MYERS INDUSTRIES INC, 10-K filed on 3/31/2015
Annual Report
Document and Entity Information (USD $)
12 Months Ended
Dec. 31, 2014
Mar. 26, 2015
Jun. 30, 2014
Document and Entity Information [Abstract]
 
 
 
Entity Registrant Name
MYERS INDUSTRIES INC 
 
 
Entity Central Index Key
0000069488 
 
 
Document Type
10-K 
 
 
Document Period End Date
Dec. 31, 2014 
 
 
Amendment Flag
false 
 
 
Document Fiscal Year Focus
2014 
 
 
Document Fiscal Period Focus
FY 
 
 
Current Fiscal Year End Date
--12-31 
 
 
Entity Well-known Seasoned Issuer
No 
 
 
Entity Voluntary Filers
No 
 
 
Entity Current Reporting Status
Yes 
 
 
Entity Filer Category
Accelerated Filer 
 
 
Entity Public Float
 
 
$ 598,535,243 
Entity Common Stock, Shares Outstanding
 
30,945,498 
 
Consolidated Statements of Income (Loss) (USD $)
In Thousands, except Per Share data, unless otherwise specified
12 Months Ended
Dec. 31, 2014
Dec. 31, 2013
Dec. 31, 2012
Income Statement [Abstract]
 
 
 
Net sales
$ 623,649 
$ 584,733 
$ 545,572 
Cost of sales
462,370 
415,179 
381,673 
Gross profit
161,279 
169,554 
163,899 
Selling expenses
60,261 
55,398 
51,227 
General and administrative expenses
78,400 
69,840 
66,146 
Operating Expenses
138,661 
125,238 
117,373 
Operating income
22,618 
44,316 
46,526 
Interest
 
 
 
Income
(127)
(213)
(164)
Expense
8,662 
4,744 
4,494 
Interest expense-net
8,535 
4,531 
4,330 
Income from continuing operations before income taxes
14,083 
39,785 
42,196 
Income tax expense
5,122 
13,343 
15,689 
Income (Loss) from Continuing Operations Attributable to Parent
8,961 
26,442 
26,507 
Income (loss) from discontinued operations
(17,642)
(440)
3,455 
Net income (loss)
$ (8,681)
$ 26,002 
$ 29,962 
Income per common share from continuing operations:
 
 
 
Basic (in dollars per share)
$ 0.28 
$ 0.78 
$ 0.79 
Diluted (in dollars per share)
$ 0.27 
$ 0.77 
$ 0.78 
Income (loss) per common share from discontinued operations:
 
 
 
Basic (in dollars per share)
$ (0.55)
$ (0.01)
$ 0.10 
Diluted (in dollars per share)
$ (0.54)
$ (0.01)
$ 0.10 
Net income (loss) per share:
 
 
 
Basic (in dollars per share)
$ (0.27)
$ 0.77 
$ 0.89 
Diluted (in dollars per share)
$ (0.27)
$ 0.76 
$ 0.88 
Dividends declared per share (in dollars per share)
$ 0.52 
$ 0.36 
$ 0.32 
Consolidated Statements of Comprehensive Income (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2014
Dec. 31, 2013
Dec. 31, 2012
Statement of Comprehensive Income [Abstract]
 
 
 
Net income
$ (8,681)
$ 26,002 
$ 29,962 
Other comprehensive income (loss), net of tax:
 
 
 
Foreign currency translation adjustment
(13,318)
(9,292)
2,791 
Pension liability, net of tax (benefit) expense of ($448) in 2014, $605 in 2013 and $80 in 2012
(797)
1,076 
558 
Total other comprehensive income (loss), net of tax
(14,115)
(8,216)
3,349 
Comprehensive income (loss)
$ (22,796)
$ 17,786 
$ 33,311 
Consolidated Statements of Comprehensive Income (Parenthetical) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2014
Dec. 31, 2013
Dec. 31, 2012
Statement of Comprehensive Income [Abstract]
 
 
 
Tax on pension liability
$ (448)
$ 605 
$ 80 
Consolidated Statements of Financial Position (USD $)
In Thousands, unless otherwise specified
Dec. 31, 2014
Dec. 31, 2013
Current Assets
 
 
Cash
$ 4,676 
$ 6,539 
Accounts receivable-less allowances of $782 and $1,313, respectively
90,664 
74,932 
Inventories
 
 
Finished and in-process products
40,122 
34,337 
Raw materials and supplies
23,216 
18,786 
Inventory net
63,338 
53,123 
Prepaid expenses
6,591 
5,492 
Deferred income taxes
2,397 
2,064 
Assets held for sale - current
117,775 
92,760 
Total Current Assets
285,441 
234,910 
Other Assets
 
 
Goodwill
66,639 
51,075 
Patents and other intangible assets, net
72,235 
14,255 
Assets held for sale
67,808 
Other
3,752 
2,959 
Total other non current assets
142,626 
136,097 
Property, Plant and Equipment, at Cost
 
 
Land
8,405 
3,082 
Buildings and leasehold improvements
57,537 
48,159 
Machinery and equipment
335,963 
294,537 
Property, Plant and Equipment, at cost
401,905 
345,778 
Less allowances for depreciation and amortization
(265,139)
(247,328)
Property, plant and equipment, net
136,766 
98,450 
Total Assets
564,833 
469,457 
Current Liabilities
 
 
Accounts payable
77,320 
68,897 
Accrued expenses
 
 
Employee compensation
14,967 
17,413 
Income taxes
3,086 
5,519 
Taxes, other than income taxes
1,940 
2,173 
Accrued interest
3,207 
103 
Liabilities held for sale
27,122 
40,044 
Other
26,172 
16,434 
Total Current Liabilities
153,814 
150,583 
Long-term debt
236,429 
44,347 
Liabilities held for sale
7,825 
Other liabilities
13,738 
14,687 
Deferred income taxes
14,281 
16,508 
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 31,162,962 and 33,572,778; net of treasury shares of 6,604,175 and 4,203,179, respectively)
18,855 
20,313 
Additional paid-in capital
218,394 
266,276 
Accumulated other comprehensive income (loss)
(11,688)
2,427 
Retained deficit
(78,990)
(53,509)
Total Shareholders’ Equity
146,571 
235,507 
Total Liabilities and Shareholders’ Equity
$ 564,833 
$ 469,457 
Consolidated Statements of Financial Position (Parenthetical) (USD $)
In Thousands, except Share data, unless otherwise specified
Dec. 31, 2014
Dec. 31, 2013
Statement of Financial Position [Abstract]
 
 
Allowances for accounts receivable
$ 782 
$ 1,313 
Preferred Shares, shares authorized (in shares)
1,000,000 
1,000,000 
Preferred Shares, shares issued (in shares)
Preferred Shares, shares outstanding (in shares)
Common Shares, shares authorized (in shares)
60,000,000 
60,000,000 
Common Shares, shares outstanding (in shares)
31,162,962 
33,572,778 
Common shares, treasury (in shares)
6,604,175 
4,203,179 
Consolidated Statement of Shareholders' Equity (USD $)
In Thousands, except Share data, unless otherwise specified
Total
Common Stock [Member]
Additional Paid-In Capital [Member]
Accumulative Other Comprehensive Income (Loss) [Member]
Retained Income (Deficit) [Member]
Balance at Dec. 31, 2011
$ 206,140 
$ 20,312 
$ 265,000 
$ 7,294 
$ (86,466)
Balance, shares at Dec. 31, 2011
 
33,420,488 
 
 
 
Stockholders' Equity [Roll Forward]
 
 
 
 
 
Net income
29,962 
 
 
 
29,962 
Sales under option plans, shares
288,794 
278,659 
 
 
 
Sales under option plans
3,015 
145 
2,870 
 
 
Dividend reinvestment plan, shares
 
7,112 
 
 
 
Dividend reinvestment plan
107 
102 
 
 
Restricted stock vested, shares
 
40,500 
 
 
 
Restricted stock award
24 
(24)
 
 
Restricted stock and stock option grants, net (shares)
 
11,484 
 
 
 
Restricted stock and stock option grants, net
2,708 
 
2,708 
 
 
Tax benefit from options
253 
 
253 
 
 
Foreign currency translation adjustment
2,791 
 
 
2,791 
 
Purchase for treasury, shares
 
(281,797)
 
 
 
Purchases for treasury
(4,204)
(172)
(4,032)
 
 
Stock contribution, shares
 
3,743 
 
 
 
Stock contribution
50 
48 
 
 
Declared dividends
(10,852)
 
 
 
(10,852)
Pension liability, net of tax
558 
 
 
558 
 
Balance at Dec. 31, 2012
230,022 
20,316 
266,419 
10,643 
(67,356)
Balance, shares at Dec. 31, 2012
 
33,480,189 
 
 
 
Stockholders' Equity [Roll Forward]
 
 
 
 
 
Net income
26,002 
 
 
 
26,002 
Sales under option plans, shares
503,321 
503,321 
 
 
 
Sales under option plans
5,693 
299 
5,394 
 
 
Dividend reinvestment plan, shares
 
7,390 
 
 
 
Dividend reinvestment plan
113 
109 
 
 
Restricted stock vested, shares
 
112,000 
 
 
 
Restricted stock award
 
 
Restricted stock and stock option grants, net (shares)
 
33,152 
 
 
 
Restricted stock and stock option grants, net
2,237 
 
2,237 
 
 
Tax benefit from options
389 
 
389 
 
 
Foreign currency translation adjustment
(9,292)
 
 
(9,292)
 
Purchase for treasury, shares
 
(530,983)
 
 
 
Purchases for treasury
(8,096)
(314)
(7,782)
 
 
Stock contribution, shares
 
12,682 
 
 
 
Stock contribution
202 
194 
 
 
Shares withheld for employee taxes on equity awards, shares
 
(44,973)
 
 
 
Shares withheld for employee taxes on equity awards
(684)
 
(684)
 
 
Declared dividends
(12,155)
 
 
 
(12,155)
Pension liability, net of tax
1,076 
 
 
1,076 
 
Balance at Dec. 31, 2013
235,507 
20,313 
266,276 
2,427 
(53,509)
Balance, shares at Dec. 31, 2013
 
33,572,778 
 
 
 
Stockholders' Equity [Roll Forward]
 
 
 
 
 
Net income
(8,681)
 
 
 
(8,681)
Sales under option plans, shares
228,064 
227,664 
 
 
 
Sales under option plans
2,792 
138 
2,654 
 
 
Dividend reinvestment plan, shares
 
7,159 
 
 
 
Dividend reinvestment plan
134 
130 
 
 
Restricted stock vested, shares
 
123,829 
 
 
 
Restricted stock award
75 
(75)
 
 
Restricted stock and stock option grants, net (shares)
 
15,055 
 
 
 
Restricted stock and stock option grants, net
2,835 
10 
2,825 
 
 
Tax benefit from options
679 
 
679 
 
 
Foreign currency translation adjustment
(13,318)
 
 
(13,318)
 
Purchase for treasury, shares
 
(2,742,506)
 
 
 
Purchases for treasury
(54,897)
(1,660)
(53,237)
 
 
Stock contribution, shares
 
9,376 
 
 
 
Stock contribution
200 
194 
 
 
Shares withheld for employee taxes on equity awards, shares
 
(50,393)
 
 
 
Shares withheld for employee taxes on equity awards
(1,083)
(31)
(1,052)
 
 
Declared dividends
(16,800)
 
 
 
(16,800)
Pension liability, net of tax
(797)
 
 
(797)
 
Balance at Dec. 31, 2014
$ 146,571 
$ 18,855 
$ 218,394 
$ (11,688)
$ (78,990)
Balance, shares at Dec. 31, 2014
 
31,162,962 
 
 
 
Consolidated Statement of Shareholders' Equity (Unaudited) (Parenthetical) (USD $)
In Thousands, except Per Share data, unless otherwise specified
12 Months Ended
Dec. 31, 2014
Dec. 31, 2013
Dec. 31, 2012
Tax on pension liability
$ (448)
$ 605 
$ 80 
Dividends declared per share (in dollars per share)
$ 0.52 
$ 0.36 
$ 0.32 
Accumulative Other Comprehensive Income (Loss) [Member]
 
 
 
Tax on pension liability
$ (448)
$ 605 
$ 80 
Retained Income (Deficit) [Member]
 
 
 
Dividends declared per share (in dollars per share)
$ 0.52 
$ 0.36 
$ 0.32 
Consolidated Statements of Cash Flows (Unaudited) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2014
Dec. 31, 2013
Dec. 31, 2012
Cash Flows From Operating Activities
 
 
 
Net income (loss)
$ (8,681)
$ 26,002 
$ 29,962 
Income (loss) from discontinued operations
(17,642)
(440)
3,455 
Income (Loss) from Continuing Operations Attributable to Parent
8,961 
26,442 
26,507 
Items not affecting use of cash
 
 
 
Depreciation
24,173 
20,386 
17,050 
Amortization
6,999 
3,142 
2,426 
Non-cash stock compensation
3,115 
2,557 
2,708 
Provision for (recovery of) loss on accounts receivable
406 
457 
(836)
Deferred taxes
(2,665)
(2,729)
603 
Other long-term liabilities
341 
(978)
3,939 
Loss (gain) from asset disposition
(44)
598 
(1,139)
Tax benefit from options
(679)
(390)
Cancellations and terminations of share grants
253 
Other
200 
202 
(113)
Payments on performance based compensation
(1,293)
(1,719)
(333)
Cash flows provided by (used for) working capital, net of acquisitions:
 
 
 
Accounts receivable
2,710 
(1,964)
(3,820)
Inventories
2,377 
3,011 
(6,373)
Prepaid expenses
(966)
(840)
(798)
Accounts payable and accrued expenses
8,122 
26,758 
3,772 
Net cash provided by operating activities - continuing operations
51,757 
74,933 
43,846 
Net cash provided by (used for) operating activities - discontinued operations
(13,062)
21,135 
16,906 
Net cash provided by operating activities
38,695 
96,068 
60,752 
Cash Flows From Investing Activities
 
 
 
Capital expenditures
(24,170)
(20,709)
(19,861)
Acquisition of business, net of cash acquired
(156,620)
(600)
(18,543)
Proceeds from sale of property, plant and equipment
566 
3,086 
Other
(273)
(50)
Net cash used for investing activities - continuing operations
(180,224)
(21,582)
(35,368)
Net cash provided by (used for) investing activities - discontinued operations
11,626 
(8,359)
(7,116)
Net cash used for investing activities
(168,598)
(29,941)
(42,484)
Cash Flows From Financing Activities
 
 
 
Proceeds from long-term debt
89,000 
11,000 
Repayment of long-term debt
(32,683)
Net borrowing (repayments) on credit facility
106,493 
(24,492)
(5,581)
Cash dividends paid
(15,707)
(9,103)
(13,006)
Proceeds from issuance of common stock
2,926 
5,805 
3,122 
Tax benefit from options
679 
390 
Cancellations and terminations of share grants
(253)
Repurchase of common stock
(54,897)
(8,096)
(4,204)
Shares withheld for employee taxes on equity awards
(1,083)
(684)
Deferred financing costs
(547)
(608)
Net cash provided by (used for) financing activities - continuing operations
126,864 
(58,471)
(19,922)
Net cash provided by (used for) financing activities - discontinued operations
(2,317)
(3,977)
Net cash used for financing activities
126,864 
(60,788)
(23,899)
Foreign Exchange Rate Effect on Cash
1,176 
(2,748)
2,778 
Net increase (decrease) in cash
(1,863)
2,591 
(2,853)
Cash at January 1
6,539 
3,948 
6,801 
Cash at December 31
4,676 
6,539 
3,948 
Supplemental Disclosures of Cash Flow Information
 
 
 
Interest
4,973 
4,196 
4,008 
Income taxes
$ 11,355 
$ 12,321 
$ 21,201 
Summary of Significant Accounting Policies
Summary of Significant Accounting Policies
Summary of Significant Accounting Policies
Basis of Presentation
The consolidated financial statements include the accounts of Myers Industries, Inc. and all wholly owned subsidiaries (collectively, the “Company”). All intercompany accounts and transactions have been eliminated in consolidation. All subsidiaries that are not wholly owned and are not included in the consolidated operating results of the Company are immaterial investments which have been accounted for under the equity and cost method. The preparation of financial statements in conformity with U.S. generally accepted accounting principles (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures at the date of the financial statements and the reported amount of revenues and expenses during the reported period. Actual results could differ from those estimates.
Segment Realignment and Discontinued Operations
During the second quarter of 2014, the Company realigned its reportable segments as a result of organizational changes to better align its resources to support its ongoing business strategy. The realignment is consistent with the manner in which our Chief Operating Decision Maker evaluates performance and makes resource allocation decisions. Historical segment information has been adjusted to reflect the effect of this change. Our segment information is more fully described in Note 14. Historical information also reflects discontinued operations presentation for businesses disposed of or meeting the held for sale criteria during 2014 as described in Note 4. Accordingly, the accompanying consolidated statements of operations, comprehensive income (loss), shareholders' equity, cash flows and the related notes to the consolidated financial statements of the Company for the years ended December 31, 2013 and 2012, as well as the consolidated balance sheet as of December 31, 2013 have been retrospectively revised to reflect the classification of our businesses disposed of or meeting the held for sale criteria during 2014 as assets and liabilities held-for-sale and their operating results, net of tax, as discontinued operations.
Recent Accounting Pronouncements Not Yet Adopted
In April 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2014-08, Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity. This guidance states that the disposal of a component of an entity is to be reported in discontinued operations only if the disposal represents a strategic shift that has (or will have) a major effect on an entity’s operations and financial results. The pronouncement also requires additional disclosures regarding individually significant disposals of components that do not meet the criteria to be recognized as a discontinued operation as well as additional and expanded disclosures. This ASU will be effective for the Company for applicable transactions occurring after January 1, 2015. We will prospectively apply the guidance to applicable transactions. The Lawn and Garden transaction described in Note 4 is not subject to this guidance.
In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers, to clarify the principles used to recognize revenue for all entities. Under ASU 2014-09, a company will recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. The new guidance is effective for the Company on January 1, 2017 with early adoption not permitted. Entities can transition to the standard either retrospectively or as a cumulative effect adjustment as of the adoption date. The Company is currently evaluating the impact the adoption of this guidance will have on its consolidated financial statements as well as the method by which the Company will adopt the new standard.
In August 2014, the FASB issued ASU 2014-15, Disclosure of Uncertainties About an Entity’s Ability to Continue as a Going Concern. The new standard provides guidance on determining when and how to disclose going-concern uncertainties in the financial statements. Under ASU 2014-15, management will be required to perform interim and annual assessments of the Company’s ability to continue as a going concern within one year of the date the financial statements are issued. ASU 2014-15 is effective for annual periods ending after December 15, 2016, and interim periods thereafter, with early adoption permitted. The adoption of this standard is not expected to have an impact on the Company’s financial statement disclosures.
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 ("ASC 820"), 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 Loan Agreement approximates carrying value due to the floating rates and relative short maturity (less than 90 days) of the revolving borrowings under this agreement. The fair value of the Company’s fixed rate senior unsecured notes was estimated using market observable inputs for the Company’s comparable peers with public debt, including quoted prices in active markets and interest rate measurements which are considered level 2 inputs. At December 31, 2014, the aggregate fair value of the Company's $100.0 million fixed rate senior unsecured notes was estimated at $106.8 million.
Concentration of Credit Risk
Financial instruments that potentially subject the Company to concentration of credit risk primarily consist of trade accounts receivable. The concentration of accounts receivable credit risk is generally limited based on the Company’s diversified operations, with customers spread across many industries and countries. The Company’s largest single customer in 2014 accounts for approximately 5% of total sales with only one other customer greater than 3%. Outside of the United States, only Brazil and Canada, which account for approximately 8% and 6% of total sales, respectively, are significant to the Company’s operations. In addition, management has established certain requirements that customers must meet before credit is extended. The financial condition of customers is continually monitored and collateral is usually not required. The Company evaluates the collectability of accounts receivable based on a combination of factors. In circumstances where the Company is aware of a specific customer’s inability to meet its financial obligations, a specific allowance for doubtful accounts is recorded against amounts due to reduce the net recognized receivable to the amount the Company reasonably believes will be collected. Additionally, the Company also reviews historical trends for collectability in determining an estimate for its allowance for doubtful accounts. If economic circumstances change substantially, estimates of the recoverability of amounts due the Company could be reduced by a material amount. Expense (income) related to bad debts was approximately $0.4 million, $0.5 million and $(0.8) million for the years 2014, 2013 and 2012, respectively. Deductions from the allowance for doubtful accounts, net of recoveries, were approximately $0.9 million, $0.8 million and $0.1 million for the years 2014, 2013 and 2012, respectively.
Factoring
During 2014, the Company’s wholly-owned subsidiary Plasticos Novel Do Nordeste S.A. and Plasticos Novel Do Parana S.A. ("Novel") entered into a factoring agreement to sell, without recourse, certain of their Brazilian real-based accounts receivables to an unrelated third party financial institution. During 2014, $9.1 million of receivables had been sold under the terms of the factoring agreement for cash proceeds of $8.8 million. The sale of these receivables reduced the credit exposure of the Company. Costs related to this program for the year ended December 31, 2014 were $0.3 million and are included in interest expense in the Consolidated Statement of Operations.
Inventories
Inventories are stated at the lower of cost or market. Approximately 30 percent of our inventories are valued using the last-in, first-out (“LIFO”) method of determining cost. All other inventories are valued at the first-in, first-out (“FIFO”) method of determining cost.
If the FIFO method of inventory cost valuation had been used exclusively by the Company, inventories would have been $6.8 million, $8.1 million and $8.7 million higher than reported at December 31, 2014, 2013 and 2012, respectively. The liquidation of LIFO inventories decreased cost of sales and increased income from continuing operations before income taxes by less than $0.4 million in 2014, and $0.1 million and $0.4 million in 2013 and 2012, respectively.
Property, Plant and Equipment
Property, plant and equipment are carried at cost less accumulated depreciation and amortization. The Company provides for depreciation and amortization on the basis of the straight-line method over the estimated useful lives of the assets as follows:
Buildings
20 to 40 years
Machinery and Equipment
3 to 10 years
Vehicles
1 to 3 years
Leasehold Improvements
5 to 10 years
At December 31, 2014, the Company had approximately $2.1 million and $3.1 million of capitalized software costs included in machinery and equipment on the accompanying Consolidated Statements of Financial Position in 2014 and 2013, respectively. Amortization expense related to capitalized software costs was approximately $0.3 million and $0.1 million in 2014 and 2013, respectively.
Long-Lived Assets
The Company reviews its long-lived assets and identifiable intangible assets with finite lives for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Determination of potential impairment related to assets to be held and used is based upon undiscounted future cash flows resulting from the use and ultimate disposition of the asset. For assets held for disposal, the amount of potential impairment may be based upon appraisal of the asset, estimated market value of similar assets or estimated cash flow from the disposition of the asset. Refer to Note 4 for discussion of the Lawn and Garden business 2014 impairment charge.
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 (Loss)
Changes in accumulated other comprehensive income (loss) and are as follows:
 
Foreign Currency
 
Defined Benefit Pension Plans
 
Total
Balance at January 1, 2012
$
9,994

 
$
(2,700
)
 
$
7,294

Other comprehensive income (loss) before reclassifications
2,791

 
493

 
3,284

Amounts reclassified from accumulated other comprehensive income, net of tax of ($36)(1)

 
65

 
65

Net current-period other comprehensive income (loss)
2,791

 
558

 
3,349

Balance at December 31, 2012
$
12,785

 
$
(2,142
)
 
$
10,643

Other comprehensive income (loss) before reclassifications
(9,292
)
 
1,005

 
(8,287
)
Amounts reclassified from accumulated other comprehensive income, net of tax of ($40)(1)

 
71

 
71

Net current-period other comprehensive income (loss)
(9,292
)
 
1,076

 
(8,216
)
Balance at December 31, 2013
3,493

 
(1,066
)
 
2,427

Other comprehensive income (loss) before reclassifications
(13,318
)
 
(826
)
 
(14,144
)
Amounts reclassified from accumulated other comprehensive income, net of tax of ($16)(1)

 
29

 
29

Net current-period other comprehensive income (loss)
(13,318
)
 
(797
)
 
(14,115
)
Balance at December 31, 2014
$
(9,825
)
 
$
(1,863
)
 
$
(11,688
)

(1) These accumulated other comprehensive income (loss) components are included in the computation of net periodic pension cost. (See Note 12-Retirement Plans for additional details.)
Shipping and Handling
Shipping and handling expenses are primarily classified as selling expenses in the accompanying Consolidated Statements of Operations. The Company incurred shipping and handling costs of approximately $19.4 million, $17.1 million and $16.6 million for the years ended December 31, 2014, 2013 and 2012, respectively.
Stock Based Compensation
The Company has stock plans that provide for the granting of stock-based compensation to employees and to non-employee directors. Shares are issued upon exercise from authorized, unissued shares. The Company records the costs of the plan under the provisions of ASC 718, Compensation — Stock Compensation. For transactions in which we obtain employee services in exchange for an award of equity instruments, we measure the cost of the services based on the grant date fair value of the award. The Company recognizes the cost over the period during which an employee is required to provide services in exchange for the award, referred to as the requisite service period (usually the vesting period).
Income Taxes
Income taxes are accounted for under the liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those differences are expected to be received or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.
The Company evaluates its tax positions in accordance with ASC 740, Income Taxes ("ASC 740"). ASC 740 provides detailed guidance for the financial statement recognition, measurement and disclosure of uncertain tax positions recognized in an enterprise’s financial statements. Income tax positions must meet a more-likely-than-not recognition threshold at the effective date to be recognized under ASC 740. The Company recognizes potential accrued interest and penalties related to unrecognized tax benefits as a component of income tax expense.
Cash and Cash Equivalents
The Company considers all highly liquid instruments purchased with a maturity of three months or less to be cash equivalents. Cash equivalents are stated at cost, which approximates market value. The Company maintains operating cash and reserves for replacement balances in financial institutions which, from time to time, may exceed federally insured limits. The Company periodically assesses the financial condition of these institutions and believes that the risk of loss is minimal.
Cash flows used in investing activities excluded $0.2 million, $0.5 million and $0.1 million of accrued capital expenditures in 2014, 2013 and 2012, respectively.
Acquisitions
Acquisitions
Acquisitions
On July 2, 2014, CA Acquisition Inc., now known as Scepter Canada Inc., and a wholly-owned subsidiary of Myers Industries, Inc., completed the purchase of substantially all of the assets and assumption of certain liabilities of Scepter Corporation and certain real property of SHI Properties Inc., both located in Scarborough, Ontario, Canada. Contemporaneously with the asset acquisition, Crown US Acquisition Company, now known as Scepter US Holding Company, and another wholly-owned subsidiary of Myers Industries, Inc., completed the purchase of all of the issued and outstanding membership interests of Eco One Leasing, LLC and Scepter Manufacturing, LLC, both located in Miami, Oklahoma. Eco One Leasing, LLC was subsequently merged into Scepter Manufacturing, LLC. The total purchase price for these acquisitions (collectively, “Scepter”) was $156.6 million in cash, which includes a final working capital adjustment. The acquisition of Scepter was funded from net proceeds from additional borrowings of approximately $134.1 million under the Fourth Amended and Restated Loan Agreement and cash on hand of $22.5 million.
The acquisition of Scepter strengthens and expands the Company's position as an industry leading producer of portable marine fuel containers, portable fuel and water containers and accessories, ammunition containers, storage totes and environmental bins for the marine, military, consumer and industrial markets. The acquisition of Scepter is consistent with the Company's business strategy and the products fit well with the Company's overall portfolio. The operating results of Scepter have been included within our Consolidated Statement of Operations and within the Company's Material Handling Segment since the date of acquisition. The Consolidated Statement of Operations for the Company for the year ended December 31, 2014 included net sales of $39.4 million and an operating loss of $5.4 million related to Scepter. Scepter's operating results included $2.3 million of inventory purchase accounting fair value adjustments charged to cost of sales as the inventory was sold. In addition, transactional costs of approximately $3.6 million for the year ended December 31, 2014 are included in general and administrative expenses in the Consolidated Statements of Operations.
The Company accounted for the acquisition of Scepter using the acquisition method of accounting, which requires among other things, the assets acquired and liabilities assumed be recognized at their respective fair values as of the acquisition date. As of December 31, 2014, the purchase price allocation remains preliminary as the Company has not finalized its assessment of contingent liabilities. As a result, additional adjustments may be recorded during the measurement period.
Scepter's assets and liabilities are recorded at fair value as of the date of acquisition using primarily level 3 fair value inputs. The purchase consideration, related preliminary estimated allocations, and resulting excess over fair value of net assets acquired are as follows:
Assets acquired:
 
 
Current assets
 
$
34,572

Property, plant and equipment
 
44,613

Intangible assets
 
66,500

Assets acquired
 
$
145,685

 
 
 
Liabilities assumed:
 
 
Current liabilities
 
$
8,877

Total liabilities assumed
 
8,877

 
 
 
Goodwill
 
19,812

Total consideration
 
$
156,620

Goodwill is calculated as the excess of the consideration transferred over the assets acquired and liabilities assumed and represents the future economic benefits arising from other assets acquired that could not be individually identified and separately recognized. The Company expects that approximately $16.4 million of goodwill recognized for the acquisition will be deductible for tax purposes.
Identifiable intangible assets acquired in connection with the acquisition of Scepter are as follows:
 
 
 
 
Estimated
 
 
 
 
Fair Value
 
Useful Life
 
Valuation Method
Intangible assets not subject to amortization:
 
 
 
 
 
 
Trademarks and trade names
 
$
8,900

 
Indefinite
 
Relief from royalty
 
 
 
 
 
 
 
Intangible assets subject to amortization:
 
 
 
 
 
 
Technology
 
22,300

 
10 years
 
Relief from royalty
Customer relationships
 
35,300

 
6 years
 
Multi-period excess earnings
 
 
57,600

 
 
 
 
Total
 
$
66,500

 
 
 
 

The following unaudited pro forma information presents a summary of the consolidated results of operations for the Company as if the acquisition of Scepter had occurred on January 1, 2013.
 
 
For the Year Ended
 
 
December 31, 2014
December 31, 2013
Net sales
 
$
675,046

$
679,567

 
 
 
 
Net income from continuing operations
 
$
16,206

$
30,271

 
 
 
 
Net income per share from continuing operations:
 
 
 
Basic
 
$
0.50

$
0.89

Diluted
 
$
0.50

$
0.89


The unaudited pro forma consolidated results are based on the Company’s historical financial statements and those of Scepter and do not necessarily indicate the results of operations that would have resulted had the acquisition actually been completed at the beginning of the applicable period presented. The pro forma financial information assumes that the companies were combined as of January 1, 2013. The pro forma results reflect the business combination accounting effects from the acquisition including amortization charges from the acquired intangible assets, inventory purchase accounting adjustments charged to cost of sales as the inventory is sold and increased interest expense associated with debt incurred to fund the acquisition. The unaudited pro forma consolidated results do not give effect to the synergies of the acquisition and are not indicative of the results of operations in future periods.
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. The Jamco acquisition resulted in goodwill of $7.4 million, which is non deductible for income tax purposes, and $5.7 million of identifiable intangible assets.
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 $30.9 million, which included 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 following four years.
Novel's assets and liabilities are recorded at fair value as of the date of acquisition using primarily level 3 fair value inputs. The Novel acquisition resulted in $9.8 million of goodwill, which is not deductible for income tax purpose, and $5.8 million of identifiable intangible assets.
The operating results of Novel and Jamco acquired have been included in our Material Handling Segment since the date of acquisition.
The Consolidated Statements of Operations for the Company for the year ended December 31, 2012 following the acquisition of Novel effective July 1, 2012 and Jamco on October 1, 2012 included total revenues of $21.5 million and net income of $0.2 million. Transactional costs of approximately $0.9 million were incurred during the year and are included in general and administrative expenses in the Consolidated Statements of Operations in 2012.
Goodwill and Intangible Assets
Goodwill and Intangible Assets
Goodwill and Intangible Assets
The Company is required to test for impairment of goodwill and intangible assets on at least an annual basis. The Company conducted its annual impairment assessment as of October 1 for its five reporting units, noting no impairment in 2014, 2013 or 2012. Based on procedures conducted to test impairment of goodwill of the Company’s reporting units, Plasticos Novel do Nordeste S. A. (“Novel”) and Jamco Products, Inc. (“Jamco”) did not substantially exceed their carrying value as of our assessment date in 2014. The estimated fair value of Novel and Jamco exceeded their carrying values by approximately 10% and 20%, respectively. Although no goodwill impairment charge is required for 2014, it does present a risk of future impairment for the goodwill assigned to those reporting units. The decline in the fair values of these businesses was driven primarily by reduced profitability as a result of lower margins due to higher costs, primarily in raw materials and a prolonged economic downturn in the Brazilian economy impacting Novel. As a result, management decreased future projections of the operating results and cash flows in assessing goodwill at these reporting units. 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.
In accordance with ASU No. 2011-08, Intangibles—Goodwill and Other (Topic 350), the Company first performs a qualitative assessment to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying value. If the Company concludes that this is the case, it must perform the two-step test. Otherwise the Company does not perform the two-step test. During the 2014 annual review of goodwill, management proceeded directly to the two-step test for Novel and Jamco. In evaluating goodwill for impairment using the two-step test, the Company uses a combination of valuation techniques primarily using discounted cash flows to determine the fair values of its business reporting units and market based multiples as supporting evidence. The variables and assumptions used, all of which are level 3 fair value inputs, include the projections of future revenues and expenses, working capital, terminal values, discount rates and long term growth rates. The market multiples observed in sale transactions are determined separately for each reporting unit, and are based on the weighted average cost of capital for each of the Company’s reporting units, which ranged from 10.0% to 13.0% in 2014. In addition we make certain judgments about the selection of comparable companies used in determining market multiples in valuing our business units, as well as certain assumptions to allocate shared assets and liabilities to calculate values for each of our business units. The underlying assumptions used are based on historical actual experience and future expectations that are consistent with those used in the Company’s strategic plan. The Company compares the fair value of each of its reporting units to their respective carrying values, including related goodwill. We also compare our book value and the estimates of fair value of the reporting units to our market capitalization as of and at dates near the annual testing date. Management uses this comparison as additional evidence of the fair value of the Company, as our market capitalization may be suppressed by other factors such as the control premium associated with a controlling shareholder, our leverage or general expectations regarding future operating results and cash flows. In situations where the implied value of the Company under the Income or Market Approach are significantly different than our market capitalization we re-evaluate and adjust, if necessary, the assumptions underlying our Income and Market Approach models. Our estimate of the fair values of these business units, and the related goodwill, could change over time based on a variety of factors, including the aggregate market value of the Company’s common stock, actual operating performance of the underlying businesses or the impact of future events on the cost of capital and the related discount rates used.
The change in the carrying amount of goodwill for the years ended December 31, 2014 and 2013 is as follows: 

 
Distribution
 
Material Handling
 
Total
January 1, 2013
$
505

 
$
50,741

 
$
51,246

Reclassification of prepaid asset from Novel acquisition

 
1,028

 
1,028

Foreign currency translation

 
(1,199
)
 
(1,199
)
December 31, 2013
505

 
50,570

 
51,075

Acquisitions

 
19,812

 
19,812

Foreign currency translation

 
(4,248
)
 
(4,248
)
December 31, 2014
$
505

 
$
66,134

 
$
66,639


Intangible assets other than goodwill primarily consist of trade names, customer relationships, patents, and technology assets established in connection with acquisitions. These intangible assets, other than certain trade names, are amortized over their estimated useful lives. The Company performs an annual impairment assessment for the indefinite lived trade names which had a carrying value of $11,256 and $2,509 at December 31, 2014 and 2013, respectively. In performing this assessment the Company uses an income approach, based primarily on level 3 inputs, to estimate the fair value of the trade name. The Company records an impairment charge if the carrying value of the trade name exceeds the estimated fair value at the date of assessment.
Intangible assets at December 31, 2014 and 2013 consisted of the following:
 
 
 
2014
 
2013
 
Weighted Average Useful Life (years)
 
Gross
 
Accumulated
Amortization
 
Net
 
Gross
 
Accumulated
Amortization
 
Net
Trade Names - Indefinite Lived

 
$
11,256

 
$

 
$
11,256

 
$
2,509

 
$

 
$
2,509

Trade Names
5.3
 
280

 
(110
)
 
170

 
280

 
(78
)
 
202

Customer Relationships
5.1
 
41,332

 
(7,964
)
 
33,368

 
7,968

 
(4,515
)
 
3,453

Technology
9.0
 
27,642

 
(2,552
)
 
25,090

 
5,502

 
(918
)
 
4,584

Patents
2.2
 
10,888

 
(8,538
)
 
2,350

 
10,899

 
(7,448
)
 
3,451

Non-Compete
0.0
 
150

 
(149
)
 
1

 
150

 
(94
)
 
56

 
 
 
$
91,548

 
$
(19,313
)
 
$
72,235

 
$
27,308

 
$
(13,053
)
 
$
14,255


Intangible amortization expense was $6,466, $2,769 and $2,188 in 2014, 2013 and 2012, respectively. Estimated annual amortization expense for intangible assets with finite lives for the next five years is: $10,449 in 2015; $10,447 in 2016; $9,539 in 2017, $9,086 in 2018 and $8,521 in 2019.
Discontinued Operations (Notes)
Discontinued Operations
Discontinued Operations

On June 20, 2014, the Company completed the sale of the assets and associated liabilities of its wholly-owned subsidiaries WEK Industries, Inc. and Whiteridge Plastics LLC (collectively “WEK”) for approximately $20.7 million, which includes a working capital adjustment of approximately $0.8 million. Of the total proceeds from the sale of WEK, approximately $1.0 million are held in escrow to be received in December 2015. The Company recorded a gain on the sale of WEK of approximately $3.0 million, net of tax of $1.6 million. WEK is a premier blow molder of custom engineered plastic components for the heavy truck, recreational vehicle, marine, appliance and consumer products industries. WEK was previously reported as part of our former Engineered Products Segment.

During the second quarter of 2014, the Company’s Board of Directors approved the commencement of the sale process to divest its Lawn and Garden business to allow it to focus resources on its core growth platforms. The Lawn and Garden business serves the North American horticulture market with plastic products such as seedling trays, nursery products, hanging baskets, custom print containers as well as decorative resin planters. The business was sold February 17, 2015 to an entity controlled by Wingate Partners V, L.P., a private equity firm, for $110 million, subject to a working capital adjustment. The sale of the Lawn & Garden business includes manufacturing facilities and offices located in Twinsburg, Ohio, Middlefield, Ohio, Elyria, Ohio, Sparks, Nevada, Sebring, Florida, Brantford, Ontario, and Burlington, Ontario. The terms of the agreement include a $90 million cash payment and a $20 million five year note.

Since the second quarter of 2014, the Lawn and Garden business met the held-for-sale criteria under the requirements of ASC 360. Accordingly, at December 31, 2014 and 2013, the Company has classified and accounted for the assets and liabilities of the Lawn and Garden business and WEK, for periods prior to the sale, as held for sale in the accompanying Consolidated Statements of Financial Position and their operating results, net of tax, as discontinued operations in the accompanying Consolidated Statements of Operations for all periods presented. In addition, the Company performed a fair value assessment of the Lawn and Garden business. The fair value, determined as sales price less cost to sell the business, was less than its carrying value at December 31, 2014, resulting in an $18.9 million impairment charge reported as discontinued operations in the Consolidated Statements of Operations.
Summarized selected financial information for the Lawn and Garden business and WEK for the years ended December 31, 2014, 2013 and 2012 are presented in the following table:
 
 
Year Ended
 
 
December 31,
 
 
2014*
 
2013
 
2012
Net sales
 
$
204,716

 
$
240,477

 
$
245,616

Income (loss) from discontinued operations before income taxes
 
$
(30,038
)
 
$
(394
)
 
5,145

Income tax expense (benefit)
 
(9,408
)
 
46

 
1,690

Income (loss) from discontinued operations
 
(20,630
)
 
(440
)
 
3,455

Net gain on sale of discontinued operations, net of tax of $1.6 million
 
2,988

 

 

Income (loss) from discontinued operations
 
$
(17,642
)
 
$
(440
)
 
3,455

 
 
 
 
 
 
 
* Includes WEK operating results through June 20, 2014.







The assets and liabilities of discontinued operations are stated separately as of December 31, 2014 and 2013, respectively, in the Consolidated Statements of Financial Position and are comprised of the following items:
 
 
Year Ended December 31,
 
 
2014
 
2013
Assets
 
 
 
 
Accounts receivable-net
 
$
29,794

 
$
37,527

Inventories
 
50,951

 
53,401

Prepaid expenses and other current assets
 
1,709

 
1,832

Goodwill
 
9,107

 
9,567

Patents and other intangible assets, net
 
6,030

 
6,860

Property, plant and equipment, net
 
38,168

 
51,028

Net asset impairment
 
(18,858
)
*

Other
 
874

 
353

Total Assets Held for Sale
 
$
117,775

 
$
160,568

 
 
 
 
 
Liabilities
 
 
 
 
 Accounts payable
 
$
22,239

 
$
29,366

 Accrued expenses and other liabilities
 
4,883

 
18,503

Total Liabilities Held for Sale
 
$
27,122

 
$
47,869


*Impairment includes $8.3 million of cumulative translation credit adjustment associated with the Lawn and Garden group.

The Lawn and Garden business restructuring plan, announced in July 2013, detailed the closure of two manufacturing plants: one in Brantford, Ontario and the second in Waco, Texas. The restructuring actions included closure, relocation and employee related costs. Through December 31, 2014, the Lawn and Garden business has incurred approximately $14.5 million of charges under its restructuring plan. Restructuring actions under the plan have been completed.

Restructuring charges related to discontinued operations for the year ended 2014, 2013 and 2012 are presented in the following table:
 
Year Ended
December 31,
 
2014
 
2013*
 
2012*
Severance and personnel
$
1,743

 
$
2,614

 
$
487

Other exit costs
3,762

 
6,189

 
1,198

Total
$
5,505

 
$
8,803

 
$
1,685


*Includes WEK restructuring charges of $0.2 million and $1.2 million in 2013 and 2012, respectively.
Net Income Per Common Share
Net Income Per Common Share
Net Income (Loss) Per Common Share
Net income (loss) per common share, as shown on the Consolidated Statements of Operations, is determined on the basis of the weighted average number of common shares outstanding during the periods as follows:
 
2014
 
2013
 
2012
Weighted average common shares outstanding:
 
 
 
 
 
Basic
32,232,965

 
33,588,720

 
33,597,020

Dilutive effect of stock options and restricted stock
471,047

 
454,705

 
512,212

Weighted average common shares outstanding diluted
32,704,012

 
34,043,425

 
34,109,232


Options to purchase 198,500, 123,900 and 212,000 shares of common stock that were outstanding at December 31, 2014, 2013 and 2012, respectively, were not included in the computation of diluted earnings per share as the exercise prices of these options was greater than the average market price of common shares.
Restructuring
Restructuring
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 depending on the type of cost incurred. The restructuring charges are presented in the following table.
 
2014
 
2013
 
2012
Segment
Cost of sales
Selling, general and administrative
Total
 
Cost of sales
Selling, general and administrative
Total
 
Cost of sales
Selling, general and administrative
Total
Distribution
$

$
764

$
764

 
$

$
194

$
194

 
$

$
727

$
727

Material Handling
189

260

449

 
178

47

225

 



Corporate



 

17

17

 

318

318

Total
$
189

$
1,024

$
1,213

 
$
178

$
258

$
436

 
$

$
1,045

$
1,045



During 2014, the Distribution Segment closed its Canadian branches operating under the name Myers Tire Supply International. The restructuring actions included closure, lease cancellation and employee related costs, which amounted to approximately $0.8 million. Restructuring actions under the plan have been completed.
Also during 2014, the Material Handling Segment restructured its sales and finance organization within several of its businesses. Restructuring costs of $0.4 million were incurred related to these actions.
During 2013, the Distribution Segment recorded restructuring costs of $0.2 million related to branch closure and severance costs. The Material Handling Segment incurred costs of $0.2 million related to severance.
In 2012, restructuring costs of $0.7 million for severance and non-cancelable lease costs were offset by a gain of $0.8 million on the sale of four facilities in the Distribution Segment. In addition, the Corporate costs included $0.3 million of restructuring charges related to severance costs.
No accruals remain related to restructuring programs as of December 31, 2014 and 2013. The accrued liability balance for severance costs was $0.3 million as of December 31, 2012.
Other Accrued Expense (Notes)
Other Accrued Expenses
Other Accrued Expenses
As of December 31, 2014 and 2013, the balance in other accrued expenses is comprised of the following:
 
 
2014
 
2013
Deposits and amounts due to customers
 
$
10,591

 
$
7,474

Dividends payable
 
4,267

 
3,174

Accrued litigation and professional fees
 
3,458

 
289

Other accrued expenses
 
7,856

 
5,497

 
 
$
26,172

 
$
16,434

Stock Compensation
Stock Compensation
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 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.

The following tables summarize stock option activity in the past three years:
Options granted in 2014, 2013 and 2012:
Year
Options
 
Exercise
Price
2014
209,500

 
$
20.93

2013
323,400

 
$
14.77

2012
323,950

 
$
12.96


Options exercised in 2014, 2013 and 2012:
Year
Options
 
Exercise
Price
2014
228,064

 
$9.97 to $17.02
2013
503,321

 
$8.00 to $18.62
2012
288,794

 
$8.00 to $12.55

In addition, options totaling 43,252, 164,528 and 113,913 expired or were forfeited during the years ended December 31, 2014, 2013 and 2012, respectively.
Options outstanding and exercisable at December 31, 2014, 2013 and 2012 were as follows: 
Year
Outstanding
 
Range of Exercise
Prices
 
Exercisable
 
Weighted Average
Exercise Price
2014
1,512,756

 
$9.00 to $20.93
 
1,066,219

 
$
11.58

2013
1,574,572

 
$9.00 to $18.62
 
1,057,694

 
$
11.48

2012
1,919,021

 
$8.00 to $18.62
 
1,355,112

 
$
11.63


Stock compensation expense reduced income before taxes approximately $3,115, $2,557 and $2,708 for the years ended December 31, 2014, 2013, and 2012, respectively. These expenses are included in selling, general and administrative expenses in the accompanying Consolidated Statements of Operations. Total unrecognized compensation cost related to non-vested share based compensation arrangements at December 31, 2014 was approximately $3,981 which will be recognized over the next three years, as such compensation is earned.
The fair value of options granted is estimated using an 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 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. In 2014, 2013 and 2012, the Company used the binomial lattice option pricing model based on assumptions set forth in the following table.
 
2014
 
2013
 
2012
Risk free interest rate
2.80
%
 
1.86
%
 
2.00
%
Expected dividend yield
2.50
%
 
2.40
%
 
2.20
%
Expected life of award (years)
7.0

 
7.0

 
5.4

Expected volatility
50.00
%
 
50.00
%
 
50.00
%
Fair value per option share
$
7.05

 
$
5.39

 
$
4.93


The following table provides a summary of stock option activity for the period ended December 31, 2014:
 
Shares
 
Average
Exercise
Price
 
Weighted
Average
Life
 
Aggregate
Intrinsic
Value
Outstanding at December 31, 2013
1,574,572

 
$
12.14

 
 
 
 
Options Granted
209,500

 
20.93

 
 
 
 
Options Exercised
(228,064
)
 
12.20

 
 
 
 
Canceled or Forfeited
(43,252
)
 
15.74

 
 
 
 
Outstanding at December 31, 2014
1,512,756

 
13.24

 
5.08 years
 
$
6,590

Exercisable at December 31, 2014
1,066,219

 
$
11.58

 
4.47 years
 
$
6,420


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 intrinsic value of stock options exercised in 2014, 2013 and 2012 was $1,744, $2,588 and $1,502, respectively.
The following table provides a summary of restricted stock activity for the period ended December 31, 2014:
 
Shares
 
Average
Grant-Date
Fair Value
Unvested shares at December 31, 2013
275,525

 
 
Granted
104,100

 
$
20.93

Vested
(123,829
)
 
11.75

Forfeited
(19,600
)
 
17.34

Unvested shares at December 31, 2014
236,196

 
$
16.78


Restricted stock units are rights to receive shares of common stock, subject to forfeiture and other restrictions, which vest over a two or three 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 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 December 31, 2014, restricted stock awards had vesting periods up through March 2017.
Contingencies
Contingencies
Contingencies
The Company is a defendant in various lawsuits and a party to various other legal proceedings, in the ordinary course of business, some of which are covered in whole or in part by insurance.
New Idria Mercury Mine
Effective October 2011, the 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, after another name change, was merged into Buckhorn Metal Products Inc. which was subsequently acquired by Myers Industries in 1987. The EPA contends that past mining operations have resulted in mercury contamination and acid mine drainage at the mine site, in the San Carlos Creek, Silver Creek and a portion of Panoche Creek, and that other downstream locations may also be impacted.
As of the date of this disclosure, no formal claim or allegation relating to the New Idria Mine Site against the Company or its subsidiary Buckhorn Inc. ("Buckhorn") has been received. However, since Buckhorn may be a potentially responsible party (“PRP”) at the New Idria Mercury Mine, the Company recognized an expense of $1.9 million, on an undiscounted basis, in 2011 related to performing a remedial investigation and feasibility study to determine the extent of remediation and the screening of alternatives. Payments of approximately $0.8 million have been incurred and charged against the reserve classified in Other Liabilities on the Consolidated Statements of Financial Position as of December 31, 2014. As investigation and remediation proceed, it is likely that adjustments to the reserved expense will be necessary to reflect new information. Estimates of the Company’s liability are based on current facts, laws, regulations and technology. Estimates of the Company’s environmental liabilities are further subject to uncertainties regarding the nature and extent of site contamination, the range of remediation alternatives available, evolving remediation standards, imprecise engineering evaluation and cost estimates, the extent of remedial actions that may be required, the number and financial condition of other PRPs as well as 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 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 informal reports, EPA’s interim removal project costs were approximately $0.5 million. The Company and Buckhorn have received indications that the EPA intends to seek recovery of the costs of this work and other past costs from the Company and Buckhorn and to initiate the administrative processes whereby the Company and/or Buckhorn would perform the remedial investigation and feasibility study described above.
Guadelupe River Watershed TMDL
A number of parties, including the Company and its subsidiary, Buckhorn, were identified in a planning document adopted in October 2008 by the California Regional Water Quality Control Board, San Francisco Bay Region (“RWQCB”). The planning document relates to the presence of mercury, including amounts contained in mining wastes, in and around the Guadalupe River Watershed (“Watershed”) region in Santa Clara County, California and specifically to the development of a "total maximum daily load" ("TMDL") for mercury deposits into the Watershed. The RWQCB has since completed the development and adoption of the Watershed mercury TMDL. Buckhorn has previously been alleged to be a successor in interest to NIMCC, which owned property and performed mining operations in a portion of the Watershed area. The Company has not been contacted by the RWQCB or by other parties who have been involved in Watershed clean-up efforts that have been initiated as a result of the adoption of the TMDL. Although assertion of a claim by the RWQCB or another party involved in this clean up effort is reasonably possible, it is not possible at this time to estimate the amount of any obligation the Company may incur for these cleanup efforts within the Watershed region, or whether such cost would be material to the Company’s consolidated financial statements.

Other
Buckhorn and Schoeller Arca Systems, Inc. (“SAS”) were plaintiffs in a patent infringement lawsuit against Orbis Corp. and Orbis Material Handling, Inc. (“Orbis”) for alleged breach by Orbis of an exclusive patent license agreement from SAS to Buckhorn.  SAS is an affiliate of Schoeller Arca Systems Services B.V. (“SASS B.V.”), a Dutch company.  SAS manufactures and sells plastic returnable packaging systems for material handling.  In the course of the litigation, it was discovered that SAS had given a patent license agreement to a predecessor of Orbis that pre-dated the one that SAS sold to Buckhorn.  As a result, judgment was entered in favor of Orbis, and the court awarded attorney fees and costs to Orbis in the amount of $3.1 million, plus interest and costs.  In May 2014, Orbis made demand to SAS that SAS pay the judgment in full, and subsequently in July 2014, Orbis made the same demand to Buckhorn.  Although the range of exposure is $0 - $3.1 million, plus interest, Buckhorn’s responsibility as a co-judgment debtor is not specified.  Buckhorn believes it is not responsible for any of the award because it is not a party to the Orbis license and will continue to aggressively pursue any and all legal actions both with respect to appealing the award requesting SAS be named solely responsible for payment of the judgment, as well as pursuing SAS and SASS B.V. for fraudulently selling an exclusive patent license they could not sell.   In August 2014, SASS B.V. informed Buckhorn that SAS may not have the financial ability to pay the judgment and provided financial statements to Buckhorn indicating SAS is in financial distress and while SASS B.V is financially stable, the award is against SAS, not SASS B.V.  Given the uncertainty of SAS’s financial ability to meet the obligation and the judgment is joint and several, Myers has recorded an expense of $3.0 million during 2014 for the entire amount of the unpaid judgment, despite the belief we will ultimately be successful in the appeal and suing SAS and SASS B.V. The matter is presently under appeal and Buckhorn is also suing SAS and SASS B.V.
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, cash flows or overall trends in our results of operations. However, these matters are subject to inherent uncertainties, and unfavorable rulings could occur. If an unfavorable ruling were to occur, there exists the possibility of a material adverse impact on the financial position and results of operations of the period in which the ruling occurs, or in future periods.
Long-Term Debt and Credit Agreements
Long-Term Debt and Credit Agreements
Long-Term Debt and Loan Agreements
Long-term debt at December 31, 2014 and 2013 consisted of the following: 
 
2014
 
2013
Loan Agreement
$
137,109

 
$
34,200

4.67% Senior Unsecured Notes due 2021
40,000

 

5.25% Senior Unsecured Notes due 2024
11,000

 
11,000

5.30% Senior Unsecured Notes due 2024
29,000

 

5.45% Senior Unsecured Notes due 2026
20,000

 

 
237,109

 
45,200

Less unamortized deferred financing costs
680

 
853

 
$
236,429

 
$
44,347


On December 13, 2013, the Company entered into a Fourth Amended and Restated Loan Agreement (the “Loan Agreement”). The Loan Agreement provided for a $200 million senior revolving credit facility expiring on December 13, 2018, which replaced the then existing $180 million facility. In addition, on May 30, 2014, the Company entered into a First Amendment to the Loan Agreement (the "Loan Amendment"). The Loan Amendment increased the senior revolving credit facility from $200 million to $300 million through December 2018 and provided for an additional subsidiary of the Company as a borrower and as a guarantor of the credit facility. On July 2, 2014, the Company borrowed approximately $135.3 million under the Loan Agreement to fund the acquisition of Scepter. Amounts borrowed under the agreement are secured by pledges of stock of certain of our foreign and domestic subsidiaries.
Under the terms of the Loan Agreement, the Company may borrow up to $300 million, reduced for letters of credit issued. As of December 31, 2014, the Company had $158.6 million available under the Loan Agreement. The Company also had $4.3 million of letters of credit issued related to insurance and other financing contracts in the ordinary course of business at December 31, 2014. Borrowings under the Loan Agreement bear interest at the LIBOR rate, prime rate, federal funds effective rate, the Canadian deposit offered rate, or the eurocurrency reference rate depending on the type of loan requested by the Company, in each case plus the applicable margin as set forth in the Loan Agreement. The average interest rate on borrowings under our loan agreements were 4.00% percent at December 31, 2014 and 3.71% percent at December 31, 2013, which includes a quarterly facility fee on the used and unused portion.
On October 22, 2013, the Company entered into a note purchase agreement for the private placement of Senior Unsecured Notes totaling $100 million with a group of investors. The four series of notes range in face value from $11 million to $40 million, with interest rates ranging from 4.67% to 5.45%, payable semiannually, and expiring between 2021 and 2026. At December 31, 2013, the Company had received $11 million of its 5.25% Senior Unsecured Notes due January 15, 2024 under the note purchase agreement. The remaining proceeds of $89 million under the note purchase agreement were subsequently received in January 2014. At December 31, 2014, $100 million was outstanding.
Long-term debt of $236.4 million at December 31, 2014 includes $0.7 million of unamortized deferred financing costs, which is accounted for as a debt valuation account. Amounts outstanding at December 31, 2014 under the Loan Agreement and note purchase agreement mature in 2018 and 2021 to 2026, respectively.
As of December 31, 2014, the Company was in compliance with all of its debt covenants associated with its Loan Agreement and Senior Unsecured Notes. The significant financial covenants include an interest coverage ratio, defined as earnings before interest , taxes, depreciation and amortization divided by interest expense, and a leverage ratio, defined as earnings before interest, taxes, depreciation, and amortization, as adjusted, compared to total debt. The ratios as of December 31, 2014 are shown in the following table:
 
 
 
 
 
Required Level                
 
Actual Level
Interest Coverage Ratio
3.00 to 1 (minimum)
 
10.14
Leverage Ratio
3.25 to 1 (maximum)
 
2.78
Income Taxes
Income Taxes
Income Taxes
The effective tax rate from continuing operations was 36.4% in 2014, 33.5% in 2013 and 37.2% in 2012. A reconciliation of the Federal statutory income tax rate to the Company’s effective tax rate is as follows:
 
Percent of Income before
Income Taxes
 
2014
 
2013
 
2012
Statutory Federal income tax rate
35.0
 %
 
35.0
 %
 
35.0
 %
State income taxes — net of Federal tax benefit
(4.5
)
 
2.9

 
4.6

Foreign tax rate differential
1.8

 
(0.2
)
 
0.5

Domestic production deduction
(6.6
)
 
(3.1
)
 
(3.0
)
Non-deductible expenses
7.0

 
1.3

 
1.0

Changes in unrecognized tax benefits
(2.5
)
 
(0.2
)
 
(0.9
)
Foreign tax incentives
(3.0
)
 
(2.2
)
 
(1.4
)
Valuation allowances
9.0

 

 
0.8

Other
0.2

 

 
0.6

Effective tax rate for the year
36.4
 %
 
33.5
 %
 
37.2
 %

Income from continuing operations before income taxes was attributable to the following sources:
 
2014
 
2013
 
2012
United States
$
21,074

 
$
38,089

 
$
42,021

Foreign
(6,991
)
 
1,696

 
175

Totals
$
14,083

 
$
39,785

 
$
42,196


Income tax expense (benefit) from continuing operations consisted of the following:
 
2014
 
2013
 
2012
 
Current
 
Deferred
 
Current
 
Deferred
 
Current
 
Deferred
Federal
$
8,298

 
$
(1,208
)
 
$
13,273

 
$
(1,413
)
 
$
11,871

 
$
896

Foreign
(277
)
 
(710
)
 
629

 
(920
)
 
339

 
(389
)
State and local
(234
)
 
(747
)
 
2,170

 
(396
)
 
2,876

 
96

 
$
7,787

 
$
(2,665
)
 
$
16,072

 
$
(2,729
)
 
$
15,086

 
$
603



Significant components of the Company’s deferred taxes as of December 31, 2014 and 2013 are as follows:
 
2014
 
2013
Deferred income tax liabilities
 
 
 
Property, plant and equipment
$
11,629

 
$
11,136

Tax-deductible goodwill
7,728

 
7,890

Non-deductible intangibles
1,843

 
2,313

State deferred taxes
687

 
1,150

Other
483

 
446

 
22,370

 
22,935

Deferred income tax assets
 
 
 
Compensation
6,716

 
5,982

Inventory valuation
636

 
602

Allowance for uncollectible accounts
260

 
452

Non-deductible accruals
2,631

 
1,956

Other
15

 
108

Net operating loss carryforwards
5,050

 
3,655

 
15,308

 
12,755

Valuation Allowance
(4,326
)
 
(4,264
)
 
10,982

 
8,491

Net deferred income tax liability
$
11,388

 
$
14,444


ASC 740 Income Taxes requires that deferred tax assets be reduced by a valuation allowance, if based on all available evidence, it is more likely than not that the deferred tax asset will not be realized. Available evidence includes the reversal of existing taxable temporary differences, future taxable income exclusive of temporary differences, taxable income in carryback years and tax planning strategies. At December 31, 2014, the Company has deferred tax assets of $5.1 million resulting from foreign net operating tax loss carryforwards, as well as $4.3 million of related valuation allowances, primarily from Brazil of approximately $14.9 million. These net operating tax loss carryforwards will begin to expire in 2034.
No provision has been recorded for unremitted earnings of foreign subsidiaries as it is the Company’s intention to indefinitely reinvest the earnings of those subsidiaries. Accordingly, at December 31, 2014, the Company had not recorded a deferred tax liability related to investments in its foreign subsidiaries that are essentially permanent in duration. The amount of such temporary differences was estimated to be approximately $15.9 million and may become taxable in the U.S. upon a repatriation of assets or a sale or liquidation of the subsidiaries. It is not practical to estimate the related amount of unrecognized tax liability.











The following table summarizes the activity related to the Company’s unrecognized tax benefits:
 
2014
 
2013
 
2012
Balance at January 1
$
840

 
$
910

 
$
1,049

Increases related to current year tax positions

 

 

Increases related to acquired businesses

 

 
236

Increases related to previous year tax positions
5

 

 
580

Reductions due to lapse of applicable statute of limitations
(362
)
 
(48
)
 
(256
)
Reduction due to settlements

 
(22
)
 
(699
)
Balance at December 31
$
483

 
$
840

 
$
910


The total amount of gross unrecognized tax benefits that would reduce the Company’s effective tax rate was $0.5 million, $0.8 million and $0.9 million at December 31, 2014, 2013 and 2012, respectively. The amount of accrued interest expense included as a liability within the Company’s Consolidated Statements of Financial Position was $0.1 million as of each of December 31, 2014, 2013 and 2012. The December 31, 2014 balance of unrecognized tax benefits includes approximately $0.5 million of unrecognized tax benefits for which it is reasonably possible that they will be recognized within the next twelve months. This amount represents a decrease in unrecognized benefits related to state income tax audits, and expiring statutes in U.S. Federal, state, and Non-U.S. jurisdictions.

The Company and its subsidiaries file U.S. Federal, state and local, and non-U.S. income tax returns. As of December 31, 2014 the Company is no longer subject to U.S. Federal and state examinations by tax authorities for tax years before 2011 and 2010, respectively.  In addition, the Company is subject to non-U.S. income tax examinations for tax years of 2009 through 2014.
Retirement Plans
Retirement Plans
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 defined.
Net periodic pension cost for the years ended December 31, 2014, 2013 and 2012 was as follows:
 
2014
 
2013
 
2012
 
Underfunded
 
Underfunded
 
Underfunded
Interest cost
$
280

 
$
259

 
$
287

Expected return on assets
(371
)
 
(333
)
 
(236
)
Amortization of net loss
45

 
111

 
101

Net periodic pension cost
$
(46
)
 
$
37

 
$
152


The reconciliation of changes in projected benefit obligations are as follows:
 
2014
 
2013
Accumulated benefit obligation at beginning of year
$
6,150

 
$
7,109

Interest cost
280

 
259

Actuarial (gain) loss
1,235

 
(738
)
Expenses paid
(95
)
 
(74
)
Benefits paid
(403
)
 
(406
)
Accumulated benefit obligation at end of year
$
7,167

 
$
6,150




The assumptions used to determine the net periodic benefit cost and benefit obligations are as follows:
 
2014
 
2013
 
2012
Discount rate for net periodic pension cost
4.70
%
 
3.75
%
 
4.50
%
Discount rate for benefit obligations
3.90
%
 
4.70
%
 
3.75
%
Expected long-term return of plan assets
8.00
%
 
8.00
%
 
8.00
%

The expected long-term rate of return assumption is based on the actual historical rate of return on assets adjusted to reflect recent market conditions and future expectations consistent with the Company’s current asset allocation and investment policy. This policy provides for aggressive capital growth balanced with moderate income production. The inherent risks of equity exposure exists, however, returns generally are less volatile than maximum growth programs. The assumed discount rates represent long-term high quality corporate bond rates commensurate with the liability duration of its plan.
The following table reflects the change in the fair value of the plan’s assets:
 
2014
 
2013
Fair value of plan assets at beginning of year
$
5,577

 
$
4,528

Actual return on plan assets
316

 
1,165

Company contributions
318

 
364

Expenses paid
(95
)
 
(74
)
Benefits paid
(403
)
 
(406
)
Fair value of plan assets at end of year
$
5,713

 
$
5,577


The fair value of plan assets are all categorized as level 1 and were determined based on period end closing prices in active markets. The weighted average asset allocations at December 31, 2014 and 2013 are as follows:
 
2014
 
2013
U.S. Equities securities
82
%
 
82
%
U.S. Debt securities
17
%
 
17
%
Cash
1
%
 
1
%
Total
100
%
 
100
%

The following table provides a reconciliation of the funded status of the plan at December 31, 2014 and 2013:
 
2014
 
2013
Projected benefit obligation
$
7,167

 
$
6,150

Plan assets at fair value
5,713

 
5,577

Funded status
$
(1,454
)
 
$
(573
)

The funded status shown above is included in other long-term liabilities in the Company’s Consolidated Statements of Financial Position at December 31, 2014 and 2013. The Company expects to make a contribution of $288 to the plan in 2015.

Benefit payments projected for the plan are as follows: 
2015
$
387

2016
385

2017
381

2018
373

2019
379

2020-2024
1,936


Effective January 1, 2012 the Company changed its profit sharing and 401(k) plan which included 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. The Company recognized expense related to the 401(k) employer matching contribution in the amount of $3,018, $2,802 and $2,609 in 2014, 2013 and 2012, respectively.
In addition, the Company has a Supplemental Executive Retirement Plan (“SERP”) to provide certain participating senior executives with retirement benefits in addition to amounts payable under the 401(k) plan. Expense (income) related to the SERP was approximately $402, $(152), and $477 for the years ended December 2014, 2013 and 2012, respectively. The SERP liability was based on the discounted present value of expected future benefit payments using a discount rate of 3.90% at December 31, 2014 and 4.70% at December 31, 2013. The SERP liability was approximately $4,280 and $4,270 at December 31, 2014 and 2013, respectively, and is included in Accrued Employee Compensation and Other Long-Term Liabilities on the accompanying Consolidated Statements of Financial Position. The SERP is unfunded.
Leases
Leases
Leases
The Company and certain of its subsidiaries are committed under non-cancelable operating leases involving certain facilities and equipment. Aggregate rental expense for all leased assets was $4,708, $4,199 and $3,421 for the years ended December 31, 2014, 2013 and 2012, respectively.
Future minimum rental commitments are as follows:
Year Ended December 31,
Commitment
2015
$
4,861

2016
3,864

2017
2,000

2018
314

2019
3

Thereafter
3,958

Total
$
15,000

Industry Segments
Industry Segments
Industry Segments
During 2014, the Company realigned its reportable segments as a result of organizational changes to better support its ongoing business strategy. The realignment is consistent with the manner in which our Chief Operating Decision Maker evaluates performance and makes resource allocation decisions. Using the criteria of ASC 280 Segment Reporting, the Company currently manages its business under two operating segments: Material Handling and Distribution. Certain business units that formerly reported in the Engineered Products Segment are now part of the Material Handling and Distribution Segments. Historical segment information reflects the effect of these changes. 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 combined on the basis of common management, customers, products, production processes and other economic characteristics. The Company accounts for intersegment sales and transfers at cost plus a specified mark-up.

The Material Handling Segment manufactures a broad selection of plastic reusable containers, pallets, small parts bins, bulk shipping containers, storage and organization products and rotationally-molded plastic tanks for water, fuel and waste handling. This segment conducts its primary operations in the United States, but also operates in Brazil and Canada. Markets served encompass various niches of industrial manufacturing, food processing, retail/wholesale products distribution, agriculture, automotive, recreational vehicles, marine vehicles, healthcare, appliance, bakery, electronics, textiles, consumer, and others. Products are sold both directly to end-users and through distributors.

The Distribution Segment is engaged in the distribution of equipment, tools, and supplies used for tire servicing and automotive undervehicle repair and the manufacture of tire repair and retreading products. The product line includes categories such as tire valves and accessories, tire changing and balancing equipment, lifts and alignment equipment, service equipment and tools, and tire repair/retread supplies. The Distribution Segment operates domestically through sales offices, and four regional distribution centers in the United States and in foreign countries through export sales. In addition, the Distribution Segment operates directly in certain foreign markets, principally Central America, through foreign branch operations. Markets served include retail and truck tire dealers, commercial auto and truck fleets, auto dealers, general service and repair centers, tire retreaders, and government agencies.
Total sales from foreign business units and export to countries outside the U.S. were approximately $110.4 million, $95.1 million, and $81.0 million for the years ended December 31, 2014, 2013 and 2012, respectively. Sales made to customers in Brazil accounted for approximately 7.3% of total net sales in 2014, 8.2% in 2013 and 5.3% in 2012. Sales made to customers in Canada accounted for approximately 4.2% of total net sales in 2014, 3.3% in 2013 and 4.4% in 2012.There are no other individual foreign countries for which sales are material. Long-lived assets in foreign countries, consisting of property, plant and equipment, were approximately $44.8 million at December 31, 2014 and $16.9 million at December 31, 2013. The increase in long-lived assets in foreign countries is mainly the result of assets acquired with the Scepter acquisition.
 
2014
 
2013
 
2012
Net Sales
 
 
 
 
 
Material Handling
$
432,054

 
$
380,605

 
$
337,474

Distribution
191,873

 
204,460

 
208,567

Intra-segment elimination
(278
)
 
(332
)
 
(469
)
 
$
623,649

 
$
584,733

 
$
545,572

Income from Continuing Operations Before Income Taxes
 
 
 
 
 
Material Handling
$
31,903

 
$
47,428

 
$
51,296

Distribution
16,024

 
21,727

 
22,582

Corporate
(25,309
)
 
(24,839
)
 
(27,352
)
Interest expense - net
(8,535
)
 
(4,531
)
 
(4,330
)
 
$
14,083

 
$
39,785

 
$
42,196

Identifiable Assets
 
 
 
 
 
Material Handling
$
370,501

 
$
240,897

 
$
254,165