Myers Industries posts Q4 net income of US$5.9M versus net loss of US$50.5M last year on significantly reduced special pre-tax costs, net sales up 3.8% to US$195.4M due to new product, customer sales, improved pricing
March 1, 2012
– --EPS $0.18 compared with a loss of $1.43 in 4Q 2010
--Adjusted EPS $0.19 compared with $0.12 in 4Q 2010
--Gross margin increased to 28.0% versus 23.5% for 4Q 2010
--Full Year Adjusted EPS increased to $0.67 from $0.37 in 2010
--2011 returned cash to shareholders - $21 million share repurchase & 8% dividend increase
Myers Industries, Inc. MYE -0.38% today announced results for the fourth quarter and full year ended December 31, 2011.
Net sales for the fourth quarter were $195.4 million compared to $188.2 million in the fourth quarter of 2010. The increase of 3.8% was primarily driven by sales generated by new product and customer sales and improved pricing. The gross margin increased to 28.0% in the fourth quarter compared to 23.5% in the same quarter of 2010. The Company's focus on operations excellence and a favorable mix of higher margin new products contributed to the increase.
Net income in the fourth quarter of 2011 was $5.9 million or $0.18 per share compared to a net loss in the fourth quarter of 2010 of $50.5 million or $1.43 per share. Net income in the fourth quarter of 2011 included approximately $1.4 million of special pre-tax costs while net income in the fourth quarter of 2010 included $69.0 million of special pre-tax costs. Details regarding the special pre-tax costs for both quarters are provided on the Reconciliation of Non-GAAP Financial Measures included in this release. Adjusting for these special items, earnings per share was $0.19 in the fourth quarter of 2011 compared to $0.12 in the fourth quarter of 2010.
"Our fourth quarter demonstrates the results of our efforts to create value through a focus on our innovation and operations excellence initiatives that we began in 2010," said President and Chief Executive Officer John C. Orr. "The new products and solutions that we are delivering generated a good portion of our sales increase in the quarter while the productivity improvements that we have made contributed to the expansion in our gross margin."
Net sales increased 2.4% for the full year of 2011 to $755.7 million compared to $737.6 million in 2010. The gross margin expanded to 26.2% in the full year of 2011 from 22.3% in 2010.
Net income for the full year was $24.5 million or $0.71 per share compared to a net loss in 2010 of $42.8 million or $1.21 per share. Net income in 2011 included approximately $4.6 million of special pre-tax costs while net income in 2010 included $71.3 million of special pre-tax costs. Details regarding the special pre-tax costs for both years are provided on the Reconciliation of Non-GAAP Financial Measures included in this release. Adjusting for these special items, earnings per share was $0.67 in 2011 as compared to $0.37 in 2010.
"Our results and actions in 2011 reflect our strong commitment to driving value for our customers and our shareholders," said Orr. "Despite the challenges of an uncertain economy and higher raw material costs throughout most of the year, we delivered improved operating results. Additionally, we once again generated strong cash flow, which was returned in part to our shareholders through the $21 million repurchase of shares which amounted to 5.7% of the Company's outstanding stock. The work we began in 2010 on innovation and profit improvement is paying off and positions us well for the future. We will also continue to be focused on returning cash to shareholders through dividends and timely share repurchases."
The results below are as adjusted and exclude special pre-tax costs as detailed on the Reconciliation of Non-GAAP Financial Measures included in this release.
The Material Handling Segment's net sales in the fourth quarter decreased 13% to $57 million compared to $65.5 million in 2010. An $8.2 million lease sale occurred in 2010 and did not repeat in 2011, accounting for the majority of the decline in sales. Material Handling's income before taxes was $6.6 million in the fourth quarter of 2011 compared to $6.9 million in 2010. Lower manufacturing costs resulting from the Company's operations excellence initiatives as well as a favorable customer and product mix helped to offset the lost margin on lower sales.
Net sales in the Material Handling Segment increased 1.6% to $261.8 million in 2011 compared to $257.8 million in 2010. Sales driven by pricing to offset higher raw material costs and a strong demand in the agricultural, industrial, manufacturing and automotive markets more than offset $37.6 million in lower margin custom pallet sales that occurred in 2010 and not in 2011. Material Handling's income before taxes in 2011 was $34.1 million compared to $23.3 million in 2010. Increased sales volume, an unusually favorable customer mix, lower manufacturing costs and higher prices, which offset increased raw material costs, drove higher gross margins throughout the year.
The Lawn & Garden Segment's net sales in the fourth quarter increased 9.5% to $65.1 million as compared to $59.5 million in the fourth quarter of 2010. Lawn & Garden's income before taxes was $3.7 million compared to $0.8 million in the fourth quarter of 2010. The segment was able to generate an increase in both sales and income before taxes as a result of the continued successful implementation and execution of the operations turnaround plan put into place in the second half of 2010.
Net sales in the Lawn and Garden Segment in 2011 were $217.1 million, a decrease of 3.0% compared to net sales of $223.8 million in 2010. The decrease in net sales was primarily due to lower sales volumes reflecting the prolonged effect of a weak 2011 spring season resulting from poor weather conditions. The lower sales volumes were partially offset by favorable pricing actions taken to offset higher raw material costs. Lawn & Garden's income before taxes in 2011 was $4.6 million compared to a loss of $2.2 million in 2010. Through the execution of the turnaround plan put into place in 2010, the segment was able to offset the margin lost from lower sales volumes as well as improve operating results by $6.8 million year-over-year.
The Distribution Segment's net sales were $47.2 million in the fourth quarter compared to $46.3 million in the fourth quarter of 2010, an increase of 2.1%. Continued increases in new product and customer sales and services resulting from the Company's growth and innovation initiative more than offset lower unit volumes arising from a slowing of miles driven during the quarter. Distribution's income before taxes was $4.7 million in the fourth quarter of 2011 compared to $4.3 million in 2010. Income generated by the increase in sales was partially offset by higher than anticipated variable selling expenses.
Net sales in the Distribution Segment increased to $183.7 million in 2011 compared to $174.9 million in 2010. The increase of 5% was due mainly to the success of new product and service sales initiatives and a broader customer base. Distribution's income before taxes in 2011 was $17.0 million compared to $15.8 million in 2010. The income generated by the increased sales was partially offset by higher variable selling and distribution expenses during the year.
The Engineered Products Segment's net sales were $31.1 million in the fourth quarter compared to $22.6 million in the fourth quarter of 2010, an increase of 37.6%. Engineered Product's income before taxes was $2.9 million in the fourth quarter of 2011 compared to $1.1 million in the fourth quarter of 2010. Increased unit volumes across all businesses within the segment drove the higher sales and income in the quarter.
In the Engineered Products Segment, net sales in 2011 increased 11% to $116.2 million from $104.8 million in 2010. Strong demand in the recreational vehicle, marine and custom markets and new product sales resulting from innovation programs drove the majority of the increase. Income before taxes in the Engineered Products Segment was $11.5 million compared to $9.8 million in 2010, an increase of 17.3%. Higher sales volumes and lower manufacturing costs produced the majority of the increase.
Cash flow provided by operations for the twelve months ended December 31, 2011 was $64.2 million compared to $45.6 million in 2010. The significant cash generated in 2011 enabled the Company to increase its dividend by 8% maintaining a yield of greater than 2%, repurchase two million shares of stock and reduce debt by $9.7 million.
Other Financial Items
During the fourth quarter of 2011, the Company purchased 204,880 shares of stock, at an average price of $10.37. As of December 31, 2011, the Company purchased two million shares of stock at an average price of $10.47. Cash expenditures related to the repurchases were $2 million and $21 million for the quarter and the year, respectively.
Capital expenditures totaled $21.9 million for the twelve months ended December 31, 2011.
At December 31, 2011, debt, net of cash, was $67.2 million compared to $77.4 million at the end of the third quarter.
First Quarter and Full Year 2012 Outlook
The Company remains committed to its focus on executing its strategic principles centered on customer dedication, innovation, operations excellence, organization development and financial strength. Looking forward to 2012, the Company anticipates that the sales attained from the implementation of new products and solutions in 2011 will continue during 2012. The Company also believes that the momentum generated through increased productivity, quality and delivery performance across all of its segments provides a strong foundation for solid performance in 2012. Despite the economic uncertainties, the Company anticipates that the first quarter should continue to show the benefits of these efforts.
Conference Call Details
The Company will host an earnings conference call and webcast for investors and analysts on Thursday, February 16, 2012 at 11:00 a.m. ET. The call is anticipated to last approximately one hour and may be accessed at (877) 407-8033. Callers are asked to sign on at least five minutes in advance. The call will be available as a webcast through the Company's web site, www.myersind.com . Click on the Investor Relations tab to access the webcast. Webcast attendees will be in a listen-only mode. An archived replay of the call will also be available on the site shortly after the event. To listen to a telephone replay, callers should dial: (US) 877-660-6853 or (Int'l) 201-612-7415. The replay passcodes are: Account # 286; Conference ID # 387679.
About Myers Industries
Myers Industries, Inc. is an international manufacturer of polymer products for industrial, agricultural, automotive, commercial, and consumer markets. The Company is also the largest wholesale distributor of tools, equipment and supplies for the tire, wheel and undervehicle service industry in the U.S. The Company reported net sales from continuing operations of $755.7 million in 2011. Visit www.myersind.com to learn more.
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