MYERS INDUSTRIES INC
For the period ended Dec 31, 2024. Filed Mar 6, 2025.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2024 · Filed Mar 6, 2025
MYE$26.95+0.6%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2023-12-31; filed 2024-03-05.
0000950170-24-025847
ITEM 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2024-12-31; filed 2025-03-06.
0000950170-25-034598
ITEM 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 57 previous paragraphs and 54 current paragraphs.
26 unchanged; 19 reworded; 8 added; 11 removed; 1 previous and 1 current paragraphs rearranged.
Tables are not compared: 6 previous and 6 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (8)
Current report
Net sales in the Distribution Segment decreased $43.1 million or 16.7% in the year ended December 31, 2024 compared to the prior year, primarily due to lower volume of $38.1 million and lower pricing of $5.0 million.
Current report
Net Sales above, the impact from acquisition-related inventory step-up amortization of $4.5 million, higher costs of restructuring and unfavorable cost productivity. Gross margin was 32.4% for the year ended December 31, 2024 compared to 31.9% for the same period in 2023.
Current report
Impairment Charges:
Current report
During the year ended December 31, 2024, the Company recorded a $22.0 million non-cash impairment charge, for the full carrying value of goodwill in the rotational molding reporting unit, included in the Material Handling Segment, as discussed in Note 4 to the consolidated financial statements.
Current report
The Company's effective tax rate was 46.8% for the year ended December 31, 2024 compared to 26.0% in the prior year. The increase in the effective tax rate is driven by fixed non-deductible expenses, including expenses related to the Signature acquisition, on lower income before income taxes plus the tax effect of impairment charges.
Current report
Credit Sources
Current report
Seventh Amendment to Loan Agreement
Current report
On May 2, 2024, the Company entered into an interest rate swap agreement to mitigate the variable interest rate risk of borrowings under the Amended Loan Agreement. The swap has a beginning notional value of $200.0 million, which reduces proportionately with scheduled Term Loan A amortization payments, and has a final maturity date of January 31, 2029. At December 31, 2024, the remaining notional value of the Company's interest rate swap totaled $192.5 million. The swap is designated as a cash flow hedge and effectively results in a fixed rate of 4.606% plus the applicable margin for the hedged debt, as described in Notes 1 and 10 to the consolidated financial statements.
Removed paragraphs (11)
Previous report
Net sales for the year ended December 31, 2023 were $813.1 million, a decrease of $86.5 million or 9.6% compared to the prior year. Net sales decreased due to lower overall volume/mix of $99.9 million, following high volume of certain products focused on outdoor activities, which were especially strong due to a surge in COVID-19 induced consumer discretionary spending in the prior period. Net sales also decreased due to lower pricing of $8.2 million and the effect of unfavorable currency translation of $1.5 million. The decrease in net sales was partially offset by $23.1 million of incremental sales from the acquisition of Mohawk on May 31, 2022, included in the Distribution Segment. Mohawk's annual sales were approximately $65 million at the time of the acquisition. The Company continues to pursue further pricing initiatives, and beginning in February 2023, the Company began to implement a series of additional pricing increases across a majority of its portfolio of products within its Distribution segment.
Previous report
The effective tax rate was 26.0% for the year ended December 31, 2023 compared to 22.9% in the prior year. The increase in the effective tax rate was primarily the result of the recognition of a previously unrecognized tax benefit in the prior year.
Previous report
Acquisition of Signature Systems - Subsequent Event
Previous report
On February 8, 2024, the Company acquired Signature Systems as described in Note 15 to the consolidated financial statements for $350 million plus customary working capital and other adjustments in an all-cash transaction, funded through an amendment and restatement of Myers’ existing loan agreement discussed below. Signature Systems is a manufacturer and distributor of composite matting ground protection for industrial applications, stadium turf protection and temporary event flooring. In 2023, Signature System’s revenue was approximately $110 million. Signature will be included in the Material Handling segment.
Previous report
In January 2024, the Company repaid $26.0 million of Senior Unsecured Notes upon maturity using cash on hand and availability under the Loan Agreement. On February 8, 2024, as described below and in Note 15 to the consolidated financial statements, the Company acquired Signature Systems for $350 million plus customary working capital and other adjustments. The Signature Systems acquisition was financed by amending and restating the Loan Agreement to include a 5-year $400 million term loan facility ("Term Loan A"). In connection with the amendment to the Loan Agreement, the Company prepaid the remaining $12.0 million face value of Senior Unsecured Notes, which were due January 15, 2026, using availability under the revolving credit facility. The $250 million borrowing limit under senior revolving credit facility of the Loan Agreement was unchanged. The amendment and restatement of the Loan Agreement is described further below.
Previous report
Credit Sources - as of December 31, 2023
Previous report
In March 2021, the Company entered into the Sixth Amendment, which amended the Fifth Amended and Restated Loan Agreement (collectively with the Sixth and Seventh Amendments, the “Loan Agreement”) dated March 2017. The Sixth Amendment increased the senior revolving credit facility’s borrowing limit to $250 million from $200 million, extended the maturity date to March 2024 from March 2022, and increased flexibility of the financial and other covenants and provisions.
Previous report
At December 31, 2023, $38 million face value of Senior Unsecured Notes were outstanding. The series of notes range in face value from $11.0 million to $15.0 million, with interest rates ranging from 5.25% to 5.45%, payable semiannually. The $11.0 million note and $15.0 million note of these Senior Unsecured Notes matured and on January 12, 2024 the Company repaid these notes using cash on hand and borrowings under the Loan Agreement. The remaining $12.0 million of the Senior Unsecured Notes mature on January 15, 2026.
Previous report
Credit Sources - subsequent events
Previous report
As described in Note 4 to the consolidated financial statements included in Item 8 of this Annual Report on Form 10-K, our most recent annual impairment testing as of October 1, 2023 consisted of a qualitative assessment for five of our six reporting units, with the exception being the Rotational Molding reporting unit for which a quantitative assessment was performed. None of the analyses indicated impairment. With respect to the quantitative analysis of the Rotational Molding reporting unit, the most sensitive assumptions were the long-term growth rate and the weighted average cost of capital used to discount its projected cash flows. Reasonable changes in these assumptions would not indicate impairment. We assessed a 100-basis point decrease in the assumed long-term growth rate and a
Previous report
100-basis point increase in the weighted average cost of capital for the Company’s Rotational Molding reporting unit, and neither indicated impairment.
Reworded paragraphs (19)
Previous wording
The Company conducts its business activities in two distinct segments: The Material Handling Segment and the Distribution Segment.
Current wording
The Company conducts its business activities in two reportable segments: The Material Handling Segment and the Distribution Segment.
Previous wording
The Company designs, manufactures, and markets a variety of plastic, metal and rubber products. The Material Handling Segment manufactures a broad selection of plastic reusable containers, pallets, small parts bins, bulk shipping containers, storage and organization products, OEM parts, custom plastic products, consumer fuel containers and tanks for water, fuel and waste handling. Products in the Material Handling Segment are primarily injection molded, rotationally molded or blow molded. The Distribution Segment is engaged in the distribution of tools, equipment and supplies used for tire, wheel and under vehicle service on passenger, heavy truck and off-road vehicles, as well as the manufacturing of tire repair and retreading products.
Current wording
The Company designs, manufactures, and markets a variety of plastic, metal and rubber products. The Material Handling Segment manufactures a broad selection of plastic reusable containers, pallets, small parts bins, bulk shipping containers, storage and organization products, OEM parts, custom plastic products, composite ground protection matting, consumer fuel containers and tanks for water, fuel and waste handling. Products in the Material Handling Segment are primarily injection molded, rotationally molded, compression molded or blow molded. The Distribution Segment is engaged in the distribution of tools, equipment and supplies used for tire, wheel and under vehicle service on passenger, heavy truck and off-road vehicles, as well as the manufacturing of tire repair and retreading products.
Previous wording
The Company’s results of operations for the year ended December 31, 2023 compared with the year ended December 31, 2022 are discussed below. The current economic environment includes heightened risks from inflation, interest rates, volatile commodity costs, supply chain disruptions and labor availability stemming from the broader economic effects of the international geopolitical climate, including the conflict between Russia and Ukraine, the Israel-Hamas war and the COVID-19 pandemic, which have also increased volatility in global commodity markets, including oil (a component of many plastic resins), energy and agricultural commodities. Some of our businesses have been and may continue to be affected by these broader economic effects, including customer demand for our products, supply chain disruptions, labor availability and inflation. The Company believes it is well-positioned to manage through this uncertainty as it has a strong balance sheet with sufficient liquidity and borrowing capacity as well as a diverse product offering and customer base.
Current wording
The Company’s results of operations for the year ended December 31, 2024 compared with the year ended December 31, 2023 are discussed below. The current economic environment includes heightened risks from inflation, interest rates, banking liquidity, volatile commodity costs, supply chain disruptions and labor availability stemming from the broader economic effects of the international geopolitical climate, including rapidly changing regulations, the ongoing war in Ukraine, and continued conflicts along Israel's border which has increased volatility in global commodity markets, including oil (a component of many plastic resins), energy and agricultural commodities. Some of our businesses have been and may continue to be affected by these broader economic effects, including customer demand for our products, supply chain disruptions, labor availability and inflation. The Company believes it is well-positioned to manage through this uncertainty as it has a strong balance sheet with sufficient liquidity and borrowing capacity as well as a diverse product offering and customer base.
Previous wording
Net sales in the Distribution Segment increased $5.9 million or 2.3% in the year ended December 31, 2023 compared to the prior year, primarily due to higher pricing of $8.2 million and $23.1 million of incremental sales from the acquisition of Mohawk on May 31, 2022. The increase in net sales was partially offset by lower volume/mix of $25.4 million.
Current wording
Net sales for the year ended December 31, 2024 were $836.3 million, an increase of $23.2 million or 2.9% compared to the prior year. Net sales increased due to $102.7 million of incremental sales in the Material Handling Segment from the acquisition of Signature on February 8, 2024. Signature's annual sales were approximately $110 million at the time of the acquisition. The increase in net sales was partially offset by lower volume of $60.2 million, lower pricing of $18.9 million and the effect of unfavorable currency translation of $0.4 million.
Previous wording
Net sales in the Material Handling Segment decreased $92.4 million or 14.3% for the year ended December 31, 2023 compared to the prior year. Net sales decreased due to lower volume/mix of $74.5 million, lower pricing of $16.4 million and the effect of unfavorable currency translation of $1.5 million.
Current wording
Net sales in the Material Handling Segment increased $66.4 million or 12.0% for the year ended December 31, 2024 compared to the prior year. Net sales increased due to $102.7 million of incremental sales from the acquisition of Signature on February 8, 2024, partially offset by lower volume of $22.0 million, lower pricing of $13.9 million and the effect of unfavorable currency translation of $0.4 million.
Previous wording
Gross profit decreased $24.3 million, or 8.6%, for the year ended December 31, 2023 compared to the prior year due to lower volume/mix and lower pricing as described under Net Sales above and increased labor and productivity costs partially offset by lower material costs and the benefits of the acquisition of Mohawk on May 31, 2022. Gross margin expanded to 31.9% for the year ended December 31, 2023 compared to 31.5% for the same period in 2022.
Current wording
Gross profit increased $11.7 million, or 4.5%, for the year ended December 31, 2024 compared to the prior year due to the benefits of the acquisition of Signature on February 8, 2024, and favorable mix, partially offset by lower volume and pricing as described under
Previous wording
Selling, general and administrative (“SG&A”) expenses for the year ended December 31, 2023 were $186.9 million, a decrease of $12.6 million or 6.3% compared to the prior year. Decreases in SG&A expenses in 2023 were primarily due to $11.4 million of lower incentive compensation, $3.8 million of lower variable selling expenses, $0.4 million of lower legal and professional fees and $3.3 million of lower facility costs. The decrease to SG&A expenses was partially offset by $5.0 million of incremental SG&A from the acquisition of Mohawk on May 31, 2022 and $1.9 million of higher salaries and benefits. SG&A expenses also increased as compared to prior year due to higher expenses incurred on restructuring actions of $2.5 million, described in Note 6 to the consolidated financial statements and higher expenses incurred on due diligence and consulting related to the Signature acquisition of $2.1 million, described in Note 15 to the consolidated financial statements. Additionally, as described in Note 9 to the consolidated financial statements, the Company reached a settlement agreement with one of its insurers, for $10.0 million, which resulted in a $6.7 million net reduction to legal costs within SG&A for the year ended December 31, 2023. Environmental matters described in Note 9 to the consolidated financial statements resulted in a net $3.2 million expense in the year ended December 31, 2023, which compared to $1.4 million of charges in the year ended December 31, 2022.
Current wording
Selling, general and administrative (“SG&A”) expenses for the year ended December 31, 2024 were $204.1 million, an increase of $17.2 million or 9.2% compared to the prior year. Increases in SG&A expenses in 2024 were primarily due to $28.8 million of incremental SG&A, including $10.1 million of intangible amortization, from the acquisition of Signature on February 8, 2024 and $2.2 million of higher facility costs, partially offset by $12.3 million of lower incentive compensation, $3.2 million of lower salaries and benefits, $2.2 million of lower commissions, $2.0 million of lower variable selling expenses and $0.4 million of lower legal and professional fees, excluding acquisition costs. Acquisition and integration costs included in SG&A expenses increased $1.5 million due to the Signature acquisition described in Note 3 to the consolidated financial statements. SG&A expenses also increased as compared to prior year due to higher expenses incurred on restructuring actions of $1.8 million, described in Note 6 to the consolidated financial statements partially offset by $1.3 million of consulting costs in 2023 to improve the Company's capabilities to screen and execute large acquisitions. Executive severance was $1.4 million for the year ended December 31, 2024, which compared to $0.7 million for the year ended December 31, 2023. Additionally, the Company reached a settlement agreement with one of its insurers, for $10.0 million, which resulted in a $6.7 million net reduction to legal costs within SG&A for the year ended December 31, 2023. Environmental matters described in Note 9 to the consolidated financial statements resulted in a net $0.2 million of income in the year ended December 31, 2024, which compared to $3.2 million of charges in the year ended December 31, 2023.
Previous wording
Net interest expense for the year ended December 31, 2023 was $6.3 million compared to $5.7 million during 2022. The higher net interest expense was due to a higher weighted-average borrowing rate in the current year, partly offset by lower average outstanding borrowings in the current year.
Current wording
Net interest expense for the year ended December 31, 2024 was $30.9 million compared to $6.3 million during 2023. The higher net interest expense was due to higher average outstanding borrowings as a result of the acquisition of Signature, which was funded through an amendment and restatement of Myers' existing loan agreement discussed below, and a higher weighted-average borrowing rate in the current year.
Previous wording
The Company’s primary sources of liquidity are cash on hand, cash generated from operations and availability under the Loan Agreement (defined below). At December 31, 2023, the Company had $30.3 million of cash, $224.3 million available under the Loan Agreement and outstanding debt with face value of $67.2 million, including the finance lease liability of $9.2 million. At December 31, 2023, our primary contractual obligations relate to our debt and lease arrangements as described in Notes 10 and 13 to the consolidated financial statements. Based on this liquidity and borrowing capacity, the Company believes it is well-positioned to manage through the working capital demands and heightened uncertainty in the current macroeconomic environment.
Current wording
The Company’s primary sources of liquidity are cash on hand, cash generated from operations and availability under the Amended Loan Agreement (defined below). At December 31, 2024, the Company had $32.2 million of cash, $244.7 million available under the Amended Loan Agreement and outstanding debt of $383.6 million, including the finance lease liability of $8.6 million. At December 31, 2024, our primary contractual obligations relate to our debt and lease arrangements as described in Notes 10 and 13 to the consolidated financial statements. Based on this liquidity and borrowing capacity, the Company believes it is well-positioned to manage through the working capital demands and heightened uncertainty in the current macroeconomic environment. The Company believes that cash on hand, cash flows from operations and available capacity under its Amended Loan Agreement will be sufficient to meet expected business requirements including capital expenditures, dividends, working capital, debt service, and to fund future growth.
Previous wording
Cash provided by operating activities was $86.2 million and $72.6 million for the years ended December 31, 2023 and 2022, respectively. The increase was primarily due to lower working capital driven by decreases in trade accounts receivable and increases in accounts payable for the year ended December 31, 2023.
Current wording
Cash provided by operating activities was $79.3 million and $86.2 million for the years ended December 31, 2024 and 2023, respectively. Cash generated from working capital was $9.6 million for the year ended December 31, 2024, compared to cash generated from working capital of $5.7 million in the prior year, primarily due to reductions in accounts receivable and inventory, partly offset by reductions in accounts payable.
Previous wording
Net cash used by investing activities was $22.8 million for the year ended December 31, 2023 compared to cash used of $50.4 million for the year ended December 31, 2022. In 2022, the Company paid $27.6 million to acquire Mohawk as discussed in Note 3 to the consolidated financial statements. The Company also received in 2022 proceeds of $1.5 million from the sale of fixed assets. Capital expenditures were $22.9 million and $24.3 million for the years ended December 31, 2023 and 2022.
Current wording
Net cash used by investing activities was $372.5 million for the year ended December 31, 2024 compared to cash used of $22.8 million for the year ended December 31, 2023. In 2024, the Company paid $348.3 million to acquire Signature, net of cash acquired and working capital adjustments, as discussed in Note 3 to the consolidated financial statements. Capital expenditures were $24.4 million and $22.9 million for the years ended December 31, 2024 and 2023, respectively.
Previous wording
Net cash used by financing activities was $56.5 million for the year ended December 31, 2023 compared to cash used of $16.3 million for the year ended December 31, 2022. Net borrowings (repayments) on the credit facility for the year ended December 31, 2023 and December 31, 2022 were $(36.0) million and $3.0 million, respectively. Fees paid for the amendment and extension of the Loan Agreement in September 2022 totaled $0.9 million. Net proceeds from the issuance of common stock in connection with incentive stock option exercises were $2.3 million and $2.3 million in 2023 and 2022, respectively. Cash paid for tax withholdings on vesting of stock compensation totaled $2.1 million and $0.5 million in 2023 and 2022, respectively, which increased primarily due to improved vesting of long-term performance-based awards in the current year. The Company also used cash to pay dividends of $20.2 million and $19.8 million in 2023 and 2022, respectively.
Current wording
Net cash provided by financing activities was $295.1 million for the year ended December 31, 2024 compared to cash used of $56.5 million for the year ended December 31, 2023. In 2024, the Company received proceeds of $400 million under a new term loan facility, as described below and repaid $38.0 million of senior unsecured notes, including $26.0 million of senior unsecured notes that matured in January 2024 and the prepayment of $12.0 million of senior unsecured notes in conjunction with the amendment and restatement to the Loan Agreement described below. The company also made repayments of the Term Loan A totaling $18.0 million, $3.0 million of which was a voluntary prepayment. Net borrowings (repayments) of the Company's existing revolving credit facility for the year ended December 31, 2024 and December 31, 2023 were $(20.0) million and $(36.0) million, respectively. Net proceeds from the issuance of common stock in connection with incentive stock option exercises were $3.3 million and $2.3 million in 2024 and 2023, respectively. Cash paid for tax withholdings on vesting of stock compensation totaled $2.1 million in both 2024 and 2023. Fees paid for the amendment and restatement to the Loan Agreement in February 2024 totaled $9.2 million. The Company also used cash to pay dividends of $20.4 million and $20.2 million in 2024 and 2023, respectively.
Previous wording
On September 29, 2022, the Company entered into a Seventh Amended and Restated Loan Agreement (the “Seventh Amendment”), which amended the Sixth Amended and Restated Loan Agreement (the "Sixth Amendment"), dated March 12, 2021. The Seventh Amendment, among other things, extended the maturity date to September 2027 from March 2024. There was no change to the credit facility's borrowing limit of $250 million.
Current wording
On September 29, 2022, the Company entered into a Seventh Amended and Restated Loan Agreement (the “Seventh Amendment”), which amended the Sixth Amended and Restated Loan Agreement, dated March 12, 2021. The Seventh Amendment, among other things, extended the maturity date to September 2027 from March 2024. There was no change to the credit facility's borrowing limit of $250 million.
Previous wording
On January 12, 2024, the Company repaid $26.0 million of Senior Unsecured Notes upon maturity using cash on hand and availability under the Loan Agreement. On February 6, 2024, in connection with the subsequent amendment and restatement to the Loan Agreement described below, the Company prepaid the remaining $12.0 million face value of Senior Unsecured Notes, which were due January 15, 2026, using availability under the revolving credit facility under the Loan Agreement. After giving effect to the payment in full of all outstanding Senior Unsecured Notes under the Note Purchase Agreement, the Note Purchase Agreement has been terminated.
Current wording
On January 12, 2024, the Company repaid $26.0 million of senior unsecured notes upon maturity using cash on hand and availability under the Loan Agreement. On February 6, 2024, in connection with the first amendment and restatement to the Loan Agreement described below, the Company prepaid the remaining $12.0 million face value of senior unsecured notes, which were due January 15, 2026, using availability under the revolving credit facility under the Loan Agreement. After giving effect to the payment in full, all outstanding senior unsecured notes under the Note Purchase Agreement have been paid and the Note Purchase Agreement has been terminated. In conjunction with the termination the Company recognized a loss on debt extinguishment of $0.1 million, primarily representing the make-whole fees on the senior unsecured notes and the unamortized value of the original issuance discount.
Previous wording
On February 8, 2024, the Company entered into Amendment No. 1 to the Seventh Amended and Restated Loan Agreement (“Amendment No. 1”), which amended the Seventh Amended and Restated Loan Agreement (the "Loan Agreement” – see also Note 10) dated September 29, 2022 (collectively, the “Amended Loan Agreement”). Amendment No. 1, among other things, permits the acquisition of Signature Systems and provides for a new 5-year $400 million term loan facility (“Term Loan A”). Term Loan A will amortize in quarterly installment payments in aggregate annual amounts equal to $20 million in years 1 and 2 and $40 million in years 3 through 5. Term Loan A may be voluntarily prepaid at any time, in whole or in part, without penalty or premium, however, all amounts repaid or prepaid in respect of Term Loan A may not be reborrowed.
Current wording
dated September 29, 2022 (collectively, the “Amended Loan Agreement”). Amendment No. 1, among other things, permitted the acquisition of Signature Systems and provided a new 5-year $400 million term loan facility (“Term Loan A”). Term Loan A will amortize in eight quarterly installment payments of $5 million beginning June 30, 2024, quarterly installment payments of $10 million thereafter, and any remaining balance due upon maturity. Term Loan A may be voluntarily prepaid at any time, in whole or in part, without penalty or premium, however, all amounts repaid or prepaid in respect of Term Loan A may not be reborrowed. In December 2024, the Company voluntarily prepaid $3 million of the Term Loan A.
Previous wording
Amendment No. 1 did not change the existing revolving credit facility’s maturity date or $250 million borrowing limit, which includes a letter of credit subfacility and swingline subfacility. In connection with Amendment No. 1, the Company incurred deferred financing fees of approximately $9 million.
Current wording
Amendment No. 1 did not change the existing revolving credit facility’s maturity date or $250 million borrowing limit, which includes a letter of credit subfacility and swingline subfacility. In connection with Amendment No. 1, the Company incurred deferred financing fees of $9.2 million.
Previous wording
As of December 31, 2023, $224.3 million was available under the Loan Agreement, after borrowings and $5.7 million of letters of credit issued related to insurance and other financing contracts in the ordinary course of business. Borrowings under the Loan Agreement bear interest at the Term SOFR, RFR, EURIBOR and CDOR-based borrowing rates.
Current wording
As of December 31, 2024, $244.7 million was available under the Amended Loan Agreement, after borrowings and the Company had $5.3 million of letters of credit issued related to insurance and other financing contracts in the ordinary course of business. Borrowings under the Amended Loan Agreement bear interest at the Term SOFR, RFR, SONIA, EURIBOR and CORRA-based borrowing rates.
Previous wording
As of December 31, 2023, the Company was in compliance with all of its debt covenants. The most restrictive financial covenants for all of the Company’s debt are an interest coverage ratio (defined as earnings before interest, taxes, depreciation and amortization, as adjusted, divided by interest expense) and a leverage ratio (defined as total debt divided by earnings before interest, taxes, depreciation and amortization, as adjusted). The ratios as of and for the period ended December 31, 2023 are shown in the following table:
Current wording
As of December 31, 2024, the Company was in compliance with all of its debt covenants. The most restrictive financial covenants for all of the Company’s debt are a net leverage ratio (defined as net debt divided by earnings before interest, taxes, depreciation and amortization, as adjusted) and an interest coverage ratio (defined as earnings before interest, taxes, depreciation and amortization, as adjusted, divided by interest expense). The ratios as of and for the period ended December 31, 2024 are shown in the following table:
Previous wording
A quantitative assessment requires the Company to estimate the fair value of the reporting unit (Level 3 measurement), which the Company does using a combination of a discounted cash flow analysis and market-based approach. Estimating fair value requires the exercise of significant judgment, including judgment about appropriate discount rates, long term growth rates and the amount and timing of expected future cash flows. The cash flows employed in the discounted cash flow analyses are based on the most recent budget and long-term forecast. The discount rates used in the discounted cash flow analyses are intended to reflect the risks inherent in the future cash flows of the respective reporting units. The market-based approach estimates fair value using market multiples of various financial measures compared to a set of comparable public companies and recent comparable transactions. The fair value of the reporting unit is then compared to the carrying value, and any excess carrying value of the reporting unit above the fair value would indicate impairment.
Current wording
A quantitative assessment requires the Company to estimate the fair value of the reporting unit (Level 3 measurement), which the Company does using a combination of a discounted cash flow analysis and market-based approach. Estimating fair value requires the exercise of significant judgment, including judgment about appropriate discount rates, long-term growth rates and the amount and timing of expected future cash flows. The cash flows employed in the discounted cash flow analyses are based on the most recent budget and long-term forecast. The discount rates used in the discounted cash flow analyses are intended to reflect the risks inherent in the future cash flows of the respective reporting units. The market-based approach estimates fair value using market multiples of various financial measures compared to a set of comparable public companies and recent comparable transactions. The fair value of the reporting unit is then compared to the carrying value, and any excess carrying value of the reporting unit above the fair value would indicate impairment. See disclosure of goodwill in Note 4 to the consolidated financial statements included in Item 8 of this Annual Report on Form 10-K.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
On February 8, 2024, the Company entered into Amendment No. 1 to the Seventh Amended and Restated Loan Agreement (“Amendment No. 1”), which amended the Seventh Amended and Restated Loan Agreement (the "Loan Agreement” – see also Note
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
The Company believes that cash on hand, cash flows from operations and available capacity under its Loan Agreement will be sufficient to meet expected business requirements including capital expenditures, dividends, working capital, debt service, and to fund future growth, including selective acquisitions.