Form 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Form 10-Q
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þ |
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Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
For the quarterly period ended September 30, 2011
OR
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o |
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Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
For the transition period from to
Commission File Number 1-8524
Myers Industries, Inc.
(Exact name of registrant as specified in its charter)
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Ohio
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34-0778636 |
(State or other jurisdiction of
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(IRS Employer Identification |
incorporation or organization)
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Number) |
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1293 South Main Street |
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Akron, Ohio
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44301 |
(Address of principal executive offices)
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(Zip code) |
(330) 253-5592
(Registrants telephone number, including area code)
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, and (2) has been subject to such filing requirements for the past 90 days. Yes þ No o.
Indicate by check mark whether the registrant has submitted electronically and
posted on its corporate Web site, if any, every Interactive Data File required to be submitted and
posted pursuant to Rule 405 of Regulation S-T during the
preceding 12 months (or for such shorter
period that the registrant was required to submit and post such files). Yes þ No o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated
filer, a non-accelerated filer or a smaller reporting company. See the definitions of large
accelerated filer, accelerated filer, and smaller reporting company in Rule 12b-2 of the
Exchange Act. (Check one):
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Large accelerated filer o
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Accelerated filer þ
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Non-accelerated filer o
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Smaller reporting company o. |
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of
the Exchange Act). Yes o No þ.
Indicate the number of shares outstanding of each of the issuers classes of common stock, as
of the latest practicable date.
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Class |
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Outstanding as of October 25, 2011 |
Common Stock, without par value
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33,370,325 shares |
Part I Financial Information
Item 1. Financial Statements
MYERS INDUSTRIES, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Financial Position
(Dollars in thousands)
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Assets |
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September 30, 2011 |
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December 31, 2010 |
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(Unaudited) |
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Current Assets |
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Cash |
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$ |
2,851 |
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$ |
4,705 |
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Accounts receivable-less allowances
of $4,126 and $2,950, respectively |
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101,299 |
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98,799 |
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Inventories |
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Finished and in-process products |
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75,099 |
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67,580 |
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Raw materials and supplies |
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28,596 |
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28,824 |
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103,695 |
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96,404 |
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Prepaid expenses |
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5,752 |
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8,158 |
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Deferred income taxes |
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4,843 |
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5,781 |
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Total Current Assets |
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218,440 |
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213,847 |
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Other Assets |
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Goodwill |
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44,523 |
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40,892 |
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Patents and other intangible assets |
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17,725 |
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18,667 |
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Other |
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7,737 |
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7,174 |
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69,985 |
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66,733 |
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Property, Plant and Equipment, at Cost |
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Land |
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4,124 |
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4,369 |
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Buildings and leasehold improvements |
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55,659 |
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59,690 |
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Machinery and equipment |
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386,724 |
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383,664 |
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446,507 |
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447,723 |
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Less allowances for depreciation
and amortization |
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(309,010 |
) |
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(295,908 |
) |
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Property, plant and equipment, net |
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137,497 |
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151,815 |
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$ |
425,922 |
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$ |
432,395 |
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See notes to unaudited condensed consolidated financial statements.
1
Part I Financial Information
MYERS INDUSTRIES, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Financial Position
(Dollars in thousands, except share data)
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Liabilities and Shareholders Equity |
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September 30, 2011 |
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December 31, 2010 |
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(Unaudited) |
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Current Liabilities |
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Accounts payable |
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$ |
60,947 |
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$ |
64,143 |
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Accrued expenses |
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Employee compensation |
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20,380 |
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18,294 |
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Income taxes |
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3,462 |
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5,891 |
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Taxes, other than income taxes |
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2,683 |
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1,970 |
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Accrued interest |
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844 |
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|
195 |
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Other |
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17,088 |
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15,533 |
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Current portion of long-term debt |
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305 |
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305 |
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Total Current Liabilities |
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105,709 |
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106,331 |
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Long-term debt, less current portion |
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79,925 |
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83,530 |
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Other liabilities |
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13,107 |
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5,936 |
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Deferred income taxes |
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24,168 |
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24,793 |
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Shareholders Equity |
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Serial Preferred Shares (authorized 1,000,000 shares; none
issued and outstanding) |
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-0- |
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-0- |
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Common Shares, without par value (authorized 60,000,000
shares; outstanding 33,572,151 and 35,315,732; net of
treasury shares of 4,340,506 and 2,592,175, respectively) |
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20,405 |
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21,486 |
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Additional paid-in capital |
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266,010 |
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281,376 |
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Accumulated other comprehensive income |
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6,621 |
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10,164 |
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Retained deficit |
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(90,023 |
) |
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(101,221 |
) |
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203,013 |
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211,805 |
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$ |
425,922 |
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$ |
432,395 |
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See notes to unaudited condensed consolidated financial statements.
2
Part I Financial Information
MYERS INDUSTRIES, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Income
(Unaudited)
For the Three and Nine Months Ended September 30, 2011 and 2010
(Dollars in thousands, except share data)
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For The Three Months Ended |
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For The Nine Months Ended |
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September |
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September |
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September |
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September |
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30, 2011 |
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30, 2010 |
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30, 2011 |
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30, 2010 |
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Net sales |
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$ |
190,045 |
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$ |
187,045 |
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$ |
560,291 |
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$ |
549,374 |
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Cost of sales |
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142,543 |
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145,568 |
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416,732 |
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429,033 |
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Gross profit |
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47,502 |
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41,477 |
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143,559 |
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120,341 |
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Selling, general and administrative expenses |
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40,243 |
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35,183 |
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115,258 |
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103,575 |
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Operating income |
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7,259 |
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|
6,294 |
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28,301 |
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16,766 |
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Interest expense, net |
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1,264 |
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1,722 |
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3,655 |
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5,373 |
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Income before income taxes |
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5,995 |
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4,572 |
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24,646 |
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11,393 |
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Income tax (benefit) expense |
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(1,219 |
) |
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|
1,353 |
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|
6,055 |
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|
3,743 |
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|
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Net income |
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$ |
7,214 |
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$ |
3,219 |
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$ |
18,591 |
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$ |
7,650 |
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Income per common share: |
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Basic and diluted |
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$ |
0.21 |
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$ |
0.09 |
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$ |
0.53 |
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$ |
0.22 |
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Dividends declared per share |
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$ |
0.070 |
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$ |
0.065 |
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$ |
0.210 |
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$ |
0.195 |
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|
|
|
|
|
|
|
|
|
|
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|
See notes to unaudited condensed consolidated financial statements.
3
Part I Financial Information
MYERS INDUSTRIES, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
(Unaudited)
For the Nine Months Ended September 30, 2011 and 2010
(Dollars in thousands)
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September 30, 2011 |
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|
September 30, 2010 |
|
Cash Flows From Operating Activities |
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Net income |
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$ |
18,591 |
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|
$ |
7,650 |
|
Items not affecting use of cash: |
|
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Depreciation |
|
|
24,102 |
|
|
|
22,482 |
|
Impairment charges and asset write-offs |
|
|
814 |
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|
|
-0- |
|
Amortization of intangible assets |
|
|
2,210 |
|
|
|
2,217 |
|
Non-cash stock compensation |
|
|
2,151 |
|
|
|
1,796 |
|
Provision for loss on accounts receivable |
|
|
1,179 |
|
|
|
557 |
|
Deferred taxes |
|
|
635 |
|
|
|
(930 |
) |
Other long-term liabilities |
|
|
3,015 |
|
|
|
51 |
|
Gain on sale of property, plant and equipment |
|
|
(591 |
) |
|
|
(733 |
) |
Other |
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|
50 |
|
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|
-0- |
|
Cash flow provided by (used for) working capital: |
|
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Accounts receivable |
|
|
(5,024 |
) |
|
|
(18,374 |
) |
Inventories |
|
|
(8,759 |
) |
|
|
5,014 |
|
Prepaid expenses |
|
|
2,294 |
|
|
|
1,442 |
|
Accounts payable and accrued expenses |
|
|
(422 |
) |
|
|
(6,634 |
) |
|
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|
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|
Net cash provided by operating activities |
|
|
40,245 |
|
|
|
14,538 |
|
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Cash Flows From Investing Activities |
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Additions to property, plant and equipment |
|
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(13,337 |
) |
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|
(14,508 |
) |
Acquisition of business, net of cash acquired |
|
|
(1,100 |
) |
|
|
(411 |
) |
Proceeds from sale of property, plant and equipment |
|
|
1,082 |
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|
|
5,213 |
|
Other |
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|
(92 |
) |
|
|
209 |
|
|
|
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|
Net cash used for investing activities |
|
|
(13,447 |
) |
|
|
(9,497 |
) |
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Cash Flows From Financing Activities |
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Net (repayment) borrowing on credit facility |
|
|
(3,212 |
) |
|
|
2,700 |
|
Cash dividends paid |
|
|
(7,163 |
) |
|
|
(6,915 |
) |
Proceeds from issuance of common stock |
|
|
173 |
|
|
|
103 |
|
Repurchase of common stock |
|
|
(18,821 |
) |
|
|
-0- |
|
|
|
|
|
|
|
|
Net cash used for financing activities |
|
|
(29,023 |
) |
|
|
(4,112 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign Exchange Rate Effect on Cash |
|
|
371 |
|
|
|
163 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (decrease) increase in cash |
|
|
(1,854 |
) |
|
|
1,092 |
|
Cash at January 1 |
|
|
4,705 |
|
|
|
4,728 |
|
|
|
|
|
|
|
|
Cash at September 30 |
|
$ |
2,851 |
|
|
$ |
5,820 |
|
|
|
|
|
|
|
|
See notes to unaudited condensed consolidated financial statements.
4
Part I Financial Information
MYERS INDUSTRIES, INC. AND SUBSIDIARIES
Condensed Consolidated Statement of Shareholders Equity
(Unaudited)
For the Nine Months Ended September 30, 2011
(Dollars in thousands, except per share data)
|
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|
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|
|
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Accumulative |
|
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|
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|
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Additional |
|
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Other |
|
|
Retained |
|
|
|
Common |
|
|
Paid-In |
|
|
Comprehensive |
|
|
Income |
|
|
|
Stock |
|
|
Capital |
|
|
Income |
|
|
(Deficit) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at January 1, 2011 |
|
$ |
21,486 |
|
|
$ |
281,376 |
|
|
$ |
10,164 |
|
|
$ |
(101,221 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
|
|
-0- |
|
|
|
-0- |
|
|
|
-0- |
|
|
|
18,591 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency translation
adjustment |
|
|
-0- |
|
|
|
-0- |
|
|
|
(3,543 |
) |
|
|
-0- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchases for treasury |
|
|
(1,095 |
) |
|
|
(17,726 |
) |
|
|
-0- |
|
|
|
-0- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common stock issued |
|
|
14 |
|
|
|
209 |
|
|
|
-0- |
|
|
|
-0- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock based compensation |
|
|
-0- |
|
|
|
2,151 |
|
|
|
-0- |
|
|
|
-0- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends declared $.21 per share |
|
|
-0- |
|
|
|
-0- |
|
|
|
-0- |
|
|
|
(7,393 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at September 30, 2011 |
|
$ |
20,405 |
|
|
$ |
266,010 |
|
|
$ |
6,621 |
|
|
$ |
(90,023 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
See notes to unaudited condensed consolidated financial statements.
5
Part I Financial Information
Myers Industries, Inc.
Notes to Condensed Consolidated Financial Statements
(Dollar amounts in thousands, except where otherwise indicated)
(Unaudited)
Statement of Accounting Policy
The accompanying condensed consolidated financial statements include the accounts of Myers
Industries, Inc. and all wholly owned subsidiaries (collectively, the Company), and have been
prepared without audit, pursuant to the rules and regulations of the Securities and Exchange
Commission (the SEC). Certain information and footnote disclosures normally included in financial
statements prepared in accordance with U.S. generally accepted accounting principles have been
condensed or omitted pursuant to those rules and regulations, although the Company believes that
the disclosures are adequate to make the information not misleading. It is suggested that these
financial statements be read in conjunction with the financial statements and notes thereto
included in the Companys latest annual report on Form 10-K.
In the opinion of the Company, the accompanying financial statements contain all adjustments
(consisting of only normal recurring accruals) necessary to present fairly the financial position
as of September 30, 2011, and the results of operations and cash flows for the periods presented.
The results of operations for the three and nine months ended September 30, 2011 are not
necessarily indicative of the results of operations that will occur for the year ending December
31, 2011.
Reclassification
Certain prior year amounts in the accompanying condensed consolidated financial statements have
been restated in conformity with generally accepted accounting principles to conform to the current
years presentation.
Recent Accounting Pronouncements
In June 2011, the Financial Accounting Standards Board (FASB) issued Accounting Standards Updated
(ASU) No. 2011-05, Comprehensive Income (Topic 220) Presentation of Comprehensive Income. The
new accounting standard will require companies to present the components of net income and other
comprehensive income either as one continuous statement or two separate but consecutive statements.
The update eliminates the option to report other comprehensive income and its components in the
statement of changes in equity. The Company plans to adopt this guidance beginning in the first
quarter of 2012. The Company does not believe the adoption of this guidance will have a material
impact on the Companys consolidated financial statements, as this guidance modifies presentation
of other comprehensive income already disclosed in the financial statements.
In September 2011, the FASB issued ASU No. 2011-08, Intangibles Goodwill and Other (Topic 350).
The update gives companies the option to perform a qualitative assessment that may enable them to
forgo the annual two-step test for impairment. ASU No. 2011-08 allows a qualitative assessment to
first be performed to determine whether it is more likely than not that the fair value of a
reporting unit is less than its carrying value. If a company concludes that this is the case, it
must perform the two-step test. Otherwise a company does not have to perform the two-step test.
The ASU also includes a revised list of events and circumstances to determine whether it is more
likely than not that the fair value of a reporting unit is less than its carrying amount. The ASU
is effective for fiscal years beginning after December 15, 2011 with early adoption permitted. The
Company conducts its annual impairment assessment as of October 1, which will include adoption of
this guidance.
Fair Value Measurement
The Company follows guidance included in ASC 820, Fair Value Measurements and Disclosures, for its
financial assets and liabilities, as required. The guidance established a common definition for
fair value to be applied to U.S. GAAP requiring the use of fair value, established a framework for
measuring fair value, and expanded disclosure requirements about such fair value measurements. The
guidance did not require any new fair value measurements, but rather applied to all other
accounting pronouncements that require or permit fair value measurements. Under ASC 820, the
hierarchy that prioritizes the inputs to valuation techniques used to measure fair value is divided
into three levels:
|
|
|
|
|
|
|
Level 1:
|
|
Unadjusted quoted prices in active markets for identical assets or liabilities. |
|
|
|
|
|
|
|
Level 2:
|
|
Unadjusted quoted prices in active markets for similar assets or liabilities,
unadjusted quoted prices for identical
or similar assets or liabilities in markets that are not active or inputs that are observable
either directly or
indirectly. |
|
|
|
|
Level 3:
|
|
Unobservable inputs for which there is little or no market data or which reflect the
entitys own assumptions. |
6
Part I Financial Information
Myers Industries, Inc.
Notes to Condensed Consolidated Financial Statements
(Dollar amounts in thousands, except where otherwise indicated)
(Unaudited)
The fair value of the Companys cash, accounts receivable, accounts payable and accrued expenses
are considered to have a fair value which approximates carrying value due to the nature and
relative short maturity of these assets and liabilities.
The fair value of debt under the Companys Credit Agreement approximates carrying value due to the
floating interest rates and relative short maturity (less than 90 days) of the revolving borrowings
under this agreement. The fair value of the Companys $35 million fixed rate senior notes was
estimated at $38.7 million at September 30, 2011 using market observable inputs for the Companys
comparable peers with public debt, including quoted prices in active markets and interest rate
measurements which are considered level 2 inputs.
Inventories
Approximately one quarter of the Companys inventories use the last in first out (LIFO) method of
determining cost. An actual valuation of inventory under the LIFO method can be made only at the
end of each year based on the inventory levels and costs at that time. Accordingly, interim LIFO
calculations must necessarily be based on managements estimates of expected year-end inventory
levels and costs. Because these are subject to many factors beyond managements control, estimated
interim results are subject to change in the final year-end LIFO inventory valuation and therefore,
no adjustment was recorded as of an interim period.
Acquisitions
On July 20, 2011, the Company acquired tooling assets and intellectual property from Material
Improvements L.P. for a new reusable plastic container used in producing, shipping and processing
bulk natural cheese. The total purchase price was $5.7 million, comprised of a $1.1 million cash
payment and $4.6 million contingent consideration. The preliminary allocation of purchase price
included $0.3 million of property, plant and equipment, amortizable intangible assets, which
included $1.2 million in technology and $0.2 million for trade name, and $3.9 million in goodwill.
These assets and assumed liabilities were recorded at estimated fair value as of the date of the
acquisition using primarily level 3 inputs. The operating results of the business acquired are
included in our Material Handling Segment; however, no sales have been recorded during the third
quarter related to the acquisition. The Company is awaiting final valuation studies to complete
the purchase price allocation.
On July 21, 2010, the Company acquired the assets of Enviro-Fill, Inc., a developer of a new fuel
overfill prevention and fuel vapor capture system. The total purchase price was approximately $1.5
million, including contingent liabilities for additional future consideration. The allocation of
purchase price includes $0.8 million of amortizable intangible assets and $0.7 million of goodwill.
These assets were recorded at fair value as of the date of acquisition using primarily level 2 and
3 inputs. The Enviro-Fill business is included in the Companys Engineered Products Segment.
Goodwill
The following table presents the net carrying amount of goodwill allocated by reporting unit, and
changes for the nine months ended September 30, 2011:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign |
|
|
|
|
|
|
|
|
(In thousands) |
|
Balance at |
|
|
|
|
|
|
Currency |
|
|
|
|
|
|
Balance at |
|
Segment |
|
January 1, 2011 |
|
|
Acquisitions |
|
|
Translation |
|
|
Impairment |
|
|
September 30, 2011 |
|
Distribution |
|
$ |
214 |
|
|
$ |
-0- |
|
|
$ |
-0- |
|
|
$ |
-0- |
|
|
$ |
214 |
|
Engineered Products |
|
|
707 |
|
|
|
-0- |
|
|
|
-0- |
|
|
|
-0- |
|
|
|
707 |
|
Material Handling |
|
|
30,383 |
|
|
|
3,896 |
|
|
|
-0- |
|
|
|
-0- |
|
|
|
34,279 |
|
Lawn and Garden |
|
|
9,588 |
|
|
|
-0- |
|
|
|
(265 |
) |
|
|
-0- |
|
|
|
9,323 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
$ |
40,892 |
|
|
$ |
3,896 |
|
|
$ |
(265 |
) |
|
$ |
-0- |
|
|
$ |
44,523 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7
Part I Financial Information
Myers Industries, Inc.
Notes to Condensed Consolidated Financial Statements
(Dollar amounts in thousands, except where otherwise indicated)
(Unaudited)
Discontinued Operations
On February 1, 2007, the Company sold its former Material Handling Europe business segment. On
November 10, 2010, the French Tax Authorities issued a notice of assessment to the buyer, and
current owner, of these businesses. The assessment related to business taxes for the years 2006,
2007 and 2008, and totaled 1.5 million euros. As part of the sale agreement, the Company provided
indemnification to the current owner for any taxes, interest, penalties and reasonable costs
related to these businesses for periods through the date of sale. On January 13, 2011, the Company
filed a Notice of Claim to protest the assessment with the French Tax Authorities. The Company and
its French legal counsel believe that the basis for the assessment is not valid, and accordingly,
will continue to appeal the claim through all available means. Accordingly, no amounts have been
recognized in the financial statements related to this matter.
Net Income Per Common Share
Net income per common share, as shown on the Condensed Consolidated Statements of Income, is
determined on the basis of the weighted average number of common shares outstanding during the
period as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
|
|
September 30, |
|
|
September 30, |
|
|
|
2011 |
|
|
2010 |
|
|
2011 |
|
|
2010 |
|
Weighted average common shares outstanding |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
34,354,210 |
|
|
|
35,310,744 |
|
|
|
34,938,806 |
|
|
|
35,301,608 |
|
Dilutive effect of stock options and restricted stock |
|
|
106,742 |
|
|
|
71,667 |
|
|
|
89,607 |
|
|
|
59,131 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common shares outstanding diluted |
|
|
34,460,952 |
|
|
|
35,382,411 |
|
|
|
35,028,413 |
|
|
|
35,360,739 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Options to purchase 692,810 and 1,159,679 shares of common stock that were outstanding for the
three months and nine months ended September 30, 2011, respectively, were not included in the
computation of diluted earnings per share for these respective periods as the exercise price of
these options was greater than the average market price of common shares, and their effect would be
anti-dilutive. Options to purchase 1,570,196 that were outstanding at September 30, 2010 were not
included in the computation of diluted earnings per share amounts in 2010 as the exercise price of
these options was greater than the average market price of common shares, and their effect would be
anti-dilutive.
Supplemental Disclosure of Cash Flow Information
The Companys cash payments for interest and income taxes for the three and nine month periods
ended September 30, 2011 and 2010 are as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
|
|
September 30, |
|
|
September 30, |
|
(In thousands) |
|
2011 |
|
|
2010 |
|
|
2011 |
|
|
2010 |
|
Interest paid |
|
$ |
441 |
|
|
$ |
116 |
|
|
$ |
2,498 |
|
|
$ |
3,505 |
|
Income taxes paid |
|
$ |
1,576 |
|
|
$ |
89 |
|
|
$ |
7,855 |
|
|
$ |
7,726 |
|
8
Part I Financial Information
Myers Industries, Inc.
Notes to Condensed Consolidated Financial Statements
(Dollar amounts in thousands, except where otherwise indicated)
(Unaudited)
Comprehensive Income
A summary of comprehensive income for the three and nine month periods ended September 30, 2011 and
2010 is as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
|
|
September 30, |
|
|
September 30, |
|
(In thousands) |
|
2011 |
|
|
2010 |
|
|
2011 |
|
|
2010 |
|
Net income |
|
$ |
7,214 |
|
|
$ |
3,219 |
|
|
$ |
18,591 |
|
|
$ |
7,650 |
|
Other comprehensive income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency
translation adjustment |
|
|
(6,177 |
) |
|
|
2,510 |
|
|
|
(3,543 |
) |
|
|
1,489 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive income |
|
$ |
1,037 |
|
|
$ |
5,729 |
|
|
$ |
15,048 |
|
|
$ |
9,139 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated Other Comprehensive Income
As of September 30, 2011 and December 31, 2010, the balance in the Companys accumulated other
comprehensive income is comprised of the following:
|
|
|
|
|
|
|
|
|
|
|
September 30, |
|
|
December 31, |
|
(In thousands) |
|
2011 |
|
|
2010 |
|
Foreign currency translation adjustments |
|
$ |
8,691 |
|
|
$ |
12,234 |
|
Pension adjustments |
|
|
(2,070 |
) |
|
|
(2,070 |
) |
|
|
|
|
|
|
|
Total |
|
$ |
6,621 |
|
|
$ |
10,164 |
|
|
|
|
|
|
|
|
Restructuring
During the nine months ended September 30, 2011, the Company recorded net expenses of $0.1 million
in selling, general and administrative (SG&A) and
$1.2 million in cost of goods sold (COS) for
costs associated with restructuring plans including impairment of property, plant and equipment,
lease obligations, severance, consulting and other related charges. Restructuring expenses recorded
during the nine months ended September 30, 2010 were $1.1 million in SG&A and $1.0 million in COS.
Impairment charges for property, plant and equipment were based on appraisals or estimated market
values of similar assets which are considered level 2 inputs. Estimated lease obligations
associated with closed facilities were based on level 2 inputs.
In the three and nine months ended September 30, 2011, the Company recorded expenses of $0.1
million and $1.3 million, respectively, related to restructuring activities. Restructuring costs in
the three months ended September 30, 2011 included charges of $0.5 million in the Distribution
Segment related to severance and non-cancelable lease costs offset by a gain of $0.5 million on
the sale of distribution facility. In addition, $0.1 million of restructuring charges were recorded
in the Engineered Products Segment. In the nine months ended September 30, 2011, net restructuring
costs of $0.7 million in the Distribution Segment related to charges of $1.2 million offset by a
gain of $0.5 million from a sale of a facility and a $0.3 million write-down for an idle Lawn and
Garden manufacturing facility in the first quarter. In addition, restructuring charges of $0.3
million in the Engineered Products Segment for the nine month period ended September 30, 2011
related to non-cancelable lease costs.
In the three and nine months ended September 30, 2010, the Company recorded expenses of
approximately $0.4 million and $2.1 million, respectively, for restructuring costs that were
primarily related to rigging and transportation costs in connection with the movement of certain
machinery and equipment between facilities. In addition, during the first quarter of 2010 the
Company sold its closed Material Handling plant in Shelbyville, Kentucky for $5.1 million and
recorded a gain on the sale of $0.7 million.
9
Part I Financial Information
Myers Industries, Inc.
Notes to Condensed Consolidated Financial Statements
(Dollar amounts in thousands, except where otherwise indicated)
(Unaudited)
The accrued liability balance for severance and other exit costs associated with restructuring is
included in Other Accrued expenses in the Condensed Consolidated Statements of Financial Position.
Activity related to the Companys restructuring reserves as of September 30, 2011 is as follows:
|
|
|
|
|
(Dollars in thousands) |
|
|
|
|
Balance at January 1, 2011 |
|
$ |
763 |
|
Provision (reversal)(a) |
|
|
(285 |
) |
Less: Payments |
|
|
(237 |
) |
|
|
|
|
Balance at September 30, 2011 |
|
$ |
241 |
|
|
|
|
|
|
|
|
(a) |
|
Related to reserves for actions no longer needed for their originally intended
purposes. |
As a result of restructuring activity and plant closures, approximately $5.7 million of property,
plant, and equipment has been classified as held for sale at September 30, 2011 and is included in
Other Assets in the Condensed Consolidated Statements of Financial Position. At December 31, 2010
approximately $5.0 million was classified as held for sale.
Stock Compensation
The Companys 2008 Incentive Stock Plan (the 2008 Plan) authorizes the Compensation Committee of
the Board of Directors to issue up to 3,000,000 shares of various types of stock based awards
including stock options, restricted stock and stock appreciation rights to key employees and
directors. In general, options granted and outstanding vest over a three to five year period and
expire ten years from the date of grant.
Stock compensation expense was $0.5 million for the three months ended September 30, 2011 and $0.7
million for the three months ended September 30, 2010. Stock compensation expense was $2.2 million
and $1.8 million for the nine months ended September 30, 2011 and 2010, respectively. Stock
compensation is included in selling, general and administrative expenses in the accompanying
Condensed Consolidated Statements of Income. Total unrecognized compensation costs related to
non-vested share based compensation arrangements at September 30, 2011 was approximately $3.2
million which is expected to be recognized over the next three years.
On March 3, 2011, 355,025 stock option shares were granted with a three year vesting period. The
fair value of these option shares was estimated using a Trinomial Lattice option pricing model
based on assumptions set forth in the following table. The Company uses historical data to estimate
employee exercise and departure behavior. The risk free interest rate is based on the U.S. Treasury
yield curve in effect at the time of grant and through the expected term. The dividend yield rate
is based on the Companys historical dividend yield, and expected volatility is derived from
historical volatility of the Companys shares and those of similar companies measured against the
market as a whole.
|
|
|
|
|
Model |
|
|
|
|
Risk free interest rate |
|
|
3.79 |
% |
Expected dividend yield |
|
|
2.90 |
% |
Expected life of award (years) |
|
|
6.00 |
|
Expected volatility |
|
|
50.72 |
% |
Fair value per option share |
|
$ |
3.69 |
|
10
Part I Financial Information
Myers Industries, Inc.
Notes to Condensed Consolidated Financial Statements
(Dollar amounts in thousands, except where otherwise indicated)
(Unaudited)
The following table summarizes the stock option activity for the nine months ended September 30,
2011:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average |
|
|
Weighted |
|
|
|
|
|
|
|
Exercise |
|
|
Average |
|
|
|
Shares |
|
|
Price |
|
|
Life |
|
Outstanding at January 1, 2011 |
|
|
1,845,210 |
|
|
$ |
11.65 |
|
|
|
|
|
Options Granted |
|
|
365,025 |
|
|
|
10.10 |
|
|
|
|
|
Options Exercised |
|
|
(8,868 |
) |
|
|
9.52 |
|
|
|
|
|
Cancelled or Forfeited |
|
|
(150,644 |
) |
|
|
12.59 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Outstanding at September 30, 2011 |
|
|
2,050,723 |
|
|
$ |
11.32 |
|
|
6.97 years |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exercisable at September 30, 2011 |
|
|
1,329,708 |
|
|
$ |
11.82 |
|
|
|
|
|
The intrinsic value of a stock option is the amount by which the market value of the
underlying stock exceeds the exercise price of the option. The total intrinsic value of all stock
options exercised during the nine months ended September 30, 2011 and 2010 was approximately $16
and $13, respectively.
In addition, at September 30, 2011 and December 31, 2010, the Company had outstanding 288,500 and
177,250 shares of restricted stock, respectively, with vesting periods through March 2014. The
restricted stock awards are rights to receive shares of common stock subject to forfeiture and
other restrictions, which generally vest over a three to four year period.
Income Taxes
For the quarter ended September 30, 2011, the Company had a tax benefit of $1.2 million. The
Company recognized net favorable income tax adjustments of approximately $3.8 million that were
largely the result of reversing previously reserved tax benefits related to the loss on the sale of
one of our subsidiaries in 2007 and other tax adjustments, including provision to return
adjustments resulting from changes in estimates. The tax benefit generated by the sale and the
related accrued interest was reversed in the third quarter based on the expiration of the statute
of limitations for assessment of the taxes.
The effective tax rate for the quarter ended September 30, 2010 was 29.6% and primarily reflects
the benefit of approximately $0.3 million from the recognition of tax benefits previously reserved.
As of September 30, 2011, the total amount of unrecognized tax benefits was approximately $1.0
million of which $0.6 million would reduce the Companys effective tax rate. The amount of accrued
interest related to uncertain tax positions at September 30, 2011 was approximately $0.1 million.
The Company recognizes accrued amounts of interest and penalties related to uncertain tax positions
as part of its income tax expense.
The following table summarized current year activity related to the Companys unrecognized tax
benefits:
|
|
|
|
|
Balance at January 1, 2011 |
|
$ |
5,767 |
|
Increase related to prior year tax positions |
|
|
288 |
|
Expiration of statute of limitations for assessment of taxes |
|
|
(4,963 |
) |
|
|
|
|
|
|
|
|
|
Balance at September 30, 2011 |
|
$ |
1,092 |
|
|
|
|
|
As of September 30, 2011, the Company and its significant subsidiaries are subject to examination
for the years after 2004 in Brazil, after 2005 in Canada, and after 2007 in the United States. The
Company and its subsidiaries are subject to examination in certain states within the United States
starting after 2006 and in the remaining states after 2007.
11
Part I Financial Information
Myers Industries, Inc.
Notes to Condensed Consolidated Financial Statements
(Dollar amounts in thousands, except where otherwise indicated)
(Unaudited)
Retirement Plans
The Company and certain of its subsidiaries have pension and profit sharing plans covering
substantially all of their employees. The Companys frozen defined benefit pension plan provides
benefits primarily based upon a fixed amount for each year of service as defined. The net periodic
pension cost for the three and nine months ended September 30, 2011 and 2010, respectively, are as
follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
|
|
September 30, |
|
|
September 30, |
|
|
|
2011 |
|
|
2010 |
|
|
2011 |
|
|
2010 |
|
Service cost |
|
$ |
18 |
|
|
$ |
9 |
|
|
$ |
54 |
|
|
$ |
27 |
|
Interest cost |
|
|
76 |
|
|
|
80 |
|
|
|
228 |
|
|
|
240 |
|
Expected return on assets |
|
|
(77 |
) |
|
|
(74 |
) |
|
|
(231 |
) |
|
|
(222 |
) |
Amortization of actuarial net loss |
|
|
16 |
|
|
|
15 |
|
|
|
48 |
|
|
|
45 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net periodic pension cost |
|
$ |
33 |
|
|
$ |
30 |
|
|
$ |
99 |
|
|
$ |
90 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Company contributions |
|
|
|
|
|
|
|
|
|
$ |
268 |
|
|
$ |
-0- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contingencies
The Company is a defendant in various lawsuits and a party to various other legal proceedings, in
the ordinary course of business, some of which are covered in whole or in part by insurance. We
believe that the outcome of these lawsuits and other proceedings will not individually or in the
aggregate have a future material adverse effect on our consolidated financial position, results of
operations or cash flows.
Environmental
New Idria Mercury Mine
In September 2011, a preliminary notification was issued from the U.S. Environmental Protection
Agency (EPA) adding the New Idria Mercury Mine site located near Hollister, California to the
Superfund National Priorities List (NPL) because of alleged contaminants discharged to California
waterways. The effective date of the NPL is October 17, 2011. The New Idria Quicksilver Mining
Company, founded in 1936, owned and operated the New Idria Mine through 1972. In 1981, New Idria
was merged into Buckhorn Inc., which was subsequently acquired by
Myers Industries in 1987. The EPA contends that past mining operations
have resulted in mercury contamination and acid mine drainage in the San Carlos Creek, Silver Creek
and a portion of Panoche Creek and that other downstream locations may also be impacted.
The Company is subject to environmental laws and regulations which may require that the Company
investigate and remediate the effects of the release or disposal of materials at sites with past
and present operations. Since Buckhorn Inc. may be a potentially responsible party (PRP) of the New
Idria Mercury Mine, the Company recognized an expense of $1.9 million during the three months ended
September 30, 2011 related to performing a remedial investigation and feasibility study to
determine the extent of remediation, if any, and the screening of alternatives. As investigation
and remediation proceed, it is possible that adjustments to the liability will be necessary to
reflect new information. Estimates of the Companys liability are based on current facts, laws,
regulations and technology. Estimates of the Companys environmental liabilities are further
subject to uncertainties regarding the nature and extent of site contamination, the range of
remediation alternatives available, evolving remediation standards, imprecise engineering
evaluation
and cost estimates, the extent of corrective actions that may be required and the number and
financial condition of other PRPs, as well as the extent of their responsibility for the
remediation, and the availability of insurance coverage for these expenses. At this time, further
remediation cost estimates are not known and have not been prepared.
12
Part I Financial Information
Myers Industries, Inc.
Notes to Condensed Consolidated Financial Statements
(Dollar amounts in thousands, except where otherwise indicated)
(Unaudited)
California Regional Water Quality Control Board
In October 2008, the Company and its subsidiary, Buckhorn Inc., along with a number of other
parties were identified in a planning document adopted by the California Regional Water Quality
Control Board, San Francisco Bay Region (RWQCB). The planning document relates to the presence of
mercury, including amounts contained in mining wastes, in and around the Guadalupe River Watershed
(Watershed) region in Santa Clara County, California. Buckhorn has been alleged to be a successor
in interest to an entity that performed mining operations in a portion of the Watershed area. The
Company has not been contacted by the RWQCB with respect to Watershed clean-up efforts that may
result from the adoption of this planning document. The extent of the mining wastes that may be the
subject of future cleanup has yet to be determined, and the actions of the RWQCB have not yet
advanced to the stage where a reasonable estimate of remediation cost, if any, is available.
Although assertion of a claim by the RWQCB is reasonably possible, it is not possible at this time
to estimate the amount of any obligation the Company may incur for these cleanup efforts within the
Watershed region, or whether such cost would be material to the Companys financial statements.
Other
In October 2009, an employee was fatally wounded while performing maintenance at the Companys
manufacturing facility in Springfield, Missouri. On February 22, 2011, the family of the deceased
filed a civil complaint against the manufacturer of the press involved in the incident and the
Buckhorn Inc. employee involved in the incident. Buckhorn Inc. has not been named as a party to
this lawsuit. At this time the Company is not able to determine whether this proceeding or the
incident will result in legal exposure to the Company, or if any such liability that results would
be material to the Companys financial statements. The Company believes that it has adequate
insurance to resolve any claims resulting from this incident.
When management believes that a loss arising from these matters is probable and can reasonably
be estimated, we record the amount of the estimated loss, or the minimum estimated liability when
the loss is estimated using a range, and no point within the range is more probable of occurrence
than another. As additional information becomes available, any potential liability related to
these matters will be assessed and the estimates will be revised, if necessary.
Based on current available information, management believes that the ultimate outcome of these
matters will not have a material adverse effect on our financial position or overall trends in its
results of operations. However, these matters are subject to inherent uncertainties, and
unfavorable rulings could occur. If an unfavorable ruling were to occur, there exists the
possibility of a material adverse impact on the financial position and results of operations of the
period in which the ruling occurs, or in future periods.
Segment Information
Using the criteria of ASC 280 Segment Reporting, the Company has four operating segments: Lawn and
Garden, Material Handling, Distribution, and Engineered Products. Each of these operating segments
is also a reportable segment under the ASC 280 criteria.
None of the reportable segments include operating segments that have been aggregated. Some of these
segments contain individual business components that have been aggregated on the basis of common
management, customers, products, production processes and other economic characteristics.
Income before income taxes for each business segment is based on net sales less cost of products
sold, and the related selling, administrative and general expenses. In computing business segment
operating income, general corporate overhead expenses and interest expenses are not included.
13
Part I Financial Information
Myers Industries, Inc.
Notes to Condensed Consolidated Financial Statements
(Dollar amounts in thousands, except where otherwise indicated)
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
|
|
September 30, |
|
|
September 30, |
|
Net Sales |
|
2011 |
|
|
2010 |
|
|
2011 |
|
|
2010 |
|
Lawn and Garden |
|
$ |
45,552 |
|
|
$ |
49,569 |
|
|
$ |
151,998 |
|
|
$ |
164,315 |
|
Material Handling |
|
|
72,070 |
|
|
|
69,381 |
|
|
|
204,808 |
|
|
|
192,321 |
|
Distribution |
|
|
48,785 |
|
|
|
45,979 |
|
|
|
136,511 |
|
|
|
128,666 |
|
Engineered Products |
|
|
29,360 |
|
|
|
28,031 |
|
|
|
85,182 |
|
|
|
82,187 |
|
Intra-segment elimination |
|
|
(5,722 |
) |
|
|
(5,915 |
) |
|
|
(18,208 |
) |
|
|
(18,115 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Sales |
|
$ |
190,045 |
|
|
$ |
187,045 |
|
|
$ |
560,291 |
|
|
$ |
549,374 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
|
|
September 30, |
|
|
September 30, |
|
Income Before Income Taxes |
|
2011 |
|
|
2010 |
|
|
2011 |
|
|
2010 |
|
Lawn and Garden |
|
$ |
(1,413 |
) |
|
$ |
(2,542 |
) |
|
$ |
846 |
|
|
$ |
(3,264 |
) |
Material Handling |
|
|
8,870 |
|
|
|
7,080 |
|
|
|
27,526 |
|
|
|
15,942 |
|
Distribution |
|
|
4,564 |
|
|
|
4,480 |
|
|
|
11,651 |
|
|
|
11,009 |
|
Engineered Products |
|
|
3,001 |
|
|
|
2,334 |
|
|
|
8,381 |
|
|
|
7,971 |
|
Corporate |
|
|
(7,763 |
) |
|
|
(5,058 |
) |
|
|
(20,103 |
) |
|
|
(14,892 |
) |
Interest expense-net |
|
|
(1,264 |
) |
|
|
(1,722 |
) |
|
|
(3,655 |
) |
|
|
(5,373 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income taxes |
|
$ |
5,995 |
|
|
$ |
4,572 |
|
|
$ |
24,646 |
|
|
$ |
11,393 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
14
Part I Financial Information
|
|
|
Item 2. |
|
Managements Discussion and Analysis of Financial Condition and Results of Operations |
Results of Operations
Comparison of the Third Quarter of 2011 to the Third Quarter of 2010
Net Sales:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended |
|
|
|
|
|
|
|
(dollars in millions) |
|
September 30, |
|
|
|
|
|
|
|
Segment |
|
2011 |
|
|
2010 |
|
|
Change |
|
|
% Change |
|
Lawn and Garden |
|
$ |
45.6 |
|
|
$ |
49.6 |
|
|
$ |
(4.0 |
) |
|
|
(8 |
%) |
Material Handling |
|
$ |
72.1 |
|
|
$ |
69.4 |
|
|
$ |
2.7 |
|
|
|
4 |
% |
Distribution |
|
$ |
48.8 |
|
|
$ |
46.0 |
|
|
$ |
2.8 |
|
|
|
6 |
% |
Engineered Products |
|
$ |
29.4 |
|
|
$ |
28.0 |
|
|
$ |
1.4 |
|
|
|
5 |
% |
Intra-segment elimination |
|
$ |
(5.9 |
) |
|
$ |
(6.0 |
) |
|
$ |
0.1 |
|
|
|
1 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL |
|
$ |
190.0 |
|
|
$ |
187.0 |
|
|
$ |
3.0 |
|
|
|
2 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales in the quarter ended September 30, 2011 were $190.0 million, an increase of
$3.0 million or 2% compared to the prior year. Increased selling prices of $18.9 million and the
effect of favorable foreign currency translation of $1.5 million were offset by $17.4 million in
lower net sales volume.
Net sales in the Lawn and Garden Segment in the third quarter of 2011 were down $4.0 million or 8%
compared to the third quarter of 2010. The decreased sales primarily reflect lower volume of $9.1
million compared to the third quarter of 2010. The carryover effect of a weak spring growing season
and cautious buying patterns for the 2012 season negatively impacted sales volumes during the third
quarter of 2011. The lower sales volume was partially offset by an increase of $4.1 million from
improved pricing in response to higher raw material costs and $1.0 million of favorable foreign
currency translation reflecting the impact of exchange rates for the Canadian dollar.
Net sales in the Material Handling Segment increased $2.7 million or 4% in the third quarter of
2011 compared to the same quarter in 2010. The current quarter sales improvement includes $12.5
million from improved selling prices in response to higher raw material costs and slightly higher
sales volumes as strong growth in agricultural, automotive and manufacturing markets more than
offset a loss of approximately $9.7 million in custom pallet sales.
Net sales in the Distribution Segment increased $2.8 million or 6% in the third quarter of 2011
compared to the third quarter of 2010. Sales increased $1.9 million from higher selling prices and
volume of $0.8 million, primarily from new product sales initiatives and a broader customer base.
In the Engineered Products Segment, net sales in the third quarter of 2011 increased $1.4 million
or 5% compared to the prior year. The sales increase was primarily due to increased volumes of
$0.9 million driven by product demand in the custom and marine markets and price realization of
$0.4 million.
Cost of Sales & Gross Profit:
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended |
|
(dollars in millions) |
|
September 30, |
|
Cost of Sales and Gross Profit |
|
2011 |
|
|
2010 |
|
Cost of sales |
|
$ |
142.5 |
|
|
$ |
145.6 |
|
Gross profit |
|
$ |
47.5 |
|
|
$ |
41.5 |
|
Gross profit as a percentage of sales |
|
|
25.0 |
% |
|
|
22.2 |
% |
Gross profit margin increased to 25.0% for the quarter ended September 30, 2011 compared with
22.2% in the prior year. Prices for plastic resins were, on average, approximately 26% higher for
polypropylene and 19% higher for high density polyethylene in the third quarter of 2011 compared to
the third quarter of 2010. Product pricing strategies, primarily in the Material Handling and Lawn
and Garden Segments, mitigated the impact of higher raw material costs. Gross profit margins were
higher due to a favorable sales mix in the Material Handling Segment, combined with productivity
improvements in all segments.
15
Selling, General and Administrative Expenses from Continuing Operations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended |
|
|
|
|
(dollars in millions) |
|
September 30, |
|
|
|
|
SG&A Expenses |
|
2011 |
|
|
2010 |
|
|
Change |
|
SG&A expenses |
|
$ |
40.2 |
|
|
$ |
35.2 |
|
|
$ |
5.0 |
|
SG&A expenses as a percentage of sales |
|
|
21.2 |
% |
|
|
18.8 |
% |
|
|
|
|
Selling, general and administrative (SG&A) expenses for the quarter ended September 30, 2011
were $40.2 million, an increase of $5.0 million or 14% compared to the same period in the prior
year. The increase in SG&A expenses was due primarily to higher employee related costs and
professional fees. Included in SG&A expenses in third quarter 2011 were restructuring and other
unusual charges of $2.0 million, primarily related to the New Idria Mercury Mine (New Idria)
investigation and feasibility study. Restructuring charges of $0.1 million were recorded in the
third quarter of 2010.
Interest Expense:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended |
|
|
|
|
|
|
|
(dollars in millions) |
|
September 30, |
|
|
|
|
|
|
|
Net Interest Expense |
|
2011 |
|
|
2010 |
|
|
Change |
|
|
% Change |
|
Net interest expense |
|
$ |
1.3 |
|
|
$ |
1.7 |
|
|
$ |
(0.4 |
) |
|
|
(24 |
%) |
Outstanding borrowings |
|
$ |
80.2 |
|
|
$ |
107.1 |
|
|
$ |
(26.9 |
) |
|
|
(25 |
%) |
Average borrowing rate |
|
|
5.64 |
% |
|
|
6.01 |
% |
|
|
|
|
|
|
|
|
Net interest expense was $1.3 million for the quarter ended September 30, 2011, a decrease of
24% compared to $1.7 million in the prior year resulting from lower borrowing levels and a
reduction in average interest rates.
Income Before Taxes:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended |
|
|
|
|
|
|
|
(dollars in millions) |
|
September 30, |
|
|
|
|
|
|
|
Segment |
|
2011 |
|
|
2010 |
|
|
Change |
|
|
% Change |
|
Lawn and Garden |
|
$ |
(1.4 |
) |
|
$ |
(2.5 |
) |
|
$ |
1.1 |
|
|
|
44 |
% |
Material Handling |
|
$ |
8.9 |
|
|
$ |
7.0 |
|
|
$ |
1.9 |
|
|
|
27 |
% |
Distribution |
|
$ |
4.6 |
|
|
$ |
4.5 |
|
|
$ |
0.1 |
|
|
|
2 |
% |
Engineered Products |
|
$ |
3.0 |
|
|
$ |
2.4 |
|
|
$ |
0.6 |
|
|
|
25 |
% |
Corporate and interest |
|
$ |
(9.1 |
) |
|
$ |
(6.8 |
) |
|
$ |
(2.3 |
) |
|
|
(34 |
%) |
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL |
|
$ |
6.0 |
|
|
$ |
4.6 |
|
|
$ |
1.4 |
|
|
|
30 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before taxes for the quarter ended September 30, 2011, was $6.0 million compared to
$4.6 million in the prior year. The increase was primarily due to disciplined pricing to mitigate
higher raw material costs and a more favorable product sales mix which increased gross profit
margins. Income before taxes was negatively impacted in the quarter
due to the charge of $1.9
million in Corporate related to New Idria.
Income Taxes:
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended |
|
(dollars in millions) |
|
September 30, |
|
Consolidated Income Taxes |
|
2011 |
|
|
2010 |
|
Income before taxes |
|
$ |
6.0 |
|
|
$ |
4.6 |
|
Income taxes (benefit) |
|
$ |
(1.2 |
) |
|
$ |
1.4 |
|
Effective tax rate |
|
|
20.3 |
% |
|
|
29.6 |
% |
For the quarter ended September 30, 2011, the Company had a tax benefit of $1.2 million,
primarily as a result of reversing previously accrued tax benefits and other discreet third quarter 2011
adjustments. The Company recognized net favorable income tax adjustments of approximately $3.8
million that were largely the result of reversing previously reserved tax benefits related to the
loss on the sale of one of our subsidiaries in 2007 and other tax adjustments, including provision
to return adjustments resulting from changes in estimates. The tax benefit and related accrued
interest was reversed in the third quarter based on the expiration of the statute of limitations
for assessment of the taxes. The effective tax rate for the quarter ended September 30, 2010 was
29.6% and reflects the benefit of approximately $0.3 million from the reversal of tax benefits
previously reserved.
16
Comparison of the Nine Months Ended September 30, 2011 to the Nine Months Ended September 30, 2010
Net Sales:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended |
|
|
|
|
|
|
|
(dollars in millions) |
|
September 30, |
|
|
|
|
|
|
|
Segment |
|
2011 |
|
|
2010 |
|
|
Change |
|
|
% Change |
|
Lawn and Garden |
|
$ |
152.0 |
|
|
$ |
164.3 |
|
|
$ |
(12.3 |
) |
|
|
(7 |
%) |
Material Handling |
|
$ |
204.8 |
|
|
$ |
192.3 |
|
|
$ |
12.5 |
|
|
|
7 |
% |
Distribution |
|
$ |
136.5 |
|
|
$ |
128.7 |
|
|
$ |
7.8 |
|
|
|
6 |
% |
Engineered Products |
|
$ |
85.2 |
|
|
$ |
82.2 |
|
|
$ |
3.0 |
|
|
|
4 |
% |
Intra-segment elimination |
|
$ |
(18.2 |
) |
|
$ |
(18.1 |
) |
|
$ |
(0.1 |
) |
|
|
(1 |
%) |
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL |
|
$ |
560.3 |
|
|
$ |
549.4 |
|
|
$ |
10.9 |
|
|
|
2 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales for the nine months ended September 30, 2011 were $560.3 million, an increase of
$10.9 million or 2% compared to the prior year. Sales increased $33.9 million from higher selling
prices and $4.8 million from the impact of foreign currency translation. These increases were
partially offset by lower sales volumes of $27.8 million, particularly in the Lawn and Garden
Segment.
Net sales in the Lawn and Garden Segment for the nine months ended September 30, 2011 were down
$12.3 million or 7% compared to the nine months ended September 30, 2010. The decrease in net sales
primarily reflected lower volume of $24.2 million resulting in a prolonged effect of the weak 2011
growing season due to poor weather conditions. The lower sales volumes were partially offset by
$9.1 million from favorable pricing actions taken to offset higher raw material costs and $3.4
million from the effect of foreign currency translation.
Net sales in the Material Handling Segment increased $12.5 million or 7% in the nine months ended
September 30, 2011 compared to the same period in 2010. The increase in current year net sales
included $19.7 million from improved pricing in response to higher raw material costs and $1.1
million from the effect of foreign currency translation. Strong demand for reusable bulk containers
in agricultural, industrial, manufacturing and automotive markets resulted in a net sales volume
increase of $30.7 million, which partially offset a reduction of $37.9 million in custom pallet
sales.
Net sales in the Distribution Segment increased $7.8 million or 6% for the nine months ended
September 30, 2011 compared to the same period in 2010. The higher sales reflect $3.9 million from
higher selling prices in response to higher raw material costs and increased volume of $3.5
million, primarily from new product sales initiatives and a broader customer base. In addition,
current year sales increased a $0.4 million from the favorable effect of foreign currency
translation.
In the Engineered Products Segment, net sales for the nine months ended September 30, 2011
increased $3.0 million, or 4% compared to the prior year. Net sales increased due to higher selling
prices of $1.2 million and higher volume of $1.8 million (inclusive of $0.7 million of intercompany
sales) driven by strong demand in the recreational vehicle and marine markets that more than offset
lower volume in the transplant automotive market.
Cost of Sales & Gross Profit:
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended |
|
(dollars in millions) |
|
September 30, |
|
Cost of Sales and Gross Profit |
|
2011 |
|
|
2010 |
|
Cost of sales |
|
$ |
416.7 |
|
|
$ |
429.0 |
|
Gross profit |
|
$ |
143.6 |
|
|
$ |
120.3 |
|
Gross profit as a percentage of sales |
|
|
25.6 |
% |
|
|
21.9 |
% |
Gross profit margin increased to 25.6% for the nine months ended September 30, 2011 compared
with 21.9% in the prior year. Prices for plastic resins were, on average, approximately 21% higher
for polypropylene and 13% higher for high density polyethylene for the first nine months of 2011
compared to the same period in 2010. Product pricing strategies, primarily in the Material Handling
and Lawn and Garden Segments, mitigated the impact of higher costs for raw material plastic resins.
The impact of improved product pricing and productivity improvements resulted in a higher gross
profit margin for the nine months ended September 30, 2011 compared to the same period in the prior
year.
17
Selling, General and Administrative Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended |
|
|
|
|
(dollars in millions) |
|
September 30, |
|
|
|
|
SG&A Expenses |
|
2011 |
|
|
2010 |
|
|
Change |
|
SG&A expenses |
|
$ |
115.3 |
|
|
$ |
103.6 |
|
|
$ |
11.7 |
|
SG&A expenses as a percentage of sales |
|
|
20.6 |
% |
|
|
18.9 |
% |
|
|
|
|
SG&A expenses for the nine months ended September 30, 2011 were $115.3 million, an increase of
$11.7 million or 11% compared to the same period in the prior year. The increase was primarily due
to higher employee related costs of $1.8 million, higher freight charges of $1.5 million, increased
provision for bad debts of $1.5 million and higher selling and corporate administrative costs of
$2.3 million. In addition, SG&A expenses for the nine months ended September 30, 2011 included
impairment charges of $0.4 million related to two closed manufacturing facilities and $0.4 million
of an asset write-off. In the same period of 2010, a gain of $0.7 million was realized from the
sale of a plant for a net increase of $1.5 million. SG&A expense for the nine months ended
September 30, 2011 included restructuring and other unusual charges of $3.2 million, primarily
related to the New Idria investigation and feasibility study, compared with similar charges of $1.1
million for the same period in 2010.
Interest Expense:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended |
|
|
|
|
|
|
|
(dollars in millions) |
|
September 30, |
|
|
|
|
|
|
|
Net Interest Expense |
|
2011 |
|
|
2010 |
|
|
Change |
|
|
% Change |
|
Net interest expense |
|
$ |
3.7 |
|
|
$ |
5.4 |
|
|
$ |
(1.7 |
) |
|
|
(32 |
%) |
Outstanding borrowings |
|
$ |
80.2 |
|
|
$ |
107.1 |
|
|
$ |
(26.9 |
) |
|
|
(25 |
%) |
Average borrowing rate |
|
|
5.21 |
% |
|
|
6.06 |
% |
|
|
|
|
|
|
|
|
Net interest expense was $3.7 million for the nine months ended September 30, 2011, a decrease
of 32% compared to $5.4 million in the prior year. The reduction in 2011 interest expense was the
result of lower borrowing levels and a reduction in average interest rates.
Income Before Taxes:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended |
|
|
|
|
|
|
|
(dollars in millions) |
|
September 30, |
|
|
|
|
|
|
|
Segment |
|
2011 |
|
|
2010 |
|
|
Change |
|
|
% Change |
|
Lawn and Garden |
|
$ |
0.8 |
|
|
$ |
(3.2 |
) |
|
$ |
4.0 |
|
|
|
126 |
% |
Material Handling |
|
$ |
27.5 |
|
|
$ |
15.9 |
|
|
$ |
11.6 |
|
|
|
73 |
% |
Distribution |
|
$ |
11.7 |
|
|
$ |
11.0 |
|
|
$ |
0.7 |
|
|
|
6 |
% |
Engineered Products |
|
$ |
8.4 |
|
|
$ |
8.0 |
|
|
$ |
0.4 |
|
|
|
5 |
% |
Corporate and interest |
|
$ |
(23.8 |
) |
|
$ |
(20.3 |
) |
|
$ |
(3.5 |
) |
|
|
(17 |
%) |
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL |
|
$ |
24.6 |
|
|
$ |
11.4 |
|
|
$ |
13.2 |
|
|
|
116 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before taxes for the nine months ended September 30, 2011, was $24.6 million, an
increase of $13.2 million compared to $11.4 million in the prior year. The increase was primarily
due to higher net sales and a more favorable sales mix resulting in increased gross profit margins
in the nine months ended September 30, 2011 compared with the prior year.
Income Taxes:
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended |
|
(dollars in millions) |
|
September 30, |
|
Consolidated Income Taxes |
|
2011 |
|
|
2010 |
|
Income before taxes |
|
$ |
24.6 |
|
|
$ |
11.4 |
|
Income taxes |
|
$ |
6.1 |
|
|
$ |
3.7 |
|
Effective tax rate |
|
|
24.6 |
% |
|
|
32.9 |
% |
The effective tax rate for the nine months ended September 30, 2011 was 24.6% compared to
32.9% in the prior year. The lower effective rate in 2011 reflects the Companys reversal of
previously accrued tax benefits, primarily related to the incurred
loss on the sale
of its European Material Handling business in 2007 and other tax
adjustments, including provision to return adjustments resulting from
changes in estimates. Income tax expense for the nine months ended
September 30, 2010 was reduced by approximately $0.5 million for reversal of previously accrued tax
benefits and a foreign tax net operating loss.
18
Liquidity and Capital Resources
Cash provided by operating activities from continuing operations was $40.2 million for the nine
months ended September 30, 2011 compared to $14.5 million for the nine months ended September 30,
2010. The increase of $25.7 million in current year cash provided by operations was primarily
attributable to an increase of $10.9 million in net income, an increase of approximately $8.1
million in depreciation, amortization and other non-cash charges and improved changes in working
capital compared to the prior year.
For the nine months ended September 30, 2011, cash of $11.9 million was used for working capital
compared to $18.6 million in the prior year. In the nine months ended September 30, 2011, higher
accounts receivable resulted in a use of $5.0 million of cash compared with a use of $18.4 million
in the prior year. In addition, higher material costs resulted in higher inventory values, which
used approximately $8.8 million of cash for the nine months ended September 30, 2011 compared to
cash provided by a decrease in inventory of $5.0 million for the same period in 2010. Accounts
payable and accrued expenses used cash of $0.4 million in the nine months ended September 30, 2011,
compared with a use of $6.6 million in the prior year as a result of timing of payments at
September 30, 2011.
Capital expenditures were approximately $13.3 million for the nine months ended September 30, 2011
and for the full year are expected to be between $20 to $25 million. In May 2011, the Company
announced a share repurchase plan that allows the Company to repurchase up to 5 million shares of
its common stock. In the quarter ended September 30, 2011, the Company used cash of $18.8 million
to repurchase 1,795,120 shares pursuant to this plan. In addition, the Company used cash to pay
dividends of $7.2 million and $6.9 million in the nine months ended September 30, 2011 and 2010,
respectively.
Total debt at September 30, 2011 was approximately $80.2 million compared with $83.8 million at
December 31, 2010. The Companys Credit Agreement provides available borrowing up to $180 million
and, as of September 30, 2011, there was $44.0 million outstanding under the revolver. As of
September 30, 2011 the Company was in compliance with all its debt covenants. The most restrictive
financial covenants for all of the Companys debt are an interest coverage ratio and a leverage
ratio, defined as earnings before interest, taxes, depreciation, and amortization, as adjusted,
compared to total debt. The ratios as of and for the period ended September 30, 2011 are shown in
the following table:
|
|
|
|
|
|
|
|
|
|
|
Required Level |
|
|
Actual Level |
|
Interest Coverage Ratio |
|
|
2.25 to 1 (minimum) |
|
|
|
7.77 |
|
Leverage Ratio |
|
|
3.25 to 1 (maximum) |
|
|
|
1.12 |
|
The Company believes that cash flows from operations and available borrowing under its Credit
Agreement will be sufficient to meet expected business requirements including strategic
initiatives, capital expenditures, dividends, working capital, debt service and to fund the stock
repurchase program into the foreseeable future.
|
|
|
Item 3. |
|
Quantitative and Qualitative Disclosure About Market Risk |
The Company has certain financing arrangements that require interest payments based on floating
interest rates. The Companys financial results are subject to changes in the market rate of
interest. At present, the Company has not entered into any interest rate swaps or other derivative
instruments to fix the interest rate on any portion of its financing arrangements with floating
rates. Accordingly, based on current debt levels at September 30, 2011, if market interest rates
increase one percent, the Companys interest expense would increase approximately $0.4 million
annually.
Some of the Companys subsidiaries operate in foreign countries and their financial results are
subject to exchange rate movements. The Company has operations in Canada with foreign currency
exposure, primarily due to sales made from businesses in Canada to customers in the United States.
These sales are denominated in US dollars. In addition, the Companys subsidiary in Brazil has
loans denominated in U.S. dollars. The Company has a systematic program to limit its exposure to
fluctuations in exchange rates related to certain assets and liabilities of its operations in
Canada and Brazil that are denominated in U.S. dollars. The net exposure generally ranges from $5
to $10 million. The foreign currency contracts and arrangements created under this program are not
designated as hedged items under FASB ASC 815 Derivatives and Hedging, and accordingly, the changes
in the fair value of the foreign currency arrangements, which have been immaterial, are recorded in
the income statement. The Companys foreign currency arrangements are generally three months or
less and, as of September 30, 2011, the Company had no foreign currency arrangements or contracts
in place.
The Company uses certain commodities, primarily plastic resins, in its manufacturing processes. The
cost of operations can be affected as the market and price for these commodities changes. The
Company currently has no derivative contracts to hedge this risk; however, the Company also has no
significant purchase obligations to purchase fixed quantities of such commodities in future
periods. Significant future increases in the cost of plastic resin or other adverse changes in the
general economic environment could have a material adverse impact on the Companys financial
position, results of operations or cash flows.
19
|
|
|
Item 4. |
|
Controls and Procedures |
The Company maintains disclosure controls and procedures, as defined under Rules 13a-15(e) and
15d-15(e) of the Securities Exchange Act of 1934, as amended, that are designed to ensure that
information required to be disclosed in the Companys reports under the Securities Exchange Act of
1934 is recorded, processed, summarized and reported within the time periods specified in the
Commissions rules and forms and that such information is accumulated and communicated to the
Companys management, including its Chief Executive Officer and Chief Financial Officer, as
appropriate, to allow for timely decisions regarding required disclosure. In designing and
evaluating the disclosure controls and procedures, management recognizes that any controls and
procedures, no matter how well designed and operated, can provide only reasonable assurance of
achieving the desired control objectives, and management is required to apply its judgment in
evaluating the cost-benefit relationship of possible controls and procedures.
The Company carries out a variety of on-going procedures, under the supervision and with the
participation of the Companys management, including the Companys Chief Executive Officer and
Chief Financial Officer, to evaluate the effectiveness of the design and operation of the Companys
disclosure controls and procedures. Based on the foregoing, the Companys Chief Executive Officer
and Chief Financial Officer concluded that the Companys disclosure controls and procedures were
effective at a reasonable assurance level as of the end of the period covered by this report.
There has been no change in the Companys internal controls over financial reporting during the
Companys most recent fiscal quarter that has materially affected, or are reasonably likely to
materially affect, the Companys internal controls over financial reporting.
Part II Other Information
|
|
|
Item 1. |
|
Legal Proceedings |
New Idria Mercury Mine
In September 2011, a preliminary notification was issued from the U.S. Environmental Protection
Agency (EPA) adding the New Idria Mercury Mine site located near Hollister, California to the
Superfund National Priorities List (NPL) because of alleged contaminants discharged to California
waterways. The effective date of the NPL is October 17, 2011. The New Idria Quicksilver Mining
Company, founded in 1936, owned and operated the New Idria Mine through 1972. In 1981 New Idria was
merged into Buckhorn Inc. and subsequently acquired by Myers Industries in 1987. The EPA contends that past mining operations have resulted in
mercury contamination and acid mine drainage in the San Carlos Creek, Silver Creek and a portion of
Panoche Creek and that other downstream locations may also be impacted.
Since Buckhorn Inc. may be a potentially responsible party (PRP) of the New Idria Mercury Mine, the
Company recognized an expense of $1.9 million during the three months ended September 30, 2011
related to performing a remedial investigation and feasibility study to determine the extent of
remediation and the screening of alternatives. As investigation and remediation proceed, it is
likely that adjustments to the liability will be necessary to reflect new information. Estimates of
the Companys liability are based on current facts, laws, regulations and technology. Estimates of
the Companys environmental liabilities are further subject to uncertainties regarding the nature
and extent of site contamination, the range of remediation alternatives available, evolving
remediation standards, imprecise engineering evaluation and cost estimates, the extent of
corrective actions that may be required and the number and financial condition of other PRPs, as
well as the extent of their responsibility for the remediation, and the availability of insurance
coverage for these expenses. At this time, further remediation cost estimates are not known and
have not been prepared.
California Regional Water Quality Control Board
A number of parties, including the Company and its subsidiary, Buckhorn Inc. (Buckhorn), were
identified in a planning document adopted in October 2008 by the California Regional Water Quality
Control Board, San Francisco Bay Region (RWQCB). The planning document relates to the presence of
mercury, including amounts contained in mining wastes, in and around the Guadalupe River Watershed
(Watershed) region in Santa Clara County, California. Buckhorn has been alleged to be a successor
in interest to an entity that performed mining operations in a portion of the Watershed area. The
Company has not been contacted by the RWQCB with respect to Watershed clean-up efforts that may
result from the adoption of this planning document. The extent of the mining wastes that may be the
subject of future cleanup has yet to be determined, and the actions of the RWQCB have not yet
advanced to the stage where a reasonable estimate of remediation cost, if any, is available.
Although assertion of a claim by the RWQCB is reasonably possible, it is not possible at this time
to estimate the amount of any obligation the Company may incur for these cleanup efforts within the
Watershed region, or whether such cost would be material to the Companys financial statements.
20
|
|
|
Item 2. |
|
Unregistered Sales of Equity Securities and Use of Proceeds |
The following table presents information regarding the Companys stock purchase plan during the
three months ended September 30, 2011.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Number of |
|
|
Maximum number of |
|
|
|
|
|
|
|
|
|
|
|
Shares Purchased as |
|
|
Shares that may yet |
|
|
|
Total Number of |
|
|
Average Price Paid |
|
|
Part of the Publicly |
|
|
be Purchased Under |
|
|
|
Shares Purchased |
|
|
per Share |
|
|
Announced Program |
|
|
the Plan (1) |
|
7/1/11 to 7/31/11 |
|
|
276,100 |
|
|
$ |
11.03 |
|
|
|
647,879 |
|
|
|
1,352,121 |
|
8/1/11 to 8/31/11 |
|
|
579,400 |
|
|
$ |
10.40 |
|
|
|
1,227,279 |
|
|
|
772,721 |
|
9/1/11 to 9/30/11 |
|
|
567,841 |
|
|
$ |
10.62 |
|
|
|
1,795,120 |
|
|
|
204,880 |
|
|
|
|
(1) |
|
On June 1, 2011, the Company announced that it adopted a Rule 10b5-1 plan (the Plan) for the
purpose of repurchasing up to two million shares of its common stock in accordance with the
guidelines specified in Rule 10b5-1 of the Securities Exchange Act of 1934. The Plan has been
established in connection with the Board authorized five million share repurchase that was
previously announced on May 2, 2011. |
(a) Exhibits
SIGNATURE
Pursuant to the requirements 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.
|
|
|
|
|
|
MYERS INDUSTRIES, INC.
|
|
Date: October 28, 2011 |
By: |
/s/ Donald A. Merril
|
|
|
|
Donald A. Merril |
|
|
|
Senior Vice President, Chief Financial
Officer and Corporate Secretary (Duly Authorized
Officer and Principal Financial and
Accounting Officer) |
|
|
21
EXHIBIT INDEX
|
|
|
3(a)
|
|
Myers Industries, Inc. Amended and Restated
Articles of Incorporation. Reference is made
to Exhibit 3(a) to Form 10-K filed with the
Commission on March 16, 2005. |
3(b)
|
|
Myers Industries, Inc. Amended and Restated
Code of Regulations. Reference is made to
Exhibit 3.1 to Form 10-K filed with the
Commission on March 12, 2010. |
10(a)
|
|
Myers Industries, Inc. Amended and Restated
Employee Stock Purchase Plan. Reference is
made to Exhibit 10(a) to Form 10-K filed with
the Commission on March 30, 2001. |
10(b)
|
|
Form of Indemnification Agreement for
Directors and Officers. Reference is made to
Exhibit 10.1 to Form 10-Q filed with the
Commission on May 1, 2009.* |
10(c)
|
|
Myers Industries, Inc. Amended and Restated
Dividend Reinvestment and Stock Purchase
Plan. Reference is made to Exhibit 10(d) to
Form 10-K filed with the Commission on March19, 2004. |
10(d)
|
|
Myers Industries, Inc. Amended and Restated
1999 Incentive Stock Plan. Reference is made
to Exhibit 10(f) to Form 10-Q filed with the
Commission on August 9, 2006.* |
10(e)
|
|
2008 Incentive Stock Plan of Myers
Industries, Inc. Reference is made to Exhibit
4.3 to Form S-8 filed with the Commission on
March 17, 2009.* |
10(f)
|
|
Amendment No. 1 to the 2008 Incentive Stock Plan of Myers Industries, Inc. Reference is made to
Exhibit 10.1 to Form 8-K filed with the Commission on August 3, 2010.* |
10(g)
|
|
Myers Industries, Inc. Executive Supplemental Retirement Plan. Reference is made to Exhibit
(10)(g) to Form 10-K filed with the Commission on March 26, 2003.* |
10(h)
|
|
Severance Agreement between Myers
Industries, Inc. and John C. Orr effective June 1, 2011.
Reference is made to Exhibit 10.1 to Form 8-K filed with the
Commission on March 7, 2011.* |
10(i)
|
|
Non-Disclosure and Non-Competition Agreement between Myers Industries, Inc. and John C. Orr dated
July 18, 2000. Reference is made to Exhibit 10(j) to Form 10-Q filed with the Commission on May
6, 2003.* |
10(j)
|
|
Third Amendment to the Myers Industries, Inc. Executive Supplemental Retirement Plan (John C. Orr)
effective June 1, 2008. Reference is made to Exhibit 10.2 to Form 8-K filed with the Commission
on June 24, 2008.* |
10(k)
|
|
Employment Agreement between Myers Industries, Inc. and David B. Knowles dated June 19, 2009.
Reference is made to Exhibit 10.1 to Form 8-K filed with the Commission on June 22, 2009.* |
10(l)
|
|
Non-Disclosure and Non-Competition Agreement between Myers Industries, Inc. and David B. Knowles
dated June 19, 2009. Reference is made to Exhibit 10.2 to Form 8-K filed with the Commission on
June 22, 2009.* |
10(m)
|
|
Amendment to Myers Industries, Inc. Executive Supplemental Retirement Plan (David B. Knowles)
effective June 19, 2009. Reference is made to Exhibit 10.3 to Form 8-K filed with the Commission
on June 22, 2009.* |
10(n)
|
|
Employment Agreement between Myers Industries, Inc. and Donald A. Merril dated January 24, 2006.
Reference is made to Exhibit 10(k) to Form 10-K filed with the Commission on March 16, 2006.* |
10(o)
|
|
Amendment to the Myers Industries, Inc. Executive Supplemental Retirement Plan (Donald A. Merril)
dated January 24, 2006. Reference is made to Exhibit 10(l) to Form 10-K filed with the Commission
on March 16, 2006.* |
10(p)
|
|
Non-Disclosure and Non-Competition Agreement between Myers Industries, Inc. and Donald A. Merril
dated January 24, 2006. Reference is made to Exhibit 10(m) to Form 10-K filed with the Commission
on March 16, 2006.* |
10(q)
|
|
Third Amended and Restated Loan Agreement between Myers Industries, Inc. and JP Morgan Chase
Bank, National Association, as Agent, dated as of November 19, 2010. Reference is made to Exhibit
10.1 to Form 8-K filed with the Commission on November 23, 2010. |
10(r)
|
|
Note Purchase Agreement between Myers Industries, Inc. and the Note Purchasers, dated December
12, 2003, regarding the issuance of $35,000,000 of 6.81% Series 2003-A Senior Notes due December
12, 2013. Reference is made to Exhibit 10(o) to Form 10-K filed with the Commission on March 15,
2004. |
14(a)
|
|
Myers Industries, Inc. Code of Business Conduct and Ethics. Reference is made to Exhibit 14(a) to
Form 10-K filed with the Commission on March 16, 2005. |
14(b)
|
|
Myers Industries, Inc. Code of Ethical Conduct for the Finance Officers and Finance Department
Personnel. Reference is made to Exhibit 14(b) to Form 10-K filed with the Commission on March 16,
2005. |
21
|
|
List of Direct and Indirect Subsidiaries, and Operating Divisions, of Myers Industries, Inc. |
31(a)
|
|
Certification of John C. Orr, President and Chief Executive Officer of Myers Industries, Inc.,
pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
31(b)
|
|
Certification of Donald A. Merril, Senior Vice President, Chief Financial Officer and Corporate Secretary of
Myers Industries, Inc., pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
32
|
|
Certifications of John C. Orr, President and Chief Executive Officer, and Donald A. Merril, Senior Vice
President, Chief Financial Officer and Corporate Secretary, of Myers Industries, Inc. pursuant to Section 906
of the Sarbanes-Oxley Act of 2002. |
101
|
|
The following financial information from Myers Industries, Inc. Quarterly Report on Form 10-Q for
the quarter ended September 30, 2011 filed with the SEC on August 3, 2011, formatted in
XBRL includes: (i) Condensed Consolidated Statements of Financial Position at September 30, 2011
and December 31, 2010, (ii) Condensed Consolidated Statements of Income For the
fiscal periods ended September 30, 2011 and 2010, (iii) Condensed Consolidated Statements of
Cash Flows for the fiscal periods ended September 30, 2011 and 2010, (iv) Condensed Consolidated
Statement of Shareholders Equity for the fiscal period ended September 30, 2011, and (v) the
Notes to Condensed Consolidated Financial Statements.
|
|
|
|
* |
|
Indicates executive compensation plan or arrangement. |
|
** |
|
Pursuant to Item 601(b)(2) of Regulation S-K, certain exhibits and
schedules have been omitted from this filing. The registrant agrees to
furnish the Commission on a supplemental basis a copy of any omitted
exhibit or schedule. |