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8-K - FORM 8-K - MYERS INDUSTRIES INCd677775d8k.htm
EX-99.3 - EX-99.3 - MYERS INDUSTRIES INCd677775dex993.htm
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EX-99.2 - EX-99.2 - MYERS INDUSTRIES INCd677775dex992.htm

Exhibit 99.1

 

LOGO    News Release

NYSE: MYE

Contact(s):

Gregg Branning, Senior Vice President

& Chief Financial Officer (330) 761-6303

Monica Vinay, Vice President, Investor

Relations & Treasurer (330) 761-6212

Myers Industries Reports 2013 Full Year and Fourth Quarter Results

 

    Full year net sales increased 4.3% to $825 million

 

    Full year net income as adjusted increased 6.1% to $34 million

 

    Full year diluted adjusted EPS increased 6.4% to $1.00

 

    Full year free cash flow increased 95% to $66 million

 

    Increasing quarterly dividend 44% from $0.09 to $0.13 per share

 

    Returning $40 million of cash to shareholders through repurchases of common stock in 2014

February 20, 2014, Akron, Ohio - Myers Industries, Inc. (NYSE: MYE) today announced results for the full year and fourth quarter ended December 31, 2013.

Summary

 

     Quarter Ended December 31,     Twelve Months Ended December 31,  
     2013     2012     % Increase
(Decrease)
    2013     2012     % Increase
(Decrease)
 
     (Dollars in thousands, except per share data)  

Net sales

   $ 211,286      $ 214,008        (1.3)   $ 825,210      $ 791,188        4.3

Gross profit

   $ 49,902      $ 57,190        (12.7)   $ 217,628      $ 215,281        1.1

Gross profit margin

     23.6     26.7       26.4     27.2  

Income before taxes

   $ 4,273      $ 13,788        (69.0)   $ 39,391      $ 47,341        (16.8)

Net Income:

      

Income

   $ 3,319      $ 8,521        (61.0)   $ 26,002      $ 29,962        (13.2)

Income per diluted share

   $ 0.10      $ 0.25        (60.0)   $ 0.76      $ 0.88        (13.6)

Gross profit as adjusted*

   $ 58,005      $ 57,261        1.3   $ 228,819      $ 216,402        5.7

Gross profit margin as adjusted*

     27.5     26.8       27.7     27.4  

Income before taxes as adjusted*

   $ 13,665      $ 14,126        (3.3)   $ 53,305      $ 51,014        4.5

Net income as adjusted*:

      

Income

   $ 8,751      $ 8,899        (1.7)   $ 34,115      $ 32,139        6.1

Income per diluted share

   $ 0.26      $ 0.26        —     $ 1.00      $ 0.94        6.4

 

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

 

    Net sales for the fourth quarter of 2013 were $211.3 million compared to $214.0 million for the fourth quarter of 2012.

 

    The gross profit margin as adjusted was 27.5% for the fourth quarter of 2013 compared to 26.8% for the fourth quarter of 2012.


    Net income per diluted share as adjusted was $0.26 for the fourth quarter of 2013 and the fourth quarter of 2012.

 

    Net sales for the full year of 2013 were $825.2 million compared to $791.2 million for the full year of 2012.

 

    The gross profit margin as adjusted was 27.7% for the full year of 2013 compared to 27.4% for the full year of 2012.

 

    Net income per diluted share as adjusted increased 6.4% to $1.00 for the full year of 2013 compared to $0.94 for the full year of 2012.

President and Chief Executive Officer John C. Orr said, “We are pleased with the consistent financial improvement of the Company in 2013. Although we saw less strength in the fourth quarter results due to softer sales volumes and transportation difficulties, our full year results showed a 6.4% improvement in diluted adjusted earnings per share. Our restructuring of our Lawn and Garden Segment, the strong contribution of our recent acquisitions of Novel and Jamco, new product introductions and productivity gains were the key ingredients to improvement. In addition, we delivered a strong 95% increase in free cash flow year-over-year. Inventory management, strong collections and terms management were the consistent focus in 2013.”

“We continue to use a balanced approach to capital allocation. We continue to invest in new products and end markets that will improve shareholder value. As we announced this morning, we are returning value to shareholders who continue to hold our stock. The Board of Directors has approved a $40 million share repurchase which is expected to be completed in 2014. In addition, the quarterly dividend will be increased 44% to $0.13 per share. These combined actions reflect our positive outlook for our business and strong cash flow generation.”

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 full year of 2013 were $322.9 million compared to $286.0 million for the full year of 2012. Most of the increase in sales was due to the acquisitions of Novel and Jamco which took place in July and October of 2012, respectively. Material Handling’s adjusted income before taxes was $41.3 million for the full year of 2013 compared to $47.7 million for the full year of 2012. The decline was due to a change in both customer and product mix.

The Material Handling’s net sales for the fourth quarter of 2013 were $83.1 million compared to $84.4 million for the fourth quarter of 2012. The fourth quarter of 2012 benefited from some sizeable non-recurring project sales. Material Handling’s adjusted income before taxes was $9.7 million for the fourth quarter of 2013 compared to $12.8 million for the fourth quarter of 2012. The decrease in adjusted income before taxes was mostly the result of higher selling, general and administrative expenses due to increased royalty, information technology upgrades and employee related expenses. Customer and product mix also contributed to the year-over-year decrease.

Net sales in the Lawn and Garden Segment for the full year of 2013 were $204.9 million compared to $205.8 million for the full year of 2012. Lawn and Garden’s adjusted income before taxes for the full year of 2013 increased 237% to $11.8 million from $3.5 million for the full year of 2012. The significant year-over-year improvement reflected savings from phase one of our restructuring project, additional cost reductions resulting from productivity and raw material cost savings and new product introductions.

The Lawn and Garden Segment net sales for the fourth quarter of 2013 were $58.7 million compared to $58.8 million for the fourth quarter of 2012. Lawn and Garden’s adjusted income before taxes for the fourth quarter of 2013 increased 39% to $5.3 million from $3.8 million for the fourth quarter of 2012, due to savings from the restructuring project, productivity improvements and raw material cost savings.

Net sales in the Distribution Segment for the full year of 2013 were $177.4 million compared to $176.6 million for the full year of 2012. Sales of new products and market share gains in equipment sales led to the increase in sales year over year. Distribution’s adjusted income before taxes for the full year of 2013 was $14.6 million compared to $14.7 million for the full year of 2012.

The Distribution Segment’s net sales for the fourth quarter of 2013 were $43.9 million compared to $44.7 million for the fourth quarter of 2012. Softer demand from international customers more than offset increased new product sales domestically. Distribution’s adjusted income before taxes for the fourth quarter of 2013 was $3.6 million compared to $3.2 million for the fourth quarter of 2012. Lower selling, general and administrative expenses, due partially to headcount reductions, contributed to the increase in adjusted income before taxes year-over-year.


On January 30, 2014, the Company announced it would be closing the Distribution Segment’s Canadian distribution branches. In 2013, sales from those branches were approximately $7.5 million and profitability was negligible.

Net sales in the Engineered Products Segment for the full year of 2013 were $137.7 million compared to $141.7 million for the full year of 2012. Strong sales in the marine and recreational vehicle markets were more than offset by decreased sales of custom products as compared to 2012, partially due to a strategic focus on more profitable business within the segment. Engineered Products’ adjusted income before taxes for the full year of 2013 was $15.5 million compared to $15.7 million for the full year of 2012.

The Engineered Products Segment net sales for the fourth quarter of 2013 were $29.3 million compared to $30.1 million for the fourth quarter of 2012. Engineered Products’ adjusted income before taxes for the fourth quarter of 2013 was $1.8 million compared to $2.4 million for the fourth quarter of 2012.

Other Financial Items

For the year ended December 31, 2013, free cash flow increased 95% to $66.1 million compared to $33.8 million for the year ended December 31, 2012. The significant improvement reflected successful initiatives put in place to better manage working capital.

Capital expenditures totaled $30.0 million for the year ended December 31, 2013 and are forecasted to be approximately $35 million to $40 million in 2014.

During the fourth quarter of 2013, the Company amended its loan agreement. The new agreement provides for a $200 million senior revolving credit facility, which replaced the existing $180 million facility.

The Company announced today that it is raising its quarterly dividend 44% to $0.13 per share.

The Company purchased $8.1 million of common stock in the year ended December 31, 2013.

The Company also announced today that the board of directors has authorized additional share repurchases of $40 million of common stock with expectations for the share repurchases to be completed in 2014.

2014 Outlook

“The first quarter of 2014 will be impacted by weather and transportation challenges. However, we anticipate that our full year 2014 results will show another consistent year of profit improvement and increased shareholder value. New product introductions, margin improvement through productivity gains such as phase two of the Lawn and Garden Segment project, material substitutions and elimination of low margin business and reliable cash flow generation are all expected to deliver continued consistent improved results.” Orr said.

Conference Call Details

The Company will host an earnings conference call and webcast for investors and analysts on Thursday, February 20, 2014 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. A live and archived webcast of the conference call can be accessed from the Investor Relations section of the Company’s website at www.myersindustries.com. Click on the Investor Relations tab to access the webcast. Webcast attendees will be in a listen-only mode. An archived telephone replay of the call will also be available on the site shortly after the event. To listen to the telephone replay, callers should dial: (US) 877-660-6853 or (Int’l) 201-612-7415. The replay passcode is Conference ID #13575688.

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 TWELVE MONTHS ENDED DECEMBER 31, 2013 AND 2012

(Dollars in thousands, except share data)

 

     For the Quarter Ended      For the Twelve Months Ended  
     December 31,
2013
     December 31,
2012
     December 31,
2013
     December 31,
2012
 

Net sales

   $ 211,286       $ 214,008       $ 825,210       $ 791,188   

Cost of sales

     161,384         156,818         607,582         575,907   
  

 

 

    

 

 

    

 

 

    

 

 

 

Gross profit

     49,902         57,190         217,628         215,281   

Selling, general and administrative expenses

     44,407         42,215         173,695         163,425   
  

 

 

    

 

 

    

 

 

    

 

 

 

Operating income

     5,495         14,975         43,933         51,856   

Interest expense, net

     1,222         1,187         4,542         4,515   
  

 

 

    

 

 

    

 

 

    

 

 

 

Income before income taxes

     4,273         13,788         39,391         47,341   

Income tax expense

     954         5,267         13,389         17,379   
  

 

 

    

 

 

    

 

 

    

 

 

 

Net income

   $ 3,319       $ 8,521       $ 26,002       $ 29,962   
  

 

 

    

 

 

    

 

 

    

 

 

 

Income per common share:

           

Basic

   $ 0.10       $ 0.25       $ 0.77       $ 0.89   

Diluted

   $ 0.10       $ 0.25       $ 0.76       $ 0.88   

Weighted Average Common Shares Outstanding

           

Basic

     33,656,673         33,646,031         33,588,720         33,597,020   

Diluted

     34,204,594         34,119,301         34,043,425         34,109,232   


MYERS INDUSTRIES, INC.

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

CONDENSED CONSOLIDATED GROSS PROFIT (UNAUDITED)

(Dollars in thousands)

 

     Quarter Ended
December 31
     Twelve Months Ended
December 31
 
     2013      2012      2013      2012  

Gross Profit as reported

   $ 49,902       $ 57,190       $ 217,628       $ 215,281   

Restructuring and other adjustments in cost of sales

           

Material Handling Segment

     —           —           178         —     

Lawn & Garden Segment

     8,050         —           10,957         —     

Engineered Products Segment

     53         71         56         1,121   
  

 

 

    

 

 

    

 

 

    

 

 

 

Gross Profit as adjusted

   $ 58,005       $ 57,261       $ 228,819       $ 216,402   
  

 

 

    

 

 

    

 

 

    

 

 

 

Note on Reconciliation of Income and Earnings Data: Gross profit 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 gross profit 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 gross profit excluding these items as well as other financial measures in connection with its decision-making activities. Gross profit excluding these items should not be considered in isolation or as a substitute for gross profit prepared in accordance with GAAP. The Company’s method for calculating gross profit excluding these items may not be comparable to methods used by other companies.


MYERS INDUSTRIES, INC.

SALES AND EARNINGS BY SEGMENT (UNAUDITED)

(Dollars in thousands)

 

     Quarter Ended December 31,     Twelve Months Ended December 31,  
     2013     2012     % Change     2013     2012     % Change  

Net Sales

            

Material Handling

   $ 83,086      $ 84,362        (1.5 )%    $ 322,854      $ 285,994        12.9

Lawn and Garden

     58,733        58,806        (0.1 )%      204,890        205,814        (0.4 )% 

Distribution

     43,864        44,654        (1.8 )%      177,412        176,645        0.4

Engineered Products

     29,342        30,080        (2.5 )%      137,745        141,658        (2.8 )% 

Inter-company Sales

     (3,739     (3,894       (17,691     (18,923  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total

   $ 211,286      $ 214,008        (1.3 )%    $ 825,210      $ 791,188        4.3
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income (Loss)

            

Before Income Taxes

            

Material Handling

   $ 9,682      $ 12,580        (23.0 )%    $ 41,076      $ 47,483        (13.5 )% 

Lawn and Garden

     (3,805     3,588        (206.0 )%      (1,540     2,905        (153.0 )% 

Distribution

     3,455        3,686        (6.3 )%      14,448        14,838        (2.6 )% 

Engineered Products

     1,583        2,309        (31.4 )%      15,296        14,481        5.6

Corporate

     (6,642     (8,375       (29,889     (32,366  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total

   $ 4,273      $ 13,788        (69.0 )%    $ 39,391      $ 47,341        (16.8 )% 
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 


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
December 31
    Twelve Months Ended
December 31
 
     2013     2012     2013     2012  

Material Handling

        

Income before taxes as reported

   $ 9.7      $ 12.6      $ 41.1      $ 47.5   

Restructuring expenses

     0.0        0.2        0.2        0.2   
  

 

 

   

 

 

   

 

 

   

 

 

 

Income before taxes as adjusted

     9.7        12.8        41.3        47.7   

Lawn and Garden

        

Income (loss) before taxes as reported

     (3.8     3.6        (1.5     2.9   

Restructuring expenses and other adjustments

     9.1        0.2        11.4        0.6   

Loss on disposal of assets

     0.0        0.0        0.6        0.0   

Depreciation recapture

     0.0        0.0        1.3        0.0   
  

 

 

   

 

 

   

 

 

   

 

 

 

Income before taxes as adjusted

     5.3        3.8        11.8        3.5   

Distribution

        

Income before taxes as reported

     3.5        3.7        14.4        14.8   

Restructuring expenses

     0.1        0.0        0.2        0.7   

Gain on building sale

     0.0        (0.5     0.0        (0.8
  

 

 

   

 

 

   

 

 

   

 

 

 

Income before taxes as adjusted

     3.6        3.2        14.6        14.7   

Engineered Products

        

Income before taxes as reported

     1.6        2.3        15.3        14.5   

Restructuring expenses

     0.2        0.1        0.2        1.2   
  

 

 

   

 

 

   

 

 

   

 

 

 

Income before taxes as adjusted

     1.8        2.4        15.5        15.7   

Corporate and interest expense

        

Income (loss) before taxes as reported

     (6.7     (8.4     (29.9     (32.4

Severance and other

     0.0        0.3        0.0        1.8   
  

 

 

   

 

 

   

 

 

   

 

 

 

Loss before taxes as adjusted

     (6.7     (8.1     (29.9     (30.6

Consolidated

        

Income before taxes as reported

     4.3        13.8        39.4        47.3   

Restructuring expenses and other adjustments

     9.4        0.3        13.9        3.7   
  

 

 

   

 

 

   

 

 

   

 

 

 

Income before taxes as adjusted

     13.7        14.1        53.3        51.0   

Income taxes

     4.9        5.2        19.2        18.9   
  

 

 

   

 

 

   

 

 

   

 

 

 

Net Income as adjusted

   $ 8.8      $ 8.9      $ 34.1      $ 32.1   
  

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted earnings per diluted share

   $ 0.26      $ 0.26      $ 1.00      $ 0.94   

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)

 

     December 31,
2013
     December 31,
2012
 

Assets

     

Current Assets

     

Cash

   $ 6,539       $ 3,948   

Accounts receivable, net

     112,459         115,508   

Inventories

     106,524         107,502   

Other

     9,388         12,638   
  

 

 

    

 

 

 

Total Current Assets

     234,910         239,596   

Other Assets

     85,069         94,777   

Property, Plant, & Equipment, Net

     149,478         150,483   
  

 

 

    

 

 

 

Total Assets

   $ 469,457       $ 484,856   
  

 

 

    

 

 

 

Liabilities & Shareholders’ Equity

     

Current Liabilities

     

Accounts payable

   $ 98,263       $ 72,417   

Accrued expenses

     52,320         42,060   
  

 

 

    

 

 

 

Total Current Liabilities

     150,583         114,477   

Long-term debt

     44,347         92,814   

Other liabilities

     14,687         17,865   

Deferred income taxes

     24,333         29,678   

Total Shareholders’ Equity

     235,507         230,022   
  

 

 

    

 

 

 

Total Liabilities & Shareholders’ Equity

   $ 469,457       $ 484,856   
  

 

 

    

 

 

 


MYERS INDUSTRIES, INC.

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED)

FOR THE TWELVE MONTHS ENDED DECEMBER 31, 2013 AND 2012

(Dollars in thousands)

 

     December 31,
2013
    December 31,
2012
 

Cash Flows From Operating Activities

    

Net income

   $ 26,002      $ 29,962   

Items not affecting use of cash

    

Depreciation

     33,709        29,667   

Amortization of intangible assets

     3,563        3,052   

Amortization of deferred financing costs

     373        288   

Non-cash stock compensation

     2,557        2,708   

Provision for (recovery of) loss on accounts receivable

     1,098        (543

Deferred taxes

     (3,934     1,052   

Other long-term liabilities

     709        4,057   

Loss (gain) from asset disposition

     749        (1,085

Tax benefit from options

     (389     —     

Cancellation and terminations of share grants

     —          253   

Other

     202        50   

Payments for long-term incentive compensation

     (1,719     (333

Cash flow provided by (used for) working capital, net of acquisitions:

    

Accounts receivable

     (716     (2,002

Inventories

     (1,585     (2,780

Prepaid expenses

     581        (2,119

Accounts payable and accrued expenses

     34,868        (1,475
  

 

 

   

 

 

 

Net cash provided by operating activities

     96,068        60,752   
  

 

 

   

 

 

 

Cash Flows From Investing Activities

    

Capital expenditures

     (30,001     (26,977

Acquisition of business, net of cash acquired

     (600     (18,543

Proceeds from sale of property, plant and equipment

     933        3,086   

Other

     (273     (50
  

 

 

   

 

 

 

Net cash used for investing activities

     (29,941     (42,484
  

 

 

   

 

 

 

Cash Flows From Financing Activities

    

Proceeds from long-term debt

     11,000        —     

Repayment of long-term debt

     (35,000     (27,258

Net (repayments of) borrowing on credit facility

     (24,492     17,700   

Cash dividends paid

     (9,103     (13,006

Proceeds from issuance of common stock

     5,806        3,122   

Tax benefit from options

     389        —     

Cancellations and terminations of share grants

     —          (253

Repurchase of common stock

     (8,096     (4,204

Shares withheld for employee taxes on equity awards

     (684     —     

Deferred financing costs

     (608     —     
  

 

 

   

 

 

 

Net cash used for financing activities

     (60,788     (23,899
  

 

 

   

 

 

 

Foreign Exchange Rate Effect on Cash

     (2,748     2,778   
  

 

 

   

 

 

 

Net increase (decrease) in cash

     2,591        (2,853

Cash at January 1

     3,948        6,801   
  

 

 

   

 

 

 

Cash at December 31

   $ 6,539      $ 3,948