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MYERS INDUSTRIES INC (MYE)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 delivered improved profitability on flat sales: gross margin expanded 240 bps to 33.4%, operating income grew 53%, and GAAP EPS rose to $0.18; adjusted EPS was $0.22 .
  • Versus Wall Street: adjusted EPS beat consensus by $0.03 while revenue was essentially in-line; adjusted EBITDA was modestly above consensus (details in Estimates Context) *.
  • Segment mix and SG&A actions were the primary drivers: Material Handling margins improved on Signature Systems and military strength; Distribution remained soft on lower pricing/volume .
  • Management reiterated Focused Transformation ($20M annualized SG&A savings by YE25), initiated $1M buybacks (with $9M authorization remaining), and emphasized tariff resilience (>90% of Material Handling revenue manufactured in the U.S.) .
  • Near-term stock catalysts: sustained margin execution and SG&A savings realization, Signature/Scepter military momentum, evidence of Distribution stabilization, and tariff-driven resilience positioning .

What Went Well and What Went Wrong

What Went Well

  • Material Handling strength: Net sales +3.6%, operating margin +280 bps YoY to 17.4%, adjusted EBITDA +11.7% and margin +160 bps, driven by Signature and military .
  • SG&A discipline: Company-level adjusted operating margin improved to 9.0% and adjusted EBITDA margin to 13.8%; management highlighted SG&A run-rate savings ramping next quarter as Focused Transformation gains momentum .
  • Tariff positioning: “More than 90% of 2025 Material Handling revenue is expected to be manufactured in the U.S…we expect minimal direct impact from current tariffs,” with pricing levers and alternative suppliers to mitigate impacts .

What Went Wrong

  • Distribution softness: Net sales -10.3% YoY; operating margin fell to -2.4% on lower pricing/volume despite some SG&A offsets .
  • Free cash flow compressed: FCF was $2.0M vs $14.6M in Q1’24, impacted by AR timing from strong March sales and proactive inventory builds ahead of tariff details; management expects recovery in future quarters .
  • Vehicle end-market outlook lowered: Changed from “Stable to down” to “Down” due to tariff uncertainty and higher interest rates, pressuring RV/marine demand .

Financial Results

Core results vs prior periods

MetricQ3 2024Q4 2024Q1 2025
Revenue ($USD Millions)$205.1 $203.9 $206.8
Gross Margin %31.8% 32.3% 33.4%
Operating Income ($USD Millions)$(4.8) $14.6 $16.7
GAAP Diluted EPS ($)$(0.29) $0.11 $0.18
Adjusted Operating Income ($USD Millions)$20.5 $17.6 $18.7
Adjusted EBITDA ($USD Millions)$30.7 $27.5 $28.6
Adjusted Operating Margin %10.0% 8.7% 9.0%
Adjusted EBITDA Margin %15.0% 13.5% 13.8%
Adjusted EPS ($)$0.25 $0.19 $0.22

Segment breakdown

Segment MetricQ3 2024Q4 2024Q1 2025
Material Handling Net Sales ($USD Millions)$150.7 $152.7 $157.7
Material Handling Op Income ($USD Millions)$0.9 $25.9 $27.4
Material Handling Op Margin %0.6% 17.0% 17.4%
Material Handling Adjusted EBITDA ($USD Millions)$33.5 $34.7 $36.3
Material Handling Adj EBITDA Margin %22.2% 22.7% 23.0%
Distribution Net Sales ($USD Millions)$54.4 $51.2 $49.2
Distribution Op Income ($USD Millions)$2.1 $(1.6) $(1.2)
Distribution Op Margin %3.9% -3.0% -2.4%
Distribution Adjusted EBITDA ($USD Millions)$3.2 $(0.3) $0.5
Distribution Adj EBITDA Margin %5.8% -0.6% 0.9%

KPIs and balance sheet

KPIQ3 2024Q4 2024Q1 2025
Cash from Operations ($USD Millions)$17.3 $27.3 $10.1
Free Cash Flow ($USD Millions)$10.1 $20.2 $2.0
Capital Expenditures ($USD Millions)$7.2 $7.1 $8.1
Total Debt ($USD Millions)$396.2 $383.6 $391.8
Cash ($USD Millions)$29.7 $32.2 $35.3
Revolver Availability ($USD Millions)$239.4 $244.7 $231.7
Net Leverage Ratio (x)2.7x 2.7x 2.8x
Share Repurchases ($USD Millions)——$1.0

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Formal Annual GuidanceFY 2025Provided historicallySuspended pending strategy review Suspended
End-Market Outlook – Vehicle (RV/Marine)2025Stable to down Down Lowered
End-Market Outlook – Infrastructure (Signature)2025Strong growth Strong growth Maintained
End-Market Outlook – Industrial2025Moderate growth Moderate growth Maintained
End-Market Outlook – Food & Beverage2025Stable Stable Maintained
End-Market Outlook – Automotive Aftermarket Distribution2025Slightly down Slightly down Maintained
SG&A Cost Savings TargetBy YE 2025$20M annualized $20M annualized (progressing) Reiterated
Share Repurchase Authorization2025$10M authorization $9M remaining; $1M repurchased Active
Leverage TargetOngoing1.5–2.5x 1.5–2.5x (current 2.8x) Maintained
Dividend PolicyOngoingOngoing dividend Ongoing dividend Maintained

Earnings Call Themes & Trends

TopicPrevious Mentions (Q3 2024 and Q4 2024)Current Period (Q1 2025)Trend
Tariffs/MacroLimited near-term impact expected; largely U.S.-based supply chain Minimal direct impact; >90% Material Handling manufactured in U.S.; pricing and alternative suppliers to mitigate; Distribution <15% China-sourced Resilient positioning reinforced
Focused Transformation (SG&A)Additional $15M cost savings targeted by 2025 $20M annualized SG&A savings by YE25; SG&A run-rate savings to show next quarter Execution progressing
Signature Systems integrationDriver of margin improvement; record MegaDeck; synergies on track Contribution to sales/margins; $12M synergies vs $8M target Outperforming plan
Distribution turnaroundUnderperformance with actions (center consolidations, leadership, digital) Continued softness; pricing/volume pressure; leadership learning and customer alignment focus Still challenged, work ongoing
Military products (Scepter)Strong growth (+48% YoY in Q4) Strong order flow; domestic and European opportunities Robust demand pipeline
Vehicle (RV/Marine)Stabilizing late-2024 Outlook lowered to “Down” on tariff uncertainty and higher rates Weaker
Food & Beverage (Seed boxes)Headwinds continued Cyclical softness persists Soft/stable
Digital/E-commerce$36M sales in 2024; ongoing focus Continued channel enhancement (MTS Xpress/app) Building capability
Supply chain footprintU.S.-centric; flexibility between Canada/U.S. Emphasis on U.S. manufacturing and suppliers; USMCA/military exemptions Advantage maintained

Management Commentary

  • “Improved profitability on flat sales driven by the contribution of our Signature acquisition and strong performance of our Scepter military products…Our ‘Focused Transformation’ program…is gaining momentum” — Aaron Schapper, CEO .
  • “Adjusted gross margin 33.5%…adjusted operating income improved to $18.7M…We will begin to see our Focused Transformation work deliver further SG&A run rate savings next quarter” — Grant Fitz, CFO .
  • “More than 90% of our 2025 Material Handling revenue is expected to be manufactured in the U.S.…we expect minimal direct impact from the current tariffs” — Aaron Schapper .
  • “We overachieved our Signature synergy targets, delivering $12M in cost synergies against our $8M target” — Aaron Schapper .
  • CFO transition: Grant Fitz resigned effective May 2, 2025; Daniel Hoehn named interim CFO; change not related to accounting matters .

Q&A Highlights

  • Tariff impact and mitigation: Less than 15% of Distribution sourced from China; pricing actions and alternate suppliers will offset; minimal footprint differences vs competitors .
  • Free cash flow dynamics: Lower FCF due to AR timing from strong March sales and preemptive inventory builds ahead of tariff details; expected recovery through the year .
  • Military demand: Strong order flow for Scepter and Signature; pipeline includes domestic and European opportunities .
  • Vehicle outlook: Lowered due to tariff and rate uncertainty; customers in “pause mode,” with possible plant idling mentioned .
  • Distribution path forward: Emphasis on customer-needs alignment, sales coverage, and value-based services; more detail expected next quarter .

Estimates Context

Results vs Wall Street consensus:

MetricQ1 2024 Consensus*Q1 2024 ActualQ4 2024 Consensus*Q4 2024 ActualQ1 2025 Consensus*Q1 2025 Actual
Revenue ($USD Millions)$241.8*$207.1 $203.1*$203.9 $206.8*$206.8
Primary EPS (Adjusted) ($)$0.32*$0.21 $0.10*$0.19 $0.19*$0.22
EBITDA ($USD Millions)$35.3*$25.1 $24.2*$27.5 $27.1*$28.6
  • Q1 2025: EPS beat by $0.03; revenue in-line; EBITDA modest beat.
  • Q4 2024: EPS beat; revenue slight beat; EBITDA beat.
  • Q1 2024: significant misses on revenue/EPS/EBITDA reflecting seed-box cyclicality and Distribution weakness.

Values retrieved from S&P Global.*

Key Takeaways for Investors

  • Margin and EPS execution: Q1 showed durable margin expansion and an EPS beat; continued SG&A savings realization is the near-term driver of upward estimate revisions *.
  • Mix quality improving: Signature and Scepter are lifting Material Handling margins; watch for sustained >23% segment EBITDA margin and incremental synergies .
  • Distribution remains the swing factor: Stabilization evidence (pricing discipline, e-commerce, footprint consolidation) is needed for multiple expansion; near-term bias still cautious .
  • Tariff resilience is a differentiator: U.S.-centric manufacturing and pricing optionality mitigate direct impacts; this positions MYE defensively in a volatile macro .
  • Capital deployment supports upside: $9M remaining buyback authorization, ongoing dividend, and leverage targeted to 1.5–2.5x create flexibility for returns amid improving FCF trajectory .
  • Watch vehicle end-market signals: Management lowered outlook to “Down”; any stabilization in RV/marine and auto could be a positive surprise .
  • CFO transition: Interim CFO with prior experience provides continuity; monitor for cadence of SG&A savings updates and guidance framework resumption .

Appendices

Additional Q1 2025 details

  • Liquidity: $267.0M total; $231.7M revolver availability; $35.3M cash .
  • Free cash flow: $2.0M; capex $8.1M; cash from operations $10.1M .
  • Non-GAAP adjustments: Q1 adjusted EPS reconciliation includes $0.05 per share from restructuring/other, tax-normalization impact of $(0.01); prior-year Q1 included acquisition inventory step-up and integration costs .

Prior-quarter references

  • Q4 2024: Adjusted EBITDA $27.5M; adjusted EPS $0.19; adjusted operating margin 8.7% .
  • Q3 2024: Adjusted EBITDA $30.7M; adjusted EPS $0.25; adjusted operating margin 10.0% .