Myers Industries(MYE) - 2022 Q3 - Quarterly Report

Part I — Financial Information This part presents the company's unaudited financial statements and management's analysis of financial condition and results of operations Item 1. Financial Statements This section presents the unaudited condensed consolidated financial statements for the periods ended September 30, 2022 and 2021 Condensed Consolidated Statements of Operations (Unaudited) This statement details the company's revenues, expenses, and net income for the reported periods Condensed Consolidated Statements of Operations (Unaudited) | Metric (in thousands) | Q3 2022 | Q3 2021 | 9M 2022 | 9M 2021 | | :-------------------- | :------ | :------ | :------ | :------ | | Net sales | $228,065 | $200,058 | $686,707 | $561,856 | | Cost of sales | $156,417 | $145,860 | $468,415 | $402,251 | | Gross profit | $71,648 | $54,198 | $218,292 | $159,605 | | Operating income | $19,897 | $11,817 | $66,919 | $38,551 | | Net income | $13,671 | $7,903 | $46,839 | $26,283 | | Basic EPS | $0.37 | $0.22 | $1.29 | $0.73 | | Diluted EPS | $0.37 | $0.22 | $1.28 | $0.72 | - Net sales increased by 14.0% for Q3 2022 compared to Q3 2021, and by 22.2% for the nine months ended September 30, 2022, driven by higher pricing and incremental sales from acquisitions[9][100][107] - Net income significantly increased by 73.0% for Q3 2022 and 77.9% for the nine months ended September 30, 2022, reflecting improved operating performance[9] Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) This statement reports net income and other comprehensive income items like foreign currency adjustments Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) | Metric (in thousands) | Q3 2022 | Q3 2021 | 9M 2022 | 9M 2021 | | :-------------------- | :------ | :------ | :------ | :------ | | Net income | $13,671 | $7,903 | $46,839 | $26,283 | | Foreign currency translation adjustment | $(2,376) | $(874) | $(2,985) | $7 | | Comprehensive income | $11,295 | $7,029 | $43,854 | $26,290 | - Foreign currency translation adjustments resulted in a loss of $2.4 million for Q3 2022 and $3.0 million for the nine months ended September 30, 2022, negatively impacting comprehensive income[12] Condensed Consolidated Statements of Financial Position (Unaudited) This statement presents a snapshot of the company's assets, liabilities, and shareholders' equity Condensed Consolidated Statements of Financial Position (Unaudited) | Metric (in thousands) | Sep 30, 2022 | Dec 31, 2021 | | :-------------------- | :----------- | :----------- | | Total Current Assets | $267,912 | $219,914 | | Total Assets | $549,724 | $484,549 | | Total Current Liabilities | $153,327 | $132,500 | | Total Liabilities | $304,747 | $275,224 | | Total Shareholders' Equity | $244,977 | $209,325 | - Total assets increased by $65.2 million (13.4%) from December 31, 2021, to September 30, 2022, primarily driven by increases in accounts receivable, inventories, and goodwill from acquisitions[15] - Shareholders' equity increased by $35.7 million (17.0%) over the same period, indicating improved financial health[15] Condensed Consolidated Statements of Shareholders' Equity (Unaudited) This statement details the changes in the company's equity accounts over the period Condensed Consolidated Statements of Shareholders' Equity (Unaudited) | Metric (in thousands) | Sep 30, 2022 | Dec 31, 2021 | | :-------------------- | :----------- | :----------- | | Common Shares | $22,321 | $22,172 | | Additional Paid-In Capital | $313,348 | $306,720 | | Accumulated Other Comprehensive Loss | $(18,386) | $(15,401) | | Retained Deficit | $(72,306) | $(104,166) | | Total Shareholders' Equity | $244,977 | $209,325 | - Retained deficit decreased significantly from $(104.2) million at January 1, 2022, to $(72.3) million at September 30, 2022, primarily due to net income of $46.8 million[19] - Accumulated other comprehensive loss increased by $2.985 million for the nine months ended September 30, 2022, mainly due to foreign currency translation adjustments[19][30] Condensed Consolidated Statements of Cash Flows (Unaudited) This statement outlines the sources and uses of cash from operating, investing, and financing activities Condensed Consolidated Statements of Cash Flows (Unaudited) | Metric (in thousands) | 9M 2022 | 9M 2021 | | :-------------------- | :------ | :------ | | Net cash provided by operating activities | $50,759 | $13,544 | | Net cash used for investing activities | $(40,343) | $(46,686) | | Net cash used for financing activities | $(7,355) | $19,705 | | Net increase (decrease) in cash | $2,769 | $(13,472) | | Cash at September 30 | $20,424 | $14,829 | - Operating cash flows significantly increased to $50.8 million for the nine months ended September 30, 2022, from $13.5 million in the prior year, driven by higher net income[21][117] - Investing activities primarily involved capital expenditures and business acquisitions (Mohawk in 2022, Trilogy in 2021), with net cash used decreasing from $46.7 million in 2021 to $40.3 million in 2022[21][118] - Financing activities shifted from providing $19.7 million in 2021 to using $7.4 million in 2022, mainly due to lower net borrowings from the revolving credit facility[21][119] Notes to Unaudited Condensed Consolidated Financial Statements These notes provide detailed explanations of the accounting policies and figures presented in the financial statements 1. Summary of Significant Accounting Policies This note outlines the key accounting principles and policies applied in preparing the financial statements - The financial statements are prepared in accordance with GAAP and SEC rules, with certain information condensed or omitted for interim reporting[24] - The Company adopted ASU 2021-08 for business combinations effective January 1, 2023, which impacts accounting for acquired contract assets and liabilities[26] - Fair value of debt under the Loan Agreement approximates carrying value due to floating rates and short maturity of revolving borrowings; fixed rate senior unsecured notes had an aggregate fair value of $37.3 million at September 30, 2022[28] Changes in Accumulated Other Comprehensive Income (Loss) (in thousands): | Item | Balance at July 1, 2022 | Other Comprehensive Income (Loss) before Reclassifications | Net Current-Period Other Comprehensive Income (Loss) | Balance at September 30, 2022 | | :-------------------------------- | :---------------------- | :------------------------------------------------------- | :------------------------------------------- | :---------------------------- | | Foreign Currency Translation | $(14,544) | $(2,376) | $(2,376) | $(16,920) | | Defined Benefit Pension Plans | $(1,466) | — | — | $(1,466) | | Total | $(16,010) | $(2,376) | $(2,376) | $(18,386) | 2. Revenue Recognition This note details how revenue is recognized and provides a breakdown of net sales by market Net Sales by Major Market (in thousands): | Market | Q3 2022 (Material Handling) | Q3 2022 (Distribution) | Q3 2022 (Consolidated) | 9M 2022 (Material Handling) | 9M 2022 (Distribution) | 9M 2022 (Consolidated) | | :---------------- | :-------------------------- | :--------------------- | :--------------------- | :-------------------------- | :--------------------- | :--------------------- | | Consumer | $24,476 | — | $24,476 | $90,989 | — | $90,989 | | Vehicle | $38,158 | — | $38,158 | $134,036 | — | $134,036 | | Food and beverage | $31,126 | — | $31,126 | $88,960 | — | $88,960 | | Industrial | $61,898 | — | $61,889 | $191,399 | — | $191,370 | | Auto aftermarket | — | $72,416 | $72,416 | — | $181,352 | $181,352 | | Total Net Sales | $155,658 | $72,416 | $228,065 | $505,384 | $181,352 | $686,707 | - Revenue is recognized when control of products transfers to customers, typically within 90 days of a purchase order, with no significant long-term contracts[34] - Variable consideration like rebates and discounts are estimated and recognized each period, and allowances for returns are based on historical experience[35] 3. Acquisitions This note describes the recent business acquisitions of Mohawk Rubber Sales and Trilogy Plastics - On May 31, 2022, the Company acquired Mohawk Rubber Sales of New England Inc. for $24.3 million cash, net of cash acquired, to optimize its Distribution Segment[38] Mohawk Acquisition - Preliminary Purchase Price Allocation (in thousands): | Assets Acquired / Liabilities Assumed | Amount | | :------------------------------------ | :----- | | Accounts receivable | $10,347 | | Inventories | $8,209 | | Property, plant and equipment | $1,171 | | Intangible assets | $7,810 | | Goodwill | $7,359 | | Total Assets Acquired | $36,397 | | Total Liabilities Assumed | $8,809 | | Net Acquisition Cost | $27,588 | - On July 30, 2021, the Company acquired Trilogy Plastics, Inc. for $34.5 million to enhance its Materials Handling Segment with value-added engineered plastic solutions[43] 4. Restructuring This note details the ongoing Ameri-Kart manufacturing consolidation plan and associated costs - The Ameri-Kart Plan, initiated in March 2019, involves consolidating manufacturing operations into a new facility in Bristol, Indiana, with substantial completion expected in 2022[48][49] - Restructuring charges incurred were $0.3 million for Q3 2022 and $0.7 million for the nine months ended September 30, 2022, primarily for equipment relocation and facility shutdown costs[49] 5. Inventories This note provides a breakdown of inventory components and explains the valuation methods used - Inventories are valued at the lower of cost or market (LIFO for 40%, FIFO for others)[50] Inventories (in thousands): | Category | Sep 30, 2022 | Dec 31, 2021 | | :------------------------ | :----------- | :----------- | | Finished and in-process products | $65,576 | $56,684 | | Raw materials and supplies | $42,582 | $36,867 | | Total Inventories | $108,158 | $93,551 | - An adjustment of $1.1 million was made to increase the LIFO reserve and cost of sales for Q3 and 9M 2022 due to increased commodity and other costs[50] 6. Other Liabilities This note presents a detailed breakdown of other current and long-term liabilities Other Current Liabilities (in thousands): | Category | Sep 30, 2022 | Dec 31, 2021 | | :-------------------------------- | :----------- | :----------- | | Customer deposits and accrued rebates | $6,541 | $5,194 | | Dividends payable | $5,549 | $5,441 | | Current portion of environmental reserves | $1,429 | $1,429 | | Total Other Current Liabilities | $20,463 | $19,628 | Other Long-Term Liabilities (in thousands): | Category | Sep 30, 2022 | Dec 31, 2021 | | :------------------------ | :----------- | :----------- | | Environmental reserves | $10,614 | $8,298 | | Supplemental executive retirement plan liability | $958 | $1,176 | | Pension liability | $276 | $421 | | Total Other Liabilities | $13,691 | $13,086 | 7. Goodwill and Intangible Assets This note details the changes in goodwill by segment and describes the company's intangible assets Goodwill by Segment (in thousands): | Segment | Jan 1, 2022 | Acquisition | Foreign Currency Translation | Sep 30, 2022 | | :-------------- | :---------- | :---------- | :--------------------------- | :----------- | | Distribution | $7,648 | $7,359 | — | $15,007 | | Material Handling | $81,130 | — | $(854) | $80,276 | | Total | $88,778 | $7,359 | $(854) | $95,283 | - Goodwill increased by $7.359 million due to the Mohawk acquisition in the Distribution Segment, partially offset by a foreign currency translation loss of $0.854 million in Material Handling[53] - Intangible assets primarily include trade names, customer relationships, patents, and non-competition agreements, with indefinite-lived trade names valued at $9.8 million[53] 8. Net Income per Common Share This note provides the calculation of basic and diluted earnings per share Weighted Average Common Shares Outstanding: | Metric | Q3 2022 | Q3 2021 | 9M 2022 | 9M 2021 | | :-------------------------------- | :---------- | :---------- | :---------- | :---------- | | Basic | 36,472,378 | 36,195,560 | 36,383,398 | 36,103,894 | | Dilutive effect of stock options and restricted stock | 244,775 | 206,716 | 295,557 | 224,871 | | Diluted | 36,717,153 | 36,402,276 | 36,678,955 | 36,328,765 | - Options to purchase 114,540 shares in Q3 and 9M 2022, and 42,945 shares in Q3 2021, were anti-dilutive and excluded from diluted EPS calculation[54] 9. Stock Compensation This note describes the company's stock-based compensation plans and related expenses - The 2021 Long-Term Incentive Plan authorizes the issuance of up to 2,000,000 stock awards to key employees and directors[55] Stock Compensation Expense (in thousands): | Period | Q3 2022 | Q3 2021 | 9M 2022 | 9M 2021 | | :----- | :------ | :------ | :------ | :------ | | Expense | $1,300 | $800 | $5,200 | $2,600 | - Total unrecognized compensation cost related to non-vested stock-based awards was approximately $9.3 million at September 30, 2022, to be recognized over the next three years[56] 10. Contingencies This note discusses significant legal proceedings and environmental contingencies, including the New Idria Mine - The Company is involved in various lawsuits and legal proceedings, with management believing the ultimate outcome will not have a material adverse effect on financial position or cash flows[57][58] - Regarding the New Idria Mercury Mine, Buckhorn (a subsidiary) is a potentially responsible party; an Administrative Order of Consent (AOC) for Remedial Investigation/Feasibility Study (RI/FS) was finalized in 2018, requiring $2 million financial assurance[59][60] - Buckhorn has recognized $13.9 million in costs for the New Idria Mine since October 2011, with $1.5 million and $2.8 million recorded for Q3 and 9M 2022, respectively, primarily for updated RI/FS estimates; a total reserve of $10.5 million is held[62] - A patent infringement lawsuit against Scepter Manufacturing LLC is ongoing, with trial scheduled for March 2023; an unfavorable outcome is not considered probable, and potential losses are not reasonably estimable[67][68][69] 11. Long-Term Debt and Loan Agreements This note details the company's long-term debt structure and key terms of its loan agreements Long-Term Debt (in thousands): | Debt Type | Sep 30, 2022 | Dec 31, 2021 | | :------------------------------------ | :----------- | :----------- | | Loan Agreement | $60,000 | $53,000 | | 5.25% Senior Unsecured Notes due Jan 2024 | $11,000 | $11,000 | | 5.30% Senior Unsecured Notes due Jan 2024 | $15,000 | $15,000 | | 5.45% Senior Unsecured Notes due Jan 2026 | $12,000 | $12,000 | | Total Long-Term Debt | $97,961 | $90,945 | - The Seventh Amended and Restated Loan Agreement, effective September 29, 2022, extended the maturity date to September 2027, maintaining a $250 million borrowing limit[70][71] - At September 30, 2022, $184.3 million was available under the Loan Agreement, with existing borrowings primarily LIBOR-based and new borrowings transitioning to Term SOFR, RFR, EURIBOR, and CDOR-based rates[72] - The weighted average interest rate on long-term debt increased to 5.50% for Q3 2022 from 4.24% for Q3 2021, and decreased to 4.55% for 9M 2022 from 4.84% for 9M 2021[74] 12. Income Taxes This note explains the components of the company's income tax expense and effective tax rate Effective Tax Rate: | Period | Q3 2022 | Q3 2021 | 9M 2022 | 9M 2021 | | :----- | :------ | :------ | :------ | :------ | | Rate | 24.8% | 26.6% | 25.5% | 26.0% | - The decrease in the effective tax rate for both periods was primarily due to lower state taxes and estimated non-deductible expenses[77][106][115] - Gross unrecognized tax benefits that would reduce the effective tax rate totaled $0.8 million at September 30, 2022[78] 13. Leases This note provides details on the company's operating and finance lease assets, liabilities, and costs - The Company leases manufacturing facilities, distribution centers, warehouses, office space, and equipment with terms ranging from one to fourteen years[80] Lease Assets and Liabilities (in thousands): | Category | Sep 30, 2022 | Dec 31, 2021 | | :-------------------------- | :----------- | :----------- | | Operating lease assets | $29,809 | $29,285 | | Finance lease assets | $9,248 | $9,765 | | Total lease assets | $39,057 | $39,050 | | Total operating lease liabilities | $29,821 | $29,156 | | Total finance lease liabilities | $9,563 | $9,937 | | Total lease liabilities | $39,384 | $39,093 | Total Lease Cost (in thousands): | Period | Q3 2022 | Q3 2021 | 9M 2022 | 9M 2021 | | :----- | :------ | :------ | :------ | :------ | | Total Lease Cost | $2,500 | $2,254 | $7,026 | $5,944 | - Weighted-average remaining lease terms are 6.62 years for operating leases and 13.42 years for finance leases at September 30, 2022[83] 14. Segments This note presents financial information for the company's two operating segments: Material Handling and Distribution - The Company operates under two segments: Material Handling (durable plastic reusable containers, OEM parts, custom plastic products) and Distribution (tire servicing equipment, tools, supplies, tire repair products, traffic markings)[86][87] Net Sales by Segment (in thousands): | Segment | Q3 2022 | Q3 2021 | 9M 2022 | 9M 2021 | | :---------------- | :------ | :------ | :------ | :------ | | Material Handling | $155,658 | $149,664 | $505,384 | $416,784 | | Distribution | $72,416 | $50,413 | $181,352 | $145,119 | | Total Net Sales | $228,065 | $200,058 | $686,707 | $561,856 | Operating Income by Segment (in thousands): | Segment | Q3 2022 | Q3 2021 | 9M 2022 | 9M 2021 | | :---------------- | :------ | :------ | :------ | :------ | | Material Handling | $23,962 | $15,066 | $83,216 | $49,895 | | Distribution | $4,899 | $4,377 | $12,469 | $10,029 | | Corporate | $(8,964) | $(7,626) | $(28,766) | $(21,373) | | Total Operating Income | $19,897 | $11,817 | $66,919 | $38,551 | - Material Handling net sales increased 4.0% in Q3 2022 and 21.3% in 9M 2022, driven by pricing and the Trilogy acquisition, despite lower volume/mix[101][108] - Distribution net sales increased 43.6% in Q3 2022 and 25.0% in 9M 2022, primarily due to the Mohawk acquisition and higher pricing[102][109] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations This section provides an overview of the Company's financial performance, condition, and liquidity for the quarter and nine months ended September 30, 2022 Forward-Looking Statements This section cautions readers about the risks and uncertainties associated with forward-looking statements - The report contains forward-looking statements regarding financial outlook, future plans, and performance, which are subject to inherent uncertainties, risks, and changes in circumstances[94] - Specific risk factors include impacts from COVID-19, raw material availability and costs, strategic growth initiatives, competitive pressures, operational problems, and changes in laws and regulations[95] Executive Overview This section provides a high-level overview of the company's business segments and the current economic environment - Myers Industries operates in two segments: Material Handling (plastic reusable containers, OEM parts) and Distribution (tire servicing equipment, tire repair products)[96][97] - The current economic environment presents risks from inflation, interest rates, volatile commodity costs, supply chain disruptions, and labor availability, exacerbated by geopolitical events[98] - The Company believes it is well-positioned to manage these uncertainties due to a strong balance sheet, sufficient liquidity, and a diverse product offering and customer base[98] Results of Operations: Comparison of the Quarter Ended September 30, 2022 to the Quarter Ended September 30, 2021 This section analyzes the year-over-year changes in financial results for the third quarter Net Sales (Q3 YoY Change, in thousands): | Segment | 2022 | 2021 | Change | % Change | | :---------------- | :------ | :------ | :------ | :------- | | Material Handling | $155,658 | $149,664 | $5,994 | 4.0% | | Distribution | $72,416 | $50,413 | $22,003 | 43.6% | | Total Net Sales | $228,065 | $200,058 | $28,007 | 14.0% | - Total net sales increased by $28.0 million (14.0%) due to $21.1 million from higher pricing and $19.4 million from acquisitions (Mohawk and Trilogy), partially offset by $12.1 million lower volume/mix[100] Gross Profit (Q3 YoY Change, in thousands): | Metric | 2022 | 2021 | Change | % Change | | :-------------------------- | :------ | :------ | :------ | :------- | | Cost of sales | $156,417 | $145,860 | $10,557 | 7.2% | | Gross profit | $71,648 | $54,198 | $17,450 | 32.2% | | Gross profit as a percentage of sales | 31.4% | 27.1% | | | - SG&A expenses increased by $9.2 million (21.7%) to $51.8 million, driven by higher salaries, benefits, incentive compensation, variable selling expenses, facility costs, and environmental charges, as well as incremental costs from acquisitions[104] - Net interest expense increased by $0.7 million (62.8%) to $1.7 million due to higher average outstanding borrowings and a higher weighted-average borrowing rate (5.50% vs 4.24%)[105] Comparison of the Nine Months Ended September 30, 2022 to the Nine Months Ended September 30, 2021 This section analyzes the year-over-year changes in financial results for the first nine months Net Sales (9M YoY Change, in thousands): | Segment | 2022 | 2021 | Change | % Change | | :---------------- | :------ | :------ | :------ | :------- | | Material Handling | $505,384 | $416,784 | $88,600 | 21.3% | | Distribution | $181,352 | $145,119 | $36,233 | 25.0% | | Total Net Sales | $686,707 | $561,856 | $124,851 | 22.2% | - Total net sales increased by $124.9 million (22.2%) due to $86.7 million from higher pricing and $46.6 million from acquisitions (Mohawk and Trilogy), partially offset by $7.6 million lower volume/mix[107] Gross Profit (9M YoY Change, in thousands): | Metric | 2022 | 2021 | Change | % Change | | :-------------------------- | :------ | :------ | :------ | :------- | | Cost of sales | $468,415 | $402,251 | $66,164 | 16.4% | | Gross profit | $218,292 | $159,605 | $58,687 | 36.8% | | Gross profit as a percentage of sales | 31.8% | 28.4% | | | - SG&A expenses increased by $29.9 million (24.4%) to $152.1 million, primarily due to higher compensation, variable selling expenses, facility costs, environmental charges, and acquisition-related expenses[111] - Net interest expense increased by $1.0 million (33.7%) to $4.1 million, driven by higher average outstanding borrowings ($113.8 million vs $79.9 million), partially offset by a slightly lower weighted-average borrowing rate (4.55% vs 4.84%)[113] Liquidity and Capital Resources This section assesses the company's liquidity, cash flows, and capital resources - At September 30, 2022, the Company had $20.4 million cash, $184.3 million available under the Loan Agreement, and $107.5 million outstanding debt, indicating strong liquidity[116] - Net cash provided by operating activities increased to $50.8 million for 9M 2022 (vs. $13.5 million in 9M 2021) due to higher net income, partially offset by increased working capital[117] - Net cash used in investing activities decreased to $40.3 million for 9M 2022 (vs. $46.7 million in 9M 2021), including $24.3 million for the Mohawk acquisition and $17.6 million in capital expenditures[118] - Net cash used in financing activities was $7.4 million for 9M 2022 (vs. $19.7 million provided in 9M 2021), reflecting lower net borrowings from the credit facility and dividend payments of $14.9 million[119] Credit Sources This section describes the company's primary sources of credit and compliance with debt covenants - The Seventh Amendment to the Loan Agreement extended the maturity to September 2027, maintaining a $250 million borrowing limit[121] - As of September 30, 2022, $184.3 million was available under the Loan Agreement, with $38.0 million face value of Senior Unsecured Notes outstanding, maturing between January 2024 and January 2026[123][124] Debt Covenants as of September 30, 2022: | Covenant | Required Level | Actual Level | | :-------------------- | :------------- | :----------- | | Interest Coverage Ratio | 3.00 to 1 (minimum) | 21.31 | | Leverage Ratio | 3.25 to 1 (maximum) | 1.01 | - The Company was in compliance with all debt covenants as of September 30, 2022[125] Item 3. Quantitative and Qualitative Disclosures About Market Risk This section outlines the Company's exposure to market risks, specifically interest rate, foreign currency, and commodity price risk Interest Rate Risk This section discusses the company's exposure to fluctuations in interest rates - The Company is exposed to interest rate risk due to floating rate financing arrangements, primarily based on LIBOR, transitioning to Term SOFR, RFR, EURIBOR, and CDOR[126] - A one percent increase in market interest rates would increase annual variable interest expense by approximately $0.6 million, based on current debt levels[126] Foreign Currency Exchange Risk This section details the company's exposure to foreign currency exchange rate fluctuations - Operations in Canada expose the Company to foreign currency risk, mainly from U.S. dollar sales from Canadian businesses[127] - A systematic program is in place to limit exposure to exchange rate fluctuations, with net exposure generally ranging from $1 million to $3 million[127] - At September 30, 2022, the Company had no foreign currency arrangements or contracts in place[127] Commodity Price Risk This section outlines the company's exposure to volatility in commodity prices - The Company's operations are affected by changes in commodity prices, particularly plastic resins and natural gas[128] - No derivative contracts are currently used to hedge raw material pricing, though forward buy positions for utility costs may be used[128] - Significant future increases in plastic resin costs or adverse economic changes could materially impact financial results[129] Item 4. Controls and Procedures This section details the Company's disclosure controls and procedures, confirming their effectiveness as of September 30, 2022 Evaluation of Disclosure Controls and Procedures This section confirms the effectiveness of the company's disclosure controls and procedures - The Company maintains disclosure controls and procedures designed to ensure timely and accurate reporting of information required by the Securities Exchange Act of 1934[130] - The CEO and Interim CFO concluded that the Company's disclosure controls and procedures were effective as of September 30, 2022[131] Changes in Internal Control Over Financial Reporting This section reports on any changes to the company's internal control over financial reporting - The evaluation of internal control over financial reporting as of September 30, 2022, did not include the recently acquired Mohawk business, as permitted by SEC rules[132] - No material changes in internal control over financial reporting occurred during the nine months ended September 30, 2022[133] Part II — Other Information This part includes details on legal proceedings, equity security sales, filed exhibits, and report signatures Item 1. Legal Proceedings This section refers to the detailed discussion of legal proceedings in Note 10 of the financial statements - Legal proceedings are discussed in Note 10, Contingencies, of the Unaudited Condensed Consolidated Financial Statements[134] - Management believes 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[134] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds This section provides information on the Company's stock repurchase plan, indicating no shares were repurchased during the third quarter of 2022 Stock Repurchase Plan Activity (Q3 2022): | Period | Total Number of Shares Purchased | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | Maximum Number of Shares that may yet be Purchased Under the Plans or Programs | | :-------------------- | :------------------------------- | :--------------------------- | :----------------------------------------------------------------- | :----------------------------------------------------------------------------- | | 7/1/2022 to 7/31/2022 | — | $— | 5,547,665 | 2,452,335 | | 8/1/2022 to 8/31/2022 | — | — | 5,547,665 | 2,452,335 | | 9/1/2022 to 9/30/2022 | — | — | 5,547,665 | 2,452,335 | - No shares were repurchased under the Company's stock repurchase plan during the quarter ended September 30, 2022[135] - As of September 30, 2022, 2,452,335 shares remained authorized for repurchase under the plan[135] Item 6. Exhibits This section lists all exhibits filed with the Form 10-Q, including corporate governance documents, loan agreements, and certifications - Exhibits include the Second Amended and Restated Articles of Incorporation, Amended and Restated Code of Regulations, Seventh Amended and Restated Loan Agreement, and Fourth Amendment to Note Purchase Agreement[137] - Certifications from the President and CEO, and Interim CFO, pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act of 2002, are included[137] - Financial information formatted in inline XBRL, including consolidated statements and notes, is provided as Exhibit 101 and 104[137] Signature This section contains the signature of the Company's Interim Chief Financial Officer, certifying the filing of the report - The report was signed on October 27, 2022, by Monica P. Vinay, Interim Chief Financial Officer (Principal Financial and Accounting Officer) of Myers Industries, Inc[139][140]