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| 8-K - FORM 8-K - MYERS INDUSTRIES INC | d694394d8k.htm |
 Myers
Industries, Inc. Investor Presentation
March 2014
Exhibit 99.1 |
 Forward Looking
Statements 2
Statements
in
this
presentation
concerning
the
Company’s
goals,
strategies,
and
expectations
for
business
and
financial
results
may
be
“forward-looking
statements”
within
the
meaning
of
the
Private
Securities
Litigation
Reform
Act
of
1995
and
are
based
on
current
indicators
and
expectations.
Whenever
you
read
a
statement
that
is
not
simply
a
statement
of
historical
fact
(such
as
when
we
describe
what
we
“believe,”
“expect,”
or
“anticipate”
will
occur,
and
other
similar
statements),
you
must
remember
that
our
expectations
may
not
be
correct,
even
though
we
believe
they
are
reasonable.
We
do
not
guarantee
that
the
transactions
and
events
described
will
happen
as
described
(or
that
they
will
happen
at
all).
You
should
review
this
presentation
with
the
understanding
that
actual
future
results
may
be
materially
different
from
what
we
expect.
Many
of
the
factors
that
will
determine
these
results
are
beyond
our
ability
to
control
or
predict.
You
are
cautioned
not
to
put
undue
reliance
on
any
forward-looking
statement.
We
do
not
intend,
and
undertake
no
obligation,
to
update
these
forward-looking
statements.
These
statements
involve
a
number
of
risks
and
uncertainties
that
could
cause
actual
results
to
differ
materially
from
those
expressed
or
implied
in
the
applicable
statements.
Such
risks
include:
(1) Fluctuations in product demand and market acceptance
(2) Uncertainties associated with the general economic conditions in domestic and
international markets (3) Increased competition in our markets
(4) Changes in seasonality
(5)
Difficulties
in
manufacturing
operations,
such
as
production
outages
or
maintenance
programs
(6) Raw material availability
(7)
Fluctuations
in
raw
material
costs;
fluctuations
outside
the
“normal”
range
of
industry
cycles
(8) Changes in laws and regulations and approvals and decisions of courts,
regulators, and governmental bodies
Myers Industries, Inc. encourages investors to learn more about these risk factors.
A detailed explanation of these factors is available in the Company’s
publicly filed quarterly and annual reports, which can be found online at
www.myersindustries.com and at the SEC.gov web site. |
 Strategic
Goals Strategic & Financial Goals to Drive Shareholder Value
•
Focus
on
industries
that
have
strong,
sustainable growth and profit
potential
•
Position
our
businesses
to
grow
through new products, geographic
expansion and acquisitions
•
Invest
within
our
five
business
growth platforms for value creation
•
Maintain
a
strong
and
flexible
balance sheet, providing funds for
acquisitions and returns to
shareholders
•
Optimize
Lawn
&
Garden
with
Phase
1 and Phase 2 projects
3
•
Sales
Growth
>
1.5x
GDP
•
Gross
Margin
>
29%
•
EPS
Growth
>
20%
CAGR
•
Free
Cash
Flow
>
100%
of
Net
Income
•
ROIC
>
Cost
of
Capital
•
L&G
to
return
Cost
of
Capital
in
2015
Financial Goals |
 Company at a
Glance 4
2013 Net Sales
2013 Adjusted EBIT
Material Handling
Lawn & Garden
Engineered Products
Distribution
Two core businesses; four
reporting segments:
1.
Manufacturer of polymer
products
1.
Material Handling
2.
Engineered Products
3.
Lawn and Garden
2.
Wholesale distributor
4.
Distribution
Restructuring in Process |
 Business
Segments 5 |
 Growth
Platforms 6
Platform
Segment
Growth
Recent
Acquisitions
Returnable
Packaging
Material
Handling
Drive conversions to reusable products through
further penetration of food, liquid, bulk solids and
agricultural markets.
Novel
Storage &
Safety
Products
Material
Handling
Further grow platform with acquisitions. Strengthen
competitive advantage through distribution channels.
Jamco Products
Inc.
Tire Repair
& Retread
Products
Engineered
Products
Leverage product and customer expertise to grow
niche market.
Specialty
Molding
Engineered
Products
Expand our capabilities to further grow our positions
in Marine and RV.
Tire Supply
Distribution
Distribution
Grow through market reach, innovative products and
expanded global sourcing.
Myers Tyre Supply
India Limited
We will continuously upgrade Myers’
performance through:
Disciplined Portfolio Management
and
Investment in Profitable Growth |
 Innovative
Products in 2013 7
Polymer Products
Distribution
Lawn and Garden
Material Handling
Engineered Products
Grower
Decorative
Containers
Decorative Products
for Retail
32x30 Bulk
Box (Gen II)
640-lb
CheeseBox
Novel
Beverage
Crate
AirFlexx
Bendable
Air Valve
Myers Pneumatics Line
TPMS Program Tool
Distribution
Tiltview
Product Line
Redesigned
AkroBin Lids
Rotationally-Molded
Polyethylene Marine Fuel
Tanks
Waste Water Holding
Tanks for Recreational
Vehicles |
 Full Year 2013
Highlights •
Achieved 6.4% increase in adjusted EPS
•
$1.00 compared to $0.94 in 2012
•
Generated 95% increase in free cash flow
•
$66.1 million compared to $33.8 million
•
6% of total sales in 2013 came from products, services or markets
developed in the last three years.
•
Realized $16 million in Operations Excellence savings
•
3% of Cost of Goods sold
•
2012 Novel & Jamco acquisitions performed as anticipated in 2013
and
continue to be a good strategic fit
•
Increased dividend 12.5% to $0.09 per quarter or $0.36 per year
•
Invested $8.1 million to repurchase common stock
8
•
As part of Innovation initiative more than 40 new products and services
were introduced |
  Full Year 2013
Financial Summary 9
•
Sales increased 4.3%
•
Novel and Jamco acquisitions
were the primary contributor to
the increase
•
Adjusted gross margin
expanded to 27.7% from 27.4%
•
Operations
Excellence
initiatives
drove
productivity
improvements
and
cost
savings
•
Adjusted net income increased
6.1%
•
Adjusted EPS increased 6.4%
Note: All figures except ratios and percents are $Millions
FY
FY
Highlights
2013
2012
B/(W)
Net sales
$825.2
$791.2
4.3%
Gross profit
margin -
adjusted¹
27.7%
27.4%
1.1%
SG&A
$173.7
$163.4
(6.3%)
Net income -
adjusted²
$34.1
$32.1
6.1%
Effective tax
rate
34.0%
36.7%
EPS -
adjusted²
$1.00
$0.94
6.4%
¹
See Reconciliation of Non-GAAP Measures slide 16
²
See Reconciliation of Non-GAAP Measures on slide 17 |
 Progress
Towards Financial Goals 10
See Reconciliations of Non-GAAP Measures on slides 16 & 17 for details regarding
adjusted calculations in the above chart Metric
Goal
2013
2012
Sales Growth
(1)
> 1.5x GDP
4.3%
4.7%
Adjusted Gross Margin
> 29%
27.7%
27.4%
Adjusted EPS Growth
>20% CAGR
39.3%
21.8%
Free Cash Flow
>
100% of Net Income
254%
113%
ROIC
(2)
> 10%
10%
10%
Innovation / NPD
(3)
>10% of Sales
6%
6%
Operations Excellence Savings
5% of COGS (gross)
3%
3%
(1) Using real GDP forecasted and actual growth rates, 1.5x GDP growth = 2.9% and
3.3% for 2013 and 2012 respectively. (2) ROIC = Net Operating Profit After
Tax/(Debt + Equity). (3) NPD = New Product Development calculation based on
products/services introduced within the last three years. Key Accomplishment
Metrics |
 Strong &
Flexible Balance Sheet 11
Note:
1) Net Debt-to-Capital ratio calculated as net debt/(net debt +
equity). Net Debt-to-Capital
Maintaining strong balance sheet for investments and
returning capital to shareholders |
 Solid Cash
Flow Generation 12
Notes:
1)
Free cash flow calculated as cash flow from continuing operations less capital
expenditures. $(Millions)
Free Cash Flow
Generating Free Cash Flow, Investing for the Future and
Returning Cash to Shareholders
$31
$18
$29
$55
$77
$20
$57
$25
$42
$34
$66
$0
$20
$40
$60
$80
$100
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013 |
 Balanced
Approach to Capital Allocation 13
•
New product development
•
Acquisitions
•
Dividends
•
Share repurchases
•
Debt reduction
Grow Shareholder Value
Return Capital to Shareholders
Re-invest in the Business
•
Organic growth capital expenditures
•
Process improvements |
 Returning Cash
to Shareholders 14
•
Increasing Dividends
•
Increased Q1 2014 quarterly dividend by 44% to $0.13 per share
Quarterly Dividends Paid
Notes:
1) Above adjusted for stock dividends and splits in 2000, 2001, 2002 and 2004.
2) In 2007 there was an additional special dividend (not shown above) of $0.28 or $9.9M
accrued but not paid until 2008, resulting from a merger termination payment.
•
Buying Back Shares
•
Investing $40M to buy back shares in 2014
•
Invested $33M to buy back 2.8M shares from 2011 to 2013 |
 15
Appendix |
 16
Reconciliation of Non-GAAP Measures
Note
on
Reconciliation
of
Income
and
Earnings
Data:
Gross
profit
excluding
the
items
mentioned
above
in
the
text
of
this
release
and
in
this
reconciliation
chart
is
a
non-GAAP
financial
measure
that
Myers
Industries,
Inc.
calculates
according
to
the
schedule
above,
using
GAAP
amounts
from
the
unaudited
Consolidated
Financial
Statements.
The
Company
believes
that
the
excluded
items
are
not
primarily
related
to
core
operational
activities.
The
Company
believes
that
gross
profit
excluding
items
that
are
not
primarily
related
to
core
operating
activities
is
generally
viewed
as
providing
useful
information
regarding
a
company's
operating
profitability.
Management
uses
gross
profit
excluding
these
items
as
well
as
other
financial
measures
in
connection
with
its
decision-making
activities.
Gross
profit
excluding
these
items
should
not
be
considered
in
isolation
or
as
a
substitute
for
gross
profit
prepared
in
accordance
with
GAAP.
The
Company's
method
for
calculating
gross
profit
excluding
these
items
may
not
be
comparable
to
methods
used
by
other
companies.
MYERS INDUSTRIES, INC.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
CONDENSED CONSOLIDATED GROSS PROFIT (UNAUDITED)
(Dollars in thousands)
Twelve Months Ended
December 31
2013
2012
Gross Profit as reported
$ 217,628
$ 215,281
Restructuring and other adjustments in cost of sales
Material Handling Segment
178
—
Lawn & Garden Segment
10,957
—
Engineered Products Segment
56
1,121
Gross Profit as adjusted
$ 228,819
$ 216,402
|
 Reconciliation
of Non-GAAP Measures 17
Note: Numbers in the Corporate and interest expense section above may
be rounded for presentation purposes. Note
on
Reconciliation
of
Income
and
Earnings
Data:
Income
(loss)
excluding
the
items
mentioned
above
in
the
text
of
this
release
and
in
this
reconciliation
chart
is
a
non-GAAP
financial
measure
that
Myers
Industries,
Inc.
calculates
according
to
the
schedule
above,
using
GAAP
amounts
from
the
unaudited
Consolidated
Financial
Statements.
The
Company
believes
that
the
excluded
items
are
not
primarily
related
to
core
operational
activities.
The
Company
believes
that
income
(loss)
excluding
items
that
are
not
primarily
related
to
core
operating
activities
is
generally
viewed
as
providing
useful
information
regarding
a
company's
operating
profitability.
Management
uses
income
(loss)
excluding
these
items
as
well
as
other
financial
measures
in
connection
with
its
decision-making
activities.
Income
(loss)
excluding
these
items
should
not
be
considered
in
isolation
or
as
a
substitute
for
net
income
(loss),
income
(loss)
before
taxes
or
other
consolidated
income
data
prepared
in
accordance
with
GAAP.
The
Company's
method
for
calculating
income
(loss)
excluding
these
items
may
not
be
comparable
to
methods
used
by
other
companies.
MYERS INDUSTRIES, INC.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
INCOME (LOSS) BEFORE TAXES BY SEGMENT (UNAUDITED)
(Dollars in millions, except per share data)
Twelve Months Ended
December 31
2013
2012
Material Handling
Income before taxes as reported
$ 41.1
$ 47.5
Restructuring expenses
0.2
0.2
Income before taxes as adjusted
41.3
47.7
Lawn and Garden
Income (loss) before taxes as reported
(1.5)
2.9
Restructuring expenses and other adjustments
11.4
0.6
Loss on disposal of assets
0.6
0.0
Depreciation recapture
1.3
0.0
Income before taxes as adjusted
11.8
3.5
Distribution
Income before taxes as reported
14.4
14.8
Restructuring expenses
0.2
0.7
Gain on building sale
0.0
(0.8)
Income before taxes as adjusted
14.6
14.7
Engineered Products
Income before taxes as reported
15.3
14.5
Restructuring expenses
0.2
1.2
Income before taxes as adjusted
15.5
15.7
Corporate and interest expense
Income (loss) before taxes as reported
(29.9)
(32.4)
Severance and other
0.0
1.8
Loss before taxes as adjusted
(29.9)
(30.6)
Consolidated
Income before taxes as reported
39.4
47.3
Restructuring expenses and other adjustments
13.9
3.7
Income before taxes as adjusted
53.3
51.0
Income taxes
19.2
18.9
Net Income as adjusted
$ 34.1
$ 32.1
Adjusted earnings per diluted share
$ 1.00
$ 0.94
|
 Strategic
Principles 18
Customer
Dedication
Innovation
Operations
Excellence
Organization
Development
Financial
Strength
•
Structure the organization closer to the customer -
decentralize
•
Build and maintain processes to maximize customer input
•
Lead our industries in service, quality and delivery
•
Deliver next-generation products/services in high niche markets
•
Utilize “Voice of the Customer”
tools
•
Market based strategic planning
•
Maintain highest standards in safety and productivity
•
Ensure process for continuous quality, service and productivity
improvement
•
Ensure industry-best talent
•
Make Myers’
training and development a competitive advantage
•
Generate strong financial results –
EBITDA growth, Cash, ROIC
•
Maintain a strong balance sheet
•
Build industry leading decision-making tools across the business
|
 Portfolio
Evolution 19 |
 Macro
Indicators 20
Material Handling
MHEM (Material Handling Equipment) Index
Source: Material Handling Industry Feb 2014 Forecast |
 Macro
Indicators 21
Lawn & Garden
Housing Starts; Consumer Sentiment
Sources: National Association of Home Builders (NAHB), Jan 2014;
Thomson Reuters/University of Michigan, Feb 2014 |
 Macro
Indicators 22
Distribution
Replacement Tire Shipments; Miles Driven; Fuel Prices
Source: JP Morgan, RMA, Energy Information Administration, Feb 2014
|
 Macro
Indicators 23
Engineered Products
RVIA; Motor Vehicle and Parts Production
Sources: RVIA Forecasts, Dec 2013;
FRB G17 Release, Feb 2014 |
 |