Attached files
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| 8-K - FORM 8-K - MYERS INDUSTRIES INC | d408088d8k.htm |
 Investor Presentation – September 2017 MYERS INDUSTRIES, INC. Exhibit 99.1 |
 FORWARD
LOOKING
STATEMENTS
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 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. 2 |
 » New management team executing a solid plan » Clear strategy to drive shareholder value » Safety and efficiency in everything we do » Niche market focus » Flexible operations » Strong cash flow growth » Act like owners » Diverse end markets present long-term opportunities » Compelling financial objectives » Strong control environment and corporate governance best practices KEY INVESTMENT CONSIDERATIONS 3 |
 MYERS
OVERVIEW
4 1 Reflects continuing operations. See appendix for non-GAAP reconciliations. 4 SALES OPERATING MARGIN ADJUSTED OPERATING MARGIN 29% 13% 16% 12% 30% $558M 5.2% 2.9% MATERIAL HANDLING Industry leading manufacturer of polymer material handling and storage products Industry leading distributor of tire repair and retread products 2016 FINANCIAL METRICS 1 2016 SALES PRODUCT PORTFOLIO Industrial Food & Beverage Vehicle Consumer Auto Aftermarket DISTRIBUTION BY END
MARKET
|
 5 BALANCE SHEET & CASH FLOW Net Debt ($M) and Net Debt to Adj. EBITDA 1 » Implementing asset-light and lean operations » Disciplined approach to working capital and capex spending driving strong cash flow generation » Capital allocation prioritized toward debt pay- down » Long-term, continued improvement will support both organic and inorganic growth investments FCF ($M) and FCF as a % of Sales 1 TARGET <9% Working Capital as a % of TTM Sales TARGET <2X 1 Reflects continuing operations. See appendix for non-GAAP reconciliations. TARGET >7% $27.6 $25.6 $21.2 $21.3 4% 4% 4% 7% 2014 2015 2016 YTD June 2017 9.3% 11.1% 9.1% 8.1% 7.8% 8.0% Q1 '16 Q2 '16 Q3 '16 Q4 '16 Q1 '17 Q2 '17 $212.9 $210.9 $192.4 $181.6 $172.2 $165.4 2.9x 3.1x 2.9x 2.9x 2.9x 2.9x Q1 '16 Q2 '16 Q3 '16 Q4 '16 Q1 '17 Q2 '17 |
 MATERIAL
HANDLING
OVERVIEW
6 2016 FINANCIAL METRICS 1 1 Reflects continuing operations. See appendix for non-GAAP reconciliations. 6 2016 SALES PRODUCT PORTFOLIO SALES OPERATING MARGIN ADJUSTED OPERATING MARGIN Industrial Food & Beverage Vehicle Consumer $388M 9.9% 7.6% Industry leading manufacturer of polymer material handling and storage products Portable fuel Containers RV/Marine Fuel Tanks Collapsible Bulk Containers Beverage Crates Platform Trucks Cabinets, bin racks, shelving & panels Intermediate bulk containers 42% 18% 22% 18% BY END
MARKET
|
 100% DISTRIBUTION OVERVIEW 7 1 Reflects continuing operations. See appendix for non-GAAP reconciliations. 7 SALES $171M 7.5% Tire Changing Equipment Tire Changing Equipment Inventory Management Systems Industry leading distributor of tire repair and retread products 2016 FINANCIAL METRICS 1 2016 SALES PRODUCT PORTFOLIO Auto Aftermarket OPERATING MARGIN Tire Repair Patches Tire Repair Plugs BY END
MARKET
|
 8 MARKET INDICATORS 8 US OUTDOOR POWER EQUIPMENT SHIPMENTS (MILLIONS OF UNITS) US NET FARM INCOME ($B) TIRE DEMAND INDEX 1 RV SHIPMENTS (THOUSANDS OF UNITS) (1) An index reading above 50 implies that the broader market expanded on a YOY basis, while a
reading below 50 indicates that unit demand contracted across the
industry. |
 STRATEGIC
VISION
9 Safety and Efficiency in Everything We Do Act Like Owners Niche Market Focus • #1 or #2 in each served market • Strong brands • Customer intimacy Flexible Operations • Simplify • 80/20 and lean • Process focus; value-add only Strong Cash Flow Growth |
 BUSINESS
MODEL
10 »Build sustainable
competitive advantages Niche Market Focus » Step 1: Market segmentation » Step 2: Sell more of existing products » Step 3: Innovate to expand share Flexible Operations » Step 1: Simplify and focus » Step 2: Restructure » Step 3: Lean implementation Strong Cash Flow Growth » Incentivize cash flow improvement » Asset light operations » Acquisition strategy focused on higher cash flow targets Improve existing cash flow Deliver above market returns |
 2017
– 2018 INITIATIVES
11 • Sales force effectiveness - MTS sales process and pricing process • Innovation - Scepter new product launch • Reduce Material Handling ops footprint • Continue 80/20 & lean implementation • Focus on debt repayment • Early stages of acquisition funnel • High cash flow/asset light businesses Niche Market Focus Flexible Operations Strong Cash Flow Growth |
 HOW
WE
WIN:
NICHE
MARKET
GROWTH
STRATEGY
12 Niche Market Focus Define the market segment Orient the organization Penetrate the market segment with existing products Innovate Expand Invested in market research in all 5 key end markets in 2016 Established 7 dedicated cross functional teams in 2016 Investing in systems and pricing tools in 2017 Investing in R&D at Scepter; other companies to follow Find next market segment to expand safety and efficiency offering |
 HOW
WE
WIN:
CHANGING
THE
OPERATING
MODEL
13 » Investing $10M to reduce the operating footprint » Annual savings of approximately $10M » Material Handling » Consolidation of factory footprint across several businesses » Strategic sourcing partners to produce certain volume » Focus in-house on high value products » Complete by Q4 2017 » Myers Industries corporate » Reduced headcount by 15% - completed in Q4 2016 » Amended and extended loan agreement » Similar terms to prior agreement with 3 year extension » Filling M&A pipeline » Market segments less than $1B » Low exposure to customer capital spending » Asset light business model Flexible Operations Strong Cash Flow Growth |
 14 LONG-TERM
FINANCIAL
TARGETS
KEY
METRICS
2016 1 2018 2020 Adj. Op Inc. Margin 5% >8% >10% Free Cash Flow/Sales 4% >7% >9% Working Capital/Sales 8% <9% <9% Adjusted EBITDA $64M >$70M >$80M Net Debt to Adj. EBITDA 2.9 <2.0 <2.0 14 1 Reflects actual results of continuing operations. See appendix for non-GAAP reconciliations. Reconciliations not provided for 2018 and
2020 since metrics reflect targets. |
 » New management team executing a solid plan » Clear strategy to drive shareholder value » Safety and efficiency in everything we do » Niche market focus » Flexible operations » Strong cash flow growth » Act like owners » Diverse end markets present long-term opportunities » Compelling financial objectives » Strong control environment and corporate governance best practices KEY INVESTMENT CONSIDERATIONS 15 |
 APPENDIX |
 17 RECONCILIATION OF NON-GAAP MEASURES
MYERS INDUSTRIES, INC.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
INCOME (LOSS) BEFORE TAXES BY SEGMENT (UNAUDITED)
(Dollars in thousands, except per share data)
Note on Reconciliation of Income and Earnings Data: Income (loss) excluding the items above in the text of this presentation 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 Condensed Consolidated Statement of Operations. 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 income (loss) 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. *Income taxes are calculated using the normalized effective tax rate for each year. The normalized rate used in 2016 is 37.5% and the normalized
rate used in 2015 is 36%. 2016
2015
2016
2015
Material Handling
Operating income as reported
3,431
$
8,140
$
29,583
$
49,762
$
Litigation reserve
reversal -
- -
(3,010) Asset impairments
-
- 9,874
-
Reduction to contingent liability - (2,335)
Restructuring expenses and other
adjustments 810
1,535 1,102
3,285
Operating income as adjusted
4,241
9,675
38,224
50,037
Distribution
Operating income as reported
3,031
2,557
12,834
16,114
Restructuring expenses and other
adjustments -
312 -
507 Operating income as adjusted
3,031
2,869
12,834
16,621
Corporate
Expense Corporate expense as
reported (5,575)
(8,873)
(26,249)
(35,015)
CFO severance
related costs -
- 2,011
-
Environmental reserve - 200
2,155 1,466
Professional, legal fees and other
adjustments 186
859 186
3,364 Corporate expense as adjusted
(5,389)
(7,814)
(21,897)
(30,185)
Continuing
Operations Operating income as
reported 887
1,824 16,168
30,861
Total of all
adjustments above 996
2,906 12,993
5,612
Operating income as adjusted
1,883
4,730
29,161
36,473
Interest
expense, net (2,086)
(2,100)
(8,173)
(8,999)
Income
(loss) before taxes as adjusted
(203)
2,630 20,988
27,474
Income tax
expense* 76
(939) (7,871)
(9,808)
Income
(loss) from continuing operations as adjusted
(127)
$
1,691
$
13,117
$
17,666
$
Adjusted earnings (loss)
per diluted share from continuing operations
(0.00)
$
0.06
$
0.44
$
0.57
$
Quarter Ended December 31,
Year Ended December 31,
|
 18 RECONCILIATION OF NON-GAAP MEASURES
MYERS INDUSTRIES, INC.
RECONCILIATION OF FREE CASH FLOW TO GAAP NET CASH
PROVIDED BY (USED FOR) OPERATING ACTIVITIES - CONTINUING OPERATIONS (UNAUDITED) (Dollars in thousands) YTD June 2014 2015 2016 2017 Net cash provided by (used for) operating activities - continuing operations 51,757 $
49,354
$
33,721 $
23,634
$
Less capital expenditures 24,170 23,727 12,523 2,345 Free cash flow 27,587 $
25,627
$
21,198 $
21,289
$
For the Year Ended December 31, |
 19 RECONCILIATION OF NON-GAAP MEASURES
`
30-Jun-15
30-Sep-15
31-Dec-15
31-Mar-16
30-Jun-16
30-Sep-16
31-Dec-16
31-Mar-17
30-Jun-17
Net Income as Reported Continuing
Operations 10,925
$
631
$
(125)
$
(3,336)
$
5,684
$
424
$
(1,247)
$
3,128
$
2,012
$
Add: tax expense
6,350
218
(151)
2,446
3,429
547
48
2,255
1,783
Add: net interest expense
2,467
1,730
2,100
2,019
2,053
2,015
2,086
1,975
1,785
Add: depreciation
6,801
5,926
5,496
6,000
6,283
6,182
6,142
6,700
6,984
Add: amortization
2,641
2,575
2,413
2,499
2,482
2,447
2,430
2,436
2,136
EBITDA
29,184
11,080
9,733
9,628
19,931
11,615
9,459
16,494
14,700
Add: one-time unusual charges
(2,561)
3,317
2,906
10,556
544
897
996
42
2,998
EBITDA as Adjusted
26,623
$
14,397
$
12,639
$
20,184
$
20,475
$
12,512
$
10,455
$
16,536
$
17,698
$
TTM EBITDA as Adjusted
73,843
$
67,695
$
65,810
$
63,626
$
59,978
$
57,201
$
Total Debt
218,471
$
217,440
$
197,930
$
189,522
$
179,571
$
170,114
$
Less Cash
5,601
6,499
5,538
7,888
7,325
4,673
Net Debt
212,870
$
210,941
$
192,392
$
181,634
$
172,246
$
165,441
$
Net Debt to TTM Adj. EBITDA
2.9
3.1
2.9
2.9
2.9
2.9
Quarter
Ended |
 |