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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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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 June 30, 1996
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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
(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 (330) 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 .
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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 .
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As of July 31, 1996, the number of shares outstanding of the issuer's
Common Stock was:
16,951,234
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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 JUNE 30, 1996 AND DECEMBER 31, 1995
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June 30, December 31,
ASSETS 1996 1995
- ------ ---- ----
CURRENT ASSETS
Cash and temporary cash investments $ 4,457,366 $ 3,387,562
Accounts receivable-less allowances
of $1,922,000 and $1,594,000,
respectively
54,370,594 52,501,016
Inventories
Finished and in-process products 31,990,652 34,614,735
Raw materials and supplies 5,535,587 6,635,012
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37,526,239 41,249,747
Prepaid expenses 4,173,505 3,948,972
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TOTAL CURRENT ASSETS 100,527,704 101,087,297
OTHER ASSETS
Excess of cost over fair value of net
assets of companies acquired 16,737,678 17,015,358
Patents and other intangible assets 2,951,286 2,924,256
Other 2,965,123 3,147,213
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22,654,087 23,086,827
PROPERTY, PLANT & EQUIPMENT, AT COST
Land 2,462,463 1,989,508
Buildings and leasehold improvements 35,270,432 35,325,705
Machinery and equipment 101,754,484 93,646,662
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139,487,379 130,961,875
Less allowances for depreciation and
amortization 66,109,231 61,532,126
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73,378,148 69,429,749
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$ 196,559,939 $193,603,873
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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 JUNE 30, 1996 AND DECEMBER 31, 1995
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June 30, December 31,
LIABILITIES AND SHAREHOLDERS' EQUITY 1996 1995
- ------------------------------------ ---- ----
CURRENT LIABILITIES
Accounts payable $ 16,568,179 $ 11,865,636
Employee compensation and related
items 9,092,644 9,736,457
Accrued expenses
Interest 25,636 182,262
Taxes, other than income taxes 1,373,730 1,160,766
Income taxes (1,124,858) 1,068,474
Other 7,410,010 7,382,327
Current portion of long-term debt 485,471 976,104
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TOTAL CURRENT LIABILITIES 33,830,812 32,372,026
LONG-TERM DEBT, less current portion 4,937,430 13,335,191
DEFERRED INCOME TAXES 2,713,135 2,713,106
SHAREHOLDERS' EQUITY
Serial Preferred Shares -0- -0-
(authorized 1,000,000)
Common Shares, without par value 10,443,051 10,014,186
(authorized 30,000,000 shares;
outstanding 16,943,387 and
16,906,019, respectively)
Additional paid-in capital 111,382,116 111,382,116
Foreign currency translation
adjustment (393,827) (393,840)
Retained income 33,647,222 24,181,088
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155,078,562 145,183,550
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$ 196,559,939 $ 193,603,873
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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 MONTHS ENDED FOR THE SIX MONTHS ENDED
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June 30, June 30, June 30, June 30,
1996 1995 1996 1995
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Net sales $79,951,159 $75,583,986 $152,505,415 $143,084,963
Costs and expenses
Cost of sales 54,362,658 52,719,515 102,566,872 99,010,274
Operating expenses 16,036,739 15,344,101 31,344,308 30,130,998
Interest 84,774 148,529 254,312 247,964
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Total costs & expenses 70,484,171 68,212,145 134,165,492 129,389,236
Income before
income taxes 9,466,988 7,371,841 18,339,923 13,695,727
Income taxes 3,861,000 3,017,000 7,519,000 5,574,000
----------- ----------- ------------ ------------
Net income $ 5,605,988 $ 4,354,841 $ 10,820,923 $ 8,121,727
=========== =========== ============ ============
Net income per
Common Share* $ .33 $ .26 $ .64 $ .48
Dividends per
Common Share* $ .04 $ .04 $ .08 $ .07
Weighted average
number of Common
Shares outstanding* 16,941,003 16,866,625 16,929,908 16,857,392
<FN>
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*Adjusted for the 10 percent stock dividend distributed 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 SIX MONTHS ENDED JUNE 30, 1996 AND 1995
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June 30, June 30,
1996 1995
CASH FLOWS FROM OPERATING ACTIVITIES ------------- -----------
Net income $ 10,820,923 $ 8,121,727
Items not affecting use of cash
Depreciation 5,216,492 5,037,952
Amortization of excess of cost over fair
value of net assets of companies acquired 277,680 142,680
Amortization of other intangible assets 238,640 154,042
Cash flow provided by (used for) working capital
Accounts receivable (1,869,578) 1,690,884
Inventories 3,723,508 (2,422,013)
Prepaid expenses (259,531) 523,252
Accounts payable and accrued expenses 1,949,419 (6,200,951)
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Net cash provided by operating activities 20,097,553 7,047,573
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from issuance of common stock 428,865 403,125
Additions to property, plant and
equipment, net (9,164,891) (4,425,729)
Cash dividends paid (1,354,789) (1,226,281)
Other (48,540) (324,922)
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Net cash used for investing activities (10,139,355) (5,573,807)
CASH FLOWS FROM FINANCING ACTIVITIES
Borrowings (repayments) - net (8,888,394) 2,731,723
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INCREASE IN CASH AND TEMPORARY
CASH INVESTMENTS 1,069,804 4,205,489
CASH AND TEMPORARY CASH INVESTMENTS
JANUARY 1 3,387,562 1,794,703
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CASH AND TEMPORARY CASH INVESTMENTS
JUNE 30 $ 4,457,366 $ 6,000,192
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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 June 30, 1996 and the results of
operations and cash flows for the three months and six months ended June 30,
1996 and 1995.
(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 1995 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 $120,674 and
$152,431 for the three months ended June 30, 1996 and 1995, respectively. Cash
payments for interest expense were $517,656 and $363,385 for the six months
ended June 30, 1996 and 1995, respectively. Cash payments for income taxes for
the three months ended June 30, 1996 and June 30, 1995 were $8,442,685 and
$5,776,229, respectively. For the six month period the payments for income taxes
were $9,712,303 for 1996 and $6,105,445 for 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 months ended June 30, 1996 increased $4,367,173
or 5.8 percent and $9,420,452 or 6.6 percent for the six month period as
compared to the same periods in 1995. The increase is primarily attributable to
the inclusion of Ameri-Kart Corp. which was acquired in June, 1995.
Cost of sales for the three month period ended June 30, 1996 increased
$1,643,143 or 3.1 percent and $3,556,598 or 3.6 percent for the six month period
ended June 30, 1996. This is the result of greater sales in 1996. Gross profit,
expressed as a percentage of sales, increased to 32.0 percent in 1996 from 30.3
percent for the three month period in 1995. For the six month period ended June,
30, 1996, the gross profit increased to 32.7 percent from 30.8 percent for the
same period in 1995. The gross profit improvement is primarily due to lower
costs of raw material, principally plastic resins, used in the manufacturing
segment.
Operating expenses increased $692,638 or 4.5 percent for the three
month period and $1,213,310 or 4.0 percent for the six month period ended June
30, 1996, compared to the same periods in 1995. Operating expenses, expressed as
a percentage of sales, decreased to 20.1 percent from 20.3 percent for the three
month period compared to the previous year. For the six month period ended June
30, 1996, the percentage decreased to 20.6 percent compared to 21.1 percent for
the same period in 1995 as a result of cost controls and greater fixed expense
coverage.
Interest expense for the three month period ended June 30, 1996
decreased to $84,774 from $148,529 in 1995 reflecting lower average borrowing
levels in the current period. For the six month period interest expense
increased to $254,312 in 1996 from $247,964 in 1995 based on the higher debt
levels and interest rates in effect during the first quarter of 1996.
Income taxes, expressed as a percentage of income before income taxes,
were 40.8 percent for the three months ended June 30, 1996 compared to 40.9
percent for the same period in 1995. The effective tax rate for the six months
ended June 30, 1996 increased slightly to 41.0 percent from 40.7 percent in 1995
reflecting an increase in non-deductible amortization expense.
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LIQUIDITY AND CAPITAL RESOURCES
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Cash provided by operating activities is the primary source of
liquidity and amounted to $20,097,553 for the six months ended June 30, 1996.
Long-term debt was reduced by $8,888,394 during the first six months of 1996 and
debt as a percentage of total capitalization decreased to 3.4 percent compared
to 9.0 percent at December 31, 1995. Working capital decreased to $66,696,892 at
June 25, 1996 from $68,715,271 at December 31, 1995.
Capital expenditures for the six months ended June 30, 1996 were
$9,164,891. The Company currently anticipates annual capital expenditures in the
range of $15.0 to $20.0 million over the next five years, primarily for
increased polymer manufacturing capacity. Management believes that anticipated
cash flows from operations and available credit facilities will be sufficient to
fund capital expenditures and meet its short-term and long-term operating needs.
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PART II - OTHER INFORMATION
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MYERS INDUSTRIES, INC.
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Item 4. Submission of Matters to a Vote of Security Holders
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The Annual Meeting of Shareholders was held on April
25, 1996. At the Annual Meeting, the election of
eight Directors were voted upon. All of the Directors
nominated were elected. The results of this voting
are as follows:
Votes Votes
Name of Director For Withheld
Stephen E. Myers 14,822,535 20,078
Milton I. Wiskind 14,821,837 20,776
Edwin P. Schrank 14,820,519 22,094
Karl S. Hay 14,820,421 22,192
Richard P. Johnston 14,813,828 28,785
Richard L. Osborne 14,533,214 309,399
Jon H. Outcalt 14,821,266 21,347
Samuel Salem 14,816,555 26,058
Item 5. Exhibits and Reports on Form 8-K
(a) Exhibits
27 Financial Data Schedule
(b) Form 8-K
None
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.
August 13, 1996 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)