8-K
MYERS INDUSTRIES INC (MYE)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of report (Date of earliest event reported): October 27, 2022
Myers Industries, Inc.
(Exact Name of Registrant as Specified in Charter)
| Ohio | 001-8524 | 34-0778636 |
|---|---|---|
| (State or Other Jurisdiction<br><br>of Incorporation) | (Commission<br><br>File Number) | (I.R.S. Employer<br><br>Identification No.) |
1293 South Main Street, Akron, Ohio 44301
(Address of Principal Executive Offices, and Zip Code)
(330) 253-5592
Registrant’s Telephone Number, Including Area Code
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ☐ | Written communication pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
|---|---|
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| --- | --- |
| ☐ | Pre-commencement communication pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| --- | --- |
| ☐ | Pre-commencement communication pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
| --- | --- |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol | Name of each exchange on which registered |
|---|---|---|
| Common Stock, without par value | MYE | The New York Stock Exchange |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02 Results of Operations and Financial Condition.
On October 27, 2022, Myers Industries, Inc. (the “Company”) issued a press release announcing earnings results for the third quarter ended September 30, 2022. The full text of the press release issued in connection with the announcement is attached as Exhibit 99.1 to this Current Report on Form 8-K. In addition, a copy of the presentation which will be discussed during the Company’s earnings conference call at 8:30 a.m. Eastern Time on October 27, 2022, is available on the Investor Relations section of the Company’s website at www.myersindustries.com. Information about the Company’s earnings conference call can be found in the press release attached as Exhibit 99.1 to this Current Report on Form 8-K.
Pursuant to General Instruction B.2 of Current Report on Form 8-K, the information in this Item 2.02 and Exhibit 99.1 is being furnished and shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liability of that section. Furthermore, the information in this Item 2.02 and Exhibit 99.1 shall not be deemed to be incorporated by reference into the filings of the Company under the Securities Act of 1933, as amended (the “Securities Act”), except as may be expressly set forth by specific reference in such filing.
Item 7.01 Regulation FD Disclosure.
As described in “Item 2.02 Results of Operations and Financial Condition” above, on October 27, 2022, the Company issued a press release announcing earnings results for the third quarter ended September 30, 2022. The full text of the press release issued in connection with the announcement is attached as Exhibit 99.1 to this Current Report on Form 8-K. In addition, a copy of the presentation which will be discussed during the Company’s earnings conference call at 8:30 a.m. Eastern Time on October 27, 2022, is available on the Investor Relations section of the Company’s website at www.myersindustries.com. Information about the Company’s earnings conference call can be found in the press release attached as Exhibit 99.1 to this Current Report on Form 8-K.
Pursuant to General Instruction B.2 of Current Report on Form 8-K, the information in this Item 7.01 and Exhibit 99.1 is being furnished and shall not be deemed to be “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liability of that section. Furthermore, the information in this Item 7.01 and Exhibit 99.1 shall not be deemed to be incorporated by reference into the filings of the Company under the Securities Act, except as may be expressly set forth by specific reference in such filing.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
| Exhibit<br><br>Number | Description |
|---|---|
| 99.1 | Press Release, dated October 27, 2022 |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Myers Industries, Inc. | ||
|---|---|---|
| By: | /s/ Monica P. Vinay | |
| Monica P. Vinay | ||
| Interim Chief Financial Officer | ||
| Date: October 27, 2022 |
EX-99.1
Exhibit 99.1
Myers Industries Announces Third Consecutive Quarter of Record Results
Strong Execution Drives Record Top and Bottom Line Results
Reiterates Full Year Fiscal 2022 Revenue Outlook and Raises Earnings Outlook
October 27, 2022, Akron, Ohio - 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, 2022.
Third Quarter 2022 Financial Highlights
• Net sales increased 14% to $228.1 million, compared with $200.1 million for the third quarter of 2021
• On an organic basis, net sales increased 4% compared with the third quarter of 2021
• Earnings per diluted share increased 68% to $0.37, compared with $0.22 for the third quarter of 2021
• Adjusted earnings per diluted share increased 78% to $0.41, compared with $0.23 for the third quarter of 2021
• Adjusted EBITDA increased 57% to $27.2 million, compared with $17.3 million for the third quarter of 2021
• Cash flow provided by operations was $16.5 million and free cash flow was $9.8 million, compared with cash flow used for operations of $7.8 million and negative free cash flow of $13.8 million for the third quarter of 2021
Myers Industries' President and CEO Mike McGaugh said, "I'm pleased to report a third consecutive quarter of record performance, highlighted by solid top-line growth, consistent execution by our team, and continued year-over-year margin expansion. During the third quarter, we made further progress against our 3-horizon strategy. We saw meaningful benefits from our value-based pricing actions and sales and operations process improvements, which mitigated most of the effects of ongoing inflationary and macro-environmental headwinds. Our sustained performance over several quarters, and across a variety of economic conditions, supports our confidence that we can continue to successfully execute on our transformation across future market and economic cycles."
McGaugh continued, "Given the resilience of our business model and another quarter of record results, we are raising our earnings outlook for 2022. We are revising our adjusted EPS range from $1.40 - $1.60 to $1.50 - $1.70. Our net sales expectations remain the same, with growth in the high teens range year-over-year. We are near the successful completion of Horizon One of our strategy and our strategic work to begin execution of Horizon Two is under way. Within that next phase, we expect to broaden our focus around plastic durable goods, as well as adjacencies with competitive moats and large format products."
Third Quarter 2022 Financial Summary
| Quarter Ended September 30, | |||
|---|---|---|---|
| (Dollars in thousands, except per share data) | 2022 | 2021 | % Inc<br>(Dec) |
| Net sales | $228,065 | $200,058 | 14.0% |
| Gross profit | $71,648 | $54,198 | 32.2% |
| Gross margin | 31.4% | 27.1% | |
| Operating income | $19,897 | $11,817 | 68.4% |
| Net income: | |||
| Net income | $13,671 | $7,903 | 73.0% |
| Net income per diluted share | $0.37 | $0.22 | 68.2% |
| Adjusted operating income | $22,013 | $12,528 | 75.7% |
| Adjusted net income: | |||
| Net income | $15,018 | $8,489 | 76.9% |
| Net income per diluted share | $0.41 | $0.23 | 78.3% |
| Adjusted EBITDA | $27,172 | $17,286 | 57.2% |
Net sales were $228.1 million, an increase of $28.0 million, or 14.0%, compared with $200.1 million for the third quarter of 2021, driven by sales increases in both the Material Handling and Distribution segments. Excluding the incremental $19.4 million of net sales from the Trilogy Plastics and Mohawk Rubber acquisitions, organic net sales increased 4.3%. Favorable pricing of 11% was partially offset by a decrease in volume/mix of 6%.
Gross profit increased $17.5 million, or 32.2% to $71.6 million, primarily due to the increased contribution from pricing actions and the Mohawk Rubber and Trilogy Plastics acquisitions, partially offset by a change in sales mix and lower volume. Gross margin was 31.4% compared with 27.1% for the third quarter of 2021. Selling, general and administrative expenses increased $9.2 million, or 21.7% to $51.8 million due to cost inflation, the Mohawk Rubber and Trilogy Plastics acquisitions, higher salaries, commissions and incentive compensation costs and a charge for estimated environmental liabilities. SG&A as a percentage of sales increased to 22.7%, compared with 21.3% in the same period last year. Net income per diluted share was $0.37, compared with $0.22 for the third quarter of 2021. Adjusted earnings per diluted share were $0.41, compared with $0.23 for the third quarter of 2021.
Third Quarter 2022 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 2022 Results | $155.7 | $24.0 | $24.2 | 15.6% |
| Q3 2021 Results | $149.7 | $15.1 | $15.2 | 10.2% |
| Increase (decrease) vs prior year | 4.0% | 59.0% | 58.9% | +540 bps |
Net sales for the Material Handling Segment were $155.7 million, an increase of $6.0 million, or 4.0%, compared with $149.7 million for the third quarter of 2021. Excluding the incremental $2.9 million of net sales from the Trilogy Plastics acquisition, organic net sales increased 2.1%. Organic net sales increases in the food and beverage and industrial markets were partially offset by lower sales in the consumer and recreational vehicle markets. Operating income increased 59.0% to $24.0 million, compared with $15.1 million in 2021. Adjusted operating income increased 58.9% to $24.2 million, compared with $15.2 million in 2021. Contributions from pricing actions more than offset a change in sales mix and lower volume. Additionally, SG&A expenses were higher year-over-year. The increase in SG&A expenses was primarily due to cost inflation, the Trilogy Plastics acquisition, higher salaries, incentive compensation costs and variable selling expenses. The Material Handling Segment’s adjusted operating income margin increased 540 basis points to 15.6%, compared with 10.2% for the third quarter of 2021.
Distribution
| Net Sales | Op Income | Adj Op Income | Adj Op Income Margin | |
|---|---|---|---|---|
| Q3 2022 Results | $72.4 | $4.9 | $5.2 | 7.1% |
| Q3 2021 Results | $50.4 | $4.4 | $4.4 | 8.7% |
| Increase vs prior year | 43.6% | 11.9% | 18.1% | -160 bps |
Net sales for the Distribution Segment were $72.4 million, an increase of $22.0 million, or 43.6%, compared with $50.4 million for the third quarter of 2021. Excluding the incremental $16.6 million of net sales from the Mohawk Rubber acquisition, organic net sales increased 10.8%. Operating income increased 11.9% to $4.9 million, compared with $4.4 million in 2021. The contribution from higher pricing and increased volume was partially offset by an increase in product costs and higher SG&A expenses year-over-year. The increase in SG&A expenses was primarily the result of cost inflation, the Mohawk Rubber acquisition and higher variable selling and incentive compensation costs. The Distribution Segment’s adjusted operating income margin was 7.1%, compared with 8.7% for the third quarter of 2021.
Balance Sheet & Cash Flow
As of September 30, 2022, the Company’s cash on hand totaled $20.4 million. Total debt as of September 30, 2022 was $107.5 million.
For the third quarter of 2022, cash flow provided by operations was $16.5 million and free cash flow was $9.8 million, compared with cash flow used for operations of $7.8 million and negative free cash flow of $13.8 million for the third quarter of 2021. The increase in cash flow was driven primarily by higher earnings. Capital expenditures for the third quarter of 2022 were $6.7 million, compared with $6.0 million for the third quarter of 2021.
2022 Outlook
Based on current exchange rates, market outlook, and business forecast, the Company updated its outlook for fiscal 2022, and currently forecasts:
• Net sales growth in the high teens range with approximately 45% of the increase due to the acquisitions of Trilogy Plastics and Mohawk Rubber
• Diluted EPS in the range of $1.39 to $1.59; adjusted diluted EPS in the range of $1.50 to $1.70
• Capital expenditures to be in the range of $25 to $28 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 Tuesday, October 27, 2022, 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://netroadshow.com/events/login?show=8517ab78&confid=43045. Upon registering, each participant will receive access details 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, (Canada) 1-226-828-7578 or (all other locations) +44-204-525-0658. The Access Code is 834780.
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 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 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 “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, 2021 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.
Contact: Monica Vinay, Interim CFO and Vice President, Investor Relations & Treasurer, (330) 761-6212
M-INV
Source: Myers Industries, Inc.
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, 2022 | September 30, 2021 | September 30, 2022 | September 30, 2021 | |||||||||
| Net sales | $ | 228,065 | $ | 200,058 | $ | 686,707 | $ | 561,856 | ||||
| Cost of sales | 156,417 | 145,860 | 468,415 | 402,251 | ||||||||
| Gross profit | 71,648 | 54,198 | 218,292 | 159,605 | ||||||||
| Selling, general and administrative expenses | 51,756 | 42,531 | 152,066 | 122,200 | ||||||||
| (Gain) loss on disposal of fixed assets | (5 | ) | (150 | ) | (693 | ) | (1,146 | ) | ||||
| Operating income (loss) | 19,897 | 11,817 | 66,919 | 38,551 | ||||||||
| Interest expense, net | 1,719 | 1,056 | 4,077 | 3,050 | ||||||||
| Income (loss) before income taxes | 18,178 | 10,761 | 62,842 | 35,501 | ||||||||
| Income tax expense (benefit) | 4,507 | 2,858 | 16,003 | 9,218 | ||||||||
| Net income (loss) | $ | 13,671 | $ | 7,903 | $ | 46,839 | $ | 26,283 | ||||
| Net income (loss) per common share: | ||||||||||||
| Basic | $ | 0.37 | $ | 0.22 | $ | 1.29 | $ | 0.73 | ||||
| Diluted | $ | 0.37 | $ | 0.22 | $ | 1.28 | $ | 0.72 | ||||
| Weighted average common shares outstanding: | ||||||||||||
| Basic | 36,472,378 | 36,195,560 | 36,383,398 | 36,103,894 | ||||||||
| Diluted | 36,717,153 | 36,402,276 | 36,678,955 | 36,328,765 |
MYERS INDUSTRIES, INC.
SALES AND EARNINGS BY SEGMENT (UNAUDITED)
(Dollars in thousands)
| Quarter Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2022 | 2021 | % Change | 2022 | 2021 | % Change | |||||||||||||
| Net sales | ||||||||||||||||||
| Material Handling | $ | 155,658 | $ | 149,664 | 4.0 | % | $ | 505,384 | $ | 416,784 | 21.3 | % | ||||||
| Distribution | 72,416 | 50,413 | 43.6 | % | $ | 181,352 | $ | 145,119 | 25.0 | % | ||||||||
| Inter-company Sales | (9 | ) | (19 | ) | - | $ | (29 | ) | $ | (47 | ) | - | ||||||
| Total | $ | 228,065 | $ | 200,058 | 14.0 | % | $ | 686,707 | $ | 561,856 | 22.2 | % | ||||||
| Operating income (loss) | ||||||||||||||||||
| Material Handling | $ | 23,962 | $ | 15,066 | 59.0 | % | $ | 83,216 | $ | 49,895 | 66.8 | % | ||||||
| Distribution | 4,899 | 4,377 | 11.9 | % | 12,469 | 10,029 | 24.3 | % | ||||||||||
| Corporate | (8,964 | ) | (7,626 | ) | - | (28,766 | ) | (21,373 | ) | - | ||||||||
| Total | $ | 19,897 | $ | 11,817 | 68.4 | % | $ | 66,919 | $ | 38,551 | 73.6 | % | ||||||
| Adjusted operating income (loss) | ||||||||||||||||||
| Material Handling | $ | 24,222 | $ | 15,242 | 58.9 | % | $ | 84,127 | $ | 49,178 | 71.1 | % | ||||||
| Distribution | 5,170 | 4,377 | 18.1 | % | 12,740 | 10,556 | 20.7 | % | ||||||||||
| Corporate | (7,379 | ) | (7,091 | ) | - | (25,405 | ) | (20,253 | ) | - | ||||||||
| Total | $ | 22,013 | $ | 12,528 | 75.7 | % | $ | 71,462 | $ | 39,481 | 81.0 | % | ||||||
| Adjusted operating income margin | ||||||||||||||||||
| Material Handling | 15.6 | % | 10.2 | % | 16.6 | % | 11.8 | % | ||||||||||
| Distribution | 7.1 | % | 8.7 | % | 7.0 | % | 7.3 | % | ||||||||||
| Corporate | n/a | n/a | n/a | n/a | ||||||||||||||
| Total | 9.7 | % | 6.3 | % | 10.4 | % | 7.0 | % | ||||||||||
| Adjusted EBITDA | ||||||||||||||||||
| Material Handling | $ | 28,437 | $ | 19,379 | 46.7 | % | $ | 97,366 | $ | 62,552 | 55.7 | % | ||||||
| Distribution | 6,021 | 4,900 | 22.9 | % | 14,769 | 12,169 | 21.4 | % | ||||||||||
| Corporate | (7,286 | ) | (6,993 | ) | - | (25,073 | ) | (19,952 | ) | - | ||||||||
| Total | $ | 27,172 | $ | 17,286 | 57.2 | % | $ | 87,062 | $ | 54,769 | 59.0 | % | ||||||
| Adjusted EBITDA margin | ||||||||||||||||||
| Material Handling | 18.3 | % | 12.9 | % | 19.3 | % | 15.0 | % | ||||||||||
| Distribution | 8.3 | % | 9.7 | % | 8.1 | % | 8.4 | % | ||||||||||
| Corporate | n/a | n/a | n/a | n/a | ||||||||||||||
| Total | 11.9 | % | 8.6 | % | 12.7 | % | 9.7 | % |
MYERS INDUSTRIES, INC.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
GROSS PROFIT, OPERATING INCOME AND EBITDA (UNAUDITED)
(Dollars in thousands)
| Distribution | Segment Total | Corporate & Other | Total | |||||||||||
| Net sales | 155,658 | $ | 72,416 | $ | 228,074 | $ | (9 | ) | $ | 228,065 | ||||
| Gross profit | 71,648 | |||||||||||||
| Add: Restructuring expenses and other adjustments | 260 | |||||||||||||
| Adjusted gross profit | 71,908 | |||||||||||||
| Gross margin | 31.5 | % | ||||||||||||
| Operating income (loss) | 23,962 | 4,899 | 28,861 | (8,964 | ) | 19,897 | ||||||||
| Add: Acquisition and integration costs | — | 271 | 271 | 85 | 356 | |||||||||
| Add: Restructuring expenses and other adjustments | 260 | — | 260 | — | 260 | |||||||||
| Add: Environmental charges | — | — | — | 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 | ||||||||||||||
| 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 | |||||||||||||
| Add: Acquisition and integration costs | 31 | |||||||||||||
| Adjusted gross profit | 54,374 | |||||||||||||
| Gross margin as adjusted | 27.2 | % | ||||||||||||
| Operating income (loss) | 15,066 | 4,377 | 19,443 | (7,626 | ) | 11,817 | ||||||||
| Add: Restructuring expenses and other adjustments | 145 | — | 145 | — | 145 | |||||||||
| Add: Acquisition and integration costs | 31 | — | 31 | 535 | 566 | |||||||||
| 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 |
All values are in US Dollars.
MYERS INDUSTRIES, INC.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
GROSS PROFIT, OPERATING INCOME AND EBITDA (UNAUDITED)
(Dollars in thousands)
| Distribution | Segment Total | Corporate & Other | Total | |||||||||||
| Net sales | 505,384 | $ | 181,352 | $ | 686,736 | $ | (29 | ) | $ | 686,707 | ||||
| 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 | ||||||||
| Add: Acquisition and integration costs | — | 271 | 271 | 561 | 832 | |||||||||
| Add: Restructuring expenses and other adjustments | 650 | — | 650 | — | 650 | |||||||||
| Add: Loss on sale of assets | 261 | — | 261 | — | 261 | |||||||||
| Add: Environmental charges | — | — | — | 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 | ||||||||||||||
| 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 | |||||||||||||
| Add: Acquisition and integration costs | 31 | |||||||||||||
| Adjusted gross profit | 159,883 | |||||||||||||
| 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: Restructuring expenses and other adjustments | 247 | — | 247 | — | 247 | |||||||||
| Add: Acquisition and integration costs | 31 | — | 31 | 802 | 833 | |||||||||
| 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 |
All values are in US Dollars.
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, | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2022 | 2021 | 2022 | 2021 | |||||||||
| Operating income (loss) | $ | 19,897 | $ | 11,817 | $ | 66,919 | $ | 38,551 | ||||
| Add: Severance costs | — | — | — | 845 | ||||||||
| Add: Restructuring expenses and other adjustments | 260 | 145 | 650 | 247 | ||||||||
| Add: Acquisition and integration costs | 356 | 566 | 832 | 833 | ||||||||
| Add: Loss on sale of assets | — | — | 261 | — | ||||||||
| Less: Gain on sale of assets | — | — | — | (995 | ) | |||||||
| Add: Environmental charges | 1,500 | — | 2,800 | — | ||||||||
| Adjusted operating income (loss) | 22,013 | 12,528 | 71,462 | 39,481 | ||||||||
| Less: Interest expense, net | (1,719 | ) | (1,056 | ) | (4,077 | ) | (3,050 | ) | ||||
| Adjusted income (loss) before taxes | 20,294 | 11,472 | 67,385 | 36,431 | ||||||||
| Less: Income tax expense(1) | (5,276 | ) | (2,983 | ) | (17,520 | ) | (9,472 | ) | ||||
| Adjusted net income (loss) | $ | 15,018 | $ | 8,489 | $ | 49,865 | $ | 26,959 | ||||
| Adjusted earnings per diluted share(2) | $ | 0.41 | $ | 0.23 | $ | 1.36 | $ | 0.74 | ||||
| (1) Income taxes are calculated using the normalized effective tax rate for each year. The rate used in 2022 and 2021 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, 2022 | December 31, 2021 | |||
|---|---|---|---|---|
| Assets | ||||
| Current Assets | ||||
| Cash | $ | 20,424 | $ | 17,655 |
| Accounts receivable, net | 128,839 | 100,691 | ||
| Income tax receivable | — | 2,517 | ||
| Inventories, net | 108,158 | 93,551 | ||
| Prepaid expenses and other current assets | 10,491 | 5,500 | ||
| Total Current Assets | 267,912 | 219,914 | ||
| Property, plant, & equipment, net | 97,898 | 92,049 | ||
| Right of use asset - operating leases | 29,809 | 29,285 | ||
| Deferred income taxes | 105 | 106 | ||
| Other assets | 154,000 | 143,195 | ||
| Total Assets | $ | 549,724 | $ | 484,549 |
| Liabilities & Shareholders' Equity | ||||
| Current Liabilities | ||||
| Accounts payable | $ | 97,131 | $ | 81,690 |
| Accrued expenses | 49,528 | 44,969 | ||
| Operating lease liability - short-term | 6,155 | 5,341 | ||
| Finance lease liability - short-term | 513 | 500 | ||
| Total Current Liabilities | 153,327 | 132,500 | ||
| Long-term debt | 97,961 | 90,945 | ||
| Operating lease liability - long-term | 23,666 | 23,815 | ||
| Finance lease liability - long-term | 9,050 | 9,437 | ||
| Other liabilities | 13,691 | 13,086 | ||
| Deferred income taxes | 7,052 | 5,441 | ||
| Total Shareholders' Equity | 244,977 | 209,325 | ||
| Total Liabilities & Shareholders' Equity | $ | 549,724 | $ | 484,549 |
MYERS INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(Dollars in thousands)
| Nine Months Ended September 30, | ||||||
|---|---|---|---|---|---|---|
| 2022 | 2021 | |||||
| Cash Flows From Operating Activities | ||||||
| Net income | $ | 46,839 | $ | 26,283 | ||
| Adjustments to reconcile net income to net cash<br> provided by (used for) operating activities | ||||||
| Depreciation and amortization | 15,963 | 15,631 | ||||
| Non-cash stock-based compensation expense | 5,168 | 2,601 | ||||
| Gain on disposal of fixed assets | (693 | ) | (1,146 | ) | ||
| Other | 292 | (2,096 | ) | |||
| Cash flows provided by (used for) working capital | ||||||
| Accounts receivable | (18,751 | ) | (29,528 | ) | ||
| Inventories | (7,016 | ) | (21,827 | ) | ||
| Prepaid expenses and other current assets | (4,912 | ) | (2,378 | ) | ||
| Accounts payable and accrued expenses | 13,869 | 26,004 | ||||
| Net cash provided by (used for) operating activities | 50,759 | 13,544 | ||||
| Cash Flows From Investing Activities | ||||||
| Capital expenditures | (17,615 | ) | (14,264 | ) | ||
| Acquisition of business, net of cash acquired | (24,253 | ) | (35,473 | ) | ||
| Proceeds from sale of property, plant, and equipment | 1,525 | 3,051 | ||||
| Net cash provided by (used for) investing activities | (40,343 | ) | (46,686 | ) | ||
| Cash Flows From Financing Activities | ||||||
| Net borrowings from revolving credit facility | 7,000 | 73,400 | ||||
| Repayments of long-term debt | — | (40,000 | ) | |||
| Payments on finance lease | (374 | ) | (281 | ) | ||
| Cash dividends paid | (14,872 | ) | (14,701 | ) | ||
| Proceeds from issuance of common stock | 2,059 | 3,235 | ||||
| Shares withheld for employee taxes on equity awards | (450 | ) | (853 | ) | ||
| Deferred financing fees | (718 | ) | (1,095 | ) | ||
| Net cash provided by (used for) financing activities | (7,355 | ) | 19,705 | |||
| Foreign exchange rate effect on cash | (292 | ) | (35 | ) | ||
| Net increase (decrease) in cash | 2,769 | (13,472 | ) | |||
| Cash at January 1 | 17,655 | 28,301 | ||||
| Cash at September 30 | $ | 20,424 | $ | 14,829 |
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 | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| September 30, 2022 | September 30, 2021 | ||||||||||
| Net cash provided by (used for) operating activities | $ | 50,759 | $ | 13,544 | |||||||
| Capital expenditures | (17,615 | ) | (14,264 | ) | |||||||
| Free cash flow | $ | 33,144 | $ | (720 | ) | ||||||
| YTD | YTD | Quarter | |||||||||
| September 30, 2022 | June 30, 2022 | September 30, 2022 | |||||||||
| Net cash provided by (used for) operating activities | $ | 50,759 | - | $ | 34,299 | = | $ | 16,460 | |||
| Capital expenditures | (17,615 | ) | - | (10,943 | ) | = | (6,672 | ) | |||
| Free cash flow | $ | 33,144 | - | $ | 23,356 | = | $ | 9,788 | |||
| 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 | ) |
MYERS INDUSTRIES, INC.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
ADJUSTED DILUTED EARNINGS PER SHARE
(UNAUDITED)
| Full Year 2022 Guidance | ||||
|---|---|---|---|---|
| Low | High | |||
| GAAP diluted net income per common share | $ | 1.39 | $ | 1.59 |
| Add: Net restructuring expenses and other adjustments | 0.03 | 0.03 | ||
| Add: Acquisition and integration costs | 0.02 | 0.02 | ||
| Add: Environmental charges | 0.06 | 0.06 | ||
| Adjusted diluted earnings per share | $ | 1.50 | $ | 1.70 |