Myers Industries Reports 2017 Fourth-Quarter and Full-Year Results

2017 free cash flow of $43 million, a 102% year-over-year
improvement; Company expects growth in 2018

AKRON, Ohio–(BUSINESS WIRE)–Myers Industries, Inc. (NYSE: MYE) today announced results for the
fourth quarter and year ended December 31, 2017.

Business Highlights

• Fourth-quarter and full-year 2017 net sales increased 13.6% and 2.4%,
  respectively; primarily the result of increased demand and market
  share gains in key niche markets in Material Handling, partially
  offset by declines in Distribution
• GAAP income per diluted share from continuing operations was $0.06 for
  the fourth quarter and $0.35 for the full year, compared to a loss of
  $0.03 and income of $0.38, respectively for the fourth quarter and
  full year 2016; adjusted income per diluted share from continuing
  operations was $0.09 for the fourth quarter and $0.51 for the full
  year, compared to $0.01 and $0.48, respectively for the fourth quarter
  and full year 2016
• Reduced debt by $38.5 million compared to prior year; decreased
  net-debt-to-adjusted EBITDA ratio to 2.5x
• Working capital reduction of $10 million and disciplined capital
  spending resulted in $43 million in free cash flow for 2017, an
  increase of 102%
• Divested our Brazil operations which were non-strategic and generated
  negative cash flow

President and Chief Executive Officer Dave Banyard commented, “We are
excited about the pace of our strategic execution and the growth we
achieved in the fourth quarter. This past year was transformational for
Myers Industries. We focused the enterprise on the key niche markets
where we deliver the strongest value. That focus resulted in
double-digit revenue growth in our food and beverage and consumer end
market products, and high single-digit growth in our vehicle end market.
Additionally, we focused our efforts on flexible operations, closing and
moving three facilities on time and under budget with no adverse impact
on our customers. We accomplished these moves in the face of increased
demand, both from external market forces and major weather events as
well as from our commercial efforts to gain share. Finally, we delivered
on our commitment to generate strong free cash flow throughout the year,
demonstrating the power of our strategy and our ability to execute.”

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

Fourth-Quarter 2017 Financial Summary

Fourth-quarter net sales increased $16.8 million or 13.6% (13.0%
excluding currency fluctuation) to $140.1 million, compared to the
fourth quarter of 2016. The increase in sales was the result of sales
growth in the Material Handling Segment, partially offset by sales
declines in the Distribution Segment. Gross profit increased $3.0
million to $38.3 million due to increased volume and favorable pricing,
partially offset by an unfavorable sales mix, raw material inflation,
and operating inefficiencies. Selling, general and administrative
expenses of $33.7 million were roughly flat year-over-year.
Fourth-quarter GAAP income per diluted share from continuing operations
was $0.06, compared to a loss of $0.03 for the fourth quarter of 2016.
Adjusted income per diluted share from continuing operations was $0.09,
compared to $0.01 for the fourth quarter of 2016.

Net sales in the Material Handling Segment for the fourth quarter
of 2017 increased $20.7 million or 25.6% (24.7% excluding currency
fluctuation) vs. the fourth quarter of 2016. The increase in net sales
was due to increased demand and market share gains in the Company’s food
and beverage, consumer and vehicle end markets, partially offset by a
decline in net sales in the industrial end market. Segment GAAP
operating income was $8.2 million for the fourth quarter of 2017,
compared to $4.0 million for the fourth quarter of 2016. Segment
adjusted operating income was $8.8 million for the fourth quarter of
2017, compared to $4.8 million for the fourth quarter of 2016. Increased
operating income was due to higher sales volume and favorable pricing,
partially offset by an unfavorable sales mix, raw material inflation,
and operating inefficiencies.

Net sales in the Distribution Segment for the fourth quarter of
2017 decreased $3.8 million or 9.0% vs. the fourth quarter of 2016. The
decrease in net sales was due mostly to the planned exit of a low margin
product line within the Company’s Patch Rubber business, which
contributed $2.7 million of the $3.8 million decline. The Myers Tire
Supply business was down 3.1% for the quarter, showing improvement
compared to the year-over-year sales performance during the first half
of 2017. The segment’s operating income was $1.3 million for the fourth
quarter of 2017, compared to $3.0 million for the fourth quarter of
2016. The decrease in operating income was the result of lower sales and
higher selling, general and administrative expenses, partially offset by
a favorable mix and higher pricing.

Full-Year 2017 Financial Summary

Full-year net sales increased 2.4% (or 2.2% excluding currency
fluctuation) to $547.0 million, compared to full-year 2016. The increase
in sales was the result of sales growth in the Material Handling
Segment, partially offset by a sales decline in the Distribution
Segment. Gross profit margin decreased 150 basis points to 28.8%, due
mostly to restructuring expenses of $7.4 million. Selling, general and
administrative expenses increased 2.2% to $135.5 million primarily as a
result of higher compensation costs and professional fees, partially
offset by lower depreciation and amortization expenses. GAAP income per
diluted share from continuing operations was $0.35, compared to $0.38
for the full year of 2016. Adjusted income per diluted share from
continuing operations was $0.51, compared to $0.48 for the full year of
2016.

The Material Handling Segment’s net sales for the full
year of 2017 increased 7.5% (or 7.2% excluding currency fluctuation) vs.
the full year of 2016. The increase in net sales was due primarily to
increased demand and market share gains in the Company’s food and
beverage, consumer and vehicle end markets, partially offset by a sales
decline in the industrial end market. Segment GAAP operating income was
$38.9 million for the full year of 2017, compared to $40.8 million for
the full year of 2016. Segment adjusted operating income was $44.1
million for the full year of 2017, compared to $40.9 million for the
full year of 2016.

The Distribution Segment’s net sales for the full year of
2017 declined 8.3% compared to the full year of 2016. The decrease in
net sales was primarily due to the planned exit of a low margin product
line within the Company’s Patch Rubber business and sales declines in
the Myers Tire Supply business, primarily during the first half of the
year, partially offset by improved pricing. The segment’s operating
income was $9.1 million for the full year of 2017, compared to $12.8
million for the full year of 2016.

2018 Outlook

For the fiscal year 2018, the Company anticipates that total revenue
will be up low-to-mid single-digits on a constant currency basis
compared to the prior year based on strong backlog, tempered by one-time
large orders delivered in the second half of 2017, particularly in its
consumer end market related to hurricane activity. It also expects
capital expenditures to be in the range of $10 to $12 million, net
interest expense to be between $7 and $8 million, and depreciation and
amortization to be between $26 and $28 million. The Tax Cuts and Jobs
Act will benefit the Company through a decrease in its effective tax
rate, which is expected to be approximately 25%.

Mr. Banyard concluded, “We enter 2018 with excellent momentum. We have a
strong order book coming into Q1 and expect to see the benefits of our
operational efforts as we move throughout the year. Additionally, we
expect to continue to improve our balance sheet and cash flow, both of
which will allow us to invest in organic initiatives and acquisitive
growth. We have a pipeline of potential acquisition candidates that we
are evaluating and expect to be disciplined concerning price and
valuation as we deploy cash toward these higher future growth
opportunities. We will also continue to evaluate opportunities to reduce
our manufacturing footprint and improve the operational flexibility of
our business. These efforts, combined with our commitment to disciplined
cash return metrics, should enable us to deliver compelling long-term
value to our shareholders.”

Conference Call Details

The Company will host an earnings conference call and webcast for
investors and analysts on Tuesday, March 6, 2018 at 10:00 a.m. ET. The
call is anticipated to last approximately one hour and may be accessed
at: (US) 833-233-3452 or (Int’l) 647-689-4129. The passcode is
Conference ID: 2699806. Callers are asked to sign on at least five
minutes in advance. A live 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 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) 800-585-8367 or (Int’l)
416-621-4642. The replay passcode is Conference ID: 2699806.

Use of Non-GAAP Financial Measures

The Company uses certain non-GAAP measures in this release. 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. Myers Industries 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 this news release.

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 distributor of tools,
equipment and supplies for the tire, wheel and under vehicle 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: raw material availability, increases in raw
material costs, or other production costs; risks associated with our
strategic growth initiatives or the failure to achieve the anticipated
benefits of such initiatives; unanticipated downturn in business
relationships with customers or their purchases; competitive pressures
on sales and pricing; changes in the markets for the Company's business
segments; changes in trends and demands in the markets in which the
Company competes; unexpected failures at our manufacturing facilities;
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; 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
website at www.sec.gov
and on the Company's Investor Relations section of its website at 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.

*Income taxes are calculated using the normalized effective tax rate for
each year. The normalized rate used in 2017 was 36% and in 2016 was
37.5%.

Note on Reconciliation of Income and Earnings
Data: Income from continuing operations as adjusted and
adjusted earnings per diluted share from continuing operations are
non-GAAP financial measures 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.

Note on Reconciliation of Income and Earnings
Data: EBITDA and EBITDA as adjusted are non-GAAP 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 the excluded items are not
primarily related to core operational activities. The Company believes
that EBITDA and EBITDA as adjusted provides 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.

Contacts

Myers Industries, Inc.
Monica Vinay, 330- 761-6212
Vice
President, Investor Relations & Treasurer
[email protected]

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