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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
__________________________________________
FORM 10-Q
(Mark One)
| X | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1995
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OR
|___| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
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Commission file number I-8524
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MYERS INDUSTRIES, INC.
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(Exact name of registrant as specified in its charter)
OHIO #34-0778636
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1293 SOUTH MAIN STREET, AKRON, OHIO 44301
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (216) 253-5592
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Indicate whether the registrant (1) has filed all reports required to
be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
----------. ----------.
Applicable Only to Issuers Involved in Bankruptcy
Proceedings During the Preceding Five Years
Indicate by check mark whether the registrant has filed all documents
and reports required to be filed by Sections 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court. Yes _________. No _________ .
As of October 31, 1995, the number of shares outstanding of the
issuer's Common Stock was:
16,884,017
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PART I - FINANCIAL INFORMATION
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MYERS INDUSTRIES, INC.
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CONDENSED STATEMENT OF CONSOLIDATED FINANCIAL POSITION
AS OF SEPTEMBER 30, 1995 AND DECEMBER 31, 1994
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September 30, December 31,
ASSETS 1995 1994
- ----------- -------------- -------------
CURRENT ASSETS
Cash and temporary cash investments $4,258,903 $1,794,703
Accounts receivable-less allowances
of $1,626,000 and $1,479,000,
respectively 49,482,575 51,226,688
Inventories
Finished and in-process products 37,060,190 33,572,557
Raw materials and supplies 6,674,058 5,809,158
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43,734,248 39,381,715
Prepaid expenses 1,445,657 2,321,849
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TOTAL CURRENT ASSETS 98,921,383 94,724,955
OTHER ASSETS
Excess of cost over fair value of net
assets of companies acquired 17,154,198 9,289,115
Patents and other intangible assets 2,998,043 3,219,371
Other 2,939,576 3,415,134
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23,091,817 15,923,620
PROPERTY, PLANT & EQUIPMENT, AT COST
Land 1,985,008 1,836,637
Buildings and leasehold improvements 32,698,251 29,010,268
Machinery and equipment 94,550,174 85,710,088
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129,233,433 116,556,993
Less allowances for depreciation and
amortization 62,717,060 55,178,681
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66,516,373 61,378,312
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$188,529,573 $172,026,887
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PART I - FINANCIAL INFORMATION
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MYERS INDUSTRIES, INC.
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CONDENSED STATEMENT OF CONSOLIDATED FINANCIAL POSITION
AS OF SEPTEMBER 30, 1995 AND DECEMBER 31, 1994
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September 30, December 31,
LIABILITIES AND SHAREHOLDERS' EQUITY 1995 1994
- ------------------------------------- --------------- ---------------
CURRENT LIABILITIES
Accounts payable $12,855,284 $19,751,167
Employee compensation and related
items 7,754,198 8,911,996
Accrued expenses
Interest 183,880 59,729
Taxes, other than income taxes 1,205,823 974,853
Income taxes (929,280) 431,805
Other 4,704,388 3,271,664
Current portion of long-term debt 738,369 692,379
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TOTAL CURRENT LIABILITIES 26,512,662 34,093,593
LONG-TERM DEBT, less current portion 17,667,576 4,154,646
DEFERRED INCOME TAXES 3,189,286 2,869,976
SHAREHOLDERS' EQUITY
Serial Preferred Shares
(authorized 1,000,000) -0- -0-
Common Shares, without par value
(authorized 30,000,000 shares;
outstanding 16,881,565 and
16,830,101, respectively) 9,743,718 8,303,598
Additional paid-in capital 111,382,116 90,606,429
Foreign currency translation
adjustment (292,588) (466,191)
Retained income 20,326,803 32,464,836
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141,160,049 130,908,672
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$188,529,573 $172,026,887
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PART I - FINANCIAL INFORMATION
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MYERS INDUSTRIES, INC.
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CONDENSED STATEMENT OF CONSOLIDATED INCOME
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FOR THE THREE FOR THE NINE
MONTHS ENDED MONTHS ENDED
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September 30, September 30, September 30, September 30,
1995 1994 1995 1994
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Net sales $74,650,879 $66,191,639 $217,735,842 $194,328,981
Costs and expenses
Cost of sales 52,523,640 45,017,615 151,533,914 130,311,326
Operating expenses 16,226,278 14,479,638 46,357,276 42,476,198
Interest income (62,534) (38,798) (137,933) (112,819)
Interest expense 369,371 208,921 692,734 625,325
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Total costs & expenses 69,056,755 59,667,376 198,445,991 173,300,030
Income before
income taxes 5,594,124 6,524,263 19,289,851 21,028,951
Income taxes 2,277,000 2,658,000 7,851,000 8,521,000
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Net income $3,317,124 $3,866,263 $11,438,851 $12,507,951
=========== =========== =========== ===========
Net income per
Common Share* $.20 $.23 $.68 $.74
Dividends per
Common Share* $.04 $.036 $.11 $.10
Weighted average
number of Common
Shares outstanding* 16,877,705 16,838,663 16,864,258 16,826,589
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*Adjusted for ten percent stock dividend paid in August, 1995.
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PART I - FINANCIAL INFORMATION
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MYERS INDUSTRIES, INC.
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STATEMENTS OF CONSOLIDATED CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1995 AND 1994
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September 30, September 30,
1995 1994
CASH FLOWS FROM OPERATING ACTIVITIES ---------------- ---------------
Net income $11,438,851 $12,507,951
Items not affecting use of cash
Depreciation 7,747,901 6,375,882
Amortization of excess of cost over fair
value of net assets of companies acquired 281,520 214,020
Amortization of deferred financing costs 11,547 58,256
Amortization of patents & other
intangible assets 221,328 221,328
Cash flow provided by (used for) working capital
Accounts receivable 5,178,351 (4,031,068)
Inventories (2,037,247) (507,574)
Prepaid expenses 999,027 (233,561)
Accounts payable and accrued expenses (9,997,770) 776,765
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Net cash provided by operating activities 13,843,508 15,381,999
CASH FLOWS FROM INVESTING ACTIVITIES
Additions to property, plant and
equipment, net (7,102,954) (8,805,322)
Cash dividends paid (1,911,577) (1,713,687)
Other 1,190,424 (55,287)
Purchase of company acquired, net of cash (14,519,740) -0-
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Net cash used for investing activities (22,343,847) (10,574,296)
CASH FLOWS FROM FINANCING ACTIVITIES
Borrowings to finance acquisition 13,000,000 -0-
Borrowings - net (2,035,461) (4,153,201)
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Net cash provided by (used for) financing activities 10,964,539 (4,153,201)
INCREASE IN CASH AND TEMPORARY
CASH INVESTMENTS 2,464,200 654,502
CASH AND TEMPORARY CASH INVESTMENTS
JANUARY 1 1,794,703 1,661,783
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CASH AND TEMPORARY CASH INVESTMENTS
SEPTEMBER 30 $4,258,903 $2,316,285
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PART I - FINANCIAL INFORMATION
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MYERS INDUSTRIES, INC.
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NOTES TO FINANCIAL STATEMENTS
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(1) Statement of Accounting Policy
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The accompanying financial statements include the accounts of Myers
Industries, Inc. and subsidiaries (Company), and have been prepared without
audit, pursuant to the rules and regulations of the Securities and Exchange
Commission. Certain information and footnote disclosures normally included in
financial statements prepared in accordance with 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 Company's 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, 1995 and
December 31, 1994 and the results of operations and cash flows for the nine
months ended September 30, 1995 and 1994.
(2) Income Per Share
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Income per share is determined on the basis of the weighted average
number of common shares and common stock equivalents outstanding during the
period with the 1994 data adjusted for the ten percent stock dividend paid in
August, 1995.
(3) Supplemental Disclosure of Cash Flow Information
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The Company made cash payments for interest expense of $205,198 and $213,387
for the three months ended September 30, 1995 and 1994, respectively. Cash
payments for interest expense were $568,583 and $627,808 for the nine months
ended September 30, 1995 and 1994, respectively. Cash payments for income
taxes were $2,928,379 and $3,543,576 for the three months ended September
30, 1995 and 1994, respectively. Cash payments for income taxes were
$9,033,824 and $8,878,552 for the nine months ended September 30, 1995 and
1994, respectively.
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(4) Acquisitions
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Effective June 30, 1995, the Registrant acquired Ameri-Kart Corp.
(Ameri-Kart), a manufacturer of plastic residential waste carts, material
handling containers, recreational vehicle parts, and hydraulic dumping devices.
The transaction was effected through the exchange of cash for all the issued and
outstanding shares of Ameri-Kart.
The cost of the acquisition, including expenses, is approximately $15
million. The acquisition has been accounted for as a purchase and accordingly,
the assets and liabilities of Ameri-Kart have been recorded at their estimated
fair values for financial reporting purposes at the date of acquisition.
Ameri-Kart's results of operations, the amounts of which are not material, have
been included in the accompanying consolidated financial statements from June
30, 1995.
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PART I - FINANCIAL INFORMATION
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MYERS INDUSTRIES, INC.
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MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
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RESULTS OF OPERATIONS
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Net sales for the three month period ended September 30, 1995
increased $8,459,240 or 12.8 percent as compared to the same period in 1994.
The inclusion of Ameri-Kart's results of operations subsequent to June 30,
1995, increased unit volumes, and increased selling prices were the reasons for
the increase. For the nine month period ending September 30, 1995 net sales
increased $23,406,861 or 12.0 percent over the prior year.
Cost of sales for the three month period ended September 30, 1995
increased $7,506,025 or 16.7 percent and $21,222,588 or 16.3 percent for the
nine month period as compared to 1994. The cost of sales increase is
attributable to additional sales and higher raw material prices in the
Manufacturing segment. Gross profit, expressed as a percentage of sales,
declined to 29.6 percent for the three month period ended September 30, 1995 as
compared to 32.0 percent for the same period in 1994. For the nine month
period the gross profit declined to 30.4 percent as compared to 32.9 percent
for the same period in 1994. The decrease in gross margin is a result of
higher raw material prices which were not fully passed along to customers.
Operating expenses increased $1,746,640 or 12.1 percent for the three
month period ended September 30, 1995 and $3,881,078 or 9.1 percent for the
nine month period as compared to the same periods in 1994. Operating expenses,
expressed as a percentage of sales, decreased slightly to 21.7 percent for the
three month period as compared to 21.9 percent for the same period in 1994.
For the nine month period ended September 30, 1995, operating expenses
decreased to 21.3 percent as a percentage of sales as compared to 21.9 percent
for the same period in 1994. These decreases are attributable to overall cost
controls and greater fixed expense coverage.
Interest income increased during the three month period ended
September 30, 1995 to $62,534 from $38,798 for the same period in 1994 and for
the nine month period interest income increased to $137,933 from $112,819 for
the same period in 1994.
Interest expense for the three and nine month periods ended September
30, 1995 increased $160,450 or 76.8 percent and $67,409 or 10.8 percent,
respectively. This is attributable to additional debt to finance the
Ameri-Kart acquisition.
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RESULTS OF OPERATIONS (Con't)
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Income taxes, expressed as a percentage of income before taxes, were
40.7 percent for the three month periods ended September 30, 1995 and 1994.
For the nine month period ended September 30, 1995, income taxes, expressed as
a percentage of income before taxes, increased slightly to 40.7 percent from
40.5 percent in 1994.
LIQUIDITY AND CAPITAL RESOURCES
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Working capital increased to $72,408,721 at September 30, 1995 from
$60,631,362 at December 31, 1994. Total debt at September 30, 1995, expressed
as a percentage of total capitalization, increased to 11.5 percent as compared
to 3.6 percent at December 31, 1994. This was the result of the Company
financing the acquisition of Ameri-Kart Corp by borrowing on its revolving
credit facility.
The Company currently anticipates capital expenditures in the range of
$12.0 to $15.0 million per year over the next five years, primarily for the
increased polymer manufacturing capacity. Management believes that anticipated
cash flows from operations and available credit facilities will be sufficient
to meet its short-term and long-term needs.
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PART II - OTHER INFORMATION
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MYERS INDUSTRIES, INC.
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SIGNATURE
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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.
11/13/95 By: /s/ GREGORY J. STODNICK
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Date Gregory J. Stodnick
Vice President-Finance
Financial Officer (Duly
Authorized Officer and
Principal Financial and
Accounting Officer)