Myers Industries Inc.
) began 2014 on a dismal note as shares of the company plunged
13.2% after its first-quarter 2014 earnings of 16 cents a share
missed the Zacks Consensus Estimate of 22 cents and fell 33% year
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As predicted earlier, the company was hit hard by the faulty
weather and transportation headwinds, causing net sales of the
company to slip 2.9% from the year-ago quarter to $208.8 million,
missing the Zacks Consensus Estimate of $218 million.
Moreover, adjusted gross profit of this Zacks Rank #4 (Sell)
stock dropped 4.4% to a $55.9 million, with the adjusted gross
margin shrinking 40 basis points (bps) to 26.8%.
Although Myers majorly lost sales in January and February 2014,
segment performed well, especially in March. This segment posted
a 13.3% rise in net sales to $90.6 million at the end of the
first quarter, backed by robust sales in agricultural and food
processing markets. Also, the adjusted net income prior to taxes
soared 10% to $10.9 million, facilitated by greater sales
volumes, partly impacted by unfavorable sales mix.
Net sales at the
Lawn and Garden
segment was most impacted by bad weather and transportation
problems, as it tanked 17.5% from the year-ago quarter to $49.8
million. Moreover, this segment posted an adjusted loss before
taxes of $0.1 million as against an income of $2.7 million in the
prior-year period. The fact that benefits from the ongoing
restructuring project were being washed away by the
inefficiencies impacted the results.
sales declined 6.8% to $39.7 million, mainly affected by bad
weather and the shutdown of this segment's outlets in Canada,
during the quarter. Adjusted net income before tax for the
segment remained flat year over year at $2.9 million, as the
positive effects from an enhanced product mix were offset by soft
segment sales and adjusted net income before tax decreased 11.5%
to $32.7 million and 25.4% to $3.8 million, respectively, during
the first quarter. The descent in sales was attributable to
softness in transplant auto and custom sales, partly compensated
by solid marine and RV sales.
The company ended the quarter with $5.7 million in cash. Its
long-term debt stood at $116.7 million and total shareholders'
equity came in at $228.7 million at the end of the first quarter.
During the quarter, Myers spent $4.7 million as capital
expenditure and repurchased shares worth $5.1 million. Further,
the company expects capital expenditures for 2014 to total nearly
Also, in February the company announced a 44% hike in its
quarterly dividend, taking it to 13 cents a share, along with
authorizing an additional share buy back program of $40 million.
These factors reflect the company's capacity to generate healthy
cash flows, its focus on driving shareholder value and its
intentions to keep up with its efficient capital allocation.
Although Myers performed miserably in the first quarter, going
forward in 2014, the company anticipates its full-year earnings
to rise and expects to deliver another year of enhanced
shareholder value, driven by cost curtailment initiatives and
productivity gains from the second phase of the Lawn and Garden
Segment restructuring initiatives.
Other Stocks to Consider
Other better-ranked stocks in the retail sector include
Barnes & Noble, Inc.
Bon-Ton Stores Inc.
Rite Aid Corporation
), all holding a Zacks Rank #1 (Strong Buy).