Ladies and gentlemen, welcome to the Myers Industries, Q2 2024 Earnings Call. My name is Kenneth, and I'll be coordinating your call today. I would now hand you over to host Meghan Beringer to begin. Please go ahead.

Thank you, Kenneth. Good morning, everyone, and thank you for joining Myers’ conference call to review 2024 second quarter results. I'm Meghan Beringer, Senior Director of Investor Relations at Myers Industries. Joining me today is Mike McGaugh, our President and Chief Executive Officer; and Grant Fitz, Executive Vice President and Chief Financial Officer. Earlier this morning, we issued a press release outlining our financial results for the second quarter of 2024. We have also posted a presentation to accompany today's prepared remarks, which is available under the Investor Relations tab at www.myersindustries.com. This call is also being webcast on our website and will be archived along with the transcript and script of the call shortly after this event. After the prepared remarks, we will host a question-and-answer session. Please turn to Slide 2 of the presentation for our Safe Harbor disclosures. I would like to remind you that we may make some forward-looking statements during this call. These comments are made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. Such statements are based on management's current expectations and involve risks, uncertainties, and other factors, which may cause results to differ materially from those expressed or implied in these statements. Also, please be advised that certain non-GAAP financial measures, such as adjusted gross profit, adjusted operating income, adjusted EBITDA, and adjusted EPS may be discussed on this call. Further information concerning these risks, uncertainties, and other factors are set forth in the Company's periodic SEC filings and may be found in the Company's 10-Q filings. Now please turn to Slide 3 of our presentation. I am pleased to turn the call over to Mike McGaugh.

Thank you, Meghan. Good morning, everyone, and welcome to our second quarter 2024 earnings call. I will begin today with a review of the performance highlights from the second quarter. I will discuss the progress we're making in executing our strategy. And I will then hand the call to Grant to review in detail our financial results and outlook for the remainder of the year. Our second quarter results were bolstered by the solid performance of our recently acquired Signature Systems business. These results reflect the company’s first full quarter with Signature Systems. This business is benefiting from worldwide investments in infrastructure and enabled Myers to outpace the demand headwinds in the recreational vehicle, marine, and automotive aftermarket end-markets. Combined with our cost reduction and operational improvement initiatives across the company, Signature helped us drive an expansion in gross margin, operating margin, and adjusted EBITDA margin, sequentially and year-over-year. Myers’ second quarter adjusted EBITDA of $38.9 million and an adjusted EBITDA margin of 17.7% is a strong quarter in terms of performance. Adjusted diluted earnings per share also improved year-over-year. As I highlighted at our Investor Day earlier this spring, we anticipated demand to be choppy through this year. As I said then, we're not out of the woods yet. Indeed, we are seeing continued soft demand in our sales to the recreational vehicle, marine, and automotive aftermarket end-markets. In our food and beverage end-market, we know that the seed box business is also cyclical. Following strong years of seed box sales in 2022 and 2023, 2024 is showing signs of cooling demand. We are growing our industrial box business to help mitigate the volume decline of seeds going forward. In light of the softer demand, we continue to take actions to reduce costs and increase productivity across the company. These actions include the consolidation of three distribution centers in our Myers Tire Supply business, as well as today's announcement of the consolidation of our Atlantic Iowa Rotational Molding facility into our other rotational molding facilities in Indiana. We're able to reduce our footprint and reduce our costs due to the productivity gains that I've spoken about in past calls. We expect these closures to be completed in 2025 and the resulting annual cost savings of approximately $5 million to be fully realized in 2025, as well. With these actions, we are on track to deliver the $7 million to $9 million in annualized cost savings we've committed. These savings will impact the income statement in 2025. In addition, we are also on track to deliver the $8 million in annualized cost synergies in 2025 in connection with our acquisition of Signature Systems. Grant will speak to our cost savings and synergy progress in more detail in his segment. I'm confident that our productivity improvement and cost reduction initiatives will help us navigate the cyclical demand conditions some of our end-markets are experiencing while also positioning the company favorably for when these conditions revert to stronger levels of demand. As a result of the continued soft demand conditions in the referenced end-markets, we felt it was prudent to lower our full year adjusted earnings per share guidance to a range of $1.05 to $1.20. Grant will provide a more detailed discussion of our outlook momentarily. Before I hand the call over to Grant, I’d like to speak a few moments reviewing our strategy that continues to guide our decisions and actions as we transform Myers Industries. Please turn to Slide 4, which provides a reminder of the three Horizon strategy roadmap that we have followed for the last four years. In Horizon 1, we built a strong foundation of operational and commercial excellence. We gained experience and scale through smaller bolt-on acquisitions and, as a result, we were well-positioned to announce our acquisition of Signature Systems, largely accomplishing our Horizon 1 goals by our 2023 target date. As we enter the second horizon of our journey, we are building on the fundamentals established in Horizon 1 to transform Myers into a stronger, simpler, high margin growth-oriented company. We believe this strategy and our approach to acquiring and building businesses than branded products, higher barriers to entry, clear long-term growth tailwinds, and significant commonalities with our four power brands will unlock meaningful value creation for Myers Industries long term. Slide 5 and 6 of today's presentation are a reminder of our Horizon 2 strategic imperatives and the resulting strategic lens. This includes the focus on growing the storage handling and protection portfolio as well as maximizing the value of our Engineered Solutions and Automotive aftermarket portfolios. On Slide 7, we summarize the progress we've made since our first quarter earnings call. Notably, we are continuing to benefit from strong growth at Signature Systems, as well as realizing gains in productivity and taking cost reduction actions in our Engineered Solutions and Automotive aftermarket portfolios. Within the Storage Handling and Protection portfolio, we have a long runway for growth in the infrastructure and military end-markets, and we continue to invest capital and innovation in this portfolio. In the Engineered Solutions and Automotive aftermarket portfolios, we are focused on maximizing values by driving further improvements in efficiency, reducing our costs, maximizing cash flow, while delivering excellent value to our customers. These ongoing initiatives, combined with improved growth and profitability across the portfolio and contained continued contributions from our four power brands listed on Slide 8, will help us maximize cash flow and delever appropriately, an important priority for us following the acquisition of Signature Systems. In summary, we believe our second quarter actions and results demonstrate meaningful progress on our path to transform our company. And we are confident that the strategy we're implementing will drive long-term shareholder value creation. Now I will turn the call over to Grant for a detailed review of our second quarter financial results and updates to our outlook.

Thank you, Mike. I would like to begin on Slide 9 to go over the full summary of the second quarter 2024 financial results. Net sales were $220.2 million, which increased $11.8 million or 5.7%, compared to the second quarter of 2023, with the increase primarily driven by the Signature Systems acquisition, which contributed 15.2% of inorganic sales growth as compared to Q2 of last year, partially offset by a 9.6% organic sales decline related to lower pricing and volumes in both the Material Handling and Distribution segment legacy businesses. Our quarterly adjusted gross profit was $79.6 million, an increase of $11 million or 16%, compared to $68.6 million in Q2 of last year, largely driven by the Signature Systems acquisition and partially offset by an adjusted gross profit decline in our legacy business. Adjusted gross margin was 36.1% compared to 32.9% in 2023. The variance in adjusted gross margin was driven by the acquisition of Signature Systems, favorable product mix, and lower material costs, partially offset by lower pricing and volume. Selling, general and administrative expenses decreased $1.8 million sequentially or 3.4% and $0.7 million year-over-year or 1.3% to $51.7 million. SG&A as a percentage of sales decreased to 23.5%, compared with 25.8% in the first quarter of 2024 and 25.1% in the same period last year. Excluding contributions from Signature Systems, SG&A expenses declined 18% year-over-year and SG&A as a percentage of sales would have been 22.8%, driven in part by lower incentive compensation accruals reflecting Myers’ full year outlook and other cost savings initiatives. Adjusted operating income in the second quarter increased 51.5% year-over-year to $28.8 million as compared to $19 million in Q2 of 2023. Second quarter adjusted EBITDA was $38.9 million, which increased 57.4% compared to the prior year quarter again, largely driven with the addition of Signature Systems. Adjusted EBITDA margin increased 580 basis points to 17.7% from 11.9% in the second quarter of last year and, as Mike mentioned, this is one of our strongest quarters of adjusted EBITDA performance in recent history. Adjusted earnings per share was $0.39 compared to $0.35 in Q2 of 2023, with the variance compared to the second quarter of last year driven by the improvement in sales and operating margins, offset by increased interest expense related to the term loan, which was used to finance our acquisition of Signature Systems. For an overview of each segment’s performance, please turn to Slide 10. For the Material Handling segment, net sales increased $22.7 million or 15.9%, compared to the prior year. The increase was driven by 22.1% inorganic sales increase related to the Signature Systems acquisition, partially offset by a 6.3% organic sales decline resulting from lower volumes and pricing. Material Handling’s adjusted EBITDA increased $11.6 million or 39% to $41.5 million, and adjusted EBITDA margin increased to 25% or an improvement of 420 basis points compared to the second quarter of 2023. These positive deltas were primarily driven by Signature’s contribution, which was partially offset by a decrease in sales volume and pricing in our other businesses. Net sales for the Distribution segment decreased $10.9 million or 16.7% year-over-year to $54.3 million, driven by lower sales volumes and pricing. The segment’s adjusted EBITDA decreased $0.9 million or 20.1% to $3.8 million, resulting in adjusted EBITDA margin decreasing 30 basis points to 6.9% as compared to 7.2% in the prior year quarter. The variances in EBITDA and margin performance compared to Q2 of last year were primarily driven by the decline in sales volumes and pricing, partially offset by a favorable sales mix in material costs. Slide 11 and 12 of today's presentation provide updates on our progress to achieve our $7 million to $9 million in annualized cost reduction targets and $8 million in synergies with the Signature acquisition. As prefaced earlier, we are on our way to achieve these initiatives with the recent cost reductions and the efficiency improvements as well as the rationalization of our manufacturing footprint. These actions include the consolidation of three distribution centers in our Myers Tire Supply business and the consolidation of our Atlantic Iowa roto molding facility into our other rotational molding plants. We are able to reduce our footprint and reduce our cost structure due to the productivity gains we've achieved. We expect these closures to be completed in 2025 and will deliver approximately $5 million in annualized cost savings. On Slide 12, you will see that we are on plan with our Signature integration and will continue to benefit from productivity and operational improvements, material savings, and other initiatives. Through these combined initiatives, we will continue our dedicated efforts to self-help the business, which in turn will create a new simplified Myers that is advantageously positioned for growth in the coming years. Turning to Slide 13. Free cash flow for the second quarter of 2024 was $9.9 million compared to $16.7 million for the second quarter of 2023. Working capital as a percentage of net sales was up roughly 400 basis points compared to the second quarter of 2023, which reflects an increase from historical trends as a result of the acquisition of Signature Systems, because we have the full amount of working capital, but not yet a full 12 months of Signature sales. Thinking on that is necessary to grow through our acquisitions, however, as you will see later in the deck, we are well positioned to pay down the debt with a goal to decrease our net leverage ratio under the credit agreement to below two times within two years of the closing of Signature. Capital expenditures for the second quarter of 2024 were $4.4 million and cash on hand at quarter end totaled $37.3 million. And finally, our leverage ratio under the credit agreement was 2.6 times. On Slide 14, I want to discuss Myers’ capital allocation priorities. As noted, we are focused on creating a simplified Myers through cost-cutting initiatives and increasing revenue and volumes through the strength of our four power brands. We are focused on reducing our debt following the recent acquisition of Signature Systems and are targeting to reach a leverage ratio of under two times within two years of the closing of Signature Systems. We also want to maintain a strong balance sheet and ample liquidity for our business. At the end of June, Myers had $37.3 million of cash on hand and over $230 million of a large undrawn credit facility. We will continue to fund maintenance and other CapEx requirements, although as you can see, we reduced our expected CapEx spend with the revisions to our outlook this morning. We also plan to continue with our existing practices for dividends. Finally, we will evaluate the most beneficial uses of cash to create value through additional acquisitions with targets similar to Signature with clear commonalities to our four power brands or potentially through share buybacks, the timing of potential acquisition opportunities, and when debt has been paid down to more historic levels. Now please turn to Slide 15 for an update on our outlook for the fiscal year 2024. We are revising our guidance to reflect the slower demand and challenges within certain end-markets and the broader macroeconomic conditions which we discussed earlier today. Our new guidance ranges are net sales growth of 5% to 10%, net income per diluted share in the range of $0.76 to $0.91, adjusted earnings per diluted share in the range of $1.05 to $1.20, capital expenditures in the range of $30 million to $35 million, and effective tax rate to approximately 26%. Turning to Slide 16, I want to highlight some of the near-term growth opportunities that we foresee during the second half of the year that we are quite excited about. Signature Systems will continue to benefit from long-term infrastructure improvement projects. To meet this increased demand, we are ramping up our production capacity. Additionally, we have recently launched the exciting new Diamond Track product, which is a product that removes tire sediment and mud on-site at construction and infrastructure projects. The Diamond Track allows this removal in a more economical and efficient manner versus traditional gravel. This is another example of Myers’ ability to convert the market from traditional materials to reusable composites that are more economical and environmentally friendly. On Slide 17, Scepter also appears poised for growth with increasing sales of military products. Our military products serve as lightweight alternatives to most existing animal casings and we have successfully aligned our operational capabilities to capitalize on this opportunity. We are pleased that these Scepter products meet all vital qualifications, including NATO and the US Department of Defense, and we secured recent contract wins in the United States and are also engaged in award processes for additional potential contract wins in Europe. We are estimating that the Scepter military business will grow to approximately $40 million in revenue through 2025, compared to only $10 million of military revenue in 2023. Lastly, and just a note on the status of the current storm season, as questions start to arise at this time of year, particularly given the recent hurricane Beryl, we are seeing an uptick in our five-gallon gas can sales from an early start to the hurricane season, which resulted in significant power outages in Houston in July. We will continue to monitor the potential impacts from what is expected to be a strong storm season this year. Now I will turn the call back to Mike for some closing comments.

Thanks, Grant. Please turn to Slide 18. As I conclude my remarks, I'd like to reinforce how we are moving forward in Horizon 2 of our strategy. First, throughout the quarter, we took action to improve costs and efficiency to maximize value in the Engineered Solutions and Automotive aftermarket portfolios. I outlined approximately $5 million of annual cost reductions that will impact our results in 2025 and beyond. This is a component of the $9 million of total annual cost reductions highlighted by Grant in his talk. Second, we are growing the branded products in the Storage Handling and Protection portfolio. We have highlighted growth projects that largely aim to replace other materials with our sustainable plastic products. This is being driven across all four of our power brands: Buckhorn, Akro-Mils, Scepter, and Signature Systems. Third, our continued work to institutionalize our commercial excellence and operational excellence gains from Horizon 1 continues to provide benefits in terms of our EBITDA margin and dollars. As a reminder, we are making these gains permanent through the establishment of our Myers business system I've discussed in prior calls. Lastly, we continue to position the company so that it can capitalize on long-term growth trends. Two good examples are Scepter’s growth runway in military applications and Signature’s growth runway in infrastructure. We anticipate that these long-term trends will help drive the company's growth over the next several years. With that, I'd like to turn the call over to the operator for questions.

We have our first questions from Jacob Mal from KeyBanc.

Hey, good morning. This is Jacob Mal filling in for Christian today. Thanks for taking the questions.

Thank you, Jacob.

First one for me. I’d like to ask about the sustainability of Material Handling margins following the Signature deal. Should we think that this quarter is a new normalized level for the segment given the mixed bag of Signature relative to ongoing pressures in your core Material Handling markets? Or was there some variable mix benefit in Q2?

Yeah, thanks, Jacob. We did have some improvement in the margin from the Signature Systems acquisition. So that was something that we look at as a very positive aspect for the business and really highlights why we thought that this was such a good acquisition for Myers as it really effectively starts to create the value that our power brands can contribute. So, I would say, in general, we continue to see strong margins. As a normalized basis, we will have some ups and downs with mix. We did have some favorable mix this quarter. We also had some offset with pricing and volume which negatively impacted the margins, as well. Therefore, we are probably a little bit more conservative on this, estimating some slight decline in gross margin for the second half of the year due to the demand trends in the key end-markets that seem to be creating some headwinds for us right now.

Yeah, Jacob, just I appreciate that question if you refer to Slide 10, where we break out the results by segments and you have Material Handling going from 21% basically up to 25%. That should be a good metric. We believe this Storage Handling and Protection portfolio is 80% of the profit runway of the company. Those are all differentiated leading brands. There's good competitive modes and good growth runway. And so directionally, your question is on point. The quality of the business should sustain there. Remember also in the Material Handling piece, you've got the Engineered Solutions business, which is largely a contract manufacturing business that has EBITDA margins as we've discussed before at 10% to 12%. So that dilutes a bit. That's why we are focused on driving the Storage Handling and Protection portfolio is because of the quality of the margins. And again, I think that that should be noted going forward as where our targets will be.

Understood. Thank you for that. That's good color and I think it leads well into my next one, which is the same question for the distribution segment. Can you provide any latest thoughts on that segment and what you're seeing in that business? Are mid-single-digit percent margins in Distribution sustainable given the volatility we've seen in the past few quarters?

Yeah, so we reported in that Distribution segment of 7% EBITDA margin. As we've discussed before, we have aspirations for higher margins in that business either high-single-digits or even low double-digits. What we found over the last couple of quarters is that the retail tire business and the resulting tire supply business, which is where we are, is off directionally 10% year-over-year. When that happens, you lose some operating leverage and so you're going to unwind a few hundred basis points on EBITDA versus your expectations. That 7% give or take is directionally a good number going forward. Like I said, as you have in that space tire repair, right now anything that's impacted by high interest rates, the consumer is not buying tires at the same replacement rate as we would have hoped a year ago. As a result, the wheel weight tire valve, and tire pressure sensors that we sell are also down. So what you see in that 7% is just that an unwinding of operating leverage when your revenues are off 15% year-over-year in Myers Tire Supply business. We are trying to combat it by streamlining and we talked about the ERP work we've done over the last six to nine months because we got on the same ERP system; we were able to reduce three distribution centers going from eight down to five. That simplifies the business, allows them to take costs out, and ultimately think that will be reflected in the margins. But 7%, Jacob, is probably a fair number going forward.

Yeah, I would say so. The other important part of these consolidation distribution centers is that it really is more of an efficiency play, as well too because we don't see a significant deterioration in terms of any service quality levels or anything else like that. So on-time delivery will continue to perform well to the standards that Myers had set in the past. But I do think that we, as Mike said, thought this business might be able to improve the overall margin. We just see with some of the headwinds right now that's probably not likely. And so I think that that range of 7% margin is a pretty good one for the future looking out the next couple of quarters.

Got it. Thank you. Just a couple more from me. Can you speak to any productivity gains that you've made in either segments that enabled the footprint consolidation? And then maybe a related question to that is with the defense business ramping, do you have available capacity should we see an accelerated ramp in orders from the new Scepter products?

Yeah, so, Jacob, this is something I've talked about since I've arrived over the last four and a half years regarding the operational excellence. I talked about the sales and operations planning processes we've brought in. The sales and operations planning software and systems, along with the personnel we've brought in from some of these large cap companies helps us to schedule our plants better and operate them better. So, I talked about the hidden factor. We are actually unleashing and finding 20% to 30% more capacity out of the given machine. This capacity allows us to take our assets out, streamline our footprint, simplify the company while having the volume to satisfy market demand. So what you're seeing in these consolidations is proof of all the S&OP and operational excellence work we've been doing in 2021, 2022, and 2023. Regarding the military, we actually have added some capacity. However, we can also get more units out of each machine based on how we schedule and operate it, resulting in higher output from each plant. This trend will continue to bear fruit over the coming quarters and years.

Yeah, I would add some additional color here. Coming from a strong operations background, I'm impressed by what the team has been able to do in increasing the throughput of equipment and manufacturing processes. The other aspect we want to be careful about is that we still maintain capacity, because we are in a trough position. Our thought process is that if markets pick up in the future, we have the ability to add some shifts and maintain our ability to meet demand requirements, too. It's a good balance of efficiency improvements allowing the consolidation while still maintaining capacity for future opportunities when the peaks happen.

Thank you. That's helpful. I think doing more with less is a common theme in the military. So you're on the right track there. Last one for me, I'd like to ask about the capacity additions in Signature specifically. When do you think those additions will be fully operational? And how soon should we expect to see an associated revenue ramp as a result?

Yeah, Jacob, again, I’ll tell you what I can share knowing it’s confidential information. We announced that capacity addition in 2024. Another capacity addition will come online in 2025. The directional goal for this business upon acquisition is to double the business in terms of revenue and EBITDA over the next three to four years. I believe things are set up to do that and these two capacity additions will facilitate that. One machine has been added this year, and another will be in place for 2025.

When we acquired Signature, we said that we expected the business to grow at least 10% annually. I think we're on a good path for that. In general, much like with military operations, we like to ramp up our capacity as demand is there. There is some timing element, but we certainly have opportunities to meet the objectives that Mike outlined.

All right, thank you, gentlemen. That's been good color and thanks for taking our questions.

Thank you. Thanks, Jacob.

Thank you. We have our next question from Anna C. Jolly from Gabelli & Company.

Hi, thanks for taking my question. It’s Carolina from Gabelli. So just to start and end with the last question. Signature, can you just give an update on how you feel the integration is going to date?

Yeah, Carolina. It's going well. On the qualitative side, the cultures are meshing well. We really like the quality of the Signature team, and it's been a nice addition. The talent in the Signature team, I believe, will be beneficial to Myers as well. On the quantitative piece, the financials and delivery are coming through as anticipated. The integration itself, with the cost-out initiatives, is on track, and we still expect $8 million of synergies in 2025. Overall, Carlos, we’re pleased with the acquisition's performance, both qualitative and quantitative. Grant, have anything to add?

I think it's going really well. The team is strong, and we've been able to share knowledge and implement performance improvements at Signature, as well as learn from their centers of excellence to improve our other manufacturing processes. It's a good opportunity to drive the synergies we identified with the acquisition.

Perfect. Thanks. And then, Grant can you just help me better understand on Page 13 the difference in cash flow conversions year-over-year?

In terms of cash flow conversion, we actually see ourselves at a 60% cash flow conversion business continuing. We don't show a specific cash flow conversion chart in our earnings presentations, but it is a good cash flow conversion business. We believe that it may continue to improve as we get some of these improvements in place, but overall we see with the Signature acquisition that the percentage of working capital has gone up. That's driven by not yet having the full 12 months of sales with Signature. Additionally, Signature does require a bit more inventory than some of our other operations but their cash conversion is quite good. We think that balances out, and so we should normalize over time.

Okay. Perfect. And then last question, just specific to the Distribution segment, it seems as if some of the overall industry or market commentary have just around cadence has been positive potentially and sequentially improving in June and July. Do you have any thoughts on cadence for that segment?

And Carolina, we are seeing the sales come back. Remember we made a strategic move to reorient the sales force at the back half of last year. We took our personnel and focused them on end-market retail, separate from commercial and retread, etc. That change did not deliver the gains as fast as I would have expected and in some instances, it took a little bit backwards. Longer term, I think those are the right calls because having a focused sales organization based on end-market is important. The market was also down 8% to 10% in our space for tire valves and tire pressure sensors. As a result, we’re trying to go back and address all of that. We're regaining business, sometimes at a lower price. However, I don't see that end-market itself recovering until 2025. That's part of why we changed our guidance. But I also see that Myers Tire Supply has a great brand and a great ability to service. We are regaining share and I expect this to happen over the next year.

Okay. Yeah, thanks so much.

Thank you. Thanks, Carolina.

Thanks, Carolina.

Thank you. We have our next question from William Dezellem from Tieton Capital Management.

Thank you. Two questions. First of all, relative to the military Ammunition carrier business, do you see that ramp in going from $10 million to $25 million to $40 million tapping rather evenly over the quarters of this year and next year? Or does it end up being pretty lumpy depending on how order shipments go? Walk us through the dynamics of that revenue ramp if you would please.

Yeah, Bill, good to hear from you. On that business, what we've seen is that the contracts we get approved for come in chunks of $10 million to $15 million. What's changed since 2023 is that we now have three of those chunks. The revenue numbers of $25 million this year and directionally $40 million next year feel achievable. The lumpiness is when a contract is approved and we begin production with Aerospace or Military. These things always take longer than expected. Once that contract is in place, we run 24/7, and we see results. So initially, a little bit lumpy, but directionally, over the next three, five, seven, and ten years, the trajectory Grant outlined is correct.

That's very helpful. Thank you. You mentioned you now have three contracts. In the opening remarks, there was a reference to additional contracts you thought were possible. Could you talk about those and their significance?

Yes, the additional contracts are in a similar range of $10 million to $15 million per contract. However, I can't provide specific details due to the sensitivity around some military contracts. Rest assured, we are negotiating with some countries in Eastern and Western Europe, which are publicly discussing restocking their artillery amid concerns of instability and potential conflict. We’re well-positioned in these areas.

Great. Thank you for your insights. Shifting to Signature, are you witnessing a shift from wood mats to composites this quarter? Any tangible evidence of this transition?

Let's say 80% to 90% of the installed base is wood. In the US, 10% to 15% is composite. In Western Europe, the percentage is somewhat similar with aluminum having a slightly larger piece of the market. Over several years or even decades, plastic composite materials, particularly recyclable ones, continue to gain share from traditional substrates like cardboard and wood. We have seen growth in the past five years at Signature and forecast more growth in the next five years, crucially spurred by substantial infrastructure spending.

What proportion of that industry is cardboard? I'm trying to understand how far along the transition from cardboard to composites is.

We've consistently talked about Akro-Mils being a GDP business, and the larger driver is in Buckhorn and Signature. It’s hard to quantify how much is cardboard versus plastic, but in industrial settings and other applications, there is a significant opportunity as we manufacture more durable and high-quality products, allowing us to capture more market share. The conversion rate is expected to follow the GDP rate.

Great. Thank you for your time.

Thank you.

Thanks, Bill.

Thank you. We currently have no further questions. Thank you.

Just, while we're waiting to see if there's any other questions, I had mentioned cash conversion earlier. I was actually referring to days. We typically have about a 60-day cash conversion cycle when we look at our days sales outstanding plus days on hand less days payable outstanding. So just to clarify that.

Alright, well, thanks, Kenneth, and thank you all for joining Myers Industries' second quarter earnings call. We invite you to follow up with additional questions or meeting requests. To schedule times, please contact Meghan Beringer using the information found on Slide 26. Thank you for joining and have a great day.

Ladies and gentlemen, this concludes today’s call. Thank you for joining. You may now disconnect your lines.