Myers Industries, Inc.

Good morning and welcome to the Meyers Industries first quarter 2023 earnings conference call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your telephone keypad. To withdraw your question, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to Monica Vinay. Please go ahead.

Thank you. Good morning and thank you for joining us. I'm Monica Vinay, Interim Chief Financial Officer and Vice President of Investor Relations and Treasurer at Meyers Industries. Joining me today is Mike McGaugh, our President and Chief Executive Officer. Earlier this morning, we issued a press release outlining the financial results for the first quarter of 2023. We have also posted a PowerPoint presentation to accompany today's prepared remarks. If you've not yet received a copy of either the release or the PowerPoint, you can access them on our website at www.myersindustries.com under the Investor Relations tab. This call is also being webcasted on our website and will be archived along with the transcript of the call shortly after this event. Please turn to slide two of that PowerPoint presentation for our Safe Harbor disclosures. I would like to remind you that we may make some forward-looking statements during this call. These comments are made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. Such statements are based on management's current expectations and involve risks, uncertainties, and other factors which may cause results to differ materially from those expressed or implied in these statements. Also, please be advised that certain non-GAAP financial measures, such as adjusted gross profit, adjusted operating income, adjusted EBITDA, and adjusted EPS may be discussed on this call. Further information concerning these risks, uncertainties, and other factors is set forth in the company's periodic SEC filings and may be found in the company's 10-K and 10-Q filings. Now please turn to slide three of our presentation. I'm pleased to turn the call over to Mike McGough.

Thank you, Monica. Good morning, everyone, and welcome to our first quarter 2023 earnings call. I'm pleased to report that our self-help initiatives and operational excellence efforts continue to deliver results. We expanded our adjusted gross margin for the fifth consecutive quarter, and we delivered significant free cash flow, and I'm proud of these accomplishments. I'd like to specifically call out our injection molding businesses that continue to deliver record levels of profitability. Their great results were due to strong demand and also ongoing improvements in commercial and operational excellence. The injection molding teams are hitting on all cylinders. Within the remainder of the material handling segment, however, we experienced mixed in-market demand, which ultimately led to a marginal decline in revenues. Over on the distribution side, sales were higher primarily due to the Mohawk acquisition last summer. Now I'll provide a brief financial overview of the quarter before Monica outlines our results in greater detail. We achieved net sales of $215.7 million, a decrease of 4.3%. From a market perspective, we saw strong demand within our food and beverage end market, mixed demand within our industrial end market, but we continue to see reduced demand in the recreational vehicle, marine, and consumer end markets where inflationary trends are impacting overall consumption and performance. To help offset demand headwinds, we have been laser focused on further diversifying our customer base and increasing our concentration into higher growth in markets. We are pursuing growth and we are winning new business in the auto aftermarket, industrial, and food and beverage end markets. Examples include a recent $1.5 million new business win providing reusable buckhorn boxes to an electric vehicle manufacturer, a $4 million new business win to an industrial reusable container supplier, and a multimillion-dollar large auto aftermarket customer win. We also continue to make progress testing and qualifying our SEPTA cases for military light-weighting projects around the world. this new business development project has the potential to be a large economic success in the near future. Now, back to our first quarter results. Adjusted gross profit was $71.2 million of 33% of sales, a decrease of 1.6% on a dollar basis, but an increase of 90 basis points on a percentage basis. The increase in gross margin is a result of the self-help initiatives we implemented in Horizon 1 and our actions on implementing our Meyers Business System, a business system that crystallizes our best practices and helps ensure they are sustainable and repeatable across the company. You'll notice that SG&A is higher in the first quarter compared to the same period last year. Some of that is due to the Mohawk acquisition, and some is due to a success fee paid on a legal win this quarter. We were pleased with the outcome and it was a significant win relating to a patent case in the material handling segment. Overall, the first quarter of 2023 was solid. We still have some work to do growing and optimizing our distribution segment. As you recall, we acquired Mohawk last summer and we continue to integrate the business, grow the business and take costs out. We're expanding our geographic coverage and improving our service level to our customers. To provide these improved service levels, we need to grow our margins, and to do this, we have several price increases underway and expect to see positive margin movement over the next quarters. On the material handling side, we continue to take costs out of our operations, and we continue to combine parts of the commercial organizations to lower costs and improve our sales effectiveness across all of the material handling business units. On the strategic front, we continue to transform the company, nearly doubling the size of Meyers in the last three years. Over this period, we've built lasting competencies in pricing, in purchasing, and in sales and operations planning. We've executed bolt-on acquisitions and improved both our acquisition and integration capabilities. Strategically, we are right where we want to be. Our capabilities are strong and our balance sheet is strong. We are well positioned to pursue the larger and more impactful acquisitions that we've outlined as a part of Horizon 2. At Meyers, morale is high. Our employees are fired up about a once-in-a-lifetime opportunity to really build a special company. It's an exciting time to be here at Meyers Industries. Now, I'll turn the call over to Monica for a review of our first quarter financial results and full year 2023 outlook. Monica?