SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

Form 10-Q

[X]

 

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

 

forFor the quarterly period ended March 31, 2004.June 30, 2004

 

OR

[   ]

 

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

 

forFor the transition period from__________ to__________.to__________

 

Commission File Number 1-8524
Myers Industries, Inc.
(Exact name of registrant as specified in its charter)

 

 

 

Ohio
(State or other jurisdiction of
incorporation or organization)

 

34-0778636
(IRS Employer Identification Number)

 

  

1293 South Main Street
Akron, Ohio
(Address of principal executive offices)

 


44301
(Zip code)

 

(330) 253-5592
(Registrant's telephone number, including area code)

not applicable
(Former name, former address and former fiscal year, if changed since last report)

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

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

    As of March 31,June 30, 2004, the number of shares outstanding of the issuer's Common Stock was 30,215,981.30,304,826.

 

Table of Contents

Part I -- Financial Information

 

Item 1. Financial Statements

 

Condensed Statement of Consolidated Financial Position

 

Condensed Statement of Consolidated Income

 

StatementStatements of Consolidated Cash Flows

 

Statement of Shareholders' Equity

 

Notes to Financial Statements

 

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

Item 3. Quantitative and Qualitative Disclosure About Market Risk

Item 4. Controls and Procedures

Part II -- Other Information

 
 

Item 11. Legal Proceedings

 

Item 64. Submission of Matter of a Vote of Security Holders

Item 5. Other Information

Item 6. Exhibits and Reports ofon Form 8-K

Signature

 

Exhibit Index

 

-1-

Part I - Financial Information


Item 1.  Financial Statements

Myers Industries, Inc.
Condensed Statement of Consolidated Financial Position
As of March 31,June 30, 2004 and December 31, 2003

March 31,

December 31,

June 30,

December 31,

Assets

2004

2003

2004

2003

Current Assets

Cash

$9,442,414

$5,666,997

$15,163,707

$5,666,997

Accounts receivable-less allowances
of $4,956,000 and $4,245,000,
respectively

  



134,011,055



 



114,038,680

 

Accounts receivable-less allowances
of $5,253,000 and $4,245,000,
respectively

  



130,144,933

 



114,038,680

 

Inventories

Finished and in-process products

63,739,498

61,240,225

65,055,300

61,240,225

Raw materials and supplies

23,444,614

22,613,029

25,277,115

22,613,029

87,184,112

83,853,254

90,332,415

83,853,254

Prepaid expenses

6,919,069

4,374,210

5,216,618

4,374,210

Total Current Assets

237,556,650

207,933,141

240,857,673

207,933,141

Other Assets

Goodwill

261,028,916

224,298,302

261,218,532

224,298,302

Patents and other intangible assets

2,068,762

2,321,584

1,884,160

2,321,584

Other

5,219,380

3,229,351

4,879,717

3,229,351

268,317,058

229,849,237

267,982,409

229,849,237

Property, Plant and Equipment, at Cost

Land

8,710,288

8,461,003

8,551,474

8,461,003

Buildings and leasehold improvements

86,873,667

80,588,395

85,736,822

80,588,395

Machinery and equipment

370,922,357

352,995,191

368,867,091

352,995,191

466,506,312

442,044,589

463,155,387

442,044,589

Less allowances for depreciationand
amortization

  


271,998,527

 


258,200,161

   


272,996,728

 


258,200,161

 

194,507,785

183,844,428

190,158,659

183,844,428

$700,381,493

$621,626,806

$698,998,741

$621,626,806

 

-2-

Part I - Financial Information

Myers Industries, Inc.
Condensed Statement of Consolidated Financial Position
As of March 31,June 30, 2004 and December 31, 2003

March 31,

December 31,

Liabilities and Shareholders' Equity

2004

2003

Current Liabilities

    Accounts payable

  

$50,188,215

   

$39,731,250

 

    Accrued expenses

        Employee compensation

29,605,792

30,975,836

        Taxes, other than income taxes

3,328,980

2,874,171

        Accrued interest

2,218,903

608,575

        Other

19,511,710

15,533,529

    Current portion of long-term debt

3,513,163

4,452,137

 Total Current Liabilities

108,366,763

94,175,498

Long-term Debt, less current portion

268,704,850

211,002,691

Deferred Income Taxes

24,828,162

21,924,269

Shareholders' Equity


    Serial Preferred Shares
        (authorized 1,000,000)

  


0


  


0

 

    Common Shares, without par value
        (authorized 60,000,000 shares;
        outstanding 30,215,981 and
        30,183,256 shares, respectively)




 




18,388,383



  




18,369,240

 

    Additional paid-in capital

217,253,092

217,019,810

    Accumulated other comprehensive
        income

  


7,294,323

   


10,934,860

 

    Retained income

55,545,920

48,200,438

298,481,718

294,524,348

$700,381,493

$621,626,806

June 30,

December 31,

Liabilities and Shareholders' Equity

2004

2003

Current Liabilities

    Accounts payable

  

$54,000,997

   

$39,731,250

 

    Accrued expenses

        Employee compensation

29,767,129

30,975,836

        Taxes, other than income taxes

3,825,056

2,874,171

        Accrued interest

660,329

608,575

        Other

14,197,143

15,533,529

    Current portion of long-term debt

2,709,454

4,452,137

 Total Current Liabilities

105,160,108

94,175,498

Long-term Debt, less current portion

266,607,183

211,002,691

Deferred Income Taxes

25,354,614

21,924,269

Shareholders' Equity

    Serial Preferred Shares
        (authorized 1,000,000)

  


0

   


0

 

    Common Shares, without par value
        (authorized 60,000,000 shares;
        outstanding 30,304,826 and
        30,183,256 shares, respectively)

  




18,443,399

   




18,369,240

 

    Additional paid-in capital

217,973,808

217,019,810

    Accumulated other comprehensive
        income

  


5,325,473

   


10,934,860

 

    Retained income

60,134,156

48,200,438

301,876,836

294,524,348

$698,998,741

$621,626,806

 

-3-

Part I - Financial Information

Myers Industries, Inc.
Condensed Statement of Consolidated Income
For the Three Months Ended March 31, 2004 and 2003

Three Months Ended

Six Months Ended

June 30,

June 30,

2004

2003

2004

2003


Net sales


$196,754,858


$168,964,147


$382,273,385


$332,184,401

Cost and expenses

    Cost of sales

138,158,853

119,240,566

262,619,428

228,617,550

    Operating expenses

45,844,514

41,930,011

89,750,649

81,867,732

    Interest expense, net

3,032,366

2,661,312

6,176,012

5,164,024

Total costs & expenses

187,035,733

163,831,889

358,546,089

315,649,306

Income before income taxes

9,719,125

5,132,258

23,727,296

16,535,095

Income taxes

3,616,000

1,856,000

8,768,000

6,067,000

Net income

$6,103,125

$3,276,258

$14,959,296

$10,468,095

Net income per Common Share

$.20

$.11

$.49

$.35

Dividends per Common Share

$.05

$.05

$.10

$.10

Weighted average number of
     Common Shares outstanding


30,266,300


30,104,277


30,238,574


30,094,844


   

March 31,

   

March 31,

  
   

2004

   

2003

  

          

Net Sales

  

$185,518,527

   

$163,220,254

  
          

Costs of Sales

  

124,460,575

   

109,376,984

  
          

Gross Profit

  

61,057,952

   

53,843,270

 

 

Operating Expenses

  

43,906,135

   

39,937,720

  

Operating Income

  


17,151,817

   


13,905,550


 

Interest Expense

  

3,143,646

   

2,502,713

  

          

Income Before Income Taxes

  

14,008,171

   

11,402,837

  
          

Income Taxes

  

5,152,000

   

4,211,000

  

          

Net Income

  

$8,856,171

   

$7,191,837

  

          
          

Net income per Common Share

  

$0.29

   

$0.24

  

Dividends per Common Share

  

$0.05

   

$0.05

  
          

Weighted average number of

         

   Common Shares outstanding

  

30,205,201

   

30,083,688

  

 

-4-

Part I - Financial Information

Myers Industries, Inc.
Statement of Consolidated Cash Flows
For the ThreeSix Months Ended March 31,June 30, 2004 and 2003

 

March 31,

 

March 31,

  

June 30,

 

June 30,

 
 

2004

 

2003

  

2004

 

2003

 

CASH FLOWS FROM OPERATING ACTIVITIES

     

Cash Flows From Operating Activities

     

Net income

 

$8,856,171

 

$7,191,837

  

$14,959,296

 

$10,468,095

 

Items not affecting use of cash

          

Depreciation

 

9,095,825

 

8,931,239

  

18,312,955

 

18,143,323

 

Amortization of other intangible assets

 

723,603

 

280,543

  

1,114,431

 

608,125

 

Deferred taxes

 

1,521,775

 

985,017

  

2,077,035

 

1,561,904

 

Cash flow provided by (used for) working capital

          

Accounts receivable

 

(11,266,025

)

 

(11,223,716

)

  

(7,652,242

)

 

(1,588,140

)

 

Inventories

 

(189,899

)

 

2,001,623

  

(3,578,207

)

 

3,772,008

 

Prepaid expenses

 

(1,527,873

)

 

1,369,067

  

147,135

 

(676,188

)

 

Accounts payable and accrued expenses

 

6,841,126

 

(5,799,104

)

  

4,881,013

 

(15,713,473

)

 

          

Net cash provided by operating activities

 

14,054,703

 

3,736,506

  

30,261,416

 

16,575,654

 
          

CASH FLOWS FROM INVESTING ACTIVITIES

     

Cash Flows From Investing Activities

     

Acquisition of business, net
of cash acquired


(33,814,682


)


0

(34,918,395

)

0

Additions to property, plant and
equipment, net


(5,374,979


)


(5,728,439


)


(10,813,378


)


(8,501,127


)

Other

700,045

(158,196

)

278,867

(585,208

)

          

Net cash used for investing activities

 

(38,489,616

)

 

(5,886,635

)

  

(45,452,906

)

 

(9,086,335

)

 
          

CASH FLOWS FROM FINANCING ACTIVITIES

     

Cash Flows From Financing Activities

     

Long-term debt repayment

 

0

 

(4,000,000

)

  

0

 

(8,000,000

)

 

Net borrowing (repayment) of credit facility

 

31,005,440

 

12,200,117

  

28,224,857

 

6,302,241

 

Deferred financing costs

 

(1,536,846

)

 

0

  

(1,539,235

)

 

0

 

Cash dividends paid

 

(1,510,689

)

 

(1,504,356

)

  

(3,025,578

)

 

(3,009,859

)

 

Proceeds from issuance of common stock

 

252,425

 

162,032

  

1,028,156

 

352,882

 

          

Net cash provided by (used for) financing activities

 

28,210,330

 

6,857,793

  

24,688,200

 

(4,354,736

)

 

          

INCREASE IN CASH

3,775,417

4,707,664

Increase in Cash

9,496,710

3,134,583

          

CASH AT JANUARY 1

 

5,666,997

 

1,702,334

 

Cash at January 1

 

5,666,997

 

1,702,334

 

          

CASH AT MARCH 31

 

$9,442,414

 

$6,409,998

 

Cash at June 30

 

$15,163,707

 

$4,836,917

 

 

-5-

Part I - Financial Information

Myers Industries, Inc.
Statement of Shareholders' Equity
For the ThreeSix Months Ended March 31,June 30, 2004

 



Comprehensive
Income

 



Common
Stock


Additional
Paid-In
Capital

Accumulative
Other
Comprehensive
Income

 



Retained
Income

 

December 31, 2003

  

$18,369,240

$217,019,810

$10,934,860

 

$48,200,438

 
         

Net income

$8,856,171

     

8,856,171

 
         
         

Foreign currency
   translation
      adjustment

 

(3,640,537



)



(3,640,537



)

         

Comprehensive
    income


$5,215,634

         

Common Stock
    issued


19,143


233,282

        

 

 

Dividends

      

(1,510,689

)

March 31, 2004

  

$18,388,383

$217,253,092

$7,294,323

 

$55,545,920

 

         

 



Comprehensive
Income



Common
Stock


Additional
Paid-In
Capital

Accumulative
Other
Comprehensive
Income

 



Retained
Income

 

December 31, 2003

$18,369,240

$217,019,810

$10,934,860

 

$48,200,438

 
        

Net income

$14,959,296

    

14,959,296

 
        
        

Foreign currency
    translation
       adjustment



(5,609,387)




(5,609,387)

        

Comprehensive
     income


$20,568,683

        

Common Stock
     issued

74,159

953,998

       

 

 

Dividends

     

(3,025,578

)

June 30, 2004

 

$18,443,399

$217,973,808

$5,325,473

 

$60,134,156

 

-6-

Part I - Financial Information

Myers Industries, Inc.
Notes to Financial Statements

(1)     Statement of Accounting Policy

     The accompanying financial statements include the accounts of Myers Industries, Inc. and subsidiaries (Company), and have been prepared without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles have been condensed or omitted pursuant to those rules and regulations, although the Company believes that the disclosures are adequate to make the information not misleading. It is suggested that these financial statements be read in conjunction with the financial statements and notes thereto included in the Company's latest annual report on Form 10-K.

     In the opinion of the Company, the accompanying financial statements contain all adjustments (consisting of only normal recurring accruals) necessary to present fairly the financial position as of
March 31, June 30, 2004, and the results of operations and cash flows for the three and six months ended March 31,June 30, 2004 and 2003. The results of operations for the six months ended June 30, 2004 are not necessarily indicative of the results of operations that will occur for the year ending December 31, 2004.

(2)     Subsequent Event

On July 7, 2004, the Company acquired the operations and assets of Productivity California, Inc. (ProCal), a leading manufacturer of plastic nursery containers and specialty printed containers for professional growers. Based in South Gate, California, ProCal had net sales of approximately $28 million in 2003. The total acquisition cost was approximately $16.5 million including approximately $3.3 million in cash and 942,857 shares of the Company's stock. In addition, for a one-year period ending July 7, 2005, the Company agreed to issue additional shares of common stock in the event that shares issued in connection with the ProCal acquisition are sold at a price below the $14.00 per share value at issuance. In connection with the acquisition the Company also assumed approximately $10 million of ProCal debt. The purchase price will be allocated to the assets acquired and liabilities assumed based upon their estimated fair values when appraisals and additional information become available. The results of ProCal will be included in the consolidated results of operations of the Company from the date of acquisition.

     On July 15, 2004, the Company announced that it was reporting to the U.S. Department of Justice and the Securities and Exchange Commission (SEC) certain international business practices that are believed to be in violation of U.S. and, possibly, foreign laws. The practices, which involved a limited number of customers, related to the invoicing of certain sales to foreign customers of the Company's distribution segment and sales made by a foreign subsidiary to prohibited customers in certain international jurisdictions. These business practices have been discontinued and an investigation, which is not yet completed, is being conducted by outside counsel under the authority of the Audit Committee of the Company's Board of Directors. If the government determines that these incidents were unlawful, the government could take action against the Company and/or some of its employees. The Company will seek to settle any enforcement issues arising from these matters, however, at this time the Company cannot reasonably estimate its potential liability and, therefore, has not recorded any provision for any resulting settlement or potential fines and penalties as of June 30, 2004. Such amounts could be material to the Company's financial statements. The Company believes that the practices in question had no effect on previously filed financial statements, and that the final findings from the investigation will not lead to any restatement of reported financial results.

-7-

Part I - Financial Information

Myers Industries, Inc.
Notes to Financial Statements

(3)     Acquisition

     On March 10, 2004, the Company acquired all of the shares of ATP Automotive, Inc. (ATP), a subsidiary of Applied Tech LLC. ATP and its operating subsidiaries Michigan Rubber Products (MRP) and WEK Industries (WEK) isare a manufacturer of molded rubber and plastic products for the automotive industry with manufacturing facilities in Michigan (MRP) and Ohio (WEK). The acquired businesses had 2003 annual sales of approximately $60 million. The total purchase price was approximately $60$61 million, which includes the assumption of ATP debt outstanding as of the acquisition date. The purchase price will be allocated to the assets acquired and liabilities assumed based upon their estimated fair values when appraisals, other studies and additional information become available. The assets acquired and liabilities assumed were recorded at estimated fair market values. The preliminary allocation of the purchase price and the estimated goodwill are as follows:

(In thousands)

Assets acquired:

    Accounts receivable

$9,996

    Inventory

3,618

    Property, plant & equipment

15,181

    Other

2,712

31,507

Liabilities assumed:

    Long-term debt

(26,045

)

    Other

(10,724

)

(36,769

)

Goodwill

40,027

Less cash acquired

153

Net Cash Paid

$34,918


     The results of ATP's operations are included in the Company's consolidated results of operations from the date of acquisition and are reported within the Company's manufacturing segment.

The following unaudited proforma information presents a summary of consolidated results of operations for the Company and ATP as if the acquisition had occurred January 1, 2003.

Three Months Ended

March 31,

(In thousands,except per share)

2004

2003

Sales

$197,810

$178,225

Net Income
Net Income Per Share

9,259
..31

7,937
..26


-7--8-

Part I - Financial Information

Myers Industries, Inc.
Notes to Financial Statements

Three Months Ended

Six Months Ended

June 30,

June 30,

(In thousands, except per share)

2004

2003

2004

2003

Net Sales


    Sales


$196,755


$184,388


$394,565


$362,612

    Net Income

6,103

4,701

15,362

12,682

    Net Income Per Share

.20

.16

.51

.42

     These unaudited proforma results have been prepared for comparative purposes only and may not be indicative of results of operations which actually would have resulted had the acquisition taken place on January 1, 2003, or of future results.

(3)

(4)     Net Income Per Share


     Net income per share, as shown on the Condensed Statement of Consolidated Income, is determined on the basis of the weighted average number of common shares outstanding during the period, and for all periods shown basic and diluted earnings per share are identical.indentical.


(4)(5)     Supplemental Disclosure of Cash Flow Information

     The Company made cash payments for interest expense of $1,534,000$4,627,000 and $2,559,000$2,508,000 for the three months ended March 31,June 30, 2004 and 2003, respectively. Cash payments for interest totaled $6,161,000 and $5,067,000 for the six months ended June 30, 2004 and 2003, respectively. Cash payments for income taxes totaled $747,000$7,271,000 and $1,030,000$4,513,000 for the three months ended March 31,June 30, 2004 and 2003.2003, respectively. Cash payments for income taxes were $8,018,000 and $5,543,000 for the six months ended June 30, 2004 and 2003, respectively.


(5)(6)     Long-Term DebitDebt and Credit Agreements



     On February 27, 2004, the Company entered into a new unsecured revolving credit facility (the Credit Facility) which enables the Company to borrow up to $225 million, including up to $50 million available for multi-currency loans in freely traded foreign currencies. BorrowingBorrowings under the new Credit Facility were used to refinance the Company's existing Multi-Currency Loan Agreement, fund the acquisition of ATP Automotive, Inc. and for general corporate purposes. Interest is based on the Prime rate or Euro dollar rate (for U.S. or Canadian dollar loans) or Eurocurrency Rate (for other multi-currency loans) plus an applicable margin that varies depending ofon the company'sCompany's ratio of total debt to earnings before interest, taxes, and depreciation and amortization. Related financing costs will be amortized over the term o fof the new Credit Facility which expires in February 2009.

(6)     Retirement Plans

        For the Company's two defined benefit pension plans, the net periodic benefit cost for the three months ended March 31, 2004 and 2003 was as follows:

  

2004

  

2003

 

Service cost

 

$60,078

  

$49,576

 

Interest cost

 

83,443

  

79,823

 

Expected return on assets

 

(86,398

)

 

(59,971

)

Amortization of prior service cost

 

10,694

  

10,694

 

Amortization of a net loss

 

16,884

  

19,187

 

Amortization of transition obligation

 

-0-  

  

(736

)

Net periodic pension cost

 

$84,701

  

$98,573

 

-8--9-

Part I - Financial Information

Myers Industries, Inc.
Notes to Financial Statements


(7)     Retirement Plans

     For the Company's two defined benefit plans, the net periodic benefit cost for the six months ended
June 30, 2004 and 2003 were as follows:

(In thousands)

 

2004

  

2003

 

Service cost

 

$120,156

  

$99,153

 

Interest cost

 

166,886

  

159,646

 

Expected return on assets

 

(172,796

)

 

(119,943

)

Amortization of prior service cost

 

21,388

  

21,388

 

Amortization of a net loss

 

33,768

  

38,374

 

Amortization of transition obligation

 

-0-  

  

(1,473

)

Net periodic pension cost

 

$169,402

  

$197,145

 

     The Company previously disclosed in its financial statements for the year ended December 31, 2003, that it expects to contribute approximately $996,000 to its defined benefit plans in 2004. As of March 31,June 30, 2004, noapproximately $455,000 in contributions have been made, however, the Company still anticipates contributing approximately $996,000 to fund its defined benefit pension plans in 2004.

(7)(8)     Segment Information

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

     The Company's distribution segment is engaged in the distribution of equipment, tools and supplies used for tire servicing and automotive underbody repair. The distribution segment operates domestically through 4039 branches located in major cities throughout the United States and in foreign countries through export and businesses in which the Company holds an equity interest.

     The Company's manufacturing segment designs, manufactures and markets a variety of polymer based plastic and rubber products. These products are manufactured primarily through thevarious molding processprocesses in facilities throughout the United States and Europe.

     Sales to external customers for manufactured plastic products including WEK Industries, were $130.9$126.0 million for the threequarter and $256.9 million for the six months ended March 31,June 30, 2004, while sales to external customers of rubber products including Michigan Rubber Products, were $17.1 million.$27.2 million and $44.3 million for the quarter and year-to-date periods, respectively. In the prior year, sales of plastic products to external customers were $119.5$114.3 million for the threequarter and $233.7 million for the six months ended March 31,June 30, 2003 while sales to external customers of rubber products were $11.8$13.2 million for the quarter.quarter and $25.1 million for the year-to-date periods, respectively.

-10-

Part I - Financial Information

Myers Industries, Inc.
Notes to Financial Statements

(8)     Segment Information (con't)

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

-9-

Part I - Financial Information

Myers Industries, Inc.
Notes to Financial Statements

Three Months Ended

Three Months Ended

Six Months Ended

March 31,

June 30,

June 30,

(In thousands)

2004

2003

2004

2003

2004

2003

Net Sales

Distribution of aftermarket
repair products and services


$37,553


$31,951


$43,600


$41,405


$81,153


$73,356

Manufacturing of polymer products

151,473

134,309

156,959

131,415

308,432

265,724

Intra-segment elimination

(3,507

)

(3,040

)

(3,804

)

(3,856

)

(7,312

)

(6,896

)

$185,519

$163,220

$196,755

$168,964

$382,273

$332,184

Income Before Income Taxes

Distribution of aftermarket repair
products and services


$3,060


$2,335


$4,348


$3,474


$7,408


$5,809

Manufacturing of polymer products

17,632

15,090

11,826

7,359

29,458

22,450

Corporate

(3,540

)

(3,519

)

(3,423

)

(3,040

)

(6,963

)

(6,560

)

Interest expense -- net

(3,144

)

(2,503

)

(3,032

)

(2,661

)

(6,176

)

(5,164

)

$14,008

$11,403


$9,719


$5,132


$23,727


$16,535

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

Results of Operations

     ForNet sales for the quarter ended March 31,June 30, 2004 were $196.8 million, an increase of 16 percent from the $169.0 million reported last year as the Company had sales growth in both of $185.5its business segments. Favorable foreign currency translation, primarily related to the euro, increased second quarter sales by $3.0 million, an increase of 14or 2 percent fromcompared with the prior year and net incomequarter. In addition, the acquisition of $8.9 million, an increase of 23 percent from $7.2 million reported in the first quarter of 2003. Net income per share was $.29, an increase of 21 percent compared with $.24 in the prior year period. On March 10, 2004, the Company acquired ATP Automotive, Inc., (ATP) a manufacturercomprised of molded rubber and plastic products through its subsidiaries Michigan Rubber Products (MRP) and WEK Industries (WEK). On a proforma basis, including the results of the acquired businesses for the full quarter, net sales for the quarter ended March 31, 2004 would have been $197.8 million with net income of $9.3 million or $.31 per share compared with net sales of $178.2 million for the first quarter of 2003 with net income of $7.9 million or $.26 per share.

        The net sales of $185.5 million for the quarter ended March 31, 2004 were the highest of any quarter in the Company's history and reflected stronger demand in both the distribution and manufacturing segments. In addition, favorable foreign currency translation, increased sales by $6.7$16.0 million or 4 percent and contributions from the acquisition of MRP and WEK increased sales by $4.4 million or 39 percent. Without the impact of the favorable foreign currency translation and acquired businesses, net sales would have increased $11.2 million or 7 percent. Sales in the distribution segment increased 18 percent to $37.6

-10-

Myers Industries, Inc.
Part I - Financial Information


million reflecting higher unit volumes from increased sales to the auto dealer market and strong demand from tire dealers for both equipment and supplies. In the manufacturing segment, sales increased 13 percent to $151.5 million; however, withoutExcluding the impact of foreign currency translation or acquired businesses,and acquisitions, total sales increased only$8.8 million or 5 percent and sales in the manufacturing segment increased $6.5 million or 5 percent. The increaseimprovement in manufacturing segment sales was primarily the result of higher volume as the Company experienced positive growthcontinued to experience strong demand in nearly allmost of its major markets. In the distribution segment sales increased $2.2 million or 5 pe rcent on the strength of higher unit volumes for both supplies and equipment

-11-

Part I - Financial Information

Myers Industries, Inc.
Notes to Financial Statements

     For the six months ended June 30, 2004, net sales were $382.3 million, an increase of $50.1 million or 15 percent over the prior year. Favorable foreign currency translation increased sales by $9.7 million or 3 percent compared to the prior year period and the acquisition of MRP and WEK added sales of $20.4 million in the current year. Without the benefit of acquired companies and foreign currency translation, sales for the six months ended June 30, 2004 increased $20 million or 6 percent as the Company experienced sales growth in both business segments. In the manufacturing segment, sales increased by $42.7 million or 16 percent; however, without the impact of foreign currency translation or acquired businesses, sales increased $12.8 million or 5 percent primarily due to higher unit volume. Sales in the distribution segment increased $7.8 million or 11 percent also reflecting higher unit sales.

     Cost of sales increased $15.1$18.9 million or 14 percentfor the quarter and $34.0 million for the six months ended June 30, 2004 reflecting the higher sales volume as well as increased costsreported for raw materialseach period compared withto the prior year. Gross profit, expressed as a percent of sales, was virtually unchangedconsistent between years at 32.929.8 percent for the quarter and 31.3 percent for the six months ended June 30,2004 compared to 33.0with 29.4 percent inand 31.2 percent for the prior year.year quarter and six months, respectively . In the distribution segment, relatively stable selling prices and costs resulted in consistent gross profit margins between years. In the manufacturing segment, margins were also consistent as slightly higher selling prices and improved capacity utilization offset an increase inincreased plastic resin raw material costs.costsfor the trhee and six month periods ended June 30, 2004.

     Total operating expenses increased $3.9 million or 9 percent for the quarter ended March 31,June 30, 2004 compared to the prior year. Foreign currency translation accounted for approximately $1.1 million of this increase and the acquisition of MRP and WEK increased $4.0operating expenses by an additional $1.9 million. Excluding the impact of foreign currency translation and acquired companies, operating expenses increased only 2 percent due to increased selling expenses related to higher sales volume. Expressed as a percentage of sales, operating expenses were reduced to 23.3 percent from 24.8 percent reflecting operating efficiency initiatives and improved leverage of fixed expenses. For the six months ended June 30, 2004, operating expenses increased $7.9 million or 10 percent compared towith the prior year period. Approximately $2.4 million or 6044 percent of this increase was due to the impact of foreign currency translation. In addition, the Company experienced increased freight and selling expensestranslation with additional increases of $2.3 million related to the acquired businesses. E xcluding these items, operating expenses increased by $2.1 million or 3 percent, primarily due to higher sales volumes experienced in the current year.selling costs. Expressed as a percent of sales operating expenses were reduced to 23.7 percent for the quartersix months ended March 31,June 30, 2004 declined to 23.5 percent compared with 24.5to 24.6 percent in the prior yearyear.

     Net interest expense increased $.614 percent to $3.0 million or 26 percentin the quarter ended June 30, 2004, compared withto $2.7 million in the prior year. For the six months June 30, 2004 interest expense increased $1.0 million to $6.2 million. The higher interest expense in the current year period. The increaseperiods was primarily the result of higher interest rates, particularly for the $100 million of senior notes at 6.08 percent and 6.81 percent issued in December 2003. In addition, the Company increased borrowing by approximately $60 million in March 2004 in connection with the ATP acquisition.

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

     Income taxes as a percent of income before taxes was virtually unchanged at 36.8increased slightly to 37.2 percent for the quarter ended March 31,June 30, 2004 compared with 36.9to 36.2 percent in the prior year. The increase was the result of the impact of foreign tax differences. For the six months ended June 30, 2004, the effective tax rate of 37.0 percent was virtually identical with the prior year

-12-

Part I - Financial Information

Myers Industries, Inc.
Notes to Financial Statements

Liquidity and Capital Resources

     Cash provided by operating activities was $14.1$30.3 million for the quartersix months ended March 31,June 30, 2004 compared with $3.7$16.6 million for the same period in the prior year. The increased cash flow was the result of increased net income and strong working capital management. During the quarter, total debt was reduced by $2.9 million to $269.3 million, however, compared with December 31, 2003 debt has increased $56.8$53.8 million as a result of the acquisition of ATP. Debt as a percentage of total capitalization increased to 47 percent at March 31,June 30, 2004 compared with 42 percent at December 31, 2003. At
March 31, June 30, 2004, the Company had working capital of $129.2$135.7 million and a current ratio of 2.2.2.3.

     On February 27, 2004, the Company entered into a new five year, $225 million unsecured revolving credit facility. Borrowings under the new credit facility were used to refinance the Company's then outstanding bank debt of $98.9 million and fund the acquisition of ATP for approximately $60$61 million. At March 31,June 30, 2004, the Company had approximately $63$65 million available under the new credit facility.

-11-

Part I - Financial Information
Myers Industries, Inc.


     Capital expenditures for the quartersix months ended June 30, 2004 were $5.4$10.8 million and are expected to be in the range of $20 million to $25 million for the full year. Management believes that cash flows from operations and available credit facilities will be sufficient to meet expected business requirements including capital expenditures, dividends, working capital and debt service.

     On July 15, 2004, the Company announced that it was reporting to the U.S. Department of Justice and the Securities and Exchange Commission (SEC) certain international business practices that are believed to be in violation of U.S. and, possibly, foreign laws. The practices, which involved a limited number of customers, related to the invoicing of certain sales to foreign customers of the Company's distribution segment and sales made by a foreign subsidiary to prohibited customers in certain international jurisdictions. These business practices have been discontinued and an investigation, which is not yet completed, is being conducted by outside counsel under the authority of the Audit Committee of the Company's Board of Directors. If the government determines that these incidents were unlawful, the government could take action against the Company and/or some of its employees. The Company will seek to settle any enforcement issues arising from these matters, however, at this time the Company cannot reasonably estimate its potential liability and, therefore, has not recorded any provision for any resulting settlement or potential fines and penalties as of June 30, 2004. Such amounts could be material to the Company's financial statements. The Company believes that the practices in question had no effect on previously filed financial statements, and that the final findings from the investigation will not lead to any restatement of reported financial results.


Item 3.  Quantitative and Qualitative Disclosure About Market Risk

     The Company has financing arrangements that require interest payments based on floating interest rates. As such, the Company's financial results are subject to changes in the market rate of interest. Our objective in managing the exposure to interest rate changes is to limit the volatility and impact of rate changes on earnings while maintaining the lowest overall borrowing cost. At present, the Company has not entered into any interest rate swaps or other derivative instruments to fix the interest rate on any portion of its financing arrangements with floating rates.

-13-

Part I - Financial Information

Myers Industries, Inc.
Notes to Financial Statements

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

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

Item 4.     Controls and Procedures

     
As of the end of the period covered by this report, the Company carried out an evaluation, under the supervision and with the participation of the Company's management, including the Company's Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Company's disclosure controls and procedures pursuant to Exchange Act rule 13a-14. Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the Company's disclosure controls and procedures were effective as of March 31,June 30, 2004. There have been no significant changes in the Company's internal controls or in other factors that could significantly affect internal controls subsequent to June 30, 2004.

-14-

Part II - Other Information

Myers Industries, Inc.


Item 1.     Legal Proceedings

     On July 15, 2004, the Company announced that it was reporting to the U.S. Department of Justice and the Securities and Exchange Commission (SEC) certain international business practices that are believed to be in violation of U.S. and, possibly, foreign laws. The practices, which involved a limited number of customers, related to the invoicing of certain sales to foreign customers of the Company's distribution segment and sales made by a foreign subsidiary to prohibited customers in certain international jurisdictions. These business practices have been discontinued and an investigation, which is not yet completed, is being conducted by outside counsel under the authority of the Audit Committee of the Company's Board of Directors. If the government determines that these incidents were unlawful, the government could take action against the Company and/or some of its employees. The Company will seek to settle any enforcement issues arising from these matters, however, at this time the Company cannot reasonably estimate its potential liability and, therefore, has not recorded any provision for any resulting settlement or potential fines and penalties as of June 30, 2004. Such amounts could be material to the Company's financial statements. The Company believes that the practices in question had no effect on previously filed financial statements, and that the final findings from the investigation will not lead to any restatement of reported financial results.

Item 4.     Submission of Matters to a Vote of Security Holders.

The Annual Meeting of Shareholders was held on April 21, 2004, and the following matters were voted on at that meeting.

1.

At the meeting, nine Directors were elected. The results of this voting are as follows:


Name of Director


Votes for

Votes

Withheld

   

Stephen E. Myers

25,461,627

2,722,036

Milton I. Wiskind

25,426,336

2,757,327

Karl S. Hay

25,561,754

2,621,909

Richard P. Johnston

25,969,805

2,213,858

Richard Osborne

25,996,386

2,187,279

Jon H. Outcalt

25,595,724

2,587,940

Michael Kane

26,078,359

2,105,305

Edward Kissel

26,087,451

2,096,213

Keith A. Brown

25,599,723

2,583,941

Item 5.     Other Information.

Effective April 23, 2004, Kevin C. O'Neil was appointed by the Board of Directors to the positions of Vice President, General Counsel and Assistant Secretary. Previously he was the General Counsel and Assistant Secretary.

-15-

Part II - Other Information

Myers Industries, Inc.



Item 6.     Exhibits and Reports on Form 8-K

            (a) Exhibits (see Exhibit Index page, below)

            (b)Reports on Form 8-K

                (1) Form 8-K filed with the Commission on April 23, 2004 whereby the registrant
                issued a press release announcing earnings results for the quarter ended March 31, 2004.

                (2) Form 8-K/A filed with the Commission on April 23, 2004, whereby the registrant
                issued a press release announcing earnings results for the quarter ended March 31, 2004.

 

-12-

Part II - Other Information
Myers Industries Inc.

Item 1

Legal Proceedings

Reference is made to Item 3 of the Form 10-K for the period ended December 31, 2003

Item 6

Exhibits and Reports on Form 8-K

(a)  Exhibits

(b) Reports on Form 8-K

    (1)    Form 8-K filed with the Commission on January 24, 2004, whereby the registrant issued a press release announcing the date of the fourth quarter and fiscal 2003 earnings release.

    (2)    Form 8-K filed with the Commission on February 12, 2004, whereby the registrant issued a press release announcing earnings results for the year ended December 31, 2003.

    (3)    Form 8-K filed with the Commission on February 17, 2004, whereby the registrant issued a press release announcing that it had signed an agreement to acquire Michigan Rubber Products and WEK Industries.

    (4)    Form 8-K filed with the Commission on February 27, 2004, whereby the registrant issued a press release announcing that it had closed on a five-year $225 million senior unsecured revolving credit facility.

    (5)    Form 8-K filed with the Commission on March 11, 2004, whereby the registrant issued a press release announcing that it had closed on the acquisition of ATP Automotive, Inc., comprised of Michigan Rubber Products, Inc. and WEK Industries, Inc.

 









SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this
report to be signed on its behalf by the undersigned thereunto duly authorized.

   

MYERS INDUSTRIES, INC.

       

MayDate:

  August 6, 2004

 

By:

 /s//s/ Gregory J. Stodnick

Date

Gregory J. Stodnick

Vice President-Finance

Financial Officer (Duly Authorized

Officer and Principal Financial

And Accounting Officer)

 

 


Exhibit Index

3(a)

Myers Industries, Inc. Amended and Restated Articles of Incorporation. Reference is made to Exhibit (3)(a) to Form 10-Q filed with the Commission on May 17, 1999.

3(b)

Myers Industries, Inc. Amended and Restated Code of Regulations. Reference is made to Exhibit (3)(b) to Form 10-K filed with the Commission on March 26, 2003.

10(a)

Myers Industries, Inc. Amended and Restated Employee Stock Purchase Plan. Reference is made to Exhibit 10(a) to Form 10-K filed with the Commission on March 30, 2001.

10(b)

Form of Indemnification Agreement for Directors and Officers. Reference is made to Exhibit 10(b) to Form 10-K filed with the Commission on March 30, 2001.*

10(c)

Myers Industries, Inc. Amended and Restated 1992 Stock Option Plan. Reference is made to Exhibit 10(c) to Form 10-K filed with the Commission on March 30, 2001.*

10(d)

Myers Industries, Inc. Amended and Restated Dividend Reinvestment and Stock Purchase Plan. Reference is made to Exhibit 10(d) to Form 10-K filed with the Commission on March 30, 2001.

10(e)

Myers Industries, Inc. 1997 Incentive Stock Plan. Reference is made to Exhibit 10.2 to Form S-8 (Registration Statement No. 333-90367) filed with the Commission on November 5, 1999.*

10(f)

Myers Industries, Inc. Amended and Restated 1999 Incentive Stock Plan. Reference is made to Exhibit 10(f) to Form 10-Q filed with the Commission on May 6, 2003.*

10(g)

Myers Industries, Inc. Executive Supplemental Retirement Plan. Reference is made to Exhibit (10)(g) to Form 10-K filed with the Commission on March 26, 2003.*

10(h)

Employment Letter between Myers Industries, Inc. and John C. Orr dated February 14, 2003. Reference is made to Exhibit 10(h) to Form 10-Q filed with the Commission on May 6, 2003.*

10(i)

Change of Control Agreement between Myers Industries, Inc. and John C. Orr dated February 14, 2003. Reference is made to Exhibit 10(i) to Form 10-Q filed with the Commission on May 6, 2003.*

10(j)

Non-Disclosure and Non-Competition Agreement between Myers Industries, Inc. and John C. Orr dated July 18, 2000. Reference is made to Exhibit 10(j) to Form 10-Q filed with the Commission on May 6, 2003.*

10(k)

Supplemental Compensation Agreement for Milton I. Wiskind dated April 25, 1996. Reference is made to Exhibit (10)(h) to Form 10-K filed with the Commission on March 26, 2003.*

10(l)

Employment Contract between Myers Europe, SA (fka Myers AE, SA) and Jean-Paul Lesage dated February 1, 1999. Reference is made to Exhibit (10)(i) to Form 10-K filed with the Commission on March 26, 2003.*

10(m)

Description of the terms of employment between Myers Industries, Inc. and Kevin C. O'Neil dated June 10, 2003. Reference is made to Exhibit (10)(j) to Form 10-K filed with the Commission on March 26, 2003.*

10(n)

Amended and Restated Loan Agreement between Myers Industries, Inc. and Banc One, NA, Agent dated as of February 27, 2004. Reference is made to Exhibit 10(n) to Form 10-K filed with the Commission on March 15, 2004

10(o)

First Amendment to Amended and Restated Loan Agreement between Myers Industries, Inc. and Banc One, NA, Agent, dated as of June 18, 2004.

10(p)

Note Purchase Agreement between Myers Industries, Inc. and the Note Purchasers, dated December 12, 2003, regarding the issuance of (i) $65,000,000 of 6.08% Series 2003-A Senior Notes due December 12, 2010, and (ii) $35,000,000 of 6.81% Series 2003-A Senior Notes due December 12, 2013. Reference is made to Exhibit 10(o) to Form 10-K filed with the Commission on March 15, 2004.

21

Myers Industries, Inc., Direct and Indirect Subsidiaries as of July 7, 2004

31.1

Certification of Stephen E. Myers, President and Chief Executive Officer of Myers Industries, Inc, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2

Certification of Gregory J. Stodnick, Vice President-Finance (Chief Financial Officer) of Myers Industries, Inc., pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32

Certifications of Stephen E. Myers, President and Chief Executive Officer, and Gregory J. Stodnick, Vice President--Finance (Chief Financial Officer), of Myers Industries, Inc. pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.


______________
* Indicates executive compensation plan or arrangement.

 

Exhibit 31.1

Certification Per Section 302 of the Sarbanes-Oxley Act of 2003


       I, Stephen E. Myers, Chief Executive Officer of Myers Industries, Inc., certify that:

          1. I have reviewed this quarterly report on Form 10-Q of Myers Industries, Inc.;

          2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;



          3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, , and for, the periods presented in this quarterly report;

          4. The registrant's other certifying officers(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e); and 15d-15(e)) for the registrant and we have:

              a) Designed such disclosure controls and procedures or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;

              b) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

              c) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

          5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):

              a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

              b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls over financial reporting.

Date: MayAugust 6, 2004

/s/ Stephen E. Myers

 

Stephen E. Myers, Chief Executive Officer

 

 

Exhibit 31.2


Certification Per Section 302 of the Sarbanes-Oxley Act of 2003


       I, Gregory J. Stodnick, Chief Financial Officer of Myers Industries, Inc., certify that:

          1. I have reviewed this quarterly report on Form 10-Q of Myers Industries, Inc.;

          2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;

          3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report

          4. The registrant's other certifying officers(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e); and 15d-15(e)) for the registrant and we have:

              a) Designed such disclosure controls and procedures or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;

              b) Evaluated the effectiveness of the registrant'sregistrants's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

              c) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

          5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):

              a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

              b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls over financial reporting.

Date: MayAugust 6, 2004

/s/ Gregory J Stodnick

 

Gregory J Stodnick, Chief Financial Officer

Exhibit 32



CERTIFICATIONS
PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002



       In connection with the Quarterly Report of Myers Industries, Inc. (the Company) on
Form 10-Q for the period ended March 31,June 30, 2004, as filed with the Securities and Exchange Commission on the date hereof (the Report), I, Stephen E. Myers, Chief Executive Officer of
the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906
of the Sarbanes-Oxley Act of 2002, and to my knowledge:

            (1) The Quarterly Report on Form 10-Q of the Company for the period ended
            March 31,June 30, 2004 which this certification accompanies fully complies with the
            requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934;
            and

            (2) The information contained in the Report fairly presents, in all material
            respects, the financial condition and results of operations of the Company.

     

/s/ Stephen E. Myers

     

Stephen E. Myers, Chief Executive Officer

     

Dated: MayAugust 6, 2004




       In connection with the Quarterly Report of Myers Industries, Inc. (the Company) on
Form 10-Q for the period ended March 31,June 30, 2004, as filed with the Securities and Exchange Commission on the date hereof (the Report), I, Gregory J. Stodnick, Vice President-Finance
(Chief Financial Officer) of the Company, certify, pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, and to my knowledge:

            (1) The Quarterly Report on Form 10-Q of the Company for the period ended
            March 31,June 30, 2004 which this certification accompanies fully complies with the
            requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934;
            and

            (2) The information contained in the Report fairly presents, in all material
            respects, the financial condition and results of operations of the Company.

     

/s/ Gregory J. Stodnick

     

Gregory J. Stodnick, Vice President-Finance

     

Dated: MayAugust 6, 2004