Myers Industries Q3 Earnings Call Highlights

Key Points

• Third-quarter revenue rose 8.1% from continuing operations, led by 38% infrastructure growth and 12% food-and-beverage growth. Adjusted EPS increased 3.2% to $0.32, although higher resin costs, unfavorable mix and maintenance reduced margins.
• Resin costs increased 76% from March through May, driving adjusted gross margin down 360 basis points to 28.2%. Management expects significant fourth-quarter margin improvement as resin costs stabilize and pricing actions take effect.
• Myers strengthened its balance sheet by selling its North America Myers Tire Supply business, reducing net debt by $28.5 million and lowering net leverage to 1.86 times. Management continues to identify Signature Systems and infrastructure products as major long-term growth platforms, with planned capacity expansions and mid- to high-teens annual growth expected through 2029.

Myers Industries NYSE: MYE reported third-quarter revenue growth of 8.1% from continuing operations, supported by demand in its infrastructure and food-and-beverage markets, while higher resin costs and other factors pressured margins.

President and Chief Executive Officer Aaron Schapper said infrastructure revenue rose 38% during the quarter, driven by continued demand for composite matting products. Food-and-beverage revenue increased 12%, reflecting demand for seed boxes and intermediate bulk containers. Vehicle and consumer sales were flat year over year, while industrial sales were also flat as timing-related weakness in military demand was offset by strength in other industrial products.

Adjusted earnings per share from continuing operations increased 3.2% year over year to $0.32, aided by lower interest and tax expense. Reported EPS from continuing operations was $0.13.

Margins pressured by resin costs

Chief Financial Officer Samantha Rutty said adjusted gross margin declined 360 basis points to 28.2%, reflecting a sharp increase in resin costs, unfavorable product mix and unplanned maintenance expenses. Higher sales volume and pricing actions partially offset those pressures.

According to Rutty, resin costs rose 76% from March through May. Myers implemented pricing actions as costs increased, though the timing and scale of the increase created a lag in price realization.

Adjusted operating margin fell 210 basis points year over year to 10.4%, while adjusted EBITDA margin declined 280 basis points to 15.5%.

Management expects significant sequential margin improvement in the fourth quarter as resin costs stabilize and pricing actions take effect. Rutty said the company expects fourth-quarter adjusted EBITDA margin to align with its trailing 12-month average.

Portfolio reshaping and cash flow

During the quarter, Myers completed the divestiture of its North America Myers Tire Supply business. Schapper said the sale simplifies the company’s portfolio and allows it to concentrate investment on its remaining businesses and growth platforms.

Rutty added that the company is still working through a separate sale process for the Central America Myers Tire Supply business.

Myers ended the quarter with $53.5 million of cash and $254.7 million of total liquidity. The company reduced net debt by $28.5 million during the quarter, primarily using proceeds from the Myers Tire Supply sale. Net leverage declined to 1.86 times, within the company’s 1.5-times-to-2.5-times target range and below 2.64 times a year earlier.

Third-quarter operating cash flow was $17.4 million, while capital expenditures totaled $5.9 million, resulting in free cash flow of $11.5 million. Year-to-date free cash flow reached $61.9 million, up 29% from the prior year.

Signature growth strategy

Management highlighted Signature Systems, its composite matting and portable flooring operation, as a key growth platform. The business serves infrastructure markets, representing about 80% of its sales, and stadium applications, representing the remaining 20%.

Schapper said Signature’s infrastructure offerings support transmission and distribution projects, oil-and-gas activity, and large construction projects, while its stadium products protect athletic surfaces during sporting and entertainment events.

The company estimates Signature’s total addressable market at about $4 billion, with composite matting representing roughly 19% of that market. Management sees an opportunity for customers to shift from wood matting to composite products, which it said can be up to 40% lighter and last up to five times longer than wood alternatives.

Myers recently launched Ice Shield R10, a portable flooring product designed for ice arenas. The product incorporates an insulating layer intended to preserve freezing temperatures and protect ice surfaces while allowing venues to host concerts and other events. The company said the product can support pedestrian traffic, staging and equipment loads of up to 20,000 pounds.

Management expects Signature revenue to have grown at an approximately 13% compound annual rate through 2026 and projects annual growth in the mid- to high-teens through 2029. Planned capacity expansions include a 30% increase in 2027 and another 30% increase in 2029. Myers expects its innovation pipeline, averaging one product launch annually, to generate more than $60 million in incremental revenue through 2029.

Updated market outlook

For 2026, Myers reaffirmed its expectation for moderate industrial-market growth, though management expects timing-related military demand headwinds to continue into the fourth quarter. The company continues to project military-business revenue growth at a compound annual rate of 10% to 15% from 2025 through 2028.

The company maintained its outlook for strong infrastructure growth, citing demand for MegaDeck and turf-protection products tied to utility transmission and distribution work, data centers and large construction projects. Myers expects the infrastructure business to grow at a mid- to high-teens compound annual rate through 2029.

• Vehicle: Outlook lowered from stable to down, reflecting declines in the U.S. recreational-vehicle market, delayed automotive OEM launches and mixed demand indicators. Management said marine and commercial vehicle demand is improving.
• Consumer: Outlook raised from stable to moderate growth, following elevated fuel-can demand after winter storms and continued stable demand during the year.
• Food and beverage: Outlook raised from moderate to strong growth, supported by quotation activity, backlog, intermediate bulk container conversion opportunities and slightly positive expected seed sales.

Schapper said the company’s Focused Transformation program remains centered on commercial execution, operational productivity, cost management and investment in its four growth platforms: surface protection, dangerous-goods storage and transportation, specialized storage, and storage solutions.

About Myers Industries (NYSE:MYE)

Myers Industries, Inc is a manufacturer and distributor of products serving industrial, agricultural, automotive, commercial and consumer markets. Founded in 1933 and headquartered in Akron, Ohio, the company operates primarily in North America.

Through its material-handling businesses, Myers Industries produces reusable plastic containers, totes, pallets, drums, tanks and other molded products. These products are used to store, transport and protect materials across industries such as manufacturing, food processing, agriculture, healthcare and logistics.

The company also distributes tire-service supplies, equipment and related products to tire dealers, retreaders, commercial fleets and automotive service providers.

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