• Net Sales: $203.9 million in Q4, an increase of 6.7% year-over-year.
• Consumer End Market Sales Growth: 33% driven by SETR fuel cans.
• Industrial End Market Sales Growth: 13% driven by Sceptor military ammunition packaging.
• Infrastructure Sales: $30.9 million growth from Signature.
• Adjusted Gross Margin: Increased 210 basis points to 32.2%.
• Adjusted Operating Income: $17.6 million or 8.7% of sales.
• Adjusted EBITDA: Increased 26.2%, with a margin of 13.5%.
• Diluted Adjusted EPS: $0.19 compared to $0.29 in 2023.
• Material Handling Segment Sales Increase: 20.3% year-over-year.
• Distribution Segment Sales Decrease: 20.2% due to lower volume and pricing.
• Full Year Net Sales: $836.3 million, an increase of 2.9%.
• Full Year Adjusted Operating Income Improvement: $8.4 million or 11.1%.
• Full Year Adjusted EBITDA Increase: 24.7%, with a margin of 14.6%.
• E-commerce Sales: $36 million, growing 12% year-over-year.
• Free Cash Flow: $20.2 million in Q4 and $54.9 million for the year.
• CapEx: $7.1 million in Q4, totaling $24.4 million for the year (2.9% of sales).
• Total Debt Reduction: $26 million since March 30, 2024.
• Cash on Hand: $32.2 million at the end of 2024.
• New Share Repurchase Program: $10 million announced.

• Warning! GuruFocus has detected 3 Warning Signs with MYE.

Release Date: March 06, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Myers Industries Inc (NYSE:MYE) reported a 6.7% increase in fourth-quarter net sales, reaching $203.9 million.
• The company achieved a 33% sales growth in the consumer end market, driven by SETR fuel cans, and a 13% growth in the industrial end market.
• Adjusted gross margin improved by 210 basis points to 32.2%, largely due to the acquisition of Signature Systems and favorable product mix.
• The company announced a new $10 million share repurchase authorization, reflecting confidence in its business strength.
• Myers Industries Inc (NYSE:MYE) is implementing a focused transformation program aimed at achieving $20 million in annualized cost savings by the end of 2025.

Negative Points

• Distribution segment net sales decreased by 20.2% due to lower volume and pricing.
• The Buckhorn business continues to face cyclical market headwinds, particularly in seed box sales.
• Diluted adjusted earnings per share decreased to $0.19 from $0.29 in 2023, primarily due to increased interest expense.
• The company is temporarily suspending its practice of issuing formal annual guidance as it completes its action plan.
• There are ongoing challenges in the distribution business, including integration issues and market consolidation.

Q & A Highlights

Q: Can you provide an overview of your first 65 days as CEO and any portfolio optimization actions you might take? A: Aaron Schapper, President and CEO, stated that he is assessing the portfolio to reinforce strong-performing businesses and address underperforming ones. He emphasized the importance of understanding customer needs and optimizing the portfolio for simplicity and focus. While no definitive actions have been decided yet, he is committed to improving cost structures and delivering customer value.

Q: What factors contributed to the organic sales deceleration in the material handling segment? A: Grant Fitz, CFO, explained that the deceleration is primarily due to challenges in the Buckhorn business, particularly with seed box sales declines after a strong 2023. However, other business units performed well, and there are plans to offset declines with market share gains in manufacturing and bulk containers.

Q: How are tariffs impacting your cost structure, and what mitigation steps are you taking? A: Grant Fitz noted that Myers Industries has limited exposure to tariffs, with about 10% of material costs potentially affected. The company has taken steps to mitigate short-term impacts by adjusting inventory and is prepared to manage longer-term effects through pricing strategies.

Q: Can you provide an update on the integration of Signature Systems and its performance? A: Aaron Schapper and Grant Fitz reported that the integration is progressing well, with a strong cultural fit and alignment in management tools. Signature Systems had a strong Q4, with significant growth and record performance in its MegaTech product line. Synergies are on track, with potential upside opportunities.

Q: What challenges are you facing in the distribution business, and how are you addressing them? A: Aaron Schapper acknowledged a mix of market issues and internal mistakes in the distribution segment. The company is making management changes and restructuring to improve value delivery. Efforts are underway to fix past mistakes and enhance the business structure.

Q: How do tariffs affect your competitors, and how does Myers Industries compare? A: Grant Fitz indicated that while it's difficult to know competitors' exact exposure, Myers Industries is well-positioned with a largely US-based supply chain. The company believes it may be in a better position than the industry average regarding tariff impacts.

Q: Are there any signs of recovery in the RV and marine markets, and what opportunities exist for Myers Industries? A: Grant Fitz mentioned potential recovery signs in the RV and marine markets, with some stabilization and inventory reduction. Aaron Schapper added that new design rollouts in these markets present opportunities for Myers Industries to improve cost structures and margins.

Q: How should we think about the profitability of the distribution segment in 2025, given the focus on cost reduction and sales growth? A: Aaron Schapper explained that while specific guidance is not provided, the focus transformation project aims to improve cost structures. The company is closing distribution centers and adding salespeople to enhance sales coverage and e-commerce efforts, which should positively impact profitability.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.