Recent Quotes View Full List My Watchlist Create Watchlist Indicators DJI Nasdaq Composite SPX Gold Crude Oil EL&P Market Index Markets Stocks ETFs Tools Overview News Currencies International Treasuries Myers Industries Announces Third Quarter 2023 Results By: Myers Industries, Inc. via Business Wire November 01, 2023 at 06:30 AM EDT Further Implementation of Myers Business System Supports Gross Margin Expansion Improving Balance Sheet Strength with Additional Debt Reduction Myers Industries, Inc. (NYSE: MYE), a leading manufacturer of a wide range of polymer and metal products and distributor for the tire, wheel, and under-vehicle service industry, today announced results for the third quarter ended September 30, 2023. Third Quarter 2023 Financial Highlights Net sales of $197.8 million compared to $228.1 million in the prior year period Gross margin of 31.5%, up 10 basis points versus the prior year period GAAP net income per diluted share of $0.34 compared to $0.37 in the prior year period Adjusted earnings per diluted share of $0.38 compared to $0.41 in the prior year period Cash flow provided by operations was $22.1 million and free cash flow was $18.1 million Myers Industries’ President and CEO Mike McGaugh said "In the third quarter, we continue to see the real value of the Myers Business System in driving strong business results, in-spite of continued significant revenue headwinds in several of our key markets. We are managing our business well, as we expanded year-over-year adjusted gross margin for the seventh consecutive quarter while also expanding adjusted EBITDA margin and generating healthy cash flows. These results are strong indications that our Myers Business System and our other self-help initiatives continue to deliver solid results. During the period we saw weakness within our consumer-facing verticals and a less active hurricane season year over year, both of which adversely affected our Material Handling segment. Our Distribution segment posted improved profitability and remains well positioned to capitalize on anticipated longer-term market tailwinds in the tire repair industry. We are keenly focused on protecting profitability by improving our cost structures across both segments as we continue to make investments for the future. We are optimizing our plants in aligning capacity to consistently match production levels, controlling costs, and driving new commercial excellence programs. Through these dedicated efforts, we lessened the total impact of current headwinds, allowing for the Company to continue progressing against its long-term strategic and financial objectives." McGaugh continued “During the quarter, we generated elevated levels of free cash flow, which allowed us to further strengthen our balance sheet and pay down debt. We will continue to evaluate a number of opportunities within our M&A pipeline and will opportunistically deploy capital towards attractive growth opportunities when they make strategic sense. We look forward to driving future shareholder value through strong execution against our long-term growth strategy and by maintaining strong profitability through all economic conditions.” Third Quarter 2023 Financial Summary Quarter Ended September 30, (Dollars in thousands, except per share data) 2023 2022 % Inc (Dec) Net sales $197,798 $228,065 (13.3)% Gross profit $62,379 $71,648 (12.9)% Gross margin 31.5% 31.4% Operating income $18,703 $19,897 (6.0)% Net income $12,747 $13,671 (6.8)% Net income per diluted share $0.34 $0.37 (8.1)% Adjusted operating income $20,039 $22,013 (9.0)% Adjusted net income $13,875 $15,018 (7.6)% Adjusted earnings per diluted share $0.38 $0.41 (7.3)% Adjusted EBITDA $25,648 $27,172 (5.6)% Net sales were $197.8 million, a decrease of $30.3 million, or 13.3%, compared with $228.1 million for the third quarter of 2022. The decrease was the result of lower volume/mix and lower pricing in certain targeted areas in the Material Handling segment. Gross profit decreased $9.3 million, or 12.9% to $62.4 million, as the contribution from lower raw material costs was not enough to offset lower volumes and pricing. Gross margin expanded 10 basis points to 31.5% compared with 31.4% for the third quarter of 2022. Selling, general and administrative expenses decreased $8.1 million, or 15.6% to $43.7 million due to lower incentive compensation and facility costs. SG&A as a percentage of sales decreased to 22.1%, compared with 22.7% in the same period last year. Net income per diluted share was $0.34, compared with $0.37 for the third quarter of 2022. Adjusted earnings per diluted share were $0.38, compared with $0.41 for the third quarter of 2022. Third Quarter 2023 Segment Results (Dollar amounts in the segment tables below are reported in millions) Material Handling Net Sales Op Income Op Income Margin Adj EBITDA Adj EBITDA Margin Q3 2023 Results $132.5 $20.0 15.1% $25.1 19.0% Q3 2022 Results $155.7 $24.0 15.4% $28.4 18.3% $ Increase (decrease) vs prior year ($23.2) ($4.0) ($3.3) % Increase (decrease) vs prior year (14.9)% (16.6)% -30 bps (11.6)% +70 bps Items in this table may not recalculate due to rounding Net sales for the Material Handling segment were $132.5 million, a decrease of $23.2 million, or 14.9%, compared with $155.7 million for the third quarter of 2022. Net sales decreased in the vehicle, industrial, food & beverage and consumer end markets, with the greatest reduction in demand for RV products, construction products, and fuel container products, due in part to a slower hurricane season. Operating income decreased 16.6% to $20.0 million, compared with $24.0 million in the third quarter of 2022. Operating income margin decreased to 15.1% compared with 15.4% for the third quarter of 2022. Adjusted EBITDA margin improved by 70 basis points, primarily attributed to self-help initiatives, but partially dampened by a decrease in sales volume. Adjusted EBITDA decreased 11.6% to $25.1 million, compared with $28.4 million in the third quarter of 2022. Lower sales volume, pricing and an unfavorable mix more than offset lower raw material costs. SG&A expenses were lower year-over-year, primarily due to a decrease in facility costs and lower incentive compensation. Distribution Net Sales Op Income Op Income Margin Adj EBITDA Adj EBITDA Margin Q3 2023 Results $65.3 $5.0 7.6% $6.6 10.1% Q3 2022 Results $72.4 $4.9 6.8% $6.0 8.3% $ Increase (decrease) vs prior year ($7.1) $0.1 $0.6 % Increase (decrease) vs prior year (9.8)% 1.9% +80 bps 9.4% +180 bps Items in this table may not recalculate due to rounding Net sales for the Distribution segment were $65.3 million, a decrease of $7.1 million, or 9.8%, compared with $72.4 million for the third quarter of 2022. Operating income increased $0.1 million to $5.0 million, compared with $4.9 million for the third quarter of 2022. Adjusted EBITDA increased 9.4% to $6.6 million, compared with $6.0 million in the third quarter of 2022. The increase in operating income and adjusted EBITDA was primarily due to an increase in prices and lower product costs. The decrease in SG&A expenses was primarily the result of lower incentive compensation. The Distribution segment's operating income margin was 7.6% compared with 6.8% for the third quarter of 2022. The Distribution segment’s adjusted EBITDA margin was 10.1%, compared with 8.3% for the third quarter of 2022. The Distribution Segment continues to implement pricing actions to counter cost inflation and improve margin. Balance Sheet & Cash Flow As of September 30, 2023, the Company’s cash on hand totaled $24.8 million. Total debt as of September 30, 2023 was $69.3 million. For the third quarter of 2023, cash flow provided by operations was $22.1 million and free cash flow was $18.1 million, compared with cash flow provided by operations of $16.5 million and free cash flow of $9.8 million for the third quarter of 2022. The increase in cash flow was driven primarily by a decrease in working capital. Capital expenditures for the third quarter of 2023 were $4.1 million, compared with $6.7 million for the third quarter of 2022. 2023 Outlook Based on current exchange rates, market outlook, and business forecast, the Company revised its outlook for fiscal 2023, and currently forecasts: Net sales decline in the mid to high single digit range Net income per diluted share in the range of $1.20 to $1.28 Lowered adjusted earnings per diluted share range of $1.35 to $1.40 Capital expenditures to be in the range of $25 to $30 million Effective tax rate to approximate 25% Conference Call Details The Company will host an earnings conference call and webcast for investors and analysts on Wednesday, November 1, 2023, at 8:30 a.m. EDT. The call is anticipated to last less than one hour and may be accessed using the following online participation registration link: https://www.netroadshow.com/events/login?show=3cf4c0ee&confId=53778 . Upon registering, each participant will be provided with call details and a registrant ID. Reminders will also be sent to registered participants via email. Alternatively, the conference call will be available via a live webcast. To access the live webcast or a replay, visit the Company's website www.myersindustries.com and click on the Investor Relations tab. An archived replay of the call will also be available on the site shortly after the event. To listen to the telephone replay, callers should dial: (US Local) 1-929-458-6194 or (US Toll-Free) 1-866-813-9403. Use of Non-GAAP Financial Measures The Company uses certain non-GAAP measures in this release. Adjusted operating income (loss), adjusted operating income margin, adjusted earnings before interest, taxes, depreciation and amortization (EBITDA), adjusted EBITDA margin, adjusted net income, adjusted earnings per diluted share (adjusted EPS), and free cash flow are non-GAAP financial measures and are intended to serve as a supplement to results provided in accordance with accounting principles generally accepted in the United States. Myers Industries believes that such information provides an additional measurement and consistent historical comparison of the Company’s performance. A reconciliation of the non-GAAP financial measures to the most directly comparable GAAP measures is available in this news release. About Myers Industries Myers Industries, Inc. is a manufacturer of sustainable plastic and metal products for industrial, agricultural, automotive, commercial, and consumer markets. The Company is also the largest distributor of tools, equipment and supplies for the tire, wheel, and under-vehicle service industry in the United States. Visit www.myersindustries.com to learn more. Caution on Forward-Looking Statements Statements in this release include 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. Specific factors that could cause such a difference on our business, financial position, results of operations and/or liquidity include, without limitation, raw material availability, increases in raw material costs, or other production costs; risks associated with our strategic growth initiatives or the failure to achieve the anticipated benefits of such initiatives; unanticipated downturn in business relationships with customers or their purchases; competitive pressures on sales and pricing; changes in the markets for the Company’s business segments; changes in trends and demands in the markets in which the Company competes; operational problems at our manufacturing facilities or unexpected failures at those facilities; future economic and financial conditions in the United States and around the world; inability of the Company to meet future capital requirements; claims, litigation and regulatory actions against the Company; changes in laws and regulations affecting the Company; impacts from the novel coronavirus (“COVID-19”) pandemic; and other risks and uncertainties detailed from time to time in the Company’s filings with the SEC, including without limitation, the risk factors disclosed in Item 1A, “Risk Factors,” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022. Given these factors, as well as other variables that may affect our operating results, readers should not rely on forward-looking statements, assume that past financial performance will be a reliable indicator of future performance, nor use historical trends to anticipate results or trends in future periods. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date thereof. The Company expressly disclaims any obligation or intention to provide updates to the forward-looking statements and the estimates and assumptions associated with them. M-INV MYERS INDUSTRIES, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) (Dollars in thousands, except share and per share data) Quarter Ended Nine Months Ended September 30, 2023 September 30, 2022 September 30, 2023 September 30, 2022 Net sales $ 197,798 $ 228,065 $ 621,990 $ 686,707 Cost of sales 135,419 156,417 420,136 468,415 Gross profit 62,379 71,648 201,854 218,292 Selling, general and administrative expenses 43,698 51,756 148,130 152,066 (Gain) loss on disposal of fixed assets (22 ) (5 ) (78 ) (693 ) Operating income (loss) 18,703 19,897 53,802 66,919 Interest expense, net 1,539 1,719 4,975 4,077 Income (loss) before income taxes 17,164 18,178 48,827 62,842 Income tax expense (benefit) 4,417 4,507 12,499 16,003 Net income (loss) $ 12,747 $ 13,671 $ 36,328 $ 46,839 Net income (loss) per common share: Basic $ 0.35 $ 0.37 $ 0.99 $ 1.29 Diluted $ 0.34 $ 0.37 $ 0.98 $ 1.28 Weighted average common shares outstanding: Basic 36,811,296 36,472,378 36,712,662 36,383,398 Diluted 36,979,880 36,717,153 36,972,384 36,678,955 MYERS INDUSTRIES, INC. CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (UNAUDITED) (Dollars in thousands) September 30, 2023 December 31, 2022 Assets Current Assets Cash $ 24,768 $ 23,139 Accounts receivable, net 117,362 133,716 Inventories, net 96,230 93,351 Other current assets 9,051 7,001 Total Current Assets 247,411 257,207 Property, plant, & equipment, net 106,936 101,566 Right of use asset - operating leases 27,384 28,908 Deferred income taxes 129 129 Other assets 149,261 154,824 Total Assets $ 531,121 $ 542,634 Liabilities & Shareholders' Equity Current Liabilities Accounts payable $ 80,760 $ 73,536 Accrued expenses 50,940 57,531 Operating lease liability - short-term 5,604 6,177 Finance lease liability - short-term 581 518 Long-term debt - current portion 25,994 — Total Current Liabilities 163,879 137,762 Long-term debt 33,987 93,962 Operating lease liability - long-term 22,023 22,786 Finance lease liability - long-term 8,766 8,919 Other liabilities 10,284 15,270 Deferred income taxes 9,961 7,508 Total Shareholders' Equity 282,221 256,427 Total Liabilities & Shareholders' Equity $ 531,121 $ 542,634 MYERS INDUSTRIES, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (Dollars in thousands) Quarter Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Cash Flows From Operating Activities Net income $ 12,747 $ 13,671 $ 36,328 $ 46,839 Adjustments to reconcile net income to net cash provided by (used for) operating activities Depreciation and amortization 5,609 5,159 16,904 15,600 Amortization of deferred financing costs 78 121 234 363 Non-cash stock-based compensation expense 686 1,308 5,078 5,168 (Gain) loss on disposal of fixed assets (22 ) (5 ) (78 ) (693 ) Other (19 ) (406 ) 2,473 292 Cash flows provided by (used for) working capital Accounts receivable (1,332 ) 2,449 13,764 (18,751 ) Inventories 1,825 243 (2,905 ) (7,016 ) Prepaid expenses and other current assets 1,775 790 (2,053 ) (4,912 ) Accounts payable and accrued expenses 787 (6,870 ) 1,027 13,869 Net cash provided by (used for) operating activities 22,134 16,460 70,772 50,759 Cash Flows From Investing Activities Capital expenditures (4,076 ) (6,672 ) (19,292 ) (17,615 ) Acquisition of business, net of cash acquired — — (160 ) (24,253 ) Proceeds from sale of property, plant, and equipment — 26 142 1,525 Net cash provided by (used for) investing activities (4,076 ) (6,646 ) (19,310 ) (40,343 ) Cash Flows From Financing Activities Net borrowings (repayments) from revolving credit facility (19,000 ) (6,000 ) (34,000 ) 7,000 Payments on finance lease (145 ) (125 ) (403 ) (374 ) Cash dividends paid (4,970 ) (4,938 ) (15,266 ) (14,872 ) Proceeds from issuance of common stock 379 221 1,948 2,059 Shares withheld for employee taxes on equity awards (22 ) (103 ) (2,055 ) (450 ) Deferred financing fees — (718 ) — (718 ) Net cash provided by (used for) financing activities (23,758 ) (11,663 ) (49,776 ) (7,355 ) Foreign exchange rate effect on cash (224 ) (161 ) (57 ) (292 ) Net increase (decrease) in cash (5,924 ) (2,010 ) 1,629 2,769 Beginning Cash 30,692 22,434 23,139 17,655 Ending Cash $ 24,768 $ 20,424 $ 24,768 $ 20,424 MYERS INDUSTRIES, INC. RECONCILIATION OF NON-GAAP FINANCIAL MEASURES GROSS PROFIT, OPERATING INCOME AND EBITDA (UNAUDITED) (Dollars in thousands) Quarter Ended September 30, 2023 Material Handling Distribution Segment Total Corporate & Other Total Net sales $ 132,484 $ 65,335 $ 197,819 $ (21 ) $ 197,798 Net income 12,747 Net income margin 6.4 % Gross profit 62,379 Add: Restructuring expenses and other adjustments 307 Adjusted gross profit 62,686 Gross margin as adjusted 31.7 % Operating income (loss) 19,978 4,993 24,971 (6,268 ) 18,703 Operating income margin 15.1 % 7.6 % 12.6 % n/a 9.5 % Add: Restructuring expenses and other adjustments 529 674 1,203 156 1,359 Add: Acquisition and integration costs — 77 77 — 77 Less: Environmental reserves, net(2) — — — (100 ) (100 ) Adjusted operating income (loss)(1) 20,507 5,744 26,251 (6,212 ) 20,039 Adjusted operating income margin 15.5 % 8.8 % 13.3 % n/a 10.1 % Add: Depreciation and amortization 4,641 842 5,483 126 5,609 Adjusted EBITDA $ 25,148 $ 6,586 $ 31,734 $ (6,086 ) $ 25,648 Adjusted EBITDA margin 19.0 % 10.1 % 16.0 % n/a 13.0 % (1) Includes gross profit adjustments of $307 and SG&A adjustments of $1,029 (2) Includes environmental charges of $300 net of probable insurance recoveries of $400 Quarter Ended September 30, 2022 Material Handling Distribution Segment Total Corporate & Other Total Net sales $ 155,658 $ 72,416 $ 228,074 $ (9 ) $ 228,065 Net income 13,671 Net income margin 6.0 % Gross profit 71,648 Add: Restructuring expenses and other adjustments 260 Adjusted gross profit 71,908 Gross margin as adjusted 31.5 % Operating income (loss) 23,962 4,899 28,861 (8,964 ) 19,897 Operating income margin 15.4 % 6.8 % 12.7 % n/a 8.7 % Add: Restructuring expenses and other adjustments 260 — 260 — 260 Add: Acquisition and integration costs — 271 271 85 356 Add: Environmental reserves, net(2) — — — 1,500 1,500 Adjusted operating income (loss)(1) 24,222 5,170 29,392 (7,379 ) 22,013 Adjusted operating income margin 15.6 % 7.1 % 12.9 % n/a 9.7 % Add: Depreciation and amortization 4,215 851 5,066 93 5,159 Adjusted EBITDA $ 28,437 $ 6,021 $ 34,458 $ (7,286 ) $ 27,172 Adjusted EBITDA margin 18.3 % 8.3 % 15.1 % n/a 11.9 % (1) Includes gross profit adjustments of $260 and SG&A adjustments of $1,856 (2) Includes environmental charges of $1,500 net of probable insurance recoveries of $0 MYERS INDUSTRIES, INC. RECONCILIATION OF NON-GAAP FINANCIAL MEASURES GROSS PROFIT, OPERATING INCOME AND EBITDA (UNAUDITED) (Dollars in thousands) Nine Months Ended September 30, 2023 Material Handling Distribution Segment Total Corporate & Other Total Net sales $ 428,341 $ 193,693 $ 622,034 $ (44 ) $ 621,990 Net income 36,328 Net income margin 5.8 % Gross profit 201,854 Add: Restructuring expenses and other adjustments 589 Adjusted gross profit 202,443 Gross margin as adjusted 32.5 % Operating income (loss) 70,157 10,628 80,785 (26,983 ) 53,802 Operating income margin 16.4 % 5.5 % 13.0 % n/a 8.6 % Add: Executive severance costs — 410 410 289 699 Add: Restructuring expenses and other adjustments 1,225 853 2,078 166 2,244 Add: Acquisition and integration costs — 297 297 126 423 Add: Environmental reserves, net(2) — — — 2,200 2,200 Adjusted operating income (loss)(1) 71,382 12,188 83,570 (24,202 ) 59,368 Adjusted operating income margin 16.7 % 6.3 % 13.4 % n/a 9.5 % Add: Depreciation and amortization 13,995 2,505 16,500 404 16,904 Adjusted EBITDA $ 85,377 $ 14,693 $ 100,070 $ (23,798 ) $ 76,272 Adjusted EBITDA margin 19.9 % 7.6 % 16.1 % n/a 12.3 % (1) Includes gross profit adjustments of $589 and SG&A adjustments of $4,977 (2) Includes environmental charges of $3,800 net of probable insurance recoveries of $1,600 Nine Months Ended September 30, 2022 Material Handling Distribution Segment Total Corporate & Other Total Net sales $ 505,384 $ 181,352 $ 686,736 $ (29 ) $ 686,707 Net income 46,839 Net income margin 6.8 % Gross profit 218,292 Add: Restructuring expenses and other adjustments 650 Adjusted gross profit 218,942 Gross margin as adjusted 31.9 % Operating income (loss) 83,216 12,469 95,685 (28,766 ) 66,919 Operating income margin 16.5 % 6.9 % 13.9 % n/a 9.7 % Add: Restructuring expenses and other adjustments 650 — 650 — 650 Add: Acquisition and integration costs — 271 271 561 832 Add: Loss on sale of assets 261 — 261 — 261 Add: Environmental reserves, net(2) — — — 2,800 2,800 Adjusted operating income (loss)(1) 84,127 12,740 96,867 (25,405 ) 71,462 Adjusted operating income margin 16.6 % 7.0 % 14.1 % n/a 10.4 % Add: Depreciation and amortization 13,239 2,029 15,268 332 15,600 Adjusted EBITDA $ 97,366 $ 14,769 $ 112,135 $ (25,073 ) $ 87,062 Adjusted EBITDA margin 19.3 % 8.1 % 16.3 % n/a 12.7 % (1) Includes gross profit adjustments of $650 and SG&A adjustments of $3,893 (2) Includes environmental charges of $2,800 net of probable insurance recoveries of $0 MYERS INDUSTRIES, INC. RECONCILIATION OF NON-GAAP FINANCIAL MEASURES ADJUSTED OPERATING INCOME, ADJUSTED EBITDA AND FREE CASH FLOW (UNAUDITED) (Dollars in thousands, except per share data) Quarter Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Adjusted operating income (loss) reconciliation: Operating income (loss) $ 18,703 $ 19,897 $ 53,802 $ 66,919 Executive severance costs — — 699 — Restructuring expenses and other adjustments 1,359 260 2,244 650 Acquisition and integration costs 77 356 423 832 Loss on sale of assets — — — 261 Environmental reserves, net (100 ) 1,500 2,200 2,800 Adjusted operating income (loss) $ 20,039 $ 22,013 $ 59,368 $ 71,462 Adjusted EBITDA reconciliation: Net income (loss) $ 12,747 $ 13,671 $ 36,328 $ 46,839 Income tax expense (benefit) 4,417 4,507 12,499 16,003 Interest expense, net 1,539 1,719 4,975 4,077 Operating income (loss) 18,703 19,897 53,802 66,919 Depreciation and amortization 5,609 5,159 16,904 15,600 Executive severance costs — — 699 — Restructuring expenses and other adjustments 1,359 260 2,244 650 Acquisition and integration costs 77 356 423 832 Loss on sale of assets — — — 261 Environmental reserves, net (100 ) 1,500 2,200 2,800 Adjusted EBITDA $ 25,648 $ 27,172 $ 76,272 $ 87,062 Free cash flow reconciliation: Net cash provided by (used for) operating activities $ 22,134 $ 16,460 $ 70,772 $ 50,759 Capital expenditures (4,076 ) (6,672 ) (19,292 ) (17,615 ) Free cash flow $ 18,058 $ 9,788 $ 51,480 $ 33,144 MYERS INDUSTRIES, INC. RECONCILIATION OF NON-GAAP FINANCIAL MEASURES ADJUSTED NET INCOME AND ADJUSTED EARNINGS PER DILUTED SHARE (UNAUDITED) (Dollars in thousands, except per share data) Quarter Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Adjusted net income (loss) reconciliation: Net income (loss) $ 12,747 $ 13,671 $ 36,328 $ 46,839 Income tax expense (benefit) 4,417 4,507 12,499 16,003 Income (loss) before income taxes 17,164 18,178 48,827 62,842 Executive severance costs — — 699 — Restructuring expenses and other adjustments 1,359 260 2,244 650 Acquisition and integration costs 77 356 423 832 Loss on sale of assets — — — 261 Environmental reserves, net (100 ) 1,500 2,200 2,800 Adjusted income (loss) before income taxes 18,500 20,294 54,393 67,385 Income tax expense, as adjusted (1) (4,625 ) (5,276 ) (13,598 ) (17,520 ) Adjusted net income (loss) $ 13,875 $ 15,018 $ 40,795 $ 49,865 Adjusted earnings per diluted share reconciliation: Net income (loss) per common diluted share $ 0.34 $ 0.37 $ 0.98 $ 1.28 Executive severance costs — — 0.02 — Restructuring expenses and other adjustments 0.04 0.01 0.06 0.02 Acquisition and integration costs 0.00 0.01 0.01 0.02 Loss on sale of assets — — — 0.01 Environmental reserves, net (0.00 ) 0.04 0.06 0.08 Adjusted effective income tax rate impact (0.01 ) (0.02 ) (0.03 ) (0.04 ) Adjusted earnings per diluted share(2) $ 0.38 $ 0.41 $ 1.10 $ 1.36 Items in this table may not recalculate due to rounding (1) Income taxes are calculated using the normalized effective tax rate for each year. The rate used in 2023 is 25% and in 2022 is 26%. (2) Adjusted earnings per diluted share is calculated using the weighted average common shares outstanding for the respective period. MYERS INDUSTRIES, INC. RECONCILIATION OF NON-GAAP FINANCIAL MEASURES GUIDANCE FOR FULL YEAR ADJUSTED EARNINGS PER DILUTED SHARE (UNAUDITED) Full Year 2023 Guidance Low High GAAP diluted net income per common share $ 1.20 $ 1.28 Add: Executive severance costs 0.02 0.02 Add: Net restructuring expenses and other adjustments 0.11 0.07 Add: Acquisition and integration costs 0.01 0.01 Add: Environmental reserves, net 0.06 0.06 Less: Adjusted effective income tax rate impact (1) (0.05 ) (0.04 ) Adjusted earnings per diluted share (2) $ 1.35 $ 1.40 (1) Income taxes are calculated using the normalized effective tax rate for each year. The rate used in 2023 is 25%. (2) Adjusted earnings per diluted share is calculated using the weighted average common shares outstanding. View source version on businesswire.com: https://www.businesswire.com/news/home/20231101721364/en/Contacts Rich Pasela, Manager, Investor Relations and Treasury, 330-761-6284 Data & News supplied by www.cloudquote.io Stock quotes supplied by Barchart Quotes delayed at least 20 minutes. By accessing this page, you agree to the following Privacy Policy and Terms and Conditions.
Myers Industries Announces Third Quarter 2023 Results By: Myers Industries, Inc. via Business Wire November 01, 2023 at 06:30 AM EDT Further Implementation of Myers Business System Supports Gross Margin Expansion Improving Balance Sheet Strength with Additional Debt Reduction Myers Industries, Inc. (NYSE: MYE), a leading manufacturer of a wide range of polymer and metal products and distributor for the tire, wheel, and under-vehicle service industry, today announced results for the third quarter ended September 30, 2023. Third Quarter 2023 Financial Highlights Net sales of $197.8 million compared to $228.1 million in the prior year period Gross margin of 31.5%, up 10 basis points versus the prior year period GAAP net income per diluted share of $0.34 compared to $0.37 in the prior year period Adjusted earnings per diluted share of $0.38 compared to $0.41 in the prior year period Cash flow provided by operations was $22.1 million and free cash flow was $18.1 million Myers Industries’ President and CEO Mike McGaugh said "In the third quarter, we continue to see the real value of the Myers Business System in driving strong business results, in-spite of continued significant revenue headwinds in several of our key markets. We are managing our business well, as we expanded year-over-year adjusted gross margin for the seventh consecutive quarter while also expanding adjusted EBITDA margin and generating healthy cash flows. These results are strong indications that our Myers Business System and our other self-help initiatives continue to deliver solid results. During the period we saw weakness within our consumer-facing verticals and a less active hurricane season year over year, both of which adversely affected our Material Handling segment. Our Distribution segment posted improved profitability and remains well positioned to capitalize on anticipated longer-term market tailwinds in the tire repair industry. We are keenly focused on protecting profitability by improving our cost structures across both segments as we continue to make investments for the future. We are optimizing our plants in aligning capacity to consistently match production levels, controlling costs, and driving new commercial excellence programs. Through these dedicated efforts, we lessened the total impact of current headwinds, allowing for the Company to continue progressing against its long-term strategic and financial objectives." McGaugh continued “During the quarter, we generated elevated levels of free cash flow, which allowed us to further strengthen our balance sheet and pay down debt. We will continue to evaluate a number of opportunities within our M&A pipeline and will opportunistically deploy capital towards attractive growth opportunities when they make strategic sense. We look forward to driving future shareholder value through strong execution against our long-term growth strategy and by maintaining strong profitability through all economic conditions.” Third Quarter 2023 Financial Summary Quarter Ended September 30, (Dollars in thousands, except per share data) 2023 2022 % Inc (Dec) Net sales $197,798 $228,065 (13.3)% Gross profit $62,379 $71,648 (12.9)% Gross margin 31.5% 31.4% Operating income $18,703 $19,897 (6.0)% Net income $12,747 $13,671 (6.8)% Net income per diluted share $0.34 $0.37 (8.1)% Adjusted operating income $20,039 $22,013 (9.0)% Adjusted net income $13,875 $15,018 (7.6)% Adjusted earnings per diluted share $0.38 $0.41 (7.3)% Adjusted EBITDA $25,648 $27,172 (5.6)% Net sales were $197.8 million, a decrease of $30.3 million, or 13.3%, compared with $228.1 million for the third quarter of 2022. The decrease was the result of lower volume/mix and lower pricing in certain targeted areas in the Material Handling segment. Gross profit decreased $9.3 million, or 12.9% to $62.4 million, as the contribution from lower raw material costs was not enough to offset lower volumes and pricing. Gross margin expanded 10 basis points to 31.5% compared with 31.4% for the third quarter of 2022. Selling, general and administrative expenses decreased $8.1 million, or 15.6% to $43.7 million due to lower incentive compensation and facility costs. SG&A as a percentage of sales decreased to 22.1%, compared with 22.7% in the same period last year. Net income per diluted share was $0.34, compared with $0.37 for the third quarter of 2022. Adjusted earnings per diluted share were $0.38, compared with $0.41 for the third quarter of 2022. Third Quarter 2023 Segment Results (Dollar amounts in the segment tables below are reported in millions) Material Handling Net Sales Op Income Op Income Margin Adj EBITDA Adj EBITDA Margin Q3 2023 Results $132.5 $20.0 15.1% $25.1 19.0% Q3 2022 Results $155.7 $24.0 15.4% $28.4 18.3% $ Increase (decrease) vs prior year ($23.2) ($4.0) ($3.3) % Increase (decrease) vs prior year (14.9)% (16.6)% -30 bps (11.6)% +70 bps Items in this table may not recalculate due to rounding Net sales for the Material Handling segment were $132.5 million, a decrease of $23.2 million, or 14.9%, compared with $155.7 million for the third quarter of 2022. Net sales decreased in the vehicle, industrial, food & beverage and consumer end markets, with the greatest reduction in demand for RV products, construction products, and fuel container products, due in part to a slower hurricane season. Operating income decreased 16.6% to $20.0 million, compared with $24.0 million in the third quarter of 2022. Operating income margin decreased to 15.1% compared with 15.4% for the third quarter of 2022. Adjusted EBITDA margin improved by 70 basis points, primarily attributed to self-help initiatives, but partially dampened by a decrease in sales volume. Adjusted EBITDA decreased 11.6% to $25.1 million, compared with $28.4 million in the third quarter of 2022. Lower sales volume, pricing and an unfavorable mix more than offset lower raw material costs. SG&A expenses were lower year-over-year, primarily due to a decrease in facility costs and lower incentive compensation. Distribution Net Sales Op Income Op Income Margin Adj EBITDA Adj EBITDA Margin Q3 2023 Results $65.3 $5.0 7.6% $6.6 10.1% Q3 2022 Results $72.4 $4.9 6.8% $6.0 8.3% $ Increase (decrease) vs prior year ($7.1) $0.1 $0.6 % Increase (decrease) vs prior year (9.8)% 1.9% +80 bps 9.4% +180 bps Items in this table may not recalculate due to rounding Net sales for the Distribution segment were $65.3 million, a decrease of $7.1 million, or 9.8%, compared with $72.4 million for the third quarter of 2022. Operating income increased $0.1 million to $5.0 million, compared with $4.9 million for the third quarter of 2022. Adjusted EBITDA increased 9.4% to $6.6 million, compared with $6.0 million in the third quarter of 2022. The increase in operating income and adjusted EBITDA was primarily due to an increase in prices and lower product costs. The decrease in SG&A expenses was primarily the result of lower incentive compensation. The Distribution segment's operating income margin was 7.6% compared with 6.8% for the third quarter of 2022. The Distribution segment’s adjusted EBITDA margin was 10.1%, compared with 8.3% for the third quarter of 2022. The Distribution Segment continues to implement pricing actions to counter cost inflation and improve margin. Balance Sheet & Cash Flow As of September 30, 2023, the Company’s cash on hand totaled $24.8 million. Total debt as of September 30, 2023 was $69.3 million. For the third quarter of 2023, cash flow provided by operations was $22.1 million and free cash flow was $18.1 million, compared with cash flow provided by operations of $16.5 million and free cash flow of $9.8 million for the third quarter of 2022. The increase in cash flow was driven primarily by a decrease in working capital. Capital expenditures for the third quarter of 2023 were $4.1 million, compared with $6.7 million for the third quarter of 2022. 2023 Outlook Based on current exchange rates, market outlook, and business forecast, the Company revised its outlook for fiscal 2023, and currently forecasts: Net sales decline in the mid to high single digit range Net income per diluted share in the range of $1.20 to $1.28 Lowered adjusted earnings per diluted share range of $1.35 to $1.40 Capital expenditures to be in the range of $25 to $30 million Effective tax rate to approximate 25% Conference Call Details The Company will host an earnings conference call and webcast for investors and analysts on Wednesday, November 1, 2023, at 8:30 a.m. EDT. The call is anticipated to last less than one hour and may be accessed using the following online participation registration link: https://www.netroadshow.com/events/login?show=3cf4c0ee&confId=53778 . Upon registering, each participant will be provided with call details and a registrant ID. Reminders will also be sent to registered participants via email. Alternatively, the conference call will be available via a live webcast. To access the live webcast or a replay, visit the Company's website www.myersindustries.com and click on the Investor Relations tab. An archived replay of the call will also be available on the site shortly after the event. To listen to the telephone replay, callers should dial: (US Local) 1-929-458-6194 or (US Toll-Free) 1-866-813-9403. Use of Non-GAAP Financial Measures The Company uses certain non-GAAP measures in this release. Adjusted operating income (loss), adjusted operating income margin, adjusted earnings before interest, taxes, depreciation and amortization (EBITDA), adjusted EBITDA margin, adjusted net income, adjusted earnings per diluted share (adjusted EPS), and free cash flow are non-GAAP financial measures and are intended to serve as a supplement to results provided in accordance with accounting principles generally accepted in the United States. Myers Industries believes that such information provides an additional measurement and consistent historical comparison of the Company’s performance. A reconciliation of the non-GAAP financial measures to the most directly comparable GAAP measures is available in this news release. About Myers Industries Myers Industries, Inc. is a manufacturer of sustainable plastic and metal products for industrial, agricultural, automotive, commercial, and consumer markets. The Company is also the largest distributor of tools, equipment and supplies for the tire, wheel, and under-vehicle service industry in the United States. Visit www.myersindustries.com to learn more. Caution on Forward-Looking Statements Statements in this release include 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. Specific factors that could cause such a difference on our business, financial position, results of operations and/or liquidity include, without limitation, raw material availability, increases in raw material costs, or other production costs; risks associated with our strategic growth initiatives or the failure to achieve the anticipated benefits of such initiatives; unanticipated downturn in business relationships with customers or their purchases; competitive pressures on sales and pricing; changes in the markets for the Company’s business segments; changes in trends and demands in the markets in which the Company competes; operational problems at our manufacturing facilities or unexpected failures at those facilities; future economic and financial conditions in the United States and around the world; inability of the Company to meet future capital requirements; claims, litigation and regulatory actions against the Company; changes in laws and regulations affecting the Company; impacts from the novel coronavirus (“COVID-19”) pandemic; and other risks and uncertainties detailed from time to time in the Company’s filings with the SEC, including without limitation, the risk factors disclosed in Item 1A, “Risk Factors,” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022. Given these factors, as well as other variables that may affect our operating results, readers should not rely on forward-looking statements, assume that past financial performance will be a reliable indicator of future performance, nor use historical trends to anticipate results or trends in future periods. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date thereof. The Company expressly disclaims any obligation or intention to provide updates to the forward-looking statements and the estimates and assumptions associated with them. M-INV MYERS INDUSTRIES, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) (Dollars in thousands, except share and per share data) Quarter Ended Nine Months Ended September 30, 2023 September 30, 2022 September 30, 2023 September 30, 2022 Net sales $ 197,798 $ 228,065 $ 621,990 $ 686,707 Cost of sales 135,419 156,417 420,136 468,415 Gross profit 62,379 71,648 201,854 218,292 Selling, general and administrative expenses 43,698 51,756 148,130 152,066 (Gain) loss on disposal of fixed assets (22 ) (5 ) (78 ) (693 ) Operating income (loss) 18,703 19,897 53,802 66,919 Interest expense, net 1,539 1,719 4,975 4,077 Income (loss) before income taxes 17,164 18,178 48,827 62,842 Income tax expense (benefit) 4,417 4,507 12,499 16,003 Net income (loss) $ 12,747 $ 13,671 $ 36,328 $ 46,839 Net income (loss) per common share: Basic $ 0.35 $ 0.37 $ 0.99 $ 1.29 Diluted $ 0.34 $ 0.37 $ 0.98 $ 1.28 Weighted average common shares outstanding: Basic 36,811,296 36,472,378 36,712,662 36,383,398 Diluted 36,979,880 36,717,153 36,972,384 36,678,955 MYERS INDUSTRIES, INC. CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (UNAUDITED) (Dollars in thousands) September 30, 2023 December 31, 2022 Assets Current Assets Cash $ 24,768 $ 23,139 Accounts receivable, net 117,362 133,716 Inventories, net 96,230 93,351 Other current assets 9,051 7,001 Total Current Assets 247,411 257,207 Property, plant, & equipment, net 106,936 101,566 Right of use asset - operating leases 27,384 28,908 Deferred income taxes 129 129 Other assets 149,261 154,824 Total Assets $ 531,121 $ 542,634 Liabilities & Shareholders' Equity Current Liabilities Accounts payable $ 80,760 $ 73,536 Accrued expenses 50,940 57,531 Operating lease liability - short-term 5,604 6,177 Finance lease liability - short-term 581 518 Long-term debt - current portion 25,994 — Total Current Liabilities 163,879 137,762 Long-term debt 33,987 93,962 Operating lease liability - long-term 22,023 22,786 Finance lease liability - long-term 8,766 8,919 Other liabilities 10,284 15,270 Deferred income taxes 9,961 7,508 Total Shareholders' Equity 282,221 256,427 Total Liabilities & Shareholders' Equity $ 531,121 $ 542,634 MYERS INDUSTRIES, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (Dollars in thousands) Quarter Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Cash Flows From Operating Activities Net income $ 12,747 $ 13,671 $ 36,328 $ 46,839 Adjustments to reconcile net income to net cash provided by (used for) operating activities Depreciation and amortization 5,609 5,159 16,904 15,600 Amortization of deferred financing costs 78 121 234 363 Non-cash stock-based compensation expense 686 1,308 5,078 5,168 (Gain) loss on disposal of fixed assets (22 ) (5 ) (78 ) (693 ) Other (19 ) (406 ) 2,473 292 Cash flows provided by (used for) working capital Accounts receivable (1,332 ) 2,449 13,764 (18,751 ) Inventories 1,825 243 (2,905 ) (7,016 ) Prepaid expenses and other current assets 1,775 790 (2,053 ) (4,912 ) Accounts payable and accrued expenses 787 (6,870 ) 1,027 13,869 Net cash provided by (used for) operating activities 22,134 16,460 70,772 50,759 Cash Flows From Investing Activities Capital expenditures (4,076 ) (6,672 ) (19,292 ) (17,615 ) Acquisition of business, net of cash acquired — — (160 ) (24,253 ) Proceeds from sale of property, plant, and equipment — 26 142 1,525 Net cash provided by (used for) investing activities (4,076 ) (6,646 ) (19,310 ) (40,343 ) Cash Flows From Financing Activities Net borrowings (repayments) from revolving credit facility (19,000 ) (6,000 ) (34,000 ) 7,000 Payments on finance lease (145 ) (125 ) (403 ) (374 ) Cash dividends paid (4,970 ) (4,938 ) (15,266 ) (14,872 ) Proceeds from issuance of common stock 379 221 1,948 2,059 Shares withheld for employee taxes on equity awards (22 ) (103 ) (2,055 ) (450 ) Deferred financing fees — (718 ) — (718 ) Net cash provided by (used for) financing activities (23,758 ) (11,663 ) (49,776 ) (7,355 ) Foreign exchange rate effect on cash (224 ) (161 ) (57 ) (292 ) Net increase (decrease) in cash (5,924 ) (2,010 ) 1,629 2,769 Beginning Cash 30,692 22,434 23,139 17,655 Ending Cash $ 24,768 $ 20,424 $ 24,768 $ 20,424 MYERS INDUSTRIES, INC. RECONCILIATION OF NON-GAAP FINANCIAL MEASURES GROSS PROFIT, OPERATING INCOME AND EBITDA (UNAUDITED) (Dollars in thousands) Quarter Ended September 30, 2023 Material Handling Distribution Segment Total Corporate & Other Total Net sales $ 132,484 $ 65,335 $ 197,819 $ (21 ) $ 197,798 Net income 12,747 Net income margin 6.4 % Gross profit 62,379 Add: Restructuring expenses and other adjustments 307 Adjusted gross profit 62,686 Gross margin as adjusted 31.7 % Operating income (loss) 19,978 4,993 24,971 (6,268 ) 18,703 Operating income margin 15.1 % 7.6 % 12.6 % n/a 9.5 % Add: Restructuring expenses and other adjustments 529 674 1,203 156 1,359 Add: Acquisition and integration costs — 77 77 — 77 Less: Environmental reserves, net(2) — — — (100 ) (100 ) Adjusted operating income (loss)(1) 20,507 5,744 26,251 (6,212 ) 20,039 Adjusted operating income margin 15.5 % 8.8 % 13.3 % n/a 10.1 % Add: Depreciation and amortization 4,641 842 5,483 126 5,609 Adjusted EBITDA $ 25,148 $ 6,586 $ 31,734 $ (6,086 ) $ 25,648 Adjusted EBITDA margin 19.0 % 10.1 % 16.0 % n/a 13.0 % (1) Includes gross profit adjustments of $307 and SG&A adjustments of $1,029 (2) Includes environmental charges of $300 net of probable insurance recoveries of $400 Quarter Ended September 30, 2022 Material Handling Distribution Segment Total Corporate & Other Total Net sales $ 155,658 $ 72,416 $ 228,074 $ (9 ) $ 228,065 Net income 13,671 Net income margin 6.0 % Gross profit 71,648 Add: Restructuring expenses and other adjustments 260 Adjusted gross profit 71,908 Gross margin as adjusted 31.5 % Operating income (loss) 23,962 4,899 28,861 (8,964 ) 19,897 Operating income margin 15.4 % 6.8 % 12.7 % n/a 8.7 % Add: Restructuring expenses and other adjustments 260 — 260 — 260 Add: Acquisition and integration costs — 271 271 85 356 Add: Environmental reserves, net(2) — — — 1,500 1,500 Adjusted operating income (loss)(1) 24,222 5,170 29,392 (7,379 ) 22,013 Adjusted operating income margin 15.6 % 7.1 % 12.9 % n/a 9.7 % Add: Depreciation and amortization 4,215 851 5,066 93 5,159 Adjusted EBITDA $ 28,437 $ 6,021 $ 34,458 $ (7,286 ) $ 27,172 Adjusted EBITDA margin 18.3 % 8.3 % 15.1 % n/a 11.9 % (1) Includes gross profit adjustments of $260 and SG&A adjustments of $1,856 (2) Includes environmental charges of $1,500 net of probable insurance recoveries of $0 MYERS INDUSTRIES, INC. RECONCILIATION OF NON-GAAP FINANCIAL MEASURES GROSS PROFIT, OPERATING INCOME AND EBITDA (UNAUDITED) (Dollars in thousands) Nine Months Ended September 30, 2023 Material Handling Distribution Segment Total Corporate & Other Total Net sales $ 428,341 $ 193,693 $ 622,034 $ (44 ) $ 621,990 Net income 36,328 Net income margin 5.8 % Gross profit 201,854 Add: Restructuring expenses and other adjustments 589 Adjusted gross profit 202,443 Gross margin as adjusted 32.5 % Operating income (loss) 70,157 10,628 80,785 (26,983 ) 53,802 Operating income margin 16.4 % 5.5 % 13.0 % n/a 8.6 % Add: Executive severance costs — 410 410 289 699 Add: Restructuring expenses and other adjustments 1,225 853 2,078 166 2,244 Add: Acquisition and integration costs — 297 297 126 423 Add: Environmental reserves, net(2) — — — 2,200 2,200 Adjusted operating income (loss)(1) 71,382 12,188 83,570 (24,202 ) 59,368 Adjusted operating income margin 16.7 % 6.3 % 13.4 % n/a 9.5 % Add: Depreciation and amortization 13,995 2,505 16,500 404 16,904 Adjusted EBITDA $ 85,377 $ 14,693 $ 100,070 $ (23,798 ) $ 76,272 Adjusted EBITDA margin 19.9 % 7.6 % 16.1 % n/a 12.3 % (1) Includes gross profit adjustments of $589 and SG&A adjustments of $4,977 (2) Includes environmental charges of $3,800 net of probable insurance recoveries of $1,600 Nine Months Ended September 30, 2022 Material Handling Distribution Segment Total Corporate & Other Total Net sales $ 505,384 $ 181,352 $ 686,736 $ (29 ) $ 686,707 Net income 46,839 Net income margin 6.8 % Gross profit 218,292 Add: Restructuring expenses and other adjustments 650 Adjusted gross profit 218,942 Gross margin as adjusted 31.9 % Operating income (loss) 83,216 12,469 95,685 (28,766 ) 66,919 Operating income margin 16.5 % 6.9 % 13.9 % n/a 9.7 % Add: Restructuring expenses and other adjustments 650 — 650 — 650 Add: Acquisition and integration costs — 271 271 561 832 Add: Loss on sale of assets 261 — 261 — 261 Add: Environmental reserves, net(2) — — — 2,800 2,800 Adjusted operating income (loss)(1) 84,127 12,740 96,867 (25,405 ) 71,462 Adjusted operating income margin 16.6 % 7.0 % 14.1 % n/a 10.4 % Add: Depreciation and amortization 13,239 2,029 15,268 332 15,600 Adjusted EBITDA $ 97,366 $ 14,769 $ 112,135 $ (25,073 ) $ 87,062 Adjusted EBITDA margin 19.3 % 8.1 % 16.3 % n/a 12.7 % (1) Includes gross profit adjustments of $650 and SG&A adjustments of $3,893 (2) Includes environmental charges of $2,800 net of probable insurance recoveries of $0 MYERS INDUSTRIES, INC. RECONCILIATION OF NON-GAAP FINANCIAL MEASURES ADJUSTED OPERATING INCOME, ADJUSTED EBITDA AND FREE CASH FLOW (UNAUDITED) (Dollars in thousands, except per share data) Quarter Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Adjusted operating income (loss) reconciliation: Operating income (loss) $ 18,703 $ 19,897 $ 53,802 $ 66,919 Executive severance costs — — 699 — Restructuring expenses and other adjustments 1,359 260 2,244 650 Acquisition and integration costs 77 356 423 832 Loss on sale of assets — — — 261 Environmental reserves, net (100 ) 1,500 2,200 2,800 Adjusted operating income (loss) $ 20,039 $ 22,013 $ 59,368 $ 71,462 Adjusted EBITDA reconciliation: Net income (loss) $ 12,747 $ 13,671 $ 36,328 $ 46,839 Income tax expense (benefit) 4,417 4,507 12,499 16,003 Interest expense, net 1,539 1,719 4,975 4,077 Operating income (loss) 18,703 19,897 53,802 66,919 Depreciation and amortization 5,609 5,159 16,904 15,600 Executive severance costs — — 699 — Restructuring expenses and other adjustments 1,359 260 2,244 650 Acquisition and integration costs 77 356 423 832 Loss on sale of assets — — — 261 Environmental reserves, net (100 ) 1,500 2,200 2,800 Adjusted EBITDA $ 25,648 $ 27,172 $ 76,272 $ 87,062 Free cash flow reconciliation: Net cash provided by (used for) operating activities $ 22,134 $ 16,460 $ 70,772 $ 50,759 Capital expenditures (4,076 ) (6,672 ) (19,292 ) (17,615 ) Free cash flow $ 18,058 $ 9,788 $ 51,480 $ 33,144 MYERS INDUSTRIES, INC. RECONCILIATION OF NON-GAAP FINANCIAL MEASURES ADJUSTED NET INCOME AND ADJUSTED EARNINGS PER DILUTED SHARE (UNAUDITED) (Dollars in thousands, except per share data) Quarter Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Adjusted net income (loss) reconciliation: Net income (loss) $ 12,747 $ 13,671 $ 36,328 $ 46,839 Income tax expense (benefit) 4,417 4,507 12,499 16,003 Income (loss) before income taxes 17,164 18,178 48,827 62,842 Executive severance costs — — 699 — Restructuring expenses and other adjustments 1,359 260 2,244 650 Acquisition and integration costs 77 356 423 832 Loss on sale of assets — — — 261 Environmental reserves, net (100 ) 1,500 2,200 2,800 Adjusted income (loss) before income taxes 18,500 20,294 54,393 67,385 Income tax expense, as adjusted (1) (4,625 ) (5,276 ) (13,598 ) (17,520 ) Adjusted net income (loss) $ 13,875 $ 15,018 $ 40,795 $ 49,865 Adjusted earnings per diluted share reconciliation: Net income (loss) per common diluted share $ 0.34 $ 0.37 $ 0.98 $ 1.28 Executive severance costs — — 0.02 — Restructuring expenses and other adjustments 0.04 0.01 0.06 0.02 Acquisition and integration costs 0.00 0.01 0.01 0.02 Loss on sale of assets — — — 0.01 Environmental reserves, net (0.00 ) 0.04 0.06 0.08 Adjusted effective income tax rate impact (0.01 ) (0.02 ) (0.03 ) (0.04 ) Adjusted earnings per diluted share(2) $ 0.38 $ 0.41 $ 1.10 $ 1.36 Items in this table may not recalculate due to rounding (1) Income taxes are calculated using the normalized effective tax rate for each year. The rate used in 2023 is 25% and in 2022 is 26%. (2) Adjusted earnings per diluted share is calculated using the weighted average common shares outstanding for the respective period. MYERS INDUSTRIES, INC. RECONCILIATION OF NON-GAAP FINANCIAL MEASURES GUIDANCE FOR FULL YEAR ADJUSTED EARNINGS PER DILUTED SHARE (UNAUDITED) Full Year 2023 Guidance Low High GAAP diluted net income per common share $ 1.20 $ 1.28 Add: Executive severance costs 0.02 0.02 Add: Net restructuring expenses and other adjustments 0.11 0.07 Add: Acquisition and integration costs 0.01 0.01 Add: Environmental reserves, net 0.06 0.06 Less: Adjusted effective income tax rate impact (1) (0.05 ) (0.04 ) Adjusted earnings per diluted share (2) $ 1.35 $ 1.40 (1) Income taxes are calculated using the normalized effective tax rate for each year. The rate used in 2023 is 25%. (2) Adjusted earnings per diluted share is calculated using the weighted average common shares outstanding. View source version on businesswire.com: https://www.businesswire.com/news/home/20231101721364/en/Contacts Rich Pasela, Manager, Investor Relations and Treasury, 330-761-6284
Further Implementation of Myers Business System Supports Gross Margin Expansion Improving Balance Sheet Strength with Additional Debt Reduction
Myers Industries, Inc. (NYSE: MYE), a leading manufacturer of a wide range of polymer and metal products and distributor for the tire, wheel, and under-vehicle service industry, today announced results for the third quarter ended September 30, 2023. Third Quarter 2023 Financial Highlights Net sales of $197.8 million compared to $228.1 million in the prior year period Gross margin of 31.5%, up 10 basis points versus the prior year period GAAP net income per diluted share of $0.34 compared to $0.37 in the prior year period Adjusted earnings per diluted share of $0.38 compared to $0.41 in the prior year period Cash flow provided by operations was $22.1 million and free cash flow was $18.1 million Myers Industries’ President and CEO Mike McGaugh said "In the third quarter, we continue to see the real value of the Myers Business System in driving strong business results, in-spite of continued significant revenue headwinds in several of our key markets. We are managing our business well, as we expanded year-over-year adjusted gross margin for the seventh consecutive quarter while also expanding adjusted EBITDA margin and generating healthy cash flows. These results are strong indications that our Myers Business System and our other self-help initiatives continue to deliver solid results. During the period we saw weakness within our consumer-facing verticals and a less active hurricane season year over year, both of which adversely affected our Material Handling segment. Our Distribution segment posted improved profitability and remains well positioned to capitalize on anticipated longer-term market tailwinds in the tire repair industry. We are keenly focused on protecting profitability by improving our cost structures across both segments as we continue to make investments for the future. We are optimizing our plants in aligning capacity to consistently match production levels, controlling costs, and driving new commercial excellence programs. Through these dedicated efforts, we lessened the total impact of current headwinds, allowing for the Company to continue progressing against its long-term strategic and financial objectives." McGaugh continued “During the quarter, we generated elevated levels of free cash flow, which allowed us to further strengthen our balance sheet and pay down debt. We will continue to evaluate a number of opportunities within our M&A pipeline and will opportunistically deploy capital towards attractive growth opportunities when they make strategic sense. We look forward to driving future shareholder value through strong execution against our long-term growth strategy and by maintaining strong profitability through all economic conditions.” Third Quarter 2023 Financial Summary Quarter Ended September 30, (Dollars in thousands, except per share data) 2023 2022 % Inc (Dec) Net sales $197,798 $228,065 (13.3)% Gross profit $62,379 $71,648 (12.9)% Gross margin 31.5% 31.4% Operating income $18,703 $19,897 (6.0)% Net income $12,747 $13,671 (6.8)% Net income per diluted share $0.34 $0.37 (8.1)% Adjusted operating income $20,039 $22,013 (9.0)% Adjusted net income $13,875 $15,018 (7.6)% Adjusted earnings per diluted share $0.38 $0.41 (7.3)% Adjusted EBITDA $25,648 $27,172 (5.6)% Net sales were $197.8 million, a decrease of $30.3 million, or 13.3%, compared with $228.1 million for the third quarter of 2022. The decrease was the result of lower volume/mix and lower pricing in certain targeted areas in the Material Handling segment. Gross profit decreased $9.3 million, or 12.9% to $62.4 million, as the contribution from lower raw material costs was not enough to offset lower volumes and pricing. Gross margin expanded 10 basis points to 31.5% compared with 31.4% for the third quarter of 2022. Selling, general and administrative expenses decreased $8.1 million, or 15.6% to $43.7 million due to lower incentive compensation and facility costs. SG&A as a percentage of sales decreased to 22.1%, compared with 22.7% in the same period last year. Net income per diluted share was $0.34, compared with $0.37 for the third quarter of 2022. Adjusted earnings per diluted share were $0.38, compared with $0.41 for the third quarter of 2022. Third Quarter 2023 Segment Results (Dollar amounts in the segment tables below are reported in millions) Material Handling Net Sales Op Income Op Income Margin Adj EBITDA Adj EBITDA Margin Q3 2023 Results $132.5 $20.0 15.1% $25.1 19.0% Q3 2022 Results $155.7 $24.0 15.4% $28.4 18.3% $ Increase (decrease) vs prior year ($23.2) ($4.0) ($3.3) % Increase (decrease) vs prior year (14.9)% (16.6)% -30 bps (11.6)% +70 bps Items in this table may not recalculate due to rounding Net sales for the Material Handling segment were $132.5 million, a decrease of $23.2 million, or 14.9%, compared with $155.7 million for the third quarter of 2022. Net sales decreased in the vehicle, industrial, food & beverage and consumer end markets, with the greatest reduction in demand for RV products, construction products, and fuel container products, due in part to a slower hurricane season. Operating income decreased 16.6% to $20.0 million, compared with $24.0 million in the third quarter of 2022. Operating income margin decreased to 15.1% compared with 15.4% for the third quarter of 2022. Adjusted EBITDA margin improved by 70 basis points, primarily attributed to self-help initiatives, but partially dampened by a decrease in sales volume. Adjusted EBITDA decreased 11.6% to $25.1 million, compared with $28.4 million in the third quarter of 2022. Lower sales volume, pricing and an unfavorable mix more than offset lower raw material costs. SG&A expenses were lower year-over-year, primarily due to a decrease in facility costs and lower incentive compensation. Distribution Net Sales Op Income Op Income Margin Adj EBITDA Adj EBITDA Margin Q3 2023 Results $65.3 $5.0 7.6% $6.6 10.1% Q3 2022 Results $72.4 $4.9 6.8% $6.0 8.3% $ Increase (decrease) vs prior year ($7.1) $0.1 $0.6 % Increase (decrease) vs prior year (9.8)% 1.9% +80 bps 9.4% +180 bps Items in this table may not recalculate due to rounding Net sales for the Distribution segment were $65.3 million, a decrease of $7.1 million, or 9.8%, compared with $72.4 million for the third quarter of 2022. Operating income increased $0.1 million to $5.0 million, compared with $4.9 million for the third quarter of 2022. Adjusted EBITDA increased 9.4% to $6.6 million, compared with $6.0 million in the third quarter of 2022. The increase in operating income and adjusted EBITDA was primarily due to an increase in prices and lower product costs. The decrease in SG&A expenses was primarily the result of lower incentive compensation. The Distribution segment's operating income margin was 7.6% compared with 6.8% for the third quarter of 2022. The Distribution segment’s adjusted EBITDA margin was 10.1%, compared with 8.3% for the third quarter of 2022. The Distribution Segment continues to implement pricing actions to counter cost inflation and improve margin. Balance Sheet & Cash Flow As of September 30, 2023, the Company’s cash on hand totaled $24.8 million. Total debt as of September 30, 2023 was $69.3 million. For the third quarter of 2023, cash flow provided by operations was $22.1 million and free cash flow was $18.1 million, compared with cash flow provided by operations of $16.5 million and free cash flow of $9.8 million for the third quarter of 2022. The increase in cash flow was driven primarily by a decrease in working capital. Capital expenditures for the third quarter of 2023 were $4.1 million, compared with $6.7 million for the third quarter of 2022. 2023 Outlook Based on current exchange rates, market outlook, and business forecast, the Company revised its outlook for fiscal 2023, and currently forecasts: Net sales decline in the mid to high single digit range Net income per diluted share in the range of $1.20 to $1.28 Lowered adjusted earnings per diluted share range of $1.35 to $1.40 Capital expenditures to be in the range of $25 to $30 million Effective tax rate to approximate 25% Conference Call Details The Company will host an earnings conference call and webcast for investors and analysts on Wednesday, November 1, 2023, at 8:30 a.m. EDT. The call is anticipated to last less than one hour and may be accessed using the following online participation registration link: https://www.netroadshow.com/events/login?show=3cf4c0ee&confId=53778 . Upon registering, each participant will be provided with call details and a registrant ID. Reminders will also be sent to registered participants via email. Alternatively, the conference call will be available via a live webcast. To access the live webcast or a replay, visit the Company's website www.myersindustries.com and click on the Investor Relations tab. An archived replay of the call will also be available on the site shortly after the event. To listen to the telephone replay, callers should dial: (US Local) 1-929-458-6194 or (US Toll-Free) 1-866-813-9403. Use of Non-GAAP Financial Measures The Company uses certain non-GAAP measures in this release. Adjusted operating income (loss), adjusted operating income margin, adjusted earnings before interest, taxes, depreciation and amortization (EBITDA), adjusted EBITDA margin, adjusted net income, adjusted earnings per diluted share (adjusted EPS), and free cash flow are non-GAAP financial measures and are intended to serve as a supplement to results provided in accordance with accounting principles generally accepted in the United States. Myers Industries believes that such information provides an additional measurement and consistent historical comparison of the Company’s performance. A reconciliation of the non-GAAP financial measures to the most directly comparable GAAP measures is available in this news release. About Myers Industries Myers Industries, Inc. is a manufacturer of sustainable plastic and metal products for industrial, agricultural, automotive, commercial, and consumer markets. The Company is also the largest distributor of tools, equipment and supplies for the tire, wheel, and under-vehicle service industry in the United States. Visit www.myersindustries.com to learn more. Caution on Forward-Looking Statements Statements in this release include 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. Specific factors that could cause such a difference on our business, financial position, results of operations and/or liquidity include, without limitation, raw material availability, increases in raw material costs, or other production costs; risks associated with our strategic growth initiatives or the failure to achieve the anticipated benefits of such initiatives; unanticipated downturn in business relationships with customers or their purchases; competitive pressures on sales and pricing; changes in the markets for the Company’s business segments; changes in trends and demands in the markets in which the Company competes; operational problems at our manufacturing facilities or unexpected failures at those facilities; future economic and financial conditions in the United States and around the world; inability of the Company to meet future capital requirements; claims, litigation and regulatory actions against the Company; changes in laws and regulations affecting the Company; impacts from the novel coronavirus (“COVID-19”) pandemic; and other risks and uncertainties detailed from time to time in the Company’s filings with the SEC, including without limitation, the risk factors disclosed in Item 1A, “Risk Factors,” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022. Given these factors, as well as other variables that may affect our operating results, readers should not rely on forward-looking statements, assume that past financial performance will be a reliable indicator of future performance, nor use historical trends to anticipate results or trends in future periods. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date thereof. The Company expressly disclaims any obligation or intention to provide updates to the forward-looking statements and the estimates and assumptions associated with them. M-INV MYERS INDUSTRIES, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) (Dollars in thousands, except share and per share data) Quarter Ended Nine Months Ended September 30, 2023 September 30, 2022 September 30, 2023 September 30, 2022 Net sales $ 197,798 $ 228,065 $ 621,990 $ 686,707 Cost of sales 135,419 156,417 420,136 468,415 Gross profit 62,379 71,648 201,854 218,292 Selling, general and administrative expenses 43,698 51,756 148,130 152,066 (Gain) loss on disposal of fixed assets (22 ) (5 ) (78 ) (693 ) Operating income (loss) 18,703 19,897 53,802 66,919 Interest expense, net 1,539 1,719 4,975 4,077 Income (loss) before income taxes 17,164 18,178 48,827 62,842 Income tax expense (benefit) 4,417 4,507 12,499 16,003 Net income (loss) $ 12,747 $ 13,671 $ 36,328 $ 46,839 Net income (loss) per common share: Basic $ 0.35 $ 0.37 $ 0.99 $ 1.29 Diluted $ 0.34 $ 0.37 $ 0.98 $ 1.28 Weighted average common shares outstanding: Basic 36,811,296 36,472,378 36,712,662 36,383,398 Diluted 36,979,880 36,717,153 36,972,384 36,678,955 MYERS INDUSTRIES, INC. CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (UNAUDITED) (Dollars in thousands) September 30, 2023 December 31, 2022 Assets Current Assets Cash $ 24,768 $ 23,139 Accounts receivable, net 117,362 133,716 Inventories, net 96,230 93,351 Other current assets 9,051 7,001 Total Current Assets 247,411 257,207 Property, plant, & equipment, net 106,936 101,566 Right of use asset - operating leases 27,384 28,908 Deferred income taxes 129 129 Other assets 149,261 154,824 Total Assets $ 531,121 $ 542,634 Liabilities & Shareholders' Equity Current Liabilities Accounts payable $ 80,760 $ 73,536 Accrued expenses 50,940 57,531 Operating lease liability - short-term 5,604 6,177 Finance lease liability - short-term 581 518 Long-term debt - current portion 25,994 — Total Current Liabilities 163,879 137,762 Long-term debt 33,987 93,962 Operating lease liability - long-term 22,023 22,786 Finance lease liability - long-term 8,766 8,919 Other liabilities 10,284 15,270 Deferred income taxes 9,961 7,508 Total Shareholders' Equity 282,221 256,427 Total Liabilities & Shareholders' Equity $ 531,121 $ 542,634 MYERS INDUSTRIES, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (Dollars in thousands) Quarter Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Cash Flows From Operating Activities Net income $ 12,747 $ 13,671 $ 36,328 $ 46,839 Adjustments to reconcile net income to net cash provided by (used for) operating activities Depreciation and amortization 5,609 5,159 16,904 15,600 Amortization of deferred financing costs 78 121 234 363 Non-cash stock-based compensation expense 686 1,308 5,078 5,168 (Gain) loss on disposal of fixed assets (22 ) (5 ) (78 ) (693 ) Other (19 ) (406 ) 2,473 292 Cash flows provided by (used for) working capital Accounts receivable (1,332 ) 2,449 13,764 (18,751 ) Inventories 1,825 243 (2,905 ) (7,016 ) Prepaid expenses and other current assets 1,775 790 (2,053 ) (4,912 ) Accounts payable and accrued expenses 787 (6,870 ) 1,027 13,869 Net cash provided by (used for) operating activities 22,134 16,460 70,772 50,759 Cash Flows From Investing Activities Capital expenditures (4,076 ) (6,672 ) (19,292 ) (17,615 ) Acquisition of business, net of cash acquired — — (160 ) (24,253 ) Proceeds from sale of property, plant, and equipment — 26 142 1,525 Net cash provided by (used for) investing activities (4,076 ) (6,646 ) (19,310 ) (40,343 ) Cash Flows From Financing Activities Net borrowings (repayments) from revolving credit facility (19,000 ) (6,000 ) (34,000 ) 7,000 Payments on finance lease (145 ) (125 ) (403 ) (374 ) Cash dividends paid (4,970 ) (4,938 ) (15,266 ) (14,872 ) Proceeds from issuance of common stock 379 221 1,948 2,059 Shares withheld for employee taxes on equity awards (22 ) (103 ) (2,055 ) (450 ) Deferred financing fees — (718 ) — (718 ) Net cash provided by (used for) financing activities (23,758 ) (11,663 ) (49,776 ) (7,355 ) Foreign exchange rate effect on cash (224 ) (161 ) (57 ) (292 ) Net increase (decrease) in cash (5,924 ) (2,010 ) 1,629 2,769 Beginning Cash 30,692 22,434 23,139 17,655 Ending Cash $ 24,768 $ 20,424 $ 24,768 $ 20,424 MYERS INDUSTRIES, INC. RECONCILIATION OF NON-GAAP FINANCIAL MEASURES GROSS PROFIT, OPERATING INCOME AND EBITDA (UNAUDITED) (Dollars in thousands) Quarter Ended September 30, 2023 Material Handling Distribution Segment Total Corporate & Other Total Net sales $ 132,484 $ 65,335 $ 197,819 $ (21 ) $ 197,798 Net income 12,747 Net income margin 6.4 % Gross profit 62,379 Add: Restructuring expenses and other adjustments 307 Adjusted gross profit 62,686 Gross margin as adjusted 31.7 % Operating income (loss) 19,978 4,993 24,971 (6,268 ) 18,703 Operating income margin 15.1 % 7.6 % 12.6 % n/a 9.5 % Add: Restructuring expenses and other adjustments 529 674 1,203 156 1,359 Add: Acquisition and integration costs — 77 77 — 77 Less: Environmental reserves, net(2) — — — (100 ) (100 ) Adjusted operating income (loss)(1) 20,507 5,744 26,251 (6,212 ) 20,039 Adjusted operating income margin 15.5 % 8.8 % 13.3 % n/a 10.1 % Add: Depreciation and amortization 4,641 842 5,483 126 5,609 Adjusted EBITDA $ 25,148 $ 6,586 $ 31,734 $ (6,086 ) $ 25,648 Adjusted EBITDA margin 19.0 % 10.1 % 16.0 % n/a 13.0 % (1) Includes gross profit adjustments of $307 and SG&A adjustments of $1,029 (2) Includes environmental charges of $300 net of probable insurance recoveries of $400 Quarter Ended September 30, 2022 Material Handling Distribution Segment Total Corporate & Other Total Net sales $ 155,658 $ 72,416 $ 228,074 $ (9 ) $ 228,065 Net income 13,671 Net income margin 6.0 % Gross profit 71,648 Add: Restructuring expenses and other adjustments 260 Adjusted gross profit 71,908 Gross margin as adjusted 31.5 % Operating income (loss) 23,962 4,899 28,861 (8,964 ) 19,897 Operating income margin 15.4 % 6.8 % 12.7 % n/a 8.7 % Add: Restructuring expenses and other adjustments 260 — 260 — 260 Add: Acquisition and integration costs — 271 271 85 356 Add: Environmental reserves, net(2) — — — 1,500 1,500 Adjusted operating income (loss)(1) 24,222 5,170 29,392 (7,379 ) 22,013 Adjusted operating income margin 15.6 % 7.1 % 12.9 % n/a 9.7 % Add: Depreciation and amortization 4,215 851 5,066 93 5,159 Adjusted EBITDA $ 28,437 $ 6,021 $ 34,458 $ (7,286 ) $ 27,172 Adjusted EBITDA margin 18.3 % 8.3 % 15.1 % n/a 11.9 % (1) Includes gross profit adjustments of $260 and SG&A adjustments of $1,856 (2) Includes environmental charges of $1,500 net of probable insurance recoveries of $0 MYERS INDUSTRIES, INC. RECONCILIATION OF NON-GAAP FINANCIAL MEASURES GROSS PROFIT, OPERATING INCOME AND EBITDA (UNAUDITED) (Dollars in thousands) Nine Months Ended September 30, 2023 Material Handling Distribution Segment Total Corporate & Other Total Net sales $ 428,341 $ 193,693 $ 622,034 $ (44 ) $ 621,990 Net income 36,328 Net income margin 5.8 % Gross profit 201,854 Add: Restructuring expenses and other adjustments 589 Adjusted gross profit 202,443 Gross margin as adjusted 32.5 % Operating income (loss) 70,157 10,628 80,785 (26,983 ) 53,802 Operating income margin 16.4 % 5.5 % 13.0 % n/a 8.6 % Add: Executive severance costs — 410 410 289 699 Add: Restructuring expenses and other adjustments 1,225 853 2,078 166 2,244 Add: Acquisition and integration costs — 297 297 126 423 Add: Environmental reserves, net(2) — — — 2,200 2,200 Adjusted operating income (loss)(1) 71,382 12,188 83,570 (24,202 ) 59,368 Adjusted operating income margin 16.7 % 6.3 % 13.4 % n/a 9.5 % Add: Depreciation and amortization 13,995 2,505 16,500 404 16,904 Adjusted EBITDA $ 85,377 $ 14,693 $ 100,070 $ (23,798 ) $ 76,272 Adjusted EBITDA margin 19.9 % 7.6 % 16.1 % n/a 12.3 % (1) Includes gross profit adjustments of $589 and SG&A adjustments of $4,977 (2) Includes environmental charges of $3,800 net of probable insurance recoveries of $1,600 Nine Months Ended September 30, 2022 Material Handling Distribution Segment Total Corporate & Other Total Net sales $ 505,384 $ 181,352 $ 686,736 $ (29 ) $ 686,707 Net income 46,839 Net income margin 6.8 % Gross profit 218,292 Add: Restructuring expenses and other adjustments 650 Adjusted gross profit 218,942 Gross margin as adjusted 31.9 % Operating income (loss) 83,216 12,469 95,685 (28,766 ) 66,919 Operating income margin 16.5 % 6.9 % 13.9 % n/a 9.7 % Add: Restructuring expenses and other adjustments 650 — 650 — 650 Add: Acquisition and integration costs — 271 271 561 832 Add: Loss on sale of assets 261 — 261 — 261 Add: Environmental reserves, net(2) — — — 2,800 2,800 Adjusted operating income (loss)(1) 84,127 12,740 96,867 (25,405 ) 71,462 Adjusted operating income margin 16.6 % 7.0 % 14.1 % n/a 10.4 % Add: Depreciation and amortization 13,239 2,029 15,268 332 15,600 Adjusted EBITDA $ 97,366 $ 14,769 $ 112,135 $ (25,073 ) $ 87,062 Adjusted EBITDA margin 19.3 % 8.1 % 16.3 % n/a 12.7 % (1) Includes gross profit adjustments of $650 and SG&A adjustments of $3,893 (2) Includes environmental charges of $2,800 net of probable insurance recoveries of $0 MYERS INDUSTRIES, INC. RECONCILIATION OF NON-GAAP FINANCIAL MEASURES ADJUSTED OPERATING INCOME, ADJUSTED EBITDA AND FREE CASH FLOW (UNAUDITED) (Dollars in thousands, except per share data) Quarter Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Adjusted operating income (loss) reconciliation: Operating income (loss) $ 18,703 $ 19,897 $ 53,802 $ 66,919 Executive severance costs — — 699 — Restructuring expenses and other adjustments 1,359 260 2,244 650 Acquisition and integration costs 77 356 423 832 Loss on sale of assets — — — 261 Environmental reserves, net (100 ) 1,500 2,200 2,800 Adjusted operating income (loss) $ 20,039 $ 22,013 $ 59,368 $ 71,462 Adjusted EBITDA reconciliation: Net income (loss) $ 12,747 $ 13,671 $ 36,328 $ 46,839 Income tax expense (benefit) 4,417 4,507 12,499 16,003 Interest expense, net 1,539 1,719 4,975 4,077 Operating income (loss) 18,703 19,897 53,802 66,919 Depreciation and amortization 5,609 5,159 16,904 15,600 Executive severance costs — — 699 — Restructuring expenses and other adjustments 1,359 260 2,244 650 Acquisition and integration costs 77 356 423 832 Loss on sale of assets — — — 261 Environmental reserves, net (100 ) 1,500 2,200 2,800 Adjusted EBITDA $ 25,648 $ 27,172 $ 76,272 $ 87,062 Free cash flow reconciliation: Net cash provided by (used for) operating activities $ 22,134 $ 16,460 $ 70,772 $ 50,759 Capital expenditures (4,076 ) (6,672 ) (19,292 ) (17,615 ) Free cash flow $ 18,058 $ 9,788 $ 51,480 $ 33,144 MYERS INDUSTRIES, INC. RECONCILIATION OF NON-GAAP FINANCIAL MEASURES ADJUSTED NET INCOME AND ADJUSTED EARNINGS PER DILUTED SHARE (UNAUDITED) (Dollars in thousands, except per share data) Quarter Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Adjusted net income (loss) reconciliation: Net income (loss) $ 12,747 $ 13,671 $ 36,328 $ 46,839 Income tax expense (benefit) 4,417 4,507 12,499 16,003 Income (loss) before income taxes 17,164 18,178 48,827 62,842 Executive severance costs — — 699 — Restructuring expenses and other adjustments 1,359 260 2,244 650 Acquisition and integration costs 77 356 423 832 Loss on sale of assets — — — 261 Environmental reserves, net (100 ) 1,500 2,200 2,800 Adjusted income (loss) before income taxes 18,500 20,294 54,393 67,385 Income tax expense, as adjusted (1) (4,625 ) (5,276 ) (13,598 ) (17,520 ) Adjusted net income (loss) $ 13,875 $ 15,018 $ 40,795 $ 49,865 Adjusted earnings per diluted share reconciliation: Net income (loss) per common diluted share $ 0.34 $ 0.37 $ 0.98 $ 1.28 Executive severance costs — — 0.02 — Restructuring expenses and other adjustments 0.04 0.01 0.06 0.02 Acquisition and integration costs 0.00 0.01 0.01 0.02 Loss on sale of assets — — — 0.01 Environmental reserves, net (0.00 ) 0.04 0.06 0.08 Adjusted effective income tax rate impact (0.01 ) (0.02 ) (0.03 ) (0.04 ) Adjusted earnings per diluted share(2) $ 0.38 $ 0.41 $ 1.10 $ 1.36 Items in this table may not recalculate due to rounding (1) Income taxes are calculated using the normalized effective tax rate for each year. The rate used in 2023 is 25% and in 2022 is 26%. (2) Adjusted earnings per diluted share is calculated using the weighted average common shares outstanding for the respective period. MYERS INDUSTRIES, INC. RECONCILIATION OF NON-GAAP FINANCIAL MEASURES GUIDANCE FOR FULL YEAR ADJUSTED EARNINGS PER DILUTED SHARE (UNAUDITED) Full Year 2023 Guidance Low High GAAP diluted net income per common share $ 1.20 $ 1.28 Add: Executive severance costs 0.02 0.02 Add: Net restructuring expenses and other adjustments 0.11 0.07 Add: Acquisition and integration costs 0.01 0.01 Add: Environmental reserves, net 0.06 0.06 Less: Adjusted effective income tax rate impact (1) (0.05 ) (0.04 ) Adjusted earnings per diluted share (2) $ 1.35 $ 1.40 (1) Income taxes are calculated using the normalized effective tax rate for each year. The rate used in 2023 is 25%. (2) Adjusted earnings per diluted share is calculated using the weighted average common shares outstanding. 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