Part I — Financial Information Presents the unaudited condensed consolidated financial statements and management's discussion and analysis for the quarter ended March 31, 2025 [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements for Myers Industries, Inc. and its subsidiaries, including statements of operations, comprehensive income (loss), financial position, shareholders' equity, and cash flows, along with detailed notes explaining significant accounting policies, acquisitions, restructuring activities, and other financial disclosures for the quarter ended March 31, 2025, compared to the prior year [Condensed Consolidated Statements of Operations (Unaudited)](index=3&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20(Unaudited)) Details the company's revenues, expenses, and net income for the first quarter of 2025 and 2024 Condensed Consolidated Statements of Operations (Unaudited) – Q1 2025 vs Q1 2024 (Dollars in thousands) | Metric | Q1 2025 | Q1 2024 | Change | % Change | | :--------------------------------- | :------ | :------ | :----- | :------- | | Net sales | $206,750 | $207,102 | $(352) | (0.2)% | | Cost of sales | $137,672 | $142,833 | $(5,161) | (3.6)% | | Gross profit | $69,078 | $64,269 | $4,809 | 7.5% | | Selling, general and administrative expenses | $44,755 | $47,113 | $(2,358) | (5.0)% | | Depreciation and amortization | $4,458 | $3,921 | $537 | 13.7% | | Freight out | $2,812 | $2,423 | $389 | 16.1% | | (Gain) loss on disposal of fixed assets | $403 | $(67) | $470 | -701.5% | | Operating income | $16,650 | $10,879 | $5,771 | 53.0% | | Interest expense, net | $7,386 | $6,079 | $1,307 | 21.5% | | Income before income taxes | $9,264 | $4,800 | $4,464 | 93.0% | | Income tax expense | $2,459 | $1,297 | $1,162 | 89.6% | | Net income | $6,805 | $3,503 | $3,302 | 94.3% | | Net income per common share: Basic | $0.18 | $0.09 | $0.09 | 100.0% | | Net income per common share: Diluted | $0.18 | $0.09 | $0.09 | 100.0% | [Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited)](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income%20(Loss)%20(Unaudited)) Details net income and other comprehensive income components, including foreign currency and interest rate swap impacts Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) – Q1 2025 vs Q1 2024 (Dollars in thousands) | Metric | Q1 2025 | Q1 2024 | Change | | :------------------------------------------ | :------ | :------ | :----- | | Net income | $6,805 | $3,503 | $3,302 | | Other comprehensive income (loss): | | | | | Foreign currency translation adjustment | $(8) | $(831) | $823 | | Unrealized gain (loss) on interest rate swap contracts, net of tax | $(1,450) | — | $(1,450) | | Realized (gain) loss on interest rate swap contracts reclassified to interest expense | $85 | — | $85 | | Total other comprehensive income (loss) | $(1,373) | $(831) | $(542) | | Comprehensive income | $5,432 | $2,672 | $2,760 | [Condensed Consolidated Statements of Financial Position (Unaudited)](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Financial%20Position%20(Unaudited)) Outlines assets, liabilities, and shareholders' equity at March 31, 2025, compared to December 31, 2024 Condensed Consolidated Statements of Financial Position (Unaudited) – March 31, 2025 vs December 31, 2024 (Dollars in thousands) | Metric | March 31, 2025 | December 31, 2024 | Change | | :---------------------------------------------------------------- | :------------- | :---------------- | :----- | | **Assets** | | | | | Cash | $35,302 | $32,222 | $3,080 | | Trade accounts receivable, net | $131,574 | $109,372 | $22,202 | | Inventories, net | $103,785 | $97,001 | $6,784 | | Total Current Assets | $289,140 | $259,307 | $29,833 | | Property, plant, and equipment, net | $135,993 | $137,564 | $(1,571) | | Goodwill | $255,545 | $255,532 | $13 | | Intangible assets, net | $162,531 | $166,321 | $(3,790) | | Total Assets | $883,842 | $860,815 | $23,027 | | **Liabilities and Shareholders' Equity** | | | | | Accounts payable | $84,890 | $71,049 | $13,841 | | Total Current Liabilities | $162,580 | $147,112 | $15,468 | | Long-term debt | $363,733 | $355,310 | $8,423 | | Total Liabilities | $606,419 | $583,303 | $23,116 | | Common Shares | $23,015 | $22,923 | $92 | | Additional paid-in capital | $324,631 | $325,163 | $(532) | | Accumulated other comprehensive loss | $(23,483) | $(22,110) | $(1,373) | | Retained deficit | $(46,740) | $(48,464) | $1,724 | | Total Shareholders' Equity | $277,423 | $277,512 | $(89) | | Total Liabilities and Shareholders' Equity | $883,842 | $860,815 | $23,027 | [Condensed Consolidated Statements of Shareholders' Equity (Unaudited)](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Shareholders'%20Equity%20(Unaudited)) Details changes in common shares, additional paid-in capital, accumulated other comprehensive loss, and retained deficit Condensed Consolidated Statements of Shareholders' Equity (Unaudited) – Q1 2025 vs Q1 2024 (Dollars in thousands) | Metric | Balance at Jan 1, 2025 | Q1 2025 Activity | Balance at Mar 31, 2025 | Balance at Jan 1, 2024 | Q1 2024 Activity | Balance at Mar 31, 2024 | | :------------------------------------------ | :--------------------- | :--------------- | :---------------------- | :--------------------- | :--------------- | :---------------------- | | Common Shares | $22,923 | $92 | $23,015 | $22,608 | $226 | $22,834 | | Additional Paid-In Capital | $325,163 | $(532) | $324,631 | $322,526 | $990 | $323,516 | | Accumulated Other Comprehensive Income (Loss) | $(22,110) | $(1,373) | $(23,483) | $(16,815) | $(831) | $(17,646) | | Retained Deficit | $(48,464) | $1,724 | $(46,740) | $(35,519) | $(1,534) | $(37,053) | | **Total Shareholders' Equity** | **$277,512** | **$(89)** | **$277,423** | **$292,800** | **$(1,159)** | **$291,651** | | *Net income* | — | $6,805 | | — | $3,503 | | | *Foreign currency translation adjustment* | — | $(8) | | — | $(831) | | | *Interest rate swap, net of tax* | — | $(1,365) | | — | — | | | *Shares issued under incentive plans, net* | — | $(533) | | — | $534 | | | *Repurchase of common stock* | — | $(1,008) | | — | — | | | *Stock compensation expense* | — | $1,101 | | — | $682 | | | *Declared dividends* | — | $(5,081) | | — | $(5,037) | | [Condensed Consolidated Statements of Cash Flows (Unaudited)](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows%20(Unaudited)) Summarizes cash flows from operating, investing, and financing activities for the first quarter of 2025 and 2024 Condensed Consolidated Statements of Cash Flows (Unaudited) – Q1 2025 vs Q1 2024 (Dollars in thousands) | Cash Flow Activity | Q1 2025 | Q1 2024 | Change | | :------------------------------------------ | :------ | :------ | :----- | | Net cash provided by (used for) operating activities | $10,131 | $20,270 | $(10,139) | | Net cash provided by (used for) investing activities | $(8,007) | $(354,522) | $346,515 | | Net cash provided by (used for) financing activities | $988 | $336,874 | $(335,886) | | Foreign exchange rate effect on cash | $(32) | $(182) | $150 | | Net increase (decrease) in cash | $3,080 | $2,440 | $640 | | Cash at January 1 | $32,222 | $30,290 | $1,932 | | Cash at March 31 | $35,302 | $32,730 | $2,572 | [Notes to Unaudited Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements for Myers Industries, Inc. and its subsidiaries, including statements of operations, comprehensive income (loss), financial position, shareholders' equity, and cash flows, along with detailed notes explaining significant accounting policies, acquisitions, restructuring activities, and other financial disclosures for the quarter ended March 31, 2025, compared to the prior year [1. Summary of Significant Accounting Policies](index=8&type=section&id=1.%20Summary%20of%20Significant%20Accounting%20Policies) Outlines the basis of financial statement preparation, recent accounting standard updates, and details on interest rate swap agreements - The unaudited condensed consolidated financial statements are prepared in accordance with SEC rules and GAAP, with certain information condensed or omitted. The Company updated its presentation of Depreciation and amortization expenses and third-party Freight out costs in Q1 2025, reclassifying them from Selling, general and administrative expenses[22](index=22&type=chunk)[23](index=23&type=chunk)[24](index=24&type=chunk) - The Company is evaluating the impact of new accounting standards: ASU 2023-09 (Income Tax Disclosures, effective after December 15, 2024) and ASU 2024-03 (Expense Disaggregation Disclosures, effective after December 15, 2026)[25](index=25&type=chunk)[26](index=26&type=chunk) - The Company entered into an interest rate swap agreement on May 2, 2024, to hedge variable interest rate exposure on a portion of its floating rate indebtedness. The swap has a beginning notional value of **$200.0 million**, reducing to **$190.0 million** by March 31, 2025, and effectively fixes the rate at **4.606%** plus the applicable margin[32](index=32&type=chunk)[33](index=33&type=chunk) Changes in Accumulated Other Comprehensive Income (Loss) (Dollars in thousands) | Metric | Balance at Jan 1, 2025 | Other comprehensive income (loss) before reclassifications | Reclassification to (earnings) loss | Net current-period other comprehensive income (loss) | Balance at Mar 31, 2025 | | :-------------------------------- | :--------------------- | :------------------------------------------------------- | :-------------------------- | :------------------------------------------- | :---------------------- | | Foreign Currency | $(18,609) | $(8) | — | $(8) | $(18,617) | | Interest Rate Swap (1) | $(2,400) | $(1,450) | $85 | $(1,365) | $(3,765) | | Defined Benefit Pension Plans | $(1,101) | — | — | — | $(1,101) | | **Total** | **$(22,110)** | **$(1,458)** | **$85** | **$(1,373)** | **$(23,483)** | [2. Revenue Recognition](index=12&type=section&id=2.%20Revenue%20Recognition) Explains the company's policies for recognizing revenue, including variable consideration, and details related freight out expenses - Revenue is recognized when control of products transfers to customers, typically at shipment or delivery. Contracts are generally short-term (within 90 days), and no significant deferred revenue is recorded[38](index=38&type=chunk) - Variable consideration, such as rebates and discounts, is estimated and recognized each period. Allowances for product returns are also recognized based on historical experience[39](index=39&type=chunk) Amounts Related to Revenue Recognition (Dollars in thousands) | Item | March 31, 2025 | December 31, 2024 | Statement of Financial Position Classification | | :-------------------------------- | :------------- | :---------------- | :--------------------------------------------- | | Returns, discounts and other allowances | $(706) | $(1,051) | Trade accounts receivable | | Right of return asset | $728 | $456 | Inventories, net | | Customer deposits | $(2,252) | $(2,565) | Other current liabilities | | Accrued rebates | $(2,922) | $(4,196) | Other current liabilities | - Freight out expenses were approximately **$2.8 million** for the manufacturing business in Q1 2025 (up from **$2.4 million** in Q1 2024) and approximately **$2.6 million** for the distribution business in Q1 2025 (down from **$2.9 million** in Q1 2024)[40](index=40&type=chunk) [3. Acquisitions](index=14&type=section&id=3.%20Acquisitions) Details the acquisition of Signature Systems, including its purchase price allocation and pro forma financial impacts - On February 8, 2024, the Company acquired Signature Systems, a manufacturer and distributor of composite matting ground protection, for **$348.3 million** cash (net of cash acquired). This acquisition is part of the Material Handling Segment and aligns with the Company's strategic plan for engineered plastic solutions[43](index=43&type=chunk) Final Purchase Price Allocation for Signature Acquisition (Dollars in thousands) | Item | Final Allocation | | :-------------------------------- | :--------------- | | **Assets acquired:** | | | Accounts receivable | $18,854 | | Inventories | $17,373 | | Property, plant and equipment | $28,263 | | Intangible assets | $136,700 | | Goodwill | $183,098 | | **Total Assets acquired** | **$394,126** | | **Liabilities assumed:** | | | Accounts payable | $4,904 | | Deferred income taxes | $32,073 | | **Total liabilities assumed** | **$45,814** | | **Net acquisition cost** | **$348,312** | Intangible Assets Acquired from Signature (Dollars in thousands) | Intangible Asset | Fair Value | Weighted Average Estimated Useful Life | | :----------------------------- | :--------- | :------------------------------------- | | Customer relationships | $83,800 | 10.0 years | | Technology | $31,300 | 12.0 years | | Total amortizable intangible assets | $115,100 | | | Trademarks and trade names | $21,600 | Indefinite | Unaudited Pro Forma Results for Q1 2024 (assuming Signature acquisition on Jan 1, 2023) (Dollars in thousands) | Metric | Q1 2024 Pro Forma | | :--------- | :---------------- | | Net sales | $221,821 | | Net income | $8,345 | [4. Restructuring](index=16&type=section&id=4.%20Restructuring) Describes the 'Focused Transformation' initiative, including cost savings targets, incurred charges, and expected remaining costs - The Company launched a 'Focused Transformation' initiative on March 6, 2025, aiming for **$20 million** in annualized cost savings (primarily SG&A) by year-end 2025. **$0.4 million** in restructuring charges were incurred in Q1 2025[50](index=50&type=chunk) - Restructuring within the Distribution Segment resulted in **$0.8 million** in charges for Q1 2025, including asset impairments, inventory write-downs, and severance. Approximately **$1.7 million** in remaining costs are expected[51](index=51&type=chunk) - The Ameri-Kart plan is complete, with **$0.2 million** in restructuring charges incurred in Q1 2024 and a **$1.8 million** lease termination payment in May 2024[52](index=52&type=chunk) - Other restructuring initiatives to streamline overhead costs totaled **$0.8 million** in Q1 2025, with **$1.7 million** in accrued and unpaid expenses at March 31, 2025[53](index=53&type=chunk) [5. Inventories](index=16&type=section&id=5.%20Inventories) Details the valuation methods for inventories and provides a breakdown of finished products, raw materials, and supplies - Approximately **30%** of inventories are valued using the LIFO method, with all other inventories valued using the FIFO method. No adjustment to the LIFO reserve was recorded for Q1 2025 or Q1 2024[54](index=54&type=chunk) Inventories Breakdown (Dollars in thousands) | Inventory Type | March 31, 2025 | December 31, 2024 | | :------------------------ | :------------- | :---------------- | | Finished and in-process products | $64,832 | $62,601 | | Raw materials and supplies | $38,953 | $34,400 | | **Total Inventories** | **$103,785** | **$97,001** | [6. Other Liabilities](index=17&type=section&id=6.%20Other%20Liabilities) Presents a breakdown of current and long-term liabilities, including customer deposits, environmental reserves, and hedge contracts Other Current Liabilities (Dollars in thousands) | Item | March 31, 2025 | December 31, 2024 | | :------------------------------------ | :------------- | :---------------- | | Customer deposits and accrued rebates | $5,174 | $6,761 | | Dividends payable | $5,376 | $5,613 | | Current portion of environmental reserves | $5,405 | $6,605 | | Hedge contract liability | $1,068 | $753 | | Other accrued expenses | $6,433 | $6,952 | | **Total Other Current Liabilities** | **$23,617** | **$26,794** | Other Long-Term Liabilities (Dollars in thousands) | Item | March 31, 2025 | December 31, 2024 | | :------------------------------------ | :------------- | :---------------- | | Environmental reserves | $10,530 | $9,984 | | Hedge contract liability | $4,019 | $2,490 | | Other long-term liabilities | $2,097 | $2,480 | | **Total Other Long-Term Liabilities** | **$16,942** | **$15,303** | [7. Goodwill and Intangible Assets](index=17&type=section&id=7.%20Goodwill%20and%20Intangible%20Assets) Provides a breakdown of goodwill by segment and describes the composition of intangible assets Goodwill by Segment (Dollars in thousands) | Segment | January 1, 2025 | Foreign currency translation | March 31, 2025 | | :-------------- | :-------------- | :--------------------------- | :------------- | | Distribution | $14,730 | — | $14,730 | | Material Handling | $240,802 | $13 | $240,815 | | **Total** | **$255,532** | **$13** | **$255,545** | - Intangible assets primarily include trade names, customer relationships, patents, non-competition agreements, and technology assets from acquisitions. Indefinite-lived trade names had a carrying value of **$31.4 million** at both March 31, 2025, and December 31, 2024[57](index=57&type=chunk) [8. Stockholders' Equity](index=18&type=section&id=8.%20Stockholders'%20Equity) Details the calculation of net income per common share and outlines the Company's stock repurchase program Net Income Per Common Share Calculation | Metric | Q1 2025 | Q1 2024 | | :------------------------------------------ | :---------- | :---------- | | Weighted average common shares outstanding basic | 37,298,967 | 36,908,169 | | Dilutive effect of stock options and restricted stock | 115,043 | 214,850 | | Weighted average common shares outstanding diluted | 37,414,010 | 37,123,019 | | Diluted Net income per common share | $0.18 | $0.09 | - The Board of Directors authorized a new 2025 Repurchase Program on February 27, 2025, for up to **$10.0 million** in common stock, effective March 10, 2025. This program replaces the previous 2013 authorization[59](index=59&type=chunk) - During Q1 2025, the Company repurchased **76,800 shares** for **$1.0 million** at an average cost of **$13.00 per share** under the 2025 Repurchase Program. Approximately **$9.0 million** remained authorized as of March 31, 2025[60](index=60&type=chunk) [9. Stock Compensation](index=18&type=section&id=9.%20Stock%20Compensation) Reports stock compensation expenses and details the unrecognized compensation cost related to non-vested stock-based awards - Stock compensation expense was **$1.1 million** for Q1 2025, an increase from **$0.7 million** in Q1 2024. These expenses are included in Selling, general and administrative expenses[63](index=63&type=chunk) - The 2024 Long-Term Incentive Plan, approved by shareholders on April 25, 2024, authorizes the issuance of up to **2,500,000 additional stock awards**. Total unrecognized compensation cost related to non-vested stock-based compensation was approximately **$7.9 million** at March 31, 2025, to be recognized over the next three years[62](index=62&type=chunk)[63](index=63&type=chunk) [10. Contingencies](index=19&type=section&id=10.%20Contingencies) Discusses legal matters, environmental liabilities, and potential insurance recoveries, including specific site-related costs and lawsuits - Management believes the ultimate outcome of current legal matters will not have a material adverse effect on the Company's financial position, cash flows, or results of operations, though inherent uncertainties exist[65](index=65&type=chunk) - For the New Idria Mercury Mine site, cumulative charges were **$25.1 million**, payments **$15.3 million**, and insurance recoveries **$7.1 million** through March 31, 2025. The ending reserve balance was **$11.7 million** and the probable insurance recovery receivable was **$7.5 million** at March 31, 2025[69](index=69&type=chunk)[70](index=70&type=chunk) - For the New Almaden Mine, Buckhorn has a total reserve of **$4.4 million** at March 31, 2025. Project costs are expected to be higher than initial estimates, and the Company intends to challenge responsibility for cost increases[72](index=72&type=chunk)[73](index=73&type=chunk) - Two lawsuits were filed in 2023 and 2025 against Scepter Manufacturing, LLC (a subsidiary) regarding portable fuel containers. The Company cannot yet assess the outcome or potential damages, but Scepter maintains insurance policies expected to cover substantial defense costs[74](index=74&type=chunk)[75](index=75&type=chunk) [11. Long-Term Debt and Loan Agreements](index=21&type=section&id=11.%20Long-Term%20Debt%20and%20Loan%20Agreements) Details the composition of long-term debt, loan agreement terms, interest rates, and compliance with debt covenants Long-Term Debt Composition (Dollars in thousands) | Debt Type | March 31, 2025 | December 31, 2024 | | :------------------------------------ | :------------- | :---------------- | | Amended Loan Agreement - Revolving Credit Facility | $13,000 | — | | Amended Loan Agreement - Term Loan A | $377,000 | $382,000 | | **Total Gross Debt** | **$390,000** | **$382,000** | | Less unamortized deferred financing costs | $6,618 | $7,041 | | Less current portion long-term debt | $19,649 | $19,649 | | **Long-term debt (net)** | **$363,733** | **$355,310** | - The Amended Loan Agreement, entered on February 8, 2024, permitted the Signature acquisition and provided a new 5-year **$400 million** Term Loan A, which amortizes in quarterly installments. **$9.2 million** in deferred financing fees were incurred[76](index=76&type=chunk)[77](index=77&type=chunk) - As of March 31, 2025, the Company had **$231.7 million** available under the Amended Loan Agreement. Borrowings bear interest at various floating rates (Term SOFR, RFR, SONIA, EURIBOR, CORRA-based)[78](index=78&type=chunk) - The Company repaid **$38.0 million** of senior unsecured notes in Q1 2024, terminating the Note Purchase Agreement and recognizing a **$0.1 million** loss on debt extinguishment[79](index=79&type=chunk) - The weighted average interest rate on borrowings was **7.59%** for Q1 2025, down from **8.93%** for Q1 2024[80](index=80&type=chunk) - The Company was in compliance with all debt covenants as of March 31, 2025, with an interest coverage ratio of **3.95** (minimum **3.00**) and a net leverage ratio of **2.77** (maximum **3.25**)[81](index=81&type=chunk)[122](index=122&type=chunk) [12. Income Taxes](index=22&type=section&id=12.%20Income%20Taxes) Reports the effective tax rate for the quarter and outlines the periods subject to tax examinations - The effective tax rate for Q1 2025 was **26.5%**, a slight decrease from **27.0%** in Q1 2024, primarily due to higher fixed non-deductible expenses in the prior year[83](index=83&type=chunk) - The Company is no longer subject to U.S. Federal examination for tax years before 2021 and is subject to state, local, and non-U.S. examinations for tax years 2020 through 2023[84](index=84&type=chunk) [13. Leases](index=22&type=section&id=13.%20Leases) Presents lease assets and liabilities, components of lease expense, and weighted-average lease terms and discount rates Lease Assets and Liabilities (Dollars in thousands) | Item | March 31, 2025 | December 31, 2024 | | :------------------------------------ | :------------- | :---------------- | | **Assets:** | | | | Operating lease assets (ROU asset) | $29,413 | $30,561 | | Finance lease assets | $7,741 | $7,927 | | **Total lease assets** | **$37,154** | **$38,488** | | **Liabilities:** | | | | Total operating lease liabilities | $29,244 | $30,297 | | Total finance lease liabilities | $8,461 | $8,615 | | **Total lease liabilities** | **$37,705** | **$38,912** | Components of Lease Expense (Dollars in thousands) | Lease Cost Component | Q1 2025 | Q1 2024 | | :------------------------------------ | :------ | :------ | | Operating lease cost (Cost of sales) | $1,790 | $1,732 | | Operating lease cost (SG&A) | $987 | $964 | | Finance lease cost (Amortization expense) | $185 | $185 | | Finance lease cost (Interest expense) | $77 | $83 | | **Total lease cost** | **$3,039** | **$2,964** | Weighted-Average Lease Terms and Discount Rates | Metric | March 31, 2025 | December 31, 2024 | | :------------------------------------ | :------------- | :---------------- | | Weighted-average remaining lease term (years): Operating leases | 4.71 | 4.93 | | Weighted-average remaining lease term (years): Finance leases | 10.75 | 11.00 | | Weighted-average discount rate: Operating leases | 6.3% | 6.3% | | Weighted-average discount rate: Finance leases | 3.7% | 3.7% | [14. Segments](index=24&type=section&id=14.%20Segments) Describes the Company's two reportable segments, Material Handling and Distribution, and provides their financial performance - The Company operates under two reportable segments: Material Handling (manufacturing plastic, metal, and rubber products like reusable containers, pallets, and ground protection matting) and Distribution (distributing tire servicing equipment and supplies, and manufacturing tire repair products and traffic markings)[89](index=89&type=chunk)[90](index=90&type=chunk)[91](index=91&type=chunk) Segment Performance – Q1 2025 vs Q1 2024 (Dollars in thousands) | Metric | Material Handling (2025) | Distribution (2025) | Corporate (2025) | Consolidated (2025) | Material Handling (2024) | Distribution (2024) | Corporate (2024) | Consolidated (2024) | | :------------------------------------ | :----------------------- | :-------------------- | :--------------- | :-------------------- | :----------------------- | :-------------------- | :--------------- | :-------------------- | | Net sales | $157,672 | $49,246 | — | $206,750 | $152,225 | $54,894 | — | $207,102 | | Cost of sales | $102,756 | $35,084 | — | $137,672 | $105,146 | $37,704 | — | $142,833 | | Selling, general and administrative expenses | $21,467 | $13,964 | $9,324 | $44,755 | $19,641 | $15,689 | $11,783 | $47,113 | | Operating income (loss) | $27,381 | $(1,181) | $(9,550) | $16,650 | $22,256 | $605 | $(11,982) | $10,879 | | Total assets | $734,577 | $98,941 | $50,324 | $883,842 | $796,713 | $106,601 | $43,822 | $947,136 | | Capital additions, net | $7,953 | $105 | $25 | $8,083 | $5,206 | $380 | $121 | $5,707 | | Depreciation and amortization | $8,846 | $824 | $765 | $10,435 | $7,525 | $773 | $430 | $8,728 | - Foreign business units contributed approximately **$11.1 million** in sales for Q1 2025, an increase from **$9.9 million** in Q1 2024[92](index=92&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=28&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the Company's financial performance, liquidity, and capital resources for the quarter ended March 31, 2025, compared to the prior year. It includes forward-looking statements, an executive overview of business segments and the economic environment, and a detailed discussion of key financial results and changes [Forward-Looking Statements](index=28&type=section&id=Forward-Looking%20Statements) Highlights the inherent uncertainties and risks associated with the company's financial outlook and future business plans - The report contains forward-looking statements regarding financial outlook, future plans, objectives, business prospects, and anticipated financial performance, which are based on current beliefs and assumptions and involve inherent uncertainties and risks[97](index=97&type=chunk) - Specific risk factors include significant increases in raw material costs, competitive environment, changes in U.S. trade policy, production disruptions, new product development, intellectual property protection, price volatility of common stock, strategic growth initiatives, economic downturns, foreign business risks, access to credit financing, equity ownership concentration, claims, litigation, regulatory actions, and unforeseen catastrophic events[98](index=98&type=chunk) [Executive Overview](index=28&type=section&id=Executive%20Overview) Provides an overview of the company's operating segments and its strategy for managing current economic uncertainties - Myers Industries operates in two reportable segments: Material Handling (manufacturing plastic, metal, and rubber products like reusable containers, pallets, and ground protection matting) and Distribution (distributing tire servicing equipment and supplies, and manufacturing tire repair products)[100](index=100&type=chunk)[101](index=101&type=chunk) - The current economic environment presents heightened risks from tariffs, inflation, interest rates, volatile commodity costs, supply chain disruptions, and labor availability due to geopolitical factors. The Company believes it is well-positioned to manage these uncertainties with a strong balance sheet, sufficient liquidity, and a diverse product and customer base[102](index=102&type=chunk) [Results of Operations: Comparison of the Quarter Ended March 31, 2025 to the Quarter Ended March 31, 2024](index=30&type=section&id=Results%20of%20Operations%3A%20Comparison%20of%20the%20Quarter%20Ended%20March%2031%2C%202025%20to%20the%20Quarter%20Ended%20March%2031%2C%202024) Analyzes the company's financial performance, including net sales, gross profit, operating expenses, and net income Net Sales by Segment (Dollars in thousands) | Segment | Q1 2025 | Q1 2024 | Change | % Change | | :---------------- | :------ | :------ | :----- | :------- | | Material Handling | $157,672 | $152,225 | $5,447 | 3.6% | | Distribution | $49,246 | $54,894 | $(5,648) | (10.3)% | | Inter-company sales | $(168) | $(17) | $(151) | | | **Total net sales** | **$206,750** | **$207,102** | **$(352)** | **(0.2)%** | - Total net sales decreased by **0.2%** due to lower pricing (**$6.0 million**), lower volume (**$0.2 million**), and unfavorable currency translation (**$0.6 million**), partially offset by **$6.4 million** incremental sales from the Signature acquisition[103](index=103&type=chunk) - Gross profit increased by **$4.8 million** (**7.5%**) to **$69.1 million**, with gross margin improving to **33.4%** from **31.0%**. This was driven by benefits from the Signature acquisition, favorable mix, and lower material costs, partially offset by lower volume and pricing[106](index=106&type=chunk) - Selling, general and administrative (SG&A) expenses decreased by **$2.4 million** (**5.0%**) to **$44.8 million**, primarily due to lower acquisition and integration costs, variable selling expenses, legal fees, and salaries, partially offset by incremental SG&A from Signature and higher restructuring costs[107](index=107&type=chunk) - Net interest expense increased by **$1.3 million** (**21.5%**) to **$7.4 million**, mainly due to higher average outstanding borrowings from the Signature acquisition, partially offset by a lower weighted-average borrowing rate of **7.59%** (down from **8.93%**)[111](index=111&type=chunk) - The effective tax rate decreased to **26.5%** from **27.0%**, driven by higher fixed non-deductible expenses in the prior year[112](index=112&type=chunk) [Liquidity and Capital Resources](index=31&type=section&id=Liquidity%20and%20Capital%20Resources) Examines the company's cash position, operating cash flow, investing activities, financing activities, and debt compliance - The Company's primary sources of liquidity are cash on hand (**$35.3 million** at March 31, 2025), cash generated from operations, and **$231.7 million** available under the Amended Loan Agreement. Total outstanding debt was **$391.8 million**[113](index=113&type=chunk) - Net cash provided by operating activities decreased to **$10.1 million** in Q1 2025 from **$20.3 million** in Q1 2024, primarily due to changes in working capital (increases in accounts receivable and inventories, partially offset by increases in accounts payable)[114](index=114&type=chunk) - Net cash used for investing activities significantly decreased to **$8.0 million** in Q1 2025 from **$354.5 million** in Q1 2024, as the prior year included the **$348.3 million** Signature acquisition. Capital expenditures increased to **$8.1 million** from **$5.7 million**[115](index=115&type=chunk) - Net cash provided by financing activities decreased to **$1.0 million** in Q1 2025 from **$336.9 million** in Q1 2024, primarily because Q1 2024 included **$400 million** proceeds from the Term Loan A for the Signature acquisition. Q1 2025 included **$13.0 million** net borrowings on the revolving credit facility, **$5.0 million** Term Loan A repayments, and **$1.0 million** for common stock repurchases[116](index=116&type=chunk) - The Company repaid **$38.0 million** of senior unsecured notes in Q1 2024. The Amended Loan Agreement, which facilitated the Signature acquisition, provided a new **$400 million** Term Loan A. An interest rate swap was entered into on May 2, 2024, to mitigate variable interest rate risk on **$190.0 million** notional debt[117](index=117&type=chunk)[118](index=118&type=chunk)[120](index=120&type=chunk) Debt Covenants as of March 31, 2025 | Covenant | Required Level | Actual Level | | :---------------------- | :------------- | :----------- | | Interest Coverage Ratio | 3.00 to 1 (minimum) | 3.95 | | Net Leverage Ratio | 3.25 to 1 (maximum) | 2.77 | - The Company does not have any off-balance sheet arrangements that are reasonably expected to have a material current or future effect on its financial condition, results of operations, liquidity, capital expenditures, or capital resources[123](index=123&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=34&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section outlines the Company's exposure to various market risks, including interest rate risk, foreign currency exchange risk, and commodity price risk, and describes the strategies employed to manage these exposures - The Company is exposed to interest rate risk due to floating rate financing arrangements. A **1%** change in market interest rates would change annual variable interest expense by approximately **$2.0 million** based on current debt levels. An interest rate swap mitigates this risk, effectively fixing rates on a portion of debt, where a **1%** change would impact annual fixed rate interest expense on the swap by approximately **$5.9 million**[124](index=124&type=chunk)[125](index=125&type=chunk) - Foreign currency exchange risk primarily arises from operations in Canada and the United Kingdom with U.S. dollar sales. The Company has a systematic program to limit exposure, typically using short-term contracts, but had no foreign currency arrangements in place at March 31, 2025[126](index=126&type=chunk) - The Company faces commodity price risk from raw materials, mainly plastic resins, and natural gas. It currently has no derivative contracts to hedge raw material pricing, and significant future increases in plastic resin costs could materially impact financial results[127](index=127&type=chunk) [Item 4. Controls and Procedures](index=35&type=section&id=Item%204.%20Controls%20and%20Procedures) This section details the evaluation of the Company's disclosure controls and procedures and confirms that there have been no material changes in internal control over financial reporting during the quarter - The Company's Chief Executive Officer and Chief Financial Officer concluded that the disclosure controls and procedures were effective as of March 31, 2025[129](index=129&type=chunk) - There have been no changes in the Company's internal control over financial reporting during the quarter ended March 31, 2025, that have materially affected, or are reasonably likely to materially affect, its internal control over financial reporting[130](index=130&type=chunk) Part II — Other Information Provides additional information on legal proceedings, equity sales, other disclosures, and exhibits filed with the report [Item 1. Legal Proceedings](index=36&type=section&id=Item%201.%20Legal%20Proceedings) This section refers to Note 10, Contingencies, for detailed information on legal proceedings and reiterates management's belief that these matters will not have a material adverse effect on the Company's financial position, results of operations, or cash flows - Legal proceedings are discussed in detail in Note 10, Contingencies, of the Unaudited Condensed Consolidated Financial Statements[132](index=132&type=chunk) - Management believes that the outcome of these lawsuits and other proceedings will not individually or in the aggregate have a future material adverse effect on the Company's consolidated financial position, results of operations, or cash flows[132](index=132&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=36&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section provides information on the Company's stock repurchase activities during the quarter ended March 31, 2025, including details of the newly authorized 2025 Repurchase Program - The Board authorized a new 2025 Repurchase Program on February 27, 2025, for up to **$10.0 million** in common stock, effective March 10, 2025. This program replaced the previously authorized 2013 repurchase program[134](index=134&type=chunk) Stock Repurchase Activity (Q1 2025) | Period | Total Number of Shares Purchased | Average Price Paid per Share | Total Number of Shares Purchased as Part of the Publicly Announced Plans or Programs | Maximum dollar value of Shares that may yet be Purchased Under the Plans or Programs | | :---------------------- | :----------------------------- | :--------------------------- | :----------------------------------------------------------------------- | :-------------------------------------------------------------------- | | 1/1/2025 to 1/31/2025 | — | $— | 5,547,665 | N/A | | 2/1/2025 to 2/28/2025 | — | — | 5,547,665 | N/A | | 3/1/2025 to 3/10/2025 | — | — | 5,547,665 | N/A | | 3/10/2025 to 3/31/2025 | 76,800 | $13.00 | 76,800 | $9,001,684 | [Item 5. Other Information](index=36&type=section&id=Item%205.%20Other%20Information) This section confirms that no directors or executive officers adopted or terminated any Rule 10b5-1 trading arrangements during the first quarter of 2025 - During the three months ended March 31, 2025, none of the Company's directors or executive officers adopted or terminated any contract, instruction, or written plan for the purchase or sale of Company securities intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) or any 'non-Rule 10b5-1 trading arrangement'[134](index=134&type=chunk) [Item 6. Exhibits](index=37&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed as part of the Form 10-Q, including corporate governance documents, stock award agreements, certifications, and the interactive data file - Key exhibits filed include the Second Amended and Restated Articles of Incorporation, Amended and Restated Code of Regulations, Forms of 2025 Restricted Stock Unit and Performance Stock Unit Award Agreements, Certifications by the CEO and CFO (pursuant to Sections 302 and 906 of Sarbanes-Oxley Act), and the Cover Page Interactive Data File (XBRL)[136](index=136&type=chunk) [Signature](index=38&type=section&id=Signature) This section contains the formal signature block for the Form 10-Q report, indicating its official submission - The report was signed on May 1, 2025, by Grant E. Fitz, Executive Vice President and Chief Financial Officer (Principal Financial and Accounting Officer) of Myers Industries, Inc.[140](index=140&type=chunk)

Financial Data and Key Metrics Changes - First quarter net sales were $206.8 million, essentially flat year over year, with growth in material handling offset by softness in the distribution segment [24][26] - Adjusted gross margin improved by 80 basis points to 33.5%, driven largely by the acquisition of Signature and favorable product mix [25] - Adjusted operating income increased to $18.7 million, with margin improving 100 basis points to 9% of sales [25] - Diluted adjusted earnings per share were $0.22 compared to $0.21 in the previous year [26] Business Line Data and Key Metrics Changes - Material Handling net sales increased by 3.6% year over year, primarily due to the Signature acquisition [26] - Adjusted EBITDA for Material Handling rose by 11.7% to $36.3 million, resulting in a 60 basis point increase in adjusted EBITDA margin to 23% [27] - Distribution net sales decreased by 10.3% due to lower volume and pricing, with adjusted EBITDA dropping to $500,000 [27] Market Data and Key Metrics Changes - Industrial market is expected to continue moderate growth driven by global inventory replenishment for military applications [31] - The vehicle end market, including RV and marine, is projected to decline due to economic uncertainty and tariff impacts [31][56] - Consumer market sales are anticipated to remain stable, while food and beverage markets are also projected to be stable [31] Company Strategy and Development Direction - The company is focused on a transformation program aimed at delivering consistent and reliable results, with objectives including establishing a culture of execution and accountability [11][12] - Plans to optimize cash flow and support disciplined capital allocation, including a $10 million share repurchase plan [16] - The company aims to announce an updated long-term strategy for each business by the end of the year [14] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate tariff impacts due to a predominantly domestic supply chain [10] - There are clear opportunities for improvement, and management is optimistic about the path to elevate performance [7][8] - The company is closely monitoring end market conditions for potential impacts from tariffs and other factors [30] Other Important Information - The company has achieved $12 million in synergies from the Signature acquisition, exceeding the initial target of $8 million [70] - The CFO, Grant Fitz, will be stepping down, with Dan Hoehn serving as interim CFO [22][23] Q&A Session Summary Question: Impact of tariffs on Central America facilities and price sensitivity of customers - Management indicated that Central America has a small impact on the distribution business and that customers are price sensitive but will adjust as needed [38][39] Question: Reasons for low free cash flow this quarter - Management explained that low free cash flow was due to timing of accounts receivable and proactive inventory purchases ahead of potential tariffs [40][44] Question: Uptake in orders for military products from Signature and Scepter - Management reported strong order flow and growth in both Signature and Scepter businesses, with positive customer relationships [47][49] Question: Outlook for the vehicle group and economic uncertainty - Management noted that economic uncertainty and tariff impacts have led to a cautious approach among customers in the RV and marine sectors [55][56] Question: Strategies to turn around the distribution business - Management emphasized the importance of understanding customer needs and providing value-added services to improve the distribution business [62][64] Question: Learnings from the Signature acquisition - Management highlighted successful integration and synergies achieved from the Signature acquisition, which has positively impacted operations [68][70]

Financial Data and Key Metrics Changes - First quarter net sales were $206.8 million, essentially flat year over year, with growth in material handling offset by softness in the distribution segment [24][26] - Adjusted gross margin improved by 80 basis points to 33.5%, driven by the acquisition of Signature and favorable product mix [25] - Adjusted operating income increased to $18.7 million, with a margin improvement of 100 basis points to 9% of sales [25] - Diluted adjusted earnings per share rose to $0.22 compared to $0.21 in 2024 [26] Business Line Data and Key Metrics Changes - Material Handling net sales increased by 3.6% year over year, primarily due to the Signature acquisition [26] - Adjusted EBITDA for Material Handling rose by 11.7% to $36.3 million, with a 60 basis point increase in adjusted EBITDA margin to 23% [27] - Distribution net sales decreased by 10.3% due to lower volume and pricing, with adjusted EBITDA dropping to $500,000 [27] Market Data and Key Metrics Changes - Industrial market is expected to see moderate growth driven by global inventory replenishment for military applications [31] - The vehicle end market, including RV and marine, is projected to decline due to economic uncertainty and tariff impacts [31] - Consumer market sales are anticipated to remain stable, while food and beverage markets are also projected to be stable [31] Company Strategy and Development Direction - The company is focused on a transformation program aimed at delivering consistent and reliable results, with objectives including establishing a culture of execution and accountability [12][13] - Plans to optimize cash flow and support disciplined capital allocation, including a $10 million share repurchase plan [17] - The company aims to announce an updated long-term strategy for each business by the end of the year [15] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate tariff impacts due to a predominantly domestic supply chain [10][11] - There is a focus on improving performance across the portfolio, with specific strategies for high growth and lower growth markets [14][15] - Management acknowledged the challenges posed by economic uncertainty and tariffs, particularly in the RV and marine markets [54][56] Other Important Information - The company has achieved $12 million in synergies from the Signature acquisition, exceeding the initial target of $8 million [67] - The CFO announced his departure, with the corporate controller stepping in as interim CFO [22] Q&A Session Summary Question: Impact of tariffs on Central America facilities and customer price sensitivity - Management indicated that Central America has a small impact on the distribution business and that customers are price sensitive but will adjust as needed [38][39] Question: Reasons for low free cash flow this quarter - Management explained that low free cash flow was due to timing of accounts receivable and proactive inventory purchases ahead of potential tariffs [40][42] Question: Uptake in orders for military products from Signature and Scepter - Management reported strong order flow and growth in both Signature and Scepter businesses, with expectations for continued growth [45][48] Question: Details on the vehicle group's downturn - Management attributed the downturn to economic uncertainty and tariff impacts affecting RV and marine spending [52][54] Question: Needs for turning around the distribution business - Management emphasized the importance of understanding customer needs and providing value-added services to improve the distribution business [59][60] Question: Learnings from the Signature acquisition - Management highlighted successful integration and synergies achieved from the Signature acquisition, noting cultural fit and operational improvements [65][67]

Financial Performance - Net sales were $206.8 million, a slight decrease of 0.2% year-over-year[8, 28] - Gross profit increased by 7.5% to $69.1 million[8] - Adjusted operating income increased by 12.2% to $18.7 million[8, 28] - Adjusted net income increased by 5.5% to $8.4 million[8] - Diluted adjusted EPS increased by 4.8% to $0.22[8, 28] - Free cash flow was $2.0 million in Q1[42] Segment Results - Material Handling net sales increased by 3.6% to $157.7 million[37] - Distribution net sales decreased by 10.3% to $49.2 million[39] Strategic Initiatives - The company is targeting $20 million in annualized cost savings by year-end 2025, primarily in SG&A[13, 49] - The company repurchased $1 million in shares in Q1 as part of a $10 million share repurchase authorization[13, 46]

Financial Performance - First quarter 2025 net sales were $206.75 million, a slight decrease of 0.2% compared to $207.10 million in Q1 2024[4] - Gross profit increased by 7.5% to $69.08 million, resulting in a gross margin of 33.4%, up from 31.0% in the prior year[4] - Operating income rose significantly by 53.0% to $16.65 million, while net income increased by 94.3% to $6.81 million, leading to a net income per diluted share of $0.18, doubling from $0.09 in Q1 2024[4] - Adjusted EBITDA for Q1 2025 was $28,573,000, compared to $25,140,000 in Q1 2024, reflecting a 9.7% year-over-year growth[23] - Adjusted operating income for Q1 2025 was $18,678,000, up from $16,643,000 in Q1 2024, indicating a 12.2% increase[23] - Adjusted net income for Q1 2025 was $8,356,000, compared to $7,923,000 in Q1 2024, reflecting a 5.4% increase[24] - The diluted earnings per share for Q1 2025 was $0.18, up from $0.09 in Q1 2024, marking a 100% increase[26] - The company reported a net income of $6,805,000 for Q1 2025, compared to $3,503,000 in Q1 2024, which is a 94.5% increase[26] Segment Performance - The Material Handling segment reported net sales of $157.7 million, a 3.6% increase year-over-year, with operating income margin improving by 280 basis points to 17.4%[5] - The Distribution segment experienced a decline in net sales to $49.2 million, down 10.3% from the previous year, resulting in an operating income margin of -2.4%[6] Liquidity and Cash Flow - Total liquidity at the end of the quarter was $267.0 million, with $231.7 million available under the revolving credit facility and cash on hand of $35.3 million[9] - Cash flows from operating activities for Q1 2025 were $10,131,000, down from $20,270,000 in Q1 2024[20] - Ending cash balance increased to $35,302,000 in Q1 2025 from $32,730,000 in Q1 2024, reflecting a growth of 7.7%[20] - The company reported a net cash provided by financing activities of $988,000 in Q1 2025, a significant decrease from $336,874,000 in Q1 2024[20] Expenses and Liabilities - Selling, general and administrative expenses for Q1 2025 were $44,755,000, slightly lower than $47,113,000 in Q1 2024, indicating a decrease of 5.7%[26] - Total current liabilities rose to $162,580,000 in Q1 2025, compared to $147,112,000 in Q4 2024, marking an increase of 10.5%[19] - The company incurred restructuring expenses of $2,028,000 in Q1 2025, compared to $241,000 in Q1 2024, indicating a significant rise in restructuring costs[24] - Interest expense for Q1 2025 was $7,386,000, down from $6,079,000 in Q1 2024, showing an increase of 21.5%[26] Capital Expenditures and Assets - Capital expenditures for Q1 2025 were $8,083,000, compared to $5,707,000 in Q1 2024, representing an increase of 41.8%[20] - Total assets increased to $883,842,000 as of March 31, 2025, up from $860,815,000 at the end of 2024, representing a 2.4% increase[19] Future Outlook - The 2025 outlook for the Industrial end market is moderate growth, while the Infrastructure segment is expected to see strong growth[11] - More than 90% of revenue from the Material Handling segment is anticipated to be manufactured in the U.S. in 2025, providing supply chain advantages[3] - The company aims to foster a culture of accountability and continuous improvement through its "Focused Transformation" program[3] Taxation - The effective income tax rate for 2025 was 26%, compared to 25% in 2024, reflecting a slight increase[24]

Core Insights - Myers Industries, based in Akron, Ohio, is viewed as a compelling investment opportunity due to a recent surge in share price following a stronger-than-expected Q4 earnings report, consistent dividend payouts, and the launch of its "Focused Transformation" program aimed at growth and efficiency [1][5][15] Financial Performance - The Q4 2024 earnings report revealed adjusted earnings per share (EPS) of 19 cents and GAAP EPS of 11 cents, both exceeding the estimated 10 cents [2] - Net sales increased by 6.7% to $203.9 million, slightly above the projected $203.10 million, with gross margin expanding to 32.3% and adjusted EBITDA rising by 26.2% to $27.5 million, indicating improved operational efficiency [3] - The Material Handling segment saw a 20.3% increase in net sales to $152.7 million, while the Distribution segment experienced a 20.2% decline to $51.2 million due to volume and pricing pressures [4] Strategic Initiatives - The "Focused Transformation" program aims to enhance long-term performance, optimize business structure, improve cost competitiveness, and enable sustainable growth, targeting a $20 million reduction in SG&A expenses by 2025 [6][7] - A comprehensive business portfolio review is underway to identify value creation opportunities, with a focus on high-value opportunities and disciplined cost optimization [7] Dividend and Shareholder Value - Myers Industries has a consistent commitment to returning value to shareholders, with a current dividend yield of approximately 4.40% and an annual dividend of $0.54 per share [8][9] - The trailing dividend payout ratio is high at approximately 125%, but analysts project it to decrease to around 46.2% as earnings grow, enhancing sustainability [10] Market Reaction and Analyst Outlook - Following the positive earnings release, the stock price surged by approximately 27%, indicating strong investor confidence in the company's strategic initiatives [12] - Analysts maintain a Hold rating on the stock, with a consensus price target of $22.00, suggesting a potential upside of over 75% [13][14]

Part I [Business](index=4&type=section&id=Item%201.%20Business) Myers Industries manufactures and distributes polymer, metal, and rubber products via Material Handling and Distribution segments, recently expanding through the Signature Systems acquisition - The company operates through two business segments: Material Handling and Distribution[22](index=22&type=chunk) 2024 Net Sales by Business Segment | Segment | 2024 Net Sales (in millions) | Percentage of Total | | :--- | :--- | :--- | | Material Handling | $621.7 | 74% | | Distribution | $214.8 | 26% | - On **February 8, 2024**, the Company acquired Signature Systems, a manufacturer of composite matting ground protection, which is included in the Material Handling Segment; Signature's annual sales were approximately **$110 million** at the time of acquisition[25](index=25&type=chunk) - The company's order backlog was approximately **$102 million** at the end of 2024, an increase from **$75 million** at the end of 2023[44](index=44&type=chunk) - As of **December 31, 2024**, the company employed approximately **2,700 people**, with about **125** represented by a labor union whose contract expires on **June 30, 2025**[45](index=45&type=chunk) - No single customer accounted for more than **ten percent** of total net sales in 2024, 2023, or 2022[43](index=43&type=chunk) [Risk Factors](index=10&type=section&id=Item%201A.%20Risk%20Factors) The company faces operational, strategic, and financial risks, including raw material cost volatility, acquisition integration challenges, economic downturns, and environmental liabilities - The company's financial performance is vulnerable to significant increases in the cost or disruptions in the availability of primary raw materials like plastic resins, steel, and rubber[54](index=54&type=chunk) - The company may not realize the anticipated benefits from past or future acquisitions, such as the recent Signature Systems purchase, and could face difficulties integrating acquired businesses[74](index=74&type=chunk) - Variable rate indebtedness exposes the company to interest rate risk, where an increase in rates would raise debt service obligations and decrease net income[85](index=85&type=chunk) - The company is exposed to potential liability from environmental laws and regulations, including being named a potentially responsible party (PRP) for the New Idria Mercury Mine Superfund site[93](index=93&type=chunk)[95](index=95&type=chunk) - A significant concentration of equity ownership exists, with the Gamco Group beneficially owning approximately **14.5%** of the company's common stock as of **December 31, 2024**, which could influence shareholder actions[89](index=89&type=chunk) [Unresolved Staff Comments](index=25&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company has no unresolved staff comments from the Securities and Exchange Commission - None[104](index=104&type=chunk) [Cybersecurity](index=25&type=section&id=Item%201C.%20Cybersecurity) The company manages cybersecurity risks using the NIST framework, with regular board oversight and no material incidents reported - The company's information security management system is based on the National Institute of Standards and Technology Cybersecurity Framework (NIST CSF)[105](index=105&type=chunk) - Management provides regular reports and training on cybersecurity to the Board; there have been no material cybersecurity incidents in the periods presented[106](index=106&type=chunk) [Properties](index=26&type=section&id=Item%202.%20Properties) As of December 31, 2024, the company owns and leases various properties globally for its operations, which management deems adequate Principal Properties Overview (as of Dec 31, 2024) | Status | Primary Locations | Use | | :--- | :--- | :--- | | Owned | Akron, OH; Miami, OK; Springfield, MO | Administration, Manufacturing, Distribution | | Leased | Various U.S. states, Canada, El Salvador, Panama, UK | Manufacturing, Distribution, Warehousing, Sales | [Legal Proceedings](index=27&type=section&id=Item%203.%20Legal%20Proceedings) The company is involved in various legal proceedings, but management anticipates no material adverse effect on its financial position or operations - The company is a defendant in various lawsuits arising in the ordinary course of business[109](index=109&type=chunk) - Management believes the ultimate outcome of these matters will not have a material adverse effect on the company's financial position or cash flows[110](index=110&type=chunk) - For specific information on the New Idria Mercury Mine and New Almaden Mine matters, the report refers to Note 9 of the Consolidated Financial Statements[111](index=111&type=chunk) Part II [Market for Registrant's Common Stock, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=28&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Stock%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company's common stock trades on the NYSE, maintained its quarterly dividend, had no Q4 2024 repurchases, and significantly underperformed market indices over five years Quarterly Dividends Per Share | Year | Quarter Ended March 31 | Quarter Ended June 30 | Quarter Ended Sept 30 | Quarter Ended Dec 31 | | :--- | :--- | :--- | :--- | :--- | | 2024 | $0.135 | $0.135 | $0.135 | $0.135 | | 2023 | $0.135 | $0.135 | $0.135 | $0.135 | - No shares were repurchased in the fourth quarter of 2024; as of **December 31, 2024**, **2,452,335 shares** were still available for purchase under the publicly announced repurchase plans[120](index=120&type=chunk) 5-Year Cumulative Total Return Comparison (2019-2024) | Index | Cumulative Return on $100 Investment | | :--- | :--- | | Myers Industries Inc. | $77.39 | | S&P 500 Index | $197.02 | | Russell 2000 Index | $142.93 | | S&P 600 Materials (Sector) Index | $165.34 | [Reserved](index=29&type=section&id=Item%206.%20Reserved) This item is not applicable [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=30&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the 2024 financial results, noting a 2.9% net sales increase driven by acquisition, a significant net income decrease due to impairment and higher debt costs, and sufficient liquidity [Results of Operations: 2024 Compared with 2023](index=30&type=section&id=Results%20of%20Operations%3A%202024%20Compared%20with%202023) Net sales increased 2.9% to $836.3 million in 2024 due to the Signature acquisition, but net income significantly decreased to $7.2 million from $48.9 million due to impairment and higher interest expenses Net Sales by Segment (2024 vs. 2023) | Segment (in thousands) | 2024 | 2023 | Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Material Handling | $621,655 | $555,259 | $66,396 | 12.0% | | Distribution | $214,768 | $257,875 | $(43,107) | (16.7)% | | **Total Net Sales** | **$836,281** | **$813,067** | **$23,214** | **2.9%** | - Gross profit increased by **$11.7 million** (**4.5%**) in 2024, primarily due to the Signature acquisition, though this was partially offset by a **$4.5 million** acquisition-related inventory step-up amortization[134](index=134&type=chunk)[135](index=135&type=chunk) - SG&A expenses increased by **$17.2 million** (**9.2%**) in 2024, mainly due to **$28.8 million** in incremental SG&A from the Signature acquisition, including **$10.1 million** of intangible amortization[136](index=136&type=chunk) - A non-cash impairment charge of **$22.0 million** was recorded in 2024 for the full carrying value of goodwill in the rotational molding reporting unit[137](index=137&type=chunk) - Net interest expense increased by **387.3%** to **$30.9 million** in 2024, driven by higher average borrowings to fund the Signature acquisition and a higher weighted-average borrowing rate[138](index=138&type=chunk) [Financial Condition & Liquidity and Capital Resources](index=34&type=section&id=Financial%20Condition%20%26%20Liquidity%20and%20Capital%20Resources) As of December 31, 2024, the company's liquidity is supported by **$32.2 million** cash and **$244.7 million** available under its loan agreement, despite total debt increasing to **$383.6 million** due to the Signature acquisition - Primary sources of liquidity are cash on hand (**$32.2 million**), cash from operations, and availability under the Amended Loan Agreement (**$244.7 million**)[140](index=140&type=chunk) - Cash provided by operating activities was **$79.3 million** in 2024, a decrease from **$86.2 million** in 2023[141](index=141&type=chunk) - Net cash used in investing activities was **$372.5 million**, primarily due to the **$348.3 million** payment for the Signature acquisition[142](index=142&type=chunk) - Financing activities provided **$295.1 million**, driven by **$400 million** in proceeds from a new term loan facility used to fund the acquisition[143](index=143&type=chunk) - The company entered into an interest rate swap agreement on **May 2, 2024**, to hedge a portion of its variable-rate debt, effectively fixing the rate on a notional value of **$200.0 million**[151](index=151&type=chunk) - The company was in compliance with all debt covenants as of **December 31, 2024**, with a Net Leverage Ratio of **2.69** (max **4.00**) and an Interest Coverage Ratio of **4.20** (min **3.00**)[153](index=153&type=chunk) [Critical Accounting Policies and Estimates](index=37&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) Management identifies critical accounting policies requiring significant judgment, including contingencies, business combinations, and goodwill impairment testing, all relying on subjective estimates - Accounting for contingencies, such as environmental liabilities, requires significant judgment to estimate probable losses[156](index=156&type=chunk) - Business combination accounting requires management to make significant estimates regarding the fair value of acquired assets and liabilities, which impacts future operating results[157](index=157&type=chunk) - Goodwill impairment testing involves estimating the fair value of reporting units using discounted cash flow and market-based approaches, which rely on subjective assumptions about future performance, discount rates, and growth rates[158](index=158&type=chunk)[159](index=159&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=39&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company faces interest rate, foreign currency, and commodity price risks, with a 1% interest rate change impacting annual expense by **$1.9 million** on unhedged debt, and no hedging for significant plastic resin costs - A **one percent** change in market interest rates would change the company's annual variable interest expense by approximately **$1.9 million** on its unhedged debt[163](index=163&type=chunk) - The company has entered into an interest rate swap agreement to mitigate variable interest rate risk on a portion of its borrowings[164](index=164&type=chunk) - The company is exposed to commodity price risk, primarily from plastic resins, and currently has no derivative contracts to hedge these price changes[166](index=166&type=chunk) [Financial Statements and Supplementary Data](index=40&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section presents the audited consolidated financial statements for 2022-2024, including an unqualified auditor's opinion, and highlights the significant impact of the Signature acquisition on assets, liabilities, and 2024 net income [Report of Independent Registered Public Accounting Firm](index=40&type=section&id=Report%20of%20Independent%20Registered%20Public%20Accounting%20Firm) Ernst & Young LLP issued an unqualified opinion on the financial statements and internal controls, noting critical audit matters for the New Idria Mine environmental liability and Signature acquisition intangible asset valuation - The auditor, Ernst & Young LLP, issued an unqualified opinion on the consolidated financial statements and the company's internal control over financial reporting[169](index=169&type=chunk)[170](index=170&type=chunk) - A critical audit matter was the New Idria Mine environmental liability, which involved a high degree of subjectivity in estimating the costs for the Remedial Investigation/Feasibility Study (RI/FS)[174](index=174&type=chunk) - A second critical audit matter was the valuation of intangible assets (customer relationships, technology, trademarks) acquired in the Signature acquisition, due to the complex and subjective nature of estimating their fair values[176](index=176&type=chunk)[177](index=177&type=chunk) - The audit of internal control over financial reporting did not include an evaluation of Signature Systems, which was acquired on **February 8, 2024**[348](index=348&type=chunk) [Consolidated Financial Statements](index=43&type=section&id=Consolidated%20Financial%20Statements) The consolidated financial statements show 2024 net income dropped to **$7.2 million**, total assets grew to **$860.8 million**, and **$348.3 million** was used for the Signature acquisition, funded by a **$400 million** term loan Consolidated Statements of Operations Highlights (in thousands) | Line Item | 2024 | 2023 | 2022 | | :--- | :--- | :--- | :--- | | Net sales | $836,281 | $813,067 | $899,547 | | Operating income | $44,480 | $72,405 | $83,941 | | Net income | $7,201 | $48,867 | $60,267 | | Diluted EPS | $0.19 | $1.32 | $1.64 | Consolidated Statements of Financial Position Highlights (in thousands) | Line Item | Dec 31, 2024 | Dec 31, 2023 | | :--- | :--- | :--- | | Total Current Assets | $259,307 | $256,621 | | Goodwill | $255,532 | $95,392 | | Total Assets | $860,815 | $541,631 | | Total Current Liabilities | $147,112 | $165,107 | | Long-term debt | $355,310 | $31,989 | | Total Liabilities | $583,303 | $248,831 | | Total Shareholders' Equity | $277,512 | $292,800 | Consolidated Statements of Cash Flows Highlights (in thousands) | Line Item | 2024 | 2023 | | :--- | :--- | | Net cash provided by operating activities | $79,292 | $86,172 | | Net cash used for investing activities | $(372,505) | $(22,757) | | Net cash provided by (used for) financing activities | $295,095 | $(56,516) | | Net increase in cash | $1,932 | $7,151 | [Notes to Consolidated Financial Statements](index=48&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) The notes detail accounting policies and financial results, including the **$348.3 million** Signature acquisition, a **$22.0 million** goodwill impairment, **$7.5 million** in restructuring costs, and a **$12.4 million** reserve for the New Idria Mine environmental matter - The company acquired Signature Systems on **February 8, 2024**, for a net purchase price of **$348.3 million**; the preliminary purchase price allocation included **$183.1 million** for goodwill and **$136.7 million** for intangible assets[233](index=233&type=chunk)[238](index=238&type=chunk)[240](index=240&type=chunk) - A non-cash goodwill impairment charge of **$22.0 million** was recorded in Q3 2024 for the rotational molding reporting unit due to declining market conditions and a reduced long-range outlook[246](index=246&type=chunk) - In 2024, the company incurred restructuring costs of approximately **$0.9 million** for the rotational molding facility consolidation and **$1.4 million** for the Distribution Segment restructuring[258](index=258&type=chunk)[259](index=259&type=chunk) - As of **Dec 31, 2024**, the company has a reserve of **$12.4 million** for the New Idria Mine environmental matter, primarily for investigation costs; the company has not accrued for ultimate remediation costs as they cannot be reasonably estimated[279](index=279&type=chunk)[282](index=282&type=chunk) - To fund the Signature acquisition, the company entered into a new **5-year**, **$400 million** term loan facility (Term Loan A) on **February 8, 2024**[287](index=287&type=chunk) [Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](index=85&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20with%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) The company reports no changes in or disagreements with its accountants regarding accounting principles, practices, or financial disclosure - None[336](index=336&type=chunk) [Controls and Procedures](index=85&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded that disclosure controls and internal control over financial reporting were effective as of **December 31, 2024**, excluding the Signature Systems acquisition from the internal control assessment - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of **December 31, 2024**[338](index=338&type=chunk) - Management concluded that the company maintained effective internal control over financial reporting as of **December 31, 2024**[343](index=343&type=chunk) - The assessment of internal control over financial reporting excluded the newly acquired Signature Systems, which represented approximately **9%** of consolidated total assets (excluding goodwill/intangibles) and **12%** of consolidated net sales for 2024[344](index=344&type=chunk) [Other Information](index=88&type=section&id=Item%209B.%20Other%20Information) No directors or executive officers adopted or terminated Rule 10b5-1 trading plans or other non-Rule 10b5-1 trading arrangements during Q4 2024 - During the three months ended **December 31, 2024**, no directors or executive officers adopted or terminated any Rule 10b5-1 trading plan or other non-Rule 10b5-1 trading arrangement[357](index=357&type=chunk) [Disclosure Regarding Foreign Jurisdictions that Prevent Inspections](index=88&type=section&id=Item%209C.%20Disclosure%20Regarding%20Foreign%20Jurisdictions%20that%20Prevent%20Inspections) This item is not applicable - None[357](index=357&type=chunk) Part III [Directors, Executive Officers and Corporate Governance](index=89&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) Information on directors, executive officers, and corporate governance, including Audit Committee financial experts and the Code of Ethics, is incorporated by reference from the 2025 Proxy Statement - Information regarding executive officers, directors, and corporate governance is incorporated by reference from the company's 2025 Proxy Statement[360](index=360&type=chunk)[361](index=361&type=chunk) - The Board has identified **William A. Foley**, **F. Jack Liebau, Jr.** and **Lori Lutey** as 'Audit Committee Financial Experts'[362](index=362&type=chunk) [Executive Compensation](index=89&type=section&id=Item%2011.%20Executive%20Compensation) All information concerning executive and director compensation is incorporated by reference from the company's 2025 Proxy Statement - All required information concerning executive compensation is incorporated by reference from the company's Proxy Statement for its 2025 annual meeting[366](index=366&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=90&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) Security ownership information is incorporated by reference from the 2025 Proxy Statement, with details on equity compensation plans as of **December 31, 2024**, showing nearly **1 million** issuable securities and over **2 million** available for future issuance - Information regarding security ownership of certain beneficial owners and management is incorporated by reference from the 2025 Proxy Statement[368](index=368&type=chunk) Equity Compensation Plan Information (as of Dec 31, 2024) | Plan Category | Securities to be Issued Upon Exercise | Weighted-Average Exercise Price | Securities Remaining for Future Issuance | | :--- | :--- | :--- | :--- | | Approved by Security Holders | 959,969 | $17.43 | 2,002,836 | | Not Approved by Security Holders | 0 | N/A | 0 | [Certain Relationships and Related Transactions, and Director Independence](index=90&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) Information on related party transactions and director independence is incorporated by reference from the company's 2025 Proxy Statement - Information regarding related party transactions and director independence is incorporated by reference from the 2025 Proxy Statement[370](index=370&type=chunk) [Principal Accounting Fees and Services](index=90&type=section&id=Item%2014.%20Principal%20Accounting%20Fees%20and%20Services) Information regarding principal accounting fees and services, including Audit Committee pre-approval policies, is incorporated by reference from the 2025 Proxy Statement - Information regarding principal accounting fees and services is incorporated by reference from the 2025 Proxy Statement[371](index=371&type=chunk) Part IV [Exhibits, Financial Statement Schedules](index=91&type=section&id=Item%2015.%20Exhibits%2C%20Financial%20Statement%20Schedules) This section lists the financial statements and exhibits filed with the Form 10-K, confirming inclusion of required statements and omission of schedules, and provides a detailed exhibit index - This section lists the consolidated financial statements of the Registrant that appear in Part II of the report[374](index=374&type=chunk) - A detailed Exhibit Index is provided, listing all documents filed with the report, including merger agreements, loan agreements, incentive plans, and various certifications[375](index=375&type=chunk)[376](index=376&type=chunk)

Myers Industries (MYE) Q4 2024 Earnings Call March 06, 2025 08:42 PM ET Company Participants Meghan Beringer - Senior Director of Investor RelationsAaron Schapper - President & CEOGrant Fitz - Executive VP & CFOChristian Zyla - Senior Associate Equity ResearchBill Dezellem - Founder, President & Chief Investment Officer Conference Call Participants Carolina Jolly - Senior Research Analyst Operator Hello, and welcome to the Myers '20 '20 '4 Fourth Quarter and Full Year Results. My name is Elliot, and I will ...

Financial Data and Key Metrics Changes - Fourth quarter net sales were $203.9 million, an increase of 6.7% year-over-year [30] - Adjusted gross margin increased by 210 basis points to 32.2% [32] - Adjusted EBITDA was up 26.2%, with an adjusted EBITDA margin of 13.5% compared to 11.4% last year [33] - Diluted adjusted earnings per share was $0.19 compared to $0.29 in 2023, primarily due to increased interest expense [33] Business Line Data and Key Metrics Changes - Material Handling segment net sales increased by 20.3%, driven by the Signature acquisition and strong Scepter sales [34] - Distribution segment net sales decreased by 20.2% due to lower volume and pricing [36] - Adjusted EBITDA for Material Handling increased by 22.3% to $34.7 million, with an adjusted EBITDA margin of 22.7% [35] Market Data and Key Metrics Changes - Consumer end market sales grew by 33%, driven by Scepter fuel cans [31] - Industrial end market sales grew by 13%, driven by military ammunition packaging [31] - E-commerce channel sales reached $36 million, growing 12% [39] Company Strategy and Development Direction - The company is launching a "Focused Transformation" program aimed at improving financial performance and accountability [16][18] - Plans include a $20 million annualized cost reduction primarily in SG&A by the end of 2025 [21][46] - A new $10 million share repurchase authorization was announced, reflecting confidence in the business [24] Management's Comments on Operating Environment and Future Outlook - Management is encouraged by the overall sales trajectory and confident in margin improvement for 2025 [27] - The company is temporarily suspending formal annual guidance to complete its action plan [26] - Management acknowledges challenges in certain business lines but sees potential for growth in others [14][61] Other Important Information - The company reduced total debt by $26 million since March 31, 2024 [40] - Cash on hand at the end of 2024 was $32.2 million, providing flexibility for capital allocation [41] - The company is focused on customer engagement and understanding market dynamics to drive performance [56] Q&A Session Summary Question: Overview of the overall portfolio and actions to take - Management is assessing strong performing businesses and understanding underperforming ones, focusing on portfolio optimization [54][56] Question: Organic sales deceleration in Material Handling - The decline is primarily attributed to Buckhorn's seed box sales and Distribution, with some signs of stabilization in other markets [60][62] Question: Impact of tariffs on material costs - The company has limited exposure to tariffs, with around 10% of material costs affected, and has taken steps to mitigate impacts [65] Question: Signature integration progress - Integration has been smooth, with cultural alignment and financial performance on track, exceeding expectations [74] Question: Distribution business challenges - Issues stem from both end market conditions and internal mistakes, with management committed to addressing these challenges [78][79] Question: Competitors' susceptibility to tariffs - The company believes it is in a good position compared to competitors due to its U.S.-based operations and material sourcing [85] Question: RV and marine market outlook - The RV industry is currently in a trough, but there are signs of potential recovery, with opportunities for new designs [88][91]

March 6, 2025 Q4 2024 Results Protecting the World from the Ground Up 1 Today's Speakers Aaron Schapper President and Chief Executive Officer Grant Fitz Executive Vice President and Chief Financial Officer Meghan Beringer Senior Director, Investor Relations 2 Safe Harbor Statement & Non-GAAP Measures Statements in this presentation contain "forward-looking statements" within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995, including information regardin ...