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Investor Presentation
May 2018
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SAFE HARBOR STATEMENT & NON-GAAP MEASURES
2
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. Any statement that is not of historical fact may be deemed “forward-looking”. Words such as “will”, “expect”, “believe”, “project”, “plan”, “anticipate”, “intend”, “objective”, “goal”, “view” and similar expressions identify forward-looking statements. These statements are based on management’s current views and assumptions of future events and financial performance and involve a number of known and unknown risks, uncertainties and other factors, many outside the Company’s control, that could cause actual events or results to differ materially from those expressed or implied. We do not guarantee that the transactions and events described will happen as described (or that they will happen at all). 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. Such risks include:
(1) Raw material availability, increases in raw material costs, or other production costs
(2) Risks associated with our strategic growth initiatives or the failure to achieve the anticipated benefits of such initiatives
(3) Unanticipated downturn in business relationships with customers or their purchases
(4) Competitive pressures on sales and pricing
(5) Changes in the markets for the Company’s business segments
(6) Changes in trends and demands in the markets in which the Company competes
(7) Unexpected failures at our manufacturing facilities
(8) Future economic and financial conditions in the United States and around the world
(9) Inability of the Company to meet future capital requirements
(10) Claims, litigation and regulatory actions against the Company
(11) Changes in laws and regulations affecting the Company
(12) Other risks as detailed in the Company’s 10-K and other reports filed with the Securities Exchange Commission
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 by visiting EDGAR on the SEC web site at www.sec.gov.
Non-GAAP Financial Measures
The Company refers to certain non-GAAP financial measures throughout this presentation. Adjusted EPS, adjusted income per diluted share from continuing operations, adjusted operating income, adjusted EBITDA and free cash flow are non-GAAP financial measures and are intended to serve as a supplement to results provided in accordance with accounting principles generally accepted in the United States. The Company believes that such information provides an additional measurement and consistent historical comparison of the Company’s performance. A reconciliation of the non-GAAP financial measures to the most directly comparable GAAP measures is available in the appendix of this presentation.
Statements in this presentation speak only as of the date made.
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OUR PATH TO SUCCESS: MYERS’ INVESTMENT HIGHLIGHTS
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MARKET LEADING POSITIONS ACROSS DIVERSE, NICHE MARKETS
INDUSTRY DEFINING BRANDS
STRONG SECULAR GROWTH TRENDS
ESTABLISHED CHANNELS TO MARKET THROUGH SUPERIOR INTIMACY WITH A DIVERSE CUSTOMER BASE
FLEXIBLE OPERATIONS AND CONTINUOUS IMPROVEMENT CULTURE SUPPORTS PROFITABLE GROWTH
SEASONED MANAGEMENT TEAM EXECUTING A SOLID PLAN
COMPELLING STRATEGY TO DRIVE EARNINGS GROWTH
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Net Sales
$547M
Adjusted EBITDA Margin
11%
MYERS PROVIDES DIVERSE SOLUTIONS TO IMPROVE SAFETY, HEALTH AND EFFICIENCY ACROSS NICHE MARKETS
1 Reflects continuing operations. See appendix for non-GAAP reconciliations.
26%
17%
14%
14%
28%
Industrial
Food & Beverage
Vehicle Consumer
Auto Aftermarket
BUSINESS HIGHLIGHTS KEY DATA (2017)
71%
29%
Material Handling
Distribution
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End Market Segment
Material Handling Distribution
» A market leader focused on a #1 or #2 position in diverse, niche markets
• A leading manufacturer of a diverse range of material handling and storage solutions
• A leading distributor to the U.S. tire, wheel and undervehicle service industry
» Seven strong brands, each with a unique value proposition and differentiated offerings
» Building an asset light business model to provide
operational and financial flexibility
» Long-standing relationships with diverse, blue-chip
customers and channel partners
» ~1,900 employees responsible for manufacturing
~15,000 products and distributing 13,500+ products
» Market leading positions and strong brands
cultivated over 80 years of operations
FINANCIAL METRICS1
NET REVENUE MIX
LEADING BRANDS
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MYERS HAS TRANSFORMED THE ORGANIZATION
SIGNIFICANT ACCOMPLISHMENTS SINCE 2015 MYERS TODAY
Growth platform with leading positions in niche markets
Leaner operating footprint and more
asset light business model generating $10M in annual cost savings
Decentralized organization; employees
are trained to Act Like Owners
Improved cash flow profile
M&A a key option to drive enhanced cash returns, growth and margins
Management team focused on
delivering a clear strategy
“Safer, healthier, more efficient”
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INSTILLED NICHE MARKET FOCUS
INVESTED IN THE SALES FORCE
BEGAN BUILDING A GROWTH
INFRASTRUCTURE
ESTABLISHED OPERATIONAL EXCELLENCE
UPGRADED LEADERSHIP TEAM
» Identified five key niche markets for growth
» Divested non-core, commodity businesses
» Installed a high-caliber leadership team
» 80% of current executive team added since 2015
ESTABLISHED AN ENTERPRISE STRATEGY TO POSITION THE ORGANIZATION FOR GROWTH
» Implemented tools to enhance effectiveness across both the sales force and pricing
» Invested in marketing resources and innovation
» Established an acquisition funnel with clear strategic objectives and return thresholds
» Focus on cash flow and debt reduction
» Instituted 80/20 and lean initiatives
» >30% footprint reduction
» ~19% headcount reduction
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MYERS HAS INSTITUTED A ROBUST ENTERPRISE STRATEGY
OPEN, CANDID, NON-POLITICAL Speaks candidly and challenges the status quo Listens to others’ perspectives and seeks to understand Acts with transparency and integrity
PROCESS Focuses process execution in an organized and structured manner Creates thorough implementation plans and anticipates problems
HUMBLE Focuses on the success of the team over self recognition Seeks out opportunities to support others
FLEXIBLE Embraces change, variety, and ambiguity Takes initiative to explore new methods and perspectives
GOAL Value Creation
Cash Flow Growth
Niche Market Focus
Flexible Operations
Safer Healthier More
Efficient
Act Like Owners
Bias For Action Customer Intimacy
Transparency and Integrity
Structured and Organized
Analytical and Results Oriented
Flexible and Exploratory
Humble and Team-oriented
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STRATEGY
MISSION
CULTURE
ESTABLISHED FRAMEWORK FOR DRIVING GROWTH AND OUTPERFORMANCE WITHIN THE BUSINESS
“We think and operate for the long-term and maintain a continuous improvement mindset.”
‒ R. David Banyard
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LEADING PROVIDER OF A COMPREHENSIVE SUITE OF OFFERINGS
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MATERIAL HANDLING
DISTRIBUTION
1 Reflects continuing operations. See appendix for non-GAAP reconciliations.
BRANDS SELECT PRODUCTS
$391M Net Sales
$44M
Adj. Operating Income
2017 FINANCIALS1
$156M Net Sales
$9M
Adj. Operating Income
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Source: Markit, Northcoast Research Tire Demand Index, Statista, The World Factbook – CIA, University of Michigan, USDA
CONSUMER Strong consumer sentiment
including amongst outdoor
enthusiasts
» Consumer sentiment currently
very strong at ~99
» U.S. unemployment
rate is the lowest
in 17 years
FOOD & BEVERAGE Increasing demand across
agricultural and food processing
markets
» U.S. farm cash receipts
currently ~15% below peak
» U.S. population sustaining
steady growth
AUTO AFTERMARKET
Large market; many cars on the road requiring maintenance and repair
» 250M+ U.S. registered vehicles
» 17M+ cars and trucks produced in
North America annually
» Tire Demand Index indicating
expanding market
INDUSTRIAL
Significant rebound in production
coupled with strong macroeconomic
outlook
» Highest US Manufacturing PMI in
over three years
» 3%+ 2018 Global GDP growth
VEHICLE Significant installed base in
recreational vehicles and marine
with continued demand growth
» ~55M people in U.S. and
Canada over 65 years old
» Increased participation among
younger buyers
» Large installed base: ~7M U.S.
households have RVs
Key Macro Themes
Resilient and growing industrial backdrop
Strong consumer sentiment
Expanding agriculture end markets
Automobile-dependent U.S. economy
STRONG SECULAR GROWTH TRENDS
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NICHE MARKET FOCUS FLEXIBLE OPERATIONS STRATEGIC M&A
» Drive further market penetration across Material Handling
» Leverage strategic customer relationships
» Continued product innovation
» Sales tools and strategies
» Drive enhanced sales effectiveness across Distribution
» Identify and enter new niche markets where we can win
» Leverage 80/20 initiatives to focus on higher value customers
» Continued simplification of operations through further footprint reduction and implementation of lean initiatives
» Value-added process improvement initiatives
» Identify partnership opportunities with outsourced manufacturers
Robust pipeline of opportunities
Deliver superior cash return on investment
Established M&A criteria
» Enhance current portfolio
» Generally #1 or #2 in niche markets
» Asset light businesses
» Accretive to cash flow and operating margin
THE MYERS MANAGEMENT TEAM HAS A ROBUST PLAN FOR DRIVING EARNINGS GROWTH
1
2
3
STRONG CASH FLOW GROWTH
COMPELLING STRATEGY TO DRIVE EARNINGS GROWTH
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SUMMARY FINANCIALS
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$571 $534 $547
2015A 2016A 2017A
$22
$12
$6
2015A 2016A 2017A
NET SALES ($M) ADJ. EBITDA
CAPITAL EXPENDITURES AND NWC1 ($M)
$72
$64
$60
2015A 2016A 2017A
FREE CASH FLOW3 ($M)
$22 $21
$43
2015A 2016A 2017A
Note: Reflects continuing operations. See appendix for non-GAAP reconciliations. 1 NWC defined as accounts receivable plus net inventory plus prepaid expenses and other assets less accounts payable less accrued expenses 2 Includes discontinued operations from Brazil business
NWC % Net Sales 5%
Note: Reflects continuing operations. See appendix for non-GAAP reconciliations. 3 Free cash flow defined as Operating Cash Flow from Continuing Operations less Capital Expenditures
8% 2
% Net Sales 4% 8% 4%
% Margin 13% 11% 12%
Adj. Op Inc. % Margin 7% 6% 6%
% MH Sales 6% 1% 3%
4% 2
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Q1 UPDATE
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$17 $18
Q1 '17 Q1 '18
NET SALES ($M) FREE CASH FLOW1 ($M)
ADJUSTED EBITDA ($M)
$137 $153
Q1 '17 Q1 '18
Note: Reflects continuing operations. See appendix for non-GAAP reconciliations. 1 Free cash flow defined as Operating Cash Flow from Continuing Operations less Capital Expenditures
% Margin 12% 12%
Adj. Op. Inc. % Margin
6% 8%
NET LEVERAGE
3.0x
2.3x
Q1 '17 Q1 '18
$13 $12
Q1 '17 Q1 '18
% Net Sales 9% 8%
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($23)
$10
$2
$36
($18)
$5
$21 $14
$13
$9 $10 $8
$12
Q1 '15 Q2 '15 Q3 '15 Q4 '15 Q1 '16 Q2 '16 Q3 '16 Q4 '16 Q1 '17 Q2 '17 Q3 '17 Q4 '17 Q1 '18
FREE CASH FLOW SUMMARY
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» Actions resulting in stabilized free
cash flow performance
» Implementing asset light and lean
operations
» Disciplined approach to working
capital and capex spending driving
strong cash flow generation
» Long-term, continued improvement
is expected to support both organic
and acquisitive growth
COMMENTARY YEARLY FREE CASH FLOW1 ($M)
25 21
39
5
$22 $21
$43
2015A 2016A 2017A
Free Cash Flow from Operations
Impact of Cash Flow from Discontinued Operations
1 Free cash flow defined as Operating Cash Flow from Continuing Operations less Capital Expenditures 2 As reported, includes all continuing operations at the time of the quarter-end; Free cash flow defined as Operating Cash Flow less Capital Expenditures
% Net Sales 8% 4% 4%
ANNUAL FREE CASH FLOW1 ($M)
QUARTERLY FREE CASH FLOW AS REPORTED2 ($M)
Free Cash Flow from Continuing Operations
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OUR PATH TO SUCCESS: MYERS’ INVESTMENT HIGHLIGHTS
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MARKET LEADING POSITIONS ACROSS DIVERSE, NICHE MARKETS
INDUSTRY DEFINING BRANDS
STRONG SECULAR GROWTH TRENDS
ESTABLISHED CHANNELS TO MARKET THROUGH SUPERIOR INTIMACY WITH A DIVERSE CUSTOMER BASE
FLEXIBLE OPERATIONS AND CONTINUOUS IMPROVEMENT CULTURE SUPPORTS PROFITABLE GROWTH
SEASONED MANAGEMENT TEAM EXECUTING A SOLID PLAN
COMPELLING STRATEGY TO DRIVE EARNINGS GROWTH
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APPENDIX
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14% 11%
MATERIAL HANDLING SEGMENT
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$384 $364
$391
2015 2016 2017
» A leading designer, manufacturer and marketer of highly engineered
polymer packaging containers, storage and safety products and specialty
molded parts
» Operates under five well-established brand names
• Buckhorn, Scepter, Ameri-Kart, Akro-Mils and Jamco Products
» Manufacturing facilities in the US and Canada
» Targets niche markets across North America
» Variety of sales channels
» Represents 71% of Myers’ 2017 net sales
FINANCIALS 2017 NET SALES BREAKDOWN
NET SALES1 ($M) INDUSTRY BUSINESS
36%
24%
20%
20%
Adjusted Op. Inc. Margin1
11%
Highly engineered packaging, transportation, storage, and organization
containers serving specialty customer needs
Customer-intimate sales model
Increase productivity, product protection, handling efficiency and safety
across customer’s operations
Reduce freight and disposal costs and handling risks
Customer-driven product innovation
Industrial
Food & Beverage
Vehicle
Consumer
OVERVIEW VALUE PROPOSITION
Note: See appendix for non-GAAP reconciliations 1 Excludes impact from corporate eliminations
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DISTRIBUTION SEGMENT
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FINANCIALS 2017 NET SALES BREAKDOWN
» A leading distributor of tools, equipment and supplies used for tire, wheel
and under-vehicle service
» Serves passenger, heavy truck and off-road vehicles through retail
channels
» Designs and manufactures tire repair materials and custom rubber
products under the Patch Rubber brand
» Operates under three leading brands
• Myers Tire Supply, Myers Tire Supply International and Patch
Rubber
» Represents 29% of Myers’ 2017 net sales
Link product and service offerings to customer’s needs and priorities
through continuous feedback loop
High performance, knowledgeable and responsive sales organization
driving penetration across customers and regions
Offers one-stop-shopping for customers
Trusted brand name with national footprint
INDUSTRY BUSINESS
100%
Auto Aftermarket
$188 $171 $156
2015 2016 2017
NET SALES1 ($M)
9% 6% 8%
OVERVIEW VALUE PROPOSITION
Note: See appendix for non-GAAP reconciliations 1 Excludes impact from corporate eliminations
Adjusted Op. Inc. Margin1
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RECONCILIATION OF NON-GAAP ITEMS
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ADJUSTED EBITDA
Note: EBITDA and EBITDA as adjusted are financial measures 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 and EBITDA as adjusted provide useful information regarding a company's operating profitability. Management uses EBITDA and EBITDA as adjusted as well as other financial measures in connection with its decision-making activities. EBITDA and 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 and EBITDA as adjusted may not be comparable to methods used by other companies.
($M) Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018
Income from continuing operations $3 $2 $3 $2 $8
Plus: tax expense 3 2 2 (1) 3
Plus: net interest expense 2 2 2 1 2
Plus: extinguishment of debt – – – 2 –
Plus: depreciation 6 6 5 5 4
Plus: amortization 2 2 2 2 2
EBITDA $17 $15 $14 $11 $19
Plus: one-time adjustments 0 3 (0) 2 (1)
Adjusted EBITDA $17 $18 $13 $13 $18
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RECONCILIATION OF NON-GAAP ITEMS (CONTINUED)
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ADJUSTED EBITDA
($M) 2015 2016 2017 LTM Mar-2018
Income from continuing operations $17 $11 $11 $15
Plus: tax expense 8 7 5 5
Plus: net interest expense 9 9 7 7
Plus: extinguishment of debt – – 2 2
Plus: depreciation 22 22 22 20
Plus: amortization 10 10 9 9
EBITDA $67 $59 $56 $58
Plus: one-time adjustments 6 4 5 4
Adjusted EBITDA $72 $64 $60 $62
Note: EBITDA and EBITDA as adjusted are financial measures that Myers Industries, Inc . calculates according to the schedule above using amounts from the unaudited Reconciliation of Non-GAAP Financial Measures Income (Loss) Before Taxes By Segment and GAAP amounts from the unaudited Condensed Consolidated Statement of Operations. The Company believes that EBITDA and EBITDA as adjusted provide useful information regarding a company's operating profitability. Management uses EBITDA and EBITDA as adjusted as well as other financial measures in connection with its decision-making activities. EBITDA and EBITDA as adjusted should not be considered in isolation or as a substitute for net income (loss), income (loss) before taxes or other consolidated income data prepared in accordance with GAAP. The Company's method for calculating EBITDA and EBITDA as adjusted may not be comparable to methods used by other companies.
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RECONCILIATION OF NON-GAAP ITEMS (CONTINUED)
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ADJUSTED OPERATING INCOME (BY SEGMENT)
($M) 2015 2016 2017
Material Handling
Operating income as reported $53 $41 $39
Asset impairments 1 1 1
Litigation reserve reversal (3) – –
Reduction to contingent l iability – (2) –
Gain on sale of asset – 1 (4)
Restructuring expenses and other adjustments 2 1 9
Adjusted operating income $53 $41 $44
Distribution
Operating income as reported $16 $13 $9
Restructuring expenses 1 – –
Adjusted $17 $13 $9
Corporate Expense
Corporate expense as reported ($35) ($26) ($23)
Environmental reserve 1 2 1
Legal fees 2 – –
Professional fees 2 – –
CFO severance related costs – 2 –
Adjusted corporate expense ($30) ($22) ($22)
Continuing Operations
Operating income as reported $35 $27 $25
Total of all adjustments above 5 4 7
Adjusted operating income $39 $32 $31
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RECONCILIATION OF NON-GAAP ITEMS (CONTINUED)
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NET DEBT
($M) Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018
Cash (including discontinued operations) $7 $5 $5 – –
Cash (continuing operations) 2 2 3 3 3
Total debt $180 $170 $158 $151 $144
Less: cash (continuing operations) (2) (2) (3) (3) (3)
Net debt $178 $168 $155 $149 $141
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