Myers Industries, a manufacturer of polymer products for industrial, agricultural, automotive, commercial and consumer markets, has reported its results for the first quarter ended March 31, 2019.
Net sales decreased $13.5 million or 8.8% (8.4% excluding currency fluctuation) to $139.1 million, compared to the first quarter of 2018. Myers said the decrease was primarily the result of a sales decline in the Material Handling Segment. Gross profit decreased $1.6 million to $45.6 million, compared to the first quarter of 2018. Adjusted income per diluted share from continuing operations was 23 cents, compared to 24 cents for the first quarter of 2018.
“Our first-quarter financial performance was in line with our expectations as we continued to improve our operations and margins. We continued to execute our Distribution Segment transformation and delivered sales growth for the second consecutive quarter, despite one less selling day compared to the first quarter of 2018. Net sales in our Material Handling Segment decreased due to more normalized seed-box demand and continued decline in the Recreational Vehicle (RV) market. Despite this, we expanded our enterprise gross profit margin by 180 bps to 32.7% and adjusted operating income by 6.2%, demonstrating the impact of our continuous improvement operating model,” said Dave Banyard, president and CEO of Myers Industries.
Segment Results
Net sales in the Material Handling Segment for the first quarter of 2019 decreased $13.9 million or 11.9% (11.4% excluding currency fluctuation) compared to the first quarter of 2018. The decrease in net sales was primarily due to sales declines in the company’s food & beverage (unusually high seed-box demand in first quarter 2018) and vehicle (declining RV sales) end markets. Segment adjusted EBITDA declined 0.7% to $22.8 million for the first quarter, compared to $23 million for the first quarter of 2018. Favorable price-cost margin and productivity savings mostly offset the impact of the lower sales volume and unfavorable sales mix.
Net sales in the Distribution Segment for the first quarter of 2019 increased $0.4 million or 1.1% compared to the first quarter of 2018. The segment’s adjusted EBITDA was flat compared to the first quarter of 2018. The company also continued to execute its transformation plan, which includes enhancements in its go-to-market strategy, the implementation of 80/20 to drive improved contribution margins, and optimization of its logistics and overhead costs, with a goal to expand Distribution Segment EBITDA margin to 10% by the end of 2020.
2019 Outlook
For fiscal year 2019, Myers said it anticipates total revenue will be flat on a constant-currency basis compared to the prior year. Anticipated sales increases in the consumer, industrial and automotive aftermarket end markets are expected to be offset by sales decreases in the food & beverage and vehicle end markets due to more normalized seed-box demand and a continued decline in the RV market following years of steady growth.
The company said it anticipates a favorable sales mix, combined with an ongoing focus on executing pricing and continuous-improvement actions, leading to adjusted operating-margin growth in 2019. Myers expects depreciation and amortization to be approximately $25 million, net interest expense to be approximately $5 million and the effective tax rate to be approximately 27%. GAAP income per diluted share from continuing operations is estimated to be between 70 and 80 cents and adjusted income per diluted share from continuing operations is estimated to be between 75 and 85 cents, based on a fully diluted share count of 36 million shares. Capital expenditures are anticipated to be approximately $10 million.
