Myers Industries, Inc. · NYSE:MYE
Myers Industries — FY2016 Earnings Presentation
26 slides from Myers Industries's earnings presentation, Mar 9, 2017
Slide 1: Fourth Quarter & Full Year Earnings Presentation
March 9, 2017 – Fourth Quarter & Full Year Earnings Presentation MYERS INDUSTRIES, INC. Exhibit 99.2
Slide 2: Safe Harbor Statement
Safe Harbor Statement 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
Slide 3: Agenda
Agenda 2016 Year-In-Review Detailed Financial Review 2017 Outlook & Key Assumptions Strategic Update Long-Term Financial Targets
Slide 4: 2016 Year-In-Review: strategic progress despite short-term headwinds
2016 Year-In-Review strategic progress despite short-term headwinds Challenges Achievements Weak capital spending environment in key markets caused volume & margin pressure Significant decline in Agriculture sales in Material Handling Lower sales of equipment and retread products in Distribution Ope
Slide 5: 2016 Financial Summary – GAAP
2016 Financial Summary – GAAP Reflects results from continuing operations; In $millions except per-share figures % Sales 24.8% 24.5% % Sales 29.5% 29.6% % Sales 2.9% 5.1% Operating income declined $14.7MM Lower gross profit $14MM Favorable SG&A $9MM Impairment charge $10MM, mostly Brazil SG&A decrea
Slide 6: 2016 Financial Summary – Adjusted (Non-GAAP)
2016 Financial Summary – Adjusted (Non-GAAP) Adjusted Gross Profit declined $15.2MM, 40 bps Lower sales volume and an unfavorable product mix due to the decrease in Agriculture sales Operational inefficiencies due mostly to lower sales volume Net Sales decline of 7.2%; 6.7% at constant currency Mate
Slide 7: 2016 Segment Results
2016 Segment Results Material Handling Distribution Net sales down 6.4%; 5.6% at constant currency Weak capital spending environment in Food & Beverage market ~2% of sales decline attributable to strategic rationalization of low-margin products Strong growth in Vehicle market due to increased passen
Slide 8: Balance Sheet & Cash Flow
Balance Sheet & Cash Flow ANNUAL CASH FLOW WORKING CAPITAL AS A % OF SALES maintained free cash flow through disciplined approach to capex See appendix for reconciliations from GAAP to adjusted results BALANCE SHEET 2015 2016 Cash 7.3 $ 7.9 $ Debt 191.9 189.5 Net Debt 184.5 $ 181.6 $ Adjusted EBITDA
Slide 9: 2017 Outlook
2017 Outlook Consumer Vehicle Industrial Auto Aftermarket Food & Beverage 2015 2016 Market % of Net Sales 2017 Operating Framework Low single digits High single digits Low single digits Flat Low single digits Continued decline in demand from Agriculture markets Anticipating growth in market share du
Slide 10: 2017 Key Assumptions
Net SalesFlat (ex-currency) Capital expenditures:$10 - $12 million Net interest expense: $8 - $9 million D&A: $32 - $34 million Effective tax rate (normalized):36% 2017 Key Assumptions
Slide 11: Strategic Vision
Strategic Vision 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
Slide 12: Business Model
Business Model 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 Incent
Slide 13: 2017 – 2018 Initiatives
2017 – 2018 Initiatives Niche Market Focus Flexible Operations Strong Cash Flow Growth 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 stage
Slide 14: How We Win: Niche Market Growth Strategy
How We Win: Niche Market Growth Strategy Define the market segment Orient the organization Penetrate the market segment with existing products 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
Slide 15: How We Win: Changing The Operating Model
How We Win: Changing The Operating Model 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 C
Slide 16: Long-Term Financial Targets
Long-Term Financial Targets Financial Targets 2016 2018 2020 Adj. Op Inc. Margin 5% >8% >10% Free Cash Flow*/Sales 4% >7% >9% Working Capital/Sales 8% <9% <9% Leverage Ratio 2.9 <2.0 <2.0 Adj. EBITDA $64MM >$70MM >$80MM *Free cash flow calculated as cash flow from continuing operations less capital
Slide 17: Q&A
Q&a
Slide 18: Appendix
Appendix
Slide 19: Q4 Financial Summary – GAAP
Q4 Financial Summary – GAAP Gross Profit declined $4.3MM, 120 bps Lower sales volume One-time costs $0.5MM lower YOY due to prior year restructuring Net Sales declined 6.6% vs. prior year; 7.3% at constant currency Material Handling down $5.8MM (6.2%) Distribution down $3.0MM (7.3%) SG&A declined $3
Slide 20: Q4 Financial Summary – Adjusted (Non-GAAP)
Q4 Financial Summary – Adjusted (Non-GAAP) Adj. Gross Profit declined $4.8MM, 160 bps Lower sales volume Operational inefficiencies due mostly to lower sales volume Net Sales decline of 6.6%; 7.3% at constant currency Material Handling down $5.8MM driven by lower Agriculture sales Distribution down
Slide 21: Q4 Segment Results
Q4 Segment Results Material Handling Distribution Adjusted $4.2 $9.7 $3.0 $2.9 GAAP Adjusted GAAP Net sales declined 7.3% Lower sales of equipment and retread products Increased sales of industrial products Net sales declined 6.2%; 7.2% at constant currency Continued decline in Agriculture sales Str
Slide 22: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures MYERS INDUSTRIES, INC. RECONCILIATION OF NON-GAAP FINANCIAL MEASURES CONSOLIDATED GROSS PROFIT (UNAUDITED) (Dollars in thousands) Note on Reconciliation of Income and Earnings Data: Gross profit excluding the items above in the text of this presentation and in thi
Slide 23: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures MYERS INDUSTRIES, INC. RECONCILIATION OF NON-GAAP FINANCIAL MEASURES CONSOLIDATED SELLING, GENERAL AND ADMINISTRATIVE EXPENSES (UNAUDITED) (Dollars in thousands) Note on Reconciliation of Income and Earnings Data: Selling, general and administrative expenses exclu
Slide 24: Reconciliation of Non-GAAP Measures
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
Slide 25: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures MYERS INDUSTRIES, INC. RECONCILIATION OF NON-GAAP FINANCIAL MEASURES COMBINED STATEMENTS OF INCOME (UNAUDITED) (Dollars in thousands) Note on Reconciliation of Income and Earnings Data: EBITDA as adjusted is a financial measure that Myers Industries, Inc. calculat
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