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Article by DailyStocks_admin    (12-03-08 04:32 AM)

Filed with the SEC from Nov 20 to Nov 26:

Myers Industries (MYE)
Gamco Investors will nominate four directors to the Myers Industries board. They are Edward Crawford, Gary Davis, Clarence Davis and Avrum Gray. Gamco reported holding 1.73 million shares (4.91%).

BUSINESS OVERVIEW

(a) General Development of Business

Myers Industries, Inc. (the “Company”) was founded in Akron, Ohio, in 1933. The Company grew from the vision of two brothers, Louis and Meyer Myers, and a partnership based on a $620 loan, tire repair merchandise and a used truck. The new venture was named “Myers Tire Supply” and serviced tire dealers and retreaders through distribution of tools and supplies needed to grow their businesses. The Company expanded into manufacturing operations in the post-war 1940s and in 1963 was renamed Myers Industries, Inc. to reflect its diversity. In 1971, the Company went public, and the stock is traded today on the New York Stock Exchange under the ticker symbol MYE.

Still headquartered in Akron, Ohio, Myers Industries has grown from a small storefront into a premier, international manufacturing and distribution business. Today, the Company manufactures a diverse range of polymer products for industrial, agricultural, automotive, commercial and consumer markets. Myers Industries is a leader in the manufacturing of plastic reusable material handling containers and pallets and North America’s leading producer of plastic horticultural pots, trays and flower planters. Other principal product lines include plastic storage and organization containers, plastic and rubber OEM parts, rubber tire repair products and custom plastic and rubber products.

The Company is also the largest wholesale distributor of tools, equipment and supplies for the tire, wheel and undervehicle service industry in the United States. The distribution products range from tire balancers and alignment systems to valve caps, tire repair tools and other consumable service supplies.

As of March 10, 2008, the Company included: 25 manufacturing facilities and 43 distribution branches located throughout North, Central and South America; approximately 12,000 manufactured products and 10,000 distributed products; and more than 4,500 employees.

Serving customers around the world, products and related services from Myers Industries’ brands provide a wide range of performance benefits to customers in diverse niche markets. Some of these benefits include increasing productivity, lowering material handling costs, improving product quality, reducing labor costs, shortening assembly times, eliminating solid waste and increasing profitability. The Company’s business strategy — the “Strategic Business Evolution” — is focused on sustainable, profitable growth guided by five key operating principles: 1) Business Growth, 2) Customer Satisfaction, 3) Cost Control, 4) Organizational Development and 5) Positioning the Business for the Future. Applying these within our Strategic Business Evolution, the Company emphasizes:


• Industry-leading innovation of niche, high margin products;

• Being the low-cost provider of certain commodity products where our brands excel;

• Achieving leadership in key product areas through breadth of offering, consistent quality and superior customer service;

• Concentrating our efforts on niche markets where our capabilities create profit opportunities for our customers and ourselves;

• Leveraging brand equity and capabilities to grow business with existing customers and cultivate new ones, particularly in emerging growth markets where we can deliver the greatest value and achieve the best returns;

• Investing in new technologies and processes to reinforce customer satisfaction and market strength across our key business segments;

• Succession plans through our management teams at all levels in the Company, ensuring the right people are in the right positions to grow;

• Selective acquisitions as opportunities arise to enhance our leadership in key markets;

• Potential divestiture of businesses with non-strategic products or markets, aligning our resources with the best avenues for long-term, profitable growth potential; and

• Consolidation and rationalization initiatives to reduce costs and improve productivity within the Company’s manufacturing and distribution footprint.

The Company’s segments and brands are under continuous review for strategic fit and growth potential. The review process is dedicated to strengthening innovation, enhancing brand leadership in our markets, building strong customer relationships and positioning the Company to grow on a sustainable basis.

On April 24, 2007, Myers Industries, Inc. entered into an Agreement and Plan of Merger (the “Merger Agreement”) with MYEH Corporation, a Delaware corporation (the “Parent”) and MYEH Acquisition Corporation, an Ohio corporation (“MergerCo”). Under the terms of the Merger Agreement, MergerCo will be merged with and into the Company, with the Company continuing as the surviving corporation and becoming a wholly-owned subsidiary of Parent (the “Merger”). Parent is owned by GS Capital Partners, LP (GSCP) and other private equity funds sponsored by Goldman, Sachs & Co. In December 2007, an agreement was made to extend this date for consummating the Merger from December 15, 2007 to April 30, 2008. For additional information regarding this extension see the footnote titled Merger Agreement in the Financial Statements.


(b) Financial Information About Segments

The response to this section of Item 1 is contained in the Industry Segments footnote of the Notes to the Consolidated Financial Statements under Item 8 of this report.


(c) Description of Business

The Company conducts its business activities in four distinct business segments, including three in manufacturing and one in distribution. The manufacturing segments consist of: North American Material Handling, Lawn and Garden, and Automotive and Custom. During the year ended December 31, 2006, the Company also included one other manufacturing segment, European Material Handling, which was moved to discontinued operations status in the third quarter of 2006 after we publicly disclosed our intent to divest their business. The businesses in that segment were subsequently sold in February 2007.

In our manufacturing segments, we design, manufacture, and market a variety of plastic and rubber products. These range from plastic reusable material handling containers and small parts storage bins to plastic horticultural pots and hanging baskets, decorative resin planters, plastic and rubber OEM parts, tire repair materials and custom plastic and rubber products.

The Distribution Segment is engaged in the distribution of tools, equipment and supplies used for tire, wheel and undervehicle service on passenger, heavy truck and off-road vehicles.

Manufacturing Segments Overview

Lawn and Garden Segment

The Company’s Lawn and Garden Segment, the largest segment in net sales dollars, includes the Dillen ® , ITML ® , Pro Cal ® and Listo tm brands, which serve the horticultural container needs of the North American floriculture / horticulture market. Our product selection, manufacturing capabilities, quality and customer service rank at the top of our category in the market, which spans growers with 80-plus acre greenhouse facilities to small regional nurseries to retail garden centers and retail home centers.

In January 2007, Myers Industries significantly expanded its brand presence and strength in the marketplace with the acquisition of ITML Horticultural Products Inc. (“ITML”). Formerly a private company based in Ontario, Canada, ITML designs and manufactures plastic containers and related products for grower markets across North America. With facilities located in Canada and the U.S., ITML utilizes injection molding, blow molding and thermoforming processes, as well as extensive technology for resin reprocessing, to manufacture its products. ITML continues to be integrated into Myers Industries’ Lawn and Garden Segment and operates as a business unit (brand) within the segment. The addition of ITML to Myers’ Lawn and Garden Segment represents a significant growth opportunity through expanded product lines and manufacturing capabilities, new sales channels and geographies, as well as synergistic activities among the brands.

For growers, our Dillen , ITML and Pro Cal products are available both direct and through a network of leading horticultural distributors. Our product range is one of the most extensive in North America. Products include injection-molded and thermoformed pots, hanging baskets, flats and carry trays, plug trays, nursery containers, propagation sheets, flats and specialty pots. Dillen and ITML are focused on the broader range of products, while Pro Cal specializes in injection-molded and thermoformed nursery containers. Product innovation is centered on the changing needs of the professional grower, including increased automation in growing operations, improving efficiency and reducing costs. For example, the recent focus at Dillen and ITML has been in lightweight co-extruded (CoEx) thermoformed pots. CoEx pots have a thinner wall construction compared to injection pots and combine a color exterior with a black interior layer; that interior barrier helps to protect plant roots against potential sunlight damage in both grower and retail operations.

In addition to working with growers on product innovation, we support their needs for branding and retail merchandising programs with services such as in-mold labeling, multi-color offset printing and adhesive labeling on our round and square pots. Exclusive products like our picturePot ® graphic containers add to our leadership role in the branding sector of marketplace. These custom-made pots are designed specific to the grower and/or plant variety with vivid color photos, graphics and care instructions. Pot designs are then printed on flat, polypropylene rolls, die-cut, and then formed into a variety of sizes— all at speeds unmatched by any other plant container manufacturing process. Once filled with plant material by the grower and shipped to retail, picturePots serve as packaging for plants and create vibrant point-of-sale materials. To meet growers’ increased needs for branding both their names and their plant varieties, our Dillen and ITML brands expanded their printing and labeling operations with in-mold labeling. This process also allows for stunning graphics and colors to be printed on flat labels, which are then robotically inserted into the mold before the container is formed. Once molded, the label becomes part of the container. From offset printing and adhesive labeling to picturePot and in-mold labeling, we provide customers with the “good,” “better” and “best” options for branding and merchandising their plant varieties.

For retailers, our Listo product line encompasses decorative resin planters that feature intricate molding details and unique finishes in ceramic, metallic, weathered stone and textured styles. The upscale look of these decorative planters captures the retailer’s attention and the consumer’s imagination. Products include a diverse offering of planters, window boxes, urns and hanging baskets for indoor and outdoor container gardening. Consistent new product development is key to success in the retail garden center and mass merchandiser channels. Proprietary molding and finishing processes, along with creative designs, deliver the unique look in the decorative resin planter category that sets our planters apart from the competition in leading retail stores across North America.

In addition to Listo, two other brands in the retail channel of the Lawn and Garden Segment include Planters’ Pride ® and Akro-Mils Lawn & Garden Products ® . Planters’ Pride, a retail division of ITML, has a diverse product offering dedicated to the beginning gardener. Featured products include a wide range of Fiber Grow ® seed starting kits with 100 percent peat free renewable coir pellets and other garden accessories, backed by customizable retail displays. Akro-Mils Lawn & Garden provides a wide range of plastic patio pots, planters and hanging baskets as well as watering cans and other related items for the home gardener.

Myers Industries seeks to expand its market leadership in the Lawn and Garden Segment through unrivaled product innovation and selection, diverse manufacturing processes, superior customer satisfaction and an array of internal and external strategic growth initiatives. One of these initiatives includes expanding the use of reprocessed and recycled materials in the manufacturing process, which helps to reduce the Company’s exposure to higher costs for virgin raw material. The Company has the capability to produce a wide range of plastic materials for use across its many product lines and is committed to being a “green” manufacturer to protect the environment.

Weather conditions, grower consolidation and grower supply chain adjustments to meet retail merchandising programs are some of the key external factors that influence this industry. As one of the industry leaders, however, the Company is well positioned to further align our capabilities to effectively meet the external challenges and changing needs of customers and the markets.

North American Material Handling Segment

The North American Material Handling Segment is comprised of plastic reusable material handling containers, pallets and bins, as well as metal shelving, cabinet and racking systems. The two brands in this segment, Buckhorn ® and Akro-Mils tm , have strong leadership positions across markets such as automotive, appliance, general industrial / manufacturing, distribution, agriculture, retail and food processing. This leadership is built through constant innovation, diverse manufacturing processes, consistent quality and superior customer service resulting in significant productivity and cost-saving benefits for our customers.

Buckhorn’s reusable containers and pallets are used in closed-loop supply chains to help customers reduce material handling costs by replacing single-use cardboard boxes, easily damaged wooden pallets and high-cost steel containers. Cost-reduction benefits include: improving product protection, increasing handling efficiencies, reducing freight costs and eliminating solid waste and disposal costs. Small parts bins, storage systems and transport products from Akro-Mils provide similar benefits by creating storage and organization efficiency throughout customers’ operations.

The Buckhorn brand in the North American Material Handling Segment offers a product selection rich in both breadth and depth, as well as a direct sales force with the packaging and material handling expertise that makes Buckhorn a key solutions partner for our customers. Buckhorn’s product line spans injection-molded hand-held containers and totes; injection and structural foam-molded bulk transport containers in both collapsible and fixed-wall styles; and injection and structural foam pallets. Buckhorn also produces custom material handling packaging. Customers rely on Buckhorn’s single-source efficiency and the productivity and profitability benefits delivered through value-added innovation, broad product selection, quality and packaging conversion services.

Buckhorn hand-held containers include attached lid, detached lid, bi-color and specialty styles that stack and/or nest for efficient space usage, thus lowering freight and storage costs. In automotive plants across North America, our container and pallet systems are reused hundreds of times to ship products as small as fasteners or as large as sidewall components from suppliers directly to assembly areas — protecting parts throughout the supply chain and reducing scrap rates. Our attached lid containers and pallets are used in retail distribution centers to organize inventory, sort orders and then transport products directly to stores. In the food processing and distribution industry, our specialty containers provide superior protection to food products while in transit and are more sanitary than cardboard boxes. For example, case-ready, packaged meats are delivered from processors to retailers in containers designed to accommodate specific cuts and package sizes, while maintaining optimal airflow for chilling.

Buckhorn’s selection of collapsible and fixed-wall bulk transport containers leads the North American material handling industry. Bulk containers perform both light- and heavy-duty tasks, whether distributing seed products, carrying large automotive components or shipping liquids across long distances. These containers range in size from footprints of 32” x 30” to 70” x 48”; heights up to 65”; and weight capacities up to 3,000 lbs. Bulk containers are compatible with forklifts for easy handling. Many of the containers collapse to a third of their size for space-saving stacking, storage and return transport, thus helping to reduce freight and storage costs.

Examples of bulk container applications include our SeedBoxes tm , which are used by leading seed distributors to efficiently transport and dispense up to 2,500 lbs. of their products. The unique SeedBox can be emptied in approximately 30 seconds, then broken down for return shipping and refilling, thus eliminating waste created by traditional seed bags. Automotive manufacturers and their suppliers employ our DunnageReady tm Bulk Container to ship sensitive parts direct to assembly areas. The DunnageReady Container accommodates custom-made, protective inserts to separate parts and prevent scratches or other costly damage to Class A painted surfaces. Manufacturers of tomato paste employ our Citadel ® bulk containers to move processed tomato products across the country in railcars. The smooth-sided, impact-resistant containers replace wooden crates and steel containers that can cause product damage and contamination. Citadel containers can carry up to 3,000 lbs. / 300 gallons of liquefied product, safely stack when fully loaded and are designed for long-term indoor or outdoor storage of loads. This product line is applicable to other food processing and ingredient niches such as concentrates, oils, syrups and similar products.

Further strengthening our bulk container product line, in March 2007 Myers Industries purchased strategic assets of Schoeller Arca Systems, Inc. North America (SASNA), a manufacturer of reusable bulk containers. The purchase included select equipment, molds and inventory related to the well-known Xytec ® and Combo tm product lines. The product lines were renamed the “XT Series” (formerly Xytec) and “Caliber tm Intermediate Bulk Containers” (formerly Combo) and integrated into the Buckhorn brand. This was an opportunistic purchase to enhance our brand leadership and to expand our bulk container product line for greater penetration in the liquid materials handling and transport market, particularly in niche markets of food processing.

Buckhorn’s plastic pallets interwork with the hand-held containers and totes to create a completely reusable system and provide efficient space utilization in plants, warehouses and truck trailers— helping customers to reduce storage and freight costs. Buckhorn also produces a wide range of specialty pallets for niche-type shipping applications, such as drum pallets for chemical and liquid transport.

Our Akro-Mils brand provides customers with “everything needed to store, organize and transport for greater productivity and profitability.” This mix of plastic, metal and wooden material handling products serves industrial and commercial end-users through leading industrial supply catalogers and material handling distributors. Products range from AkroBins ® — the industry’s leading small parts bins— to Super-Size AkroBins, metal panel and bin hanging systems, metal storage cabinet and bin systems, wire shelving systems, plastic and metal transport carts and a wide variety of custom storage and transport products. Capabilities used throughout the Akro-Mils product line include: injection molding, metal forming, powder-coat painting / metal finishing and wood fabrication, as well as the additional capabilities through potential synergies with Buckhorn.

Akro-Mils products deliver their storage and organization solutions in a wide variety of applications, from creating assembly line workstations to organizing medical supplies and retail displays. Emphasis is placed on product bundling and customizing systems to create specific storage and organization configurations for customers’ operations. For example, industrial manufacturers with specialized tool and parts storage areas— known as “tool cribs”— use a combination of Akro-Mils bins, racking, locking cabinets, work tables and transport carts to speed assembly times, maintain accurate inventories and reduce loss. Metal carts and dollies are paired with custom-made containers to create unique transport systems capable of handling parts and components both small and large. Our powder coating / painting capability allows for high-quality, scratch-resistant finishing of metal products in a multitude of colors and finish styles.

Cross-marketing and cross-selling are key synergies between the North American Material Handling Segment brands. Equally important are cross-manufacturing capabilities that allow each brand to offer customers a wider range of value-added design and molding benefits. In addition to standard material handling products, we utilize the extensive design and manufacturing capabilities between Buckhorn and Akro-Mils for turnkey production of custom material handling products.

Sustainable, profitable growth in this segment is fueled by: a strong focus on innovation with value-added new products; concentrating sales efforts on niche markets and applications; increasing awareness of plastic reusable material handling products to drive conversions from cardboard and wood products; and managing the balance of product pricing and raw material costs. The potential for strategic, bolt-on acquisitions also provides opportunities to expand the scope of our brand leadership and the value-added products and services we bring to customers.

Automotive and Custom Segment

Myers Industries serves diverse niche markets and customers with rubber and plastic products from the Automotive and Custom Segment. Through our Ameri-Kart tm , Buckhorn Rubber tm , Michigan Rubber tm , Patch Rubber tm and WEK tm brands, we provide an array of engineered plastic and rubber original equipment and replacement parts, tire repair materials and custom components and materials. We offer a unique combination of product design, molding and finishing expertise to support our customers’ needs for efficient, single sourcing of parts and turnkey custom product development. In addition to our plastics molding capabilities, we utilize a full range of rubber molding processes that include: injection molding; compression and transfer molding; compounding, calendering and extrusion; 3-D co-extrusion blow molding; rubber-to-metal bonding; and rubber-to-plastic bonding. Additional capabilities include custom rubber formulation, mixing and testing.

The Michigan Rubber and WEK brands support passenger car and truck manufacturers to create rubber and plastic components and assemblies for a wide variety of vehicle platforms. Our proven track record and expertise affords us “guest engineering” status with many of the world’s leading automakers and suppliers. Our molding and assembly capabilities produce a diversified product mix, which includes: air induction hoses, HVAC components, noise vibration dampers, grommets, bushings, tubing assemblies, seals and gaskets. The Company’s focus in the automotive arena is on highly engineered, niche products for select automotive platforms and strategic, long-term customers — both transplants and domestics— who reward their value-added manufacturing partners.

Manufacturers of recreational vehicles (“RV”) and watercraft rely on our design expertise and production capabilities to provide them an assortment of products. Through our Ameri-Kart brand, we create rotationally-molded plastic tanks for water, fuel and waste handling that are assembled to fit the precise space constraints within RV and marine craft designs. We utilize thermoforming and rotational molding to manufacture plastic trim and interior parts for RVs and helm consoles and seat frames for a wide variety of watercraft.

Our Buckhorn Rubber brand excels in engineering, quality and service to manufacturers of heavy trucks, trailers, construction and agriculture equipment. These customers rely on our custom-molded rubber air intake hoses, hood latches, boots, bellows, bushings and other products to perform under the harshest conditions, whether under-the-hood or on the vehicle’s body. As one example of our market strength, we provide air intake hoses in more than 200 standard fittings for the majority of Class 6 and 8 trucks. Our expertise in co-extrusion blow molding with three-dimensional capabilities — utilizing both rubber and plastic — allows us to create single-piece, complex parts. These parts possess both rigid and flexible features and extreme angles to meet the needs of changing vehicle design. As heavy trucks and off-road vehicles are redesigned, engineering and production synergies between our Buckhorn Rubber and Michigan Rubber brands will keep Myers Industries in a strong position to mold new components for our customers’ precise needs.

Specialized manufacturing expertise, including rubber-to-metal and rubber-to-plastic bonding, enables us to create a range of specific performance custom rubber products used in marine vehicles and lawn maintenance equipment. We also employ our unique rubber-to-metal bonding process to manufacture parts for the water control industry. These products include main valves for fire hydrants and mechanical joint gaskets for water supply lines used in residential and commercial construction.

Our manufacturing of rubber products began more than 60 years ago with our Patch Rubber brand, initially making tire patches. Today, we manufacture one of the most comprehensive lines of tire repair and retreading products in the United States. Service professionals rely on our extensive product selection and quality for safe, cost-effective repairs to passenger, truck and off-road tires. Products range from the plug that fills a puncture, the cement that seats the plug, the tire innerliner patch and the final sealing compound. Patch brand repair products maintain a strong position in the tire service markets with exclusive sales through our Distribution Segment’s branch network.

Also within the capabilities of Patch Rubber, we apply our rubber calendering and compounding expertise to create a diverse portfolio of products outside of the tire repair market, such as reflective highway marking tapes. Our rubber-based tape and symbols provide the durability and brightness that construction professionals demand to replace paint for marking road repair, intersections and hazardous areas. Compared with traditional highway paint, the tape stock is easier to apply, more reflective and longer lasting. It is available in both temporary and permanent grades to meet the customers’ specific requirements.

Other custom products represent a wide range of markets and applications. These include: plastic elevated toilet seats and tub rails for the healthcare market, specialty tapes used for cable splicing in the telecommunications industry, custom rubber linings for material handling conveyors and rubber sheet stock used as the base material to produce the world’s top-selling line of golf grips.

With diverse production capabilities unmatched by any other manufacturer, Myers Industries’ Automotive and Custom Segment brands are positioned to grow in niche markets with value-based plastic and rubber products. Partnerships with key customers who demand such value through engineering, production and finishing operations; shared resources across the segment’s brands; and a strong commitment to productivity gains will continue to allow Myers Industries to position itself for higher and more sustainable levels of profitability in this segment.

Distribution Segment Overview

The Company’s Distribution Segment includes the Myers Tire Supply ® , Myers International ® , and Myers do Brasil tm brands. With these, the Company is the largest U.S. distributor and single source for tire, wheel and undervehicle service tools, equipment and supplies. We buy and sell nearly 10,000 different items — everything that professionals need to service passenger, truck and off-road tires, wheels and related components. Independent tire dealers, mass merchandisers, commercial auto and truck fleets, tire retreaders and general repair facilities rely on our broad product selection, rapid availability and personal service to be more productive and profitably grow their business.

Within the continental United States, we provide widespread distribution and sales coverage from 36 branches positioned in major metropolitan areas. Each branch operates as a profit center and is staffed by a branch manager, sales and warehouse personnel. Internationally, we have three branches in Canada, three in Central America and one in Brazil. Sales personnel from our Akron, Ohio headquarters cover niche markets in the Far East, Middle East, South Pacific and South America.

We purchase products from trusted, industry-leading manufacturers to ensure quality is delivered to our customers. Each of the brand-name products we sell is associated with superior performance in its respective area. Some of these well-known brands include: Chicago Pneumatic air tools; Hennessy tire changing, balancing and alignment equipment; Corghi tire changers and balancers; Ingersoll-Rand air service equipment; John Bean Co. tire balancing and changing equipment; Rotary lifts and related equipment; and our own Patch Rubber brand tire patches, cements and repair supplies.

An essential element of our success in the Distribution Segment is the network field sales representatives, who deliver personalized service on a local level. Customers rely on Myers’ sales representatives to introduce the latest tools and technologies and to provide training in new product features and applications. Representatives also teach the proper use of diagnostic equipment and present on-site workshops demonstrating industry-approved techniques for tire repair and undervehicle service.

While the needs and composition of our distribution markets constantly change, we adapt and deliver the new products and services that are crucial to our customers’ success. The new product pipeline is driven by innovations from auto and tire manufacturers, which in turn prompts Myers and its suppliers to develop new equipment, supplies and service techniques to keep cars and trucks moving down the road with confidence.

The Company’s Distribution Segment is well positioned to continue its steady growth. The Myers Tire Supply (U.S.) brand is positioned to expand its leadership through superior product selection, rapid delivery and the personal service that is the hallmark of the Company’s success in the tire, wheel, and undervehicle service marketplace. The Myers International brand is positioned to expand distribution of both tire supply and our plastic products in select regions of the world, presenting new growth opportunities for our diverse manufacturing businesses. Myers do Brasil will serve as our base of operations to grow the Brazilian tire service market. All of this can be achieved through: 1) ongoing productivity improvements in our distribution network, 2) growing within key domestic market sectors and emerging international markets, 3) delivering a continuous flow of new products with “first-to-market” speed and 4) improving efficiency and customer satisfaction through implementation of innovative supply chain management technologies. Strategic, adjacent acquisitions are also a potential growth avenue in this segment.


CEO BACKGROUND

Keith A. Brown 56 President of Chimera Corporation, Westlake, Ohio, a management holding company; and Director of US Gypsum Corporation (NYSE), Chicago, Illinois, a manufacturer of gypsum paneling products. Served as Director since 1997.

Vincent C. Byrd 53 Senior Vice President, Consumer Market, The J. M. Smucker Company (“J. M. Smucker”) (NYSE), Orrville, Ohio; Director of J. M. Smucker; formerly Vice President and General Manager, Consumer Market, of J. M. Smucker; Director of Spangler Candy Company, Bryan, Ohio, a manufacturer of confectionery products. Served as a director since 2006.

Richard P. Johnston 77 Chairman of the Board of Royal Associates, Inc., Jackson Hole, Wyoming, a holding company which owns Royal Precision Inc. (formerly NASDAQ), a manufacturer of golf club shafts; Director of Results Radio, Inc., Sonoma, California; formerly served as Founder and Director of AGCO, Inc. (NYSE), Duluth, Georgia, a manufacturer and distributor of agricultural equipment. Served as Director since 1992.

Edward W. Kissel 66 President and Managing Partner of Kissel Group Ltd., Akron, Ohio, a holding company with interests in property, consulting and mold manufacturing; Managing Director of Kane & Co., Los Angeles, California, an investment banking firm; Director of Smithers Scientific Services, Inc., Akron, Ohio, a provider of testing services for materials; formerly President, Chief Operating Officer and Director of OM Group, Inc. (NYSE), Cleveland, Ohio, a specialty chemical company; formerly Director of Weda Bay Minerals, Inc. (Toronto Stock Exchange) Toronto, Canada, a mineral exploration company. Served as Director since 2000.

Stephen E. Myers 64 Formerly, Chairman and Chief Executive Officer of the Company; currently Chairman of the Board and Director of the Company; Director of Reko International Group, Inc. (Toronto Stock Exchange), Oldcastle, Ontario, Canada, a manufacturer of tooling and machinery. Served as Director since 1972.

John C. Orr 57 President and Chief Executive Officer of the Company; formerly President and Chief Operating Officer of the Company; formerly General Manager of Buckhorn, Inc., a subsidiary of the Company; formerly Vice President of Manufacturing -- North American Tire Division, The Goodyear Tire and Rubber Company. Served as Director since 2005.

Richard L. Osborne 70 Professor of Management Practice, formerly Executive Dean, Weatherhead School of Management, Case Western Reserve University, Cleveland, Ohio; Director of New Horizons Worldwide, Inc. (NASDAQ), Santa Ana, California, an operator and franchiser of computer training services; Director of AmTrust Financial Corp. ( f/k/a Ohio Savings Financial Corporation), Cleveland, Ohio, a savings and loan holding company; and formerly Director of NCS Healthcare, Inc., Beachwood, Ohio, a provider of pharmacy services to long-term care institutions. Served as Director since 1978.

Jon H. Outcalt 71 Chairman, Federal Process Corp., Cleveland, Ohio, a manufacturer and distributor of industrial products; formerly Chairman of NCS Healthcare, Inc., Beachwood, Ohio, a provider of pharmacy services to long-term care institutions; Chairman and Chief Executive Officer of Aberdeen Group, Inc., Beachwood, Ohio, an investment holding and management company; Director of AmTrust Financial Corp. ( f/k/a Ohio Savings Financial Corporation), Cleveland, Ohio, a savings and loan holding company. Served as Director since 1984.

Robert A. Stefanko 65 Director of OMNOVA Solutions, Inc. (NYSE) an innovator of emulsion polymers, specialty chemicals and decorative and functional surfaces; a member of the Audit Committee of OMNOVA Solutions; Director of The Davey Tree Expert Company, a full service tree and grounds care company; a member of both the Audit and Compensation Committee of Davey Tree; formerly Chairman of the Board and Executive Vice President of Finance & Administration of A. Schulman, Inc., an international supplier of plastic compounds and resins; and formerly with Price Waterhouse. Served as Director since 2007.

Each of the forgoing nominees were recommended by the Corporate Governance and Nominating Committee. There are, and during the past five years there have been, no legal proceedings material to an evaluation of the ability of any director or executive officer of Myers to act in such capacity or concerning his integrity. There are no family relationships among any of the directors and executive officers.

The Board recommends that you vote “FOR” each nominee.

Director Independence. The Board has determined that each of the following directors and nominees are “independent” and that each of these nominees has no material relationship with us which would impact upon their independence: Keith A. Brown, Vincent C. Byrd, Richard P. Johnston, Edward W. Kissel, Richard L. Osborne, Jon H. Outcalt and Robert A. Stefanko. The determination of whether a director is “independent” is based upon the Board’s review of the relationships between each director and the Company, if any, under the Company’s “Board of Directors Independence Criteria” policy adopted by the Board on April 20, 2004 and the corporate governance listing standards of the New York Stock Exchange. In connection with the Board’s determination regarding the independence of each non-management director, the Board considered any transactions, relationships and arrangements as required by our independence guidelines. In particular, the Board considered the relationship between A. Schulman, Inc. (“A. Schulman”) and the Company in connection with its independence determination of Robert A. Stefanko and concluded Mr. Stefanko met the independence requirement. Mr. Stefanko is a stockholder of A. Schulman, holding less than 1% of A. Schulman’s shares of stock. In fiscal 2007, we purchased $704,531.09 of materials from A. Schulman during the ordinary course of operations, which is less than 1% of the annual revenues of both companies. All members of the Audit Committee, the Compensation Committee, and the Corporate Governance and Nominating Committee were determined to be independent as above, and in addition, the Board determined that the members of the Audit Committee are also independent as defined in the SEC regulations.

Committees of the Board. The Board of Directors of Myers has three standing committees, the Audit Committee, the Compensation Committee, and the Corporate Governance and Nominating Committee, whose members were appointed in April 2007 following the Annual Meeting.

Audit Committee. The Audit Committee is currently composed of four independent directors, Keith A. Brown, Chairman and Presiding Director, Robert A. Stefanko, Vincent C. Byrd and Jon H. Outcalt. The functions of this Committee, which met nine times in 2007, are to engage the independent registered public accounting firm, approve all audit and related engagements (audit and non-audit), review the results of the audit and interim reviews, evaluate the independence of the independent registered public accounting firm, review with the independent registered public accounting firm the financial results of the Company prior to their public release and filing of reports with the SEC, direct and supervise special investigations and to oversee our accounting, internal accounting controls and auditing matters, reporting hotline (discussed below) and its corporate compliance program. The Committee also has oversight of our system of internal auditing functions and controls, as well as our internal control procedures.

With the exception of Mr. Stefanko, none of the Audit Committee members serves on more than one other audit committee of another public company.

The Board has identified Vincent C. Byrd as the Audit Committee “financial expert”.

Compensation Committee. The Compensation Committee establishes and administers the Company’s policies, programs and procedures for compensating its executive officers and Board of Directors. The Committee has the authority to retain outside consultants regarding executive compensation and other matters. The Compensation Committee, which met five times in 2007, has as its members three independent directors, Jon H. Outcalt, Chairman and Presiding Director, Edward W. Kissel, and Richard L. Osborne.

Corporate Governance and Nominating Committee. The Corporate Governance and Nominating Committee (“Governance Committee”) is responsible for, among other things, evaluating new director candidates and incumbent directors, and recommending to the independent directors of the Board of Directors, nominees to serve on the Board of Directors as well as members of the Board’s committees. The Committee, which met twice in 2007, has as its member’s three independent directors, Edward W. Kissel, Chairman and Presiding Director, Richard P. Johnston, and Richard L. Osborne. The Governance Committee is also responsible for recommending and monitoring participation in continuing education programs by the members of the Board of Directors.

Committee Charters and Policies. The Board of Directors has adopted written charters for the Audit Committee, the Compensation Committee, and the Corporate Governance and Nominating Committee. Each Committee reviews and evaluates the adequacy of its charter at least annually and recommends any proposed changes to the Board of Directors for approval. Each of the written charters and policies of the Committees of the Board are available on the “Corporate Governance” page accessed from the “Investor Relations” page of the Company’s website at www.myersind.com. Copies are also available upon request to our Corporate Secretary at our address listed herein.

Board Attendance. There were a total of thirteen regularly scheduled and special meetings of the Board of Directors in 2007. During 2007, all directors attended at least 75% of the aggregate total number of the meetings of the Board and Committees on which they served. In 2007, all of our directors attended our Annual Shareholder Meeting. Although we do not have a formal policy requiring directors to attend the Annual Shareholder Meeting, directors are encouraged to attend.

Interested Parties Communications with the Board of Directors. Our Board of Directors provides the following methods for interested parties and shareholders to send communications to a director, a Committee, to the non-management directors, or to the Board:

Written Communication. Interested parties may send such communications by mail or courier delivery addressed as follows: Board of Directors (or Committee Chair, Board Member or Non-Management Directors, as the case requires), c/o Donald A. Merril, Chief Financial Officer, Vice President and Corporate Secretary, Myers Industries, Inc., 1293 South Main Street, Akron, Ohio 44301. All communications directed to the “Board of Directors” or to the “Non-Management Directors,” will be forwarded unopened, to the Chair of the Governance Committee. The Committee Chair in turn determines whether the communications should be forwarded to the appropriate members of the Board and, if so, forwards them accordingly. However, for communications addressed to a particular member of the Board or the Chair of a particular Board Committee, the Chief Financial Officer will forward those communications, unopened, directly to the person or Committee Chair in question.

Toll Free Hotline. In 2003, the Audit Committee established a “hotline” for receiving, retaining and treating complaints from any interested party regarding accounting, internal accounting controls and auditing matters, and procedures for the anonymous submission of these concerns. The hotline is maintained by a company which is independent of the Company. Interested parties may also use this hotline to communicate with the Board. Any interested party may contact a director, a Committee, the non-management directors, or the Board through the toll free hotline at (877) 285-4145. The hotline is available worldwide, 24 hours a day, seven days a week. All reports made through the hotline are directed to the Chair of the Audit Committee and the Corporate Secretary. We do not permit any retaliation of any kind against any person who, in good faith, submits a complaint or concern under these procedures.

Shareholder Nominations of Director Candidates. The Governance Committee will consider individuals for nomination to stand for election as a director who are recommended to it in writing by any shareholder of the Company. A shareholder wishing to recommend an individual as a nominee must follow the procedure outlined below and then send a signed letter of recommendation to the following address: Corporate Governance and Nominating Committee, c/o Mr. Donald A. Merril, Chief Financial Officer, Vice President and Corporate Secretary, Myers Industries, Inc., 1293 South Main Street, Akron, Ohio 44301.

Recommendation letters must certify that the person making the recommendation is a shareholder of the Company (including the number of shares held as of the date of the recommendation), and further state the reasons for the recommendation, the full name and address of the proposed nominee as well as a biographical history setting forth past and present directorships, employment, occupations and civic activities for at least the past five years. Any such recommendation should be accompanied by a signed written statement from the proposed nominee consenting to be named as a candidate and, if nominated and elected, consenting to serve as a director. The letter must also include a signed written statement that the nominating shareholder and the candidate will make available to the Committee all information reasonably requested in furtherance of the Committee’s evaluation. The letter must be received before the close of business on or before November 20th of the year prior to the next annual meeting.

For this meeting, there were no nominees recommended by a shareholder nor was a third party engaged to assist in the process of identifying or evaluating nominees for the Board of Directors.

Corporate Governance Policies

Implementation. The Board of Directors has implemented the corporate governance initiatives required by the NYSE rules and the Sarbanes-Oxley Act of 2002. These include, among others, “Corporate Governance Guidelines,” a “Code of Business Conduct and Ethics” for the Company’s directors, officers and employees, as well as a “Code of Ethical Conduct for the Finance Officers and Finance Department Personnel.” These Corporate Governance policies and procedures are discussed in various places within this Proxy Statement.

Availability of Policies. Each of our policies are available on the “Corporate Governance” page accessed from the “Investor Relations” page of our website at www.myersind.com. Copies of the policies are also available upon request of our Corporate Secretary.

Code of Ethics. We have a Code of Business Conduct and Ethics and Code of Ethical Conduct for the Finance Officers and Finance Department Personnel, which embodies our commitment to ethical and legal business practices, as well as satisfies the NYSE requirements to implement and maintain such a policy. The Board expects all of our officers, directors and other members of our workforce to act ethically at all times. Both of these policies are available on our website www.myersind.com on the “Corporate Governance” page accessed from the “Investor Relations” page.

Executive Sessions of the Board. Effective in December 2002, the Board adopted a policy requiring the non-management directors, both as to the Board and in their respective Committees, to meet regularly in executive session without any management personnel or employee directors present. During 2007, the Board of Directors and each Committee met regularly in executive session as follows: Board of Directors, five times; Audit Committee, nine times; Compensation Committee, five times; and the Governance Committee, twice.

Presiding Directors. The non-management directors reported that in 2007 they selected Presiding Directors to preside during executive sessions. The Chair of the Governance Committee acts as the Presiding Director for the executive sessions of the Board, and the Chair of each Committee was selected as the Presiding Director for the executive sessions of the applicable Committee.

Anonymous Reporting. The Audit Committee maintains procedures, including a worldwide telephone “hotline,” which allows employees and interested parties to report any financial or other concerns anonymously as further detailed under “Interested Parties Communications with the Board of Directors,” above.

Annual Board and Committee Self-Assessments. In 2004, the Board of Directors, through the Governance Committee, instituted annual self-assessments of the Board of Directors, as well as the Audit Committee, the Compensation Committee, and the Corporate Governance and Nominating Committee, to assist in determining whether the Board of Directors and its Committees are functioning effectively. In December 2007, the Board and each of its Committees conducted the most recent self-evaluations and discussed the results at subsequent meetings.

NYSE and SEC Certifications. We submitted to the NYSE in 2007, an unqualified Section 12(a) certification by our Chief Executive Officer. Further, each applicable filing with the SEC contained the Section 302 and 906 Certifications of our Chief Executive Officer and Chief Financial Officer.

Director Compensation. The annual retainer for non-employee directors is $25,000, except for the Audit Committee chair, who receives an annual retainer of $30,000. In addition, directors receive a meeting fee of $1,500 for each scheduled board, committee or board dinner meeting which they attend, except that committee chairs receive $2,000 for each meeting of their committee. Directors who are not appointed members of a committee, are paid a meeting fee if they attend the committee meeting at the request of the chair of the committee. Directors are reimbursed for their reasonable out of pocket expenses related to attending board and committee meetings.

Directors who are employees of the Company do not receive either the annual retainer or the meeting fees.

Under our Amended and Restated 1999 Incentive Stock Plan, that commenced in April 2007 each non-employee director who held such position on the day before the annual shareholder meeting is awarded annually, on the day of the meeting, a restricted stock award of 1,000 shares of Common Stock. Each restricted stock award will vest in equal amounts over a four year period. Prior to the amendment each non-employee director who held such position on the day before the annual shareholder meeting was awarded annually, on the same day of the meeting, a non-qualified stock option to purchase 2,500 shares of our Common Stock. The option price per share is 100% of the fair market value (being the closing price on the NYSE on the day of grant) of a share of Common Stock.

Our Code of Regulations provides that we will indemnify, to the fullest extent then permitted by law, any of our directors or former directors who was or is a party or is threatened to be made a party to any matter, whether civil or criminal, by reason of the fact that the individual is or was a director of the Company, or serving at our request as a director of another entity. We have entered into indemnity agreements with each of our directors contractually obligating us to provide such protection. We also currently have in effect director and officer insurance coverage.

The following table shows the compensation paid to each of the non-employee directors during fiscal 2007. Mr. Orr, who is our President and Chief Executive Officer, does not receive any additional compensation for services as a director.

MANAGEMENT DISCUSSION FROM LATEST 10K

Executive Overview

The Company conducts its business activities in four distinct business segments, including three in manufacturing and one in distribution. The manufacturing segments consist of: North American Material Handling, Lawn and Garden, and Automotive and Custom.

In our manufacturing segments, the Company designs, manufactures, and markets a variety of plastic and rubber products. These products range from plastic reusable material handling containers and small parts storage bins to plastic horticultural pots and hanging baskets, decorative resin planters, plastic and rubber OEM parts, tire repair materials, and custom plastic and rubber products. The Distribution Segment is engaged in the distribution of tools, equipment and supplies used for tire, wheel and undervehicle service on passenger, heavy truck and off-road vehicles.

Within the Company’s four business segments and their respective brands, management is focusing on a variety of growth catalysts. These range from ongoing new product development; implementation of new technology platforms to speed workflow and improve customer satisfaction; consolidation and synergy initiatives across segments and brands to reduce costs and improve productivity; and strategic, bolt-on acquisitions with strong potential to boost the Company’s brand strength and leadership in its chosen niche markets.

Results of Operations: 2007 versus 2006

Net Sales from Continuing Operations:

Net sales for 2007 were $918.8 million, an increase of 18% from the $780.0 million reported in 2006. Current year sales includes approximately $151.0 million from the acquisition of ITML Horticultural Products (ITML), which was completed in January 2007, and $28 million from the acquisition of material handling products from Schoeller Arca Systems, Inc. North America (SASNA) which was completed in March 2007.

The net sales increase in the Lawn & Garden segment was primarily driven by the contributions from ITML. Sales performance in this segment was adversely affected by unfavorable weather conditions, weakness in the housing market as well as ongoing shifts in the timing of purchases for the grower markets in reaction to adjustments to retail merchandising programs. In the Material Handling segment sales increased $27.1 million, an increase of 11% as compared to 2006. The increase reflects additional sales of bulk container systems from the SASNA asset purchase as well as strong demand in many of the segment’s niche markets, including agriculture and reusable container systems.

Net sales in the Distribution segment increased $5.9 million or 3% compared to 2006. Sales performance improved despite softness in tire service and retread markets, due to escalating fuel prices; and the downturn in housing construction, which impacts repair demand for heavy equipment tires. In the Auto & Custom segment, net sales in 2007 were down $33.8 million, a decrease of 17% as compared to 2006. Sales performance was impacted by weakness in the automotive and heavy truck markets and the downturn in housing construction.

Cost of Sales & Gross Profit from Continuing Operations:

Cost of sales increased to $683.1 million in 2007 from $572.4 million in 2006, while gross profit increased to $235.7 million in 2007 compared to $207.5 million in 2006. These increases resulted from increased sales and reflect the impact of acquisitions made in 2007. Gross profit as a percentage of sales declined to 25.7% in 2007 from 26.6% in 2006. The decline in gross profit margin was primarily the result of restructuring expenses from closing several manufacturing facilities combined with the impact of purchase accounting adjustments related to acquisitions aggregating approximately $8 million.

Selling, General and Administrative (“SG&A”) Expenses from Continuing Operations:

Selling and administrative expenses for 2007 increased $43.3 million or 30% compared with 2006. The largest portion of this increase was due to the acquisition of ITML, which represented $31.8 million of the increase, including foreign currency transaction losses of $4.7 million resulting from increased strength of Canadian currency as compared to the U.S. dollar. In addition, the Company incurred expenses of approximately $4.7 million in connection with its proposed merger transaction with GS Capital Partners (GSCP).

Interest Expense from Continuing Operations:

Net interest expense was $15.5 million for 2007, a slight decrease compared to $15.8 million in 2006. The decrease reflects a combination of lower interest rates and lower average borrowing levels.

Income Before Taxes from Continuing Operations:

Income before taxes was $57.1 million in 2007, an increase of 27% compared with the $45.1 million reported in 2006. Items impacting current year income included non-operational income of $26.8 million ($35 million termination fee, net of related expenses) from GSCP related to the Company’s proposed merger transaction. In addition, current year income includes merger related expenses of $4.7 million as well as restructuring and severance costs and purchase accounting adjustments aggregating approximately $9.5 million.

Income before taxes in the Lawn and Garden segment declined from $8.1 million in 2006 to $0.9 million in 2007. The key factors affecting profitability in this segment included restructuring and purchase accounting adjustments totaling $4.8 million and foreign currency transaction losses of $4.7 million. Income before taxes in the Material Handling segment increased 15% from $34.9 million in 2006 to $40.4 million in 2007. Increased sales, favorable product mix and productivity gains more than offset the impact of restructuring and severance expenses of $4.0 million, related to plant consolidation.

Income before taxes in the Distribution segment was $20.5 million for 2007, a decrease of 8% as compared to $22.2 million in 2006. The key factors influencing profitability in the Distribution segment in 2007 were unfavorable product mix in the second half of the year and increased operating expenses associated with productivity initiatives and strategic investments in personnel and technology for long term growth. Income before taxes in the Auto & Custom segment was $9.0 million in 2007, a decrease of 36% as compared to $14.0 million in 2006. Profitability in 2007 was adversely impacted by strategic initiatives to discontinue unprofitable businesses, which reduced sales volumes and lowered capacity utilization as well as restructuring expenses of $0.7 million, primarily for headcount reductions.

Income Taxes from Continuing Operations:

Our income tax rate as a percentage of pretax income from continuing operations for 2007 decreased from 36.3% to 35.2% as a result of the benefit from foreign tax rate differences and a higher domestic production deduction.

2006 compared to 2005

Net Sales from Continuing Operations:

Our 2006 net sales were $780.0 million, an increase of 6% from the $736.9 million reported in 2005 as we had strong sales in most of our operating segments. During 2006, we experienced increased sales in our Material Handling, Distribution and Auto & Custom segments. Net sales for the Material Handling segment increased $30.6 million, or 15%, from $209.5 million in 2005 to $240.1 million in 2006; net sales in the Distribution segment increased $7.4 million, or 4%, from $190.0 million in 2005 to $197.3 million in 2006; Auto & Custom segment net sales increased $9.5 million, or 5%, from $195.1 million in 2005 to $204.7 million in 2006. The net sales increases represent a combination of increased volume and price increases that took effect in the second half of 2005.

The increases in net sales referred to above were partially offset by declining net sales in the Lawn & Garden segment. Net sales in this segment decreased $10.3 million to $160.2 million, representing a 6% decrease from 2005. The reduction in net sales was primarily volume driven as weather conditions in the South and Midwest regions resulted in low demand from growers for certain product lines throughout the first half of 2006. In the second half of 2006, sales volume continued to slow as major retailers changed the timing of their spring garden programs which delayed forecasting, and buying patterns of growers pushed some sales into 2007.

Cost of Sales & Gross Profit from Continuing Operations:

Cost of sales increased $16.8 million in 2006 to $572.4 million while gross profit increased from $181.2 million in 2005 to $207.6 million in 2006. These increases were primarily the result of the $43.1 million increase in sales from 2005. Gross profit percentage increased 2% in 2006 to 27%, compared to 25% in 2005. Increased selling prices, improved product mix and higher volumes resulted in higher gross profit percentages in 2006. This was despite the fact that we experienced higher raw material costs in 2006, particularly for plastic resins. For the year, we estimate that average prices for raw material plastic resins were approximately 3% higher in 2006 compared to 2005.

SG&A Expenses from Continuing Operations:

In 2006, SG&A expenses were $146.6 million, an increase of $13.2 million compared to 2005. As a percentage of sales, SG&A expenses increased to 19% compared to 18% in 2005. The increase was primarily related to the impact of additional freight and variable selling expenses associated with the increase in sales volume. Additionally, we incurred additional costs in 2006 associated with streamlining our organizational structure.

Interest Expense from Continuing Operations:

Net interest expense for 2006 was $15.8 million, an increase of 2% compared to $15.5 million in 2005. The increase in net interest expense for 2006 was related to higher interest rates which offset the impact of lower average borrowing levels.

Income Before Taxes from Continuing Operations:

Income before taxes was $45.1 million in 2006 compared to $32.3 million in 2005 for an increase of 40%. We experienced increased income before tax in our Material Handling, Distribution and Auto & Custom segments. In the Material Handling segment, income before income taxes increased from $16.3 million in 2005 to $34.9 million in 2006. The primary factors influencing this increase were a pricing strategy to help offset raw material price increases, mix management, which focused on providing customers with value-based material handling product solutions to improve their business, internal productivity initiatives and cost controls. Income before taxes for the Distribution segment in 2006 increased to $22.2 million or 8% from 2005. The primary reasons for the increase in the Distribution segment were an improvement in product mix, the implementation of additional cost controls and increased market penetration through tire dealers, auto dealers and other tire service niches. Income before taxes for the Auto & Custom segment increased to $14.0 million, representing an increase of 41%. The improvement realized in this segment was related to a strong focus on customers’ needs for value-added engineered products, mix management, continued pricing improvements, cost controls and productivity gains.

The above mentioned increases were partially offset by a decrease in the Lawn & Garden segment. Income before taxes in this segment decreased 51% from $16.4 million in 2005 to $8.1 million in 2006. This decrease was primarily related to the fact that the slowness in recovery of unit volumes to the grower market could not be fully offset by favorable product pricing and robust decorative planter sales to retail markets.

Income Taxes from Continuing Operations:

Income tax expense increased from $12.9 million in 2005 to $16.4 million in 2006. However, income taxes as a percentage of income before taxes for 2006 decreased to 36.3% compared to 40% in 2005. The lower effective rate in 2006 was the result of reduced state tax expense and the impact of additional income tax expense in 2005 related to repatriation of $4.4 million in dividends from foreign subsidiaries pursuant to the American Jobs Creation Act of 2004.

Discontinued Operations: European Material Handling

In the third quarter of 2006, our Board of Directors approved the plan of divestiture of our European Material Handling business, which was ultimately divested in February 2007. In accordance with U.S. GAAP, the operating results related to these businesses have been included in discontinued operations in our consolidated statements of income for all periods presented.

During the second quarter of 2006, we determined that the Material Handling — Europe businesses were not core to our long term growth strategy and, accordingly, began evaluating strategic options for these businesses. Taking into consideration the economic factors and business conditions in Europe it became necessary to perform an interim goodwill impairment test in accordance with Statement of Accounting Standards No. 142, ”Goodwill and Other Intangible Assets.” In performing this analysis, the fair value of the reporting unit was based on estimated proceeds from a potential sale and the implied fair value of goodwill was estimated by deducting the fair value of all tangible and intangible net assets of the reporting unit from the fair value. As a result of this analysis, all of the recorded goodwill of the reporting unit was determined to be impaired and, accordingly, we recorded a $109.8 million impairment charge in the second quarter of 2006.

Financial Condition

Liquidity and Capital Resources

Cash provided from operating activities of continuing operations was $99.1 million for the year ended December 31, 2007 compared with $67.7 million in the prior year. The increase of $31.4 million in cash provided by operating activities was primarily the result of $41.1 million increase in cash provided by working capital. Income from continuing operations of $10.2 million (excluding discontinued operations and non operating income) decreased $18.5 million from the prior year. In addition, depreciation, amortization and other non cash expenses were $37.5 million in the current year, an increase of $8.8 million compared with $28.7 million in 2006. Cash provided by working capital was $51.4 million in 2007 compared to $10.3 million in the prior year. The increase in cash provided by working capital resulted from specific initiatives which successfully reduced accounts receivable and inventories by $21.4 million and $13.1 million, respectively. In addition, accounts payable and accrued liabilities provided working capital of $16.5 million.

During 2007, cash increased approximately $68.1 million from net proceeds from the sale of discontinued operations and cash of approximately $95.7 million was used for the acquisition of businesses. Capital expenditures for the year ended December 31, 2007 were $19.8 million and are expected to be in the range of $15 to $25 million for the next 5 years.

Total debt at December 31, 2007 was $170.9 million, a reduction of $30.6 million from $201.5 million at December 31, 2006. At December 31, 2007, the Company had reduced working capital to $119.3 million, with a current ratio of 1.7 compared with working capital of $172.8 and current ratio of 2.3 at December 31, 2006. The Company’s Credit Agreement provides available borrowing up to $250 million and has a five year term which expires October 26, 2011. The Company is in compliance with all of the covenants of the Credit Agreement at December 31, 2007 and had approximately $189 million available under this agreement. Cash flow from operations and funds available under the Credit Agreement will provide the Company’s primary sources of future financing. Management believes that cash flows from operations and available credit facilities will be sufficient to meet expected business requirements including capital expenditures, dividends, working capital and debt service.


MANAGEMENT DISCUSSION FOR LATEST QUARTER

Results of Operations
Comparison of the Third Quarter of 2008 to the Third Quarter of 2007

Net Sales:

Net sales for the quarter ended September 30, 2008 were $214.0 million, virtually flat compared with the third quarter of 2007. Sales in the third quarter of 2008 were adversely affected by economic weakness in the Company’s markets and the impact of problems in the financial markets. In general, selling price increases, primarily implemented to recover higher raw material costs, have been offset by lower unit volumes.
Net sales in the Lawn and Garden segment for the quarter ended September 30, 2008 increased $1.6 million or 3% compared with the third quarter of 2007. The increased sales reflects higher selling prices to recover raw material price increases. In the Material Handling segment, sales declined $0.5 million in the third quarter of 2008, a decrease of 1% as compared to the same period in 2007. The slight decrease in net sales reflects the benefit of approximately $2.6 million from higher selling prices which was largely offset by volume declines in automotive, industrial and other end markets as customers limited spending due to continuing weak economic conditions and turmoil in the financial markets.
Net sales in the Distribution segment decreased $3.5 million or 7% in the third quarter of 2008 compared to the prior year. The decrease in net sales was primarily due to lower unit volumes for consumable supplies due to reduced sales of passenger and truck tires and the impact of higher fuel prices and a weak economy on miles driven and freight transport. In the Auto and Custom segment, net sales for the third quarter of 2008 increased $3.1 million, or 7% compared to the prior year, as higher selling prices increased net sales approximately $1.3 million and gains in niche custom molding markets offset volume declines in automotive and heavy truck markets.

Cost of Sales & Gross Profit:

Gross profit in the third quarter of 2008 was $48.1 million, a decrease of 7% compared with the $51.8 million reported in the prior year. Gross profit margin declined to 22.5% in the quarter ended September 30, 2008 compared with 24.2% in the prior year. The decline in gross profit and margin was due to significantly higher raw material costs, particularly for plastic resins used in the Company’s manufacturing operations, and lower volumes increased the level of unabsorbed manufacturing costs. Prices for high-density polyethylene and polypropylene resins were, on average, more than 30% higher in the third quarter of 2008 compared to the third quarter of 2007.

Selling, General and Administrative (“SG&A”) Expenses from Continuing Operations:

Selling and administrative expenses for the quarter ended September 30, 2008 were $42.8 million, a decrease of $2.6 million or 6% compared with the prior year. The decrease in operating expenses reflects the ongoing impact of cost control initiatives. Operating expenses in the third quarter of 2008 include unusual charges of approximately $2.6 million, primarily related to consulting and other expenses incurred in connection with the Company’s ongoing strategic initiative to identify potential productivity and profitability improvement in the Lawn and Garden segment. Operating expenses in the third quarter of 2007 included approximately $2.7 million of unusual charges, including: restructuring expenses, costs related to the Company’s proposed merger transaction and foreign currency transaction losses.

Interest Expense from Continuing Operations:

Net interest expense was $2.7 million for quarter ended September 30, 2008 a decrease of 31% compared to $3.9 million in the prior year. The decrease was the result of a reduction in average borrowing levels and lower interest rates in the current quarter.

Income Before Taxes from Continuing Operations :

Income before taxes from continuing operations was $2.5 million in the third quarter of 2008 and 2007. Key factors affecting 2008 income include lower sales volumes due to softness in the economy and lower gross profit margins. Higher selling prices increased income before taxes in the third quarter of 2008 by approximately $11.6 million, however, this improvement was offset by lower volume which reduced sales by approximately $2.1 million and absorption of manufacturing overhead by $5.8 million. In addition, significantly higher raw material costs in the Company’s manufacturing segments reduced income approximately $7.3 million.
In the Lawn and Garden segment, the Company reported a loss before taxes of $1.7 million in the third quarter of 2008 compared with $4.7 million in the prior year. The improvement in operating results for the current quarter is based on favorable product pricing, sales mix and expense controls which offset the negative impact of higher raw material costs. In addition, the third quarter of 2007 was negatively impacted by $2.7 million of charges for foreign currency transaction losses, restructuring and purchase accounting adjustments. Income before taxes in the Material Handling segment was down 25% from $9.2 million in the third quarter of 2007 to $7.0 million in 2008. The key factors reducing Material Handling profitability for the third quarter of 2008 were lower sales volume and significantly higher raw material costs which offset the impact of approximately $0.9 million in restructuring and other unusual charges in the third quarter of 2007.

Income before taxes in the Distribution segment was $5.3 million for third quarter of 2008, a decrease of 8% as compared to the $5.7 million reported in the third quarter of 2007. Profitability in the third quarter of 2008 was negatively impacted by unfavorable business conditions across the segment’s end markets resulting in lower unit volumes for both service supplies and equipment. Income before taxes in the Auto and Custom segment was $1.4 million in the third quarter of 2008, a decrease of 24% as compared to the $1.9 million reported in the third quarter of 2007. Higher prices for rubber and plastic raw materials and reduced unit volumes were the primary factors reducing profitability for this segment in the third quarter of 2008.

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