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The Akron plastics maker and automotive parts distributor on Monday said it anticipates taking a $23 million to $28 million cash and noncash charge as it makes what it called "aggressive" changes to the lawn and garden segment over the next 12 months.
The group, which makes such items as plastic plant containers, provided $300.9 million, or 32 percent, of Myers' overall sales of $918.8 million in 2007.
The company's next largest group, North American material handling, made up 28 percent of revenue at $267.2 million.
Once the changes are fully implemented, Myers said it expects to save about $20 million a year before taxes.
Shares of Myers on Monday fell
50 cents to $11.97. Shares are down 16.4 percent, including reinvested dividends, since Jan. 1 and are down 37.6 percent from a year ago.
"Our objective with the initiatives announced here today is to further improve our manufacturing network and processes to minimize operating costs and maximize customer satisfaction," John C. Orr, president and chief executive officer, said in a prepared statement. "That includes rationalizing our manufacturing footprint to lower overhead and distribution costs, improve operational effectiveness and reduce working capital requirements. In doing so, we will be better positioned to serve our customers with the products they need, manufactured at the right location for the customer, and delivered when they need them."
The company said it will implement "aggressive productivity and manufacturing initiatives." That could include plant closings and production line consolidations.
Lawn and garden sales were $155.3 million for the first six months of this year, down 7 percent for the same period in 2007, the company reported last month. Income was $6.9 million for the six months ending June 30, 2008, down 30 percent from the $9.9 million reported in 2007. The segment was hit hard by high raw material prices, the slow housing market and a colder and wetter than usual planting season, the company said.
The company on Monday declined to release more specifics, other than saying the plan's focus will be on customers and shareholder value.
It said key action areas include:
--Manufacturing consolidation and capacity realignment.
--Distribution and supply chain optimization.
--Forecasting, work flow and inventory management programs to drive increased productivity and customer service excellence.
Myers said its expects to take noncash charges of $14 million to $17 million as part of the total cost of the plan related to severance, rationalization, asset write-downs and other items.
The Akron-based Akro-Mils unit falls under the lawn and garden segment. The company makes plastic pots, planters, hanging baskets, birdbaths and similar retail items.
In 2007, Myers bought Canada-based ITML Horticultural Products for $110.1 million to expand its lawn and garden group in North America. ITML makes plastic containers for professional horticultural growers.
Myers is celebrating its 75th anniversary this year.
Jim Mackinnon can be reached at 330-996-3544 or jmackinnon@thebeaconjournal.com.
To see more of the Akron Beacon Journal, or to subscribe to the newspaper, go to http://www.ohio.com. Copyright (c) 2008, The Akron Beacon Journal, Ohio Distributed by McClatchy-Tribune Information Services. For reprints, email tmsreprints@permissionsgroup.com, call 800-374-7985 or 847-635-6550, send a fax to 847-635-6968, or write to The Permissions Group Inc., 1247 Milwaukee Ave., Suite 303, Glenview, IL 60025, USA.
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