Myers Industries — Q3 2026 Earnings Summary

Financial Performance:

• Net sales for the quarter ended September 30, 2026, reached $171.3 million, an 8.1% increase year-over-year from $158.5 million.
• Gross profit was $46.8 million, a 5.0% decrease from $49.3 million in the prior year period; gross margin contracted to 27.3% from 31.1% (a 380 basis point decline).
• Operating income was $14.8 million, down 11.2% from $16.7 million, with operating income margin falling to 8.7% from 10.5% (180 basis points).
• Income from continuing operations was $4.7 million, a 25.1% decrease from $6.3 million; diluted EPS from continuing operations was $0.13, down 23.5% from $0.17.
• Adjusted operating income was $17.9 million, down 9.9% from $19.9 million; adjusted operating income margin was 10.4% versus 12.5%.
• Adjusted income from continuing operations was $12.2 million, up 5.5% from $11.6 million; adjusted diluted EPS was $0.32, up 3.2% from $0.31.
• Adjusted EBITDA was $26.6 million, down 8.2% from $29.0 million; adjusted EBITDA margin was 15.5% versus 18.3%.
• Cash flow from operations was $17.4 million; free cash flow was $11.5 million; capital expenditures were $5.9 million.
• Net debt was reduced by $28.5 million, and the net leverage ratio improved to 1.86x from 1.94x in the second quarter.
• Total liquidity stood at $254.7 million, comprising $201.2 million in availability under the revolving credit facility and $53.5 million in cash on hand.

Guidance and Future Outlook:

• Management anticipates significant sequential margin improvement in the fourth quarter driven by pricing actions and the stabilization of resin costs.
• The 2026 full-year outlook for end markets includes:
  • Industrial: Moderate growth.
  • Infrastructure: Strong growth.
  • Vehicle: Down (previously stable).
  • Consumer: Moderate growth (previously stable), affected by normal levels of storm response.
  • Food & Beverage: Strong growth (previously moderate growth).
• The outlook excludes the impact of exiting low-margin products and idling two rotational molding facilities in Q4 2025.

Business Segments and Product Lines:

• Infrastructure end market sales grew 38% year-over-year to $40.8 million.
• Food & Beverage end market sales grew 12% year-over-year to $19.3 million.
• Sales were flat in the Industrial ($68.4 million), Vehicle ($22.7 million), and Consumer ($20.1 million) end markets.
• Net sales increased 10.4% excluding the impact of exiting approximately $3 million in low-margin products.
• The company completed the sale of Myers Tire Supply, simplifying the portfolio to focus on core specialty engineered products.
• Two rotational molding facilities were idled in the fourth quarter of 2025 to exit low-margin products.

Market and Competitive Landscape:

• Resin costs spiked during the quarter but have since declined and stabilized.
• Pricing actions remain in place to support margin recovery.
• The outlook for end markets remains favorable.

Risks and Challenges:

• Gross profit and operating income were pressured by higher resin costs, unfavorable product mix, and unplanned maintenance costs.
• GAAP EPS reflects a non-cash extinguishment loss from amending the credit agreement.
• Forward-looking statements note risks including raw material availability and cost increases, operational problems at manufacturing facilities, competitive pressures, and economic conditions.

Management Commentary and Tone:

• President and CEO Aaron Schapper stated that "Focused Transformation" initiatives drove commercial excellence and year-over-year revenue growth.
• Management highlighted that SG&A expense as a percent of revenue decreased year-over-year, indicating sustained transformation savings and disciplined investment.
• Schapper noted that the completion of the Myers Tire Supply divestiture enables a focus on core products and operational productivity to offset inflation.
• The tone regarding the fourth quarter is positive, with expectations for significant margin improvement.

Other Key Points:

• The company exited approximately $3 million in low-margin products by idling two rotational molding facilities.
• The sale of Myers Tire Supply generated proceeds of $23.6 million in the quarter.
• A loss on debt extinguishment of $3.5 million was recorded due to amending the credit agreement.
• Cash dividends paid were $5.1 million for the quarter.
• Net debt reduction was achieved through a combination of operating cash flow and debt restructuring activities.