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MYERS INDUSTRIES, INC. | ||||
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Strengthened Foundation.
Strong ResultsStrong Results.
April 2012
Investor Presentation
HIGLIGHTE
Consistent strategic direction resulted in strong performance in 2011
Adjusted EPS increased 81%
Share price appreciated 27% in 2011; additional 18% YTD 2012
1-year TSR – 3o.2%; 3-year TSR – 19.2% (annualized)
Financial position remains solid, with a flexible balance sheet and financial
liquidity
Balanced approach to capital allocation
8% dividend increase in 2011; 14% increase in 2012 first quarterly dividend
Completed a two million share repurchase, or 5.7% of our common stock
Reduced debt by $9.7 millio_ million
Capital spending of $22 million (34% was for growth projects)
Strong, independent and committed Board
Highly experienced and qualified members
Approximately 70% new directors since 2005
Compensation policies are aligned with Company performance
Recently named one of America’s 100 most trustworthy companies for its
strong corporate governance in an annual survey commissioned by Forbes
GAMCO has not proposed any substantive plans to alter or improve the
strategic direction or execution at Myers Industries
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COMPANY at a Glance
NYSE: MYE
Founded in 193_ 1933
Headquartered in Akron, Ohio
Diversified international manufacturer of polymer
products and wholesale distributor that operates in four
segments:
Material Handling Distribution
Lawn & Garden Engineered Products
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Business segments
Our Strategic Principles & Strengths
Customer Dedication
Innovation
Operations Excellence
Orgnization
Development
Financial
strenght
and productivitMaintain highest standards in safety productivity
Deliver next-generation products/services in high niche markets
Utilize “Voice of the Customer” tools
Market based strategic planning
Structure the organization closer to the customer - decentralize
Build and maintain processes to maximize customer input
Lead our industries in service, quality and delivery
Key Management Capabilities
Generate strong financial results – EBITDA growth, Cash, ROIC
Maintain a strong balance sheet
Build industry leading decision-making tools across the business
Ensure industry-best talent
Make Myers’ training and development a competitive advantage
Maintain _Ensure process for continuous quality, service and productivity
improvement
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Our Goals
Generate returns above cost-of-capital
Produce strong free cash flow
Achieve organic growth > 1.5x GDP
Target a 5% reduction in COGS each year
Maintain strong financial position
Balanced approach to capital allocation including
returning cash to shareholders
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2011 financial highlights
3% of total sales in 2011 came from
new products/solutions
Gross margin expanded 390 basis
points to 26.2%
$14 million of operations excellence
savings were generated during the
year
$737.6
$755.7
$600
$620
$640
$660
$680
$700
$720
$740
$760
$780
2010 2011
SaleSales
Adjusted net income increased 80%
to $23.4 million
Cash flow from operations increased
41% to $64.2 million
Dividend was increased by 8%
Spent $21 million to buy back 2
million shares of stock
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$0.37
$0.67
$0.00
$0.10
$0.20
$0.30
$0.40
$0.50
$0.60
$0.70
$0.80
2010 2011
Adjusted EPS*
*Adjusted EPS for 2010 and 2011 include
adjustments related to one-time expenses
of $71.3M and $4.6M respectively
Our balanced approach to capital Allocation
Working
Capital
Capital
Maintain the
Business
Grow
Shareholder
Value
Return Capital
to Stakeholders
New Product
Development
Process
Dividends
Share
RepurchasCapital e
Expenditures
Safety
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Improvements
Training
Organic
Growth Capital
Bolt-on
Acquisitions
Repurchase
Debt
Reduction
Returning cash to shareholder
$0.13
$0.15
$0.17 $0.18 $0.18 $0.19 $0.20 $0.20
$0.22
$0.24 $0.24
$0.26
$0.28
$0.10
$0.15
$0.20
$0.25
$0.30
Dividend paid each year since public in 1971
1Q 2012 quarterly dividend increased by 14.3%
Dividends PaiDividends Paid
$0.05
1999 2000 2001 2002 2003 2004 2005 2006 2007?²? 2008 2009 2010 2011
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Notes:
1) Above adjusted for stock dividends and splits in 2000, 2001, 2002 and 2004.
2) In 2007 there was an additional special dividend of $0.28 or $9.9M accrued but not paid until 2008, resulting from a merger termination payment.
Two million share repurchase completed in 2011
Spent $21 million to buy back 5.7% of shares
First repurchase in more than a decade
Reduced debt by $9.7 million in 2011
Debt-to-Capital ratio 26%
Leverage ratio 1.07
solid corporate governance principal
Separate roles of CEO and Board Chairman
All directors stand for election annually
No poison pill provision
Broad range of expertise provided by current board
Stock ownership guidelines for officers and directors
Director resignation policy in place
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Effective June 1, 2011, the following changes to the CEO’s employment
agreement were made:
Eliminated the CEO’s employment agreement in favor of a severance
agreement
Eliminated tax gross-up provisions
Eliminated single-trigger change of control protection
Consider and evaluate all shareholder director nominees; seek best
qualified directors
Committed and experienced board
Myers Industries has extremely experienced and effective Board members
overseeing a solid strategic plan and challenging management to drive
additional shareholder value creation.
The Board’s composition includes expertise from diverse areas:
Polymer Manufacturing
Industrial Operations
Finance & Accounting
Sales & Marketing
Risk Management
Strategic Planning
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5 of the 9 directors have joined the board in just the past 5 years
2007: Robert Stefanko
2009: John Crowe
2010: Sarah Coffin
2011: William Foley
2011: Robert Heisler, Jr.
Distribution
Investment Banking
Mergers & Acquisitions
Banking & Capital Formation
Profile of current board of directors
Vincent C. Byrd – served as a Director since 2006
President & Chief Operating Officer, The J.M. Smucker Company (NYSE) and Director
of the J.M. Smucker Company
Expertise in operations, branding, finance, international business, mergers and
acquisitions
Sarah R. Coffin – served as a Director since 2010
Former Chief Executive Officer, Aspen Growth Strategies LLC
Senior-level leadership in polymer industry; expertise in marketing and operations
John B. Crowe – served as a Director since 2009
Chief Executive Officer and Chairman of Buckeye Technologies Inc. (NYSE)
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Expertise in packaging markets, operations, investor relations and strategic planning
William A. Foley – served as Director since 2011
Chairman of the Board of Directors of Libbey, Inc. (NYSE)
Expertise in polymers, lawn and garden markets, distribution, operations and governance
Robert B. Heisler, Jr. – served as Director since 2011
Retired Dean, Kent State University Business School
Director, FirstEnergy Corp. (NYSE); TFS Financial Corporation (NASDAQ)
Former Chief Financial Officer, Kent State University
Former Chairman and Chief Executive Officer, KeyBanc, NA (NSYE)
Expertise in finance, management, mergers and acquisitions and strategic planning
Profile of current board of directors _Richard P. Johnston – served as a Director since 1992
Current Chairman of the Board of Myers Industries; Founder and former CEO of
Buckhorn, Inc.
Managing Director of Jackson Hole Capital Partners
Director of Results Radio, Inc.
Expertise in operations, strategic planning, corporate governance practices, and
mergers and acquisitions
Edward W. Kissel – served as a Director since 2000
President and Managing Partner of Kissel Group Ltd.
Expertise in manufacturing, sales, marketing, strategic planning, mergers
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and acquisitions
John C. Orr – served as a Director since 2005
President and Chief Executive Officer of Myers Industries
Director of Libbey Inc. (NYSE)
Expertise in polymer manufacturing, strategic planning, operations and mergers
and acquisitions
Robert A. Stefanko – served as a Director since 2007
Former Chairman of the Board and Executive Vice President of Finance and
Administration of A. Schulman, Inc.
Director and member of Audit Committee of OMNOVA Solutions, Inc. (NYSE)
Expertise in polymers, finance, risk management and compensation
Background and history with GAMCO
The Company has made every effort over the last several years to understand and
respond to GAMCO’s concerns regarding the Board of Directors:
In November 2008, GAMCO sent a letter to the Company announcing its intention to
nominate 3 nominees for election to the Board of Directors at the 2009 Annual Meeting of
Shareholders.
Upon receiving GAMCO’s letter, a representative of the Company’s Board contacted GAMCO
to further inquire about specific concerns of GAMCO relating to the Company. The
individuals noted in GAMCO’s letter were invited to participate in the regular Board candidate
vetting process.
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GAMCO declined to have its individuals participate in the Company’s review process and
failed to articulate any specific concerns that it had regarding the operations of the
Company.
The Company identified and evaluated a highly qualified candidate, John Crowe, and
nominated him for election to the Board of Directors at the 2009 Annual Meeting of
Shareholders.
The Company received no further communications from GAMCO regarding the Company
until the filing of GAMCO’s preliminary proxy statement with the SEC on March 30, 2009.
At the April 30, 2009, Annual Meeting of Shareholders, shareholders strongly supported the
full Company Director slate and did not support the GAMCO slate.
Background and history with GAMCO In May 2009, GAMCO disclosed that it intended to submit one or more individuals as
nominees for election to the Board of Directors at the 2010 Annual Meeting.
Management of the Company engaged in several conversations with Mr. Mario
Gabelli, principal of GAMCO, to understand GAMCO’s specific concerns relating to the
Company and its Board.
At NO TIME did Mr. Gabelli relate specific concerns with the Company’s strategy,
operations or management.
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On October 30 and again on November 13, 2009, GAMCO disclosed that it had sent
letters to the Company announcing its intention to nominate three individuals for
election to the Board of Directors at the 2010 Annual Meeting.
The Company identified and evaluated a highly qualified candidate, Sarah Coffin, and
nominated her for election to the Board of Directors at the 2010 Annual Meeting of
Shareholders.
At the April 30, 2010, Annual Meeting of Shareholders, shareholders strongly
supported the full Company Director slate and did not support the GAMCO slate.
Background and history with GAMCO In May 2009, GAMCO
The Company identified two highly qualified candidates for the Board, William
A. Foley and Robert B. Heisler, Jr. , and nominated both individuals for election
to the Board at the 2011 Annual Meeting of Shareholders.
On February 28, 2011, without any other communication to the Company,
GAMCO disclosed that it had sent a letter to the Company recommending two
individuals for nomination for election as directors of the Company at the
Annual Meeting of Shareholders.
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Recognizing GAMCO
expense and distraction of a costly proxy fight, the Company offered to add
one of GAMCO
Shareholders. GAMCO and the Company were unable to reach agreement on
the Company
At the April 29, 2011 Annual Meeting of Shareholders, shareholders strongly
supported the full Company Director slate and did not support the GAMCO
slate.
Background and history with GAMCO In November 2011, GAMCO disclosed that it had sent a letter to the Company
announcing its intention to nominate at least four individuals as directors at the 2012
Annual Meeting of Shareholders.
On February 15, 2012, GAMCO disclosed that it had sent a letter to the Company
announcing that it was recommending Richard L. Bready and Robert S. Prather for
election to the Board of Directors at the 2012 Annual Meeting.
As in each of the prior years, despite its efforts, Myers has been unable to engage in a
meaningful dialogue with GAMCO regarding any specific concerns or initiatives that
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GAMCO would like addressed. GAMCO files the same proxy materials each year, just
changing the names and dates. To date, only one of the GAMCO nominees has
completed the package of information required of any new nominee to be considered
by the Corporate Governance and Nominating Committee. Having reviewed that
response (which was exactly the same as last year’s response and the same as
the response from the year before that), the Committee determined that the
Company’s slate of directors is best qualified to serve the interests of all of the
shareholders and execute on the Company’s strategic plans.
As in each of the prior years, GAMCO has failed to offer any alternative strategic
plan to create additional value for shareholders and has consistently refused to
communicate its specific concerns to management or the Board.
Conclude GAMCO has consistently failed to articulate any specific concerns
regarding the Company’s operations or propose a new strategy for the
Company going forward.
GAMCO has not articulated any special qualifications of the individuals it
seeks to put on the Company’s board that might make them more suited
to serve as directors of the Company than the nominees recommended by
the Board of Directors.
In the past three years, the Company has nominated and shareholders
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have elected four new, highly-qualified directors to the Board.
In the past three years, the Company has delivered TSR of 19.2% on an
annualized basis, while paying dividends, reducing expenses and investing
for future growth and increased productivity.
Shareholders are urged to vote FOR the Company’s
Directors on the WHITE proxy card
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 includeapplicable 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.
19
Mimyers
Industries,
inc