Myers posts record sales for both 4Q and fiscal year 2006
Myers Industries Inc. posted net income of $7.3 million on net sales of $194.3 million -- a fourth-quarter record -- for the quarter ended Dec. 31, 2006. That compares to net income of $5.9 millon on sales of $191 million for the same period in 2005.
For the year, net income increased 48% to $28.7 million versus fiscal 2005. Net sales increased 6% to a record $780 million.
(The results represent continuing operations only. The sale of the company's European Material Handling Segment, which was completed on Feb. 1, 2007, is not included.)
"We are pleased with the outstanding operating results for both the quarter and year," says CEO and President John Orr. "We achieved this by streamlining and reducing costs in key areas of our operations, increasing productivity throughout the business, focusing on value-added products and innovation for customers, and better management of product pricing considering raw material costs."
Here are the company's 2006 results compared to 2005 by business segment.
1. Distribution. Net sales were $50 million for the fourth quarter of 2006, an increase of 2% compared to 4Q 2005. For the year, net sales were $197.3 million, an increase of 4%.
Income before taxes was $6.1 million for the fourth quarter, an increase of 2%. For the year, income before taxes was $22.2 million, an increase of 8%.
According to Myers, the key factors influencing performance in this segment continued to be product mix, cost controls, and increased market penetration through tire dealers, auto dealers, and other tire service niches.
2. North American Material Handling. Net sales for the fourth quarter were $58.2 million, an increase of 6%. "Continued focus on selling higher-value container and pallet systems was a key factor in net sales performance for the quarter," says the company. For the year, net sales were $240.1 million, an increase of 15%.
Income before taxes was $9.5 million for the fourth quarter of 2006, an increase of 76%. For the year, income before taxes was
$34.9 million, an increase of 114%.
Myers says the primary factors influencing profitability for both the quarter and year included strategic pricing to help Myers Industries offset raw material costs; mix management, which focused on providing customers with value-based material handling product solutions to improve their business; internal productivity initiatives; and cost controls.
3. Lawn and Garden. Net sales for the fourth quarter were $40.5 million, a decrease of 11%. For the year, net sales were $160.2 million, a decrease of 6%.
Fourth quarter sales remained constrained by delays in retailer forecasting to growers, an industry-wide dynamic first experienced in the third quarter of 2006, coupled with highly competitive pricing pressures in the marketplace, according to Myers.
Income before taxes was $1.6 million for the fourth quarter, a decrease of 70%. "Slowness in recovery of unit volumes to the grower market could not be offset by favorable product pricing and robust decorative planter business to retail markets." For the year, income before taxes was $8.1 million, a decrease of 51%.
Myers indicated in the third quarter that the industry-wide buying delay would shift sales later into the fourth quarter and into the first half of 2007. To further strengthen its competitive
position in this segment, in January 2007 the Company acquired a well-known industry brand, ITML Horticultural Products, in January 2007.
4. Automotive and Custom. Net sales for the fourth quarter were $50.1 million, an increase of 4%. Sales gains were made in heavy truck, off-road vehicle, and other niche markets. For the year, net sales were $204.7 million, an increase of 5%.
Income before taxes was $2 million for the fourth quarter, an increase of 25%. The company says the primary factors influencing 4Q profitability were a strong focus on customers' needs for value-added engineered products, mix management, continued pricing improvements, cost controls, and productivity gains.
For the year, income before taxes was $14 million, an increase of 40%.
According to Myers, 2006 was a year of growth and the start of transformation for Myers Industries. In addition to significant internal improvements last year, the sale of the European Material Handling Segment businesses and the acquisition of ITML Horticultural Products will provide strong channels for the company's growth.
Within the company's four key business segments and their respective brands, management says it is focused on the following growth catalysts:
* ongoing new product development;
* implementation of new technology platforms to speed workflow and improve customer satisfaction;
* consolidation and synergy initiatives across segments and brands to reduce costs and improve productivity; and
* strategic, bolt-on acquisitions with strong potential to boost the
company's brand strength and leadership in its chosen niche markets.
"These efforts will continue to position Myers Industries to deliver sustainable benefits for all of its stakeholders," adds the company.
Myers Industries' stock price on the New York Stock Exchange closed at $17.75 on Friday, Feb. 23, 2007.