Myers Industries Reports Fourth Quarter and Full Year 2005 Results; Record Sales with Fourth Quarter Net Income Up 25 Percent.AKRON, Ohio Akron is a city in the U.S. state of Ohio and the county seat of Summit County.GR6 The municipality is located in northeastern Ohio on the Cuyahoga River between Cleveland to the north and Canton to the south, approximately 60 miles (96 km) west of -- Myers Myers can refer to: People
See: New York Stock Exchange :MYE MYE Methodist Youth Executive MYE Man-Year Equivalent ) today announced that net sales Net Sales The amount a seller receives from the buyer after costs associated with the sale are deducted. Notes: This amount is calculated by subtracting the following items from gross sales: merchandise returned for credit, allowances for damaged or missing goods, freight of $231,442,792 for the quarter ended December December: see month. 31, 2005 were the highest fourth quarter revenues in the Company's history, an increase of 5 percent compared with fourth quarter sales of $221,415,871 in 2004. The unfavorable translation of foreign currency, primarily due to a weaker euro, negatively impacted net sales for the fourth quarter of 2005 by approximately $3.2 million. Net income of $8,689,933 for the fourth quarter ended December 31, 2005 was an increase of 25 percent from $6,930,355 in the fourth quarter of 2004. Net income per share was $.25 for the three months ended December 31, 2005, an increase of 25 percent compared with $.20 in the fourth quarter of 2004, and it was the highest fourth quarter earnings in six years. The unfavorable translation of foreign currency decreased net income for the fourth quarter of 2005 by approximately $350,000. For the year ended December 31, 2005, net sales were a record $903,679,161, an increase of 13 percent from the $803,070,387 reported for 2004. Revenues for 2005 include $39.0 million incremental Additional or increased growth, bulk, quantity, number, or value; enlarged. Incremental cost is additional or increased cost of an item or service apart from its actual cost. revenue from acquisitions and $2.5 million from the favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. translation of foreign currencies. Net income for the year ended December 31, 2005, was $26,555,507, an increase of 3 percent compared to $25,709,760 in 2004. Net income in 2004 included the favorable foreign currency translation effect of $520,000. Net income per share for the year ended December 31, 2005, was $.76, the same as reported in 2004, as the additional shares issued in conjunction with the July July: see month. 2004 acquisition of Pro Cal - approximately 1.1 million shares - resulted in an approximate 3 percent increase in average shares outstanding. Foreign currency translation did not have a significant effect on net income for the year ended December 31, 2005. "We are very pleased with the record sales in both the quarter and year, as well as our net income achievement for the fourth quarter - and for the year," said John C. Orr Orr , Robert Gordon Called "Bobby." Born 1948. Canadian-born hockey player. He led the National Hockey League in scoring in 1970 and 1975 and was the first defenseman to score more than 100 points in a season. Noun 1. , President and Chief Executive Officer. "Last year, we pledged that we would boost our performance in part through improved product pricing to manage higher raw material costs, maximizing cost controls, and continuing productivity improvements. We took decisive actions that allowed us to finish a very difficult year with good momentum." Impact of Raw Material Costs Prices for the Company's primary raw materials, HDPE HDPE abbr. high-density polyethylene and PP plastic resins resins, n.pl complex, insoluble, sticky substances secreted by plants. Used as astringents, antimicrobials, and antiinflammatories, and are burned as incense. Can cause oral ulcers and epidermal irritations. , reached historical highs during 2005. Higher selling prices, increased expense controls, and productivity gains partially offset the effects of higher costs for plastic raw materials during the fourth quarter, which were approximately 30 percent higher on average compared to the fourth quarter of 2004. This resulted in a decrease in gross margins to 28.7 percent of net sales for the fourth quarter of 2005 compared with 29.4 percent in the fourth quarter of 2004. For the year ended December 31, 2005, plastic raw material costs were approximately 30 percent higher on average compared to 2004. While the Company was able to recover a significant amount of raw material costs through increased pricing, cost control initiatives, and other productivity and manufacturing efficiencies in the third quarter and fourth quarter of 2005, the impact of the higher raw material costs on the full year reduced gross margins to 27.2 percent of net sales compared with 29.7 percent in the prior year. Entering 2006, resin resin, any of a class of amorphous solids or semisolids. Resins are found in nature and are chiefly of vegetable origin. They are typically light yellow to dark brown in color; tasteless; odorless or faintly aromatic; translucent or transparent; brittle, fracturing prices are showing signs of pulling back somewhat from the historically high levels in the fourth quarter of 2005. Cost Controls, Interest Expense & Income Taxes Management's strict focus on cost control initiatives continued to produce positive effects in the fourth quarter, as selling and administrative expenses decreased to 21.6 percent of net sales in 2005 from 23.6 percent of net sales in 2004. For the year ended December 31, 2005, selling and administrative expenses decreased to 21.2 percent of net sales compared to 23.4 percent of net sales in 2004. Net interest expense increased 6 percent to $4.0 million for the fourth quarter ended December 31, 2005, compared to $3.7 million in the prior year. The increase reflects higher interest rates, which offset lower average borrowing levels. For year ended December 31, 2005, net interest expense increased 17 percent to $15.6 million compared to $13.3 million in the prior year. The increase reflects higher interest rates and higher average borrowing levels. Income taxes as a percent of income before taxes for the fourth quarter ended December 31, 2005, increased to 33.5 percent compared to 24.0 percent in 2004. For the year ended December 31, 2005, income taxes as a percent of income before taxes were 34.3 percent compared to 33.6 percent for the same period of 2004. The higher effective tax rate for 2005 was primarily due to the additional income tax expense of approximately $281,000 related to the repatriation Repatriation The process of converting a foreign currency into the currency of one's own country. Notes: If you are American, converting British Pounds back to U.S. dollars is an example of repatriation. of approximately $4.4 million in dividends from foreign subsidiaries, pursuant to the American American, river, 30 mi (48 km) long, rising in N central Calif. in the Sierra Nevada and flowing SW into the Sacramento River at Sacramento. The discovery of gold at Sutter's Mill (see Sutter, John Augustus) along the river in 1848 led to the California gold rush of Jobs Creation Act of 2004. Business Segment Results Distribution Segment The Distribution Segment is engaged in the distribution of equipment, tools, and supplies used for tire servicing and automotive underbody repair. Products cover every major category, ranging from tire valves and repair supplies to service tools and alignment Alignment is the adjustment of an object in relation with other objects, or a static orientation of some object or set of objects in relation to others.
Fourth quarter 2005 net sales in the Distribution Segment set a record at $49.1 million, an increase of 7 percent compared to the fourth quarter of 2004. Sales of both equipment and consumable A material that is used up and needs continuous replenishment, such as paper and toner. "The low-tech end of the high-tech field!" supplies remained strong across the segment's markets, as tire dealers and other markets continued to meet the demands from their customers' increased focus on regular tire service and related procedures, and maintaining vehicles for winter driving conditions. For the year ended December 31, 2005, net sales in the segment were a record $189.9 million, an increase of 11 percent compared to 2004. Income before taxes in the Distribution Segment increased 6 percent to $6.0 million in the fourth quarter of 2005 compared to the fourth quarter of 2004, primarily due to higher sales volumes and ongoing cost controls. For the year ended December 31, 2005, income before taxes increased 19 percent to a record $20.6 million compared to the prior year, benefiting from improved sales volumes across equipment and supplies product lines, higher selling prices, and sharp attention to controllable costs. Material Handling - North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. Segment In the Material Handling - North America Segment, the Company manufactures and sells a comprehensive range of plastic reusable re·use tr.v. re·used, re·us·ing, re·us·es To use again, especially after salvaging or special treatment or processing. re·us bulk containers, hand-held hand-held also hand·held adj. Compact enough to be used or operated while being held in the hand or hands: a hand-held video camera. Adj. 1. totes Totes (more fully Totes»ISOTONER) is a corporation that sells umbrellas, gloves, rubber rain boots, and other similar accessories. Its headquarters is in Cincinnati, Ohio. , and pallets serving industrial manufacturing, automotive, agriculture, food, retail distribution, and other end markets. Reusable products replace disposable disposable Nursing adjective Referring to that which is discarded or disposed of noun An item used in health care-related Pt contact which is discarded after use–eg masks, gloves, gowns, needles, paper products, syringes, wipes. See Biohazardous waste. cardboard boxes cardboard box n → caja de cartón cardboard box n → (boîte f en) carton m cardboard box card n → and wooden pallets in closed-loop supply chains to help companies improve material handling performance and lower operating costs operating costs npl → gastos mpl operacionales . Fourth quarter 2005 net sales in this segment were $55.0 million, an increase of 7 percent compared to the fourth quarter of 2004. For the year ended December 31, 2005, net sales were $209.5 million, an increase of 11 percent compared to 2004. Net sales for both the fourth quarter and full year of 2005 benefited from higher selling prices and improved volumes in certain product lines and markets. Income before taxes for Material Handling - North America was $5.4 million in the fourth quarter of 2005, a decrease of 15 percent compared to the fourth quarter of 2004. For the year ended December 31, 2005, income before taxes was $16.3 million, a decrease of 17 percent compared to $19.7 million in the same period of 2004. The decrease in income before taxes in both the fourth quarter and the full year of 2005 was due to higher raw material costs, which were partially offset by higher selling prices, improved productivity, and expense controls. Material Handling - Europe Europe (y  r`əp), 6th largest continent, c.4,000,000 sq mi (10,360,000 sq km) including adjacent islands (1992 est. pop. 512,000,000). Segment
With products and markets similar to those of North America, fourth quarter 2005 net sales in the Material Handling - Europe Segment were $40.4 million, a decrease of 11 percent from the comparable quarter of 2004. The decrease in net sales for the fourth quarter of 2005 was due to continued weakness in the European Union European Union (EU), name given since the ratification (Nov., 1993) of the Treaty of European Union, or Maastricht Treaty, to the European Community economy, particularly in industrial markets, and lower sales volumes for certain product lines serving those markets. The unfavorable translation of foreign currencies, primarily due to a weaker euro, decreased fourth quarter net sales by $3.6 million. For the year ended December 31, 2005, net sales were $166.8 million, a slight decrease from the $167.2 million reported for 2004. Foreign currency translation did not have a significant effect on net sales for the year ended December 31, 2005. Income before taxes was $3.8 million in the fourth quarter of 2005, an increase of 53 percent compared to the fourth quarter of 2004. The unfavorable translation of foreign currencies decreased income before taxes by $404,000 in the fourth quarter of 2005. The key factors influencing fourth quarter profitability were higher selling prices and lower operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. , which helped to offset lower sales volumes and higher raw material costs. For the year ended December 31, 2005, income before taxes was $8.3 million, an increase of 40 percent compared to the same period of 2004, achieved primarily through higher selling prices across product lines and lower operating expenses. Foreign currency translation did not have a significant effect on income before taxes for the year ended December 31, 2005. Automotive and Custom Segment In the Automotive and Custom Segment, the Company designs, engineers, and manufactures a diverse mix of plastic and rubber products for OEM (Original Equipment Manufacturer) The rebranding of equipment and selling it. The term initially referred to the company that made the products (the "original" manufacturer), but eventually became widely used to refer to the organization that buys the products and automotive, heavy truck, recreational vehicle, tire repair, and other niche markets A niche market also known as a target market is a focused, targetable portion (subset) of a market sector. By definition, then, a business that focuses on a niche market is addressing a need for a product or service that is not being addressed by mainstream providers. . In the fourth quarter of 2005, net sales in the segment were $48.2 million, an increase of 8 percent compared to the fourth quarter of 2004 due to continued strong demand in automotive, RV, and heavy truck markets. For the year ended December 31, 2005, net sales in the segment were $195.1 million, an increase of 14 percent compared to a year earlier. Revenues for 2005 include $10.1 million incremental revenue from acquisitions. Income before taxes in the Automotive and Custom Segment was $1.6 million in the fourth quarter of 2005, an increase of 38 percent compared to the fourth quarter of 2004. The primary factors influencing profitability in this segment during the fourth quarter were higher sales volumes, improved selling prices, and cost controls, which offset higher costs for plastic and rubber raw materials. For the year ended December 31, 2005, income before taxes was $10.0 million, a decrease of 24 percent compared to the same period of 2004. Profitability during the year was impacted by lag time to implement higher selling prices to OEM customers and the overall percentage increase the Company is able to gain depending on the product, market, and customer. Lawn and Garden Segment In the Lawn and Garden Segment, the Company designs and manufactures plastic flowerpots, nursery containers, hanging baskets, custom-printed pots, and decorative resin planters Planters is an American snack food company under Kraft Foods manufacturing, best known for its nuts and the Mr. Peanut icon that symbolizes them. Started by Italian immigrants Amedeo Obici and Mario Peruzzi in Wilkes-Barre, Pennsylvania, in 1906, it was incorporated in 1908 for grower, nursery, and retail markets. Fourth quarter 2005 net sales in the Lawn and Garden Segment were $45.5 million, a fourth quarter record and 21 percent above sales for the fourth quarter of 2004. For the year ended December 31, 2005, net sales were also a record at $170.4 million, a 44 percent increase in net sales as compared to 2004. Current year revenues include $28.9 million incremental revenue from acquisitions. The strong sales performance for both the fourth quarter and full year of 2005 is the result of new product introductions and continued strong demand from all sectors of the horticultural hor·ti·cul·ture n. 1. The science or art of cultivating fruits, vegetables, flowers, or ornamental plants. 2. The cultivation of a garden. market, from grower to retail. Income before taxes in the Lawn & Garden Segment was $5.3 million in the fourth quarter of 2005, a quarterly record and an increase of 59 percent compared to the same quarter in 2004. For the year ended December 31, 2005, income before taxes set a record at $16.4 million, an increase of 37 percent compared to 2004. The key factors influencing profitability in this segment for both the fourth quarter and the full year of 2005 were higher selling prices, increased unit volumes, and cost controls, which offset the higher costs for plastic raw materials. Total Debt & Capital Expenditures Total debt at December 31, 2005 was $252.8 million, a reduction of $24.6 million from $277.4 million at December 31, 2004. Total debt as a percentage of total capitalization Total capitalization The total long-term debt and all types of equity of a company that constitutes its capital structure. total capitalization See capitalization. was 43 percent at December 31, 2005, compared to 44 percent at December 31, 2004. For the year-ended December 31, 2005, capital expenditures were $25.4 million. Key investments throughout the year were allocated to new products and new manufacturing equipment, as well as to help fund expansion into high-growth markets, particularly Brazil Brazil (brəzĭl`), Port. Brasil, officially Federative Republic of Brazil, republic (2005 est. pop. 186,113,000), 3,286,470 sq mi (8,511,965 sq km), E South America. , where the Company established a new manufacturing and distribution facility for select material handling products and tire service products. The Company also expanded its Sandusky, Ohio Sandusky is a city in the U.S. state of Ohio and the county seat of Erie CountyGR6. The municipality is located in northern Ohio and is situated on the shores of Lake Erie, half-way between Toledo to the west and Cleveland to the east. , manufacturing facility to achieve greater efficiency in producing certain plastic and metal material handling products. For calendar 2006, the Company expects capital expenditures to be in the range of $25 to $30 million. Summary, Strategic Evolution & Outlook As discussed in 2005, Myers Industries began a review of each of its business segments to identify, develop, and implement new operating initiatives to strengthen its financial performance - an ongoing process defined as the Company's Strategic Business Evolution. In addition to the pricing, cost control, and productivity initiatives already in place, last year the Company took advantage of opportunities to consolidate two distribution branches and two manufacturing plants, transferring their operations to more efficient facilities. The moves help the Company achieve permanent cost reductions and improve servicing of customers. Throughout 2006, the Company will phase-in phase-in n. A gradual introduction: a phase-in of new personal policies. more elements of its Strategic Business Evolution. Orr explained, "We have five key business principles that are central to defining the priorities in our Strategic Business Evolution: 1) Business Growth, 2) Customer Satisfaction, 3) Cost Control, 4) Organizational Development, and 5) Positioning the Business for the Future. Each of these principles and their components are the cornerstones of how we will compete and win." Combined with the initiatives already in action, further substantive opportunities include, but are not limited to: --Continued investments in new technologies and processes to reinforce market strength and capabilities in key business groups; --Continued investments in emerging market growth initiatives, such as Brazil; --Potential divestiture The breakup of AT&T. By federal court order, AT&T divested itself on January 1, 1984 of its 23 operating companies, which became known as the Regional Bell Operating Companies (RBOCs). of businesses with non-strategic products or markets. The Company continues to evaluate its brands, product lines, and markets in which it competes to determine where to focus resources for the best long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. , profitable growth potential; --Selective acquisitions as opportunities arise to enhance the Company's leadership in key markets; and, --Consolidation and rationalization rationalization, in psychology: see defense mechanism. initiatives to further reduce costs and improve productivity within the Company's manufacturing and distribution footprint The amount of geographic space covered by an object. A computer footprint is the desk or floor surface it occupies. A satellite's footprint is the earth area covered by its downlink. See form factor. 1. . Myers Industries will announce more details as specific components of the Strategic Business Evolution are determined and implemented. Orr concluded, "By pursuing these areas of opportunity, we strengthen our capabilities for innovation, enhance brand leadership in the markets we serve, build strong customer relationships, and position ourselves to achieve sustainable growth in 2006 and beyond." Conference Call A conference call is scheduled today from 2:30 - 3:30pm Eastern to review the results. President and Chief Executive Officer John C. Orr and Vice President-Finance and Chief Financial Officer Greg GREG Great Egg Harbor National Scenic and Recreational River (US National Park Service) Stodnick will conduct the call. To access the call, dial 1-877-407-9210; international callers dial 1-201-689-8049. The call is also being audio webcast (listen only) by Vcall and can be accessed online before the event through a link at www.myersind.com. About Myers Industries Myers Industries, Inc. is an international manufacturer of polymer products for industrial, agricultural, automotive, commercial, and consumer markets. The Company is also the largest wholesale distributor of tools, equipment, and supplies for the tire, wheel, and undervehicle service industry in the U.S. Visit www.myersind.com to learn more. Forward-Looking Statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. : Statements in this release may include "forward-looking for·ward-look·ing adj. Concerned with or making provision for the future: forward-looking educators; a forward-looking corporate plan. Adj. 1. " statements within the meaning of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. Any statement that is not of historical fact may be deemed "forward-looking." These statements involve a number of risks and uncertainties, many outside of the Company's control that could cause actual results to materially differ from those expressed or implied. Factors include, but are not limited to: changes in the markets for the Company's business segments, unanticipated downturn Downturn The transition point between a rising, expanding economy to a falling, contracting one. downturn A decline in security prices or economic activity following a period of rising or stable prices or activity. in business relationships with customers or their purchases from us, competitive pressures on sales and pricing, increases in raw material costs or other production costs, regulatory reg·u·late tr.v. reg·u·lat·ed, reg·u·lat·ing, reg·u·lates 1. To control or direct according to rule, principle, or law. 2. issues, and further deterioration de·te·ri·o·ra·tion n. The process or condition of becoming worse. of economic and financial conditions in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. and around the world. Myers Industries does not undertake to update forward-looking statements contained herein.
MYERS INDUSTRIES, INC.
CONDENSED STATEMENTS OF INCOME
Quarter Ended Year Ended
December 31, December 31,
--------------------------- ---------------------------
2005 2004 2005 2004
------------------------------------------ ---------------------------
Net Sales $231,442,792 $221,415,871 $903,679,161 $803,070,387
Cost of Sales 165,070,888 156,390,255 657,506,277 564,295,649
------------- ------------- ------------- -------------
Gross Profit 66,371,904 65,025,616 246,172,884 238,774,738
Operating
Expenses
Selling,
General and
Administrative 50,051,269 52,153,183 191,231,308 188,248,826
Loss (Gain) on
Sale of Plant (740,385) 0 (1,049,193) (1,524,598)
------------- ------------- ------------- -------------
Total Operating
Expenses 49,310,884 52,153,183 190,182,115 186,724,228
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Operating
Income 17,061,020 12,872,433 55,990,769 52,050,510
Interest
Expense 3,989,087 3,748,078 15,584,262 13,321,750
------------- ------------- ------------- -------------
Income Before
Income Taxes 13,071,933 9,124,355 40,406,507 38,728,760
Income Taxes 4,382,000 2,194,000 13,851,000 13,019,000
------------- ------------- ------------- -------------
Net Income $8,689,933 $6,930,355 $26,555,507 $25,709,760
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Net Income Per
Basic and
Diluted Common
Share $0.25 $0.20 $0.76 $0.76
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Average Shares
Outstanding 34,784,124 34,594,582 34,724,488 33,846,511
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CONDENSED STATEMENTS OF FINANCIAL POSITION
As of December 31, 2005 and 2004
2005 2004
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Assets
Current Assets $284,327,740 $280,072,178
Other Assets 275,908,520 291,041,594
Property, Plant, and Equipment 195,721,782 210,488,790
------------- -------------
$755,958,042 $781,602,562
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Liabilities and Shareholders' Equity
Current Liabilities $141,852,091 $132,251,927
Long Term Debt 249,523,633 275,252,278
Deferred Income Taxes 28,441,947 28,094,321
Shareholders' Equity 336,140,371 346,004,036
------------- -------------
$755,958,042 $781,602,562
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