Myers Industries (MYE) 8-K Myers Industries Reports 2016 First Quarter Results

MAY

2, 2016 

|

MYERS

INDUSTRIES, INC.

FIRST

QUARTER

EARNINGS

PRESENTATION

Exhibit 99.2

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 within 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.myersind.com and at the

SEC.gov web site.

SAFE

HARBOR

STATEMENT

Q1 2016 SUMMARY

Net sales $151.2M, a decrease of (3.3%) to prior year

Organic (1.3%); currency (2.0%)

In line with expectations

Gross margin +260 basis points to 31.9%

Lower input costs

Operational improvements

Product line rationalization

Adjusted EPS from continuing operations +75% to $0.21

Free cash flow ($18.5M); +$4.1M year-over-year improvement

Working capital improvement partially offset by higher capital spending

Several large one-time charges in the quarter

$8.5M of non-cash impairment charges in Brazil

$2.0M of CFO severance related charges

3

PERFORMANCE

IN

LINE

WITH

EXPECTATIONS

CONTINUING OPERATIONS

Q1 

2015

Q1

2016

NET

SALES

$   156.3

$   151.2

(1.3)% ORGANIC

GROSS

PROFIT

GROSS

MARGIN

$     45.8

29.3%

$     48.2

31.9%

+260 BPS

ADJ. SG&A

$     37.2

$     36.5

(1.9)% DECREASE

ADJ.

OPERATING

INCOME

OPERATING

MARGIN

$       8.7

5.5%

$     11.7

7.7%

+220 BPS

NET

INTEREST

EXPENSE

$       2.7

$       2.0

ADJ. INCOME

FROM

CONTINUING

OPS

BEFORE

INCOME

TAXES

$       6.0

$       9.7

INCOME

TAX

EXPENSE

$       2.1

$       3.5

NORMALIZED

RATE

36%

ADJ. INCOME

FROM

CONTINUING

OPS

INCOME

MARGIN

$       3.8

2.5%

$       6.2

4.1%

ADJ. EPS

FROM

CONTINUING

OPS

$     0.12

$     0.21

75% INCREASE

4

Q1 FINANCIAL

SUMMARY

SOLID

START

TO

2016

IN

$MILLIONS

EXCEPT

EPS

AND

PERCENTAGES

SEE

APPENDIX

FOR

RECONCILIATIONS

FROM

GAAP TO

ADJUSTED

RESULTS

BALANCE SHEET

03/31/15

03/31/16

Cash

3.7

$     

5.6

$     

Debt

204.7

218.5

Net Debt

201.0

$ 

212.9

$ 

Adjusted TTM EBITDA

68.1

$   

73.8

$   

Net Debt-to-Adj. EBITDA

2.9x

2.9x

BALANCE

SHEET

& CASH

FLOW

5

REFLECTS

SEASONALITY

; OPPORTUNITIES

FOR

FURTHER

IMPROVEMENT

WORKING CAPITAL AS A % OF SALES

13.3%

9.0%

9.3%

Q1 2014

Q1 2015

Q1 2016

CASH FLOW

$(40.1)

$(2.5)

$(42.6)

$(17.9)

$(4.7)

$(22.6)

$(11.4)

$(7.1)

$(18.5)

Cash from Cont. Ops

CapEx

Free Cash Flow

2014

2015

2016

See appendix for reconciliations from GAAP to adjusted results

Q1 2016 SEGMENT

RESULTS

6

CHOPPY

END

MARKETS

; FOCUS

ON

EXECUTION

DISTRIBUTION

Sales down (4%):

Indicators from Q1 flat to slightly up

Sales team initiative impacting sales

productivity; some traction but gaps remain

Large win in retread business at Patch

Sales team initiative targeting higher margin

products; favorable mix in Q1

Operating inefficiency at Patch resulted in overall

margin erosion

$ Millions

$44.1

$42.2

$3.5

$2.5

$0

$1

$2

$3

$4

$0

$10

$20

$30

$40

$50

Net Sales

Adj. Op Income

Q1 2015

Q1 2016

$ Millions

MATERIAL HANDLING

Sales down (3%); flat organic:

Wins at several key industrial customers;

improved channel coverage

Share gains in vehicle/auto; new model launch

win at major auto manufacturer

Volume up in Ag; pent up demand

Brazil auto and beverage markets down 35%

Margin expansion; full quarter of factory re-

alignment benefits; favorable input costs;

product line rationalization

$112.3

$109.0

$13.5

$16.0

$0

$2

$4

$6

$8

$10

$12

$14

$16

$18

$0

$20

$40

$60

$80

$100

$120

Net Sales

Adj. Op Income

Q1 2015

Q1 2016

2016 OUTLOOK

Holding to prior outlook

FY revenue expected to be flat to down low

single digits

Q2 revenue expected to be down low to

mid-single digits; tough Q2 ‘15 comp

Revenue growth initiatives for each business

within their niche:

Sales team initiative in Distribution

New products at Scepter

Customer project wins at Buckhorn

Strategic pricing

Margin growth initiatives focused on:

Input cost management

Productivity improvements

Strategic pricing

SG&A review

Capital allocation priorities:

Capex to maintain and grow

Dividend

Pay down debt

7

Q1 IN

LINE

WITH

EXPECTATIONS

; MAINTAINING

OUTLOOK

CONSUMER

12%

VEHICLE

13%

FOOD

& BEVERAGE

16%

AUTO

AFTERMARKET

30%

INDUSTRIAL

29%

FLAT

FLAT

TO

DOWN

LOW

SINGLE

DIGITS

LOW

SINGLE

DIGITS

MID

SINGLE

DIGITS

PERCENT

OF

2015 SALES

MYE 2016 GROWTH

OUTLOOK

FLAT

APPENDIX

8

2016 KEY

ASSUMPTIONS

Capital expenditures:

$17 -

$22 million

Interest expense: 

$9 -

$10 million

D&A:

$35 -

$37 million

Effective tax rate (normalized):

36%

9

RECONCILIATION

OF

NON-GAAP MEASURES

10

MYERS INDUSTRIES, INC.

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

CONSOLIDATED SELLING, GENERAL AND ADMINISTRATIVE EXPENSES (UNAUDITED)

(Dollars in thousands)

March 31, 2016

March 31, 2015

Selling, general and administrative expenses as reported

38,497

$                 

39,041

$                 

Restructuring expenses and other adjustments in selling, general and

administrative expenses

Material Handling segment

-

-

Distribution segment

-

(53)

Corporate

(2,011)

(1,806)

Selling, general and administrative expenses as adjusted

36,486

$                 

37,182

$                 

Quarter Ended

Note on Reconciliation of Income and Earnings Data:Selling, general and administrative expenses 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 selling, general and administrative expenses 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 selling,

general and administrative expenses excluding these items as well as other financial measures in connection with its decision-making activities.  Selling,

general and administrative expenses excluding these items should not be considered in isolation or as a substitute for selling, general and administrative

expenses prepared in accordance with GAAP.  The Company's method for calculating selling, general and administrative expenses excluding these items

may not be comparable to methods used by other companies.

RECONCILIATION

OF

NON-GAAP MEASURES

11

MYERS INDUSTRIES, INC.

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

INCOME (LOSS) BEFORE TAXES BY SEGMENT (UNAUDITED)

(Dollars in millions, 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 above is 36%.

2016

2015

Material Handling

Operating income as reported

7,441

$            

13,407

$         

Asset impairments

8,545

-

Restructuring expenses and other adjustments

-

91

Operating income as adjusted

15,986

13,498

Distribution

Operating income as reported

2,536

3,491

Severance

-

53

Operating income as adjusted

2,536

3,544

Corporate Expense

Corporate expense as reported

(8,848)

(10,182)

CFO severance related costs

2,011

-

Professional, legal fees and other adjustments

-

1,806

Corporate expense as adjusted

(6,837)

(8,376)

Continuing Operations

Operating income as reported

1,129

6,716

Total of all adjustments above

10,556

1,950

Operating income as adjusted

11,685

8,666

Interest expense, net

(2,019)

(2,702)

Income before taxes as adjusted

9,666

5,964

Income taxes*

(3,480)

(2,129)

Income from continuing operations as adjusted

6,186

$            

3,835

$            

Adjusted earnings per diluted share from continuing operations

0.21

$              

0.12

$              

Quarter Ended March 31,

RECONCILIATION

OF

NON-GAAP MEASURES

12

MYERS INDUSTRIES, INC.

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

COMBINED STATEMENTS OF INCOME (UNAUDITED)

(Dollars in thousands)

TTM

June 30, 2015

September 30, 2015

December 31, 2015

March 31, 2016

March 31, 2016

Operating Income as reported from continuing operations

19,742

$                 

2,578

$                   

1,824

$                  

1,129

$                   

25,273

$                

Add:  one time unusual charges

(2,560)

3,318

2,906

10,556

14,220

Add: depreciation

6,801

5,926

5,496

6,000

24,223

Add: amortization

2,641

2,575

2,413

2,499

10,128

EBITDA as adjusted

26,624

14,397

12,639

20,184

73,844

Quarter Ended

TTM

June 30, 2014

September 30, 2014

December 31, 2014

March 31, 2015

March 31, 2015

Operating Income as reported from continuing operations

11,286

$                 

(2,678)

$                 

5,127

$                   

6,716

$                  

20,451

$                 

Add:  one time unusual charges

1,560

8,988

1,031

1,950

13,529

Add: depreciation

5,652

6,719

6,424

6,489

25,284

Add: amortization

670

2,814

2,724

2,638

8,846

EBITDA as adjusted

19,168

15,843

15,306

17,793

68,110

Quarter Ended

Note on Reconciliation of Income and Earnings Data:EBITDA as adjusted is a financial measure that Myers Industries, Inc. calculates according to the schedule above using amounts

from the unaudited Reconciliation of Non-GAAP Financial Measures Income (Loss) Before Taxes By Segment and GAAP amounts from the unaudited Condensed Consolidated Statement

of Operations. The Company believes that EBITDA as adjusted provides useful information regarding a company's operating profitability.  Management uses EBITDA as adjusted as well as

other financial measures in connection with its decision-making activities.  EBITDA as adjusted 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 EBITDA as adjusted may not be comparable to methods used

by other companies.