Significant Progress Against 3-Horizon Strategy
Leads to a Record Earnings Quarter
Company Raises Full Year Fiscal 2022
Outlook
Myers Industries, Inc. (NYSE: MYE), a leading manufacturer of a
wide range of polymer products and distributor for the tire, wheel,
and under-vehicle service industry, today announced results for the
first quarter ended March 31, 2022.
First Quarter 2022 Financial
Highlights
- Net sales increased 29% to $225.5 million, compared with $174.4
million for the first quarter of 2021
- On an organic basis, net sales increased 23% compared with the
first quarter of 2021
- Net income per diluted share increased 135% to $0.47, compared
with $0.20 for the first quarter of 2021
- Adjusted earnings per diluted share increased 127% to $0.50,
compared with $0.22 for the first quarter of 2021
- Adjusted EBITDA increased 82% to $31.0 million, compared with
$17.0 million for the first quarter of 2021
- Cash flow from continuing operations was $7.3 million and free
cash flow was $2.2 million
Myers Industries President and CEO, Mike McGaugh said, “We are
successfully executing our strategy. We continue delivering on the
key elements of Horizon 1: Self-help, Organic Growth, and Bolt On
M&A. As a result of this focus, our results continue to
improve. We are pleased to report that the first quarter of 2022
was a record earnings quarter for Myers. Our commitment to the ‘One
Myers’ strategic vision has fundamentally changed the way we do
business and has unified our organization. The results are clear:
we drove our sixth consecutive quarter of double-digit top-line
expansion, supported by strong organic sales and sustained benefits
from the acquisitions of both Elkhart Plastics and Trilogy
Plastics. We have continued our efforts to be an excellent partner
to our customers. As a result, we have generated the second quarter
of margin expansion while growing sales. This consistent
performance, across a variety of economic conditions, supports our
growing confidence that we can continue to improve the earnings
profile of the Company across future market and economic
cycles."
McGaugh concluded, "The strong results from the first quarter
have led us to raise our outlook for 2022, including increasing our
adjusted EPS range from $1.20 - $1.40 to $1.30 - $1.50. The
quarter's results exemplify the benefits and outcomes stemming from
disciplined efforts to execute our 'One Myers' approach. The
progress to date is encouraging, and I believe we are only just at
the beginning of our journey. In conclusion, I believe that this
quarter demonstrates the potential significant shareholder value
creation that is possible through the execution of our long-term
strategy as we transform Myers into a great company."
First Quarter 2022 Financial
Summary
Quarter Ended March
31,
(Dollars in thousands, except per share
data)
2022
2021
% Inc
(Dec)
Net sales
$225,486
$174,429
29.3%
Gross profit
$71,928
$50,413
42.7%
Gross margin
31.9%
28.9%
Operating income
$24,405
$10,865
124.6%
Net income:
Net income
$17,337
$7,305
137.3%
Net income per diluted share
$0.47
$0.20
135.0%
Adjusted operating income
$25,831
$11,854
117.9%
Adjusted net income:
Net income
$18,266
$8,036
127.3%
Net income per diluted share
$0.50
$0.22
127.3%
Adjusted EBITDA
$31,031
$17,015
82.4%
Net sales were $225.5 million, an increase of $51.1 million, or
29.3%, compared with $174.4 million for the first quarter of 2021,
driven by strong sales in both the Material Handling and
Distribution segments. Excluding the incremental $10.9 million of
net sales from the Trilogy Plastics acquisition, organic net sales
increased 23%, with 20% due to favorable pricing and 3% due to
higher volume/mix.
Gross profit increased $21.5 million, or 42.7% to $71.9 million,
primarily due to the increased contribution from pricing actions,
sales volume, and the Trilogy Plastics acquisition. Partially
offsetting these contributions were higher raw material costs,
increased labor costs, and an unfavorable sales mix. The
contribution from pricing actions more than offset higher raw
material costs, which led to a favorable price-to-cost relationship
for the quarter and gross margin of 31.9% compared with 28.9% for
the first quarter of 2021. Selling, general and administrative
expenses increased $8.4 million, or 21.3% to $48.0 million,
reflecting the Trilogy Plastics acquisition, higher salaries,
benefits, and incentive compensation costs, increased variable
selling expenses, and higher facility costs. SG&A as a
percentage of sales declined to 21.3%, compared with 22.7% in the
same period last year. Net income per diluted share was $0.47,
compared with $0.20 for the first quarter of 2021. Adjusted
earnings per diluted share were $0.50, compared with $0.22 for the
first quarter of 2021.
First Quarter 2022 Segment
Results
(Dollar amounts in the segment tables below are reported in
millions)
Material Handling
Net
Sales
Op
Income
Adj Op
Income
Adj Op
Income
Margin
Q1 2022 Results
$176.6
$31.2
$31.9
18.0%
Q1 2021 Results
$129.9
$16.9
$16.9
13.0%
Increase (decrease) vs prior year
36.0%
84.4%
88.3%
+500 bps
Net sales for the Material Handling Segment were $176.6 million,
an increase of $46.7 million, or 36.0%, compared with $129.9
million for the first quarter of 2021. Excluding the incremental
$10.9 million of net sales from the Trilogy Plastics acquisition,
organic net sales increased 24% due to favorable price and 4% due
to higher volume/mix. Organic net sales increased in the food and
beverage, industrial, consumer, and vehicle end markets. Operating
income increased 84.4% to $31.2 million, compared with $16.9
million in 2021. Adjusted operating income increased 88.3% to $31.9
million, compared with $16.9 million in 2021. Contributions from
pricing actions and the increase in sales volume during the quarter
were partially offset by higher raw material costs, increased
labor, and an unfavorable sales mix. The contribution from pricing
actions more than offset higher raw material costs, which led to a
favorable price-to-cost relationship for the quarter. Additionally,
SG&A expenses were higher year-over-year. The increase in
SG&A expenses was primarily due to the Trilogy Plastics
acquisition, higher salaries, benefits and incentive compensation
costs, increased variable selling expenses, and higher facility
costs. The Material Handling Segment’s adjusted operating income
margin was 18.0%, compared with 13.0% for the first quarter of
2021.
Distribution
Net
Sales
Op
Income
Adj Op
Income
Adj Op
Income
Margin
Q1 2022 Results
$48.9
$3.3
$3.3
6.8%
Q1 2021 Results
$44.6
$1.4
$2.0
4.4%
Increase vs prior year
9.7%
129.6%
68.0%
+240 bps
Net sales for the Distribution Segment were $48.9 million, an
increase of $4.3 million, or 9.7%, compared with $44.6 million for
the first quarter of 2021. The increase was driven by higher
pricing. Operating income increased 129.6% to $3.3 million,
compared with $1.4 million in 2021. Adjusted operating income
increased 68.0% to $3.3 million, compared with $2.0 million in
2021. The contribution from higher pricing was partially offset by
an increase in product costs and SG&A expenses year-over-year.
The increase in SG&A expenses was primarily the result of
higher salaries, benefits, and incentive compensation costs. The
Distribution Segment’s adjusted operating income margin was 6.8%,
compared with 4.4% for the first quarter of 2021.
Balance Sheet & Cash
Flow As of March 31, 2022, the Company’s cash on hand
totaled $17.6 million. Total debt as of March 31, 2022 was $102.3
million.
For the first quarter of 2022, cash flow provided by operations
was $7.3 million and free cash flow was $2.2 million, compared with
cash flow provided by operations of $6.6 million and free cash flow
of $1.4 million for the first quarter of 2021. The increase in cash
flow was driven by higher earnings, partially offset by an increase
in working capital, primarily accounts receivable and inventory.
Capital expenditures for the first quarter of 2022 were $5.1
million, compared with $5.2 million for the first quarter of
2021.
2022 Outlook Based on
current exchange rates, market outlook, and business forecast, the
Company updated its outlook for fiscal 2022, and currently
forecasts:
- Net sales growth in the low to mid double-digit range with
approximately one quarter of the increase due to the acquisition of
Trilogy Plastics
- Diluted EPS in the range of $1.28 to $1.48; adjusted diluted
EPS in the range of $1.30 to $1.50
- Capital expenditures to be in the range of $25 to $28
million
- Effective tax rate to approximate 26%
Conference Call Details The
Company will host an earnings conference call and webcast for
investors and analysts on Thursday, May 5, 2022, at 8:30 a.m. EDT.
The call is anticipated to last less than one hour and may be
accessed using the following online participation registration
link:
https://www.incommglobalevents.com/registration/q4inc/10670/myers-industries-q1-2022-earnings-call/.
Upon registering, each participant will be provided with call
details and a registrant ID that will be used to track call
attendance. Reminders will also be sent to registered participants
via email. The live webcast of the conference call can be accessed
from the Investor Relations section of the Company's website at
www.myersindustries.com. 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. Investors can access a replay of the
teleconference at (866) 813-9403; international callers use (226)
828-7578. The Access Code is 988435. The teleconference replay will
be available through May 12, 2022.
Use of Non-GAAP Financial
Measures The Company uses certain non-GAAP measures in
this release. Adjusted gross profit, adjusted gross profit margin,
adjusted operating income (loss), adjusted operating income margin,
adjusted earnings before interest, taxes, depreciation and
amortization (EBITDA), adjusted EBITDA margin, adjusted income
(loss) before taxes, adjusted net income, adjusted earnings per
diluted share, 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
“will,” “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: impacts from
the COVID-19 pandemic on our business, conditions, customers and
capital position; the impact of COVID-19 on local, national and
global economic conditions; the effects of various governmental
responses to the COVID-19 pandemic, raw material availability,
increases in raw material costs, or other production costs; impacts
of price increases, 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;
impact of the U.S. elections impacts on the regulatory landscape,
capital markets, and responses to and management of the COVID-19
pandemic including further economic stimulus from the federal
government; and other important factors detailed previously and
from time to time in the Company’s filings with the Securities and
Exchange Commission, including the Company’s Annual Report on Form
10-K for the year ended December 31, 2021 and subsequent Quarterly
Reports on Form 10-Q. 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.
M-INV
MYERS INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(Dollars in thousands, except share and per share data)
Quarter Ended
March 31, 2022
March 31, 2021
Net sales
$
225,486
$
174,429
Cost of sales
153,558
124,016
Gross profit
71,928
50,413
Selling, general and administrative
expenses
47,990
39,548
(Gain) loss on disposal of fixed
assets
(467
)
—
Operating income (loss)
24,405
10,865
Interest expense, net
1,147
995
Income (loss) before income
taxes
23,258
9,870
Income tax expense (benefit)
5,921
2,565
Net income (loss)
$
17,337
$
7,305
Net income (loss) per common
share:
Basic
$
0.48
$
0.20
Diluted
$
0.47
$
0.20
Weighted average common shares
outstanding:
Basic
36,280,268
35,993,331
Diluted
36,511,034
36,290,831
MYERS INDUSTRIES, INC. SALES
AND EARNINGS BY SEGMENT (UNAUDITED) (Dollars in thousands)
Quarter Ended March
31,
2022
2021
% Change
Net sales
Material Handling
$
176,636
$
129,893
36.0
%
Distribution
48,861
44,550
9.7
%
Inter-company Sales
(11
)
(14
)
-
Total
$
225,486
$
174,429
29.3
%
Operating income (loss)
Material Handling
$
31,220
$
16,927
84.4
%
Distribution
3,301
1,438
129.6
%
Corporate
(10,116
)
(7,500
)
-
Total
$
24,405
$
10,865
124.6
%
Adjusted operating income
(loss)
Material Handling
$
31,871
$
16,927
88.3
%
Distribution
3,301
1,965
68.0
%
Corporate
(9,341
)
(7,038
)
-
Total
$
25,831
$
11,854
117.9
%
Adjusted operating income
margin
Material Handling
18.0
%
13.0
%
Distribution
6.8
%
4.4
%
Corporate
n/a
n/a
Total
11.5
%
6.8
%
Adjusted EBITDA
Material Handling
$
36,387
$
21,446
69.7
%
Distribution
3,859
2,508
53.9
%
Corporate
(9,215
)
(6,939
)
-
Total
$
31,031
$
17,015
82.4
%
Adjusted EBITDA margin
Material Handling
20.6
%
16.5
%
Distribution
7.9
%
5.6
%
Corporate
n/a
n/a
Total
13.8
%
9.8
%
MYERS INDUSTRIES, INC.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES GROSS PROFIT,
OPERATING INCOME AND EBITDA (UNAUDITED) (Dollars in
thousands)
Quarter Ended March 31,
2022
Material
Handling
Distribution
Segment
Total
Corporate
& Other
Total
Net sales
$
176,636
$
48,861
$
225,497
$
(11
)
$
225,486
Gross profit
71,928
Add: Restructuring expenses and other
adjustments
390
Adjusted gross profit
72,318
Gross margin as adjusted
32.1
%
Operating income (loss)
31,220
3,301
34,521
(10,116
)
24,405
Add: Acquisition and integration costs
—
—
—
75
75
Add: Restructuring expenses and other
adjustments
390
—
390
—
390
Add: Loss on sale of assets
261
—
261
—
261
Add: Environmental charges
—
—
—
700
700
Adjusted operating income (loss)(1)
31,871
3,301
35,172
(9,341
)
25,831
Adjusted operating income margin
18.0
%
6.8
%
15.6
%
n/a
11.5
%
Add: Depreciation and amortization
4,516
558
5,074
126
5,200
Adjusted EBITDA
$
36,387
$
3,859
$
40,246
$
(9,215
)
$
31,031
Adjusted EBITDA margin
20.6
%
7.9
%
17.8
%
n/a
13.8
%
(1) Includes gross profit adjustments of
$390 and SG&A adjustments of $1,036
Quarter Ended March 31,
2021
Material
Handling
Distribution
Segment
Total
Corporate
& Other
Total
Net sales
$
129,893
$
44,550
$
174,443
$
(14
)
$
174,429
Gross profit
50,413
Gross margin
28.9
%
Operating income (loss)
16,927
1,438
18,365
(7,500
)
10,865
Add: Severance costs
—
527
527
318
845
Add: Acquisition and integration costs
—
—
—
144
144
Adjusted operating income (loss)(1)
16,927
1,965
18,892
(7,038
)
11,854
Adjusted operating income margin
13.0
%
4.4
%
10.8
%
n/a
6.8
%
Add: Depreciation and amortization
4,519
543
5,062
99
5,161
Adjusted EBITDA
$
21,446
$
2,508
$
23,954
$
(6,939
)
$
17,015
Adjusted EBITDA margin
16.5
%
5.6
%
13.7
%
n/a
9.8
%
(1) Includes SG&A adjustments of
$989
MYERS INDUSTRIES, INC.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES INCOME AND EARNINGS
PER DILUTED SHARE (UNAUDITED) (Dollars in thousands, except per
share data)
Quarter Ended March
31,
2022
2021
Operating income (loss)
$
24,405
$
10,865
Add: Severance costs
—
845
Add: Restructuring expenses and other
adjustments
390
—
Add: Acquisition and integration costs
75
144
Add: Loss on sale of assets
261
—
Add: Environmental charges
700
—
Adjusted operating income (loss)
25,831
11,854
Less: Interest expense, net
(1,147
)
(995
)
Adjusted income (loss) before taxes
24,684
10,859
Less: Income tax expense(1)
(6,418
)
(2,823
)
Adjusted net income (loss)
$
18,266
$
8,036
Adjusted earnings per diluted share(2)
$
0.50
$
0.22
(1) Income taxes are calculated using the
normalized effective tax rate for each year. The rate used in 2022
and 2021 is 26%.
(2) Adjusted earnings per diluted share is
calculated using the weighted average common shares outstanding for
the respective period.
MYERS INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (UNAUDITED)
(Dollars in thousands)
March 31, 2022
December 31, 2021
Assets
Current Assets
Cash
$
17,576
$
17,655
Accounts receivable, net
132,689
100,691
Income tax receivable
—
2,517
Inventories, net
99,652
93,551
Prepaid expenses and other current
assets
4,889
5,500
Total Current Assets
254,806
219,914
Property, plant, & equipment, net
92,204
92,049
Right of use asset - operating leases
27,870
29,285
Deferred income taxes
106
106
Other assets
142,259
143,195
Total Assets
$
517,245
$
484,549
Liabilities & Shareholders'
Equity
Current Liabilities
Accounts payable
$
101,276
$
81,690
Accrued expenses
41,999
44,969
Operating lease liability - short-term
5,236
5,341
Finance lease liability - short-term
504
500
Long-term debt - current portion
—
—
Total Current Liabilities
149,015
132,500
Long-term debt
92,450
90,945
Operating lease liability - long-term
22,548
23,815
Finance lease liability - long-term
9,308
9,437
Other liabilities
13,967
13,086
Deferred income taxes
5,819
5,441
Total Shareholders' Equity
224,138
209,325
Total Liabilities & Shareholders'
Equity
$
517,245
$
484,549
MYERS INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(Dollars in thousands)
Three Months Ended March
31,
2022
2021
Cash Flows From Operating
Activities
Net income
$
17,337
$
7,305
Adjustments to reconcile net income to net
cash provided by (used for) operating activities
Depreciation and amortization
5,321
5,261
Non-cash stock-based compensation
expense
1,727
1,153
Gain on disposal of fixed assets
(467
)
—
Other
521
(1,280
)
Cash flows provided by (used for) working
capital
Accounts receivable
(31,894
)
(10,901
)
Inventories
(5,980
)
(3,861
)
Prepaid expenses and other current
assets
614
(4,854
)
Accounts payable and accrued expenses
20,113
13,765
Net cash provided by (used for) operating
activities
7,292
6,588
Cash Flows From Investing
Activities
Capital expenditures
(5,060
)
(5,238
)
Acquisition of business
—
(1,223
)
Proceeds from sale of property, plant, and
equipment
1,076
—
Net cash provided by (used for) investing
activities
(3,984
)
(6,461
)
Cash Flows From Financing
Activities
Net borrowings from revolving credit
facility
1,500
33,000
Repayments of long-term debt
—
(40,000
)
Payments on finance lease
(124
)
(40
)
Cash dividends paid
(4,939
)
(4,906
)
Proceeds from issuance of common stock
471
1,900
Shares withheld for employee taxes on
equity awards
(344
)
(663
)
Deferred financing fees
—
(1,095
)
Net cash provided by (used for) financing
activities
(3,436
)
(11,804
)
Foreign exchange rate effect on cash
49
42
Net decrease in cash
(79
)
(11,635
)
Cash at January 1
17,655
28,301
Cash at March 31
$
17,576
$
16,666
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
March 31, 2022
March 31, 2021
Net cash provided by (used for) operating
activities
$
7,292
$
6,588
Capital expenditures
(5,060
)
(5,238
)
Free cash flow
$
2,232
$
1,350
MYERS INDUSTRIES, INC.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES ADJUSTED DILUTED
EARNINGS PER SHARE (UNAUDITED)
Full Year 2022
Guidance
Low
High
GAAP diluted net income per common
share
$
1.28
$
1.48
Add: Net restructuring expenses and other
adjustments
0.02
0.02
Adjusted diluted earnings per share
$
1.30
$
1.50
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220505005158/en/
Monica Vinay, Vice President, Investor Relations &
Treasurer, (330) 761-6212
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