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Previous: MSI HOLDINGS INC/, 10QSB, EX-27.1, 2000-08-14 |
Next: MYERS INDUSTRIES INC, 10-Q, EX-27, 2000-08-14 |
PART 1 FINANCIAL INFORMATION | ||||||||
NOTES TO FINANCIAL STATEMENTS | ||||||||
MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS | ||||||||
PART II OTHER INFORMATION | ||||||||
Exhibit 27 |
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
| X | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended
June 30,
2000
or
| | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission file number I-8524
OHIO | #34-0778636 | |
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
|
1293 SOUTH MAIN STREET, AKRON, OHIO | 44301 | |
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(Address of principal executive offices) | (Zip Code) |
Registrants telephone number, including area code (330) 253-5592
Indicate whether the registrant (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding
12 months (or for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing requirements for the past
90 days.
Yes x . No .
Applicable Only to Issuers Involved in Bankruptcy
Proceedings During the Preceding Five Years
Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes . No .
As of July 31, 2000, the number of shares outstanding of the issuers Common Stock was:
19,614,520
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-1-
PART 1 FINANCIAL INFORMATION
MYERS INDUSTRIES, INC.
CONDENSED STATEMENT OF CONSOLIDATED FINANCIAL POSITION
AS OF JUNE 30, 2000 AND DECEMBER 31, 1999
June 30, | December 31, | ||||||||||
2000 | 1999 | ||||||||||
ASSETS | |||||||||||
CURRENT ASSETS | |||||||||||
Cash and temporary cash investments | $ | 1,376,657 | $ | 1,094,300 | |||||||
Accounts receivable-less allowances of $3,707,000 and $3,735,000, respectively | 119,590,565 | 115,754,304 | |||||||||
Inventories | |||||||||||
Finished and in-process products | 64,933,273 | 65,145,885 | |||||||||
Raw materials and supplies | 19,089,540 | 19,275,065 | |||||||||
84,022,813 | 84,420,950 | ||||||||||
Prepaid expenses | 2,065,058 | 5,721,436 | |||||||||
Total Current Assets | 207,055,093 | 206,990,990 | |||||||||
OTHER ASSETS | |||||||||||
Excess of cost over fair value of net assets of companies acquired | 187,670,114 | 196,694,408 | |||||||||
Patents and other intangible assets | 2,993,733 | 2,725,345 | |||||||||
Other | 3,940,554 | 4,503,381 | |||||||||
194,604,401 | 203,923,134 | ||||||||||
PROPERTY, PLANT & EQUIPMENT, AT COST | |||||||||||
Land | 6,683,357 | 6,841,222 | |||||||||
Buildings and leasehold improvements | 63,435,463 | 62,982,807 | |||||||||
Machinery and equipment | 247,760,080 | 238,240,041 | |||||||||
317,878,900 | 308,064,070 | ||||||||||
Less allowances for depreciation and amortization | 132,608,378 | 118,568,562 | |||||||||
185,270,522 | 189,495,508 | ||||||||||
$ | 586,930,016 | $ | 600,409,632 | ||||||||
-2-
PART I FINANCIAL INFORMATION
MYERS INDUSTRIES, INC.
CONDENSED STATEMENT OF CONSOLIDATED FINANCIAL POSITION
AS OF JUNE 30, 2000 AND DECEMBER 31, 1999
June 30, | December 31, | |||||||||
2000 | 1999 | |||||||||
LIABILITIES AND SHAREHOLDERS EQUITY | ||||||||||
CURRENT LIABILITIES | ||||||||||
Accounts payable | $ | 39,964,065 | $ | 39,620,814 | ||||||
Accrued expenses | ||||||||||
Employee compensation | 22,970,984 | 26,963,274 | ||||||||
Taxes, other than income taxes | 2,910,949 | 2,086,045 | ||||||||
Income taxes | (617,765 | ) | 1,326,344 | |||||||
Other | 17,743,582 | 19,773,861 | ||||||||
Current portion of long-term debt | 15,683,037 | 12,474,081 | ||||||||
Total Current Liabilities | 98,654,852 | 102,244,419 | ||||||||
LONG-TERM DEBT, less current portion | 267,667,009 | 280,103,906 | ||||||||
DEFERRED INCOME TAXES | 10,043,380 | 10,314,490 | ||||||||
SHAREHOLDERS EQUITY | ||||||||||
Serial Preferred Shares (authorized 1,000,000) | 0 | 0 | ||||||||
Common Shares, without par value (authorized 60,000,000 shares; outstanding 19,653,906 and 19,987,446, respectively) | 12,053,806 | 12,256,209 | ||||||||
Additional paid-in capital | 165,343,610 | 169,508,024 | ||||||||
Accumulated other comprehensive income | (25,839,687 | ) | (19,013,675 | ) | ||||||
Retained income | 59,007,046 | 44,996,259 | ||||||||
210,564,775 | 207,746,817 | |||||||||
$ | 586,930,016 | $ | 600,409,632 | |||||||
-3-
PART I FINANCIAL INFORMATION
MYERS INDUSTRIES, INC.
CONDENSED STATEMENT OF CONSOLIDATED INCOME
FOR THE THREE | FOR THE SIX | ||||||||||||||||
MONTHS ENDED | MONTHS ENDED | ||||||||||||||||
June 30, | June 30, | June 30, | June 30, | ||||||||||||||
2000 | 1999 | 2000 | 1999 | ||||||||||||||
Net sales | $ | 166,235,127 | $ | 147,643,051 | $ | 327,821,536 | $ | 274,389,456 | |||||||||
Costs and expenses | |||||||||||||||||
Cost of sales | 109,100,449 | 93,491,543 | 213,733,136 | 173,010,818 | |||||||||||||
Operating expenses | 37,950,559 | 35,041,970 | 74,934,940 | 65,225,041 | |||||||||||||
Interest , net | 5,285,630 | 3,307,511 | 10,896,725 | 5,756,615 | |||||||||||||
Total costs & expenses | 152,336,638 | 131,841,024 | 299,564,801 | 243,992,474 | |||||||||||||
Income before income taxes | 13,898,489 | 15,802,027 | 28,256,735 | 30,396,982 | |||||||||||||
Income taxes | 5,840,000 | 6,635,000 | 11,866,000 | 12,962,000 | |||||||||||||
Net income | $ | 8,058,489 | $ | 9,167,027 | $ | 16,390,735 | $ | 17,434,982 | |||||||||
Net income per Common Share | $ | .41 | $ | .45 | $ | .83 | $ | .86 | |||||||||
Dividends per Common Share | $ | .06 | $ | .05 | $ | .12 | $ | .10 | |||||||||
Weighted average number of Common Shares outstanding | 19,746,607 | 20,222,419 | 19,807,664 | 20,205,596 |
-4-
PART I FINANCIAL INFORMATION
MYERS INDUSTRIES, INC.
STATEMENTS OF CONSOLIDATED CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 2000 AND 1999
June 30, | June 30, | |||||||||||
2000 | 1999 | |||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||||||
Net income | $ | 16,390,735 | $ | 17,434,982 | ||||||||
Items not affecting use of cash | ||||||||||||
Depreciation | 17,272,381 | 13,074,874 | ||||||||||
Amortization of excess of cost over fair value of net assets of companies acquired | 4,287,940 | 2,712,507 | ||||||||||
Amortization of other intangible assets | 363,727 | 300,319 | ||||||||||
Cash flow provided by (used for) working capital | ||||||||||||
Accounts receivable | (6,316,133 | ) | (10,581,399 | ) | ||||||||
Inventories | (722,841 | ) | 83,199 | |||||||||
Prepaid expenses | 3,614,934 | 1,177,690 | ||||||||||
Accounts payable and accrued expenses | (4,549,798 | ) | (268,962 | ) | ||||||||
Net cash provided by operating activities | 30,340,945 | 23,933,210 | ||||||||||
CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||||||
Acquisition of business, net of cash acquired | (404,137 | ) | (149,225,489 | ) | ||||||||
Additions to property, plant and equipment, net | (14,935,070 | ) | (11,696,148 | ) | ||||||||
Other | (763,530 | ) | 261,181 | |||||||||
Net cash used for investing activities | (16,102,737 | ) | (160,660,456 | ) | ||||||||
CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||||||
Long-term debt proceeds (repayment) | (4,000,000 | ) | 75,000,000 | |||||||||
Net borrowing (repayment) of credit facility | (3,209,085 | ) | 40,786,013 | |||||||||
Cash dividends paid | (2,379,948 | ) | (2,205,320 | ) | ||||||||
Proceeds from issuance of common stock | 500,605 | 823,606 | ||||||||||
Repurchase of common stock | (4,867,423 | ) | 0 | |||||||||
Net cash provided by (used for) financing activities | (13,955,851 | ) | 114,404,299 | |||||||||
(DECREASE) INCREASE IN CASH AND TEMPORARY CASH INVESTMENTS | 282,357 | (22,322,947 | ) | |||||||||
CASH AND TEMPORARY CASH INVESTMENTS JANUARY 1 | 1,094,300 | 34,832,151 | ||||||||||
CASH AND TEMPORARY CASH INVESTMENTS JUNE 30 | $ | 1,376,657 | $ | 12,509,204 | ||||||||
-5-
PART I FINANCIAL INFORMATION
MYERS INDUSTRIES, INC.
STATEMENT OF SHAREHOLDERS EQUITY
FOR THE SIX MONTHS ENDED JUNE 30, 2000
Accumulative | |||||||||||||||||||||
Additional | Other | ||||||||||||||||||||
Comprehensive | Common | Paid-In | Comprehensive | Retained | |||||||||||||||||
Income | Stock | Capital | Income | Income | |||||||||||||||||
December 31, 1999 | $ | 12,256,209 | $ | 169,508,024 | ($19,013,675 | ) | $ | 44,996,259 | |||||||||||||
Net Income | $ | 16,390,735 | 16,390,735 | ||||||||||||||||||
Foreign Currency | |||||||||||||||||||||
Translation Adjustment | (6,826,012 | ) | (6,826,012 | ) | |||||||||||||||||
Comprehensive Income | $ | 9,564,723 | |||||||||||||||||||
Common Stock Issued | 25,460 | 475,146 | |||||||||||||||||||
Purchases for Treasury | (227,863 | ) | (4,639,560 | ) | |||||||||||||||||
Dividends | (2,379,948 | ) | |||||||||||||||||||
June 30, 2000 | $ | 12,053,806 | $ | 165,343,610 | ($25,839,687 | ) | $ | 59,007,046 | |||||||||||||
-6-
PART I FINANCIAL INFORMATION
MYERS INDUSTRIES, INC.
NOTES TO FINANCIAL STATEMENTS
(1) Statement of Accounting Policy
The accompanying financial statements include the accounts of Myers Industries, Inc. and subsidiaries (Company), and have been prepared without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to those rules and regulations, although the Company believes that the disclosures are adequate to make the information not misleading. It is suggested that these financial statements be read in conjunction with the financial statements and notes thereto included in the Companys latest annual report on Form 10-K.
In the opinion of the Company, the accompanying financial statements contain all adjustments (consisting of only normal recurring accruals) necessary to present fairly the financial position as of June 30, 2000, and the results of operations and cash flows for the six months ended June 30, 2000 and 1999.
(2) 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 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.
In August 1999, the Company acquired substantially all of the assets of the Dillen Products Companies of Middlefield, Ohio for approximately $50 million and all of the outstanding shares of Listo Products, Ltd. of Canada for approximately $15 million. Dillen and Listo are leading manufacturers of plastic horticultural containers including pots, trays, saucers and decorative planters for customers including greenhouses and nurseries as well as retail garden centers and mass merchandisers.
The acquisitions have been accounted for under the purchase method of accounting and, accordingly, the results of operations have been included in the Companys 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. 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.
-7-
PART I FINANCIAL INFORMATION
MYERS INDUSTRIES, INC.
NOTES TO FINANCIAL STATEMENTS
(2) Acquisitions (Cont)
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, 1999.
Three Months Ended | Six Months Ended | |||||||
(In thousands, except per share) | June 30, 1999 | June 30, 1999 | ||||||
Sales | $ | 165,252 | $ | 315,586 | ||||
Net Income | 9,492 | 18,618 | ||||||
Net Income Per Share | .47 | .92 |
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, 1999, or of future results.
(3) Supplemental Disclosure of Cash Flow Information
The Company made cash payments for interest expense of $5,082,000 and $2,207,000 for the three months ended June 30, 2000 and 1999, respectively. Cash payments for interest were $10,159,000 and $3,785,000 for the six months ended June 30, 2000 and 1999. Cash payments for income taxes totaled $9,949,000 and $10,639,000 for the three months ended June 30, 2000 and 1999. Cash payments for income taxes were $10,573,000 and $12,457,000 for the six months ended June 30, 2000 and 1999.
(4) Segment Information
The Companys 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 after-market 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 Companys 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.
-8-
PART I FINANCIAL INFORMATION
MYERS INDUSTRIES, INC.
NOTES TO FINANCIAL STATEMENTS
(4) Segment Information (Cont)
The Companys 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 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.
Three Months Ended | Six Months Ended | |||||||||||||||||
(In Thousands) | June 30, | June 30, | ||||||||||||||||
2000 | 1999 | 2000 | 1999 | |||||||||||||||
Net Sales | ||||||||||||||||||
Distribution of aftermarket repair products and services | $ | 40,564 | $ | 41,870 | $ | 74,530 | $ | 76,811 | ||||||||||
Manufacturing of polymer products | 129,253 | 109,310 | 259,977 | 204,186 | ||||||||||||||
Intra-segment elimination | (3,582 | ) | (3,537 | ) | (6,685 | ) | (6,608 | ) | ||||||||||
$ | 166,235 | $ | 147,643 | $ | 327,822 | $ | 274,389 | |||||||||||
Income Before Income Taxes | ||||||||||||||||||
Distribution of aftermarket repair products and services | $ | 3,593 | $ | 4,271 | $ | 6,450 | $ | 7,419 | ||||||||||
Manufacturing of polymer products | 18,064 | 17,468 | 37,757 | 33,531 | ||||||||||||||
Corporate | (2,473 | ) | (2,629 | ) | (5,053 | ) | (4,796 | ) | ||||||||||
Interest expense net | (5,286 | ) | (3,308 | ) | (10,897 | ) | (5,757 | ) | ||||||||||
$ | 13,898 | $ | 15,802 | $ | 28,257 | $ | 30,397 | |||||||||||
-9-
PART I FINANCIAL INFORMATION
MYERS INDUSTRIES, INC.
MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
Net sales for the quarter ended June 30, 2000 increased $18.6 million or 13 percent as higher sales in the Manufacturing segment offset a decline in Distribution segment sales. In total, sales in the Manufacturing segment increased $20 million or 18 percent while sales in the Distribution segment were down 3 percent from the prior year quarter. The increase in sales for the Manufacturing segment was primarily due to the impact of acquired companies not included in the prior year period. Excluding the contribution from these acquisitions, manufacturing sales increased 2 percent for the quarter and total net sales would have increased 1 percent. For the six months ended June 30, 2000, net sales increased $53.4 million or 20 percent compared with the same period in 1999. On a segment basis, sales in the Distribution segment were down 3 percent reflecting lower unit volumes while sales in the Manufacturing segment increased $55.8 million or 27 percent based on an increase of 4 percent in existing business units combined with the impact of acquired companies.
Total sales and Manufacturing segment sales were also negatively impacted by the translation effect of weaker foreign currencies, particularly the Euro, on sales of foreign businesses. As a result, total sales and Manufacturing segment sales were reduced $4.5 million for the quarter and $8.0 million for the six month period ended June 30, 2000. Without the translation effect and excluding the impact of acquired businesses, total sales would have increased 4 percent for the quarter and 5 percent for the six months, and Manufacturing segment sales would have increased 7 percent for the quarter and 8 percent for the six months.
Cost of sales increased $15.6 million or 17 percent for the quarter ended June 30, 2000 and $40.7 million or 24 percent for the six month period. Expressed as a percentage of sales, gross profit fell to 34.4 percent in the quarter and 34.8 percent for the six months ended June 30, 2000 compared with 36.7 percent for the quarter and 36.9 percent for the six month period in 1999. For both the quarter and year-to-date periods this reduction in gross margin was the result of significantly higher raw material costs, primarily plastic resins, used in the Companys Manufacturing businesses. These plastic resin costs have, on the average, increased more than 50 percent in the current year compared with the same periods in 1999.
Total operating expenses increased $2.9 million or 8 percent for the quarter and $9.7 million or 15 percent for the six months ended June 30, 2000 compared with the same periods in 1999. These increases primarily reflect the additional operating costs of acquired companies. Operating expenses, expressed as a percentage of sales, declined to 22.8 percent in the quarter and 22.8 percent for the six months ended June 30, 2000 compared to 23.7 percent for the quarter and 23.8 percent for the six month period last year. This improvement in operating leverage is principally due to the seasonality of sales for certain acquired businesses that were not included in the prior year periods.
-10-
PART I FINANCIAL INFORMATION
MYERS INDUSTRIES, INC.
MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Results of Operations (Cont)
Net interest expense increased $2 million or 60 percent for the quarter and $5.1 million or 89 percent for the six months ended June 30, 2000. The increased interest expense is primarily due to substantially higher borrowing levels resulting from business acquisitions combined with higher average interest rates in the current year.
Income taxes as a percent of income before taxes was 42 percent for the both the quarter and six months ended June 30, 2000 compared with 42 percent for the quarter and 42.6 percent in the six month period in 1999.
LIQUIDITY AND CAPITAL RESOURCES
Cash provided by operating activities was $30.3 million for the six months ended June 30, 2000 compared with $23.9 million for same period in the prior year. Long-term debt was reduced $12.4 million from December 31, 1999 and debt as a percentage of total capitalization was 57 percent at June 30, 2000. Working capital increased from $104.7 million at December 31, 1999 to $108.4 million at June 30, 2000.
Capital expenditures for the six months ended June 30, 2000 were $14.9 million and are anticipated to be in the range of $35 million to $40 million for the full year. Management believes that anticipated cash flows from operations and available credit facilities will be sufficient to meet expected business requirements including capital expenditures, dividends, working capital and debt service.
-11-
PART II OTHER INFORMATION
MYERS INDUSTRIES, INC.
Item 4. | Submission of Matters to a Vote of Security Holders | |
The Annual Meeting of Shareholders was held on April 18, 2000, And the following matters were voted on at that meeting. | ||
1. The election nine Directors were voted upon. All of the Directors nominated were elected. The results of this voting are as follows: |
Votes | ||||||||||||
Name of Director | Votes for | Withheld | ||||||||||
Stephen E. Myers | 17,184,981 | 177,410 | ||||||||||
Milton I. Wiskind | 17,168,183 | 194,208 | ||||||||||
Edwin P. Schrank | 17,177,993 | 184,398 | ||||||||||
Karl S. Hay | 17,029,190 | 333,201 | ||||||||||
Richard P. Johnston | 17,180,279 | 182,112 | ||||||||||
Richard Osborne | 17,184,377 | 178,014 | ||||||||||
Jon H. Outcalt | 17,168,334 | 194,057 | ||||||||||
Samuel Salem | 17,153,286 | 209,105 | ||||||||||
Keith A. Brown | 17,184,880 | 177,511 | ||||||||||
Michael Kane | 17,018,603 | 343,786 | ||||||||||
Edward Kissel | 17,076,304 | 286,087 |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
MYERS INDUSTRIES, INC. | ||
8/14/00 | By: \s\ Gregory J. Stodnick | |
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Date |
Gregory J. Stodnick Vice President-Finance Financial Officer (Duly Authorized Officer and Principal Financial and Accounting Officer) |
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