
       net assets acquired has been recognized as a component of goodwill in the
       accompanying   consolidated   financial   statements.   All   significant
       businesses acquired through April 30, 1998 which were accounted for under
       the   pooling-of-interests   method  of  accounting  have  been  included
       retroactively in the accompanying consolidated financial statements as if
       the companies had operated as one entity since inception.

       During fiscal 1997, the Company  purchased  three  distributors of towing
       and recovery  equipment  for an aggregate  purchase  price of  $4,073,000
       which  consisted  of 318,157  shares of common  stock.  The Company  also
       purchased 13 towing service companies for an aggregate  purchase price of
       $29,239,000,  which  consisted  of  $7,479,000  in cash  and  $21,760,000
       (1,639,491   shares)  of  common  stock.  These  acquisitions  have  been
       accounted  for under the  purchase  method.  The excess of the  aggregate
       purchase price over the estimated  fair value of net assets  acquired was
       approximately $32,062,000.

       Also,  during fiscal 1997,  the Company  acquired all of the  outstanding
       capital stock of Vulcan International, Inc., a manufacturer of towing and
       recovery  equipment and an additional  three  distributors  of towing and
       recovery equipment for an aggregate purchase price of $13,085,000,  which
       consisted of 1,132,513 shares of common stock. The Company also purchased
       all of the outstanding common stock of 16 towing service companies for an
       aggregate  purchase price of $28,053,000  which  consisted of $250,000 in
       cash  and  $27,803,000   (2,217,680   shares)  of  common  stock.   These
       acquisitions were accounted for under the pooling-of-interests method.

       During fiscal 1998, the Company purchased  Chevron,  Inc., a manufacturer
       of towing and recovery  equipment,  and three  distributors of towing and
       recovery equipment for an aggregate purchase price of $11,525,000,  which
       consisted of $10,818,000 in cash and $707,000  (44,113  shares) of common
       stock.  The Company also  purchased 38 towing  service  companies  for an


                                      F-10
<PAGE>

       aggregate purchase price of $45,065,000 which consisted of $14,468,000 in
       cash  and  $30,597,000   (2,798,217   shares)  of  common  stock.   These
       acquisitions  have  been  accounted  for  using  the  purchase  method of
       accounting. The excess of the aggregate purchase price over the estimated
       fair value of net assets acquired was approximately $42,516,000.

       Also,  during fiscal 1998, the Company  purchased all of the  outstanding
       capital  stock  of an  additional  distributor  of  towing  and  recovery
       equipment for a purchase price of $2,190,000,  which consisted of 151,046
       shares of common stock. The Company also purchased all of the outstanding
       common stock of nine towing service  companies for an aggregate  purchase
       price of $8,398,000,  which  consisted of 716,184 shares of common stock.
       These  acquisitions  were  accounted  for using the  pooling-of-interests
       method.

       During fiscal 1999, the Company purchased 35 towing service companies for
       an  aggregate   purchase  price  of   $29,571,000,   which  consisted  of
       $21,305,000  in  cash,   $950,000  in  promissory  notes  and  $7,316,000
       (1,232,905   shares)  of  common  stock.  These  acquisitions  have  been
       accounted for under the purchase method.  The  accompanying  consolidated
       financial statements reflect the preliminary allocation of purchase price
       as the purchase  price has not been finalized for all  transactions.  The
       excess of the aggregate  purchase  price over the estimated fair value of
       net assets acquired was approximately $20,058,000.

       The  following  unaudited  pro forma  summary  combines  the  results  of
       operations  of (i) all 1999 purchase  combinations  and the Company as if
       these  combinations had occurred at the beginning of fiscal 1998 and (ii)
       all   1998   and   1997   purchase   combinations,    the   insignificant
       pooling-of-interests   combinations,   and  the   Company   as  if  these
       combinations  had occurred at the beginning of fiscal 1997,  after giving
       effect to  certain  adjustments,  including  amortization  of  intangible
       assets and related  income tax  effects.  The pro forma  summary does not
       necessarily  reflect the results of operations as they would have been if
       the Company and these acquisitions had constituted a single entity during
       these periods (in thousands, except per share data).
<TABLE>
<CAPTION>

                                                 1999                       1998                     1997
                                        --------------------      ---------------------     ---------------------
                                           As           Pro          As          Pro          As           Pro
                                        Reported       Forma      Reported      Forma       Reported      Forma
                                        --------     --------     --------     --------     --------     --------
<S>                                     <C>          <C>          <C>          <C>          <C>          <C>
       Net sales                        $525,932     $541,904     $397,213     $489,104     $292,394     $406,194
                                        ========     ========     ========     ========     ========     ========

       Net income                       $  2,206     $  3,957     $ 12,665     $ 18,118     $ 14,521     $ 16,099
                                        ========     ========     ========     ========     ========     ========

       Diluted net income per share     $   0.05     $   0.08     $   0.27     $   0.38     $   0.35     $   0.39
                                        ========     ========     ========     ========     ========     ========
</TABLE>

       Subsequent to April 30, 1999, the Company acquired two additional  towing
       service companies for approximately $2,275,000 in cash. Also, the Company
       has executed  letters of intent to acquire five additional towing service
       companies.


                                      F-11
<PAGE>

  4.   LONG-TERM OBLIGATIONS AND LINE OF CREDIT

       LONG-TERM OBLIGATIONS

       Long-term  obligations  consisted of the  following at April 30, 1999 and
       1998 (in thousands):
<TABLE>
<CAPTION>

                                                                                            1999           1998
                                                                                         ---------      ---------
<S>                                                                                      <C>            <C>
       Outstanding borrowings under line of credit                                       $ 125,000      $  85,000

       Mortgage notes payable,  weighted average interest rate at
           5.40%,  payable in monthly installments, maturing 2003
           to 2011
                                                                                             3,209          3,508
       Equipment notes payable,  weighted average interest rate at
           9.69%, payable in monthly installments, maturing 1999 to
           2005
                                                                                             6,894          9,220
        Other notes payable                                                                  2,917          2,950
                                                                                         ---------      ---------
                                                                                           138,020        100,678
       Less current portion                                                                 (4,170)        (4,900)
                                                                                         ---------      ---------
                                                                                         $ 133,850      $  95,778
                                                                                         =========      =========
</TABLE>

       At April 30, 1999, future maturities of long-term obligations  (excluding
       future cash outflows for interest) are as follows (in thousands):


                      2000                          $    4,170
                      2001                             128,059
                      2002                               1,652
                      2003                               1,270
                      2004                               1,097
                      Thereafter                         1,772


       Certain equipment and manufacturing  facilities are pledged as collateral
       under the mortgage and equipment notes payable.

       LINE OF CREDIT

       At April 30, 1999, the Company had an unsecured revolving credit facility
       of  $175,000,000  (the "Credit  Facility") for working  capital and other
       general  corporate  purposes.  Borrowings  under the Credit Facility bear
       interest at a rate equal to the London  Interbank  Offered  Rate,  or the
       prime rate plus a margin ranging from 0.75% to 2.00% based on a specified


                                      F-12
<PAGE>

       ratio of funded indebtedness to earnings (6.68% at April 30, 1999) or the
       prime rate, as elected by the Company. The weighted average interest rate
       for borrowings outstanding under the Credit Facility during 1999 and 1998
       was  approximately  7.05% and 6.43%,  respectively.  Interest  is payable
       monthly.  The Credit Facility is due on January 30, 2001 and is renewable
       on an annual basis thereafter.

       The Credit Facility  imposes  restrictions on the Company with respect to
       the  maintenance  of  certain   financial   ratios,   the  incurrence  of
       indebtedness,  the sale of assets, capital expenditures,  and mergers and
       acquisitions.  At April 30, 1999, the Company was in violation of certain
       of these  financial  ratio  covenants for which it has received a waiver.
       The  Company  obtained  amended  agreements  dated July 27, 1999 in which
       certain  financial  ratio  covenants were amended and the Company granted
       the lending  institutions a security interest in substantially all assets
       of the Company.

       On May 1, 1998, the Company  entered into an interest rate swap agreement
       covering a notional  amount of $50 million of  variable  rate debt to fix
       the interest  rate at 5.68% plus the  applicable  margin.  The  agreement
       expires at the end of three years unless cancelled by the bank at the end
       of two years. If the Company elected to terminate the swap agreement, the
       cost as of April 30, 1999 would have been approximately $480,000.

       The Company is exposed to credit losses in the event of nonperformance by
       the  counterparty  to its  interest  rate swap  agreement  but has no off
       balance sheet risk of accounting loss. The Company anticipates,  however,
       that the counterparty will be able to fully satisfy its obligations under
       the agreement.  The Company does not obtain  collateral or other security
       to support financial  instruments subject to credit risk but monitors the
       credit standing of counterparties.


  5.   STOCK-BASED COMPENSATION PLANS

       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.

       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  nonemployee
       directors  of the Company.  Options vest ratably over a four-year  period
       beginning  on the grant date and expire ten years from the date of grant.
       Shares available for granting options at April 30, 1999 and 1998 were 0.4
       million and 1.5 million, respectively.

       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 1999,
       1998, and 1997,  respectively:  expected  dividend yield of 0%;  expected
       volatility of 52%, 51% and 42%;  risk-free  interest rate of 5.23%, 5.99%
       and 6.33%; and expected lives of 5.5 years. Using these assumptions,  the
       fair value of options  granted in 1999,  1998, and 1997 is  approximately
       $2,820,000,  $5,058,000,  and  $7,457,000,  respectively,  which would be
       amortized as compensation expense over the vesting period of the options.


                                      F-13
<PAGE>

       Had  compensation  cost for 1999, 1998, and 1997 stock option grants been
       determined based on the fair value at the grant dates consistent with the
       method  prescribed  by SFAS No.  123,  the  Company's  net income and net
       income  per share  would  have  been  adjusted  to the pro forma  amounts
       indicated below:
<TABLE>
<CAPTION>
                                             1999           1998           1997
                                         ---------      ----------     ----------
<S>                                      <C>            <C>            <C>
       Net income (in thousands):
           As reported                   $   2,206      $   12,665     $   14,521
           Pro forma                          (614)         10,447         13,624
       Basic net income per share:
           As reported                   $    0.05      $     0.28     $     0.37
           Pro forma                         (0.01)           0.24           0.34
       Diluted net income per share:
           As reported                   $    0.05      $     0.27     $     0.35
           Pro forma                         (0.01)           0.23           0.33
</TABLE>


       The  pro  forma  effect  on  net  income  in  this   disclosure   is  not
       representative  of the pro  forma  effect on net  income in future  years
       because  its does not take  into  consideration  pro  forma  compensation
       expense related to grants made prior to 1996.

       A summary of the activity of stock options during 1999, 1998, and 1997 is
presented below (shares in thousands):
<TABLE>
<CAPTION>
                                                            1999                        1998                   1997
                                                      ---------------------     --------------------    ----------------------
                                                                   Weighted                 Weighted                 Weighted
                                                      Shares        Average     Shares       Average    Shares        Average
                                                      Under        Exercise      Under      Exercise     Under        Exercise
                                                     Option         Price       Option        Price     Option          Price
                                                      ------      --- -----     ------      ---------     -----      ---------
        <S>                                           <C>        <C>            <C>        <C>           <C>        <C>
       Outstanding at Beginning of Year               4,146      $    7.97      3,768      $    6.39     2,776      $    2.98
           Granted                                    1,238           6.44        818          13.46     1,529          11.28
           Exercised                                    (34)          2.48       (300)          3.24      (515)          2.55
           Forfeited                                   (184)         11.18       (140)          7.62       (22)          6.67
                                                     ------      ---------     ------      ---------     -----      ---------
       Outstanding at End of Year                     5,166      $    7.43      4,146      $    7.97     3,768      $    6.39
                                                      =====      =========      =====      =========     =====      =========

       Options exercisable at year end                2,683      $    6.18      1,643      $    5.18       811      $    3.25
                                                      =====      =========      =====      =========     =====      =========
          Weighted average fair value
           of options granted
                                                                 $    3.15                 $    6.84               $    5.54
                                                                 =========                 =========               =========
</TABLE>



                                      F-14
<PAGE>

       A  summary  of  options  outstanding  under  the  Company's   stock-based
       compensation  plans at April  30,  1999 is  presented  below  (shares  in
       thousands):
<TABLE>
<CAPTION>

                                                Shares             Weighted                                   Weighted Average
                  Exercise                      Under              Average                  Shares           Exercise Price of
                 Price Range                    Option          Remaining Life           Exercisable         Shares Exercisable
        ---------------------------             -------         --------------           -----------         ------------------
<S>    <C>                  <C>                  <C>                  <C>                    <C>                  <C>
       $  2.33        -     $  3.37              1,123                5.3                    1,124                $  2.37
          3.78        -        5.48              1,131                7.6                      548                   4.10
          5.75        -        7.75                856                8.9                       71                   6.68
          8.79        -       12.88              1,330                7.5                      683                  10.77
         13.38        -       18.00                726                8.1                      257                  14.96
                                                 -----                ---                    -----                -------
                 Total                           5,166                7.3                    2,683                $  6.18
                                                 =====                ===                    =====                =======
</TABLE>

  6.   LEASE COMMITMENTS

       The Company has entered  into  various  operating  leases for  buildings,
       office  equipment,  and trucks.  Rental  expense  under these  leases was
       $11,256,000,   $7,952,000,  and  $455,000,  for  1999,  1998,  and  1997,
       respectively.

       At April 30, 1999,  future minimum lease  payments  under  noncancellable
       operating  leases  for the next  five  fiscal  years are as  follows  (in
       thousands):

                         2000                          $ 10,663
                         2001                             9,393
                         2002                             8,052
                         2003                             5,745
                         2004                             3,027


  7.   LITIGATION

       In  January  1998,  the  Company  received  a letter  from the  Antitrust
       Division of the  Department of Justice (the  "Division")  stating that it
       was conducting a civil  investigation  covering  "competition  in the tow
       truck  industry." The letter asked that the Company  preserve its records
       related  to the tow truck  industry,  particularly  documents  related to
       sales and prices of products and parts, acquisition of other companies in
       the industry,  distributor relations, patent matters,  competition in the
       industry generally, and activities of other companies in the industry. In
       March 1998,  the Company  received a Civil  Investigative  Demand ("CID")
       issued by the Division as part of its continuing investigation of whether
       there  are,  have  been or may be  violations  of the  federal  antitrust
       statutes  in the tow truck  industry.  Under this CID,  the  Company  has
       produced  information and documents to assist in the  investigation,  has
       corresponded and met with the Division concerning the investigation,  and
       is continuing to cooperate with the Division.  It is unknown at this time
       what the eventual outcome of the investigation will be.

       During September, October, and November 1997, five lawsuits were filed by
       certain  persons  who  seek to  represent  a class  of  shareholders  who
       purchased  shares of the  Company's  common  stock during the period from


                                      F-15
<PAGE>

       either October 15 or November 6, 1996 to September 11, 1997.  Four of the
       suits were filed in the United  States  District  Court for the  Northern
       District of Georgia.  The remaining  suit was filed in the Chancery Court
       of Hamilton County,  Tennessee.  In general, the individual plaintiffs in
       all of the cases allege that they were induced to purchase the  Company's
       common stock on the basis of allegedly actionable  misrepresentations  or
       omissions  about the Company  and its  business  and,  as a result,  were
       thereby  damaged.  Four of the  complaints  assert claims under  Sections
       10(b) and 20 of the Securities  Exchange Act of 1934. The complaints name
       as the  defendants  the  Company  and  various of its  present and former
       directors and officers. The plaintiffs in the four actions which involved
       claims in Federal  Court under the  Securities  Exchange Act of 1934 have
       consolidated those actions.  The Company filed a motion to dismiss in the
       consolidated  case  which was  granted  in part and  denied in part.  The
       proposed  class was  certified by order dated May 27,  1999.  The Company
       filed a motion to dismiss in the Tennessee  case which was granted in its
       entirety.  The  plaintiffs  in that case,  with the  permission  from the
       Court,  amended and refiled their  complaint,  which was  dismissed  with
       prejudice by order of the Court dated March 11,  1999.  On April 5, 1999,
       counsel for plaintiffs  filed a notice of appeal.  In both these actions,
       the Company has denied  liability and will continue to vigorously  defend
       itself.

       In  January  1996,  the  Company  was  awarded  a  judgment  in a  patent
       infringement  suit in the United States  District  Court for the Northern
       District  of Iowa at  Sioux  City,  Iowa in  which  the  jury  found  the
       defendant  manufacturer  and  distributor of towing  equipment  willfully
       infringed both the Company's underlift parallel linkage and L-arm patents
       and that the common owner of the manufacturer and distributor induced the
       infringement.  The judgment was paid to the Company in August 1996 in the
       amount of approximately $1.8 million, which included enhanced damages for
       willfulness  and  pre-judgment  and  post-judgment  interest  and a broad
       permanent  injunction  against  future  infringement  by the  defendants.
       Defendants  were  not  granted  a  license  to use  the  Company's  L-arm
       technology.  With  this  payment,  both the  Company  and the  defendants
       withdrew  their  appeals,  and the  judgment,  therefore,  became a final
       judgment.

       In addition to the shareholder  litigation  described  above, the Company
       is, from time to time, a party to litigation arising in the normal course
       of  business.   The  ultimate  disposition  of  such  matters  cannot  be
       determined presently,  but will not, in the opinion of management,  based
       in part on the advice of legal counsel, have a material adverse effect on
       the financial position or results of operations of the Company.


  8.   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.

                                      F-16
<PAGE>

       The provision for income taxes consisted of the following for 1999, 1998,
and 1997 (in thousands):

                                        1999         1998         1997
                                      -------      -------      -------

                      Current:
                          Federal     $(2,855)     $ 6,300      $ 7,973
                          State          (336)         720          938
                          Foreign         409          239          228
                                      -------      -------      -------
                                       (2,782)       7,259        9,139
                                      -------      -------      -------
                      Deferred:
                          Federal       4,498          713         (612)
                          State           529           81          (72)
                          Foreign          27          133          (19)
                                      -------      -------      -------
                                        5,054          927         (703)
                                      -------      -------      -------
                                      $ 2,272      $ 8,186      $ 8,436
                                      =======      =======      =======


       The principal  differences between the federal statutory tax rate and the
       consolidated effective tax rate for 1999, 1998, and 1997 were as follows:
<TABLE>
<CAPTION>
                                                                1999         1998         1997
                                                                ----         ----         ----
<S>                                                             <C>          <C>          <C>
                Federal statutory tax rate                      34.0%        35.0%        34.0%
                State taxes, net of federal tax benefit          4.0          4.0          4.0
                Non-deductible goodwill amortization            17.2          1.7          0.6
                Other                                           (4.5)        (1.4)        (1.9)
                                                                ----         ----         ----
                Effective tax rate                              50.7%        39.3%        36.7%
                                                                ====         ====         ====
</TABLE>


                                      F-17
<PAGE>

       Deferred  income tax assets and liabilities for 1999 and 1998 reflect the
       impact of  temporary  differences  between  the  amounts  of  assets  and
       liabilities  for financial  reporting and income tax reporting  purposes.
       Temporary  differences and carryforwards  which give rise to deferred tax
       assets and  liabilities  at April 30,  1999 and 1998 are as  follows  (in
       thousands):
<TABLE>
<CAPTION>
                                                                     1999        1998
                                                                   -------      ------
                <S>                                                <C>          <C>
                Deferred tax assets:
                    Allowance for doubtful accounts                $ 1,191      $  601
                    Accruals and reserves                            2,527       3,523
                    Inventory and related reserves                     148         253
                    Other                                               44          38
                                                                   -------      ------
                                  Total deferred tax assets          3,910       4,415
                                                                   -------      ------

                 Deferred tax liabilities:
                     Property, plant, and equipment                  7,004       2,680
                     Other                                             578         215
                                                                   -------      ------
                                Total deferred tax liabilities       7,582       2,895
                                                                   -------      ------
                Net deferred tax (liability) asset                 $(3,672)     $1,520
                                                                   =======      ======
</TABLE>

  9.   SALE OF FINANCE RECEIVABLES

       In April 1997,  the Company  entered  into an  agreement  to sell certain
       finance receivables to a third party leasing company for $24,596,000.  An
       additional  $3,861,000  was sold in October 1997.  The resulting  gain on
       these sales did not have a material impact on the Company's  consolidated
       financial statements.

       The agreement contingently obligates the Company to indemnify the leasing
       company for any losses it incurs up to specified amounts in the event the
       lessee defaults.  The Company  believes that any equipment  returned as a
       result of  lessee  defaults  could be sold to third  parties  at  amounts
       approximating  the debt  obligations  under  the  leases.  The  Company's
       aggregate  potential  liability  under the agreement as of April 30, 1999
       and 1998 was $2,733,000 and $5,393,000, respectively. Management believes
       its  reserves  for such  recourse  provisions  are  adequate to cover its
       exposures under the agreement.


10.    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.


11.    EMPLOYEE BENEFIT PLAN

       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


                                      F-18
<PAGE>

       operating  segment.  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.

       All funds contributed by the participants are immediately  vested.  Under
       the  terms  of  the  plans,  the  Company  may  also  make  discretionary
       profit-sharing contributions.  Profit-sharing contributions are allocated
       among participants based on their annual  compensation.  Each participant
       has the right to direct the  investment of his or her funds among certain
       named investment options.

       Upon death,  disability,  retirement,  or the  termination of employment,
       participants  may  elect  to  receive  periodic  or  lump-sum   payments.
       Additionally, amounts may be withdrawn in cases of demonstrated hardship.
       Company  contributions  to the plans were not significant in 1999,  1998,
       and 1997.

  12.  STOCK REPURCHASE PLAN

      The Company's board of directors  approved a share  repurchase plan during
      fiscal 1998 under which the Company may repurchase up to 2,000,000  shares
      of its common  stock from time to time until  September  30,  1999.  It is
      expected that such repurchased  shares would be issued as consideration in
      business acquisitions currently being negotiated pursuant to the Company's
      ongoing acquisition  strategy.  All shares purchased under the plan during
      fiscal  1999 and 1998  (500,000  shares at a cost of $2.3  million for the
      year ended April 30, 1999 and 547,900 shares at a cost of $4.2 million for
      the year ended April 30, 1998) were reissued as  consideration  for towing
      service companies acquired prior to April 30, 1999.


13.    RESTRUCTURING COSTS

       In  September  1997,  the  Company  announced  its  intention  to further
       consolidate its domestic  wrecker  production at its Ooltewah,  Tennessee
       facility.  The  consolidation  entailed the closure of the Olive  Branch,
       Mississippi  facility  with  the  relocation  of  wrecker  production  to
       Ooltewah.  All equipment  relocation  and  production  consolidation  was
       completed by April 1998.

       In the  second  quarter of fiscal  1998,  the  Company  recorded a pretax
       restructuring charge of $4.1 million to provide for the plant closing and
       consolidation   of   manufacturing   operations.   Of  the  $4.1  million
       restructuring  charge,  approximately  $0.5 million  related to workforce
       reductions of  approximately  150 employees and associated  costs.  Also,
       $1.9 million of asset  valuation  losses  relating to plant and machinery
       and equipment  writedowns is included in the  restructuring  charge.  The
       balance of the charge covers lease terminations,  property holding costs,
       and  other  shutdown   related  costs.   At  April  30,  1999  and  1998,
       approximately  $3.9  million  and $2.9  million,  respectively,  had been
       charged against the related reserves.


                                      F-19
<PAGE>


14.     SEGMENT INFORMATION

       During fiscal 1999, the Company adopted SFAS No. 131,  "Disclosures About
       Segments  of an  Enterprise  and  Related  Information".  This  statement
       requires  financial   information  to  be  reported  on  the  basis  that
       management uses for evaluating  segment  performance and making operating
       decisions.

       The Company operates in two principal operating segments:  (i) towing and
       recovery equipment and (ii) towing services.  The accounting  policies of
       the  reportable  segments  are the  same as  those  described  in Note 2.
       Management evaluates the performance of its operating segments separately
       to individually monitor the different factors affecting performance.  The
       Company  measures the performance of its operating  segments based on net
       revenue and operating income.  Income taxes are managed on a Company-wide
       basis.  Segment  performance  is also  evaluated  based on profit or loss
       before taxes.

<TABLE>
<CAPTION>

                                            Towing and
                                             Recovery      Towing
                                             Equipment     Services       Eliminations     Consolidate
                                             ---------     --------       ------------     -----------
                                                                   (In Thousands)
       <S>                                    <C>            <C>            <C>                <C>
       1999
       Net sales-external                    $ 342,388      $183,544       $      0           $525,932
       Net sales-intersegment                    4,850              0        (4,850)                 0
       Depreciation and amortization             3,853         11,647             0             15,500
       Operating income                         14,867            430          (424)            14,873
       Interest expense, net                     4,889          5,506             0             10,395
       Income (loss) before income taxes         9,553         (5,075)            0              4,478
       Capital expenditures                      7,170         11,828             0             18,998
       Total assets                            257,959        187,084       (52,563)           392,480

       1998
       Net sales-external                    $ 282,241      $ 114,972      $      0           $397,213
       Net sales-intersegment                    2,398              0        (2,398)                 0
       Depreciation and amortization             3,495          6,752             0             10,247
       Operating income                         19,163          5,167           (90)            24,240
       Interest expense, net                       933          2,456             0              3,389
       Income before income taxes               16,317          4,534             0             20,851
       Capital expenditures                      5,851         20,664             0             26,515
       Total assets                            223,647        146,996       (40,913)           329,730



                                                  F-20
<PAGE>

       1997
       Net sales-external                    $ 254,977      $  37,417      $      0           $292,394
       Net sales-intersegment                        0              0             0                  0
       Depreciation and amortization             2,983          2,799             0              5,782
       Operating income                         21,200          2,377             0             23,577
       Interest (income) expense, net             (271)           891             0                620
       Income before income taxes               21,471          1,486             0             22,957
       Capital expenditures                      7,996          3,077             0             11,073
       Total assets                            161,120         65,557       (11,380)           215,297
</TABLE>



       Total net sales to foreign  countries were not significant in 1999, 1998,
       and 1997. Total long-lived  assets located in foreign  countries were not
       significant at April 30, 1999, 1998, and 1997.


15.    QUARTERLY FINANCIAL INFORMATION (unaudited)

        The  following  is  a  summary  of  the  unaudited  quarterly  financial
        information  for the years ended April 30, 1999 and 1998 (in  thousands,
        except per share data):
<TABLE>
<CAPTION>
                                                                                                   Basic               Diluted
                                                                                                    Net                  Net
                                                                                                  Income               Income
                                              Net        Operating             Net             (Loss) Per           (Loss) Per
                                             Sales        Income              Income               Share               Share
                                             -----        ------              ------               -----               -----
     <S>                                   <C>          <C>                  <C>                   <C>                <C>
      Year ended April 30, 1999:
          First quarter                    $117,754     $  6,684  <F1>       $  2,684 <F1>         $0.06  <F1>        $0.06  <F1>
          Second quarter                    134,055        7,265  <F1>          3,079 <F1>          0.07  <F1>         0.07  <F1>
          Third quarter                     132,629        4,443  <F1>            931 <F1>          0.02  <F1>         0.02  <F1>
          Fourth quarter                    141,494       (3,519) <F1>         (4,488)<F1>         (0.10) <F1>        (0.10) <F1>
                                          ---------     --------             --------                -----              -----
                      Total                $525,932      $14,873             $  2,206              $0.05              $0.05
                                           ========      =======             ========              =====              =====

      Year ended April 30, 1998:
          First quarter                   $  85,353     $  7,924             $  4,798                $0.11              $0.11
          Second quarter                     94,727        4,117                2,277                 0.05               0.05
          Third quarter                     105,221        5,081                2,391                 0.05               0.05
          Fourth quarter                    111,912        7,118                3,199                 0.07               0.07
                                          ---------     --------             --------                -----              -----
                      Total               $ 397,213     $ 24,240             $ 12,665                $0.28              $0.27
                                          =========     ========             ========                =====              =====
<FN>
<F1> Amounts as restated in public  filings on Forms 10Q/A.
</FN>
</TABLE>

         In connection with its annual physical  inventory  counts,  the Company
identified certain adjustments that it deemed necessary to more accurately state
the previously  filed fiscal 1999  quarterly  financial  statements.  During the
interim periods,  the Company records inventory using estimated  margins.  While
this  method  has  proven to be  reliable  in the  past,  this  year's  physical
inventory counts revealed aggregate adjustments which the Company believes to be
attributable  to material,  production,  and other inventory costs being higher,
and the related utilization being less efficient than estimated during the year.

         The sum of quarterly earnings per share may differ from annual earnings
per share due to rounding.

                                      F-21
<PAGE>
                    REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
                               AS TO SCHEDULE II -
                        VALUATION AND QUALIFYING ACCOUNTS


To Miller Industries, Inc.

           We have  audited  in  accordance  with  generally  accepted  auditing
standards, the consolidated financial statements of Miller Industries,  Inc. and
subsidiaries included in this Form 10-K and have issued our report thereon dated
August 5, 1999.  Our audit was made for the purpose of forming an opinion on the
basic financial statements taken as a whole. The schedule listed in the index is
the responsibility of the Company's  management and is presented for purposes of
complying with the Securities and Exchange Commission's rules and is not part of
the basic financial statements. This schedule has been subjected to the auditing
procedures  applied in the audit of the basic  financial  statements and, in our
opinion,  fairly states in all material  respects the financial data required to
be set forth therein in relation to the basic  financial  statements  taken as a
whole.

                                                      ARTHUR ANDERSEN LLP


Chattanooga, Tennessee
August 5, 1999


                                      S-1
<PAGE>


                    MILLER INDUSTRIES, INC. AND SUBSIDIARIES

                 SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
<TABLE>
<CAPTION>



                                                  Balance at                                       Accounts       Balance at
                                                  Beginning        Charged to       Charged to     Written          End of
                                                  of Period        Expenses          Other           Off            Period
                                                  ---------        --------          -----           ---            ------
                                                                                (In Thousands)
<S>                                                 <C>               <C>            <C>             <C>            <C>
Year  ended April 30, 1997:
 Deduction from asset accounts:
           Allowance for doubtful accounts          $1,265            174            474<F1>         (139)          $1,774

Year  ended April 30, 1998:
 Deduction from asset accounts:
           Allowance for doubtful accounts          $1,774            214          1,082<F1>         (953)          $2,117

Year  ended April 30, 1999:
 Deduction from asset accounts:
           Allowance for doubtful accounts          $2,117          2,123            175<F1>         (713)           3,702
<FN>

<F1>   other  addition to the allowance for doubtful  accounts  results from the
       acquisitions in fiscal 1997, 1998 and 1999 which were accounted for under
       the purchase method of accounting.
</FN>
</TABLE>

                                                                S-2

<PAGE>

                                   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 12th day of
August, 1999.

                                MILLER INDUSTRIES, INC.


                                 By: /s/ Jeffrey I. Badley
                                         Jeffrey I. Badgley, President,
                                         Chief Executive Officer and Director



         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 12th day of August, 1999.

Signature                                    Title

/s/ William G. Miller*                       Chairman of the Board of Directors
William G. Miller

/s/ Jeffrey I. Badgley                       President, Chief Executive Officer
Jeffrey I. Badgley                           and Director

/s/ J. Vincent Mish*                         Vice President, Treasurer and
J. Vincent Mish                              Chief Financial Officer
                                             (Principal Financial and
                                             Accounting Officer)

/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

/s/ James A. McKinney*                      Chief Executive Officer
James A. McKinney                            - RoadOne, Inc. and Director


*  By: /s/ Jeffrey I. Bedgley
        Jeffrey I. Badgley, attorney in fact


                                      II-1
<PAGE>

                                  EXHIBIT INDEX


EXHIBIT                      DESCRIPTION

23                  Consent of Arthur Andersen LLP

27                  Financial Data Schedule (for SEC use only)