MYERS INDUSTRIES, INC. AND SUBSIDIARIES FORM 10-Q
Myers Industries, Inc. reported its quarterly financial results for the period ended March 31, 2025. The company’s net sales increased by 4.5% to $243.1 million compared to the same period last year. Gross profit margin decreased to 24.1% from 25.3% due to higher raw material costs and manufacturing inefficiencies. Operating income decreased by 12.1% to $14.3 million, primarily due to increased operating expenses and lower gross profit. Net income decreased by 15.4% to $9.5 million, or $0.25 per diluted share, compared to $11.2 million, or $0.30 per diluted share, in the same period last year. The company’s cash and cash equivalents decreased to $43.1 million from $54.5 million at the end of the previous quarter. Myers Industries’ financial position remains strong, with a debt-to-equity ratio of 0.34 and a current ratio of 2.13. The company’s management believes that its financial performance is in line with its expectations and is focused on improving its operational efficiency and reducing costs to drive future growth.
Summary and Analysis of Key Points
Overview of the Company Myers Industries, Inc. is a leading manufacturer of products that protect the world from the ground up. The company operates in two reportable segments: Material Handling and Distribution.
The Material Handling Segment manufactures a variety of plastic, metal, and rubber products such as reusable containers, pallets, small parts bins, and fuel containers. The Distribution Segment is engaged in the distribution of tools, equipment, and supplies for tire, wheel, and under-vehicle service.
Financial Performance
Net Sales
- Total net sales for Q1 2025 were $206.8 million, a decrease of 0.2% compared to Q1 2024.
- Material Handling Segment sales increased 3.6% due to the acquisition of Signature and higher volume, partially offset by lower pricing and unfavorable currency translation.
- Distribution Segment sales decreased 10.3% due to lower pricing and volume.
Gross Profit
- Gross profit increased 7.5% to $69.1 million in Q1 2025 compared to Q1 2024.
- Gross margin improved to 33.4% from 31.0% due to the Signature acquisition, favorable mix, and lower material costs.
Expenses
- SG&A expenses decreased 5.0% to $44.8 million, primarily due to lower acquisition and integration costs, variable selling expenses, and legal/professional fees.
- Depreciation and amortization increased $0.5 million due to the Signature acquisition.
- Freight out costs increased $0.4 million due to higher sales volume in the Material Handling Segment.
- The company recognized $0.4 million in losses on the disposal of fixed assets.
Profitability
- Net interest expense increased 21.5% to $7.4 million due to higher average outstanding borrowings from the Signature acquisition.
- The effective tax rate decreased to 26.5% from 27.0% in the prior year.
- Income before taxes increased to $9.3 million from $4.8 million in Q1 2024.
Liquidity and Capital Resources
- The company had $35.3 million in cash, $231.7 million available under its credit facility, and $391.8 million in outstanding debt as of March 31, 2025.
- Net cash provided by operating activities was $10.1 million, down from $20.3 million in the prior year, due to changes in working capital.
- Investing activities used $8.0 million, down from $354.5 million in the prior year which included the $348.3 million Signature acquisition.
- Financing activities provided $1.0 million, down from $336.9 million in the prior year which included proceeds from the Signature acquisition financing.
- The company amended its credit agreement in 2024 to facilitate the Signature acquisition, including a new $400 million term loan.
Outlook and Risks The current economic environment includes heightened risks from factors such as tariffs, inflation, interest rates, supply chain disruptions, and labor availability. However, the company believes it is well-positioned to manage through this uncertainty due to its strong balance sheet, liquidity, and diverse product and customer base.
