Attached files
| file | filename |
|---|---|
| 8-K - FORM 8-K - MYERS INDUSTRIES INC | d11979d8k.htm |
| EX-10.1 - EX-10.1 - MYERS INDUSTRIES INC | d11979dex101.htm |
| EX-99.1 - EX-99.1 - MYERS INDUSTRIES INC | d11979dex991.htm |
 July 23, 2015
| Myers Industries, Inc. Second Quarter 2015 Earnings Presentation Exhibit 99.2 |
 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) Changes in the markets for the Company’s business segments (2) Changes in trends and demands in the markets in which the Company competes (3) Unanticipated downturn in business relationships with customers or their purchases
(4) Competitive pressures on sales and pricing
(5) Raw material availability, increases in raw material costs, or other production
costs (6) Harsh weather conditions
(7) Future economic and financial conditions in the United States and around the
world (8) Inability of the Company to meet future capital
requirements (9) Claims, litigation and regulatory actions against the
Company (10) Changes in laws and regulations affecting the
Company (11) The Company’s ability to execute the components of its
Strategic Business Evolution process 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.myersind.com and at the SEC.gov web site.
Safe Harbor Statement
2 |
  Second Quarter 2015 Financial Summary
3 • Net sales increased due to the Scepter acquisition and new product sales, but were partially offset by decreased sales in the Material Handling Segment’s agricultural, industrial, recreational vehicle and marine end markets • Gross profit margin increased due to the contribution from Scepter, pricing actions, new product sales and ongoing cost reduction activities • SG&A decreased due to the reversal of a litigation reserve, lower salaries and other employee related expenses and lower variable selling expenses, including freight, all of which more than offset the incremental SG&A expense from Scepter Note: All figures except ratios and percents are $Millions Continuing Operations Q2 Q2 % Highlights 2015 2014 Change Net sales $164.3 $152.8 7.6% Gross profit margin 30.8% 27.8% SG&A $30.8 $31.2 (1.3)% Income from continuing ops - adjusted ¹ $9.9 $7.2 38.8% Effective tax rate 36.8% 34.2% Income per diluted share from continuing ops - adjusted ¹ $0.32 $0.22 45.5% 1 See Reconciliation of Non-GAAP measures on slide 9 |
     First Half 2015 Financial Summary
4 Notes: All figures are $Millions Continuing Operations Six Months Ended Six Months Ended Cash June 30, June 30, Highlights 2015 2014 Cash used for continuing operations ($3.0) ($6.8) Capital expenditures $9.4 $7.0 Free cash flow ($12.4) ($13.8) Dividends $8.4 $7.5 Balance Sheet June 30, December 31, Highlights 2015 2014 Long-term debt $201.4 $236.4 Debt - net of cash $197.5 $231.8 Free cash flow = cash flow from operations – capital expenditures |
 • Incremental sales of $28.6 million from Scepter and new product sales were partially offset by sales declines in the agriculture, industrial, recreational vehicle and marine end markets as compared to Q2 2014, which resulted from weaker demand and a tough industrial economy • Adjusted income before taxes (IBT) increased versus Q2 2014 due to the contribution from Scepter, pricing actions, reductions in labor and overhead costs and decreased selling, general and administrative expenses Second Quarter Results – Material Handling 5 $ Millions See Reconciliation of Non-GAAP measures on slide 9 $115.8 $103.0 $95 $100 $105 $110 $115 $120 Q2 2015 Q2 2014 Net Sales $18.2 $12.2 $0 $5 $10 $15 $20 Q2 2015 Q2 2014 IBT - Adjusted |
 $49.8 $40 $42 $44 $46 $48 $50 $52 Q2 2015 Q2 2014 Net Sales $5.4 $0 $1 $2 $3 $4 $5 $6 Q2 2015 Q2 2014 IBT - Adjusted • The decrease in Distribution sales as compared to Q2 of last year was the result of decreased demand for some of the segment’s tire repair and retread products due to soft market conditions • The lower sales volume and a shift in product mix led to the decline in adjusted income before taxes year- over-year Second Quarter Results – Distribution $ Millions See Reconciliation of Non-GAAP measures on slide 9 6 $4.5 $48.6 |
 Outlook/Guidance
• Challenging market conditions in Material Handling expected to continue in 2015
• Decreased corn production and low crop prices are expected to continue to decrease demand for
agricultural storage containers, but seeing signs that order activity may
increase in second half •
Shift of orders from Q3 into Q2 will add to anticipated decline in sales of
agricultural storage containers in Q3 2015
• Softer demand in industrial, recreational vehicle and marine end markets expected to continue for the
near-term
• Third quarter and full year 2015 results should benefit from re-introduction of legacy
products which began in the third quarter of 2015
• Additional legacy product re-introductions have been identified and will be introduced early in 2016
• Capital expenditures for continuing operations in 2015 are expected to be approximately $30
million • Approximately 70% of Capital Expenditures will be used for growth and productivity projects
• Anticipate effective tax rate for full year 2015 will be approximately 32.5%
• A result of shift to more international earnings with a full year of Scepter in our results
• Capital Allocation in near-term focused on investment in capital for growth and paying down
debt to reduce leverage; long-term focus remains balanced:
• Organic growth investments in new products, process improvements and market development
• Growth through acquisitions in both core and adjacent markets • Returning capital to stakeholders through debt reduction, dividends and share repurchases
7 |
 Appendix 7 |
 Reconciliation of Non-GAAP Measures
9 MYERS INDUSTRIES, INC. RECONCILIATION OF NON-GAAP FINANCIAL MEASURES INCOME (LOSS) BEFORE INCOME TAXES BY SEGMENT (UNAUDITED)
(Dollars in millions, except per share data)
Quarter Ended June 30,
Six Months Ended June 30,
Income from continuing operations before income
taxes as reported
$
20.8
11.5
34.3
24.3
Litigation reserve reversal
(3.0)
—
(3.0)
—
Restructuring expenses and other
adjustments 0.4
0.7
0.5
0.7
Income from continuing operations before income
taxes as adjusted
18.2
12.2
31.8
25.0
Income from continuing operations before income
taxes as reported
4.5
5.1
8.0
8.6
Restructuring expenses and other
adjustments —
0.3
0.1
0.8
Income from continuing operations before income
taxes as adjusted
4.5
5.4
8.1
9.4
(Loss) before income taxes as reported
(8.1)
(7.0)
(21.0)
(16.0)
Transaction costs
—
0.6
—
0.6
Professional and legal fees
—
—
1.8
—
Corporate and interest expense as adjusted
(8.1)
(6.4)
(19.2)
(15.4)
Income from continuing operations before income
taxes as reported
17.3
9.6
21.3
16.9
Litigation reserve reversal
(3.0)
—
(3.0)
—
Restructuring expenses and other
adjustments 0.4
1.6
2.4
2.1
Income from continuing operations before income
taxes as adjusted
14.7
11.2
20.7
19.0
Income taxes*
(4.8)
4.0
(6.7)
6.8
Income from continuing operations as
adjusted $
9.9
7.2
14.0
12.2
Adjusted earnings per diluted share from continuing
operations
$
0.32
0.22
0.45
0.36
*Income taxes calculated using the normalized effective
tax rate for each year. 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.
2015
2014
2015
2014
$
$
$
$
$
$
$
$
$
Material
Handling
Distribution
Corporate
and
interest
expense
Continuing
Operations |
 Market Indicators
• Orders grew an average of 9% in Q1 2015; shipments grew an average of 1% during
the same period
Material Handling
Source: Material Handling Industry (MHI)
10 (40.0) (30.0) (20.0) (10.0) 0.0 10.0 20.0 30.0 40.0 50.0 60.0 2008 2009 2010 2011 2012 2013 2014 2015 Annual Rate of Change Shipments % Orders % Material Handling Index |
 Market Indicators
• The Outdoor Power Equipment Institute (OPEI) estimates that total outdoor power
equipment shipments will increase by 3.6% in 2015.
11 Material Handling Source: OPEI U.S. Econometric Forecast – December 2014 2009 2010 2011 2012 2013 2014 2015 2016 Consumer Products 6,223,328 6,588,176 5,875,396 6,191,291 6,379,735 5,897,982 6,221,402 6,553,717 Percent Change -10.6 5.9 -10.8 5.4 3.0 -7.6 5.5 5.3 Commercial Products 131,050 180,226 183,609 182,817 221,200 224,227 238,675 253,264 Percent Change -34.4 37.5 1.9 -0.4 21.0 1.4 6.4 6.1 Handheld Products 10,558,563 10,825,352 10,365,472 10,921,443 10,909,630 11,149,771 11,430,870 11,679,547 Percent Change -7.9 2.5 -4.2 5.4 -0.1 2.2 2.5 2.2 Total 16,912,941 17,593,754 16,424,477 17,295,551 17,510,565 17,271,980 17,890,947 18,486,528 -9.1 4.0 -6.6 5.3 1.2 -1.4 3.6 3.3 ACTUAL FORECAST |
 Market Indicators
• Recreational vehicle shipments are forecasted to decline in 2015 vs. 2014 by almost 6% 12 Material Handling Source: RVIA Release 0.0 50.0 100.0 200.0 250.0 300.0 350.0 400.0 450.0 150.0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015F 12.4 10.6 5.8 (40) (30) (20) (10) 0 10 20 30 40 50 60 RV Shipments RV Unit Shipments (000) % Change from P/Y |
 Market Indicators
• The Rubber Manufacturers Association (RMA) projects a slight decrease in
replacement tire shipments in 2015 (-0.4%); YTD shipments are down
2% 13
Distribution Source: JP Morgan, RMA -8.00% -6.00% -4.00% -2.00% 0.00% 2.00% 4.00% 6.00% 8.00% 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015F 2016F Key Indicators for the Tire Market Miles Driven (B) Repl Tire Shipments Gasoline Sales (Gal/B) |
 |