Myers (MYE) Q2 Revenue Falls 5%

Myers Industries (MYE 1.43%), a manufacturer of polymer products and the largest U.S. distributor of tools, equipment, and supplies for tire and wheel service, posted its second quarter 2025 earnings on July 31, 2025. GAAP revenue was $209.6 million and adjusted non-GAAP earnings per share (EPS) of $0.31, falling short of analyst expectations of $220.6 million in GAAP revenue Both revenue (GAAP) and earnings (GAAP) were down compared to the same period in the prior year. Despite these declines and a challenging environment in Distribution and vehicle end markets, Free cash flow reached $24.7 million, a substantial increase year over year. The quarter reflected persistent demand softness in key end markets, even as cost control programs and business transformation actions contributed to operational efficiencies.

Source: Analyst estimates provided by FactSet. Management expectations based on management's guidance, as provided in Q1 2025 earnings report.

Company Overview and Strategic Focus

Myers Industries designs and manufactures a range of engineered plastic products through its core Material Handling segment, including reusable containers, bins, totes, ammunition packaging, and custom-molded plastic solutions. Its Distribution segment provides tire service equipment and supplies to automotive aftermarket customers across the U.S, including tire dealers and fleet operators.

The company's strategy centers on sustainability—making durable and recyclable plastic products—as well as ongoing market diversification. A key priority for the business is operational efficiency, achieved through cost savings and process improvements. Strategic acquisitions, such as Signature Systems in temporary event flooring and composite ground protection, continue to broaden its engineered product offerings. The company’s large and diverse customer base helps it weather fluctuations in specific markets.

Quarter Highlights and Financial Performance

The company saw both revenue (GAAP) and profit metrics (non-GAAP EPS) fall below expectations and decline from the prior year. Revenue (GAAP) declined to $209.6 million, compared to $220.2 million in Q2 2024, a drop of 4.8%. The shortfall was mostly driven by weaker sales in key end markets such as vehicle and automotive aftermarket, which continue to see demand softness due to factors like high interest rates and tariff uncertainty.

Profitability metrics also contracted. Adjusted operating income fell 20.9% to $22.8 million, while adjusted EBITDA—a measure of earnings before interest, taxes, and other expenses—was down 15.5%. Gross profit margin (GAAP) narrowed by 0.6 percentage points to 33.7%, signaling ongoing pricing and volume pressures in the company’s main businesses even as it delivered on cost reduction programs. Net income (GAAP) stood at $9.7 million, a 5.6% decrease, while adjusted EPS (earnings per share) came in at $0.31 versus $0.39 a year earlier.

Material Handling reported GAAP revenue of $158.6 million, a decrease of 4.4%. Despite the decline in sales, operating income improved by 2.7% and margins increased, supported by favorable raw material costs, a $3.2 million reversal of a prior reserve, and reduced selling, general, and administrative (SG&A) expenses. Adjusted EBITDA in this segment still declined by 8.5%, reflecting the effect of lower volumes. The Scepter product family, which includes military ammunition containers, continued to see strong demand.

Distribution generated $51.0 million in GAAP revenue—a 6.0% decline year over year. The business recorded a GAAP operating loss of $0.5 million, compared to a $2.2 million profit in Q2 2024, with margin turning negative. According to management, “Operating income and Adjusted EBITDA: Decreased due to lower pricing, partially offset by favorable SG&A.” The segment faced more significant pricing and profit margin pressure, leading to a strategic review to consider divestiture.

Operationally, the company made progress with its cost control and portfolio restructuring. Two rotational molding facilities in Ohio are being idled to improve asset utilization and are expected to deliver at least $3 million in annualized savings, as announced on July 31, 2025. $15 million in annualized cost savings was achieved through the first six months of 2025, with a goal to reach $20 million by year-end. The Board also began a formal review of the Myers Tire Supply business, which generated $189 million in revenue over the last twelve months ending June 30, 2025. The aim is to simplify the portfolio and focus on core businesses.

In capital allocation, free cash flow jumped 149% from Q2 2024, reaching $24.7 million. This was partly driven by working capital improvements and cost controls. At quarter’s end, the company had $281.0 million in liquidity, with a net leverage ratio of 2.8x—progress toward its target range of 1.5x to 2.5x. The company returned $0.5 million to shareholders via share buybacks.

Business Model Details and Recent Initiatives

As a producer of reusable, recyclable plastic products for industrial and consumer markets, Myers Industries relies on innovation and sustainability as selling points. Products such as Akro-Mils and Buckhorn storage bins and Scepter ammunition containers target diverse sectors, from defense to food and beverage handling. Recent strategic focus has been on expanding engineered product offerings—especially through integrating acquired businesses like Signature Systems—and enhancing operational efficiency in core manufacturing.

In Distribution, the company supplies wheel and under-vehicle service tools and components through an extensive logistics and sales network. This business faces competitive pricing and relies on strong customer relationships. The announced review of Myers Tire Supply signals a push to reshape the overall group toward higher-growth, higher-return opportunities and reduce exposure to lower-margin businesses.

Outlook and Guidance

For the remainder of fiscal 2025, management’s outlook by market is unchanged from earlier in the year. Industrial and infrastructure sectors—which together accounted for 43% of revenue as of Q1 2025—are expected to see moderate to strong growth. Vehicle and automotive aftermarket markets remained weak. Consumer and food & beverage end markets are projected to remain stable in 2025.

The company did not provide formal quantitative guidance for revenue or earnings for the next quarter or full year. Management pointed to “confidence in achieving year-over-year growth” in Q3 2025, based on backlog increases in the Industrial, Infrastructure, and Consumer segments. Investors should watch for updates on the Myers Tire Supply review and any resulting asset sales or business changes, as well as for ongoing progress toward the $20 million cost savings target.

Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.