Myers Industries has announced results for the fourth quarter and year ended Dec. 31, 2016.
Income per diluted share from continuing operations was a loss of 4 cents, compared to $0.00 for the fourth quarter of 2015 and 5 cents, compared to 45 cents for the full year of 2015. Adjusted income per diluted share from continuing operations was $0.00, compared to 6 cents for the fourth quarter of 2015 and 44 cents, compared to 57 cents for the full year of 2015.
Fourth-quarter and full-year 2016 net sales declined 6.6 percent and 7.2 percent, respectively; primarily the result of a reduced capital spending environment in several key customer end markets, the company says.
President and CEO Dave Banyard commented, “Fourth-quarter results were in line with our expectations as we faced the continued impact of a reduced capital spending environment that persisted across many industrial markets for most of 2016. Demand in agriculture markets has been notably weak with record sales declines in some channels over the previous two years. Some of our most strategic products sell into these customers. While we are disappointed with our sales performance during the year, we managed costs well and made tangible improvements in the management of working capital and capital spending, both of which will continue to be part of our strengths moving forward.
“This past year was a transition period for Myers Industries,” added Banyard. “We enter 2017 with a strong enterprise strategy focused on delivering safety and efficiency solutions to our customers. We have established a solid foundation of operating principles within our strategy that focus on niche markets, flexible operations and strong cash flow. Instilling a culture of ownership within our team will drive execution of the strategy and help deliver strong results in the future.”
Fiscal Year 2017 Outlook
For fiscal year 2017, the company anticipates that total revenue will be flat on a constant currency basis. It also expects capital expenditures to be in the range of $10 to $12 million, net interest expense to be between $8 and $9 million, depreciation and amortization of $32 to $34 million, and an effective tax rate of approximately 36 percent.
Strategic Update
The company also disclosed details regarding its enterprise strategy and long-term financial performance targets. Myers Industries’ enterprise strategy is centered on three key elements:
- Niche market focus
- Flexible operations
- Strong cash flow growth
Management believes that using this business model and building a culture focused on safety and efficiency wherein employees think and act like owners will drive above average shareholder returns over the long term.
Banyard commented, “We believe we have an excellent platform to build upon our expertise providing solutions in safety and efficiency for a variety of niche applications in industrial end-markets. During the past year, our management team completed market research analyses on each of our key end-markets. Once that initial step was complete, we began implementing lean initiatives to immediately improve operational performance while simultaneously enhancing talent and resources around important functions that will help us unlock the long-term potential we’ve identified. We now have market leaders and cross functional teams dedicated to niche opportunities across our two operating segments, and we are investing in systems and pricing tools that will help our teams utilize data more effectively to drive results.
“We’ve already made several important structural changes to the business, including solid working capital improvements in each business and a 15 percent reduction in corporate headcount during the fourth quarter of 2016. In 2017, we’ll continue to identify opportunities to improve our organizational structure and operational efficiency. Specifically, we will begin a consolidation of our manufacturing footprint in Material Handling that we expect to complete by year-end, and we will also be evaluating potential new sourcing partnerships as we seek a more flexible operating model. This strategic initiative will cost approximately $10 million in 2017 and we expect to save approximately the same amount on an annualized basis once the project is completed. We believe these efforts, combined with our focus on driving sales in niche markets, as well as our commitment to disciplined cash return metrics will help us deliver compelling long-term value to shareholders.”
