Myers Industries Reports 2011 Fourth Quarter And Full Year Results

Myers Industries, Inc. (NYSE: MYE) today announced results for the fourth quarter and full year ended December 31, 2011.

Net sales for the fourth quarter were $195.4 million compared to $188.2 million in the fourth quarter of 2010. The increase of 3.8% was primarily driven by sales generated by new product and customer sales and improved pricing. The gross margin increased to 28.0% in the fourth quarter compared to 23.5% in the same quarter of 2010. The Company’s focus on operations excellence and a favorable mix of higher margin new products contributed to the increase.

Net income in the fourth quarter of 2011 was $5.9 million or $0.18 per share compared to a net loss in the fourth quarter of 2010 of $50.5 million or $1.43 per share. Net income in the fourth quarter of 2011 included approximately $1.4 million of special pre-tax costs while net income in the fourth quarter of 2010 included $69.0 million of special pre-tax costs. Details regarding the special pre-tax costs for both quarters are provided on the Reconciliation of Non-GAAP Financial Measures included in this release. Adjusting for these special items, earnings per share was $0.19 in the fourth quarter of 2011 compared to $0.12 in the fourth quarter of 2010.

“Our fourth quarter demonstrates the results of our efforts to create value through a focus on our innovation and operations excellence initiatives that we began in 2010,” said President and Chief Executive Officer John C. Orr. “The new products and solutions that we are delivering generated a good portion of our sales increase in the quarter while the productivity improvements that we have made contributed to the expansion in our gross margin.”

Net sales increased 2.4% for the full year of 2011 to $755.7 million compared to $737.6 million in 2010. The gross margin expanded to 26.2% in the full year of 2011 from 22.3% in 2010.

Net income for the full year was $24.5 million or $0.71 per share compared to a net loss in 2010 of $42.8 million or $1.21 per share. Net income in 2011 included approximately $4.6 million of special pre-tax costs while net income in 2010 included $71.3 million of special pre-tax costs. Details regarding the special pre-tax costs for both years are provided on the Reconciliation of Non-GAAP Financial Measures included in this release. Adjusting for these special items, earnings per share was $0.67 in 2011 as compared to $0.37 in 2010.

“Our results and actions in 2011 reflect our strong commitment to driving value for our customers and our shareholders,” said Orr. “Despite the challenges of an uncertain economy and higher raw material costs throughout most of the year, we delivered improved operating results. Additionally, we once again generated strong cash flow, which was returned in part to our shareholders through the $21 million repurchase of shares which amounted to 5.7% of the Company’s outstanding stock. The work we began in 2010 on innovation and profit improvement is paying off and positions us well for the future. We will also continue to be focused on returning cash to shareholders through dividends and timely share repurchases.”

Segment Results

The results below are as adjusted and exclude special pre-tax costs as detailed on the Reconciliation of Non-GAAP Financial Measures included in this release.

The Material Handling Segment’s net sales in the fourth quarter decreased 13% to $57 million compared to $65.5 million in 2010. An $8.2 million lease sale occurred in 2010 and did not repeat in 2011, accounting for the majority of the decline in sales. Material Handling’s income before taxes was $6.6 million in the fourth quarter of 2011 compared to $6.9 million in 2010. Lower manufacturing costs resulting from the Company’s operations excellence initiatives as well as a favorable customer and product mix helped to offset the lost margin on lower sales.

Net sales in the Material Handling Segment increased 1.6% to $261.8 million in 2011 compared to $257.8 million in 2010. Sales driven by pricing to offset higher raw material costs and a strong demand in the agricultural, industrial, manufacturing and automotive markets more than offset $37.6 million in lower margin custom pallet sales that occurred in 2010 and not in 2011. Material Handling’s income before taxes in 2011 was $34.1 million compared to $23.3 million in 2010. Increased sales volume, an unusually favorable customer mix, lower manufacturing costs and higher prices, which offset increased raw material costs, drove higher gross margins throughout the year.

The Lawn & Garden Segment’s net sales in the fourth quarter increased 9.5% to $65.1 million as compared to $59.5 million in the fourth quarter of 2010. Lawn & Garden’s income before taxes was $3.7 million compared to $0.8 million in the fourth quarter of 2010. The segment was able to generate an increase in both sales and income before taxes as a result of the continued successful implementation and execution of the operations turnaround plan put into place in the second half of 2010.

Net sales in the Lawn and Garden Segment in 2011 were $217.1 million, a decrease of 3.0% compared to net sales of $223.8 million in 2010. The decrease in net sales was primarily due to lower sales volumes reflecting the prolonged effect of a weak 2011 spring season resulting from poor weather conditions. The lower sales volumes were partially offset by favorable pricing actions taken to offset higher raw material costs. Lawn & Garden’s income before taxes in 2011 was $4.6 million compared to a loss of $2.2 million in 2010. Through the execution of the turnaround plan put into place in 2010, the segment was able to offset the margin lost from lower sales volumes as well as improve operating results by $6.8 million year-over-year.

The Distribution Segment’s net sales were $47.2 million in the fourth quarter compared to $46.3 million in the fourth quarter of 2010, an increase of 2.1%. Continued increases in new product and customer sales and services resulting from the Company’s growth and innovation initiative more than offset lower unit volumes arising from a slowing of miles driven during the quarter. Distribution’s income before taxes was $4.7 million in the fourth quarter of 2011 compared to $4.3 million in 2010. Income generated by the increase in sales was partially offset by higher than anticipated variable selling expenses.

Net sales in the Distribution Segment increased to $183.7 million in 2011 compared to $174.9 million in 2010. The increase of 5% was due mainly to the success of new product and service sales initiatives and a broader customer base. Distribution’s income before taxes in 2011 was $17.0 million compared to $15.8 million in 2010. The income generated by the increased sales was partially offset by higher variable selling and distribution expenses during the year.

The Engineered Products Segment’s net sales were $31.1 million in the fourth quarter compared to $22.6 million in the fourth quarter of 2010, an increase of 37.6%. Engineered Product’s income before taxes was $2.9 million in the fourth quarter of 2011 compared to $1.1 million in the fourth quarter of 2010. Increased unit volumes across all businesses within the segment drove the higher sales and income in the quarter.

In the Engineered Products Segment, net sales in 2011 increased 11% to $116.2 million from $104.8 million in 2010. Strong demand in the recreational vehicle, marine and custom markets and new product sales resulting from innovation programs drove the majority of the increase. Income before taxes in the Engineered Products Segment was $11.5 million compared to $9.8 million in 2010, an increase of 17.3%. Higher sales volumes and lower manufacturing costs produced the majority of the increase.

Cash Flow

Cash flow provided by operations for the twelve months ended December 31, 2011 was $64.2 million compared to $45.6 million in 2010. The significant cash generated in 2011 enabled the Company to increase its dividend by 8% maintaining a yield of greater than 2%, repurchase two million shares of stock and reduce debt by $9.7 million.

Other Financial Items

During the fourth quarter of 2011, the Company purchased 204,880 shares of stock, at an average price of $10.37. As of December 31, 2011, the Company purchased two million shares of stock at an average price of $10.47. Cash expenditures related to the repurchases were $2 million and $21 million for the quarter and the year, respectively.

Capital expenditures totaled $21.9 million for the twelve months ended December 31, 2011.

At December 31, 2011, debt, net of cash, was $67.2 million compared to $77.4 million at the end of the third quarter.

First Quarter and Full Year 2012 Outlook

The Company remains committed to its focus on executing its strategic principles centered on customer dedication, innovation, operations excellence, organization development and financial strength. Looking forward to 2012, the Company anticipates that the sales attained from the implementation of new products and solutions in 2011 will continue during 2012. The Company also believes that the momentum generated through increased productivity, quality and delivery performance across all of its segments provides a strong foundation for solid performance in 2012. Despite the economic uncertainties, the Company anticipates that the first quarter should continue to show the benefits of these efforts.

Conference Call Details

The Company will host an earnings conference call and webcast for investors and analysts on Thursday, February 16, 2012 at 11:00 a.m. ET. The call is anticipated to last approximately one hour and may be accessed at (877) 407-8033. Callers are asked to sign on at least five minutes in advance. The call will be available as a webcast through the Company's web site, www.myersind.com. Click on the Investor Relations tab to access the webcast. Webcast attendees will be in a listen-only mode. An archived replay of the call will also be available on the site shortly after the event. To listen to a telephone replay, callers should dial: (US) 877-660-6853 or (Int’l) 201-612-7415. The replay passcodes are: Account # 286; Conference ID # 387679.

About Myers Industries

Myers Industries, Inc. is an international manufacturer of polymer products for industrial, agricultural, automotive, commercial, and consumer markets. The Company is also the largest wholesale distributor of tools, equipment and supplies for the tire, wheel and undervehicle service industry in the U.S. The Company reported net sales from continuing operations of $755.7 million in 2011. Visit www.myersind.com to learn more.

Caution on Forward-Looking Statements

Statements in this release may include “forward-looking” statements within the meaning of the Private Securities Litigation Reform Act of 1995. Any statement that is not of historical fact may be deemed “forward-looking”. Words such as “expect”, “believe”, “project”, “plan”, “anticipate”, “intend”, “objective”, “goal”, “view”, and similar expressions identify forward-looking statements. These statements are based on management’s current views and assumptions of future events and financial performance and involve a number of risks and uncertainties, many outside of the Company’s control that could cause actual results to materially differ from those expressed or implied. Risks and uncertainties include: changes in the markets for the Company’s business segments; changes in trends and demands in the markets in which the Company competes; unanticipated downturn in business relationships with customers or their purchases; competitive pressures on sales and pricing; raw material availability, increases in raw material costs, or other production costs; future economic and financial conditions in the United States and around the world; ability to weather the current economic downturn; inability of the Company to meet future capital requirements; claims, litigation and regulatory actions against the Company; changes in laws and regulations affecting the Company; the Company’s ability to execute the components of its Strategic Business Evolution process; and other risks as detailed in the Company’s 10-K and other reports filed with the Securities and Exchange Commission. Such reports are available on the Securities and Exchange Commission’s public reference facilities and its web site at http://www.sec.gov, and on the Company’s Investor Relations section of its web site at http://www.myersind.com. Myers Industries undertakes no obligation to publicly update or revise any forward-looking statements contained herein. These statements speak only as of the date made.
MYERS INDUSTRIES, INC.
CONDENSED STATEMENTS OF INCOME (UNAUDITED)
($ in thousands, except share data)
 
  Quarter Ended Dec 31,   Twelve Months Ended Dec 31,
2011   2010 2011   2010
Net Sales $ 195,362 $ 188,245 $ 755,654 $ 737,618
Cost of Sales   140,653   144,061     557,385   573,094  
Gross Profit 54,709 44,184 198,269 164,524
Selling, General & Administrative Expenses   44,600   108,593     159,860   212,167  
Operating Income 10,109 (64,409 ) 38,409 (47,643 )
Other Income, Net -0- 3,827 -0- 3,827
Interest Expense, Net   1,067   1,832     4,722   7,205  
Income Before Income Taxes 9,042

 
(62,414 ) 33,687 (51,021 )
Income Tax Expense (Benefit)   3,127   (11,930 )   9,182   (8,187 )
Net Income (Loss) $ 5,915 $ (50,484 ) $ 24,505 $ (42,834 )
 
Income Per Share
Basic $ 0.18 $ (1.43 ) $ 0.71 $ (1.21 )
Diluted $ 0.18 $ (1.43 ) $ 0.71 $ (1.21 )
Weighted Average Common Shares Outstanding
Basic 33,445,836 35,314,559 34,584,558 35,304,817
Diluted 33,735,679 35,314,559 34,743,543 35,304,817
 
           
MYERS INDUSTRIES, INC.
2011 SALES AND EARNINGS BY SEGMENT (UNAUDITED)
($ in thousands)
 
Fourth Quarter Ended December 31, Twelve Months Ended December 31,
2011   2010   % Change 2011   2010   % Change
Net Sales
Material Handling $ 57,004 $ 65,486 -13.0 % $ 261,812 $ 257,807 1.6 %
Lawn & Garden 65,142 59,494 9.5 % 217,140 223,809 -3.0 %
Distribution 47,215 46,252 2.1 % 183,726 174,917 5.0 %
Engineered Products 31,060 22,576 37.6 % 116,243 104,763 11.0 %
Intercompany Sales   (5,059 )     (5,563 )   ---     (23,267 )     (23,678 )   ---  
Total $ 195,362     $ 188,245     3.8 % $ 755,654     $ 737,618     2.4 %
 

Income (Loss) Before Income Taxes
Material Handling $ 6,597 $ 6,635 -0.6 % $ 34,123 $ 22,577 51.1 %
Lawn & Garden 3,379 (71,386 ) --- 4,226 (74,650 ) ----
Distribution 4,085 4,145 -1.5 % 15,736 15,155 3.8 %
Engineered Products 2,429 894 171.7 % 10,810 8,865 21.9 %
Corporate   (7,448 )     (2,702 )   ---     (31,208 )     (22,968 )   ---  
Total $ 9,042     $ (62,414 )   ---   $ 33,687     $ (51,021 )   ---  
 
 
MYERS INDUSTRIES, INC. RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
INCOME (LOSS) BEFORE TAXES BY SEGMENT (UNAUDITED)
($ in millions)
     

Quarter EndedDecember 31,

Twelve MonthsEnded December 31,
  2011     2010     2011     2010  

Material Handling
Income before taxes as reported $ 6.6 $ 6.6 $ 34.1 $ 22.6
Restructuring expenses 0.0 0.3 0.0 1.4
Gain on plant sale   0.0     0.0     0.0     (0.7 )
Income before taxes as adjusted 6.6 6.9 34.1 23.3
 

Lawn & Garden
Income (loss) before taxes as reported 3.4 (71.4 ) 4.2 (74.6 )
Restructuring expenses 0.3 0.2 0.4 0.4
Goodwill impairment   0.0     72.0     0.0     72.0  
Income (loss) before taxes as adjusted 3.7 0.8 4.6 (2.2 )
 

Distribution
Income before taxes as reported 4.1 4.1 15.7 15.2
Restructuring expenses 0.9 0.2 2.0 0.6
Gain on building sales   (0.3 )   0.0     (0.7 )   0.0  
Income before taxes as adjusted 4.7 4.3 17.0 15.8
 

Engineered Products
Income before taxes as reported 2.4 0.9 10.8 8.9
Restructuring expenses   0.5     0.2     0.7     0.9  
Income before taxes as adjusted 2.9 1.1 11.5 9.8
 

Corporate and interest expense
Income (loss) before taxes as reported (7.5 ) (2.7 ) (31.1 ) (23.1 )
Restructuring - environment and other adjustments 0.0 0.0 2.2 0.6
Claims Settlement Gain   0.0     (3.8 )   0.0     (3.8 )
Income (loss) before taxes as adjusted (7.5 ) (6.5 ) (28.9 ) (26.3 )
 

Consolidated
Income before taxes as reported 9.0 (62.5 ) 33.7 (51.0 )
Restructuring expenses and other adjustments   1.4     69.1     4.6     71.3  
Income before taxes as adjusted 10.4 6.6 38.3 20.3
Income taxes   4.0     2.4     14.9     7.3  
Net Income as adjusted $ 6.4   $ 4.2   $ 23.4   $ 13.0  
 

Note: Numbers in the Corporate and interest expense section above may be rounded for presentation purposes.

Note on Reconciliation of Income and Earnings Data : Income (loss) excluding the items mentioned above in the text of this release and in this reconciliation chart is a non-GAAP financial measure that Myers Industries, Inc. calculates according to the schedule above, using GAAP amounts from the Consolidated Financial Statements. The Company believes that the excluded items are not primarily related to core operational activities. The Company believes that income (loss) excluding items that are not primarily related to core operational activities is generally viewed as providing useful information regarding a company’s operating profitability. Management uses income (loss) excluding these items as well as other financial measures in connection with its decision-making activities. Income (loss) excluding these items should not be considered in isolation or as a substitute for net income (loss), income (loss) before taxes or other consolidated income data prepared in accordance with GAAP. The Company's method for calculating income (loss) excluding these items may not be comparable to methods used by other companies.

   
MYERS INDUSTRIES, INC.
CONDENSED STATEMENTS OF FINANCIAL POSITION (UNAUDITED)
($ in thousands)
 
December 31, 2011 December 31, 2010
Assets
Current Assets
Cash $ 6,801 $ 4,705
Accounts Receivable, Net 105,830 98,799
Inventories 95,217 96,404
Other   10,604   13,939
Total Current Assets 218,452 213,847
Other Assets 69,371 66,733
Property, Plant, & Equipment, Net   140,934   151,815
Total Assets $ 428,757 $ 432,395
 
Liabilities & Shareholders' Equity
Current Liabilities
Accounts Payable $ 64,717 $ 64,143
Accrued Expenses   45,939   42,188
Total Current Liabilities 110,656 106,331
Long-Term Debt, less current portion 73,725 83,530
Deferred Income Taxes 23,893 24,793
Other Liabilities 14,343 5,936
Shareholders' Equity   206,140   211,805
Total Liabilities & Shareholders' Equity $ 428,757 $ 432,395
 
   
MYERS INDUSTRIES, INC.
CONDENSED STATEMENTS OF CONSOLIDATED CASH FLOWS (UNAUDITED)
($ in thousands)
 

Twelve Months Ended December 31,
2011

2010
Cash Flows From Operating Activities
Net Income (Loss) $ 24,505 $ (42,834 )
 
Items not affecting use of cash:
Depreciation 31,245 30,628
Impairment charges and asset write-offs 1,249 72,014
Amortization of other intangible assets 2,969 2,922
Non-cash stock compensation 2,595 2,326
Provision for loss on accounts receivable 915 (1,455 )
Deferred taxes (184 ) (13,285 )
Other long-term liabilities 4,251 151
Gain on sale of property, plant and equipment (875 ) (733 )
Other 50 -0-
Cash flow provided by (used for) working capital:
Accounts Receivable (8,665 ) (9,994 )
Inventories 455 4,958
Prepaid Expenses 2,662 548
Accounts payable and accrued expenses   3,000     392  
Net cash provided by operating activities   64,172     45,638  
 
Cash Flows From Investing Activities
Capital expenditures (21,930 ) (20,533 )
Acquisition of business, net of cash acquired (1,100 ) (411 )
Proceeds from sale of property, plant and equipment 1,089 5,213
Other   (96 )   358  
Net cash used for investing activities (22,037 ) (15,373 )
 
Cash Flows From Financing Activities
Repayment of long-term debt (305 ) (65,380 )
Net (repayment) borrowing on credit facility (9,383 ) 44,900
Cash dividends paid (9,523 ) (9,209 )
Proceeds from issuance of common stock 751 138
Repurchase of common stock (20,946 ) -0-
Deferred financing costs paid   -0-     (1,169 )
Net cash used for financing activities   (39,406 )   (30,720 )
 
Foreign Exchange Rate Effect on Cash   (633 )   432  
 
Net increase (decrease) in cash 2,096 (23 )
Cash at January 1   4,705     4,728  
Cash at December 31 $ 6,801   $ 4,705  

Copyright Business Wire 2010

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