Myers Industries Inc
) fourth-quarter 2013 earnings of 26 cents a share missed the
Zacks Consensus Estimate of 29 cents and remained flat year over
year. Concurrent with earnings release, the company announced a
44% dividend hike coupled with a $40 million share repurchase
program giving investors a reason to cheer after a
On a reported basis, including one-time items, the company
reported earnings per share of 10 cents, down 60% from 25 cents
earned in the year-ago quarter.
Net sales slipped 1.3% from the year-ago quarter to $211.3
million, and also came below the Zacks Consensus Estimate of
$221.0 million. The downside resulted from a decline in sales at
all of the company's business segments.
Adjusted gross profit rose 1.3% to $58 million compared with
$57.3 million in the prior-year quarter. Gross margin expanded 70
basis points to 27.5%, driven by cost savings that came from
Full Year 2013
For the full year, Myers' earnings rose 6.4% to $1.00 per share.
However, it fell short of the Zacks Consensus Estimate of $1.02.
Full-year sales climbed 4.3% to $825.2 million, missing the Zacks
Consensus Estimate of $835.0 million. Sales were mainly augmented
by product innovations, benefits from the recent Novel and Jamco
acquisition, remodeling of the company's Lawn and Garden segment
and productivity gains.
segment posted a decline of 1.5% with net sales reaching $83.1
million, mainly due to an alteration in consumer and product mix
and the absence of sales that came from a non-recurring project
last year. Also, the adjusted net income prior to taxes plunged
24.2% during the quarter, owing to higher royalty leading to
elevated selling, general and administrative (SG&A) expenses
and other expenses related to employees and enhancement in
Net sales at the
Lawn and Garden
segment inched down 0.1% from the year-ago quarter to $$58.7
million. However, adjusted net income before tax for the Lawn and
Garden segment jumped 39.5% to $5.3 million during the quarter
attributable to cost savings related to productivity gains and
raw material substitution together with the benefits from the
company's restructuring endeavors.
segment posted a sales decline of 1.8% to $43.9 million compared
to the year-ago quarter. Segment results were mainly impacted by
sluggish demand from customers abroad, which more than offset a
rise in domestic new product sales. Adjusted net income before
tax for the segment escalated 12.5% to $3.6 million mainly due to
reduced SG&A on account fall in headcounts. .
Moreover, in Jan 2014, Myers declared the closure of this
segment's Canadian branch, on account of negligible profits and
non-satisfactory sales from this segment during 2013.
segment sales and adjusted net income before tax decreased by
2.5% to $29.3 million and by 25% to $1.8 million, respectively,
during the fourth quarter.
The company ended the year with $6.5 million in cash. Its
long-term debt stood at $44.3 million and total shareholders'
equity came in at $235.5 million at the end of fiscal 2013.
During the year, the company generated operating cash flows of
$96.1 million, a substantial improvement from $60.8 million last
Moreover, with constant emphasis on efficient inventory
management and robust collections during the year, the company
generated a free cash flow of $66.1 million, which was up 95%,
year over year.
During the year, Myers spent $30 million as capital expenditure.
Also, during the fourth quarter, the company announced changes to
its loan agreement, which now allows a senior revolving credit
facility worth $200 million, instead of $180 million authorized
Dividends and Share Repurchases
Myers declared a 44% hike in its quarterly dividend to 13 cents
per share from 9 cents paid earlier. This dividend will be paid
on Apr 1, 2014to stockholders of record as on Mar 10, 2014.
Along with the dividend hike announcement, the company authorized
additional share buy backs worth $40 million for 2014, reflecting
its capacity to generate healthy cash flows and its intentions to
keep up with its efficient capital allocation.
Going forward, in 2014, the company expects to deliver another
year of enhanced shareholder value and greater profits, driven by
sale of new products, healthy cash flows, material substitutions,
removal of low-margin operations and productivity gains from the
second phase of the Lawn and Garden Segment restructuring
initiatives facilitating improved margins. However, Myers expects
the first quarter of 2014 to be hit by bad weather and
Further, the company expects capital expenditures for 2014 to
total nearly $35-$40 million.
Other Stocks to Consider
This Ohio-based company currently holds a Zacks Rank #3 (Hold).
Other better-ranked stocks in the industrial goods space that
warrant a look include
Packaging Corporation of America
), both holding a Zacks Rank #1 (Strong Buy) and
CTI Industries Corp.
) with a Zacks Rank #2 (Buy).
BALL CORP (BLL): Free Stock Analysis Report
CTI INDUSTRIES (CTIB): Free Stock Analysis
MYERS INDS (MYE): Free Stock Analysis Report
PACKAGING CORP (PKG): Free Stock Analysis
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