1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) |X| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 1997 ------------------------------------------ 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. ----------------------------------------------------- (Exact name of registrant as specified in its charter) OHIO #34-0778636 - ------------------------------------------------------------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 1293 SOUTH MAIN STREET, AKRON, OHIO 44301 - ------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (330) 253-5592 ----------------------------- Indicate whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X . No . ------- -------- Applicable Only to Issuers Involved in Bankruptcy Proceedings During the Preceding Five Years Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes . No . ------- -------- As of April 30, 1997, the number of shares outstanding of the issuer's Common Stock was: 16,874,710
2 -1- PART I - FINANCIAL INFORMATION --------------------------------- MYERS INDUSTRIES, INC. ---------------------- CONDENSED STATEMENT OF CONSOLIDATED FINANCIAL POSITION AS OF MARCH 31, 1997 AND DECEMBER 31, 1996 ------------------------------------------------------ <TABLE> <CAPTION> March 31, December 31, ASSETS 1997 1996 ----------- ------------- ------------- <S> <C> <C> CURRENT ASSETS Cash and temporary cash investments $7,534,793 $5,600,349 Accounts receivable-less allowances of $2,228,000 and $2,213,000, respectively 56,762,581 57,604,506 Inventories Finished and in-process products 35,907,812 33,042,266 Raw materials and supplies 6,999,725 6,788,086 ------------- ------------- 42,907,537 39,830,352 Prepaid expenses 2,378,310 3,274,673 ------------- ------------- TOTAL CURRENT ASSETS 109,583,221 106,309,880 OTHER ASSETS Excess of cost over fair value of net assets of companies acquired 14,207,270 14,328,410 Patents and other intangible assets 2,669,806 2,750,530 Other 2,540,644 3,072,974 ------------- ------------- 19,417,720 20,151,914 PROPERTY, PLANT & EQUIPMENT, AT COST Land 2,410,409 2,547,509 Buildings and leasehold improvements 39,224,731 38,918,648 Machinery and equipment 115,708,334 108,594,273 ------------- ------------- 157,343,474 150,060,430 Less allowances for depreciation and amortization 72,056,040 69,400,497 ------------- ------------- 85,287,434 80,659,933 ------------- ------------- $214,288,375 $207,121,727 ============= ============= </TABLE>
3 -2- PART I - FINANCIAL INFORMATION ---------------------------------- MYERS INDUSTRIES, INC. --------------------- CONDENSED STATEMENT OF CONSOLIDATED FINANCIAL POSITION AS OF MARCH 31, 1997 AND DECEMBER 31, 1996 ------------------------------------------ <TABLE> <CAPTION> March 31, December 31, LIABILITIES AND SHAREHOLDERS' EQUITY 1997 1996 - ------------------------------------ -------------- ------------- <S> <C> <C> CURRENT LIABILITIES Accounts payable $18,367,822 $15,189,488 Employee compensation and related items 8,220,937 10,562,313 Accrued expenses Taxes, other than income taxes 1,188,150 1,062,498 Income taxes 3,881,261 1,452,107 Other 7,991,174 8,066,838 Current portion of long-term debt 463,756 519,769 ------------- ------------- TOTAL CURRENT LIABILITIES 40,113,100 36,853,013 LONG-TERM DEBT, less current portion 4,508,122 4,569,396 DEFERRED INCOME TAXES 3,253,791 3,254,327 SHAREHOLDERS' EQUITY Serial Preferred Shares (authorized 1,000,000) ----- ----- Common Shares, without par value (authorized 30,000,000 shares; outstanding 16,862,355 and 16,854,529, respectively) 10,790,881 10,659,714 Additional paid-in capital 109,864,137 109,864,137 Foreign currency translation adjustment (341,753) (213,572) Retained income 46,100,097 42,134,712 ------------- ------------- 166,413,362 162,444,991 ------------- ------------- $214,288,375 $207,121,727 ============= ============= </TABLE>
4 -3- PART I - FINANCIAL INFORMATION --------------------------------- MYERS INDUSTRIES, INC. ---------------------- CONDENSED STATEMENT OF CONSOLIDATED INCOME ------------------------------------------ FOR THE THREE MONTHS ENDED MARCH 31, 1997 AND 1996 -------------------------------------------------- <TABLE> <CAPTION> March 31, March 31, 1997 1996 ---------------- ------------- <S> <C> <C> Net sales $76,798,621 $72,554,256 Costs and expenses Cost of sales 52,711,406 48,204,214 Operating expenses 15,930,546 15,307,569 Interest expense, net 7,166 169,538 ---------------- ------------- Total costs & expenses 68,649,118 63,681,321 Income before income taxes 8,149,503 8,872,935 Income taxes 3,341,000 3,658,000 ---------------- ------------- Net income $4,808,503 $5,214,935 ================ ============= Net income per common share $.29 $.31 Dividends per common share $.05 $.04 Weighted average number of common shares outstanding 16,860,399 16,919,909 </TABLE>
5 -4- PART I - FINANCIAL INFORMATION --------------------------------- MYERS INDUSTRIES, INC. --------------------- STATEMENTS OF CONSOLIDATED CASH FLOWS FOR THE THREE MONTHS ENDED MARCH 31, 1997 AND 1996 -------------------------------------------------- <TABLE> <CAPTION> March 31, March 31, 1997 1996 CASH FLOWS FROM OPERATING ACTIVITIES -------------- ------------- <S> <C> <C> Net income $4,808,503 $5,214,935 Items not affecting use of cash Depreciation 2,891,801 2,591,579 Amortization of excess of cost over fair value of net assets of companies acquired 121,140 138,840 Amortization of other intangible assets 113,559 90,612 Cash flow provided by (used for) working capital Accounts receivable 841,925 628,037 Inventories (3,077,185) 834,422 Prepaid expenses 878,864 (41,851) Accounts payable and accrued expenses 3,316,100 3,502,614 -------------- ------------- Net cash provided by operating activities 9,894,707 12,959,188 CASH FLOWS FROM INVESTING ACTIVITIES Additions to property, plant and equipment, net (7,519,301) (4,416,457) Other 388,276 (66,479) -------------- ------------- Net cash used for investing activities (7,131,025) (4,482,936) CASH FLOWS FROM FINANCING ACTIVITIES Borrowings (repayments) - net (117,287) (6,846,593) Cash dividends paid (843,118) (677,053) Proceeds from issuance of common stock 131,167 286,226 -------------- ------------- Net cash provided by (used for) financing activities (829,238) (7,237,420) INCREASE IN CASH AND TEMPORARY CASH INVESTMENTS 1,934,444 1,238,832 CASH AND TEMPORARY CASH INVESTMENTS JANUARY 1 5,600,349 3,387,562 -------------- ------------- CASH AND TEMPORARY CASH INVESTMENTS MARCH 31 $7,534,793 $4,626,394 ============== ============= </TABLE>
6 -5- PART I - FINANCIAL INFORMATION ------------------------------ MYERS INDUSTRIES, INC. ---------------------- NOTES TO FINANCIAL STATEMENTS ----------------------------- (1) Statement of Accounting Policy ------------------------------ The accompanying financial statements include the accounts of Myers Industries, Inc. and subsidiaries (Company), and have been prepared without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to those rules and regulations, although the Company believes that the disclosures are adequate to make the information not misleading. It is suggested that these financial statements be read in conjunction with the financial statements and notes thereto included in the Company's latest annual report on Form 10-K. In the opinion of the Company, the accompanying financial statements contain all adjustments (consisting of only normal recurring accruals) necessary to present fairly the financial position as of March 31, 1997, and the results of operations and cash flows for the three months ended March 31, 1997 and 1996. (2) Supplemental Disclosure of Cash Flow Information ------------------------------------------------ The Company made cash payments for interest expense of $145,202 and $396,982 for the three months ended March 31, 1997 and 1996, respectively. Cash payments for income taxes were $1,021,198 and $1,269,618 for the three months ended March 31, 1997 and 1996, respectively.
7 -6- PART I - FINANCIAL INFORMATION ------------------------------ MYERS INDUSTRIES, INC. ---------------------- MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS --------------------------------------------- RESULTS OF OPERATIONS - --------------------- Net sales for the three months ended March 31, 1997 increased $4,244,365 or 5.8 percent which is primarily attributed to volume increases in the Company's distribution business segment. Cost of sales for the three month period ended March 31, 1997 increased $4,507,192 or 9.4 percent as compared to the same period in 1996. Gross profit, expressed as a percentage of sales, decreased to 31.4 percent in 1997 from 33.6 percent in the same year ago period. This decrease is attributable to higher raw material costs, primarily plastic resins. Operating expenses increased $622,977 or 4.1 percent for the three month period in 1997 as compared to the same period in 1996. Expressed as a percentage of sales, operating expenses decreased to 20.7 percent in 1997 from 21.1 percent for the three month period in 1996. This improvement reflects on-going cost control programs and better fixed expense coverage. Net interest expense for the three month period ended March 31, 1997 decreased to $7,166 from $169,538 in 1996. The decrease is the result of lower average borrowing levels in the current year. Income taxes, expressed as a percentage of income before income taxes, decreased from 41.2 percent for the three month period in 1996 to 41.0 percent in 1997.
8 -7- LIQUIDITY AND CAPITAL RESOURCES - ------------------------------- Cash provided by operating activities is the primary source of liquidity and amounted to $9,894,707 for the three months ended March 31, 1997. Long-term debt was reduced by $117,287 during the first three months of 1997 and debt as a percentage of total capitalization decreased to 2.9 percent compared to 3.0 percent at December 31, 1996. Working capital increased to $69,470,121 at March 31, 1997 from $69,456,867 at December 31, 1996. Capital expenditures for the three months ended March 31, 1997 were $7,519,302. The Company currently anticipates annual capital expenditures in the range of $15.0 to $20.0 million over the next five years, primarily for increased polymer manufacturing capacity. Management believes that anticipated cash flows from operations and available credit facilities will be sufficient to fund capital expenditures and meet its short-term and long-term operating needs.
9 -8- PART II - OTHER INFORMATION --------------------------- MYERS INDUSTRIES, INC. ---------------------- Item 6 Exhibits and Reports on Form 8-K -------------------------------- (a) Exhibits (3)(ii) Amended and Restated Code of Regulations (10) Wiskind Supplemental Compensation Agreement (27) Financial Data Schedule (filed only electronically with the SEC) (b) Form 8-K None SIGNATURE --------- Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. MYERS INDUSTRIES, INC. 5/14/97 By: \s\ Gregory J. Stodnick - -------------------- ----------------------------- Date Gregory J. Stodnick Vice President-Finance Financial Officer (Duly Authorized Officer and Principal Financial and Accounting Officer)