Myers Industries Inc. has announced results for the third quarter ended Sept. 30, 2016.
The company reported third quarter net sales of $132.7 million, compared to $141.7 million for the third quarter of 2015. The company said this reduction in sales was primarily the result of decreased capital spending in several of the company’s key end-markets and a decline in sales of retread products in the distribution segment.
The gross profit margin decreased 230 basis points to 27.1 percent during the third quarter of 2016 due to operational inefficiencies resulting from lower sales volumes and an unfavorable product mix. Selling, general and administrative expenses were $32.9 million, compared to $39.1 million in the third quarter of 2015. Lower non-recurring compensation costs, reduced environmental expenses and other cost reductions led to the $6.2 million improvement.
President and CEO Dave Banyard commented, “Third quarter results were in line with our expectations as customers in both our Material Handling and Distribution segments continue to operate in a reduced capital spending environment. Despite lower sales, we delivered a strong quarter of free cash flow due primarily to process improvements in working capital management and a more disciplined approach to capital spending.”
Banyard continued, “We are maintaining our full-year 2016 outlook of sales declines in the mid-to-high single digits on a constant currency basis, and we expect to provide a preliminary outlook for 2017 in conjunction with our fourth-quarter results early next year. We believe that we have some meaningful opportunities to build upon an excellent product platform that provides safe and efficient solutions for a variety of niche applications and end-markets, and we are in the later stages of refining an enterprise strategy that will support these competitive strengths.”
Segment Results
Net sales in the Material Handling Segment for the third quarter of 2016 were down 2.8 percent (or 3.4 percent organic) vs. the third quarter of 2015 due primarily to declines in the food and beverage markets. The segment’s GAAP operating income was $4.4 million for the third quarter of 2016 compared to $7.4 million for the third quarter of 2015. The segment’s adjusted operating income was $4.7 million for the third quarter of 2016 compared to $8.6 million for the third quarter of 2015.
Net sales in the Distribution Segment for the third quarter of 2016 were down 13 percent versus the third quarter of 2015. The decline was primarily due to lower sales of equipment and tire retread products. The segment continues to implement its new sales model, which is designed to broaden market coverage and improve the overall sales process. The segment’s operating income was $3.3 million for the third quarter of 2016 compared to $5.6 million for the third quarter of 2015. The segment’s adjusted operating income was $3.3 million for the third quarter of 2016 compared to $5.7 million for the third quarter of 2015.
2016 Outlook
The company anticipates that total revenue will be down mid-to-high single digits on a constant currency basis for both the fourth quarter and full year of 2016 primarily due to a continued weak capital spending environment.
