Myers Industries, Inc.
Myers Industries, Inc.
Sales: $320.9 million (1996)
Stock Exchanges: American
SICs: 5014 Tires & Tubes; 3089 Plastics Products, Not Elsewhere Classified; 2542 Partitions/Fixtures, Except Wood; 3052 Rubber & Plastics Hose & Belting
By many accounts, Myers Industries, Inc. is the largest wholesale distributor of tire servicing equipment and supplies in the world, with outlets throughout the United States and in Canada. At the core of the company’s distribution operation is its Myers Tire Supply subsidiary, which boasted more than 40 branch warehouses nationwide and 11 international depots in 1996. But the distribution segment is no longer Myers’s largest business interest. Beginning in the late 1980s, more than half of its revenues were generated via the manufacture of plastic and metal storage systems and rubber automotive parts. The manufacturing division included subsidiaries Akro-Mills Inc., Ameri-Kart Corp., Buckhorn, Patch Rubber Co., and Plastic Parts, Inc. International sales contributed less than ten percent of revenues in the mid-1990s. Co-founder Louis Myers continued to serve as chairman into the mid-1990s, and his son Stephen was president and CEO in 1996. In addition to their managerial roles, the founding family continued to hold about a 25 percent stake in the firm, a factor that was considered influential in the company’s maintenance of steady growth and profitability in spite of the cyclical nature of its chief markets.
Myers’s performance, if not its products and services, earned it increasing attention from stock pickers in the late 1980s and early 1990s. Cash dividends, though described as “miserly,” were paid every year from 1972 through the mid-1990s and increased each year from 1976 onward. Each year since 1983 saw a stock dividend or split. This predictable performance record caused Financial World’s David S. Leibowitz to nominate Myers “most boring company in the country” in a 1992 review of dull but prosperous firms. In 1993, analysts with Smith Barney Shearson described it as “a tightly managed company with a focus on disciplined, long-term growth.”
The company was founded in 1933 by Meyer Myers and his younger brother Louis, who scraped together $620 to start a tire repair and retreading business in Akron, Ohio, which was by then well established as the “Rubber Capitol of the World.” Both brothers had experience in the field; Louis worked with an area tire patch company, and Meyer had his own used tire store. There must have been quite a few people who were repairing and retreading tires in lieu of purchasing new ones, for within six years, Myers Tire Supply had generated enough business to support a third brother, Isidore.
The family business specialized in supplying equipment and supplies to tire service shops. Products included patches; steel curling rims; wheel-balancing, alignment, and tire-valve hardware; servicing tools and accessories like jacks, hand tools, air compressors, tire changers, tire display and storage units, and tire vulcanizing machines used in retreading. In the ensuing decades, this core interest expanded into a full-scale, nationwide distribution operation offering, as the corporate slogan stated, “Everything for the Tire Dealer.” Its catalog, launched in 1937, soon became known as the “bible” of the retreading industry.
Meyer ran the business alone during World War II, while Louis served in the Pacific theater as—what else?—an Army captain in charge of tire retreading and distribution. Meanwhile, Isidore served in the Army on the Continent.
Myers diversified into the manufacture of rubber and plastic products via the 1947 creation of Akro-Mills Inc. and Patch Rubber Co. These two companies formed the core of the company’s manufacturing operations and established its bipolar nature. Founded in Akron and moved to North Carolina in 1978, Patch would grow to become one of the country’s biggest producers of tire repair kits. It manufactured adhesives, cleaners, pre-cured treads, cord stocks, and repair patches. Akro-Mills started out as a mail order company under the direction of Isidore. It began manufacturing its own products in 1964 and would later expand overseas.
The expansion into manufacturing would prove fortuitous. In a 1986 interview with Barron ’s Mitchell Gordon, Chairman Louis Myers noted that the cycles of the distribution and manufacturing interests usually offset each other, thereby resulting in steady growth. “We’ve no explanation for it, but we seem to have been blessed—for the last 30 years or so, anyway—by the fact that when one has gone down, the other has gone up.”
In the postwar era, the tire supply business was growing as well, helped along by interstate highway projects and burgeoning auto production. The growing family firm incorporated in 1955. By 1970, the company had 14 locations throughout the United States. Myers entered the Canadian market with the creation of a branch warehouse in London, Ontario in 1953 and established a full-fledged international division in 1959. In the ensuing decades, the company established warehouses throughout Canada and in Central and South America.
Myers acquired Cleveland’s James C. Heintz Company, a high-ranking manufacturer of molds, presses, rims, and parts for tire and retread makers, in 1968. In 1969, Myers acquired Elrick Industries, Inc., a manufacturer of curing rims and tire-changing stands headquartered in Oakland, California. That same year brought a name change, to Myers Industries, Inc., in acknowledgment of the expansion of the parent company’s manufacturing interests. Co-founder Meyer Myers retired from the company in 1969, and partner Isidore divested his stake to pursue real estate development in California.
The U.S. advent of radial tires—which were invented in France in the 1930s but not widely accepted in America until the late 1960s—proved particularly positive for Myers. Radials could accommodate two or more retreads, as opposed to their bias-belted forebears, which could only take one. The new tires’ high sticker price (two to three times that of bias-belted tires) provided another incentive for budget-conscious consumers and commercial fleet operators to take advantage of the opportunity to save money by retreading. In response to this demand, Myers Tire Supply added 12 branches in major metropolitan areas from 1970 to 1980.
The company made its initial public offering in 1971, when the Myers family sold a minority stake in the firm to the public. Annual revenues increased from $31.6 million in 1973 to $65.5 million in 1979, and net income grew from $1.4 million to $3.3 million. Myers Industries was listed on the American Stock Exchange in 1983.
Second Generation of Management Ascends in the 1980s
Having logged more than a dozen years of experience at the family firm, Stephen L. Myers, son of Louis Myers, advanced to president and CEO in 1980. The thirty-something executive guided the company’s 1987 acquisition of Buckhorn, Inc., an Ohio-based manufacturer of multi-use plastic containers. The $40 million purchase ($22 million cash and the assumption of $18 million in debt) increased Myers’s overall sales volume by nearly 47 percent from 1986 to 1987, making manufacturing account for more than 50 percent of revenues in the process.
The acquisition proved to be well timed. Buckhorn’s sales benefited from two key trends in the late 1980s and early 1990s: environmentalism and just-in-time inventory control. As David Prizinsky of Grain’s Cleveland Business pointed out in 1988, just-in-time meant “smaller but more frequent shipments of parts, which will generate more demand for Buckhorn’s products.” Burgeoning efforts to curb waste, both solid and operational, encouraged companies in a wide variety of industries to implement reusable containers. Buckhorn worked with its customers to design containers for particular applications. In the late 1980s, for example, the company developed bulk cranberry containers for Ocean Spray that enabled the fruit company to switch from truck transport, which often marred the cranberry bogs, to helicopter airlifts of fruit. By the early 1990s, Buck-horn’s reusable plastic containers were used to distribute food, apparel, electronics, automotive components, health and beauty aids, and hardware, as well as for in-plant material handling and agricultural applications. Its line includes tote boxes, bins, tubs, straight-walled boxes, and a line of modular cabinets. They are sold direct and via independent dealers and product representatives.
Buckhorn also manufactured consumer lawn and garden supplies, including tool boxes, storage containers, and planters. These were distributed throughout the United States via mass merchandisers, department stores, hardware chains, warehouse outlets, and specialty shops.
“Myers Industries, Inc. is a diversified manufacturer of polymer and metal products for industrial, commercial, and consumer markets, and a nationwide wholesale distributor of tools, equipment, and supplies used in tire servicing and automotive underbody repair. Myers Industries has been traded publicly since 1971 and is listed on the American Stock Exchange under the symbol MYE.”
Acquisitions in both the manufacturing and distribution segments (the company added 11 Myers Tire Supply branches over the course of the 1980s for a net total of 37 by 1990) helped boost revenues from $67.5 million in 1980 to $194.8 million by 1989, and net income increased from $3.4 million to $9.6 million.
Growth Continues in the Early 1990s
Acquisitions in both of Myers’s business segments supplemented growth in the 1990s. In 1992, the company acquired Alpha Technical Systems (renamed Myers Systems), an Ohio-based manufacturer of material handling systems like conveyors and hoists. Ameri-Kart Corp., a producer of municipal, industrial, and commercial waste handling and collection products, was acquired in 1995. By 1996, Myers Tire Supply had 42 domestic branch outlets. Myers’s revenues increased from $195.6 million in 1991 to nearly $321 million in 1996. Profit kept pace, growing from $10.5 million to more than $21 million during the period.
Plans for the future included a continuing focus on the keys to Myers’s past success: heavy reinvestment in production capacity and diversification via acquisition, maintenance of a low level of debt, steady geographic expansion (with a particular focus on Asia and the Pacific Rim in the 1990s), and continued dividend increases. The company planned annual investments of $15 to $20 million in increased manufacturing capacity, efficiency programs, and product development in each of the years from 1995 to the end of the century.
Ameri-Kart Corp.; Buckhorn, Inc.; Eastern Tire Equipment & Supplies Limited (Canada); Elrick Industries, Inc.; The James C. Heintz Company; MICO, Inc.; Midland Tire Supply, Inc.; Myers International, Inc.; Myers Systems, Inc.; Myers Tire Supply (Canada) Limited; Myers Tire Supply (Chicago), Inc.; Myers Tire Supply (New York), Inc.; Myers Tire Supply (Nevada), Inc.; Myers Tire Supply (Virginia), Inc.; Patch Rubber Company; Plastic Parts, Inc.
Byrne, Harlan S., “Myers Industries Inc.,” Barren’s, February 19, 1990, pp. 40–41.
Ellis, Junius, “Hit This Bull’s-Eye for Investing Profits,” Money, July 1993, pp. 100–106.
“Everything for the Tire Dealer,” Tire Review, April 1993, p. 28.
Gordon, Mitchell, “Doubly Blessed; Myers Industries Prospers on Two Fronts,” Barren’s, October 6, 1986, pp. 50–52.
——, “On the Road Again: Myers Industries Rolls Back from a Slump That Defied History,” Barren’s, October 3, 1983, pp. 62–63.
——, “Smooth Ride; Few Potholes Jar Earnings Record of Myers, Tire-Repair Servicer,” Barren’s, November 12, 1984, pp. 80–82.
“In High Gear,” Barren’s, June 8, 1981, p. 52.
Leibowitz, David S., “Dull, Dull, Dull,” Financial World, June 13, 1989, p. 104.
——, “It’s Time To Go Bottom Fishing,” Financial World, January 26, 1988, p. 66.
——, “Let’s Hear It for Boring,” Financial World, November 24, 1992, p. 84.
Marcial, Gene G., “These Two Just Look Humdrum,” Business Week, July 31, 1995, p. 71.
“Mighty Myers: Tire Equipment Firm Should Enjoy Up Year Even If Detroit Doesn’t,” Barren’s, January 29, 1979, p. 35.
“Myers Industries,” Rubber World, October 1992, pp. 8–9.
“Myers Tire Supply,” Modern Tire Dealer, September 1994, p. 89.
Prizinsky, David, “Growing Myers Industries Profits on Acquisition Road,” Grain’s Cleveland Business, August 29, 1988, p. 16.
——, “Myers Industries: Success Based on Investment, Diversification, Management Autonomy,” Grain’s Cleveland Business, May 24, 1993, p. S14.
Sheets, Ken, “When Boring Stocks Are Beautiful,” Kiplinger’s Personal Finance Magazine, February 1995, pp. 81–83.
—April Dougal Gasbarre