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Myers Industries Announces Second Quarter 2023 Results

Self-Help Initiatives Sustain Gross Margin Profile

Continuing to Invest in Growth and Capabilities, while Prudently Managing Costs

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 second quarter ended June 30, 2023.

Second Quarter 2023 Financial Highlights

  • Net sales of $208.5 million compared to $233.2 million in the prior year period
  • Gross margin of 32.8%, up 80 basis points versus the prior year period
  • GAAP net income per diluted share of $0.29 compared to $0.43 in the prior year period
  • Adjusted earnings per diluted share of $0.35 compared to $0.45 in the prior year period
  • Cash flow provided by operations was $22.9 million and free cash flow was $16.7 million

Myers Industries’ President and CEO Mike McGaugh said “I am pleased with our business’s ability to maintain gross margins and navigate a more complex operating environment during the second quarter while facing macro-economic and inflationary headwinds. Our self-help initiatives drove further margin expansion, allowing us to continue making capital investments in our plants and investments in our M&A and Commercial Excellence processes and capabilities. We are working to drive a more variable cost structure and we are well positioned to meet the demand when key markets recover. We also see strong demand for our agriculture and military products, and our e-commerce initiative has strong momentum. There are also very good dynamics for the tire market given the growth of electric vehicles, which bodes well for our Distribution segment, where we are refocusing our sales and sourcing structure, and integrating our Mohawk acquisition to enable us to better capture this market opportunity.

Recognizing softer demand in our RV and Marine end markets, we have taken meaningful cost reduction actions to mitigate bottom line impact. We adjusted operating costs to match production requirements and increased efficiencies, including deactivating one of our Roto Molding facilities. As we drive targeted cost containment initiatives in our businesses that serve the RV and Marine industries, we continue to evaluate consolidating opportunities and decreasing capacity where needed, while retaining an appropriate level of reserved capacity to activate when market conditions improve.

We are continuing to invest in our people and processes for future growth, while also working to better align our manufacturing and SG&A costs to match current market conditions. Given the current macro challenges, we have elected to lower our revenue guidance for the full year; however, due to our demonstrated ability to deliver operational improvements, price increases and self-help measures, we believe our earnings capability will be resilient and we are maintaining our adjusted EPS guidance.

We continue to maintain a strong balance sheet, supported by consistent free cash generation. We also continue to develop and evaluate a strong pipeline of potential acquisition opportunities, while exercising discipline in evaluating those opportunities, including walking away when the economics aren't right."

McGaugh concluded "We have the right strategy and the right team to continue to execute and further transform Myers into a high-growth, world class organization while delivering significant value to our stakeholders.”

Second Quarter 2023 Financial Summary

 

 

Quarter Ended June 30,

(Dollars in thousands, except per share data)

 

2023

 

2022

 

% Inc

(Dec)

Net sales

 

$208,453

 

$233,156

 

(10.6)%

Gross profit

 

$68,410

 

$74,716

 

(8.4)%

Gross margin

 

32.8%

 

32.0%

 

 

Operating income

 

$16,142

 

$22,617

 

(28.6)%

Net income

 

$10,605

 

$15,831

 

(33.0)%

Net income per diluted share

 

$0.29

 

$0.43

 

(32.6)%

 

 

 

 

 

 

 

Adjusted operating income

 

$19,027

 

$23,618

 

(19.4)%

Adjusted net income

 

$12,928

 

$16,581

 

(22.0)%

Adjusted earnings per diluted share

 

$0.35

 

$0.45

 

(22.2)%

Adjusted EBITDA

 

$24,704

 

$28,860

 

(14.4)%

Net sales were $208.5 million, a decrease of $24.7 million, or 10.6%, compared with $233.2 million for the second quarter of 2022. The decrease was the result of lower sales in the Material Handling segment, partially offset by higher sales in the Distribution segment largely from incremental sales of $9.3 million from the Mohawk Rubber acquisition. On an organic basis, the contribution from higher pricing in the Distribution segment was more than offset by lower volumes in both segments.

Gross profit decreased $6.3 million, or 8.4% to $68.4 million, as the contribution from lower raw material costs and the Mohawk Rubber acquisition was not enough to offset lower volumes. Gross margin expanded 80 basis points to 32.8% compared with 32.0% for the second quarter of 2022. Selling, general and administrative expenses were flat for the second quarter of 2023 compared to the same period last year. SG&A as a percentage of sales increased to 25.1%, compared with 22.4% in the same period last year. After removing the adjusting items, SG&A was down year over year by $1.7 million. SG&A also included $1.3 million of consulting expense that was used to increase and strengthen Myers capabilities as the company moves into the Horizon-2 strategy. Net income per diluted share was $0.29, compared with $0.43 for the second quarter of 2022. Adjusted earnings per diluted share were $0.35, compared with $0.45 for the second quarter of 2022.

Second 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

Q2 2023 Results

$143.3

 

$24.8

 

17.3%

 

$29.9

 

20.8%

Q2 2022 Results

$173.1

 

$28.0

 

16.2%

 

$32.5

 

18.8%

$ Increase (decrease) vs prior year

($29.8)

 

($3.2)

 

 

 

($2.7)

 

 

% Increase (decrease) vs prior year

(17.2)%

 

(11.4)%

 

+110 bps

 

(8.2)%

 

+200 bps

Items in this table may not recalculate due to rounding

Net sales for the Material Handling segment were $143.3 million, a decrease of $29.8 million, or 17.2%, compared with $173.1 million for the second quarter of 2022. Net sales decreased in the vehicle, industrial and consumer end markets, led by reduced demand for RV and marine products, as well as being impacted by the timing of food & beverage sales. Operating income decreased 11.4% to $24.8 million, compared with $28.0 million in the second quarter of 2022. Operating income margin improved to 17.3% compared with 16.2% for the second quarter of 2022. Adjusted EBITDA margin improved by 200 basis points, primarily attributed to self-help initiatives, partially dampened by a decrease in sales volume. Adjusted EBITDA decreased 8.2% to $29.9 million, compared with $32.5 million in the second quarter of 2022. Lower sales volume and pricing more than offset lower raw material costs and a favorable mix. SG&A expenses were lower year-over-year, primarily due to a decrease in legal fees and lower salaries.

Distribution

 

Net Sales

 

Op Income

 

Op Income Margin

 

Adj EBITDA

 

Adj EBITDA Margin

Q2 2023 Results

$65.2

 

$3.4

 

5.2%

 

$4.7

 

7.2%

Q2 2022 Results

$60.1

 

$4.3

 

7.1%

 

$4.9

 

8.1%

$ Increase (decrease) vs prior year

$5.1

 

($0.9)

 

 

 

($0.2)

 

 

% Increase (decrease) vs prior year

8.5%

 

(20.4)%

 

-190 bps

 

(3.7)%

 

-90 bps

Items in this table may not recalculate due to rounding

Net sales for the Distribution segment were $65.2 million, an increase of $5.1 million, or 8.5%, compared with $60.1 million for the second quarter of 2022. Excluding the incremental $9.3 million of net sales from the Mohawk Rubber acquisition, organic net sales decreased 6.9%. Operating income decreased $0.9 million to $3.4 million, compared with $4.3 million for the second quarter of 2022. Adjusted EBITDA decreased 3.7% to $4.7 million, compared with $4.9 million in the second quarter of 2022. The decrease in operating income and adjusted EBITDA was primarily due to an increase in product costs and higher SG&A expenses. The increase in SG&A expenses was primarily the result of the Mohawk Rubber acquisition and higher salaries. The Distribution segment's operating income margin was 5.2% compared with 7.1% for the second quarter of 2022. The Distribution segment’s adjusted EBITDA margin was 7.2%, compared with 8.1% for the second quarter of 2022. The Distribution Segment continues to integrate the Mohawk Rubber acquisition and is implementing pricing actions to counter cost inflation and improve margin.

Balance Sheet & Cash Flow

As of June 30, 2023, the Company’s cash on hand totaled $30.7 million. Total debt as of June 30, 2023 was $88.2 million.

For the second quarter of 2023, cash flow provided by operations was $22.9 million and free cash flow was $16.7 million, compared with cash flow provided by operations of $27.0 million and free cash flow of $21.1 million for the second quarter of 2022. The decrease in cash flow was driven primarily by lower earnings. Capital expenditures for the second quarter of 2023 were $6.1 million, compared with $5.9 million for the second 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 single digit range
  • Net income per diluted share in the range of $1.41 to $1.73
  • Maintain adjusted earnings per diluted share range of $1.55 to $1.85
  • Capital expenditures to be in the range of $25 to $30 million
  • Effective tax rate to approximate 25%

We will continue to monitor market conditions and provide updates as we progress throughout the year.

Conference Call Details

The Company will host an earnings conference call and webcast for investors and analysts on Tuesday, August 3, 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=95bfe4bb&confId=52763. 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

 

 

Six Months Ended

 

 

 

June 30, 2023

 

 

June 30, 2022

 

 

June 30, 2023

 

 

June 30, 2022

 

Net sales

 

$

208,453

 

 

$

233,156

 

 

$

424,192

 

 

$

458,642

 

Cost of sales

 

 

140,043

 

 

 

158,440

 

 

 

284,717

 

 

 

311,998

 

Gross profit

 

 

68,410

 

 

 

74,716

 

 

 

139,475

 

 

 

146,644

 

Selling, general and administrative expenses

 

 

52,351

 

 

 

52,320

 

 

 

104,432

 

 

 

100,310

 

(Gain) loss on disposal of fixed assets

 

 

(83

)

 

 

(221

)

 

 

(56

)

 

 

(688

)

Operating income (loss)

 

 

16,142

 

 

 

22,617

 

 

 

35,099

 

 

 

47,022

 

Interest expense, net

 

 

1,790

 

 

 

1,211

 

 

 

3,436

 

 

 

2,358

 

Income (loss) before income taxes

 

 

14,352

 

 

 

21,406

 

 

 

31,663

 

 

 

44,664

 

Income tax expense (benefit)

 

 

3,747

 

 

 

5,575

 

 

 

8,082

 

 

 

11,496

 

Net income (loss)

 

$

10,605

 

 

$

15,831

 

 

$

23,581

 

 

$

33,168

 

Net income (loss) per common share:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.29

 

 

$

0.43

 

 

$

0.64

 

 

$

0.91

 

Diluted

 

$

0.29

 

 

$

0.43

 

 

$

0.64

 

 

$

0.91

 

Weighted average common shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

36,761,916

 

 

 

36,397,547

 

 

 

36,663,345

 

 

 

36,338,907

 

Diluted

 

 

36,892,177

 

 

 

36,623,495

 

 

 

36,874,084

 

 

 

36,577,192

 

MYERS INDUSTRIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (UNAUDITED)

(Dollars in thousands)

 

 

 

June 30, 2023

 

 

December 31, 2022

 

Assets

 

 

 

 

 

 

Current Assets

 

 

 

 

 

 

Cash

 

$

30,692

 

 

$

23,139

 

Accounts receivable, net

 

 

116,771

 

 

 

133,716

 

Inventories, net

 

 

98,238

 

 

 

93,351

 

Other current assets

 

 

10,919

 

 

 

7,001

 

Total Current Assets

 

 

256,620

 

 

 

257,207

 

Property, plant, & equipment, net

 

 

106,635

 

 

 

101,566

 

Right of use asset - operating leases

 

 

27,518

 

 

 

28,908

 

Deferred income taxes

 

 

129

 

 

 

129

 

Other assets

 

 

151,808

 

 

 

154,824

 

Total Assets

 

$

542,710

 

 

$

542,634

 

Liabilities & Shareholders' Equity

 

 

 

 

 

 

Current Liabilities

 

 

 

 

 

 

Accounts payable

 

$

81,744

 

 

$

73,536

 

Accrued expenses

 

 

50,349

 

 

 

57,531

 

Operating lease liability - short-term

 

 

5,691

 

 

 

6,177

 

Finance lease liability - short-term

 

 

534

 

 

 

518

 

Long-term debt - current portion

 

 

25,989

 

 

 

 

Total Current Liabilities

 

 

164,307

 

 

 

137,762

 

Long-term debt

 

 

52,986

 

 

 

93,962

 

Operating lease liability - long-term

 

 

21,982

 

 

 

22,786

 

Finance lease liability - long-term

 

 

8,645

 

 

 

8,919

 

Other liabilities

 

 

11,414

 

 

 

15,270

 

Deferred income taxes

 

 

8,954

 

 

 

7,508

 

Total Shareholders' Equity

 

 

274,422

 

 

 

256,427

 

Total Liabilities & Shareholders' Equity

 

$

542,710

 

 

$

542,634

 

MYERS INDUSTRIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

(Dollars in thousands)

 

 

 

Quarter Ended June 30,

 

 

Six Months Ended June 30,

 

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Cash Flows From Operating Activities

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

10,605

 

 

$

15,831

 

 

$

23,581

 

 

$

33,168

 

Adjustments to reconcile net income to net cash

provided by (used for) operating activities

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

5,677

 

 

 

5,241

 

 

 

11,295

 

 

 

10,441

 

Amortization of deferred financing costs

 

 

78

 

 

 

121

 

 

 

156

 

 

 

242

 

Non-cash stock-based compensation expense

 

 

2,488

 

 

 

2,133

 

 

 

4,392

 

 

 

3,860

 

Gain on disposal of fixed assets

 

 

(83

)

 

 

(221

)

 

 

(56

)

 

 

(688

)

Other

 

 

3,319

 

 

 

177

 

 

 

2,492

 

 

 

698

 

Cash flows provided by (used for) working capital

 

 

 

 

 

 

 

 

 

 

 

 

Accounts receivable

 

 

11,915

 

 

 

10,694

 

 

 

15,096

 

 

 

(21,200

)

Inventories

 

 

4,048

 

 

 

(1,279

)

 

 

(4,730

)

 

 

(7,259

)

Prepaid expenses and other current assets

 

 

(5,048

)

 

 

(6,316

)

 

 

(3,828

)

 

 

(5,702

)

Accounts payable and accrued expenses

 

 

(10,147

)

 

 

626

 

 

 

240

 

 

 

20,739

 

Net cash provided by (used for) operating activities

 

 

22,852

 

 

 

27,007

 

 

 

48,638

 

 

 

34,299

 

Cash Flows From Investing Activities

 

 

 

 

 

 

 

 

 

 

 

 

Capital expenditures

 

 

(6,125

)

 

 

(5,883

)

 

 

(15,216

)

 

 

(10,943

)

Acquisition of business, net of cash acquired

 

 

 

 

 

(24,253

)

 

 

(160

)

 

 

(24,253

)

Proceeds from sale of property, plant, and equipment

 

 

109

 

 

 

423

 

 

 

142

 

 

 

1,499

 

Net cash provided by (used for) investing activities

 

 

(6,016

)

 

 

(29,713

)

 

 

(15,234

)

 

 

(33,697

)

Cash Flows From Financing Activities

 

 

 

 

 

 

 

 

 

 

 

 

Net borrowings (repayments) from revolving credit facility

 

 

(9,800

)

 

 

11,500

 

 

 

(15,000

)

 

 

13,000

 

Payments on finance lease

 

 

(129

)

 

 

(125

)

 

 

(258

)

 

 

(249

)

Cash dividends paid

 

 

(5,022

)

 

 

(4,995

)

 

 

(10,296

)

 

 

(9,934

)

Proceeds from issuance of common stock

 

 

437

 

 

 

1,367

 

 

 

1,569

 

 

 

1,838

 

Shares withheld for employee taxes on equity awards

 

 

(34

)

 

 

(3

)

 

 

(2,033

)

 

 

(347

)

Net cash provided by (used for) financing activities

 

 

(14,548

)

 

 

7,744

 

 

 

(26,018

)

 

 

4,308

 

Foreign exchange rate effect on cash

 

 

163

 

 

 

(180

)

 

 

167

 

 

 

(131

)

Net increase (decrease) in cash

 

 

2,451

 

 

 

4,858

 

 

 

7,553

 

 

 

4,779

 

Beginning Cash

 

 

28,241

 

 

 

17,576

 

 

 

23,139

 

 

 

17,655

 

Ending Cash

 

$

30,692

 

 

$

22,434

 

 

$

30,692

 

 

$

22,434

 

MYERS INDUSTRIES, INC.

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

GROSS PROFIT, OPERATING INCOME AND EBITDA (UNAUDITED)

(Dollars in thousands)

 

 

 

Quarter Ended June 30, 2023

 

 

 

Material Handling

 

 

Distribution

 

 

Segment Total

 

 

Corporate & Other

 

 

Total

 

Net sales

 

$

143,295

 

 

$

65,173

 

 

$

208,468

 

 

$

(15

)

 

$

208,453

 

Net income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

10,605

 

Net income margin

 

 

 

 

 

 

 

 

 

 

 

 

 

 

5.1

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross profit

 

 

 

 

 

 

 

 

 

 

 

 

 

 

68,410

 

Add: Restructuring expenses and other adjustments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

180

 

Adjusted gross profit

 

 

 

 

 

 

 

 

 

 

 

 

 

 

68,590

 

Gross margin as adjusted

 

 

 

 

 

 

 

 

 

 

 

 

 

 

32.9

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income (loss)

 

 

24,828

 

 

 

3,398

 

 

 

28,226

 

 

 

(12,084

)

 

 

16,142

 

Operating income margin

 

 

17.3

%

 

 

5.2

%

 

 

13.5

%

 

n/a

 

 

 

7.7

%

Add: Executive severance costs

 

 

 

 

 

410

 

 

 

410

 

 

 

289

 

 

 

699

 

Add: Restructuring expenses and other adjustments

 

 

275

 

 

 

 

 

 

275

 

 

 

 

 

 

275

 

Add: Acquisition and integration costs

 

 

 

 

 

111

 

 

 

111

 

 

 

 

 

 

111

 

Add: Environmental reserves, net(2)

 

 

 

 

 

 

 

 

 

 

 

1,800

 

 

 

1,800

 

Adjusted operating income (loss)(1)

 

 

25,103

 

 

 

3,919

 

 

 

29,022

 

 

 

(9,995

)

 

 

19,027

 

Adjusted operating income margin

 

 

17.5

%

 

 

6.0

%

 

 

13.9

%

 

n/a

 

 

 

9.1

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Add: Depreciation and amortization

 

 

4,755

 

 

 

790

 

 

 

5,545

 

 

 

132

 

 

 

5,677

 

Adjusted EBITDA

 

$

29,858

 

 

$

4,709

 

 

$

34,567

 

 

$

(9,863

)

 

$

24,704

 

Adjusted EBITDA margin

 

 

20.8

%

 

 

7.2

%

 

 

16.6

%

 

n/a

 

 

 

11.9

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) Includes gross profit adjustments of $180 and SG&A adjustments of $2,705

(2) Includes environmental charges of $1,900 net of probable insurance recoveries of $100

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Quarter Ended June 30, 2022

 

 

 

Material Handling

 

 

Distribution

 

 

Segment Total

 

 

Corporate & Other

 

 

Total

 

Net sales

 

$

173,090

 

 

$

60,075

 

 

$

233,165

 

 

$

(9

)

 

$

233,156

 

Net income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

15,831

 

Net income margin

 

 

 

 

 

 

 

 

 

 

 

 

 

 

6.8

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross profit

 

 

 

 

 

 

 

 

 

 

 

 

 

 

74,716

 

Add: Restructuring expenses and other adjustments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted gross profit

 

 

 

 

 

 

 

 

 

 

 

 

 

 

74,716

 

Gross margin as adjusted

 

 

 

 

 

 

 

 

 

 

 

 

 

 

32.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income (loss)

 

 

28,034

 

 

 

4,269

 

 

 

32,303

 

 

 

(9,686

)

 

 

22,617

 

Operating income margin

 

 

16.2

%

 

 

7.1

%

 

 

13.9

%

 

n/a

 

 

 

9.7

%

Add: Acquisition and integration costs

 

 

 

 

 

 

 

 

 

 

 

401

 

 

 

401

 

Add: Environmental reserves, net(2)

 

 

 

 

 

 

 

 

 

 

 

600

 

 

 

600

 

Adjusted operating income (loss)(1)

 

 

28,034

 

 

 

4,269

 

 

 

32,303

 

 

 

(8,685

)

 

 

23,618

 

Adjusted operating income margin

 

 

16.2

%

 

 

7.1

%

 

 

13.9

%

 

n/a

 

 

 

10.1

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Add: Depreciation and amortization

 

 

4,507

 

 

 

621

 

 

 

5,128

 

 

 

114

 

 

 

5,242

 

Adjusted EBITDA

 

$

32,541

 

 

$

4,890

 

 

$

37,431

 

 

$

(8,571

)

 

$

28,860

 

Adjusted EBITDA margin

 

 

18.8

%

 

 

8.1

%

 

 

16.1

%

 

n/a

 

 

 

12.4

%

 

 

(1) Includes SG&A adjustments of $1,001

(2) Includes environmental charges of $600 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)

 

 

 

Six Months Ended June 30, 2023

 

 

 

Material Handling

 

 

Distribution

 

 

Segment Total

 

 

Corporate & Other

 

 

Total

 

Net sales

 

$

295,857

 

 

$

128,358

 

 

$

424,215

 

 

$

(23

)

 

$

424,192

 

Net income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

23,581

 

Net income margin

 

 

 

 

 

 

 

 

 

 

 

 

 

 

5.6

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross profit

 

 

 

 

 

 

 

 

 

 

 

 

 

 

139,475

 

Add: Restructuring expenses and other adjustments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

282

 

Adjusted gross profit

 

 

 

 

 

 

 

 

 

 

 

 

 

 

139,757

 

Gross margin as adjusted

 

 

 

 

 

 

 

 

 

 

 

 

 

 

32.9

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income (loss)

 

 

50,179

 

 

 

5,635

 

 

 

55,814

 

 

 

(20,715

)

 

 

35,099

 

Operating income margin

 

 

17.0

%

 

 

4.4

%

 

 

13.2

%

 

n/a

 

 

 

8.3

%

Add: Executive severance costs

 

 

 

 

 

410

 

 

 

410

 

 

 

289

 

 

 

699

 

Add: Restructuring expenses and other adjustments

 

 

696

 

 

 

179

 

 

 

875

 

 

 

10

 

 

 

885

 

Add: Acquisition and integration costs

 

 

 

 

 

220

 

 

 

220

 

 

 

126

 

 

 

346

 

Add: Environmental reserves, net(2)

 

 

 

 

 

 

 

 

 

 

 

2,300

 

 

 

2,300

 

Adjusted operating income (loss)(1)

 

 

50,875

 

 

 

6,444

 

 

 

57,319

 

 

 

(17,990

)

 

 

39,329

 

Adjusted operating income margin

 

 

17.2

%

 

 

5.0

%

 

 

13.5

%

 

n/a

 

 

 

9.3

%

Add: Depreciation and amortization

 

 

9,354

 

 

 

1,663

 

 

 

11,017

 

 

 

278

 

 

 

11,295

 

Adjusted EBITDA

 

$

60,229

 

 

$

8,107

 

 

$

68,336

 

 

$

(17,712

)

 

$

50,624

 

Adjusted EBITDA margin

 

 

20.4

%

 

 

6.3

%

 

 

16.1

%

 

n/a

 

 

 

11.9

%

 

 

(1) Includes gross profit adjustments of $282 and SG&A adjustments of $3,948

(2) Includes environmental charges of $3,500 net of probable insurance recoveries of $1,200

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Six Months Ended June 30, 2022

 

 

 

Material Handling

 

 

Distribution

 

 

Segment Total

 

 

Corporate & Other

 

 

Total

 

Net sales

 

$

349,726

 

 

$

108,936

 

 

$

458,662

 

 

$

(20

)

 

$

458,642

 

Net income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

33,168

 

Net income margin

 

 

 

 

 

 

 

 

 

 

 

 

 

 

7.2

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross profit

 

 

 

 

 

 

 

 

 

 

 

 

 

 

146,644

 

Add: Restructuring expenses and other adjustments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

390

 

Adjusted gross profit

 

 

 

 

 

 

 

 

 

 

 

 

 

 

147,034

 

Gross margin as adjusted

 

 

 

 

 

 

 

 

 

 

 

 

 

 

32.1

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income (loss)

 

 

59,254

 

 

 

7,570

 

 

 

66,824

 

 

 

(19,802

)

 

 

47,022

 

Operating income margin

 

 

16.9

%

 

 

6.9

%

 

 

14.6

%

 

n/a

 

 

 

10.3

%

Add: Restructuring expenses and other adjustments

 

 

390

 

 

 

 

 

 

390

 

 

 

 

 

 

390

 

Add: Acquisition and integration costs

 

 

 

 

 

 

 

 

 

 

 

476

 

 

 

476

 

Add: Loss on sale of assets

 

 

261

 

 

 

 

 

 

261

 

 

 

 

 

 

261

 

Add: Environmental reserves, net(2)

 

 

 

 

 

 

 

 

 

 

 

1,300

 

 

 

1,300

 

Adjusted operating income (loss)(1)

 

 

59,905

 

 

 

7,570

 

 

 

67,475

 

 

 

(18,026

)

 

 

49,449

 

Adjusted operating income margin

 

 

17.1

%

 

 

6.9

%

 

 

14.7

%

 

n/a

 

 

 

10.8

%

Add: Depreciation and amortization

 

 

9,023

 

 

 

1,179

 

 

 

10,202

 

 

 

239

 

 

 

10,441

 

Adjusted EBITDA

 

$

68,928

 

 

$

8,749

 

 

$

77,677

 

 

$

(17,787

)

 

$

59,890

 

Adjusted EBITDA margin

 

 

19.7

%

 

 

8.0

%

 

 

16.9

%

 

n/a

 

 

 

13.1

%

 

 

(1) Includes gross profit adjustments of $390 and SG&A adjustments of $2,037

(2) Includes environmental charges of $1,300 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 June 30,

 

 

Six Months Ended June 30,

 

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Adjusted operating income (loss) reconciliation:

 

 

 

 

 

 

 

 

 

 

 

 

Operating income (loss)

 

$

16,142

 

 

$

22,617

 

 

$

35,099

 

 

$

47,022

 

Executive severance costs

 

 

699

 

 

 

 

 

 

699

 

 

 

 

Restructuring expenses and other adjustments

 

 

275

 

 

 

 

 

 

885

 

 

 

390

 

Acquisition and integration costs

 

 

111

 

 

 

401

 

 

 

346

 

 

 

476

 

Loss on sale of assets

 

 

 

 

 

 

 

 

 

 

 

261

 

Environmental reserves, net

 

 

1,800

 

 

 

600

 

 

 

2,300

 

 

 

1,300

 

Adjusted operating income (loss)

 

$

19,027

 

 

$

23,618

 

 

$

39,329

 

 

$

49,449

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA reconciliation:

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss)

 

$

10,605

 

 

$

15,831

 

 

$

23,581

 

 

$

33,168

 

Income tax expense (benefit)

 

 

3,747

 

 

 

5,575

 

 

 

8,082

 

 

 

11,496

 

Interest expense, net

 

 

1,790

 

 

 

1,211

 

 

 

3,436

 

 

 

2,358

 

Operating income (loss)

 

 

16,142

 

 

 

22,617

 

 

 

35,099

 

 

 

47,022

 

Depreciation and amortization

 

 

5,677

 

 

 

5,242

 

 

 

11,295

 

 

 

10,441

 

Executive severance costs

 

 

699

 

 

 

 

 

 

699

 

 

 

 

Restructuring expenses and other adjustments

 

 

275

 

 

 

 

 

 

885

 

 

 

390

 

Acquisition and integration costs

 

 

111

 

 

 

401

 

 

 

346

 

 

 

476

 

Loss on sale of assets

 

 

 

 

 

 

 

 

 

 

 

261

 

Environmental reserves, net

 

 

1,800

 

 

 

600

 

 

 

2,300

 

 

 

1,300

 

Adjusted EBITDA

 

$

24,704

 

 

$

28,860

 

 

$

50,624

 

 

$

59,890

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Free cash flow reconciliation:

 

 

 

 

 

 

 

 

 

 

 

 

Net cash provided by (used for) operating activities

 

$

22,852

 

 

$

27,007

 

 

$

48,638

 

 

$

34,299

 

Capital expenditures

 

 

(6,125

)

 

 

(5,883

)

 

 

(15,216

)

 

 

(10,943

)

Free cash flow

 

$

16,727

 

 

$

21,124

 

 

$

33,422

 

 

$

23,356

 

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 June 30,

 

 

Six Months Ended June 30,

 

 

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

 

Adjusted net income (loss) reconciliation:

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss)

 

$

10,605

 

 

$

15,831

 

 

$

23,581

 

 

$

33,168

 

 

Income tax expense (benefit)

 

 

3,747

 

 

 

5,575

 

 

 

8,082

 

 

 

11,496

 

 

Income (loss) before income taxes

 

 

14,352

 

 

 

21,406

 

 

 

31,663

 

 

 

44,664

 

 

Executive severance costs

 

 

699

 

 

 

 

 

 

699

 

 

 

 

 

Restructuring expenses and other adjustments

 

 

275

 

 

 

 

 

 

885

 

 

 

390

 

 

Acquisition and integration costs

 

 

111

 

 

 

401

 

 

 

346

 

 

 

476

 

 

Loss on sale of assets

 

 

 

 

 

 

 

 

 

 

 

261

 

 

Environmental reserves, net

 

 

1,800

 

 

 

600

 

 

 

2,300

 

 

 

1,300

 

 

Adjusted income (loss) before income taxes

 

 

17,237

 

 

 

22,407

 

 

 

35,893

 

 

 

47,091

 

 

Income tax expense, as adjusted (1)

 

 

(4,309

)

 

 

(5,826

)

 

 

(8,973

)

 

 

(12,244

)

 

Adjusted net income (loss)

 

$

12,928

 

 

$

16,581

 

 

$

26,920

 

 

$

34,847

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted earnings per diluted share reconciliation:

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss) per common diluted share

 

$

0.29

 

 

$

0.43

 

 

$

0.64

 

 

$

0.91

 

 

Executive severance costs

 

 

0.02

 

 

 

 

 

 

0.02

 

 

 

 

 

Restructuring expenses and other adjustments

 

 

0.00

 

 

 

 

 

 

0.02

 

 

 

0.01

 

 

Acquisition and integration costs

 

 

0.00

 

 

 

0.01

 

 

 

0.01

 

 

 

0.01

 

 

Loss on sale of assets

 

 

 

 

 

 

 

 

 

 

 

0.01

 

 

Environmental reserves, net

 

 

0.05

 

 

 

0.02

 

 

 

0.06

 

 

 

0.04

 

 

Adjusted effective income tax rate impact

 

 

(0.01

)

 

 

(0.01

)

 

 

(0.02

)

 

 

(0.03

)

 

Adjusted earnings per diluted share(2)

 

$

0.35

 

 

$

0.45

 

 

$

0.73

 

 

$

0.95

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(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

$

1.41

 

 

$

1.73

 

Add: Executive severance costs

 

0.02

 

 

 

0.02

 

Add: Net restructuring expenses and other adjustments

 

0.10

 

 

 

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)

$

1.55

 

 

$

1.85

 

 

 

 

 

 

 

(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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