Myers Industries Reports Mixed Q3 2024 Results, Driven by Acquisition and Segment Performance

Myers Industries, Inc. reported its financial results for the quarter and nine months ended September 30, 2024, reflecting significant changes in revenue, profitability, and strategic developments compared to the previous fiscal period.

For the third quarter of 2024, net sales increased to $205.1 million, a rise of 3.7% from $197.8 million in the same quarter of 2023. This growth was primarily driven by $20.7 million in revenue from the acquisition of Signature Systems on February 8, 2024, which was partially offset by lower sales volumes, pricing, and unfavorable currency translation. The Material Handling segment saw a notable increase in sales, reaching $150.7 million, up 13.8% from $132.5 million in Q3 2023. Conversely, the Distribution segment experienced a decline, with sales dropping to $54.4 million, down 16.8% from $65.3 million, attributed to lower volumes and pricing.

Gross profit for the quarter was $65.1 million, an increase of 4.4% from $62.4 million in the prior year, resulting in a gross margin of 31.8%, slightly up from 31.5%. However, operating income turned negative, with a loss of $4.8 million compared to a profit of $18.7 million in Q3 2023. This decline was influenced by a $22.0 million non-cash impairment charge related to goodwill in the rotational molding reporting unit, as well as increased selling, general, and administrative (SG&A) expenses, which rose to $47.7 million, largely due to costs associated with the Signature acquisition.

For the nine months ended September 30, 2024, total net sales were $632.4 million, a modest increase of 1.7% from $621.99 million in the same period of 2023. The Material Handling segment's sales increased by 9.5%, while the Distribution segment saw a 15.6% decline. Gross profit for the nine months was $204.9 million, up 1.5% from $201.9 million, with a gross margin of 32.4%.

The company’s net income for Q3 2024 was a loss of $10.9 million, compared to a profit of $12.7 million in Q3 2023. For the nine-month period, net income was $2.9 million, a significant drop from $36.3 million in the prior year. The effective tax rate for the quarter was 15.4%, down from 25.7% in the previous year, primarily due to non-deductible expenses related to the Signature acquisition.

As of September 30, 2024, Myers Industries reported total assets of $905.0 million, a substantial increase from $541.6 million at the end of 2023, largely due to the acquisition. Long-term debt surged to $367.9 million from $32.0 million, reflecting the financing of the acquisition. The company also incurred significant cash outflows for investing activities, totaling $365.5 million, primarily due to the Signature acquisition.

Overall, Myers Industries is navigating a challenging economic landscape, marked by inflation and supply chain disruptions, while strategically expanding its operations through acquisitions.