Myers Industries Reports 2021 Third Quarter Results

11.04.21

Sales Increased 51% Including Acquisitions, 20% on an Organic Basis

Myers Industries, Inc. (NYSE: MYE), a leading manufacturer of a wide range of polymer products and distributor for the tire, wheel, and under-vehicle service industry, today announced results for the third quarter ended September 30, 2021.

Third Quarter 2021 Financial Highlights

  • Net sales increased $67.8 million, or 51.3% to $200.1 million, including $40.8 million, or 30.9% from the Elkhart and Trilogy acquisitions, compared with $132.3 million for the third quarter of 2020
  • Net income per diluted share was $0.22, compared with $0.24 for the third quarter of 2020
  • Adjusted earnings per diluted share was $0.23, compared with $0.30 for the third quarter of 2020

Myers Industries’ President and CEO, Mike McGaugh said, “Demand across all of our core end markets remains strong and our team continues to execute at a high level, which helped us deliver double-digit top-line growth this quarter. While our revenue performance and competitive position continue to build momentum, we were not immune to the continued inflationary headwinds that are affecting the cost structures of many businesses across the globe. This resulted in margin compression in parts of our business due to increased raw material, labor, and supply chain costs. We are actively working to mitigate these challenges and will continue to adjust price as necessary and prioritize operating excellence initiatives in order to offset their impacts in the coming quarters. Additionally, to support robust sales trends and a growing pipeline, we chose to invest more heavily this period to ensure we maintain high service levels. When coupled with strong sales later in the quarter, higher raw material costs, and the timing of certain cash payments, these investments negatively impacted cash flow. We are confident in our ability to generate positive cash flow on an annual basis and expect to do so again this year.”

McGaugh added, “We are confident in the continued success of our ‘One Myers’ strategy and are pleased with the progress we have made. Since the launch of the strategy one year ago, we have executed and integrated the strategic acquisitions of both Elkhart and Trilogy, which bolstered the already leading rotational molding position of our Material Handling Segment. These strategic actions, combined with our focused expansion efforts across all of our businesses, generated double-digit sales growth in each of the last four quarters. We have also made considerable improvements to our supply chain capabilities and overall operating efficiency, all while continuing to cultivate a high-performance culture.”

McGaugh concluded, “Our ‘One Myers’ strategy positions us well for continued momentum in 2022. The operating discipline we’re developing as we navigate this challenging cost environment should put us in a strong position to drive long-term profitable growth. I look forward to continued momentum as we close out the year and believe our journey has just begun.”

Third Quarter 2021 Financial Summary

 

 

Quarter Ended September 30,

 

 

 

2021

 

2020

 

Inc (Dec)

 

 

 

(Dollars in millions, except per share data)

 

 

 

 

 

 

 

 

 

Net sales

 

$200.1

 

$132.3

 

51.3%

 

 

 

 

 

 

 

 

 

Operating income

 

$11.8

 

$13.1

 

(10.1)%

 

Adjusted operating income

 

$12.5

 

$15.6

 

(19.5)%

 

Adjusted operating income margin

 

6.3%

 

11.8%

 

-550 bps

 

 

 

 

 

 

 

 

 

Net income

 

$7.9

 

$8.7

 

(9.0)%

 

Adjusted net income

 

$8.5

 

$10.6

 

(20.1)%

 

 

 

 

 

 

 

 

 

Net income per diluted share

 

$0.22

 

$0.24

 

(8.3)%

 

Adjusted earnings per diluted share

 

$0.23

 

$0.30

 

(23.3)%

 

Net sales for the third quarter of 2021 were $200.1 million, an increase of $67.8 million, or 51.3%, compared with $132.3 million for the third quarter of 2020, driven by increases in both the Material Handling and Distribution segments. Excluding the incremental $40.8 million of net sales from the Elkhart and Trilogy acquisitions, organic net sales increased 20%, 7% due to higher volume/mix and 13% due to favorable price.

Gross profit increased $7.1 million, or 15.2% to $54.2 million, primarily due to the increased contribution from volume/mix and the Elkhart and Trilogy acquisitions. Partially offsetting these contributions were higher raw material costs, including a $1.6 million increase to the LIFO inventory reserve, and increased labor costs, which were not fully recovered by pricing actions and led to an unfavorable price-to-cost relationship for the quarter. As a result, gross margin was 27.1% compared with 35.6% for the third quarter of 2020. Selling, general and administrative expenses increased $8.6 million, or 25.4% to $42.5 million, reflecting the Elkhart and Trilogy acquisitions, higher salaries, benefits, and incentive compensation costs and increased professional fees. SG&A as a percentage of sales declined to 21.3% in the third quarter, compared with 25.7% in the same period last year. Net income per diluted share was $0.22, compared with $0.24 for the third quarter of 2020. Adjusted earnings per diluted share were $0.23, compared with $0.30 for the third quarter of 2020.

Third Quarter 2021 Segment Results

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

Material Handling

 

Net
Sales

 

Op
Income

 

Adj Op
Income

 

Adj Op
Income
Margin

Q3 2021 Results

$149.7

 

$15.1

 

$15.2

 

10.2%

Increase (decrease) vs prior year

72.5%

 

(3.4)%

 

(7.6)%

 

-880 bps

Net sales for the Material Handling Segment during the third quarter of 2021 were $149.7 million, an increase of $62.9 million, or 72.5%, compared with $86.8 million for the third quarter of 2020. Excluding the incremental $40.8 million of net sales from the Elkhart and Trilogy acquisitions, organic net sales increased 7% due to higher volume/mix, 18% due to favorable price and 1% due to foreign currency exchange. Organic net sales increased in the vehicle, industrial, and food and beverage end markets. Operating income decreased 3.4% to $15.1 million, compared with $15.6 million in 2020. Adjusted operating income decreased 7.6% to $15.2 million, compared with $16.5 million in 2020. Contributions from the increase in volume/mix during the quarter were more than offset by higher raw material costs, including a $1.0 million increase to the LIFO inventory reserve, and increased labor costs, which were not fully recovered by pricing actions and led to an unfavorable price-to-cost relationship for the quarter. Additionally, SG&A expenses were higher year-over-year. The increase in SG&A expenses was primarily due to the Elkhart and Trilogy acquisitions and higher salaries, benefits, and incentive compensation costs. The Material Handling Segment’s adjusted operating income margin was 10.2%, compared with 19.0% for the third quarter of 2020.

Distribution

 

Net
Sales

 

Op
Income

 

Adj Op
Income

 

Adj Op
Income
Margin

Q3 2021 Results

$50.4

 

$4.4

 

$4.4

 

8.7%

Increase (decrease) vs prior year

10.8%

 

(14.0)%

 

(14.0)%

 

-250 bps

Net sales for the Distribution Segment during the third quarter of 2021 were $50.4 million, an increase of $4.9 million, or 10.8%, compared with $45.5 million for the third quarter of 2020. The increase was driven by higher volume/mix across both equipment and supplies and pricing actions. Operating income decreased to $4.4 million, compared with $5.1 million in 2020. Contributions from higher volume/mix and pricing actions were more than offset by an increase in SG&A expenses year-over-year. The increase in SG&A expenses was primarily the result of higher salaries, benefits, and incentive compensation costs and increased selling expenses. The Distribution Segment’s adjusted operating income margin was 8.7%, compared with 11.2% for the third quarter of 2020.

Balance Sheet & Cash Flow

As of September 30, 2021, the Company’s cash on hand totaled $14.8 million, compared to $28.3 million on December 31, 2020. Total debt as of September 30, 2021, was $121.4 million.

During the third quarter, cash flow used for operations was $7.8 million resulting in negative free cash flow of $13.8 million, compared with cash flow provided by operations of $19.5 million and free cash flow of $16.2 million for the third quarter of 2020. The decrease in free cash flow was primarily due to higher working capital, which was driven by increases in accounts receivable and inventory and a decrease in accounts payable, and higher capital expenditures. The Company expects working capital trends to turn favorable in the fourth quarter.

2021 Outlook

The Company updated its outlook for fiscal 2021, and currently forecasts:

  • Net sales growth in the mid-to-high 40% range, with slightly more than half of the increase due to the Elkhart and Trilogy acquisitions
  • Diluted EPS in the range of $0.86 to $1.01; adjusted diluted EPS in the range of $0.90 to $1.05
  • Capital expenditures to approximate $16 to $19 million
  • Effective tax rate to approximate 26%

Conference Call Details

The Company will host an earnings conference call and webcast for investors and analysts on Thursday, November 4, 2021, 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.incommglobalevents.com/registration/q4inc/9083/myers-industries-2021-third-quarter-earnings-call/. Upon registering, each participant will be provided with call details and a registrant ID that will be used to track call attendance. Reminders will also be sent to registered participants via email. The live webcast of the conference call can be accessed from the Investor Relations section of the Company's website at www.myersindustries.com.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. Investors can access a replay of the teleconference at (866) 813-9403; international callers use (226) 828-7578. The Access Code is 465029. The teleconference replay will be available through November 11, 2021.

Use of Non-GAAP Financial Measures

The Company uses certain non-GAAP measures in this release. Adjusted gross profit, adjusted gross profit margin, adjusted operating income (loss), adjusted operating income margin, adjusted earnings before interest, taxes, depreciation and amortization (EBITDA), adjusted EBITDA margin, adjusted income (loss) before taxes, adjusted net income, adjusted earnings per diluted share, 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 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 “will”, “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: impacts from the COVID-19 pandemic on our business, conditions, customers and capital position; the impact of COVID-19 on local, national and global economic conditions; the effects of various governmental responses to the COVID-19 pandemic, raw material availability, increases in raw material costs, or other production costs; impacts of price increases, 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; impact of the U.S. elections impacts on the regulatory landscape, capital markets, and responses to and management of the COVID-19 pandemic including further economic stimulus from the federal government; and other important factors detailed previously and from time to time in the Company’s filings with the Securities and Exchange Commission, including the Company’s Annual Report on Form 10-K for the year ended December 31, 2020 and subsequent Quarterly Reports on Form 10-Q. 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.

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,
2021

 

 

September 30,
2020

 

 

September 30,
2021

 

 

September 30,
2020

 

Net sales

 

$

200,058

 

 

$

132,258

 

 

$

561,856

 

 

$

372,902

 

Cost of sales

 

 

145,860

 

 

 

85,191

 

 

 

402,251

 

 

 

240,779

 

Gross profit

 

 

54,198

 

 

 

47,067

 

 

 

159,605

 

 

 

132,123

 

Selling, general and administrative expenses

 

 

42,531

 

 

 

33,927

 

 

 

122,200

 

 

 

95,360

 

Gain on disposal of fixed assets

 

 

(150

)

 

 

 

 

 

(1,146

)

 

 

(7

)

Gain on sale of notes receivable

 

 

 

 

 

 

 

 

 

 

 

(11,924

)

Operating income (loss)

 

 

11,817

 

 

 

13,140

 

 

 

38,551

 

 

 

48,694

 

Interest expense, net

 

 

1,056

 

 

 

1,204

 

 

 

3,050

 

 

 

3,467

 

Income (loss) before income taxes

 

 

10,761

 

 

 

11,936

 

 

 

35,501

 

 

 

45,227

 

Income tax expense (benefit)

 

 

2,858

 

 

 

3,251

 

 

 

9,218

 

 

 

11,448

 

Net income (loss)

 

$

7,903

 

 

$

8,685

 

 

$

26,283

 

 

$

33,779

 

Net income (loss) per common share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.22

 

 

$

0.24

 

 

$

0.73

 

 

$

0.94

 

Diluted

 

$

0.22

 

 

$

0.24

 

 

$

0.72

 

 

$

0.94

 

Weighted average common shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

36,195,560

 

 

 

35,796,247

 

 

 

36,103,894

 

 

 

35,764,822

 

Diluted

 

 

36,402,276

 

 

 

35,943,129

 

 

 

36,328,765

 

 

 

35,938,186

 

MYERS INDUSTRIES, INC.

SALES AND EARNINGS BY SEGMENT (UNAUDITED)

(Dollars in thousands)

 

 

 

Quarter Ended September 30,

 

 

Nine Months Ended September 30,

 

 

 

2021

 

 

2020

 

 

% Change

 

 

2021

 

 

2020

 

 

% Change

 

Net sales

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Material Handling

 

$

149,664

 

 

$

86,769

 

 

 

72.5

%

 

$

416,784

 

 

$

251,700

 

 

 

65.6

%

Distribution

 

 

50,413

 

 

 

45,517

 

 

 

10.8

%

 

$

145,119

 

 

$

121,253

 

 

 

19.7

%

Inter-company Sales

 

 

(19

)

 

 

(28

)

 

 

-

 

 

$

(47

)

 

$

(51

)

 

 

-

 

Total

 

$

200,058

 

 

$

132,258

 

 

 

51.3

%

 

$

561,856

 

 

$

372,902

 

 

 

50.7

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income (loss)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Material Handling

 

$

15,066

 

 

$

15,593

 

 

 

(3.4

)%

 

$

49,895

 

 

$

46,556

 

 

 

7.2

%

Distribution

 

 

4,377

 

 

 

5,091

 

 

 

(14.0

)%

 

 

10,029

 

 

 

8,577

 

 

 

16.9

%

Corporate

 

 

(7,626

)

 

 

(7,544

)

 

 

-

 

 

 

(21,373

)

 

 

(6,439

)

 

 

-

 

Total

 

$

11,817

 

 

$

13,140

 

 

 

(10.1

)%

 

$

38,551

 

 

$

48,694

 

 

 

(20.8

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted operating income (loss)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Material Handling

 

$

15,242

 

 

$

16,498

 

 

 

(7.6

)%

 

$

49,178

 

 

$

47,461

 

 

 

3.6

%

Distribution

 

 

4,377

 

 

 

5,091

 

 

 

(14.0

)%

 

 

10,556

 

 

 

8,594

 

 

 

22.8

%

Corporate

 

 

(7,091

)

 

 

(6,032

)

 

 

-

 

 

 

(20,253

)

 

 

(16,567

)

 

 

-

 

Total

 

$

12,528

 

 

$

15,557

 

 

 

(19.5

)%

 

$

39,481

 

 

$

39,488

 

 

 

(0.0

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted operating income margin

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Material Handling

 

 

10.2

%

 

 

19.0

%

 

 

 

 

 

 

11.8

%

 

 

18.9

%

 

 

 

 

Distribution

 

 

8.7

%

 

 

11.2

%

 

 

 

 

 

 

7.3

%

 

 

7.1

%

 

 

 

 

Corporate

 

n/a

 

 

n/a

 

 

 

 

 

 

n/a

 

 

n/a

 

 

 

 

 

Total

 

 

6.3

%

 

 

11.8

%

 

 

 

 

 

 

7.0

%

 

 

10.6

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Material Handling

 

$

19,379

 

 

$

19,888

 

 

 

(2.6

)%

 

$

62,552

 

 

$

61,011

 

 

 

2.5

%

Distribution

 

 

4,900

 

 

 

5,647

 

 

 

(13.2

)%

 

 

12,169

 

 

 

10,354

 

 

 

17.5

%

Corporate

 

 

(6,993

)

 

 

(5,933

)

 

 

-

 

 

 

(19,952

)

 

 

(16,270

)

 

 

-

 

Total

 

$

17,286

 

 

$

19,602

 

 

 

(11.8

)%

 

$

54,769

 

 

$

55,095

 

 

 

(0.6

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA margin

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Material Handling

 

 

12.9

%

 

 

22.9

%

 

 

 

 

 

 

15.0

%

 

 

24.2

%

 

 

 

 

Distribution

 

 

9.7

%

 

 

12.4

%

 

 

 

 

 

 

8.4

%

 

 

8.5

%

 

 

 

 

Corporate

 

n/a

 

 

n/a

 

 

 

 

 

 

n/a

 

 

n/a

 

 

 

 

 

Total

 

 

8.6

%

 

 

14.8

%

 

 

 

 

 

 

9.7

%

 

 

14.8

%

 

 

 

 

MYERS INDUSTRIES, INC.

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

GROSS PROFIT, OPERATING INCOME AND EBITDA (UNAUDITED)

(Dollars in thousands)

 

 

 

Quarter Ended September 30, 2021

 

 

 

Material
Handling

 

 

Distribution

 

 

Segment
Total

 

 

Corporate
& Other

 

 

Total

 

Net sales

 

$

149,664

 

 

$

50,413

 

 

$

200,077

 

 

$

(19

)

 

$

200,058

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross profit

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

54,198

 

Add: Restructuring expenses and other adjustments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

145

 

Adjusted gross profit

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

54,343

 

Gross margin as adjusted

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

27.2

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income (loss)

 

 

15,066

 

 

 

4,377

 

 

 

19,443

 

 

 

(7,626

)

 

 

11,817

 

Add: Acquisition and integration costs

 

 

31

 

 

 

 

 

 

31

 

 

 

535

 

 

 

566

 

Add: Restructuring expenses and other adjustments

 

 

145

 

 

 

 

 

 

145

 

 

 

 

 

 

145

 

Adjusted operating income (loss)(1)

 

 

15,242

 

 

 

4,377

 

 

 

19,619

 

 

 

(7,091

)

 

 

12,528

 

Adjusted operating income margin

 

 

10.2

%

 

 

8.7

%

 

 

9.8

%

 

n/a

 

 

 

6.3

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Add: Depreciation and amortization

 

 

4,137

 

 

 

523

 

 

 

4,660

 

 

 

98

 

 

 

4,758

 

Adjusted EBITDA

 

$

19,379

 

 

$

4,900

 

 

$

24,279

 

 

$

(6,993

)

 

$

17,286

 

Adjusted EBITDA margin

 

 

12.9

%

 

 

9.7

%

 

 

12.1

%

 

n/a

 

 

 

8.6

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) Includes gross profit adjustments of $176 and SG&A adjustments of $535

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Quarter Ended September 30, 2020

 

 

 

Material
Handling

 

 

Distribution

 

 

Segment
Total

 

 

Corporate
& Other

 

 

Total

 

Net sales

 

$

86,769

 

 

$

45,517

 

 

$

132,286

 

 

$

(28

)

 

$

132,258

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross profit

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

47,067

 

Gross margin

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

35.6

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income (loss)

 

 

15,593

 

 

 

5,091

 

 

 

20,684

 

 

 

(7,544

)

 

 

13,140

 

Add: Severance costs

 

 

905

 

 

 

 

 

 

905

 

 

 

1,512

 

 

 

2,417

 

Adjusted operating income (loss)(1)

 

 

16,498

 

 

 

5,091

 

 

 

21,589

 

 

 

(6,032

)

 

 

15,557

 

Adjusted operating income margin

 

 

19.0

%

 

 

11.2

%

 

 

16.3

%

 

n/a

 

 

 

11.8

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Add: Depreciation and amortization

 

 

3,390

 

 

 

556

 

 

 

3,946

 

 

 

99

 

 

 

4,045

 

Adjusted EBITDA

 

$

19,888

 

 

$

5,647

 

 

$

25,535

 

 

$

(5,933

)

 

$

19,602

 

Adjusted EBITDA margin

 

 

22.9

%

 

 

12.4

%

 

 

19.3

%

 

n/a

 

 

 

14.8

%

 

 

(1) Includes SG&A adjustments of $2,417

 

MYERS INDUSTRIES, INC.

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

GROSS PROFIT, OPERATING INCOME AND EBITDA (UNAUDITED)

(Dollars in thousands)

 

 

 

Nine Months Ended September 30, 2021

 

 

 

Material
Handling

 

 

Distribution

 

 

Segment
Total

 

 

Corporate
& Other

 

 

Total

 

Net sales

 

$

416,784

 

 

$

145,119

 

 

$

561,903

 

 

$

(47

)

 

$

561,856

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross profit

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

159,605

 

Add: Restructuring expenses and other adjustments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

247

 

Adjusted gross profit

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

159,852

 

Gross margin as adjusted

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

28.5

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income (loss)

 

 

49,895

 

 

 

10,029

 

 

 

59,924

 

 

 

(21,373

)

 

 

38,551

 

Add: Severance costs

 

 

 

 

 

527

 

 

 

527

 

 

 

318

 

 

 

845

 

Add: Acquisition and integration costs

 

 

31

 

 

 

 

 

 

31

 

 

 

802

 

 

 

833

 

Add: Restructuring expenses and other adjustments

 

 

247

 

 

 

 

 

 

247

 

 

 

 

 

 

247

 

Less: Gain on sale of assets

 

 

(995

)

 

 

 

 

 

(995

)

 

 

 

 

 

(995

)

Adjusted operating income (loss)(1)

 

 

49,178

 

 

 

10,556

 

 

 

59,734

 

 

 

(20,253

)

 

 

39,481

 

Adjusted operating income margin

 

 

11.8

%

 

 

7.3

%

 

 

10.6

%

 

n/a

 

 

 

7.0

%

Add: Depreciation and amortization

 

 

13,374

 

 

 

1,613

 

 

 

14,987

 

 

 

301

 

 

 

15,288

 

Adjusted EBITDA

 

$

62,552

 

 

$

12,169

 

 

$

74,721

 

 

$

(19,952

)

 

$

54,769

 

Adjusted EBITDA margin

 

 

15.0

%

 

 

8.4

%

 

 

13.3

%

 

n/a

 

 

 

9.7

%

 

 

(1) Includes gross profit adjustments of $278 and SG&A adjustments of $651

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nine Months Ended September 30, 2020

 

 

 

Material
Handling

 

 

Distribution

 

 

Segment
Total

 

 

Corporate
& Other

 

 

Total

 

Net sales

 

$

251,700

 

 

$

121,253

 

 

$

372,953

 

 

$

(51

)

 

$

372,902

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross profit

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

132,123

 

Gross margin

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

35.4

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income (loss)

 

 

46,556

 

 

 

8,577

 

 

 

55,133

 

 

 

(6,439

)

 

 

48,694

 

Add: Severance costs

 

 

905

 

 

 

 

 

 

905

 

 

 

1,512

 

 

 

2,417

 

Add: Restructuring expenses and other adjustments

 

 

 

 

 

 

 

 

 

 

 

249

 

 

 

249

 

Add: Acquisition and integration costs

 

 

 

 

 

17

 

 

 

17

 

 

 

35

 

 

 

52

 

Less: Lawn and Garden sale of note/release of lease guarantee liability

 

 

 

 

 

 

 

 

 

 

 

(11,924

)

 

 

(11,924

)

Adjusted operating income (loss)(1)

 

 

47,461

 

 

 

8,594

 

 

 

56,055

 

 

 

(16,567

)

 

 

39,488

 

Adjusted operating income margin

 

 

18.9

%

 

 

7.1

%

 

 

15.0

%

 

n/a

 

 

 

10.6

%

Add: Depreciation and amortization

 

 

13,550

 

 

 

1,760

 

 

 

15,310

 

 

 

297

 

 

 

15,607

 

Adjusted EBITDA

 

$

61,011

 

 

$

10,354

 

 

$

71,365

 

 

$

(16,270

)

 

$

55,095

 

Adjusted EBITDA margin

 

 

24.2

%

 

 

8.5

%

 

 

19.1

%

 

n/a

 

 

 

14.8

%

 

 

(1) Includes SG&A adjustments of $2,718

 

MYERS INDUSTRIES, INC.

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

INCOME AND EARNINGS PER DILUTED SHARE (UNAUDITED)

(Dollars in thousands, except per share data)

 

 

 

Quarter Ended
September 30,

 

 

Nine Months Ended
September 30,

 

 

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

 

Operating income (loss)

 

$

11,817

 

 

$

13,140

 

 

$

38,551

 

 

$

48,694

 

 

Add: Severance costs

 

 

 

 

 

2,417

 

 

 

845

 

 

 

2,417

 

 

Add: Restructuring expenses and other adjustments

 

 

145

 

 

 

 

 

 

247

 

 

 

249

 

 

Add: Acquisition and integration costs

 

 

566

 

 

 

 

 

 

833

 

 

 

52

 

 

Less: Gain on sale of assets

 

 

 

 

 

 

 

 

(995

)

 

 

 

 

Less: Lawn and Garden sale of note/release of lease guarantee liability

 

 

 

 

 

 

 

 

 

 

 

(11,924

)

 

Adjusted operating income (loss)

 

 

12,528

 

 

 

15,557

 

 

 

39,481

 

 

 

39,488

 

 

Less: Interest expense, net

 

 

(1,056

)

 

 

(1,204

)

 

 

(3,050

)

 

 

(3,467

)

 

Adjusted income (loss) before taxes

 

 

11,472

 

 

 

14,353

 

 

 

36,431

 

 

 

36,021

 

 

Less: Income tax expense(1)

 

 

(2,983

)

 

 

(3,732

)

 

 

(9,472

)

 

 

(9,365

)

 

Adjusted net income (loss)

 

$

8,489

 

 

$

10,621

 

 

$

26,959

 

 

$

26,656

 

 

Adjusted earnings per diluted share(2)

 

$

0.23

 

 

$

0.30

 

 

$

0.74

 

 

$

0.74

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) Income taxes are calculated using the normalized effective tax rate for each year. The rate used in 2021 and 2020 is 26%.

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

MYERS INDUSTRIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (UNAUDITED)

(Dollars in thousands)

 

 

 

September 30, 2021

 

 

December 31, 2020

 

Assets

 

 

 

 

 

 

 

 

Current Assets

 

 

 

 

 

 

 

 

Cash

 

$

14,829

 

 

$

28,301

 

Accounts receivable, net

 

 

116,150

 

 

 

83,701

 

Income tax receivable

 

 

 

 

 

1,049

 

Inventories, net

 

 

90,378

 

 

 

65,919

 

Prepaid expenses and other current assets

 

 

7,201

 

 

 

4,760

 

Total Current Assets

 

 

228,558

 

 

 

183,730

 

Property, plant, & equipment, net

 

 

90,496

 

 

 

73,953

 

Right of use asset - operating leases

 

 

30,532

 

 

 

18,390

 

Deferred income taxes

 

 

84

 

 

 

84

 

Other assets

 

 

145,123

 

 

 

123,858

 

Total Assets

 

$

494,793

 

 

$

400,015

 

Liabilities & Shareholders' Equity

 

 

 

 

 

 

 

 

Current Liabilities

 

 

 

 

 

 

 

 

Accounts payable

 

$

78,552

 

 

$

61,150

 

Accrued expenses

 

 

43,629

 

 

 

36,744

 

Operating lease liability - short-term

 

 

5,369

 

 

 

4,359

 

Finance lease liability - short-term

 

 

495

 

 

 

 

Long-term debt - current portion

 

 

 

 

 

39,994

 

Total Current Liabilities

 

 

128,045

 

 

 

142,247

 

Long-term debt

 

 

111,339

 

 

 

37,582

 

Operating lease liability - long-term

 

 

24,989

 

 

 

13,755

 

Finance lease liability - long-term

 

 

9,563

 

 

 

 

Other liabilities

 

 

12,523

 

 

 

14,373

 

Deferred income taxes

 

 

2,809

 

 

 

2,958

 

Total Shareholders' Equity

 

 

205,525

 

 

 

189,100

 

Total Liabilities & Shareholders' Equity

 

$

494,793

 

 

$

400,015

 

MYERS INDUSTRIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

(Dollars in thousands)

 

 

 

Nine Months Ended September 30,

 

 

 

2021

 

 

2020

 

Cash Flows From Operating Activities

 

 

 

 

 

 

 

 

Net income

 

$

26,283

 

 

$

33,779

 

Adjustments to reconcile net income to net cash

provided by (used for) operating activities

 

 

 

 

 

 

 

 

Depreciation

 

 

11,524

 

 

 

10,400

 

Amortization

 

 

4,107

 

 

 

5,507

 

Non-cash stock-based compensation expense

 

 

2,601

 

 

 

2,763

 

Gain on disposal of fixed assets

 

 

(1,146

)

 

 

(7

)

Gain on sale of notes receivable

 

 

 

 

 

(11,924

)

Other

 

 

(2,096

)

 

 

2,382

 

Cash flows provided by (used for) working capital

 

 

 

 

 

 

 

 

Accounts receivable

 

 

(29,528

)

 

 

(14,266

)

Inventories

 

 

(21,827

)

 

 

(3,939

)

Prepaid expenses and other current assets

 

 

(2,378

)

 

 

(1,728

)

Accounts payable and accrued expenses

 

 

26,004

 

 

 

8,367

 

Net cash provided by (used for) operating activities

 

 

13,544

 

 

 

31,334

 

Cash Flows From Investing Activities

 

 

 

 

 

 

 

 

Capital expenditures

 

 

(14,264

)

 

 

(8,955

)

Acquisition of business

 

 

(35,473

)

 

 

(716

)

Proceeds from sale of property, plant, and equipment

 

 

3,051

 

 

 

 

Proceeds from sale of notes receivable

 

 

 

 

 

1,200

 

Net cash provided by (used for) investing activities

 

 

(46,686

)

 

 

(8,471

)

Cash Flows From Financing Activities

 

 

 

 

 

 

 

 

Net borrowings from revolving credit facility

 

 

73,400

 

 

 

 

Repayments of long-term debt

 

 

(40,000

)

 

 

 

Payments on finance lease

 

 

(281

)

 

 

 

Cash dividends paid

 

 

(14,701

)

 

 

(14,570

)

Proceeds from issuance of common stock

 

 

3,235

 

 

 

367

 

Shares withheld for employee taxes on equity awards

 

 

(853

)

 

 

(416

)

Deferred financing fees

 

 

(1,095

)

 

 

 

Net cash provided by (used for) financing activities

 

 

19,705

 

 

 

(14,619

)

Foreign exchange rate effect on cash

 

 

(35

)

 

 

(25

)

Net (decrease) increase in cash

 

 

(13,472

)

 

 

8,219

 

Cash at January 1

 

 

28,301

 

 

 

75,527

 

Cash at September 30

 

$

14,829

 

 

$

83,746

 

MYERS INDUSTRIES, INC.

RECONCILIATION OF FREE CASH FLOW TO GAAP NET CASH PROVIDED BY

(USED FOR) OPERATING ACTIVITIES – CONTINUING OPERATIONS

(UNAUDITED)

(Dollars in thousands)

 

 

 

YTD

 

 

YTD

 

 

Quarter

 

 

 

September 30, 2021

 

 

June 30, 2021

 

 

September 30, 2021

 

Net cash provided by (used for) operating activities

 

$

13,544

 

-

$

21,301

 

=

$

(7,757

)

Capital expenditures

 

 

(14,264

)

-

 

(8,220

)

=

 

(6,044

)

Free cash flow

 

$

(720

)

-

$

13,081

 

=

$

(13,801

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

YTD

 

 

YTD

 

 

Quarter

 

 

 

September 30, 2020

 

 

June 30, 2020

 

 

September 30, 2020

 

Net cash provided by (used for) operating activities

 

$

31,334

 

-

$

11,785

 

=

$

19,549

 

Capital expenditures

 

 

(8,955

)

-

 

(5,589

)

=

 

(3,366

)

Free cash flow

 

$

22,379

 

-

$

6,196

 

=

$

16,183

 

MYERS INDUSTRIES, INC.

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

ADJUSTED DILUTED EARNINGS PER SHARE

(UNAUDITED)

 

 

Full Year 2021 Guidance

 

 

Low

 

 

High

 

GAAP diluted net income per common share

$

0.86

 

 

$

1.01

 

Add: Net restructuring expenses and other adjustments

 

0.02

 

 

 

0.02

 

Add: Acquisition and integration costs

 

0.02

 

 

 

0.02

 

Adjusted diluted earnings per share

$

0.90

 

 

$

1.05

 

 

 

 

 

 

 

 

 

M-INV

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

Source: Myers Industries, Inc.