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 (State or other jurisdiction of incorporation or organization) |
34-0778636 (IRS Employer Identification 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 July 31, 2011 | |
Common Stock, without par value | 34,719,392 shares |
Assets | June 30, 2011 | December 31, 2010 | ||||||
(Unaudited) | ||||||||
Current Assets |
||||||||
Cash |
$ | 6,936 | $ | 4,705 | ||||
Accounts receivable-less allowances of $4,020 and $2,950, respectively |
101,577 | 98,799 | ||||||
Inventories |
||||||||
Finished and in-process products |
77,148 | 67,580 | ||||||
Raw materials and supplies |
29,547 | 28,824 | ||||||
106,695 | 96,404 | |||||||
Prepaid expenses |
7,352 | 8,158 | ||||||
Deferred income taxes |
5,770 | 5,781 | ||||||
Total Current Assets |
228,330 | 213,847 | ||||||
Other Assets |
||||||||
Goodwill |
41,082 | 40,892 | ||||||
Patents and other intangible assets |
17,653 | 18,667 | ||||||
Other |
6,890 | 7,174 | ||||||
65,625 | 66,733 | |||||||
Property, Plant and Equipment, at Cost |
||||||||
Land |
4,369 | 4,369 | ||||||
Buildings and leasehold improvements |
59,904 | 59,690 | ||||||
Machinery and equipment |
387,753 | 383,664 | ||||||
452,026 | 447,723 | |||||||
Less allowances for depreciation and amortization |
(309,714 | ) | (295,908 | ) | ||||
Property, plant and equipment, net |
142,312 | 151,815 | ||||||
$ | 436,267 | $ | 432,395 | |||||
1
Liabilities and Shareholders Equity | June 30, 2011 | December 31, 2010 | ||||||
(Unaudited) | ||||||||
Current Liabilities |
||||||||
Accounts payable |
$ | 53,301 | $ | 64,143 | ||||
Accrued expenses |
||||||||
Employee compensation |
18,562 | 18,294 | ||||||
Income taxes |
6,553 | 5,891 | ||||||
Taxes, other than income taxes |
1,925 | 1,970 | ||||||
Accrued interest |
281 | 195 | ||||||
Other |
14,393 | 15,533 | ||||||
Current portion of long-term debt |
305 | 305 | ||||||
Total Current Liabilities |
95,320 | 106,331 | ||||||
Long-term debt, less current portion |
90,425 | 83,530 | ||||||
Other liabilities |
6,741 | 5,936 | ||||||
Deferred income taxes |
24,943 | 24,793 | ||||||
Shareholders Equity |
||||||||
Serial Preferred Shares (authorized 1,000,000 shares; none issued and outstanding) |
-0- | -0- | ||||||
Common Shares, without par value (authorized 60,000,000 shares; outstanding
34,985,304 and 35,315,732; net of treasury shares of 2,845,753 and 2,592,175,
respectively) |
21,267 | 21,486 | ||||||
Additional paid-in capital |
279,600 | 281,376 | ||||||
Accumulated other comprehensive income |
12,798 | 10,164 | ||||||
Retained deficit |
(94,827 | ) | (101,221 | ) | ||||
218,838 | 211,805 | |||||||
$ | 436,267 | $ | 432,395 | |||||
2
For The Three Months Ended | For The Six Months Ended | |||||||||||||||
June 30, | June 30, | June 30, | June 30, | |||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
Net sales |
$ | 176,805 | $ | 175,906 | $ | 370,246 | $ | 362,329 | ||||||||
Cost of sales |
132,772 | 141,955 | 274,188 | 283,465 | ||||||||||||
Gross profit |
44,033 | 33,951 | 96,058 | 78,864 | ||||||||||||
Selling, general and administrative expenses |
35,360 | 33,960 | 75,016 | 68,392 | ||||||||||||
Operating income (loss) |
8,673 | (9 | ) | 21,042 | 10,472 | |||||||||||
Interest expense, net |
1,153 | 1,851 | 2,391 | 3,651 | ||||||||||||
Income (loss) before income taxes |
7,520 | (1,860 | ) | 18,651 | 6,821 | |||||||||||
Income taxes (benefit) |
2,862 | (761 | ) | 7,274 | 2,390 | |||||||||||
Net income (loss) |
$ | 4,658 | $ | (1,099 | ) | $ | 11,377 | $ | 4,431 | |||||||
Income (loss) per common share: |
||||||||||||||||
Basic and diluted |
$ | 0.13 | $ | (0.03 | ) | $ | 0.32 | $ | 0.13 | |||||||
Dividends per share |
$ | 0.070 | $ | 0.065 | $ | 0.140 | $ | 0.130 | ||||||||
3
June 30, 2011 | June 30, 2010 | |||||||
Cash Flows From Operating Activities |
||||||||
Net income |
$ | 11,377 | $ | 4,431 | ||||
Items not affecting use of cash |
||||||||
Depreciation |
16,064 | 15,019 | ||||||
Impairment charges |
252 | -0- | ||||||
Amortization of intangible assets |
1,474 | 1,485 | ||||||
Non-cash stock compensation |
1,607 | 1,133 | ||||||
Provision for loss on accounts receivable |
1,773 | 327 | ||||||
Other |
50 | -0- | ||||||
Deferred taxes |
(70 | ) | (76 | ) | ||||
Gain on sale of property, plant and equipment |
-0- | (733 | ) | |||||
Cash flow provided by (used for) working capital |
||||||||
Accounts receivable |
(4,281 | ) | (3,262 | ) | ||||
Inventories |
(9,247 | ) | 1,154 | |||||
Prepaid expenses |
903 | 798 | ||||||
Accounts payable and accrued expenses |
(11,151 | ) | (22,896 | ) | ||||
Net cash provided by (used for) operating activities |
8,751 | (2,620 | ) | |||||
Cash Flows From Investing Activities |
||||||||
Proceeds from sale of property, plant and equipment |
-0- | 5,165 | ||||||
Additions to property, plant and equipment |
(5,765 | ) | (9,320 | ) | ||||
Other |
848 | 73 | ||||||
Net cash used for investing activities |
(4,917 | ) | (4,082 | ) | ||||
Cash Flows From Financing Activities |
||||||||
Net borrowing on credit facility |
6,552 | 12,552 | ||||||
Cash dividends paid |
(4,715 | ) | (4,611 | ) | ||||
Proceeds from issuance of common stock |
70 | 72 | ||||||
Repurchase of common stock |
(3,722 | ) | -0- | |||||
Net cash (used for) provided by financing activities |
(1,815 | ) | 8,013 | |||||
Foreign Exchange Rate Effect on Cash |
212 | 17 | ||||||
Net increase in cash |
2,231 | 1,328 | ||||||
Cash at January 1 |
4,705 | 4,728 | ||||||
Cash at June 30 |
$ | 6,936 | $ | 6,055 | ||||
4
Accumulative | ||||||||||||||||
Additional | Other | Retained | ||||||||||||||
Common | Paid-In | Comprehensive | Income | |||||||||||||
Stock | Capital | Income | (Deficit) | |||||||||||||
Balance at January 1, 2011 |
$ | 21,486 | $ | 281,376 | $ | 10,164 | $ | (101,221 | ) | |||||||
Net income |
-0- | -0- | -0- | 11,377 | ||||||||||||
Foreign currency translation adjustment |
-0- | -0- | 2,634 | -0- | ||||||||||||
Purchases for treasury |
(227 | ) | (3,495 | ) | -0- | -0- | ||||||||||
Common stock issued |
8 | 112 | -0- | -0- | ||||||||||||
Stock based compensation |
-0- | 1,607 | -0- | -0- | ||||||||||||
Dividends $.14 per share |
-0- | -0- | -0- | (4,983 | ) | |||||||||||
Balance at June 30, 2011 |
$ | 21,267 | $ | 279,600 | $ | 12,798 | $ | (94,827 | ) | |||||||
5
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
entitys own assumptions. |
6
Foreign | ||||||||||||||||||||
(Amount in thousands) | Balance at | Currency | Balance at | |||||||||||||||||
Segment | January 1, 2011 | Acquisitions | Translation | Impairment | June 30, 2011 | |||||||||||||||
Distribution |
$ | 214 | $ | -0- | $ | -0- | $ | -0- | $ | 214 | ||||||||||
Engineered Products |
707 | -0- | -0- | -0- | 707 | |||||||||||||||
Material Handling North America |
30,383 | -0- | -0- | -0- | 30,383 | |||||||||||||||
Lawn and Garden |
9,588 | -0- | 190 | -0- | 9,778 | |||||||||||||||
Total |
$ | 40,892 | $ | -0- | $ | 190 | $ | -0- | $ | 41,082 | ||||||||||
7
Three Months Ended | Six Months Ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
Weighted average common shares outstanding |
||||||||||||||||
Basic |
35,249,616 | 35,303,727 | 35,279,504 | 35,297,283 | ||||||||||||
Dilutive effect of stock options and restricted stock |
-0- | -0- | 156,608 | 116,860 | ||||||||||||
Weighted average common shares outstanding diluted |
35,249,616 | 35,303,727 | 35,436,112 | 35,414,143 | ||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
(In thousands) | 2011 | 2010 | 2011 | 2010 | ||||||||||||
Interest |
$ | 1,548 | $ | 3,288 | $ | 2,057 | $ | 3,389 | ||||||||
Income taxes |
$ | 6,304 | $ | 5,974 | $ | 6,373 | $ | 7,637 |
Three Months Ended | Six Months Ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
(In thousands) | 2011 | 2010 | 2011 | 2010 | ||||||||||||
Net income (loss) |
$ | 4,658 | $ | (1,099 | ) | $ | 11,377 | $ | 4,431 | |||||||
Other comprehensive income: |
||||||||||||||||
Foreign currency translation adjustment |
824 | (2,861 | ) | 2,634 | (1,021 | ) | ||||||||||
Comprehensive income (loss) |
$ | 5,482 | $ | (3,960 | ) | $ | 14,011 | $ | 3,410 | |||||||
8
June 30, | December 31, | |||||||
(In thousands) | 2011 | 2010 | ||||||
Foreign currency translation adjustments |
$ | 14,868 | $ | 12,234 | ||||
Pension adjustments |
(2,070 | ) | (2,070 | ) | ||||
Total |
$ | 12,798 | $ | 10,164 | ||||
(Dollars in thousands) | ||||
Balance at January 1, 2011 |
$ | 763 | ||
Provision |
(285 | ) | ||
Less: Payments |
(200 | ) | ||
Balance at June 30, 2011 |
$ | 278 | ||
9
Model |
||||
Risk free interest rate |
3.79 | % | ||
Expected dividend yield |
2.90 | % | ||
Expected life of award (years) |
6.00 | |||
Expected volatility |
50.72 | % | ||
Fair value per option share |
$ | 3.69 |
Average | Weighted | |||||||||||
Exercise | Average | |||||||||||
Shares | Price | Life | ||||||||||
Outstanding at January 1, 2011 |
1,845,210 | $ | 11.65 | |||||||||
Options Granted |
355,025 | 10.10 | ||||||||||
Options Exercised |
(1,727 | ) | 8.00 | |||||||||
Cancelled or Forfeited |
(121,184 | ) | 12.88 | |||||||||
Outstanding at June 30, 2011 |
2,077,324 | $ | 11.32 | 7.21 years | ||||||||
Exercisable at June 30, 2011 |
1,352,727 | $ | 11.81 |
10
Three Months Ended | Six Months Ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
Service cost |
$ | 18 | $ | 9 | $ | 36 | $ | 18 | ||||||||
Interest cost |
76 | 80 | 152 | 160 | ||||||||||||
Expected return on assets |
(77 | ) | (74 | ) | (154 | ) | (148 | ) | ||||||||
Amortization of actuarial net loss |
16 | 15 | 32 | 30 | ||||||||||||
Net periodic pension cost |
$ | 33 | $ | 30 | $ | 66 | $ | 60 | ||||||||
11
Three Months Ended | Six Months Ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
Net Sales | 2011 | 2010 | 2011 | 2010 | ||||||||||||
Lawn and Garden |
$ | 41,358 | $ | 45,241 | $ | 106,446 | $ | 114,746 | ||||||||
Material Handling |
67,008 | 62,729 | 132,738 | 122,940 | ||||||||||||
Distribution |
46,091 | 43,955 | 87,725 | 82,687 | ||||||||||||
Engineered Products |
27,897 | 29,747 | 55,822 | 54,156 | ||||||||||||
Intra-segment elimination |
(5,549 | ) | (5,766 | ) | (12,485 | ) | (12,200 | ) | ||||||||
Sales from continuing operations |
$ | 176,805 | $ | 175,906 | $ | 370,246 | $ | 362,329 | ||||||||
Three Months Ended | Six Months Ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
Income (Loss) Before Income Taxes | 2011 | 2010 | 2011 | 2010 | ||||||||||||
Lawn and Garden |
$ | (1,619 | ) | $ | (5,479 | ) | $ | 2,259 | $ | (722 | ) | |||||
Material Handling |
8,396 | 3,452 | 18,657 | 8,862 | ||||||||||||
Distribution |
4,015 | 3,628 | 7,087 | 6,530 | ||||||||||||
Engineered Products |
2,591 | 3,084 | 5,380 | 5,637 | ||||||||||||
Corporate |
(4,709 | ) | (4,694 | ) | (12,341 | ) | (9,835 | ) | ||||||||
Interest expense-net |
(1,153 | ) | (1,851 | ) | (2,391 | ) | (3,651 | ) | ||||||||
Income from continuing operations before income taxes |
$ | 7,520 | $ | (1,860 | ) | $ | 18,651 | $ | 6,821 | |||||||
12
Item 2. | Managements Discussion and Analysis of Financial Condition and Results of Operations |
Quarter Ended | ||||||||||||||||
(dollars in millions) | June 30, | |||||||||||||||
Segment | 2011 | 2010 | Change | % Change | ||||||||||||
Lawn and Garden |
$ | 41.4 | $ | 45.2 | $ | (3.8 | ) | (8 | %) | |||||||
Material Handling |
$ | 67.0 | $ | 62.7 | $ | 4.3 | 7 | % | ||||||||
Distribution |
$ | 46.1 | $ | 44.0 | $ | 2.1 | 5 | % | ||||||||
Engineered Products |
$ | 27.9 | $ | 29.8 | $ | (1.9 | ) | (6 | %) | |||||||
Intra-segment elimination |
$ | (5.6 | ) | $ | (5.8 | ) | $ | 0.2 | 3 | % | ||||||
TOTAL |
$ | 176.8 | $ | 175.9 | $ | 0.9 | 1 | % | ||||||||
Quarter Ended | ||||||||
(dollars in millions) | June 30, | |||||||
Cost of Sales and Gross Profit | 2011 | 2010 | ||||||
Cost of sales |
$ | 132.8 | $ | 142.0 | ||||
Gross profit |
$ | 44.0 | $ | 34.0 | ||||
Gross profit as a percentage of sales |
24.9 | % | 19.3 | % |
13
Quarter Ended | ||||||||||||
(dollars in millions) | June 30, | |||||||||||
SG&A Expenses | 2011 | 2010 | Change | |||||||||
SG&A expenses |
$ | 35.4 | $ | 34.0 | $ | 1.4 | ||||||
SG&A expenses as a percentage of sales |
20.0 | % | 19.3 | % | 0.7 | % |
Quarter Ended | ||||||||||||||||
(dollars in millions) | June 30, | |||||||||||||||
Net Interest Expense | 2011 | 2010 | Change | % Change | ||||||||||||
Net interest expense |
$ | 1.2 | $ | 1.9 | $ | (0.7 | ) | (38 | %) | |||||||
Outstanding borrowings |
$ | 90.7 | $ | 116.8 | $ | (26.1 | ) | (22 | %) | |||||||
Average borrowing rate |
4.80 | % | 6.05 | % | (1.25 | %) | (21 | %) |
Quarter Ended | ||||||||||||||||
(dollars in millions) | June 30, | |||||||||||||||
Segment | 2011 | 2010 | Change | % Change | ||||||||||||
Lawn and Garden |
$ | (1.6 | ) | $ | (5.5 | ) | $ | 3.9 | (71 | %) | ||||||
Material Handling |
$ | 8.4 | $ | 3.5 | $ | 4.9 | 140 | % | ||||||||
Distribution |
$ | 4.0 | $ | 3.6 | $ | 0.4 | 11 | % | ||||||||
Engineered Products |
$ | 2.6 | $ | 3.1 | $ | (0.5 | ) | (16 | %) | |||||||
Corporate and interest |
$ | (5.9 | ) | $ | (6.6 | ) | $ | 0.7 | 11 | % | ||||||
TOTAL |
$ | 7.5 | $ | (1.9 | ) | $ | 9.4 | (496 | %) | |||||||
Quarter Ended | ||||||||
(dollars in millions) | June 30, | |||||||
Consolidated Income Taxes | 2011 | 2010 | ||||||
Income (loss) before taxes |
$ | 7.5 | $ | (1.9 | ) | |||
Income taxes (benefit) |
$ | 2.9 | $ | (0.8 | ) | |||
Effective tax rate |
38.1 | % | 40.9 | % |
14
Six Months Ended | ||||||||||||||||
(dollars in millions) | June 30, | |||||||||||||||
Segment | 2011 | 2010 | Change | % Change | ||||||||||||
Lawn and Garden |
$ | 106.4 | $ | 114.7 | $ | (8.3 | ) | (7 | %) | |||||||
Material Handling |
$ | 132.7 | $ | 122.9 | $ | 9.8 | 8 | % | ||||||||
Distribution |
$ | 87.7 | $ | 82.7 | $ | 5.0 | 6 | % | ||||||||
Engineered Products |
$ | 55.8 | $ | 54.2 | $ | 1.6 | 3 | % | ||||||||
Intra-segment elimination |
$ | (12.4 | ) | $ | (12.2 | ) | $ | (0.2 | ) | (2 | %) | |||||
TOTAL |
$ | 370.2 | $ | 362.3 | $ | 7.9 | 2 | % | ||||||||
Six Months Ended | ||||||||
(dollars in millions) | June 30, | |||||||
Cost of Sales and Gross Profit | 2011 | 2010 | ||||||
Cost of sales |
$ | 274.2 | $ | 283.5 | ||||
Gross profit |
$ | 96.1 | $ | 78.9 | ||||
Gross profit as a percentage of sales |
25.9 | % | 21.8 | % |
15
Six Months Ended | ||||||||||||
(dollars in millions) | June 30, | |||||||||||
SG&A Expenses | 2011 | 2010 | Change | |||||||||
SG&A expenses |
$ | 75.0 | $ | 68.4 | $ | 6.6 | ||||||
SG&A expenses as a percentage of sales |
20.3 | % | 18.9 | % | 1.4 | % |
Six Months Ended | ||||||||||||||||
(dollars in millions) | June 30, | |||||||||||||||
Net Interest Expense | 2011 | 2010 | Change | % Change | ||||||||||||
Net interest expense |
$ | 2.4 | $ | 3.7 | $ | (1.3 | ) | (35 | %) | |||||||
Outstanding borrowings |
$ | 90.7 | $ | 116.8 | $ | (26.1 | ) | (22 | %) | |||||||
Average borrowing rate |
4.99 | % | 6.09 | % | (1.10 | %) | (18 | %) |
Six Months Ended | ||||||||||||||||
(dollars in millions) | June 30, | |||||||||||||||
Segment | 2011 | 2010 | Change | % Change | ||||||||||||
Lawn and Garden |
$ | 2.3 | $ | (0.7 | ) | $ | 3.0 | (429 | %) | |||||||
Material Handling |
$ | 18.7 | $ | 8.9 | $ | 9.8 | 110 | % | ||||||||
Distribution |
$ | 7.1 | $ | 6.5 | $ | 0.6 | 9 | % | ||||||||
Engineered Products |
$ | 5.4 | $ | 5.6 | $ | (0.2 | ) | (4 | %) | |||||||
Corporate and interest |
$ | (14.8 | ) | $ | (13.5 | ) | $ | (1.3 | ) | (10 | %) | |||||
TOTAL |
$ | 18.7 | $ | 6.8 | $ | 11.9 | 175 | % | ||||||||
Six Months Ended | ||||||||
(dollars in millions) | June 30, | |||||||
Consolidated Income Taxes | 2011 | 2010 | ||||||
Income before taxes |
$ | 18.7 | $ | 6.8 | ||||
Income taxes |
$ | 7.3 | $ | 2.4 | ||||
Effective tax rate |
39.0 | % | 35.0 | % |
16
Required Level | Actual Level | |||||||
Interest Coverage Ratio |
2.25 to 1 (minimum) | 6.99 | ||||||
Leverage Ratio |
3.25 to 1 (maximum) | 1.28 |
Item 3. | Quantitative and Qualitative Disclosure About Market Risk |
17
Item 4. | Controls and Procedures |
Item 1. | Legal Proceedings |
Item 6. | Exhibits |
MYERS INDUSTRIES, INC. |
||||
Date: August 3, 2011 | By: | /s/ Donald A. Merril | ||
Donald A. Merril | ||||
Senior Vice President, Chief Financial
Officer and Corporate Secretary (Duly Authorized Officer and Principal Financial and Accounting Officer) |
18
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 10-K filed with the Commission on March 12, 2010. | |
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 10(d) to Form 10-K filed with the Commission on March19, 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)
|
Amended and Restated Employment Agreement between Myers Industries, Inc. and John C. Orr effective June 1, 2008. Reference is made to Exhibit 10.1 to Form 8-K filed with the Commission on June 24, 2008.* | |
10(i)
|
First Amendment to Amended and Restated Employment Agreement between Myers Industries, Inc. and John C. Orr entered into as of April 21, 2009. Reference is made to Exhibit 10.1 to Form 8-K filed with the Commission on April 22, 2009* | |
10(j)
|
Second Amendment to Amended and Restated Employment Agreement between Myers Industries, Inc. and John C. Orr entered into as of March 8, 2010. Reference is made to Exhibit 10.1 to Form 8-K filed with the Commission on March 9, 2010.* | |
10(k)
|
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(l)
|
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(m)
|
Third 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(n)
|
Employment Agreement between Myers Industries, Inc. and David B. Knowles dated June 19, 2009. Reference is made to Exhibit 10.1 to Form 8-K filed with the Commission on June 22, 2009.* | |
10(o)
|
Non-Disclosure and Non-Competition Agreement between Myers Industries, Inc. and David B. Knowles dated June 19, 2009. Reference is made to Exhibit 10.2 to Form 8-K filed with the Commission on June 22, 2009.* | |
10(p)
|
Amendment to Myers Industries, Inc. Executive Supplemental Retirement Plan (David B. Knowles) effective June 19, 2009. Reference is made to Exhibit 10.3 to Form 8-K filed with the Commission on June 22, 2009.* | |
10(q)
|
Employment Agreement between Myers Industries, Inc. and Donald A. Merril dated January 24, 2006. Reference is made to Exhibit 10(k) to Form 10-K filed with the Commission on March 16, 2006.* | |
10(r)
|
Amendment to the Myers Industries, Inc. Executive Supplemental Retirement Plan (Donald A. Merril) dated January 24, 2006. Reference is made to Exhibit 10(l) to Form 10-K filed with the Commission on March 16, 2006.* | |
10(s)
|
Non-Disclosure and Non-Competition Agreement between Myers Industries, Inc. and Donald A. Merril dated January 24, 2006. Reference is made to Exhibit 10(m) to Form 10-K filed with the Commission on March 16, 2006.* | |
10(t)
|
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(u)
|
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. | |
14(a)
|
Myers Industries, Inc. Code of Business Conduct and Ethics. Reference is made to Exhibit 14(a) to Form 10-K filed with the Commission on March 16, 2005. | |
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 filed with the Commission on March 16, 2005. | |
21
|
List of Direct and Indirect Subsidiaries, and Operating Divisions, of Myers Industries, Inc. | |
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 Donald A. Merril, 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 Donald A. Merril, Senior 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, 2011 filed with the SEC on August 3, 2011, formatted in XBRL includes: (i) Condensed Consolidated Statements of Financial Position at June 30, 2011 and December 31, 2010, (ii) Condensed Consolidated Statements of Income (Loss) for the fiscal periods ended June 30, 2011 and 2010, (iii) Condensed Consolidated Statements of Cash Flows for the fiscal periods ended June 30, 2011 and 2010, (iv) Condensed Consolidated Statement of Shareholders Equity for the fiscal period ended June 30, 2011, and (v) the Notes to 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. |
Ameri-Kart Corp. | Kansas | |||||
WEK South Corp | North Carolina | |||||
Ameri-Kart (MI) Corp. | Michigan | |||||
Buckhorn Inc. | Ohio | |||||
BRP Hannibal Inc. | Missouri | |||||
Grower Express Trucking, Inc. | Ohio | |||||
JMKO Corp. | Missouri | |||||
AC Buckhorn LLC (50%) | Missouri | |||||
Lone Star Plastics, Inc. | Nevada | |||||
Amerikan LLC | Florida | |||||
Kord USA, Inc. | South Carolina | |||||
Texan Polymer Group, Inc. | Texas | |||||
WhiteRidge Plastics, LLC | North Carolina | |||||
MYE Automotive, Inc. | Delaware | |||||
MRP, Inc. | Michigan | |||||
WEK Industries, Inc. | Delaware | |||||
MYE Canada Operations Inc. | Canada | |||||
MYEcap Financial Corp. | Ohio | |||||
MYELux, LLC | Ohio | |||||
Myers do Brasil Embalagens Plasticas Ltda. | Brazil | |||||
Myers Tire Supply International, Inc. | Ohio | |||||
Myers de El Salvador S.A. De C.V. (75%) | El Salvador | |||||
Orientadores Comerciales S.A. | Guatemala | |||||
Myers de Panama S.A. | Panama | |||||
Myers TSCA, S.A. | Panama | |||||
Myers de El Salvador S.A. De C.V. (25%) | El Salvador | |||||
Myers Missouri, Inc. | Missouri | |||||
AC Buckhorn LLC (50%) | Missouri | |||||
Myers Tire Supply Distribution, Inc. | Ohio | |||||
Myers Tire Supply.com, Inc. | Ohio | |||||
Patch Rubber Company | North Carolina | |||||
Kwik Patch Private Ltd. (39.98%) | India | |||||
Productivity California, Inc. | California |
Akro-Mils (of Myers Industries, Inc.) | Akron, Ohio | |||||
Dillen Products (of Myers Industries, Inc.) | Middlefield, Ohio | |||||
Myers Tire Supply (of Myers Industries, Inc.) | Akron, Ohio | |||||
Buckhorn Canada (of MYE Canada Operations Inc.) | Ontario, Canada | |||||
Myers Tire Supply of Canada (of MYE Canada Operations Inc.) | Ontario, Canada | |||||
Listo Products (of MYE Canada Operations Inc.) | Yukon Territory | |||||
ITML Horticultural Products (of MYE Canada Operations Inc.) | Ontario, Canada | |||||
Date: August 3, 2011 | /s/ John C. Orr | |||
John C. Orr, President and | ||||
Chief Executive Officer | ||||
Date: August 3, 2011 | /s/ Donald A. Merril | |||
Donald A. Merril, Senior Vice President, | ||||
Chief Financial Officer and Corporate Secretary | ||||
/s/ John C. Orr | ||
John C. Orr, President and | ||
Chief Executive Officer | ||
Dated: August 3, 2011 |
/s/ Donald A. Merril | ||
Donald A. Merril, Senior Vice President, | ||
Chief Financial Officer and Corporate Secretary | ||
Dated: August 3, 2011 |
Condensed Consolidated Statements of Financial Position (Parenthetical) (USD $)
In Thousands, except Share data |
Jun. 30, 2011
|
Dec. 31, 2010
|
---|---|---|
Current Assets | Â | Â |
Allowances for accounts receivable | $ 4,020 | $ 2,950 |
Shareholders' Equity | Â | Â |
Preferred Shares, shares authorized | 1,000,000 | 1,000,000 |
Preferred Shares, shares issued | 0 | 0 |
Preferred Shares, shares outstanding | 0 | 0 |
Common Shares, par value | $ 0 | $ 0 |
Common Shares, shares authorized | 60,000,000 | 60,000,000 |
Common Shares, shares outstanding | 34,985,304 | 35,315,732 |
Treasury Shares, shares | 2,845,753 | 2,592,175 |
Condensed Consolidated Statements of Income (Loss) (Unaudited) (USD $)
In Thousands, except Per Share data |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2011
|
Jun. 30, 2010
|
Jun. 30, 2011
|
Jun. 30, 2010
|
|
Condensed Consolidated Statements of Income (Loss) [Abstract] | Â | Â | Â | Â |
Net sales | $ 176,805 | $ 175,906 | $ 370,246 | $ 362,329 |
Cost of sales | 132,772 | 141,955 | 274,188 | 283,465 |
Gross profit | 44,033 | 33,951 | 96,058 | 78,864 |
Selling, general and administrative expenses | 35,360 | 33,960 | 75,016 | 68,392 |
Operating income (loss) | 8,673 | (9) | 21,042 | 10,472 |
Interest expense, net | 1,153 | 1,851 | 2,391 | 3,651 |
Income (loss) before income taxes | 7,520 | (1,860) | 18,651 | 6,821 |
Income taxes (benefit) | 2,862 | (761) | 7,274 | 2,390 |
Net income (loss) | $ 4,658 | $ (1,099) | $ 11,377 | $ 4,431 |
Income (loss) per common share: | Â | Â | Â | Â |
Basic and diluted | $ 0.13 | $ (0.03) | $ 0.32 | $ 0.13 |
Dividends per share | $ 0.070 | $ 0.065 | $ 0.140 | $ 0.130 |
Contingencies
|
6 Months Ended |
---|---|
Jun. 30, 2011
|
|
Contingencies [Abstract] | Â |
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. We
believe that the outcome of these lawsuits and other proceedings will not individually or in the
aggregate have a future material adverse effect on our consolidated financial position, results of
operations or cash flows.
A number of parties, including the Company and its subsidiary, Buckhorn Inc., were identified in a
planning document adopted in October 2008 by the California Regional Water Quality Control Board,
San Francisco Bay Region (RWQCB). The planning document relates to the presence of mercury,
including amounts contained in mining wastes, in and around the Guadalupe River Watershed
(Watershed) region in Santa Clara County, California. Buckhorn has been alleged to be a successor
in interest to an entity that performed mining operations in a portion of the Watershed area. The
Company has not been contacted by the RWQCB with respect to Watershed clean-up efforts that may
result from the adoption of this planning document. The extent of the mining wastes that may be the
subject of future cleanup has yet to be determined, and the actions of the RWQCB have not yet
advanced to the stage where a reasonable estimate of remediation cost, if any, is available.
Although assertion of a claim by the RWQCB is reasonably possible, it is not possible at this time
to estimate the amount of any obligation the Company may incur for these cleanup efforts within the
Watershed region, or whether such cost would be material to the Company’s financial statements.
In October 2009, an employee was fatally wounded while performing maintenance at the Company’s
manufacturing facility in Springfield, Missouri. On February 22, 2011, the family of the deceased
filed a civil complaint against the manufacturer of the press involved in the incident and the
Buckhorn Inc. employee involved in the incident. Buckhorn Inc. has not been named as a party to
this lawsuit. At this time the Company is not able to determine whether this proceeding or the
incident will result in legal exposure to the Company, or if any such liability that results would
be material to the Company’s financial statements. The Company believes that it has adequate
insurance to resolve any claims resulting from this incident.
|
Document and Entity Information (USD $)
|
6 Months Ended | ||
---|---|---|---|
Jun. 30, 2011
|
Jul. 31, 2011
|
Jun. 30, 2010
|
|
Document and Entity Information [Abstract] | Â | Â | Â |
Entity Registrant Name | MYERS INDUSTRIES INC | Â | Â |
Entity Central Index Key | 0000069488 | Â | Â |
Document Type | 10-Q | Â | Â |
Document Period End Date | Jun. 30, 2011 | ||
Amendment Flag | false | Â | Â |
Document Fiscal Year Focus | 2011 | Â | Â |
Document Fiscal Period Focus | Q2 | Â | Â |
Current Fiscal Year End Date | --12-31 | Â | Â |
Entity Well-known Seasoned Issuer | No | Â | Â |
Entity Voluntary Filers | No | Â | Â |
Entity Current Reporting Status | Yes | Â | Â |
Entity Filer Category | Accelerated Filer | Â | Â |
Entity Public Float | Â | Â | $ 261,520,997 |
Entity Common Stock, Shares Outstanding | Â | 34,719,392 | Â |
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Acquisitions
|
6 Months Ended |
---|---|
Jun. 30, 2011
|
|
Acquisitions [Abstract] | Â |
Acquisitions |
Acquisitions
On July 21, 2010, the Company acquired the assets of Enviro-Fill, Inc., a developer of a new fuel
overfill prevention and fuel vapor capture system. The total purchase price was approximately $1.5
million, including contingent liabilities for additional future consideration. The allocation of
purchase price includes $0.8 million of amortizable intangible assets and $0.7 million of goodwill.
These assets were recorded at fair value as of the date of acquisition using primarily level 2 and
3 inputs. The Enviro-Fill business is included in the Company’s Engineered Products Segment.
|
Comprehensive Income
|
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2011
|
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Comprehensive Income/Accumulated Other Comprehensive Income [Abstract] | Â | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Comprehensive Income |
Comprehensive Income
A summary of comprehensive income for the three and six months ended June 30, 2011 and 2010 is as
follows:
|
Statement of Accounting Policy
|
6 Months Ended |
---|---|
Jun. 30, 2011
|
|
Statement of Accounting Policy [Abstract] | Â |
Statement of Accounting Policy |
Statement of Accounting Policy
The accompanying 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, 2011, 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, 2011 are not necessarily
indicative of the results of operations that will occur for the year ending December 31, 2011.
|
Discontinued Operations
|
6 Months Ended |
---|---|
Jun. 30, 2011
|
|
Discontinued Operations [Abstract] | Â |
Discontinued Operations |
Discontinued Operations
On February 1, 2007, the Company sold its former Material Handling — Europe business segment. On
November 10, 2010, the French Tax Authorities issued a notice of assessment to the buyer, and
current owner, of these businesses. The assessment related to business taxes for the years 2006,
2007 and 2008, and totaled 1.5 million euros. As part of the sale agreement, the Company provided
indemnification to the current owner for any taxes, interest, penalties and reasonable costs
related to these businesses for periods through the date of sale. On January 13, 2011, the Company
filed a Notice of Claim to protest the assessment with the French Tax Authorities. The Company and
its French legal counsel believe that the basis for the assessment is not valid, and accordingly,
will continue to appeal the claim through all available means. Accordingly, no amounts have been
recognized in the financial statements related to this matter.
|
Restructuring
|
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2011
|
|||||||||||||||||||||||||||||||||||||||||
Restructuring [Abstract] | Â | ||||||||||||||||||||||||||||||||||||||||
Restructuring |
Restructuring
During the six months ended June 30, 2011 and 2010, the Company recorded total expenses of $1.2
million and $1.7 million, respectively, for costs associated with restructuring plans including
impairment of property, plant and equipment, lease obligations, severance, consulting and other
related charges. Impairment charges for property, plant and equipment were based on appraisals or
estimated market values of similar assets which are considered level 2 inputs. Estimated lease
obligations associated with closed facilities were based on level 2 inputs.
In the three and six months ended June 30, 2011, the Company recorded expenses of $0.6 million and
$1.2 million, respectively, related to restructuring activities. The restructuring costs included
charges of $0.3 million and $0.7 million in the three and six months ended June 30, 2011,
respectively, related to the Distribution Segment and a $0.3 million write-down for an idle Lawn
and Garden manufacturing facility from the first quarter of 2011.
In the three and six months ended June 30, 2010, the Company recorded expenses of approximately
$0.9 million and $1.7 million, respectively, for restructuring costs that were primarily related to
rigging and transportation costs in connection with the movement of certain machinery and equipment
between facilities. In addition, during the first quarter of 2010 the Company sold its closed
Material Handling plant in Shelbyville, Kentucky for $5.1 million and recorded a gain on the sale
of $0.7 million.
The accrued liability balance for severance and other exit costs associated with restructuring is
included in Other Accrued expenses on the Condensed Consolidated Statement of Financial Position.
Activity related to the Company’s restructuring reserves as of June 30, 2011 is as follows:
As a result of restructuring activity and plant closures, approximately $5.0 million of property,
plant, and equipment has been classified as held for sale at both June 30, 2011 and December 31,
2010, and is included in other assets in the Condensed Consolidated Statements of Financial
Position.
|
Net Income Per Common Share
|
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2011
|
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Net Income Per Common Share [Abstract] | Â | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net Income Per Common Share |
Net Income (Loss) Per Common Share
Net income (loss) per common share, as shown on the Condensed Consolidated Statements of Income
(Loss), is determined on the basis of the weighted average number of common shares outstanding
during the period as follows:
Options to purchase 1,172,729 and 1,757,404 shares of common stock that were outstanding at
June 30, 2011 were not included in the computation of diluted earnings per share for the three
months and six months ended June 30, 2011, respectively, as the exercise price of these options was
greater than the average market price of common shares, and their effect would be anti-dilutive.
Options to purchase 1,584,830 that were outstanding at June 30, 2010 were not included in the
computation of diluted earnings per share for the three and six months ended June 30, 2010 as the
exercise price of these options was greater than the average market price of common shares, and
their effect would be anti-dilutive. In addition, 119,232 dilutive common shares were excluded from
the computation of the loss per common share in the three months ended June 30, 2010 due to the
Company’s net loss position.
|
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Goodwill
|
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2011
|
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Goodwill [Abstract] | Â | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill |
Goodwill
The change in goodwill for the six months ended June 30, 2011 was as follows:
|
Condensed Consolidated Statement of Shareholders' Equity (Unaudited) (USD $)
In Thousands |
Total
|
Common Stock
|
Additional Paid-In Capital
|
Accumulative Other Comprehensive Income
|
Retained Income (Deficit)
|
---|---|---|---|---|---|
Balance at Dec. 31, 2010 | $ 211,805 | $ 21,486 | $ 281,376 | $ 10,164 | $ (101,221) |
Net income | 11,377 | Â | Â | Â | 11,377 |
Foreign currency translation adjustment | Â | Â | Â | 2,634 | Â |
Purchases for treasury | Â | (227) | (3,495) | Â | Â |
Common stock issued | Â | 8 | 112 | Â | Â |
Stock based compensation | Â | Â | 1,607 | Â | Â |
Dividends - $.14 per share | Â | Â | Â | Â | (4,983) |
Balance at Jun. 30, 2011 | $ 218,838 | $ 21,267 | $ 279,600 | $ 12,798 | $ (94,827) |
Recent Accounting Pronouncements
|
6 Months Ended |
---|---|
Jun. 30, 2011
|
|
Recent Accounting Pronouncements [Abstract] | Â |
Recent Accounting Pronouncements |
Recent Accounting Pronouncements
In June 2011, the Financial Accounting Standards Board (FASB) issued Accounting Standards Updated
No. 2011-05, Comprehensive Income (Topic 220) — Presentation of Comprehensive Income. The new
accounting standard will require companies to present the components of net income and other
comprehensive income either as one continuous statement or two separate but consecutive statements.
The update eliminates the option to report other comprehensive income and its components in the
statement of changes in equity. The Company plans to adopt this guidance beginning in the first
quarter of 2012. The Company does not believe the adoption of this guidance will have a material
impact on the Company’s consolidated financial statements, as this guidance modifies presentation
of other comprehensive income already disclosed in the financial statements.
|
Fair Value Measurement
|
6 Months Ended | ||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2011
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Fair Value Measurement [Abstract] | Â | ||||||||||||||
Fair Value Measurement |
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 interest rates and relative short maturity (less than 90 days) of the revolving borrowings
under this agreement. The fair value of the Company’s $35 million fixed rate senior notes was
estimated at $38.4 million at June 30, 2011 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.
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Accumulated Other Comprehensive Income
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Jun. 30, 2011
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Comprehensive Income/Accumulated Other Comprehensive Income [Abstract] | Â | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accumulated Other Comprehensive Income |
Accumulated Other Comprehensive Income
As of June 30, 2011 and December 31, 2010, the balance in the Company’s accumulated other
comprehensive income is comprised of the following:
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Inventories
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6 Months Ended |
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Jun. 30, 2011
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Inventories [Abstract] | Â |
Inventories |
Inventories
Approximately 27 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 are subject to change in the final year-end LIFO inventory valuation and therefore,
no adjustment was recorded at June 30, 2011.
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Income Taxes
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6 Months Ended |
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Jun. 30, 2011
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Income Taxes [Abstract] | Â |
Income Taxes |
Income Taxes
As of December 31, 2010, the total amount of gross unrecognized tax benefits was $5.8 million of
which $5.5 million would reduce the Company’s effective tax rate. The unrecognized tax benefits
include $4.2 million from the tax position taken on the Company’s 2007 U.S. Corporate Income Tax
Return relating to the loss on the sale of its European Material Handling business. The amount of
accrued interest expense related to uncertain tax positions within the Company’s consolidated
financial position at December 31, 2010 was $0.4 million. No material changes have occurred in the liability for unrecognized tax benefits
during the six months ended June 30, 2011.
The Company recognizes accrued amounts of interest and penalties related to its uncertain tax
positions as part of its income tax expense within its Condensed Consolidated Statements of Income.
As of June 30, 2011, the Company and its significant subsidiaries are subject to examination for
the years after 2004 in Brazil, after 2005 in Canada, and after 2006 in the United States. The
Company and its subsidiaries are subject to examination in certain states within the United States
starting after 2005 and in the remaining states after 2006 and 2007.
In the current year, certain unrecognized tax benefits, including $4.2 million related to the
Company’s 2007 sale of its European Material Handling business, are expected to be recognized in
the quarter ending September 30, 2011.
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Retirement Plans
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Jun. 30, 2011
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Retirement Plans [Abstract] | Â | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Retirement Plans |
Retirement Plans
The Company and certain of its subsidiaries have pension and profit sharing plans covering
substantially all of their employees. The Company’s frozen defined benefit pension plan provides
benefits primarily based upon a fixed amount for each year of service as defined. The net periodic
pension cost for the three and six months ended June 30, 2011 and 2010, respectively, are as
follows:
As of June 30, 2011, the Company made contributions of $76 to the pension plan and expects to
make contributions totaling $268 in 2011.
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Segment Information
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Jun. 30, 2011
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Segment Information [Abstract] | Â | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Information |
Segment Information
Using the criteria of ASC 280 Segment Reporting, the Company has four operating segments: Lawn and
Garden, Material Handling, Distribution, and Engineered Products. Each of these operating segments
is also a reportable segment under the ASC 280 criteria.
None of the reportable segments include operating segments that have been aggregated. Some of these
segments contain individual business components that have been aggregated on the basis of common
management, customers, products, production processes and other economic characteristics.
Income (loss) before income taxes for each business segment is based on net sales less cost of
products sold, and the related selling, administrative and general expenses. In computing business
segment operating income, general corporate overhead expenses and interest expenses are not
included.
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Condensed Consolidated Statement of Shareholders' Equity (Unaudited) (Parenthetical) (USD $)
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6 Months Ended |
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Jun. 30, 2011
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Common stock dividends per share declared | $ 0.140 |
Retained Income (Deficit)
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Common stock dividends per share declared | $ 0.14 |
Supplemental Disclosure of Cash Flow Information
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Jun. 30, 2011
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Supplemental Disclosure of Cash Flow Information [Abstract] | Â | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Supplemental Disclosure of Cash Flow Information |
Supplemental Disclosure of Cash Flow Information
The Company’s cash payments for interest and income taxes for the three and six months ended June
30, 2011 and 2010 are as follows:
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Stock Compensation
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Jun. 30, 2011
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Stock Compensation [Abstract] | Â | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock Compensation |
Stock Compensation
The Company’s 2008 Incentive Stock Plan (the “2008 Plan”) authorizes the Compensation Committee of
the Board of Directors to issue up to 3,000,000 shares of various types of stock based awards
including stock options, restricted stock and stock appreciation
rights to key employees and directors. In general, options granted and outstanding vest over three
to five years and expire ten years from the date of grant.
Stock compensation expense was $1.0 million for the three months ended June 30, 2011 and $0.6
million for the three months ended June 30, 2010, respectively. Stock compensation expense was $1.6
million and $1.1 million for the six months ended June 30, 2011 and 2010, respectively. Stock
compensation is included in SG&A expense in the accompanying Condensed Consolidated Statements of
Income. Total unrecognized compensation costs related to non-vested share based compensation
arrangements at June 30, 2011 was approximately $3.9 million which is expected to be recognized
over the next three years.
On March 3, 2011, 355,025 stock option shares were granted with a three year vesting period. The
fair value of these option shares was estimated using a Trinomial Lattice option pricing model
based on assumptions set forth in the following table. The Company uses historical data to estimate
employee exercise and departure behavior. The risk free interest rate is based on the U.S. Treasury
yield curve in effect at the time of grant and through the expected term. The dividend yield rate
is based on the Company’s historical dividend yield, and expected volatility is derived from
historical volatility of the Company’s shares and those of similar companies measured against the
market as a whole.
The following table summarizes the stock option activity for the six months ended June 30,
2011:
The intrinsic value of a stock option is the amount by which the market value of the underlying
stock exceeds the exercise price of the option. The total intrinsic value of stock options
exercised during the six months ended June 30, 2011 and 2010 was approximately $4 and $13,
respectively.
In addition, at June 30, 2011 and December 31, 2010, the Company had outstanding 291,850 and
177,250 shares of restricted stock, respectively, with vesting periods through March 2014. The
restricted stock awards are rights to receive shares of common stock subject to forfeiture and
other restrictions, which generally vest over a three to four year period.
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