AKRON, Ohio, April 14, 2004 (PRIMEZONE) -- Myers Industries, Inc. (NYSE:MYE):
April 2004
Approximate Price............$12.06 Book Value per Share.......$9.76 52-Week Price Range....$13.30-$9.20 Dividend (Yield)....$0.20 (1.7%) 2002 EPS (Diluted)............$0.80 Long-term debt % cap.........42% 2003 EPS (Diluted)............$0.54 P/E 2003 EPS...............22.3x 2004 Est. EPS.................$0.81 P/E 2004 Est. EPS..........14.9x Market Capitalization.........$364M Shares Outstanding.........30.2M Year Ends..................December Public Float.................63%
Company Contact: Max Barton, Investor Relations Manager 330-253-5592
THE COMPANY
The stock of Myers Industries, a diversified industrial manufacturing company with annual sales expected to exceed $720.0 million this year, is selling at an extremely low valuation. Myers derives approximately three-fourths of its business from manufacturing polymer products for industrial, agricultural, automotive, commercial and consumer markets, and the remainder of its business from the distribution of tools, equipment, and supplies for the tire, wheel and under-vehicle service industry. Based in Akron, Ohio, Myers has 21 manufacturing facilities in North America and six in Europe, as well as 40 distribution branches in North America and five internationally. Last year about three-fourths of its business was from North America and the rest from Europe.
Originally Myers began as a distributor of principally automotive aftermarket repair products related to servicing work in and around vehicles' tires. Today, Myers Tire Supply(r) distributes products ranging from tire changers and high speed digital wheel balancing equipment to air tools, hand tools and other repair and retread supplies. Myers Tire Supply(r) is the nation's largest distributor of products in this market segment. This business generally has been counter-cyclical to the Company's other businesses and continues to be an important contributor to cashflow as it has always been profitable since its founding some 70 years ago.
The Company's major manufactured products are: reusable plastic material handling containers and pallets; plastic storage and organization products; plastic horticultural pots and trays; decorative planters; material handling, waste handling and transport carts; plastic storage tanks; industrial rubber; and rubber OEM and replacement parts. Myers Industries has an expanding portfolio of established industrial and consumer brands that principally include: Akro-Mils(tm); Allibert-Buckhorn(tm); Ameri-Kart(tm); Buckhorn(r); Buckhorn Rubber(tm); Dillen(r); Listo(tm); PatchRubber(tm); Michigan Rubber Products(tm); and Wek Industries(tm).
GROWTH THROUGH ACQUISITIONS
Myers has consummated 13 acquisitions (including two at the beginning of this year) since 1987 when it made its first large acquisition, Buckhorn Inc. Management's acquisition criteria is to acquire profitable companies complementary to its product offerings, manufacturing capabilities and its customer base. Nineteen-ninety-nine was Myers most prolific acquisition year when it spent $213.6 million for the acquisition of Allibert Equipment in France and Allibert-Contico in the United States, international leaders in reusable containers and pallets; Dillen Products, a prominent manufacturer of plastic flower pots and trays; and Listo Products, a growing manufacturer of plastic flower planters.
The Company significantly increased its debt load and interest expense by acquiring two more companies in 2000 as total debt peaked that year at $312.0 million, but through strong cash and financial management, long-term debt has been reduced by approximately 31 percent at the end of 2003 even though earnings and profitability during this period were continually under pressure from both the recession and higher resin prices. Further, interest expense has been reduced by 55.4 percent from $22.4 million in 2000 to $10.1 million in 2003.
Collectively these acquisitions are positioning the Company to strengthen its product development and cross-marketing/cross-selling strengths. Thus, cash flow should improve substantially as profitability returns to more historic levels.
GROWTH THROUGH PRODUCT DIVERSITY AND CAPABILITIES
In each of its product groups, Myers Industries seeks to achieve leadership positions through a diverse product offering, new product development, brand strength, customer satisfaction, and as suitable, acquisitions. These focal areas have afforded the Company strong market positions including:
-- International leader in reusable plastic bins, containers,
and pallets for manufacturing, distribution, and food
markets
-- Dominant North American producer of plastic flower pots,
trays and planters for growers, retailers, and consumers
-- Leading supplier of tanks and specialty parts to the RV
market
-- Top manufacturer of engineered rubber and plastic parts for
automotive and heavy-truck markets
Innovation and value creation through new products, services, and capabilities is key to growth and one of the most basic strengths of Myers Industries. Myers innovations to meet customer challenges or changing market needs are impressive, and include products such as:
-- Bi-color Stack & Nest Material Handling Containers
-- Custom Rubber for Golf Club Grips
-- Citadel(tm) Bulk Liquid Transport Containers
-- Environmentally-Safe Tire Retread Cements
-- Center Flow Bulk Seed Distribution Containers
-- 200+ Rubber Air Intake Hose Configurations
-- Textured, Decorative Resin Planters
-- Custom-Engineered HVAC Components
What differentiates Myers Industries from both small and large competitors in its product groups is the synergy of product selection; the unmatched design and manufacturing capabilities to create and produce most any plastic or rubber product using injection and structural foam molding, vacuum forming, rotational molding, blow molding, compression molding, rubber compounding, rubber calendaring, rubber extrusion, rubber-to-metal bonding and metal forming; and international reach to serve customers around the world. Myers' flexibility to custom manufacture products for a specific market and then expand the product's application into other markets offers excellent potential for growth.
The management of Myers Industries is an experienced and dedicated team that has the support of many talented people throughout the organization. The success of its product development programs and its acquisitions strategies are quite apparent as the Company seeks to improve its financial performance.
GOING FORWARD
The Company's sales from 1993 to 2003 have grown annually at an average rate of about 10.5 percent. For 2003, sales were a record $661.1 million, up almost nine percent from the prior year. Myers ended the year by recording the highest quarterly sales period in its history. Higher raw materials prices, principally resins, however, continued to penalize profitability, as net income declined by almost a third to $16.3 million, or $0.54 per diluted share, compared with $24.0 million, or $0.80 per diluted share. Much of the Company's improvements in efficiencies and cost control programs were negated by rapidly rising resin prices, which account for a significant amount of the cost of goods sold and produced the lowest gross profit margin since prior to being a public company in 1971. The Company began rising prices in the 2003 fourth quarter and the initial impact of this and more stable raw material prices improved earnings 7.6 percent over the same period last year.
In March, Myers acquired Michigan Rubber Products (MRP) and WEK Industries, two manufacturing companies that produce engineered rubber and plastic components, systems and assemblies for automotive OEMs and Tier 1 suppliers. MRP and WEK have combined annual sales of $60.0 million. Both acquisitions provide product and process enhancements to the Company's growing capabilities for custom industrial and OEM rubber products. Further, the Company introduced a number of new products last year that are achieving high acceptance. Buckhorn, a leader in developing reusable material handling containers, introduced EverKote(tm), a new structural resin coated wood product for decks, fences and children's playsets. The Company's recognized Listo planter line was expanded with a new series of intricately-detailed resin planters. Thus on a proforma basis, sales this year will be $721.0 million; but, because the Company enters 2004 with higher selling prices, the potential of new product sales, and a better economy, business should be much higher this year.
Over the past ten years, the average net profit margin was 4.6 percent. Earnings peaked in 1999 at $1.02 per share; however, net profitability peaked in the prior year at 7.3 percent. If raw material prices hold constant, the benefits of higher prices and expanding product lines take hold, the Company has earnings potential well in excess of $1.00 per share although this is not an estimate for 2004. Further, the Company is selling at just under a 20.0 percent premium to book value, five times EBITDA, one-half of its annualized sales rate and 14.4 times 2004 First Call's consensus earnings estimate of $0.81 per diluted share. The Company has always been shareholder oriented, paying a cash dividend since 1971.
The information contained herein is based on sources we believe to be reliable, but its accuracy is not guaranteed. This report was prepared solely for informational purposes and does not constitute an offer to sell or the solicitation of an offer to buy any security. This report contains forward-looking information about the company's projected operating results and the company's plan for achieving such results. There can be no assurance the company will achieve its projected financial results, and actual results may differ materially. Opinions, estimates, or forecasts regarding Myers Industries performance made above do not represent the opinions, forecasts, or predications of Myers Industries, Inc., or its management. SM Berger & Company, Inc., an independent investor relations consulting firm, receives remuneration from Myers Industries, Inc., and other companies, to improve their investment visibility. SM Berger & Company is not an investment adviser or broker/dealer. SM Berger & Company and its employees do not own stock in Myers Industries, Inc.