Myers Indus Q3 2026 Earnings Call Transcript

Myers Indus (NYSE:MYE) reported third-quarter financial results on Thursday. The transcript from the company’s third-quarter earnings call has been provided below.

Benzinga APIs provide real-time access to earnings call transcripts and financial data. Visit https://www.benzinga.com/apis/ to learn more.

View the webcast at https://events.q4inc.com/attendee/235249341

Summary

Myers Industries Inc. reported an 8.1% year-over-year revenue growth in Q3 2026, driven by strong performance in infrastructure and food and beverage sectors.

The company completed the divestiture of North America Myers Tire Supply, aligning with its Focus Transformation strategy to simplify and concentrate on high-value growth platforms.

Despite facing margin pressure due to increased resin costs, pricing adjustments are expected to improve margins significantly in Q4.

Four key growth platforms were highlighted: Signature Systems for surface protection, Scepter for dangerous goods storage, Buckhorn for specialized storage, and Akro-Mils for storage solutions.

Signature Systems is projected to grow at a compound annual rate of 13% through 2026, with a focus on expanding composite matting solutions.

The company reported a net leverage ratio reduction and increased free cash flow, supporting its capital allocation framework.

Future guidance indicates confidence in continued growth, particularly in food and beverage markets, while vehicle market outlook has been lowered due to mixed demand indicators.

Full Transcript

OPERATOR

If you would like to ask a question, please press star 1 to raise your hand. To withdraw your question, press star 1 again. Please limit yourself to one question and one follow up. I will now hand the conference over to Megan Behringer, Senior Director of Investor Relations. Please go ahead.

Meghan Geiger Beringer (Senior Director, Investor Relations)

Thank you. Good morning everyone and welcome to Myers Indus third quarter 2026 earnings review. Joining me today are Erin Schapper, President and Chief Executive Officer, and Samantha Ruddy, Executive Vice President and Chief Financial Officer. After the prepared remarks, we will host a question and answer session. Earlier this morning we issued a press release outlining our third quarter financial results. In addition, a presentation to accompany today’s prepared remarks has been posted. Those documents are available on the Investor Relations section of our website at myersindustries.com. This call is being webcast live on our website and will be archived along with a transcript of the call shortly after this event.

Now please turn to slide 3 of the presentation for our Safe Harbor Disclosures. I would like to remind you that we may make some forward-looking statements during this call. These comments are made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. Such statements are based on management’s current expectations and involve risks, uncertainties and other factors which may cause results to differ materially from those expressed or implied in these statements.

Further information concerning these risks, uncertainties and other factors are set forth in the company’s periodic SEC filings. Also, please be advised that certain non-GAAP financial measures such as adjusted gross profit, adjusted operating income, adjusted EBITDA and adjusted earnings per share may be discussed on this call. Finally, all results presented and discussed in today’s call are from continuing operations. Now please turn to slide 4 of our presentation as I turn the call over to Erin.

Erin Schapper (President and Chief Executive Officer)

Thank you Megan. Good morning everyone and thank you for joining us. I will begin today’s call with a review of our third quarter results followed by an update on our Focus Transformation program. I will then introduce our four key growth platforms with a focus on the opportunity ahead in our Signature business. Sam will provide a detailed review of the third quarter financials and our outlook for the year. Starting with slide 5. We delivered strong year over year revenue growth, up 8.1% in the quarter, supported by strength in infrastructure and food and beverage. Infrastructure revenue improved 38% on continued robust demand for our composite matting. I will come back to our infrastructure business later in the call. Food and beverage was up 12% on strong demand for seed boxes and intermediate bulk containers. In addition to these positive demand trends, we are driving commercial excellence initiatives across the organization as part of our Focus Transformation.

We faced margin pressure in the quarter primarily due to a spike in resin cost. While we anticipated an increase and continue to implement pricing adjustments, there is a lag until full price realization. These actions, combined with a moderation in resin costs, are expected to drive significant margin improvements in the fourth quarter. EPS from continuing operations was $0.13 on an adjusted basis. Income from continuing operations improved year over year to $0.32 despite gross margin headwinds.

During the third quarter, we completed the divestiture of North America Myers Tire Supply. This was a significant milestone in our Focused Transformation journey. The sale simplifies our portfolio, enabling us to focus our resources and investments on the remaining businesses that are closely aligned with our mission of delivering products that protect. I’d like to take this opportunity to recognize and thank our former MTS colleagues for their many contributions and commitment over the years.

We wish them continued success moving forward. Please turn to slide 6 as we briefly revisit the three strategic priorities guiding our Focus Transformation. First, we are delivering differentiated products that protect by strengthening customer relationships, enhancing commercial excellence and deepening market insights to better address evolving needs. Second, we are advancing operational excellence and cost leadership, driving greater consistency, productivity and efficiency across our organization and instilling a culture of continuous improvement.

And third, we are prioritizing investments in our key growth platforms, focusing resources on businesses where we have a strong competitive advantage and see the greatest opportunities for profitable growth. Our 2026 year-to-date results validate this strategy. We have grown revenue, expanded margins and generated strong free cash flow while continuing to improve operational excellence across the organization. With sequential margin expansion anticipated in Q4, we are on pace to deliver a strong year in 2026.

Turning to slide 7, I’d like to provide an overview of our four key growth platforms where we are focusing our investments and see meaningful opportunities to create long-term value. One of our greatest assets is the strength of our portfolio and the range of products we offer that serve a diverse set of customers in specialized end markets, addressing essential needs where safety, performance, durability and reliability are critical. Across these markets, we are leveraging our expertise in engineering and material sciences to develop highly customized polymer solutions that replace traditional materials such as wood and metal.

Surface protection, led by Signature Systems, provides composite matting and portable flooring solutions supporting infrastructure development, construction and large-scale events. Dangerous goods storage and transportation through Scepter delivers specialized containers for fuel, chemicals, water and ammunition serving consumer, industrial and vehicle end markets including military applications. Specialized storage through Buckhorn provides engineered reusable packaging and material handling solutions serving industrial, food and beverage and vehicle.

Storage solutions through Akro-Mils offers storage and organization products that improve productivity across industrial and commercial markets. Together, these growth platforms are where we believe our technology, customer relationships and exposure across multiple markets provide competitive advantages and a strong foundation for continued growth. In addition, our rotational molding operations provide specialized manufacturing flexibility and engineering expertise that supports these growth platforms.

As we continue to execute on our strategy, we believe the resilience of our products-that-protect portfolio will enable us to pursue market opportunities and deepen customer relationships. Last quarter we highlighted this opportunity through a deep dive into Scepter. This quarter we provide additional insights into Signature, a particularly compelling example with a strong market position and a significant runway for future growth. Turning to slide 8. Signature is a leading provider of highly engineered composite matting and portable flooring solutions, serving two primary sectors for this end market: infrastructure, which represents approximately 80% of sales, and stadium, which accounts for the remaining 20%.

Within infrastructure, our products provide temporary access ways and work platforms for transmission and distribution, oil and gas and large-scale construction. In stadium, our portable flooring solutions protect turf and other surfaces at athletic venues and major events. What makes Signature particularly attractive is its proprietary material science capabilities, engineering expertise and continued product innovation. These strengths enable us to develop differentiated solutions that enhance performance.

Most recently, we launched Ice Shield R10, which was developed by combining customer feedback with our Signature product innovation. The Ice Shield solution incorporates an insulating layer to maintain freezing temperatures, save energy costs and prevent damage to the ice sheet below. Built to handle heavy pedestrian traffic, staging and equipment loads of up to 20,000 pounds, our stadium product offerings now expand into the ice arena market, enabling facilities to protect the playing surface and generate additional revenue by hosting concerts and other special events.

Turning to slide 9, we estimate Signature’s total addressable market at approximately 4 billion, with composite matting representing roughly 19% of the market today. This relatively low penetration presents a significant opportunity for continued conversion from traditional wood to composite matting, providing a compelling runway for long-term growth. Compared to traditional wood solutions, our composite solutions offer significant performance and economic advantages.

Our mats can be up to 40% lighter and last up to five times longer, reducing transportation and replacement costs. They also provide improved traction and more stable working surfaces, enhancing site safety while reducing environmental impact through closed-loop recycling programs. Together, these benefits deliver a lower total cost of ownership and support continued conversion to our composite solutions. Turning to slide 10. Signature serves several attractive market subsegments: transmission and distribution, which represents approximately 23% of our addressable market, supported by increasing electricity demand and ongoing grid modernization; energy, representing approximately 27% of our addressable market, includes applications where durability and reliability are critical, primarily for oil and gas markets; data centers, construction and civil projects represent approximately 28% of our addressable market, benefiting from continued investment and construction activity; finally, stadiums and events, representing approximately 17% of our addressable market, utilize our solutions to protect playing surfaces and provide access for sporting and entertainment events. Across these markets, Signature is positioned to capitalize on favorable secular demand trends and continued composite adoption, providing multiple avenues for sustainable growth.

Turning to slide 11. Since acquiring Signature in 2024, we’ve continued to build on a strong market position with revenue expected to grow at a compound annual rate of approximately 13% through 2026. Looking ahead, we expect to build on this momentum with annual revenue growth percentages of mid to high teens through 2029 supported by three primary drivers. First, we expect the current surface protection market to grow, supported by the favorable long-term demand trends we just discussed.

Second, we expect continued conversion from traditional wood matting to composite solutions to contribute additional growth as customers increasingly recognize the performance and economic advantages of composite solutions. And third, we expect new customers and products to contribute additional growth. We’re focused on deepening relationships with existing customers, broadening our customer base, and commercializing new products that expand the applications we can serve.

Importantly, we’re also investing in the capacity needed to support this growth, with planned expansions of 30% in 2027 and an additional 30% in 2029. We expect our innovation pipeline, averaging one product launch per year, to generate more than 60 million in incremental revenue through 2029. Together, these drivers give us confidence in Signature’s ability to sustain attractive growth, maintain a leading market position, and become an increasingly meaningful contributor to Myers Indus profitable growth.

Signature’s breadth of surface protection products uniquely positions us to serve a diverse set of customers across a wide range of applications, further differentiating us in the marketplace. With that, I’ll turn the call over to Sam for a review of our third quarter financial results.

Samantha Ruddy (Executive Vice President and Chief Financial Officer)

Thank you Erin and good morning everyone. Please turn to slide 13. Net sales increased 8.1% year over year. Net sales would have increased 10.4% year over year, excluding the impact of our decision in the fourth quarter of 2025 to exit low margin products with the idling of two rotational molding facilities. Infrastructure and food and beverage delivered strong growth in the quarter, while vehicle and consumer remained flat. Industrial end market sales were also flat year over year as timing-related softness in military demand was offset by strength across other products in our industrial portfolio.

Adjusted gross margin decreased 360 basis points to 28.2%, driven by higher resin costs, unfavorable mix and unplanned maintenance costs, partly offset by higher volume and pricing actions. We included a resin cost index in our presentation on slide 14 to show the recent spike. As the chart shows, resin costs increased 76% from March to May. As the costs increased, we were able to take pricing actions, although with a margin impact due to timing and magnitude of the increase.

As costs have stabilized and pricing actions are realized, we anticipate significant sequential margin improvement in Q4, in line with trailing twelve months average adjusted EBITDA margin. SG&A was lower as a percent of sales year over year, reflecting actions we have taken as part of our Focus Transformation. Adjusted operating margin decreased to 10.4%, down 210 basis points over last year. Adjusted EBITDA margin decreased to 15.5%, down 280 basis points over last year.

Adjusted EPS was 32 cents, up 3.2% year over year on lower interest and tax expense. Please turn to slide 15. We ended the quarter with a cash balance of 53.5 million and total liquidity of 254.7 million, providing us with ample flexibility to support our capital allocation priorities. We reduced net debt by 28.5 million during the third quarter, primarily using the proceeds from the MTS sale, resulting in a net leverage ratio of 1.86 times, well within our target ratio of 1.5 to 2.5, and down significantly from last year when it was 2.64.

We plan to further reduce debt in 2026 as we continue to fortify our balance sheet. Third quarter operating cash flow was 17.4 million and capex was 5.9 million, resulting in a free cash flow of 11.5 million. Year to date, free cash flow is 61.9 million, up 29% from last year. Working capital as a percent of trailing twelve months sales increased sequentially primarily due to income tax receivables and the prepayment of our annual insurance renewal.

We continue to prioritize working capital management to improve both metrics. Please turn to slide 16. Our capital allocation framework balances investing in growth while returning cash to shareholders. Capex was 5.9 million in Q3. For the full year, we expect capex to be 3.5% of sales, with investments in organic growth, productivity and infrastructure projects. Our 2026 projects include a European military production launch, capacity expansion in infrastructure, new automation to drive productivity and mold and press replacements to sustain our core operations.

Turning to slide 17. As we approach year end, we are updating our full year 2026 outlook. As a reminder, our market outlook excludes the impact from exiting low margin products and idling two rotational molding facilities in Alliance, Ohio that occurred in Q4 2025. This represented approximately 3 million in revenue in the third quarter, or approximately 13 million year to date, primarily industrial and consumer markets, with favorable impact to earnings.

For industrial, we are reaffirming our expectations of moderate growth as we continue to see momentum building in capital spending trends from our industrial customers. While we expect timing-related headwinds in our military business to continue into the fourth quarter, we remain confident in our overall industrial outlook. As we’ve noted previously, military demand can fluctuate from quarter to quarter, but our long-term expectations remain unchanged and we continue to expect revenue CAGR of 10% to 15% from 2025 through 2028 in this business.

In infrastructure, we reaffirm our expectations of strong growth primarily driven by demand for our Megadeck and turf protection products. As Erin discussed in her prepared remarks, these products continue to support U.S. market expansion fueled by sustained investment in transmission and distribution utility projects, data centers and large-scale construction. Through 2029, we expect a mid to high teens percent CAGR for this business. For vehicle, we are lowering our outlook from stable to down. Demand indicators have been mixed for the year. The U.S. RV industry continues to experience meaningful year over year decline, driven by higher interest rates and fuel prices as well as weak consumer confidence amid economic uncertainty. Marine and commercial vehicle demand is improving while some automotive OEM program launches have been delayed. In consideration of all these factors, we are more cautious in our vehicle market outlook.

In consumer, we are increasing our outlook to moderate growth from stable. At the start of 2026, strong winter storms across most of the U.S. created a sharp increase in demand for fuel cans. Stable demand continued throughout the year and is expected to extend through year end. Finally, we are raising our expectation for the food and beverage end market to strong growth from moderate growth, given recent quoting trends, existing backlog and product conversion to our intermediate bulk container products within the food production industry.

Further, we expect seed sales to be slightly positive compared to prior year. We continue to weigh both risks and opportunities for our end markets as we monitor geopolitical conditions, including energy markets, tariffs or other factors that may influence demand trends. I would now like to turn the call back to Erin for some closing comments before we take your questions. Erin?

Erin Schapper (President and Chief Executive Officer)

Thank you, Sam. Our strong year to date performance, including revenue growth, margin expansion and improved cash flow, combined with anticipated significant sequential margin expansion in Q4, positions us to deliver great results in 2026. I’m encouraged by the progress we continue to make on our Focused Transformation. Our teams are driving commercial excellence, improving operational productivity and maintaining disciplined cost management across the organization to improve margins.

With the completion of the Myers Tire Supply divestiture, we have further simplified our portfolio and sharpened our focus on our key growth platforms. As we highlighted today with Signature, we see meaningful opportunities to capitalize on attractive market trends, drive innovation and invest in the capacity and capabilities needed to support sustained, profitable growth. I want to thank our employees for their continued dedication and execution. With that, I’d like to turn the call over to the operator for questions. Operator.

OPERATOR

Thank you. We will now begin the question and answer session. If you would like to ask a question, please press star 1 to raise your hand. To withdraw your question, press star 1 again. Please limit yourself to one question and one follow up. We ask that you pick up your handset when asking a question to allow for optimum sound quality. If you are muted locally, please remember to unmute your device. Please stand by while we compile the Q and A roster.

Your first question comes from Bill Dazellem with Teton Capital Markets. Your line is open. Please go ahead.

Bill Dazellem (Analyst at Teton Capital Markets)

Thank you. Would you please talk in more detail about increasing your view of the food and beverage market beyond what you did in your opening remarks, please?

Erin Schapper (President and Chief Executive Officer)

Yeah, we’ve just—hi Bill. We’ve just seen really strong quotation volume coming in and have a strong backlog going into the end of the year and continue to develop our pipeline. We’ve had a lot of focus with Gustavo joining the team on commercial excellence and just really strong pipeline growth going into the quarter. Bill, as we look at food and beverage, you know, there is obviously a lot of pressure on trying to make sure that food stays low, labor is an issue. A lot of our customers are looking a lot more at automation and looking at the way they do things. And part of that automation is making sure that our product is a part of that mix. And so we’ve seen some pretty good demand along the food and beverage side. Also, as we go through the year and then into Q4, we’re looking at another year of seed and our seed box offering into the food and beverage market.

So between those two things, that’s, you know, our strength through the year so far and then looking into Q4, we feel good where we are on the food and beverage side.

Bill Dazellem (Analyst at Teton Capital Markets)

And do you all feel this is a function of overall market activity accelerating or is this an indication of what the Focus Transformation program can do when successful?

Erin Schapper (President and Chief Executive Officer)

Bill, I would say it’s both. So, you know, our customers have been pulling demand, which is a nice thing. And then also really looking at Buckhorn, you know, I think I’ve said before that, you know, we believe in Buckhorn. We believe in what Buckhorn can do as a business. And, you know, once again, having Gustavo adding focus on product development, we’ve added people on that side of the business to really continue to drive new products into the market because this is what our customers are asking us to do.

Buckhorn is a strong brand and it’s a strong brand in that industry. And I think that we can do a lot. So I think it’s a mixture of both things, both the Focus Transformation and pull from our customers.

Bill Dazellem (Analyst at Teton Capital Markets)

Great. Thank you. And then I have one additional question, please. On the balance sheet, you have 7.3 million of assets held for sale. And given that the tire supply business closed on August 31, that doesn’t quite match with what I would have expected. Would you please discuss what those assets are that are held for sale, please?

Samantha Ruddy (Executive Vice President and Chief Financial Officer)

Yeah. As you know, as we mentioned in our remarks, the sale of the North America MTS Supply business has occurred, but we are still working through the sale of the Central America business. That’s a separate transaction.

Bill Dazellem (Analyst at Teton Capital Markets)

Thank you.

OPERATOR

Just a reminder, if you would like to ask a question, please press star 1 to raise your hand. There are no further questions at this time. I will now pass the call back to Megan Behringer for closing remarks.

Meghan Geiger Beringer (Senior Director, Investor Relations)

Thank you for joining us today. If you would like to continue the conversation, my contact information can be found on the final slide of this presentation. We look forward to staying in touch. With that, we’ll conclude the call. Have a great day.

OPERATOR

Thank you for attending. You may now disconnect.

Disclaimer: This transcript is provided for informational purposes only. While we strive for accuracy, there may be errors or omissions in this automated transcription. For official company statements and financial information, please refer to the company’s SEC filings and official press releases. Corporate participants’ and analysts’ statements reflect their views as of the date of this call and are subject to change without notice.