**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


**WASHINGTON,
      D.C. 20549**


**____________________**




**FORM
      10-K**




**ANNUAL
      REPORT**


**PURSUANT
      TO SECTIONS 13 OR 15(d)**


**OF
      THE SECURITIES EXCHANGE ACT OF 1934**




(Mark
                One)x
            **ANNUAL
                REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
                ACT OF
                1934**




For
              the
              fiscal year ended
            December
                31, 2005




OR




o
            **TRANSITION
                REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
                ACT OF
                1934**




For
      the
      transition period from __________________________________
      to __________________________________




Commission
              File No.
            0-24298






**MILLER
                INDUSTRIES, INC.**(Exact
                Name of Registrant as Specified in Its
                Charter)




**Tennessee**
            
            **62-1566286**(State
                or Other Jurisdiction of Incorporation or Organization)
            
            (I.R.S.
                Employer Identification No.)**8503
                Hilltop Drive, Ooltewah, Tennessee**
            
            **37363**(Address
                of Principal Executive Offices)
            
            (Zip
                Code)






**(423)
                238-4171**(Registrant’s
                Telephone Number, Including Area
                Code)




Securities
      registered pursuant to Section 12(b) of the Act:




Title
                of Each Class
            
            Name
                of Each Exchange on Which RegisteredCommon
                Stock, par value $.01 per share
            
            New
                York Stock Exchange




Securities
      registered pursuant to Section 12(g) of the Act:




None(Title
                of Class)




Indicate
      by check mark if the registrant is a well-known seasoned issuer, as defined
      in
      Rule 405 of the Securities Act.


o    
      Yes     x No




Indicate
      by check mark if the registrant is not required to file reports pursuant to
      Section 13 or Section 15(d) of the Act.


o    
      Yes     x      No




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.




x    
      Yes     o      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 10-K.     x




Indicate
      by check mark whether the registrant is an accelerated filer (as defined in
      Exchange Act Rule 12b-2).


x    
      Yes     o      No.


Indicate
      by check mark whether the registrant is a shell company (as defined in Rule
      12b-2 of the Exchange Act).


o    
      Yes     x      No.




The
      aggregate market value of the voting stock for non-affiliates (which for
      purposes hereof are all holders other than executive officers and directors)
      of
      the registrant as of June 30, 2005 (the last business day of the registrant’s
      most recently completed second fiscal quarter) was $118,903,729 (based on
      9,231,656 shares held by non-affiliates at $12.88 per share, the last sale
      price
      on the NYSE on June 30, 2005).




At
      March
      10 ,
      2006
      there were 11,306,878 shares
      of the registrant’s common stock, par value $0.01 per share,
      outstanding.




**DOCUMENTS
      INCORPORATED BY REFERENCE**




The
      information called for by Part III (Items 10, 11, 12, 13 and 14) is incorporated
      herein by reference to the Registrant’s definitive proxy statement for its 2006
      Annual Meeting of Shareholders which is to be filed pursuant to Regulation
      14A.



















**TABLE
      OF CONTENTS**




**PART
                I**ITEM
                1.
            BUSINESS
            1ITEM
                1A.
            RISK
                FACTORS
            7ITEM
                1B.
            UNRESOLVED
                STAFF COMMENTS
            11ITEM
                2.
            PROPERTIES
            11ITEM
                3.
            LEGAL
                PROCEEDINGS
            11ITEM
                4.
            SUBMISSION
                OF MATTERS TO A VOTE OF SECURITY HOLDERS
            12**PART
                II**ITEM
                5.
            MARKET
                FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER
                PURCHASES OF EQUITY SECURITIES
            13ITEM
                6.
            SELECTED
                FINANCIAL DATA
            14ITEM
                7.
            MANAGEMENT’S
                DISCUSSION AND ANALYSIS OF FINANCIALCONDITION
                AND RESULTS OF OPERATIONS
            16ITEM
                7A.
            QUANTITATIVE
                AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
            25ITEM
                8.
            FINANCIAL
                STATEMENTS AND SUPPLEMENTARY DATA
            25ITEM
                9.
            CHANGES
                IN AND DISAGREEMENTS WITH ACCOUNTANTS ONACCOUNTING
                AND FINANCIAL DISCLOSURE
            25ITEM
                9A.
            CONTROLS
                AND PROCEDURES
            25ITEM
                9B.
            OTHER
                INFORMATION
            27**PART
                III**ITEM
                10.
            DIRECTORS
                AND EXECUTIVE OFFICERS OF THE REGISTRANT
            28ITEM
                11.
            EXECUTIVE
                COMPENSATION
            28ITEM
                12.
            SECURITY
                OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED
                STOCKHOLDER MATTERS
            28ITEM
                13.
            CERTAIN
                RELATIONSHIPS AND RELATED TRANSACTIONS
            28ITEM
                14.
            PRINCIPAL
                ACCOUNTANT FEES AND SERVICES
            28**PART
                IV**ITEM
                15.
            EXHIBITS
                AND FINANCIAL STATEMENT SCHEDULES
            29FINANCIAL
                STATEMENTS
            F-1FINANCIAL
                STATEMENT SCHEDULE
            S-1




**CERTAIN
      FACTORS AFFECTING FORWARD-LOOKING STATEMENTS**




Certain
      statements in this Annual Report, including but not limited to Item
      7-“Management’s Discussion and Analysis of Financial Condition and Results of
      Operations,” may be deemed to be forward-looking statements, as defined in the
      Private Securities Litigation Reform Act of 1995. Forward-looking statements
      can
      be identified by the use of words such as “may,” “will,” “should,” “could,”
“continue,” “future,” “potential,” “believe,” “project,” “plan,” “intend,”
“seek,” “estimate,” “predict”, “expect”, “anticipate” and similar expressions,
      or the negative of such terms, or other comparable terminology. Forward-looking
      statements also include the assumptions underlying or relating to any of the
      foregoing statements. Such forward-looking statements are made pursuant to
      the
“safe harbor” provisions of the Private Securities Litigation Reform Act of 1995
      based on our management’s belief as well as assumptions made by, and information
      currently available to, our management. Our actual results may differ materially
      from the results anticipated in these forward-looking statements due to, among
      other things, the factors set forth below under the caption “Risk Factors” and
      those otherwise described from time to time in our Securities and Exchange
      Commission reports filed after this Annual Report. Such factors are not
      exclusive. We do not undertake to update any forward-looking statement that
      may
      be made from time to time by, or on behalf of, our company.







**PART
      I**




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




**General**




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




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




**Towing
      and Recovery Equipment**




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




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




***Product
      Lines***




We
      manufacture a broad line of wrecker, car carrier and trailer bodies to meet
      a
      full range of customer design, capacity and cost requirements.




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




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




1


*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.




*Transport
      Trailers.* Our
      multi-vehicle transport trailers are specialized auto transport trailers with
      upper and lower decks and hydraulic ramps for loading vehicles. These trailers
      are used for moving multiple vehicles for auto auctions, car dealerships,
      leasing companies, and other similar applications. These trailers are easy
      to
      load with 6 to 7 vehicles, and with the optional cab rack, can haul up to 8
      vehicles. The vehicles can be secured to transport quickly with ratchet and
      chain tie-downs that are mounted throughout the frame of the transport. In
      recent years, professional towing operators have added auto transport trailers
      to their fleets to add to their towing capabilities. Also, we have begun to
      design, engineer and manufacture special-use transport and trailer products
      to
      be used primarily in military applications.




***Brand
      Names***




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




*Century* ® .
      The
      Century brand is our “top-of-the-line” brand and represents what management
      believes to be the broadest product line in the industry. The Century line
      was
      started in 1974 and produces wreckers ranging from 8-ton light duty to 70-ton
      heavy duty models, and car carriers in lengths from 171⁄2 to 30 feet. Management
      believes that the Century brand has a reputation as the industry’s leading
      product innovator.




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




*Challenger* ® *.* Our
      Challenger products compete with the Century and Vulcan products and constitute
      a third premium product line. Challenger products consist of light to heavy
      duty
      wreckers with capacities ranging from 8 to 70 tons, and car carriers with
      lengths ranging from 171⁄2 to 21 feet. The Challenger line was started in 1975 and
      is known for high performance heavy duty wreckers and aesthetic
      design.




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




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




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




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




2


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




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




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




***Product
      Development and Manufacturing***




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




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




We
      purchase raw materials and component parts from a number of sources. Although
      we
      have no long-term supply contracts, management believes we have good
      relationships with our primary suppliers. We have experienced no significant
      problems in obtaining adequate supplies of raw materials and component parts
      to
      meet the requirements of our production schedules. Management believes that
      the
      materials used in the production of our products are available at competitive
      prices from an adequate number of alternative suppliers. Accordingly, management
      does not believe that the loss of a single supplier would have a material
      adverse effect on our business.




***Sales,
      Distribution and Marketing of Towing and Recovery
      Equipment***




*Independent
      Distributors and Sales*




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




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




3


We
      have
      developed a diverse network of independent distributors, consisting of
      approximately 120 distributors in North America, who serve all 50 states, Canada
      and Mexico, and approximately 50 distributors that serve other foreign markets.
      In 2005, no single distributor accounted for more than 10% of our sales.
      Management believes our broad and diverse network of distributors provides
      us
      with the flexibility to adapt to market changes, lessens our dependence on
      particular distributors and reduces the impact of regional economic
      factors.




To
      support sales and marketing efforts, we produce demonstrator models that are
      used by our sales representatives and independent distributors. To increase
      exposure to our products, we also have served as the official recovery team
      for
      many automobile racing events, including Daytona, Talladega, Richmond, Chicago,
      Kansas, California, Michigan and Darlington NASCAR races, Rolex Daytona 24
      Hour
      Race, the Brickyard, and the Indy 500 races, among others.




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




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




*Disposition
      of Company-Owned Distributors*




During
      2002, our board of directors and management made the decision to sell our
      distribution group, and by the end of 2005, we had sold all of our towing and
      recovery distributor locations. All assets, liabilities and results of
      operations of the distribution group are now presented separately as
      discontinued operations and all prior period financial information is presented
      to conform to this treatment.




***Product
      Warranties and Insurance***




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




***Backlog***




We
      produce virtually all of our products to order. Our backlog is based upon
      customer purchase orders that we believe are firm. The level of backlog at
      any
      particular time, however, is not an appropriate indicator of our future
      operating performance. Certain purchase orders are subject to cancellation
      by
      the customer upon notification. Given our production and delivery schedules
      management believes that the current average 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 this industry focuses on product quality and innovation, reputation,
      technology, customer service, product availability and price. We compete on
      the
      basis of each of these criteria, with an emphasis on product quality and
      innovation and customer service. Management also believes that a manufacturer’s
      relationship with distributors is a key component of success in the industry.
      Accordingly, we have invested substantial resources and management time in
      building and maintaining strong relationships with distributors. Management
      also
      believes that our products are regarded as high quality within their particular
      price points. Our marketing strategy is to continue to compete primarily on
      the
      basis of quality and reputation rather than solely on the basis of price, and
      to
      continue to target the growing group of professional towing operators who as
      end-users recognize the quality of our products.




4


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. Certain of our competitors may have
      greater financial and other resources and may provide more attractive dealer
      and
      retail customer financing alternatives than we do.




**Towing
      Services - RoadOne**




In
      February 1997, we formed RoadOne, Inc. to build a national towing services
      network. However, in October 2002, we made the decision to sell our towing
      services operations. As of December 31, 2003, all of the towing services
      operations had either been sold or closed, and as of December 31, 2005 there
      were only miscellaneous assets remaining from previous towing services market
      sales.




In
      accordance with SFAS No. 144, we began reporting the entire towing services
      segment as discontinued operations as of the beginning of the fourth quarter
      of
      2002. The results of operations and loss on disposal associated with certain
      towing service operations which were sold in June 2003 have been reclassified
      from discontinued to continuing operations given our significant continuing
      involvement in the operations of the disposal components via a consulting
      agreement and our ongoing interest in the cash flows of the operations of the
      disposal components via a long-term license agreement. Accordingly, the
      depreciation of fixed assets ceased on October 1, 2002. As of such date, all
      assets, liabilities, and results of operations are separately presented as
      discontinued operations and all prior period financial information is presented
      to conform with this treatment.




In
      October 2005, RoadOne, Inc. filed for liquidation under Chapter 7 of the federal
      bankruptcy laws in the Bankruptcy Court of the Eastern District of Tennessee
      and
      a trustee was appointed. Although Miller Industries, Inc. is the largest
      creditor of RoadOne, Inc., the filing is not expected to have a material adverse
      effect on the consolidated financial position or results of operations of Miller
      Industries. At this time, our management is not able to predict whether or
      not
      any liabilities of discontinued operations currently reflected in the
      consolidated financial statements of Miller Industries will be eliminated as
      a
      result of this case.




**Employees**




We
      employed approximately 900 people as of December 31, 2005. None of our employees
      are covered by a collective bargaining agreement, though our employees in France
      and the United Kingdom have certain similar rights provided by their respective
      government’s employment regulations. We consider our employee relations to be
      good.




**Intellectual
      Property Rights**




Our
      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 one of our operating
      subsidiaries, some of which have expired, and the remainder of which expire
      over
      the next few years. This technology, particularly the L-arms, is used in a
      majority of the commercial wreckers today. Management believes that, until
      these
      patents expire, utilization of such devices without a license is an infringement
      of such patents. We have successfully litigated infringement lawsuits in which
      the validity of our patents on this technology was upheld, and successfully
      settled other lawsuits. We also hold a number of other utility and design
      patents covering other products, the Vulcan “scoop” wheel-retainer and the car
      carrier anti-tilt device. We have also obtained the rights to use and develop
      certain technologies owned or patented by others. Pursuant to the terms of
      a
      consent judgment entered into in 2000 with the Antitrust Division of the U.S.
      Department of Justice, we are required to offer non-exclusive royalty-bearing
      licenses to certain of our key patents to all tow truck and car carrier
      manufacturers.




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


5




**Government
      Regulations and Environmental Matters**




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




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




**Executive
      Officers of the Registrant**




Information
      relating to our executive officers as of the end of the period covered by this
      Annual Report is set forth below. There are no family relationships among the
      executive officers, directors or nominees for director, nor are there any
      arrangements or understandings between any of the executive officers and any
      other persons pursuant to which they were selected as executive
      officers.




**Name**
            
            **Age**
            
            **Position**William
                G. Miller
            
            59
            
            Chairman
                of the Board and Co-Chief Executive OfficerJeffrey
                I. Badgley
            
            53
            
            President
                and Co-Chief Executive OfficerFrank
                Madonia
            
            57
            
            Executive
                Vice President, Secretary and General CounselJ.
                Vincent Mish
            
            55
            
            Executive
                Vice President, Chief Financial Officer and President of Financial
                Services Group




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




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




6


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




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




**Available
      Information**




Our
      Internet website address is www.millerind.com. We make available free of charge
      through our website our Annual Reports on Form 10-K, Quarterly Reports on Form
      10-Q and Current Reports on Form 8-K, and amendments to those reports, as soon
      as reasonably practicable after we file them with, or furnish them to, the
      Securities and Exchange Commission. Our Corporate Governance Guidelines and
      Code
      of Business Conduct and Ethics are also available on our website and are
      available in print to any shareholder who mails a request to: Corporate
      Secretary, Miller Industries, Inc., 8503 Hilltop Drive, Ooltewah, Tennessee
      37363. Other corporate governance-related documents can be found at our website
      as well.




**ITEM** **1A.** **RISK
      FACTORS**




*There
      are many factors that affect our business and the results of our operations,
      some of which are beyond our control. The following is a description of some
      of
      the important factors that may cause the actual results of our operations in
      future periods to differ materially from those currently expected or desired.
      We
      encourage you to read this section carefully.*




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




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




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




We
      are
      dependent upon outside suppliers for our raw material needs and other purchased
      component parts, and although we believe that these suppliers will continue
      to
      meet our requirements and specifications, and that alternative sources of supply
      are available, events beyond our control could have an adverse effect on the
      cost or availability of raw materials and component parts. Shipment delays,
      unexpected price increases or changes in payment terms from our suppliers of
      raw
      materials or component parts could impact our ability to secure necessary raw
      materials or component parts, or to secure such materials and parts at favorable
      prices. For example, recent




7


increases
      in demand for aluminum and steel, as well as disruptions in the supply of raw
      materials, has resulted in substantially higher prices for aluminum, steel
      and
      related raw materials. Partially to offset these increases, we have, from time
      to time, implemented general price increases and cost surcharges. While we
      have
      attempted to pass these increased costs on to our customers, there can be no
      assurance that we will be able to continue to do so. Additionally, demand for
      our products could be negatively affected by the unavailability of truck
      chassis, which are manufactured by third parties and are frequently supplied
      by
      us, or are purchased separately by our distributors or by towing operators.
      Although we believe that sources of our raw materials and component parts will
      continue to be adequate to meet our requirements and that alternative sources
      are available, shortages, price increases or delays in shipments of our raw
      materials and component parts could have a material adverse effect on our
      financial performance, competitive position and reputation.




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




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




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




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




***Continued
      increases in our customers’ fuel costs, and the reduced availability of credit
      for our customers, will have a material effect upon our
      business.***




In
      recent
      years, our customers have experienced substantial increases in fuel and other
      transportation costs. There can be no assurance that fuel and transportation
      costs will not continue to increase for our customers in the future.
      Additionally, our customers have, from time to time, experienced reduced
      availability of credit, which negatively affects their ability to, and capacity
      for, purchasing equipment. These increases in fuel and transportation costs,
      and
      these reductions in the availability of credit, have had, and may continue
      to
      have, a negative effect on our customers, and a material effect upon our
      business and operating results.




***Our
      international operations are subject to various political, economic and other
      uncertainties that could adversely affect our business results, including by
      restrictive taxation or other government regulation and by foreign currency
      fluctuation.***




A
      significant portion of our net sales and production in 2005 were outside the
      United States, primarily in Europe. As a result, our operations are subject
      to
      various political, economic and other uncertainties, including risks of
      restrictive taxation policies, changing political conditions and governmental
      regulations. Also, a substantial portion of our net sales derived outside the
      United States, as well as salaries of employees located outside the United
      States and certain other expenses, are denominated in foreign currencies,
      including British pounds and the Euro. We are subject to risk of financial
      loss
      resulting from fluctuations in exchange rates of these currencies against the
      U.S. dollar.




8


***The
      proposed expansion of our Ooltewah, Tennessee and Hermitage, Pennsylvania
      manufacturing facilities could adversely affect production at those
      facilities.***




We
      recently determined to expand our existing manufacturing facilities in Ooltewah,
      Tennessee and Hermitage, Pennsylvania as a result of the recent increases in
      demand for our products. Although we have implemented a plan to minimize the
      impact of these expansion activities on our current production, construction
      delays and related problems could arise as a result of our expansion efforts.
      Construction or other related problems at these facilities could result in
      manufacturing delays, and could otherwise adversely affect our ability to
      operate these facilities at full manufacturing capacity.




***The
      need to service our indebtedness may affect the growth and profitability of
      our
      business.***




As
      of
      January 31, 2006 our debt included approximately $6.3 million under our new
      senior credit facility and $10.0 million under our junior credit facility.
      Although these debt levels reflect a significant decrease over prior periods,
      a
      substantial portion of our cash flow from operations has been and will continue
      to be dedicated to service our debt. Using cash in this manner may affect our
      ability to grow our business and to take advantage of opportunities for growth.
      In addition, this substantial indebtedness may make us more vulnerable to
      general adverse economic and industry conditions.




***The
      requirements and restrictions imposed by our credit facilities restrict our
      ability to operate our business, and failure to comply with these requirements
      and restrictions could adversely affect our business.***




The
      terms
      of our new senior credit facility and our amended junior credit facility
      restrict our ability and our subsidiaries’ ability to, among other things, incur
      additional indebtedness, pay dividends or make certain other restricted payments
      or investments in certain situations, consummate certain asset sales, enter
      into
      certain transactions with affiliates, incur liens, or merge or consolidate
      with
      any other person or sell, assign, transfer, lease, convey or otherwise dispose
      of all or substantially all of our or their assets. Our credit facilities also
      require us to meet certain financial tests, and to comply with certain other
      reporting, affirmative and negative covenants.




If
      we
      fail to comply with the requirements of either of our credit facilities, such
      non-compliance would result in an event of default. If not waived by the lending
      groups, such event of default would result in the acceleration of the amounts
      due under the respective credit facility, and may permit our lenders to
      foreclose on our assets that secure the credit facilities.




***Our
      ability to service our credit facilities may be affected by fluctuations in
      interest rates.***




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




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




The
      timely manufacture and delivery of our products requires an adequate supply
      of
      skilled labor, and the operating costs of our manufacturing facilities can
      be
      adversely affected by high turnover in skilled positions. Accordingly, our
      ability to increase sales, productivity and net earnings will be limited to
      a
      degree by our ability to employ the skilled laborers necessary to meet our
      requirements. There can be no assurance that we will be able to maintain an
      adequate skilled labor force necessary to efficiently operate our facilities.
      In
      addition, in connection with a representation petition filed by the United
      Auto
      Workers Union with the National Labor Relations Board, a vote was held on union
      representation for employees at our Ooltewah, Tennessee manufacturing plant
      in
      2002. These employees voted against joining the United Auto Workers Union,
      but
      the vote was subsequently overturned by the National Labor Relations Board.
      Thereafter, a new vote was scheduled for February 2005, but this vote was
      cancelled at the request of the United Auto Workers Union. While our employees
      are not currently members of a union,
      there can be no assurance that the employees at our Ooltewah manufacturing
      plant, or any other of our employees, may not choose to become unionized in
      the
      future.


9




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




In
      June
      2003, we received notification from the New York Stock Exchange that we were
      not
      in compliance with the NYSE’s continued listing standards because we did not
      have sufficient shareholders’ equity or an adequate 30-day average market
      capitalization. In response, we implemented a plan for regaining compliance
      with
      the continued listing standards. In December 2004, the NYSE notified us that,
      as
      a result of our compliance plan, we had regained compliance with the NYSE’s
      continued listing standards and had been approved as a “company in good
      standing” with the NYSE.




As
      a
      condition to the NYSE’s approval, we were subject to a 12-month follow-up period
      with the NYSE to ensure continued compliance with the continued listing
      standards, and continue to be subject to the NYSE’s routine monitoring
      procedures. If we are unable to comply with the NYSE’s continued listing
      standards, our common stock could be delisted from the New York Stock Exchange.
      If our common stock is delisted, it is likely that the trading market for our
      common stock would be substantially less active, and the ability of our
      shareholders to buy and sell shares of our common stock would be materially
      impaired. In addition, the delisting of our common stock could adversely affect
      our ability to enter into future equity financing transactions.




***We
      are subject to certain retained liabilities related to the wind down of our
      towing services operations.***




We
      sold
      or closed all remaining towing services businesses during 2003. As a result,
      almost all of our former towing services businesses now operate under new
      ownership, and in general the customary operating liabilities of these
      businesses were assumed by the new owners. Our subsidiaries that sold these
      businesses are subject to some continuing liabilities with respect to their
      pre-sale operations, including, for example, liabilities related to litigation,
      certain trade payables, workers compensation and other insurance, surety bonds,
      and real estate, and Miller Industries is subject to some of such continuing
      liabilities by virtue of certain direct parent guarantees.




In
      October 2005, our subsidiary, RoadOne, Inc., filed for liquidation under Chapter
      7 of the federal bankruptcy laws in the Bankruptcy Court of the Eastern District
      of Tennessee and a trustee was appointed. At this time, management is not able
      to predict whether or not any liabilities of discontinued operations currently
      reflected in our consolidated financial statements will be
      eliminated.




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




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




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




We
      are
      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 incidental to our business. We maintain reserves and liability
      insurance coverage at levels based upon commercial norms and our historical
      claims experience. A successful product liability or other claim brought against
      us in excess of our insurance coverage, or the inability of us to acquire or
      maintain insurance at commercially reasonable rates, could have a material
      adverse effect upon our business, operating results and financial
      condition.




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




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


10




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




William
      G. Miller, our chairman, beneficially owns approximately 14.5% of the
      outstanding shares of common stock. Accordingly, Mr. Miller has the ability
      to
      exert significant influence over our business affairs, including the ability
      to
      influence the election of directors and the result of voting on all matters
      requiring shareholder approval.




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




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




**ITEM1B.**
            **UNRESOLVED
                STAFF COMMENTS**




None.




**ITEM2.**
            **PROPERTIES**




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




We
      also
      have manufacturing operations at two facilities located in the Lorraine region
      of France, which have, in the aggregate, approximately 180,000 square feet,
      and
      manufacturing operations in Norfolk, England, with approximately 40,000 square
      feet.




In
      light
      of recent overall increases in demand for our products, we determined to expand
      our existing manufacturing facilities. Accordingly, in 2006 we plan to expand
      our Ooltewah, Tennessee and Hermitage, Pennsylvania manufacturing facilities
      to
      allow us to continue to meet anticipated demand for our products.




**ITEM3.**
            **LEGAL
                PROCEEDINGS**




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




11


**ITEM4.**
            **SUBMISSION
                OF MATTERS TO A VOTE OF SECURITY
                HOLDERS**




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







































































12


**PART
      II**




**ITEM5.**
            **MARKET
                FOR REGISTRANT’S COMMON EQUITY, RELATED****STOCKHOLDER
                MATTERS AND ISSUER PURCHASES OF EQUITY
                SECURITIES**




**Market
      Price of and Dividends on the Registrant’s Common Equity and Related Stockholder
      Matters**




Our
      common stock is traded on the New York Stock Exchange under the symbol “MLR.”
The following table sets forth the quarterly range of high and low sales prices
      for the common stock for the periods indicated.




**Price
                Range of Common Stock****Period**
            
            **High**
            
            **Low****Year
                Ended December 31, 2004**First
                Quarter
            
            $
            10.80
            
            $
            7.20Second
                Quarter
            
            
            10.85
            
            
            8.20Third
                Quarter
            
            
            10.21
            
            
            8.55Fourth
                Quarter
            
            
            11.48
            
            
            8.90**Year
                Ended December 31, 2005**First
                Quarter
            
            $
            13.80
            
            $
            11.14Second
                Quarter
            
            
            13.02
            
            
            9.90Third
                Quarter
            
            
            22.59
            
            
            12.30Fourth
                Quarter
            
            
            21.50
            
            
            16.35**Year
                Ending December 31, 2006**First
                Quarter (through March 10, 2006)
            
            $
            25.84
            
            $
            19.72




The
      approximate number of holders of record and beneficial owners of common stock
      as
      of December 31, 2005 was 1,736 and 10,000, respectively.




We
      have
      never declared cash dividends on our common stock. We intend to retain our
      earnings and do 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, our financial condition,
      restrictions in financing agreements and other factors deemed relevant by our
      Board of Directors. The payment of dividends by us is restricted by our
      revolving credit facility.




**Purchases
      of Equity Securities by the Issuer and Affiliated
      Purchasers**




We
      did
      not repurchase any shares of our common stock during the three month period
      ended December 31, 2005.






13


**ITEM6.**
            **SELECTED
                FINANCIAL DATA**




The
      following table presents selected statement of operations data and selected
      balance sheet data on a consolidated basis. We derived the selected historical
      consolidated financial data for the years ended December 31, 2005, 2004, 2003,
      2002 and April 30, 2001 and the eight months ended December 31, 2001 from our
      audited consolidated financial statements and related notes. You should read
      this data together with Item 7 - “Management’s
      Discussion and Analysis of Financial Condition and Results of Operation” and our
      consolidated financial statements and related notes that are a part of this
      Annual Report on Form 10-K.




**Years
                Ended December 31,**
            
            **Eight
                Months**
              **Ended**
              **December
                31,**
            
            **Year**
              **Ended**
              **April
                30,****2005**
            
            **2004**
            
            **2003**
            
            **2002**
            
            **2001**
            
            **2001****(In
                thousands except per share data)****Statements
                of Income Data (1):**Net
                Sales:Towing
                and recovery equipment
            
            **$**
            **351,884**
            
            $
            236,308
            
            $
            192,043
            
            $
            203,059
            
            $
            142,445
            
            $
            212,885Towing
                services
            
            
            **-**
            
            
            -
            
            
            13,953
            
            
            28,444
            
            
            19,892
            
            
            31,992**351,884**
            
            
            236,308
            
            
            205,996
            
            
            231,503
            
            
            162,337
            
            
            244,877Costs
                and expenses:Costs
                of operations:Towing
                and recovery equipment
            
            
            **301,943**
            
            
            205,021
            
            
            168,390
            
            
            174,516
            
            
            122,753
            
            
            181,517Towing
                services
            
            
            **-**
            
            
            -
            
            
            10,618
            
            
            22,539
            
            
            15,250
            
            
            23,321**301,943**
            
            
            205,021
            
            
            179,008
            
            
            197,055
            
            
            138,003
            
            
            204,838Selling,
                general, and administrative expenses
            
            
            **24,293**
            
            
            18,904
            
            
            17,411
            
            
            19,540
            
            
            14,353
            
            
            23,925Special
                charges (2)
            
            
            **-**
            
            
            -
            
            
            682
            
            
            -
            
            
            6,376
            
            
            -Interest
                expense, net
            
            
            **4,012**
            
            
            4,657
            
            
            5,609
            
            
            4,617
            
            
            1,055
            
            
            2,137Total
                costs and expenses
            
            
            **330,248**
            
            
            228,582
            
            
            202,710
            
            
            221,212
            
            
            159,787
            
            
            230,900Income
                from continuing operations before income taxes
            
            
            **21,636**
            
            
            7,726
            
            
            3,286
            
            
            10,291
            
            
            2,550
            
            
            13,977Income
                tax provision
            
            
            **2,936**
            
            
            740
            
            
            1,216
            
            
            7,208
            
            
            2,522
            
            
            4,777Income
                from continuing operations
            
            
            **18,700**
            
            
            6,986
            
            
            2,070
            
            
            3,083
            
            
            28
            
            
            9,200Discontinued
                operations:Loss
                from discontinued operations, before income taxes
            
            
            **(114**
            **)**
            
            (1,371
            )
            
            (17,260
            )
            
            (29,697
            )
            
            (22,296
            )
            
            (23,585
            )Income
                tax provision (benefit)
            
            
            **-**
            
            
            140
            
            
            (1,037
            )
            
            (2,732
            )
            
            (681
            )
            
            (7,951
            )Loss
                from discontinued operations, net of taxes
            
            
            **(114**
            **)**
            
            (1,511
            )
            
            (16,223
            )
            
            (26,965
            )
            
            (21,615
            )
            
            (15,634
            )Net
                income (loss) before cumulative effect of change in accounting
                principle
            
            
            **18,586**
            
            
            5,475
            
            
            (14,153
            )
            
            (23,882
            )
            
            (21,587
            )
            
            (6,434
            )Cumulative
                effect of change in accounting principle
            
            
            **-**
            
            
            -
            
            
            -
            
            
            (21,812
            )
            
            -
            
            
            -Net
                income (loss)
            
            **$**
            **18,586**
            
            $
            5,475
            
            $
            (14,153
            )
            $
            (45,694
            )
            $
            (21,587
            )
            $
            (6,434
            )Basic
                net income (loss) per common share(3):Income
                from continuing operations
            
            **$**
            **1.67**
            
            $
            0.64
            
            $
            0.22
            
            $
            0.34
            
            $
            -
            
            $
            0.98Loss
                from discontinued operations
            
            
            **(0.01**
            **)**
            
            (0.14
            )
            
            (1.74
            )
            
            (2.89
            )
            
            (2.31
            )
            
            (1.67
            )Cumulative
                effect of change in accounting principle
            
            
            **-**
            
            
            -
            
            
            -
            
            
            (2.34
            )
            
            -
            
            
            -Basic
                income (loss)
            
            **$**
            **1.66**
            
            $
            0.50
            
            $
            (1.52
            )
            $
            (4.89
            )
            $
            (2.31
            )
            $
            (0.69
            )Diluted
                net income (loss) per common share(3):Income
                from continuing operations
            
            **$**
            **1.63**
            
            $
            0.64
            
            $
            0.22
            
            $
            0.34
            
            $
            -
            
            $
            0.98Loss
                from discontinued operations
            
            
            **(0.01**
            **)**
            
            (0.14
            )
            
            (1.74
            )
            
            (2.89
            )
            
            (2.31
            )
            
            (1.67
            )Cumulative
                effect of change in accounting principle
            
            
            **-**
            
            
            -
            
            
            -
            
            
            (2.34
            )
            
            -
            
            
            -Diluted
                income (loss)
            
            **$**
            **1.62**
            
            $
            0.50
            
            $
            (1.52
            )
            $
            (4.89
            )
            $
            (2.31
            )
            $
            (0.69
            )Weighted
                average shares outstanding:Basic
            
            
            **11,226**
            
            
            10,860
            
            
            9,342
            
            
            9,341
            
            
            9,341
            
            
            9,341Diluted
            
            
            **11,474**
            
            
            10,982
            
            
            9,342
            
            
            9,341
            
            
            9,341
            
            
            9,341


14





**December
                31,**
            
            **December
                31,**
            
            **April
                30,****2005**
            
            **2004**
            
            **2003**
            
            **2002**
            
            **2001**
            
            **2001****(In
                thousands except per share data)****Balance
                Sheet Data (at period end):**Working
                capital (deficit)
            
            **$**
            **50,406**
            
            $
            39,978
            
            $
            31,136
            
            $
            (10,174
            )
            $
            87,601
            
            $
            91,314Total
                assets
            
            
            **144,570**
            
            
            127,822
            
            
            131,818
            
            
            162,177
            
            
            252,963
            
            
            281,287Long-term
                obligations, less current portion
            
            
            **16,803**
            
            
            24,345
            
            
            29,927
            
            
            1,214
            
            
            91,562
            
            
            99,121Common
                shareholders' equity
            
            
            **64,755**
            
            
            46,785
            
            
            27,997
            
            
            39,697
            
            
            84,843
            
            
            106,533




____________________




(1)
            The
                results of operations and loss on disposal associated with certain
                towing
                services operations, which were sold in June 2003, have been reclassified
                from discontinued to continuing operations for all periods presented
                because of our significant continuing involvement in the operations
                of the
                disposal components through a consulting agreement and our ongoing
                interest in the cash flows of the operations of the disposal components
                through a long-term licensing
                agreement.




(2)
            Special
                charges and other net operating expenses include a loss on the sale
                of
                operations of $682 for the year ended December 31, 2003, and asset
                impairment charges for continuing operations of $6,376 for the eight
                months ended December 31, 2001. We recorded asset impairments and
                special charges for discontinued operations of $4,905 and $11,828 for
                the years ended December 31, 2003 and 2002, and $10,716 for the eight
                months ended December 31, 2001. Special charges and asset impairments
                related to discontinued operations are included in Loss from Discontinued
                Operations.




(3)
            Basic
                and diluted net income per share and the weighted average number
                of common
                and potential dilutive common shares outstanding are computed after
                giving
                retroactive effect to the 1-for-5 reverse stock split effected on
                October
                1, 2001.




15


**ITEM7.**
            **MANAGEMENT’S
                DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION****AND
                RESULTS OF OPERATIONS**




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




**Executive
      Overview**




Miller
      Industries, Inc. is the world’s largest manufacturer of vehicle towing and
      recovery equipment, with domestic manufacturing subsidiaries in Tennessee and
      Pennsylvania, and foreign manufacturing subsidiaries in France and the United
      Kingdom. We offer a broad range of equipment to meet our customers’ design,
      capacity and cost requirements under our Century ® ,
      Vulcan ® ,
      Challenger ® ,
      Holmes ® ,
      Champion ® ,
      ChevronTM, Eagle ® ,
      Titan ® ,
      JigeTM
and BonifaceTM brand names.




Overall,
      management focuses on a variety of key indicators to monitor our operating
      and
      financial performance. These indicators include measurements of revenue,
      operating income, gross margin, income from continuing operations, earnings
      per
      share, capital expenditures and cash flow.




We
      derive
      revenues primarily from product sales made through our network of domestic
      and
      foreign independent distributors. Our revenues are sensitive to a variety of
      factors, such as demand for, and price of, our products, our technological
      competitiveness, our reputation for providing quality products and reliable
      service, competition within our industry, the cost of raw materials (including
      aluminum and steel) and general economic conditions.




During
      2005, our revenues were positively affected by a general increase in demand
      for
      our products resulting from general economic improvements. In addition, we
      continued the manufacture of heavy-duty towing and recovery units for several
      military and governmental orders for towing and recovery equipment. We also
      began a project with DataPath, Inc. to assist in the design and engineering
      of
      mobile communications trailers for military application. In March 2005, we
      entered into a new agreement with DataPath calling for us to manufacture and
      sell to them all of their requirements for this type of equipment during the
      five-year term of the agreement. As a result of these projects, as well as
      the
      general increase in demand for our products, we have a strong backlog that
      we
      expect to continue into 2006.




We
      have
      been and will continue to be affected by recent large increases in the prices
      that we pay for raw materials, particularly aluminum, steel and related raw
      materials. Raw material costs represent a substantial part of our total costs
      of
      operations, and management expects aluminum and steel prices to remain at
      historically high levels for the foreseeable future. As we determined necessary,
      we implemented price increases to offset these higher costs. We also began
      to
      develop alternatives to the components used in our production process that
      incorporate these raw materials. We have shared several of these alternatives
      with our major component part suppliers, some of whom have begun to implement
      them in the production of our component parts. We continue to monitor raw
      material prices and availability in order to more favorably position the Company
      in this dynamic market.




In
      June
      2005, we entered into a new $27.0 million senior credit facility with Wachovia
      Bank, National Association. Proceeds from this new senior credit facility were
      used to repay The CIT Group/Business Credit, Inc. and William G. Miller, our
      Chairman and Co-Chief Executive Officer, under our former senior credit
      facility, and as a result, our former senior credit facility was satisfied
      and
      terminated, and Mr. Miller no longer holds any of our senior debt. The interest
      rates under the new senior credit facility reflect substantial reductions from
      the rates on our former senior credit facility. At December 31, 2005, the
      balance under our new senior credit facility was $6.3 million, consisting
      entirely of the term loan portion of this facility. This lower level of
      indebtedness represents a significant decrease in our overall indebtedness
      from
      prior periods. In June 2005, we also amended our junior credit facility by
      adding an additional loan which increased our subordinated debt from $4.2
      million to $10.0 million. The maturity date on the junior credit facility was
      extended to September 17, 2008, and the loans under the facility continue to
      bear interest at a rate equal to 9.0%. Mr. Miller, as successor to Harbourside
      Investments, LLLP (an entity that he controlled until its liquidation and
      distribution in May 2005) is now the sole lender under our amended junior credit
      facility.




16




**Compliance
      with New York Stock Exchange Continued Listing Standards**




In
      June
      2003, we received notification from the New York Stock Exchange that we were
      not
      in compliance with the NYSE’s continued listing standards because we did not
      have sufficient shareholders’ equity or an adequate 30-day average market
      capitalization. In response, we implemented a plan for regaining compliance
      with
      the continued listing standards. In December 2004, the NYSE notified us that,
      as
      a result of our compliance plan, we had regained compliance with the NYSE’s
      continued listing standards and had been approved as a “company in good
      standing” with the NYSE. As a condition to the NYSE’s approval, we completed a
      12-month follow-up period with the NYSE to ensure continued compliance with
      the
      continued listing standards, and we continue to be subject to the NYSE’s routine
      monitoring procedures.




**Discontinued
      Operations**




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




In
      general, the customary operating liabilities of these disposed businesses were
      assumed by the new owners. Our subsidiaries that sold these businesses are
      nevertheless subject to some continuing liabilities with respect to their
      pre-sale operations, including, for example, liabilities related to litigation,
      certain trade payables, workers compensation and other insurance, surety bonds,
      and real estate. Except in the case of direct guarantees, these are not
      obligations of Miller Industries, Inc. and Miller Industries, Inc. would expect
      to take whatever steps it deems appropriate to protect itself from any such
      liabilities.




In
      October 2005, RoadOne, Inc. filed for liquidation under Chapter 7 of the federal
      bankruptcy laws in the Bankruptcy Court of the Eastern District of Tennessee
      and
      a trustee was appointed. Although Miller Industries, Inc. is the largest
      creditor of RoadOne, Inc., the filing is not expected to have a material adverse
      effect on our consolidated financial position or results of operations. At
      this
      time, management is not able to predict whether or not any liabilities of
      discontinued operations currently reflected in our consolidated financial
      statements will be eliminated.




**Critical
      Accounting Policies**




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




***Accounts
      receivable***




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




17


***Valuation
      of long-lived assets and goodwill***




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




***Warranty
      Reserves***




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




***Income
      taxes***




We
      recognize deferred tax assets and liabilities based on differences between
      the
      financial statement carrying amounts and the tax bases of assets and
      liabilities. We consider the need to record a valuation allowance to reduce
      deferred tax assets to the amount that is more likely than not to be realized.
      We consider tax loss carrybacks, reversal of deferred tax liabilities, tax
      planning and estimates of future taxable income in assessing the need for a
      valuation allowance. We currently have a full valuation allowance against our
      net deferred tax assets from continuing and discontinued operations. The
      allowance reflects our recognition that cumulative losses in recent years
      indicate that it is unclear whether certain future tax benefits will be realized
      through future taxable income. Differences between the effective tax rate and
      the expected tax rate are due primarily to changes in deferred tax asset
      valuation allowances. The balance of the valuation allowance was $8.8 million
      and $16.2 million at December 31, 2005 and 2004, respectively.




***Revenues***




Under
      our
      accounting policies, sales are recorded when equipment is shipped or risk of
      ownership is transferred to independent distributors or other customers. While
      we manufacture only the bodies of wreckers, which are installed on truck chassis
      manufactured by third parties, we frequently purchase the truck chassis for
      resale to our customers. Sales of company-purchased truck chassis are included
      in net sales. Margins are substantially lower on completed recovery vehicles
      containing company-purchased chassis because the markup over the cost of the
      chassis is nominal.




***Seasonality***




We
      have
      experienced some seasonality in net sales due in part to decisions by purchasers
      of towing and recovery equipment to defer purchases near the end of the chassis
      model year. Our net sales have historically been seasonally impacted due in
      part to weather conditions.




***Foreign
      Currency Translation***




The
      functional currency for our foreign operations is the applicable local currency.
      The translation from the applicable foreign currencies to U.S. dollars is
      performed for balance sheet accounts using current exchange rates in effect
      at
      the balance sheet date, historical rates for equity and the weighted average
      exchange rate during the period for
      revenue and expense accounts. The gains or losses resulting from such
      translations are included in shareholders’ equity. For intercompany debt
      denominated in a currency other than the functional currency, the remeasurement
      into the functional currency is also included in shareholders’ equity as the
      amounts are considered to be of a long-term investment nature.


18




**Results
      of Operations**




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




**2005**
            
            **2004**
            
            **2003**Continuing
                Operations:Net
                Sales
            **100.0%**
            
            100.0%
            
            100.0%Costs
                and expenses:Costs
                of operations
            **85.8%**
            
            86.8%
            
            86.9%Selling,
                general and administrative
            **6.9%**
            
            8.0%
            
            8.5%Special
                charges
            **0.0%**
            
            0.0%
            
            0.3%Interest
                expense, net
            **1.1%**
            
            2.0%
            
            2.7%Total
                costs and expenses
            **93.8%**
            
            96.8%
            
            98.4%Income
                before income taxes
            **6.2%**
            
            3.2%
            
            1.6%Discontinued
                Operations:Net
                Sales
            **100.0%**
            
            100.0%
            
            100.0%Costs
                and expenses:Costs
                of operations
            **90.3%**
            
            92.5%
            
            90.3%Selling,
                general and administrative
            **10.9%**
            
            9.5%
            
            13.8%Special
                charges
            **0.0%**
            
            0.0%
            
            11.3%Interest
                expense, net
            **0.0%**
            
            1.6%
            
            7.0%Total
                costs and expenses
            **101.2%**
            
            103.6%
            
            122.4%Loss
                before income taxes
            **(1.2)%**
            
            (3.6)%
            
            (22.4)%




***Year
      Ended December 31, 2005 Compared to Year Ended December 31,
      2004***




*Continuing
      Operations*




Net
      sales
      from continuing operations were $351.9 million for the year ended December
      31,
      2005 compared to $236.3 million for the year ended December 31, 2004. The
      increase is primarily the result of overall improvements in market conditions,
      with increases in demand leading to increases in production levels, production
      and delivery of units under contract with the Australian military and production
      of mobile communication trailers for DataPath. To a lesser extent, this increase
      is also attributable to price increases that we implemented throughout 2004
      and
      2005.




Costs
      of
      operations as a percentage of net sales decreased to 85.8% for the year ended
      December 31, 2005 from 86.8% for the year ended December 31, 2004 due to
      increases in productivity as demand for our products increased.




Selling,
      general, and administrative expenses decreased as a percentage of net sales
      from
      8.0% for the year ended December 31, 2004 to 6.9% for the year ended December
      31, 2005, due to the fixed nature of certain of these expenses spread over
      the
      higher sales volume.




The
      effective rate for the provision for income taxes for continuing operations
      was
      13.6% for the year ended December 31, 2005 compared to 9.6% for the year ended
      December 31, 2004. The increase in the effective tax rate primarily reflects
      additional taxes on foreign income for the period.




19




*Discontinued
      Operations*




Net
      sales
      from the distribution group decreased to $11.5 million for the year ended
      December 31, 2005 compared to $37.8 million for the year ended December 31,
      2004. Revenues were negatively impacted by the disposal of all distributor
      locations by the end of 2005. The towing services segment had no net sales
      during the years ended December 31, 2005 and 2004, because all towing services
      operations were sold during 2003.




Cost
      of
      sales as a percentage of net sales for the distribution group was 90.3% for
      the
      year ended December 31, 2005 compared to 92.5% for the year ended December
      31,
      2004. There were no costs of sales for the towing services segment during the
      years ended December 31, 2005 and 2004. As explained above, we sold all our
      remaining towing services markets by the end of calendar 2003.




Selling,
      general, and administrative expenses as a percentage of sales was 10.9% for
      the
      distribution group and 0.0% for the towing services segment for the year ended
      December 31, 2005 compared to 9.3% and 0.0%, respectively for the year ended
      December 31, 2004. Increases in the percentage of sales for the distribution
      group were primarily the result of lower administrative expenses spread over
      a
      smaller revenue base, as we continued to sell the remaining distribution
      location.




The
      effective rate for the provision for income taxes for discontinued operations
      was 0.0% for the year ended December 31, 2005, compared to 10.2% for the year
      ended December 31, 2004.




*Interest
      Expense*




Our
      total
      interest expense for continuing and discontinued operations decreased to $4.0
      million for the year ended December 31, 2005 from $5.3 million for the
      comparable year-ago period. Interest expense was $4.0 million for continuing
      operations and $0.0 million for discontinued operations for the year ended
      December 31, 2005, compared to $4.7 million for continuing operations and $0.6
      million for discontinued operations for the year ended December 31, 2004.
      Decreases in interest expense were due to overall decreases in debt levels,
      as
      well as lower interest rates on our new senior credit facility.




***Year
      Ended December 31, 2004 Compared to Year Ended December 31,
      2003***




*Continuing
      Operations*




Net
      sales
      from continuing operations were $236.3 million for the year ended December
      31,
      2004 compared to $206.0 million for the year ended December 31, 2003. The
      increase is primarily the result of overall improvements in market conditions,
      with increases in demand leading to increases in production levels, and is
      attributable to a lesser extent to price increases implemented during 2004.
      There were no sales for the towing services segment in 2004 compared to $14.0
      million for the comparable prior year as the remaining towing services entities
      were sold during 2003.




Costs
      of
      operations as a percentage of net sales decreased slightly to 86.8% for the
      year
      ended December 31, 2004 from 86.9% for the year ended December 31, 2003.
      Selling, general, and administrative expenses changed slightly as a percentage
      of net sales from 8.5% for the year ended December 31, 2003 to 8.0% for the
      year
      ended December 31, 2004, reflecting our ongoing focus to control costs of
      continuing operations while disposing of our towing services segment and
      distribution group.




Towing
      services revenues and cost of operations reflect the sale of the final towing
      services operations in 2003. These operations have been reclassified from
      discontinued operations to continuing operations based on certain on-going
      cash
      flows via a long-term licensing agreement.




The
      effective rate for the provision for income taxes for continuing operations
      was
      9.6% for the year ended December 31, 2004 compared to 37.0% for the year ended
      December 31, 2003. In prior years, we recorded a full valuation allowance
      reflecting the recognition that continuing losses from operations and certain
      liquidity matters indicated that it was unclear that certain future tax benefits
      would be realized through future taxable income.




20


*Discontinued
      Operations*




Net
      sales
      of discontinued operations decreased to $37.8 million for the year ended
      December 31, 2004 from $77.1 million for the year ended December 31, 2003.
      Net
      sales of the distribution group were $37.8 million for the year ended December
      31, 2004 compared to $68.7 million for the year ended December 31, 2003. There
      were no net sales for the towing and recovery services segment during the year
      ended December 31, 2004 compared to $8.4 million for the year ended December
      31,
      2003, as a result of all remaining towing services operations being sold during
      2003.




Cost
      of
      sales as a percentage of net sales for the distribution group was 92.5% for
      the
      year ended December 31, 2004 compared to 92.3% for the year ended December
      31,
      2003. There were no costs of sales for the towing services segment during the
      year ended December 31, 2004, compared to 73.2% for the year ended December
      31,
      2003.




Selling,
      general, and administrative expenses as a percentage of sales was 9.3% for
      the
      distribution group and 0.0% for the towing services segment for the year ended
      December 31, 2004 compared to 8.2% and 59.9%, respectively for the year ended
      December 31, 2003. Increases in the percentage of sales for the distribution
      group were primarily the result of lower administrative expenses spread over
      a
      smaller revenue base, as we continue to sell distribution
      locations.




The
      effective rate for the provision for income taxes for discontinued operations
      was 10.2% for the year ended December 31, 2004, compared to 6.0% for the year
      ended December 31, 2003.




*Interest
      Expense*




Our
      total
      interest expense for continuing and discontinued operations decreased to $5.3
      million for the year ended December 31, 2004 from $11.0 million for the
      comparable year-ago period. Interest expense was $4.7 million for continuing
      operations and $0.6 million for discontinued operations for the year ended
      December 31, 2004, compared to $5.6 million for continuing operations and $5.4
      million for discontinued operations for the year ended December 31, 2003.
      Interest expense for the year ended December 31, 2003 includes commitment fees
      charged in conjunction with the maturing of our junior credit facility in July
      2003 and the write-off of unamortized loan costs from our senior credit
      facility.




**Liquidity
      And Capital Resources**




As
      of
      December 31, 2005, we had cash and cash equivalents of $6.1 million, exclusive
      of unused availability under our credit facilities. Our primary cash
      requirements include working capital, capital expenditures and interest and
      principal payments on indebtedness under our credit facilities. We expect our
      primary sources of cash to be cash flow from operations, cash and cash
      equivalents on hand at December 31, 2005 and borrowings from unused availability
      under our credit facilities. We expect these sources to be sufficient to satisfy
      our cash needs during 2006.




We
      recently determined to expand our existing manufacturing facilities in Ooltewah,
      Tennessee and Hermitage, Pennsylvania as a result of the recent increases in
      demand for our products. The cost of these projects is anticipated to be
      approximately $10 million. We expect to fund these projects from cash flows
      and
      unused availability under our senior credit facility.




Over
      the
      past year, we generally have used available cash flow to reduce the outstanding balance on
      our
      credit facilities and to pay down other long-term debt and capital lease
      obligations. In addition, our working capital requirements have been and will
      continue to be significant in connection with the increase in our manufacturing
      output to meet recent increases in demand for our products.




Cash
      provided by operating activities was $13.4 million for the year ended December
      31, 2005 compared to $5.7 million used in operating activities for the year
      ended December 31, 2004 and $13.4 million provided by operating activities
      for
      the year ended December 31, 2003. The cash provided by operating activities
      for
      the year ended
      December 31, 2005 reflects increases in profitability partially offset by
      increases in accounts receivable and inventory directly related to our revenue
      increases and increases in accounts payable and accruals to support
      increased productivity.


21




Cash
      provided by investing activities was $0.2 million for the year ended December
      31, 2005, compared to $3.9 million for the year ended December 31, 2004 and
      $8.9
      million for the year ended December 31, 2003. The cash provided by investing
      activities for the year ended December 31, 2005 was primarily from proceeds
      for
      the sale of distribution operations.




Cash
      used
      in financing activities was $10.2 million for the year ended December 31, 2005,
      compared to $2.5 million for the year ended December 31, 2004, and $20.3 million
      for the year ended December 31, 2003. The cash used in financing activities
      in
      the year ended December 31, 2005 paid down our credit facilities and repaid
      other outstanding long-term debt and capital lease obligations.




***Contractual
      Obligations***




The
      following is a summary of our contractual obligations for our continuing
      operations as of December 31, 2005.




**Payment
                Due By Period (in thousands)****Contractual
                Obligations**
            
            **Total**
            
            **Less
                than**
              **1
                year**
            
            **1-3
                years**
            
            **3-5
                years**
            
            **More
                than**
              **5
                years**Outstanding
                Borrowings Under New Senior Credit Facility
            
            $
            6,300
            
            $
            1,400
            
            $
            2,800
            
            $
            2,100
            
            $
            -Outstanding
                Borrowings Under Junior Credit Facility
            
            
            10,000
            
            
            -
            
            
            10,000
            
            
            -
            
            
            -Mortgage
                Notes Payable
            
            
            1,901
            
            
            76
            
            
            163
            
            
            1,662
            
            
            -Equipment
                Notes Payable (Capital Lease Obligations)
            
            
            187
            
            
            109
            
            
            69
            
            
            9
            
            
            -Other
                Notes Payable
            
            
            10
            
            
            10
            
            
            -
            
            
            -
            
            
            -Operating
                Lease Obligations
            
            
            1,800
            
            
            827
            
            
            780
            
            
            172
            
            
            21Purchase
                Obligations (1)
            
            
            24,169
            
            
            24,169
            
            
            -
            
            
            -
            
            
            -Total
            
            $
            44,367
            
            $
            26,591
            
            $
            13,812
            
            $
            3,943
            
            $
            21


____________________




(1)
            Purchase
                obligations represent open purchase orders for raw materials and
                other
                components issued in the normal course of
                business.




***Credit
      Facilities and Other Obligations***




*New
      Senior Credit Facility*




On
      June
      17, 2005, we entered into a Credit Agreement with Wachovia Bank, National
      Association, for a $27.0 million senior secured credit facility. Proceeds from
      this new senior credit facility were used to repay The CIT Group/Business
      Credit, Inc. and William
      G. Miller, our Chairman of the Board and Co-Chief Executive Officer, under
      our former senior credit facility. As a result, effective June 17, 2005, our
      former senior credit facility was satisfied and terminated, and Mr. Miller
      no
      longer holds any of our senior debt.




The
      new
      senior credit facility consists of a $20.0 million revolving credit facility,
      and a $7.0 million term loan. In the absence of a default, all new borrowings
      under the revolving credit facility bear interest at the LIBOR Market Index
      Rate
      (as defined in the new Credit Agreement) plus a margin of between 1.75% to
      2.50%
      per annum that is subject to adjustment from time to time based upon the
      Consolidated Leverage Ratio (as defined in the new Credit Agreement), and the
      term loan bears interest at a 30-day adjusted LIBOR rate plus a margin of
      between 1.75% to 2.50% per annum that is subject to adjustment based upon the
      Consolidated Leverage Ratio. The revolving credit facility expires on June
      15,
      2008, and the term loan matures on June 15, 2010. The new senior credit facility is
      secured by substantially all of our assets, and contains
      customary representations and warranties, events of default and affirmative
      and
      negative covenants for secured facilities of this type.




22




*Junior
      Credit Facility*




Our
      junior credit facility is, by its terms, expressly subordinated only to the
      new
      senior credit facility, and is secured by a second priority lien and security
      interest in substantially all of our other assets.  The
      junior credit facility contains requirements for the maintenance of certain
      financial covenants, and also imposes restrictions on capital expenditures,
      incurrence of indebtedness, mergers and acquisitions, distributions and
      transfers and sales of assets. The junior credit facility has been amended
      several times, most recently on June 17, 2005.




During
      the second half of 2003, Contrarian Funds, LLC purchased all of the outstanding
      debt of the junior credit facility in a series of transactions. As part of
      its
      purchase, Contrarian also purchased warrants for shares of our common stock,
      which were subsequently exchanged for shares of our common stock. In November
      2003, Harbourside Investments, LLLP purchased 44.286% of the subordinated debt
      and warrants from Contrarian. In February 2004, Contrarian and Harbourside
      converted approximately $7.0 million in debt under the junior credit facility
      into shares of our common stock. In May 2004, we completed the sale of 480,000
      shares of our common stock at a price of $9.00 per share to a small group of
      unaffiliated private investors, and the proceeds of this sale, together with
      additional borrowings under our former senior credit facility, were used to
      retire the portion of the junior credit facility owed to Contrarian
      (approximately $5.4 million of principal and approximately $350,000 of accrued
      interest). On May 31, 2005, Harbourside was dissolved and distributed all of
      its
      shares of our common stock to its partners. As a result, William G. Miller,
      as
      successor lender agent to Harbourside, became the sole lender under the junior
      credit facility.




The
      June
      17, 2005 amendment to the junior credit facility provided
      for a new term loan, made by Mr. Miller as sole lender and successor lender
      agent, in the principal amount of approximately $5.7 million. As a result,
      on
      June 17, 2005, the total outstanding principal amount of term loans under the
      junior credit facility was $10.0 million. The amendment also extended the
      maturity date of the junior credit facility to September 17, 2008, and amended
      certain terms of the junior credit agreement to, among other things, make
      certain of the representations and warranties, covenants and events of default
      more consistent with the representations and warranties, covenants and events
      of
      default in the Credit Agreement for our new senior credit facility. In the
      absence of a default, all of the term loans outstanding under the junior credit
      facility continue to bear interest at a rate of 9.0% per annum.




*Former
      Senior Credit Facility*




Our
      former senior credit facility with CIT and Mr. Miller, which was terminated
      in
      June 2005, consisted of an aggregate $32.0 million credit facility, including
      a
      $15.0 million revolving loan, a $5.0 million term loan and a $12.0 million
      term
      loan. The revolving credit facility provided for separate and distinct loan
      commitment levels for our towing and recovery equipment segment and RoadOne
      towing services segment, respectively. Borrowing availability under the
      revolving portion of the former senior credit facility was based on a percentage
      of eligible inventory and accounts receivable (determined on eligibility
      criteria set forth in the credit facility) and subject to a maximum borrowing
      limitation. Borrowings under the term loans were collateralized by substantially
      all of our domestic property, plants, and equipment. The former senior credit
      facility bore interest at the prime rate (as defined) plus 2.75%, subject to
      the
      rights of the senior lender agent or a majority of the lenders to charge a
      default rate equal to the prime rate (as defined) plus 4.75% during the
      continuance of any event of default thereunder. The former senior credit
      facility contained requirements relating to maintaining minimum excess
      availability at all times and minimum monthly levels of earnings before income
      taxes and depreciation and amortization (as defined) based on the most recently
      ended trailing three month period. In addition, the former senior credit
      facility contained restrictions on capital expenditures, incurrence of
      indebtedness, mergers and acquisitions, distributions and transfers and sales
      of
      assets. The former senior credit facility also contained requirements related
      to
      weekly and monthly collateral reporting.




*Interest
      Rate Sensitivity*




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


23




*Outstanding
      Borrowings*




Outstanding
      borrowings under the senior and junior credit facilities as of December 31,
      2005
      and 2004 were as follows (in thousands):




**2005**
            
            **2004**Senior
                Credit FacilityRevolving
                Credit Facility
            
            **$**
            **-**
            
            $
            7,322Term
                Loan
            
            
            **6,300**
            
            
            15,163Total
            
            
            **6,300**
            
            
            22,485Junior
                Credit Facility
            
            
            **10,000**
            
            
            4,211Total
                Outstanding Borrowings
            
            **$**
            **16,300**
            
            $
            26,696




The
      substantial reductions in our overall indebtedness reflected above were
      primarily due to our improved operating cash flow resulting from increased
      sales
      levels and overall profitability.




*Other
      Long-Term Obligations*




In
      addition to the borrowings under the senior and junior credit facilities
      described above, we had approximately $2.1 million of mortgage notes payable,
      equipment notes payable and other long-term obligations at December 31, 2005.
      We
      also had approximately $1.9 million in non-cancellable operating lease
      obligations for continuing and discontinued operations.




**Recent
      Accounting Pronouncements**




In
      November 2004, the Financial Accounting Standards Board (FASB) issued SFAS
      No.
      151 “Inventory Costs-an amendment of ARB No. 43, Chapter 4”. This statement
      clarifies the accounting for abnormal amounts of idle facility expense, freight,
      handling costs and spoilage. This statement also requires the allocation of
      fixed production overhead costs be based on normal production capacity. The
      provisions of SFAS No. 151 are effective for inventory costs beginning in
      January 2006. The adoption of this statement will not have a material impact
      on
      our results of operations or financial position.




In
      December 2004, the FASB issued SFAS No. 123R, “Share-Based Payment”. This
      statement requires the determination of the fair value of share-based
      compensation at the grant date and the recognition of the related compensation
      expense over the period in which the share-based compensation vests. We
      previously reported that we would adopt SFAS No. 123R effective July 1, 2005.
      In
      April 2005, the Securities and Exchange Commission deferred the required
      adoption date of SFAS No. 123R to the beginning of the first quarter of 2006,
      at
      which time we will adopt this statement. We will transition the new guidance
      using the modified prospective method. Applying the same assumptions used for
      the 2005 and 2004 pro forma disclosure in Note 2 of our financial statements,
      we
      estimate our pretax expense associated with previous stock option grants to
      be
      approximately $308,000 in each of 2006 and 2007, and $77,000 in
      2008.




In
      December 2004, the FASB issued FASB Staff Position No. 109-1, “Application of
      FASB Statement No. 109 (SFAS No. 109), Accounting for Income Taxes, to the
      Tax
      Deduction on Qualified Production Activities Provided by the American Jobs
      Creation Act of 2004” (FSP 109-1). FSP 109-1 clarifies that the manufacturer’s
      deduction provided for under the American Jobs Creation Act of 2004 (AJCA)
      should be accounted for as a special deduction in accordance with SFAS No.
      109
      and not as a tax rate reduction. As we are currently utilizing net operating
      loss carryover to reduce taxable income, no benefit for the domestic
      manufacturing deduction has been provided in our financial
      statements.




24


Effective
      July 1, 2005, we adopted SFAS No. 153, “Exchanges of Nonmonetary Assets-an
      amendment of APB Opinion No. 29”. SFAS No. 153 addresses the measurement of
      exchanges of nonmonetary assets. It eliminates the exception from fair value
      measurement for nonmonetary exchanges of similar productive assets in paragraph
      21(b) of APB Opinion No. 29 “Accounting for Nonmonetary Transactions” and
      replaces it with an exception for exchanges that do not have commercial
      substance. A nonmonetary exchange has commercial substance if the future cash
      flows of the entity are expected to change significantly as a result of the
      exchange. The adoption of SFAS No. 153 did not have a material impact on our
      financial statements.




In
      May
      2005, the FASB issued SFAS No. 154. “Accounting Changes and Error Corrections”
(“SFAS No. 154”), which replaces Accounting Principles Board (“APB”) No. 20
“Accounting Changes”, and SFAS No. 3. “Reporting Accounting Changes in Interim
      Financial Statements”. SFAS No. 154 changes the requirements for the accounting
      for and reporting of a change in accounting principle. The statement applies
      to
      all voluntary changes in accounting principle as well as changes required by
      an
      accounting pronouncement. SFAS No. 154 requires retrospective application to
      prior periods’ financial statements of a voluntary change in accounting
      principle unless it is impracticable to determine the period-specific effects
      or
      the cumulative effect of the change. The statement is effective for accounting
      changes and correction of errors made after January 1, 2006.




**ITEM7A.**
            **QUANTITATIVE
                AND QUALITATIVE DISCLOSURES ABOUT MARKET
                RISK**




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




**ITEM8.**
            **FINANCIAL
                STATEMENTS AND SUPPLEMENTARY
                DATA**




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




**ITEM9.**
            **CHANGES
                IN AND DISAGREEMENTS WITH ACCOUNTANTS ON****ACCOUNTING
                AND FINANCIAL DISCLOSURE**




None.




**ITEM9A.**
            **CONTROLS
                AND PROCEDURES**




**Disclosure
      Controls and Procedures**




We
      carried out an evaluation, under the supervision and with the participation
      of
      our management, including our chief executive and chief financial officers,
      of
      the effectiveness of the design and operation of our disclosure controls and
      procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities
      Exchange Act of 1934, as of the end of the period covered by this report. Based
      upon this evaluation, our Co-Chief Executive Officers and our Chief Financial
      Officer have concluded that the disclosure controls and procedures were
      effective as of the end of the period covered by this Annual Report to ensure
      that information required to be disclosed in our reports that we file or submit
      under the Exchange Act are recorded, processed, summarized and reported within
      the time periods specified in Securities and Exchange Commission rules and
      forms.




**Management’s
      Report On Internal Control Over Financial Reporting**




Management
      of Miller Industries, Inc. is responsible for establishing and maintaining
      adequate internal control over financial reporting (as defined in Rules
      13a-15(f) and 15d-15(f) under the Exchange Act). Our internal control over
      financial reporting is a process designed to provide reasonable assurance
      regarding the reliability of financial reporting and the preparation of
      financial statements for external purposes in accordance with accounting
      principles generally accepted in the United States of America.




25


Because
      of its inherent limitations, internal control over financial reporting may
      not
      prevent or detect misstatements. Also, projections of any evaluation of
      effectiveness to future periods are subject to the risk that controls may be
      inadequate because of changes in conditions, or that the degree of compliance
      with the policies or procedures may deteriorate.




Management,
      including our principal executive officers and principal financial officer,
      conducted an evaluation of the effectiveness of our internal control over
      financial reporting as of December 31, 2005. In making this assessment,
      management used the criteria set forth by the Committee of Sponsoring
      Organizations of the Treadway Commission in “Internal Control—Integrated
      Framework”. Based on our assessment under those criteria, we concluded that, as
      of December 31, 2005, we maintained effective internal control over financial
      reporting.




Joseph
      Decosimo and Company, PLLC, the independent registered public accounting firm
      who also audited our consolidated financial statements included in this report,
      has issued an attestation report on management’s assessment of internal control
      over financial reporting, which attestation report appears herein.




March
      10,
      2006




**Attestation
      Report of Registered Public Accounting Firm**






**Report
      of Independent Registered Public Accounting Firm**




Board
      of
      Directors and Shareholders


Miller
      Industries, Inc.


Ooltewah,
      Tennessee




We
      have
      audited management’s assessment, included in the accompanying “Management’s
      Report on Internal Control Over Financial Reporting,” that Miller Industries,
      Inc. and subsidiaries (Company) maintained effective internal control
      over ** financial
      reporting as of December 31, 2005, based on criteria established in *Internal Control—Integrated Framework* issued
      by the Committee of Sponsoring Organizations of the Treadway Commission (the
      COSO criteria) *.* The ** Company’s
      management is responsible for maintaining effective internal control over
      financial reporting and for its assessment of the effectiveness of internal
      control over financial reporting. Our responsibility is to express an opinion
      on
      management’s assessment and an opinion on the effectiveness of the Company’s
      internal control over financial reporting based on our audit.




We
      conducted our audit in accordance with the standards of the Public Company
      Accounting Oversight Board (United States). Those standards require that we
      plan
      and perform the audit to obtain reasonable assurance about whether effective
      internal control over financial reporting was maintained in all material
      respects. Our audit included obtaining an understanding of internal control
      over
      financial reporting, evaluating management’s assessment, testing and evaluating
      the design and operating effectiveness of internal control, and performing
      such
      other procedures as we considered necessary in the circumstances. We believe
      that our audit provides a reasonable basis for our opinion.




A
      company’s internal control over financial reporting is a process designed to
      provide reasonable assurance regarding the reliability of financial reporting
      and the preparation of financial statements for external purposes in accordance
      with generally accepted accounting principles. A company’s internal control over
      financial reporting includes those policies and procedures that (1) pertain
      to
      the maintenance of records that, in reasonable detail, accurately and fairly
      reflect the transactions and dispositions of the assets of the company; (2)
      provide reasonable assurance that transactions are recorded as necessary to
      permit preparation of financial statements in accordance with generally accepted
      accounting principles, and that receipts and expenditures of the company are
      being made only in accordance with authorizations of management and directors
      of
      the company; and (3) provide reasonable assurance regarding prevention or timely
      detection of unauthorized acquisition, use, or disposition of the company’s
      assets that could have a material effect on the financial
      statements.




26


Because
      of its inherent limitations, internal control over financial reporting may
      not
      prevent or detect misstatements. Also, projections of any evaluation of
      effectiveness to future periods are subject to the risk that controls may become
      inadequate because of changes in conditions, or that the degree of compliance
      with the policies or procedures may deteriorate.




In
      our
      opinion, management’s assessment that Miller Industries, Inc. and subsidiaries
      maintained effective internal control over financial reporting as of December
      31, 2005, is fairly stated, in all material respects, based on the COSO
      criteria. Also in our opinion, Miller Industries, Inc. and subsidiaries
      maintained, in all material respects, effective internal control over financial
      reporting as of December 31, 2005, based on the COSO criteria.




We
      have
      also audited, in accordance with the standards of the Public Company Accounting
      Oversight Board (United States), the consolidated balance sheets as of December
      31, 2005 and 2004, and the related consolidated statements of operations,
      shareholders’ equity, and cash flows for each of the three years in the period
      ended December 31, 2005, of Miller Industries, Inc. and subsidiaries and our
      report dated March
      10,
      2006 ,
      expressed ** an
      unqualified opinion on those consolidated financial statements.




/s/
      Joseph Decosimo and Company, PLLC


Chattanooga,
      Tennessee


March
      10,
      2006




**Changes
      in Internal Control Over Financial Reporting**




There
      were no changes in our internal control over financial reporting that occurred
      during our most recent fiscal quarter that have materially affected, or are
      reasonably likely to materially affect, our internal control over financial
      reporting.




**ITEM9B.**
            **OTHER
                INFORMATION**




None.




27


**PART
      III**




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




The
      Proxy
      Statement for our Annual Meeting of Shareholders, to be filed with the
      Securities and Exchange Commission, will contain information relating to our
      directors and audit committee, compliance with Section 16(a) of the Exchange
      Act, and our code of ethics applicable to our chief executive, financial and
      accounting officers, which information is incorporated by reference herein.
      Information relating to our executive officers is included in Item 1 of this
      report.




**ITEM11.**
            **EXECUTIVE
                COMPENSATION**




The
      Proxy
      Statement for our Annual Meeting of Shareholders, to be filed with the
      Securities and Exchange Commission, will contain information relating to
      director and executive officer compensation, which information is incorporated
      by reference herein.




**ITEM12.**
            **SECURITY
                OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND****MANAGEMENT**




The
      Proxy
      Statement for our Annual Meeting of Shareholders, to be filed with the
      Securities and Exchange Commission, will contain information relating to
      security ownership of certain beneficial owners and management, which
      information is incorporated by reference herein.




The
      Proxy
      Statement will also contain information relating to our equity compensation
      plans, which information is incorporated by reference herein.




**ITEM13.**
            **CERTAIN
                RELATIONSHIPS AND RELATED
                TRANSACTIONS**




The
      Proxy
      Statement for our Annual Meeting of Shareholders, to be filed with the
      Securities and Exchange Commission, will contain information relating to certain
      relationships and related transactions between us and certain of our directors
      and executive officers, which information is incorporated by reference
      herein.




**ITEM14.**
            **PRINCIPAL
                ACCOUNTANT FEES AND
                SERVICES**




The
      Proxy
      Statement for our Annual Meeting of Shareholders, to be filed with the
      Securities and Exchange Commission, will contain information relating to the
      fees charged and services provided by Joseph Decosimo and Company, PLLC, our
      principal accountants during the last three fiscal years, and our pre-approval
      policy and procedures for audit and non-audit services, which information is
      incorporated by reference into this report.




28


**PART
      IV**




**ITEM15.**
            **EXHIBITS,
                FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM****8-K**




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




**1.**
            **Financial
                Statements**




**Description**
            **Page
                Number**
              **in
                Report**Report
                of Independent Registered Public Accounting Firm
            F-2Consolidated
                Balance Sheets as of December 31, 2005 and 2004
            F-3Consolidated
                Statements of Operations for the years ended December 31, 2005, 2004
                and
                2003
            F-4Consolidated
                Statements of Shareholders’ Equity for the years ended December 31, 2005,
                2004 and 2003
            F-5Consolidated
                Statements of Cash Flows for the years ended December 31, 2005, 2004
                and
                2003
            F-6Notes
                to Consolidated Financial Statements
            F-7




**2.**
            **Financial
                Statement Schedules**




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




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




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




**3.**
            **Exhibits**




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




**Description**
            
            **Incorporated
                by**
              **Reference
                to**
              **Registration
                File**
              **Number**
            
            **Form
                or Report**
            
            **Date
                of Report**
            
            **Exhibit**
              **Number
                in**
              **Report**3.1
            Charter,
                as amended, of the Registrant
            
            -
            
            10-K
            
            December
                31, 2001
            
            3.13.2
            Bylaws
                of the Registrant
            
            33-79430
            
            S-1
            
            August
                1994
            
            3.210.1
            Settlement
                Letter dated April 27, 1994 between Miller Group, Inc. and the Management
                Group
            
            33-79430
            
            S-1
            
            August
                1994
            
            10.7








29






**Description**
              
              **Incorporated
                  by**
                **Reference
                  to**
                **Registration
                  File**
                **Number**
              
              **Form
                  or Report**
              
              **Date
                  of Report**
              
              **Exhibit**
                **Number
                  in**
                **Report**10.2
              Participants
                  Agreement dated as of April 30, 1994 between the Registrant, Century
                  Holdings, Inc., Century Wrecker Corporation, William G. Miller
                  and certain
                  former shareholders of Miller Group, Inc.
              
              33-79430
              
              S-1
              
              August
                  1994
              
              10.1110.3
              Technology
                  Transfer Agreement dated March 21, 1991 between Miller Group, Inc.,
                  Verducci, Inc. and Jack Verducci
              
              33-79430
              
              S-1
              
              August
                  1994
              
              10.2610.4
              Form
                  of Noncompetition Agreement between the Registrant and certain
                  officers of
                  the Registrant
              
              33-79430
              
              S-1
              
              August
                  1994
              
              10.2810.5
              Form
                  of Nonexclusive Distributor Agreement
              
              33-79430
              
              S-1
              
              August
                  1994
              
              10.3110.6
              Miller
                  Industries, Inc. Stock Option and Incentive Plan**
              
              33-79430
              
              S-1
              
              August
                  1994
              
              10.110.7
              Form
                  of Incentive Stock Option Agreement under Miller Industries, Inc.
                  Stock
                  Option and Incentive Plan**
              
              33-79430
              
              S-1
              
              August
                  1994
              
              10.210.8
              Miller
                  Industries, Inc. Non-Employee Director Stock Option Plan**
              
              33-79430
              
              S-1
              
              August
                  1994
              
              10.410.9
              Form
                  of Director Stock Option Agreement**
              
              33-79430
              
              S-1
              
              August
                  1994
              
              10.510.10
              Employment
                  Agreement dated October 14, 1993 between Century Wrecker Corporation
                  and
                  Jeffrey I. Badgley**
              
              33-79430
              
              S-1
              
              August
                  1994
              
              10.2910.11
              First
                  Amendment to Employment Agreement between Century Wrecker Corporation
                  and
                  Jeffrey I. Badgley**
              
              33-79430
              
              S-1
              
              August
                  1994
              
              10.3310.12
              Form
                  of Employment Agreement between Registrant and each of Messrs.
                  Madonia and
                  Mish**
              
              -
              
              Form
                  10-K
              
              April
                  30, 1995
              
              10.3710.13
              First
                  Amendment to Miller Industries, Inc. Non-Employee Director Stock
                  Option
                  Plan**
              
              -
              
              Form
                  10-K
              
              April
                  30, 1995
              
              10.3810.14
              Second
                  Amendment to Miller Industries, Inc. Non-Employee Director Stock
                  Option
                  Plan**
              
              -
              
              Form
                  10-K
              
              April
                  30, 1996
              
              10.3910.15
              Second
                  Amendment to Miller Industries, Inc. Stock Option and Incentive
                  Plan**
              
              -
              
              Form
                  10-K
              
              April
                  30, 1996
              
              10.4010.16
              Employment
                  Agreement dated July 8, 1997 between the Registrant and William
                  G.
                  Miller**
              
              -
              
              Form
                  10-Q/A
              
              July
                  31, 1997
              
              1010.17
              Guaranty
                  Agreement Among NationsBank of Tennessee, N.A. and certain subsidiaries
                  of
                  Registrant dated January 30, 1998
              
              -
              
              Form
                  10-K
              
              April
                  30, 1998
              
              10.3710.18
              Stock
                  Pledge Agreement Between NationsBank of Tennessee, N.A. and the
                  Registrant
                  dated January 30, 1998
              
              -
              
              Form
                  10-K
              
              April
                  30, 1998
              
              10.38










30




**Description**
              
              **Incorporated
                  by**
                **Reference
                  to**
                **Registration
                  File**
                **Number**
              
              **Form
                  or Report**
              
              **Date
                  of Report**
              
              **Exhibit**
                **Number
                  in**
                **Report**10.19
              Stock
                  Pledge Agreement Between NationsBank of Tennessee, N.A. and the
                  certain
                  subsidiaries of the Registrant dated January 30, 1998
              
              -
              
              Form
                  10-K
              
              April
                  30, 1998
              
              10.3910.20
              Form
                  of Indemnification Agreement dated June 8, 1998 by and between
                  the
                  Registrant and each of William G. Miller, Jeffrey I. Badgley, A.
                  Russell
                  Chandler, Paul E. Drack, Frank Madonia, J. Vincent Mish, Richard
                  H.
                  Roberts, and Daniel N. Sebastian**
              
              -
              
              Form
                  10-Q
              
              September
                  14, 1998
              
              1010.21
              Employment
                  Agreement between the Registrant and Jeffrey I. Badgley, dated
                  September
                  11, 1998**
              
              -
              
              Form
                  10-Q
              
              December
                  15, 1998
              
              10.110.22
              Employment
                  Agreement between the Registrant and Frank Madonia, dated September
                  11,
                  1998**
              
              -
              
              Form
                  10-Q
              
              December
                  15, 1998
              
              10.310.23
              Agreement
                  between the Registrant and Jeffrey I. Badgley, dated September
                  11,
                  1998**
              
              -
              
              Form
                  10-Q
              
              December
                  15, 1998
              
              10.410.24
              Agreement
                  between the Registrant and Frank Madonia, dated September 11,
                  1998**
              
              -
              
              Form
                  10-Q
              
              December
                  15, 1998
              
              10.610.25
              Credit
                  Agreement among Bank of America, N.A., The CIT Group/Business Credit,
                  Inc.
                  and Registrant and its subsidiaries dated July 23, 2001
              
              -
              
              Form
                  10-K
              
              April
                  30, 2001
              
              10.610.26
              Security
                  Agreement among the Registrant and its subsidiaries, The CIT
                  Group/Business Credit, Inc. and Bank of America, N.A. dated July
                  23,
                  2001
              
              -
              
              Form
                  10-K
              
              April
                  30, 2001
              
              10.6110.27
              Stock
                  Pledge Agreement between Registrant and The CIT Group/Business
                  Credit,
                  Inc. dated July 23, 2001
              
              -
              
              Form
                  10-K
              
              April
                  30, 2001
              
              10.6210.28
              Amended
                  and Restated Credit Agreement among the Registrant, its subsidiary
                  and
                  Bank of America, N.A. dated July 23, 2001
              
              -
              
              Form
                  10-K
              
              April
                  30, 2001
              
              10.710.29
              Promissory
                  Note among Registrant, its subsidiary and SunTrust Bank dated July
                  23,
                  2001
              
              -
              
              Form
                  10-K
              
              April
                  30, 2001
              
              10.7110.30
              Promissory
                  Note among Registrant, its subsidiary and AmSouth Bank dated July
                  23,
                  2001
              
              -
              
              Form
                  10-K
              
              April
                  30, 2001
              
              10.7210.31
              Promissory
                  Note among Registrant, its subsidiary and Wachovia Bank, N.A. dated
                  July
                  23, 2001
              
              -
              
              Form
                  10-K
              
              April
                  30, 2001
              
              10.7310.32
              Promissory
                  Note among Registrant, its subsidiary and Bank of America, N.A.
                  dated July
                  23, 2001
              
              -
              
              Form
                  10-K
              
              April
                  30, 2001
              
              10.7410.33
              Warrant
                  Agreement dated July 23, 2001
              
              -
              
              Form
                  10-K
              
              April
                  30, 2001
              
              10.75
    31




**Description**
              
              **Incorporated
                  by**
                **Reference
                  to**
                **Registration
                  File**
                **Number**
              
              **Form
                  or Report**
              
              **Date
                  of Report**
              
              **Exhibit**
                **Number
                  in**
                **Report**10.34
              Forbearance
                  Agreement and First Amendment to the Credit Agreement by and among
                  the
                  Company and its subsidiaries and The CIT Group/Business Credit,
                  Inc. and
                  Bank of America, N.A. dated February 28, 2002
              
              -
              
              Form
                  10-K
              
              December
                  31, 2001
              
              10.810.35
              Second
                  Amendment to the Credit Agreement by and among the Company and
                  its
                  subsidiaries and The CIT Group/Business Credit, Inc. and Bank of
                  America,
                  N.A. dated February 28, 2002
              
              -
              
              Form
                  10-K
              
              December
                  31, 2001
              
              10.8110.36
              First
                  Amendment to the Amended and Restated Credit Agreement among the
                  Registrant, its subsidiary and Bank of America, N.A. dated July
                  23,
                  2001
              
              -
              
              Form
                  10-K
              
              December
                  31, 2001
              
              10.8210.37
              Amended
                  and Restated Intercreditor and Subordination Agreement by and among
                  The
                  CIT Group/Business Credit, Inc. and Bank of America, N.A.
              
              -
              
              Form
                  10-K
              
              December
                  31, 2001
              
              10.8310.38
              Third
                  Amendment to the Credit Agreement by and among the Company and
                  its
                  Subsidiaries and the CIT Group/Business Credit, Inc. and Bank of
                  America,
                  N.A. dated September 13, 2002
              
              -
              
              Form
                  10-K
              
              December
                  31, 2002
              
              10.8410.39
              Fourth
                  Amendment to the Credit Agreement by and among the Company and
                  its
                  Subsidiaries and the CIT Group/Business Credit, Inc. and Bank of
                  America,
                  N.A. dated November 14, 2002
              
              -
              
              Form
                  10-Q/A
              
              September
                  30, 2002
              
              10.110.40
              Fifth
                  Amendment to the Credit Agreement by and among the Company and
                  its
                  Subsidiaries and the CIT Group/Business Credit, Inc. and Bank of
                  America,
                  N.A. dated February 28, 2003
              
              -
              
              Form
                  10-K
              
              December
                  31, 2002
              
              10.8610.41
              Sixth
                  Amendment to the Credit Agreement by and among the Company and
                  its
                  Subsidiaries and the CIT Group/Business Credit, Inc. and Bank of
                  America,
                  N.A. dated April 1, 2003
              
              -
              
              Form
                  10-K
              
              December
                  31, 2002
              
              10.8710.42
              Seventh
                  Amendment to Credit Agreement entered into by and among the Company
                  and
                  its Subsidiaries and CIT Group/Business Credit, Inc., and Bank
                  of America,
                  N.A. dated October 31, 2003
              
              -
              
              Form
                  10-Q
              
              September
                  30, 2003
              
              10.110.43
              Forbearance
                  Agreement by and among the Company and its Subsidiaries and CIT
                  Group/Business Credit, Inc. and Bank of American, N.A. dated October
                  31,
                  2003
              
              -
              
              Form
                  10-Q
              
              September
                  30, 2003
              
              10.2
    32




**Description**
              
              **Incorporated
                  by**
                **Reference
                  to**
                **Registration
                  File**
                **Number**
              
              **Form
                  or Report**
              
              **Date
                  of Report**
              
              **Exhibit**
                **Number
                  in**
                **Report**10.44
              Participation
                  Agreement by and among the Company and its Subsidiaries, CIT
                  Group/Business Credit and Bank of America, N.A. and William G.
                  Miller
                  dated October 31, 2003
              
              -
              
              Form
                  10-Q
              
              September
                  30, 2003
              
              10.310.45
              Eighth
                  Amendment to the Credit Agreement by and among the Registrant,
                  CIT Group,
                  Inc. and Bank of America, N.A., dated December 24, 2003
              
              -
              
              Form
                  8-K
              
              January
                  20, 2004
              
              10.110.46
              Ninth
                  Amendment to the Credit Agreement by and between the Registrant
                  and CIT
                  Group, Inc., dated December 24, 2003
              
              -
              
              Form
                  8-K
              
              January
                  20, 2004
              
              10.210.47
              Modification
                  of First Amendment to the Amended and Restated Intercreditor and
                  Subordination Agreement by and among CIT Group, Inc., Bank of America,
                  N.A., and Contrarian Funds, LLC dated December 24, 2003
              
              -
              
              Form
                  8-K
              
              January
                  20, 2004
              
              10.310.48
              Second
                  Amendment to the Amended and Restated Intercreditor and Subordination
                  Agreement by and between CIT Group, Inc. and Contrarian Funds,
                  LLC, dated
                  December 24, 2003
              
              -
              
              Form
                  8-K
              
              January
                  20, 2004
              
              10.410.49
              Amended
                  and Restated Participation Agreement by and among the Registrant,
                  CIT and
                  William G. Miller, dated December 24, 2003
              
              -
              
              Form
                  8-K
              
              January
                  20, 200
              
              10.510.50
              Amendment
                  No. 3 to Amended and Restated Credit Agreement by and among the
                  Registrant, Contrarian Funds, LLC and Harbourside Investments,
                  LLLP, dated
                  as of January 14, 2004
              
              -
              
              Form
                  8-K
              
              January
                  20, 2004
              
              10.610.51
              Exchange
                  Agreement by and between the Registrant and Contrarian Funds, LLC,
                  dated
                  as of January 14, 2004
              
              -
              
              Form
                  8-K
              
              January
                  20, 2004
              
              10.710.52
              Exchange
                  Agreement by and between the Registrant and Harbourside Investments,
                  LLLP,
                  dated as of January 14, 2004
              
              -
              
              Form
                  8-K
              
              January
                  20, 2004
              
              10.810.53
              Registration
                  Rights Agreement by and among the Registrant, Harbourside Investments,
                  LLLP and Contrarian Funds, LLC, dated January 20, 2004
              
              -
              
              Form
                  8-K
              
              January
                  20, 2004
              
              10.910.54
              Consent
                  and Tenth Amendment to Credit Agreement by and between the Registrant
                  and
                  The CIT Group/Business Credit, Inc., dated November 22,
                  2004
              
              -
              
              Form
                  10-K
              
              December
                  31, 2004
              
              10.10010.55
              Amendment
                  No. 4 to Amended and Restated Credit Agreement by and among the
                  Registrant, Miller Industries Towing Equipment, Inc., Harbourside
                  Investments, LLLP and certain guarantors set forth on the signature
                  pages
                  thereto, dated November 5, 2004
              
              -
              
              Form
                  10-K
              
              December
                  31, 2004
              
              10.101
   33




**Description**
              
              **Incorporated
                  by**
                **Reference
                  to**
                **Registration
                  File**
                **Number**
              
              **Form
                  or Report**
              
              **Date
                  of Report**
              
              **Exhibit**
                **Number
                  in**
                **Report**10.56
              Non-Employee
                  Director Stock Plan**
              
              -
              
              Schedule
                  14A
              
              January
                  23, 2004
              
              Annex
                  A10.57
              Miller
                  Industries, Inc. 2005 Equity Incentive Plan**
              
              -
              
              Schedule
                  14A
              
              May
                  2, 2005
              
              Annex
                  B10.58
              Credit
                  Agreement, dated June 17, 2005, among Wachovia Bank, NA and the
                  Registrant
              
              -
              
              Form
                  8-K
              
              June
                  17, 2005
              
              10.110.59
              Term
                  Note, dated June 17, 2005, among Wachovia Bank, NA and the
                  Registrant
              
              -
              
              Form
                  8-K
              
              June
                  17, 2005
              
              10.210.60
              Revolving
                  Note, dated June 17, 2005, among Wachovia Bank, NA and the
                  Registrant
              
              -
              
              Form
                  8-K
              
              June
                  17, 2005
              
              10.310.61
              Intercreditor
                  Agreement, dated June 17, 2005, among Wachovia Bank, NA, and William
                  G.
                  Miller
              
              -
              
              Form
                  8-K
              
              June
                  17, 2005
              
              10.410.62
              Security
                  Agreement, dated June 17, 2005, among Wachovia Bank, NA, and the
                  Registrant
              
              -
              
              Form
                  8-K
              
              June
                  17, 2005
              
              10.510.63
              Subsidiary
                  Security Agreement, dated June 17, 2005, among Wachovia Bank, NA,
                  and the
                  subsidiaries of the Registrant named therein
              
              -
              
              Form
                  8-K
              
              June
                  17, 2005
              
              10.610.64
              Pledge
                  Agreement, dated June 17, 2005, among Wachovia Bank, NA, and the
                  Registrant
              
              -
              
              Form
                  8-K
              
              June
                  17, 2005
              
              10.710.65
              Amendment
                  No. 5 to Amended and Restated Credit Agreement, dated June 17,
                  2005, among
                  the Registrant, Miller Industries Towing Equipment, Inc. and William
                  G.
                  Miller
              
              -
              
              Form
                  8-K
              
              June
                  17, 2005
              
              10.810.66
              Promissory
                  Note, dated June 17, 2005, among the Registrant, Miller Industries
                  Towing
                  Equipment, Inc. and William G. Miller
              
              -
              
              Form
                  8-K
              
              June
                  17, 2005
              
              10.921
              Subsidiaries
                  of the Registrant*23.1
              Consent
                  of Joseph Decosimo and Company, PLLC*24
              Power
                  of Attorney (see signature page)*31.1
              Certification
                  Pursuant to Rules 13a-14(a)/15d-14(a) by Co-Chief Executive
                  Officer*31.2
              Certification
                  Pursuant to Rules 13a-14(a)/15d-14(a) by Co-Chief Executive
                  Officer*31.3
              Certification
                  Pursuant to Rule 13a-14(a)/15d-14(a) by Chief Financial
                  Officer*
   34




**Description**
              
              **Incorporated
                  by**
                **Reference
                  to**
                **Registration
                  File**
                **Number**
              
              **Form
                  or Report**
              
              **Date
                  of Report**
              
              **Exhibit**
                **Number
                  in**
                **Report**32.1
              Certification
                  Pursuant to Section 1350 of Chapter 63 of Title 18 of United States
                  Code
                  by Co-Chief Executive Officer*32.2
              Certification
                  Pursuant to Section 1350 of Chapter 63 of Title 18 of United States
                  Code
                  by Co-Chief Executive Officer*32.3
              Certification
                  Pursuant to Section 1350 of Chapter 63 of Title 18 of United States
                  Code
                  by Chief Financial Officer*
 ____________________


*  Filed
      herewith.




**  Management
      contract or compensatory plan or arrangement.




**(b)**
            The
                Registrant hereby files as exhibits to this Report the exhibits set
                forth
                in Item 15(a)3 hereof.




**(c)**
            The
                Registrant hereby files as financial statement schedules to this
                Report
                the financial statement schedules set forth in Item 15(a)2
                hereof.




35










**INDEX
      TO FINANCIAL STATEMENTS**




REPORT
                OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
            F-2CONSOLIDATED
                BALANCE SHEETS AS OF DECEMBER 31, 2005 AND 2004
            F-3CONSOLIDATED
                STATEMENTS OF OPERATIONS FOR THE YEARS ENDEDDECEMBER
                31, 2005, 2004 AND 2003
            F-4CONSOLIDATED
                STATEMENTS OF SHAREHOLDERS’ EQUITY FOR THE YEARSENDED
                DECEMBER 31, 2005, 2004 AND 2003
            F-5CONSOLIDATED
                STATEMENTS OF CASH FLOWS FOR THE YEARS ENDEDDECEMBER
                31, 2005, 2004 AND 2003
            F-6NOTES
                TO CONSOLIDATED FINANCIAL STATEMENTS
            F-7SCHEDULE
                II - VALUATION AND QUALIFYING ACCOUNTS
            S-1








F-1




**REPORT
        OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**
  Board
        of
        Directors and Shareholders
 Miller
        Industries, Inc.
 Ooltewah,
        Tennessee
  We
        have
        audited the accompanying consolidated balance sheets of Miller Industries,
        Inc.
        and subsidiaries as of December 31, 2005 and 2004, and the related consolidated
        statements of operations, shareholders’ equity and cash flows for each of the
        three years in the period ended December 31, 2005. These consolidated financial
        statements and financial statement schedule are the responsibility of the
        company’s management. Our responsibility is to express an opinion on these
        consolidated financial statements and financial statement schedule based
        on our
        audits.
  We
        conducted our audits in accordance with the standards of the Public Company
        Accounting Oversight Board (United States). Those standards require that
        we plan
        and perform the audit to obtain reasonable assurance about whether the
        consolidated financial statements are free of material misstatement. An audit
        includes examining, on a test basis, evidence supporting the amounts and
        disclosures in the consolidated financial statements. An audit also includes
        assessing the accounting principles used and significant estimates made by
        management, as well as evaluating the overall financial statement presentation.
        We believe that our audits provide a reasonable basis for our
        opinion.
  In
        our
        opinion, the consolidated financial statements referred to above present
        fairly,
        in all material respects, the financial position of Miller Industries, Inc.
        and
        subsidiaries as of December 31, 2005 and 2004, and the results of their
        operations and their cash flows for each of the three years in the period
        ended
        December 31, 2005, in conformity with accounting principles generally accepted
        in the United States of America. Also, in our opinion, the financial statement
        schedule when considered in relation to the basic consolidated financial
        statements taken as a whole, presents fairly, in all material respects, the
        information set forth therein.
  We
        also
        have audited, in accordance with the standards of the Public Company Accounting
        Oversight Board (United States), the effectiveness of Miller
        Industries, Inc. and subsidiaries’ internal
        control over financial reporting as of December 31, 2005, based on criteria
        established in *Internal Control—Integrated Framework* issued
        by
        the Committee of Sponsoring Organizations of the Treadway Commission (COSO)
        and
        our report dated March 10, 2006 expressed an unqualified opinion on management’s
        assessment of the effectiveness of Miller
        Industries, Inc. and subsidiaries’ internal
        control over financial reporting and an unqualified opinion on the effectiveness
        of Miller
        Industries, Inc. and subsidiaries’ internal
        control over financial reporting.
  /s/
        Joseph Decosimo and Company, PLLC
  Chattanooga,
        Tennessee
 March
        10,
        2006







F-2


**MILLER
        INDUSTRIES, INC. AND SUBSIDIARIES**
  **CONSOLIDATED
        BALANCE SHEETS**
 **DECEMBER
        31, 2005 AND 200** **4**
  **(In
        thousands, except share data)**
  **2005**
              
              **2004****ASSETS****CURRENT
                  ASSETS:**Cash
                  and temporary investments
              
              **$**
              **6,147**
              
              $
              2,812Accounts
                  receivable, net of allowance for doubtful accounts of $1,834 and
                  $1,116,
                  at December 31, 2005 and 2004, respectively
              
              
              **65,792**
              
              
              49,336Inventories,
                  net
              
              
              **38,318**
              
              
              34,994Prepaid
                  expenses and other
              
              
              **739**
              
              
              1,525Current
                  assets of discontinued operations held for sale
              
              
              **2,422**
              
              
              5,728Total
                  current assets
              
              
              **113,418**
              
              
              94,395**PROPERTY,
                  PLANT, AND EQUIPMENT,**net
              
              
              **17,443**
              
              
              18,762**GOODWILL**
              
              
              **11,619**
              
              
              11,619**OTHER
                  ASSETS**
              
              
              **1,443**
              
              
              1,918**NONCURRENT
                  ASSETS OF DISCONTINUED OPERATIONS****HELD
                  FOR SALE**
              
              
              **647**
              
              
              1,128**$**
              **144,570**
              
              $
              127,822**LIABILITIES
                  AND SHAREHOLDERS’ EQUITY****CURRENT
                  LIABILITIES:**Current
                  portion of long-term obligations
              
              **$**
              **1,595**
              
              $
              2,052Accounts
                  payable
              
              
              **45,352**
              
              
              36,224Accrued
                  liabilities and other
              
              
              **9,821**
              
              
              5,736Current
                  liabilities of discontinued operations held for sale
              
              
              **6,244**
              
              
              10,405Total
                  current liabilities
              
              
              **63,012**
              
              
              54,417**LONG-TERM
                  OBLIGATIONS**,
                  less current portion
              
              
              **16,803**
              
              
              24,345**NONCURRENT
                  LIABILITIES OF DISCONTINUED OPERATIONS HELD FOR
                  SALE**
              
              
              **-**
              
              
              2,275**COMMITMENTS
                  AND CONTINGENCIES**(Notes
                  4 and 7)**SHAREHOLDERS’
                  EQUITY**:Preferred
                  stock, $.01 par value; 5,000,000 shares authorized, none issued
                  or
                  outstanding
              
              
              **0**
              
              
              0Common
                  stock, $.01 par value; 100,000,000 shares authorized, 11,297,474
                  and
                  11,182,606, outstanding at December 31, 2005 and 2004,
                  respectively
              
              
              **113**
              
              
              112Additional
                  paid-in capital
              
              
              **157,996**
              
              
              157,202Accumulated
                  deficit
              
              
              **(93,882**
              **)**
              
              (112,468
              )Accumulated
                  other comprehensive income
              
              
              **528**
              
              
              1,939Total
                  shareholders’ equity
              
              
              **64,755**
              
              
              46,785**$**
              **144,570**
              
              $
              127,822
  The
        accompanying notes are an integral part of these consolidated balance
        sheets.
  F-3
  **MILLER
        INDUSTRIES, INC. AND SUBSIDIARIES**
  **CONSOLIDATED
        STATEMENTS OF OPERATIONS**
 **FOR
        THE YEARS ENDED DECEMBER 31, 2005, 2004 AND 200** **3**
  **(In
        thousands, except per share data)**
  **2005**
              
              **2004**
              
              **2003****NET
                  SALES**Towing
                  and recovery equipment
              
              **$**
              **351,884**
              
              $
              236,308
              
              $
              192,043Towing
                  services
              
              
              **-**
              
              
              -
              
              
              13,953**351,884**
              
              
              236,308
              
              
              205,996**COSTS
                  AND EXPENSES**Costs
                  of operations:Towing
                  and recovery equipment
              
              
              **301,943**
              
              
              205,021
              
              
              168,390Towing
                  services
              
              
              **-**
              
              
              -
              
              
              10,618**301,943**
              
              
              205,021
              
              
              179,008Selling,
                  general, and administrative expenses
              
              
              **24,293**
              
              
              18,904
              
              
              17,411Loss
                  on sale of business
              
              
              **-**
              
              
              -
              
              
              682Interest
                  expense, net
              
              
              **4,012**
              
              
              4,657
              
              
              5,609Total
                  costs and expenses
              
              
              **330,248**
              
              
              228,582
              
              
              202,710**INCOME
                  FROM CONTINUING OPERATIONS BEFORE INCOME TAXES**
              
              
              **21,636**
              
              
              7,726
              
              
              3,286**INCOME
                  TAX PROVISION**
              
              
              **2,936**
              
              
              740
              
              
              1,216**INCOME
                  FROM CONTINUING OPERATIONS**
              
              
              **18,700**
              
              
              6,986
              
              
              2,070**DISCONTINUED
                  OPERATIONS**Loss
                  from discontinued operations, before taxes
              
              
              **(114**
              **)**
              
              (1,371
              )
              
              (17,260
              )Income
                  tax provision (benefit)
              
              
              **-**
              
              
              140
              
              
              (1,037
              )Loss
                  from discontinued operations, net of taxes
              
              
              **(114**
              **)**
              
              (1,511
              )
              
              (16,223
              )**NET
                  INCOME (LOSS)**
              
              **$**
              **18,586**
              
              $
              5,475
              
              $
              (14,153
              )**BASIC
                  INCOME (LOSS) PER COMMON SHARE:**Income
                  from continuing operations
              
              **$**
              **1.67**
              
              $
              0.64
              
              $
              0.22Loss
                  from discontinued operations
              
              
              **(0.01**
              **)**
              
              (0.14
              )
              
              (1.74
              )Basic
                  income (loss)
              
              **$**
              **1.66**
              
              $
              0.50
              
              $
              (1.52
              )**DILUTED
                  INCOME (LOSS) PER COMMON SHARE:**Income
                  from continuing operations
              
              **$**
              **1.63**
              
              $
              0.64
              
              $
              0.22Loss
                  from discontinued operations
              
              
              **(0.01**
              **)**
              
              (0.14
              )
              
              (1.74
              )Diluted
                  income (loss)
              
              **$**
              **1.62**
              
              $
              0.50
              
              $
              (1.52
              )**WEIGHTED
                  AVERAGE SHARES OUTSTANDING:**Basic
              
              
              **11,226**
              
              
              10,860
              
              
              9,342Diluted
              
              
              **11,474**
              
              
              10,982
              
              
              9,342
  The
        accompanying notes are an integral part of these consolidated
        statements.
   F-4
  **MILLER
        INDUSTRIES, INC. AND SUBSIDIARIES**
  **CONSOLIDATED
        STATEMENTS OF SHAREHOLDERS’ EQUITY**
 **FOR
        THE YEARS ENDED DECEMBER 31, 2005, 2004 AND 200** **3**
  **(In
        thousands, except share data)**
  **Common
                  Stock**
              
              **Additional**
                **Paid-In**
                **Capital**
              
              **Accumulated**
                **Deficit**
              
              **Accumulated**
                **Other**
                **Comprehensive**
                **Income
                  (Loss)**
              
              **Total****BALANCE,
                  December 31, 2002**
              
              $
              93
              
              $
              145,088
              
              $
              (103,790
              )
              $
              (1,694
              )
              $
              39,697Net
                  loss
              
              
              0
              
              
              0
              
              
              (14,153
              )
              
              0
              
              
              (14,153
              )Other
                  comprehensive, net of tax:Foreign
                  currency translation adjustments
              
              
              0
              
              
              0
              
              
              0
              
              
              2,356
              
              
              2,356Unrealized
                  gain on financial instruments
              
              
              0
              
              
              0
              
              
              0
              
              
              95
              
              
              95Comprehensive
                  loss
              
              
              0
              
              
              0
              
              
              (14,153
              )
              
              2,451
              
              
              (11,702
              )Exercise
                  of stock options
              
              
              0
              
              
              2
              
              
              0
              
              
              0
              
              
              2**BALANCE,
                  December 31, 2003**
              
              
              93
              
              
              145,090
              
              
              (117,943
              )
              
              757
              
              
              27,997Net
                  income
              
              
              0
              
              
              0
              
              
              5,475
              
              
              0
              
              
              5,475Other
                  comprehensive, net of tax:Foreign
                  currency translation adjustments
              
              
              0
              
              
              0
              
              
              0
              
              
              1,085
              
              
              1,085Unrealized
                  gain on financial instruments
              
              
              0
              
              
              0
              
              
              0
              
              
              97
              
              
              97Comprehensive
                  income
              
              
              0
              
              
              0
              
              
              5,475
              
              
              1,182
              
              
              6,657Issuance
                  of common stock
                  for conversion and exchange of subordinated debt and warrants
                  (1,317,700)
              
              
              13
              
              
              7,527
              
              
              0
              
              
              0
              
              
              7,540Issuance
                  of common stock to unaffiliated private investors
                  (480,000)
              
              
              5
              
              
              4,230
              
              
              0
              
              
              0
              
              
              4,235Issuance
                  of common stock to non-employee directors (33,966)
              
              
              1
              
              
              328
              
              
              0
              
              
              0
              
              
              329Exercise
                  of stock options
              
              
              0
              
              
              27
              
              
              0
              
              
              0
              
              
              27**BALANCE,
                  December 31, 2004**
              
              
              112
              
              
              157,202
              
              
              (112,468
              )
              
              1,939
              
              
              46,785Net
                  income
              
              
              0
              
              
              0
              
              
              18,586
              
              
              0
              
              
              18,586Other
                  comprehensive, net of tax:Foreign
                  currency translation adjustments
              
              
              0
              
              
              0
              
              
              0
              
              
              (1,468
              )
              
              (1,468
              )Unrealized
                  gain on financial instruments
              
              
              0
              
              
              0
              
              
              0
              
              
              57
              
              
              57Comprehensive
                  income
              
              
              0
              
              
              0
              
              
              18,586
              
              
              (1,411
              )
              
              17,175Issuance
                  of common stock to non-employee directors (6,672)
              
              
              0
              
              
              75
              
              
              0
              
              
              0
              
              
              75Exercise
                  of stock options (108,296)
              
              
              1
              
              
              719
              
              
              0
              
              
              0
              
              
              720**BALANCE,
                  December 31, 2005**
              
              $
              113
              
              $
              157,996
              
              $
              (93,882
              )
              $
              528
              
              $
              64,755
  The
        accompanying notes are an integral part of these consolidated
        statements
   F-5
  **MILLER
        INDUSTRIES, INC. AND SUBSIDIARIES**
  **CONSOLIDATED
        STATEMENTS OF CASH FLOWS**
 **FOR
        THE YEARS ENDED DECEMBER 31, 2005, 2004 AND 200** **3**
  **(In
        thousands)**
  **2005**
              
              **2004**
              
              **2003****OPERATING
                  ACTIVITIES:**Net
                  income (loss)
              
              **$**
              **18,586**
              
              $
              5,475
              
              $
              (14,153
              )Adjustments
                  to reconcile net income (loss) to net cash provided by (used in)
                  operating
                  activities:Loss
                  from discontinued operations
              
              
              **114**
              
              
              1,511
              
              
              16,223Depreciation
                  and amortization
              
              
              **2,900**
              
              
              3,232
              
              
              3,715Amortization
                  of deferred financing costs
              
              
              **340**
              
              
              798
              
              
              4,627Provision
                  for doubtful accounts
              
              
              **827**
              
              
              567
              
              
              492Issuance
                  of non-employee director shares
              
              
              **75**
              
              
              329
              
              
              -Loss
                  on disposition of business
              
              
              -
              
              
              -
              
              
              682Loss
                  on disposals of property, plant, and equipment
              
              
              -
              
              
              10
              
              
              54Changes
                  in operating assets and liabilities:Accounts
                  receivable
              
              
              **(17,667**
              **)**
              
              (11,199
              )
              
              7,393Inventories
              
              
              **(4,579**
              **)**
              
              (7,288
              )
              
              2,200Prepaid
                  expenses and other
              
              
              **839**
              
              
              285
              
              
              (997
              )Other
                  assets
              
              
              **(12**
              **)**
              
              (864
              )
              
              (277
              )Accounts
                  payable
              
              
              **9,952**
              
              
              1,271
              
              
              7,942Accrued
                  liabilities and other
              
              
              **4,210**
              
              
              1,501
              
              
              (2,231
              )Net
                  cash provided by (used in) operating activities from continuing
                  operations
              
              
              **15,585**
              
              
              (4,372
              )
              
              25,670Net
                  cash used in operating activities from discontinued
                  operations
              
              
              **(2,225**
              **)**
              
              (1,341
              )
              
              (12,292
              )Net
                  cash provided by (used in) operating activities
              
              
              **13,360**
              
              
              (5,713
              )
              
              13,378**INVESTING
                  ACTIVITIES:**Purchases
                  of property, plant, and equipment
              
              
              **(1,425**
              **)**
              
              (695
              )
              
              (1,178
              )Proceeds
                  from sale of property, plant, and equipment
              
              
              -
              
              
              15
              
              
              51Proceeds
                  from sale of business
              
              
              -
              
              
              -
              
              
              3,645Payments
                  received on notes receivables
              
              
              **227**
              
              
              122
              
              
              808Net
                  cash (used in) provided by investing activities from continuing
                  operations
              
              
              **(1,198**
              **)**
              
              (558
              )
              
              3,326Net
                  cash provided by investing activities from discontinued
                  operations
              
              
              **1,421**
              
              
              4,454
              
              
              5,530Net
                  cash provided by investing activities
              
              
              **223**
              
              
              3,896
              
              
              8,856**FINANCING
                  ACTIVITIES:**Net
                  borrowings (payments) under new senior credit facility
              
              
              **6,300**
              
              
              -
              
              
              -Borrowings
                  under junior credit facility
              
              
              **5,707**
              
              
              -
              
              
              -Payments
                  on long-term obligations
              
              
              **(1,223**
              **)**
              
              (3,542
              )
              
              (3,301
              )Net
                  (payments) borrowings under former credit facility
              
              
              **(18,903**
              **)**
              
              3,093
              
              
              (1,569
              )Borrowings
                  under long-term obligations
              
              
              -
              
              
              2,039
              
              
              260Additions
                  to deferred financing costs
              
              
              **(389**
              **)**
              
              (522
              )
              
              (3,080
              )Termination
                  of interest rate swap
              
              
              **57**
              
              
              96
              
              
              97Proceeds
                  from issuance of common stock
              
              
              -
              
              
              4,235
              
              
              -Proceeds
                  from exercise of stock options
              
              
              **720**
              
              
              27
              
              
              2Net
                  cash (used in) provided by financing activities from continuing
                  operations
              
              
              **(7,731**
              **)**
              
              5,426
              
              
              (7,591
              )Net
                  cash used in financing activities from discontinued
                  operations
              
              
              **(2,511**
              **)**
              
              (7,910
              )
              
              (12,667
              )Net
                  cash used in financing activities
              
              
              **(10,242**
              **)**
              
              (2,484
              )
              
              (20,258
              )**EFFECT
                  OF EXCHANGE RATE CHANGES ON CASH AND TEMPORARY
                  INVESTMENTS**
              
              
              **(557**
              **)**
              
              293
              
              
              1,569**NET
                  CHANGE IN CASH AND TEMPORARY INVESTMENTS**
              
              
              **2,784**
              
              
              (4,008
              )
              
              3,545**CASH
                  AND TEMPORARY INVESTMENTS, beginning of year**
              
              
              **2,812**
              
              
              5,240
              
              
              2,097**CASH
                  AND TEMPORARY INVESTMENTS-DISCONTINUED OPERATIONS, beginning of
                  year**
              
              
              **574**
              
              
              2,154
              
              
              1,752**CASH
                  AND TEMPORARY INVESTMENTS-DISCONTINUED OPERATIONS, end of
                  year**
              
              
              **23**
              
              
              574
              
              
              2,154**CASH
                  AND TEMPORARY INVESTMENTS, end of year**
              
              **$**
              **6,147**
              
              $
              2,812
              
              $
              5,240**SUPPLEMENTAL
                  DISCLOSURE OF CASH FLOW INFORMATION:**Debt
                  conversion
              
              **$**
              **-**
              
              $
              7,540
              
              $
              -Cash
                  payments for interest
              
              **$**
              **3,875**
              
              $
              4,173
              
              $
              5,060Cash
                  payments for income taxes
              
              **$**
              **865**
              
              $
              815
              
              $
              358
  The
        accompanying notes are an integral part of these consolidated
        statements
  F-6
 **MILLER
              INDUSTRIES, INC. AND SUBSIDIARIES**
 **NOTES
            TO CONSOLIDATED FINANCIAL STATEMENTS**
    **1.**
              **ORGANIZATION
                  AND NATURE OF OPERATIONS**
  Miller
        Industries, Inc. and subsidiaries (“the Company”) is the world’s largest
        manufacturer of vehicle towing and recovery equipment. The principal markets
        for
        the Company’s towing and recovery equipment are approximately 120 independent
        distributors and users of towing and recovery equipment located primarily
        throughout North America and other customers throughout the world. The Company’s
        products are marketed under the brand names of Century, Challenger, Holmes,
        Champion, Eagle, Jige, Boniface, Vulcan, and Chevron. As further described
        in
        Note 12, during the year ended December 31, 2002, the Company’s management and
        board of directors made the decision to divest of the remainder of its towing
        services segment, as well as the operations of the distribution group of
        the
        towing and recovery equipment segment. At December 31, 2005, the Company
        had
        completed this process.
   **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.
  **Fair
        Value of Financial Instruments**
  The
        carrying values of cash and temporary investments, accounts receivable, accounts
        payable, and accrued liabilities are reasonable estimates of their fair values
        because of the short maturity of these financial instruments. The carrying
        values of long-term obligations are reasonable estimates of their fair values
        based on the rates available for obligations with similar terms and
        maturities.
  **Inventories**
  Inventory
        costs include materials, labor, and factory overhead. Inventories are stated
        at
        the lower of cost or market, determined on a first-in, first-out basis.
        Inventories for continuing operations at December 31, 2005 and 2004 consisted
        of
        the following (in thousands):
   F-7
 **MILLER
              INDUSTRIES, INC. AND SUBSIDIARIES**
 **NOTES
            TO CONSOLIDATED FINANCIAL STATEMENTS**
  
 **2005**
              
              **2004**Chassis
              
              **$**
              **2,346**
              
              $
              2,556Raw
                  materials
              
              
              **16,654**
              
              
              15,667Work
                  in process
              
              
              **10,989**
              
              
              10,338Finished
                  goods
              
              
              **8,329**
              
              
              6,433**$**
              **38,318**
              
              $
              34,994
  **Property,
        Plant, and Equipment**
  Property,
        plant, and equipment are recorded at cost. Depreciation for financial reporting
        purposes is provided using the straight-line method over the estimated useful
        lives of the assets. Accelerated depreciation methods are used for income
        tax
        reporting purposes. Estimated useful lives range from 20 to 30 years for
        buildings and improvements and 5 to 10 years for machinery and equipment,
        furniture and fixtures, and software costs. Expenditures for routine maintenance
        and repairs are charged to expense as incurred. Internal labor is used in
        certain capital projects.
  Property,
        plant, and equipment for continuing operations at December 31, 2005 and 2004
        consisted of the following (in thousands):
  **2005**
              
              **2004**Land
              
              **$**
              **1,768**
              
              $
              1,783Buildings
                  and improvements
              
              
              **19,298**
              
              
              19,207Machinery
                  and equipment
              
              
              **12,427**
              
              
              12,153Furniture
                  and fixtures
              
              
              **5,157**
              
              
              5,094Software
                  costs
              
              
              **6,420**
              
              
              6,192**45,070**
              
              
              44,429Less
                  accumulated depreciation
              
              
              **(27,627**
              **)**
              
              (25,667
              )**$**
              **17,443**
              
              $
              18,762
  The
        Company recognized $2,760,000, $3,092,000, and $3,570,000, in depreciation
        expense for continuing operations in 2005, 2004 and 2003, respectively.
        Depreciation expense for discontinued operations was $148,000 in 2003, and
        is
        included in the loss from discontinued operations in the consolidated statement
        of operations.
  The
        Company capitalizes costs related to software development in accordance with
        established criteria, and amortizes those costs to expense on a straight-line
        basis over five years. System development costs not meeting proper criteria
        for
        capitalization are expensed as incurred.
  **Basic
        and Diluted Income (Loss) Per Common Share**
  Basic
        income (loss) per common share is computed by dividing net income (loss)
        by the
        weighted average number of common shares outstanding. Diluted income (loss)
        per
        common share is calculated by dividing net income (loss) by the weighted
        average
        number of common and potential dilutive common shares outstanding. Diluted
        net
        income per common share takes into consideration the assumed exercise of
        outstanding stock options resulting in approximately 248,000, 122,000, and
        zero
        potential dilutive common shares in 2005, 2004 and 2003, respectively. 
Options to purchase approximately 151,000, 310,000 and 714,000 shares of
        common
        stock were outstanding during 2005, 2004 and 2003, respectively, but were
        not
        included in the computation of diluted earnings per share because the effect
        would have been anti-dilutive.
   F-8
 **MILLER
              INDUSTRIES, INC. AND SUBSIDIARIES**
 **NOTES
            TO CONSOLIDATED FINANCIAL STATEMENTS**
  **Goodwill
        and Long-Lived Assets**
  The
        Company accounts for goodwill in accordance with SFAS No. 141 “Business
        Combinations” and SFAS No. 142 “Goodwill and Other Intangible Assets,” and as
        such has ceased amortizing goodwill. In lieu of amortization the Company
        performs an annual impairment review of goodwill.
  In
        accordance with SFAS No. 144, “Accounting for the Impairment of Long-Lived
        Assets”, management evaluates the carrying value of long-lived assets when
        significant adverse changes in economic value of these assets requires an
        analysis, including property and equipment and other intangible assets. Under
        SFAS No. 144, a long-lived asset is considered impaired when its fair value
        is
        less than its carrying value. In that event, a loss is calculated based on
        the
        amount the carrying value exceeds the fair value which is estimated based
        on
        future cash flows.
  **Patents,
        Trademarks, and Other Purchased Product Rights**
  The
        cost
        of acquired patents, trademarks, and other purchased product rights is
        capitalized and amortized using the straight-line method over various periods
        not exceeding 20 years. Total accumulated amortization of these assets was
        $1,434,000, and $1,415,000, for continuing operations at December 31, 2005
        and
        2004, respectively. Amortization expense for continuing operations in 2005,
        2004
        and 2003 was $140,000, $140,000, and $145,000, respectively. Based
        on
        the current amount of intangible assets subject to amortization, the estimated
        amortization expense for 2006 is $113,000,
        at which time intangible assets subject to amortization would be fully
        amortized .
        As
        acquisitions and dispositions of intangible assets occur in the future, the
        amortization amounts may vary.
  **Deferred
        Financing Costs**
  All
        deferred financing costs are included in other assets of continuing operations
        and are amortized using the straight-line method over the terms of the
        respective obligations. Total accumulated amortization of deferred financing
        costs at December 31, 2005 and 2004 was $75,000 and $1,093,000, respectively.
        Amortization expense in 2005, 2004 and 2003, was $340,000, $798,000, and  $4,627,000 ,
        respectively, and is included in interest expense in the accompanying
        consolidated statements of operations. Based on the current amount of deferred
        financing costs subject to amortization, the estimated amortization expense
        for
        the succeeding five years is as follows: 2006 - $121,000; 2007 - $121,000;
        2008 - $68,000; 2009 - $13,000; 2010 - $0.
  **Accrued
        Liabilities and Other**
  Accrued
        liabilities and other consisted of the following for continuing operations
        at
        December 31, 2005 and 2004 (in thousands):
  **2005**
              
              **2004**Accrued
                  wages, commissions, bonuses, and benefits
              
              **$**
              **4,153**
              
              $
              3,317Accrued
                  income taxes
              
              
              **1,407**
              
              
              85Other
              
              
              **4,261**
              
              
              2,334**$**
              **9,821**
              
              $
              5,736
  **Stock-Based
        Compensation**
  The
        Company accounts for its stock-based compensation plans under Accounting
        Principles Board Opinion No. 25, “Accounting for Stock Issued to Employees”. The
        Company has adopted the disclosure option of SFAS No. 123, “Accounting for
        Stock-Based Compensation”. Accordingly, no compensation cost has been recognized
        for stock option grants since the options have exercise prices equal to the
        market value of the common stock at the date of grant.
   F-9
 **MILLER
              INDUSTRIES, INC. AND SUBSIDIARIES**
 **NOTES
            TO CONSOLIDATED FINANCIAL STATEMENTS**
  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 2004: expected dividend
        yield of 0%; expected volatility of 43%; risk-free interest rate of 2.94%;
        and
        expected life of 5.5 years. Using these assumptions, the fair value of options
        granted in 2004 is approximately $1,242,000, which would be amortized as
        compensation expense over the vesting period of the options. No options were
        granted during 2005 or 2003.
  Had
        compensation cost for stock option grants in 2005, 2004 and 2003 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 (loss) and net income (loss) per
        common share would have been adjusted to the pro forma amounts indicated
        below
        (in thousands, except per share data):
  **2005**
              
              **2004**
              
              **2003**Net
                  income (loss) available to common stockholders, as
                  reported
              
              **$**
              **18,586**
              
              $
              5,475
              
              $
              (14,153
              )Deduct:
                  Total stock-based employee compensation expense determined under
                  fair
                  value based method for all awards, net of related tax
                  effects
              
              
              **(347**
              **)**
              
              (262
              )
              
              (265
              )Net
                  income (loss) available to common stockholders, pro forma
              
              **$**
              **18,239**
              
              $
              5,213
              
              $
              (14,418
              )Income
                  (loss) per common share:Basic,
                  as reported
              
              **$**
              **1.66**
              
              $
              0.50
              
              $
              (1.52
              )Basic,
                  pro forma
              
              **$**
              **1.62**
              
              $
              0.48
              
              $
              (1.54
              )Diluted,
                  as reported
              
              **$**
              **1.62**
              
              $
              0.50
              
              $
              (1.52
              )Diluted,
                  pro forma
              
              **$**
              **1.59**
              
              $
              0.48
              
              $
              (1.54
              )
  **Product
        Warranty**
  The
        Company provides a one-year limited product and service warranty on certain
        of
        its products. The Company provides for the estimated cost of this warranty
        at
        the time of sale. Warranty expense for continuing operations in 2005, 2004
        and
        2003, was $1,744,000, $1,520,000, and $1,547,000, respectively.
  The
        table
        below provides a summary of the warranty liability for December 31, 2005
        and
        2004 (in thousands):
  **2005**
              
              **2004**Accrual
                  at beginning of the year
              
              **$**
              **665**
              
              $
              639Provision
              
              
              **1,744**
              
              
              1,520Settlement
              
              
              **(1,608**
              **)**
              
              (1,494
              )Accrual
                  at end of year
              
              **$**
              **801**
              
              $
              665
  **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.  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 or risk of ownership
        has
        transferred to independent distributors or other customers.
   F-10
 **MILLER
              INDUSTRIES, INC. AND SUBSIDIARIES**
 **NOTES
            TO CONSOLIDATED FINANCIAL STATEMENTS**
  **Foreign
        Currency Translation**
  The
        functional currency for the Company’s foreign operations is the applicable local
        currency. The translation from the applicable foreign currencies to U.S.
        dollars
        is performed for balance sheet accounts using current exchange rates in effect
        at the balance sheet date, historical rates for equity and the weighted average
        exchange rate during the period for revenue and expense accounts. The gains
        or
        losses resulting from such translations are included in shareholders’ equity.
        For intercompany debt denominated in a currency other than the functional
        currency, the remeasurement into the functional currency is also included
        in
        shareholders’ equity as the amounts are considered to be of a long-term
        investment nature.
  **Recent
        Accounting Pronouncements**
  In
        November 2004, the Financial Accounting Standards Board (FASB) issued SFAS
        No.
        151 “Inventory Costs - an amendment of ARB No. 43, Chapter 4”. This statement
        clarifies the accounting for abnormal amounts of idle facility expense, freight,
        handling costs and spoilage. This statement also requires the allocation
        of
        fixed production overhead costs be based on normal production capacity. The
        provisions of SFAS No. 151 are effective for inventory costs beginning in
        January 2006. The adoption of this statement will not have a material impact
        on
        the Company’s results of operations or financial position.
  In
        December 2004, the FASB issued SFAS No. 123R, “Share-Based Payment”. This
        statement requires the determination of the fair value of share-based
        compensation at the grant date and the recognition of the related compensation
        expense over the period in which the share-based compensation vests. The
        Company
        previously reported that it would adopt SFAS No. 123R effective July 1, 2005.
        In
        April 2005, the Securities and Exchange Commission deferred the required
        adoption date of SFAS No. 123R to the beginning of the first quarter of 2006,
        at
        which time the Company will adopt this statement. The Company will transition
        the new guidance using the modified prospective method. Applying the same
        assumptions used for the 2005 and 2004 pro forma disclosure in Note 2, the
        Company estimates its pretax expense associated with previous stock option
        grants to be approximately $308,000 in each of 2006 and 2007, and $77,000
        in
        2008.
  In
        December 2004, the FASB issued FASB Staff Position No. 109-1, “Application of
        FASB Statement No. 109 (SFAS No. 109), Accounting for Income Taxes, to the
        Tax
        Deduction on Qualified Production Activities Provided by the American Jobs
        Creation Act of 2004” (FSP 109-1). FSP 109-1 clarifies that the manufacturer’s
        deduction provided for under the American Jobs Creation Act of 2004 (AJCA)
        should be accounted for as a special deduction in accordance with SFAS No.
        109
        and not as a tax rate reduction. As the Company is currently utilizing net
        operating loss carryover to reduce taxable income, no benefit for the domestic
        manufacturing deduction has been provided in the financial
        statements.
  Effective
        July 1, 2005, the Company adopted SFAS No. 153, “Exchanges of Nonmonetary
        Assets-an amendment of APB Opinion No. 29”. SFAS No. 153 addresses the
        measurement of exchanges of nonmonetary assets. It eliminates the exception
        from
        fair value measurement for nonmonetary exchanges of similar productive assets
        in
        paragraph 21(b) of APB Opinion No. 29 “Accounting for Nonmonetary Transactions”
and replaces it with an exception for exchanges that do not have commercial
        substance. A nonmonetary exchange has commercial substance if the future
        cash
        flows of the entity are expected to change significantly as a result of the
        exchange. The adoption of SFAS No. 153 did not have a material impact on
        the
        Company’s financial statements.
  In
        May
        2005, the FASB issued SFAS No. 154. “Accounting Changes and Error Corrections”
(“SFAS No. 154”), which replaces Accounting Principles Board (“APB”) No. 20
“Accounting Changes”, and SFAS No. 3. “Reporting Accounting Changes in Interim
        Financial Statements”. SFAS No. 154 changes the requirements for the accounting
        for and reporting of a change in accounting principle. The statement applies
        to
        all voluntary changes in accounting principle as well as changes required
        by an
        accounting pronouncement. SFAS No. 154 requires retrospective application
        to
        prior periods’ financial statements of a voluntary change in accounting
        principle unless it is impracticable to determine the period-specific effects
        or
        the cumulative effect of the change. The statement is effective for accounting
        changes and correction of errors made after January 1, 2006.
   F-11
 **MILLER
              INDUSTRIES, INC. AND SUBSIDIARIES**
 **NOTES
            TO CONSOLIDATED FINANCIAL STATEMENTS**
  **Reclassifications**
  Certain
        prior year amounts have been reclassified to conform to current year
        presentation, with no impact on previously reported shareholders’ equity or net
        income (loss).
  **3.**
              **SPECIAL
                  CHARGES**
  The
        Company periodically reviews the carrying amount of long-lived assets and
        goodwill in both its towing services and towing equipment segments to determine
        if those assets may be recoverable based upon the future operating cash flows
        expected to be generated by those assets. As a result of prior year’s review,
        the
        Company concluded that the carrying value of such assets of certain towing
        services businesses and certain assets within the Company’s towing and recovery
        equipment segment were not fully recoverable.
  Charges
        totaling $4,905,000 were recorded in 2003 to write-down the carrying value
        of
        certain long-lived assets (primarily goodwill, property and equipment) to
        estimated recoverable or fair value. These charges are a component of the
        loss
        from discontinued operations. The Company determined recoverable or fair
        value
        for these assets on a location by location basis taking into consideration
        various factors affecting the valuation in each location.
  Management
        believes its long-lived assets are appropriately valued in the accompanying
        consolidated balance sheets.
  **4.**
              **LONG-TERM
                  OBLIGATIONS**
  **Long-Term
        Obligations**
  Long-term
        obligations consisted of the following for continuing operations at December
        31,
        2005 and 2004 (in thousands):
  **2005**
              
              **2004**Outstanding
                  borrowings under new Senior Credit Facility
              
              **$**
              **6,300**
              
              $
              -Outstanding
                  borrowings under former Senior Credit Facility
              
              
              **-**
              
              
              19,987Outstanding
                  borrowings under Junior Credit Facility
              
              
              **10,000**
              
              
              4,211Mortgage
                  notes payable, weighted average interest rate of 7.25%, payable
                  in monthly
                  installments, maturing in 2009
              
              
              **1,901**
              
              
              1,991Equipment
                  notes payable, weighted average interest rate of 6.74%, payable
                  in monthly
                  installments, maturing 2006 to 2009
              
              
              **187**
              
              
              133Other
                  notes payable, weighted average interest rate of 6.38%, payable
                  in monthly
                  installments, maturing in 2006
              
              
              **10**
              
              
              75**18,398**
              
              
              26,397Less
                  current portion
              
              
              **(1,595**
              **)**
              
              (2,052
              )**$**
              **16,803**
              
              $
              24,345
  The
        2004
        figures do not include $2.9 million outstanding under the former Senior Credit
        Facility relating to discontinued operations. Obligations under the former
        Senior Credit Facility are allocated to discontinued operations based on
        the
        assets used to determine borrowing availability for collateral reporting.
        Certain equipment and manufacturing facilities are pledged as collateral
        under
        the mortgage and equipment notes payable.
   F-12
 **MILLER
              INDUSTRIES, INC. AND SUBSIDIARIES**
 **NOTES
            TO CONSOLIDATED FINANCIAL STATEMENTS**
  **Credit
        Facilities**
  *New
        Senior Credit Facility* .
        On June
        17, 2005, the Company entered into a Credit Agreement (the “New Senior Credit
        Agreement”) with Wachovia Bank, National Association, for a $27.0 million senior
        secured credit facility (the “New Senior Credit Facility”). Proceeds from the
        New Senior Credit Facility were used to repay The CIT Group/Business Credit,
        Inc. (“CIT”) and William G. Miller, the Company’s Chairman of the Board and
        Co-Chief Executive Officer, under the Company’s former senior credit facility.
        As a result, effective June 17, 2005, the Company’s former senior credit
        facility was satisfied and terminated, and Mr. Miller no longer holds any
        of the
        Company’s senior debt.
  The
        New
        Senior Credit Facility consists of a $20.0 million revolving credit facility
        (the “Revolver”), and a $7.0 million term loan (the “Term Loan”). In the absence
        of a default, all borrowings under the Revolver bear interest at the LIBOR
        Market Index Rate (as defined in the New Senior Credit Agreement) plus a
        margin
        of between 1.75% to 2.50% per annum that is subject to adjustment from time
        to
        time based upon the Consolidated Leverage Ratio (as defined in the New Senior
        Credit Agreement), and the Term Loan bears interest at a 30-day adjusted
        LIBOR
        rate plus a margin of between 1.75% to 2.50% per annum that is subject to
        adjustment from time to time based upon the Consolidated Leverage Ratio.
        The
        Revolver expires on June 15, 2008, and the Term Loan matures on June 15,
        2010.
        The New Senior Credit Facility is secured by substantially all of the Company’s
        assets, and contains customary representations and warranties, events of
        default
        and affirmative and negative covenants for secured facilities of this
        type.
  *Junior
        Credit Facility* .
        The
        Company’s junior credit facility (the “Junior Credit Facility”) is, by its
        terms, expressly subordinated only to the New Senior Credit Facility, and
        is
        secured by a second priority lien and security interest in substantially
        all of
        the Company’s other assets. The Junior Credit Facility contains requirements for
        the maintenance of certain financial covenants, and also imposes restrictions
        on
        capital expenditures, incurrence of indebtedness, mergers and acquisitions,
        distributions and transfers and sales of assets. As described in further
        detail
        below and in Note 5, the Junior Credit Facility has been amended several
        times,
        most recently on June 17, 2005.
  During
        the second half of 2003, Contrarian Funds, LLC (“Contrarian”) purchased all of
        the outstanding debt of the Junior Credit Facility in a series of transactions.
        As part of its purchase, Contrarian also purchased warrants for shares of
        the
        Company’s common stock, which were subsequently exchanged for shares of the
        Company’s common stock. In November 2003, Harbourside Investments, LLLP
        (“Harbourside”) purchased 44.286% of the subordinated debt and warrants from
        Contrarian. In February 2004, Contrarian and Harbourside converted approximately
        $7.0 million in debt under the Junior Credit Facility into common stock of
        the
        Company. In May 2004, the Company completed the sale of 480,000 shares of
        its
        common stock at a price of $9.00 per share to a small group of unaffiliated
        private investors, and the proceeds of this sale, together with additional
        borrowings under the Company’s former senior credit facility, were used to
        retire the portion of the Junior Credit Facility owed to Contrarian
        (approximately $5.4 million of principal and approximately $350,000 of accrued
        interest). On May 31, 2005, Harbourside was dissolved and distributed all
        of its
        shares of the Company’s common stock to its partners. As a result, William G.
        Miller, as successor lender agent to Harbourside, became the sole lender
        under
        the Junior Credit Facility.
  The
        June
        17, 2005 amendment to the Junior Credit Facility provided for a new term
        loan,
        made by Mr. Miller as sole lender and successor lender agent, in the principal
        amount of approximately $5.7 million. As a result, on June 17, 2005, the
        total
        outstanding principal amount of term loans under the Junior Credit Facility
        was
        $10.0 million. The amendment also extended the maturity date of the Junior
        Credit Facility to September 17, 2008, and amended certain terms of the junior
        credit agreement to, among other things, make certain of the representations
        and
        warranties, covenants and events of default more consistent with the
        representations and warranties, covenants and events of default in the Senior
        Credit Agreement. In the absence of a default, all of the term loans outstanding
        under the Junior Credit Facility continue to bear interest at a rate of 9.0%
        per
        annum.
  *Former
        Senior Credit Facility* .
        As
        amended, the Company’s former senior credit facility with CIT and Mr. Miller
        consisted of an aggregate $32.0 million credit facility, including a $15.0
        million revolving loan, a $5.0 million term loan and a $12.0 million term
        loan.
        The revolving credit facility provided for separate and distinct loan commitment
        levels for the Company’s towing and recovery equipment segment and RoadOne
        towing services segment, respectively. Borrowing availability under the
        revolving portion of the former senior credit facility was based on a percentage
        of eligible inventory and accounts receivable (determined on eligibility
        criteria set forth in the credit facility), subject to a maximum borrowing
        limitation. Borrowings under the term loans were collateralized by substantially
        all of the Company’s domestic property, plants, and equipment. The former senior
        credit facility bore interest at the prime rate (as defined) plus 2.75%,
        subject
        to the rights of the senior lender agent or a majority of the
   F-13
 **MILLER
              INDUSTRIES, INC. AND SUBSIDIARIES**
 **NOTES
            TO CONSOLIDATED FINANCIAL STATEMENTS**
  lenders
        to charge a default rate equal to the prime rate (as defined) plus 4.75%
        during
        the continuance of any event of default thereunder. The former senior credit
        facility contained requirements relating to maintaining minimum excess
        availability at all times and minimum monthly levels of earnings before income
        taxes and depreciation and amortization (as defined) based on the most recently
        ended trailing three month period. In addition, the former senior credit
        facility contained restrictions on capital expenditures, incurrence of
        indebtedness, mergers and acquisitions, distributions and transfers and sales
        of
        assets. The former senior credit facility also contained requirements related
        to
        weekly and monthly collateral reporting.
  *Interest
        Rate Sensitivity* .
        Because
        of the amount of obligations outstanding under the New Senior Credit Facility
        and the connection of the interest rate under the New Senior Credit Facility
        (including the default rates) to the LIBOR rate, an increase in the LIBOR
        rate
        could have a significant effect on the Company’s ability to satisfy its
        obligations under the New Senior Credit Facility and increase its interest
        expense significantly. Therefore, the Company’s liquidity and access to capital
        resources could be further affected by increasing interest rates.
  Future
        maturities of long-term obligations (with no outstanding amounts related
        to
        discontinued operations) at December 31, 2005 are as follows (in
        thousands):
  2006
              
              $
              1,5952007
              
              
              1,5322008
              
              
              11,5002009
              
              
              3,0702010
              
              
              701$
              18,398
  **5.**
              **RELATED
                  PARTY TRANSACTIONS**
  **Subordinated
        Debt and Warrant Conversion**
  Harbourside
        Investments, LLLP was a limited liability limited partnership of which several
        of the Company’s executive officers and directors were partners. Specifically,
        William G. Miller was the general partner of, and controlled, Harbourside.
        Mr.
        Miller is the Company’s Chairman of the Board and Co-Chief Executive Officer, as
        well as the holder of approximately 14.5% of the Company’s outstanding common
        stock. Mr. Miller, Jeffrey I. Badgley, the Company’s President and Co-Chief
        Executive Officer, J. Vincent Mish, the Company’s Executive Vice President and
        Chief Financial Officer, and Frank Madonia, the Company’s Executive Vice
        President, Secretary and General Counsel, were all limited partners in
        Harbourside. In connection with the formation of Harbourside, Mr. Miller
        made
        loans to the other executive officers, the proceeds of which the other executive
        officers then contributed to Harbourside. These loans from Mr. Miller to
        the
        other executive officers were secured by pledges of their respective limited
        partnership interests to Mr. Miller.
  On
        November 24, 2003, Harbourside purchased from Contrarian 44.286% of (i) the
        Company’s subordinated debt under its Junior Credit Facility and (ii) warrants
        to purchase 186,028 shares of the Company’s common stock held by Contrarian.
        Contrarian had previously purchased all of the Company’s outstanding
        subordinated debt in a series of transactions during the second half of 2003.
        As
        a result of this transaction, Harbourside acquired (x) approximately $6.1
        million of the outstanding principal of subordinated debt plus accrued interest
        and fees attributable to this outstanding principal and (y) warrants to purchase
        an aggregate of 82,382 shares of the Company’s common stock, consisting of
        warrants to purchase up to 20,998 shares at an exercise price of $3.48 and
        61,384 shares at an exercise price of $3.27. Contrarian retained the remaining
        principal outstanding under the Junior Credit Facility, which was approximately
        $7.7 million, plus related interest and fees thereon of approximately $1.7
        million, and the remaining warrants to purchase 103,646 shares of common
        stock.
  On
        January 14, 2004, the Company entered into an exchange agreement with
        Harbourside (the “Exchange Agreement”). Under the Exchange Agreement,
        Harbourside converted approximately $3.2 million of the Company’s subordinated
        debt (30% of the total $6.1 million principal amount then held by Harbourside,
        plus approximately $1.3 million of accrued interest and fees thereon) into
        548,738 shares of the Company’s common stock, exchanged warrants to purchase
        82,382 shares of the Company’s common stock for 34,818 shares of the Company’s
        common stock, and retained the remaining 70% of the outstanding principal
        amount
        of the subordinated debt that it held under the Junior Credit
        Facility.
  F-14
 **MILLER
              INDUSTRIES, INC. AND SUBSIDIARIES**
 **NOTES
            TO CONSOLIDATED FINANCIAL STATEMENTS**
   As
        partners of Harbourside, under the Exchange Agreement, each of Messrs. Miller,
        Badgley, Mish and Madonia indirectly received shares of common stock in exchange
        for the subordinated debt and warrants held by Harbourside, and as the general
        partner of Harbourside, Mr. Miller had sole voting power over the shares
        of
        common stock that Harbourside received in the exchange. This transaction
        was
        approved by a special committee of the Company’s Board of Directors, as well as
        the full Board of Directors with Messrs. Miller and Badgley abstaining due
        to
        their personal interest in the transaction. The transaction was subsequently
        approved by the Company’s shareholders at a meeting on February 12,
        2004.
  On
        May
        31, 2005, Harbourside was dissolved, and it distributed all of its shares
        of the
        Company’s common stock to its partners. As partners of Harbourside, in the
        distribution Messrs. Miller and Badgley each received 109,899 shares of the
        Company’s common stock, Messrs. Mish and Madonia each received 21,980 shares of
        the Company’s common stock, and Mr. Miller, as successor lender agent to
        Harbourside, became the sole lender under the Junior Credit
        Facility.
  Other
        than the transactions under the Exchange Agreement, the Company did not engage
        in any transactions with Harbourside. The Company paid Harbourside approximately
        $211,000 and $274,000 in interest expense on the subordinated holdings during
        2005 and 2004, respectively.
  Other
        than the transactions relating to the subordinated debt and the warrants,
        which
        it purchased without the Company’s involvement, Contrarian has no relationship
        with the Company or Harbourside.
  **Credit
        Facilities**
  *Former
        Senior Credit Facility* .
        Simultaneously with entering into a forbearance agreement on October 31,
        2003
        with respect to the Company’s former senior credit facility, Mr. Miller made a
        $2.0 million loan to the Company as a part of the former senior credit facility.
        The loan to the Company and Mr. Miller’s participation in the former senior
        credit facility were effected by an amendment to the credit agreement and
        a
        participation agreement between Mr. Miller and the former senior credit facility
        lenders.
  On
        December 24, 2003, Mr. Miller increased his $2.0 million participation in
        the
        former senior credit facility by an additional $10.0 million. These funds,
        along
        with additional funds from CIT, were used to satisfy the Company’s obligations
        to two of the existing senior lenders with the result being that CIT, an
        existing senior lender, and Mr. Miller constituted the senior lenders to
        the
        Company, with CIT holding 62.5% of such loan and Mr. Miller participating
        in
        37.5% of the loan. Mr. Miller’s portion of the loan was subordinated to that of
        CIT. The Company paid Mr. Miller approximately $664,000 and $949,000 in interest
        expense related to his portion of the former senior credit facility during
        2005
        and 2004, respectively.
  In
        conjunction with Mr. Miller’s increased participation, the former senior credit
        facility was restructured and restated as a $15.0 million revolving facility
        and
        $12.0 million and $5.0 million term loans. The senior lending group, consisting
        of CIT and Mr. Miller, earned fees of $850,000 in connection with the
        restructuring, including previously unpaid fees of $300,000 for the earlier
        forbearance agreement through December 31, 2003 and $550,000 for the
        restructuring of the loans described above. Of these fees, 37.5% ($318,750)
        were
        paid to Mr. Miller and the remainder ($531,250) were paid to CIT. In addition,
        the Company agreed to pay additional interest at a rate of 1.8% on Mr. Miller’s
        portion of the loan, which was in recognition of the fact that Mr. Miller’s
        rights to payments and collateral were subordinate to those of CIT. This
        transaction was approved by a special committee of the Company’s Board of
        Directors, as well as the full Board of Directors with Mr. Miller abstaining
        due
        to his personal interest in the transaction.
  *New
        Senior Credit Facility* .
        On June
        17, 2005, the Company entered into the Senior Credit Agreement with Wachovia
        Bank, National Association, for the New Senior Credit Facility (as described
        in
        Note 4). Proceeds from the New Senior Credit Facility were used to repay
        CIT and
        Mr. Miller under the Company’s former senior credit facility, with CIT receiving
        $14.1 million and Mr. Miller receiving $12.0 million. As a result, effective
        June 17, 2005, the Company’s former senior credit facility was satisfied and
        terminated, and Mr. Miller no longer holds any of the Company’s senior debt.
        This transaction was approved by the Audit Committee of the Company’s Board of
        Directors, as well as the full Board of Directors with Mr. Miller abstaining
        due
        to his personal interest in the transaction.
  F-15
 **MILLER
              INDUSTRIES, INC. AND SUBSIDIARIES**
 **NOTES
            TO CONSOLIDATED FINANCIAL STATEMENTS**
   *Amendments
        to Junior Credit Facility* .
        On May
        31, 2005, Harbourside was dissolved, and it distributed all of its shares
        of the
        Company’s common stock to its partners. In connection therewith, Mr. Miller, as
        successor lender agent to Harbourside, became the sole lender under the Junior
        Credit Facility. On June 17, 2005, the Company and Mr. Miller amended the
        Junior
        Credit Facility to provide for a new term loan, made by Mr. Miller as sole
        lender and successor lender agent, in the principal amount of approximately
        $5.7
        million. As a result, on June 17, 2005, the total outstanding principal amount
        of term loans under the Junior Credit Facility was $10.0 million. This
        transaction was approved by the Audit Committee of the Company’s Board of
        Directors, as well as the full Board of Directors with Mr. Miller abstaining
        due
        to his personal interest in the transaction. The Company paid Mr. Miller
        approximately $415,000 in interest on the new junior debt for 2005.
        Additionally, approximately $77,000 is included in accrued liabilities for
        unpaid interest on the Junior Credit Facility at December 31, 2005.
  **DataPath,
        Inc.**
  In
        October 2004, the Company began a project with DataPath, Inc (“DataPath”), a
        provider of satellite communications, to assist in the design and engineering
        of
        mobile communication trailers for military application. DataPath is a company
        in
        which Mr. Miller and one the Company’s directors hold a minority interest and on
        whose board they also serve. In May 2005, the Company entered into a new
        agreement with DataPath calling for the Company to manufacture and sell to
        them
        all of their requirements for this type of equipment during the five-year
        term
        of the agreement. Total revenue to the Company from these transactions was
        $23,727,000 and $861,000, for 2005 and 2004, respectively. At December 31,
        2005
        and 2004, approximately $2,311,000 and $542,000, respectively, are included
        in
        accounts receivable for amounts due from DataPath.
  **6.**
              **STOCK-BASED
                  COMPENSATION PLANS**
  In
        accordance with the Company’s stock-based compensation plans, the Company may
        grant incentive stock options as well as non-qualified and other stock-related
        incentives to officers, employees, and non-employee directors of the Company.
        Options vest ratably over a two to four-year period beginning on the grant
        date
        and expire ten years from the date of grant. Shares available for granting
        options at December 31, 2005, 2004 and 2003 were approximately 0.9 million,
        0.6
        million, and 0.5 million, respectively.
  A
        summary
        of the activity of stock options for the years ended December 31, 2005, 2004
        and
        2003, is presented below (shares in thousands):
  **2005**
              
              **2004**
              
              **2003****Shares
                  Under**
                **Option**
              
              **Weighted**
                **Average**
                **Exercise
                  Price**
              
              **Shares
                  Under**
                **Option**
              
              **Weighted**
                **Average**
                **Exercise
                  Price**
              
              **Shares
                  Under**
                **Option**
              
              **Weighted**
                **Average**
                **Exercise
                  Price**Outstanding
                  at Beginning of Period
              
              
              **805**
              
              **$**
              **15.46**
              
              
              745
              
              $
              19.90
              
              
              761
              
              $
              19.58Granted
              
              
              **-**
              
              
              **-**
              
              
              340
              
              
              8.31
              
              
              -
              
              
              -Exercised
              
              
              **(108**
              **)**
              
              **6.67**
              
              
              (9
              )
              
              3.15
              
              
              (1
              )
              
              3.05Forfeited
                  and cancelled
              
              
              **(123**
              **)**
              
              **20.96**
              
              
              (271
              )
              
              17.99
              
              
              (15
              )
              
              5.02Outstanding
                  at End of Period
              
              
              **574**
              
              **$**
              **15.92**
              
              
              805
              
              $
              15.46
              
              
              745
              
              $
              19.90Options
                  exercisable at year end
              
              
              **321**
              
              **$**
              **21.90**
              
              
              455
              
              $
              21.12
              
              
              714
              
              $
              20.64Weighted
                  average fair value of options granted
              
              
              
              
              **$**
              **-**
              
              
              
              
              $
              3.65
              
              
              
              
              $
              -
  
   F-16
 **MILLER
              INDUSTRIES, INC. AND SUBSIDIARIES**
 **NOTES
            TO CONSOLIDATED FINANCIAL STATEMENTS**
   A
        summary
        of options outstanding under the Company’s stock-based compensation plans at
        December 31, 2005 is presented below (shares in thousands):
  **Exercise
                    Price Range**
                
                
                **Shares**
                  **Under**
                  **Option**
                
                
                **Weighted****Average**
                  **Exercise****Price
                    of**
                  **Options****Outstanding**
                
                
                **Weighted**
                  **Average**
                  **Remaining****Life**
                
                
                **Options**
                  **Exercisable**
                
                
                **Weighted****Average**
                  **Exercise****Price
                    of**
                  **Shares****Exercisable**$
                3.05
                -
                $
                3.37
                
                
                50
                
                $
                3.17
                
                
                6.0
                
                
                50
                
                $
                3.174.60
                -
                
                5.63
                
                
                25
                
                
                4.62
                
                
                5.5
                
                
                25
                
                
                4.627.01
                -
                
                8.31
                
                
                330
                
                
                8.22
                
                
                8.0
                
                
                77
                
                
                7.9410.62
                -
                
                10.94
                
                
                18
                
                
                10.94
                
                
                3.8
                
                
                18
                
                
                10.9420.62
                -
                
                22.50
                
                
                43
                
                
                20.64
                
                
                2.7
                
                
                43
                
                
                20.6428.74
                -
                
                38.20
                
                
                54
                
                
                34.47
                
                
                1.7
                
                
                54
                
                
                34.4743.96
                -
                
                63.55
                
                
                38
                
                
                53.17
                
                
                .7
                
                
                38
                
                
                53.1770.00
                -
                
                78.75
                
                
                16
                
                
                73.45
                
                
                1.5
                
                
                16
                
                
                73.34Total
                
                
                574
                
                $
                15.92
                
                
                5.9
                
                
                321
                
                $
                21.90
  **7.**
              **COMMITMENTS
                  AND CONTINGENCIES**
  *Commitments*
  The
        Company has entered into various operating leases for buildings, office
        equipment, and trucks. Rental expense under these leases for continuing
        operations was $1,308,000, $850,000, and $1,928,000 in 2005, 2004 and 2003,
        respectively. Rental expense under these leases for discontinued operations
        was
        $221,000, $551,000, and $2,011,000 in 2005, 2004 and 2003,
        respectively.
  At
        December 31, 2005, future minimum lease payments under non-cancelable operating
        leases for the next five years and in the aggregate are as follows (in
        thousands):
  **Continuing**
                **Operations**
              
              **Discontinued**
                **Operations**
              
              **Total**2006
              
              $
              827
              
              $
              81
              
              $
              9082007
              
              
              541
              
              
              -
              
              
              5412008
              
              
              239
              
              
              -
              
              
              2392009
              
              
              99
              
              
              -
              
              
              992010
              
              
              73
              
              
              -
              
              
              73Thereafter
              
              
              21
              
              
              -
              
              
              21$
              1,800
              
              $
              81
              
              $
              1,881
  The
        Company has also entered into arrangements with third-party lenders where
        it has
        agreed, in the event of a default by the customer, to repurchase from the
        third-party lender Company products repossessed from the customer. These
        arrangements are typically subject to a maximum repurchase amount. The Company’s
        risk under these arrangements is mitigated by the value of the products
        repurchased as part of the transaction. The maximum amount of collateral
        the
        Company could be required to purchase was approximately $18.4 million and
        $13.5
        million at December 31, 2005 and 2004, respectively.
  *Contingencies*
  The
        Company is, from time to time, a party to litigation arising in the normal
        course of its business. Litigation is subject to various inherent uncertainties,
        and it is possible that some of these matters could be resolved unfavorably
        to
        the Company, which could result in substantial damages against the Company.
        The
        Company has established accruals for matters that are probable and reasonably
        estimable and maintains product liability and other insurance that management
        believes to be adequate. Management believes that any liability that may
        ultimately result from the resolution of these matters in excess of available
        insurance coverage and accruals will not have a material adverse effect on
        the
        consolidated financial position or results of operations of the
        Company.
    F-17
 **MILLER
              INDUSTRIES, INC. AND SUBSIDIARIES**
 **NOTES
            TO CONSOLIDATED FINANCIAL STATEMENTS**
  **8.**
              **INCOME
                  TAXES**
  Deferred
        tax assets and liabilities are determined based on the differences between
        the
        financial and tax basis of existing assets and liabilities using the currently
        enacted tax rates in effect for the year in which the differences are expected
        to reverse.
  The
        provision for income taxes on income from continuing operations consisted
        of the
        following in 2005, 2004 and 2003, (in thousands):
  **2005**
              
              **2004**
              
              **2003**Current:Federal
              
              **$**
              **423**
              
              $
              -
              
              $
              839State
              
              
              **1,647**
              
              
              317
              
              
              246Foreign
              
              
              **866**
              
              
              423
              
              
              131**2,936**
              
              
              740
              
              
              1,216Deferred:Federal
              
              
              **-**
              
              
              -
              
              
              (290
              )State
              
              
              **-**
              
              
              -
              
              
              288Foreign
              
              
              **-**
              
              
              -
              
              
              2****
              
              
              -
              
              
              -
              
              
              **-****$**
              **2,936**
              
              $
              740
              
              $
              1,216
  The
        principal differences between the federal statutory tax rate and the income
        tax
        expense from continuing operations in 2005, 2004 and 2003:
  **2005**
              
              **2004**
              
              **2003**Federal
                  statutory tax rate
              **34.0%**
              
              34.0%
              
              34.0%State
                  taxes, net of federal tax benefit
              **7.6%**
              
              4.0%
              
              4.0%Change
                  in deferred tax asset valuation allowance
              **(30.6%)**
              
              (34.0%)
              
              0.0%Excess
                  of foreign tax over US tax on foreign income
              **0.6%**
              
              4.9%
              
              0.0%Other
              **2.0%**
              
              0.7%
              
              (1.0%)Effective
                  tax rate
              **13.6%**
              
              9.6%
              
              37.0%
  Deferred
        income tax assets and liabilities reflect the impact of temporary differences
        between the amounts of assets and liabilities for financial reporting and
        income
        tax reporting purposes. Temporary differences and carry forwards which give
        rise
        to deferred tax assets and liabilities at December 31, 2005 and 2004 are
        as
        follows (in thousands):
  **2005**
              
              **2004**Deferred
                  tax assets:Allowance
                  for doubtful accounts
              
              **$**
              **51**
              
              $
              423Accruals
                  and reserves
              
              
              **2,160**
              
              
              1,496Federal
                  net operating loss carryforward
              
              
              **5,484**
              
              
              14,146Deductible
                  goodwill and impairment charges
              
              
              **58**
              
              
              (18
              )Other
              
              
              **628**
              
              
              -Total
                  deferred tax assets
              
              
              **8,381**
              
              
              16,047Less
                  valuation allowance
              
              
              **(7,638**
              **)**
              
              (14,834
              )Net
                  deferred tax asset
              
              
              **743**
              
              
              1,213Deferred
                  tax liabilities:Property,
                  plant, and equipment
              
              
              **743**
              
              
              1,213Total
                  deferred tax liabilities
              
              
              **743**
              
              
              1,213Net
                  deferred tax asset
              
              **$**
              **-**
              
              $
              -
  
   F-18
 **MILLER
              INDUSTRIES, INC. AND SUBSIDIARIES**
 **NOTES
            TO CONSOLIDATED FINANCIAL STATEMENTS**
   Included
        in the Company’s noncurrent assets of discontinued operations at December 31,
        2005 and 2004, is a net noncurrent deferred tax asset of $1.2 million and
        $1.4
        million, respectively, relating primarily to tax deductible goodwill and
        reserves that are not deductible for tax purposes until paid. The discontinued
        operations of the Company had no noncurrent deferred tax liabilities at December
        31, 2005 and 2004. The net deferred tax assets of the discontinued operations
        of
        $1.2 and $1.4 million have a full valuation allowance.
  As
        of
        December 31, 2005, the Company had federal net operating loss carryforwards
        of
        approximately $16.1 million which will expire between 2020 and 2025. While
        the
        majority of these loss carryforwards are associated with the Company’s
        discontinued operations, the Company has classified the related deferred
        tax
        asset and valuation allowance as a component of continuing operations since
        it
        believes it will be able to retain these tax attributes. In addition, the
        Company had charitable contributions of $0.3 million that may be carried
        forward, and an AMT credit carryforward of approximately $0.6 million, that
        may
        be carried forward indefinitely.
  The
        valuation allowance reflects the Company’s recognition that cumulative losses in
        recent years indicate that it is unclear whether certain future tax benefits
        will be realized as a result of future taxable income. At December 31, 2005
        and
        2004, the Company recorded a full valuation allowance against its net deferred
        tax asset from continuing and discontinuing operations totaling approximately
        $8.8 million and $16.2 million, respectively.
  As
        of
        December 31, 2005, the Company has state net operating loss carryforwards
        of
        approximately $91.0 million. As the Company believes that realization of
        the
        benefit of these state losses is remote because the Company no longer has
        operations in many of these states, it has not recorded deferred tax assets
        associated with these losses.
  **9.**
              **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.
  **10.**
              **EMPLOYEE
                  BENEFIT PLANS**
  During
        1996, the Company established a contributory retirement plan for all full-time
        employees with at least 90 days of service. Effective January 1, 1999, the
        Company split the plan into two identical plans by operating segment. As
        a
        result of the Company’s decision to dispose of its towing services operations
        the two separate plans were combined to form a consolidated plan effective
        January 1, 2003. The plan is 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.
  The
        plan
        provides 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 the first five years of employment. Company
        contributions to the plans were not significant in 2005, 2004 and
        2003.
  **11.**
              **GEOGRAPHIC
                  AND CUSTOMER INFORMATION**
  Net
        sales
        and long-lived assets (property, plant and equipment and goodwill and intangible
        assets) by region was as follows (revenue is attributed to regions based
        on the
        locations of customers) (in thousands):
  **2005**
              
              **2004**
              
              **2003****Net
                  Sales**
              
              **Long-Lived
                  Assets**
              
              **Net
                  Sales**
              
              **Long-Lived
                  Assets**
              
              **Net
                  Sales**
              
              **Long-Lived
                  Assets**North
                  America
              
              **$**
              **283,226**
              
              **$**
              **26,665**
              
              $
              196,902
              
              $
              28,026
              
              $
              171,627
              
              $
              30,086Foreign
              
              
              **68,658**
              
              
              **2,509**
              
              
              39,406
              
              
              2,607
              
              
              34,369
              
              
              2,902**$**
              **351,884**
              
              **$**
              **29,174**
              
              $
              236,308
              
              $
              30,633
              
              $
              205,996
              
              $
              32,988
  No
        single
        customer accounted for 10% or more of consolidated net sales in 2005, 2004
        or
        2003.
   F-19
 **MILLER
              INDUSTRIES, INC. AND SUBSIDIARIES**
 **NOTES
            TO CONSOLIDATED FINANCIAL STATEMENTS**
  **12.**
              **DISCONTINUED
                  OPERATIONS**
  During
        the fourth quarter of the year ended December 31, 2002, the Company’s management
        and board of directors made the decision to divest of its remaining towing
        services segment, as well as the operations of the distribution group of
        the
        towing and recovery equipment segment.
  During
        the year ended December 31, 2003, the Company disposed of substantially all
        of
        the assets of 16 towing service businesses, as well as assets of other
        businesses in its towing services segment. Total proceeds from the sales
        were
        $6.8 million which included $6.6 million in cash and $0.2 million in notes
        receivable. Losses on the sales of discontinued operations were $3.8 million.
        Only miscellaneous assets from previously sold businesses remained at December
        31, 2005.
  During
        the year ended December 31, 2003, the Company sold one distributor location
        with
        total proceeds of approximately $1.9 million in cash and $0.8 million
        subordinated notes receivable. The Company sold seven distributor locations
        during the year ended December 31, 2004. Total proceeds from these sales
        were
        $3.3 million in cash and $0.9 million in notes receivable. In December 2005,
        the
        Company sold its remaining distributor location with total proceeds of
        approximately $1.9 million, which included $1.3 million in cash and $0.6
        million
        in notes receivable.
  In
        accordance with SFAS No. 144, “Accounting for the Impairment or Disposal of
        Long-Lived Assets”, the assets for the towing services segment and the
        distribution group are considered a “disposal group” and are no longer being
        depreciated. All assets and liabilities and results of operations associated
        with these assets have been separately presented in the accompanying financial
        statements at December 31, 2005, 2004, and 2003. The statements of operations
        and related financial statement disclosures for all prior periods have been
        restated to present the towing services and distribution group as discontinued
        operations separate from continuing operations. Results of operations for
        the
        towing services segment and the distribution group reflect interest expense
        for
        debt directly attributing to these businesses, as well as an allocation of
        corporate debt.
  The
        results of operations and loss on disposal associated with certain towing
        services businesses, which were sold in June 2003, have been reclassified
        from
        discontinued operations to continuing operations given the Company’s continuing
        involvement in the operations of the disposal components via a consulting
        agreement, and the Company’s ongoing interest in the cash flows of the
        operations of the disposal components via a long-term license agreement that
        was
        finalized at the time of the sale. The Company applied this change retroactively
        by adjusting the Consolidated Statement of Operations and the Consolidated
        Statements of Cash Flows.
  In
        October 2005, the Company’s subsidiary, RoadOne, Inc., filed for liquidation
        under Chapter 7 of the federal bankruptcy laws in the Bankruptcy Court of
        the
        Eastern District of Tennessee and a trustee was appointed. At this time,
        management is not able to predict whether or not any liabilities of discontinued
        operations currently reflected in the consolidated financial statements will
        be
        eliminated.
  The
        operating results for the discontinued operations of the towing services
        segment
        and the distributor group for the years ended December 31, 2005, 2004 and
        2003
        were as follows (in thousands):
  **2005**
              
              **2004**
              
              **2003****Dist.**
              
              **Towing**
              
              **Total**
              
              **Dist.**
              
              **Towing**
              
              **Total**
              
              **Dist.**
              
              **Towing**
              
              **Total**Net
                  Sales
              
              **$**
              **11,460**
              
              **$**
              **-**
              
              **$**
              **11,460**
              
              $
              37,810
              
              $
              -
              
              $
              37,810
              
              $
              68,724
              
              $
              8,356
              
              $
              77,080Operating
                  income (loss)
              
              
              **(134**
              **)**
              
              **16**
              
              
              **(118**
              **)**
              
              (659
              )
              
              (111
              )
              
              (770
              )
              
              (371
              )
              
              (2,764
              )
              
              (3,135
              )Net
                  loss before taxes
              
              
              **(114**
              **)**
              
              **-**
              
              
              **(114**
              **)**
              
              (1,244
              )
              
              (127
              )
              
              (1,371
              )
              
              (6,449
              )
              
              (10,811
              )
              
              (17,260
              )Loss
                  from discontinued operations
              
              
              **(114**
              **)**
              
              **-**
              
              
              **(114**
              **)**
              
              (1,276
              )
              
              (235
              )
              
              (1,511
              )
              
              (6,607
              )
              
              (9,616
              )
              
              (16,223
              )
  
   F-20
 **MILLER
              INDUSTRIES, INC. AND SUBSIDIARIES**
 **NOTES
            TO CONSOLIDATED FINANCIAL STATEMENTS**
   The
        following assets and liabilities are reclassified as held for sale at December
        31, 2005 and 2004 (in thousands):
  **2005**
              
              **2004****Dist.**
              
              **Towing**
              
              **Total**
              
              **Dist.**
              
              **Towing**
              
              **Total**Cash
                  and temporary investments
              
              **$**
              **23**
              
              **$**
              **-**
              
              **$**
              **23**
              
              $
              574
              
              $
              -
              
              $
              574Accounts
                  receivable, net
              
              
              **1,774**
              
              
              **401**
              
              
              **2,175**
              
              
              1,444
              
              
              492
              
              
              1,936Inventories
              
              
              **187**
              
              
              **-**
              
              
              **187**
              
              
              3,144
              
              
              -
              
              
              3,144Prepaid
                  expenses and other current assets
              
              
              **37**
              
              
              **-**
              
              
              **37**
              
              
              74
              
              
              -
              
              
              74Current
                  assets of discontinued operations held for sale
              
              **$**
              **2,021**
              
              **$**
              **401**
              
              **$**
              **2,422**
              
              $
              5,236
              
              $
              492
              
              $
              5,728Property,
                  plant and equipment
              
              **$**
              **-**
              
              **$**
              **647**
              
              **$**
              **647**
              
              $
              16
              
              $
              1,112
              
              $
              1,128Noncurrent
                  assets of discontinued operations held for sale
              
              **$**
              **-**
              
              **$**
              **647**
              
              **$**
              **647**
              
              $
              16
              
              $
              1,112
              
              $
              1,128Current
                  portion of long-term debt
              
              **$**
              **-**
              
              **$**
              **-**
              
              **$**
              **-**
              
              $
              223
              
              $
              442
              
              $
              665Other
                  current liabilities
              
              
              **273**
              
              
              **5,971**
              
              
              **6,244**
              
              
              2,569
              
              
              7,171
              
              
              9,740Current
                  liabilities of discontinued operations held for sale
              
              **$**
              **273**
              
              **$**
              **5,971**
              
              **$**
              **6,244**
              
              $
              2,792
              
              $
              7,613
              
              $
              10,405Long-term
                  debt
              
              **$**
              **-**
              
              **$**
              **-**
              
              **$**
              **-**
              
              $
              2,275
              
              $
              -
              
              $
              2,275Noncurrent
                  liabilities of discontinued operations held for sale
              
              **$**
              **-**
              
              **$**
              **-**
              
              **$**
              **-**
              
              $
              2,275
              
              $
              -
              
              $
              2,275
  **13.**
              **QUARTERLY
                  FINANCIAL INFORMATION
                  (UNAUDITED)**
  The
        following is a summary of the unaudited quarterly financial information for
        the
        years ended December 31, 2005 and 2004 (in thousands, except per share
        data):
  **Net
                  Sales**
              
              **Operating**
                **Income**
              
              **Loss
                  From Discontinued Operations**
              
              **Net
                  Income (****a)**
              
              **Basic
                  Income**
                **Per****Share**
              
              **Diluted**
                **Income**
                **Per****Share***2005*First
                  Quarter
              
              $
              76,896
              
              $
              3,476
              
              $
              (46
              )
              $
              2,025
              
              $
              0.19
              
              $
              0.18Second
                  Quarter
              
              
              92,938
              
              
              7,302
              
              
              (34
              )
              
              5,165
              
              
              0.46
              
              
              0.45Third
                  Quarter
              
              
              89,480
              
              
              7,214
              
              
              (30
              )
              
              5,422
              
              
              0.49
              
              
              0.47Fourth
                  Quarter
              
              
              92,570
              
              
              7,656
              
              
              (4
              )
              
              5,974
              
              
              0.53
              
              
              0.52Total
              
              $
              351,884
              
              $
              25,648
              
              $
              (114
              )
              $
              18,586
              
              $
              1.66
              
              $
              1.62*2004*First
                  Quarter
              
              $
              46,158
              
              $
              2,329
              
              $
              (488
              )
              $
              612
              
              $
              0.06
              
              $
              0.06Second
                  Quarter
              
              
              59,648
              
              
              3,327
              
              
              (322
              )
              
              1,753
              
              
              0.16
              
              
              0.16Third
                  Quarter
              
              
              63,300
              
              
              3,376
              
              
              (471
              )
              
              1,522
              
              
              0.14
              
              
              0.14Fourth
                  Quarter
              
              
              67,202
              
              
              3,351
              
              
              (230
              )
              
              1,588
              
              
              0.14
              
              
              0.14Total
              
              $
              236,308
              
              $
              12,383
              
              $
              (1,511
              )
              $
              5,475
              
              $
              0.50
              
              $
              0.50
  (a)
              The
                  income tax provision (benefit) has been allocated by quarter based
                  on the
                  effective rate for the twelve months ended December 31, 2005 and
                  2004.
    F-21
  **MILLER
        INDUSTRIES, INC. AND SUBSIDIARIES**
  **SCHEDULE
        II -VALUATION AND QUALIFYING ACCOUNTS**
  **Balance
                  at**
                **Beginning
                  of**
                **Period**
              
              **Charged
                  to**
                **Expenses**
              
              **Accounts**
                **Written
                  Off**
              
              **Balance
                  at**
                **End
                  of**
                **Period****(In
                  Thousands)**Year
                  ended December 31, 2003:Deduction
                  from asset accounts:Allowance
                  for doubtful accounts
              
              $
              805
              
              
              492
              
              
              (235
              )
              $
              1,062Year
                  ended December 31, 2004:Deduction
                  from asset accounts:Allowance
                  for doubtful accounts
              
              $
              1,062
              
              
              567
              
              
              (513
              )
              $
              1,116Year
                  ended December 31, 2005Deduction
                  from asset accounts:Allowance
                  for doubtful accounts
              
              $
              1,116
              
              
              827
              
              
              (109
              )
              $
              1,834
 
 
 
 **Balance
                  at**
                **Beginning
                  of**
                **Period**
              
              **Charged
                  to**
                **Expense**
              
              **Claims**
              
              **Balance
                  at**
                **End
                  of**
                **Period****(In
                  Thousands)**Year
                  ended December 31, 2003:Product
                  Warranty Reserve:
              
              $
              554
              
              
              1,547
              
              
              (1,462
              )
              $
              639Year
                  ended December 31, 2004:Product
                  Warranty Reserve:
              
              $
              639
              
              
              1,520
              
              
              (1,494
              )
              $
              665Year
                  ended December 31, 2005:Product
                  Warranty Reserve:
              
              $
              665
              
              
              1,744
              
              
              (1,608
              )
              $
              801
 
  S-1
  
 **Balance
                  at Beginning of Period**
              
              **Additions
                  (Reductions)**
              
              **Balance
                  at End of Period****(In
                  Thousands)**Year
                  ended December 31, 2003:Deferred
                  Tax Valuation Allowance:
              
              $
              18,032
              
              
              (4,733
              )
              $
              13,299Year
                  ended December 31, 2004:Deferred
                  Tax Valuation Allowance:
              
              $
              13,299
              
              
              2,889
              
              $
              16,188Year
                  ended December 31, 2005:Deferred
                  Tax Valuation Allowance:
              
              $
              16,188
              
              
              (7,375
              )
              $
              8,813
  Note:
              The
                  Allowance for Doubtful Accounts and Product Warranty Reserve tables
                  above
                  reflect activity for continuing operations for the years ended
                  December
                  31, 2005, 2004 and 2003. The Deferred Tax Valuation Allowance table
                  reflects consolidated operations for all periods
                  presented.


S-2


**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 14 th day of
      March, 2006.






**MILLER
                INDUSTRIES, INC.**
              
              By:/s/ Jeffrey I. Badgley
              Jeffrey
                I. Badgley
              President,
                Co-Chief Executive Officer and
                Director








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




Pursuant
      to the requirements of the Securities Exchange Act of 1934, this Report has
      been
      signed below by the following persons on behalf of the Registrant in the
      capacities indicated on the 14 th day of
      March, 2006.




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





**EXHIBIT
      INDEX**




**Exhibit
                Number**
            **Description**21
            Subsidiaries
                of the Registrant23.1
            Consent
                of Joseph Decosimo and Company, PLLC24
            Power
                of Attorney (see signature page)31.1
            Certification
                Pursuant to Rules 13a-14(a)/15d-14(a) by Co-Chief Executive
                Officer31.2
            Certification
                Pursuant to Rules 13a-14(a)/15d-14(a) by Co-Chief Executive
                Officer31.3
            Certification
                Pursuant to Rules 13a-14(a)/15d-14(a) by Chief Financial
                Officer32.1
            Certification
                Pursuant to Section 1350 of Chapter 63 of Title 18 of United States
                Code
                by Co-Chief Executive Officer32.2
            Certification
                Pursuant to Section 1350 of Chapter 63 of Title 18 of United States
                Code
                by Co-Chief Executive Officer32.3
            Certification
                Pursuant to Section 1350 of Chapter 63 of Title 18 of United States
                Code
                by Chief Financial Officer