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Myers Industries Announces Third Quarter 2023 Results

Further Implementation of Myers Business System Supports Gross Margin Expansion

Improving Balance Sheet Strength with Additional Debt Reduction

Myers Industries, Inc. (NYSE: MYE), a leading manufacturer of a wide range of polymer and metal products and distributor for the tire, wheel, and under-vehicle service industry, today announced results for the third quarter ended September 30, 2023.

Third Quarter 2023 Financial Highlights

  • Net sales of $197.8 million compared to $228.1 million in the prior year period
  • Gross margin of 31.5%, up 10 basis points versus the prior year period
  • GAAP net income per diluted share of $0.34 compared to $0.37 in the prior year period
  • Adjusted earnings per diluted share of $0.38 compared to $0.41 in the prior year period
  • Cash flow provided by operations was $22.1 million and free cash flow was $18.1 million

Myers Industries’ President and CEO Mike McGaugh said "In the third quarter, we continue to see the real value of the Myers Business System in driving strong business results, in-spite of continued significant revenue headwinds in several of our key markets. We are managing our business well, as we expanded year-over-year adjusted gross margin for the seventh consecutive quarter while also expanding adjusted EBITDA margin and generating healthy cash flows. These results are strong indications that our Myers Business System and our other self-help initiatives continue to deliver solid results. During the period we saw weakness within our consumer-facing verticals and a less active hurricane season year over year, both of which adversely affected our Material Handling segment. Our Distribution segment posted improved profitability and remains well positioned to capitalize on anticipated longer-term market tailwinds in the tire repair industry. We are keenly focused on protecting profitability by improving our cost structures across both segments as we continue to make investments for the future. We are optimizing our plants in aligning capacity to consistently match production levels, controlling costs, and driving new commercial excellence programs. Through these dedicated efforts, we lessened the total impact of current headwinds, allowing for the Company to continue progressing against its long-term strategic and financial objectives."

McGaugh continued “During the quarter, we generated elevated levels of free cash flow, which allowed us to further strengthen our balance sheet and pay down debt. We will continue to evaluate a number of opportunities within our M&A pipeline and will opportunistically deploy capital towards attractive growth opportunities when they make strategic sense. We look forward to driving future shareholder value through strong execution against our long-term growth strategy and by maintaining strong profitability through all economic conditions.”

Third Quarter 2023 Financial Summary

 

 

Quarter Ended September 30,

(Dollars in thousands, except per share data)

 

2023

 

2022

 

% Inc

(Dec)

Net sales

 

$197,798

 

$228,065

 

(13.3)%

Gross profit

 

$62,379

 

$71,648

 

(12.9)%

Gross margin

 

31.5%

 

31.4%

 

 

Operating income

 

$18,703

 

$19,897

 

(6.0)%

Net income

 

$12,747

 

$13,671

 

(6.8)%

Net income per diluted share

 

$0.34

 

$0.37

 

(8.1)%

 

 

 

 

 

 

 

Adjusted operating income

 

$20,039

 

$22,013

 

(9.0)%

Adjusted net income

 

$13,875

 

$15,018

 

(7.6)%

Adjusted earnings per diluted share

 

$0.38

 

$0.41

 

(7.3)%

Adjusted EBITDA

 

$25,648

 

$27,172

 

(5.6)%

Net sales were $197.8 million, a decrease of $30.3 million, or 13.3%, compared with $228.1 million for the third quarter of 2022. The decrease was the result of lower volume/mix and lower pricing in certain targeted areas in the Material Handling segment.

Gross profit decreased $9.3 million, or 12.9% to $62.4 million, as the contribution from lower raw material costs was not enough to offset lower volumes and pricing. Gross margin expanded 10 basis points to 31.5% compared with 31.4% for the third quarter of 2022. Selling, general and administrative expenses decreased $8.1 million, or 15.6% to $43.7 million due to lower incentive compensation and facility costs. SG&A as a percentage of sales decreased to 22.1%, compared with 22.7% in the same period last year. Net income per diluted share was $0.34, compared with $0.37 for the third quarter of 2022. Adjusted earnings per diluted share were $0.38, compared with $0.41 for the third quarter of 2022.

Third Quarter 2023 Segment Results

(Dollar amounts in the segment tables below are reported in millions)

Material Handling

 

Net Sales

 

Op Income

 

Op Income

Margin

 

Adj

EBITDA

 

Adj EBITDA

Margin

Q3 2023 Results

$132.5

 

$20.0

 

15.1%

 

$25.1

 

19.0%

Q3 2022 Results

$155.7

 

$24.0

 

15.4%

 

$28.4

 

18.3%

$ Increase (decrease) vs prior year

($23.2)

 

($4.0)

 

 

 

($3.3)

 

 

% Increase (decrease) vs prior year

(14.9)%

 

(16.6)%

 

-30 bps

 

(11.6)%

 

+70 bps

Items in this table may not recalculate due to rounding

Net sales for the Material Handling segment were $132.5 million, a decrease of $23.2 million, or 14.9%, compared with $155.7 million for the third quarter of 2022. Net sales decreased in the vehicle, industrial, food & beverage and consumer end markets, with the greatest reduction in demand for RV products, construction products, and fuel container products, due in part to a slower hurricane season. Operating income decreased 16.6% to $20.0 million, compared with $24.0 million in the third quarter of 2022. Operating income margin decreased to 15.1% compared with 15.4% for the third quarter of 2022. Adjusted EBITDA margin improved by 70 basis points, primarily attributed to self-help initiatives, but partially dampened by a decrease in sales volume. Adjusted EBITDA decreased 11.6% to $25.1 million, compared with $28.4 million in the third quarter of 2022. Lower sales volume, pricing and an unfavorable mix more than offset lower raw material costs. SG&A expenses were lower year-over-year, primarily due to a decrease in facility costs and lower incentive compensation.

Distribution

 

Net Sales

 

Op Income

 

Op Income

Margin

 

Adj

EBITDA

 

Adj EBITDA

Margin

Q3 2023 Results

$65.3

 

$5.0

 

7.6%

 

$6.6

 

10.1%

Q3 2022 Results

$72.4

 

$4.9

 

6.8%

 

$6.0

 

8.3%

$ Increase (decrease) vs prior year

($7.1)

 

$0.1

 

 

 

$0.6

 

 

% Increase (decrease) vs prior year

(9.8)%

 

1.9%

 

+80 bps

 

9.4%

 

+180 bps

Items in this table may not recalculate due to rounding

Net sales for the Distribution segment were $65.3 million, a decrease of $7.1 million, or 9.8%, compared with $72.4 million for the third quarter of 2022. Operating income increased $0.1 million to $5.0 million, compared with $4.9 million for the third quarter of 2022. Adjusted EBITDA increased 9.4% to $6.6 million, compared with $6.0 million in the third quarter of 2022. The increase in operating income and adjusted EBITDA was primarily due to an increase in prices and lower product costs. The decrease in SG&A expenses was primarily the result of lower incentive compensation. The Distribution segment's operating income margin was 7.6% compared with 6.8% for the third quarter of 2022. The Distribution segment’s adjusted EBITDA margin was 10.1%, compared with 8.3% for the third quarter of 2022. The Distribution Segment continues to implement pricing actions to counter cost inflation and improve margin.

Balance Sheet & Cash Flow

As of September 30, 2023, the Company’s cash on hand totaled $24.8 million. Total debt as of September 30, 2023 was $69.3 million.

For the third quarter of 2023, cash flow provided by operations was $22.1 million and free cash flow was $18.1 million, compared with cash flow provided by operations of $16.5 million and free cash flow of $9.8 million for the third quarter of 2022. The increase in cash flow was driven primarily by a decrease in working capital. Capital expenditures for the third quarter of 2023 were $4.1 million, compared with $6.7 million for the third quarter of 2022.

2023 Outlook

Based on current exchange rates, market outlook, and business forecast, the Company revised its outlook for fiscal 2023, and currently forecasts:

  • Net sales decline in the mid to high single digit range
  • Net income per diluted share in the range of $1.20 to $1.28
  • Lowered adjusted earnings per diluted share range of $1.35 to $1.40
  • Capital expenditures to be in the range of $25 to $30 million
  • Effective tax rate to approximate 25%

Conference Call Details

The Company will host an earnings conference call and webcast for investors and analysts on Wednesday, November 1, 2023, at 8:30 a.m. EDT. The call is anticipated to last less than one hour and may be accessed using the following online participation registration link: https://www.netroadshow.com/events/login?show=3cf4c0ee&confId=53778 . Upon registering, each participant will be provided with call details and a registrant ID. Reminders will also be sent to registered participants via email. Alternatively, the conference call will be available via a live webcast. To access the live webcast or a replay, visit the Company's website www.myersindustries.com and click on the Investor Relations tab. 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 Local) 1-929-458-6194 or (US Toll-Free) 1-866-813-9403.

Use of Non-GAAP Financial Measures

The Company uses certain non-GAAP measures in this release. Adjusted operating income (loss), adjusted operating income margin, adjusted earnings before interest, taxes, depreciation and amortization (EBITDA), adjusted EBITDA margin, adjusted net income, adjusted earnings per diluted share (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 a manufacturer of sustainable plastic and metal 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 contains “forward-looking statements” within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995, including information regarding the Company’s financial outlook, future plans, objectives, business prospects and anticipated financial performance. Forward-looking statements can be identified by words such as “will,” “believe,” “anticipate,” “expect,” “estimate,” “intend,” “plan,” or variations of these words, or similar expressions. These forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based only on the Company’s current beliefs, expectations and assumptions regarding the future of our business, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions. Because forward-looking statements relate to the future, these statements inherently involve a wide range of inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of our control. The Company’s actual actions, results, and financial condition may differ materially from what is expressed or implied by the forward-looking statements.

Specific factors that could cause such a difference on our business, financial position, results of operations and/or liquidity include, without limitation, 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; impacts from the novel coronavirus (“COVID-19”) pandemic; and other risks and uncertainties detailed from time to time in the Company’s filings with the SEC, including without limitation, the risk factors disclosed in Item 1A, “Risk Factors,” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022. Given these factors, as well as other variables that may affect our operating results, readers should not rely on forward-looking statements, assume that past financial performance will be a reliable indicator of future performance, nor use historical trends to anticipate results or trends in future periods. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date thereof. The Company expressly disclaims any obligation or intention to provide updates to the forward-looking statements and the estimates and assumptions associated with them.

M-INV

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,

2023

 

 

September 30,

2022

 

 

September 30,

2023

 

 

September 30,

2022

 

Net sales

 

$

197,798

 

 

$

228,065

 

 

$

621,990

 

 

$

686,707

 

Cost of sales

 

 

135,419

 

 

 

156,417

 

 

 

420,136

 

 

 

468,415

 

Gross profit

 

 

62,379

 

 

 

71,648

 

 

 

201,854

 

 

 

218,292

 

Selling, general and administrative expenses

 

 

43,698

 

 

 

51,756

 

 

 

148,130

 

 

 

152,066

 

(Gain) loss on disposal of fixed assets

 

 

(22

)

 

 

(5

)

 

 

(78

)

 

 

(693

)

Operating income (loss)

 

 

18,703

 

 

 

19,897

 

 

 

53,802

 

 

 

66,919

 

Interest expense, net

 

 

1,539

 

 

 

1,719

 

 

 

4,975

 

 

 

4,077

 

Income (loss) before income taxes

 

 

17,164

 

 

 

18,178

 

 

 

48,827

 

 

 

62,842

 

Income tax expense (benefit)

 

 

4,417

 

 

 

4,507

 

 

 

12,499

 

 

 

16,003

 

Net income (loss)

 

$

12,747

 

 

$

13,671

 

 

$

36,328

 

 

$

46,839

 

Net income (loss) per common share:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.35

 

 

$

0.37

 

 

$

0.99

 

 

$

1.29

 

Diluted

 

$

0.34

 

 

$

0.37

 

 

$

0.98

 

 

$

1.28

 

Weighted average common shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

36,811,296

 

 

 

36,472,378

 

 

 

36,712,662

 

 

 

36,383,398

 

Diluted

 

 

36,979,880

 

 

 

36,717,153

 

 

 

36,972,384

 

 

 

36,678,955

 

MYERS INDUSTRIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (UNAUDITED)

(Dollars in thousands)

 

 

 

September 30, 2023

 

 

December 31, 2022

 

Assets

 

 

 

 

 

 

Current Assets

 

 

 

 

 

 

Cash

 

$

24,768

 

 

$

23,139

 

Accounts receivable, net

 

 

117,362

 

 

 

133,716

 

Inventories, net

 

 

96,230

 

 

 

93,351

 

Other current assets

 

 

9,051

 

 

 

7,001

 

Total Current Assets

 

 

247,411

 

 

 

257,207

 

Property, plant, & equipment, net

 

 

106,936

 

 

 

101,566

 

Right of use asset - operating leases

 

 

27,384

 

 

 

28,908

 

Deferred income taxes

 

 

129

 

 

 

129

 

Other assets

 

 

149,261

 

 

 

154,824

 

Total Assets

 

$

531,121

 

 

$

542,634

 

Liabilities & Shareholders' Equity

 

 

 

 

 

 

Current Liabilities

 

 

 

 

 

 

Accounts payable

 

$

80,760

 

 

$

73,536

 

Accrued expenses

 

 

50,940

 

 

 

57,531

 

Operating lease liability - short-term

 

 

5,604

 

 

 

6,177

 

Finance lease liability - short-term

 

 

581

 

 

 

518

 

Long-term debt - current portion

 

 

25,994

 

 

 

 

Total Current Liabilities

 

 

163,879

 

 

 

137,762

 

Long-term debt

 

 

33,987

 

 

 

93,962

 

Operating lease liability - long-term

 

 

22,023

 

 

 

22,786

 

Finance lease liability - long-term

 

 

8,766

 

 

 

8,919

 

Other liabilities

 

 

10,284

 

 

 

15,270

 

Deferred income taxes

 

 

9,961

 

 

 

7,508

 

Total Shareholders' Equity

 

 

282,221

 

 

 

256,427

 

Total Liabilities & Shareholders' Equity

 

$

531,121

 

 

$

542,634

 

MYERS INDUSTRIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

(Dollars in thousands)

 

 

 

Quarter Ended September 30,

 

 

Nine Months Ended September 30,

 

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Cash Flows From Operating Activities

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

12,747

 

 

$

13,671

 

 

$

36,328

 

 

$

46,839

 

Adjustments to reconcile net income to net cash

provided by (used for) operating activities

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

5,609

 

 

 

5,159

 

 

 

16,904

 

 

 

15,600

 

Amortization of deferred financing costs

 

 

78

 

 

 

121

 

 

 

234

 

 

 

363

 

Non-cash stock-based compensation expense

 

 

686

 

 

 

1,308

 

 

 

5,078

 

 

 

5,168

 

(Gain) loss on disposal of fixed assets

 

 

(22

)

 

 

(5

)

 

 

(78

)

 

 

(693

)

Other

 

 

(19

)

 

 

(406

)

 

 

2,473

 

 

 

292

 

Cash flows provided by (used for) working capital

 

 

 

 

 

 

 

 

 

 

 

 

Accounts receivable

 

 

(1,332

)

 

 

2,449

 

 

 

13,764

 

 

 

(18,751

)

Inventories

 

 

1,825

 

 

 

243

 

 

 

(2,905

)

 

 

(7,016

)

Prepaid expenses and other current assets

 

 

1,775

 

 

 

790

 

 

 

(2,053

)

 

 

(4,912

)

Accounts payable and accrued expenses

 

 

787

 

 

 

(6,870

)

 

 

1,027

 

 

 

13,869

 

Net cash provided by (used for) operating activities

 

 

22,134

 

 

 

16,460

 

 

 

70,772

 

 

 

50,759

 

Cash Flows From Investing Activities

 

 

 

 

 

 

 

 

 

 

 

 

Capital expenditures

 

 

(4,076

)

 

 

(6,672

)

 

 

(19,292

)

 

 

(17,615

)

Acquisition of business, net of cash acquired

 

 

 

 

 

 

 

 

(160

)

 

 

(24,253

)

Proceeds from sale of property, plant, and equipment

 

 

 

 

 

26

 

 

 

142

 

 

 

1,525

 

Net cash provided by (used for) investing activities

 

 

(4,076

)

 

 

(6,646

)

 

 

(19,310

)

 

 

(40,343

)

Cash Flows From Financing Activities

 

 

 

 

 

 

 

 

 

 

 

 

Net borrowings (repayments) from revolving credit facility

 

 

(19,000

)

 

 

(6,000

)

 

 

(34,000

)

 

 

7,000

 

Payments on finance lease

 

 

(145

)

 

 

(125

)

 

 

(403

)

 

 

(374

)

Cash dividends paid

 

 

(4,970

)

 

 

(4,938

)

 

 

(15,266

)

 

 

(14,872

)

Proceeds from issuance of common stock

 

 

379

 

 

 

221

 

 

 

1,948

 

 

 

2,059

 

Shares withheld for employee taxes on equity awards

 

 

(22

)

 

 

(103

)

 

 

(2,055

)

 

 

(450

)

Deferred financing fees

 

 

 

 

 

(718

)

 

 

 

 

 

(718

)

Net cash provided by (used for) financing activities

 

 

(23,758

)

 

 

(11,663

)

 

 

(49,776

)

 

 

(7,355

)

Foreign exchange rate effect on cash

 

 

(224

)

 

 

(161

)

 

 

(57

)

 

 

(292

)

Net increase (decrease) in cash

 

 

(5,924

)

 

 

(2,010

)

 

 

1,629

 

 

 

2,769

 

Beginning Cash

 

 

30,692

 

 

 

22,434

 

 

 

23,139

 

 

 

17,655

 

Ending Cash

 

$

24,768

 

 

$

20,424

 

 

$

24,768

 

 

$

20,424

 

MYERS INDUSTRIES, INC.

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

GROSS PROFIT, OPERATING INCOME AND EBITDA (UNAUDITED)

(Dollars in thousands)

 

 

 

Quarter Ended September 30, 2023

 

 

 

Material

Handling

 

 

Distribution

 

 

Segment

Total

 

 

Corporate &

Other

 

 

Total

 

Net sales

 

$

132,484

 

 

$

65,335

 

 

$

197,819

 

 

$

(21

)

 

$

197,798

 

Net income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

12,747

 

Net income margin

 

 

 

 

 

 

 

 

 

 

 

 

 

 

6.4

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross profit

 

 

 

 

 

 

 

 

 

 

 

 

 

 

62,379

 

Add: Restructuring expenses and other adjustments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

307

 

Adjusted gross profit

 

 

 

 

 

 

 

 

 

 

 

 

 

 

62,686

 

Gross margin as adjusted

 

 

 

 

 

 

 

 

 

 

 

 

 

 

31.7

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income (loss)

 

 

19,978

 

 

 

4,993

 

 

 

24,971

 

 

 

(6,268

)

 

 

18,703

 

Operating income margin

 

 

15.1

%

 

 

7.6

%

 

 

12.6

%

 

n/a

 

 

 

9.5

%

Add: Restructuring expenses and other adjustments

 

 

529

 

 

 

674

 

 

 

1,203

 

 

 

156

 

 

 

1,359

 

Add: Acquisition and integration costs

 

 

 

 

 

77

 

 

 

77

 

 

 

 

 

 

77

 

Less: Environmental reserves, net(2)

 

 

 

 

 

 

 

 

 

 

 

(100

)

 

 

(100

)

Adjusted operating income (loss)(1)

 

 

20,507

 

 

 

5,744

 

 

 

26,251

 

 

 

(6,212

)

 

 

20,039

 

Adjusted operating income margin

 

 

15.5

%

 

 

8.8

%

 

 

13.3

%

 

n/a

 

 

 

10.1

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Add: Depreciation and amortization

 

 

4,641

 

 

 

842

 

 

 

5,483

 

 

 

126

 

 

 

5,609

 

Adjusted EBITDA

 

$

25,148

 

 

$

6,586

 

 

$

31,734

 

 

$

(6,086

)

 

$

25,648

 

Adjusted EBITDA margin

 

 

19.0

%

 

 

10.1

%

 

 

16.0

%

 

n/a

 

 

 

13.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) Includes gross profit adjustments of $307 and SG&A adjustments of $1,029

 

(2) Includes environmental charges of $300 net of probable insurance recoveries of $400

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Quarter Ended September 30, 2022

 

 

 

Material

Handling

 

 

Distribution

 

 

Segment

Total

 

 

Corporate &

Other

 

 

Total

 

Net sales

 

$

155,658

 

 

$

72,416

 

 

$

228,074

 

 

$

(9

)

 

$

228,065

 

Net income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

13,671

 

Net income margin

 

 

 

 

 

 

 

 

 

 

 

 

 

 

6.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross profit

 

 

 

 

 

 

 

 

 

 

 

 

 

 

71,648

 

Add: Restructuring expenses and other adjustments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

260

 

Adjusted gross profit

 

 

 

 

 

 

 

 

 

 

 

 

 

 

71,908

 

Gross margin as adjusted

 

 

 

 

 

 

 

 

 

 

 

 

 

 

31.5

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income (loss)

 

 

23,962

 

 

 

4,899

 

 

 

28,861

 

 

 

(8,964

)

 

 

19,897

 

Operating income margin

 

 

15.4

%

 

 

6.8

%

 

 

12.7

%

 

n/a

 

 

 

8.7

%

Add: Restructuring expenses and other adjustments

 

 

260

 

 

 

 

 

 

260

 

 

 

 

 

 

260

 

Add: Acquisition and integration costs

 

 

 

 

 

271

 

 

 

271

 

 

 

85

 

 

 

356

 

Add: Environmental reserves, net(2)

 

 

 

 

 

 

 

 

 

 

 

1,500

 

 

 

1,500

 

Adjusted operating income (loss)(1)

 

 

24,222

 

 

 

5,170

 

 

 

29,392

 

 

 

(7,379

)

 

 

22,013

 

Adjusted operating income margin

 

 

15.6

%

 

 

7.1

%

 

 

12.9

%

 

n/a

 

 

 

9.7

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Add: Depreciation and amortization

 

 

4,215

 

 

 

851

 

 

 

5,066

 

 

 

93

 

 

 

5,159

 

Adjusted EBITDA

 

$

28,437

 

 

$

6,021

 

 

$

34,458

 

 

$

(7,286

)

 

$

27,172

 

Adjusted EBITDA margin

 

 

18.3

%

 

 

8.3

%

 

 

15.1

%

 

n/a

 

 

 

11.9

%

 

 

(1) Includes gross profit adjustments of $260 and SG&A adjustments of $1,856

 

(2) Includes environmental charges of $1,500 net of probable insurance recoveries of $0

 

MYERS INDUSTRIES, INC.

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

GROSS PROFIT, OPERATING INCOME AND EBITDA (UNAUDITED)

(Dollars in thousands)

 

 

 

Nine Months Ended September 30, 2023

 

 

 

Material

Handling

 

 

Distribution

 

 

Segment

Total

 

 

Corporate &

Other

 

 

Total

 

Net sales

 

$

428,341

 

 

$

193,693

 

 

$

622,034

 

 

$

(44

)

 

$

621,990

 

Net income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

36,328

 

Net income margin

 

 

 

 

 

 

 

 

 

 

 

 

 

 

5.8

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross profit

 

 

 

 

 

 

 

 

 

 

 

 

 

 

201,854

 

Add: Restructuring expenses and other adjustments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

589

 

Adjusted gross profit

 

 

 

 

 

 

 

 

 

 

 

 

 

 

202,443

 

Gross margin as adjusted

 

 

 

 

 

 

 

 

 

 

 

 

 

 

32.5

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income (loss)

 

 

70,157

 

 

 

10,628

 

 

 

80,785

 

 

 

(26,983

)

 

 

53,802

 

Operating income margin

 

 

16.4

%

 

 

5.5

%

 

 

13.0

%

 

n/a

 

 

 

8.6

%

Add: Executive severance costs

 

 

 

 

 

410

 

 

 

410

 

 

 

289

 

 

 

699

 

Add: Restructuring expenses and other adjustments

 

 

1,225

 

 

 

853

 

 

 

2,078

 

 

 

166

 

 

 

2,244

 

Add: Acquisition and integration costs

 

 

 

 

 

297

 

 

 

297

 

 

 

126

 

 

 

423

 

Add: Environmental reserves, net(2)

 

 

 

 

 

 

 

 

 

 

 

2,200

 

 

 

2,200

 

Adjusted operating income (loss)(1)

 

 

71,382

 

 

 

12,188

 

 

 

83,570

 

 

 

(24,202

)

 

 

59,368

 

Adjusted operating income margin

 

 

16.7

%

 

 

6.3

%

 

 

13.4

%

 

n/a

 

 

 

9.5

%

Add: Depreciation and amortization

 

 

13,995

 

 

 

2,505

 

 

 

16,500

 

 

 

404

 

 

 

16,904

 

Adjusted EBITDA

 

$

85,377

 

 

$

14,693

 

 

$

100,070

 

 

$

(23,798

)

 

$

76,272

 

Adjusted EBITDA margin

 

 

19.9

%

 

 

7.6

%

 

 

16.1

%

 

n/a

 

 

 

12.3

%

 

 

(1) Includes gross profit adjustments of $589 and SG&A adjustments of $4,977

 

(2) Includes environmental charges of $3,800 net of probable insurance recoveries of $1,600

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nine Months Ended September 30, 2022

 

 

 

Material

Handling

 

 

Distribution

 

 

Segment

Total

 

 

Corporate &

Other

 

 

Total

 

Net sales

 

$

505,384

 

 

$

181,352

 

 

$

686,736

 

 

$

(29

)

 

$

686,707

 

Net income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

46,839

 

Net income margin

 

 

 

 

 

 

 

 

 

 

 

 

 

 

6.8

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross profit

 

 

 

 

 

 

 

 

 

 

 

 

 

 

218,292

 

Add: Restructuring expenses and other adjustments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

650

 

Adjusted gross profit

 

 

 

 

 

 

 

 

 

 

 

 

 

 

218,942

 

Gross margin as adjusted

 

 

 

 

 

 

 

 

 

 

 

 

 

 

31.9

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income (loss)

 

 

83,216

 

 

 

12,469

 

 

 

95,685

 

 

 

(28,766

)

 

 

66,919

 

Operating income margin

 

 

16.5

%

 

 

6.9

%

 

 

13.9

%

 

n/a

 

 

 

9.7

%

Add: Restructuring expenses and other adjustments

 

 

650

 

 

 

 

 

 

650

 

 

 

 

 

 

650

 

Add: Acquisition and integration costs

 

 

 

 

 

271

 

 

 

271

 

 

 

561

 

 

 

832

 

Add: Loss on sale of assets

 

 

261

 

 

 

 

 

 

261

 

 

 

 

 

 

261

 

Add: Environmental reserves, net(2)

 

 

 

 

 

 

 

 

 

 

 

2,800

 

 

 

2,800

 

Adjusted operating income (loss)(1)

 

 

84,127

 

 

 

12,740

 

 

 

96,867

 

 

 

(25,405

)

 

 

71,462

 

Adjusted operating income margin

 

 

16.6

%

 

 

7.0

%

 

 

14.1

%

 

n/a

 

 

 

10.4

%

Add: Depreciation and amortization

 

 

13,239

 

 

 

2,029

 

 

 

15,268

 

 

 

332

 

 

 

15,600

 

Adjusted EBITDA

 

$

97,366

 

 

$

14,769

 

 

$

112,135

 

 

$

(25,073

)

 

$

87,062

 

Adjusted EBITDA margin

 

 

19.3

%

 

 

8.1

%

 

 

16.3

%

 

n/a

 

 

 

12.7

%

 

 

(1) Includes gross profit adjustments of $650 and SG&A adjustments of $3,893

 

(2) Includes environmental charges of $2,800 net of probable insurance recoveries of $0

 

MYERS INDUSTRIES, INC.

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

ADJUSTED OPERATING INCOME, ADJUSTED EBITDA AND FREE CASH FLOW (UNAUDITED)

(Dollars in thousands, except per share data)

 

 

 

Quarter Ended September 30,

 

 

Nine Months Ended September 30,

 

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Adjusted operating income (loss) reconciliation:

 

 

 

 

 

 

 

 

 

 

 

 

Operating income (loss)

 

$

18,703

 

 

$

19,897

 

 

$

53,802

 

 

$

66,919

 

Executive severance costs

 

 

 

 

 

 

 

 

699

 

 

 

 

Restructuring expenses and other adjustments

 

 

1,359

 

 

 

260

 

 

 

2,244

 

 

 

650

 

Acquisition and integration costs

 

 

77

 

 

 

356

 

 

 

423

 

 

 

832

 

Loss on sale of assets

 

 

 

 

 

 

 

 

 

 

 

261

 

Environmental reserves, net

 

 

(100

)

 

 

1,500

 

 

 

2,200

 

 

 

2,800

 

Adjusted operating income (loss)

 

$

20,039

 

 

$

22,013

 

 

$

59,368

 

 

$

71,462

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA reconciliation:

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss)

 

$

12,747

 

 

$

13,671

 

 

$

36,328

 

 

$

46,839

 

Income tax expense (benefit)

 

 

4,417

 

 

 

4,507

 

 

 

12,499

 

 

 

16,003

 

Interest expense, net

 

 

1,539

 

 

 

1,719

 

 

 

4,975

 

 

 

4,077

 

Operating income (loss)

 

 

18,703

 

 

 

19,897

 

 

 

53,802

 

 

 

66,919

 

Depreciation and amortization

 

 

5,609

 

 

 

5,159

 

 

 

16,904

 

 

 

15,600

 

Executive severance costs

 

 

 

 

 

 

 

 

699

 

 

 

 

Restructuring expenses and other adjustments

 

 

1,359

 

 

 

260

 

 

 

2,244

 

 

 

650

 

Acquisition and integration costs

 

 

77

 

 

 

356

 

 

 

423

 

 

 

832

 

Loss on sale of assets

 

 

 

 

 

 

 

 

 

 

 

261

 

Environmental reserves, net

 

 

(100

)

 

 

1,500

 

 

 

2,200

 

 

 

2,800

 

Adjusted EBITDA

 

$

25,648

 

 

$

27,172

 

 

$

76,272

 

 

$

87,062

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Free cash flow reconciliation:

 

 

 

 

 

 

 

 

 

 

 

 

Net cash provided by (used for) operating activities

 

$

22,134

 

 

$

16,460

 

 

$

70,772

 

 

$

50,759

 

Capital expenditures

 

 

(4,076

)

 

 

(6,672

)

 

 

(19,292

)

 

 

(17,615

)

Free cash flow

 

$

18,058

 

 

$

9,788

 

 

$

51,480

 

 

$

33,144

 

MYERS INDUSTRIES, INC.

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

ADJUSTED NET INCOME AND ADJUSTED EARNINGS PER DILUTED SHARE (UNAUDITED)

(Dollars in thousands, except per share data)

 

 

 

Quarter Ended September 30,

 

 

Nine Months Ended September 30,

 

 

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

 

Adjusted net income (loss) reconciliation:

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss)

 

$

12,747

 

 

$

13,671

 

 

$

36,328

 

 

$

46,839

 

 

Income tax expense (benefit)

 

 

4,417

 

 

 

4,507

 

 

 

12,499

 

 

 

16,003

 

 

Income (loss) before income taxes

 

 

17,164

 

 

 

18,178

 

 

 

48,827

 

 

 

62,842

 

 

Executive severance costs

 

 

 

 

 

 

 

 

699

 

 

 

 

 

Restructuring expenses and other adjustments

 

 

1,359

 

 

 

260

 

 

 

2,244

 

 

 

650

 

 

Acquisition and integration costs

 

 

77

 

 

 

356

 

 

 

423

 

 

 

832

 

 

Loss on sale of assets

 

 

 

 

 

 

 

 

 

 

 

261

 

 

Environmental reserves, net

 

 

(100

)

 

 

1,500

 

 

 

2,200

 

 

 

2,800

 

 

Adjusted income (loss) before income taxes

 

 

18,500

 

 

 

20,294

 

 

 

54,393

 

 

 

67,385

 

 

Income tax expense, as adjusted (1)

 

 

(4,625

)

 

 

(5,276

)

 

 

(13,598

)

 

 

(17,520

)

 

Adjusted net income (loss)

 

$

13,875

 

 

$

15,018

 

 

$

40,795

 

 

$

49,865

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted earnings per diluted share reconciliation:

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss) per common diluted share

 

$

0.34

 

 

$

0.37

 

 

$

0.98

 

 

$

1.28

 

 

Executive severance costs

 

 

 

 

 

 

 

 

0.02

 

 

 

 

 

Restructuring expenses and other adjustments

 

 

0.04

 

 

 

0.01

 

 

 

0.06

 

 

 

0.02

 

 

Acquisition and integration costs

 

 

0.00

 

 

 

0.01

 

 

 

0.01

 

 

 

0.02

 

 

Loss on sale of assets

 

 

 

 

 

 

 

 

 

 

 

0.01

 

 

Environmental reserves, net

 

 

(0.00

)

 

 

0.04

 

 

 

0.06

 

 

 

0.08

 

 

Adjusted effective income tax rate impact

 

 

(0.01

)

 

 

(0.02

)

 

 

(0.03

)

 

 

(0.04

)

 

Adjusted earnings per diluted share(2)

 

$

0.38

 

 

$

0.41

 

 

$

1.10

 

 

$

1.36

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Items in this table may not recalculate due to rounding

 

 

(1) Income taxes are calculated using the normalized effective tax rate for each year. The rate used in 2023 is 25% and in 2022 is 26%.

(2) Adjusted earnings per diluted share is calculated using the weighted average common shares outstanding for the respective period.

MYERS INDUSTRIES, INC.

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

GUIDANCE FOR FULL YEAR ADJUSTED EARNINGS PER DILUTED SHARE

(UNAUDITED)

 

 

Full Year 2023 Guidance

 

 

Low

 

 

High

 

GAAP diluted net income per common share

$

1.20

 

 

$

1.28

 

Add: Executive severance costs

 

0.02

 

 

 

0.02

 

Add: Net restructuring expenses and other adjustments

 

0.11

 

 

 

0.07

 

Add: Acquisition and integration costs

 

0.01

 

 

 

0.01

 

Add: Environmental reserves, net

 

0.06

 

 

 

0.06

 

Less: Adjusted effective income tax rate impact (1)

 

(0.05

)

 

 

(0.04

)

Adjusted earnings per diluted share (2)

$

1.35

 

 

$

1.40

 

 

 

 

 

 

 

(1) Income taxes are calculated using the normalized effective tax rate for each year. The rate used in 2023 is 25%.

 

(2) Adjusted earnings per diluted share is calculated using the weighted average common shares outstanding.

 

 

Contacts

Rich Pasela, Manager, Investor Relations and Treasury, 330-761-6284

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