We are pleased to report a record performance for 1998, our 65th year of operation and 27th year as a public company. For the third year in a row both of our business segments, manufacturing and distribution, achieved record sales and profits.

Net sales for the fourth quarter were $110.5 million, up 16 percent from the $95.5 million reported a year earlier. Net income for the quarter was a record $9.2 million, up 11 percent from the $8.3 million in 1997. On a per share basis, net income was $.50, up 11 percent from 1997's $.45 per share.

For the year, net sales of $392.0 million were 15 percent greater than the $339.6 million reported in 1997. Net income for the year was $28.7 million, up 28 percent from $22.3 million in 1997. Net income per share was $1.57, a 30 percent increase from the $1.21 earned last year.

At year's end, shareholders' equity was $202.7 million, an increase of $26.0 million or 15 percent, and book value per share increased 14 percent to $11.05.

In July, the Board of Directors declared a 20 percent increase in the cash dividend, the 23rd consecutive year that the Company has increased its payout to shareholders.

The price of a share of Myers stock opened the year at $17 5/16 and finished in December at $28 11/16, a 68 percent increase over 1997.

1998 was an exceptional year for the Company. We closed on or agreed to five acquisitions during the course of the year.

The closing of our purchase of raaco International in January proved to be a harbinger of things to come. In August, we acquired Sherwood Plastics, Inc., a custom rotational molding business, followed by the purchase of Kadon, a manufacturer of structural foam plastic products, in October. Finally, in December we purchased the majority interest of Myers El Salvador, and we signed an agreement to acquire Allibert Équipement, the plastic material handling division of Sommer Allibert, a publicly traded French company. The acquisition included 100 percent of the partnership interests in Allibert Contico, a joint venture between Allibert Équipement and Contico International, Inc. in the United States.

The Allibert Équipement purchase, which closed in early February of 1999, was the most significant acquisition the Company has made in many years. It will have an immediate impact upon our balance sheet and revenues. Looking beyond 1999, we expect Allibert Équipement to contribute increasingly to our profitability.

Based in France, Allibert Équipement is a leading supplier of plastic bulk containers, totes, pallets and holding tanks to European markets. Their products serve agricultural, appliance, automotive and food industry needs.

The Company gains five manufacturing facilities and multiple sales offices on the European continent, and one manufacturing plant and sales organization in the United States. Most of the facilities are ISO 9000 certified and utilize injection molding, rotomolding, winding extrusion and structural foam injection molding processes to produce more than 1,000 products.

The purchase of Allibert Équipement was an unusual opportunity to broaden our existing product offering, expand our pool of talent, increase our manufacturing capacity, and add market share in both Europe and the United States. It establishes us firmly upon the European continent, a process begun with the purchase of raaco International.

The Company will gradually integrate Allibert Équipement, Allibert Contico, Kadon, raaco, and Sherwood Plastics into the manufacturing segment without detracting from the strengths and virtues that made them attractive to us in the first place. We are even now providing Allibert Contico and Buckhorn reusable plastic containers to our North American customers under the unified brand name of AC Buckhorn.

Although small, the purchase of the majority interest of Myers El Salvador in early December provides us with a basis to build our Central American distribution business.

Over the past two years, we increased distribution's domestic sales force by over 20 percent. As a result of resized sales territories, more sales personnel and increased customer contact, the segment realized record sales and profits in 1998.

Concurrent with our external investments, the Company made internal capital investments of $19.4 million in 1998 toward tooling and molding equipment, enterprise software systems and physical property improvements. Total investment in plant and equipment over the past 5 years has exceeded $84 million.

A review of our performance over the last ten years shows sales increased from $183.8 million in 1988 to $392.0 million this year, an 8 percent annual growth rate. Net income grew from $8.1 million in 1988 to $28.7 million this year, a 13 percent annual growth rate. Income per share rose from $.49 per share in 1988 to $1.57 per share in 1998, an enduring 12 percent annual growth rate.

Shareholders traveling abroad will be pleased to learn Myers' stock is quoted daily under the AMEX 100 listing in the International Herald Tribune and in the Financial Times.

The Company's prospects for 1999 and beyond are optimistic, although tempered by our cautious approach to business. Having begun in an Akron, Ohio, storefront in 1933, we will end the century with an international presence and solid tools for sustained growth.

We thank our valued customers, suppliers, and the more than 2,500 Myers Industries employees, without whose hard work, talent, and ideas we would not be able to report these record results.

March 12, 1999