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Myers Industries, Inc. (NYSE:MYE)

Q2 2014 Earnings Conference Call

July 24, 2014 10:00 AM ET

Executives

Monica Vinay - VP, IR and Treasurer

John Orr - President and CEO

Gregg Branning - SVP, CFO and Corporate Secretary

Analyst

Christopher Butler - Sidoti and Company

Gary Farber - C.L. King

Brian Sponheimer - Gabelli & Company

Chris Manuel - Wells Fargo

Operator

Greetings and welcome to the Myers Industries’ Second Quarter 2014 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. (Operator Instructions). As a reminder this conference is being recorded. I would now like to turn the conference over to your host Ms. Monica Vinay. Thank you. You may begin.

Monica Vinay

Thank you, Melissa. Good morning and welcome to Myers Industries’ second quarter 2014 earnings conference call. I am Monica Vinay, the Vice President of Investor Relations and Treasurer at Myers Industries. Joining me today are John Orr, President and Chief Executive Officer; Gregg Branning, Senior Vice President, Chief Financial Officer and Corporate Secretary; Joel Grant, Senior Vice President and General Manager, Material Handling Segment; Alex Williamson, Vice President and General Manager, Distributions segment. We would like to introduce to you and welcome Alex, as he is now running our Distributions segment and he replaces Todd Smith, who is now the Vice President and General Manager of our Akro-Mils and Jamco businesses. This move was made to strengthen our Akro-Mils and Jamco businesses which are part of a Material Handling segment.

Earlier this morning, we issued a news release outlining the financial results for the second quarter of 2014. If you have not yet received a copy of the release, you can access it on our Web site at www.myersindustries.com, under the Investor Relations tab. This call is also being webcast on our Web site and will be archived there, along with the 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 provision 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 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

Thanks, Monica and food morning. It’s a pleasure to have you join us. Gregg and I will discuss second quarter results and our expectations for the second half and full year 2014 after that we will open it up for questions. Before we discuss the second quarter results, I would like to review several announcements that we made in June and July that position Myers to deliver on its longer term goal to provide value through higher return growth businesses. If you would please turn to Slide 3 of the presentation.

On June 2, 2014, we announced that we'd engage the investment bank William Blair and Company to commence the sale of our Lawn and Garden segment which we expect to be completed by mid-2015. Good progress has been made in the restructuring of the Lawn and Garden segment which makes the timing of selling the business right. As mentioned during our conference call to discuss the acquisition of Scepter on July 9, we are seeing much interest in this segment. As we said during that call it would not be in the best interest for shareholders for us to discuss potential bidders or pricing at this time.

On June 24, 2014 we announced that we have completed the sale of WEK Industries for approximately $20 million. Sale of WEK Industries, a non-core business resulted in a pre-tax gain of 3.7 million which is included in discontinued operations. On July 2, 2014, we completed the acquisition of Scepter expanding our Material Handling business to include new customers, market leading products, unique technologies and new international markets and cross-selling opportunities. Scepter complements our material handling technologies through the use of advanced blow molding technology which requires use of up to three layers of material for fuel container and results in a much stronger product.

We also announced that starting with the second quarter Form 10-Q and going forward, we will report our operating results, earnings in two reportable segments, material handling and distribution. Ameri-Kart which was previously part of the Engineered Products segment will be part of the Material Handling Segment and Patch Rubber Company which was also previously part of the Engineered Products segment will be part of the Distribution Segment. WEK Industries, Inc. and the Lawn and Garden segment will be reported as discontinued ops.

These announcements reflect the actions that we are taking to streamline our business portfolio and profitably grow our Material Handling segment. We have a strong market position in our Material Handling segment and Scepter further strengthens that position plus expands our reach beyond our historic North American market.

We expect Scepter to be accretive to earnings in 2014 and beyond. Additionally, the acquisition of Scepter should lead to increased cash flow generation and a further strengthening of our balance sheet. These actions now allow us to focus on growth opportunities and these changes will drive our longer term growth profile by focusing on material handling and distribution which position Myers to be a more focused, faster growing and a more profitable company. Now let’s turn to our second quarter results, please go to Slide 4.

Net sales from continuing operations in the second quarter of 2014, increased 1.5% to 152.8 million compared to 153.6 million in the second quarter of 2013. Net sales in the Material Handling segment increased 2.5%, the distribution segment sales were 6.4% lower year-over-year primarily due to the first quarter 2014 closing of the Canadian branches who are not in line with our long term growth and profit return objectives for the segment.

Gross profit margin from the continuing operations was 27.8% in the second quarter of 2014 compared to 29.3% in the second quarter of 2013. The lower sales and competitive pricing pressure in one of our businesses is significant slowdown in Brazilian sales due to the world cup activities and higher than anticipated logistics cost lead the decline in gross profit margin year-over-year.

Reported income from continuing operations for the quarter was 6.3 million or $0.19 per diluted share compared to income from continuing operations of 7.4 million or $0.22 per diluted share in the second quarter of 2013. On an adjusted basis, which exclude restructuring cost and other special items, our earnings per diluted share from continuing operations in the second quarter of 2014 were $0.22 versus the consensus estimate of $0.22 and compared to $0.21 in the second quarter of 2013, which represents a 4.8% increase over 2013.

I'd now turn the call over to Gregg Branning, our Chief Financial Officer who'll provide you with further details regarding our financial results. Gregg?

Gregg Branning

Thanks John. Good morning. I will comment first on the overall financial results which are summarized on slide four of the presentation then I will review the results by business segment. I will also review the items on slide four that John hasn’t already discussed. Selling, general and administrative expenses for continuing operations in the second quarter of 2014 were $31.2 million compared to $32.4 million in the second quarter of 2013.

The decrease year-over-year was driven by a decline in information technology expenses and lower compensation and benefit cost. Our effective tax rate during the quarter was 34.2%. We anticipate that the effective rate for the full year 2014 will be 36%. Now can you turn to the slide five of the presentation. Cash flow used for continuing operations for the six months ended June 30, 2014 was $6.8 million compared to cash flow provided by continuing operations of $13.6 million for the same six months in 2013, due mostly to an increase in working capital.

We anticipate the full year cash flow from continuing operations including Scepter will be in the range of 60 to $70 million. Capital expenditures for continuing operations totaled $7 million for the six months ended June 30, 2014. We estimate the capital expenditures for continuing operations including Scepter for 2014 would be approximately $30 million and more than 65% of that will be for high return growth and productivity investments.

During the six months ended June 30, 2014 we repurchased $44.4 million of our common stock. As has been our approach management and the Board will continuously review the opportunity to buy back shares relative to long term investment in the strategic growth of the Company and our balanced approach to capital allocation. We continue to maintain a strong balance sheet which is reflected in our low net debt to total capital ratio of 34.3%.

Future cash flow and proceeds from the sale of our Lawn and Garden segment will be used to reduce debt in line with our goals to keep our leverage ratio around 2.5 or lower. Now let’s turn to our business segment and their performance that summarize of slide six and seven of the presentation. Results are compared to the same period in 2013. I will be referencing the adjusted pre-tax income information by segment as it appears on the reconciliation of non-GAAP financial measures included in the appendix of the slide presentation and in the earnings release issued earlier today.

In the Material Handling segment, net sales in the second quarter of 2014 increased 2.5% to $103 million compared to $100.5 million in the second quarter of 2013. Sales increases in the agriculture market were partially offset by lower sales volumes in Brazil due to the economic slowdown caused by world cup activities. Adjusted income before taxes in the Material Handling segment was $12.2 million for the second quarter of 2014 compared to $13.4 million in the second quarter of 2013.

The lower sales volume in Brazil due to the world cup activities and a competitive pricing pressure in one of the segments businesses led to the decline in adjusted income before taxes year-over-year. We are adjusting our cost and pricing structure to positively overcome the pricing pressure we saw in the quarter. Net sales in the distribution segment were $49.8 million in the second quarter of 2014 compared to $53.2 million in the second quarter of 2013. Sales decreased year-over-year primarily due to the segments Canadian branch closures in the first quarter of 2014 and lower custom sales.

Adjusted income before taxes in the distribution segment was $5.4 million in the second quarter of 2014 compared to $6 million in the second quarter of 2013. The lower custom sales and higher logistics cost during the quarter led to the decrease in adjusted income before taxes compared to the second quarter of 2013.

That concludes the financial review. I’ll now turn the call back over to John for some summary and outlook remarks. Thank you. John.

John Orr

Thanks, Gregg. Please turn to Slide 8 of the presentation. Looking forward to the second half of the year, we anticipate that both sales and adjusted income from continued operations show improvement compare to last year as a result of growth strategies, pricing initiatives, cost modifications and savings and productivity investments.

Although World Cup activities affected the second quarter, we’re starting to see a more normal return to business in Brazil. Plus we look forward to meaningful progress in all of these areas. Stronger half of the year is also expected to lead to improve results for the full year compare to last year on an adjusted continuing operation bases.

Specifically for the third quarter we anticipate the following. In our material handling segment sales should increase primarily as a result of organic growth recent acquisition of Scepter and the efforts of our now combine teams. The integration processes is underway and we look forward to quick progress in near term transition to focus on growth with new products and new markets.

As we look towards near term opportunities with Scepter products in Latin America. In addition, we are adjusting our cost and pricing structure to positively overcome the pricing pressure we saw in the quarter. In our distribution segment sales increases from organic growth including new product introductions will be offset by sales decreases resulting from the closure of the Canadian branches. We’re addressing the higher logistics costs with increased product pricing and better load planning as we move forward.

In conclusion we are very excited with the acquisition of Scepter and the changes we have made. This makes Myers a focused faster growing more profitable and increased return on investment company.

That concludes management’s presentation for today. I’ll 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 segment, Vice Presidents are also available to answer questions: Joel Grant, Senior Vice President and General Manager, Material Handling segment and Alex Williamson, Vice President and General Manager of Distribution Segment. Go ahead Melissa.

Question-and-Answer Session

Operator

(Operator Instructions) Our first question comes from the line of Chris Manuel with Wells Fargo Security. Please proceed with your question.

Unidentified Analyst

This is actually [indiscernible] on for Chris. Can you elaborate a little bit on the pricing pressure that you saw in material handling what business it might be in and how long that can take to dissipate or adjust?

John Orr

Hi, Dave this is John. I am going to let Joel Grant fill that question.

Joel Grant

Well, it’s not our practice to comment on individual businesses inside the segment, we did think it was important to note it here in the Q2 and tell you that we have already put things in place relative pricing and cost adjustment, this was not necessary, it was resin related, it was really competitive pressure. Again, actions put in place as we went through the quarter and we expect it to return the normal margins as we go through the second half.

Unidentified Analyst

Is this a product line that maybe you’ve seen a drop off in demand or new entering in the marketplace or something like that or is it just?

Joel Grant

It’s just a competitive pressure in individual fees inside the material handling business.

John Orr

This happens, Dave this is John. This happens fairly regularly we have certain customers who create some competitive situations with either a new provider or a current competition and so again, we realize this early and Joel and team have put efforts in place to make sure that we get ourselves back inline there with the expected margin on that business.

Unidentified Analyst

Okay, make sense. Thank you. The other question if we can I guess turn the focus to Scepter a little bit, you guys have done a good job over the past couple of years of protecting yourself on the resin front in your businesses, can you talk a little bit about the contract there, the pass-through mechanisms to deal with resin on a manufacturing front and then the other side supply contracts some of those products are sold more in a retail environment cannot like some of the proxy have now, talk about supply contracts and how those might differ?

John Orr

Yes. On the resin side of the business there it’s very, very similar to what we do and in fact suppliers are the same suppliers, certainly there’s some opportunities there for us especially around terms as we would be buying more resin from the same types of suppliers. They also have similar agreements on supply, one of the things I think we’ve done very well at Myers Industries over the years is not be resin dependent based upon contracts with customers. There are contracts as well with Scepter and their customers with respect to increases or decreases in resin. Also we have, I think hedged our bet by making sure that we don’t buy all of our resin out of the Gulf. We also buy resin out of, suppliers out of Canada, so we are sure that it there is the Hurricane issue or the latest flavor of the month is force majeure around maintenance churns and so on that we covered ourselves for that. So, from the resin side of the business with Scepter, we feel very comfortable that there is going to be some tremendous synergy opportunities there as well.

Scepter does have sourcing agreements with major customers, very similar again to what we have done or what we have. These are agreements that are long-term agreements that’s in the can business. Also in the military business, there is military contracts that are in place for instance the upstanding agreements with all NATO countries. Scepter is also negotiating with public works and government services, Canada which is the supply arm of the military. Scepter holds four yearlong contracts with U.S. military for military fuel cans for instance, so one of the things we looked at in the due diligence is somewhat of a guarantee for a long-term business there and hopefully that’s where you are going with that.

Gregg Branning

Dave, this is Gregg, I would also add while they have those long contracts the pricing is not fixed for those long contracts, so we can adjust and will adjust and they have done that just like our existing businesses, so we don’t see volatility in resin pricing there.

Unidentified Analyst

If I can summarize, there are escalator, de-escalator mechanisms for resin and then on a semi-annual or an annual basis, you can go back and try to get other inflationary items along the way, and its incumbent upon you to become more productive year-on-year as well to improve profitability or what have you.

Gregg Branning

Let me tweak your comment just a just little bit, Dave, this is Gregg again. It’s not so much escalators as much as real time coding like we do in our business that don’t have escalators. They do more real time coding, those codes do not last very long for the PO to be placed and as resin changes, pricing changes.

Operator

Thank you. Our next question comes from the line of Christopher Butler with Sidoti and Company. Please proceed with your question.

Christopher Butler - Sidoti and Company

I was hoping you might be able to give us some details on the Lawn and Garden segment and how that performed in the quarter?

Gregg Branning

So, the Lawn and Garden segment, as you can see in the release when you look at adjusted earnings there was a loss, that loss was driven by some continued inefficiencies that we have seen in that business. And while the restructuring project is complete, we have continued to see some inefficiencies but everything has moved and we're moving forward with that. We do see the savings there which will allow us to sell the business as planned but it did impact us as we completed the overall restructuring.

John Orr

This is John, there is also one other issue there we saw a late start to the season because of the heavy winter and a quick end to the season essentially after Mother’s Day the season shutdown. So, there was a consequential loss of expected sales and profitability there. It's a positive EBITDA but at the op income level there was a slight loss.

Christopher Butler - Sidoti and Company

And if we are looking at the share repurchase, could you let us know how many shares you bought back in the quarter and the thought process behind fulfilling the authorization here in the first half of the year as opposed to spreading it out over the entire year?

Gregg Branning

This is Gregg again. We bought back 1.9 million shares in the quarter, year-to-date we bought back 2.1 million. We have bought back the entire 40 million and that was done under 10b5-1 plan. We still have just over 5 million authorized shares that we will continue to look at under our balanced approach to capital allocation going forward for share repurchases.

Christopher Butler - Sidoti and Company

And so, just to be clear, as you think of repurchasing shares going forward, it’s going to be more similar to the past few years before you had indicated that you are going to do the 40 million over a course of the year, is that the right way of thinking of it?

Gregg Branning

I would say yes but again under our balanced approach we'll look at what makes sense. I don’t know that we'll come out and do what we said in the first quarter of having an explicit number of 40 million. We will buy opportunistically based on our share price and our capital allocation plan.

John Orr

Let’s also kind of keep in mind that at the end of last year we had a sufficient amount of cash that we felt comfortable and the Board felt comfortable on returning to shareholders. So, that’s really why the dividend was increased dramatically as well as the $40 million share buyback. And of course when you put 10b5-1 in then you have to do it. You can cancel it but then you can’t redo it for a period of six months, so that’s really the reason we went forward.

Christopher Butler - Sidoti and Company

With Scepter in the fold and the potential to have some more cash on your hands here over the next year let’s just say would your preference be to make additional acquisitions or return to shareholders?

John Orr

Well, in reality we certainly would have -- we still want to reaffirm again our balanced approach to capital allocation which we think is best for shareholders. We would have an appetite for acquisitions but we want to emphasize that really we're very focused on profitable growth. So, we would look for the right acquisitions to grow Material Handling with probably considerations to the products, customers, geographic markets and technologies but we do not intend to change the risk profile of the company.

Operator

Thank you. Our next question comes from the line of Gary Farber with C.L. King. Please proceed with your questions.

Gary Farber - C.L. King

Yeah, good morning. Just a couple of questions, just on the capital expenditure side I think you are talking talked about growth CapEx, can you provide some more details as far as maybe some examples of projects or things that has been spent on and what kind of hurdle rates you look as far as spending for those projects?

John Orr

Well, most of our spending is done around new product introduction that would be new models, pass on the technologies around equipment, at the same time there is a certain amount of CapEx that is spent in refurbishing and maintaining our facilities. With respects to hurdle rate I will let Gregg talk about that.

Gregg Branning

Yes, so hurdle rate we really treat the capital expenditures that are surrounding new products productivity primarily versus maintenance if you will to look at making sure we return much greater than our cost of capital, we don’t look to actually disclose a specific number but we clearly look for them to be accretive to earnings as we go forward and if they make sense from the standpoint of growth and meeting our overall strategic objectives.

Gary Farber - C.L. King

Alright, and can you give us a sense for depreciation and amortization what it might look like this year and how it might translate next year?

Gregg Branning

Yes, so this year, we expect our DNA to be approximately 31 million, 30 to 32 million so if I split the difference 31, that does include an estimate for the step up of DNA as a result of the acquisition of Scepter understanding that that step up is a rough estimate until we get through the purchase accounting and then next year we would expect the DNA to be roughly another, I am going to say 4 to 5 million greater but we are still trying to get our arms around next year.

Gary Farber - C.L. King

Okay, so it’s not a mid-30 for the following year?

Gregg Branning

Yes, and that’s our rough estimate when I try and think of and by the way that’s continuing operations only that’s a rough estimate when I try and think of what Scepter will be in the fold and what our continuing operations will be on a go forward basis next year but we'll update those numbers as we move forward and we have a better field for 2015.

Operator

Thank you. (Operator Instructions) Our next question comes from the line of Brian Sponheimer with Gabelli & Company. Please proceed with your question.

Brian Sponheimer - Gabelli & Company

Just a question about Lawn and Garden and how you are working here with William Blair knowing that the business has prone to swings and weather or the volatility given weather in the past, are you demanding any sort of deal breakup fee in the event that a buyer might get a cold feet should we have any sort of planting season for 2015 that’s resembled it, there is the last couple?

Gregg Branning

Hey Brian, this is Gregg. What I will tell you is at this point, we haven't gotten that far to determine that. We are still at the early stages of the process and expect to start to giving business in the near future. So, once we get further down the line then we'll be able to better determine whether or not a breakup fee is necessary.

Unidentified Company Representative

And answer his question.

Gregg Branning

Yes.

Brian Sponheimer - Gabelli & Company

Alright and as you said, you said timing by the middle of next year, when do you plan on having initial bids in for the business?

Unidentified Company Representative

I don’t know for sure just depends on timing but I would guess that we'll start seeing initial bids in the September timeframe that’s our rough estimate right now but I know that William Blair is moving down the path to get all the materials out too potential bidders.

Brian Sponheimer - Gabelli & Company

Okay, and if I’m thinking about, you are talking about competitive pressure for the back half of the year and what you are saying -- what I think I’m hearing is that, these pressures are likely to persist, what would was it that created the situation where the competitor decided to get competitive on pricing?

Gregg Branning

Yes, so this is Gregg again Brian. What I would say is we don’t expect them to persist, it was a given bid project that we decided to bid at, it was a multiyear project to retain, as to why the competitor did what they did, obviously we don’t fully know because we weren’t in their shoes. But the key is we don’t expect it to continue to impact us as we’ve adjusted other pricing and primarily also our cost structure to take that into account in the data.

Brian Sponheimer - Gabelli & Company

And what market was this in, is this North America or South America?

John Orr

North America, it was in North America.

Brian Sponheimer - Gabelli & Company

And it was [indiscernible].

John Orr

Again, we’re not going to, given that it’s not -- given company is not a segment, we don’t want to disclose the company.

Operator

Thank you. Our next question comes from the line of Chris Manuel with Wells Fargo Securities. Please proceed with your question.

Chris Manuel - Wells Fargo

Couple of question, just I apologize I was down the hall earlier. But couple of questions, one coming I want to come back to Brazil for a second, I think you talked about seeing some softness there around the world cup and timing, one of the other big changes that we’ve observed looking at some of the beverage consumption patterns there has been a real pick in one way packaging, almost 10% plus in the marketplace, away from some refillable glass and I believe that’s where your [indiscernible] selling down there appeared. Have you seen anything different with whether it’s stopping your order patterns today or discussions you’ve had with your customers that suggest that you’ll see that business pick back up or mainly stay at these kind of levels for an extended period of time?

John Orr

Chris this is John. What we’ve seen is really, you’re right there is a one way packaging issue that’s going on in Brazil. I think the attempt to negate that on the part of the beer manufactures is to create smaller bottles and in which case there are 300 milliliters now instead of 600 milliliters, they are called the [indiscernible] in fact. That has required all brand new crates to be produces which is what we are producing now for the largest beer producer in Brazil.

Glass actually, glass is a better deal in Brazil for the average consumer because they can take it home, they can drink it and they can takes the glass back and get some money back, whereas the one way packaging they don’t. Certainly our customer -- our major customer there who is 70% of the market has a pretty good feel I think for where that market is going to go and that’s why we spent the last six months producing new modes for these new crates. So we’re still pretty comfortable that there’s a huge opportunity there. There is also another opportunity and that is in the replacing wooden pallets with plastic pallets and [indiscernible] in Brazil has that capability of doing that and that’s certainly a project that we are spending some time with our customer on.

Chris Manuel - Wells Fargo

Okay. So, just to make sure, a clarification, make sure I understand this, I wholly agree with you and you have done a lot of work actually around kind of packaging shift and the concept of, Brazilian thing is being able to much more affordable for them to be able to rent the package and buy the content as opposed to buying both, but the shift from 600 to 300 milliliter bottles and your crates been shipped ahead of that, has that already transpired, have you already been shipping those smaller sized crates, or is that something that through the back half of the year, so we think…

John Orr

We have started shipping some of those crates, this is a continuing process that’s probably going to go on over a three or four year period, it’s a significant amount of their manufacturing capability, their production capability.

Chris Manuel - Wells Fargo

Okay. That’s very helpful. Other question on that Gregg is appreciating there’s a lot of moving components this year with Scepter coming in and LNG going into discontinued ops and then the west business et cetera. You think could maybe give us an update on two pieces, one, really what we’re trying to get at is free cash flow and what the kind of normalize level, '15, '16 beyond would be. So can you give us may be a sense of what the off cash flow perspective looks like, is that a appreciably different beyond that, you’ve been kind of in that 60ish range, last year was a big number, but we look forward at '15, '16, really in this year is noisy, but '15, '16 is that something that kind of gets into that op, and you don’t you talk maybe about 60 to 70 here in '14, but '15, '16 is all the ebb and the flow are done is something towards the high end of that range, kind of normal sustainable level?

Gregg Branning

Yes. This is Gregg, obviously you’re right there are a lot of moving parts we haven’t fully -- we had Scepter for less than a month so far, but current early estimates and belief is that going forward beyond 2014 where we have them for a full year, the free cash or the operating cash flow and the free cash flow from a continuing operations business should be definitely at the higher end of that, you’re right that we did see a higher number last year and that was due to the one-time benefit of us being able to change some of our purchasing terms but certainly Scepter should bring us a nice cash flow going forward. And also just to be clear that cash flow will be definitely better than we are giving up with the sale of Lawn and Garden as well as more stable.

Chris Manuel - Wells Fargo

That’s helpful. Two last quick ones, one, John, could you give us an update on where you are with new products through the system, I mean as the number has been kind of moving up the scale, we asked this I think every quarter but where you are in that phasing as you sit today?

John Orr

Yes, 55 new products this year, not counting, 10% as we are getting a signal there it was 10% but there is 55 new products and that doesn’t really count the new products that I think Scepter is going to bring on to us that we don’t have a number yet.

Chris Manuel - Wells Fargo

That’s fine. I appreciate there will be some moving components there. And then the last was, when we look at kind of the corporate component, as it shakes out to between the two divisions now of what's left, how will that kind of translate as we look through the next couple of quarters. I mean it used to run in that 5 million, 6 million range, I know it’s a little higher in 1Q, a little lower in 2Q but what’s kind of a normalized rate there?

Gregg Branning

This is Gregg, Chris. I think that the normalized rate for corporate, we won’t see a significant change upwards or downwards with lawn and garden coming out and Scepter coming in.

Chris Manuel - Wells Fargo

Okay, so it’s probably something in that kind of 5 million, 6 million rate normalized quarterly.

Gregg Branning

Correct.

Operator

Thank you. There are no further questions at this time. I would like to turn the floor back over to Ms. Vinay for any closing comments.

Monica Vinay

Thank you, Melisa. We thank all of you for your interest in Myers Industries and your time and participation today. As a reminder, a transcript of this call will be available on our Web site within approximately 24 hours. A replay will also 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

Thank you. This concludes today’s teleconference. You may disconnect your lines at this time and have a great day. We thank you for your participation.

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