MYERS INDUSTRIES INC Q3 FY2025 earnings call

• Aaron started by reviewing the third quarter, noting net sales were $205.4 million, $0.19 per share earned, adjusted EPS $0.26 up year-over-year, and free cash flow doubled. - Update on transformation program: Completed MTS strategic review and launched sale process with KeyBanc. Made progress on 4 objectives, including establishing culture of execution, sharing best practices, and aiming for $20M annualized cost savings. - Sam reviewed third quarter financials: Adjusted gross margin increased 150 basis points to 33.9%, adjusted operating margin improved 20 basis points to 10.2%, operating cash flow $25.8 million, CapEx $4.2 million, free cash flow $21.5 million, debt reduced by $10 million.

Third quarter net sales were $205.4 million, slightly higher year-over-year. Material Handling net sales were up 1.9% as strong sales of military products and composite matting were partially offset by lingering vehicle softness and lower storm-driven demand for fuel containers. Adjusted EBITDA margin was 24%, expanding 180 basis points. Distribution net sales decreased 4.4% on lower volumes. Adjusted EBITDA margin fell 260 basis points as the impact of lower volume was partially offset by lower SG&A.

• Net sales outlook: End market outlook relatively unchanged for larger infrastructure and industrial end-markets. - Free cash flow: Targeting capital expenditures near 3% of sales, ended Q3 with cash balance $48 million and total liquidity $292.7 million. - Military sales: Expect strong growth with programmatic nature, expecting continued growth and CapEx plans around opportunities.

• Market uncertainties: Soft demand in Automotive Aftermarket and vehicle end-markets, consumer sales lower without weather-driven events. - Divestiture risks: Uncertainties around the sale of MTS business and its impact on portfolio optimization.

Q: Christian Zyla asked about Material Handling organic growth, progress with Signature, growth opportunities in defense.

A: Aaron said Signature has growth from infrastructure and new offerings, Scepter has growth in military due to near-peer competition needs.

Q: Christian Zyla asked about SG&A and free cash flow.

A: Sam said SG&A costs expected to decrease, free cash flow driven by working capital focus.

Q: William Dezellem asked about additional military opportunities with Scepter.

A: Aaron said military projects are programmatic, expecting strong growth with CapEx plans.