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Press release from Business Wire

Myers Industries Reports 2013 Third Quarter Results

<ul> <li class='bwlistitemmargb'> Third quarter diluted adjusted EPS up 25% compared to last year's third quarter </li> <li class='bwlistitemmargb'> Third consecutive quarter of year-over-year significant profit improvement by the Lawn and Garden Segment </li> <li class='bwlistitemmargb'> Strong operating cash flow generation </li> <li class='bwlistitemmargb'> Expect year-over-year adjusted EPS growth in the fourth quarter of 2013 </li> <li class='bwlistitemmargb'> Private placement note purchase agreement totaling $100 million signed in October </li> </ul>

Thursday, October 24, 2013

Myers Industries Reports 2013 Third Quarter Results

07:30 EDT Thursday, October 24, 2013

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

Summary

  Quarter Ended September 30,   Nine Months Ended September 30,
2013   2012  

% Increase
(Decrease)

2013   2012  

% Increase
(Decrease)

(Dollars in thousands, except per share data)
 
Net sales $ 194,920 $ 197,290 (1.2 )% $ 613,924 $ 577,180 6.4 %
Gross profit $ 53,639 $ 52,729 1.7 % $ 167,726 $ 158,091 6.1 %
Gross profit margin 27.5 % 26.7 % 27.3 % 27.4 %
Income before taxes $ 10,963 $ 8,578 27.8 % $ 35,118 $ 33,553 4.7 %
Net Income:
Income $ 6,488 $ 5,796 11.9 % $ 22,683 $ 21,441 5.8 %
Income per diluted share $ 0.19 $ 0.17 11.8 % $ 0.67 $ 0.63 6.3 %
 
 
Income before taxes as adjusted* $ 13,393 $ 10,997 21.8 % $ 39,640 $ 36,888 7.5 %
Net income as adjusted*:
Income $ 8,437 $ 6,780 24.4 % $ 24,973 $ 22,870 9.2 %
Income per diluted share $ 0.25 $ 0.20 25.0 % $ 0.73 $ 0.67 9.0 %
 

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

  • Net sales in the third quarter of 2013 were $194.9 million compared to $197.3 million in the third quarter of 2012.
  • The gross profit margin was 27.5% in the third quarter of 2013 compared to 26.7% in the third quarter of 2012. The increase was due mostly to cost savings that resulted from productivity improvements and material substitutions.
  • Net income per diluted share as adjusted increased 25% to $0.25 in the third quarter of 2013 compared to $0.20 in the third quarter of 2012, reflecting improved performance of the Lawn and Garden Segment and overall cost reductions.

President and Chief Executive Officer John C. Orr said, "Our continued focus on profit improvement delivered a 25% improvement in adjusted diluted earnings per share compared to the same quarter last year. Both the Lawn and Garden and Distribution Segments drove the increased profitability. The Lawn and Garden Segment's increase in profitability was due primarily to productivity, material substitution and savings from phase one of our restructuring project. We are very pleased with the progress of this segment over the last three quarters."

Orr continued, "Overall, sales were slightly below our third quarter expectation due to a poor tomato crop harvest impacting our Material Handling Segment's food processing sales, a delay in orders in our Lawn and Garden Segment to the fourth quarter and the focus on more profitable business in our Engineered Products Segment. However, sales year to date are up 6.4% compared to last year to date. We anticipate year-over-year sales growth in the fourth quarter helped by new product sales."

Segment Results

The results below are as adjusted and exclude restructuring and other unusual 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 third quarter of 2013 were $76.0 million compared to $76.2 million for the third quarter of 2012. A sales decrease driven by lower than anticipated food processing sales that resulted from a poor tomato crop season more than offset incremental sales resulting from the Jamco acquisition, which took place in October 2012. Material Handling's adjusted income before taxes was $10.7 million for the third quarter of 2013 compared to $12.5 million for the third quarter of 2012. The decrease in income before taxes was primarily due to the lower sales volume.

Net sales in the Lawn and Garden Segment for the third quarter of 2013 were $44.9 million compared to $45.3 million for the third quarter of 2012. A delay in customer orders for the upcoming season resulted in slightly lower sales. Lawn and Garden's adjusted income before taxes for the third quarter of 2013 was $2.5 million compared to break-even income before taxes in the third quarter of 2012. Productivity improvements and raw material substitution cost savings coupled with savings from phase one of our previously announced restructuring project led to the significant improvement in adjusted income before taxes year-over-year.

Net sales in the Distribution Segment were $45.0 million for the third quarter of 2013 compared to $45.1 million for the third quarter of 2012. Distribution's adjusted income before taxes was $4.3 million for the third quarter of 2013 compared to $3.4 million for the third quarter of 2012. A favorable product mix and lower selling, general and administrative expenses led to the increase in income before taxes year-over-year.

Net sales in the Engineered Products Segment were $33.8 million for the third quarter of 2013 compared to $35.7 million for the third quarter of 2012. The decline in sales year-over-year was due partially to lower custom sales as the segment continues to focus on more profitable customers and products. Engineered Products' adjusted income before taxes was $3.5 million for the third quarter of 2013 compared to $3.7 million for the third quarter of 2012. The decreased income from the lower sales was substantially offset by raw material cost savings and productivity improvements.

Other Financial Items

For the nine months ended September 30, 2013, cash flow provided by operations was $46.8 million compared to $23.3 million in the nine months ended September 30, 2012, reflecting efforts to better manage working capital.

Capital expenditures totaled $20.0 million for the nine months ended September 30, 2013 and are forecasted to be approximately $35 million for the full year of 2013.

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 institutional investors. The proceeds will be used to grow key businesses and repay existing debt.

Q4 Outlook

The Company anticipates that fourth quarter results will reflect year-over-year improvement in both sales and adjusted earnings excluding restructuring and other unusual pre-tax charges. Sales of new products, productivity gains, cost savings and the forecasted benefits from the Lawn and Garden Segment restructuring initiatives are expected to produce most of the improvements.

Conference Call Details

The Company will host an earnings conference call and webcast for investors and analysts on Thursday, October 24, 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 #100633.

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 under vehicle 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 NINE MONTHS ENDED SEPTEMBER 30, 2013 AND 2012
(Dollars in thousands, except share data)
       
For the Quarter Ended For the Nine Months Ended

September 30,
2013

September 30,
2012

September 30,
2013

September 30,
2012

 
Net sales $ 194,920 $ 197,290 $ 613,924 $ 577,180
Cost of sales 141,281   144,561   446,198   419,089
Gross profit 53,639 52,729 167,726 158,091
Selling, general and administrative expenses 41,564   42,957   129,288   121,210
Operating income 12,075 9,772 38,438 36,881
Interest expense, net 1,112   1,194   3,320   3,328
Income before income taxes 10,963 8,578 35,118 33,553
Income tax expense 4,475   2,782   12,435   12,112
Net income $ 6,488   $ 5,796   $ 22,683   $ 21,441
 
Income per common share:
Basic $ 0.19 $ 0.17 $ 0.68 $ 0.64
Diluted $ 0.19 $ 0.17 $ 0.67 $ 0.63
 
Weighted Average Common Shares Outstanding
Basic 33,670,639 33,746,824 33,574,801 33,592,984
Diluted 34,208,809 34,411,654 33,991,021 34,256,453
 
MYERS INDUSTRIES, INC.
SALES AND EARNINGS BY SEGMENT (UNAUDITED)
(Dollars in thousands)
           
Quarter Ended September 30, Nine Months Ended September 30,
2013   2012   % Change 2013   2012   % Change
 
Net Sales
Material Handling $ 75,965 $ 76,151 (0.2 )% $ 239,768 $ 201,632 18.9 %
Lawn and Garden 44,905 45,341 (1.0 )% 146,157 147,008 (0.6 )%
Distribution 45,006 45,065 (0.1 )% 133,548 131,991 1.2 %
Engineered Products 33,839 35,709 (5.2 )% 108,403 111,578 (2.8 )%
Inter-company Sales (4,795 )   (4,976 )   --- (13,952 )   (15,029 )   ---
Total $ 194,920     $ 197,290     (1.2 )% $ 613,924     $ 577,180     6.4 %
 
 
Income (Loss)
Before Income Taxes
Material Handling $ 10,679 $ 12,530 (14.8 )% $ 31,394 $ 34,903 (10.1 )%
Lawn and Garden 93 41

126.8

%

2,265 (683 ) ---
Distribution 4,290 3,343 28.3 % 10,993 11,152 (1.4 )%
Engineered Products 3,502 2,921 19.9 % 13,713 12,172 12.7 %
Corporate (7,601 )   (10,257 )   --- (23,247 )   (23,991 )   ---
Total $ 10,963     $ 8,578     27.8 % $ 35,118     $ 33,553     4.7 %
 
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 Nine Months Ended
September 30 September 30
2013 2012 2013 2012

Material Handling

Income before taxes as reported $ 10.7 $ 12.5 $ 31.4 $ 34.9
Restructuring expenses 0.0   0.0   0.2   0.0  
Income before taxes as adjusted 10.7 12.5 31.6 34.9
 

Lawn and Garden

Income (loss) before taxes as reported 0.1 0.0 2.3 (0.7

)

Restructuring expenses and other adjustments 1.1 0.0 2.3 0.5
Loss on disposal of assets 0.0 0.0 0.6 0.0
Depreciation recapture 1.3   0.0   1.3   0.0  
Income (loss) before taxes as adjusted 2.5 0.0 6.5 (0.2

)

 

Distribution

Income before taxes as reported 4.3 3.3 11.0 11.2
Restructuring expenses 0.0 0.2 0.1 0.7
Gain on building sale 0.0   (0.1 ) 0.0   (0.4

)

Income before taxes as adjusted 4.3 3.4 11.1 11.5
 

Engineered Products

Income before taxes as reported 3.5 2.9 13.7 12.2
Restructuring expenses 0.0   0.8   0.0   1.0  
Income before taxes as adjusted 3.5 3.7 13.7 13.2
 

Corporate and interest expense

Income (loss) before taxes as reported (7.6 ) (10.1 ) (23.3 ) (24.0

)

Severance and other 0.0   1.5   0.0   1.5  
Income (loss) before taxes as adjusted (7.6 ) (8.6 ) (23.3 ) (22.5

)

 

Consolidated

Income before taxes as reported 11.0 8.6 35.1 33.6
Restructuring expenses and other adjustments 2.4   2.4   4.5   3.3  
Income before taxes as adjusted 13.4 11.0 39.6 36.9
Income taxes 5.0   4.2   14.6   14.0  
Net Income as adjusted $ 8.4   $ 6.8   $ 25.0   $ 22.9  
 
Adjusted earnings per diluted share $ 0.25 $ 0.20 $ 0.73 $ 0.67
 
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)
   

September 30,
2013

December 31,
2012

Assets
Current Assets
Cash $ 7,004 $ 3,948
Accounts receivable, net 108,279 115,508
Inventories 117,920 107,502
Other 11,564   12,638
Total Current Assets 244,767 239,596
Other Assets 86,892 94,777
Property, Plant, & Equipment, Net 147,745   150,483
Total Assets $ 479,404   $ 484,856
 
 
Liabilities & Shareholders' Equity
Current Liabilities
Accounts payable $ 69,578 $ 72,417
Accrued expenses 44,624   42,060
Total Current Liabilities 114,202 114,477
Long-term debt 75,490 92,814
Other liabilities 17,537 17,865
Deferred income taxes 31,920 29,678
Total Shareholders' Equity 240,255   230,022
Total Liabilities & Shareholders' Equity $ 479,404   $ 484,856
 
MYERS INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED)
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2013 AND 2012
(Dollars in thousands)
   

September 30, 2013

September 30, 2012
Cash Flows From Operating Activities
Net income $ 22,683 $ 21,441
 
Items not affecting use of cash
Depreciation 25,661 22,287
Amortization of intangible assets 2,953 2,331
Non-cash stock compensation 2,142 2,134
Provision for (recovery of) loss on accounts receivable 698 (1,019 )
Deferred taxes 4,069 428
Other long-term liabilities 38 2,037
Loss (gain) from asset disposition 584 (628 )
Other 202 50
Cash flow provided by (used for) working capital, net of acquisitions:
Accounts receivable 3,908 664
Inventories (12,443 ) (18,611 )
Prepaid expenses (1,509 ) (2,563 )
Accounts payable and accrued expenses (2,143 ) (4,877 )
Net cash provided by operating activities 46,843   23,341  
 
Cash Flows From Investing Activities
Capital expenditures (20,003 ) (15,236 )
Acquisition of business, net of cash acquired (600 ) (3,430 )
Proceeds from sale of property, plant and equipment 928 1,975
Other (64 ) 100  
Net cash used for investing activities (19,739 ) (16,591 )
 
Cash Flows From Financing Activities
Repayment of long-term debt (26,333 )
Net (repayments of) borrowing on credit facility (17,324 ) 20,410
Cash dividends paid (6,046 ) (7,642 )
Proceeds from issuance of common stock 5,765 3,026
Tax benefit from options 167
Repurchase of common stock (5,955 )  
Net cash used for financing activities (23,393 ) (10,539 )
 
Foreign Exchange Rate Effect on Cash (655 ) 3,456  
 
Net increase (decrease) in cash 3,056 (333 )
Cash at January 1 3,948   6,801  
Cash at September 30 $ 7,004   $ 6,468  

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

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