Myers Industries (NYSE: MYE) reported Q1 EPS of $0.23, $0.04 better than the analyst estimate of $0.19. Revenue for the quarter came in at $139.12 million versus the consensus estimate of $146.9 million.

First Quarter 2019 Business Highlights

• GAAP income per diluted share from continuing operations was $0.19, compared to $0.25 for the first quarter of 2018
• Adjusted income per diluted share from continuing operations was $0.23, compared to $0.24 for the first quarter of 2018
• Net sales decreased 8.8% compared to the first quarter of 2018
• Gross margin expanded 180 basis points to 32.7%
• Generated cash from continuing operations of $5.3 million and free cash flow of $2.4 million
• Company reaffirms full-year outlook of GAAP income per diluted share from continuing operations estimated to be between $0.70 and $0.80 for the full year 2019 and adjusted income per diluted share from continuing operations estimated to be between $0.75 and $0.85 for the full year 2019

“Our first quarter financial performance was in line with our expectations as we continued to improve our operations and margins. We continued to execute our Distribution Segment transformation and delivered sales growth for the second consecutive quarter, despite one less selling day compared to the first quarter of 2018. Net sales in our Material Handling Segment decreased due to more normalized seed box demand and continued decline in the Recreational Vehicle (RV) market. Despite this, we expanded our enterprise gross profit margin by 180 bps to 32.7% and adjusted operating income by 6.2%, demonstrating the impact of our continuous improvement operating model,” said Dave Banyard, President and Chief Executive Officer of Myers Industries.

Mr. Banyard continued, “Our cash flow performance during the quarter was impacted by higher variable compensation payouts and increased capital spending compared to the first quarter of 2018, as well as a build-up of inventory in our Scepter business to prepare for anticipated demand for the new SmartControl fuel container in our consumer end market. We anticipate that our cash flow performance over the remainder of the year will return to more consistent levels seen in the last couple of years.”

GUIDANCE:

Myers Industries sees FY2019 EPS of $0.75-$0.85, versus the consensus of $0.79.

2019 Outlook

For fiscal year 2019, the Company anticipates total revenue will be flat on a constant currency basis compared to the prior year. Anticipated sales increases in the consumer, industrial and auto aftermarket end markets are expected to be offset by sales decreases in the food & beverage and vehicle end markets due to more normalized seed box demand and a continued decline in the RV market following years of steady growth. The Company anticipates a favorable sales mix, combined with an ongoing focus on executing pricing and continuous improvement actions, leading to adjusted operating margin growth in 2019. The Company expects depreciation and amortization to be approximately $25 million, net interest expense to be approximately $5 million, and the effective tax rate to be approximately 27%. GAAP income per diluted share from continuing operations is estimated to be between $0.70 and $0.80 and adjusted income per diluted share from continuing operations is estimated to be between $0.75 and $0.85, based on a fully diluted share count of 36.0 million shares. Capital expenditures are anticipated to be approximately $10 million.

For earnings history and earnings-related data on Myers Industries (MYE) click here.