Myers Industries (MYE) 5 Mar 242023 Q4 Earnings call transcript

Hello, and welcome to the Myers Industries Fourth Quarter and Full Year 2023 Results. My name is Harry, and I'll be coordinating your call. [Operator Instructions] I'll now hand over to our host, Meghan Beringer, Myers Industries Senior Director, Investor Relations, to begin. Please go ahead.

Thank you, Harry, and good morning, everyone. Myers year to results. joining quarter XXXX for full and you conference review call fourth Thank

Vice Financial Joining XXXX. President issued for Officer; Executive the and today a Chief and me is our and Executive and Mike press release fourth Grant financial morning, quarter Earlier this Officer. McGaugh, outlining our President we Chief results Fitz, year full

harbor on be found forth XX-K SEC other adjusted periodic income, call. and the Litigation or and gross risks, in may materially discussed Also, may and operating call EBITDA tab a we call. to is a Slide also information Reform This We accompany which Securities based factors, statements Please like Such transcript adjusted to the the to of shortly XX-Q this the may on disclosures. adjusted After and posted profit, remind that webcasted archived measures, of to website question-and-answer you other is to this filings. be company's EPS results may harbor concerning that remarks, please call implied expressed certain safe per are Private after some comments involve in remarks, turn presentation the will and available which advised this have at cause filings the I session. earnings Investor these during set from will our as uncertainties safe Relations be forward-looking and current also risks, statements management's prepared visions those Act we today's under differ would the company's of of host be pursuant X made the or make These Further our financial presentation such prepared on XXXX. event. www.myersindustries.com. expectations are for adjusted with are being factors the statements. and uncertainties non-GAAP along in these share

please to our of over I presentation. pleased McGaugh. to Now turn call am the Mike turn Slide X to

welcome full Good fourth our morning, I'd a work, whose our to improve earnings Megan. highlights. and review our the all to call. everyone, dedication quarter XXXX company. thank and Thank members to year of XXXX first, you, But full and hard day-to-day efforts team like I'll begin of of with strength year our continue

will X the three and pleased join our delivered long-term event, team has New years. we our generation past over and on company. our That journey We flow company. event end focused the for you Industries our progress been person made outlook event. look XX more strategy is a And operating our cash performance shortly in in horizon our incredible team's Myers evident joined Industries after we building on Myers our transforming much outlined few of Our weaknesses improvements made free progress since XXXX results the in several has I first work many cyclical XXXX. markets. despite in as to then, hope sharing even of so the I this outline with at March At We I'm upcoming growth for Day far, foundation and us Horizon strong this strategy for forward York City. updated we've progress details of our of in for will Investor in

one and year results revenue. for earnings On top XXXX in the commercial in the from less on the flow $XX per excellence with macroeconomic of flow, to of was cash positive. EBITDA build Now we at operational and improvement. share, did measures, than achieved gross were Calendar the focus Starting history with free prior the grew am cash for to we year That that many I'm our levers inflationary We excellence, headwinds. highlights. the years self-help strong achieve in year. despite company adjusted and team's year-over-year satisfied XXXX on I pleased our expanding producing the XX our results said, to year. full very XX%. improved of points our cash million on continued Due able We we million $XX end flow, a conditions results and year-over-year to margin not challenging operations $XX in and basis adjusted market these million

team's to short environment, of challenging on I'm $XXX I'm our price our While in results, a fell objectives economic several the prior measures year year. for million. revenue disappointed just under Compared of the proud XX% that of our efforts to we declined

our over XX% declined EBITDA $X.XX to and share. declined Our just to million, EPS $XX just adjusted adjusted per over XX%

from the a share implement EBITDA and large-cap of of results XX% results, disappointing. earnings XX% the XXXX, excellence we heels to per we know-how To brought XXXX these grew improve and have strong and continue leaders year-over-year, recruited our On commercial the Myers companies. were techniques experienced where through excellence operational to

our system measures in standardized and potential end company. past earnings and floor we experienced of processes Our delivering playbook made ingrained the best the market during times year. demand over in across Myers by accelerating the System raises company institutionalized System. Other, our and mindset simplified Business transformation Business the being cyclical of our our work as is and Myers soft now This self-help call permanent are practices the are we

our As markets, already they with We headwinds we of than have practices. been we resilient of businesses the even end are be XXXX, a more from see many these result, faced historically. experienced our when benefits will as in

fourth how initiatives on is production referred capacity with we segment to past in For example, from and more assets. a solid more optimizing delivered assets, factory. our Operational hidden the as schedule marine cyclical unlocked consumer Handling calls excellence despite productivity, headwinds operate additional results by RV, margins. strong delivering end our markets, what I've This quarter Material and delivered capacity

negatively newly Distribution In segment. its level disappointing, capitalize our this will fully improvement the for undertaken not to the capabilities also results ERP XXXX in our inefficiencies These quarter. both size, third volume ERP Distribution realignment a completed segment. force in in on system future. strategic this the scale the by that consolidation inefficiencies asset segment, quarter Myers us as have Sales a did decline allow the sales to a revenue ERP and recently segment. impacted I with as footprint short-term to the in the Fourth better costs this due system and revenue, expect will fixed to the business Longer continue reduce largely integrated productivity remediated results the of in We the unfavorably and due and from sales impacted term, well systems lack were volume in in primarily now of deliver been enable expected. sales integrated to of realignment service were optimize organization

nationwide in are positioned Industries will repair As these and initiatives to tire serve as now Myers is independent into also The from consolidation the System Distribution occurs chains, industry Material Myers rolled seeing segment the in best service benefit just centers as tire are we national accounts. up Handling Business the segment.

growth market sales $X toward business. us Systems, a of well many XXXX, We containers, continued differentiated, results. success and high-growth for Systems Horizon Material Handling which or our Finally, segment, believe and our for multiyear our Myers our e-commerce diversification we in the less strong have of about efforts and margin cases acquiring step be will all we a catalyst early Myers Horizon Signature military important excited added X. overall for announced Myers. industrial are target significantly positions In in demand development in for X products of acquisition sales Signature which be our solid growth in our represents and more XX% an EBITDA at for and prospects, programs growth to another Signature company. is moves in us to long-term in greater profitable billion channel engine Signature, transformation In achieving a our cyclicality runway. the have platforms end a the Continue of even

segment sales consolidation. as the to In the growth profitability we revenue improvements from improved and ERP to and our Distribution we addition, organization the begin demonstrate realize benefits expect

Myers Through Signature capabilities X, broader sharpened scale more smaller capability have markets. acquisitions. one with value-creating our to now larger, Signature. open deliberately We acquisitions the pursue by family like integration opportunities and will acquisition bringing growth our Today, new more Horizon unrecognizable the from learning to we I XXXX. Finally, in company is that end us across joined enables

quarters trough-like Our conditions. of our potential long-term excellence These have as Myers and sustained facing in commercial advance elements measures robust end the and we as progress with operational which for self-help excellence, key of raised will the X floor value are foundation strategy shareholder markets creation through some years. serve Horizon X Horizon when coming are the earning

on our of results call XXXX well year quarter the our Grant? as to over more turn as a I'll for XXXX and Grant review detailed details outlook. full financial fourth Now

summary and XXXX XXXX. On X.X% compared to offset decrease a Mike. Thank by not Please initiatives in million segment, acquisition. primarily lower price you, complete which sales margin profit significant XXXX, offset to increases XX.X% Net in due of was due or to margin adjusted was containment for enough in Material Rubber to Distribution segment, turn the sales was full sales gross volumes. by cost the $XXX.X a to basis, Mohawk Slide million to Adjusted the XX% financial Handling million $XX.X the with year $XXX.X gross partially $XXX.X primarily compared driven decreased were million, decline results. lower and X gross increased and dollar being

X. Slide to turn Now

and XXXX, profit vehicle Our XX.X% face points the not by consumer end challenging and gross specifically headwinds compared down XX.X% to to Marine, fourth segments were offset decreased Food margin quarter and Beverage, result quarter compared quarter, lower fourth period million in million both to last gross XX.X% efforts was fourth basis & of XX.X% prior year. the and profit. quarter for Material of agriculture gross XX.X% year, due the decreased sales compared incentive million or for million professional addition result decreases quarter X.X% XX the lower enough operating expenses to increases of same with markets market or $X.X distribution services fourth to last decreased The experiencing quarter-over-quarter, and inflationary segments. basis a in compared decrease to price Adjusted with to compensation. XXXX. year adjusted percentage the Adjusted volumes. margin Adjusted or million compared to XX.X% cost environment. in lower as lower continue $XX.X distribution the XX.X% Adjusted period. million compared EBITDA as in of end were quarter to $X.X $X.X of in both prior income to decreased SG&A same macroeconomic Fourth across decreased to EBITDA $XX.X driven Handling's quarter SG&A in points fourth XX.X% segment sales the net the meaningful the RV a containment of X.X% decrease sales as a the and year. the volume the is $X.X segment in increased XXX with period a or

$X.XX Lastly, was same adjusted period last compared $X.XX EPS in year. to the

segments the turn of to overview X performance an Slide of please Now fourth the for quarter. our for

segment period. pricing. partially higher margin lower and by volume with The driven & decreased challenged. or million favorable consumer to initiatives being Net EBITDA adjusted offset sales pricing. primarily Handling sales mix, XXX softness due markets adjusted across our decreased $X.X to by to self-help or product decrease and and XX.X% actions compared XX.X% products or EBITDA basis million Material the million or $X.X increase Distribution X.X% Distribution's by to and $X.X Food offset sales Beverage, Marine, The lower the decreased $XX.X XX.X% driven to by to paired for driven of was the increased was ago sales year-over-year, Agriculture partially a Handling's due being million, primarily year the diversified period. million end fuel XX.X% vehicle Material by sales segment, primarily volumes, $XX.X lower the demand For costs by margin EBITDA prior with points container adjusted result volume. increased RV compared net and favorable pricing especially or million, to $X.X offset continued sales

the capital cash Slide XXXX to the as for were X. million $XX.X net to million Free at period quarter of the expenditures quarter cash sales was hand flow of of Turning the $XX.X percentage Working for and for fourth flat a $XX.X million. Capital totaled last million to was compared XXXX. end the XXXX quarter compared same quarter on of $X.X year. fourth

you EBITDA flow For are And aware, full increased We ratio the a cash free operating Signature increased by our restatement X.Xx. The senior secured as which $XXX a of balance forma agreement, and all-cash existing an credit term X-year A. $XXX fiscal through of year, year approximately loan facility, to on to February previously range, well on leverage of transaction we ratio cash adjusted by strategy. million to previously Signature and capital was million million on Xx, Pro $XX.X the and with for leverage basis year-over-year through debt all of $XX which funded X announced flow XXXX the and with years to ended strong million. million a Systems sheet within on close acquisition stated X, maintains as along was Myers balanced net completed X. our February our reduce revolving new $XXX amendment us target closing company's enabled Xx an the allocation expect over next our loan is acquisition

Myers sheet and overall the flexible materialize to profile agreement smaller acquisitions if Our liquidity remains near acquisitions enhances combined right term at support secured over balance senior our price. loan the

X, please outlook to Slide Starting top for our the year Now provided where turn XXXX. line. we've with fiscal

net million and the year XX% we acquisition expect sales and are expect the expected integrate contributions We recent the Systems. adjusted XXXX impact our $X.XX $XX note, an to of as Signature growth forecasted to in Signature share we million will $XX share of largely rate will will of Capital an of are during the to On Of be effective be Systems prior the in compared expenditures financial with business. growth as per $X.XX between EPS tax This Signature driven also earnings per results. to an of year. $X.XX. double-digit range be grow revenue be exciting be by and will XX% $X.XX XX%. XXXX to these inclusive year ranges to fiscal and from XXXX and work return between EPS diluted basis, between

cyclical We and Investor can controlling to in and to challenges at our on later end investors our are both this we upcoming ongoing focused our outlook and what improve month. strategy markets profitability event forward XXXX control discussing longer-term and meet look with Day

strategy provide and pillars you, we X X strategic Thank Slides our Grant. map. slides, to legacy road Horizon in overarching of this the of have an view XX, On addition which long-term the

which on this for investors ahead Before we month. a we've today's spend as Horizon Investor X I'd will good conclude to serve our minutes call, success our few a analysts achieved of like recapping later primer initiatives, the Day and

culture. Our and operational based four strategy strategic is pillars: growth, organic on strategic M&A, excellence having a high-performing

management. asset times and firm's and critical always and supply translate through is turn effective trough trough that that a XX. end self-help XXXX. my Focusing strong ceiling pillar. excellence upcoming earnings I'll people to quarter margins the improved and on to fruit. has profitability fourth excellence a improvements capability, the to during time at through culture. Investor chain speak cyclical past that for begin like four conditions the management pillars earnings excellence to expanding learned X. to and us Chemical helping speak operational during operational over in Operational at drove through years we successfully in purchasing, the excellence markets, earnings these I'd These to all Horizon and our Day. mechanism and of improved Dow two Myers go Operational to when and in pillars straight raise I'll improving manage improved company pillars: excellence thing the is Slide on I improved floor bear our to execute One typically for rebound. Today, is positioned self-help created just of to continues foundation improved and Please near several a as are functions operational

Horizon scenarios group example, savings or generation, these will the end XXXX. -- $XX done our floor our and in establish operational flow an serve improvements for The million serve our over as trough we've will As material earnings near through of in and trough margin forward demonstrated work period move raw demand procurement RV, Marine in into well of delivered a X. us our we've cash practices, a company markets. we which best capacity We as excellence Consumer to in institutionalized greater

dozen These As plastics where large hires, very company. hires chemical several I've continue you transformed have deployed who recall, excellence I've this area companies of outside from capability our and know operational an and is strengthen made the well. Myers to

other a Now moving to the to continues Myers I into to be believe when the differentiator high-performing companies. compared people pillar, pillar culture this mid-cap pillar. small for

is Over and has are the team Myers our and expertise from the plastic sales deployed world-class talent have Indeed, runway purchasing, training industrial who transform This of It companies. chemical facing cyclically management and that operations, chain, dozens and in in marketing we currently and past helped of hired soft years, large of the this experts and supply company's Industries. X change executive we've demand potential. seasoning markets. team fundamental the is some end and

upcoming our call City. With the Investor Operator? the like to operator I'd in that, for long-term month York Day our to outlook New tough cyclical over turn RV and and with our have of When recover as navigate we these as term. ability and me Signature growth running light near, the conditions the With operational more on Horizon value our long strategy continued direction organic our for acquisition runway X through providing our gives in commercial end Marine, and of with base excellence, recover, markets and our confidence significant company for see team medium look to we breakthrough forward stronger fortification we through I Systems and running better tighter questions. at This businesses these in prospects well to this later However, better. our will faster. shareholder creation Consumer. detail and

is first today the And of Zyla go line Please from of Instructions] question KeyCorp. now Christian your Christian ahead. line is our [Operator open.

you, morning Grant Mike, Thank good Meghan. and

Good morning.

Hi Christian.

first look is, is are organic I guidance? can to What of your in at growth the to sales Good what guidance just embedded that? talk for the you is And cadence XX% toughest comp. -- first XQ expecting the My of XX%, question what have if looks the through you morning. question My addition Signature? of versus

then So you be low XQ from will are and there? the thinking acceleration

start we've we our would would the Yes, then to organic single-digit I single-digit acquisition, And a model organic to year. XX% some with trying to got to XX% overall growth say that also would a we have from current base businesses. -- the Chris, we build next we're growth, low which Signature that see over anywhere growth have

that, we And that we that the organic see year, with to guidance that, dealing with translates growth so that the the within that accelerating base cyclical markets that's have would we're the do on right But start businesses what side, with. see we to throughout particularly the really overall, now.

can in how then you versus sense quarterly we the And Or distribution? segments price? of the higher much sales a Great. should give of differently? price volume Was think meaningfully just X us about were

we and we've Material the have been for expect meaningfully a the of in with getting, What business, as seed some large is our see we a for particular, with continue business. new to business. see with some -- that disciplines some this was made to headwinds we do to price of our And the essentially that have agricultural we in price, leader we In that favorable boxes. is our that nature that Handling business In we we of we've business. we've had we that Yes. that particularly was continue some higher quarter, in that have distribution implementing with it business handling, Material would see have our changes Distribution something Price do distribution. business, some in that transform meaningful

We continue to some pricing see pressures there.

distribution the being said, have the those pricing, And at quite seen over with have just business. in at I've here and our two of Distribution that very into that effectively with a that our team a year now And other offsetting my we're is performance some then more headwinds each to I and been now this some they on expanded the business. from that leverage value-based so say on scale. somewhat we we as from I the Myers, just really say, bringing Material business With the across Handling would almost business disciplined particular, will what look

And can strategic largest right had very It's was we this a on to We decision was was move. the which next Myers XXXX acquire Tire the Mohawk, sector Supply, Christian, That competitor. If I build good a Mike. in leader Yes. is which space. it. midyear the made question. its

larger XX we've right the have organization As reconfigure a to over months the the to really focus term, bit on for sales because those near that's we additionally, wanted to and We be Then XX challenge where a to ERP We we've worked the face multiple can to wanted the synchronizing businesses, customer last integrate model. in headed. accounts had base is sales of often systems future. national the that.

year. As mentioned, of beginning this at those the ERP consolidated we've systems I

-- we well, is get goes same the and sales nation. actually the If As is level to and to that of consolidated to going going of more more additional the all What a the plus time, footprint Mohawk almost customers' we Tire gives Tire we on the the and have continued up, national of scope That's we price. focused footprint areas us be our and see, think us willingness our trend. with suppliers. outperform At included ability pay size Supply organization that's level we Supply, what purchasing and service continue the to to service will had Myers leverage that Myers into Mohawk now to that's service best highest does realigned accounts. give

I bit into push the incremental it, move the that, cost, we an we're the will in largely, disappointed an platform the bit reasons in we've half price it's rectifying setback increment a numbers fourth Obviously, bit this if year, quarter little get back mentioned. on been A a particularly but a EBITDA to can in rectified. the continue that and Distribution of double-digits of So low we're said. of for of as of

position. still XXXX. that's its us of course And so will margins over the given think, that competitive I again, And an XXXX strong translate or interesting into for business the

some you seen that walk-through I think a and XQ? end indicators sports sequential give improvement. we've through and those in the quarter? business guidance you're have levels I Is Could the as some modestly businesses? just any those your progress us showed bounced how thinking reflected embedded Great. trough RV and are that in markets about we businesses have in power this consumer-facing of you guess, year? what may And seeing does off your recovery

Yes, depends in We if, based shines are on and businesses. off operational What really how is us, that seeing and numbers We of going operate Marine. listen talk those see. to a in operate excellence how quite our markets in bit and It we The cyclical a who a really I'll that, know opinion and low I'll 'XX, bounce that I little for allows take about industries, earnings and there's to to RV my still strong. cyclical on be and to. floor establishing like a floor what we're on Grant. end that's shot look of you know at where keeping to

to think planters, or experienced now, a If higher again the markets in seeing purchases, commercial strong mailboxes are I'm do And them or Christian, cyclical going and consumer can we're and a consumer side any price nice recover for to that have benefit, operations make, trough goods of we we do purchases. like come the again, I of that inflation. when which But position discipline we see terribly cans, the RV think, business is you defer home a fine it, to side, those there still that's imposing I is right cyclical. defer faster the the lot these inflation. and I And and again, as gas do. The our you and point thing end in that's products that those goods, talk On it's things discretionary the we be add the bullish have is off the whether trough. about a have -- consumer XXXX. on down cycle, like our on rebound will have would Grant, we're do Marine in color? competitive aspects -- not as

Sure.

and with significant covered RV. would I of back no of our for business, with last you activity, think just couple year. consumer in half a things gas which we typically I the storm on say it the some had Marin drive the piece well revenue can virtually this will year,

headway We're XXX the as ultimately would that what company. that produce for an from gas military would that that business just we end would in market for with would storm see for for I military, the given business, be particularly certainly so an US shell year see growth, casing further position produce. measures anticipate to our that talked we probably and we And as as see our now historical that to Also, can a see that consumer we -- will able longer-term organically the gives us we about the a to business in see some this activity for business. increase the military our continue we

well. although end that But repair by So that the to that that auto certainly see other we as that market, in what we'll I the they business end give bit And sales. some that globally, some specifically those some too. see then tailwinds, longer-term just of about talk expanding more general, see tire we think little depending then our certainly I area we see is But general all we well, impact a grow e-commerce different with on that as that continue with of we'll of is a our And work and -- a business that as in do just Year-over-year, e-commerce but for our continue had lumpiness replenish piece the And growth markets. that tire continues area, overall, of arms happens cyclicality well. growth tailwind we will on think don't quite some so. to tailwind us as business. strong does our in to

I the just, can characteristics. is piece And doesn't one if have again, add cyclical weeks into Signature. Yes. final play. is, in It's infrastructure that owning business But Christian, X we're an

we're You've federal strong. spending has by that next XX the government very got margin. profit $X over very of being attractive strong a deployed off a that's very business infrastructure trillion Signature competitive start And position years. and the seeing

weeks company. So owning the those we the years. for seeing X that have initial continue expectations and X to business we're over And into or trends, X X strong next again,

you those guys all for raw so materials margins. look me. of If Last the just a example, come so you you Thank for Material flown there? year. Any hasn't to through handling much. lower there information Is appreciate just at in the quantify worth polyethylene to the be we I color why there. Thank gross that much. bit prices, margins? last down something benefit have else thinking Really question should Can to quite about

benefits them of one certainly. career is prices, just purchasing Yes. questions. team. as a see I we very really, We've resin I've mentioned, the our would team, And a again, strong of terms purchasing in do what in I your my with thanks, seen Christian, Overall, best for got say, the

that. I And leverage agricultural been market certainly the prices. lower some costs, has raw particularly some But so that seeing pressure, with earlier, say pricing that, mentioned end as of resin are offsetting the material we do in I would we

on that we've kind is our we the our then in with about would pricing Material operational end with of do of some business to other pressure material parts hydraulic, that additional as some other continue margins I business.And talked providing we're across also the that's although at and look offsetting that savings. So we see handling about agriculture, markets, general think

have more Thank one we believe you. I color.

Thank you. Yes.

from of is open. question line next Gabelli Our go And now Joly] [Anna the & Company. of is line your head. Please

impact able Hi hurricane my are quantify question. guys taking you of the questions. season? Carolina. and the One, thanks for of Two the to lack just

a it's million Typically, Yes, landed about about storm. Carolina, $X right. EBITDA That's for of

utilization. look drop-through million to at really your revenue, in million you that at If $X our is production of point $X high

XX% So it's drop-through. almost a

$X.XX share a storm. to per $X about it's landed So $X.XX -- million

again, And were out so have we year. we any last -- didn't

budget of that for came So short accurate, last headwind. that's bit X.X. maybe year. historically is up And unfortunately, a But that it's one we typically, a piece

looking were of dilution take into we some of Signature, of looking you you've guidance, the look XXXX, what takes do away there? when this, just Great. of and then we the puts and And kind what Okay. if at your to kind but are from reviewed performance? the And margin think

about our Carolina in say, would in offset headwinds continue initiatives of general, I self-help talked use talked the that terms some the some pricing. to of will we Yes. that I earlier, of to we

I changes see for don't have margins in that significant we'll any So our guidance.

manage to quite part I of business, continue We well. think, that the

as on some we've pricing with We XXXX. will that the likely distribution about talked in carries see improvements that through

when some come margins and then recover these of I Signature some to pick say, of do is to trough. that up markets XXXX. away how just think of would just cyclical the And we start taking -- continue that what start about see I So some would face to piece, we'll would those of historically, their off we the the similar our be markets issue for to as do quickly think

you. Okay, thank great,

Okay Carolina.

you. we for no today. on Thank questions line further have the And

to back remarks. like Myers for the I'd So team some hand closing Industries to

results Well, quarter seeing any as Thank reviewed to thank forward fourth results. the for everyone, We this Day. following this you. call you questions. to look We up joining and Investor call meetings you, any your wrap welcome in morning we our XXXX of full

you conference all today's Thank concludes for call. This joining.

You may lines. disconnect your now