• Net Sales: $206.8 million, flat year over year.
• Adjusted Gross Margin: Increased 80 basis points to 33.5%.
• Adjusted Operating Income: Improved to $18.7 million, with a margin of 9% of sales.
• Adjusted EBITDA Margin: Expanded 170 basis points.
• Diluted Adjusted EPS: $0.22, up from $0.21 in 2024.
• Material Handling Net Sales: Increased 3.6% year over year.
• Material Handling Adjusted EBITDA: Increased 11.7% to $36.3 million, with a 160 basis point increase in margin to 23%.
• Distribution Net Sales: Decreased 10.3% due to lower volume and pricing.
• Operating Cash Flow: Lower due to increased working capital.
• CapEx: $8.1 million allocated for organic growth.
• Total Liquidity: $267 million, including $231.7 million under revolving credit and $35.3 million cash on hand.
• Share Repurchase: $1 million in shares repurchased, with $9 million remaining under authorization.
• Net Leverage Ratio: 2.8 times, targeting 1.5 to 2.5 times.

• Warning! GuruFocus has detected 5 Warning Signs with MYE.

Release Date: May 01, 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 improved margins due to effective cost control, leading to an increase in EPS.
• The company achieved $12 million in cost synergies from the Signature acquisition, surpassing the initial target of $8 million.
• Myers Industries Inc (NYSE:MYE) has a predominantly US-based supply chain, providing resilience against tariff-driven disruptions.
• The Focused Transformation program is showing early signs of improvement, with a commitment to $20 million in annualized cost savings by year-end 2025.
• The company launched a $10 million share repurchase plan, demonstrating a commitment to returning cash to shareholders.

Negative Points

• First quarter revenue was flat year over year, with growth in Material Handling offset by softness in the Distribution segment.
• Free cash flow was lower than expected due to increased working capital and inventory build-up in anticipation of tariffs.
• The Distribution segment experienced a 10.3% decrease in net sales due to lower volume and pricing.
• The Vehicle end market, including RV and marine, is expected to decline due to economic uncertainty and tariff impacts.
• Operating cash flow was negatively impacted by timing issues with accounts receivable and proactive inventory purchases.

Q & A Highlights

Q: Can you provide more details on the impact of tariffs on your Distribution business and how price-sensitive your customers are? A: Dan Hoehn, Vice President & Corporate Controller, explained that the Central America piece is a small part of the Distribution business, so tariffs are not expected to have a material effect. Customers are price-sensitive, but Myers is prepared to adjust pricing and has alternative suppliers to mitigate impacts. Aaron Schapper, CEO, added that they are in a good position with their supply chain and pricing strategies.

Q: Why was free cash flow low this quarter, and what are your expectations for future cash flow? A: Grant Fitz, CFO, noted that the low free cash flow was due to timing of accounts receivable and proactive inventory purchases ahead of potential tariffs. He expects cash flow to recover throughout the year and maintains confidence in Myers' ability to generate cash.

Q: Have you seen any increase in orders or qualification activities for military products in Signature and Scepter businesses? A: Aaron Schapper, CEO, confirmed strong order flow and growth in both Signature and Scepter businesses. They are exploring opportunities for expansion in Europe and are optimistic about future growth.

Q: What is causing the downturn in the Vehicle group, and is it specific to RV, marine, or auto components? A: Aaron Schapper, CEO, explained that economic uncertainty, high interest rates, and tariff impacts are causing hesitancy in RV and marine spending. The automotive side is also affected by tariff uncertainties, leading to a cautious market outlook.

Q: What are your learnings from the Signature acquisition after a year, and how has it performed? A: Grant Fitz, CFO, stated that Signature has been a successful acquisition, exceeding synergy targets and providing valuable process improvements. Aaron Schapper, CEO, added that the cultural fit and operational strengths of Signature have strengthened Myers overall.

Q: Can you elaborate on pricing decisions in the Material Handling segment? A: Dan Hoehn, Vice President & Corporate Controller, mentioned strategic pricing adjustments to remain competitive and drive volume. Aaron Schapper, CEO, emphasized the importance of pricing to reflect the value provided to customers, maintaining strong relationships and margins.

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