MYE 10-K & 10-Q changes, risk factors and insider trading

There is significant uncertainty about the future of trade relationships around the world, including potentialthe impact of changes to trade laws and regulations, trade policies, and tariffs. In February 2025, theThe United States has proposed and imposed newextensive tariffs and increased tariffs on Mexicoproducts sourced from many countries. Trade tensions continue to be high, and Canadawe expect that uncertainty regarding tariffs will remain fluid and has threatened member countries of the European Union with tariffs. The tariffs imposed on Mexicoevolving and Canadatherefore are currently suspended while negotiations take place for a long-term agreement. Wewe cannot predict what additional actions may ultimately be taken by the U.S. or other governments with respect to tariffs or trade relations, what products may be subject to such actions (including subject to U.S. export control restrictions), or what actions may be taken by the other countries in retaliation.

In addition to relying on patent and trademark rights, we rely on unpatented proprietary know-how and trade secrets and employ various methods, including confidentiality agreements with employeesemployees, consultants and consultants,other business partners, to protect our know-how and trade secrets. However, these methods and our patents and trademarks may not afford complete protection and there can be no assurance that others will not independently develop the know-how and trade secrets or develop better production methods than us. Further, we may not be able to deter current and former employees, contractors and other parties from breaching confidentiality agreements and misappropriating proprietary information and it is possible that third parties may copy or otherwise obtain and use our information and proprietary technology without authorization or otherwise infringe on our intellectual property rights. Additionally, in the future we may license patents, trademarks, trade secrets and similar proprietary rights to third parties. While we attempt to ensure that our intellectual property and similar proprietary rights are protected when entering into business relationships, third parties may take actions that could materially and adversely affect our rights or the value of our intellectual property, similar proprietary rights or reputation. In the future, we may also rely on litigation to enforce our intellectual property rights and contractual rights and, if not successful, we may not be able to protect the value of our intellectual property. We have been, and may in the future be, subject to claims asserting the infringement of the intellectual property rights of third parties seeking damages, the payment of royalties or licensing fees and/or injunctions against the sale of our products. Any litigation could be protracted and costly and could have a material adverse effect on our business and results of operations regardless of its outcome.

Impairment in the carrying value of goodwill and/or intangible assets could have a material adverse effect on our results of operations and financial position.

We perform reviews of goodwill and intangible assets on an annual basis, or more frequently if indicators present a possible impairment. We test goodwill at the reporting unit level using a combination of a discounted cash flow analysis and market-based approach. If the carrying value of a reporting unit exceeds its fair value, the related goodwill would be considered impaired and also could indicate impairment of other assets. We test intangible assets at the asset group level estimating future cash flows over the expected remaining life of the assets, on an undiscounted basis. If we were to have a significant goodwill and/or intangible asset impairment it could impact our results of operations as well as our net worth. See Note 4 to the consolidated financial statements for additional details concerning goodwill.goodwill and intangible assets.

We currently operate manufacturing, sales and service facilities outside of the United States, particularly in Canada, Central AmericaCanada and the United Kingdom.Europe. For the year ended December 31, 2024,2025, international net sales accounted for approximately 6%7% of our total net sales. Accordingly, we are subject to risks associated with operations in foreign countries, including:

We rely on information technology systems to process, transmit and store electronic information and manage and operate our business. Such systems are vulnerable to damage or interruption from natural disasters, power loss, telecommunication failures, computer viruses, computer denial-of-service attacks, unauthorized intrusion, and other events, any of which could interrupt our business operations. The use of artificial intelligence, authorized or unauthorized, could increase the risk of unauthorized disclosure of our confidential or proprietary information. While we have implemented security measures designed to prevent and mitigate the risk of breaches, information security risks have generally increased in recent years because of the proliferation of new technologies and the increased sophistication and activities of perpetrators of cybersecurity attacks. A failure in or a breach of security in our information technology systems could expose us, our customers and our suppliers to risks of misuse of confidential information, manipulation and destruction of data, production downtimes and operations disruptions, which in turn could negatively affect our reputation, competitive position, business, results of operations or cash flows. Furthermore, because the techniques used to carry out cybersecurity attacks change frequently and in many instances are not recognized until after they are used against a target, we may be unable to anticipate these changes or implement adequate preventative measures.

As more fully described in Note 9 to the consolidated financial statements, weour aresubsidiary, Buckhorn, is a potentially responsible party (“PRP”) in an environmental proceeding and remediation matter in which substantial amounts may be involved. It is possible that adjustments to reserved expenses will be necessary as new information is obtained, including after finalization and EPA approval of the work plan for the remedial investigation and feasibility study (“RI/FS”). Estimates of Buckhorn’s environmental liabilities are based on current facts, laws, regulations and technology. Estimates of Buckhorn’s environmental liabilities are further subject to uncertainties regarding 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. At this time, we have not accrued for such remediation costs as we are unable to estimate the liability at this time. Additionally, we are party to a consent decree regarding another location pursuant to which we are required to contribute to the costs of the remediation project.

Major public health issues, including pandemics such as the COVID-19 pandemic, have adversely affected, and could in the future materially adversely affect, the Company due to their impact on the global economy and demand for consumer products. We may also incur costs or experience further disruption to comply with new or changing regulations in response to such issues.

The current economic environment includes heightened risks stemming from the broader economic effects of the international geopolitical climate, including rapidly changing regulations, the ongoing warinstability in Ukraine,geographies impacted by political events, trade disputes and continued conflicts along Israel's borderwar which has increased volatility in global commodity markets, including oil (a component of many plastic resins), energy and agricultural commodities. While the Company has limited foreign operations and sources much of its raw materials domestically uncertainty about, or a decline in, global or regional economic conditions can have a significant impact on macroeconomic conditions, including slow growth or recession, inflation, tighter credit, higher interest rates, and currency fluctuations, all of which can adversely impact consumer spending and materially adversely affect demand for the Company’s products that may result in a material adverse effect on our business, financial condition, results of operations, or cash flows.

The Company’s results of operations for the year ended December 31, 20242025 compared with the year ended December 31, 20232024 are discussed below. The current economic environment includes heightened risks from tariffs, 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 rapidly changing regulations, the ongoing war in Ukraine, and continued conflicts along Israel's borderregulations which has increased volatility in global commodity markets, including oil (a component of many plastic resins), energy and agricultural commodities. Some of our businesses have been and may continue to be affected by these broader economic effects, including customer demand for our products, supply chain disruptions, labor availabilityavailability, tariffs and inflation. 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.

Net sales for the year ended December 31, 20242025 were $836.3$825.7 million, ana increasedecrease of $23.2$10.5 million or 2.9%1.3% compared to the prior year. Net sales increaseddecreased due to $102.7lower pricing of $14.5 million, lower volume of $1.6 million and the effect of unfavorable currency translation of $0.8 million. The decrease in net sales was partially offset by $6.4 million of incremental sales in the Material Handling Segment from the acquisition of Signature on February 8, 2024. Signature's annual sales were approximately $110 million at the time of the acquisition. The increase in net sales was partially offset by lower volume of $60.2 million, lower pricing of $18.9 million and the effect of unfavorable currency translation of $0.4 million.

Net sales in the Material Handling Segment increased $66.4$0.5 million or 12.0%0.1% for the year ended December 31, 20242025 compared to the prior year. Net sales increased due to $102.7$6.4 million of incremental sales from the acquisition of Signature on February 8, 2024,2024 and higher volume of $8.7 million, partially offset by lower volume of $22.0 million, lower pricing of $13.9$13.8 million and the effect of unfavorable currency translation of $0.4$0.8 million.

Gross profit increased $11.7$5.2 million, or 4.5%,1.9%, for the year ended December 31, 20242025 compared to the prior year due to the benefits of the acquisition of Signature on February 8, 2024, favorable cost productivity, lower material costs and favorable mix, partially offset by lower volume and pricing as described under Net Sales above, the impact from acquisition-related inventory step-up amortization of $4.5 million, higher costs of restructuring and unfavorable cost productivity.above. Gross margin was 32.4%33.4% for the year ended December 31, 20242025 compared to 31.9%32.4% for the same period in 2023.2024.

Net interest expense for the year ended December 31, 20242025 was $30.9$29.4 million compared to $6.3$30.9 million during 2023.2024. The higherlower net interest expense was due to a lower weighted-average borrowing rate in the current year, partially offset by higher average outstanding borrowings as a result of the acquisition of Signature, which was funded through an amendment and restatement of Myers' existing loan agreement discussed below, and a higher weighted-average borrowing rate in the current year.below.

The Company's effective tax rate was 46.8%22.6% for the year ended December 31, 20242025 compared to 26.0%46.8% in the prior year. The increasedecrease in the effective tax rate is driven by fixed non-deductible expenses, including expenses related to the Signature acquisition,acquisition in the prior year on lower income before income taxes plus the tax effect of prior year impairment charges.

The Company’s primary sources of liquidity are cash on hand, cash generated from operations and availability under the Amended Loan Agreement (defined below). At December 31, 2024,2025, the Company had $32.2$45.1 million of cash, $244.7 million available under the Amended Loan Agreement and outstanding debt of $383.6$353.8 million, including the finance lease liability of $8.6$8.0 million. At December 31, 2024,2025, our primary contractual obligations relate to our debt and lease arrangements as described in Notes 10 and 13 to the consolidated financial statements. Based on this liquidity and borrowing capacity, the Company believes it is well-positioned to manage through the working capital demands and heightened uncertainty in the current macroeconomic environment. The Company believes that cash on hand, cash flows from operations and available capacity under its Amended Loan Agreement will be sufficient to meet expected business requirements including capital expenditures, dividends, working capital, debt service, and to fund future growth.

Cash provided by operating activities was $79.3$86.8 million and $86.2$79.3 million for the years ended December 31, 20242025 and 2023,2024, respectively. Cash generated from working capital was $9.6$5.0 million for the year ended December 31, 2024,2025, compared to cash generated from working capital of $5.7$9.6 million in the prior year, primarily due to reductionsincreases in accounts receivable and inventory,receivable, partly offset by reductions in accounts payable.inventory.

On February 8, 2024, the Company entered into Amendment No. 1 to the Seventh Amended and Restated Loan Agreement (“Amendment No. 1”), which amended the Seventh Amended and Restated Loan Agreement (the "Loan Agreement” – see also Note 10) dated September 29, 2022 (collectively, the “Amended Loan Agreement”). Amendment No. 1, among other things, permitted the acquisition of Signature Systems and provided a new 5-year $400 million term loan facility (“Term Loan A”). Term Loan A will amortize in eight quarterly installment payments of $5 million beginning June 30, 2024, quarterly installment payments of $10 million thereafter, and any remaining balance due upon maturity. Term Loan A may be voluntarily prepaid at any time, in whole or in part, without penalty or premium, however, all amounts repaid or prepaid in respect of Term Loan A may not be reborrowed. In December 2024, the Company voluntarily prepaid $3 million of the Term Loan A.

Goodwill – The Company performs its goodwill impairment test annually as of October 1 and in the interim only when impairment indicators are present. A quantitative assessment requires the Company to estimate the fair value of the reporting unit (Level 3 measurement), which the Company does using a combination of a discounted cash flow analysis and market-based approach. Estimating fair value requires the exercise of significant judgment, including judgment about appropriate discount rates, long-term growth rates and the amount and timing of expected future cash flows. The cash flows employed in the discounted cash flow analyses are based on the most recent budget and long-term forecast. The discount rates used in the discounted cash flow analyses are intended to reflect the risks inherent in the future cash flows of the respective reporting units. The market-based approach estimates fair value using market multiples of various financial measures compared to a set of comparable public companies and recent comparable transactions. The fair value of the reporting unit is then compared to the carrying value, and any excess carrying value of the reporting unit above the fair value would indicate impairment. See disclosure of goodwill in Note 4 to the consolidated financial statements included in Item 8 of this Annual Report on Form 10-K.

The Company’s results of operations for the quarter and six months ended MarchJune 31,30, 2026 are discussed below. The current economic environment includes heightened risks from tariffs, 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 rapidly changing regulations which has increased volatility in global commodity markets, including oil (a component of many plastic resins), energy and agricultural commodities. Some of our businesses have been and may continue to be affected by these broader economic effects, including customer demand for our products, supply chain disruptions, labor availability, tariffs and inflation. 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.

The following discussion is of our consolidated results of operations. As described in Note 1, effective January 1, 2026, the Company changed its method of accounting for the classification of shipping and handling costs. Under the new method of accounting, the Company includes shipping and handling costs in Cost of sales, whereas previously, these costs were included in operating costs and expenses within Selling, general and administrative for internal costs and Freight out for external costs. This change has been applied retrospectively to all periods presented in the tabletables below.

Gross profit increased $6.3$10.4 million, or 12.6%,20.4%, for the quarter ended MarchJune 31,30, 2026 compared to the quarter ended MarchJune 31,30, 2025, due to higher volume, favorable mix, lower material costsvolume and favorable cost productivity, partially offset by lower pricing as described under Net Sales above.above, in addition to favorable mix and cost productivity, partially offset by higher material costs. Gross margin was 34.4%34.3% for the quarter ended MarchJune 31,30, 2026 compared with 31.1%31.3% for the quarter ended MarchJune 31,30, 2025.

Selling, general and administrative (“SG&A”) expenses for the quarter ended MarchJune 31,30, 2026 were $28.0$26.6 million, a decrease of $1.3$0.8 million or 4.4%2.9% compared to the same period in the prior year. Decreases in SG&A expenses for the quarter ended MarchJune 31,30, 2026 were primarily due to $0.9$0.5 million of lower salaries and benefits, $0.6$0.1 million of lower legal and professional fees, $0.1and a $2.0 million ofnon-income lowertax incentivereserve compensationrelease andrelated $1.1to millionthe ofSignature lower restructuring costs as described in Note 4,acquisition, partially offset by $1.0 million of higher variableincentive selling expenses. Environmental matters, as described in Note 10 resulted in a netcompensation, $0.4 million of chargeshigher forcommissions, the$0.3 quartermillion endedof Marchhigher 31,variable 2026.selling expenses and $0.1 million of higher facilities costs.

Depreciation and amortization, exclusive of amounts within Cost of sales, decreased $0.1 million to $3.7 million for the quarter ended MarchJune 31,30, 2026 as compared to $3.8 million for the quarter ended MarchJune 31,30, 2025. The decrease was primarily related to asset disposals in the prior year.

(Gain) loss on disposal of fixed assets was not significant during both the quarter ended MarchJune 31,30, 2026 and MarchJune 31,30, 2025.

Net interest expense for the quarter ended MarchJune 31,30, 2026 was $6.7$6.3 million, a decrease of $0.7$1.1 million, or 9.4%,14.9%, compared with $7.4 million for the quarter ended MarchJune 31,30, 2025. The lower net interest expense was due to lower average outstanding borrowings, partially offset by a higher weighted-average borrowing rateborrowings for the quarter ended MarchJune 31,30, 2026.

The Company’s effective tax rate was 24.0%24.7% and 26.8%22.9% for the quarter ended MarchJune 31,30, 2026 and 2025, respectively. The decreaseincrease in the effective tax rate is driven by highera fixednon-recurring non-deductibleprior expensesyear inbenefit related to the priortermination year.of the Company's pension plan.

LossIncome from discontinued operations, net of income taxes was $15.6$1.3 million and $0.4$0.1 million for the quarter ended MarchJune 31,30, 2026 and 2025, respectively. The higher lossincome from discontinued operations, net of income taxes, in the current year was mainly due to impairmentfavorable chargesmix, ofprice, $19.5cost millionproductivity ($14.8and million,lower overall SG&A, partially offset by lower net of tax) recognized on the classification of assets held for sale, as more fully described in Note 3 and $1.7 million of costs related to the sales process.sales.

The Company’s primary sources of liquidity are cash on hand, cash generated from operations and availability under the Amended Loan Agreement (defined below). At MarchJune 31,30, 2026, the Company had $44.6$47.6 million of cash, $244.7 million available under the Amended Loan Agreement and outstanding debt of $339.2$319.6 million, including the finance lease liability of $7.8$7.7 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 Amended Loan Agreement will be sufficient to meet expected business requirements including capital expenditures, dividends, working capital, debt service, and to fund future growth.

Net cash provided by operating activities from continuing operations, including intercompany cash flows, was $26.7$58.8 million for the quartersix months ended MarchJune 31,30, 2026, compared to $10.3$37.9 million in the same period in 2025. The increase was primarily due to higher net income from continuing operations in the current period and changes in working capital. InFor the firstsix quartermonths ofended June 30, 2026, accounts receivable wasand inventories were a use of $8.6$8.5 million and $9.7 million, respectively, which was more than offset by $9.9$1.4 million and $2.1$23.3 million provided by accountsprepaid payableexpenses and inventory,other current assets and accounts payable, respectively. This compares to the firstsix quartermonths ofended June 30, 2025, where accountsprepaid receivableexpenses and inventoryother current assets and inventories were uses of $20.7$4.9 million and $6.6$2.6 million, respectively, partially offset by $18.7$4.8 million and $2.3 million provided by accounts payable.receivable and accounts payable, respectively. The company views changes in working capital to be related to volume and timing. In total, cash generated from working capital was $4.4$6.4 million for the quartersix months ended MarchJune 31,30, 2026, compared to cash used for working capital of $8.2$0.5 million in the prior year to date period.

Net cash used for investing activities from continuing operations was $2.4$6.8 million for the quartersix months ended MarchJune 31,30, 2026 compared to cash used of $8.0$11.4 million for the same period in 2025. Capital expenditures were $2.8$8.4 million and $8.0$11.6 million for the quartersix months ended MarchJune 31,30, 2026 and 2025, respectively. Full year 2026 capital expenditures are expected to be approximately 3.5% of revenue.

Cash used by financing activities from continuing operations was $20.7$45.8 million for the quartersix months ended MarchJune 31,30, 2026 compared to cash provided by financing activities from continuing operationsused of $1.0$17.5 million for the same period in 2025. Net borrowings (repayments) of the Company's revolving credit facility were $0.0 million and $13.0$5.0 million for the quartersix months ended MarchJune 31,30, 2026 and 2025, respectively. The Company also made repayments of the Term Loan A totaling $15.0$35.0 million and $5.0$10.0 million for the quartersix months ended MarchJune 31,30, 2026 and 2025, respectively. Net proceeds from the issuance of common stock in connection with incentive stock option exercises were $0.3$0.6 million for both the quartersix months ended MarchJune 31,30, 2026 and 2025. Cash paid for tax withholdings on vesting of stock compensation totaled $0.7 million and $0.8$0.9 million for the quartersix months ended MarchJune 31,30, 2026 and 2025, respectively. The Company also used $1.0$1.5 million for the repurchase of its common stock, for the quarter ended MarchJune 31,30, 2025. The Company also used cash to pay dividends of $5.1$10.3 million and $5.3$10.4 million for the quartersix months ended MarchJune 31,30, 2026 and 2025, respectively.

On May 2, 2024, the Company entered into an interest rate swap agreement to mitigate the variable interest rate risk of borrowings under the Amended Loan Agreement. The swap has a beginning notional value of $200.0 million, which reduces proportionately with scheduled Term Loan A amortization payments, and has a final maturity date of January 31, 2029. At MarchJune 31,30, 2026, the remaining notional value of the Company's interest rate swap totaled $180.0$175.0 million. The swap is designated as a cash flow hedge and effectively results in a fixed rate of 4.606% plus the applicable margin for the hedged debt, as described in Notes 1 and 11.

As of MarchJune 31,30, 2026, $244.7 million was available under the Amended Loan Agreement, after borrowings and the Company had $5.3 million of letters of credit issued related to insurance and other financing contracts in the ordinary course of business. Borrowings under the Amended Loan Agreement bear interest at the Term SOFR, RFR, SONIA, EURIBOR and CORRA-based borrowing rates.

As of MarchJune 31,30, 2026, the Company was in compliance with all of its debt covenants. The most restrictive financial covenants for all of the Company’s debt are a net leverage ratio (defined as net debt divided by earnings before interest, taxes, depreciation and amortization, as adjusted) and an interest coverage ratio (defined as earnings before interest, taxes, depreciation and amortization, as adjusted, divided by interest expense). The ratios as calculated under the terms of the Amended Loan Agreement as of and for the period ended MarchJune 31,30, 2026 are shown in the following table:

The Company does not have any off-balance sheet arrangements that have, or are reasonably expected to have, a material current or future effect on its financial condition, results of operations, liquidity, capital expenditures or capital resources at MarchJune 31,30, 2026.