1
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 March 31, 1997
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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 ________________
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 (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 April 30, 1997, the number of shares outstanding of the issuer's
Common Stock was:
16,874,710
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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 MARCH 31, 1997 AND DECEMBER 31, 1996
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March 31, December 31,
ASSETS 1997 1996
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CURRENT ASSETS
Cash and temporary cash investments $7,534,793 $5,600,349
Accounts receivable-less allowances
of $2,228,000 and $2,213,000,
respectively 56,762,581 57,604,506
Inventories
Finished and in-process products 35,907,812 33,042,266
Raw materials and supplies 6,999,725 6,788,086
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42,907,537 39,830,352
Prepaid expenses 2,378,310 3,274,673
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TOTAL CURRENT ASSETS 109,583,221 106,309,880
OTHER ASSETS
Excess of cost over fair value of net
assets of companies acquired 14,207,270 14,328,410
Patents and other intangible assets 2,669,806 2,750,530
Other 2,540,644 3,072,974
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19,417,720 20,151,914
PROPERTY, PLANT & EQUIPMENT, AT COST
Land 2,410,409 2,547,509
Buildings and leasehold improvements 39,224,731 38,918,648
Machinery and equipment 115,708,334 108,594,273
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157,343,474 150,060,430
Less allowances for depreciation and
amortization 72,056,040 69,400,497
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85,287,434 80,659,933
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$214,288,375 $207,121,727
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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 MARCH 31, 1997 AND DECEMBER 31, 1996
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March 31, December 31,
LIABILITIES AND SHAREHOLDERS' EQUITY 1997 1996
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CURRENT LIABILITIES
Accounts payable $18,367,822 $15,189,488
Employee compensation and related
items 8,220,937 10,562,313
Accrued expenses
Taxes, other than income taxes 1,188,150 1,062,498
Income taxes 3,881,261 1,452,107
Other 7,991,174 8,066,838
Current portion of long-term debt 463,756 519,769
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TOTAL CURRENT LIABILITIES 40,113,100 36,853,013
LONG-TERM DEBT, less current portion 4,508,122 4,569,396
DEFERRED INCOME TAXES 3,253,791 3,254,327
SHAREHOLDERS' EQUITY
Serial Preferred Shares
(authorized 1,000,000) ----- -----
Common Shares, without par value
(authorized 30,000,000 shares;
outstanding 16,862,355 and
16,854,529, respectively) 10,790,881 10,659,714
Additional paid-in capital 109,864,137 109,864,137
Foreign currency translation
adjustment (341,753) (213,572)
Retained income 46,100,097 42,134,712
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166,413,362 162,444,991
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$214,288,375 $207,121,727
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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 MARCH 31, 1997 AND 1996
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March 31, March 31,
1997 1996
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Net sales $76,798,621 $72,554,256
Costs and expenses
Cost of sales 52,711,406 48,204,214
Operating expenses 15,930,546 15,307,569
Interest expense, net 7,166 169,538
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Total costs & expenses 68,649,118 63,681,321
Income before income taxes 8,149,503 8,872,935
Income taxes 3,341,000 3,658,000
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Net income $4,808,503 $5,214,935
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Net income per common share $.29 $.31
Dividends per common share $.05 $.04
Weighted average number of
common shares outstanding 16,860,399 16,919,909
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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 THREE MONTHS ENDED MARCH 31, 1997 AND 1996
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March 31, March 31,
1997 1996
CASH FLOWS FROM OPERATING ACTIVITIES -------------- -------------
Net income $4,808,503 $5,214,935
Items not affecting use of cash
Depreciation 2,891,801 2,591,579
Amortization of excess of cost over fair
value of net assets of companies acquired 121,140 138,840
Amortization of other intangible assets 113,559 90,612
Cash flow provided by (used for) working capital
Accounts receivable 841,925 628,037
Inventories (3,077,185) 834,422
Prepaid expenses 878,864 (41,851)
Accounts payable and accrued expenses 3,316,100 3,502,614
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Net cash provided by operating activities 9,894,707 12,959,188
CASH FLOWS FROM INVESTING ACTIVITIES
Additions to property, plant and
equipment, net (7,519,301) (4,416,457)
Other 388,276 (66,479)
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Net cash used for investing activities (7,131,025) (4,482,936)
CASH FLOWS FROM FINANCING ACTIVITIES
Borrowings (repayments) - net (117,287) (6,846,593)
Cash dividends paid (843,118) (677,053)
Proceeds from issuance of common stock 131,167 286,226
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Net cash provided by (used for) financing activities (829,238) (7,237,420)
INCREASE IN CASH AND TEMPORARY
CASH INVESTMENTS 1,934,444 1,238,832
CASH AND TEMPORARY CASH INVESTMENTS
JANUARY 1 5,600,349 3,387,562
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CASH AND TEMPORARY CASH INVESTMENTS
MARCH 31 $7,534,793 $4,626,394
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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 March 31, 1997, and the results
of operations and cash flows for the three months ended March 31, 1997 and 1996.
(2) Supplemental Disclosure of Cash Flow Information
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The Company made cash payments for interest expense of $145,202 and
$396,982 for the three months ended March 31, 1997 and 1996, respectively. Cash
payments for income taxes were $1,021,198 and $1,269,618 for the three months
ended March 31, 1997 and 1996, respectively.
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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 March 31, 1997 increased
$4,244,365 or 5.8 percent which is primarily attributed to volume increases in
the Company's distribution business segment.
Cost of sales for the three month period ended March 31, 1997 increased
$4,507,192 or 9.4 percent as compared to the same period in 1996. Gross profit,
expressed as a percentage of sales, decreased to 31.4 percent in 1997 from 33.6
percent in the same year ago period. This decrease is attributable to higher raw
material costs, primarily plastic resins.
Operating expenses increased $622,977 or 4.1 percent for the three
month period in 1997 as compared to the same period in 1996. Expressed as a
percentage of sales, operating expenses decreased to 20.7 percent in 1997 from
21.1 percent for the three month period in 1996. This improvement reflects
on-going cost control programs and better fixed expense coverage.
Net interest expense for the three month period ended March 31, 1997
decreased to $7,166 from $169,538 in 1996. The decrease is the result of lower
average borrowing levels in the current year.
Income taxes, expressed as a percentage of income before income taxes,
decreased from 41.2 percent for the three month period in 1996 to 41.0 percent
in 1997.
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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 $9,894,707 for the three months ended March 31, 1997.
Long-term debt was reduced by $117,287 during the first three months of 1997 and
debt as a percentage of total capitalization decreased to 2.9 percent compared
to 3.0 percent at December 31, 1996. Working capital increased to $69,470,121 at
March 31, 1997 from $69,456,867 at December 31, 1996.
Capital expenditures for the three months ended March 31, 1997 were
$7,519,302. 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 6 Exhibits and Reports on Form 8-K
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(a) Exhibits
(3)(ii) Amended and Restated Code of Regulations
(10) Wiskind Supplemental Compensation Agreement
(27) Financial Data Schedule (filed only electronically with
the SEC)
(b) Form 8-K
None
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.
5/14/97 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)