Myers Industries, a manufacturer of a wide range of polymer and metal products and distributor for the tire, wheel and under-vehicle service industry, has announced results for the second quarter ended June 30, 2022.
Second Quarter 2022 Financial Highlights
Net sales increased 24% to $233.2 million, compared with $187.4 million for the second quarter of 2021
On an organic basis, net sales increased 16% compared with the second quarter of 2021
Earnings per diluted share increased 43% to $0.43, compared with $0.30 for the second quarter of 2021
Adjusted earnings per diluted share increased 55% to $0.45, compared with $0.29 for the second quarter of 2021
Adjusted EBITDA increased 41% to $28.9 million, compared with $20.5 million for the second quarter of 2021
Cash flow provided by operations was $27.0 million and free cash flow was $21.1 million, compared with cash flow provided by operations of $14.7 million and free cash flow of $11.7 million for the second quarter of 2021
Myers Industries President and CEO Mike McGaugh commented, “I am pleased to report this quarter’s record performance, highlighted by our seventh consecutive quarter of double-digit top-line expansion. Our results have been driven by consistent and meaningful progress against our 3-horizon strategy, which has proven to be a successful roadmap for Myers’ transformation. Our self-help initiatives, value-based pricing actions, and contributions from our strategic acquisitions have led to strong financial performance. During the quarter, we continued to execute our strategy by acquiring an additional rotational molding facility, expanding our capability into the south-eastern U.S. In addition, we added to our Distribution Segment by acquiring Mohawk Rubber, a leader in the auto-aftermarket space. We believe that both of these acquisitions will allow us to continue to improve our ability to provide excellent service and value to our customers. Our sustained performance over the past quarters provides additional proof points of our ability to execute on our transformation.”
McGaugh added, “As a result of our second quarter results, we are raising our top- and bottom-line outlook for 2022. Net sales growth, including the Trilogy and Mohawk acquisitions, is expected to be in the high teens range year over year and we are increasing our adjusted EPS range from $1.30 – $1.50 to $1.40 – $1.60. We continue to see improvements in our base business, and we believe there is still substantial runway for continued earnings growth over the long term. We are at an exciting time in Myers’ transformation into a world-class company that delivers world-class financial performance. Our team, our morale, our momentum, have never been better.”
Net sales were $233.2 million, an increase of $45.8 million, or 24.4%, compared with $187.4 million for the second quarter of 2021, driven by strong sales in both the Material Handling and Distribution segments. Excluding the incremental $16.3 million of net sales from the Trilogy Plastics and Mohawk Rubber acquisitions, organic net sales increased 16%. Favorable pricing of 17% was partially offset by a decrease in volume/mix of 1%.
Gross profit increased $19.7 million, or 35.9% to $74.7 million, primarily due to the increased contribution from pricing actions and the Mohawk Rubber and Trilogy Plastics acquisitions. Partially offsetting these contributions were increased labor costs and sales mix. Gross margin was 32.0% compared with 29.4% for the second quarter of 2021. Selling, general and administrative expenses increased $12.2 million, or 30.4% to $52.3 million, reflecting the Mohawk Rubber and Trilogy Plastics acquisitions, higher salaries, benefits, and incentive compensation costs, increased freight and other variable selling expenses, higher facility costs and increased professional services fees. SG&A as a percentage of sales increased to 22.4%, compared with 21.4% in the same period last year, primarily due to inflation. Net income per diluted share was $0.43, compared with $0.30 for the second quarter of 2021. Adjusted earnings per diluted share were $0.45, compared with $0.29 for the second quarter of 2021.
Net sales for the Material Handling Segment were $173.1 million, an increase of $35.9 million, or 26.1%, compared with $137.2 million for the second quarter of 2021. Excluding the incremental $10.3 million of net sales from the Trilogy Plastics acquisition, organic net sales increased 19%. Favorable price of 20% was partially offset by a decline in volume/mix of 1%. Organic net sales increased in the industrial, food and beverage, and vehicle end markets. Operating income increased 56.6% to $28.0 million, compared with $17.9 million in 2021.
Adjusted operating income increased 64.8% to $28.0 million, compared with $17.0 million in 2021. Contributions from pricing actions more than offset increased labor costs and a change in sales mix. Additionally, SG&A expenses were higher year-over-year. The increase in SG&A expenses was primarily due to the Trilogy Plastics acquisition, higher salaries, benefits and incentive compensation costs, increased freight and other variable selling expenses, and higher facility costs. The Material Handling Segment’s adjusted operating income margin increased 380 basis points to 16.2%, compared with 12.4% for the second quarter of 2021.
Based on current exchange rates, market outlook, and business forecast, the Company updated its outlook for fiscal 2022, and currently forecasts:
- Net sales growth in the high teens range with approximately 45% of the increase due to the acquisitions of Trilogy Plastics and Mohawk Rubber
- Diluted EPS in the range of $1.33 to $1.53; adjusted diluted EPS in the range of $1.40 to $1.60
- Capital expenditures to be in the range of $25 to $28 million
- Effective tax rate to approximate 26%