Myers Industries, Inc. (MYE) Earnings Call Transcript & Summary

Welcome. My name is Meghan Beringer. I'm the Investor Relations, Senior Director here at Myers Industries. On behalf of Myers, we want to thank you for being part of our Investor Day program and your interest in our growth story. We are very excited to share with you the path we have laid out for the next phase of Myers Journey. In connection with this webcast, we have also posted a supplemental PowerPoint presentation on our company's website. But before we begin, please read the forward-looking statements on Slide 3 and also displayed on the screen. As a reminder, we are in a quiet period for the first quarter and our discussions are limited to the material presented today. As this is our first Investor Day that our company has hosted, we do welcome your feedback following the session. We will listen and adjust. Also, we wanted to use the opportunity to introduce you to several members of our team. While you will learn more from the speakers during their prepared remarks and through Mike's introductions, I also encourage you to meet those who are not listed on the screen and are here with us today in the room. These members include, and if you could raise your hand as I call your name, Lorelei Evans, our Senior Vice President of Human Resources; Kevin McElgunn, Vice President of Strategy and Corporate Development; Will Dartnall, Vice President of Marketing; Matt Marchel, Business Vice President; Flavia Pachi, Treasurer; Daniel Hoehn, Vice President and Corporate Controller; Layne Schroeder, Senior Product Management Director; Rich Pasela, Manager of Investor Relations; and Ryan Long, a member of our marketing team who will be available at the product display to answer any of your questions. We have a very full agenda today. Mike McGaugh will start us off with a strategic overview of the company, and then Grant Fitz will discuss our financials. We will then break -- we will then break for 15 minutes, and Jim Gurnee will start us back up with a review of the automotive aftermarket or distribution business. Then we will move on to a discussion of material handling led by Dave Basque, followed by a review of Signature Systems by our newest member of the team, Jeff Condino. Following these prepared remarks, Mike will open up the session for your questions, which we ask for you to save for that portion of the program. Finally, today's presentation is being webcasted and recorded. Therefore, please take a moment to silence your phones. All right. Sit back and enjoy today's presentation. And let's welcome to the stage our President and Chief Executive Officer, Mike McGaugh.

Thanks, Meghan. Thank you very much. Thank you. All right. With spring training going on with that sort of introduction, I figured I'd have some walk-up music or something. Maybe next time. So, hey, listen, we do have a good program today. This is our first Investor Day in at least a very long time. And so we appreciate you being with us. We think we have a good a good program and a good message, and we'll follow it up with some Q&A at the end of the session. So first off, welcome, and thank you for attending our 2024 Myers Industries Investor Day. We've got 4 key messages that I'd like to talk about to frame out the day. First, we've consistently executed our 3 Horizon strategy, which outlines our 10-year roadmap. Most of you are familiar with that 3 Horizon Strategy. This strategy has served as a consistent and effective roadmap for our company. Second message, second point is we've used Horizon 1 to get our fundamentals right, and you'll see that through the course of today. We use Horizon 1 to build a foundation of operational excellence and commercial excellence, and now we have these fundamentals in place. That allows us to shift into Horizon 2 of our strategy and use that to accelerate our transformation into a new Myers. And last point, we're repositioning the company to accelerate growth and unlock value. And again, you'll hear that through the course of today. It's actually very exciting. And again, we're thrilled to be here and to be able to talk to you about it. We recently reported our full year results, but I felt it was appropriate to recap some of the highlights. In 2023, some of our end markets particularly RV, marine and consumer hit cyclical troughs or near trough conditions. And as we've discussed, we're not necessarily out of the woods yet in some of those markets and some of those -- the cyclical nature of those markets. That being said, our Self Help focus that I've talked about for the last 4 years, our focus on operational excellence and commercial excellence delivered value. We continue to do a really nice job in purchasing, in supply chain management and asset management to reduce our costs. On the commercial excellence side, we've done a good job in sales training, sales training programs that I've spoken of, target account planning, executing value-based pricing and then also really funding and growing marketing and innovation. And again, Will Dartnall is here to speak to you about some of that in Q&A. These Self Help measures have been critical improvements that we've brought to Myers over the last years. I often get the question as to how we'll institutionalize these best practices. In 2023, we launched the Myers Business System as a best practice playbook to make the gains in operational excellence and commercial excellence permanent. Fourth point there is after vetting and diligencing many potential acquisition targets, and Kevin can attest to that, our discipline paid off with the acquisition of Signature Systems, a branded, differentiated company with excellent people in a very strong and sustainable competitive advantage. As you'll see, the Signature acquisition is a pivot point and will help accelerate our transformation into a faster-growing, higher-margin company. Last, despite the cyclical headwinds I touched on in the first bullet point, we still delivered one of the strongest years in Myer's history in terms of revenue, EBITDA and earnings per share because I get this question a lot from several of you in the audience, I'd like to answer the question, "What is Myers Industries?" Of our approximately $1 billion in revenue, we are ballpark a $500 million differentiated branded, high-margin products business. We're an approximately $300 million industrial distributor with a leadership position in tire supplies, and we're an approximately $200 million contract manufacturer for steel and plastic products. Now I'd like to describe who we are. In simple terms, we typically are #1 or #2 in niche, I call them under the radar screen businesses that typically have lower competitive intensity and can be quite profitable. Next, we typically have products that are branded, differentiated and have a competitive moat. Third, one characteristic that I believe makes Myers really unique is that we've recruited a significant amount of large-cap talent to a small cap company. We have leaders here from General Motors, from DuPont, from Dell, from Saint-Gobain, leaders who know what good looks like and how to bring it to the smaller company. What's really interesting and what's very compelling, and I'd like you to know and understand, these leaders are here because they want to create something special. They want to build a special lasting legacy. We all looked at Myers 3 to 4 years ago, it had really good products, good brands, but it was under managed or maybe I'll say, [indiscernible] managed. We looked at it as a blank canvas, determining how we could take all of the good from our collective experiences at these world-class companies lead behind all of the bad and really built a special enterprise, and that's exactly what we're doing. These leaders have brought in world-class operational and commercial capabilities. And as I said, we're institutionalizing this through the Myers Business System. As I mentioned, we do have cyclical end-markets, some are in trough conditions in the near-term. But we're addressing the cyclicality through our Self Help initiatives. I talk about raising the floor of the trough. So if we're a small-cap company now with some debt on us, how do we raise the floor of the trough? We do that through the Self Help that we're executing. We also addressed the cyclicality through M&A to dampen or counterbalance the cyclicality. And then also, how we manage these businesses in our portfolio, and I'll speak to that. Some businesses, we need to grow, we need to invest to innovate while others we need to optimize to reduce cost and maximize value. More on that later. Over the course of Horizon 1, we executed, we tried things and we learned -- we have taken these learnings and have continued to sharpen our areas of focus. First, going forward, we will continue to concentrate on quality. We're going to grow in branded products, differentiated products with high barriers to entry in a competitive moat. There are enough small under the radar niche businesses that are more specialty and less commodity that we can meaningfully grow Myers over the next years with high-quality businesses and acquisitions. Over Horizon 1, we've acquired companies for an attractive price that gave scale to our rotational molding and distribution businesses. These acquisitions were of simple businesses. As a result, they were easier for us to learn, to integrate, easier to buy and they were also quite inexpensive. And they gave scale to 2 important platforms that needed it. However, going forward, we're going to focus on organic growth and M&A growth in branded differentiated products with higher barriers to entry. The higher profit margins of these businesses are better for our shareholders and quite frankly, are more fun to run. Akin to branded products, we seek to focus on leading brands, brands that have a #1 or #2 position. Tangent to this point is a more concerted decision to reduce or eliminate private label or contract manufacturing exposure where possible. To maximize asset utilization, we can always pursue some private label business but we're more focused on making and selling our own brands. That's a pivot that has continued to intensify over the last year or 2, and that's the direction of our company going forward. As a part of our Horizon strategy, our plan was to use the proceeds of Self Help to fund innovation. We've done this and have developed several new products in military applications, in fuel containers, in industrial containers and across the company. Last, we are still focused on growing through acquisition, recognizing that our focus is towards differentiated products, with underlying growth tailwinds very much like Signature Systems. I'll walk through a few slides that give you a picture of Myers Industries. Our actual results for 2023 were reported as revenue of $813 million and $98 million of adjusted EBITDA. Going forward, however, I'll include Signature Systems because that's who we are now. Pro forma 2023, including Signature Systems has a revenue of $923 million and adjusted EBITDA of $137 million, with material handling representing 72% of revenue, and 91% of EBITDA. We have a diverse set of end markets that range from infrastructure, credit due to Signature Systems, and all the way to food and beverage and agriculture. Moving to Slide 15 on our pro forma billboard. These photos highlight our #1 or #2 position in diverse niche products in niche markets where we have 10 strong brands across the company. In 2020, when I crafted the 3 Horizon Strategy, I knew the company needed to grow and improve profitability. In the midst of the pandemic, I picked a set of target that we should be at a run rate of $1 billion in revenue and an EBITDA margin of 15% by the end of 2023. I'm proud that we've largely accomplished this goal. Yes, revenue is a little light from the $1 billion target, but it's a world of difference from the $500 million this company ran at for many, many years. And we've also -- we've attained the 15% adjusted EBITDA target, and I'm particularly proud of this step change for Myers. As we enter Horizon 2 of our strategy, we're shifting how we think about our company, focusing on branded differentiated specialty and niche. This has come into even more focus with the acquisition of Signature Systems. Our company is now driven by in how we think about -- moving our company is driven by 4 power brands, as we call them: Signature Systems, Akro-Mils, Buckhorn and Scepter. All of these brands are the leader in their field. Approximately 80% of Myer's pro forma profits come from these 4 brands, I'll dive into that more later in the presentation. But let me first go back to our long-term strategy and execution. Our intention and my intention is to keep things simple and be boringly consistent. And that's -- I think that's a great approach. And we've got that with our Horizon strategy. Horizon 1, Horizon 2, Horizon 3, the focus is still the same. Horizon 1 was to install the building blocks, install a foundation of what I call Self Help. Integrated purchasing was a big change for us that created a lot of value. Integrated supply chain was also a big change for us. That, too, has helped unearth the hidden factory, as we talk about. Best practices on pricing to value delivered instead of taking the easy way out of pricing to cost plus. These are big changes that have fundamentally transformed and helped transform the company we have. Working our asset management and asset reliability. All of these levers, I've used the management here has used for their entire professional careers. They always pay off, rain or shine, cyclical trough or cyclical peak. We use the gains from Self Help to fund growth. We use it to fund organic growth. The sales training program I talked about was expensive. The sales staffing, the sales capability and reporting, we've used the Self Help to fund those. We've also used Self Help to fund innovation, new product development, e-commerce. These commercial improvements may not have the immediate impact of Self Help measures, but they improve the quality of the business over the medium and long-term. We then use the gains from Self Help in organic growth to fund acquisitions. We elected to acquire, as I mentioned earlier, some simple businesses that needed scale because we felt it would be easier to find our [ sea ] legs and manage the [ downside ] risk by taking smaller, less expensive bets as we refine our processes and capabilities. That's what we did from 2020 to 2023. The game plan was to use that foundation, our Self Help, our commercial excellence coupled with better M&A and integration processes, use these learnings to acquire more differentiated, more value-creating companies at the end of Horizon 1 and beginning a Horizon 2, and that's ultimately what we did with Signature Systems. One area I want to highlight, as we bring up this chart, is the change in our financial targets for Horizon 2 and Horizon 3. We've moved the targets for Horizon 2 and Horizon 3 from a revenue number to an earnings per share number. We feel that's more representative. It's more shareholder aligned. The change is representative of our -- of a change in our thinking. For sure, we're focused on growing revenue, and we will continue to do so. However, a big pivot is we're now focused more on quality. We're planning on acquiring and growing businesses that move our EPS versus having revenue goals for Horizon 2and Horizon 3. In the summer of 2020, in the midst of the pandemic, I knew we needed to grow Myers and I knew that it had the capacity to grow. However, as we've learned and as we've evolved our strategy and our metrics, it's more appropriate to move to Horizon 2 and 3, and move those targets to earnings per share. We've seen competitors over the last year or 2, chase revenue acquiring generic plastic widget companies. That's not who we are. That's not what we're going to do. We've got world-class talent, and I think it would be a poor use of that talent to chase something like that. We are going to acquire more Signatures, the higher-quality, branded differentiated specialty companies I spoke of. To execute our 3 Horizon Strategy, we continue to use our 4 pillars: Organic growth, strategic M&A, operational excellence and a high-performing culture. This framework is effective, and I've used it for many, many years at many companies in many industries. I use these 4 pillars to break down a 10-year roadmap into 3-year phases with 1 year and even quarterly and monthly execution plans. This detail, this tenacity to drive execution works. I use these progress updates in my quarterly earnings call and our 2023 results call, I reviewed this chart outlining progress versus our pillars. I feel it's a good and thorough description of our progress in 2023, so I included it in my talk today. Moving to the Myers Business System. I get this question often. Okay, Mike, you've brought in dozens of large-cap veterans to improve Myers. What happens when they leave, how do you sustain the gains they've delivered? How do you make it permanent? So starting about 16 months ago, several of us set off to put in place a business system to standardize our work processes across the company and to be sure they are institutionalized, repeatable and permanent. We've hired a few subject matter experts who actually helped this transition at Danaher to help us do this. And we focused on the handful of tasks that are most important to Myers: Self Help, operational excellence and organic growth. We are crystallizing these work processes and are building them out. These 9 bullets are deliberate and they're what we believe Myers does well and what we need to do well to win. This Myers Business System is a multiyear journey, but I want to reassure you, it's also a focused journey. We're targeted. Yes, of course, we want -- we want improvement. But this is not a never-ending all reaching initiative. It's focused on what's the right approach for our small cap company. It's what's the right approach for Myers. Now that was a lot on Horizon 1, and Horizon does not stop, one does not stop. It gets built upon. And now I'll shift over to Horizon 2 and our strategic imperatives for Horizon 2. I love simple slides. This is -- you can tell the ones I've designed myself. So 2 operating models: grow and maximize value. In the grow model, we will do the marketing, the innovation, we'll invest in CapEx and in acquisitions. In the maximized value model, we'll focus on optimizing on reducing cost, on maximizing cash flow. Strategically, we are thinking about the 2 segments: material handling and distribution. We now think about material handling as 2 portfolios. A portfolio that focuses on storage, handling and protection that contains branded, high-performance products that move, store and protect. That's a fantastic theme on which we can continue to build and grow this company. We've got a lot of runway with this. This portfolio includes our 4 power brands: Buckhorn, Akro-Mils, Scepter and Signature Systems, and has a pro forma revenue of $459 million and an adjusted EBITDA of $136 million. What I want to highlight here is how much things have changed. When I arrived at Myers, we were a $500 million business with 12% EBITDA. We now have approximately a $500 million portfolio that's between 30% and 35% EBITDA. That's a remarkable change. We also have a portfolio called Engineered Solutions, which are designed and tailored solutions that meet our customers' unique needs. This portfolio had a 2023 pro forma revenue of $206 million, and a pro forma adjusted EBITDA of $17 million. As you can see, it's also the portfolio that had the most exposure downside to RV, marine and pontoon boats and as well as consumer. The distribution portfolio, we've changed our lens a little bit and are now referring it to it as automotive aftermarket. They sell high-quality repair and replacement parts for passenger cars, commercial vehicles and heavy equipment. This portfolio had revenue of $258 million and adjusted EBITDA of $16 million. This business, too, has had some growing pains and is on a fantastic journey, but is in the midst of integrating and Jim -- integrating some acquisitions, and Jim will speak to that. If I go to Slide 24, outline the end markets for storage, handling and protection, and I believe this will make our company easier to track and easier to understand. It's ag and food, consumer industrial infrastructure and military. For Engineered Solutions, it's RV and marine, outdoor and leisure products, and industrial products. In an automotive aftermarket, it's tire repair centers, commercial fleets and heavy equipment. Regarding growth rates of these end markets, we estimated about 1.5x GDP for storage, handling and protection, largely driven by the significant investment in infrastructure, also the significant investment worldwide in military. Growth, we put at onetime GDP for Engineering Solutions and 1.5x GDP for the tire repair business, driven by electric vehicles, which chew up tires more readily. And then also the aging autos on the road that Jim will speak to and we've spoken to in the past. Now going back to our business models. Storage, handling and protection will fall under the grow model. The differentiated businesses with high barriers to entry that will benefit from marketing will benefit from innovation and will benefit from capital investment. Engineering Solutions and Automotive aftermarket will operate under the maximized value model as these businesses have lower barriers to entry and need to be run with a focus on low cost and efficiency. It's important to take a look at these portfolios with the strategic lens. On a revenue basis, Storage, Handling and Protection makes up 50% of our company but 80% of the adjusted EBITDA, Auto Aftermarket makes up 28% of the revenue, but 10% of the adjusted EBITDA and Engineered Solutions, 22% of revenue and 10% of EBITDA as well. And viewing the company through this lens and overlaying the following chart demonstrates the runway for shareholder value creation. The storage, handling and protection portfolio consists of a material substitution play, replacing wood for metal products for a higher performance polyethylene or polypropylene product. As an example, I know these businesses well due to my background in building products. Trex and AZEK, which we consider as peers, displace pressure-treated lumber to a more expensive product but it commands a premium because of quality and performance. These are high-margin, branded, differentiated polyethylene composite products. Sorry, I can't remember right. Just as Signature displaces wood, just as Signature Systems does or Buckhorn displaces corrugate or Akro displaces corrugate or cardboard or Scepter displaces wood or metal. The EBITDA margins and the growth rates are similar between SHP products and the noted peers. Engineered Solutions is primarily nonbranded tanks and containers, and are much like Berry, Sonoco or SILGAN. And last, Auto Aftermarket is much like the larger industrial distributors noted on the chart. Grant will address this slide in more detail in his section, that's compelling. You've seen the size and quality of our 4 power brands. It's worth restating our acquisition criteria as this is a good read on what we seek to become. We seek to acquire branded products and avoid private label ones. We seek to acquire businesses that are primarily #1 or #2, and are in growing end markets. We also seek to acquire businesses that we can make stronger by applying in the Myers Business System in those specific 3 areas and 9 traits that we know we can do well. We also seek to acquire businesses that are less cyclical. These are all learnings over the last 4 years as we've developed Myers and Myers has matured and refined. This is how we continue to evolve this model. But we seek to acquire businesses that are less cyclical or at least countercyclical to our current portfolio. And last, because we still have a big foot in plastics, we want to acquire companies and businesses that have a favorable sustainability profile. Our storage, handling and protection products, all of those are recyclable. Jeff Condino will speak to Signature Systems about the closed-loop recycle process of those products as well. We have to be thinking about the next decade and the decade after that as we craft our strategy and ensure that we have products that align with where society is headed. As a part of the strategy, we said we would grow our portfolio through M&A, starting with smaller bolt-ons to learn and grow. We gave scale and critical mass to automotive aftermarket. Now that business has the size and scale, it has what it needs to be successful. Jim will speak to that. We also acquired smaller rotational molding businesses that help bring size and scale to that portfolio as well. Signature was a step into the branded and differentiated with the high barriers to entry, and it's an indication of the type of company we seek to acquire in the future. In summary, we've built a solid foundation in Horizon 1 based upon operational excellence and commercial excellence. We're now building on that foundation and are accelerating the transformation into Horizon 2. This is where it really gets fun and exciting. The first 3 or 4 years were the hard yards for sure. Signature Systems is a catalyst to transform the company's acceleration and it's a pivot point. And then lastly, the storage, handling and protection portfolio is a significant value driver. We're doing as a company what we said we would do, and we're transforming Myers Industries. And with that, I'll turn it over to Grant.

Thank you, Mike. I'm very excited to be here in New York City. Having worked here before, it's great for me personally to be able to build on this excitement and being able to tell the Myers story at our first Investor Day. As Mike previously mentioned, at Myers, we are a company with branded products and services that are #1 or #2 in their markets and also have a strong competitive moat. What I'm going to discuss today is that this translates to a company with strong financial results that can deliver over 15% in EBITDA margin and return on invested capital with meaningful year-over-year adjusted earnings per share growth and strong free cash flow generation. As we look at the 3 Horizon Strategy, we are also making a subtle but powerful move in focusing on adjusted earnings per share targeting to be over $2 of earnings per share by the end of 2026. This excludes any additional upside for acquisitions, and over $3 of earnings per share by the end of 2029. We view earnings per share as a key metric for Myers to further enable shareholder value. We want to recognize and focus on this metric in our 3 Horizon Strategy. In reviewing the financial -- reviewing the historical performance for Myers Industries, you can see on this chart that the business has had meaningful improvement in these key financial metrics, particularly since after 2019, when the 3 Horizon Strategy was introduced while also leveraging operational and sales excellence with the Myers Business System. Net sales have grown from $534 million in 2016 to $813 million in 2023, while adjusted EBITDA has grown from $64 million to $98 million over the same time. Additionally, gross margin percentage has improved by 160 basis points, while free cash flow has also substantially increased since 2016. In reviewing 2023, the resiliency of the Myers business model has proven to be a strong building block for future growth opportunities in spite of cyclical market headwinds, particularly in our RV, marine and consumer end markets. 2023 was one of the best years in recent history for Myers in terms of both overall revenues at $813 million and adjusted EBITDA of $98 million, with a 12.1% adjusted EBITDA margin. You can also see on this chart that we've included the Myers return on invested capital, which was over 15% in 2023. Additionally, the free cash flow conversion for the year was over 60%, demonstrating the strong business fundamentals of our company. And now moving into the 3-year time Horizon. It is exciting to see where Myers Industries is going. For 2024, we have previously provided guidance of the 15% to 20% revenue growth and $1.30 to $1.45 in adjusted earnings per share. In our second Horizon, we are projecting over 10% in annualized revenue growth through 2026, which will generate over $2 in adjusted earnings per share. This again also excludes potential upside for new and meaningful acquisitions. This momentum then continues into our third Horizon, targeting 5% organic growth and over $3 in adjusted earnings per share, supported by additional acquisitions focused on international expansion during this third Horizon. As already mentioned, we have provided guidance for 2024, which equates to projected revenues of $935 million to $976 million, with adjusted earnings per share of $1.30 to $1.45. In summarizing our targets over the next 3 years, you can see that Myers Industries is projected to drive strong revenue growth of over 10%, with a mix of both inorganic growth from the Signature Systems acquisition and also organic growth initiatives, particularly in our military, industrial, infrastructure and e-commerce end markets. This then translates to helping to support equally strong earnings per share growth of 10% to 15% projected during the same time period, again, demonstrating the strength of the Myers Industries business model. I would now like to move into providing a better understanding to help unlock the value that the Myers business model brings, which quite frankly, I do not believe has been recognized by the market. And looking at our business today, 72% of our revenue is in the Material Handling segment, and 28% is in the Distribution segment, with a stock price of $20.84 per share as of Friday's market close, and approximately an 8.5x adjusted pro forma EBITDA multiple. And looking more closely at our business in order to better understand the Myers business model within our Material Handling segment, we have 2 different and distinct product portfolios. The first is in our 4 power brand businesses with Buckhorn, Akro-Mils, Scepter and Signature Systems, all of which are #1 or #2 in their respective end markets and which sell branded, high-value products. We are targeting to be in a 30% to 35% adjusted EBITDA margin range for these 4 power brands. Within the Material Handling segment, we also have our engineered solutions products from Jamco, Elkhart, Trilogy and Ameri-Kart. These products are largely produced for supply to other businesses on a contract manufacturing basis and have a targeted adjusted EBITDA margin of 8% to 15%, reflecting the cyclicality of this portfolio. We then have our Distribution business, which we are working to drive to a targeted 10% to 12% adjusted EBITDA margin, and to be viewed more as an annuity type of business as we see favorable market tailwinds over the longer-term for the tire repair end market. This is all supported by our corporate team, which we will continue to leverage for scale and improve efficiency with our Centers of Excellence model. By looking at the business in a different lens, you can start to see how this can begin to unleash the value of Myers Industries. Essentially, over 50% of our revenue is in high-margin, high-growth products with a targeted 30% to 35% plus adjusted EBITDA margin, and as Mike mentioned, which drove over 80% of the 2023 pro forma profits. This view of the business shows a significant runway for shareholder value creation. When applying comparable market multiples for each of our business portfolios, I will let you do the math, but this indicates that there is significant upside in the market value for Myers Industries. Starting on the left-hand of the chart, we have provided peer companies and their associated market multiples our targeted adjusted EBITDA margin and the Myers 2023 pro forma revenue and adjusted EBITDA for our Material Handling segment, broken out by our 4 power brands in the Storage, Handling and Protection portfolio and our Engineered Solutions portfolio, as well as our Distribution segment focused on the Automotive Aftermarket. As you can see, our 4 power brands are comparable to companies such as Trex and AZEK, with peer multiples of 18x to 20x adjusted EBITDA. In fact, Trex and AZEK currently have multiples which are much higher than this. Both of these companies produce high-margin polyethylene products with additives that are replacing existing pressure-treated wood materials with the Trex and AZEK higher-valued products, which increase value over their useful life versus the current wood materials. This conversion dynamic which -- with composites, replacing existing lower-valued materials is very similar to Signature Systems ground protection products, which replace wood mats and steel plates, Buckhorn boxes, which replace corrugated gaylord's and wooden pallets, and Scepter military canisters replacing wood and metal containers, all with significant growth opportunities. Additionally, for our Engineering Solutions, we see peer company multiples at 8x to 9x for our Distribution business, and for our Distribution business, peer multiples of 10x to 12x. As I indicated, if you do the math on the individual portfolios and adjust other pro forma balance sheet items such as net debt, I believe there is significant upside to the Myers current market valuation and ultimately, to upside to the current stock price. This unlocked value that Myers Industries brings is one of the reasons that we are very excited about our future. Now turning to our capital allocation policy. One of the areas that I have recognized since joining Myers a little over 10 months ago is the disciplined approach that the team has taken in our -- for our capital allocation and cash management in general. As you can see, this policy is based on prioritized principles, with first having to focus on debt repayment to return the company to historic leverage levels. Secondly, maintaining a strong balance sheet with ample liquidity. Thirdly, we anticipate CapEx spend to be typically 2% to 3% of revenue. Fourthly, we plan to continue our history of capital returns through dividends and to consider potential share buybacks when debt leverage ratio is more within our historic levels. Lastly, we will continue to be opportunistically pursuing strategic acquisitions while continuing to remain a disciplined capital structure. With the acquisition of Signature Systems, we now have a new capital structure for the company. As was previously announced, Myers has a secured 5-year $400 million term loan A facility. We have amended our $250 million senior revolving credit facility. The Myers interest coverage is projected to be 4x to 5x in the first year, and the new capital structure provides additional liquidity for compelling acquisitions. This new capital structure has been set up to have the targeted net debt leverage ratio to be under 3x by the end of 2024, under 2x by the end of 2025, and to be at a more normalized level of 1.5x by the end of 2026. During this time, the free cash flow conversion projected is to be over 60% each year. In summary, Myers provides a compelling opportunity for investment with strong earnings and free cash flow, with high-margin power brands in our Storage, Handling and Protection portfolio, which also provides growth upside and match with the disciplined capital allocation approach. This is all leveraged by the Myers Business System and executing on our 3 Horizon strategy. In closing, we are well positioned for continued growth. We are excited about the future. Myers is on the move. Thank you very much. [Break]

Okay. Let's see, sorry about that, Jim. So we've got now 3 of our speakers that will address the business opportunities with the company. First, starting with Jim Gurnee, and then moving to Dave Basque, who will speak for our Material Handling portfolio; and then Jeff Condino, who was the former CEO of Signature Systems and is now one of the Vice Presidents of Myers who runs that portfolio. With Jim, it's a really compelling story and a fantastic journey. First, because this business is the legacy of Myers. It's the legacy of Myers. Now we're growing and pivoting and moving the company in a new direction, more so in the last 3 to 4 years than we've ever done, but it's still part of the DNA, and it's still an important part and an intriguing part of the company. What Jim will talk to you about is the acquisitions that we've done in that business, one in 2019 and then one in 2022, have given him the scale and the reach. And he'll talk about in this business, it's about relationships and about service level because you're not making a product, you're servicing a product and you're servicing a customer. The reach that Jim's business now has is fantastic and the service level is high. And so I lived this when I was in the distribution world in building products. If you can outservice your competitors, you can get an extra 1% or 2% on price. And if you're the strongest and best buyer, you can get 1% or 2% off on your cost. That wedge of 3% or 4% is magnificent when you're talking about distribution margins. Now Jim will also address at the back end of last year the results weren't what any of us wanted, he'll speak to why that was. A bit of it is these small companies that are highly fragmented and family owned, particularly with tens of thousands of SKUs, are complicated to integrate when their ERPs don't talk to each other. They're also -- it's a personality-driven business, a relationship-driven business, and people matter. And so when you're merging the 2 organizations or 3 organizations of entities that were mortal enemies for 30 years, I say it's like trying to get a Ohio State football team and the Michigan football team to go to dinner together. It's a challenge. We're getting through it, and it's a part of the journey. But coming out the back end, as Jim will walk you through, it is the biggest and strongest and highest serving entity in its space, and it's very exciting. So with that, I'll turn it over to Jim. Then Dave will do material handling, and then Jeff will cover Signature Systems. So with that, Jim, please take it away. Thank you.

Good morning. So thank you, Mike. I appreciate that introduction. And I'm excited to spend the next few minutes with all of you talking about our distribution business or as we call ourselves the Automotive Aftermarket business, is the segment that we operate in. I'm the Business Vice President for this segment. And I'm excited to speak with you specifically around the fact that we're the largest tire repair distributor in the United States, and we specifically focus on equipment, tools, supplies and tire repairs. So I'm here to optimize and grow our segment. Okay. So the definition of the Auto Aftermarket segment is essentially wheels, tires, and everything but the tire, all the accessories that go around the wheel itself. And so today, there's 2 key takeaways I want to leave you all with. Number one, is we have, as Mike mentioned, we have our recent acquisition in Mohawk and now we have that completed, we have the scale that we need to be successful. We're on a journey essentially to integrate this business through commercial excellence and operational excellence. So we're, again, we're the leading supplier in the Automotive Aftermarket segment. And what we -- the way I look at this market, everyone, is to segment into 4 distinctive marketplaces. Those are the passenger retail on the left side of your screen. That's the automotive dealerships we're all very familiar with, and tire service centers. The commercial tires centers, those are the Class 8 trucks, the big semis. The retread -- that's the retreading of large commercial tires. And then the fourth segment is OTR or off the road segment, as we call it. And those are vehicles that specialize in off-highway applications. So we have 4 differentiators that I'm going to speak to in the next 4 slides. Specifically, they are logistics -- global logistics. They are the products and what we have to offer. The ease of doing business with Myers Tire Supply and the Pro sales. And then at the bottom of your slide, you can see some of our national key customers and regional key customers. So the first element is our global logistics and service. Our scale gives us that superior service level opportunity for our customers and specifically best-in-class service around these 4 things. The 97% of our orders are shipped the same day. We ship the right part, the right place, the right time, every time. And we have the largest footprint domestically with 8 sites in the U.S., with international reach, and we also have 3 locations in Central America. So what this provides our customers? Okay. What does it provide our customers? That it provides our customers best-in-class service. So why is this important? It's important because we can service the small, medium and large tires customers anywhere in the world, U.S., Central America, shipping the same day, unlike other distributors. Element #2, our product advantage. Our size and scale allows greater purchasing power and cost advantage, specifically. We have the broadest offering in the industry. We have 40,000 SKUs. Again, everything but the tire itself is what we're selling. We have good, better, best solutions so our customers have choices. And we have great strategic partner relationships and great customer relationships that our suppliers are intensively working with us to grow the business. They're excited to work with us and our customers really like the company. So it's a pleasure in those 2 areas, suppliers and customers. So these are the 7 product categories in front of you that we operate in. And this allows our customers to essentially have a one-stop shop. So we are, again, we're continuing to focus on continuous improvement in our journey, and it's around -- this particular area is around our growth and margin improvements so our scale again is at our cost advantage. Okay. Element #3, differentiator, ease of doing business. So inside this particular element, there are 4 key areas that give us an advantage, which our customers are constantly looking for the company that can help them do business easily. So the first one is the multiple ordering and service platforms that we have. The second one is our most experienced and certified knowledgeable and support teams, which is essentially our customer service reps and field sales folks. The third one is our ability to flex and scale, again, from small single location to multi-location 2,500 store locations. And the last differentiator we have is our VMI/CMI Services. These 4 differentiators with our value proposition is an offering that's unmatched in the industry, coupled with our scale, as I just described, is really part of our journey to really grow and optimize this particular part of Myers. So why is this important? This is important because these differentiators keep us ahead of the competition. Okay. And our last differentiator element is our Pro sales. So we have the scale advantage through service and cost on our journey to optimize and grow our business. So as Mike said, relationships and service are key in this business. On our journey, we have that. And again, what we're driving is our commercial excellence and our operational excellence and really driving that and building up those 2 specific areas. So these differentiators in Pro sales include dedicated corporate and regional sales representatives. So we have beefed up our commercial organization around -- specifically around corporate entities and regionally strong entities so that we have a sales force that's aligned to the way that the market is operating today. We redesigned that. We have market-focused sellers versus our generalist approach that we had previously. And we've done -- we're in the midst of doing product training certifications and safety audits for our customers, which is a value add for them because they need that. And so what we're doing is, we're moving from a transactional relationship with our customers to more of a partner relationship to help our customers win. So why is this important, is that this is really important in our journey to develop and be the best we can commercially and from an operational excellence perspective. Our customers know and trust our brand and what our brand represents. Okay. Lastly, beyond those 4 differentiators and opportunities, I want to talk a little bit about tailwinds. So we've got some really nice tailwinds here. I wanted to go through #1, I'll summarize the EVs. We've talked about that. I know that you're aware of that, but it's wear-and-tear on tires, obviously, that's a nice tailwind for our business going forward. And then there's consolidation that I mentioned in the industry, where you have constantly that going on, meaning that we've aligned our organization so that we can have programs that fit the consolidation with the customers becoming larger and et cetera. So that particular trend is the way we've aligned our commercial organization to align to that. And that's an industry tailwind that's going on. And then the last one, if you look at just kind of generally increased miles, number of cars on the road, age of vehicles, things like that, those are all helpful to our business going forward. So this is a very nice growth opportunity for some nice -- very nice tailwinds here that we've got in our journey. So kind of in summary, we are the largest distributor in serving the end market, Automotive Aftermarket segment. And again, we're focused on tools, supplies and everything for tire repairs. Our scale and size gives us a cost advantage. We have a superior service, brand, strong supplier and customer relationships. We're the largest and most knowledgeable sales force in the industry. We have favorable tailwinds that really align to Myers strengths, and we're starting this journey to optimize and grow the Automotive Aftermarket distribution segment and really unlock our true potential. Thank you. So now I'd like to introduce Dave, Dave Basque. Dave's our Business Vice President for Injection Molding, and he's our speaker for our Material Handling segment today. Dave?

Good morning, everyone. And thank you, Jim, for the nice introduction. Thank you, everyone, for coming today. This is really exciting to have you here for Investor Day. It's our first Investor Day. We've learned a lot, but I know we'll continue to learn as we move forward. Okay. As Mike outlined, we have within Material Handling, 2 portfolios: One is Storage, Handling and Protection. These are branded high-performance products that move, store and protect materials. You can see our brands are Buckhorn, Akro-Mils, Scepter and Signature Systems. The other is Engineered Solutions. These are designed and tailored solutions that meet customers' unique needs, mainly contract manufacturing. So we have Jamco, we have Elkhart products, Trilogy Plastics and Ameri-Kart. Now let's move on to the key messages for today. We have 4 powerful and differentiated brands, which are #2, called #2 or #1 market positions in their respective segments. We're scaling our commercial excellence to grow, innovate and price to the value create. This is really important because as you'll see in my presentation, the way we price our products, as we do substitution is really relative to the alternatives, and it's not so much a material plus margin approach. We're experts in Material Substitution, helping our brands and consumers switch from other materials to durable plastics, which have characteristics of recyclability and a circular economy. We're executing our operational excellence system to drive down costs while maintaining our service levels. We have engineered solutions capability to supply contract manufacturing to our customers and private label options, and we're positioned for future organic and inorganic growth for our company. So let's talk a little bit about our key brands. As I mentioned earlier, our brands are -- have hold #1 or #2 positions in their industries. Buckhorn is a top provider of the strongest reusable solutions for the Material Handling segment. We sell to large industrial customers primarily. We have -- there are large boxes, large industrial boxes, which provide significant value to our customers. I'll show you some examples here in a minute. Akro-Mils is a leader in industrial storage systems to support inventory management. They help our customers manage their inventory in their stock rooms. Scepter is a brand of choice for fuel storage, marine accessories and also plastic ammunition storage. You may have seen our ammunition cases back in our display area. Signature is a leading developer and manufacturer of engineered ground protection products for a diverse range of infrastructure and commercial applications. Jeff is going to talk a little bit more and give us some perspective on Signature here in a few moments. These brands are sold into diversified and growing end markets. And again, I'll give you some examples as we proceed through the presentation. So here are -- some of our examples of some of our markets. Mike showed a slide here that shows that Storage, Handling and Protection, the key end markets are in the ag, food, consumer, industrial, infrastructure and military. These markets are growing faster than GDP, and then our work to substitute is actually allows for further acceleration in those markets. It's largely a material substitution play, which we'll show some examples here, and we have significant headroom for growth in these applications. So the first one is a food conversion. You can see that if we will go into a factory floor, work with the plant manager, they're using corrugate and pallets. We have a number of success stories where we've converted from corrugate pallets over to our caliber and intrepid plastic IBCs. We have the advantage of them being reusable. They have over a 10-year lifetime. They're easy to clean. They're FDA-compliant polypropylene. They usually have less than an 18-month payback. So it's a capital investment for our customers, and it pays them back. And we price based on the functionality to the customer. It's a safer, simpler and smarter solution for food handling and processing. Okay. So let's go on to another example. We're very proud of these. Another example is in the chemical conversion space. The value is created by driving material substitution to a better solution. So as you can see on the left, that's a Bottle-in-Cage used to transport chemicals. Those are not typically recycled. Generally speaking, those -- the plastic bottle ends up in a waste stream. So we have a contaminated plastic that's in a waste stream. Our solution is the tough series IBC, which is a recyclable, reusable product, cleanable. So we have a circular economy around that. We have consistent quality. It's waste reduction solution for our customers, all plastic and DOT compliant. It helps our customers move from a one and done to a circular solution, which for many customers, this is very important in this ESG environment. It keeps contaminated plastics out of the waste stream. And our customers really do appreciate that. So let's kind of move on a little bit here to the stock room. We have our Akro-Mils product line is a material substitution for a better solution in stockroom management. You can see that cardboard bins that are on the left-hand side that are often used the industry. We're substituting those for the plastic Akro-Mils bins. They reduce out of stocks and increase turns. They're used as customers implement lean manufacturing to be able to manage their inventory levels better. Poka-Yoke and Kanban are 2 of the lean manufacturing techniques that our customers are using. One of the solutions that we bring to our customers is a computer program that allows them to design their stock room based on specifically customize it to the space and to their needs and then we implement a turn-key solution for them with Akro bins. Now we can move along to a little bit to another innovative product that we're bringing forward to the battlefield. And you can see this is a military product that is there at the back. It's the -- it's an ammunition case that's all plastic. It's replacing metal and wood, which is the current solution. These plastic containers are approximately 30% lighter than the metal and wood counterparts. These are brought in and out of the battlefield. So the UN treaty requires that even the wood and the metal, the older products be carried out. So it's quite a substantial advantage to have the weight savings. And they're also now circular so they could be reused versus the typical wood and metal, which is more a one and done type of a product. They're weather an impact-resistant. I mean the key thing to think about here is that we're developing and implementing solutions to our customers that bring them advantages such as lower cost, lighter weight, easier supply chain and infrastructure. Okay. And we also -- another one that's kind of cool is our dock solution. So here, we're driving material substitution in docks. From on the left, you can see -- this is like people have docks on their lakes, oftentimes they are aluminum, they could be even wood. So we have a product called Connect-a-Dock, which is a modular solution. It's a lighter weight solution. They are also recyclable, but they're usually not recycled, but they -- what they do is allow for a customizable dock situation, they're lighter weight, they're easier for the homeowner to pull in and out, if there are like lakes freeze and they pull them out during the winter. So this is a new -- I wouldn't say a new product, but it's a product that's getting increased emphasis on our commercialization. All right. So how long are we -- how else are we innovating? Some other innovations, our approach to channels. We're implementing e-commerce strategies, what you can see here, we've got 15% compound annual growth rate over the last 3 years in our e-commerce channel strategy for Akro-Mils and Scepter. So this has been extremely good for us. And I think we're just at the beginning really of implementing our e-commerce strategies. We're going to get even better at it. We have other innovative solutions to product development. So launching in the second quarter, this is a fuel -- power fueling station. So this holds 14 gallons of fuel, and it's got a battery in it. So you can use that nozzle there to put fuel in your boat or your power equipment or your jet ski or snowmobile, I don't know if any of you have ever tried to juggle a 5-gallon container full of fuel and keep it out of the environment, which is a challenge. I mean this is a very excellent, I think, product for our customers to -- for ease of use and also, as I said, to keep gasoline out of the environment because I personally have had juggling a gas can to keep the gas out of the lake is a challenge. So this is going to be a good product for us. As I said, it's launching in second quarter. The target audience are the small landscape companies and the Pro users, the do-it-yourselfers and also the power sports enthusiasts. It's simple, innovative controls. It's powered by batteries. It's got high capacity. The treads allow you to roll it out on your dock or even in bad and icy weather conditions, it's got a long reach hose. It holds up to 100 pounds of gasoline, which is pretty cool. You can tell them to buy one. So anyway. So in order to be successful, okay, so one of the key things that we need to do. I mean, it's one thing -- it's great to have product substitution and where you have differentiation, you can command higher pricing. And we can -- we create demand in some of these areas. So for example, like what I talked about in the food processing area, there's a lot of food plants that don't use our products. So we have a tremendous amount of capability and runway to create additional demand. But what's important is not only do we handle the commercial and our commercial excellence in terms of how we go after those opportunities, but also that we have operational excellence to be able to run our plants in such a way that drives lower cost, increasing our productivity, which allows us to get more out of our factories, unlock the hidden factory and which leads to increased revenue. And the way we do all that and sort of institutionalize it is through our people development, right? So hiring excellent people, training them and making sure that they have the skills and the tools to implement our systems. So I wanted to just take 1 minute and talk about our Engineered Solutions. Engineered Solutions, primarily, the end markets for Engineered Solutions are RV and marine, outdoor and leisure and industrial. These are -- these rely heavily on operational excellence. So what we have are solutions for contract manufacturing customers who come to us and want to have their product contract manufacturer or private label. You can see our brands there on the left are Ameri-Kart; Elkhart Plastics, Trilogy and Jamco. Our strategy is to provide customers with exceptional value, emphasizing operational excellence and efficiency. We've got leverage raw material purchasing across the portfolio, design and engineering capabilities, various technologies, including rotomolding, thermoforming and metal, and we also provide services such as secondary assembly and finishing. And what these do is they provide a base load in some ways for our material handling business as we go forward and develop the differentiated products. So in summary, we have 4 powerful differentiated brands with #1 and #2 market positions. We're scaling our commercial excellence to grow in a very end price to the value that we create. We are experts in material substitution, helping brands and customers switch to durable plastics. We're executing our operational excellence system to drive down costs while maintaining our service levels. And then we have engineered solutions to help our contract manufacturing customers implement their needs. We're positioned for future organic and inorganic growth. So we're very excited about material handling. With that, I will turn it over to Jeff, who's going to talk a little bit more about Signature Systems. I think we've got some cool videos, and that's going to be fun to watch. Thanks, Jeff.

Good morning. Again, my name is Jeff Condino. And as Mike and Grant mentioned, Signature is the newest company in the Myers family, and we're excited to be part of the Myers family, and the deal closed 6 weeks ago. And so we're -- I kind of say we're still on our honeymoon phase. But I really want to talk about Signature Systems, and what is Signature, who is Signature Systems. So we view ourselves -- we're the largest designer and manufacturer of engineered ground protection. And we'll kind of get into what is ground protection in the next couple of slides. And as Dave mentioned, we'll show a quick video of some applications of our products. We're excited about the business because there's plenty of industry tailwinds. The total addressable market is $2.7 billion worldwide. And obviously, we have a very small share of the total addressable market. And then the government has spent $1 trillion on the Infrastructure Investment Act and on the Inflation Reduction Act. So both of those are pretty strong tailwinds for our customers, which ultimately need matting to support the infrastructure work that's going on in the country. So when we look at the business, we really look at it in 2 pieces. We have our industrial ground protection and then we have our Stadium Turf Protection. The Industrial Ground Protection is our Megadeck, Duradeck, Signaroad products, which we'll look at here on the next page. But that represents about 80% of Signature. Stadium Turf Protection is about 20% of signature. The one thing to note is Signature is the only company that offers both products, Stadium Turf Protection and an Industrial Ground Protection. There's competitors in industrial, there's competitors in stadium, but nobody offers a complete suite of products. So let me show a quick video. So this is our Megadeck product over 4 feet of water. So you see running heavy equipment. The product is buoyant at floats. And so you'll see they're doing a transmission work here in this particular application and again, the equipment is running over 4 feet of water. This is our Megadeck product line. This is the same job, just a close up of how the product is installed. So you see there's already a layered laying down, and they'll lay the second layer on top of the first layer and pin them together with the pinning system. So it uses an alignment tool to align the mats together. They have dropped the pins in and lock the pins together, which creates a more stable working surface. So they're preparing this particular roadway to string lines up along those poles you see there. So this is one of our customers at work. This is, again, over plenty of water. You'll see how the mats are floating and moving over water. And this is one of our customers, pretty skilled forklift driver. You'll see him flip a mat over here in a moment, but pretty impressive. But each of these mats, sorry, this is again our Megadeck product line, each of these mats weigh a little over 1,000 pounds. So you're not going to get 2 guys to go pick up a mat and move it, you need heavy equipment to lay it down and then obviously, you're running cranes and heavy equipment over this to be able to do the work. And this is the last segment here. This is one of our customers sold mats to a military application, and this was the testing that they were doing to, one, make sure that mats weren't going to crush and that the treads on the tank itself weren't going to mess up the surface of the thing. It passed with flying colors. So kind of taking a little deeper dive into the industrial ground protection. We offer a heavy-duty, medium-duty, light-duty. So again, we're the only company on the industrial side that has a heavy, medium and light duty. So heavy-duty is our Megadeck product. That's our flagship product. That is typically used for heavy equipment, power transmission, distribution, fracking sites, oil and gas industry, wherever you're going to have big heavy equipment running over to protect the surface and protect the people working above the surface. Signaroad is our medium duty. We sell a lot of the Signaroad product in Europe, and it's also used by U.S. companies that will make a roadway a parking lot, movie industry to -- for a movie set in terms of moving the camera back and forth. You don't need as heavy of equipment on it, but it can take a pretty good beating. And then Duradeck is our light-duty product. And the way to think of our Duradeck product is it's a plywood substitute. So instead of people laying plywood across grass to run a tractor, they would lay a Duradeck product. Plywood will obviously absorb water, become very heavy, start to disintegrate, Duradeck will last you forever. And there they lock together. So you'll see there's a locking system on Duradeck and you don't get a plywood to lock together. So heavy, medium, light and then a new product we just introduced last year is a Track Out Mat. So Track Out Mat knocks mud-off tires. And it's used as part of people's storm water pollution prevention plan, which is required. So anytime you enter or exit a construction site, you'll typically see rock today. And that rock, they bring in a load of rocks knocks mud off tires needs to be refreshed about every 2 to 3 weeks, depending on the traffic. The end of the job site, they got to haul that rock out somewhere and dump it somewhere. With a Track Out Mat is a much better solution, knocks the mud off the tires, gets hosed off, gets reused at the next job site as a useful life of 10-plus years. On the stadium turf protection side, we have 2 brands, the OmniDeck brand and the Matrax brand. Within each of the brands, there's a heavy-duty version and a light duty version. Heavy-duty is a closed bottom, typically used on artificial turf, light duty has an open bottom, which is typically used on natural turf and it's perforated to allow air down to the grass. So it depends on what kind of stadium you operate or own, you'll have either a heavy-duty, light duty. And then we sell the 2 products -- the difference is the Matrax has an overlapping flange design. It's a stronger product in terms of moving -- connecting products together because of the overlapping flange. However, it takes longer to install. You start at one end and you can only work one direction. OmniDeck was designed for speed. That was a voice of the customer when the product was developed a few years ago that they want it fast. They want to be able to lay it down fast, pick it up fast. So what might take 8 to 12 hours for a Matrax installation will take 3 to 4 hours on an OmniDeck installation. So speed versus strength. So depending on your customer preference, we offer both, and then we offer both in a heavy-duty and a light-duty version. So as I mentioned, this is 20% of our revenue is in the stadium turf. 80% is in the industrial. So we're headquartered in Flower Mound, Texas, just outside of Dallas. We have our manufacturing site in Orlando, Florida. And what we do in Orlando was compression molding and hot plate welding and CNC Machining for the industrial products. And then we have structural foam molding and hot plate welding for the stadium products. So the structural foam molding is what Buckhorn does. So that's a technology Myers has been familiar with from the compression molding is a new technology for Myers. And it's what signature learned to do years ago and has continued to do for years. And then we have a sales office in the U.K., so a small warehouse in a sales office that houses 2 people. So very small facility and a contract warehouse next door that we can expand space as we need it. But we do store some products in there for a quick ship to our European customers. So our end markets, about 1/3 of our business in 2023, roughly 1/3 of our business went into electrical transmission distribution work. About 1/4 of our business went into civil infrastructure, roads, dams, bridges, different construction type jobs. As I mentioned before, 20% is in our turf protection. We sell 10% to 15%, depending on the year into the oil and gas industry. And then other is everything else we do -- that we do some work with the military and other end markets. And as you can see on the right side of the page, the forecasted demand is a 10% growth rate of composite demand. So a lot of that is fueled by the conversion from wood to composites. So we've seen that conversion happening over the last 5 years, and it's forecasted to continue to happen. As more and more job sites become less desirable for wood composites are the obvious solution. And more and more of our customers that we're continuing to convert continue to build their fleet out. And again, part of the demand is driven by that $1 trillion investment by the federal government. So as I mentioned before, the total addressable market -- and the worldwide total addressable market is approximately $2.7 billion. About $1 billion of that is in North America. And then that's the left side. The right side is if you take the North American -- about 20% of that is composites. And again, as I mentioned on the last slide, continuing to increase as wood is continued to be converted into a composite solution. So the -- why composites versus wood, we'll start with the left side here, right? One is polyethylene is impervious to anything, right? You ship acid in polyethylene barrels. So it's impervious to anything where wood absorbs. And so the concern by many of our customers is cross-contamination, invasive species moving from one job site, geography to another geography. So there are some counties that prohibit wood mats for that reason alone, is because of the cross-contamination and the invasive species. The life of a composite mat versus wood mat is 2 years for wood mat, 10 years for composite mat. So you're going to get 5x a life out of that mat versus a comparable wood mat. So I think question often comes up is, okay, you're going to get 5x the life out of it, what's the cost difference? And it's about 3x. So composite's rough and tough, it's 3x more expensive than wood. Again, it depends on whether you're using hardwood, softwood, number of plies, et cetera. So there's a lot of variations. But an average cost of composite versus an average cost of wood is about 3x. So for 3x the cost, you can get 5x the life. And then the last part, it kind of goes over and we'll talk about the recycling program that we have at Signature. But there's no good solution to recycle the wood mats. So the end of life, they're either going to a landfill, they're getting burned. There's no true solution for the end of life of a wood mat. Where the end of life of composite mat, we launched this program a couple of years ago. So we'll bring mats back from customers. We'll grind them up and then put them back into new mats at 10% of a formulation, we'll put 10% recycled content back into the formula. It's an attractive program for our customers because, first, there's no product going to a landfill. And it's a great ESG story. So many end users, many energy companies are very concerned about their ESG profile, and so we have that solution. So we had our entire process and program certified by a third-party environmental firm. And every one of our products now has a recycling logo on the product itself, showing it's 100% recyclable. And we talked about some of these things already. But first, what's exciting about Signature and the future of Signature is the industry shift again from wood to composites, the long runway from the $1 trillion federal government spend on the Infrastructure Investment Act and the Inflation Reduction Act. The -- from a stadium perspective, more and more stadiums are trying to monetize their investment and host nonsporting events in the stadiums. So by them doing that, they need to protect their field and so they buy a ground protection or rent from one of our customers, a ground protection system. As I mentioned on our track out mat, it's required by the storm water pollution prevention program. And typically, it's been gravel, again, converting over to deposit, the ROI is very compelling to a customer, to an end user to own a composite fleet versus own a -- continuing to invest in gravel that they get no return on. And then our expansion outside of the U.S., we see a lot of opportunities in Europe, which traditionally has steel and aluminum or as they say, aluminium plates that are converting over to composites now. You get better logistics and there's no street value to a composite mat, where there's a lot of street value to a stolen aluminum plate. And then adjacent markets. So as we continue to look at how we grow this business and expand this business, we have identified some adjacent markets that we need to go after and will go after. So we're excited. Again, we want to double this business over the next 4 to 5 years. We see a 10% to 15% annual growth compounded, which will get us there. We're excited about the tailwinds we talked about a moment ago. We have a capacity expansion to get us there that we're adding another press as we speak, should be operational by the end of the month. And then another press Q4, Q1 -- Q4 of this year, Q1 of next year, which will get us to -- which will give us enough capacity to double the business from where we were. And we've built a heck of a commercial team to go after it. And that's the that's the million dollar question, is continuing to invest in more resources versus growth. We've been -- we were on 24/7 at the Orlando plant and have been capacity constrained. So now that we're adding more capacity, our sales teams got to execute. So we have -- at Signature, we have great brands. SignaRoad, MegaDeck, OmniDeck, fantastic industry recognized brands. We're a leading position. As I mentioned before, nobody offers industrial turf protection as well as stadium. And then even on the industrial side, nobody offers a heavy-duty, medium-duty, light-duty solution. We're able to be a one-stop shop for important customers. We're excited about leveraging the Greater Myers Organization. We're happy to be part of Myers so we can leverage that. We were kind of out on our own little island for a while, now we're on the mainland with Myers. So we're pretty excited about that. And we have great customers, blue-chip customers in strong markets. And our ESG profile, we worked on that hard a couple of years ago, getting our products certified by a third-party environmental firm, being able to stamp our products being recycled, we'll roll it out to our customer base, giving them that solution to be able to recycle mats back to Signature that we will put into future products. So we're excited that we're able to be out there ahead of our competition on ESG's perspective. Thanks.

Got it, right. I'll facilitate Q&A. All right. And then, did you want to have pen -- okay. So all the speakers, if you could grab a chair.

So if all the speakers could join Mike up on stage, and we're going to host a question-and-answer session open for everyone. I have a microphone here. And because it's being recorded, we'd like to get everyone's questions in. And so if you could just wait until I come to you with a microphone to ask your questions. Yes, Carolina?

Can you review with us the synergies, expected synergies? And where you expect to identify them with the Signature acquisition?

Yes, Carolina, I'll do that. Jeff, you can come to behind me if -- so we've talked about $8 million publicly. That's in chunks of 2 chunks -- 3 chunks, 2 of $3 million each, and 1 of $2 million. The $2 million chunk is a polyethylene synergy. And so what I like about these synergies, Carolina, is they're clean and easy to get. Another one of the chunks is helping Signature improve its uptime on its structural foam presses, which structural foam is 100% Buckhorn. So taking the knowledge and the know-how from Buckhorn and bringing that in to Signature, helping them with the uptime, which allows reduced outsourcing. That reduced outsourcing is a savings of $2 million to $3 million, normally $3 million. And then the final piece is across all of our grid, across all of our plastics molding, we have a lot of know-how on maintenance systems and maintenance software that we believe, we can improve the uptime and reduce the downtime, unplanned downtime of Signature. And that, again, that run rate is approximately $3 million a year. With that, Jeff, do you want to speak to that a little bit more? I was just teeing that up at a high level.

Yes, no, I think that hit the nail on it, the nail on the head that Flavia asked me yesterday, "Are you going to be able to do this?" I said, "Absolutely." I feel very comfortable that we will be able to achieve the synergies that Mike talked about by the end of next year on an annual run rate.

Yes. Yes. And as a matter of fact, we've said that we would have that by -- an annual run rate by the end of 2025. Oftentimes, when we acquire companies that have multi-plant and multi-location, oftentimes, the synergy pieces are in buckets of $100,000 or $200,000 that is spread across over 6 facilities. We can get that. I mean, a lot of our DNA of our operators, we know how to get that synergy. It's much more efficient and streamlined with Signature. It's 1 location, it's 2 or 3 technologies, and it's raw material savings, it's really clean, and that's why we feel really strongly about that.

Yes?

You showed some very good margins at the EBITDA line. Can you comment a little bit though about the corporate burden? It's running -- it looked to be $32 million, if I read it correctly? About $600,000 a week?

Yes, sure, Doug, that's right.

And how will it ramp as revenues grow?

Grant, do you want to take that?

Yes. Can you hear me all right? Okay. Good. I mentioned just briefly about the Centers of Excellence approach that we're taking on this, Doug. So essentially, what we're doing is we're going to continue to work the Myers Business System for efficiencies and opportunities as we get more scale with the business. So I don't see that growing significantly as we would scale the business. I think it's -- what we're really looking for is to maintain that cost, try and drive out efficiencies. And then as we grow, we just get that spread over more revenue, which certainly improves the margins overall for the company.

How many people are involved within the corporate function, roughly?

I don't know that we've said that number publicly, but it's -- you could equate it to -- essentially, it's about 3% or 4% of our total revenue, obviously. And so from that standpoint, we have, right now, what I would say is a company that's been in transition from being essentially -- prior to 2019, where we had a lot of disparate organizations across the company with the different business units. We're now running the Centers of Excellence, which I think starts to help us to drive efficiencies with common processes, common standards. We are a little bit handicapped by the fact that we still have some different ERPs across the company. And so one of the enablers is to improve on our ERP consolidation and to help drive that. And so we've got a plan, that we're working on a multiyear plan to essentially get down to a fewer ERPs and to leverage that. And in some of our businesses, we've already done this. So like, for example, in our roto business, they're now on 1 ERP after the acquisitions, and we're going to continue to drive that. And having -- just from my personal background, having set up the Centers of Excellence opportunity, it really is about getting common systems and common processes. It just makes so much of a more efficient company.

And just as a reminder, if you could just say your name and the organization, that would be helpful.

Bill Dezellem, Tieton Capital. Grant, I'll actually follow up on your ERP consolidation. Where are we at today? And what ultimately is the end goal and the timeline to get there?

Yes. We have -- again, thinking about it as it's been separate companies that we've -- are starting to bring into the Centers of Excellence approach. All of the acquisitions over the years have had different ERPs. And so essentially, we're, I would say, probably in about the fourth inning right now of working on that. So I would -- over the next 3 years, we really would like to get down to 2 ERPs, essentially having 1 for our Distribution business and 1 for our Material Handling segment. Could those be the same? There's certainly possibilities with that. But we -- they are -- do have slightly different business models. We want to just enable what's best for the business for those 2 segments.

Grant, if I could add on to that point. Bill, so there's 2 strategic objectives we have in the company. One is to standardize our work processes through the Myers Business System. And that's all the litany of things that I've talked about, that we think we do well. We need to run those across all of our businesses and be sure that they're institutionalized and they stay. The other piece is we have to drive to 2 ERP systems. One is probably not the right answer because the 2 businesses are so different. But we've seen -- we've lived and we've been a part of acquisitive companies that never address that. And what happens, particularly as you globalize, you end up with a global company with 20 to 25 ERP systems, and you can never close your books or it's so difficult or you can't be efficient. And we clearly don't want to make that mistake. And so that's why we said is, all right. We've gone from $500 million to $1 billion. We've got good cash flow. We've got some breathing room. We have to address this now. We can't address this when we're $2 billion or $3 billion, it's too late, because we've just seen too many other companies, they actually trade at a discount because there's so much complexity inherent because their systems -- it's so much harder to fix it when you're 3x our size than it is now. So that's our priority over '24, '25, and '26. And then Grant's right, about fourth inning, we've cleaned up some of it, but we still have some more work to do. But it's definitely -- those are the 2 big imperatives we've got.

Actually, I know I'm not supposed to go on [ Mike ]. I'm going to ask, what's the dollar savings? I know there's business reasons to do it. But is there just a money dollar amount that, that will capture over time?

We have not come out publicly yet on the savings amount. I would say, we certainly will have some savings with us. We are literally still working on kind of the final timing and the cadence of it. And so we'll provide more information in the future on this. But at this point, I think we want to just say our strategy is to get down to 1 or 2 ERPs for the company. So, yes.

Without a doubt, there is the cost, but there's also a savings to it on this corporate costs.

For sure.

Christian Zyla, KeyBanc Capital Markets. Thank you for the insightful presentation this morning. Just first question. I know we're 3 months into the year, but -- so this might be a little premature, but just how are revenues tracking for the year?

Grant, do you want to take that?

Yes, I'll take that. So we are in this kind of a quiet period, but I'll talk a little bit about what we're seeing in the markets. And so overall, we do continue to see some choppiness, particularly in the RV and the marine markets. So I think that's going to be something that we have talked about publicly before that we're going to just see where that when that starts to recover. We've thought it's probably more likely going to be towards the latter part of the year in those markets, but I think that's still a TBD as you look at those markets. The other thing, Christian, is just to think about our revenue and how it builds throughout the year, it is important to recognize that Signature, we did make that acquisition February 8. So that's not something that we get that January and February, first week of February revenue. So we'll start to see that ramping up really more after the second quarter when we start to get that full impact in our results. And then also, we've talked about some of the military opportunities in the canisters that we have. And we've talked in the past that, that starts to ramp up in April of this year, really the second quarter is when we start to see that coming in. And so to some degree, as you think about it, it's going to be a build with some of these opportunities more towards the latter part of the year, given just the dynamics in the hydraulics that's behind that, so.

Yes, Christian, if I can just add on to that point. I mean, in general, outside of power sports, RV marine, even consumer, and even to a degree, the tire business, what I see -- what we see, what our sales reps see, their reality is if a consumer can defer a purchase, they're deferring that purchase. They're focused more on house payments, food, the essentials. And if they need to run an extra 6 months on old tires, that's what they're doing right now. And so that does -- there is an impact to that. Now again, the reason we feel comfortable navigating cyclical markets is, cyclical markets always mean revert. And so right now, we've got a chunk of our demand, a lot of it is in the Engineered Solutions business, that's in some cyclical trough conditions. Again, you would look at RV as a market and say, there's a lot of baby boomers who maybe have deferred their retirement, but are eventually going to retire, and they got the financial means to move into the RV sector. Maybe that's not the next quarter, but over the next 3 years, 5 years, that's still going to be a decent market, and we have a very strong position there. Just right now, it's down because of interest rates. We do hear when we go to boat shows and RV shows or even some of the consumer product shows, even some subtle breaks on interest rates, the dealers of all these accessories and high-priced toys feel that, that would stimulate demand. Just from a mental standpoint, we hear that. So again, let's just see what happens as interest rates unfold. And what would that do to catalyze RV sales or power sports or boat sales.

Good. I just have one follow-up. Just a question for Dave, for maybe the team generally. If I look at the blended material handling operating margins over the course of history, ceiling has been just under 20%, give or take. With the addition of Signature and the commercial excellence initiatives, where do you think that new ceiling could be? And what is the timeline for that?

Go ahead, Dave.

Grant?

Yes. I mean I think you could probably do the math with it, Christian. Essentially, we provided what we saw with our -- what we're calling our 4 power brands in that portfolio. And so overall, those margins and that revenue is it's 50% of our business, and we essentially have a margin of 30% to 35% in that area. The Engineered Solutions is -- we're in that trough so we've given a target range of 8% to 15%. And so that's -- that recognizes the cyclicality of that business. And then within that, the distribution business, we want -- we have a target range of 10% to 12% for the distribution business. I don't think it's -- we talked about it in the Q4 earnings. We're not there yet. We have a lot of Self Help initiatives that Jim talked about on improving that but we do see a longer-term opportunity to get up to that range. So overall, for the company, we would see the business essentially at a 15%-plus margin. And then just in terms of the growth, Jeff talked about the Signature opportunity of growing 10% to 15% CAGR over the next several years. And we would see in our power brands, probably something that we would continue to see some good mid-digit type of growth with that. And then the -- our storage, or excuse me, our Engineered Solution portfolio is probably more in that kind of -- you kind of cycle that out with the trough with what those markets are doing, so.

Yes. Christian, that's just a key point, it's where we're taking the company over the next 5 years is that storage handling protection. And for all the reasons we discussed, it's defendable, as competitive, most value-add, we know it, we can grow in it, we feel we can buy well and then we can run them well. And that's really, if you think about what's Myers going to be? Really look at that portfolio. It's notwithstanding the Engineering Solutions business is a fine business. Also the Distribution business is a great cash-on-cash business, particularly when it hits a stride. But if you look at where we're headed and where we're driving the company, it's at Storage, Handling and Protection. And that's why we think there's so much shareholder value to be created if you just look at the comparative multiples. And look, Trex and Azek, I know where they trade, I know those businesses. They have $10 billion market caps. We're not there. So there's a little bit of a small cap disconnect -- discount you're going to put on it. But directionally, it's the same product with the same competitive advantages. And that's what I think is largely misunderstood. And that's what we're trying to remedy today.

I see an additional question. Let me get to you.

Mike, you had referenced that you have been trying things. I think it was in your presentation. You've talked about a lot of good things today. So I'm not trying to be a Debbie Downer but more insightful is where my -- insight is where my question is coming from. Talk to us about something that you all tried and ultimately decided, you know what, we need to pull a plug on this or you flat out failed or whatever the case may be?

Yes. So where do I start? So the big ones, we said, look, we know this model. I've got a lot of very experienced professionals, probably about 6 or 7 dozen we brought in that know the procurement, the supply chain, the asset management, the pricing really, really well. So let's use that to make the money. And then how do we deploy that? And our initial thought was this is a company that needs to grow by acquisition, but it hasn't. So let's do some acquisitions that we know will be simple. And so that's where we elected to acquire into the rotational molding business also into the Distribution business. Both of those businesses have relatively low barriers to entry. Now we were able to get into those businesses and buy assets and companies at 6 or 7 times, and we felt that with our polyethylene savings, we could -- that would trend us up another turn or two. So we could actually buy quality businesses that delivered value at attractive prices. At the same time, we felt they would be relatively simple and straightforward to integrate. I would say that we found that, however, and the roto molding acquisitions were highly accretive until the bottom fell out of RV and the bottom fell out of marine, and the Thor -- just -- announced our earnings and again, had some headwinds in that. [indiscernible], all those companies are Winnebago, we're all facing the same thing. We did the right thing, Bill, but I don't need to do any more of acquiring companies with low technology or low barriers to entry. I've had my fun there. That's -- because an employee can leave the company and start up their own business and be a competitor and be disruptive. And we've had that happen in both of those industries, and it's not uncommon. In metal bending, metal fab, rotational molding, distribution, where the human capital also often comes in and goes out of that door every day. And so really, I like the big complicated products that have barriers to entry, technology or capital or both or brand. And so that's where we've said, as we kind of get some warm-up lapse built with the acquisitions we did in 2020, '21 and '22, they serve their purpose. They made us better. We learned a lot. That's why I said we've learned. But we've also learned that we've done enough of those. And so now it's like let's move in and go do the Signature-like acquisitions, which is just the cat's meow, I mean -- and so it's like how do we go do more of those. And they're out there. We can grow this company to much larger than it's today, drive the EV to a greater multiple than it is today by acquiring Signature. There's enough of them out there. And also, what's really interesting is a lot of these businesses, these niche businesses are a little bit odd. And because they're a little bit odd, and they don't totally fit in well, there's a little bit of a depression in your acquisition price because they're a little peculiar. Well, we can do peculiar, particularly if it's in the substrates that we're in. And so we'll take those all day long, Bill. So that's it. We did the easy falling off the log acquisitions, low barrier to entry, probably too low. And therefore, we would remedy that, and we have. Yes, go ahead, Grant.

No, I would just add. Just because I've been here for about 10 months now. And one of the things that was really compelling to me when I was looking at the company before joining was the 3-Horizon Strategy because I've -- for those of you that know me and those of you that don't, I've spent a lot of time doing different mergers and acquisitions, divestitures, all different types of deals. And it really struck me the opportunity to create value by learning from the smaller deals and then leveraging those learnings into bigger deals as we start to move into Horizon 2 and Horizon 3. And that's kind of an unhidden value that really the team has done a nice job on capturing. And I can guarantee just the things that we've done in evaluating the Signature acquisition and working on the integration plans, all those are built from that learning culture of these initial deals. And it's a really powerful tool that the team has developed and is the leverage. So I was really happy to see 10 months later how that's really played out.

Yes, Signature went really smooth. We're very clear on what we need to do and how to execute it. We wouldn't have been there had we not done some of these smaller, more simpler acquisitions. It's a good point, Grant.

I'm going to have a follow-up unless there's -- unless there's more? Okay, stop me when I need to stop. So Jim, you showed a map that had 3 locations in Central America. Where are those at? And why are there locations in Central America?

Yes, so we are in Guatemala and Panama. And so those are there to service the Central America location and to also service international export business there. So that's why they're there, and they're very effective, and we have good market share in that region.

Yes, Bill, if I can add on that a bit. Back in -- back 20 or 30 years ago, when retread was more popular. Retread was more popular in developing economies. And so because new tires were too expensive, and so you retread old tires. And so Myers at the time, Myers Tire Supply had operations in all sorts of developing countries, whether that was in Africa, African continent, Eastern Europe, Central America, North, the North part of South America, ultimately, though, it became too complicated to run all those and the value wasn't there. So over about 10 or 20 years, they were shut down. The ones in Central America are uniquely profitable, and they actually are a nice little launching pad based upon their location for us, as Jim says, run our export business out of there. So half of that, out of Panama, it's an export business, half of that is local supply. But again, it's a holdover for some of that retread business via Salvador, Guatemala and Panama. Again, in that area, Myers is by far the leader, services all the car dealerships for their tire supplies. The defect is it's just a small market. So that's why, given the location in Panama, we've elected to run export out of there as well.

And then, Jim, in your presentation, you referenced that there are a lot of efficiencies to be gained within the business. Walk us through some of the bigger ones and maybe some of the low-hanging fruit. And then after that, maybe some that are not as obvious but potentially could be very powerful.

I'll just break it into 2 pieces, Bill. Again, operational excellence and then commercial excellence. So if you look at operational excellence first, we're reducing old inventory, doing an ABC analysis, really understanding where the money is made. We haven't done that before. We're doing that now. So inventories, ABC analysis are some reducing cost. Those are core competencies that we're bringing into this business that we really haven't focused on previously. From the commercial excellence side, it's sales training, it's sales force, it's market planning processes. It's managing improvement, which is a process that we run together around the operations and commercial. What is the strategy of the business, what are the key things we're doing from a managing improvement perspective. Those are disciplines along with scorecards, I'll say, and metrics around salespeople. So heavy marketing, as you've seen, heavy improvement in the sales training arena, sales force, sales discipline, effective sales and account planning processes as well. We haven't had those before, account planning processes, we now have those. So just a lot of rigor and discipline the way we have on the manufacturing side of our company manufacturing, Materials Handling side of our company is now we're bringing that into the Distribution part of our company, Bill.

On the defense business, I think a couple of quarters ago, you guys highlighted a contract win in the 155-millimeter shells, artillery shells. How should we think about the size of that business? And are you receiving more inbounds given the recent U.S. military qualification? And just kind of what are your thoughts on growth there?

Yes. So we have we have secured another outstanding PO for that business, also the 155 shell casing. So we see that as kind of a good first step with that overall business. I think all of you know that working within military contracts, sometimes there's some stop starts on just the timing of it. But we see that, unfortunately, just the demand for military products are heating up pretty substantially globally. So we would see that. I think, Mike, you've talked about like a $30 million potential opportunity with these first pieces. We've already been qualified for the NATO country. So for the most part, we have opportunities within the NATO countries, the U.S. military, even though we're not directly supplying them, we're going through their direct supplier. But we are in a good position now to be able to supply the 155 canister. The -- there's 42 different NATO countries, if my memory is correct. And so we do see some greenfield opportunities for countries that we're not currently supplying to leverage that to more business. Right now, I would say that a lot is going to be dependent on just how things play out with the overall restocking by these countries. And so we don't have a lot of competition in that area. We think we've got some good opportunities with, I would say, longer-term tailwinds over the next several years for this.

And just, Christian, there's about a $200 million addressable market, we believe, for the plastic containers. The overall market for wood and metal is, let's say, 8x that directionally, globally. We don't think we're going to take all of the share, but we think there's a part of the share that's conducive. And we think that addressable market is about $200 million for the plastic casing. Right now, Grant, we've got, like you said, about $30 million. And so there's some runway there. What we look to do is that's innovation, right? Those designs are really technical. And so to develop that, we actually develop it in the U.S., but also in Toronto with some very good material scientists in both locations for that business. They've developed these designs, which we think are -- they're progressing very well with qualifications in the NATO countries for shell casings other than the 155. What we've looked at there is, we are #1 or #2 in the portable fuel can business, the gas can business. But if you look at that, you've got electrification, right, of lawn products that are going electric. And so you look at the gas can business, the gas can business is going to be a good business because we are going to be one of the last 2 competitors standing in that business. That's a good place to be. We've got a good advantage. However, short term, there's going to be some ups and downs with that as inflationary drives consumers spending money on gas cans or not. What we wanted to do was have military be strong enough to overcome that EBITDA gap and then some. And we're definitely in that position. We're actually very pleased with the EBITDA dollars this year and then, let's say, over the next 5 years that will come out of military. It will more than offset any short-term movement on gas cans driven by electrification of lawn equipment, as an example.

Yes. And the other thing, too, I just -- I mean, I just fundamentally always believe this that -- is this a product that could provide good use out in the field? And the feedback that we've had is that it's a much better product for soldiers to be using in the field. And so that's something that I think really resonates well with me as well, too, as it's not just all the other things we talk about in terms of the lighter weight and things like that. It's actually the people that are using it in the field really like that product so.

It doesn't look like there are any questions coming in online, but we do have time for one more question. I'll just address it up to you. And as a reminder, the speakers will be here after the presentation. So please stick around and ask your additional questions. Carolina?

Yes. Can you discuss the CapEx requirements across the 3 segment? So Storage and Handling, Engineering and Distribution. And then in addition to that question, just the step-up in CapEx in 2024?

Sure. Grant, do you want to do that?

Yes. So we've got a couple of things going on. In general, I've talked about it in my section, we would see a kind of long-term view is about 2% to 3% of our revenue is CapEx for maintenance projects and replacements and things like that. We do see with Signature that there are some step functions. Jeff talked about the capacity that they're adding. And so essentially, what we have embedded in our guidance for '24 is this additional capacity that we have, for Jeff's, the 2 machines that he talked about putting in there. Once that's put in place, we would see Signature very much in line with the rest of the Myers business of 2% to 3% CapEx requirements. The Distribution business, we did talk a little bit about the ERPs before. We will have some CapEx that we'll have as we look at some of our ERP consolidations, but we are managing that within this budget that we've set up on kind of the targets that we want to stay within. And that's something that we'll manage over the next several years as we look at that. We don't have plans for adding distribution centers or anything else like that but if the business grows, obviously, we would probably take a look at that, and that could drive some incremental OpEx that's outside of that range, but I don't see anything at this point in time.

Between Engineering and Storage and Handling, is it similar?

It's similar, right, yes.

It's similar between Engineering and Storage Handling, that's the question.

Right. Yes. It tends to be similar between those business units. Some of it's a little bit cyclical just based on the age of the equipment and things of that nature. And so we do see right now a little bit more CapEx and in particular, technologies we have, but that's just kind of the normal noise that you have over an extended period of time.

Yes. Grant, on that one. So Carolina, just for growth capital, it's going to be Storage, Handling and Protection. We're not going to -- that maintenance capital that Grant is speaking to is you're going to have to maintain your assets. But as far as growth capital, that's largely going to go in Storage, Handling and Protection.

Well, that concludes the time that we allowed for the webcast. Thank you, everyone, for your attendance today and online.

Thank you.

Thank you. Thanks everyone.