MYERS INDUSTRIES INC

Previous wording

This Quarterly Report on Form 10-Q and the information incorporated by reference contains “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,” “believe,” “anticipate,” “expect,” “estimate,” “intend,” “plan,” or variations of these words, or similar expressions. These forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based only on the Company’s current beliefs, expectations and assumptions regarding the future of our business, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions. Because forward-looking statements relate to the future, these statements inherently involve a wide range of inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of our control. The Company’s actual actions, results, and financial condition may differ materially from what is expressed or implied by the forward-looking statements.

Current wording

This Quarterly Report on Form 10-Q and the information incorporated by reference contains “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,” “believe,” “anticipate,” “expect,” “estimate,” “intend,” “plan,” or variations of these words, or similar expressions. These forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based only on the Company’s current beliefs, expectations and assumptions regarding the future of our business, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions. Because forward-looking statements relate to the future, these statements inherently involve a wide range of uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of our control. The Company’s actual actions, results, and financial condition may differ materially from what is expressed or implied by the forward-looking statements.

Previous wording

The Company’s results of operations for the quarter ended March 31, 2025 are discussed below. The current economic environment includes heightened risks from tariffs, 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 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, tariffs 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 quarter and six months ended June 30, 2025 are discussed below. The current economic environment includes heightened risks from tariffs, 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 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, tariffs 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 decreased $5.6 million or 10.3% for the quarter ended March 31, 2025 compared to the quarter ended March 31, 2024, primarily due to lower pricing of $2.9 million and lower volume of $2.7 million.

Current wording

Net sales in the Distribution Segment decreased $3.3 million or 6.0% for the quarter ended June 30, 2025 compared to the quarter ended June 30, 2024, primarily due to lower pricing of $2.6 million and lower volume of $0.7 million.

Previous wording

Gross profit increased $4.8 million, or 7.5%, for the quarter ended March 31, 2025 compared to the quarter ended March 31, 2024, due to the benefits of the acquisition of Signature on February 8, 2024, favorable mix and lower material costs, partially offset by lower volume and pricing as described under Net Sales above, and unfavorable cost productivity. Gross margin was 33.4% for the quarter ended March 31, 2025 compared with 31.0% for the quarter ended March 31, 2024.

Current wording

Gross profit decreased $4.9 million, or 6.4%, for the quarter ended June 30, 2025 compared to the quarter ended June 30, 2024, due to lower volume and pricing as described under Net Sales above, unfavorable mix and unfavorable cost productivity, partially offset by lower material costs. Gross margin was 33.7% for the quarter ended June 30, 2025 compared with 34.3% for the quarter ended June 30, 2024.

Previous wording

Selling, general and administrative (“SG&A”) expenses for the quarter ended March 31, 2025 were $44.8 million, a decrease of $2.4 million or 5.0% compared to the same period in the prior year. Decreases in SG&A expenses for the quarter ended March 31, 2025 were primarily due to $3.4 million of lower acquisition and integration costs due to the Signature acquisition as described in Note 3, $1.7 million of lower variable selling expenses, $1.1 million of lower legal and professional fees, $1.0 million of lower salaries and benefits, $0.3 million of lower facility costs and $0.2 million of lower commissions, partially offset by $3.0 million of incremental SG&A from the acquisition of Signature on February 8, 2024, $0.6 million of higher incentive compensation and $1.9 million of higher restructuring costs as described in Note 4.

Current wording

Selling, general and administrative (“SG&A”) expenses for the quarter ended June 30, 2025 were $43.4 million, a decrease of $0.8 million or 1.8% compared to the same period in the prior year. Decreases in SG&A expenses for the quarter ended June 30, 2025 were primarily due to a $3.2 million recovery of purchased credit deteriorated assets that was recognized as a reduction to bad debt expense and $0.7 million of lower acquisition and integration costs due to the Signature acquisition as described in Note 3, in addition to $1.4 million of lower salaries and benefits, $1.8 million of lower variable selling expenses, $0.5 million of lower facility costs, $0.3 million of lower commissions and $0.1 million of lower legal and professional fees, partially offset by $1.8 million of higher incentive compensation, $3.8 million of higher restructuring costs as described in Note 4 and a $1.6 million pre-tax pension settlement charge within the Material Handling segment, as described in Note 1.

Previous wording

Freight out costs increased $0.4 million to $2.8 million for the quarter ended March 31, 2025 as compared to $2.4 million for the quarter ended March 31, 2024. The increase was primarily related to higher sales volume within the Company's Material Handling segment.

Current wording

Freight out costs increased $0.1 million to $2.8 million for the quarter ended June 30, 2025 as compared to $2.7 million for the quarter ended June 30, 2024. The increase was primarily related to higher overall freight costs partially offset by lower sales volume.

Previous wording

The Company’s effective tax rate was 26.5% and 27.0% for the quarter ended March 31, 2025 and 2024, respectively. The decrease in the effective tax rate is driven by higher fixed non-deductible expenses in the prior year, including expenses related to the Signature acquisition.

Current wording

The Company’s effective tax rate was 23.1% and 30.2% for the quarters ended June 30, 2025 and 2024, respectively. The decrease in the effective tax rate is driven by a current year benefit related to the termination of the Company's pension plan and higher fixed non-deductible expenses in the prior year, including expenses related to the Signature acquisition.

Previous wording

Net sales for the quarter ended March 31, 2025 were $206.8 million, a decrease of $0.4 million or 0.2% compared to the quarter ended March 31, 2024. Net sales decreased due to lower pricing of $6.0 million, lower volume of $0.2 million and the effect of unfavorable currency translation of $0.6 million, partially offset by $6.4 million of incremental sales from the acquisition of Signature on February 8, 2024, included in the Material Handling Segment.

Current wording

Net sales for the six months ended June 30, 2025 were $416.3 million, a decrease of $11.0 million or 2.6% compared to the six months ended June 30, 2024. Net sales decreased due to lower pricing of $9.8 million, lower volume of $6.9 million and the effect of unfavorable currency translation of $0.7 million, partially offset by $6.4 million of incremental sales from the acquisition of Signature on February 8, 2024, included in the Material Handling Segment.

Previous wording

Net sales in the Material Handling Segment increased $5.4 million or 3.6% for the quarter ended March 31, 2025 compared to the quarter ended March 31, 2024. Net sales increased due to $6.4 million of incremental sales from the acquisition of Signature on February 8, 2024 and higher volume of $2.7 million, partially offset by lower pricing of $3.1 million and the effect of unfavorable currency translation of $0.6 million.

Current wording

Net sales in the Material Handling Segment decreased $1.9 million or 0.6% for the six months ended June 30, 2025 compared to the six months ended June 30, 2024. Net sales decreased due to lower pricing of $4.5 million, lower volume of $3.1 million and the effect of unfavorable currency translation of $0.7 million, partially offset by $6.4 million of incremental sales from the acquisition of Signature on February 8, 2024.

Previous wording

Depreciation and amortization, exclusive of amounts within Cost of sales, increased $0.5 million to $4.5 million for the quarter ended March 31, 2025 as compared to $3.9 million for the quarter ended March 31, 2024. The increase was primarily related to the acquisition of Signature on February 8, 2024.

Current wording

Depreciation and amortization, exclusive of amounts within Cost of sales, increased $0.2 million to $8.9 million for the six months ended June 30, 2025 as compared to $8.7 million for the six months ended June 30, 2024. The increase was primarily related to the acquisition of Signature on February 8, 2024.

Previous wording

During the quarter ended March 31, 2025 the Company recognized $0.4 million of losses on the disposal of fixed assets primarily related to fixed asset impairments and the disposal of fixed assets in conjunction with the previously announced facility consolidations as described in Note 4. During the quarter ended March 31, 2024 the Company recognized $(0.1) million of gains on the disposal of fixed assets primarily related to the sale of fixed assets in the prior year.

Current wording

During the six months ended June 30, 2025 the Company recognized $0.5 million of losses on the disposal of fixed assets primarily related to fixed asset impairments and the disposal of fixed assets in conjunction with the previously announced facility consolidations as described in Note 4. During the six months ended June 30, 2024 the Company recognized $0.1 million of losses on the disposal of fixed assets primarily related to the sale of fixed assets.

Previous wording

Net interest expense for the quarter ended March 31, 2025 was $7.4 million, an increase of $1.3 million, or 21.5%, compared with $6.1 million for the quarter ended March 31, 2024. 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, partially offset by a lower weighted-average borrowing rate for the quarter ended March 31, 2025.

Current wording

Net interest expense for the six months ended June 30, 2025 was $14.8 million, a decrease of $0.3 million, or 2.2%, compared with $15.1 million for the six months ended June 30, 2024. The lower 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, offset by a lower weighted-average borrowing rate for the six months ended June 30, 2025.

Previous 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 March 31, 2025, the Company had $35.3 million of cash, $231.7 million available under the Amended Loan Agreement and outstanding debt of $391.8 million, including the finance lease liability of $8.5 million. Based on this liquidity and borrowing capacity, the Company believes it is well-positioned to manage through the working capital demands and the 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.

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 June 30, 2025, the Company had $41.3 million of cash, $239.7 million available under the Amended Loan Agreement and outstanding debt of $379.1 million, including the finance lease liability of $8.3 million. Based on this liquidity and borrowing capacity, the Company believes it is well-positioned to manage through the working capital demands and the 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

Net cash provided by operating activities was $10.1 million for the quarter ended March 31, 2025, compared to $20.3 million in the same period in 2024. The decrease was primarily due to changes in working capital, primarily due to increases in accounts receivable and inventories, partially offset by increases in accounts payable. Cash used for working capital was $7.9 million for the quarter ended March 31, 2025, compared to cash generated from working capital of $4.3 million in the prior year to date period.

Current wording

Net cash provided by operating activities was $38.4 million for the six months ended June 30, 2025, compared to $34.6 million in the same period in 2024. The increase was primarily due to changes in working capital, primarily due to decreases in accounts receivable and accounts payable, partially offset by increases in inventories. Cash generated from working capital was $1.3 million for the six months ended June 30, 2025, compared to cash used for working capital of $3.7 million in the prior year to date period.

Previous wording

Net cash used for investing activities was $8.0 million for the quarter ended March 31, 2025 compared to cash used of $354.5 million for the same period in 2024. In 2024, the Company paid $348.3 million to acquire Signature, net of cash acquired and working capital adjustments, as discussed in Note 3. Capital expenditures were $8.1 million and $5.7 million for the quarter ended March 31, 2025 and 2024, respectively. Full year 2025 capital expenditures are expected to be approximately 3% of revenue.

Current wording

Net cash used for investing activities was $11.5 million for the six months ended June 30, 2025 compared to cash used of $358.4 million for the same period in 2024. In 2024, the Company paid $348.3 million to acquire Signature, net of cash acquired and working capital adjustments, as discussed in Note 3. Capital expenditures were $11.7 million and $10.1 million for the six months ended June 30, 2025 and 2024, respectively. Full year 2025 capital expenditures are expected to be approximately 3% of revenue.

Previous wording

Cash provided by financing activities was $1.0 million for the quarter ended March 31, 2025 compared to $336.9 million for the same period in 2024. Net borrowings (repayments) of the Company's revolving credit facility were $13.0 million and $(11.0) million for the quarter ended March 31, 2025 and 2024, respectively. The company also made scheduled repayments of the Term Loan A totaling $5.0 million for the quarter ended March 31, 2025. Net proceeds from the issuance of common stock in connection with incentive stock option exercises were $0.3 million and $2.4 million for the quarter ended March 31, 2025 and 2024, respectively. Cash paid for tax withholdings on vesting of stock compensation totaled $0.8 million and $1.9 million for the quarter ended March 31, 2025 and 2024, respectively. The company also used $1.0 million for the repurchase of its common stock, as described in Note 8. In connection with the Signature acquisition in 2024, the Company received proceeds of $400 million under a new term loan facility and repaid $38.0 million of senior unsecured notes in conjunction with an amendment and restatement to the Loan Agreement described below. 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 $5.3 million and $5.3 million for the quarter ended March 31, 2025 and 2024, respectively.

Current wording

Cash used by financing activities was $17.5 million for the six months ended June 30, 2025 compared to cash provided by financing activities of $331.0 million for the same period in 2024. Net borrowings (repayments) of the Company's revolving credit facility were $5.0 million and $(7.0) million for the six months ended June 30, 2025 and 2024, respectively. The company also made scheduled repayments of the Term Loan A totaling $10.0 million and $5.0 million for the six months ended June 30, 2025 and 2024, respectively. Net proceeds from the issuance of common stock in connection with incentive stock exercises were $0.6 million and $2.8 million for the six months ended June 30, 2025 and 2024, respectively. Cash paid for tax withholdings on vesting of stock compensation totaled $0.9 million and $2.0 million for the six months ended June 30, 2025 and 2024, respectively. The company also used $1.5 million for the repurchase of its common stock, as described in Note 8. In connection with the Signature acquisition in 2024, the Company received proceeds of $400 million under a new term loan facility and repaid $38.0 million of senior unsecured notes in conjunction with an amendment and restatement to the Loan Agreement described below. 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 $10.4 million for both the six months ended June 30, 2025 and 2024.

Previous wording

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 March 31, 2025, the remaining notional value of the Company's interest rate swap totaled $190.0 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 11.

Current wording

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 June 30, 2025, the remaining notional value of the Company's interest rate swap totaled $187.5 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 11.

Previous wording

As of March 31, 2025, $231.7 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.

Current wording

As of June 30, 2025, $239.7 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.