On August 1, 2024, Myers Industries Inc (MYE, Financial) released its 8-K filing for the second quarter ended June 30, 2024. The company, which designs, manufactures, and markets a variety of plastic, metal, and rubber products, reported net sales of $220.2 million, falling short of the analyst estimate of $241.10 million. However, the reported earnings per share (EPS) of $0.28 fell short of the estimated $0.31.
Company Overview
Myers Industries Inc designs, manufactures, and markets a variety of plastic, metal, and rubber products, including a broad selection of plastic reusable containers, pallets, small parts bins, bulk shipping containers, storage and organization products, OEM parts, custom plastic products, consumer fuel containers, and tanks for water, fuel, and waste handling. It operates through the following segments: The Material Handling segment, which designs manufactures, and markets a variety of plastic and metal products. The Distribution segment offers tools, equipment, and supplies used for tire, wheel, and under-vehicle service on passenger, heavy truck, and off-road vehicles. It generates the majority of its revenue from the Material Handling segment.
Financial Highlights
For the second quarter of 2024, Myers Industries Inc reported:
- Net sales of $220.2 million, a 5.7% increase from $208.5 million in the prior-year period.
- Net income of $10.3 million, compared with $10.6 million in the prior-year period.
- Adjusted EBITDA of $38.9 million, a significant increase from $24.7 million in the prior-year period.
- GAAP gross margin of 34.3%, up 150 basis points versus the prior-year period.
- Adjusted earnings per diluted share of $0.39, compared with $0.35 in the prior-year period.
Segment Performance
The Material Handling segment reported net sales of $166.0 million, a 15.9% increase from $143.3 million in the prior-year period. This growth was driven by the acquisition of Signature Systems, despite lower pricing and volumes in other areas. Operating income for this segment increased by 15.6% to $28.7 million.
In contrast, the Distribution segment saw a decline in net sales to $54.3 million, a 16.7% decrease from $65.2 million in the prior-year period. Operating income for this segment also decreased to $2.2 million from $3.4 million, primarily due to lower volume and pricing.
Balance Sheet and Cash Flow
As of June 30, 2024, Myers Industries Inc had $37.3 million in cash on hand and total debt of $409.0 million. The company reported cash flow provided by operations of $14.3 million and free cash flow of $9.9 million for the second quarter of 2024.
Outlook
Despite the strong performance in the second quarter, Myers Industries Inc has lowered its full-year guidance for adjusted earnings per share to a range of $1.05 to $1.20, citing continued demand pressure in the Recreational Vehicle, Marine, and Automotive Aftermarket end markets.
Myers Industries President and CEO Mike McGaugh commented, “Our second-quarter results reflect the Company’s first full quarter with Signature Systems. This business is benefiting from worldwide investments in Infrastructure and helped drive both sequential and year-over-year revenue growth and margin expansion. Signature’s performance outpaced the demand headwinds in the Recreational Vehicle (RV), Marine, and Automotive Aftermarket end markets."
Conclusion
Myers Industries Inc's second-quarter results highlight the positive impact of the Signature Systems acquisition, which has driven revenue growth and margin expansion. However, the company faces challenges in certain end markets, leading to a cautious outlook for the remainder of the year. Investors will be keen to see how Myers Industries navigates these headwinds while continuing to leverage its strategic acquisitions and cost-saving initiatives.
Explore the complete 8-K earnings release (here) from Myers Industries Inc for further details.
