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 Fourth Quarter and Full Year 2023 Results By: Myers Industries, Inc. via Business Wire March 05, 2024 at 06:30 AM EST Self-Help Initiatives and Myers Business System Drive Solid Operating Performance Company Initiates Fiscal Year 2024 Outlook and Expects Improved Profitability as Compared to Prior Year Myers to Host Investor & Analyst Day Event in New York City on March 19, 2024 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 fourth quarter and full year ended December 31, 2023. In reviewing the 2023 financial results, Myers Industries’ President and CEO Mike McGaugh commented, “Although our results were not what we originally planned to deliver in 2023, we remain encouraged by the resiliency of many of our business units despite continued cyclical headwinds in several of our key end markets. Demonstrating the strength of our diverse portfolio, 2023 marked a year of continued progress and still yielded one of the top years in the history of our company for adjusted earnings per share, adjusted EBITDA, and revenue. Further, year over year operating cash flow generation increased by $13.6 million and free cash flow generation increased by $15.0 million, as we continue to benefit from early implementation of the Myers Business System to help drive Operational Excellence.” Fourth Quarter 2023 Financial Highlights Net sales of $191.1 million compared to $212.8 million in the prior year period Gross margin of 30.0%, down 60 basis points versus the prior year period GAAP net income per diluted share of $0.34 compared to $0.36 in the prior year period Adjusted earnings per diluted share of $0.29 compared to $0.32 in the prior year period Cash flow provided by operations was $15.4 million and free cash flow was $11.8 million Full Year 2023 Financial Highlights Net sales of $813.1 million compared to $899.5 million in the prior year period Gross margin of 31.9%, up 40 basis points versus the prior year period GAAP net income per diluted share of $1.32 compared to $1.64 in the prior year period Adjusted earnings per diluted share of $1.39 compared to $1.68 in the prior year period Cash flow provided by operations was $86.2 million and free cash flow was $63.3 million Subsequent to fiscal year end, closed on acquisition of Signature Systems, enhancing Myers' long-term margin and EPS growth profiles Myers Industries’ President and CEO Mike McGaugh continued, “In closing 2023, our Material Handling segment delivered respectable fourth quarter financial results with continued strong margins in-spite of demand headwinds in RV, Marine, and Consumer end-markets. We continue to see results from our Operational Excellence and Commercial Excellence initiatives, what we call our Self-Help programs. As a result, when these cyclical end markets improve, we expect to benefit more than we have historically." “Our Distribution segment performance in 2023 was disappointing and not reflective of our expectations for this business. Our fourth quarter results were unfavorably impacted due to a short-term decline in sales volume and revenue, primarily a transition effect of our Distribution sales organization realignment, which was implemented in the third quarter of 2023. We expect our Distribution segment to demonstrate future revenue growth and improved profitability as we build on the scale and reach achieved from the Mohawk acquisition and begin to realize the benefits from our sales organization improvements.” “We continue to be excited about the growth and innovation projects in our Material Handling segment, many of which have a long-term growth runway. In particular, we see strong growth opportunities in Military cases, Industrial boxes, and our e-commerce sales channel. We also continue to be pleased with our progress on our Sustainability efforts, as highlighted in our third annual ESG report to be released this week.” McGaugh continued, “We’ve made another significant step forward in expanding our branded product portfolio, increasing our end-market diversification by acquiring Signature Systems. This business is less cyclical than our traditional portfolio of businesses, but it has similar cash flow generation potential, and it moves us into faster growing markets with greater tail winds. We believe Signature Systems is a catalyst for Myers’ transformation and a growth engine for the Company.” McGaugh concluded, “In 2023, we continued to improve our company; quite frankly, it is unrecognizable from the one I joined in the spring of 2020. We are confident that the progress we’ve made in our Commercial Excellence and Operational Excellence over the past few years, coupled with our leading brands in diverse end markets and our acquisition of Signature System, will serve as a solid foundation for meaningful shareholder value creation as we advance through our three-horizon strategy.” Fourth Quarter 2023 Financial Summary Quarter Ended December 31, (Dollars in thousands, except per share data) 2023 2022 % Inc (Dec) Net sales $191,077 $212,840 (10.2)% Gross profit $57,232 $65,074 (12.1)% Gross margin 30.0% 30.6% Operating income $18,603 $17,022 9.3% Net income $12,539 $13,428 (6.6)% Net income per diluted share $0.34 $0.36 (5.6)% Adjusted operating income $15,893 $16,485 (3.6)% Adjusted net income $10,889 $11,797 (7.7)% Adjusted earnings per diluted share $0.29 $0.32 (9.4)% Adjusted EBITDA $21,775 $22,101 (1.5)% Net sales were $191.1 million, a decrease of $21.8 million, or 10.2%, compared with $212.8 million for the fourth quarter of 2022. The decrease was the result of lower volume/pricing in certain targeted areas in the Material Handling segment and lower volume in Distribution. Gross profit decreased $7.8 million, or 12.1% to $57.2 million, as the contribution from lower raw material costs was not enough to offset lower volumes and pricing. Gross margin declined 60 basis points to 30.0% compared with 30.6% for the fourth quarter of 2022. Selling, general and administrative expenses decreased $8.7 million, or 18.3% to $38.7 million due to lower professional services and incentive compensation. SG&A as a percentage of sales decreased to 20.3%, compared with 22.3% in the same period last year. Net income per diluted share was $0.34, compared with $0.36 for the fourth quarter of 2022. Adjusted earnings per diluted share were $0.29, compared with $0.32 for the fourth quarter of 2022. Fourth 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 Q4 2023 Results $126.9 $29.9 23.6% $28.4 22.4% Q4 2022 Results $142.2 $20.9 14.7% $25.5 18.0% $ Increase (decrease) vs prior year ($15.3) $9.1 $2.9 % Increase (decrease) vs prior year (10.8)% 43.5% +890bps 11.2% +440bps Items in this table may not recalculate due to rounding Net sales for the Material Handling segment were $126.9 million, a decrease of $15.3 million, or 10.8%, compared with $142.2 million for the fourth quarter of 2022. Net sales decreased in the vehicle, food & beverage and consumer end markets, with the greatest reduction in demand for RV products, marine products, agriculture, and fuel container products, due in part to a slower hurricane season. Operating income increased 43.5% to $29.9 million, compared with $20.9 million in the fourth quarter of 2022. Operating income margin increased to 23.6% compared with 14.7% for the fourth quarter of 2022. Adjusted EBITDA margin improved by 440 basis points, primarily attributed to self-help initiatives, but partially dampened by a decrease in sales volume and pricing. Adjusted EBITDA increased 11.2% to $28.4 million, compared with $25.5 million in the fourth quarter of 2022. SG&A expenses were lower year-over-year, primarily due to a decrease in professional services and an insurance recovery of legal fees. Distribution Net Sales Op Income Op Income Margin Adj EBITDA Adj EBITDA Margin Q4 2023 Results $64.2 $0.3 0.5% $1.2 1.8% Q4 2022 Results $70.6 $3.4 4.8% $5.0 7.0% $ Increase (decrease) vs prior year ($6.4) ($3.1) ($3.8) % Increase (decrease) vs prior year (9.1)% (90.0)% -430bps (76.4)% -520bps Items in this table may not recalculate due to rounding Net sales for the Distribution segment were $64.2 million, a decrease of $6.4 million, or 9.1%, compared with $70.6 million for the fourth quarter of 2022. Operating income decreased $3.1 million to $0.3 million, compared with $3.4 million for the fourth quarter of 2022. Adjusted EBITDA decreased 76.4% to $1.2 million, compared with $5.0 million in the fourth quarter of 2022. The decrease in operating income and adjusted EBITDA was primarily due to lower volume and an unfavorable sale mix. The decrease in SG&A expenses was primarily the result of lower incentive compensation. The Distribution segment's operating income margin was 0.5% compared with 4.8% for the fourth quarter of 2022. The Distribution segment’s adjusted EBITDA margin was 1.8%, compared with 7.0% for the fourth quarter of 2022. The Distribution Segment continues to implement pricing actions to counter cost inflation and improve margin. Full Year 2023 Financial Summary Year Ended December 31, (Dollars in thousands, except per share data) 2023 2022 % Inc (Dec) Net sales $ 813,067 $ 899,547 (9.6 )% Gross profit $ 259,086 $ 283,366 (8.6 )% Gross margin 31.9 % 31.5 % Operating income $ 72,405 $ 83,941 (13.7 )% Net income $ 48,867 $ 60,267 (18.9 )% Net income per diluted share $ 1.32 $ 1.64 (19.5 )% Adjusted operating income $ 75,261 $ 87,947 (14.4 )% Adjusted net income $ 51,684 $ 61,662 (16.2 )% Adjusted earnings per diluted share $ 1.39 $ 1.68 (17.3 )% Adjusted EBITDA $ 98,047 $ 109,163 (10.2 )% Net sales for the full year of 2023 were $813.1 million, a decrease of $86.5 million, or 9.6%, compared with $899.5 million for the full year of 2022. The decrease was the result of lower volume and pricing in certain areas in the Material Handling segment, partially offset by higher sales in the Distribution segment largely from incremental sales of $23.1 million from Mohawk Rubber acquisition. Gross profit decreased $24.3 million, or 8.6% to $259.1 million, as the contribution from lower raw material costs was not enough to offset lower volumes and pricing. Gross margin expanded 40 basis points to 31.9% compared with 31.5% for the full year of 2022. Selling, general and administrative expenses decreased $12.6 million, or 6.3% to $186.9 million due to lower incentive compensation, commissions and facility costs. SG&A as a percentage of sales increased to 23.0%, compared with 22.2% in the same period last year. Net income per diluted share was $1.32, compared with $1.64 for the full year of 2022. Adjusted earnings per diluted share were $1.39, compared with $1.68 for the full year of 2022. Full Year 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 Full Year 2023 Results $555.3 $100.1 18.0% $113.8 20.5% Full Year 2022 Results $647.6 $104.1 16.1% $122.9 19.0% $ Increase (decrease) vs prior year ($92.4) ($4.0) ($9.1) % Increase (decrease) vs prior year (14.3)% (3.8)% +190bps (7.4)% +150bps Items in this table may not recalculate due to rounding Net sales for the Material Handling segment were $555.3 million, a decrease of $92.4 million, or 14.3%, compared with $647.6 million for the full year of 2022. Net sales decreased in the vehicle, industrial, food & beverage and consumer end markets, with the greatest reduction in demand for RV products, marine, construction products, and fuel container products, due in part to a slower hurricane season. Operating income decreased 3.8% to $100.1 million, compared with $104.1 million in the full year of 2022. Operating income margin increased to 18.0% compared with 16.1% for the full year of 2022. Adjusted EBITDA margin improved by 150 basis points, primarily attributed to self-help initiatives, but partially dampened by a decrease in sales volume. Adjusted EBITDA decreased 7.4% to $113.8 million, compared with $122.9 million in the full year of 2022. Lower sales volume and pricing more than offset lower raw material costs. SG&A expenses were lower year-over-year, primarily due to a decrease in professional services and insurance recovery of legal fees. Distribution Net Sales Op Income Op Income Margin Adj EBITDA Adj EBITDA Margin Full Year 2023 Results $257.9 $11.0 4.3% $15.9 6.2% Full Year 2022 Results $252.0 $15.9 6.3% $19.7 7.8% $ Increase (decrease) vs prior year $5.9 ($4.9) ($3.9) % Increase (decrease) vs prior year 2.3% (30.9)% -200bps (19.6)% -160bps Items in this table may not recalculate due to rounding Net sales for the Distribution segment were $257.9 million, an increase of $5.9 million, or 2.3%, compared with $252.0 million for the full year of 2022. Operating income decreased $4.9 million to $11.0 million, compared with $15.9 million for the full year of 2022. Adjusted EBITDA decreased 19.6% to $15.9 million, compared with $19.7 million in the full year of 2022. The decrease in operating income and adjusted EBITDA was primarily due to lower volume/mix and higher SG&A. The increase in SG&A expenses was primarily the result of the Mohawk Rubber acquisition and higher salaries. The Distribution segment's operating income margin was 4.3% compared with 6.3% for the full year of 2022. The Distribution segment’s adjusted EBITDA margin was 6.2%, compared with 7.8% for the full year of 2022. The Distribution Segment continues to implement pricing actions to counter cost inflation and improve margin. Balance Sheet & Cash Flow As of December 31, 2023, the Company’s cash on hand totaled $30.3 million. Total debt as of December 31, 2023 was $67.2 million. For the fourth quarter of 2023, cash flow provided by operations was $15.4 million and free cash flow was $11.8 million, compared with cash flow provided by operations of $21.9 million and free cash flow of $15.2 million for the fourth quarter of 2022. For the full year of 2023, cash flow provided by operations was $86.2 million and free cash flow was $63.3 million, compared with cash flow provided by operations of $72.6 million and free cash flow of $48.3 million for the full year of 2022. The increase in cash flow was driven primarily by a decrease in working capital. Capital expenditures for the fourth quarter of 2023 were $3.6 million, compared with $6.7 million for the fourth quarter of 2022. Capital expenditures for the full year of 2023 were $22.9 million, compared with $24.3 million for the full year of 2022. Closing of Previously Announced Acquisition of Signature Systems On February 8, 2024, the Company announced that it completed its acquisition of Signature Systems (“Signature”), which was previously announced on January 2, 2024. The cash transaction of $350 million was funded through an Amendment to Myers’ existing $250 million revolving credit facility and a new $400 million 5-year senior secured term loan A facility. The term loan A facility was upsized by $50.0 million since the Signature Systems transaction was initially announced. As of closing, the Company’s net leverage ratio was approximately 3.0x, which is within management’s target range. Future financial results of Signature Systems are expected to be disclosed within Myers’ Material Handling segment. Chief Financial Officer Grant Fitz commented, “As a reminder, this transaction is expected to be neutral to slightly dilutive to US GAAP EPS in fiscal year 2024, but we anticipate Signature will deliver earnings accretion of between $0.20 and $0.30 in 2025, and between $0.40 and $0.50 in 2026, with the potential for additional meaningful earnings accretion beyond 2026. We also expect annualized run-rate operational and cost synergies of $8 million will be fully captured by 2025,with additional synergies to be realized once Signature has an opportunity to leverage the Myers Business System. Finally, we remind investors that we anticipate reducing our net leverage ratio below 2.0x within two years of closing of this transaction, which would enable continued acquisitive growth. 2024 Investor Day The Company will host an Investor and Analyst Day on Tuesday, March 19th, 2024 at The Harvard Club in New York City. The event will feature a showcase of Myers’ diverse product portfolio and will be accompanied by presentations from members of Myers’ executive management that will outline the Company’s long-term strategy and outlook. 2024 Outlook Based on current exchange rates, market outlook, and business forecast, the Company provided the following outlook for fiscal 2024: Net sales growth of 15% - 20% Net income per diluted share in the range of $1.03 to $1.23* Adjusted earnings per diluted share range of $1.30 to $1.45* Capital expenditures to be in the range of $35 to $40 million Effective tax rate to approximate 25% * Subject to completion of purchase accounting for the February 8, 2024 acquisition of Signature Systems, which could have positive or negative impact on EPS metrics related to depreciation and amortization. We will continue to monitor market conditions and provide updates as we progress throughout the year Conference Call Details The Company will host an earnings conference call and webcast for investors and analysts on Tuesday, March 5, 2024, 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=fc15d634&confId=59274 .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 Access Code: 269707. 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 Year Ended December 31, 2023 December 31, 2022 December 31, 2023 December 31, 2022 Net sales $ 191,077 $ 212,840 $ 813,067 $ 899,547 Cost of sales 133,845 147,766 553,981 616,181 Gross profit 57,232 65,074 259,086 283,366 Selling, general and administrative expenses 38,746 47,423 186,876 199,489 (Gain) loss on disposal of fixed assets (117 ) 26 (195 ) (667 ) Other (income) expenses — 603 — 603 Operating income (loss) 18,603 17,022 72,405 83,941 Interest expense, net 1,374 1,654 6,349 5,731 Income (loss) before income taxes 17,229 15,368 66,056 78,210 Income tax expense (benefit) 4,690 1,940 17,189 17,943 Net income (loss) $ 12,539 $ 13,428 $ 48,867 $ 60,267 Net income (loss) per common share: Basic $ 0.34 $ 0.37 $ 1.33 $ 1.66 Diluted $ 0.34 $ 0.36 $ 1.32 $ 1.64 Weighted average common shares outstanding: Basic 36,840,253 36,495,362 36,744,560 36,411,389 Diluted 37,142,056 36,853,237 37,095,568 36,790,839 MYERS INDUSTRIES, INC. CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (UNAUDITED) (Dollars in thousands) December 31, 2023 December 31, 2022 Assets Current Assets Cash $ 30,290 $ 23,139 Trade accounts receivable, net 113,907 126,184 Other accounts receivable, net 14,726 7,532 Inventories, net 90,844 93,351 Other current assets 6,854 7,001 Total Current Assets 256,621 257,207 Property, plant, & equipment, net 107,933 101,566 Right of use asset - operating leases 27,989 28,908 Deferred income taxes 209 129 Other assets 148,879 154,824 Total Assets $ 541,631 $ 542,634 Liabilities & Shareholders' Equity Current Liabilities Accounts payable $ 79,050 $ 73,536 Accrued expenses 53,523 57,531 Operating lease liability - short-term 5,943 6,177 Finance lease liability - short-term 593 518 Long-term debt - current portion 25,998 - Total Current Liabilities 165,107 137,762 Long-term debt 31,989 93,962 Operating lease liability - long-term 22,352 22,786 Finance lease liability - long-term 8,615 8,919 Other liabilities 12,108 15,270 Deferred income taxes 8,660 7,508 Total Shareholders' Equity 292,800 256,427 Total Liabilities & Shareholders' Equity $ 541,631 $ 542,634 MYERS INDUSTRIES, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (Dollars in thousands) Quarter Ended December 31, Year Ended December 31, 2023 2022 2023 2022 Cash Flows From Operating Activities Net income $ 12,539 $ 13,428 $ 48,867 $ 60,267 Adjustments to reconcile net income to net cash provided by (used for) operating activities Depreciation and amortization 5,882 5,616 22,786 21,216 Amortization of deferred financing costs 79 78 313 441 Non-cash stock-based compensation expense 1,593 2,268 6,671 7,436 (Gain) loss on disposal of fixed assets (117 ) 26 (195 ) (667 ) Deferred taxes 1,039 2,072 1,039 2,072 Other (1,529 ) 1,228 944 1,520 Cash flows provided by (used for) working capital Accounts receivable - trade and other, net (11,108 ) (4,874 ) 2,656 (23,625 ) Inventories 5,535 14,971 2,630 7,955 Prepaid expenses and other current assets 2,204 3,503 151 (1,409 ) Accounts payable and accrued expenses (717 ) (16,454 ) 310 (2,585 ) Net cash provided by (used for) operating activities 15,400 21,862 86,172 72,621 Cash Flows From Investing Activities Capital expenditures (3,563 ) (6,677 ) (22,855 ) (24,292 ) Acquisition of business, net of cash acquired — (3,373 ) (160 ) (27,626 ) Proceeds from sale of property, plant, and equipment 116 12 258 1,537 Net cash provided by (used for) investing activities (3,447 ) (10,038 ) (22,757 ) (50,381 ) Cash Flows From Financing Activities Net borrowings (repayments) from revolving credit facility (2,000 ) (4,000 ) (36,000 ) 3,000 Payments on finance lease (139 ) (126 ) (542 ) (500 ) Cash dividends paid (4,974 ) (4,925 ) (20,240 ) (19,797 ) Proceeds from issuance of common stock 390 261 2,338 2,320 Shares withheld for employee taxes on equity awards (17 ) (1 ) (2,072 ) (451 ) Deferred financing fees — (171 ) — (889 ) Net cash provided by (used for) financing activities (6,740 ) (8,962 ) (56,516 ) (16,317 ) Foreign exchange rate effect on cash 309 (147 ) 252 (439 ) Net increase (decrease) in cash 5,522 2,715 7,151 5,484 Beginning Cash 24,768 20,424 23,139 17,655 Ending Cash $ 30,290 $ 23,139 $ 30,290 $ 23,139 MYERS INDUSTRIES, INC. RECONCILIATION OF NON-GAAP FINANCIAL MEASURES GROSS PROFIT, OPERATING INCOME AND EBITDA (UNAUDITED) (Dollars in thousands) Quarter Ended December 31, 2023 Material Handling Distribution Segment Total Corporate & Other Total Net sales $ 126,918 $ 64,182 $ 191,100 $ (23 ) $ 191,077 Net income 12,539 Net income margin 6.6 % Gross profit 57,232 Add: Restructuring expenses and other adjustments 240 Adjusted gross profit 57,472 Gross margin as adjusted 30.1 % Operating income (loss) 29,931 339 30,270 (11,667 ) 18,603 Operating income margin 23.6 % 0.5 % 15.8 % n/a 9.7 % Add: Restructuring expenses and other adjustments 231 61 292 — 292 Add: Acquisition and integration costs — 79 79 2,619 2,698 Less: Insurance recovery of legal fees(3) (6,700 ) — (6,700 ) — (6,700 ) Add: Environmental reserves, net(2) — — — 1,000 1,000 Adjusted operating income (loss)(1) 23,462 479 23,941 (8,048 ) 15,893 Adjusted operating income margin 18.5 % 0.7 % 12.5 % n/a 8.3 % Add: Depreciation and amortization 4,922 692 5,614 268 5,882 Adjusted EBITDA $ 28,384 $ 1,171 $ 29,555 $ (7,780 ) $ 21,775 Adjusted EBITDA margin 22.4 % 1.8 % 15.5 % n/a 11.4 % (1) Includes gross profit adjustments of $240 and SG&A adjustments of $(2,950) (2) Includes environmental charges of $2,700 net of probable insurance recoveries of $1,700 (3) Includes total insurance recovery of $10,000 net of recoverable expenses incurred in the current year of $3,300 Quarter Ended December 31, 2022 Material Handling Distribution Segment Total Corporate & Other Total Net sales $ 142,235 $ 70,614 $ 212,849 $ (9 ) $ 212,840 Net income 13,428 Net income margin 6.3 % Gross profit 65,074 Add: Restructuring expenses and other adjustments 94 Adjusted gross profit 65,168 Gross margin as adjusted 30.6 % Operating income (loss) 20,863 3,393 24,256 (7,234 ) 17,022 Operating income margin 14.7 % 4.8 % 11.4 % n/a 8.0 % Add: Restructuring expenses and other adjustments 94 — 94 — 94 Add: Acquisition and integration costs — 106 106 60 166 Add: Impairment of investment in legacy joint venture — 603 603 — 603 Less: Environmental reserves, net(2) — — — (1,400 ) (1,400 ) Adjusted operating income (loss)(1) 20,957 4,102 25,059 (8,574 ) 16,485 Adjusted operating income margin 14.7 % 5.8 % 11.8 % n/a 7.7 % Add: Depreciation and amortization 4,575 860 5,435 181 5,616 Adjusted EBITDA $ 25,532 $ 4,962 $ 30,494 $ (8,393 ) $ 22,101 Adjusted EBITDA margin 18.0 % 7.0 % 14.3 % n/a 10.4 % (1) Includes gross profit adjustments of $94 and SG&A adjustments of $(631) (2) Includes environmental charges of $4,600 net of probable insurance recoveries of $6,000 MYERS INDUSTRIES, INC. RECONCILIATION OF NON-GAAP FINANCIAL MEASURES GROSS PROFIT, OPERATING INCOME AND EBITDA (UNAUDITED) (Dollars in thousands) Year Ended December 31, 2023 Material Handling Distribution Segment Total Corporate & Other Total Net sales $ 555,259 $ 257,875 $ 813,134 $ (67 ) $ 813,067 Net income 48,867 Net income margin 6.0 % Gross profit 259,086 Add: Restructuring expenses and other adjustments 829 Adjusted gross profit 259,915 Gross margin as adjusted 32.0 % Operating income (loss) 100,088 10,967 111,055 (38,650 ) 72,405 Operating income margin 18.0 % 4.3 % 13.7 % n/a 8.9 % Add: Executive severance costs — 410 410 289 699 Add: Restructuring expenses and other adjustments 1,456 914 2,370 166 2,536 Add: Acquisition and integration costs — 376 376 2,745 3,121 Less: Insurance recovery of legal fees(3) (6,700 ) — (6,700 ) — (6,700 ) Add: Environmental reserves, net(2) — — — 3,200 3,200 Adjusted operating income (loss)(1) 94,844 12,667 107,511 (32,250 ) 75,261 Adjusted operating income margin 17.1 % 4.9 % 13.2 % n/a 9.3 % Add: Depreciation and amortization 18,917 3,197 22,114 672 22,786 Adjusted EBITDA $ 113,761 $ 15,864 $ 129,625 $ (31,578 ) $ 98,047 Adjusted EBITDA margin 20.5 % 6.2 % 15.9 % n/a 12.1 % (1) Includes gross profit adjustments of $829 and SG&A adjustments of $2,027 (2) Includes environmental charges of $6,500 net of probable insurance recoveries of $3,300 (3) Includes total insurance recovery of $10,000 net of recoverable expenses incurred in the current period of $3,300 Year Ended December 31, 2022 Material Handling Distribution Segment Total Corporate & Other Total Net sales $ 647,619 $ 251,966 $ 899,585 $ (38 ) $ 899,547 Net income 60,267 Net income margin 6.7 % Gross profit 283,366 Add: Restructuring expenses and other adjustments 744 Adjusted gross profit 284,110 Gross margin as adjusted 31.6 % Operating income (loss) 104,079 15,862 119,941 (36,000 ) 83,941 Operating income margin 16.1 % 6.3 % 13.3 % n/a 9.3 % Add: Restructuring expenses and other adjustments 744 — 744 — 744 Add: Acquisition and integration costs — 377 377 621 998 Add: Loss on sale of assets 261 — 261 — 261 Add: Impairment of investment in legacy joint venture — 603 603 — 603 Add: Environmental reserves, net(2) — — — 1,400 1,400 Adjusted operating income (loss)(1) 105,084 16,842 121,926 (33,979 ) 87,947 Adjusted operating income margin 16.2 % 6.7 % 13.6 % n/a 9.8 % Add: Depreciation and amortization 17,814 2,889 20,703 513 21,216 Adjusted EBITDA $ 122,898 $ 19,731 $ 142,629 $ (33,466 ) $ 109,163 Adjusted EBITDA margin 19.0 % 7.8 % 15.9 % n/a 12.1 % (1) Includes gross profit adjustments of $744 and SG&A adjustments of $3,262 (2) Includes environmental charges of $7,400 net of probable insurance recoveries of $6,000 MYERS INDUSTRIES, INC. RECONCILIATION OF NON-GAAP FINANCIAL MEASURES ADJUSTED OPERATING INCOME, ADJUSTED EBITDA AND FREE CASH FLOW (UNAUDITED) (Dollars in thousands) Quarter Ended December 31, Year Ended December 31, 2023 2022 2023 2022 Adjusted operating income (loss) reconciliation: Operating income (loss) $ 18,603 $ 17,022 $ 72,405 $ 83,941 Executive severance costs — — 699 — Restructuring expenses and other adjustments 292 94 2,536 744 Acquisition and integration costs 2,698 166 3,121 998 Insurance recovery of legal fees (6,700 ) — (6,700 ) — Loss on sale of assets — — — 261 Impairment of investment in legacy joint venture — 603 — 603 Environmental reserves, net 1,000 (1,400 ) 3,200 1,400 Adjusted operating income (loss) $ 15,893 $ 16,485 $ 75,261 $ 87,947 Adjusted EBITDA reconciliation: Net income (loss) $ 12,539 $ 13,428 $ 48,867 $ 60,267 Income tax expense (benefit) 4,690 1,940 17,189 17,943 Interest expense, net 1,374 1,654 6,349 5,731 Operating income (loss) 18,603 17,022 72,405 83,941 Depreciation and amortization 5,882 5,616 22,786 21,216 Executive severance costs — — 699 — Restructuring expenses and other adjustments 292 94 2,536 744 Acquisition and integration costs 2,698 166 3,121 998 Insurance recovery of legal fees (6,700 ) — (6,700 ) — Loss on sale of assets — — — 261 Impairment of investment in legacy joint venture — 603 — 603 Environmental reserves, net 1,000 (1,400 ) 3,200 1,400 Adjusted EBITDA $ 21,775 $ 22,101 $ 98,047 $ 109,163 Free cash flow reconciliation: Net cash provided by (used for) operating activities $ 15,400 $ 21,862 $ 86,172 $ 72,621 Capital expenditures (3,563 ) (6,677 ) (22,855 ) (24,292 ) Free cash flow $ 11,837 $ 15,185 $ 63,317 $ 48,329 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 December 31, Year Ended December 31, 2023 2022 2023 2022 Adjusted net income (loss) reconciliation: Net income (loss) $ 12,539 $ 13,428 $ 48,867 $ 60,267 Income tax expense (benefit) 4,690 1,940 17,189 17,943 Income (loss) before income taxes 17,229 15,368 66,056 78,210 Executive severance costs — — 699 — Restructuring expenses and other adjustments 292 94 2,536 744 Acquisition and integration costs 2,698 166 3,121 998 Insurance recovery of legal fees (6,700 ) — (6,700 ) — Loss on sale of assets — — — 261 Impairment of investment in legacy joint venture — 603 — 603 Environmental reserves, net 1,000 (1,400 ) 3,200 1,400 Adjusted income (loss) before income taxes 14,519 14,831 68,912 82,216 Income tax expense, as adjusted (1) (3,630 ) (3,034 ) (17,228 ) (20,554 ) Adjusted net income (loss) $ 10,889 $ 11,797 $ 51,684 $ 61,662 Adjusted earnings per diluted share reconciliation: Net income (loss) per common diluted share $ 0.34 $ 0.36 $ 1.32 $ 1.64 Executive severance costs — — 0.02 — Restructuring expenses and other adjustments 0.00 0.00 0.06 0.02 Acquisition and integration costs 0.07 0.01 0.08 0.03 Insurance recovery of legal fees (0.18 ) — (0.18 ) — Loss on sale of assets — — — 0.01 Impairment of investment in legacy joint venture — 0.02 — 0.02 Environmental reserves, net 0.03 (0.04 ) 0.09 0.04 Adjusted effective income tax rate impact 0.03 (0.03 ) (0.00 ) (0.07 ) Adjusted earnings per diluted share(2) $ 0.29 $ 0.32 $ 1.39 $ 1.68 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 25%. (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 2024 Guidance Low High GAAP diluted net income per common share $ 1.03 $ 1.23 Add: Net restructuring expenses and other adjustments 0.04 0.04 Add: Acquisition and integration costs 0.32 0.26 Less: Adjusted effective income tax rate impact (1) (0.09 ) (0.08 ) Adjusted earnings per diluted share (2) $ 1.30 $ 1.45 (1) Income taxes are calculated using the normalized effective tax rate for each year. The rate used in 2024 is 25%. (2) Adjusted earnings per diluted share is calculated using the weighted average common shares outstanding. 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Myers Industries Announces Fourth Quarter and Full Year 2023 Results By: Myers Industries, Inc. via Business Wire March 05, 2024 at 06:30 AM EST Self-Help Initiatives and Myers Business System Drive Solid Operating Performance Company Initiates Fiscal Year 2024 Outlook and Expects Improved Profitability as Compared to Prior Year Myers to Host Investor & Analyst Day Event in New York City on March 19, 2024 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 fourth quarter and full year ended December 31, 2023. In reviewing the 2023 financial results, Myers Industries’ President and CEO Mike McGaugh commented, “Although our results were not what we originally planned to deliver in 2023, we remain encouraged by the resiliency of many of our business units despite continued cyclical headwinds in several of our key end markets. Demonstrating the strength of our diverse portfolio, 2023 marked a year of continued progress and still yielded one of the top years in the history of our company for adjusted earnings per share, adjusted EBITDA, and revenue. Further, year over year operating cash flow generation increased by $13.6 million and free cash flow generation increased by $15.0 million, as we continue to benefit from early implementation of the Myers Business System to help drive Operational Excellence.” Fourth Quarter 2023 Financial Highlights Net sales of $191.1 million compared to $212.8 million in the prior year period Gross margin of 30.0%, down 60 basis points versus the prior year period GAAP net income per diluted share of $0.34 compared to $0.36 in the prior year period Adjusted earnings per diluted share of $0.29 compared to $0.32 in the prior year period Cash flow provided by operations was $15.4 million and free cash flow was $11.8 million Full Year 2023 Financial Highlights Net sales of $813.1 million compared to $899.5 million in the prior year period Gross margin of 31.9%, up 40 basis points versus the prior year period GAAP net income per diluted share of $1.32 compared to $1.64 in the prior year period Adjusted earnings per diluted share of $1.39 compared to $1.68 in the prior year period Cash flow provided by operations was $86.2 million and free cash flow was $63.3 million Subsequent to fiscal year end, closed on acquisition of Signature Systems, enhancing Myers' long-term margin and EPS growth profiles Myers Industries’ President and CEO Mike McGaugh continued, “In closing 2023, our Material Handling segment delivered respectable fourth quarter financial results with continued strong margins in-spite of demand headwinds in RV, Marine, and Consumer end-markets. We continue to see results from our Operational Excellence and Commercial Excellence initiatives, what we call our Self-Help programs. As a result, when these cyclical end markets improve, we expect to benefit more than we have historically." “Our Distribution segment performance in 2023 was disappointing and not reflective of our expectations for this business. Our fourth quarter results were unfavorably impacted due to a short-term decline in sales volume and revenue, primarily a transition effect of our Distribution sales organization realignment, which was implemented in the third quarter of 2023. We expect our Distribution segment to demonstrate future revenue growth and improved profitability as we build on the scale and reach achieved from the Mohawk acquisition and begin to realize the benefits from our sales organization improvements.” “We continue to be excited about the growth and innovation projects in our Material Handling segment, many of which have a long-term growth runway. In particular, we see strong growth opportunities in Military cases, Industrial boxes, and our e-commerce sales channel. We also continue to be pleased with our progress on our Sustainability efforts, as highlighted in our third annual ESG report to be released this week.” McGaugh continued, “We’ve made another significant step forward in expanding our branded product portfolio, increasing our end-market diversification by acquiring Signature Systems. This business is less cyclical than our traditional portfolio of businesses, but it has similar cash flow generation potential, and it moves us into faster growing markets with greater tail winds. We believe Signature Systems is a catalyst for Myers’ transformation and a growth engine for the Company.” McGaugh concluded, “In 2023, we continued to improve our company; quite frankly, it is unrecognizable from the one I joined in the spring of 2020. We are confident that the progress we’ve made in our Commercial Excellence and Operational Excellence over the past few years, coupled with our leading brands in diverse end markets and our acquisition of Signature System, will serve as a solid foundation for meaningful shareholder value creation as we advance through our three-horizon strategy.” Fourth Quarter 2023 Financial Summary Quarter Ended December 31, (Dollars in thousands, except per share data) 2023 2022 % Inc (Dec) Net sales $191,077 $212,840 (10.2)% Gross profit $57,232 $65,074 (12.1)% Gross margin 30.0% 30.6% Operating income $18,603 $17,022 9.3% Net income $12,539 $13,428 (6.6)% Net income per diluted share $0.34 $0.36 (5.6)% Adjusted operating income $15,893 $16,485 (3.6)% Adjusted net income $10,889 $11,797 (7.7)% Adjusted earnings per diluted share $0.29 $0.32 (9.4)% Adjusted EBITDA $21,775 $22,101 (1.5)% Net sales were $191.1 million, a decrease of $21.8 million, or 10.2%, compared with $212.8 million for the fourth quarter of 2022. The decrease was the result of lower volume/pricing in certain targeted areas in the Material Handling segment and lower volume in Distribution. Gross profit decreased $7.8 million, or 12.1% to $57.2 million, as the contribution from lower raw material costs was not enough to offset lower volumes and pricing. Gross margin declined 60 basis points to 30.0% compared with 30.6% for the fourth quarter of 2022. Selling, general and administrative expenses decreased $8.7 million, or 18.3% to $38.7 million due to lower professional services and incentive compensation. SG&A as a percentage of sales decreased to 20.3%, compared with 22.3% in the same period last year. Net income per diluted share was $0.34, compared with $0.36 for the fourth quarter of 2022. Adjusted earnings per diluted share were $0.29, compared with $0.32 for the fourth quarter of 2022. Fourth 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 Q4 2023 Results $126.9 $29.9 23.6% $28.4 22.4% Q4 2022 Results $142.2 $20.9 14.7% $25.5 18.0% $ Increase (decrease) vs prior year ($15.3) $9.1 $2.9 % Increase (decrease) vs prior year (10.8)% 43.5% +890bps 11.2% +440bps Items in this table may not recalculate due to rounding Net sales for the Material Handling segment were $126.9 million, a decrease of $15.3 million, or 10.8%, compared with $142.2 million for the fourth quarter of 2022. Net sales decreased in the vehicle, food & beverage and consumer end markets, with the greatest reduction in demand for RV products, marine products, agriculture, and fuel container products, due in part to a slower hurricane season. Operating income increased 43.5% to $29.9 million, compared with $20.9 million in the fourth quarter of 2022. Operating income margin increased to 23.6% compared with 14.7% for the fourth quarter of 2022. Adjusted EBITDA margin improved by 440 basis points, primarily attributed to self-help initiatives, but partially dampened by a decrease in sales volume and pricing. Adjusted EBITDA increased 11.2% to $28.4 million, compared with $25.5 million in the fourth quarter of 2022. SG&A expenses were lower year-over-year, primarily due to a decrease in professional services and an insurance recovery of legal fees. Distribution Net Sales Op Income Op Income Margin Adj EBITDA Adj EBITDA Margin Q4 2023 Results $64.2 $0.3 0.5% $1.2 1.8% Q4 2022 Results $70.6 $3.4 4.8% $5.0 7.0% $ Increase (decrease) vs prior year ($6.4) ($3.1) ($3.8) % Increase (decrease) vs prior year (9.1)% (90.0)% -430bps (76.4)% -520bps Items in this table may not recalculate due to rounding Net sales for the Distribution segment were $64.2 million, a decrease of $6.4 million, or 9.1%, compared with $70.6 million for the fourth quarter of 2022. Operating income decreased $3.1 million to $0.3 million, compared with $3.4 million for the fourth quarter of 2022. Adjusted EBITDA decreased 76.4% to $1.2 million, compared with $5.0 million in the fourth quarter of 2022. The decrease in operating income and adjusted EBITDA was primarily due to lower volume and an unfavorable sale mix. The decrease in SG&A expenses was primarily the result of lower incentive compensation. The Distribution segment's operating income margin was 0.5% compared with 4.8% for the fourth quarter of 2022. The Distribution segment’s adjusted EBITDA margin was 1.8%, compared with 7.0% for the fourth quarter of 2022. The Distribution Segment continues to implement pricing actions to counter cost inflation and improve margin. Full Year 2023 Financial Summary Year Ended December 31, (Dollars in thousands, except per share data) 2023 2022 % Inc (Dec) Net sales $ 813,067 $ 899,547 (9.6 )% Gross profit $ 259,086 $ 283,366 (8.6 )% Gross margin 31.9 % 31.5 % Operating income $ 72,405 $ 83,941 (13.7 )% Net income $ 48,867 $ 60,267 (18.9 )% Net income per diluted share $ 1.32 $ 1.64 (19.5 )% Adjusted operating income $ 75,261 $ 87,947 (14.4 )% Adjusted net income $ 51,684 $ 61,662 (16.2 )% Adjusted earnings per diluted share $ 1.39 $ 1.68 (17.3 )% Adjusted EBITDA $ 98,047 $ 109,163 (10.2 )% Net sales for the full year of 2023 were $813.1 million, a decrease of $86.5 million, or 9.6%, compared with $899.5 million for the full year of 2022. The decrease was the result of lower volume and pricing in certain areas in the Material Handling segment, partially offset by higher sales in the Distribution segment largely from incremental sales of $23.1 million from Mohawk Rubber acquisition. Gross profit decreased $24.3 million, or 8.6% to $259.1 million, as the contribution from lower raw material costs was not enough to offset lower volumes and pricing. Gross margin expanded 40 basis points to 31.9% compared with 31.5% for the full year of 2022. Selling, general and administrative expenses decreased $12.6 million, or 6.3% to $186.9 million due to lower incentive compensation, commissions and facility costs. SG&A as a percentage of sales increased to 23.0%, compared with 22.2% in the same period last year. Net income per diluted share was $1.32, compared with $1.64 for the full year of 2022. Adjusted earnings per diluted share were $1.39, compared with $1.68 for the full year of 2022. Full Year 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 Full Year 2023 Results $555.3 $100.1 18.0% $113.8 20.5% Full Year 2022 Results $647.6 $104.1 16.1% $122.9 19.0% $ Increase (decrease) vs prior year ($92.4) ($4.0) ($9.1) % Increase (decrease) vs prior year (14.3)% (3.8)% +190bps (7.4)% +150bps Items in this table may not recalculate due to rounding Net sales for the Material Handling segment were $555.3 million, a decrease of $92.4 million, or 14.3%, compared with $647.6 million for the full year of 2022. Net sales decreased in the vehicle, industrial, food & beverage and consumer end markets, with the greatest reduction in demand for RV products, marine, construction products, and fuel container products, due in part to a slower hurricane season. Operating income decreased 3.8% to $100.1 million, compared with $104.1 million in the full year of 2022. Operating income margin increased to 18.0% compared with 16.1% for the full year of 2022. Adjusted EBITDA margin improved by 150 basis points, primarily attributed to self-help initiatives, but partially dampened by a decrease in sales volume. Adjusted EBITDA decreased 7.4% to $113.8 million, compared with $122.9 million in the full year of 2022. Lower sales volume and pricing more than offset lower raw material costs. SG&A expenses were lower year-over-year, primarily due to a decrease in professional services and insurance recovery of legal fees. Distribution Net Sales Op Income Op Income Margin Adj EBITDA Adj EBITDA Margin Full Year 2023 Results $257.9 $11.0 4.3% $15.9 6.2% Full Year 2022 Results $252.0 $15.9 6.3% $19.7 7.8% $ Increase (decrease) vs prior year $5.9 ($4.9) ($3.9) % Increase (decrease) vs prior year 2.3% (30.9)% -200bps (19.6)% -160bps Items in this table may not recalculate due to rounding Net sales for the Distribution segment were $257.9 million, an increase of $5.9 million, or 2.3%, compared with $252.0 million for the full year of 2022. Operating income decreased $4.9 million to $11.0 million, compared with $15.9 million for the full year of 2022. Adjusted EBITDA decreased 19.6% to $15.9 million, compared with $19.7 million in the full year of 2022. The decrease in operating income and adjusted EBITDA was primarily due to lower volume/mix and higher SG&A. The increase in SG&A expenses was primarily the result of the Mohawk Rubber acquisition and higher salaries. The Distribution segment's operating income margin was 4.3% compared with 6.3% for the full year of 2022. The Distribution segment’s adjusted EBITDA margin was 6.2%, compared with 7.8% for the full year of 2022. The Distribution Segment continues to implement pricing actions to counter cost inflation and improve margin. Balance Sheet & Cash Flow As of December 31, 2023, the Company’s cash on hand totaled $30.3 million. Total debt as of December 31, 2023 was $67.2 million. For the fourth quarter of 2023, cash flow provided by operations was $15.4 million and free cash flow was $11.8 million, compared with cash flow provided by operations of $21.9 million and free cash flow of $15.2 million for the fourth quarter of 2022. For the full year of 2023, cash flow provided by operations was $86.2 million and free cash flow was $63.3 million, compared with cash flow provided by operations of $72.6 million and free cash flow of $48.3 million for the full year of 2022. The increase in cash flow was driven primarily by a decrease in working capital. Capital expenditures for the fourth quarter of 2023 were $3.6 million, compared with $6.7 million for the fourth quarter of 2022. Capital expenditures for the full year of 2023 were $22.9 million, compared with $24.3 million for the full year of 2022. Closing of Previously Announced Acquisition of Signature Systems On February 8, 2024, the Company announced that it completed its acquisition of Signature Systems (“Signature”), which was previously announced on January 2, 2024. The cash transaction of $350 million was funded through an Amendment to Myers’ existing $250 million revolving credit facility and a new $400 million 5-year senior secured term loan A facility. The term loan A facility was upsized by $50.0 million since the Signature Systems transaction was initially announced. As of closing, the Company’s net leverage ratio was approximately 3.0x, which is within management’s target range. Future financial results of Signature Systems are expected to be disclosed within Myers’ Material Handling segment. Chief Financial Officer Grant Fitz commented, “As a reminder, this transaction is expected to be neutral to slightly dilutive to US GAAP EPS in fiscal year 2024, but we anticipate Signature will deliver earnings accretion of between $0.20 and $0.30 in 2025, and between $0.40 and $0.50 in 2026, with the potential for additional meaningful earnings accretion beyond 2026. We also expect annualized run-rate operational and cost synergies of $8 million will be fully captured by 2025,with additional synergies to be realized once Signature has an opportunity to leverage the Myers Business System. Finally, we remind investors that we anticipate reducing our net leverage ratio below 2.0x within two years of closing of this transaction, which would enable continued acquisitive growth. 2024 Investor Day The Company will host an Investor and Analyst Day on Tuesday, March 19th, 2024 at The Harvard Club in New York City. The event will feature a showcase of Myers’ diverse product portfolio and will be accompanied by presentations from members of Myers’ executive management that will outline the Company’s long-term strategy and outlook. 2024 Outlook Based on current exchange rates, market outlook, and business forecast, the Company provided the following outlook for fiscal 2024: Net sales growth of 15% - 20% Net income per diluted share in the range of $1.03 to $1.23* Adjusted earnings per diluted share range of $1.30 to $1.45* Capital expenditures to be in the range of $35 to $40 million Effective tax rate to approximate 25% * Subject to completion of purchase accounting for the February 8, 2024 acquisition of Signature Systems, which could have positive or negative impact on EPS metrics related to depreciation and amortization. We will continue to monitor market conditions and provide updates as we progress throughout the year Conference Call Details The Company will host an earnings conference call and webcast for investors and analysts on Tuesday, March 5, 2024, 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=fc15d634&confId=59274 .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 Access Code: 269707. 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 Year Ended December 31, 2023 December 31, 2022 December 31, 2023 December 31, 2022 Net sales $ 191,077 $ 212,840 $ 813,067 $ 899,547 Cost of sales 133,845 147,766 553,981 616,181 Gross profit 57,232 65,074 259,086 283,366 Selling, general and administrative expenses 38,746 47,423 186,876 199,489 (Gain) loss on disposal of fixed assets (117 ) 26 (195 ) (667 ) Other (income) expenses — 603 — 603 Operating income (loss) 18,603 17,022 72,405 83,941 Interest expense, net 1,374 1,654 6,349 5,731 Income (loss) before income taxes 17,229 15,368 66,056 78,210 Income tax expense (benefit) 4,690 1,940 17,189 17,943 Net income (loss) $ 12,539 $ 13,428 $ 48,867 $ 60,267 Net income (loss) per common share: Basic $ 0.34 $ 0.37 $ 1.33 $ 1.66 Diluted $ 0.34 $ 0.36 $ 1.32 $ 1.64 Weighted average common shares outstanding: Basic 36,840,253 36,495,362 36,744,560 36,411,389 Diluted 37,142,056 36,853,237 37,095,568 36,790,839 MYERS INDUSTRIES, INC. CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (UNAUDITED) (Dollars in thousands) December 31, 2023 December 31, 2022 Assets Current Assets Cash $ 30,290 $ 23,139 Trade accounts receivable, net 113,907 126,184 Other accounts receivable, net 14,726 7,532 Inventories, net 90,844 93,351 Other current assets 6,854 7,001 Total Current Assets 256,621 257,207 Property, plant, & equipment, net 107,933 101,566 Right of use asset - operating leases 27,989 28,908 Deferred income taxes 209 129 Other assets 148,879 154,824 Total Assets $ 541,631 $ 542,634 Liabilities & Shareholders' Equity Current Liabilities Accounts payable $ 79,050 $ 73,536 Accrued expenses 53,523 57,531 Operating lease liability - short-term 5,943 6,177 Finance lease liability - short-term 593 518 Long-term debt - current portion 25,998 - Total Current Liabilities 165,107 137,762 Long-term debt 31,989 93,962 Operating lease liability - long-term 22,352 22,786 Finance lease liability - long-term 8,615 8,919 Other liabilities 12,108 15,270 Deferred income taxes 8,660 7,508 Total Shareholders' Equity 292,800 256,427 Total Liabilities & Shareholders' Equity $ 541,631 $ 542,634 MYERS INDUSTRIES, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (Dollars in thousands) Quarter Ended December 31, Year Ended December 31, 2023 2022 2023 2022 Cash Flows From Operating Activities Net income $ 12,539 $ 13,428 $ 48,867 $ 60,267 Adjustments to reconcile net income to net cash provided by (used for) operating activities Depreciation and amortization 5,882 5,616 22,786 21,216 Amortization of deferred financing costs 79 78 313 441 Non-cash stock-based compensation expense 1,593 2,268 6,671 7,436 (Gain) loss on disposal of fixed assets (117 ) 26 (195 ) (667 ) Deferred taxes 1,039 2,072 1,039 2,072 Other (1,529 ) 1,228 944 1,520 Cash flows provided by (used for) working capital Accounts receivable - trade and other, net (11,108 ) (4,874 ) 2,656 (23,625 ) Inventories 5,535 14,971 2,630 7,955 Prepaid expenses and other current assets 2,204 3,503 151 (1,409 ) Accounts payable and accrued expenses (717 ) (16,454 ) 310 (2,585 ) Net cash provided by (used for) operating activities 15,400 21,862 86,172 72,621 Cash Flows From Investing Activities Capital expenditures (3,563 ) (6,677 ) (22,855 ) (24,292 ) Acquisition of business, net of cash acquired — (3,373 ) (160 ) (27,626 ) Proceeds from sale of property, plant, and equipment 116 12 258 1,537 Net cash provided by (used for) investing activities (3,447 ) (10,038 ) (22,757 ) (50,381 ) Cash Flows From Financing Activities Net borrowings (repayments) from revolving credit facility (2,000 ) (4,000 ) (36,000 ) 3,000 Payments on finance lease (139 ) (126 ) (542 ) (500 ) Cash dividends paid (4,974 ) (4,925 ) (20,240 ) (19,797 ) Proceeds from issuance of common stock 390 261 2,338 2,320 Shares withheld for employee taxes on equity awards (17 ) (1 ) (2,072 ) (451 ) Deferred financing fees — (171 ) — (889 ) Net cash provided by (used for) financing activities (6,740 ) (8,962 ) (56,516 ) (16,317 ) Foreign exchange rate effect on cash 309 (147 ) 252 (439 ) Net increase (decrease) in cash 5,522 2,715 7,151 5,484 Beginning Cash 24,768 20,424 23,139 17,655 Ending Cash $ 30,290 $ 23,139 $ 30,290 $ 23,139 MYERS INDUSTRIES, INC. RECONCILIATION OF NON-GAAP FINANCIAL MEASURES GROSS PROFIT, OPERATING INCOME AND EBITDA (UNAUDITED) (Dollars in thousands) Quarter Ended December 31, 2023 Material Handling Distribution Segment Total Corporate & Other Total Net sales $ 126,918 $ 64,182 $ 191,100 $ (23 ) $ 191,077 Net income 12,539 Net income margin 6.6 % Gross profit 57,232 Add: Restructuring expenses and other adjustments 240 Adjusted gross profit 57,472 Gross margin as adjusted 30.1 % Operating income (loss) 29,931 339 30,270 (11,667 ) 18,603 Operating income margin 23.6 % 0.5 % 15.8 % n/a 9.7 % Add: Restructuring expenses and other adjustments 231 61 292 — 292 Add: Acquisition and integration costs — 79 79 2,619 2,698 Less: Insurance recovery of legal fees(3) (6,700 ) — (6,700 ) — (6,700 ) Add: Environmental reserves, net(2) — — — 1,000 1,000 Adjusted operating income (loss)(1) 23,462 479 23,941 (8,048 ) 15,893 Adjusted operating income margin 18.5 % 0.7 % 12.5 % n/a 8.3 % Add: Depreciation and amortization 4,922 692 5,614 268 5,882 Adjusted EBITDA $ 28,384 $ 1,171 $ 29,555 $ (7,780 ) $ 21,775 Adjusted EBITDA margin 22.4 % 1.8 % 15.5 % n/a 11.4 % (1) Includes gross profit adjustments of $240 and SG&A adjustments of $(2,950) (2) Includes environmental charges of $2,700 net of probable insurance recoveries of $1,700 (3) Includes total insurance recovery of $10,000 net of recoverable expenses incurred in the current year of $3,300 Quarter Ended December 31, 2022 Material Handling Distribution Segment Total Corporate & Other Total Net sales $ 142,235 $ 70,614 $ 212,849 $ (9 ) $ 212,840 Net income 13,428 Net income margin 6.3 % Gross profit 65,074 Add: Restructuring expenses and other adjustments 94 Adjusted gross profit 65,168 Gross margin as adjusted 30.6 % Operating income (loss) 20,863 3,393 24,256 (7,234 ) 17,022 Operating income margin 14.7 % 4.8 % 11.4 % n/a 8.0 % Add: Restructuring expenses and other adjustments 94 — 94 — 94 Add: Acquisition and integration costs — 106 106 60 166 Add: Impairment of investment in legacy joint venture — 603 603 — 603 Less: Environmental reserves, net(2) — — — (1,400 ) (1,400 ) Adjusted operating income (loss)(1) 20,957 4,102 25,059 (8,574 ) 16,485 Adjusted operating income margin 14.7 % 5.8 % 11.8 % n/a 7.7 % Add: Depreciation and amortization 4,575 860 5,435 181 5,616 Adjusted EBITDA $ 25,532 $ 4,962 $ 30,494 $ (8,393 ) $ 22,101 Adjusted EBITDA margin 18.0 % 7.0 % 14.3 % n/a 10.4 % (1) Includes gross profit adjustments of $94 and SG&A adjustments of $(631) (2) Includes environmental charges of $4,600 net of probable insurance recoveries of $6,000 MYERS INDUSTRIES, INC. RECONCILIATION OF NON-GAAP FINANCIAL MEASURES GROSS PROFIT, OPERATING INCOME AND EBITDA (UNAUDITED) (Dollars in thousands) Year Ended December 31, 2023 Material Handling Distribution Segment Total Corporate & Other Total Net sales $ 555,259 $ 257,875 $ 813,134 $ (67 ) $ 813,067 Net income 48,867 Net income margin 6.0 % Gross profit 259,086 Add: Restructuring expenses and other adjustments 829 Adjusted gross profit 259,915 Gross margin as adjusted 32.0 % Operating income (loss) 100,088 10,967 111,055 (38,650 ) 72,405 Operating income margin 18.0 % 4.3 % 13.7 % n/a 8.9 % Add: Executive severance costs — 410 410 289 699 Add: Restructuring expenses and other adjustments 1,456 914 2,370 166 2,536 Add: Acquisition and integration costs — 376 376 2,745 3,121 Less: Insurance recovery of legal fees(3) (6,700 ) — (6,700 ) — (6,700 ) Add: Environmental reserves, net(2) — — — 3,200 3,200 Adjusted operating income (loss)(1) 94,844 12,667 107,511 (32,250 ) 75,261 Adjusted operating income margin 17.1 % 4.9 % 13.2 % n/a 9.3 % Add: Depreciation and amortization 18,917 3,197 22,114 672 22,786 Adjusted EBITDA $ 113,761 $ 15,864 $ 129,625 $ (31,578 ) $ 98,047 Adjusted EBITDA margin 20.5 % 6.2 % 15.9 % n/a 12.1 % (1) Includes gross profit adjustments of $829 and SG&A adjustments of $2,027 (2) Includes environmental charges of $6,500 net of probable insurance recoveries of $3,300 (3) Includes total insurance recovery of $10,000 net of recoverable expenses incurred in the current period of $3,300 Year Ended December 31, 2022 Material Handling Distribution Segment Total Corporate & Other Total Net sales $ 647,619 $ 251,966 $ 899,585 $ (38 ) $ 899,547 Net income 60,267 Net income margin 6.7 % Gross profit 283,366 Add: Restructuring expenses and other adjustments 744 Adjusted gross profit 284,110 Gross margin as adjusted 31.6 % Operating income (loss) 104,079 15,862 119,941 (36,000 ) 83,941 Operating income margin 16.1 % 6.3 % 13.3 % n/a 9.3 % Add: Restructuring expenses and other adjustments 744 — 744 — 744 Add: Acquisition and integration costs — 377 377 621 998 Add: Loss on sale of assets 261 — 261 — 261 Add: Impairment of investment in legacy joint venture — 603 603 — 603 Add: Environmental reserves, net(2) — — — 1,400 1,400 Adjusted operating income (loss)(1) 105,084 16,842 121,926 (33,979 ) 87,947 Adjusted operating income margin 16.2 % 6.7 % 13.6 % n/a 9.8 % Add: Depreciation and amortization 17,814 2,889 20,703 513 21,216 Adjusted EBITDA $ 122,898 $ 19,731 $ 142,629 $ (33,466 ) $ 109,163 Adjusted EBITDA margin 19.0 % 7.8 % 15.9 % n/a 12.1 % (1) Includes gross profit adjustments of $744 and SG&A adjustments of $3,262 (2) Includes environmental charges of $7,400 net of probable insurance recoveries of $6,000 MYERS INDUSTRIES, INC. RECONCILIATION OF NON-GAAP FINANCIAL MEASURES ADJUSTED OPERATING INCOME, ADJUSTED EBITDA AND FREE CASH FLOW (UNAUDITED) (Dollars in thousands) Quarter Ended December 31, Year Ended December 31, 2023 2022 2023 2022 Adjusted operating income (loss) reconciliation: Operating income (loss) $ 18,603 $ 17,022 $ 72,405 $ 83,941 Executive severance costs — — 699 — Restructuring expenses and other adjustments 292 94 2,536 744 Acquisition and integration costs 2,698 166 3,121 998 Insurance recovery of legal fees (6,700 ) — (6,700 ) — Loss on sale of assets — — — 261 Impairment of investment in legacy joint venture — 603 — 603 Environmental reserves, net 1,000 (1,400 ) 3,200 1,400 Adjusted operating income (loss) $ 15,893 $ 16,485 $ 75,261 $ 87,947 Adjusted EBITDA reconciliation: Net income (loss) $ 12,539 $ 13,428 $ 48,867 $ 60,267 Income tax expense (benefit) 4,690 1,940 17,189 17,943 Interest expense, net 1,374 1,654 6,349 5,731 Operating income (loss) 18,603 17,022 72,405 83,941 Depreciation and amortization 5,882 5,616 22,786 21,216 Executive severance costs — — 699 — Restructuring expenses and other adjustments 292 94 2,536 744 Acquisition and integration costs 2,698 166 3,121 998 Insurance recovery of legal fees (6,700 ) — (6,700 ) — Loss on sale of assets — — — 261 Impairment of investment in legacy joint venture — 603 — 603 Environmental reserves, net 1,000 (1,400 ) 3,200 1,400 Adjusted EBITDA $ 21,775 $ 22,101 $ 98,047 $ 109,163 Free cash flow reconciliation: Net cash provided by (used for) operating activities $ 15,400 $ 21,862 $ 86,172 $ 72,621 Capital expenditures (3,563 ) (6,677 ) (22,855 ) (24,292 ) Free cash flow $ 11,837 $ 15,185 $ 63,317 $ 48,329 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 December 31, Year Ended December 31, 2023 2022 2023 2022 Adjusted net income (loss) reconciliation: Net income (loss) $ 12,539 $ 13,428 $ 48,867 $ 60,267 Income tax expense (benefit) 4,690 1,940 17,189 17,943 Income (loss) before income taxes 17,229 15,368 66,056 78,210 Executive severance costs — — 699 — Restructuring expenses and other adjustments 292 94 2,536 744 Acquisition and integration costs 2,698 166 3,121 998 Insurance recovery of legal fees (6,700 ) — (6,700 ) — Loss on sale of assets — — — 261 Impairment of investment in legacy joint venture — 603 — 603 Environmental reserves, net 1,000 (1,400 ) 3,200 1,400 Adjusted income (loss) before income taxes 14,519 14,831 68,912 82,216 Income tax expense, as adjusted (1) (3,630 ) (3,034 ) (17,228 ) (20,554 ) Adjusted net income (loss) $ 10,889 $ 11,797 $ 51,684 $ 61,662 Adjusted earnings per diluted share reconciliation: Net income (loss) per common diluted share $ 0.34 $ 0.36 $ 1.32 $ 1.64 Executive severance costs — — 0.02 — Restructuring expenses and other adjustments 0.00 0.00 0.06 0.02 Acquisition and integration costs 0.07 0.01 0.08 0.03 Insurance recovery of legal fees (0.18 ) — (0.18 ) — Loss on sale of assets — — — 0.01 Impairment of investment in legacy joint venture — 0.02 — 0.02 Environmental reserves, net 0.03 (0.04 ) 0.09 0.04 Adjusted effective income tax rate impact 0.03 (0.03 ) (0.00 ) (0.07 ) Adjusted earnings per diluted share(2) $ 0.29 $ 0.32 $ 1.39 $ 1.68 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 25%. (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 2024 Guidance Low High GAAP diluted net income per common share $ 1.03 $ 1.23 Add: Net restructuring expenses and other adjustments 0.04 0.04 Add: Acquisition and integration costs 0.32 0.26 Less: Adjusted effective income tax rate impact (1) (0.09 ) (0.08 ) Adjusted earnings per diluted share (2) $ 1.30 $ 1.45 (1) Income taxes are calculated using the normalized effective tax rate for each year. The rate used in 2024 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/20240305108379/en/Contacts Meghan Beringer, Senior Director Investor Relations, 252-536-5651
Self-Help Initiatives and Myers Business System Drive Solid Operating Performance Company Initiates Fiscal Year 2024 Outlook and Expects Improved Profitability as Compared to Prior Year Myers to Host Investor & Analyst Day Event in New York City on March 19, 2024
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 fourth quarter and full year ended December 31, 2023. In reviewing the 2023 financial results, Myers Industries’ President and CEO Mike McGaugh commented, “Although our results were not what we originally planned to deliver in 2023, we remain encouraged by the resiliency of many of our business units despite continued cyclical headwinds in several of our key end markets. Demonstrating the strength of our diverse portfolio, 2023 marked a year of continued progress and still yielded one of the top years in the history of our company for adjusted earnings per share, adjusted EBITDA, and revenue. Further, year over year operating cash flow generation increased by $13.6 million and free cash flow generation increased by $15.0 million, as we continue to benefit from early implementation of the Myers Business System to help drive Operational Excellence.” Fourth Quarter 2023 Financial Highlights Net sales of $191.1 million compared to $212.8 million in the prior year period Gross margin of 30.0%, down 60 basis points versus the prior year period GAAP net income per diluted share of $0.34 compared to $0.36 in the prior year period Adjusted earnings per diluted share of $0.29 compared to $0.32 in the prior year period Cash flow provided by operations was $15.4 million and free cash flow was $11.8 million Full Year 2023 Financial Highlights Net sales of $813.1 million compared to $899.5 million in the prior year period Gross margin of 31.9%, up 40 basis points versus the prior year period GAAP net income per diluted share of $1.32 compared to $1.64 in the prior year period Adjusted earnings per diluted share of $1.39 compared to $1.68 in the prior year period Cash flow provided by operations was $86.2 million and free cash flow was $63.3 million Subsequent to fiscal year end, closed on acquisition of Signature Systems, enhancing Myers' long-term margin and EPS growth profiles Myers Industries’ President and CEO Mike McGaugh continued, “In closing 2023, our Material Handling segment delivered respectable fourth quarter financial results with continued strong margins in-spite of demand headwinds in RV, Marine, and Consumer end-markets. We continue to see results from our Operational Excellence and Commercial Excellence initiatives, what we call our Self-Help programs. As a result, when these cyclical end markets improve, we expect to benefit more than we have historically." “Our Distribution segment performance in 2023 was disappointing and not reflective of our expectations for this business. Our fourth quarter results were unfavorably impacted due to a short-term decline in sales volume and revenue, primarily a transition effect of our Distribution sales organization realignment, which was implemented in the third quarter of 2023. We expect our Distribution segment to demonstrate future revenue growth and improved profitability as we build on the scale and reach achieved from the Mohawk acquisition and begin to realize the benefits from our sales organization improvements.” “We continue to be excited about the growth and innovation projects in our Material Handling segment, many of which have a long-term growth runway. In particular, we see strong growth opportunities in Military cases, Industrial boxes, and our e-commerce sales channel. We also continue to be pleased with our progress on our Sustainability efforts, as highlighted in our third annual ESG report to be released this week.” McGaugh continued, “We’ve made another significant step forward in expanding our branded product portfolio, increasing our end-market diversification by acquiring Signature Systems. This business is less cyclical than our traditional portfolio of businesses, but it has similar cash flow generation potential, and it moves us into faster growing markets with greater tail winds. We believe Signature Systems is a catalyst for Myers’ transformation and a growth engine for the Company.” McGaugh concluded, “In 2023, we continued to improve our company; quite frankly, it is unrecognizable from the one I joined in the spring of 2020. We are confident that the progress we’ve made in our Commercial Excellence and Operational Excellence over the past few years, coupled with our leading brands in diverse end markets and our acquisition of Signature System, will serve as a solid foundation for meaningful shareholder value creation as we advance through our three-horizon strategy.” Fourth Quarter 2023 Financial Summary Quarter Ended December 31, (Dollars in thousands, except per share data) 2023 2022 % Inc (Dec) Net sales $191,077 $212,840 (10.2)% Gross profit $57,232 $65,074 (12.1)% Gross margin 30.0% 30.6% Operating income $18,603 $17,022 9.3% Net income $12,539 $13,428 (6.6)% Net income per diluted share $0.34 $0.36 (5.6)% Adjusted operating income $15,893 $16,485 (3.6)% Adjusted net income $10,889 $11,797 (7.7)% Adjusted earnings per diluted share $0.29 $0.32 (9.4)% Adjusted EBITDA $21,775 $22,101 (1.5)% Net sales were $191.1 million, a decrease of $21.8 million, or 10.2%, compared with $212.8 million for the fourth quarter of 2022. The decrease was the result of lower volume/pricing in certain targeted areas in the Material Handling segment and lower volume in Distribution. Gross profit decreased $7.8 million, or 12.1% to $57.2 million, as the contribution from lower raw material costs was not enough to offset lower volumes and pricing. Gross margin declined 60 basis points to 30.0% compared with 30.6% for the fourth quarter of 2022. Selling, general and administrative expenses decreased $8.7 million, or 18.3% to $38.7 million due to lower professional services and incentive compensation. SG&A as a percentage of sales decreased to 20.3%, compared with 22.3% in the same period last year. Net income per diluted share was $0.34, compared with $0.36 for the fourth quarter of 2022. Adjusted earnings per diluted share were $0.29, compared with $0.32 for the fourth quarter of 2022. Fourth 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 Q4 2023 Results $126.9 $29.9 23.6% $28.4 22.4% Q4 2022 Results $142.2 $20.9 14.7% $25.5 18.0% $ Increase (decrease) vs prior year ($15.3) $9.1 $2.9 % Increase (decrease) vs prior year (10.8)% 43.5% +890bps 11.2% +440bps Items in this table may not recalculate due to rounding Net sales for the Material Handling segment were $126.9 million, a decrease of $15.3 million, or 10.8%, compared with $142.2 million for the fourth quarter of 2022. Net sales decreased in the vehicle, food & beverage and consumer end markets, with the greatest reduction in demand for RV products, marine products, agriculture, and fuel container products, due in part to a slower hurricane season. Operating income increased 43.5% to $29.9 million, compared with $20.9 million in the fourth quarter of 2022. Operating income margin increased to 23.6% compared with 14.7% for the fourth quarter of 2022. Adjusted EBITDA margin improved by 440 basis points, primarily attributed to self-help initiatives, but partially dampened by a decrease in sales volume and pricing. Adjusted EBITDA increased 11.2% to $28.4 million, compared with $25.5 million in the fourth quarter of 2022. SG&A expenses were lower year-over-year, primarily due to a decrease in professional services and an insurance recovery of legal fees. Distribution Net Sales Op Income Op Income Margin Adj EBITDA Adj EBITDA Margin Q4 2023 Results $64.2 $0.3 0.5% $1.2 1.8% Q4 2022 Results $70.6 $3.4 4.8% $5.0 7.0% $ Increase (decrease) vs prior year ($6.4) ($3.1) ($3.8) % Increase (decrease) vs prior year (9.1)% (90.0)% -430bps (76.4)% -520bps Items in this table may not recalculate due to rounding Net sales for the Distribution segment were $64.2 million, a decrease of $6.4 million, or 9.1%, compared with $70.6 million for the fourth quarter of 2022. Operating income decreased $3.1 million to $0.3 million, compared with $3.4 million for the fourth quarter of 2022. Adjusted EBITDA decreased 76.4% to $1.2 million, compared with $5.0 million in the fourth quarter of 2022. The decrease in operating income and adjusted EBITDA was primarily due to lower volume and an unfavorable sale mix. The decrease in SG&A expenses was primarily the result of lower incentive compensation. The Distribution segment's operating income margin was 0.5% compared with 4.8% for the fourth quarter of 2022. The Distribution segment’s adjusted EBITDA margin was 1.8%, compared with 7.0% for the fourth quarter of 2022. The Distribution Segment continues to implement pricing actions to counter cost inflation and improve margin. Full Year 2023 Financial Summary Year Ended December 31, (Dollars in thousands, except per share data) 2023 2022 % Inc (Dec) Net sales $ 813,067 $ 899,547 (9.6 )% Gross profit $ 259,086 $ 283,366 (8.6 )% Gross margin 31.9 % 31.5 % Operating income $ 72,405 $ 83,941 (13.7 )% Net income $ 48,867 $ 60,267 (18.9 )% Net income per diluted share $ 1.32 $ 1.64 (19.5 )% Adjusted operating income $ 75,261 $ 87,947 (14.4 )% Adjusted net income $ 51,684 $ 61,662 (16.2 )% Adjusted earnings per diluted share $ 1.39 $ 1.68 (17.3 )% Adjusted EBITDA $ 98,047 $ 109,163 (10.2 )% Net sales for the full year of 2023 were $813.1 million, a decrease of $86.5 million, or 9.6%, compared with $899.5 million for the full year of 2022. The decrease was the result of lower volume and pricing in certain areas in the Material Handling segment, partially offset by higher sales in the Distribution segment largely from incremental sales of $23.1 million from Mohawk Rubber acquisition. Gross profit decreased $24.3 million, or 8.6% to $259.1 million, as the contribution from lower raw material costs was not enough to offset lower volumes and pricing. Gross margin expanded 40 basis points to 31.9% compared with 31.5% for the full year of 2022. Selling, general and administrative expenses decreased $12.6 million, or 6.3% to $186.9 million due to lower incentive compensation, commissions and facility costs. SG&A as a percentage of sales increased to 23.0%, compared with 22.2% in the same period last year. Net income per diluted share was $1.32, compared with $1.64 for the full year of 2022. Adjusted earnings per diluted share were $1.39, compared with $1.68 for the full year of 2022. Full Year 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 Full Year 2023 Results $555.3 $100.1 18.0% $113.8 20.5% Full Year 2022 Results $647.6 $104.1 16.1% $122.9 19.0% $ Increase (decrease) vs prior year ($92.4) ($4.0) ($9.1) % Increase (decrease) vs prior year (14.3)% (3.8)% +190bps (7.4)% +150bps Items in this table may not recalculate due to rounding Net sales for the Material Handling segment were $555.3 million, a decrease of $92.4 million, or 14.3%, compared with $647.6 million for the full year of 2022. Net sales decreased in the vehicle, industrial, food & beverage and consumer end markets, with the greatest reduction in demand for RV products, marine, construction products, and fuel container products, due in part to a slower hurricane season. Operating income decreased 3.8% to $100.1 million, compared with $104.1 million in the full year of 2022. Operating income margin increased to 18.0% compared with 16.1% for the full year of 2022. Adjusted EBITDA margin improved by 150 basis points, primarily attributed to self-help initiatives, but partially dampened by a decrease in sales volume. Adjusted EBITDA decreased 7.4% to $113.8 million, compared with $122.9 million in the full year of 2022. Lower sales volume and pricing more than offset lower raw material costs. SG&A expenses were lower year-over-year, primarily due to a decrease in professional services and insurance recovery of legal fees. Distribution Net Sales Op Income Op Income Margin Adj EBITDA Adj EBITDA Margin Full Year 2023 Results $257.9 $11.0 4.3% $15.9 6.2% Full Year 2022 Results $252.0 $15.9 6.3% $19.7 7.8% $ Increase (decrease) vs prior year $5.9 ($4.9) ($3.9) % Increase (decrease) vs prior year 2.3% (30.9)% -200bps (19.6)% -160bps Items in this table may not recalculate due to rounding Net sales for the Distribution segment were $257.9 million, an increase of $5.9 million, or 2.3%, compared with $252.0 million for the full year of 2022. Operating income decreased $4.9 million to $11.0 million, compared with $15.9 million for the full year of 2022. Adjusted EBITDA decreased 19.6% to $15.9 million, compared with $19.7 million in the full year of 2022. The decrease in operating income and adjusted EBITDA was primarily due to lower volume/mix and higher SG&A. The increase in SG&A expenses was primarily the result of the Mohawk Rubber acquisition and higher salaries. The Distribution segment's operating income margin was 4.3% compared with 6.3% for the full year of 2022. The Distribution segment’s adjusted EBITDA margin was 6.2%, compared with 7.8% for the full year of 2022. The Distribution Segment continues to implement pricing actions to counter cost inflation and improve margin. Balance Sheet & Cash Flow As of December 31, 2023, the Company’s cash on hand totaled $30.3 million. Total debt as of December 31, 2023 was $67.2 million. For the fourth quarter of 2023, cash flow provided by operations was $15.4 million and free cash flow was $11.8 million, compared with cash flow provided by operations of $21.9 million and free cash flow of $15.2 million for the fourth quarter of 2022. For the full year of 2023, cash flow provided by operations was $86.2 million and free cash flow was $63.3 million, compared with cash flow provided by operations of $72.6 million and free cash flow of $48.3 million for the full year of 2022. The increase in cash flow was driven primarily by a decrease in working capital. Capital expenditures for the fourth quarter of 2023 were $3.6 million, compared with $6.7 million for the fourth quarter of 2022. Capital expenditures for the full year of 2023 were $22.9 million, compared with $24.3 million for the full year of 2022. Closing of Previously Announced Acquisition of Signature Systems On February 8, 2024, the Company announced that it completed its acquisition of Signature Systems (“Signature”), which was previously announced on January 2, 2024. The cash transaction of $350 million was funded through an Amendment to Myers’ existing $250 million revolving credit facility and a new $400 million 5-year senior secured term loan A facility. The term loan A facility was upsized by $50.0 million since the Signature Systems transaction was initially announced. As of closing, the Company’s net leverage ratio was approximately 3.0x, which is within management’s target range. Future financial results of Signature Systems are expected to be disclosed within Myers’ Material Handling segment. Chief Financial Officer Grant Fitz commented, “As a reminder, this transaction is expected to be neutral to slightly dilutive to US GAAP EPS in fiscal year 2024, but we anticipate Signature will deliver earnings accretion of between $0.20 and $0.30 in 2025, and between $0.40 and $0.50 in 2026, with the potential for additional meaningful earnings accretion beyond 2026. We also expect annualized run-rate operational and cost synergies of $8 million will be fully captured by 2025,with additional synergies to be realized once Signature has an opportunity to leverage the Myers Business System. Finally, we remind investors that we anticipate reducing our net leverage ratio below 2.0x within two years of closing of this transaction, which would enable continued acquisitive growth. 2024 Investor Day The Company will host an Investor and Analyst Day on Tuesday, March 19th, 2024 at The Harvard Club in New York City. The event will feature a showcase of Myers’ diverse product portfolio and will be accompanied by presentations from members of Myers’ executive management that will outline the Company’s long-term strategy and outlook. 2024 Outlook Based on current exchange rates, market outlook, and business forecast, the Company provided the following outlook for fiscal 2024: Net sales growth of 15% - 20% Net income per diluted share in the range of $1.03 to $1.23* Adjusted earnings per diluted share range of $1.30 to $1.45* Capital expenditures to be in the range of $35 to $40 million Effective tax rate to approximate 25% * Subject to completion of purchase accounting for the February 8, 2024 acquisition of Signature Systems, which could have positive or negative impact on EPS metrics related to depreciation and amortization. We will continue to monitor market conditions and provide updates as we progress throughout the year Conference Call Details The Company will host an earnings conference call and webcast for investors and analysts on Tuesday, March 5, 2024, 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=fc15d634&confId=59274 .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 Access Code: 269707. 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 Year Ended December 31, 2023 December 31, 2022 December 31, 2023 December 31, 2022 Net sales $ 191,077 $ 212,840 $ 813,067 $ 899,547 Cost of sales 133,845 147,766 553,981 616,181 Gross profit 57,232 65,074 259,086 283,366 Selling, general and administrative expenses 38,746 47,423 186,876 199,489 (Gain) loss on disposal of fixed assets (117 ) 26 (195 ) (667 ) Other (income) expenses — 603 — 603 Operating income (loss) 18,603 17,022 72,405 83,941 Interest expense, net 1,374 1,654 6,349 5,731 Income (loss) before income taxes 17,229 15,368 66,056 78,210 Income tax expense (benefit) 4,690 1,940 17,189 17,943 Net income (loss) $ 12,539 $ 13,428 $ 48,867 $ 60,267 Net income (loss) per common share: Basic $ 0.34 $ 0.37 $ 1.33 $ 1.66 Diluted $ 0.34 $ 0.36 $ 1.32 $ 1.64 Weighted average common shares outstanding: Basic 36,840,253 36,495,362 36,744,560 36,411,389 Diluted 37,142,056 36,853,237 37,095,568 36,790,839 MYERS INDUSTRIES, INC. CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (UNAUDITED) (Dollars in thousands) December 31, 2023 December 31, 2022 Assets Current Assets Cash $ 30,290 $ 23,139 Trade accounts receivable, net 113,907 126,184 Other accounts receivable, net 14,726 7,532 Inventories, net 90,844 93,351 Other current assets 6,854 7,001 Total Current Assets 256,621 257,207 Property, plant, & equipment, net 107,933 101,566 Right of use asset - operating leases 27,989 28,908 Deferred income taxes 209 129 Other assets 148,879 154,824 Total Assets $ 541,631 $ 542,634 Liabilities & Shareholders' Equity Current Liabilities Accounts payable $ 79,050 $ 73,536 Accrued expenses 53,523 57,531 Operating lease liability - short-term 5,943 6,177 Finance lease liability - short-term 593 518 Long-term debt - current portion 25,998 - Total Current Liabilities 165,107 137,762 Long-term debt 31,989 93,962 Operating lease liability - long-term 22,352 22,786 Finance lease liability - long-term 8,615 8,919 Other liabilities 12,108 15,270 Deferred income taxes 8,660 7,508 Total Shareholders' Equity 292,800 256,427 Total Liabilities & Shareholders' Equity $ 541,631 $ 542,634 MYERS INDUSTRIES, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (Dollars in thousands) Quarter Ended December 31, Year Ended December 31, 2023 2022 2023 2022 Cash Flows From Operating Activities Net income $ 12,539 $ 13,428 $ 48,867 $ 60,267 Adjustments to reconcile net income to net cash provided by (used for) operating activities Depreciation and amortization 5,882 5,616 22,786 21,216 Amortization of deferred financing costs 79 78 313 441 Non-cash stock-based compensation expense 1,593 2,268 6,671 7,436 (Gain) loss on disposal of fixed assets (117 ) 26 (195 ) (667 ) Deferred taxes 1,039 2,072 1,039 2,072 Other (1,529 ) 1,228 944 1,520 Cash flows provided by (used for) working capital Accounts receivable - trade and other, net (11,108 ) (4,874 ) 2,656 (23,625 ) Inventories 5,535 14,971 2,630 7,955 Prepaid expenses and other current assets 2,204 3,503 151 (1,409 ) Accounts payable and accrued expenses (717 ) (16,454 ) 310 (2,585 ) Net cash provided by (used for) operating activities 15,400 21,862 86,172 72,621 Cash Flows From Investing Activities Capital expenditures (3,563 ) (6,677 ) (22,855 ) (24,292 ) Acquisition of business, net of cash acquired — (3,373 ) (160 ) (27,626 ) Proceeds from sale of property, plant, and equipment 116 12 258 1,537 Net cash provided by (used for) investing activities (3,447 ) (10,038 ) (22,757 ) (50,381 ) Cash Flows From Financing Activities Net borrowings (repayments) from revolving credit facility (2,000 ) (4,000 ) (36,000 ) 3,000 Payments on finance lease (139 ) (126 ) (542 ) (500 ) Cash dividends paid (4,974 ) (4,925 ) (20,240 ) (19,797 ) Proceeds from issuance of common stock 390 261 2,338 2,320 Shares withheld for employee taxes on equity awards (17 ) (1 ) (2,072 ) (451 ) Deferred financing fees — (171 ) — (889 ) Net cash provided by (used for) financing activities (6,740 ) (8,962 ) (56,516 ) (16,317 ) Foreign exchange rate effect on cash 309 (147 ) 252 (439 ) Net increase (decrease) in cash 5,522 2,715 7,151 5,484 Beginning Cash 24,768 20,424 23,139 17,655 Ending Cash $ 30,290 $ 23,139 $ 30,290 $ 23,139 MYERS INDUSTRIES, INC. RECONCILIATION OF NON-GAAP FINANCIAL MEASURES GROSS PROFIT, OPERATING INCOME AND EBITDA (UNAUDITED) (Dollars in thousands) Quarter Ended December 31, 2023 Material Handling Distribution Segment Total Corporate & Other Total Net sales $ 126,918 $ 64,182 $ 191,100 $ (23 ) $ 191,077 Net income 12,539 Net income margin 6.6 % Gross profit 57,232 Add: Restructuring expenses and other adjustments 240 Adjusted gross profit 57,472 Gross margin as adjusted 30.1 % Operating income (loss) 29,931 339 30,270 (11,667 ) 18,603 Operating income margin 23.6 % 0.5 % 15.8 % n/a 9.7 % Add: Restructuring expenses and other adjustments 231 61 292 — 292 Add: Acquisition and integration costs — 79 79 2,619 2,698 Less: Insurance recovery of legal fees(3) (6,700 ) — (6,700 ) — (6,700 ) Add: Environmental reserves, net(2) — — — 1,000 1,000 Adjusted operating income (loss)(1) 23,462 479 23,941 (8,048 ) 15,893 Adjusted operating income margin 18.5 % 0.7 % 12.5 % n/a 8.3 % Add: Depreciation and amortization 4,922 692 5,614 268 5,882 Adjusted EBITDA $ 28,384 $ 1,171 $ 29,555 $ (7,780 ) $ 21,775 Adjusted EBITDA margin 22.4 % 1.8 % 15.5 % n/a 11.4 % (1) Includes gross profit adjustments of $240 and SG&A adjustments of $(2,950) (2) Includes environmental charges of $2,700 net of probable insurance recoveries of $1,700 (3) Includes total insurance recovery of $10,000 net of recoverable expenses incurred in the current year of $3,300 Quarter Ended December 31, 2022 Material Handling Distribution Segment Total Corporate & Other Total Net sales $ 142,235 $ 70,614 $ 212,849 $ (9 ) $ 212,840 Net income 13,428 Net income margin 6.3 % Gross profit 65,074 Add: Restructuring expenses and other adjustments 94 Adjusted gross profit 65,168 Gross margin as adjusted 30.6 % Operating income (loss) 20,863 3,393 24,256 (7,234 ) 17,022 Operating income margin 14.7 % 4.8 % 11.4 % n/a 8.0 % Add: Restructuring expenses and other adjustments 94 — 94 — 94 Add: Acquisition and integration costs — 106 106 60 166 Add: Impairment of investment in legacy joint venture — 603 603 — 603 Less: Environmental reserves, net(2) — — — (1,400 ) (1,400 ) Adjusted operating income (loss)(1) 20,957 4,102 25,059 (8,574 ) 16,485 Adjusted operating income margin 14.7 % 5.8 % 11.8 % n/a 7.7 % Add: Depreciation and amortization 4,575 860 5,435 181 5,616 Adjusted EBITDA $ 25,532 $ 4,962 $ 30,494 $ (8,393 ) $ 22,101 Adjusted EBITDA margin 18.0 % 7.0 % 14.3 % n/a 10.4 % (1) Includes gross profit adjustments of $94 and SG&A adjustments of $(631) (2) Includes environmental charges of $4,600 net of probable insurance recoveries of $6,000 MYERS INDUSTRIES, INC. RECONCILIATION OF NON-GAAP FINANCIAL MEASURES GROSS PROFIT, OPERATING INCOME AND EBITDA (UNAUDITED) (Dollars in thousands) Year Ended December 31, 2023 Material Handling Distribution Segment Total Corporate & Other Total Net sales $ 555,259 $ 257,875 $ 813,134 $ (67 ) $ 813,067 Net income 48,867 Net income margin 6.0 % Gross profit 259,086 Add: Restructuring expenses and other adjustments 829 Adjusted gross profit 259,915 Gross margin as adjusted 32.0 % Operating income (loss) 100,088 10,967 111,055 (38,650 ) 72,405 Operating income margin 18.0 % 4.3 % 13.7 % n/a 8.9 % Add: Executive severance costs — 410 410 289 699 Add: Restructuring expenses and other adjustments 1,456 914 2,370 166 2,536 Add: Acquisition and integration costs — 376 376 2,745 3,121 Less: Insurance recovery of legal fees(3) (6,700 ) — (6,700 ) — (6,700 ) Add: Environmental reserves, net(2) — — — 3,200 3,200 Adjusted operating income (loss)(1) 94,844 12,667 107,511 (32,250 ) 75,261 Adjusted operating income margin 17.1 % 4.9 % 13.2 % n/a 9.3 % Add: Depreciation and amortization 18,917 3,197 22,114 672 22,786 Adjusted EBITDA $ 113,761 $ 15,864 $ 129,625 $ (31,578 ) $ 98,047 Adjusted EBITDA margin 20.5 % 6.2 % 15.9 % n/a 12.1 % (1) Includes gross profit adjustments of $829 and SG&A adjustments of $2,027 (2) Includes environmental charges of $6,500 net of probable insurance recoveries of $3,300 (3) Includes total insurance recovery of $10,000 net of recoverable expenses incurred in the current period of $3,300 Year Ended December 31, 2022 Material Handling Distribution Segment Total Corporate & Other Total Net sales $ 647,619 $ 251,966 $ 899,585 $ (38 ) $ 899,547 Net income 60,267 Net income margin 6.7 % Gross profit 283,366 Add: Restructuring expenses and other adjustments 744 Adjusted gross profit 284,110 Gross margin as adjusted 31.6 % Operating income (loss) 104,079 15,862 119,941 (36,000 ) 83,941 Operating income margin 16.1 % 6.3 % 13.3 % n/a 9.3 % Add: Restructuring expenses and other adjustments 744 — 744 — 744 Add: Acquisition and integration costs — 377 377 621 998 Add: Loss on sale of assets 261 — 261 — 261 Add: Impairment of investment in legacy joint venture — 603 603 — 603 Add: Environmental reserves, net(2) — — — 1,400 1,400 Adjusted operating income (loss)(1) 105,084 16,842 121,926 (33,979 ) 87,947 Adjusted operating income margin 16.2 % 6.7 % 13.6 % n/a 9.8 % Add: Depreciation and amortization 17,814 2,889 20,703 513 21,216 Adjusted EBITDA $ 122,898 $ 19,731 $ 142,629 $ (33,466 ) $ 109,163 Adjusted EBITDA margin 19.0 % 7.8 % 15.9 % n/a 12.1 % (1) Includes gross profit adjustments of $744 and SG&A adjustments of $3,262 (2) Includes environmental charges of $7,400 net of probable insurance recoveries of $6,000 MYERS INDUSTRIES, INC. RECONCILIATION OF NON-GAAP FINANCIAL MEASURES ADJUSTED OPERATING INCOME, ADJUSTED EBITDA AND FREE CASH FLOW (UNAUDITED) (Dollars in thousands) Quarter Ended December 31, Year Ended December 31, 2023 2022 2023 2022 Adjusted operating income (loss) reconciliation: Operating income (loss) $ 18,603 $ 17,022 $ 72,405 $ 83,941 Executive severance costs — — 699 — Restructuring expenses and other adjustments 292 94 2,536 744 Acquisition and integration costs 2,698 166 3,121 998 Insurance recovery of legal fees (6,700 ) — (6,700 ) — Loss on sale of assets — — — 261 Impairment of investment in legacy joint venture — 603 — 603 Environmental reserves, net 1,000 (1,400 ) 3,200 1,400 Adjusted operating income (loss) $ 15,893 $ 16,485 $ 75,261 $ 87,947 Adjusted EBITDA reconciliation: Net income (loss) $ 12,539 $ 13,428 $ 48,867 $ 60,267 Income tax expense (benefit) 4,690 1,940 17,189 17,943 Interest expense, net 1,374 1,654 6,349 5,731 Operating income (loss) 18,603 17,022 72,405 83,941 Depreciation and amortization 5,882 5,616 22,786 21,216 Executive severance costs — — 699 — Restructuring expenses and other adjustments 292 94 2,536 744 Acquisition and integration costs 2,698 166 3,121 998 Insurance recovery of legal fees (6,700 ) — (6,700 ) — Loss on sale of assets — — — 261 Impairment of investment in legacy joint venture — 603 — 603 Environmental reserves, net 1,000 (1,400 ) 3,200 1,400 Adjusted EBITDA $ 21,775 $ 22,101 $ 98,047 $ 109,163 Free cash flow reconciliation: Net cash provided by (used for) operating activities $ 15,400 $ 21,862 $ 86,172 $ 72,621 Capital expenditures (3,563 ) (6,677 ) (22,855 ) (24,292 ) Free cash flow $ 11,837 $ 15,185 $ 63,317 $ 48,329 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 December 31, Year Ended December 31, 2023 2022 2023 2022 Adjusted net income (loss) reconciliation: Net income (loss) $ 12,539 $ 13,428 $ 48,867 $ 60,267 Income tax expense (benefit) 4,690 1,940 17,189 17,943 Income (loss) before income taxes 17,229 15,368 66,056 78,210 Executive severance costs — — 699 — Restructuring expenses and other adjustments 292 94 2,536 744 Acquisition and integration costs 2,698 166 3,121 998 Insurance recovery of legal fees (6,700 ) — (6,700 ) — Loss on sale of assets — — — 261 Impairment of investment in legacy joint venture — 603 — 603 Environmental reserves, net 1,000 (1,400 ) 3,200 1,400 Adjusted income (loss) before income taxes 14,519 14,831 68,912 82,216 Income tax expense, as adjusted (1) (3,630 ) (3,034 ) (17,228 ) (20,554 ) Adjusted net income (loss) $ 10,889 $ 11,797 $ 51,684 $ 61,662 Adjusted earnings per diluted share reconciliation: Net income (loss) per common diluted share $ 0.34 $ 0.36 $ 1.32 $ 1.64 Executive severance costs — — 0.02 — Restructuring expenses and other adjustments 0.00 0.00 0.06 0.02 Acquisition and integration costs 0.07 0.01 0.08 0.03 Insurance recovery of legal fees (0.18 ) — (0.18 ) — Loss on sale of assets — — — 0.01 Impairment of investment in legacy joint venture — 0.02 — 0.02 Environmental reserves, net 0.03 (0.04 ) 0.09 0.04 Adjusted effective income tax rate impact 0.03 (0.03 ) (0.00 ) (0.07 ) Adjusted earnings per diluted share(2) $ 0.29 $ 0.32 $ 1.39 $ 1.68 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 25%. (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 2024 Guidance Low High GAAP diluted net income per common share $ 1.03 $ 1.23 Add: Net restructuring expenses and other adjustments 0.04 0.04 Add: Acquisition and integration costs 0.32 0.26 Less: Adjusted effective income tax rate impact (1) (0.09 ) (0.08 ) Adjusted earnings per diluted share (2) $ 1.30 $ 1.45 (1) Income taxes are calculated using the normalized effective tax rate for each year. The rate used in 2024 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/20240305108379/en/