Q2 2024 Silgan Holdings Inc Earnings Call

Operator: Please stand by; we're about to begin. Good day and welcome to the Silgan Holdings second quarter 2024 earnings call. Today's conference is being recorded. At this time, I'd like to turn the conference over to Mr. Alex Hutter. Please go ahead.

Please standby were about to begin.

Speaker Change: Good day and welcome to the children Holdings second quarter 2024 earnings call. Today's conference is being recorded at this time I'd like to turn the conference over to Mr. Alex Hutter. Please go ahead.

Alexander G. Hutter: Thank you and good morning. Joining me on the call today are Adam Greenlee, President and CEO; Bob Lewis, EVP, Corporate Development and Administration; and Kim Ulmer, SVP and CFO. Before we begin the call today, we would like to make it clear that certain statements made on this conference call may be forward-looking statements. Such forward-looking statements are made based upon management's expectations and beliefs concerning future events impacting the company and, therefore, involve a number of uncertainties and risks, including, but not limited to, those described in the company's annual report on Form 10-K for 2023 and other filings with the Securities and Exchange Commission.

Speaker Change: Thank you and good morning, joining me on the call today are Adam Greenlee, President and CEO, Bob Lewis EVP of corporate development and administration as Kim Ulmer SVP and CFO.

Alexander G. Hutter: Therefore, the actual results of operations or financial condition of the company could differ materially from those expressed or implied in the forward-looking statement. In addition, commentary on today's call may contain references to certain non-GAAP financial metrics, including adjusted EBIT, free cash flow, and adjusted net income per diluted share. Reconciliation of these metrics, which should not be considered substitutes for similar GAAP metrics, can be found in today's press release under non-GAAP financial information in the investor relations section of our website at sylganholdings.com. With that, I will turn it over to Adam. Thank you, Alex.

Speaker Change: Before we begin the call today, we would like to make it clear that certain statements made on this conference call maybe forward looking statements.

These forward looking statements are made based upon management's expectations and beliefs concerning future events impacting the company and therefore involve a number of uncertainties and risks, including but not limited to those described in the company's annual report on Form 10-K for 2023 and other filings with the Securities and Exchange Commission.

Speaker Change: Therefore, the actual results of operations or financial condition of the company could differ materially from those expressed or implied in the forward looking statements.

Speaker Change: In addition commentary on today's call may contain references to certain non-GAAP financial metrics, including adjusted EBIT free cash flow and adjusted net income per diluted share.

Speaker Change: Reconciliations of these metrics, which should not be considered substitutes for similar GAAP metrics can be found in today's press release under non-GAAP financial information in the Investor Relations section of our website at Silicon Holdings Dotcom.

Speaker Change: With that let me turn it over to Adam.

Adam Greenlee: Thank you, Alex and we'd like to welcome everyone to Silicon <unk> second quarter 2024 earnings call. The second quarter continued to display the strength of our portfolio with another quarter of strong financial performance in our businesses and significant progress towards our long term strategic objectives, we delivered second quarter adjusted EPS above the midpoint of our estimated.

Adam J. Greenlee: I'd like to welcome everyone to Sylgan's second quarter 2024 earnings call. The second quarter continued to display the strength of our portfolio with another quarter of strong financial performance in our businesses and significant progress towards our long-term strategic objectives. We delivered second-quarter adjusted EPS above the midpoint of our estimated range, with improving volume trends across all of our segments and strong operational and cost performance driving our results, as the Silgan team remains focused on executing our plans for 2024 and beyond.

With improving volume trends across all of our segments and strong operational and cost performance driving our results at the Silicon team remains focused on executing our plans for 2024 and beyond.

Adam J. Greenlee: After several quarters of destocking trends for our food and beverage products, we are particularly encouraged that our customers' order patterns appear to be returning to more normal levels, and as expected, have led to a positive inflection in our volume trends in the second quarter. As demand for our products continues to recouple with what had been resilient in-market demand, we expect this momentum to carry into the second half of the year. Additionally, we are pleased to have recently announced an agreement to acquire Vayner Packaging, a best-in-class differentiated dispensing business with very attractive margins and strong organic growth that has all the hallmarks of our highly successful dispensing acquisitions in the past, including Westrock's dispensing business, Albaea Dispensing, Gateway, and UNICEF.

Speaker Change: After several quarters of Destocking trends for our food and beverage products. We have we are particularly encouraged that our customers order patterns appear to be returning to more normal levels and as expected had led to the positive inflection in our volume trends in the second quarter.

Adam Greenlee: Demand for our product continues to recover with what had had been a resilient and market demand. We expect this momentum to carry into the second half of the year.

Speaker Change: Additionally, we are pleased to have recently announced an agreement to acquire vein or packaging a best in class differentiated dispensing business with very attractive margins and strong organic growth that has all the hallmarks of our highly successful dispensing acquisitions in the past, including West Rock's dispensing business Albea dispensing.

Speaker Change: <unk> gateway and UNICEF.

Speaker Change: Our capital deployment model is a key component of the silicone value creation story and we're encouraged that after several years of M&A market challenges and macro uncertainty during which time, we were able to create value with outstanding performance and by returning capital to our shareholders and now appears that value earnings and return accretive.

Speaker Change: <unk> are becoming more actionable we continue to believe that silicon is advantageously positioned to win in the M&A market backdrop and create value for our shareholders. As a result of our ability to act with speed and certainty our long track record of accrete of achieving value enhancing synergies, our access to capital and our ability to <unk>.

Adam J. Greenlee: We continue to believe that Silgan is advantageously positioned to win in this M&A market backdrop and create value for our shareholders as a result of our ability to act with speed and certainty, our long track record of achieving value and enhancing synergies, our access to capital, and our ability to rapidly de-leverage as a result of our strong free cash flow. We're excited that Vayner represents such a clear cultural fit with our company and expect the combination to help drive incremental organic growth well into the future.

Speaker Change: <unk> deleverage as a result of our strong free cash flow. We're excited that they now represent such a clear cultural fit with our company and expect the combination to help drive incremental organic growth well into the future.

Adam J. Greenlee: Turning now to the second quarter results for our segment, our dispensing and specialty closure segment delivered another quarter of strong results as demand for our global dispensing products remains at a high level, with double-digit volume growth driven by continued success in the marketplace. Our market-leading innovation, manufacturing, and service capabilities continue to drive demand for our products that outpaces market growth and, in some cases, currently exceeds their own ability to supply certain portions of the market.

Speaker Change: Turning now to the second quarter results for our segments, our dispensing, especially closure segment delivered another quarter of strong results as demand for our global dispensing products remains at a high level with double digit volume growth driven by continued success in the marketplace, our market, leading innovation manufacturing and service capabilities continue to.

Speaker Change: Demand for our products that outpaces market growth and in some cases currently exceed their own ability to supply certain portions of the market.

Adam J. Greenlee: Consumer demand for our food and beverage products improved sequentially, and year-over trends also improved from the first quarter as our customers' stocking activities appear to have come to an end, and promotional activity has been more pervasive in the market. For many of our beverage customers during the seasonal peak demand of the summer months, we are on track for stronger year-over-year trends in the food and beverage closures in the second half of the year as demand for our products more accurately In metal containers, our year-over-year volume showed growth driven by pet food and soup, and we anticipate continued growth in these and other products for the remainder of 2024.

Speaker Change: Consumer demand for our food and beverage products improved sequentially and year over trends also improved from the first quarter as our customers destocking activities appear to have come to an end and promotional activity has been more pervasive in the market for many of our beverage customers products during the seasonal peak demand of the summer months, we are.

Speaker Change: We're on track for stronger year over year trends in the food and beverage closures in the second half of the year as demand for our products more accurately resembles end market demand.

Speaker Change: In metal containers are year over year volume showed growth driven by pet food and soup and we anticipate continued growth in these and other products for the remainder of 2024, we continued to make progress on our cost reduction initiatives during the quarter, but as expected the impact of lower production and less inventory build in the second quarter.

Adam J. Greenlee: We continue to make progress on our cost reduction initiatives during the quarter, but as expected, the impact of lower production and less inventory build in the second quarter due to the previously discussed reduction in a large pack customer's plans for 2024 led to under-absorbed fixed costs in the quarter that impacted our financial results. Our custom container segment delivered strong results in the second quarter with 7% volume growth as a result of improving market demand, the successful commercialization of new business in the first quarter, and the early commercialization of the second new business award in the second quarter.

Speaker Change: Due to the previously discussed reduction in our large pack customers plans for 2024 led to under absorbed fixed cost in the quarter that impacted our financial results.

Speaker Change: Our custom container segment delivered strong results in the second quarter with 7% volume growth as a result of improving market demand.

Speaker Change: SaaS full commercialization of new business in the first quarter and the early commercialization of the second New business Award in the second quarter.

Adam J. Greenlee: Turning now to our outlook for the full year of 2024, we continue to believe the business is positioned to deliver volume and profit growth and are pleased to confirm our estimates for the year, which includes EPS growth of 7% at the midpoint of our guidance range. We continue to expect dispensing and specialty closure volumes to grow by a mid-single-digit rate, with high single-digit growth in our dispensing products and low single-digit growth in our closure products, driving better profitability for the segment through an improved mix.

Speaker Change: Turning now to our outlook for the full year of 2024, we continue to believe the business is positioned to deliver volume and profit growth and are pleased to confirm our estimates for the year, which includes EPS growth of 7% at the midpoint of our guidance range.

Speaker Change: We continue to expect to spend pain and specialty closures volumes to grow by a mid single digit rate with high single digit growth in our dispensing products and low single digit growth in our closure products driving better profitability for the segment through an improved mix.

Adam J. Greenlee: In metal containers, we continue to expect volume growth with mid-single-digit growth in pet food, which represents approximately half of our total volume, offset by lower fruit and vegetable volumes as a result of the previously discussed decision by a pack customer to reduce their volumes in 2024 to reduce their working capital. In addition to the unfavorable fixed cost absorption in our system we experienced in the second quarter, the impact of growth in pet food and lower than normal vegetable can sales will drive a less favorable mix in the third quarter. Custom container volumes are expected to grow by a low to mid-single-digit percentage as destocking trends appear to have concluded.

Speaker Change: In metal containers, we continue to expect volume growth with mid single digit growth in pet food, which represents approximately half of our total volume offset by lower fruit and vegetable volumes as a result, as a result of the previously discussed decision by a pack customer to reduce their volumes in 2024 to reduce their working capital.

Speaker Change: In addition to the unfavorable fixed cost absorption in our system, we experienced in the second quarter the impact of growth in pet food and fewer than normal vegetable can sales will drive a less favorable mix in the third quarter.

Speaker Change: Custom containers volumes are expected to grow by low to mid single digit percentage.

Speaker Change: Destocking trends appear to have concluded.

Kimberly I. Ulmer: Market demand remains solid, and new commercial awards continue to provide incremental volume and profit contribution through the year. We are encouraged that we are on track to deliver another year of strong financial results for the company, with success in our strategic growth initiatives driving tangible improvements in our results. Additionally, we're pleased that our capital deployment model continues to yield opportunities to grow our company at attractive returns and drive organic growth and margin improvement. With that, Kim will take you through the financials for the quarter and our estimates for the third quarter and full year of 2024. Thank you, Adam.

Speaker Change: Market demand remains solid and new commercial awards continue to provide incremental volume and profit contribution through the year.

Speaker Change: We are encouraged we are on track to deliver another year of strong financial results for the company with success in our strategic growth initiatives driving tangible improvements in our results. Additionally, we are pleased that our capital deployment model continues to yield opportunities to grow our company at attractive returns and drive organic growth and margin improvement.

Ken: With that Ken will take you through the financials for the quarter and our estimates for the third quarter and full year of 2024. Thank you Adam as Adam discussed we delivered strong results in the second quarter that were consistent with our expectations with adjusted EPS above the midpoint of our expected range net sales of approximately $1 4 billion declined.

Kimberly I. Ulmer: As Adam discussed, we delivered strong results in the second quarter that were consistent with our expectations, with adjusted EPS above the midpoint of our expected range. However, net sales of approximately $1.4 billion declined 3% from the prior year period, driven primarily by the pass-through of lower raw material costs, mostly in our metal containers. Total adjusted EBIT for the quarter of $165 million increased by 3% on a year-over-year basis, primarily due to higher volume in each of the segments.

Ken: 3% from the prior year period, driven primarily by the pass through of lower raw material costs, mostly in our metal containers business.

Ken: Adjusted EBIT for the quarter of $165 million increased by 3% on a year over year basis, primarily due to higher volume in each of the segments.

Kimberly I. Ulmer: Higher adjusted EBIT in dispensing and specialty closures and custom containers offset expected lower adjusted EBIT in the metal container segment. Adjusted net income for diluted shares was $0.88, a 6% increase from $0.83 in the prior year quarter, with higher adjusted EBIT and lower interest costs, partially offset by a higher tax rate.

Ken: Adjusted EBIT in dispensing and specialty closures and custom containers offset expected lower adjusted EBIT in the metal container segment.

Ken: Adjusted net income per diluted share was <unk> 88.

Ken: A 6% increase from 83 in the prior year quarter with higher adjusted EBIT and lower interest costs, partially offset by a higher tax rate.

Kimberly I. Ulmer: Turning to our segments, sales in our dispensing and specialty closure segment increased 1% versus the prior year quarter, primarily as a result of higher volume mix of 3%, which was partially offset by the pass-through of lower raw material costs and unfavorable foreign currency. The increase in volume mix is driven primarily by double-digit growth in dispensing products and favorable mix. Second quarter dispensing and specialty closures adjusted EBIT increased $16 million versus the prior year period, driven by favorable price costs, partially as a result of the prior year impact from labor challenges that limited output at a U.S. food and beverage closures facility and improved volume and mix. In our metal container segment, sales declined to 8% versus the prior year quarter, primarily due to the pass-through of lower raw material costs, which was partially offset by higher volumes of 1%.

Speaker Change: Turning to our segments sales in our dispensing, especially closure segment increased 1% versus the prior year quarter, primarily as a result of higher volume mix of 3%, which was partially offset by the pass through of lower raw material costs and unfavorable foreign currency.

Speaker Change: The increase in volume mix was driven primarily by double digit growth in dispensing products and favorable mix.

Ken: Second quarter dispensing and specialty closures adjusted EBIT increased $16 million versus the prior year period, driven by favorable price cost partially as a result of the prior year impacts from labor challenges that limited output at a U S food and beverage closures facility and improved volume and mix.

Ken: And our metal container segment sales declined 8% versus the prior year quarter, primarily due to the pass through of lower raw material costs, which was partially offset by higher volumes of 1%.

Kimberly I. Ulmer: As expected, metal containers adjusted EBIT was below the prior year quarter due to the impact of unfavorable price costs, including mix, as a result of lower fixed cost absorption from a significantly lower inventory bill for the fruit and vegetable pack due to the previously discussed reduction impact plans of a large fruit and vegetable customer to reduce its working capital. In custom containers, sales increased 6% compared to the prior year quarter driven by a 7% increase in volumes as a result of stronger market demand and the early commercialization of the second new business award during the quarter.

Ken: As expected metal containers adjusted EBIT was below the prior year quarter due to the impact of unfavorable price cost, including mix as a result of lower fixed cost absorption from a significantly lower inventory build for the fruit and vegetable pack due to the previously discussed reduction impact plans of a large fruit and vegetable customer to reduce its working capital.

Ken: And custom containers sales increased 6% compared to the prior year quarter, driven by a 7% increase in volumes as a result of stronger market demand in the early commercialization of the second New business award during the quarter.

Kimberly I. Ulmer: Custom containers' adjusted EBIT increased $4 million as compared to the second quarter of 2023 driven by higher volume. Looking ahead to 2024, we are confirming our estimate of adjusted net income per diluted share in the range of $3.55 to $3.75, a 7% increase at the midpoint of the range as compared to $3.40 in 2023. This estimate includes corporate expenses of approximately $30 million, including costs for announced acquisitions, which is above our prior estimate of $25 million due to higher legal and corporate development costs.

Ken: There are some containers adjusted EBIT increased $4 million as compared to the second quarter of 2023, driven by higher volumes.

Ken: Looking ahead to 2024, we are confirming our estimate of adjusted net income per diluted share in the range of $3 55 to $3 75.

Ken: The 7% increase at the midpoint of the range as compared to $3 40 and 2023.

Speaker Change: This estimate includes corporate expense of approximately $30 million, excluding costs for announced acquisitions, which is above our prior your prior estimate of $25 million due to higher legal and corporate development costs.

Kimberly I. Ulmer: Also included in the adjusted EPS range for 2024 are interest expense of approximately $165 million, an adjusted tax rate of 24 to 25%, and a weighted average share count of approximately 107 million shares. From a segment perspective, low single-digit percentage total adjusted EBIT growth in 2024 is expected to be driven primarily by the dispensing and specialty closures and custom container segments, with the metal container segment adjusted EBIT below the prior year record level primarily due to the previously discussed reduction of PAC plans by a large fruit and vegetable customer.

Ken: Also included in the adjusted EPS range for 2024, our interest expense of approximately $165 million and adjusted tax rate of 24% to 25% and a weighted average share count of approximately 107 million shares.

Ken: From a segment perspective mid single digit percentage total adjusted EBIT growth in 2024 is expected to be driven primarily by the dispensing, especially closures and custom container segments with the metal container segment adjusted EBIT below the prior year record level, primarily due to the previously discussed reduction of pack plans by a large fruit and vegetable customer based.

Kimberly I. Ulmer: Based on our current earnings outlook for 2024, we are confirming our estimate of free cash flow of approximately $375 million, with capex of approximately $240 million in 2024. Turning to our outlook for the third quarter of 2024, we are providing an estimate of adjusted earnings in the range of $1.20 to $1.30 per diluted share as compared to $1.16 in the prior year period. An 8% year-over-year improvement in adjusted earnings in the third quarter at the midpoint of the range is driven primarily by improving volume trends, cost reductions, and strong operating performance in each of the segments, partly offset by a less favorable mix in our metal container segment.

Ken: Our current earnings outlook for 2024, we are confirming our estimate of free cash flow of approximately $375 million with capex of approximately $240 million in 2024.

Ken: Turning to our outlook for the third quarter of 2024, we are providing an estimate of adjusted earnings in the range of $1 20 to $1 30 per diluted share as compared to $1 16 in the prior year period.

Ken: The 8% year over year improvement in adjusted earnings in the third quarter at the midpoint of the range is driven primarily by improving volume trends cost reductions and strong operating performance in each of the segments, partly offset by a less favorable mix in our metal container segment.

Kimberly I. Ulmer: Third quarter adjusted EBIT is expected to be above prior year levels in dispensing and specialty closures with improved volume mix and price costs. Third quarter metal container volumes are expected to be above the prior year level, while adjusted EBIT is expected to be below third quarter 2023. The year-over-year decline in metal containers adjusted EBIT is driven by a less favorable mix predominantly due to lower than normal vegetable can sales, with the previously discussed reduction in volume plans for a large pack customer and higher pet food sales in the quarter.

Ken: Third quarter adjusted EBIT is expected to be above prior year levels in dispensing and specialty closures with improved volume mix and price cost.

Ken: Third quarter metal container volumes are expected to be above the prior year level, while adjusted EBIT is expected to be below third quarter 2023.

Ken: The year over year decline in metal containers, adjusted EBIT is driven by a less favorable mix predominantly due to lower than normal vegetable can sales with the previously discussed reduction in volume plans for a large that customer and higher pet food sales in the quarter.

Operator: Third quarter adjusted EBIT in the custom container segment is expected to be above prior year levels as a result of low to mid single-digit volume growth. That concludes our prepared comments, and we'll open the call for questions. Jennifer, would you kindly provide the directions to the question and answer session?

Ken: Third quarter adjusted EBIT in the custom container segment is expected to be above prior year levels. As a result of low to mid single digit volume growth.

Ken: That concludes our prepared comments and we'll open the call for questions. Jennifer would you kindly provide the directions for the question and answer session.

Operator: Thank you. If you'd like to ask a question, please signal by pressing star 1 on your telephone keypad. If you are using a speakerphone, please make sure your mute function is turned off to allow your signal to reach our equipment.

Jennifer: Thank you if you'd like to ask a question. Please make note by pressing star one on your telephone keypad. If you are using a speaker phone. Please make sure. Your mute function is turned off to Avaya signatory chocolate, Matt again press Star one to ask a question, we'll pause for just a moment to allow everyone an opportunity to signal for questions.

Operator: Again, press star 1 to ask a question. We'll pause for just a moment to allow everyone an opportunity to signal for questions. We'll go first to Ganshum Punjabi with Baird.

Ken: Okay.

Ken: We'll go first to Ghansham Panjabi with Baird.

Ghansham Panjabi: Hey guys, good morning. I guess on dispensing and specialty closures, I know you sell into a bunch of different end markets and so on, but a lot of the companies that have reported on the consumer discretionary side, health and beauty and fragrance, et cetera, are pointing towards some level of a slowdown just given tougher comparisons and obviously mixed consumer spending. And I know you're lapping the de-stocking comps, and so the optics are favorable, et cetera, but can you give us a better sense as to what's going on in the market from your vantage point at this point? Sure.

Ghansham Panjabi: Yeah, Hey, guys. Good morning, I guess on dispensing and specialty closures I know you sell into a bunch.

Ghansham Panjabi: A bunch of different end markets and so on but a lot of the companies that have reported on the consumer discretionary side, you know health and beauty and fragrance et cetera.

Speaker Change: They're they're pointing towards some level of slowdown just given tougher comparisons and obviously mixed consumer spending and I know you're lapping the destocking comps and so the optics that favorable et cetera, but can you give us a better sense as to what's going on in the market from your vantage point at this point.

Adam J. Greenlee: And, you know, I think we see a lot of the same reports and trends out in the marketplace. I think you really have to focus on where we choose to compete and win in the markets that we're serving. So, you know, I think fragrance and beauty is a great place to start.

Speaker Change: Sure and I think we see a lot of the same reports and trends you know out in the marketplace. I think you really have to focus on where we choose to compete and win in the markets that we're serving so you know I think fragrance and beauty as a great place to start and we we really don't participate in the mass market fragrance and beauty.

Adam J. Greenlee: And, you know, we really don't participate in the mass market fragrance and beauty. I know we've talked about that over time, but, you know, where we are very successful and where we continue to win new business in the fragrance and beauty side is at the very high end of that market. And that market continues to perform and do well, and there are new product launches. And I do think, Gantem, we're winning probably a disproportionate amount of the new product launches just given our performance over the last, call it four or five years. So, you know, we feel really good about that.

Speaker Change: I know, we've talked about that over time, but.

Ghansham Panjabi: We are very successful and we're we continue to win new business in the fragrance and beauty sided at the very high end of that market and that market continues to perform and do well have new product launches and I do think ghansham, we're winning probably a disproportionate amount of the new product launches just given our performance over the last.

Ghansham Panjabi: Call it four or five years, so yes, we feel really good about that and I.

Adam J. Greenlee: And, you know, I think we talk about the power of our portfolio, that, you know, it is a broad, I mean, you said it yourself, it's a broad base of markets and products that we take to the market, and we serve the markets with. So, you know, I think over time, if you go back over, call it the last five years, you've seen continued strength from Silgin, but maybe strength in different markets as we have worked through the last five years.

Brian: I think we talked about the power of our portfolio that you know it is a Brian I mean, you said it yourself, it's a broad base of markets and products that we we take the market and we serve the markets with so you know I think over time, if you'd go back over call. It. The last five years, you've seen continued strength from silicon, but may be strengths in different markets.

Speaker Change: As we have worked through the last five years, So lawn and garden is really good right now we've got aerosol business that has I would say more than fully recovered from what we were dealing with and Destocking days, our trigger sprayers are doing exceptionally well right now and are fully recovered. So just maybe to try to give you a couple of example.

Adam J. Greenlee: So Lawn and Garden's really good right now. You know, we've got an aerosol business that has, I'd say, more than fully recovered from what we were dealing with in the stocking days. Our trigger sprayers are doing exceptionally well right now and have fully recovered.

Adam J. Greenlee: So, you know, I just wanted to give you a couple of examples there, and, in all fairness, you know, that's more than offsetting, I think, the continued challenge market that we're seeing in our food and beverage products. Again, they're recovering, but they have not recovered to the same level as some of the other markets that I just described.

Ghansham Panjabi: Is there and in all fairness, that's more than offsetting sort of the continued I think challenged market that we're seeing in our food and beverage products.

Ghansham Panjabi: Again, they are recovering, but they have not recovered to the same level of some of the other markets that I just described.

Adam J. Greenlee: And then in terms of consumer promotional activity, I mean, obviously, there's been many levels of theorization, and it's We're seeing some initial signs just based on some of the other reports, but as you think about your end markets between North America and Europe, are you seeing a sustainable trend there or is it still just a minor relative to last year? Well, I think it's a positive relative to last year. I'll give you a couple of examples. I think the targeted promotional activity in our food business has been very successful, but it's on a targeted basis, so it hasn't lifted the entire category. I'll give you another example.

Speaker Change: Got it and then in terms of consumer promotional activity I mean, obviously, there's been many levels at the organization and it's we're seeing some initial signs just based on some of the other reports, but as you think about your end markets between North America and Europe are you seeing a sustainable trend there or is it still just a.

Speaker Change: Minor relative to last year.

Speaker Change: Well I think it's a positive to last year. There I'll give you a couple of examples I think that targeted promotional activity in our food business has been very successful, but it's on a targeted basis. So it hasn't lifted the entire category I'll give you. Another example.

Adam J. Greenlee: You know, in our aerosol business for dispensing and specialty closures, there was a lot of activity on the promotional side for aerosols, and this is for kind of air care and home care products, etc., and we saw it drive growth, and I think the market saw growth in that category as well. So I think we're still optimistic.

Speaker Change: And our aerosol business on dispensing of specialty closures. Yeah. There was a lot of activity on the promotional side for aerosol and this is for kind of air care and home care products et cetera, and we saw a drive growth and I think the market saw solid growth in that category as well so.

Ghansham Panjabi: I think we're still optimistic.

Adam J. Greenlee: You know, as we think about the remainder of this year, I think promotional activity is going to be important. I think the success of that promotional activity will be important as well, but for us and our business, I think we're seeing more of it, and we're seeing it be very effective when it's targeted. I'd also finish, Gansham, with the fact that, you know, we're in the middle of the summer months, and our beverage business typically does well when there's warm weather, and we need to see that promotional activity driving growth through the summer months as well. Okay, fantastic. Thank you, Adam.

Ghansham Panjabi: As we think about the remainder of this year you know I think promotional activity is going to be important I think the success of that promotional activity will be important as well, but for us in our business I think we're seeing more of it and we're seeing it be very effective when it's targeted I'd also finished ghansham with the fact that you know we're in the middle.

Ghansham Panjabi: The summer months and our our beverage business typically does well when there's a warm weather and we need to see that promotional activity driving growth through the summer months as well.

Fantastic: Okay Fantastic. Thank you Adam.

Speaker Change: Thank you.

George Leon Staphos: Thank you. We'll go next to George Stavos with the Bank of America. Hi, everyone. Good morning.

Speaker Change: We'll go next to George Staphos with Bank of America.

George Leon Staphos: Thanks for the details and for taking the question. I guess my first question is, maybe I'll switch gears and we'll talk about metal for a bit. And you know, the commentary that you had in the first quarter was matched with performance in 2Q. But in terms of what your EBIT expectations were and volume expectations, did the quarter go pretty much as planned in metal as you'd expected? Was it better? Was it worse?

George Staphos: Hi, everyone.

George Staphos: Good morning, Thanks for the details and for taking the question I guess first question, maybe I'll switch gears, and we'll talk about metal a bit and you know the commentary that you had in the first quarter was was match with performance in to queue.

Speaker Change: But in terms of what your expectations were and volume expectation did did the quarter go pretty much as planned and metal that you'd expected was it better was it worse and if you could fill in some of the gaps where that'd be great secondly in.

Adam J. Greenlee: And if you could fill in some of the gaps here, that would be great. Secondly, and you've touched on this in the past, to the extent that the metal container business in North America continues to evolve and PET keeps getting bigger, broadly, can sizes keep getting smaller as a result. We've seen the fruit market, um, shrink significantly.

Speaker Change: You've touched on this in the past to the extent that the metal container business in North America continues to evolve and pet keeps getting bigger.

Speaker Change: Broadly can sizes.

Speaker Change: Keep getting smaller as a result, we.

Speaker Change: You've seen the fruit market.

Speaker Change:

Adam J. Greenlee: You know, what's next in terms of how you optimize that business? Relative to the way it's going to evolve in the next two to four years, whatever you can share there would be great. Well, thanks, George.

Speaker Change: Shrink significantly.

Speaker Change: What's next in terms of how you optimize that business.

Speaker Change: Relative to the way, it's going to evolve in the next.

Speaker Change: Two to four years, whatever you can share there would be great.

Speaker Change: Okay.

Adam J. Greenlee: You know, the second quarter, maybe slightly below our expectations, just in the metal container segment. And really, the impact on our network of the volume decline due to the one pack customer that's reduced their volumes for 2024 was significant. It basically accounts for most of the entirety of the year over year change in the business.

George Staphos: Well thanks George.

Speaker Change: The quarter in the second quarter, just maybe slightly below our expectations.

Speaker Change: Just in the metal container segment, and really you know the impact on our network of of the volume decline due to the one pack customer that has reduced their volumes for 2024.

Speaker Change: <unk> was significant it it basically accounts for most of the entirety of the year over year change in the business. So think.

Adam J. Greenlee: So, you know, think about our business, and we, You know, we. Sorry, George, are fully utilized between Q2 and Q3, and where our additional capacity exists is really in Q1 and Q4. So the utilization rates are always very, very high in Q2 and Q3. And that's where we took the volume out as, you know, again, you think about the pack volume. Basically, those cans need to be ready at the end of Q2 to sell in Q3 when our customers need them, so it had an outsized impact.

Speaker Change: Think about our business and we.

Speaker Change: We are.

George Staphos: Alright, George we.

George Staphos: Our fully utilized between Q2, and Q3 and where our additional capacity exist is is really in Q1 and Q4. So the utilization rates are always very very high in Q2, and Q3, and that's where we took the the volume out as you know again, you think about the pack volume basically those cans.

George Staphos: To be ready at the end of Q2 to sell in Q3, when our customers need them. So it wasn't outsized impact and in fairness, we probably underestimated what that impact was just by a few million dollars as we came into the quarter. So then I think about when you when you move forward and kind of what's next.

Adam J. Greenlee: And in fairness, we probably underestimated what that impact was by just a few million dollars as we came into the quarter. So then I think about when you move forward and kind of what's next. You mentioned fruit as a product that moved away from the can into an alternative package, and what we've consistently said, George, is that the products that are, essentially, processed in the can are really what's left in the can these days. So we think there are, you know, dry products have moved because it didn't require a can for processing fruit was a very similar example.

George Leon Staphos: You know you mentioned fruit as a product that moved away from the can into an alternative package and what we've consistently said George is that.

George Staphos: The products that are.

Speaker Change: Essentially processed in the can are really whats left and they can these days. So we think there's dry products have moved because it didn't require a can for processing fruit was a very similar example, but what's left in our food can and particularly wet pet food, which as you mentioned.

Adam J. Greenlee: But what's left in a food can, and particularly wet pet food, which, as you mentioned, is over half of our volume, is growing. You know, I look back over the last five years as an example, and our pet food volumes are up about 20%. So call it right in that mid single-digit kind of range.

Speaker Change: Over half of our volume is growing.

Speaker Change: Look back over the last five years as an example.

George Staphos: Pet food pet food volumes are up about 20% so call it right in that mid single digit kind of range.

Speaker Change: Yeah, that's how I would talk about metal containers.

Adam J. Greenlee: And, you know, that's how I would talk about metal containers. Right? So, with that, does that, you know, maybe not tomorrow, but over the next..., you know, a few years mean that you'll look to adjust the network. And I'm not necessarily saying plan closures, but just, you know, what do you need to do from a converting standpoint and network as that market evolves? And just quickly in the third quarter, and I'll turn it over.

Speaker Change: Yeah.

Speaker Change: Right. So with that does that you know maybe not tomorrow, but over the next.

Speaker Change: You know a few years mean that you'll look to adjust the network again, I'm not necessarily saying plant closures, but just you know what do you need to do from a converting standpoint and network as that market evolves and just quickly on third quarter and I'll turn it over yes, it'll be lower I think you said.

Adam J. Greenlee: Yes, it'll be lower, I think you said, but we're still, you know, we're still talking about triple digits in terms of dollars for EBIT, right? Compared to a few years ago when we had some weaker quarters there. Thanks and good luck in 3Q.

Speaker Change: But we're still you know we're still talking about triple digits in terms of dollars for EBIT right, we're not going back to some of the.

Speaker Change:

Speaker Change: Now a few years ago, where we had some some some weaker quarters there thanks and good luck in <unk>.

Adam J. Greenlee: Thanks, George. And yes, you're right about Q3. I think, as you think about, you know, what our next steps are in metal containers, I mean, look, we've got half of the business that's growing, half of the business that we are investing in to support our customers' growth in pet food. So, you know, we've got a very optimized platform, and I think a very low-cost platform, certainly on that side of the business.

Speaker Change: Thanks, George and yes, you're right on in Q3, I think as you think about you know what our next steps are in metal containers. I mean look we've got half of the business. That's growing half of the business that we are investing to support our customers growth in pet food. So yeah. We've got a very optimized platform and I think are very low.

Speaker Change: Cost platform certainly on that side of the business and I think when you think about the balance of the business. The other call it less than 50%. We do have the announced cost reduction initiatives. That's not just about closing plants. That's also about just driving cost out of the business and I think one thing I will absolutely say, particularly about.

Adam J. Greenlee: And I think when you think about the balance of the business, the other, call it less than 50 percent, you know, we do have the announced cost reduction initiative. That's not just about closing plants. That's also about just driving cost out of the business. And I think one thing I will absolutely say, particularly about our metal containers business, is they've been terrific at driving cost out of their business. And that's absolutely what we're going to continue to do in that part of the business that's not pet food. Okay, thanks. I'll turn it over to you.

Speaker Change: The metal containers business as they've been terrific and driving cost out of their business and that's absolutely what we're going to continue to do on that part of the business that's not pet food.

Speaker Change: Okay. Thanks, I'll turn it over.

Speaker Change: Okay.

Anthony Pettinari: Bye. We'll go next to Anthony Pettinari with Citi. Morning, this is actually Brian Bergmayer on for Anthony.

Speaker Change: We'll go next to Anthony Pettinari with Citi.

Speaker Change: Good morning, This is actually Brian Bird Myron for Anthony Thanks for taking the question Adam.

Bryan Nicholas Burgmeier: Thanks for taking the question. You know, Adam, in your prepared remarks, you sounded maybe quite a bit more optimistic about M&A opportunities than you had previously. I guess, you know, can you remind us where your pro forma leverage is going to be by the end of this year? And, you know, is it accurate to say that heading into 2025, Silgan could have a pretty full pipeline of creative deals? Yeah, this is Bob.

Speaker Change: Adam in the prepared remarks, you sounded maybe a quite a bit more optimistic on M&A opportunities than you had previously I guess can you remind us where your pro forma leverage is going to be by the end of this year and is it accurate to say that heading into 2025.

Speaker Change: If you are still getting could have a pretty full pipeline of accretive deals.

Robert B. Lewis: I'll jump in on that one. I think you read it pretty well. Our balance sheet right now, as we come through the pack season and into the end of the year, should be just below the high end of our range. And I'll remind you that that range is 2.5 to 3.5 times on a net-debt basis, so comfortably within what our normal operating range is.

Speaker Change: Yeah. This is Bob I'll jump in on that one I think you read it pretty well.

Bob Lewis: Our balance sheet right now is as we come through the pack season and into the end of the year, we should be just below the high end of our range.

Speaker Change: I'll remind you that that range is two and a half to three five times on a net debt basis. So comfortably within you know what our normal operating range is.

Robert B. Lewis: Right now, we're focused on completing the acquisition of Vayner and then the integration. But that does not at all mean that we're slowing down in terms of paying attention to and looking at investment opportunities, particularly in the dispensing space. So I think you got it right that the balance sheet allows us the opportunity to look. I think we think the market is to our benefit right now, given our access to capital and our ability to move swiftly and with certainty. So I think all those things, coupled with a market backdrop that may not be so favorable for some of the other institutions that we might be competing with for potential targets.

Speaker Change: Right now we're focused on on completing the acquisition of vein or and then the integration, but that does not at all mean that were slowing down in terms of you know.

Speaker Change: Paying attention and looking at investment opportunities.

Speaker Change: Particularly in the dispensing space. So I think he got it right that the balance sheet allows us the opportunity to look I think we think the market is to our benefit right now given given our access to capital given our ability to move swiftly.

Speaker Change: And with certainty. So I think all of those things coupled with a with a market backdrop that may not be so favorable for some of the other.

Speaker Change: Tuitions that we might be competing with for potential targets. So I do think that now as you know we're in a pretty good period from a from a structural perspective as well as the backdrop of the market and again, our focus will be largely around continuing to build out the tip of the spear around the dispensing and specialty closer.

Robert B. Lewis: So I do think that now we're in a pretty good period from a structural perspective, as well as from a backdrop of the market. And again, our focus will be largely around continuing to build out the tip of the spear around the dispensing and specialty closure side of the business. Eva Dahl with Vayner, you know, we're talking about over a billion dollars.

Speaker Change: Side of the business I think the only thing I would add to that is that the pro forma.

Speaker Change: EBITDA with vein are you know, we're talking about over $1 billion. There's the capacity to do more is greater today, its still again than it was call it five or 10 years ago.

Robert B. Lewis: Just the capacity to do more is greater today at Silgan than it was, call it, five or ten years ago. Got it, got it. Thanks for that detail. And maybe I will just kind of switch to custom containers. Are we looking for more quarter over quarter EBIT growth in 3Q and into 4Q? I guess, could you remind us how the business wins are going to be kind of layering on in the second half of the year and maybe any change assumptions for price cost? Thanks. I'll turn it over to him.

Speaker Change: Yeah.

Speaker Change: Got it got it thanks for that detail.

Speaker Change: And maybe just kind of switching to custom containers R.

Oliver: Are we looking for more a quarter over quarter EBIT growth in <unk> and into <unk>. I guess can you remind us how does the business wins are going to be kind of layering on in the second half of the year and maybe any change in assumptions for price cost. Thanks, Oliver I'll turn it over.

Adam J. Greenlee: Sure. You know, look, the business has done a nice job. We've continued to win new awards. The story for this year in custom containers was really about two large awards.

Speaker Change: Sure.

Speaker Change: The business has done a nice job we've continued to win New awards. The story for this year and custom containers was really about the two large awards. The first one was commercialized in the first quarter and we had identified the second wanted to be commercialized call. It mid year. So we had it in our business call. It Q3.

Adam J. Greenlee: The first one was commercialized in the first quarter, and we had identified the second one to be commercialized, call it mid-year, so we had it in our business, call it Q3. The team did a great job, worked with the customer, and they were able to commercialize that early, and we saw the benefits of that in Q2. So being disciplined and thoughtful about how many big pieces of businesses that we take on were the two big items this year. We're continuing to win other new business awards all the time.

Speaker Change: The team did a great job working with the customer we're able to commercialize that early and we saw the benefits of that in Q2. So.

Speaker Change: Being disciplined and.

Speaker Change: Thoughtful about how many big pieces of businesses that we take on yeah. Those were the two big items. This year, we're continuing to win other new business Awards all the time.

Adam J. Greenlee: I think as you look at the sequential quarters, so going from Q2 to Q3, it's actually more important to look at the prior year. So, you know, I think we'll see nice growth versus the prior year, both from a volume perspective and from a profit perspective, but I think that the seasonality of our custom container business is definitely more weighted to the first half, and you'll see that again in 2024. We'll go next to Gabe Habe with Wells Fargo. Adam, Bob, and Kim, good morning.

Speaker Change: Is as you look at the sequential quarters, so going from Q2 to Q3, I think it's actually more important to look at the prior year. So you know I think we will see nice nice growth versus the prior year, both from a volume perspective and from a profit perspective, but I think that the seasonality of our custom container business.

Speaker Change: This is definitely more weighted to the first half and you'll see that again in 2024.

Speaker Change: We'll go next to Gabe Haiti with Wells Fargo.

Speaker Change: Adam Bob Kim Good morning.

Gabrial Shane Hajde: Adam, I think in your prepared remarks you talked about bumping up against maybe some capacity constraints and DSC. I know some of it might require some new molds, maybe pieces of equipment, and then you know maybe some assembly lines if it's for more of the true dispensing components. I'm just curious, is that true?

Speaker Change: Okay.

Adam J. Greenlee: Adam I think in your prepared remarks, you talked about bumping up against them.

Speaker Change: Maybe some capacity constraints and D C.

Speaker Change: I know some of it might require some new molds maybe.

Speaker Change: Maybe pieces of equipment and then you know maybe some assembly lines, if if it's for Todd.

Speaker Change: More of the true dispensing components I'm. Just curious is that is that true and then would you have to expand brick and mortar or is it within the wallet of of call it $250 million of base Capex for legacy Silicon.

Gabrial Shane Hajde: And then, you know, would you have to expand brick and mortar? Or is it within the wallet of call it 250 million in base CapEx for legacy Silgan? Sure, Gabe.

Adam J. Greenlee: I would say that the last part of that is the easy part, so that's absolutely considered in our total CapEx. We're not talking about new facilities or anything at this point. This really is more, to your first point, this is, it's more about the molding side. So assembly and other parts were just fine.

Speaker Change: Sure Gabe I would say the last part of that is the easy part so that's absolutely considered it or our total capex.

Speaker Change: We're not talking about new facilities or anything at this point, that's really has more to your first point. This is it's more about the molding side, So assembly and <unk>.

Adam J. Greenlee: In other parts, where we're just fine this is about getting the right molds into the right machines that we already have in place and frankly. It is just the output of customers being surprised I think get at the demand levels that theyre seeing for some of their products and that's what we're reacting too so I think unfortunate.

Adam J. Greenlee: This is about getting the right mold into the right machines that we already have in place, and frankly, it's just the output of customers being surprised. I think at the demand levels that they're seeing for some of their products and that's what we're reacting to. So I think, unfortunately, some orders came in late as there was a surprise element for our customers, and we're doing all we can to support, you know, their growth and get those additional products into the market. So much more about the molding side and really specific to the kind of tooling at this. Okay, that's it for me. Thank you. We'll go next to Matt Roberts with Raymond James. Hey, good morning, everybody.

Speaker Change: <unk> some orders came in late as there was a surprise element for our customers and we're doing all we can to support their growth and get those additional products into the market. So much more about the molding side and really specific to kind of tooling at this point.

Speaker Change: Okay. That's it for me thank you.

Speaker Change: Yeah.

Speaker Change: We'll go next to Matt Roberts with Raymond James.

Matt Roberts: Thank you for your time. On the DSC segment, the margin came in strong in the quarter with de-stocking ending. I think that the mixed shift will have to move a little bit towards lower margin items later in the year. So could you discuss how you expect volume and mixed shift in the category to evolve between 3Q and 4Q? Double-digit growth in dispensing is impressive, but I imagine, as a function of math, that just has to taper at some point. So I'm trying to see how you're playing for 3Q and 4Q there. Yeah, it's a really good question, Matt.

Matt Roberts: Hey, good morning, everybody. Thank you for the time.

Speaker Change: On the DSV segment. So the margin came in strong in the quarter with Destocking ending I think that the mix shift we would have to move a little bit towards towards lower margin items later in the year.

Speaker Change: So could you discuss how you expect volume and mix shift in the category to revolve between three and four Q.

Speaker Change: Double digit growth in dispensing is impressive but I imagine it is a function of math that just has to taper at some point.

Speaker Change: So we're trying to track to see how you're planning for <unk> and <unk> you there.

Adam J. Greenlee: Look, you're right, we've got double-digit growth in dispensing products. So that obviously is going to drive the margin for the segment. But when you think about kind of the food and beverage side of the business, number one, we've got cost outs. So that's an important element.

Speaker Change: Yeah, It's a really good question, Matt and look I, you're right. We've got the double digit growth in dispensing products. So that that obviously is going to drive the margin for this segment, but when you think about kind of the food and beverage side of the business number one we've got the cost outs. So that's an important element number two you've got kind of a year over.

Adam J. Greenlee: Number two, you've got kind of a year over year comp versus last year as well, when we had a challenge in the Q2 through Q4 period for one of our food and beverage facilities in the U.S. market. So we solved that one before the end of last year. You've got the cost outs on the food and beverage side. So I think margins actually should continue to move up as we kind of work our way through the second half of the year in the DFC segment. Okay, that's helpful. Thank you.

Speaker Change: Year comp versus last year as well when we had a challenge in kind of the Q2 through Q4 period for one of our food and beverage facilities in the U S market. So we solve that one before the end of last year, you've got the cost outs on the food and beverage side. So I think margins actually should continue to move up as we can.

Adam J. Greenlee: And then work our way through the second half of the year in the DSA segment.

Speaker Change: Okay. That's helpful. Thank you and then maybe.

Adam J. Greenlee: Along the same lines, but looking a little farther out, so given the growth in that business, plus the incremental margins you have coming from Vayner next year, is there an appropriate margin target to shoot for longer term within that segment, or any brackets that you kind of internally think about? Thanks again for taking the question. Sure.

Speaker Change: Along the same lines, but looking a little farther out so given the growth in that business plus the incremental margins you have coming from vein or next year is there an appropriate margin target to shoot for longer term within that segment or any brackets that you've kind of internally think about.

Speaker Change: Thanks again for taking the questions.

Adam J. Greenlee: Yes, we talked about when we announced the Vayner acquisition that we thought Vayner came through and added roughly 100 basis points of margin expansion to the segment. So I think as we think about continuing growth in the dispenser side of the business, that's more like a 25% EBITDA margin rate. So as we continue to grow out our dispensers, it will impact the. Thanks again, Adam. We'll go next to Mike Roxland with Truist Security.

Speaker Change: Sure.

Speaker Change: Yeah. So you know we talked about on the the at when we announced the banner acquisition that we thought they enter came through and added roughly 100 basis points of margin expansion to the segment. So.

Speaker Change: As we think about continuing growth in the dispenser side of the business.

Speaker Change: That's more like a 25% EBITDA margin rate so as we continue to grow out dispensers it.

Adam J. Greenlee: Will impact the overall margin for this segment.

Speaker Change: Thanks again.

Speaker Change: Thank you.

Speaker Change: We'll go next to Mike Rock slammed with Truest Securities.

Michael Andrew Roxland: Yeah, thanks Adam, Kim, Bob, and Alex for taking my questions and congrats on the record. I just want to follow up on the food and beverage volumes. How do your comments on food and beverage relate to the middle European closures and how that's varying? That was a headwind for you last year. Has demand improved there as well, as European inflation has moderated, and are you seeing some more growth from some of the Bebcan guys in Europe as consumers have come back? Yeah, actually, it has, Mike.

Michael Andrew Roxland: Yeah, Thanks, Adam Kim Baber, Alex for taking my questions and congrats on the.

Michael Andrew Roxland: Corner.

Michael Andrew Roxland: Right.

Speaker Change: Just wanted to follow up on the on the food and beverage volumes improving.

Speaker Change: How does your comments.

Speaker Change: Lead to the metal European closures and how is that true that would be I would view last year.

Speaker Change: As demand improved.

Speaker Change: There as well.

Speaker Change: European inflation has moderated you're seeing some more growth.

Speaker Change: And some of the some of the bad guys in Europe that consumers will come back. So I'm wondering if that's purely to also into into who can get into those metal printers.

Adam J. Greenlee: So we've seen more stability in our food and beverage business and the European market. And just to be very candid, you know, that it was a very difficult year last year for the business. So we've seen improvement off of an easy comp, if you will, but we've also seen stability. So I think that's the important part. And, you know, we're seeing some nice volume growth year over year just because we're getting back to a more stable environment in the European market.

Speaker Change: Yeah. Its actually it has Mike so we've seen stability really more from our food and beverage business in the European market and just to be very candid.

Speaker Change: That it was a very difficult year last year for the business. So we've seen improvement off of.

Speaker Change: An easy comp if you will but we've also seen stability. So I think that's the important part and you know we're seeing.

Speaker Change: Some nice volume growth year over year, just because we're getting back to a more stable environment in the European market.

Michael Andrew Roxland: And then, just in terms of metal containers, EBIT for 2025. I know you haven't given any guidance yet, but I believe the same customer you keep referencing expects to continue bringing down their working capital next year to drive leverage lower. So how should we think about EBIT, metal containers EBIT, next year as well? Well, I think just on a larger scale. I mean, nothing's changed about our long-term thesis as it relates to metal containers. So, as you try to get a little more detail about 2025, we're not even close to a budget cycle yet. So, you know, I wouldn't really want to offer anything from that perspective.

Speaker Change: Got it and then just in terms of metal containers.

Speaker Change: EBIT for 2025, I know you haven't provided guidance, yet, but I believe the same customer you keep referencing expects to continue bringing down their working capital next year to drive leverage lower so how should we think about EBIT meld the theaters EBIT next year as well.

Speaker Change: Well I think it just on a.

Speaker Change: Larger scale I mean, nothing has changed about our long term thesis as it relates to metal containers, So and you try to get a little more detail about 2025, we're not even close to our budget cycle yet so.

Adam J. Greenlee: We're working very closely with that customer to help them achieve their working capital goals this year. And, you know, our understanding is that it was going to be a one-year program and discreet, but, you know. Props are in the ground right now.

Speaker Change: I wouldn't really want to offer anything from that perspective.

Adam J. Greenlee: We're working very closely with that customer to help them achieve their working capital goals. This year and our understanding is that it was going to be a one year program is discrete but.

Speaker Change: Crops are in the ground right now we don't have a pack plan yet for next year. So we will be happy to talk about that as we get closer to the end of the year.

Adam J. Greenlee: We don't have a PAC plan yet for next year. So, you know, we'll be happy to talk about that as we get closer to the end of the year. Thanks very much, and good luck in the second half.

Speaker Change: Got it thanks, very much and good luck in the second half.

Adam J. Greenlee: Thank you.

Daniel Rizzo: We'll go next to Daniel Rizzo with Jeffreys. Hi, hi guys. Thanks for taking my questions. Just, but just to follow up on that last point, that that customer is going to be destocking or reducing their working capital going into 2025. That is the plan that they were the idea they related to you guys. Well, I think it's their fiscal 25, just for clarification. So we're already in fiscal 25 for them right now.

Adam J. Greenlee: We'll go next to Daniel Rizzo with Jefferies.

Daniel Rizzo: Hi, guys. Thanks for taking my questions, just but just just a follow up on that last point.

Daniel Rizzo: Customer is going to be destocking or reducing the working capital going into 2025 that is the plan that the idea. They they relate to you guys.

Speaker Change: Well I think it's their fiscal 'twenty five just.

Daniel Rizzo: Just for clarity so we're already in fiscal 'twenty five for them right now.

Daniel Rizzo: So, you know, we're talking about a calendar year 24 for silver. Okay, that's helpful. And then have you ever wondered whether there is a large margin difference between soup and pet food versus food and beverage in metal containers?

Speaker Change: So I you know, we're talking about a calendar year 'twenty four for silicon.

Speaker Change: Okay.

Speaker Change: That's helpful and then I've never I mean is there a large.

Speaker Change: The large margin difference between soup, and pet food versus food and beverage and metal containers.

Speaker Change: I think in terms of product mix.

Daniel Rizzo: Like in terms of product mix? No, not really. I think it's pretty consistent across the board. From a margin rate perspective, we talked a lot about mix now as pet food continues to grow. And, you know, you think about the smaller can size supporting the pet food market versus kind of our standard vegetable and maybe even institutional vegetable can sizes.

Speaker Change: No not really I think it's pretty consistent across the board from a margin rate perspective, I mean, we talked a lot about mix now is that there continues to grow and you think about the smaller can sizes supporting that.

Daniel Rizzo: The pet food market versus kind of our standard vegetable and maybe even institutional vegetable can sizes. There you know as to the margin dollars that are delivered to silicon or less just but the margin rate is very consistent across the business.

Adam J. Greenlee: There, you know, it's the margin dollars that are delivered to Silgan are less fair, but the margin rate is very consistent across the board. Okay, and then final question. You mentioned something in the prepared remarks about the strength of sales and dispensing products. I mean, you talked a lot about that, but dispensing products around the world. I was wondering if you run into a situation where you're kind of sold out of certain products, you may need more capacity. Is that the case anywhere?

Adam J. Greenlee: Okay and then final question you mentioned something in the prepared remarks about about the strength of sales in dispensing products. I mean, you talked a lot about that but dispensing products around the world I was wondering if you run into a situation where youre kind of sold out of certain products. You may need more capacity is is that the case anywhere.

Daniel Rizzo: Yes, it's, I'm going to start with the end of your comment. So yeah, we are adding capacity in our dispensing business and have been for several years to support the growth in that business. And I'll, I'll go all the way back to when we acquired the rest of Westrock's dispensing business. We've been allocating quite a bit of capital to that business to support their growth, and I think you can see that not only in their volume numbers but in the bottom line of the segment as well.

Kimberly I. Ulmer: Yes, it's oh.

Speaker Change: Start with the end of your comments. So yeah, we are adding capacity in our dispensing business and have been for several years to support the growth in that business and I'll I'll go all the way back to when we acquired the rest west rock dispensing business, we've been allocating quite a bit of capital to that business to support their growth and I think you can see that not only in.

Daniel Rizzo: Their volume numbers, but in the bottom line of this segment as well so yes backing up into your question.

Daniel Rizzo: So yes, backing up into your question, there are certain categories where we are very tight on capacity in some cases, as we mentioned, we've got orders exceeding capacity for certain products, and we are working hard to address that. This is a global business for us. So, you know, the first thing we do is look at our own network for potential solutions from other geographies. And in some cases, we've executed on that.

Daniel Rizzo: There are certain categories, where we are very tight on capacity in some cases as we mentioned you know we've got orders exceeding capacity for certain products and we are working hard to address that this.

Daniel Rizzo: This is a global business for us. So you know the first thing. We do is we look at our own network for potential solutions from other geographies and in some cases, we've executed upon that we've also just again tried to add short term capacity on the molding side to get customers the products that they need to support the market.

Adam J. Greenlee: We've also just, again, tried to add short-term capacity on the molding side to get customers the products that they need to support the markets that they're serving. So it's a really good problem to have, Dan. And you know, I think we're working very closely with our customers to address those needs. And, you know, most of that is covered under our long-term contracts. So these are really good investments for our company, and we'll continue. Thank you very much. We'll go next to Jeff Zekauskas with J.P. Morgan. Thanks very much.

Dan: Their survey so it's a really good problem to have Dan and you know.

Adam J. Greenlee: I think we're working very closely with our customers to address those needs and.

Adam J. Greenlee: Most of that is covered under our long term contracts. So these are really good investments for our company and we will continue to make them.

Speaker Change: Thank you very much.

Adam J. Greenlee: Okay.

Adam J. Greenlee: We'll go next to Jeff Zekauskas with J P. Morgan.

Jeffrey John Zekauskas: Was price-cost favorable in the quarter, and if so, by how much? And what was price-cost for the first two quarters? And, Jeff, are you referring to a specific segment with the question on price? No, no, for the whole company, for the consolidated results, but if you want to go through the individual segments, that's great. Okay.

Jeffrey John Zekauskas: Thanks very much.

Jeffrey John Zekauskas: Was price cost favorable in the quarter and if so by how much and what's the price cost and for the first half.

Jeffrey John Zekauskas: Yeah.

Speaker Change: Two quarters.

Jeffrey John Zekauskas: And Jeff are you are you to a specific segment with the question on price call no no for the whole company.

Jeffrey John Zekauskas: Okay for the consolidated results, but if you want to go through the individual segments that's great.

Kimberly I. Ulmer: Well, how about this? I think price costs. We've talked a lot about the metal container segment with the underabsorption of the fixed cost base there. So that was negative for us in the quarter. But when you think about the resin-based businesses, both in dispensing and specialty closures and in custom containers, really, there wasn't a whole lot of variance on the price-cost line, so not much of an impact. But for the total company, the significance of the metal containers item drove a kind of slight negative in the quarter. Maybe if I could ask it differently, why did your cost of goods sold go down faster than your sales? Well, we have done it.

Jeff: Okay, well how about this I think priced costs, we've talked a lot about the metal container segment with the under absorption of the fixed cost base. There. So that was a negative for us in the quarter.

Kimberly I. Ulmer: Do you think about the resin based businesses, both in dispensing and specialty closures and then custom containers really there wasn't a whole lot of variance on the price cost line, so not much of an impact but for the total company.

Kimberly I. Ulmer: The significance of the metal containers item.

Kimberly I. Ulmer: Rose entirely for the business kind of a slight negative in the quarter.

Speaker Change: But maybe if I can ask it differently why did your cost of goods sold go down faster than your sales change.

Speaker Change: Well we have.

Kimberly I. Ulmer: You know, raw materials, and on the metal side, in particular, that are declining year over year, and that's getting passed through to our customer. So it might just be the timing of when those costs hit our P&L versus when the product sells. Again, think of a more seasonal side of our business, like the metal container side on the fruit and vegetable pack is just one example. If you exclude the inventory readjustment. How was the price cost of the metals? I would say it's relatively neutral. The single largest item on the P&L is this item of under-absorbed fixed costs.

Speaker Change: Raw material and on the metal side in particular that is declining year over year, that's getting passed through to our customer. So it might just be the timing of when those cost hit our P&L versus when the products sold again think of a more seasonal side of our business like the metal container side on the fruit and.

Kimberly I. Ulmer: Well pack is just one example.

Kimberly I. Ulmer: If you exclude the inventory readjustment.

Kimberly I. Ulmer: How was price cost in the metals business.

Kimberly I. Ulmer: I would say, it's relatively neutral the single largest item on the P&L is that this item of under absorbed fixed costs.

Speaker Change: Okay, great. Thank you very much.

Speaker Change: Thank you.

Kimberly I. Ulmer: Okay, great. Thank you very much. Moving next to Arun Vishwanathan with RBC Capital Markets. Okay. Thanks for taking my question. I just wanted to clarify, maybe I misheard your earlier comments, you know, FoodBev, obviously, the destocking has ended, but we're kind of seeing some mixed signals in the scanner data. What are you guys seeing, I guess?

Kimberly I. Ulmer: We'll go next to Iran, Vishwanathan with RBC capital markets.

Kimberly I. Ulmer: Great. Thanks for taking my question.

Kimberly I. Ulmer: I just wanted to clarify maybe maybe I misheard your earlier comments.

Kimberly I. Ulmer: You know food Bev obviously, the Destocking has ended but we're kind of seeing some mixed signals in the scanner data.

Arun Shankar Viswanathan: You know, we have seen some improvement in private label. We've seen some improvement in, you know, some at-home categories, but others are still a little sluggish. Did you say earlier that you're not seeing that improvement yet?

Speaker Change: What are you guys seeing I guess are you know we have seen some improvement in private label, we've seen some improvement and now some at home categories, but others are still a little sluggish.

Arun Shankar Viswanathan: Did you say earlier that you're you're not seeing that improvement yet and I guess, what's your outlook as you look into the back half of the year do.

Adam J. Greenlee: And I guess, what's your outlook as you look into the back half of the year? Do you think promotional spending should continue to increase, and that maybe would drive some improvement in food beverage markets? Or are you thinking about underlying demand trends there? Yeah, I think our underlying demand has been very resilient for those products, you know, and not just in 2024 but in prior periods as well. And the de-stocking activity was much more related to activities at our customers' level, not necessarily the market.

Adam J. Greenlee: Do you think promotional spending should continue to increase and and that maybe would drive some improvement in food and beverage markets or are you thinking about underlying demand trends there.

Adam J. Greenlee: Yes, I think our underlying demand has been very resilient for those products and not just in 2024 and in prior periods as well and the Destocking activity was much more related to the activities that our customers level not necessarily the market. So you know for our food and beverage business, Yeah, I would just say we.

Adam J. Greenlee: So, you know, for our food and beverage business, I would just say, we've seen a nice year-over-year recovery, again, off of the de-stocking periods of the prior year. But as we then turn to the back half of the year, we're expecting more of that. So, you know, we are expecting volume growth year over year in our food and beverage businesses, plural, for the second half of the year, that is both metal containers and on the closure side for our food and beverage businesses. And then to your last question. And then, thanks for that.

Adam J. Greenlee: Seen nice year over year recovery again off of the Destocking periods of the prior year, but as we then turn to the back half of the year, we're expecting more of that so we are expecting volume growth year over year in our food and beverage businesses plural for the second half of the year, that's both metal containers and on the <unk>.

Adam J. Greenlee: Closure side for our food and beverage business.

Adam J. Greenlee: And then to your last point then thanks for that.

Adam J. Greenlee: We had to think quickly around the promotional activity, and we do think that's an important part. We do think the targeted activity has been successful, and we are looking for more of that with our customers as we head through the remainder of 2024. Great, thanks. And, you know, there's been a lot of volatility over the last two years between destocking and, you know, customer actions. So, I guess, you know, maybe, would 25 be a more normal environment?

Speaker Change: Well, yeah, just didn't quickly around the promotional activity. We do think that's an important part.

Adam J. Greenlee: We do think that targeted activity has been successful and are looking for more of that with our customers as we head through the remainder of 2024.

Adam J. Greenlee: And when you think about that, maybe we could just get some initial thoughts of how you're thinking about, you know, that business. It looks like Wayner will definitely improve your overall growth profile with more contribution from closures. And so, you know, do you think kind of low to mid-single digit, and I think that's kind of what you were laying out, top line growth is really possible? And then what kind of leverage would you get on that as you walk down into the EVIT line?

Adam J. Greenlee: Great. Thanks, and you know theres been a lot of volatility over the last two years between Destocking and.

Speaker Change: You know customer actions so.

Adam J. Greenlee: Yes.

Speaker Change: Now, maybe with 25 be a more normal environment and when you think about that.

Adam J. Greenlee: That maybe we could just get some initial thoughts of how you're how you're thinking about them you know that business.

Speaker Change: You know it looks like you know.

Adam J. Greenlee: Rainer will will definitely improve your your overall growth profile with you know more contribution from closures.

Adam J. Greenlee: And so you know do you think kind of low to mid single digit.

Adam J. Greenlee: I think that's kind of what you were laying out topline growth is really possible and then what kind of leverage would you get on that.

Adam J. Greenlee: As you walk down into the EBIT line.

Speaker Change: Sure well I do think it's a little bit too early to start talking about 25, but I think from a normalized perspective, we can probably help with maybe some of the building blocks is as far as maybe the earnings power of the business going forward. So I think I'd start with first off our own nothing has changed about the thesis.

Adam J. Greenlee: Thanks. Sure. Well, I do think it's a little bit too early to start talking about 25, but I think from a normalized perspective, we can probably help with maybe some of the building blocks as far as maybe the earnings power of the business going forward. So I think I'd start with, you know, first off, Haroon. Nothing has changed about the thesis that we have as far as our three segments and their growth profiles going forward. So I think that's an important point.

Adam J. Greenlee: We have as far as our three segments and their growth profiles going forward. So I think that's an important point on the vein or call. You know last week, we did point to 10% EPS accretion and that's once we achieve the full synergies and I think we said something like 18 months.

Robert B. Lewis: On the Vayner call, you know, last week, we did point to 10% EPS accretion, and that's once we achieve the full synergies, and I think we said something like 18 months is when we would get the synergies in. So those are the two important points as we go in. I would also say this large vegetable, fruit, and vegetable customer that's impacting 2024 should normalize. We think that's a discrete item, but we don't have a PAC plan for next year.

Robert B. Lewis: As when we would get the synergies and so those are the two important points as we go in.

Robert B. Lewis: I would also say this large vegetable fruit and vegetable customer that's impacting 2024 that should normalize we think that's a discrete item, but we don't have a pack plan for next year. So I think on top of vein or I would just point you to kind of the longer term thesis that we have.

Robert B. Lewis: So you know, I think on top of Vayner, I would just point you to kind of the longer-term thesis that we have on top of the cost savings initiatives that we've implemented that, you know, we think we've got not only a clear line of sight but great confidence in delivering not only in 24, but in 25 as well. Great, thanks. We'll go next to George Stafos with Think America.

Robert B. Lewis: On top of the cost savings initiatives that we've implemented that we think we've got not only clear line of sight, but great confidence in delivering not only in 'twenty four but in 'twenty five as well.

George Leon Staphos: Great. Thanks.

Robert B. Lewis: Yep.

Speaker Change: We will go next to George Staphos with Bank of America.

George Leon Staphos: Hi, everyone. Thanks for taking the follow on.

George Leon Staphos: Hi everyone. Thanks for taking the follow on. Adam, can you talk at all about whether customers are maybe using... perhaps, or let me say differently. How are customers evaluating performance in metal packaging from what you can see from the suppliers? Have the KPIs changed in terms of how you're being evaluated now versus say two, three years ago? And, you know, relatedly, are you sensing any change? Because, again, you know, you've seen some of the assets change hands in recent years; has there been any kind of move in that regard because it's become more competitive, recognizing it's always a competitive business? So how are customers evaluating performance here, perhaps differently, perhaps the same, versus a couple years ago? Any change in the competitive footing? Yeah, it's interesting.

Adam: Adam can you talk at all to whether customers are may be using.

Adam: Perhaps let me say differently start generally how our customers are evaluating.

George Leon Staphos: Performance.

George Leon Staphos: In metal packaging from what you can see from the suppliers have the Kpis change in terms of how you are being evaluated now versus say two three years ago.

Speaker Change: And you know.

George Leon Staphos: Relatedly are you sensing any change.

George Leon Staphos: Because again, you know you've seen some of the assets change hands. In recent years has there been any kind of move in that regard because it's become more competitive and I think it's always a competitive business. So how our customers are evaluating performance here, perhaps differently, perhaps the same versus.

Speaker Change: A couple of years ago any change in the competitive footing.

Adam J. Greenlee: I think, you know, on the metal container side, obviously, when you think about Silgan's business, so much of it's under long-term contracts, so call it 90%. You know, we're deep in those relationships, we're with our customers at their production planning meetings, and really, none of that's changed.

Speaker Change: Yeah. It's interesting I think you know in the metal container side. Obviously, you know when you think about silicones business. So much of it's under long term contract. So call. It 90% you know we're deep in those relationships were with our customers and their production planning meetings.

Adam J. Greenlee: And really none of that's changed.

Adam J. Greenlee: You know, we're near site, in many cases; we're onsite in many cases. So I just, I think our metrics, George, really haven't changed a whole lot. So I am trying to think broadly about whether the market has changed, and I'm not really aware of anything that I would say has impacted how our customers or the market value suppliers at this point. So, you know, I'll just say maybe we were advanced in our relationships and our metrics because we are onsite and near onsite, and maybe others are catching up to that now. I don't really know.

Adam J. Greenlee: Yep.

Adam: Your site in many cases were onsite in many cases, so I just I think our metrics George really haven't changed a whole lot. So I am trying to think about broadly if the market has changed and I'm not really aware of anything that I would say has.

Adam J. Greenlee: Impacted how are customers or the market value suppliers at this point. So I'll just say, maybe we were advanced in our relationships and our metrics. It because we are on site and near site and maybe others are catching up to that now I don't really know, but I think our relationships are as good as strong as they've ever been and I think.

Adam J. Greenlee: But I think our relationships are as good and as strong as they've ever been. And I think that also helps answer the second part of your question on the competitive front again. Really, we're not seeing any change in competitive activity on the Silgan side of the equation.

Adam J. Greenlee: That also helps to answer the second part of your question on the competitive front again.

Adam J. Greenlee: Really we're not seeing any any change in competitive activity on the silicon side of the equation again long term contracts.

Adam J. Greenlee: Again, long-term contracts protecting the vast majority of our business with very, very deep relationships. I think that we're really secured through the pandemic and just completely enhanced as we've moved out of the pandemic, helped our customers work through some destocking activities, and we're now sort of back to a normal business relationship, order book, and I guess relatable to the end consumer demand for those products.

Adam J. Greenlee: Protecting the vast majority of our business with very very deep relationships I think that were really secured through the pandemic and just completely enhanced as we've moved out of the pandemic helped our customers work through some destocking activities and we're now sort of back to a normal business relationship at this.

Speaker Change: <unk> with <unk>.

Adam J. Greenlee: Order books more.

Adam J. Greenlee: I guess related to the end consumer demand for those products.

Robert B. Lewis: George, the only other thing I would add to that is, yes, assets have changed hands, but I think the market capacity is relatively, you know, well-balanced, and in our particular case, we've talked about some of the cost-outs that we're doing as well. So I think that, with the backdrop of the long-term contracts, keeps the market pretty well organized and stable. Yeah, no, good points.

Adam J. Greenlee: Yes, George the only other thing I would add to that is yes assets have changed hands, but I think the market capacity is relatively well balanced.

Robert B. Lewis: And in our particular case, we've talked about some of the cost outs that we're doing as well. So so I think that with the backdrop of the long term contracts keeps the market pretty well.

George: <unk> organized and stable.

George Leon Staphos: I mean, I wasn't suggesting people were adding capacity, but as assets change hands, relative return thresholds can change. And certainly, the long-term relationships you've had and the way you've gone about with near site and on site has served you well. I think I know what you're going to say and certainly it's been a success story the last few years, but with Vayner now, Custom winds up being relatively, well, all the businesses do, right, but, you know, Custom winds up being 10% of the portfolio, I think, from an EBITDA standpoint, and correct me if I'm wrong in that rough number; I think it's from your slides.

George: Yeah, no good point I mean I.

George Leon Staphos: I wasn't suggesting people are adding capacity, but as assets change hands, a relative return thresholds can change.

George Leon Staphos: Certainly the long term relationships, you've had and the way we've gone about with near site and on sites has served you well.

George Leon Staphos: <unk>.

George Leon Staphos: I think I know, what youre going to say and certainly it's been up and a successful over the last few years.

Speaker Change: But with vein are now cut.

George Leon Staphos: Custom winds up being relatively well all of the businesses do right, but you know custom ones I think 10% of the portfolio I think from an EBITDA standpoint, and correct me if I'm wrong in that in that rough number of things from your slides.

George Leon Staphos: How do you see the long-term strategic fit of custom now, if at all differently, versus where it was prior to Vayner? And is it just as simple as, hey, listen, it's a great franchise, it's doing well, and you know, nothing changes other than its relative importance? And then my last question, then I'll turn it over to you.

Speaker Change: How do you see the long term strategic fit of custom now if at all differently versus where it was prior to Dana.

George Leon Staphos: And is it just as simple as hey, listen it's a great franchise, it's doing well and you know.

George Leon Staphos: Nothing changed those then its relative importance and then my last question and I'll turn it over.

Robert B. Lewis: You know, we've spent the last year and a half plus probably talking about de-stocking and the consumer being weak and the like, and promotion is finally starting to have an effect, as we would have expected. Do you sense maybe now the scale is tipping the other way, where customers are having to restock? How would you answer that?

Speaker Change: We spent the last year and a half.

Speaker Change: Probably talking about Destocking, and the consumer being weak and the like and promotion is finally, starting to have an effect.

Robert B. Lewis: As we would've expected.

Speaker Change: Do you sense, maybe now the scale is tipping other way where customers are having a restock.

Adam J. Greenlee: Thanks, guys. Good luck in the quarter. Yeah, George, maybe I'll take the first part of that question relative to custom containers and I'll leave the de-stocking commentary with Adam. But yeah, look, I don't think there's anything that's changed about our view of the custom container business, right? I mean, first and foremost, right now, we're focused on getting the Vayner deal closed and integrated.

Speaker Change: How would you answer that thanks, guys. Good luck in the quarter.

Adam J. Greenlee: Yeah, George maybe I'll take the first part of that question relative to custom container and I'll leave the destocking commentary without them, but yeah look I don't think there's anything that's changed about our view of the customer container business right I mean first and foremost right now we're focused on getting the.

Speaker Change: The vein or deal closed and integrated so that's where our time and attention is being spent at the moment, but I think if you look at the performance of the business the custom container business, it's doing pretty well operationally there they're hitting on all cylinders.

Robert B. Lewis: So that's where our time and attention are being spent at the moment. But I think if you look at the performance of the business, the custom container business, it's doing pretty well operationally; they're hitting on all cylinders. We've We've gotten to the commercialization activities that we were talking about, and as Adam pointed out, in the second case, we got to them faster than we were originally anticipating. So the business is performing well.

Adam: We've gotten to the commercialization activities that we were talking about.

Robert B. Lewis: And as Adam pointed out in the second case got to it faster than what we were originally anticipating so that the business is performing and so we're happy about that I think what we've what we've said in the past and it still holds true that as long as we're not putting the business in a competitively disadvantaged position.

Robert B. Lewis: And so we're happy about that. I think what we've said in the past, and it still holds true, that as long as we're not putting the business in a competitively disadvantaged position by constraining capital to it, which we're obviously not by taking on new business awards, then we like the business for what it is. And from that perspective, I am happy to have it as part of the portfolio.

Robert B. Lewis: By constraining capital to it which were obviously not by taking on new business Awards.

Robert B. Lewis: Then where we are.

Robert B. Lewis: We like the business or for what it is and in.

Robert B. Lewis: From that perspective, I'm happy to have it as part of the portfolio.

Robert B. Lewis: And then, George, thinking about kind of destocking and any shifts there, I think we loosely commented in the first quarter that some of the volume gains that we had seen, particularly in custom containers, we thought might have been sort of related to the restocking activity. And that's just where customers cut inventory too far and weren't able to support the market. So we saw a little bit of that in the first quarter.

Robert B. Lewis: And then George thinking about kind of destocking in and any shifts there.

Robert B. Lewis: We loosely commented in the first quarter that some of the volume gains that we had seen particularly in custom containers.

Robert B. Lewis: We thought might have been sort of related to the restocking activity and thats, just where customers cut inventory too far and weren't able to support the market. So.

Robert B. Lewis: So we saw a little bit of that in the first quarter I think theres, a little bit of that in Q2.

Robert B. Lewis: I think there's a little bit of that in Q2. And I think in our dispensing and specialty closure segment, part of the capacity constraint we're seeing is our customers, I'll just say, challenge of forecasting that demand.

Speaker Change: I think in our dispensing and especially closure segment part of the capacity constraint were seen as our customers I'll just say challenge of forecasting that demand. So I think they got they got caught a little short on their inventory and Thats now backing up to us trying to actually manufacturer in mold parts in order to.

Adam J. Greenlee: So I think they got caught a little short on their inventory, and that's now back up to us trying to actually manufacture and mold parts in order to support their market. So we'll get through all of that, but sure, there's a little bit of restocking. And we'll just continue to watch that very closely as we kind of navigate through the remainder of 24 and cycle against those destocking comps from last year.

Adam J. Greenlee: To support their market. So we will get through all of that to ensure there is a little bit of restocking.

Adam J. Greenlee: And we'll just continue to watch that very closely as we kind of navigate through the remainder of 'twenty four and cycle against those destocking comps from last year.

Adam J. Greenlee: Thanks, Bob. Thanks, Adam. Good luck in the quarter. At this time, I'd like to hand the call back to Adam Greenlee for any additional or closing remarks. Great. Thank you, Jennifer. And thanks, everyone, for your interest in Silgan. And we look forward to sharing our third quarter results later in the year. This does conclude today's conference. Thank you for your participation.

Adam J. Greenlee: Thanks, Bob Thanks, Adam Good luck in the quarter.

George: Thanks George.

Adam J. Greenlee: At this time I'd like to hand, the call back to Adam Greenlee for any additional or closing remarks.

Adam J. Greenlee: Great. Thank you Jennifer and thanks, everyone for your interest in so again and we look forward to sharing our third quarter results later in the year.

Adam J. Greenlee: This does conclude today's conference we thank you for your participation.

Adam J. Greenlee: [music].

Speaker Change: Uh huh.

Adam J. Greenlee: Yeah.

Adam J. Greenlee: Okay.

Adam J. Greenlee: [music].

Adam J. Greenlee: Yeah.

Adam J. Greenlee: Yeah.

Adam J. Greenlee: [music].

Adam J. Greenlee: Yes.

Adam J. Greenlee: Yes.

Adam J. Greenlee: Yes.

Adam J. Greenlee: [music].

Adam J. Greenlee: Yeah.

Adam J. Greenlee: [music].

Adam J. Greenlee: Yeah.