Myers Industries(US:MYE)2023-03-01 16:33Financial Data and Key Metrics Changes - The company achieved annual revenue growth of 18%, with a 10% increase on an organic basis, adjusted EBITDA growth of 51%, and adjusted EPS growth of 73% [3][4] - For the full year, net sales reached $900 million, an 18% increase compared to the prior year, with adjusted gross profit up 34% to $284.1 million [7][8] - Adjusted gross margin expanded by 370 basis points during the year [7] Business Line Data and Key Metrics Changes - In the Material Handling segment, net sales decreased by $5.1 million or 3.4% due to decreased demand in vehicle and industrial markets [69] - The Distribution segment saw net sales increase by $18.3 million or 35% year-over-year, with organic net sales up 2% primarily due to higher pricing [71] - Adjusted operating income for the Material Handling segment increased by 58.4% to $21 million, while the Distribution segment's adjusted operating income decreased by 24% to $4.1 million [70][71] Market Data and Key Metrics Changes - The company anticipates sales in the Material Handling segment to be comparable to last year due to continued soft demand in certain markets [27] - The outlook for 2023 includes expected net sales growth in the low to mid-single-digit range, primarily driven by the Mohawk Rubber acquisition [75] Company Strategy and Development Direction - The company is focused on completing Horizon 1 of its strategy, aiming for $1 billion in revenue and a 15% EBITDA margin [4] - The company plans to institutionalize advancements into the Myers operating system, which will standardize work processes across all business units [39][40] - The M&A strategy has been refined, with a focus on acquiring smaller companies to improve integration processes before pursuing larger targets [34][36] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate a choppy macroeconomic environment, citing strong performance in agriculture and expectations for recovery in the vehicle market [53][55] - The company remains optimistic about achieving the $2 billion sales target by 2026, despite current market uncertainties [58] Other Important Information - Free cash flow for the full year of 2022 was $48.3 million, an increase from $27 million in 2021 [73] - Capital expenditures for 2022 were $24.3 million, with cash on hand at year-end totaling $23.1 million [74] Q&A Session Summary Question: Outlook for organic sales growth in 2023 - Management acknowledged a softening economy impacting organic sales growth but remains confident in the company's overall direction and market positioning [51][52] Question: M&A opportunities and operational bandwidth for integration - Management confirmed readiness for further acquisitions, emphasizing a disciplined approach to M&A and integration processes [60][57] Question: Expected changes in gross margins for 2023 - Management aims to further expand gross margins in 2023 through price holding and operational efficiencies, despite potential challenges [86]