Myers Industries(MYE) - 2024 Q3 - Quarterly Report

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$20.7 million from the acquisition of Signature[118]. - The Distribution Segment's net sales decreased by $11.0 million or 16.8$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$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$204.9 million, an increase of $3.1 million or 1.5$47.7 million, an increase of $4.0 million or 9.1$152.8 million for the nine months ended September 30, 2024, up $4.7 million or 3.2$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$23.2 million for the nine months ended September 30, 2024, an increase of $18.2 million or 365.8$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$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].