AKRON — Myers Industries Inc. reported a 6% drop in operating income for the quarter ended Sept. 30 on 13.3% lower revenue, declines attributed almost entirely to the firm's materials-handling business unit.
Myers' Distribution Unit, which includes the Myers Tire Supply and associated businesses, reported a 2% improvement in operating income to $5 million on 9.8% lower revenue of $65.3 million. As a result, the operating margin improved nearly a point to 7.6%.
Myers attributed the increase in operating income and adjusted EBITDA to an increase in prices and lower product costs and said the segment continues to implement pricing actions to counter cost inflation and improve margins.
During the period Myers' distribution segment "posted improved profitability and remains well positioned to capitalize on anticipated longer-term market tailwinds in the tire repair industry," Myers President and CEO Mike McGaugh said.
In contrast, the materials-handling segment experienced weakness in its consumer-facing verticals and a less active hurricane season year over year, McGaugh said, both of which adversely affected the segment's results.
"We are keenly focused on protecting profitability by improving our cost structures across both segments as we continue to make investments for the future," he added, noting that during the quarter the company generated elevated levels of free cash flow, which allowed it to strengthen its balance sheet and pay down debt.
Looking ahead, McGaugh said Myers continues to evaluate a number of opportunities in its targeted mergers/acquisitions pipeline and "will opportunistically deploy" capital towards attractive growth opportunities when they make strategic sense."
For the nine-month period, operating income fell 27.1% to $48.8 million on 3.6% lower sales of $622 million, yielding an operating margin of 7.8%, down two points from a year ago. Net income fell 22.4% to $36.3 million.
The distribution segment's operating income fell 14.5% to $10.6 million on 6.8% higher sales of $193.7 million.
Earlier, Myers Tire Supply launched MTS Xpress, a proprietary inventory management tool designed to help customers gain control of their inventory and lower their operating costs by connecting customers to Myers' product inventory.