MYERS INDUSTRIES INC Q1 FY2026 earnings call

• Began 2026 on a positive trajectory with revenue growth, improved earnings, and strong cash flow. • Focus transformation initiatives to improve margins, increase operating efficiency, and instill a culture of continuous improvement. • First priority: focus on core markets and customer value, including selling MTS to simplify portfolio, adding new products and customers, and Signature's turf protection featured in FIFA World Cup. • Second priority: drive a culture of high performance by instilling operational excellence and cost leadership, e.g., increasing use of recycled materials. • Third priority: focus on investments that maximize profitable growth, e.g., moving infrastructure production to optimize manufacturing footprint.

Net sales increased 1.8% year over year. Excluding the impact of exiting low-margin products, net sales would have increased 5% year over year. Strong infrastructure, military, and consumer growth was partially offset by soft vehicle and food and beverage demand. Adjusted gross margin increased to 34.7%, adjusted operating margin improved to 15.7%, adjusted EBITDA margin improved to 21.3%, and adjusted EPS was $0.44, up 57.1% year over year. Ended the quarter with a cash balance of $44.6 million and total liquidity of $289.3 million. Reduced net debt by $18.3 million during the first quarter. First quarter operating cash flow was 26.7 million and CapEx was 2.8 million, resulting in free cash flow of 23.9 million.

• Reaffirming 2026 outlook provided on March 5th, excluding impact from exiting low-margin products. • Industrial expected to have moderate growth with manufacturing capital expenditure recovery and military inventory replenishment. • Infrastructure market expansion driven by data centers, utilities projects, etc. • Vehicle market expected to be stable with mixed demand; commercial vehicles to recover in second half, automotive OEMs to see improved demand in second half. • Consumer to have stable sales with spring sales strong; food and beverage end market slightly down. • Expect some pressure on second quarter growth margins but expect to mitigate cost pressures and expand margins in second half through contract structure, price action, and cost reduction.

• Conflict in the Middle East affecting global resin supply and pricing, leading to higher material costs and potential second quarter margin pressure. • Geopolitical conditions including energy markets, tariffs, etc., influencing demand trends.

Q: Nice growth in infrastructure and market, how thinking about current capacity levels and pricing for signature, and run rate estimate?

A: Talked about utilizing manufacturing footprint better, adding capacity in Orlando, expecting year over year growth each quarter.

Q: HD polyethylene prices parabolic, quantify price-cost impact and supply?

A: Expecting Q2 margin pressure, no impact on supply, steady source of materials, expecting margin recovery in second half.

Q: Update on MTS sale process?

A: Pleased with process progress, hard to time exact closing, working through process.

Q: Free cash flow deployment between debt pay down and opportunistic M&A?

A: Priority is debt pay down, then investing in organic growth, then opportunistic M&A, looking at growth areas and opportunities to bring value.