þ | Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
o | Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
Ohio | 34-0778636 |
(State or other jurisdiction of | (IRS Employer Identification |
incorporation or organization) | Number) |
1293 South Main Street | |
Akron, Ohio | 44301 |
(Address of principal executive offices) | (Zip code) |
Large accelerated filer o | Accelerated filer þ | Non-accelerated filer o | Smaller reporting company o |
Class | Outstanding as of August 1, 2013 | |
Common Stock, without par value | 33,635,816 shares |
Exhibit 31(a) | |
Exhibit 31(b) | |
Exhibit 32 | |
EX-101 INSTANCE DOCUMENT | |
EX-101 SCHEMA DOCUMENT | |
EX-101 CALCULATION LINKBASE DOCUMENT | |
EX-101 LABELS LINKBASE DOCUMENT | |
EX-101 PRESENTATION LINKBASE DOCUMENT | |
EX-101 DEFINITION LINKBASE DOCUMENT |
For the Three Months Ended | For the Six Months Ended | ||||||||||||||
June 30, 2013 | June 30, 2012 | June 30, 2013 | June 30, 2012 | ||||||||||||
Net sales | $ | 204,024 | $ | 181,101 | $ | 419,004 | $ | 379,890 | |||||||
Cost of sales | 148,255 | 133,737 | 304,917 | 274,528 | |||||||||||
Gross profit | 55,769 | 47,364 | 114,087 | 105,362 | |||||||||||
Selling, general and administrative expenses | 42,650 | 37,372 | 87,724 | 78,253 | |||||||||||
Operating income | 13,119 | 9,992 | 26,363 | 27,109 | |||||||||||
Interest expense, net | 1,116 | 1,054 | 2,208 | 2,135 | |||||||||||
Income before income taxes | 12,003 | 8,938 | 24,155 | 24,974 | |||||||||||
Income tax expense | 3,691 | 3,280 | 7,960 | 9,331 | |||||||||||
Net income | $ | 8,312 | $ | 5,658 | $ | 16,195 | $ | 15,643 | |||||||
Income per common share: | |||||||||||||||
Basic | $ | 0.25 | $ | 0.17 | $ | 0.48 | $ | 0.47 | |||||||
Diluted | $ | 0.25 | $ | 0.17 | $ | 0.48 | $ | 0.46 | |||||||
Dividends declared per share | $ | 0.09 | $ | 0.08 | $ | 0.18 | $ | 0.16 |
For the Three Months Ended | For The Six Months Ended | ||||||||||||||
June 30, 2013 | June 30, 2012 | June 30, 2013 | June 30, 2012 | ||||||||||||
Net income | $ | 8,312 | $ | 5,658 | $ | 16,195 | $ | 15,643 | |||||||
Other comprehensive income (loss), net of tax: | |||||||||||||||
Foreign currency translation adjustment | (4,994 | ) | (612 | ) | (5,845 | ) | 773 | ||||||||
Pension liability | — | — | (75 | ) | 632 | ||||||||||
Total other comprehensive income (loss), net of tax | (4,994 | ) | (612 | ) | (5,920 | ) | 1,405 | ||||||||
Comprehensive income | $ | 3,318 | $ | 5,046 | $ | 10,275 | $ | 17,048 |
Assets | June 30, 2013 | December 31, 2012 | |||||
(Unaudited) | |||||||
Current Assets | |||||||
Cash | $ | 22,258 | $ | 3,948 | |||
Accounts receivable-less allowances of $3,310 and $3,255, respectively | 108,518 | 115,508 | |||||
Inventories | |||||||
Finished and in-process products | 73,794 | 72,899 | |||||
Raw materials and supplies | 32,321 | 34,603 | |||||
106,115 | 107,502 | ||||||
Prepaid expenses | 9,832 | 9,033 | |||||
Deferred income taxes | 2,191 | 3,605 | |||||
Total Current Assets | 248,914 | 239,596 | |||||
Other Assets | |||||||
Goodwill | 60,285 | 61,056 | |||||
Patents and other intangible assets | 23,379 | 25,839 | |||||
Other | 8,138 | 7,882 | |||||
91,802 | 94,777 | ||||||
Property, Plant and Equipment, at Cost | |||||||
Land | 4,438 | 4,438 | |||||
Buildings and leasehold improvements | 57,156 | 57,058 | |||||
Machinery and equipment | 448,970 | 445,789 | |||||
510,564 | 507,285 | ||||||
Less allowances for depreciation and amortization | (368,309 | ) | (356,802 | ) | |||
Property, plant and equipment, net | 142,255 | 150,483 | |||||
Total Assets | $ | 482,971 | $ | 484,856 |
Liabilities and Shareholders’ Equity | June 30, 2013 | December 31, 2012 | |||||
(Unaudited) | |||||||
Current Liabilities | |||||||
Accounts payable | $ | 64,717 | $ | 72,417 | |||
Accrued expenses | |||||||
Employee compensation | 15,772 | 18,885 | |||||
Income taxes | — | 1,090 | |||||
Taxes, other than income taxes | 3,061 | 2,606 | |||||
Accrued interest | 241 | 240 | |||||
Other | 20,295 | 19,239 | |||||
Total Current Liabilities | 104,086 | 114,477 | |||||
Long-term debt | 95,988 | 92,814 | |||||
Other liabilities | 17,911 | 17,865 | |||||
Deferred income taxes | 29,966 | 29,678 | |||||
Shareholders’ Equity | |||||||
Serial Preferred Shares (authorized 1,000,000 shares; none issued and outstanding) | — | — | |||||
Common Shares, without par value (authorized 60,000,000 shares; outstanding 33,637,573 and 33,480,189; net of treasury shares of 4,170,559 and 4,356,160, respectively) | 20,361 | 20,316 | |||||
Additional paid-in capital | 267,236 | 266,419 | |||||
Accumulated other comprehensive income | 4,723 | 10,643 | |||||
Retained deficit | (57,300 | ) | (67,356 | ) | |||
Total Shareholders' Equity | 235,020 | 230,022 | |||||
Total Liabilities and Shareholders' Equity | $ | 482,971 | $ | 484,856 |
Common Stock | Additional Paid-In Capital | Accumulative Other Comprehensive Income | Retained Income (Deficit) | ||||||||||||
Balance at January 1, 2013 | $ | 20,316 | $ | 266,419 | $ | 10,643 | $ | (67,356 | ) | ||||||
Net income | — | — | — | 16,195 | |||||||||||
Other comprehensive income (loss) | — | — | (5,920 | ) | — | ||||||||||
Shares repurchased for employee taxes on equity awards | — | (684 | ) | — | — | ||||||||||
Purchases for treasury | (145 | ) | (3,153 | ) | — | — | |||||||||
Common stock issued | 190 | 3,072 | — | — | |||||||||||
Other | — | 50 | — | — | |||||||||||
Stock based compensation | — | 1,532 | — | — | |||||||||||
Dividends declared - $.18 per share | — | — | — | (6,139 | ) | ||||||||||
Balance at June 30, 2013 | $ | 20,361 | $ | 267,236 | $ | 4,723 | $ | (57,300 | ) |
For the Six Months Ended | |||||||
June 30, 2013 | June 30, 2012 | ||||||
Cash Flows from Operating Activities | |||||||
Net income | $ | 16,195 | $ | 15,643 | |||
Items not affecting use of cash: | |||||||
Depreciation | 16,146 | 14,737 | |||||
Amortization of intangible assets | 2,046 | 1,514 | |||||
Non-cash stock compensation | 1,532 | 1,556 | |||||
Provision for (recovery of) loss on accounts receivable | 496 | (1,178 | ) | ||||
Deferred taxes | 2,140 | (18 | ) | ||||
Other long-term liabilities | 334 | 785 | |||||
Loss (gain) from asset disposition | 616 | (558 | ) | ||||
Other | 11 | 50 | |||||
Cash flows provided by (used for) working capital, net of acquisitions: | |||||||
Accounts receivable | 5,216 | 10,384 | |||||
Inventories | (735 | ) | (12,285 | ) | |||
Prepaid expenses | (1,048 | ) | (3,743 | ) | |||
Accounts payable and accrued expenses | (12,812 | ) | (18,967 | ) | |||
Net cash provided by operating activities | 30,137 | 7,920 | |||||
Cash Flows from Investing Activities | |||||||
Capital expenditures | (10,216 | ) | (8,386 | ) | |||
Acquisition of business, net of cash acquired | (600 | ) | — | ||||
Proceeds from sale of property, plant and equipment | — | 1,805 | |||||
Other | (11 | ) | (149 | ) | |||
Net cash used for investing activities | (10,827 | ) | (6,730 | ) | |||
Cash Flows from Financing Activities | |||||||
Repayment of long-term debt | — | (305 | ) | ||||
Net borrowing on credit facility | 3,173 | 28,374 | |||||
Cash dividends paid | (3,019 | ) | (4,967 | ) | |||
Proceeds from issuance of common stock | 3,262 | 2,822 | |||||
Tax benefit from options | 50 | — | |||||
Repurchase of common stock | (3,982 | ) | — | ||||
Net cash (used for) provided by financing activities | (516 | ) | 25,924 | ||||
Foreign exchange rate effect on cash | (484 | ) | 1,697 | ||||
Net increase in cash | 18,310 | 28,811 | |||||
Cash at January 1 | 3,948 | 6,801 | |||||
Cash at June 30 | $ | 22,258 | $ | 35,612 |
Level 1: | Unadjusted quoted prices in active markets for identical assets or liabilities. |
Level 2: | Unadjusted quoted prices in active markets for similar assets or liabilities, unadjusted quoted prices for identical or similar assets or liabilities in markets that are not active or inputs that are observable either directly or indirectly. |
Level 3: | Unobservable inputs for which there is little or no market data or which reflect the entity’s own assumptions. |
Foreign currency | Defined benefit pension plans | Total | |||||||||
Balance at January 1, 2012 | $ | 9,994 | $ | (2,700 | ) | $ | 7,294 | ||||
Other comprehensive income before reclassifications | 1,385 | — | 1,385 | ||||||||
Amounts reclassified from AOCI to income tax expense (benefit) in the Condensed Consolidated Statements of Income | — | 632 | 632 | ||||||||
Net current-period other comprehensive income | $ | 1,385 | $ | 632 | $ | 2,017 | |||||
Balance at March 31, 2012 | $ | 11,379 | $ | (2,068 | ) | $ | 9,311 | ||||
Other comprehensive income before reclassifications | (612 | ) | — | (612 | ) | ||||||
Balance at June 30, 2012 | $ | 10,767 | $ | (2,068 | ) | $ | 8,699 | ||||
Balance at January 1, 2013 | $ | 12,784 | $ | (2,141 | ) | $ | 10,643 | ||||
Other comprehensive income before reclassifications | (851 | ) | — | (851 | ) | ||||||
Amounts reclassified from AOCI to income tax expense (benefit) in the Condensed Consolidated Statements of Income | — | (75 | ) | (75 | ) | ||||||
Net current-period other comprehensive income | $ | (851 | ) | $ | (75 | ) | $ | (926 | ) | ||
Balance at March 31, 2013 | $ | 11,933 | $ | (2,216 | ) | $ | 9,717 | ||||
Other comprehensive income before reclassifications | (4,994 | ) | — | (4,994 | ) | ||||||
Balance at June 30, 2013 | $ | 6,939 | $ | (2,216 | ) | $ | 4,723 |
For the Three Months Ended June 30, | For the Six Months Ended June 30, | ||||||
2012 | 2012 | ||||||
Net sales | $ | 194,365 | $ | 406,949 | |||
Cost of sales | 143,257 | 293,734 | |||||
Gross profit | 51,108 | 113,215 | |||||
Selling, general & administrative expenses | 39,912 | 83,231 | |||||
Operating income | 11,196 | 29,984 | |||||
Interest expense, net | 2,866 | 5,081 | |||||
Income before taxes | 8,330 | 24,903 | |||||
Income taxes | 3,049 | 9,304 | |||||
Net income | $ | 5,281 | $ | 15,599 | |||
Income per basic share | $ | 0.16 | $ | 0.47 | |||
Income per diluted share | $ | 0.15 | $ | 0.46 |
Assets acquired: | Novel | Jamco | |||||
Cash | $ | 630 | $ | 88 | |||
Accounts receivable | 5,467 | 1,690 | |||||
Inventory | 5,993 | 3,282 | |||||
Property, plant and equipment | 13,636 | 2,559 | |||||
Intangibles | 5,790 | 5,680 | |||||
Deferred tax assets | 435 | 28 | |||||
Prepaid assets | 1,451 | 48 | |||||
Other | 719 | 2 | |||||
Assets acquired, less cash | $ | 33,491 | $ | 13,289 | |||
Liabilities assumed: | |||||||
Accounts payable and accruals | $ | 3,134 | $ | 1,436 | |||
Other taxes | 3,608 | 676 | |||||
Other long-term liabilities | 2,293 | 454 | |||||
Debt | 26,028 | — | |||||
Deferred income taxes | 3,804 | 3,044 | |||||
Liabilities assumed | 38,867 | 5,610 | |||||
Goodwill | 8,805 | 7,435 | |||||
Total cash consideration, less cash acquired | $ | 3,429 | $ | 15,114 |
Segment | Balance at January 1, 2013 | Acquisitions | Foreign Currency Translation | Impairment | Balance at June 30, 2013 | ||||||||||||||
Material Handling | $ | 50,521 | $ | — | $ | (566 | ) | $ | — | $ | 49,955 | ||||||||
Lawn and Garden | 9,614 | — | (205 | ) | — | 9,409 | |||||||||||||
Distribution | 214 | — | — | — | 214 | ||||||||||||||
Engineered Products | 707 | — | — | — | 707 | ||||||||||||||
Total | $ | 61,056 | $ | — | $ | (771 | ) | $ | — | $ | 60,285 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||
Weighted average common shares outstanding | |||||||||||
Basic | 33,559,398 | 33,595,637 | 33,529,004 | 33,525,444 | |||||||
Dilutive effect of stock options and restricted stock | 318,554 | 677,056 | 368,958 | 596,042 | |||||||
Weighted average common shares outstanding diluted | 33,877,952 | 34,272,693 | 33,897,962 | 34,121,486 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||
Interest paid | $ | 445 | $ | 1,612 | $ | 971 | $ | 1,908 | |||||||
Income taxes paid | $ | 6,987 | $ | 10,827 | $ | 7,422 | $ | 13,282 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
Segment | 2013 | 2012 | 2013 | 2012 | |||||||||||
Material Handling | $ | 15 | $ | — | $ | 225 | $ | — | |||||||
Lawn and Garden | 736 | 419 | 1,139 | 442 | |||||||||||
Distribution | 18 | (20 | ) | 92 | 410 | ||||||||||
Engineered Products | — | 99 | 3 | 201 | |||||||||||
Corporate | — | — | 17 | — | |||||||||||
Total | $ | 769 | $ | 498 | $ | 1,476 | $ | 1,053 |
Severance and | Other | ||||||||||
Personnel | Exit Costs | Total | |||||||||
Balance at January 1, 2012 | $ | — | $ | 605 | $ | 605 | |||||
Provision | 651 | 402 | 1,053 | ||||||||
Less: Payments | (651 | ) | (532 | ) | (1,183 | ) | |||||
Balance at June 30, 2012 | $ | — | $ | 475 | $ | 475 | |||||
Balance at January 1, 2013 | $ | 318 | $ | — | $ | 318 | |||||
Provision | 522 | 954 | 1,476 | ||||||||
Less: Payments | (840 | ) | (954 | ) | (1,794 | ) | |||||
Balance at June 30, 2013 | $ | — | $ | — | $ | — |
Model | |||
Risk free interest rate | 1.86 | % | |
Expected dividend yield | 2.40 | % | |
Expected life of award (years) | 7.00 | ||
Expected volatility | 50.00 | % | |
Fair value per option share | $ | 5.39 |
Shares | Average Exercise Price | Weighted Average Life | ||||||
Outstanding at January 1, 2013 | 1,919,021 | $ | 11.63 | |||||
Options granted | 323,400 | 14.77 | ||||||
Options exercised | (306,892 | ) | 10.44 | |||||
Cancelled or forfeited | (140,020 | ) | 13.75 | |||||
Outstanding at June 30, 2013 | 1,795,509 | $ | 12.24 | 6.35 years | ||||
Exercisable at June 30, 2013 | 1,270,189 | $ | 11.74 | 5.23 years |
Awards | Average Grant-Date Fair Value | |||||
Unvested at January 1, 2013 | 363,125 | |||||
Granted | 169,100 | $ | 14.77 | |||
Released | (112,000 | ) | 10.02 | |||
Cancelled or forfeited | (124,200 | ) | 13.68 | |||
Unvested at June 30, 2013 | 296,025 | $ | 13.11 |
June 30, | December 31, | ||||||
2013 | 2012 | ||||||
Credit agreement | $ | 60,988 | $ | 57,814 | |||
Senior notes | 35,000 | 35,000 | |||||
$ | 95,988 | $ | 92,814 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||
Service cost | $ | 8 | $ | 18 | $ | 16 | $ | 35 | |||||||
Interest cost | 65 | 72 | 130 | 144 | |||||||||||
Expected return on assets | (91 | ) | (77 | ) | (182 | ) | (153 | ) | |||||||
Amortization of actuarial net loss | 28 | 25 | 56 | 50 | |||||||||||
Net periodic pension cost | $ | 10 | $ | 38 | $ | 20 | $ | 76 | |||||||
Company contributions | $ | 80 | $ | 123 | $ | 203 | $ | 199 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
Net Sales | 2013 | 2012 | 2013 | 2012 | |||||||||||
Material Handling | $ | 83,814 | $ | 60,260 | $ | 163,803 | $ | 125,481 | |||||||
Lawn and Garden | 40,889 | 42,482 | 101,252 | 101,666 | |||||||||||
Distribution | 45,893 | 44,188 | 88,542 | 86,926 | |||||||||||
Engineered Products | 37,608 | 38,642 | 74,564 | 75,869 | |||||||||||
Inter-company Sales | (4,180 | ) | (4,471 | ) | (9,157 | ) | (10,052 | ) | |||||||
Net Sales | $ | 204,024 | $ | 181,101 | $ | 419,004 | $ | 379,890 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
Income Before Income Taxes | 2013 | 2012 | 2013 | 2012 | |||||||||||
Material Handling | $ | 11,010 | $ | 9,223 | $ | 20,715 | $ | 22,373 | |||||||
Lawn and Garden | (109 | ) | (1,942 | ) | 2,172 | (724 | ) | ||||||||
Distribution | 3,864 | 4,298 | 6,703 | 7,809 | |||||||||||
Engineered Products | 5,134 | 4,660 | 10,211 | 9,251 | |||||||||||
Corporate | (6,780 | ) | (6,247 | ) | (13,438 | ) | (11,600 | ) | |||||||
Interest expense - net | (1,116 | ) | (1,054 | ) | (2,208 | ) | (2,135 | ) | |||||||
Income before income taxes | $ | 12,003 | $ | 8,938 | $ | 24,155 | $ | 24,974 |
(dollars in millions) | Quarter Ended June 30, | |||||||||||||
Segment | 2013 | 2012 | Change | % Change | ||||||||||
Material Handling | $ | 83.8 | $ | 60.3 | $ | 23.5 | 39 | % | ||||||
Lawn and Garden | 40.9 | 42.5 | (1.6 | ) | (4 | )% | ||||||||
Distribution | 45.9 | 44.2 | 1.7 | 4 | % | |||||||||
Engineered Products | 37.6 | 38.6 | (1.0 | ) | (3 | )% | ||||||||
Inter-company Sales | (4.2 | ) | (4.5 | ) | 0.3 | 7 | % | |||||||
TOTAL | $ | 204.0 | $ | 181.1 | $ | 22.9 | 13 | % |
(dollars in millions) | Quarter Ended June 30, | ||||||
2013 | 2012 | ||||||
Cost of sales | $ | 148.3 | $ | 133.7 | |||
Gross profit | $ | 55.8 | $ | 47.4 | |||
Gross profit as a percentage of sales | 27.3 | % | 26.2 | % |
(dollars in millions) | Quarter Ended June 30, | |||||||||||||
2013 | 2012 | Change | % Change | |||||||||||
SG&A expenses | $ | 42.7 | $ | 37.4 | $ | 5.3 | 14.2 | % | ||||||
SG&A expenses as a percentage of sales | 20.9 | % | 20.7 | % |
(dollars in millions) | Quarter Ended June 30, | |||||||||||||
2013 | 2012 | Change | % Change | |||||||||||
Net interest expense | $ | 1.1 | $ | 1.1 | $ | — | — | % | ||||||
Outstanding borrowings | $ | 96.0 | $ | 102.1 | $ | (6.1 | ) | |||||||
Average borrowing rate | 4.17 | % | 5.61 | % |
(dollars in millions) | Quarter Ended June 30, | ||||||
2013 | 2012 | ||||||
Income before taxes | $ | 12.0 | $ | 8.9 | |||
Income taxes | $ | 3.7 | $ | 3.3 | |||
Effective tax rate | 30.8 | % | 36.7 | % |
(dollars in millions) | Six Months Ended June 30, | |||||||||||||
Segment | 2013 | 2012 | Change | % Change | ||||||||||
Material Handling | $ | 163.8 | $ | 125.5 | $ | 38.3 | 31 | % | ||||||
Lawn and Garden | 101.3 | 101.7 | (0.4 | ) | — | % | ||||||||
Distribution | 88.5 | 86.9 | 1.6 | 2 | % | |||||||||
Engineered Products | 74.6 | 75.9 | (1.3 | ) | (2 | )% | ||||||||
Intra-segment elimination | (9.2 | ) | (10.1 | ) | 0.9 | (9 | %) | |||||||
TOTAL | $ | 419.0 | $ | 379.9 | $ | 39.1 | 10 | % |
(dollars in millions) | Six Months Ended June 30, | ||||||
2013 | 2012 | ||||||
Cost of sales | $ | 304.9 | $ | 274.5 | |||
Gross profit | $ | 114.1 | $ | 105.4 | |||
Gross profit as a percentage of sales | 27.2 | % | 27.7 | % |
(dollars in millions) | Six Months Ended June 30, | |||||||||||||
2013 | 2012 | Change | % Change | |||||||||||
SG&A expenses | $ | 87.7 | $ | 78.3 | $ | 9.4 | 12.0 | % | ||||||
SG&A expenses as a percentage of sales | 20.9 | % | 20.6 | % |
(dollars in millions) | Six Months Ended June 30, | |||||||||||||
2013 | 2012 | Change | % Change | |||||||||||
Net interest expense | $ | 2.2 | $ | 2.1 | $ | 0.1 | 5 | % | ||||||
Outstanding borrowings | $ | 96.0 | $ | 102.1 | $ | (6.1 | ) | |||||||
Average borrowing rate | 4.35 | % | 4.98 | % |
(dollars in millions) | Six Months Ended June 30, | ||||||
2013 | 2012 | ||||||
Income before taxes | $ | 24.2 | $ | 25.0 | |||
Income taxes | $ | 8.0 | $ | 9.3 | |||
Effective tax rate | 33.0 | % | 37.4 | % |
Required Level | Actual Level | |||
Interest Coverage Ratio | 2.25 to 1 (minimum) | 11.08 | ||
Leverage Ratio | 3.25 to 1 (maximum) | 1.14 |
Total Number of Shares Purchased | Average Price Paid per Share | Total Number of Shares Purchased as Part of the Publicly Announced Program | Maximum number of Shares that may yet be Purchased Under the Plan (1) | |||||||||
4/1/13 to 4/30/13 | 101,657 | $ | 13.21 | 535,472 | 2,464,528 | |||||||
5/1/13 to 5/31/13 | — | $ | — | — | 2,464,528 | |||||||
6/1/13 to 6/30/13 | — | $ | — | — | 2,464,528 |
(1) | On May 20, 2013, the Company adopted a Rule 10b5-1 plan (the “Plan”) for the purpose of repurchasing up to two million shares of its common stock in accordance with the guidelines specified in Rule 10b5-1 of the Securities Exchange Act of 1934. The Plan was established in connection with the Board authorized repurchase of up to five million shares that was announced on May 2, 2011. The Company previously completed a repurchase of approximately five hundred thirty five thousand shares in April 2013, and two million shares in 2011 pursuant to previous Rule 10b5-1 plans, which were also in connection with the authorized five million share repurchase. |
MYERS INDUSTRIES, INC. | |||
August 5, 2013 | By: | /s/ Greggory W. Branning | |
Greggory W. Branning | |||
Senior Vice President, Chief Financial Officer and Corporate Secretary (Duly Authorized Officer and Principal Financial and Accounting Officer) |
3(a) | Myers Industries, Inc. Amended and Restated Articles of Incorporation. Reference is made to Exhibit 3(a) to Form 10-K filed with the Commission on March 16, 2005. |
3(b) | Myers Industries, Inc. Amended and Restated Code of Regulations. Reference is made to Exhibit 3.1 to Form 8-K filed with the Commission on April 12, 2013. |
10(a) | Myers Industries, Inc. Amended and Restated Employee Stock Purchase Plan. Reference is made to Exhibit 10(a) to Form 10-K filed with the Commission on March 30, 2001. |
10(b) | Form of Indemnification Agreement for Directors and Officers. Reference is made to Exhibit 10.1 to Form 10-Q filed with the Commission on May 1, 2009. |
10(c) | Myers Industries, Inc. Amended and Restated Dividend Reinvestment and Stock Purchase Plan. Reference is made to Exhibit 99 to Post-Effective Amendment No. 2 to Form S-3 filed with the Commission on March 19, 2004. |
10(d) | Myers Industries, Inc. Amended and Restated 1999 Incentive Stock Plan. Reference is made to Exhibit 10(f) to Form 10-Q filed with the Commission on August 9, 2006.* |
10(e) | 2008 Incentive Stock Plan of Myers Industries, Inc. Reference is made to Exhibit 4.3 to Form S-8 filed with the Commission on March 17, 2009.* |
10(f) | Amendment No. 1 to the 2008 Incentive Stock Plan of Myers Industries, Inc. Reference is made to Exhibit 10.1 to Form 8-K filed with the Commission on August 3, 2010.* |
10(g) | Myers Industries, Inc. Executive Supplemental Retirement Plan. Reference is made to Exhibit (10)(g) to Form 10-K filed with the Commission on March 26, 2003.* |
10(h) | Severance Agreement between Myers Industries, Inc. and John C. Orr effective June 1, 2011. Reference is made to Exhibit 10.1 to Form 8-K filed with the Commission on March 7, 2011.* |
10(i) | Non-Disclosure and Non-Competition Agreement between Myers Industries, Inc. and John C. Orr dated July 18, 2000. Reference is made to Exhibit 10(j) to Form 10-Q filed with the Commission on May 6, 2003.* |
10(j) | Amendment to the Myers Industries, Inc. Executive Supplemental Retirement Plan (John C. Orr) effective June 1, 2008. Reference is made to Exhibit 10.2 to Form 8-K filed with the Commission on June 24, 2008.* |
10(k) | Severance Agreement between Myers Industries, Inc. and Gregg Branning dated September 1, 2012. Reference is made to Exhibit 10.1 to Form 8-K filed with the Commission on September 4, 2012.* |
10(l) | Third Amended and Restated Loan Agreement between Myers Industries, Inc. and JP Morgan Chase Bank, National Association, as Agent, dated as of November 19, 2010. Reference is made to Exhibit 10.1 to Form 8-K filed with the Commission on November 23, 2010. |
10(m) | Note Purchase Agreement between Myers Industries, Inc. and the Note Purchasers, dated December 12, 2003, regarding the issuance of $35,000,000 of 6.81% Series 2003-A Senior Notes due December 12, 2013. Reference is made to Exhibit 10(o) to Form 10-K filed with the Commission on March 15, 2004. |
10(n) | Third Amendment to the Myers Industries, Inc Executive Supplemental Retirement Plan (John C. Orr) effective June 1, 2011. Reference is made to Exhibit 10.2 to Form 8-K filed with the Commission on March 7, 2011.* |
10(o) | Amendment No. 2 to the 2008 Incentive Stock Plan of Myers Industries, Inc. Reference is made to Exhibit 10(u) to Form 10-K filed with the Commission on March 4, 2013.* |
10(p) | Non-Competition and Confidentiality Agreement between Myers Industries, Inc. and Gregg Branning dated September 1, 2012. Reference is made to Exhibit 10(s) to Form 10-Q filed with the Commission on May 1, 2013.* |
10(q) | Performance Bonus Plan of Myers Industries, Inc. Reference is made to Exhibit 10.1 to Form 8-K filed with the Commission on April 30, 2013.* |
14(a) | Myers Industries, Inc. Code of Business Conduct and Ethics. Reference is made to Exhibit 14(a) to Form 10-K/A filed with the Commission on April 1, 2013. |
14(b) | Myers Industries, Inc. Code of Ethical Conduct for the Finance Officers and Finance Department Personnel. Reference is made to Exhibit 14(b) to Form 10-K/A filed with the Commission on April 1, 2013. |
21 | List of Direct and Indirect Subsidiaries, and Operating Divisions, of Myers Industries, Inc. Reference is made to Exhibit 21 to Form 10-K filed with the Commission on March 4, 2013. |
31(a) | Certification of John C. Orr, President and Chief Executive Officer of Myers Industries, Inc., pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
31(b) | Certification of Greggory W. Branning, Senior Vice President, Chief Financial Officer and Corporate Secretary of Myers Industries, Inc., pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
32 | Certifications of John C. Orr, President and Chief Executive Officer, and Gregg W. Branning, Executive Vice President, Chief Financial Officer and Corporate Secretary, of Myers Industries, Inc. pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
101 | The following financial information from Myers Industries, Inc. Quarterly Report on Form 10-Q for the quarter ended June 30, 2013 filed with the SEC on August 5, 2013, formatted in XBRL includes: (i) Condensed Consolidated Statements of Financial Position at June 30, 2013 and December 31, 2012, (ii) Condensed Consolidated Statements of Income For the fiscal periods ended June 30, 2013 and 2012, (iii) Consolidated Statements of Comprehensive Income (Loss) For the fiscal periods ended June 30, 2013 and 2012, (iv) Condensed Consolidated Statements of Cash Flows For the fiscal periods ended June 30, 2013 and 2012, (v) Condensed Consolidated Statement of Shareholders' Equity for the fiscal period ended June 30, 2013, and (vi) the Notes to Unaudited Condensed Consolidated Financial Statements. |
* | Indicates executive compensation plan or arrangement. |
** | Pursuant to Item 601(b)(2) of Regulation S-K, certain exhibits and schedules have been omitted from this filing. The registrant agrees to furnish the Commission on a supplemental basis a copy of any omitted exhibit or schedule. |
Date: | August 5, 2013 | /s/ John C. Orr |
John C. Orr, President and Chief Executive Officer |
Date: | August 5, 2013 | /s/ Greggory W. Branning |
Greggory W. Branning, Senior Vice President, Chief Financial Officer and Corporate Secretary |
Dated: | August 5, 2013 | /s/ John C. Orr |
John C. Orr, President and Chief Executive Officer |
Dated: | August 5, 2013 | /s/ Greggory W. Branning |
Greggory W. Branning, Senior Vice President, Chief Financial Officer and Corporate Secretary |
Contingencies
|
6 Months Ended |
---|---|
Jun. 30, 2013
|
|
Commitments and Contingencies Disclosure [Abstract] | |
Contingencies | Contingencies The Company is a defendant in various lawsuits and a party to various other legal proceedings, in the ordinary course of business, some of which are covered in whole or in part by insurance. New Idria Mercury Mine Effective October 2011, the U.S. Environmental Protection Agency (“EPA”) added the New Idria Mercury Mine site located near Hollister, California to the Superfund National Priorities List because of alleged contaminants discharged to California waterways. The New Idria Quicksilver Mining Company, founded in 1936, and later renamed the New Idria Mining & Chemical Company ("NIMCC") owned and/or operated the New Idria Mine through 1976. In 1981 NIMCC was merged into Buckhorn Metal Products Inc. and subsequently acquired by Myers Industries in 1987. The EPA contends that past mining operations have resulted in mercury contamination and acid mine drainage in the San Carlos Creek, Silver Creek and a portion of Panoche Creek and that other downstream locations may also be impacted. Since Buckhorn Inc. may be a potentially responsible party (“PRP”) of the New Idria Mercury Mine, the Company recognized an expense of $1.9 million in 2011 related to performing a remedial investigation and feasibility study to determine the extent of remediation and the screening of alternatives. Payments of approximately $0.5 million have been charged against the reserve classified in Other Liabilities on the Condensed Consolidated Statements of Financial Position as of June 30, 2013. As the Site Remedial Investigation and Feasibility Study ("RI/FS") proceeds, it is likely that adjustments to the recognized expense will be necessary to reflect new information regarding the nature and extent of site contamination, the range of remediation alternatives available, and evolving remediation standards. The final remedial action will be selected after completion of the RI/FS. At that time the Company is likely to have additional information regarding remedial action costs, the number and financial condition of other PRPs, the extent of their responsibility for the remediation, and the availability of insurance coverage for these expenses. At this time, further remediation cost estimates are not known and have not been prepared. In November 2011 the EPA completed an interim removal project at the New Idria Mercury Mine site. It is expected this removal action will be part of the final remediation strategy for the site. According to informal reports, EPA's interim removal project costs were approximately $500,000. It is possible that at some future date the EPA will seek recovery of the costs of this work from PRPs. Other When management believes that a loss arising from these matters is probable and can reasonably be estimated, we record the amount of the estimated loss, or the minimum estimated liability when the loss is estimated using a range, and no point within the range is more probable of occurrence than another. As additional information becomes available, any potential liability related to these matters will be assessed and the estimates will be revised, if necessary. Based on current available information, management believes that the ultimate outcome of these matters will not have a material adverse effect on our financial position or overall trends in our results of operations. However, these matters are subject to inherent uncertainties, and unfavorable rulings could occur. If an unfavorable ruling were to occur, there exists the possibility of a material adverse impact on the financial position and results of operations of the period in which the ruling occurs, or in future periods. |
Segment Information Schedule of Net Sales by Segment (Details) (USD $)
In Thousands, unless otherwise specified |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2013
|
Jun. 30, 2012
|
Jun. 30, 2013
Segments
|
Jun. 30, 2012
|
|
Segment Reporting Information [Line Items] | ||||
Number of operating segments | 4 | |||
Net Sales | $ 204,024 | $ 181,101 | $ 419,004 | $ 379,890 |
Material Handling
|
||||
Segment Reporting Information [Line Items] | ||||
Net Sales | 83,814 | 60,260 | 163,803 | 125,481 |
Lawn and Garden
|
||||
Segment Reporting Information [Line Items] | ||||
Net Sales | 40,889 | 42,482 | 101,252 | 101,666 |
Distribution
|
||||
Segment Reporting Information [Line Items] | ||||
Net Sales | 45,893 | 44,188 | 88,542 | 86,926 |
Engineered Products
|
||||
Segment Reporting Information [Line Items] | ||||
Net Sales | 37,608 | 38,642 | 74,564 | 75,869 |
Intra-segment Elimination [Member]
|
||||
Segment Reporting Information [Line Items] | ||||
Net Sales | $ (4,180) | $ (4,471) | $ (9,157) | $ (10,052) |
Inventories
|
6 Months Ended |
---|---|
Jun. 30, 2013
|
|
Inventory Disclosure [Abstract] | |
Inventories | Inventories Approximately twenty percent of the Company’s inventories use the last-in, first-out (LIFO) method of determining cost. An actual valuation of inventory under the LIFO method can be made only at the end of each year based on the inventory levels and costs at that time. Accordingly, interim LIFO calculations must necessarily be based on management’s estimates of expected year-end inventory levels and costs. Because these are subject to many factors beyond management’s control, estimated interim results, which were immaterial, are subject to change in the final year-end LIFO inventory valuation and therefore, no adjustment was recorded as of June 30, 2013. |
Acquisitions Acquisition Purchase Price Allocation (Tables)
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6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2013
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Acquisition Purchase Price Allocation [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Acquisition, Pro Forma Information | The following unaudited pro forma information presents a summary of consolidated results of operations for the Company including Novel and Jamco as if the acquisitions had occurred on January 1, 2012.
|
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Business Combination, Separately Recognized Transactions | The allocation of the purchase price and the estimated goodwill, which is not deductible for income tax purposes, and other intangibles are as follows:
|
Debt
|
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2013
|
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt | Long-Term Debt Long-term debt consisted of the following:
Under terms of the Credit Agreement with a group of banks, the Company may borrow up to $180 million, reduced for letters of credit issued. As of June 30, 2013, the Company had $114.1 million available under the Credit Agreement. In December 2003, the Company issued $100 million in Senior Unsecured Notes (the "Notes") consisting of $65 million of notes with an interest rate of 6.08 percent and a 7 year maturity and $35 million of notes with an interest rate of 6.81 percent and a 10 year maturity. Proceeds from the issuance of the Notes were used to pay down the term loan and revolving credit facility borrowing outstanding at that time. As of June 30, 2013, the Company has classified the $35 million of Senior Notes due in December 2013 as a long-term liability since it has the intent to refinance the debt on a long-term basis and has demonstrated the ability via capacity available under the non-cancelable revolver feature of the current Credit Agreement. |
Contingencies Contingencies (Details) (USD $)
|
12 Months Ended | 3 Months Ended | |
---|---|---|---|
Nov. 30, 2011
|
Dec. 31, 2011
General and Administrative Expense [Member]
Environmental Issue [Member]
Pending Litigation [Member]
New Idria Mercury Mine [Member]
|
Jun. 30, 2013
Other Liabilities [Member]
Environmental Issue [Member]
Pending Litigation [Member]
New Idria Mercury Mine [Member]
|
|
Loss Contingencies [Line Items] | |||
Expense related to remedial investigation and feasibility study | $ 1,900,000 | ||
Payments charged against the reserve | 500,000 | ||
Estimate of EPA's interim removal project costs | $ 500,000 |
Goodwill (Details) (USD $)
In Thousands, unless otherwise specified |
6 Months Ended |
---|---|
Jun. 30, 2013
|
|
Goodwill [Roll Forward] | |
Balance at January 1, 2013 | $ 61,056 |
Acquisitions | 0 |
Foreign Currency Translation | (771) |
Impairment | 0 |
Balance at June 30, 2013 | 60,285 |
Material Handling
|
|
Goodwill [Roll Forward] | |
Balance at January 1, 2013 | 50,521 |
Acquisitions | 0 |
Foreign Currency Translation | (566) |
Impairment | 0 |
Balance at June 30, 2013 | 49,955 |
Lawn and Garden
|
|
Goodwill [Roll Forward] | |
Balance at January 1, 2013 | 9,614 |
Acquisitions | 0 |
Foreign Currency Translation | (205) |
Impairment | 0 |
Balance at June 30, 2013 | 9,409 |
Distribution
|
|
Goodwill [Roll Forward] | |
Balance at January 1, 2013 | 214 |
Acquisitions | 0 |
Foreign Currency Translation | 0 |
Impairment | 0 |
Balance at June 30, 2013 | 214 |
Engineered Products
|
|
Goodwill [Roll Forward] | |
Balance at January 1, 2013 | 707 |
Acquisitions | 0 |
Foreign Currency Translation | 0 |
Impairment | 0 |
Balance at June 30, 2013 | $ 707 |
Supplemental Disclosure of Cash Flow Information (Tables)
|
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2013
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Supplemental Cash Flow Information [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Supplemental Disclosure of Cash Flow Information |
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Net Income Per Common Share (Tables)
|
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2013
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Weighted average number of common shares outstanding during the period | Net income per common share, as shown on the Condensed Consolidated Statements of Income (unaudited), is determined on the basis of the weighted average number of common shares outstanding during the period as follows:
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Inventories (Details)
|
Jun. 30, 2013
|
---|---|
Inventory Disclosure [Abstract] | |
Percentage of LIFO Inventory | 20.00% |
Net Income Per Common Share Weighted average number of common shares outstanding during the period (Details) (Stock Options [Member])
|
6 Months Ended | |
---|---|---|
Jun. 30, 2013
|
Jun. 30, 2012
|
|
Stock Options [Member]
|
||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Options to purchase common stock outstanding (in shares) | 470,000 | 227,000 |
Debt Schedule of Long-Term Debt (Details) (USD $)
In Thousands, unless otherwise specified |
Jun. 30, 2013
|
Dec. 31, 2012
|
---|---|---|
Debt Instrument [Line Items] | ||
Long-term Debt | $ 95,988 | $ 92,814 |
Credit agreement
|
||
Debt Instrument [Line Items] | ||
Long-term Debt | 60,988 | 57,814 |
Senior notes
|
||
Debt Instrument [Line Items] | ||
Long-term Debt | $ 35,000 | $ 35,000 |
Retirement Plans (Tables)
|
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2013
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Compensation and Retirement Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net periodic pension cost | Net periodic pension cost are as follows:
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Restructuring Reserve (Details) (USD $)
|
3 Months Ended | 6 Months Ended | 6 Months Ended | 3 Months Ended | 6 Months Ended | 3 Months Ended | 6 Months Ended | 3 Months Ended | 6 Months Ended | 1 Months Ended | ||||||||||||
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Jun. 30, 2013
facility
|
Jun. 30, 2012
|
Jun. 30, 2013
|
Jun. 30, 2012
|
Dec. 31, 2012
|
Jun. 30, 2013
Severance & Personnel
|
Jun. 30, 2012
Severance & Personnel
|
Jun. 30, 2013
Other Exit Costs
|
Jun. 30, 2012
Other Exit Costs
|
Jun. 30, 2013
Selling, General and Administrative Expenses
|
Jun. 30, 2012
Selling, General and Administrative Expenses
|
Jun. 30, 2013
Selling, General and Administrative Expenses
|
Jun. 30, 2012
Selling, General and Administrative Expenses
|
Jun. 30, 2013
Cost of Sales
|
Jun. 30, 2012
Cost of Sales
|
Jun. 30, 2013
Cost of Sales
|
Jun. 30, 2012
Cost of Sales
|
Jun. 30, 2013
Lawn and Garden
|
Jun. 30, 2012
Lawn and Garden
|
Jun. 30, 2013
Lawn and Garden
|
Jun. 30, 2012
Lawn and Garden
|
Jul. 18, 2013
Lawn and Garden
Segment Restructuring
facility
|
|
Restructuring Cost and Reserve [Line Items] | ||||||||||||||||||||||
Restructuring Charges | $ 769,000 | $ 498,000 | $ 1,476,000 | $ 1,053,000 | $ 500,000 | $ 400,000 | $ 1,100,000 | $ 900,000 | $ 300,000 | $ 100,000 | $ 400,000 | $ 200,000 | $ 736,000 | $ 419,000 | $ 1,139,000 | $ 442,000 | ||||||
Gain on sale of property, plant and equipment | (616,000) | 558,000 | 300,000 | 300,000 | ||||||||||||||||||
Number of facilities sold | 2 | |||||||||||||||||||||
Property, plant and equipment classfied as held for sale | 5,700,000 | 5,700,000 | 5,700,000 | |||||||||||||||||||
Restructuring Reserve [Roll Forward] | ||||||||||||||||||||||
Balance, beginning | 318,000 | 605,000 | 318,000 | 0 | 0 | 605,000 | ||||||||||||||||
Provision | 1,476,000 | 1,053,000 | 522,000 | 651,000 | 954,000 | 402,000 | ||||||||||||||||
Less: Payments | (1,794,000) | (1,183,000) | (840,000) | (651,000) | (954,000) | (532,000) | ||||||||||||||||
Balance, ending | 0 | 475,000 | 0 | 475,000 | 0 | 0 | 0 | 475,000 | ||||||||||||||
Number of facilities closed | 2 | |||||||||||||||||||||
Expected restructuring cost | 15,000,000 | |||||||||||||||||||||
Non-cash cost | 3,000,000 | |||||||||||||||||||||
Expected improvment in operating profit due to restructuring | $ 8,000,000 |
Goodwill (Tables)
|
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2013
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
The change in goodwill | The change in goodwill for the six months ended June 30, 2013 was as follows:
|
Condensed Consolidated Statement of Shareholders' Equity (Unaudited) (USD $)
In Thousands, unless otherwise specified |
Total
|
Common Stock
|
Additional Paid-In Capital
|
Accumulative Other Comprehensive Income
|
Retained Income (Deficit)
|
---|---|---|---|---|---|
Balance at January 1, 2013 at Dec. 31, 2012 | $ 230,022 | $ 20,316 | $ 266,419 | $ 10,643 | $ (67,356) |
Stockholders' Equity [Roll Forward] | |||||
Net income | 16,195 | 0 | 0 | 0 | 16,195 |
Other comprehensive income (loss) | 0 | 0 | (5,920) | 0 | |
Shares repurchased for employee taxes on equity awards | 0 | (684) | 0 | 0 | |
Purchases for treasury | (145) | (3,153) | 0 | 0 | |
Common stock issued | 190 | 3,072 | 0 | 0 | |
Other | 0 | 50 | 0 | 0 | |
Stock based compensation | 0 | 1,532 | 0 | 0 | |
Dividends declared - $.18 per share | 0 | 0 | 0 | (6,139) | |
Balance at June 30, 2013 at Jun. 30, 2013 | $ 235,020 | $ 20,361 | $ 267,236 | $ 4,723 | $ (57,300) |
Acquisitions
|
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2013
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Business Combinations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Acquisitions | Acquisitions In October 2012, the Company acquired 100% of the stock of Jamco Products Inc. ("Jamco"), an Illinois corporation that is a leading designer and manufacturer of heavy-duty industrial steel carts and safety cabinets used across many markets. The total purchase price was approximately $15.1 million in cash, net of $0.1 million of cash acquired. Jamco's assets and liabilities are recorded at fair value as of the date of acquisition using primarily level 2 and level 3 fair value inputs. Intangible assets included in the acquisition of Jamco are trade name of $1.2 million, technology of $2.0 million, non-compete agreement of $0.1 million and customer relationships of $2.4 million. The technology, non-compete agreement and customer relationships are subject to amortization and have estimated useful lives of ten, two and six years, respectively. The Jamco trade name has an indefinite life and will be subject to periodic (at least annual) evaluation for impairment. In July 2012, the Company acquired 100% of the stock of Plasticos Novel do Nordeste S.A. ("Novel"), a Brazil-based designer and manufacturer of reusable plastic crates and containers used for closed-loop shipping and storage. Novel also produces a diverse range of plastic industrial safety products. The total purchase price was $30.9 million, which includes a cash payment of $3.4 million, net of $0.6 million of cash acquired, assumed debt of approximately $26.0 million and contingent consideration of $0.9 million based on an earnout. The contingent consideration is contingent upon the annual results of Novel exceeding predefined earnings before interest, taxes, depreciation and amortization over the following four years. Novel's assets and liabilities are recorded at fair value as of the date of acquisition using primarily level 3 fair value inputs. Intangible assets included in the acquisition of Novel include trade name of $1.6 million, know-how of $1.8 million and customer relationships of $2.4 million The know-how and customer relationships are subject to amortization and have estimated useful lives of ten and six years, respectively. The Novel trade name has an indefinite life and will be subject to periodic (at least annual) evaluation for impairment. The following unaudited pro forma information presents a summary of consolidated results of operations for the Company including Novel and Jamco as if the acquisitions had occurred on January 1, 2012.
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 occurred had the acquisitions taken place on January 1, 2012 or indicative of future results. The operating results of both businesses acquired have been included in our Material Handling Segment since the date of acquisition. The allocation of the purchase price and the estimated goodwill, which is not deductible for income tax purposes, and other intangibles are as follows:
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Statement of Accounting Policy
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Jun. 30, 2013
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Statement of Accounting Policy | Statement of Accounting Policies Basis of Presentation The accompanying unaudited condensed consolidated financial statements include the accounts of Myers Industries, Inc. and all wholly owned subsidiaries (collectively, the “Company”), and have been prepared without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. 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 June 30, 2013, and the results of operations and cash flows for the periods presented. The results of operations for the three and six months ended June 30, 2013 are not necessarily indicative of the results of operations that will occur for the year ending December 31, 2013. Recent Accounting Pronouncements In February 2013, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2013-02, Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income requiring new disclosures regarding reclassification adjustments from accumulated other comprehensive income ("AOCI"). ASU No. 2013-02 requires disclosure of amounts reclassified out of AOCI in its entirety, by component, which the Company has elected to disclose in the notes (see below). We adopted this guidance effective January 1, 2013. Translation of Foreign Currencies All asset and liability 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 monthly at an average currency exchange rate for the period. The resulting translation adjustment is recorded in other comprehensive income (loss) as a separate component of shareholders' equity. Fair Value Measurement The Company follows guidance included in ASC 820, Fair Value Measurements and Disclosures, for its financial assets and liabilities, as required. The guidance established a common definition for fair value to be applied to U.S. GAAP requiring the use of fair value, established a framework for measuring fair value, and expanded disclosure requirements about such fair value measurements. The guidance did not require any new fair value measurements, but rather applied to all other accounting pronouncements that require or permit fair value measurements. Under ASC 820, the hierarchy that prioritizes the inputs to valuation techniques used to measure fair value is divided into three levels:
The fair value of the Company’s cash, accounts receivable, accounts payable and accrued expenses are considered to have a fair value which approximates carrying value due to the nature and relative short maturity of these assets and liabilities. The fair value of debt under the Company’s Credit Agreement approximates carrying value due to the floating rates and relative short maturity (less than 90 days) of the revolving borrowings under this agreement. The fair value of the Company’s $35.0 million fixed rate senior notes was estimated at $35.9 million and $36.5 million at June 30, 2013 and December 31, 2012, respectively, using market observable inputs for the Company’s comparable peers with public debt, including quoted prices in active markets and interest rate measurements which are considered level 2 inputs. Revenue Recognition The Company recognizes revenues from the sale of products, net of actual and estimated returns, at the point of passage of title and risk of loss, which is generally at time of shipment, and collectability of the fixed or determinable sales price is reasonably assured. Accumulated Other Comprehensive Income The balances in the Company’s accumulated other comprehensive income ("AOCI") as of June 30, 2013 and June 30, 2012 are as follows:
Cash and Cash Equivalents The Company considers all highly liquid instruments purchased with a maturity of three months or less to be cash equivalents. Cash equivalents are stated at cost, which approximates market value. The Company maintains operating cash and reserves for replacement balances in financial institutions which, from time to time, may exceed federally insured limits. The Company periodically assesses the financial condition of these institutions and believes that the risk of loss is minimal. |
Supplemental Disclosure of Cash Flow Information (Details) (USD $)
In Thousands, unless otherwise specified |
3 Months Ended | 6 Months Ended | ||
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Jun. 30, 2013
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Jun. 30, 2012
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Jun. 30, 2013
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Jun. 30, 2012
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Supplemental Cash Flow Information [Abstract] | ||||
Interest paid | $ 445 | $ 1,612 | $ 971 | $ 1,908 |
Income taxes paid | $ 6,987 | $ 10,827 | $ 7,422 | $ 13,282 |
Restructuring (Tables)
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Jun. 30, 2013
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Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Restructuring and Related Costs | The restructuring charges by segment are presented in the following table.
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Restructuring Reserve | The amounts for severance and personnel costs associated with restructuring have been included in other accrued expenses on the accompanying Condensed Consolidated Statements of Financial Position.
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Segment Information (Tables)
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Jun. 30, 2013
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Net Sales by Segment |
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Schedule of Income Before Income Taxes by Segment |
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Acquisitions Allocation of Purchase Price (Details) (USD $)
In Thousands, unless otherwise specified |
Jun. 30, 2013
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Dec. 31, 2012
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Jul. 09, 2012
Palsticos Novel S.A. [Member]
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Oct. 02, 2012
Jamco [Member]
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Assets acquired: | ||||
Cash | $ 630 | $ 88 | ||
Accounts receivable | 5,467 | 1,690 | ||
Inventory | 5,993 | 3,282 | ||
Property, plant and equipment | 13,636 | 2,559 | ||
Intangibles | 5,790 | 5,680 | ||
Deferred tax assets | 435 | 28 | ||
Prepaid assets | 1,451 | 48 | ||
Other | 719 | 2 | ||
Assets acquired, less cash | 33,491 | 13,289 | ||
Liabilities assumed: | ||||
Accounts payable and accruals | 3,134 | 1,436 | ||
Other taxes | 3,608 | 676 | ||
Other long-term liabilities | 2,293 | 454 | ||
Debt | 26,028 | 0 | ||
Deferred income taxes | 3,804 | 3,044 | ||
Liabilities assumed | 38,867 | 5,610 | ||
Goodwill | 60,285 | 61,056 | 8,805 | 7,435 |
Total cash consideration, less cash acquired | $ 3,429 | $ 15,114 |