sharpening our focus
TRANSCRIPT
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.
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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
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¡ 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
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34%
29%
23%
1 4%
2010 Sales by Segment
Material Handling -‐$257.8M
Lawn & Garden -‐$223.8M
Distribution -‐$174.9M
Engineered Products -‐ $104.8M
§ Bulk containers, totes, pallets § Bins, shelving, storage systems Products
Brands
Markets
Customers
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§ 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
§ Nursery
§ Grower pots § Trays § Hanging baskets
§ Decorative planters for consumer use
Products
Brands
Markets
Customers
§ Greenhouse § Retail
§ Large nursery containers § Pots § Trays
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Containers to Grow Beautiful. Grow Profitable.
Nursery Containers for Growing Needs.
From Seed to Sold Containers & Planter for Healthy Growth.
§ Retail tire dealers § Truck tire dealers
Products
Brands
Markets
Customers
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§ 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
§ 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.
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Innovation in Customer Plastic Rotational Molding
A Leader in Tire Repair, Re-‐ tread & Custom Rubber Products
Engineering Excellence for Custom Blow Molded Products
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
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$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*
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*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
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
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2009 2010 2009 2010 2010 2010 2011 2011 Sept Dec Mar June
Resin Cost ↑ year-‐over-‐year
19% 19% 13% 18%
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 $9.9M (pre-‐tax), resulting from the same merger termination payment.
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$(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
¡ Dividend paid each year since public in 1971 q Gradually increased over nearly 40 years
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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
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
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Note: 1) Debt-‐to-‐Capital ratio calculated as debt/(debt+equity).
Debt to Capital Ratio
¡ 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
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Strategic Principles Delivering Results
¡ 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
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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
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§ Debt reduction
¡ 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
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(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
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Material Handling Equipment will benefit from continued corporate investment, with growth potentially in the low double digit range % in 2012
Lawn & Garden NAHB Housing Starts; Consumer Spending Indices
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-
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
Distribution Replacement Tire Shipments; Miles Driven; Fuel Prices
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-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
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
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