MYERS INDUSTRIES INC, 10-K filed on 3/8/2019
Annual Report
v3.10.0.1
Document and Entity Information - USD ($)
12 Months Ended
Dec. 31, 2018
Feb. 28, 2019
Jun. 29, 2018
Document And Entity Information [Abstract]      
Entity Registrant Name MYERS INDUSTRIES INC    
Entity Central Index Key 0000069488    
Document Type 10-K    
Document Period End Date Dec. 31, 2018    
Amendment Flag false    
Document Fiscal Year Focus 2018    
Document Fiscal Period Focus FY    
Current Fiscal Year End Date --12-31    
Entity Well-known Seasoned Issuer No    
Entity Voluntary Filers No    
Entity Current Reporting Status Yes    
Entity Filer Category Accelerated Filer    
Entity Shell Company false    
Entity Small Business false    
Entity Emerging Growth Company false    
Entity Public Float     $ 453,079,680
Entity Common Stock, Shares Outstanding   35,376,498  
v3.10.0.1
Consolidated Statements of Operations - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2018
Dec. 31, 2017
Dec. 31, 2016
Income Statement [Abstract]      
Net sales $ 566,735 $ 547,043 $ 534,379
Cost of sales 387,442 389,590 372,481
Gross profit 179,293 157,453 161,898
Selling expenses 59,503 56,614 58,782
General and administrative expenses 79,832 78,889 73,797
Operating expenses excluding impairment charges 139,335 135,503 132,579
(Gain) loss on disposal of fixed assets (8) (3,482) 628
Impairment charges 308 544 1,329
Other expenses 33,331    
Operating income 6,327 24,888 27,362
Interest      
Income (1,221) (1,361) (1,262)
Expense 6,159 8,653 9,905
Interest expense, net 4,938 7,292 8,643
Loss on extinguishment of debt 0 1,888 0
Income from continuing operations before income taxes 1,389 15,708 18,719
Income tax expense 3,037 4,864 7,395
Income (loss) from continuing operations (1,648) 10,844 11,324
Income (loss) from discontinued operations, net of income tax (1,701) (20,733) (10,267)
Net income (loss) $ (3,349) $ (9,889) $ 1,057
Income (loss) per common share from continuing operations:      
Basic $ (0.05) $ 0.36 $ 0.38
Diluted (0.05) 0.35 0.38
Income (loss) per common share from discontinued operations:      
Basic (0.05) (0.69) (0.35)
Diluted (0.05) (0.68) (0.35)
Net income (loss) per common share:      
Basic (0.10) (0.33) 0.03
Diluted (0.10) (0.33) 0.03
Dividends declared per share $ 0.54 $ 0.54 $ 0.54
v3.10.0.1
Consolidated Statements of Comprehensive Income (Loss) - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2018
Dec. 31, 2017
Dec. 31, 2016
Statement Of Income And Comprehensive Income [Abstract]      
Net income (loss) $ (3,349) $ (9,889) $ 1,057
Other comprehensive income (loss)      
Adoption of ASU 2018-02 (315)    
Foreign currency translation adjustment (3,501) 2,391 5,105
Reclassification adjustment for foreign currency translation included in net income (loss)   17,201  
Pension liability, net of tax expense (benefit) of $25 in 2018, $14 in 2017, and ($95) in 2016 77 41 (169)
Total other comprehensive income (loss) (3,739) 19,633 4,936
Comprehensive income (loss) $ (7,088) $ 9,744 $ 5,993
v3.10.0.1
Consolidated Statements of Comprehensive Income (Loss) (Parenthetical) - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2018
Dec. 31, 2017
Dec. 31, 2016
Statement Of Income And Comprehensive Income [Abstract]      
Tax expense (benefit) on pension liability $ 25 $ 14 $ (95)
v3.10.0.1
Consolidated Statements of Financial Position - USD ($)
$ in Thousands
Dec. 31, 2018
Dec. 31, 2017
Current Assets    
Cash $ 58,894 $ 2,520
Restricted cash 0 8,659
Accounts receivable, less allowances of $2,259 and $1,777, respectively 72,939 76,650
Income tax receivable 4,892 12,954
Inventories, net 43,596 47,025
Prepaid expenses and other current assets 2,534 2,204
Total Current Assets 182,855 150,012
Other Assets    
Property, plant, and equipment, net 65,460 83,904
Goodwill 59,068 59,971
Intangible assets, net 30,280 39,049
Deferred income taxes 5,270 120
Notes receivable 0 18,737
Other 5,712 4,149
Total Assets 348,645 355,942
Current Liabilities    
Accounts payable 60,849 63,581
Accrued expenses    
Employee compensation 16,531 15,544
Taxes, other than income taxes 1,403 1,664
Accrued interest 1,939 2,392
Other current liabilities 16,701 15,472
Total Current Liabilities 97,423 98,653
Long-term debt 76,790 151,036
Other liabilities 19,794 8,236
Deferred income taxes 0 4,265
Shareholders’ Equity    
Serial Preferred Shares (authorized 1,000,000 shares; none issued and outstanding) 0 0
Common Shares, without par value (authorized 60,000,000 shares; outstanding 35,374,121 and 30,495,737; net of treasury shares of 7,178,336 and 7,456,720, respectively) 21,547 18,547
Additional paid-in capital 292,558 209,253
Accumulated other comprehensive loss (18,280) (14,541)
Retained deficit (141,187) (119,507)
Total Shareholders’ Equity 154,638 93,752
Total Liabilities and Shareholders’ Equity $ 348,645 $ 355,942
v3.10.0.1
Consolidated Statements of Financial Position (Parenthetical) - USD ($)
$ in Thousands
Dec. 31, 2018
Dec. 31, 2017
Current Assets    
Allowance for Doubtful Accounts Receivable, Current $ 2,259 $ 1,777
Shareholders’ Equity    
Preferred Shares, shares authorized (in shares) 1,000,000 1,000,000
Preferred Shares, shares issued (in shares) 0 0
Preferred Shares, shares outstanding (in shares) 0 0
Common Shares, shares authorized (in shares) 60,000,000 60,000,000
Common Shares, shares outstanding (in shares) 35,374,121 30,495,737
Common shares, treasury (in shares) 7,178,336 7,456,720
v3.10.0.1
Consolidated Statements of Shareholders' Equity - USD ($)
$ in Thousands
Total
Common Shares [Member]
Additional Paid-In Capital [Member]
Accumulated Other Comprehensive Income (Loss) [Member]
Retained Deficit [Member]
Beginning balance at Dec. 31, 2015 $ 97,703 $ 17,895 $ 196,743 $ (39,110) $ (77,825)
Beginning balance, shares at Dec. 31, 2015   29,521,566      
Stockholders' Equity [Roll Forward]          
Net income (loss) 1,057 $ 0 0 0 1,057
Issuances under option plans $ 3,235 $ 205 3,030 0 0
Issuances under option plans, shares 334,836 374,958      
Dividend reinvestment plan $ 139 $ 6 133 0 0
Dividend reinvestment plan, shares   10,520      
Restricted stock vested 0 $ 104 (104) 0 0
Restricted stock vested, shares   169,929      
Stock compensation expense 3,357 $ 24 3,333 0 0
Tax benefit from options 64 0 64 0 0
Foreign currency translation adjustment 5,105 0 0 5,105 0
Shares withheld for employee taxes on equity awards (1,166) $ 0 (1,166) 0 0
Shares withheld for employee taxes on equity awards, shares   (57,412)      
Declared dividends (16,292) $ 0 0 0 (16,292)
Pension liability, net of tax (169) 0 0 (169) 0
Ending balance at Dec. 31, 2016 93,033 $ 18,234 202,033 (34,174) (93,060)
Ending balance, shares at Dec. 31, 2016   30,019,561      
Stockholders' Equity [Roll Forward]          
Net income (loss) (9,889) $ 0 0 0 (9,889)
Issuances under option plans $ 4,396 $ 229 4,167 0 0
Issuances under option plans, shares 375,292 375,292      
Dividend reinvestment plan $ 131 $ 5 126 0 0
Dividend reinvestment plan, shares   7,625      
Restricted stock vested 0 $ 79 (79) 0 0
Restricted stock vested, shares   130,036      
Stock compensation expense 3,626 $ 0 3,626 0 0
Foreign currency translation adjustment 2,391 0 0 2,391 0
Shares withheld for employee taxes on equity awards (620) $ 0 (620) 0 0
Shares withheld for employee taxes on equity awards, shares   (36,777)      
Declared dividends (16,558) $ 0 0 0 (16,558)
Pension liability, net of tax 41 0 0 41 0
Reclassification adjustment for foreign currency translation included in net income (loss) 17,201 0 0 17,201 0
Ending balance at Dec. 31, 2017 $ 93,752 $ 18,547 209,253 (14,541) (119,507)
Ending balance, shares at Dec. 31, 2017 30,495,737 30,495,737      
Stockholders' Equity [Roll Forward]          
Net income (loss) $ (3,349) $ 0 0 0 (3,349)
Issuances under option plans $ 2,735 $ 117 2,618 0 0
Issuances under option plans, shares 191,169 191,169      
Dividend reinvestment plan $ 118 $ 4 114 0 0
Dividend reinvestment plan, shares   5,712      
Restricted stock vested 0 $ 73 (73) 0 0
Restricted stock vested, shares   120,142      
Stock compensation expense 4,644 $ 0 4,644 0 0
Foreign currency translation adjustment (3,501) 0 0 (3,501) 0
Shares withheld for employee taxes on equity awards (714) $ 0 (714) 0 0
Shares withheld for employee taxes on equity awards, shares   (38,639)      
Declared dividends (18,646) $ 0 0 0 (18,646)
Pension liability, net of tax 77 0 0 77 0
Shares issued in public offering, net of equity issuance costs 79,522 $ 2,806 76,716 0 0
Shares issued in public offering, net of equity issuance costs, shares   4,600,000      
Ending balance at Dec. 31, 2018 $ 154,638 $ 21,547 292,558 (18,280) (141,187)
Ending balance, shares at Dec. 31, 2018 35,374,121 35,374,121      
Stockholders' Equity [Roll Forward]          
Adoption of ASU 2018-02 $ 0 $ 0 $ 0 $ (315) $ 315
v3.10.0.1
Consolidated Statement of Shareholders' Equity (Parenthetical) - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2018
Dec. 31, 2017
Dec. 31, 2016
Dividends declared per share (in dollars per share) $ 0.54 $ 0.54 $ 0.54
Tax expense (benefit) on pension liability $ 25 $ 14 $ (95)
Retained Deficit [Member]      
Dividends declared per share (in dollars per share) $ 0.54 $ 0.54 $ 0.54
Accumulated Other Comprehensive Income (Loss) [Member]      
Tax expense (benefit) on pension liability $ 25 $ 14 $ 95
v3.10.0.1
Consolidated Statements of Cash Flows - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2018
Dec. 31, 2017
Dec. 31, 2016
Cash Flows From Operating Activities      
Net income (loss) $ (3,349) $ (9,889) $ 1,057
Income (loss) from discontinued operations, net of income taxes (1,701) (20,733) (10,267)
Income (loss) from continuing operations (1,648) 10,844 11,324
Adjustments to reconcile income (loss) from continuing operations to net cash provided by (used for) operating activities      
Depreciation 17,638 19,952 22,049
Amortization 8,485 8,886 9,743
Accelerated depreciation associated with restructuring activities 16 1,993 0
Non-cash stock-based compensation expense 4,257 3,626 3,357
(Gain) loss on disposal of fixed assets (8) (3,482) 628
Provision for loss on note receivable 23,008 0 0
Lease guarantee contingency 10,323 0 0
Loss on extinguishment of debt 0 1,888 0
Deferred taxes (9,450) (5,663) 555
Interest income received (accrued) on note receivable (361) (1,384) (1,276)
Impairment charges 308 544 1,329
Other 457 256 155
Payments on performance based compensation (1,249) (1,010) (1,794)
Other long-term liabilities 180 723 (592)
Cash flows provided by (used for) working capital      
Accounts receivable 4,927 (6,709) 6,427
Inventories 3,151 (1,876) 8,603
Prepaid expenses and other current assets (353) 2,209 1,047
Accounts payable and accrued expenses 713 18,299 (27,594)
Net cash provided by (used for) operating activities - continuing operations 60,394 49,096 33,961
Net cash provided by (used for) operating activities - discontinued operations 858 (4,633) (232)
Net cash provided by (used for) operating activities 61,252 44,463 33,729
Cash Flows From Investing Activities      
Capital expenditures (5,123) (5,814) (12,489)
Proceeds from sale of property, plant and equipment 2,633 11,058 450
Proceeds (payments) related to sale of business 0 0 (4,034)
Net cash provided by (used for) investing activities - continuing operations (2,490) 5,244 (16,073)
Net cash provided by (used for) investing activities - discontinued operations 0 (1,107) (16)
Net cash provided by (used for) investing activities (2,490) 4,137 (16,089)
Cash Flows From Financing Activities      
Net borrowings (repayments) on credit facility (74,557) (16,474) (3,804)
Repayments of senior unsecured notes 0 (23,798) 0
Cash dividends paid (17,862) (16,341) (16,221)
Proceeds from issuance of common stock 2,853 4,527 3,374
Excess tax benefit from stock-based compensation 0 0 64
Proceeds from public offering of common stock, net of equity issuance costs 79,522 0 0
Shares withheld for employee taxes on equity awards (714) (620) (1,166)
Deferred financing costs 0 (1,030) 0
Net cash provided by (used for) financing activities - continuing operations (10,758) (53,736) (17,753)
Net cash provided by (used for) financing activities - discontinued operations 0 0 0
Net cash provided by (used for) financing activities (10,758) (53,736) (17,753)
Foreign exchange rate effect on cash (289) (208) 665
Less: Net increase (decrease) in cash classified within discontinued operations 0 (5,484) 493
Net increase in cash and restricted cash 47,715 140 59
Cash and restricted cash at January 1 11,179 11,039 10,980
Cash and restricted cash at December 31 58,894 11,179 11,039
Supplemental Disclosures of Cash Flow Information      
Interest 6,236 8,913 8,917
Income taxes $ 5,539 $ 5,651 $ 8,136
v3.10.0.1
Summary of Significant Accounting Policies
12 Months Ended
Dec. 31, 2018
Organization Consolidation And Presentation Of Financial Statements [Abstract]  
Summary of Significant Accounting Policies

1.  Summary of Significant Accounting Policies

Basis of Presentation

The consolidated financial statements include the accounts of Myers Industries, Inc. and all wholly owned subsidiaries (collectively, the “Company”). All intercompany accounts and transactions have been eliminated in consolidation. All subsidiaries that are not wholly owned and are not included in the consolidated operating results of the Company are immaterial investments which have been accounted for under the equity or cost method. The preparation of financial statements in conformity with U.S. generally accepted accounting principles (“GAAP”) requires management to make estimates and assumptions that affect the timing and amount of assets, liabilities, equity, revenues, and expenses recorded and disclosed. Actual results could differ from those estimates.

During the fourth quarter of 2017, the Company completed the sale of certain subsidiaries in Brazil. As further discussed in Note 5, the results of operations and cash flows of these subsidiaries have been classified as discontinued operations in the consolidated financial statements for all periods presented.

Accounting Standards Adopted

In March 2018, the FASB issued ASU 2018-05, Income Taxes (Topic 740): Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 118, which allowed SEC registrants to record provisional amounts in earnings for the year ended December 31, 2017 due to the complexities involved in accounting for the enactment of the Tax Cuts and Jobs Act. The Company recognized the estimated income tax effects of the Tax Cuts and Jobs Act in its 2017 consolidated financial statements in accordance with SEC Staff Accounting Bulletin No. 118. The Company finalized its accounting in 2018. Refer to Note 13 for further information regarding the provisional amounts recorded by the Company.

In February 2018, the FASB issued ASU 2018-02, Income Statement – Reporting Comprehensive Income (Topic 220). This ASU allows a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act. The new standard also requires certain disclosures about stranded tax effects. This ASU is effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years, with early adoption permitted. The ASU should be applied either in the period of adoption or retrospectively to each period (or periods) in which the effect of the change in the U.S. federal corporate income tax rate in the Tax Cuts and Jobs Act of 2017 (as further discussed in Note 13) is recognized. The Company early adopted this standard effective January 1, 2018 and as a result of adopting this standard, $0.3 million of stranded tax effects were reclassified from accumulated other comprehensive income to retained earnings in the first quarter of 2018.

In March 2017, the FASB issued ASU 2017-07, Compensation – Retirement Benefits (Topic 715) – Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost.  This ASU requires that an employer report the service cost component in the same line item(s) as other compensation costs arising from services rendered by the pertinent employees during the period.  The other components of net benefit cost are required to be presented in the income statement separately from the service cost component and outside a subtotal of income from operations, if one is presented.  The ASU also allows only the service cost component to be eligible for capitalization when applicable. The ASU is effective for annual periods beginning after December 15, 2017, and interim periods within those annual periods.  The ASU should be applied retrospectively for the presentation of the service cost component and the other components of net periodic pension cost and net periodic postretirement benefit cost in the income statement and prospectively, on and after the effective date, for the capitalization of the service cost component of net periodic pension cost and net periodic postretirement benefit in assets.  The Company adopted this standard effective January 1, 2018 and the adoption did not have a material impact on its consolidated financial statements as the pension plan is frozen.

In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230) - Restricted Cash. This ASU requires that companies include amounts generally described as restricted cash and restricted cash equivalents, along with cash and cash equivalents, when reconciling the beginning-of-period and end-of-period amounts shown on the statement of cash flows.  The ASU should be applied using a retrospective transition method to each period presented and is effective for annual reporting periods beginning after December 15, 2017 and interim periods within those annual periods. The Company adopted this standard effective January 1, 2018. At adoption, the inclusion of restricted cash with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts presented on the consolidated statements of cash flows did not have a material impact on the Company’s net cash flows in prior years.

In October 2016, the FASB issued ASU 2016-16, Accounting for Income Taxes: Intra-Entity Transfers of Assets Other Than Inventory (Topic 740). This ASU requires immediate recognition of the income tax consequences of intercompany asset transfers other than inventory. The ASU is effective for annual reporting periods beginning after December 15, 2017 and interim periods within those annual periods. The Company adopted this standard effective January 1, 2018, and the adoption of this standard did not have a material impact on its consolidated financial statements.

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers, to clarify the principles used to recognize revenue for all entities. Under ASU 2014-09, an entity recognizes revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which a company expects to be entitled in exchange for those goods or services. Additional disclosures are also required to help users of financial statements understand the nature, amount, and timing of revenue and cash flows arising from contracts. The Company adopted the new guidance effective January 1, 2018 using the modified retrospective approach and applied the new guidance to all open contracts at the date of adoption. Adoption of the new standard resulted in changes to the Company’s accounting policy and disclosures related to revenue recognition (refer to Note 2). The impact of adopting this standard on the Company’s consolidated financial statements was not material, and there was no cumulative transition adjustment required.

Accounting Standards Not Yet Adopted

In August 2018, the FASB issued ASU 2018-15, Intangibles – Goodwill and Other – Internal-Use Software (Subtopic 350-40). This ASU aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license). The ASU is effective for annual periods beginning after December 15, 2019, and interim periods within those annual periods. Early adoption is permitted and this ASU should be applied either retrospectively or prospectively to all implementation costs incurred after the date of adoption. The Company is currently evaluating the impact the adoption of this standard will have on its consolidated financial statements.

In August 2018, the FASB issued ASU 2018-14, Compensation – Retirement Benefits – Defined Benefit Plans – General (Subtopic 715-20). This ASU modifies the disclosure requirements for employers that sponsor defined benefit pension or other postretirement plans. The ASU is effective for annual periods ending after December 15, 2020, with early adoption permitted and should be applied on a retrospective basis to all periods presented. The Company is currently evaluating the impact the adoption of this standard will have on its consolidated financial statements.

In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement. This ASU modifies the disclosure requirements on fair value measurements by removing, modifying, or adding certain disclosures. This guidance is effective for annual periods beginning after December 15, 2019, and interim periods within those annual periods. Early adoption is permitted. Certain disclosures in this ASU are required to be applied on a retrospective basis and others on a prospective basis. The Company is currently evaluating the impact the adoption of this standard will have on its consolidated financial statements.

In January 2017, the FASB issued ASU 2017-04, Intangibles - Goodwill and Other (Topic 350) - Simplifying the Test for Goodwill Impairment.  This ASU eliminates Step 2 of the goodwill impairment test and requires goodwill impairment to be measured as the amount by which a reporting unit’s carrying amount exceeds its fair value, not to exceed the carrying amount of its goodwill. The ASU is effective for annual or any interim goodwill impairment tests in fiscal years beginning after December 15, 2019.  The guidance allows for early adoption for impairment testing dates after January 1, 2017.  While the Company has elected not to early adopt this guidance and will continue to evaluate the timing of adoption, it does not believe that the adoption of this guidance will have a material impact on its consolidated financial statements unless a goodwill impairment were to occur.

In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses: Measurement of Credit Losses on Financial Instruments, which introduces new guidance for the accounting for credit losses on instruments.  The new guidance introduces an approach based on expected losses to estimate credit losses on certain types of financial instruments. This ASU is effective for fiscal years beginning after December 15, 2019 including interim periods within that reporting period, with early adoption permitted for fiscal years beginning after December 15, 2018. The Company is currently evaluating the impact the adoption of this standard will have on its consolidated financial statements.


In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). Under ASU 2016-02, an entity will be required to recognize right-of-use assets and lease liabilities on its balance sheet, and disclose key information about the amount, timing and uncertainty of cash flows arising from leasing arrangements. The new standard is effective for the Company beginning January 1, 2019, and must be adopted using either the modified retrospective approach, which requires application of the new guidance at the beginning of the earliest comparative period presented or the optional transition approach, which requires application of the new guidance at the standard’s effective date. The Company will adopt the new guidance effective January 1, 2019 using the optional transition method. The Company is substantially complete with its implementation of the new standard, which included designing and implementing changes to processes, controls and systems, where necessary, to address the requirements of the new standard. Upon adoption, the Company expects to recognize right-of-use assets and lease liabilities in the range of $5.7 million to $6.7 million for substantially all of its operating leases. The remaining undiscounted minimum lease commitments as of December 31, 2018 are summarized in Note 15, Leases. It is not expected that the adoption of this standard will have a material impact on the consolidated results of operations or cash flows. The Company will also record a cumulative-effect adjustment to retained earnings upon adoption to recognize the remaining deferred gain on the sale-leaseback transaction that occurred prior to the date of initial application. Additionally, the standard requires new disclosures related to leases, which the Company is in the process of finalizing.

Translation of Foreign Currencies

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

Fair Value Measurement

The Company follows guidance included in Accounting Standards Codification (“ASC”) 820, Fair Value Measurements and Disclosures, for its financial assets and liabilities, as required. The guidance established a common definition for fair value to be applied under U.S. GAAP requiring the use of fair value, established a framework for measuring fair value, and expanded disclosure requirements about such fair value measurements. The guidance did not require any new fair value measurements, but rather applied to all other accounting pronouncements that require or permit fair value measurements. Under ASC 820, the hierarchy that prioritizes the inputs to valuation techniques used to measure fair value is divided into three levels:

 

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 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.

Financial assets that are measured at net asset value, which is a practical expedient to estimating fair value, are not classified in the fair value hierarchy.

The Company has financial instruments, including cash, accounts receivable, accounts payable and accrued expenses. The fair value of these financial instruments approximate 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 the 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 December 31, 2018 and 2017, the aggregate fair value of the Company’s outstanding fixed rate senior unsecured notes was estimated at $76.8 million and $78.0 million, respectively.

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. In 2018, there were no customers that accounted for more than ten percent of net sales. Outside of the United States, only customers located in Canada, which account for approximately 4.1% of net sales, are significant to the Company’s operations. 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. The Company evaluates the collectability 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 also reviews historical trends for collectability 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. Expense related to bad debts was approximately $0.7 million, $0.7 million and $0.8 million for 2018, 2017 and 2016, respectively, and is recorded within selling expenses in the Consolidated Statements of Operations. Deductions from the allowance for doubtful accounts, net of recoveries, were approximately $0.5 million, $0.7 million and $0.4 million for 2018, 2017 and 2016, respectively.

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 30 percent of our inventories are valued using the LIFO method of determining cost. All other inventories are valued at the FIFO method of determining cost.

 

Inventories at December 31 consist of the following:

 

 

 

December 31,

 

 

December 31,

 

 

 

2018

 

 

2017

 

Finished and in-process products

 

$

27,960

 

 

$

30,874

 

Raw materials and supplies

 

 

15,636

 

 

 

16,151

 

 

 

$

43,596

 

 

$

47,025

 

 

If the FIFO method of inventory cost valuation had been used exclusively by the Company, inventories would have been $5.1 million and $5.6 million higher than reported at December 31, 2018 and 2017, respectively. Cost of sales decreased by $0.5 million and $0.1 million in 2018 and 2017, respectively, as a result of the liquidation of LIFO inventories. Cost of sales increased by $0.1 million in 2016 as a result of the liquidation of LIFO inventories.

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 40 years

Machinery and Equipment

3 to 10 years

Leasehold Improvements

5 to 10 years

 

The Company’s property, plant and equipment by major asset class at December 31 consists of:

 

 

 

December 31,

 

 

December 31,

 

 

 

2018

 

 

2017

 

Land

 

$

7,017

 

 

$

7,815

 

Buildings and leasehold improvements

 

 

53,821

 

 

 

59,730

 

Machinery and equipment

 

 

253,785

 

 

 

260,880

 

 

 

 

314,623

 

 

 

328,425

 

Less allowances for depreciation and amortization

 

 

(249,163

)

 

 

(244,521

)

 

 

$

65,460

 

 

$

83,904

 

 

 

At December 31, 2018 and 2017, the Company had approximately $6.8 million and $6.9 million, respectively, of capitalized software costs included in machinery and equipment. Amortization expense related to capitalized software costs was approximately $0.5 million, $1.0 million and $0.6 million in 2018, 2017 and 2016, respectively.

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. Determination of potential impairment related to assets to be held and used is based upon undiscounted future cash flows resulting from the use and ultimate disposition of the asset and related asset group. For assets held for sale, the amount of potential impairment may be based upon appraisal of the asset, estimated market value of similar assets or estimated cash flow from the disposition of the asset. Refer to Note 3 for discussion of the impairment charges.

Accumulated Other Comprehensive Income (Loss)

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

 

 

 

Foreign

Currency

 

 

Defined Benefit

Pension Plans

 

 

Total

 

Balance at January 1, 2016

 

$

(37,447

)

 

$

(1,663

)

 

$

(39,110

)

Other comprehensive income (loss) before reclassifications

 

 

5,105

 

 

 

(222

)

 

 

4,883

 

Amounts reclassified from accumulated other comprehensive income, net of

   tax of ($30) (1)

 

 

 

 

 

53

 

 

 

53

 

Net current-period other comprehensive income (loss)

 

 

5,105

 

 

 

(169

)

 

 

4,936

 

Balance at December 31, 2016

 

 

(32,342

)

 

 

(1,832

)

 

 

(34,174

)

Other comprehensive income (loss) before reclassifications

 

 

2,391

 

 

 

(31

)

 

 

2,360

 

Amounts reclassified from accumulated other comprehensive income, net of

   tax of ($24) (1) (2)

 

 

17,201

 

 

 

72

 

 

 

17,273

 

Net current-period other comprehensive income (loss)

 

 

19,592

 

 

 

41

 

 

 

19,633

 

Balance at December 31, 2017

 

 

(12,750

)

 

 

(1,791

)

 

 

(14,541

)

Other comprehensive income (loss) before reclassifications

 

 

(3,501

)

 

 

14

 

 

 

(3,487

)

Amounts reclassified from accumulated other comprehensive income, net of

   tax of ($21) (1)

 

 

 

 

 

63

 

 

 

63

 

Reclassification of stranded tax effects to retained earnings(3)

 

 

 

 

 

(315

)

 

 

(315

)

Net current-period other comprehensive income (loss)

 

 

(3,501

)

 

 

(238

)

 

 

(3,739

)

Balance at December 31, 2018

 

$

(16,251

)

 

$

(2,029

)

 

$

(18,280

)

 

(1)

The accumulated other comprehensive income (loss) components related to defined benefit pension plans are included in the computation of net periodic pension cost. See Note 14, Retirement Plans for additional details.

(2)

Cumulative translation adjustment associated with the sale of the Brazil Business, as further discussed in Note 5, was included in the carrying value of assets disposed of.

(3)

Reclassification of stranded tax effects resulting from the Tax Cuts and Jobs Act to retained earnings due to the adoption of ASU 2018-02 during the first quarter of 2018.

Stock Based Compensation

The Company has stock incentive plans that provide for the granting of stock-based compensation to employees and to non-employee directors. Shares issued for option exercises or restricted stock units may be either from authorized but unissued shares or treasury shares. The Company records the costs of the plan under the provisions of ASC 718, Compensation — Stock Compensation. For transactions in which the Company obtains employee services in exchange for an award of equity instruments, the Company measures the cost of the services based on the grant date fair value of the award. The Company recognizes the cost over the period during which an employee is required to provide services in exchange for the award, referred to as the requisite service period (usually the vesting period).

 

Income Taxes

Income taxes are accounted for under the liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those differences are expected to be received or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period the change is enacted.

ASC 740, Income Taxes (“ASC 740”) requires that deferred tax assets be reduced by a valuation allowance, if based on all available evidence, it is more likely than not that the deferred tax asset will not be realized. The Company evaluates the recovery of its deferred tax assets by assessing the adequacy of future expected taxable income from all sources, including reversal of taxable temporary differences, forecasted operating earnings and available tax planning strategies. These sources of income inherently rely heavily on estimates.

The Company evaluates its tax positions in accordance with ASC 740, which provides detailed guidance for the financial statement recognition, measurement and disclosure of uncertain tax positions recognized in an enterprise’s financial statements. Income tax positions must meet a more-likely-than-not recognition threshold at the effective date to be recognized under ASC 740. The Company recognizes potential accrued interest and penalties related to unrecognized tax benefits as a component of income tax expense.

Cash and Cash Equivalents

The Company considers all highly liquid instruments purchased with a maturity of three months or less to be cash equivalents. Cash equivalents are stated at cost, which approximates market value. The Company maintains operating cash and reserves for replacement balances in financial institutions which, from time to time, may exceed federally insured limits. The Company periodically assesses the financial condition of these institutions and believes that the risk of loss is minimal.

Cash flows used in investing activities excluded $1.1 million, $0.6 million and $0.1 million of accrued capital expenditures in 2018, 2017 and 2016, respectively.

v3.10.0.1
Revenue Recognition
12 Months Ended
Dec. 31, 2018
Revenue Recognition [Abstract]  
Revenue Recognition

2.  Revenue Recognition

The following table disaggregates the Company’s revenue by major market:

 

 

 

For the Year Ended December 31, 2018

 

 

 

Material

Handling

 

 

Distribution

 

 

Inter-company

 

 

Consolidated

 

Consumer

 

$

78,174

 

 

$

 

 

$

 

 

$

78,174

 

Vehicle

 

 

95,247

 

 

 

 

 

 

 

 

 

95,247

 

Food and beverage

 

 

101,610

 

 

 

 

 

 

 

 

 

101,610

 

Industrial

 

 

142,168

 

 

 

 

 

 

(100

)

 

 

142,068

 

Auto aftermarket

 

 

 

 

 

149,636

 

 

 

 

 

 

149,636

 

Total net sales

 

$

417,199

 

 

$

149,636

 

 

$

(100

)

 

$

566,735

 

 

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 Company’s 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 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, the Company has not recorded any deferred revenue, 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.  Thus, the Company estimates the expected returns each period based on an analysis of historical experience.  For certain businesses where physical recovery of the product from returns occurs, the Company records an estimated right to return asset from such recovery, based on the approximate cost of the product.


Amounts included in the Consolidated Statements of Financial Position related to revenue recognition include:

 

 

 

December 31,

 

 

December 31,

 

 

Statement of Financial Position

 

 

2018

 

 

2017

 

 

Classification

Returns, discounts and other allowances

 

$

(1,169

)

 

$

(853

)

 

Accounts receivable

Right of return asset

 

 

535

 

 

 

292

 

 

Inventories, net

Customer deposits

 

 

(806

)

 

 

(140

)

 

Other current liabilities

Accrued rebates

 

 

(2,559

)

 

 

(2,962

)

 

Other current liabilities

 

Sales, value added, and other taxes the Company collects concurrent with revenue from customers are excluded from net sales.  The Company has elected to recognize the cost for shipments to customers when control over products has transferred to the customer.  Costs for shipments to customers are classified as selling expenses for the Company’s manufacturing businesses and as cost of sales for the Company’s distribution business in the accompanying Consolidated Statements of Operations. The Company incurred costs for shipments to customers of approximately $9.7 million, $8.2 million and $8.9 million in selling expenses for the years ended December 31, 2018, 2017 and 2016, respectively, and $5.7 million, $6.0 million, and $6.1 million in cost of sales for the years ended December 31, 2018, 2017 and 2016, respectively. All other internal distribution costs are recorded in selling expenses.

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

v3.10.0.1
Impairment Charges
12 Months Ended
Dec. 31, 2018
Asset Impairment Charges [Abstract]  
Impairment Charges

3.  Impairment Charges

As part of its ongoing strategy, the Company has been evaluating its various real estate holdings over the past two years. As a result of these initiatives, certain buildings have been reclassified as held for sale in 2017 and 2018. Based on the estimated fair value of these buildings (using primarily third party offers considered to be Level 2 inputs), less estimated costs to sell, the Company recorded impairment charges of $0.3 million and $0.5 million during the years ended December 31, 2018 and 2017, respectively. As of December 31, 2018 and 2017, the Company had classified $4.4 million and $0.3 million for buildings as held for sale, in Other Assets in the Consolidated Statements of Financial Position. During 2018 and 2017, the Company sold certain buildings previously held for sale for net proceeds of $2.3 million and $3.1 million, respectively.

During 2016, the Company recorded impairment charges of $1.3 million, primarily related to long-lived assets associated with the exit of a non-strategic product line in the Material Handling Segment.  

v3.10.0.1
Goodwill and Intangible Assets
12 Months Ended
Dec. 31, 2018
Goodwill And Intangible Assets Disclosure [Abstract]  
Goodwill and Intangible Assets

4.  Goodwill and Intangible Assets

The Company tests for impairment of goodwill and indefinite-lived intangible assets on at least an annual basis, unless significant changes in circumstances indicate a potential impairment may have occurred sooner. Such changes in circumstances may include, but are not limited to, significant changes in economic and competitive conditions, the impact of the economic environment on the Company’s customer base or its businesses, or a material negative change in its relationships with significant customers.    

The Company conducted its annual goodwill impairment assessment as of October 1 for all of its reporting units, noting no impairment in continuing operations in 2018, 2017 or 2016.      

During the 2018 annual review of goodwill, management performed a qualitative assessment for all of its reporting units. After considering changes to assumptions used in the most recent quantitative annual testing for each reporting unit, including macroeconomic conditions, industry and market considerations, overall financial performance, the magnitude of the excess of fair value over the carrying amount of each reporting unit as determined in the most recent quantitative annual testing, and other factors, management concluded that it was not more likely than not that the fair values of the reporting units were less than their respective carrying values and, therefore, did not perform a quantitative analysis in 2018. A qualitative analysis was also performed at October 31, 2017 and a quantitative analysis was performed at October 1, 2016.

The changes in the carrying amount of goodwill for the years ended December 31, 2018 and 2017 were as follows:

 

 

 

Distribution

 

 

Material

Handling

 

 

Total

 

January 1, 2017

 

$

505

 

 

$

58,714

 

 

$

59,219

 

Foreign currency translation

 

 

 

 

 

752

 

 

 

752

 

December 31, 2017

 

$

505

 

 

$

59,466

 

 

$

59,971

 

Foreign currency translation

 

 

 

 

 

(903

)

 

 

(903

)

December 31, 2018

 

$

505

 

 

$

58,563

 

 

$

59,068

 

 

Intangible assets other than goodwill primarily consist of trade names, customer relationships, patents, and technology assets established in connection with acquisitions. These intangible assets, other than certain trade names, are amortized over their estimated useful lives. The Company performs an annual impairment assessment for the indefinite lived trade names which had a carrying value of $9,782 and $9,972 at December 31, 2018 and 2017, respectively. In performing this assessment the Company uses an income approach, based primarily on Level 3 inputs, to estimate the fair value of the trade name. The Company records an impairment charge if the carrying value of the trade name exceeds the estimated fair value at the date of assessment.

Intangible assets at December 31, 2018 and 2017 consisted of the following:

 

 

 

 

 

 

 

2018

 

 

2017

 

 

 

Weighted Average

Remaining Useful

Life (years)

 

 

Gross

 

 

Accumulated

Amortization

 

 

Net

 

 

Gross

 

 

Accumulated

Amortization

 

 

Net

 

Trade Names - Indefinite Lived

 

 

 

 

 

$

9,782

 

 

$

 

 

$

9,782

 

 

$

9,972

 

 

$

 

 

$

9,972

 

Trade Names

 

 

6.5

 

 

 

80

 

 

 

(45

)

 

 

35

 

 

 

80

 

 

 

(40

)

 

 

40

 

Customer Relationships

 

 

1.5

 

 

 

39,521

 

 

 

(31,896

)

 

 

7,625

 

 

 

41,043

 

 

 

(27,396

)

 

 

13,647

 

Technology

 

 

5.2

 

 

 

24,980

 

 

 

(12,142

)

 

 

12,838

 

 

 

24,980

 

 

 

(9,590

)

 

 

15,390

 

Patents

 

 

0.0

 

 

 

11,730

 

 

 

(11,730

)

 

 

 

 

 

11,730

 

 

 

(11,730

)

 

 

 

 

 

 

 

 

 

$

86,093

 

 

$

(55,813

)

 

$

30,280

 

 

$

87,805

 

 

$

(48,756

)

 

$

39,049

 

 

Intangible amortization expense was $8,099, $8,378 and $9,277 in 2018, 2017 and 2016, respectively. Estimated annual amortization expense for intangible assets with finite lives for the next five years is: $7,571 in 2019; $4,819 in 2020; $2,278 in 2021; $2,278 in 2022 and $2,278 in 2023.

v3.10.0.1
Disposal of Businesses
12 Months Ended
Dec. 31, 2018
Discontinued Operations And Disposal Groups [Abstract]  
Disposal of Businesses

5.  Disposal of Businesses

On December 18, 2017, the Company, collectively with its wholly owned subsidiary, Myers Holdings Brasil, Ltda. (“Holdings”), completed the sale of its subsidiaries, Myers do Brasil Embalagens Plasticas Ltda. and Plasticos Novel do Nordeste Ltda. (collectively, the “Brazil Business”), to Novel Holdings – Eireli (“Buyer”), an entity controlled by a member of the Brazil Business’ management team.  The divestiture of the Brazil Business will allow the Company to focus resources on its core businesses and additional growth opportunities. The Brazil Business is a leading designer and manufacturer of reusable plastic shipping containers, plastic pallets, crates and totes used for closed-loop shipping and storage in Brazil’s automotive, distribution, food, beverage and agriculture industries. The sale of the Brazil Business included manufacturing facilities and offices located in Lauro de Freitas City, Bahia, Brazil; Ibipora, Parana, Brazil; and Jaguarinuna, Brazil. The Brazil Business was part of the Company’s Material Handling Segment.

 

Pursuant to the terms of the Quota Purchase Agreement by and among the Company, Holdings and Buyer (the “Purchase Agreement”), the Buyer paid a purchase price of one U.S. Dollar to the Company and has assumed all liabilities and obligations of the Brazil Business, whether arising prior to or after the closing of the transaction. There are no additional amounts due, or to be settled, under the terms of the Purchase Agreement with the Buyer. The Company recorded a loss on the sale of the Brazil Business during the fourth quarter of 2017 of $35.0 million, which included $1.2 million of cash held by the Brazil Business and approximately $0.3 million of costs to sell. In addition, the Company recorded a U.S. tax benefit of approximately $15 million as a result of a worthless stock deduction related to the Company’s investment in the Brazil Business. As a result of the Company’s U.S. Federal income tax filings in 2018, the Company reduced this estimated tax benefit by $0.7 million and recognized this adjustment within net loss from discontinued operations.

The Company has agreed to be the guarantor under a factoring arrangement between the Buyer and Banco Alfa de Investimento S.A. until December 31, 2019 for up to $7 million, in the event the Buyer is unable to meet its obligations under this arrangement. The Company also holds a first lien against certain machinery and equipment, exercisable only upon default by the Buyer under the guaranty. Based on the nature of the guaranty, as well as the existence of the lien, the Company believes the fair value of the guaranty is immaterial (based primarily on Level 3 inputs), and thus has recorded no liability related to this guaranty in the Consolidated Statement of Financial Position. This guaranty also creates a variable interest to the Company in the Brazil Business. Based on the terms of the transaction and the fact that the Company has no management involvement or voting interests in the Brazil Business following the sale, the Company does not have any power to direct the significant activities of the Brazil Business, and is thus not the primary beneficiary.

During the second quarter of 2014, the Company’s Board of Directors approved the commencement of the sale process to divest its Lawn and Garden business to allow it to focus resources on its core growth platforms. The business was sold February 17, 2015 to an entity controlled by Wingate Partners V, L.P. (“L&G Buyer”), a private equity firm, for $110 million, subject to a working capital adjustment of approximately $4.0 million paid to the L&G Buyer in 2016. The terms of the agreement included a $90 million cash payment and promissory notes totaling $20 million that mature in August 2020 with a 6% interest rate, with approximately $8.6 million placed in escrow that was due to be settled by August 2016. The release of these funds had been extended pending the resolution of indemnification claims, as further described in Note 11. In April 2018, the Company reached agreement on the material terms of a settlement, and, as a result, recorded a pre-tax charge of $1.225 million to discontinued operations in 2018. The settlement was finalized and paid in May 2018, and upon settlement and release of any further obligation on behalf of the Company, the remaining $7.4 million was released from escrow to the Company.

During the third quarter of 2018, management of the Lawn and Garden business, now named HC Companies, Inc. (“HC”), requested an extension to the maturity of the notes as part of an effort to restructure their debt. The Company believes there is uncertainty about the ability to collect on the notes and corresponding accrued interest. The fair market value of the notes at the date of the sale was $17.8 million. The fair value of the notes receivable was calculated using Level 2 inputs as defined in Note 1. The carrying value of the notes as of December 31, 2018 and 2017 was $19.1 million and $18.7 million, respectively, which represents the fair value at the date of sale plus accretion. As a result of the uncertainty regarding the ability to collect on the notes and corresponding accrued interest, the Company recorded a provision for expected loss of $23.0 million within continuing operations to Other Expenses in the Consolidated Statements of Operations during the third quarter of 2018 based on the carrying value of the notes and corresponding accrued interest. Interest income on the notes receivable was $1.0 million, $1.3 million, and $1.3 million during the years ended December 31, 2018, 2017 and 2016 and was recognized based on the stated interest rate above. The Company ceased recognizing interest income following the recording of the provision noted above.

In connection with the financial risk described above with HC, the Company further assessed its potential obligations under a lease guarantee granted as part of the sale of the Lawn and Garden business. Refer to Note 11 for further information with regards to this obligation.

Summarized selected financial information for discontinued operations for the years ended December 31, 2018, 2017 and 2016 are presented in the following table:

 

 

 

 

 

For the Year Ended December 31,

 

 

 

 

 

2018

 

 

2017*

 

 

2016

 

Net sales

 

 

 

$

 

 

$

29,976

 

 

$

23,683

 

Cost of sales

 

 

 

 

 

 

 

25,359

 

 

 

20,941

 

Selling, general, and administrative

 

 

 

 

1,348

 

 

 

6,748

 

 

 

5,438

 

(Gain) loss on disposal of assets

 

 

 

 

 

 

 

(32

)

 

 

226

 

Impairment charges

 

 

 

 

 

 

 

 

 

 

8,545

 

Interest income, net

 

 

 

 

 

 

 

(286

)

 

 

(469

)

Gain (loss) on the disposal of the discontinued operations

 

 

 

 

 

 

 

(34,956

)

 

 

 

Loss from discontinued operations before income tax

 

 

 

 

(1,348

)

 

 

(36,769

)

 

 

(10,998

)

Income tax expense (benefit)

 

 

 

 

353

 

 

 

(16,036

)

 

 

(731

)

Loss from discontinued operations, net of income tax

 

 

 

$

(1,701

)

 

$

(20,733

)

 

$

(10,267

)

 

*

Includes Brazil Business operating results through December 18, 2017.

 

Net cash flows provided by discontinued operations in 2018 resulted from the payment of expenses related to the sale of the Brazil Business, the payment of the settlement with the L&G Buyer noted above and partial receipt of the tax benefit from the worthless stock deduction related to the Brazil Business. The worthless stock deduction allowed the Company to reduce its estimated U.S. federal tax payments in 2018 by $4.3 million.

v3.10.0.1
Net Income (Loss) Per Common Share
12 Months Ended
Dec. 31, 2018
Earnings Per Share [Abstract]  
Net Income (Loss) Per Common Share

 

6.  Net Income (Loss) Per Common Share

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

 

 

 

For the Year Ended December 31,

 

 

 

2018

 

 

2017

 

 

2016

 

Weighted average common shares outstanding basic

 

 

33,426,855

 

 

 

30,222,289

 

 

 

29,750,378

 

Dilutive effect of stock options and restricted stock

 

 

 

 

 

340,357

 

 

 

217,534

 

Weighted average common shares outstanding diluted

 

 

33,426,855

 

 

 

30,562,646

 

 

 

29,967,912

 

 

Due to the net loss for the year ended December 31, 2018, diluted weighted-average shares outstanding are equal to basic weighted-average shares outstanding because the effect of all equity awards is anti-dilutive. Options to purchase 242,500 and 551,761 shares of common stock that were outstanding at December 31, 2017 and 2016, respectively, were not included in the computation of diluted earnings per share as the exercise prices of these options was greater than the average market price of common shares, and were therefore anti-dilutive.

v3.10.0.1
Restructuring
12 Months Ended
Dec. 31, 2018
Restructuring And Related Activities [Abstract]  
Restructuring

7.  Restructuring

The charges related to various restructuring programs implemented by the Company are included in cost of sales and selling, general and administrative (“SG&A”) expenses depending on the type of cost incurred. The restructuring charges recognized in the years ended 2018, 2017 and 2016 are presented in the following table.  

 

 

 

 

2018

 

 

2017

 

 

2016

 

Segment

 

 

Cost of

sales

 

 

SG&A

 

 

Total

 

 

Cost of

sales

 

 

SG&A

 

 

Total

 

 

Cost of

sales

 

 

SG&A

 

 

Total

 

Distribution

 

 

$

 

 

$

 

 

$

 

 

$

 

 

$

 

 

$

 

 

$

 

 

$

 

 

$

 

Material Handling

 

 

 

119

 

 

 

 

 

 

119

 

 

 

7,389

 

 

 

164

 

 

 

7,553

 

 

 

 

 

 

 

 

 

 

Corporate

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

 

$

119

 

 

$

 

 

$

119

 

 

$

7,389

 

 

$

164

 

 

$

7,553

 

 

$

 

 

$

 

 

$

 

 

On March 9, 2017, the Company announced a restructuring plan (the “Plan”) to improve the Company’s organizational structure and operational efficiency within the Material Handling Segment, which related primarily to anticipated facility shutdowns and associated activities.  Total restructuring costs incurred related to the Plan were approximately $7.7 million, which includes employee severance and other employee-related costs of approximately $3.1 million, $2.6 million related to equipment relocation and facility shut down costs and non-cash charges, primarily accelerated depreciation charges on property, plant and equipment, of approximately $2.0 million.

All actions under the Plan are completed. The Company incurred $0.1 million and $7.6 million of restructuring charges associated with the activities under the Plan during the years ended December 31, 2018 and 2017, respectively.

The table below summarizes restructuring activity for the years ended December 31, 2018 and 2017:

 

 

 

Employee

Reduction

 

 

Accelerated

Depreciation

 

 

Other Exit Costs

 

 

Total