Exhibit 99.1
Myers Industries Reports 2018 Third Quarter Results
Strong cash flow generation continues; strategic actions to improve Distribution Segment underway
November 6, 2018, Akron, Ohio - Myers Industries, Inc. (NYSE: MYE), a manufacturer of polymer products for industrial, agricultural, automotive, commercial and consumer markets, today announced results for the third quarter ended September 30, 2018.
Third Quarter 2018 Business Highlights
| • | GAAP net loss per diluted share from continuing operations of $0.60, compared to net income per diluted share from continuing operations of $0.10 in the third quarter of 2017 |
| • | Adjusted net income per diluted share from continuing operations of $0.15, compared to $0.10 in the third quarter of 2017 |
| • | Net sales were roughly flat compared to the third quarter of 2017 |
| • | Gross profit margin of 31.1% compared to 29.0% in the third quarter of 2017 |
| • | Generated cash from continuing operations of $13.9 million and free cash flow of $12.7 million |
| • | The Company recognized $33.3 million of charges related to the 2015 sale of the Company’s Lawn and Garden business - a non-cash, pre-tax charge of $23 million for a promissory note as well as a pre-tax charge of $10.3 million for a potential obligation under a lease guarantee |
| • | The Company expects that net sales for fiscal year 2018 will be flat to up low-single-digits compared to 2017 |
“Our third quarter financial performance reflects the seasonality we typically experience in the second half of the year. However, as indicated in our release issued on October 4, 2018, our results were further impacted by a slowdown in the RV market and lower-than-expected sales in the Distribution Segment. Despite this, we were able to deliver strong free cash flow in the quarter of $12.7 million and 18 percent growth in adjusted operating income year-over-year,” said Dave Banyard, President and Chief Executive Officer of Myers Industries.
“As a result of the continued performance challenges in our Distribution Segment, we have begun implementing actions designed to reduce costs and improve the long-term performance of the segment,” added Mr. Banyard. “These actions are focused on increasing sales and contribution margins through broad organizational change within the segment, including adjusting our go-to-market strategy, rationalizing our product offering, and streamlining our supply chain and logistics. These actions are our top priority as we execute our long-term strategy focused on niche markets, flexible operations and strategic M&A.”
| Quarter Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||
| (Dollars in thousands, except per share data) | 2018 | 2017 | % Inc (Dec) |
2018 | 2017 | % Inc (Dec) |
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| Net sales |
$ | 135,219 | $ | 135,113 | 0.1 | % | $ | 428,347 | $ | 406,937 | 5.3 | % | ||||||||||||
| Gross profit |
$ | 42,091 | $ | 39,143 | 7.5 | % | $ | 137,197 | $ | 119,196 | 15.1 | % | ||||||||||||
| Gross profit margin |
31.1 | % | 29.0 | % | 32.0 | % | 29.3 | % | ||||||||||||||||
| Operating income (loss) |
$ | (25,839 | ) | $ | 6,801 | (479.9 | )% | $ | (706 | ) | $ | 20,885 | (103.4 | )% | ||||||||||
| Income from continuing operations: |
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| Income (loss) |
$ | (21,137 | ) | $ | 3,083 | (785.6 | )% | $ | (4,774 | ) | $ | 9,023 | (152.9 | )% | ||||||||||
| Income (loss) per diluted share |
$ | (0.60 | ) | $ | 0.10 | (700.0 | )% | $ | (0.15 | ) | $ | 0.30 | (150.0 | )% | ||||||||||
| Operating income (loss) as adjusted(1) |
$ | 7,893 | $ | 6,687 | 18.0 | % | $ | 32,773 | $ | 25,826 | 26.9 | % | ||||||||||||
| Income from continuing operations as adjusted(1): |
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| Income (loss) |
$ | 5,258 | $ | 3,103 | 69.4 | % | $ | 21,704 | $ | 12,799 | 69.6 | % | ||||||||||||
| Income (loss) per diluted share |
$ | 0.15 | $ | 0.10 | 50.0 | % | $ | 0.65 | $ | 0.42 | 54.8 | % | ||||||||||||
| EBITDA as adjusted |
$ | 14,157 | $ | 13,383 | 5.8 | % | $ | 52,136 | $ | 47,775 | 9.1 | % | ||||||||||||
| (1) | Detail regarding the adjusted charges is provided on the Reconciliations of Non-GAAP Financial Measures included in this release. |
The Company reported net sales of $135.2 million, roughly flat compared to the third quarter of 2017. Increased sales in the Company’s industrial and vehicle end markets were offset by declines in the consumer, auto aftermarket and food and beverage end markets. Sales in the vehicle end market were up year-over-year despite a double-digit decline in sales to the recreational vehicle market. Gross profit margin increased to 31.1%, primarily due to pricing actions and savings from last year’s restructuring initiatives, partially offset by higher-than-expected factory costs driven by increased maintenance and repair activity. Selling, general and administrative expenses decreased $0.7 million year-over-year to $34.4 million, with the decrease in expenses primarily attributable to lower incentive compensation and benefit costs, partially offset by higher R&D costs due to a new product launch in the Company’s consumer market.
Segment Results
Net sales in the Material Handling Segment increased by 2.6% (or 3.2% excluding currency fluctuation) compared to the third quarter of 2017. The increase in net sales was primarily due to increased volume in the segment’s industrial and vehicle end markets, partially offset by declines in the consumer and food and beverage end markets. Increased sales to automotive and marine customers in the segment’s vehicle end market more than offset a decline in sales to the recreational vehicle market. The segment’s adjusted EBITDA margin was 17.5% compared to 16.5% in the third quarter of 2017. The increase in adjusted EBITDA margin was primarily the result of pricing actions and the benefit of restructuring actions taken in 2017, partially offset by higher-than-expected factory and R&D costs.
Net sales in the Distribution Segment declined by 6.1% compared to the third quarter of 2017. The decline was primarily due to lower equipment and international sales at Myers Tire Supply. The segment’s adjusted EBITDA margin was 7.6% compared to 8.7% in the third quarter of 2017. The decline was primarily due to the lower sales volume, which was partially offset by gross margin expansion driven by a favorable mix of consumables versus equipment.
Charges Related to HC Companies Promissory Notes and Lease
In February 2015, the Company sold its Lawn and Garden business to an entity controlled by Wingate Partners V, L.P. The terms of the transaction included promissory notes totaling $20 million (the notes) that mature in August 2020. The carrying value of the notes and corresponding accrued interest as of September 30, 2018 was approximately $23 million. Additionally, the Company is a guarantor for one of the entity’s facility leases expiring in 2025. Remaining rent payments under the lease total $14 million.
During the third quarter of 2018, management of the Lawn and Garden business, now named HC Companies, Inc., requested an extension to the maturity of the notes as part of an effort to restructure their debt. The Company believes there is uncertainty about the ability to collect on the notes. As a result, the Company recognized a non-cash, pre-tax charge of $23 million in the third quarter of 2018 with respect to the notes. The Company estimates that the potential obligation under the lease guarantee will be in the range of $10 to $14 million. As a result, the Company recognized a pre-tax charge of $10.3 million during the third quarter of 2018 with respect to the lease guarantee.
Strategic Actions for the Distribution Segment
The Company began implementing additional sales performance improvement and cost reduction actions within its Distribution Segment during the fourth quarter of 2018. These actions include investments to strengthen the segment’s go-to-market strategy and broaden existing e-commerce capabilities. The Company is also evaluating opportunities to rationalize its product portfolio and reduce freight and distribution costs, as well as other ancillary and fixed costs. As a result, the Company expects to incur costs of approximately $1.5 million during the fourth quarter of 2018 to assist with execution of the actions.
2018 Outlook
For fiscal year 2018, the Company anticipates that total revenue will be flat to up low-single-digits on a constant currency basis compared to the prior year. The Company expects capital expenditures to be in the range of $6 million to $8 million. Net interest expense is forecasted to be between $4 million and $6 million. Depreciation and amortization is forecasted to be approximately $26 million. The Tax Cuts and Jobs Act will benefit the Company through a decrease in its effective tax rate, which is expected to be approximately 25% compared to approximately 36% in 2017.
Conference Call Details
The Company will host an earnings conference call and webcast for investors and analysts on Tuesday, November 6, 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 7896135. 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 7896135.
Use of Non-GAAP Financial Measures
The Company uses certain non-GAAP measures in this release. Adjusted net income per diluted share from continuing operations, income from continuing operations as adjusted, adjusted income per diluted share from continuing operations, operating income as adjusted, adjusted operating income, adjusted EPS, adjusted EBITDA 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.
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 | Nine Months Ended | |||||||||||||||
| September 30, 2018 |
September 30, 2017 |
September 30, 2018 |
September 30, 2017 |
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| Net sales |
$ | 135,219 | $ | 135,113 | $ | 428,347 | $ | 406,937 | ||||||||
| Cost of sales |
93,128 | 95,970 | 291,150 | 287,741 | ||||||||||||
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| Gross profit |
42,091 | 39,143 | 137,197 | 119,196 | ||||||||||||
| Selling, general and administrative expenses |
34,381 | 35,107 | 104,360 | 101,779 | ||||||||||||
| (Gain) loss on disposal of fixed assets |
218 | (2,765 | ) | (96 | ) | (4,012 | ) | |||||||||
| Impairment charges |
— | — | 308 | 544 | ||||||||||||
| Other expenses |
33,331 | — | 33,331 | — | ||||||||||||
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| Operating income (loss) |
(25,839 | ) | 6,801 | (706 | ) | 20,885 | ||||||||||
| Interest expense, net |
883 | 1,838 | 3,835 | 5,828 | ||||||||||||
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| Income (loss) from continuing operations before income taxes |
(26,722 | ) | 4,963 | (4,541 | ) | 15,057 | ||||||||||
| Income tax expense (benefit) |
(5,585 | ) | 1,880 | 233 | 6,034 | |||||||||||
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| Income (loss) from continuing operations |
(21,137 | ) | 3,083 | (4,774 | ) | 9,023 | ||||||||||
| Income (loss) from discontinued operations, net of income taxes |
(2 | ) | 174 | (913 | ) | (659 | ) | |||||||||
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| Net income (loss) |
$ | (21,139 | ) | $ | 3,257 | $ | (5,687 | ) | $ | 8,364 | ||||||
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| Income (loss) per common share from continuing operations: |
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| Basic |
$ | (0.60 | ) | $ | 0.10 | $ | (0.15 | ) | $ | 0.30 | ||||||
| Diluted |
$ | (0.60 | ) | $ | 0.10 | $ | (0.15 | ) | $ | 0.30 | ||||||
| Income (loss) per common share from discontinued operations: |
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| Basic |
$ | — | $ | 0.01 | $ | (0.02 | ) | $ | (0.02 | ) | ||||||
| Diluted |
$ | — | $ | 0.01 | $ | (0.02 | ) | $ | (0.02 | ) | ||||||
| Net income (loss) per common share: |
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| Basic |
$ | (0.60 | ) | $ | 0.11 | $ | (0.17 | ) | $ | 0.28 | ||||||
| Diluted |
$ | (0.60 | ) | $ | 0.11 | $ | (0.17 | ) | $ | 0.28 | ||||||
| Weighted average common shares outstanding: |
||||||||||||||||
| Basic |
35,229,171 | 30,266,838 | 32,783,853 | 30,149,818 | ||||||||||||
| Diluted |
35,677,409 | 30,651,943 | 33,247,459 | 30,524,161 | ||||||||||||
MYERS INDUSTRIES, INC.
SALES AND EARNINGS BY SEGMENT (UNAUDITED)
(Dollars in thousands)
| Quarter Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||
| 2018 | 2017 | % Change | 2018 | 2017 | % Change | |||||||||||||||||||
| Net sales |
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| Material Handling |
$ | 97,682 | $ | 95,192 | 2.6 | % | $ | 317,621 | $ | 289,700 | 9.6 | % | ||||||||||||
| Distribution |
37,557 | 40,004 | (6.1 | )% | 110,815 | 117,836 | (6.0 | )% | ||||||||||||||||
| Inter-company Sales |
(20 | ) | (83 | ) | — | (89 | ) | (599 | ) | — | ||||||||||||||
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| Total |
$ | 135,219 | $ | 135,113 | 0.1 | % | $ | 428,347 | $ | 406,937 | 5.3 | % | ||||||||||||
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| Operating income (loss) |
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| Material Handling |
$ | 10,812 | $ | 10,015 | 8.0 | % | $ | 44,865 | $ | 30,675 | 46.3 | % | ||||||||||||
| Distribution |
2,546 | 3,179 | (19.9 | )% | 7,070 | 7,742 | (8.7 | )% | ||||||||||||||||
| Corporate |
(39,197 | ) | (6,393 | ) | — | (52,641 | ) | (17,532 | ) | — | ||||||||||||||
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| Total |
$ | (25,839 | ) | $ | 6,801 | (479.9 | )% | $ | (706) | $ | 20,885 | (103.4 | )% | |||||||||||
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| Operating income (loss) as adjusted |
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| Material Handling |
$ | 11,213 | $ | 9,575 | 17.1 | % | $ | 45,370 | $ | 35,290 | 28.6 | % | ||||||||||||
| Distribution |
2,546 | 3,179 | (19.9 | )% | 6,405 | 7,742 | (17.3 | )% | ||||||||||||||||
| Corporate |
(5,866 | ) | (6,067 | ) | — | (19,002 | ) | (17,206 | ) | — | ||||||||||||||
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| Total |
$ | 7,893 | $ | 6,687 | 18.0 | % | $ | 32,773 | $ | 25,826 | 26.9 | % | ||||||||||||
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| Operating income margin as adjusted |
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| Material Handling |
11.5 | % | 10.1 | % | 14.3 | % | 12.2 | % | ||||||||||||||||
| Distribution |
6.8 | % | 7.9 | % | 5.8 | % | 6.6 | % | ||||||||||||||||
| Corporate |
n/a | n/a | n/a | n/a | ||||||||||||||||||||
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| Total |
5.8 | % | 4.9 | % | 7.7 | % | 6.3 | % | ||||||||||||||||
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| EBITDA as adjusted |
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| Material Handling |
$ | 17,107 | $ | 15,732 | 8.7 | % | $ | 63,499 | $ | 55,447 | 14.5 | % | ||||||||||||
| Distribution |
2,845 | $ | 3,490 | (18.5 | )% | 7,314 | 8,608 | (15.0 | )% | |||||||||||||||
| Corporate |
(5,795 | ) | $ | (5,839) | — | (18,677 | ) | (16,280 | ) | — | ||||||||||||||
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| Total |
$ | 14,157 | $ | 13,383 | 5.8 | % | $ | 52,136 | $ | 47,775 | 9.1 | % | ||||||||||||
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| EBITDA margin as adjusted |
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| Material Handling |
17.5 | % | 16.5 | % | 20.0 | % | 19.1 | % | ||||||||||||||||
| Distribution |
7.6 | % | 8.7 | % | 6.6 | % | 7.3 | % | ||||||||||||||||
| Corporate |
n/a | n/a | n/a | n/a | ||||||||||||||||||||
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| Total |
10.5 | % | 9.9 | % | 12.2 | % | 11.7 | % | ||||||||||||||||
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MYERS INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (UNAUDITED)
(Dollars in thousands)
| September 30, 2018 | December 31, 2017 | |||||||
| Assets |
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| Current Assets |
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| Cash |
$ | 46,505 | $ | 2,520 | ||||
| Restricted cash |
— | 8,659 | ||||||
| Accounts receivable, net |
69,250 | 76,509 | ||||||
| Income tax receivable |
7,043 | 12,954 | ||||||
| Inventories |
44,310 | 47,166 | ||||||
| Other |
3,050 | 2,204 | ||||||
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| Total Current Assets |
170,158 | 150,012 | ||||||
| Other assets |
98,284 | 122,026 | ||||||
| Property, plant, & equipment, net |
73,011 | 83,904 | ||||||
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| Total Assets |
$ | 341,453 | $ | 355,942 | ||||
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| Liabilities & Shareholders’ Equity |
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| Current Liabilities |
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| Accounts payable |
$ | 51,375 | $ | 63,581 | ||||
| Accrued expenses |
34,862 | 35,072 | ||||||
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| Total Current Liabilities |
86,237 | 98,653 | ||||||
| Long-term debt, net |
76,693 | 151,036 | ||||||
| Other liabilities |
19,264 | 8,236 | ||||||
| Deferred income taxes |
202 | 4,265 | ||||||
| Total Shareholders’ Equity |
159,057 | 93,752 | ||||||
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| Total Liabilities & Shareholders’ Equity |
$ | 341,453 | $ | 355,942 | ||||
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MYERS INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(Dollars in thousands)
| Nine Months Ended September 30, | ||||||||
| 2018 | 2017 | |||||||
| Cash Flows From Operating Activities |
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| Net income (loss) |
$ | (5,687 | ) | $ | 8,364 | |||
| Income (loss) from discontinued operations, net of income taxes |
(913 | ) | (659 | ) | ||||
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| Income (loss) from continuing operations |
(4,774 | ) | 9,023 | |||||
| Adjustments to reconcile income (loss) from continuing operations to net cash provided by (used for) operating activities |
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| Depreciation |
13,329 | 15,226 | ||||||
| Amortization |
6,455 | 6,722 | ||||||
| Accelerated depreciation associated with restructuring activities |
16 | 2,018 | ||||||
| Non-cash stock-based compensation expense |
3,532 | 2,873 | ||||||
| (Gain) loss on disposal of fixed assets |
(96 | ) | (4,012 | ) | ||||
| Provision for loss on note receivable |
23,008 | — | ||||||
| Impairment charges |
308 | 544 | ||||||
| Deferred taxes |
(7,666 | ) | 101 | |||||
| Interest income received (accrued) on note receivable |
(361 | ) | (999 | ) | ||||
| Other |
211 | 39 | ||||||
| Payments on performance based compensation |
(1,249 | ) | (1,010 | ) | ||||
| Other long-term liabilities |
10,010 | (102 | ) | |||||
| Cash flows provided by (used for) working capital |
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| Accounts receivable |
7,890 | (5,820 | ) | |||||
| Inventories |
2,708 | (1,608 | ) | |||||
| Prepaid expenses and other current assets |
(853 | ) | 1,639 | |||||
| Accounts payable and accrued expenses |
(11,347 | ) | 15,650 | |||||
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| Net cash provided by (used for) operating activities - continuing operations |
41,121 | 40,284 | ||||||
| Net cash provided by (used for) operating activities - discontinued operations |
858 | (4,158 | ) | |||||
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| Net cash provided by (used for) operating activities |
41,979 | 36,126 | ||||||
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| Cash Flows From Investing Activities |
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| Capital expenditures |
(3,560 | ) | (5,109 | ) | ||||
| Proceeds from sale of property, plant and equipment |
2,633 | 7,925 | ||||||
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| Net cash provided by (used for) investing activities - continuing operations |
(927 | ) | 2,816 | |||||
| Net cash provided by (used for) investing activities - discontinued operations |
— | 131 | ||||||
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| Net cash provided by (used for) investing activities |
(927 | ) | 2,947 | |||||
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| Cash Flows From Financing Activities |
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| Net borrowing (repayments) on credit facility |
(74,557 | ) | (31,397 | ) | ||||
| Cash dividends paid |
(13,039 | ) | (12,230 | ) | ||||
| Proceeds from issuance of common stock |
2,825 | 2,524 | ||||||
| Proceeds from public offering of common stock, net of equity issuance costs |
79,522 | — | ||||||
| Shares withheld for employee taxes on equity awards |
(446 | ) | (273 | ) | ||||
| Deferred financing costs |
— | (1,030 | ) | |||||
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| Net cash provided by (used for) financing activities - continuing operations |
(5,695 | ) | (42,406 | ) | ||||
| Net cash provided by (used for) financing activities - discontinued operations |
— | — | ||||||
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| Net cash provided by (used for) financing activities |
(5,695 | ) | (42,406 | ) | ||||
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| Foreign exchange rate effect on cash |
(31 | ) | (28 | ) | ||||
| Less: Net increase (decrease) in cash classified within discontinued operations |
— | (3,890 | ) | |||||
|
|
|
|
|
|||||
| Net increase (decrease) in cash, cash equivalents, and restricted cash |
35,326 | 529 | ||||||
| Cash, cash equivalents, and restricted cash at January 1 |
11,179 | 11,039 | ||||||
|
|
|
|
|
|||||
| Cash, cash equivalents, and restricted cash at September 30 |
$ | 46,505 | $ | 11,568 | ||||
|
|
|
|
|
|||||
MYERS INDUSTRIES, INC.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
GROSS PROFIT, OPERATING INCOME AND EBITDA (UNAUDITED)
(Dollars in thousands)
| 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 |
| Quarter Ended September 30, 2017 | ||||||||||||||||||||
| Material Handling |
Distribution | Segment Total |
Corporate & Other |
Total | ||||||||||||||||
| GAAP Net sales |
$ | 95,192 | $ | 40,004 | $ | 135,196 | $ | (83 | ) | $ | 135,113 | |||||||||
| GAAP Gross profit |
39,143 | — | 39,143 | |||||||||||||||||
| Add: Restructuring expenses and other adjustments |
1,965 | — | 1,965 | |||||||||||||||||
|
|
|
|
|
|
|
|||||||||||||||
| Gross profit as adjusted |
41,108 | — | 41,108 | |||||||||||||||||
| Gross profit margin as adjusted |
30.4 | % | n/a | 30.4 | % | |||||||||||||||
| GAAP Operating income (loss) |
10,015 | 3,179 | 13,194 | (6,393 | ) | 6,801 | ||||||||||||||
| Add: Restructuring expenses and other adjustments(1) |
2,404 | — | 2,404 | 326 | 2,730 | |||||||||||||||
| Less: Gain on sale of assets |
(2,844 | ) | — | (2,844 | ) | — | (2,844 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Operating income (loss) as adjusted |
9,575 | 3,179 | 12,754 | (6,067 | ) | 6,687 | ||||||||||||||
| Operating income margin as adjusted |
10.1 | % | 7.9 | % | 9.4 | % | n/a | 4.9 | % | |||||||||||
| Add: Depreciation and amortization |
6,245 | 311 | 6,556 | 228 | 6,784 | |||||||||||||||
| Less: Depreciation adjustments |
(88 | ) | — | (88 | ) | — | (88 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| EBITDA as adjusted |
$ | 15,732 | $ | 3,490 | $ | 19,222 | $ | (5,839 | ) | $ | 13,383 | |||||||||
| EBITDA margin as adjusted |
16.5 | % | 8.7 | % | 14.2 | % | n/a | 9.9 | % | |||||||||||
| (1) | Includes gross profit adjustments of $1,965 and SG&A adjustments of $765 |
MYERS INDUSTRIES, INC.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
GROSS PROFIT, OPERATING INCOME AND EBITDA (UNAUDITED)
(Dollars in thousands)
| 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 | |||||||||||||||
| Less: 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 |
| Nine Months Ended September 30, 2017 | ||||||||||||||||||||
| Material Handling |
Distribution | Segment Total |
Corporate & Other |
Total | ||||||||||||||||
| GAAP Net sales |
$ | 289,700 | $ | 117,836 | $ | 407,536 | $ | (599 | ) | $ | 406,937 | |||||||||
| GAAP Gross profit |
119,196 | — | 119,196 | |||||||||||||||||
| Add: Restructuring expenses and other adjustments |
7,079 | — | 7,079 | |||||||||||||||||
|
|
|
|
|
|
|
|||||||||||||||
| Gross profit as adjusted |
126,275 | — | 126,275 | |||||||||||||||||
| Gross profit margin as adjusted |
31.0 | % | n/a | 31.0 | % | |||||||||||||||
| GAAP Operating income (loss) |
30,675 | 7,742 | 38,417 | (17,532 | ) | 20,885 | ||||||||||||||
| Add: Restructuring expenses and other adjustments(1) |
8,158 | — | 8,158 | 326 | 8,484 | |||||||||||||||
| Add: Asset impairment |
544 | — | 544 | — | 544 | |||||||||||||||
| Less: Gain on sale of assets |
(4,087 | ) | — | (4,087 | ) | — | (4,087 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Operating income (loss) as adjusted |
35,290 | 7,742 | 43,032 | (17,206 | ) | 25,826 | ||||||||||||||
| Operating income margin as adjusted |
12.2 | % | 6.6 | % | 10.6 | % | n/a | 6.3 | % | |||||||||||
| Add: Depreciation and amortization |
22,174 | 866 | 23,040 | 926 | 23,966 | |||||||||||||||
| Less: Depreciation adjustments |
(2,017 | ) | — | (2,017 | ) | — | (2,017 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| EBITDA as adjusted |
$ | 55,447 | $ | 8,608 | $ | 64,055 | $ | (16,280 | ) | $ | 47,775 | |||||||||
| EBITDA margin as adjusted |
19.1 | % | 7.3 | % | 15.7 | % | n/a | 11.7 | % | |||||||||||
| (1) | Includes gross profit adjustments of $7,079 and SG&A adjustments of $1,405 |
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, |
|||||||||||||||
| 2018 | 2017 | 2018 | 2017 | |||||||||||||
| GAAP Operating income (loss) |
$ | (25,839 | ) | $ | 6,801 | $ | (706 | ) | $ | 20,885 | ||||||
| Add: Restructuring expenses and other adjustments |
401 | 2,730 | 713 | 8,484 | ||||||||||||
| Add: Charges related to 2015 sale of Lawn & Garden business(1) |
33,331 | — | 33,331 | — | ||||||||||||
| Add: Asset impairments |
— | — | 308 | 544 | ||||||||||||
| Less: Gain on sale of assets |
— | (2,844 | ) | (873 | ) | (4,087 | ) | |||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Operating income (loss) as adjusted |
7,893 | 6,687 | 32,773 | 25,826 | ||||||||||||
| Less: Interest expense, net |
(883 | ) | (1,838 | ) | (3,835 | ) | (5,828 | ) | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Income (loss) before taxes as adjusted |
7,010 | 4,849 | 28,938 | 19,998 | ||||||||||||
| Less: Income tax expense(2) |
(1,752 | ) | (1,746 | ) | (7,234 | ) | (7,199 | ) | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Income (loss) from continuing operations as adjusted |
$ | 5,258 | $ | 3,103 | $ | 21,704 | $ | 12,799 | ||||||||
| Adjusted earnings (loss) per diluted share from continuing operations |
$ | 0.15 | $ | 0.10 | $ | 0.65 | $ | 0.42 | ||||||||
| (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 2018 was 25% and in 2017 was 36% |
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 | QTD | ||||||||||||||||||
| 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 | ||||||||||||
|
|
|
|
|
|
|
|||||||||||||||
