Investor Presentation May 2018
SAFE HARBOR STATEMENT & NON-GAAP MEASURES Forward-Looking Statements 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. Any statement that is not of historical fact may be deemed forward-looking. Words such as will, expect, believe, project, plan, anticipate, intend, objective, goal, view and similar expressions identify forward-looking statements. These statements are based on management s current views and assumptions of future events and financial performance and involve a number of known and unknown risks, uncertainties and other factors, many outside the Company s control, that could cause actual events or results to differ materially from those expressed or implied. We do not guarantee that the transactions and events described will happen as described (or that they will happen at all). 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. Such risks include: (1) Raw material availability, increases in raw material costs, or other production costs (2) Risks associated with our strategic growth initiatives or the failure to achieve the anticipated benefits of such initiatives (3) Unanticipated downturn in business relationships with customers or their purchases (4) Competitive pressures on sales and pricing (5) Changes in the markets for the Company s business segments (6) Changes in trends and demands in the markets in which the Company competes (7) Unexpected failures at our manufacturing facilities (8) Future economic and financial conditions in the United States and around the world (9) Inability of the Company to meet future capital requirements (10) Claims, litigation and regulatory actions against the Company (11) Changes in laws and regulations affecting the Company (12) Other risks as detailed in the Company s 10-K and other reports filed with the Securities Exchange Commission 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 by visiting EDGAR on the SEC web site at www.sec.gov. Non-GAAP Financial Measures The Company refers to certain non-gaap financial measures throughout this presentation. Adjusted EPS, adjusted income per diluted share from continuing operations, adjusted operating income, adjusted EBITDA and free cash flow are non-gaap financial measures and are intended to serve as a supplement to results provided in accordance with accounting principles generally accepted in the United States. The Company believes that such information provides an additional measurement and consistent historical comparison of the Company s performance. A reconciliation of the non-gaap financial measures to the most directly comparable GAAP measures is available in the appendix of this presentation. Statements in this presentation speak only as of the date made. 2
OUR PATH TO SUCCESS: MYERS INVESTMENT HIGHLIGHTS MARKET LEADING POSITIONS ACROSS DIVERSE, NICHE MARKETS INDUSTRY DEFINING BRANDS STRONG SECULAR GROWTH TRENDS ESTABLISHED CHANNELS TO MARKET THROUGH SUPERIOR INTIMACY WITH A DIVERSE CUSTOMER BASE FLEXIBLE OPERATIONS AND CONTINUOUS IMPROVEMENT CULTURE SUPPORTS PROFITABLE GROWTH SEASONED MANAGEMENT TEAM EXECUTING A SOLID PLAN COMPELLING STRATEGY TO DRIVE EARNINGS GROWTH 3
MYERS PROVIDES DIVERSE SOLUTIONS TO IMPROVE SAFETY, HEALTH AND EFFICIENCY ACROSS NICHE MARKETS BUSINESS HIGHLIGHTS KEY DATA (2017)» A market leader focused on a #1 or #2 position in diverse, niche markets A leading manufacturer of a diverse range of material handling and storage solutions A leading distributor to the U.S. tire, wheel and undervehicle service industry» Seven strong brands, each with a unique value proposition and differentiated offerings» Building an asset light business model to provide operational and financial flexibility» Long-standing relationships with diverse, blue-chip customers and channel partners» ~1,900 employees responsible for manufacturing ~15,000 products and distributing 13,500+ products» Market leading positions and strong brands cultivated over 80 years of operations Auto Aftermarket Net Sales $547M End Market 28% Industrial 26% 14% 17% Consumer 14% Food & Beverage Vehicle Material Handling FINANCIAL METRICS 1 NET REVENUE MIX Adjusted EBITDA Margin 11% Distribution LEADING BRANDS Segment 29% 71% Distribution Material Handling 1 Reflects continuing operations. See appendix for non-gaap reconciliations. 4
MYERS HAS TRANSFORMED THE ORGANIZATION SIGNIFICANT ACCOMPLISHMENTS SINCE 2015 MYERS TODAY UPGRADED LEADERSHIP TEAM INSTILLED NICHE MARKET FOCUS INVESTED IN THE SALES FORCE ESTABLISHED OPERATIONAL EXCELLENCE BEGAN BUILDING A GROWTH INFRASTRUCTURE» Installed a high-caliber leadership team» 80% of current executive team added since 2015» Identified five key niche markets for growth» Divested non-core, commodity businesses» Implemented tools to enhance effectiveness across both the sales force and pricing» Invested in marketing resources and innovation» Instituted 80/20 and lean initiatives» >30% footprint reduction» ~19% headcount reduction» Established an acquisition funnel with clear strategic objectives and return thresholds» Focus on cash flow and debt reduction Growth platform with leading positions in niche markets Leaner operating footprint and more asset light business model generating $10M in annual cost savings Decentralized organization; employees are trained to Act Like Owners Improved cash flow profile M&A a key option to drive enhanced cash returns, growth and margins Management team focused on delivering a clear strategy Safer, healthier, more efficient ESTABLISHED AN ENTERPRISE STRATEGY TO POSITION THE ORGANIZATION FOR GROWTH 5
MYERS HAS INSTITUTED A ROBUST ENTERPRISE STRATEGY GOAL STRATEGY We think and operate for the long-term and maintain a continuous improvement mindset. Value R. David Banyard Creation Act Like Owners Cash Flow Growth Niche Market Focus Flexible Operations MISSION Safer Healthier More Efficient CULTURE Structured and Organized Bias For Action Analytical and Results Oriented Customer Intimacy Flexible and Exploratory Transparency and Integrity Humble and Team-oriented ESTABLISHED FRAMEWORK FOR DRIVING GROWTH AND OUTPERFORMANCE WITHIN THE BUSINESS 6
LEADING PROVIDER OF A COMPREHENSIVE SUITE OF OFFERINGS BRANDS SELECT PRODUCTS 2017 FINANCIALS 1 MATERIAL HANDLING $391M Net Sales $44M Adj. Operating Income $156M Net Sales DISTRIBUTION $9M Adj. Operating Income 1 Reflects continuing operations. See appendix for non-gaap reconciliations. 7
STRONG SECULAR GROWTH TRENDS Key Macro Themes Resilient and growing industrial backdrop INDUSTRIAL Strong consumer sentiment Expanding agriculture end markets Automobile-dependent U.S. economy FOOD & BEVERAGE Significant rebound in production coupled with strong macroeconomic outlook» Highest US Manufacturing PMI in over three years» 3%+ 2018 Global GDP growth Increasing demand across agricultural and food processing markets VEHICLE Significant installed base in recreational vehicles and marine with continued demand growth» ~55M people in U.S. and Canada over 65 years old» U.S. farm cash receipts currently ~15% below peak» U.S. population sustaining steady growth AUTO AFTERMARKET Large market; many cars on the road requiring maintenance and repair» 250M+ U.S. registered vehicles» Increased participation among younger buyers» Large installed base: ~7M U.S. households have RVs CONSUMER Strong consumer sentiment including amongst outdoor enthusiasts» 17M+ cars and trucks produced in North America annually» Tire Demand Index indicating expanding market» Consumer sentiment currently very strong at ~99 Source: Markit, Northcoast Research Tire Demand Index, Statista, The World Factbook CIA, University of Michigan, USDA» U.S. unemployment rate is the lowest in 17 years 8
COMPELLING STRATEGY TO DRIVE EARNINGS GROWTH NICHE MARKET FOCUS FLEXIBLE OPERATIONS STRATEGIC M&A 1» Drive further market penetration across Material Handling» Leverage strategic customer relationships» Continued product innovation» Sales tools and strategies 2» Drive enhanced sales effectiveness across Distribution 3» Identify and enter new niche markets where we can win» Leverage 80/20 initiatives to focus on higher value customers» Continued simplification of operations through further footprint reduction and implementation of lean initiatives» Value-added process improvement initiatives» Identify partnership opportunities with outsourced manufacturers Robust pipeline of opportunities Deliver superior cash return on investment Established M&A criteria» Enhance current portfolio» Generally #1 or #2 in niche markets» Asset light businesses» Accretive to cash flow and operating margin STRONG CASH FLOW GROWTH THE MYERS MANAGEMENT TEAM HAS A ROBUST PLAN FOR DRIVING EARNINGS GROWTH 9
SUMMARY FINANCIALS $571 NET SALES ($M) $534 $547 $72 ADJ. EBITDA $64 $60 2015A 2016A 2017A CAPITAL EXPENDITURES AND NWC 1 ($M) $22 2015A 2016A 2017A % Margin 13% 12% 11% Adj. Op Inc. % Margin 7% 6% 6% FREE CASH FLOW 3 ($M) $43 $12 $6 $22 $21 2015A 2016A 2017A % MH Sales 6% 3% 1% NWC % Net Sales 4% 2 8% 2 5% Note: Reflects continuing operations. See appendix for non-gaap reconciliations. 1 NWC defined as accounts receivable plus net inventory plus prepaid expenses and other assets less accounts payable less accrued expenses 2 Includes discontinued operations from Brazil business 2015A 2016A 2017A % Net Sales 4% 4% 8% Note: Reflects continuing operations. See appendix for non-gaap reconciliations. 3 Free cash flow defined as Operating Cash Flow from Continuing Operations less Capital Expenditures 10
Q1 UPDATE NET SALES ($M) FREE CASH FLOW 1 ($M) $137 $153 $13 $12 Q1 '17 Q1 '18 Q1 '17 Q1 '18 % Net Sales 9% 8% ADJUSTED EBITDA ($M) NET LEVERAGE $17 $18 3.0x 2.3x Q1 '17 Q1 '18 Q1 '17 Q1 '18 % Margin 12% 12% Adj. Op. Inc. % Margin 6% 8% Note: Reflects continuing operations. See appendix for non-gaap reconciliations. 1 Free cash flow defined as Operating Cash Flow from Continuing Operations less Capital Expenditures 11
FREE CASH FLOW SUMMARY Free Cash Flow from Operations Impact of Cash Flow from Discontinued Operations Free Cash Flow from Continuing Operations ANNUAL YEARLY FREE CASH FLOW 1 ($M) $43 5 COMMENTARY» Actions resulting in stabilized free cash flow performance $22 25 $21 21 39» Implementing asset light and lean operations 2015A 2016A 2017A % Net Sales 4% 4% 8%» Disciplined approach to working capital and capex spending driving strong cash flow generation $10 QUARTERLY FREE CASH FLOW AS REPORTED 2 ($M) $36 $21 $14 $13 $9 $10 $5 $2 $8 $12» Long-term, continued improvement is expected to support both organic and acquisitive growth ($23) ($18) Q1 '15 Q2 '15 Q3 '15 Q4 '15 Q1 '16 Q2 '16 Q3 '16 Q4 '16 Q1 '17 Q2 '17 Q3 '17 Q4 '17 Q1 '18 1 Free cash flow defined as Operating Cash Flow from Continuing Operations less Capital Expenditures 2 As reported, includes all continuing operations at the time of the quarter-end; Free cash flow defined as Operating Cash Flow less Capital Expenditures 12
OUR PATH TO SUCCESS: MYERS INVESTMENT HIGHLIGHTS MARKET LEADING POSITIONS ACROSS DIVERSE, NICHE MARKETS INDUSTRY DEFINING BRANDS STRONG SECULAR GROWTH TRENDS ESTABLISHED CHANNELS TO MARKET THROUGH SUPERIOR INTIMACY WITH A DIVERSE CUSTOMER BASE FLEXIBLE OPERATIONS AND CONTINUOUS IMPROVEMENT CULTURE SUPPORTS PROFITABLE GROWTH SEASONED MANAGEMENT TEAM EXECUTING A SOLID PLAN COMPELLING STRATEGY TO DRIVE EARNINGS GROWTH 13
APPENDIX
MATERIAL HANDLING SEGMENT» A leading designer, manufacturer and marketer of highly engineered polymer packaging containers, storage and safety products and specialty molded parts» Operates under five well-established brand names Buckhorn, Scepter, Ameri-Kart, Akro-Mils and Jamco Products» Manufacturing facilities in the US and Canada» Targets niche markets across North America» Variety of sales channels OVERVIEW» Represents 71% of Myers 2017 net sales 2017 NET SALES BREAKDOWN Highly engineered packaging, transportation, storage, and organization containers serving specialty customer needs Customer-intimate sales model VALUE PROPOSITION Increase productivity, product protection, handling efficiency and safety across customer s operations Reduce freight and disposal costs and handling risks Customer-driven product innovation FINANCIALS Consumer Food & Beverage 20% INDUSTRY 20% 24% 36% Vehicle Industrial BUSINESS $384 NET SALES 1 ($M) $364 $391 Adjusted 2015 2016 2017 Op. Inc. 14% 11% 11% Margin 1 Note: See appendix for non-gaap reconciliations 1 Excludes impact from corporate eliminations 15
DISTRIBUTION SEGMENT OVERVIEW» A leading distributor of tools, equipment and supplies used for tire, wheel and under-vehicle service» Serves passenger, heavy truck and off-road vehicles through retail channels» Designs and manufactures tire repair materials and custom rubber products under the Patch Rubber brand» Operates under three leading brands Myers Tire Supply, Myers Tire Supply International and Patch Rubber» Represents 29% of Myers 2017 net sales 2017 NET SALES BREAKDOWN VALUE PROPOSITION Link product and service offerings to customer s needs and priorities through continuous feedback loop High performance, knowledgeable and responsive sales organization driving penetration across customers and regions Offers one-stop-shopping for customers Trusted brand name with national footprint FINANCIALS Auto Aftermarket INDUSTRY BUSINESS $188 NET SALES 1 ($M) $171 $156 100% Adjusted Op. Inc. Margin 1 2015 2016 2017 9% 8% 6% Note: See appendix for non-gaap reconciliations 1 Excludes impact from corporate eliminations 16
RECONCILIATION OF NON-GAAP ITEMS ADJUSTED EBITDA ($M) Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Income from continuing operations $3 $2 $3 $2 $8 Plus: tax expense 3 2 2 (1) 3 Plus: net interest expense 2 2 2 1 2 Plus: extinguishment of debt 2 Plus: depreciation 6 6 5 5 4 Plus: amortization 2 2 2 2 2 EBITDA $17 $15 $14 $11 $19 Plus: one-time adjustments 0 3 (0) 2 (1) Adjusted EBITDA $17 $18 $13 $13 $18 Note: EBITDA and EBITDA as adjusted are financial measures that Myers Industries, Inc. calculates according to the schedule above using amounts from the unaudited Reconciliation of Non-GAAP Financial Measures Income (Loss) Before Taxes By Segment and GAAP amounts from the unaudited Condensed Consolidated Statement of Operations. The Company believes that EBITDA and EBITDA as adjusted provide useful information regarding a company's operating profitability. Management uses EBITDA and EBITDA as adjusted as well as other financial measures in connection with its decision-making activities. EBITDA and EBITDA as adjusted should not be considered in isolation or as a substitute for net income (loss), income (loss) before taxes or other consolidated income data prepared in accordance with GAAP. The Company's method for calculating EBITDA and EBITDA as adjusted may not be comparable to methods used by other companies. 17
RECONCILIATION OF NON-GAAP ITEMS (CONTINUED) ADJUSTED EBITDA ($M) 2015 2016 2017 LTM Mar-2018 Income from continuing operations $17 $11 $11 $15 Plus: tax expense 8 7 5 5 Plus: net interest expense 9 9 7 7 Plus: extinguishment of debt 2 2 Plus: depreciation 22 22 22 20 Plus: amortization 10 10 9 9 EBITDA $67 $59 $56 $58 Plus: one-time adjustments 6 4 5 4 Adjusted EBITDA $72 $64 $60 $62 Note: EBITDA and EBITDA as adjusted are financial measures that Myers Industries, Inc. calculates according to the schedule above using amounts from the unaudited Reconciliation of Non-GAAP Financial Measures Income (Loss) Before Taxes By Segment and GAAP amounts from the unaudited Condensed Consolidated Statement of Operations. The Company believes that EBITDA and EBITDA as adjusted provide useful information regarding a company's operating profitability. Management uses EBITDA and EBITDA as adjusted as well as other financial measures in connection with its decision-making activities. EBITDA and EBITDA as adjusted should not be considered in isolation or as a substitute for net income (loss), income (loss) before taxes or other consolidated income data prepared in accordance with GAAP. The Company's method for calculating EBITDA and EBITDA as adjusted may not be comparable to methods used by other companies. 18
RECONCILIATION OF NON-GAAP ITEMS (CONTINUED) ADJUSTED OPERATING INCOME (BY SEGMENT) ($M) 2015 2016 2017 Material Handling Operating income as reported $53 $41 $39 Asset impairments 1 1 1 Litigation reserve reversal (3) Reduction to contingent liability (2) Gain on sale of asset 1 (4) Restructuring expenses and other adjustments 2 1 9 Adjusted operating income $53 $41 $44 Distribution Operating income as reported $16 $13 $9 Restructuring expenses 1 Adjusted $17 $13 $9 Corporate Expense Corporate expense as reported ($35) ($26) ($23) Environmental reserve 1 2 1 Legal fees 2 Professional fees 2 CFO severance related costs 2 Adjusted corporate expense ($30) ($22) ($22) Continuing Operations Operating income as reported $35 $27 $25 Total of all adjustments above 5 4 7 Adjusted operating income $39 $32 $31 19
RECONCILIATION OF NON-GAAP ITEMS (CONTINUED) NET DEBT ($M) Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Cash (including discontinued operations) $7 $5 $5 Cash (continuing operations) 2 2 3 3 3 Total debt $180 $170 $158 $151 $144 Less: cash (continuing operations) (2) (2) (3) (3) (3) Net debt $178 $168 $155 $149 $141 20