Myers Industries Reports 2018 Second Quarter Results
AKRON, Ohio--(BUSINESS WIRE)--Jul 30, 2018--Myers Industries, Inc. (NYSE: MYE) today announced results for the second quarter ended June 30, 2018.
Second Quarter 2018 Business HighlightsGAAP net income per diluted share from continuing operations of $0.26, compared to $0.08 in the second quarter of 2017 Adjusted net income per diluted share from continuing operations of $0.27, compared to $0.18 in the second quarter of 2017 Net sales increased 3.9% (or 3.6% excluding currency fluctuation) compared to the second quarter of 2017 Gross profit margin of 34.1% compared to 28.3% in the second quarter of 2017 Generated cash from continuing operations of $14.4 million and free cash flow of $13.3 million Raised net proceeds of $79.5M through sale of common stock, improving financial flexibility to make strategic investments Company re-affirms its 2018 outlook
The Company reported net sales of $140.6 million, compared to $135.3 million in the second quarter of 2017, with the increase primarily driven by increased sales in the Company’s consumer, vehicle, and food and beverage end markets. Gross profit margin increased 580 basis points to 34.1% as compared to the prior year, primarily due to pricing actions and savings from last year’s manufacturing footprint realignment and restructuring initiatives. Selling, general and administrative expenses increased $2.4 million year-over-year to $34.5 million, with the increase in expenses primarily attributable to higher incentive compensation costs.
President and Chief Executive Officer Dave Banyard commented, “We are pleased with the continued improvement in our business during the second quarter, which demonstrated another consecutive quarter of year-over-year growth in both sales and earnings. Our focus on niche market strategies drove double-digit sales growth across three of our key end markets, including consumer, vehicle, and food and beverage. Continued strength of demand, combined with the impacts of recent pricing and operational improvement initiatives, resulted in strong gross margin expansion, operating income growth, and free cash flow generation during the quarter.”
Banyard continued, “As we look to the second half of 2018, we expect year-over-year sales growth to temper somewhat as a result of the non-recurrence of certain prior-year order activity. However, continued strong operating and cash flow performance should enable us to capitalize on both organic and acquisitive growth opportunities, especially considering our improved leverage profile following the secondary equity offering and reduction of debt during the second quarter.”
Net sales in the Material Handling Segment increased 7.4% (or 6.9% excluding currency fluctuation) compared to the second quarter of 2017. The increase in net sales was primarily due to increased volume in the Company’s consumer, vehicle, and food and beverage end markets. The segment’s adjusted EBITDA margin was 22.7% compared to 19.7% in the second 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.
Net sales in the Distribution Segment declined 4.5% compared to the second quarter of 2017. The segment’s adjusted EBITDA margin was 8.2% compared to 8.3% in the second quarter of 2017. The impact of the lower sales volume year-over-year was mostly offset by operational efficiencies and the benefit of the change in pricing structure completed last year.
For fiscal year 2018, the Company continues to anticipate that total revenue will be up low-to-mid-single digits on a constant currency basis compared to the prior year based on strong backlog, tempered by the non-recurrence of some large, one-time orders delivered in the second half of 2017. The Company expects capital expenditures to be in the range of $10 to $12 million. Net interest expense is now forecasted to be between $4 and $6 million (vs. between $7 and $8 million previously) as a result of the reduction in debt due to the secondary equity offering completed during the second quarter of 2018. Depreciation and amortization are forecasted to be between $26 and $28 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% previously.
Conference Call Details
The Company will host an earnings conference call and webcast for investors and analysts on Monday, July 30, at 10:00 a.m. EDT. The call is anticipated to last approximately one hour and may be accessed by dialing: (US) 866-393-4306 or (Int’l) 734-385-2616. The Conference ID # is 3058689. 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) 855-859-2056 or (Int’l) 404-537-3406. The Conference ID # is 3058689.
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 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: 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; unexpected failures at our manufacturing 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.
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