sharpening our focus

29
Sharpening Our Focus

Upload: others

Post on 06-Jan-2022

16 views

Category:

Documents


0 download

TRANSCRIPT

Page 1: Sharpening Our Focus

Sharpening  Our  Focus  

Page 2: Sharpening Our Focus

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.myersind.com and at the SEC.gov web site.  

2  

Page 3: Sharpening Our Focus

1)  Who  We  Are  

2)  Goals  

3)  Strengthened  Financial  Position  &  Use  of  Capital  

4)  Strategy  for  Increasing  Stakeholder  Value  

5)  Summary  

6)  Appendix:  Macro  Indicators  

3  

Page 4: Sharpening Our Focus
Page 5: Sharpening Our Focus

¡  NYSE:  MYE    

¡  Founded  in  1933  

¡  Headquartered  in  Akron,  Ohio    ¡  Diversified  International  

manufacturer  of  polymer  products  and  wholesale  distributor  that  operates  in  four  segments:  

§  Material  Handling  §  Lawn  &  Garden  §  Distribution  §  Engineered  Products  

 

5  

34%

29%

23%

1 4%

2010  Sales  by  Segment

Material  Handling  -­‐$257.8M

Lawn  &  Garden   -­‐$223.8M

Distribution  -­‐$174.9M

Engineered  Products  -­‐ $104.8M

Page 6: Sharpening Our Focus

§ Bulk  containers,  totes,  pallets § Bins,  shelving,  storage  systems Products

Brands

Markets

Customers

6  

§ Agriculture § Industrial/Manufacturing § Food  Processing § Beverage  Distribution § Liquid  Handling

§ Industrial § Consumer § Healthcare

Innovative  Solutions  with  Plastic  Reusable  Containers  &  Pallets

Everything  You  Need  to  Store,  Organize  &  Transport

Page 7: Sharpening Our Focus

 

§ Nursery

§ Grower  pots         § Trays § Hanging  baskets

§ Decorative  planters      for  consumer  use  

Products

Brands

Markets

Customers

§ Greenhouse § Retail

§ Large  nursery  containers § Pots § Trays

7  

Containers  to  Grow    Beautiful.  Grow  Profitable.

Nursery  Containers  for  Growing  Needs.

From  Seed  to  Sold  Containers  &  Planter  for  Healthy  Growth.

Page 8: Sharpening Our Focus

§ Retail  tire  dealers § Truck  tire  dealers

Products

Brands

Markets

Customers

8  

§ Auto  Dealers § Commercial  Fleets

Everything  for  the  Tire  Dealer  with  Service  Tools,  Equipment  &  Supplies

§ Wheel  Weights § Tire  Valves § Tire  Pressure  Monitoring  Systems  (TPMS)

§ Vehicle  Lifts § Tire  Changers

§ Air  Wrenches § Balancing  Equipment

§ Repair  and  Service  Center § Tire  Retreaders

Page 9: Sharpening Our Focus

§ RV  water  &  waste  tanks § Watercraft  fuel  tanks § Overflow  prevention        system  (OPS)

§ Recreational  Vehicle  (RV) § Marine

Products

Brands

Markets

Customers

§ Tire  repair/retreading § Highway  construction

§ Automotive § Custom  industrial

§ Tire  repair  materials § Highway  marking  tape

§ Auto  HVAC  components § Custom  industrial  product

1906 - 2011

Since 1906 customers have looked to Justrite® for innovative solutions to help protect workers, reduce fire risks, and improve productivity. We extend a sincere thank you for considering us the source of

In today’s competitive marketplace, and over the past 100 years, we know it takes more than quality products at fair prices to earn your trust.

We’re committed to providing you product offerings in sync with changing industry demands. Our comprehensive line is engineered with distinguishable differences that promote workplace safety and efficiency to make your job easier. Justrite products are designed and thoroughly tested for unsurpassed quality, reliability, and compliance to applicable codes and regulations. The durability and confidence in our products led us to offer you an industry first, 10-year warranty.

Our knowledgeable and friendly sales and customer ser-vice staff along with a long standing record of delivering the products you need, when you need them, will continue to be foremost to us in helping you create a safer, more effi-cient workplace. Additionally, our EcoPolyBlend™ line of spill control products is the first of its kind made of up to 100% eco-friendly recycled polyethylene, making them twice as good for the environment. They not only protect

The World’s Most Widely Trusted Safety Containment Systems

Demonstrating our commitment to offering the best protection against hazardous materials, along with faith in the quality and durability of our products, our 10-year warranty covers our best-selling, most popular safety cabinets and containers (see inside back cover).

against groundwater contamination, they utilize post-industrial material that might have otherwise been discarded into the waste stream. Continuing investments in product innovation and manufacturing processes will ensure a steady stream of unique, high quality, competitively priced products into the future.

Again, we thank you for your trust and look forward to serving you as we continue into our second century as the safety leader.

9  

Innovation  in  Customer  Plastic  Rotational  Molding

A  Leader  in  Tire  Repair,  Re-­‐  tread  &  Custom  Rubber  Products

Engineering  Excellence  for  Custom  Blow  Molded  Products

Page 10: Sharpening Our Focus
Page 11: Sharpening Our Focus

Ø  Generate  returns  above  cost-­‐of-­‐capital  

Ø  Generate  strong  free  cash  flow  

Ø  Achieve  organic  growth  >1.5x  GDP    Ø  Target  a  5%  reduction  in  COGS  each  year  

Ø  Maintain  strong  financial  position  

Ø  Balanced  approach  to  capital  allocation  including  returning  cash  to  shareholders  

 

11  

Page 12: Sharpening Our Focus
Page 13: Sharpening Our Focus

$0.54 $0.55

$0.37

$0.15

$0.34

$0.00$0.10$0.20$0.30$0.40$0.50$0.60

2008 2009 2010 YTD  June  2010

YTD  June  2011

$813.5  $701.8   $737.6  

$362.3   $370.2  

$0$100$200$300$400$500$600$700$800$900

2008 2009 2010 YTD  June  2010

YTD  June  2011

Net  Sales   ($  Millions)  

Earnings  (Loss)  per  Share  –  Adjusted*

13  

*Adjusted  results  for  2008  to  2010  include  adjustments  related  to  one-­‐time,  non-­‐recurring  expenses  of  $78.1M,  $21.6M,  and  $70.9M  respectively.    YTD  June  Adjusted  results  include  adjustments  of  $1.8M  and  $1.2M  respectively.  

2%  Increase

127%  Increase

§ 2011  benefitting  from            our  sharpened  focus  Sharpened  focus  began  in  2010  and  is  comprised  of  the  following:

ü Increased  focus  on            Operations  Excellence

Ø Pricing  strategies  that            more  effectively  offset            raw  material  inflation Ø Productivity            improvements Ø More  efficient  use  of            raw  materials

ü Innovation Ø New  product  development

ü Organization  Development

Page 14: Sharpening Our Focus

22.1%20.0%

22.2%23.5% 24.1%

19.3%

26.9%24.9%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

¡  Despite  continued  raw  material  cost  increases,  MYE  has  increased  gross  profit  for  four  consecutive  quarters  

§  Focus  on  productivity  improvements  §  Increased  pricing  to  offset  raw  material  inflation  §  Increased  usage  of  alternative  raw  materials  

14  

2009 2010 2009 2010 2010 2010 2011 2011 Sept Dec Mar June

Resin  Cost    ↑  year-­‐over-­‐year  

19% 19% 13% 18%

Page 15: Sharpening Our Focus

Notes:  1)  Free  cash  flow  calculated  as  cash  flow  from  continuing  operations  less  capital  expenditures.  2)  Dividends  in  2008  do  not  include  a  special  dividend  of  $0.28,  or  $9.9M  (pre-­‐tax),  resulting  from  the  same  merger  termination            payment.    

       

15  

$(Millions)  

$23.7   $51.6   $37.1  $31.1  

$18.0  $29.0   $55.3  

$77.1  $20.4  

$57.2  $25.1  

$0

$20

$40

$60

$80

$100

$120

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Capital  Expenditures Free  Cash  Flow

Free  Cash  Flow  

Page 16: Sharpening Our Focus

¡  Dividend  paid  each  year  since  public  in  1971  q  Gradually  increased  over  nearly  40  years  

16  

Notes:      1)  Above  adjusted  for  stock  dividends  and  splits  in  2000,  2001,  2002  and  2004.  

2)  Dividends  in  2007  include  a  special  dividend  of  $0.28  or  $9.9M  accrued  but  not  paid  until  2008,  resulting  from  a  merger            termination  payment.  

Dividends  

$0.15 $0.17 $0.18 $0.18 $0.19 $0.20 $0.20 $0.22 $0.24 $0.24 $0.26

$0.50  

0

0.1

0.2

0.3

0.4

0.5

0.6

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Page 17: Sharpening Our Focus

58%55%

48% 42%44% 43% 42%

35% 40%29% 28%

$0$50$100$150$200$250$300$350

0%10%20%30%40%50%60%70%

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Debt  to  Capital   Debt  ($  Millions)

§  Free  cash  flow  used  to  reduce  debt  §  Current  debt-­‐to-­‐EBITDA  ratio  =  1.28    §  Provides  flexibility  to  make  selective,  high  return  investments    

 

17  

Note:      1)  Debt-­‐to-­‐Capital  ratio  calculated  as  debt/(debt+equity).    

Debt  to  Capital  Ratio  

Page 18: Sharpening Our Focus
Page 19: Sharpening Our Focus

¡  Deliver  customer  dedication  and  strong  financial  results  by  developing  our  key  management  capabilities  in…    

Innovation ▪  Create  next-­‐generation  products  in              high-­‐margin  niche  markets    

   

Operations  Excellence ▪  Improve  service,  increase  productivity              and  decrease  costs    

 

Organization  Development ▪  Attract,  deploy  and  retain  exceptional  

 talent  in  our  business    

 

19  

Strategic  Principles  Delivering  Results

Page 20: Sharpening Our Focus

¡  Generate  strong  financial  results  §  EBITDA  Growth  §  Cash  §  ROIC  

¡  Focus  investments  §  Organic  investments  to  grow  Material  Handling  and  Distribution  §  Optimize  Lawn  &  Garden  

¡  Seek  acquisitions  with  solid  returns  §  Material  Handling  –  grow  high-­‐value  reusable  packaging  capabilities  ▪  Geographic  focus  in  North  and  South  America  

§  Distribution  –  grow  capability  in  fast-­‐growth  International  markets  ▪  Geographic  focus  in  Central  America  

20  

Page 21: Sharpening Our Focus

 Level  One:  Maintain  Current  Business

 Level  Two:  Grow  Stakeholder  Value

 Level  Three:  Return  Capital  to  Stakeholders  

§ Working  capital  § Capital  expenditures  

§ Safety      

§ New  product  development  § Process  improvements  § Organic  growth  capital  (ROIC  target  >  15%)  

§ Bolt-­‐on  acquisitions  § Employee  retention  and  training  

§ Dividends  § Share  repurchase  

   

21  

§ Debt  reduction    

Page 22: Sharpening Our Focus
Page 23: Sharpening Our Focus

¡  Focused  strategy  §  Customer  Dedication,  Innovation,  Operations  Excellence,  

Organization  Development,  Financial  Strength  §  Benefitting  from  our  refocused  efforts  in  2010    

¡  Improving  earnings  and  cash  flow  §  Increasing  margins  

 ¡  Strong  balance  sheet  

§  Flexibility    ¡  Balanced  approach  to  use  of  capital  

§  Maintain  current  business  §  High  return  capital  growth  projects  §  Grow  stakeholder  value  through  bolt-­‐on  acquisitions,  new  

product  development  ,  process  development,  etc.  §  Return  capital  to  stakeholders  

 

 

23  

Page 24: Sharpening Our Focus
Page 25: Sharpening Our Focus

(40.0)

(30.0)

(20.0)

(10.0)

0.0

10.0

20.0

30.0

40.0

Ann

ual R

ate

of C

hang

e (%

)

Shipments New Orders

Material  Handling    MHEM  (Material  Handling  Equipment)  Index  

25  

Material  Handling  Equipment  will  benefit  from  continued  corporate  investment,  with  growth  potentially  in  the  low  double  digit  range  %  in  2012    

Page 26: Sharpening Our Focus

Lawn  &  Garden  NAHB  Housing  Starts;  Consumer  Spending  Indices  

26  

-

500

1,000

1,500

2,000

2,500

Hous

ing A

ctivi

ty (0

00)

NAHB Housing Forecast (Nursery Segment Indicator)

Total  Housing  Starts   Single  Family  

(40.0)

(30.0)

(20.0)

(10.0)

0.0

10.0

20.0

30.0

40.0

Annu

al Ra

te o

f Cha

nge

Index of Consumer Sentiment (Potential Greenhouse Segment Indicator)

Housing  Industry  (Nursery)  remains  near  recent  lows;    Consumer  Sentiment  (Greenhouse)  steady  after  a  large  slide  

Page 27: Sharpening Our Focus

Distribution  Replacement  Tire  Shipments;  Miles  Driven;  Fuel  Prices  

27  

-8.00%

-6.00%

-4.00%

-2.00%

0.00%

2.00%

4.00%

6.00%

8.00% US Automotive Indicator Activity

Miles Driven (B) Repl Tire Shipments- Source: RMA and JP Morgan Gasoline Sales (Gal/B) -Source: Energy Information Administration, US Dept. of Energy

All  three  indices  forecast  low,  single-­‐digit  growth  in  2012      

Page 28: Sharpening Our Focus

Engineered  Products  RVIA;  Motor  Vehicle  and  Parts  Production    

MAPI ER-7235

0

50

100

150

200

250

300

350

2010 2011F 2012F 2013F 2014F 2015F

RV Unit Shipments

Source(s): RVIA Forecasts, June 2011

Thousands

Source(s): Federal Reserve Board & Manufacturers Alliance/MAPI simulation of the IHS Global Insight Model

Motor Vehicles & Parts Production

RV  unit  growth  continues  a  low  single-­‐digit  %  growth  pace;  Transplant  auto  production  recovers  in  2012  from  the  tsunami  and  earthquake  impact  to  Asia    

2007

= 10

0

28  

Page 29: Sharpening Our Focus