EX-99.1 2 d873798dex991.htm EX-99.1 EX-99.1

Exhibit 99.1

 

LOGO

Myers Industries Reports 2019 Fourth Quarter and Full Year Results

Earnings growth in 2019 despite lower sales;

Continued margin improvement; generated free cash flow of $37 million

March 3, 2020, Akron, Ohio - Myers Industries, Inc. (NYSE: MYE), a manufacturer of polymer products and distributor for the tire, wheel and under-vehicle service industry, today announced results for the fourth quarter and full year ended December 31, 2019.

Fourth Quarter and Full Year 2019 Financial Highlights

 

  •  

GAAP income per diluted share from continuing operations was $0.16 for the fourth quarter and $0.68 for the full year, compared with income of $0.09 and a loss of $0.05 (after $33.3 million of pre-tax charges related to the Company’s Lawn and Garden business, which was sold in 2015), respectively, for the fourth quarter and full year of 2018

 

  •  

Adjusted income per diluted share from continuing operations was $0.12 for the fourth quarter and $0.78 for the full year, compared with $0.13 and $0.76, respectively, for the fourth quarter and full year of 2018

 

  •  

Net sales for the fourth quarter decreased 15.6% to $116.8 million, compared with $138.4 million for the fourth quarter of 2018; net sales for the full year decreased 9.0% to $515.7 million, compared with $566.7 million for the full year of 2018

 

  •  

Gross margin increased to 33.6% for the fourth quarter and 33.2% for the full year, compared with 30.4% and 31.6%, respectively for the fourth quarter and full year of 2018

 

  •  

Generated cash flow from continuing operations of $47.0 million and free cash flow of $36.7 million for the full year of 2019

 

  •  

Completed acquisition of Tuffy Manufacturing for $18 million in August 2019

“During 2019, our team delivered improved bottom line performance and continued margin expansion, despite being challenged by a number of headwinds across our businesses and a leadership change,” said Andrean Horton, Interim President and Chief Executive Officer of Myers Industries. “Importantly, the Distribution Segment continued to successfully execute on its transformation plan, integrated the recent Tuffy acquisition and increased sales and adjusted EBITDA margin. In our Material Handling Segment, we continued to drive margin improvement despite softness in key end markets across the business, including a shift in agricultural demand, wet weather conditions in our consumer market and a weaker vehicle market. While we expect some of these uncertainties will carry into 2020, we do see opportunity as we gain traction in some of our adjacent markets.”

“Our teams remain committed to meeting our customers’ needs, operating with an above-average safety record and building an engaged and focused culture. In the fourth quarter, our Board of Directors commenced a search to identify a permanent CEO and our goal is to conclude this process as quickly as possible. We continue to focus on achieving our strategic objectives and generating profitable growth for our shareholders.”

Fourth Quarter 2019 Financial Summary

Net sales for the 2019 fourth quarter decreased $21.6 million or 15.6% to $116.8 million, compared with $138.4 million for the fourth quarter of 2018. The decrease was the result of significant challenges across key markets in the Material Handling Segment. Gross profit decreased to $39.2 million, compared with $42.1 million in 2018. However, gross profit margin increased to 33.6% compared with 30.4% last year as favorable price-cost margin and productivity improvements more than offset the lower sales volume during the quarter. Selling, general and administrative expenses decreased $4.6 million to $30.3 million, compared with $35.0 million in 2018, due primarily to lower compensation costs and savings from the transformation initiatives in the Distribution Segment. GAAP income per diluted share from continuing operations was $0.16, compared to $0.09 for the fourth quarter of 2018. Adjusted income per diluted share from continuing operations was $0.12, compared to $0.13 for the fourth quarter of 2018.

Net sales in the Material Handling Segment (consumer, food and beverage, industrial and vehicle end markets) for the fourth quarter of 2019 were $73.4 million, a decrease of $26.1 million or 26.2%, compared with $99.6 million in 2018. The decrease was due to sales declines across all end markets, but primarily in the Company’s food and beverage (lower seed box sales) end market. For the fourth quarter, adjusted EBITDA declined to $14.0 million, compared with $19.3 million in 2018. The lower volume was partially offset by favorable price-cost margin, productivity improvements and lower variable incentive compensation costs. The Material Handling Segment’s adjusted EBITDA margin for the fourth quarter was 19.1% compared to 19.4% for the fourth quarter of 2018.

Net sales in the Distribution Segment (auto aftermarket end market) for the fourth quarter of 2019 were $43.4 million, an increase of $4.6 million or 11.8%, compared with $38.8 million in 2018. The increase was due mostly to incremental sales from the August 2019 acquisition of Tuffy Manufacturing, Inc. Fourth quarter adjusted EBITDA increased to $3.8 million compared with $0.6 million in 2018, due primarily to savings from the segment’s transformation initiatives and the Tuffy acquisition. The Distribution Segment’s adjusted EBITDA margin for the fourth quarter was 8.8% compared to 1.6% for the fourth quarter of 2018.

Full Year 2019 Financial Summary

Net sales for the full year 2019 decreased $51.0 million or 9.0% to $515.7 million, compared with $566.7 million in 2018. Gross profit decreased to $171.3 million, compared with $179.3 million in 2018. However, gross profit margin increased 160 basis points to 33.2%. Favorable price-cost margin and productivity improvements more than offset the lower sales volume and a $3.5 million charge taken during the third quarter of 2019 for estimated product replacement costs. Selling, general and administrative expenses decreased to $133.1 million, compared with $139.3 million in 2018, due primarily to lower compensation costs and savings from the transformation initiatives in the Distribution Segment. GAAP income per diluted share from continuing operations was $0.68, compared with a loss of $0.05 for the full year of 2018, when the Company recognized $33.3 million of charges related to its Lawn and Garden business which was sold in 2015. Adjusted income per diluted share from continuing operations was $0.78, compared with $0.76 in 2018.

Net sales in the Material Handling Segment for the full year of 2019 were $356.4 million, a decrease of $60.8 million or 14.6%, compared with 2018. The decrease was due to lower sales across all end markets, but primarily in the Company’s food and beverage (lower seed box sales) end market. The segment’s adjusted EBITDA declined 8.9% to $75.5 million for the full year of 2019, compared with $82.8 million in 2018. The lower sales volume and charge for estimated product replacement costs were partially offset by favorable price-cost margin, productivity improvements and lower variable incentive compensation costs. The Material Handling Segment’s adjusted EBITDA margin for the full year increased 130 basis points to 21.2%, compared with 19.9% in 2018.

Net sales in the Distribution Segment for the full year of 2019 were $159.3 million, an increase of $9.7 million or 6.5%, compared with 2018, mostly due to incremental sales from the August 2019 Tuffy acquisition. The segment’s adjusted EBITDA increased 60.0% to $12.7 million compared with $7.9 million in 2018, due primarily to savings from the segment’s transformation initiatives and the Tuffy acquisition. The Distribution Segment’s adjusted EBITDA margin for the full year increased 270 basis points to 8.0%, compared with 5.3% in 2018.

2020 Outlook

The Company anticipates that total revenue will be up mid-single digits year-over-year. The Company anticipates that approximately half of the sales increase will come from incremental sales due to the August 2019 Tuffy acquisition, while the other half of the sales increase will come from the continued transformation in Distribution and improving demand in select markets in Material Handling, including food processing. The Company anticipates depreciation and amortization to be approximately $21 million, net interest expense to be approximately $4 million, and the effective tax rate to be approximately 27%. GAAP income per diluted share from continuing operations is estimated to be in the range of $1.05 to $1.15 and adjusted income per diluted share from continuing operations is estimated to be in the range of $0.85 to $0.95. As previously disclosed, during the first quarter of 2020, the Company will recognize a pre-tax gain of approximately $11.9 million as a result of a sale of notes and release of a lease guarantee liability. The pre-tax gain will be excluded from adjusted earnings. Both the GAAP and adjusted earnings outlooks are based on a diluted share count of 36 million shares. Capital expenditures are anticipated to be approximately $15 million.

Conference Call Details

The Company will host an earnings conference call and webcast for investors and analysts on Tuesday, March 3, 2020, 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 6763017. 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 6763017.

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, income from continuing operations as adjusted, EBITDA as adjusted, adjusted operating income, adjusted EBITDA, adjusted EBITDA margin, 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. 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 a 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     Year Ended  
     December 31,
2019		     December 31,
2018		     December 31,
2019		      December 31,
2018		  

Net sales

    $ 116,818     $ 138,388     $ 515,698      $ 566,735  

Cost of sales

      77,587       96,292       344,386        387,442  
  

 

 

    

 

 

    

 

 

     

 

 

  

Gross profit

      39,231       42,096       171,312        179,293  

Selling, general and administrative expenses

      30,338       34,975       133,130        139,335  

(Gain) loss on disposal of fixed assets

      87       88       —          (8 ) 

Impairment charges

      —         —         916        308  

Other expenses

      —         —         —          33,331  
  

 

 

    

 

 

    

 

 

     

 

 

  

Operating income (loss)

      8,806       7,033       37,266        6,327  

Interest expense, net

      1,024       1,103       4,083        4,938  
  

 

 

    

 

 

    

 

 

     

 

 

  

Income (loss) from continuing operations before income taxes

      7,782       5,930       33,183        1,389  

Income tax expense (benefit)

      2,035       2,804       8,968        3,037  
  

 

 

    

 

 

    

 

 

     

 

 

  

Income (loss) from continuing operations

      5,747       3,126       24,215        (1,648 ) 

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

      (9 )      (788 )      118        (1,701 ) 
  

 

 

    

 

 

    

 

 

     

 

 

  

Net income (loss)

    $ 5,738     $ 2,338     $ 24,333      $ (3,349 ) 
  

 

 

    

 

 

    

 

 

     

 

 

  

Income (loss) per common share from continuing operations:

          

Basic

    $ 0.16     $ 0.09     $ 0.68      $ (0.05 ) 

Diluted

    $ 0.16     $ 0.09     $ 0.68      $ (0.05 ) 

Income (loss) per common share from discontinued operations:

          

Basic

    $ —       $ (0.02 )    $ —        $ (0.05 ) 

Diluted

    $ —       $ (0.02 )    $ —        $ (0.05 ) 

Net income (loss) per common share:

          

Basic

    $ 0.16     $ 0.07     $ 0.68      $ (0.10 ) 

Diluted

    $ 0.16     $ 0.07     $ 0.68      $ (0.10 ) 

Weighted average common shares outstanding:

          

Basic

      35,611,892       35,355,863       35,491,958        33,426,855  

Diluted

      35,724,633       35,576,611       35,653,147        33,426,855  

MYERS INDUSTRIES, INC.

SALES AND EARNINGS BY SEGMENT (UNAUDITED)

(Dollars in thousands)

 

     Quarter Ended December 31,     Year Ended December 31,  
     2019     2018     % Change     2019     2018     % Change  

Net sales

             

Material Handling

    $ 73,444     $ 99,578       (26.2 )%    $ 356,407     $ 417,199       (14.6 )% 

Distribution

      43,392       38,821       11.8 %      159,349       149,636       6.5 % 

Inter-company Sales

      (18 )      (11 )      —         (58 )      (100 )      —    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total

    $ 116,818     $ 138,388       (15.6 )%    $ 515,698     $ 566,735       (9.0 )% 
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Operating income (loss)

             

Material Handling

    $ 8,963     $ 13,083       (31.5 )%    $ 53,144     $ 57,948       (8.3 )% 

Distribution

      3,153       371       749.9 %      10,076       7,441       35.4 % 

Corporate

      (3,310 )      (6,421 )      —         (25,954 )      (59,062 )      —    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total

    $ 8,806     $ 7,033       25.2 %    $ 37,266     $ 6,327       489.0 % 
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Operating income (loss) as adjusted

             

Material Handling

    $ 8,963     $ 13,501       (33.6 )%    $ 54,232     $ 58,871       (7.9 )% 

Distribution

      3,171       371       754.6 %      11,215       6,776       65.5 % 

Corporate

      (4,995 )      (6,220 )      —         (23,404 )      (25,222 )      —    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total

    $ 7,139     $ 7,652       (6.7 )%    $ 42,043     $ 40,425       4.0 % 
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Operating income margin as adjusted

             

Material Handling

      12.2 %      13.6 %        15.2 %      14.1 %   

Distribution

      7.3 %      1.0 %        7.0 %      4.5 %   

Corporate

      n/a       n/a         n/a       n/a    
  

 

 

    

 

 

      

 

 

    

 

 

    

Total

      6.1 %      5.5 %        8.2 %      7.1 %   
  

 

 

    

 

 

      

 

 

    

 

 

    

EBITDA as adjusted

             

Material Handling

    $ 14,029     $ 19,318       (27.4 )%    $ 75,470     $ 82,816       (8.9 )% 

Distribution

      3,798       631       501.9 %      12,716       7,945       60.0 % 

Corporate

      (4,890 )      (6,120 )      —         (22,991 )      (24,796 )      —    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total

    $ 12,937     $ 13,829       (6.5 )%    $ 65,195     $ 65,965       (1.2 )% 
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

EBITDA margin as adjusted

             

Material Handling

      19.1 %      19.4 %        21.2 %      19.9 %   

Distribution

      8.8 %      1.6 %        8.0 %      5.3 %   

Corporate

      n/a       n/a         n/a       n/a    
  

 

 

    

 

 

      

 

 

    

 

 

    

Total

      11.1 %      10.0 %        12.6 %      11.6 %   
  

 

 

    

 

 

      

 

 

    

 

 

    

MYERS INDUSTRIES, INC.

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

GROSS PROFIT, OPERATING INCOME AND EBITDA (UNAUDITED)

(Dollars in thousands)

 

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

GAAP Net sales

    $ 73,444     $ 43,392     $ 116,836     $ (18 )    $ 116,818  

GAAP Gross profit

          39,231       —         39,231  

Add: Restructuring expenses and other adjustments

          —         —         —    
      

 

 

    

 

 

    

 

 

  

Gross profit as adjusted

          39,231       —         39,231  

Gross profit margin as adjusted

          33.6 %      n/a       33.6 % 

GAAP Operating income (loss)

      8,963       3,153       12,116       (3,310 )      8,806  

Add: Restructuring expenses and other adjustments

      —         —         —         265       265  

Add: Tuffy acquisition costs

      —         18       18       81       99  

Less: CEO stock award reversal

      —         —         —         (2,031 )      (2,031 ) 
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Operating income (loss) as adjusted

      8,963       3,171       12,134       (4,995 )      7,139  

Operating income margin as adjusted

      12.2 %      7.3 %      10.4 %      n/a       6.1 % 

Add: Depreciation and amortization

      5,066       627       5,693       105       5,798  

Less: Depreciation adjustments

      —         —         —         —         —    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

EBITDA as adjusted

    $ 14,029     $ 3,798     $ 17,827     $ (4,890 )    $ 12,937  

EBITDA margin as adjusted

      19.1 %      8.8 %      15.3 %      n/a       11.1 % 
     Quarter Ended December 31, 2018  
     Material
Handling		     Distribution     Segment
Total		     Corporate
& Other		     Total  

GAAP Net sales

    $ 99,578     $ 38,821     $ 138,399     $ (11 )    $ 138,388  

GAAP Gross profit

          42,096       —         42,096  

Add: Restructuring expenses and other adjustments

          171       —         171  
      

 

 

    

 

 

    

 

 

  

Gross profit as adjusted

          42,267       —         42,267  

Gross profit margin as adjusted

          30.5 %      n/a       30.5 % 

GAAP Operating income (loss)

      13,083       371       13,454       (6,421 )      7,033  

Add: Restructuring expenses and other adjustments(1)

      418       —         418       201       619  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Operating income (loss) as adjusted

      13,501       371       13,872       (6,220 )      7,652  

Operating income margin as adjusted

      13.6 %      1.0 %      10.0 %      n/a       5.5 % 

Add: Depreciation and amortization

      5,883       260       6,143       100       6,243  

Less: Depreciation adjustments

      (66 )      —         (66 )      —         (66 ) 
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

EBITDA as adjusted

    $ 19,318     $ 631     $ 19,949     $ (6,120 )    $ 13,829  

EBITDA margin as adjusted

      19.4 %      1.6 %      14.4 %      n/a       10.0 % 

 

(1)

Includes gross profit adjustments of $171 and SG&A adjustments of $448

MYERS INDUSTRIES, INC.

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

GROSS PROFIT, OPERATING INCOME AND EBITDA (UNAUDITED)

(Dollars in thousands)

 

     Year Ended December 31, 2019  
     Material
Handling		     Distribution     Segment
Total		     Corporate
& Other		     Total  

GAAP Net sales

    $ 356,407     $ 159,349     $ 515,756     $ (58 )    $ 515,698  

GAAP Gross profit

          171,312       —         171,312  

Add: Restructuring expenses and other adjustments

          172       —         172  
      

 

 

    

 

 

    

 

 

  

Gross profit as adjusted

          171,484       —         171,484  

Gross profit margin as adjusted

          33.2 %      n/a       33.3 % 

GAAP Operating income (loss)

      53,144       10,076       63,220       (25,954 )      37,266  

Add: Restructuring expenses and other adjustments(1)

      172       865       1,037       265       1,302  

Add: Tuffy acquisition costs

      —         274       274       316       590  

Add: Asset impairment

      916       —         916       —         916  

Add: Environmental charges

      —         —         —         4,000       4,000  

Less: CEO stock award reversal

      —         —         —         (2,031 )      (2,031 ) 
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Operating income (loss) as adjusted

      54,232       11,215       65,447       (23,404 )      42,043  

Operating income margin as adjusted

      15.2 %      7.0 %      12.7 %      n/a       8.2 % 

Add: Depreciation and amortization

      21,282       1,501       22,783       413       23,196  

Less: Depreciation adjustments

      (44 )      —         (44 )      —         (44 ) 
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

EBITDA as adjusted

    $ 75,470     $ 12,716     $ 88,186     $ (22,991 )    $ 65,195  

EBITDA margin as adjusted

      21.2 %      8.0 %      17.1 %      n/a       12.6 % 

 

(1)

Includes gross profit adjustments of $172 and SG&A adjustments of $1,130

 

     Year Ended December 31, 2018  
     Material
Handling		     Distribution     Segment
Total		     Corporate
& Other		     Total  

GAAP Net sales

    $ 417,199     $ 149,636     $ 566,835     $ (100 )    $ 566,735  

GAAP Gross profit

          179,293       —         179,293  

Add: Restructuring expenses and other adjustments

          746       —         746  
      

 

 

    

 

 

    

 

 

  

Gross profit as adjusted

          180,039       —         180,039  

Gross profit margin as adjusted

          31.8 %      n/a       31.8 % 

GAAP Operating income (loss)

      57,948       7,441       65,389       (59,062 )      6,327  

Add: Restructuring expenses and other adjustments(1)

      1,131       —         1,131       —         1,131  

Add: Charges related to 2015 sale of Lawn & Garden business(2)

      —         —         —         33,331       33,331  

Add: Environmental charges

      —         —         —         201       201  

Add: Asset impairment

      —         —         —         308       308  

Add: Loss (gain) on sale of assets

      (208 )      (665 )      (873 )      —         (873 ) 
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Operating income (loss) as adjusted

      58,871       6,776       65,647       (25,222 )      40,425  

Operating income margin as adjusted

      14.1 %      4.5 %      11.6 %      n/a       7.1 % 

Add: Depreciation and amortization

      24,158       1,169       25,327       426       25,753  

Less: Depreciation adjustments

      (213 )      —         (213 )      —         (213 ) 
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

EBITDA as adjusted

    $ 82,816     $ 7,945     $ 90,761     $ (24,796 )    $ 65,965  

EBITDA margin as adjusted

      19.9 %      5.3 %      16.0 %      n/a       11.6 % 

 

(1)

Includes gross profit adjustments of $746 and SG&A adjustments of $385

(2)

Includes $23,008 for provision for loss on note receivable and $10,323 for lease guarantee

 

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 December 31,     Year Ended December 31,  
     2019     2018     2019     2018  

GAAP Operating income (loss)

    $ 8,806     $ 7,033     $ 37,266     $ 6,327  

Add: Restructuring expenses and other adjustments

      265       619       1,302       1,131  

Add: Tuffy acquisition costs

      99       —         590       —    

Less: CEO stock award reversal

      (2,031 )      —         (2,031 )      —    

Add: Asset impairments

      —         —         916       308  

Add: Environmental charges

      —         —         4,000       201  

Add: Charges related to 2015 sale of Lawn & Garden business(1)

      —         —         —         33,331  

Add: Loss (gain) on sale of assets

      —         —         —         (873 ) 
  

 

 

    

 

 

    

 

 

    

 

 

  

Operating income as adjusted

      7,139       7,652       42,043       40,425  

Less: Interest expense, net

      (1,024 )      (1,103 )      (4,083 )      (4,938 ) 
  

 

 

    

 

 

    

 

 

    

 

 

  

Income before taxes as adjusted

      6,115       6,549       37,960       35,487  

Less: Income tax expense(2)

      (1,651 )      (1,781 )      (10,249 )      (9,652 ) 
  

 

 

    

 

 

    

 

 

    

 

 

  

Income from continuing operations as adjusted

    $ 4,464     $ 4,768     $ 27,711     $ 25,835  

Adjusted earnings per diluted share from continuing operations(3)

    $ 0.12     $ 0.13     $ 0.78     $ 0.76  

 

(1)

Includes $23,008 for provision for loss on note receivable and $10,323 for lease guarantee.

(2)

Income taxes are calculated using the normalized effective tax rate for each year. The rate used in 2019 is 27% and in 2018 was 27.2%.

(3)

Adjusted earnings per diluted share for year ended December 31, 2018 was calculated using 33,825,370 shares.

MYERS INDUSTRIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (UNAUDITED)

(Dollars in thousands)

 

     December 31, 2019      December 31, 2018  

Assets

      

Current Assets

      

Cash

    $ 75,527      $ 58,894  

Accounts receivable, net

      62,279        72,939  

Income tax receivable

      142        4,892  

Inventories, net

      44,260        43,596  

Prepaid expenses and other current assets

      2,834        2,534  
  

 

 

     

 

 

  

Total Current Assets

      185,042        182,855  

Property, plant, & equipment, net

      54,964        65,460  

Right of use asset - operating leases

      5,901        —    

Deferred income taxes

      5,807        5,270  

Other assets

      101,425        95,060  
  

 

 

     

 

 

  

Total Assets

    $ 353,139      $ 348,645  
  

 

 

     

 

 

  

Liabilities & Shareholders’ Equity

      

Current Liabilities

      

Accounts payable

    $ 46,867      $ 60,849  

Accrued expenses

      33,701        36,574  

Operating lease liability - short-term

      2,057        —    
  

 

 

     

 

 

  

Total Current Liabilities

      82,625        97,423  

Long-term debt

      77,176        76,790  

Operating lease liability - long-term

      4,074        —    

Other liabilities

      22,582        19,794  

Total Shareholders’ Equity

      166,682        154,638  
  

 

 

     

 

 

  

Total Liabilities & Shareholders’ Equity

    $ 353,139      $ 348,645  
  

 

 

     

 

 

  

MYERS INDUSTRIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

(Dollars in thousands)

 

     Year Ended December 31,  
     2019     2018  

Cash Flows From Operating Activities

     

Net income (loss)

    $ 24,333     $ (3,349 ) 

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

      118       (1,701 ) 
  

 

 

    

 

 

  

Income (loss) from continuing operations

      24,215       (1,648 ) 

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

     

Depreciation

      15,120       17,638  

Amortization

      8,463       8,485  

Accelerated depreciation associated with restructuring activities

      —         16  

Non-cash stock-based compensation expense

      1,715       4,257  

(Gain) loss on disposal of fixed assets

      —         (8 ) 

Provision for loss on note receivable

      —         23,008  

Lease guarantee contingency

      —         10,323  

Deferred taxes

      (922 )      (9,450 ) 

Interest income accrued on note receivable

      —         (361 ) 

Impairment charges

      916       308  

Other

      583       457  

Payments on performance based compensation

      (413 )      (1,249 ) 

Other long-term liabilities

      3,578       180  

Cash flows provided by (used for) working capital

     

Accounts receivable

      12,479       4,927  

Inventories

      2,222       3,151  

Prepaid expenses and other current assets

      (243 )      (353 ) 

Accounts payable and accrued expenses

      (20,687 )      713  
  

 

 

    

 

 

  

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

      47,026       60,394  

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

      7,297       858  
  

 

 

    

 

 

  

Net cash provided by (used for) operating activities

      54,323       61,252  
  

 

 

    

 

 

  

Cash Flows From Investing Activities

     

Capital expenditures

      (10,294 )      (5,123 ) 

Acquisition of business

      (18,000 )      —    

Proceeds from sale of property, plant and equipment

      7,537       2,633  
  

 

 

    

 

 

  

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

      (20,757 )      (2,490 ) 

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

      —         —    
  

 

 

    

 

 

  

Net cash provided by (used for) investing activities

      (20,757 )      (2,490 ) 
  

 

 

    

 

 

  

Cash Flows From Financing Activities

     

Net repayments of credit facility

      —         (74,557 ) 

Cash dividends paid

      (19,316 )      (17,862 ) 

Proceeds from issuance of common stock

      3,336       2,853  

Proceeds from public offering of common stock, net of equity issuance costs

      —         79,522  

Shares withheld for employee taxes on equity awards

      (1,008 )      (714 ) 
  

 

 

    

 

 

  

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

      (16,988 )      (10,758 ) 

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

      —         —    
  

 

 

    

 

 

  

Net cash provided by (used for) financing activities

      (16,988 )      (10,758 ) 
  

 

 

    

 

 

  

Foreign exchange rate effect on cash

      55       (289 ) 
  

 

 

    

 

 

  

Net increase in cash and restricted cash

      16,633       47,715  

Cash and restricted cash at January 1

      58,894       11,179  
  

 

 

    

 

 

  

Cash and restricted cash at December 31

    $ 75,527     $ 58,894  
  

 

 

    

 

 

  

MYERS INDUSTRIES, INC.

RECONCILIATION OF FREE CASH FLOW TO GAAP NET CASH PROVIDED BY

(USED FOR) OPERATING ACTIVITIES – CONTINUING OPERATIONS

(UNAUDITED)

(Dollars in thousands)

 

     YTD
December 31, 2019		            YTD
December 31, 2018		               

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

    $ 47,026        $ 60,394       

Capital expenditures

      (10,294 )         (5,123 )      
  

 

 

       

 

 

       

Free cash flow

    $ 36,732        $ 55,271       
  

 

 

       

 

 

       
     YTD
December 31, 2019		            YTD
September 30, 2019		            Quarter
December 31, 2019		  

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

    $ 47,026       -      $ 39,492       =      $ 7,534  

Capital expenditures

      (10,294 )      -        (5,669 )      =        (4,625 ) 
  

 

 

       

 

 

       

 

 

  

Free cash flow

    $ 36,732       -      $ 33,823       =      $ 2,909  
  

 

 

       

 

 

       

 

 

  
     YTD
December 31, 2018		            YTD
September 30, 2018		            Quarter
December 31, 2018		  

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

    $ 60,394       -      $ 41,121       =      $ 19,273  

Capital expenditures

      (5,123 )      -        (3,560 )      =        (1,563 ) 
  

 

 

       

 

 

       

 

 

  

Free cash flow

    $ 55,271       -      $ 37,561       =      $ 17,710