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Previous: INTERGROUP CORP, 10QSB, EX-27, 2000-11-13 |
Next: MYERS INDUSTRIES INC, 10-Q, EX-27, 2000-11-13 |
PART I - FINANCIAL INFORMATION | ||||||||
NOTES TO FINANCIAL STATEMENTS | ||||||||
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS | ||||||||
PART II OTHER INFORMATION | ||||||||
SIGNATURE | ||||||||
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 September 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
MYERS INDUSTRIES, INC.
OHIO | #34-0778636 | |
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(State or other jurisdiction of | (I.R.S. Employer | |
incorporation or organization) | Identification No.) |
1293 SOUTH MAIN STREET, AKRON, OHIO | 44301 | |||
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(Address of principal executive offices) | (Zip Code) |
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 October 31, 2000, the number of shares outstanding of the issuers Common Stock was:
21,588,136
-1-
PART 1 FINANCIAL INFORMATION
MYERS INDUSTRIES, INC.
CONDENSED STATEMENT OF CONSOLIDATED FINANCIAL POSITION
AS OF SEPTEMBER 30, 2000 AND DECEMBER 31, 1999
September 30, | December 31, | ||||||||||
ASSETS | 2000 | 1999 | |||||||||
CURRENT ASSETS | |||||||||||
Cash and temporary cash investments | $ | 6,013,935 | $ | 1,094,300 | |||||||
Accounts receivable-less allowances of $3,572,200 and $3,707,000, respectively | 116,672,667 | 115,754,304 | |||||||||
Inventories | |||||||||||
Finished and in-process products | 67,772,307 | 65,145,885 | |||||||||
Raw materials and supplies | 20,299,546 | 19,275,065 | |||||||||
88,071,853 | 84,420,950 | ||||||||||
Prepaid expenses | 1,595,680 | 5,721,436 | |||||||||
TOTAL CURRENT ASSETS | 212,354,135 | 206,990,990 | |||||||||
OTHER ASSETS | |||||||||||
Excess of cost over fair value of net assets of companies acquired | 178,918,399 | 196,694,408 | |||||||||
Patents and other intangible assets | 2,813,393 | 2,725,345 | |||||||||
Other | 4,008,643 | 4,503,381 | |||||||||
185,740,435 | 203,923,134 | ||||||||||
PROPERTY, PLANT & EQUIPMENT, AT COST | |||||||||||
Land | 6,453,690 | 6,841,222 | |||||||||
Buildings and leasehold improvements | 63,144,227 | 62,982,807 | |||||||||
Machinery and equipment | 250,601,747 | 238,240,041 | |||||||||
320,199,664 | 308,064,070 | ||||||||||
Less allowances for depreciation and amortization | 138,469,304 | 118,568,562 | |||||||||
181,730,360 | 189,495,508 | ||||||||||
$ | 579,824,930 | $ | 600,409,632 | ||||||||
-2-
PART I FINANCIAL INFORMATION
MYERS INDUSTRIES, INC.
CONDENSED STATEMENT OF CONSOLIDATED FINANCIAL POSITION
AS OF SEPTEMBER 30, 2000 AND DECEMBER 31, 1999
September 30, | December 31, | ||||||||||
LIABILITIES AND SHAREHOLDERS' EQUITY | 2000 | 1999 | |||||||||
CURRENT LIABILITIES | |||||||||||
Accounts payable | $ | 42,907,203 | $ | 39,620,814 | |||||||
Accrued expenses | |||||||||||
Employee compensation | 23,858,687 | 26,963,274 | |||||||||
Taxes, other than income taxes | 2,799,756 | 2,086,045 | |||||||||
Income taxes | (2,960,438 | ) | 1,326,344 | ||||||||
Other | 18,271,634 | 19,773,861 | |||||||||
Current portion of long-term debt | 14,115,182 | 12,474,081 | |||||||||
TOTAL CURRENT LIABILITIES | 98,992,024 | 102,244,419 | |||||||||
LONG-TERM DEBT, less current portion | 267,872,452 | 280,103,906 | |||||||||
DEFERRED INCOME TAXES | 9,983,938 | 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 21,575,452 and 21,986,191, respectively) |
13,225,950 | 12,256,209 | |||||||||
Additional paid-in capital | 189,618,936 | 169,508,024 | |||||||||
Accumulated other comprehensive income | (34,741,059 | ) | (19,013,675 | ) | |||||||
Retained income | 34,872,689 | 44,996,259 | |||||||||
202,976,516 | 207,746,817 | ||||||||||
$ | 579,824,930 | $ | 600,409,632 | ||||||||
-3-
PART I FINANCIAL INFORMATION
MYERS INDUSTRIES, INC.
CONDENSED STATEMENT OF CONSOLIDATED INCOME
FOR THE THREE | FOR THE NINE | ||||||||||||||||||
MONTHS ENDED | MONTHS ENDED | ||||||||||||||||||
Sept. 30, | Sept. 30, | Sept. 30, | Sept. 30, | ||||||||||||||||
2000 | 1999 | 2000 | 1999 | ||||||||||||||||
Net sales | $ | 153,542,047 | $ | 139,768,838 | $ | 481,368,864 | $ | 414,158,294 | |||||||||||
Costs of Sales | 105,726,403 | 91,513,996 | 319,464,820 | 264,524,814 | |||||||||||||||
Gross Profit | 47,815,644 | 48,254,842 | 161,904,044 | 149,633,480 | |||||||||||||||
Operating Expenses | 36,830,601 | 36,113,558 | 111,765,543 | 101,338,599 | |||||||||||||||
Operating Income | 10,985,043 | 12,141,284 | 50,138,501 | 48,294,881 | |||||||||||||||
Interest Expense | 5,580,634 | 4,482,515 | 16,477,357 | 10,239,130 | |||||||||||||||
Income Before Income Taxes | 5,404,409 | 7,658,769 | 33,661,144 | 38,055,751 | |||||||||||||||
Income Taxes | 2,255,000 | 3,692,000 | 14,121,000 | 16,654,000 | |||||||||||||||
Net Income | $ | 3,149,409 | $ | 3,966,769 | $ | 19,540,144 | $ | 21,401,751 | |||||||||||
Net income per Common Share* | $ | .15 | $ | .18 | $ | .90 | $ | .96 | |||||||||||
Dividends per Common Share* | $ | .06 | $ | .055 | $ | .17 | $ | .155 | |||||||||||
Weighted average number of Common Shares outstanding* | 21,586,543 | 22,267,296 | 21,724,589 | 22,239,280 |
* | Adjusted for a ten percent stock dividend in August, 2000. |
-4-
PART I FINANCIAL INFORMATION
MYERS INDUSTRIES, INC.
STATEMENTS OF CONSOLIDATED CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2000 AND 1999
Sept. 30, | Sept. 30, | |||||||||||
2000 | 1999 | |||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||||||
Net income | $ | 19,540,144 | $ | 21,401,751 | ||||||||
Items not affecting use of cash | ||||||||||||
Depreciation | 25,955,460 | 22,580,451 | ||||||||||
Amortization of excess of cost over fair value of net assets of companies acquired | 6,495,338 | 4,848,285 | ||||||||||
Amortization of other intangible assets | 583,084 | 564,265 | ||||||||||
Cash flow provided by (used for) working capital | ||||||||||||
Accounts receivable | (6,681,771 | ) | (6,742,146 | ) | ||||||||
Inventories | (6,147,712 | ) | (3,516,617 | ) | ||||||||
Prepaid expenses | 4,071,817 | 815,065 | ||||||||||
Accounts payable and accrued expenses | (81,255 | ) | (5,019,109 | ) | ||||||||
Net cash provided by operating activities | 43,735,105 | 34,931,945 | ||||||||||
CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||||||
Acquisition of business, net of cash acquired | (404,137 | ) | (207,002,970 | ) | ||||||||
Additions to property, plant and equipment, net | (22,686,658 | ) | (18,516,824 | ) | ||||||||
Other | (946,660 | ) | 364,261 | |||||||||
Net cash used for investing activities | (24,037,455 | ) | (225,155,533 | ) | ||||||||
CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||||||
Long-term debt proceeds (repayment) | (6,000,000 | ) | 75,000,000 | |||||||||
Net borrowing (repayment) of credit facility | (203,631 | ) | 90,709,869 | |||||||||
Cash dividends paid | (3,674,475 | ) | (3,420,119 | ) | ||||||||
Proceeds from issuance of common stock | 631,589 | 1,014,748 | ||||||||||
Repurchase of common stock | (5,531,498 | ) | 0 | |||||||||
Net cash provided by financing activities | (14,778,015 | ) | 163,304,498 | |||||||||
(DECREASE) INCREASE IN CASH AND | ||||||||||||
TEMPORARY CASH INVESTMENTS | 4,919,635 | (26,919,090 | ) | |||||||||
CASH AND TEMPORARY CASH INVESTMENTS | ||||||||||||
JANUARY 1 | 1,094,300 | 34,832,151 | ||||||||||
CASH AND TEMPORARY CASH INVESTMENTS | ||||||||||||
SEPTEMBER 30 | $ | 6,013,935 | $ | 7,913,061 | ||||||||
-5-
PART I FINANCIAL INFORMATION
MYERS INDUSTRIES, INC.
STATEMENT OF SHAREHOLDERS EQUITY
FOR THE NINE MONTHS ENDED SEPTEMBER 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 | $ | 19,540,144 | 19,540,144 | |||||||||||||||||
Foreign Currency Translation Adjustment | (15,727,384 | ) | (15,727,384 | ) | ||||||||||||||||
Comprehensive Income | $ | 3,812,760 | ||||||||||||||||||
Common Stock Issued | 34,191 | 597,398 | ||||||||||||||||||
Purchases for Treasury | (260,620 | ) | (5,270,878 | ) | ||||||||||||||||
10% Stock Dividend | 1,196,170 | 24,784,392 | (25,989,239 | ) | ||||||||||||||||
Dividends | (3,674,475 | ) | ||||||||||||||||||
September 30, 2000 | $ | 13,225,950 | $ | 189,618,936 | ($34,741,059 | ) | $ | 34,872,689 | ||||||||||||
-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 September 30, 2000, and the results of operations and cash flows for the nine months ended September 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 | Nine Months Ended | |||||||
(In thousands, except per share) | September 30, 1999 | September 30, 1999 | ||||||
Sales | $ | 143,219 | $ | 458,805 | ||||
Net Income | 3,367 | 21,985 | ||||||
Net Income Per Share | .15 | .99 |
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 $5,846,000 and $4,290,000 for the three months ended September 30, 2000 and 1999, respectively. Cash payments for interest were $16,005,000 and $9,370,000 for the nine months ended September 30, 2000 and 1999. Cash payments for income taxes totaled $4,365,000 and $8,330,000 for the three months ended September 30, 2000 and 1999. Cash payments for income taxes were $14,938,000 and $23,803,000 for the nine months ended September 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 | Nine Months Ended | ||||||||||||||||
(In Thousands) | September 30, | September 30, | |||||||||||||||
Net Sales | 2000 | 1999 | 2000 | 1999 | |||||||||||||
Distribution of aftermarket repair products and services | $ | 41,737 | $ | 41,759 | $ | 116,267 | $ | 118,570 | |||||||||
Manufacturing of polymer products | 115,311 | 101,620 | 375,288 | 305,806 | |||||||||||||
Intra-segment elimination | (3,506 | ) | (3,610 | ) | (10,186 | ) | (10,218 | ) | |||||||||
$ | 153,542 | $ | 139,769 | $ | 481,369 | $ | 414,158 | ||||||||||
Income Before Income Taxes |
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Distribution of aftermarket repair products and services | $ | 4,276 | $ | 4,237 | $ | 10,726 | $ | 11,656 | |||||||||
Manufacturing of polymer products | 9,152 | 9,160 | 46,909 | 42,691 | |||||||||||||
Corporate | (2,443 | ) | (1,256 | ) | (7,497 | ) | (6,052 | ) | |||||||||
Interest expense-net | (5,581 | ) | (4,482 | ) | (16,477 | ) | (10,239 | ) | |||||||||
$ | 5,404 | $ | 7,659 | $ | 33,661 | $ | 38,056 | ||||||||||
-9-
PART I FINANCIAL INFORMATION
MYERS INDUSTRIES, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
Net sales for the quarter ended September 30, 2000 increased $13.8 million or 10 percent on the strength of increased sales in the Manufacturing segment while sales in the Distribution segment were virtually unchanged. Sales in the Manufacturing segment increased $13.7 million or 13 percent primarily as a result of increased volume combined with the impact of acquired companies not included in the prior year period. Excluding the contribution of these acquisitions, Manufacturing sales increased 9 percent for the quarter and total net sales increased 7 percent. For the nine months ended September 30, 2000, net sales increased $67.2 million or 16 percent compared with the same period in 1999. On a segment basis, sales in the Distribution segment are down 2 percent for the nine month period while sales in the Manufacturing segment increased $69.5 million or 23 percent based on an increase of 6 percent for existing business units combined with 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 $5.1 million for the quarter and $13.1 million for the nine month period ended September 30, 2000. Without the translation effect and excluding the impact of acquired businesses, total sales would have increased 10 percent for the quarter and 7 percent for the nine months, and Manufacturing segment sales would have increased 14 percent for the quarter and 10 percent for the nine months.
Cost of sales increased $14.2 million or 15 percent for the quarter ended September 30, 2000 and $54.9 million or 21 percent for the nine month period. Expressed as a percentage of sales, gross profit fell to 31.1 percent in the quarter and 33.6 percent for the nine months ended September 30, 2000 compared with 34.5 percent for the quarter and 36.1 percent for the nine 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.
Total operating expenses increased $0.7 million or 2 percent for the quarter and $10.4 million or 10 percent for the nine months ended September 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 24.0 percent in the quarter and 23.2 percent for the nine months ended September 30, 2000 compared to 25.8 percent for the quarter and 24.5 percent for the nine month period last year. This improvement in operating leverage is principally due to on-going cost control programs and improved fixed expense coverage from increased sales.
-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 $1.1 million or 24 percent for the quarter and $6.2 million or 61 percent for the nine months ended September 30, 2000. The increased interest expense is primarily due to 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 41.7 percent for the quarter and 42 percent for the nine months ended September 30, 2000 compared with 48.9 percent for the quarter and 43.7 percent in the nine month period in 1999. The higher tax rate in 1999 is attributable to the impact of non-deductible amortization expense combined with foreign tax rate differences.
LIQUIDITY AND CAPITAL RESOURCES
Cash provided by operating activities was $43.7 million for the nine months ended September 30, 2000 compared with $34.9 million for same period in the prior year. Long-term debt at September 30, 2000 was reduced $12.2 million from December 31, 1999 and debt as a percentage of total capitalization was 58 percent at September 30, 2000. Working capital increased from $104.7 million at December 31, 1999 to $113.4 million at September 30, 2000.
Capital expenditures for the nine months ended September 30, 2000 were $22.7 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 6. | Exhibits and Reports on Form 8-K | |||
(a) | Exhibits | |||
27 | Financial Data Schedule | |||
(c) | Form 8-K | |||
No Reports on Form 8-K were filed during the quarter |
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.
11/13/00 | By: /s/ Gregory J. Stodnick | |||
Date | Gregory J. Stodnick | |||
Vice President-Finance | ||||
Financial Officer (Duly Authorized | ||||
Officer and Principal Financial | ||||
and Accounting Officer) |
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