SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

Form 10-Q



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

For the quarterly period ended ~~September 30, 2012~~March 31, 2013



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

For the transition period from to

Commission File Number 1-8524

Myers Industries, Inc.

(Exact name of registrant as specified in its charter)



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

1293 South Main Street
Akron, Ohio	44301
(Address of principal executive offices)	(Zip code)

(330) 253-5592

(Registrant’s telephone number, including area code)

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 þ No o.

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes þ No o

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



Large accelerated filer o	Accelerated filer þ	Non-accelerated filer o	Smaller reporting company o

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

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.



Class		Outstanding as of ~~October~~April 25, ~~2012~~2013
Common Stock, without par value		~~33,754,516~~33,464,499 shares

Table of contents

Table of Contents



Part I — Financial Information

Item 1. Financial Statements

Condensed Consolidated Statements of Income ~~and~~(Unaudited)	1

Consolidated Statements of Comprehensive Income (Unaudited)	12

Condensed Consolidated Statements of Financial Position	13

Condensed Consolidated Statement of Shareholders’ Equity (Unaudited)	5

Condensed Consolidated Statements of Cash Flows (Unaudited)	2

~~Condensed Consolidated Statement of Shareholders’ Equity (Unaudited)~~	26

Notes to Unaudited Condensed Consolidated Financial Statements	37

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	516

Item 3. Quantitative and Qualitative Disclosure About Market Risk	919

Item 4. Controls and Procedures	1020

Part II — Other Information

Item 1. Legal Proceedings	1121

Item 6. Exhibits	1121

Signature	1121

Exhibit 2110 (s)
Exhibit 31(a)
Exhibit 31(b)
Exhibit 32
EX-101 INSTANCE DOCUMENT
EX-101 SCHEMA DOCUMENT
EX-101 CALCULATION LINKBASE DOCUMENT
EX-101 LABELS LINKBASE DOCUMENT
EX-101 PRESENTATION LINKBASE DOCUMENT
EX-101 DEFINITION LINKBASE DOCUMENT

Table of contents

Part I — Financial Information

Item 1. Financial Statements

~~MYERS INDUSTRIES, INC. AND SUBSIDIARIES~~Myers Industries, Inc. and Subsidiaries

Condensed Consolidated Statements of Income ~~and Comprehensive Income~~ (Unaudited)

~~For the Three and Nine Months Ended September 30, 2012 and 2011~~

(Dollars in thousands, except per share data)


	For the Three Months Ended					For the Nine Months Ended				For the Three Months Ended
	September 30, 2012		September 30, 2011			September 30, 2012		September 30, 2011		March 31, 2013		March 31, 2012
Net sales	$	197,290	$	190,332		$	577,180	$	563,105	$	214,980	$	198,789
Cost of sales	144,561		142,543			419,089		416,732		156,662		140,791
Gross profit	52,729		47,789			158,091		146,373		58,318		57,998
Selling, general and administrative expenses	42,957		40,530			121,210		118,072		45,074		40,881
Operating income	9,772		7,259			36,881		28,301		13,244		17,117
Interest expense, net	1,194		1,264			3,328		3,655		1,092		1,081
Income before income taxes	8,578		5,995			33,553		24,646		12,152		16,036
Income tax expense (benefit)	2,782		(1,219		)	12,112		6,055
Income tax expense										4,269		6,051
Net income	$	5,796	$	7,214		$	21,441	$	18,591	$	7,883	$	9,985
Comprehensive income	$	8,722	$	1,037		$	25,772	$	15,048
Income per common share:
Basic	$	0.17	$	0.21		$	0.64	$	0.53	$	0.24	$	0.30
Diluted	$	0.17	$	0.21		$	0.63	$	0.53	$	0.23	$	0.29
Dividends declared per share	$	0.08	$	0.07		$	0.24	$	0.21	$	0.09	$	0.08

See notes to unaudited condensed consolidated financial statements.

~~MYERS INDUSTRIES, INC. AND SUBSIDIARIES~~

Table of contents

Myers Industries, Inc. and Subsidiaries

Consolidated Statements of Comprehensive Income (Unaudited)

(Dollars in thousands)



	For the Three Months Ended
	March 31, 2013			March 31, 2012
Net income	$	7,883		$	9,985
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustment	(851		)	1,385
Pension liability	(75		)	632
Total other comprehensive income (loss), net of tax	(926		)	2,017
Comprehensive income	$	6,957		$	12,002

See notes to unaudited condensed consolidated financial statements.

Table of contents

Myers Industries, Inc. and Subsidiaries

Condensed Consolidated Statements of Financial Position

(Dollars in thousands)


Assets	September 30, 2012			December 31, 2011			March 31, 2013			December 31, 2012
	(Unaudited)						(Unaudited)
Current Assets
Cash	$	6,468		$	6,801		$	4,053		$	3,948
Accounts receivable-less allowances of $2,913 and $3,863, respectively	111,967			105,830
Accounts receivable-less allowances of $3,782 and $3,255, respectively							124,076			115,508
Inventories
Finished and in-process products	82,084			67,721			75,074			72,899
Raw materials and supplies	38,388			27,496			34,339			34,603
	120,472			95,217
							109,413			107,502
Prepaid expenses	9,443			5,415			9,232			9,033
Deferred income taxes	5,371			5,189			2,240			3,605
Total Current Assets	253,721			218,452			249,014			239,596
Other Assets
Goodwill	53,645			44,666			61,039			61,056
Patents and other intangible assets	21,366			17,267			25,002			25,839
Other	7,689			7,438			7,509			7,882
	82,700			69,371			93,550			94,777
Property, Plant and Equipment, at Cost
Land	4,528			4,540			4,438			4,438
Buildings and leasehold improvements	57,738			58,299			57,056			57,058
Machinery and equipment	434,380			412,704			449,235			445,789
	496,646			475,543			510,729			507,285
Less allowances for depreciation and amortization	(350,942		)	(334,609		)	(364,690		)	(356,802		)
Property, plant and equipment, net	145,704			140,934			146,039			150,483
	$	482,125		$	428,757
Total Assets							$	488,603		$	484,856

See notes to unaudited condensed consolidated financial statements.

~~Part I — Financial Information~~

Table of contents

MYERS INDUSTRIES, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Financial Position

(Dollars in thousands, except share data)


Liabilities and Shareholders’ Equity	September 30, 2012			December 31, 2011			March 31, 2013			December 31, 2012
	(Unaudited)						(Unaudited)
Current Liabilities
Accounts payable	$	68,313		$	64,717		$	63,773		$	72,417
Accrued expenses
Employee compensation	17,911			20,566			13,982			18,885
Income taxes	62			3,379			2,675			1,090
Taxes, other than income taxes	5,978			2,729			2,643			2,606
Accrued interest	770			161			841			240
Other	19,205			18,799			19,459			19,239
Current portion of long-term debt	305			305
Total Current Liabilities	112,544			110,656			103,373			114,477
Long-term debt, less current portion	96,380			73,725
Long-term debt							103,578			92,814
Other liabilities	16,041			14,343			17,089			17,865
Deferred income taxes	28,070			23,893			30,470			29,678
Shareholders’ Equity
Serial Preferred Shares (authorized 1,000,000 shares; none issued and outstanding)	—			—			—			—
Common Shares, without par value (authorized 60,000,000 shares; outstanding 33,752,703 and 33,420,488; net of treasury shares of 4,067,754 and 4,492,169, respectively)	20,483			20,312
Common Shares, without par value (authorized 60,000,000 shares; outstanding 33,551,449 and 33,480,189; net of treasury shares of 4,148,683 and 4,356,160, respectively)							20,329			20,316
Additional paid-in capital	270,039			265,000			266,632			266,419
Accumulated other comprehensive income	11,625			7,294			9,717			10,643
Retained deficit	(73,057		)	(86,466		)	(62,585		)	(67,356		)
Total Shareholders' Equity	229,090			206,140			234,093			230,022
Total Liabilities and Shareholders' Equity	$	482,125		$	428,757		$	488,603		$	484,856

See notes to unaudited condensed consolidated financial statements.

Table of contents

~~Part I — Financial Information~~

~~MYERS INDUSTRIES, INC. AND SUBSIDIARIES~~

~~Condensed Consolidated Statements of Cash Flows (Unaudited)~~

~~For the Nine Months Ended September 30, 2012~~Myers Industries, Inc. and ~~2011~~

~~(Dollars in thousands)~~

September 30,
2012 September 30,
2011
Cash Flows From Operating Activities
Net income $ 21,441
$ 18,591
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation 22,287
24,102
Impairment charges and asset write-offs —
814
Amortization of intangible assets 2,331
2,210
Non-cash stock compensation 2,134
2,151
Payments for long-term incentive compensation (333 ) —
(Recovery of) provision for loss on accounts receivable (1,019 ) 1,179
Deferred taxes 428
635
Other long-term liabilities 2,037
3,015
Gain on sale of property, plant and equipment (628 ) (591 )
Other 50
50
Cash flow provided by (used for) working capital:
Accounts receivable 664
(5,024 )
Inventories (18,611 ) (8,759 )
Prepaid expenses (2,563 ) 2,294
Accounts payable and accrued expenses (4,877 ) (422 )
Net cash provided by operating activities 23,341
40,245
Cash Flows From Investing Activities
Additions to property, plant and equipment (15,236 ) (13,337 )
Acquisition of business, net of cash acquired (3,430 ) (1,100 )
Proceeds from sale of property, plant and equipment 1,975
1,082
Other 100
(92 )
Net cash used for investing activities (16,591 ) (13,447 )
Cash Flows From Financing Activities
Repayment of long-term debt (26,333 ) (305 )
Net borrowing on credit facility 20,410
(2,907 )
Cash dividends paid (7,642 ) (7,163 )
Proceeds from issuance of common stock 3,026
173
Repurchase of common stock —
(18,821 )
Net cash used for financing activities (10,539 ) (29,023 )
Foreign Exchange Rate Effect on Cash 3,456
371
Net decrease in cash (333 ) (1,854 )
Cash at January 1 6,801
4,705
Cash at September 30 $ 6,468
$ 2,851

~~See notes to unaudited condensed consolidated financial statements.~~

~~Part I — Financial Information~~

~~MYERS INDUSTRIES, INC. AND SUBSIDIARIES~~Subsidiaries

Condensed Consolidated Statement of Shareholders’ Equity (Unaudited)

~~For the Nine Months Ended September 30, 2012~~

(Dollars in thousands, except per share data)

Common
Stock

Additional
Paid-In
Capital

Accumulative
Other
Comprehensive
Income

Retained
Income
(Deficit)
Balance at January 1, 2012 $ 20,312
$ 265,000
$ 7,294
$ (86,466 )
Net income —
—
—
21,441
Other comprehensive income —
—
4,331
—
Common stock issued 169
2,857
—
—
Stock based compensation —
2,134
—
—
Stock contribution 2
48
—
—
Dividends declared — $.24 per share —
—
—
(8,032 )
Balance at September 30, 2012 $ 20,483
$ 270,039
$ 11,625
$ (73,057 )



	Common Stock			Additional Paid-In Capital			Accumulative Other Comprehensive Income			Retained Income (Deficit)
Balance at January 1, 2013	$	20,316		$	266,419		$	10,643		$	(67,356	)
Net income	—			—			—			7,883
Other comprehensive income (loss)	—			—			(926		)	—
Purchases for treasury	(83		)	(1,872		)	—			—
Common stock issued	96			1,610			—			—
Cancellations and terminations of share grants	—			37			—			—
Stock based compensation	—			438			—			—
Dividends declared - $.09 per share	—			—			—			(3,112		)
Balance at March 31, 2013	$	20,329		$	266,632		$	9,717		$	(62,585	)

See notes to unaudited condensed consolidated financial statements.

Table of ~~Contents~~contents

~~Part 1 - Financial Information~~

Myers Industries, Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows (Unaudited)

(Dollars in thousands)



	For the Three Months Ended
	March 31, 2013			March 31, 2012
Cash Flows from Operating Activities
Net income	$	7,883		$	9,985
Adjustments to reconcile net income to net cash used in operating activities:
Depreciation	8,150			7,545
Amortization of intangible assets	1,001			757
Non-cash stock compensation	438			667
Provision for (recovery of) loss on accounts receivable	822			(627		)
Deferred taxes	2,227			(32		)
Other long-term liabilities	(834		)	586
Gain on sale of property, plant and equipment	—			(224		)
Other	—			50
Cash flow used for working capital:
Accounts receivable	(9,833		)	(7,679		)
Inventories	(2,224		)	(7,089		)
Prepaid expenses	(237		)	(1,726		)
Accounts payable and accrued expenses	(13,896		)	(8,623		)
Net cash used in operating activities	(6,503		)	(6,410		)
Cash Flows from Investing Activities
Additions to property, plant and equipment	(4,508		)	(3,138		)
Proceeds from sale of property, plant and equipment	—			1,332
Other	96			(3		)
Net cash used in investing activities	(4,412		)	(1,809		)
Cash Flows from Financing Activities
Repayment of long-term debt	—			(305		)
Net borrowing on credit facility	10,763			6,262
Cash dividends paid	—			(2,316		)
Proceeds from issuance of common stock	1,706			397
Tax benefit from options	37			—
Repurchase of common stock	(1,955		)	—
Net cash provided by financing activities	10,551			4,038
Foreign exchange rate effect on cash	469			676
Net increase (decrease) in cash	105			(3,505		)
Cash at January 1	3,948			6,801
Cash at March 31	$	4,053		$	3,296

See notes to unaudited condensed consolidated financial statements.

Myers Industries, Inc. and Subsidiaries

Notes to Unaudited Condensed Consolidated Financial Statements

(Dollar amounts in thousands, except where otherwise indicated)

1. Statement of Accounting ~~Policy~~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 without audit, 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 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 ~~September 30, 2012~~March 31, 2013, and the results of operations and cash flows for the periods presented. The results of operations for the three ~~and~~ ~~nine~~months ended ~~September 30, 2012~~March 31, 2013 are not necessarily indicative of the results of operations that will occur for the year ending December 31, ~~2012~~2013.

~~Reclassification~~

~~Certain prior year amounts in the accompanying condensed consolidated financial statements have been reclassified to conform to the current year’s presentation.~~

Recent Accounting Pronouncements

In ~~July 2012,~~February 2013, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. ~~2012-02,~~2013-02, ~~Intangibles-Goodwill and~~Reporting of Amounts Reclassified Out of Accumulated Other ~~(Topic 350)~~ which simplifies the impairment test for indefinite-lived intangible assets other than goodwill. ASU No. 2012-02 gives the option to first assess qualitative factors to determine if it is more likely than not that the fair value of an indefinite-lived intangible asset is less than its carrying amount as a basis for determining whether it is necessary to perform a quantitative valuation test. ASU No. 2012-02 is effective for fiscal years and interim periods beginning on or after September 15, 2012. The Company conducts its annual impairment assessment as of October 1, which will include adoption of this guidance. The Company does not anticipate that this will have a significant impact on our financial position, results of operations or cash flows.

~~In June 2011, the FASB issued ASU No. 2011-05,~~ Comprehensive Income ~~(Topic 220) — Presentation of Comprehensive Income~~requiring new disclosures regarding reclassification adjustments from accumulated other comprehensive income ("AOCI"). ASU No. ~~2011-05~~2013-02 requires ~~companies~~disclosure of amounts reclassified out of AOCI in its entirety, by component, which the Company has elected to present the components of net income and other comprehensive income either as one continuous statement or two separate but consecutive statements. The update eliminates the option to report other comprehensive income and its componentsdisclose in the ~~statement of changes in equity. ASU No. 2011-05 was effective for fiscal years and interim periods beginning after December 15, 2011. The adoption of~~notes (see below). We adopted this guidance on effective January 1, ~~2012~~ ~~did not have a material impact on the Company’s consolidated financial statements as this guidance modifies presentation of other comprehensive income already disclosed in the financial statements.~~2013.

Translation of Foreign Currencies

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

Fair Value Measurement

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


Level 1:	Unadjusted quoted prices in active markets for identical assets or liabilities.


Level 2:	Unadjusted quoted prices in active markets for similar assets or liabilities, unadjusted quoted prices for identical or similar assets or liabilities in markets that are not active or inputs that are observable either directly or indirectly.


Level 3:	Unobservable inputs for which there is little or no market data or which reflect the entity’s own assumptions.

The fair value of the Company’s cash, accounts receivable, accounts payable and accrued expenses are considered to have a fair value which 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 Credit Agreement approximates carrying value due to the floating ~~interest~~ rates and relative short maturity (less than 90 days) of the revolving borrowings under this agreement. The fair value of the Company’s $35.0 million fixed rate senior notes was estimated at $~~36.8~~36.2 million and $36.5 million at ~~September 30,~~March 31, 2013 and December 31, 2012, respectively, 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.

Myers Industries, Inc. and Subsidiaries

Notes to Unaudited Condensed Consolidated Financial Statements - (Continued)

(Dollar amounts in thousands, except where otherwise indicated)

Revenue Recognition

The Company recognizes revenues from the sale of products, net of actual and estimated returns, at the point of passage of title and risk of loss, which is generally at time of shipment, and collectability of the fixed or determinable sales price is reasonably assured.

Accumulated Other Comprehensive Income

The balances in the ~~Company's~~Company’s accumulated other comprehensive income ("AOCI") as of ~~September 30, 2012~~March 31, 2013 and ~~September 30, 2011~~March 31, 2012 are as follows:

Accumulated
Defined other
Foreign benefit comprehensive
currency pension plan income
Balance at January 1, 2011 $ 12,234
$ (2,070 ) $ 10,164
Current-period other comprehensive income 1,810
—
1,810
Balance at March 31, 2011 $ 14,044
$ (2,070 ) $ 11,974
Current-period other comprehensive income 824
—
824
Balance at June 30, 2011 $ 14,868
$ (2,070 ) $ 12,798
Current-period other comprehensive income (6,177 ) —
(6,177 )
Balance at September 30, 2011 $ 8,691
$ (2,070 ) $ 6,621

Balance at January 1, 2012 $ 9,994
$ (2,700 ) $ 7,294
Current-period other comprehensive income 1,385
—
1,385
Tax effect of pension liability from prior periods —
632
632
Balance at March 31, 2012 $ 11,379
$ (2,068 ) $ 9,311
Current-period other comprehensive income (612 ) —
(612 )
Balance at June 30, 2012 $ 10,767
$ (2,068 ) $ 8,699
Current-period other comprehensive income 2,926
—
2,926
Balance at September 30, 2012 $ 13,693
$ (2,068 ) $ 11,625



	Foreign currency			Defined benefit pension plans			Total
Balance at January 1, 2012	$	9,994		$	(2,700	)	$	7,294
Other comprehensive income before reclassifications	1,385			—			1,385
Amounts reclassified from AOCI to income tax expense (benefit) in the Condensed Consolidated Statements of Income	—			632			632
Net current-period other comprehensive income	$	1,385		$	632		$	2,017
Balance at March 31, 2012	$	11,379		$	(2,068	)	$	9,311

Balance at January 1, 2013	$	12,784		$	(2,141	)	$	10,643
Other comprehensive income before reclassifications	(851		)	—			(851		)
Amounts reclassified from AOCI to income tax expense (benefit) in the Condensed Consolidated Statements of Income	—			(75		)	(75		)
Net current-period other comprehensive income	$	(851	)	$	(75	)	$	(926	)
Balance at March 31, 2013	$	11,933		$	(2,216	)	$	9,717

Cash and Cash Equivalents

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

2. Inventories

Approximately ~~twenty~~twenty-two percent of the Company’s inventories use the ~~last in first out~~last-in, first-out (LIFO) 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 the inventory levels and costs at that time. Accordingly, interim LIFO calculations must necessarily be based on management’s estimates of expected year-end inventory levels and costs. Because these are subject to many factors beyond management’s control, estimated interim results, which were immaterial, are subject to change in the final year-end LIFO inventory valuation and ~~were immaterial,~~therefore, no adjustment was recorded as of ~~an interim period.~~March 31, 2013.

Myers Industries, Inc. and Subsidiaries

Notes to Unaudited Condensed Consolidated Financial Statements - (Continued)

(Dollar amounts in thousands, except where otherwise indicated)

3. Acquisitions

In October 2012, the Company acquired 100% of the stock of Jamco Products Inc. ("Jamco"), an Illinois corporation that is a leading designer and manufacturer of heavy-duty industrial steel carts and safety cabinets used across many markets. The total purchase price was approximately $15.1 million in cash, net of $0.1 million of cash acquired.

Jamco's assets and liabilities are recorded at fair value as of the date of acquisition using primarily level 2 and level 3 fair value inputs. Intangible assets included in the acquisition of Jamco are trade name of $1.2 million, technology of $2.0 million, non-compete agreement of $0.1 million and customer relationships of $2.4 million. The technology, non-compete agreement and customer relationships are subject to amortization and have estimated useful lives of ten, two and six years, respectively. The Jamco trade name has an indefinite life and will be subject to periodic (at least annual) evaluation for impairment.

In July 2012, the Company acquired 100% of the stock of Plasticos Novel do Nordeste S.A. ("Novel"), a Brazil-based designer and manufacturer of reusable plastic crates and containers used for closed-loop shipping and storage. Novel also produces a diverse range of plastic industrial safety products. The total purchase price was approximately $31.0 million, which includes a cash payment of $3.4 million, net of $0.6 million of cash acquired, assumed debt of approximately $26.0 million and contingent consideration of $0.9 million based on an earnout. The contingent consideration is contingent upon the results of Novel exceeding predefined earnings before interest, taxes, depreciation and amortization over the next four years.

The operating results of the business acquired have been included in our Material Handling Segment since the date of acquisition. Had this acquisition occurred as of the beginning of the periods presented in these condensed consolidated financial statements, the pro-forma statements of income would not be materially different than the condensed consolidated statements presented. The preliminary allocation of the purchase price and the estimated non-deductible goodwill and other intangibles are as follows:

~~Table of Contents~~

~~Part 1 - Financial Information~~

~~Myers Industries, Inc. and Subsidiaries~~

~~Notes to Unaudited Condensed Consolidated Financial Statements~~

~~(Dollar amounts in thousands, except where otherwise indicated)~~

Preliminary allocation of purchase price
(dollars in thousands)
Assets acquired:
Cash $ 630

Accounts receivable $ 5,467
Inventory 5,993
Property, plant and equipment 13,636
Intangibles 5,790
Deferred tax assets 435
Prepaid assets 1,451
Other 719
Assets acquired, less cash $ 33,491

Liabilities assumed:
Accounts payable and accruals $ (3,134 )
Other taxes (3,608 )
Other long-term liabilities (2,293 )
Debt (26,028 )
Deferred tax liabilities (3,804 )
$ (38,866 )
Goodwill 8,805
Total consideration, less cash acquired $ 3,430

~~These~~Novel's assets and liabilities are recorded at fair value as of the date of acquisition using primarily level 3 fair value inputs. Intangible assets included in the acquisition of Novel include trade name of $1.6 million, know-how of $1.8 million and customer relationships of $2.4 million. The know-how and customer relationships are subject to amortization and have estimated useful lives of 10ten and 6six years, respectively. The Novel trade name has an indefinite life and will be subject to periodic (at least annual) evaluation for impairment. ~~The Company is awaiting final valuation studies to complete the purchase price allocation.~~

~~On October~~The following unaudited pro forma information presents a summary of consolidated results of operations for the Company including Novel and Jamco as if the acquisitions had occurred on January 1, 2012.



	Three Months Ended March 31,
	2012
Net sales	$	212,584
Cost of sales	150,477
Gross profit	62,107
Selling, general & administrative expenses	43,319
Operating income	18,788
Interest expense, net	2,215
Income before taxes	16,573
Income taxes	6,255
Net income	$	10,318

Income per basic share	$	0.31
Income per diluted share	$	0.30

These unaudited pro forma results have been prepared for comparative purposes only and may not be indicative of results of operations which actually would have occurred had the acquisitions taken place on January 1, 2012 ~~the Company acquired 100%~~or indicative of ~~the stock of Jamco Products~~future results.

Myers Industries, Inc. ~~("Jamco"), an Illinois corporation for~~ ~~$15.0 million, subject~~and Subsidiaries

Notes to ~~closing adjustments. Jamco is a leading designer and manufacturer of heavy-duty industrial steel carts and safety cabinets. The business will be included~~Unaudited Condensed Consolidated Financial Statements - (Continued)

(Dollar amounts in ~~the Material Handling Segment. The Company has just begun the purchase price allocation determination.~~thousands, except where otherwise indicated)

In July 2011, the Company acquired tooling assets and intellectual property for a new reusable plastic container used in producing, shipping and processing bulk natural cheese from Material Improvements L.P. The total purchase price was ~~$5.7 million, comprised of a~~ ~~$1.1 million~~ ~~cash payment and~~ ~~$4.6 million~~ ~~contingent consideration, none of which has been paid as of September 30, 2012. The allocation of purchase price included~~ ~~$0.3 million~~ ~~of property, plant and equipment, amortizable intangible assets, which included~~ ~~$1.3 million~~ ~~in technology and~~ ~~$0.2 million~~ ~~for trade name, and~~ ~~$3.9 million~~ ~~in goodwill. These assets and liabilities incurred were recorded at estimated fair value as of the date of the acquisition using primarily level 3 inputs.~~ The operating results of ~~the business~~both businesses acquired have been included in our Material Handling Segment since the date of acquisition. The allocation of the purchase price and the estimated goodwill, which is not deductible for income tax purposes, and other intangibles are as follows:



Assets acquired:	Novel		Jamco
Cash	$	630	$	88
Accounts receivable	5,467		1,690
Inventory	5,993		3,282
Property, plant and equipment	13,636		2,559
Intangibles	5,790		5,680
Deferred tax assets	435		28
Prepaid assets	1,451		48
Other	719		2
Assets acquired, less cash	$	33,491	$	13,289

Liabilities assumed:
Accounts payable and accruals	$	3,134	$	1,436
Other taxes	3,608		676
Other long-term liabilities	2,293		454
Debt	26,028		—
Deferred tax liabilities	3,804		3,044
Liabilities assumed	38,867		5,610
Goodwill	8,805		7,435
Total consideration, less cash acquired	$	3,429	$	15,114

4. Goodwill

The Company is required to test for impairment on at least an annual basis. In addition, the Company tests for impairment whenever events or circumstances indicate that it is more likely than not that the fair value of a reporting unit is below its carrying amount. Such events may include, but are not limited to, significant changes in economic and competitive conditions, the impact of the economic environment on the Company's customer base or its businesses, or a material negative change in its relationships with significant customers. The Company conducts its annual impairment assessment as of October 1.

~~In September 2011, the FASB issued ASU No. 2011-08,~~ ~~Intangibles - Goodwill and Other~~ (Topic 350), effective for fiscal years beginning after December 15, 2011. The update gives companies the option to perform a qualitative assessment that may enable them to forgo the annual two-step test for impairment. ASU No. 2011-08 allows a qualitative assessment to first be performed to determine whether it is more likely than not that the fair value of a reporting units is less than its carrying value. If a company concludes that this is the case, it must perform the two-step test. Otherwise a company does not have to perform the two-step test. The ASU also includes a revised list of events and circumstances to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. The Company conducts its annual impairment assessment as of October 1, which includes adoption of this guidance.

The change in goodwill for the ~~nine~~three months ended ~~September 30, 2012~~March 31, 2013 was as follows:


(In thousands) Segment	Balance at January 1, 2012		Acquisitions		Foreign Currency Translation			Impairment		Balance at September 30, 2012
Segment												Balance at January 1, 2013		Acquisitions		Foreign Currency Translation			Impairment		Balance at March 31, 2013
Material Handling												$	50,521	$	—	$	114		$	—	$	50,635
Lawn and Garden												9,614		—		(131		)	—		9,483
Distribution	$	214	$	—	$	—		$	—	$	214	214		—		—			—		214
Engineered Products	707		—		—			—		707		707		—		—			—		707
Material Handling	34,279		8,805		(24		)	—		43,060
Lawn and Garden	9,466		—		198			—		9,664
Total	$	44,666	$	8,805	$	174		$	—	$	53,645	$	61,056	$	—	$	(17	)	$	—	$	61,039

Myers Industries, Inc. and Subsidiaries

Notes to Unaudited Condensed Consolidated Financial Statements - (Continued)

(Dollar amounts in thousands, except where otherwise indicated)

5. Net Income Per Common Share

Net income per common share, as shown on the Condensed Consolidated Statements of Income ~~and Comprehensive Income (Unaudited)~~(unaudited), is determined on the basis of the weighted average number of common shares outstanding during the period as follows:


	Three Months Ended September 30,		Nine Months Ended September 30,		Three Months Ended March 31,
	2012	2011	2012	2011	2013	2012
Weighted average common shares outstanding
Basic	33,746,824	34,354,210	33,592,984	34,938,806	33,504,222	33,439,012
Dilutive effect of stock options and restricted stock	664,830	106,742	663,469	89,607	355,194	473,153
Weighted average common shares outstanding diluted	34,411,654	34,460,952	34,256,453	35,028,413	33,859,416	33,912,165

Options to purchase ~~212,000~~471,400 and 217,500 shares of common stock that were outstanding ~~for both the~~at ~~three~~ ~~month period and~~ ~~nine~~ ~~month period ended~~ ~~September 30, 2012~~, respectively, 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 their effect would be anti-dilutive. Options to purchase ~~692,810~~March 31, 2013 and ~~1,159,679~~ ~~shares of common stock that were outstanding for the~~ ~~three~~ ~~and~~ ~~nine~~ ~~months ended~~ ~~September 30, 2011~~,2012, respectively, 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 their effect would be anti-dilutive.

6. Supplemental Disclosure of Cash Flow Information


	Three Months Ended September 30,				Nine Months Ended September 30,				Three Months Ended March 31,
(In thousands)	2012		2011		2012		2011
									2013		2012
Interest paid	$	491	$	441	$	2,399	$	2,498	$	526	$	296
Income taxes paid	$	3,183	$	1,576	$	16,465	$	7,855	$	435	$	2,455

7. Restructuring

The charges related to various restructuring programs implemented by the Company are included in selling, general and administrative ("SG&A") expenses and cost of sales. Our Distribution and Lawn and Garden Segments, as well as Corporate costs are recorded in SG&A, while all Engineered Products Segment expenses are recorded in cost of sales. Material Handling costs are recorded in both SG&A and cost of sales. The restructuring charges by segment are presented in the following table.



	Three Months Ended March 31,
Segment	2013		2012
Material Handling	$	210	$	—
Lawn and Garden	403		23
Distribution	74		430
Engineered Products	3		102
Corporate	17		—
Total	$	707	$	555

Myers Industries, Inc. and Subsidiaries

Notes to Unaudited Condensed Consolidated Financial Statements - (Continued)

(Dollar amounts in thousands, except where otherwise indicated)

~~During~~The Company recorded total restructuring expenses of $0.5 million in SG&A, and $0.2 million in cost of sales for the three months ended March 31, 2013. The Company recorded total restructuring expenses of $0.5 million in SG&A and $0.1 million in cost of sales for the ~~nine~~three months ended ~~September 30,~~March 31, 2012 ~~and 2011, the Company recorded total expenses of~~ ~~$2.2 million~~ ~~and~~ ~~$1.3 million~~, respectively, for costs associated with restructuring plans including impairment of property, plant and equipment, lease obligations, severance, consulting and other related charges. Gains on the sale of facilities were approximately ~~$0.4 million~~ ~~and~~ ~~$0.5 million~~ ~~for the nine months ended September 30, 2012 and 2011, respectively.~~. Estimated lease obligations associated with closed facilities were based on level 2 inputs.

~~In the~~ ~~three~~ ~~and~~ ~~nine~~ ~~months ended~~ ~~September 30, 2012, the Company recorded net expenses of~~ ~~$0.1 million~~ ~~and~~ ~~$0.8 million, respectively, in selling, general and administrative ("SG&A") expenses and~~ ~~$0.8 million~~ ~~and~~ ~~$1.0 million, respectively, in cost of goods sold for costs associated with restructuring plans including non-cancelable lease obligations, severance, consulting and other related charges.~~

~~In the~~ ~~three~~ ~~months ended~~ ~~September 30, 2012, restructuring costs included charges of~~ ~~$0.2 million~~ ~~in the Distribution Segment related to severance and consulting costs offset by a gain of~~ ~~$0.1 million~~ ~~on the sale of one facility. Restructuring charges of~~ ~~$0.8 million~~ ~~related to lease termination charges were recorded in the Engineered Products Segment.~~

~~In the~~ ~~nine~~ ~~months ended~~ ~~September 30, 2012, net restructuring costs of~~ ~~$0.3 million~~ ~~were recorded in the Distribution Segment. These costs were related to charges for severance of~~ ~~$0.4 million~~ ~~and consulting and other related charges of~~ ~~$0.3 million~~ ~~offset by a gain of~~ ~~$0.4 million~~ ~~on the sale of four facilities. In the Engineered Products Segment, restructuring charges of~~ ~~$1.0 million~~ ~~were recorded for the~~ ~~nine~~ ~~month period ended~~ ~~September 30, 2012~~ ~~related to non-cancelable lease costs and termination charges. The Lawn and Garden Segment had~~ ~~$0.5 million~~ ~~of restructuring charges through the first~~ ~~nine~~ ~~months of 2012 for severance costs incurred.~~

~~In the~~ ~~three~~ ~~and~~ ~~nine~~ ~~months ended~~ ~~September 30, 2011, the Company recorded expenses of~~ ~~$(0.4) million~~ ~~and~~ ~~$1.3 million, respectively, related to restructuring activities. Restructuring costs in the three months ended September 30, 2011 included charges of~~ ~~$0.5 million~~ ~~in the Distribution Segment related to severance and non-cancelable lease costs offset by a gain of~~ ~~$0.5 million~~ ~~on the sale of a facility. In addition,~~ ~~$0.1 million~~ ~~of restructuring charges were recorded in the Engineered Products Segment. In the nine months ended September 30, 2011, net restructuring costs of~~ ~~$0.7 million~~ ~~in the Distribution Segment related to charges of~~ ~~$1.2 million~~ ~~offset by a gain of~~ ~~$0.5 million~~ ~~from a sale of a facility and a~~ ~~$0.3 million~~ ~~write-down for an idle Lawn and Garden manufacturing facility in the first quarter. In the Engineered Products Segment, restructuring charges of~~ ~~$0.3 million~~ ~~were recorded for the~~ ~~nine~~ ~~month period ended~~ ~~September 30, 2011~~ ~~related to non-cancelable lease costs.~~

The amounts for severance and ~~other exit~~personnel costs associated with restructuring ~~are~~have been included in ~~Other Accrued~~other accrued expenses on the accompanying Condensed Consolidated Statements of Financial Position.


	Severance and			Other						Severance and			Other
(Dollars in thousands)	Personnel			Exit Costs			Total
										Personnel			Exit Costs			Total
Balance at January 1, 2012	$	—		$	605		$	605		$	—		$	605		$	605
Provision	783			1,323			2,106			239			316			555
Less: Payments	(783		)	(728		)	(1,511		)	(239		)	(353		)	(592		)
Balance at September 30, 2012	$	—		$	1,200		$	1,200
Balance at March 31, 2012										$	—		$	568		$	568

Balance at January 1, 2013										$	318		$	—		$	318
Provision										231			476			707
Less: Payments										(549		)	(476		)	(1,025		)
Balance at March 31, 2013										$	—		$	—		$	—

~~As a result of restructuring activity including plant closures, approximately~~Approximately $5.7 million of property, plant, and equipment has been classified as held for sale ~~at both~~ ~~September 30, 2012~~due to restructuring actions and ~~December 31, 2011, and is~~are included in other assets in the Condensed Consolidated ~~Statements~~Statement of Financial ~~Position.~~Position at both March 31, 2013 and December 31, 2012, The Company is actively pursuing the sale of these facilities.

8. Stock Compensation

The Company’s 2008 Incentive Stock Plan (the “2008 Plan”) authorizes the Compensation Committee of the Board of Directors to issue up to 3,000,000 shares of various types of stock based awards including stock options, restricted stock, stock units and stock appreciation rights to key employees and directors. In general, options granted and outstanding vest over a three year period and expire ten years from the date of grant.

Stock compensation expense reduced income before taxes approximately $~~0.6~~0.4 million and $~~0.5~~0.7 million for the three months ended ~~September 30, 2012~~March 31, 2013 and ~~2011, respectively. Stock compensation expense reduced income before taxes approximately~~ ~~$2.1 million~~ ~~and~~ ~~$2.2 million~~ ~~for the~~ ~~nine~~ ~~month periods ended~~ ~~September 30,~~ 2012, ~~and 2011,~~ respectively. These expenses are included in SG&A expenses in the accompanying Condensed Consolidated Statements of Income ~~and Comprehensive Income~~ (Unaudited). Total unrecognized compensation cost related to non-vested share based compensation arrangements at ~~September 30, 2012~~March 31, 2013 was approximately $~~4.6~~5.2 million which will be recognized over the next three years, as such compensation is earned.

On March ~~2, 2012~~1, 2013, stock options for ~~323,950~~323,400 shares were granted with a three year vesting period. The fair value of options granted is estimated using a binomial lattice option pricing model based on assumptions set forth in the following table. The Company uses historical data to estimate employee exercise and departure behavior. The risk free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant and through the expected term. The dividend yield rate is based on the Company’s historical dividend yield. The expected volatility is derived from historical volatility of the Company’s shares and those of similar companies measured against the market as a whole.

Myers Industries, Inc. and Subsidiaries

Notes to Unaudited Condensed Consolidated Financial Statements - (Continued)

(Dollar amounts in thousands, except where otherwise indicated)



Model
Risk free interest rate	2.00		%	1.86		%
Expected dividend yield	2.20		%	2.40		%
Expected life of award (years)	5.4			7.00
Expected volatility	50.00		%	50.00		%
Fair value per option share	$	4.93		$	5.39

The following table provides a summary of stock option activity for the period ended ~~September 30, 2012~~March 31, 2013:

Shares
Average
Exercise
Price

Weighted
Average
Life
Outstanding at January 1, 2012 1,997,778
$ 11.33

Options Granted 323,950
12.96

Options Exercised (281,324 ) 11.07

Cancelled or Forfeited (25,199 ) 11.05

Outstanding at September 30, 2012 2,015,205
$ 11.61
6.59 years
Exercisable at September 30, 2012 1,363,466
$ 11.62



	Shares		Average Exercise Price		Weighted Average Life
Outstanding at January 1, 2013	1,919,021		$	11.63
Options granted	323,400		14.77
Options exercised	(155,178	)	10.82
Cancelled or forfeited	(127,320	)	13.91
Outstanding at March 31, 2013	1,959,923		$	12.07	6.63 years
Exercisable at March 31, 2013	1,428,395		$	11.55	5.65 years

The intrinsic value of a stock option is the amount by which the market value of the underlying stock exceeds the exercise price of the option. The total intrinsic value of all stock options exercised during the ~~nine~~three months ended ~~September 30, 2012~~March 31, 2013 and ~~2011~~2012 was approximately $~~1.5~~0.6 million and $~~16 thousand~~0.1 million, respectively.

On March ~~2, 2012~~1, 2013, ~~90,495~~169,100 ~~shares of restricted stock~~Restricted Stock Unit ("RSU") Awards were granted with a two or three year vesting period. The ~~restricted stock~~RSU's had a grant date fair value of $~~12.96~~14.77 per share, which was the closing price of the common stock on the date of grant. On ~~August 31, 2012~~, ~~75,000~~ ~~restricted shares were granted at a fair value of~~ ~~$14.80~~ ~~per share and vest on December 31, 2015.~~

The following table provides a summary of RSU and restricted stock activity for the ~~nine~~three months ended ~~September 30, 2012~~March 31, 2013:

Shares Average Grant-Date Fair Value
Unvested shares at January 1, 2012 288,500

Granted 165,495
$ 13.79
Vested (40,500 ) —
Forfeited (32,275 ) 10.03
Unvested shares at September 30, 2012 381,220
$ 11.01



	Awards		Average Grant-Date Fair Value
Unvested at January 1, 2013	363,125
Granted	169,100		$	14.77
Released	(110,800	)	9.97
Cancelled or forfeited	(122,500	)	13.87
Unvested at March 31, 2013	298,925		$	13.03

~~The restricted~~Restricted stock ~~awards~~ are rights to receive shares of common stock, subject to forfeiture and other restrictions, which ~~generally~~ vest over a two or three to ~~four~~ year period. Restricted shares are considered to be non-vested shares under the accounting guidance for share-based payment and are not reflected as issued and outstanding shares until the restrictions lapse. At that time, the shares are released to the grantee and the Company records the issuance of the shares. Restricted ~~shares~~stock awards are valued based on the market price of the underlying shares on the grant date. Compensation expense is recognized on a straight-line basis over the requisite service period. At ~~September 30, 2012~~March 31, 2013, ~~shares of~~ restricted stock awards had vesting periods up through ~~December 2015~~March 2016.

Myers Industries, Inc. and Subsidiaries

Notes to Unaudited Condensed Consolidated Financial Statements - (Continued)

(Dollar amounts in thousands, except where otherwise indicated)

9. Contingencies

New Idria Mercury Mine

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.

~~Other~~

In Effective October ~~2009, an employee was fatally wounded while performing maintenance at the Company’s manufacturing facility in Springfield, Missouri. On February 22,~~ 2011, the ~~family~~U.S. Environmental Protection Agency (“EPA”) added the New Idria Mercury Mine site located near Hollister, California to the Superfund National Priorities List because of alleged contaminants discharged to California waterways. The New Idria Quicksilver Mining Company, founded in 1936, and later renamed the New Idria Mining & Chemical Company ("NIMCC") owned and/or operated the New Idria Mine through 1976. In 1981 NIMCC was merged into Buckhorn Metal Products Inc. and subsequently acquired by Myers Industries in 1987. The EPA contends that past mining operations have resulted in mercury contamination and acid mine drainage in the San Carlos Creek, Silver Creek and a portion of Panoche Creek and that other downstream locations may also be impacted.

Since Buckhorn Inc. may be a potentially responsible party (“PRP”) of the ~~deceased filed~~New Idria Mercury Mine, the Company recognized an expense of $1.9 million in 2011 related to performing a ~~civil complaint~~remedial investigation and feasibility study to determine the extent of remediation and the screening of alternatives. Payments of approximately $0.4 million have been charged against the ~~manufacturer~~reserve classified in Other Liabilities on the Condensed Consolidated Statements of Financial Position as of March 31, 2013. As the Site Remedial Investigation and Feasibility Study ("RI/FS") proceeds, it is likely that adjustments to the recognized expense will be necessary to reflect new information regarding the nature and extent of site contamination, the range of remediation alternatives available, and evolving remediation standards. The final remedial action will be selected after completion of the press involved in the incident and the Buckhorn Inc. employee involved in the incident. The Company has been brought into the lawsuit by the plaintiff as an additional defendant. The manufacturer of the press has filed a cross claim for indemnity against Buckhorn.RI/FS. At ~~this~~that time the Company is likely to have additional information regarding remedial action costs, the number and financial condition of other PRPs, the extent of their responsibility for the remediation, and the availability of insurance coverage for these expenses. At this time, further remediation cost estimates are not ~~able~~known and have not been prepared.

In November 2011 the EPA completed an interim removal project at the New Idria Mercury Mine site. It is expected this removal action will be part of the final remediation strategy for the site. According to ~~determine whether~~informal reports, EPA's interim removal project costs were approximately $500,000. It is possible that at some future date the EPA will seek recovery of the costs of this proceeding or the incident will result in legal exposure to the Company, or if any such liability that results would be material to the Company’s financial statements. The Company believes that it has adequate insurance to resolve any claims resultingwork from ~~this incident.~~PRPs.

Other

When management believes that 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 will not have a material adverse effect on our financial position 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.

Myers Industries, Inc. and Subsidiaries

Notes to Unaudited Condensed Consolidated Financial Statements - (Continued)

(Dollar amounts in thousands, except where otherwise indicated)

10. Long-Term Debt

Long-term debt consisted of the following:



	March 31,		December 31,
	2013		2012
Credit agreement	$	68,578	$	57,814
Senior notes	35,000		35,000
	$	103,578	$	92,814

Under terms of the Credit Agreement with a group of banks, the Company may borrow up to $180 million, reduced for letters of credit issued. As of March 31, 2013, the Company had $106.3 million available under the Credit Agreement.

In December 2003, the Company issued $100 million in Senior Unsecured Notes (the "Notes") consisting of $65 million of notes with an interest rate of 6.08 percent and a 7 year maturity and $35 million of notes with an interest rate of 6.81 percent and a 10 year maturity. Proceeds from the issuance of the Notes were used to pay down the term loan and revolving credit facility borrowing outstanding at that time. As of March 31, 2013, the Company has classified the $35 million of Senior Notes due in December 2013 as a long-term liability since it has the intent to refinance the debt on a long-term basis and has demonstrated the ability via capacity available under the non-cancelable revolver feature of our current Credit Agreement.

11. Retirement Plans

The Company and certain of its subsidiaries have pension and profit sharing plans covering substantially all of their employees. The Company’s frozen 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 as of the date the plan was frozen.

Net periodic pension cost ~~for the~~ ~~three~~ ~~and~~ ~~nine~~ ~~months ended~~ ~~September 30, 2012~~ ~~and 2011, respectively,~~ are as follows:


	Three Months Ended September 30,						Nine Months Ended September 30,						Three Months Ended March 31,
	2012			2011			2012			2011			2013			2012
Service cost	$	18		$	18		$	53		$	54		$	8		$	18
Interest cost	72			76			216			228			65			72
Expected return on assets	(77		)	(77		)	(230		)	(231		)	(91		)	(77		)
Amortization of actuarial net loss	25			16			75			48			28			25
Net periodic pension cost	$	38		$	33		$	114		$	99		$	10		$	38
Company contributions	$	339		$	116		$	538		$	268		$	123		$	76

The Company anticipates contributions totaling $~~661 thousand~~0.4 million to its pension plan for the full year of ~~2012.~~

~~Effective~~ ~~January 1, 2012~~, the Company changed its profit sharing and 401(k) plan which includes an increase in the Company's matching contributions and the frequency of the Company's match. The Myers Industries Profit Sharing and 401(k) Plan is maintained for the Company's U.S. based employees, not covered under defined benefit plans, who have met eligibility service requirements.2013.

12. Income Taxes

The total amount of gross unrecognized tax ~~benefits~~benefit that would reduce the Company's effective tax rates at March 31, 2013 and March 31, 2012, was $~~0.3~~1.2 million at ~~September 30, 2012~~ and $~~1.1~~0.5 million at, respectively. The ~~December~~$0.7 million increase in the gross unrecognized tax benefits from March 31, ~~2011~~2012~~. The amount of accrued~~ to March 31, 2013 resulted from an increase in ASC 740-10-25-6, Accounting for Uncertainty in Income Taxes, reserves related to acquired businesses and previous year tax positions. Accrued interest expense included ~~as a liability within~~with accrued income taxes in the Company's Condensed Consolidated Statements of Financial Position was less than $0.1 million at ~~September 30, 2012~~March 31, 2013 and ~~$0.1 million~~ at December 31, ~~2011. In~~ 2012 ~~the Company recognized approximately~~ ~~$0.8 million~~ ~~of previously reserved tax benefits, based on the settlement of various state and federal tax issues. The tax benefit related to this recognition was reduced by tax expense of~~ ~~$0.6 million~~ ~~on pension liability previously recognized in other comprehensive income.~~

~~For the quarter ended~~ ~~September 30, 2011, the Company recognized net favorable income tax adjustments of approximately~~ ~~$3.8 million~~ that were largely the result of reversing previously reserved tax benefits related to the loss on the sale of one of our subsidiaries in 2007 due to lapse of statute of limitations and other tax adjustments.

~~During the quarter ended September 30, 2012, the Company finalized its examination of Federal income tax returns for~~ ~~2009~~ ~~and~~ ~~2010~~ ~~in the United States but is currently under examination for~~ ~~2007~~ ~~and~~ ~~2008~~ ~~in Canada, as well as certain states. The Company does not expect any significant changes to its unrecognized tax benefits in the next~~ ~~12 months~~.

As of ~~September 30, 2012~~March 31, 2013, the Company and its significant subsidiaries are subject to examination for the years after 2006 in Brazil, after ~~2006~~2007 in Canada, and after 2010 in the United States. The Company and its subsidiaries are subject to examination in certain states within the United States ~~starting~~either after 2007 ~~and in the remaining states~~ or after 2008.~~2008~~.

Myers Industries, Inc. and Subsidiaries

Notes to Unaudited Condensed Consolidated Financial Statements - (Continued)

(Dollar amounts in thousands, except where otherwise indicated)

13. Segment Information

Using the criteria of ASC 280 Segment Reporting, the Company has four operating segments: Material Handling, Lawn and Garden, Distribution, and Engineered Products. Each of these operating segments is also a reportable segment under the ASC 280 criteria.

None of the reportable segments include operating segments that have been aggregated. Some of these segments contain individual business components that have been aggregated on the basis of common management, customers, products, production processes and economic characteristics. The Company accounts for intersegment sales and transfers at cost plus a specified mark-up.

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


	Three Months Ended September 30,						Nine Months Ended September 30,						Three Months Ended March 31,
Net Sales	2012			2011			2012			2011			2013			2012
Material Handling	$	76,151		$	72,070		$	201,632		$	204,808		$	79,989		$	65,221
Lawn and Garden	45,341			45,839			147,008			154,812			60,363			59,184
Distribution	45,065			48,785			131,991			136,511			42,649			42,738
Engineered Products	35,709			29,360			111,578			85,182			36,956			37,227
Intra-segment elimination	(4,976		)	(5,722		)	(15,029		)	(18,208		)
Inter-company Sales													(4,977		)	(5,581		)
Net Sales	$	197,290		$	190,332		$	577,180		$	563,105		$	214,980		$	198,789


	Three Months Ended September 30,						Nine Months Ended September 30,						Three Months Ended March 31,
Income Before Income Taxes	2012			2011			2012			2011			2013			2012
Material Handling	$	12,530		$	8,870		$	34,903		$	27,526		$	9,705		$	13,150
Lawn and Garden	41			(1,413		)	(683		)	846			2,281			1,218
Distribution	3,343			4,564			11,152			11,651			2,839			3,511
Engineered Products	2,921			3,001			12,172			8,381			5,077			4,591
Corporate	(9,063		)	(7,763		)	(20,663		)	(20,103		)	(6,658		)	(5,353		)
Interest expense-net	(1,194		)	(1,264		)	(3,328		)	(3,655		)
Interest expense - net													(1,092		)	(1,081		)
Income before income taxes	$	8,578		$	5,995		$	33,553		$	24,646		$	12,152		$	16,036

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~~Part I - Financial Information~~

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

Results of Operations

Comparison of the ~~Third~~First Quarter of ~~2012~~2013 to the ~~Third~~First Quarter of ~~2011~~2012

Net Sales:


(dollars in millions)	Quarter Ended September 30,											Quarter Ended March 31,
Segment	2012			2011			Change			% Change		2013			2012			Change			% Change
Material Handling	$	76.2		$	72.1		$	4.1		6	%	$	80.0		$	65.2		$	14.8		23	%
Lawn and Garden	$	45.3		$	45.8		$	(0.5	)	(1	)%	$	60.4		$	59.2		$	1.2		2	%
Distribution	$	45.1		$	48.8		$	(3.7	)	(8	%)	$	42.6		$	42.7		$	(0.1	)	—	%
Engineered Products	$	35.7		$	29.4		$	6.3		21	%	$	37.0		$	37.2		$	(0.2	)	(1	%)
Intra-segment elimination	$	(5.0	)	$	(5.8	)	$	0.8		14	%
Inter-company Sales												$	(5.0	)	$	(5.5	)	$	0.5		9	%
TOTAL	$	197.3		$	190.3		$	7.0		4	%	$	215.0		$	198.8		$	16.2		8	%

Net sales infor the quarter ended ~~September 30, 2012~~March 31, 2013 were ~~$197.3~~$215.0 million, an increase of ~~$7.0~~$16.2 million or 4%8% compared to the prior ~~year. Strong~~year's first quarter. The increase was driven by higher sales ~~in our Engineered Products Segment combined with an increase~~ in our Material Handling ~~Segment more than offset lower sales in our Distribution Segment. Sales for~~and Lawn &and Garden ~~remained relatively flat quarter over quarter.~~Segments. Overall net sales increased ~~$3.3~~approximately $12.0 million ~~due to volume driven by our growth and innovation initiative and the~~from inclusion of ~~$9.0 million in sales from the date of acquisition~~our 2012 acquisitions of Plasticos Novel do Nordeste S.A. ("Novel") onin July ~~3, 2012. These sales increases were partially~~and Jamco Products Inc. ("Jamco") in October. In addition, higher volume of $6.2 million driven by our growth and innovation initiative more than offset ~~by $4.0 million in~~ lower pricing of $1.4 million and the effect of unfavorable foreign currency translation of ~~$1.3 million.~~$0.6 million in 2013 compared to 2012.

Net sales in the Material Handling Segment increased ~~$4.1~~$14.8 million or 6%23% in the ~~third~~first quarter of ~~2012~~2013 compared to the same quarter in ~~2011.~~2012. Sales ~~recorded~~from acquisitions contributed approximately $12.0 million quarter-over-quarter and through ~~our Novel acquisition contributed $9.0~~an increase of $5.7 million in ~~the third quarter of 2012. Lower~~higher sales ~~were recognized~~volume, particularly in the ~~manufacturing, food processing~~automotive and agricultural ~~markets that~~markets. These increases were partially offset by higher sales in the industrial markets resulting in a net reduction in volume of $0.7 million. A delay in customer orders resulting from a shift in demand, primarily in the agricultural market, from the third quarter to the fourth quarter of 2012 was the primary cause of the sales decrease quarter over quarter. Sales were also negatively impacted ~~in the quarter compared to the prior year quarter~~ by lower pricing ~~and mix~~ of ~~$3.2~~$2.4 million and ~~a $1.0 million of~~ unfavorable foreign currency ~~translation.~~translation of $0.5 million.

Net sales in the Lawn and Garden Segment in the ~~third~~first quarter of ~~2012 decreased $0.5~~2013 increased $1.2 million or 1%2% compared to the ~~third~~first quarter of ~~2011.~~2012. Sales reflect higher volume of ~~$1.0~~$0.3 million compared to the ~~third~~first quarter of ~~2011 resulting~~2012 as a result of a delay in orders from ~~stronger demand, but was more than offset~~the fourth quarter of 2012, as well as new product offerings generated through our growth and innovation initiative. Sales were also favorably impacted by ~~a decrease~~improved pricing of ~~$1.2~~$0.9 million in ~~pricing and $0.3 million of unfavorable foreign currency translation.~~2013 compared to the same quarter in 2012.

Net sales in the Distribution Segment decreased ~~$3.7~~$0.1 million ~~or 8%~~ in the ~~third~~first quarter of 2013 compared to the first quarter of 2012 ~~compared to the third quarter of 2011 as a result of a decrease in sales volumes. The decreased sales were primarily due to slowing customer demand resulting from~~impacted by a decline in ~~the~~ replacement tire ~~industry~~shipments. Improved pricing, increased equipment and ~~from~~new product sales were more than offset by lower ~~equipment sales.~~sales of supplies in line with the market.

InNet Sales in the Engineered Products Segment ~~net sales~~decreased $0.2 million or 1% in the ~~third~~first quarter of ~~2012 increased $6.3 million or 21%~~2013 compared to the prior ~~year. Stronger sales in 2012 resulted from higher sales volumes of $6.0~~year's first quarter. Volume decreased $0.3 million ~~driven by product~~due to a more normalized demand in the transplant automotive market ~~recreational vehicle,~~in the first quarter of 2013 compared to the first quarter of last year, as well as a decrease in custom market sales. These decreases were partially offset by an increase in sales in the marine ~~and custom markets. Higher~~market. Sales for the first quarter of 2013 were favorably impacted by higher selling prices of ~~$0.3 million also contributed to the improved sales performance.~~

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$0.1 million.

Cost of Sales & Gross Profit:


(dollars in millions)	Quarter Ended September 30,						Quarter Ended March 31,
Cost of Sales and Gross Profit	2012			2011
							2013			2012
Cost of sales	$	144.6		$	142.5		$	156.7		$	140.8
Gross profit	$	52.7		$	47.8		$	58.3		$	58.0
Gross profit as a percentage of sales	26.7		%	25.1		%	27.1		%	29.2		%

Gross ~~margin expansion~~profit in the ~~third~~first quarter of 2013 was comparable to the first quarter of 2012, ~~compared to~~although gross profit as a percentage of sales decreased for the same ~~quarter of 2011 was largely the result of the Company's productivity efficiencies, lower manufacturing costs~~period primarily due to unfavorable product and ~~raw material substitution cost savings generated by our operations excellence initiatives.~~customer mix.

Selling, General and Administrative Expenses:


(dollars in millions)	Quarter Ended September 30,								Quarter Ended March 31,
SG&A Expenses	2012			2011			Change
									2013			2012			Change
SG&A expenses	$	43.0		$	40.5		$	2.5	$	45.1		$	40.9		$	4.2
SG&A expenses as a percentage of sales	21.8		%	21.3		%			21.0		%	20.6		%

Selling, general and administrative (“SG&A”) expenses for the quarter ended ~~September 30, 2012~~March 31, 2013 were ~~$43.0~~$45.1 million, an increase of ~~$2.5~~$4.2 million or 6%10% compared to the ~~third~~first quarter in the prior year. The increase in SG&A ~~expenses~~ was due to ~~higher employee related costs~~the incremental impact of our 2012 acquisitions of Novel and Jamco of $3.0 million and investments in our information technology initiatives of $0.6 million, partially offset by lower selling expenses of $0.5 million. SG&A in the first quarter of 2012 was favorably impacted by the recovery of $1.1 million ~~primarily medical costs, increased selling and distribution costs of $0.9 million, and higher outside consulting costs of $0.9 million.~~from bad debt expense associated with a specific customer. Restructuring and unusual charges of $0.5 million were recorded in SG&A in both the ~~third~~first quarter of ~~2012 included $1.7 million for severance costs~~2013 and lease obligations offset by a gain of $0.1 million for the sale of a Distribution Segment warehouse. Included in SG&A expenses in third quarter 2011were restructuring and other unusual charges of $2.0 million, primarily for an environmental study at the New Idria Mercury Mine.2012.

Interest Expense:


(dollars in millions)	Quarter Ended September 30,											Quarter Ended March 31,
Net Interest Expense	2012			2011			Change			% Change
												2013			2012			Change		% Change
Net interest expense	$	1.2		$	1.3		$	(0.1	)	(8	)%	$	1.1		$	1.1		$	—	—	%
Outstanding borrowings	$	96.7		$	80.2		$	16.5				$	103.6		$	80.2		$	23.4
Average borrowing rate	4.71		%	5.64		%						4.57		%	5.61		%

Net interest expense in both the ~~third~~first quarter of 2013 and 2012 was ~~$1.2~~$1.1 million ~~down slightly compared to the prior year.~~. Lower average borrowing rates asresulting from a ~~result of the~~ mix of debt outstanding ~~more than~~ offset a higher average borrowing base in the first quarter ~~over quarter. Outstanding~~of 2013 compared to 2012, as indicated by the outstanding borrowings ~~at September 30, 2012 were higher than September 30, 2011 as the Company borrowed from it's revolving credit facility~~ for ~~the acquisition of Novel in July 2012.~~each period presented.

Income Taxes:


(dollars in millions)	Quarter Ended September 30,						Quarter Ended March 31,
Consolidated Income Taxes	2012			2011
							2013			2012
Income before taxes	$	8.6		$	6.0		$	12.2		$	16.0
Income taxes	$	2.8		$	(1.2	)	$	4.3		$	6.1
Effective tax rate	32.4		%	—			35.1		%	37.7		%

The effective tax rate was ~~32.4%~~35.1% for the quarter ended ~~September 30, 2012~~March 31, 2013 compared to ~~an effective rate of 20.3%~~37.7% in the prior year. The ~~current year~~lower effective tax rate ~~of 32.4%~~ is ~~less than~~attributable to changes in the ~~U.S. statutory~~foreign rate ~~of 35% primarily due to the benefit from estimated domestic production deduction and other permanent differences as well as the recognition of $0.2 million of previously reserved~~

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differential including foreign incentive tax ~~benefits. In~~credits for the quarter ended ~~September 30, 2011,~~March 31, 2013.

Acquisitions

In October 2012, the Company reported a tax benefit of $1.2 million. This tax benefit was the result of recognizing previously reserved tax benefits of $3.8 million related to the loss on sale of a foreign subsidiary in 2007 due to lapse of statute of limitations and other tax adjustments in the quarter. The tax benefits recognized exceeded tax expense on income for the quarter.

acquired ~~Comparison~~100% of the ~~Nine Months Ended~~stock of Jamco Products Inc. ("Jamco"), an Illinois corporation that is a leading designer and manufacturer of heavy-duty industrial steel carts and safety cabinets used across many markets. The total purchase price was approximately ~~September 30, 2012~~$15.1 million ~~to the Nine Months Ended~~in cash, net of ~~September 30, 2011~~$0.1 million of cash acquired.

~~Net Sales:~~

(dollars in millions)
Nine Months Ended
September 30,

Segment 2012 2011 Change % Change
Material Handling $ 201.6
$ 204.8
$ (3.2 ) (2 %)
Lawn and Garden $ 147.0
$ 154.8
$ (7.8 ) (5 %)
Distribution $ 132.0
$ 136.5
$ (4.5 ) (3 %)
Engineered Products $ 111.6
$ 85.2
$ 26.4
31 %
Intra-segment elimination $ (15.0 ) $ (18.2 ) $ 3.2
(18 %)
TOTAL $ 577.2
$ 563.1
$ 14.1
3 %

~~Net sales for the~~ ~~nine~~ ~~months ended~~ ~~September 30, 2012~~ ~~were $577.2 million, an increase of $14.1 million or 3% compared to the same period in the prior year. Sales increased $8.3 million from higher volumes driven by our growth~~Jamco's assets and ~~innovation initiatives and $9.0 million in sales from our acquisition~~liabilities are recorded at fair value as of ~~Novel from~~ the date of acquisition using primarily level 2 and ~~improved pricing of $0.6 million. These increases were partially offset by unfavorable foreign currency translation of $3.8 million.~~

~~Net sales~~level 3 fair value inputs. Intangible assets included in the Material Handling Segment decreased $3.2 million or 2% in the nine months ended September 30, 2012 compared to the same period in 2011. The shift in demand in customer orders, primarily in the agricultural market, in the second and third quarters of 2012 to the end of the year was a primary cause of the decrease in sales. Sales were lower in most markets with the exception of the industrial market which had higher sales compared to the prior year period. The decrease in net sales included a reduction in volume of $10.0 million, partially offset by the inclusion of Novel sales from the date of acquisition of ~~$9.0 million. Also contributing~~Jamco are trade name of $1.2 million, technology of $2.0 million, non-compete agreement of $0.1 million and customer relationships of $2.4 million. The technology, non-compete agreement and customer relationships are subject to ~~a reduction in sales was unfavorable foreign currency translation~~amortization and have estimated useful lives of ~~$2.2 million.~~

~~Net sales in the Lawn~~ten, two and ~~Garden Segment~~six years, respectively. The Jamco trade name has an indefinite life and will be subject to periodic (at least annual) evaluation for the nine months ended September 30, 2012 were down $7.8 million or 5% compared to the nine months ended September 30, 2011. The decrease in net sales reflected lower volume of $5.8 million due to weak demand earlier in the year related to inventory carryover primarily as a result of poor weather conditions in 2011, lower pricing of $0.6 million and $1.4 million from the effect of unfavorable foreign currency translation.

Net sales in the Distribution Segment decreased $4.5 million or 3% for the nine months ended September 30, 2012 compared to the same period in 2011. Lower sales reflect $4.4 million from a decrease in volume, primarily due to slowing customer demand resulting from a decline in the replacement tire industry and lower equipment sales, and $0.1 million from the unfavorable effect of foreign currency translation.

In the Engineered Products Segment, net sales for the nine months ended September 30, 2012 increased $26.4 million, or 31% compared to the same period in the prior year. Net sales increased due to higher volume of $25.2 million and higher selling prices of $1.2 million, both driven by strong demand in the transplant automotive, recreational vehicle, marine and custom markets.

~~Cost of Sales & Gross Profit:~~

(dollars in millions)
Nine Months Ended
September 30,
Cost of Sales and Gross Profit 2012 2011
Cost of sales $ 419.1
$ 416.7
Gross profit $ 158.1
$ 146.4
Gross profit as a percentage of sales 27.4 % 26.0 %

Gross profit margin increased to 27.4% for the nine months ended September 30, 2012 compared with 26.0% in the prior year. Productivity improvements, lower manufacturing costs and product pricing strategies, primarily in the Material Handling Segment more than offset any impact of higher costs of raw materials, such as plastic resin, contributed to the higher margins through the first nine months of 2012 compared to the same period in 2011.

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impairment.

~~Selling, General and Administrative Expenses:~~

(dollars in millions)
Nine Months Ended
September 30,

SG&A Expenses 2012 2011 Change
SG&A expenses $ 121.2
$ 118.1
$ 3.1
SG&A expenses as a percentage of sales 21.0 % 21.0 %

SG&A expenses for the nine months ended September 30, 2012 were $121.2 million, an increase of $3.1 million or 3% compared to the same period in the prior year. The higher SG&A expenses were primarily attributable to an increase in employee related costs of $3.3 million, primarily medical, higher selling and distribution charges of $3.2 million and higher consulting costs of $0.7 million. These higher SG&A expenses were substantially offset by a reduction in bad debt expense of $3.2 million primarily attributable to the recovery in 2012 of a bad debt recorded in 2011. SG&A expense for the nine months ended September 30, 2012 included restructuring and other unusual charges of $2.7 million for severance, consulting and lease obligation costs. SG&A expenses for the nine months ended September 30, 2011 included restructuring and other unusual charges of $3.5 million for environmental charges, severance and lease obligation costs. Gains on the sale of property sold in the nine months ended September 30, 2012 and 2011, were $0.4 million and $0.5 million, respectively.

~~Interest Expense:~~

(dollars in millions)
Nine Months Ended
September 30,

Net Interest Expense 2012 2011 Change % Change
Net interest expense $ 3.3
$ 3.7
$ (0.4 ) (11 %)
Outstanding borrowings $ 96.7
$ 80.2
$ 16.5

Average borrowing rate 5.06 % 5.21 %

~~Net interest expense was $3.3 million for the~~ ~~nine~~ ~~months ended~~ ~~September 30, 2012~~ ~~compared to $3.7 million in the prior year. The reduction in 2012 interest expense was the result of lower average borrowing rates as compared to the first nine months of 2011.~~

~~Income Taxes:~~

(dollars in millions)
Nine Months Ended
September 30,
Consolidated Income Taxes 2012 2011
Income before taxes $ 33.6
$ 24.6
Income taxes $ 12.1
$ 6.1
Effective tax rate 36.1 % 24.6 %

The effective tax rate for the nine months ended September 30, 2012 was 36.1% compared to 24.6% in the prior year. The current year effective rate of 36.1% includes the benefit of approximately $0.8 million from reversing previously reserved tax benefits, however, these benefits were partially offset by tax expense of $0.6 million on pension liability recognized in other comprehensive income in a prior period. The effective tax rate of 24.6% for the nine months ended September 30, 2011 was significantly reduced by the recognition of previously reserved tax benefits of $3.8 million related to the loss on sale of a foreign subsidiary in 2007 due to lapse of statute of limitations and other tax adjustments.

~~Acquisitions~~

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range of plastic industrial safety products. The total purchase price was approximately $31.0 million, which includes a cash payment of $3.4 million, net of $0.6 million of cash acquired, assumed debt of approximately $26.0 million and contingent consideration of $0.9 million based on an earnout. A majority of the debt was repaid shortly after acquisition. The contingent consideration is contingent upon the results of Novel exceeding predefined earnings before interest, taxes, depreciation and amortization over the next four years. ~~The business is included in the Material Handling Segment.~~

~~Subsequent Event~~

On October 1, 2012, the Company acquired 100% of the stock of Jamco Products Inc. ("Jamco"), an Illinois corporation for $15.0 million, subject to closing adjustments. Jamco is a leading designer and manufacturer of heavy-duty industrial steel carts and safety cabinets. The business will be included in the Material Handling Segment. The Company has just begun the purchase price allocation determination.

Liquidity and Capital Resources

Cash ~~provided by~~used in operating activities was ~~$23.3~~$6.5 million for the ~~nine~~three months ended ~~September 30, 2012~~March 31, 2013 compared to ~~$40.2~~$6.4 million for the ~~nine~~three months ended ~~September 30, 2011~~March 31, 2012. The decrease of $16.9 million in current year cash provided by operations was primarily attributable to an increase in working capital of $13.5 million and a decrease of approximately $6.3 million for depreciation and other non-cash charges partially offset by improved net income of $2.9 million compared to the prior year.

For the ~~nine~~three months ended ~~September 30,~~March 31, 2013 and March 31, 2012, cash of ~~$25.4~~$26.2 million and $25.1 million was used for working capital, compared to $11.9 million for the nine months ended September 20, 2011. In the nine months ended September 30, 2012, a build of inventory due to seasonal requirements in the Lawn and Garden Segment and the deferral of sales to the fourth quarter in the Material Handling Segment resulted in higher levels and a use of $18.6 million of cash for the nine months ended September 30, 2012 compared to cash used of $8.8 million for the same period in 2011. Accounts payable and accrued expenses used cash of $4.9 million in the nine months ended September 30, 2012 compared with a use of $0.4 million in the prior year as a result of timing of payments at September 30, 2012.respectively.

Capital expenditures for the ~~nine~~three months ended ~~September 30, 2012~~March 31, 2013 were ~~$15.2~~$4.5 million and for the full year are expected to be approximately ~~$27~~$30 to ~~$30~~$35 million.

For the three months ended March 31, 2013, the Company used cash of $2.0 million to purchase 136 thousand shares of its own stock under a share repurchase program. The Company ~~received approximately $1.9 million in cash proceeds from~~accelerated its fourth quarter dividend payment to reduce the ~~sale of assets, including a warehouse, office buildings and equipment~~tax impact for its shareholders which resulted in the ~~nine~~payment in December 2012 rather than in the first quarter of 2013. The Company paid its fourth quarter 2011 dividends declared of $2.3 million during the three months ended ~~September 30,~~March 31, 2012. ~~In addition, the Company paid dividends of $7.6 million and $7.2 million in the~~ ~~nine~~ ~~months ended~~ ~~September 30, 2012~~ ~~and 2011, respectively.~~

~~Total debt~~Debt, net of cash at ~~September 30, 2012~~March 31, 2013 was ~~approximately $96.7~~$99.5 million compared ~~with $74.0~~to $88.9 million at December 31, ~~2011~~2012. The net increase in cash used for financing activities in 2012 was primarily the result of borrowings from our revolving credit facility for the acquisition of Novel. The Company’s 2010 Credit Agreement provides available borrowing up to $180 million, reduced for letters of credit issued, and, as of ~~September 30, 2012, there was $113.2 million available under this agreement.~~ As of ~~September 30, 2012~~March 31, 2013, the Company was in compliance with all its debt covenants. The most restrictive financial covenants for all of the Company’s debt are an interest coverage ratio, ~~defined~~(defined as earnings before interest and taxes divided by interest ~~expense,~~expense), and a leverage ratio, ~~defined~~(defined as earnings before interest, taxes, depreciation and amortization, as adjusted, compared to total ~~debt.~~debt). The ratios as of and for the period ended ~~September 30, 2012~~March 31, 2013 are shown in the following table:



	Required Level		Actual Level
Interest Coverage Ratio	2.25 to 1 (minimum)	~~10.93~~	10.50
Leverage Ratio	3.25 to 1 (maximum)	~~1.26~~	1.30

The Company believes that cash flows from operations and available borrowing under its Credit Agreement will be sufficient to meet expected business requirements including strategic initiatives, capital expenditures, dividends, working capital, debt service and to fund the stock repurchase program into the foreseeable future.

Item 3. Quantitative and Qualitative Disclosure About Market Risk

The Company has certain financing arrangements that require interest payments based on floating interest rates. The Company’s financial results are subject to changes in the market rate of interest. At present, the Company has not entered into any interest rate swaps or other derivative instruments to fix the interest rate on any portion of its financing arrangements with floating rates. Accordingly, based on current debt levels at ~~September 30, 2012~~March 31, 2013, if market interest rates increase one percent, the Company’s interest expense would increase approximately ~~$0.6~~$0.7 million annually.

Some of the Company’s subsidiaries operate in foreign countries and their financial results are subject to exchange rate movements. The Company has operations in Canada with foreign currency exposure, primarily due to sales made from businesses in Canada to customers in the United States. These sales are denominated in U.S. dollars. In addition, one of the ~~Company’s subsidiary~~Company's subsidiaries in Brazil

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has loans denominated in U.S. dollars. The Company has a systematic program to limit its exposure to fluctuations in exchange rates related to certain assets and liabilities of its operations in Canada and Brazil that are denominated in U.S. dollars. The net exposure generally ranges from $5 to $10 million. The foreign currency contracts and arrangements created under this program are not designated as hedged items under FASB ASC 815 Derivatives and Hedging, and accordingly, the changes in the fair value of the foreign currency arrangements, which have been immaterial, are recorded in the income statement. The Company’s foreign currency arrangements are generally three months or less and, as of ~~September 30, 2012~~March 31, 2013, the Company had no foreign currency arrangements or contracts in place.

The Company uses certain commodities, primarily plastic resins, in its manufacturing processes. The cost of operations can be affected as the market and price for these commodities changes. The Company currently has no derivative contracts to hedge this risk and has no significant purchase obligations to purchase fixed quantities of such commodities in future periods. Significant future increases in the cost of plastic resin or other adverse changes in the general economic environment could have a material adverse impact on the Company’s financial position, results of operations or cash flows.

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Item 4. Controls and Procedures

The Company maintains disclosure controls and procedures, as defined under Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended, that are designed to ensure that information required to be disclosed in the Company’s reports under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the Commission’s rules and forms and that such information is accumulated and communicated to the Company’s management, including its Chief Executive Officer and Chief Financial Officer, as appropriate, to allow for timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

The Company carries out a variety of on-going procedures, under the supervision and with the participation of the Company’s management, including the Company’s Chief Executive Officer and Chief Financial Officer, to evaluate the effectiveness of the design and operation of the Company’s disclosure controls and procedures. Based on the foregoing, the Company’s Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures were effective at a reasonable assurance level as of the end of the period covered by this report.

Changes in Internal Control Over Financial Reporting

We are undertaking a phased approach to implementation of enterprise resource planning systems in our Distribution Segment, Material Handling Segment and at Corporate, a significant portion of which will be completed in 2013, with the balance to be completed in 2014. We believe we are maintaining and monitoring appropriate internal controls during the implementation period. There ~~has~~have been no ~~change~~other changes in ~~the Company’s~~our internal ~~controls~~control over financial reporting during the ~~Company’s most recent fiscal quarter~~period covered by this report that ~~has~~have materially affected, or are reasonably likely to materially affect, ~~the Company’s~~our internal ~~controls~~control over financial reporting.

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Part II — Other Information

Item 1. Legal Proceedings

Certain legal proceedings in which the Company is involved are discussed in the Contingencies Note of the Unaudited Condensed Consolidated Financial Statements in Part I of this report and Part I, Item 3 of the Company's Annual Report on Form 10-K for the year ended December 31, 2012. 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. We believe that the outcome of these lawsuits and other proceedings will not individually or in the aggregate have a future material adverse effect on our consolidated financial position, results of operations or cash flows.

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

The following table presents information regarding the Company’s stock repurchase plan during the three months ended March 31, 2013.



	Total Number of Shares Purchased	Average Price Paid per Share		Total Number of Shares Purchased as Part of the Publicly Announced Program	Maximum number of Shares that may yet be Purchased Under the Plan (1)
1/1/13 to 1/31/13	34,258	$	14.42	331,947	2,668,053
2/1/13 to 2/28/13	101,868	$	14.34	433,815	2,566,185
3/1/13 to 3/31/13	—	$	—	—	—

(1)

On November 20, 2012, the Company adopted a Rule 10b5-1 plan (the “Plan”) for the purpose of repurchasing up to two million one hundred fifty thousand shares of its common stock in accordance with the guidelines specified in Rule 10b5-1 of the Securities Exchange Act of 1934. The Plan was established in connection with the Board authorized repurchase of up to five million shares that was announced on May 2, 2011. The Company previously completed a repurchase of two million shares in 2011 pursuant to a previous Rule 10b5-1 plan, which was also in connection with the authorized five million share repurchase.

Item 6. Exhibits

(a) Exhibits

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.
~~October 30, 2012~~May 1, 2013	By:	/s/ Greggory W. Branning
		Greggory W. Branning
		Senior Vice President, Chief Financial Officer and Corporate Secretary (Duly Authorized Officer and Principal Financial and Accounting Officer)

1121

Table of contents

EXHIBIT INDEX



3(a)	Myers Industries, Inc. Amended and Restated Articles of Incorporation. Reference is made to Exhibit 3(a) to Form 10-K filed with the Commission on March 16, 2005.
3(b)	Myers Industries, Inc. Amended and Restated Code of Regulations. Reference is made to Exhibit ~~3(b)~~3.1 to Form ~~10-K~~8-K filed with the Commission on ~~March~~April 12, ~~2010.~~2013.
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 10.1 to Form 10-Q filed with the Commission on May 1, 2009.*
10(c)	Myers Industries, Inc. Amended and Restated Dividend Reinvestment and Stock Purchase Plan. Reference is made to Exhibit ~~10(d)~~99 to Post-Effective Amendment No. 2 to Form ~~10-K~~S-3 filed with the Commission on ~~March19,~~March 19, 2004.
10(d)	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 August 9, 2006.*
10(e)	2008 Incentive Stock Plan of Myers Industries, Inc. Reference is made to Exhibit 4.3 to Form S-8 filed with the Commission on March 17, 2009.*
10(f)	Amendment No. 1 to the 2008 Incentive Stock Plan of Myers Industries, Inc. Reference is made to Exhibit 10.1 to Form 8-K filed with the Commission on August 3, 2010.*
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)	Severance Agreement between Myers Industries, Inc. and John C. Orr effective June 1, 2011. Reference is made to Exhibit 10.1 to Form 8-K filed with the Commission on March 7, 2011.*
10(i)	Amended and Restated Employment Agreement between Myers Industries, Inc. and John C. Orr effective June 1, 2008. Reference is made to Exhibit 10.1 to Form 8-K filed with the Commission on June 24, 2008.*
~~10(j)~~	First Amendment to Amended and Restated Employment Agreement between Myers Industries, Inc. and John C. Orr entered into as of April 21, 2009. Reference is made to Exhibit 10.1 to Form 8-K filed with the Commission on April 22, 2009.*
~~10(k)~~	Second Amendment to Amended and Restated Employment Agreement between Myers Industries, Inc. and John C. Orr entered into as of March 8, 2010. Reference is made to Exhibit 10.1 to Form 8-K filed with the Commission on March 9, 2010.*
~~10(l)~~	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(m)~~10(j)	~~Third~~ Amendment to the Myers Industries, Inc. Executive Supplemental Retirement Plan (John C. Orr) effective June 1, 2008. Reference is made to Exhibit 10.2 to Form 8-K filed with the Commission on June 24, 2008.*
~~10(n)~~10(k)	Severance Agreement between Myers Industries, Inc. and David B. Knowles dated August 31, 2012. Reference is made to Exhibit 10.1 to Form 8-K filed with the Commission on August 31, 2012.*
~~10(o)~~10(l)	Non-Disclosure and Non-Competition Agreement between Myers Industries, Inc. and David B. Knowles dated June 19, 2009. Reference is made to Exhibit 10.2 to Form 8-K filed with the Commission on June 22, 2009.*
~~10(p)~~10(m)	Amendment to Myers Industries, Inc. Executive Supplemental Retirement Plan (David B. Knowles) effective June 19, 2009. Reference is made to Exhibit 10.3 to Form 8-K filed with the Commission on June 22, 2009.*
~~10(q)~~10(n)	Severance Agreement between Myers ~~Industires,~~Industries, Inc. and Gregg Branning dated September 1, 2012. Reference is made to Exhibit 10.1 to Form 8-K filed with the Commission on September 4, 2012.*
~~10(r)~~10(o)	Third Amended and Restated Loan Agreement between Myers Industries, Inc. and JP Morgan Chase Bank, National Association, as Agent, dated as of November 19, 2010. Reference is made to Exhibit 10.1 to Form 8-K filed with the Commission on November 23, 2010.
~~10(s)~~10(p)	Note Purchase Agreement between Myers Industries, Inc. and the Note Purchasers, dated December 12, 2003, regarding the issuance of $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.
~~10(t)~~10(q)	Third Amendment to the Myers Industries, Inc Executive Supplemental Retirement Plan (John C. Orr) effective June 1, 2011. Reference is made to Exhibit 10.2 to Form 8-K filed with the Commission on March 7, 2011.*
10(r)	Amendment No. 2 to the 2008 Incentive Stock Plan of Myers Industries, Inc. Reference is made to Exhibit 10(u) to Form 10-K filed with the Commission on March 4, 2013.*
10(s)	Non-Competition and Confidentiality Agreement between Myers Industries, Inc. and Gregg Branning dated September 1, 2012.*
10(t)	Performance Bonus Plan of Myers Industries, Inc. Reference is made to Exhibit 10.1 to Form 8-K filed with the Commission on April 30, 2013.*
14(a)	Myers Industries, Inc. Code of Business Conduct and Ethics. Reference is made to Exhibit 14(a) to Form ~~10-K~~10-K/A filed with the Commission on ~~March 16, 2005.~~April 1, 2013.
14(b)	Myers Industries, Inc. Code of Ethical Conduct for the Finance Officers and Finance Department Personnel. Reference is made to Exhibit 14(b) to Form ~~10-K~~10-K/A filed with the Commission on ~~March 16, 2005.~~April 1, 2013.
21	List of Direct and Indirect Subsidiaries, and Operating Divisions, of Myers Industries, Inc. Reference is made to Exhibit 21 to Form 10-K filed with the Commission on March 4, 2013.
31(a)	Certification of John C. Orr, President and Chief Executive Officer of Myers Industries, Inc., pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31(b)	Certification of Greggory W. Branning, Senior Vice President, Chief Financial Officer and Corporate Secretary of Myers Industries, Inc., pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32	Certifications of John C. Orr, President and Chief Executive Officer, and Gregg W. Branning, Executive Vice President, Chief Financial Officer and Corporate Secretary, of Myers Industries, Inc. pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101	The following financial information from Myers Industries, Inc. Quarterly Report on Form 10-Q for the quarter ended ~~September 30, 2012~~March 31, 2013 filed with the SEC on ~~October 30, 2012,~~May 1, 2013, formatted in XBRL includes: (i) Condensed Consolidated Statements of ~~Income~~Financial Position at March 31, 2013 and ~~Comprehensive~~December 31, 2012, (ii) Condensed Consolidated Statements of Income For the fiscal periods ended ~~September 30,~~March 31, 2013 and 2012, ~~and 2011, (ii)~~(iii) Condensed Consolidated Statements of ~~Financial Position at September 30,~~Comprehensive Income (Loss) For the fiscal periods ended March 31, 2013 and 2012, ~~and December 31, 2011,(iii)~~(iv) Condensed Consolidated Statements of Cash Flows for the fiscal periods ended ~~September 30,~~March 31, 2013 and 2012, ~~and 2011, (iv)~~(v) Condensed Consolidated Statement of ~~Shareholders’~~Shareholders' Equity for the fiscal period ended ~~September 30, 2012,~~March 31, 2013, and ~~(v)~~(vi) the Notes to ~~Condensed~~ Consolidated Financial Statements.



*	Indicates executive compensation plan or arrangement.

**	Pursuant to Item 601(b)(2) of Regulation S-K, certain exhibits and schedules have been omitted from this filing. The registrant agrees to furnish the Commission on a supplemental basis a copy of any omitted exhibit or schedule.

1222



							Accumulated
				Defined			other
	Foreign			benefit			comprehensive
	currency			pension plan			income
Balance at January 1, 2011	$	12,234		$	(2,070	)	$	10,164
Current-period other comprehensive income	1,810			—			1,810
Balance at March 31, 2011	$	14,044		$	(2,070	)	$	11,974
Current-period other comprehensive income	824			—			824
Balance at June 30, 2011	$	14,868		$	(2,070	)	$	12,798
Current-period other comprehensive income	(6,177		)	—			(6,177		)
Balance at September 30, 2011	$	8,691		$	(2,070	)	$	6,621

Balance at January 1, 2012	$	9,994		$	(2,700	)	$	7,294
Current-period other comprehensive income	1,385			—			1,385
Tax effect of pension liability from prior periods	—			632			632
Balance at March 31, 2012	$	11,379		$	(2,068	)	$	9,311
Current-period other comprehensive income	(612		)	—			(612		)
Balance at June 30, 2012	$	10,767		$	(2,068	)	$	8,699
Current-period other comprehensive income	2,926			—			2,926
Balance at September 30, 2012	$	13,693		$	(2,068	)	$	11,625



	Shares		Average Grant-Date Fair Value
Unvested shares at January 1, 2012	288,500
Granted	165,495		$	13.79
Vested	(40,500	)	—
Forfeited	(32,275	)	10.03
Unvested shares at September 30, 2012	381,220		$	11.01