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MYERS INDUSTRIES INC (MYE)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 2025 net sales were $205.4M (+0.2% YoY), GAAP diluted EPS was $0.19 and adjusted EPS was $0.26; gross margin expanded to 33.4% (adjusted 33.9%), driven by favorable mix and cost productivity .
  • The quarter produced strong free cash flow of $21.5M, more than double the prior year, with cash from operations of $25.8M; total liquidity reached $292.7M and net leverage fell to 2.6x .
  • Segment performance was mixed: Material Handling margins improved (adj. EBITDA margin 24.0%), while Distribution remained soft (adj. EBITDA margin 3.2%), consistent with weaker Automotive Aftermarket demand .
  • Strategic catalysts: sale process initiated for Myers Tire Supply with KeyBanc as advisor; structural cost reductions identified ($19M) and on track for $20M annualized savings by year-end 2025, primarily in SG&A .
  • S&P Global consensus for Q3 2025 was EPS $0.25* and revenue $198.8M*; MYE delivered adjusted EPS $0.26 and revenue $205.4M, an EPS beat and revenue beat, though coverage was limited (1 estimate each)* .
    Values retrieved from S&P Global.*

What Went Well and What Went Wrong

What Went Well

  • Gross profit up 5.3% YoY to $68.6M; adjusted gross margin improved to 33.9% on higher volume, favorable mix, and lower material cost .
  • Material Handling delivered margin expansion (adj. EBITDA margin 24.0% vs. 22.2% YoY), helped by Signature Systems (composite matting) and military products; CEO: “We achieved growth in gross profit due to favorable product mix” .
  • Free cash flow doubled YoY to $21.5M; CFO highlighted working capital discipline and expects “a fairly good quarter in Q4 as well” for FCF .

What Went Wrong

  • Distribution net sales fell 4.4% YoY to $52.0M with adj. EBITDA down to $1.6M; softness tied to Automotive Aftermarket continues .
  • Consumer end market down due to absence of U.S.-landed storms, pressuring fuel container demand; vehicle end market down amid economic uncertainty .
  • SG&A was elevated by unusual items (legal and medical costs) and restored incentive accruals, muting adjusted operating margin improvement to 10.2% (+20 bps YoY); CFO expects SG&A to decline as transformation savings flow through .

Financial Results

Quarterly Performance (GAAP and Key Non-GAAP)

MetricQ1 2025Q2 2025Q3 2025
Revenue ($USD Millions)$206.750 $209.583 $205.435
GAAP Diluted EPS ($)$0.18 $0.26 $0.19
Adjusted EPS ($)$0.22 $0.31 $0.26
Gross Margin % (GAAP)33.4% 33.7% 33.4%
Gross Margin % (Adjusted)33.5% 33.9% 33.9%
Operating Income ($USD Millions)$16.650 $19.979 $17.689
Adjusted Operating Income ($USD Millions)$18.678 $22.806 $20.907
Adjusted EBITDA ($USD Millions)$28.573 $32.875 $30.595
Adjusted EBITDA Margin %13.8% 15.7% 14.9%
Cash from Operations ($USD Millions)$10.131 $28.311 $25.758
Free Cash Flow ($USD Millions)$2.048 $24.704 $21.513
Capital Expenditure ($USD Millions)$8.083 $3.607 $4.245

Revenue and EPS vs Prior Year, Prior Quarter, and Estimates

MetricQ3 2024Q2 2025Q3 2025 ActualWall St Consensus (S&P)
Revenue ($USD Millions)$205.067 $209.583 $205.435 $198.800*
Adjusted EPS ($)$0.25 $0.31 $0.26 $0.25*
Values retrieved from S&P Global.*
  • Bold highlights: Q3 revenue beat consensus by ~$6.6M; adjusted EPS modestly beat by $0.01 .*

Segment Breakdown (Q3)

Segment MetricQ3 2024Q3 2025
Material Handling Net Sales ($USD Millions)$150.7 $153.5
Material Handling Operating Income ($USD Millions)$0.9 $26.6
Material Handling Op Margin %0.6% 17.3%
Material Handling Adjusted EBITDA ($USD Millions)$33.5 $36.8
Material Handling Adjusted EBITDA Margin %22.2% 24.0%
Distribution Net Sales ($USD Millions)$54.4 $52.0
Distribution Operating Income ($USD Millions)$2.1 $0.8
Distribution Op Margin %3.9% 1.6%
Distribution Adjusted EBITDA ($USD Millions)$3.2 $1.6
Distribution Adjusted EBITDA Margin %5.8% 3.2%

KPIs and Balance Sheet

KPIQ1 2025Q2 2025Q3 2025
Total Liquidity ($USD Millions)$267.0 $281.0 $292.7
Cash Balance ($USD Millions)$35.3 $41.3 $48.0
Net Leverage Ratio (x)2.8x 2.8x 2.6x
Total Debt ($USD Millions)$391.8 $ (reduced by $13) $ (reduced by $10)
Debt Reduction in Quarter ($USD Millions)—$13 $10
Share Repurchases ($USD Millions)$1.0 $0.5 $0.5
Free Cash Flow ($USD Millions)$2.0 $24.7 $21.5
Capital Expenditures ($USD Millions)$8.1 $3.6 $4.2

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Industrial end-marketFY 2025Moderate growth Moderate growth Maintained
Infrastructure end-marketFY 2025Strong growth Strong growth Maintained
Vehicle end-marketFY 2025Down Down Maintained
Consumer end-marketFY 2025Stable, affected by hurricane responses Down, absence of U.S.-landed storms Lowered
Food & Beverage end-marketFY 2025Stable Stable Maintained
Automotive Aftermarket DistributionFY 2025Slightly down Down Lowered
Military sales (Scepter)FY 2025Target not specifiedExpect to exceed $40M; YTD up 119% Raised specificity
CapEx targetOngoing~3% of sales (strategy)Target remains near 3% of sales Reiterated
Dividend per shareNext payable$0.135 per share $0.135 per share (Jan 5, 2026) Maintained
Portfolio action (MTS)2H 2025Strategic review launched Sale process initiated, KeyBanc advisor Advanced to divestiture phase

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2 & Q1)Current Period (Q3)Trend
Focused Transformation & SG&A savingsOn track for $20M savings; idling two rotational molding facilities $19M structural cost reductions identified; on track for $20M annualized by YE25 Progressing
Portfolio optimization (MTS)Strategic review announced Sale process initiated with KeyBanc Accelerating
Infrastructure (Signature Systems)Strong growth outlook Continued strong demand; pipeline of new offerings; operational best practices improving throughput Strengthening
Military products (Scepter)Industrial growth driven by military demand Expect >$40M 2025 sales; multi-program pipeline; CapEx aligned to growth Expanding
Automotive Aftermarket DistributionSlightly down Down; managing business closely amid sale process Worsening
Consumer/Fuel containersStable (hurricane responses) Down due to no U.S.-landed storms in 2025 Worsening
Working capital/FCFFCF $24.7M in Q2; AR timing benefits FCF $21.5M; inventory focus; expect solid Q4 Sustained discipline
Tariffs/macroMinimal direct impact given U.S. manufacturing Monitoring; outlook includes tariff sensitivity Watchful

Management Commentary

  • CEO: “I am encouraged by the higher gross profit and free cash flow this quarter... Infrastructure and Industrial growth was offset by continued softness in Vehicle and Automotive Aftermarket.”
  • CEO: “With the idling of two rotational molding production facilities, we have identified $19 million in structural cost reductions, and we remain on track to deliver annualized cost savings of $20 million...”
  • CFO: “Adjusted gross margin increased 150 basis points to 33.9% due to higher volume, favorable mix and cost productivity as well as lower material cost... Operating cash flow was $25.8 million... free cash flow of $21.5 million.”
  • CFO: “We are expecting our SG&A costs to start to come down... unusual items in Q3... confident that our transformation savings are going to start to deliver reductions in SG&A.”
  • CEO: On Signature: “We are excited... new offerings coming out... that we think can help strengthen our business on the stadium side.”
  • CEO: On defense: “We expect to continue to expect strong growth... positioning our manufacturing to take advantage of that growth in the coming years.”

Q&A Highlights

  • Signature/Infrastructure growth: Management emphasized strong tailwinds in infrastructure and a robust innovation pipeline at Signature, supporting margin durability and future growth .
  • Defense trajectory: Scepter’s military programs expected to exceed $40M in 2025 with multi-year, programmatic growth opportunities; CapEx plans support capacity .
  • SG&A outlook: Elevated Q3 SG&A due to unusual legal/medical costs and restored incentive accruals; CFO expects SG&A to decline as transformation savings materialize .
  • Free cash flow sustainability: FCF driven by working capital discipline; CFO anticipates a solid Q4 despite potentially higher CapEx timing .

Estimates Context

  • S&P Global Q3 2025 consensus: EPS $0.25* (MYE adjusted EPS $0.26), Revenue $198.8M* (MYE $205.4M); both metrics beaten, though low estimate depth (1 estimate each)* .
  • Implications: Consensus likely to reflect stronger infrastructure/military demand and sustained gross margin improvements; Distribution and Consumer trends may temper top-line revisions until visibility improves .
    Values retrieved from S&P Global.*

Key Takeaways for Investors

  • Margin quality improving: Adjusted gross margin 33.9% and adj. EBITDA margin 14.9% supported by mix (Signature, military) and lower material costs .
  • Cash generation advancing: FCF of $21.5M with liquidity of $292.7M and net leverage down to 2.6x enhances balance sheet optionality .
  • Structural actions: $19M identified in structural cost reductions and plant idling underpin the $20M SG&A savings target by YE25 .
  • Portfolio catalyst: Formal MTS sale process with KeyBanc; a divestiture would simplify the portfolio and improve margin profile (monitor timing and expected proceeds) .
  • Segment divergence: Stay constructive on Material Handling (Signature/military), cautious on Distribution and Consumer given aftermarket softness and storm absence .
  • Near-term setup: Q4 conversion of strong infrastructure backlog and continued working capital discipline are key drivers; watch SG&A normalization and any unusual items .
  • Dividend continuity: Quarterly dividend maintained at $0.135 per share; modest buybacks continue, reinforcing shareholder return framework .

Notes on Non-GAAP Adjustments

  • Q3 2024 included a $22M goodwill impairment in Material Handling; excluding this, Q3 2025 Material Handling operating income improvement was ~$3.7M YoY, highlighting true operational gains .
  • Reconciliations disclosed for adjusted operating income, adjusted EBITDA, adjusted net income, and adjusted EPS; adjustments include restructuring, severance, and other items as detailed in exhibits .