Myers Industries, Inc., a manufacturer of polymer products and a distributor for the tire, wheel and under-vehicle service industry, recently announced results for the fourth quarter and full year ended December 31, 2019.

Fourth Quarter and Full Year 2019 Financial Highlights

• GAAP income per diluted share from continuing operations was $0.16 for the fourth quarter and $0.68 for the full year, compared with income of $0.09 and a loss of $0.05 (after $33.3 million of pre-tax charges related to the company’s Lawn and Garden business, which was sold in 2015), respectively, for the fourth quarter and full year of 2018.

• Adjusted income per diluted share from continuing operations was $0.12 for the fourth quarter and $0.78 for the full year, compared with $0.13 and $0.76, respectively, for the fourth quarter and full year of 2018.

• Net sales for the fourth quarter decreased 15.6% to $116.8 million, compared with $138.4 million for the fourth quarter of 2018; net sales for the full year decreased 9.0% to $515.7 million, compared with $566.7 million for the full year of 2018.

• Gross margin increased to 33.6% for the fourth quarter and 33.2% for the full year, compared with 30.4% and 31.6%, respectively for the fourth quarter and full year of 2018.

• Generated cash flow from continuing operations of $47.0 million and free cash flow of $36.7 million for the full year of 2019.

• Completed acquisition of Tuffy Manufacturing for $18 million in August 2019.

“During 2019, our team delivered improved bottom line performance and continued margin expansion, despite being challenged by a number of headwinds across our businesses and a leadership change,” said Andrean Horton, interim president and CEO of Myers Industries. “Importantly, the Distribution Segment continued to successfully execute on its transformation plan, integrated the recent Tuffy acquisition and increased sales and adjusted EBITDA margin. In our Material Handling Segment, we continued to drive margin improvement despite softness in key end markets across the business, including a shift in agricultural demand, wet weather conditions in our consumer market and a weaker vehicle market. While we expect some of these uncertainties will carry into 2020, we do see opportunity as we gain traction in some of our adjacent markets.

“Our teams remain committed to meeting our customers’ needs, operating with an above-average safety record and building an engaged and focused culture. In the fourth quarter, our board of directors commenced a search to identify a permanent CEO and our goal is to conclude this process as quickly as possible. We continue to focus on achieving our strategic objectives and generating profitable growth for our shareholders.”

Fourth Quarter 2019 Financial Summary

Net sales for the 2019 fourth quarter decreased $21.6 million or 15.6% to $116.8 million, compared with $138.4 million for the fourth quarter of 2018. The decrease was the result of significant challenges across key markets in the Material Handling Segment. Gross profit decreased to $39.2 million, compared with $42.1 million in 2018. However, gross profit margin increased to 33.6% compared with 30.4% last year as favorable price-cost margin and productivity improvements more than offset the lower sales volume during the quarter. Selling, general and administrative expenses decreased $4.6 million to $30.3 million, compared with $35.0 million in 2018, due primarily to lower compensation costs and savings from the transformation initiatives in the Distribution Segment. GAAP income per diluted share from continuing operations was $0.16, compared to $0.09 for the fourth quarter of 2018. Adjusted income per diluted share from continuing operations was $0.12, compared to $0.13 for the fourth quarter of 2018.

Net sales in the Material Handling Segment (consumer, food and beverage, industrial and vehicle end markets) for the fourth quarter of 2019 were $73.4 million, a decrease of $26.1 million or 26.2%, compared with $99.6 million in 2018. The decrease was due to sales declines across all end markets, but primarily in the Company’s food and beverage (lower seed box sales) end market. For the fourth quarter, adjusted EBITDA declined to $14.0 million, compared with $19.3 million in 2018. The lower volume was partially offset by favorable price-cost margin, productivity improvements and lower variable incentive compensation costs. The Material Handling Segment’s adjusted EBITDA margin for the fourth quarter was 19.1% compared to 19.4% for the fourth quarter of 2018.

Net sales in the Distribution Segment (auto aftermarket end market) for the fourth quarter of 2019 were $43.4 million, an increase of $4.6 million or 11.8%, compared with $38.8 million in 2018. The increase was due mostly to incremental sales from the August 2019 acquisition of Tuffy Manufacturing, Inc. Fourth quarter adjusted EBITDA increased to $3.8 million compared with $0.6 million in 2018, due primarily to savings from the segment’s transformation initiatives and the Tuffy acquisition. The Distribution Segment’s adjusted EBITDA margin for the fourth quarter was 8.8% compared to 1.6% for the fourth quarter of 2018.

Full Year 2019 Financial Summary

Net sales for the full year 2019 decreased $51.0 million or 9.0% to $515.7 million, compared with $566.7 million in 2018. Gross profit decreased to $171.3 million, compared with $179.3 million in 2018. However, gross profit margin increased 160 basis points to 33.2%. Favorable price-cost margin and productivity improvements more than offset the lower sales volume and a $3.5 million charge taken during the third quarter of 2019 for estimated product replacement costs. Selling, general and administrative expenses decreased to $133.1 million, compared with $139.3 million in 2018, due primarily to lower compensation costs and savings from the transformation initiatives in the Distribution Segment. GAAP income per diluted share from continuing operations was $0.68, compared with a loss of $0.05 for the full year of 2018, when the Company recognized $33.3 million of charges related to its Lawn and Garden business which was sold in 2015. Adjusted income per diluted share from continuing operations was $0.78, compared with $0.76 in 2018.

Net sales in the Material Handling Segment for the full year of 2019 were $356.4 million, a decrease of $60.8 million or 14.6%, compared with 2018. The decrease was due to lower sales across all end markets, but primarily in the Company’s food and beverage (lower seed box sales) end market. The segment’s adjusted EBITDA declined 8.9% to $75.5 million for the full year of 2019, compared with $82.8 million in 2018. The lower sales volume and charge for estimated product replacement costs were partially offset by favorable price-cost margin, productivity improvements and lower variable incentive compensation costs. The Material Handling Segment’s adjusted EBITDA margin for the full year increased 130 basis points to 21.2%, compared with 19.9% in 2018.

Net sales in the Distribution Segment for the full year of 2019 were $159.3 million, an increase of $9.7 million or 6.5%, compared with 2018, mostly due to incremental sales from the August 2019 Tuffy acquisition. The segment’s adjusted EBITDA increased 60.0% to $12.7 million compared with $7.9 million in 2018, due primarily to savings from the segment’s transformation initiatives and the Tuffy acquisition. The Distribution Segment’s adjusted EBITDA margin for the full year increased 270 basis points to 8.0%, compared with 5.3% in 2018.