Myers Industries Inc. announced results for the second quarter ended June 30.
Myers Industries President and CEO Aaron Schapper commented, “Second-quarter sales decreased as Industrial growth in Scepter military products was offset by soft demand in certain end markets, specifically Vehicle and Automotive Aftermarket. SG&A expenses were lower as we made progress on reducing costs across our organization. Our backlog increased in the second quarter for the Industrial, Infrastructure and Consumer end markets, giving us confidence in achieving year-over-year growth in the third quarter. We made significant improvements in free cash flow, generating $25 million during the quarter.
“In addition to second quarter results, today we are announcing actions that will significantly accelerate progress on our Focused Transformation program. Our board of directors has approved launching a strategic review of our Myers Tire Supply business. This will simplify our portfolio, narrow our strategic focus and enable us to prioritize core businesses that align with our mission of protecting the world from the ground up. In addition, we are consolidating rotational molding production capacity to better utilize our production assets. Finally, as we are taking these actions to set us up for improved financial performance, we remain on track to deliver our $20 million cost savings goal by the end of this year. Individually, each of these actions moves us forward; collectively, they place us on a clear path to become a stronger company that delivers consistent financial results and enhanced shareholder value.”
- Net sales: Lower demand in Vehicle and Automotive Aftermarket was partially offset by growth in the Industrial end market, particularly military products.
- Gross profit and Operating income: Decreased due to lower pricing and volume, partially offset by lower material cost and SG&A.
Accelerating Progress on Focused Transformation
Strategic Review of Myers Tire Supply Business
The company announced that its board of directors has approved launching a strategic review of the Myers Tire Supply business. Revenue from this business was $189 million over the last 12 months, ending June 30. Myers Tire Supply is a well-recognized brand with a long history in the Automotive Aftermarket sector. The outcome of this review is to ensure the continued growth and success of the business.
“One of our Focused Transformation program objectives is to create clear strategies to improve the profitability of our overall portfolio,” stated Schapper. “The strategic review process we are launching will enable us to achieve this, as well as streamline and focus our resources on core businesses that align with our mission of protecting the world from the ground up. It has become clear to me, the board, and the entire executive team that this is the right decision to improve the long-term earnings profile of Myers.”
F. Jack Liebau Jr., chairman of the board, added, “As a board, we are confident in this management team and unanimously support the strategic review of Myers Tire Supply. If the review results in the divestiture of MTS, we believe Myers will be a simplified, more profitable company better able to create long-term shareholder value.”
Myers said it does not intend to disclose developments or provide updates on the progress or status of the review until further disclosure is appropriate or required.
Click here to view the full release and quarterly financial statements.
