<PAGE> 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 SEPTEMBER 30, 1996
-----------------------------------------
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.
------------------------------------------------------
(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
- --------------------------------------------------------------------------------
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE (330) 253-5592
-----------------------------
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, 1996, THE NUMBER OF SHARES OUTSTANDING OF THE
ISSUER'S COMMON STOCK WAS:
16,922,417
==========
<PAGE> 2
-1-
PART I - FINANCIAL INFORMATION
---------------------------------
MYERS INDUSTRIES, INC.
--------------------------
<TABLE>
CONDENSED STATEMENT OF CONSOLIDATED FINANCIAL POSITION
AS OF SEPTEMBER 30, 1996 AND DECEMBER 31, 1995
-------------------------------------------------------
<CAPTION>
September 30, December 31,
ASSETS 1996 1995
- ----------- ------------- ------------
CURRENT ASSETS
<S> <C> <C>
Cash and temporary cash investments $ 4,669,129 $ 3,387,562
Accounts receivable-less allowances
of $2,055,000 and $1,594,000,
respectively 53,538,276 52,501,016
Inventories
Finished and in-process products 32,328,113 34,614,735
Raw materials and supplies 6,143,794 6,635,012
------------- -------------
38,471,907 41,249,747
Prepaid expenses 2,458,142 3,948,972
------------- -------------
TOTAL CURRENT ASSETS 99,137,454 101,087,297
OTHER ASSETS
Excess of cost over fair value of net
assets of companies acquired 16,598,838 17,015,358
Patents and other intangible assets 2,815,009 2,924,256
Other 2,997,026 3,147,213
------------- -------------
22,410,873 23,086,827
PROPERTY, PLANT & EQUIPMENT, AT COST
Land 2,485,783 1,989,508
Buildings and leasehold improvements 36,440,790 35,325,705
Machinery and equipment 104,959,388 93,646,662
------------- -------------
143,885,961 130,961,875
Less allowances for depreciation and
amortization 68,863,040 61,532,126
------------- -------------
75,022,921 69,429,749
------------- -------------
$ 196,571,248 $ 193,603,873
============= =============
</TABLE>
<PAGE> 3
-2-
PART I - FINANCIAL INFORMATION
------------------------------------------------------
MYERS INDUSTRIES, INC.
--------------------------------------
<TABLE>
CONDENSED STATEMENT OF CONSOLIDATED FINANCIAL POSITION
AS OF SEPTEMBER 30, 1996 AND DECEMBER 31, 1995
------------------------------------------------------
<CAPTION>
September 30, December 31,
LIABILITIES AND SHAREHOLDERS' EQUITY 1996 1995
- ------------------------------------ ------------- ------------
CURRENT LIABILITIES
<S> <C> <C>
Accounts payable $ 15,812,471 $ 11,865,636
Employee compensation and related
items 8,862,389 9,736,457
Accrued expenses
Interest 12,422 182,262
Taxes, other than income taxes 1,290,999 1,160,766
Income taxes (2,163,424) 1,068,474
Other 7,085,954 7,382,327
Current portion of long-term debt 485,471 976,104
------------- ------------
TOTAL CURRENT LIABILITIES 31,386,282 32,372,026
LONG-TERM DEBT, less current portion 4,647,251 13,335,191
DEFERRED INCOME TAXES 2,713,199 2,713,106
SHAREHOLDERS' EQUITY
Serial Preferred Shares -0- -0-
(authorized 1,000,000)
Common Shares, without par value 10,568,267 10,014,186
(authorized 30,000,000 shares;
outstanding 16,933,634 and
16,906,019, respectively)
Additional paid-in capital 111,119,956 111,382,116
Foreign currency translation
adjustment (372,615) (393,840)
Retained income 36,508,908 24,181,088
------------- ------------
157,824,516 145,183,550
------------- ------------
$196,571,248 $193,603,873
============= ============
</TABLE>
<PAGE> 4
-3-
PART I - FINANCIAL INFORMATION
------------------------------
MYERS INDUSTRIES, INC.
----------------------
<TABLE>
<CAPTION>
CONDENSED STATEMENT OF CONSOLIDATED INCOME
------------------------------------------------------
FOR THE THREE FOR THE NINE
MONTHS ENDED MONTHS ENDED
-------------------------- ---------------------------
September 30, September 30, September 30, September 30,
1996 1995 1996 1995
----------- ----------- ------------ ------------
<S> <C> <C> <C> <C>
Net sales $77,879,982 $74,650,879 $230,385,397 $217,735,842
Costs and expenses
Cost of sales 55,207,594 52,523,640 157,774,466 151,533,914
Operating expenses 16,337,585 16,226,278 47,681,893 46,357,276
Interest expense, net 47,556 306,837 301,868 554,801
----------- ----------- ------------ ------------
Total costs & expenses 71,592,735 69,056,755 205,758,227 198,445,991
Income before
income taxes 6,287,247 5,594,124 24,627,170 19,289,851
Income taxes 2,578,000 2,277,000 10,097,000 7,851,000
----------- ----------- ------------ ------------
Net income $ 3,709,247 $ 3,317,124 $ 14,530,170 $ 11,438,851
=========== =========== ============ ============
Net income per
Common Share $.22 $.20 $.86 $.68
Dividends per
Common Share $.05 $.04 $.13 $.11
Weighted average
number of Common
Shares outstanding 16,944,873 16,877,705 16,934,546 16,864,258
</TABLE>
<PAGE> 5
<TABLE>
-4-
PART I - FINANCIAL INFORMATION
------------------------------
MYERS INDUSTRIES, INC.
----------------------
STATEMENTS OF CONSOLIDATED CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995
-----------------------------------------------------
<CAPTION>
September 30, September 30,
1996 1995
CASH FLOWS FROM OPERATING ACTIVITIES -------------- --------------
<S> <C> <C>
Net income $14,530,170 $11,438,851
Items not affecting use of cash
Depreciation 8,046,707 7,747,901
Amortization of excess of cost over fair
value of net assets of companies acquired 416,520 281,520
Amortization of other intangible assets 357,752 232,875
Cash flow provided by (used for) working capital
Accounts receivable (1,037,260) 5,178,351
Inventories 2,777,840 (2,037,247)
Prepaid expenses 1,438,333 999,027
Accounts payable and accrued expenses (495,111) (9,997,770)
-------------- --------------
Net cash provided by operating activities 26,034,951 13,843,508
CASH FLOWS FROM INVESTING ACTIVITIES
Additions to property, plant and
equipment, net (13,639,879) (7,102,954)
Acquisition of business, net of cash acquired -0- (14,519,740)
Other (24,503) 639,923
-------------- --------------
Net cash used for investing activities (13,664,382) (20,982,771)
CASH FLOWS FROM FINANCING ACTIVITIES
Borrowings to finance acquisition -0- 13,000,000
Borrowings (repayments) - net (9,178,573) (2,035,461)
Cash dividends paid (2,202,350) (1,911,577)
Proceeds from issuance of common stock 564,993 550,501
Repurchases of common stock (273,072) -0-
-------------- --------------
Net cash provided by (used for) financing activities (11,089,002) 9,603,463
INCREASE IN CASH AND TEMPORARY
CASH INVESTMENTS 1,281,567 2,464,200
CASH AND TEMPORARY CASH INVESTMENTS
JANUARY 1 3,387,562 1,794,703
-------------- --------------
CASH AND TEMPORARY CASH INVESTMENTS
SEPTEMBER 30 $4,669,129 $4,258,903
============== ==============
</TABLE>
<PAGE> 6
-5-
PART I - FINANCIAL INFORMATION
------------------------------
MYERS INDUSTRIES, INC.
----------------------
NOTES TO FINANCIAL STATEMENTS
-----------------------------
(1) Statement of Accounting Policy
------------------------------
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, 1996 and December
31, 1995, and the results of operations and cash flows for the nine months ended
September 30, 1996 and 1995.
(2) Supplemental Disclosure of Cash Flow Information
------------------------------------------------
The Company made cash payments for interest expense of $135,583 and
$205,198 for the three months ended September 30, 1996 and 1995, respectively.
Cash payments for interest expense were $653,239 and $568,583 for the nine
months ended September 30, 1996 and 1995, respectively. Cash payments for income
taxes for the nine months ended September 30, 1996 and September 30, 1995 were
$3,616,502 and $2,928,379, respectively. For the nine month period the payments
for income taxes were $13,328,805 for 1996 and $9,033,824 for 1995.
<PAGE> 7
-6-
PART I - FINANCIAL INFORMATION
------------------------------
MYERS INDUSTRIES, INC.
----------------------
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
---------------------------------------------
RESULTS OF OPERATIONS
- ---------------------
Net sales for the three months ended September 30, 1996 increased
$3,229,103 or 4.3 percent which is primarily attributed to volume increase in
the Company's distribution segment. Net sales for the nine months ended
September 30, 1996 increased $12,649,555 or 5.8 percent due mainly to the
inclusion of Ameri-Kart Corp., acquired in June 1995, for the nine month period
as compared to only three months in 1995.
Cost of sales for the three month period ended September 30, 1996
increased $2,683,954 or 5.1 percent and $6,240,552 or 4.1 percent for the nine
month period ended September 30, 1996. Gross profit, expressed as a percentage
of sales, decreased to 29.1 percent in 1996 from 29.6 percent for the three
month period in 1995. This decrease is attributable to higher raw material costs
as well as expenses associated with the start up of a new manufacturing
facility. For the nine month period ended September 30, 1996, the gross profit
percentage increased to 31.5 percent from 30.4 percent in 1995, primarily due to
lower average costs for plastic resins used in the manufacturing segment during
the first six months of the current year.
Operating expenses increased $111,307 or .7 percent for the three month
period and $1,324,617 or 2.9 percent for the nine month period ended September
30, 1996, compared to the same periods in 1995. Operating expenses, expressed as
a percentage of sales, decreased to 21.0 percent from 21.7 percent for the three
month period and 20.7 percent compared to 21.3 percent for the nine month period
ended September 30. This improvement reflects on-going cost control programs and
better fixed expense coverage.
Interest expense for the three month period ended September 30, 1996
decreased to $47,557 from $306,837 in 1995 reflecting lower average borrowing
levels in the current period. For the nine month period interest expense
decreased to $301,868 in 1996 from $554,801 in 1995.
Income taxes, expressed as a percentage of income before income taxes,
were 41.0 percent for the three months ended September 30, 1996 compared to 40.7
percent for the same period in 1995. The effective tax rate for the nine months
ended September 30, 1996 increased slightly to 41.0 percent from 40.7 percent in
1995 reflecting an increase in non-deductible amortization expense.
<PAGE> 8
-7-
LIQUIDITY AND CAPITAL RESOURCES
- -------------------------------
Cash provided by operating activities is the primary source of
liquidity and amounted to $26,034,951 for the nine months ended September 30,
1996. Long-term debt was reduced by $9,178,573 during the first nine months of
1996 and debt as a percentage of total capitalization decreased to 3.1 percent
compared to 9.0 percent at December 31, 1995. Working capital decreased to
$67,751,172 at September 30, 1996 from $68,715,271 at December 31, 1995.
Capital expenditures for the nine months ended September 30, 1996 were
$13,639,879. 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.
<PAGE> 9
-8-
PART II - OTHER INFORMATION
---------------------------
MYERS INDUSTRIES, INC.
----------------------
Item 6 Exhibits and Reports on Form 8-K
--------------------------------
(a) 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.
Date 11-8-96 By: \s\ Gregory J. Stodnick
- ------------ -----------------------
Gregory J. Stodnick
Vice President-Finance
Financial Officer (Duly
Authorized Officer and
Principal Financial and
Accounting Officer)
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> SEP-30-1996
<CASH> 4,669,129
<SECURITIES> 0
<RECEIVABLES> 55,593,276
<ALLOWANCES> 2,055,000
<INVENTORY> 38,471,907
<CURRENT-ASSETS> 99,137,454
<PP&E> 143,885,961
<DEPRECIATION> 68,863,040
<TOTAL-ASSETS> 196,571,248
<CURRENT-LIABILITIES> 31,386,282
<BONDS> 0
<COMMON> 10,568,267
0
0
<OTHER-SE> 147,256,249
<TOTAL-LIABILITY-AND-EQUITY> 196,571,248
<SALES> 230,385,397
<TOTAL-REVENUES> 230,385,397
<CGS> 157,774,466
<TOTAL-COSTS> 183,581,037
<OTHER-EXPENSES> 21,811,815
<LOSS-PROVISION> 636,540
<INTEREST-EXPENSE> 496,404
<INCOME-PRETAX> 24,627,170
<INCOME-TAX> 10,097,000
<INCOME-CONTINUING> 14,530,170
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 14,530,170
<EPS-PRIMARY> .86
<EPS-DILUTED> .86
</TABLE>
