Q2 2024 Mativ Holdings Inc Earnings Call

August 8, 2024

Unknown Executive: the biggest driver this quarter, delivering over $10 million of incremental EBITDA and over 300 basis points of margin improvement year over year. On a consolidated basis, the primary driver of this quarter's adjusted EBITDA performance was our commercial team's pricing discipline and their ability to maintain a favorable net selling price versus input cost spread. Throughout the recent period of supply challenges and extraordinary inflation over the past two years, our commercial team has done an excellent job of driving pricing to offset the impact of material inflation.

Unknown Executive: the biggest driver of this quarter, delivering over $10 million of incremental EBITDA and over 300 basis points of margin improvement year over year. On a consolidated basis, the primary driver of this quarter's adjusted EBITDA performance was our commercial team's pricing discipline and their ability to maintain a favorable net selling price versus input cost spread. Throughout the most recent period of supply challenges and extraordinary inflation over the past two years, our commercial team has done an excellent job of driving pricing to offset the impact of material inflation. While we experienced some deflation on input cost in Q2, maintaining a positive net selling price versus input cost spread historically has been and continues to be a key success factor in primary performance metric for our teams. We also implemented new tools last year to ensure we minimize leakage and continue to draw value with our pricing decisions.

was the biggest driver this quarter, delivering over $10 million of incremental EBITDA and over 300 basis points of margin improvement year over year.

On a consolidated basis, the primary driver of this quarter's adjusted EBITDA performance was our commercial team's pricing discipline and their ability to maintain a favorable net selling price versus input cost spread.

Throughout the most recent period of supply challenges and extraordinary inflation over the past two years, our commercial team has done an excellent job of driving pricing to offset the impact of material inflation.

Unknown Executive: While we experienced some deflation on input costs in Q2, maintaining a positive net selling price versus input cost spread historically has been and continues to be a key success factor and primary performance metric for our team. We also implemented new tools last year to ensure we minimize leakage and continue to drive value with our pricing decisions. sequentially, consolidated sales were up almost 5% this quarter after being up more than 10% in Q1, mainly due to volume growth.

Unknown Executive: While we experienced some deflation on input cost in Q2, maintaining a positive net selling price versus input cost spread historically has been and continues to be a key success factor in primary performance metric for our teams. We also implemented new tools last year to ensure we minimize leakage and continue to draw value with our pricing decisions. To quenchally, consolidated sales were up almost 5% this quarter after being up more than 10% in Q1, mainly due to volume growth.

While we experienced some deflation on input costs in Q2, maintaining a positive net selling price versus input cost spread historically has been, and continues to be, a key success factor and primary performance metric for our teams.

We also implemented new tools last year to ensure we minimize leakage and continue to drive value with our pricing decisions.

Unknown Executive: To quenchally, consolidated sales were up almost 5% this quarter after being up more than 10% in Q1, mainly due to volume growth. Volume gains were most pronounced in our staff segment, which is also where we felt the most volume pressure last year and which therefore presented the greater recovery opportunity this year. Across both segments, the categories with our highest volume growth year over year were capes and labels up 11%, filtration up 8%, and release liners up 5%. While volume is improving, there continues to be headwinds. In discussions with our customers, we know that a number of them remain cautious about building inventory due to the general instability of the market.

Sequentially, consolidated sales were up almost 5% this quarter after being up more than 10% in Q1, mainly due to volume growth.

Unknown Executive: Volume gains were most pronounced in our SAS segment, which is also where we felt the most volume pressure last year and which therefore presented the greater recovery opportunity this year. Across both segments, the categories with our highest volume growth year over year were Tapes and Labels up 11%, Filtration up 8%, and Release Liners up 5%. While volume is improving, there continues to be headwinds and discussions with our customers. We know that a number of them remain cautious about building inventory due to the general instability of the market.

Unknown Executive: Volume gains were most pronounced in our staff segment which is also where we felt the most volume pressure last year and which therefore presented the greater recovery opportunity this year. Across both segments, the categories with our highest volume growth year over year were capes and labels up 11%, filtration up 8%, and release liners up 5%. While volume is improving, there continues to be headwinds. In discussions with our customers, we know that a number of them remain cautious about building inventory due to the general instability of the market. While we have seen modest demand improvement, it remains tempered.

volume gains were most pronounced in our staff segment which is also where we felt the most volume pressure last year in which is therefore presented the greater recovery opportunity this year

Julie Schertell: Across both segments, the categories with our highest volume growth year over year were Tapes and Labels up 11%, Filtration up 8%, and Release Liners up 5%. Our teams are relentless in their pursuit to transform Mativ into a more agile and flexible entity. And we've integrated our systems and harmonized our technology for better, faster decision making. Let me give you a few examples. Year-to-date, we have improved our quality for customers by over 30%. Let me give you a few examples.

across both segments the categories with our highest volume growth year-over-year where tapes and labels up eleven percent filtration up eight percent in releasase liners up five percent

Speaker Change: While volume is improving, there continues to be headwinds. In discussions with our customers, we know that a number of them remain cautious about building inventory due to the general instability of the markets.

Unknown Executive: While we have seen modest demand improvement, it remains tempered. This is consistent with the continuing contraction of the global PMI metric and leads to another top priority of ours: aggressive cost management. Our teams are relentless in their pursuit to transform that of into a more agile and flexible entity. We've focused on making more of our cost variable, and we're seeing these results in our operational cost performance. Additionally, we restructured the organization in Q1, with expected savings of $20 million this year. These actions have been executed, and we are seeing the benefits. In addition to these efforts, we've optimized our manufacturing footprint from 48 manufacturing plants at the time of the merger two years ago to 38 manufacturing plants today and implemented the majority of our original $55 million synergy commitment.

while we have seen modest demand improvement it remains tempered this is consistent with the continuing contraction of the global pmi metric and leads to another top priority of ours aggressive cost management

Unknown Executive: This is consistent with the continuing contraction of the global PMI metric and leads to another top priority of ours, aggressive cost management. Our teams are relentless in their pursuit to transform that of into a more agile and flexible entity. We've focused on making more of our cost variable and we're seeing these results in our operational cost performance. Additionally, we restructured the organization in Q1 with expected savings of $20 million this year.

our teams are relentless in their pursuit to transform mative into a more agile and flexible entity

We've focused on making more of our cost variable, and we're seeing these results in our operational cost performance.

Additionally, we restructured the organization in Q1 with expected savings of $20 million this year. These actions have been executed and we are seeing the benefits.

Unknown Executive: These actions have been implemented, and we are seeing the benefits. In addition, we've optimized our manufacturing footprint from 48 manufacturing plants at the time of the merger two years ago to 38 manufacturing plants today and implemented the majority of our original $65 million Synergy Commitment. We've structured our commercial teams and operational functions to align with our customers and markets, making us more responsive and customer-centric. And we've integrated our systems and harmonized our technology for better, faster decision making. As a result, our operational efficiency and customer satisfaction levels have continued to increase. Let me give you a few examples.

Unknown Executive: These actions have been executed and we are seeing the benefits. In addition to these efforts, we've optimized our manufacturing footprint from 48 manufacturing plants at the time of the merger two years ago to 38 manufacturing plants today and implemented the majority of our original $55 million synergy commitment. We've structured our commercial teams and operational functions to align to our customers in market, making it more responsive and customer-centric. And we've integrated our systems and harmonized our technology for better, faster decision-making.

In addition to these efforts, we've optimized our manufacturing footprint from 48 manufacturing plants at the time of the merger two years ago to 38 manufacturing plants today and implemented the majority of our original $65 million Synergy Commitment.

Unknown Executive: We've structured our commercial teams and operational functions to align to our customers in market, making it more responsive and customer-centric. And we've integrated our systems and harmonized our technology for better, faster decision-making. As a result, our operational efficiency and customer satisfaction levels have continued to increase. Let me give you a few examples. We've always been known for the quality of our products, but that doesn't stop us from continuing to invest in and grow our quality performance. Year-to-date, we have improved our quality to customers by over 30 percent, and at the same time, we've improved our already high service levels by over 5 percent.

We've structured our commercial teams and operational functions to align to our customers and market, making us more responsive and customer-centric. And we've integrated our systems and harmonized our technology for better, faster decision making.

Unknown Executive: As a result, our operational efficiency and customer satisfaction levels have continued to increase. Let me give you a few examples. We've always been known for the quality of our products, but that doesn't stop us from continuing to invest in and grow our quality performance. Year-to-date, we have improved our quality to customers by over 30 percent, and at the same time, we've improved our already high service levels by over 5 percent. We've done this while reducing year-over-year inventory levels by $50 million, and with improved performance and manufacturing costs driven by increased operating efficiencies as evidence in Q2.

As a result, our operational efficiency and customer satisfaction levels have continued to increase. Let me give you a few examples.

Unknown Executive: We've always been known for the quality of our products, but that doesn't stop us from continuing to invest in and grow our quality performance. Year-to-date, we have improved our quality for customers by over 30%. And at the same time, we've improved our already high service levels by over 5%. We've done this while reducing year-over-year inventory levels by $50 million and with improved performance and manufacturing costs driven by increased operating efficiencies, as evidenced in Q2.

We've always been known for the quality of our products, but that doesn't stop us from continuing to invest in and grow our quality performance.

Julie Schertell: Year-to-date, we have improved our quality to customers by over 30%, and at the same time, we've improved our already high service levels by over 5%.

Unknown Executive: We've done this while reducing year-over-year inventory levels by $50 million, and with improved performance and manufacturing costs driven by increased operating efficiencies, as evidenced in Q2. Our purpose-built assets are ideal for quick changeovers and provide a flexible supply chain that our customers value. As you can see from these examples, our team is focused on execution, and that means in our plants as well as in the marketplace.

Julie Schertell: We've done this while reducing year-over-year inventory levels by $50 million and with improved performance and manufacturing costs driven by increased operating efficiencies, as evidenced in Q2.

Unknown Executive: Our purpose-built assets are ideal for quick changeovers and provide a flexible supply chain that our customers value. As you can see from these examples, our team is focused on execution, and that means in our plants as well as in the marketplace.

Julie Schertell: Our purpose-built assets are ideal for quick changeovers and provide a flexible supply chain that our customers value.

Okay.

Speaker Change: as you can see from these examples our team is focused on execution and that means in our plants as well as in the marketplace so let me spend a few minutes updating you on our demand generation activities

Unknown Executive: So let me spend a few minutes updating you on our demand generation activities. As I mentioned earlier, sequential volume has grown nicely over the past two quarters after the significant destocking and slowdown in 2023. And while demand is expected to stabilize versus Q2, we also expect significant improvement versus prior year, providing ample opportunity for us to grow and execute in the marketplace. Let me give you a few examples. In Q2, we finalized long-term customer agreements in our films, filtration, and healthcare categories with the potential to increase volume by more than 10 percent with some of our largest customers.

Unknown Executive: So let me spend a few minutes updating you on our demand generation activity. As I mentioned earlier, sequential volume has grown nicely over the past two quarters after the significant destocking and slowdown in 2023. And while demand is expected to stabilize versus Q2, we also expect significant improvement versus the prior year, providing ample opportunity for us to grow and execute in the marketplace. Let me give you a few examples.

Julie Schertell: As I mentioned earlier, sequential volume has grown nicely over the past two quarters after the significant destocking and slowdown in 2023.

Speaker Change: and while demand is expected to stabilize versus q two we also expect significant improvement versus prior year providing ample opportunity for us to grow and execute in the marketplace let me give you a few examples

Julie Schertell: In Q2, we finalized long-term customer agreements in our film, filtration, and healthcare categories, with the potential to increase volume by more than 10% with some of our largest customers. This is driven by continuous improvement in quality, reliable and flexible supply chains, and co-development of new products. With that, I'll turn it over to Greg for a more detailed discussion of our financial performance, and then I'll provide some closing thoughts on our path forward.

Unknown Executive: In Q2, we finalized long-term customer agreements in our film, filtration, and healthcare categories, with the potential to increase volume by more than 10% with some of our largest customers. This is driven by continuous improvement in quality, reliable and flexible supply chains, and co-development of new products. Secondly, we continue to launch new products that improve our customer performance and the environment. This quarter, we launched a new high-efficiency water filtration product in alignment with our largest global water filtration customer, and we also earned a new commitment from one of the largest automotive technology companies to provide wire tape solutions for their EV and ICE platforms.

Julie Schertell: In Q2, we finalized long-term customer agreements in our film, filtration, and healthcare categories with the potential to increase volume by more than 10% with some of our largest customers.

Unknown Executive: This is driven by the continuous improvement in quality, reliable, and flexible supply chains, and co-development of new products. Secondly, we continue to launch new products that improve our customer's performance and environment footprint. This quarter, we've launched a new high efficiency water filtration product in alignment with our largest global water filtration customer and also earned a new commitment from one of the largest automotive technology companies to provide wire tape solutions for their EV and ICE platforms. Lastly, we also recently approved new investments to provide netting capacity for our filtration business as well as a new technology in our automotive tape business.

Julie Schertell: this is driven by the continuous improvement in quality reliable and flexible supply chains and code development of new products

Greg: secondly we continue to launch new products that improve our customers' performance and environment footprint

Unknown Executive: Lastly, we also recently approved new investments to provide netting capacity for our filtration business as well as a new technology in our automotive tape business. Together, these investments will enable additional revenue of up to 30 million and are expected to start up in late 2025. In the past, I've mentioned the recent investments in our filtration business in Germany and in our release line of business in Mexico. Both of these assets have come online as expected and the incremental capacity in Mexico has exceeded our volume forecast for the second month in a row.

Greg: This quarter, we've launched a new high-efficiency water filtration product in alignment with our largest global water filtration customer.

Greg: and also earned a new commitment from one of the largest automotive technology companies to provide wiretape solutions for their EV and ICE platforms.

Unknown Executive: Lastly, we also recently approved new investments to provide netting capacity for our filtration business, as well as new technology in our automotive tape business. Together, these investments will enable additional revenue of up to $30 million and are expected to start in late 2025. In the past, I've mentioned the recent investments in our filtration business in Germany and in our release liner business in Mexico. Both of these assets have come online as expected, and the incremental capacity in Mexico has exceeded our volume forecast for the second month in a row. With that, I'll turn it over to Greg for a more detailed discussion of our financial performance, and then I'll provide some closing thoughts on our past and future.

Greg: Lastly, we also recently approved new investments to provide netting capacity for our filtration business as well as a new technology in our automotive tape business.

Unknown Executive: Together, these investments will enable additional revenue of up to 30 million and are expected to start up in late 2025. In the past, I've mentioned the recent investments in our filtration business in Germany and in our release line of business in Mexico. Both of these assets have come online as expected, and the incremental capacity in Mexico has exceeded our volume forecast for the second month in a row.

Greg: together these investments will enable additional revenue of up to thirty million and are expected to start up in late two thousand and twenty-five

Greg: in the past as mentioned the recent investments in our filtration business in germany and in our release liner business in mexico

Greg: Both of these assets have come online as expected, and the incremental capacity in Mexico has exceeded our volume forecast for the second month in a row.

Unknown Executive: With that, I'll turn it over to Greg for more detailed discussion of our financial performance, and then I'll provide some closing thoughts on our paths forward.

Greg Weitzel: With that, I'll turn it over to Greg for more detailed discussion of our financial performance and then I'll provide some closing thoughts on our paths forward.

Julie Schertell: With that, I'll turn it over to Greg for a more detailed discussion of our financial performance and then I'll provide some closing thoughts on our path forward.

Greg Weitzel: Thanks Julie and good morning everyone. Consolidated net sales for the quarter were $523 million compared to $526 million in the prior year, with volume up almost 2% and selling prices down 2% due to input cost deflation as well as unfavorable currency. While sales were almost flat on a year over year basis, we saw a roughly 5% step up on a sequential basis. Adjusted EBITDA from continuing operations was $66.6 million, up 13% from 59.1 million in the prior year and up more than 45% sequentially.

Greg Weitzel: Thanks, Julie, and good morning, everyone. Consolidated net sales for the quarter were 523 million compared to 526 million in the prior year. With volume up almost 2% and selling prices down 2% due to input cost deflation, as well as unfavorable currency.

Greg Weitzel: Thanks Julie and good morning everyone. Consolidated net sales for the quarter were 523 million compared to 526 million in the prior year. With volume up almost 2% and selling prices down 2% due to input cost deflation as well as unfavorable currency.

Greg: Thanks, Julie, and good morning, everyone.

Greg: Consolidated net sales for the quarter were $523 million compared to $526 million in the prior year, with volume up almost 2% and selling prices down 2% due to input cost deflation as well as unfavorable currency.

Greg Weitzel: While sales were almost flat on a year-over-year basis, we saw roughly 5% step up on a sequential basis. Adjusted EBITDA from continuing operations with 66.6 million, up 13% from 59.1 million in the prior year, and up more than 45% sequentially. Favorable net selling price versus input cost, higher volumes, and improved distribution and manufacturing costs represented a combined 17 million favorable impact, which was partially offset by 6 million of lower mixed contributions in 4 million of unfavorable SG&A expense. Adjusted EBITDA margin increased 350 basis points sequentially and 150 basis points year-over-year.

Greg Weitzel: While sales were almost flat on a year-over-year basis, we saw roughly 5% step up on a sequential basis. Adjusted EBITDA from continuing operations with 66.6 million, up 13% from 59.1 million in the prior year, and up more than 45% sequentially. Favorable net selling price versus input cost, higher volumes, and improved distribution and manufacturing costs, represented a combined 17 million favorable impact, which was partially offset by 6 million of lower mixed contributions in 4 million of unfavorable SG&A expense. Adjusted EBITDA margin increased 350 basis points sequentially and 150 basis points year-over-year.

Greg: While sales were almost flat on a year-over-year basis, we saw a roughly 5% step-up on a sequential basis.

Greg Weitzel: adjusted EBITDA from continuing operations was $66.6 million, up 13% from $59.1 million in the prior year, and up more than 45% sequentially. 350 basis points sequentially and 150 basis points year over year. FAM adjusted EBITDA of $42 million was up 27% sequentially and down 5% year-over-year, reflecting the effects of lower volumes in our advanced films and higher SG&A expenses. FAM's adjusted EBITDA margin of 20.5% was up 410 basis points sequentially. While it's premature to provide specifics, the refinancing process is underway and is focused on balancing capital structure stability and optimizing our overall cost of capital.

Greg Weitzel: Adjusted EBITDA from continuing operations was $66.6 million, up 13% from $59.1 million in the prior year, and up more than 45% sequentially.

Greg Weitzel: Favorable net selling price versus input cost, higher volumes, and improved distribution and manufacturing costs represented a combined $17 million favorable impact, which was partially offset by $6 million of lower mixed contributions and $4 million of unfavorable SG&A expenses. Adjusted EBITDA margin increase 350 basis points sequentially and 150 basis points year over year. Turning to each of our segments, net sales in our Filtration and Advanced Materials segment of $206 million were up 2% sequentially and down 3% versus Q2 of 2023.

Greg Weitzel: Favorable net selling price versus input cost, higher volumes, and improved distribution and manufacturing costs represented a combined 17 million favorable impact.

Greg Weitzel: which was partially offset by six million of a lower mix contribution in four million of unfavorable sunna expense

Greg Weitzel: Adjusted EBITDA margin increased 350 basis points sequentially and 150 basis points year-over-year.

Greg Weitzel: Turning to each of our segments, net sales in our filtration and advanced material segment of 206 million were up 2% sequentially and down 3% versus Q2 of 2023. The year-over-year decrease reflected lower volumes in our advanced films category and lower selling price due to input cost deflation, partially offset by higher volumes in our filtration categories. FAM adjusted EBITDA of 42 million was up 27% sequentially and down 5% year-over-year, reflecting the effects of lower volumes in our advanced films and higher SG&A expenses, partially offset by higher volumes in filtration, positive net selling price versus input cost, and improved manufacturing efficiencies.

Greg Weitzel: Turning to each of our segments, net sales and our filtration and advanced material segment of 206 million were up 2% sequentially and down 3% versus Q2 of 2023. The year-over-year decrease reflected lower volumes in our advanced films category and lower selling price due to input cost deflation, partially offset by higher volumes in our filtration categories. FAM adjusted EBITDA of 42 million was up 27% sequentially and down 5% year-over-year, reflecting the effects of lower volumes in our advanced films and higher SG&A expenses, partially offset by higher volumes in filtration, positive net selling price versus input cost, and improved manufacturing efficiencies.

Greg Weitzel: Turning to each of our segments, net sales in our Filtration and Advanced Materials segment of $206 million were up 2% sequentially and down 3% versus Q2 of 2023.

Greg Weitzel: The year-over-year decrease reflected lower volumes in our advanced films category and lower selling prices due to input cost deflation, partially offset by higher volumes in our filtration categories. FAM adjusted EBITDA of $42 million was up 27% sequentially and down 5% year-over-year, reflecting the effects of lower volumes in our advanced films and higher SG&A expenses, partially offset by higher volumes and filtration. Positive Net Selling Price vs.

Greg Weitzel: The year-over-year decrease reflected lower volumes in our advanced films category and lower selling price due to input cost deflation, partially offset by higher volumes in our filtration categories.

Greg Weitzel: fam adjusted ebitda forty-two million was up twenty-seven percent sequentially and on five percent year-over-year reflecting the effects of a lower volumes in our advan films and higher sdna expenses

Unknown Executive: Input Cost and Improved Manufacturing Efficiency. FAM's adjusted EBITDA margin of 20.5% was up 410 basis points sequentially. In our sustainable and adhesive solution segment, net sales of 317 million were up 1% from last year and up 7% sequentially. The year-over-year increase reflected higher volumes across all of our end markets, partially offset by lower selling prices due to input cost deflation.

Greg Weitzel: Partially offset by higher volumes and filtration, positive net selling price versus input cost, and improved manufacturing efficiencies.

Greg Weitzel: FAM adjusted EBITDA margin of 20.5% was up 410 basis points sequentially, and our sustainable and adhesive solution segment net sales of 317 million were up 1% from last year and up 7% sequentially. The year-over-year increase reflected higher volumes across all of our end markets, partially offset by lower selling prices due to input cost deflation. SASS generated strong adjusted EBITDA performance of 46 million, which was up 28% year-over-year and up 43% sequentially. Adjusted EBITDA margin increased 310 basis points versus the prior year and 370 basis points sequentially. The year-over-year performance reflected favorable net selling price versus input cost performance, higher volumes, and improved distribution costs, partially offset by unfavorable mix and higher SG&A expense.

Greg Weitzel: FAM adjusted EBITDA margin of 20.5% was up 410 basis points sequentially and our sustainable and adhesive solution segment net sales of 317 million were up 1% from last year and up 7% sequentially. The year-over-year increase reflected higher volumes across all of our end markets partially offset by lower selling prices due to input cost deflation. SASS generated strong adjusted EBITDA performance of 46 million which was up 28% year-over-year and up 43% sequentially.

Greg Weitzel: FAM adjusted EBITDA margin of 20.5% was up 410 basis points sequentially.

Greg Weitzel: and are sustainable in adhesive solutution segment net sales of three hundred and seventeen million were up one percent from last year in up seven percent sequentially

Greg Weitzel: The year-over-year increase reflected higher volumes across all of our end markets, partially offset by lower selling prices due to input cost deflation.

Unknown Executive: SAS generated strong Adjusted EBITDA performance of $46 million, which was up 28% year over year and up 43% sequentially. Adjusted EBITDA margin increased 310 basis points versus the prior year and 370 basis points sequentially. The year-over-year performance reflected favorable net selling price versus input cost performance, higher volumes, and improved distribution costs partially offset by unfavorable mix and higher SG&A expense.

Greg Weitzel: fas generated strong adjusted ebitda performance of forty-six million which was up twenty eight percent year-over-year in up forty-three percent sequentially adjusted ebitda margin increased three hundred and ten basis points versus the prior year and three hundred and seventy basis points sequentially

Greg Weitzel: Adjusted EBITDA margin increased 310 basis points versus the prior year and 370 basis points sequentially. The year-over-year performance reflected favorable net selling price versus input cost performance, higher volumes, and improved distribution costs, partially offset by unfavorable mix and higher SG&A expense.

Greg Weitzel: The year-over-year performance reflected favorable net selling price versus input cost performance, higher volumes, and improved distribution costs partially offset by unfavorable mix and higher SG&A expense.

Greg Weitzel: Turning to a few of the corporate items, unallocated corporate adjusted EBITDA expense of around 22 million was in line with the prior year. As a reminder, we expect unallocated to be around 80 million for the full year. The interest expense of 18 million increased 12% from the prior year, primarily due to a higher revolver balance coupled with higher interest rates on our floating rate debt in 2024. When taking hedges into account, approximately 75% of our debt is at a fixed rate and matures on a staggered basis between 2026 and 2028. With that said, one of our priorities is proactively addressing the upcoming maturity of our 2026 senior unsecured notes, which will be redeemable at par starting on October 1, 2024.

Greg Weitzel: Turning to a few of the corporate items, unallocated corporate adjusted EBITDA expense of around 22 million was in line with the prior year as a reminder we expect unallocated to be around 80 million for the full year. The interest expense of 18 million increased 12% from the prior year, primarily due to a higher revolver balance coupled with higher interest rates on our floating rate debt in 2024. When taking hedges into account, approximately 75% of our debt is at a fixed rate and matures on a staggered basis between 2026 and 2028.

Unknown Executive: Turning to a few of the corporate items, unallocated corporate adjusted EBITDA expense of around $22 million was in line with the prior year. As a reminder, we expect it to be around $80 million for the full year. Interest expense of $18 million increased 12% from the prior year, primarily due to a higher revolver balance coupled with higher interest rates on our floating rate debt in 2024. When taking hedges into account, approximately 75% of our debt is at a fixed rate and matures on a staggered basis between 2026 and 2028.

Greg Weitzel: Turning to a few of the corporate items, unallocated corporate adjusted EBITDA expense of around $22 million was in line with the prior year. As a reminder, we expect unallocated to be around $80 million for the full year.

Greg Weitzel: Interest expense of $18 million increased 12% from the prior year, primarily due to a higher revolver balance coupled with higher interest rates on our floating rate debt in 2024.

Greg Weitzel: When taking hedges into account, approximately 75% of our debt is at a fixed rate and matures on a staggered basis between 2026 and 2028.

Unknown Executive: With that said, one of our priorities is proactively addressing the upcoming maturity of our 2026 Senior Unsecured Notes, which will be redeemable at par starting on October 1, 2024. We are currently evaluating capital structure strategies to refinance those notes in the debt capital markets, given current market conditions. While it's premature to provide specifics, the refinancing process is underway and is focused on balancing capital structure stability and optimizing our overall cost of capital.

Greg Weitzel: With that said, one of our priorities is proactively addressing the upcoming maturity of our 2026 senior unsecured notes, which will be redeemable at par starting on October 1, 2024. We are currently evaluating capital structure strategies to refinance those notes in the debt capital markets given current market conditions. While it's premature to provide specifics, the refinancing process is underway and is focused on balancing capital structure stability and optimizing our overall cost of capital. Other expenses of 1.1 million decreased 1.5 million compared with the prior year period largely due to losses on foreign exchange.

Greg Weitzel: With that said, one of our priorities is proactively addressing the upcoming maturity of our 2026 Senior Unsecured Notes, which will be redeemable at par starting on October 1, 2024.

Greg Weitzel: We are currently evaluating capital structure strategies to refinance those notes in the debt capital markets given current market conditions. While it's premature to provide specifics, the refinancing process is underway and is focused on balancing capital structure stability and optimizing our overall cost of capital. Other expenses of 1.1 million decreased 1.5 million compared with the prior year period, largely due to losses on foreign exchange. Our tax rate was 84% in the quarter. This unusually high tax rate was driven by one-time tax adjustment, which if excluded would yield an effective tax rate of 14%. For modeling purposes, however, we suggest using a normalized tax rate of 24%.

Greg Weitzel: We are currently evaluating capital structure strategies to refinance those notes in the debt capital markets given current market conditions.

Greg Weitzel: While it's premature to provide specifics, the refinancing process is underway and is focused on balancing capital structure stability and optimizing our overall cost of capital.

Unknown Executive: Other expenses of $1.1 million decreased $1.5 million compared with the prior year period, largely due to losses on foreign exchange. Our tax rate was 84% in the quarter. This unusually high tax rate was driven by one-time tax adjustments, which, if excluded, would yield an effective tax rate of 14%.

Greg Weitzel: Other expenses of $1.1 million decreased $1.5 million compared with the prior year period, largely due to losses on foreign exchange.

Greg Weitzel: Our tax rate was 84% in the quarter. This unusually high tax rate was driven by one-time tax adjustments, which, if excluded, would yield an effective tax rate of 14%. For modeling purposes, however, we suggest using a normalized tax rate of 24%.

Greg Weitzel: Our tax rate was 84% in the quarter. This unusually high tax rate was driven by one time tax adjustment, which if excluded would yield an effective tax rate of 14%. For modeling purposes, however, we suggest using a normalized tax rate of 24%.

Greg Weitzel: Our tax rate was 84% in the quarter. This unusually high tax rate was driven by one-time tax adjustments, which if excluded, would yield an effective tax rate of 14%. For modeling purposes, however, we suggest using a normalized tax rate of 24%.

Greg Weitzel: For modeling purposes, however, we suggest using a normalized tax rate of 24%. At the end of the quarter, net debt was $1 billion, and available liquidity was $436 million. Our net leverage ratio, as defined in our credit agreement, was 4.1 times, down from 4.2 times in the prior quarter, mainly due to a lower revolver balance at the end of the quarter. We will continue to prioritize debt paydown with free cash flow and realize improving quarterly EBITDA on a year over year basis. We did not repurchase any shares during this quarter.

Greg Weitzel: At the end of the quarter, net debt was 1 billion and available liquidity was 436 million. Our net leverage ratio is defined in our credit agreement was 4.1 times, down from 4.2 times in the prior quarter, mainly due to a lower revolver balance at the end of the quarter. We will continue to prioritize debt pay down with recast flow and realize improving quarterly EBITDA on a year-over-year basis. We did not re-purchase any shares during the quarter. Our intent continues to be to opportunistically re-purchase shares to offset dilution, and the priority of cash flow remains on paying down debt.

Greg Weitzel: At the end of the quarter, net debt was 1 billion and available liquidity was 436 million. Our net leverage ratio is defined in our credit agreement was 4.1 times down from 4.2 times in the prior quarter, mainly due to a lower revolver balance at the end of the quarter. We will continue to prioritize debt pay down with recast flow and realize improving quarterly EBITDA on a year-over-year basis.

Greg Weitzel: And available liquidity was $436 million, and the company realized improving quarterly EBITDA on a year-over-year basis. With a greater net selling price versus input cost benefit and operational improvements realized earlier than forecast, Q2 exceeded expectations, and Q3 should now come in roughly in line with Q2, except for approximately $2 million of additional expense associated with annual site outages. And as mentioned previously, both sales and EBITDA will represent significant step-ups on a year-over-year basis for the remainder of 2024. With that said, Julie, I'll hand it back over to you for a closing remark.

Julie Schertell: At the end of the quarter, net debt was $1 billion, and available liquidity was $436 million.

Julie Schertell: Our net leverage ratio as defined in our credit agreement was 4.1 times, down from 4.2 times in the prior quarter, mainly due to a lower revolver balance at the end of the quarter.

Julie Schertell: We will continue to prioritize debt pay down with free cash flow and realize improving quarterly EBITDA on a year-over-year basis.

Greg Weitzel: We did not re-purchase any shares during the quarter. Our intent continues to be to opportunistically re-purchase shares to offset delusion and the priority of cash flow remains on paying down debt.

Julie Schertell: we did not repurchase any shares during the quarter our intent continues to be to opportunistically repurchase shares to offset dilution and the priority of cash flow remains on paying down debt

Unknown Executive: Our intent continues to be to opportunistically repurchase shares to offset dilution, and the priority of cash flow remains on paying down debt. Turning to our outlook for the back half of 2024, we expect net sales to be roughly in line with our Q2 levels. Subject to our normal year-end seasonality, with a greater net selling price versus input cost benefit and operational improvements realized earlier than forecast, Q2 exceeded expectations, and Q3 should now come in roughly in line with Q2, except for approximately $2 million of additional expense associated with annual site outages.

Greg Weitzel: Turning to our outlook for the back half of 2024, we expect net sales to be roughly in line with our Q2 levels, subject to our normal year-end seasonality. With a greater net selling price versus input cost benefit and operational improvements realized earlier than forecast, Q2 has exceeded expectations, and Q3 should now come in roughly in line with Q2, except for approximately 2 million of additional expense associated with annual side outages. Q4 adjusted EBITDA is expected to reflect normal seasonality. And as mentioned previously, both sales and EBITDA will represent significant step-ups on a year-over-year basis for the remainder of 2024.

Greg Weitzel: Turning to our outlook for the back half of 2024, we expect net sales to be roughly in line with our Q2 levels, subject to our normal year-end seasonality. With a greater net selling price versus input cost benefit and operational improvements realized earlier than forecast, Q2 has exceeded expectations, and Q3 should now come in roughly in line with Q2, except for approximately 2 million of additional expense associated with annual side outages. Q4 Adjusted EBITDA is expected to reflect normal seasonality. And as mentioned previously, both sales and EBITDA will represent significant step-ups on a year-over-year basis for the remainder of 2024.

Julie Schertell: Turning to our outlook for the back half of 2024, we expect net sales to be roughly in line with our Q2 levels, subject to our normal year-end seasonality.

Greg Weitzel: with a greater net selling price versus input cost benefit and operational improvements realized earlier than forecast q two has exceed expectations

Speaker Change: in q three should now come in roughly in line with q two except for approximately two million of additional expense associated with annual site outages

Unknown Executive: Q4 Adjusted EBITDA is expected to reflect normal seasonality, and as mentioned previously, both sales and EBITDA will represent significant step-ups on a year over year basis for the remainder of 2024. For modeling purposes, we are now planning for 2024 full-year capital expenditures of approximately $60 million. We expect our 2024 full-year interest expense to be around $75 million, and our depreciation and amortization expense to be around $100 million. With that said, Julie, I'll hand it back over to you for a closing remark. Thanks, Greg.

Greg Weitzel: For modeling purposes, we are now planning for 2024 full-year capital expenditures of approximately 60 million. We expect our 2024 full-year interest expense to be around 75 million, and our depreciation and amortization expense to be around 100 million.

Julie Schertell: With that said, Julie, I'll hand it back over to you for closing remarks. Thanks, Greg. What you should take away from this call is that while demand has improved, there are still headwinds, and we're focused on those elements we can control: quality, service, cost, new products, and sharegames. This quarter demonstrated the impacts of our actions over the past two years, creating improved operating leverage and a more agile company. I also provide concrete examples of the results of the team's efforts this quarter to highlight some of our recent wins that will serve us well into the future.

Julie Schertell: With that said, Julie, I'll hand it back over to you for a closing remarks. Thanks, Greg. What you should take away from this call is that while demand has improved, there are still headwinds, and we're focused on those elements we can control, quality, service, cost, new products, and sharegames.

Julie Schertell: Thanks, Greg. What you should take away from this call is that while demand has improved, there are still headwinds, and we're focused on those elements we can control – quality, service, cost, new products, and share gains. This quarter demonstrated the impacts of our actions over the past two years, creating improved operating leverage and a more agile company. I also provided concrete examples of the results of the team's efforts this quarter to highlight some of our recent wins that will serve us well into the future. I'm encouraged by our performance and excited about the opportunities that lie ahead. Thank you for joining us this morning, and please open the line for questions.

Julie Schertell: This quarter demonstrated the impacts of our actions over the past two years, creating improved operating leverage and a more agile company. I also provide concrete examples of the results of the team's efforts this quarter to highlight some of our recent wins that will serve us well into the future. I'm encouraged by our performance and excited about the opportunities that lie ahead.

Julie Schertell: I'm encouraged by our performance and excited about the opportunities that lie ahead.

Julie Schertell: I am encouraged by our performance and excited about the opportunities that lie ahead.

Julie Schertell: Thank you for joining us this morning, and please open the line for questions.

Unknown Executive: Thank you for joining us this morning, and please open the line for questions.

Julie Schertell: Thank you for joining us this morning, and please open the line for questions.

Unknown Executive: Thank you very much, Julie. If you would like to ask a question, you may press Star 1 on your telephone keypad now. If you change your mind, please press Star T.

Unknown Executive: Thank you very much, Julie. If you would like to ask a question, you may press Star 1 on your telephone keypad now. If you change your mind, please press Star T. When preparing to ask your question, please ensure your device is immutable locally.

Operator: Thank you very much, Julie. If you would like to ask a question, you may press star 1 on your telephone keypad now. If you change your mind, please press star 2. When preparing to ask you a question, please ensure your device is unmuted locally. We have the first question from Daniel Harriman with Fidelity. Your line is open.

Julie Schertell: Thank you very much Julie if you would like to ask a question you May press star one on VITAS when key patent.

Julie Schertell: Have you changed your mind, please turn stall when comparing to asking a question. Please ensure your devices and mute locally.

Unknown Executive: When preparing to ask your question, please ensure your device is immutable locally.

Daniel Harriman: We have the first question from Daniel Harriman with stability. Your line is open.

Julie Schertell: We have the first question from Daniel Harriman with stability. Your line is open. Hey, good morning, Danny Gregg and Chris. Thanks so much for the details. I know Gregg touched on this a little bit, but Julie, if you look back at Q1, you mentioned that Q3 may be your best chance to approach that 70 million and quarterly EBITDA. You obviously got really close to that and Q2. Could you go a little bit deeper and provide some more details related to your expectation for profitability in the second half of the year?

Unknown Executive: We have the first question from Daniel Harriman on Fidelity. Your line is open.

Speaker Change: We have the first question from Daniel Hollywood, which Sidoti Your line is open.

Julie Schertell: Hey, good morning, Danny, Gregg, and Chris. Thanks so much for the details. I know Gregg touched on this a little bit, but Julie, if you look back at Q1, you mentioned that Q3 may be your best chance to approach that 70 million and quarterly EBITDA. You obviously got really close to that and Q2.

Daniel Harriman: Hey, good morning, Greg and Chris. Thanks so much for the details. I know Greg touched on this a little bit, but Julie, if you look back at Q1, you mentioned that Q3 may be your best chance to approach that $70 million in quarterly EBITDA. You obviously got really close to that in Q2, so could you go a little bit deeper and provide some more details related to your expectations for profitability in the second half of the year?

Daniel Harriman: Hey, good morning, Dan, Greg and growth. Thanks, so much for the details.

Daniel Harriman: I know Greg touched on this a little bit, but Julian just if you look back at Q1, you mentioned that Q3 may be your best chance to approach 70 million in quarterly EBITDA.

Daniel Harriman: You, obviously got really close to that in Q2. So could you go a little bit deeper and provide some more details related to your expectations with profitability in the second half of the year.

Julie Schertell: Could you go a little bit deeper and provide some more details related to your expectation for profitability in the second half of the year? Sure. I would tell you that our message remains the same in the sense that Q2, Q3, we expect to be our strongest quarters. Q2 did exceed expectations, but I would expect Q3 to be similar, with the exception of what Greg mentioned, which is some annual outages in Q3, one of which moved from Q2 to Q3. So there was a little bit of a timing shift. The exceedance in Q2 was really driven by some price and input timing and manage, as well as some upside on consumer shipments that were really strong this quarter.

Julie Schertell: Sure. I would tell you that our message remains the same in the sense that Q2, Q3 will be our strongest quarter. Q2 did exceed expectations, but I would expect Q3 to be similar with the exception of what Greg mentioned, which is some annual outages in Q3, one of which moved from Q2 to Q3. So there was a little bit of a timing shift. The exceedance in Q2 was really driven by some price and input timing advantages, as well as some upside on consumer shipments that were really strong this quarter.

Unknown Executive: Sure.

Julie Schertell: Sure. I would tell you that our message remains the same in the sense that Q2, Q3, we expect to be our strongest quarters. Q2 did exceed expectations, but I would expect Q3 to be similar with the exception of what Greg mentioned, which is some annual outages in Q3, one of which moved from Q2, Q3. So there was a little bit of a timing shift. The exceedance in Q2 was really driven by some price and input timing and manage, as well as some upside on consumer shipments that were really strong this quarter.

Speaker Change: I would tell you that our message remains the same in the sense that Q2 Q3, we expect to be our strongest quarter Q2 did exceed expectations, but.

Julie Schertell: But I would expect Q3 to be similar with the exception of what Greg mentioned, which is some annual outages in Q3, one of which moved from Q2 to Q3. So there was a little bit of a timing shift.

Speaker Change: DXP Exceedance in Q2 was really driven by some price and input timing advantage as well as some upside on consumer shipments that were really strong this quarter. So some of that's just timing I am pleased to have it in the bank, but the shape just moved a little bit more towards Q2. The combination of the two combined will be exactly as is.

Julie Schertell: So some of that's just timing. I'm pleased to have it in the bank, but the shape just moved a little bit more towards Q2. The combination of the two combined will be exactly as we've communicated in the past. Okay, great. Thanks so much. And we'll just one more quick one for me from a demand generation perspective and these investments that you're making. How should we think about that in terms of like a payback period?

Julie Schertell: So some of that's just timing. I'm pleased to have it in the bank, but the shape just moved a little bit more towards Q2. The combination of the two will be exactly as we've communicated in the past.

Julie Schertell: We've communicated in the past.

Unknown Executive: Okay, great. Thanks so much.

Unknown Executive: Okay, great. Thanks so much. And then, from a demand generation perspective and these investments that you're making, how should we think about that in terms of, like, a payback period?

Speaker Change: Okay, great. Thanks, So much and then just one more quick one for me from a demand generation perspective in these investments that you're making how should we think about that in terms of like the payback period.

Julie Schertell: And we'll just one more quick one for me from a demand generation perspective, and these investments that you're making. How should we think about that in terms of like a payback period? Sure. So there's a number of investments we've talked about from a growth standpoint. And we buy those towards our growth platform. So that's infiltration, release liners, and some of our specialty capes areas where we have the greatest right to win and the strongest market conditions. The two we've talked about in the past, the first one is a fine cyber meltblown line in Germany. It's a sister line to three other meltblown assets.

Unknown Executive: Sure. So there's a number of investments we've talked about from a growth standpoint, and we bias those towards our growth platform. So that's infiltration, release liners, and some of our specialty tapes areas where we have the greatest right to win and the strongest market conditions. The two we've talked about in the past, the first one is a fine cyber meltblown line in Germany.

Speaker Change: Sure. So there's a number of investments we've talked about from a growth standpoint, and we buy so towards our growth platform. So thats infiltration release minors and some of our specialty tapes areas, where we have the greatest right to win and the strongest market conditions. The two we've talked about in the past.

Julie Schertell: Sure. So there's a number of investments we've talked about from a growth standpoint. And we buy those towards our growth platform. So that's infiltration, release liners, and some of our specialty capes areas where we have the greatest right to win and the strongest market conditions. The two we've talked about in the past, the first one is a fine cyber meltblown line in Germany. It's a sister line to three other meltblown assets.

Speaker Change: The first one is assigned cyber melt blown line in Germany, It's a sister line to three other melt blown asset so it's known technology.

Unknown Executive: It's a sister line to three other meltblown assets, so it's known technology. It supports our filtration growth, which was up 8% in this most recent quarter. And the second one that we've talked about in the past is the release liner coder in Mexico. Both of these assets have now started. We're qualifying customers. The Mexico asset is really about geographic expansion into North America and South America, and release liners continue to grow nicely for us as well. It was up 5% in Q2, and longer term, it's been up about 10%.

Julie Schertell: So it's known technologies. It supports our filtration growth, which was up 8 percent in this most recent quarter. And the second one that we've talked about in the past is the release liner coder in Mexico. Both of these assets have started up with qualifying customers. The Mexico asset is really about geographic expansion into North America and South America. And release liners continues to grow nicely for as well. It was up 5 percent in Q2, and longer term has been up about 10 percent. Combined, those two investments represent about 50 million dollars of revenue. And they continued growth in these categories, which is built into our long-term outlook.

Speaker Change: It supports our filtration growth, which was up 8% in this most recent quarter and the second one that we've talked about in the past is the release liner cutter in Mexico. Both of these assets have started up or qualifying customers. The Mexico asset is really about geographic expansion into North America and south.

Speaker Change: <unk> and release signers continues to grow nicely for us as well it was up 5% in Q2 and longer term, it's been up about 10%.

Unknown Executive: Combined, those two investments represent about $50 million of revenue and continued growth in these categories, which is built into our long-term outlook. The most recent two investments I mentioned on this call. The first one is a tape investment in Italy. It's a different technology that replaces solvent-based adhesive technology. It creates an environment for higher temperature insulation, for greater abrasion resistance, and sound dampening performance, which is extremely important in electric cars.

Julie Schertell: Combined those two investments represent about 50 million dollars of revenue. And they continued growth in these categories, which is built into our long-term outlook. The most recent two investments I mentioned on this call, the first one is at a tape investment in Italy. It's a different technology that replaces solvent-based adhesive technology. It creates an environment for higher temperature insulation for greater abrasion resistance and sound dampening performance, which is extremely important in electric cars.

Speaker Change: Combined those two investments represent about $50 million of revenue and the continued growth in these categories, which is built into our long term outlook.

Julie Schertell: The most recent two investments I mentioned on this call, the first one is at a tape investment in Italy. It's a different technology that replaces solvent-based adhesive technology. It creates an environment for higher temperature insulation for greater abrasion resistance and sound dampening performance, which is extremely important in electric cars. It also supports our ESG efforts and work by eliminating volatile organic compounds, which is critical for the automotive industry. The project is pretty low cost under $5 million. It has a three-year payback, and it's new technology that will qualify and then expect to fill it within about five years after startup, which is at a pretty normal pace for that business.

Speaker Change: The most recent two investments I mentioned on this call. The first one is a tape investments in Italy, It's a <unk>.

Speaker Change: <unk> technology that replaces solvent based adhesive technology it creates an environment for higher temperature installation for greater abrasion resistance.

Unknown Executive: And sound dampening performance, which is extremely important in electric cars.

Unknown Executive: It also supports our ESG efforts and works by eliminating volatile organic compounds, which is critical for the automotive industry. The project is pretty low-cost, under $5 million. It has about a three-year payback, and it's new technology that will qualify and then expect to fill it within about five years after startup, which is at a pretty normal pace for that business. The fourth investment I mentioned was the expansion of our Nautex filtration media.

Julie Schertell: It also supports our ESG efforts and work by eliminating volatile organic compounds, which is critical for the automotive industry. The project is pretty low cost under $5 million. It has a three-year payback and it's new technology that will qualify and then expect to fill it within about five years after startup, which is at a pretty normal pace for that business. The fourth investment I mentioned was expansion of our now tech filtration media and this is following a similar investment that we made in China of the same technology and asset in 2023.

Speaker Change: It also supports our ESG efforts and work by eliminating volatile volatile organic compounds, which is critical for the.

Unknown Executive: The automotive.

Speaker Change: Industry the project, it's pretty low cost under $5 million. It has about a three year payback.

Speaker Change: It's a new technology that will qualify and then expect to fill out within about five years after start up which is at a pretty normal pace for that business.

Julie Schertell: The fourth investment I mentioned was expansion of our now tech filtration media, and this is following a similar investment that we made in China of the same technology and asset in 2023. So again, sister assets that are complimentary to our current installed base. This is driven by increased demand in reverse osmosis, water filtration demand. It starts up in the late 2025 as well, has a similar payback period of about three years. I'm really pleased to have these kinds of growth investments. I think they set us up extremely well for the future, and the teams do this well.

Speaker Change: The fourth investment I mentioned was expansion of.

Unknown Executive: And this is following a similar investment that we made in China of the same technology and asset in 2023. So again, sister assets that are complementary to our current installed base. This is driven by increased demand and reverse osmosis water filtration demand.

Speaker Change: Now tax filtration media and this is following a similar investment that we made in China of this same technology in asset in 2023. So again just your assets that are complementary to our current installed base.

Julie Schertell: So again, sister assets that are complimentary to our current installed base. This is driven by increased demand in reverse osmosis, water filtration demand. It starts up in the late 2025 as well, has a similar payback period about three years. I'm really pleased to have these kind of growth investments. I think they set us up extremely well for the future and the teams do this well. We have strong engineering, we have strong commercial excellence, we have customer engagement and commitment prior to making investments in these most recent investments are fairly small.

Speaker Change: This was driven by increased demand in reverse osmosis water filtration demand.

Unknown Executive: It starts up in late 2025 as well, and has a similar payback period, about three years. I'm really pleased to have these kinds of growth investments. I think they set us up extremely well for the future. And the teams do this very well.

Speaker Change: It starts theft in late 2025, as well has a similar payback period about three years.

Julie Schertell: They fit into our capital plans and they provide continued momentum for those businesses. And for our teams internally. So strong payback, fairly minimal investments in the most recent two, the first two were much larger, those have started up and are performing well and actually ahead of plan, particularly an expansion in North America and release liners. Perfect, thanks again and that's a luck in the quarter. Yeah, that's perfect. Thank you so much. Okay. Thank you.

Speaker Change: Really pleased to have these kind of growth investments I think they set us up extremely well for the future and the teams do this well we have strong engineering, we have strong commercial excellence with customer engagement and commitment prior to making the investments and these most recent investments are fairly small they fit into our capital plans.

Unknown Executive: We have strong engineering. We have strong commercial excellence. We have customer engagement and commitment prior to making the investment, and these most recent investments are fairly small. They fit into our capital plans, and they provide continued momentum for those businesses and for our teams internally. So, strong paybacks, and fairly minimal investments in the most recent two. The first two were much larger, but those have started up and are performing well and actually ahead of plan, particularly in the expansion in North America and the release of liners.

Julie Schertell: We have strong engineering, we have strong commercial excellence, we have customer engagement and commitment. Prior to making investments in these most recent investments, are fairly small. They fit into our capital plans, and they provide continued momentum for those businesses. And for our teams internally. So strong payback, fairly minimal investments in the most recent two. The first two were much larger; those have started up and are performing well and actually ahead of plan, particularly an expansion in North America and release liners.

Speaker Change: And they provide continued momentum for those businesses and for our teams internally so strong payback fairly minimal investments in the most recent two the first two were much larger those have started up and are performing well and actually ahead of plan, particularly in the expansion in North America and release liners.

Unknown Executive: Okay.

Unknown Executive: Perfect, thanks again, and that's a luck in the quarter. Yeah, that's perfect. Thank you so much. Okay.

Unknown Executive: Perfect, thanks again and best of luck in the quarter. Yeah, that's perfect. Thank you so much. Okay.

Julie Schertell: Thanks, again and best of luck in the quarter.

Speaker Change: Yeah, that's perfect. Thank you so much.

Unknown Executive: Okay.

Unknown Executive: Thank you. The next question is from John Tom 110 with CJSW Securities. Your line is open. Hi, good morning. This is Justin on for John. How are you? I'm good. How are you, Justin? Good, thanks. We're just hoping for some more color on the prepared remarks. Are you seeing weakness or hesitation from customers in any area? You know, given recent market concernation and some higher uncertainty? I mean, we're definitely seeing caution from our customers. I'd say we have, you know, greater strengths in North America than we see right now in Europe. And we see caution from our customers, you know, a caution around building too much inventory, which was part of the challenge last year that created some of the destocking channel.

Operator: Thank you. The next question is from John Tan-Wong Tan with CJSW Securities.

Unknown Executive: Thank you. The next question is from John Tan-Wong Tan with CJSW Securities.

Speaker Change: Thank you. The next question is from Jon <unk> with CJS Securities. Your line is open.

Unknown Executive: The next question is from John Tom 110 with CJSW Securities. Your line is open. Hi, good morning. This is Justin on for John. How are you? I'm good. How are you Justin? Good, thanks.

Justin Ages: Hi, good morning. This is Justin on behalf of John. How are you?

Speaker Change: Hi, Good morning. This is Justin on for John how are you.

Unknown Executive: I'm good. How are you, Justin?

Unknown Executive: I'm good how are you Justin.

Unknown Executive: Good, thanks. We're just hoping for some more color on the prepared remarks. Are you seeing weakness or hesitation from customers in any area, you know, given recent market consternation and some higher uncertainty?

Justin: Good thanks.

Julie Schertell: We're just hoping for some more color on the prepared remarks. Are you seeing weakness or hesitation from customers in any area? You know, given recent market concernation and some higher uncertainty? I mean, we're definitely seeing caution from our customers. I'd say we have, you know, greater strengths in North America than we see right now in Europe. And we see caution from our customers, you know, a caution around building too much inventory, which was part of the challenge last year that created some of the destocking channel.

Speaker Change: Just hoping for some more color on the prepared remarks are you seeing weakness or hesitation from customers in the area.

Unknown Executive: Given.

Speaker Change: Recent market consternation and some higher uncertainty.

Unknown Executive: I mean, we're definitely seeing caution from our customers. But I'd say we have, you know, greater strength in North America than we do right now in Europe.

Speaker Change: I mean, we're definitely seeing caution from our customers I would say, we have greater strength in North America than we see right now in Europe.

Speaker Change: And we see caution from our customers.

Speaker Change: Our caution around building too much inventory, which was part of the challenge last year that created some of the Destocking.

Julie Schertell: You know, second quarter was sequential volume improvement and basically flat year-over-year growth in almost all of our end markets. And that was led by filtration release liners, tape, and also health care. We are continuing, as I just talked about, to invest for the future in those markets that provide the greatest opportunity. And I would say that is infiltration release liners and some of our automotive tapes as well as optical films. Our softest categories are going to be in areas like die sublimation and some of our paper subcategories. And that's not surprising, just giving the historical performance of those markets.

Julie Schertell: You know, second quarter was sequential volume improvement and basically flat year over year growth in almost all of our end markets. And that was led by filtration release liners tape and also health care. We are continuing as I just talked about to invest for the future in those markets that provide the greatest opportunity. And I would say that is infiltration release liners and some of our automotive tapes as well as optical films.

Unknown Executive: Challenges.

Speaker Change: Quarter was.

Speaker Change: Sequential volume improvement and basically flat year over year growth in almost all of our end markets and that was led by filtration release signers tapes and also healthcare.

Unknown Executive: And we see caution from our customers around building too much inventory, which was part of the challenge last year that created some of the destocking challenges. You know, second quarter was sequential volume improvement and basically flat year over year. Growth in almost all of our end markets, and that was led by filtration, release liners, tapes, and also health care. We are continuing, as I just talked about, to invest for the future in those markets that provide the greatest opportunities.

Speaker Change: We are continuing as I, just talked about to invest for the future in those markets that provide the greatest opportunity and I would say that is in filtration really signers in some of our automotive tapes as well as optical films.

Julie Schertell: Our softest categories are going to be in areas like die sublimation and some of our paper subcategories. And that's not surprising just giving the historical performance of those markets. I think the really good news there is that we know how to manage that business. We have the leading share in the premium space and paper and we continue to grow in different channels into teacher tools crafting journals and organizational tools that have upside potential even greater than traditional paper market.

Speaker Change: Our softest categories are going to be in areas like dye sublimation and some of our papers subcategories and that's not surprising just given the historical performance of those markets I think the really good news. There is that we know how to manage that business and we have the leading share in the premium space in paper and we continue to grow.

Unknown Executive: That's helpful. Thanks.

Unknown Executive: And I would say that those are in filtration, release liners, and some of our automotive tapes, as well as optical films. Our softest categories are going to be in areas like dye sublimation and some of our paper subcategories. And that's not surprising. Just given the historical performance of those markets, I think the really good news there is that we know how to run that business. We have the leading share in the premium space in paper, and we continue to grow in different channels into teacher tools, crafting journals, and organizational tools that have upside potential even greater than traditional paper markets.

Julie Schertell: I think the really good news there is that we know how to manage that business. We have the leading share in the premium space and paper, and we continue to grow in different channels into teacher tools, crafting journals, and organizational tools that have upside potential even greater than the traditional paper market.

Speaker Change: In different channels.

Speaker Change: A teacher tools crafting journals and organizational tools that have upside potential even greater than traditional paper market.

Unknown Executive: That's helpful. Thanks.

Unknown Executive: And then one more question, if I could. Can you just talk about if there's any changes to your cash flow expectations for the year?

Speaker Change: That's helpful. Thanks, and then one more if I could.

Julie Schertell: And then one more if I could. Can just talk about if there's any changes to your cash flow expectations for the year? No, really, no significant changes. And this quarter was a very good quarter for cash flow, with free cash flow of about 37 million for the quarter. As far as the full full year, really, no significant changes. Our capital is a little bit more. Our cap X is a little more back and loaded than front and loaded. So we'll see that pick up some. We did also have a benefit in Q2 from accrued liabilities and accounts payable that you would not continue in Q3 and Q4.

Unknown Executive: And then one more if I could. Can just talk about if there's any changes to your cash flow expectations for the year? No, really, no significant changes. And this quarter was a very good quarter for cash flow with free cash flow of about 37 million for the quarter. As far as the full full year, really, no significant changes. Our capital is a little bit more. Our cap X is a little more back and loaded than front and loaded.

Unknown Executive: Can you just talk about what.

Speaker Change: If there is any changes to your cash cash flow expectations for the year.

Unknown Executive: No, really, no, no significant changes. And this quarter was a very good, good quarter for cash flow with, you know, free cash flow of about 37 million for the quarter.

Speaker Change: No really no no significant changes and this quarter was a very good.

Speaker Change: Quarter for cash flow.

Speaker Change: With the free cash flow of about $37 million for the for the quarter.

Unknown Executive: Um, as far as the full full year, really no, no significant changes. Our capital is a little bit more. Our cap cap X is a little more back end loaded than front end loaded, so we'll see that pick up some. Uh, we did also have a benefit in Q2 from, uh, accrued liabilities and accounts payable that you would not continue in Q3 and Q4. So, I expect Q3 and Q4 to be positive free cash flow months, but not to the same extent as Q2.

Speaker Change: As far as the.

Speaker Change: Full year really no no significant changes our capital is a little bit more.

Speaker Change: Capex is a little more backend loaded than front end loaded so we'll see that pick up. Some we did also have a benefit in Q2 from accrued liabilities and accounts payable that you would not continue in Q3 and Q4, So I expect Q3 and Q4 to be.

Unknown Executive: So we'll see that pick up some. We did also have a benefit in Q2 from accrued liabilities and accounts payable that you would not continue in Q3 and Q4. So I expect Q3 and Q4 to be your positive cash flow once, but not to the same extent as Q2.

Unknown Executive: So I expect Q3 and Q4 to be your positive cash flow once, but not to the same extent as Q2. Okay, I appreciate the color. Thanks for taking the question. Sure. Thanks, Justin.

Speaker Change: Positive free cash flow months, but not not to the same extent as Q2.

Unknown Executive: Okay, I appreciate the color. Thanks for taking the question.

Unknown Executive: Okay, I appreciate the color. Thanks for taking the question. Sure. Thanks, Justin. Thank you.

Speaker Change: Okay I appreciate the color thanks for taking the question.

Unknown Executive: Sure. Thanks, Justin. Thank you. We currently have no further questions, so I'll hand it back to Julie for closing remarks.

Speaker Change: Sure. Thanks, Justin.

Unknown Executive: Thank you. We currently have no further questions.

Unknown Executive: We currently have no further questions.

Speaker Change: We currently have no further question back to Julia for closing remarks.

Julie Schertell: I have back to Julie for closing remarks. Yes, thank you for joining us this morning. We look forward to connecting with you throughout the quarter.

Julie Schertell: Yes, thank you for joining us this morning. We look forward to connecting with you throughout the quarter and on our next earnings call in November. Hope you all have a wonderful day.

Julie Schertell: And on our next earnings call in November, hope you all have a wonderful day. Thank you again, Julie.

Speaker Change: Yes. Thank you for joining us. This morning, we look forward to connecting with you throughout the quarter and on our next earnings call in November and Hope you all have a wonderful day.

Julie Schertell: And on our next earnings call in November, hope you all have a wonderful day. Thank you again, Julie.

Operator: Thank you again, Julie. This concludes today's call. Thank you all for joining us. You may now disconnect your line.

Unknown Executive: Thank you again, Julie. This concludes today's call. Thank you all for joining us. You may now disconnect your line.

Speaker Change: Thank you and Julie This concludes today's call. Thank you all for joining you may now disconnect your lines.

Unknown Executive: Yeah.

Unknown Executive: This concludes the.

Unknown Executive: This concludes the

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