0000069488 false 2021 Q1 --12-31 us-gaap:ShippingAndHandlingMember us-gaap:ShippingAndHandlingMember 2024-01-15 2026-01-15 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 true true 2021 mye:RightOfUseAssetOperatingLeasesMember mye:RightOfUseAssetOperatingLeasesMember us-gaap:PropertyPlantAndEquipmentMember us-gaap:PropertyPlantAndEquipmentMember mye:OperatingLeaseLiabilityShortTermMember mye:OperatingLeaseLiabilityShortTermMember mye:OperatingLeaseLiabilityLongTermMember mye:OperatingLeaseLiabilityLongTermMember mye:FinanceLeaseLiabilityShortTermMember mye:FinanceLeaseLiabilityShortTermMember mye:FinanceLeaseLiabilityLongTermMember mye:FinanceLeaseLiabilityLongTermMember P6Y6M10D P5Y7M28D P14Y11M4D 0000069488 2021-01-01 2021-03-31 xbrli:shares 0000069488 2021-04-30 iso4217:USD 0000069488 2020-01-01 2020-03-31 iso4217:USD xbrli:shares 0000069488 2021-03-31 0000069488 2020-12-31 0000069488 us-gaap:CommonStockMember 2020-12-31 0000069488 us-gaap:AdditionalPaidInCapitalMember 2020-12-31 0000069488 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2020-12-31 0000069488 us-gaap:RetainedEarningsMember 2020-12-31 0000069488 us-gaap:CommonStockMember 2021-01-01 2021-03-31 0000069488 us-gaap:AdditionalPaidInCapitalMember 2021-01-01 2021-03-31 0000069488 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2021-01-01 2021-03-31 0000069488 us-gaap:RetainedEarningsMember 2021-01-01 2021-03-31 0000069488 us-gaap:CommonStockMember 2021-03-31 0000069488 us-gaap:AdditionalPaidInCapitalMember 2021-03-31 0000069488 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2021-03-31 0000069488 us-gaap:RetainedEarningsMember 2021-03-31 0000069488 us-gaap:CommonStockMember 2019-12-31 0000069488 us-gaap:AdditionalPaidInCapitalMember 2019-12-31 0000069488 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-12-31 0000069488 us-gaap:RetainedEarningsMember 2019-12-31 0000069488 2019-12-31 0000069488 us-gaap:CommonStockMember 2020-01-01 2020-03-31 0000069488 us-gaap:AdditionalPaidInCapitalMember 2020-01-01 2020-03-31 0000069488 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2020-01-01 2020-03-31 0000069488 us-gaap:RetainedEarningsMember 2020-01-01 2020-03-31 0000069488 us-gaap:CommonStockMember 2020-03-31 0000069488 us-gaap:AdditionalPaidInCapitalMember 2020-03-31 0000069488 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2020-03-31 0000069488 us-gaap:RetainedEarningsMember 2020-03-31 0000069488 2020-03-31 0000069488 mye:ElkhartPlasticsIncMember 2021-01-01 2021-03-31 0000069488 us-gaap:EstimateOfFairValueFairValueDisclosureMember us-gaap:SeniorNotesMember 2021-03-31 0000069488 us-gaap:EstimateOfFairValueFairValueDisclosureMember us-gaap:SeniorNotesMember 2020-12-31 0000069488 us-gaap:AccumulatedTranslationAdjustmentMember 2020-12-31 0000069488 us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember 2020-12-31 0000069488 us-gaap:AccumulatedTranslationAdjustmentMember 2021-01-01 2021-03-31 0000069488 us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember 2021-01-01 2021-03-31 0000069488 us-gaap:AccumulatedTranslationAdjustmentMember 2021-03-31 0000069488 us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember 2021-03-31 0000069488 us-gaap:AccumulatedTranslationAdjustmentMember 2019-12-31 0000069488 us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember 2019-12-31 0000069488 us-gaap:AccumulatedTranslationAdjustmentMember 2020-01-01 2020-03-31 0000069488 us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember 2020-01-01 2020-03-31 0000069488 us-gaap:AccumulatedTranslationAdjustmentMember 2020-03-31 0000069488 us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember 2020-03-31 0000069488 mye:ConsumerMember mye:MaterialHandlingMember us-gaap:OperatingSegmentsMember 2021-01-01 2021-03-31 0000069488 mye:ConsumerMember 2021-01-01 2021-03-31 0000069488 mye:VehicleMember mye:MaterialHandlingMember us-gaap:OperatingSegmentsMember 2021-01-01 2021-03-31 0000069488 mye:VehicleMember 2021-01-01 2021-03-31 0000069488 us-gaap:FoodAndBeverageMember mye:MaterialHandlingMember us-gaap:OperatingSegmentsMember 2021-01-01 2021-03-31 0000069488 us-gaap:FoodAndBeverageMember 2021-01-01 2021-03-31 0000069488 mye:IndustrialMember mye:MaterialHandlingMember us-gaap:OperatingSegmentsMember 2021-01-01 2021-03-31 0000069488 mye:IndustrialMember us-gaap:IntersegmentEliminationMember 2021-01-01 2021-03-31 0000069488 mye:IndustrialMember 2021-01-01 2021-03-31 0000069488 mye:AutoAftermarketMember mye:DistributionMember us-gaap:OperatingSegmentsMember 2021-01-01 2021-03-31 0000069488 mye:AutoAftermarketMember 2021-01-01 2021-03-31 0000069488 mye:MaterialHandlingMember us-gaap:OperatingSegmentsMember 2021-01-01 2021-03-31 0000069488 mye:DistributionMember us-gaap:OperatingSegmentsMember 2021-01-01 2021-03-31 0000069488 us-gaap:IntersegmentEliminationMember 2021-01-01 2021-03-31 0000069488 mye:ConsumerMember mye:MaterialHandlingMember us-gaap:OperatingSegmentsMember 2020-01-01 2020-03-31 0000069488 mye:ConsumerMember 2020-01-01 2020-03-31 0000069488 mye:VehicleMember mye:MaterialHandlingMember us-gaap:OperatingSegmentsMember 2020-01-01 2020-03-31 0000069488 mye:VehicleMember 2020-01-01 2020-03-31 0000069488 us-gaap:FoodAndBeverageMember mye:MaterialHandlingMember us-gaap:OperatingSegmentsMember 2020-01-01 2020-03-31 0000069488 us-gaap:FoodAndBeverageMember 2020-01-01 2020-03-31 0000069488 mye:IndustrialMember mye:MaterialHandlingMember us-gaap:OperatingSegmentsMember 2020-01-01 2020-03-31 0000069488 mye:IndustrialMember us-gaap:IntersegmentEliminationMember 2020-01-01 2020-03-31 0000069488 mye:IndustrialMember 2020-01-01 2020-03-31 0000069488 mye:AutoAftermarketMember mye:DistributionMember us-gaap:OperatingSegmentsMember 2020-01-01 2020-03-31 0000069488 mye:AutoAftermarketMember 2020-01-01 2020-03-31 0000069488 mye:MaterialHandlingMember us-gaap:OperatingSegmentsMember 2020-01-01 2020-03-31 0000069488 mye:DistributionMember us-gaap:OperatingSegmentsMember 2020-01-01 2020-03-31 0000069488 us-gaap:IntersegmentEliminationMember 2020-01-01 2020-03-31 0000069488 us-gaap:AccountsReceivableMember 2021-03-31 0000069488 us-gaap:AccountsReceivableMember 2020-12-31 0000069488 us-gaap:InventoriesMember 2021-03-31 0000069488 us-gaap:InventoriesMember 2020-12-31 0000069488 us-gaap:OtherCurrentLiabilitiesMember 2021-03-31 0000069488 us-gaap:OtherCurrentLiabilitiesMember 2020-12-31 0000069488 us-gaap:SellingGeneralAndAdministrativeExpensesMember 2021-01-01 2021-03-31 0000069488 us-gaap:SellingGeneralAndAdministrativeExpensesMember 2020-01-01 2020-03-31 0000069488 us-gaap:CostOfSalesMember 2021-01-01 2021-03-31 0000069488 us-gaap:CostOfSalesMember 2020-01-01 2020-03-31 0000069488 mye:ElkhartPlasticsIncMember 2020-11-10 2020-11-10 0000069488 mye:ElkhartPlasticsIncMember 2019-08-26 0000069488 us-gaap:CustomerRelationshipsMember mye:ElkhartPlasticsIncMember 2020-11-10 2020-11-10 0000069488 us-gaap:TradeNamesMember mye:ElkhartPlasticsIncMember 2020-11-10 2020-11-10 0000069488 us-gaap:NoncompeteAgreementsMember mye:ElkhartPlasticsIncMember 2020-11-10 2020-11-10 0000069488 mye:TuffyManufacturingIndustriesIncMember 2020-11-10 2020-11-10 0000069488 mye:LawnAndGardenBusinessMember 2018-01-01 2018-12-31 0000069488 us-gaap:GuaranteeObligationsMember mye:LawnAndGardenMember 2021-01-01 2021-03-31 0000069488 us-gaap:GuaranteeObligationsMember mye:LawnAndGardenMember 2018-01-01 2018-12-31 0000069488 us-gaap:GuaranteeObligationsMember mye:LawnAndGardenMember 2019-12-31 0000069488 mye:LawnAndGardenMember us-gaap:GuaranteeObligationsMember 2020-01-31 0000069488 mye:LawnAndGardenMember us-gaap:GuaranteeObligationsMember 2020-01-01 2020-01-31 0000069488 country:IN mye:ManufacturingAndDistributionMember 2021-03-31 0000069488 country:IN mye:ManufacturingAndDistributionMember 2019-12-01 2019-12-31 0000069488 country:IN mye:ManufacturingAndDistributionMember us-gaap:OtherNoncurrentAssetsMember 2021-03-31 0000069488 country:IN mye:ManufacturingAndDistributionMember us-gaap:OtherNoncurrentAssetsMember 2020-12-31 0000069488 mye:AmeriKartMember srt:ScenarioForecastMember 2021-12-31 xbrli:pure 0000069488 mye:DistributionMember 2020-12-31 0000069488 mye:MaterialHandlingMember 2020-12-31 0000069488 mye:DistributionMember 2021-01-01 2021-03-31 0000069488 mye:MaterialHandlingMember 2021-01-01 2021-03-31 0000069488 mye:DistributionMember 2021-03-31 0000069488 mye:MaterialHandlingMember 2021-03-31 0000069488 us-gaap:TradeNamesMember 2021-03-31 0000069488 us-gaap:TradeNamesMember 2020-12-31 0000069488 mye:A2017PlanMember 2021-03-31 0000069488 mye:A2017PlanMember us-gaap:SubsequentEventMember 2021-04-29 0000069488 us-gaap:EmployeeStockOptionMember 2021-01-01 2021-03-31 0000069488 mye:TwoThousandTwentyOneLongTermIncentivePlanMember us-gaap:SubsequentEventMember 2021-04-29 0000069488 mye:NewIdriaMercuryMineMember 2018-10-01 2018-12-31 0000069488 mye:NewIdriaMercuryMineMember 2019-01-01 2019-01-31 0000069488 us-gaap:PendingLitigationMember mye:NewIdriaMercuryMineMember mye:EPANoticeLetterMember 2011-10-01 2021-03-31 0000069488 us-gaap:PendingLitigationMember mye:NewIdriaMercuryMineMember mye:EPANoticeLetterMember 2021-01-01 2021-03-31 0000069488 us-gaap:PendingLitigationMember mye:NewIdriaMercuryMineMember mye:EPANoticeLetterMember 1993-01-01 2014-02-14 0000069488 us-gaap:PendingLitigationMember mye:NewIdriaMercuryMineMember mye:EPANoticeLetterMember 2020-01-01 2020-03-31 0000069488 us-gaap:PendingLitigationMember mye:NewIdriaMercuryMineMember mye:EPANoticeLetterMember 2015-01-01 2015-12-31 0000069488 us-gaap:PendingLitigationMember mye:NewIdriaMercuryMineMember mye:EPANoticeLetterMember 2019-04-01 2019-06-30 0000069488 us-gaap:PendingLitigationMember mye:NewIdriaMercuryMineMember mye:EPANoticeLetterMember 2020-10-01 2020-12-31 0000069488 us-gaap:PendingLitigationMember mye:NewIdriaMercuryMineMember mye:EPANoticeLetterMember 2021-03-31 0000069488 mye:NewAlmadenMineMember mye:NaturalResourceDamageClaimMember 2016-01-01 2016-12-31 0000069488 mye:NewAlmadenMineMember mye:NaturalResourceDamageClaimMember 2021-03-31 0000069488 mye:NewAlmadenMineMember mye:NaturalResourceDamageClaimMember 2021-01-01 2021-03-31 0000069488 mye:NewAlmadenMineMember mye:NaturalResourceDamageClaimMember 2020-01-01 2020-03-31 0000069488 us-gaap:RevolvingCreditFacilityMember 2021-03-31 0000069488 mye:FourPointSixSevenPercentSeniorUnsecuredNotesDueJanuaryFifteenTwentyTwentyOneMember 2020-12-31 0000069488 mye:FivePointTwoFivePercentSeniorUnsecuredNotesDueJanuaryFifteenTwentyTwentyFourMember 2021-03-31 0000069488 mye:FivePointTwoFivePercentSeniorUnsecuredNotesDueJanuaryFifteenTwentyTwentyFourMember 2020-12-31 0000069488 mye:FivePointThreeZeroPercentSeniorUnsecuredNotesDueJanuaryFifteenTwentyTwentyFourMember 2021-03-31 0000069488 mye:FivePointThreeZeroPercentSeniorUnsecuredNotesDueJanuaryFifteenTwentyTwentyFourMember 2020-12-31 0000069488 mye:FivePointFourFivePercentSeniorUnsecuredNotesDueJanuaryFifteenTwentyTwentySixMember 2021-03-31 0000069488 mye:FivePointFourFivePercentSeniorUnsecuredNotesDueJanuaryFifteenTwentyTwentySixMember 2020-12-31 0000069488 mye:FourPointSixSevenPercentSeniorUnsecuredNotesDueJanuaryFifteenTwentyTwentyOneMember 2021-03-31 0000069488 mye:FourPointSixSevenPercentSeniorUnsecuredNotesDueJanuaryFifteenTwentyTwentyOneMember 2021-01-01 2021-03-31 0000069488 mye:FivePointTwoFivePercentSeniorUnsecuredNotesDueJanuaryFifteenTwentyTwentyFourMember 2021-01-01 2021-03-31 0000069488 mye:FivePointThreeZeroPercentSeniorUnsecuredNotesDueJanuaryFifteenTwentyTwentyFourMember 2021-01-01 2021-03-31 0000069488 mye:FivePointFourFivePercentSeniorUnsecuredNotesDueJanuaryFifteenTwentyTwentySixMember 2021-01-01 2021-03-31 0000069488 mye:LoanAgreementMember 2017-03-31 0000069488 mye:LoanAgreementMember 2021-03-31 0000069488 mye:LoanAgreementMember 2017-03-01 2017-03-31 0000069488 mye:LoanAgreementMember 2021-01-01 2021-03-31 0000069488 us-gaap:OtherNoncurrentAssetsMember 2021-03-31 0000069488 mye:LoanAgreementMember us-gaap:GovernmentGuaranteedCollateralMember 2021-01-01 2021-03-31 0000069488 srt:MinimumMember us-gaap:SeniorNotesMember 2021-03-31 0000069488 srt:MaximumMember us-gaap:SeniorNotesMember 2021-03-31 0000069488 srt:MinimumMember us-gaap:SeniorNotesMember 2021-01-01 2021-03-31 0000069488 srt:MaximumMember us-gaap:SeniorNotesMember 2021-01-01 2021-03-31 0000069488 us-gaap:SeniorNotesMember 2021-03-31 0000069488 mye:FourPointSixSevenPercentSeniorUnsecuredNotesDueJanuaryFifteenTwentyTwentyOneMember 2021-01-01 2021-01-31 0000069488 us-gaap:PensionPlansDefinedBenefitMember 2021-01-01 2021-03-31 0000069488 us-gaap:PensionPlansDefinedBenefitMember 2020-01-01 2020-03-31 0000069488 us-gaap:StateAndLocalJurisdictionMember 2021-01-01 2021-03-31 0000069488 us-gaap:ForeignCountryMember 2021-01-01 2021-03-31 0000069488 srt:MinimumMember 2021-03-31 0000069488 srt:MaximumMember 2021-03-31 0000069488 us-gaap:InterestExpenseMember 2021-01-01 2021-03-31 mye:Segment 0000069488 us-gaap:NonUsMember 2021-01-01 2021-03-31 0000069488 us-gaap:NonUsMember 2020-01-01 2020-03-31 0000069488 us-gaap:CorporateNonSegmentMember 2021-01-01 2021-03-31 0000069488 us-gaap:CorporateNonSegmentMember 2020-01-01 2020-03-31 0000069488 us-gaap:EmployeeSeveranceMember 2021-03-31 0000069488 us-gaap:EmployeeSeveranceMember 2021-01-01 2021-03-31

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

Form 10-Q

 

Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended March 31, 2021

OR

 

Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from                      to                   

Commission File Number 1-8524

Myers Industries, Inc.

(Exact name of registrant as specified in its charter)

 

Ohio

34-0778636

(State or other jurisdiction of

(IRS Employer Identification

incorporation or organization)

Number)

 

 

1293 South Main Street

 

Akron, Ohio

44301

(Address of principal executive offices)

(Zip code)

 

(330) 253-5592

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class

 

Trading Symbol

 

Name of Exchange on Which Registered

Common Stock, without par value

 

MYE

 

New York Stock Exchange

 

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 such filing requirements for the past 90 days. Yes No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes No

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer 

Accelerated filer 

Non-Accelerated filer 

Smaller reporting company 

 

 

Emerging growth company 

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to section 13(a) of the Exchange Act. 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No .

 

The number of shares outstanding of the issuer’s common stock, without par value, as of April 30, 2021 was 36,086,375 shares.

 

 

 

 


 

 

TABLE OF CONTENTS

 

Part I — Financial Information

1

 

 

Item 1. Financial Statements

1

 

 

Condensed Consolidated Statements of Operations (Unaudited)

1

 

 

Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited)

2

 

 

Condensed Consolidated Statements of Financial Position (Unaudited)

3

 

 

Condensed Consolidated Statements of Shareholders’ Equity (Unaudited)

4

 

 

Condensed Consolidated Statements of Cash Flows (Unaudited)

5

 

 

Notes to Unaudited Condensed Consolidated Financial Statements

6

 

 

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

19

 

 

Item 3. Quantitative and Qualitative Disclosures About Market Risk

23

 

 

Item 4. Controls and Procedures

23

 

 

Part II — Other Information

24

 

 

Item 1. Legal Proceedings

24

 

 

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

24

 

 

Item 6. Exhibits

25

 

 

Signature

26

 

 

Exhibit 31.1

 

Exhibit 31.2

 

Exhibit 32.1

 

Exhibit 101

 

 

 

 

 


 

 

Part I — Financial Information

Item 1. Financial Statements

MYERS INDUSTRIES, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Operations (Unaudited)

(Dollars in thousands, except per share data)

 

 

 

For the Quarter Ended March 31,

 

 

 

2021

 

 

2020

 

Net sales

 

$

174,429

 

 

$

122,250

 

Cost of sales

 

 

124,016

 

 

 

79,767

 

Gross profit

 

 

50,413

 

 

 

42,483

 

Selling, general and administrative expenses

 

 

39,548

 

 

 

31,116

 

Gain on disposal of fixed assets

 

 

 

 

 

(7

)

Gain on sale of notes receivable

 

 

 

 

 

(11,924

)

Operating income

 

 

10,865

 

 

 

23,298

 

Interest expense, net

 

 

995

 

 

 

1,069

 

Income before income taxes

 

 

9,870

 

 

 

22,229

 

Income tax expense

 

 

2,565

 

 

 

5,503

 

Net income

 

$

7,305

 

 

$

16,726

 

Net income per common share:

 

 

 

 

 

 

 

 

Basic

 

$

0.20

 

 

$

0.47

 

Diluted

 

$

0.20

 

 

$

0.47

 

 

See notes to unaudited condensed consolidated financial statements.

 

1


 

 

 

MYERS INDUSTRIES, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited)

(Dollars in thousands)

 

 

 

For the Quarter Ended March 31,

 

 

 

2021

 

 

2020

 

Net income

 

$

7,305

 

 

$

16,726

 

Other comprehensive income (loss):

 

 

 

 

 

 

 

 

Foreign currency translation adjustment

 

 

411

 

 

 

(2,755

)

Total other comprehensive income (loss)

 

 

411

 

 

 

(2,755

)

Comprehensive income

 

$

7,716

 

 

$

13,971

 

 

See notes to unaudited condensed consolidated financial statements.

 

 

2


 

 

 

MYERS INDUSTRIES, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Financial Position (Unaudited)

(Dollars in thousands)

 

 

 

March 31,

 

 

December 31,

 

 

 

2021

 

 

2020

 

Assets

 

 

 

 

 

 

 

 

Current Assets

 

 

 

 

 

 

 

 

Cash

 

$

16,666

 

 

$

28,301

 

Accounts receivable, less allowances of $3,414 and $3,278, respectively

 

 

94,619

 

 

 

83,701

 

Income tax receivable

 

 

 

 

 

1,049

 

Inventories, net

 

 

69,848

 

 

 

65,919

 

Prepaid expenses and other current assets

 

 

9,614

 

 

 

4,760

 

Total Current Assets

 

 

190,747

 

 

 

183,730

 

Property, plant, and equipment, net

 

 

83,220

 

 

 

73,953

 

Right of use asset - operating leases

 

 

20,820

 

 

 

18,390

 

Goodwill

 

 

79,354

 

 

 

79,256

 

Intangible assets, net

 

 

39,844

 

 

 

41,038

 

Deferred income taxes

 

 

84

 

 

 

84

 

Other

 

 

6,212

 

 

 

3,564

 

Total Assets

 

$

420,281

 

 

$

400,015

 

 

 

 

 

 

 

 

 

 

Liabilities and Shareholders’ Equity

 

 

 

 

 

 

 

 

Current Liabilities

 

 

 

 

 

 

 

 

Accounts payable

 

$

69,933

 

 

$

61,150

 

Accrued employee compensation

 

 

15,589

 

 

 

14,499

 

Income taxes payable

 

 

2,954

 

 

 

 

Accrued taxes payable, other than income taxes

 

 

2,111

 

 

 

2,524

 

Accrued interest

 

 

476

 

 

 

1,785

 

Other current liabilities

 

 

17,871

 

 

 

17,936

 

Operating lease liability - short-term

 

 

4,269

 

 

 

4,359

 

Finance lease liability - short-term

 

 

487

 

 

 

 

Long-term debt - current portion

 

 

 

 

 

39,994

 

Total Current Liabilities

 

 

113,690

 

 

 

142,247

 

Long-term debt

 

 

70,928

 

 

 

37,582

 

Operating lease liability - long-term

 

 

16,300

 

 

 

13,755

 

Finance lease liability - long-term

 

 

9,812

 

 

 

 

Other liabilities

 

 

14,303

 

 

 

14,373

 

Deferred income taxes

 

 

995

 

 

 

2,958

 

 

 

 

 

 

 

 

 

 

Shareholders’ Equity

 

 

 

 

 

 

 

 

Serial Preferred Shares (authorized 1,000,000 shares; none issued and outstanding)

 

 

 

 

 

 

Common Shares, without par value (authorized 60,000,000 shares;

   outstanding 36,078,884 and 35,921,025; net of treasury shares

   of 6,473,573 and 6,631,432, respectively)

 

 

22,054

 

 

 

21,939

 

Additional paid-in capital

 

 

303,127

 

 

 

300,852

 

Accumulated other comprehensive loss

 

 

(15,362

)

 

 

(15,773

)

Retained deficit

 

 

(115,566

)

 

 

(117,918

)

Total Shareholders’ Equity

 

 

194,253

 

 

 

189,100

 

Total Liabilities and Shareholders’ Equity

 

$

420,281

 

 

$

400,015

 

 

See notes to unaudited condensed consolidated financial statements.

 

 

 

3


 

 

 

MYERS INDUSTRIES, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Shareholders’ Equity (Unaudited)

(Dollars in thousands, except per share data)

 

 

 

Quarter Ended March 31, 2021

 

 

 

Common Shares

 

 

Additional

Paid-In Capital

 

 

Accumulated

Other

Comprehensive

Income (Loss)

 

 

Retained

Deficit

 

 

Total

Shareholders'

Equity

 

Balance at January 1, 2021

 

$

21,939

 

 

$

300,852

 

 

$

(15,773

)

 

$

(117,918

)

 

$

189,100

 

Net income

 

 

 

 

 

 

 

 

 

 

 

7,305

 

 

 

7,305

 

Foreign currency translation

   adjustment

 

 

 

 

 

 

 

 

411

 

 

 

 

 

 

411

 

Shares issued under incentive plans,

   net of shares withheld for tax

 

 

115

 

 

 

1,122

 

 

 

 

 

 

 

 

 

1,237

 

Stock compensation expense

 

 

 

 

 

1,153

 

 

 

 

 

 

 

 

 

1,153

 

Declared dividends - $0.135 per share

 

 

 

 

 

 

 

 

 

 

 

(4,953

)

 

 

(4,953

)

Balance at March 31, 2021

 

$

22,054

 

 

$

303,127

 

 

$

(15,362

)

 

$

(115,566

)

 

$

194,253

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Quarter Ended March 31, 2020

 

 

 

Common Shares

 

 

Additional

Paid-In Capital

 

 

Accumulated

Other

Comprehensive

Income (Loss)

 

 

Retained

Deficit

 

 

Total

Shareholders'

Equity

 

Balance at January 1, 2020

 

$

21,785

 

 

$

296,363

 

 

$

(16,349

)

 

$

(135,117

)

 

$

166,682

 

Net income

 

 

 

 

 

 

 

 

 

 

 

16,726

 

 

 

16,726

 

Foreign currency translation

   adjustment

 

 

 

 

 

 

 

 

(2,755

)

 

 

 

 

 

(2,755

)

Shares issued under incentive plans,

   net of shares withheld for tax

 

 

43

 

 

 

(280

)

 

 

 

 

 

 

 

 

(237

)

Stock compensation expense

 

 

 

 

 

653

 

 

 

 

 

 

 

 

 

653

 

Declared dividends - $0.135 per share

 

 

 

 

 

 

 

 

 

 

 

(4,846

)

 

 

(4,846

)

Balance at March 31, 2020

 

$

21,828

 

 

$

296,736

 

 

$

(19,104

)

 

$

(123,237

)

 

$

176,223

 

 

See notes to unaudited condensed consolidated financial statements.

 


4


 

 

MYERS INDUSTRIES, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows (Unaudited)

(Dollars in thousands)

 

 

 

For the Quarter Ended March 31,

 

 

 

2021

 

 

2020

 

Cash Flows From Operating Activities

 

 

 

 

 

 

 

 

Net income

 

$

7,305

 

 

$

16,726

 

Adjustments to reconcile net income to net cash provided by (used for) operating activities

 

 

 

 

 

 

 

 

Depreciation

 

 

3,966

 

 

 

3,553

 

Amortization

 

 

1,295

 

 

 

2,271

 

Non-cash stock-based compensation expense

 

 

1,153

 

 

 

653

 

Gain on disposal of fixed assets

 

 

 

 

 

(7

)

Gain on sale of notes receivable

 

 

 

 

 

(11,924

)

Other

 

 

(1,288

)

 

 

241

 

Other long-term liabilities

 

 

8

 

 

 

(104

)

Cash flows provided by (used for) working capital

 

 

 

 

 

 

 

 

Accounts receivable

 

 

(10,901

)

 

 

(3,524

)

Inventories

 

 

(3,861

)

 

 

(5,209

)

Prepaid expenses and other current assets

 

 

(4,854

)

 

 

(218

)

Accounts payable and accrued expenses

 

 

13,765

 

 

 

2,569

 

Net cash provided by (used for) operating activities

 

 

6,588

 

 

 

5,027

 

Cash Flows From Investing Activities

 

 

 

 

 

 

 

 

Capital expenditures

 

 

(5,238

)

 

 

(2,490

)

Acquisition of business

 

 

(1,223

)

 

 

(691

)

Proceeds on sale of notes receivable

 

 

 

 

 

1,200

 

Net cash provided by (used for) investing activities

 

 

(6,461

)

 

 

(1,981

)

Cash Flows From Financing Activities

 

 

 

 

 

 

 

 

Net borrowings from revolving credit facility

 

 

33,000

 

 

 

 

Repayments of long-term debt

 

 

(40,000

)

 

 

 

Payments on finance lease

 

 

(40

)

 

 

 

Cash dividends paid

 

 

(4,906

)

 

 

(4,899

)

Proceeds from issuance of common stock

 

 

1,900

 

 

 

125

 

Shares withheld for employee taxes on equity awards

 

 

(663

)

 

 

(362

)

Deferred financing fees

 

 

(1,095

)

 

 

 

Net cash provided by (used for) financing activities

 

 

(11,804

)

 

 

(5,136

)

Foreign exchange rate effect on cash

 

 

42

 

 

 

(223

)

Net decrease in cash

 

 

(11,635

)

 

 

(2,313

)

Cash at January 1

 

 

28,301

 

 

 

75,527

 

Cash at March 31

 

$

16,666

 

 

$

73,214

 

 

See notes to unaudited condensed consolidated financial statements.

 

 

5


 

 

MYERS INDUSTRIES, INC. AND SUBSIDIARIES

Notes to Unaudited Condensed Consolidated Financial Statements

(Dollars in thousands, except where otherwise indicated)

 

1.  Summary of Significant Accounting Policies

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements include the accounts of Myers Industries, Inc. and all wholly owned subsidiaries (collectively, the “Company”), and have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) have been condensed or omitted pursuant to those rules and regulations, although the Company believes that the disclosures are adequate to make the information not misleading. These interim financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s annual report on Form 10-K for the year ended December 31, 2020.

In the opinion of the Company, the accompanying condensed consolidated financial statements contain all adjustments (consisting of normal recurring accruals) necessary to present fairly the financial position as of March 31, 2021, and the results of operations and cash flows for the periods presented. The results of operations for the quarter ended March 31, 2021 are not necessarily indicative of the results of operations that will occur for the year ending December 31, 2021.

Accounting Standards Adopted

In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. This ASU is intended to simplify the accounting for income taxes by removing certain exceptions to the general principles in Topic 740 and by clarifying and amending existing guidance to improve consistent application. Certain amendments within this ASU are required to be applied on a retrospective basis, certain other amendments are required to be applied on a modified retrospective basis and all other amendments on a prospective basis. The Company adopted this standard effective January 1, 2021 and the adoption of this standard did not have a material impact on its consolidated financial statements.

Fair Value Measurement

The Company follows guidance included in ASC 820, Fair Value Measurements and Disclosures, for its financial assets and liabilities, as required. Under ASC 820, the hierarchy that prioritizes the inputs to valuation techniques used to measure fair value is divided into three levels:

 

Level 1:

Unadjusted quoted prices in active markets for identical assets or liabilities.

 

Level 2:

Unadjusted quoted prices in active markets for similar assets or liabilities, unadjusted quoted prices for identical or similar assets or liabilities in markets that are not active or inputs that are observable either directly or indirectly.

 

Level 3:

Unobservable inputs for which there is little or no market data or which reflect the entity’s own assumptions.

The Company has financial instruments, including cash, accounts receivable, accounts payable and accrued expenses. The fair value of these financial instruments approximates carrying value due to the nature and relative short maturity of these assets and liabilities.

The fair value of debt under the Company’s Loan Agreement, as defined in Note 12, approximates carrying value due to the floating rates and relative short maturity (less than 90 days) of any revolving borrowings under this agreement. The fair value of the Company’s fixed rate senior unsecured notes was estimated using market observable inputs for the Company’s comparable peers with public debt, including quoted prices in active markets and interest rate measurements which are considered Level 2 inputs. At March 31, 2021 and December 31, 2020, the aggregate fair value of the Company's outstanding fixed rate senior unsecured notes was estimated to be $41.7 million and $80.9 million, respectively.

The purchase price allocation associated with the November 10, 2020 acquisition of Elkhart Plastics, Inc. (“Elkhart Plastics”), as described in Note 3, required fair value measurements using unobservable inputs which are considered Level 3 inputs. The fair value of the acquired intangible assets was determined using an income approach.

6


MYERS INDUSTRIES, INC. AND SUBSIDIARIES

Notes to Unaudited Condensed Consolidated Financial Statements – (Continued)

(Dollars in thousands, except where otherwise indicated)

 

 

Accumulated Other Comprehensive Income (Loss)

Changes in accumulated other comprehensive income (loss) are as follows:

 

 

 

Foreign

Currency

 

 

Defined Benefit

Pension Plans

 

 

Total

 

Balance at January 1, 2021

 

$

(13,974

)

 

$

(1,799

)

 

$

(15,773

)

Other comprehensive income (loss) before reclassifications

 

 

411

 

 

 

 

 

 

411

 

Net current-period other comprehensive income (loss)

 

 

411

 

 

 

 

 

 

411

 

Balance at March 31, 2021

 

$

(13,563

)

 

$

(1,799

)

 

$

(15,362

)

 

 

 

Foreign

Currency

 

 

Defined Benefit

Pension Plans

 

 

Total

 

Balance at January 1, 2020

 

$

(14,602

)

 

$

(1,747

)

 

$

(16,349

)

Other comprehensive income (loss) before reclassifications

 

 

(2,755

)

 

 

 

 

 

(2,755

)

Net current-period other comprehensive income (loss)

 

 

(2,755

)

 

 

 

 

 

(2,755

)

Balance at March 31, 2020

 

$

(17,357

)

 

$

(1,747

)

 

$

(19,104

)

 

Allowance for Credit Losses

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. The Company evaluates the collectability of accounts receivable based on a combination of factors. The Company reviews historical trends for credit loss as well as current economic conditions in determining an estimate for its allowance for credit losses. Additionally, in circumstances where the Company is aware of a specific customer’s inability to meet its financial obligations, a specific allowance for credit losses is recorded against amounts due to reduce the net recognized receivable to the amount the Company reasonably expects will be collected.

The changes in the allowance for credit losses for the quarter ended March 31, 2021 and 2020 were as follows:

 

 

 

2021

 

 

2020

 

Balance at January 1

 

$

2,335

 

 

$

1,356

 

Provision for expected credit loss, net of recoveries

 

 

58

 

 

 

148

 

Write-offs and other

 

 

(132

)

 

 

(231

)

Balance at March 31

 

$

2,261

 

 

$

1,273

 

 

2.  Revenue Recognition

The Company’s revenue by major market is as follows:

 

 

 

For the Quarter Ended March 31, 2021

 

 

 

Material

Handling

 

 

Distribution

 

 

Inter-company

 

 

Consolidated

 

Consumer

 

$

25,395

 

 

$

 

 

$

 

 

$

25,395

 

Vehicle

 

 

42,192

 

 

 

 

 

 

 

 

 

42,192

 

Food and beverage

 

 

21,417

 

 

 

 

 

 

 

 

 

21,417

 

Industrial

 

 

40,889

 

 

 

 

 

 

(14

)

 

 

40,875

 

Auto aftermarket

 

 

 

 

 

44,550

 

 

 

 

 

 

44,550

 

Total net sales

 

$

129,893

 

 

$

44,550

 

 

$

(14

)

 

$

174,429

 

 

7


MYERS INDUSTRIES, INC. AND SUBSIDIARIES

Notes to Unaudited Condensed Consolidated Financial Statements – (Continued)

(Dollars in thousands, except where otherwise indicated)

 

 

 

 

 

For the Quarter Ended March 31, 2020

 

 

 

Material

Handling

 

 

Distribution

 

 

Inter-company

 

 

Consolidated

 

Consumer

 

$

20,287

 

 

$

 

 

$

 

 

$

20,287

 

Vehicle

 

 

16,312

 

 

 

 

 

 

 

 

 

16,312

 

Food and beverage

 

 

17,419

 

 

 

 

 

 

 

 

 

17,419

 

Industrial

 

 

30,058

 

 

 

 

 

 

(21

)

 

 

30,037

 

Auto aftermarket

 

 

 

 

 

38,195

 

 

 

 

 

 

38,195

 

Total net sales

 

$

84,076

 

 

$

38,195

 

 

$

(21

)

 

$

122,250

 

 

Revenue is recognized when obligations under the terms of a contract with customers are satisfied. In both the Distribution and Material Handling segments, this generally occurs with the transfer of control of the products.  This transfer of control may occur at either the time of shipment from a Company facility, or at the time of delivery to a designated customer location. Obligations under contracts with customers are typically fulfilled within 90 days of receiving a purchase order from a customer, and generally no other future obligations are required to be performed.  The Company generally does not enter into any long-term contracts with customers greater than one year.  Based on the nature of the Company’s products and customer contracts, no deferred revenue has been recorded, with the exception of cash advances or deposits received from customers prior to transfer of control of the product. These advances are typically fulfilled within the 90-day time frame mentioned above.

Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring the products.  Certain contracts with customers include variable consideration, such as rebates or discounts.  The Company recognizes estimates of this variable consideration each period, primarily based on the most likely level of consideration to be paid to the customer under the specific terms of the underlying programs.  While the Company’s contracts with customers do not generally include explicit rights to return product, the Company will in practice allow returns in the normal course of business and as part of the customer relationship.  Expected returns allowances are recognized each period based on an analysis of historical experience, and when physical recovery of the product from returns occurs, an estimated right to return asset is also recorded based on the approximate cost of the product.

Amounts included in the Condensed Consolidated Statements of Financial Position (Unaudited) related to revenue recognition include:

 

 

 

March 31,

 

 

December 31,

 

 

Statement of Financial

Position

 

 

2021

 

 

2020

 

 

Classification

Returns, discounts and other allowances

 

$

(1,153

)

 

$

(943

)

 

Accounts receivable

Right of return asset

 

$

374

 

 

$

357

 

 

Inventories, net

Customer deposits

 

$

(1,119

)

 

$

(195

)

 

Other current liabilities

Accrued rebates

 

$

(2,549

)

 

$

(2,712

)

 

Other current liabilities

 

Sales, value added, and other taxes collected with revenue from customers are excluded from net sales.  The cost for shipments to customers is recognized when control over products has transferred to the customer and is classified as Selling, General and Administrative expenses for the Company’s manufacturing business and as Cost of Sales for the Company’s distribution business. Costs for shipments to customers in Selling, General and Administrative expenses were approximately $2.5 million and $1.7 million for the quarters ended March 31, 2021 and 2020, respectively, and in Cost of Sales were approximately $1.6 million and $1.4 million for the quarters ended March 31, 2021 and 2020, respectively.

Based on the short-term nature of contracts described above, contract acquisition costs are not significant. These costs, as well as other incidental items that are immaterial in the context of the contract, are recognized as expense as incurred.

8


MYERS INDUSTRIES, INC. AND SUBSIDIARIES

Notes to Unaudited Condensed Consolidated Financial Statements – (Continued)

(Dollars in thousands, except where otherwise indicated)

 

 

3.  Acquisitions

Elkhart Plastics

On November 10, 2020, the Company acquired the assets of Elkhart Plastics, a manufacturer of engineered products for the RV, marine, agricultural, construction, truck and other industries, which is included in the Company’s Material Handling Segment. The Elkhart Plastics acquisition aligns with the Company’s long-term strategic plan to transform the Company into a high-growth, customer-centric innovator of value-added engineered plastic solutions. The purchase price for the acquisition was $64.0 million, including a preliminary estimated working capital adjustment of $1.4 million, of which $1.2 million was settled in March 2021, and the remainder remains subject to further adjustment based on the final working capital. The Company funded the acquisition using available cash.

The acquisition of Elkhart Plastics was accounted for using the acquisition method, whereby all of the assets acquired and liabilities assumed were recognized at their fair value on the acquisition date, with any excess of the purchase price over the estimated fair value recorded as goodwill. The following table summarized the allocation of the purchase price based on the estimated fair value of assets acquired and liabilities assumed based on their preliminary estimated fair values at the acquisition date, which are subject to adjustment. The purchase accounting will be finalized within one year from the acquisition date.

 

Assets acquired:

 

 

 

Accounts receivable

$

12,026

 

Inventories

 

13,639

 

Prepaid expenses

 

960

 

Other assets - long term

 

34

 

Property, plant and equipment

 

18,038

 

Right of use asset - operating leases

 

13,757

 

Intangible assets

 

16,627

 

Goodwill

 

12,277

 

Assets acquired

$

87,358

 

 

 

 

 

Liabilities assumed:

 

 

 

Accounts payable

$

5,603

 

Accrued expenses

 

4,480

 

Operating lease liability - short term

 

2,390

 

Operating lease liability - long term

 

10,867

 

Total liabilities assumed

 

23,340

 

 

 

 

 

Net acquisition cost

$

64,018

 

 

The goodwill represents the future economic benefits arising from other assets acquired that could not be individually and separately recognized, and the Company expects that the goodwill recognized for the acquisition will be deductible for tax purposes.

The intangible assets included above consist of the following:

 

 

Fair Value

 

 

Weighted Average

Estimated

Useful Life

Customer relationships

 

$

10,210

 

 

18.0 years

Trade name

 

 

5,817

 

 

10.0 years

Non-competition agreements

 

 

600

 

 

5.0 years

Total amortizable intangible assets

 

$

16,627

 

 

 

9


MYERS INDUSTRIES, INC. AND SUBSIDIARIES

Notes to Unaudited Condensed Consolidated Financial Statements – (Continued)

(Dollars in thousands, except where otherwise indicated)

 

 

 

Tuffy

On August 26, 2019, the Company acquired the assets of Tuffy Manufacturing Industries, Inc. (“Tuffy”), a warehouse distributor of tire repair equipment and supplies, which is included in the Distribution Segment. The Tuffy acquisition aligns with the Company’s strategy to grow in key niche markets and focus on strategic account customers. The purchase price for the acquisition was $18.7 million, including a working capital adjustment of $0.7 million that was paid in 2020. The Company funded the acquisition using available cash.

4.  Settlement of Note Receivable and Lease Guarantee

In 2015, the Company sold its Lawn and Garden business to an entity controlled by Wingate Partners V, L.P. (“L&G Buyer”), which later became HC Companies, Inc. (“HC”). The terms of the sale included promissory notes from HC. Due to uncertainty of collection, a provision for expected loss of $23.0 million was recorded within continuing operations during 2018 to fully impair the notes and corresponding interest receivable.  

Also, in connection with the sale of the Lawn and Garden business, the Company became a guarantor for any remaining rent payments under one of HC’s facility leases expiring in September 2025. Annual rent for the facility was approximately $2 million. Due to the financial risk associated with HC, the Company assessed its range of potential obligations under the lease guarantee, and recorded a liability and related pre-tax charge of $10.3 million during 2018. The carrying value of the lease contingency as of December 31, 2019 was $10.7 million, which represented the initial liability recorded plus accretion.

In January 2020, the Company sold to HC the fully-reserved promissory notes and related accrued interest receivable in exchange for $1.2 million and the release from the lease guarantee resulting in an $11.9 million pre-tax gain.

5.  Restructuring

In March 2019, the Company committed to implementing a restructuring plan involving its Ameri-Kart Corp. subsidiary (“Ameri-Kart”) that operates a rotational molding business within the Material Handling Segment. The Company plans to consolidate manufacturing operations currently conducted at Ameri-Kart’s Cassopolis, Michigan and Bristol, Indiana facilities with expanded operations in a new facility in Bristol, Indiana (the “Ameri-Kart Plan”). In December 2019, as amended in March 2021, Ameri-Kart entered into a lease agreement for a newly constructed manufacturing and distribution facility in Bristol, Indiana. The building became substantially complete in March 2021 as defined in the lease agreement, and the 15-year finance lease of the new Bristol facility commenced. In connection with the lease agreement, Ameri-Kart agreed to sell its original Bristol facility for $3.0 million and lease it back for a period of 5 years. At March 31, 2021, this sale-leaseback transaction had not yet closed. At March 31, 2021 and December 31, 2020, the $1.9 million carrying value of the original Bristol facility was classified as held for sale and included in Other Assets pending closing of the sale transaction. While Ameri-Kart has taken possession of the new Bristol facility, construction remains in process as of March 31, 2021 to complete it for its intended use. In December 2020, Ameri-Kart also provided one-year advance notice of termination for the lease of its Cassopolis, Michigan facility.

The Ameri-Kart Plan is expected to be substantially completed in 2021 and total restructuring costs expected to be incurred are approximately $1.3 million, primarily related to equipment relocation and facility shut down costs. No restructuring charges were incurred during the quarters ended March 31, 2021 or 2020.

6.  Inventories

Inventories are valued at the lower of cost or market for last-in, first-out (“LIFO”) inventory and lower of cost or net realizable value for first-in, first-out (“FIFO”) inventory. Approximately 40 percent of inventories are valued using the LIFO method of determining cost. All other inventories are valued using the FIFO method of determining cost. An actual valuation of inventory under the LIFO method can be made only at the end of each year based on inventory levels and costs at that time. Accordingly, interim LIFO calculations must be based on management’s estimates of expected year-end inventory levels and costs. Because these calculations are subject to many factors beyond management’s control, annual results may differ from interim results as they are subject to the final year-end LIFO inventory valuation. Based on management’s projections of inventory levels and costs, no adjustment to the LIFO reserve was recorded for the quarters ended March 31, 2021 or 2020.

 

10


MYERS INDUSTRIES, INC. AND SUBSIDIARIES

Notes to Unaudited Condensed Consolidated Financial Statements – (Continued)

(Dollars in thousands, except where otherwise indicated)

 

 

 

Inventories consisted of the following:

 

 

 

March 31,

 

 

December 31,

 

 

 

2021

 

 

2020

 

Finished and in-process products

 

$

43,458

 

 

$

42,304

 

Raw materials and supplies

 

 

26,390

 

 

 

23,615

 

 

 

$

69,848

 

 

$

65,919

 

 

7.  Other Liabilities

The balance in Other Current Liabilities is comprised of the following:

 

 

 

March 31,

 

 

December 31,

 

 

 

2021

 

 

2020

 

Customer deposits and accrued rebates

 

$

3,668

 

 

$

2,907

 

Dividends payable

 

 

5,299

 

 

 

5,251

 

Accrued litigation, claims and professional fees

 

 

1,001

 

 

 

306

 

Current portion of environmental reserves

 

 

1,428

 

 

 

1,433

 

Other accrued expenses

 

 

6,475

 

 

 

8,039

 

 

 

$

17,871

 

 

$

17,936

 

 

 

The balance in Other Liabilities (long-term) is comprised of the following:

 

 

 

March 31,

 

 

December 31,

 

 

 

2021

 

 

2020

 

Environmental reserves

 

$

7,388

 

 

$

7,266

 

Supplemental executive retirement plan liability

 

 

1,423

 

 

 

1,510

 

Pension liability

 

 

931

 

 

 

941

 

Other long-term liabilities

 

 

4,561

 

 

 

4,656

 

 

 

$

14,303

 

 

$

14,373

 

 

8.  Goodwill and Intangible Assets

The change in goodwill for the quarter ended March 31, 2021 was as follows:

 

 

 

Distribution

 

 

Material

Handling

 

 

Total

 

January 1, 2021

 

$

7,648

 

 

$

71,608

 

 

$

79,256

 

Purchase accounting adjustment

 

 

 

 

 

(35

)

 

 

(35

)

Foreign currency translation

 

 

 

 

 

133

 

 

 

133

 

March 31, 2021

 

$

7,648

 

 

$

71,706

 

 

$

79,354

 

 

Intangible assets other than goodwill primarily consist of trade names, customer relationships, patents, non-competition agreements and technology assets established in connection with acquisitions. These intangible assets, other than certain trade names, are amortized over their estimated useful lives. Indefinite-lived trade names had a carrying value of $9.8 million at both March 31, 2021 and December 31, 2020. Refer to Note 3 for the intangible assets acquired through the Elkhart Plastics acquisition in November 2020.

11


MYERS INDUSTRIES, INC. AND SUBSIDIARIES

Notes to Unaudited Condensed Consolidated Financial Statements – (Continued)

(Dollars in thousands, except where otherwise indicated)

 

 

9.  Net Income per Common Share

Net income per common share, as shown on the accompanying Condensed Consolidated Statements of Operations (Unaudited), is determined on the basis of the weighted average number of common shares outstanding during the periods as follows:

 

 

 

For the Quarter Ended March 31,

 

 

 

2021

 

 

2020

 

Weighted average common shares outstanding basic

 

 

35,993,331

 

 

 

35,723,979

 

Dilutive effect of stock options and restricted stock

 

 

297,500

 

 

 

104,449

 

Weighted average common shares outstanding diluted

 

 

36,290,831

 

 

 

35,828,428

 

 

There were no options to purchase shares of common stock excluded from the computation of diluted earnings for the quarter ended March 31, 2021. Options to purchase 401,197 shares of common stock that were outstanding for the quarter ended March 31, 2020 were not included in the computation of diluted earnings per share as the exercise prices of these options were greater than the average market price of common shares, and were therefore anti-dilutive.

10.  Stock Compensation

The Company’s Amended and Restated 2017 Incentive Stock Plan (the “2017 Plan”) authorizes the Compensation and Management Development Committee of the Board of Directors (“Compensation Committee”) to issue up to 5,126,950 shares of various stock awards including stock options, performance stock units, restricted stock units and other forms of equity-based awards to key employees and directors. No new awards may be issued under the 2017 Plan after April 29, 2021. Options granted and outstanding vest over the requisite service period and expire ten years from the date of grant.

The Company’s 2021 Long-Term Incentive Plan (the “2021 Plan”) was adopted by the Board of Directors on March 4, 2021, amended by the Board of Directors on April 20, 2021, and approved by shareholders in the annual shareholder meeting on April 29, 2021. The 2021 Plan authorizes the Compensation Committee to issue up to 2,000,000 additional various stock awards including stock options, performance stock units, restricted stock units and other forms of equity-based awards.

Stock compensation expense was approximately $1.2 million and $0.7 million for the quarters ended March 31, 2021 and 2020, respectively. These expenses are included in Selling, General and Administrative expenses. Total unrecognized compensation cost related to non-vested stock-based compensation arrangements at March 31, 2021 was approximately $7.7 million, which will be recognized over the next three years, as such compensation is earned.

11.  Contingencies

The Company is a defendant in various lawsuits and a party to various other legal proceedings arising in the ordinary course of business, some of which are covered in whole or in part by insurance. When a loss arising from these matters is probable and can reasonably be estimated, the most likely amount of the estimated probable loss is recorded, or if a range of probable loss can be estimated and no amount within the range is a better estimate than any other amount, the minimum amount in the range is recorded. As additional information becomes available, any potential liability related to these matters is assessed and the estimates are revised, if necessary.

Based on current available information, management believes that the ultimate outcome of these matters, including those described below, will not have a material adverse effect on our financial position, cash flows or overall trends in our results of operations. However, these matters are subject to inherent uncertainties, and unfavorable rulings could occur. If an unfavorable ruling were to occur, there exists the possibility of a material adverse impact on the financial position and results of operations of the period in which the ruling occurs, or in future periods.

12


MYERS INDUSTRIES, INC. AND SUBSIDIARIES

Notes to Unaudited Condensed Consolidated Financial Statements – (Continued)

(Dollars in thousands, except where otherwise indicated)

 

 

New Idria Mercury Mine

In September 2015, the U.S. Environmental Protection Agency (“EPA”) informed a subsidiary of the Company, Buckhorn, Inc. (“Buckhorn”) via a notice letter and related documents (the “Notice Letter”) that it considers Buckhorn to be a potentially responsible party (“PRP”) in connection with the New Idria Mercury Mine site (“New Idria Mine”).  New Idria Mining & Chemical Company (“NIMCC”), which owned and/or operated the New Idria Mine through 1976, was merged into Buckhorn Metal Products Inc. in 1981, which was subsequently acquired by Myers Industries, Inc. in 1987.  As a result of the EPA Notice Letter, Buckhorn and the Company engaged in negotiations with the EPA with respect to a draft Administrative Order of Consent (“AOC”) proposed by the EPA for the Remedial Investigation/Feasibility Study (“RI/FS”) to determine the extent of remediation necessary and the screening of alternatives.

During the fourth quarter of 2018, the Company and the EPA finalized the AOC and related Statement of Work (“SOW”) with regards to the New Idria Mine. The AOC is effective as of November 27, 2018, the date that it was executed by the EPA. The AOC and accompanying SOW document the terms, conditions and procedures for the Company’s performance of the RI/FS. In addition, the AOC required the Company to provide $2 million of financial assurance to the EPA to secure its performance during the estimated life of the RI/FS.  In January 2019, the Company provided a letter of credit to satisfy this assurance requirement. The AOC also includes provisions for payment by the Company of the EPA’s costs of oversight of the RI/FS, including a prepayment in the amount of $0.2 million, which was paid in January 2019.

A draft work plan for the RI/FS, in accordance with the AOC and related SOW, was submitted to the EPA for review and approval in July 2019. Upon preparation of the draft work plan for the RI/FS, the Company received preliminary estimates from its consultants for the cost of the execution of the work plan. Based on these preliminary estimates, the Company recognized additional expense of $4.0 million during the second quarter of 2019.  These preliminary estimates will continue to be refined through the finalization and approval of the draft work plan, which is anticipated to occur in 2021. The Company believes it has insurance coverage that applies to the New Idria Mine and thus may be able to recover a portion of the estimated costs; however, as of March 31, 2021, the Company has not recognized potential recovery in its condensed consolidated financial statements.  

As part of the Notice Letter, the EPA also made a claim for approximately $1.6 million in past costs for actions it claims it has taken in connection with the New Idria Mine from 1993 through February 2014. While the Company is evaluating this past cost claim and may challenge portions of it, in 2015 the Company recognized an expense of $1.3 million related to the claim. In December 2020, the EPA updated its claim to include past costs incurred from March 2014 through June 2020. As a result, the Company recognized additional expense of $0.5 million during the fourth quarter of 2020.

Since October 2011, when New Idria was added to the Superfund National Priorities List by the EPA, the Company has recognized $10.4 million of costs, of which approximately $3.1 million has been paid through March 31, 2021. These costs are comprised primarily of estimates to perform the RI/FS, negotiation of the AOC, identification of possible insurance resources and other PRPs, EPA oversight fees, past cost claims made by the EPA, periodic monitoring, and responses to unilateral administrative orders issued by the EPA. No expenses were recorded related to the New Idria Mine in the quarters ended March 31, 2021 and 2020. As of March 31, 2021, the Company has a total reserve of $7.3 million related to the New Idria Mine, of which $1.1 million is classified in Other Current Liabilities and $6.2 million in Other Liabilities (long-term).

It is possible that adjustments to the aforementioned reserves will be necessary as new information is obtained, including after finalization and EPA approval of the work plan for the RI/FS. Estimates of the Company’s liability are based on current facts, laws, regulations and technology. Estimates of the Company’s environmental liabilities are further subject to uncertainties regarding the nature and extent of site contamination, the range of remediation alternatives available, evolving remediation standards, imprecise engineering evaluation and cost estimates, the extent of remedial actions that may be required, the extent of oversight by the EPA and the number and financial condition of other PRPs that may be named, as well as the extent of their responsibility for the remediation.

At this time, we have not accrued for remediation costs in connection with this site as we are unable to estimate the liability, given the circumstances referred to above, including the fact that the final remediation strategy has not yet been determined.

13


MYERS INDUSTRIES, INC. AND SUBSIDIARIES

Notes to Unaudited Condensed Consolidated Financial Statements – (Continued)

(Dollars in thousands, except where otherwise indicated)

 

 

New Almaden Mine

A number of parties, including the Company and its subsidiary, Buckhorn (as successor to NIMCC), were alleged by trustee agencies of the United States and the State of California to be responsible for natural resource damages due to environmental contamination of areas comprising the historical New Almaden mercury mines located in the Guadalupe River Watershed region in Santa Clara County, California (“County”). In 2005, Buckhorn and the Company, without admitting liability or chain of ownership of NIMCC, resolved the trustees’ claim against them through a consent decree that required them to contribute financially to the implementation by the County of an environmentally beneficial project within the impacted area.  Buckhorn and the Company negotiated an agreement with the County, whereby Buckhorn and the Company agreed to reimburse one-half of the County’s costs of implementing the project. The latest estimates received in 2016 from the County provided for an expanded scope and revised the estimate of costs for implementing the project to between $3.3 million and $4.4 million. The Company completed a detailed review of the support provided by the County for the revised estimate, and as a result, recognized additional expense of $1.2 million in 2016.  No costs were incurred related to New Almaden in the quarters ended March 31, 2021 or 2020. As of March 31, 2021, the Company has a total reserve of $1.5 million related to the New Almaden Mine, of which $0.3 million is classified in Other Current Liabilities and $1.2 million in Other Liabilities (long-term).

The project has not yet been implemented though significant work on design and planning has been performed. The Company is currently awaiting notice from Santa Clara County on the expected timing of fieldwork to commence.  As work on the project occurs, it is possible that adjustments to the aforementioned reserves will be necessary to reflect new information.  In addition, the Company may have claims against and defenses to claims by the County under the 2005 agreement that could reduce or offset its obligation for reimbursement of some of these potential additional costs. With the assistance of environmental consultants, the Company will closely monitor this matter and will continue to assess its reserves as additional information becomes available.

Patent Infringement

On December 11, 2018, No Spill Inc. filed suit against Scepter Manufacturing LLC and Scepter Corporation in the United States District Court for the District of Kansas asserting infringement of two patents, breach of contract, and trade dress claims in relation to plastic gasoline containers Scepter manufactures and sells in the United States. Scepter Canada, Inc. was later added in a second amended complaint. On November 15, 2019 the court dismissed Scepter Corporation from the action. While a full schedule through trial in the case has not yet been issued, a claim construction hearing is scheduled for May 13th, 2021. The Scepter companies intend to defend themselves vigorously in this matter. On December 28, 2019, Scepter Canada, Inc. filed petitions for inter partes review (“IPR”) of the two patents asserted by No Spill, Inc. in the District of Kansas litigation. The U.S. Patent & Trademark Office (“USPTO”) instituted one IPR and denied the other. For the instituted IPR, a final decision on the validity of the patent is expected by July 2021. Due to the inherent uncertainties of litigation, the Company cannot accurately predict the ultimate outcome of this matter, and is unable at this time to determine whether the outcome of the litigation will have a material impact on its results of operations, financial condition, or cash flows. Accordingly, the Company has not recorded any reserves for this matter.

12.  Long-Term Debt and Loan Agreements

Long-term debt consisted of the following:

 

 

 

March 31,

 

 

December 31,

 

 

 

2021

 

 

2020

 

Loan Agreement

 

$

33,000

 

 

$

 

4.67% Senior Unsecured Notes due January 15, 2021

 

 

 

 

 

40,000

 

5.25% Senior Unsecured Notes due January 15, 2024

 

 

11,000

 

 

 

11,000

 

5.30% Senior Unsecured Notes due January 15, 2024

 

 

15,000

 

 

 

15,000