Myers Industries, Inc. 10-K

10-K 1 l05649ae10vk.htm MYERS INDUSTRIES, INC. 10-K Myers Industries, Inc. 10-K

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-K

[X]

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For the Fiscal Year Ended December 31, 2003

Commission File Number 001-08524

MYERS INDUSTRIES, INC.

(Exact name of registrant as specified in its charter)


OHIO		34-0778636
(State or other jurisdiction of incorporation or organization)		(IRS Employer Identification Number)


1293 S. Main Street, Akron, Ohio	44301	(330) 253-5592
(Address of Principal Executive Offices)	(Zip Code)	(Telephone Number)


Securities Registered Pursuant to		Name of Each Exchange
Section 12(b) of the Act:		on which registered:
Common Stock, Without Par Value		New York Stock Exchange
(Title of Class)

Securities Registered Pursuant to Section 12(g) of the Act: None

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to the filing requirements for at least the past 90 days. Yes [X] No [ ]

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [ ]

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Act). Yes [X] No [ ]

State the aggregate market value of the voting and non-voting common equity stock held by non-affiliates using the closing price of the registrant as of June 30, 2003: $286,045,560. Indicate the number of shares outstanding of registrant’s common stock as of June 30, 2003: 30,110,059 Shares of Common Stock, without par value.

TABLE OF CONTENTS


	ITEM 6. Selected Financial Data
Exhibit 10(N) Loan Agreement
Exhibit 10(O) Note Purchase Agreement
Exhibit 21 Subsidiaries
Exhibit 23(A) Consent of Ernst & Young
Exhibit 23(B) Statement Regarding Consent
Exhibit 23(C) Consent of Ernst & Young/Myers Emp
Exhibit 31.1 Certification of Stephen E Myers--302
Exhibit 31.2 Certification of Gregory Stodnick-302
Exhibit 32 Certification of Stephen E Myers--906

DOCUMENTS INCORPORATED BY REFERENCE

(1) Portions of Registrant’s Notice of 2004 Annual Meeting and Proxy Statement, dated March 15, 2004, in Part III (Items 10, 11, 12 and 13)

CROSS REFERENCE SHEET

PURSUANT TO FORM 10-K GENERAL INSTRUCTION G(4)


Part/Item		Form 10-K Heading	Reference Material

	III/10	Directors and Executive Officers of the Registrant	Proxy Statement(1) pages 3 through 8
	III/11	Executive Compensation	Proxy Statement pages 9 through 13
	III/12	Security Ownership of Certain Beneficial Owners and Management	Proxy Statement pages 3 through 6, page 11 through 13
	III/13	Certain Relationships and Related Transactions	Proxy Statement page 7

(1) Registrant’s Notice of 2004 Annual Meeting of Shareholders and Proxy Statement

PART I


ITEM 1.	Business

(a) General Development of Business

In 2003, Myers Industries, Inc. (the Company) had net sales of $661.1 million, an increase of 9 percent from the $608.0 million in 2002. Despite the increased sales, 2003 net income of $16.3 million declined 32 percent from the $24 million in 2002 as higher raw material costs and competitive pricing pressures combined to reduce profitability.

For the quarter ended December 31, 2003, net sales were a record $176.5 million, an increase of 11 percent from the prior year. Net income for the quarter was $4.4 million, an increase of 8 percent from the prior year.

In February 2004, the Company entered into a new $225 million unsecured revolving credit facility. Initial borrowings under the new credit facility were used to refinance the Company’s existing multi-currency loan agreement which was due to expire in February 2005. In December 2003, the Company issued $100 million in Senior Unsecured Notes consisting of $65 million of 6.08 percent, 7 year notes and $35 million of 6.81 percent, ten year notes. Proceeds from the issuance of these notes were used to repay bank debt outstanding at that time. During 2003 total debt was reduced by $17.4 million and debt as a percentage of total capitalization was reduced to 42 percent at December 31, 2003 compared to 48 percent at the end of 2002.

(b) Financial Information About Industry Segments

The response to this section of Item 1 is contained in the Industry Segments footnote of the Notes to Consolidated Financial Statements under Item 8 of this report.

(c) Description of Business

The Company conducts its business activities in two segments, manufacturing and distribution. For the fiscal year ended December 31, 2003, the manufacturing segment generated approximately 77% of sales, while the distribution segment contributed approximately 23% of sales.

Our manufacturing segment designs, manufactures, and markets a variety of plastic and rubber products, ranging from plastic material handling containers and storage boxes to rubber OEM parts and tire repair materials. These products are made through a variety of molding processes in 25 facilities located throughout North America and Europe.

Our distribution segment is engaged in the distribution of tools, equipment, and supplies used for tire and wheel service and automotive underbody repair. The distribution segment operates through 40 branches located in major cities throughout the United States and in foreign countries through export and businesses in which we hold an equity interest.


	*Our Manufacturing Segment*

In our manufacturing segment, we design, manufacture, and market more than 11,000 products from plastic and rubber. We currently operate 18 manufacturing facilities in the United States, six in Western Europe and one in Canada. Our manufactured plastic and rubber products are sold nationally and internationally by a direct sales force and through independent sales representatives.

Key Manufactured Product Areas

• Reusable Plastic Material Handling Containers

• Plastic Planters

• Plastic Storage & Organization Products

• Plastic Storage Tanks

• Plastic and Metal Material Handling Carts

• Rubber OEM & Replacement Parts

• Tire Repair & Retreading Products

• Custom Rubber Sheet Stock

• Reflective Highway Marking Products

Product Brands

• Buckhorn

• Akro-Mils

• Allibert Équipement

• Ameri-Kart

• Buckhorn Rubber

• Dillen

• Listo

• Patch Rubber

• raaco

Manufacturing Capabilities

• Plastic & Rubber Injection Molding

• Compression Molding

• Winding Extrusion

• Vacuum Forming

• Rotational Molding

• Rubber Compounding, Calendering & Extrusion

• Rubber-to-Metal Bonding

• Blow Molding

• Metal Forming

Representative Markets

• Agriculture

• Automotive

• Chemical

• Construction

• Consumer

• Food Processing & Distribution

• General Industrial

• Healthcare

• Horticulture

• Marine/ Watercraft

• Recreational Vehicle

• Telecommunications

• Tire Repair & Retread

• Transportation

• Waste Collection

• Water Control

Our largest product line is reusable plastic material handling containers. These products help customers efficiently and economically move products and reduce solid waste in closed-loop distribution systems. We are one of the leading manufacturers of these material handling products, which include collapsible bulk boxes, hand-held containers and trays, small parts bins, pallets, and a variety of other specialty items. We believe that we are one of the few manufacturers positioned to supply material handling product solutions to customers worldwide.

Our material handling products are utilized for shipping and handling a wide range of industrial and commercial items, including automotive, appliance, and electronic components; food products such as meat, poultry, and produce; bulk seed and feed; health and beauty care products; apparel and textiles; and hardware. These products deliver specific cost-saving and productivity benefits to our customers. At the Saturn plant in

Springhill, Tennessee, our containers and pallets are reused hundreds of times to carry fasteners and bumpers from suppliers directly to the assembly area, reducing the scrap rate and eliminating costly solid waste from cardboard boxes and wood pallets. Chicken delivered to KFC restaurants across the United States comes in the reusable container that we pioneered; the container better protects the chicken during transport and is more sanitary than cardboard boxes. Our plastic bins are used on assembly lines, at distribution centers and in retail outlets throughout the world to organize small parts and other items.

Growers, retailers, and consumers use our plastic planters and trays to create plant and floral displays. We manufacture a broad line of indoor/outdoor decorative planters, pots, bowls, window boxes, urns, and grower containers and trays; we are also North America’s largest producer of hanging baskets. These items serve the needs of the grower at greenhouses and nurseries, as well as retail garden centers, home centers, and mass merchandisers such as Target®, Kmart®, and Wal-Mart®.

For consumers, we adapt storage solutions for industry to home and office settings. Our popular KeepBox® containers help consumers organize everything from holiday decorations to school supplies. Storage organizers and cabinets provide efficient storage for small items and accessories in the home workshop or at the office. Hobbyists and craftsmen use our popular CraftDesign® products for efficient, portable storage of craft, sewing, and art supplies.

Part of our product line is plastic storage tanks used for storage and transport of a wide variety of solid and liquid materials. These tanks are produced in the United States using rotational molding and in Europe with both winding extrusion and rotational molding. Our extruded tanks are primarily used for storage in industries such as chemical and water treatment and are an effective alternative to stainless steel tanks, giving customers the same performance for a lower price. For industries such as agriculture, plastics, and food, our roto-molded tanks are commonly used as intermediate bulk containers (IBCs), transporting material from one location to another or as a temporary storage vessel; these uses are often “returnable” applications, in which the tanks can be reused for multiple round trips in a closed loop distribution system.

We manufacture plastic carts used in material handling and waste collection. Manufacturers apply our carts and dumpers for in-plant transport of products and scrap. Over 700 municipalities use the carts for residential waste collection.

From seals for water supply lines to hood latches and air hose assemblies for trucks, our engineered, molded OEM and replacement parts meet precise specifications for the waterworks, agriculture, transportation, and civil construction industries. Specialized manufacturing expertise enables us to create a range of specific-performance custom rubber products, including rubber-to-metal bonded items used in marine and maintenance equipment, water control, and environmental applications.

More than 50 years ago we started making tire patches. We now offer the most comprehensive line of tire repair and retreading products in the United States. To service the more than 221 million damaged tires that occur each year, we make all the materials and products customers need to perform safe and profitable tire repairs: the plug that fills a puncture, the cement that seats the plug, the tire innerliner patch, and the final sealing compound. Our products are used to repair the smallest puncture in passenger tires and the most severe tear in large, off-the-road tires.

Our calendered rubber sheet stock is used in many applications. The telecommunications industry splices cabling with our specialty tapes. In the mining industry, our materials are used to create linings for material handling conveyor systems. Another of our custom sheet stocks is used as the base material to produce the world’s top-selling line of golf grips, “Golf Pride®”.

We have applied our rubber calendering and compounding expertise to create reflective marking products for the road repair and construction industry. Transportation professionals use our reflective tape striping, symbols, and legends for marking roadways, intersections, and hazardous areas. Our tape stock is easier to apply, more reflective, and longer lasting than paint. We make the tape in both temporary and permanent grades.

The Company’s manufacturing business is dependent upon outside suppliers for raw materials, principally polyethylene, polypropylene, polystyrene and synthetic and natural rubber. We believe that the loss of any one supplier or group of suppliers would not have a materially adverse effect on our business, since in most instances identical or similar materials are readily obtainable from other suppliers.


	*Our Distribution Segment*

In our distribution segment, we are the largest distributor of tools, equipment, and supplies to tire, wheel, and undervehicle service specialists in the United States. We buy and sell nearly 10,000 different tool, equipment, and supply items ranging from computerized alignment systems and tire balancers to tire valves and small hand tools.

Key Distribution Products

• Tire Valves & Accessories

• Tire Changing & Balancing Equipment

• Lifts & Alignment Equipment

• Service Equipment & Tools

• Tire Repair/ Retread Equipment & Supplies

Product Brand

• Myers Tire Supply

Capabilities

• International Distribution

• Broad Sales Coverage

• Personalized Service

• Customer Product Training

• National Accounts

Representative Markets

• Retail Tire Dealers

• Truck Tire Dealers

• Auto Dealers

• Commercial Auto & Truck Fleets

• Tire Retreaders

• General Repair Facilities

Within the continental United States, we provide widespread distribution and sales coverage from 40 branches in 31 states. Each branch operates as a profit center and is staffed by a branch manager, salespeople, office, warehouse, and delivery personnel.

Internationally, we have five wholly owned warehouse distributors located in Canada and Central America. We also own interests in several foreign warehouse distributors. Sales personnel from our Akron, Ohio headquarters cover the Far East, Middle East, South Pacific and South American territories.

We buy products from top suppliers to ensure quality is delivered to our customers. Each of the brand-name products we sell is associated with superior performance in its respective area. Some of these leading brands include: Chicago Pneumatic air tools; Hennessy tire changing, balancing, and alignment equipment; Corghi tire changers and balancers; Ingersoll-Rand air service equipment; John Bean Co. tire balancing and changing equipment; our own Patch Rubber brand tire patches, cements, and repair supplies; and Rotary lifts and related equipment.

An essential element of our success in the distribution segment is our nearly 170 sales representatives, who deliver personalized service on a local level. Customers rely on Myers’ sales representatives to introduce the latest tools and technologies and provide training in new product features and applications. Representatives also teach the proper use of diagnostic equipment, and present on-site workshops demonstrating industry approved techniques for tire repair and undercar service.


	*Competition*

Competition in the manufacturing segment is substantial and varied in form and size from manufacturers of similar products and of other products which can be readily substituted for those produced by the Company. Competition in the distribution segment is generally from local and regional businesses.


	*Employees*

As of December 31, 2003 the Company had a total of 4,218 full-time and part-time employees. Of these employees, 3,532 were engaged in the manufacturing segment, 589 were employed in the distribution segment and 97 were employed at the Company’s corporate offices. Approximately 10% of the Company’s employees are members of unions, however, in certain countries in which the Company operates union membership is not known due to confidentiality laws. The Company believes it has a good relationship with its union employees.


(d)	Financial Information About Foreign and Domestic Operations and Export Sales

The Response to this section of Item 1 is contained in the Industry Segments footnote of the Notes to Consolidated Financial Statements under Item 8 of this Report.


ITEM 2.	Properties

The following table sets forth by segment certain information with respect to facilities owned by the Registrant:

Distribution


	Approximate		Approximate
	Floor Space		Land Area
Location	(Square Feet)		(Acres)		Use

Akron, Ohio		129,000		8	Executive offices and warehousing
Akron, Ohio		60,000		5	Warehousing
Akron, Ohio		31,000		2	Warehousing
Pomona, California		17,700		1	Sales and distribution
Englewood, Colorado		9,500		1	Sales and distribution
San Antonio, Texas		4,500		1	Sales and distribution
Phoenix, Arizona		8,200		1	Sales and distribution
Akron, Ohio		8,000		1	Leased to non-affiliated party
Houston, Texas		7,900		1	Sales and distribution
Indianapolis, Indiana		7,800		2	Sales and distribution
Cincinnati, Ohio		7,500		1	Sales and distribution
York, Pennsylvania		7,400		3	Sales and distribution
Atlanta, Georgia		7,000		1	Sales and distribution
Minneapolis, Minnesota		5,500		1	Sales and distribution
Charlotte, North Carolina		5,100		1	Sales and distribution
Syracuse, New York		4,800		1	Sales and distribution
Franklin Park, Illinois		4,400		1	Sales and distribution

Manufacturing


	Approximate		Approximate
	Floor Space		Land Area
Location	(Square Feet)		(Acres)		Use

Gaillon, France		500,000		23		Manufacturing and distribution
Nykobing, Falster Denmark		227,000		68		Manufacturing and distribution
Springfield, Missouri		227,000		19		Manufacturing and distribution
Dawson Springs, Kentucky		209,000		36		Manufacturing and distribution
Wadsworth, Ohio		197,000		23		Manufacturing and distribution
Hannibal, Missouri		196,000		10		Manufacturing and distribution
Sparks, Nevada		185,000		11		Manufacturing and distribution
Bluffton, Indiana		175,000		17		Manufacturing and distribution
Roanoke Rapids, N. Carolina		172,000		20		Manufacturing and distribution
Shelbyville, Kentucky		160,000		8		Manufacturing and distribution
Sandusky, Ohio		155,000		8		Manufacturing and distribution
Bristol, Indiana		139,000		12		Manufacturing and distribution
Akron, Ohio		121,000		17		Manufacturing and distribution
Gloucester, England		118,000		3		Manufacturing and distribution
Dayton, Ohio		85,000		5		Manufacturing and distribution
Palua De Plegamans, Spain		85,000		7		Manufacturing and distribution
Prunay, France		71,000		4		Manufacturing and distribution
Goddard, Kansas		62,000		7		Manufacturing and distribution
Santa Perpetua De Mogoda, Spain		61,000		3		Manufacturing and distribution
Fostoria, Ohio		50,000		3		Manufacturing and distribution
Akron, Ohio		49,000		6		Manufacturing and distribution
Surrey, B.C., Canada		42,000		3		Manufacturing and distribution
Ontario, California		40,000		2		Distribution and warehousing
Mebane, North Carolina		30,000		5		Manufacturing and distribution
Nivelles, Belguim		14,000		2		Sales and distribution
Maia, Portugal		13,000		3		Sales and distribution

The following table sets forth by segment certain information with respect to facilities leased by the Registrant:

Manufacturing

Approximate

Floor Space

Expiration Date

Location

(Square Feet)

of Lease

Use

Middlefield, Ohio

400,000

August 31, 2018

Manufacturing and distribution

Cassopolis, Michigan

210,000

October 31, 2005

Manufacturing and distribution

Droitwich, England

73,000

August 31, 2004

Sales and distribution

Mulheim, Germany

54,000

December 31, 2005

Sales and distribution

Brampton, Ontario, Canada

43,000

December 31, 2007

Sales and distribution

Nanterre Cedex, France

25,000

April 30, 2008

Administration and sales

Milford, Ohio

22,000

August 31, 2006

Administration and sales

Orbassano, Italy

3,000

October 14, 2006

Sales and distribution

The Registrant also leases distribution facilities in 32 locations throughout the United States and Canada which, in the aggregate, amount to approximately 167,000 square feet of warehouse and office space. All of these locations are used by the distribution of aftermarket repair products and services segment.

The Registrant believes that all of its properties, machinery and equipment generally are well maintained and adequate for the purposes for which they are used.


ITEM 3.	LEGAL PROCEEDINGS

There are no pending legal proceedings other than ordinary routine litigation incidental to the Registrant’s business.


ITEM 4.	SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

During the fourth quarter of the fiscal year ended December 31, 2003, there were no matters submitted to a vote of security holders.

Executive Officers of the Registrant

Set forth below is certain information concerning the executive officers of the Registrant. Executive officers are elected annually by the Board of Directors and serve at the pleasure of the Board.


			Years as
Name	Age		Executive Officer		Title

Stephen E. Myers		60		31		Chairman and Chief Executive Officer
John C. Orr		53		1		President and Chief Operating Officer
Milton I. Wiskind		78		32		Vice Chairman and Secretary
Gregory J. Stodnick		61		24		Vice President — Finance
Jean-Paul Lesage		59		4		Vice President
Kevin C. O’Neil		48		5		General Counsel and Assistant Secretary

Each executive officer has been principally employed in the capacities shown or similar ones with the Registrant for over the past five years with the exception of Mr. O’Neil. Mr. O’Neil consulted as Assistant Secretary until June 2002 at which time he became a full time employee of by the Company. Prior to his full time employment, he was a partner and shareholder of Brouse McDowell Co., LPA.

Section 16(a) of the Securities Exchange Act of 1934 requires the Registrant’s Directors, certain of its executive officers and persons who own more than ten percent of its Common Stock (“Insiders”) to file reports of ownership and changes in ownership with the Securities and Exchange Commission and the American Stock Exchange, Inc., and to furnish the Company with copies of all such forms they file. The Company understands from the information provided to it by the Insiders that they adhered to all filing requirements applicable to the Section 16 Filers.

PART II


ITEM 5.	Market for Registrant’s Common Stock and Related Stockholder Matters

The Company’s Common Stock is traded on the New York Stock Exchange (ticker symbol MYE). The approximate number of record holders at December 31, 2003 was 2,045. High and low stock prices and dividends for the last two years were:

Sales Price

2003

Dividends

Quarter Ended

High

Low

Paid

March 31

11.43

8.80

.05

June 30

11.16

9.20

.05

September 30

11.67

9.35

.05

December 31

13.30

10.02

.05



	Sales Price
2002					Dividends
Quarter Ended	High		Low		Paid

March 31		11.64		9.20		.05
June 30		14.48		11.22		.05
September 30		14.20		10.21		.05
December 31		13.70		10.02		.05


ITEM 6.	Selected Financial Data

MYERS INDUSTRIES, INC. AND SUBSIDIARIES

Five-Year Summary


			2003		2002		2001		2000		1999

Operations for the Year
	Net sales		$	661,091,504	$	607,991,158	$	607,950,431	$	652,659,900	$	580,760,740
		Cost of sales		460,803,695		406,572,783		403,011,346		435,081,945		367,635,460
		Selling		98,536,272		88,407,389		88,020,857		85,632,525		83,352,607
		General and administrative		67,030,583		60,840,409		70,979,067		68,675,568		60,265,518
		Interest — net		10,074,438		11,809,749		18,699,142		22,360,255		15,205,809

				636,444,988		567,630,330		580,710,412		611,750,293		526,459,394

		Income before income taxes		24,646,516		40,360,828		27,240,019		40,909,607		54,301,346
		Income taxes		8,321,000		16,401,000		12,049,000		16,909,000		23,125,000

		Net Income	$	16,325,516	$	23,959,828	$	15,191,019	$	24,000,607	$	31,176,346

		Net income per share*	$	.54	$	.80	$	.51	$	.80	$	1.02


				2003		2002		2001		2000		1999

Financial Position — At Year End
	Total assets			$	621,626,806	$	602,482,330	$	582,166,378	$	622,103,970	$	600,409,632

	Current assets				207,933,141		201,140,357		196,618,597		219,307,253		206,990,990
	Current liabilities				94,175,498		117,368,956		104,899,238		112,890,230		102,244,419

	Working capital				113,757,643		83,771,401		91,719,359		106,417,023		104,746,571
	Other assets				229,849,237		210,546,946		194,811,960		201,291,971		203,923,134
	Property, plant and equipment — net				183,844,428		190,795,027		190,735,821		201,504,746		189,495,508
	Less:
		Long-term debt			211,002,691		212,222,615		247,145,234		284,273,097		280,103,906
		Deferred income taxes			21,924,269		17,201,131		12,595,697		11,037,935		10,314,490

Shareholders’ Equity				$	294,524,348	$	255,689,628	$	217,526,209	$	213,902,708	$	207,746,817

Common Shares Outstanding					30,183,256		30,071,736		29,809,618		29,686,266		30,231,013

Book Value Per Common Share				$	9.76	$	8.50	$	7.30	$	7.21	$	6.87

Other Data
	Dividends paid			$	6,026,349	$	5,878,169	$	5,454,870	$	4,969,876	$	4,626,471
	Dividends paid per Common Share*				0.20		0.20		0.18		0.17		0.15

		Average Common Shares
			Outstanding during the year		30,125,533		29,971,843		29,752,373		29,828,210		30,502,466

* Adjusted for the five-for-four stock split distributed in August 2002; the ten percent stock dividends paid in August, 2001; August, 2000; and August, 1999.


ITEM 7.	Management’s Discussion and Analysis of Results of Financial Condition and Operations

2003 Results of Operations

For the year ended December 31, 2003, net sales of $661.1 million were up 9 percent from the $608.0 million reported in 2002. Despite the increased sales, 2003 net income of $16.3 million declined 32 percent from $24 million in the prior year as higher raw material costs and significant competitive pricing pressures combined to reduce profitability. Favorable foreign currency translations, primarily from a strong euro, increased sales for the year by $28.3 million and net income by approximately $800,000 or $.03 per share.

On a segment basis, sales in the distribution segment increased $4.3 million or 3 percent, reflecting higher unit volumes for both supplies and capital equipment. In the manufacturing segment, sales for 2003 increased $48.7 million or 10 percent compared with the prior year. Favorable foreign currency translation accounted for approximately 56 percent of the sales increase with the remaining improvement the result of higher unit sales, particularly in automotive, industrial, horticultural and heavy truck markets.

Gross profit, expressed as a percentage of sales, was reduced to 30.3 percent for the year ended December 31, 2003, compared with 33.1 percent in the prior year. The decline in margin was related to the manufacturing segment as raw material costs, primarily plastic resins, were significantly higher as compared to 2002 and competitive pressures resulted in slightly lower average selling prices. During the course of 2003, raw material costs were higher for virtually all of the plastic resins used by the Company’s manufacturing businesses and were, on average, 36 percent higher on high density polyethylene, the type of resin most widely used.

Total operating expenses increased $16.3 million or 11 percent for the year ended December 31, 2003 compared with the prior year. Approximately $9.8 million or 60 percent of this increase was due to the impact of foreign currency translation for costs incurred in foreign business units. Other increases in operating expenses were for selling expenses related to higher unit volume sales, and bad debts, principally arising from

export sales in the distribution segment. The Company also experienced an increase in information systems and software costs. Expressed as a percentage of sales, operating expenses increased slightly to 25.0 percent in 2003 compared to 24.5 percent in the prior year.

Net interest expense for 2003 decreased $1.7 million or 15 percent compared with the previous year. This reduction was primarily the result of lower average borrowing levels as the Company repaid $17.4 million of debt during the year.

Income taxes as a percent of income before taxes was reduced to 33.8 percent in 2003 compared to 40.6 percent in 2002. This reduction in the Company’s effective tax rate is primarily the result of foreign tax rate differences, including the realization of approximately $600,000 in net operating loss carryforwards previously reserved.

2002 Results of Operations

Net sales of $608.0 million for the year ended December 31, 2002 were virtually unchanged from the prior year. Despite the flat sales, net income for 2002 of $24.0 million or $.80 per share increased 58 percent from the net income of $15.2 million or $.51 per share reported in 2001, as a result of the cessation of goodwill amortization and significantly lower interest expense.

On a segment basis, sales in the distribution segment increased $3.1 million or 2 percent as sales of capital equipment picked up following several years of weak demand. In the manufacturing segment, sales declined $1.7 million or less than one percent, however, excluding the favorable translation effect of foreign currencies, primarily from a stronger euro, sales in the manufacturing segment would have been down 2 percent for the year. Weak demand in most of the Company’s markets combined with competitive pressures on pricing, particularly for horticultural containers and consumer products, led to the decline.

Gross profit, expressed as a percentage of sales, declined slightly to 33.1 percent for the year ended December 31, 2002, compared with 33.7 percent in the prior year. In the distribution segment, margins increased slightly based on continuing favorable sales mix of higher margin supplies. In the manufacturing segment, margins declined as a result of lower selling prices and an increase of unabsorbed fixed manufacturing costs due to lower production levels. Raw material costs, primarily for plastic resins, were lower than prior year costs through the first half of 2002 but increased throughout the year and were unfavorable in the third and fourth quarters.

Total operating expenses decreased $9.8 million or 6 percent to $149.2 million. Expressed as a percentage of sales, operating expenses were reduced to 24.5 percent in 2002 compared to 26.1 percent in 2001. The reduction in current year operating expenses was primarily due to the elimination of goodwill amortization which totaled $9.2 million in 2001. Other reductions in general and administrative expenses resulting from cost containment efforts were largely offset by significantly higher costs for medical, property, casualty and other insurances.

Net interest expense of $11.8 million for 2002 was down $6.9 million or 37 percent from the prior year. This decrease was primarily the result of lower interest rates, however, the Company also received the benefit of lower average borrowing levels by repaying $35.8 million of debt during the year.

Income taxes as a percentage of pretax income was 40.6 percent compared with 44.2 percent in the prior year. The lower effective tax rate reflects the elimination of the impact which non-deductible goodwill amortization had in prior years. In addition, the Company experienced a more favorable foreign tax rate difference in 2002 compared with the prior year.

Financial Condition

Liquidity and Capital Resources

In 2003, the Company generated cash from operating activities of $51.1 million. During the year ended December 31, 2003, investments in property, plant and equipment totaled $20.0 million and total debt was

reduced by $17.4 million. Debt as a percentage of total capitalization was reduced to 42 percent at December 31, 2003 compared to 48 percent at the end of 2002.

In December 2003, the Company issued $100 million of senior unsecured notes consisting of $65 million of 6.08 percent notes with a 7 year maturity and $35 million of 6.81 percent notes with a 10 year maturity. Proceeds from the senior notes were used to repay outstanding bank debt under the Company’s existing term loan and revolving credit facility. The issuance of the senior notes resulted in an increase in the Company’s current overall interest rate; however, it provides long-term financing at relatively favorable fixed rates.

On February 27, 2004, the Company entered into a new five year, $225 million unsecured revolving credit facility (the Credit Facility). Borrowings under the new Credit Facility were used to refinance the Company’s existing bank debt and fund the acquisition of ATP Automotive, Inc. for approximately $60 million (see Subsequent Event and Long-Term Debt and Credit Agreements Footnotes).

During the next five years management anticipates on-going capital expenditures in the range of $25 to $30 million annually. Cash flows from operations and funds available under the new Credit Facility will provide the Company’s primary source of future financing. Management believes that it has sufficient financial resources available to meet anticipated business requirements in the foreseeable future including capital expenditures, dividends, working capital and debt service.

The following summarizes the Company’s future cash outflows for the next five years, adjusted to reflect payments under the new Credit Facility, resulting from financial contracts and commitments:


	2004		2005		2006		2007		2008		Total


	(Dollars in Thousands)
Long-term Debt	$	4,452	$	2,200	$	962	$	932	$	894	$	9,440
Operating Leases		9,491		8,472		6,616		5,349		4,974		34,902

Total	$	13,943	$	10,672	$	7,578	$	6,281	$	5,868	$	44,342

Market Risk and Derivative Financial Instruments

The Company has financing arrangements that require interest payments based on floating interest rates. As such, the Company’s financial results are subject to changes in the market rate of interest. Our objective in managing the exposure to interest rate changes is to limit the volatility and impact of rate changes on earnings while maintaining the lowest overall borrowing cost. At present, the Company has not entered into any interest rate swaps or other derivative instruments to fix the interest rate on any portion of its financing arrangements with floating rates. Accordingly, based on current debt levels at December 31, 2003, if market interest rates increase one percent, the Company’s interest expense would increase approximately $1,000,000.

Some of the Company’s subsidiaries operate in foreign countries and, as such, their financial results are subject to the variability that arises from exchange rate movements. The Company believes that foreign currency exchange rate fluctuations do not represent a significant market risk due to the nature of the foreign countries in which we operate, primarily Canada and Western Europe, as well as the size of those operations relative to the total Company.

The Company uses certain commodities, primarily plastic resins, in its manufacturing processes. As such, the cost of operations is subject to fluctuation as the market for these commodities changes. The Company monitors this risk but currently has no derivative contracts to hedge this risk; however, the Company also has no significant purchase obligations to purchase fixed quantities of such commodities in future periods.

Critical Accounting Policies

Our discussion and analysis of the Company’s financial condition and results of operations are based on the accompanying consolidated financial statements, which are prepared in accordance with accounting principles generally accepted in the United States of America. As indicated in the Summary of Significant Accounting Policies included in the footnotes to the consolidated financial statements, the amount of assets,

liabilities, revenue and expenses reported are affected by estimates and judgements that are necessary to comply with generally accepted accounting principles. We base our estimates on prior experience and other assumptions that we consider reasonable to our circumstances. While estimates and judgements are applied in arriving at reported amounts such as pension benefits and provisions for self-insured risks, we believe the following matters may involve a high degree of judgement and complexity.

Revenue Recognition — The Company recognizes revenues from the sale of products, net of actual and estimated returns, at the point of passage of title, which is generally at the time of shipment.

Bad Debts — The Company evaluates the collectibility of accounts receivable based on a combination of factors. In circumstances where the Company is aware of a specific customer’s inability to meet its financial obligations, a specific allowance for doubtful accounts is recorded against amounts due to reduce the net recognized receivable to the amount the Company reasonably believes will be collected. Additionally, the Company reviews historical trends for collectibility in determining an estimate for its allowance for doubtful accounts. If economic circumstances change substantially, estimates of the recoverability of amounts due the Company could be reduced by a material amount.

Inventory — Inventories are valued at the lower of cost or market. Cost is determined by the last-in, first-out (LIFO) method for approximately 34 percent of the Company’s inventories and the first-in, first-out (FIFO) method for all other inventories. Where appropriate, standard cost systems are utilized for purposes of determining cost; the standards are adjusted as necessary to ensure they approximate actual costs. Estimates of lower of cost or market value of inventory are determined based upon current economic conditions, historical sales quantities and patterns and, in some cases, the specific risk of loss on specifically identified inventories.

Goodwill — As a result of Statement of Financial Accounting Standards No. 142, “Goodwill and Other Intangible Assets,” recorded goodwill is subjected to annual impairment testing. Goodwill impairment testing requires, in part, that we estimate the fair value of our business units which, in turn, requires that we make judgements concerning future cash flows and appropriate discount rates for those businesses. Our estimate of the fair value of these business units and the related goodwill, could change over time based on a variety of factors, including the actual operating performance of the underlying businesses or the impact of future events on the cost of capital and the related discount rates used.

Contingencies — In the ordinary course of business, we are involved in various legal proceedings and contingencies. We have recorded liabilities for these matters in accordance with Statement of Financial Accounting Standards No. 5, “Accounting for Contingencies” (SFAS 5). SFAS 5 requires a liability to be recorded based on our estimate of the probable cost of the resolution of a contingency. The actual resolution of these contingencies may differ from our estimates. If a contingency were settled for an amount greater than our estimates, a future charge to income would result. Likewise, if a contingency were settled for an amount that is less than our estimate, a future credit to income would result.

Income Taxes — Deferred income taxes are provided to recognize the effect of temporary differences between financial and tax reporting. Deferred income taxes are not provided for undistributed earnings of foreign consolidated subsidiaries as it is our intention to reinvest such earnings for an indefinite period of time. The Company has significant operations outside the United States and in jurisdictions with statutory tax rates both higher and lower than in the United States. As a result, significant tax and treasury planning and analysis of future operations are necessary to determine the proper amounts of tax assets, liabilities and expense to be recognized.

The Company has reserved the deferred tax benefit of certain tax loss carryforwards in foreign countries that, if realized, would reduce future income tax expense by approximately $6,504,000. Of this amount, $2,451,000 expires in various years from 2004 through 2008, and $4,053,000 has no expiration date. The Company also has U.S. foreign tax credit carryforwards of approximately $800,000 expiring in 2004.


ITEM 7A.	Quantitative and Qualitative Disclosures About Market Risk

The Company uses certain commodities, primarily plastic resins, in its manufacturing processes. As such, the cost of operations is subject to fluctuation as the market for these commodities changes. The Company monitors this risk but currently has no derivative contracts to hedge this risk, however, the Company also has no significant purchase obligations to purchase fixed quantities of such commodities in future periods.


ITEM 8.	Financial Statements and Supplementary Data

The consolidated financial statements and accompanying notes and the reports of management and independent accountants follow Item 9 of this Report.

Summarized Quarterly Results of Operations

(Unaudited) Thousands of Dollars, Except Per Share Data

March 31

June 30

Sept. 30

Dec. 31

Total

Quarter Ended 2003

Net Sales

163,221

168,964

152,400

176,507

661,092

Gross Profit

53,843

49,724

44,160

52,561

200,288

Net Income

7,192

3,276

1,507

4,351

16,326

Per Share

.24

.11

.05

.14

.54


	March 31		June 30		Sept. 30		Dec. 31		Total
Quarter Ended 2002
Net Sales	$	148,939	$	153,095	$	146,626	$	159,331	$	607,991
Gross Profit		54,499		51,730		44,395		50,794		201,418
Net Income		10,046		6,802		3,068		4,044		23,960
Per Share		.34		.23		.10		.13		.80

This report is a copy and has not been reissued by Arthur Andersen, LLP.

This report references the Company’s balance sheet as of December 31, 2001 and 2000 and its related consolidated statements of income, shareholders’ equity and cash flows for the year ended December 31, 2000 and 1999 which are not presented herein.

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

We have audited the accompanying statements of consolidated financial position of Myers Industries, Inc. (an Ohio Corporation) and Subsidiaries as of December 31, 2001 and 2000, and the related statements of consolidated income, shareholders’ equity and comprehensive income and cash flows for each of the three years in the period ended December 31, 2001. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Myers Industries, Inc. and Subsidiaries as of December 31, 2001 and 2000, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2001, in conformity with accounting principles generally accepted in the United States.

ARTHUR ANDERSEN LLP

/s/ Arthur Andersen LLP

Cleveland, Ohio,

February 15, 2002

REPORT OF ERNST & YOUNG, LLP, INDEPENDENT AUDITORS

We have audited the accompanying statements of consolidated financial position of Myers Industries, Inc. (an Ohio Corporation) and Subsidiaries as of December 31, 2003 and 2002 and the related statements of consolidated income, shareholders’ equity and comprehensive income and cash flows for the years then ended. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits. The consolidated financial statements of Myers Industries, Inc. and Subsidiaries as of December 31, 2001 and for the year then ended were audited by other auditors who have ceased operations and whose report dated February 15, 2002, expressed an unqualified opinion on those statements before the revisions described below and in the Goodwill and Intangible Assets note and the 2002 restatement adjustment for the retroactive effect of the five-for-four stock split described below and in the Net Income Per Share note.

In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Myers Industries, Inc. and Subsidiaries at December 31, 2003 and 2002 and the consolidated results of their operations and their cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States.

As explained in the Goodwill and Intangible Assets note, effective January 1, 2002, the Company changed its method of accounting for goodwill.

As discussed above, the financial statements of Myers Industries, Inc. as of December 31, 2001, and for the year then ended were audited by other auditors who have ceased operations. As described in the Goodwill and Intangible Assets note, these financial statements have been revised to include the transitional disclosures required by Statement of Financial Accounting Standards (SFAS) No. 142, Goodwill and Other Intangible Assets, which was adopted by the Company as of January 1, 2002. Our audit procedures with respect to the disclosures for 2001 in the Goodwill and Intangible Assets note included (a) agreeing the previously reported net income and net income per share to the previously issued financial statements and the adjustments to those amounts representing amortization expense (including any related tax effects) recognized in the period related to goodwill to the Company’s underlying records obtained from management, and (b) testing the mathematical accuracy of the calculation of adjusted net income. Also, as described in the Net Income Per Share note, in 2002 the Company’s Board of Directors approved a five-for-four stock split, and all references to the number of shares, per share information and the number of stock options in the financial statements have been adjusted to reflect the stock split on a retroactive basis. We audited the adjustments that were applied to restate the number of shares and per share information and the number of stock options reflected in the 2001 financial statements. Our procedures included (a) agreeing the authorization for the five-for-four stock split to the Company’s underlying records obtained from management, and (b) testing the mathematical accuracy of the restated number of shares, net income per share, stock option information and all other per share amounts.

In our opinion, the disclosures for 2001 in the Goodwill and Intangible Assets note are appropriate and the adjustments to reflect the five-for-four stock split are appropriate and have been properly applied. However, we were not engaged to audit, review, or apply any procedures to the 2001 financial statements of the Company other than with respect to such disclosures and adjustments and, accordingly, we do not express an opinion or any other form of assurance on the 2001 financial statements taken as a whole.

/s/ ERNST & YOUNG LLP

Akron, Ohio

February 12, 2004

MYERS INDUSTRIES, INC. AND SUBSIDIARIES

Statements of Consolidated Income

For the Years Ended December 31, 2003, 2002 and 2001


			2003			2002			2001

Net sales			$	661,091,504		$	607,991,158		$	607,950,431
Cost of sales				460,803,695			406,572,783			403,011,346

	Gross profit			200,287,809			201,418,375			204,939,085

Operating expenses
	Selling			98,536,272			88,407,389			88,020,857
	General and administrative			67,030,583			60,840,409			70,979,067

				165,566,855			149,247,798			158,999,924

		Operating income		34,720,954			52,170,577			45,939,161

Interest
	Income			(366,324	)		(461,038	)		(695,140	)
	Expense			10,440,762			12,270,787			19,394,282

				10,074,438			11,809,749			18,699,142

Income before income taxes				24,646,516			40,360,828			27,240,019
Income taxes				8,321,000			16,401,000			12,049,000

Net income			$	16,325,516		$	23,959,828		$	15,191,019

Net income per share			$	.54		$	.80		$	.51

Weighted average shares outstanding				30,125,533			29,971,843			29,752,373

The accompanying notes are an integral part of these statements.

MYERS INDUSTRIES, INC. AND SUBSIDIARIES

Statements of Consolidated Financial Position

As of December 31, 2003 and 2002


			2003		2002

Assets
Current Assets
	Cash		$	5,666,997	$	1,702,334
	Accounts receivable — less allowances of $4,245,000 and $4,507,000, respectively			114,038,680		111,207,172
	Inventories
		Finished and in-process products		61,240,225		66,819,085
		Raw materials and supplies		22,613,029		16,280,910

				83,853,254		83,099,995
	Prepaid expenses			4,374,210		5,130,856

Total Current Assets				207,933,141		201,140,357
Other Assets
	Goodwill			224,298,302		204,465,504
	Patents and other intangible assets, net			2,321,584		2,422,772
	Other			3,229,351		3,658,670

				229,849,237		210,546,946
Property, Plant and Equipment, at Cost
	Land			8,461,003		7,878,664
	Buildings and leasehold improvements			80,588,395		77,061,850
	Machinery and equipment			352,995,191		318,617,656

				442,044,589		403,558,170
	Less allowances for depreciation and amortization			258,200,161		212,763,143

				183,844,428		190,795,027

			$	621,626,806	$	602,482,330

Liabilities and Shareholders’ Equity
Current Liabilities
	Accounts payable		$	39,731,250	$	49,970,910
	Accrued expenses
		Employee compensation and related items		30,975,836		29,843,708
		Taxes, other than income taxes		2,874,171		3,260,304
		Accrued interest		608,575		754,668
		Other		15,533,529		12,849,101
	Current portion of long-term debt			4,452,137		20,690,265

Total Current Liabilities				94,175,498		117,368,956
Long-term Debt, less current portion				211,002,691		212,222,615
Deferred Income Taxes				21,924,269		17,201,131
Shareholders’ Equity
	Serial Preferred Shares (authorized 1,000,000 shares)			–0–		–0–
	Common Shares, without par value (authorized 60,000,000 shares; outstanding 30,183,256 and 30,071,736 shares, respectively)			18,369,240		18,301,212
	Additional paid-in capital			217,019,810		216,077,838
	Accumulated other comprehensive income (loss)			10,934,860		(16,590,693	)
	Retained income			48,200,438		37,901,271

				294,524,348		255,689,628

			$	621,626,806	$	602,482,330

The accompanying notes are an integral part of these statements.

MYERS INDUSTRIES, INC. AND SUBSIDIARIES

Statements of Consolidated Shareholders’ Equity

and Comprehensive Income

For the Years Ended December 31, 2003, 2002 and 2001


									Accumulated
		Common Shares				Additional			Other
						Paid-In			Comprehensive			Retained			Comprehensive
		Number		Amount		Capital			Income			Income			Income

Balance at January 1, 2001			21,590,012	$	13,234,830	$	189,779,843		$	(27,149,716	)	$	38,037,751		$	–0–

Additions
	Net income		–0–		–0–		–0–			–0–			15,191,019			15,191,019
	Sales under option plans		46,404		26,707		331,899			–0–			–0–			–0–
	Employees stock purchase plan		35,204		21,474		410,218			–0–			–0–			–0–
	Dividend reinvestment plan		11,830		8,840		365,917			–0–			–0–			–0–
Deductions
	Dividends — $.18 per share		–0–		–0–		–0–			–0–			(5,454,868	)		–0–
	10% stock dividend		2,164,244		1,211,977		26,706,771			–0–			(27,934,414	)		–0–
	Foreign currency translation adjustment		–0–		–0–		–0–			(7,262,039	)		–0–			(7,262,039	)

Balance at December 31, 2001			23,847,694	$	14,503,828	$	217,594,648			(34,411,755	)	$	19,839,488		$	7,928,980

Additions
	Net income		–0–		–0–		–0–			–0–			23,959,828			23,959,828
	Sales under option plans		166,837		102,297		1,562,041			–0–			–0–			–0–
	Employees stock purchase plan		30,035		18,321		359,833			–0–			–0–			–0–
	Dividend reinvestment plan		16,415		10,015		228,067			–0–			–0–			–0–
	Foreign currency translation adjustment		–0–		–0–		–0–			19,404,517			–0–			19,404,517
Deductions
	Dividends — $.20 per share		–0–		–0–		–0–			–0–			(5,878,169	)		–0–
	Five-for-four stock split		6,010,755		3,666,751		(3,666,751	)		–0–			(19,876	)		–0–
	FAS 87 additional pension liability		–0–		–0–		–0–			(1,583,455	)		–0–			(1,583,455	)

Balance at December 31, 2002			30,071,736	$	18,301,212	$	216,077,838		$	(16,590,693	)	$	37,901,271		$	41,780,890

Additions
	Net income		–0–		–0–		–0–			–0–			16,325,516			16,325,516
	Sales under option plans		43,747		26,687		358,862			–0–			–0–			–0–
	Employees stock purchase plan		53,264		32,490		441,917			–0–			–0–			–0–
	Dividend reinvestment plan		14,509		8,851		141,193			–0–			–0–			–0–
	Foreign currency translation adjustment		–0–		–0–		–0–			27,413,845			–0–			27,413,845
	FAS 87 additional pension liability		–0–		–0–		–0–			111,708			–0–			111,708
Deductions
	Dividends — $.20 per share		–0–		–0–		–0–			–0–			(6,026,349	)		–0–

Balance at December 31, 2003			30,183,256	$	18,369,240	$	217,019,810		$	10,934,860		$	48,200,438		$	43,851,069

The accompanying notes are an integral part of these statements.

MYERS INDUSTRIES, INC. AND SUBSIDIARIES

Statements of Consolidated Cash Flows

For the Years Ended December 31, 2003, 2002 and 2001


				2003			2002			2001

Cash Flows from Operating Activities
	Net income			$	16,325,516		$	23,959,828		$	15,191,019
	Items not affecting use of cash
		Depreciation			34,777,734			34,550,402			33,361,480
		Amortization of goodwill			–0–			–0–			9,223,542
		Amortization of other intangibles			1,777,258			1,163,688			1,320,197
		Deferred income taxes			4,415,099			4,526,372			1,632,285
	Cash flow provided by (used for) working capital
		Accounts receivable			4,855,862			553,688			18,608,281
		Inventories			2,975,650			741,868			6,359,412
		Prepaid expenses			908,618			(1,481,808	)		(1,220,662	)
		Accounts payable and accrued expenses			(14,901,650	)		1,491,683			(7,674,145	)

			Net cash provided by operating activities		51,134,087			65,505,721			76,801,409
Cash Flows from Investing Activities
	Acquisition of businesses, net of cash acquired				(776,058	)		(2,819,901	)		(7,480,000	)
	Additions to property, plant and equipment, net				(20,009,908	)		(28,389,133	)		(25,182,509	)
	Other				439,237			(298,226	)		(1,807,899	)

			Net cash used for investing activities		(20,346,729	)		(31,507,260	)		(34,470,408	)
Cash Flows from Financing Activities
	Long-term debt proceeds				100,000,000			–0–			–0–
	Repayment of long-term debt				(41,500,000	)		(12,000,000	)		(12,000,000	)
	Net borrowing (repayments) — on credit facility				(79,264,114	)		(23,773,496	)		(21,144,207	)
	Deferred financing costs				(1,042,232	)		–0–			–0–
	Cash dividends paid				(6,026,349	)		(5,878,169	)		(5,454,868	)
	Proceeds from issuance of common stock				1,010,000			2,280,574			1,165,055

			Net cash used for financing activities		(26,822,695	)		(39,371,091	)		(37,434,020	)

Increase (Decrease) in Cash					3,964,663			(5,372,630	)		4,896,981
	Cash at January 1				1,702,334			7,074,964			2,177,983

	Cash at December 31			$	5,666,997		$	1,702,334		$	7,074,964

Supplemental Disclosures of Cash Flow Information
	Cash paid during the year for
			Interest	$	9,555,766		$	12,023,900		$	19,715,515

			Income taxes	$	4,809,142		$	11,617,883		$	11,478,129

The accompanying notes are an integral part of these statements.

MYERS INDUSTRIES, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Summary of Significant Accounting Policies

Basis of Presentation

The consolidated financial statements include the accounts of Myers Industries, Inc. and all wholly owned subsidiaries (Company). Significant intercompany accounts and transactions have been eliminated in consolidation. The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures at the date of the financial statements and the reported amount of revenues and expenses during the reported period. Actual results could differ from those estimates.

Subsequent Event

On March 10, 2004, the Company completed the acquisition of the shares of ATP Automotive, Inc. (ATP), a subsidiary of Applied Tech, LLC, a Delaware limited liability company. ATP, comprised of subsidiaries Michigan Rubber Products (MRP) and WEK Industries (WEK), is a manufacturer of molded rubber products for the automotive industry with approximately 600 employees, two manufacturing facilities in Michigan and Ohio, and 2003 sales of approximately $60 million. Total purchase price was $60 million, which includes the assumption of ATP debt outstanding as of the date of acquisition. The acquisition was financed using a portion of the proceeds from a new $225 million Credit Facility which the Company entered into on February 27, 2004 (see Long-Term Debt and Credit Agreements footnote). The purchase price will be allocated to the assets acquired and liabilities assumed based upon their estimated fair values during 2004 when appraisals, other studies and additional information become available. The results of ATP will be included in the consolidated results of operations of the Company from the date of acquisition.

Translation of Foreign Currencies

All balance sheet accounts of consolidated foreign subsidiaries are translated at the current exchange rate as of the end of the accounting period and income statement items are translated at an average currency exchange rate. The resulting translation adjustment is recorded in other comprehensive income as a separate component of shareholders’ equity.

Financial Instruments

Financial instruments, consisting of trade and notes receivable, and long-term debt, including borrowings at variable interest rates, are considered to have a fair value which approximates carrying value at December 31, 2003.

Concentration of Credit Risk

Financial instruments that potentially subject the Company to concentration of credit risk primarily consist of trade accounts receivable. The concentration of accounts receivable credit risk is generally limited based on the Company’s diversified operations, with customers spread across many industries and countries. No single customer accounts for more than two percent of total sales and no country, outside of the United States, accounts for more than ten percent of total sales. In addition, management has established certain requirements that customers must meet before credit is extended. The financial condition of customers is continually monitored and collateral is usually not required.

Inventories

Inventories are stated at the lower of cost or market. For approximately 34 percent of its inventories, the Company uses the last-in, first-out (LIFO) method of determining cost. All other inventories are valued at the first-in, first-out (FIFO) method of determining cost.

MYERS INDUSTRIES, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements — Continued

If the FIFO method of inventory cost valuation had been used exclusively by the Company, inventories would have been $4,074,000, $4,455,000 and $3,731,000 higher than reported at December 31, 2003, 2002 and 2001, respectively.

Property, Plant and Equipment

Property, plant and equipment are carried at cost less accumulated depreciation and amortization. The Company provides for depreciation and amortization on the basis of the straight-line method over the estimated useful lives of the assets as follows:


Buildings		20 to 30 years
Leasehold Improvements		7 to 10 years
Machinery & Equipment		3 to 10 years
Vehicles		1 to 3 years

Long-Lived Assets

The Company reviews its long-lived assets and identifiable intangible assets with finite lives for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Measurement of the amount of impairment may be based on appraisal, market values of similar assets or discounted future cash flows resulting from the use and ultimate disposition of the asset. There were no impairment charges recorded in connection with the long-lived assets in 2003, 2002 or 2001.

Revenue Recognition

The Company recognizes revenue from sales when goods are shipped and title has passed to the customer.

Income Taxes

Deferred income taxes are provided to recognize differences between financial statement and income tax reporting, principally for depreciation, non-deductible reserves and certain valuation allowances. No provision is made for U.S. income taxes on the unremitted earnings of foreign subsidiaries as the Company’s intention is to indefinitely reinvest these earnings in the operations of these subsidiaries.

Goodwill and Intangible Assets

Effective January 1, 2002, the Company adopted the provisions of SFAS No. 141, “Business Combinations” and SFAS No. 142, “Goodwill and Other Intangible Assets.” SFAS No. 141 requires that all business combinations be accounted for by the purchase method and that certain acquired intangible assets be recognized as assets apart from goodwill. No reclassification of intangible assets apart from goodwill was necessary as a result of the Company adopting the new standard.

Under the provisions of SFAS No. 142, the Company was required to perform a transitional goodwill impairment test within six months of adopting the new standard and to test for impairment on at least an annual basis thereafter. The Company conducts its annual impairment assessment of October 1. For purposes of impairment testing, the Company determines the fair value of its reporting units using discounted cash flow models and relative market multiples for comparable businesses. The Company compares the fair value of each of its reporting units to their respective carrying values, including related goodwill. These tests resulted in no impairment to the recorded amounts of goodwill in 2003 and 2002.

MYERS INDUSTRIES, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements — Continued

In accordance with SFAS No. 142, the Company discontinued the amortization of goodwill effective January 1, 2002, at which time accumulated amortization was $30.7 million. Had goodwill amortization not been recorded in 2001, income before taxes would have increased $9.2 million, while net income would have increased $7.1 million to $22.3 million and net income per share would have increased by $.24.

Net Income Per Share

Net income per share, as shown on the Statements of Consolidated Income, is determined on the basis of the weighted average number of common shares outstanding during the year, and for all periods shown basic and diluted earnings per share are identical. During the year ended December 31, 2002, the Company declared a five-for-four stock split and for the year ended December 31, 2001, the Company paid a ten percent stock dividend. All per share data has been adjusted for the stock split and stock dividends.

Stock Compensation

The Company accounts for stock compensation arrangements using the intrinsic value in Accounting Principles Board (APB) Opinion No. 25, “Accounting for Stock Issued to Employees.” In accordance with the intrinsic value method, the Company has not recognized any expense related to stock options, as options have only been granted with an exercise price equal to the market value of the shares at the date of the grant.

The alternative policy in SFAS No. 123, “Accounting for Stock Based Compensation,” provides that compensation expense be recognized based on the fair value of the options awarded, determined by an option pricing model. If the Company had recognized compensation expense using the fair value method under SFAS No. 123 rather than APB 25, net income would not have been materially different than reported amounts and net income per share would be identical for 2003, 2002 and 2001. In calculating the compensation expense under SFAS No. 123, the Company uses a Block Scholes option pricing model and assumes that all options will vest and be exercised at the expiration date of the grant. Other assumptions used in calculating the compensation expense for options granted in 2003 include a dividend yield of 2.3 percent, a risk free interest rate of 3.875 percent and a volatility measure based on the Company’s stock beta of .85.

In December 2002, the FASB issued SFAS No. 148, “Accounting for Stock Based Compensation — Transition and Disclosure,” as an amendment to SFAS No. 123. SFAS No. 148 provides for alternative methods of transition for a voluntary change to the fair value based method of accounting for stock based employee compensation. In addition, SFAS No. 148 amends the disclosure requirements to require prominent disclosure in both interim and annual financial statements about the method of accounting used for stock based employee compensation and the effect of the method on reported results. The Company adopted the disclosure provisions of SFAS No. 148 effective December 31, 2002.

Stock Options

In 1999, the Company and its shareholders adopted the 1999 Stock Plan allowing the Board of Directors to grant key employees and Directors the right to purchase Common Stock of the Company at the market price on the date of grant. In general, options granted and outstanding permit 20 percent of the shares granted to be exercised after six months, with additional vesting of 20 percent exercisable each year thereafter, with the options expiring ten years from the date of grant. At December 31, 2003, there were 1,623,885 stock option shares available for future grant. The activity listed below covers the 1999 Stock Plan, the 1997 Incentive Stock Plan and the 1992 Stock Option Plan.

MYERS INDUSTRIES, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements — Continued

Options granted during the past three years:


Year	Shares		Price

2003		243,150	$	8.80 to $ 9.99
2002		6,250	$	12.32
2001		300,212	$	8.36 to $10.40

Options exercised during the past three years:


Year	Shares		Price

2003		33,260	$	8.36 to $9.99
2002		255,000	$	8.18 to $9.92
2001		72,098	$	8.55 to $9.83

In addition, options totaling 321,036 and 20,688 expired during the years ended December 31, 2003 and 2002, respectively. Options outstanding and exercisable at December 31, 2003, 2002 and 2001 were as follows:


			Range of				Weighted Average
Year	Outstanding		Exercise Prices		Exercisable		Exercise Price

2003		800,725	$	8.18 to $13.90		488,369	$	9.60
2002		911,871	$	8.18 to $15.78		675,288	$	10.51
2001		1,181,309	$	8.18 to $15.78		743,719	$	10.03

Long-Term Debt and Credit Agreements

Long-term debt at December 31, consisted of the following:


	2003		2002

Revolving credit agreement	$	98,900,919	$	174,179,776
Term loan		0		41,500,000
Senior Notes		100,000,000		0
Industrial revenue bonds		4,000,000		4,000,000
Other		12,553,909		13,233,104

		215,454,828		232,912,880
Less current portion		4,452,137		20,690,265

	$	211,002,691	$	212,222,615

At December 31, 2003, the Company had a Multi-Currency Loan Agreement with a group of banks providing a revolving credit facility in five currencies up to $228 million. At December 31, 2003, the amount borrowed was $89.0 million U.S. dollars and $9.9 million Canadian dollars at an average interest rate of 3.07 percent.

On February 27, 2004, the Company entered into a new unsecured revolving credit facility (the Credit Facility) which enables the Company to borrow up to $225 million, including up to $50 million available for multi-currency loans in freely traded foreign currencies. Borrowing under the new Credit Facility were used to refinance the Company’s existing Multi-Currency Loan Agreement, fund the acquisition of ATP Automotive, Inc. and for general corporate purposes. Interest is based on the Prime rate or Euro dollar rate (for U.S. or Canadian dollar loans) or Eurocurrency Rate (for other multi-currency loans) plus an applicable margin that varies depending on the Company’s ratio of total debt to earnings before interest, taxes, depreciation and

MYERS INDUSTRIES, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements — Continued

amortization (EBITDA). In addition, the Company pays a quarterly facility fee. The Credit Facility expires in February 2009.

In December 2003, the Company issued $100 million in Senior Unsecured Notes (the Notes) consisting of $65 million of notes with an interest rate of 6.08 percent and a 7 year maturity and $35 million with an interest rate of 6.81 percent and a 10 year maturity. Proceeds from the issuance of the Notes were used to pay down term loan and revolving credit facility borrowing outstanding at that time.

In addition, at December 31, 2003, the Company had $16.6 million of other long-term debt consisting of industrial revenue bonds, certain indebtedness of acquired companies, and in-country credit facilities for the Company’s international operations. The weighted average interest rate on these amounts outstanding at December 31, 2003, was 4.01 percent.

The Credit Facility and Notes contain customary covenants including the maintenance of minimum consolidated net worth, certain financial ratios regarding leverage and interest coverage, and limitation on annual capital expenditures. The Company was in compliance with all of its debt covenant requirements at December 31, 2003.

Maturities of long-term debt under the loan agreements in place at December 31, 2003 for the five years ending December 31, 2008 were approximately: $4,452,000 in 2004; $101,102,000 in 2005; $962,000 in 2006; $932,000 in 2007 and $894,000 in 2008.

Maturities of long-term debt, adjusted to reflect payments under the new Credit Facility, for the five years ending December 31, 2008 are approximately: $4,452,000 in 2004; $2,200,000 in 2005; $962,000 in 2006; $932,000 in 2007 and $894,000 in 2008.

Retirement Plans

The Company and certain of its subsidiaries have pension and profit sharing plans covering substantially all of their employees. Two plans are defined benefit plans with benefits primarily based upon a fixed amount for each completed year of service as defined.

For the Company’s defined benefit plans, the net periodic pension cost was as follows:


	2003			2002			2001

Service cost	$	198,305		$	188,990		$	179,192
Interest cost		319,292			303,202			288,493
Expected return on assets		(239,885	)		(261,029	)		(291,192	)
Amortization of transition obligation		(2,945	)		(2,942	)		2,525
Amortization of prior service cost		42,776			42,776			42,776
Amortization of net loss		76,748			14,032			0

Net periodic pension cost	$	394,291		$	285,029		$	221,794

MYERS INDUSTRIES, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements — Continued

The reconciliation of changes in projected benefit obligations are as follows:


	2003			2002			2001

Benefit obligation at beginning of year	$	4,884,755		$	4,485,321		$	3,980,688
Service cost		198,305			188,990			179,192
Interest cost		319,292			303,202			288,493
Plan amendments		0			0			0
Actuarial loss		455,307			66,248			190,309
Benefits paid		(173,472	)		(159,006	)		(153,361	)

Benefit obligation at end of year	$	5,684,187		$	4,884,755		$	4,485,321

The assumptions used to determine the net periodic benefit cost and benefit obligations are as follows:


	2003			2002

Discount Rate		6.00	%		6.75	%
Expected long-term return of Plan Assets		8.00	%		8.00	%

Future benefit increases were not considered, as there is no substantive commitment to increase benefits. The expected long-term rate of return assumption is based on the actual historical rate of return on assets adjusted to reflect recent market conditions and future expectation consistent with the Company’s current asset allocation and investment policy.

The following table reflects the change in the fair value of the plans’ assets:


	2003			2002			2001

Fair value of plan assets at beginning of year	$	2,843,312		$	3,199,226		$	3,744,411
Actual return on plan assets		766,459			(550,240	)		(380,259	)
Company contribution		535,000			369,000			6,435
Expenses paid		(33,362	)		(15,668	)		(18,000	)
Benefits paid		(173,472	)		(159,006	)		(153,361	)

Fair value of plan assets at end of year	$	3,937,937		$	2,843,312		$	3,199,226

The weighted average asset allocations for the Company’s defined benefit plans at December 31, 2003 and 2002, are as follows:


	2003			2002

Equities securities		82	%		76	%
Debt Securities		17			21
Cash		1			3

Total		100	%		100	%

The Company’s investment policy related to the defined benefit plans is to provide for aggressive capital growth with moderate income production. Capital growth through equity exposure is emphasized which is balanced with small to moderate use of fixed income investments. Equity exposure is limited to a maximum of 85 percent of the total portfolios.

MYERS INDUSTRIES, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements — Continued

The following table provides a reconciliation of the funded status of the plans, both of which were underfunded at December 31, 2003 and 2002:


	2003			2002

Funded status	$	(1,746,250	)	$	(2,041,443	)
Unrecognized liability		0			(2,946	)
Unrecognized prior service cost		318,925			361,702
Unrecognized net loss		1,471,748			1,586,401

Net amount recognized	$	44,423		$	(96,286	)

Under the provisions of SFAS No. 87, the Company recorded an additional minimum pension liability of $1,790,673 at December 31, 2003, of which $1,471,748 has been recorded as a component of accumulated other comprehensive income and $318,925 as an intangible pension asset. The accumulated benefit obligation for the defined benefit plans was $5,684,187 and $4,884,755 at December 31, 2003 and 2002, respectively. The Company expects to contribute approximately $996,000 to its defined benefit pension plans in 2004.

A profit sharing plan is maintained for the Company’s U.S. based employees, not covered under defined benefit plans, who have met eligibility service requirements. The amount to be contributed by the Company under the profit sharing plan is determined at the discretion of the Board of Directors. Profit sharing plan expense was $1,450,000, $1,700,000, and $1,500,000 for the years 2003, 2002 and 2001, respectively. In addition, the Company has a Supplemental Executive Retirement Plan (SERP) to provide participating senior executives with retirement benefits in addition to amounts payable under the profit sharing plan. Expense related to the SERP was $1,044,000, $253,000 and $108,000 for the years 2003, 2002 and 2001, respectively. The SERP is unfunded.

Leases

The Company and certain of its subsidiaries are committed under non-cancelable operating leases involving certain facilities and equipment. Aggregate rental expense for all leased assets was $10,836,000, $9,395,000, and $9,493,000 for the years ended December 31, 2003, 2002 and 2001, respectively.

Future minimum rental commitments for the next five years are as follows:


Year Ended
December 31,	Commitment

2004	$	9,491,000
2005		8,472,000
2006		6,616,000
2007		5,349,000
2008		4,974,000
Thereafter		3,887,000

MYERS INDUSTRIES, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements — Continued

Income Taxes

The effective tax rate was 33.8% in 2003, 40.6% in 2002 and 44.2% in 2001. A reconciliation of the Federal statutory income tax rate to the Company’s effective tax rate is as follows:



	Percent of Pre-Tax Income

	2003			2002			2001

Statutory Federal income tax rate		35.0	%		35.0	%		35.0	%
State Income Taxes — net of Federal tax benefit		3.1			4.2			3.8
Foreign tax rate differential		(4.7	)		1.1			2.1
Effect of non-deductible depreciation and amortization		0.0			0.0			2.3
Other		0.4			0.3			1.0

Effective tax rate for the year		33.8	%		40.6	%		44.2	%

Income before income taxes was attributable to the following sources:



	(Dollar in thousands)

	2003		2002		2001

United States	$	16,917	$	34,231	$	23,799
Foreign		7,730		6,130		3,441

Totals	$	24,647	$	40,361	$	27,240

Income taxes consisted of the following:



	2003				2002				2001

	Current		Deferred		Current		Deferred		Current		Deferred

(Dollars in thousands)
Federal	$	2,904	$	2,694	$	7,269	$	3,921	$	6,518	$	2,140
Foreign		163		1,376		2,471		123		2,248		(455	)
State and local		839		345		2,135		482		1,651		(53	)

	$	3,906	$	4,415	$	11,875	$	4,526	$	10,417	$	1,632

MYERS INDUSTRIES, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements — Continued

Significant components of the Company’s deferred taxes as of December 31, 2003 and 2002 are as follows:


		2003		2002

(Dollars in thousands)
Deferred income tax liabilities
	Property, plant and equipment	$	22,483	$	20,101
	Tax deductible goodwill		3,911		2,206
	Employee benefit trust		602		556
	Other		2,473		1,641

			29,469		24,504
Deferred income tax assets
	Compensation		3,683		3,282
	Inventory valuation		1,150		1,108
	Allowance for uncollectible accounts		817		858
	Non-deductible accruals		1,895		2,055

			7,545		7,303

Net deferred income tax liability		$	21,924	$	17,201

In addition, the Company has reserved the deferred tax benefit of certain tax loss carryforwards in foreign countries that if realized would reduce future income tax expense by approximately $6,504,000 at December 31, 2003 and $5,977,000 at December 31, 2002. Of these carryforwards at December 31, 2003, $2,451,000 expires in various years from 2004 through 2008, and $4,053,000 has no expiration date. The Company also has U.S. foreign tax credit carryforwards of approximately $800,000 expiring in 2004.

Industry Segments

The Company’s business units have separate management teams and offer different products and services. Using the criteria of SFAS No. 131, these business units have been aggregated into two reportable segments; distribution of aftermarket repair products and services and manufacturing of polymer products. The aggregation of business units is based on management by the chief operating decision-maker for the segment as well as similarities of production processes, distribution methods and economic characteristics (e.g. average gross margin and the impact of economic conditions on long-term financial performance).

The Company’s distribution segment is engaged in the distribution of equipment, tools and supplies used for tire servicing and automotive underbody repair. The distribution segment operates domestically through 40 branches located in major cities throughout the United States and in foreign countries through export sales and businesses in which the Company holds an equity interest.

The Company’s manufacturing segment designs, manufactures and markets a variety of polymer based plastic and rubber products. These products are manufactured primarily through the molding process in facilities throughout the United States and in Europe. Sales to external customers for manufactured plastic products were $453.0 million, $406.7 million and $411.1 million for fiscal years 2003, 2002 and 2001, respectively. Outside sales of manufactured rubber products were $49.8 million, $47.3 million and $46.0 million for fiscal years 2003, 2002 and 2001.

Operating income for each segment is based on net sales less cost of products sold, and the related selling, administrative and general expenses. In computing segment operating income, general corporate overhead expenses and interest expenses are not included. The identifiable assets of each segment include: accounts

MYERS INDUSTRIES, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements — Continued

receivable, inventory, net fixed assets, goodwill, patents and other intangible assets. Corporate assets are principally land, buildings, computer equipment and cash.

Total sales from foreign business units and export were approximately $210.3 million, $182.5 million and $182.0 million for the years 2003, 2002 and 2001, respectively. There are no individual foreign countries for which sales are material. Long-lived assets in foreign countries consisting primarily of property, plant and equipment and goodwill were approximately $156.8 million at December 31, 2003 and $133.9 million at December 31, 2002. No single customer accounts for 10 percent or more of total company net sales or the net sales of either business segment.


	2003			2002			2001


	(Dollars in thousands)
Net Sales
Distribution of aftermarket repair products and services	$	158,317		$	154,028		$	150,932
Manufacturing of polymer products		517,311			468,633			470,387
Intra-segment elimination		(14,537	)		(14,670	)		(13,369	)

	$	661,091		$	607,991		$	607,950

Income Before Income Taxes
Distribution of aftermarket repair products and services	$	12,537		$	16,970		$	14,733
Manufacturing of polymer products		33,831			45,091			40,597
Corporate		(11,647	)		(9,890	)		(9,391	)
Interest expense-net		(10,074	)		(11,810	)		(18,699	)

	$	24,647		$	40,361		$	27,240

Identifiable Assets
Distribution of aftermarket repair products and services	$	44,077		$	50,934		$	48,993
Manufacturing of polymer products		576,261			545,970			528,775
Corporate		1,644			6,008			4,558
Intra-segment elimination		(355	)		(430	)		(160	)

	$	621,627		$	602,482		$	582,166

Capital Additions, Net
Distribution of aftermarket repair products and services	$	46		$	52		$	29
Manufacturing of polymer products		19,025			27,895			24,950
Corporate		939			442			206

	$	20,010		$	28,389		$	25,185

Depreciation
Distribution of aftermarket repair products and services	$	383		$	433		$	483
Manufacturing of polymer products		33,684			33,390			32,172
Corporate		711			727			706

	$	34,778		$	34,550		$	33,361

MYERS INDUSTRIES, INC.

Amended and Restated

Employee Stock Purchase Plan

Contents

Report of Independent Public Accountants for the Myers Industries, Inc. Amended and Restated Employee Stock Purchase Plan

Financial Statements for the Myers Industries, Inc. Amended and Restated Employee Stock Purchase Plan:

(1) Statements of Assets Available for Plan Benefits as of December 31, 2003 and 2002; and

(2) Statements of Changes in Assets Available for Plan Benefits for the Years Ended December 31, 2003, 2002 and 2001.

Notes to Financial Statements for the Myers Industries, Inc. Amended and Restated Employee Stock Purchase Plan

This report is a copy and has not been reissued by Arthur Andersen, LLP.

This report references the Myers Industries, Inc. Employee Stock Purchase Plan Statement of Assets available for plan benefits as of December 31, 2000 and the related statement of changes in assets available for plan for the year ended December 31, 1999, which are not presented herein.

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Myers Industries, Inc. Employee
Stock Purchase Plan Administrator:

We have audited the accompanying statements of assets available for plan benefits of the Myers Industries, Inc. Employee Stock Purchase Plan as of December 31, 2001 and 2000, and the related statements of changes in assets available for plan benefits for each of the three years in the period ended December 31, 2001. These financial statements are the responsibility of the Plan Administrator. Our responsibility is to express an opinion on these financial statements based on our audits.

In our opinion, the financial statements referred to above present fairly, in all material respects, the assets available for plan benefits of the Myers Industries, Inc. Employee Stock Purchase Plan as of December 31, 2001 and 2000, and the changes in its assets available for plan benefits for each of the three years in the period ended December 31, 2001, in conformity with accounting principles generally accepted in the United States.

ARTHUR ANDERSEN LLP

/s/ Arthur Andersen LLP

Cleveland, Ohio,

February 15, 2002

REPORT OF ERNST & YOUNG, LLP, INDEPENDENT AUDITORS

Myers Industries, Inc.
Employee Stock Purchase Plan Administrator:

We have audited the accompanying statement of assets available for plan benefits of the Myers Industries, Inc. Amended and Restated Employee Stock Purchase Plan as of December 31, 2003 and 2002, and the related statements of changes in assets available for plan benefits for the years then ended. These financial statements are the responsibility of the Plan Administrator. Our responsibility is to express an opinion on these financial statements based on our audits.

In our opinion, the financial statements referred to above present fairly, in all material respects, the assets available for plan benefits of the Myers Industries, Inc. Amended and Restated Employee Stock Purchase Plan as of December 31, 2003 and 2002, and the changes in its assets available for plan benefits for the years then ended, in conformity with accounting principles generally accepted in the United States.

Akron, Ohio,

March 15, 2004

MYERS INDUSTRIES, INC.

Amended and Restated

Employee Stock Purchase Plan

Statements of Assets Available for Plan Benefits

December 31, 2003 and 2002


	2003		2002

Receivable from Trustee (Myers Industries, Inc.)	$	109,202	$	113,348

Statements of Changes in Assets Available for Plan Benefits

For the Years Ended December 31, 2003 and 2002


		2003			2002

Contributions:
Assets Available for Plan Benefits at beginning of year		$	113,348		$	105,837
Participants’ contributions during the year			470,722			456,979

Assets Available for Stock Purchases			584,070			562,816
	Less:
Assets Used for Stock Purchases			(474,868	)		(449,468	)

Assets Available for Plan Benefits at End of Year		$	109,202		$	113,348

See the accompanying notes to financial statements.

MYERS INDUSTRIES, INC.

Amended and Restated

Employee Stock Purchase Plan

Notes to Financial Statements

For the Years Ended December 31, 2003, 2002 and 2001

1. Description of Plan

The following description of the Myers Industries, Inc. Amended and Restated Employee (“Company”) Stock Purchase Plan (“Stock Plan”) provides only general information. Participants should refer to the Plan Agreement and Prospectus for the Stock Plan for a more complete description of the Plan’s provisions.

(a) General. The shareholders of the Company approved the adoption of a nonqualified and a qualified Employee Stock Purchase Plan. The Stock Plan is designed to encourage, facilitate and provide employees with an opportunity to share in the favorable performance of the Company through ownership of the Company’s Common Stock. The total number of shares of the Common Stock which may be sold under the Stock Plan is currently limited to 188,176 shares.

(b) Purpose. The purpose of the Stock Plan is to provide employees (including officers) of the Company and its subsidiaries with an opportunity to purchase Common Stock through payroll deductions.

(c) Administration. The Stock Plan is administered by a committee appointed by the Board of Directors. All questions of interpretation or application of the Stock Plan are determined by the Board of Directors (or its appointed committee) and its decisions are final, conclusive and binding upon all participants.

(d) Eligibility and Participation. Any permanent employee (including an officer) who has been employed for at least one calendar year by the Company, or its subsidiaries who have adopted the Stock Plan, is eligible to participate in the Stock Plan, provided that such employee is employed by the Company on the date his participation is effective and subject to limitations on stock ownership described in the Stock Plan. Eligible employees become participants in the Stock Plan by delivering to the Company a subscription agreement authorizing payroll deductions prior to the commencement of the applicable offering period.

(e) Offering Dates. The Stock Plan is implemented by one offering during each calendar quarter. Offering periods commence on the last day of each calendar quarter. The Board of Directors has the power to alter the duration of the offering periods without shareholder approval.

(f) Purchase Price. The price at which shares may be purchased in an offering under the Stock Plan is 90% of the fair market value of the Common Stock on the last day of the prior calendar quarter. The fair market value of the Common Stock on a given date is the closing price for that date as listed on the American Stock Exchange.

(g) Payroll Deductions. The purchase price of the shares to be acquired under the Stock Plan are accumulated by payroll deductions over the offering period. The rate of deductions may not be less than five dollars ($5.00) per week or exceed 10% of a participant’s compensation, and the aggregate of all payroll deductions during the offering may not exceed 10% of the participant’s aggregate compensation for the offering period. A participant may discontinue their participation in the Stock Plan or may decrease or increase the rate of payroll deductions at any time during the offering period by filing with the Company a new authorization for payroll deductions.

All payroll deductions made for a participant are credited to their account under the Stock Plan and are deposited with the general funds of the Company to be used for any corporate purpose. The amount by which an employee’s payroll deductions exceed the amount required to purchase whole shares will be placed in a suspense account for the employee with no interest thereon and rolled over into the next offering period.

(h) Withdrawal. A participant in the Stock Plan may terminate their interest in a given offering in whole, but not in part, by giving written notice to the Company of their election to withdraw at any time prior to the end of the applicable offering period. Such withdrawal automatically terminates the participant’s

MYERS INDUSTRIES, INC.

Amended and Restated

Employee Stock Purchase Plan

Notes to Financial Statements — (Continued)

interest in that offering, but does not have any effect upon such participant’s eligibility to participate in subsequent offerings under the Stock Plan.

(i) Termination of Employment. Termination of a participant’s employment for any reason, including retirement or death, cancels his or her participation in the Stock Plan immediately.

(j) Nonassignability. No rights or accumulated payroll deductions of an employee under the Stock Plan may be pledged, assigned, transferred or otherwise disposed of in any way for any reason, other than on account of death. Any attempt to do so may be treated by the Company as an election to withdraw from the Stock Plan.

(k) Amendment and Termination of the Plan. The Board of Directors may at any time amend or terminate the Stock Plan. Except as provided above, no amendment may be made to the Stock Plan without prior approval of the shareholders if such amendment would increase the number of shares reserved under the Stock Plan, permit payroll deductions at a rate in excess of 10% of a participant’s compensation, materially modify the eligibility requirements or materially increase the benefits which may accrue to participants under the Stock Plan.

(l) Taxation. Participants in the Stock Plan, which is nonqualified for federal income tax purposes, are taxed currently on the 10% discount in the purchase price granted by the Stock Plan in the year in which stock is purchased. The 10% discount is treated as ordinary income to the participant and that amount is currently deductible by the Company to the extent the participant’s total compensation from the Company is within the “reasonable compensation” limits imposed by Section 162 of the Internal Revenue Code of 1986, as amended.


2.	Summary of Significant Accounting Policies

(a) Basis of Presentation. The accompanying statements of assets available for plan benefits and statements of changes in assets available for plan benefits are prepared on the accrual basis of accounting.

(b) Administrative Expenses. Administrative costs and expenses are absorbed by the Trustee.


ITEM 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

On June 13, 2002, the Company filed a Current Report on Form 8-K reporting that the Company’s Audit Committee of the Board of Directors terminated Arthur Andersen LLP and appointed Ernst & Young LLP as the Company’s independent auditors for the Company’s fiscal year ended December 31, 2002.

The Audit Committee of the Board of Directors selects the Company’s independent accountants. On June 13, 2002 the Audit Committee terminated Arthur Andersen LLP as its independent auditors. Simultaneously with the termination of Arthur Andersen LLP, the Audit Committee appointed Ernst & Young LLP as the Company’s independent auditors. The appointment of Ernst & Young LLP was made after significant consideration and review by the Audit Committee, and concluded a thorough and deliberate evaluation including discussions with the Board of Directors and management.

The reports of Arthur Andersen LLP on the Company’s financial statements for the fiscal years ended December 31, 2000 and 2001 did not contain an adverse opinion, disclaimer of opinion or qualification or modification as to uncertainty, audit scope or accounting principles. During the fiscal years ended December 31, 2000 and 2001 and during the subsequent interim period, there were no disagreements with Arthur Andersen LLP on any matters of accounting principles or practices, financial statement disclosure or auditing scope or procedures. During the fiscal years ended December 31, 2000 and 2001 and during the subsequent interim period, there were no reportable events (as defined in Item 304(a)(1)(v) of Regulation S-K).

Simultaneously with the dismissal of Arthur Andersen LLP, the Audit Committee appointed Ernst & Young LLP as the Company’s independent auditors. During the years ended December 31, 2000 and 2001 and through the date of the Audit Committee’s decision, the Company did not consult Ernst & Young LLP regarding the application of accounting principles to a specified transaction, either completed or proposed, or the type of audit opinion that might be rendered on the Company’s consolidated financial statements, or any matter that was either the subject of disagreement on any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedures or a reportable event as defined in Item 304 (a)(1)(v) of Regulation S-K.


ITEM 9.(A)	Controls and Procedures

As of the end of the period covered by this report, the Company carried out an evaluation, under the supervision and with the participation of the Company’s management, including the Company’s Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures pursuant to Exchange Act Rule 13a-14. Based upon the evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures were effective as of December 31, 2003. There have been no significant changes in the Company’s internal controls or in other factors that could significantly affect internal controls subsequent to December 31, 2003.

PART III


ITEM 10.	Directors and Executive Officers of the Registrant

For information about the directors of the Registrant, see “Election of Directors” on pages 3 through 8 of Registrant’s Proxy Statement dated March 15, 2004 (“Proxy Statement”), which is incorporated herein by reference.

Information about the Executive Officers of Registrant appears in Part I of this Report.

Disclosures by the Registrant with respect to compliance with Section 16(a) appear on page 8 of the Proxy Statement, and are incorporated herein by reference.


ITEM 11.	Executive Compensation

See “Executive Compensation and Other Information” on pages 9 through 13 of the Proxy Statement, which is incorporated herein by reference.


ITEM 12.	Security Ownership of Certain Beneficial Owners and Management

See “Principal Shareholders” and “Election of Directors” on page 22, and pages 3 through 8, respectively, of the Proxy Statement, which are incorporated herein by reference.

(C)

Number of Securities

(A)

Remaining Available for

Number of Securities to

(B)

Future Issuance Under

Be Issued Upon

Weighted-average

Equity Compensation

Exercise

Exercise Price of

Plans (Excluding

of Outstanding Options,

Outstanding Options,

Securities Reflected

Plan Category

Warrants or Rights

in Column (A))

Equity Compensation Plans Approved by Security Holders⁽¹⁾

800,725

9.60

1,623,885

Equity Compensation Plans Not Approved by Security Holders

–0–

Total

800,725

9.60

1,623,885

(1) This information is as January 30, 2004 and includes the 1992, 1997 and 1999 Stock Plans, and the Employee Stock Purchase Plan.


ITEM 13.	Certain Relationships and Related Transactions

None.

PART IV


ITEM 14.	Principal Accountant Fees and Services

Required information regarding fees paid to and services provided by the Company’s independent auditor during the years ended December 31, 2003 and 2002 and the pre-approval policies and procedures of the Audit Committee of the Company’s Board of Directors is set forth on page 15 of the Proxy Statement dated March 15, 2004, which is incorporated herein by reference.


ITEM 15.	Exhibits, Financial Statement Schedules and Reports on Form 8-K

The following consolidated financial statements of the Registrant appear in Part II of this Report:

15. (A)(1) Financial Statements

Consolidated Financial Statements of Myers Industries, Inc. and Subsidiaries

Report of Independent Public Accountants

Statements of Consolidated Financial Position As Of December 31, 2003 and 2002

Statements of Consolidated Income For The Years Ended December 31, 2003, 2002 and 2001

Statements of Consolidated Shareholders’ Equity and Comprehensive Income For The Years Ended December 31, 2003, 2002 and 2001

Statements of Consolidated Cash Flows For The Years Ended December 31, 2003, 2002 and 2001

Notes to Consolidated Financial Statements For The Years Ended December 31, 2003, 2002 and 2001

Financial Statements for the Myers Industries, Inc. Employee Stock Purchase Plan

Statements of Assets Available for Plan Benefits As Of December 31, 2003 and 2002

Statements of Changes in Assets Available for Plan Benefits For The Years Ended December 31, 2003 and 2002

15. (A)(2) Financial Statement Schedules

All schedules are omitted because they are inapplicable, not required, or because the information is included in the consolidated financial statements or notes thereto which appear in Part II of this Report.

15. (A)(3) Management Contracts or Compensatory Plans or Arrangements

See those documents listed under ITEM 15 (c) which are marked as such.

15. (B) Reports on Form 8-K

No reports on Form 8-K have been filed during the last quarter of 2003.

15. (C) Exhibits


3	(a)	Myers Industries, Inc. Amended and Restated Articles of Incorporation. Reference is made to Exhibit (3)(a) to Form 10-Q filed with the Commission on May 17, 1999.
3	(b)	Myers Industries, Inc. Amended and Restated Code of Regulations. Reference is made to Exhibit (3)(b) to Form 10-K filed with the Commission on March 26, 2003.
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(b) to Form 10-K filed with the Commission on March 30, 2001.*
10	(c)	Myers Industries, Inc. Amended and Restated 1992 Stock Option Plan. Reference is made to Exhibit 10(c) to Form 10-K filed with the Commission on March 30, 2001.*
10	(d)	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 March 30, 2001.
10	(e)	Myers Industries, Inc. 1997 Incentive Stock Plan. Reference is made to Exhibit 10.2 to Form S-8 (Registration Statement No. 333-90367) filed with the Commission on November 5, 1999.*
10	(f)	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 May 6, 2003.*
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)	Employment Letter between Myers Industries, Inc. and John C. Orr dated February 14, 2003. Reference is made to Exhibit 10(h) to Form 10-Q filed with the Commission on May 6, 2003.*
10	(i)	Change of Control Agreement between Myers Industries, Inc. and John C. Orr dated February 14, 2003. Reference is made to Exhibit 10(i) to Form 10-Q filed with the Commission on May 6, 2003.*
10	(j)	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	(k)	Supplemental Compensation Agreement for Milton I. Wiskind dated April 25, 1996. Reference is made to Exhibit (10)(h) to Form 10-K filed with the Commission on March 26, 2003.*
10	(l)	Employment Contract between Myers Europe, SA (fka Myers AE, SA) and Jean-Paul Lesage dated February 1, 1999. Reference is made to Exhibit (10)(i) to Form 10-K filed with the Commission on March 26, 2003.*


10	(m)	Description of the terms of employment between Myers Industries, Inc. and Kevin C. O’Neil dated June 10, 2003. Reference is made to Exhibit (10)(j) to Form 10-K filed with the Commission on March 26, 2003.*
10	(n)	Amended and Restated Loan Agreement between Myers Industries, Inc. and Banc One, NA, Agent dated as of February 27, 2004.
10	(o)	Note Purchase Agreement between Myers Industries, Inc. and the Note Purchasers, dated December 12, 2003, regarding the issuance of (i) $65,000,000 of 6.08% Series 2003-A Senior Notes due December 12, 2010, and (ii) $35,000,000 of 6.81% Series 2003-A Senior Notes due December 12, 2013.
21		Subsidiaries of Registrant.
23	(a)	Consent of Ernst & Young, LLP, Independent Auditors
23	(b)	Statement regarding consent of Arthur Andersen, LLP
23	(c)	Consent of Ernst & Young, LLP, Independent Auditors — Myers Industries, Inc. Employee Stock Purchase Plan.
31.1		Certification of Stephen E. Myers, President and Chief Executive Officer of Myers Industries, Inc, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2		Certification of Gregory J. Stodnick, Vice President-Finance (Chief Financial Officer) of Myers Industries, Inc., pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32		Certifications of Stephen E. Myers, President and Chief Executive Officer, and Gregory J. Stodnick, Vice President — Finance (Chief Financial Officer), of Myers Industries, Inc. pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

* Indicates executive compensation plan or arrangement.

15.(D) FINANCIAL STATEMENTS

See subparagraph 15(a)(1) above.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

MYERS INDUSTRIES, INC.

By: /s/ GREGORY J. STODNICK

Gregory J. Stodnick

Vice President — Finance and

Chief Financial Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.


Signature	Title	Date


/s/ GREGORY J. STODNICK Gregory J. Stodnick	Vice President — Finance and Chief Financial Officer (Principal Financial and Accounting Officer)	March 15, 2004

/s/ KEITH A. BROWN Keith A. Brown	Director	March 15, 2004

/s/ KARL S. HAY Karl S. Hay	Director	March 15, 2004

/s/ RICHARD P. JOHNSTON Richard P. Johnston	Director	March 15, 2004

Michael W. Kane	Director	March , 2004

/s/ EDWARD W. KISSEL Edward W. Kissel	Director	March 15, 2004

/s/ STEPHEN E. MYERS Stephen E. Myers	Chairman, Chief Executive Officer and Director (Principal Executive Officer)	March 15, 2004

/s/ RICHARD L. OSBORNE Richard L. Osborne	Director	March 15, 2004

/s/ JON H. OUTCALT Jon H. Outcalt	Director	March 15, 2004

/s/ MILTON I. WISKIND Milton I. Wiskind	Vice Chairman, Secretary and Director	March 15, 2004


(1)	Portions of Registrant’s Notice of 2004 Annual Meeting and Proxy Statement, dated March 15, 2004, in Part III (Items 10, 11, 12 and 13)


(1)	Registrant’s Notice of 2004 Annual Meeting of Shareholders and Proxy Statement


	•	Reusable Plastic Material Handling Containers
	•	Plastic Planters
	•	Plastic Storage & Organization Products
	•	Plastic Storage Tanks
	•	Plastic and Metal Material Handling Carts
	•	Rubber OEM & Replacement Parts


	•	Tire Repair & Retreading Products
	•	Custom Rubber Sheet Stock
	•	Reflective Highway Marking Products


	•	Buckhorn
	•	Akro-Mils
	•	Allibert Équipement
	•	Ameri-Kart
	•	Buckhorn Rubber
	•	Dillen
	•	Listo
	•	Patch Rubber
	•	raaco


	•	Plastic & Rubber Injection Molding
	•	Compression Molding
	•	Winding Extrusion
	•	Vacuum Forming
	•	Rotational Molding
	•	Rubber Compounding, Calendering & Extrusion
	•	Rubber-to-Metal Bonding
	•	Blow Molding
	•	Metal Forming


	•	Agriculture
	•	Automotive
	•	Chemical
	•	Construction
	•	Consumer
	•	Food Processing & Distribution
	•	General Industrial
	•	Healthcare
	•	Horticulture
	•	Marine/ Watercraft
	•	Recreational Vehicle
	•	Telecommunications
	•	Tire Repair & Retread
	•	Transportation
	•	Waste Collection
	•	Water Control


	•	Tire Valves & Accessories
	•	Tire Changing & Balancing Equipment
	•	Lifts & Alignment Equipment
	•	Service Equipment & Tools
	•	Tire Repair/ Retread Equipment & Supplies


	•	International Distribution
	•	Broad Sales Coverage
	•	Personalized Service
	•	Customer Product Training
	•	National Accounts


	•	Retail Tire Dealers
	•	Truck Tire Dealers
	•	Auto Dealers
	•	Commercial Auto & Truck Fleets
	•	Tire Retreaders
	•	General Repair Facilities


*	Adjusted for the five-for-four stock split distributed in August 2002; the ten percent stock dividends paid in August, 2001; August, 2000; and August, 1999.


	(1)	Statements of Assets Available for Plan Benefits as of December 31, 2003 and 2002; and

	(2)	Statements of Changes in Assets Available for Plan Benefits for the Years Ended December 31, 2003, 2002 and 2001.


(1)	This information is as January 30, 2004 and includes the 1992, 1997 and 1999 Stock Plans, and the Employee Stock Purchase Plan.


	Report of Independent Public Accountants

	Statements of Consolidated Financial Position As Of December 31, 2003 and 2002

	Statements of Consolidated Income For The Years Ended December 31, 2003, 2002 and 2001

	Statements of Consolidated Shareholders’ Equity and Comprehensive Income For The Years Ended December 31, 2003, 2002 and 2001

	Statements of Consolidated Cash Flows For The Years Ended December 31, 2003, 2002 and 2001

	Notes to Consolidated Financial Statements For The Years Ended December 31, 2003, 2002 and 2001



	Gregory J. Stodnick
	Vice President — Finance and
	Chief Financial Officer