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Exhibit 99.1

 

 

LOGO

Myers Industries Reports 2017 Third Quarter Results

Increased demand and operational improvements drive strong growth; Company raises full-year outlook

November 7, 2017, Akron, Ohio - Myers Industries, Inc. (NYSE: MYE) today announced results for the third quarter ended September 30, 2017.

Third Quarter 2017 Business Highlights

 

    Net sales increased 8.6% (or 8.1% excluding currency fluctuation) compared to the third quarter of 2016

 

    Gross profit margin of 28.3% compared to 27.1% in the third quarter of 2016

 

    GAAP net income per diluted share from continuing operations of $0.11, compared to $0.01 in the third quarter of 2016

 

    Adjusted net income per diluted share from continuing operations of $0.11, compared to $0.04 in the third quarter of 2016

 

    Generated cash from continuing operations of $12.5 million and free cash flow of $9.7 million

 

    Company raises full-year net sales outlook to low single-digit growth vs. previous outlook of flat sales year-over-year

The Company reported net sales of $144.1 million, compared to $132.7 million in the third quarter of 2016. Gross profit margin increased 120 basis points to 28.3% as compared to the prior year quarter, primarily due to the higher sales volume and favorable sales mix, partially offset by restructuring expenses and higher material costs in the Material Handling Segment. Excluding restructuring expenses, gross profit margin increased 250 basis points to 29.6% as compared to the prior year quarter. Selling, general and administrative expenses increased by $3.8 million to $36.4 million, in the third quarter of 2017, with the increase in expenses primarily attributable to higher incentive compensation costs.

President and Chief Executive Officer Dave Banyard commented, “We are very pleased with the progress we are making towards transforming Myers Industries. Our third-quarter results continue to demonstrate the improved cash flow generation potential of our business. Strong revenue growth in the quarter was driven by improved demand in our food and beverage end market, as well as increased sales of fuel cans in our consumer market associated with the recent hurricane season. Lean initiatives implemented over the prior year resulted in operating margin expansion and stronger cash flow during the quarter, and we are pleased with our free cash flow of $31.0 million year-to-date as compared to $7.1 million last year. We will continue to pursue opportunities to grow our business in targeted niche markets, and we are well positioned for sustained improvements in long-term financial and operating performance.”

 

     Quarter Ended September 30,     Nine Months Ended September 30,  
     2017     2016     % Increase
(Decrease)
    2017     2016     % Increase
(Decrease)
 
     (Dollars in thousands, except per share data)                    

Net sales

   $ 144,075     $ 132,676       8.6   $ 428,081     $ 427,998       0.0

Gross profit

   $ 40,739     $ 35,918       13.4   $ 122,025     $ 128,625       (5.1 )% 

Gross profit margin

     28.3     27.1       28.5     30.1  

Operating income

   $ 7,111     $ 2,986       138.1   $ 20,049     $ 15,281       31.2

Income from continuing operations:

            

Income (loss)

   $ 3,276     $ 424       —       $ 8,416     $ 2,772       203.6

Income (loss) per diluted share

   $ 0.11     $ 0.01       —       $ 0.28     $ 0.09       211.1

Operating income as adjusted(1)

   $ 6,998     $ 3,883       80.2   $ 24,990     $ 27,278       (8.4 )% 

Income from continuing operations as adjusted(1):

            

Income (loss)

   $ 3,336     $ 1,195       179.3   $ 12,445     $ 13,563       (8.2 )% 

Income (loss) per diluted share

   $ 0.11     $ 0.04       175.0   $ 0.41     $ 0.45       (8.9 )% 

 

(1) Details regarding the adjusted charges are provided on the Reconciliations of Non-GAAP Financial Measures included in this release.


Segment Results

Net sales in the Material Handling Segment increased 15.8% (or 15.1% excluding currency fluctuation) as compared to the third quarter of 2016. The increase in net sales was primarily due to increased volume in the Company’s food and beverage and consumer end markets. GAAP operating income was $10.3 million compared to $4.4 million in the third quarter of 2016. GAAP operating income in the third quarter of 2017 included a gain on the sale of an asset of $2.8M and restructuring and related charges of $2.3 million. Adjusted operating income was $9.9 million compared to $4.7 million in the third quarter of 2016. The increase in adjusted operating income was primarily the result of higher sales volumes, price, and a favorable sales mix, partially offset by higher material and compensation costs.

Net sales in the Distribution Segment declined 6.5% as compared to the third quarter of 2016. The decrease in net sales was primarily the result of the Company’s planned exit from a low-margin custom product in the Patch Rubber business. Net sales in the Myers Tire Supply business were down 1.2% compared to prior year as the organization continues to improve sales force effectiveness. Operating income was $3.2 million compared to $3.3 million in the third quarter of 2016.

2017 Outlook

The Company has revised its fiscal year 2017 outlook. The Company now anticipates that total revenue will be up low single digits on a constant currency basis in 2017 as compared to the prior year due to continued strength in the food and beverage and consumer end markets. This compares to the Company’s previous expectations for flat sales compared to the prior year. Capital expenditures are now expected to be in the range of $7 to $9 million, net interest expense in the range of $7 to $8 million, depreciation and amortization in the range of $32 to $34 million, and an effective tax rate (normalized) of approximately 36%.

Conference Call Details

The Company will host an earnings conference call and webcast for investors and analysts on Tuesday, November 7, at 10:00 a.m. ET. The call is anticipated to last approximately one hour and may be accessed at: (US) 833-233-3452 or (Int’l) 647-689-4129. The Conference ID # is 7289448. Callers are asked to sign on at least five minutes in advance. The live 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 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) 800-585-8367 or (Int’l) 416-621-4642. The Conference ID # is 7289448.

Use of Non-GAAP Financial Measures

The Company uses certain non-GAAP measures in this release. Adjusted net income per diluted share from continuing operations, income from continuing operations as adjusted, adjusted income per diluted share from continuing operations, operating income as adjusted, adjusted operating income, adjusted EPS, adjusted EBITDA and free cash flow are non-GAAP financial measures and are intended to serve as a supplement to results provided in accordance with accounting principles generally accepted in the United States. Myers Industries believes that such information provides an additional measurement and consistent historical comparison of the Company’s performance. A reconciliation of the non-GAAP financial measures to the most directly comparable GAAP measures is available in this news release.

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 distributor of tools, equipment and supplies for the tire, wheel and under vehicle service industry in the United States. 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: raw material availability, increases in raw material costs, or other production costs; risks associated with our strategic growth initiatives or the failure to achieve the anticipated benefits of such initiatives; unanticipated downturn in business relationships with customers or their purchases; competitive pressures on sales and pricing; changes in the markets for the Company’s business segments; changes in trends and demands in the markets in which the Company competes; unexpected failures at our manufacturing facilities; future economic and financial conditions in the United States and around the world; 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; 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 website at www.sec.gov, and on the Company’s Investor Relations section of its website at

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.

Contact:

Monica Vinay

Vice President, Investor Relations & Treasurer

(330) 761-6212


MYERS INDUSTRIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

(Dollars in thousands, except share data)

 

     Quarter Ended     Nine Months Ended  
     September 30,
2017
    September 30,
2016
    September 30,
2017
    September 30,
2016
 

Net sales

   $ 144,075     $ 132,676     $ 428,081     $ 427,998  

Cost of sales

     103,336       96,758       306,056       299,373  
  

 

 

   

 

 

   

 

 

   

 

 

 

Gross profit

     40,739       35,918       122,025       128,625  

Selling, general and administrative expenses

     36,391       32,617       105,560       103,087  

(Gain) loss on fixed asset sales

     (2,763     315       (4,128     383  

Impairment charges

     —         —         544       9,874  
  

 

 

   

 

 

   

 

 

   

 

 

 

Operating income

     7,111       2,986       20,049       15,281  

Interest expense, net

     1,785       2,015       5,545       6,087  
  

 

 

   

 

 

   

 

 

   

 

 

 

Income (loss) from continuing operations before income taxes

     5,326       971       14,504       9,194  

Income tax expense (benefit)

     2,050       547       6,088       6,422  
  

 

 

   

 

 

   

 

 

   

 

 

 

Income (loss) from continuing operations

     3,276       424       8,416       2,772  

Income (loss) from discontinued operations, net of income taxes

     (19     (10     (52     (257
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income (loss)

   $ 3,257     $ 414     $ 8,364     $ 2,515  
  

 

 

   

 

 

   

 

 

   

 

 

 

Income (loss) per common share from continuing operations:

        

Basic

   $ 0.11     $ 0.01     $ 0.28     $ 0.09  

Diluted

   $ 0.11     $ 0.01     $ 0.28     $ 0.09  

Income (loss) per common share from discontinued operations:

        

Basic

   $ (0.00   $ (0.00   $ (0.00   $ (0.01

Diluted

   $ (0.00   $ (0.00   $ (0.00   $ (0.01

Net income (loss) per common share:

        

Basic

   $ 0.11     $ 0.01     $ 0.28     $ 0.08  

Diluted

   $ 0.11     $ 0.01     $ 0.28     $ 0.08  

Weighted average common shares outstanding:

        

Basic

     30,266,838       29,849,005       30,149,818       29,682,798  

Diluted

     30,651,943       30,075,478       30,524,161       29,949,711  


MYERS INDUSTRIES, INC.

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

CONSOLIDATED GROSS PROFIT (UNAUDITED)

(Dollars in thousands)

 

     Quarter Ended      Nine Months Ended  
     September 30,
2017
     September 30,
2016
     September 30,
2017
     September 30,
2016
 

Gross profit as reported

   $ 40,739      $ 35,918      $ 122,025      $ 128,625  

Restructuring expenses and other adjustments in cost of sales

           

Material Handling Segment

     1,879        —          7,077        —    

Distribution Segment

     —          —          —          —    
  

 

 

    

 

 

    

 

 

    

 

 

 

Gross profit as adjusted

   $ 42,618      $ 35,918      $ 129,102      $ 128,625  

Note on Reconciliation of Income and Earnings Data: Gross profit excluding the items above in the text of this presentation 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 Condensed Consolidated Statement of Operations. 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 September 30,     Nine Months Ended September 30,  
     2017     2016     % Change     2017     2016     % Change  

Net Sales

            

Material Handling

   $ 104,089     $ 89,911       15.8   $ 310,343     $ 299,842       3.5

Distribution

     40,004       42,793       (6.5 )%      117,836       128,248       (8.1 )% 

Inter-company Sales

     (18     (28     —         (98     (92     —    
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total

   $ 144,075     $ 132,676       8.6   $ 428,081     $ 427,998       0.0
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Operating Income

            

Material Handling

   $ 10,325     $ 4,378       135.8   $ 29,839     $ 26,152       14.1

Distribution

     3,179       3,301       (3.7 )%      7,742       9,803       (21.0 )% 

Corporate

     (6,393     (4,693     —         (17,532     (20,674     —    
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total

   $ 7,111     $ 2,986       138.1   $ 20,049     $ 15,281       31.2
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 


MYERS INDUSTRIES, INC.

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

OPERATING INCOME BY SEGMENT (UNAUDITED)

(Dollars in thousands, except per share data)

 

     Quarter Ended September 30,     Nine Months Ended September 30,  
     2017     2016     2017     2016  

Material Handling

        

Operating income as reported

   $ 10,325     $ 4,378     $ 29,839     $ 26,152  

Asset impairments

     —         —         544       9,874  

Reduction to contingent liability

     —         —         —         (2,335

Gain on sale of asset

     (2,758     —         (4,087     —    

Restructuring expenses and other adjustments

     2,319       292       8,158       292  
  

 

 

   

 

 

   

 

 

   

 

 

 

Operating income as adjusted

     9,886       4,670       34,454       33,983  

Distribution

        

Operating income as reported

     3,179       3,301       7,742       9,803  

Corporate Expense

        

Corporate expense as reported

     (6,393     (4,693     (17,532     (20,674

Environmental reserve

     326       605       326       2,155  

CFO severance related costs

     —         —         —         2,011  
  

 

 

   

 

 

   

 

 

   

 

 

 

Corporate expense as adjusted

     (6,067     (4,088     (17,206     (16,508

Continuing Operations

        

Operating income as reported

     7,111       2,986       20,049       15,281  

Total of all adjustments above

     (113     897       4,941       11,997  
  

 

 

   

 

 

   

 

 

   

 

 

 

Operating income as adjusted

     6,998       3,883       24,990       27,278  

Interest expense, net

     (1,785     (2,015     (5,545     (6,087
  

 

 

   

 

 

   

 

 

   

 

 

 

Income (loss) before taxes as adjusted

     5,213       1,868       19,445       21,191  

Income tax expense*

     (1,877     (673     (7,000     (7,628
  

 

 

   

 

 

   

 

 

   

 

 

 

Income (loss) from continuing operations as adjusted

   $ 3,336     $ 1,195     $ 12,445     $ 13,563  
  

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted earnings (loss) per diluted share from continuing operations

   $ 0.11     $ 0.04     $ 0.41     $ 0.45  

 

* Income taxes are calculated using the normalized effective tax rate for each year. The normalized rate used above is 36%.

Note on Reconciliation of Income and Earnings Data: Income from continuing operations as adjusted and adjusted earnings per diluted share from continuing operations are non-GAAP financial measures 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, 2017      December 31, 2016  

Assets

     

Current Assets

     

Cash

   $ 4,511      $ 7,888  

Restricted cash

     8,650        8,635  

Accounts receivable, net

     88,278        73,818  

Inventories

     48,972        46,023  

Other

     2,881        4,787  
  

 

 

    

 

 

 

Total Current Assets

     153,292        141,151  

Other Assets

     128,181        129,051  

Property, Plant, & Equipment, Net

     91,934        111,482  
  

 

 

    

 

 

 

Total Assets

   $ 373,407      $ 381,684  
  

 

 

    

 

 

 

Liabilities & Shareholders’ Equity

     

Current Liabilities

     

Accounts payable

   $ 61,990      $ 48,988  

Accrued expenses

     36,330        30,324  
  

 

 

    

 

 

 

Total Current Liabilities

     98,320        79,312  

Long-term debt, net

     158,010        189,522  

Other liabilities

     7,616        9,235  

Deferred income taxes

     11,729        10,582  

Total Shareholders’ Equity

     97,732        93,033  
  

 

 

    

 

 

 

Total Liabilities & Shareholders’ Equity

   $ 373,407      $ 381,684  
  

 

 

    

 

 

 


MYERS INDUSTRIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

(Dollars in thousands)

 

     Nine Months Ended September 30,  
     2017     2016  

Cash Flows From Operating Activities

    

Net income

   $ 8,364     $ 2,515  

Income (loss) from discontinued operations, net of income taxes

     (52     (257
  

 

 

   

 

 

 

Income from continuing operations

     8,416       2,772  

Adjustments to reconcile income from continuing operations to net cash provided by (used for) operating activities

    

Depreciation

     16,758       18,465  

Amortization

     6,764       7,428  

Accelerated depreciation associated with restructuring activities

     2,018       —    

Non-cash stock-based compensation expense

     2,873       2,804  

(Gain) loss on fixed asset sales

     (4,128     383  

Deferred taxes

     101       (1,985

Accrued interest income on note receivable

     (983     (948

Impairment charges

     544       9,874  

Other

     29       (338

Payments on performance based compensation

     (1,010     (1,794

Other long-term liabilities

     (140     (431

Cash flows provided by (used for) working capital

    

Accounts receivable

     (12,754     1,057  

Inventories

     (2,490     7,349  

Prepaid expenses and other assets

     1,696       484  

Accounts payable and accrued expenses

     18,416       (26,520
  

 

 

   

 

 

 

Net cash provided by (used for) operating activities - continuing operations

     36,110       18,600  

Net cash provided by (used for) operating activities - discontinued operations

     —         —    
  

 

 

   

 

 

 

Net cash provided by (used for) operating activities

     36,110       18,600  
  

 

 

   

 

 

 

Cash Flows From Investing Activities

    

Capital expenditures

     (5,128     (11,490

Proceeds from sale of property, plant and equipment

     8,075       194  

Proceeds (payments) related to sale of business

     —         (4,034
  

 

 

   

 

 

 

Net cash provided by (used for) investing activities - continuing operations

     2,947       (15,330

Net cash provided by (used for) investing activities - discontinued operations

     —         —    
  

 

 

   

 

 

 

Net cash provided by (used for) investing activities

     2,947       (15,330
  

 

 

   

 

 

 

Cash Flows From Financing Activities

    

Net borrowing (repayments) on credit facility

     (31,397     4,440  

Cash dividends paid

     (12,230     (12,143

Proceeds from issuance of common stock

     2,524       2,582  

Excess tax benefit from stock-based compensation

     —         139  

Shares withheld for employee taxes on equity awards

     (273     (925

Deferred financing costs

     (1,030     —    
  

 

 

   

 

 

 

Net cash provided by (used for) financing activities - continuing operations

     (42,406     (5,907

Net cash provided by (used for) financing activities - discontinued operations

     —         —    
  

 

 

   

 

 

 

Net cash provided by (used for) financing activities

     (42,406     (5,907
  

 

 

   

 

 

 

Foreign exchange rate effect on cash

     (28     831  
  

 

 

   

 

 

 

Net increase (decrease) in cash

     (3,377     (1,806

Cash at January 1

     7,888       7,344  
  

 

 

   

 

 

 

Cash at September 30

   $ 4,511     $ 5,538  
  

 

 

   

 

 

 


MYERS INDUSTRIES, INC.

RECONCILIATION OF FREE CASH FLOW TO GAAP NET CASH PROVIDED BY

(USED FOR) OPERATING ACTIVITIES – CONTINUING OPERATIONS

(UNAUDITED)

(Dollars in thousands)

 

    For the Nine Months Ended        
    September 30, 2017           September 30, 2016    

Net cash provided by (used for) operating activities - continuing operations

  $ 36,110       $ 18,600    

Capital expenditures

    (5,128       (11,490  
 

 

 

     

 

 

   

Free cash flow

  $ 30,982       $ 7,110    
    YTD
September 30, 2017
          YTD
June 30, 2017
          QTD
September 30, 2017
 

Net cash provided by (used for) operating activities - continuing operations

  $ 36,110       -     $ 23,634       =     $ 12,476  

Capital expenditures

    (5,128     -       (2,345     =       (2,783
 

 

 

     

 

 

     

 

 

 

Free cash flow

  $ 30,982       -     $ 21,289       =     $ 9,693  
 

 

 

     

 

 

     

 

 

 

Note on Reconciliations of Cash Flow Data: Free cash flow is a non-GAAP financial measure that Myers Industries, Inc. calculates according to the schedules above using GAAP amounts from the unaudited Condensed Consolidated Statement of Cash Flows. The Company uses free cash flow as well as other financial measures in connection with its decision-making activities. The Company’s method for calculating free cash flow may not be comparable to methods used by other companies.