Myers Industries, Inc.
Q1 2013 Earnings Call Transcript

Published: 24 Apr 2013

[Operator:]

Greetings. And welcome to Myers Industries First-quarter 2013 Earnings Call. At this time, all participants are in a listen-only mode. A brief answer-and-question session will follow the following presentation. (Operator Instructions). As a reminder, the conference is being recorded. It is my pleasure to introduce your host, Monica Vinay; Director of Investor Relations and Communications of Myers Industries. Thank you, Ms. Vinay. You may now begin.

[Monica Vinay:]

Thank you. Good morning, and welcome to the Myers Industries first-quarter 2013 earnings conference call. I'm Monica Vinay, the Director of Investor Relations at Myers Industries. Joining me today are John Orr, President and Chief Executive Officer; Gregg Branning, Senior Vice President and Chief Financial Officer and Corporate Secretary; Joe Grant, Senior Vice President and General Manager with our Handling Segment; Chris Koscho, Vice President and General Manager, Lawn & Garden Segment; and Todd Smith, the Vice President and General Manager of Distribution Segment. Earlier this morning, we issued a news release outlining the financial results for the first quarter of 2012. If you have not yet received a copy of the release, you can access it on our website at www.MyersIndustries.com under the investor relations tab. This call is also being webcast on our website and will be archived there, along with a transcript of the call, shortly after this event. Before I turn the call over to Management for remarks, I would like to remind you that we may make some forward-looking statements during the course of this call. These comments are made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. Such statements are based on Management's current expectations, and involve risks, uncertainties, and other factors, which may cause results to differ materially from those expressed or implied in these statements. Further information concerning these risks, uncertainties, and other factors is set forth in the Company's periodic SEC filings and also may be found in the Company's 10-K filings. I am now pleased to turn the call over to John Orr, President and Chief Executive Officer. John?

[John Orr:]

Thank you and good morning to all. It's a pleasure to have you join us today. Gregg and I will discuss the first quarter and we'll open it up for questions. As Monica mentioned, we have the Vice President and General Managers of three of our four segments joining us today. They will be available to answer questions, regarding each of those segments during the Q&A part of the presentation. So, let's start with slide three of the presentation. Net sales in the first quarter of 2013 increased 8.1% to $215 million from $198.8 million in the first quarter of 2012. Sales increased in the Material Handling and Lawn & Garden Segments were relatively flat in the Distribution and Engineered Products Segments. Gross margin was 27.1% in the first quarter of 2013 compared to 29.2% in the first quarter of 2012. A less favorable product and customer mix year over year led to the decrease in gross profit margin. Reported net income for quarter was $7.9 million, or $0.23 per diluted share, compared to net income of $10.0 million, or $0.29per diluted share, in the first quarter of 2012. On an adjusted basis, which excludes restructuring costs and other special items, are earning per diluted share in the first quarter were $0.24, compared to $0.30 in the first quarter of 2012. Our results for the first quarter were as we anticipated. We continue to expect that operating results should continue to improve year over year. We're focused on improved sales, cost reductions, introduction of new products and overall improved performance for the Company, as well as each of our business segments, including Lawn & Garden. Before I turn the call over to the Gregg, I'd like to comment on a recent recognition that we received. I'm pleased to inform you for the second year in a row; Myers was named one of America's 100 Most Trustworthy Companies in Annual Survey Commission by Forbes. The 100 Most Trustworthy Companies list was compiled by GMI Ratings, which analyzed more than 8,000 companies created our newest exchanges, with market caps of $215 million or more. GMI Ratings ranked the nation's top 100 companies that have consistently demonstrated transparent and conservative accounting practices and solid corporate governance and management. I'd now like to turn the call over to Gregg Branning, our Chief Financial Officer, who will provide with the details regarding our financial results. Gregg?

[Gregg Branning:]

Thanks, John. Good morning all. I'll comment first on the overall financial results, which is summarized on slide three of the presentation, then I'll review the results by business segment and review the items on slide three that John has all ready discussed. SG&A expenses in the first quarter of 2013 were $45.1 million, compared to $40.9 million in the first quarter of 2012. The increase year over year was driven primarily by incremental SG&A expenses, resulting from the acquisitions of the Novel and Jamco businesses and investments in IT. Additionally, in the first quarter of 2012, there was a $1 million partial reversal of a bad debt accrual related to one specific customer that favorably impacted SG&A. Our effective tax rate during the quarter was 35.1%, and we anticipate that the effective tax rate for the full year 2013 will be 37%. Now, if you would please turn to slide four of the presentation. Cash flow used for operations for the three-month ended March 31st 2013 was $6.5 million, compared to $6.4 million during the first quarter of 2012. And this is typical during the first quarter of the year over the seasonal increase in working capital that resulted in the use of cash during the quarter. During the first quarter of 2013, the Company repurchased 136,126 shares of stock at an average price of $14.36. Capital expenditures totaled $4.5 million for the three months ended March 31, 2013 and estimate that the capital expenditures in 2012 will be approximately $30 million to $35 million and about 45% of that will be for growth-oriented projects. We continue to maintain a strong balance sheet, which is reflected in our low net debt to total capital ratio of 29.8%. Now, I'd like to turn to our business segment and their performance is summarized from slides five through eight of the presentation. The results are compared with the same period in 2012; how we referenced in the adjusted pre-tax income information by segment, as it appears on the Reconciliation of Non GAAP Financial Measures, included at the end of the slide presentation in an earnings release issued earlier today. In Material Handling Segment, net sales for the first quarter were $80 million compared to $65.2 million for the first quarter of 2012. Sales generated by the Novel and Jamco acquisitions were the main driver behind the increase year over year. Adjusted income before taxes in Material Handling Segment was $9.9 million in the first quarter of 2013, compared to $13.2 million in the first quarter of 2012. A net favorable customer and product mix during the quarter more than offset the impact of the higher sales volume. Net sales in the first quarter of e Lawn & Garden Segment increased to $60.4 million from $59.2 million in the first quarter of 2012. Adjusted income before taxes in the Lawn & Garden Segment was $2.7 million in the first quarter of 2013, compared to $1.2 million in the first quarter of 2012, resulting a 125% increase. The segment was able to lower cost by driving (inaudible) to the improvement and material cost savings. These actions, combined with the higher sales, rather the increase in adjusted income before taxes during the quarter. A work that was done in the quarter does not include benefits from our internal projects announced earlier this year that we expect to deliver an additional $5 million of annual savings in 2014. Net sales in the Distribution Segment were $42.6 million in the first quarter of 2013, compared to $42.7 million for the first quarter of 2012. Adjusted income before taxes in the Distribution Segment was $2.9 million in the first quarter of 2013, compared to $3.9 million in the first quarter of 2012. We had a less favorable product mix of supplies versus equipment, as we captured market share in our equipment product line during the quarter, combined with planned IT expenditures resulted in a lower income before taxes year over year. Net sales in the Engineered Products Segment were $37.0 million in the first quarter of 2013, compared to $37.2 million in the first quarter of 2012. Strong sales in the marine market during the first quarter were offset by more normal demand in the transplant auto market compared to last year. Adjusted income before taxes in the Engineered Products Segment was $5.1 million in the first quarter of 2013, compared to $4.7 million in the first quarter of 2012 on flat sales and was driven by our cost reduction. This concludes our financial review. I'll now turn the call back over to John for some summary and outlook remarks. Thank you very much. John?

[John Orr:]

Thanks, Gregg. Would you please turn to slide nine of the presentation? As previously mentioned, the first quarter was in line with our expectations. We did make progress on several initiatives. So, looking forward, I'll talk about each of our segments. Our Material Handling Segment, starting in the second quarter, we expect to continue to see increased sales, driven by our recent acquisitions and new product introductions. Our Lawn & Garden Segment, we expect to continue increase profitability in both the second quarter and full year through our cost reductions, material substitution, introduction of new products and increased sales. This increased profitability is outside of the internal project that we announced earlier this year, which is expected to generate $5 million in annual savings in 2014. In our Distribution Segment, we anticipate that we will continue to grow our market share, as we did in the first quarter, offsetting a continued weak replacement higher market that will result in increased profitability in the second quarter and the full year. Finally, in our Engineered Product Segment, we anticipate continued strength in the marine market and that the transplant auto market will remain at more normal levels, compared to last year, when it was still recovering from the tsunami in Japan. As I said earlier, we finished the first quarter as we expected. And overall, we expect to deliver improved year-over-year results for the full year of 2013, starting with the second quarter. That concludes Management's presentation. I'd like to turn it back over to Monica, so that we can take your questions.

[Monica Vinay:]

Thank you, John. The operator will now direct the Q&A phase of the presentation. As a reminder, please keep in mind that in addition to John and Gregg, the following VP general managers are also available to answer questions – Joel Grant, Senior Vice President and General Manager of our Material Handling Segment; Chris Koscho, Vice President and General Manager of our Lawn & Garden Segment; and Todd Smith, Vice President and General Manager of our Distribution Segment. Go ahead, please.

[Operator:]

(Operator Instructions). One moment please, while we pull the questions. Thank you. Our first question is from the line of Adam Josephson, KeyBanc Capital Markets. Please, state your question.

[Adam Josephson:]

Thanks. Good morning, everyone.

[John Orr:]

Hey, good morning.

[Gregg Branning:]

Good morning.

[Adam Josephson:]

John, what – in terms of capital allocation, what are your priorities at this point? Excuse me. And where do buybacks get into that equation?

[John Orr:]

Well, Adam, we – I think we're pretty consistent with our per capital allocation. First off, you want to maintain the current business; that really involves working capital for growth, CapEx, safety and, of course, dividends. Our second priority would be to grow stakeholder value. That's really where we spend our capital on new product development. Growth capital, we target in ROIC, of equal to 15% or greater, process improvement, acquisitions, employee retention and training. And then, finally, from a return to – a return of capital to stakeholders, that reduction dividends and share will be purchased. So, the question about share repurchase is certainly one of our main uses of cash, as a priority.

[Adam Josephson:]

Okay. In terms of leverage, what do you think the optimal leverage for these businesses?

[John Orr:]

Well, we kind of – go ahead, Gregg.

[Gregg Branning:]

Hey, Adam. It's Gregg.

[Adam Josephson:]

Hey, Gregg

[Gregg Branning:]

We had lived and we're comfortable with the 2 to 1 EBITDA ratio, going as high as 2.5 to 1. As you know, we've been training at about 1 to 1. But we're comfortable levering up the balance sheet under the right circumstances.

[Adam Josephson:]

For either in acquisition, buybacks or otherwise?

[John Orr:]

That's correct. That's correct.

[Adam Josephson:]

Right, right. M&A put, M&A pipeline, anything of note there?

[John Orr:]

Nothing that I can say publicly. We continue – as we say, it's time to continue to look at opportunities, as they're presented to us and – but there's nothing that I can share with you today.

[Adam Josephson:]

Okay, great. And then, just a remark on Material Handling, obviously, this business has been doing quite well in the recent quarters. I mean, have you seen any change in competitive dynamics in that business, in light of the margins that you're earning there?

[John Orr:]

I will let Joel Grant, who is our Vice President and General Manager of Material Handling talk a little bit about that.

[Adam Josephson:]

All right.

[Joel Grant:]

I don't think we've seen a lot of change in competitive dynamics, I think, as you know, compare to discussions. We are focused also on markets that are outside traditional Material Handling. So, we're looking at those, as much as we're looking at the other folks that are in Material Handling. So, that's what our focus was.

[John Orr:]

You know you've got to keep in mind that Material Handling is a solutions business, okay? We're always out there trying to help customers, who have very specific issues and problems. And that's where Joel and his team come in. When they can help a customer that's got an issue around transporting liquid food products, for instance (inaudible) market that can do it. So, that's why we're – Joel's answer is right on.

[Adam Josephson:]

All right. Thanks, folks.

[Operator:]

Our next question is coming from the line of Chris Manuel with Wells Fargo. Please proceed with your question.

[Chris Manuel:]

Good morning, gentlemen.

[Gregg Branning:]

Good morning, Chris.

[John Orr:]

Good morning, Chris.

[Chris Manuel:]

Couple questions. First, let me start with one for your John. You during the quarter you had an (inaudible) executive departure.

[John Orr:]

Yes, Sir.

[Chris Manuel:]

Because you maybe – you're a little bit with respect to an intention to either replace the position internally, externally, or where are you going on with that process?

[John Orr:]

Yes, yes, Chris. Yes – we. There's been no decision made on that. One of the reasons that we have – the vice president and general managers that operate our segments is here today is just to be sure that we – that everybody knows, as evidenced by their leadership, that we have an outstanding group of senior managers here, who are operating their businesses. So, there's no real big concern or rush to (inaudible) position. Perhaps, kind of down the road, there has to be consideration, whether be internally or externally, you know, as we always looked at succession for everybody in the Company that includes myself. At this point, there's no decision made.

[Chris Manuel:]

Okay. And then the second question I had – and I'm hoping each of the gentlemen you have sitting with you, guys, in the room can take a downturn at this. But your – as you look through the different positions, your four different divisions – or actually five or four, I'm sorry. As you look at the four different divisions, can you maybe talk a little about what you've seen with respect with base business volumes in the quarter, number one? Number two, where you are in new product introduction? I know that's supposed to be a – or is a significant help for your or opportunity you're looking forward. And then, finally, as you look through the balance of the year, what do you think gives you your best opportunity to show improvement within your business, whether it's new products, operational initiative or, in the space, business improvement, et cetera. Maybe, John, if you want to take that off and talk about Engineered Products first.

[John Orr:]

Sure. Engineered Products has been a good business for us, a good segment for us. There's certainly growth in the (Americard) business. That's both marine and (NRV). We've seen a nice growth in marine, except over 50%. And although it's not a huge part of our total business, it's certainly a nice growth opportunity and a very good contributor from profitability standpoint for us. WEK continues along. It's a strong business, certainly as a transplant supplier. And there's certainly a strong interest there in providing addition custom products as well. And, of course, pat rubber, I'll let Todd talk a little bit about that when he talks about the Material Handling and said it will certainly goes hand in hand. It's been a very strong business for us, and we continue – we think that we will continue to be strong business. So, Todd, I'm going to let you (inaudible) and talk about material. Okay. I'm going now.

[Todd Smith:]

Sure. This is Todd Smith from Distribution Segment. I guess, just a few points on the – of course, the entire market. You know we continue to see a weak market in the first quarter, and expect (inaudible) to be flat to slightly up for the full year. But the plans we have in the place and the initiative, they're really focused on driving market share gain and our plans to do that of group competitive service offerings and geographic expansion. And the other really big focus for us is expanding our markets through new product offerings. And patch turned around those same markets. We expect patch to have a good year, also. And we really are extending in other markets with that business also.

[John Orr:]

Chris?

[Chris Koscho:]

This is Chris Koscho. For us, Q1 – yes, the growth in Q1 was really organic growth. And as we proceed through the rest of the season, it is coming in as we expected; we expect to see some of the success from our product launches in the second half of the year. But I would say, at this point, what we see in first quarter was organic growth and the season is really progressing as expected.

[John Orr:]

Joel?

[Joel Grant:]

This is Joel Grant from Material Handling standpoint. We (fear) in probably high single-digit growth in the first quarter, as Gregg and John alluded to. Novel and Jamco made up a lot of a lot of the different – quarter over quarter. But we did get additional push from the marketplace, which is in a declining growth mode and from new products.

[Chris Manuel:]

Okay. Thank you.

[Operator:]

Thank you. Our next question is from the line of Christopher Butler, Sidoti. Please proceed with your question.

[Christopher Butler:]

Hi. Good morning, everyone.

[John Orr:]

Good morning.

[Gregg Branning:]

Good morning, Chris.

[Christopher Butler:]

Just staying with Material Handling, could you talk to the product mix here in the first quarter? I think we all expected that the – a contraction from the first quarter last year but we fell short of kind of where the average was over the last three quarters of last year. So, could you talk to that and how you expect us to play out over the course of this year?

[John Orr:]

Yes. The Material Handling Segment plays in eight or nine different markets. And so, they operate in various schedules through the quarters of the year. In the first quarter of this year, automotive-related business was much higher. If you look at Material Handling activity, automotive is the bright spot, really. But it's come at the extent of our general manufacturing. And the result of that is, in fact, on mix, as the automotive making up a higher percentage. On top of that, there was some customer mix change within that. But, again, it's mostly the mix of automotive versus the rest of the manufacturing that we do.

[Christopher Butler:]

And as we look at the quarter, could you quantify what the increase in IT spending was here? And should we look at that as we look at the segment? Should we look at that entirely in Distribution? Or could you kind of break it out with – through the segment or through – just on allocated corporate?

[Gregg Branning:]

Hey, Chris. This is Gregg. The increase was primarily in Distribution in the first quarter. It was roughly $600,000 that we spent in IT. We'll continue to see IT expenditures, as we said in the past for Distribution in the Q2, as well as our Material Handling Segment, and Q2, Q3, Q4, we'll have some – the impact of that will not have near the head – the headwinds that we saw in Q1, as we have enough new price introductions and enough general growth and market share gains to offset that. You won't see the impact of that in Q2 through Q4.

[Christopher Butler:]

And as we look at Lawn & Garden in the cost cutting there, of the $5 million that you're expecting for next year, how much of that do you think we can be maybe in the second half of this year?

[Chris Koscho:]

Chris, this is Chris Koscho. We, basically, have stated at the start of the project when we have stated that we will see that $5 million in 2014. It did some charges in the first quarter, as part of that project. But at this point, we expect to see those savings in the 2014.

[Christopher Butler:]

Is this a situation where there is or maybe some added cost that's offsetting the benefit, as we look through this year? Or how should we think of it?

[Chris Koscho:]

No, no. I do (inaudible). Sorry, again. This is Chris Koscho. I would say no. No. There's no added cost to be offset.

[Christopher Butler:]

All right. And in circling back to the repurchase, I know that you have (10.5b1) repurchase plan in place. I don't recall that you had repurchased shares at this level before. Was there a change made during the quarter to the – to have the target prices, where things get triggered?

[Chris Koscho:]

No. There's been no change. We purchased last year and this year. It's a typical (10.b.5.1) that purchases at different levels based on stock price and – as well as the if the quantities, we purchased at different times, all simply based on stock price.

[Christopher Butler:]

Okay.

[Chris Koscho:]

You saw we purchased last year and this year.

[Christopher Butler:]

I appreciate your time.

[Gregg Branning:]

No problem. Thank you, Chris.

[John Orr:]

Thank you.

[Operator:]

(Operator Instructions). And your question is in line with Gary Farber of CL King. Please proceed with your question.

[Gary Farber:]

Yes. Good morning.

[John Orr:]

Good morning.

[Gary Farber:]

Couple questions. One, can you talk about the current (inaudible) environment and how you're sort of managing through it? And also, the Distribution business, can you talk about market share gains? Can you talk about how you captured those gains? And how much opportunity there is to capture those?

[John Orr:]

Hello. This is John Orr. On the resin side, it's – I guess, as we've talked, we've been very consistent that we see price spikes in resin. But it – really, we've got ourselves to the point, where either through contracts, agreements, or the fact that we've – our customers understand that prices are going to go up or go down, depending upon the fluctuation in price. We're not seeing a major issue there. There's always a quarter-to-quarter fluctuation that can affect us, by the time we put price increases in. But – and just, for instance, in the Material Handling Segment, we've just implemented price increases in March for the spike that happened in (NYSE

[Gary Farber:]

Okay. And I think from the Distribution business, the market share gains?

[Todd Smith:]

Yes. This is Todd Smith. Our – I just spoke a little bit before. You know we're really looking and driving towards increase in our capabilities and on our competitive service offerings and how we can pay close to market and the value. We're working towards a geographic expansion; how we can get in that market share through that. And then, we have continued to see outside with our new product offering, and, really, that we'll continue to have that, as the market share (advance).

[Gary Farber:]

And how fragmented is the market? Is it pretty fragmented?

[Todd Smith:]

Yes. The market has several different type of competitors. I mean that from a fragment standpoint. But these services and values that were the bulk and it really puts us in a good position, regardless of that.

[Gary Farber:]

Hey. Are you better capitalized than most of the competitors or similar?

[Todd Smith:]

Similar. That...

[John Orr:]

We're better capitalized that competitors. Most of our competitors in that business are smaller mom and pops. And so, they obviously, have (inaudible) time raising funds to buy inventory.

[Gary Farber:]

Right. Okay, thanks.

[Operator:]

Our next question is a follow up question from the line of Adam Josephson of KeyBanc. Please proceed with your question.

[Adam Josephson:]

Thanks for taking my follow up. I appreciate it.

[John Orr:]

Sure, Adam. No problem. John, with just one more – John. On your current business mix, you see these are –current mix is optimal or what could change over the next two to three years, as your business mix would change?

[John Orr:]

Well, I think if you look at that our public – given our public offerings, we talked about five segments – or not segments, growth platforms. Thanks, guys. Seen your moment there. You know returnable packaging, storage and safety products, higher repair and (rethread) products, especially molding, the entire supply distribution. Now, those are the growth platforms for the business. And that's probably where those business will get the most cash investment. You know certainly our Lawn & Garden business continues to be a business that we're very focused on fixing and making it a much stronger return for shareholders. So, yes, that's kind of really where we're going, as well at our (inaudible) and strategy for the next three years.

[Adam Josephson:]

And just one follow-up today. Is there anything that you think a market doesn't appreciate with respect to this as this mix? Or is there anything that you're being in contrarily paralyzed for?

[John Orr:]

Well, I don't know. I certainly have my own opinions. But you know I, think, from a public standpoint – I think we are a little undervalued. Certainly, the work has been accomplished in the Lawn & Garden business. That business is going to be very strong business for us, we think. And we expect it to be a strong business for us. And so, therefore, we think that, perhaps, the public could give us a little more appreciation for that. Certainly, Myers is a company that's got a lot of moving parts to it. It's – for a smaller company, it's got a lot of different businesses. I think sometimes people may not quite understand that but we're trying to make (flyers) continue to be a comparable year over year, more profitable year over year. And you know I pointed the fact that our EPS for 2012 was 40% improvement over 2011; the second-best EPS ever, only second to year 2007, which was a very unique year for the whole world. But we expect, as I said in my prepared statements, to have (inaudible) improved performance over 2012 from a profitability standpoint. So, that's kind of how I feel.

[Adam Josephson:]

Okay. Terrific. Thanks a lot, John.

[Operator:]

Our next question is a follow up from the line of Chris Manuel of Wells Fargo. Please proceed with your question. Chris Manuel - Wells Fargo Securities, LLC Good morning, again, and I apologize I accidently hit the hang up button instead of the mute button... (multiple speakers)

[John Orr:]

Gregg did that on purpose.

[Chris Manuel:]

I was having a senior moment as well.

[Gregg Branning:]

That'd be great.

[John Orr:]

I'm having more of these senior moments; that's my problem. No. That's okay.

[Chris Manuel:]

A couple follow ups. One is within the Material Handling business. Could we maybe get a sense of – I mean, I recognized revenues. Our profitability was down. And last year, there were a couple unusual items with, I think, a large (inaudible) order that slowed him in 1Q and I think there was also an (inaudible) piece of a large order. Could we maybe get a sense to help us...

[Gregg Branning:]

Yes

[Chris Manuel:]

Fit this together and give sense of maybe what the revenue contribution from the revenue link contribution work from acquisition, so we can kind of get a sense of how this business might progress, as the year move on? Or give us a sense of what those unusual items last year where that made it super profitable as a comp?

[John Orr:]

Well, yes. And we're not going to – we don’t' give the profitability of our acquisitions because we've got competitors sitting on the line. But, Joe, I think, can talk a little bit about some of the – just the goes in to the goes out, if you will, from last year that probably we affected the quarter. Joe?

[Joe Grant:]

Yes. The first thing you talk about – excuse me – I know was the – we talked out on the last call was the couple of items in the (inaudible) business. One was – particularly a new product that was designed – I think we purchased it as a (inaudible) and other was a non-core piece of business. And through negotiation, we had talked about parted ways. Quarter over quarter does not much impact from either one of those. As you look out through the course of the year, there will be headwinds that, in the second quarter, particularly, we continue to get a little bit of revenue activity out of the – what would be described as a non-core business. So, that relationship is not ended totally. And so, we'll see of that, and that was 10% of those headwinds but the new product that was talked about will show up in the Q2 year-over-year comparison. But we do expect through the course of the year that we'll be able to – through commercial activities, through the new product launches, be able to offset that activities.

[Chris Manuel:]

Okay. And then second follow up I had with respective businesses, which is Mr. Koscho. Could you maybe give us your current thinking, as you look at the three pieces that you have there between our stuff, the Nursery stuff and...

[Chris Koscho:]

Retail?

[Chris Manuel:]

Stuff.

[Chris Koscho:]

Yes.

[Chris Manuel:]

And as you kind of think through how do you see those pieces you're dealing? Can you give some comments that the whole business was up organically a bit, where all three pieces up. In particular, I'm interested to understand if how things started pretty strong. And then, something, in the past, we talked about the Nursery business that was a driver if you're starting to feeling differently about that key to business and the opportunity there.

[Chris Koscho:]

So, Chris, this is Chris Koscho. To answer your first question, yes, all three segments were up. All three showed positive year-over-year top-line growth, as we have topped before each of the segments or each of these business segments brings a different focus. For us, the Nursery focus – and, yes, it does follow with new home starts, so we have seen that growth and really follow the market. It really puts some profitability in our Nursery Segment and have watched profitability improvement really take seat in 2012 and, again, in 2013. Our Retail Segment is up. It's a nice segment for us, and continues to show progress. And greenhouse was a steady performer, again, first quarter; much like 2012 and, certainly, year over year.

[Chris Manuel:]

Okay. That's helpful. Those are the questions I had. Thank you, gentlemen.

[John Orr:]

Thank you.

[Gregg Branning:]

Thank you, Chris

[Operator:]

Thank you. There are no further questions at this time. I will now turn the floor back over to Management for closing comments.

[Monica Vinay:]

Thank you. We thank all of you for your time and your participation today. As a reminder, a transcript of this call will be available on our website within approximately 24 hours. A replay will be immediately available via webcast or call. Details can be found on the Myers Industries website under the investor relations tab. Thank you for joining us and have a great day.

[Operator:]

This concludes today's teleconference. You may now disconnect your lines at this time. Thank you for your participation.