Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes☑ No ☐ .

Indicate by check mark whether the registrant has submitted electronically ~~and posted on its corporate Web site, if any,~~ every Interactive Data File required to be submitted ~~and posted~~ pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit ~~and post~~ such files). Yes☑ No ☐

Indicate by check mark whether the ~~Registrant~~registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. ~~(Check one):~~

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑ .

The number of shares outstanding of ~~each of~~ the issuer’s ~~classes of~~ common stock, without par value, as of ~~the latest practicable date.~~October 27, 2023 was 36,838,466 shares.

Condensed Consolidated Statements of ~~Financial Position~~Shareholders’ Equity (Unaudited)

Condensed Consolidated ~~Statement~~Statements of Shareholders’ Equity (Unaudited)

1. Summary of Significant Accounting Policies

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements include the accounts of Myers Industries, Inc. and all wholly owned subsidiaries (collectively, the “Company”), and have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with ~~U.S.~~accounting principles generally accepted ~~accounting principles~~in the United States (“GAAP”) have been condensed or omitted pursuant to those rules and regulations, although the Company believes that the disclosures are adequate to make the information not misleading. These interim financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s annual report on Form 10-K for the year ended December 31, ~~2016.~~2022.

~~Certain reclassifications have been made to prior year’s reported amounts in order to conform to the current year presentation.~~

In the opinion of the Company, the accompanying condensed consolidated financial statements contain all adjustments (consisting of normal recurring accruals) necessary to present fairly the financial position as of September 30, ~~2017,~~2023, and the results of operations and cash flows for the periods presented. The results of operations for the ~~three~~quarter and nine months ended September 30, ~~2017~~2023 are not necessarily indicative of the results of operations that will occur for the year ending December 31, ~~2017.~~2023.

~~Accounting Standards Adopted~~

~~In March 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-09,~~ ~~Compensation - Stock Compensation - Improvements to Employee Share-Based Payment Accounting~~, which involves several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. Under the new standard, income tax benefits and deficiencies are to be recognized as income tax expense or benefit in the income statement and the tax effects of exercised or vested awards should be treated as discrete items in the reporting period in which they occur. An entity should also recognize excess tax benefits regardless of whether the benefit reduces taxes payable in the current period. Excess tax benefits should be classified along with other income tax cash flows as an operating activity. In regards to forfeitures, the entity may make an entity-wide accounting policy election to either estimate the number of awards that are expected to vest or account for forfeitures when they occur. The Company adopted this ASU effective January 1, 2017 and elected to recognize forfeitures as they occur. The cash flow classification requirements of ASU 2016-09 were applied prospectively. The adoption of this ASU did not have a material impact on the Company’s results of operations, cash flows or financial position.

~~Accounting Standards Not Yet Adopted~~

~~In March 2017, the FASB issued ASU 2017-07,~~ ~~Compensation – Retirement Benefits (Topic 715) – Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost.~~ This ASU requires that an employer report the service cost component in the same line item(s) as other compensation costs arising from services rendered by the pertinent employees during the period. The other components of net benefit cost are required to be presented in the income statement separately from the service cost component and outside a subtotal of income from operations, if one is presented. The ASU also allows only the service cost component to be eligible for capitalization when applicable. The ASU is effective for annual periods beginning after December 15, 2017, and interim periods within those annual periods. The ASU should be applied retrospectively for the presentation of the service cost component and the other components of net periodic pension cost and net periodic postretirement benefit cost in the income statement and prospectively, on and after the effective date, for the capitalization of the service cost component of net periodic pension cost and net periodic postretirement benefit in assets. The Company does not anticipate that adoption of this standard will have a material impact on its consolidated financial statements as the pension plan is frozen.

~~In January 2017, the FASB issued ASU 2017-04,~~ ~~Intangibles - Goodwill and Other (Topic 350)~~ - ~~Simplifying the Test for Goodwill Impairment.~~ This ASU eliminates Step 2 of the goodwill impairment test and requires goodwill impairment to be measured as the amount by which a reporting unit’s carrying amount exceeds its fair value, not to exceed the carrying amount of its goodwill. The ASU is effective for annual or any interim goodwill impairment tests in fiscal years beginning after December 15, 2019. The guidance allows for early adoption for impairment testing dates after January 1, 2017. While the Company has elected not to early adopt this guidance for fiscal year 2017 and will continue to evaluate the timing of adoption, it does not believe that the adoption of this guidance will have a material impact on its consolidated financial statements.

~~MYERS INDUSTRIES, INC. AND SUBSIDIARIES~~

~~Notes to Unaudited Condensed Consolidated Financial Statements – (Continued)~~

~~(Dollar amounts in thousands, except where otherwise indicated)~~

~~In November 2016, the FASB issued ASU 2016-18,~~ ~~Statement of Cash Flows (Topic 230)~~ - ~~Restricted Cash~~. This ASU requires that companies include amounts generally described as restricted cash and restricted cash equivalents, along with cash and cash equivalents, when reconciling the beginning-of-period and end-of-period amounts shown on the statement of cash flows. The ASU should be applied using a retrospective transition method to each period presented and is effective for annual reporting periods beginning after December 15, 2017 and interim periods within those annual periods. ~~To the extent there are changes in the Company’s restricted cash balances, adoption of this standard will impact the statement of cash flows.~~

~~In October 2016, the FASB issued ASU 2016-16,~~ ~~Accounting for Income Taxes: Intra-Entity Transfers of Assets Other Than Inventory (Topic 740)~~. This ASU requires immediate recognition of the income tax consequences of intercompany asset transfers other than inventory. The ASU is effective for annual reporting periods beginning after December 15, 2017 and interim periods within ~~those annual periods. The Company does not anticipate that adoption of this standard will have a material impact on its consolidated financial statements.~~

~~In August 2016, the FASB issued ASU 2016-15,~~ ~~Statement of Cash Flows – Classification of Certain Cash Receipts and Cash Payments~~, which clarifies how entities should classify certain cash receipts and cash payments on the statement of cash flows. The new guidance also clarifies how the predominance principle should be applied when cash receipts and cash payments have aspects of more than one class of cash flows. This ASU is effective for fiscal years beginning after December 15, 2017, including interim periods within that reporting period, with early adoption permitted. The Company does not anticipate that adoption of this standard will have a significant impact on its consolidated financial statements.

~~In June 2016, the FASB issued ASU 2016-13,~~ ~~Financial Instruments – Credit Losses: Measurement of Credit Losses on Financial Instruments~~, which introduces new guidance for the accounting for credit losses on instruments. The new guidance introduces an approach based on expected losses to estimate credit losses on certain types of financial instruments. This ASU is effective for fiscal years beginning after December 15, 2019 including interim periods within that reporting period, with early adoption permitted for fiscal years beginning after December 15, 2018. The Company is currently evaluating the impact the adoption of this standard will have on its consolidated financial statements.

~~In February 2016, the FASB issued ASU 2016-02,~~ ~~Leases (Topic 842)~~. Under ASU 2016-02, an entity will be required to recognize right-of-use assets and lease liabilities on its balance sheet and disclose key information about leasing arrangements. ASU 2016-02 offers specific accounting guidance for a lessee, a lessor and sale and leaseback transactions. Lessees and lessors are required to disclose qualitative and quantitative information about leasing arrangements to enable a user of the financial statements to assess the amount, timing and uncertainty of cash flows arising from leases. The new standard is effective for the Company beginning January 1, 2019 and requires a modified retrospective approach. The Company is currently evaluating the impact the adoption of this standard will have on its consolidated financial statements.

~~In May 2014, the FASB issued ASU 2014-09,~~ ~~Revenue from Contracts with Customers~~, to clarify the principles used to recognize revenue for all entities. Under ASU 2014-09, an entity will recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which a company expects to be entitled in exchange for those goods or services. Additional disclosures will also be required to help users of financial statements understand the nature, amount, and timing of revenue and cash flows arising from contracts. The new guidance is effective January 1, 2018, with early adoption permitted for January 1, 2017. Entities have the option to apply the new guidance under a retrospective approach to each prior reporting period presented, or a modified retrospective approach with the cumulative effect of initially applying the new guidance recognized at the date of initial application within the Consolidated Statements of Shareholders’ Equity. The Company plans to adopt the new guidance effective January 1, 2018 under the modified retrospective approach and has developed an implementation plan. As part of this plan, the Company has identified its revenue streams and substantially completed its contract review for each of these revenue streams to assess the impact of the new guidance on its consolidated financial statements. This assessment included the potential impact of whether revenue from certain product lines would be required to be recognized over time rather than at a point in time. Based on the reviews completed to date, the Company does not currently anticipate any material changes to the timing of revenue recognition from point in time, and will continue to evaluate this contract review through the date of adoption. The Company is currently designing and implementing changes to processes and controls, where necessary, to address the requirements of the new standard upon adoption. In addition, the Company is assessing what incremental disaggregated revenue disclosures will be required in the consolidated financial statements.

~~MYERS INDUSTRIES, INC. AND SUBSIDIARIES~~

~~Notes to Unaudited Condensed Consolidated Financial Statements – (Continued)~~

~~(Dollar amounts in thousands, except where otherwise indicated)~~

~~Translation of Foreign Currencies~~

All asset and liability accounts of consolidated foreign subsidiaries are translated at the current exchange rate as of the end of the accounting period and income statement items are translated monthly at an average currency exchange rate for the period. The resulting translation adjustment is recorded in other comprehensive income (loss) as a separate component of shareholders' equity.

Fair Value Measurement

The Company follows guidance included in ~~the Accounting Standards Codification (“ASC”)~~ASC 820, Fair Value Measurements and Disclosures, for its financial assets and liabilities, as required. The guidance established a common definition for fair value to be applied under U.S. GAAP requiring the use of fair value, established a framework for measuring fair value, and expanded disclosure requirements about such fair value measurements. The guidance did not require any new fair value measurements, but rather applied to all other accounting pronouncements that require or permit fair value measurements. Under ASC 820, the hierarchy that prioritizes the inputs to valuation techniques used to measure fair value is divided into three levels:

~~Level 1:~~

~~Unadjusted quoted prices in active markets for identical assets or liabilities.~~

~~Level 2:~~

Unadjusted quoted prices in active markets for similar assets or liabilities, unadjusted quoted prices for identical or similar assets or liabilities in markets that are not active or inputs that are observable either directly or indirectly.

~~Level 3:~~

~~Unobservable inputs for which there is little or no market data or which reflect the entity’s own assumptions.~~

Level 1: Unadjusted quoted prices in active markets for identical assets or liabilities.

Level 2: Unadjusted quoted prices in active markets for similar assets or liabilities, unadjusted quoted prices for identical or similar assets or liabilities in markets that are not active or inputs that are observable either directly or indirectly.

Level 3: Unobservable inputs for which there is little or no market data or which reflect the entity’s own assumptions.

The Company has financial instruments, including cash, accounts receivable, accounts payable and accrued expenses. The fair value of these financial instruments ~~approximate~~approximates carrying value due to the nature and relative short maturity of these assets and liabilities.

The fair value of debt under the Company’s Loan Agreement, as defined in Note 11, approximates carrying value due to the floating rates and relative short maturity (less than 90 days) of ~~the~~any revolving borrowings under this agreement. The fair value of the Company’s fixed rate senior unsecured notes was estimated using market observable inputs for the Company’s comparable peers with public debt, including quoted prices in active markets and interest rate measurements which are considered Level 2 inputs. At September 30, ~~2017~~2023 and December 31, ~~2016,~~2022, the aggregate fair value of the Company's ~~$100.0 million~~outstanding fixed rate senior unsecured notes was estimated ~~at $101.0~~to be $37.5 million and ~~$98.0~~$37.4 million, respectively.

~~Factoring~~

The ~~Company's wholly-owned subsidiaries Plasticos Novel Do Nordeste S.A. and Plasticos Novel Do Parana S.A. (collectively, "Novel") entered into a factoring agreement to sell, without recourse, certain~~purchase price allocations associated with the May 31, 2022 acquisition of ~~their Brazilian Real-based trade accounts receivables to unrelated third party financial institutions~~Mohawk Rubber Sales of New England Inc. ("Mohawk"), as ~~part of its working capital management.~~described in Note 3, required fair value measurements using unobservable inputs which are considered Level 3 inputs. The sale of these receivables accelerated the collection of cash and reduced credit exposure. Under the terms of the factoring agreements, the Company retains no rights or interest and has no obligations with respect to the sold receivables. As such, the factoring of trade receivables under these agreements are accounted for as a sale. The Company accounts for its trade receivable factoring program as required under ASC 860, ~~Transfers and Servicing~~. During the nine months ended September 30, 2017, approximately $1.3 million of trade accounts receivables had been sold under the terms of the factoring agreement for cash proceeds of $1.2 million. During the nine months ended September 30, 2016, approximately $0.9 million of trade accounts receivables had been sold under the terms of the factoring agreement for cash proceeds of $0.8 million. The receivables sold pursuant to the factoring agreements have been recorded as a reduction of trade accounts receivable and as cash provided by operating activities in the accompanying Condensed Consolidated Statements of Cash Flows (Unaudited). The Company pays an administrative fee based on the dollarfair value of the receivables sold. Administrative fees related to the program for both the nine months ended September 30, 2017 and 2016 were approximately $0.1 million. These fees are included in Selling, General and Administrative expenses in the accompanying Condensed Consolidated Statements of Operations (Unaudited).acquired intangible assets was determined using an income approach.

~~Revenue Recognition~~

The Company recognizes revenues from the sale of products, net of actual and estimated returns, at the point of passage of title and risk of loss, which is generally at time of shipment, and collectability of the fixed or determinable sales price is reasonably assured.

~~MYERS INDUSTRIES, INC. AND SUBSIDIARIES~~

~~Notes to Unaudited Condensed Consolidated Financial Statements – (Continued)~~

~~(Dollar amounts in thousands, except where otherwise indicated)~~

Accumulated Other Comprehensive Income (Loss)

Changes in accumulated other comprehensive income (loss) are as follows:


	Foreign Currency			Defined Benefit Pension Plans			Total
Balance at July 1, 2023	$	(15,603	)	$	(1,383	)	$	(16,986	)
Other comprehensive income (loss) before reclassifications		(948	)		—			(948	)
Net current-period other comprehensive income (loss)		(948	)		—			(948	)
Balance at September 30, 2023	$	(16,551	)	$	(1,383	)	$	(17,934	)

Foreign
Currency

Defined Benefit
Pension Plans

Total

Balance at January 1, 2017

$
(32,342
)

$
(1,832
)

$
(34,174
)
Other comprehensive income before reclassifications

3,491

—

3,491

Net current-period other comprehensive income

3,491

—

3,491

Balance at September 30, 2017

$
(28,851
)

$
(1,832
)

$
(30,683
)

MYERS INDUSTRIES, INC. AND SUBSIDIARIES

~~Cash and Cash Equivalents~~Notes to Unaudited Condensed Consolidated Financial Statements – (Continued)

The Company considers all highly liquid instruments purchased with a maturity of three months or less to be cash equivalents. Cash equivalents are stated at cost, which approximates market value. The Company maintains operating cash and reserves(Dollars in thousands, except where otherwise indicated)


	Foreign Currency			Defined Benefit Pension Plans			Total
Balance at July 1, 2022	$	(14,544	)	$	(1,466	)	$	(16,010	)
Other comprehensive income (loss) before reclassifications		(2,376	)		—			(2,376	)
Net current-period other comprehensive income (loss)		(2,376	)		—			(2,376	)
Balance at September 30, 2022	$	(16,920	)	$	(1,466	)	$	(18,386	)


	Foreign Currency			Defined Benefit Pension Plans			Total
Balance at January 1, 2023	$	(16,410	)	$	(1,383	)	$	(17,793	)
Other comprehensive income (loss) before reclassifications		(141	)		—			(141	)
Net current-period other comprehensive income (loss)		(141	)		—			(141	)
Balance at September 30, 2023	$	(16,551	)	$	(1,383	)	$	(17,934	)


	Foreign Currency			Defined Benefit Pension Plans			Total
Balance at January 1, 2022	$	(13,935	)	$	(1,466	)	$	(15,401	)
Other comprehensive income (loss) before reclassifications		(2,985	)		—			(2,985	)
Net current-period other comprehensive income (loss)		(2,985	)		—			(2,985	)
Balance at September 30, 2022	$	(16,920	)	$	(1,466	)	$	(18,386	)

Allowance for ~~replacement balances in financial institutions which, from time to time, may exceed federally insured limits.~~Credit Losses

Management has established certain requirements that customers must meet before credit is extended. The ~~Company periodically assesses the~~ financial condition of ~~these institutions~~customers is continually monitored and ~~believes that~~collateral is usually not required. The Company evaluates the ~~risk~~collectability of accounts receivable based on a combination of factors. The Company reviews historical trends for credit loss as well as current economic conditions in determining an estimate for its allowance for credit losses. Additionally, in circumstances where the Company is ~~minimal.~~aware of a specific customer’s inability to meet its financial obligations, a specific allowance for credit losses is recorded against amounts due to reduce the net recognized receivable to the amount the Company reasonably expects will be collected.

The changes in the allowance for credit losses for the nine months ended September 30, 2023 and 2022 were as follows:


	2023			2022
Balance at January 1	$	2,273		$	2,173
Provision for expected credit loss, net of recoveries		1,224			218
Write-offs and other		(739	)		(469	)
Balance at September 30	$	2,758		$	1,922

2. ~~Impairment Charges~~Revenue Recognition

The Company’s revenue by major market is as follows:

~~During~~


	For the Quarter Ended September 30, 2023
	Material Handling		Distribution		Inter-company			Consolidated
Consumer	$	21,740	$	—	$	—		$	21,740
Vehicle		29,770		—		—			29,770
Food and beverage		26,770		—		—			26,770
Industrial		54,204		—		(21	)		54,183
Auto aftermarket		—		65,335		—			65,335
Total net sales	$	132,484	$	65,335	$	(21	)	$	197,798

MYERS INDUSTRIES, INC. AND SUBSIDIARIES

Notes to Unaudited Condensed Consolidated Financial Statements – (Continued)

(Dollars in thousands, except where otherwise indicated)


	For the Quarter Ended September 30, 2022
	Material Handling		Distribution		Inter-company			Consolidated
Consumer	$	24,476	$	—	$	—		$	24,476
Vehicle		38,158		—		—			38,158
Food and beverage		31,126		—		—			31,126
Industrial		61,898		—		(9	)		61,889
Auto aftermarket		—		72,416		—			72,416
Total net sales	$	155,658	$	72,416	$	(9	)	$	228,065


	For the Nine Months Ended September 30, 2023
	Material Handling		Distribution		Inter-company			Consolidated
Consumer	$	75,900	$	—	$	—		$	75,900
Vehicle		97,983		—		—			97,983
Food and beverage		86,915		—		—			86,915
Industrial		167,543		—		(44	)		167,499
Auto aftermarket		—		193,693		—			193,693
Total net sales	$	428,341	$	193,693	$	(44	)	$	621,990


	For the Nine Months Ended September 30, 2022
	Material Handling		Distribution		Inter-company			Consolidated
Consumer	$	90,989	$	—	$	—		$	90,989
Vehicle		134,036		—		—			134,036
Food and beverage		88,960		—		—			88,960
Industrial		191,399		—		(29	)		191,370
Auto aftermarket		—		181,352		—			181,352
Total net sales	$	505,384	$	181,352	$	(29	)	$	686,707

Revenue is recognized when obligations under the ~~second quarter~~terms of ~~2017, an underutilized building~~a contract with customers are satisfied. In both the Distribution and Material Handling segments, this generally occurs with the transfer of control of the products. This transfer of control may occur at either the time of shipment from a Company facility, or at the time of delivery to a designated customer location. Obligations under contracts with customers are typically fulfilled within 90 days of receiving a purchase order from a customer, and generally no other future obligations are required to be performed. The Company generally does not enter into any long-term contracts with customers greater than one year. Based on the nature of the Company’s ~~Scarborough, Ontario, Canada location,~~products and customer contracts, no deferred revenue has been recorded, with the exception of cash advances or deposits received from customers prior to transfer of control of the product. These advances are typically fulfilled within the 90-day time frame mentioned above.

Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring the products. Certain contracts with customers include variable consideration, such as rebates or discounts. The Company recognizes estimates of this variable consideration each period, primarily based on the most likely level of consideration to be paid to the customer under the specific terms of the underlying programs. While the Company’s contracts with customers do not generally include explicit rights to return product, the Company will in practice allow returns in the ~~Material Handling Segment, was identified for closure~~normal course of business and ~~classified~~ as ~~held for sale as~~part of ~~June 30, 2017, in Other Assets~~the customer relationship. Expected returns allowances are recognized each period based on an analysis of historical experience, and when physical recovery of the product from returns occurs, an estimated right to return asset is also recorded based on the approximate cost of the product.

Amounts included in the Condensed Consolidated Statements of Financial Position (Unaudited). This building has been recorded at its fair value, less estimated costs to sell, of $3.2 million (based primarily on a third party offer considered to be a Level 2 input), which resulted in an impairment charge of approximately $0.5 million recognized in the second quarter of 2017. No changes in the estimated fair value were recorded in the quarter ended September 30, 2017.

During the first quarter of 2016, the Company reviewed its long-lived assets, intangible assets and goodwill at Plasticos Novel do Nordeste S.A. (“Novel”), a reporting unit within the Material Handling Segment for impairment. The testing for impairment was performed as a result of the presence of impairment indictors resulting from the communication of a reduction in capital spending in the near-term from a significant customer in March 2016, which resulted in a significant reduction in Novel’s forecasted revenue and income.

~~The Company first conducted a review for impairment of indefinite-lived intangibles and other long-lived assets~~ related to Novel, including amortizable intangible assets and fixed assets which indicated that the carrying amounts of such assets may not be recoverable and required an assessment of fair value of the assets for purposes of measuring an impairment charge. The estimated fair value of indefinite-lived intangibles was determined using a relief from royalty payments income approach and the other long-lived assets was determined, in part, using an analysis of projected cash flows, a market approach and a cost approach. These valuation methods use Level 3 inputs under the fair value hierarchy discussed in Note 1.revenue recognition include:

To test for potential impairment for goodwill, the Company performed an interim impairment test as of March 31, 2016. The step one goodwill impairment test was performed using a discounted cash flow (“DCF”) valuation model. The significant assumptions in the DCF model are the annual revenue growth rate, the annual operating income margin and the discount rate used to determine the present value of the cash flow projections. The discount rate was based on the estimated weighted average cost of capital as of the testing date for market participants in the industry in which the Novel reporting unit operates. Based on the estimated fair value generated by the DCF model, the Novel reporting unit’s fair value did not exceed its carrying value as of March 31, 2016 and therefore a step two analysis was required to be performed. The decline in fair value of the reporting unit resulted primarily from lower projected operating results and cash flows than those utilized from the 2015 annual impairment test, directly related to the triggering event outlined above. During the first quarter of 2016, a step two analysis was performed to allocate estimated fair value to assets and liabilities in order to estimate an implied value of goodwill. As a result of these impairment reviews, the Company concluded that the goodwill, intangibles and other long-lived assets related to Novel were impaired and recorded a non-cash impairment charge of $8.5 million, which was reported in Impairment Charges in the Condensed Consolidated Statements of Operations (Unaudited) in the first half of 2016.

109

MYERS INDUSTRIES, INC. AND SUBSIDIARIES

Notes to Unaudited Condensed Consolidated Financial Statements – (Continued)

(~~Dollar amounts~~Dollars in thousands, except where otherwise indicated)

~~During~~


	September 30,			December 31,			Statement of Financial Position
	2023			2022			Classification
Returns, discounts and other allowances	$	(1,138	)	$	(986	)	Accounts receivable
Right of return asset	$	386		$	350		Inventories, net
Customer deposits	$	(4,013	)	$	(5,896	)	Other current liabilities
Accrued rebates	$	(4,093	)	$	(4,711	)	Other current liabilities

Sales, value added, and other taxes collected with revenue from customers are excluded from net sales. The cost for shipments to customers is recognized when control over products has transferred to the ~~second quarter~~customer and is classified as Selling, General and Administrative expenses for the Company’s manufacturing business and as Cost of ~~2016,~~sales for the ~~Company recorded impairment charges of $1.3~~Company’s distribution business. Costs for shipments to customers in Selling, General and Administrative expenses were approximately $3.0 million ~~primarily related to long-lived assets associated with~~and $2.9 million for the ~~exit of a non-strategic product line in the Material Handling Segment.~~

~~3. Discontinued Operations~~

On February 17, 2015, the Company sold its Lawn and Garden business to an entity controlled by Wingate Partners V, L.P., a private equity firm, for $110.0 million, subject to a working capital adjustment. The terms of the agreement include a $90.0 million cash payment, promissory notes totaling $20.0 million that mature in August 2020 with a 6% interest rate, and approximately $8.6 million placed in escrow that was due to be settled by August 2016, but has been extended until indemnification claims are resolved, as described in Note 10. The fair market value of the notes at the date of the sale was $17.8 million. The carrying value of the notes as ofquarters ended September 30, ~~2017 was $18.6~~2023 and 2022, respectively, and $8.6 million ~~which represents~~and $10.1 million for the fair value at the date of sale plus accretion and is included in Notes Receivable in the accompanying Condensed Consolidated Statements of Financial Position (Unaudited). The fair value of the notes receivable was calculated using Level 2 inputs as defined in Note 1. The final working capital adjustment resulted in a cash payment to the buyer of approximately $4.0 million in the first half of 2016.

~~4. Restructuring~~

On March 9, 2017, the Company announced a restructuring plan (the “Plan”) to improve the Company’s organizational structure and operational efficiency within the Material Handling Segment, which related primarily to anticipated facility shutdowns and associated activities. Total restructuring costs expected to be incurred are approximately $7.9 million, which includes employee severance and other employee-related costs of approximately $3.2 million, $2.6 million related to equipment relocation and facility shut down costs and non-cash charges, primarily accelerated depreciation charges on property, plant and equipment, of approximately $2.1 million. The Company expects to incur approximately $0.8 million during the remainder of 2017 under the Plan, as all remaining actions under the Plan are expected to be substantially completed by the end of the year.

~~During the three and~~ nine months ended September 30, ~~2017, the Company incurred restructuring charges~~2023 and 2022, respectively, and in Cost of ~~$1.0~~sales were approximately $2.7 million and $5.2 million, respectively, related to closing a manufacturing plant in Bluffton, Indiana. In the third quarter of 2017, the Bluffton facility and certain related equipment, previously classified as held for sale, were sold for approximately $6.0 million, which resulted in a gain of $2.6 million. Additional gains of $0.2 million and $1.5$3.1 million for the ~~three~~quarters ended September 30, 2023 and 2022, respectively, and $9.9 million and $7.0 million for the nine months ended September 30, ~~2017, respectively,~~2023 and 2022, respectively.

Based on the short-term nature of contracts described above, contract acquisition costs are not significant. These costs, as well as other incidental items that are immaterial in the context of the contract, are recognized as expense as incurred.

3. Acquisitions

Mohawk

On May 31, 2022, the Company acquired the assets of Mohawk, a leading auto aftermarket distributor, which is included in the Distribution Segment. The Mohawk acquisition aligns with the Company's long-term objective to optimize and grow its Distribution business. Cash consideration was $27.8 million, net of $1.1 million of cash acquired. Total cash consideration also includes a $3.5 million working capital adjustment, of which $3.3 million was settled in November 2022 and $0.2 million was settled in February 2023. The Company funded the acquisition with proceeds from the Loan Agreement described in Note 11.

The acquisition of Mohawk was accounted for using the acquisition method, whereby all of the assets acquired and liabilities assumed were recognized at their fair value on ~~other asset dispositions in connection~~the acquisition date, with ~~closing this plant.~~

Inany excess of the ~~second quarter~~purchase price over the estimated fair value recorded as goodwill. The following table summarizes the allocation of ~~2017,~~ the ~~Company finalized~~purchase price based on the ~~specific actions to be taken under the Plan to reduce headcount in its Scarborough, Ontario, Canada location. These actions resulted in the recognition~~estimated fair value of ~~$0.9 million~~assets acquired and ~~$1.6 million of severance and related costs for the three and nine months ended September 30, 2017, respectively.~~

During the three and nine months ended September 30, 2017, the Company recognized $0.2 million and $0.3 million of restructuring charges related to the planned closure of a manufacturing plant in Sandusky, Ohio.

~~The restructuring charges noted above are presented in the Condensed Consolidated Statement of Operations (Unaudited) as follows:~~liabilities assumed, including measurement period adjustments.

For the Three Months Ended September 30, 2017

For the Nine Months Ended September 30, 2017

Cost of sales

$
1,908

$
6,968

Selling, general and administrative expenses

164

164

$
2,072

$
7,132


	Initial Allocation of Consideration		Measurement Period Adjustments(1)			Final Allocation
Assets acquired:
Accounts receivable	$	10,137	$	458		$	10,595
Inventories		8,209		(16	)		8,193
Prepaid expenses		104		—			104
Other assets - long term		30		—			30
Property, plant and equipment		1,432		(261	)		1,171
Right of use asset - operating leases		1,367		—			1,367
Intangible assets		7,720		90			7,810
Goodwill		7,485		(403	)		7,082
Assets acquired	$	36,484	$	(132	)	$	36,352

Liabilities assumed:
Accounts payable	$	5,996	$	(191	)	$	5,805
Accrued expenses		1,414		(70	)		1,344
Operating lease liability - short term		399		—			399
Operating lease liability - long term		968		—			968
Total liabilities assumed		8,777		(261	)		8,516

Net acquisition cost	$	27,707	$	129		$	27,836

(1) The Company's preliminary purchase price allocation changed due to additional information and further analysis.

1110

MYERS INDUSTRIES, INC. AND SUBSIDIARIES

Notes to Unaudited Condensed Consolidated Financial Statements – (Continued)

(~~Dollar amounts~~Dollars in thousands, except where otherwise indicated)

The ~~table below summarizes~~goodwill represents the future economic benefits arising from other assets acquired that could not be individually and separately recognized, and the Company expects that the goodwill recognized for the acquisition will be deductible for tax purposes.

The intangible assets included above consist of the following:


	Fair Value		Weighted Average Estimated Useful Life
Customer relationships	$	5,500	12.0 years
Trade name		2,000	5.0 years
Non-competition agreements		310	5.0 years
Total amortizable intangible assets	$	7,810

4. Restructuring

Ameri-Kart Plan

In March 2019, the Company committed to implementing a restructuring ~~activity~~plan involving its Ameri-Kart Corp. subsidiary (“Ameri-Kart”), a rotational molding business within the Material Handling Segment. The Company is consolidating certain manufacturing operations into a new facility in Bristol, Indiana (the “Ameri-Kart Plan”). In December 2019, as amended in March 2021, Ameri-Kart entered into a lease agreement for a newly constructed manufacturing and distribution facility in Bristol, Indiana. The building became substantially complete in March 2021 as defined in the lease agreement, and the 15-year finance lease of the new Bristol facility commenced. In connection with the lease agreement, Ameri-Kart agreed to sell its original Bristol facility and lease it back for a period of 5 years. During the second quarter of 2021, the sale of the original facility for net proceeds of $2.8 million was completed, which resulted in a gain of $1.0 million, and the lease back commenced. The new Bristol facility is in service and the original facility has been closed. Remaining costs to complete this consolidation are expected to be approximately $2.5 million, including approximately $0.3 million in 2023 related to remaining equipment moves and $2.2 million to be incurred through 2026 related to remaining lease and maintenance costs for the idled facility.

The Company incurred $0.2 million and $0.7 million of restructuring charges related to the initiatives discussed above during the quarter and nine months ended September 30, 2023, respectively, and $0.3 million and $0.7 million of restructuring charges during the quarter and nine months ended September 30, 2022, respectively, which were recorded withinboth Cost of sales and Selling, General and Administrative. The Company also incurred $0.3 million related to loss on disposal of fixed assets during the nine months ended September 30, ~~2017:~~2022. Accrued and unpaid restructuring expenses were not significant at September 30, 2023 or December 31, 2022.

Employee Reduction

Accelerated Depreciation

Other Exit Costs

Total

Balance at January 1, 2017

$
—

$
—

$
—

$
—

Charges to expense

2,868

2,018

2,246

7,132

Cash payments

(773
)

—

(1,929
)

(2,702
)
Non-cash utilization

—

(2,018
)

—

(2,018
)
Balance at September 30, 2017

$
2,095

$
—

$
317

$
2,412

Other Initiatives

~~In addition~~Severance charges from other restructuring initiatives to reduce and streamline overhead costs during the ~~restructuring costs noted above, the Company has also incurred other associated costs of the Plan of $0.3 million and $1.0 million for the three~~quarter and nine months ended September 30, ~~2017,~~2023 totaled $1.1 million and $1.5 million, respectively which ~~are included in~~ were recorded within Selling, General and ~~Administrative expenses in the accompanying Condensed Consolidated Statements of Operations (Unaudited),~~Administrative. Accrued and ~~are primarily related to third party consulting costs. Additional estimated~~unpaid costs ~~of $0.2~~for these initiatives totaled $0.2 million at September 30, 2023 and remaining costs associated with these other restructuring initiatives are expected to be ~~incurred throughout the remainder of 2017.~~approximately $0.1 million, related primarily to employee severance.

5. Inventories

Inventories are valued at the lower of cost or market for last-in, first-out (“LIFO”) inventory and lower of cost or net realizable value for first-in, first-out (“FIFO”) inventory. Approximately 4035 percent of ~~our~~ inventories are valued using the LIFO method of determining cost. All other inventories are valued atusing the FIFO method of determining cost. An actual valuation of inventory under the LIFO method can be made only at the end of each year based on inventory levels and costs at that time. Accordingly, interim LIFO calculations must ~~necessarily~~ be based on management’s estimates of expected year-end inventory levels and costs. Because these ~~are based on estimates, interim results~~calculations are subject to ~~change in~~many factors beyond management’s control, annual results may differ from interim results as they are subject to the final year-end LIFO inventory valuation. InNo adjustment to the ~~current~~LIFO reserve was recorded for the quarter ~~one inventory pool had an increase in commodity costs that is expected to hold through year-end, and therefore,~~ended September 30, 2023. During 2022, the Company incurred an adjustment of ~~$0.4~~$1.1 million ~~was made~~ to increase the LIFO reserve and cost of sales for the ~~three~~quarter and nine months ended September 30, ~~2017. No adjustment was recorded during prior interim reporting periods as interim results in those periods were immaterial.~~2022.

MYERS INDUSTRIES, INC. AND SUBSIDIARIES

Notes to Unaudited Condensed Consolidated Financial Statements – (Continued)

(Dollars in thousands, except where otherwise indicated)

Inventories consisted of the following:


	September 30,		December 31,
	2023		2022
Finished and in-process products	$	57,194	$	54,991
Raw materials and supplies		39,036		38,360
	$	96,230	$	93,351

6. Other ~~Current~~ Liabilities

The balance in ~~other current liabilities~~Other Current Liabilities is comprised of the following:


	September 30,		December 31,
	2023		2022
Customer deposits and accrued rebates	$	8,106	$	10,607
Dividends payable		5,828		5,722
Accrued litigation, claims and professional fees		656		596
Current portion of environmental reserves		8,005		3,284
Other accrued expenses		6,543		6,171
	$	29,138	$	26,380

September 30,

December 31,

2017

2016

Deposits and amounts due to customers

$
4,048

$
2,688

Dividends payable

4,455

4,260

Accrued litigation and professional fees

606

452

Current portion of environmental reserves

1,022

605

Other accrued expenses

4,362

5,078

$
14,493

$
13,083

The balance in Other Liabilities (long-term) is comprised of the following:


	September 30,		December 31,
	2023		2022
Environmental reserves	$	7,581	$	13,078
Supplemental executive retirement plan liability		618		824
Pension liability		253		184
Other long-term liabilities		1,832		1,184
	$	10,284	$	15,270

7. Goodwill and Intangible Assets

The change in goodwill for the nine months ended September 30, ~~2017~~2023 was as follows:

Distribution

Material
Handling

Total

January 1, 2017

$
505

$
58,714

$
59,219

Foreign currency translation

—

829

829

September 30, 2017

$
505

$
59,543

$
60,048


	Distribution		Material Handling			Total
January 1, 2023	$	14,730	$	80,427		$	95,157
Foreign currency translation		—		(28	)		(28	)
September 30, 2023	$	14,730	$	80,399		$	95,129

Intangible assets other than goodwill primarily consist of trade names, customer relationships, patents, non-competition agreements and technology assets established in connection with acquisitions. These intangible assets, other than certain trade names, are amortized over their estimated useful lives. Indefinite-lived trade names had a carrying value of $9.8 million at both September 30, 2023 and December 31, 2022. Refer to Note 3 for the intangible assets acquired through the Mohawk acquisition in May 2022.

MYERS INDUSTRIES, INC. AND SUBSIDIARIES

Notes to Unaudited Condensed Consolidated Financial Statements – (Continued)

(~~Dollar amounts~~Dollars in thousands, except where otherwise indicated)

~~useful lives. The Company has indefinite-lived trade names which had a carrying value of $10.9 million at both September 30, 2017 and December 31, 2016.~~

~~See Note 2 for discussion of goodwill, trade names and other long-lived asset impairment charges in the first half of 2016.~~

8. Net Income ~~(Loss)~~ per Common Share

Net income ~~(loss)~~ per common share, as shown on the accompanying Condensed Consolidated Statements of Operations (Unaudited), is determined on the basis of the weighted average number of common shares outstanding during the periods as follows:


	For the Three Months Ended September 30,				For the Nine Months Ended September 30,				For the Quarter Ended September 30,				For the Nine Months Ended September 30,
	2017		2016		2017		2016		2023		2022		2023		2022
Weighted average common shares outstanding basic		30,266,838		29,849,005		30,149,818		29,682,798		36,811,296		36,472,378		36,712,662		36,383,398
Dilutive effect of stock options and restricted stock		385,105		226,473		374,343		266,913		168,584		244,775		259,722		295,557
Weighted average common shares outstanding diluted		30,651,943		30,075,478		30,524,161		29,949,711		36,979,880		36,717,153		36,972,384		36,678,955

Options to purchase ~~256,600 and 261,100~~104,409 shares of common stock that were outstanding for the ~~three and nine months ended~~ ~~September 30, 2017, respectively, and~~ ~~569,050 for the three~~quarter and nine months ended September 30, ~~2016,~~2023 and 114,540 shares of common stock that were outstanding for the quarter and nine months ended September 30, 2022 were not included in the computation of diluted earnings per share as the exercise prices of these options were greater than the average market price of common shares, and were therefore anti-dilutive.

9. Stock Compensation

~~Subject to shareholder approval, which~~The Company’s 2021 Long-Term Incentive Plan (the “2021 Plan”) was ~~received on April 26, 2017,~~adopted by the Board of Directors ~~approved the Company’s Amended and Restated 2017 Incentive Stock Plan (the “2017 Plan”)~~ on March ~~2, 2017.~~4, 2021, amended by the Board of Directors on April 20, 2021, and approved by shareholders in the annual shareholder meeting on April 29, 2021. The ~~2017~~2021 Plan authorizes the Compensation and Management Development Committee of the Board of Directors (“Compensation Committee”) to issue up to ~~5,126,950 shares of~~2,000,000 additional various stock awards including stock options, performance stock units, restricted stock units and other forms of equity-based awards to key employees and directors. ~~Options granted and outstanding vest over the requisite service period and expire ten years from the date of grant.~~

In March 2017, the Company granted 397,759 stock options with a weighted average exercise price of $14.30 and a weighted average fair value of $4.47. The fair value of options granted is estimated using a binomial lattice option pricing model. Also in March 2017, the Company granted 87,887 and 140,746 time-based and performance-based restricted stock units, respectively, with a weighted average fair value of $14.30. There were no stock-based awards granted in the second or third quarters of 2017.

Stock compensation expense was approximately ~~$1.1~~$0.7 million and ~~$0.7~~$1.3 million for the ~~three months~~quarters ended September 30, ~~2017~~2023 and ~~2016,~~2022, respectively, and ~~$2.9~~$5.1 million and ~~$2.8~~$5.2 million for the nine months ended September 30, ~~2017~~2023 and ~~2016,~~2022, respectively. These expenses are included in Selling, General and Administrative ~~expenses in the accompanying Condensed Consolidated Statements of Operations (Unaudited).~~ expenses. Total unrecognized compensation cost related to non-vested stock-based compensation arrangements at September 30, ~~2017~~2023 was approximately ~~$6.5~~$8.9 million, which will be recognized over the next three years, as such compensation is earned. Outstanding options expire, if unexercised, ten years from the date of grant.

10. Contingencies

The Company is a defendant in various lawsuits and a party to various other legal proceedings arising in the ordinary course of business, some of which are covered in whole or in part by insurance. When a loss arising from these matters is probable and can reasonably be estimated, the most likely amount of the estimated probable loss is recorded, or if a range of probable loss can be estimated and no amount within the range is a better estimate than any other amount, the minimum amount in the range is recorded. As additional information becomes available, any potential liability related to these matters is assessed and the estimates are revised, if necessary.

Based on current available information, management believes that the ultimate outcome of these matters, including those described below, will not have a material adverse effect on our financial position, cash flows or overall trends in our results of operations. However, these matters are subject to inherent uncertainties, and unfavorable rulings could occur. If an unfavorable ruling were to occur, there exists the possibility of a material adverse impact on the financial position and results of operations of the period in which the ruling occurs, or in future periods.

New Idria Mercury Mine

In September 2015, the U.S. Environmental Protection Agency (“EPA”) ~~formally~~ informed a subsidiary of the Company, Buckhorn, Inc. (“Buckhorn”) via a notice letter and related documents (the “Notice Letter”) that it considers Buckhorn to be a potentially responsible party (“PRP”) in connection with the New Idria Mercury Mine site (“New Idria Mine”). New Idria Mining & Chemical Company (“NIMCC”), which owned and/or operated the New Idria Mine through 1976, was merged into Buckhorn Metal Products Inc. in 1981, which was subsequently acquired by Myers Industries, Inc. in 1987. As a result of the EPA Notice Letter, Buckhorn and the

~~MYERS INDUSTRIES, INC. AND SUBSIDIARIES~~

~~Notes to Unaudited Condensed Consolidated Financial Statements – (Continued)~~

~~(Dollar amounts in thousands, except where otherwise indicated)~~

Company ~~are~~ engaged in negotiations with the EPA with respect to a draft Administrative Order of Consent (“AOC”) proposed by the EPA for the Remedial Investigation/Feasibility Study (“RI/FS”) to determine the extent of remediation necessary and the screening of alternatives.

~~The~~ Buckhorn and the EPA finalized the AOC and related Statement of Work (“SOW”) with regards to the New Idria Mine, ~~is located near Hollister, California and~~effective as of

MYERS INDUSTRIES, INC. AND SUBSIDIARIES

Notes to Unaudited Condensed Consolidated Financial Statements – (Continued)

(Dollars in thousands, except where otherwise indicated)

November 27, 2018, the date that it was ~~added~~executed by the EPA. The AOC requires a $2 million letter of credit to be provided for the duration of the RI/FS as assurance of Buckhorn's performance obligations.

All reasonably estimable costs related to the ~~Superfund National Priorities List by the EPA in October 2011, at which time the Company recognized expense~~environmental remediation are accrued. These costs are comprised primarily of $1.9 million related to performing the RI/FS. In the second quarter of 2016, the Company, based on discussions with the EPA, determined that the RI/FS would begin in 2017 and therefore obtained updated estimated costs to perform the RI/FS. As a result of the updated estimated costs, the Company recorded additional expense of $1.0 million in the second quarter of 2016. In the second quarter of 2017, the Company, based on the status of its discussions with the EPA, determined that field work on the RI/FS will likely begin in 2018 with no changes to the cost estimates to perform the RI/FS. In the third quarter of 2017, the Company recorded an additional reserve of $0.3 million for this project, as a result of additional professional fees and other project costs expected to be incurred as part of the implementationFS, negotiation of the AOC, ~~and site preparation and stabilization, in advance~~identification of ~~starting the RI/FS field work in 2018. As part of the Notice Letter, the~~possible other PRPs, EPA ~~also made a claim for approximately $1.6 million in past costs for actions it claims it has taken in connection with the New Idria Mine since 1993. While the Company is challenging these~~oversight fees, past cost claims ~~in 2015 the Company recognized expense of $1.3 million related to the portion of these costs alleged to have been incurred after the site was added to the Superfund list in 2011.~~

As of September 30, 2017, the Company has a total reserve of $2.7 million related to the New Idria Mine, of which $0.7 million is classified in Other Current Liabilities and $2.0 million is classified in Other Liabilities on the Condensed Consolidated Statements of Financial Position (Unaudited).

~~As negotiations with~~made by the EPA, ~~proceed it~~periodic monitoring, and responses to demands issued by the EPA under the AOC. It is possible that adjustments to the aforementioned reserves will be necessary ~~to reflect~~as new ~~information.~~information is obtained, including after finalization and EPA approval of the work plan for the RI/FS. Estimates of ~~the Company’s~~Buckhorn’s liability are based on current facts, laws, regulations and technology. Estimates of ~~the Company’s~~Buckhorn’s environmental liabilities are further subject to uncertainties regarding ~~the negotiations with EPA,~~ the nature and extent of site contamination, the range of remediation alternatives available, evolving remediation standards, imprecise engineering evaluation and cost estimates, the extent of remedial actions that may be required, the extent of oversight by the EPA and the number and financial condition of other PRPs that may be named, as well as the extent of their responsibility for the ~~remediation,~~remediation. Beginning in late 2021 and continuing through the current period, Buckhorn and the ~~availability~~EPA continue to actively discuss the scope of the activities in the work plan for the RI/FS, resulting in changes to the estimated costs to perform the RI/FS work plan from time to time. Cost estimates will continue to be refined as the work plans for the RI/FS and the ultimate remediation are finalized and as the activities are performed over a period expected to last several years.

In the fourth quarter of 2022, Buckhorn reached an agreement with respect to certain insurance coverage related to defense costs, which is expected to apply to a substantial portion of the estimated RI/FS costs. Recovery of accrued costs are recorded as a receivable to the extent such recovery is determined to be probable under this agreement. Estimates of cost recoveries will continue to be refined as the RI/FS work plan is finalized and the activities are performed over a period expected to last several years. Buckhorn may also have opportunity for ~~these expenses.~~cost recovery under other insurance policies.

~~At this time, we have not accrued for remediation costs~~Since October 2011, when the New Idria Mine was added to the Superfund National Priorities List by the EPA, Buckhorn has recognized $19.3 million of cumulative charges, made cumulative payments of $10.1 million and received insurance recoveries of $3.4 million through September 30, 2023. For the three and nine months ended September 30, 2023 the following activity was recorded in connection with the New Idria Mercury Mine:


	For the Quarter Ended September 30,						For the Nine Months Ended September 30,
	2023			2022			2023			2022
Beginning reserve balance	$	12,082		$	9,153		$	11,855		$	8,213
Changes in estimated environmental liability		300			1,500			3,800			2,800
Payments made(1) (4)		(1,182	)		(123	)		(4,455	)		(483	)
Ending reserve balance(2)	$	11,200		$	10,530		$	11,200		$	10,530

Beginning receivable balance	$	6,162		$	—		$	6,000		$	—
Changes in estimated probable insurance recovery		400			—			1,600			—
Insurance recovery reimbursements		(394	)		—			(1,432	)		—
Ending receivable balance(3)	$	6,168		$	—		$	6,168		$	—

(1) Payments made in 2022 were offset by insurance refunds of $0.3 million and $0.4 million in the three and nine months ended September 30, 2022, respectively. In the fourth quarter of 2022, Buckhorn reached an agreement with respect to certain insurance coverage related to defense costs for which recovery of accrued costs are recorded as a receivable to the extent such recovery is determined to be probable under this ~~site as we are unable~~agreement.

(2) As of September 30, 2023, Buckhorn has a total ending reserve balance of $11.2 million related to ~~estimate~~ the ~~liability, given~~New Idria Mine, of which $7.7 million is classified in Other current liabilities and $3.5 million in Other liabilities (long-term).

(3) As of September 30, 2023, Buckhorn has a total receivable balance related to the probable insurance recovery of $6.2 million, of which $3.2 million

is classified in Accounts receivable and $3.0 million is classified in Other (long-term).

(4) Payments made for the nine months ended September 30, 2023 include a $1.9 million payment related to a settlement agreement with the EPA to resolve the past costs claim, which Buckhorn paid in the first quarter of 2023.

Given the circumstances referred to above, including the fact that the final remediation strategy has not yet been ~~determined.~~determined, Buckhorn has not accrued for remediation costs in connection with this site as it is unable to estimate the range of a reasonably possible liability for remediation costs.

MYERS INDUSTRIES, INC. AND SUBSIDIARIES

Notes to Unaudited Condensed Consolidated Financial Statements – (Continued)

(Dollars in thousands, except where otherwise indicated)

New Almaden Mine

A number of parties, including the Company and its subsidiary, Buckhorn (as successor to NIMCC), were alleged by trustee agencies of the United States and the State of California to be responsible for natural resource damages due to environmental contamination of areas comprising the historical New Almaden mercury mines located in the Guadalupe River Watershed region in Santa Clara County, California (“County”). In 2005, Buckhorn and the Company, without admitting liability or chain of ownership of NIMCC, resolved the trustees’ claim against them through a consent decree that required them to contribute financially to the implementation by the County of an environmentally beneficial project within the impacted area. Buckhorn and the Company negotiated an agreement with the County ("Cost Sharing Agreement"), whereby Buckhorn and the Company agreed to reimburse one-half of the County’s costs of implementing the project. A detailed estimate was received from the County in 2016, and estimated costs for implementing the project ~~originally estimated~~to range between $3.3 million and $4.4 million. In 2022, the County informed the Company that it may begin implementation of the project in 2023 and that costs were expected to be higher. In January 2023, the County informed Buckhorn that the project will commence in 2023 and that it had accepted a bid to complete the project for approximately ~~$1.6~~$9.0 million. ~~As a result, in 2005,~~The Company and Buckhorn intend to vigorously challenge, under the ~~Company recognized expense of~~ ~~$0.8 million~~ ~~representing its share~~terms of the ~~initial estimated project costs, of which approximately~~ ~~$0.5~~ ~~million has been paid~~Cost Sharing Agreement, their responsibility to ~~date. In April 2016,~~share in the ~~Company was notified by the County that the original cost estimate may no longer be appropriate due to expanded scope and increased costs of construction and provided a revised estimate of between~~ ~~$3.3 million and $4.4 million.~~ ~~The Company completed a detailed review~~entirety of the ~~support provided by the County for the revised estimate, and as a result, recognized~~project cost increases. No additional ~~expense of~~ ~~$1.2~~ ~~million~~costs were incurred related to New Almaden in the ~~second~~quarter and ~~third quarters~~nine months ended September 30, 2023 or 2022, respectively and payments of ~~2016.~~$0.1 million were made in the quarter and nine months ended September 30, 2023. As of September 30, ~~2017,~~2023, the Company has a total reserve of $~~1.5~~4.4 million related to the New Almaden Mine, of which ~~$0.3~~$0.3 million is classified in Other Current Liabilities and ~~$1.2~~$4.1 million ~~is classified~~ in Other Liabilities ~~on the Condensed Consolidated Statements of Financial Position (Unaudited)~~ (long-term).

~~The project has not yet been implemented though significant work on design and planning has been performed. Field work on the project is expected to commence in 2018.~~ As work on the project occurs and dispute resolution proceeds, it is possible that adjustments to the aforementioned reserves will be necessary to reflect new information. In addition, the Company may have claims against and defenses to claims by the County under the 2005 agreement that could reduce or offset its obligation for reimbursement of some of these potential additional costs. With the assistance of environmental consultants, the Company will closely monitor this matter and will continue to assess its reserves as additional information becomes available.

No Spill Matter

On December 11, 2018, No Spill Inc. ("No Spill") filed suit against Scepter Manufacturing LLC in the United States District Court for the District of Kansas asserting infringement of two patents, breach of contract, and trade dress claims in relation to plastic gasoline containers Scepter manufactures and sells in the United States. Scepter Canada, Inc. was later added in a second amended complaint. On January 6, 2022, the District Court bifurcated the patent infringement and invalidity issues from the antitrust and other issues in the case. The trial on patent infringement and invalidity was held in early March 2023, resulting in a unanimous jury verdict on March 14, 2023 in favor of the defendant Scepter entities on each of the alleged claims of infringement. On April 24, 2023, the Court issued an Order dismissing all remaining claims in the case with prejudice and entered final Judgment of the jury verdict in favor of Scepter. On April 24, 2023, the parties dismissed the remaining claims and phase two of the bifurcated trial will not proceed.

Both parties filed post-trial motions with the District Court to preserve the issues for appeal. The District Court denied No Spill's motion for judgment as a matter of law and for a new trial. No Spill did not file an appeal. The underlying case is now concluded.

The Company has maintained insurance policies, which it believes may cover a substantial portion of the defense costs incurred in this matter. To date, Scepter has incurred $13.3 million of defense costs in this matter, of which $0.1 million and $0.6 million were incurred in the quarters ended September 30, 2023 and 2022, respectively, and $3.6 million and $2.5 million were incurred in the nine months ended September 30, 2023 and 2022, respectively. The Company and Scepter are in active discussions with the insurer to recover these defense costs. In the third quarter of 2023 while discussions with the insurer were in progress, the Company received a preliminary $0.5 million payment from the insurer, which was recorded as a reduction to legal costs within Selling, General and Administrative expenses. The Company believes it is entitled to additional insurance proceeds and will continue to pursue recovery with the insurer.

Other Matters

On February 14, 2023, a lawsuit was filed by Nan Morgan McCartney in the Circuit Court of Escambia County, Florida against the Company, Scepter US Holding Company, Scepter Manufacturing, LLC, Scepter Canada Inc., Walmart Inc., and Wal-Mart Stores East, LP. The complaint seeks compensatory damages and court costs for harm caused to Ms. McCartney allegedly arising from use of a 5-gallon portable fuel container manufactured by a Scepter company and alleges amounts in controversy in excess of $30 thousand exclusive of costs. The case has been removed to the Northern District of Florida, Pensacola Division. The Myers' defendants filed their Answer to the Complaint on April 25, 2023. On May 19, 2023 the Court filed a Final Scheduling Order. Defendants have served written discovery on Plaintiff. Plaintiff was deposed on September 6, 2023. We are scheduling depositions for other fact witnesses. No other

MYERS INDUSTRIES, INC. AND SUBSIDIARIES

Notes to Unaudited Condensed Consolidated Financial Statements – (Continued)

(~~Dollar amounts~~Dollars in thousands, except where otherwise indicated)

~~Lawn and Garden Indemnification Claim~~

~~In connection with the sale~~proceedings have occurred in this litigation matter as of the ~~Lawn~~date of this filing and ~~Garden business, as described in Note 3,~~ the Company ~~received~~cannot assess with any meaningful probability the outcome or the potential damages.

On October 18, 2023, Tank Holding Corp. served a ~~Notice of Indemnification Claims in April 2015, and~~Complaint against Myers Industries, Inc. (“Myers”), asserting patent infringement with regard to a Second Notice of Indemnification Claims in July 2016 (collectively, the “Claims”), alleging breaches of certain representations and warranties under the agreement resulting in losses in the amount of approximately $10 million. As described in Note 3, approximately $8.6 millionsingle product manufactured by Elkhart Plastics LLC. Myers has conducted a preliminary assessment of the ~~sale proceeds were placed~~allegations and believes it has strong defenses. No other proceedings or discovery have occurred in ~~escrow and due to be settled in August 2016, but have been extended until the Claims are resolved. The Company believes these Claims are without merit and intends to vigorously defend its position.~~

~~When a loss arising from these matters is probable and can reasonably be estimated, we record the amount~~this matter as of the ~~estimated loss,~~date of this filing and the Company cannot assess with any meaningful probability the outcome or the ~~minimum estimated liability when the loss is estimated using a range, and no point within the range is more probable of occurrence than another. As additional information becomes available, any~~ potential ~~liability related to these matters will be assessed and the estimates will be revised, if necessary.~~damages.

Based on current available information, management believes that the ultimate outcome of these matters will not have a material adverse effect on our financial position, cash flows or overall trends in our results of operations. However, these matters are subject to inherent uncertainties, and unfavorable rulings could occur. If an unfavorable ruling were to occur, there exists the possibility of a material adverse impact on the financial position and results of operations of the period in which the ruling occurs, or in future periods.

11. Long-Term Debt and Loan Agreements

Long-term debt consisted of the following:


	September 30,		December 31,
	2023		2022
Loan Agreement	$	22,000	$	56,000
5.25% Senior Unsecured Notes due January 15, 2024		11,000		11,000
5.30% Senior Unsecured Notes due January 15, 2024		15,000		15,000
5.45% Senior Unsecured Notes due January 15, 2026		12,000		12,000
		60,000		94,000
Less unamortized deferred financing costs		19		38
		59,981		93,962
Less current portion long-term debt		25,994		—
Long-term debt	$	33,987	$	93,962

September 30,

December 31,

2017

2016

Loan Agreement

$
59,795

$
90,686

4.67% Senior Unsecured Notes due 2021

40,000

40,000

5.25% Senior Unsecured Notes due 2024

11,000

11,000

5.30% Senior Unsecured Notes due 2024

29,000

29,000

5.45% Senior Unsecured Notes due 2026

20,000

20,000

159,795

190,686

Less unamortized deferred financing costs

1,785

1,164

$
158,010

$
189,522

~~In March 2017,~~On September 29, 2022, the Company entered into a Seventh Amended and Restated Loan Agreement (the “Seventh Amendment”), which amended the Sixth Amended and Restated Loan Agreement (the "Sixth Amendment"), dated March 12, 2021. The Seventh Amendment, among other things, extended the maturity date to September 2027 from March 2024. The Seventh Amendment did not change the senior revolving credit facility's $250 million borrowing limit, which includes a letter of credit subfacility and swingline subfacility, or the outstanding letters of credit. In connection with the Seventh Amendment, the Company incurred $0.9 million of deferred financing fees, which are included in Other Assets (long-term). Together with unamortized fees from the Sixth Amendment remaining deferred financing fees under the Company's Loan Agreement were $1.2 million and $1.4 million as of September 30, 2023 and December 31, 2022, respectively, which will be amortized to Interest expense over the term of the Loan Agreement (defined below).

In March 2021, the Company entered into the Sixth Amendment, which amended the Fifth Amended and Restated Loan Agreement ~~(the~~(collectively with the Sixth and Seventh Amendments, the “Loan Agreement”). dated March 2017. The ~~Loan Agreement replaced~~Sixth Amendment increased the ~~pre-existing $300 million~~ senior revolving credit ~~facility with a $200~~facility’s borrowing limit to $250 million ~~facility and~~from $200 million, extended the ~~term~~maturity date to March 2024 from ~~December 2018~~March 2022, and increased flexibility of the financial and other covenants and provisions. Amounts borrowed under the credit facility are secured by pledges of stock of certain of the Company’s foreign subsidiaries and guaranties of certain of its domestic subsidiaries. In connection with the Sixth Amendment, the Company incurred $1.1 million of deferred financing fees, which are included in Other Assets (long-term) and being amortized to ~~March 2022. In addition,~~Interest expense over the ~~Loan Agreement provides for a maximum Leverage Ratio of 3.75 for the first and second quarters of 2017, stepping down to 3.5 in the third quarter of 2017, and 3.25 thereafter.~~

~~Under the terms~~term of the Loan ~~Agreement, the Company may borrow up to $200.0 million, reduced for letters of credit issued.~~ Agreement.

As of September 30, ~~2017,~~2023, the Company had ~~$135.8~~$222.3 million available under the Loan ~~Agreement.~~Agreement, which is available for the ongoing working capital requirements of the Company and its subsidiaries and for general corporate purposes. The Company had ~~$4.4~~$5.7 million of letters of credit issued related to insurance and other ~~financing~~ contracts requiring financial assurance in the ordinary course of ~~business at September 30, 2017.~~ business. Borrowings under the Loan Agreement bear interest at the ~~LIBOR rate, prime rate, federal funds effective rate,~~Term SOFR, RFR, EURIBOR and CDOR-based borrowing rates. Amounts borrowed under the ~~Canadian deposit offered rate, or~~credit facility are secured by pledges of stock of certain of the ~~euro currency reference rate depending on~~Company’s foreign subsidiaries and guaranties of certain of its domestic subsidiaries.

The Company also holds Senior Unsecured Notes (“Notes”), which range in face value from $11.0 million to $15.0 million, with interest rates ranging from 5.25% to 5.45%, payable semiannually, and maturing between January 2024 and January 2026. At September 30, 2023, $38.0 million of the ~~type~~Notes were outstanding, of ~~loan requested by the Company, plus the applicable margin~~which $26.0 million are classified as ~~set forth in the Loan Agreement.~~ current.

The weighted average interest rate on borrowings under ~~our loan agreements were 5.18%~~the Company’s long-term debt was 7.09% and ~~4.65%~~5.50% for the ~~three months~~quarters ended September 30, ~~2017~~2023 and ~~2016,~~2022, respectively, and ~~5.05%~~6.74% and ~~4.61%~~4.55% for the nine months ended September 30, ~~2017~~2023 and ~~2016,~~2022, respectively, which includes a quarterly facility fee on the used and unused ~~portion.~~portion, as well as amortization of deferred financing costs.

In September 2017, the Company made an offer to all holders of the $100 million Senior Unsecured Notes (“Notes”) to purchase all or a portion of the Notes prior to their maturity dates. In October 2017, one note holder accepted the offer and elected to tender $22 million in Notes. The Company purchased the Notes from the holder on October 31, 2017 and a loss on extinguishment of debt of approximately $1.9 million was recorded during the fourth quarter of 2017.

1516

MYERS INDUSTRIES, INC. AND SUBSIDIARIES

Notes to Unaudited Condensed Consolidated Financial Statements – (Continued)

(~~Dollar amounts~~Dollars in thousands, except where otherwise indicated)

~~12. Retirement Plans~~

~~The~~As of September 30, 2023, the Company ~~and certain~~was in compliance with all of its ~~subsidiaries have pension~~debt covenants associated with its Loan Agreement and ~~profit sharing plans covering substantially~~Notes. The most restrictive financial covenants for all of ~~their employees. The~~the Company’s ~~defined benefit pension plan,~~ ~~The Pension Agreement between Akro-Mils~~debt are a leverage ratio (defined as total debt divided by earnings before interest, taxes, depreciation and ~~United Steelworkers of America Local No. 1761-02, provides benefits primarily based upon a fixed amount for each year of service. The plan was frozen in 2007,~~amortization, as adjusted) and ~~thus benefits for service were no longer accumulated after this date.~~

~~Net periodic pension cost is~~an interest coverage ratio (defined as ~~follows:~~earnings before interest, taxes, depreciation and amortization, as adjusted, divided by interest expense).

For the Three Months Ended September 30,

For the Nine Months Ended September 30,

2017

2016

2017

2016

Interest cost

$
63

$
68

$
189

$
204

Expected return on assets

(74
)

(80
)

(222
)

(240
)
Amortization of net loss

24

20

72

61

Net periodic pension cost

$
13

$
8

$
39

$
25

Company contributions

$
—

$
—

$
—

$
—

~~The Company does not expect to make a contribution to the plan in 2017.~~

~~13.~~12. Income Taxes

The Company’s effective tax rate was ~~38.5%~~25.7% and ~~42.0%~~25.6% for the ~~three~~quarter and nine months ended September 30, ~~2017,~~2023, respectively compared to ~~56.3%~~24.8% and ~~69.8%~~25.5% for the ~~three~~quarter and nine months ended September 30, ~~2016, respectively.~~2022. The effective income tax rate for ~~the first nine months of 2017 and 2016~~both periods was different than the Company’s statutory rate, primarily due to ~~losses in jurisdictions where the tax benefits are not recognized.~~ non-deductible expenses and state taxes.

~~The total amount of gross unrecognized tax benefits that would reduce the Company’s effective tax rate was $0.3 million and $0.5 million at September 30, 2017 and December 31, 2016, respectively.~~

The Company and its subsidiaries file U.S. Federal, state and local, and non-U.S. income tax returns. As of September 30, ~~2017,~~2023, the Company is no longer subject to U.S. Federal examination by tax authorities for tax years before ~~2014.~~2019. The Company is subject to state and local examinations for tax years of ~~2012~~2018 through ~~2016.~~2021. In addition, the Company is subject to non-U.S. income tax examinations for tax years of ~~2012~~2017 through ~~2016.~~2021.

13. Leases

The Company determines if an arrangement is a lease at inception. The Company has leases for manufacturing facilities, distribution centers, warehouses, office space and equipment, with remaining lease terms of one to twelve years. Certain of these leases include options to extend the lease for up to five years, and some include options to terminate the lease early. Leases with an initial term of 12 months or less are not recorded on the statement of financial position; the Company recognizes lease expense for these short-term leases on a straight-line basis over the lease term. Operating leases with an initial term greater than 12 months are included in Right ofuse asset – operating leases (“ROU assets”), Operating lease liability – short term, and Operating lease liability – long term and finance leases are included in Property, plant and equipment, Finance lease liability – short term, and Finance lease liability – long term in the Condensed Consolidated Statements of Financial Position (Unaudited).

The ROU assets represent the right to use an underlying asset for the lease term and the lease liabilities represent the obligation to make lease payments. ROU assets and lease liabilities are recognized at commencement date based on the present value of the lease payments over the lease term. When leases do not provide an implicit rate, the Company’s incremental borrowing rate is used, which is then applied at the portfolio level, based on the information available at commencement date in determining the present value of lease payments. The Company has also elected not to separate lease and non-lease components. The lease terms include options to extend or terminate the lease when it is reasonably certain the option will be exercised. Lease expense is recognized on a straight-line basis over the lease term.

Amounts included in the Condensed Consolidated Statements of Financial Position (Unaudited) related to leases include:


		September 30,		December 31,
	Classification	2023		2022
Assets:
Operating lease assets	Right of use asset - operating leases	$	27,384	$	28,908
Finance lease assets	Property, plant and equipment, net		8,854		9,075
Total lease assets		$	36,238	$	37,983

Liabilities:
Current	Operating lease liability - short-term	$	5,604	$	6,177
Long-term	Operating lease liability - long-term		22,023		22,786
Total operating lease liabilities			27,627		28,963
Current	Finance lease liability - short-term		581		518
Long-term	Finance lease liability - long-term		8,766		8,919
Total finance lease liabilities			9,347		9,437
Total lease liabilities		$	36,974	$	38,400

MYERS INDUSTRIES, INC. AND SUBSIDIARIES

Notes to Unaudited Condensed Consolidated Financial Statements – (Continued)

(~~Dollar amounts~~Dollars in thousands, except where otherwise indicated)

The components of lease expense include:


		For the Quarter Ended September 30,				For the Nine Months Ended September 30,
Lease Cost	Classification	2023		2022		2023		2022
Operating lease cost (1)	Cost of sales	$	1,493	$	1,440	$	4,664	$	4,172
Operating lease cost (1)	Selling, general and administrative expenses		856		803		2,493		2,081
Finance lease cost
Amortization expense	Cost of sales		190		172		535		517
Interest expense on lease liabilities	Interest expense, net		89		85		251		256
Total lease cost		$	2,628	$	2,500	$	7,943	$	7,026

(1)

Includes short-term leases and variable lease costs, which are immaterial

Supplemental cash flow information related to leases was as follows:


	For the Nine Months Ended September 30,
Supplemental Cash Flow Information	2023		2022
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	5,649	$	5,074
Operating cash flows from finance leases	$	251	$	256
Financing cash flows from finance leases	$	403	$	374
Right-of-use assets obtained in exchange for new lease liabilities:
Operating leases	$	3,756	$	3,638
Finance leases	$	313	$	—


Lease Term and Discount Rate	September 30, 2023			December 31, 2022
Weighted-average remaining lease term (years):
Operating leases		5.93			6.44
Finance leases		12.24			13.17
Weighted-average discount rate:
Operating leases		4.4	%		3.6	%
Finance leases		3.7	%		3.5	%


Maturity of Lease Liabilities - As of September 30, 2023	Operating Leases			Finance Leases			Total
2023(1)	$	1,783		$	225		$	2,008
2024		6,415			920			7,335
2025		5,506			924			6,430
2026		4,838			924			5,762
2027		3,948			945			4,893
After 2027		8,749			7,658			16,407
Total lease payments		31,239			11,596			42,835
Less: interest		(3,612	)		(2,249	)		(5,861	)
Present value of lease liabilities	$	27,627		$	9,347		$	36,974

(1)

Represents amounts due in 2023 after September 30, 2023

MYERS INDUSTRIES, INC. AND SUBSIDIARIES

Notes to Unaudited Condensed Consolidated Financial Statements – (Continued)

(Dollars in thousands, except where otherwise indicated)

14. ~~Industry~~ Segments

~~Using the criteria of ASC 280,~~ ~~Segment Reporting, the~~The Company manages its business under two operating segments, Material Handling and Distribution, consistent with the manner in which ~~our~~the Chief Operating Decision Maker (“CODM”) evaluates performance and makes resource allocation decisions. None of the reportable segments include operating segments that have been aggregated. These segments contain individual business components that have been combined on the basis of common management, customers, products, production processes and other economic characteristics. ~~The Company accounts for intersegment~~Intersegment sales are recorded with a reasonable margin and ~~transfers at cost plus a specified mark-up.~~are eliminated in consolidation.

The Material Handling Segment manufactures a broad selection of durable plastic reusable containers that are used repeatedly during the course of their service life. At the end of their service life, these highly sustainable products can be recovered, recycled, and reprocessed into new products. The Material Handling Segment’s products include pallets, small parts bins, bulk shipping containers, storage and organization products, OEM parts, custom plastic products, consumer fuel containers and ~~rotationally-molded plastic~~ tanks for water, fuel and waste handling. Products in the Material Handling Segment are primarily injection molded, rotationally molded or blow molded. This segment conducts its primary operations in the United States ~~but also operates in Brazil~~ and Canada. Markets served ~~encompass various niches of~~include industrial manufacturing, food processing, retail/wholesale products distribution, agriculture, automotive, recreational vehicles, marine vehicles, healthcare, appliance, bakery, electronics, textiles and consumer, ~~and~~among others. Products are sold both directly to end-users and through distributors.

The Distribution Segment is engaged in the distribution of equipment, tools, and supplies used for tire servicing and automotive ~~undervehicle~~under-vehicle repair and the manufacture of tire repair and retreading products. The product line includes categories such as tire valves and accessories, tire changing and balancing equipment, lifts and alignment equipment, service equipment and tools, and tire repair/retread supplies. The Distribution Segment also manufactures and sells certain traffic markings, including reflective highway marking tape. The Distribution Segment operates domestically through its sales offices and ~~four~~eight regional distribution centers in the United States, and in certain foreign countries through export sales. In addition, the Distribution Segment operates directly in certain foreign markets, principally Central America, through foreign branch operations. Markets served include retail and truck tire dealers, commercial auto and truck fleets, truck stop operations, auto dealers, general service and repair centers, tire retreaders, and government agencies. The acquisition of Mohawk, described in Note 3, is included in the Distribution Segment.

Total sales from foreign business units were approximately $10.2 million and $13.9 million for the quarters ended September 30, 2023 and 2022, respectively, and $33.9 million and $40.4 million for the nine months ended September 30, 2023 and 2022, respectively.

Summarized segment detail for the ~~three~~quarters and nine months ended September 30, ~~2017~~2023 and ~~2016~~2022 are presented in the following table:


	For the Three Months Ended September 30,						For the Nine Months Ended September 30,						For the Quarter Ended September 30,						For the Nine Months Ended September 30,
	2017			2016			2017			2016			2023			2022			2023			2022
Net Sales
Material Handling	$	104,089		$	89,911		$	310,343		$	299,842		$	132,484		$	155,658		$	428,341		$	505,384
Distribution		40,004			42,793			117,836			128,248			65,335			72,416			193,693			181,352
Inter-company sales		(18	)		(28	)		(98	)		(92	)		(21	)		(9	)		(44	)		(29	)
Total net sales	$	144,075		$	132,676		$	428,081		$	427,998		$	197,798		$	228,065		$	621,990		$	686,707

Operating income
Material Handling													$	19,978		$	23,962		$	70,157		$	83,216
Distribution (1)														4,993			4,899			10,628			12,469
Corporate (1) (2) (3)														(6,268	)		(8,964	)		(26,983	)		(28,766	)
Total operating income														18,703			19,897			53,802			66,919
Interest expense, net														(1,539	)		(1,719	)		(4,975	)		(4,077	)
Income before income taxes													$	17,164		$	18,178		$	48,827		$	62,842

(1) In the nine months ended September 30, 2023, the company recognized $0.7 million of executive severance, of which $0.4 million was recognized in the Distribution Segment related to severance and $0.3 million was recognized in Corporate related to charges for the acceleration of stock compensation.

(2) The company recognized $(0.1) million and $1.5 million of expense (income) from changes to the estimated environmental reserve, net of probable insurance recoveries for the quarters ended September 30, 2023 and 2022, respectively, and $2.2 million and $2.8 million for the nine months ended September 30, 2023 and 2022, respectively, as described in Note 10. Environmental charges are not included in segment results and are shown with Corporate.

(3) Corporate includes $1.3 million of consulting costs to improve the Company's capabilities to screen and execute large acquisitions in the nine months ended September 30, 2023.

Income (loss) from continuing operations before income taxes

Material Handling

$
10,325

$
4,378

$
29,839

$
26,152

Distribution

3,179

3,301

7,742

9,803

Corporate

(6,393
)

(4,693
)

(17,532
)

(20,674
)
Total operating income

7,111

2,986

20,049

15,281

Interest expense, net

(1,785
)

(2,015
)

(5,545
)

(6,087
)
Income from continuing operations before income taxes

$
5,326

$
971

$
14,504

$
9,194

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Forward-Looking Statements

This Quarterly Report on Form 10-Q and the information incorporated by reference contains “forward-looking statements” within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995, including information regarding the Company’s financial outlook, future plans, objectives, business prospects and anticipated financial performance. Forward-looking statements can be identified by words such as “will,” “believe,” “anticipate,” “expect,” “estimate,” “intend,” “plan,” or variations of these words, or similar expressions. These forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based only on the Company’s current beliefs, expectations and assumptions regarding the future of our business, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions. Because forward-looking statements relate to the future, these statements inherently involve a wide range of inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of our control. The Company’s actual actions, results, and financial condition may differ materially from what is expressed or implied by the forward-looking statements.

Specific factors that could cause such a difference on our business, financial position, results of operations and/or liquidity include, without limitation, raw material availability, increases in raw material costs, or other production costs; risks associated with our strategic growth initiatives or the failure to achieve the anticipated benefits of such initiatives; unanticipated downturn in business relationships with customers or their purchases; competitive pressures on sales and pricing; changes in the markets for the Company’s business segments; changes in trends and demands in the markets in which the Company competes; operational problems at our manufacturing facilities or unexpected failures at those facilities; future economic and financial conditions in the United States and around the world; inability of the Company to meet future capital requirements; claims, litigation and regulatory actions against the Company; changes in laws and regulations affecting the Company; impacts from the novel coronavirus (“COVID-19”) pandemic; and other risks and uncertainties detailed from time to time in the Company’s filings with the SEC, including without limitation, the risk factors disclosed in Item 1A, “Risk Factors,” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022. Given these factors, as well as other variables that may affect our operating results, readers should not rely on forward-looking statements, assume that past financial performance will be a reliable indicator of future performance, nor use historical trends to anticipate results or trends in future periods. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date thereof. The Company expressly disclaims any obligation or intention to provide updates to the forward-looking statements and the estimates and assumptions associated with them.

Executive Overview

The Company conducts its business activities in two reportable segments: The Material Handling Segment and the Distribution Segment.

The Company designs, manufactures, and markets a variety of plastic, metal and rubber products. The Material Handling Segment manufactures a broad selection of plastic reusable containers, pallets, small parts bins, bulk shipping containers, storage and organization products, OEM parts, custom plastic products, consumer fuel containers and tanks for water, fuel and waste handling. Products in the Material Handling Segment are primarily injection molded, rotationally molded or blow molded. The Distribution Segment is engaged in the distribution of tools, equipment and supplies used for tire, wheel and under vehicle service on passenger, heavy truck and off-road vehicles, as well as the manufacturing of tire repair and retreading products.

The Company’s results of operations for the quarter and nine months ended September 30, 2023 are discussed below. The current economic environment includes heightened risks from inflation, interest rates, banking liquidity, volatile commodity costs, supply chain disruptions and labor availability stemming from the broader economic effects of the international geopolitical climate, including the conflict between Russia and Ukraine, and the COVID-19 pandemic. Russia’s invasion of Ukraine in the first quarter of 2022 in addition to other geopolitical events has increased volatility in global commodity markets, including oil (a component of many plastic resins), energy and agricultural commodities. The Company believes it is well-positioned to manage through this uncertainty as it has a strong balance sheet with sufficient liquidity and borrowing capacity as well as a diverse product offering and customer base.

Results of Operations:

Comparison of the ~~Three Months~~Quarter Ended September 30, ~~2017~~2023 to the ~~Three Months~~Quarter Ended September 30, ~~2016~~2022

Net Sales:

(dollars in millions)	Three Months Ended September 30,

(dollars in thousands)											Quarter Ended September 30,
Segment	2017		2016		Change			% Change			2023			2022			Change			% Change
Material Handling	$	104.1	$	89.9	$	14.2			16	%	$	132,484		$	155,658		$	(23,174	)		(14.9	)%
Distribution		40.0		42.8		(2.8	)		(7	)%		65,335			72,416			(7,081	)		(9.8	)%
Inter-company sales		—		—		—						(21	)		(9	)		(12	)
Total net sales	$	144.1	$	132.7	$	11.4			9	%	$	197,798		$	228,065		$	(30,267	)		(13.3	)%

Net sales for the ~~three months~~quarter ended September 30, ~~2017~~2023 were ~~$144.1~~$197.8 million, ~~an increase~~a decrease of ~~$11.4~~$30.3 million or 9%13.3% compared to the ~~three months~~quarter ended September 30, ~~2016.~~2022. Net sales ~~were positively impacted by higher sales volume~~decreased due to lower volume/mix of ~~approximately $9.5~~$24.9 million, ~~higher pricing of $1.2 million, and~~ the effect of ~~favorable~~unfavorable currency translation of ~~$0.7~~$0.3 million and lower pricing of $5.1 million. The Company continues to pursue further pricing initiatives, and beginning in February 2023, the Company began to implement a series of additional pricing increases across a majority of its portfolio of products within its Distribution segment.

Net sales in the Material Handling Segment ~~increased $14.2~~decreased $23.2 million or ~~16%~~14.9% for the ~~three months~~quarter ended September 30, ~~2017~~2023 compared to the ~~three months~~quarter ended September 30, ~~2016. The increase in net~~2022. Net sales ~~was primarily~~decreased due to ~~higher sales volume of approximately $12.8~~lower volume/mix $16.5 million, ~~mainly due to increased demand in the Company’s consumer and food and beverage markets, higher~~lower pricing ~~of $0.7~~$6.4 million and the effect of ~~favorable foreign~~unfavorable currency translation of ~~$0.7~~$0.3 million.

Net sales in the Distribution Segment decreased ~~$2.8~~$7.1 million or 7%9.8% for the ~~three months~~quarter ended September 30, ~~2017~~2023 compared to the ~~three months~~quarter ended September 30, ~~2016,~~2022, primarily ~~the result of~~due to lower ~~sales~~ volume of ~~approximately $3.3 million~~$8.4 million. The decrease in net sales was partially offset by higher pricing of ~~$0.5~~$1.3 million.

Cost of Sales & Gross Profit:

	Three Months Ended September 30,
(dollars in millions)	2017			2016			Change		% Change
												Quarter Ended September 30,
(dollars in thousands)												2023			2022			Change			% Change
Cost of sales	$	103.3		$	96.8		$	6.5		7	%	$	135,419		$	156,417		$	(20,998	)		(13.4	)%
Gross profit	$	40.7		$	35.9		$	4.8		13	%	$	62,379		$	71,648		$	(9,269	)		(12.9	)%
Gross profit as a percentage of sales		28.3	%		27.1	%							31.5	%		31.4	%

Gross profit ~~margin increased to 28.3% in~~decreased $9.3 million, or 12.9%, for the ~~three months~~quarter ended September 30, ~~2017~~2023 compared to ~~27.1% for~~ the ~~three months~~quarter ended September 30, ~~2016, primarily~~2022, due to ~~improved~~ lower volume/mix ~~within~~and pricing as described under Net Sales above and increased labor and productivity costs. Gross margin expanded to 31.5% for the ~~higher sales volumes noted above, mainly in~~quarter ended September 30, 2023 compared with 31.4% for the ~~food and beverage and consumer end markets, as well~~quarter ended September 30, 2022 as the ~~higher pricing of $1.2 million. These effects were~~benefits from lower material costs partially offset ~~by restructuring costs of $1.9 million within~~ the ~~Material Handling Segment, as well as higher raw material costs.~~decrease in gross profit for the quarter ended September 30, 2023.

Selling, General and Administrative Expenses:

	Three Months Ended September 30,
(dollars in millions)	2017			2016			Change		% Change
												Quarter Ended September 30,
(dollars in thousands)												2023			2022			Change			% Change
SG&A expenses	$	36.4		$	32.6		$	3.8		12	%	$	43,698		$	51,756		$	(8,058	)		(15.6	)%
SG&A expenses as a percentage of sales		25.3	%		24.6	%							22.1	%		22.7	%

Selling, general and administrative (“SG&A”) expenses for the ~~three months~~quarter ended September 30, ~~2017~~2023 were ~~$36.4~~$43.7 million, ~~an increase~~a decrease of ~~$3.8 million or 12%~~15.6% compared to the same period in the prior year. Decreases in SG&A expenses in the third quarter ~~2017~~2023 were ~~impacted by higher~~primarily due to $5.3 million of lower incentive compensation, $1.2 million of ~~$3.9 million.~~

~~Restructuring:~~

~~As further discussed~~lower facility costs and $0.9 million of lower variable selling expenses, partially offset by other professional fees and $0.3 million of higher salaries and benefits. Environmental matters, as described in Note 4,10 resulted in a net $0.1 million recovery for the ~~Company continued to execute on the restructuring plan within the Material Handling Segment initiated in the first~~ quarter ~~of 2017. The Company incurred a total of $2.1 million of restructuring costs in connection with the Plan during the three months~~ ended September 30, ~~2017, as well as recognized $2.8~~2023, which compared to $1.5 million ~~in gains on sales~~ of ~~assets related to~~charges for the ~~closure and sale of the Bluffton, Indiana facility and certain related equipment.~~quarter ended September 30, 2022.

As previously announced, the Company expects to save approximately $10 million on an annual basis as a result of the actions under the Plan, a portion of which began being realized starting in the third quarter of 2017. The Plan is expected to be substantially completed by the end of 2017.21

Net Interest Expense:

Three Months Ended September 30,

(dollars in millions)

2017

2016

Change

% Change

Net interest expense

$
1.8

$
2.0

$
(0.2
)

(10
)%
Outstanding borrowings, net of deferred financing costs

$
158.0

$
197.9

$
(39.9
)

(20
)%
Average borrowing rate

5.18
%

4.65
%


	Quarter Ended September 30,
(dollars in thousands)	2023			2022			Change			% Change
Net interest expense	$	1,539		$	1,719		$	(180	)		(10.5	)%
Average outstanding borrowings, net	$	84,220		$	120,315		$	(36,095	)		(30.0	)%
Weighted-average borrowing rate		7.09	%		5.50	%

Net interest expense for the ~~three months~~quarter ended September 30, ~~2017~~2023 was $1.5 million, a decrease of ~~$1.8~~$0.2 million, ~~decreased 10%~~or 10.5%, compared with ~~$2.0~~$1.7 million for the ~~three months~~quarter ended September 30, ~~2016. Lower~~2022. The lower net interest expense was due to lower average outstanding borrowings ~~for~~in the ~~period were~~current quarter, partially offset ~~with~~by a higher ~~average~~weighted-average borrowing rate.

Income Taxes:

	Three Months Ended September 30,
(dollars in millions)	2017			2016
Income from continuing operations before income taxes	$	5.3		$	1.0
							Quarter Ended September 30,
(dollars in thousands)							2023			2022
Income before income taxes							$	17,164		$	18,178
Income tax expense	$	2.1		$	0.5		$	4,417		$	4,507
Effective tax rate		38.5	%		56.3	%		25.7	%		24.8	%

The Company’s effective tax rate ~~of 38.5%~~was 25.7% for the ~~three months~~quarter ended September 30, ~~2017, decreased when~~2023, compared ~~with 56.3%~~to 24.8% for the ~~three months~~quarter ended September 30, ~~2016,~~2022. The increase in the effective tax rate was driven primarily ~~due to the mix of income~~ by ~~jurisdiction between periods, including those where no benefits are recognized on losses.~~non-deductible expenses.

Comparison of the Nine Months Ended September 30, ~~2017~~2023 to the Nine Months Ended September 30, ~~2016~~2022

Net Sales:

(dollars in millions)	Nine Months Ended September 30,

(dollars in thousands)													Nine Months Ended September 30,
Segment	2017			2016			Change			% Change			2023			2022			Change			% Change
Material Handling	$	310.3		$	299.8		$	10.5			4	%	$	428,341		$	505,384		$	(77,043	)		(15.2	)%
Distribution		117.9			128.3			(10.4	)		(8	)%		193,693			181,352			12,341			6.8	%
Inter-company elimination		(0.1	)		(0.1	)		—
Inter-company sales														(44	)		(29	)		(15	)
Total net sales	$	428.1		$	428.0		$	0.1			0	%	$	621,990		$	686,707		$	(64,717	)		(9.4	)%

Net sales for the nine months ended September 30, ~~2017~~2023 were ~~$428.1~~$622.0 million, ~~and were relatively flat with the nine months ended September 30, 2016. Net sales were negatively impacted by lower sales volume~~a decrease of ~~approximately $4.0 million, offset by the effect of favorable foreign currency translation of approximately $2.2 million and higher pricing of $1.9 million.~~

~~Net sales in the Material Handling Segment increased $10.5~~$64.7 million or ~~4% for the nine months ended September 30, 2017~~9.4% compared to the nine months ended September 30, ~~2016.~~2022. Net sales decreased due to lower volume/mix of $83.1 million, following high volume of certain products focused on outdoor activities, which were especially strong due to a surge in COVID-19 induced consumer discretionary spending in the prior period. Net sales also decreased due to the effect of unfavorable currency translation of $1.5 million and lower pricing of $3.2 million. The ~~increase~~decrease in net sales was ~~due to higher~~partially offset by $23.1 million of incremental sales ~~volume~~from the acquisition of ~~$6.7 million, mainly~~Mohawk on May 31, 2022, included in the ~~consumer~~Distribution Segment. Mohawk's annual sales were approximately $65 million at the time of the acquisition. The Company continues to pursue further pricing initiatives, and ~~food and beverage markets, higher~~beginning in February 2023, the Company began to implement a series of additional pricing increases across a majority of ~~$1.6 million, and the effect~~its portfolio of ~~favorable foreign currency translation of $2.2 million.~~products within its Distribution segment.

Net sales in the ~~Distribution~~Material Handling Segment decreased ~~$10.4~~$77.0 million or 8%15.2% for the nine months ended September 30, ~~2017~~2023 compared to the nine months ended September 30, ~~2016, primarily~~2022. Net sales decreased due to lower ~~volume. The decrease in volume was across all product lines~~volume/mix of $65.9 million, lower pricing of $9.6 million and ~~regions, including our export and international channels.~~ the effect of unfavorable currency translation of $1.5 million.

~~Cost of Sales & Gross Profit:~~

Nine Months Ended September 30,

(dollars in millions)

2017

2016

Change

% Change

Cost of sales

$
306.1

$
299.4

$
6.7

2
%
Gross profit

$
122.0

$
128.6

$
(6.6
)

(5
)%
Gross profit as a percentage of sales

28.5
%

30.1
%

~~Gross profit margin decreased to 28.5%~~Net sales in the ~~nine months ended September 30, 2017 compared to 30.1%~~Distribution Segment increased $12.3 million or 6.8% for the nine months ended September 30, ~~2016,~~2023 compared to the nine months ended September 30, 2022, primarily due to higher ~~raw~~pricing of $6.4 million and $23.1 million of incremental sales from the acquisition of Mohawk on May 31, 2022. The increase in net sales was partially offset by lower volume/mix of $17.2 million.

Cost of Sales & Gross Profit:


	Nine Months Ended September 30,
(dollars in thousands)	2023			2022			Change			% Change
Cost of sales	$	420,136		$	468,415		$	(48,279	)		(10.3	)%
Gross profit	$	201,854		$	218,292		$	(16,438	)		(7.5	)%
Gross profit as a percentage of sales		32.5	%		31.8	%

Gross profit decreased $16.4 million, or 7.5%, for the nine months ended September 30, 2023 compared to the nine months ended September 30, 2022, due to lower volume/mix as described under Net Sales above and increased labor and productivity costs. Gross margin expanded to 32.5% for the nine months ended September 30, 2023 compared with 31.8% for the nine months ended September 30, 2022 as the benefits from lower material costs and ~~operating inefficiencies, as well as restructuring costs~~the acquisition of ~~$7.0 million within the Material Handling Segment. These impacts were~~Mohawk on May 31, 2022 both partially offset ~~by higher pricing and a favorable sales mix.~~the decrease in gross profit for the nine months ended September 30, 2023.

Selling, General and Administrative Expenses:

	Nine Months Ended September 30,
(dollars in millions)	2017			2016			Change		% Change
												Nine Months Ended September 30,
(dollars in thousands)												2023			2022			Change			% Change
SG&A expenses	$	105.6		$	103.1		$	2.5		2	%	$	148,130		$	152,066		$	(3,936	)		(2.6	)%
SG&A expenses as a percentage of sales		24.7	%		24.1	%							23.8	%		22.1	%

Selling, general and administrative (“SG&A”) expenses for the nine months ended September 30, 2023 were $148.1 million, a decrease of $3.9 million or 2.6% compared to the same period in the prior year. Decreases in SG&A expenses for the nine months ended September 30, ~~2017~~2023 were ~~$105.6~~primarily due to $8.2 million ~~an increase~~ of ~~$2.5~~lower incentive compensation, $2.6 million ~~or 2% compared~~of lower variable selling expenses and $2.3 million of lower facility costs. The decrease to ~~the same period in the prior year.~~ SG&A expenses ~~in the first nine months of 2017 were primarily impacted by higher severance, compensation and benefits of approximately $1.2 million and higher legal and professional fees of $1.3 million.~~

~~Impairment Charges:~~

~~During~~for the nine months ended September 30, ~~2017, the Company recorded an impairment charge of $0.5 million related to assets held for sale at its Scarborough, Ontario, Canada location, as discussed in Note 2.~~

~~The Company recorded $9.9~~2023 was partially offset by $5.0 million of ~~non-cash impairment charges,~~incremental SG&A from the acquisition of Mohawk on May 31, 2022, $1.9 million of higher salaries and benefits and $2.3 million of higher legal and other professional fees, primarily related to ~~its Plasticos Novel do Nordeste S.A. (“Novel”) reporting unit during~~a success fees payable in conjunction with the favorable patent trial result, offset by insurance recoveries, as described in Note 10. Environmental matters, as described in Note 10 resulted in a net $2.2 million expense for the nine months ended September 30, ~~2016, as discussed in Note 2.~~

~~Restructuring:~~

~~As further discussed in Note 4, the Company initiated a restructuring plan in the first quarter of 2017~~2023, which compared to ~~improve the Company’s organizational structure and operational efficiency within the Material Handling Segment. The Company has incurred a total of $7.1~~$2.8 million of ~~restructuring costs in connection with the Plan during~~charges for the nine months ended September 30, 2017, with additional costs under the Plan of approximately $0.8 million expected through the end of 2017. The Company also recorded $4.1 million in gains on sales of assets in the nine months ended September 30, 2017 related to the closure and sale of the Bluffton, Indiana facility and certain related equipment. 2022.

Net Interest Expense:

Nine Months Ended September 30,

(dollars in millions)

2017

2016

Change

% Change

Net interest expense

$
5.5

$
6.1

$
(0.6
)

(10
)%
Outstanding borrowings, net of deferred financing costs

$
158.0

$
197.9

$
(39.9
)

(20
)%
Average borrowing rate

5.05
%

4.61
%


	Nine Months Ended September 30,
(dollars in thousands)	2023			2022			Change			% Change
Net interest expense	$	4,975		$	4,077		$	898			22.0	%
Average outstanding borrowings, net	$	96,112		$	113,812		$	(17,700	)		(15.6	)%
Weighted-average borrowing rate		6.74	%		4.55	%

Net interest expense for the nine months ended September 30, ~~2017~~2023 was ~~$5.5~~$5.0 million, an increase of $0.9 million, or 22.0%, compared to $6.1 million during the nine months ended September 30, 2016. The decrease in net interest expense is due to lower average outstanding borrowings during the nine months ended September 30, 2017 as compared to the same period in 2016, partially offset by a slightly higher borrowing rate.

~~Income Taxes:~~

Nine Months Ended September 30,

(dollars in millions)

2017

2016

Income from continuing operations before income taxes

$
14.5

$
9.2

Income tax expense

$
6.1

$
6.4

Effective tax rate

42.0
%

69.8
%

The effective income tax rate for the nine months ended September 30, 2017 was different than the Company’s effective tax rate for the same period in 2016, primarily due to losses in jurisdictions where the tax benefits are not recognized, which included the impairment charges in Brazil in 2016.

~~Financial Condition & Liquidity and Capital Resources:~~

~~Operating Activities~~

~~Cash provided by operating activities from continuing operations was $36.1~~with $4.1 million for the nine months ended September 30, ~~2017, compared to $18.6 million in the same period in 2016.~~2022. The ~~improvement~~higher net interest expense was due to ana higher weighted-average borrowing rate, partially offset by lower average outstanding borrowings for the nine months ended September 30, 2023.

Income Taxes:


	Nine Months Ended September 30,
(dollars in thousands)	2023			2022
Income before income taxes	$	48,827		$	62,842
Income tax expense	$	12,499		$	16,003
Effective tax rate		25.6	%		25.5	%

The Company’s effective tax rate was 25.6% and 25.5% for the nine months ended September 30, 2023 and 2022, respectively. The increase in the effective tax rate was driven primarily by non-deductible expenses.

Liquidity and Capital Resources:

The Company’s primary sources of liquidity are cash on hand, cash generated from operations and availability under the Loan Agreement (defined below). At September 30, 2023, the Company had $24.8 million of cash, $222.3 million available under the Loan Agreement and outstanding debt of $69.3 million, including the finance lease liability of $9.3 million. Based on this liquidity and borrowing capacity, the Company believes it is well-positioned to manage through the working capital demands and the heightened uncertainty in the current macroeconomic environment. The Company believes that cash on hand, cash flows from operations and available capacity under its Loan Agreement will be sufficient to meet expected business requirements including capital expenditures, dividends, working capital, debt service, and to fund future growth, including selective acquisitions.

Operating Activities

Net cash provided by ~~working capital of $22.5 million, which resulted from a swing in the cash provided by (used for) accounts payable and accrued expenses.~~

~~Investing Activities~~

~~Cash provided by investing~~operating activities ~~from continuing operations~~ was ~~$2.9~~$70.8 million for the nine months ended September 30, ~~2017~~2023, compared to $50.8 million in the same period in 2022. The increase was primarily due to lower working capital driven by decreases in accounts receivable.

Investing Activities

Net cash used ~~of $15.3~~by investing activities was $19.3 million for the nine months ended September 30, ~~2016. The~~2023 compared to cash used of $40.3 million for the same period in 2022. In 2022, the Company paid ~~a final~~$24.3 million to acquire Mohawk, before working capital ~~adjustment to the buyer of the~~ ~~Lawn and Garden business~~ ~~of approximately $4.0 million in the first quarter of 2016,~~adjustments, as ~~described~~discussed in Note ~~3. The Company~~3 and received proceeds of ~~$8.1~~$1.5 million ~~in the first nine months of 2017~~ from the sale of fixed ~~assets, a significant portion of which was derived from the sale of the Company’s Bluffton, Indiana facility and related equipment as part of the Material Handling restructuring plan.~~assets. Capital expenditures were ~~$5.1~~$19.3 million and ~~$11.5~~$17.6 million for the nine months ended September 30, ~~2017~~2023 and ~~2016,~~2022, respectively. Full year 2023 capital expenditures ~~in 2017~~ are expected to be approximately $7$25 million to $9$30 million.

Financing Activities

~~Net payments on the credit facility were $31.4~~Cash used by financing activities was $49.8 million for the nine months ended September 30, ~~2017~~2023 compared to cash used by financing activities of $7.4 million for the same period in 2022. Net repayments of the credit facility for the nine months ended September 30, 2023 were $34.0 million compared to net borrowings of ~~$4.4~~$7.0 million in the nine months ended September 30, 2022. Net proceeds from the issuance of common stock in connection with incentive stock option exercises were $1.9 million and $2.1 million for the nine months ended September 30, ~~2016.~~2023 and 2022, respectively. Cash paid for tax withholdings on vesting of stock compensation totaled $2.1 million and $0.5 million in the nine months ended September 30, 2023 and 2022 respectively, primarily due to improved vesting of performance-based awards in the current year. Fees paid for the amendment and extension of the Loan Agreement in September 2022 totaled $0.7 million. The Company also used cash to pay dividends of ~~$12.2~~$15.3 million and ~~$12.1~~$14.9 million for the nine months ended September 30, ~~2017~~2023 and ~~2016,~~2022, respectively.

Credit Sources

Total debt outstanding at September 30, 2017 was $158.0 million, net of $1.8 million of deferred financing costs, compared with $189.5 million at December 31, 2016. The Company’s Loan Agreement provides available borrowing up to $200 million, reduced for letters of credit issued. As of September 30, ~~2017,~~2023, $222.3 million was available under the Loan Agreement, after borrowings and the Company had ~~$4.4~~$5.7 million of letters of credit issued related to insurance and other financing contracts in the ordinary course of ~~business~~business. Borrowings under the Loan Agreement bear interest at the Term SOFR, RFR, EURIBOR and ~~there was $135.8~~CDOR-based borrowing rates.

At September 30, 2023, $38 million ~~available under our Loan Agreement.~~face value of Senior Unsecured Notes are outstanding. The series of notes range in face value from $11 million to $15 million, with interest rates ranging from 5.25% to 5.45%, payable semiannually. As described in Note 11, $26.0 million of the Senior Unsecured Notes mature on January 15, 2024 and $12.0 million mature on January 15, 2026.

As of September 30, ~~2017,~~2023, the Company was in compliance with all of its debt covenants. The most restrictive financial covenants for all of the Company’s debt are an interest coverage ratio (defined as earnings before interest, taxes, depreciation and amortization, as adjusted, divided by interest expense) and a leverage ratio (defined as total debt divided by earnings before interest, taxes, depreciation and amortization, as adjusted). The ratios as of and for the period ended September 30, ~~2017~~2023 are shown in the following table:

Off-Balance Sheet Arrangements

In September 2017, the Company made an offer to all holders of the $100 million Senior Unsecured Notes (“Notes”) to purchase all or a portion of the Notes prior to their maturity dates. In October 2017, one note holder accepted the offer and elected to tender $22 million in Notes. The Company ~~purchased the Notes from the holder~~does not have any off-balance sheet arrangements that have, or are reasonably expected to have, a material current or future effect on ~~October 31, 2017 and a loss on extinguishment~~its financial condition, results of ~~debt of approximately $1.9 million was recorded during the fourth quarter of 2017.~~

~~The Company believes that cash flows from~~ operations, ~~and available borrowing under its Loan Agreement will be sufficient to meet expected business requirements including~~liquidity, capital expenditures ~~dividends, working~~or capital ~~and debt service.~~resources at September 30, 2023.

Item 3. Quantitative and ~~Qualitative~~Qualitative Disclosures About Market Risk

Interest Rate Risk

The Company has certain financing arrangements that require interest payments based on floating interest ~~rates. The~~rates, and to that extent, the Company’s financial results are subject to changes in the market rate of interest. Borrowings under the Loan Agreement bear interest at the Term SOFR, RFR, EURIBOR and CDOR-based borrowing rates. At present, the Company has not entered into any interest rate swaps or other derivative instruments to fix the interest rate on any portion of its financing arrangements with floating rates. ~~Accordingly, based~~Based on current debt levels at September 30, ~~2017,~~2023, if market interest rates increase one percent, the Company’s annual variable interest expense would increase approximately ~~$0.6 million annually.~~$0.2 million.

~~Some~~Foreign Currency Exchange Risk

Certain of the Company’s subsidiaries operate in foreign countries and their financial results are subject to exchange rate movements. The Company has operations in Canada with foreign currency exposure, primarily due to U.S. dollar sales made from businesses in Canada to customers in the United ~~States (“U.S.”). These sales are denominated in U.S. dollars.~~States. The Company has a systematic program to limit its exposure to fluctuations in exchange rates related to certain assets and liabilities of its operations in Canada ~~and Brazil~~ that are denominated in U.S. dollars. The net exposure is generally ~~ranges from $2 million to $7~~less than $1 million. The foreign currency contracts and arrangements created under this program are not designated as hedged items under ASC 815, Derivatives and Hedging, and accordingly, the changes in the fair value of the foreign currency arrangements, which have been immaterial, are recorded in the ~~statements~~Condensed Consolidated Statements of ~~operations.~~Operations (Unaudited). The Company’s foreign currency arrangements are typically three months or less and are settled before the end of a reporting period. At September 30, ~~2017,~~2023, the Company had no foreign currency arrangements or contracts in place.

Commodity Price Risk

The Company uses certain ~~commodities,~~commodity raw materials, primarily plastic resins, and other commodities, such as natural gas, in its ~~manufacturing processes.~~operations. The cost of operations can be affected asby changes in the market for these commodities, ~~changes.~~particularly plastic resins. The Company currently has no derivative contracts to hedge ~~this risk; however, the~~changes in raw material pricing. The Company ~~also has no significant purchase obligations~~may from time to ~~purchase fixed quantities of such commodities in future periods.~~time enter into forward buy positions for certain utility costs, which were not material at September 30, 2023. Significant future increases in the cost of plastic resin or other adverse changes in the general economic environment could have a material adverse impact on the Company’s financial position, results of operations or cash flows.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

The Company maintains disclosure controls and procedures, as defined under Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended, that are designed to ensure that information required to be disclosed in the Company’s reports under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the ~~Commission’s~~SEC’s rules and forms and that such information is accumulated and communicated to the Company’s management, including its Chief Executive Officer and Chief Financial Officer, as appropriate, to allow for timely decisions regarding required disclosure.

The Company carries out a variety of on-going procedures, under the supervision and with the participation of the Company’s management, including the Company’s Chief Executive Officer and Chief Financial Officer, to evaluate the effectiveness of the design and operation of the Company’s disclosure controls and procedures. Based on the foregoing, the Company’s Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures were effective as of September 30, ~~2017.~~2023.

Changes in Internal Control Over Financial Reporting

During the nine months ended September 30, ~~2017,~~2023, there have been no changes in our internal control over financial reporting during the period covered by this report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II – Other Information

Item 1.Legal Proceedings

Certain legal proceedings in which the Company is involved are discussed in Note 10, Contingencies, in the Unaudited Condensed Consolidated Financial Statements in Part I of this report, and Part I, Item 3 of the Company's Annual Report on Form 10-K for the year ended December 31, ~~2016.~~2022. The Company’s disclosures relating to legal proceedings in Note 10, Contingencies, in the Unaudited Condensed Consolidated Financial Statements in Part I of this report are incorporated into Part II of this report by reference. The Company is a defendant in various lawsuits and a party to various other legal proceedings, in the ordinary course of business, some of which are covered in whole or in part by insurance. We believe that the outcome of these lawsuits and other proceedings will not individually or in the aggregate have a future material adverse effect on our consolidated financial position, results of operations or cash flows.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

The following table presents information regarding the Company’s stock repurchase plan during the quarter ended September 30, 2023:


	Total Number of Shares Purchased		Average Price Paid per Share		Total Number of Shares Purchased as Part of the Publicly Announced Plans or Programs		Maximum number of Shares that may yet be Purchased Under the Plans or Programs (1)
7/1/2023 to 7/31/2023		—	$	—		5,547,665		2,452,335
8/1/2023 to 8/30/2023		—		—		5,547,665		2,452,335
9/1/2023 to 9/30/2023		—		—		5,547,665		2,452,335

(1)

On July 11, 2013, the Board authorized the repurchase of up to 5.0 million shares of ~~its~~the Company’s common stock. This authorization was in addition to the 2011 Board authorized repurchase of up to 5.0 million shares. The Company completed the repurchase of approximately 2.0 million shares in 2011 pursuant to Rule 10b5-1 plans, which were adopted pursuant to the 2011 authorized share repurchase. ~~The Company has repurchased a total~~This program does not have an expiration date

Item 5. Other Information

Securities Trading Plans of ~~5,547,665 shares of its common stock under this program~~Directors and ~~as of September 30, 2017, 2,452,335 shares of common stock remain available for repurchase under~~Executive Officers

During the ~~Board authorization. The Company did not repurchase any shares of its common stock during the~~ three ~~or nine~~ months ended September 30, ~~2017.~~2023, none of our directors or executive officers adopted or terminated any contract, instruction or written plan for the purchase or sale of Company securities that was intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) or any “non-Rule 10b5-1 trading arrangement.”

Item 6. Exhibits

��


~~2(a)~~3.1	~~Asset Purchase Agreement, dated as of May 30, 2014, among Scepter Corporation, SHI Properties Inc., CA Acquisition Inc., and~~ Myers Industries, Inc. Reference is made to Exhibit 2.1 to Form 8-K filed with the Commission on July 7, 2014.**
~~2(b)~~	Unit Purchase Agreement, dated as of May 30, 2014, among Eco One Holdings, Inc., Crown US Acquisition Company, and Myers Industries, Inc. Reference is made to Exhibit 2.2 to Form 8-K filed with the Commission on July 7, 2014.**
~~2(c)~~	Indemnification Agreement, dated as of May 30, 2014 among Scepter Corporation, SHI Properties Inc., Eco One Holdings, Inc., Crown US Acquisition Company, and CA Acquisition Inc. Reference is made to Exhibit 2.3 to Form 8-K filed with the Commission on July 7, 2014.**
~~2(d)~~	First Amendment to the Asset Purchase Agreement, Unit Purchase Agreement and Indemnification Agreement, dated as of July 2, 2014, among Scepter Corporation, SHI Properties Inc., CA Acquisition Inc., Eco One Holdings, Inc., Crown US Acquisition Company, and Myers Industries, Inc. Reference is made to Exhibit 2.4 to Form 8-K filed with the Commission on July 7, 2014.**
~~2(e)~~	Amended and Restated Asset Purchase Agreement, dated as of February 17, 2015, among Myers Industries, Inc., MYE Canada Operations, Inc., and the HC Companies, Inc. Reference is made to Exhibit 2.1 to Form 8-K filed with the Commission on February 18, 2015.**
~~3(a)~~	~~Myers Industries, Inc.~~Second Amended and Restated Articles of Incorporation. Reference is made to Exhibit ~~3(a)~~3.1 to Form ~~10-K~~8-K filed with the ~~Commission~~SEC on ~~March 16, 2005.~~April 29, 2021.
~~3(b)~~3.2	Myers Industries, Inc. Amended and Restated Code of Regulations. Reference is made to Exhibit ~~3.1~~3.2 to Form 8-K filed with the ~~Commission~~SEC on April ~~12, 2013.~~29, 2021.
~~31.1~~10.1*	Form of Non-Competition, Non-Solicitation and Confidentiality Agreement for Executive Officers.*
31.1	Certification of ~~R. David Banyard,~~Michael P. McGaugh, President and Chief Executive Officer of Myers Industries, Inc., pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification of ~~Matteo Anversa,~~Grant E. Fitz, Executive Vice President and Chief Financial Officer ~~and Corporate Secretary~~ of Myers Industries, Inc., pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Certifications of ~~R. David Banyard,~~Michael P. McGaugh, President and Chief Executive Officer, and ~~Matteo Anversa,~~Grant E. Fitz, Executive Vice President and Chief Financial Officer, ~~and Corporate Secretary,~~ of Myers Industries, Inc., pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101	The following financial information from Myers Industries, Inc. Quarterly Report on Form 10-Q for the quarterly period ended September 30, ~~2017,~~2023, formatted in inline XBRL includes: (i) Condensed Consolidated Statements of Operations, (ii) Condensed Consolidated Statements of Comprehensive Income (Loss), (iii) Condensed Consolidated Statements of Financial Position, (iv) Condensed Consolidated ~~Statement~~Statements of Shareholders' Equity, (v) Condensed Consolidated Statements of Cash Flows and (vi) the Notes to Condensed Consolidated Financial Statements.

*104	Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101).
*	Indicates executive compensation plan or ~~arrangement.~~arrangement

**	Pursuant to Item 601(b)(2) of Regulation S-K, certain exhibits and schedules have been omitted from this filing. The registrant agrees to furnish the Commission on a supplemental basis a copy of any omitted exhibit or schedule.

~~SIGNATURES~~

SIGNATURE

Pursuant to the requirements ~~of Section 13 or 15(d)~~ of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


	MYERS INDUSTRIES, INC.
~~November 7, 2017~~	~~/s/ Matteo Anversa~~
November 1, 2023	~~Matteo Anversa~~/s/ Grant E. Fitz
	~~Executive Vice President~~ ~~Chief Financial Officer and Corporate Secretary~~ ~~(Principal Financial Officer)~~Grant E. Fitz
~~November 7, 2017~~	~~/s/ Kevin L. Brackman~~
	~~Kevin L. Brackman~~
	Executive Vice President and Chief Financial Officer ~~Chief Accounting Officer~~ (Principal Financial and Accounting Officer)


Ohio	34-0778636
(State or other jurisdiction of	(IRS Employer Identification
incorporation or organization)	Number)

1293 South Main Street
Akron, Ohio	44301
(Address of principal executive offices)	(Zip code)


Title of Each Class	Trading Symbol	Name of Exchange on Which Registered
Common Stock, without par value	MYE	New York Stock Exchange


Large accelerated filer	☐	Accelerated filer	☑
Non-Accelerated filer	☐ ~~(Do not check if a smaller reporting company)~~	Smaller reporting company	☐
		Emerging growth company	☐

~~Class~~		~~Outstanding as of October 31, 2017~~
~~Common Stock, without par value~~		~~30,438,041 shares~~

Part I — Financial Information	1

Item 1. Financial Statements	1

Condensed Consolidated Statements of Operations (Unaudited)	1

Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited)	2

Condensed Consolidated Statements of Financial Position (Unaudited)	3

Condensed Consolidated ~~Statement~~Statements of Shareholders’ Equity (Unaudited)	54

Condensed Consolidated Statements of Cash Flows (Unaudited)	6

Notes to Unaudited Condensed Consolidated Financial Statements	7

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	1820

Item 3. Quantitative and Qualitative Disclosures About Market Risk	2326

Item 4. Controls and Procedures	2426

Part II — Other Information	2527

Item 1. Legal Proceedings	2527

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	2527

Item ~~6. Exhibits~~5. Other Information	2527

~~Signatures~~Item 6. Exhibits	2628

~~Exhibit 31.1~~Signature	29
~~Exhibit 31.2~~
Exhibit ~~32.1~~31.1
Exhibit ~~101~~31.2
Exhibit 32.1
Exhibit 101



☑
☑	Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934



☐
☐	Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934


	Quarter Ended September 30, 2023
	Common Shares		Additional Paid-In Capital		Accumulated Other Comprehensive Income (Loss)			Retained Deficit			Total Shareholders' Equity
Balance at July 1, 2023	$	22,572	$	319,553	$	(16,986	)	$	(50,717	)	$	274,422
Net income		—		—		—			12,747			12,747
Foreign currency translation adjustment		—		—		(948	)		—			(948	)
Shares issued under incentive plans, net of shares withheld for tax		18		339		—			—			357
Stock compensation expense		—		686		—			—			686
Declared dividends - $0.135 per share		—		—		—			(5,043	)		(5,043	)
Balance at September 30, 2023	$	22,590	$	320,578	$	(17,934	)	$	(43,013	)	$	282,221

	Quarter Ended September 30, 2022
	Common Shares		Additional Paid-In Capital		Accumulated Other Comprehensive Income (Loss)			Retained Deficit			Total Shareholders' Equity
Balance at July 1, 2022	$	22,304	$	311,939	$	(16,010	)	$	(80,975	)	$	237,258
Net income		—		—		—			13,671			13,671
Foreign currency translation adjustment		—		—		(2,376	)		—			(2,376	)
Shares issued under incentive plans, net of shares withheld for tax		17		101		—			—			118
Stock compensation expense		—		1,308		—			—			1,308
Declared dividends - $0.135 per share		—		—		—			(5,002	)		(5,002	)
Balance at September 30, 2022	$	22,321	$	313,348	$	(18,386	)	$	(72,306	)	$	244,977

	Common Shares		Additional Paid-In Capital		Accumulated Other Comprehensive Income (Loss)			Retained Deficit			Total Shareholders' Equity
Balance at January 1, 2017	$	18,234	$	202,033	$	(34,174	)	$	(93,060	)	$	93,033
Net income		—		—		—			8,364			8,364
Foreign currency translation adjustment		—		—		3,491			—			3,491
Shares issued under incentive plans, net of shares withheld for tax		184		2,067		—			—			2,251
Stock compensation expense		—		3,018		—			—			3,018
Declared dividends - $0.41 per share		—		—		—			(12,425	)		(12,425	)
Balance at September 30, 2017	$	18,418	$	207,118	$	(30,683	)	$	(97,121	)	$	97,732


	Nine Months Ended September 30, 2023
	Common Shares		Additional Paid-In Capital			Accumulated Other Comprehensive Income (Loss)			Retained Deficit			Total Shareholders' Equity
Balance at January 1, 2023	$	22,332	$	315,865		$	(17,793	)	$	(63,977	)	$	256,427
Net income		—		—			—			36,328			36,328
Foreign currency translation adjustment		—		—			(141	)		—			(141	)
Shares issued under incentive plans, net of shares withheld for tax		258		(365	)		—			—			(107	)
Stock compensation expense		—		5,078			—			—			5,078
Declared dividends - $0.405 per share		—		—			—			(15,364	)		(15,364	)
Balance at September 30, 2023	$	22,590	$	320,578		$	(17,934	)	$	(43,013	)	$	282,221

	Nine Months Ended September 30, 2022
	Common Shares		Additional Paid-In Capital			Accumulated Other Comprehensive Income (Loss)			Retained Deficit			Total Shareholders' Equity
Balance at January 1, 2022	$	22,172	$	306,720		$	(15,401	)	$	(104,166	)	$	209,325
Net income		—		—			—			46,839			46,839
Foreign currency translation adjustment		—		—			(2,985	)		—			(2,985	)
Shares issued under incentive plans, net of shares withheld for tax		149		1,460			—			—			1,609
Stock compensation expense		—		5,168			—			—			5,168
Declared dividends - $0.405 per share		—		—			—			(14,979	)		(14,979	)
Balance at September 30, 2022	$	22,321	$	313,348		$	(18,386	)	$	(72,306	)	$	244,977

	Employee Reduction			Accelerated Depreciation			Other Exit Costs			Total
Balance at January 1, 2017	$	—		$	—		$	—		$	—
Charges to expense		2,868			2,018			2,246			7,132
Cash payments		(773	)		—			(1,929	)		(2,702	)
Non-cash utilization		—			(2,018	)		—			(2,018	)
Balance at September 30, 2017	$	2,095		$	—		$	317		$	2,412

Income (loss) from continuing operations before income taxes
Material Handling	$	10,325		$	4,378		$	29,839		$	26,152
Distribution		3,179			3,301			7,742			9,803
Corporate		(6,393	)		(4,693	)		(17,532	)		(20,674	)
Total operating income		7,111			2,986			20,049			15,281
Interest expense, net		(1,785	)		(2,015	)		(5,545	)		(6,087	)
Income from continuing operations before income taxes	$	5,326		$	971		$	14,504		$	9,194

Required Level

Actual Level

Interest Coverage Ratio

3.00 to 1(minimum)

~~7.03~~15.72

Leverage Ratio

~~3.50~~3.25 to 1 (maximum)

~~2.58~~0.71