Myers Industries, Inc. announced that it plans to restructure certain aspects of its distribution and materials handling business, and in turn, eliminate certain positions.
According to its filings with the Securities Exchange Commission (SEC), the company plans to restructure its Ameri-Kart Corp. subsidiary that operates in its materials handling business. Myers said it will consolidate manufacturing at Ameri- Kart’s Cassopolis, Michigan, facility and expand operations at Ameri-Kart’s Bristol, Indiana, facility. Through the consolidation, 30 jobs will be eliminated.
The company also started restructuring its distribution segment, which included eliminating certain sales and administrative positions in an effort to reduce costs and improve contribution margins, its SEC filing said. Myers is also planning to realign its distribution segment commercial sales structure and expand the segment’s e-commerce platform.
“As the tire repair and retread industry continues to evolve, Myers Industries is working on transforming its distribution business. We are refining our strategy to invest more in our growth channels, better serve our customers and create an even brighter future for our people,” said Lance Meyer, vice president of sales for Myers Tire Supply International. “As part of that strategy, we made the difficult but necessary decision to realign our organization. This decision, along with several other initiatives, is helping Myers Tire Supply evolve while investing in growth channels and optimal paths to market.
The company estimates that it will incur restructuring charges of approximately $900,000 and non-restructuring costs of approximately $150,000 in connection with the Ameri-Kart plan by the end of this year, Myers said in its SEC filing. The estimated restructuring charges include approximately $230,000 in employee-related charges, $120,000 in accelerated depreciation expense and $550,000 in other exit-related costs. Myers estimated annualized benefits of approximately $1.5 million after calendar year 2019.
The company estimated that it will incur restructuring costs of approximately $900,000, primarily employee-related costs, in calendar year 2019 in connection with the restructuring and approximately $1 million of other implementation costs (to be included in adjusted earnings). Myers estimated annualized benefits of five to $7 million after calendar year 2019 from the restructuring, according to its SEC filing.
This week, the company also entered into a letter of intent to sell a production facility in Sandusky, Ohio, formerly used in connection with the Akro-Mils business. The facility closed as part of the materials handling segment’s restructuring plan in late 2017. The company has re-classified the Sandusky facility as “held for sale” and will recognize an impairment charge estimated at $900,000 in the first quarter of 2019.
