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 |