MYERS INDUSTRIES INC, 10-Q filed on 5/8/2019
Quarterly Report
v3.19.1
Document and Entity Information - shares
3 Months Ended
Mar. 31, 2019
Apr. 30, 2019
Document And Entity Information [Abstract]    
Entity Registrant Name MYERS INDUSTRIES INC  
Entity Central Index Key 0000069488  
Document Type 10-Q  
Document Period End Date Mar. 31, 2019  
Amendment Flag false  
Document Fiscal Year Focus 2019  
Document Fiscal Period Focus Q1  
Current Fiscal Year End Date --12-31  
Entity Filer Category Accelerated Filer  
Entity Small Business false  
Entity Emerging Growth Company false  
Entity Common Stock, Shares Outstanding   35,461,725
v3.19.1
Condensed Consolidated Statements of Operations - USD ($)
$ in Thousands
3 Months Ended
Mar. 31, 2019
Mar. 31, 2018
Income Statement [Abstract]    
Net sales $ 139,115 $ 152,568
Cost of sales 93,556 105,453
Gross profit 45,559 47,115
Selling, general and administrative expenses 34,468 35,473
(Gain) loss on disposal of fixed assets (43) (380)
Impairment charges 916 0
Operating income 10,218 12,022
Interest expense, net 1,049 1,639
Income from continuing operations before income taxes 9,169 10,383
Income tax expense 2,526 2,628
Income from continuing operations 6,643 7,755
Income (loss) from discontinued operations, net of income tax 127 (911)
Net income $ 6,770 $ 6,844
Income per common share from continuing operations:    
Basic $ 0.19 $ 0.25
Diluted 0.19 0.25
Income (loss) per common share from discontinued operations:    
Basic 0 (0.03)
Diluted 0 (0.03)
Net income per common share:    
Basic 0.19 0.22
Diluted $ 0.19 $ 0.22
v3.19.1
Condensed Consolidated Statements of Comprehensive Income (Loss) - USD ($)
$ in Thousands
3 Months Ended
Mar. 31, 2019
Mar. 31, 2018
Statement Of Income And Comprehensive Income [Abstract]    
Net income $ 6,770 $ 6,844
Other comprehensive income (loss)    
Adoption of ASU 2018-02   (315)
Foreign currency translation adjustment 777 (1,720)
Pension liability, net of tax expense of $67 in 2018   201
Total other comprehensive income (loss) 777 (1,834)
Comprehensive income $ 7,547 $ 5,010
v3.19.1
Condensed Consolidated Statements of Comprehensive Income (Loss) (Parenthetical)
$ in Thousands
3 Months Ended
Mar. 31, 2018
USD ($)
Statement Of Income And Comprehensive Income [Abstract]  
Tax expense on pension liability $ 67
v3.19.1
Condensed Consolidated Statements of Financial Position - USD ($)
$ in Thousands
Mar. 31, 2019
Dec. 31, 2018
Current Assets    
Cash $ 67,316 $ 58,894
Accounts receivable, less allowances of $2,281 and $2,259, respectively 71,914 72,939
Income tax receivable 0 4,892
Inventories, net 42,489 43,596
Prepaid expenses and other current assets 1,809 2,534
Total Current Assets 183,528 182,855
Other Assets    
Property, plant, and equipment, net 59,334 65,460
Right of use asset - operating leases 5,529 0
Goodwill 59,290 59,068
Intangible assets, net 28,448 30,280
Deferred income taxes 5,350 5,270
Other 4,309 5,712
Total Assets 345,788 348,645
Current Liabilities    
Accounts payable 53,818 60,849
Accrued expenses    
Employee compensation 11,896 16,531
Income taxes 4,349 0
Taxes, other than income taxes 1,080 1,403
Accrued interest 811 1,939
Other current liabilities 13,634 16,701
Operating lease liability - short-term 1,895 0
Total Current Liabilities 87,483 97,423
Long-term debt 76,887 76,790
Operating lease liability - long-term 3,878 0
Other liabilities 19,114 19,794
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 35,454,385 and 35,374,121; net of treasury shares of 7,098,072 and 7,178,336, respectively) 21,627 21,547
Additional paid-in capital 292,608 292,558
Accumulated other comprehensive loss (17,503) (18,280)
Retained deficit (138,306) (141,187)
Total Shareholders’ Equity 158,426 154,638
Total Liabilities and Shareholders’ Equity $ 345,788 $ 348,645
v3.19.1
Condensed Consolidated Statements of Financial Position (Parenthetical) - USD ($)
$ in Thousands
Mar. 31, 2019
Dec. 31, 2018
Current Assets    
Allowance for Doubtful Accounts Receivable, Current $ 2,281 $ 2,259
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) 35,454,385 35,374,121
Common shares, treasury (in shares) 7,098,072 7,178,336
v3.19.1
Condensed 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, 2017 $ 93,752 $ 18,547 $ 209,253 $ (14,541) $ (119,507)
Stockholders' Equity [Roll Forward]          
Net income 6,844 0 0 0 6,844
Foreign currency translation adjustment (1,720) 0 0 (1,720) 0
Shares issued under incentive plans, net of shares withheld for tax 93 51 42 0 0
Stock compensation expense 953 0 953 0 0
Pension liability, net of tax 201 0 0 201 0
Declared dividends (4,197) 0 0 0 (4,197)
Ending balance at Mar. 31, 2018 95,926 18,598 210,248 (16,375) (116,545)
Stockholders' Equity [Roll Forward]          
Adoption of ASU | ASU 2018-02 [Member] 0 0 0 (315) 315
Beginning balance at Dec. 31, 2018 154,638 21,547 292,558 (18,280) (141,187)
Stockholders' Equity [Roll Forward]          
Net income 6,770 0 0 0 6,770
Foreign currency translation adjustment 777 0 0 777 0
Shares issued under incentive plans, net of shares withheld for tax (828) 80 (908) 0 0
Stock compensation expense 958   958 0 0
Declared dividends (4,794) 0 0 0 (4,794)
Ending balance at Mar. 31, 2019 158,426 21,627 292,608 (17,503) (138,306)
Stockholders' Equity [Roll Forward]          
Adoption of ASU | ASU 2016-02 [Member] $ 905 $ 0 $ 0 $ 0 $ 905
v3.19.1
Condensed Consolidated Statements of Shareholders' Equity (Parenthetical) - USD ($)
$ in Thousands
3 Months Ended
Mar. 31, 2019
Mar. 31, 2018
Tax expense on pension liability   $ 67
Retained Deficit [Member]    
Tax amount related to retained deficit $ 332  
Dividends declared per share $ 0.14 $ 0.14
Accumulated Other Comprehensive Income (Loss) [Member]    
Tax expense on pension liability   $ 67
v3.19.1
Condensed Consolidated Statements of Cash Flows - USD ($)
$ in Thousands
3 Months Ended
Mar. 31, 2019
Mar. 31, 2018
Cash Flows From Operating Activities    
Net income $ 6,770 $ 6,844
Income (loss) from discontinued operations, net of income taxes 127 (911)
Income from continuing operations 6,643 7,755
Adjustments to reconcile income (loss) from continuing operations to net cash provided by (used for) operating activities    
Depreciation 4,012 4,479
Amortization 2,026 2,166
Accelerated depreciation associated with restructuring activities 0 16
Non-cash stock-based compensation expense 958 1,098
(Gain) loss on disposal of fixed assets (43) (380)
Interest income received (accrued) on note receivable 0 334
Impairment charges 916 0
Other 100 60
Payments on performance based compensation (413) (1,249)
Other long-term liabilities 379 (123)
Cash flows provided by (used for) working capital    
Accounts receivable 1,200 (4,473)
Inventories 1,207 (796)
Prepaid expenses and other current assets 733 447
Accounts payable and accrued expenses (12,417) 3,504
Net cash provided by (used for) operating activities - continuing operations 5,301 12,838
Net cash provided by (used for) operating activities - discontinued operations 7,297 (2,085)
Net cash provided by (used for) operating activities 12,598 10,753
Cash Flows From Investing Activities    
Capital expenditures (2,933) (1,206)
Proceeds from sale of property, plant and equipment 4,486 2,353
Net cash provided by (used for) investing activities - continuing operations 1,553 1,147
Net cash provided by (used for) investing activities - discontinued operations 0 0
Net cash provided by (used for) investing activities 1,553 1,147
Cash Flows From Financing Activities    
Net borrowings (repayments) on credit facility 0 (6,722)
Cash dividends paid (4,940) (4,161)
Proceeds from issuance of common stock 146 452
Shares withheld for employee taxes on equity awards (974) (359)
Net cash provided by (used for) financing activities - continuing operations (5,768) (10,790)
Net cash provided by (used for) financing activities - discontinued operations 0 0
Net cash provided by (used for) financing activities (5,768) (10,790)
Foreign exchange rate effect on cash 39 (606)
Net increase in cash and restricted cash 8,422 504
Cash and restricted cash at January 1 58,894 11,179
Cash and restricted cash at March 31 $ 67,316 $ 11,683
v3.19.1
Summary of Significant Accounting Policies
3 Months Ended
Mar. 31, 2019
Organization Consolidation And Presentation Of Financial Statements [Abstract]  
Summary of Significant Accounting Policies

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 U.S. generally accepted accounting principles (“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, 2018.

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, 2019, and the results of operations and cash flows for the periods presented. The results of operations for the quarter ended March 31, 2019 are not necessarily indicative of the results of operations that will occur for the year ending December 31, 2019.

Accounting Standards Adopted

In February 2016, the FASB issued ASU 2016-02, Leases, which created Accounting Standards Codification (“ASC”) Topic 842. Under ASU 2016-02, an entity recognizes right-of-use assets and lease liabilities on its balance sheet, and discloses key information about the amount, timing and uncertainty of cash flows arising from leasing arrangements. The Company adopted the new guidance effective January 1, 2019, using the optional transition method, which required application of the new guidance to only those leases that existed at the date of adoption. The Company elected the “package of practical expedients,” which permitted the Company to not reassess under the new standard its prior conclusions about lease identification, lease classification and initial direct costs. The Company also elected to apply the guidance at a portfolio level and use the discount rate corresponding to the remaining lease term at transition. Adoption of the new standard resulted in the recognition of right-of-use assets and lease liabilities of $5.9 million and $6.2 million, respectively, on January 1, 2019. The difference between the right-of-use assets and lease liabilities related primarily to the removal of previously recorded accrued rent balances as a result of recording straight-line rent expense for certain leases. In addition, the adoption resulted in an adjustment to opening retained earnings (deficit) of approximately $0.9 million, net of tax, on January 1, 2019. This cumulative-effect transition adjustment to opening retained earnings (deficit) related to the recognition of the remaining deferred gain on the sale-leaseback transaction that occurred in 2018. The standard did not have a material impact on the Company’s condensed consolidated results of operations or cash flows.

The following tables summarize the impacts of ASC 842 on the Company’s condensed consolidated financial statements:

 

 

 

For the Quarter Ended March 31, 2019

 

 

 

As Reported

 

 

Adjustments

 

 

Balances Without

Adoption of

ASC 842

 

Net sales

 

$

139,115

 

 

$

 

 

$

139,115

 

Cost of sales

 

 

93,556

 

 

 

 

 

 

93,556

 

Gross profit

 

 

45,559

 

 

 

 

 

 

45,559

 

Selling, general and administrative expenses

 

 

34,468

 

 

 

(34

)

 

 

34,434

 

(Gain) loss on disposal of fixed assets

 

 

(43

)

 

 

 

 

 

(43

)

Impairment charges

 

 

916

 

 

 

 

 

 

916

 

Operating income

 

 

10,218

 

 

 

34

 

 

 

10,252

 

Interest expense, net

 

 

1,049

 

 

 

 

 

 

1,049

 

Income from continuing operations before income taxes

 

 

9,169

 

 

 

34

 

 

 

9,203

 

Income tax expense

 

 

2,526

 

 

 

9

 

 

 

2,535

 

Income from continuing operations

 

$

6,643

 

 

$

25

 

 

$

6,668

 

 

 

 

As of  March 31, 2019

 

 

 

As Reported

 

 

Adjustments

 

 

Balances Without

Adoption of

ASC 842

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

Right of use asset - operating leases

 

$

5,529

 

 

$

(5,529

)

 

$

 

Deferred tax asset

 

 

5,350

 

 

 

332

 

 

 

5,682

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

Other current liabilities

 

$

13,634

 

 

$

244

 

 

$

13,878

 

Operating lease liability - short-term

 

 

1,895

 

 

 

(1,895

)

 

 

 

Operating lease liability - long-term

 

 

3,878

 

 

 

(3,878

)

 

 

 

Other liabilities

 

 

19,114

 

 

 

1,203

 

 

 

20,317

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shareholders’ Equity

 

 

 

 

 

 

 

 

 

 

 

 

Retained deficit

 

$

(138,306

)

 

$

(871

)

 

$

(139,177

)

 

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.  The Company 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.

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.

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 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 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 March 31, 2019 and December 31, 2018, the aggregate fair value of the Company's outstanding fixed rate senior unsecured notes was estimated at $77.8 million and $76.8 million, respectively.

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, 2019

 

$

(16,251

)

 

$

(2,029

)

 

$

(18,280

)

Other comprehensive income (loss) before reclassifications

 

 

777

 

 

 

 

 

 

777

 

Net current-period other comprehensive income (loss)

 

 

777

 

 

 

 

 

 

777

 

Balance at March 31, 2019

 

$

(15,474

)

 

$

(2,029

)

 

$

(17,503

)

 

 

v3.19.1
Revenue Recognition
3 Months Ended
Mar. 31, 2019
Revenue Recognition [Abstract]  
Revenue Recognition

2.  Revenue Recognition

The following tables disaggregate the Company’s revenue by major market:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Quarter Ended March 31, 2019

 

 

 

Material

Handling

 

 

Distribution

 

 

Inter-company

 

 

Consolidated

 

Consumer

 

$

17,785

 

 

$

 

 

$

 

 

$

17,785

 

Vehicle

 

 

22,520

 

 

 

 

 

 

 

 

 

22,520

 

Food and beverage

 

 

25,149

 

 

 

 

 

 

 

 

 

25,149

 

Industrial

 

 

37,497

 

 

 

 

 

 

(10

)

 

 

37,487

 

Auto aftermarket

 

 

 

 

 

36,174

 

 

 

 

 

 

36,174

 

Total net sales

 

$

102,951

 

 

$

36,174

 

 

$

(10

)

 

$

139,115

 

 

 

 

For the Quarter Ended March 31, 2018

 

 

 

Material

Handling

 

 

Distribution

 

 

Inter-company

 

 

Consolidated

 

Consumer

 

$

17,231

 

 

$

 

 

$

 

 

$

17,231

 

Vehicle

 

 

25,543

 

 

 

 

 

 

 

 

 

25,543

 

Food and beverage

 

 

37,657

 

 

 

 

 

 

 

 

 

37,657

 

Industrial

 

 

36,378

 

 

 

 

 

 

(22

)

 

 

36,356

 

Auto aftermarket

 

 

 

 

 

35,781

 

 

 

 

 

 

35,781

 

Total net sales

 

$

116,809

 

 

$

35,781

 

 

$

(22

)

 

$

152,568

 

 

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 Condensed Consolidated Statement of Financial Position (Unaudited) related to revenue recognition include:

 

 

 

March 31,

 

 

December 31,

 

 

Statement of Financial

Position

 

 

2019

 

 

2018

 

 

Classification

Returns, discounts and other allowances

 

$

(1,122

)

 

$

(1,169

)

 

Accounts receivable

Right of return asset

 

 

503

 

 

 

535

 

 

Inventories, net

Customer deposits

 

 

(167

)

 

 

(806

)

 

Other current liabilities

Accrued rebates

 

 

(1,820

)

 

 

(2,559

)

 

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, General and Administrative Expenses for the Company’s manufacturing business and as Cost of Sales for the Company’s distribution business in the accompanying Condensed Consolidated Statements of Operations (Unaudited). The Company incurred costs for shipments to customers of approximately $2.2 million and $2.7 million in Selling, General and Administrative Expenses for the quarters ended March 31, 2019 and 2018, respectively, and $1.5 million and $1.3 million in Cost of Sales for the quarters ended March 31, 2019 and 2018, respectively. All other internal distribution costs are recorded in Selling, General and Administrative 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.

v3.19.1
Assets Held for Sale
3 Months Ended
Mar. 31, 2019
Property Plant And Equipment Assets Held For Sale Disclosure [Abstract]  
Assets Held for Sale

 


3.  Assets Held for Sale

As part of its ongoing strategy, the Company continues to evaluate its various real estate holdings. As a result of these initiatives, certain buildings were reclassified as held for sale in 2018 and 2019. As of March 31, 2019 and December 31, 2018, the Company had classified $2.9 million and $4.4 million, respectively, of buildings as held for sale, in Other Assets in the Condensed Consolidated Statements of Financial Position (Unaudited). During the first quarter of 2019, the Company sold a building previously held for sale for net proceeds of $4.5 million. This building was included in the Company’s Material Handling Segment.

v3.19.1
Disposal of Businesses
3 Months Ended
Mar. 31, 2019
Discontinued Operations And Disposal Groups [Abstract]  
Disposal of Businesses

4.  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 Brazil Business was part of the Material Handling Segment.

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 Condensed Consolidated Statements of Financial Position (Unaudited). 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.

On February 17, 2015, the Company sold its Lawn and Garden business to an entity controlled by Wingate Partners V, L.P. (“L&G Buyer”). The terms of the sale included promissory notes totaling $20 million that were originally set to mature in August 2020 with a 6% interest rate. 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, and as a result, the Company recorded a provision for expected loss of $23.0 million within continuing operations during the third quarter of 2018. The Company ceased recognizing interest income as of September 30, 2018 following the recognition of the provision.  In April 2019, the Company entered into an agreement with HC to amend and restate the notes (“Amended and Restated Notes”). The Amended and Restated Notes maintain the amounts due under the original terms of the notes, including interest, and extend the maturity to August 2022. The agreement to amend and restate the notes did not change management’s assessment of the uncertainty to collect on the notes.

In addition, approximately $8.6 million of the purchase price related to the Lawn and Garden sale was 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 for the quarter ended March 31, 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.

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 guarantee.

Summarized selected financial information for discontinued operations for the quarters ended March 31, 2019 and 2018 are presented in the following table:

 

 

 

For the Quarter Ended March 31,

 

 

 

2019

 

 

2018

 

Net sales

 

$

 

 

$

 

Cost of sales

 

 

 

 

 

 

Selling, general, and administrative

 

 

 

 

 

1,225

 

(Gain) loss on disposal of assets

 

 

 

 

 

 

Interest income, net

 

 

(174

)

 

 

 

Income (loss) from discontinued operations before income tax

 

 

174

 

 

 

(1,225

)

Income tax expense (benefit)

 

 

47

 

 

 

(314

)

Income (loss) from discontinued operations, net of income tax

 

$

127

 

 

$

(911

)

 

Net cash flows provided by discontinued operations in 2019 resulted from the remaining receipt of the tax benefit from a worthless stock deduction, which was recognized as part of the sale of the Brazil Business. Net cash flows used for discontinued operations in 2018 resulted from the payment of expenses related to the sale of the Brazil Business.

v3.19.1
Restructuring
3 Months Ended
Mar. 31, 2019
Restructuring And Related Activities [Abstract]  
Restructuring

5.  Restructuring

On March 20, 2019, the Company committed to implementing a restructuring plan involving its Ameri-Kart Corp. subsidiary (“Ameri-Kart”) that operates within the Company’s Material Handling Segment. The Company plans to consolidate manufacturing operations currently conducted at Ameri-Kart’s Cassopolis, Michigan facility with expanded operations at Ameri-Kart’s Bristol, Indiana facility, and eliminate up to 30 positions in connection with the consolidation (the “Ameri-Kart Plan”). Total restructuring costs expected to be incurred are approximately $0.9 million, which include employee severance and other employee-related costs of approximately $0.2 million, equipment relocation and facility shut down costs of approximately $0.6 million and non-cash charges, primarily accelerated depreciation charges on property, plant and equipment, of approximately $0.1 million. No costs were incurred during the quarter ended March 31, 2019 related to the Ameri-Kart Plan. The Ameri-Kart Plan is expected to be substantially completed by the end of 2019.

On March 18, 2019, the Company committed to implementing a restructuring plan relating to transformation initiatives within the Company’s Distribution Segment (the “Distribution Transformation Plan”) that are intended to increase sales force effectiveness, reduce costs and improve contribution margins. The Company plans to realign its Distribution Segment’s commercial sales structure, which includes the elimination of certain sales and administrative positions, as well as expand its e-commerce platform. Total restructuring costs expected to be incurred are approximately $0.9 million, primarily related to employee severance and other employee-related costs. During the quarter ended March 31, 2019, the Company incurred restructuring charges of $0.9 million and does not expect to incur any additional restructuring charges in connection with the Distribution Transformation Plan. The Distribution Transformation Plan is expected to be substantially completed by the end of 2019.

On March 9, 2017, the Company announced a restructuring plan to improve the Company’s organizational structure and operational efficiency within the Material Handling Segment (the “Material Handling Plan”), which related primarily to anticipated facility shutdowns and associated activities.  Total restructuring costs incurred related to the Material Handling 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 Material Handling Plan are completed. The Company incurred $0.1 million of restructuring charges associated with the Material Handling Plan during the quarter ended March 31, 2018. No costs were incurred during the quarter ended March 31, 2019.

 

The restructuring charges noted above are presented in the Condensed Consolidated Statements of Operations (Unaudited) as follows:

 

 

 

For the Quarter Ended March 31,

 

 

 

2019

 

 

2018

 

Segment

 

Cost of

sales

 

 

SG&A

 

 

Total

 

 

Cost of

sales

 

 

SG&A

 

 

Total

 

Distribution

 

$

 

 

$

901

 

 

$

901

 

 

$

 

 

$

 

 

$

 

Material Handling

 

 

 

 

 

 

 

 

 

 

 

119

 

 

 

 

 

 

119

 

Total

 

$

 

 

$

901

 

 

$

901

 

 

$

119

 

 

$

 

 

$

119

 

 

 

The table below summarizes restructuring activity for the quarter ended March 31, 2019:

 

 

 

Employee

Reduction

 

 

Accelerated

Depreciation

 

 

Other Exit

Costs

 

 

Total

 

Balance at January 1, 2019

 

$

30

 

 

$

 

 

$

 

 

$

30

 

Charges to expense

 

 

901

 

 

 

 

 

 

 

 

 

901

 

Cash payments

 

 

(65

)

 

 

 

 

 

 

 

 

(65

)

Non-cash utilization

 

 

 

 

 

 

 

 

 

 

 

 

Balance at March 31, 2019

 

$

866

 

 

$

 

 

$

 

 

$

866

 

 

During the quarter ended March 31, 2019, the Company reclassified a facility that was closed in connection with the Material Handling Plan as held for sale as discussed in Note 3. Based on the estimated fair value of this facility (using primarily a third party offer considered to be a Level 2 input), less estimated costs to sell, the Company recognized an impairment charge of $0.9 million during the quarter ended March 31, 2019.

 

In addition to the restructuring charges noted above, the Company has also incurred $0.1 million of other associated costs of the Distribution Transformation Plan during the quarter ended March 31, 2019, which are included in Selling, General, and Administrative expenses in the accompanying Condensed Consolidated Statements of Operations (Unaudited), and are primarily related to third party consulting costs. Additional estimated costs of $0.2 million and $0.9 million are expected to be incurred throughout the remainder of 2019 related to the Ameri-Kart Plan and the Distribution Transformation Plan, respectively.

v3.19.1
Inventories
3 Months Ended
Mar. 31, 2019
Inventory Disclosure [Abstract]  
Inventories

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 30 percent of inventories are valued using the LIFO method of determining cost. All other inventories are valued at 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, 2019 or 2018.

 

Inventories consisted of the following:

 

 

 

March 31,

 

 

December 31,

 

 

 

2019

 

 

2018

 

Finished and in-process products

 

$

29,287

 

 

$

27,960

 

Raw materials and supplies

 

 

13,202

 

 

 

15,636

 

 

 

$

42,489

 

 

$

43,596

 

 

v3.19.1
Other Liabilities
3 Months Ended
Mar. 31, 2019
Other Liabilities Disclosure [Abstract]  
Other Liabilities

7.  Other Liabilities

The balance in other current liabilities is comprised of the following:

 

 

 

March 31,

 

 

December 31,

 

 

 

2019

 

 

2018

 

Customer deposits and accrued rebates

 

$

1,987

 

 

$

3,365

 

Dividends payable

 

 

5,115

 

 

 

5,260

 

Accrued litigation, claims and professional fees

 

 

658

 

 

 

460

 

Current portion of environmental reserves

 

 

822

 

 

 

1,229

 

Other accrued expenses

 

 

5,052

 

 

 

6,387

 

 

 

$

13,634

 

 

$

16,701

 

 

The balance in other liabilities (long-term) is comprised of the following:

 

 

 

March 31,

 

 

December 31,

 

 

 

2019

 

 

2018

 

Lease guarantee contingency

 

$

10,481

 

 

$

10,402

 

Environmental reserves

 

 

3,702

 

 

 

3,702

 

Supplemental executive retirement plan liability

 

 

1,951

 

 

 

2,026

 

Pension liability

 

 

1,246

 

 

 

1,207

 

Deferred gain on sale of assets

 

 

 

 

 

1,237

 

Other long-term liabilities

 

 

1,734

 

 

 

1,220

 

 

 

$

19,114

 

 

$

19,794

 

 

v3.19.1
Goodwill and Intangible Assets
3 Months Ended
Mar. 31, 2019
Goodwill And Intangible Assets Disclosure [Abstract]  
Goodwill and Intangible Assets

8.  Goodwill and Intangible Assets

The change in goodwill for the quarter ended March 31, 2019 was as follows:

 

 

 

Distribution

 

 

Material

Handling

 

 

Total

 

January 1, 2019

 

$

505

 

 

$

58,563

 

 

$

59,068

 

Foreign currency translation

 

 

 

 

 

222

 

 

 

222

 

March 31, 2019

 

$

505

 

 

$

58,785

 

 

$

59,290

 

 

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 has indefinite-lived trade names which had a carrying value of $9.8 million at both March 31, 2019 and December 31, 2018.

v3.19.1
Net Income per Common Share
3 Months Ended
Mar. 31, 2019
Earnings Per Share [Abstract]  
Net Income per Common Share

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,

 

 

 

2019

 

 

2018

 

Weighted average common shares outstanding basic

 

 

35,388,989

 

 

 

30,518,715

 

Dilutive effect of stock options and restricted stock

 

 

305,841

 

 

 

470,546

 

Weighted average common shares outstanding diluted

 

 

35,694,830

 

 

 

30,989,261

 

 

Options to purchase 655,086 shares of common stock that were outstanding for the quarter ended March 31, 2019, and 366,772 for the quarter ended March 31, 2018, 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.

v3.19.1
Stock Compensation
3 Months Ended
Mar. 31, 2019
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]  
Stock Compensation

10.  Stock Compensation

The Company’s Amended and Restated 2017 Incentive Stock Plan (the “2017 Plan”) authorizes the Compensation Committee of the Board of Directors 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. Options granted and outstanding vest over the requisite service period and expire ten years from the date of grant.

In March 2019, the Company granted 235,474 stock options with a weighted average exercise price of $18.54 per share and a weighted average fair value of $5.78 per share. The fair value of options granted is estimated using a binomial lattice option pricing model. Also in March 2019, the Company granted 77,810 and 101,500 time-based and performance-based restricted stock units, respectively, with a weighted average fair value of $18.54 per share.

Stock compensation expense was approximately $1.0 million and $1.1 million for the quarters ended March 31, 2019 and 2018, respectively. These expenses are included in Selling, General and Administrative expenses in the accompanying Condensed Consolidated Statements of Operations (Unaudited). Total unrecognized compensation cost related to non-vested stock-based compensation arrangements at March 31, 2019 was approximately $8.2 million, which will be recognized over the next three years, as such compensation is earned.

v3.19.1
Contingencies
3 Months Ended
Mar. 31, 2019
Commitments And Contingencies Disclosure [Abstract]  
Contingencies

11.  Contingencies

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

Based on current available information, management believes that the ultimate outcome of these matters, 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.

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 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 requires the Company to provide $2 million of financial assurance to the EPA to secure its performance during the estimated three year life of the RI/FS.  In January 2019, the Company provided this assurance as a letter of credit. 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.

Since October 2011, when New Idria was added to the Superfund National Priorities List by the EPA, the Company has recognized $5.9 million of costs, of which approximately $2.9 million has been paid to date. These costs are comprised primarily of negotiation of the AOC, identification of possible insurance resources and other PRPs, estimates to perform the RI/FS, 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, 2019 or 2018. As of March 31, 2019, the Company has a total reserve of $3.0 million related to the New Idria Mine, of which $0.5 million is classified in Other Current Liabilities and $2.5 million in Other Liabilities on the Condensed Consolidated Statements of Financial Position (Unaudited).

It is possible that adjustments to the aforementioned reserves will be necessary as new information is obtained, including after preparation and EPA approval of the work plan for the RI/FS, which is anticipated to occur in the second quarter of 2019. 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, the number and financial condition of other PRPs that may be named as well as the extent of their responsibility for the remediation, and the availability of insurance coverage for these expenses.

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.

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, originally estimated to be approximately $1.6 million. As a result, in 2005, the Company recognized expense of $0.8 million representing its share of the initial estimated project costs, of which approximately $0.5 million has been paid to date. In April 2016, the Company was notified by the County that the original cost estimate may no longer be appropriate due to expanded scope and increased costs of construction and provided a revised estimate of 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, 2019 or 2018. As of March 31, 2019, 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 on the Condensed Consolidated Statements of Financial Position (Unaudited).

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.

Lawn and Garden Indemnification Claim

In connection with the sale of the Lawn and Garden business, as described in Note 4, the Company received Notices of Indemnification Claims in April 2015 and July 2016 (collectively, the “Claims”), alleging breaches of certain representations and warranties under the agreement resulting in alleged losses in the amount of approximately $10 million. As described in Note 4, approximately $8.6 million of the sale proceeds that were placed in escrow were due to be settled in August 2016; however, the release of these funds had been extended pending the resolution of the Claims, which were the subject of a lawsuit in the Delaware Chancery Court.

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 for the quarter ended March 31, 2018. The settlement agreement was finalized in May 2018, and the settlement amount was funded from the escrow account. In addition, 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 in the second quarter of 2018.

Lawn and Garden Lease Guarantee

In connection with the sale of the Lawn and Garden business, as described in Note 4, the Company is a guarantor for one of HC’s facility leases expiring in September 2025 for any remaining rent payments under the lease for which HC is unable to meet its obligations. Current annual rent for the facility is approximately $2 million, and is subject to annual CPI increases throughout the lease term. In connection with the financial risk associated with HC, as described in Note 4, the Company assessed its range of potential obligations under the lease guarantee, and as a result of this analysis, recorded a liability and related pre-tax charge of $10.3 million during the third quarter of 2018. The carrying value of the lease contingency as of March 31, 2019 and December 31, 2018 was $10.5 million and $10.4 million, respectively, which represents the initial liability recorded plus accretion and is included in Other Liabilities on the Condensed Consolidated Statements of Financial Position (Unaudited).

Patent Infringement

On December 11, 2018, No Spill Inc. filed suit against Scepter Manufacturing LLC and Scepter Corporation (“Scepter”) 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. A schedule in the case has not yet issued. Scepter intends to defend itself vigorously in this matter. 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 currently recorded any reserves for this matter.

v3.19.1
Long-Term Debt and Loan Agreements
3 Months Ended
Mar. 31, 2019
Debt Disclosure [Abstract]  
Long-Term Debt and Loan Agreements

12.  Long-Term Debt and Loan Agreements

Long-term debt consisted of the following:

 

 

 

March 31,

 

 

December 31,

 

 

 

2019

 

 

2018

 

Loan Agreement

 

$

 

 

$

 

4.67% Senior Unsecured Notes due 2021

 

 

40,000

 

 

 

40,000

 

5.25% Senior Unsecured Notes due 2024

 

 

11,000

 

 

 

11,000

 

5.30% Senior Unsecured Notes due 2024

 

 

15,000

 

 

 

15,000

 

5.45% Senior Unsecured Notes due 2026

 

 

12,000

 

 

 

12,000

 

 

 

 

78,000

 

 

 

78,000

 

Less unamortized deferred financing costs

 

 

1,113

 

 

 

1,210

 

 

 

$

76,887

 

 

$

76,790

 

 

In March 2017, the Company entered into a Fifth Amended and Restated Loan Agreement (the “Loan Agreement”).  The Loan Agreement replaced the pre-existing $300 million senior revolving credit facility with a $200 million facility and extended the term from December 2018 to March 2022. The Company also holds Senior Unsecured Notes (“Notes”), which range in face value from $11 million to $40 million, with interest rates ranging from 4.67% to 5.45%, payable semiannually, and maturing between 2021 and 2026. At March 31, 2019, $78 million of the Notes were outstanding.  

Under the terms of the Loan Agreement, the Company may borrow up to $200 million, reduced for letters of credit issued. As of March 31, 2019, the Company had $194.0 million available under the Loan Agreement. The Company had $6.0 million of letters of credit issued related to insurance and other contracts requiring financial assurance in the ordinary course of business at March 31, 2019. Borrowings under the Loan Agreement bear interest at the LIBOR rate, prime rate, federal funds effective rate, the Canadian deposit offered rate, or the euro currency reference rate depending on the type of loan requested by the Company, plus the applicable margin as set forth in the Loan Agreement.

The weighted average interest rate on borrowings under the Company’s long-term debt was 6.23% and 5.22% for the quarters ended March 31, 2019 and 2018, respectively, which includes a quarterly facility fee on the used and unused portion, as well as amortization of deferred financing costs. 

As of March 31, 2019, the Company was in compliance with all of its debt covenants associated with its Loan Agreement and Notes. The most restrictive financial covenants for all of the Company’s debt are an interest coverage ratio (defined as earnings before interest, taxes, depreciation and amortization, as adjusted, divided by interest expense) and a leverage ratio (defined as total debt divided by earnings before interest, taxes, depreciation and amortization, as adjusted).

v3.19.1
Retirement Plans
3 Months Ended
Mar. 31, 2019
Compensation And Retirement Disclosure [Abstract]  
Retirement Plans

13.  Retirement Plans

The Company and certain of its subsidiaries have pension and profit sharing plans covering substantially all of their employees. The Company’s defined benefit pension plan, The Pension Agreement between Akro-Mils and United Steelworkers of America Local No. 1761-02, provides benefits primarily based upon a fixed amount for each year of service. The plan was frozen in 2007, and thus benefits for service were no longer accumulated after this date.

Net periodic pension cost is as follows:

 

 

 

For the Quarter Ended March 31,

 

 

 

2019

 

 

2018

 

Interest cost

 

$

60

 

 

$

56

 

Expected return on assets

 

 

(46

)

 

 

(79

)

Amortization of net loss

 

 

24

 

 

 

21