# TO OUR SHAREHOLDERS

_Source: `DeepSeekOCR_Ardian_pruned_1k/consumer-cyclical-auto-parts/NYSE_MLR_2021/NYSE_MLR_2021.mmd` · pages 2-8_

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TO OUR SHAREHOLDERS
April 14, 2022

During 2021, we have continued to weather the challenges related to COVID-19, the global supply chain and inflation. That said, we believe we are now better positioned than ever to capitalize on the return of normal market conditions. Though we cannot forecast exactly when such conditions might return, we have taken significant steps that should allow us to quickly capitalize on the changing trends within the market. First, we have continued to build our backlog, as demand for our products remains at all-time highs. We have also made the decision to increase our inventory levels using all available parts, enabling us to quickly finish in-process goods as soon as we receive the necessary backordered parts. Finally, we have maintained a keen focus on liquidity, allowing us better flexibility to weather any new or unforeseen challenges. We are extraordinarily proud of our management team and employees for continuing their exceptional work and customer service during this difficult year.

Though we experienced significant bottom-line pressure due to the inflationary challenges and ongoing supply chain constraints during 2021, we were able to strengthen the underlying business in many ways over the course of the year. We continued with our ERP implementation, enterprise software upgrades, and other operational improvement initiatives that reduced our SG&A expenses as a percentage of net sales. During the year, we also enacted a series of price increases that will help offset some of the increased costs we experienced. Although we have not yet seen the full effects of the increases, as it takes time to work through current backlog, we expect the increases enacted in 2021 will yield improved results throughout 2022.

Along with the operational improvements we made, we have also remained focused on our capital structure. We finished the year with no long-term debt and maintained a healthy cash balance, which we intend to use to efficiently ramp up production and delivery of products, as supply chain restraints allow us to do so. Our cash balance also allows us to account for any unforeseen expenses that, unfortunately, have become more common given the state of the market today.

Despite two successive years of challenges, we remain committed to returning capital to our shareholders. We are proud that, amid all challenges, we have been able to continue our quarterly dividend of $0.18 per share for 45 consecutive quarters.

As we enter 2022, we believe supply chain and inflationary pressures will continue to weigh on the business in the near-term. Though we cannot forecast when these conditions will subside, we are hopeful that market conditions will normalize over the course of the year. Given the improvements we have made to the business, we are more confident than ever in our ability to deliver value and capitalize on new growth opportunities once these pressures ease.

In closing, as always, we would like to thank our employees, customers, suppliers, and shareholders for their ongoing support of Miller Industries during these difficult times. We remain committed to building on both our industry-leading product portfolio and our best-in-class customer service.

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William G. Miller, II
President & CEO

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Jeffrey I. Badgley
President of International & Military

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Deborah L. Whitmire
Executive Vice President & CFO

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