Myers Industries (MYE) 4 Nov 242024 Q3 Earnings call transcript

Hello, and welcome to the Myers Industries Q3 2024 Earnings Call. My name is Elliot, and I'll be coordinating your call today. [Operator Instructions] I'd now like to hand over to Meghan Beringer, Director of Investor Relations. Please go ahead.

Thank you, Elliot. thank third joining quarter and to conference everyone, XXXX review results. afternoon, you Myers for call Good I'm Meghan Beringer, Myers Industries. Senior Director of Investor Relations at

Officer; outlining Officer. After XXXX. the Joining Interim closed quarter today, Executive Dave of is a markets results President and press for issued Executive third release Vice Financial me our financial Grant Chief Basque, and we Fitz, our today Chief our the

our to XX-Q turn found as for these cause earnings accompany risks, periodic company's at and from these management's question-and-answer you session. Please adjusted today's the now of the this EBITDA filing. Please the profit, and on We pursuant This filings prepared are of forth the may expectations which are company's financial our set such the Securities to event. information the would presentation which differ safe have we prepared disclosures. that we Basque. this discussed non-GAAP call. be SEC Such adjusted X to measures will advised call also made webcasted and Litigation please on Slide provisions share statements under adjusted income, I Reform turn forward-looking adjusted those remind factors tab this posted as transcript like statements. Also, After gross after I to is and involve be current be factors, archived other may remarks, These may to being harbor Investor Slide is will to statements in expressed presentation Relations website to will call. based risks, make www.myersindustries.com. over a or harbor call available of our the in of a safe some may turn along operating are uncertainties host results shortly during other XXXX. materially Private the comments Dave X remarks, on uncertainties concerning per presentation, and Further, call implied the Act and be the that in of certain with

welcome as I entrusting Meghan. for lead quarter call. you this make me President everyone, time our we will to and Myers' with transition. of I'm forward. through you, Good like earnings Board, together Interim to pleased to confident Thank of to with Board that improvements Industries thank Myers speak CEO. afternoon, XXXX would Myers the and to the to continue third move I'm support

Please to Now let's discuss quarter. turn third Slide X. the highlights the of

the with quarter, the Systems During allowed adjusted portfolio, EBITDA and of addition the Myers performance growth. along for to gross Signature Scepter's sales, strong margin

end year, Signature markets, to gross differentiated drive These was power highly primary of help recreational developing several in by headwinds prior automotive aftermarket. and margin of about product driver revenue those due XX% to driven products increased versus and notably Myers the the For of fuel the line. us market contracts cans and marine during expansion additional in the their military growth. Demand persisted helped the of our delivery branded similar benefit end impacted quarter sales by the hurricanes. the Scepter's grow quarter, our X to demonstrate in brands vehicles, and recent

position and reduced million These $XX current customer demand revenue food affected customers fully cost XXXX. our are to $X to to $X million macroeconomic in from headwinds. capital million cautious these are by of anticipate $X conditions. cost end of the plan as we in annualized tranche to are benefit and yield behavior of initiatives are year cost-cutting improvement we incremental savings. addition, initiatives market given remainder our and realized announced of of are the beverage The synergies in million many for challenges, will seeing In now introducing our in that help end be sales the mitigate response into markets will actions activity Signature delaying the likely added the an the the schedule This We XXXX. In spending and strengthen and increasing on continuing spend acquisition. previously these

of our Myers next the committed During down future to approximately We by our $X expansions, for million the paid totaling acquisitions. also we quarter, and $XX remain A of leverage revolver, our ratio reducing $X end year, to of of positioning loan amortization Term million paydown. Xx million debt

Given is X year adjusted share. Slide earnings are the reminder to $X.XX today's of current our to our lens. reducing full we of $X.XX presentation a of conditions, diluted per guidance the strategic range

to & fuel Signature hurricane lightweight many Systems. in Handling Automotive Buckhorn, respond maximizing value and we is in to portable positioned the of market. working power Scepter our rapidly X focus for acceptance taken Storage, Protection are also spike This Engineered new in summarizes of our comprised on Akro-Mils, winning efforts. the portfolio and Scepter is while They X Aftermarket Our for during positioned well ammunition contracts that is we of continue containers, support which strong containers actions quarter. grow have Solutions that portfolios. Slide to see portfolio demand Scepter third on brands. the military of recovery was to the

for sales also MegaDeck We momentum strong ground Signature's product. protection have

faster product through our is which our industry channel, growing the average. offerings expanding than are e-commerce We

portfolios, brands appointed to significant This business. cost our and in short amount Distribution and a to a focus excellence, in In cash growth. Across actions investment improving our Solutions by as growth. the adversely business, experience the defined flow have Aftermarket they of commercial Automotive power operational on in Engineered time, e-commerce series of improve our impacted In channel they've September, conditions. for on positive team will fuel team effectiveness. we revenue reduction future current operational continue macroeconomic specifically been we and Continued a has focusing Myers' late leadership new and

quarters. see We the actions these the expect in to results of coming

X. Slide to Turning

Over spike of Signature from who is our examples Signature's are customers XX% past we by how of revenue growing. few in a saw this use power of In are restoration assisting growing. review their And efforts. new come XXXX the brands customer will customers. products in storm Let's a base quarter,

X, turning military to to The growing. the of that are and Slide Scepter of Pro sales Station. of anticipate highlights forecast industry grow. Additionally, $XX recently awarded manufacturers. In They will power million tools Fueling the track team was Tool from exceed Award summary, brands on for launched to its Scepter we sales. continue XXXX groundbreaking leading Powered Innovation This the award are our also fasteners

our actions our did our However, the meet not expectations, operational to taking we're results. results improve consolidated quarter both past and and during commercial

Grant turn to review of call our our the for and a over to results detailed quarter third I'll outlook. financial Now updates

full would Thank increase driven both and with by Net or X.X% compared acquisition and to the both summary volumes strong X the like quarter XXXX Scepter XXXX, on financial lower military our go results. over of to containers, Slide of you, were third pricing Dave. I end the third $X.X sales segment. by for the Signature and $XXX.X offset market million, demand for quarter in to which million begin increased fuel across the other the products the

primarily of to SG&A third an quarterly by the QX compensation. mix adjusted costs, was XX.X% of same XX.X% we $X.X not general from $XX.X or million and in On X.X% affect increase and gross to Handling margin that of The in third compared third million initiatives basis, material was expenses anticipated profit The to favorable Our X.X% compared and the XX.X% acquisition partially adjusted XXXX. volume. Selling, noncash was or as compared $XX quarter savings a Signature, $XX.X offset percentage quarter the compliance. million, sales Material to business partially variance largely margin the income to to $XX.X cash to driven period seen Adjusted business. compared acquisition of for in Rotational to the $X compared to market $XX.X decreased to in lower increased impairment quarter in cost covenant year. Operating loss due XXXX. results in the income of as of In impairment charge in the Segment. by favorable our increased lower the quarter, variable that does of million within we product goodwill gross related gross operating million XXXX. to reduced Molding million of headwinds $X.X administrative last last pricing increased recognized year. by adjusted Signature, charge and XX.X% million or have the XXXX of The offset million a a million in an continued QX $XX

year, versus EBITDA expense compared quarter to quarter. primarily up with third was by finance Third quarter to acquisition profile. million which compared high-margin $X.XX EBITDA of in to difference was the adjusted term XX% the related $XX.X to was of per Signature's $XX.X loan, the with last our XX% driven margin Signature. in Diluted year adjusted interest the to million largely used Adjusted XXXX, share associated prior earnings in $X.XX QX increased of was

an of XX. please For turn each overview to segment's Slide performance,

the $X.X driven as costs offset by prior partially or pricing, or pricing. Net increased Sales primarily offset basis and positive lower end volume adjusted EBITDA Signature XX.X% For partially margin Signature million RV improved Handling's were well and XX.X% compared and Segment by pricing, prior market. million the mix. to primarily for $X.X favorable increased SG&A The compared year. as by sales in EBITDA the in Adjusted to boxes to million the IBC $XX.X volume $X.X beverage food were sales $XX.X XX.X% marine costs. QX EBITDA decreased as last in in of to acquisition, year-over-year lower to XX.X% $XX.X attributed by margin Segment, or containers sales million, XXX offset decreasing and to material partially $XX from Distribution the can were volumes sales and and XX.X% XXX prior seed in net adjusted continued military year compared an points and within for driven improvements improvement margin basis million, to PACE Distribution to or decreased Handling to as year's the declines of to Scepter's performance and markets Segment million, X.X% partially points end million the offset Material and by year. sales to increased and The higher by quarter. Material EBITDA margin EBITDA variances headwinds decline in compared gas adjusted XX% the [ ] growth resulting or and sales the the

XX. to Turning Slide

efficiencies to on and $X actions in identify million Signature revenue other savings initiatives. organization As manufacturing savings million prefaced headwinds of target mitigate we to improvement synergies. the to continuing our plan end of an improve. goal when are savings by tranche $X cost-cutting that to The labor original incremental cost driven $XX also Myers with into be on more seeing transformation annualized These earlier, accelerate cost to Generally, is the new additional million initiatives market will simpler, -- these million, $X are which and we of execute additional growth continued positions also and will continue to initiatives will drive as company an additional efficient annualized our markets. better the several help and evolves conditions a in savings,

flow expenditures as up XXXX Turning inventory XXXX $XX.X increased Capital Slide Working quarter to Cash of million, sales and third quarter a cash million. levels of and Free and production reflecting was was at end Scepter seasonal for capital receivables investment the the of $XX.X capacity for timing the at due XXXX in Patch $X.X to to compared the to additional of third of third $XX.X quarter of quarter million quarter on Rubber. million increased projects. maintenance inventory percentage hand were compared for totaled XX. XXXX. at third

quarter Our a at basis slightly adjusted the lower earnings. quarter, up primarily from in due XX EBITDA third of was pro the trailing to the on ratio the quarter-over-quarter second for the X.Xx forma to end X.Xx, debt months

Slide the XX, in in and with mentioned priorities. for A introduction, company reiterate Term million the during amortization million $X million $XX I down capital allocation for want the As debt Myers to Dave $X Loan paid his revolver. On quarter, the

creating focused Myers initiatives are of volumes simplified on revenue increasing our strength a cost-cutting we brands. and X and via noticed, the As through power

be support company's liquidity with will down pay hand is Myers on to sheet priorities. on to maintaining a balance cash debt. first focused sound the ample Additional investment allocated

which our please for year our turn XX, shows to fiscal guidance. Slide and updated Now XXXX prior outlook

reflect to markets, We our are several reducing discussed in which our guidance year of we full earlier softer this in presentation. demand end

$X.XX at was of $X.XX million, share range tax net prior range $X.XX, Our of in capital $X.XX X% new growth to to rate guidance in effective $X.XX. diluted outlook expenditures to in $XX the income XX%. share million ranges are approximately per the X%, sales remaining range diluted to of to The of $X.XX. an with the earnings net per Adjusted $XX

to Turning Slide XX.

significantly Our some third unfavorable quarter of results our end macroeconomic impacted markets. affecting were conditions by

We and driving remain strategic the future growth committed and are to looking priorities Myers our toward on Industries. executing across

our on executing are long-term We strategy.

$XXX in Signature strong Our is million results. investment delivering

top that are We positioned businesses markets. additional with positions acquire hold niche profitable strong to brands in

is improve implementing actions will annualized help savings. identifying also in performance to competitive. from headwinds, new us The actions this Distribution our team $XX million are the end business. leadership improving An We to cost mitigate to market business. These positive important priority of pressures enabling new remain the is

new and cost of on high-growth our expanding sources participation demand. increasing e-commerce operator call are our sectors in These will over longer-term and to markets steps we that, proactive in of Operator? channel for as end and such capitalize turn competitiveness questions. including like for our infrastructure position markets, as Finally, some recover. With to our improve to Myers end I'd demand growth the military the

First Christian question KeyCorp. comes Instructions] Zyla [Operator with from

in Myers been think business focused biggest you've at X which parts now. as can X last months, seat you been for Dave, what have the the of years CEO for been in the you the I know you you've And make impact? do on? But

primarily. is our secondly, brands. our businesses -- our Well, we're growing on we're costs control in our X focused for focused areas. Products getting on power optimizing Engineered One And

to plans areas primary So I've we've for of a a of those us. slate yes, objectives. But those been It's lot. a time achieve busy developing are been learned the focus.

then do midterm? the And or the the in has upside of as guys guess, played term have see most with been the where I you X And Great. year the out, performance where power surprised your you near most brands?

Christian, this Yes. is Grant.

about bulk business. looking and the say well RV been as year, as back as automotive marine So for with at with the headwinds, Distribution would aftermarket we've we've I talking facing the year, the of been our in the

continued has something to of that us in year. be the So throughout front unfortunately that's been

record just -- earnings some containers. with offset We IBC changed our talked our happened some end the declines in degree. year. last I IBCs certainly, well some and that full [ as with particularly PACE time cycle in seed we the containers with our think to see beverage we additional because were that continued with or was as a And X-year to seed seeing had -- last market, as That a now the food that some there's containers year anticipated since we're our is what's our We ] industrial within some product. to to QX headwinds well boxes that extent. degree to were hasn't the some as hoping going

back just we that we've business, we last that also recognized the And to issue so think I most since additional the Distribution QX in earnings. The make on go growing need probably We've is need to that's the track that really has move changes some think the and Mohawk business. past met work piece business I integration changed to get and that the after start our issues. towards on forward we of a talked some lot the to

in gaps have overall just focus capabilities. We it's that looking is got issues business, well to the think win And as put we had now pretty at that focusing for business. Mohawk in with through place. that's the not where We've and customers been where commercialization leadership made the really as we we also do the team significant think have coverage I about with leader what of strong to the we're might business they've improve business. of well, members some on need reductions some transition lost just back might excited we cost been And that too. as the other changes Distribution that our can we sales

question next my up tees well. that guess I And pretty

suggests So EPS to $X.XX $X.XX. guide range a XQ of your in

and will margin? we Handling Or margin? be a negative is reduction the that Material should significant thinking in Distribution you it So post expect positive

across be with to going bit probably a might fourth the quarter. seasonality little It's In general, of have a we Yes. mix things.

a that businesses, for our start things bit down fourth of little quarter. Some to slow

we So in Material we volumes have our there lower to the the wouldn't margin We with a that the of to in to that. term, the need business. and Distribution in would towel is to profitable margin mentioned, some throw continue longer place business have do but negative that Handling some continue I with just with over impact to work business. like the on on that as yet putting quite would we leadership that without be profits business be question, changes have for I grow

I military upsides the over growing in year. didn't prior continued it see the We of for $XX upside address in business. for get Scepter. is ask the and particular, talked did You projected -- the it do this $XX well, million terms think we was business we see just last that I significant that probably in million to with, million we to question, as really $XX business year from We've up about will next year, some that

up we've place there some put strong business. for and really both that capacity continued that in improvements of the we So as the ramp contracts

storm -- of and those QX balance that. tailwinds get we Additionally, as will X from timing some in quarter activity, some recovery and between the essentially the hurricanes fourth QX further of activity hurricane the that

as that see for just out. we the So just potentially with some quarter we upside that opportunities balance

and continue about, to about And very to talked the the we that we to business, as continue e-commerce see forward. business, Signature drive strong see that growth the but parts and only Distribution for we In mili of us molding projects. demand sales including the also Additionally, very, brands, business. feel for in continue rotational business other longer-term our support with our well tank X well our helps to do our RV business, to power as as not good continues

one e-commerce just for strategy, that you some and think kind can that portfolio benefit point, me, kind your us DTC then can from the e-commerce are of Last e-commerce Great. on at an just there give parts working? channels? queue. you up look opening back But of I'll or of what's then other going in jump on been And update and

Yes.

continue We our line Akro-Mils to that's e-commerce. largest sold -- is product through

and It's primarily learning that. continue sales growing our the grow Amazon. We ability influence through through Amazon. We're to to in

that's drive new increases. through also our So lines we're at also we're and example, products that, for helping better products the distribution But Amazon, and getting some and Scepter. launching product Roto in

So really fuel growth. effort and product. have we that's to of it's a and -- substantial -- And also of with and you're when those managing on competitive lot line -- that. at a Amazon are because all in better but -- that, better for on spend sales spend we're order team in focused margins fine that. greater working constantly We We lot you're getting profile to the helping a a and resulting there's that

with now Dezellem Capital William Tieton to Management. We turn

questions. Two

and will the First to the to Distribution Jeff quickly Or bring kind to relationships the in process of new they can that be recruiting disti all, traditional gaps? in? in salespeople bring with help does team additional people fill they salespeople more come with or of

good we and are they're rapidly a already have determine to I relationships done analysis bring fill taking in of territories, where They and certain those But working They've positions. very there's industry, think good a customer to both we little coverage right? job gaps, very the action they're board. the salespeople of analyzing do recruiting. have also there, to Yes, on a bit

Las would I are conference we SEMA at this in Bill, thing is week. just other the Vegas The add, here

we order, really program promotional putting been in largest aftermarket by through quite activity to the auto some a that in And incremental excited sponsored has might job anticipated very completely nice week. haven't here this just our of suppliers get this one that's a together about conferences. So done the team short volume big that's we we are really additional that that pretty see

things can event really there thinking fresh good for have channels and the a time, but this than month, good has analysis, ways with leverage up week. that at as in probably about also just some a team So we leverage mentioned, with been Dave less but that of some SEMA our this come here we short also the have like just existing they

of And savings to helpful. anticipated then cost million for what $X to the That's to back was original time that fully be original the million, Great. line $X implemented?

similar did or million, as It's we we announce the to because have Bill, distribution that. as our some little front-loaded had distribution start we Atlantic a an this that probably is more had on closures with bit well earlier facility. -- And centers we Grant. what with our system $XX rotomolding

implement the of be year, probably rate those But So be we're say, I year ahead of at full but of by should XXXX. probably little continue million. we -- bit through would we've the in general, a the to going time I up that and to identified tranche end run definitely $XX a versus would the current would that

So not than first tranche. But exact a giving would general, implemented the tranche be earlier should in that I we guideline say, firm be you may second the timing. of

We now Instructions] Toor Capital. Blackroot Nick with turn [Operator to

the or the in up Tranche to Are measures, on X follow quarter your question. X any reflected previous Tranche Just cost-cutting third of the the results?

-- Tranche initiatives most QX. in implementing the Grant. Nick were is this For really our We X part,

not significant with results. QX the So a impact

But that of those say that would implement will really headwinds looking some XXXX. potentially QX. again, we've about I the of initiatives start initiatives, we'll We continuing some some our get to with offsetting those markets. end But from some talked some pick to momentum throughout of be in that up of at we will

those continue a of terms the at on accelerating we're actions. and where close eye just want develop we to very markets that how to So it is something keep in

Great. Okay.

impact? but see quarter, your sort nothing should start third is EBITDA really full the really we of of those in see fourth reflected we quarter, to in where the in the So is but some in XXXX

yes. correct, That's

strategically give your is with business, then that me terms portfolio? it of if your high-grading just part as rationale does of in you're to of Okay. the fit could you Myers? Distribution business sense of of what strategic Great. keep to a continuing sort And trying terms how accomplish in What

was businesses business, we of business. was business I Distribution part important the -- Distribution to mean Well, Myers of very founded distribution -- Yes. improving or the on is heritage. one was original original an business. the We're committed that Myers the

So we've we're on of it lot got business. of a and our -- people and some lot we a of commercial operations focusing best put effort, now to improve that

our So levels to in that's we've is is certainly business our profitability Distribution return stance, that on to from that it the improve main enjoyed and the that there. focus past

Okay. line. lower-margin else's it you but guidance a that It sort Is back portfolio. turn just I that, XX% the few seems of thinking to business? going it's better shareholders' top a you organic have the profile. somebody your secular mean, forward profile maybe around, it still guys profile just it's once just growth generically had But one quarters that doesn't growth it's growth the maybe is a I of And of given on opinion, the business. going than guess of sort back

would growth power brands. X profile still opportunities general, I very strong in Yes. for the see we say,

we business, the and And from and we in moving really grow business the future. Scepter very profile and growth business dealing We our see to so we're I that Buckhorn business, area, Signature with Akro-Mils that. expect in the some food those the say certainly with headwinds with to would to continue but with also we're that away continue beverage have strong

We that's continue Solutions the essentially revenue say, to we've Distribution cost to our wouldn't believe and business business. had Automotive terms of I to Aftermarket say looked any at on Distribution we've on focus be no, obviously, we've significant change year. as seen there. The those as the said would declines business been put how had or I Engineered -- GDP the the can measures with in I disappointing So levels. in type that But well been the us, one we growth want we as our of that we in both there's place, trends that basically this portfolio really improve businesses -- has side would

no further have questions. We

concludes remarks. So Meghan final for this our to hand I'll Q&A. any back Beringer now

Yes. today. everyone, joining you, us Thank for

like on questions you in would day. If have contact me. can a Slide to great and additional team, time interest your is have you XX. Myers, our schedule Thanks My or with management information for

Thank you.

everyone. Thanks,

and thank today's gentlemen, you like concluded. call now Ladies your participation. to We'd has for

You may disconnect now your lines.