EX-99.1 2 d714122dex991.htm EX-99.1 EX-99.1

Exhibit 99.1

 

LOGO

Myers Industries Reports 2018 Fourth Quarter and Full Year Results

Strong earnings growth in 2018; free cash flow of $55 million

February 28, 2019, 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 fourth quarter and year ended December 31, 2018.

Business Highlights

 

  •  

GAAP income per diluted share from continuing operations for 2018 was $0.09 for the fourth quarter and a loss of $0.05 for the full year (includes $33.3 million of pre-tax charges related to the Company’s sale of its Lawn and Garden business, which was sold in 2015), compared to income of $0.06 and $0.35, respectively, for the fourth quarter and full year 2017

 

  •  

Adjusted income per diluted share from continuing operations was $0.13 for the fourth quarter and $0.76 for the full year, compared to $0.09 and $0.51, respectively, for the fourth quarter and full year 2017

 

  •  

Net sales for the fourth quarter decreased 1.2% compared to the fourth quarter 2017; net sales for the full year increased 3.6% compared to the full year 2017

 

  •  

Gross margin expanded 310 basis points to 30.4% for the fourth quarter and 280 basis points to 31.6% for the full year

 

  •  

Generated $55 million in free cash flow from continuing operations for 2018, an increase of 28% compared to 2017

 

  •  

Income per diluted share from continuing operations estimated to be between $0.75 and $0.85 for the full year 2019

“We are pleased with our performance for both the fourth quarter and full year of 2018. We made progress in our Myers Tire Supply business during the fourth quarter, growing top line at a low single digit rate. In addition, we increased our enterprise gross profit margin significantly, contributing to a more than 35 percent increase in our adjusted operating income for the quarter. As a result of our operating performance, combined with a reduction in working capital, we generated free cash flow of nearly $18 million during the quarter, an increase of 118% year-over-year,” said Dave Banyard, President and Chief Executive Officer of Myers Industries.

Mr. Banyard continued, “Through our continued focus on executing our strategy centered on growing the key niche markets where we deliver value, reducing costs through flexible operations and generating strong cash flow, we were able to deliver sales growth for the year of 3.6 percent, and adjusted operating income and free cash flow growth of nearly 30 percent. We continued to stress the importance of living a culture built around continuous improvement, and we continued to invest in areas to help further align ourselves with our customers’ needs as we help them be safer and more efficient.”

 

     Quarter Ended December 31,     Year Ended December 31,  
(Dollars in thousands, except per share data)    2018     2017     % Inc
(Dec)		     2018     2017     % Inc
(Dec)		  

Net sales

    $ 138,388     $ 140,106       (1.2 )%    $ 566,735     $ 547,043       3.6 % 

Gross profit

    $ 42,096     $ 38,257       10.0 %    $ 179,293     $ 157,453       13.9 % 

Gross profit margin

      30.4 %      27.3 %        31.6 %      28.8 %   

Operating income

    $ 7,033     $ 4,003       75.7 %    $ 6,327     $ 24,888       (74.6 )% 

Income (loss) from continuing operations:

             

Income (loss)

    $ 3,126     $ 1,821       71.7 %    $ (1,648 )    $ 10,844       (115.2 )% 

Income (loss) per diluted share

    $ 0.09     $ 0.06       50.0 %    $ (0.05 )    $ 0.35       (114.3 )% 

Operating income as adjusted(1)

    $ 7,652     $ 5,642       35.6 %    $ 40,425     $ 31,468       28.5 % 

Income (loss) from continuing operations as adjusted(1):

             

Income

    $ 4,768     $ 2,674       78.3 %    $ 25,835     $ 15,473       67.0 % 

Income per diluted share

    $ 0.13     $ 0.09       44.4 %    $ 0.76     $ 0.51       49.0 % 

EBITDA as adjusted

    $ 13,829     $ 12,532       10.3 %    $ 65,965     $ 60,306       9.4 % 

 

(1)

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

Fourth-Quarter 2018 Financial Summary

Fourth quarter 2018 net sales decreased $1.7 million or 1.2% (0.9% excluding currency fluctuation) to $138.4 million, compared to the fourth quarter of 2017. The decrease was the result of a sales decline in the Material Handling Segment, partially offset by a sales increase in the Distribution Segment. Gross profit increased $3.8 million to $42.1 million, compared to the fourth quarter of 2017. Higher pricing and savings from the footprint realignment completed in 2017 were partially offset by the lower sales volume. Selling, general and administrative expenses increased $1.3 million to $35.0 million, compared to the fourth quarter of 2017, due mostly to $1.4 million of incremental costs incurred to engage resources to assist with the planning and implementation of the transformation initiatives in the Distribution Segment. The departure of the Company’s previous CFO resulted in a reduction of costs of $1.0 million, which were offset by higher variable compensation costs. GAAP income per diluted share from continuing operations was $0.09, compared to $0.06 for the fourth quarter of 2017. Adjusted income per diluted share from continuing operations was $0.13, compared to $0.09 for the fourth quarter of 2017.

Net sales in the Material Handling Segment for the fourth quarter of 2018 decreased $2.0 million or 2.0% (1.6% excluding currency fluctuation) compared to the fourth quarter of 2017. The decrease in net sales was primarily due to anticipated sales declines in the Company’s consumer (unusually high hurricane related volume in 2017), food and beverage (unusually high seed box demand in 2017) and vehicle (declining RV sales) markets. Segment adjusted EBITDA increased 27.1% to $19.3 million for the fourth quarter, compared to $15.2 million for the fourth quarter of 2017. The increase in adjusted EBITDA was due primarily to favorable pricing and the savings from the 2017 strategic footprint realignment, partially offset by the lower sales volume.

Net sales in the Distribution Segment for the fourth quarter of 2018 increased $0.2 million or 0.6% compared to the fourth quarter of 2017. Sales in the Myers Tire Supply business increased low single digits due to higher sales of both consumables and equipment, partially offset by lower international sales. Sales in the Patch Rubber business were down low single digits year-over-year during the fourth quarter. The segment’s adjusted EBITDA was $0.6 million for the fourth quarter of 2018, compared to $1.6 million for the fourth quarter of 2017. The decrease in adjusted EBITDA was primarily the result of $1.4 million of incremental costs incurred to engage outside resources to assist with the planning and implementation of a set of initiatives to transform the business.

Full-Year 2018 Financial Summary

Full-year net sales increased 3.6% to $566.7 million, compared to full-year 2017. The increase in sales was the result of sales growth in the Material Handling Segment, partially offset by a sales decline in the Distribution Segment. Gross profit increased $21.8 million to $179.3 million, due mostly to favorable price and volume and savings from the 2017 strategic footprint realignment. Selling, general and administrative expenses increased $3.8 million during 2018 to $139.3 million primarily as a result of higher compensation costs and the incremental costs incurred to engage outside resources to assist with the transformation initiatives in the Distribution Segment. GAAP income per diluted share from continuing operations was a loss of $0.05 (includes $33.3 million of pre-tax charges related to the sale of the Company’s Lawn and Garden business completed in 2015), compared to income of $0.35 for the full year of 2017. Adjusted income per diluted share from continuing operations was $0.76, compared to $0.51 for the full year of 2017.

The Material Handling Segment’s net sales for the full year of 2018 increased 6.6% compared to the full year of 2017. The increase in net sales was due primarily to increased demand in the Company’s food and beverage, vehicle and industrial markets, partially offset by sales declines in the consumer (unusually high hurricane related volume in 2017) market. Segment adjusted EBITDA was $82.8 million for the full year of 2018, compared to $70.6 million for the full year of 2017.

The Distribution Segment’s net sales for the full year of 2018 declined 4.3% compared to the full year of 2017. The decrease in net sales was primarily due to lower equipment and international sales compared to 2017. The segment’s adjusted EBITDA was $7.9 million for the full year of 2018, compared to $10.2 million for the full year of 2017. The decline in adjusted EBITDA was primarily due to the lower sales volume and the incremental costs incurred to engage outside resources to assist with the planning and implementation of a set of transformation initiatives for the segment.

2019 Outlook

For fiscal year 2019, the Company anticipates that total revenue will be flat on a constant currency basis compared to the prior year. Anticipated sales increases in the consumer, industrial and auto aftermarket end markets are expected to be offset by sales decreases in the food and beverage and vehicle markets due to more normalized seed box demand and a continued decline in the RV market following years of strong growth. The Company expects that a positive sales mix and an ongoing focus on executing pricing and continuous improvement actions will lead to adjusted operating margin growth again in 2019. The Company expects depreciation and amortization to be approximately $25 million, net interest expense to be approximately $5 million, and the effective tax rate to be approximately 27%. Income per diluted share from continuing operations is estimated to be between $0.75 and $0.85, based on a fully diluted share count of 36.0 million shares. Capital expenditures are expected to be approximately $10 million.

Mr. Banyard concluded, “We will remain diligent in executing our strategy in 2019 and one of our top priorities remains the transformation of our Distribution Segment, which is underway. Through enhancements in our go-to-market strategy, the implementation of 80/20 to drive improved contribution margins, and optimization of our logistics and overhead costs, our goal is to expand our Distribution Segment EBITDA margin to 10% by the end of 2020. Additionally, through the new product introduction in our Material Handling Segment that is expected to help us grow our consumer market, to anticipated strength in our industrial and auto aftermarket end markets, we expect to offset lower sales in our food and beverage and vehicle (i.e. RV) end markets during 2019. Lastly, we will continue to evaluate opportunities to leverage our strong balance sheet into accretive acquisition opportunities, but only when we find the optimal complement to our platform that will position the Company to deliver long-term shareholder value.”

Conference Call Details

The Company will host an earnings conference call and webcast for investors and analysts on Thursday, February 28, 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 1662969. 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 1662969.

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.

Contact: Monica Vinay, Vice President, Investor Relations & Treasurer, (330) 761-6212

MYERS INDUSTRIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

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

 

     Quarter Ended     Year Ended  
     December 31,
2018		     December 31,
2017		     December 31,
2018		     December 31,
2017		  

Net sales

    $ 138,388     $ 140,106     $ 566,735     $ 547,043  

Cost of sales

      96,292       101,849       387,442       389,590  
  

 

 

    

 

 

    

 

 

    

 

 

  

Gross profit

      42,096       38,257       179,293       157,453  

Selling, general and administrative expenses

      34,975       33,724       139,335       135,503  

Loss (gain) on disposal of fixed assets

      88       530       (8 )      (3,482 ) 

Impairment charges

      —         —         308       544  

Other expenses

      —         —         33,331       —    
  

 

 

    

 

 

    

 

 

    

 

 

  

Operating income

      7,033       4,003       6,327       24,888  

Interest expense, net

      1,103       1,464       4,938       7,292  

Loss on extinguishment of debt

      —         1,888       —         1,888  
  

 

 

    

 

 

    

 

 

    

 

 

  

Income from continuing operations before income taxes

      5,930       651       1,389       15,708  

Income tax expense (benefit)

      2,804       (1,170 )      3,037       4,864  
  

 

 

    

 

 

    

 

 

    

 

 

  

Income (loss) from continuing operations

      3,126       1,821       (1,648 )      10,844  

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

      (788 )      (20,074 )      (1,701 )      (20,733 ) 
  

 

 

    

 

 

    

 

 

    

 

 

  

Net income (loss)

    $ 2,338     $ (18,253 )    $ (3,349 )    $ (9,889 ) 
  

 

 

    

 

 

    

 

 

    

 

 

  

Income (loss) per common share from continuing operations:

         

Basic

    $ 0.09     $ 0.06     $ (0.05 )    $ 0.36  

Diluted

    $ 0.09     $ 0.06     $ (0.05 )    $ 0.35  

Income (loss) per common share from discontinued operations:

         

Basic

    $ (0.02 )    $ (0.66 )    $ (0.05 )    $ (0.69 ) 

Diluted

    $ (0.02 )    $ (0.65 )    $ (0.05 )    $ (0.68 ) 

Net income (loss) per common share:

         

Basic

    $ 0.07     $ (0.60 )    $ (0.10 )    $ (0.33 ) 

Diluted

    $ 0.07     $ (0.59 )    $ (0.10 )    $ (0.33 ) 

Weighted average common shares outstanding:

         

Basic

      35,355,863       30,423,324       33,426,855       30,222,289  

Diluted

      35,576,611       30,851,536       33,426,855       30,562,646  

MYERS INDUSTRIES, INC.

SALES AND EARNINGS BY SEGMENT (UNAUDITED)

(Dollars in thousands)

 

     Quarter Ended December 31,     Year Ended December 31,  
     2018     2017     % Change     2018     2017     % Change  

Net sales

             

Material Handling

    $ 99,578     $ 101,613       (2.0 )%    $ 417,199     $ 391,313       6.6 % 

Distribution

      38,821       38,592       0.6 %      149,636       156,428       (4.3 )% 

Inter-company Sales

      (11 )      (99 )      —         (100 )      (698 )      —    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total

    $ 138,388     $ 140,106       (1.2 )%    $ 566,735     $ 547,043       3.6 % 
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Operating income (loss)

             

Material Handling

    $ 13,083     $ 8,199       59.6 %    $ 57,948     $ 38,874       49.1 % 

Distribution

      371       1,331       (72.1 )%      7,441       9,073       (18.0 )% 

Corporate

      (6,421 )      (5,527 )      —         (59,062 )      (23,059 )      —    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total

    $ 7,033     $ 4,003       75.7 %    $ 6,327     $ 24,888       (74.6 )% 
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Operating income (loss) as adjusted

             

Material Handling

    $ 13,501     $ 8,838       52.8 %    $ 58,871     $ 44,128       33.4 % 

Distribution

      371       1,331       (72.1 )%      6,776       9,073       (25.3 )% 

Corporate

      (6,220 )      (4,527 )      —         (25,222 )      (21,733 )      —    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total

    $ 7,652     $ 5,642       35.6 %    $ 40,425     $ 31,468       28.5 % 
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Operating income margin as adjusted

             

Material Handling

      13.6 %      8.7 %        14.1 %      11.3 %   

Distribution

      1.0 %      3.4 %        4.5 %      5.8 %   

Corporate

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

 

 

    

 

 

      

 

 

    

 

 

    

Total

      5.5 %      4.0 %        7.1 %      5.8 %   
  

 

 

    

 

 

      

 

 

    

 

 

    

EBITDA as adjusted

             

Material Handling

    $ 19,318     $ 15,195       27.1 %    $ 82,816     $ 70,641       17.2 % 

Distribution

      631       1,640       (61.5 )%      7,945       10,247       (22.5 )% 

Corporate

      (6,120 )      (4,303 )      —         (24,796 )      (20,582 )      —    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total

    $ 13,829     $ 12,532       10.3 %    $ 65,965     $ 60,306       9.4 % 
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

EBITDA margin as adjusted

             

Material Handling

      19.4 %      15.0 %        19.9 %      18.1 %   

Distribution

      1.6 %      4.2 %        5.3 %      6.6 %   

Corporate

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

 

 

    

 

 

      

 

 

    

 

 

    

Total

      10.0 %      8.9 %        11.6 %      11.0 %   
  

 

 

    

 

 

      

 

 

    

 

 

    

MYERS INDUSTRIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (UNAUDITED)

(Dollars in thousands)

 

     December 31, 2018      December 31, 2017  

Assets

      

Current Assets

      

Cash

    $ 58,894      $ 2,520  

Restricted cash

      —          8,659  

Accounts receivable, net

      72,939        76,509  

Income tax receivable

      4,892        12,954  

Inventories

      43,596        47,166  

Prepaid expenses and other current assets

      2,534        2,204  
  

 

 

     

 

 

  

Total Current Assets

      182,855        150,012  

Property, plant, & equipment, net

      65,460        83,904  

Deferred income taxes

      5,270        120  

Other assets

      95,060        121,906  
  

 

 

     

 

 

  

Total Assets

    $ 348,645      $ 355,942  
  

 

 

     

 

 

  

Liabilities & Shareholders’ Equity

      

Current Liabilities

      

Accounts payable

    $ 60,849      $ 63,581  

Accrued expenses

      36,574        35,072  
  

 

 

     

 

 

  

Total Current Liabilities

      97,423        98,653  

Long-term debt, net

      76,790        151,036  

Other liabilities

      19,794        8,236  

Deferred income taxes

      —          4,265  

Total Shareholders’ Equity

      154,638        93,752  
  

 

 

     

 

 

  

Total Liabilities & Shareholders’ Equity

    $ 348,645      $ 355,942  
  

 

 

     

 

 

  

MYERS INDUSTRIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

(Dollars in thousands)

 

     Year Ended December 31,  
     2018     2017  

Cash Flows From Operating Activities

     

Net income (loss)

    $ (3,349 )    $ (9,889 ) 

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

      (1,701 )      (20,733 ) 
  

 

 

    

 

 

  

Income (loss) from continuing operations

      (1,648 )      10,844  

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

     

Depreciation

      17,638       19,952  

Amortization

      8,485       8,886  

Accelerated depreciation associated with restructuring activities

      16       1,993  

Non-cash stock-based compensation expense

      4,257       3,626  

(Gain) loss on disposal of fixed assets

      (8 )      (3,482 ) 

Provision for loss on note receivable

      23,008       —    

Lease guarantee contingency

      10,323       —    

Loss on extinguishment of debt

      —         1,888  

Deferred taxes

      (9,450 )      (5,663 ) 

Interest income received (accrued) on note receivable

      (361 )      (1,384 ) 

Impairment charges

      308       544  

Other

      457       256  

Payments on performance based compensation

      (1,249 )      (1,010 ) 

Other long-term liabilities

      180       723  

Cash flows provided by (used for) working capital

     

Accounts receivable

      4,927       (6,709 ) 

Inventories

      3,151       (1,876 ) 

Prepaid expenses and other current assets

      (353 )      2,209  

Accounts payable and accrued expenses

      713       18,299  
  

 

 

    

 

 

  

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

      60,394       49,096  

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

      858       (4,633 ) 
  

 

 

    

 

 

  

Net cash provided by (used for) operating activities

      61,252       44,463  
  

 

 

    

 

 

  

Cash Flows From Investing Activities

     

Capital expenditures

      (5,123 )      (5,814 ) 

Proceeds from sale of property, plant and equipment

      2,633       11,058  
  

 

 

    

 

 

  

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

      (2,490 )      5,244  

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

      —         (1,107 ) 
  

 

 

    

 

 

  

Net cash provided by (used for) investing activities

      (2,490 )      4,137  
  

 

 

    

 

 

  

Cash Flows From Financing Activities

     

Net borrowing (repayments) on credit facility

      (74,557 )      (16,474 ) 

Repayments of senior unsecured notes

      —         (23,798 ) 

Cash dividends paid

      (17,862 )      (16,341 ) 

Proceeds from issuance of common stock

      2,853       4,527  

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

      79,522       —    

Shares withheld for employee taxes on equity awards

      (714 )      (620 ) 

Deferred financing costs

      —         (1,030 ) 
  

 

 

    

 

 

  

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

      (10,758 )      (53,736 ) 

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

      —         —    
  

 

 

    

 

 

  

Net cash provided by (used for) financing activities

      (10,758 )      (53,736 ) 
  

 

 

    

 

 

  

Foreign exchange rate effect on cash

      (289 )      (208 ) 

Less: Net increase (decrease) in cash classified within discontinued operations

      —         (5,484 ) 
  

 

 

    

 

 

  

Net increase in cash and restricted cash

      47,715       140  

Cash and restricted cash at January 1

      11,179       11,039  
  

 

 

    

 

 

  

Cash and restricted cash at December 31

    $ 58,894     $ 11,179  
  

 

 

    

 

 

  

MYERS INDUSTRIES, INC.

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

GROSS PROFIT, OPERATING INCOME AND EBITDA (UNAUDITED)

(Dollars in thousands)

 

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

GAAP Net sales

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

GAAP Gross profit

          42,096       —         42,096  

Add: Restructuring expenses and other adjustments

          171       —         171  
      

 

 

    

 

 

    

 

 

  

Gross profit as adjusted

          42,267       —         42,267  

Gross profit margin as adjusted

          30.5 %      n/a       30.5 % 

GAAP Operating income (loss)

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

Add: Restructuring expenses and other adjustments(1)

      418       —         418       201       619  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Operating income (loss) as adjusted

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

Operating income margin as adjusted

      13.6 %      1.0 %      10.0 %      n/a       5.5 % 

Add: Depreciation and amortization

      5,883       260       6,143       100       6,243  

Less: Depreciation adjustments

      (66 )      —         (66 )      —         (66 ) 
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

EBITDA as adjusted

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

EBITDA margin as adjusted

      19.4 %      1.6 %      14.4 %      n/a       10.0 % 

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

    

     Quarter Ended December 31, 2017  
     Material
Handling		     Distribution     Segment
Total		     Corporate
& Other		     Total  

GAAP Net sales

    $ 101,613     $ 38,592     $ 140,205     $ (99 )    $ 140,106  

GAAP Gross profit

          38,257       —         38,257  

Add: Restructuring expenses and other adjustments

          422       —         422  
      

 

 

    

 

 

    

 

 

  

Gross profit as adjusted

          38,679       —         38,679  

Gross profit margin as adjusted

          27.6 %      n/a       27.6 % 

GAAP Operating income (loss)

      8,199       1,331       9,530       (5,527 )      4,003  

Add: Restructuring expenses and other adjustments(1)

      498       —         498       1,000       1,498  

Add: Loss on sale of assets

      141       —         141       —         141  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Operating income (loss) as adjusted

      8,838       1,331       10,169       (4,527 )      5,642  

Operating income margin as adjusted

      8.7 %      3.4 %      7.3 %      n/a       4.0 % 

Add: Depreciation and amortization

      6,332       309       6,641       224       6,865  

Less: Depreciation adjustments

      25       —         25       —         25  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

EBITDA as adjusted

    $ 15,195     $ 1,640     $ 16,835     $ (4,303 )    $ 12,532  

EBITDA margin as adjusted

      15.0 %      4.2 %      12.0 %      n/a       8.9 % 

(1)   Includes gross profit adjustments of $422 and SG&A adjustments of $1,076

    

MYERS INDUSTRIES, INC.

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

GROSS PROFIT, OPERATING INCOME AND EBITDA (UNAUDITED)

(Dollars in thousands)

 

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

GAAP Net sales

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

GAAP Gross profit

          179,293       —         179,293  

Add: Restructuring expenses and other adjustments

          746       —         746  
      

 

 

    

 

 

    

 

 

  

Gross profit as adjusted

          180,039       —         180,039  

Gross profit margin as adjusted

          31.8 %      n/a       31.8 % 

GAAP Operating income (loss)

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

Add: Restructuring expenses and other adjustments(1)

      1,131       —         1,131       201       1,332  

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

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

Operating income margin as adjusted

      14.1 %      4.5 %      11.6 %      n/a       7.1 % 

Add: Depreciation and amortization

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

Less: Depreciation adjustments

      (213 )      —         (213 )      —         (213 ) 
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

EBITDA as adjusted

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

EBITDA margin as adjusted

      19.9 %      5.3 %      16.0 %      n/a       11.6 % 

(1)   Includes gross profit adjustments of $746 and SG&A adjustments of $586

    

     Year Ended December 31, 2017  
     Material
Handling		     Distribution     Segment
Total		     Corporate
& Other		     Total  

GAAP Net sales

    $ 391,313     $ 156,428     $ 547,741     $ (698 )    $ 547,043  

GAAP Gross profit

          157,453       —         157,453  

Add: Restructuring expenses and other adjustments

          7,501       —         7,501  
      

 

 

    

 

 

    

 

 

  

Gross profit as adjusted

          164,954       —         164,954  

Gross profit margin as adjusted

          30.1 %      n/a       30.2 % 

GAAP Operating income (loss)

      38,874       9,073       47,947       (23,059 )      24,888  

Add: Restructuring expenses and other adjustments(1)

      8,656       —         8,656       1,326       9,982  

Add: Asset impairment

      544       —         544       —         544  

Less: Gain on sale of assets

      (3,946 )      —         (3,946 )      —         (3,946 ) 
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Operating income (loss) as adjusted

      44,128       9,073       53,201       (21,733 )      31,468  

Operating income margin as adjusted

      11.3 %      5.8 %      9.7 %      n/a       5.8 % 

Add: Depreciation and amortization

      28,506       1,174       29,680       1,151       30,831  

Less: Depreciation adjustments

      (1,993 )      —         (1,993 )      —         (1,993 ) 
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

EBITDA as adjusted

    $ 70,641     $ 10,247     $ 80,888     $ (20,582 )    $ 60,306  

EBITDA margin as adjusted

      18.1 %      6.6 %      14.8 %      n/a       11.0 % 

(1)   Includes gross profit adjustments of $7,501 and SG&A adjustments of $2,481

    

MYERS INDUSTRIES, INC.

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

INCOME AND EARNINGS PER DILUTED SHARE (UNAUDITED)

(Dollars in thousands, except per share data)

 

     Quarter Ended December 31,     Year Ended December 31,  
     2018     2017     2018     2017  

GAAP Operating income

    $ 7,033     $ 4,003     $ 6,327     $ 24,888  

Add: Restructuring expenses and other adjustments

      619       1,498       1,332       9,982  

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

      —         —         33,331       —    

Add: Asset impairments

      —         —         308       544  

Less: Loss (gain) on sale of assets

      —         141       (873 )      (3,946 ) 
  

 

 

    

 

 

    

 

 

    

 

 

  

Operating income as adjusted

      7,652       5,642       40,425       31,468  

Less: Interest expense, net

      (1,103 )      (1,464 )      (4,938 )      (7,292 ) 
  

 

 

    

 

 

    

 

 

    

 

 

  

Income before taxes as adjusted

      6,549       4,178       35,487       24,176  

Less: Income tax expense(2)

      (1,781 )      (1,504 )      (9,652 )      (8,703 ) 
  

 

 

    

 

 

    

 

 

    

 

 

  

Income from continuing operations as adjusted

    $ 4,768     $ 2,674     $ 25,835     $ 15,473  

Adjusted earnings per diluted share from continuing operations(3)

    $ 0.13     $ 0.09     $ 0.76     $ 0.51  

 

(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 27.2% and in 2017 was 36%

(3)

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

MYERS INDUSTRIES, INC.

RECONCILIATION OF FREE CASH FLOW TO GAAP NET CASH PROVIDED BY

(USED FOR) OPERATING ACTIVITIES – CONTINUING OPERATIONS

(UNAUDITED)

(Dollars in thousands)

 

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

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

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

Capital expenditures

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

 

 

    

 

       

 

 

  

Free cash flow

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

 

 

    

 

       

 

 

  
     Year          YTD            Quarter  
     December 31,
2017		          September 30,
2017		            December 31,
2017		  

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

    $ 49,096       -    $ 40,284       =      $ 8,812  

Capital expenditures

      (5,814 )      -      (5,109 )      =        (705 ) 
  

 

 

    

 

       

 

 

  

Free cash flow

    $ 43,282       -    $ 35,175       =      $ 8,107