Raw Material Costs May Hamper Earnings Growth in 2000 for Myers
22 March 2000
Escalating Raw Material Costs May Hamper Earnings Growth in 2000 for Myers Industries; Fundamentals Remain Strong for Long-Term Performance
AKRON, Ohio--March 22, 2000--Myers Industries, Inc. (AMEX:MYE) announced today that a continuation of escalating raw material costs may affect the Company's ability to grow 2000 earnings beyond the record $1.55 per share in 1999.The earnings expectations for 2000 reflect rising costs in raw materials Myers uses for its manufactured plastic products, both in North America and Europe. Prices for Myers' primary raw materials, High Density Polyethylene (HDPE) and Polypropylene, increased substantially throughout last year. Additional increases are expected to continue through the first half of 2000.
"We made acquisitions in 1999 that expanded our plastic products base and significantly increased our use of plastic resins," said Stephen E. Myers, President and Chief Executive Officer. "The persistent increases in raw material prices we have experienced recently expose us to short-term margin pressure."
Commenting on actions the Company is taking to improve short-term results and optimize long-term performance, Myers stated "We are continuing to increase productivity and capitalize on synergies in our plastic manufacturing operations to reduce costs, such as leveraging volume purchasing power for raw material. We are trying to balance product pricing initiatives with raw material costs and will pass price increases along in our markets wherever possible.
"The outlook is positive for increases in our top line with improvements in unit volume growth. In many markets we serve, our brands have leading or significant share, and we have strong relationships with customers.
"While we will always face challenges such as unstable raw material costs, our business fundamentals remain strong: diverse product offering, multiple growth platforms, brand strength, product innovation, broad manufacturing capabilities, and international reach. We believe that Myers is in good position for sustainable long-term growth."
Myers Industries focuses on long-term results versus short-term gains. "We have increased sales in 9 of the last 10 years, from $202.1 million to $580.8 million," said Myers. "Earnings have increased in 8 of the last 10 years, from $10.8 million to $31.2 million. We have also increased our dividend for 24 consecutive years. Our performance over the years reflects our commitment to managing for the long term and building enduring shareholder value."
Myers Industries, Inc. has $580.8 million in sales and is an international manufacturer of plastic and rubber products for industrial, agricultural, automotive, commercial, and consumer markets. The Company is also the largest wholesale distributor of tools, equipment, and supplies for the tire service and automotive underbody repair industry in the United States.
Forward-Looking Statements: Statements in this release may include forward looking statements that involve a number of risks and uncertainties that could cause actual results to materially differ from those discussed. Any statement that is not statement of historical fact may be deemed to be a forward-looking statement.