Q3 2016 Myers Industries Inc. Earnings Presentation Final

NOVEMBER 8, 2016 – THIRD QUARTER EARNINGS PRESENTATION
MYERS INDUSTRIES, INC.
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 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 for 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.myersindustries.com and at the SEC.gov web site.
2
3
Q3 2016 SUMMARY
WEAK CAPITAL SPENDING CONTINUES TO IMPACT RESULTS
» Q3 sales in line with expectations
» Net sales $132.7M, a decrease of 6% to prior year
» Continued difficult capital spending environment in several key markets
» Distribution sales initiative still in early innings; making progress
» Gross margin reduction of 230 basis points to 27.1%
» Lower volume
» Unfavorable product mix and operational inefficiencies
» SG&A reduction of $6M due primarily to lower non-recurring comp,
lower environmental costs and other cost containment actions
» GAAP EPS from continuing operations $0.01 vs. $0.02 in 2015
» Adjusted EPS from continuing operations $0.04 vs. $0.09 in 2015
» YTD free cash flow of $7.1M vs. ($10.5M) in 2015
» Cash from operations up due to working capital process improvements
» Capital spending down
4
Q3 GAAP FINANCIAL SUMMARY
CONTINUING OPERATIONS
Q3
2015
Q3
2016
NET SALES $ 141.7 $ 132.7 - 6.3%; - 6.7% organic
GROSS PROFIT
GROSS MARGIN
$ 41.7
29.4%
$ 35.9
27.1%
- 230 bps
SG&A $ 39.1 $ 32.9 15.8% improvement
OPERATING INCOME
OPERATING MARGIN
$ 2.6
1.8%
$ 3.0
2.3%
+ 50 bps
NET INTEREST EXPENSE $ 1.7 $ 2.0
INCOME FROM CONTINUING OPS
BEFORE INCOME TAXES
$ 0.8 $ 1.0
INCOME TAX EXPENSE $ 0.2 $ 0.5
INCOME FROM CONTINUING OPS $ 0.6 $ 0.4
EPS FROM CONTINUING OPS $ 0.02 $ 0.01
IN $MILLIONS EXCEPT RATIOS AND PERCENTAGES
5
Q3 ADJUSTED FINANCIAL SUMMARY
CONTINUING OPERATIONS
Q3
2015
Q3
2016
NET SALES $ 141.7 $ 132.7 - 6.3%; - 6.7% organic
ADJ. GROSS PROFIT
GROSS MARGIN
$ 42.4
30.0%
$ 35.9
27.1%
- 290 bps
ADJ. SG&A $ 36.6 $ 32.0 12.4% improvement
ADJ. OPERATING INCOME
OPERATING MARGIN
$ 5.9
4.2%
$ 3.9
2.9%
- 130 bps
NET INTEREST EXPENSE $ 1.7 $ 2.0
ADJ. INCOME FROM CONTINUING OPS
BEFORE INCOME TAXES
$ 4.2 $ 1.9
INCOME TAX EXPENSE $ 1.5 $ 0.7
ADJ. INCOME FROM CONTINUING OPS
INCOME MARGIN
$ 2.7
1.9%
$ 1.2
0.9%
ADJ. EPS FROM CONTINUING OPS $ 0.09 $ 0.04
IN $MILLIONS EXCEPT RATIOS AND PERCENTAGES
See appendix for reconciliations from GAAP to adjusted results
$12.5M ADJUSTED EBITDA COMPARED TO $14.4M IN PRIOR-YEAR QUARTER
6
BALANCE SHEET & CASH FLOW
See appendix for reconciliations from GAAP to adjusted results
YTD CASH FLOW
WORKING CAPITAL AS A % OF SALES
12.8%
10.2%
9.1%
Q3 2014 Q3 2015 Q3 2016
DISCIPLINED WORKING CAPITAL AND CAPITAL SPENDING
$(2.8)
$(10.9)
$(13.7)
$7.1
$(17.7)
$(10.5)
$18.6
$(11.5)
$7.1
Cash from Cont. Ops CapEx Free Cash Flow
2014 2015 2016
BALANCE SHEET
09/30/15 09/30/16
Cash 5.2$ 5.5$
Debt 214.7 197.9
Net Debt 209.5$ 192.4$
Adjusted TTM EBITDA 74.1$ 65.8$
Net Debt-to-Adj. EBITDA 2.8x 2.9x
7
Q3 2016 SEGMENT RESULTS
» Sales down 13%:
» Market indicators positive
» Reduced capital spending continues to impact
equipment sales; retread markets remain slow
» Sales team initiative progressing; steady sequential
pace but still down year-over-year
» Share gains with vending installs at large auto
dealer group
» Q3 margin decline due to lower sales volumes and
cost reallocations from corporate to reflect correct
segment cost structure
» Sales down 2.8% (down 3.4% organic):
» Capital spending remains down in food and
beverage markets
» In vehicle market, steady share gains in automotive
and strong sales in RV
» Progress in industrial markets; slow overall pace
» Share gains at Scepter for 2017 during seasonal
buying process
» Unfavorable mix in Q3; results also impacted by
operational inefficiencies and cost reallocations from
corporate to reflect correct segment cost structure
MATERIAL HANDLING DISTRIBUTION
COMMERCIAL EXECUTION CONTINUES TO BE THE PRIORITY
$92.5 $89.9
$7.4
$4.4
$0.0
$2.0
$4.0
$6.0
$8.0
$10.0
$0.0
$20.0
$40.0
$60.0
$80.0
$100.0
Q3 2015 Q3 2016 Q3 2015 Q3 2016
Net Sales Op Inc.
$49.2
$42.8
$5.6
$3.3
$0.0
$2.0
$4.0
$6.0
$8.0
$10.0
$0.0
$10.0
$20.0
$30.0
$40.0
$50.0
$60.0
Q3 2015 Q3 2016 Q3 2015 Q3 2016
Net Sales Op Inc.
8
2016 OUTLOOK AND STRATEGY UPDATE
CONSUMER
12%
VEHICLE
13%
FOOD & BEVERAGE
16%
AUTO
AFTERMARKET
30%
INDUSTRIAL
29%
MID
SINGLE DIGITS
HIGH SINGLE
DIGITS
MID
SINGLE DIGITS
HIGH-TEENS
FLAT
PERCENT OF 2015 SALES MYE 2016 GROWTH OUTLOOK
Outlook
» Holding prior outlook; Q4 & FY revenue expected
to be down mid-to-high single digits
» Continued weakness in capital spending in both
segments
» Steady sales run rate in Distribution segment
Strategic Update
» Senior leadership team now in place
» Finalizing enterprise strategy that supports
competitive strengths
» Key themes:
» Protect the core
» Safe and efficient solutions for niche end-
markets
» Simplify
» More flexible operating model
» Near-term priorities:
» Further develop our capability to execute
niche market commercial strategies
» Implement a culture of continuous process
improvement
» Debt reduction/more flexible balance sheet
SAFETY AND EFFICIENCY FOR OUR CUSTOMERS AND OUR BUSINESSES
APPENDIX
» Capital expenditures: $12 - $14 million
» Net interest expense: $8 - $9 million
» D&A: $34 - $35 million
» Effective tax rate (normalized): 36%
10
2016 KEY ASSUMPTIONS
11
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 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 gross profit 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 gross
profit excluding these items as well as other financial measures in connection with its decision-making activities. Gross profit excluding these items should not be considered in
isolation or as a substitute for gross profit prepared in accordance with GAAP. The Company's method for calculating gross profit excluding these items may not be comparable
to methods used by other companies.
Quarter Ended For the nine months ended
September 30, 2016 September 30, 2015 September 30, 2016 September 30, 2015
Gross profit as reported $ 35,918 $ 41,686 $ 128,625 $ 138,024
Restructuring expenses and other adjustments in cost of sales
Material Handling segment - 762 - 1,057
Distribution segment - - - -
Gross profit as adjusted $ 35,918 $ 42,448 $ 128,625 $ 139,081
12
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 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.
Quarter Ended Nine Months Ended
September 30,
2016
September 30,
2015
September 30,
2016
September 30,
2015
Selling, general and administrative expenses as reported $ 32,932 $ 39,108 $ 103,470 $ 108,987
Restructuring expenses and other adjustments in selling, general and
administrative expenses
Material Handling segment (292) (448) 2,043 2,317
Distribution segment - (142) - (195)
Corporate (605) (1,965) (4,166) (3,771)
Selling, general and administrative expenses as adjusted $ 32,035 $ 36,553 $ 101,347 $ 107,338
13
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 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%.
14
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. 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.
Quarter Ended TTM
31-Dec-14 31-Mar-15 30-Jun-15 30-Sep-15 30-Sep-15
Net Income as Reported Continuing Operations $ 1,489 $ 2,622 $ 10,925 $ 631 $ 15,667
Add: tax expense 991 1,392 6,350 218 8,951
Add: net interest expense 2,647 2,702 2,467 1,729 9,545
Add: depreciation 6,424 6,489 6,801 5,926 25,640
Add: amortization 2,724 2,638 2,641 2,575 10,578
EBITDA 14,275 15,843 29,184 11,079 70,381
Add: one-time unusual charges 1,031 1,950 (2,561) 3,317 3,737
EBITDA As Adjusted 15,306 17,793 26,623 14,396 74,118
Quarter Ended TTM
31-Dec-15 31-Mar-16 30-Jun-16 30-Sep-16 30-Sep-16
Net Income as Reported Continuing Operations $ (125) $ (3,336) $ 5,684 $ 424 $ 2,647
Add: tax expense (151) 2,446 3,429 547 6,271
Add: net interest expense 2,100 2,019 2,053 2,015 8,187
Add: depreciation 5,496 6,000 6,283 6,182 23,961
Add: amortization 2,413 2,499 2,482 2,447 9,841
EBITDA 9,733 9,628 19,931 11,615 50,907
Add: one-time unusual charges 2,906 10,556 544 897 14,903
EBITDA As Adjusted 12,639 20,184 20,475 12,512 65,810
Q3 2016 Myers Industries Inc. Earnings Presentation Final
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Q3 2016 Myers Industries Inc. Earnings Presentation Final

  • 1. NOVEMBER 8, 2016 – THIRD QUARTER EARNINGS PRESENTATION MYERS INDUSTRIES, INC.
  • 2. 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 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 for 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.myersindustries.com and at the SEC.gov web site. 2
  • 3. 3 Q3 2016 SUMMARY WEAK CAPITAL SPENDING CONTINUES TO IMPACT RESULTS » Q3 sales in line with expectations » Net sales $132.7M, a decrease of 6% to prior year » Continued difficult capital spending environment in several key markets » Distribution sales initiative still in early innings; making progress » Gross margin reduction of 230 basis points to 27.1% » Lower volume » Unfavorable product mix and operational inefficiencies » SG&A reduction of $6M due primarily to lower non-recurring comp, lower environmental costs and other cost containment actions » GAAP EPS from continuing operations $0.01 vs. $0.02 in 2015 » Adjusted EPS from continuing operations $0.04 vs. $0.09 in 2015 » YTD free cash flow of $7.1M vs. ($10.5M) in 2015 » Cash from operations up due to working capital process improvements » Capital spending down
  • 4. 4 Q3 GAAP FINANCIAL SUMMARY CONTINUING OPERATIONS Q3 2015 Q3 2016 NET SALES $ 141.7 $ 132.7 - 6.3%; - 6.7% organic GROSS PROFIT GROSS MARGIN $ 41.7 29.4% $ 35.9 27.1% - 230 bps SG&A $ 39.1 $ 32.9 15.8% improvement OPERATING INCOME OPERATING MARGIN $ 2.6 1.8% $ 3.0 2.3% + 50 bps NET INTEREST EXPENSE $ 1.7 $ 2.0 INCOME FROM CONTINUING OPS BEFORE INCOME TAXES $ 0.8 $ 1.0 INCOME TAX EXPENSE $ 0.2 $ 0.5 INCOME FROM CONTINUING OPS $ 0.6 $ 0.4 EPS FROM CONTINUING OPS $ 0.02 $ 0.01 IN $MILLIONS EXCEPT RATIOS AND PERCENTAGES
  • 5. 5 Q3 ADJUSTED FINANCIAL SUMMARY CONTINUING OPERATIONS Q3 2015 Q3 2016 NET SALES $ 141.7 $ 132.7 - 6.3%; - 6.7% organic ADJ. GROSS PROFIT GROSS MARGIN $ 42.4 30.0% $ 35.9 27.1% - 290 bps ADJ. SG&A $ 36.6 $ 32.0 12.4% improvement ADJ. OPERATING INCOME OPERATING MARGIN $ 5.9 4.2% $ 3.9 2.9% - 130 bps NET INTEREST EXPENSE $ 1.7 $ 2.0 ADJ. INCOME FROM CONTINUING OPS BEFORE INCOME TAXES $ 4.2 $ 1.9 INCOME TAX EXPENSE $ 1.5 $ 0.7 ADJ. INCOME FROM CONTINUING OPS INCOME MARGIN $ 2.7 1.9% $ 1.2 0.9% ADJ. EPS FROM CONTINUING OPS $ 0.09 $ 0.04 IN $MILLIONS EXCEPT RATIOS AND PERCENTAGES See appendix for reconciliations from GAAP to adjusted results $12.5M ADJUSTED EBITDA COMPARED TO $14.4M IN PRIOR-YEAR QUARTER
  • 6. 6 BALANCE SHEET & CASH FLOW See appendix for reconciliations from GAAP to adjusted results YTD CASH FLOW WORKING CAPITAL AS A % OF SALES 12.8% 10.2% 9.1% Q3 2014 Q3 2015 Q3 2016 DISCIPLINED WORKING CAPITAL AND CAPITAL SPENDING $(2.8) $(10.9) $(13.7) $7.1 $(17.7) $(10.5) $18.6 $(11.5) $7.1 Cash from Cont. Ops CapEx Free Cash Flow 2014 2015 2016 BALANCE SHEET 09/30/15 09/30/16 Cash 5.2$ 5.5$ Debt 214.7 197.9 Net Debt 209.5$ 192.4$ Adjusted TTM EBITDA 74.1$ 65.8$ Net Debt-to-Adj. EBITDA 2.8x 2.9x
  • 7. 7 Q3 2016 SEGMENT RESULTS » Sales down 13%: » Market indicators positive » Reduced capital spending continues to impact equipment sales; retread markets remain slow » Sales team initiative progressing; steady sequential pace but still down year-over-year » Share gains with vending installs at large auto dealer group » Q3 margin decline due to lower sales volumes and cost reallocations from corporate to reflect correct segment cost structure » Sales down 2.8% (down 3.4% organic): » Capital spending remains down in food and beverage markets » In vehicle market, steady share gains in automotive and strong sales in RV » Progress in industrial markets; slow overall pace » Share gains at Scepter for 2017 during seasonal buying process » Unfavorable mix in Q3; results also impacted by operational inefficiencies and cost reallocations from corporate to reflect correct segment cost structure MATERIAL HANDLING DISTRIBUTION COMMERCIAL EXECUTION CONTINUES TO BE THE PRIORITY $92.5 $89.9 $7.4 $4.4 $0.0 $2.0 $4.0 $6.0 $8.0 $10.0 $0.0 $20.0 $40.0 $60.0 $80.0 $100.0 Q3 2015 Q3 2016 Q3 2015 Q3 2016 Net Sales Op Inc. $49.2 $42.8 $5.6 $3.3 $0.0 $2.0 $4.0 $6.0 $8.0 $10.0 $0.0 $10.0 $20.0 $30.0 $40.0 $50.0 $60.0 Q3 2015 Q3 2016 Q3 2015 Q3 2016 Net Sales Op Inc.
  • 8. 8 2016 OUTLOOK AND STRATEGY UPDATE CONSUMER 12% VEHICLE 13% FOOD & BEVERAGE 16% AUTO AFTERMARKET 30% INDUSTRIAL 29% MID SINGLE DIGITS HIGH SINGLE DIGITS MID SINGLE DIGITS HIGH-TEENS FLAT PERCENT OF 2015 SALES MYE 2016 GROWTH OUTLOOK Outlook » Holding prior outlook; Q4 & FY revenue expected to be down mid-to-high single digits » Continued weakness in capital spending in both segments » Steady sales run rate in Distribution segment Strategic Update » Senior leadership team now in place » Finalizing enterprise strategy that supports competitive strengths » Key themes: » Protect the core » Safe and efficient solutions for niche end- markets » Simplify » More flexible operating model » Near-term priorities: » Further develop our capability to execute niche market commercial strategies » Implement a culture of continuous process improvement » Debt reduction/more flexible balance sheet SAFETY AND EFFICIENCY FOR OUR CUSTOMERS AND OUR BUSINESSES
  • 10. » Capital expenditures: $12 - $14 million » Net interest expense: $8 - $9 million » D&A: $34 - $35 million » Effective tax rate (normalized): 36% 10 2016 KEY ASSUMPTIONS
  • 11. 11 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 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 gross profit 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 gross profit excluding these items as well as other financial measures in connection with its decision-making activities. Gross profit excluding these items should not be considered in isolation or as a substitute for gross profit prepared in accordance with GAAP. The Company's method for calculating gross profit excluding these items may not be comparable to methods used by other companies. Quarter Ended For the nine months ended September 30, 2016 September 30, 2015 September 30, 2016 September 30, 2015 Gross profit as reported $ 35,918 $ 41,686 $ 128,625 $ 138,024 Restructuring expenses and other adjustments in cost of sales Material Handling segment - 762 - 1,057 Distribution segment - - - - Gross profit as adjusted $ 35,918 $ 42,448 $ 128,625 $ 139,081
  • 12. 12 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 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. Quarter Ended Nine Months Ended September 30, 2016 September 30, 2015 September 30, 2016 September 30, 2015 Selling, general and administrative expenses as reported $ 32,932 $ 39,108 $ 103,470 $ 108,987 Restructuring expenses and other adjustments in selling, general and administrative expenses Material Handling segment (292) (448) 2,043 2,317 Distribution segment - (142) - (195) Corporate (605) (1,965) (4,166) (3,771) Selling, general and administrative expenses as adjusted $ 32,035 $ 36,553 $ 101,347 $ 107,338
  • 13. 13 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 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%.
  • 14. 14 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. 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. Quarter Ended TTM 31-Dec-14 31-Mar-15 30-Jun-15 30-Sep-15 30-Sep-15 Net Income as Reported Continuing Operations $ 1,489 $ 2,622 $ 10,925 $ 631 $ 15,667 Add: tax expense 991 1,392 6,350 218 8,951 Add: net interest expense 2,647 2,702 2,467 1,729 9,545 Add: depreciation 6,424 6,489 6,801 5,926 25,640 Add: amortization 2,724 2,638 2,641 2,575 10,578 EBITDA 14,275 15,843 29,184 11,079 70,381 Add: one-time unusual charges 1,031 1,950 (2,561) 3,317 3,737 EBITDA As Adjusted 15,306 17,793 26,623 14,396 74,118 Quarter Ended TTM 31-Dec-15 31-Mar-16 30-Jun-16 30-Sep-16 30-Sep-16 Net Income as Reported Continuing Operations $ (125) $ (3,336) $ 5,684 $ 424 $ 2,647 Add: tax expense (151) 2,446 3,429 547 6,271 Add: net interest expense 2,100 2,019 2,053 2,015 8,187 Add: depreciation 5,496 6,000 6,283 6,182 23,961 Add: amortization 2,413 2,499 2,482 2,447 9,841 EBITDA 9,733 9,628 19,931 11,615 50,907 Add: one-time unusual charges 2,906 10,556 544 897 14,903 EBITDA As Adjusted 12,639 20,184 20,475 12,512 65,810