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 ...

Financial Performance - Fourth quarter net sales increased by 6.7% to $203.9 million compared to $191.1 million in Q4 2023, driven by the acquisition of Signature Systems and consumer fuel can sales[7]. - Full year 2024 net sales reached $836.3 million, a 2.9% increase from $813.1 million in 2023, primarily due to contributions from Signature Systems[13]. - Net sales for Q4 2024 were $203.9 million, up from $191.1 million in Q4 2023, while full year sales increased to $836.3 million from $813.1 million[28]. - Net sales for the year ended December 31, 2024, reached $836,281, an increase from $813,067 in 2023, representing a growth of approximately 2.6%[34]. Profitability Metrics - Gross margin improved by 230 basis points to 32.3% in Q4 2024, up from 30.0% in Q4 2023, with gross profit increasing by 15.1% to $65.9 million[8]. - GAAP net income per diluted share decreased to $0.11 in Q4 2024 from $0.34 in Q4 2023, reflecting a decline of 67.6%[7]. - The company reported a net income of $4.3 million for Q4 2024, down from $12.5 million in Q4 2023, with diluted earnings per share of $0.11[28]. - Net income for Q4 2024 was $4,297, a decrease of 65.7% compared to $12,539 in Q4 2023[30]. - Net income margin for 2024 was 0.9%, a decrease from 6.0% in 2023, highlighting a significant decline in profitability[34]. - Adjusted earnings per diluted share for 2024 was $1.04, compared to $1.39 in 2023, showing a decrease of about 25.2%[36]. Cash Flow and Debt Management - For Q4 2024, cash flow from operations was $27.3 million and free cash flow was $20.2 million, representing increases of 77.9% and 71.2% respectively compared to Q4 2023[18]. - For the full year 2024, cash flow from operations was $79.3 million and free cash flow was $54.9 million, down from $86.2 million and $63.3 million in 2023[19]. - As of December 31, 2024, the Company had cash on hand of $32.2 million and total debt of $383.6 million, with a net leverage ratio of 2.7x[17]. - The Company reduced total debt by $26 million since March 31, 2024, following the acquisition of Signature Systems[17]. - The company reported a net cash provided by operating activities of $79,292 for 2024, compared to $86,172 in 2023, showing a decrease of approximately 8.5%[35]. Operational Efficiency - SG&A expenses for the full year 2024 increased to $204.1 million, up from $186.9 million in 2023, primarily due to the addition of Signature Systems[14]. - The company plans to implement a "Focused Transformation" program targeting $20 million in annualized cost savings by year-end 2025, primarily in SG&A[6]. - Operating income for Q4 2024 was $14,637, with an operating income margin of 7.2%[32]. - Operating income margin for 2024 was 5.3%, down from 8.9% in 2023, indicating a decrease in operational efficiency[34]. Capital Expenditures - Capital expenditures for Q4 2024 were $7.1 million, an increase from $3.6 million in Q4 2023, and total capital expenditures for 2024 were $24.4 million compared to $22.9 million in 2023[19]. - Capital expenditures in Q4 2024 totaled $7,133, compared to $3,563 in Q4 2023[30]. Future Outlook - The Company plans to temporarily suspend formal annual guidance while assessing its business and strategies, but remains optimistic about sales growth and margin improvement in 2025[20].

Company Overview - Myers Industries operates in the material handling products sector and distributes auto aftermarket tools and equipment [1] - The company consists of various independent subsidiaries and follows an active acquisition strategy [1] Investment Strategy - The focus is on companies that pay healthy dividends while waiting for capital appreciation [1] - The investment approach targets undervalued shares with high potential for capital appreciation driven by foreseeable catalysts [1] - The strategy emphasizes businesses that reward shareholders through both dividends and capital growth [1] Industry Focus - The analyst has a professional background in the HVAC industry, which influences their coverage of related stocks [1]

Financial Data and Key Metrics Changes - Net sales for Q3 2024 were $205.1 million, an increase of $7.3 million or 3.7% compared to Q3 2023, driven by the Signature acquisition and strong demand for Scepter products [20] - Adjusted gross profit was $66.3 million, up $3.7 million or 5.8% year-over-year, with adjusted gross margin increasing to 32.4% from 31.7% [21] - Operating income decreased to a loss of $4.8 million, compared to $18.7 million in Q3 2023, primarily due to a $22 million non-cash goodwill impairment charge [23] - Adjusted EBITDA rose to $30.7 million from $25.6 million in the prior year, with an adjusted EBITDA margin of 15% compared to 13% [25] Business Line Data and Key Metrics Changes - Material Handling Segment net sales increased to $18.2 million, a 13.8% rise year-over-year, with adjusted EBITDA increasing by 33% to $33.5 million [26][27] - Distribution Segment net sales decreased by $11 million or 16.8% to $54.4 million, with adjusted EBITDA down 51.8% to $3.2 million [28] Market Data and Key Metrics Changes - Demand headwinds were noted in recreational vehicles, marine, automotive aftermarket, and food and beverage markets, with customers delaying capital spending [9] - The military end market for Scepter is projected to exceed $25 million in sales for 2024, with expectations of reaching $40 million next year [51] Company Strategy and Development Direction - The company is focused on growing its power brands and optimizing costs in engineered products, with a strategic lens on its storage handling and protection portfolio [12][39] - New cost-cutting initiatives aim for $15 million in annualized savings, in addition to previous targets, to strengthen the cost position and mitigate revenue headwinds [10][30] Management's Comments on Operating Environment and Future Outlook - Management anticipates cautious customer spending behavior to continue into 2025, prompting a reduction in full-year guidance for adjusted earnings per diluted share to $0.92 to $1.02 [11][36] - The company remains committed to executing strategic priorities and driving growth, particularly in high-growth markets like military and infrastructure [38][40] Other Important Information - Free cash flow for Q3 2024 was $10.1 million, down from $18.1 million in Q3 2023, with capital expenditures of $7.2 million [32][33] - The company paid down $13 million in debt during the quarter, maintaining a focus on reducing leverage [11][34] Q&A Session Summary Question: Focus areas for the new CEO - The CEO is focused on growing power brands and optimizing costs in engineered products [43] Question: Surprises in power brand performance - Continued headwinds in RV, marine, and automotive aftermarket, with additional challenges in the food and beverage market [44][45] Question: EPS guidance and distribution margins - Expectation of mixed margins across segments, with potential for positive margins in distribution [49][50] Question: E-commerce strategy updates - Growth in e-commerce, particularly through Amazon, with new product lines being launched [55] Question: Distribution team capabilities - The new distribution team has industry relationships and is actively recruiting to fill gaps [59] Question: Cost-cutting measures impact on Q3 results - Most cost-cutting measures were implemented in Q3, with more impact expected in Q4 and 2025 [64][65] Question: Strategic rationale for the distribution business - Distribution is a key part of the company's heritage, with efforts focused on returning it to profitability [66]

TM mvers INDUSTRIES 2024 Third Quarter Results November 4, 2024 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 regarding the Company's financial outlook, future plans, objectives, business prospects and anticipated financial performance. Forward-looking statements can be identified by words such as "will," "believ ...

Financial Performance - Net sales for the quarter ended September 30, 2024, were $205.1 million, an increase of $7.3 million or 3.7% compared to the same quarter in 2023[117]. - The Material Handling Segment's net sales increased by $18.2 million or 13.8% for the quarter ended September 30, 2024, primarily due to $20.7 million from the acquisition of Signature[118]. - The Distribution Segment's net sales decreased by $11.0 million or 16.8% for the quarter ended September 30, 2024, mainly due to lower volume of $9.5 million and lower pricing of $1.5 million[119]. - For the nine months ended September 30, 2024, net sales were $632.4 million, an increase of $10.4 million or 1.7% compared to the same period in 2023[126]. - The Material Handling Segment's net sales for the nine months ended September 30, 2024, increased by $40.6 million or 9.5%, driven by $71.8 million from the acquisition of Signature[127]. - The Distribution Segment's net sales decreased by $30.2 million or 15.6% for the nine months ended September 30, 2024, primarily due to lower volume of $27.2 million[128]. Profitability - Gross profit for the quarter ended September 30, 2024, was $65.1 million, an increase of $2.8 million or 4.4% compared to the same period in 2023, with a gross margin of 31.8%[120]. - Gross profit for the nine months ended September 30, 2024, was $204.9 million, an increase of $3.1 million or 1.5% compared to the same period in 2023, with a gross margin of 32.4%[129]. Expenses - Selling, general and administrative (SG&A) expenses for the quarter ended September 30, 2024, were $47.7 million, an increase of $4.0 million or 9.1% compared to the prior year[121]. - Selling, general and administrative (SG&A) expenses increased to $152.8 million for the nine months ended September 30, 2024, up $4.7 million or 3.2% from the prior year, primarily due to $21.1 million of incremental SG&A from the acquisition of Signature[130]. Impairment and Interest - The company recorded a $22.0 million non-cash impairment charge for the full carrying value of goodwill in the rotational molding reporting unit during the quarter ended September 30, 2024[123]. - Net interest expense for the quarter ended September 30, 2024, was $8.1 million, an increase of $6.6 million or 425.7% compared to the same quarter in 2023[124]. - Net interest expense surged to $23.2 million for the nine months ended September 30, 2024, an increase of $18.2 million or 365.8% compared to $5.0 million in the same period in 2023, driven by higher borrowings related to the Signature acquisition[132]. Cash Flow and Investments - Net cash provided by operating activities decreased to $51.9 million for the nine months ended September 30, 2024, down from $70.8 million in the same period in 2023, primarily due to changes in working capital[136]. - Net cash used for investing activities was $365.5 million for the nine months ended September 30, 2024, significantly higher than $19.3 million in the same period in 2023, mainly due to the $348.3 million acquisition of Signature[137]. - Cash provided by financing activities was $313.0 million for the nine months ended September 30, 2024, compared to cash used of $49.8 million in the same period in 2023, reflecting proceeds from a new term loan facility[138]. Debt and Compliance - As of September 30, 2024, the company had $29.7 million in cash and $239.4 million available under the Amended Loan Agreement, with outstanding debt totaling $396.2 million[135]. - The company maintained compliance with all debt covenants, with an interest coverage ratio of 5.52 and a net leverage ratio of 2.72 as of September 30, 2024[147]. - The company incurred $9.2 million in fees related to the amendment and restatement of the Loan Agreement in February 2024, which facilitated the acquisition of Signature[141]. Interest Rate Sensitivity - The Company’s annual variable interest expense would change by approximately $2.0 million with a 1% change in market interest rates based on current debt levels as of September 30, 2024[150]. - The annual fixed rate interest expense on the fair value of the interest rate swap would change by approximately $6.8 million with a 1% change in market interest rates based on current debt levels as of September 30, 2024[151]. Currency and Material Costs - The net foreign currency exposure related to operations in Canada and the United Kingdom is generally less than $1 million[152]. - The Company currently has no derivative contracts to hedge changes in raw material pricing, particularly for plastic resins[153]. - Significant future increases in the cost of plastic resin could have a material adverse impact on the Company's financial position, results of operations, or cash flows[153].