UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of report (Date of earliest event reported) July 21, 2015

 

 

MYERS INDUSTRIES, INC.

(Exact name of registrant as specified in its charter)

 

 

 

Ohio   1-8524   34-0778636
(State or other jurisdiction
of incorporation) 		  (Commission
File Number) 		  (IRS Employer
Identification Number)

 

1293 South Main Street, Akron, OH   44301
(Address of Principal Executive Offices)   (Zip Code)

Registrant’s Telephone Number, including area code  (330) 253-5592

 

(Former name or former address, if changed since last report)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions.

 

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

 

Item 1.01 . Entry into a Material Definitive Agreement .

On July 21, 2015, Myers Industries, Inc. (the “Company”) entered into a First Amendment to the Note Purchase Agreement (the “Note Purchase Amendment”) with the Subsidiary Guarantors identified therein and each of the institutions which is a signatory thereto. The Note Purchase Amendment revises the definition of “Change of Control”, effective as of November 1, 2014, to require beneficial ownership of 30% of the voting power of the Company in order for a Change of Control to occur.

The foregoing description of the Note Purchase Amendment does not purport to be complete and is qualified in its entirety by reference to the full text of the Note Purchase Amendment attached to this Form 8-K as Exhibit 10.1 and incorporated herein by reference.

 

Item 2.02 . Results of Operations and Financial Condition

On July 23, 2015, the Company issued a press release announcing earnings results for the fiscal quarter ended June 30, 2015. The full text of the press release issued in connection with the announcement is attached as Exhibit 99.1 to this Current Report on Form 8-K. In addition, a copy of the slide materials which will be discussed during the Company’s earnings conference call at 10:00 a.m. Eastern Time on July 23, 2015 is attached as Exhibit 99.2 to this Current Report on Form 8-K. Information about the call can be found in the press release attached as Exhibit 99.1 to this Current Report on Form 8-K.

The information in this report (including the exhibit) is furnished pursuant to “Item 2.02. Results of Operations and Financial Condition” and shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that section, nor shall such information be deemed incorporated by reference in any filing under the Securities Act of 1933, unless incorporated by specific reference in such filing.

 

Item 2.03 . Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of the Registrant .

The disclosure in Item 1.01 regarding the Note Purchase Amendment and Exhibit 10.1 of this report are incorporated herein by reference.

 

Item 7.01 . Regulation FD Disclosure

See “Item 2.02 Results of Operations and Financial Condition” above.

 

Item 9.01 . Financial Statements and Exhibits .

(d) Exhibits

 

99.1 Press Release by the Company regarding earnings results dated July 23, 2015
99.2 Earnings Presentation Second Quarter 2015 by the Company dated July 23, 2015
10.1 First Amendment to the Note Purchase Agreement among the Subsidiary Guarantors identified therein and each of the institutions which is a signatory thereto, dated July 21, 2015.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

Myers Industries, Inc.

(Registrant)
DATE

July 23, 2015

By:

/s/ Greggory W. Branning

Greggory W. Branning
Senior Vice President, Chief Financial Officer and Corporate Secretary

Exhibit 10.1

E XECUTION V ERSION

 

 

 

M YERS I NDUSTRIES , I NC .

  

 

F IRST A MENDMENT

Dated as of July 21, 2015

to the

N OTE P URCHASE A GREEMENT

Dated as of O CTOBER  22, 2013

 

 

Re: $40,000,000 4.67% S ENIOR N OTES , S ERIES A, DUE J ANUARY  15, 2021

$11,000,000 5.25% S ENIOR N OTES , S ERIES B, DUE J ANUARY  15, 2024

$29,000,000 5.30% S ENIOR N OTES , S ERIES C, DUE J ANUARY  15, 2024

AND

$20,000,000 5.45% S ENIOR N OTES , S ERIES D, DUE J ANUARY  15, 2026

 

 

 

Myers Industries, Inc.

F IRST A MENDMENT TO THE N OTE P URCHASE A GREEMENT

T HIS F IRST A MENDMENT dated as of July 21, 2015 (the or this “First Amendment” ) to the Note Purchase Agreement dated as of October 22, 2013 is between M YERS I NDUSTRIES , I NC ., an Ohio corporation (the “Company” ), the Subsidiary Guarantors party hereto and each of the institutions which is a signatory to this First Amendment (collectively, the “Noteholders” ).

R E C I T A L S :

A. The Company and each of the Noteholders have heretofore entered into the Note Purchase Agreement dated as of October 22, 2013 (the “ Note Purchase Agreement ”). Pursuant to the Note Purchase Agreement, the Company has heretofore issued (i) $40,000,000 of the Company’s 4.67% Senior Notes, Series A, due January 15, 2021 (the “ Series A Notes ”), (ii) $11,000,000 of the Company’s 5.25% Senior Notes, Series B, due January 15, 2024 (the “ Series B Notes ”), (iii) $29,000,000 of the Company’s 5.30% Senior Notes, Series C, due January 15, 2024 (the “ Series C Notes ’) and (iv) $20,000,000 of the Company’s 5.45% Senior Notes, Series D, due January 15, 2026 (the “ Series D Notes ”; together with the Series A Notes, the Series B Notes and the Series C Notes, the “Notes”). The Noteholders are the holders of 100% of the outstanding principal amount of the Notes as required by Section 17.1 of the Note Purchase Agreement.

B. The Company and the Noteholders now desire to amend the Note Purchase Agreement in the respects, but only in the respects, hereinafter set forth.

C. Capitalized terms used herein shall have the respective meanings ascribed thereto in the Note Purchase Agreement unless herein defined or the context shall otherwise require.

D. All requirements of law have been fully complied with and all other acts and things necessary to make this First Amendment a valid, legal and binding instrument according to its terms for the purposes herein expressed have been done or performed.

N OW , THEREFORE , upon the full and complete satisfaction of the conditions precedent to the effectiveness of this First Amendment set forth in Section 3.1 hereof, and in consideration of good and valuable consideration the receipt and sufficiency of which is hereby acknowledged, the Company and the Noteholders do hereby agree as follows:

 

S ECTION  1. A MENDMENTS .

Section 1.1 . Effective as of November 1, 2014, Section 8.8(f) of the Note Purchase Agreement shall be and is hereby amended in its entirety to read as follows:

“(f) Certain Definitions . “Change in Control” shall mean (i) a majority of the members of the Board of Directors of the Company shall not be Continuing Directors; or (ii) any Person including a “group” (within the meaning of Sections 13(d) and 14(d)(2) of the

Securities Exchange Act of 1934, as amended) which includes such Person, shall purchase or otherwise acquire, directly or indirectly, beneficial ownership of Voting Stock of the Company and, as a result of such purchase or acquisition, any such Person (together with its Affiliates), shall directly or indirectly beneficially own in the aggregate Voting Stock representing more than 30% of the combined voting power of the Company’s Voting Stock.”

Section 1.2 . Section 10.7 of the Note Purchase Agreement shall be and is hereby amended by replacing the phrase “within 18 months” with the phrase “within 18 months (starting 9 months prior to such sale and ending 9 months after such sale)” in the first paragraph thereof.

 

S ECTION  2. R EPRESENTATIONS AND W ARRANTIES OF THE C OMPANY .

Section 2.1 . To induce the Noteholders to execute and deliver this First Amendment (which representations shall survive the execution and delivery of this First Amendment), the Company represents and warrants to the Noteholders that:

(a) this First Amendment has been duly authorized, executed and delivered by it and this First Amendment constitutes the legal, valid and binding obligation, contract and agreement of the Company enforceable against it in accordance with its terms, except as enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws or equitable principles relating to or limiting creditors’ rights generally;

(b) the Note Purchase Agreement, as amended by this First Amendment, constitute the legal, valid and binding obligations, contracts and agreements of the Company enforceable against it in accordance with their respective terms, except as enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws or equitable principles relating to or limiting creditors’ rights generally;

(c) the execution, delivery and performance by the Company of this First Amendment (i) has been duly authorized by all requisite corporate action and, if required, shareholder action, (ii) does not require the consent or approval of any governmental or regulatory body or agency and (iii) will not (A) violate (1) any provision of law, statute, rule or regulation or the Company’s certificate of incorporation or bylaws, (2) any order of any court or any rule, regulation or order of any other agency or government binding upon the Company or (3) any provision of any material indenture, agreement or other instrument to which the Company is a party or by which its properties or assets are or may be bound, including, without limitation, the Material Credit Facility, or (B) result in a breach or constitute (alone or with due notice or lapse of time or both) a default under any indenture, agreement or other instrument referred to in clause (iii)(A)(3) of this Section 2.1(c) ;

(d) neither the Company nor any of its Affiliates, in connection with amending the terms of the change of control provisions in any agreement evidencing

 

-2-

indebtedness or security of the Company or any Affiliate, has paid or agreed to pay any fees or other consideration, or given any additional security or collateral, or shortened the maturity or average life of any indebtedness or permanently reduced any borrowing capacity, in each case, in favor of or for the benefit of any holders of such indebtedness or security of the Company or any Affiliate;

(e) all Subsidiary Guarantors and all Pledgors have agreed to this First Amendment and are parties hereto;

(f) after giving effect to this First Amendment, no lender or holder of securities of the Company has rights in connection with a change of control that are more favorable to such lender or holder than the rights of the holders of the Notes; and

(g) as of the date hereof and after giving effect to this First Amendment, no Default or Event of Default has occurred which is continuing.

 

S ECTION  3. C ONDITIONS TO E FFECTIVENESS OF T HIS F IRST A MENDMENT .

Section 3.1 . This First Amendment shall not become effective until, and shall become effective when, each and every one of the following conditions shall have been satisfied:

(a) executed counterparts of this First Amendment, duly executed by the Company and the holders of 100% of the outstanding principal of the Notes, shall have been delivered to the Noteholders;

(c) the Noteholders shall have a copy of the Second Amendment to the Fourth Amended and Restated Loan Agreement dated as of May 19, 2015, between the Company, the foreign subsidiary borrowers party thereto, the lenders party thereto and JP Morgan Chase Bank, N.A., which is attached hereto as Exhibit A ;

(d) the representations and warranties of the Company set forth in Section 2 hereof are true and correct on and with respect to the date hereof; and

(e) the fees and expenses of Chapman and Cutler, LLP, counsel to the Noteholders, shall have been paid by the Company, in connection with the negotiation, preparation, approval, execution and delivery of this First Amendment.

Upon receipt of all of the foregoing, this First Amendment shall become effective.

 

S ECTION  4. M ISCELLANEOUS .

Section 4.1 . This First Amendment shall be construed in connection with and as part of the Note Purchase Agreement, and except as modified and expressly amended by this First Amendment, all terms, conditions and covenants contained in the Note Purchase Agreement and the Notes are hereby ratified and shall be and remain in full force and effect.

 

-3-

Section 4.2 . Any and all notices, requests, certificates and other instruments executed and delivered after the execution and delivery of this First Amendment may refer to the Note Purchase Agreement without making specific reference to this First Amendment but nevertheless all such references shall include this First Amendment unless the context otherwise requires.

Section 4.3 . The descriptive headings of the various Sections or parts of this First Amendment are for convenience only and shall not affect the meaning or construction of any of the provisions hereof.

Section 4.4. This First Amendment shall be governed by and construed in accordance with the law of the State of New York, excluding choice-of-law principles of the law of such State that would permit or require the application of the laws of a jurisdiction other than such State.

[Rest of page left intentionally blank.]

 

-4-

Myers Industries, Inc.

 

Section 4.5 . The execution hereof by you shall constitute a contract between us for the uses and purposes hereinabove set forth, and this First Amendment may be executed in any number of counterparts, each executed counterpart constituting an original, but all together only one agreement. The undersigned also confirms and ratifies all obligations it has under all Financing Agreements.

 

M YERS I NDUSTRIES , I NC .
By /s/ Greggory W. Branning
Its Senior Vice President, Chief Financial Officer and Secretary

Myers Industries, Inc.

 

This Agreement is hereby accepted and agreed to as of the date hereof.
T HE P RUDENTIAL I NSURANCE C OMPANY OF A MERICA
By: /s/ Jason Boe
Vice President
P RUDENTIAL R ETIREMENT I NSURANCE AND A NNUITY C OMPANY
P RUDENTIAL A RIZONA R EINSURANCE U NIVERSAL C OMPANY
P RUDENTIAL L EGACY I NSURANCE C OMPANY OF N EW J ERSEY
By: Prudential Investment Management, Inc. (as Investment Manager)
By: /s/ Jason Boe
Vice President
PAR U H ARTFORD L IFE & A NNUITY C OMFORT T RUST
By: Prudential Arizona Reinsurance Universal Company, Inc. (as Grantor)
By: Prudential Investment Management, Inc. (as Investment Manager)
By: /s/ Jason Boe
Vice President
P HYSICIANS M UTUAL I NSURANCE C OMPANY
BCBSM, I NC . DBA B LUE C ROSS AND B LUE S HIELD OF M INNESOTA
Z URICH A MERICAN I NSURANCE C OMPANY
By: Prudential Private Placement Investors, L.P. (as Investment Advisor)
By: Prudential Private Placement Investors, Inc. (as its General Partner)
By: /s/ Jason Boe
Vice President

Myers Industries, Inc.

 

This Agreement is hereby accepted and agreed to as of the date thereof.
C ONNECTICUT G ENERAL L IFE I NSURANCE C OMPANY
By: CIGNA Investments, Inc. (authorized agent)
By /s/ Elisabeth V. Piker
Name: Elisabeth V. Piker
Title: Managing Director
L IFE I NSURANCE C OMPANY OF N ORTH A MERICA
By: CIGNA Investments, Inc. (authorized agent)
By /s/ Elisabeth V. Piker
Name: Elisabeth V. Piker
Title: Managing Director
C IGNA H EALTH AND L IFE I NSURANCE C OMPANY
By: CIGNA Investments, Inc. (authorized agent)
By /s/ Elisabeth V. Piker
Name: Elisabeth V. Piker
Title: Managing Director

Myers Industries, Inc.

 

This Agreement is hereby accepted and agreed to as of the date thereof.
T HE G UARDIAN L IFE I NSURANCE C OMPANY OF A MERICA
By /s/ Brian Keating
Name: Brian Keating
Title: Managing Director
T HE G UARDIAN I NSURANCE & A NNUITY C OMPANY , I NC .
By /s/ Brian Keating
Name: Brian Keating
Title: Managing Director

Myers Industries, Inc.

 

This Agreement is hereby accepted and agreed to as of the date thereof.
A MERICAN F AMILY L IFE I NSURANCE C OMPANY
By: /s/ David L. Voge
Name: David L. Voge
Title: Fixed Income Portfolio Manager

Myers Industries, Inc.

 

Each of the undersigned approve and agree to the foregoing and confirm and ratify all obligations under all Financing Agreements to which it is a party as of the date first written above:

 

B UCKHORN I NC .
By: /s/ Greggory W. Branning
Name:
Title:
A MERI -K ART C ORP .
By: /s/ Greggory W. Branning
Name:
Title:
P ATCH R UBBER C OMPANY
By: /s/ Greggory W. Branning
Name:
Title:
M YERS T IRE S UPPLY D ISTRIBUTION , I NC .
By: /s/ Greggory W. Branning
Name:
Title:

Myers Industries, Inc.

 

Each of the undersigned approve and agree to the foregoing and confirm and ratify all obligations under all Financing Agreements to which it is a party as of the date first written above:

 

S CEPTER US H OLDING C OMPANY
By: /s/ Greggory W. Branning
Name:
Title:
A MERI -K ART (MI) C ORP .
By: /s/ Greggory W. Branning
Name:
Title:

Exhibit 99.1

 

LOGO    News Release

NYSE: MYE

Contact(s):

Gregg Branning, Senior Vice President

& Chief Financial Officer (330) 761-6303

Monica Vinay, Vice President, Investor

Relations & Treasurer (330) 761-6212

Myers Industries Reports 2015 Second Quarter Results

Scepter Acquisition Continues to Deliver Strong Performance

July 23, 2015 , Akron, Ohio - Myers Industries, Inc. (NYSE: MYE), a leading provider of material handling solutions and tire repair products to industrial end markets, today announced results for the second quarter ended June 30, 2015.

Financial Highlights

 

  •   Net sales of $164.3 million included strong performance from Scepter, offset by weaker demand in the agricultural, industrial, recreational vehicle and marine end markets

 

  •   Gross profit margin increased to 30.8% driven by operational excellence initiatives, pricing actions, sales of new products and the incremental contribution from Scepter

 

  •   Income per diluted share from continuing operations as adjusted increased 45.5% to $0.32 in the second quarter of 2015 compared with the same period last year

 

  •   Net sales and profits benefited from approximately $5 million of customer orders that shifted into Q2 from Q3 2015

Summary

 

     Quarter Ended June 30,     Six Months Ended June 30,  
     2015     2014     % Increase
(Decrease) 		    2015     2014     % Increase
(Decrease) 		 
     (Unaudited dollars in thousands, except per share data)  

Net sales

   $ 164,335      $ 152,784        7.6 %    $ 320,683      $ 303,269        5.7 % 

Gross profit

   $ 50,581      $ 42,532        18.9 %    $ 96,338      $ 84,603        13.9 % 

Gross profit margin

     30.8 %      27.8 %        30.0 %      27.9 %   

Income from continuing operations before income taxes

   $ 17,275      $ 9,619        79.6 %    $ 21,289      $ 16,918        25.8 % 

Income from continuing operations:

            

Income

   $ 10,925      $ 6,327        72.7 %    $ 13,547      $ 11,090        22.2 % 

Income per diluted share

   $ 0.35      $ 0.19        84.2 %    $ 0.43      $ 0.33        30.3 % 

Income from continuing operations before income taxes as adjusted*

   $ 14,715      $ 11,179        31.6 %    $ 20,678      $ 19,035        8.6 % 

Income from continuing operations as adjusted*:

            

Income

   $ 9,933      $ 7,154        38.8 %    $ 13,958      $ 12,182        14.6 % 

Income per diluted share

   $ 0.32      $ 0.22        45.5 %    $ 0.45      $ 0.36        25.0 % 

 

* Details regarding the pre-tax adjusted charges (benefits) are provided on the Reconciliations of Non-GAAP Financial Measures included in this release.

President and Chief Executive Officer John C. Orr commented, “Our Scepter business continues to be a very good acquisition as it delivered strong sales and operating performance again in the second quarter of 2015. Although we continued to experience reduced sales of our agricultural products during the second quarter, an acceleration of orders by a few of our customers in that end market led to higher than anticipated sales and profits from those products. Scepter’s strong performance, the acceleration of orders, and pricing and cost reduction actions that we took during the quarter led to the significant improvement in adjusted earnings per diluted share from continuing operations as compared to the second quarter of last year.”

Segment Results

The results below are as adjusted and exclude restructuring and other unusual pre-tax charges (benefits) as detailed on the Reconciliation of Non-GAAP Financial Measures included in this release.

Net sales in the Material Handling Segment for the second quarter of 2015 were $115.8 million compared to $103.0 million for the second quarter of 2014. Incremental sales of $28.6 million from Scepter were partially offset by sales declines in the agricultural, industrial, recreational vehicle and marine end markets as compared to the second quarter of 2014. Material Handling’s adjusted income before taxes was $18.2 million for the second quarter of 2015 compared to $12.2 million for the second quarter of 2014. The increase in adjusted income before taxes year-over-year was due mostly to Scepter’s contribution and higher margin profile, but was also the result of pricing actions, reductions in labor costs, overhead and selling, general and administrative expenses.

Net sales in the Distribution Segment for the second quarter of 2015 were $48.6 million compared to $49.8 million for the second quarter of 2014. The sales decline in the second quarter was the result of weaker demand for some of the segment’s tire repair and retread products. Distribution’s adjusted income before taxes for the second quarter of 2015 was $4.5 million compared to $5.4 million for the second quarter of 2014. The decline in adjusted income before taxes as compared to the second quarter of last year was due mostly to the lower sales volumes and product mix.

Other Financial Items

For the six months ended June 30, 2015, cash flow used for continuing operations was $3.0 million compared to $6.8 million for the six months ended June 30, 2014.

Capital expenditures totaled $9.4 million for the six months ended June 30, 2015 and are forecasted to be approximately $30 million in 2015, of which, roughly 70% will be for new product development, growth, and productivity projects.

The Company did not purchase any shares of its common stock during the quarter. For the six months ended June 30, 2015, the Company purchased 370,200 shares of its common stock for a total of $6.6 million. Approximately 4.1 million shares were available for repurchase at June 30, 2015 under the Company’s current board authorization.

On July 2, 2015, the United States Court of Appeals for the Federal Circuit reversed an award of attorney fees and costs against the Company that had been previously awarded as part of a patent infringement lawsuit. As a result of the Court’s decision, the Company reversed a previously recorded reserve of $3.0 million. This benefit was recognized as a reduction of selling, general and administrative expenses in the second quarter of 2015. The reversal is included in the Reconciliation of Non-GAAP Financial Measures included in this release and is excluded from income from continuing operations as adjusted.

2015 Third Quarter and Full Year Outlook

Although the third quarter of 2015 will be impacted by the continued weakness of the agricultural market, the acceleration of orders that moved into the second quarter, and some continued soft demand in the Material Handling Segment’s end markets, full year operating results should show the benefits of ongoing efforts to reduce costs and strengthen the Company, resulting in a strong foundation for continued earnings growth in the future.

Conference Call Details

The Company will host an earnings conference call and webcast for investors and analysts on Thursday, July 23, 2015 at 10:00 a.m. ET. The call is anticipated to last approximately one hour and may be accessed at (877) 407-8033. Callers are asked to sign on at least five minutes in advance. A live and archived webcast of the conference call can be accessed from the Investor Relations section of the Company’s website at www.myersindustries.com . Click on the Investor Relations tab to access the webcast. Webcast attendees will be in a listen-only mode. An archived telephone replay of the call will also be available on the site shortly after the event. To listen to the telephone replay, callers should dial: (US) 877-660-6853 or (Int’l) 201-612-7415. The replay passcode is Conference ID #13614253.

About Myers Industries

Myers Industries, Inc. is an international manufacturer of polymer products for industrial, agricultural, automotive, commercial, and consumer markets. The Company is also the largest wholesale distributor of tools, equipment and supplies for the tire, wheel and undervehicle service industry in the U.S. Visit www.myersindustries.com to learn more.

Caution on Forward-Looking Statements

Statements in this release may include “forward-looking” statements within the meaning of the Private Securities Litigation Reform Act of 1995. Any statement that is not of historical fact may be deemed “forward-looking”. Words such as “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 risks and uncertainties, many outside of the Company’s control that could cause actual results to materially differ from those expressed or implied. Risks and uncertainties include: changes in the markets for the Company’s business segments; changes in trends and demands in the markets in which the Company competes; unanticipated downturn in business relationships with customers or their purchases; competitive pressures on sales and pricing; raw material availability, increases in raw material costs, or other production costs; future economic and financial conditions in the United States and around the world; inability of the Company to meet future capital requirements; claims, litigation and regulatory actions against the Company; changes in laws and regulations affecting the Company; the Company’s ability to execute the components of its Strategic Business Evolution process; and other risks as detailed in the Company’s 10-K and other reports filed with the Securities and Exchange Commission. Such reports are available on the Securities and Exchange Commission’s public reference facilities and its web site at http://www.sec.gov, and on the Company’s Investor Relations section of its web site at http://www.myersindustries.com . Myers Industries undertakes no obligation to publicly update or revise any forward-looking statements contained herein. These statements speak only as of the date made.

MYERS INDUSTRIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

(Dollars in thousands, except share data)

 

     For the Quarter Ended     For the Six Months Ended  
     June 30, 2015      June 30, 2014     June 30, 2015      June 30, 2014  

Net sales

   $ 164,335       $ 152,784      $ 320,683       $ 303,269   

Cost of sales

     113,754         110,252        224,345         218,666   
  

 

 

    

 

 

   

 

 

    

 

 

 

Gross profit

  50,581      42,532      96,338      84,603   

Selling, general and administrative expenses

  30,839      31,246      69,880      64,434   
  

 

 

    

 

 

   

 

 

    

 

 

 

Operating income

  19,742      11,286      26,458      20,169   

Interest expense, net

  2,467      1,667      5,169      3,251   
  

 

 

    

 

 

   

 

 

    

 

 

 

Income from continuing operations before income taxes

  17,275      9,619      21,289      16,918   

Income tax expense

  6,350      3,292      7,742      5,828   
  

 

 

    

 

 

   

 

 

    

 

 

 

Income from continuing operations

  10,925      6,327      13,547      11,090   

Income (loss) from discontinued operations, net of income taxes

  494      (578 )    3,111      (4,661 ) 
  

 

 

    

 

 

   

 

 

    

 

 

 

Net income

$ 11,419    $ 5,749    $ 16,658    $ 6,429   
  

 

 

    

 

 

   

 

 

    

 

 

 

Income per common share from continuing operations:

Basic

$ 0.35    $ 0.20    $ 0.44    $ 0.34   

Diluted

$ 0.35    $ 0.19    $ 0.43    $ 0.33   

Income (loss) per common share from discontinued operations:

Basic

$ 0.02    $ (0.02 )  $ 0.10    $ (0.14 ) 

Diluted

$ 0.02    $ (0.02 )  $ 0.10    $ (0.14 ) 

Net income per common share:

Basic

$ 0.37    $ 0.18    $ 0.54    $ 0.20   

Diluted

$ 0.37    $ 0.17    $ 0.53    $ 0.19   

Weighted Average Common Shares Outstanding

Basic

  30,968,269      32,425,994      31,004,779      32,892,864   

Diluted

  31,284,915      32,962,790      31,342,103      33,387,109   

MYERS INDUSTRIES, INC.

SALES AND EARNINGS BY SEGMENT (UNAUDITED)

(Dollars in thousands)

 

     Quarter Ended June 30,     Six Months Ended June 30,  
     2015     2014     % Change     2015     2014     % Change  

Net Sales from Continuing Operations

      

Material Handling

   $ 115,774      $ 103,046        12.4 %    $ 228,055      $ 209,723        8.7 % 

Distribution

     48,592        49,789        (2.4 )%      92,697        93,672        (1.0 )% 

Inter-company Sales

     (31 )      (51 )      —          (69 )      (126 )      —     
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total

$ 164,335    $ 152,784      7.6 %  $ 320,683    $ 303,269      5.7 % 
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income (Loss) from Continuing Operations Before Income Taxes

Material Handling

$ 20,846    $ 11,533      80.8 %  $ 34,253    $ 24,305      40.9 % 

Distribution

  4,508      5,053      (10.8 )%    7,999      8,583      (6.8 )% 

Corporate

  (8,079 )    (6,967 )    —        (20,963 )    (15,970 )    —     
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total

$ 17,275    $ 9,619      79.6 %  $ 21,289    $ 16,918      25.8 % 
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

MYERS INDUSTRIES, INC.

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

INCOME (LOSS) BEFORE INCOME TAXES BY SEGMENT (UNAUDITED)

(Dollars in millions, except per share data)

 

     Quarter Ended June 30,     Six Months Ended June 30,  
     2015     2014     2015     2014  

Material Handling

        

Income from continuing operations before income taxes as reported

   $ 20.8      $ 11.5      $ 34.3      $ 24.3   

Litigation reserve reversal

     (3.0 )      —          (3.0 )      —     

Restructuring expenses and other adjustments

     0.4        0.7        0.5        0.7   
  

 

 

   

 

 

   

 

 

   

 

 

 

Income from continuing operations before income taxes as adjusted

  18.2      12.2      31.8      25.0   

Distribution

Income from continuing operations before income taxes as reported

  4.5      5.1      8.0      8.6   

Restructuring expenses and other adjustments

  —        0.3      0.1      0.8   
  

 

 

   

 

 

   

 

 

   

 

 

 

Income from continuing operations before income taxes as adjusted

  4.5      5.4      8.1      9.4   

Corporate and interest expense

(Loss) before income taxes as reported

  (8.1 )    (7.0 )    (21.0 )    (16.0 ) 

Transaction costs

  —        0.6      —        0.6   

Professional and legal fees

  —        —        1.8      —     
  

 

 

   

 

 

   

 

 

   

 

 

 

Corporate and interest expense as adjusted

  (8.1 )    (6.4 )    (19.2 )    (15.4 ) 

Continuing Operations

Income from continuing operations before income taxes as reported

  17.3      9.6      21.3      16.9   

Litigation reserve reversal

  (3.0 )    —        (3.0 )    —     

Restructuring expenses and other adjustments

  0.4      1.6      2.4      2.1   
  

 

 

   

 

 

   

 

 

   

 

 

 

Income from continuing operations before income taxes as adjusted

  14.7      11.2      20.7      19.0   

Income taxes*

  (4.8 )    4.0      (6.7 )    6.8   
  

 

 

   

 

 

   

 

 

   

 

 

 

Income from continuing operations as adjusted

$ 9.9    $ 7.2    $ 14.0    $ 12.2   
  

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted earnings per diluted share from continuing operations

$ 0.32    $ 0.22    $ 0.45    $ 0.36   

 

* Income taxes calculated using the normalized effective tax rate for each year.

Note on Reconciliation of Income and Earnings Data: Income (loss) excluding the items mentioned above in the text of this release 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 Consolidated Financial Statements. 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 net income (loss), income (loss) before taxes or other consolidated income data 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.

MYERS INDUSTRIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (UNAUDITED)

(Dollars in thousands)

 

     June 30,
2015 		     December 31,
2014 		 

Assets

     

Current Assets

     

Cash

   $ 3,887       $ 4,676   

Accounts receivable, net

     98,503         90,664   

Inventories

     65,791         63,338   

Assets held for sale

     —           117,775   

Prepaid and other

     8,644         8,988   
  

 

 

    

 

 

 

Total Current Assets

  176,825      285,441   

Other Assets

  158,050      142,626   

Property, Plant, & Equipment, Net

  131,439      136,766   
  

 

 

    

 

 

 

Total Assets

$ 466,314    $ 564,833   
  

 

 

    

 

 

 

Liabilities & Shareholders’ Equity

Current Liabilities

Accounts payable

$ 69,249    $ 77,320   

Accrued expenses

  40,145      49,372   

Liabilities held for sale

  —        27,122   
  

 

 

    

 

 

 

Total Current Liabilities

  109,394      153,814   

Long-term debt, net

  201,385      236,429   

Other liabilities

  12,310      13,738   

Deferred income taxes

  13,277      14,281   

Total Shareholders’ Equity

  129,948      146,571   
  

 

 

    

 

 

 

Total Liabilities & Shareholders’ Equity

$ 466,314    $ 564,833   
  

 

 

    

 

 

 

MYERS INDUSTRIES, INC.

CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED)

(Dollars in thousands)

 

     Six Months Ended  
     June 30, 2015     June 30, 2014  

Cash Flows From Operating Activities

    

Net income

   $ 16,658      $ 6,429   

Income (loss) from discontinued operations, net of income tax

     3,111        (4,661 ) 
  

 

 

   

 

 

 

Income from continuing operations

$ 13,547    $ 11,090   

Items not affecting use of cash

Depreciation

  13,290      11,030   

Amortization

  5,279      1,461   

Non-cash stock compensation

  1,638      1,593   

Provision for loss on accounts receivable

  83      550   

Deferred taxes

  (1,673 )    (73 ) 

Other long-term liabilities

  2,497      1,244   

(Gain) loss from asset disposition

  (56 )    (139 ) 

Tax benefit from options

  (215 )    (658 ) 

Other

  147      200   

Payments on performance based compensation

  (1,332 )    (1,293 ) 

Cash flow used for working capital, net of acquisitions:

Accounts receivable

  (12,918 )    (10,386 ) 

Inventories

  (4,020 )    (10,890 ) 

Prepaid expenses

  2,511      337   

Accounts payable and accrued expenses

  (21,747 )    (10,892 ) 
  

 

 

   

 

 

 

Net cash used for operating activities - continuing operations

  (2,969 )    (6,826 ) 

Net cash used for operating activities - discontinued operations

  (11,672 )    (14,200 ) 
  

 

 

   

 

 

 

Net cash used for operating activities

  (14,641 )    (21,026 ) 
  

 

 

   

 

 

 

Cash Flows From Investing Activities

Capital expenditures

  (9,381 )    (6,971 ) 

Proceeds from sale of property, plant and equipment

  36      85   

Proceeds from sale of business

  69,787      —     
  

 

 

   

 

 

 

Net cash provided by (used for) investing activities - continuing operations

  60,442      (6,886 ) 

Net cash provided by (used for) investing activities - discontinued operations

  (581 )    14,531   
  

 

 

   

 

 

 

Net cash provided by (used for) investing activities

  59,861      7,645   
  

 

 

   

 

 

 

Cash Flows From Financing Activities

Proceeds from long-term debt

  —        89,000   

Net borrowing/(repayment) on credit facility

  (31,548 )    4,300   

Cash dividends paid

  (8,367 )    (7,480 ) 

Proceeds from issuance of common stock

  1,515      2,126   

Tax benefit from options

  215      658   

Repurchase of common stock

  (6,577 )    (44,399 ) 

Shares withheld for employee taxes on equity awards

  (975 )    (1,083 ) 

Deferred financing costs

  —        (538 ) 
  

 

 

   

 

 

 

Net cash provided by (used for) financing activities - continuing operations

  (45,737 )    42,584   

Net cash used for financing activities - discontinued operations

  —        —     
  

 

 

   

 

 

 

Net cash provided by (used for) financing activities

  (45,737 )    42,584   
  

 

 

   

 

 

 

Foreign exchange rate effect on cash

  (272 )    50   
  

 

 

   

 

 

 

Net increase (decrease) in cash

  (789 )    29,253   

Cash at January 1

  4,676      6,539   
  

 

 

   

 

 

 

Cash at June 30

$ 3,887    $ 35,792   
  

 

 

   

 

 

 
July 23, 2015 
|
Myers Industries, Inc.
Second Quarter 2015
Earnings Presentation
Exhibit 99.2

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
(11) The Company’s ability to execute the components of its Strategic Business Evolution process
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.
Safe Harbor Statement
2

Second Quarter 2015 Financial Summary
3
•
Net sales increased due to the Scepter
acquisition and new product sales, but
were partially offset by decreased
sales in the Material Handling
Segment’s agricultural,  industrial,
recreational vehicle and marine end
markets
•
Gross profit margin increased due to
the contribution from Scepter, pricing
actions, new product sales and
ongoing cost reduction activities
•
SG&A decreased due to the reversal of
a litigation reserve, lower salaries and
other employee related expenses and
lower variable selling expenses,
including freight, all of which more
than offset the incremental SG&A
expense from Scepter
Note: All figures except ratios and percents are $Millions
Continuing Operations
Q2
Q2
%
Highlights
2015
2014
Change
Net sales
$164.3
$152.8
7.6%
Gross profit margin
30.8%
27.8%
SG&A
$30.8
$31.2
(1.3)%
Income from continuing
ops - adjusted
¹
$9.9
$7.2
38.8%
Effective tax rate
36.8%
34.2%
Income per diluted share
from continuing ops -
adjusted
¹
$0.32
$0.22
45.5%
1
See Reconciliation of Non-GAAP measures on slide 9

First Half 2015 Financial Summary
4
Notes: All figures are $Millions
Continuing Operations
Six Months Ended
Six Months Ended
Cash
June 30,
June 30,
Highlights
2015
2014
Cash used for continuing
operations
($3.0)
($6.8)
Capital expenditures
$9.4
$7.0
Free cash flow
($12.4)
($13.8)
Dividends
$8.4
$7.5
Balance Sheet
June 30,
December 31,
Highlights
2015
2014
Long-term debt
$201.4
$236.4
Debt - net of cash
$197.5
$231.8
Free
cash
flow
=
cash
flow
from
operations
–
capital
expenditures

•
Incremental sales of $28.6 million from 
Scepter and new product sales were
partially offset by sales declines in the
agriculture, industrial, recreational
vehicle and marine end markets as
compared to Q2 2014, which resulted
from weaker demand and a tough
industrial economy
•
Adjusted income before taxes (IBT)
increased versus Q2 2014 due to the
contribution from Scepter, pricing
actions, reductions in labor and
overhead costs and decreased selling,
general and administrative expenses
Second Quarter Results –
Material Handling
5
$ Millions
See Reconciliation of Non-GAAP measures on slide 9
$115.8
$103.0
$95
$100
$105
$110
$115
$120
Q2 2015
Q2 2014
Net Sales
$18.2
$12.2
$0
$5
$10
$15
$20
Q2 2015
Q2 2014
IBT -
Adjusted

$49.8
$40
$42
$44
$46
$48
$50
$52
Q2 2015
Q2 2014
Net Sales
$5.4
$0
$1
$2
$3
$4
$5
$6
Q2 2015
Q2 2014
IBT -
Adjusted
•
The decrease in Distribution sales
as compared to Q2 of last year was
the result of decreased demand for
some of the segment’s tire repair
and retread products due to soft
market conditions
•
The lower sales volume and a shift
in product mix led to the decline in
adjusted income before taxes year-
over-year
Second Quarter Results –
Distribution
$ Millions
See Reconciliation of Non-GAAP measures on slide 9
6
$4.5
$48.6

Outlook/Guidance
•
Challenging market conditions in Material Handling expected to continue  in 2015
•
Decreased corn production and low crop prices are expected to continue to decrease demand for
agricultural storage containers, but seeing signs that order activity may increase in second half
•
Shift of orders from Q3 into Q2 will add to anticipated decline in sales of agricultural storage containers
in Q3 2015
•
Softer demand in industrial, recreational vehicle and marine end markets expected to continue for the
near-term
•
Third  quarter and full year 2015 results should benefit from re-introduction of legacy
products which began in the third quarter of 2015
•
Additional legacy product re-introductions have been identified and will be introduced early in 2016
•
Capital expenditures for continuing operations in 2015 are expected to be approximately $30
million
•
Approximately 70% of Capital Expenditures will be used for growth and productivity projects
•
Anticipate effective tax rate for full year 2015 will be approximately 32.5%
•
A result of shift to more international earnings with a full year of Scepter in our results
•
Capital Allocation in near-term focused on investment in capital for growth and paying down
debt to reduce leverage; long-term focus remains balanced:
•
Organic growth investments in new products, process improvements and market development
•
Growth through acquisitions in both core and adjacent markets
•
Returning capital to stakeholders through debt reduction, dividends and share repurchases
7

Appendix
7

Reconciliation of Non-GAAP Measures
9
MYERS INDUSTRIES, INC.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
INCOME (LOSS) BEFORE INCOME TAXES BY SEGMENT (UNAUDITED)
(Dollars in millions, except per share data)
Quarter Ended June 30,
Six Months Ended June 30,
Income from continuing operations before income
taxes as reported
$
20.8
11.5
34.3
24.3
Litigation reserve reversal
(3.0)
—
(3.0)
—
Restructuring expenses and other adjustments
0.4
0.7
0.5
0.7
Income from continuing operations before income
taxes as adjusted
18.2
12.2
31.8
25.0
Income from continuing operations before income
taxes as reported
4.5
5.1
8.0
8.6
Restructuring expenses and other adjustments
—
0.3
0.1
0.8
Income from continuing operations before income
taxes as adjusted
4.5
5.4
8.1
9.4
(Loss) before income taxes as reported
(8.1)
(7.0)
(21.0)
(16.0)
Transaction costs
—
0.6
—
0.6
Professional and legal fees
—
—
1.8
—
Corporate and interest expense as adjusted
(8.1)
(6.4)
(19.2)
(15.4)
Income from continuing operations before income
taxes as reported
17.3
9.6
21.3
16.9
Litigation reserve reversal
(3.0)
—
(3.0)
—
Restructuring expenses and other adjustments
0.4
1.6
2.4
2.1
Income from continuing operations before income
taxes as adjusted
14.7
11.2
20.7
19.0
Income taxes*
(4.8)
4.0
(6.7)
6.8
Income from continuing operations as adjusted
$
9.9
7.2
14.0
12.2
Adjusted earnings per diluted share from continuing
operations
$
0.32
0.22
0.45
0.36
*Income taxes calculated using the normalized effective tax rate for each year.
Note
on
Reconciliation
of
Income
and
Earnings
Data:
Income
(loss)
excluding
the
items
mentioned
above
in
the
text
of
this
release
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
Consolidated
Financial
Statements.
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
net
income
(loss),
income
(loss)
before
taxes
or
other
consolidated
income
data
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.
2015
2014
2015
2014
$
$
$
$
$
$
$
$
$
Material
Handling
Distribution
Corporate
and
interest
expense
Continuing
Operations

Market Indicators
•
Orders grew an average of 9% in Q1 2015; shipments grew an average of 1% during
the same period 
Material Handling
Source: Material Handling Industry (MHI)
10
(40.0)
(30.0)
(20.0)
(10.0)
0.0
10.0
20.0
30.0
40.0
50.0
60.0
2008
2009
2010
2011
2012
2013
2014
2015
Annual Rate of Change
Shipments %
Orders %
Material Handling Index

Market Indicators
•
The Outdoor Power Equipment Institute (OPEI) estimates that total outdoor power
equipment shipments will increase by 3.6% in 2015.
11
Material Handling
Source:
OPEI
U.S.
Econometric
Forecast
–
December
2014
2009
2010
2011
2012
2013
2014
2015
2016
Consumer Products
6,223,328
        
6,588,176
   
5,875,396
   
6,191,291
   
6,379,735
   
5,897,982
  
6,221,402
   
6,553,717
   
Percent Change
-10.6
5.9
-10.8
5.4
3.0
-7.6
5.5
5.3
Commercial Products
131,050
           
180,226
      
183,609
      
182,817
      
221,200
      
224,227
      
238,675
      
253,264
      
Percent Change
-34.4
37.5
1.9
-0.4
21.0
1.4
6.4
6.1
Handheld Products
10,558,563
      
10,825,352
10,365,472
10,921,443
10,909,630
11,149,771
11,430,870
11,679,547
Percent Change
-7.9
2.5
-4.2
5.4
-0.1
2.2
2.5
2.2
Total
16,912,941
      
17,593,754
16,424,477
17,295,551
17,510,565
17,271,980
17,890,947
18,486,528
-9.1
4.0
-6.6
5.3
1.2
-1.4
3.6
3.3
ACTUAL
FORECAST

Market Indicators
•
Recreational vehicle shipments are forecasted to decline in 2015 vs.
2014 by almost 6%
12
Material Handling
Source: RVIA Release
0.0
50.0
100.0
200.0
250.0
300.0
350.0
400.0
450.0
150.0
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015F
12.4
10.6
5.8
(40)
(30)
(20)
(10)
0
10
20
30
40
50
60
RV Shipments
RV Unit Shipments (000)
% Change from P/Y

Market Indicators
•
The Rubber Manufacturers Association (RMA) projects a slight decrease in
replacement tire shipments in 2015 (-0.4%); YTD shipments are down 2%
13
Distribution
Source: JP Morgan, RMA
-8.00%
-6.00%
-4.00%
-2.00%
0.00%
2.00%
4.00%
6.00%
8.00%
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015F
2016F
Key Indicators for the Tire Market
Miles Driven (B)
Repl Tire Shipments
Gasoline Sales (Gal/B)