Myers Industries Inc.
) reported third-quarter 2013 earnings of 25 cents per share, up
25% from the year-ago quarter, backed by gains at the Lawn and
Garden Segment and disciplined cost management. However, earnings
missed the Zacks Consensus Estimate by a penny.
On a GAAP basis, including one-time items, the company reported
earnings per share of 19 cents compared with 17 cents earned in
the year-ago quarter.
Net sales slipped 1.2% from the year-ago quarter to $194.9
million, while it missed the Zacks Consensus Estimate of $211
million. The downside resulted from a decline in sales at all of
the company's business segments. Engineered Products and Lawn
& Garden segments were the most affected, while the Material
Handling and Distribution segments posted only marginal declines.
Gross profit rose 1.7% to $53.6 million compared to $52.7 million
in the prior-year quarter. Gross margin expanded 80 basis points
to 27.5%, driven by cost savings that came from productivity
enhancements and material substitution.
Operating income climbed 23.5% to $12.1 million due to improved
gross profit and lower selling, general & administrative
segment posted a marginal decline of 0.2% with net sales reaching
$76.0 million mainly due to diminished food processing sales that
came on the back of weakened tomato crop season, offset largely
by incremental sales from the Jamco acquisition. Based on the
soft sales performance, the segment reported a 14.4% decline in
adjusted earnings before tax of $10.7 million.
Net sales at
Lawn and Garden
segment inched down 1% from the year-ago quarter to $44.9
million, backed by delayed orders for the upcoming season.
Adjusted earnings before tax for the Lawn and Garden segment was
$2.5 million compared to break-even earnings before tax in the
year-ago quarter. The whopping rise in earnings was driven by
cost savings related to productivity gains and raw material
substitution together with the benefits from the success of phase
one of the company's restructuring endeavor.
Segment net sales inched down 0.1% from the year-ago quarter to
$45.0 million, while adjusted earnings before tax rose 26.5% to
$4.3 million. The upside in earnings was due to a favorable
product mix and lower selling, general and administrative
segment posted a sales decline of 5.2% to $33.8 million compared
to $35.7 million in the year-ago quarter. Segment results were
mainly impacted by a decline in custom sales due to increased
focus on more profitable products and customers. Adjusted
earnings before tax for the segment dipped 5.4% to $3.5 million
mainly due to lower sales, offset by raw material related cost
savings and improved productivity.
Other Financial Updates
The company ended the quarter with $7.0 million in cash as of Sep
30, 2013, compared with $3.9 million at Dec 31, 2012. During the
nine months of 2013, the company generated operating cash flows
of $46.8 million, a substantial improvement from $23.3 million in
the year-ago period.
For the nine months ended Sep 30, 2013, the company spent $20.0
million toward capital expenditure.
Going forward, the company expects sales and earnings to improve
in the fourth quarter of 2013, driven by sale of new products,
productivity gains, cost savings and gains from the Lawn and
Garden Segment restructuring initiatives. These improved results
will exclude restructuring and other unusual pre-tax charges.
Further, the company expects capital expenditures for 2013 to
total nearly $35 million.
Other Stocks to Consider
Myers Industries carries a Zacks Rank #4 (Sell). However,
companies worth considering in the Industrial Products sector
AO Smith Corp.
Mobile Mini Inc.
), all of which carry a Zacks Rank #1 (Strong Buy).
AGCO CORP (AGCO): Free Stock Analysis Report
SMITH (AO) CORP (AOS): Free Stock Analysis
MOBILE MINI INC (MINI): Free Stock Analysis
MYERS INDS (MYE): Free Stock Analysis Report
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