EX-99.1 2 d741971dex991.htm EX-99.1 EX-99.1

Exhibit 99.1

 

LOGO

Myers Industries Reports 2019 First Quarter Results

Margin expansion continues; reaffirms full-year outlook

May 8, 2019, Akron, Ohio - Myers Industries, Inc. (NYSE: MYE), a manufacturer of polymer products for industrial, agricultural, automotive, commercial and consumer markets, today announced results for the first quarter ended March 31, 2019.

First Quarter 2019 Business Highlights

 

  •  

GAAP income per diluted share from continuing operations was $0.19, compared to $0.25 for the first quarter of 2018

 

  •  

Adjusted income per diluted share from continuing operations was $0.23, compared to $0.24 for the first quarter of 2018

 

  •  

Net sales decreased 8.8% compared to the first quarter of 2018

 

  •  

Gross margin expanded 180 basis points to 32.7%

 

  •  

Generated cash from continuing operations of $5.3 million and free cash flow of $2.4 million

 

  •  

Company reaffirms full-year outlook of GAAP income per diluted share from continuing operations estimated to be between $0.70 and $0.80 for the full year 2019 and adjusted income per diluted share from continuing operations estimated to be between $0.75 and $0.85 for the full year 2019

“Our first quarter financial performance was in line with our expectations as we continued to improve our operations and margins. We continued to execute our Distribution Segment transformation and delivered sales growth for the second consecutive quarter, despite one less selling day compared to the first quarter of 2018. Net sales in our Material Handling Segment decreased due to more normalized seed box demand and continued decline in the Recreational Vehicle (RV) market. Despite this, we expanded our enterprise gross profit margin by 180 bps to 32.7% and adjusted operating income by 6.2%, demonstrating the impact of our continuous improvement operating model,” said Dave Banyard, President and Chief Executive Officer of Myers Industries.

Mr. Banyard continued, “Our cash flow performance during the quarter was impacted by higher variable compensation payouts and increased capital spending compared to the first quarter of 2018, as well as a build-up of inventory in our Scepter business to prepare for anticipated demand for the new SmartControl fuel container in our consumer end market. We anticipate that our cash flow performance over the remainder of the year will return to more consistent levels seen in the last couple of years.”

 

     Quarter Ended March 31,  
(Dollars in thousands, except per share data)    2019     2018     % Inc
(Dec)		  

Net sales

    $ 139,115     $ 152,568       (8.8 )% 

Gross profit

    $ 45,559     $ 47,115       (3.3 )% 

Gross profit margin

      32.7 %      30.9 %   

Operating income

    $ 10,218     $ 12,022       (15.0 )% 

Income from continuing operations:

       

Income

    $ 6,643     $ 7,755       (14.3 )% 

Income per diluted share

    $ 0.19     $ 0.25       (24.0 )% 

Operating income as adjusted(1)

    $ 12,207     $ 11,499       6.2 % 

Income from continuing operations as adjusted(1):

       

Income

    $ 8,145     $ 7,395       10.1 % 

Income per diluted share

    $ 0.23     $ 0.24       (4.2 )% 

EBITDA as adjusted

    $ 18,105     $ 18,048       0.3 % 

(1) Detail regarding the adjustments is provided on the Reconciliations of Non-GAAP Financial Measures included in this release.

Net sales decreased $13.5 million or 8.8% (8.4% excluding currency fluctuation) to $139.1 million, compared to the first quarter of 2018. The decrease was primarily the result of a sales decline in the Material Handling Segment. Gross profit decreased $1.6 million to $45.6 million, compared to the first quarter of 2018. Favorable price-cost margin and productivity savings mostly offset lower sales volume and an unfavorable sales mix during the quarter. Selling, general and administrative expenses decreased $1.0 million to $34.5 million, compared to the first quarter of 2018, due mostly to lower variable compensation and benefit costs. GAAP income per diluted share from continuing operations was $0.19, compared to $0.25 for the first quarter of 2018. Adjusted income per diluted share from continuing operations was $0.23, compared to $0.24 for the first quarter of 2018.

Segment Results

Net sales in the Material Handling Segment for the first quarter of 2019 decreased $13.9 million or 11.9% (11.4% excluding currency fluctuation) compared to the first quarter of 2018. The decrease in net sales was primarily due to sales declines in the Company’s food & beverage (unusually high seed box demand in first quarter 2018) and vehicle (declining RV sales) end markets. Segment adjusted EBITDA declined 0.7% to $22.8 million for the first quarter, compared to $23.0 million for the first quarter of 2018. Favorable price-cost margin and productivity savings mostly offset the impact of the lower sales volume and unfavorable sales mix.

Net sales in the Distribution Segment for the first quarter of 2019 increased $0.4 million or 1.1% compared to the first quarter of 2018. The segment’s adjusted EBITDA was flat compared to the first quarter of 2018. The Company also continued to execute its transformation plan, which includes enhancements in its go-to-market strategy, the implementation of 80/20 to drive improved contribution margins, and optimization of its logistics and overhead costs, with a goal to expand Distribution Segment EBITDA margin to 10% by the end of 2020.

2019 Outlook

For fiscal year 2019, the Company anticipates total revenue will be flat on a constant currency basis compared to the prior year. Anticipated sales increases in the consumer, industrial and auto aftermarket end markets are expected to be offset by sales decreases in the food & beverage and vehicle end markets due to more normalized seed box demand and a continued decline in the RV market following years of steady growth. The Company anticipates a favorable sales mix, combined with an ongoing focus on executing pricing and continuous improvement actions, leading to adjusted operating margin growth in 2019. The Company expects depreciation and amortization to be approximately $25 million, net interest expense to be approximately $5 million, and the effective tax rate to be approximately 27%. GAAP income per diluted share from continuing operations is estimated to be between $0.70 and $0.80 and adjusted income per diluted share from continuing operations is estimated to be between $0.75 and $0.85, based on a fully diluted share count of 36.0 million shares. Capital expenditures are anticipated to be approximately $10 million.

Conference Call Details

The Company will host an earnings conference call and webcast for investors and analysts on Wednesday, May 8, at 8:30 a.m. ET. The call is anticipated to last approximately one hour and may be accessed by dialing: (US) 833-233-3452 or (Int’l) 647-689-4129. The Conference ID # is 3294928. 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 3294928.

Use of Non-GAAP Financial Measures

The Company uses certain non-GAAP measures in this release. Adjusted income per diluted share from continuing operations, operating income as adjusted, adjusted operating income, income from continuing operations as adjusted, EBITDA as adjusted, adjusted EBITDA, adjusted EPS 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. Reconciliations of the non-GAAP financial measures to the most directly comparable GAAP measures are 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 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”, “outlook”, “target”, “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; operational problems at our manufacturing facilities, or unexpected failures at those 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 and per share data)

 

     Quarter Ended  
     March 31, 2019     March 31, 2018  

Net sales

    $ 139,115     $ 152,568  

Cost of sales

      93,556       105,453  
  

 

 

    

 

 

  

Gross profit

      45,559       47,115  

Selling, general and administrative expenses

      34,468       35,473  

(Gain) loss on disposal of fixed assets

      (43 )      (380 ) 

Impairment charges

      916       —    
  

 

 

    

 

 

  

Operating income

      10,218       12,022  

Interest expense, net

      1,049       1,639  
  

 

 

    

 

 

  

Income from continuing operations before income taxes

      9,169       10,383  

Income tax expense

      2,526       2,628  
  

 

 

    

 

 

  

Income from continuing operations

      6,643       7,755  

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

      127       (911 ) 
  

 

 

    

 

 

  

Net income

    $ 6,770     $ 6,844  
  

 

 

    

 

 

  

Income per common share from continuing operations:

     

Basic

    $ 0.19     $ 0.25  

Diluted

    $ 0.19     $ 0.25  

Income (loss) per common share from discontinued operations:

     

Basic

    $ —       $ (0.03 ) 

Diluted

    $ —       $ (0.03 ) 

Net income per common share:

     

Basic

    $ 0.19     $ 0.22  

Diluted

    $ 0.19     $ 0.22  

Weighted average common shares outstanding:

     

Basic

      35,388,989       30,518,715  

Diluted

      35,694,830       30,989,261  

MYERS INDUSTRIES, INC.

SALES AND EARNINGS BY SEGMENT (UNAUDITED)

(Dollars in thousands)

 

     Quarter Ended March 31,  
     2019     2018     % Change  

Net sales

       

Material Handling

    $ 102,951     $ 116,809       (11.9 )% 

Distribution

      36,174       35,781       1.1 % 

Inter-company Sales

      (10 )      (22 )      —    
  

 

 

    

 

 

    

 

 

  

Total

    $ 139,115     $ 152,568       (8.8 )% 
  

 

 

    

 

 

    

 

 

  

Operating income (loss)

       

Material Handling

    $ 16,207     $ 16,730       (3.1 )% 

Distribution

      213       1,738       (87.7 )% 

Corporate

      (6,202 )      (6,446 )      —    
  

 

 

    

 

 

    

 

 

  

Total

    $ 10,218     $ 12,022       (15.0 )% 
  

 

 

    

 

 

    

 

 

  

Operating income (loss) as adjusted

       

Material Handling

    $ 17,295     $ 16,872       2.5 % 

Distribution

      1,114       1,073       3.8 % 

Corporate

      (6,202 )      (6,446 )      —    
  

 

 

    

 

 

    

 

 

  

Total

    $ 12,207     $ 11,499       6.2 % 
  

 

 

    

 

 

    

 

 

  

Operating income margin as adjusted

       

Material Handling

      16.8 %      14.4 %   

Distribution

      3.1 %      3.0 %   

Corporate

      n/a       n/a    
  

 

 

    

 

 

    

Total

      8.8 %      7.5 %   
  

 

 

    

 

 

    

EBITDA as adjusted

       

Material Handling

    $ 22,821     $ 22,985       (0.7 )% 

Distribution

      1,376       1,382       (0.5 )% 

Corporate

      (6,092 )      (6,319 )      —    
  

 

 

    

 

 

    

 

 

  

Total

    $ 18,105     $ 18,048       0.3 % 
  

 

 

    

 

 

    

 

 

  

EBITDA margin as adjusted

       

Material Handling

      22.2 %      19.7 %   

Distribution

      3.8 %      3.9 %   

Corporate

      n/a       n/a    
  

 

 

    

 

 

    

Total

      13.0 %      11.8 %   
  

 

 

    

 

 

    

MYERS INDUSTRIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (UNAUDITED)

(Dollars in thousands)

 

     March 31, 2019      December 31, 2018  

Assets

      

Current Assets

      

Cash

    $ 67,316      $ 58,894  

Accounts receivable, net

      71,914        72,939  

Income tax receivable

      —          4,892  

Inventories

      42,489        43,596  

Prepaid expenses and other current assets

      1,809        2,534  
  

 

 

     

 

 

  

Total Current Assets

      183,528        182,855  

Property, plant, & equipment, net

      59,334        65,460  

Right of use asset - operating leases

      5,529        —    

Deferred income taxes

      5,350        5,270  

Other assets

      92,047        95,060  
  

 

 

     

 

 

  

Total Assets

    $ 345,788      $ 348,645  
  

 

 

     

 

 

  

Liabilities & Shareholders’ Equity

      

Current Liabilities

      

Accounts payable

    $ 53,818      $ 60,849  

Accrued expenses

      31,770        36,574  

Operating lease liability - short-term

      1,895        —    
  

 

 

     

 

 

  

Total Current Liabilities

      87,483        97,423  

Long-term debt

      76,887        76,790  

Operating lease liability - long-term

      3,878        —    

Other liabilities

      19,114        19,794  

Total Shareholders’ Equity

      158,426        154,638  
  

 

 

     

 

 

  

Total Liabilities & Shareholders’ Equity

    $ 345,788      $ 348,645  
  

 

 

     

 

 

  

MYERS INDUSTRIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

(Dollars in thousands)

 

     Quarter Ended March 31,  
     2019     2018  

Cash Flows From Operating Activities

     

Net income

    $ 6,770     $ 6,844  

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

      127       (911 ) 
  

 

 

    

 

 

  

Income from continuing operations

      6,643       7,755  

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

     

Depreciation

      4,012       4,479  

Amortization

      2,026       2,166  

Accelerated depreciation associated with restructuring activities

      —         16  

Non-cash stock-based compensation expense

      958       1,098  

(Gain) loss on disposal of fixed assets

      (43 )      (380 ) 

Interest income received (accrued) on note receivable

      —         334  

Impairment charges

      916       —    

Other

      100       60  

Payments on performance based compensation

      (413 )      (1,249 ) 

Other long-term liabilities

      379       (123 ) 

Cash flows provided by (used for) working capital

     

Accounts receivable

      1,200       (4,473 ) 

Inventories

      1,207       (796 ) 

Prepaid expenses and other current assets

      733       447  

Accounts payable and accrued expenses

      (12,417 )      3,504  
  

 

 

    

 

 

  

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

      5,301       12,838  

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

      7,297       (2,085 ) 
  

 

 

    

 

 

  

Net cash provided by (used for) operating activities

      12,598       10,753  
  

 

 

    

 

 

  

Cash Flows From Investing Activities

     

Capital expenditures

      (2,933 )      (1,206 ) 

Proceeds from sale of property, plant and equipment

      4,486       2,353  
  

 

 

    

 

 

  

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

      1,553       1,147  

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

      —         —    
  

 

 

    

 

 

  

Net cash provided by (used for) investing activities

      1,553       1,147  
  

 

 

    

 

 

  

Cash Flows From Financing Activities

     

Net borrowing (repayments) on credit facility

      —         (6,722 ) 

Cash dividends paid

      (4,940 )      (4,161 ) 

Proceeds from issuance of common stock

      146       452  

Shares withheld for employee taxes on equity awards

      (974 )      (359 ) 
  

 

 

    

 

 

  

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

      (5,768 )      (10,790 ) 

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

      —         —    
  

 

 

    

 

 

  

Net cash provided by (used for) financing activities

      (5,768 )      (10,790 ) 
  

 

 

    

 

 

  

Foreign exchange rate effect on cash

      39       (606 ) 
  

 

 

    

 

 

  

Net increase in cash and restricted cash

      8,422       504  

Cash and restricted cash at January 1

      58,894       11,179  
  

 

 

    

 

 

  

Cash and restricted cash at March 31

    $ 67,316     $ 11,683  
  

 

 

    

 

 

  

MYERS INDUSTRIES, INC.

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

GROSS PROFIT, OPERATING INCOME AND EBITDA (UNAUDITED)

(Dollars in thousands)

 

     Quarter Ended March 31, 2019  
     Material
Handling		     Distribution     Segment
Total		     Corporate
& Other		     Total  

GAAP Net sales

    $ 102,951     $ 36,174     $ 139,125     $ (10 )    $ 139,115  

GAAP Gross profit

          45,559       —         45,559  

Add: Restructuring expenses and other adjustments

          172       —         172  
      

 

 

    

 

 

    

 

 

  

Gross profit as adjusted

          45,731       —         45,731  

Gross profit margin as adjusted

          32.9 %      n/a       32.9 % 

GAAP Operating income (loss)

      16,207       213       16,420       (6,202 )      10,218  

Add: Restructuring expenses and other adjustments(1)

      172       901       1,073       —         1,073  

Add: Asset Impairment

      916       —         916       —         916  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Operating income (loss) as adjusted

      17,295       1,114       18,409       (6,202 )      12,207  

Operating income margin as adjusted

      16.8 %      3.1 %      13.2 %      n/a       8.8 % 

Add: Depreciation and amortization

      5,570       262       5,832       110       5,942  

Less: Depreciation adjustments

      (44 )      —         (44 )      —         (44 ) 
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

EBITDA as adjusted

    $ 22,821     $ 1,376     $ 24,197     $ (6,092 )    $ 18,105  

EBITDA margin as adjusted

      22.2 %      3.8 %      17.4 %      n/a       13.0 % 

(1)   Includes gross profit adjustments of $172 and SG&A adjustments of $901

    

 

     Quarter Ended March 31, 2018  
     Material
Handling		     Distribution     Segment
Total		     Corporate
& Other		     Total  

GAAP Net sales

    $ 116,809     $ 35,781     $ 152,590     $ (22 )    $ 152,568  

GAAP Gross profit

          47,115       —         47,115  

Add: Restructuring expenses and other adjustments

          119       —         119  
      

 

 

    

 

 

    

 

 

  

Gross profit as adjusted

          47,234       —         47,234  

Gross profit margin as adjusted

          31.0 %      n/a       31.0 % 

GAAP Operating income (loss)

      16,730       1,738       18,468       (6,446 )      12,022  

Add: Restructuring expenses and other adjustments(1)

      142       —         142       —         142  

Less: Gain on sale of assets

      —         (665 )      (665 )      —         (665 ) 
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Operating income (loss) as adjusted

      16,872       1,073       17,945       (6,446 )      11,499  

Operating income margin as adjusted

      14.4 %      3.0 %      11.8 %      n/a       7.5 % 

Add: Depreciation and amortization

      6,129       309       6,438       127       6,565  

Less: Depreciation adjustments

      (16 )      —         (16 )      —         (16 ) 
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

EBITDA as adjusted

    $ 22,985     $ 1,382     $ 24,367     $ (6,319 )    $ 18,048  

EBITDA margin as adjusted

      19.7 %      3.9 %      16.0 %      n/a       11.8 % 

(1)   Includes gross profit adjustments of $119 and SG&A adjustments of $23

    

MYERS INDUSTRIES, INC.

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

INCOME AND EARNINGS PER DILUTED SHARE (UNAUDITED)

(Dollars in thousands, except per share data)

 

     Quarter Ended March 31,  
     2019     2018  

GAAP Operating income

    $ 10,218     $ 12,022  

Add: Restructuring expenses and other adjustments

      1,073       142  

Add: Asset Impairment

      916       —    

Less: Loss (gain) on sale of assets

      —         (665 ) 
  

 

 

    

 

 

  

Operating income as adjusted

      12,207       11,499  

Less: Interest expense, net

      (1,049 )      (1,639 ) 
  

 

 

    

 

 

  

Income before taxes as adjusted

      11,158       9,860  

Less: Income tax expense(1)

      (3,013 )      (2,465 ) 
  

 

 

    

 

 

  

Income from continuing operations as adjusted

    $ 8,145     $ 7,395  

Adjusted earnings per diluted share from continuing operations

    $ 0.23     $ 0.24  

(1)   Income taxes are calculated using the normalized effective tax rate for each year. The rate used in 2019 is 27% and in 2018 was 25%.

    

MYERS INDUSTRIES, INC.

RECONCILIATION OF FREE CASH FLOW TO GAAP NET CASH PROVIDED BY

(USED FOR) OPERATING ACTIVITIES – CONTINUING OPERATIONS

(UNAUDITED)

(Dollars in thousands)

 

     March 31, 2019     March 31, 2018  

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

    $ 5,301     $ 12,838  

Capital expenditures

      (2,933 )      (1,206 ) 
  

 

 

    

 

 

  

Free cash flow

    $ 2,368     $ 11,632