Myers Industries, Inc. 2026 Q3 Earnings Call

Good morning, everyone, and welcome to Myers' third quarter 2026 earnings review. Joining me today are Aaron Schapper, President and Chief Executive Officer, and Samantha Rutty, 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 Aaron.

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 Focused 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 Focused 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 business 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 Focused 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.

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 IceShield 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 sub-segments. 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 have 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. Third, we expect new customers and products to contribute additional growth. We are focused on deepening relationships with existing customers, broadening our customer base, and commercializing new products that expand the applications we can serve. Importantly, we are also investing in the capacity needed to support this growth.

With planned expansions of 30% in 2027, 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' 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 will turn the call over to Sam for a review of our third quarter financial results.