Myers Q3 Sales Rise 8.1% as Resin Costs Hit Margins

Myers Industries reported higher third-quarter sales as strong Infrastructure and Food & Beverage demand supported growth, but a sharp increase in resin costs, unfavorable product mix and unplanned maintenance weighed on profitability. Management said it anticipates significant sequential margin expansion in the fourth quarter as resin costs stabilize and pricing actions continue.

The company recorded net sales of $171.3 million for the quarter ended Sept. 30, 2026, up 8.1% from $158.5 million a year earlier. Excluding about $3 million of low-margin products eliminated after two rotational molding facilities were idled in the fourth quarter of 2025, sales increased 10.4%.

Adjusted gross profit declined 4.1% to $48.3 million, while adjusted gross margin contracted 360 basis points to 28.2%. Adjusted operating income fell 9.9% to $17.9 million, with the corresponding margin narrowing 210 basis points to 10.4%. Adjusted EBITDA decreased 8.2% to $26.6 million, representing a 15.5% margin compared with 18.3% a year earlier.

Diluted adjusted earnings per share increased to $0.32 from $0.31. On a GAAP basis, income from continuing operations was $4.7 million, or $0.13 per diluted share, compared with $6.3 million, or $0.17 per diluted share, in the prior-year quarter.

Myers said higher volumes and pricing actions partly offset the effect of resin inflation, mix and maintenance costs. Its selling, general and administrative expenses fell by 150 basis points as a percentage of sales to 16.6%, reflecting benefits from the company’s Focused Transformation program.

Infrastructure Leads End-Market Growth

Infrastructure revenue rose 38% to $40.8 million, making it the strongest-performing end market during the quarter. Food & Beverage sales increased 12% to $19.3 million. Industrial revenue was essentially unchanged at $68.4 million, while Vehicle and Consumer sales were flat at $22.7 million and $20.1 million, respectively.

For full-year 2026, Myers expects strong growth in Infrastructure, supported by utility spending and data center-related investment. The company also now expects strong growth in Food & Beverage, compared with its previous expectation for moderate growth, citing recent quoting activity, existing backlog and conversion of intermediate bulk container products. Seed-related sales are expected to be slightly positive compared with 2025.

The Consumer outlook was revised to moderate growth from stable, reflecting what Myers described as a normal level of storm response. The Vehicle outlook was changed to down from stable. The company continues to expect moderate Industrial growth. These end-market expectations exclude the effect of the low-margin product exits and facility idlings completed in late 2025.

Myers is directing investment toward reusable packaging, composite ground protection, storage and organization, and specialty containers. Its Signature Systems composite matting business is a central growth platform, serving infrastructure and stadium applications such as temporary roadways, work surfaces and turf protection.

Management estimates the matting market in the United States, Canada and the United Kingdom at about $4 billion, with wood products accounting for 81% of the current market and composite or other non-wood products representing 19%. Myers expects Signature revenue to grow at a mid-to-high-teens compound annual rate from 2026 through 2029. Planned investments include capacity additions of 30% in 2027 and another 30% in 2029, while more than four new products are expected to contribute over $60 million of incremental revenue through 2029.

Cash Flow and Capital Allocation

Myers generated $17.4 million of operating cash flow and $11.5 million of free cash flow in the third quarter after $5.9 million of capital expenditures. For the first nine months of 2026, operating cash flow reached $76.2 million and free cash flow increased 29% year over year to $61.9 million, with capital spending of $14.3 million.

Net debt declined by $28.5 million from the second quarter to $256 million, lowering the net leverage ratio to 1.86 times from 1.94 times. The company ended the quarter with $53.5 million in cash and $201.2 million available under its revolving credit facility, for total liquidity of $254.7 million.

Full-year capital expenditures are expected to be near the company’s target of 3.5% of revenue, primarily to support organic growth. Myers is targeting net leverage of 1.5 to 2.5 times, intends to maintain its dividend policy and remains open to acquisitions aligned with its growth platforms. It returned $15 million to shareholders through dividends from the beginning of 2026 through the third quarter.

The company said the divestment of MTS simplifies its portfolio and supports a greater focus on higher-return growth platforms. Its broader Focused Transformation priorities include standardizing systems and workflows, optimizing its manufacturing footprint, refining its organizational structure and concentrating investment in markets where management sees the highest returns.

Management expects stabilizing resin costs and ongoing pricing measures to support fourth-quarter margin improvement. Resin remains a significant source of uncertainty, however: the polyethylene resin index cited by Myers increased 76% from March to May 2026, and index-linked raw-material purchases generally flow through product costs after about 45 to 60 days.

Myers also identified geopolitical developments affecting energy markets, resin costs and supply as ongoing risks to revenue and margins. Other uncertainties include raw-material availability, tariffs, competitive pricing pressure, changes in customer demand, manufacturing disruptions and the execution of the company’s strategic growth initiatives.