Exhibit 99.1
| | | | |
 | | | | News Release NYSE: MYE |
Contact(s):
Gregg Branning, Senior Vice President
& Chief Financial Officer (330) 761-6303
Monica Vinay, Director, Investor
& Financial Relations (330) 761-6212
Myers Industries Reports 2013 Second Quarter Results
| | • | | Net sales rose 12.7% year-over-year |
| | • | | Second quarter diluted EPS up 47% compared to last year |
| | • | | Significant profit improvement year-over-year by the Lawn and Garden Segment for the second consecutive quarter; Second phase of restructuring announced |
| | • | | Strong operating cash flow generation |
| | • | | Expect year-over-year EPS growth in the second half of 2013 |
July 18, 2013, Akron, Ohio - Myers Industries, Inc. (NYSE: MYE) today announced results for the second quarter ended June 30, 2013.
Summary
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | Three Months Ended June 30, | | | Six Months Ended June 30, | |
| | | 2013 | | | 2012 | | | % Increase
(Decrease) | | | 2013 | | | 2012 | | | % Increase
(Decrease) | |
| | | (Dollars in thousands, except share data) | |
Net sales | | $ | 204,024 | | | $ | 181,101 | | | | 12.7 | % | | $ | 419,004 | | | $ | 379,890 | | | | 10.3 | % |
Gross profit | | $ | 55,769 | | | $ | 47,364 | | | | 17.7 | % | | $ | 114,087 | | | $ | 105,362 | | | | 8.3 | % |
Gross profit margin | | | 27.3 | % | | | 26.2 | % | | | | | | | 27.2 | % | | | 27.7 | % | | | | |
Income before taxes | | $ | 12,003 | | | $ | 8,938 | | | | 34.3 | % | | $ | 24,155 | | | $ | 24,974 | | | | (3.3 | )% |
Net Income: | | | | | | | | | | | | |
Income | | $ | 8,312 | | | $ | 5,658 | | | | 46.9 | % | | $ | 16,195 | | | $ | 15,643 | | | | 3.5 | % |
Income per diluted share | | $ | 0.25 | | | $ | 0.17 | | | | 47.1 | % | | $ | 0.48 | | | $ | 0.46 | | | | 4.3 | % |
Income before taxes as adjusted* | | $ | 13,388 | | | $ | 9,199 | | | | 45.5 | % | | $ | 26,247 | | | $ | 25,791 | | | | 1.8 | % |
Net income as adjusted*: | | | | | | | | | | | | |
Income | | $ | 8,434 | | | $ | 5,703 | | | | 47.9 | % | | $ | 16,536 | | | $ | 15,990 | | | | 3.4 | % |
Income per diluted share | | $ | 0.25 | | | $ | 0.17 | | | | 47.1 | % | | $ | 0.49 | | | $ | 0.47 | | | | 4.3 | % |
| * | Details regarding the special pre-tax adjusted charges are provided on theReconciliation of Non-GAAP Financial Measures included in this release. |
| | • | | Net sales in the second quarter of 2013 rose 12.7% compared to the second quarter of 2012, reflecting strong sales in the Material Handing Segment. |
| | • | | The overall gross margin was 27.3% in the second quarter of 2013 compared to 26.2% in the second quarter of 2012. The increase was due mostly to cost savings that resulted from productivity improvements and material substitutions. |
| | • | | Net Income per diluted share increased 47% to $0.25 in the second quarter of 2013 compared to $0.17 in the second quarter of 2012, reflecting benefits from the Novel and Jamco acquisitions, cost reductions and the improved performance of the Lawn and Garden Segment. |
President and Chief Executive Officer John C. Orr said, “I am very pleased with our performance in the second quarter as highlighted by our increased earnings per share of 47% year-over-year. I am particularly pleased with the second consecutive quarter of significant profit improvement in our Lawn and Garden Segment which is reflected in the segment’s year-over-year increase in adjusted income before taxes of $2.7 million. Our recent acquisitions also contributed to our earnings per share growth and continue to be accretive.”
Orr continued, “Earlier today, in a separate release, we announced phase two of our Lawn and Garden Segment restructuring which will position the segment for future growth and deliver annual savings of $8.0 million. A portion of those savings will begin to be realized in the fourth quarter of 2013. This second phase, coupled with the $5.0 million savings from the on-going phase one cost reduction initiative, will result in a total annual savings of $13.0 million in 2014.”
Segment Results
The results below are asadjusted andexclude special pre-tax charges as detailed on theReconciliation of Non-GAAP Financial Measures included in this release.
Net sales in theMaterial Handling Segment for the second quarter of 2013 were $83.8 million compared to $60.3 million for the second quarter of 2012. The sales increase was driven by the Novel and Jamco acquisitions, a shift in customer orders into the second quarter and organic growth. Material Handling’s adjusted income before taxes was $11.0 million for the second quarter of 2013 compared to $9.2 million for the second quarter of 2012. The increase in income before taxes was due mostly to the higher sales volumes and the acquisitions of Novel and Jamco.
Net sales in theLawn and Garden Segmentfor the second quarter of 2013 were $40.9 million compared to $42.5 million for the second quarter of 2012. Lawn and Garden’s adjusted income before taxes for the second quarter of 2013 was $1.2 million compared to a loss of $1.5 million for the second quarter of 2012. Productivity improvements and material substitution cost savings were the primary drivers behind the increase in adjusted income before taxes year-over-year.
Net sales in theDistribution Segmentwere $45.9 million for the second quarter of 2013 compared to $44.2 million for the second quarter of 2012. The increase in sales was due mostly to sales of new products and market share gains in equipment sales. Distribution’s adjusted income before taxes was $3.9 million for the second quarter of 2013 compared to $4.1 million for the second quarter of 2012. Distribution continues to be impacted by a slow replacement tire market. Costs associated with an upgrade in the segment’s information technology system contributed to the decline in adjusted income before taxes year-over-year.
Net sales in theEngineered Products Segmentwere $37.6 million for the second quarter of 2013 compared to $38.6 million for the second quarter of 2012. Strong sales in the marine and recreational vehicle markets were more than offset by a decline in custom sales year-over-year. Engineered Products’ adjusted income before taxes was $5.1 million for the second quarter of 2013 compared to $4.7 million for the second quarter of 2012. A favorable product mix and productivity improvements led to the increase in income before taxes year-over-year, despite the lower sales.
Other Financial Items
For the six months ended June 30, 2013, cash flow provided by operations was $30.1 million compared to $7.9 million in the first half of 2012, reflecting efforts to better manage working capital.
Capital expenditures totaled $10.2 million for the six months ended June 30, 2013 and are still forecasted to be approximately $30 million to $35 million in 2013.
Outlook
The Company expects continued year-over-year improvement in each of the next two quarters in both sales and adjusted earnings excluding special pre-tax adjusted charges. These improvements will come from our recent acquisitions, organic growth, continued reinvestment in our operations, new product introductions, cost savings and the expected benefits from the Lawn and Garden Segment restructuring initiatives.
Conference Call Details
The Company will host an earnings conference call and webcast for investors and analysts on Thursday, July 18, 2013 at 10:00 a.m. ET. The call is anticipated to last approximately one hour and may be accessed at (877) 407-8033.
Callers are asked to sign on at least five minutes in advance. The call will be available as a webcast through the Company’s web site,www.myersindustries.com. Click on the Investor Relations tab to access the webcast. Webcast attendees will be in a listen-only mode. An archived replay of the call will also be available on the site shortly after the event. To listen to a telephone replay, callers should dial: (US) 877-660-6853 or (Int’l) 201-612-7415. The replay passcode is Conference ID #417438.
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. Visitwww.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 athttp://www.sec.gov, and on the Company’s Investor Relations section of its web site athttp://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 SIX MONTHS ENDED JUNE 30, 2013 AND 2012
(Dollars in thousands, except share data)
| | | | | | | | | | | | | | | | |
| | | For the Quarter Ended | | | For the Six Months Ended | |
| | | June 30, 2013 | | | June 30, 2012 | | | June 30, 2013 | | | June 30, 2012 | |
Net sales | | $ | 204,024 | | | $ | 181,101 | | | $ | 419,004 | | | $ | 379,890 | |
Cost of sales | | | 148,255 | | | | 133,737 | | | | 304,917 | | | | 274,528 | |
| | | | | | | | | | | | | | | | |
Gross profit | | | 55,769 | | | | 47,364 | | | | 114,087 | | | | 105,362 | |
Selling, general and administrative expenses | | | 42,650 | | | | 37,372 | | | | 87,724 | | | | 78,253 | |
| | | | | | | | | | | | | | | | |
Operating income | | | 13,119 | | | | 9,992 | | | | 26,363 | | | | 27,109 | |
Interest expense, net | | | 1,116 | | | | 1,054 | | | | 2,208 | | | | 2,135 | |
| | | | | | | | | | | | | | | | |
Income before income taxes | | | 12,003 | | | | 8,938 | | | | 24,155 | | | | 24,974 | |
Income tax expense | | | 3,691 | | | | 3,280 | | | | 7,960 | | | | 9,331 | |
| | | | | | | | | | | | | | | | |
Net income | | $ | 8,312 | | | $ | 5,658 | | | $ | 16,195 | | | $ | 15,643 | |
| | | | | | | | | | | | | | | | |
Income per common share: | | | | | | | | | | | | | | | | |
Basic | | $ | 0.25 | | | $ | 0.17 | | | $ | 0.48 | | | $ | 0.47 | |
Diluted | | $ | 0.25 | | | $ | 0.17 | | | $ | 0.48 | | | $ | 0.46 | |
Weighted Average Common Shares Outstanding | | | | | | | | | | | | | | | | |
Basic | | | 33,559,398 | | | | 33,595,637 | | | | 33,529,004 | | | | 33,525,444 | |
Diluted | | | 33,877,952 | | | | 34,272,693 | | | | 33,897,962 | | | | 34,121,486 | |
MYERS INDUSTRIES, INC.
SALES AND EARNINGS BY SEGMENT (UNAUDITED)
(Dollars in thousands)
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | Second Quarter Ended June 30, | | | Six Months Ended June 30, | |
| | | 2013 | | | 2012 | | | % Change | | | 2013 | | | 2012 | | | % Change | |
Net Sales | | | | | | | | | | | | |
Material Handling | | $ | 83,814 | | | $ | 60,260 | | | | 39.1 | % | | $ | 163,803 | | | $ | 125,481 | | | | 30.5 | % |
Lawn and Garden | | | 40,889 | | | | 42,482 | | | | (3.7 | )% | | | 101,252 | | | | 101,666 | | | | (0.4 | )% |
Distribution | | | 45,893 | | | | 44,188 | | | | 3.9 | % | | | 88,542 | | | | 86,926 | | | | 1.9 | % |
Engineered Products | | | 37,608 | | | | 38,642 | | | | (2.7 | )% | | | 74,564 | | | | 75,869 | | | | (1.7 | )% |
Inter-company Sales | | | (4,180 | ) | | | (4,471 | ) | | | — | | | | (9,157 | ) | | | (10,052 | ) | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total | | $ | 204,024 | | | $ | 181,101 | | | | 12.7 | % | | $ | 419,004 | | | $ | 379,890 | | | | 10.3 | % |
| | | | | | | | | | | | | | | | | | | | | | | | |
Income (Loss) | | | | | | | | | | | | |
Before Income Taxes | | | | | | | | | | | | |
Material Handling | | $ | 11,010 | | | $ | 9,223 | | | | 19.4 | % | | $ | 20,715 | | | $ | 22,373 | | | | (7.4 | )% |
Lawn and Garden | | | (109 | ) | | | (1,942 | ) | | | — | | | | 2,172 | | | | (724 | ) | | | — | |
Distribution | | | 3,864 | | | | 4,298 | | | | (10.1 | )% | | | 6,703 | | | | 7,809 | | | | (14.2 | )% |
Engineered Products | | | 5,134 | | | | 4,660 | | | | 10.2 | % | | | 10,211 | | | | 9,251 | | | | 10.4 | % |
Corporate | | | (7,896 | ) | | | (7,301 | ) | | | — | | | | (15,646 | ) | | | (13,735 | ) | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total | | $ | 12,003 | | | $ | 8,938 | | | | 34.3 | % | | $ | 24,155 | | | $ | 24,974 | | | | (3.3 | )% |
| | | | | | | | | | | | | | | | | | | | | | | | |
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
June 30 | | | Six Months Ended
June 30 | |
| | | 2013 | | | 2012 | | | 2013 | | | 2012 | |
Material Handling | | | | | | | | | | | | | | | | |
Income before taxes as reported | | $ | 11.0 | | | $ | 9.2 | | | $ | 20.7 | | | $ | 22.4 | |
Restructuring expenses | | | 0.0 | | | | 0.0 | | | | 0.2 | | | | 0.0 | |
| | | | | | | | | | | | | | | | |
Income before taxes as adjusted | | | 11.0 | | | | 9.2 | | | | 20.9 | | | | 22.4 | |
Lawn and Garden | | | | | | | | | | | | | | | | |
Income (loss) before taxes as reported | | | (0.1 | ) | | | (1.9 | ) | | | 2.2 | | | | (0.7 | ) |
Restructuring expenses | | | 0.7 | | | | 0.4 | | | | 1.1 | | | | 0.4 | |
Loss on disposal of assets | | | 0.6 | | | | 0.0 | | | | 0.6 | | | | 0.0 | |
| | | | | | | | | | | | | | | | |
Income before taxes as adjusted | | | 1.2 | | | | (1.5 | ) | | | 3.9 | | | | (0.3 | ) |
Distribution | | | | | | | | | | | | | | | | |
Income before taxes as reported | | | 3.9 | | | | 4.3 | | | | 6.7 | | | | 7.8 | |
Restructuring expenses | | | 0.0 | | | | 0.1 | | | | 0.1 | | | | 0.5 | |
Gain on building sale | | | 0.0 | | | | (0.3 | ) | | | 0.0 | | | | (0.3 | ) |
| | | | | | | | | | | | | | | | |
Income before taxes as adjusted | | | 3.9 | | | | 4.1 | | | | 6.8 | | | | 8.0 | |
Engineered Products | | | | | | | | | | | | | | | | |
Income before taxes as reported | | | 5.1 | | | | 4.6 | | | | 10.2 | | | | 9.2 | |
Restructuring expenses | | | 0.0 | | | | 0.1 | | | | 0.0 | | | | 0.2 | |
| | | | | | | | | | | | | | | | |
Income before taxes as adjusted | | | 5.1 | | | | 4.7 | | | | 10.2 | | | | 9.4 | |
Corporate and interest expense | | | | | | | | | | | | | | | | |
Income (loss) before taxes as reported | | | (7.9 | ) | | | (7.3 | ) | | | (15.6 | ) | | | (13.7 | ) |
Income (loss) before taxes as adjusted | | | (7.9 | ) | | | (7.3 | ) | | | (15.6 | ) | | | (13.7 | ) |
Consolidated | | | | | | | | | | | | | | | | |
Income before taxes as reported | | | 12.0 | | | | 8.9 | | | | 24.2 | | | | 25.0 | |
Restructuring expenses and other adjustments | | | 1.4 | | | | 0.3 | | | | 2.0 | | | | 0.8 | |
| | | | | | | | | | | | | | | | |
Income before taxes as adjusted | | | 13.4 | | | | 9.2 | | | | 26.2 | | | | 25.8 | |
Income taxes | | | 5.0 | | | | 3.5 | | | | 9.7 | | | | 9.8 | |
| | | | | | | | | | | | | | | | |
Net Income as adjusted | | $ | 8.4 | | | $ | 5.7 | | | $ | 16.5 | | | $ | 16.0 | |
| | | | | | | | | | | | | | | | |
Adjusted earnings per diluted share | | $ | 0.25 | | | $ | 0.17 | | | $ | 0.49 | | | $ | 0.47 | |
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)
| | | | | | | | |
| | | June 30,
2013 | | | December 31,
2012 | |
Assets | | | | | | | | |
Current Assets | | | | | | | | |
Cash | | $ | 22,258 | | | $ | 3,948 | |
Accounts receivable, net | | | 108,518 | | | | 115,508 | |
Inventories | | | 106,115 | | | | 107,502 | |
Other | | | 12,023 | | | | 12,638 | |
| | | | | | | | |
Total Current Assets | | | 248,914 | | | | 239,596 | |
Other Assets | | | 91,802 | | | | 94,777 | |
Property, Plant, & Equipment, Net | | | 142,255 | | | | 150,483 | |
| | | | | | | | |
Total Assets | | $ | 482,971 | | | $ | 484,856 | |
| | | | | | | | |
Liabilities & Shareholders’ Equity | | | | | | | | |
Current Liabilities | | | | | | | | |
Accounts payable | | $ | 64,717 | | | $ | 72,417 | |
Accrued expenses | | | 39,369 | | | | 42,060 | |
| | | | | | | | |
Total Current Liabilities | | | 104,086 | | | | 114,477 | |
Long-term debt | | | 95,988 | | | | 92,814 | |
Other liabilities | | | 17,911 | | | | 17,865 | |
Deferred income taxes | | | 29,966 | | | | 29,678 | |
Total Shareholders’ Equity | | | 235,020 | | | | 230,022 | |
| | | | | | | | |
Total Liabilities & Shareholders’ Equity | | $ | 482,971 | | | $ | 484,856 | |
| | | | | | | | |
MYERS INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED)
FOR THE SIX MONTHS ENDED JUNE 30, 2013 AND 2012
(Dollars in thousands)
| | | | | | | | |
| | | June 30, 2013 | | | June 30, 2012 | |
Cash Flows From Operating Activities | | | | | | | | |
Net income | | $ | 16,195 | | | $ | 15,643 | |
Items not affecting use of cash | | | | | | | | |
Depreciation | | | 16,146 | | | | 14,737 | |
Loss on disposal of assets | | | 616 | | | | — | |
Amortization of intangible assets | | | 2,046 | | | | 1,514 | |
Non-cash stock compensation | | | 1,532 | | | | 1,556 | |
Provision for (recovery of) loss on accounts receivable | | | 496 | | | | (1,178 | ) |
Deferred taxes | | | 2,140 | | | | (18 | ) |
Other long-term liabilities | | | 334 | | | | 785 | |
Gain on sale of property, plant and equipment | | | — | | | | (558 | ) |
Other | | | 11 | | | | 50 | |
Cash flow provided by (used for) working capital, net of acquisitions: | | | | | | | | |
Accounts receivable | | | 5,216 | | | | 10,384 | |
Inventories | | | (735 | ) | | | (12,285 | ) |
Prepaid expenses | | | (1,048 | ) | | | (3,743 | ) |
Accounts payable and accrued expenses | | | (12,812 | ) | | | (18,967 | ) |
| | | | | | | | |
Net cash provided by operating activities | | | 30,137 | | | | 7,920 | |
| | | | | | | | |
Cash Flows From Investing Activities | | | | | | | | |
Capital expenditures | | | (10,216 | ) | | | (8,386 | ) |
Acquisition of business, net of cash acquired | | | (600 | ) | | | — | |
Proceeds from sale of property, plant and equipment | | | — | | | | 1,805 | |
Other | | | (11 | ) | | | (149 | ) |
| | | | | | | | |
Net cash used for investing activities | | | (10,827 | ) | | | (6,730 | ) |
| | | | | | | | |
Cash Flows From Financing Activities | | | | | | | | |
Repayment of long-term debt | | | — | | | | (305 | ) |
Net borrowing on credit facility | | | 3,173 | | | | 28,374 | |
Cash dividends paid | | | (3,019 | ) | | | (4,967 | ) |
Proceeds from issuance of common stock | | | 3,262 | | | | 2,822 | |
Tax benefit from options | | | 50 | | | | — | |
Repurchase of common stock | | | (3,982 | ) | | | — | |
| | | | | | | | |
Net cash (used for) provided by financing activities | | | (516 | ) | | | 25,924 | |
| | | | | | | | |
Foreign Exchange Rate Effect on Cash | | | (484 | ) | | | 1,697 | |
| | | | | | | | |
Net increase in cash | | | 18,310 | | | | 28,811 | |
Cash at January 1 | | | 3,948 | | | | 6,801 | |
| | | | | | | | |
Cash at June 30 | | $ | 22,258 | | | $ | 35,612 | |
| | | | | | | | |
