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 October 25, 2011 | |
Common Stock, without par value | 33,370,325 shares |
Assets | September 30, 2011 | December 31, 2010 | ||||||
(Unaudited) | ||||||||
Current Assets |
||||||||
Cash |
$ | 2,851 | $ | 4,705 | ||||
Accounts receivable-less allowances
of $4,126 and $2,950, respectively |
101,299 | 98,799 | ||||||
Inventories |
||||||||
Finished and in-process products |
75,099 | 67,580 | ||||||
Raw materials and supplies |
28,596 | 28,824 | ||||||
103,695 | 96,404 | |||||||
Prepaid expenses |
5,752 | 8,158 | ||||||
Deferred income taxes |
4,843 | 5,781 | ||||||
Total Current Assets |
218,440 | 213,847 | ||||||
Other Assets |
||||||||
Goodwill |
44,523 | 40,892 | ||||||
Patents and other intangible assets |
17,725 | 18,667 | ||||||
Other |
7,737 | 7,174 | ||||||
69,985 | 66,733 | |||||||
Property, Plant and Equipment, at Cost |
||||||||
Land |
4,124 | 4,369 | ||||||
Buildings and leasehold improvements |
55,659 | 59,690 | ||||||
Machinery and equipment |
386,724 | 383,664 | ||||||
446,507 | 447,723 | |||||||
Less allowances for depreciation
and amortization |
(309,010 | ) | (295,908 | ) | ||||
Property, plant and equipment, net |
137,497 | 151,815 | ||||||
$ | 425,922 | $ | 432,395 | |||||
1
Liabilities and Shareholders Equity | September 30, 2011 | December 31, 2010 | ||||||
(Unaudited) | ||||||||
Current Liabilities |
||||||||
Accounts payable |
$ | 60,947 | $ | 64,143 | ||||
Accrued expenses |
||||||||
Employee compensation |
20,380 | 18,294 | ||||||
Income taxes |
3,462 | 5,891 | ||||||
Taxes, other than income taxes |
2,683 | 1,970 | ||||||
Accrued interest |
844 | 195 | ||||||
Other |
17,088 | 15,533 | ||||||
Current portion of long-term debt |
305 | 305 | ||||||
Total Current Liabilities |
105,709 | 106,331 | ||||||
Long-term debt, less current portion |
79,925 | 83,530 | ||||||
Other liabilities |
13,107 | 5,936 | ||||||
Deferred income taxes |
24,168 | 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 33,572,151 and 35,315,732; net of
treasury shares of 4,340,506 and 2,592,175, respectively) |
20,405 | 21,486 | ||||||
Additional paid-in capital |
266,010 | 281,376 | ||||||
Accumulated other comprehensive income |
6,621 | 10,164 | ||||||
Retained deficit |
(90,023 | ) | (101,221 | ) | ||||
203,013 | 211,805 | |||||||
$ | 425,922 | $ | 432,395 | |||||
2
For The Three Months Ended | For The Nine Months Ended | |||||||||||||||
September | September | September | September | |||||||||||||
30, 2011 | 30, 2010 | 30, 2011 | 30, 2010 | |||||||||||||
Net sales |
$ | 190,045 | $ | 187,045 | $ | 560,291 | $ | 549,374 | ||||||||
Cost of sales |
142,543 | 145,568 | 416,732 | 429,033 | ||||||||||||
Gross profit |
47,502 | 41,477 | 143,559 | 120,341 | ||||||||||||
Selling, general and administrative expenses |
40,243 | 35,183 | 115,258 | 103,575 | ||||||||||||
Operating income |
7,259 | 6,294 | 28,301 | 16,766 | ||||||||||||
Interest expense, net |
1,264 | 1,722 | 3,655 | 5,373 | ||||||||||||
Income before income taxes |
5,995 | 4,572 | 24,646 | 11,393 | ||||||||||||
Income tax (benefit) expense |
(1,219 | ) | 1,353 | 6,055 | 3,743 | |||||||||||
Net income |
$ | 7,214 | $ | 3,219 | $ | 18,591 | $ | 7,650 | ||||||||
Income per common share: |
||||||||||||||||
Basic and diluted |
$ | 0.21 | $ | 0.09 | $ | 0.53 | $ | 0.22 | ||||||||
Dividends declared per share |
$ | 0.070 | $ | 0.065 | $ | 0.210 | $ | 0.195 | ||||||||
3
September 30, 2011 | September 30, 2010 | |||||||
Cash Flows From Operating Activities |
||||||||
Net income |
$ | 18,591 | $ | 7,650 | ||||
Items not affecting use of cash: |
||||||||
Depreciation |
24,102 | 22,482 | ||||||
Impairment charges and asset write-offs |
814 | -0- | ||||||
Amortization of intangible assets |
2,210 | 2,217 | ||||||
Non-cash stock compensation |
2,151 | 1,796 | ||||||
Provision for loss on accounts receivable |
1,179 | 557 | ||||||
Deferred taxes |
635 | (930 | ) | |||||
Other long-term liabilities |
3,015 | 51 | ||||||
Gain on sale of property, plant and equipment |
(591 | ) | (733 | ) | ||||
Other |
50 | -0- | ||||||
Cash flow provided by (used for) working capital: |
||||||||
Accounts receivable |
(5,024 | ) | (18,374 | ) | ||||
Inventories |
(8,759 | ) | 5,014 | |||||
Prepaid expenses |
2,294 | 1,442 | ||||||
Accounts payable and accrued expenses |
(422 | ) | (6,634 | ) | ||||
Net cash provided by operating activities |
40,245 | 14,538 | ||||||
Cash Flows From Investing Activities |
||||||||
Additions to property, plant and equipment |
(13,337 | ) | (14,508 | ) | ||||
Acquisition of business, net of cash acquired |
(1,100 | ) | (411 | ) | ||||
Proceeds from sale of property, plant and equipment |
1,082 | 5,213 | ||||||
Other |
(92 | ) | 209 | |||||
Net cash used for investing activities |
(13,447 | ) | (9,497 | ) | ||||
Cash Flows From Financing Activities |
||||||||
Net (repayment) borrowing on credit facility |
(3,212 | ) | 2,700 | |||||
Cash dividends paid |
(7,163 | ) | (6,915 | ) | ||||
Proceeds from issuance of common stock |
173 | 103 | ||||||
Repurchase of common stock |
(18,821 | ) | -0- | |||||
Net cash used for financing activities |
(29,023 | ) | (4,112 | ) | ||||
Foreign Exchange Rate Effect on Cash |
371 | 163 | ||||||
Net (decrease) increase in cash |
(1,854 | ) | 1,092 | |||||
Cash at January 1 |
4,705 | 4,728 | ||||||
Cash at September 30 |
$ | 2,851 | $ | 5,820 | ||||
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- | 18,591 | ||||||||||||
Foreign currency translation
adjustment |
-0- | -0- | (3,543 | ) | -0- | |||||||||||
Purchases for treasury |
(1,095 | ) | (17,726 | ) | -0- | -0- | ||||||||||
Common stock issued |
14 | 209 | -0- | -0- | ||||||||||||
Stock based compensation |
-0- | 2,151 | -0- | -0- | ||||||||||||
Dividends declared $.21 per share |
-0- | -0- | -0- | (7,393 | ) | |||||||||||
Balance at September 30, 2011 |
$ | 20,405 | $ | 266,010 | $ | 6,621 | $ | (90,023 | ) | |||||||
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 | ||||||||||||||||||||
(In thousands) | Balance at | Currency | Balance at | |||||||||||||||||
Segment | January 1, 2011 | Acquisitions | Translation | Impairment | September 30, 2011 | |||||||||||||||
Distribution |
$ | 214 | $ | -0- | $ | -0- | $ | -0- | $ | 214 | ||||||||||
Engineered Products |
707 | -0- | -0- | -0- | 707 | |||||||||||||||
Material Handling |
30,383 | 3,896 | -0- | -0- | 34,279 | |||||||||||||||
Lawn and Garden |
9,588 | -0- | (265 | ) | -0- | 9,323 | ||||||||||||||
Total |
$ | 40,892 | $ | 3,896 | $ | (265 | ) | $ | -0- | $ | 44,523 | |||||||||
7
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
Weighted average common shares outstanding |
||||||||||||||||
Basic |
34,354,210 | 35,310,744 | 34,938,806 | 35,301,608 | ||||||||||||
Dilutive effect of stock options and restricted stock |
106,742 | 71,667 | 89,607 | 59,131 | ||||||||||||
Weighted average common shares outstanding diluted |
34,460,952 | 35,382,411 | 35,028,413 | 35,360,739 | ||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
(In thousands) | 2011 | 2010 | 2011 | 2010 | ||||||||||||
Interest paid |
$ | 441 | $ | 116 | $ | 2,498 | $ | 3,505 | ||||||||
Income taxes paid |
$ | 1,576 | $ | 89 | $ | 7,855 | $ | 7,726 |
8
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
(In thousands) | 2011 | 2010 | 2011 | 2010 | ||||||||||||
Net income |
$ | 7,214 | $ | 3,219 | $ | 18,591 | $ | 7,650 | ||||||||
Other comprehensive income: |
||||||||||||||||
Foreign currency
translation adjustment |
(6,177 | ) | 2,510 | (3,543 | ) | 1,489 | ||||||||||
Comprehensive income |
$ | 1,037 | $ | 5,729 | $ | 15,048 | $ | 9,139 | ||||||||
September 30, | December 31, | |||||||
(In thousands) | 2011 | 2010 | ||||||
Foreign currency translation adjustments |
$ | 8,691 | $ | 12,234 | ||||
Pension adjustments |
(2,070 | ) | (2,070 | ) | ||||
Total |
$ | 6,621 | $ | 10,164 | ||||
9
(Dollars in thousands) | ||||
Balance at January 1, 2011 |
$ | 763 | ||
Provision (reversal)(a) |
(285 | ) | ||
Less: Payments |
(237 | ) | ||
Balance at September 30, 2011 |
$ | 241 | ||
(a) | Related to reserves for actions no longer needed for their originally intended
purposes. |
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 |
10
Average | Weighted | |||||||||||
Exercise | Average | |||||||||||
Shares | Price | Life | ||||||||||
Outstanding at January 1, 2011 |
1,845,210 | $ | 11.65 | |||||||||
Options Granted |
365,025 | 10.10 | ||||||||||
Options Exercised |
(8,868 | ) | 9.52 | |||||||||
Cancelled or Forfeited |
(150,644 | ) | 12.59 | |||||||||
Outstanding at September 30, 2011 |
2,050,723 | $ | 11.32 | 6.97 years | ||||||||
Exercisable at September 30, 2011 |
1,329,708 | $ | 11.82 |
Balance at January 1, 2011 |
$ | 5,767 | ||
Increase related to prior year tax positions |
288 | |||
Expiration of statute of limitations for assessment of taxes |
(4,963 | ) | ||
Balance at September 30, 2011 |
$ | 1,092 | ||
11
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
Service cost |
$ | 18 | $ | 9 | $ | 54 | $ | 27 | ||||||||
Interest cost |
76 | 80 | 228 | 240 | ||||||||||||
Expected return on assets |
(77 | ) | (74 | ) | (231 | ) | (222 | ) | ||||||||
Amortization of actuarial net loss |
16 | 15 | 48 | 45 | ||||||||||||
Net periodic pension cost |
$ | 33 | $ | 30 | $ | 99 | $ | 90 | ||||||||
Company contributions |
$ | 268 | $ | -0- | ||||||||||||
12
13
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
Net Sales | 2011 | 2010 | 2011 | 2010 | ||||||||||||
Lawn and Garden |
$ | 45,552 | $ | 49,569 | $ | 151,998 | $ | 164,315 | ||||||||
Material Handling |
72,070 | 69,381 | 204,808 | 192,321 | ||||||||||||
Distribution |
48,785 | 45,979 | 136,511 | 128,666 | ||||||||||||
Engineered Products |
29,360 | 28,031 | 85,182 | 82,187 | ||||||||||||
Intra-segment elimination |
(5,722 | ) | (5,915 | ) | (18,208 | ) | (18,115 | ) | ||||||||
Net Sales |
$ | 190,045 | $ | 187,045 | $ | 560,291 | $ | 549,374 | ||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
Income Before Income Taxes | 2011 | 2010 | 2011 | 2010 | ||||||||||||
Lawn and Garden |
$ | (1,413 | ) | $ | (2,542 | ) | $ | 846 | $ | (3,264 | ) | |||||
Material Handling |
8,870 | 7,080 | 27,526 | 15,942 | ||||||||||||
Distribution |
4,564 | 4,480 | 11,651 | 11,009 | ||||||||||||
Engineered Products |
3,001 | 2,334 | 8,381 | 7,971 | ||||||||||||
Corporate |
(7,763 | ) | (5,058 | ) | (20,103 | ) | (14,892 | ) | ||||||||
Interest expense-net |
(1,264 | ) | (1,722 | ) | (3,655 | ) | (5,373 | ) | ||||||||
Income before income taxes |
$ | 5,995 | $ | 4,572 | $ | 24,646 | $ | 11,393 | ||||||||
14
Item 2. | Managements Discussion and Analysis of Financial Condition and Results of Operations |
Quarter Ended | ||||||||||||||||
(dollars in millions) | September 30, | |||||||||||||||
Segment | 2011 | 2010 | Change | % Change | ||||||||||||
Lawn and Garden |
$ | 45.6 | $ | 49.6 | $ | (4.0 | ) | (8 | %) | |||||||
Material Handling |
$ | 72.1 | $ | 69.4 | $ | 2.7 | 4 | % | ||||||||
Distribution |
$ | 48.8 | $ | 46.0 | $ | 2.8 | 6 | % | ||||||||
Engineered Products |
$ | 29.4 | $ | 28.0 | $ | 1.4 | 5 | % | ||||||||
Intra-segment elimination |
$ | (5.9 | ) | $ | (6.0 | ) | $ | 0.1 | 1 | % | ||||||
TOTAL |
$ | 190.0 | $ | 187.0 | $ | 3.0 | 2 | % | ||||||||
Quarter Ended | ||||||||
(dollars in millions) | September 30, | |||||||
Cost of Sales and Gross Profit | 2011 | 2010 | ||||||
Cost of sales |
$ | 142.5 | $ | 145.6 | ||||
Gross profit |
$ | 47.5 | $ | 41.5 | ||||
Gross profit as a percentage of sales |
25.0 | % | 22.2 | % |
15
Quarter Ended | ||||||||||||
(dollars in millions) | September 30, | |||||||||||
SG&A Expenses | 2011 | 2010 | Change | |||||||||
SG&A expenses |
$ | 40.2 | $ | 35.2 | $ | 5.0 | ||||||
SG&A expenses as a percentage of sales |
21.2 | % | 18.8 | % |
Quarter Ended | ||||||||||||||||
(dollars in millions) | September 30, | |||||||||||||||
Net Interest Expense | 2011 | 2010 | Change | % Change | ||||||||||||
Net interest expense |
$ | 1.3 | $ | 1.7 | $ | (0.4 | ) | (24 | %) | |||||||
Outstanding borrowings |
$ | 80.2 | $ | 107.1 | $ | (26.9 | ) | (25 | %) | |||||||
Average borrowing rate |
5.64 | % | 6.01 | % |
Quarter Ended | ||||||||||||||||
(dollars in millions) | September 30, | |||||||||||||||
Segment | 2011 | 2010 | Change | % Change | ||||||||||||
Lawn and Garden |
$ | (1.4 | ) | $ | (2.5 | ) | $ | 1.1 | 44 | % | ||||||
Material Handling |
$ | 8.9 | $ | 7.0 | $ | 1.9 | 27 | % | ||||||||
Distribution |
$ | 4.6 | $ | 4.5 | $ | 0.1 | 2 | % | ||||||||
Engineered Products |
$ | 3.0 | $ | 2.4 | $ | 0.6 | 25 | % | ||||||||
Corporate and interest |
$ | (9.1 | ) | $ | (6.8 | ) | $ | (2.3 | ) | (34 | %) | |||||
TOTAL |
$ | 6.0 | $ | 4.6 | $ | 1.4 | 30 | % | ||||||||
Quarter Ended | ||||||||
(dollars in millions) | September 30, | |||||||
Consolidated Income Taxes | 2011 | 2010 | ||||||
Income before taxes |
$ | 6.0 | $ | 4.6 | ||||
Income taxes (benefit) |
$ | (1.2 | ) | $ | 1.4 | |||
Effective tax rate |
20.3 | % | 29.6 | % |
16
Nine Months Ended | ||||||||||||||||
(dollars in millions) | September 30, | |||||||||||||||
Segment | 2011 | 2010 | Change | % Change | ||||||||||||
Lawn and Garden |
$ | 152.0 | $ | 164.3 | $ | (12.3 | ) | (7 | %) | |||||||
Material Handling |
$ | 204.8 | $ | 192.3 | $ | 12.5 | 7 | % | ||||||||
Distribution |
$ | 136.5 | $ | 128.7 | $ | 7.8 | 6 | % | ||||||||
Engineered Products |
$ | 85.2 | $ | 82.2 | $ | 3.0 | 4 | % | ||||||||
Intra-segment elimination |
$ | (18.2 | ) | $ | (18.1 | ) | $ | (0.1 | ) | (1 | %) | |||||
TOTAL |
$ | 560.3 | $ | 549.4 | $ | 10.9 | 2 | % | ||||||||
Nine Months Ended | ||||||||
(dollars in millions) | September 30, | |||||||
Cost of Sales and Gross Profit | 2011 | 2010 | ||||||
Cost of sales |
$ | 416.7 | $ | 429.0 | ||||
Gross profit |
$ | 143.6 | $ | 120.3 | ||||
Gross profit as a percentage of sales |
25.6 | % | 21.9 | % |
17
Nine Months Ended | ||||||||||||
(dollars in millions) | September 30, | |||||||||||
SG&A Expenses | 2011 | 2010 | Change | |||||||||
SG&A expenses |
$ | 115.3 | $ | 103.6 | $ | 11.7 | ||||||
SG&A expenses as a percentage of sales |
20.6 | % | 18.9 | % |
Nine Months Ended | ||||||||||||||||
(dollars in millions) | September 30, | |||||||||||||||
Net Interest Expense | 2011 | 2010 | Change | % Change | ||||||||||||
Net interest expense |
$ | 3.7 | $ | 5.4 | $ | (1.7 | ) | (32 | %) | |||||||
Outstanding borrowings |
$ | 80.2 | $ | 107.1 | $ | (26.9 | ) | (25 | %) | |||||||
Average borrowing rate |
5.21 | % | 6.06 | % |
Nine Months Ended | ||||||||||||||||
(dollars in millions) | September 30, | |||||||||||||||
Segment | 2011 | 2010 | Change | % Change | ||||||||||||
Lawn and Garden |
$ | 0.8 | $ | (3.2 | ) | $ | 4.0 | 126 | % | |||||||
Material Handling |
$ | 27.5 | $ | 15.9 | $ | 11.6 | 73 | % | ||||||||
Distribution |
$ | 11.7 | $ | 11.0 | $ | 0.7 | 6 | % | ||||||||
Engineered Products |
$ | 8.4 | $ | 8.0 | $ | 0.4 | 5 | % | ||||||||
Corporate and interest |
$ | (23.8 | ) | $ | (20.3 | ) | $ | (3.5 | ) | (17 | %) | |||||
TOTAL |
$ | 24.6 | $ | 11.4 | $ | 13.2 | 116 | % | ||||||||
Nine Months Ended | ||||||||
(dollars in millions) | September 30, | |||||||
Consolidated Income Taxes | 2011 | 2010 | ||||||
Income before taxes |
$ | 24.6 | $ | 11.4 | ||||
Income taxes |
$ | 6.1 | $ | 3.7 | ||||
Effective tax rate |
24.6 | % | 32.9 | % |
18
Required Level | Actual Level | |||||||
Interest Coverage Ratio |
2.25 to 1 (minimum) | 7.77 | ||||||
Leverage Ratio |
3.25 to 1 (maximum) | 1.12 |
Item 3. | Quantitative and Qualitative Disclosure About Market Risk |
19
Item 4. | Controls and Procedures |
Item 1. | Legal Proceedings |
20
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds |
Total Number of | Maximum number of | |||||||||||||||
Shares Purchased as | Shares that may yet | |||||||||||||||
Total Number of | Average Price Paid | Part of the Publicly | be Purchased Under | |||||||||||||
Shares Purchased | per Share | Announced Program | the Plan (1) | |||||||||||||
7/1/11 to 7/31/11 |
276,100 | $ | 11.03 | 647,879 | 1,352,121 | |||||||||||
8/1/11 to 8/31/11 |
579,400 | $ | 10.40 | 1,227,279 | 772,721 | |||||||||||
9/1/11 to 9/30/11 |
567,841 | $ | 10.62 | 1,795,120 | 204,880 |
(1) | On June 1, 2011, the Company announced that it 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 has been
established in connection with the Board authorized five million share repurchase that was
previously announced on May 2, 2011. |
Item 6. | Exhibits |
MYERS INDUSTRIES, INC. |
||||
Date: October 28, 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) |
||||
21
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)
|
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)
|
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(k)
|
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(l)
|
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(m)
|
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(n)
|
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(o)
|
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(p)
|
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(q)
|
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(r)
|
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 September 30, 2011 filed with the SEC on August 3, 2011, formatted in XBRL includes: (i) Condensed Consolidated Statements of Financial Position at September 30, 2011 and December 31, 2010, (ii) Condensed Consolidated Statements of Income For the fiscal periods ended September 30, 2011 and 2010, (iii) Condensed Consolidated Statements of Cash Flows for the fiscal periods ended September 30, 2011 and 2010, (iv) Condensed Consolidated Statement of Shareholders Equity for the fiscal period ended September 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 | |||||
Exhibit 31 (a)
Certification
Per Section 302 of the Sarbanes-Oxley Act of 2002
I, John C. Orr, certify that:
1. I have reviewed the quarterly report on Form 10-Q of Myers Industries, Inc. for the period ended September 30, 2011 which this certification accompanies;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report;
4. The company’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the company and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the company’s internal control over financial reporting that occurred during the company’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the company’s internal control over financial reporting; and
5. The company’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the company’s auditors and the audit committee of the company’s board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the company’s ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Date: October 28, 2011
|
/s/ John C. Orr | |
|
||
|
John C. Orr, President and Chief Executive Officer |
Exhibit 31
(b)
Certification Per Section 302 of the Sarbanes-Oxley Act
of 2002
I, Donald A. Merril, certify that:
1. I have reviewed the quarterly report on Form 10-Q of Myers Industries, Inc. for the period ended September 30, 2011 which this certification accompanies;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report;
4. The company’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the company and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the company’s internal control over financial reporting that occurred during the company’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the company’s internal control over financial reporting; and
5. The company’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the company’s auditors and the audit committee of the company’s board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the company’s ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Date: October 28, 2011
|
/s/ Donald A. Merril | |
|
||
|
Donald A. Merril, Senior Vice President, Chief
Financial Officer and Corporate Secretary |
Exhibit 32
CERTIFICATION
PURSUANT TO SECTION 906
OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Myers Industries, Inc. (the Company) on Form 10-Q for the period ended September 30, 2011, as filed with the Securities and Exchange Commission on the date hereof (the Report), I, John C. Orr, President and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, and to my knowledge:
(1) The Quarterly Report on Form 10-Q of the Company for the period ended September 30, 2011 which this certification accompanies fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
/s/ John C. Orr | |
John C. Orr, President and
Chief Executive Officer |
|
Dated: October 28,
2011
|
Exhibit 32
CERTIFICATION
PURSUANT TO SECTION 906
OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Myers Industries, Inc. (the Company) on Form 10-Q for the period ended September 30, 2011, as filed with the Securities and Exchange Commission on the date hereof (the Report), I, Donald A. Merril, Senior Vice President, Chief Financial Officer and Corporate Secretary of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, and to my knowledge:
(1) The Quarterly Report on Form 10-Q of the Company for the period ended September 30, 2011 which this certification accompanies fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
/s/ Donald A. Merril | |
Donald A. Merril, Senior Vice
President, Chief Financial
Officer and Corporate Secretary |
|
Dated: October 28,
2011
|
A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.
Condensed Consolidated Statements of Financial Position (Parenthetical) (USD $) In Thousands, except Share data | Sep. 30, 2011 | Dec. 31, 2010 |
---|---|---|
Current Assets | ||
Allowances for accounts receivable | $ 4,126 | $ 2,950 |
Shareholders' Equity | ||
Preferred Shares, shares authorized | 1,000,000 | 1,000,000 |
Preferred Shares, shares issued | ||
Preferred Shares, shares outstanding | ||
Common Shares, par value | ||
Common Shares, shares authorized | 60,000,000 | 60,000,000 |
Common Shares, shares outstanding | 33,572,151 | 35,315,732 |
Treasury Shares, shares | 4,340,506 | 2,592,175 |
Condensed Consolidated Statements of Income (Unaudited) (USD $) In Thousands, except Per Share data | 3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2011 | Sep. 30, 2010 | Sep. 30, 2011 | Sep. 30, 2010 | |
Condensed Consolidated Statements of Income [Abstract] | ||||
Net sales | $ 190,045 | $ 187,045 | $ 560,291 | $ 549,374 |
Cost of sales | 142,543 | 145,568 | 416,732 | 429,033 |
Gross profit | 47,502 | 41,477 | 143,559 | 120,341 |
Selling, general and administrative expenses | 40,243 | 35,183 | 115,258 | 103,575 |
Operating income | 7,259 | 6,294 | 28,301 | 16,766 |
Interest expense, net | 1,264 | 1,722 | 3,655 | 5,373 |
Income before income taxes | 5,995 | 4,572 | 24,646 | 11,393 |
Income tax (benefit) expense | (1,219) | 1,353 | 6,055 | 3,743 |
Net income | $ 7,214 | $ 3,219 | $ 18,591 | $ 7,650 |
Income per common share: | ||||
Basic and diluted | $ 0.21 | $ 0.09 | $ 0.53 | $ 0.22 |
Dividends declared per share | $ 0.070 | $ 0.065 | $ 0.210 | $ 0.195 |
Retirement Plans | 9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2011 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Retirement Plans [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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 nine months ended September 30, 2011 and 2010, respectively, are as
follows:
|
Document and Entity Information (USD $) | 9 Months Ended | ||
---|---|---|---|
Sep. 30, 2011 | Oct. 25, 2011 | Jun. 30, 2010 | |
Document and Entity Information [Abstract] | |||
Entity Registrant Name | MYERS INDUSTRIES INC | ||
Entity Central Index Key | 0000069488 | ||
Document Type | 10-Q | ||
Document Period End Date | Sep. 30, 2011 | ||
Amendment Flag | false | ||
Document Fiscal Year Focus | 2011 | ||
Document Fiscal Period Focus | Q3 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Accelerated Filer | ||
Entity Public Float | $ 261,520,997 | ||
Entity Common Stock, Shares Outstanding | 33,370,325 |
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Inventories | 9 Months Ended |
---|---|
Sep. 30, 2011 | |
Inventories [Abstract] | |
Inventories |
Inventories
Approximately one quarter 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 as of an interim period.
|
Segment Information | 9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2011 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Information [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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 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.
|
Supplemental Disclosure of Cash Flow Information | 9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Supplemental Disclosure of Cash Flow Information [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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 nine month periods
ended September 30, 2011 and 2010 are as follows:
|
Statement of Accounting Policy | 9 Months Ended |
---|---|
Sep. 30, 2011 | |
Statement of Accounting Policy [Abstract] | |
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 September 30, 2011, and the results of operations and cash flows for the periods presented.
The results of operations for the three and nine months ended September 30, 2011 are not
necessarily indicative of the results of operations that will occur for the year ending December
31, 2011.
|
Goodwill | 9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2011 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill |
Goodwill
The following table presents the net carrying amount of goodwill allocated by reporting unit, and
changes for the nine months ended September 30, 2011:
|
Accumulated Other Comprehensive Income | 9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reclassification/Comprehensive Income/Accumulated Other Comprehensive Income [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accumulated Other Comprehensive Income |
Accumulated Other Comprehensive Income
As of September 30, 2011 and December 31, 2010, the balance in the Company’s accumulated other
comprehensive income is comprised of the following:
|
Discontinued Operations | 9 Months Ended |
---|---|
Sep. 30, 2011 | |
Discontinued Operations [Abstract] | |
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.
|
Acquisitions | 9 Months Ended |
---|---|
Sep. 30, 2011 | |
Acquisitions [Abstract] | |
Acquisitions |
Acquisitions
On July 20, 2011, the Company acquired tooling assets and intellectual property from Material
Improvements L.P. for a new reusable plastic container used in producing, shipping and processing
bulk natural cheese. The total purchase price was $5.7 million, comprised of a $1.1 million cash
payment and $4.6 million contingent consideration. The preliminary allocation of purchase price
included $0.3 million of property, plant and equipment, amortizable intangible assets, which
included $1.2 million in technology and $0.2 million for trade name, and $3.9 million in goodwill.
These assets and assumed liabilities were recorded at estimated fair value as of the date of the
acquisition using primarily level 3 inputs. The operating results of the business acquired are
included in our Material Handling Segment; however, no sales have been recorded during the third
quarter related to the acquisition. The Company is awaiting final valuation studies to complete
the purchase price allocation.
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.
|
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 | 18,591 | 18,591 | |||
Foreign currency translation adjustment | (3,543) | ||||
Purchases for treasury | (1,095) | (17,726) | |||
Common stock issued | 14 | 209 | |||
Stock based compensation | 2,151 | ||||
Dividends declared - $.21 per share | (7,393) | ||||
Balance at Sep. 30, 2011 | $ 203,013 | $ 20,405 | $ 266,010 | $ 6,621 | $ (90,023) |
Reclassification | 9 Months Ended |
---|---|
Sep. 30, 2011 | |
Reclassification/Comprehensive Income/Accumulated Other Comprehensive Income [Abstract] | |
Reclassification |
Reclassification
Certain prior year amounts in the accompanying condensed consolidated financial statements have
been restated in conformity with generally accepted accounting principles to conform to the current
year’s presentation.
|
Recent Accounting Pronouncements | 9 Months Ended |
---|---|
Sep. 30, 2011 | |
Recent Accounting Pronouncements [Abstract] | |
Recent Accounting Pronouncements |
Recent Accounting Pronouncements
In June 2011, the Financial Accounting Standards Board (FASB) issued Accounting Standards Updated
(ASU) 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.
In September 2011, the FASB issued ASU No. 2011-08, Intangibles — Goodwill and Other (Topic 350).
The update gives companies the option to perform a qualitative assessment that may enable them to
forgo the annual two-step test for impairment. ASU No. 2011-08 allows a qualitative assessment to
first be performed to determine whether it is more likely than not that the fair value of a
reporting unit is less than its carrying value. If a company concludes that this is the case, it
must perform the two-step test. Otherwise a company does not have to perform the two-step test.
The ASU also includes a revised list of events and circumstances to determine whether it is more
likely than not that the fair value of a reporting unit is less than its carrying amount. The ASU
is effective for fiscal years beginning after December 15, 2011 with early adoption permitted. The
Company conducts its annual impairment assessment as of October 1, which will include adoption of
this guidance.
|
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MG,G)R
Comprehensive Income | 9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reclassification/Comprehensive Income/Accumulated Other Comprehensive Income [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Comprehensive Income |
Comprehensive Income
A summary of comprehensive income for the three and nine month periods ended September 30, 2011 and
2010 is as follows:
|
Fair Value Measurement | 9 Months Ended | |||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2011 | ||||||||||||||||||||||||||||
Fair Value Measurement [Abstract] | ||||||||||||||||||||||||||||
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 $38.7 million at September 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.
|
Stock Compensation | 9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock Compensation [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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 a three to five year period and
expire ten years from the date of grant.
Stock compensation expense was $0.5 million for the three months ended September 30, 2011 and $0.7
million for the three months ended September 30, 2010. Stock compensation expense was $2.2 million
and $1.8 million for the nine months ended September 30, 2011 and 2010, respectively. Stock
compensation is included in selling, general and administrative expenses in the accompanying
Condensed Consolidated Statements of Income. Total unrecognized compensation costs related to
non-vested share based compensation arrangements at September 30, 2011 was approximately $3.2
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 nine months ended September 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 all stock
options exercised during the nine months ended September 30, 2011 and 2010 was approximately $16
and $13, respectively.
In addition, at September 30, 2011 and December 31, 2010, the Company had outstanding 288,500 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.
|
Income Taxes | 9 Months Ended | ||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2011 | |||||||||||||||||||||||||||||||||||||||||
Income Taxes [Abstract] | |||||||||||||||||||||||||||||||||||||||||
Income Taxes |
Income Taxes
For the quarter ended September 30, 2011, the Company had a tax benefit of $1.2 million. The
Company recognized net favorable income tax adjustments of approximately $3.8 million that were
largely the result of reversing previously reserved tax benefits related to the loss on the sale of
one of our subsidiaries in 2007 and other tax adjustments, including provision to return
adjustments resulting from changes in estimates. The tax benefit generated by the sale and the
related accrued interest was reversed in the third quarter based on the expiration of the statute
of limitations for assessment of the taxes.
The effective tax rate for the quarter ended September 30, 2010 was 29.6% and primarily reflects
the benefit of approximately $0.3 million from the recognition of tax benefits previously reserved.
As of September 30, 2011, the total amount of unrecognized tax benefits was approximately $1.0
million of which $0.6 million would reduce the Company’s effective tax rate. The amount of accrued
interest related to uncertain tax positions at September 30, 2011 was approximately $0.1 million.
The Company recognizes accrued amounts of interest and penalties related to uncertain tax positions
as part of its income tax expense.
The following table summarized current year activity related to the Company’s unrecognized tax
benefits:
As of September 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 2007 in the United States. The
Company and its subsidiaries are subject to examination in certain states within the United States
starting after 2006 and in the remaining states after 2007.
|
Contingencies | 9 Months Ended |
---|---|
Sep. 30, 2011 | |
Contingencies [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. 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.
Environmental
New Idria Mercury Mine
In September 2011, a preliminary notification was issued from the U.S. Environmental Protection
Agency (EPA) adding the New Idria Mercury Mine site located near Hollister, California to the
Superfund National Priorities List (NPL) because of alleged contaminants discharged to California
waterways. The effective date of the NPL is October 17, 2011. The New Idria Quicksilver Mining
Company, founded in 1936, owned and operated the New Idria Mine through 1972. In 1981, New Idria
was merged into Buckhorn Inc., which was 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.
The Company is subject to environmental laws and regulations which may require that the Company
investigate and remediate the effects of the release or disposal of materials at sites with past
and present operations. 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 during the three months ended
September 30, 2011 related to performing a remedial investigation and feasibility study to
determine the extent of remediation, if any, and the screening of alternatives. As investigation
and remediation proceed, it is possible that adjustments to the liability will be necessary to
reflect new information. Estimates of the Company’s liability are based on current facts, laws,
regulations and technology. Estimates of the Company’s environmental liabilities are further
subject to uncertainties regarding the nature and extent of site contamination, the range of
remediation alternatives available, evolving remediation standards, imprecise engineering
evaluation
and cost estimates, the extent of corrective actions that may be required and the number and
financial condition of other PRPs, as well as 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.
California Regional Water Quality Control Board
In October 2008, the Company and its subsidiary, Buckhorn Inc., along with a number of other
parties were identified in a planning document adopted 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.
Other
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.
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 its
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.
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Condensed Consolidated Statement of Shareholders' Equity (Unaudited) (Parenthetical) (USD $) | 9 Months Ended |
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Sep. 30, 2011 | |
Dividends declared per share | $ 0.210 |
Retained Income (Deficit) | |
Dividends declared per share | $ 0.21 |
Net Income Per Common Share | 9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net Income Per Common Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net Income Per Common Share |
Net Income Per Common Share
Net income per common share, as shown on the Condensed Consolidated Statements of Income, is
determined on the basis of the weighted average number of common shares outstanding during the
period as follows:
Options to purchase 692,810 and 1,159,679 shares of common stock that were outstanding for the
three months and nine months ended September 30, 2011, respectively, were not included in the
computation of diluted earnings per share for these respective periods 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 1,570,196 that were outstanding at September 30, 2010 were not
included in the computation of diluted earnings per share amounts in 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.
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Restructuring | 9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2011 | |||||||||||||||||||||||||||||||||||||||||||||||
Restructuring [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||
Restructuring |
Restructuring
During the nine months ended September 30, 2011, the Company recorded net expenses of $0.1 million
in selling, general and administrative (“SG&A”) and
$1.2 million in cost of goods sold (“COS”) for
costs associated with restructuring plans including impairment of property, plant and equipment,
lease obligations, severance, consulting and other related charges. Restructuring expenses recorded
during the nine months ended September 30, 2010 were $1.1 million in SG&A and $1.0 million in COS.
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 nine months ended September 30, 2011, the Company recorded expenses of $0.1
million and $1.3 million, respectively, related to restructuring activities. Restructuring costs in
the three months ended September 30, 2011 included charges of $0.5 million in the Distribution
Segment related to severance and non-cancelable lease costs offset by a gain of $0.5 million on
the sale of distribution facility. In addition, $0.1 million of restructuring charges were recorded
in the Engineered Products Segment. In the nine months ended September 30, 2011, net restructuring
costs of $0.7 million in the Distribution Segment related to charges of $1.2 million offset by a
gain of $0.5 million from a sale of a facility and a $0.3 million write-down for an idle Lawn and
Garden manufacturing facility in the first quarter. In addition, restructuring charges of $0.3
million in the Engineered Products Segment for the nine month period ended September 30, 2011
related to non-cancelable lease costs.
In the three and nine months ended September 30, 2010, the Company recorded expenses of
approximately $0.4 million and $2.1 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 in the Condensed Consolidated Statements of Financial Position.
Activity related to the Company’s restructuring reserves as of September 30, 2011 is as follows:
As a result of restructuring activity and plant closures, approximately $5.7 million of property,
plant, and equipment has been classified as held for sale at September 30, 2011 and is included in
Other Assets in the Condensed Consolidated Statements of Financial Position. At December 31, 2010
approximately $5.0 million was classified as held for sale.
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