Myers Industries Cuts Q4 Earnings On Brazil Finance Discrepancies

(RTTNews) - Myers Industries, Inc. (MYE) announced a revision of its financial results for its fourth quarter and year ended December 31, 2014, as a result of completing its Brazilian investigation.

The revision as compared to the Company's earnings release issued February 25, 2015 reflects adjustments which led to an increase in cost of sales of $2.4 million and an increase in selling, general and administrative expenses of $0.1 million for both the fourth quarter and full year of 2014.

The total adjustments reduced income from continuing operations by $2.5 million, net income from continuing operations by $2.3 million and earnings per diluted share from continuing operations by $0.07 for both the fourth quarter and full year of 2014. There were no changes to results from discontinued operations.

Therefore, net income and earnings per diluted share also changed by $2.3 million and $0.07, respectively, for both the fourth quarter and full year of 2014. Previously reported financial results for prior periods were not affected by the adjustments.

As a result of the adjustments, Myers Industries' previously released cash flow provided by continuing operations was reduced by $0.3 million to $51.8 million for the year ended December 31, 2014.

The revision to the financial results was primarily related to adjustments that were recorded as a result of the investigation of the Company's Brazilian operations that determined certain accounts were not properly reconciled and amounts were not substantiated by people responsible in the Brazilian location that knew or should have known they were not proper.

As a result of this investigation, management identified deficiencies in both the design and operating effectiveness of the Company's internal control over financial reporting, which when aggregated, represent two material weaknesses in internal control over the inventory process at the Brazilian operations and the financial statement close process at the Brazilian operations as of December 31, 2014.