Myers Industries Reports 2019 Third Quarter Results

Nachrichtenquelle: Business Wire (engl.)
05.11.2019, 12:30  |  246   |   |   

Myers Industries, Inc. (NYSE: MYE), a manufacturer of polymer products for industrial, agricultural, automotive, commercial and consumer markets, today announced results for the third quarter ended September 30, 2019.

Third Quarter 2019 Financial Highlights

  • GAAP income per diluted share from continuing operations was $0.15, compared to a loss of $0.60 for the third quarter of 2018, which included a charge of $33.3 million related to the 2015 sale of the Company’s Lawn and Garden business; adjusted income per diluted share from continuing operations was $0.15, which was flat compared to the third quarter of 2018
  • Net sales decreased 7.2% to $125.5 million
  • Adjusted operating income increased 7.9% to $8.5 million, despite a $3.5 million charge for estimated product replacement costs related to a manufacturing defect in certain boxes produced within the Material Handling Segment in 2019
  • Generated cash flow from continuing operations of $23.3 million and free cash flow of $22.1 million
  • Completed acquisition of Tuffy Manufacturing for $18 million in August 2019

Updated Full-Year 2019 Outlook

  • Full-year 2019 net sales are now expected to be down high single digits due primarily to soft demand in the Company’s food and beverage end market, which is anticipated to continue during the fourth quarter
  • Full-year GAAP income per diluted share from continuing operations is expected to be in the range of $0.65 to $0.70 for 2019; adjusted income per diluted share from continuing operations is expected to be in the range of $0.75 to $0.80

“Third quarter adjusted operating income grew despite a decrease in net sales and the charge for estimated product replacement costs in our Material Handling Segment. Net sales were down 7.2% due to softer than anticipated demand in our food and beverage and industrial end markets coupled with continued weakness in our consumer and vehicle end markets. The volume declines were more than offset by cost decreases and savings from the Distribution Segment transformation,” said Andrean Horton, Interim President and Chief Executive Officer of Myers Industries.

Ms. Horton continued, “Within our Distribution Segment, we continued to make progress and execute on the transformation while also integrating the recently acquired Tuffy Manufacturing Industries, Inc. The 2019 third quarter marked the fourth consecutive quarter of net sales growth with adjusted EBITDA increasing by 38.9%. We continue to be on track to meet our Distribution Segment EBITDA margin goal of 10% by the end of 2020.”

Overall Results

Third quarter 2019 net sales decreased $9.7 million or 7.2% to $125.5 million, compared to the third quarter of 2018. The decrease was the result of a sales decline in the Material Handling Segment. Gross profit decreased $2.5 million to $39.6 million, compared to the third quarter of 2018. Gross profit margin increased 40 basis points to 31.5%. Favorable price-cost margin more than offset the lower sales volume and $3.5 million charge taken during the quarter for estimated product replacement costs. Selling, general and administrative expenses decreased $2.9 million to $31.5 million, compared to the third quarter of 2018, due primarily to lower variable compensation costs and savings from the Distribution Segment’s transformation initiatives. GAAP income per diluted share from continuing operations was $0.15, compared to a loss of $0.60 for the third quarter 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 $0.15, which was flat compared to the third quarter of 2018.

 

 

Quarter Ended September 30,

 

Nine Months Ended September 30,

(Dollars in thousands, except per share data)

 

2019

 

2018

 

% Inc
(Dec)

 

2019

 

2018

 

% Inc
(Dec)

Net sales

 

$

125,480

 

 

$

135,219

 

 

 

(7.2

)%

 

$

398,880

 

 

$

428,347

 

 

 

(6.9

)%

Gross profit

 

$

39,586

 

 

$

42,091

 

 

 

(6.0

)%

 

$

132,081

 

 

$

137,197

 

 

 

(3.7

)%

Gross profit margin

 

 

31.5

%

 

 

31.1

%

 

 

 

 

 

 

33.1

%

 

 

32.0

%

 

 

 

 

Operating income (loss)

 

$

8,060

 

 

$

(25,839

)

 

----

 

 

$

28,460

 

 

$

(706

)

 

----

 

Income (loss) from continuing operations:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income (loss)

 

$

5,219

 

 

$

(21,137

)

 

----

 

 

$

18,468

 

 

$

(4,774

)

 

----

 

Income (loss) per diluted share

 

$

0.15

 

 

$

(0.60

)

 

----

 

 

$

0.52

 

 

$

(0.15

)

 

----

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income as adjusted(1)

 

$

8,516

 

 

$

7,893

 

 

 

7.9

%

 

$

34,905

 

 

$

32,773

 

 

 

6.5

%

Income from continuing operations as adjusted(1):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income

 

$

5,492

 

 

$

5,258

 

 

 

4.4

%

 

$

23,248

 

 

$

21,704

 

 

 

7.1

%

Income per diluted share

 

$

0.15

 

 

$

0.15

 

 

 

0.0

%

 

$

0.65

 

 

$

0.65

 

 

 

0.0

%

EBITDA as adjusted(1)

 

$

14,011

 

 

$

14,157

 

 

 

(1.0

)%

 

$

52,260

 

 

$

52,136

 

 

 

0.2

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

Segment Results

Net sales in the Material Handling Segment (consumer, food and beverage, industrial and vehicle end markets) for the third quarter of 2019 decreased $13.6 million or 13.9% compared to the third quarter of 2018. The decrease in net sales was primarily due to sales decreases in the Company’s food and beverage (lower seed box sales) and industrial (lower military product sales) end markets. The segment’s adjusted EBITDA declined 9.7% to $15.4 million for the third quarter of 2019, compared to $17.1 million for the third quarter of 2018. The lower sales volume and charge for estimated product replacement costs were partially offset by favorable price-cost margin and lower variable incentive compensation costs. Material Handling adjusted EBITDA margin for the third quarter increased 90 basis points to 18.4%.

Net sales in the Distribution Segment (auto aftermarket end market) for the third quarter of 2019 increased $3.8 million or 10.2% compared to the third quarter of 2018. Incremental sales due to the August 2019 Tuffy acquisition totaled $2.4 million. The segment’s adjusted EBITDA increased 38.9% to $4.0 million compared to the third quarter of 2018, due primarily to savings from the segment’s transformation initiatives, higher sales volume and the Tuffy acquisition. The Company continues 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 EBITDA margin to 10% by the end of 2020. Distribution adjusted EBITDA margin for the third quarter increased 190 basis points to 9.5%.

2019 Outlook

For the full-year 2019, the Company now anticipates that total revenue year-over-year will be down high single digits versus its previous expectation of down low-to-mid single digits year-over-year. While the Company anticipates full-year sales growth in its Distribution Segment, it expects that growth to be more than offset by lower year-over-year sales in its Material Handling Segment.

“The Tuffy acquisition completed in the third quarter has already contributed to the Distribution Segment’s growth and we expect that acquisition along with our strategic initiatives to result in increased sales for the fourth quarter as well,” said Ms. Horton. “With respect to our Material Handling Segment, there continues to be uncertainty in the farm sector due to the late planting season, and some of our food and beverage customers have indicated that demand for the upcoming season will be softer than expected. Additionally, sales in our industrial end market declined year-over-year during the third quarter due to softer than anticipated demand for our military products. Although we anticipate continued sales growth in Distribution, we believe those sales increases won’t be enough to overcome the expected market declines in Material Handling. As a result, we are adjusting our full-year sales outlook to reflect the impact of these updated expectations.”

The Company anticipates depreciation and amortization to be approximately $24 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 $0.65 to $0.70, which is updated from the Company’s previous estimate of $0.62 to $0.72. The updated GAAP earnings outlook reflects the decreased sales outlook and the $3.5 million charge for estimated product replacement costs, partially offset by a decrease in incentive compensation costs and an anticipated reversal of approximately $2.3 million of stock compensation costs during the fourth quarter of 2019, resulting from the departure of the Company’s CEO in October 2019. The Company anticipates that adjusted income per diluted share from continuing operations will be in the range of $0.75 to $0.80, which is updated from the Company’s previous estimate of $0.75 to $0.85, and is based on a fully diluted share count of 36 million shares. The updated adjusted earnings outlook reflects the same items mentioned above, except for the anticipated reversal of approximately $2.3 million of stock compensation costs during the fourth quarter of 2019, which the Company expects to exclude from adjusted earnings. 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 Tuesday, November 5, 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 8985798. 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 8985798.

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 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 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.

MYERS INDUSTRIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

(Dollars in thousands, except share and per share data)

 

 

 

Quarter Ended

 

Nine Months Ended

 

 

September 30,
2019

 

September 30,
2018

 

September 30,
2019

 

September 30,
2018

Net sales

 

$

125,480

 

 

$

135,219

 

 

$

398,880

 

 

$

428,347

 

Cost of sales

 

 

85,894

 

 

 

93,128

 

 

 

266,799

 

 

 

291,150

 

Gross profit

 

 

39,586

 

 

 

42,091

 

 

 

132,081

 

 

 

137,197

 

Selling, general and administrative expenses

 

 

31,515

 

 

 

34,381

 

 

 

102,792

 

 

 

104,360

 

(Gain) loss on disposal of fixed assets

 

 

11

 

 

 

218

 

 

 

(87

)

 

 

(96

)

Impairment charges

 

 

 

 

 

 

 

 

916

 

 

 

308

 

Other expenses

 

 

 

 

 

33,331

 

 

 

 

 

 

33,331

 

Operating income (loss)

 

 

8,060

 

 

 

(25,839

)

 

 

28,460

 

 

 

(706

)

Interest expense, net

 

 

993

 

 

 

883

 

 

 

3,059

 

 

 

3,835

 

Income (loss) from continuing operations before income taxes

 

 

7,067

 

 

 

(26,722

)

 

 

25,401

 

 

 

(4,541

)

Income tax expense (benefit)

 

 

1,848

 

 

 

(5,585

)

 

 

6,933

 

 

 

233

 

Income (loss) from continuing operations

 

 

5,219

 

 

 

(21,137

)

 

 

18,468

 

 

 

(4,774

)

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

 

 

 

 

 

(2

)

 

 

127

 

 

 

(913

)

Net income (loss)

 

$

5,219

 

 

$

(21,139

)

 

$

18,595

 

 

$

(5,687

)

Income (loss) per common share from continuing operations:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.15

 

 

$

(0.60

)

 

$

0.52

 

 

$

(0.15

)

Diluted

 

$

0.15

 

 

$

(0.60

)

 

$

0.52

 

 

$

(0.15

)

Income (loss) per common share from discontinued operations:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

 

 

$

 

 

$

 

 

$

(0.02

)

Diluted

 

$

 

 

$

 

 

$

 

 

$

(0.02

)

Net income (loss) per common share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.15

 

 

$

(0.60

)

 

$

0.52

 

 

$

(0.17

)

Diluted

 

$

0.15

 

 

$

(0.60

)

 

$

0.52

 

 

$

(0.17

)

Weighted average common shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

35,495,157

 

 

 

35,229,171

 

 

 

35,451,980

 

 

 

32,783,853

 

Diluted

 

 

35,759,032

 

 

 

35,229,171

 

 

 

35,823,231

 

 

 

32,783,853

 

MYERS INDUSTRIES, INC.

SALES AND EARNINGS BY SEGMENT (UNAUDITED)

(Dollars in thousands)

 

 

 

Quarter Ended September 30,

 

Nine Months Ended September 30,

 

 

2019

 

2018

 

% Change

 

2019

 

2018

 

% Change

Net sales

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Material Handling

 

$

84,110

 

 

$

97,682

 

 

 

(13.9

)%

 

$

282,963

 

 

$

317,621

 

 

 

(10.9

)%

Distribution

 

 

41,388

 

 

 

37,557

 

 

 

10.2

%

 

 

115,957

 

 

 

110,815

 

 

 

4.6

%

Inter-company Sales

 

 

(18

)

 

 

(20

)

 

 

-

 

 

 

(40

)

 

 

(89

)

 

 

-

 

Total

 

$

125,480

 

 

$

135,219

 

 

 

(7.2

)%

 

$

398,880

 

 

$

428,347

 

 

 

(6.9

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income (loss)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Material Handling

 

$

10,385

 

 

$

10,812

 

 

 

(3.9

)%

 

$

44,181

 

 

$

44,865

 

 

 

(1.5

)%

Distribution

 

 

3,382

 

 

 

2,546

 

 

 

32.8

%

 

 

6,923

 

 

 

7,070

 

 

 

(2.1

)%

Corporate

 

 

(5,707

)

 

 

(39,197

)

 

 

-

 

 

 

(22,644

)

 

 

(52,641

)

 

 

-

 

Total

 

$

8,060

 

 

$

(25,839

)

 

 

(131.2

)%

 

$

28,460

 

 

$

(706

)

 

 

(4131.2

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income (loss) as adjusted

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Material Handling

 

$

10,385

 

 

$

11,213

 

 

 

(7.4

)%

 

$

45,269

 

 

$

45,370

 

 

 

(0.2

)%

Distribution

 

 

3,603

 

 

 

2,546

 

 

 

41.5

%

 

 

8,045

 

 

 

6,405

 

 

 

25.6

%

Corporate

 

 

(5,472

)

 

 

(5,866

)

 

 

-

 

 

 

(18,409

)

 

 

(19,002

)

 

 

-

 

Total

 

$

8,516

 

 

$

7,893

 

 

 

7.9

%

 

$

34,905

 

 

$

32,773

 

 

 

6.5

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income margin as adjusted

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Material Handling

 

 

12.3

%

 

 

11.5

%

 

 

 

 

 

 

16.0

%

 

 

14.3

%

 

 

 

 

Distribution

 

 

8.7

%

 

 

6.8

%

 

 

 

 

 

 

6.9

%

 

 

5.8

%

 

 

 

 

Corporate

 

n/a

 

 

n/a

 

 

 

 

 

 

n/a

 

 

n/a

 

 

 

 

 

Total

 

 

6.8

%

 

 

5.8

%

 

 

 

 

 

 

8.8

%

 

 

7.7

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EBITDA as adjusted

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Material Handling

 

$

15,444

 

 

$

17,107

 

 

 

(9.7

)%

 

$

61,441

 

 

$

63,499

 

 

 

(3.2

)%

Distribution

 

 

3,952

 

 

 

2,845

 

 

 

38.9

%

 

 

8,919

 

 

 

7,314

 

 

 

21.9

%

Corporate

 

 

(5,385

)

 

 

(5,795

)

 

 

-

 

 

 

(18,100

)

 

 

(18,677

)

 

 

-

 

Total

 

$

14,011

 

 

$

14,157

 

 

 

(1.0

)%

 

$

52,260

 

 

$

52,136

 

 

 

0.2

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EBITDA margin as adjusted

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Material Handling

 

 

18.4

%

 

 

17.5

%

 

 

 

 

 

 

21.7

%

 

 

20.0

%

 

 

 

 

Distribution

 

 

9.5

%

 

 

7.6

%

 

 

 

 

 

 

7.7

%

 

 

6.6

%

 

 

 

 

Corporate

 

n/a

 

 

n/a

 

 

 

 

 

 

n/a

 

 

n/a

 

 

 

 

 

Total

 

 

11.2

%

 

 

10.5

%

 

 

 

 

 

 

13.1

%

 

 

12.2

%

 

 

 

 

MYERS INDUSTRIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (UNAUDITED)

(Dollars in thousands)

 

 

 

September 30, 2019

 

December 31, 2018

Assets

 

 

 

 

 

 

 

 

Current Assets

 

 

 

 

 

 

 

 

Cash

 

$

74,814

 

 

$

58,894

 

Accounts receivable, net

 

 

65,129

 

 

 

72,939

 

Income tax receivable

 

 

 

 

 

4,892

 

Inventories

 

 

44,009

 

 

 

43,596

 

Prepaid expenses and other current assets

 

 

3,441

 

 

 

2,534

 

Total Current Assets

 

 

187,393

 

 

 

182,855

 

Property, plant, & equipment, net

 

 

56,096

 

 

 

65,460

 

Right of use asset - operating leases

 

 

6,384

 

 

 

 

Deferred income taxes

 

 

6,074

 

 

 

5,270

 

Other assets

 

 

101,339

 

 

 

95,060

 

Total Assets

 

$

357,286

 

 

$

348,645

 

Liabilities & Shareholders' Equity

 

 

 

 

 

 

 

 

Current Liabilities

 

 

 

 

 

 

 

 

Accounts payable

 

$

54,196

 

 

$

60,849

 

Accrued expenses

 

 

32,867

 

 

 

36,574

 

Operating lease liability - short-term

 

 

2,215

 

 

 

 

Total Current Liabilities

 

 

89,278

 

 

 

97,423

 

Long-term debt

 

 

77,080

 

 

 

76,790

 

Operating lease liability - long-term

 

 

4,402

 

 

 

 

Other liabilities

 

 

22,706

 

 

 

19,794

 

Total Shareholders' Equity

 

 

163,820

 

 

 

154,638

 

Total Liabilities & Shareholders' Equity

 

$

357,286

 

 

$

348,645

 

MYERS INDUSTRIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

(Dollars in thousands)

 

 

 

Nine Months Ended September 30,

 

 

2019

 

2018

Cash Flows From Operating Activities

 

 

 

 

 

 

 

 

Net income (loss)

 

$

18,595

 

 

$

(5,687

)

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

 

 

127

 

 

 

(913

)

Income (loss) from continuing operations

 

 

18,468

 

 

 

(4,774

)

Adjustments to reconcile income (loss) from continuing operations to net cash

provided by (used for) operating activities

 

 

 

 

 

 

 

 

Depreciation

 

 

11,505

 

 

 

13,329

 

Amortization

 

 

6,183

 

 

 

6,455

 

Accelerated depreciation associated with restructuring activities

 

 

 

 

 

16

 

Non-cash stock-based compensation expense

 

 

3,348

 

 

 

3,532

 

(Gain) loss on disposal of fixed assets

 

 

(87

)

 

 

(96

)

Provision for loss on note receivable

 

 

 

 

 

23,008

 

Lease guarantee contingency

 

 

 

 

 

10,323

 

Deferred taxes

 

 

 

 

 

(7,666

)

Impairment charges

 

 

916

 

 

 

308

 

Other

 

 

441

 

 

 

(150

)

Payments on performance based compensation

 

 

(413

)

 

 

(1,249

)

Other long-term liabilities

 

 

3,388

 

 

 

(313

)

Cash flows provided by (used for) working capital

 

 

 

 

 

 

 

 

Accounts receivable

 

 

9,775

 

 

 

7,890

 

Inventories

 

 

2,386

 

 

 

2,708

 

Prepaid expenses and other current assets

 

 

(877

)

 

 

(853

)

Accounts payable and accrued expenses

 

 

(15,541

)

 

 

(11,347

)

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

 

 

39,492

 

 

 

41,121

 

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

 

 

7,297

 

 

 

858

 

Net cash provided by (used for) operating activities

 

 

46,789

 

 

 

41,979

 

Cash Flows From Investing Activities

 

 

 

 

 

 

 

 

Capital expenditures

 

 

(5,669

)

 

 

(3,560

)

Acquisition of business

 

 

(18,000

)

 

 

 

Proceeds from sale of property, plant and equipment

 

 

7,514

 

 

 

2,633

 

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

 

 

(16,155

)

 

 

(927

)

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

 

 

 

 

 

 

Net cash provided by (used for) investing activities

 

 

(16,155

)

 

 

(927

)

Cash Flows From Financing Activities

 

 

 

 

 

 

 

 

Net borrowing (repayments) on credit facility

 

 

 

 

 

(74,557

)

Cash dividends paid

 

 

(14,524

)

 

 

(13,039

)

Proceeds from issuance of common stock

 

 

755

 

 

 

2,825

 

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

 

 

 

 

 

79,522

 

Shares withheld for employee taxes on equity awards

 

 

(985

)

 

 

(446

)

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

 

 

(14,754

)

 

 

(5,695

)

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

 

 

 

 

 

 

Net cash provided by (used for) financing activities

 

 

(14,754

)

 

 

(5,695

)

Foreign exchange rate effect on cash

 

 

40

 

 

 

(31

)

Net increase in cash and restricted cash

 

 

15,920

 

 

 

35,326

 

Cash and restricted cash at January 1

 

 

58,894

 

 

 

11,179

 

Cash and restricted cash at September 30

 

$

74,814

 

 

$

46,505

 

MYERS INDUSTRIES, INC.

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

GROSS PROFIT, OPERATING INCOME AND EBITDA (UNAUDITED)

(Dollars in thousands)

 

 

 

Quarter Ended September 30, 2019

 

 

Material
Handling

 

Distribution

 

Segment
Total

 

Corporate
& Other

 

Total

GAAP Net sales

 

$

84,110

 

 

$

41,388

 

 

$

125,498

 

 

$

(18

)

 

$

125,480

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP Gross profit

 

 

 

 

 

 

 

 

 

 

39,586

 

 

 

 

 

 

39,586

 

Add: Restructuring expenses and other adjustments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross profit as adjusted

 

 

 

 

 

 

 

 

 

 

39,586

 

 

 

 

 

 

39,586

 

Gross profit margin as adjusted

 

 

 

 

 

 

 

 

 

 

31.5

%

 

n/a

 

 

 

31.5

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP Operating income (loss)

 

 

10,385

 

 

 

3,382

 

 

 

13,767

 

 

 

(5,707

)

 

 

8,060

 

Less: Restructuring expenses and other adjustments

 

 

 

 

 

(36

)

 

 

(36

)

 

 

 

 

 

(36

)

Add: Tuffy acquisition costs

 

 

 

 

 

257

 

 

 

257

 

 

 

235

 

 

 

492

 

Operating income (loss) as adjusted

 

 

10,385

 

 

 

3,603

 

 

 

13,988

 

 

 

(5,472

)

 

 

8,516

 

Operating income margin as adjusted

 

 

12.3

%

 

 

8.7

%

 

 

11.1

%

 

n/a

 

 

 

6.8

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Add: Depreciation and amortization

 

 

5,059

 

 

 

349

 

 

 

5,408

 

 

 

87

 

 

 

5,495

 

Less: Depreciation adjustments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EBITDA as adjusted

 

$

15,444

 

 

$

3,952

 

 

$

19,396

 

 

$

(5,385

)

 

$

14,011

 

EBITDA margin as adjusted

 

 

18.4

%

 

 

9.5

%

 

 

15.5

%

 

n/a

 

 

 

11.2

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Quarter Ended September 30, 2018

 

 

Material
Handling

 

Distribution

 

Segment
Total

 

Corporate
& Other

 

Total

GAAP Net sales

 

$

97,682

 

 

$

37,557

 

 

$

135,239

 

 

$

(20

)

 

$

135,219

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP Gross profit

 

 

 

 

 

 

 

 

 

 

42,091

 

 

 

 

 

 

42,091

 

Add: Restructuring expenses and other adjustments

 

 

 

 

 

 

 

 

 

 

286

 

 

 

 

 

 

286

 

Gross profit as adjusted

 

 

 

 

 

 

 

 

 

 

42,377

 

 

 

 

 

 

42,377

 

Gross profit margin as adjusted

 

 

 

 

 

 

 

 

 

 

31.3

%

 

n/a

 

 

 

31.3

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP Operating income (loss)

 

 

10,812

 

 

 

2,546

 

 

 

13,358

 

 

 

(39,197

)

 

 

(25,839

)

Add: Restructuring expenses and other adjustments(1)

 

 

401

 

 

 

 

 

 

401

 

 

 

 

 

 

401

 

Add: Provision for loss on note receivable

 

 

 

 

 

 

 

 

 

 

 

23,008

 

 

 

23,008

 

Add: Lease guarantee

 

 

 

 

 

 

 

 

 

 

 

10,323

 

 

 

10,323

 

Operating income (loss) as adjusted

 

 

11,213

 

 

 

2,546

 

 

 

13,759

 

 

 

(5,866

)

 

 

7,893

 

Operating income margin as adjusted

 

 

11.5

%

 

 

6.8

%

 

 

10.2

%

 

n/a

 

 

 

5.8

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Add: Depreciation and amortization

 

 

5,960

 

 

 

299

 

 

 

6,259

 

 

 

71

 

 

 

6,330

 

Less: Depreciation adjustments

 

 

(66

)

 

 

 

 

 

(66

)

 

 

 

 

 

(66

)

EBITDA as adjusted

 

$

17,107

 

 

$

2,845

 

 

$

19,952

 

 

$

(5,795

)

 

$

14,157

 

EBITDA margin as adjusted

 

 

17.5

%

 

 

7.6

%

 

 

14.8

%

 

n/a

 

 

 

10.5

%

(1) Includes gross profit adjustments of $286 and SG&A adjustments of $115

MYERS INDUSTRIES, INC.

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

GROSS PROFIT, OPERATING INCOME AND EBITDA (UNAUDITED)

(Dollars in thousands)

 

 

 

Nine Months Ended September 30, 2019

 

 

Material
Handling

 

Distribution

 

Segment
Total

 

Corporate
& Other

 

Total

GAAP Net sales

 

$

282,963

 

 

$

115,957

 

 

$

398,920

 

 

$

(40

)

 

$

398,880

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP Gross profit

 

 

 

 

 

 

 

 

 

 

132,081

 

 

 

 

 

 

132,081

 

Add: Restructuring expenses and other adjustments

 

 

 

 

 

 

 

 

 

 

172

 

 

 

 

 

 

172

 

Gross profit as adjusted

 

 

 

 

 

 

 

 

 

 

132,253

 

 

 

 

 

 

132,253

 

Gross profit margin as adjusted

 

 

 

 

 

 

 

 

 

 

33.2

%

 

n/a

 

 

 

33.2

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP Operating income (loss)

 

 

44,181

 

 

 

6,923

 

 

 

51,104

 

 

 

(22,644

)

 

 

28,460

 

Add: Restructuring expenses and other adjustments(1)

 

 

172

 

 

 

865

 

 

 

1,037

 

 

 

 

 

 

1,037

 

Add: Tuffy acquisition costs

 

 

 

 

 

257

 

 

 

257

 

 

 

235

 

 

 

492

 

Add: Asset impairment

 

 

916

 

 

 

 

 

 

916

 

 

 

 

 

 

916

 

Add: Environmental charges

 

 

 

 

 

 

 

 

 

 

 

4,000

 

 

 

4,000

 

Operating income (loss) as adjusted

 

 

45,269

 

 

 

8,045

 

 

 

53,314

 

 

 

(18,409

)

 

 

34,905

 

Operating income margin as adjusted

 

 

16.0

%

 

 

6.9

%

 

 

13.4

%

 

n/a

 

 

 

8.8

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Add: Depreciation and amortization

 

 

16,216

 

 

 

874

 

 

 

17,090

 

 

 

309

 

 

 

17,399

 

Less: Depreciation adjustments

 

 

(44

)

 

 

 

 

 

(44

)

 

 

 

 

 

(44

)

EBITDA as adjusted

 

$

61,441

 

 

$

8,919

 

 

$

70,360

 

 

$

(18,100

)

 

$

52,260

 

EBITDA margin as adjusted

 

 

21.7

%

 

 

7.7

%

 

 

17.6

%

 

n/a

 

 

 

13.1

%

(1) Includes gross profit adjustments of $172 and SG&A adjustments of $865

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nine Months Ended September 30, 2018

 

 

Material
Handling

 

Distribution

 

Segment
Total

 

Corporate
& Other

 

Total

GAAP Net sales

 

$

317,621

 

 

$

110,815

 

 

$

428,436

 

 

$

(89

)

 

$

428,347

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP Gross profit

 

 

 

 

 

 

 

 

 

 

137,197

 

 

 

 

 

 

137,197

 

Add: Restructuring expenses and other adjustments

 

 

 

 

 

 

 

 

 

 

575

 

 

 

 

 

 

575

 

Gross profit as adjusted

 

 

 

 

 

 

 

 

 

 

137,772

 

 

 

 

 

 

137,772

 

Gross profit margin as adjusted

 

 

 

 

 

 

 

 

 

 

32.2

%

 

n/a

 

 

 

32.2

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP Operating income (loss)

 

 

44,865

 

 

 

7,070

 

 

 

51,935

 

 

 

(52,641

)

 

 

(706

)

Add: Restructuring expenses and other adjustments(1)

 

 

713

 

 

 

 

 

 

713

 

 

 

 

 

 

713

 

Add: Provision for loss on note receivable

 

 

 

 

 

 

 

 

 

 

 

23,008

 

 

 

23,008

 

Add: Lease guarantee

 

 

 

 

 

 

 

 

 

 

 

10,323

 

 

 

10,323

 

Add: Asset impairment

 

 

 

 

 

 

 

 

 

 

 

308

 

 

 

308

 

Add: Loss (gain) on sale of assets

 

 

(208

)

 

 

(665

)

 

 

(873

)

 

 

 

 

 

(873

)

Operating income (loss) as adjusted

 

 

45,370

 

 

 

6,405

 

 

 

51,775

 

 

 

(19,002

)

 

 

32,773

 

Operating income margin as adjusted

 

 

14.3

%

 

 

5.8

%

 

 

12.1

%

 

n/a

 

 

 

7.7

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Add: Depreciation and amortization

 

 

18,276

 

 

 

909

 

 

 

19,185

 

 

 

325

 

 

 

19,510

 

Less: Depreciation adjustments

 

 

(147

)

 

 

 

 

 

(147

)

 

 

 

 

 

(147

)

EBITDA as adjusted

 

$

63,499

 

 

$

7,314

 

 

$

70,813

 

 

$

(18,677

)

 

$

52,136

 

EBITDA margin as adjusted

 

 

20.0

%

 

 

6.6

%

 

 

16.5

%

 

n/a

 

 

 

12.2

%

(1) Includes gross profit adjustments of $575 and SG&A adjustments of $138

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 September 30,

 

Nine Months Ended September 30,

 

 

2019

 

2018

 

2019

 

2018

GAAP Operating income (loss)

 

$

8,060

 

 

$

(25,839

)

 

$

28,460

 

 

$

(706

)

Add: Restructuring expenses and other adjustments

 

 

(36

)

 

 

401

 

 

 

1,037

 

 

 

713

 

Add: Tuffy acquisition costs

 

 

492

 

 

 

 

 

 

492

 

 

 

 

Add: Asset impairments

 

 

 

 

 

 

 

 

916

 

 

 

308

 

Add: Environmental charges

 

 

 

 

 

 

 

 

4,000

 

 

 

 

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

 

 

 

 

 

33,331

 

 

 

 

 

 

33,331

 

Add: Loss (gain) on sale of assets

 

 

 

 

 

 

 

 

 

 

 

(873

)

Operating income as adjusted

 

 

8,516

 

 

 

7,893

 

 

 

34,905

 

 

 

32,773

 

Less: Interest expense, net

 

 

(993

)

 

 

(883

)

 

 

(3,059

)

 

 

(3,835

)

Income before taxes as adjusted

 

 

7,523

 

 

 

7,010

 

 

 

31,846

 

 

 

28,938

 

Less: Income tax expense(2)

 

 

(2,031

)

 

 

(1,752

)

 

 

(8,598

)

 

 

(7,234

)

Income from continuing operations as adjusted

 

$

5,492

 

 

$

5,258

 

 

$

23,248

 

 

$

21,704

 

Adjusted earnings per diluted share from continuing operations(3)

 

$

0.15

 

 

$

0.15

 

 

$

0.65

 

 

$

0.65

 

(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 25%.

(3) Adjusted earnings per diluted share for the three and nine months ended September 30, 2018 were calculated using 35,677,409 and 33,247,459 diluted shares, respectively.

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

 

YTD

 

 

 

 

 

 

September 30, 2019

 

September 30, 2018

 

 

 

 

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

 

$

39,492

 

 

$

41,121

 

 

 

 

 

Capital expenditures

 

 

(5,669

)

 

 

(3,560

)

 

 

 

 

Free cash flow

 

$

33,823

 

 

$

37,561

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

YTD

 

YTD

 

Quarter

 

 

September 30, 2019

 

June 30, 2019

 

September 30, 2019

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

 

$

39,492

 

-

$

16,173

 

=

$

23,319

 

Capital expenditures

 

 

(5,669

)

-

 

(4,406

)

=

 

(1,263

)

Free cash flow

 

$

33,823

 

-

$

11,767

 

=

$

22,056

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

YTD

 

YTD

 

Quarter

 

 

September 30, 2018

 

June 30, 2018

 

September 30, 2018

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

 

$

41,121

 

-

$

27,223

 

=

$

13,898

 

Capital expenditures

 

 

(3,560

)

-

 

(2,318

)

=

 

(1,242

)

Free cash flow

 

$

37,561

 

-

$

24,905

 

=

$

12,656

 

 

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