Myers Industries NYSE: MYE reported a stronger first quarter of 2026, with management pointing to revenue growth, margin improvement and higher free cash flow as early evidence that its “focused transformation” program is gaining traction.
President and Chief Executive Officer Aaron Schapper said the company “began 2026 on a positive trajectory,” building on momentum from 2025. He said Myers is seeing benefits from initiatives aimed at improving margins, increasing operating efficiency and embedding continuous improvement across the organization.
For the first quarter, adjusted earnings per share rose 57.1% year over year to $0.44. Adjusted EBITDA increased 27%, while adjusted EBITDA margin expanded to 21.3%, up 420 basis points from the prior-year period. Net sales increased 1.8% year over year, or 5% excluding the impact of the company’s fourth-quarter 2025 decision to exit low-margin products and idle two rotational molding facilities.
Margin Gains and Cash Flow Improvement
Executive Vice President and Chief Financial Officer Samantha Rutty said adjusted gross margin improved to 34.7%, driven by favorable mix, lower material costs and lower manufacturing costs. Adjusted operating margin rose to 15.7%.
The company also reported stronger cash generation. Operating cash flow was $26.7 million in the quarter, while capital expenditures were $2.8 million, producing free cash flow of $23.9 million. Rutty said free cash flow was significantly higher than last year and up 28.5% compared with the fourth quarter.
Myers ended the quarter with $44.6 million in cash and total liquidity of $289.3 million. The company reduced net debt by $18.3 million during the quarter, bringing its net leverage ratio to 2.2 times, within its target range of 1.5 times to 2.5 times. Rutty said the company plans to further reduce debt in 2026.
MTS Sale Moves Forward as Part of Portfolio Simplification
Management emphasized the planned sale of MTS as a key step in narrowing Myers’ focus. Rutty said MTS is now reported as discontinued operations, and all results discussed on the call were from continuing operations only.
Schapper said the sale, when completed, would simplify the portfolio and streamline the company’s path to market by removing a fragmented customer base with limited overlap with other parts of the business. He said the move should improve Myers’ ability to focus on markets where it offers differentiated solutions.
During the question-and-answer session, Rutty said the company could not provide specifics on the sale process but said management was pleased with the progress being made. Schapper added that divestitures, like acquisitions, are difficult to time precisely and that the company would provide updates “at the appropriate time.”
Infrastructure, Military and Consumer Markets Support Growth
Rutty said strong growth in infrastructure, military and consumer markets helped offset softer demand in vehicle and food and beverage markets. She said new customers accounted for 24% of Infrastructure’s revenue in the quarter, which management views as a sign of a broader and more diversified customer base.
Schapper highlighted demand for Signature Systems’ turf protection products, saying they will be featured at multiple FIFA World Cup events this summer. He said the majority of the 11 venues either already own or will rent Myers products for the event.
Infrastructure remains a key growth area, supported by U.S. spending on data centers, utility projects and large construction, as well as conversion from wood to composite matting. Rutty said orders for the company’s MegaDeck product are up more than 130% from the same point last year.
In response to an analyst question about Signature capacity, Schapper said Myers is using its broader thermoplastics manufacturing footprint to specialize product lines by plant. He said the company is moving stadium products so its Orlando facility can concentrate on MegaDeck production. Rutty added that Myers is adding capacity in Orlando, expected to come online in the first quarter of next year, and said the company does not expect capacity to constrain demand this year.
Company Reaffirms 2026 Outlook
Myers reaffirmed the 2026 outlook it provided on March 5. Rutty said the outlook excludes the impact of exiting low-margin products and idling the two rotational molding facilities in Alliance, Ohio, which represented approximately $5 million in revenue per quarter, primarily in industrial and consumer markets, with a favorable impact to earnings.
By end market, Myers expects moderate growth in industrial as manufacturing capital expenditure trends show modest recovery. Military demand is expected to increase as inventories are replenished globally and Myers diversifies its product lines with existing military customers.
The company expects stable vehicle demand overall, with flat RV and marine sales due to soft consumer sentiment, a recovery in commercial vehicles beginning in the second half of 2026 and improved demand for automotive OEM component packaging tied to new and updated vehicle program launches.
Consumer sales are expected to remain stable. Rutty said first-quarter demand was strong following winter storms across much of the U.S., while spring sales have remained strong during lawn and garden season. Food and beverage is expected to be slightly down for the year, with seed demand projected to be flat and farm input costs affected by supply challenges.
Resin Costs Create Near-Term Pressure
Management also warned of near-term pressure from higher resin costs. Rutty said conflict in the Middle East has affected global resin supply and pricing. While availability has not been an issue for Myers due to secure supply, she said the company is experiencing higher material costs as global prices rise.
Rutty said Myers is responding through customer discussions, selective or contractual pricing actions and cost reductions. However, because there is typically a lag between cost increases and price recovery, she said the company expects some pressure on second-quarter gross margins. She said Myers expects to mitigate those pressures and expand margins in the second half of the year through contract structure, pricing actions and cost reductions.
Schapper said capital allocation priorities remain focused first on reducing debt, then investing in organic growth opportunities within the business. He said Myers will also consider opportunistic mergers and acquisitions, particularly in areas tied to growth platforms such as ground protection, military applications and related thermoplastics capabilities, but emphasized that M&A is not the company’s first priority for cash deployment.
About Myers Industries NYSE: MYE
Myers Industries, Inc is a diversified manufacturer of polymer products serving industrial, commercial and consumer markets. The company designs, produces and markets a broad range of molded and fabricated plastic components, including pallets, bulk containers, tanks and drums used in material handling and storage applications. Myers Industries leverages proprietary polymer technologies to provide durable, reusable solutions that help customers optimize supply chain efficiency and reduce environmental impact.
Myers operates primarily through two business segments.
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