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Akron plastics maker seeks to lower costs, apply new initiatives
Published on Friday, Jul 25, 2008
Beacon Journal staff report
Myers Industries Inc. reported slightly higher net income for the second quarter on lower revenue Thursday, but said higher energy prices are driving up costs as well as sapping sales.
The Akron plastics maker and tool distributor is looking for additional ways to cut costs and implement new initiatives as part of a review of business operations, John C. Orr, president and chief executive officer, said in a news release.
Myers reported net income of $2.9 million, or 8 cents a share, on sales of $214.6 million for the quarter ending June 30. That compares to net income of $2.5 million, or 7 cents a share, on revenue of $225.6 million for the same period in 2007.
Shares of Myers fell 47 cents, or 4.8 percent, to $9.29. Shares are down 35.1 percent, including reinvested dividends, since Jan. 1 and are down 56.5 percent from a year ago.
''The company's sales and profits in the quarter are indicative of slow demand due to the ongoing weak economic conditions coupled with soaring energy and raw material costs,'' Orr said in the statement. ''While we implemented aggressive price increases during the quarter, these simply have not been able to fully offset the timing and magnitude of higher resin costs. Despite these pressures, the company performed well in a difficult second quarter operating environment.''
Myers has increased its prices to deal with soaring raw materials and energy costs, but customers have responded by reducing or delaying purchases, the company said. Rising oil and natural gas costs used to produce plastic explain most of the higher raw-materials prices, the company said.
''We must continue to implement aggressive pricing in our businesses,'' Orr said. ''This is imperative for us to protect our company for the long term.''
For the six months ended June 30, Myers reported earnings of 33 cents a share on net sales of $464 million. Net income was 33 percent lower than the 49 cents a share reported for the same period in 2007.
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