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Myers Industries Reports 2021 Q4 and Full-Year Results

Fourth quarter sales increased 45%, including acquisitions, 28% on an organic basis.

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Myers Industries, manufacturer of a wide range of polymer products and distributor for the tire, wheel, and under-vehicle service industry, has announced results for the fourth quarter and full year ended Dec. 31, 2021.

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Fourth Quarter and Full Year 2021 Financial Highlights

  • Net sales for the fourth quarter increased 45% to $199.6 million, compared with $137.5 million for the fourth quarter of 2020; net sales for the full year increased 49% to $761.4 million, compared with $510.4 million for the full year of 2020
  • On an organic basis, net sales for the fourth quarter increased 28% compared with the fourth quarter of 2020 and net sales for the full year increased 25% compared with the full year of 2020
  • Net income per diluted share for the fourth quarter increased 150% to $0.20, compared with $0.08 for the fourth quarter of 2020; net income per diluted share for the full year decreased 10% to $0.92, compared with $1.02 for the full year of 2020 (net income for the full year of 2020 included $11.9 million of pre-tax income from the sale of notes and release of lease guarantee liability related to the company’s Lawn and Garden business that was sold in 2015)
  • Adjusted earnings per diluted share for the fourth quarter increased 109% to $0.23, compared with $0.11 for the fourth quarter of 2020; adjusted earnings per diluted share for the full year increased 14% to $0.97, compared with $0.85 for the full year of 2020
  • Adjusted EBITDA for the fourth quarter increased 55% to $17.6 million, compared with $11.3 million for the fourth quarter of 2020; adjusted EBITDA for the full year increased 9% to $72.3 million, compared with $66.4 million for the full year of 2020
  • Cash flow from continuing operations was $44.9 million and free cash flow was $27.0 million for the full year of 2021

Myers Industries’ President and CEO, Mike McGaugh said, “2021 was a strong and important year for Myers. We experienced strong organic revenue growth. We successfully integrated two high-performing acquisitions. In addition, we are proud to tell you that the revitalization of Myers’ sales, marketing, and operational capabilities is taking place across all of Myers. The transformation of Myers is ongoing. We continue to see robust demand for our products across our end markets and are confident that our ‘One Myers’ strategy, based on an integrated company approach, will help us fulfill this demand.

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Throughout 2021, our team worked hard and smartly to offset cost pressures that temporarily depressed near-term margins. That included pricing actions and implementing a value-based approach to pricing, which delivered a favorable price-to-cost relationship during the fourth quarter. We believe our significant infusion of operational and commercial talent over the past two years and our new processes and approach to doing business will make these improvements lasting. This will put us in a strong position to drive margins and profitability in 2022 and beyond.”

McGaugh concluded, “During the fourth quarter, we continued the integration of our recent acquisitions, Elkhart Plastics and Trilogy Plastics. These acquisitions have exceeded our expectations by bringing scale, and capability, and an improved ability to deliver value to Myers’ customers. It’s exciting and gratifying to see the progress on our acquisitions, as well as the commercial and operational improvements across our company. Looking forward, we remain focused on maintaining our strong momentum, executing the “One Myers” integrated strategy, and delivering improved results. We have a strong team comprised of long-serving Myers’ associates and over two dozen new high-horsepower members, a robust demand for our differentiated products, sustained top-line momentum, a healthy balance sheet, and a high cash-generating business model, all of which are working together to drive growth and position the business for long-term success. We look forward to continued execution in 2022 and believe we have only scratched the surface of our long-term potential.”

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Net sales for the fourth quarter of 2021 were $199.6 million, an increase of $62.1 million, or 45.2%, compared with $137.5 million for the fourth quarter of 2020, driven by strong sales in both the Material Handling and Distribution segments. Excluding the incremental $23.3 million of net sales from the Elkhart and Trilogy acquisitions, organic net sales increased 28%, with 19% due to favorable pricing and 9% due to higher volume/mix.

Gross profit increased $12 million, or 30.1% to $51.8 million, primarily due to the increased contribution from pricing actions, sales volume, and the Elkhart and Trilogy acquisitions. Partially offsetting these contributions were higher raw material costs, increased labor and other manufacturing costs, and an unfavorable sales mix. Although the contribution from pricing actions more than offset higher raw material costs, which led to a favorable price-to-cost relationship for the quarter, gross margin was 26.0% compared with 29.0% for the fourth quarter of 2020 due to the higher labor and other manufacturing costs and unfavorable sales mix. Selling, general and administrative expenses increased $6.3 million, or 18.1% to $41.3 million, reflecting the Elkhart and Trilogy acquisitions, which accounted for approximately half of the increase, higher salaries, benefits, incentive compensation costs, and increased professional fees. SG&A as a percentage of sales declined to 20.7% in the fourth quarter, compared with 25.4% in the same period last year. Net income per diluted share was $0.20, compared with $0.08 for the fourth quarter of 2020. Adjusted earnings per diluted share were $0.23, compared with $0.11 for the fourth quarter of 2020.

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Full Year 2021 Financial Summary

  Year Ended December 31, 
  2021 2020 Inc (Dec) 
  (Dollars in millions, except per share data) 
        
Net sales $761.4 $510.4 49.2% 
        
Operating income $49.3 $53.6 (7.9)% 
Adjusted operating income $51.9 $45.9 13.2% 
Adjusted operating income margin 6.8% 9.0% -220 bps 
        
Net income $33.5 $36.8 (8.8)% 
Adjusted net income $35.3 $30.5 15.8% 
        
Net income per diluted share $0.92 $1.02 (9.8)% 
Adjusted earnings per diluted share $0.97 $0.85 14.1% 

Net sales for the full year of 2021 were $761.4 million, an increase of $251.1 million, or 49.2%, compared with $510.4 million for the full year of 2020, driven by strong sales in both the Material Handling and Distribution segments. Excluding the incremental $122.2 million of net sales from the Elkhart and Trilogy acquisitions, organic net sales increased 25%, with 14% due to higher volume/mix, 10% due to favorable pricing, and 1% due to foreign currency exchange.

Gross profit increased $39.5 million, or 22.9% to $211.4 million, primarily due to the increased contribution from pricing actions, volume/mix and the Elkhart and Trilogy acquisitions. Partially offsetting these contributions were higher raw material costs, including a $2.0 million incremental charge to increase the LIFO inventory reserve, which were not fully recovered by pricing actions and led to an unfavorable price-to-cost relationship for the year. Gross margin declined to 27.8% compared with 33.7% for the full year of 2020 as a result of the unfavorable price-to-cost relationship, higher labor and other manufacturing costs, and an unfavorable sales mix. Selling, general and administrative expenses increased $33.2 million, or 25.5% to $163.5 million, reflecting the Elkhart and Trilogy acquisitions, higher salaries, benefits, incentive compensation costs, and increased professional fees. SG&A as a percentage of sales declined to 21.5% for the full year, compared with 25.5% last year. Net income per diluted share was $0.92, compared with $1.02 for the full year of 2020, which included $0.24 from the sale of notes and release of lease guarantee liability related to the company’s Lawn and Garden business sold in 2015. Adjusted earnings per diluted share were $0.97, compared with $0.85 for the full year of 2020.

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Balance Sheet & Cash Flow

As of Dec. 31, 2021, the company’s cash on hand totaled $17.7 million, compared to $28.3 million as of Dec. 31, 2020. Total debt as of December 31, 2021, was $100.9 million.

For the full year of 2021, cash flow provided by operations was $44.9 million and free cash flow was $27 million, compared with cash flow provided by operations of $46.5 million and free cash flow of $33.1 million for the full year of 2020. Capital expenditures for the full year of 2021 were $17.9 million, compared with $13.4 million for the full year of 2020.

2022 Outlook

Based on current exchange rates, market outlook and business forecast, the company provided the following outlook for fiscal 2022:

  • Net sales growth in the high single digit to low double-digit range, with approximately one quarter of the increase due to the acquisition of Trilogy Plastics
  • Diluted EPS in the range of $1.18 to $1.38; adjusted diluted EPS in the range of $1.20 to $1.40
  • Capital expenditures to be in the range of $25 to $28 million
  • Effective tax rate to approximate 26%

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