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Press release from Business Wire

Myers Industries Reports 2013 Second Quarter Results

<ul> <li class='bwlistitemmargb'> Net sales rose 12.7% year-over-year </li> <li class='bwlistitemmargb'> Second quarter diluted EPS up 47% compared to last year </li> <li class='bwlistitemmargb'> Significant profit improvement year-over-year by the Lawn and Garden Segment for the second consecutive quarter; Second phase of restructuring announced </li> <li class='bwlistitemmargb'> Strong operating cash flow generation </li> <li class='bwlistitemmargb'> Expect year-over-year EPS growth in the second half of 2013 </li> </ul>

Thursday, July 18, 2013

Myers Industries Reports 2013 Second Quarter Results

07:30 EDT Thursday, July 18, 2013

AKRON, Ohio (Business Wire) -- Myers Industries, Inc. (NYSE: MYE) today announced results for the second quarter ended June 30, 2013.

Summary

   
Three Months Ended June 30, Six Months Ended June 30,
2013   2012  

% Increase
(Decrease)

2013   2012  

% Increase
(Decrease)

(Dollars in thousands, except share data)
 
Net sales $ 204,024 $ 181,101 12.7 % $ 419,004 $ 379,890 10.3 %
Gross profit $ 55,769 $ 47,364 17.7 % $ 114,087 $ 105,362 8.3 %
Gross profit margin 27.3 % 26.2 % 27.2 % 27.7 %
Income before taxes $ 12,003 $ 8,938 34.3 % $ 24,155 $ 24,974 (3.3 )%
Net Income:
Income $ 8,312 $ 5,658 46.9 % $ 16,195 $ 15,643 3.5 %
Income per diluted share $ 0.25 $ 0.17 47.1 % $ 0.48 $ 0.46 4.3 %
 
Income before taxes as adjusted* $ 13,388 $ 9,199 45.5 % $ 26,247 $ 25,791 1.8 %
Net income as adjusted*:
Income $ 8,434 $ 5,703 47.9 % $ 16,536 $ 15,990 3.4 %
Income per diluted share $ 0.25 $ 0.17 47.1 % $ 0.49 $ 0.47 4.3 %
 

*Details regarding the special pre-tax adjusted charges are provided on the Reconciliation of Non-GAAP Financial Measures included in this release.

  • Net sales in the second quarter of 2013 rose 12.7% compared to the second quarter of 2012, reflecting strong sales in the Material Handing Segment.
  • The overall gross margin was 27.3% in the second quarter of 2013 compared to 26.2% in the second quarter of 2012. The increase was due mostly to cost savings that resulted from productivity improvements and material substitutions.
  • Net Income per diluted share increased 47% to $0.25 in the second quarter of 2013 compared to $0.17 in the second quarter of 2012, reflecting benefits from the Novel and Jamco acquisitions, cost reductions and the improved performance of the Lawn and Garden Segment.

President and Chief Executive Officer John C. Orr said, " I am very pleased with our performance in the second quarter as highlighted by our increased earnings per share of 47% year-over-year. I am particularly pleased with the second consecutive quarter of significant profit improvement in our Lawn and Garden Segment which is reflected in the segment's year-over-year increase in adjusted income before taxes of $2.7 million. Our recent acquisitions also contributed to our earnings per share growth and continue to be accretive."

Orr continued, "Earlier today, in a separate release, we announced phase two of our Lawn and Garden Segment restructuring which will position the segment for future growth and deliver annual savings of $8.0 million. A portion of those savings will begin to be realized in the fourth quarter of 2013. This second phase, coupled with the $5.0 million savings from the on-going phase one cost reduction initiative, will result in a total annual savings of $13.0 million in 2014."

Segment Results

The results below are as adjusted and exclude special pre-tax charges as detailed on the Reconciliation of Non-GAAP Financial Measures included in this release.

Net sales in the Material Handling Segment for the second quarter of 2013 were $83.8 million compared to $60.3 million for the second quarter of 2012. The sales increase was driven by the Novel and Jamco acquisitions, a shift in customer orders into the second quarter and organic growth. Material Handling's adjusted income before taxes was $11.0 million for the second quarter of 2013 compared to $9.2 million for the second quarter of 2012. The increase in income before taxes was due mostly to the higher sales volumes and the acquisitions of Novel and Jamco.

Net sales in the Lawn and Garden Segment for the second quarter of 2013 were $40.9 million compared to $42.5 million for the second quarter of 2012. Lawn and Garden's adjusted income before taxes for the second quarter of 2013 was $1.2 million compared to a loss of $1.5 million for the second quarter of 2012. Productivity improvements and material substitution cost savings were the primary drivers behind the increase in adjusted income before taxes year-over-year.

Net sales in the Distribution Segment were $45.9 million for the second quarter of 2013 compared to $44.2 million for the second quarter of 2012. The increase in sales was due mostly to sales of new products and market share gains in equipment sales. Distribution's adjusted income before taxes was $3.9 million for the second quarter of 2013 compared to $4.1 million for the second quarter of 2012. Distribution continues to be impacted by a slow replacement tire market. Costs associated with an upgrade in the segment's information technology system contributed to the decline in adjusted income before taxes year-over-year.

Net sales in the Engineered Products Segment were $37.6 million for the second quarter of 2013 compared to $38.6 million for the second quarter of 2012. Strong sales in the marine and recreational vehicle markets were more than offset by a decline in custom sales year-over-year. Engineered Products' adjusted income before taxes was $5.1 million for the second quarter of 2013 compared to $4.7 million for the second quarter of 2012. A favorable product mix and productivity improvements led to the increase in income before taxes year-over-year, despite the lower sales.

Other Financial Items

For the six months ended June 30, 2013, cash flow provided by operations was $30.1 million compared to $7.9 million in the first half of 2012, reflecting efforts to better manage working capital.

Capital expenditures totaled $10.2 million for the six months ended June 30, 2013 and are still forecasted to be approximately $30 million to $35 million in 2013.

Outlook

The Company expects continued year-over-year improvement in each of the next two quarters in both sales and adjusted earnings excluding special pre-tax adjusted charges. These improvements will come from our recent acquisitions, organic growth, continued reinvestment in our operations, new product introductions, cost savings and the expected benefits from the Lawn and Garden Segment restructuring initiatives.

Conference Call Details

The Company will host an earnings conference call and webcast for investors and analysts on Thursday, July 18, 2013 at 10:00 a.m. ET. The call is anticipated to last approximately one hour and may be accessed at (877) 407-8033. Callers are asked to sign on at least five minutes in advance. The call will be available as a webcast through the Company's web site, www.myersindustries.com.Click on the Investor Relations tab to access the webcast. Webcast attendees will be in a listen-only mode. An archived replay of the call will also be available on the site shortly after the event. To listen to a telephone replay, callers should dial: (US) 877-660-6853 or (Int'l) 201-612-7415. The replay passcode is Conference ID #417438.

About Myers Industries

Myers Industries, Inc. is an international manufacturer of polymer products for industrial, agricultural, automotive, commercial, and consumer markets. The Company is also the largest wholesale distributor of tools, equipment and supplies for the tire, wheel and undervehicle service industry in the U.S. Visit www.myersindustries.com to learn more.

Caution on Forward-Looking Statements

Statements in this release may include “forward-looking” statements within the meaning of the Private Securities Litigation Reform Act of 1995. Any statement that is not of historical fact may be deemed “forward-looking”. Words such as “expect”, “believe”, “project”, “plan”, “anticipate”, “intend”, “objective”, “goal”, “view”, and similar expressions identify forward-looking statements. These statements are based on management's current views and assumptions of future events and financial performance and involve a number of risks and uncertainties, many outside of the Company's control that could cause actual results to materially differ from those expressed or implied. Risks and uncertainties include: changes in the markets for the Company's business segments; changes in trends and demands in the markets in which the Company competes; unanticipated downturn in business relationships with customers or their purchases; competitive pressures on sales and pricing; raw material availability, increases in raw material costs, or other production costs; future economic and financial conditions in the United States and around the world; ability to weather the current economic downturn; inability of the Company to meet future capital requirements; claims, litigation and regulatory actions against the Company; changes in laws and regulations affecting the Company; the Company's ability to execute the components of its Strategic Business Evolution process; and other risks as detailed in the Company's 10-K and other reports filed with the Securities and Exchange Commission. Such reports are available on the Securities and Exchange Commission's public reference facilities and its web site at http://www.sec.gov , and on the Company's Investor Relations section of its web site at http://www.myersindustries.com. Myers Industries undertakes no obligation to publicly update or revise any forward-looking statements contained herein. These statements speak only as of the date made.

 
MYERS INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
FOR THE QUARTER AND SIX MONTHS ENDED JUNE 30, 2013 AND 2012
(Dollars in thousands, except share data)
       
For the Quarter Ended For the Six Months Ended
June 30, 2013 June 30, 2012 June 30, 2013 June 30, 2012
 
Net sales $ 204,024 $ 181,101 $ 419,004 $ 379,890
Cost of sales 148,255   133,737   304,917   274,528
Gross profit 55,769 47,364 114,087 105,362
Selling, general and administrative expenses 42,650   37,372   87,724   78,253
Operating income 13,119 9,992 26,363 27,109
Interest expense, net 1,116   1,054   2,208   2,135
Income before income taxes 12,003 8,938 24,155 24,974
Income tax expense 3,691   3,280   7,960   9,331
Net income $ 8,312   $ 5,658   $ 16,195   $ 15,643
 
Income per common share:
Basic $ 0.25 $ 0.17 $ 0.48 $ 0.47
Diluted $ 0.25 $ 0.17 $ 0.48 $ 0.46
 
Weighted Average Common Shares Outstanding
Basic 33,559,398 33,595,637 33,529,004 33,525,444
Diluted 33,877,952 34,272,693 33,897,962 34,121,486
 
 
MYERS INDUSTRIES, INC.
SALES AND EARNINGS BY SEGMENT (UNAUDITED)
(Dollars in thousands)
           
Second Quarter Ended June 30, Six Months Ended June 30,
2013   2012   % Change 2013   2012   % Change
 
Net Sales
Material Handling $ 83,814 $ 60,260 39.1 % $ 163,803 $ 125,481 30.5 %
Lawn and Garden 40,889 42,482 (3.7 )% 101,252 101,666 (0.4 )%
Distribution 45,893 44,188 3.9 % 88,542 86,926 1.9 %
Engineered Products 37,608 38,642 (2.7 )% 74,564 75,869 (1.7 )%
Inter-company Sales (4,180 )   (4,471 )   --- (9,157 )   (10,052 )   ---
Total $ 204,024     $ 181,101     12.7 % $ 419,004     $ 379,890     10.3 %
 
 
Income (Loss)
Before Income Taxes
Material Handling $ 11,010 $ 9,223 19.4 % $ 20,715 $ 22,373 (7.4 )%
Lawn and Garden (109 ) (1,942 ) --- 2,172 (724 ) ---
Distribution 3,864 4,298 (10.1 )% 6,703 7,809 (14.2 )%
Engineered Products 5,134 4,660 10.2 % 10,211 9,251 10.4 %
Corporate (7,896 )   (7,301 )   --- (15,646 )   (13,735 )   ---
Total $ 12,003     $ 8,938     34.3 % $ 24,155     $ 24,974     (3.3 )%
 
 
MYERS INDUSTRIES, INC.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
INCOME (LOSS) BEFORE TAXES BY SEGMENT (UNAUDITED)
(Dollars in millions, except per share data)
       
Quarter Ended Six Months Ended
June 30 June 30
2013 2012 2013 2012

Material Handling

Income before taxes as reported $ 11.0 $ 9.2 $ 20.7 $ 22.4
Restructuring expenses 0.0   0.0   0.2   0.0  
Income before taxes as adjusted 11.0 9.2 20.9 22.4
 

Lawn and Garden

Income (loss) before taxes as reported (0.1 ) (1.9 ) 2.2 (0.7 )
Restructuring expenses 0.7 0.4 1.1 0.4
Loss on disposal of assets 0.6   0.0   0.6   0.0  
Income before taxes as adjusted 1.2 (1.5 ) 3.9 (0.3 )
 

Distribution

Income before taxes as reported 3.9 4.3 6.7 7.8
Restructuring expenses 0.0 0.1 0.1 0.5
Gain on building sale 0.0   (0.3 ) 0.0   (0.3 )
Income before taxes as adjusted 3.9 4.1 6.8 8.0
 

Engineered Products

Income before taxes as reported 5.1 4.6 10.2 9.2
Restructuring expenses 0.0   0.1   0.0   0.2  
Income before taxes as adjusted 5.1 4.7 10.2 9.4
 

Corporate and interest expense

Income (loss) before taxes as reported (7.9 ) (7.3 ) (15.6 ) (13.7 )
Income (loss) before taxes as adjusted (7.9 ) (7.3 ) (15.6 ) (13.7 )
 

Consolidated

Income before taxes as reported 12.0 8.9 24.2 25.0
Restructuring expenses and other adjustments 1.4   0.3   2.0   0.8  
Income before taxes as adjusted 13.4 9.2 26.2 25.8
Income taxes 5.0   3.5   9.7   9.8  
Net Income as adjusted $ 8.4   $ 5.7   $ 16.5   $ 16.0  
 
Adjusted earnings per diluted share $ 0.25 $ 0.17 $ 0.49 $ 0.47
 
Note: Numbers in the Corporate and interest expense section above may be rounded for presentation purposes.
 

Note on Reconciliation of Income and Earnings Data: Income (loss) excluding the items mentioned above in the text of this release and in this reconciliation chart is a non-GAAP financial measure that Myers Industries, Inc. calculates according to the schedule above, using GAAP amounts from the unaudited Consolidated Financial Statements. The Company believes that the excluded items are not primarily related to core operational activities. The Company believes that income (loss) excluding items that are not primarily related to core operating activities is generally viewed as providing useful information regarding a company's operating profitability. Management uses income (loss) excluding these items as well as other financial measures in connection with its decision-making activities. Income (loss) excluding these items should not be considered in isolation or as a substitute for net income (loss), income (loss) before taxes or other consolidated income data prepared in accordance with GAAP. The Company's method for calculating income (loss) excluding these items may not be comparable to methods used by other companies.

 
MYERS INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (UNAUDITED)
(Dollars in thousands)
   
June 30, 2013

December 31, 2012

Assets
Current Assets
Cash $ 22,258 $ 3,948
Accounts receivable, net 108,518 115,508
Inventories 106,115 107,502
Other 12,023   12,638
Total Current Assets 248,914 239,596
Other Assets 91,802 94,777
Property, Plant, & Equipment, Net 142,255   150,483
Total Assets $ 482,971   $ 484,856
 
 
Liabilities & Shareholders' Equity
Current Liabilities
Accounts payable $ 64,717 $ 72,417
Accrued expenses 39,369   42,060
Total Current Liabilities 104,086 114,477
Long-term debt 95,988 92,814
Other liabilities 17,911 17,865
Deferred income taxes 29,966 29,678
Total Shareholders' Equity 235,020   230,022
Total Liabilities & Shareholders' Equity $ 482,971   $ 484,856
 
 
MYERS INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED)
FOR THE SIX MONTHS ENDED JUNE 30, 2013 AND 2012
(Dollars in thousands)
   
June 30, 2013 June 30, 2012
Cash Flows From Operating Activities
Net income $ 16,195 $ 15,643
 
Items not affecting use of cash
Depreciation 16,146 14,737
Loss on disposal of assets 616
Amortization of intangible assets 2,046 1,514
Non-cash stock compensation 1,532 1,556
Provision for (recovery of) loss on accounts receivable 496 (1,178 )
Deferred taxes 2,140 (18 )
Other long-term liabilities 334 785
Gain on sale of property, plant and equipment (558 )
Other 11 50
Cash flow provided by (used for) working capital, net of acquisitions:
Accounts receivable 5,216 10,384
Inventories (735 ) (12,285 )
Prepaid expenses (1,048 ) (3,743 )
Accounts payable and accrued expenses (12,812 ) (18,967 )
Net cash provided by operating activities 30,137   7,920  
 
Cash Flows From Investing Activities
Capital expenditures (10,216 ) (8,386 )
Acquisition of business, net of cash acquired (600 )
Proceeds from sale of property, plant and equipment 1,805
Other (11 ) (149 )
Net cash used for investing activities (10,827 ) (6,730 )
 
Cash Flows From Financing Activities
Repayment of long-term debt (305 )
Net borrowing on credit facility 3,173 28,374
Cash dividends paid (3,019 ) (4,967 )
Proceeds from issuance of common stock 3,262 2,822
Tax benefit from options 50
Repurchase of common stock (3,982 )  
Net cash (used for) provided by financing activities (516 ) 25,924  
 
Foreign Exchange Rate Effect on Cash (484 ) 1,697  
 
Net increase in cash 18,310 28,811
Cash at January 1 3,948   6,801  
Cash at June 30 $ 22,258   $ 35,612  
 

Myers Industries, Inc.
Gregg Branning, 330-761-6303
Senior Vice President & Chief Financial Officer
or
Monica Vinay, 330-761-6212
Director, Investor & Financial Relations

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