Myers Industries(MYE) - 2025 Q2 - Quarterly Results

Executive Summary Second Quarter 2025 Highlights Myers Industries reported Q2 2025 sales decline, improved free cash flow, and accelerated its transformation program - Growth in Industrial sales, particularly Scepter military products, was offset by soft demand in Vehicle and Automotive Aftermarket, leading to a year-over-year sales decline[1][4] - Significant free cash flow improvement year-over-year, generating $25 million during the quarter[1][4] - Launching a strategic review of the Myers Tire Supply business to simplify the portfolio and prioritize core businesses[2][5] - Idling two rotational molding production facilities to improve asset utilization and consolidating production capacity[2][5] - On track to achieve $20 million in cost savings by the end of 2025[2][5] Second Quarter 2025 Financial Performance Overall Financial Summary Myers Industries reported Q2 2025 net sales decreased 4.8% to $209.6 million, with broad declines in profitability metrics Key Financial Metrics (in thousands) | Metric | Q2 2025 (in thousands) | Q2 2024 (in thousands) | % Inc (Dec) | | :-------------------------- | :--------------------- | :--------------------- | :---------- | | Net sales | $209,583 | $220,236 | (4.8)% | | Gross profit | $70,662 | $75,517 | (6.4)% | | Gross margin | 33.7% | 34.3% | | | Operating income | $19,979 | $23,728 | (15.8)% | | Net income | $9,705 | $10,279 | (5.6)% | | Net income per diluted share | $0.26 | $0.28 | (7.1)% | | Adjusted operating income | $22,806 | $28,826 | (20.9)% | | Adjusted net income | $11,427 | $14,561 | (21.5)% | | Adjusted earnings per diluted share | $0.31 | $0.39 | (20.5)% | | Adjusted EBITDA | $32,875 | $38,893 | (15.5)% | - Net sales decreased due to lower demand in Vehicle and Automotive Aftermarket, partially offset by growth in the Industrial end market, particularly military products[11] - Gross profit and Operating income decreased due to lower pricing and volume, partially offset by lower material cost and SG&A[11] Segment Results Material Handling saw slight sales decrease but operating income growth; Distribution experienced declines across sales and profitability Material Handling Segment Material Handling Segment Performance (in millions) | Metric | Q2 2025 (in millions) | Q2 2024 (in millions) | $ Increase (decrease) vs prior year | % Increase (decrease) vs prior year | | :---------------- | :-------------------- | :-------------------- | :------------------------ | :------------------------ | | Net Sales | $158.6 | $166.0 | ($7.4) | (4.4)% | | Op Income | $29.5 | $28.7 | $0.8 | 2.7% | | Op Income Margin | 18.6% | 17.3% | | +130bps | | Adj EBITDA | $38.0 | $41.5 | ($3.5) | (8.5)% | | Adj EBITDA Margin | 23.9% | 25.0% | | -110bps | - Operating income increased as lower volume was more than offset by favorable material costs and lower SG&A, which included a $3.2 million reserve reversal for a fully collected long-term note[12] - Adjusted EBITDA decreased due to lower volume, partially offset by favorable material costs and SG&A[12] Distribution Segment Distribution Segment Performance (in millions) | Metric | Q2 2025 (in millions) | Q2 2024 (in millions) | $ Increase (decrease) vs prior year | % Increase (decrease) vs prior year | | :---------------- | :-------------------- | :-------------------- | :------------------------ | :------------------------ | | Net Sales | $51.0 | $54.3 | ($3.3) | (6.0)% | | Op Income | ($0.5) | $2.2 | ($2.7) | NM | | Op Income Margin | -1.1% | 4.0% | | -510bps | | Adj EBITDA | $2.4 | $3.8 | ($1.3) | (35.1)% | | Adj EBITDA Margin | 4.8% | 6.9% | | -210bps | - Operating income and Adjusted EBITDA decreased due to lower pricing, partially offset by favorable SG&A[8] Balance Sheet & Cash Flow Myers Industries reported $281.0 million liquidity, $24.7 million free cash flow, and reduced total debt by $13 million - Total liquidity of $281.0 million, including $239.7 million of availability under the revolving credit facility and cash on hand of $41.3 million[13] - Cash flow from operations was $28.3 million[13] - Free cash flow was $24.7 million, up $14.8 million versus prior year, due to improvements in working capital timing, particularly accounts receivable[13] - Total debt was reduced by $13 million with a net leverage ratio of 2.8x[13] - Repurchased $0.5 million shares in the second quarter; expect to make additional opportunistic repurchases with $8.5 million remaining under the 2025 Share Repurchase Program[13] Strategic Initiatives & Outlook Focused Transformation Program Myers Industries accelerates transformation with Myers Tire Supply review, production consolidation, and $20 million cost savings target Strategic Review of Myers Tire Supply Business The Board of Directors has approved launching a strategic review of the Myers Tire Supply business - The Board of Directors has approved launching a strategic review of the Myers Tire Supply business[5][10] - Revenue from Myers Tire Supply was $189 million over the last 12 months, ending June 30, 2025[10] - The review aims to simplify the portfolio, narrow strategic focus, and enable prioritization of core businesses to improve long-term earnings and shareholder value[5][11][14] Consolidating Rotational Molding Production Capacity Myers announced plans to idle two Rotational Molding production facilities located in Alliance, Ohio - Myers announced plans to idle two Rotational Molding production facilities located in Alliance, Ohio[15] - Production from these facilities will be consolidated into other Myers locations, aligning operations with end markets served[15] - These actions are expected to result in annualized savings of at least $3 million[15] Cost Savings Goal The Company is on track to achieve its commitment of $20 million in cost savings, primarily in SG&A, by year-end 2025 - The Company is on track to deliver on its commitment to achieve $20 million in cost savings, primarily in SG&A, by the end of 2025[5][16] - Through the first six months, the Company took action to realize $15 million in annualized savings[16] 2025 End Market Outlook The 2025 end market outlook remains consistent, with strong Infrastructure, moderate Industrial, and declines in Vehicle and Automotive Aftermarket 2025 End Market Outlook | End Markets (TTM Sales as of June 30, 2025) | 2025 Outlook | | :----------------