<PAGE> 1
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1999
COMMISSION FILE NUMBER 1-8524
MYERS INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
OHIO 34-0778636
(State or other jurisdiction of (IRS Employer Identification Number)
incorporation or organization)
</TABLE>
<TABLE>
<S> <C> <C>
1293 S. MAIN STREET, AKRON, OHIO 44301 (330) 253-5592
(Address of Principal Executive (Zip Code) (Telephone Number)
Offices)
</TABLE>
<TABLE>
<S> <C>
Securities registered pursuant to Name of each exchange
Section 12(b) of the Act: on which registered:
COMMON STOCK, WITHOUT PAR VALUE AMERICAN STOCK EXCHANGE
(Title of Class)
</TABLE>
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT: None
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 (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to the
filing requirements for at least the past 90 days. Yes [X] No [ ]
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]
State the approximate aggregate market value of the voting stock held by
non-affiliates of the registrant as of February 29, 2000: $251,184,413. Indicate
the number of shares outstanding of registrant's common stock as of February 29,
2000: 19,814,766 Shares of Common Stock, without par value.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE> 2
DOCUMENTS INCORPORATED BY REFERENCE
(1) Portions of Registrant's Notice of 2000 Annual Meeting and Proxy Statement,
dated March 15, 2000, in Part III (Items 10, 11, 12 and 13)
CROSS REFERENCE SHEET
PURSUANT TO FORM 10-K GENERAL INSTRUCTION G(4)
<TABLE>
<CAPTION>
PART/ITEM FORM 10-K HEADING REFERENCE MATERIAL
- --------- ----------------- ------------------
<C> <S> <C>
III/10 Directors and Executive Officers of the Registrant....... Proxy Statement(1)
pages 3 through 8
III/11 Executive Compensation................................... Proxy Statement
pages 9 through 13
III/12 Security Ownership of Certain Beneficial Owners and
Management............................................... Proxy Statement
pages 3 through 8,
page 11, and page 14
III/13 Certain Relationships and Related Transactions........... Proxy Statement
page 8
</TABLE>
- ---------------
(1) Registrant's Notice of 2000 Annual Meeting of Shareholders and Proxy
Statement
<PAGE> 3
PART I
ITEM 1. BUSINESS
(A) GENERAL DEVELOPMENT OF BUSINESS
Myers Industries, Inc. (Company) in 1999 completed the most successful year
in the Company's history. Net sales and net income were at record levels for
both the fourth quarter and the year ended December 31, 1999.
Net sales for the fourth quarter were $166.6 million, up 51 percent from
the same period last year. Net income of $9.8 million increased 7 percent, and
net income per share of $.49 was up 9 percent.
For the year, net sales were $580.8 million, up 48 percent over 1998
results. Net income of $31.2 million increased 9 percent, and net income per
share of $1.55 increased 9 percent from the $1.42 earned in 1998. During the
year we invested more than $27 million in capital additions and additional funds
of $214 million were used to make business acquisitions.
In February 1999 we acquired all of the shares of the entities comprising
Allibert Equipment, the material handling division of Sommer Allibert S.A., and
acquired Allibert-Contico LLC, a joint venture between Sommer Allibert S.A. and
Contico International, Inc., for a total purchase price of approximately $150
million. The acquired business have five manufacturing facilities in France,
Spain, the United Kingdom and the United States and had 1998 sales of
approximately $145 million. In August, we acquired substantially all of the
assets of Dillen Products of Middlefield, Ohio for approximately $54 million and
all of the outstanding shares of Listo Products of Canada for approximately $15
million. Dillen and Listo are leading manufacturers of plastic planters, trays,
pots, bowls and hanging baskets for customers including greenhouses and
nurseries as well as retail garden centers and mass merchandisers. In fiscal
1998, Dillen and Listo had sales of approximately $40 million and $12 million,
respectively.
(B) FINANCIAL INFORMATION ABOUT INDUSTRY SEGMENTS
The response to this section of Item 1 is contained in the Industry
Segments footnote of the Notes to Consolidated Financial Statements under Item 8
of this report.
(C) DESCRIPTION OF BUSINESS
The Company conducts its business activities in two segments, Manufacturing
and Distribution. For the fiscal year ended December 31, 1999, the Manufacturing
Segment generated approximately 73% of sales, while the Distribution Segment
contributed approximately 27% of sales.
Our Manufacturing Segment designs, manufactures, and markets a variety of
plastic and rubber products, ranging from plastic material handling containers
and storage boxes to rubber OEM parts and tire repair materials. These products
are made through a variety of molding processes in 23 facilities located
throughout North America and Europe.
Our Distribution Segment is engaged in the distribution of tools,
equipment, and supplies used for tire and wheel service and automotive underbody
repair. The Distribution Segment operates through 42 branches located in major
cities throughout the United States and in foreign countries through export and
businesses in which we hold an equity interest.
OUR MANUFACTURING SEGMENT
In our Manufacturing Segment, we design, manufacture, and market more than
10,500 products from plastic and rubber. We currently operate 16 manufacturing
facilities in the United States, six in Western Europe and one in Canada. Our
manufactured plastic and rubber products are sold nationally and internationally
by a direct sales force and through independent sales representatives.
1
<PAGE> 4
KEY MANUFACTURED PRODUCT AREAS
- Reusable Plastic Material Handling Containers
- Plastic Planters
- Home Storage & Organization Products
- Plastic Storage Tanks
- Waste Collection and Material Handling Carts
- Rubber OEM & Replacement Parts
- Tire Repair & Retreading Products
- Calendered Rubber Sheet Stock
- Reflective Highway Marking Products
PRODUCT BRANDS
- AC Buckhorn
- Akro-Mils
- Allibert Equipement
- Ameri-Kart
- Buckhorn Rubber
- Dillen
- Listo
- Patch Rubber
- raaco
MANUFACTURING CAPABILITIES
- Plastic & Rubber Injection Molding
- Compression Molding
- Winding Extrusion
- Vacuum Forming
- Rotational Molding
- Rubber Compounding & Calendering
- Rubber-to-Metal Bonding
REPRESENTATIVE MARKETS
- Agriculture
- Automotive
- Chemical
- Construction
- Consumer
- Food Processing & Distribution
- Healthcare
- Horticulture
- Marine
- Telecommunications
- Tire Repair & Retread
- Transportation
- Waste Collection
- Water Control
Our largest product line is reusable plastic material handling containers.
These products help customers efficiently and economically move products and
reduce solid waste in closed-loop distribution systems. We are one of the
leading manufacturers of these material handling products, which include
collapsible bulk boxes, hand-held containers and trays, small parts bins,
pallets, and a variety of other specialty items. We believe that we are one of
the few manufacturers positioned to supply material handling product solutions
to customers worldwide.
2
<PAGE> 5
Our material handling products are utilized for shipping and handling a
wide range of industrial and commercial items, including automotive, appliance,
and electronic components; food products such as meat, poultry, and produce;
bulk seed and feed; health and beauty care products; apparel and textiles; and
hardware. These products deliver specific cost-saving and productivity benefits
to our customers. At the Saturn plant in Springhill, Tennessee, our containers
and pallets are reused hundreds of times to carry fasteners and bumpers from
suppliers directly to the assembly area, reducing the scrap rate and eliminating
costly solid waste from cardboard boxes and wood pallets. Chicken delivered to
KFC restaurants across the United States comes in the reusable container that we
pioneered; the container better protects the chicken during transport and is
more sanitary than cardboard boxes. Our plastic bins are used on assembly lines,
at distribution centers, and in retail outlets throughout the world to organize
small parts and other items.
Growers, retailers, and consumers use our plastic planters and trays to
create plant and floral displays. We manufacture a broad line of indoor/outdoor
decorative planters, pots, bowls, window boxes, urns, and grower containers and
trays; we are also North America's largest producer of hanging baskets. These
items serve the needs of the grower at greenhouses and nurseries, as well as
retail garden centers, home centers, and mass merchandisers such as Target(R),
K-Mart(R), and Wal-Mart(R).
For consumers, we adapt storage solutions for industry to home and office
settings. Our popular KeepBox(TM)containers help consumers organize everything
from holiday decorations to school supplies. Storage organizers and cabinets
provide efficient storage for small items and accessories in the home workshop
or at the office. Hobbyists and craftsmen use our popular CraftDesign(TM)
products for efficient, portable storage of craft, sewing, and art supplies.
Part of our product line is plastic storage tanks used for storage and
transport of a wide variety of solid and liquid materials. These tanks are
produced in the United States using rotational molding and in Europe with both
winding extrusion and rotational molding. Our extruded tanks are primarily used
for storage in industries such as chemical and water treatment and are an
effective alternative to stainless steel tanks, giving customers the same
performance for a lower price. For industries such as agriculture, plastics, and
food, our roto-molded tanks are commonly used as intermediate bulk containers
(IBCs), transporting material from one location to another or as a temporary
storage vessel; these uses are often "returnable" applications, in which the
tanks can be reused for multiple round trips in a closed loop distribution
system.
We manufacture plastic carts used in material handling and waste
collection. Manufacturers apply our carts and dumpers for in-plant transport of
products and scrap. More than 600 municipalities use the carts for residential
waste collection.
From seals for water supply lines to hood latches and air hose assemblies
for trucks, our engineered, molded OEM and replacement parts meet precise
specifications for the waterworks, agriculture, transportation, and civil
construction industries. Specialized manufacturing expertise enables us to
create a range of specific-performance custom rubber products, including
rubber-to-metal bonded items used in marine and maintenance equipment, water
control, and environmental applications.
More than 50 years ago we started making tire patches. We now offer the
most comprehensive line of tire repair and retreading products in the United
States. To service the nearly 221 million damaged tires that occur each year, we
make all the materials and products customers need to perform safe and
profitable tire repairs: the plug that fills a puncture, the cement that seats
the plug, the tire innerliner patch, and the final sealing compound. Our
products are used to repair the smallest puncture in passenger tires and the
most severe tear in large, off-the-road tires.
Our calendered rubber sheet stock is used in many applications. The
telecommunications industry splices cabling with our specialty tapes. In the
mining industry, our materials are used to create linings for material handling
conveyor systems. Another of our custom sheet stocks is used as the base
material to produce the world's top-selling line of golf grips, "Golf Pride(R)".
We have applied our rubber calendering and compounding expertise to create
reflective marking products for the road repair and construction industry.
Transportation professionals use our reflective tape striping, symbols, and
legends for marking roadways, intersections, and hazardous areas. Our tape stock
is easier to
3
<PAGE> 6
apply, more reflective, and longer lasting than paint. We make the tape in both
temporary and permanent grades.
The Company's Manufacturing business is dependent upon outside suppliers
for raw materials, principally polyethylene, polypropylene, polystyrene and
synthetic and natural rubber. We believe that the loss of any one supplier or
group of suppliers would not have a materially adverse effect on our business,
since in most instances identical or similar materials are readily obtainable
from other suppliers.
OUR DISTRIBUTION SEGMENT
In our Distribution Segment, we are the largest distributor of tools,
equipment, and supplies to tire, wheel, and automotive underbody service
specialists in the United States. We buy and sell nearly 10,000 different tool,
equipment, and supply items -- ranging from computerized alignment systems and
tire balancers to tire patches, repair cement, and small hand tools. Our
customers rely on Myers as the one-stop shop for everything from a $.15 valve
cap to a $45,000 computerized tire alignment system to meet their tire
balancing, repair, and alignment needs.
KEY DISTRIBUTION PRODUCTS
- Tire Valves & Accessories
- Tire Changing & Balancing Equipment
- Lifts & Alignment Equipment
- Service Equipment & Tools
- Tire Repair/Retread Equipment & Supplies
PRODUCT BRAND
- Myers Tire Supply
CAPABILITIES
- Local Sales & Inventory
- International Distribution
- Broad Sales Coverage
- Personalized Service
- Customer Product Training
- National Accounts
- 66 Years of Expertise in Tire Repair & Retreading
REPRESENTATIVE MARKETS
- Retail Tire Dealers
- Truck Tire Dealers
- Auto Dealers
- Commercial Auto & Truck Fleets
- Tire Retreaders
- General Repair Facilities
Within the continental United States, we provide widespread distribution
and sales coverage from 42 branches in 31 states. Each branch operates as a
profit center and is staffed by a branch manager, salespeople, office,
warehouse, and delivery personnel.
Internationally, we have five wholly owned warehouse distributors located
in Canada and Central America. We also own interests in several foreign
warehouse distributors. Sales personnel from our Akron, Ohio headquarters cover
the Far East, Middle East, South Pacific and South American territories.
We buy products from top suppliers to ensure quality is delivered to our
customers. Each of the brand-name products we sell is associated with superior
performance in its respective area. Some of these leading brands include:
Chicago Pneumatic air tools; Hennessy tire changing, balancing, and alignment
equipment; Corghi tire changers and balancers; Ingersoll-Rand air service
equipment; John Bean Co. tire balancing and
4
<PAGE> 7
changing equipment; our own Patch Rubber brand tire patches, cements, and repair
supplies; and Rotary lifts and related equipment.
An essential element of our success in the Distribution segment is our 180
sales representatives, who deliver personalized service on a local level.
Customers rely on Myers' sales representatives to introduce the latest tools and
technologies and provide training in new product features and applications.
Representatives also teach the proper use of diagnostic equipment, and present
on-site workshops demonstrating industry approved techniques for tire repair and
undercar service.
COMPETITION
Competition in the Manufacturing business is substantial and varied in form
and size from manufacturers of similar products and of other products which can
be readily substituted for those produced by the Company. Competition in the
Distribution business is generally from local and regional businesses.
EMPLOYEES
As of December 31, 1999 the Company had a total of 4,152 full-time and
part-time employees. Of these employees, 3,408 were engaged in the Manufacturing
business, 649 were employed in the Distribution business and 95 were employed at
the Company's Corporate offices. Approximately 9% of the Company's employees are
members of unions, however, in certain countries in which the Company operates
union membership is not known due to confidentiality laws. The Company believes
it has a good relationship with its union employees.
(D) FINANCIAL INFORMATION ABOUT FOREIGN AND DOMESTIC OPERATIONS AND EXPORT
SALES
The Response to this section of Item 1 is contained in the Industry
Segments footnote of the Notes to Consolidated Financial Statements under Item 8
of this Report.
ITEM 2. PROPERTIES
The following table sets forth by segment certain information with respect
to properties owned by the Registrant:
DISTRIBUTION:
<TABLE>
<CAPTION>
APPROXIMATE APPROXIMATE
FLOOR SPACE LAND AREA
PLANT LOCATION (SQUARE FEET) (ACRES) USE
-------------- ------------- ----------- ---
<S> <C> <C> <C>
Akron, Ohio....................... 129,000 8 Executive offices and warehousing
Akron, Ohio....................... 60,000 5 Warehousing
Akron, Ohio....................... 31,000 2 Warehousing
Pomona, California................ 17,700 1 Sales and distribution
Englewood, Colorado............... 9,500 1 Sales and distribution
San Antonio, Texas................ 4,500 1 Sales and distribution
Phoenix, Arizona.................. 8,200 1 Sales and distribution
Akron, Ohio....................... 8,000 1 Leased to non-affiliated party
Houston, Texas.................... 7,900 1 Sales and distribution
Indianapolis, Indiana............. 7,800 2 Sales and distribution
Cincinnati, Ohio.................. 7,500 1 Sales and distribution
York, Pennsylvania................ 7,400 3 Sales and distribution
Atlanta, Georgia.................. 7,000 1 Sales and distribution
Minneapolis, Minnesota............ 5,500 1 Sales and distribution
</TABLE>
5
<PAGE> 8
DISTRIBUTION:
<TABLE>
<CAPTION>
APPROXIMATE APPROXIMATE
FLOOR SPACE LAND AREA
PLANT LOCATION (SQUARE FEET) (ACRES) USE
-------------- ------------- ----------- ---
<S> <C> <C> <C>
Charlotte, North Carolina......... 5,100 1 Sales and distribution
Syracuse, New York................ 4,800 1 Sales and distribution
Franklin Park, Illinois........... 4,400 1 Sales and distribution
MANUFACTURING:
Gaillon, France................... 500,000 23 Manufacturing and distribution
Middlefield, Ohio................. 400,000 24 Manufacturing and distribution
Nykobing, Falster, Denmark........ 227,000 68 Manufacturing and distribution
Springfield, Missouri............. 227,000 19 Manufacturing and distribution
Dawson Springs, Kentucky.......... 209,000 36 Manufacturing and distribution
Wadsworth, Ohio................... 197,000 23 Manufacturing and distribution
Hannibal, Missouri................ 196,000 10 Manufacturing and distribution
Bluffton, Indiana................. 175,000 17 Manufacturing and distribution
Roanoke Rapids, North Carolina.... 172,000 20 Manufacturing and distribution
Shelbyville, Kentucky............. 160,000 8 Manufacturing and distribution
Bristol, Indiana.................. 139,000 12 Manufacturing and distribution
Akron, Ohio....................... 121,000 17 Manufacturing and distribution
Gloucester, England............... 118,000 3 Manufacturing and distribution
Dayton, Ohio...................... 85,000 5 Manufacturing and distribution
Palua De Plegamans, Spain......... 85,000 7 Manufacturing and distribution
Prunay, France.................... 71,000 4 Manufacturing and distribution
Goddard, Kansas................... 62,000 7 Manufacturing and distribution
Santa Perpetua De Mogoda, Spain... 61,000 3 Manufacturing and distribution
Fostoria, Ohio.................... 50,000 3 Manufacturing and distribution
Akron, Ohio....................... 49,000 6 Manufacturing and distribution
Surrey, B.C., Canada.............. 42,000 3 Manufacturing and distribution
Ontario, California............... 40,000 2 Distribution and warehousing
Mebane, North Carolina............ 30,000 5 Manufacturing and distribution
</TABLE>
The following table sets forth by segment certain information with respect
to facilities leased by the Registrant:
6
<PAGE> 9
MANUFACTURING:
<TABLE>
<CAPTION>
APPROXIMATE
FLOOR SPACE EXPIRATION DATE
LOCATION (SQUARE FEET) OF LEASE USE
-------- ------------- ------------------ ---
<S> <C> <C> <C>
Orbassano, Italy.................. 3,000 December 31, 2001 Sales and distribution
Wielselberg, Austria.............. 6,000 December 31, 2001 Sales and distribution
Stanton, Harcourt, England........ 12,000 December 31, 2001 Sales and distribution
Maia, Portugal.................... 13,000 November 25, 2000 Sales and distribution
Nivelles, Belgium................. 14,000 March 14, 2006 Sales and distribution
Pianezza, Italy................... 17,000 December 31, 2000 Sales and distribution
Milford, Ohio..................... 22,000 August 31, 2001 Sales and distribution
Nanterre Cedex, France............ 25,000 April 30, 2008 Administration and sales
Brampton, Ontario, Canada......... 43,000 September 30, 2005 Sales and distribution
Mulheim, Germany.................. 54,000 December 31, 2000 Sales and distribution
Droitwich, England................ 73,000 December 31, 2002 Sales and distribution
</TABLE>
- ---------------
The Registrant also leases distribution facilities in 32 locations
throughout the United States and Canada which, in the aggregate, amount to
approximately 167,000 square feet of warehouse and office space. All of these
locations are used by the distribution of aftermarket repair products and
services segment.
The Registrant believes that all of its properties, machinery and equipment
generally are well maintained and adequate for the purposes for which they are
used.
ITEM 3. LEGAL PROCEEDINGS
There are no material pending legal proceedings other than ordinary routine
litigation incidental to the Registrant's business.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
During the fourth quarter of the fiscal year ended December 31, 1999, there
were no matters submitted to a vote of security holders.
EXECUTIVE OFFICERS OF THE REGISTRANT
Set forth below is certain information concerning the executive officers of
the Registrant. Executive officers are elected annually by the Board of
Directors and serve at the pleasure of the Board.
<TABLE>
<CAPTION>
YEARS AS
NAME AGE EXECUTIVE OFFICER TITLE
---- --- ----------------- -----
<S> <C> <C> <C>
Stephen E. Myers................... 56 27 President and Chief Executive Officer
Milton I. Wiskind.................. 74 28 Senior Vice President and Secretary
Gregory J. Stodnick................ 57 20 Vice President -- Finance
</TABLE>
Each executive officer has been principally employed in the capacities
shown or similar ones with the Registrant for over the past five years.
Section 16(a) of the Securities Exchange Act of 1934 requires the
Registrant's Directors, certain of its executive officers and persons who own
more than ten percent of its Common Stock ("Insiders") to file reports of
ownership and changes in ownership with the Securities and Exchange Commission
and the American Stock Exchange, Inc., and to furnish the Company with copies of
all such forms they file. The
7
<PAGE> 10
Company understands from the information provided to it by the Insiders that
they adhered to all filing requirements.
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON STOCK AND RELATED STOCKHOLDER MATTERS
The Company's Common Stock is traded on the American Stock Exchange (ticker
symbol MYE). The approximate number of record holders at December 31, 1999 was
2,100. High and low stock prices and dividends for the last two years were:
<TABLE>
<CAPTION>
SALES PRICE
1999 -------------- DIVIDENDS
QUARTER ENDED HIGH LOW PAID
------------- ----- ----- ---------
<S> <C> <C> <C>
MARCH 31.......................................... 27.50 17.27 .05
JUNE 30........................................... 22.44 18.07 .05
SEPTEMBER 30...................................... 22.73 17.37 .06
DECEMBER 31....................................... 18.19 12.73 .06
</TABLE>
<TABLE>
<CAPTION>
SALES PRICE
1998 -------------- DIVIDENDS
QUARTER ENDED HIGH LOW PAID
------------- ----- ----- ---------
<S> <C> <C> <C>
March 31.......................................... 19.32 14.89 .045
June 30........................................... 22.73 18.07 .045
September 30...................................... 24.32 18.07 .055
December 31....................................... 26.08 18.24 .055
</TABLE>
8
<PAGE> 11
ITEM 6. SELECTED FINANCIAL DATA
MYERS INDUSTRIES, INC. AND SUBSIDIARIES
FIVE-YEAR SUMMARY
<TABLE>
<CAPTION>
1999 1998 1997 1996 1995
------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
OPERATIONS FOR THE YEAR
Net sales...................... $580,760,740 $392,019,900 $339,625,585 $320,943,771 $300,699,109
Cost and expenses
Cost of sales................ 367,635,460 256,506,103 232,376,615 219,152,386 206,050,902
Selling...................... 83,352,607 47,959,466 39,322,295 36,170,478 33,973,656
General and Administrative... 60,265,518 38,181,368 29,613,322 29,720,351 32,834,285
Interest -- net.............. 15,205,809 887,873 247,570 285,290 784,427
------------ ------------ ------------ ------------ ------------
526,459,394 343,534,810 301,559,802 285,328,505 273,643,270
------------ ------------ ------------ ------------ ------------
Income before income taxes... 54,301,346 48,485,090 38,065,783 35,615,266 27,055,839
Income taxes................. 23,125,000 19,806,000 15,727,000 14,612,000 11,087,000
------------ ------------ ------------ ------------ ------------
Net Income................... $ 31,176,346 $ 28,679,090 $ 22,338,783 $ 21,003,266 $ 15,968,839
------------ ------------ ------------ ------------ ------------
Net income per share*........ $ 1.55 $ 1.42 $ 1.10 $ 1.03 $ 0.78
------------ ------------ ------------ ------------ ------------
FINANCIAL POSITION -- AT YEAR END
Total Assets................. $600,409,632 $306,707,788 $224,077,922 $207,121,727 $193,603,873
------------ ------------ ------------ ------------ ------------
Current assets............... 206,990,990 153,650,201 107,426,627 106,309,880 101,087,297
Current liabilities.......... 102,244,419 51,233,510 39,643,522 36,853,013 32,372,026
------------ ------------ ------------ ------------ ------------
Working capital.............. 104,746,571 102,416,691 67,783,105 69,456,867 68,715,271
Other assets................. 203,923,134 43,614,594 26,100,386 20,151,914 23,086,827
Property, plant and
equipment -- net........... 189,495,508 109,442,993 90,550,909 80,659,933 69,429,749
Less:
Long-term debt............. 280,103,906 48,832,240 4,261,257 4,569,396 13,335,191
Deferred income taxes...... 10,314,490 3,953,185 3,496,196 3,254,327 2,713,106
------------ ------------ ------------ ------------ ------------
SHAREHOLDERS' EQUITY............. $207,746,817 $202,688,853 $176,676,947 $162,444,991 $145,183,550
------------ ------------ ------------ ------------ ------------
COMMON SHARES OUTSTANDING*....... 19,987,446 20,171,867 20,106,785 20,393,980 20,456,283
------------ ------------ ------------ ------------ ------------
BOOK VALUE PER COMMON SHARE*..... $ 10.39 $ 10.05 $ 8.79 $ 7.97 $ 7.10
------------ ------------ ------------ ------------ ------------
OTHER DATA
Dividends paid............... $ 4,626,471 $ 4,027,721 $ 3,529,921 $ 3,049,642 $ 2,577,154
Dividends paid per Common
Share*..................... 0.22 0.20 0.17 0.15 0.13
------------ ------------ ------------ ------------ ------------
Average Common Shares
Outstanding during the
year....................... 20,166,920 20,135,282 20,318,192 20,481,096 20,414,352
============ ============ ============ ============ ============
</TABLE>
- ---------------
* Adjusted for the ten percent stock dividends paid in August 1999; August,
1997; and August, 1995.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND
FINANCIAL CONDITION
1999 RESULTS OF OPERATIONS
Net sales for the year ended December 31, 1999, increased $188.7 million or
48 percent to a record $580.8 million. Sales in the Manufacturing segment
increased $188.2 million or 77 percent primarily due to the impact of acquired
companies. Excluding acquisitions, sales in the Manufacturing segment increased
6 percent primarily as a result of higher unit volumes. Sales in the
Distribution segment for 1999 were essentially unchanged from the prior year. On
a pro-forma basis, reflecting the acquired businesses as if they had been
included for the full fiscal years 1999 and 1998, total sales were up 7 percent
in the current year.
9
<PAGE> 12
Cost of sales increased $111.1 million or 43 percent reflecting the higher
sales levels; however, gross profit as a percentage of sales increased to 36.7
percent from 34.6 percent in the prior year as the Company experienced
improvements in both of its business segments. In the Manufacturing segment, the
impact of acquired companies and greater utilization of plant capacity provided
the improvements that offset higher raw material costs. In the Distribution
segment, margins improved as a result of increased sales on higher margin
supplies versus equipment.
Total operating expenses increased $57.5 million or 67 percent to $143.6
million for the year ended December 31, 1999. This increase is the result of
higher selling costs associated with the increase in sales combined with the
impact of acquired companies. Expressed as a percentage of sales, operating
expenses were 24.7 percent in 1999 compares with 22.0 percent in the prior year.
This reduction in operating expense leverage is primarily due to the different
operating expense structure of Allibert Equipement acquired during the current
year.
Net interest expense increased $14.3 million to $15.2 million for the year
ended December 31, 1999. This increase reflects the substantially higher
borrowing levels resulting from business acquisitions combined with slightly
higher rates.
Income taxes as a percent of income before taxes was 42.6 percent for 1999
compared to 40.8 percent in the prior year. The higher effective tax rate is
attributable to an increase in non-deductible amortization expense combined with
foreign tax rate differences.
1998 RESULTS OF OPERATIONS
Net sales for the year ended December 31, 1998 increased $52.4 million or
15 percent to $392.0 million. Sales in the Manufacturing segment increased $39.3
million or 19 percent with approximately 70 percent of the increase due to the
inclusion of acquired businesses. The increase in sales of the Company's
existing Manufacturing businesses reflects primarily higher unit volumes. Net
sales in the Distribution segment increased $14.2 million or 10 percent as a
result of higher unit volumes. The Company experienced significant pressure on
selling prices in both of its business segments, reflecting strong competition
and the impact of lower raw material costs.
Cost of sales increased $24.1 million or 10 percent reflecting the higher
sales level; however, gross profit as a percentage of sales increased to 34.6
percent in 1998 from 31.6 percent in the prior year. This improvement in gross
profit margin was primarily achieved in the Manufacturing segment based on lower
raw material costs and greater utilization of plant capacity.
Total operating expenses for 1998 increased $17.2 million or 25 percent to
$86.1 million. This increase reflects higher selling costs resulting from
greater sales volume and the additional operating costs of acquired companies.
Expressed as a percentage of sales, operating expenses were 22.0 percent in 1998
compared with 20.3 percent in the prior year. This reduction in operating
expense leverage is due to additional spending related to sales training and
education combined with the impact of acquired companies.
Net interest expense increased $640,303 due to higher borrowing levels
resulting from business acquisitions. Interest expense increased $1.8 million
based on the increase in average borrowings which was partially offset by an
increase in interest income of $1.2 million due to the existing financial
structure of acquired businesses.
The Company's effective tax rate decreased slightly to 40.8 percent from
41.3 percent.
FINANCIAL CONDITION
LIQUIDITY AND CAPITAL RESOURCES
In 1999, the Company generated cash from operating activities of $57.4
million compared to $42.3 million in the prior year. Investments in property,
plant, and equipment were $27.5 million and additional funds of $213.6 million
were used to make business acquisitions. As a result of this activity, long-term
debt increased
10
<PAGE> 13
$231.3 million and debt as a percentage of total capitalization increased to 58
percent. At December 31, 1999, the Company had working capital of $104.7 million
and a current ratio of 2.0 to 1.
At December 31, 1999, available borrowing under the Company's revolving
credit facility was approximately $49 million. In addition, there is an
uncommitted $25 million springing facility. During the next five years
management anticipates on-going capital expenditures in the range of $25 to $30
million annually. Cash flows from operations and funds available under existing
credit facilities will provide the Company's primary source of future financing.
Management believes that it has sufficient financial resources to meet
anticipated business requirements in the foreseeable future, including capital
expenditures, dividends, working capital, and debt service.
FORWARD LOOKING INFORMATION
Statements contained in this report concerning the Company's goals,
strategies, and expectations for business and financial results may be
"forward-looking statements" within the meaning of the Private Securities
Litigation Reform Act of 1995 and are based on current indicators and
expectations. These statements involve a number of risks and uncertainties that
could cause actual results to differ materially from those expressed or implied
in the applicable statements. Such risks include, but are not limited to,
fluctuations in product demand, market acceptance, general economic conditions
in domestic and international markets, competition, difficulties in
manufacturing operations, raw material availability, and others.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
SUMMARIZED QUARTERLY RESULTS OF OPERATIONS
(UNAUDITED) THOUSANDS OF DOLLARS, EXCEPT PER SHARE DATA
<TABLE>
<CAPTION>
MARCH 31 JUNE 30 SEPT. 30 DEC. 31 TOTAL
QUARTER ENDED 1999 -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
NET SALES.................. $126,746 $147,643 $139,769 $166,603 $580,761
GROSS PROFIT............... 47,227 54,151 48,255 63,492 213,125
NET INCOME................. 8,268 9,167 3,966 9,775 31,176
PER SHARE.................. .41 .45 .20 .49 1.55
</TABLE>
<TABLE>
<CAPTION>
MARCH 31 JUNE 30 SEPT. 30 DEC. 31 TOTAL
QUARTER ENDED 1998 -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Net Sales.................. $ 88,191 $101,115 $ 92,196 $110,518 $392,020
Gross Profit............... 30,616 34,827 30,481 39,590 135,514
Net Income................. 6,990 7,598 4,918 9,173 28,679
Per Share.................. .35 .38 .24 .45 1.42
</TABLE>
11
<PAGE> 14
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
We have audited the accompanying statements of consolidated financial
position of Myers Industries, Inc. (an Ohio Corporation) and Subsidiaries as of
December 31, 1999 and 1998, and the related statements of consolidated income,
shareholders' equity and comprehensive income and cash flows for each of the
three years in the period ended December 31, 1999. These financial statements
are the responsibility of the Company's management. Our responsibility is to
express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally
accepted in the United States. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Myers Industries, Inc. and
Subsidiaries as of December 31, 1999 and 1998, and the results of their
operations and their cash flows for each of the three years in the period ended
December 31, 1999, in conformity with accounting principles generally accepted
in the United States.
ARTHUR ANDERSEN LLP
/s/ ARTHUR ANDERSEN LLP
Cleveland, Ohio,
February 9, 2000
12
<PAGE> 15
MYERS INDUSTRIES, INC. AND SUBSIDIARIES
STATEMENTS OF CONSOLIDATED INCOME
FOR THE YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997
<TABLE>
<CAPTION>
1999 1998 1997
------------ ------------ ------------
<S> <C> <C> <C>
Net sales....................................... $580,760,740 $392,019,900 $339,625,585
Cost of sales................................... 367,635,460 256,506,103 232,376,615
------------ ------------ ------------
Gross profit.................................. 213,125,280 135,513,797 107,248,970
------------ ------------ ------------
Operating expenses
Selling....................................... 83,352,607 47,959,466 39,322,295
General and administrative.................... 60,265,518 38,181,368 29,613,322
------------ ------------ ------------
143,618,125 86,140,834 68,935,617
------------ ------------ ------------
Operating income........................... 69,507,155 49,372,963 38,313,353
------------ ------------ ------------
Interest
Income........................................ (753,648) (1,515,186) (348,746)
Expense....................................... 15,959,457 2,403,059 596,316
------------ ------------ ------------
15,205,809 887,873 247,570
------------ ------------ ------------
Income before income taxes...................... 54,301,346 48,485,090 38,065,783
Income taxes.................................... 23,125,000 19,806,000 15,727,000
------------ ------------ ------------
Net income...................................... $ 31,176,346 $ 28,679,090 $ 22,338,783
------------ ------------ ------------
Net income per share............................ $ 1.55 $ 1.42 $ 1.10
============ ============ ============
</TABLE>
The accompanying notes are an integral part of these statements.
13
<PAGE> 16
MYERS INDUSTRIES, INC. AND SUBSIDIARIES
STATEMENTS OF CONSOLIDATED FINANCIAL POSITION
AS OF DECEMBER 31, 1999 AND 1998
<TABLE>
<CAPTION>
1999 1998
------------ ------------
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash and temporary cash investments....................... $ 1,094,300 $ 34,832,151
Accounts receivable -- less allowances of $3,810,000 and
$2,396,000 respectively................................ 115,754,304 62,855,111
Inventories
Finished and in-process products..................... 65,145,885 44,182,030
Raw materials and supplies........................... 19,275,065 9,236,913
------------ ------------
84,420,950 53,418,943
Prepaid expenses.......................................... 5,721,436 2,543,996
------------ ------------
TOTAL CURRENT ASSETS........................................ 206,990,990 153,650,201
OTHER ASSETS
Excess of cost over fair value of net assets of companies
acquired............................................... 196,694,408 37,481,612
Patents and other intangible assets....................... 2,725,345 2,104,327
Other..................................................... 4,503,381 4,028,655
------------ ------------
203,923,134 43,614,594
PROPERTY, PLANT AND EQUIPMENT, AT COST
Land...................................................... 6,841,222 2,854,905
Buildings and leasehold improvements...................... 62,982,807 53,484,959
Machinery and equipment................................... 238,240,041 147,405,559
------------ ------------
308,064,070 203,745,423
Less allowances for depreciation and amortization......... 118,568,562 94,302,430
------------ ------------
189,495,508 109,442,993
------------ ------------
$600,409,632 $306,707,788
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable.......................................... $ 39,620,814 $ 15,863,124
Accrued expenses
Employee compensation and related items.............. 26,963,274 13,094,384
Taxes, other than income taxes....................... 2,086,045 1,316,457
Income taxes......................................... 1,326,344 1,357,241
Accrued interest..................................... 1,180,638 125,690
Other................................................ 18,593,223 13,088,468
Current portion of long-term debt......................... 12,474,081 6,388,146
------------ ------------
TOTAL CURRENT LIABILITIES................................... 102,244,419 51,233,510
LONG-TERM DEBT, LESS CURRENT PORTION........................ 280,103,906 48,832,240
DEFERRED INCOME TAXES....................................... 10,314,490 3,953,185
SHAREHOLDERS' EQUITY
Serial Preferred Shares (authorized 1,000,000 shares)..... -0- -0-
Common Shares, without par value (authorized 60,000,000
shares; outstanding 19,987,446 and 20,171,867 shares,
respectively).......................................... 12,256,209 11,610,996
Additional paid-in capital................................ 169,508,024 134,280,522
Accumulated other comprehensive income.................... (19,013,675) (83,002)
Retained income........................................... 44,996,259 56,880,337
------------ ------------
207,746,817 202,688,853
------------ ------------
$600,409,632 $306,707,788
============ ============
</TABLE>
The accompanying notes are an integral part of these statements.
14
<PAGE> 17
MYERS INDUSTRIES, INC. AND SUBSIDIARIES
STATEMENTS OF CONSOLIDATED SHAREHOLDERS' EQUITY
AND COMPREHENSIVE INCOME
FOR THE YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997
<TABLE>
<CAPTION>
ACCUMULATED
COMMON SHARES ADDITIONAL OTHER
------------------------ PAID-IN COMPREHENSIVE RETAINED COMPREHENSIVE
NUMBER AMOUNT CAPITAL INCOME INCOME INCOME
---------- ----------- ------------ ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
BALANCE AT JANUARY 1,
1997..................... 16,854,529 $10,659,714 $109,864,137 $ (213,572) $42,134,712 -0-
Additions
Net income............... -0- -0- -0- -0- 22,338,783 22,338,783
Sales under option
plans.................. 32,204 24,902 357,976 -0- -0- -0-
Employees stock purchase
plan................... 22,720 12,920 366,787 -0- -0- -0-
Dividend reinvestment
plan................... 7,012 4,005 114,201 -0- -0- -0-
Deductions
Purchases for treasury... (326,100) (208,704) (4,968,134) -0- -0- -0-
Dividends -- $.17 per
share.................. -0- -0- -0- -0- (3,529,921) -0-
10% stock dividend....... 1,688,530 1,080,659 27,624,336 -0- (28,714,606) -0-
Foreign currency
translation............ -0- -0- -0- (271,248) -0- (271,248)
---------- ----------- ------------ ------------ ----------- -----------
BALANCE AT DECEMBER 31,
1997..................... 18,278,895 $11,573,496 $133,359,303 $ (484,820) $32,228,968 $22,067,535
========== =========== ============ ============ =========== ===========
Additions
Net income............... -0- -0- -0- -0- 28,679,090 28,679,090
Sales under option
plans.................. 37,144 23,608 450,602 -0- -0- -0-
Employees stock purchase
plan................... 18,210 11,519 373,295 -0- -0- -0-
Dividend reinvestment
plan................... 8,812 5,573 176,809 -0- -0- -0-
Foreign currency
translation............ -0- -0- -0- 401,818 -0- 401,818
Deductions
Purchases for treasury... (5,000) (3,200) (79,487) -0- -0- -0-
Dividends -- $.20 per
share.................. -0- -0- -0- -0- (4,027,721) -0-
---------- ----------- ------------ ------------ ----------- -----------
BALANCE AT DECEMBER 31,
1998..................... 18,338,061 $11,610,996 $134,280,522 $ (83,002) $56,880,337 $29,080,908
========== =========== ============ ============ =========== ===========
Additions
Net income............... -0- -0- -0- -0- 31,176,346 31,176,346
Sales under option
plans.................. 75,221 42,820 744,713 -0- -0- -0-
Employees stock purchase
plan................... 22,986 14,381 470,531 -0- -0- -0-
Dividend reinvestment
plan................... 9,173 5,778 194,751 -0- -0- -0-
Deductions
Purchases for treasury... (297,800) (576,843) (3,443,338) -0- -0- -0-
Dividends -- $.22 per
share.................. -0- -0- -0- -0- (4,626,471) -0-
10% stock dividend....... 1,839,805 1,159,077 37,260,845 -0- (38,433,953) -0-
Foreign currency
translation............ -0- -0- -0- (18,930,673) -0- (18,930,673)
---------- ----------- ------------ ------------ ----------- -----------
BALANCE AT DECEMBER 31,
1999..................... 19,987,446 $12,256,209 $169,508,024 $(19,013,675) $44,996,259 $12,245,673
========== =========== ============ ============ =========== ===========
</TABLE>
The accompanying notes are an integral part of these statements.
15
<PAGE> 18
MYERS INDUSTRIES, INC. AND SUBSIDIARIES
STATEMENTS OF CONSOLIDATED CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997
<TABLE>
<CAPTION>
1999 1998 1997
------------- ------------ ------------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income................................... $ 31,176,346 $ 28,679,090 $ 22,338,783
Items not affecting use of cash
Depreciation.............................. 30,331,491 15,803,285 11,667,787
Amortization of excess of cost over fair
value of net assets of companies
acquired................................ 7,016,458 1,261,245 793,296
Amortization of other intangible assets... 194,525 453,319 752,801
Deferred income taxes..................... 3,539,481 68,567 241,869
Cash flow provided by (used for) working
capital
Accounts receivable............... (7,217,304) (796,995) 3,195,634
Inventories............................... (7,665,075) (5,138,339) (2,800,318)
Prepaid expenses.......................... (129,850) 794,952 (225,746)
Accounts payable and accrued expenses..... 197,663 1,128,406 235,850
------------- ------------ ------------
Net cash provided by operating
activities.............................. 57,443,735 42,253,530 36,199,956
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of business, net of cash
acquired.................................. (213,630,987) (30,141,171) (7,955,077)
Additions to property, plant and equipment,
net....................................... (27,526,755) (19,401,795) (18,779,760)
Other........................................ (287,444) 373,521 (455,917)
------------- ------------ ------------
Net cash used for investing activities.... (241,445,186) (49,169,445) (27,190,754)
CASH FLOWS FROM FINANCING ACTIVITIES
Long-term debt proceeds...................... 75,000,000 -0- -0-
Repayment of long-term debt.................. (4,041,065) -0- -0-
Net borrowing (repayments) -- of credit
facility.................................. 86,493,075 38,519,342 (485,857)
Cash dividends paid.......................... (4,626,471) (4,027,721) (3,529,921)
Proceeds from issuance of common stock....... 1,458,242 1,041,406 880,791
Repurchase of common stock................... (4,020,181) (82,687) (5,176,838)
------------- ------------ ------------
Net cash provided by (used for) financing
activities.............................. 150,263,600 35,450,340 (8,311,825)
------------- ------------ ------------
INCREASE (DECREASE) IN CASH AND TEMPORARY CASH
INVESTMENTS.................................. (33,737,851) 28,534,425 697,377
CASH AND TEMPORARY CASH INVESTMENTS
January 1.................................... 34,832,151 6,297,726 5,600,349
------------- ------------ ------------
CASH AND TEMPORARY CASH INVESTMENTS
December 31.................................. $ 1,094,300 $ 34,832,151 $ 6,297,726
============= ============ ============
SUPPLEMENTAL DISCLOSURES OF CASH FLOW
INFORMATION:
Cash paid during the year for
Interest.................................. $ 14,360,716 $ 2,151,885 $ 574,062
Income taxes.............................. 27,731,272 20,154,032 15,857,230
</TABLE>
The accompanying notes are an integral part of these statements.
16
<PAGE> 19
MYERS INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATION
The consolidated financial statements include the accounts of Myers
Industries, Inc. and all wholly owned subsidiaries (Company). Significant
intercompany accounts and transactions have been eliminated in consolidation.
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosures at the
date of the financial statements and the reported amount of revenues and
expenses during the reported period. Actual results could differ from those
estimates.
TRANSLATION OF FOREIGN CURRENCIES
All balance sheet accounts of consolidated foreign subsidiaries are
translated at the current exchange rate as of the end of the accounting period
and income statement items are translated at an average currency exchange rate.
The resulting translation adjustment is recorded as a separate component of
shareholders' equity and other comprehensive income.
FINANCIAL INSTRUMENTS
Temporary cash investments, all of which have an original maturity of
ninety days or less, are considered cash equivalents. Other financial
instruments, consisting of trade and notes receivable, and long-term debt, are
considered to have a fair value which approximates carrying value at December
31, 1999.
INVENTORIES
Inventories are stated at the lower of cost or market. For approximately 50
percent of its inventories, the Company uses the last-in, first-out (LIFO)
method of determining cost. All other inventories are valued at the first-in,
first-out (FIFO) method of determining cost.
If the FIFO method of inventory cost valuation had been used exclusively by
the Company, inventories would have been $3,779,000, $4,716,000, and $5,207,000
higher than reported at December 31, 1999, 1998 and 1997, respectively.
PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment are carried at cost less accumulated
depreciation and amortization. The Company provides for depreciation and
amortization on the basis of annual rates expected to amortize the cost of such
assets over their estimated useful lives by the straight-line method.
REVENUE RECOGNITION
The Company recognizes revenue from sales when goods are shipped.
INCOME TAXES
Deferred income taxes are provided to recognize the timing differences
between financial statement and income tax reporting, principally for
depreciation and certain valuation allowances. Deferred taxes are not provided
on the unremitted earnings of foreign subsidiaries as the Company's intention is
to permanently reinvest these earnings in the operations of these subsidiaries.
If these earnings would be remitted in future years, the taxes due after
considering available foreign tax credits would not be material.
17
<PAGE> 20
MYERS INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED
EXCESS OF COST OVER FAIR VALUE OF NET ASSETS OF COMPANIES ACQUIRED
This asset represents the excess of cost over the fair value of net assets
of companies acquired and is being amortized on a straight-line basis over
periods ranging from 15 to 40 years. Accumulated amortization at December 31,
1999 and 1998 was $12,533,000 and $5,526,000, respectively. Management, which
regularly evaluates its accounting for goodwill, considering primarily such
factors as current and historical profitability, along with discounted cash
flows, believes that the asset is realizable and the amortization periods are
still appropriate.
RESEARCH AND DEVELOPMENT
Research, engineering, testing and product development costs are charged to
current operations as incurred.
NET INCOME PER SHARE
Basic net income per share, as shown on the Statements of Consolidated
Income, is determined on the basis of the weighted average number of common
shares outstanding during the year, and for all periods shown basic and diluted
earnings per share are identical. During the years ended December 31, 1999 and
1997, the Company paid a ten percent stock dividend. All per share data has been
adjusted for the stock dividends.
ACQUISITIONS
On February 4, 1999, the Company acquired all of the shares of the entities
comprising Allibert Equipement, the material handling division of Sommer
Allibert S.A., and acquired Allibert-Contico, LLC, a joint venture between
Sommer Allibert S.A. and Contico International, Inc. for a total purchase price
of approximately $150 million. The acquired businesses have five manufacturing
facilities in Europe and one in North America and had 1998 annual sales of
approximately $145 million.
In August 1999, the Company acquired substantially all of the assets of
Dillen Products Companies (Dillen) of Middlefield, Ohio, for approximately $54
million and all of the outstanding shares of Listo Products, Ltd. (Listo) of
Canada for approximately $15 million. The Dillen and Listo purchase agreements
provide for payment of additional consideration contingent upon future earnings
of the acquired businesses. Dillen and Listo are leading manufacturers of
plastic planters including pots, trays, saucers, and decorative planters for
customers including greenhouses and nurseries as well as retail garden centers
and mass merchandisers. In fiscal 1998, Dillen and Listo had sales of
approximately $40 million and $12 million, respectively.
The acquisitions have been accounted for under the purchase method of
accounting and, accordingly, the results of operations have been included in the
Company's consolidated financial statements since the dates of acquisition, and
the acquisition costs have been allocated to the assets acquired and liabilities
assumed based upon their estimated fair values. At December 31, 1999, the
purchase price allocations have been based on estimates with the excess of
purchase price over fair value of net assets acquired of approximately $166
million being amortized over lives of 15 to 40 years.
The following unaudited pro-forma information presents a summary of
consolidated results of operations of the Company and the acquired businesses as
if the acquisitions had occurred January 1, 1998:
<TABLE>
<CAPTION>
1999 1998
---- ----
<S> <C> <C>
Net Sales.............................................. $625,407 $585,650
Net Income............................................. 31,759 26,502
Net Income Per Share................................... 1.57 1.32
</TABLE>
18
<PAGE> 21
MYERS INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED
These unaudited pro-forma results have been prepared for comparative
purposes only and may not be indicative of results of operations which actually
would have resulted had the combination been in effect on January 1, 1998, or of
future results.
LONG-TERM DEBT AND CREDIT AGREEMENTS
Long-term debt at December 31, 1999 and 1998, consisted of the following:
<TABLE>
<CAPTION>
1999 1998
---- ----
<S> <C> <C>
Revolving credit agreement....................... $201,398,666 $35,000,000
Term loan........................................ 73,500,000 -0-
Industrial revenue bonds......................... 4,000,000 4,250,000
Other............................................ 13,679,321 15,970,386
------------ -----------
292,577,987 55,220,386
Less Current Portion............................. 12,474,081 6,388,146
------------ -----------
$280,103,906 $48,832,240
============ ===========
</TABLE>
On February 3, 1999, the Company entered into a Multi-Currency Loan
Agreement with a group of banks that was further amended on August 2, 1999,
which provides for a $75 million term loan facility and a revolving credit
facility in five currencies, approximating $250 million (US). In addition, there
is an uncommitted $25 million springing facility. The currencies under the
revolving facility are 185 million US dollars, 30 million euros, 22 million
Canadian dollars, 63 million Danish kroners, and three million pounds sterling.
The current borrowing under these facilities is $73.5 million under the term
loan; 170 million US dollars, 18 million euros, 15 million Canadian dollars, and
20 million Danish kroners.
The borrowing under this facility was used to retire the prior Revolving
Credit Agreement; fund the acquisitions of Allibert Equipement, Dillen Products,
and Listo Products; and for general corporate purposes. Interest is based upon
LIBOR for US dollars and similar bases for the other currencies plus an
applicable margin that varies depending on the Company's ratio of total debt to
earnings before interest, taxes, depreciation and amortization (EBITDA). The
current average interest rate on the outstanding advances at December 31, 1999,
is 7.16 percent. In addition, the Company pays a quarterly facility fee at a
rate dependent on the EBITDA ratio, and is currently 37.5 basis points. The
Multi-Currency Loan Agreement expires in February 2005.
The Credit Agreement contains the customary covenants which include among
other things, the maintenance of certain financial ratios regarding leverage,
net worth, interest coverage, and capital expenditures. In addition, the
facility restricts debt outside the facility to $35 million. At December 31,
1999, the Company had $17.7 million borrowed against this limit consisting of
industrial revenue bonds, certain indebtedness of acquired companies, and
in-country credit facilities for the Company's international operations. The
weighted average interest rate on these amounts outstanding is 6.34%.
Maturities of long-term debt for the five years ending December 31, 2004,
are: $12,000,000 in 2000; $13,000,000 in 2001; $13,000,000 in 2002; $17,000,000
in 2003; and $27,000,000 in 2004.
LEASES
The Company and certain of its subsidiaries are committed under
non-cancelable operating leases involving certain facilities and equipment.
Aggregate rental expense for all leased assets was $4,436,000, $2,845,000 and
$2,664,000 for the years ended December 31, 1999, 1998 and 1997, respectively.
19
<PAGE> 22
MYERS INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED
Future minimum rental commitments for the next five years are as follows:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, COMMITMENT
----------------------- ----------
<S> <C>
2000................................. $6,621,000
2001................................. 5,325,000
2002................................. 4,130,000
2003................................. 3,660,000
2004................................. 3,498,000
</TABLE>
RETIREMENT PLANS
The Company and certain of its subsidiaries have pension and profit sharing
plans covering substantially all of their employees. Two plans are defined
benefit plans with benefits primarily based upon a fixed amount for each year of
service. It is the Company's policy to fund pension costs accrued, which are at
least equal to the minimum required contribution as defined by the Employee
Retirement Income Security Act of 1974.
For the Company's existing defined benefit plans, the reconciliation of
benefit obligations are as follows:
<TABLE>
<CAPTION>
1999 1998 1997
---- ---- ----
<S> <C> <C> <C>
Benefit obligation at beginning of year............... $3,475,325 $3,058,193 $2,914,705
Service Cost........................................ 147,496 138,064 130,062
Interest Cost....................................... 245,145 223,907 197,685
Plan amendments..................................... 120,577 0 0
Actuarial loss (gain)............................... (379,828) 195,624 (49,117)
Benefits paid....................................... (164,249) (140,463) (135,142)
---------- ---------- ----------
Benefit obligation at end of year..................... $3,444,466 $3,475,325 $3,058,193
========== ========== ==========
</TABLE>
The following table reflects the change in fair value of plan assets:
<TABLE>
<CAPTION>
1999 1998 1997
---- ---- ----
<S> <C> <C> <C>
Fair value of plan assets at beginning of year........ $3,901,959 $3,581,525 $2,890,919
Actual return on plan assets.......................... 523,851 402,854 593,352
Company contribution.................................. 0 77,116 246,695
Expenses paid......................................... (25,049) (19,073) (14,299)
Benefits paid......................................... (164,249) (140,463) (135,142)
---------- ---------- ----------
Fair value of plan assets at end of year.............. $4,236,512 $3,901,959 $3,581,525
========== ========== ==========
</TABLE>
The following table reflects the funded status of the plans at December 31,
1999 and 1998:
<TABLE>
<CAPTION>
1999 1998
---- ----
<S> <C> <C>
Funded Status............................................... $ 792,046 $426,634
Unrecognized net (asset) obligation......................... 3,135 9,632
Unrecognized prior service cost............................. 270,994 178,242
Unrecognized net (gain)/loss................................ (1,027,702) (459,565)
----------- --------
Prepaid (accrued) benefit cost.............................. $ 38,473 $154,943
=========== ========
</TABLE>
20
<PAGE> 23
MYERS INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED
Assumptions used for these plans were as follows: discount rate, 7.5
percent; rate of return on plan assets, 8.0 percent. Future benefit increases
were not considered as there is no substantive commitment to increase benefits.
A profit sharing plan is maintained for the Company's U.S. based employees,
not covered under defined benefit plans, who have met eligibility service
requirements. The amount to be contributed by the Company under the profit
sharing plan is determined at the discretion of the Board of Directors. During
1997, the Company established a Supplemental Executive Retirement Plan (SERP)
which provides participating senior executives with retirement benefits in
addition to amounts payable under the profit sharing plan. The SERP is unfunded
apart from the general assets of the Company.
The aggregate cost of all retirement and profit sharing plans reflected in
the accompanying statements of consolidated income is $1,744,000, $1,841,000 and
$2,737,000 for the years 1999, 1998 and 1997, respectively.
INCOME TAXES
The effective tax rate was 42.6% in 1999, 40.8% in 1998, and 41.3% in 1997.
A reconciliation of the Federal statutory income tax rate to the Company's
effective tax rate is as follows:
<TABLE>
<CAPTION>
PERCENT OF PRE-TAX INCOME
---------------------------
1999 1998 1997
----- ----- -----
<S> <C> <C> <C>
Statutory Federal income tax rate........................... 35.0% 35.0% 35.0%
State income taxes -- net of Federal tax benefit............ 4.2 5.0 4.8
Foreign tax rate differential............................... 2.1 0.2 0.2
Effect of non-deductible depreciation and amortization...... 0.7 0.5 0.5
Other....................................................... 0.6 0.1 0.8
---- ---- ----
Effective tax rate for the year............................. 42.6% 40.8% 41.3%
==== ==== ====
</TABLE>
Income taxes consisted of the following:
<TABLE>
<CAPTION>
(DOLLARS IN THOUSANDS)
1999 1998 1997
------------------- ------------------- -------------------
CURRENT DEFERRED CURRENT DEFERRED CURRENT DEFERRED
------- -------- ------- -------- ------- --------
<S> <C> <C> <C> <C> <C> <C>
Federal................. $13,052 $3,250 $15,492 $ 733 $12,427 $242
Foreign................. 3,190 9 665 (824) 255 (22)
State and Local......... 3,343 281 3,581 159 2,835 (10)
------- ------ ------- ----- ------- ----
$19,585 $3,540 $19,738 $ 68 $15,517 $210
======= ====== ======= ===== ======= ====
</TABLE>
21
<PAGE> 24
MYERS INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED
Significant components of the Company's deferred tax liabilities as of
December 31, 1999 and 1998 are as follows:
<TABLE>
<CAPTION>
1999 1998
---- ----
<S> <C> <C>
Deferred income tax liabilities
Property, plant and equipment............................. $14,894 $9,717
Employee benefit trust.................................... 395 396
Other..................................................... 666 0
------- ------
15,955 10,113
Deferred income tax assets
Compensation.............................................. 2,474 2,517
Inventory valuation....................................... 866 910
Allowance for uncollectible accounts...................... 758 675
Non-deductible accruals................................... 1,543 1,725
Other..................................................... 0 333
------- ------
5,641 6,160
------- ------
Net deferred income tax liability........................... $10,314 $3,953
======= ======
</TABLE>
STOCK OPTIONS
In 1999, the Company and its shareholders adopted the 1999 Stock Option
Plan allowing key employees to purchase Common Stock of the Company at the
market price on the date of grant. The plan provides that stock options expire
five years from date of grant and are exercisable up to 20 percent of the shares
granted each year. The activity listed below covers the 1999 Stock Option Plan,
the 1997 Stock Option Plan, and the 1992 Incentive Stock Option Plan.
Stock options granted during the past three years were as follows: during
1999, 189,125 shares at prices from $13.25 to $21.02; during 1998, 241,768
shares at prices from $15.11 to $23.87; during 1997, 164,466 shares at prices
from $13.23 to $15.00.
Stock options exercised during the past three years were as follows: during
1999, 92,154 shares at prices from $10.70 to $15.63; during 1998, 47,069 shares
at prices from $10.70 to $15.63; during 1997, 39,399 shares at prices from $9.82
to $14.67.
At December 31, 1999, 1998 and 1997 there were outstanding options for the
purchase of 683,644, 592,180, and 404,488 shares respectively, at prices ranging
from $10.79 to $23.87 per share in 1999 and $10.70 to $23.87 per share in 1998
and $10.70 to $16.15 in 1997.
At December 31, 1999 and 1998, there were options for 275,868 and 219,797
shares, respectively that were exercisable.
The Company accounts for stock options under APB Opinion No. 25 and,
therefore, does not recognize employee compensation for options granted using
the fair value method set forth in the FASB Statement No. 123 Accounting for
Stock-Based Compensation. If the Company had followed FASB 123 rather that APB
25, net income and earnings per share would not have been materially different
than the reported amounts for 1999, 1998 or 1997.
INDUSTRY SEGMENTS
In 1998, the Company was required to adopt FASB Statement No. 131,
Disclosures about Segments of an Enterprise and Related Information, which
replaces Statement No.14 and establishes new standards for defining the
Company's business segments and disclosing information about them.
22
<PAGE> 25
MYERS INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED
The Company's business units have separate management teams and offer
different products and services. Using the criteria of FASB No.131, these
business units have been aggregated into two reportable segments; Distribution
of aftermarket repair products and services; and Manufacturing of polymer
products. The aggregation of business units is based on management by the chief
operating decision maker for the segment as well as similarities of production
processes, distribution methods and economic characteristics (e.g. average gross
margin and the impact of economic conditions on long-term financial
performance).
The Company's distribution segment is engaged in the distribution of
equipment, tools and supplies used for tire servicing and automotive underbody
repair. The distribution segment operates domestically through 42 branches
located in major cities throughout the United States and in foreign countries
through export and businesses in which the Company holds an equity interest.
The Company's manufacturing segment designs, manufactures and markets a
variety of polymer based plastic and rubber products. These products are
manufactured primarily through the molding process in facilities throughout the
United States and in Europe.
Operating income for each segment is based on net sales less cost of
products sold, and the related selling, administrative and general expenses. In
computing segment operating income general corporate overhead expenses and
interest expenses are not included. The identifiable assets of each segment
include: accounts receivable, inventory, net fixed assets, excess of cost over
fair value of net assets acquired, patents and other intangible assets.
Corporate assets are principally land, buildings, computer equipment, cash and
temporary cash investments.
Total sales from foreign business units and export were approximately
$173.8 million, $61.3 million and $39.9 million for the years 1999, 1998 and
1997, respectively. There are no individual foreign countries for which sales
are material. Long-lived assets in foreign countries consist primarily of
property, plant, equipment and excess of cost over fair value of net assets
acquired were approximately $135.2 million at December 31, 1999, $13.4 at
December 31, 1998 and $528,000 at December 31, 1997. No single customer accounts
for 10 percent or more of total company net sales or the net sales of either
business segment.
23
<PAGE> 26
MYERS INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED
<TABLE>
<CAPTION>
1999 1998 1997
---- ---- ----
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
NET SALES
Distribution of aftermarket repair products and
services............................................. $161,827 $161,737 $147,543
Manufacturing of polymer products....................... 432,462 244,244 204,970
Intra-segment elimination............................... (13,528) (13,961) (12,887)
-------- -------- --------
$580,761 $392,020 $339,626
======== ======== ========
INCOME BEFORE INCOME TAXES
Distribution of aftermarket repair products and
services............................................. $ 17,580 $ 16,043 $ 14,504
Manufacturing of polymer products....................... 60,742 40,062 30,040
Corporate............................................... (8,815) (6,732) (6,230)
Interest expense-net.................................... (15,206) (888) (248)
-------- -------- --------
$ 54,301 $ 48,485 $ 38,066
======== ======== ========
IDENTIFIABLE ASSETS
Distribution of aftermarket repair products and
services............................................. $ 61,726 $ 59,883 $ 53,604
Manufacturing of polymer products....................... 537,722 211,672 163,130
Corporate............................................... 3,561 40,543 8,703
Intra-segment elimination............................... (2,599) (5,390) (1,359)
-------- -------- --------
$600,410 $306,708 $224,078
======== ======== ========
CAPITAL ADDITIONS, NET
Distribution of aftermarket repair products and
services............................................. $ 384 $ 234 $ 603
Manufacturing of polymer products....................... 26,728 18,943 16,015
Corporate............................................... 415 225 2,162
-------- -------- --------
$ 27,527 $ 19,402 $ 18,780
======== ======== ========
DEPRECIATION
Distribution of aftermarket repair products and
services............................................. $ 399 $ 493 $ 546
Manufacturing of polymer products....................... 29,212 15,006 10,847
Corporate............................................... 720 304 275
-------- -------- --------
$ 30,331 $ 15,803 $ 11,668
======== ======== ========
</TABLE>
24
<PAGE> 27
MYERS INDUSTRIES, INC.
EMPLOYEE STOCK PURCHASE PLAN
CONTENTS
Report of Independent Public Accountants for the Myers Industries, Inc.
Employee Stock Purchase Plan
Financial Statements for the Myers Industries, Inc. Employee Stock Purchase
Plan:
(1) Statements of Assets Available for Plan Benefits as of December
31, 1999 and 1998; and
(2) Statements of Changes in Assets Available for Plan Benefits for
the Years Ended December 31, 1999, 1998 and 1997.
Notes to Financial Statements for the Myers Industries, Inc. Employee Stock
Purchase Plan
25
<PAGE> 28
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Myers Industries, Inc. Employee
Stock Purchase Plan Administrator:
We have audited the accompanying statements of assets available for plan
benefits of the Myers Industries, Inc. Employee Stock Purchase Plan as of
December 31, 1999 and 1998, and the related statements of changes in assets
available for plan benefits for each of the three years in the period ended
December 31, 1999. These financial statements are the responsibility of the Plan
Administrator. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with auditing standards generally
accepted in the United States. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the assets available for plan benefits of the Myers
Industries, Inc. Employee Stock Purchase Plan as of December 31, 1999 and 1998,
and the changes in its assets available for plan benefits for each of the three
years in the period ended December 31, 1999, in conformity with accounting
principles generally accepted in the United States.
ARTHUR ANDERSEN LLP
/s/ Arthur Andersen LLP
Cleveland, Ohio,
February 9, 2000
26
<PAGE> 29
MYERS INDUSTRIES, INC.
EMPLOYEE STOCK PURCHASE PLAN
STATEMENTS OF ASSETS AVAILABLE FOR PLAN BENEFITS
DECEMBER 31, 1999 AND 1998
<TABLE>
<CAPTION>
1999 1998
---- ----
<S> <C> <C>
Receivable from Trustee
(Myers Industries, Inc.).................................... $135,691 $108,088
======== ========
</TABLE>
STATEMENTS OF CHANGES IN ASSETS AVAILABLE FOR PLAN BENEFITS
FOR THE YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997
<TABLE>
<CAPTION>
1999 1998 1997
---- ---- ----
<S> <C> <C> <C>
Contributions:
Participants' contributions beginning of period........ $ 108,088 $ 84,839 $ 84,687
Participants' contributions during the period.......... 463,903 365,794 341,806
--------- --------- ---------
Assets Available for Stock Purchases................... 571,991 450,633 426,493
Less:
Assets Used for Stock Purchases........................ (436,300) (342,545) (341,654)
--------- --------- ---------
Assets Available for Plan Benefits at End of Period.... $ 135,691 $ 108,088 $ 84,839
========= ========= =========
</TABLE>
See the accompanying notes to financial statements.
27
<PAGE> 30
MYERS INDUSTRIES, INC.
EMPLOYEE STOCK PURCHASE PLAN
NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997
1. DESCRIPTION OF PLAN
The following description of the Myers Industries, Inc. Employee Stock
Purchase Plan ("Stock Plan") provides only general information. Participants
should refer to the Plan Agreement and Prospectus for the Stock Plan for a more
complete description of the Plan's provisions.
(a) GENERAL. The shareholders of the Company approved the adoption of a
nonqualified and a qualified Employee Stock Purchase Plan. The Stock Plan is
designed to encourage, facilitate and provide employees with an opportunity to
share in the favorable performance of the Company through ownership of the
Company's Common Stock. The total number of shares of the Common Stock which may
be sold under the Stock Plan is currently limited to 188,176 shares.
(b) PURPOSE. The purpose of the Stock Plan is to provide employees
(including officers) of the Company and its subsidiaries with an opportunity to
purchase Common Stock through payroll deductions.
(c) ADMINISTRATION. The Stock Plan is administered by a committee
appointed by the Board of Directors. All questions of interpretation or
application of the Stock Plan are determined by the Board of Directors (or its
appointed committee) and its decisions are final, conclusive and binding upon
all participants.
(d) ELIGIBILITY AND PARTICIPATION. Any permanent employee (including an
officer) who has been employed for at least one calendar year by the Company, or
its subsidiaries who have adopted the Stock Plan, is eligible to participate in
the Stock Plan, provided that such employee is employed by the Company on the
date his participation is effective and subject to limitations on stock
ownership described in the Stock Plan. Eligible employees become participants in
the Stock Plan by delivering to the Company a subscription agreement authorizing
payroll deductions prior to the commencement of the applicable offering period.
(e) OFFERING DATES. The Stock Plan is generally implemented by one
offering during each calendar quarter. Offering periods commence on the last day
of each calendar quarter. The Board of Directors has the power to alter the
duration of the offering periods without shareholder approval.
(f) PURCHASE PRICE. The price at which shares may be purchased in an
offering under the Stock Plan is 90% of the fair market value of the Common
Stock on the last day of the prior calendar quarter. The fair market value of
the Common Stock on a given date is the closing price for that date as listed on
the American Stock Exchange.
(g) PAYROLL DEDUCTIONS. The purchase price of the shares to be acquired
under the Stock Plan will be accumulated by payroll deductions over the offering
period. The rate of deductions may not be less than five dollars ($5.00) per
week or exceed 10% of a participant's compensation, and the aggregate of all
payroll deductions during the offering may not exceed 10% of the participant's
aggregate compensation for the offering period. A participant may discontinue
his participation in the Stock Plan or may decrease or increase the rate of
payroll deductions at any time during the offering period by filing with the
Company a new authorization for payroll deductions.
All payroll deductions made for a participant are credited to their account
under the Stock Plan and are deposited with the general funds of the Company to
be used for any corporate purpose. The amount by which an employee's payroll
deductions exceed the amount required to purchase whole shares will be placed in
a suspense account for the employee with no interest thereon and rolled over
into the next offering period.
(h) WITHDRAWAL. A participant in the Stock Plan may terminate his interest
in a given offering in whole, but not in part, by giving written notice to the
Company of his election to withdraw at any time prior to the end of the
applicable offering period. Such withdrawal automatically terminates the
participant's interest
28
<PAGE> 31
MYERS INDUSTRIES, INC.
EMPLOYEE STOCK PURCHASE PLAN
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
in that offering, but does not have any effect upon such participant's
eligibility to participate in subsequent offerings under the Stock Plan.
(i) TERMINATION OF EMPLOYMENT. Termination of a participant's employment
for any reason, including retirement or death, cancels his or her participation
in the Stock Plan immediately.
(j) NONASSIGNABILITY. No rights or accumulated payroll deductions of an
employee under the Stock Plan may be pledged, assigned, transferred or otherwise
disposed of in any way for any reason, other than on account of death. Any
attempt to do so may be treated by the Company as an election to withdraw from
the Stock Plan.
(k) AMENDMENT AND TERMINATION OF THE PLAN. The Board of Directors may at
any time amend or terminate the Stock Plan. Except as provided above, no
amendment may be made to the Stock Plan without prior approval of the
shareholders if such amendment would increase the number of shares reserved
under the Stock Plan, permit payroll deductions at a rate in excess of 10% of a
participant's compensation, materially modify the eligibility requirements or
materially increase the benefits which may accrue to participants under the
Stock Plan.
(l) TAXATION. Participants in the Stock Plan, which is nonqualified for
federal income tax purposes, are taxed currently on the 10% discount in the
purchase price granted by the Stock Plan in the year in which stock is
purchased. The 10% discount is treated as ordinary income to the participant and
that amount is currently deductible by the Company to the extent the
participant's total compensation from the Company is within the "reasonable
compensation" limits imposed by Section 162 of the Internal Revenue Code of
1986, as amended.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a) BASIS OF PRESENTATION. The accompanying statements of assets available
for plan benefits and statements of changes in assets available for plan
benefits are prepared on the accrual basis of accounting.
(b) ADMINISTRATIVE EXPENSES. Administrative costs and expenses are
absorbed by the Trustee.
ITEM 9. DISAGREEMENTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
There were no disagreements with the Registrant's independent accountants
on accounting and financial disclosure matters within the two-year period ended
December 31, 1999, or in any period subsequent to such date.
29
<PAGE> 32
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
For information about the directors of the Registrant, see "Election of
Directors" on pages 3 through 6 of Registrant's Proxy Statement dated March 15,
2000 ("Proxy Statement"), which is incorporated herein by reference.
Information about the Executive Officers of Registrant appears in Part I of
this Report.
Disclosures by the Registrant with respect to compliance with Section 16(a)
appear on page 8 of the Proxy Statement, and are incorporated herein by
reference.
ITEM 11. EXECUTIVE COMPENSATION
See "Executive Compensation and Other Information" on pages 9 through 12 of
the Proxy Statement, which is incorporated herein by reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
See "Principal Shareholders" and "Election of Directors" on page 14, and
pages 3 through 6, respectively, of the Proxy Statement, which are incorporated
herein by reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
See "Certain Relationships and Related Transactions" at page 7 of the Proxy
Statement, which is incorporated herein by reference.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
The following consolidated financial statements of the Registrant appear in
Part II of this Report:
14. (A)(1) FINANCIAL STATEMENTS
CONSOLIDATED FINANCIAL STATEMENTS OF MYERS INDUSTRIES, INC. AND
SUBSIDIARIES
Report of Independent Public Accountants
Statements of Consolidated Financial Position As Of December 31, 1999
and 1998
Statements of Consolidated Income For The Years Ended December 31, 1999,
1998 and 1997
Statements of Consolidated Shareholders' Equity and Comprehensive Income
For The Years Ended December 31, 1999, 1998 and 1997
Statements of Consolidated Cash Flows For The Years Ended December 31,
1999, 1998 and 1997
Notes to Consolidated Financial Statements For The Years Ended December
31, 1999, 1998 and 1997
FINANCIAL STATEMENTS FOR THE MYERS INDUSTRIES, INC. EMPLOYEE STOCK
PURCHASE PLAN
Statements of Assets Available for Plan Benefits As Of December 31, 1999
and 1998
Statements of Changes in Assets Available for Plan Benefits For The
Years Ended December 31, 1999, 1998 and 1997
14. (A)(2) FINANCIAL STATEMENT SCHEDULES
Selected Quarterly Financial Data For The Years Ended December 31, 1999
and 1998
All other schedules are omitted because they are inapplicable, not
required, or because the information is included in the consolidated financial
statements or notes thereto which appear in Part II of this Report.
30
<PAGE> 33
14. (A)(3) EXHIBITS
<TABLE>
<S> <C>
3(a) MYERS INDUSTRIES, INC. AMENDED AND RESTATED ARTICLES OF
INCORPORATION. Reference is made to Exhibit (3)(a) to Form
10-Q filed with the Commission on May 17, 1999.
3(b) MYERS INDUSTRIES, INC. AMENDED AND RESTATED CODE OF
REGULATIONS. Reference is made to Exhibit (3)(ii) to Form
10-Q filed with the Commission on May 14, 1997.
10(a) MYERS INDUSTRIES, INC. AMENDED AND RESTATED 1982 INCENTIVE
STOCK OPTION PLAN. Reference is made to Exhibit 10(a) to
Form 10-K filed with the Commission on March 24, 1995.*
10(b) MYERS INDUSTRIES, INC. EMPLOYEE STOCK PURCHASE
PLAN. Reference is made to Exhibit 10(b) to Form 10-K filed
with the Commission on March 24, 1995.
10(c) FORM OF INDEMNIFICATION AGREEMENT FOR DIRECTORS AND
OFFICERS. Reference is made to Exhibit 10(c) to Form 10-K
filed with the Commission on March 24, 1995.*
10(d) MYERS INDUSTRIES, INC. 1992 STOCK OPTION PLAN. Reference is
made to Exhibit 10(d) to Form 10-K filed with the Commission
on March 24, 1995.*
10(e) MYERS INDUSTRIES, INC. DIVIDEND REINVESTMENT AND STOCK
PURCHASE PLAN. Reference is made to Exhibit 10(e) to Form
10-K filed with the Commission on March 24, 1995.
10(f) MYERS INDUSTRIES, INC. 1997 INCENTIVE STOCK PLAN. Reference
is made to Exhibit 10.2 to Form S-8 (Registration Statement
No. 333-90367) filed with the Commission on November 5,
1999.*
10(g) MYERS INDUSTRIES, INC. 1999 INCENTIVE STOCK PLAN. Reference
is made to Exhibit 10.1 to Form S-8 (Registration Statement
No. 333-90367) filed with the Commission on November 5,
1999.*
10(h) MILTON I. WISKIND SUPPLEMENTAL COMPENSATION
AGREEMENT. Reference is made to Exhibit 10 to Form 10-Q
filed with the Commission on May 14, 1997.*
10(i) MYERS INDUSTRIES, INC. EXECUTIVE SUPPLEMENTAL RETIREMENT
PLAN. Reference is made to Exhibit 10(h) to Form 10-K filed
with the Commission on March 26, 1998.*
10(j) LOAN AGREEMENT BETWEEN MYERS INDUSTRIES, INC. AND BANC ONE,
MICHIGAN, AGENT (F/K/A NBD BANK) DATED AS OF FEBRUARY 3,
1999. Reference is made to Exhibit 10(b) to Form 8-K filed
with the Commission on February 19, 1999.
10(k) FIRST AMENDMENT TO LOAN AGREEMENT AMONG MYERS INDUSTRIES,
INC., THE FOREIGN SUBSIDIARY BORROWERS AND BANK ONE,
MICHIGAN, AS AGENT FOR THE LENDERS, DATED AS OF AUGUST 2,
1999. Reference is made to Exhibit 10(b) to Form 8-K filed
with the Commission on August 13, 1999.
10(l) ANNEX 1 TO FIRST AMENDMENT LOAN AGREEMENT, BEING THE LOAN
AGREEMENT, AS AMENDED, AMONG MYERS INDUSTRIES, INC., THE
FOREIGN SUBSIDIARY BORROWERS AND BANK ONE, MICHIGAN, AS
AGENT FOR THE LENDERS, DATED AS OF AUGUST 2,
1999. Reference is made to Exhibit 10(c) to Form 8-K filed
with the Commission on August 13, 1999.
21 Subsidiaries of the Registrant
23 Consent of Independent Public Accountants
27 Financial Data Schedule
</TABLE>
- ---------------
* Indicates executive compensation plan or arrangement.
14. (B) REPORTS ON FORM 8-K: None
14. (C) EXHIBITS: See subparagraph 14(A)(3) above.
31
<PAGE> 34
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
<TABLE>
<S> <C>
MYERS INDUSTRIES, INC.
Dated: March 28, 2000 /s/ GREGORY J. STODNICK
By: ----------------------------------------------------
GREGORY J. STODNICK
Vice President -- Finance and
Chief Financial Officer
</TABLE>
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ GREGORY J. STODNICK Vice President -- Finance and March 28, 2000
- --------------------------------------------------- Chief Financial Officer
GREGORY J. STODNICK (Principal Financial and
Accounting Officer)
Director
- ---------------------------------------------------
KEITH A. BROWN
/s/ KARL S. HAY Director March 28, 2000
- ---------------------------------------------------
KARL S. HAY
Director
- ---------------------------------------------------
RICHARD P. JOHNSTON
/s/ STEPHEN E. MYERS President, Chief Executive
- --------------------------------------------------- Officer and Director (Principal
STEPHEN E. MYERS Executive Officer)
/s/ RICHARD L. OSBORNE Director March 28, 2000
- ---------------------------------------------------
RICHARD L. OSBORNE
/s/ JON H. OUTCALT Director March 28, 2000
- ---------------------------------------------------
JON H. OUTCALT
/s/ SAMUEL SALEM Director March 28, 2000
- ---------------------------------------------------
SAMUEL SALEM
Director
- ---------------------------------------------------
EDWIN P. SCHRANK
/s/ MILTON I. WISKIND Senior Vice President, Secretary March 28, 2000
- --------------------------------------------------- and Director
MILTON I. WISKIND
</TABLE>
32
<PAGE> 35
INDEX OF EXHIBITS
EXHIBIT NO.
<TABLE>
<S> <C>
3(a) MYERS INDUSTRIES, INC. AMENDED AND RESTATED ARTICLES OF
INCORPORATION. Reference is made to Exhibit (3)(a) to Form
10-Q filed with the Commission on May 17, 1999.
(b) MYERS INDUSTRIES, INC. AMENDED AND RESTATED CODE OF
REGULATIONS. Reference is made to Exhibit (3)(ii) to Form
10-Q filed with the Commission on May 14, 1997.
10(a) MYERS INDUSTRIES, INC. AMENDED AND RESTATED 1982 INCENTIVE
STOCK OPTION PLAN. Reference is made to Exhibit 10(a) to
Form 10-K filed with the Commission on March 24, 1995.*
(b) MYERS INDUSTRIES, INC. EMPLOYEE STOCK PURCHASE
PLAN. Reference is made to Exhibit 10(b) to Form 10-K filed
with the Commission on March 24, 1995.
(c) FORM OF INDEMNIFICATION AGREEMENT FOR DIRECTORS AND
OFFICERS. Reference is made to Exhibit 10(c) to Form 10-K
filed with the Commission on March 24, 1995.*
(d) MYERS INDUSTRIES, INC. 1992 STOCK OPTION PLAN. Reference is
made to Exhibit 10(d) to Form 10-K filed with the Commission
on March 24, 1995.*
(e) MYERS INDUSTRIES, INC. DIVIDEND REINVESTMENT AND STOCK
PURCHASE PLAN. Reference is made to Exhibit 10(e) to Form
10-K filed with the Commission on March 24, 1995.
(f) MYERS INDUSTRIES, INC. 1997 INCENTIVE STOCK PLAN. Reference
is made to Exhibit 10.2 to Form S-8 (Registration Statement
No. 333-90367) filed with the Commission on November 5,
1999.*
(g) MYERS INDUSTRIES, INC. 1999 INCENTIVE STOCK PLAN. Reference
is made to Exhibit 10.1 to Form S-8 (Registration Statement
No. 333-90367) filed with the Commission on November 5,
1999.*
(h) MILTON I. WISKIND SUPPLEMENTAL COMPENSATION
AGREEMENT. Reference is made to Exhibit 10 to Form 10-Q
filed with the Commission on May 14, 1997.*
(i) MYERS INDUSTRIES, INC. EXECUTIVE SUPPLEMENTAL RETIREMENT
PLAN. Reference is made to Exhibit 10(h) to Form 10-K filed
with the Commission on March 26, 1998.*
(j) LOAN AGREEMENT BETWEEN MYERS INDUSTRIES, INC. AND BANK ONE,
MICHIGAN, AGENT (F/K/A NBD BANK) DATED AS OF FEBRUARY 3,
1999. Reference is made to Exhibit 10(b) to Form 8-K filed
with the Commission on February 19, 1999.
(k) FIRST AMENDMENT TO LOAN AGREEMENT AMONG MYERS INDUSTRIES,
INC., THE FOREIGN SUBSIDIARY BORROWERS AND BANK ONE,
MICHIGAN, AS AGENT FOR THE LENDERS, DATED AS OF AUGUST 2,
1999. Reference is made to Exhibit 10(b) to Form 8-K filed
with the Commission on August 13, 1999.
(l) ANNEX 1 TO FIRST AMENDMENT LOAN AGREEMENT, BEING THE LOAN
AGREEMENT, AS AMENDED, AMONG MYERS INDUSTRIES, INC., THE
FOREIGN SUBSIDIARY BORROWERS AND BANK ONE, MICHIGAN, AS
AGENT FOR THE LENDERS, DATED AS OF AUGUST 2,
1999. Reference is made to Exhibit 10(c) to Form 8-K filed
with the Commission on August 13, 1999.
21 Subsidiaries of the Registrant
23 Consent of Independent Public Accountants
27 Financial Data Schedule
</TABLE>
- ---------------
* Indicates executive compensation plan or arrangement.
33
<PAGE> 1
EXHIBIT 21
SUBSIDIARIES OF REGISTRANT
<TABLE>
<CAPTION>
SUBSIDIARY NAME JURISDICTION
--------------- ------------
<S> <C>
Ameri-Kart Corp. Kansas
Listo Products, Ltd. Yukon Territory
Buckhorn Inc. Ohio
-- Buckhorn Rubber Products Inc. Missouri
-- Buckhorn of California, Inc. Ohio
-- Buckhorn Canada, Inc. Ontario, Canada
-- Buckhorn LTD United Kingdom
Eastern Tire Equipment & Supplies, Limited Quebec, Canada
Elrick Industries, Inc. California
Grower Express Trucking Inc. Ohio
The James C. Heintz Company Ohio
MICO, Inc. U.S. Virgin Islands
MYEcap Financial Corp. Ohio
MYElin International Finance, SA France (Resident of Ireland)
Myers A.E., SA France
-- ATMP France
-- SCI de la Plaine France
-- Holdiplast France
-- Allibert Equipement, SA France
-- Allibert Equipement US Inc. Delaware
-- AC Buckhorn LLC (50%) Missouri
-- Allibert Industries Limitee Quebec, Canada
-- Allibert Contenitori SpA Italy
-- Allibert Contentores Portugal
-- Sommer Allibert (UK) Ltd. UK
-- Allibert Manutencion S.A. Spain
-- Allibert Equipement Sprl Belgium
-- Allibert Transport und Lagertechnik
Verwaltungsgesellschaft GmbH Germany
-- Allibert Transport und Lagertechnik
GmbH & Co Kg Germany
-- Alligert Transport und Lagertechnik GmbH Austria
Myers Industries International, Inc. Ohio
Myers Missouri, Inc. Missouri
-- AC Buckhorn LLC (50%) Missouri
-- Allibert Industries Limitee Quebec, Canada
Myers Systems, Inc. Ohio
Myers Tire Supply (Canada) Limited Ontario, Canada
Myers Tire Supply Distribution, Inc. Ohio
Patch Rubber Company North Carolina
</TABLE>
<PAGE> 2
<TABLE>
<CAPTION>
SUBSIDIARY NAME JURISDICTION
--------------- ------------
<S> <C>
Plastic Parts, Inc. Kentucky
raaco International A/S Denmark
-- raaco Denmark A/S Denmark
-- Moderne Dansk Lagerindretning Denmark
-- raaco Germany Germany
-- raaco Austria Austria
-- raaco France France
-- raaco Suisse Switzerland
-- raaco Great Britain UK
-- raaco Sweden Sweden
-- raaco Benelux B.V Netherlands
Myers de El Salvador S.A. De C.V. El Salvador
-- Orientadores Comerciales S.A. Guatemala
-- Myers de Panama S.A. Panama
</TABLE>
<PAGE> 1
EXHIBIT 23
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation of our
reports included and incorporated by reference in this Form 10-K, into the
Company's previously filed Registration Statements on Form S-8 (Registration
Statement Nos. 81693, 33-9038, 33-47600 and 333-90367) and Registration
Statement on Form S-3 (Registration Statement No. 33-50286).
ARTHUR ANDERSEN LLP
/s/ Arthur Andersen LLP
Cleveland, Ohio
March 28, 2000
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> DEC-31-1999
<CASH> 1,094,300
<SECURITIES> 0
<RECEIVABLES> 119,564,304
<ALLOWANCES> 3,810,000
<INVENTORY> 84,420,950
<CURRENT-ASSETS> 206,990,990
<PP&E> 308,064,070
<DEPRECIATION> 118,568,562
<TOTAL-ASSETS> 600,409,632
<CURRENT-LIABILITIES> 102,244,419
<BONDS> 0
0
0
<COMMON> 12,256,209
<OTHER-SE> 195,490,608
<TOTAL-LIABILITY-AND-EQUITY> 600,409,632
<SALES> 580,760,740
<TOTAL-REVENUES> 580,760,740
<CGS> 367,635,460
<TOTAL-COSTS> 450,988,067
<OTHER-EXPENSES> 60,265,518
<LOSS-PROVISION> 3,810,000
<INTEREST-EXPENSE> 15,959,457
<INCOME-PRETAX> 54,301,346
<INCOME-TAX> 23,125,000
<INCOME-CONTINUING> 31,176,346
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 31,176,346
<EPS-BASIC> 1.55
<EPS-DILUTED> 1.55
</TABLE>
